DEF: Hershey Sets 2026 Annual Meeting, Details Governance & Pay

The Hershey Company announces its 2026 Annual Meeting of Stockholders, outlining key proposals, director nominees, executive compensation, and corporate governance updates.

Summary

• The 2026 Annual Meeting of Stockholders will be held virtually on Tuesday, May 5, 2026, at 10:00 a.m., Eastern Daylight Time, with March 6, 2026, as the record date for voting.
• Key proposals include the election of 11 director nominees, ratification of Ernst & Young LLP as independent auditors for fiscal year 2026, and an advisory vote on named executive officer compensation.
• The company's vision is to Lead Next Generation Snacking, focusing on accelerating U.S. Candy, Mint and Gum leadership, becoming #2 in Salty Snacks in North America, achieving scale in high-growth international markets, and building a differentiated U.S. Functional Snacking Business.
• For 2025, the company reported 4.4% net sales growth and a (32.7%) adjusted earnings per share-diluted growth.
• Kirk Tanner was appointed President and CEO, effective August 18, 2025, succeeding Michele Buck, who transitioned to Special Advisor until June 30, 2026, and then to an independent contractor role until December 31, 2026.
• Executive compensation is strongly linked to performance, with 90% of the CEO's and 78% of other named executive officers' (NEOs) target total direct compensation being at-risk in 2025.
• The 2025 One Hershey Incentive Program (OHIP) resulted in a 165.19% payout of target, driven by above-target net sales and adjusted EPS, and maximum EBIT margin % performance, despite a negative market share modifier.
• The 2023-2025 Performance Stock Unit (PSU) cycle vested at 70.27% of target, reflecting strong Total Shareholder Return (77th percentile) but below-threshold performance in three-year CAGR in adjusted EPS and three-year cumulative free cash flow.
• The Board comprises 11 directors, with 36% women and 36% ethnically and racially diverse members, and has implemented a majority voting standard for uncontested director elections.
• Hershey Trust Company remains the controlling stockholder, holding 2,066,119 shares of common stock and 54,612,012 shares of Class B common stock, representing 79.0% of total voting power.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive filing, highlighting strong operational execution in 2025 by exceeding financial expectations despite significant cocoa cost inflation. The robust governance framework and strategic clarity under new leadership are favorable, though the below-target performance on some long-term incentive metrics and the previous say-on-pay concerns warrant continued monitoring.

Positives

• Exceeded 2025 net sales and adjusted earnings per share expectations, demonstrating strong operational execution despite challenging market conditions.
• Executive compensation program exhibits strong pay-for-performance alignment, with a significant portion of NEO compensation tied to company performance (90% for CEO, 78% for other NEOs).
• The 2025 annual incentive program (OHIP) achieved a 165.19% payout of target, reflecting robust performance in net sales, adjusted EPS, and EBIT margin %.
• The Board's composition is diverse, with 36% women and 36% ethnically and racially diverse directors, and possesses a strong mix of relevant skills and experiences.
• Strong corporate governance practices are in place, including five independent Board committees, an independent Chairman, regular executive sessions, and annual evaluations.
• The company maintains robust clawback and anti-hedging policies, along with significant stock ownership requirements for executives, aligning interests with stockholders.
• No material Information Security breach or related expenses have been experienced over the last three years, indicating effective cybersecurity measures.
• A refreshed sustainability strategy is in place, grounded in material risks and opportunities, focusing on ingredient sourcing, operations, and portfolio.
• Significant progress in sustainability goals, including expanding the Income Accelerator program in Côte d'Ivoire to over 5,000 farmers and supporting 334 Village Savings and Loan Associations (over 68% women participants).
• Funded the construction of 17 primary schools in cocoa-producing communities, demonstrating commitment to social responsibility.
• Strengthened responsible sourcing and human rights due diligence through new supplier e-training and co-funding resources for Responsible Recruitment and Child Labor Remediation.
• Continued efforts to reduce emissions, operate efficiently, and reduce waste, including 17.8 million lbs. of packaging eliminated to date and 96.8% of U.S. and Canada network miles hauled by SmartWay registered carriers.

Negatives

• Adjusted earnings per share-diluted growth for 2025 was (32.7%), representing a significant decline from the prior year, primarily attributed to cocoa cost inflation.
• The 2023-2025 PSU cycle's performance was below threshold for three-year CAGR in adjusted earnings per share-diluted and three-year cumulative free cash flow, resulting in a 70.27% payout of target.
• The market share modifier for the 2025 OHIP had a negative (6%) impact due to not meeting market share performance targets in the U.S. Candy, Mint and Gum (CMG) category.
• Stockholder support for the 2025 say-on-pay resolution declined to 72%, primarily due to concerns regarding the amended employment agreement with the former CEO.
• The company's revenue and market capitalization were at the 41st and 68th percentiles, respectively, compared to its 2025 Peer Group, indicating it is not a top-tier performer in all size metrics relative to peers.

Risks

• Disruptions or inefficiencies in the supply chain due to the loss or disruption of essential manufacturing or supply elements or other factors.
• Issues or concerns related to the quality and safety of products, ingredients or packaging, human and workplace rights, and other environmental, social or governance matters.
• Risks associated with climate change and other environmental impacts, and increased focus and evolving views of stockholders and other stakeholders.
• Changes in raw material and other costs, along with the availability of adequate supplies of raw materials, such as cocoa.
• Inability to successfully execute business continuity plans to address changes in consumer preferences and the broader economic and operating environment.
• Selling price increases, including volume declines associated with pricing elasticity.
• Market demand for new and existing products.
• Increased marketplace competition.
• Failure to successfully execute and integrate acquisitions, divestitures and joint ventures.
• Changes in governmental laws and regulations, including taxes.
• Political, economic, and/or financial market conditions, including with respect to inflation, changing interest rates, slower growth or recession, and other events beyond control such as the impacts on business arising from the ongoing conflict between Russia and Ukraine and in Iran.
• Risks and uncertainties related to international operations.
• Disruptions, failures or security breaches of information technology infrastructure and that of customers and partners (including suppliers).
• Inability to hire, engage and retain a talented global workforce.
• Inability to realize expected cost savings and operating efficiencies associated with strategic initiatives or restructuring programs.
• Complications with the design or implementation of a new enterprise resource planning system.
• Risks associated with the development and deployment of A.I. systems, including data privacy, cybersecurity, operational resilience, and the ethical and responsible use of A.I.

Future Outlook

The company remains committed to managing cocoa cost inflation through multiple levers over time, anticipating continued progress as efforts converge with recent improvements in commodity markets. Michele Buck will serve as a Special Advisor until June 30, 2026, and then as an independent contractor providing strategic consulting services until December 31, 2026. The 2025 Responsible Business Report is expected to be published in June 2026, detailing progress on sustainability initiatives. The 2025-2027 PSU awards will utilize three annual performance goals for adjusted EPS growth and free cash flow as a percentage of net sales, with targets set annually to adapt to evolving business conditions and maintain rigor. Ordinary course related-party transactions are not expected to change materially in 2026.

Management Comments

• Our vision is to Lead Next Generation Snacking.
• We remain committed to our approach to managing cost inflation through multiple levers over time, and while there is more work to be done, we are pleased with our progress to date as our efforts converge with recent improvement in the commodity markets.
• Kirk Tanner is a proven, high-impact leader in the food and beverage industry with a strong combination of customer and consumer passion, commercial acumen and operational scale.
• Kirk Tanner has a track record of driving growth in complex global businesses and brings a focused, results-driven mindset.
• Kirk Tanner's deep experience in snacks, beverages, M&A and innovation – combined with public company CEO and board roles – makes him well suited to lead Hershey into the future.
• Kirk Tanner is a strong leader, earning followership at every level and is committed to engaging with employees, the community and stockholders to advance Hershey's ambition to lead next generation snacking and to deliver long-term, sustainable growth.

Industry Context

StockSavvy.ai notes that Hershey's strategic imperatives to 'Lead Next Generation Snacking' by accelerating U.S. Candy, Mint and Gum leadership, becoming #2 in Salty Snacks in North America, achieving scale in high-growth international markets, and building a differentiated U.S. Functional Snacking Business reflect a broader industry trend among established food and beverage companies to diversify beyond traditional core categories into faster-growing, health-conscious, and global snacking segments. The appointment of Kirk Tanner, with his extensive experience in snacks, beverages, and M&A from PepsiCo and Wendy's, underscores the company's commitment to this strategic pivot in a highly competitive and evolving consumer landscape. The focus on managing cocoa cost inflation also highlights a common challenge faced by confectionary companies globally.

Comparison to Industry Standards

• The company targets total direct compensation for its executive officers, in aggregate, at competitive pay levels using the median of its Peer Group.
• Hershey's revenue and market capitalization were at the 41st and 68th percentiles, respectively, compared to its 2025 Peer Group, which includes Church & Dwight Co., Inc., Keurig Dr Pepper, Inc., The Campbells Company, Colgate-Palmolive Company, Kimberly-Clark Corporation, The Clorox Company, ConAgra Brands, Inc., Lamb Weston Holdings, Inc., The Kraft Heinz Company, General Mills, Inc., McCormick & Company, Inc., The J.M. Smucker Company, Hormel Foods Corporation, and Mondelez International, Inc.
• The 2023-2025 PSU cycle's 77th percentile Total Shareholder Return (TSR) performance against the 2023 Financial Peer Group (Colgate-Palmolive Company, McCormick & Company, Inc., The Hain Celestial Group, Inc., ConAgra Brands, Inc., Mondelez International, Inc., The J.M. Smucker Company, Flowers Foods, Post Holdings, Inc., The Kraft Heinz Company, General Mills, The Campbells Company, TreeHouse Foods, Inc., Kimberly-Clark Corporation, The Clorox Company) is a strong result, outperforming the 50th percentile target.
• The shift to three annual performance goals for adjusted EPS growth and free cash flow % of net sales in the 2025-2027 PSU cycle is noted as 'consistent with peer practice in volatile periods,' suggesting alignment with broader industry compensation strategies during uncertain economic conditions.

Management Changes

Corporate Governance

Related Party Transactions

• A one-time, non-recurring donation of $2,000,000 was made to The M.S. Hershey Foundation to support renovations to the Hershey Theatre, approved on February 18, 2025.
• The company sold certain real properties to Hershey Entertainment & Resorts Company for an aggregate purchase price of $3,055,000, effective May 15, 2025.
• CEO Kirk Tanner entered into a Lease Agreement to rent an apartment owned by Milton Hershey School for $3,000 per month, starting November 4, 2025.
• Total sales to Hershey Trust Company, Milton Hershey School, and affiliated companies (primarily Hershey Entertainment & Resorts Company) in 2025 were approximately $1.5 million.
• Total purchases from Hershey Trust Company, Milton Hershey School, and affiliated companies (primarily Hershey Entertainment & Resorts Company) in 2025 were approximately $1.7 million.

Stakeholder Impact

• Shareholders are impacted by executive compensation decisions, board elections, auditor ratification, and overall company performance (net sales growth, adjusted EPS decline, TSR performance). The controlling stockholder (Hershey Trust Company) holds significant voting power.
• Employees are affected by the CEO transition, executive compensation policies, human capital management practices, and sustainability initiatives, including human rights in the supply chain.
• Customers and consumers are impacted by product quality and safety, the evolving product portfolio to meet changing preferences (e.g., 'next generation snacking,' 'functional snacking'), and sustainability efforts like responsible sourcing.
• Suppliers are affected by the company's responsible sourcing and commodities practices, human rights due diligence, and supply chain resilience initiatives.
• Local communities benefit from the $2,000,000 donation to The M.S. Hershey Foundation and sustainability efforts in cocoa-producing regions, such as the Income Accelerator program and school construction.

Next Steps

• Stockholders are to elect 11 director nominees at the 2026 Annual Meeting.
• Stockholders are to ratify the appointment of Ernst & Young LLP as independent auditors for fiscal year 2026.
• Stockholders are to conduct an advisory vote on the compensation of named executive officers.
• Michele Buck will serve as Special Advisor until June 30, 2026, and then as an independent contractor from July 1, 2026, through December 31, 2026.
• The 2025 Responsible Business Report is expected to be published in June 2026.
• The Board will implement changes to non-employee director compensation for 2026, including increasing the annual Restricted Stock Unit award to $180,000 and the Board Chair retainer to $175,000.
• New director nominee Guy Persaud is standing for election at the 2026 Annual Meeting.
• Directors are expected to satisfy stock ownership guidelines by various deadlines, with Ms. Kraus by January 1, 2029, Messrs. Ozan and Robbin-Coker by January 1, 2030, and Mmes. Mahlan and Quintero-Johnson and Messrs. Brandt, Curoe, Nalebuff and Singleton by January 1, 2031.
• The company will continue to manage cost inflation through multiple levers and advance its refreshed sustainability strategy.

Key Dates

Recommendation

The company demonstrated strong operational execution in 2025 by exceeding its own financial expectations for net sales and adjusted EPS, despite significant cocoa cost inflation. The appointment of a new CEO with extensive industry experience and a clear strategic vision for 'Next Generation Snacking' provides a positive long-term outlook. However, the substantial decline in adjusted EPS for 2025 and below-threshold performance on some long-term incentive metrics (CAGR in adjusted EPS and cumulative free cash flow) indicate ongoing challenges. The strong TSR performance is a positive, but the mixed financial results and the controlling stockholder structure suggest a 'hold' recommendation, awaiting further evidence of sustained improvement in profitability metrics and successful execution of the new CEO's strategy.

Keywords

Hershey Company, Proxy Statement, Corporate Governance, Executive Compensation, SEC Filing, Annual Meeting, Director Election, Auditor Ratification, Say-on-Pay, Snacking Industry, Consumer Packaged Goods, Sustainability, Risk Management, CEO Transition, Financial Performance, Net Sales, Adjusted EPS, Total Shareholder Return, Hershey Trust Company, Class B Common Stock