UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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DEAN FOODS COMPANY
(Name of
registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
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Dean Foods
Company Say-on-Pay Vote
May 2011 |
Say-on-Pay
Vote: 2011 In 2011, Dean Foods Company, along with many other public
companies, is soliciting your vote on executive compensation for the first
time. Glass Lewis recommended a vote FOR
our executive compensation, noting that
with respect to pay for performance, the Company adequately aligned executive
pay and corporate performance
in 2010, and that no pay for performance issues
had been identified which should be of substantial concern to
stockholders. ISS recommended a vote AGAINST
our executive compensation, despite rating
our pay for performance as a low
concern.
ISS noted that its recommendation is primarily due to the fact that we
entered into a change in control agreement with an executive officer in 2010
that provided for an excise tax gross-up in certain situations.
Notably, our stockholders voted to allow us to continue our use of these
gross-ups in 2010. We strongly disagree with ISS
analysis, which utilizes a one-size-fits all
approach and does not give appropriate weight to the important criteria of pay for
performance.
1 |
Excise Tax
Gross-Ups: 2010 Stockholder Vote Stockholders had the opportunity
to voice their opinion on excise tax gross-ups through their vote on a
stockholder proposal prohibiting future gross-ups in our 2010 proxy
statement, and agreed with the recommendation of our Board of Directors that
tax gross-ups were appropriate in the limited circumstances in which we
use them. Our stockholders have the opportunity to vote on this
proposal again in 2011. Our change in control agreements have not been
materially modified or amended since the 2010 vote. All of our
executive officers receive the same form of agreement, as described in our
proxy statement. We believe that to deny the same benefit to new
executive officers as given to existing executive officers would impede our
ability to attract and retain qualified executives.
2 |
2010 Compensation
Reflects Pay for Performance Philosophy
In 2010, our executive compensation clearly reflected the decline in our operating
results, in line with our pay for performance philosophy. Specific
examples include:
Executive officers participating in the Corporate and Fresh Dairy Direct
Short-Term Incentive Plans, including our CEO, received no payment with
respect to 60% of their target short-term incentive plan payout.
For executive officers participating in the Corporate and Fresh Dairy Direct
plans, the 40% of STI payable upon the achievement of individual
objectives
was reduced by an additional 25% and by an additional 37.5% for the CEO.
Our CEO voluntarily agreed to reduce his base salary from $1,100,000 to
$1,000,000, comprising a reduction of approximately 9%.
Salaries were frozen for all executive officers; no merit increases were
given.
3 |
Seeking
Your Support on Say-on-Pay We
strongly
believe
that
ISS
recommendation
fails
to
give
appropriate
weight
to
our
pay
for
performance
alignment
in
2010,
specifically
in
light
of
the
fact
that
we
received
a
favorable
stockholder
vote
with
respect
to
our
use
of
excise
tax
gross-ups
in
2010.
For
these
reasons,
our
Board
of
Directors
recommends
a
vote
FOR
Proposal
Three,
approving
our
executive
compensation
as
disclosed
in
the
2011
proxy
statement.
4 |