UNITED STATES
Securities and
Exchange Commission
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement
Pursuant to Section 14(a) of the Securities
Exchange Act of
1934 (Amendment No. __ )
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Filed by
the Registrant |
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Filed
by a Party other than the Registrant |
Check the appropriate box: |
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Preliminary Proxy Statement |
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
GENERAL MILLS, INC.
(Name of Registrant
as Specified In Its Charter)
(Name of Person(s)
Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11. |
(1) Title of each class of securities to which
transaction applies: |
(2) Aggregate number of securities to which
transaction applies: |
(3) Per unit price or other underlying value
of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): |
(4) Proposed maximum aggregate value of transaction: |
(5) Total fee paid: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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General Mills
____________
Notice of 2015 Annual Meeting
and Proxy Statement
A LETTER FROM
OUR CHAIRMAN AND CEO |
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Dear Fellow Shareholder:
We will hold the General Mills 2015 Annual Meeting of Shareholders
at the Hilton Minneapolis, 1001 Marquette Avenue South, Minneapolis, Minnesota, on Tuesday, September 29, 2015, at 8:30 a.m. Central
Daylight Time. During the meeting, we will discuss each item of business described in this Proxy Statement, and we will give a
brief report on developments in our business.
In fiscal 2015, we have taken strategic actions to adapt to the changing
marketplace. We continue to put the consumer first as we renovate existing brands and develop new products. And we have streamlined
our organization to increase agility and deliver stronger growth in 2016. Furthermore, our board of directors approved a record
level of dividends in support of our objective of delivering strong returns to shareholders.
Thank you for your investment in our company. Whether or not you
expect to attend the Annual Meeting, please vote your proxy so your shares will be represented at the meeting.
August 17, 2015
Sincerely,
Kendall J. Powell
Chairman of the Board and Chief Executive
Officer
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
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NOTICE OF
2015 ANNUAL MEETING OF SHAREHOLDERS
Dear Fellow Shareholder:
The Annual Meeting of Shareholders of General Mills, Inc. will be
held on Tuesday, September 29, 2015, at 8:30 a.m., Central Daylight Time, at the Hilton Minneapolis, 1001 Marquette Avenue
South, Minneapolis, Minnesota. Shareholders will be asked to:
1. |
Elect as directors the 11 nominees named in the attached Proxy Statement; |
2. |
Cast an advisory vote on executive compensation; |
3. |
Ratify the appointment of KPMG LLP as General Mills’ independent registered public accounting firm for our fiscal year ending May 29, 2016; and |
4. |
Transact any other business that properly comes before the meeting. |
The record date for the Annual Meeting is July 31, 2015. If you held
General Mills stock at the close of business on that date, you are entitled to vote at the Annual Meeting.
Your vote is important. We encourage you to vote by proxy, even
if you plan to attend the meeting.
August 17, 2015
Sincerely,
Richard C. Allendorf
Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 29, 2015
Our Notice of 2015 Annual Meeting
of Shareholders, Proxy Statement and Annual Report to Shareholders are available on the General Mills website at www.generalmills.com
in the Investors section. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
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Agenda and Voting Recommendations
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Proposal
Number 2:
Advisory Vote on
Executive Compensation |
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Proposal
Number 3:
Ratify Appointment of the
Independent Registered Public
Accounting Firm |
The board of
directors unanimously recommends a vote FOR the resolution.
Additional information about executive compensation may be found on
page 21.
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The board of
directors unanimously recommends a vote FOR the resolution.
Additional information about the independent registered public accounting
firm may be found on page 53.
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GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
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Table of Contents
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
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The board of directors of General Mills,
Inc. (referred to as “General Mills,” “we,” “our,” “us” or the “company”)
is soliciting proxies for use at the Annual Meeting of Shareholders to be held on September 29, 2015. This Proxy Statement
summarizes the information you need to know to vote at the Annual Meeting. You do not need to attend the Annual Meeting to vote
your shares. We first mailed or made available the proxy materials on or about August 17, 2015.
PROPOSAL NUMBER 1 |
ELECTION OF DIRECTORS |
The 11 director nominees presented in this
proposal are recommended for election to the board. Incumbents Raymond V. Gilmartin, Judith Richards Hope and Hilda Ochoa-Brillembourg
will be retiring from the board effective as of the Annual Meeting, so they are not standing for re-election. David M. Cordani
was appointed to the board in November 2014, and he appears on the ballot for the first time.
We consider the depth and diversity
of experience on our board to be a key strength. We cultivate a balanced board of directors that has the appropriate skill
sets to discharge its responsibilities effectively. While each director comes from a unique background, the composition of the
board encompasses skills and experience in a number of important areas, including:
Senior Executive
Leadership |
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Consumer
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Financial
Expertise |
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Public Policy
Experience |
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Global
Perspective |
• We believe
that directors who have served as CEOs or senior executives are in a position to challenge management and contribute practical
insight into issues of business strategy and operations.
• They also
have access to important sources of market intelligence, analysis and relationships that benefit the company.
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• As a company
that relies on the strengths of our branded products, we seek directors who are familiar with the consumer packaged goods
industry, have global marketing and retail experience and have brand-building expertise.
• These directors
guide the company in assessing emerging trends and external forces.
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• We believe
that a strong understanding of finance and financial reporting processes is important for our directors.
• Our directors
have significant capital markets experience, corporate finance expertise and financial reporting backgrounds.
• A majority
of our audit committee members qualify as audit committee financial experts.
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• Directors with governmental and policymaking experience play an increasingly
important role on our board as our business becomes more heavily regulated and as our engagement with stakeholders continues
to expand. |
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• A significant
portion of the company’s future growth depends on its success in markets outside of the United States.
• Directors
with a global perspective help us make decisions on our strategic expansion into international markets.
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Each non-employee director is required to
demonstrate independence; integrity; experience and sound judgment in areas relevant to our businesses; a proven record of accomplishment;
willingness to speak one’s mind and commit sufficient time to the board; appreciation for the long-term interests of shareholders;
the ability to challenge and stimulate management; and the ability to work well with fellow directors.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
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Bringing together informed directors with
different perspectives, in a well-managed and constructive environment, fosters thoughtful and innovative decision making. We have
a policy of encouraging diversity of gender, ethnicity, age and background, as well as a range of tenures on the board to ensure
both continuity and fresh perspectives among our director nominees. Our director nominee slate exhibits a balanced mix of tenures,
and independent and diverse leadership:
BALANCED MIX OF TENURES |
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INDEPENDENT AND DIVERSE
LEADERSHIP |
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We plan thoughtfully for director succession
and board refreshment. In the past year, we have appointed two new directors to succeed retiring board members, and over
the next three years, we expect to appoint additional directors to succeed board members who will be retiring in accordance with
our director tenure policy. Director succession presents an opportunity to:
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Expand and replace key skills and experience, |
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Build on our record of board diversity, and |
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Maintain a balanced mix of tenures. |
To that end, our corporate governance committee
has developed a long-range succession plan to identify, recruit and appoint new directors who reflect our board composition guidelines
and director selection criteria. The committee also plans for the orderly succession of the lead director and of chairs for the
board’s five committees, providing for their identification, development and transition of responsibilities.
Our board has adopted an annual director
nomination process that promotes thoughtful and in-depth review of overall board composition and director nominees throughout the
year. At the beginning of the process, the corporate governance committee reviews the current board composition, using a skills
matrix to articulate search priorities for new director candidates. The committee identifies potential candidates using a search
firm and referrals, and interviews them to confirm their qualifications, interest and availability for board service. The committee
also reviews incumbent candidates and evaluates any changes in circumstances that may impact their candidacy. Upon a recommendation
from the committee, the board of directors approves the nomination of director candidates for election at the annual shareholders’
meeting.
ANNUAL DIRECTOR NOMINATION
PROCESS
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
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Our director nominees are presented below.
If unforeseen circumstances (such as death or disability) make it necessary for the board to substitute another person for any
of the nominees, the proxies have the authority to vote your shares for that other person.
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Bradbury
H. Anderson |
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Age: 66 |
Committees: Compensation
(Chair); Public Responsibility |
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Independent Director Since: 2007 |
Other Public Directorships:
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Best Buy Co., Inc.
Waste Management, Inc. |
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Background:
Bradbury H. Anderson served as Vice Chairman
and Chief Executive Officer of Best Buy Co., Inc., an electronics retailer, from 2002 until his retirement as Chief Executive Officer
in 2009, and as Vice Chairman in 2010. Mr. Anderson joined Best Buy in 1973. Prior to becoming Chief Executive Officer, he served
as Executive Vice President from 1986 to 1991 and President and Chief Operating Officer from 1991 to 2002.
Contributions to the Board:
• |
Mr. Anderson brings to the board over 30 years of valuable retail expertise, unique
consumer insights and brand-building experience. |
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During his tenure at Best Buy, Mr. Anderson helped to build the company from a local electronics
retailer into a Fortune 100 company with a very strong branded identity. |
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He also adds strong leadership capabilities, strategic planning experience and operating expertise. |
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R.
Kerry Clark |
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Age: 63 |
Committees: Corporate Governance
(Chair); Finance |
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Independent Director Since: 2009 |
Other Public Directorships: |
Avnet, Inc.
Anthem, Inc.
(formerly Wellpoint, Inc.)
Textron, Inc. |
Background:
R. Kerry Clark served as Chairman and Chief
Executive Officer of Cardinal Health, Inc., a provider of health care products and services, until his retirement in 2009. Mr.
Clark joined Cardinal Health in 2006 as President and Chief Executive Officer and became Chairman in 2007. Prior to that, Mr. Clark
had been with The Procter & Gamble Company, a consumer products company, since 1974. There, he held various positions including
President of P&G Asia; President, Global Market Development and Business Operations; and from 2004 to 2006, Vice Chairman of
the Board.
Contributions to the Board:
• |
Mr. Clark brings to the board business leadership, corporate strategy and operating
expertise, and a strong background in consumer packaged goods. |
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In particular, he has extensive experience in launching new products, brand-building, innovation,
marketing, and partnering with customers across sales channels. |
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Mr. Clark also lends a global business perspective, developed through his leadership of global
business operations at Procter & Gamble. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
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David
M. Cordani |
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Age: 49 |
Committees: Audit; Compensation |
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Independent Director Since: November 2014 |
Other Public Directorships: |
Cigna Corporation |
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Background:
David M. Cordani is President and Chief Executive
Officer of Cigna Corporation, a global health insurance and health services company. Mr. Cordani joined Cigna in 1991 and has held
a variety of finance and operating positions, including Chief Financial Officer for Cigna HealthCare and President and Chief Operating
Officer for Cigna Corporation. He was named Chief Executive Officer of Cigna Corporation in 2009. Prior to joining Cigna, he held
several senior staff positions at Coopers & Lybrand, an accounting firm.
Contributions to the Board:
• |
Based on his tenure as Chief Executive Officer of Cigna Corporation, Mr. Cordani
is attuned to the challenges of operating and growing a consumer-facing, S&P 500 company, and he brings current insights
on business leadership, strategic planning and corporate governance. |
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His career-long experience in the health services industry enables him to contribute insights
on health and wellness trends and their impact on businesses. |
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Mr. Cordani’s background as a former certified public accountant and chief financial
officer provides significant risk management and financial expertise to the audit committee. He is one of our audit committee
financial experts. |
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Paul
Danos |
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Age: 73 |
Committees: Public Responsibility
(Chair); Finance |
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Independent Director Since: 2004 |
Other Public Directorships: |
B. J.’s Wholesale Club, Inc.
(2004-2011) |
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Background:
Paul Danos is Dean Emeritus and Laurence
F. Whittemore Professor of Business Administration at Tuck School of Business at Dartmouth College, where he has taught since 1995.
Prior to that, Mr. Danos held academic positions at the University of Michigan from 1974 to 1995, the University of Texas from
1971 to 1974 and the University of New Orleans from 1970 to 1971.
Contributions to the Board:
• |
Mr. Danos brings to the board significant financial and accounting expertise and
a thoughtful approach to analyzing business models from this perspective. |
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Using his skills as a scholar and educator, Mr. Danos contributes to the board’s understanding
of accounting principles based on several decades of research and scholarship, most recently as a Dean at Dartmouth College
and before that as the Arthur Andersen Professor of Accounting at the University of Michigan. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
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Henrietta
H. Fore |
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Age: 66 |
Committees: Audit; Public
Responsibility |
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Independent Director Since: June 2014 |
Other Public Directorships: |
ExxonMobil Corporation
Theravance Biopharma, Inc.
Theravance, Inc.
(2010-June 2014) |
Background:
Henrietta H. Fore has been the Chairman and
Chief Executive Officer of Holsman International, a manufacturing, consulting and investment company operating in the U.S. and
international markets, since 2009. Ms. Fore also has held leadership positions in a number of U.S. government agencies, including
Administrator of the United States Agency for International Development (USAID) and Director of U.S. Foreign Assistance at the
Department of State from 2007 to 2009, the Under Secretary of State for Management from 2005 to 2007, and the 37th Director of
the U.S. Mint from 2001 to 2005. She was President of Stockton Products, a manufacturer and distributor of steel and wire products,
from 1986 to 1989, and again from 1993 to 2001, and she currently serves as Chairman. Ms. Fore also serves as Global Co-Chair of
the Asia Society and of WomenCorporateDirectors.
Contributions to the Board:
• |
Ms. Fore contributes a valuable perspective on public policy and public-private
collaboration, based on her tenure at USAID, where she oversaw partnerships and alliances with over 3,500 companies and 200
U.S.-based private volunteer organizations, and at the Department of State, where she was the Secretary’s principal
advisor on both foreign assistance and management issues. |
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These experiences, along with her service at the Asia Society, inform her global perspective
on markets around the world. |
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As an active chairman and chief executive officer who manages domestic and international operations,
Ms. Fore offers current insights on leadership, strategic planning and governance. |
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Heidi
G. Miller |
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Age: 62 |
Committees: Audit (Chair);
Finance |
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Independent Director Since: 1999 |
Other Public Directorships: |
HSBC Holdings plc
The Progressive Corporation
(2011-September 2014) |
Background:
Heidi G. Miller served as President of JPMorgan
International, a division of global financial services firm JPMorgan Chase & Co., from 2010 until her retirement in 2012. She
served as Executive Vice President, ceo, Treasury & Security Services, of JPMorgan Chase from 2004 to 2010. From 2002 to 2004,
Ms. Miller served as Executive Vice President and Chief Financial Officer of Bank One Corporation. Previously, she had been Chief
Financial Officer of Citigroup Inc.
Contributions to the Board:
• |
Ms. Miller’s financial expertise, risk management skills and international
business background are valuable assets to the board, the audit committee and the finance committee. |
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In particular, Ms. Miller possesses extensive experience in banking and finance in emerging
markets. After earning a doctorate in Latin American History at Yale University, Ms. Miller spent 13 years with the Latin
America Division of Chemical Bank, serving most recently as managing director and head of the emerging markets structured
finance group. As head of Treasury & Security Services at JPMorgan Chase, she led the successful launch of a variety of
new products and the group’s global expansion, particularly in Asia. As President of JPMorgan International, she focused
on growth in emerging markets and expanding the bank’s global corporate bank. |
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She is one of our audit committee financial experts and serves as the chair of our audit committee. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
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Steve
Odland |
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Age: 56 |
Committees: Compensation; Corporate Governance |
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Independent Director Since: 2004 |
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Background:
Steve Odland has been President and Chief
Executive Officer of the Committee for Economic Development, a non-profit, public policy organization, since 2013. From 2011 to
2012, he was an Adjunct Professor in the graduate school of business at Lynn University and at Florida Atlantic University. Mr.
Odland served as Chairman and Chief Executive Officer of Office Depot, Inc., an office merchandise retailer, from 2005 until 2010.
From 2001 to 2005, he was Chairman and Chief Executive Officer of AutoZone, Inc., an auto parts retailer. Prior to that, he served
as an executive with Ahold U.S.A., an international food retailer, from 1998 to 2000, and as President of the Foodservice Division
of Sara Lee Bakery from 1997 to 1998. He was employed by The Quaker Oats Company from 1981 to 1996.
Contributions to the Board:
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Based on his tenure as Chairman and Chief Executive Officer at Office Depot and
AutoZone, Mr. Odland brings business leadership and strategic planning skills, retail expertise and an operating background
to the board. |
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He provides valuable insights into consumer products marketing, brand-building, Internet marketing
and sales, food service and international management from his executive roles in the food industry at Ahold, Quaker Oats and
Sara Lee. |
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Mr. Odland also lends expertise on corporate financial planning and corporate governance. |
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Kendall
J. Powell |
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Age: 61 |
Other Public Directorships: Medtronic, Inc. |
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Director Since: 2006 |
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Background:
Kendall J. Powell is Chairman of the Board
and Chief Executive Officer of General Mills. Mr. Powell joined General Mills in 1979 and served in a variety of positions before
becoming a Vice President in 1990. He became President of the Yoplait division in 1996, President of the Big G cereal division
in 1997, and Senior Vice President of General Mills in 1998. From 1999 to 2004, he served as Chief Executive Officer of Cereal
Partners Worldwide (CPW), our joint venture with Nestlé. He returned from CPW in 2004 and was appointed Executive Vice President.
Mr. Powell was appointed President and Chief Operating Officer of General Mills with overall global operating responsibility for
the company in 2006, Chief Executive Officer in 2007 and Chairman of the Board in 2008.
Contributions to the Board:
• |
Mr. Powell’s career-long dedication to the company; wide-ranging familiarity
with the business; experience with the strategies that drive growth, both in the U.S. and internationally; and his collaborative
working style have positioned him well to serve as our Chairman and Chief Executive Officer. |
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Prior to his current role, Mr. Powell served in a number of key marketing and operational
roles in the company’s U.S. Retail divisions. |
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He also spent eleven years abroad focusing on our international operations, including five
years as Chief Executive Officer of CPW. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
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Michael D. Rose, Lead Director |
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Age: 73 |
Committees: Compensation;
Corporate Governance |
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Independent Director Since: 1985-2000
and
since 2004 |
Other Public Directorships: |
Ryman Hospitality Properties, Inc. (formerly Gaylord Entertainment Company)
Darden Restaurants, Inc. (1995-October 2014) |
Background:
Michael D. Rose served as Chairman of the
Board of First Horizon National Corporation, a banking and financial services company, and its subsidiary, First Tennessee Bank
National Association, from 2007 until his retirement in 2012. Since 1998, Mr. Rose has been a private investor and Chairman of
Midaro Investments, Inc., a privately held investment firm.
Contributions to the Board:
• |
As our independent lead director, Mr. Rose draws on his leadership, strategic
planning and governance expertise to foster active discussion and collaboration among the non-employee directors on the board
and to serve as an effective liaison with management. |
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Mr. Rose has served as chairman for a number of public companies, most recently at First Horizon
and Gaylord Entertainment, a leading hospitality and entertainment company. |
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His knowledge of retail and consumer issues, accumulated over years of leadership roles in
consumer service and hospitality companies, has enriched board discussions on marketing and brand-building strategies. |
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Robert
L. Ryan |
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Age: 72 |
Committees: Finance (Chair);
Audit |
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Independent Director Since: 2005 |
Other Public Directorships: |
Stanley Black & Decker, Inc.
Citigroup Inc. (2007-April 2015)
Hewlett-Packard Company (2004-2011) |
Background:
Robert L. Ryan served as Senior Vice President
and Chief Financial Officer of Medtronic, Inc., a medical technology company, from 1993 until his retirement in 2005. Mr. Ryan
was Vice President, Finance, and Chief Financial Officer of Union Texas Petroleum Corp. from 1984 to 1993, Controller from 1983
to 1984 and Treasurer from 1982 to 1983. Prior to 1982, Mr. Ryan was Vice President at Citibank and was a management consultant
for McKinsey & Company.
Contributions to the Board:
• |
As former Chief Financial Officer at Medtronic and Union Texas Petroleum, Mr.
Ryan brings significant audit, financial reporting, corporate finance and risk management experience to the board, including
experience overseeing the controller, global audit, tax and treasury functions at these public companies. |
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He has a well-developed understanding of the board’s role and responsibilities based
on his service on other public company boards. |
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He is one of our audit committee financial experts, and he serves as the chair of our finance
committee. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
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Dorothy
A. Terrell |
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Age: 70 |
Committees: Corporate Governance;
Public Responsibility |
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Independent Director Since: 1994 |
Other Public Directorships: |
Herman Miller, Inc. |
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Background:
Dorothy A. Terrell is the Managing Partner
of FirstCap Advisors, a venture capital and advisory services firm that she founded in 2010. She was a limited partner of First
Light Capital, a venture capital firm, from 2003 until 2010. Ms. Terrell served as President and Chief Executive Officer of the
Initiative for a Competitive Inner City, a non-profit organization focused on inner city business development, from 2005 until
2007, and as Senior Vice President, Worldwide Sales, and President, Platform & Services Group, of NMS Communications, a producer
of hardware and software component products for telecommunications applications, from 1998 until 2002. She served in various executive
management capacities at Sun Microsystems, Inc. from 1991 to 1997 and Digital Equipment Corporation from 1976 to 1991.
Contributions to the Board:
• |
During her leadership roles at FirstCap Advisors, First Light and at three premier
technology companies, Ms. Terrell helped businesses reach profitability, and she brings a breadth of experience in e-commerce,
international marketing, plant management, manufacturing and enterprise risk assessment to the board’s strategic discussions. |
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Ms. Terrell’s commitment to inner city business development and healthcare causes has
positioned her to be an informed and effective member of our public responsibility committee. |
The board of directors unanimously recommends
a vote FOR each director nominee.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
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CORPORATE GOVERNANCE
Our corporate governance program provides an important framework
within which our board of directors and management pursue the strategic objectives of General Mills and ensure the company’s
long-term vitality for the benefit of shareholders.
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Independent and diverse board of directors possessing
skill sets critical to our company’s success |
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Thoughtful management development and succession plans for the CEO and his direct reports |
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Active shareholder engagement program with regular updates to the board |
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Comprehensive director nomination process |
Corporate |
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Long-range succession plan to identify, recruit and appoint qualified directors |
Governance |
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All directors elected annually by majority of votes cast |
Highlights |
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Strong independent lead director with authority to approve board meeting agendas |
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Board and committee agendas developed annually to address core responsibilities |
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Enterprise risk management processes at board and committee levels |
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Standing public responsibility committee to oversee public policy issues impacting our
business |
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Executive sessions for independent directors after each board meeting |
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Substantive annual board evaluations |
For more information, our corporate governance
principles are published on our website at www.generalmills.com in the Investors section.
Board Independence and Accountability
Thorough Director Independence Determination
The cornerstone of our corporate governance
program is an independent and qualified board of directors. The board has established guidelines consistent with the current listing
standards of the New York Stock Exchange for determining director independence. You can find these guidelines in our corporate
governance principles, which are posted in the Investors section of our website at www.generalmills.com.
Director affiliations are regularly reviewed to ensure there
are no relationships that might impair a director’s independence. Transactions reviewed but deemed not to impair independence
include: tuition and contributions paid by the company to Dartmouth College, where Mr. Danos serves on the faculty; premiums for
health insurance products and services paid by the company to Cigna Corporation, where Mr. Cordani services as President and CEO;
and company debt securities and commercial paper purchased by Cigna, where Cigna is an active purchaser in the debt markets and
not the lead lender. The board determined that these transactions were conducted in the ordinary course of our business, were
not disclosable under New York Stock Exchange listing standards, and given the nature and amount of payments involved, did not
create a material relationship that would impair either director’s independence.
Based on this review, the board has affirmatively determined
that all non-employee directors are independent under our guidelines and as defined by New York Stock Exchange listing standards.
Annual Election by Majority of Votes Cast
Our directors are elected annually by a majority of votes cast,
to enhance their accountability to shareholders. If an incumbent director is not re-elected, the director must promptly offer
his or her resignation to the board. The corporate governance committee will recommend to the board whether to accept or reject
the resignation, and the board will disclose its decision and the rationale behind it within 90 days from the certification of
the election results. If ever there are more director nominees than the number of directors to be elected, the directors will
be elected by a plurality of the votes cast.
Robust Board Evaluations
The board and each committee annually conduct evaluations covering
their operations and performance. From time to time, the board may engage an outside governance expert to interview each director
separately, facilitate a discussion of the aggregated results, and assist the board in formulating subsequent action items.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and
Proxy Statement |
9 |
Board Leadership
Our independent directors appoint the board’s leadership
based on their judgment as to the structure that best serves the interests of the company and contributes to the effective operation
of the board. The independent directors periodically evaluate whether the role of the Chairman and the CEO should be separated
or combined.
Chairman and CEO Responsibilities
The independent directors believe that the positions of Chairman
and CEO currently should be held by the same person, as this combination has served the company well by providing unified leadership
and direction for the board. Under this structure, Mr. Powell leads the board and oversees board meetings and the delivery of
information necessary for the board’s informed decision making. Mr. Powell also serves as the principal liaison between
the board and our management.
Independent Lead Director Responsibilities
When there is a combined Chairman and CEO, the board also appoints
an independent lead director who:
• |
presides at all board meetings at which the Chairman is not present, including executive sessions of
the non-employee directors, which are held after each board meeting; |
• |
serves as a liaison between the Chairman and the non-employee directors; |
• |
approves board meeting agendas and consults with the Chairman on information provided to the board; |
• |
approves meeting schedules to assure that there is sufficient time for discussions; |
• |
calls meetings of the non-employee directors and sets agendas for executive sessions; and |
• |
serves as a board representative for consultation and direct communication with major shareholders. |
Michael Rose has served as the independent lead director since
September 2013. He draws on his leadership, strategic planning and governance expertise to foster active discussion and collaboration
among the non-employee directors on the board and to serve as an effective liaison with management.
Our Board’s Key Responsibilities
Management and the board are committed to the long-term growth
of our business, and to achieving it in a manner that is responsible to the global communities in which we operate and sell our
products:
Management Succession Planning
Succession planning is one of the board’s most critical
functions - to develop and secure leaders who will successfully build the company’s business. Annually, the board formally
reviews and discusses management development and succession plans for the CEO and his direct reports, and the board also discusses
individual executive transitions as the need arises over the course of the year. This review includes an assessment of senior
executives and their potential as successor to the CEO. The board has also adopted procedures to elect a successor in the event
of the CEO’s sudden departure.
Overseeing Business Strategy
Our directors are an important resource for seasoned, candid
and ongoing insights into strategic issues facing the company, including product portfolio development and innovation, strategic
investments, margin improvement and global expansion.
• |
Each year, the board formally reviews our annual and longer-term strategic business plans, financial
targets and plans for achieving those targets. |
• |
Focused discussions of individual businesses and key issues are held throughout the year, and extended off-site sessions
are held periodically for in-depth reviews of key strategic matters. |
• |
The board also regularly reviews our performance compared to our competitive peer companies. |
• |
The board reviews and approves significant capital investments and cash returns to shareholders through share repurchase
plans and dividend payments. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and
Proxy Statement |
10 |
Monitoring Performance and Ensuring the Integrity of Financial
Results
The board is focused on monitoring
performance against the company’s strategic objectives and financial targets. At each meeting throughout the year, the
board reviews and discusses with management a set of detailed operating reports, including current financial performance
versus plan. The audit committee reviews quarterly financial results with management before the results are publicly
reported. The audit committee monitors the company’s internal controls and disclosure controls throughout the year to
ensure the accuracy and integrity of the company’s financial reports.
Managing Risk
Enterprise Risk Management
Effective enterprise risk management is an integral part of
board and committee deliberations throughout the year.
• |
The audit committee annually reviews the company’s enterprise risk management process and the
comprehensive assessment of key financial, operational and regulatory risks identified by management, as well as risk mitigating
practices. The audit committee then discusses the process and results with the full board. |
• |
The board discusses risks related to the company’s annual financial plan at the beginning of each fiscal year, and
risks related to business strategy at the annual strategic planning meeting. It continues to address these risks in follow-up
discussions as the year progresses. |
• |
Each committee conducts its own risk assessment and risk management activities throughout the year, some of which are
highlighted under Board Committees and Their Functions on page 12, and reports its conclusions and recommendations to the
board. |
• |
The board also encourages management to promote a corporate culture that integrates risk management into the company’s
corporate strategy and day-to-day business operations in a way that is consistent with the company’s targeted risk profile. |
Through these processes, the board oversees a system to identify,
assess and address material risks to the company on a timely basis.
Compensation Risk Assessment
We periodically conduct a risk assessment of the company’s
employee compensation policies and practices, including those that apply to our executive officers, to ensure that the policies
and practices do not encourage excessive risk-taking in order to maximize compensation. The compensation committee oversees the
process, and Frederic W. Cook & Co., Inc., the independent compensation consultant, participates in identifying and assessing
risk.
Based on the most recent assessment, we have concluded that
our compensation policies and practices are aligned with the interests of shareholders, appropriately reward pay for performance
and do not create risks that are reasonably likely to have a material adverse effect on the company.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and
Proxy Statement |
11 |
Representing Shareholders
The board makes it a priority to remain attuned to shareholder
sentiment. To that end, it has worked with management to develop a thoughtful shareholder engagement strategy.
• |
Directors are available to meet directly with shareholders as appropriate. In most circumstances, our
independent lead director serves as the board’s representative. |
• |
Our investor relations team, together with senior management, meets regularly with our shareholders and responds to their
requests throughout the year. |
• |
The corporate secretary team reaches out to our shareholders to discuss proxy season trends and issues, as well as a variety
of business, social and environmental issues. |
The board receives regular reports on engagement efforts, which
are also separately reviewed by the corporate governance and compensation committees. In fiscal 2015, we reached out to shareholders
representing approximately 40% of our common stock outstanding, and of those shareholders among our top 50 who actively manage
their investments, we engaged with holders of approximately 81% of the shares.
Inspiring Corporate Citizenship
As a global food company, General Mills
is positioned not only to create economic value in the countries where we operate, but to create social and environmental value
as well, and the board plays an important role in fulfilling that mission. It has a standing public responsibility committee composed
entirely of independent directors, many of whom possess extensive public policy experience. The committee works with management
to guide the company’s corporate citizenship and sustainability programs, and it analyzes public policy issues that are
important to internal and external stakeholders, including but not limited to, policy issues concerning food safety, nutrition
and advertising. An overview of the company’s initiatives may be found in our Global Responsibility Report, which is available
on our website at www.generalmills.com under the Responsibility section. Our website and the Global Responsibility Report
are not incorporated by reference in, and are not part of, this Proxy Statement.
Board Committees and Their Functions
The board has five standing committees that
are each composed entirely of independent directors. A copy of each committee’s charter may be found on our website at www.generalmills.com
in the Investors section under “Corporate Governance.” Assignments are rotated to ensure that each committee has
an appropriate mix of tenure and experience.
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Bradbury H. Anderson |
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R. Kerry Clark |
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David M. Cordani |
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Paul Danos |
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Henrietta H. Fore |
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Raymond V.
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Hilda
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Steve Odland |
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Michael D.
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Robert L. Ryan |
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Lead Director Chairperson Member Financial Expert Retiring as of the Annual Meeting
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and
Proxy Statement |
12 |
Audit Committee
Number of meetings in fiscal 2015: Six
Functions:
• |
Oversees integrity, adequacy and effectiveness of internal
control, audit and financial reporting processes; |
• |
Assesses and ensures the independence, qualifications and performance
of our independent registered public accounting firm, selects the independent registered public accounting firm for the annual
audit and approves the independent registered public accounting firm’s services and fees; |
• |
Meets with the independent registered public accounting firm, without
management present, to consult with it and review the scope of its audit; |
• |
Oversees the company’s ethics and compliance program to ensure
compliance with applicable laws, corporate policies and the company’s Employee Code of Conduct; |
• |
Reviews and discusses with management the company’s annual risk
assessment and the enterprise risk management processes, policies and guidelines for identifying, assessing and managing key
financial and operational risks; |
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Reviews and approves our annual audited financial statements before issuance,
subject to the board of directors’ approval; and |
• |
Reviews the performance of the internal audit function. |
Financial Experts:
The board of directors has unanimously determined that (i) all
audit committee members are financially literate under the New York Stock Exchange listing standards and (ii) three of the audit
committee members standing for re-election qualify as “audit committee financial experts” within the meaning of SEC
regulations and have accounting or related financial management expertise as required by the New York Stock Exchange listing standards.
Each member also meets the independence standards for audit committee membership under the rules of the SEC.
Compensation Committee
Number of meetings in fiscal 2015: Five
Functions:
• |
Reviews compensation policies for executive officers and
employees to ensure they align with our compensation philosophy and provide appropriate motivation for corporate performance
and increased shareholder value; |
• |
Conducts performance reviews of the CEO; |
• |
Recommends compensation and equity awards for the CEO and approves them
for other senior executives; |
• |
Recommends the compensation and equity awards for the non-employee directors; |
• |
Reviews and discusses with management an annual risk assessment of the
compensation policies for executive officers and employees; and |
• |
Reviews and discusses with management the Compensation Discussion and
Analysis and recommends its inclusion in the proxy statement. |
Each member meets the independence standards for compensation
committee membership under the listing standards of the New York Stock Exchange.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and
Proxy Statement |
13 |
Corporate Governance Committee
Number of meetings in fiscal 2015: Five
Functions:
• |
Monitors and recommends changes in the organization and procedures of the board, including committee appointments and corporate governance policies; |
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Develops policy on composition, participation and size of the board as well as tenure and retirement of directors; |
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Recommends candidates for election to the board and evaluates continuing service of incumbent directors; |
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Oversees the annual board self-evaluation
process; and |
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Reviews and approves transactions between General Mills and related persons. |
Finance Committee
Number of meetings in fiscal 2015: Four
Functions:
• |
Reviews financial policies and objectives, including capital allocation and dividend policy; |
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Reviews changes in our capital structure, including debt issuances, common stock sales, share repurchases and stock splits; |
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Reviews significant capital investments, acquisitions and divestitures; |
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Reviews the annual business plan and related financing implications; and |
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Reviews financial risk management strategies, including the use of derivatives. |
Public Responsibility Committee
Number of meetings in fiscal 2015: Two
Functions:
• |
Reviews public policy issues and social trends affecting General Mills; |
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Monitors our corporate citizenship activities and sustainability programs; |
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Evaluates our policies in the context of emerging corporate social responsibility issues; and |
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Reviews our policies governing political contributions and our record of contributions. |
Director Attendance
Directors are expected to attend all board and
committee meetings, as well as the annual meetings of shareholders, absent exigent circumstances. 13 of our 14 directors in office
at the time attended the 2014 Annual Meeting of Shareholders. During fiscal 2015, the board of directors met seven times and various
committees of the board met a total of 22 times. All directors attended at least 75% of the aggregate total meetings of the board
and board committees on which they served during fiscal 2015.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
14 |
Certain Relationships and Related Transactions
• |
Our board of directors has adopted a written policy for reviewing and approving transactions between the company and its related persons, including directors, director nominees, executive officers, 5% shareholders and their immediate family members or affiliates. The policy applies to: |
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all financial transactions, arrangements or relationships involving more than $100,000; |
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in which the company, or one of its affiliates, is a participant; and |
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in which a related person could have a direct or indirect interest. |
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The policy does not apply to certain compensation payments that have been approved by the compensation committee or disclosed in the Proxy Statement; transactions that are available to all other shareholders or employees on the same terms; or transactions with an entity where the related person’s interest is only as a director or a less than 10% owner. |
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The board has delegated to our corporate governance committee the authority to review potential or existing transactions. The corporate governance committee will only approve or ratify those transactions that are determined to be consistent with the best interests of the company and its shareholders, and that comply with applicable policies, codes of conduct and legal restrictions. |
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The corporate governance committee reviewed and ratified a number of commercial transactions in fiscal 2015, including the following: |
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BlackRock Institutional Trust Company, N.A and BlackRock Investments, LLC provide asset management services to the company’s benefit plans. They are affiliates of BlackRock, Inc., which owns more than 5% of our outstanding shares. Our engagement of BlackRock is unrelated to its ownership of company stock, and fees were determined through arms-length negotiations and were customary in amount. |
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State Street Global Advisors serves as the fiduciary for company stock funds within our 401(k) Plan and provides asset management services to our other benefit plans. It is an affiliate of State Street Corporation, which owns more than 5% of our outstanding shares. Our engagement of State Street is unrelated to its ownership of company stock, and fees were determined through arms-length negotiations and were customary in amount. |
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Vanguard Fiduciary Trust provides asset management services to the company’s benefit plans. They are affiliates of The Vanguard Group, Inc., which owns more than 5% of our outstanding shares. Our engagement of Vanguard is unrelated to its ownership of company stock, and fees were determined through arms-length negotiations and were customary in amount. |
Codes of Conduct for Directors and Employees
We have adopted a code of conduct applicable
to all employees, including our principal executive officer, principal financial officer and principal accounting officer, and
a code of conduct applicable to our directors. The codes of conduct promote a company culture based on ethical behavior, integrity
and responsibility. They are available on our website at www.generalmills.com in the Responsibility section under “Ethics
and Integrity” and the Investor section under “Corporate Governance.”
The audit committee of the board of directors
has established procedures for employees, shareholders, vendors and others to communicate concerns about our ethical conduct or
business practices, including accounting, internal controls or financial reporting issues, to the audit committee, which has responsibility
for these matters.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
15 |
Director Nominations
The corporate governance committee is responsible
for recommending candidates for election to our board of directors. For more information on overall board composition guidelines
and selection criteria for individual directors, see Proposal Number 1 — Election of Directors on page 1. Director nominees
recommended by the corporate governance committee are subject to full board approval and election by shareholders at the annual
meeting of shareholders.
From time to time, the corporate governance committee
retains a search firm to assist in identifying, evaluating and recruiting director candidates, and pays the firm a fee for these
services. Suggestions also are received from board members and shareholders. Of the 11 directors recommended for election at the
2015 Annual Meeting, all nominees other than David Cordani were elected as directors at our 2014 Annual Meeting. Mr. Cordani was
recommended to the committee as a director candidate by its search firm.
The corporate governance committee will consider
and evaluate shareholder-recommended candidates by applying the same criteria used to evaluate director-recommended candidates.
If the corporate governance committee decides the candidate is suitable for board membership, the corporate governance committee
will make a recommendation to the board of directors for its approval to include the candidate in the slate of directors nominated
for election by shareholders in the Proxy Statement. During fiscal 2015, we received no director recommendations from our shareholders.
Shareholders who wish to suggest a candidate
for our board of directors may submit a written recommendation to the Corporate Secretary, General Mills, Inc., P.O. Box 1113,
Minneapolis, Minnesota 55440, along with the shareholder’s name, address and the number of General Mills shares beneficially
owned; the name of the candidate being recommended and the number of General Mills shares beneficially owned by the candidate;
the candidate’s biographical information describing experience and qualifications; a description of all agreements, arrangements
or understandings between the shareholder and candidate being recommended; and the candidate’s consent to serve as a director,
if elected. The corporate governance committee may request that the shareholder provide certain additional information. For the
board to consider a candidate for nomination at the 2016 Annual Meeting, shareholders should submit the required information to
the Corporate Secretary by April 19, 2016.
Under our By-laws, shareholders may also nominate
a candidate for election at an annual meeting of shareholders. Our annual meeting typically will be held on the fourth Tuesday
in September. Shareholders who intend to present a nomination at our 2016 Annual Meeting are required to notify the Corporate Secretary
in writing and provide the information described in our By-laws no earlier than June 1, 2016, and no later than July 1, 2016. Director
nominees submitted through this process will be eligible for election at the 2016 Annual Meeting, but will not be included in proxy
materials sent to shareholders prior to the meeting.
Communications with the Board
The board of directors welcomes comments and
questions. Interested parties may directly contact any of our directors, any committee of the board, the board’s non-employee
directors as a group, the lead director, or the board generally, by writing to them at General Mills, Inc., P.O. Box 1113, Minneapolis,
Minnesota 55440 or via e-mail at boardofdirectors@genmills.com. The board of directors has instructed the Corporate Secretary
to distribute communications to the director or directors, after ascertaining whether the communications are appropriate to duties
and responsibilities of the board. The board has requested that the Corporate Secretary not forward the following types of communications:
general surveys and mailings to solicit business or advertise products; job applications or resumes; product inquiries or complaints;
new product suggestions; or any material that is threatening, illegal or that does not relate to the responsibilities of the board.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
16 |
DIRECTOR COMPENSATION
We structure director compensation to attract
and retain qualified non-employee directors and to further align the interests of directors with the interests of shareholders.
The compensation committee periodically reviews surveys of non-employee director compensation trends and a competitive analysis
of peer company practices prepared by the independent compensation consultant. The committee makes recommendations to the board
of directors on compensation for our non-employee directors, including their retainers and annual equity awards. Each component
of director compensation is described in this section.
Annual Retainers
• |
Non-employee directors each receive an
annual retainer of $75,000. |
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• |
The chair of the audit committee receives
an additional $15,000, chairs of other committees receive an additional $10,000, and other audit committee members receive
an additional $5,000. |
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We do not pay any additional fees for
attending or chairing a meeting. |
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We pay annual retainers in quarterly
installments. Directors can elect to have their retainers paid in cash and/or common stock. |
Restricted Stock Units
• |
Each non-employee director receives approximately
$180,000 in restricted stock units (RSUs) upon attending his or her first board meeting and upon each re-election. |
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The number of RSUs is determined based
on the closing price of our common stock on the New York Stock Exchange on the date of the grant, and they are granted under
the 2011 Compensation Plan for Non-Employee Directors. |
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• |
The RSUs vest at the next annual meeting
of shareholders. Directors who leave the board prior to vesting forfeit their RSUs. In the event an active director dies,
his or her RSUs fully vest. |
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• |
RSUs earn amounts equivalent to the regular
dividend payments on our common stock. These amounts can be reinvested in additional stock units or paid to the director.
Dividend equivalents will be distributed only to the extent the underlying RSUs vest. |
Stock Ownership Policy
A substantial portion of non-employee director
compensation is linked to our stock performance, and directors can elect to receive their entire board remuneration in stock and
stock-related compensation. Our policy requires that non-employee directors keep all of the shares that they receive as compensation
until they own shares equal in market value to at least five times their annual retainer, excluding any fees for chairing a committee
or for audit committee service. As of July 31, 2015, all non-employee directors had met or exceeded these stock ownership requirements,
except for Henrietta Fore and David Cordani, who joined our board in June and November 2014, respectively.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
17 |
Deferred Compensation
• |
Non-employee directors may defer their retainers and restricted stock units. |
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• |
Their deferred cash accounts earn a monthly rate of return that tracks the investment return achieved under their selected investment funds, most of which are offered to participants in our 401(k) Plan. One of these funds tracks the return on our common stock, which further aligns directors’ interests with those of our shareholders. The value of deferred retainers paid in shares of our common stock and deferred restricted stock units also tracks our common stock performance. |
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• |
Earnings credited are not above-market or preferential. |
Other Benefits
• |
We have a Planned Gift Program for Directors that has been discontinued for all directors elected after fiscal 2006. Upon the death of a participating director, the company will donate $1 million to a qualifying charity recommended by the director. We have calculated the change in the accrued liability for the benefit in fiscal 2015 and included it under footnote 5, All Other Compensation, in the table in this section. |
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The General Mills Foundation matches eligible charitable contributions made by active, non-employee directors of up to $15,000 in each calendar year to eligible colleges, secondary and elementary schools, and approved funds, and up to $15,000 to eligible art and cultural organizations. These matching charitable contributions are included under footnote 5, All Other Compensation, in the table in this section. |
The fiscal 2015 compensation of our non-employee directors is shown
in the following table. Pro rata compensation is shown for William Esrey who retired, and for David Cordani who joined the board,
part way through the fiscal year.
Director Compensation For Fiscal 2015
Name | |
Fees
Earned or Paid in Cash(3) ($) | |
Stock
Awards(4) ($) | |
All
Other Compensation(5) ($) | |
Total
($) |
Bradbury H. Anderson | |
| 82,500 | | |
| 180,014 | | |
| — | | |
| 262,514 |
|
R. Kerry Clark | |
| 85,000 | | |
| 180,014 | | |
| 13,500 | | |
| 278,514 |
|
David M. Cordani | |
| 60,000 | | |
| 179,992 | | |
| — | | |
| 239,992 |
|
Paul Danos | |
| 82,500 | | |
| 180,014 | | |
| 25,081 | | |
| 287,595 |
|
William T. Esrey(1) | |
| 20,000 | | |
| — | | |
| 26,489 | | |
| 46,489 |
|
Henrietta H. Fore | |
| 78,750 | | |
| 180,014 | | |
| — | | |
| 258,764 |
|
Raymond V. Gilmartin(2) | |
| 80,000 | | |
| 180,014 | | |
| 55,785 | | |
| 315,799 |
|
Judith Richards Hope(2) | |
| 75,000 | | |
| 180,014 | | |
| 52,262 | | |
| 307,276 |
|
Heidi G. Miller | |
| 90,000 | | |
| 180,014 | | |
| 16,792 | | |
| 286,806 |
|
Hilda Ochoa-Brillembourg(2) | |
| 80,000 | | |
| 180,014 | | |
| 37,178 | | |
| 297,192 |
|
Steve Odland | |
| 75,000 | | |
| 180,014 | | |
| 56,660 | | |
| 311,674 |
|
Michael D. Rose | |
| 77,500 | | |
| 180,014 | | |
| 50,081 | | |
| 307,595 |
|
Robert L. Ryan | |
| 90,000 | | |
| 180,014 | | |
| 39,379 | | |
| 309,393 |
|
Dorothy A. Terrell | |
| 77,500 | | |
| 180,014 | | |
| 51,051 | | |
| 308,565 |
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(1) |
Mr. Esrey retired from the board effective September
23, 2014. |
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(2) |
Mr. Gilmartin, Ms. Hope and Ms. Ochoa-Brillembourg
are retiring from the board effective September 29, 2015. |
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(3) |
Includes the annual retainer and additional fees for
directors who chair a committee or who serve on the audit committee. Retainers were paid in cash, except Mr. Cordani received
his entire retainer in common stock (1,117 shares valued at the closing sales price of our common stock on the New York Stock
Exchange on the quarterly retainer payment dates). |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
18 |
(4) |
Includes the grant date fair value for 3,571 RSUs granted to each director, other than Mr. Cordani, upon re-election in fiscal 2015, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). The grant date fair value is based on $50.41 per share, the closing price of our common stock on the New York Stock Exchange on the grant date, September 23, 2014. |
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For Mr. Cordani, includes the grant date fair value for 3,418 RSUs, granted to him upon his appointment on November 3, 2014. The grant date fair value is based on $52.66 per share, the closing price of our common stock on the New York Stock Exchange on that date. |
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At fiscal year end, each non-employee director held 3,571 RSUs, except for Mr. Cordani who held 3,418 RSUs and Mr. Anderson, Mr. Danos, Ms. Miller, Ms. Ochoa-Brillembourg and Mr. Odland who each reinvested their dividend equivalents and held 3,655 RSUs. |
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The non-employee directors’ equity awards are now delivered entirely in RSUs, though they continue to hold previously awarded stock options. |
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At fiscal year end, the total number of stock options held by each non-employee director was as follows: Mr. Anderson 71,686; Mr. Clark 55,642; Mr. Danos 91,686; Mr. Esrey 111,686; Mr. Gilmartin 111,686; Ms. Hope 91,686; Ms. Miller 71,686; Ms. Ochoa-Brillembourg 51,686; Mr. Odland 91,686; Mr. Rose 91,686; Mr. Ryan 71,686; and Ms. Terrell 40,288. |
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(5) |
All Other Compensation includes: |
ALL OTHER COMPENSATION
Name | |
Planned
Gift Program(6) ($) | |
Charitable Matching
Gifts ($) | |
Total ($) |
B. H. Anderson | |
| — | | |
| — | | |
| — | |
R. K. Clark | |
| — | | |
| 13,500 | | |
| 13,500 | |
D. M. Cordani | |
| — | | |
| — | | |
| — | |
P. Danos | |
| 25,081 | | |
| — | | |
| 25,081 | |
W. T. Esrey | |
| 26,489 | | |
| — | | |
| 26,489 | |
H. H. Fore | |
| — | | |
| — | | |
| — | |
R. V. Gilmartin | |
| 25,785 | | |
| 30,000 | | |
| 55,785 | |
J. R. Hope | |
| 24,739 | | |
| 27,523 | | |
| 52,262 | |
H. G. Miller | |
| 16,792 | | |
| — | | |
| 16,792 | |
H. Ochoa-Brillembourg | |
| 22,178 | | |
| 15,000 | | |
| 37,178 | |
S. Odland | |
| 15,004 | | |
| 41,656 | | |
| 56,660 | |
M. D. Rose | |
| 25,081 | | |
| 25,000 | | |
| 50,081 | |
R. L. Ryan | |
| 24,379 | | |
| 15,000 | | |
| 39,379 | |
D.
A. Terrell | |
| 21,551 | | |
| 29,500 | | |
| 51,051 | |
(6) |
Includes interest cost recognized in fiscal 2015 in connection with the Planned Gift Program. Calculations assume 4.45% discount rate at the end of fiscal 2015; benefit payment immediately upon death; and mortality rates based on the 2014 IRS Statistic Annuitant Mortality Table. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
19 |
OWNERSHIP OF GENERAL MILLS COMMON STOCK BY DIRECTORS,
OFFICERS AND CERTAIN BENEFICIAL OWNERS
The following table shows the amount of General
Mills common stock beneficially owned by (a) each director and director nominee, (b) each named executive officer listed in the
Summary Compensation Table, (c) all directors, director nominees and executive officers as a group and (d) each person or group
owning more than 5% of our outstanding shares. Unless otherwise noted, all amounts are as of July 31, 2015, and the shareholders
listed in the table have sole voting and investment power with respect to the shares owned by them.
|
|
Amount
and Nature of Beneficial Ownership |
Name
of Beneficial Owner |
|
Shares(1) |
|
Exercisable
Options(2) |
|
Percent
of Class |
B. H. Anderson |
|
35,209 |
(3) |
|
71,686 |
|
|
* |
|
J. R. Church |
|
64,158 |
(4) |
|
196,617 |
|
|
* |
|
R. K. Clark |
|
23,994 |
|
|
55,642 |
|
|
* |
|
D. M. Cordani |
|
4,535 |
|
|
— |
|
|
* |
|
P. Danos |
|
19,941 |
(5) |
|
91,686 |
|
|
* |
|
H. H. Fore |
|
6,923 |
|
|
— |
|
|
* |
|
I. R. Friendly |
|
345,973 |
(6) |
|
687,917 |
|
|
* |
|
R. V. Gilmartin |
|
139,003 |
|
|
111,686 |
|
|
* |
|
J. L. Harmening |
|
49,338 |
(7) |
|
239,248 |
|
|
* |
|
J. R. Hope |
|
97,974 |
(8) |
|
71,686 |
|
|
* |
|
H. G. Miller |
|
46,183 |
(9) |
|
71,686 |
|
|
* |
|
D. L. Mulligan |
|
143,278 |
(10) |
|
517,063 |
|
|
* |
|
H. Ochoa-Brillembourg |
|
40,747 |
|
|
51,686 |
|
|
* |
|
S. Odland |
|
46,953 |
|
|
91,686 |
|
|
* |
|
C. D. O’Leary |
|
149,594 |
|
|
687,917 |
|
|
* |
|
K. J. Powell |
|
339,436 |
|
|
2,472,765 |
|
|
* |
|
M. D. Rose |
|
68,789 |
(11) |
|
91,686 |
|
|
* |
|
R. L. Ryan |
|
28,620 |
|
|
71,686 |
|
|
* |
|
D. A. Terrell |
|
59,530 |
|
|
40,288 |
|
|
* |
|
All directors, nominees and executive officers as a group (25 persons) |
|
2,117,349 |
(12) |
|
7,140,152 |
|
|
1.4 |
|
The Vanguard Group, Inc. |
|
32,310,623 |
(13) |
|
— |
|
|
5.4 |
|
BlackRock, Inc. |
|
38,784,251 |
(14) |
|
— |
|
|
6.5 |
|
State Street Corporation |
|
39,752,146 |
(15) |
|
— |
|
|
6.6 |
|
* |
Indicates ownership of less than 1% of the total outstanding shares. |
(1) |
Includes: |
|
• |
Shares of our common stock directly owned; |
|
• |
Shares of our common stock allocated to participant accounts under our 401(k) Plan; |
|
• |
Restricted stock units that vest within 60 days of July 31, 2015, as to which the beneficial owner currently has no voting or investment power: 3,418 RSUs for Mr. Cordani, and 3,571 RSUs for each other non-employee director, except for Mr. Anderson, Mr. Danos, Ms. Miller, Ms. Ochoa-Brillembourg and Mr. Odland, who each reinvested their dividend equivalents and held 3,655 RSUs; and 46,691 RSUs for all directors, nominees and executive officers as a group; and |
|
• |
Stock units that have vested and been deferred, as to which the beneficial owner currently has no voting or investment power: 17,699 units for Mr. Anderson; 17,849 units for Mr. Clark; 14,160 units for Mr. Danos; 3,352 units for Ms. Fore; 271,848 units for Mr. Friendly; 22,731 units for Mr. Gilmartin; 18,660 units for Mr. Harmening; 63,499 units for Ms. Hope; 26,062 units for Ms. Miller; 24,844 units for Mr. Mulligan; 37,091 units for Ms. Ochoa-Brillembourg; 31,438 units for Mr. Odland; 44,999 units for Mr. O’Leary; 5,772 units for Mr. Rose; 23,999 units for Mr. Ryan; 49,479 units for Ms. Terrell; and 841,585 units for all directors, nominees and executive officers as a group. |
(2) |
Includes options that were exercisable on July 31, 2015 and options that become exercisable within 60 days of July 31, 2015. |
(3) |
Includes 13,855 shares held in individual trusts by either Mr. Anderson or his spouse, for which they serve as trustees. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
20 |
(4) |
Includes 52,414 shares held in individual trusts by either Mr. Church or his spouse, for which they serve as trustees, and 3,240 shares owned by Mr. Church’s spouse. A portion of the shares listed are pledged as collateral for a line of credit at Wells Fargo. |
(5) |
Includes 2,126 shares owned jointly by Mr. Danos and his spouse. |
(6) |
Includes 2,256 shares held in custodial accounts for Mr. Friendly’s minor children and 42,324 shares held in a trust for the benefit of Mr. Friendly’s spouse and minor children. Mr. Friendly’s spouse serves as trustee of the trust. Mr. Friendly left the company effective June 30, 2014. |
(7) |
Includes 25,080 shares held in individual trusts by Mr. Harmening or his spouse, for which they serve as trustees. |
(8) |
Includes 10 shares held in trust for the benefit of Ms. Hope’s grandson, for which she serves as trustee. |
(9) |
All shares are held in accounts where Ms. Miller’s spouse is a co-signer or has a power of attorney. |
(10) |
Includes 114,406 shares owned jointly by Mr. Mulligan and his spouse. |
(11) |
Includes 7,513 shares held in a grantor trust. |
(12) |
Includes 350,598 shares held solely by, jointly by, or in trust for the benefit of family members. |
(13) |
Based on information contained in a Schedule 13G/A filed by The Vanguard Group, Inc. and its subsidiaries (“Vanguard”), at 100 Vanguard Blvd., Malvern, Pennsylvania 19355, filed with the SEC on February 10, 2015. The filing indicated that as of December 31, 2014, Vanguard had sole investment power over 31,303,133 of these shares and shared investment power over 1,007,490 of these shares. The filing also indicated that as of December 31, 2014, Vanguard had sole voting power over 1,055,917 of these shares. |
(14) |
Based on information contained in a Schedule 13G/A that BlackRock, Inc. and its subsidiaries (“BlackRock”), at 55 East 52nd Street, New York, New York 10022, filed with the SEC on February 9, 2015. The filing indicated that as of December 31, 2014, BlackRock had sole investment power over all of these shares, and sole voting power over 32,407,279 of these shares. |
(15) |
Based on information contained in a Schedule 13G filed by State Street Corporation and its subsidiaries (“State Street”), at State Street Financial Center, One Lincoln Street, Boston, Massachusetts 02111, with the SEC on February 12, 2015. The filing indicated that as of December 31, 2014, State Street had shared investment power and shared voting power over all of these shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Based on a review of reports filed with the
SEC by our directors and executive officers regarding their ownership and transactions in our common stock and written representations
from those directors and officers, we believe that each director and executive officer has filed timely reports under Section 16(a)
of the Securities Exchange Act of 1934 during fiscal 2015.
PROPOSAL NUMBER 2 |
ADVISORY VOTE ON EXECUTIVE COMPENSATION |
We provide our shareholders with an annual
advisory vote on the compensation of our named executive officers. At the 2014 Annual Meeting, approximately 94% of the votes cast
supported our executive compensation program.
Our compensation committee reviewed the results
of the advisory vote, and also considered feedback from some of our largest shareholders on our executive compensation program.
The compensation committee recognizes that effective practices evolve, and the committee will continue to consider changes as needed
to keep our executive compensation program competitive and tightly linked to performance.
Consistent with our shareholders’ preference
and prevailing demand, we expect to hold an advisory vote on executive compensation every year. This year, we are asking shareholders
to approve the following resolution:
RESOLVED, that the shareholders approve the
compensation paid to the company’s named executive officers, as disclosed in the Compensation Discussion and Analysis section,
and the compensation tables and related narrative in the Executive Compensation section, of the Proxy Statement for the 2015 Annual
Meeting of Shareholders.
The advisory vote will not be binding on
the compensation committee or the board of directors. However, they will carefully consider the outcome of the vote and take into
consideration any specific concerns raised by investors when determining future compensation arrangements.
The board of directors
unanimously recommends a vote FOR the resolution approving, on an advisory basis, the compensation of our named executive officers.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
21 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This section provides an overview of the
key elements of our executive compensation program, and discusses compensation actions for our named executive officers in the
context of our fiscal 2015 performance.
Executive Summary
We are a global consumer foods company dedicated
to making food people love. We seek to understand the needs and lives of our consumers, work continuously to improve our core products
and create new products that meet consumers’ evolving needs. In addition, we build the equity of our brands over time with
strong consumer-directed marketing, innovative new products, and effective merchandising. We believe our brand-building strategy
is the key to growing sales and winning and sustaining leading share positions in markets around the globe. We seek to translate
sales growth into higher profits through our efforts to manage expenses and expand margins.
We Align Our Business and Compensation Objectives
Our long-term growth model reflects our experience
that strategies and actions promoting consistent growth in sales, segment operating profit and earnings per share, coupled with
an attractive dividend yield, will deliver strong total shareholder return (TSR).
Our compensation program incents our named
executive officers to pursue strategies and actions that promote growth and strong return to shareholders, consistent with our
long-term growth model. Since fiscal 2006, we have measured our financial performance, and calibrated the size of our annual incentive
and long-term compensation awards, according to the following Annual Corporate Performance Measures, which correspond to goals
in our long-term growth model:
• |
Organic net sales growth, |
|
|
• |
Total segment operating profit growth, |
|
|
• |
Adjusted earnings per share growth, and |
|
|
• |
Improvement in return on average total capital. |
Our research, as corroborated by the compensation
committee’s independent compensation consultant, confirms that members of our industry peer group with the most consistently
superior performance against these four measures have the highest five-year TSR. These measures are described in further detail
on page 24.
We also use cumulative free cash flow, which
is cash from operating activities less capital expenditures, as one of the three-year performance measures for our performance
share units, because free cash flow directly supports TSR by enabling business investment, dividend growth and share repurchases.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
22 |
The core elements of our NEOs’ compensation
package consist of base salary, annual incentive and long-term incentive, which we refer to as total direct compensation. The incentive
awards are composed of a mix of cash, restricted stock units (RSUs), stock options and performance share units (PSUs). As the following
table illustrates, other than a fixed base salary, each element of total direct compensation is tied to performance and closely
linked to goals from our long-term growth model.
COMPENSATION STRUCTURE IS LINKED TO LONG-TERM
PERFORMANCE GOALS AND RELATIVE PERFORMANCE
|
|
Annual |
|
|
|
|
|
|
|
|
Incentive |
|
Long-Term
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term |
|
|
Cash & RSUs |
|
PSUs Earned |
|
Stock Options / RSUs |
|
Performance |
|
|
|
|
|
|
|
|
Goal |
Annual
Corporate Performance
Measures (constant currency) |
|
|
|
|
|
|
|
|
Organic Net Sales Growth |
|
|
|
|
|
|
|
Low Single
Digit Growth |
Total
Segmented Operating Profit Growth |
|
|
|
|
|
|
|
Mid Single
Digit Growth |
Adjusted Earnings per Share Growth |
|
|
|
|
|
|
|
High Single
Digit Growth |
Return on Average Total Capital Improvement |
|
|
|
|
|
|
|
Improvement |
Three-Year
Corporate Performance
Measures (constant currency) |
|
|
|
|
|
|
|
|
Average Organic Net Sales Growth |
|
|
|
|
|
|
|
|
Cumulative Free Cash Flow |
|
|
|
|
|
|
|
|
Target pay opportunity for our NEOs is set
such that the performance goals and total direct compensation are aligned with the median of the industry peer group, as more fully
described on page 31 under Rigorous Corporate Performance Goals. Total direct compensation actually received by the NEOs varies
from target pay opportunity based on our Annual Corporate Performance Rating, which is used to determine annual and long-term incentive
awards.
The Annual Corporate Performance Rating is
calculated as an average of four, equally weighted component ratings (ranging from a minimum of 0 to a maximum of 1.80) that represent
our performance on the four Annual Corporate Performance Measures. Goals for the ratings are established at the beginning of the
year.
• |
Target pay opportunity is associated with an Annual Corporate Performance Rating within the range of 1.30 to 1.50, which is intended to represent median performance relative to industry peers and median total direct compensation for similarly situated officers within the industry peer group. |
|
|
• |
An Annual Corporate Performance Rating within the range of 1.51 to 1.80 is intended to represent above-median performance, with 1.80 representing top-quartile total direct compensation and performance that is superior to industry peers. |
|
|
• |
An Annual Corporate Performance Rating within the range of 1.00 to 1.29 is intended to represent below-median performance, with 1.00 representing bottom-quartile total direct compensation and significantly below intended performance. |
For more information on how we factor the
Annual Corporate Performance Rating into the calculation of the NEOs’ annual and long-term incentives, please see pages 32
through 34.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders
and Proxy Statement |
23 |
Performance Results for Fiscal 2015
In determining incentive awards for our NEOs,
the compensation committee and the board primarily consider the company’s financial and operational performance and strategic
accomplishments for the year. In fiscal 2015, our results against the Annual Corporate Performance Measures reflect the challenges
of growing sales and profits in the face of changing consumer preferences.
FISCAL 2015 PERFORMANCE
AGAINST ANNUAL INCENTIVE RATING GRID
| |
Significantly | |
| |
|
| |
Below | |
| |
Fiscal 2015 |
| |
Intended | |
Superior | |
Actual |
| |
Performance | |
Performance | |
Performance |
Annual Corporate Performance Measure and Weighting | |
(1.00 CPR) | |
(1.80 CPR) | |
(1.16 CPR)* |
Organic Net Sales Growth (25%) | |
| 1% | | |
| 5% | | |
| Flat | |
Total Segment Operating Profit Growth (25%) | |
| Flat | | |
| 6% | | |
| -2% | |
Adjusted Earnings Per Share Growth (25%) | |
| 3% | | |
| 9% | | |
| 4% | |
Return on Average Total Capital Improvement (25%) | |
| -80bps | | |
| 30bps | | |
| -20bps | |
* |
Performance results are shown on a constant-currency basis. Organic net sales growth excludes benefits of a 53rd week and six months of incremental contribution from the Annie’s, Inc. (Annie’s) natural and organic foods business acquired in October 2014. Constant-currency organic net sales growth, constant-currency total segment operating profit growth, constant-currency adjusted earnings per share growth and return on average total capital improvement are non-GAAP financial measures. Please see Appendix A to this Proxy Statement for a more detailed description of these measures and a reconciliation of these measures to the most comparable GAAP measure. |
Our performance was mixed across our operating
segments. Sales and profit declined for U.S. Retail – our largest operating segment. While we returned our U.S. yogurt business
to growth, and our brands gained share in categories representing 65% of our U.S. Retail measured sales volume, overall sales trends
in many categories were weak, reflecting the impact of changing consumer food preferences. Operating results for the International
segment were muted by a significant negative impact from foreign currency exchange and slowing economic growth in key emerging
markets, but the segment achieved good margin expansion and profit growth in constant currency. Our Convenience Stores & Foodservice
segment recorded good sales growth and increased segment operating profit by 15% to an all-time high of $353 million, reflecting
compelling innovation across our focus platforms of snacks, cereal, yogurt, mixes, biscuits and frozen breakfast.
Return on average capital has declined in
recent years, due in part to the acquisitions of Yoplait, Yoki and Annie’s. We are targeting an increase for fiscal 2016,
reflecting net earnings growth and continued capital discipline.
Net cash provided by operations totaled $2.5
billion in fiscal 2015. This cash generation supported capital investments totaling $712 million in fiscal 2015. We also returned
significant cash to shareholders through an 8% dividend increase, and share repurchases totaling $1.2 billion.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
24 |
We have taken strategic actions to adapt
to the changing marketplace and to position us for stronger growth in fiscal 2016. We continue to put the consumer first as we
renovate existing brands and develop new products. And we have streamlined our organization to increase agility. Our actions helped
strengthen our business performance in the second half of fiscal 2015 and position us to deliver stronger growth in fiscal 2016.
Strategic
Action |
|
Fiscal
2015 Accomplishments |
|
|
|
|
|
|
Drive More
from Our Core Brands |
|
We executed on “consumer first” product renovation and innovation to drive sales growth across our operating segments. |
• |
U.S. Retail |
|
– |
We reformulated our original style Yoplait and reminded consumers that it is a nutritious, great-tasting snack. Retail sales for this line grew 15%. |
|
– |
We developed capacity to launch five varieties of gluten free Cheerios and captured share leadership in the $470 million dollar granola segment of the U.S. cereal category. |
|
– |
Our natural and organic portfolio experienced double-digit growth in the U.S., featuring brands such as Cascadian Farm, Lärabar and Immaculate Baking. |
|
– |
In fiscal 2016, we expect to have renovation news on products accounting for $5 billion of U.S. Retail net sales, almost half the portfolio. |
• |
International |
|
– |
We gave consumers around the world convenient meals and easier-to-stuff, more flavorful taco shells, which fueled 14% net sales growth in Europe for Old El Paso. |
|
– |
In China, breakthrough innovation led to strong sales and market share for Tang Yuan, a new line of Wanchai Ferry frozen dim sum. |
|
– |
We launched Häagen-Dazs super-premium ice cream stick bars in France. |
• |
Convenience Stores and
Foodservice |
|
– |
Net sales for our six focus platforms grew by 9%. |
|
– |
We delivered 200 million tubes of Go-Gurt through McDonald’s Happy Meals in the last twelve months. |
|
– |
We continued to innovate on our Pillsbury line of frozen breakfast items served in K-12 schools. |
|
|
|
|
|
|
Fund Our Future |
|
We launched initiatives to streamline our North American supply chain, increase our organizational effectiveness and efficiency, and reduce expenses through changes to our administrative practices and policies. |
• |
These efforts produced $75 million in savings in fiscal 2015. We expect to deliver $285 to $310 mllion in annual savings in fiscal 2016, and over $400 million in fiscal 2017. |
• |
For fiscal 2016, our ongoing Holistic Margin Management savings of $400 million in cost of goods sold should more than offset inflation, which we estimate at 2%. |
|
|
|
|
|
Reshape the
Portfolio for Growth |
|
We strategically invested capital in our global platforms. |
• |
We expanded R&D and manufacturing capacity to launch Yoplait in China. |
• |
We acquired Annie’s, a maker of family favorites such as natural and organic pastas, meals and snacks, and we are targeting over $1 billion in natural and organic net sales by fiscal 2020. |
|
|
|
|
|
Build an Agile and Advantaged
Organization |
|
We restructured our business to create a leaner, more agile organization, and we are redesigning our pay for performance programs to drive increased accountability and results, as more fully described under Key Policies and Updates on page 29. |
Strong Free Cash Flow and Return to Shareholders
We converted over 100% of earnings after
taxes into free cash flow, and we returned $2.2 billion to shareholders, including an 8% increase in dividends and share repurchases
totaling $1.2 billion.
|
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
25 |
Translating Results into Compensation Outcomes
for Fiscal 2015
CEO Ken Powell’s total direct compensation
was approximately 14% below his target pay opportunity, primarily due to the company’s performance on the Annual Corporate
Performance Measures, as reflected in the 1.16 Annual Corporate Performance Rating.
In assessing Mr. Powell’s performance,
the board’s primary consideration was the company’s financial and operational performance, initiatives to streamline
our North American supply chain and increase organizational effectiveness, new product introductions globally, portfolio optimization,
and strengthening the core values of our brands. The board evaluated his overall level of leadership, and his continued ability
to develop and implement strategies to enhance shareholder value. They also assessed Mr. Powell’s performance against his
objectives in additional areas such as organizational development, external engagement and corporate governance.
The following graphic illustrates the components
of Mr. Powell’s total direct compensation for fiscal 2015, of which 85% was performance-based.
For more information on these awards, please
refer to the table Total Direct Compensation on page 38 and the description of Mr. Powell’s annual and long-term incentive
awards on pages 32 through 34.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
26 |
Total direct compensation varies significantly depending on company
performance. Our annual and long-term incentive programs are designed to build a total compensation package that varies based on
performance relative to our industry peer group. Assuming incentive payout at target pay opportunity, 88% of Mr. Powell’s
total direct compensation is performance-based and “at-risk.” As a result, Mr. Powell’s pay is highly sensitive
to company and TSR performance.
RANGE OF CEO PAY VS CORPORATE
PERFORMANCE
* |
|
Threshold performance results in PSU payout at 50% of the target pay opportunity and RSUs and stock options granted at 70% of the target pay opportunity; maximum performance results in PSU payout at 150% of the target pay opportunity and RSUs and stock options granted at 130% of the target pay opportunity. Values for equity awards are based on grant date fair values, and they do not reflect the impact of stock price fluctuations on the ultimate value of compensation. |
** |
|
Includes Mr. Powell’s non-equity incentive plan compensation, as quantified in the Summary Compensation Table, and value of annual and long-term incentive stock awards as quantified in the Total Direct Compensation table, on page 38. |
Our compensation program achieves a strong correlation between
CEO total direct compensation and TSR, because our incentive awards are tied to Annual Corporate Performance Measures that drive
TSR.
RANGE OF CEO PAY VS CORPORATE
PERFORMANCE
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
27 |
Our emphasis on competitive and performance-based compensation
has contributed to our company’s strong performance over time, making it possible to continue our long-standing record of
dividend payments, share repurchases and competitive cumulative returns to our shareholders.
DELIVERING STRONG RETURN
TO SHAREHOLDERS
Dividends Per Share |
|
Average Diluted Shares Outstanding |
|
|
|
|
|
|
|
|
|
We have paid regular dividends without
interruption for 116 years. |
|
Reducing net shares outstanding illustrates our
commitment to returning capital to shareholders. |
Total Shareholder Return
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
28 |
Compensation Philosophy and Principles
Our compensation program is designed to attract, motivate, reward
and retain superior leaders who consistently achieve corporate performance and total shareholder return that are in the top tier
of the industry peer group. The compensation committee bases its compensation decisions on the following core principles:
• |
Pay is performance-based: Executive compensation at General Mills is tightly
linked to company performance. As executives assume greater responsibility, a larger portion of their total compensation becomes
dependent on company and business unit performance. |
• |
Compensation opportunities must be competitive: Competition for management talent
in the consumer packaged goods industry is intense. To ensure that executive compensation at General Mills remains competitive,
the compensation committee, with the assistance of management and the independent compensation consultant, monitors the compensation
practices of U.S. companies in the industry peer group, as well as those of a broader group of leading industrial companies.
In performing these analyses, peer group proxy data and two major survey sources are utilized. |
Key Policies and Updates
The compensation committee continually evaluates our executive
compensation policies and practices to ensure that they drive performance and that they are well-governed.
In
Progress for
Fiscal 2016 |
|
|
Redesign of incentive program to further enhance sensitivity of pay to performance |
|
|
• Shifts to all cash annual incentives and mix of options, restricted stock units (RSUs) and performance share units (PSUs) for long-term incentives |
|
|
• Increases weighting of financial performance |
|
|
• Broadens the range of potential payouts, with higher maximum and lower minimum |
|
|
• Introduces PSUs as part of long-term incentive for rest of executives |
|
|
|
|
|
|
|
|
New
for
Fiscal 2015 |
|
|
PSUs granted to CEO’s direct reports, including NEOs |
|
|
• Increases alignment between shareholders and executives |
|
|
• Utilizes the same performance metrics as for CEO PSUs |
|
|
Stock retention requirement |
|
|
• Requires executives to hold at least 50% of net, after-tax shares that they receive pursuant to stock awards until they comply with our stock ownership requirements |
|
|
• Reinforces our stock ownership policy (10x salary for CEO, 5x salary for EVPs and SVPs, and 3x salary for all other executives) |
|
|
Elimination of personal air travel |
|
|
No excise tax gross-up |
|
|
|
|
|
|
|
|
Existing
Policies and
Practices |
|
|
What we do: |
|
What we don’t do: |
|
|
|
Significant alignment between pay and performance |
|
|
No employee contracts for NEOs |
|
|
|
Base salaries at or below median versus industry peer group |
|
|
No hedging and pledging of company stock |
|
|
|
Quantitative corporate performance measures |
|
|
No payment of
dividend equivalents on unearned shares |
|
|
|
Four-year cliff vesting on all stock awards, including PSUs |
|
|
|
|
|
|
Clawback policy |
|
|
|
|
|
|
Rigorous stock ownership requirements |
|
|
|
|
|
|
Tally sheets reviewed in connection with compensation decision
making |
|
|
|
|
|
|
Risk assessment of pay |
|
|
|
|
|
|
Annual say on pay vote |
|
|
|
|
|
|
Direct engagement with shareholders |
|
|
|
|
|
|
Double-trigger change in control provisions |
|
|
|
|
|
|
Fully independent compensation consultant |
|
|
|
|
|
|
Executive session after each compensation committee meeting |
|
|
|
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
29 |
Elements of Total Direct Compensation
CEO PAY MIX |
|
OTHER NAMED EXECUTIVE OFFICER PAY MIX |
|
|
|
Performance-Based (At RIsk) Compensation: 88% |
|
Performance-Based (At RIsk) Compensation: 79% |
|
|
|
|
|
|
|
|
Base Salary |
|
Annual Incentive |
|
Long-Term Incentive |
Primary Purpose |
|
• Provides
fixed income based on size, scope and complexity of the individual’s role
• Reflects
each individual’s current and historical performance
|
|
• Rewards achievement of annual corporate and individual performance objectives |
|
• Rewards delivery
of long-term shareholder value
• Designed to retain
key talent
|
Competitive Analysis |
|
• Annually |
|
• Annually |
|
• Annually |
Approval/Grant Date |
|
• Changes approved at June board meeting |
|
• June board meeting |
|
• June board meeting |
Cash/Equity |
|
• Cash |
|
• Cash/RSUs |
|
• PSUs/Stock Options/RSUs |
Performance Period and Impact |
|
• Fixed income |
|
• 1 Year
• Awards increase
or decrease by 30% based on Annual Corporate Performance Rating
|
|
• 3 Years for PSUs
• RSU and Stock Option
awards increase or decrease by 30% based on Annual Corporate Performance Rating
• PSUs pay out at
50% to 150% of target depending on performance
|
Approximate Market Positioning |
|
• At median |
|
• At median assuming
median performance versus peer industry group
• Additional details
on page 32
|
|
• At median assuming
median performance versus peer industry group
• Additional details
on page 33
|
Pay mix assumes total direct compensation equal to target pay
opportunity, with a 1.50 Annual Corporate Performance Rating and a PSU payout at target for median performance versus the industry
peer group.
Base Salary
Base salaries provide fixed income based on the duration, size,
scope and complexity of each individual’s role, and reflects current and historical performance. Base salary is the only
fixed element of total direct compensation, and accordingly, is set at median levels for similarly situated officers within the
industry peer group to reinforce the importance of incentive compensation. With the guidance of the independent consultant, the
compensation committee annually reviews potential adjustments to base salary for merit increases, to align with market, and for
changes in responsibilities.
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
30 |
CEO Base Salary
At the beginning of fiscal 2015, Mr. Powell’s base salary
was increased by 3%, keeping his base salary at a competitive level versus similarly situated officers within the industry peer
group. This was consistent with increases for our broader base of U.S. salaried employees.
|
Performance Measurements for Incentive Compensation
Corporate Performance Measurement
At the beginning of each fiscal year, corporate performance goals
are established for one- and three-year periods, with the intention of being challenging yet achievable.
• |
Annual Incentive Rating Grid: The grid is used to calculate the Annual Corporate Performance Rating (CPR), which is an average of four, equally weighted component ratings (ranging from a minimum of 0 to a maximum of 1.80) that are based on our performance against the following Annual Corporate Performance Measures: organic net sales growth, total segment operating profit growth, adjusted earnings per share growth and return on average total capital improvement. |
|
|
• |
Three-Year Corporate Performance Goals: The PSUs are earned based on our future achievement of three-year goals, consistent with our internal plan, for average organic net sales growth and cumulative free cash flow. |
The size of all incentive awards except for PSUs are adjusted based on the Annual Corporate Performance Rating.
IMPACT OF THE ANNUAL CORPORATE
PERFORMANCE RATING
|
|
|
|
|
|
|
|
General Mills performs: |
|
CPR |
|
|
|
|
|
Below peer group median |
|
0.00 to 1.29 rating |
|
|
|
|
— |
At peer group median |
|
1.30 to 1.50 rating |
|
|
|
|
|
Above peer group median |
|
1.51 to 1.80 rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary |
x |
Base Incentive
Rate(1) |
x |
|
CPR |
|
x |
Individual
Performance
Rating |
= |
Annual Incentive -
Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive -
Cash |
x |
Incentive Stock
Award Rate(2) |
x |
|
Adjustment based
on CPR(3) |
|
|
|
= |
Annual Incentive -
RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target
Opportunity |
x |
|
Adjustment based
on CPR(3) |
|
|
|
= |
Long-Term
Incentive -
RSUs and Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Ranges from 45% to 85% based on level of responsibility |
|
|
|
|
(2) |
30% for named executive officers |
|
|
|
|
(3) |
Awards are increased or decreased by up to 30% depending on the Annual Corporate Performance Rating |
Rigorous Corporate Performance Goals
The annual incentive rating grid consists of a range of goals
for each corporate performance measure that corresponds to a range of payouts. The goals are based on the compensation committee’s
review of actual one-year, two-year and five-year historical compound annual growth rates on those measures achieved by companies
in our industry peer group, with consideration to future performance trends. After the goals are established, the committee continues
to track the most recent twelve months of peer performance to ensure that our targets remain competitive within our industry peer
group.
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
31 |
For the three-year corporate performance measures, the committee
establishes goals that are consistent with our internal plan for the same period, comparing and adjusting them against actual
five-year historical results within our industry peer group. Goals for the three-year performance period are set at the beginning
of the period rather than at the start of each fiscal year.
Our annual and three-year performance results may differ from
our reported results due to adjustments for designated items significantly affecting comparability of reported rates of growth
(for example, significant acquisitions or divestitures, 53-week fiscal years and foreign currency exchange rates). Please see
Appendix A for additional detail on these adjustments to our fiscal 2015 results.
Individual Performance Measurement
NEO Individual Performance Ratings typically range from 1.40
to 1.50. The ratings are based on the achievement of specific annual objectives, which include quantitative business performance
measures and qualitative goals such as completion of strategic initiatives, quality of business plans, organizational development
progress in important areas such as diversity and employee development, and fulfillment of leadership expectations. The compensation
committee approves the ratings for all NEOs.
In establishing the base incentive rates and incentive stock
award rates for the NEOs referenced on page 31, our compensation committee considers a number of factors, including the NEO’s
level of responsibility, duration with the company and in a specific role, and other factors related to the scope of the NEO’s
responsibilities.
Annual Incentive
The annual incentive program rewards the achievement of annual
corporate and individual performance objectives. Each award consists of an opportunity to earn cash and restricted stock units
(RSUs).
Annual incentive awards can vary greatly from year to year based
on the Annual Corporate Performance Rating and the NEO’s Individual Performance Rating:
• | The stock portion of
the annual incentive award is decreased by 1% from target pay opportunity for every 0.01
below a 1.30 CPR, and increased by 1% from target pay opportunity for every 0.01 above
1.50, with a maximum performance adjustment of plus or minus 30% based on the Annual
Corporate Performance Rating. |
• | The fiscal 2015 Annual
Corporate Performance Rating of 1.16 was below the 1.30 to 1.50 range of Annual Corporate
Performance Ratings associated with median performance. This rating resulted in a 14%
reduction in the stock portion of the annual incentive award. |
The cash incentive is subject to the terms of our Executive
Incentive Plan, and the RSUs are granted under our 2011 Stock Compensation Plan. RSUs earn dividend equivalents equal to regular
dividends paid on our common stock, which are distributed only to the extent the underlying units vest. RSUs are subject to a
four-year cliff vesting period from the grant date. All awards are subject to the company’s clawback policy.
CEO Annual Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The annual incentive award granted to our CEO for fiscal 2015 performance is summarized
below: |
|
ANNUAL INCENTIVE - CASH PORTION |
|
|
|
|
|
|
|
|
Individual |
|
|
Annual |
|
|
Base |
|
|
Corporate |
|
|
Performance |
|
|
Incentive |
Salary |
|
Incentive Rate |
|
|
Performance Rating |
|
|
Rating |
|
|
Cash |
$1,200,650 |
X |
85% |
|
X |
1.16 |
X |
|
1.42 |
= |
|
$1,681,054 |
|
|
|
|
|
|
ANNUAL INCENTIVE - STOCK PORTION |
|
|
|
|
|
Corporate |
|
|
|
|
|
Annual |
Annual Incentive |
|
Incentive Stock |
|
|
Performance Rating |
|
|
Stock Price on |
|
|
Incentive Stock |
Cash |
|
Award Rate |
|
|
Adjustment |
|
|
Grant Date |
|
|
Award |
$1,681,054 |
X |
30% |
|
X |
0.86 |
÷ |
|
$55.72 |
= |
|
7,784 shares |
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
32 |
Long-Term Incentive
The long-term incentive program rewards delivery of long-term
shareholder value, and is designed to retain key talent. A significant portion of the NEOs’ pay opportunity is provided
through these awards, which consist of a balance of PSUs, stock options and RSUs.
Annually, the compensation committee enlists the independent
compensation consultant to perform a competitive analysis of the executive compensation program, including long-term incentive
opportunities, to evaluate whether the opportunities remain tightly linked to performance and competitive within the industry
peer group, and more broadly competitive within the consumer packaged goods industry, where we often compete for executive talent.
The committee reviews the independent compensation consultant’s findings and adjusts long-term incentive opportunities accordingly.
All awards are granted under the 2011 Stock Compensation Plan.
PSUs and RSUs earn dividend equivalents equal to regular dividends paid on our common stock, which are distributed only to the
extent the underlying units vest. All awards are subject to our clawback policy.
Performance Share Units
Performance share units (PSUs) are earned based on our future
achievement of three-year corporate performance goals. Payouts can vary from 0% to 150% of the target number of PSUs, based on
results against the goals. PSUs are designed to focus executives on equally-weighted top-line and bottom-line operating metrics
that drive shareholder value: average net sales growth and cumulative free cash flow, which is cash from operating activities
less capital expenditures.
Each PSU earned is settled with a share of the company’s
common stock one year following the completion of the three-year performance period so that awards remain subject to a four-year
cliff vesting period from the grant date.
Stock Options and Restricted Stock Units
These awards are adjusted for annual performance. They are decreased
by 1% from target pay opportunity for every 0.01 below a 1.30 Annual Corporate Performance Rating, and increased by 1% from target
pay opportunity for every 0.01 above 1.50, with a maximum performance adjustment of plus or minus 30% based on the Annual Corporate
Performance Rating for that fiscal year.
The fiscal 2015 Annual Corporate Performance Rating of 1.16
was below the 1.30 to 1.50 range of Annual Corporate Performance Ratings associated with median performance, and resulted in a
14% reduction in the stock options and RSUs.
Stock options are subject to a four-year cliff vesting period
from the grant date. The exercise price per share equals the closing price of our common stock on the New York Stock Exchange
on the grant date. The options generally expire 10 years and one month from the grant date. RSUs are subject to a four-year cliff
vesting period from the grant date.
Special Awards
The compensation committee may grant special awards of RSUs
to retain key talent. The awards are designed with the independent compensation consultant’s advice on maximizing retention
value through features such as cliff vesting and an active service requirement for vesting. The size of the award is commensurate
with the officer’s role, and it is established with consideration for his or her total compensation package. At vesting,
the awards will be settled in stock. They earn dividend equivalents equal to regular dividends paid on our common stock, which
are distributed only to the extent the underlying award vests. In fiscal 2015, special awards were granted to Mr. Mulligan and
Mr. O’Leary under the 2011 Stock Compensation Plan. For more information, see the Grants of Plan-Based Awards for Fiscal
2015 on page 41.
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
33 |
CEO Long-Term Incentive
The CEO’s long-term incentive award of $4,786,286 (granted
in June 2015) consists of 33% PSUs, 38% stock options and 29% RSUs, by grant date fair value, which is indicated in bold
below:
RANGE
OF LONG-TERM INCENTIVE OPPORTUNITY |
Type
of
Award |
|
Performance
Period |
|
Less
than
Significantly
Below
Intended
Performance |
|
Significantly
Below
Intended
Performance
(1.00 CPR) |
|
|
Target
Performance
(1.50 CPR) |
|
Superior
Performance
(1.80 CPR) |
|
|
Actual
Performance
(1.16 CPR) |
|
|
|
Last
Fiscal Year |
|
-30%
of Target Pay Opportunity |
|
-30%
of Target Pay Opportunity |
|
|
Target
Pay
Opportunity |
|
+30%
of Target Pay Opportunity |
|
|
-14%
of Target Opportunity |
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
2015 |
|
|
|
|
$2,088,711 |
|
|
|
$1,796,295 |
|
RSUs |
|
2015 |
|
|
|
|
$1,607,522 |
|
|
|
$1,382,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type
of
Award |
|
Performance
Period |
|
Less
than
Threshold |
|
Threshold
Performance |
|
|
Target
Performance |
|
Maximum |
|
|
Actual
Performance |
|
|
|
Next 3
Fiscal Years |
|
$0 |
|
-50%
of Target |
|
|
Target Pay Opportunity |
|
+50%
of Target |
|
|
To Be Determined
2018; All Awards Vest 2019 |
|
PSUs |
|
2016-2018 |
|
|
|
|
$1,607,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards are shown at grant date fair value, and the number of
PSUs assumes a stock price of $55.72. Their ultimate values at vest will depend on total shareholder return during the vesting
period, and in the case of PSUs, our performance against the three-year corporate performance goals.
Other Elements of Compensation
Retirement and Health Benefits
We provide competitive retirement security and health benefits.
Our executives participate in the same benefit plans made available to U.S.-based salaried employees, including medical benefits,
disability and life insurance, Pension Plan and Supplemental Retirement Plan (designed to restore contributions that otherwise
would be lost because of limits in the Pension Plan), 401(k) Plan and Supplemental Savings Plan. See page 46 for further
details.
Perquisites
We provide modest, fiscally responsible perquisites that enable
our executives to focus on their duties. In fiscal 2015, we eliminated personal aircraft use. Accordingly, the only perquisites
we provide to our executives are a company automobile and a limited financial counseling benefit. See Perquisites and Other Personal
Benefits on page 41.
Severance
We provide a Separation Pay and Benefits Program to attract
and retain executives and to promote orderly succession for key roles. We do not have any employment contracts with our NEOs.
See page 50 for further details.
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
34 |
The Compensation Process
Determining Executive Compensation
The compensation committee regularly assesses the effectiveness
of the executive compensation program in driving performance, and it uses shareholder feedback, regulatory requirements and external
trends to inform its decision making. Any changes are typically approved in June for the new fiscal year. For the CEO, the board
reviews and approves the committee’s recommendations.
Each June, the compensation committee takes compensation actions
for the CEO and his direct reports based on performance from the most recently completed fiscal year and establishes goals for
the upcoming one- and three-year performance periods. In approving compensation actions for the most recently completed fiscal
year, the committee and the board primarily examine:
• |
Corporate performance as measured by our incentive programs; |
|
|
• |
Competitive market data prepared by the independent compensation consultant; |
|
|
• |
Each director’s written evaluation of the CEO’s performance against his objectives,
which were approved by the committee at the beginning of the fiscal year; |
|
|
• |
The recommendations of the CEO for the other executive officers; |
|
|
• |
Feedback from shareholders and the most recent say on pay vote; and |
|
|
• |
Tally sheets of cumulative earnings and stock awards to provide context for annual actions. |
The process for establishing and tracking performance goals
for the upcoming one- and three-year performance periods are discussed in greater detail under Rigorous Corporate Performance
Goals on page 31.
Frederic W. Cook & Co., Inc., the committee’s independent
compensation consultant, advises the compensation committee on director and executive compensation, but performed no other services
for General Mills in fiscal 2015. The compensation committee actively works with the independent compensation consultant to formulate
compensation decisions for our CEO. Management makes recommendations to the committee for the other executive officers, and the
independent compensation consultant advises the committee on those recommendations.
The compensation committee has sole authority to retain or replace
the independent compensation consultant, and the committee annually evaluates the engagement and assesses the consultant’s
independence in accordance with the listing standards of the New York Stock Exchange. Most recently, the committee determined
that the engagement did not raise any conflict of interest. In reaching this conclusion, the compensation committee considered
factors relevant to the consultant’s independence from management, including the six factors set forth in the listing standards.
In order to promote independent decision making on executive
compensation matters, the compensation committee meets in executive session without management present after each meeting, periodically
with the participation of the independent compensation consultant.
The Industry Peer Group
The compensation committee, with the assistance of management
and the independent compensation consultant, evaluates our executive compensation program against similar programs within the
consumer packaged goods industry peer group, which we also refer to as the industry peer group. In fiscal 2015, the compensation
committee conducted a comprehensive industry peer group review, with assistance from the independent compensation consultant.
The committee eliminated H.J. Heinz Co. because pay information is no longer publicly available. Effective for fiscal 2016, the
committee will add Dr. Pepper Snapple, J.M. Smucker and Reckitt Benckiser Group plc to the peer group. The Kraft Heinz Company
will replace Kraft Foods Group, Inc.
The compensation committee used the following selection criteria
in determining our industry peer group:
• |
Global, publicly traded consumer packaged goods companies within our sub-industries,
as identified by the S&P Global Industry Classification System (GICS), |
|
|
• |
Comparable scale and complexity of operations, as measured primarily by sales, market capitalization,
total assets and total employees, |
|
|
• |
Direct competitors for business, capital or industry talent, |
|
|
• |
Continuous and transparent disclosure of business results and executive compensation, and |
|
|
• |
Continuity from year to year. |
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
35 |
OUR
INDUSTRY PEER GROUP |
Campbell Soup Co. |
Dr. Pepper Snapple Group Inc.** |
Mondelēz International, Inc. |
Clorox Co. |
The Hershey Co. |
Nestlé SA* |
The Coca-Cola Co. |
The J. M. Smucker Company** |
PepsiCo, Inc. |
Colgate-Palmolive Co. |
Kellogg Co. |
The Procter & Gamble Co. |
ConAgra Foods, Inc. |
Kimberly-Clark Corp. |
Reckitt Benckiser Group plc** |
Danone Inc.* |
Kraft Foods Group, Inc. |
Unilever NV* |
|
The Kraft Heinz Company** |
|
|
|
* |
Excluded from compensation comparisons due to lack of publicly available pay information. |
|
|
** |
Effective fiscal 2016. |
|
|
HOW WE USE OUR INDUSTRY PEER GROUP |
|
|
• |
To assess pay levels and pay mix for executive officers, |
|
|
• |
To evaluate total direct compensation for executive officers in comparable positions, |
|
|
• |
To gauge relative financial performance and total shareholder return, |
|
|
• |
To evaluate annual and long-term incentive structure, |
|
|
• |
To review governance and terms of incentive awards, including vesting and clawback provisions, |
|
|
• |
To compare benefits, perquisites and severance, and |
|
|
• |
To review overall share usage and run rate. |
The compensation committee annually compares General Mills’
compensation under various performance scenarios versus industry peer group practices to ensure that our programs are competitive
and that pay is commensurate with performance.
Key Policies – Supplemental Information
Significant Executive Investment in Company
Stock
Long-term stock ownership is deeply engrained in our executive
culture, and it reflects our executives’ strong commitment to the company’s success. Minimum ownership requirements
are ten times salary for the CEO, which is a more aggressive requirement compared to our industry peer group, five times salary
for EVPs and SVPs, and three times salary for all other corporate officers. In fact, the CEO holds company stock worth 27 times
his base salary and the other NEOs hold company stock worth, on average, 16 times their base salaries. Executives must hold 50%
of net, after-tax shares that they receive pursuant to stock awards until they meet the ownership requirements. Stock ownership
includes direct and indirect ownership, deferred stock units, unvested RSUs, and stock units held in the 401(k) Plan.
STOCK OWNERSHIP FOR ACTIVE
NAMED EXECUTIVE OFFICERS
|
Required
Base |
|
Actual
Base Salary |
Name |
Salary
Multiple |
Shares
Owned |
Multiple |
K.J. Powell |
|
|
|
Chairman and CEO |
10x |
559,124 |
27x |
D.L. Mulligan |
|
|
|
EVP, CFO |
5x |
230,040 |
20x |
C. D. O’Leary |
|
|
|
EVP, COO, International |
5x |
241,068 |
21x |
J. L. Harmening |
|
|
|
EVP, COO, U.S. Retail |
5x |
111,777 |
11x |
J. R. Church |
|
|
|
EVP, Supply Chain |
5x |
106,024 |
12x |
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
36 |
Robust Clawback Policy
In the event the company is required
to restate financial results due to fraud, intentional misconduct, gross negligence or otherwise, the compensation committee
may adjust the future compensation, cancel outstanding stock or performance-based awards, or seek recoupment of previous
awards from company officers whose conduct contributed significantly to a financial restatement. Also, the compensation
committee may take these actions where it reasonably believes the company’s Employee Code of Conduct or the terms of a
separation agreement have been violated.
Restrictions on Hedging or Pledging
Company Stock
Executive officers and directors of the company are not permitted
to use options, contracts or other arrangements to hedge their holdings of company stock. They are also prohibited from pledging
company stock as security for loans without approval from the general counsel.
Compensation that is Tax Deductible to the
Company
The Executive Incentive Plan and the 2011 Stock Compensation
Plan have been structured so that incentive awards can typically qualify as performance-based compensation, which is tax-deductible
to the company under Section 162(m) of the Internal Revenue Code. However, the compensation committee reserves the right to grant
awards that are not subject to performance vesting, and that are not fully tax-deductible.
Compensation Committee Report
The compensation committee has reviewed and discussed the Compensation
Discussion and Analysis with management and, based on such review and discussions, the compensation committee recommended to the
board that the Compensation Discussion and Analysis be included in this Proxy Statement and in our Annual Report on Form 10-K
for the fiscal year ended May 31, 2015.
SUBMITTED BY THE COMPENSATION COMMITTEE
Bradbury H. Anderson, Chair
David M. Cordani
Raymond V. Gilmartin
Judith Richards Hope
Steve Odland
Michael D. Rose
GENERAL
MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
37 |
The following tables and accompanying narrative should be read
in conjunction with the Compensation Discussion and Analysis. They present compensation for our CEO and CFO, each of the other
three most highly-compensated executive officers active at the end of fiscal 2015, and for former executive officer Ian Friendly
(collectively, the named executive officers or NEOs).
The Summary Compensation Table is prepared according to SEC reporting
requirements, which for our company, means that Total Compensation includes pay elements earned in different fiscal years.
We have created a supplemental table, Total Direct Compensation,
which reports pay elements in the years in which they are earned, which is consistent with how the board evaluates our NEOs’
total direct compensation.
Summary Compensation
Table
Name and
Principal Position | |
|
Year | | |
Salary ($) | |
Stock Awards(1) ($) | |
Option Awards(2) ($) | |
Non-Equity
Incentive Plan
Compensation(3)
($) | |
Change in Pension Value(4) ($) | |
All Other
Compensation(5)
($) | |
Total
($) | | |
Total w/o
Change in
Pension
Value
($) | |
Kendall J. Powell | |
| 2015 | | |
| 1,200,650 | | |
| 3,416,985 | | |
| 1,858,710 | | |
| 1,681,054 | | |
| 5,124,882 | | |
| 147,780 | | |
| 13,430,061 | | |
| 8,305,179 | |
Chairman and CEO | |
| 2014 | | |
| 1,165,717 | | |
| 3,537,659 | | |
| 1,778,404 | | |
| 1,655,132 | | |
| 3,273,596 | | |
| 193,976 | | |
| 11,604,484 | | |
| 8,330,888 | |
| |
| 2013 | | |
| 1,133,583 | | |
| 2,886,124 | | |
| 1,168,909 | | |
| 2,180,504 | | |
| 2,944,683 | | |
| 198,020 | | |
| 10,511,823 | | |
| 7,567,140 | |
Donal L. Mulligan | |
| 2015 | | |
| 673,017 | | |
| 1,564,066 | | |
| 433,604 | | |
| 669,840 | | |
| 1,281,765 | | |
| 85,288 | | |
| 4,707,580 | | |
| 3,425,815 | |
EVP, CFO | |
| 2014 | | |
| 653,417 | | |
| 1,066,788 | | |
| 491,270 | | |
| 654,880 | | |
| 752,857 | | |
| 78,322 | | |
| 3,697,534 | | |
| 2,944,677 | |
| |
| 2013 | | |
| 635,417 | | |
| 844,145 | | |
| 322,905 | | |
| 886,406 | | |
| 719,368 | | |
| 76,664 | | |
| 3,484,905 | | |
| 2,765,537 | |
Christopher D. | |
| 2015 | | |
| 673,017 | | |
| 1,815,220 | | |
| 433,604 | | |
| 674,524 | | |
| 1,391,320 | | |
| 83,302 | | |
| 5,070,987 | | |
| 3,679,667 | |
O’Leary | |
| 2014 | | |
| 653,417 | | |
| 1,063,067 | | |
| 491,270 | | |
| 659,428 | | |
| 781,576 | | |
| 88,898 | | |
| 3,737,656 | | |
| 2,956,080 | |
EVP, COO, International | |
| 2013 | | |
| 635,417 | | |
| 847,579 | | |
| 322,905 | | |
| 874,588 | | |
| 647,188 | | |
| 78,171 | | |
| 3,405,848 | | |
| 2,758,660 | |
Jeffrey L. Harmening | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
EVP, COO, U.S.
Retail | |
| 2015 | | |
| 577,500 | | |
| 741,973 | | |
| 433,604 | | |
| 570,755 | | |
| 589,008 | | |
| 42,322 | | |
| 2,955,162 | | |
| 2,366,154 | |
John R. Church | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
EVP, Supply Chain | |
| 2015 | | |
| 513,583 | | |
| 479,165 | | |
| 257,898 | | |
| 397,274 | | |
| 974,814 | | |
| 49,451 | | |
| 2,672,185 | | |
| 1,697,371 | |
Ian R. Friendly | |
| 2015 | | |
| 54,717 | | |
| 814,038 | | |
| 433,604 | | |
| 68,987 | | |
| 1,154,432 | | |
| 1,318,561 | | |
| 3,844,339 | | |
| 2,689,907 | |
Former EVP, COO, | |
| 2014 | | |
| 653,417 | | |
| 1,055,624 | | |
| 491,270 | | |
| 654,880 | | |
| 936,049 | | |
| 89,601 | | |
| 3,880,841 | | |
| 2,944,792 | |
U.S. Retail | |
| 2013 | | |
| 635,417 | | |
| 837,698 | | |
| 322,905 | | |
| 850,950 | | |
| 1,022,970 | | |
| 107,374 | | |
| 3,777,314 | | |
| 2,754,344 | |
Total Direct Compensation
Including Incentive Awards in the Fiscal Year Earned and Excluding
Special Awards
| |
| | |
| | |
Annual Incentive | | |
Long-Term Incentive | | |
| |
Name | |
|
Year | | |
Salary ($) | |
Cash ($) | |
Stock Awards (RSUs) ($)(10) | |
Total ($) | | |
Stock Awards (PSUs at Target) ($)(11) | |
Stock Awards (Options) ($)(12) | |
Stock Awards (RSUs) ($)(10) | |
Total ($) | |
Total Direct Compensation ($) |
K. J. Powell | |
| 2015 | | |
| 1,200,650 | | |
| 1,681,054 | | |
| 433,724 | | |
| 2,114,778 | | |
| 1,607,522 | | |
| 1,796,295 | | |
| 1,382,469 | | |
| 4,786,286 | | |
| 8,101,714 | |
| |
| 2014 | | |
| 1,165,717 | | |
| 1,655,132 | | |
| 427,076 | | |
| 2,082,208 | | |
| 1,607,456 | | |
| 1,858,710 | | |
| 1,382,453 | | |
| 4,848,619 | | |
| 8,096,544 | |
| |
| 2013 | | |
| 1,133,583 | | |
| 2,180,504 | | |
| 686,866 | | |
| 2,867,370 | | |
| — | | |
| 1,778,404 | | |
| 2,850,793 | | |
| 4,629,197 | | |
| 8,630,150 | |
D. L. Mulligan | |
| 2015 | | |
| 673,017 | | |
| 669,840 | | |
| 172,843 | | |
| 842,683 | | |
| 375,107 | | |
| 419,044 | | |
| 322,507 | | |
| 1,116,658 | | |
| 2,632,358 | |
| |
| 2014 | | |
| 653,417 | | |
| 654,880 | | |
| 168,994 | | |
| 823,874 | | |
| — | | |
| 433,604 | | |
| 645,044 | | |
| 1,078,648 | | |
| 2,555,939 | |
| |
| 2013 | | |
| 635,417 | | |
| 886,406 | | |
| 279,251 | | |
| 1,165,657 | | |
| — | | |
| 491,270 | | |
| 787,537 | | |
| 1,278,807 | | |
| 3,079,881 | |
C. D. O’Leary | |
| 2015 | | |
| 673,017 | | |
| 674,524 | | |
| 174,069 | | |
| 848,593 | | |
| 375,107 | | |
| 419,044 | | |
| 322,507 | | |
| 1,116,658 | | |
| 2,638,268 | |
| |
| 2014 | | |
| 653,417 | | |
| 659,428 | | |
| 170,175 | | |
| 829,603 | | |
| — | | |
| 433,604 | | |
| 645,044 | | |
| 1,078,648 | | |
| 2,561,668 | |
| |
| 2013 | | |
| 635,417 | | |
| 874,588 | | |
| 275,529 | | |
| 1,150,117 | | |
| — | | |
| 491,270 | | |
| 787,537 | | |
| 1,278,807 | | |
| 3,064,341 | |
J. L. Harmening | |
| 2015 | | |
| 577,500 | | |
| 570,755 | | |
| 147,268 | | |
| 718,023 | | |
| 375,107 | | |
| 419,044 | | |
| 322,507 | | |
| 1,116,658 | | |
| 2,412,181 | |
J. R. Church | |
| 2015 | | |
| 513,583 | | |
| 397,274 | | |
| 102,525 | | |
| 499,799 | | |
| 225,109 | | |
| 251,423 | | |
| 193,516 | | |
| 670,048 | | |
| 1,683,430 | |
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
38 |
Footnotes to the Summary Compensation Table:
|
|
(1) |
2015 includes: |
|
|
|
The grant date fair value of RSUs granted during fiscal 2015 as annual
and long-term incentive awards for fiscal 2014 performance. There was a 14% decrease from target pay opportunity due to a
1.16 Annual Corporate Performance Rating for fiscal 2014, which was below the 1.30 to 1.50 range of Annual Corporate Performance
Ratings associated with estimated median performance for the industry peer group. Excludes awards based on fiscal 2015 performance
but granted after fiscal year end in June 2015. These awards are captured within the supplemental table, Total Direct Compensation. |
|
|
|
For Mr. Powell, 2015 also includes the grant date fair value of PSUs with
a three-year performance period (2015-17) and an additional fourth year of vesting. The PSUs’ value assumes target performance
over the performance period, and is consistent with the estimate of aggregate compensation cost to be recognized over the
performance period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.
At grant date, the value of the 2015 award, assuming maximum performance, would be $2,411,265. |
|
|
|
For Mr. Mulligan and Mr. O’Leary, 2015 also includes the grant date
fair value of RSUs granted as special retention awards. These awards are subject to five-year cliff vesting and a minimum
three-year active service requirement. |
|
|
|
Grant date fair value is calculated in accordance with FASB ASC Topic 718.
The grant date fair value of each stock award equals the closing price of our common stock on the New York Stock Exchange
on the grant date $53.70 in fiscal 2015, $48.33 in fiscal 2014 and $38.15 in fiscal 2013). The values shown have not been
adjusted to reflect that these units are subject to forfeiture. |
|
|
(2) |
2015 includes: |
|
|
|
The grant date fair value of options granted during fiscal 2015 for fiscal
2014 performance, calculated in accordance with FASB ASC Topic 718. There was a 14% decrease from target pay opportunity due
to a 1.16 Annual Corporate Performance Rating for fiscal 2014, which was below the 1.30 to 1.50 range of Annual Corporate
Performance Ratings associated with estimated median performance for the industry peer group. Excludes awards based on fiscal
2015 performance but granted after fiscal year end in June 2015. These awards are captured within the supplemental table,
Total Direct Compensation. |
|
|
|
The grant date fair value of options granted equals $7.22 per share (fiscal
2015), $6.03 per share (fiscal 2014) and $3.65 (fiscal 2013) based on our Black-Scholes option pricing model. The following
assumptions were used in the fiscal 2015 calculation: expected term of 8.5 years; dividend yield of 3.05% annually; dividend
growth rate of 8.00% annually; a risk-free interest rate of 2.55%; and expected price volatility of 17.49%. Fiscal 2014 and
2013 assumptions are listed in our proxy statements for those years. The values shown have not been adjusted to reflect that
these options are subject to forfeiture. |
|
|
(3) |
Includes the cash portion of the annual incentive award paid to our NEOs
under the Executive Incentive Plan for fiscal 2015 performance. The annual incentive award was paid partially in cash and
partially in RSUs that vest after four years, and was based on the achievement of certain individual and corporate performance
goals. For Mr. Friendly, includes the pro rata annual incentive award paid for fiscal 2015 performance according to the Separation
Pay and Benefits Program. |
|
|
(4) |
Includes the annual increase in the actuarial present value of accumulated
benefits under our Pension Plan and Supplemental Retirement Plan. |
|
|
|
There have been no enhanced pension benefits delivered to our NEOs via
a change in plan design over the last three fiscal years. Reasons for the increases include a lower discount rate and changes
in mortality assumptions reflecting longer lifespans, in addition to the typical increases in service, aging and “Final
Average Earnings” as defined in the Pension Benefits section. |
|
|
(5) |
All Other Compensation for fiscal 2015 includes the following amounts: |
|
|
|
Contributions |
Perquisites
and |
|
|
|
|
|
to Retirement
Savings Plans(7) |
Other Personal
Benefits(8) |
|
Total |
Name |
($) |
($) |
|
($) |
K. J. Powell |
|
119,276 |
|
28,504 |
|
|
147,780 |
|
D. L. Mulligan |
|
52,072 |
|
33,216 |
|
|
85,288 |
|
C. D. O’Leary |
|
51,414 |
|
31,888 |
|
|
83,302 |
|
J. L. Harmening |
|
25,736 |
|
16,586 |
|
|
42,322 |
|
J. R. Church |
|
33,347 |
|
16,104 |
|
|
49,451 |
|
I.
R. Friendly(6) |
|
27,222 |
|
14,172 |
|
|
41,394 |
|
|
|
(6) |
For Mr. Friendly, All Other Compensation also includes $1,244,337
in continuation of base salary and average bonus under the Separation Pay and Benefits Program through fiscal 2015 and $32,830
of accrued but unused vacation pay. These payments were made in connection with Mr. Friendly’s departure from the company
effective June 30, 2014, and are more fully described under Potential Payments Upon Termination or Change in Control. |
|
|
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
39 |
(7) |
Includes the company’s fixed and variable contributions
during fiscal 2015 to the 401(k) Plan, the Supplemental Savings Plan and the Deferred Compensation Plan. Contributions to
the Deferred Compensation Plan are made as if the NEO contributed these amounts to the 401(k) Plan and the Supplemental Savings
Plan. For more information on the terms of the contributions, see Other Retirement Savings Plans. |
CONTRIBUTIONS
TO RETIREMENT SAVINGS PLANS
| |
Matching Contributions to
Deferred Compensation | |
Matching Contributions
to 401(k) Plan | |
Contributions to
Supplemental Savings Plan | |
Total |
Name | |
($) | |
($) | |
($) | |
($) |
K. J. Powell | |
| — | | |
| 7,950 | | |
| 111,326 | | |
| 119,276 | |
D. L. Mulligan | |
| — | | |
| 8,022 | | |
| 44,050 | | |
| 52,072 | |
C. D. O’Leary | |
| — | | |
| 11,646 | | |
| 39,768 | | |
| 51,414 | |
J. L. Harmening | |
| — | | |
| 9,158 | | |
| 16,578 | | |
| 25,736 | |
J. R. Church | |
| — | | |
| 7,970 | | |
| 25,377 | | |
| 33,347 | |
I. R. Friendly | |
| 10,899 | | |
| 1,014 | | |
| 15,309 | | |
| 27,222 | |
(8) |
Includes the following perquisites and other personal benefits
for fiscal 2015: |
PERQUISITES
AND OTHER PERSONAL BENEFITS
| |
Personal Use of
Executive Car(9) | |
Financial
Counseling | |
Total |
Name | |
($) | |
($) | |
($) |
K. J. Powell | |
| 13,504 | | |
| 15,000 | | |
| 28,504 | |
D. L. Mulligan | |
| 15,718 | | |
| 17,498 | | |
| 33,216 | |
C. D. O’Leary | |
| 14,283 | | |
| 17,605 | | |
| 31,888 | |
J. L. Harmening | |
| 6,941 | | |
| 9,645 | | |
| 16,586 | |
J. R. Church | |
| 11,242 | | |
| 4,862 | | |
| 16,104 | |
I. R. Friendly | |
| 14,172 | | |
| — | | |
| 14,172 | |
(9) |
Includes the annual taxable value of the vehicle according
to Internal Revenue Service regulations plus the applicable Internal Revenue Service rate per mile to cover fuel and maintenance
charges. |
|
|
Footnotes to the Total Direct Compensation Table: |
|
(10) |
2015 includes the grant date fair value of RSUs granted as annual and long-term
incentive awards for fiscal 2015 performance, calculated in accordance with FASB ASC Topic 718. There was a 14% decrease from
target pay opportunity due to a 1.16 Annual Corporate Performance Rating, which was below the 1.30 to 1.50 range of Annual
Corporate Performance Ratings associated with estimated median performance for the industry peer group. |
|
|
|
The grant date fair value of each RSU granted for fiscal 2015 performance
equals the closing price of our common stock on the New York Stock Exchange on the grant date ($55.72). The values shown have
not been adjusted to reflect that the RSUs are subject to forfeiture. |
|
|
(11) |
2015 includes the estimated grant date fair value of PSUs with a three-year
performance period (fiscal 2016-18) and an additional fourth year of vesting. The PSUs’ value assumes target performance
over the performance period, and is consistent with the estimate of aggregate compensation cost to be recognized over the
performance period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. |
|
|
(12) |
2015 includes the grant date fair value of options granted for fiscal 2015
performance, calculated in accordance with FASB ASC Topic 718. There was a 14% decrease from target pay opportunity due to
a 1.16 Annual Corporate Performance Rating, which was below the 1.30 to 1.50 range of Annual Corporate Performance Ratings
associated with estimated median performance for the industry peer group. |
|
|
|
The grant date fair value of options granted for fiscal 2015 performance
equals $7.24 per share based on our Black-Scholes option pricing model. The following assumptions were used in the calculation:
expected term of 8.5 years; dividend yield of 3.16% annually; dividend growth rate of 7.00% annually; a risk-free interest
rate of 2.38%; and expected price volatility of 17.63%. The values shown have not been adjusted to reflect that these options
are subject to forfeiture. |
|
|
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
40 |
The following table describes cash opportunity and stock awards
granted in fiscal 2015.
Grants of Plan-Based
Awards For Fiscal 2015
| |
| |
| |
Estimated Possible
Payouts Under Non-Equity Incentive Plan Awards | | |
Estimated Future
Payouts Under Equity Incentive Plan Awards | | |
All Other Stock | |
All Other Option | |
| | |
Grant | |
Name | |
Grant Date | |
Award Type | |
Significantly Below Intended Performance (1.00 CPR) ($) | |
Superior Performance (1.80 CPR) ($) | |
Threshold (#) | |
Target (#) | |
Maximum (#) | |
Awards: Number of Shares of Stock or Units (#) | |
Awards: Number of Securities Underlying Options (#) | |
Exercise or Base Price of Option Awards ($/Sh) | |
Date Fair
Value of Stock and Option Awards ($) | |
K. J. Powell | |
6/24/2014(1) | |
Cash | |
| 1,428,774 | | |
| 2,755,492 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2014(2) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 7,953 | | |
| — | | |
| — | | |
| 427,076 | |
| |
6/24/2014(3) | |
PSU | |
| — | | |
| — | | |
| 14,967 | | |
| 29,934 | | |
| 44,901 | | |
| — | | |
| — | | |
| — | | |
| 1,607,456 | |
| |
6/24/2014(4) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 25,744 | | |
| — | | |
| — | | |
| 1,382,453 | |
| |
6/24/2014(5) | |
Options | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 257,439 | | |
| 53.70 | | |
| 1,858,710 | |
D. L. | |
6/24/2014(1) | |
Cash | |
| 565,334 | | |
| 1,090,287 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Mulligan | |
6/24/2014(2) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,147 | | |
| — | | |
| — | | |
| 168,994 | |
| |
6/24/2014(4) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,012 | | |
| — | | |
| — | | |
| 645,044 | |
| |
6/24/2014(5) | |
Options | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 433,604 | |
| |
6/24/2014(6) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 13,967 | | |
| — | | |
| — | | |
| 750,028 | |
C. D. | |
6/24/2014(1) | |
Cash | |
| 565,334 | | |
| 1,090,287 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
O’Leary | |
6/24/2014(2) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,169 | | |
| — | | |
| — | | |
| 170,175 | |
| |
6/24/2014(4) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,012 | | |
| — | | |
| — | | |
| 645,044 | |
| |
6/24/2014(5) | |
Options | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 433,604 | |
| |
6/24/2014(6) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 18,622 | | |
| — | | |
| — | | |
| 1,000,001 | |
J. H. | |
6/24/2014(1) | |
Cash | |
| 485,100 | | |
| 935,550 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Harmening | |
6/24/2014(2) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,805 | | |
| — | | |
| — | | |
| 96,929 | |
| |
6/24/2014(4) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,012 | | |
| — | | |
| — | | |
| 645,044 | |
| |
6/24/2014(5) | |
Options | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 433,604 | |
J. R. Church | |
6/24/2014(1) | |
Cash | |
| 323,558 | | |
| 624,004 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2014(2) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,779 | | |
| — | | |
| — | | |
| 95,532 | |
| |
6/24/2014(4) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 7,144 | | |
| — | | |
| — | | |
| 383,633 | |
| |
6/24/2014(5) | |
Options | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 35,720 | | |
| 53.70 | | |
| 257,898 | |
I. R. Friendly | |
6/24/2014(1) | |
Cash | |
| 45,962 | | |
| 88,641 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2014(2) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,147 | | |
| — | | |
| — | | |
| 168,994 | |
| |
6/24/2014(4) | |
RSU | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,012 | | |
| — | | |
| — | | |
| 645,044 | |
| |
6/24/2014(5) | |
Options | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 433,604 | |
(1) |
Annual Incentive Awards for Fiscal 2015 Performance:
Cash. Includes estimated possible payouts of the cash portion of annual incentive awards for significantly below intended
performance and superior performance in fiscal 2015 under the Executive Incentive Plan. Actual payouts are described in the
Summary Compensation Table. |
|
|
|
There is a range of performance goals that corresponds to a range of compensation
payouts. Significantly below intended performance payout assumes performance at the bottom end of the range in relation to
the industry peer group, which translates to an Annual Corporate Performance Rating of 1.00 and an Individual Performance
Rating of 1.40. Superior payout assumes superior performance, which translates to an Annual Corporate Performance Rating of
1.80 and an Individual Performance Rating of 1.50. For more information on how incentive awards are calculated based on performance
ratings, see the Compensation Discussion and Analysis. |
|
|
(2) |
Annual Incentive Awards for Fiscal 2014 Performance: Restricted Stock
Units. Includes RSUs earned in fiscal 2014 but granted in fiscal 2015 under the 2011 Stock Compensation Plan. |
|
|
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
41 |
(3) |
Long-Term Incentive Awards: Performance Share Units. Includes
PSUs that will be paid out based on a fiscal 2015-2017 performance period and an additional fourth year of vesting under the
2011 Stock Compensation Plan. Because the PSUs are awarded only if the company achieves certain three-year performance targets
described in the Compensation Discussion and Analysis, the amounts disclosed may not reflect the value ultimately provided
to the CEO. |
|
|
(4) |
Long-Term Incentive Awards: Restricted Stock Units. Includes
RSUs earned in fiscal 2014 but granted in fiscal 2015 under the 2011 Stock Compensation Plan. |
|
|
(5) |
Long-Term Incentive Awards: Options.
Includes options earned in fiscal 2014 but granted in fiscal 2015 under the 2011 Stock Compensation Plan. |
|
|
(6) |
Special Awards: Restricted Stock
Units. Includes retention awards granted under the 2011 Stock Compensation Plan, subject to five-year cliff vesting
and a minimum three-year active service requirement. |
The equity awards described reflect a 14% decrease due to below
median corporate performance, as expressed in the fiscal 2014 Annual Corporate Performance Rating. Information on other terms
of these awards are described under “Elements of Total Direct Compensation” in the Compensation Discussion and Analysis.
See Potential Payments Upon Termination or Change in Control for a discussion of how equity awards are treated under various termination
scenarios.
The following table summarizes the outstanding equity awards
as of May 31, 2015 for each of the NEOs.
Outstanding Equity
Awards at 2015 Fiscal Year End
| |
| |
Option Awards(2) | |
Stock Awards(2) |
| |
| |
Number of Securities Underlying Unexercised Options | |
Option | |
| | |
Number
of Shares
or Units
of Stock
That | |
Market Value of Shares or Units of Stock That | |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That | |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That |
| |
| |
(#) | |
Exercise | |
Option | |
Have Not | |
Have Not | |
Have Not | |
Have Not |
Name | |
Vesting
Date(1) | |
Exercisable | |
Unexercisable | |
Price
($) | |
Expiration
Date | |
Vested
(#) | |
Vested(3)
($) | |
Vested(4)
(#) | |
Vested(3)
($) |
K. J. Powell | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 13,394 | | |
| 752,073 | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 71,505 | | |
| 4,015,006 | | |
| — | | |
| — | |
| |
4/26/2016 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,546 | | |
| 255,258 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 11,602 | | |
| 651,452 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 64,050 | | |
| 3,596,408 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 14,212 | | |
| 798,004 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 58,986 | | |
| 3,312,064 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| | | |
| | | |
| 25,744 | | |
| 1,445,526 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| | | |
| | | |
| 7,953 | | |
| 446,561 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| | | |
| | | |
| | | |
| | | |
| 29,934 | | |
| 1,680,794 | |
| |
6/26/2010 | |
| 312,500 | | |
| — | | |
| 25.63 | | |
| 7/26/2016 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2011 | |
| 325,000 | | |
| — | | |
| 29.40 | | |
| 7/25/2017 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/23/2012 | |
| 483,788 | | |
| — | | |
| 31.70 | | |
| 7/23/2018 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/29/2013 | |
| 536,612 | | |
| — | | |
| 27.92 | | |
| 7/29/2019 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2014 | |
| 457,340 | | |
| — | | |
| 37.40 | | |
| 7/28/2020 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| 357,525 | | |
| 37.21 | | |
| 7/28/2021 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| 320,249 | | |
| 38.15 | | |
| 7/26/2022 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| 294,926 | | |
| 48.33 | | |
| 7/25/2023 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| 257,439 | | |
| 53.70 | | |
| 7/24/2024 | | |
| — | | |
| — | | |
| — | | |
| — | |
|
|
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
42 |
| |
| |
Option Awards(2) | |
Stock Awards(2) |
| |
| |
Number of Securities Underlying Unexercised Options | |
Option | |
| | |
Number of Shares or Units of Stock That | |
Market Value of Shares or Units of Stock
That | |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That | |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That |
| |
| |
(#) | |
Exercise | |
Option | |
Have Not | |
Have Not | |
Have Not | |
Have Not |
Name | |
Vesting
Date(1) | |
Exercisable | |
Unexercisable | |
Price
($) | |
Expiration
Date | |
Vested
(#) | |
Vested(3)
($) | |
Vested(4)
(#) | |
Vested(3)
($) |
D. L. | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,943 | | |
| 277,549 | | |
| — | | |
| — | |
Mulligan | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 19,753 | | |
| 1,109,131 | | |
| — | | |
| — | |
| |
4/26/2016 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,546 | | |
| 255,258 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,433 | | |
| 248,913 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 17,694 | | |
| 993,518 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 5,778 | | |
| 324,435 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 16,295 | | |
| 914,964 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,147 | | |
| 176,704 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,012 | | |
| 674,474 | | |
| — | | |
| — | |
| |
6/24/2019 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 13,967 | | |
| 784,247 | | |
| — | | |
| — | |
| |
6/25/2011 | |
| 62,400 | | |
| — | | |
| 29.40 | | |
| 7/25/2017 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/23/2012 | |
| 108,840 | | |
| — | | |
| 31.70 | | |
| 7/23/2018 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/29/2013 | |
| 120,722 | | |
| — | | |
| 27.92 | | |
| 7/29/2019 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2014 | |
| 126,337 | | |
| — | | |
| 37.40 | | |
| 7/28/2020 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| 98,764 | | |
| 37.21 | | |
| 7/28/2021 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| 88,467 | | |
| 38.15 | | |
| 7/26/2022 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| 81,471 | | |
| 48.33 | | |
| 7/25/2023 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 7/24/2024 | | |
| — | | |
| — | | |
| — | | |
| — | |
C. D. | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,940 | | |
| 277,381 | | |
| — | | |
| — | |
O’Leary | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 19,753 | | |
| 1,109,131 | | |
| — | | |
| — | |
| |
4/26/2016 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,546 | | |
| 255,258 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,523 | | |
| 253,966 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 17,694 | | |
| 993,518 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 5,701 | | |
| 320,111 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 16,295 | | |
| 914,964 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,012 | | |
| 674,474 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,169 | | |
| 177,939 | | |
| — | | |
| — | |
| |
6/24/2019 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 18,622 | | |
| 1,045,625 | | |
| — | | |
| — | |
| |
6/26/2010 | |
| 187,500 | | |
| — | | |
| 25.63 | | |
| 7/26/2016 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2011 | |
| 195,000 | | |
| — | | |
| 29.40 | | |
| 7/25/2017 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/23/2012 | |
| 126,976 | | |
| — | | |
| 31.70 | | |
| 7/23/2018 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/29/2013 | |
| 140,840 | | |
| — | | |
| 27.92 | | |
| 7/29/2019 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2014 | |
| 126,337 | | |
| — | | |
| 37.40 | | |
| 7/28/2020 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| 98,764 | | |
| 37.21 | | |
| 7/28/2021 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| 88,467 | | |
| 38.15 | | |
| 7/26/2022 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| 81,471 | | |
| 48.33 | | |
| 7/25/2023 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 7/24/2024 | | |
| — | | |
| — | | |
| — | | |
| — | |
|
|
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
43 |
| |
| |
Option Awards(2) | |
Stock Awards(2) |
| |
| |
Number of Securities Underlying Unexercised Options | |
Option | |
| | |
Number
of Shares
or Units
of Stock
That | |
Market Value of Shares or Units of Stock That | |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That | |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That |
| |
| |
(#) | |
Exercise | |
Option | |
Have Not | |
Have Not | |
Have Not | |
Have Not |
Name | |
Vesting
Date(1) | |
Exercisable | |
Unexercisable | |
Price
($) | |
Expiration
Date | |
Vested
(#) | |
Vested(3)
($) | |
Vested(4)
(#) | |
Vested(3)
($) |
J. L. | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 8,830 | | |
| 495,805 | | |
| — | | |
| — | |
Harmening | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,706 | | |
| 95,792 | | |
| — | | |
| — | |
| |
4/1/2016 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,810 | | |
| 270,082 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,997 | | |
| 112,132 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 9,462 | | |
| 531,291 | | |
| — | | |
| — | |
| |
7/16/2017 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 15,000 | | |
| 842,250 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,013 | | |
| 56,880 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 7,580 | | |
| 425,617 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,805 | | |
| 101,351 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,012 | | |
| 674,474 | | |
| — | | |
| — | |
| |
6/25/2011 | |
| 33,150 | | |
| — | | |
| 29.40 | | |
| 7/25/2017 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/23/2012 | |
| 55,260 | | |
| — | | |
| 31.70 | | |
| 7/23/2018 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/29/2013 | |
| 61,294 | | |
| — | | |
| 27.92 | | |
| 7/29/2019 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2014 | |
| 45,397 | | |
| — | | |
| 37.40 | | |
| 7/28/2020 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| 44,147 | | |
| 37.21 | | |
| 7/28/2021 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| 47,306 | | |
| 38.15 | | |
| 7/26/2022 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| 37,895 | | |
| 48.33 | | |
| 7/25/2023 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 7/24/2024 | | |
| — | | |
| — | | |
| — | | |
| — | |
J. R. Church | |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,342 | | |
| 131,503 | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 10,563 | | |
| 593,112 | | |
| — | | |
| — | |
| |
4/26/2016 | * |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,546 | | |
| 255,258 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 9,462 | | |
| 531,291 | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,171 | | |
| 121,902 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,737 | | |
| 153,683 | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 8,714 | | |
| 489,291 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,779 | | |
| 99,891 | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| — | | |
| — | | |
| — | | |
| 7,144 | | |
| 401,136 | | |
| — | | |
| — | |
| |
6/29/2013 | |
| 76,248 | | |
| — | | |
| 27.92 | | |
| 7/29/2019 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2014 | |
| 67,557 | | |
| — | | |
| 37.40 | | |
| 7/28/2020 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| 52,812 | | |
| 37.21 | | |
| 7/28/2021 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| 47,306 | | |
| 38.15 | | |
| 7/26/2022 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| 43,565 | | |
| 48.33 | | |
| 7/25/2023 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| 35,720 | | |
| 53.70 | | |
| 7/24/2024 | | |
| — | | |
| — | | |
| — | | |
| — | |
I. R. Friendly | |
6/25/2011 | |
| 195,000 | | |
| — | | |
| 29.40 | | |
| 7/25/2017 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/23/2012 | |
| 126,976 | | |
| — | | |
| 31.70 | | |
| 7/23/2018 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/29/2013 | |
| 140,840 | | |
| — | | |
| 27.92 | | |
| 7/29/2019 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2014 | |
| 126,337 | | |
| — | | |
| 37.40 | | |
| 7/28/2020 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/28/2015 | |
| — | | |
| 98,764 | | |
| 37.21 | | |
| 7/28/2021 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/26/2016 | |
| — | | |
| 88,467 | | |
| 38.15 | | |
| 7/26/2022 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/25/2017 | |
| — | | |
| 81,471 | | |
| 48.33 | | |
| 7/25/2023 | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
6/24/2018 | |
| — | | |
| 60,056 | | |
| 53.70 | | |
| 7/24/2024 | | |
| — | | |
| — | | |
| — | | |
| — | |
|
|
(1) |
Options and RSUs vest 100% four years after the grant date,
except that the asterisked awards (*) vest 100% five years after the grant date, subject to a three-year minimum active service
requirement. PSUs vest four years after the grant date, to the extent they are earned based on a three-year performance period. |
|
|
(2) |
Excludes incentive awards earned in fiscal 2015 but granted in fiscal 2016. |
|
|
(3) |
Market value of unvested RSUs and PSUs equals the closing price of our
common stock on the New York Stock Exchange at fiscal year end ($56.15) multiplied by the number of units. |
|
|
(4) |
Includes PSUs for the fiscal 2015-2017 performance period at the target
award level. |
|
|
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
44 |
The following table summarizes the option awards exercised and
RSUs vested during fiscal 2015 for each of the NEOs.
Option Exercises
and Stock Vested For Fiscal 2015
| |
Option Awards | |
Stock Awards |
Name | |
Number of Shares
Acquired on Exercise
(#) | |
Value Realized
on Exercise(1)
($) | |
Number of Shares
Acquired on Vesting
(#) | |
Value Realized
on Vesting(2)
($) |
K. J. Powell | |
| 206,250 | | |
| 5,982,281 | | |
| 110,941 | | |
| 5,803,324 | |
D. L. Mulligan | |
| 60,000 | | |
| 1,858,200 | | |
| 32,358 | | |
| 1,692,647 | |
C. D. O’Leary | |
| — | | |
| — | | |
| 31,898 | | |
| 2,798,184 | |
J. L. Harmening | |
| 30,876 | | |
| 878,422 | | |
| 11,921 | | |
| 623,588 | |
J. R. Church | |
| 12,375 | | |
| 364,815 | | |
| 37,494 | | |
| 2,044,711 | |
I. R. Friendly(3) | |
| — | | |
| — | | |
| 140,383 | | |
| 7,371,905 | |
|
|
(1) |
Value realized equals the market price of our common stock
on the New York Stock Exchange at exercise, less the exercise price, multiplied by the number of shares exercised. |
|
|
(2) |
Value realized equals the closing price of our common stock on the New
York Stock Exchange on the vesting date multiplied by the RSUs vested. |
|
|
(3) |
Stock awards include 108,170 RSUs (value at vest of $5,686,843) that accelerated
upon Mr. Friendly’s departure. Mr. Friendly deferred all but 4,546 of the shares acquired on vesting of his stock
awards. For more information on the terms of deferral, see Nonqualified Deferred Compensation. |
|
|
GENERAL MILLS, INC. - Notice
of 2015 Annual Meeting of Shareholders and Proxy Statement |
45 |
Pension Benefits
The company maintains two defined benefit pension plans that include
NEOs:
• |
The General Mills Pension Plan (Pension Plan) is a tax-qualified plan available generally to non-union employees in the United States that provides benefits based on a formula that yields an annual amount payable over the participant’s life. |
|
|
• |
The Supplemental Retirement Plan of General Mills, Inc. (Supplemental Retirement Plan) provides benefits based on the Pension Plan formula in excess of the Internal Revenue Code limits placed on annual benefit amounts and annual compensation under the Pension Plan. The Supplemental Retirement Plan also provides benefits based on the Pension Plan formula that is attributable to deferred compensation. |
The following table shows present value of accumulated benefits that
NEOs are entitled to under the Pension Plan and Supplemental Retirement Plan.
| |
| |
Number of Years | |
Present Value of | |
Payments During |
| |
| |
Credited Service(1) | |
Accumulated Benefit(2) | |
Last Fiscal Year(3) |
Name | |
Plan Name | |
(#) | |
($) | |
($) |
K. J. Powell(4) | |
Pension Plan | |
| 35.7823 | | |
| 1,654,059 | | |
| — | |
| |
Supplemental Retirement Plan | |
| 35.7823 | | |
| 25,577,372 | | |
| — | |
D. L. Mulligan(6) | |
Pension Plan | |
| 16.7500 | | |
| 696,064 | | |
| — | |
| |
Supplemental Retirement Plan | |
| 16.7500 | | |
| 4,085,069 | | |
| — | |
C. D. O’Leary(4) | |
Pension Plan | |
| 17.5000 | | |
| 782,924 | | |
| — | |
| |
Supplemental Retirement Plan | |
| 17.5000 | | |
| 4,653,679 | | |
| — | |
J. L. Harmening(5) | |
Pension Plan | |
| 20.8710 | | |
| 676,099 | | |
| — | |
| |
Supplemental Retirement Plan | |
| 20.8710 | | |
| 1,539,647 | | |
| — | |
J. R. Church(6) | |
Pension Plan | |
| 26.8334 | | |
| 896,128 | | |
| — | |
| |
Supplemental Retirement Plan | |
| 26.8334 | | |
| 2,801,947 | | |
| — | |
I. R. Friendly(7) | |
Pension Plan | |
| 31.0694 | | |
| 1,204,747 | | |
| — | |
| |
Supplemental Retirement Plan | |
| 31.0694 | | |
| 7,346,035 | | |
| — | |
(1) |
Number of years of credited service equals number of years of
actual service. |
|
|
(2) |
Actuarial present value is based on assumptions and methods used
to calculate the benefit obligation under standards established by the Financial Accounting Standards Board, including: |
|
|
|
• |
Discount rate equal to 4.40% as of the end of fiscal 2015; |
|
|
|
|
• |
Mortality rates based on the RP2014 Mortality Table with White Collar adjustment,
and MP2014 generational projection; |
|
|
|
|
• |
Single life annuity payments; |
|
|
|
|
• |
Age 62 (unreduced benefit retirement age), discounted to current age; and |
|
|
|
|
• |
No pre-retirement decrements or future increases in pay, service or legislated
limits. |
|
|
|
(3) |
In accordance with Section 409A of the Internal Revenue Code,
“key employees,” including the named executive officers, must wait six months from their termination date to begin
payment of any Supplemental Retirement Plan benefit accrued after December 31, 2004 and to receive a distribution of their
Supplemental Savings Plan account. |
|
|
(4) |
NEO is eligible for early retirement under both the Pension Plan
and the Supplemental Retirement Plan. |
|
|
(5) |
NEO is not eligible for early retirement. |
|
|
(6) |
NEO is not eligible for early retirement but currently qualifies
for enhanced early retirement reductions under the “Rule of 70,” as described in this section, under both the
Pension Plan and the Supplemental Retirement Plan. |
|
|
(7) |
NEO departed effective June 30, 2014. |
The Pension Plan and Supplemental Retirement Plan formulas provide
an annual benefit amount equal to 50% of Final Average Earnings less 50% of the Social Security benefit, prorated for benefit service
of less than 30 years, as discussed in this section. Final Average Earnings are the greater of (a) average of the highest five
full calendar years of compensation recognized under the Plans, and (b) amount in (a) increased by compensation in the partial
year of termination and decreased by the same ratio of compensation for lowest year in average. The Supplemental Retirement Plan
formula replaces (b) with the final 60 months of compensation. Final Average Earnings generally approximate the salary and non-equity
incentive plan compensation reported in the Summary
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
46 |
Compensation Table plus the value of the restricted stock unit portion
of annual incentive awards that vest during a measurement period. Other restricted stock unit awards and long-term incentive awards
are not included in compensation for these purposes.
Early retirement benefits are available after attaining age 55 and
five years of eligibility service. The Final Average Earnings portion of the benefit calculation is reduced by 2% per year for
the first three years and by 4% per year for each year thereafter by which commencement precedes age 62. The Social Security offset
portion of the benefit calculation is reduced by 5/9% for each of the first 36 months by which commencement precedes age 65. In
addition, a temporary early retirement supplement equal to the reduced social security benefit is payable to age 62. This social
security supplement is not available to those hired after January 1, 2005 or to those under the age of 50 as of June 1, 2012.
Employees that terminate prior to early retirement eligibility and
whose age plus years of eligibility service is greater than or equal to 70 at termination (“Rule of 70”), can commence
retirement benefits as early as age 55 with early commencement reductions that are somewhat less favorable than those eligible
for early retirement. Other terminations that occur prior to early retirement or Rule of 70 eligibility are eligible to commence
benefits as early as age 55 with reductions that are closer to actuarial equivalence.
The Supplemental Retirement Plan provides additional supplemental
pension benefits to involuntarily terminated participants in the Executive Incentive Plan if the sum of their current age and years
of service equals or exceeds 75, and they are not retirement eligible. They receive a supplemental retirement benefit equal to
the difference between their vested deferred pension benefit and a benefit determined under the early retirement provisions of
the Pension Plan.
All distributions under the Pension Plan and Supplemental Retirement
Plan are payable in cash. There are no provisions in either Plan that allow for additional years of service above the service actually
earned by a participant.
The normal form of payment under the Pension Plan for unmarried participants
is a “Single Life Pension,” which provides for monthly payments for the participant’s lifetime, and for married
participants, a “Joint and 50% to Survivor Pension,” which provide for monthly payments for the participant’s
lifetime and, after the participant’s death, to the participant’s designated joint pensioner for his or her lifetime
in 50% of the amount. Additional forms of payment are a “Joint and 75% to Survivor Pension” and a “Joint and
100% to Survivor Pension,” which provide for monthly payments for the participant’s lifetime and, after the participant’s
death, to the participant’s designated joint pensioner for his or her lifetime in 75% or 100% of the same amount, respectively,
and a “Life Annuity with Ten Year Certain,” which provides for a pension payable for the participant’s lifetime,
provided that if the participant dies before 120 monthly pension payments have been made, monthly payments will continue to the
participant’s beneficiary until a total of 120 payments have been made.
The normal form of payment under the Supplemental Retirement Plan
for unmarried participants is a “Single Life Pension,” and for married participants, a “Joint and 100% to Survivor
Pension.” A “Joint and 50% to Survivor Pension” is also available.
Other Retirement Savings Plans
In addition to the Pension Plan and Supplemental Retirement Plan (both
defined benefit plans), the company also offers the General Mills 401(k) Plan (401(k) Plan), a qualified plan available generally
to employees in the United States, and the Supplemental Savings Plan of General Mills, Inc. (Supplemental Savings Plan), a non-qualified
plan. The 401(k) Plan provides for participant contributions, together with a company match. For the NEOs and other U.S. salaried
employees hired before June 1, 2013, participant contributions to the 401(k) Plan can be matched up to 6% of earnable compensation
subject to Internal Revenue Code limits. The company match has fixed and variable components. The fixed match is 50% on the first
6% of pay. In addition, the company at its discretion may add up to another 50% on the first 6% of pay after the close of each
fiscal year, as an annual variable match. Company contributions that cannot be deposited in the 401(k) Plan due to deferred compensation
or federal limitations on contributions to qualified plans are credited to the Supplemental Savings Plan for eligible participants.
U.S. salaried employees hired on or after June 1, 2013 receive enhanced retirement benefits through the 401(k) Plan and the Supplemental
Savings Plan, instead of participating in the Pension Plan and Supplemental Retirement Plan.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
47 |
The contributions to the 401(k) Plan and Supplemental Savings Plan
for the NEOs for fiscal 2015 are reported in the Summary Compensation Table and reflect 50% of the maximum annual contribution
available. This contribution was granted to eligible 401(k) Plan participants in light of the company’s fiscal 2015 performance.
Distributions from the 401(k) Plan are permitted upon the earlier of termination or age 59.5. Distributions from the Supplemental
Savings Plan are made in the calendar year following termination.
Nonqualified Deferred Compensation
Our Deferred Compensation Plan is a non-qualified plan that provides
most of our executives, including the NEOs, with the opportunity to defer up to 50% of base salary, 90% of cash incentives and
100% of restricted stock units. The CEO can defer up to 100% of his base salary, less tax withholding.
Participants’ deferred cash accounts earn a daily rate of return
that tracks the investment return achieved under participant-selected investment funds, all of which are offered to participants
in our 401(k) Plan. Here are the investment funds that were available for the full fiscal year and their rates of return for fiscal
2015: Stable Value Fund (1.1%), Core Bond Fund (3.1%), Diversified U.S. Equity Fund (12.0%), Growth Equity Fund (14.8%), S&P
500 Index Fund (11.8%), Small & Midcap Fund (14.7%), Value Equity Fund (8.2%), Company Stock Fund (5.4%), International Developed
Markets Fund (2.3%), International Emerging Markets Fund (-5.3%) and Multi-Asset Class Fund (4.3%).
Participants are able to change their investment mix on a daily basis.
Stock units in participants’ deferred stock accounts earn dividend equivalents equal to regular dividends paid on our common
stock. These dividend equivalents are credited to the accounts or paid out to the participants. Dividend equivalents credited to
each account are used to “purchase” additional stock units for the account at a price equal to the closing price of
our common stock on the New York Stock Exchange on the dividend payment date.
We credit deferred accounts with additional stock units, as applicable,
equal to the value of the contributions that we would have otherwise made to the participants’ 401(k) Plan and Supplemental
Savings Plan accounts if the participants had not deferred compensation.
At the time of the deferral election, participants must also select
a distribution date and form of distribution. Participants must start receiving distributions from deferred accounts no later than
age 70. Furthermore, in the case of deferred cash, participants may not receive distributions for at least one year following the
date on which the cash otherwise would have been paid out. In the case of deferred equity awards, participants may not receive
shares of common stock in place of stock units for at least one year following the vesting date of the award. Participants may
elect to receive distributions in a single payment or up to ten annual installments.
| |
Executive | |
Registrant | |
| |
Aggregate | |
|
| |
Contributions in | |
Contributions | |
Aggregate | |
Withdrawals/ | |
Aggregate Balance |
| |
Last FY(1) | |
in Last FY(2) | |
Earnings in Last FY | |
Distributions(3) | |
at Last FYE |
Name | |
($) | |
($) | |
($) | |
($) | |
($) |
K. J. Powell | |
| 406,269 | | |
| — | | |
| 91,215 | | |
| 682,240 | | |
| 1,647,535 | |
D. L. Mulligan | |
| 656,694 | | |
| — | | |
| 440,448 | | |
| 449,887 | | |
| 5,587,014 | |
C. D. O’Leary | |
| 1,918,698 | | |
| — | | |
| 100,175 | | |
| — | | |
| 3,308,041 | |
J. L. Harmening | |
| — | | |
| — | | |
| 89,090 | | |
| — | | |
| 2,113,892 | |
J. R. Church | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
I. R. Friendly | |
| 7,639,778 | | |
| 10,899 | | |
| 1,452,655 | | |
| 753,543 | | |
| 20,467,161 | |
(1) |
Includes contributions that have been disclosed as
part of base salary for fiscal 2015 and part of non-equity incentive awards for fiscal 2014 in the Summary Compensation Table.
Non-equity incentive awards reported in the Summary Compensation Table are deferred after fiscal year end and do not appear
in this column until the following year. |
|
|
(2) |
All of the company’s fixed contributions for
the NEOs are included in their fiscal 2015 compensation in the Summary Compensation Table. The variable contributions reported
in the Summary Compensation Table occur after fiscal year end and do not appear in this column until the following year. |
|
|
(3) |
Includes dividends distributed on deferred stock units,
in addition to any other withdrawals and distributions. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
48 |
Potential Payments Upon Termination or Change in Control
Payments and benefits received by the NEOs upon termination are governed
by the arrangements described below and quantified at the end of this section. We have estimated the amounts involved assuming
that the termination became effective as of the last business day of fiscal 2015. The actual amounts to be paid out can only be
determined at the time of the NEO’s departure from the company.
Pension Plan and Supplemental
Retirement Plan
NEOs who are terminated for any reason receive their vested benefits
under the Pension Plan and Supplemental Retirement Plan as outlined in the Pension Benefits section.
Deferred Compensation
Plan
NEOs who are terminated for any reason receive contributions and accumulated
earnings as outlined in the Nonqualified Deferred Compensation section. Amounts are paid in accordance with the distribution date
and form of distribution elected by the NEO at time of deferral.
Executive Survivor Income
Plan
In the event that an NEO dies, his or her surviving spouse, or dependents
if there is no surviving spouse, receive a monthly benefit equal to a percentage of the NEO’s final average earnings under
the Pension Plan (1/12 of 25% for spouses or 1/12 of 12.5% divided equally among dependents) less benefits that are payable from
the company’s retirement plans. Benefits continue until the spouse’s death or until the dependents no longer satisfy
certain eligibility requirements. The benefit valuation at the end of this section assumes the NEO dies at the end of the fiscal
year, and payments are made to a surviving spouse. No new participants have been accepted into the Executive Survivor Income Plan
since September 1, 2000.
Stock Compensation Plans
Unvested equity awards granted to the NEOs are generally treated as
follows:
Nature
of Termination |
|
RSUs |
|
PSUs |
|
Stock
Options |
Voluntary |
|
Forfeit |
|
Forfeit |
|
Forfeit |
Involuntary for Cause |
|
Forfeit |
|
Forfeit |
|
Forfeit |
Involuntary without Cause where Age + Years of Service < 70 years |
|
Fully vest |
|
Vest based on actual performance |
|
Fully vest, exercisable for shorter of remainder of option term or one year |
Involuntary without Cause where Age + Years of Service ≥ 70 years |
|
Fully vest |
|
Vest based on actual performance |
|
Normal vesting continues, exercisable for remainder of option term |
Retirement — Normal and Early |
|
Fully vest |
|
Within 12 months of grant: pro rata vesting based on actual performance After 12 months: vest based on actual performance |
|
Normal vesting continues, exercisable for remainder of option term |
Death |
|
Fully vest |
|
Vest based on actual performance |
|
Fully vest, exercisable for remainder of option term |
Change in Control |
|
Double-trigger vesting |
|
Double-trigger vesting |
|
Subject to double-trigger vesting and then exercisable for one year |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
49 |
For double-trigger vesting: (1) the change in control must be consummated
and (2) the participant must be involuntarily terminated other than for cause, or must voluntarily terminate with good reason,
within two years of the change in control.
Health Benefits
The NEOs qualify for retiree medical benefits available to the rest
of our salaried employees in the United States. If an NEO is involuntarily terminated or terminated in connection with a change
in control, he or she can receive medical coverage for up to two years under the Severance Plan described below. This coverage
is the same as all other salaried employees would receive if involuntarily terminated, and as a result, is not included in the
values at the end of this section.
Executive Separation
Pay and Benefits Program
The General Mills Separation Pay and Benefits Program for Officers
(the Severance Plan) establishes the severance payments and benefits for all corporate executives, including the NEOs. The Severance
Plan is intended to attract and retain NEOs and to promote orderly succession for key roles, particularly during the critical period
surrounding a change in control when they are needed to minimize disruption to the business and to reassure shareholders and other
stakeholders. This Plan is in lieu of employment contracts, which we do not have with any NEO.
For the NEOs, the Severance Plan provides a two-year continuation
of base salary, average bonus, health benefits, life insurance and outplacement assistance following an involuntary termination
other than for cause, death or disability. The Severance Plan also provides for a pro-rated bonus in the year of termination based
on actual results for the year. Base salary and bonus continuation payments are made monthly over two years. Medical and dental
benefits are maintained by the company for two years.
In the event of a change in control and either (i) an involuntary
termination other than for cause, death or disability or (ii) voluntary termination for good reason within two years after a change
in control, select senior executives, including each NEO, will receive a lump sum payment equal to two years of base salary and
average bonus payable within 30 days of termination, in addition to the other benefits described above. Average bonus includes
bonus paid for each of the last three full fiscal years, or for such lesser number of years of employment.
Executives who are eligible for change in control payments will not
receive excise tax gross-ups on those payments to the extent they are subject to excise taxes under Internal Revenue Code Section
4999. Instead, change in control payments will be subject to a “net best” provision, whereby the NEOs will receive
either the original amount of the payment or a reduced amount, depending on which will provide them a greater after-tax benefit.
As a condition of receiving benefits under the Severance Plan, the
NEOs are required to sign a separation agreement containing a general release and confidentiality, cooperation with litigation,
non-disparagement, non-competition and non-solicitation provisions.
For the purposes of the Severance Plan, “change in control”
includes:
• |
Certain acquisitions of 20% or more of the voting power of securities entitled to vote in the election of directors; |
|
|
• |
Changes in a majority of the incumbent directors (incumbent directors include directors approved by a majority of the incumbents); |
|
|
• |
Certain reorganizations, mergers, asset sales or other transactions that result in existing shareholders owning less than 60% of the company’s outstanding voting securities; or |
|
|
• |
A complete liquidation of the company. |
“Cause” includes:
• |
Conviction of, or plea of guilty or no contest with respect to, a felony; |
|
|
• |
Improper disclosure of proprietary information or trade secrets of the company and its affiliates; |
|
|
• |
Willful failure to perform, or negligent performance of, employment duties; |
|
|
• |
Falsification of any records or documents of the company and its affiliates; |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
50 |
• |
Willful misconduct, misappropriation, breach of fiduciary duty, fraud, or embezzlement with regard to the company and its affiliates; |
|
|
• |
Violation of any employment rules, policies or procedures of the company and its affiliates; or |
|
|
• |
Intentional or gross misconduct that injures the business or reputation of the company and its affiliates. |
“Good reason” includes:
• |
Material diminishment of the executive’s position, authority, duties or responsibilities; |
|
|
• |
Decrease in base salary, annual bonus and/or long-term incentive opportunity; |
|
|
• |
Certain required relocations; or |
|
|
• |
Failure to bind successors to the Severance Plan. |
Payments and Benefits
as of the Last Business Day of Fiscal 2015
The payments and benefits for the NEOs under each termination scenario
are outlined below. Perquisites and other personal benefits are valued on the basis of their aggregate incremental cost to the
company.
TERMINATION AND CHANGE
IN CONTROL PAYMENTS AND BENEFITS
|
|
|
|
|
|
|
|
Change
in Control |
|
|
|
|
Involuntary Not
For |
|
|
|
under Severance |
Benefit or Payment |
|
Retirement |
|
Cause
Termination |
|
Death |
|
Plan |
Prorated Bonus |
|
Yes |
|
Yes |
|
Yes |
|
Yes |
Accrued Vacation Pay |
|
Yes |
|
Yes |
|
Yes |
|
Yes |
Deferred Compensation Plan Contributions and Earnings |
|
Yes |
|
Yes |
|
Yes |
|
Yes |
Vested Benefits in the Pension Plan and Supplemental Retirement Plan(1) |
|
Yes |
|
Yes |
|
Yes |
|
Yes |
Vesting of Unvested RSUs(2) |
|
Immediate |
|
Immediate |
|
Immediate |
|
Double Trigger |
Vesting of Unvested PSUs(3) |
|
Performance
Period + One Year |
|
Performance
Period + One Year |
|
Performance
Period + One Year |
|
Double Trigger |
Vesting of Unvested Stock Options(4) |
|
Continued |
|
Rule of 70 |
|
Immediate |
|
Double Trigger |
Medical and Life Insurance Benefits(5) |
|
General Plan |
|
Continued 2 yrs |
|
No |
|
Continued 2 yrs |
Spouse/Dependent Medical Benefits(5) |
|
General Plan |
|
Continued 2 yrs |
|
No |
|
Continued 2 yrs |
Pay Continuance |
|
No |
|
2 Years’ Salary &
Bonus |
|
No |
|
2 Years’ Salary &
Bonus |
Additional Pension Benefit(6) |
|
No |
|
Rule of 75/Age 55+ |
|
No |
|
Rule of 75/Age 55+ |
Outplacement Assistance |
|
No |
|
Yes |
|
No |
|
Yes |
Financial Counseling(7) |
|
Yes |
|
Rule of 70 |
|
Yes |
|
Rule of 70 |
Company Car Purchase Option |
|
Yes |
|
Yes |
|
No |
|
No |
Executive Survivor Income Plan(8) |
|
No |
|
No |
|
Yes |
|
No |
Office Space and Administrative Assistant |
|
CEO Only |
|
No |
|
No |
|
No |
(1) |
None of the NEOs except Mr. Powell and Mr. O’Leary were eligible for early retirement as of the last business day of fiscal 2015. |
|
|
(2) |
For vesting of unvested RSUs, the values included in the table at the end of this section are based on the number of RSUs that would have vested if termination occurred on the last business day of fiscal 2015, multiplied by the closing price of our common stock on the New York Stock Exchange as of that date ($56.15). |
|
|
(3) |
For vesting of unvested PSUs, the values included in the table at the end of this section are based on the number of PSUs that would have vested if termination occurred on the last business day of fiscal 2015, assuming target performance, multiplied by the closing price of our common stock on the New York Stock Exchange as of that date ($56.15). |
|
|
(4) |
For vesting of unvested stock options, the values included in the table at the end of this section are based on the number of options that would have vested if termination occurred on the last business day of fiscal 2015, multiplied by the difference between the exercise price and the closing price of our common stock on the New York Stock Exchange as of that date ($56.15). |
|
|
(5) |
The NEOs qualify for retiree medical benefits available to the rest of our salaried employees in the United States. Executives receive up to two years’ continued coverage and life insurance benefits if they are involuntarily terminated or terminated in connection with a change in control. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
51 |
(6) |
Under the Rule of 75, if the sum of an NEO’s age and years of service is equal to or
exceeds 75 and the officer is involuntarily terminated before early retirement eligibility, he or she receives a supplemental
retirement benefit equal to the difference between the officer’s vested deferred pension benefit and a benefit determined
under the early retirement provisions of the Pension Plan. Mr. Church was eligible for this benefit. |
|
|
(7) |
One year of financial counseling is available if the NEO is retirement eligible, or in cases
of involuntary termination or a change in control, if the NEO’s age plus years of service is equal to or exceeds 70.
Mr. Powell, Mr. Mulligan, Mr. O’Leary and Mr. Church qualified as of the last business day of fiscal 2015. One
year of financial counseling is also available to an NEO’s spouse upon the officer’s death, whether or not the
officer was retirement eligible. |
|
|
(8) |
No new participants have been accepted into the Executive
Survivor Income Plan since September 1, 2000. Mr. Powell and Mr. O’Leary participate in the Plan, though executives
such as Mr. Powell, who are early retirement eligible with long service, have de minimis benefits. |
The following table outlines the value of payments
and benefits that the NEOs except Mr. Friendly would receive under various termination scenarios as of the last business day of
fiscal 2015, excluding any prorated bonus, accrued vacation pay, Deferred Compensation Plan contributions and earnings, and vested
benefits in the Pension Plan and Supplemental Retirement Plan:
| |
| |
Involuntary Not For | |
| |
Change |
| |
Retirement | |
Cause Termination | |
Death | |
in Control |
Name | |
($) | |
($) | |
($) | |
($) |
K. J. Powell | |
| 17,915,245 | | |
| 23,191,472 | | |
| 33,642,754 | | |
| 39,820,849 | |
D. L. Mulligan | |
| — | | |
| 9,068,439 | | |
| 10,403,036 | | |
| 13,315,676 | |
C. D. O’Leary | |
| 6,426,928 | | |
| 9,342,815 | | |
| 11,209,420 | | |
| 13,590,052 | |
J. L. Harmening | |
| — | | |
| 7,858,939 | | |
| 6,000,458 | | |
| 7,858,939 | |
J. R. Church | |
| — | | |
| 5,588,054 | | |
| 5,270,132 | | |
| 7,868,014 | |
On June 30, 2014, Ian Friendly, our former Executive
Vice President; Chief Operating Officer, U.S. Retail, left the company and qualified for the following severance payments
and benefits, which are valued on the basis described above:
He received a two-year continuation of base salary
and average bonus totaling $2,696,575 under the Severance Plan. The portion paid to Mr. Friendly in fiscal 2015 is included in
the Summary Compensation Table. Vesting accelerated on 108,170 RSUs worth $5,686,843 at the time of separation, and his outstanding
options will continue to vest. The company granted Mr. Friendly a financial counseling allowance of $16,000 and outplacement
assistance valued at $44,000. Starting at age 55, Mr. Friendly also will receive a supplemental retirement benefit payable in monthly
installments over his lifetime, with an actuarial present value equal to $7,346,035. These payments represent the difference between
his vested deferred pension benefit and a benefit determined under the early retirement provisions of the Pension Plan.
He will also receive his prorated bonus, accrued
vacation pay, Deferred Compensation Plan contributions and earnings, vested benefits in the Pension Plan and Supplemental Retirement
Plan, and retiree medical benefits available to the rest of our salaried employees in the U.S.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
52 |
PROPOSAL
NUMBER 3 |
RATIFY APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The audit committee is responsible for the
selection, retention, oversight, evaluation, and compensation of the independent registered public accounting firm. The audit committee
has appointed KPMG LLP (KPMG) to serve as our independent registered public accounting firm for fiscal 2016. KPMG has served as
the company’s independent registered public accounting firm since 1928.
The audit committee annually reviews KPMG’s
qualifications, performance and independence in making its decision whether to engage KPMG. The audit committee considers a number
of factors, including:
• |
Recent and historical audit performance, including the results of a management survey concerning KPMG’s service; |
|
|
• |
The relevant experience, expertise and capabilities of KPMG and the audit engagement team in relation to the nature and complexity of our business; |
|
|
• |
A review of the firm’s independence and internal quality controls; |
|
|
• |
Any legal or regulatory proceedings that raise concerns about KPMG’s qualifications or ability to continue to serve as our independent registered public accounting firm, including reports, findings and recommendations of the Public Company Accounting Oversight Board; |
|
|
• |
The appropriateness of KPMG’s fees for audit and non-audit services; and |
|
|
• |
The length of time that KPMG has served as our independent registered public accounting firm, the benefits of maintaining a long-term relationship, and controls and policies for ensuring that KPMG remains independent. |
In accordance with SEC rules and company
policies, our lead engagement partner is limited to a maximum of five years of service in that capacity. In order to select the
lead engagement partner, management meets with each candidate for the role and then reviews and discusses the candidates with the
chair of the audit committee, who meets with selected candidates and approves the lead engagement partner.
Based on its annual review, the audit committee
believes that the retention of KPMG as our independent registered public accounting firm is in the best interests of our company
and its shareholders. We are asking shareholders to ratify the selection of KPMG for fiscal 2016. If shareholders do not ratify
the appointment of KPMG, the audit committee will reconsider its selection, but it retains sole responsibility for appointing and terminating
our independent registered public accounting firm.
Representatives from KPMG will attend the
2015 Annual Meeting and will have the opportunity to make a statement and answer questions.
The board of directors
unanimously recommends a vote FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting
firm for fiscal 2016.
Independent Registered Public Accounting Firm Fees
The following table shows aggregate fees
paid to KPMG in connection with the audits for fiscal years ended May 31, 2015 and May 25, 2014.
| |
Fiscal Year | |
(In
thousands) | |
2015 | | |
2014 | |
Audit Fees | |
$ | 7,645 | | |
$ | 7,695 | |
Audit-Related Fees(1) | |
| 1,252 | | |
| 355 | |
Tax Fees(2) | |
| 1,776 | | |
| 1,001 | |
All Other Fees(3) | |
| — | | |
| 34 | |
TOTAL FEES | |
$ | 10,673 | | |
$ | 9,085 | |
(1) |
Includes audit services for benefit plans and the General Mills Foundation, and due diligence services. |
|
|
(2) |
Includes tax structure services, transfer pricing studies, planning and compliance filings. |
|
|
(3) |
Includes services related to enterprise risk management. |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
53 |
The audit committee has determined that
performance of the services described in the table is compatible with maintaining the independence of KPMG.
The audit committee has a formal policy
concerning approval of all services to be provided by KPMG, including audit, audit-related, tax and other services. The policy
requires that all services KPMG may provide to us be pre-approved by the audit committee. The chair of the audit committee has
the authority to pre-approve permitted services that require action between regular audit committee meetings, provided the chair
reports to the full audit committee at the next regular meeting. The audit committee approved all services provided by KPMG during
fiscal years 2014 and 2015.
Audit Committee Report
The audit committee of the board of directors
consists of the six non-employee directors named below this report. Each member of the audit committee is an independent director
under our guidelines and as defined by New York Stock Exchange listing standards and SEC regulations for audit committee membership.
In addition, the board of directors has
unanimously determined that Mr. Cordani, Mr. Gilmartin, Ms. Miller, Ms. Ochoa-Brillembourg and Mr. Ryan each qualify as “audit
committee financial experts” within the meaning of SEC regulations and have accounting or related financial management expertise
within the meaning of New York Stock Exchange listing standards. The board of directors has also unanimously determined that all
audit committee members are financially literate within the meaning of the New York Stock Exchange listing standards.
The audit committee, which operates according
to its charter, is primarily responsible for oversight of our financial statements and internal controls; assessing and ensuring
the independence, qualifications and performance of the independent registered public accounting firm; approving the independent
registered public accounting firm’s services and fees; reviewing our risk assessment process and ethical, legal and regulatory
compliance programs; and reviewing and approving our annual audited financial statements before issuance, subject to the board
of directors’ approval. The audit committee’s charter may be found on our website at www.generalmills.com in
the Investors section under “Corporate Governance.”
The following is the report of the audit committee with respect to our audited
financial statements for the fiscal year ended May 31, 2015.
The audit committee has reviewed and discussed
the company’s audited financial statements for the fiscal year ended May 31, 2015 with management and KPMG LLP, the company’s
independent registered public accounting firm, with and without management present. In connection with that review, the audit committee
considered and discussed the quality of the company’s financial reporting and disclosures, management’s assessment
of the company’s internal control over financial reporting and KPMG’s evaluation of the company’s internal control
over financial reporting.
The audit committee has reviewed with KPMG
the matters required to be presented and communicated to the audit committee by Auditing Standard No. 16, as adopted by the Public
Company Accounting Oversight Board. This review included a discussion with management and the independent registered public accounting
firm of the quality, and not just the acceptability, of the company’s accounting principles, the reasonableness of significant
estimates and judgments, and the disclosures in the company’s consolidated financial statements, including the disclosures
relating to critical accounting policies.
In addition, the audit committee has discussed
with KPMG its independence from management and the company, as well as the matters in the written disclosures and the letter received
from KPMG required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered
public accounting firm’s communications with the audit committee concerning independence. In addition, the audit committee
has reviewed all fees paid to KPMG during the fiscal year and has considered the compatibility of KPMG’s performance of non-audit
services, including the tax planning services described above, with the maintenance of KPMG’s independence as the company’s
independent registered public accounting firm.
Based on the audit committee’s review
and discussions referred to above, the audit committee recommended to the company’s board of directors that the company’s
audited financial statements be included in the company’s annual report on Form 10-K for the fiscal year ended May 31, 2015
for filing with the SEC.
SUBMITTED BY THE AUDIT COMMITTEE:
Heidi G. Miller, Chair
David M. Cordani
Henrietta H. Fore
Raymond V. Gilmartin
Hilda Ochoa-Brillembourg
Robert L. Ryan
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
54 |
GENERAL INFORMATION
Other Business
We do not know of any other matters to be
presented at the 2015 Annual Meeting. If any other matter is properly presented for a vote at the 2015 Annual Meeting, proxies
other than the one for 401(k) Plan shares will be voted in the sole discretion of the proxy holders.
Questions and Answers About the 2015 Annual Meeting and Voting
Q. |
How do I attend the 2015 Annual Meeting? What do I need to bring? |
|
|
A. |
To attend the 2015 Annual Meeting, you must have been a shareholder at the close of business on the record date July 31, 2015, and you will need to bring an admission ticket. You may be asked to provide valid photo identification. Please note that seating is limited, and admission is on a first-come, first-served basis. |
|
|
|
You must print an admission ticket
at www.proxyvote.com. You will need the 16-digit control number printed on your Notice of Internet Availability of
Proxy Materials, voter instruction form or proxy card. For questions about admission to the Annual Meeting, please contact
us at 1-800-245-5703. |
|
|
|
Please note that cameras, recording equipment and other similar electronic devices, large bags and packages will not be allowed into the meeting and will need to be checked at the door. |
|
|
Q. |
How do I receive a printed copy of proxy materials? |
|
|
A. |
To request a printed copy of the proxy
materials, please call 800-579-1639, e-mail sendmaterial@proxyvote.com or visit www.proxyvote.com. To make
your request, you will need the 16-digit control number printed on your Notice of Internet Availability of Proxy Materials,
voter instruction form or proxy card. |
|
|
Q. |
Who is entitled to vote? |
|
|
A. |
Record holders of General Mills common stock at the close of business on July 31, 2015 may vote at the 2015 Annual Meeting. On July 31, 2015, 599,706,694 shares of common stock were outstanding and eligible to vote. The shares of common stock in our treasury on that date will not be voted. |
|
|
Q. |
How do I vote? |
|
|
A. |
If you hold your shares in a brokerage account in your broker’s name (“street name”), or you hold your shares through the General Mills 401(k) Plan, you should follow the voting directions provided by your broker or nominee: |
|
|
|
• |
You may complete and mail a voting instruction form to your broker or nominee. |
|
|
|
|
• |
If your broker allows, you may submit voting instructions by telephone or the Internet. |
|
|
|
|
• |
You may use a mobile device, scanning the QR Barcode on your voter instruction form or Notice of Internet Availability of Proxy Materials and following the prompts that appear on your mobile device. |
|
|
|
|
• |
You may also cast your vote in person at the 2015 Annual Meeting, but you must request a legal proxy from your broker or nominee. |
|
|
|
|
If you are a registered shareholder, you may vote using any of the following methods: |
|
|
|
• |
By going to the website www.proxyvote.com
and following the instructions for Internet voting on the proxy card or Notice of Internet Availability of Proxy Materials
that you received in the mail. You will need the 16-digit control number printed therein. You may also access instructions
for telephone voting on the website. |
|
|
|
|
• |
By using your mobile device to scan the QR Barcode on your proxy card or Notice of Internet Availability of Proxy Materials and following the prompts that appear on your mobile device. |
|
|
|
|
• |
If you received a printed copy of the proxy materials, by completing and mailing your proxy card, or if you reside in the United States or Canada, by dialing 800-690-6903 and following |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
55 |
|
|
the instructions for telephone voting on the proxy card that you received in the mail. You will need the 16-digit control number printed on your proxy card. |
|
|
|
|
• |
By casting your vote in person at the 2015 Annual Meeting. |
|
|
|
|
Telephone and Internet voting facilities will close at 11:59 p.m. Eastern Daylight Time on Monday, September 28, 2015, except that the telephone and Internet voting instruction deadline for 401(k) Plan shares is Midnight Eastern Daylight Time on Friday, September 25, 2015. |
|
|
|
We will vote your shares as you direct. You have three choices on each director nominee and other matters to be voted upon. You may vote (or abstain) by choosing FOR, AGAINST or ABSTAIN. |
|
|
|
If you return a proxy card but do not specify how you want to vote your shares, we will vote them FOR the election of the 11 director nominees set forth in this Proxy Statement, FOR the compensation paid to our named executive officers, and FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm. |
|
|
Q. |
What if I change my mind after I vote my shares? |
|
|
A. |
You can revoke or change your proxy at any time before it is voted at the 2015 Annual Meeting. |
|
|
|
If you hold your shares in a brokerage account in your broker’s name (“street name”), or you hold your shares through the General Mills 401(k) Plan, you may revoke or change your vote: |
|
|
|
• |
Via telephone or Internet, using the voting directions provided by your broker or nominee; or |
|
|
|
|
• |
By casting your vote in person at the 2015 Annual Meeting, but you must request a legal proxy from your broker or nominee. |
|
|
|
|
If you are a registered shareholder, you may revoke or change your vote by: |
|
|
|
• |
Voting by telephone or the Internet, using the voting directions provided on the proxy card or Notice of Internet Availability of Proxy Materials that you received in the mail; |
|
|
|
|
• |
Sending written notice to the Corporate Secretary, General Mills, Inc., P.O. Box 1113, Minneapolis, Minnesota 55440; |
|
|
|
|
• |
Submitting a properly signed proxy card with a later date; or |
|
|
|
|
• |
Voting in person at the 2015 Annual Meeting. |
|
|
|
Q. |
How will my General Mills 401(k) Plan shares be voted? |
|
|
A. |
If you hold your shares through the General Mills 401(k) Plan, you are considered a named fiduciary who may direct State Street Bank and Trust, as the plan fiduciary, how to vote your shares. For shares that are not allocated to participant accounts or for shares for which no direction has been received, State Street will vote those shares in the same proportion as directed shares are voted. State Street may, in exercising its fiduciary responsibility, disregard the direction on behalf of the unallocated shares and shares for which no direction was received and vote in its discretion, if following such direction would be inconsistent with the Employee Retirement Income Security Act. For instructions received by phone or Internet, the deadline is Midnight Eastern Daylight Time on Friday, September 25, 2015. Any instruction received by State Street regarding your vote shall be confidential. |
|
|
Q. |
What does it mean if I receive more than one proxy card or Notice of Internet Availability of Proxy Materials? |
|
|
A. |
It means you have multiple accounts at the transfer agent and/or with banks or stockbrokers. Please vote all of your accounts. If you would like to consolidate multiple accounts at our transfer agent, please contact Wells Fargo Shareowner Services at 800-670-4763. |
|
|
Q. |
What will happen if I do not return a proxy card or voter instruction form? |
|
|
A. |
If your shares are held in street name, your brokerage firm may vote your shares on those proposals where it has discretion to vote (Proposal Number 3). Otherwise, your shares will not be voted. |
|
|
Q. |
How many shares must be present to hold the 2015 Annual Meeting? |
|
|
A. |
At least one-half of General Mills’ outstanding common shares as of the record date must be represented at the 2015 Annual Meeting in person or by proxy in order to hold the Annual Meeting and conduct business. This is called a quorum. We will count your shares as present at the Annual Meeting if you: |
|
|
|
• |
Are present and vote in person at the Annual Meeting; |
|
|
|
|
• |
Have properly submitted a proxy card or a voter instruction form, or voted by telephone or the Internet on a timely basis; or |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
56 |
|
• |
Hold your shares through a broker or otherwise in street name, and your broker uses its discretionary authority to vote your shares on Proposal Number 3. |
|
|
|
Q. |
How many votes are needed to approve each item? |
|
|
A. |
All proposals require the affirmative vote of a majority of votes cast (excluding abstentions) by shareholders entitled to vote and represented at the 2015 Annual Meeting in person or by proxy. |
|
|
|
If an incumbent director is not re-elected by a majority of votes cast, the director must promptly offer his or her resignation to the board. The corporate governance committee will recommend to the board whether to accept or reject the resignation, and the board will disclose its decision and the rationale behind it within 90 days from the certification of the election results. |
|
|
Q. |
How will voting on any other business be conducted? |
|
|
A. |
We do not know of any
business to be considered at the 2015 Annual Meeting of Shareholders other than the proposals described in this Proxy
Statement. If any other business is properly presented at the Annual Meeting, your signed proxy card (other than for 401(k) Plan shares) gives authority to Kendall J. Powell and Richard C. Allendorf to vote on such matters in their discretion. |
|
|
Q. |
How are the votes counted? |
|
|
A. |
You are entitled to cast one vote for each share of common stock you own, and there is no cumulative voting. Although abstentions are counted as present at the 2015 Annual Meeting for purposes of determining whether there is a quorum under our By-laws, they are not treated as votes cast on a specific proposal. |
|
|
|
If you hold your shares in street name and do not provide voting instructions to your broker, your broker may not vote your shares on any proposal except Proposal Number 3 at the 2015 Annual Meeting. In this situation, a broker non-vote occurs. Shares that constitute broker non-votes will be counted as present at the Annual Meeting for the purpose of determining a quorum but will not be considered entitled to vote on the proposal in question. Broker non-votes effectively reduce the number of votes needed to approve the proposal. New York Stock Exchange rules permit brokers discretionary authority to vote on Proposal Number 3 at the 2015 Annual Meeting if they do not receive instructions from the street name holder of the shares. As a result, if you do not vote shares that are held for you in street name, your broker has authority to vote on your behalf with regard to Proposal Number 3. |
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|
|
We have a policy of confidential voting that applies to all shareholders, including our employee-shareholders. Broadridge Investor Communications Solutions will tabulate the votes received. |
|
|
Q. |
Where do I find the voting results of the meeting? |
|
|
A. |
We will publish the voting
results in a current report on Form 8-K, which is due to be filed with the SEC within four business days of the 2015 Annual
Meeting. You can also go to our website at www.generalmills.com to access the Form 8-K. |
|
|
Q. |
How do I submit a shareholder proposal? |
|
|
A. |
If you wish to submit a proposal for inclusion in our next Proxy Statement, we must receive the proposal on or before April 19, 2016. Please address your proposal to: Corporate Secretary, General Mills, Inc., P.O. Box 1113, Minneapolis, Minnesota 55440. |
|
|
|
Under our By-laws, if you wish to nominate a director or bring other business before the shareholders at our 2016 Annual Meeting without including your proposal in our Proxy Statement: |
|
|
|
• |
You must notify the Corporate Secretary of General Mills in writing between June 1, 2016 and July 1, 2016; and |
|
|
|
|
• |
Your notice must contain the specific information required in our By-laws. |
|
|
|
|
If you would like a copy of our By-laws, we will send you one without charge. Please write to the Corporate Secretary of General Mills at the address shown above. |
Solicitation of Proxies
We pay for preparing, printing and mailing this Proxy Statement
and the Notice of Internet Availability of Proxy Materials. We have engaged Phoenix Advisory Partners to help us solicit proxies
from shareholders for a fee of $15,000, plus reimbursement of out-of-pocket expenses.
In addition to Phoenix, our directors, officers and regular employees
may, without additional compensation, solicit proxies personally or by e-mail, telephone, fax or special letter. We will reimburse
banks, brokers and other custodians, nominees and fiduciaries for their costs of sending the proxy materials to our beneficial
owners.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
57 |
Delivery and Viewing of Proxy Materials
Electronic Delivery of Proxy Materials.
Simply follow the instructions on your proxy card or Notice of Internet Availability of Proxy Materials to vote via the
Internet, or go directly to www.icsdelivery.com/gis, to register your consent to receive our annual report and this Proxy
Statement in a fast and efficient manner via the Internet. This reduces the amount of paper delivered to a shareholder’s
address and eliminates the cost of sending these documents by mail. You may elect to view all future annual reports and proxy
statements on the Internet instead of receiving them by mail. Your election to view proxy materials online is perpetual unless
you revoke it later. Future proxy cards mailed to you will contain the Internet website address and instructions to view the materials.
You will continue to have the option to vote your shares by mail, telephone or the Internet. Certain employee shareholders who
have valid work e-mail addresses will not receive a proxy card in the mail but may vote by telephone or via the Internet.
Delivery
of Proxy Materials to Households. SEC rules allow us to deliver a single copy of an annual report and proxy statement to
any household at which two or more shareholders reside. We believe this rule benefits everyone. It eliminates duplicate mailings
that shareholders living at the same address receive, and it reduces our printing and mailing costs. This rule
applies to any annual reports, proxy statements, proxy statements
combined with a prospectus and information statements.
If your household would like to receive single rather than duplicate
mailings in the future, please write to Broadridge Investor Communications Solutions, Householding Department, 51 Mercedes Way,
Edgewood, New York 11717, or call 800-542-1061. Each shareholder will continue to receive a separate proxy card or Notice of Internet
Availability of Proxy Materials. If a broker or other nominee holds your shares, you may continue to receive some duplicate mailings.
Certain brokers will eliminate duplicate account mailings by allowing shareholders to consent to such elimination, or through implied
consent if a shareholder does not request continuation of duplicate mailings. Since not all brokers and nominees offer shareholders
the opportunity to eliminate duplicate mailings, you may need to contact your broker or nominee directly to discontinue duplicate
mailings from your broker to your household.
Your household may have received a single set of proxy materials
this year. If you would like to receive another copy of this year’s proxy materials, please write to Broadridge Investor
Communications Solutions, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or call 800-542-1061.
Annual Reports
Our 2015 Annual Report to Shareholders,
which includes our consolidated financial statements for the fiscal year ended May 31, 2015, is available on our website at www.generalmills.com
in the Investors section. Otherwise, please call 800-245-5703 and a copy will be sent to you without charge. You may also
request a free copy of our annual report on Form 10-K for the fiscal year ended May 31, 2015 by writing to the Corporate Secretary,
General Mills, Inc., P.O. Box 1113, Minneapolis, Minnesota 55440 or via e-mail at corporate.secretary@genmills.com.
Your vote is important!
Please vote by telephone or the Internet
or, if you received a printed copy of the proxy materials, sign and promptly return your proxy card in the enclosed envelope.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
58 |
APPENDIX A |
NON-GAAP FINANCIAL MEASURES |
We have included in this proxy statement measures of financial
performance that are not defined by generally accepted accounting principles (GAAP). Each of the measures is used in reporting
to our executive management and as a component of the board of director’s measurement of our performance for incentive compensation
purposes.
For each of these non-GAAP financial measures, we are providing
below a reconciliation of the differences between the non-GAAP measure and the most directly comparable GAAP measure. These non-GAAP
measures should be viewed in addition to, and not in lieu of, the comparable GAAP measures.
ORGANIC NET SALES GROWTH
ON A CONSTANT CURRENCY BASIS
| |
Fiscal 2015 | |
Net sales growth, as reported | |
| (2 |
)% | |
53rd week | |
| 1 |
pts | |
Acquisition | |
| — |
pts | |
Foreign currency exchange impact | |
| (3 |
)pts | |
Organic net sales growth, on a constant currency basis | |
| Flat |
% | |
TOTAL SEGMENT OPERATING
PROFIT
In
Millions | |
Fiscal 2015 | | |
Fiscal
2014 | | |
Change | |
Total segment operating profit | |
$ | 3,035.0 | | |
$ | 3,153.9 | | |
| (4)% | |
Unallocated corporate items | |
| 413.8 | | |
| 258.4 | | |
| | |
Divestiture (gain) | |
| — | | |
| (65.5 | ) | |
| | |
Restructuring, impairment, and other exit costs | |
| 543.9 | | |
| 3.6 | | |
| | |
Operating profit | |
$ | 2,077.3 | | |
$ | 2,957.4 | | |
| | |
TOTAL SEGMENT OPERATING
PROFIT GROWTH ON A CONSTANT CURRENCY BASIS
| |
Fiscal
2015 |
|
Total segment operating profit growth, as reported | |
| (4 |
)% |
|
Foreign currency exchange impact | |
| (2 |
)pts |
|
Total segment operating profit growth, on a constant currency basis | |
| (2 |
)% |
|
ADJUSTED EARNINGS PER SHARE GROWTH, EXCLUDING
CERTAIN ITEMS AFFECTING COMPARABILITY ON A
CONSTANT CURRENCY BASIS
Per Share Data | |
Fiscal
2015 | | |
Fiscal
2014 | | |
Change |
Diluted earnings per share, as reported | |
$ | 1.97 | | |
$ | 2.83 | | |
| (30 |
)% |
Mark-to-market effects(a) | |
| 0.09 | | |
| (0.05 | ) | |
| |
|
Divestiture gain, net(b) | |
| — | | |
| (0.06 | ) | |
| |
|
Tax item(c) | |
| 0.13 | | |
| — | | |
| |
|
Acquisition integration costs(d) | |
| 0.02 | | |
| — | | |
| |
|
Venezuela currency devaluation(e) | |
| 0.01 | | |
| 0.09 | | |
| |
|
Restructuring costs(f) | |
| 0.35 | | |
| 0.01 | | |
| |
|
Project-related costs(f) | |
| 0.01 | | |
| — | | |
| |
|
Indefinite-lived intangible asset impairment(g) | |
| 0.28 | | |
| — | | |
| |
|
Diluted earnings per share, excluding certain items affecting comparability | |
$ | 2.86 | | |
$ | 2.82 | | |
| 1 |
% |
Foreign currency exchange impact | |
| | | |
| | | |
| (3 |
)pts |
Diluted earnings per share growth, excluding certain items affecting comparability, on a constant currency basis | |
| | | |
| | | |
| 4 |
% |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
A-1 |
(a) |
See Note 7 to the Consolidated Financial
Statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2015. |
|
|
(b) |
See Note 3 to the Consolidated Financial
Statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2015. |
|
|
(c) |
The fiscal 2015 tax item is related to
the one-time repatriation of foreign earnings in fiscal 2015. |
|
|
(d) |
Integration costs resulting from the acquisition of Annie’s,
Inc. in fiscal 2015. |
|
|
(e) |
See Note 7 to the Consolidated Financial
Statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2015. |
|
|
(f) |
See Note 4 to the Consolidated Financial
Statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2015. |
|
|
(g) |
See Note 6 to the Consolidated Financial
Statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended May 31, 2015. |
IMPROVEMENT IN RETURN
ON AVERAGE TOTAL CAPITAL ON A CONSTANT CURRENCY BASIS
In
Millions | |
Fiscal
2015 |
|
| |
Fiscal
2014 | |
Net earnings, including earnings attributable to redeemable and noncontrolling interests | |
$ | 1,259.4 |
|
| |
$ | 1,861.3 | |
Interest, net, after-tax | |
| 199.8 |
|
| |
| 190.9 | |
Earnings before interest, after-tax | |
| 1,459.2 |
|
| |
| 2,052.2 | |
Mark-to-market effects | |
| 56.5 |
|
| |
| (30.5 | ) |
Tax items | |
| 78.6 |
|
| |
| — | |
Restructuring costs | |
| 217.7 |
|
| |
| 3.6 | |
Project-related costs | |
| 8.3 |
|
| |
| — | |
Acquisition integration costs | |
| 10.4 |
|
| |
| — | |
Divestiture gain, net | |
| — |
|
| |
| (36.0 | ) |
Venezuela currency devaluation | |
| 8.0 |
|
| |
| 57.8 | |
Indefinite-lived intangible asset impairment | |
| 176.9 |
|
| |
| — | |
Earnings before interest, after-tax for return on capital calculation | |
$ | 2,015.6 |
|
| |
$ | 2,047.1 | |
Current portion of long-term debt | |
$ | 1,000.4 |
|
| |
$ | 1,250.6 | |
Notes payable | |
| 615.8 |
|
| |
| 1,111.7 | |
Long-term debt | |
| 7,607.7 |
|
| |
| 6,423.5 | |
Total debt | |
| 9,223.9 |
|
| |
| 8,785.8 | |
Redeemable interest | |
| 778.9 |
|
| |
| 984.1 | |
Noncontrolling interests | |
| 396.0 |
|
| |
| 470.6 | |
Shareholders’ equity | |
| 4,996.7 |
|
| |
| 6,534.8 | |
Total capital | |
| 15,395.5 |
|
| |
| 16,775.3 | |
Accumulated other comprehensive loss | |
| 2,310.7 |
|
| |
| 1,340.3 | |
After-tax earnings adjustments (a) | |
| 347.1 |
|
| |
| (209.3 | ) |
Adjusted total capital | |
$ | 18,053.3 |
|
| |
$ | 17,906.3 | |
Adjusted average total capital | |
$ | 17,979.8 |
|
| |
$ | 17,676.2 | |
Return on average total capital | |
| 11.2 |
% |
| |
| 11.6 | % |
Improvement in return on average total capital | |
| (40 |
)bps |
| |
| | |
Foreign currency exchange impact | |
| (20 |
)bps |
| |
| | |
Improvement in return on average total capital, on a constant-currency basis | |
| (20 |
)bps |
| |
| | |
(a) |
Sum of current year and previous year after-tax adjustments |
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
A-2 |
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING
INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Proxy Statement contains or incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations
and assumptions.
The words or phrases “targeting,” “expect,”
“should,” “in progress,” or similar expressions identify “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results and those currently anticipated or projected. We wish
to caution you not to place undue reliance on any such forward-looking statements.
Our future results could be affected by a variety of factors,
such as: competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions,
advertising activities, pricing actions, and promotional activities of our competitors; consumer acceptance of new products and
product improvements; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional programs;
changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related issues,
including obesity; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, and
energy; disruptions or inefficiencies in the supply chain; effectiveness of restructuring and cost savings initiatives; volatility
in the market value of derivatives used to manage price risk for certain commodities; and benefit plan expenses due to changes
in plan asset values and discount rates used to determine plan liabilities.
We undertake no obligation to publicly revise any forward-looking
statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or
unanticipated events.
GENERAL MILLS, INC. - Notice of 2015 Annual Meeting of Shareholders and Proxy Statement |
A-3 |
2015 ANNUAL MEETING INFORMATION
For more information about the annual meeting and voting, as
well as answers to many frequently asked questions, please see “Questions and Answers About the 2015 Annual Meeting and Voting”
on page 55.
DATE AND LOCATION
| | Hilton Minneapolis, 1001 Marquette Avenue South, Minneapolis, Minnesota 55403 |
| | |
| | 8:30 a.m., Central Daylight Time
Tuesday, September 29, 2015
(No pre-meeting reception) |
VOTING
All proposals require the affirmative vote of a majority of votes
cast (excluding abstentions) by shareholders entitled to vote and represented at the 2015 Annual Meeting in person or by proxy.
Record holders of General Mills common stock at the close of
business on July 31, 2015 may vote at the 2015 Annual Meeting.
If you are a registered shareholder, you may vote
using any of the following methods: |
|
|
|
|
|
By Internet using your computer |
|
Vote by going to the website www.proxyvote.com and then follow the instructions for Internet voting on the proxy card
or Notice of Internet Availability of Proxy Materials that you received in the mail. |
|
|
|
|
|
By Internet
using your
tablet or
smartphone |
|
Use your mobile device to scan the QR Barcode on your proxy card or Notice of Internet Availability of Proxy Materials
and follow the prompts that appear on your mobile device. |
|
|
|
|
|
By telephone |
|
If you reside in the United States or Canada, dial 800-690-6903 and following the instructions for telephone voting on
the proxy card that you received in the mail. |
|
|
|
|
|
By mailing
your proxy
card |
|
If you received a printed copy of the proxy materials, complete and mail your proxy card. |
|
|
|
|
|
By casting
your vote in
person |
|
Cast your ballot at the 2015 Annual Meeting. |
|
If you hold your shares in a brokerage account in your broker’s name (“street name”), or you hold your shares through the General Mills 401(k) Plan, you should follow the voting directions provided by your broker or nominee: |
|
|
|
By Internet
using your
computer |
|
If your broker allows, you may submit voting instructions by the Internet. |
|
|
|
By Internet
using your
tablet or
smartphone |
|
Use your mobile device to scan the QR Barcode on your voter instruction form or Notice of Internet Availability of Proxy Materials and follow the prompts that appear on your mobile device. |
|
|
|
By telephone |
|
If your broker allows, you may submit voting instructions by telephone. |
|
|
|
By mailing
your proxy
card |
|
Complete and mail a voting instruction form to your broker or nominee. |
|
|
|
By casting your vote in person |
|
Cast your ballot at the 2015 Annual Meeting, but you must request a legal proxy from your broker or nominee. |
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