ISS Recommends Conagra Shareholders Reject Executive Pay Plan

Proxy advisory firm ISS has advised shareholders of Conagra Brands to cast votes against proposed revisions to the executive compensation scheme at the U.S. packaged-food manufacturer.

The recommendation is driven by concerns over deteriorating financial results and an absence of transparent goal-setting within the pay framework.

Conagra, whose portfolio includes Hunt’s ketchup, Slim Jim meat sticks, and Swiss Miss hot cocoa, slashed its quarterly dividend by half in July and is examining non-core assets under fresh leadership from CEO John Brase after issuing a pessimistic profit forecast.

The following points summarize ISS’s assessment and related context:

According to ISS, the CEO’s compensation rose while the company’s financial performance weakened during the review period.

CEO Brase’s remuneration package consists of a $1.15 million base salary, an annual bonus target set at 150% of eligible base salary, and $7.3 million in long-term equity awards, allocated as 60% performance shares and 40% restricted stock units, as outlined in Conagra’s August 11 proxy filing.

ISS observed that short-term performance targets were established well below the prior year’s achievement levels for a second consecutive year, with no clear justification provided in the proxy statement for the reduced benchmarks.

The proxy adviser also highlighted that the number of shares underlying the CEO’s long-term incentive award grew materially due to the company’s falling stock price, a practice it warned might shield executives from the consequences of weak share performance.

Conagra did not offer an immediate response to a request for comment on Monday.

ISS acknowledged favorable elements of the pay program, including the reliance of both short- and long-term incentives largely on objective performance metrics. John Mulligan, chair of Conagra’s human resources committee, emphasized in the August 11 proxy statement that roughly 90% of Brase’s total direct compensation is linked to corporate performance and long-term shareholder value generation.

Conagra shareholders have rejected executive pay packages in previous years, and Mulligan stated on August 11 that engaging with shareholders remains a top priority.

The company’s annual general meeting is scheduled for September 23.