DEFERRED COMPENSATION Level 1 (Notes)

12 Months Ended

Jul. 31, 2020

DEFERRED COMPENSATION [Abstract]

Deferred Compensation

DEFERRED COMPENSATION

Oil-Dri's deferred compensation plans permit directors and certain management employees to defer portions of their compensation and to earn interest on the deferred amounts. Participants have deferred $266,000 and $418,000 into these plans in fiscal years 2020 and 2019, respectively. We recorded $171,000 and $204,000 of interest expense associated with these plans in fiscal years 2020 and 2019, respectively. Payments to participants were $440,000 and $1,144,000 in fiscal years 2020 and 2019, respectively, and the total liability recorded for deferred compensation was $4,017,000 and $3,560,000 as of July 31, 2020 and 2019, respectively.

The Oil-Dri Corporation of America Annual Incentive Plan provides certain executives with the opportunity to receive a deferred executive bonus award if certain financial goals are met. A total of $1,352,000 and $513,000 were awarded to certain executives for fiscal years 2020 and 2019, respectively. These awards will vest and accrue interest over a three-year period.

Our deferred compensation plans are unfunded. We fund these benefits when payments are made, and the timing and amount of the payments are determined according to the plans' provisions and, for certain plans, according to individual employee agreements.

Our SERP provides certain retired participants in the Pension Plan with the amount of benefits that would have been provided under the Pension Plan but for: (1) the limitations on benefits imposed by Section 415 of the Internal Revenue Code (“Code”), and/or (2) the limitation on compensation for purposes of calculating benefits under the Pension Plan imposed by Section 401(a)(17) of the Code. The SERP is unfunded and benefits will be funded when payments are made.

The SERP liability is actuarially determined at the end of each fiscal year using assumptions similar to those used for the Pension Plan, see Note 8 of the Notes to the Consolidated Financial Statements. The SERP liability was $1,447,000 and $2,708,000 as of July 31, 2020 and July 31, 2019, respectively. We recorded expense related to the SERP of $34,000 and $539,000 in fiscal years 2020 and 2019, respectively. On January 9, 2020, we amended the SERP to freeze participation and any excess benefit, supplemental benefit or additional benefit effective March 1, 2020. Consequently, the SERP is closed to new participants and current participants no longer earn additional benefits on or after March 1, 2020. The amendment of the SERP triggered a curtailment which required a remeasurement of the SERP's obligation. The remeasurement resulted in a decrease in the SERP liability and recognition of a curtailment gain of approximately $1,296,000, which has been recorded in SG&A. Subsequent to the curtailment, the SERP was terminated effective June 30, 2020. Any payments that would otherwise have been payable pursuant to the SERP plan on or after June 30, 2021, will instead be paid in the form of one lump sum, with such lump sum payable no earlier than June 30, 2021 and no later than June 8, 2022.