UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Dean Foods Company
(Name of Registrant as Specified In Its Charter)
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FOCUS
Annual Meeting Voting Considerations |
Compensation Related Matters
Dean Foods is soliciting your advisory vote on our executive compensation program
ISS recommends voting FOR
approval of our executive compensation program while Glass
Lewis recommends AGAINST
approval of our program
Dean Foods is committed to a pay-for-performance philosophy
The Company provided significant stockholder value during 2012 and 2013
Completed the initial public offering of WhiteWave in October 2012
Entered into an agreement relating to the sale of the Morningstar division and
completed the sale in January 2013
Strong performance across all segments of the Companys business
Generated free cash flow of approximately $156 million in 2012
Repaid approximately $1.4 billion of debt in 2012
DF
stock
price
increased
approximately
47.4%
during
2012
and
has
increased
approximately
15.4%
in
2013
(as
of May 9, 2013)
2012
Increase
(47.4%)
-
Closing
Price
on12/30/11:
$11.20;
Closing
Price
on
12/31/2012:
$16.51
2013 Increase (15.4%)
Closing Price on 12/31/12: $16.51; Closing Price on 5/9/13: $19.06
Announced
spin-off
of
a
portion
of
remaining
interest
in
WhiteWave
effective
as
of
May
23,
2013 |
Compensation Related Matters
Dean Foods has implemented corporate governance best practices
Change in Control Agreements (CIC Agreements)
Eliminated tax gross-ups from future CIC agreements in 2011
Eliminated
the
modified
single
trigger
provision
in
CIC
agreements
in
May
2013
so
all
CIC
agreements have double triggers
Gregg Tanner, Chief Executive Officer, and other executive officers agreed to
amend existing CIC agreements to eliminate tax gross-ups and to move to
double triggers
Gregg
Tanner
voluntarily
removed
himself
as
a
participant
in
the
Companys
executive retention plan for the performance period ended December 31, 2013
The Board has adopted stock ownership guidelines for executive officers
Tom Davis was appointed as an independent Chairman of the Board in May
2013 |
Compensation Related Matters
ISS recommends voting FOR
approval of our executive compensation program
ISS originally recommended voting against approval of our executive compensation
program but reversed its recommendation after the Company eliminated the
modified single trigger provisions
from
its
CIC
agreements
and
Mr.
Tanner
entered
into
a
new
CIC
agreement
ISS notes that pay-for-performance is a low
concern
Glass Lewis recommends voting AGAINST
approval of our executive
compensation
program
and
the
election
of
Tom
Davis
as
a
director
because
he
serves on the Compensation Committee
We
strongly
disagree
with
Glass
Lewis
analysis,
which
criticizes
the
Companys
pay-for-
performance
Glass
Lewis
states
that
the
Company
performed
worse
than
its
peers
despite
an
approximate
47.4% increase in the Companys stock price during 2012. The Company
believes that any pay-for-performance
analysis
that
criticizes an approximate 47.4% increase in stock price and
associated increase in TSR (Total Shareholder Return) is fundamentally flawed.
|
Accelerated Vesting of Equity Awards
A stockholder proposal urges the Board to adopt a policy prohibiting the full
acceleration of equity awards upon a change in control of the Company
ISS
and
Glass
Lewis
each
recommend
voting
FOR
this
proposal
We strongly disagree with ISS
and Glass Lewis
recommendations and the Board
recommends voting AGAINST
this proposal
Accelerated vesting allows the management team to remain objective and focused on
protecting stockholder value in a change in control transaction, removes
some of the uncertainty for executives, including potential job loss, from
such a transaction, and helps management avoid potential conflicts of
interest and distractions that could exist in a change in control transaction
None of the companies in our peer groups have adopted the proposed policy so we
would be at a significant disadvantage in recruiting and retaining key
executives
The proposed policy disproportionately punishes senior executives as they may not
have the opportunity to realize value from their outstanding incentive
equity awards |
Equity Retention Guidelines
A stockholder proposal seeks to urge the Compensation Committee to adopt a
policy requiring the retention by senior executives of at least 75% of shares
received through compensation programs until retirement or termination
Glass
Lewis
recommends
voting
AGAINST
this
proposal
noting
that
such
a
policy may hinder the ability of the compensation committee to attract and
retain executive talent
and that the Companys stock ownership guidelines sufficiently
address the requests of this proposal
ISS recommends voting FOR
this proposal
We strongly disagree with ISS recommendation and the Board recommends
voting AGAINST
this proposal
The Board has adopted minimum stock ownership guidelines for executive officers
Current compensation programs provide balance between ensuring that
managements efforts are consistent with long-term objectives of
stockholders while permitting executives to prudently manage their own
financial affairs
The
proposed
policy
is
uncommon
among
our
peers
and
would
impair
our
ability
to
recruit
and
retain key executives |
Independent Chair
A
stockholder
proposal
seeks
to
urge
the
Board
to
adopt
a
policy
requiring
an
independent Chairman of the Board
On May 1, 2013, Mr. Tom Davis, an independent director, was appointed as the
Chairman of the Board
ISS recommends voting AGAINST
this proposal
Originally,
ISS
recommended
voting
FOR
such
proposal
but
reversed
the
recommendation
after the Board appointed an independent chairman on May 1st
Glass
Lewis
recommends
voting
FOR
this
proposal
and
has
not
updated
their
analysis of this proposal to account for the appointment of Mr. Davis as the
independent Chairman of the Board on May 1st |