DEF 14A: Hershey's Sets Date for 2024 Annual Stockholders Meeting, Outlines Key Proposals

Hershey Company announces its 2024 Annual Meeting of Stockholders to be held virtually on May 6, 2024, detailing proposals for director elections, auditor ratification, executive compensation, and stockholder considerations.

Summary

• The Hershey Company will hold its 2024 Annual Meeting of Stockholders virtually on May 6, 2024.
• Stockholders will vote on electing 11 director nominees, ratifying the appointment of Ernst & Young LLP as independent auditors, and providing an advisory vote on executive compensation.
• The meeting will also address stockholder proposals regarding a public report on living wage and income for cocoa farmers and a public report on packaging reuse and recycling.
• The record date for determining stockholders eligible to vote is March 8, 2024.
• The company is furnishing proxy materials online, with paper copies available upon request.
• The Board of Directors recommends voting for the election of directors, ratification of auditors, and approval of executive compensation, and against the stockholder proposals.
• The proxy statement includes details on corporate governance, director and executive compensation, related-party transactions, and other important matters.
• Hershey's vision is to be a Leading Snacking Powerhouse.
• The company's strategic imperatives include driving core confection business, building salty snacks, delivering international growth, expanding competitive advantage, and responsibly managing operations.
• In 2023, Hershey achieved 7.2% net sales growth and 12.6% adjusted earnings per share-diluted growth.
• The company's executive compensation program is designed to align with performance and stockholder interests, with a significant portion of compensation at-risk and tied to equity.

Sentiment

Score: 7

Explanation: The document presents a balanced view, highlighting both achievements and areas for improvement. The company's commitment to sustainability and ethical sourcing is positive, but concerns raised by stockholder proposals temper the overall sentiment.

Positives

• The company achieved 7.2% net sales growth and 12.6% adjusted earnings per share-diluted growth in 2023.
• The company's executive compensation program is designed to align with performance and stockholder interests, with a significant portion of compensation at-risk and tied to equity.
• The company is committed to product sustainability, including in our efforts to reduce packaging waste and improve the circularity of our product packaging.
• The company has eliminated PVC from our packaging and are committed to converting 100% of our packaging to be recyclable, reusable or compostable by 2030.

Negatives

• Stockholder proposals highlight concerns about living wages for cocoa farmers and packaging reuse/recycling, indicating areas where stakeholders believe the company needs to improve.
• The company acknowledges that its product packaging plays a significant role in reducing its Scope 3 emissions, yet has taken insufficient action in ensuring its end-of-life packaging is recycled at scale.

Risks

• The document mentions forward-looking statements are subject to risks and uncertainties, including supply chain disruptions, product quality and safety concerns, changes in raw material costs, increased competition, and governmental regulations.
• The document mentions risks and uncertainties related to our international operations; disruptions, failures or security breaches of our information technology infrastructure and that of our customers and partners (including our suppliers); our ability to hire, engage and retain a talented global workforce, our ability to realize expected cost savings and operating efficiencies associated with strategic initiatives or restructuring programs; complications with the design or implementation of our new enterprise resource planning system.

Future Outlook

The company's financial expectations for 2023 would be above our long-term guidance, with net sales projected to grow 6-8% and adjusted earnings per share projected growth of 9-11%.

Management Comments

• Our decisions regarding business strategy, operations and resource allocation are guided by our purpose and are rooted in our values of Togetherness, Integrity, Making a Difference and Excellence, consistent with our focus on creating value for all of our stakeholders over the long term.
• We operate our business with all stakeholders in mind and with a view toward long-term sustainability and value creation, even as our business and society face a variety of existing and emerging challenges.

Industry Context

The document references Hershey's position as a leading snacking powerhouse and its focus on meeting consumers' evolving snacking needs, indicating an awareness of and adaptation to industry trends.

Comparison to Industry Standards

• The document benchmarks executive pay against a peer group of publicly-held consumer products companies, including Brown-Forman Corporation, General Mills, Inc., and Mondelez International, Inc.
• The document mentions that more than 100 leading companies have committed to promoting a circular economy for packaging by acknowledging responsibility for the collection, sorting, and recycling of packaging at end-of-life, a policy known as Extended Producer Responsibility (EPR).
• The document mentions that competitor Nestl and at least 28 other major consumer goods companies make voluntary contributions to expand recycling infrastructure.

Related Party Transactions

• On February 13, 2023, the Company entered into a Stock Purchase Agreement with Hershey Trust Company, as trustee for the Milton Hershey School Trust, pursuant to which the Company agreed to purchase 1,000,000 shares of the Companys Common Stock from the Milton Hershey School Trust at a price equal to $239.91 per share, for a total purchase price of $239,910,000.

Stakeholder Impact

• The document discusses the company's commitment to creating value for all stakeholders, including consumers, employees, communities, and stockholders.
• The document discusses the company's efforts to address poverty, child labor, and deforestation in cocoa-growing communities, indicating a focus on the impact on these stakeholders.

Next Steps

• Stockholders are encouraged to vote by proxy prior to the Annual Meeting.
• The company will publish its 2023 ESG Report in May 2024.
• The company plans to expand the Income Accelerator program to an additional 1,500 cocoa farming households in 2024.
• The company will implement specific shifts in our cocoa sourcing and sustainability efforts that focus on creating longer-term relationships with farming communities to improve incomes and farming practices and invest in primary education infrastructure to help children stay in school.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, board of directors, stockholders, corporate governance, sustainability, cocoa, packaging, ESG