DEF: Seneca Foods Corporation Sets 2025 Annual Meeting Agenda, Details Executive Compensation and Governance

Sentiment:

Proxy Statement 7 July 2025 4:11 PM

Seneca Foods Corporation has announced its 2025 Annual Meeting of Shareholders for August 7, 2025, outlining the election of three directors, the ratification of Deloitte & Touche LLP as its independent auditor, and providing comprehensive disclosures on executive compensation and corporate governance practices.

Worse than expectedNet Income for fiscal year 2025 was $41,224,000, a significant decrease from $63,318,000 in fiscal year 2024 and $126,100,000 in fiscal year 2021.Annual Adjusted Earnings for fiscal year 2025 were $86,429,000, also a decrease from $106,117,000 in fiscal year 2024 and $127,042,000 in fiscal year 2021.The Company experienced large non-cash LIFO charges in fiscal years 2025, 2024, 2023, and 2022, indicating challenges from significant cost inflation for production inputs.

Summary

The 2025 Annual Meeting of Shareholders for Seneca Foods Corporation will be held on Thursday, August 7, 2025, at 1:00 PM, Central Daylight Time, at the Company's Offices in Janesville, WI.
Shareholders will vote on the election of three directors, Kathryn J. Boor, John P. Gaylord, and Paul L. Palmby, to serve until the 2028 Annual Meeting.
A non-binding advisory vote will be cast to ratify the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending March 31, 2026.
The Company's executive compensation philosophy aims to attract and retain highly-qualified executives, motivate business objective achievement, reward contributions, and align executive interests with long-term shareholder interests.
For fiscal year 2025, the Company's Annual Adjusted Earnings exceeded the 125% bonus target, resulting in a 20% bonus payment under the Executive Profit Sharing Bonus Plan.
Paul L. Palmby, President and CEO, received a total compensation of $1,012,423 for fiscal year 2025, including a base salary of $777,375 and non-equity incentive compensation of $155,475.
Michael S. Wolcott, Senior Vice President, Chief Financial Officer and Treasurer, received a total compensation of $427,546 for fiscal year 2025, including a base salary of $326,400 and non-equity incentive compensation of $65,280.
Timothy R. Nelson, Senior Vice President of Operations and President of Fruit and Snack, received a total compensation of $514,744 for fiscal year 2025, including a base salary of $338,025 and non-equity incentive compensation of $67,605.
Dean E. Erstad, Senior Vice President of Sales and Marketing, received a total compensation of $514,107 for fiscal year 2025, including a base salary of $333,478 and non-equity incentive compensation of $66,696.
The CEO pay ratio for fiscal year 2025 was 14:1, with the CEO's annual total compensation at $1,012,423 and the median employee's annual total compensation at $72,954.
Net Income for fiscal year 2025 was $41,224,000, a decrease from $63,318,000 in fiscal year 2024 and $126,100,000 in fiscal year 2021.
Annual Adjusted Earnings for fiscal year 2025 were $86,429,000, a decrease from $106,117,000 in fiscal year 2024 and $127,042,000 in fiscal year 2021.
The Company incurred non-cash Last-In, First-Out (LIFO) charges in fiscal years 2025, 2024, 2023, and 2022 due to significant cost inflation for production inputs.

Sentiment

Score: 4

Explanation: The document presents a routine proxy statement with detailed governance and compensation information. While it highlights strong governance practices and shareholder support for compensation, the financial performance metrics (Net Income and Adjusted Annual Earnings) show a declining trend over recent fiscal years, impacted by LIFO charges. This suggests a slightly negative financial performance context despite positive governance aspects.

Positives

Seven of the nine current directors are independent under NASDAQ listing standards, ensuring strong independent oversight.
The Board of Directors maintains a separated Chairman and CEO structure, with Kraig H. Kayser serving as non-executive Chairman and Paul L. Palmby as CEO, which is believed to be in the best interest of the Company and shareholders.
The Company's executive compensation practices received strong shareholder support, with over 99% of shares voted in support at the August 9, 2023 Annual Meeting.
The Executive Profit Sharing Bonus Plan links performance incentives for management and key employees to increases in shareholder value and promotes a culture of high performance.
The Company's Annual Adjusted Earnings for fiscal year 2025 exceeded the 125% bonus target, leading to a 20% bonus payment for eligible executives.
The Company continues to grant restricted Class A common stock awards under the 2007 Equity Incentive Plan to align management interests with shareholders through increased stock ownership.
All directors attended every meeting of the Board of Directors and all committees on which they served during fiscal year 2025, demonstrating strong engagement.

Negatives

Net Income has shown a declining trend, from $126,100,000 in fiscal year 2021 to $41,224,000 in fiscal year 2025.
Annual Adjusted Earnings have also declined, from $127,042,000 in fiscal year 2021 to $86,429,000 in fiscal year 2025.
The Company has experienced large non-cash Last-In, First-Out (LIFO) charges in fiscal years 2025, 2024, 2023, and 2022, primarily due to significant cost inflation for various production inputs.
Peter R. Call, a director, is not considered independent due to transactions with My-T Acres, Inc. exceeding the NASDAQ independence threshold, with raw vegetable purchases totaling approximately $2.8 million in fiscal year 2025.
A material weakness in the Company's internal control over financial reporting as of March 31, 2023, was previously reported, though the document does not explicitly state its resolution.

Risks

The packaged fruit and vegetable business is highly competitive, with major food chains and distributors having strong negotiating power, which can impact pricing and margins.
The Company's success is dependent on maintaining an efficient cost structure to provide favorable prices to customers and acceptable margins.
Fluctuations in the cost of production inputs, such as steel, commodities, labor, ingredients, packaging, fuel, and transportation, can lead to significant non-cash LIFO charges, impacting reported net income.
The previously reported material weakness in internal control over financial reporting as of March 31, 2023, indicates a potential risk to the accuracy and reliability of financial statements if not fully remediated.

Future Outlook

The document primarily focuses on corporate governance, executive compensation, and the upcoming annual meeting agenda. It does not provide explicit forward-looking statements or financial guidance regarding future performance or strategic initiatives beyond the current fiscal year's operational context.

Management Comments

Paul L. Palmby, President and Chief Executive Officer, urged shareholders to give immediate attention to voting, stating, 'It is important that your shares of Common and Preferred Stock be represented at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, I urge you to give your immediate attention to voting.'
The Compensation Committee believes that the Company's compensation philosophy for all employees, including named executive officers, is 'to value the contribution of our employees and share profits through broad-based incentive arrangements designed to reward performance and motivate collective achievement of strategic objectives that will contribute to our Company’s success.'
The Compensation Committee stated its intention to 'maintain flexibility to pay compensation that is not deductible when the best interests of our company make that advisable,' regarding the Section 162(m) deductibility limitation.

Industry Context

The Company operates in a highly competitive packaged fruit and vegetable business, where principal customers are major food chains and distributors with strong negotiating power. Success in this environment depends on supplying quality products with an efficient cost structure to offer favorable prices and maintain acceptable margins. The Company notes that many competitors are family-owned businesses in rural areas, where compensation rates and salary expectations are generally lower than urban levels.

Comparison to Industry Standards

The Company uses the S&P Packaged Foods & Meats Index as its peer group for comparing cumulative total shareholder return.
Executive compensation levels are generally in the upper end of executive compensation in the rural localities where the Company's executive officers live and work.
Executive compensation levels are noted to be below the compensation levels for comparable positions in most public companies with sales comparable to those of the Company.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Structure	The Board of Directors is divided into three classes, with three directors elected annually to serve three-year terms.	NA	Ensures staggered board elections and continuity of governance.
Director Independence	Seven of the nine directors are determined to be independent under NASDAQ listing standards. Peter R. Call is not independent due to transactions with My-T Acres, Inc. exceeding the independence threshold.	NA	A strong majority of independent directors enhances objective oversight of management and company affairs.
Leadership Structure	The Company maintains separate roles for Chairman of the Board (non-executive Kraig H. Kayser) and Chief Executive Officer (Paul L. Palmby).	NA	This separation allows the CEO to focus on day-to-day business execution while the Chairman provides independent oversight and leadership to the Board.
Committee Charters Review	The Audit Committee's written charter was reviewed and approved on June 12, 2025.	2025-06-12	Ensures the committee's responsibilities and oversight functions remain current and effective.
Risk Management Oversight	The Board oversees risk management through regular reports from senior management, required approvals of significant transactions, coordination by independent committees, and periodic reports from auditors and consultants.	NA	Provides a structured approach to identifying, assessing, and mitigating material risks to the Company's business operations and financial health.

Related Party Transactions

The Company purchased approximately $2.8 million in raw vegetables from My-T Acres, Inc. in fiscal year 2025, where Peter R. Call, a Director, serves as President. This transaction was negotiated at arm's length.
Charitable contributions of $0.5 million were made to the Seneca Foods Foundation in fiscal year 2025, whose trustees include current Company directors or their immediate family members.
The Company maintains a liability of $1.0 million as of March 31, 2025, for retirement arrangements to beneficiaries with family relationships to two current Directors.
Aaron Wadell, brother-in-law of Director Donald J. Stuart, was employed as Vice President of e-Business, with fiscal year 2025 compensation between $120,000 and $272,000.
Jesse Hayes and Charles Hayes, sons of Executive Officer Paul L. Palmby, were employed as Vice President of Frozen Sales and Chain Accounts and Safety and Environmental Manager, respectively, with fiscal year 2025 compensation between $120,000 and $272,000.
Patrick Nelson, son of Executive Officer Timothy R. Nelson, was employed as Director of Technical Services and Contract Manufacturing, with fiscal year 2025 compensation between $120,000 and $272,000. All employment arrangements were reviewed and approved as arm's length.

Stakeholder Impact

Shareholders: Will participate in key governance decisions, including director elections and auditor ratification, and are provided transparency on executive compensation and company performance.
Employees: Benefit from the Company's Pension Plan, 401(k) Plan (though NEOs are not eligible for company match), and the Executive Profit Sharing Bonus Plan, which links their performance to company profitability.
Customers: The Company's focus on efficient cost structure aims to provide favorable prices, benefiting major food chains and distributors.
Suppliers: Raw vegetable growers, such as My-T Acres, Inc., continue to have contracts with the Company, indicating ongoing business relationships.
Creditors: The Company's financial performance and internal controls, including the previously reported material weakness, are relevant to creditors assessing financial health and risk.
Regulatory Authorities: The filing demonstrates compliance with SEC regulations and NASDAQ listing standards regarding disclosures and corporate governance.

Next Steps

The 2025 Annual Meeting of Shareholders will be held on August 7, 2025, for voting on director elections and auditor ratification.
Shareholders wishing to submit proposals for the 2026 Annual Meeting proxy material must do so by March 9, 2026.
Shareholders intending to introduce proposals at the 2026 Annual Meeting (but not for proxy material inclusion) must provide written notice by May 23, 2026.
Shareholders soliciting proxies for director nominees under universal proxy rules must provide notice by June 8, 2026 (for the 2025 annual meeting anniversary date).

Key Dates

Date	Description
1985	Kraig H. Kayser first served as a director of the Company.
1987-02	Paul L. Palmby joined the Company.
1988-08-01	Participants employed by the Company prior to this date are eligible for the greater of two pension benefit formulas.
1989-08-01	The Company amended the Pension Plan to provide improved pension benefits under an excess formula.
1991	Keith A. Woodward began working for General Mills, Inc.
1992-03	Timothy R. Nelson joined the Company.
1992	Donald J. Stuart was a founding partner of Cannondale Associates.
1993	Kraig H. Kayser served as the Company's Chief Financial Officer.
1995	Dean E. Erstad joined the Company.
1999	Paul L. Palmby served as Vice President of Operations of the Company.
2001	Dean E. Erstad assumed the role of Senior Vice President of Sales and Marketing.
2002	Peter R. Call served as a director of Birds Eye Foods.
2003	Peter R. Call became President of Pro-Fac Cooperative, Inc.
2004-05-27	The Audit Committee's written charter was originally adopted.
2005	Paul L. Palmby served as President of the Vegetable Division of the Company.
2006	Paul L. Palmby served as Executive Vice President and Chief Operating Officer of the Company.
2006	Keith A. Woodward was the representative of General Mills appointed to serve as a board advisor to the Company's Board of Directors pursuant to the Green Giant Alliance Agreement.
2007	Peter R. Call began serving on the Board of Directors of Farm Fresh First, LLC.
2007-08-10	Shareholders approved the 2007 Equity Incentive Plan.
2008	Timothy R. Nelson held the position of Vice President of Fruit and Snack operations.
2008	Linda K. Nelson reached the position of Executive Vice President, Chief Financial Officer and Secretary at Birds Eye Foods, Inc.
2009-10	John P. Gaylord became a director of the Company.
2011	Peter R. Call became a director of the Company.
2011	Linda K. Nelson held the role of Chief Financial Officer for First American Equipment Finance.
2012	Peter R. Call began serving on the Board of Trustees of Genesee Community College.
2015	Paul L. Palmby began serving on the Board of the Department of Agriculture, Trade and Consumer Protection for Wisconsin.
2015	Peter R. Call began serving as a director of Farm Credit East.
2017	Michael S. Wolcott joined the Company.
2017-07-28	Shareholders approved the amendment and extension of the 2007 Equity Plan for an additional ten-year term.
2018-07	Keith A. Woodward became a director of the Company.
2018-12	Timothy R. Nelson became Senior Vice President of Operations.
2019-01	Kathryn J. Boor was appointed as a director of the Company.
2019	Paul L. Palmby served as a Director of Blackhawk Bancorp, Inc.
2019	Kathryn J. Boor served on the US-Israel Binational Agricultural Research and Development Fund (BARD) and the US Food and Drug Administration Science Board.
2020	Kraig H. Kayser retired from the Board.
2020	Timothy R. Nelson became President of Fruit and Snack.
2020-10	Paul L. Palmby became President and Chief Executive Officer of the Company.
2020-11	Donald J. Stuart became a director of the Company.
2020	Peter R. Call began serving on the Board of Trustees of Cornell University.
2020	Kathryn J. Boor chaired the Food Safety Innovation Lab Advisory Committee for USAID Feed the Future.
2021-01	Kathryn J. Boor began serving on the Innovation Committee and the Nomination and Governance Committee for International Flavors and Fragrance.
2021-02	Linda K. Nelson became a director of the Company.
2021-06	Paul L. Palmby became a director of the Company.
2021-11	Kraig H. Kayser was re-appointed to the Board and began serving as Chairman.
2022-04-01	The Executive Profit Sharing Bonus Plan was amended and restated.
2022-06	Kathryn J. Boor began serving on the Compensation and Nomination and Governance Committees for Sarepta Therapeutics.
2023-04-01	Michael S. Wolcott was promoted to Senior Vice President, Chief Financial Officer and Treasurer.
2023-08	Bruce E. Ware became a director of the Company.
2023-08-09	Annual Meeting of Shareholders where shareholders expressed a preference for advisory votes on executive compensation every three years and over 99% supported executive compensation.
2023-11-07	The Audit Committee approved the engagement of Deloitte & Touche LLP as the Company's independent registered public accounting firm, replacing Plante Moran, P.C.
2023-12-15	Effective date of the Directors and Officers liability insurance policy with Continental Casualty Company.
2024-02-09	Date of amended Statement on Schedule 13G filed by Dimensional Fund Advisors LP.
2024-02-13	Date of amended Statement on Schedule 13G filed by The Vanguard Group.
2024-05	Named executive officers generally received a 3.5% increase to their base salary (5.0% for Mr. Wolcott).
2024-08-07	Grant date for restricted stock awards to Timothy R. Nelson and Dean E. Erstad.
2024-08-09	Closing price of the Company's Class A Common Stock was $60.39, used for valuing stock awards vested in fiscal year 2025.
2025-01-28	Date of Schedule 13G filed by Royce & Associates LP.
2025-03-31	Fiscal year end for 2025, pension plan measurement date, and renewal date for D&O liability insurance.
2025-06-12	The Audit Committee's written charter was reviewed and approved.
2025-06-13	Record Date for shareholders entitled to notice of and to vote at the Annual Meeting.
2025-07-07	Date of the Dear Shareholder letter and Notice of Annual Meeting of Shareholders; proxy statement and enclosed proxy card mailed to shareholders.
2025-08-07	Date of the 2025 Annual Meeting of Shareholders.
2026-03-09	Deadline for shareholder proposals to be included in the Company's proxy material for the 2026 Annual Meeting.
2026-03-31	Fiscal year end for 2026, for which Deloitte & Touche LLP is appointed as independent registered public accounting firm.
2026-05-23	Deadline for shareholder proposals to be introduced at the 2026 Annual Meeting but not included in the Company's proxy material.
2026-06-08	Latest date for shareholder notice to comply with universal proxy rules for director nominations for the 2025 annual meeting (assuming no change in meeting date).

Recommendation

hold

Keywords

Seneca Foods, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Director Election, Audit Committee, Financial Performance, SEC Filing, Food Industry, Shareholder Vote, Risk Management, LIFO Charges

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