CORPORATE GOVERNANCE
Annually, the full Board discusses with senior management the most significant risks identified in the ERM process, providing input on the steps taken to mitigate each risk and plans for additional mitigation in the year ahead. In addition, the ERM team conducts periodic progress reviews of top enterprise risks with the accountable leaders, focusing on ensuring mitigation steps are on track and remain sufficient to mitigate the risk consistent with the plans shared with the Board. This enterprise level review program complements the Company’s ongoing GIA-led risk assurance activities.
SUCCESSION PLANNING
Ensuring that the Company has skilled, seasoned leaders in its executive ranks and talent pipeline is a critical aspect of the Company’s long-term strategy and success. Underscoring this importance, the Board, with assistance from the C&LD Committee, directly oversees succession planning for all executive officers, including the CEO. To support its oversight and planning, the Board, in both regular and executive sessions, reviews and discusses the performance of and development plans for the Company’s senior executives. The Board also interacts with these executives as part of Board business and functional reviews and in one-on-one meetings, helping ensure that our Directors are familiar with not only these individuals’ business results but also their broader leadership, management, and personal skills.
In order to ensure a strong pipeline for future succession, the C&LD Committee also conducts regular reviews of the Company’s high performing, more junior executives across business units and functions to ensure that appropriate development plans are in place for the next generation of leadership.
COMPENSATION-RELATED RISK
As part of its risk oversight responsibilities, the C&LD Committee annually reviews the Company’s compensation policies and practices. In fiscal 2022-23, the C&LD Committee employed an independent compensation consultant, Meridian Compensation Partners, which does not work for management and, among other tasks, reviewed and reported on all of the Company’s executive compensation programs, including the potential risks and other impacts of incentives created by the programs. For more details on the arrangement with Meridian Compensation Partners, please see the section entitled “Role of Compensation Consultant” in the Compensation Discussion & Analysis (“CD&A”) section of this proxy statement.
The independent compensation consultant’s review included an analysis of the Company’s short-, medium-, and long-term compensation programs covering key program details, performance factors for each program, target award ranges, maximum funding levels, and plan administrative oversight and control requirements. Key program elements assessed relating to potential compensation risks were pay mix, performance metrics, performance goals and payout curves, payment timing and adjustments, severance packages, equity incentives, stock ownership requirements, prohibitions on hedging and pledging, and trading policies. Members of management also performed a risk assessment of the Company’s other compensation programs including incentive programs from acquisitions, cost of programs, design elements, payment authorizations, and overall confirmation that plans do not encourage excessive risk-taking. The results of the consultant’s analysis of the Company’s executive compensation programs, as well as management’s review of the Company’s other compensation programs, were shared with the C&LD Committee, which concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
In reaching its conclusion, the C&LD Committee noted that the Company’s compensation programs include a mix of cash and equity, as well as annual, medium-term, and long-term incentives. This mix of compensation, the design features of these programs, and the Company’s respective oversight and control requirements mitigate the potential of any individual inclination toward taking unnecessary risks. The C&LD Committee also acknowledged various other features of the Company’s compensation programs, policies, and practices designed to mitigate unwarranted risk. For example, the Company’s annual cash bonus program, STAR, provides the C&LD Committee with discretion to reduce or eliminate any award that would otherwise be payable. In addition, the
32 The Procter & Gamble Company
CORPORATE GOVERNANCE
performance metrics under STAR include both quantitative measures (e.g., top-line growth, bottom-line profits, free cash flow, etc.) and qualitative measures (e.g., relative performance, internal controls, etc.). These non-metric features mitigate the risk of an executive focusing too much on the specific financial metrics under STAR. Moreover, the performance metrics associated with the STAR Company Factor (core earnings per share growth and organic sales growth) are aligned with the Company’s business plans and strategic objectives.
Further, the C&LD Committee recognized that the Company’s longer-term incentives include a balanced portfolio of stock options, restricted stock units, and performance stock units. These longer-term incentives incorporate a variety of payout horizons that focus executives on long-term performance: 10-year terms with three-year cliff-vesting for stock options, three-year cliff-vesting for restricted stock units, and a three-year performance period for performance stock units granted under the Performance Stock Program, or PSP. The C&LD Committee also noted that the design of the PSP reduces the likelihood that an executive will focus too much on a single performance measure by including four different performance categories with weightings of 20% or 30% each to provide a balanced risk profile. The categories are: organic sales growth relative to competitive peers, constant currency core before-tax operating profit growth, core earnings per share growth, and free cash flow productivity. In addition, actual performance against goals with respect to each of these performance measures will yield a payout from a minimum of 0% to a maximum of 200% of a senior executive’s target incentive opportunity. We believe that using this sliding scale approach, versus an all-or-nothing approach, discourages participants from taking unnecessary risks. Furthermore, the PSP also includes a relative Total Shareholder Return Multiplier to ensure further alignment with shareholder interests. Each of the financial measures is defined and further explained in the CD&A section of this proxy statement.
Finally, the C&LD Committee acknowledged that the Company maintains several policies intended to mitigate inappropriate risk-taking, including stock ownership guidelines for senior executives, a recoupment policy that can be applied in the event of any significant financial restatement, and an insider trading policy that prohibits margin and hedging transactions by senior executives.
Additional Governance Matters
COMPANY POLICY REGARDING EMPLOYEE, OFFICER, AND DIRECTOR HEDGING
The Company’s Global Insider Trading Policy prohibits Directors, senior executives, other designated employees, and certain persons or entities related to these individuals, from engaging in hedging, short sales, pledging, collars, or any other derivative transaction involving the use of market investments to manage the risk of price movements in Company stock or to leverage the potential return of a predicted move in Company stock.
REVIEW AND APPROVAL OF TRANSACTIONS WITH RELATED PERSONS
The Worldwide Business Conduct Manual requires that all employees and Directors disclose all potential conflicts of interest and promptly take actions to eliminate any such conflict when the Company requests. In addition, the Company has adopted a written Related Person Transaction Policy that prohibits any of the Company’s executive officers, Directors, or any of their immediate family members from entering into a transaction with the Company, except in accordance with the policy.
Under our Related Person Transaction Policy, the Chief Legal Officer has primary responsibility for determining whether, based on the facts and circumstances, a related person has a direct or indirect material interest in a proposed or existing transaction. If the CLO determines that the related person would have a direct or indirect material interest in the transaction, the CLO must present the transaction to the Audit Committee for review or, if impracticable under the circumstances, to the Chair of the Audit Committee, who must then either approve or reject the transaction in accordance with the terms of the policy. While making this determination, the Audit Committee must consider all relevant information available and, as appropriate, take into consideration the following:
|
• |
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whether the transaction was undertaken in the ordinary course of business of the Company |
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• |
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whether the transaction was initiated by the Company or the related person |
2023 Proxy Statement 33
SHAREHOLDER PROPOSALS
THE BOARD RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
P&G strongly disagrees with the proponent’s assertion that certain of the Company’s Equality & Inclusion efforts are “regressive developments” or that the Company “cater[s]” to only “certain identities.” P&G’s broad E&I aspirations and employee development work are designed to ensure our Company reflects the billions of diverse people we serve around the world.
Specifically, at P&G, we aspire to create a company where equality and inclusion are achievable for all; where respect and inclusion are the cornerstones of our culture; and where equal access to opportunity to learn, grow, succeed, and thrive are available to everyone. Integrated into both this aspiration and our work to achieve it is the core concept that our Equality & Inclusion efforts are for all employees. In fact, P&G’s Worldwide Business Conduct Manual explicitly requires that our employees treat one other, and the external parties with whom we do business, fairly, following all anti-discrimination laws in support of our commitment to provide equal opportunities in employment.
Our Employee Value Equation, a key area of focus within our broader superiority strategy, further reflects this. As a Company, we want to ensure that working at P&G delivers a superior experience and value for all employees. As a result, we continue to invest in strengthening our diverse, global organization and ensuring that we can source, retain, and develop top talent in the communities in which we operate around the world.
This work is broad in scope and built into our business strategy because P&G designs, manufactures, distributes, and advertises products that meet the needs of diverse consumers around the world—regardless of their gender, race, ethnicity, ability, or sexual orientation. To do that well and enable strong growth and value creation for shareholders, our employees must similarly reflect the diversity of the consumers we serve. In this way, the Company’s commitment to diversity, equality, and inclusion benefits all of our employees—and all of our shareholders—by better enabling us to understand and serve consumers from varied lifestyles, cultures, and markets globally.
We also believe that inclusion does not lead to exclusion or to labels that limit and confine our employees. Instead, we strive to have a Company culture where each individual employee can be their authentic self, bring their unique perspective to their work, and apply their distinctive talents and experiences to the business challenges and opportunities they face every day. We are proud of this work and are committed to continuing to serve consumers and our employees better through it. We share numerous examples of our efforts on our Equality & Inclusion website: https://us.pg.com/equality-and-inclusion/.1
In addition, our Board remains engaged in this aspect of our strategy, both through the C&LD Committee’s ongoing review of succession planning and our talent pipeline and the full Board’s discussions of the Company’s Employee Value Equation and E&I approach. For example, this last year, the Directors not only discussed the Company’s current workforce development programs with the Chief Human Resources Officer, they also met directly with more junior P&G employees in several small breakout sessions. In these sessions, the Directors sought input and perspective from employees about their decisions to join and remain with the Company and their priorities and concerns. The Board also reviewed, with the Chief Equality & Inclusion Officer, the Company’s Equality & Inclusion strategy, focusing on key objectives and efforts to, among other things, build a culture that enables every employee to perform at their best.
Not only do we strive to support all our employees, the Company also seeks to positively impact the communities in which our employees live and work. For example, P&G consistently contributes to and engages in meaningful community-focused efforts in Greater Cincinnati and in many more local communities across the country, like Northwest Arkansas; Kansas City; Iowa City; Mehoopany, Pennsylvania; and Box Elder, Utah. We also partner with organizations such as Mathew 25: Ministries and Feeding America to provide disaster relief to communities facing unexpected challenges, emergencies, and times of need. Our efforts over the last several years have included product donations for those impacted by wildfires in California and the Pacific Coast and providing supplies and free laundry services to those impacted by hurricanes in Louisiana, Florida, and Mississippi, by flooding in Kentucky
and Florida, and by tornados throughout several Midwestern and Southern states. This is consistent with how we
90 The Procter & Gamble Company
SHAREHOLDER PROPOSALS
THE BOARD RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
P&G’s current approach of reporting, risk management, and respect for human rights is a better and more comprehensive means to address the proposal’s concerns.
The Company’s existing reporting includes disclosure of material business, operations, and risks in countries around the globe.
As a public company, P&G is required to and does disclose material risks to our business in our periodic filings with the Securities and Exchange Commission. These disclosures are global in scope and include material risks facing the Company, material business developments, material effects of compliance with government regulations, and geopolitical and other economic conditions and uncertainties that could have a material impact on our operations or results. Thus, to the extent that the proposal raises concerns that are material to P&G’s business, we are already required to, and do, report on these matters in our SEC filings.
The Company has a robust Enterprise Risk Management program and Board oversight of material risks.
P&G’s Board of Directors is responsible for overseeing the development and execution of the Company’s business strategies as well as the risks associated with those strategies and the Company’s operations, including in markets around the world. As part of this oversight responsibility, the Board and its Committees regularly review the Company’s key strategic risks and its overall risk management approach.
For example, throughout the year, senior leaders of the Company’s business units, key markets, and corporate functions meet with the Board to discuss regular business updates and significant risks, challenges, and opportunities within their areas of responsibility, including operations within Greater China and other key countries or regions. In addition, the full Board reviews the most significant enterprise risks facing the Company, as identified in our Enterprise Risk Management process, at least annually. Individual risks identified through this process, or otherwise, are discussed throughout the year in Committees or with the full Board as appropriate.
This broad and comprehensive approach ensures that the Board and management review and discuss, on an ongoing basis, strategic and emerging risks as identified by business leaders and subject matter experts around the globe. This is a superior means to protect long-term shareholder value versus the recurring single-issue report requested by the proposal.
The Company has a strong commitment to respecting Human Rights.
Respecting human rights is a critical part of how P&G operates and how we manage our business around the world. Our commitment to respecting human rights is central to our values as a Company. We support the UN Guiding Principles on Business and Human Rights, and we expect our business partners to operate in the same manner.
P&G has also adopted policies to identify, mitigate, and address human rights impacts that may occur in our global operations. We have an open and anonymous reporting line, a self-assessment process, an investigations process, and targeted risk-based auditing of suppliers in industries with potential negative human rights impacts. If human rights abuses are alleged, we take action consistent with our responsibility. This is a core component of P&G’s human rights practices.
In addition, the Governance & Public Responsibility Committee of the Board oversees P&G’s human rights strategy and risks as part of its broader oversight of the Company’s public responsibility and social commitments. This ensures that our approach to identifying and addressing human rights risks is appropriate and consistent with the Company’s commitments.
P&G’s existing disclosures, our Board’s active and ongoing risk oversight, and our sound human rights approach are a better means to address the concerns raised in the proposal and to ensure long-term shareholder value.
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The Board of Directors recommends a vote AGAINST this shareholder proposal. |
2023 Proxy Statement 93
Pay vs Performance Disclosure
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12 Months Ended |
Jun. 30, 2023
USD ($)
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
|
Pay vs Performance Disclosure |
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|
|
Pay vs Performance Disclosure, Table |
Pay Versus Performance (PVP) Table
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Compensation Table (SCT) Total for CEO |
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|
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|
|
|
|
Average Compensation Actually Paid to |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,715,625 |
|
|
|
|
26,736,735 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
7,174,555 |
|
|
|
|
8,811,521 |
|
|
|
$ |
136.63 |
|
|
|
$ |
140.17 |
|
|
|
$ |
14.7 |
|
|
|
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
2021-22 |
|
|
|
17,716,015 |
|
|
|
|
30,332,659 |
|
|
|
|
18,595,382 |
|
|
|
|
34,333,232 |
|
|
|
|
6,783,743 |
|
|
|
|
11,363,522 |
|
|
|
$ |
126.14 |
|
|
|
$ |
131.49 |
|
|
|
$ |
14.8 |
|
|
|
|
6.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,900,381 |
|
|
|
|
38,202,429 |
|
|
|
|
6,683,975 |
|
|
|
|
10,555,409 |
|
|
|
$ |
115.62 |
|
|
|
$ |
123.29 |
|
|
|
$ |
14.4 |
|
|
|
|
6.4 |
% |
(1) |
Mr. Moeller served as CEO for the entirety of fiscal 2023. During FY 2022, Mr. Taylor served 4 months as CEO and 8 months as Executive Chairman of the Board before retiring at the end of FY 2022. Mr. Moller served 8 months as CEO during FY 2022. Mr. Taylor served as CEO for the entirety of fiscal 2021. |
(2) |
See section titled “Compensation Actually Paid Reconciliation” below for details on the CAP calculation. |
(3) |
The following non-CEO NEOs are included in the average compensation in columns (d) and (e) for each respective fiscal year above: |
|
• |
|
FY 2023 represented compensation for Andre Schulten, Ma. Fatima D. Francisco, Shailesh Jejurikar, and R. Alexandra Keith |
|
• |
|
FY 2022 represented compensation for Andre Schulten, Ma. Fatima D. Francisco, Shailesh Jejurikar, R. Alexandra Keith, and Carolyn Tastad |
|
• |
|
FY 2021 represented compensation for Andre Schulten, Jon Moeller, Steven Bishop, Mary Lynn Ferguson-McHugh, and Shailesh Jejurikar
|
(4) |
Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the S&P 500 Consumer Staples Index (SP500.30). |
(5) |
In accordance with SEC rules, the Company is required to include in the Pay versus Performance table the “most important” financial performance measures (as determined by the Company) used to link compensation actually paid to our executive officers to Company performance for the most recently completed fiscal year. The Company determined that Organic Sales Growth, which is a key driver of our annual and long-term incentive payouts, meets this requirement and therefore, we have included this performance measure in the Pay versus Performance table. See Exhibit A for a reconciliation of Organic Sales Growth to Net Sales Growth. |
|
|
|
Company Selected Measure Name |
Organic Sales Growth
|
|
|
Named Executive Officers, Footnote |
(3) |
The following non-CEO NEOs are included in the average compensation in columns (d) and (e) for each respective fiscal year above: |
|
• |
|
FY 2023 represented compensation for Andre Schulten, Ma. Fatima D. Francisco, Shailesh Jejurikar, and R. Alexandra Keith |
|
• |
|
FY 2022 represented compensation for Andre Schulten, Ma. Fatima D. Francisco, Shailesh Jejurikar, R. Alexandra Keith, and Carolyn Tastad |
|
• |
|
FY 2021 represented compensation for Andre Schulten, Jon Moeller, Steven Bishop, Mary Lynn Ferguson-McHugh, and Shailesh Jejurikar
|
|
|
|
Peer Group Issuers, Footnote |
Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the S&P 500 Consumer Staples Index (SP500.30).
|
|
|
Adjustment To PEO Compensation, Footnote |
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Summary Compensation Table (SCT) Total |
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|
(Deduct): Aggregate grant date fair value (“GDFV”) for stock awards and option awards included in the SCT (b) |
|
|
(14,997,563 |
) |
|
|
(4,441,759 |
) |
|
|
(13,552,685 |
) |
|
|
(12,044,670 |
) |
|
|
(4,432,973 |
) |
|
|
(15,283,808 |
) |
|
|
(3,893,129 |
) |
|
|
|
|
|
|
|
|
Add: Fair value at fiscal year end of awards granted during the covered fiscal year that were outstanding and unvested at fiscal year end (c) |
|
|
18,527,276 |
|
|
|
5,502,775 |
|
|
|
12,022,907 |
|
|
|
14,208,859 |
|
|
|
5,110,606 |
|
|
|
15,625,764 |
|
|
|
3,934,323 |
|
|
|
|
|
|
|
|
|
Add: Year-over-year change in fair value at fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the fiscal year end (d) |
|
|
1,100,946 |
|
|
|
494,333 |
|
|
|
8,156,040 |
|
|
|
5,143,672 |
|
|
|
2,005,209 |
|
|
|
8,814,092 |
|
|
|
2,432,618 |
|
|
|
|
|
|
|
|
|
Add: Fair value at vesting date of Stock Awards and Options granted and vested during the fiscal year (e) |
|
|
281,459 |
|
|
|
120,064 |
|
|
|
339,121 |
|
|
|
205,328 |
|
|
|
96,519 |
|
|
|
307,588 |
|
|
|
111,647 |
|
|
|
|
|
|
|
|
|
Add/(Deduct): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the fiscal year (f) |
|
|
108,992 |
|
|
|
(28,946 |
) |
|
|
8,772,467 |
|
|
|
5,103,456 |
|
|
|
1,800,418 |
|
|
|
4,838,412 |
|
|
|
1,285,975 |
|
|
|
|
|
|
|
|
|
Add: Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year (g) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
(Deduct): Aggregate change in the actuarial present value of the accumulated benefit under pension plan (h) |
|
|
0 |
|
|
|
(9,500 |
) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
Add: Aggregate service cost and prior service cost for pension plans (i) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
Total value of adjustments for stock awards and option awards |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
CAP Amounts (as calculated) |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
| -Footnotes:
a) |
Mr. Moeller served as CEO for the entirety of fiscal 2023. David Taylor is listed as the additional CEO in FY 2022. Mr. Taylor served 4 months as CEO and 8 months as Executive Chairman of the Board before retiring at the end of FY 2022. Mr. Moeller served 8 months as CEO in FY 2022. Mr. Taylor served as CEO for the entirety of fiscal 2021. |
b) |
Represents the aggregate grant date fair value as of the indicated fiscal year of the RSUs, PSUs and options granted to the CEO, and the additional CEO in fiscal 2021-22, and the average grant date fair values for the respective NEOs as applicable for each year, during such fiscal year, calculated using the same methodology used for financial statement reporting purposes. |
c) |
Represents the aggregate fair value as of the indicated fiscal year-end of outstanding and unvested stock awards and option awards granted during such fiscal year. Stock option fair values are calculated using an industry standard lattice-based valuation model as of the measurement date, which is based on the stock price and assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU fair values are calculated using the stock price and a Monte-Carlo simulation as of the measurement date, as well as a modifier for forecasted performance. RSU fair values as of the measurement date are calculated using the stock price on the measurement date plus accrued dividends. In fiscal 2021-22, the additional CEO (Mr. Taylor) as well as one non-CEO NEO retired on June 30, 2022, and, as such, the fair value of their 2022 options, RSUs and PSUs were pro-rated at 75% to reflect their fiscal year service and will not vest until 2025. |
d) |
Represents the aggregate change in fair value during the indicated fiscal year of the outstanding and unvested RSUs, PSUs and options. See footnote (c) above for information about our equity valuations. |
e) |
Represents the aggregate fair value at vesting of RSUs, PSUs and options that were granted and vested during the indicated fiscal year. See footnote (c) above for information about our equity valuations. Amounts in this row reflect the annual grant of RSUs under our PST Restoration Program, which is described in the Grants of Plan-Based Awards Table and footnotes. Additionally, for the CEO, an additional CEO in fiscal 2021-22, and any other retirement-eligible NEOs, this row includes the portion of any current year RSUs that was withheld to pay required payroll employment tax (FICA/Medicare) obligations (and income taxes due on the amounts withheld) due in connection with the executive qualifying as retirement-eligible during the applicable year. |
f) |
Represents the aggregate change in fair value, measured from the prior fiscal year-end to the vesting date, of each RSU, PSU and option that was granted in a prior fiscal year and which vested during the indicated fiscal year. See footnote (c) above for information about our equity valuations. |
g) |
Represents the fair value at the end of the prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year. No amounts were required to be reported for any CEO, additional CEO, or Other NEO. |
h) |
Represents the aggregate change in the actuarial present value of the accumulated benefit under pension plans. |
i) |
There are no service costs or prior service costs for any of the CEO, and the additional CEO for fiscal 2021-22, or the other NEOs. The applicable executives earned pensions in their home country but have been localized to the United States. As such, they are no longer earning benefits in their home country pension plans. |
|
|
|
Non-PEO NEO Average Total Compensation Amount |
$ 7,174,555
|
$ 6,783,743
|
$ 6,683,975
|
Non-PEO NEO Average Compensation Actually Paid Amount |
$ 8,811,521
|
11,363,522
|
10,555,409
|
Adjustment to Non-PEO NEO Compensation Footnote |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table (SCT) Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Deduct): Aggregate grant date fair value (“GDFV”) for stock awards and option awards included in the SCT (b) |
|
|
(14,997,563 |
) |
|
|
(4,441,759 |
) |
|
|
(13,552,685 |
) |
|
|
(12,044,670 |
) |
|
|
(4,432,973 |
) |
|
|
(15,283,808 |
) |
|
|
(3,893,129 |
) |
|
|
|
|
|
|
|
|
Add: Fair value at fiscal year end of awards granted during the covered fiscal year that were outstanding and unvested at fiscal year end (c) |
|
|
18,527,276 |
|
|
|
5,502,775 |
|
|
|
12,022,907 |
|
|
|
14,208,859 |
|
|
|
5,110,606 |
|
|
|
15,625,764 |
|
|
|
3,934,323 |
|
|
|
|
|
|
|
|
|
Add: Year-over-year change in fair value at fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the fiscal year end (d) |
|
|
1,100,946 |
|
|
|
494,333 |
|
|
|
8,156,040 |
|
|
|
5,143,672 |
|
|
|
2,005,209 |
|
|
|
8,814,092 |
|
|
|
2,432,618 |
|
|
|
|
|
|
|
|
|
Add: Fair value at vesting date of Stock Awards and Options granted and vested during the fiscal year (e) |
|
|
281,459 |
|
|
|
120,064 |
|
|
|
339,121 |
|
|
|
205,328 |
|
|
|
96,519 |
|
|
|
307,588 |
|
|
|
111,647 |
|
|
|
|
|
|
|
|
|
Add/(Deduct): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the fiscal year (f) |
|
|
108,992 |
|
|
|
(28,946 |
) |
|
|
8,772,467 |
|
|
|
5,103,456 |
|
|
|
1,800,418 |
|
|
|
4,838,412 |
|
|
|
1,285,975 |
|
|
|
|
|
|
|
|
|
Add: Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year (g) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
(Deduct): Aggregate change in the actuarial present value of the accumulated benefit under pension plan (h) |
|
|
0 |
|
|
|
(9,500 |
) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
Add: Aggregate service cost and prior service cost for pension plans (i) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
Total value of adjustments for stock awards and option awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAP Amounts (as calculated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| -Footnotes:
a) |
Mr. Moeller served as CEO for the entirety of fiscal 2023. David Taylor is listed as the additional CEO in FY 2022. Mr. Taylor served 4 months as CEO and 8 months as Executive Chairman of the Board before retiring at the end of FY 2022. Mr. Moeller served 8 months as CEO in FY 2022. Mr. Taylor served as CEO for the entirety of fiscal 2021. |
b) |
Represents the aggregate grant date fair value as of the indicated fiscal year of the RSUs, PSUs and options granted to the CEO, and the additional CEO in fiscal 2021-22, and the average grant date fair values for the respective NEOs as applicable for each year, during such fiscal year, calculated using the same methodology used for financial statement reporting purposes. |
c) |
Represents the aggregate fair value as of the indicated fiscal year-end of outstanding and unvested stock awards and option awards granted during such fiscal year. Stock option fair values are calculated using an industry standard lattice-based valuation model as of the measurement date, which is based on the stock price and assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU fair values are calculated using the stock price and a Monte-Carlo simulation as of the measurement date, as well as a modifier for forecasted performance. RSU fair values as of the measurement date are calculated using the stock price on the measurement date plus accrued dividends. In fiscal 2021-22, the additional CEO (Mr. Taylor) as well as one non-CEO NEO retired on June 30, 2022, and, as such, the fair value of their 2022 options, RSUs and PSUs were pro-rated at 75% to reflect their fiscal year service and will not vest until 2025. |
d) |
Represents the aggregate change in fair value during the indicated fiscal year of the outstanding and unvested RSUs, PSUs and options. See footnote (c) above for information about our equity valuations. |
e) |
Represents the aggregate fair value at vesting of RSUs, PSUs and options that were granted and vested during the indicated fiscal year. See footnote (c) above for information about our equity valuations. Amounts in this row reflect the annual grant of RSUs under our PST Restoration Program, which is described in the Grants of Plan-Based Awards Table and footnotes. Additionally, for the CEO, an additional CEO in fiscal 2021-22, and any other retirement-eligible NEOs, this row includes the portion of any current year RSUs that was withheld to pay required payroll employment tax (FICA/Medicare) obligations (and income taxes due on the amounts withheld) due in connection with the executive qualifying as retirement-eligible during the applicable year. |
f) |
Represents the aggregate change in fair value, measured from the prior fiscal year-end to the vesting date, of each RSU, PSU and option that was granted in a prior fiscal year and which vested during the indicated fiscal year. See footnote (c) above for information about our equity valuations. |
g) |
Represents the fair value at the end of the prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year. No amounts were required to be reported for any CEO, additional CEO, or Other NEO. |
h) |
Represents the aggregate change in the actuarial present value of the accumulated benefit under pension plans. |
i) |
There are no service costs or prior service costs for any of the CEO, and the additional CEO for fiscal 2021-22, or the other NEOs. The applicable executives earned pensions in their home country but have been localized to the United States. As such, they are no longer earning benefits in their home country pension plans. |
|
|
|
Compensation Actually Paid vs. Total Shareholder Return |
|
|
|
Compensation Actually Paid vs. Net Income |
|
|
|
Compensation Actually Paid vs. Company Selected Measure |
|
|
|
Total Shareholder Return Vs Peer Group |
|
|
|
Tabular List, Table |
The following table shows the financial metrics that are most important in linking compensation actually paid to our CEO and other NEOs to the Company’s performance for the most recently completed fiscal year. These metrics are included in our short- and/or long-term incentive programs, STAR and PSP, as detailed in the CD&A section above:
|
|
|
|
Organic Sales Growth |
|
Core EPS Growth |
|
Relative Organic Sales Growth |
|
Constant Currency Before Tax Operating Profit |
|
Free Cash Flow Productivity |
|
Relative TSR |
|
|
|
Total Shareholder Return Amount |
$ 136.63
|
126.14
|
115.62
|
Peer Group Total Shareholder Return Amount |
140.17
|
131.49
|
123.29
|
Net Income (Loss) |
$ 14,700,000,000
|
$ 14,800,000,000
|
$ 14,400,000,000
|
Company Selected Measure Amount |
0.069
|
0.067
|
0.064
|
PEO Name |
Mr. Moeller
|
Mr. Taylor
|
Mr. Taylor
|
Measure:: 1 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Organic Sales Growth
|
|
|
Measure:: 2 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Core EPS Growth
|
|
|
Measure:: 3 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Relative Organic Sales Growth
|
|
|
Measure:: 4 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Constant Currency Before Tax Operating Profit
|
|
|
Measure:: 5 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Free Cash Flow Productivity
|
|
|
Measure:: 6 |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Name |
Relative TSR
|
|
|
Mr. Moeller [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
PEO Total Compensation Amount |
$ 21,715,625
|
$ 17,716,015
|
|
PEO Actually Paid Compensation Amount |
26,736,735
|
30,332,659
|
|
David Taylor [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
PEO Total Compensation Amount |
|
18,595,382
|
$ 23,900,381
|
PEO Actually Paid Compensation Amount |
|
34,333,232
|
38,202,429
|
PEO | Mr. Moeller [Member] | Aggregate grant date fair value (GDFV) for stock awards and option awards included in the SCT [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(14,997,563)
|
(12,044,670)
|
|
PEO | Mr. Moeller [Member] | Fair value at fiscal year end of awards granted during the covered fiscal year that were outstanding and unvested at fiscal year end [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
18,527,276
|
14,208,859
|
|
PEO | Mr. Moeller [Member] | Yearoveryear change in fair value at fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the fiscal year end [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
1,100,946
|
5,143,672
|
|
PEO | Mr. Moeller [Member] | Fair value at vesting date of Stock Awards and Options granted and vested during the fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
281,459
|
205,328
|
|
PEO | Mr. Moeller [Member] | Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
108,992
|
5,103,456
|
|
PEO | Mr. Moeller [Member] | Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
|
PEO | Mr. Moeller [Member] | Aggregate change in the actuarial present value of the accumulated benefit under pension plan [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
|
PEO | Mr. Moeller [Member] | Aggregate service cost and prior service cost for pension plans [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
|
PEO | Mr. Moeller [Member] | Total value of adjustments for stock awards and option awards [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
5,021,110
|
12,616,645
|
|
PEO | David Taylor [Member] | Aggregate grant date fair value (GDFV) for stock awards and option awards included in the SCT [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
(13,552,685)
|
(15,283,808)
|
PEO | David Taylor [Member] | Fair value at fiscal year end of awards granted during the covered fiscal year that were outstanding and unvested at fiscal year end [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
12,022,907
|
15,625,764
|
PEO | David Taylor [Member] | Yearoveryear change in fair value at fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the fiscal year end [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
8,156,040
|
8,814,092
|
PEO | David Taylor [Member] | Fair value at vesting date of Stock Awards and Options granted and vested during the fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
339,121
|
307,588
|
PEO | David Taylor [Member] | Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
8,772,467
|
4,838,412
|
PEO | David Taylor [Member] | Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
0
|
0
|
PEO | David Taylor [Member] | Aggregate change in the actuarial present value of the accumulated benefit under pension plan [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
0
|
0
|
PEO | David Taylor [Member] | Aggregate service cost and prior service cost for pension plans [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
0
|
0
|
PEO | David Taylor [Member] | Total value of adjustments for stock awards and option awards [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
15,737,850
|
14,302,048
|
Non-PEO NEO | Aggregate grant date fair value (GDFV) for stock awards and option awards included in the SCT [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(4,441,759)
|
(4,432,973)
|
(3,893,129)
|
Non-PEO NEO | Fair value at fiscal year end of awards granted during the covered fiscal year that were outstanding and unvested at fiscal year end [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
5,502,775
|
5,110,606
|
3,934,323
|
Non-PEO NEO | Yearoveryear change in fair value at fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the fiscal year end [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
494,333
|
2,005,209
|
2,432,618
|
Non-PEO NEO | Fair value at vesting date of Stock Awards and Options granted and vested during the fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
120,064
|
96,519
|
111,647
|
Non-PEO NEO | Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(28,946)
|
1,800,418
|
1,285,975
|
Non-PEO NEO | Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
Non-PEO NEO | Aggregate change in the actuarial present value of the accumulated benefit under pension plan [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(9,500)
|
0
|
0
|
Non-PEO NEO | Aggregate service cost and prior service cost for pension plans [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
0
|
0
|
0
|
Non-PEO NEO | Total value of adjustments for stock awards and option awards [Member] |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
$ 1,636,966
|
$ 4,579,779
|
$ 3,871,434
|