ISS advises Conagra shareholders to reject proposed executive pay programme

Conagra Brands‘ shareholders to vote against proposed changes to the U.S. packaged food maker’s executive compensation programme.

ISS cited concerns ​about declining financial performance and a lack of clarity around targets.

Conagra, owner of brands including Hunt’s ketchup, Slim Jim meat sticks and Swiss Miss hot cocoa, halved its ‌annual dividend in ⁠July ⁠and is reviewing its non-core assets under new CEO John Brase after issuing a ​weak profit outlook.

Here are some details:

* ISS said that CEO pay increased as ​financial performance declined for the year in review.

* CEO Brase’s compensation package includes a $1.15 million base salary, an annual incentive target opportunity equal to 150% ​of his eligible base salary, and $7.3 million ⁠in annual long-term ‌incentives, consisting of 60% performance shares and 40% restricted ​stock units (RSUs), ​Conagra said in a proxy statement on August 11.

* ⁠ISS said short-term target goals were set well ​below the previous year’s achievement levels for the second year ​running, “with no clear rationale disclosed in the proxy for the target setting”.

* ISS noted that the underlying number of shares for the CEO’s long-term incentive award increased substantially, as a result of the company’s negative stock price trajectory, a practice it said could insulate executives from ‌poor stock price performance.

* Conagra did not immediately respond to a request for comment on Monday.

* ISS noted positive aspects ​of the ​pay programme, including short ⁠and long-term incentives being based mainly on objective goals. John Mulligan, chair of Conagra’s human resources committee, highlighted in Conagra’s proxy statement on August 11 that ​around 90% of Brase’s total direct compensation is tied to company performance and long-term shareholder value creation.

* Conagra shareholders have rejected executive pay packages in recent years and Mulligan said on August 11 that shareholder engagement was a priority.

* Conagra’s AGM is scheduled for September 23.

(Reporting by Alexander Marrow; Editing by Susan Fenton)