DEF: Newell Brands Seeks Approval for 2026 Incentive Plan, Directors

Newell Brands Inc. announces its 2026 Annual Meeting of Stockholders to address director elections, auditor appointment, executive compensation, and a new incentive plan, reflecting ongoing corporate governance and compensation strategy.

Summary

• The Annual Meeting of Stockholders will be held on May 7, 2026, to vote on the election of eight directors, the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for fiscal year 2026, an advisory resolution on named executive officer compensation, and the approval of the Newell Brands Inc. 2026 Incentive Plan.
• Stockholders of record as of March 12, 2026, are entitled to vote at the Annual Meeting.
• The 2026 Incentive Plan, if approved, will replace the 2022 Incentive Plan and authorize 19,250,000 shares for issuance, aiming to attract, motivate, and retain talent by aligning executive interests with stockholders through equity-based awards.
• The company's 2025 performance included increased full-year Gross Margin, improved Weighted Forecast Accuracy (WFA) by over three percentage points, achieved FUEL Productivity savings ahead of plan, and reduced Inventory by $120 million.
• Despite these operational achievements, 2025 performance was below plan targets for Adjusted Operating Cash Flow, Adjusted EPS, and Core Sales Growth.
• The Management Bonus Plan for 2025 paid out at 80% of target for most named executive officers (Messrs. Peterson, Erceg, Turner, and Ms. Platt) and 114% for Ms. Malkoski.
• Performance-Based Restricted Stock Units (PRSUs) granted in 2023 were earned at 93.8% of target, while Special Incentive Program (SIP) PRSUs granted in 2023 to Messrs. Peterson and Erceg were earned at 200% of target, with an actual value on vesting of approximately 105% of the grant date value.
• The CEO pay ratio for 2025 was 306 times the median employee compensation, with CEO compensation at $12,497,912 and median employee compensation at $40,851.
• The company conducted stockholder outreach in Fall 2025 with holders of approximately 57% of its outstanding common stock, and the 2025 Say on Pay proposal was approved by approximately 85% of votes cast.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed filing with significant underperformance in key financial metrics and TSR relative to peers, offset by some operational improvements and a commitment to strategic initiatives. The proposed incentive plan is a standard governance item, but the underlying performance is concerning.

Positives

• Increased full-year Gross Margin in 2025 despite approximately $114 million in unbudgeted tariff costs.
• Improved Weighted Forecast Accuracy (WFA) by more than three percentage points versus the prior year, contributing to higher customer global fill-rate performance.
• Achieved FUEL Productivity savings ahead of plan.
• Reduced Inventory by $120 million, which helped offset the negative impact of significant unbudgeted cash tariff costs.
• The proposed 2026 Incentive Plan incorporates best practices such as no liberal share counting, prohibition of discounted stock options and SARs, no repricing without stockholder approval, double-trigger vesting upon a change in control, and no dividends or dividend equivalents paid prior to the vesting of the underlying award.
• Strong corporate governance practices are highlighted, including annual Board, committee, and individual director evaluations, a clawback policy, stock ownership guidelines, robust stockholder outreach, and anti-hedging and anti-pledging policies.
• The CEO's 2025 target total direct compensation was 89% at risk and 54% performance-based, demonstrating alignment with stockholder interests.
• Special Incentive Program (SIP) PRSUs granted to Messrs. Peterson and Erceg in 2023 were earned at 200% of target for gross margin improvement and free cash flow productivity.

Negatives

• 2025 performance was below plan targets for Adjusted Operating Cash Flow, Adjusted EPS, and Core Sales Growth.
• The Management Bonus Plan paid out at 80% of target for Messrs. Peterson, Erceg, Turner, and Ms. Platt, indicating underperformance against internal targets.
• Performance-Based Restricted Stock Units (PRSUs) granted in 2023 were earned at 93.8% of target, falling short of the 100% target.
• The company's relative Total Shareholder Return (TSR) for the 2023-2025 performance period ranked 14th out of fifteen TSR comparators, resulting in a 10% reduction to the total Performance Factor for 2023 LTIP PRSUs.
• The CEO pay ratio for 2025 was 306 times the median employee compensation, which may draw scrutiny.
• The shares requested for the 2026 Incentive Plan are anticipated to last only 1-2 years based on historic grant rates, suggesting potential for further dilution requests in the near future.

Risks

• Challenges in the macro-economic and geo-political environment can negatively impact company performance.
• Exposure to unbudgeted tariff costs, which amounted to approximately $114 million in 2025, can affect gross margin and inventory values.
• Failure to achieve plan targets for key financial metrics such as Adjusted Operating Cash Flow, Adjusted EPS, and Core Sales Growth could impact executive compensation and investor confidence.
• Potential for dilution of stockholder equity from the issuance of new shares under equity compensation plans, including the proposed 2026 Incentive Plan.
• Risk of not attracting, motivating, and retaining talented executives and directors if compensation programs, including equity-based awards, are not competitive or the 2026 Incentive Plan is not approved.
• Increased cash compensation expense if equity-based awards are replaced with cash due to non-approval of the 2026 Incentive Plan.
• Legal and regulatory risks, including a mentioned legal proceeding in U.S. Tax Court.
• Data privacy and security risks related to electronic data processing and information systems.
• Supply chain risks and competitive pressures in the consumer goods industry.

Future Outlook

The company is encouraged by strategic actions and improvements positioning it for success in 2026, including strengthened front-end capabilities through innovation model redesign, enhanced innovation strategy, and new early-innovation capabilities. It is also executing a global productivity plan, announced in December 2025, to simplify processes, reduce overhead, and redirect resources, and has implemented 'Quantum Leap,' an AI-enabled transformation and value creation program. The shares available for issuance under the proposed 2026 Incentive Plan are anticipated to last for about 1-2 years.

Management Comments

• "2025 was a challenging year for the Company as we continued to execute our multi-year turnaround strategy amid new challenges in the macro-economic and geo-political environment."
• "Despite these challenges, we delivered the following key performance highlights in 2025: Increased full-year Gross Margin versus prior year... Improved Weighted Forecast Accuracy (WFA) by more than three percentage points... Achieved FUEL Productivity savings ahead of plan; and Reduced Inventory by $120 million..."
• "Despite these achievements, we performed below plan targets on Adjusted Operating Cash Flow, Adjusted EPS, and Core Sales Growth."
• "In evaluating the performance and pay results for 2025, the Committee concluded that the resulting level of pay and performance were reasonably well aligned in that some results were below expectations and the resulting payouts were below target."
• "As we embark on 2026, we are encouraged by the following actions and improvements that have us well positioned for success: We significantly strengthened our front-end capabilities... We have significantly increased our advertising and promotional investments... We have begun executing our global productivity plan... We have implemented Quantum Leap, our top-led program for AI-enabled transformation and value creation at scale."
• "We believe our future success depends in part on our ability to attract, motivate and retain talented executives and directors and that the ability to provide equity-based and incentive-based awards under the 2026 Plan is critical to achieving this success."
• "We recognize that equity compensation awards dilute stockholders equity, so we have carefully managed our equity incentive compensation."

Industry Context

StockSavvy.ai notes that Newell Brands operates in a challenging macro-economic and geo-political environment, which is a common theme across many consumer goods companies. The focus on innovation, productivity (FUEL initiative), and AI-enabled transformation ("Quantum Leap") aligns with broader industry trends where companies are seeking efficiency gains and competitive advantages through technology and streamlined operations. The increase in advertising and promotional investments to 6% of net sales suggests a competitive market where brand building remains crucial, a trend observed in many consumer packaged goods sectors.

Comparison to Industry Standards

• The company's relative Total Shareholder Return (TSR) for the 2023-2025 period placed it 14th out of fifteen TSR comparators, including the company, indicating significant underperformance compared to its peer group.
• For 2025, the company's TSR was 22 (relative to a $100 investment in 2020), while the Dow Jones Consumer Goods Index (Peer Group) TSR was 130, highlighting a substantial lag in shareholder returns.
• The custom comparator group for executive compensation includes companies such as Avery Dennison Corporation, Kimberly-Clark Corporation, Bath and Body Works, Inc., Mattel, Inc., Church & Dwight Co., Inc., Stanley, Black & Decker, Inc., Colgate-Palmolive Company, The Clorox Company, Conagra Brands, Inc., VF Corporation, Hanesbrands, Inc., and Whirlpool Corporation.

Management Changes

Corporate Governance

Legal Proceedings

• Expenses related to a legal proceeding in U.S. Tax Court were excluded from the Adjusted Operating Cash Flow calculation for 2025, indicating ongoing litigation.

Related Party Transactions

• No member of the Compensation and Human Capital Committee was, during 2025, an officer or employee of the Company or any of its subsidiaries, formerly an officer of the Company or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K.
• During 2025, none of the Company's executive officers served on the board or the compensation committee of any other entity having officers that served on either the Company's Board or the Compensation and Human Capital Committee.
• The company has policies and procedures in place, including a Code of Conduct and annual questionnaires, to identify and review potential conflicts of interest and related party transactions, but no specific related party transactions were disclosed as having occurred.

Stakeholder Impact

• **Shareholders**: Will directly vote on key governance matters, including director elections, auditor appointment, executive compensation, and a new equity incentive plan. The company's underperformance in key financial metrics and TSR relative to peers may concern shareholders, while the new incentive plan introduces potential dilution.
• **Employees**: The proposed 2026 Incentive Plan is designed to attract, motivate, and retain employees through equity awards, with approximately 22,000 eligible and 480 participating in the long-term incentive program. The global productivity plan may lead to operational changes impacting employees.
• **Customers**: Operational improvements like enhanced Weighted Forecast Accuracy are expected to lead to higher customer global fill-rate performance. Increased advertising and promotional investments aim to strengthen brand building and customer engagement.
• **Management**: Executive compensation payouts in 2025 reflected underperformance against targets. The new incentive plan and existing stock ownership guidelines are crucial for motivating and retaining key management personnel.
• **Regulatory Bodies**: The filing demonstrates compliance with SEC disclosure requirements, and the updated clawback policy aligns with Dodd-Frank Act regulations, reinforcing the company's commitment to regulatory adherence.

Next Steps

• Stockholders will vote on director elections, auditor appointment, executive compensation, and the 2026 Incentive Plan at the Annual Meeting on May 7, 2026.
• The company will continue executing its global productivity plan, announced in December 2025.
• The company will continue implementing its 'Quantum Leap' program for AI-enabled transformation and value creation.
• Stockholder proposals for inclusion in the 2027 proxy statement must be submitted by November 26, 2026.
• Stockholder proposals to be presented directly at the 2027 annual meeting and director nominations must be submitted by February 6, 2027.
• A Registration Statement on Form S-8 relating to the issuance of shares under the 2026 Plan will be filed with the SEC as soon as practicable after stockholder approval.

Key Dates

Recommendation

While Newell Brands is undertaking strategic initiatives like a global productivity plan and AI-enabled transformation, and showed some operational improvements (Gross Margin, WFA, Inventory reduction), the overall financial performance in 2025 was below targets for Adjusted Operating Cash Flow, Adjusted EPS, and Core Sales Growth. Critically, the company's Total Shareholder Return significantly lagged its peer group over the 2023-2025 period. The proposed 2026 Incentive Plan, while incorporating good governance features, also represents potential dilution. Given the mixed performance, ongoing turnaround strategy, and underperformance relative to peers, a "Hold" recommendation is appropriate as investors await clearer signs of sustained financial improvement and competitive shareholder returns from the announced strategic initiatives.

Keywords

Newell Brands, Proxy Statement, Executive Compensation, Incentive Plan, Corporate Governance, Stockholder Meeting, Director Election, Adjusted EPS, Free Cash Flow, Total Shareholder Return, Risk Management, NWL