DEF 14A: Tootsie Roll Industries Announces Annual Meeting of Shareholders, Director Nominations and Auditor Ratification

Tootsie Roll Industries has scheduled its Annual Meeting of Shareholders for May 6, 2024, to elect directors and ratify the appointment of Grant Thornton LLP as its independent auditor.

Summary

• Tootsie Roll Industries will hold its Annual Meeting of Shareholders on May 6, 2024, in Richmond, Virginia.
• Shareholders will vote on the election of five directors and the ratification of Grant Thornton LLP as the independent registered public accounting firm for the 2024 fiscal year.
• The Board of Directors recommends voting for the named director nominees and for the ratification of Grant Thornton LLP.
• As of March 6, 2024, there were 40,011,932 shares of Common Stock and 29,431,636 shares of Class B Common Stock outstanding.
• Each share of Common Stock has one vote, and each share of Class B Common Stock has ten votes.
• The Common Stock will be entitled to a total of 40,011,932 votes and the Class B Common Stock will be entitled to a total of 294,316,360 votes.
• The Board of Directors held four meetings in 2023.
• The Audit Committee held five meetings during 2023.
• The Compensation Committee held one meeting during 2023.
• The company's 2023 net earnings were $91,912,000 and earnings per share were $1.32.
• Net product sales were $763,252,000.
• Net earnings as a percent of net product sales were 12.0%.

Sentiment

Score: 7

Explanation: The document is primarily factual and procedural, with a generally positive outlook due to the company's recent financial performance and shareholder approval of executive compensation. However, there are some potential risks and negatives mentioned, such as the lack of an audit committee financial expert and the compensation clawback policy.

Positives

• The Board of Directors is committed to a diversified membership.
• Shareholders overwhelmingly approved the compensation of the Company's named executive officers, with approximately 96.4% of the total votes cast voted in favor of the 2023 say-on-pay resolution.
• The company's 2023 net earnings were $91,912,000 and earnings per share were $1.32.
• Net product sales were $763,252,000.
• Net earnings as a percent of net product sales were 12.0%.

Negatives

• The Board of Directors has not identified any member of the Audit Committee to be qualified as an audit committee financial expert as such term is defined by rules of the SEC and the Board does not believe that given the capabilities of the members of the Audit Committee it has been necessary to have or recruit a member who would qualify as an audit committee financial expert as defined by the SEC.
• The Company has limited salaries to $999,000. Accordingly, no salary increases were approved for either the Chief Executive Officer or for the Chief Financial Officer in either 2024 or 2023.

Risks

• The document mentions a Compensation Clawback Policy, indicating a potential risk of accounting misstatements.
• The document mentions change in control agreements, indicating a potential risk of fundamental corporate changes.

Future Outlook

The Board of Directors does not know of any matters other than the foregoing that will be presented for consideration at the Annual Meeting.

Management Comments

• Mrs. Gordon has advised the Board that she has no present intention of retiring from her current positions as an officer and a director.

Industry Context

The document references peer companies in the snack, confectionary, and specialty food and beverage industries, suggesting that Tootsie Roll Industries benchmarks its performance and executive compensation against these companies.

Comparison to Industry Standards

• The document states that in late 2023, Compensation Strategies, Inc. determined that the total compensation (base salary, annual bonus and long-term incentives) for the Company's executive officers was at median for its peer group companies (as discussed below) after adjusting for market capitalization.
• The peer group consists of 20 publicly traded companies in the snack, confectionary and specialty food and beverage industries with annual revenues ranging from $340 million to $20.1 billion and market capitalizations ranging from $73 million to $37.9 billion for 2024.
• Peer companies include B&G Foods, Campbell Soup Company, Farmer Bros. Co., Flowers Foods, Inc., General Mills, Inc., Hain Celestial Group, Inc., The Hershey Company, Hostess Brands, Inc., J&J Snack Foods Corp., The J. M. Smucker Company, John B. Sanfilippo & Son, Inc., Kellanova, Lancaster Colony Corporation, McCormick & Company, Inc., Natures Sunshine Products, Inc., Post Holdings, Inc., Seneca Foods Corporation, The Simply Good Foods Company, TreeHouse Foods, Inc., Whole Earth Brands, Inc.

Stakeholder Impact

• Shareholders are asked to vote on key governance matters.
• Executive officers' compensation is discussed, impacting their financial well-being.
• The company's financial performance affects shareholder value and employee job security.

Next Steps

• Shareholders should review the proxy materials and vote on the director elections and auditor ratification.
• The company will hold its Annual Meeting of Shareholders on May 6, 2024.
• Shareholders wishing to submit proposals for the 2025 Annual Meeting must do so by November 29, 2024.

Key Dates

Keywords

shareholders, directors, compensation, governance, proxy, audit, Tootsie Roll