0000950170-23-047774.txt : 20230912 0000950170-23-047774.hdr.sgml : 20230912 20230912165919 ACCESSION NUMBER: 0000950170-23-047774 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 24 CONFORMED PERIOD OF REPORT: 20230912 FILED AS OF DATE: 20230912 DATE AS OF CHANGE: 20230912 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SANFILIPPO JOHN B & SON INC CENTRAL INDEX KEY: 0000880117 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 362419677 STATE OF INCORPORATION: DE FISCAL YEAR END: 0628 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-19681 FILM NUMBER: 231250804 BUSINESS ADDRESS: STREET 1: 1703 N. RANDALL ROAD CITY: ELGIN STATE: IL ZIP: 60123-7820 BUSINESS PHONE: 847-289-1800 MAIL ADDRESS: STREET 1: 1703 N. RANDALL ROAD CITY: ELGIN STATE: IL ZIP: 60123-7820 DEF 14A 1 jbss-20230912.htm DEF 14A DEF 14A
false0000880117DEF 14ASANFILIPPO JOHN B & SON INC0000880117jbss:AdjustmentsForDefinedBenefitPensionPlansServiceCostForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2021-06-252022-06-300000880117jbss:AdjustmentsForStockAwardsDividendsOrOtherEarningsPaidOnAwardInTheCoveredFiscalYearPriorToVestingIfNotOtherwiseIncludedInTheSctTotalForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2020-06-262021-06-24000088011712022-07-012023-06-290000880117jbss:AdjustmentsForDefinedBenefitPensionPlansPriorServiceCostForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2020-06-262021-06-240000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2020-06-262021-06-240000880117jbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearForWhichVestingConditionsWereSatisfiedDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansPriorServiceCostForTheCoveredFiscalYearMember2020-06-262021-06-240000880117jbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatFailedToMeetTheApplicableVestingConditionsDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2020-06-262021-06-240000880117jbss:AdjustmentsForDefinedBenefitPensionPlansServiceCostForTheCoveredFiscalYearMemberecd:PeoMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansAggregateChangeInActuarialPresentValueIncludedInSctTotalForTheCoveredFiscalYearMember2021-06-252022-06-300000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsFairValueAtYearEndOfAwardsGrantedDuringTheCoveredFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2020-06-262021-06-240000880117jbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatFailedToMeetTheApplicableVestingConditionsDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2021-06-252022-06-300000880117ecd:PeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansPriorServiceCostForTheCoveredFiscalYearMember2021-06-252022-06-300000880117jbss:AdjustmentsForStockAwardsVestingDateFairValueOfAwardGrantedAndVestedDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2021-06-252022-06-300000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsDividendsOrOtherEarningsPaidOnAwardInTheCoveredFiscalYearPriorToVestingIfNotOtherwiseIncludedInTheSctTotalForTheCoveredFiscalYearMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearForWhichVestingConditionsWereSatisfiedDuringTheCoveredFiscalYearMember2021-06-252022-06-300000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsVestingDateFairValueOfAwardGrantedAndVestedDuringTheCoveredFiscalYearMember2022-07-012023-06-290000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansAggregateChangeInActuarialPresentValueIncludedInSctTotalForTheCoveredFiscalYearMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsDividendsOrOtherEarningsPaidOnAwardInTheCoveredFiscalYearPriorToVestingIfNotOtherwiseIncludedInTheSctTotalForTheCoveredFiscalYearMember2021-06-252022-06-300000880117jbss:AdjustmentsForStockAwardsAggregateValueForStockAwardsIncludedInSctTotalForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2020-06-262021-06-240000880117jbss:AdjustmentsForStockAwardsVestingDateFairValueOfAwardGrantedAndVestedDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2022-07-012023-06-290000880117jbss:AdjustmentsForDefinedBenefitPensionPlansServiceCostForTheCoveredFiscalYearMemberecd:PeoMember2021-06-252022-06-300000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForStockAwardsDividendsOrOtherEarningsPaidOnAwardInTheCoveredFiscalYearPriorToVestingIfNotOtherwiseIncludedInTheSctTotalForTheCoveredFiscalYearMember2021-06-252022-06-300000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansAggregateChangeInActuarialPresentValueIncludedInSctTotalForTheCoveredFiscalYearMember2022-07-012023-06-290000880117jbss:AdjustmentsForDefinedBenefitPensionPlansServiceCostForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatFailedToMeetTheApplicableVestingConditionsDuringTheCoveredFiscalYearMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatFailedToMeetTheApplicableVestingConditionsDuringTheCoveredFiscalYearMember2020-06-262021-06-240000880117jbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearForWhichVestingConditionsWereSatisfiedDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearForWhichVestingConditionsWereSatisfiedDuringTheCoveredFiscalYearMember2020-06-262021-06-240000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForStockAwardsDividendsOrOtherEarningsPaidOnAwardInTheCoveredFiscalYearPriorToVestingIfNotOtherwiseIncludedInTheSctTotalForTheCoveredFiscalYearMember2022-07-012023-06-290000880117jbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearForWhichVestingConditionsWereSatisfiedDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2021-06-252022-06-300000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsVestingDateFairValueOfAwardGrantedAndVestedDuringTheCoveredFiscalYearMember2021-06-252022-06-300000880117jbss:AdjustmentsForStockAwardsFairValueAtYearEndOfAwardsGrantedDuringTheCoveredFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMemberecd:NonPeoNeoMember2021-06-252022-06-3000008801172022-07-012023-06-290000880117jbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatFailedToMeetTheApplicableVestingConditionsDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2022-07-012023-06-290000880117jbss:AdjustmentsForDefinedBenefitPensionPlansPriorServiceCostForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2022-07-012023-06-290000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansAggregateChangeInActuarialPresentValueIncludedInSctTotalForTheCoveredFiscalYearMember2021-06-252022-06-300000880117jbss:AdjustmentsForDefinedBenefitPensionPlansPriorServiceCostForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2021-06-252022-06-3000008801172020-06-262021-06-240000880117jbss:AdjustmentsForStockAwardsAggregateValueForStockAwardsIncludedInSctTotalForTheCoveredFiscalYearMemberecd:PeoMember2021-06-252022-06-300000880117jbss:AdjustmentsForStockAwardsVestingDateFairValueOfAwardGrantedAndVestedDuringTheCoveredFiscalYearMemberecd:NonPeoNeoMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsDividendsOrOtherEarningsPaidOnAwardInTheCoveredFiscalYearPriorToVestingIfNotOtherwiseIncludedInTheSctTotalForTheCoveredFiscalYearMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsFairValueAtYearEndOfAwardsGrantedDuringTheCoveredFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2021-06-252022-06-300000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2022-07-012023-06-290000880117jbss:AdjustmentsForDefinedBenefitPensionPlansServiceCostForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2020-06-262021-06-240000880117ecd:NonPeoNeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2021-06-252022-06-300000880117ecd:PeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansAggregateChangeInActuarialPresentValueIncludedInSctTotalForTheCoveredFiscalYearMember2022-07-012023-06-2900008801172021-06-252022-06-300000880117jbss:AdjustmentsForStockAwardsFairValueAtYearEndOfAwardsGrantedDuringTheCoveredFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMemberecd:NonPeoNeoMember2022-07-012023-06-290000880117jbss:AdjustmentsForStockAwardsAggregateValueForStockAwardsIncludedInSctTotalForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatFailedToMeetTheApplicableVestingConditionsDuringTheCoveredFiscalYearMember2021-06-252022-06-300000880117jbss:AdjustmentsForStockAwardsFairValueAtYearEndOfAwardsGrantedDuringTheCoveredFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMemberecd:NonPeoNeoMember2020-06-262021-06-240000880117jbss:AdjustmentsForStockAwardsAggregateValueForStockAwardsIncludedInSctTotalForTheCoveredFiscalYearMemberecd:PeoMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsFairValueAtYearEndOfAwardsGrantedDuringTheCoveredFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansPriorServiceCostForTheCoveredFiscalYearMember2022-07-012023-06-290000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearThatWereOutstandingAndUnvestedAtTheCoveredFiscalYearEndMember2021-06-252022-06-300000880117ecd:PeoMemberjbss:AdjustmentsForDefinedBenefitPensionPlansAggregateChangeInActuarialPresentValueIncludedInSctTotalForTheCoveredFiscalYearMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsGrantedInAnyPriorFiscalYearForWhichVestingConditionsWereSatisfiedDuringTheCoveredFiscalYearMember2022-07-012023-06-290000880117jbss:AdjustmentsForStockAwardsAggregateValueForStockAwardsIncludedInSctTotalForTheCoveredFiscalYearMemberecd:PeoMember2020-06-262021-06-240000880117ecd:PeoMemberjbss:AdjustmentsForStockAwardsVestingDateFairValueOfAwardGrantedAndVestedDuringTheCoveredFiscalYearMember2020-06-262021-06-240000880117jbss:AdjustmentsForDefinedBenefitPensionPlansServiceCostForTheCoveredFiscalYearMemberecd:PeoMember2022-07-012023-06-290000880117jbss:AdjustmentsForStockAwardsAggregateValueForStockAwardsIncludedInSctTotalForTheCoveredFiscalYearMemberecd:NonPeoNeoMember2021-06-252022-06-30iso4217:USD
Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material pursuant to § 240.14a-12

JOHN B. SANFILIPPO & SON, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 


Table of Contents

 

img23145470_0.jpg 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

to be held

on November 2, 2023

TO THE STOCKHOLDERS:

The Annual Meeting of stockholders of John B. Sanfilippo & Son, Inc. will be held on Thursday, November 2, 2023, at 11:30 A.M., Central Time. We have decided to hold this year’s Annual Meeting via a live audio-only webcast.

Instructions on how to participate in the Annual Meeting are posted at http://www.proxydocs.com/JBSS. Prior registration to attend the Annual Meeting at http://www.proxydocs.com/JBSS is required, which must be completed by 5:00 P.M., Eastern Time, on October 31, 2023. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the Annual Meeting and will also permit you to submit questions as described herein.

The Annual Meeting will be held for the following purposes:

1.
Election of directors;
2.
Ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the 2024 fiscal year;
3.
Conduct an advisory vote to approve executive compensation;
4.
Conduct an advisory vote on the frequency of the advisory votes on executive compensation;
5.
Approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan; and
6.
Transact such other business as may properly be brought before the Annual Meeting or any adjournment or postponement thereof.

The Annual Meeting may be postponed or adjourned from time to time without any notice other than announcement at the meeting, and any and all business for which notice is hereby given may be transacted at any such postponed or adjourned meeting.

The Board of Directors has fixed the close of business on September 5, 2023, as the record date for determination of stockholders entitled to notice of and to vote at the Annual Meeting.

A Notice of Internet Availability of Proxy Materials (the “Internet Notice”) will be mailed to stockholders of record who were not mailed the printed proxy materials. The Internet Notice provides details regarding the availability of our full proxy materials, including this Proxy Statement and Annual Report, at the website address http://www.proxydocs.com/JBSS. All stockholders of record were either mailed the Internet Notice or mailed the printed proxy materials which include a proxy card. Stockholders who are beneficial owners of our stock held in street name (e.g., holding shares of our stock through a broker, bank or other holder of record) should follow the applicable instructions provided by their broker, bank or other holder of record to vote their shares. If a stockholder wishes to vote electronically or by telephone, the stockholder should follow the instructions on how to vote electronically or by telephone that are included on the stockholder’s proxy card, Internet Notice or voting instruction card.

 

 By Order of the Board of Directors

img23145470_1.jpg 

GINA M. LAKATOS

Secretary

Elgin, Illinois

September 18, 2023

 

 


Table of Contents

 

John B. Sanfilippo & Son, Inc. Proxy Summary

Proposal 1: Election of Directors

COMMON STOCK DIRECTORS

 

Name

Tenure

Key Skills

Pamela Forbes Lieberman

3 years

Manufacturing, distribution and retail experience, including in the food industry
Strategy, M&A and executive management, including CEO background
Family-controlled companies and public companies board experience, including roles as Board Chair, and Chair roles of Audit Committees and a Strategy Committee
Background in finance, audit and accounting

Mercedes Romero

2 years

Food and beverage, CPG and retail experience
Supply chain and procurement background
Sales, manufacturing and distribution oversight experience
Sustainability experience
Latino Corporate Directors Association Board Ready Institute, Certified

Ellen C. Taaffe

12 years

Consumer packaged goods experience
Brand management, strategy and sales experience
Public company board experience
NACD Certified Board Director and Board Leadership Fellow

 

Recent Common Stock Director Refreshment: Ms. Forbes Lieberman was elected to the Board in 2020, Ms. Romero was elected to the Board in 2021. Both are independent directors.

Gender and Diversity: Common Stock Director nominees are all female. One Common Stock Director identifies as diverse.

CLASS A DIRECTORS

Recent Class A Director Refreshment: Ms. Lisa A. Sanfilippo and Mr. James A. Valentine joined the Board in 2021.

Gender and Diversity: Together with the Common Stock Directors, 40% of our Board is female and one of our directors identifies as a member of an underrepresented group.

See page 6 for further information about such nominees and director election matters.

Proposal 2: Ratification of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the 2024 fiscal year

See page 21 for proposal 2.

Proposal 3: Advisory vote to approve named executive officer compensation

 

 

 


Table of Contents

 

Compensation Program Highlights

 

Compensation oriented around 50th percentile of peer group
Approximately 99% of votes supported prior Say on Pay vote
Annual bonus program focused on return on capital/economic valued added model
Responsible use of equity awards with 3-year cliff vesting to promote retention
Annual bonus capped at 2x of target
No employment agreements
Annual bonus program has claw back features
Significant management team ownership of stock promotes alignment with stockholders

 

See page 23 for proposal 3.

 

Proposal 4: Advisory vote on the frequency of the advisory votes on executive compensation

 

The Board of Directors has recommended an annual frequency vote for the advisory votes on executive compensation.

 

See page 24 for proposal 4.

 

Proposal 5: Approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan.

John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan Highlights

The Board of Directors has approved, and has recommended that our stockholders approve, the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan. The John B. Sanfilippo & Son, Inc. 2014 Omnibus Plan is scheduled to expire on October 29, 2024 and without stockholder approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan, we will be unable to grant equity to our employees and directors. The John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan is attached as Annex A to this proxy statement.

See page 25 for proposal 5.

Corporate Governance Highlights

 

Annual director elections

Holders of Common Stock have the right to elect a specified portion of directors

Audit, Governance and Compensation and Human Resources Committees are comprised entirely of independent directors

Regular executive sessions of independent directors

Lead Independent Director role created to promote interests of holders of Common Stock

Regular focus on environmental, social and governance initiatives and diversity and inclusion matters

Audit Committee oversight of anti-pledging policy

Quarterly cybersecurity and information security review by Audit Committee

Robust director and management succession planning

High level of independent director involvement

Average Common Stock Director tenure of 5.6 years

 

Key Governance Initiatives in Fiscal 2023 and 2024

 

Adopted Corporate Governance Guidelines containing robust governance policies and practices, including creation of role of Lead Independent Director

Elected Ms. Ellen C. Taaffe as Lead Independent Director

Audit Committee, composed entirely of independent directors, continued its oversight of pledging and no new pledges were entered into during the 2023 and 2024 fiscal years

Continued our enhanced shareholder outreach program and adopted new governance disclosures in response to stockholder outreach

Rotated Nominating and Governance Committee Chair to support director leadership refreshment

Implemented new Board and committee evaluation and director feedback process to improve Board and committee effectiveness

 

 


Table of Contents

 

Table of Contents

 

Annual Meeting of Stockholders

1

Proposal 1: Election of Directors

5

Nominees for Election by the Holders of Common Stock

6

Nominees for Election by the Holders of Class A Stock

9

Corporate Governance

12

Proposal 2: Ratify the Audit Committee’s Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the 2024 Fiscal Year

21

Audit Committee Report

22

Proposal 3: Advisory Vote to Approve Executive Compensation

23

Proposal 4: Advisory Vote on Frequency of the Advisory Votes on Executive Compensation

24

Proposal 5: Approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan

25

Compensation of Directors and Executive Officers

31

Compensation of Directors

31

Compensation Discussion and Analysis

33

Compensation of Executive Officers

42

Compensation and Human Resources Committee Report

50

Pay versus Performance

51

Security Ownership of Certain Beneficial Owners and Management

54

Review of Related Party Transactions

58

Delinquent Section 16(a) Reports

59

Other Annual Meeting Matters

60

 

 


Table of Contents

 

John B. Sanfilippo & Son, Inc.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

November 2, 2023

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of John B. Sanfilippo & Son, Inc. (the “Board of Directors” or “Board”), a Delaware corporation, of proxies for use at the annual meeting of our stockholders to be held on Thursday, November 2, 2023, at 11:30 A.M., Central Time, and at any postponement or adjournment thereof (the “Annual Meeting”). This year’s Annual Meeting will be held via a live audio-only webcast. There is no physical location for the Annual Meeting. Stockholders will be able to join the meeting via a website where they can listen to the speakers, hear responses to any questions submitted by stockholders and answered by company management and vote their shares electronically. Instructions on how to participate in the Annual Meeting are posted at http://www.proxydocs.com/JBSS. Prior registration to attend the Annual Meeting at http://www.proxydocs.com/JBSS is required by 5:00 P.M., Eastern Time, on October 31, 2023.

All shares of our Common Stock, $.01 par value (the “Common Stock”), and our Class A Common Stock, $.01 par value (the “Class A Stock”), entitled to vote at the Annual Meeting which are represented by properly submitted proxies will, unless such proxies have been revoked, be voted in accordance with the instructions given in such proxies. Any stockholder who has submitted a proxy may revoke it by: (a) delivering a written notice of revocation to our Secretary prior to the exercise of the proxy at the Annual Meeting; (b) duly submitting a subsequent properly executed proxy (by Internet, telephone or mail) so that it is received by 5:00 P.M., Eastern Time, on November 1, 2023 or (c) attending the Annual Meeting and voting electronically. Any written notice of revocation should be received by our Secretary at 1703 N. Randall Road, Elgin, Illinois 60123-7820, Attention: Secretary before the closing of the polls at the Annual Meeting.

Unless the context otherwise requires, references herein to “we”, “us”, “our”, “the company” or “our company” refer to John B. Sanfilippo & Son, Inc. The mailing address of our principal executive offices is 1703 N. Randall Road, Elgin, Illinois 60123-7820.

A Notice of Internet Availability of Proxy Materials (the “Internet Notice”) will be mailed to stockholders of record who were not mailed the printed proxy materials. The Internet Notice provides details regarding the availability of our full proxy materials, including this Proxy Statement and our annual report to stockholders for the 2023 fiscal year, at the Internet website address http://www.proxydocs.com/JBSS. All stockholders of record holding shares of Common Stock at the close of business on our record date of September 5, 2023 were either mailed the Internet Notice or mailed the printed proxy materials which include a proxy card. If a stockholder wishes to vote electronically or by telephone, the stockholder should follow the instructions on how to vote electronically or by telephone that are included on the stockholder’s proxy card or Internet Notice.

Stockholders who are beneficial owners of our Common Stock held in street name (e.g. holding shares of our Common Stock through a broker, bank or other holder of record) should follow the applicable instructions provided by their broker, bank or other holder of record to vote their shares.

This Proxy Statement was filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) on September 12, 2023, and we expect to first send the Internet Notice to stockholders on or around September 18, 2023.

Record Date and Shares Outstanding

We had outstanding on September 5, 2023, the record date for determination of stockholders entitled to notice of and to vote at the Annual Meeting, 8,973,031 shares of Common Stock (excluding 117,900 treasury shares, which are neither outstanding nor entitled to vote) and 2,597,426 shares of Class A Stock. The Common Stock is traded on the Nasdaq Global Select Market under the ticker “JBSS”. There is no established public trading market for the Class A Stock. A list of the holders of record will be available for inspection by any stockholder for 10 days preceding the meeting at 1703 N. Randall Road, Elgin, Illinois 60123.

1


Table of Contents

 

Voting and Quorum

Pursuant to our Restated Certificate of Incorporation (“Restated Certificate”), so long as the total number of shares of Class A Stock outstanding is greater than or equal to 121/2 % of the total number of shares of Class A Stock and Common Stock outstanding, the holders of Common Stock voting as a class are entitled to elect such number (rounded to the next highest number in the case of a fraction) of directors as equals 25% of the total number of directors constituting the full Board of Directors (the “Common Stock Directors”). The holders of Class A Stock voting as a class are entitled to elect the remaining directors. With respect to all matters other than the election of directors or any matters for which class voting is required by law, the holders of Common Stock and the holders of Class A Stock will vote together as a single class, and the holders of Common Stock will be entitled to one vote per share of Common Stock and the holders of Class A Stock will be entitled to 10 votes per share of Class A Stock.

Our Restated Certificate does not entitle holders of Common Stock to cumulative voting. However, solely with respect to the election of directors, the Restated Certificate entitles, but does not require, each holder of Class A Stock, in person or by proxy, to either (a) vote the number of shares of Class A Stock owned by such holder for as many persons as there are directors to be elected by holders of Class A Stock (“Class A Directors”), or (b) cumulate said votes (by multiplying the number of shares of Class A Stock owned by such holder by the number of candidates for election as a Class A Director) and either (i) give one candidate all of the cumulated votes, or (ii) distribute the cumulated votes among such candidates as the holder sees fit.

The holders of our company’s capital stock representing a majority in voting power of the votes entitled to be cast by stockholders entitled to vote at the Annual Meeting, present virtually or represented by proxy, shall constitute a quorum for such meeting in order to transact any business. Where a separate vote by a class is required, a majority of the outstanding shares of such class, present virtually or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.

Proposals to be Voted Upon and the Board of Directors’ Recommendations

Five proposals are scheduled for stockholder consideration at the Annual Meeting, each of which is described more fully herein:

Election of directors (Proposal 1);
Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the 2024 fiscal year (Proposal 2);
Advisory vote to approve executive compensation (Proposal 3);
Advisory vote on the frequency of the advisory votes on executive compensation (Proposal 4); and
Approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan (Proposal 5).

The vote required and related matters for each of these proposals is as follows:

Proposal 1: Election of Directors

At the Annual Meeting, the holders of Common Stock voting as a class will be entitled to elect three of the ten directors. The holders of Class A Stock voting as a class will be entitled to elect the remaining seven directors. Directors elected by holders of both Common Stock and Class A Stock are elected by a plurality of the votes cast for each such class.

The Board of Directors recommends a FOR vote for Pamela Forbes Lieberman, Mercedes Romero and Ellen C. Taaffe. If a properly submitted, unrevoked proxy does not specifically direct the voting of the shares covered by such proxy, the proxy will be voted FOR the election of all director nominees to be elected by holders of Common Stock.

If any Common Stock nominee is unable to act as director because of an unexpected occurrence, the proxy holders for shares of Common Stock may vote the proxies for another person as selected by the Nominating and Governance Committee (“Governance Committee”) or the Board of Directors may reduce the number of directors to be elected, subject to the Restated Certificate and our bylaws (the "Bylaws").

2


Table of Contents

 

Proposal 2: Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the 2024 Fiscal Year

Approval of the ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as the company’s Independent Registered Public Accounting Firm for the 2024 fiscal year requires the affirmative vote of the holders of shares representing a majority of the votes present or represented by proxy and entitled to vote by the holders of Common Stock and Class A Stock, voting together as one class.

The Board of Directors recommends a FOR vote for the ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the 2024 fiscal year. If a properly submitted, unrevoked proxy does not specifically direct the voting of the shares covered by such proxy, the proxy will be voted FOR Proposal 2.

Proposal 3: Advisory Vote to Approve Executive Compensation

Pursuant to SEC rules, we are providing our stockholders with an advisory, nonbinding vote to approve the compensation paid to our named executive officers, as described in the Compensation Discussion and Analysis and Summary Compensation Table of this Proxy Statement. Because this vote is nonbinding, there is no vote required to formally approve Proposal 3. The holders of Common Stock and Class A Stock will vote together as one class on Proposal 3.

The Board of Directors recommends a FOR vote for the advisory vote to approve executive compensation. If a properly submitted, unrevoked proxy does not specifically direct the voting of the shares covered by such proxy, the proxy will be voted FOR Proposal 3.

Proposal 4: Advisory Vote on the Frequency of the Advisory Votes on Executive Compensation

We are also providing our stockholders with an advisory, nonbinding vote on how frequently the advisory vote on executive compensation should be presented to stockholders, as required by SEC rules. You may vote your shares to have the advisory vote held every one year (i.e. annually), two years, or three years, or you may abstain. Because this vote is nonbinding, there is no vote required to formally approve Proposal 4. The holders of Common Stock and Class A Stock will vote together as one class on Proposal 4.

The Board of Directors recommends an annual (ONE YEAR) frequency for the advisory votes on executive compensation. If a properly submitted, unrevoked proxy does not specifically direct the voting of the shares covered by such proxy, the proxy will be voted annually (ONE YEAR) on Proposal 4.

Proposal 5: Approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan.

Approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan requires the affirmative vote of the holders of shares representing a majority of the votes presented or represented by proxy and entitled to vote by the holders of Common Stock and Class A Stock, voting together as one class.

The Board of Directors recommends a FOR vote for the approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan. If a properly submitted, unrevoked proxy does not specifically direct the voting of the shares covered by such proxy, the proxy will be voted FOR Proposal 5.

Effect of Abstentions

While the Board of Directors recommends that our stockholders vote in accordance with the recommendations set forth above, we also recognize that “abstain” votes are an option for Proposals 2, 3, 4, and 5. Please note, however, that any shares voting “abstain” are treated as shares present or represented and voting. Therefore, an “abstain” vote for Proposal 2, 3, or 5, has the same effect as a vote “against” each respective proposal and has no effect on Proposal 4. For purposes of determining whether a quorum exists, abstentions will be counted as present.

3


Table of Contents

 

Effect of Broker Non-Votes

Under applicable stock exchange rules, brokers and banks have discretionary authority to vote shares without instructions from beneficial owners only on matters considered “routine”, such as the vote to ratify the appointment of the Independent Registered Public Accounting Firm (Proposal 2). On “non-routine” matters, such as the election of directors (Proposal 1), the advisory vote to approve executive compensation (Proposal 3), the frequency of the advisory votes on executive compensation (Proposal 4), and the approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan (Proposal 5), these brokers and banks do not have discretion to vote uninstructed shares and thus are not entitled to vote on such proposals, resulting in a “broker non-vote” for those shares. Broker non-votes will not be counted for determining whether stockholders have approved a specific proposal; however, they will be counted as present for purposes of determining whether a quorum exists. We encourage all stockholders that hold shares through a broker or bank to provide voting instructions to such parties to ensure that their shares are voted at the Annual Meeting.

Other Proposals

If other matters are properly presented for a vote at the Annual Meeting, the persons named as proxies will vote on such matters in accordance with their discretion. We have not received notice of any other matters that may be properly presented for a vote at the Annual Meeting other than the election of Class A Directors by the holders of Class A Stock.

4


Table of Contents

 

PROPOSAL 1: ELECTION OF DIRECTORS

Ten directors are to be elected to serve until the next annual meeting of stockholders and until their respective successors are duly elected and qualified or until his or her death, resignation or removal. Three directors are to be elected by the holders of Common Stock voting as a class and the remaining seven directors are to be elected by the holders of Class A Stock voting as a class. While the Board of Directors does not contemplate that any nominee for election as a director will not be able to serve, if any of the nominees for election shall be unable or shall fail to serve as a director, the holders of proxies for our Common Stock shall vote such proxies for such other person or persons as shall be determined by the Governance Committee or, so long as such action does not conflict with the provisions of our Restated Certificate relating to the proportion of directors to be elected by the holders of Common Stock, the Board of Directors may, in its discretion, reduce the number of directors to be elected.

The Board of Directors recommends that the holders of Common Stock vote “FOR” Pamela Forbes Lieberman, Mercedes Romero and Ellen C. Taaffe.

We believe that each nominee listed below under the “Nominees For Election By the Holders of Common Stock” has the qualifications, skills and experience that are consistent with our requirements for the selection of directors. Below in each nominee’s individual biography we identify and describe the background of each such nominee and other information regarding the qualifications, skills and experience of such nominee. The fact that we do not list a particular qualification, skill or experience for a nominee does not mean that the nominee does not possess that particular qualification, skill or experience.

5


Table of Contents

 

NOMINEES FOR ELECTION BY THE HOLDERS OF COMMON STOCK

The name of and certain information regarding each nominee for election to our Board of Directors by the holders of Common Stock, as reported to us, is set forth below.

Pamela Forbes Lieberman, Director, age 69 – Ms. Forbes Lieberman has served as a director of Standard Motor Products, Inc. since August 2007 where she serves on the Compensation and Management Development Committee, Nominating and Corporate Governance Committee and Strategic Planning Committee and chairs the Audit Committee. Ms. Forbes Lieberman served, until late 2017, as a director of VWR Corporation and as a director, Board Chair, and Audit Committee Chair of A. M. Castle & Co. In 2006, Ms. Forbes Lieberman served as the interim Chief Operating Officer of Entertainment Resource, Inc. Prior to such time, Ms. Forbes Lieberman served as President and Chief Executive Officer and member of the Board of Directors of TruServ Corporation (now known as True Value Company) and prior to that as TruServ’s Chief Operating Officer and Chief Financial Officer. Prior to joining TruServ, Ms. Forbes Lieberman held Chief Financial Officer positions at ShopTalk Inc., The Martin-Brower Company, LLC, and Fel-Pro, Inc. and served as an automotive industry consultant. Ms. Forbes Lieberman, a Certified Public Accountant, began her career at Price Waterhouse (now known as PricewaterhouseCoopers LLP). Ms. Forbes Lieberman holds an MBA from Kellogg School of Management, Northwestern University, and a BS in Accountancy from the University of Illinois.

Ms. Forbes Lieberman joined our Board of Directors in October 2020 and is a member of our Compensation and Human Resources Committee, is the Chairperson of our Audit Committee, and most recently, became the Chairperson of our Governance Committee.

Key Qualifications and Experience; Rationale for Nomination and Election

Accounting and Financial Experience. Ms. Forbes Lieberman has extensive accounting and financial experience, including through her roles as Chief Financial Officer at each of ShopTalk Inc., The Martin-Brower Company, LLC and Fel-Pro, Inc. In addition, Ms. Forbes Lieberman is a Certified Public Accountant and began her career at PricewaterhouseCoopers LLP.
Senior Leadership Experience. Ms. Forbes Lieberman has valuable senior leadership experience in the areas of strategy, operations, finance, M&A, information technology, organization culture, crisis management and change management through her roles (among other things) as Chief Financial Officer at Fel-Pro with strategy, M&A and information technology oversight responsibilities, interim Chief Operating Officer of Entertainment Resource, Inc., and President and Chief Executive Officer of True Value Company.
Governance and Public Company Experience. Ms. Forbes Lieberman has extensive experience as a director of both private and public companies, including on the Board of Directors of Standard Motor Products, Inc., A.M. Castle & Co., VWR Corporation and True Value Company. Ms. Forbes Lieberman also serves on the National Association of Corporate Directors, Chicago Chapter Board of Directors.
Strategic and M&A Experience. Ms. Forbes Lieberman has leadership experience with growth and turnaround of global manufacturing, distribution and retail companies, including through her CFO role at Fel-Pro and her CEO role at True Value Company.
Risk Management/Oversight Experience. Ms. Forbes Lieberman has risk management and oversight experience through her management roles and directorships at a number of public and private companies, including at family-controlled companies. She also has risk management and oversight experience, including cybersecurity oversight, through directorships at public and private companies and attendance and participation in cybersecurity focused governance education programs.

Mercedes Romero, Director, age 56 – Ms. Romero successfully leads and has led the global operations, supply chain and procurement functions at large organizations across multiple industries, including retail, consumer goods, spirits, pharmaceuticals, transportation and food/beverage. Ms. Romero has broad experience in supply chain and procurement transformations, developing and executing business strategy, and implementing transformational programs in complex and diverse environments across the U.S., Canada, Latin America, Europe, Australia and China. Today, she serves as Chief Procurement Officer at Primo Water Corporation, a $2.2 billion water solutions company, where she leads the Strategic Procurement function, reporting to the CEO and working closely with the Board of Directors. She has previously led global procurement organizations with multibillion spends and highly complex supply chains.

Ms. Romero joined our Board of Directors in October 2021 and is a member of our Compensation and Human Resources Committee, our Governance Committee and our Audit Committee.

6


Table of Contents

 

Key Qualifications and Experience; Rationale for Nomination and Election

Senior Leadership Experience. Ms. Romero has deep experience with global operations, supply chains, and procurement through executive roles in the retail, consumer goods, spirits, food and beverage and pharmaceuticals industries, including her service as independent director since October 2022 at Marinemax, Inc. (NYSE: HZO), the world's largest recreational boat and yacht retailer. Ms. Romero has held roles of increased global responsibility including Vice President of Sourcing & Supply Management at Ryder System, Inc., Vice President of Procurement, Americas at Campari Group, Vice President of Global Procurement at Diageo, Vice President of Global Procurement at Starbucks and currently at Primo Water Corporation, where she serves as Chief Procurement Officer leading Primo Water's strategic sourcing global transformation.
Supply and Procurement Experience. Ms. Romero has in-depth experience with global supply chains and procurement transformations, developing and executing global business strategies, and developing and implementing transformational programs in complex and diverse environments across the U.S., Canada, Latin America, Europe, Australia and China.
Risk Management/Oversight Experience. Ms. Romero has valuable experience in enterprise risk management, leading and managing supply failure risk, commodity fluctuation risk, and environmental risks while guaranteeing product availability at optimal costs.
Strategic Transformations/Change Management Experience. Ms. Romero has held a variety of global roles leading strategy, network transformations, and change management. She is recognized as a change agent since early in her career from Procter and Gamble, Starbucks, Diageo, Campari, as well as Ryder System. Ms. Romero is recognized for her impact in strategy and network optimization across global manufacturing sites.
ESG Experience. Ms. Romero has developed expertise in the areas of ESG globally through her management roles leading sustainability, supplier diversity, supplier failure risk management and DEI initiatives at Clorox, Starbucks, Diageo, Primo Water Corporation and the Institute for Supply Management.
Public Company, Governance and Cybersecurity. Ms. Romero has governance and cybersecurity experience through her roles as a Primo Water officer, her role as an independent director at Marinemax, Inc., her NACD training in best practices in governance and cybersecurity oversight, her certifications from the Latino Corporate Directors Association (Board Ready and Board Ready Next Institute) and Stanford Directors’ College certification.

Ellen C. Taaffe, Director, age 61 – Ms. Taaffe is a senior brand management and strategy executive who has held leadership roles across several industries. She is currently a clinical professor of Management and Organizations and the Director of the Women’s Leadership Program at Northwestern University’s Kellogg School of Management, where she has served since September 2016. She has also been consulting and coaching since 2015. Previously, she was President of Smith-Dahmer Associates LLC, a research and brand strategy consulting firm, where she served from 2010 to 2015. Prior to that, Ms. Taaffe was Vice President of Brand Marketing and a Corporate Officer of the Whirlpool Corporation from 2007 to 2009. Prior to the Whirlpool Corporation, Ms. Taaffe served as Senior Vice President of Marketing and Corporate Officer of Royal Caribbean Cruises Ltd. from 2005 to 2007. Previously, Ms. Taaffe served as Vice President of Health and Wellness Strategy and Programming at PepsiCo from 2003 to 2005. She was Vice President of Marketing for Frito-Lay’s Convenience Foods Division of PepsiCo, following PepsiCo’s acquisition of the Quaker Oats Company in 2001, where she served as Vice President of Marketing for Snacks and Side Dishes. At Quaker, Ms. Taaffe held numerous positions in Brand Management and Sales Management from 1984 to 2001.

In 2015, Ms. Taaffe was appointed to serve on the Board of Directors of the Hooker Furniture Corporation, where she serves on their Compensation and Human Resources Committee, Audit Committee and Nominating and Corporate Governance Committee, which she chairs. In 2018, Ms. Taaffe joined the Board of Directors of AARP Services Inc., where she serves on their Compensation and Talent Management Committee and Nominating and Governance Committee, which she chairs, and is Vice Chair of the Board. Ms. Taaffe joined our Board of Directors in January 2011 and is a member of our Audit Committee, a member of our Governance Committee, the Chairperson of our Compensation and Human Resources Committee, and most recently, the Lead Independent Director of the Board. She was named a Board Leadership Fellow by the National Association of Corporate Directors (“NACD”) in 2016 and was recognized as NACD Directorship Certified in 2022.

Key Qualifications and Experience; Rationale for Nomination and Election

Senior Leadership Experience. Ms. Taaffe has extensive experience in senior brand management and strategy through her leadership and executive roles across several industries, including consumer packaged goods, travel & hospitality, and home durables. She has held top brand roles at PepsiCo, Quaker Oats Company, Royal Caribbean Cruises and Whirlpool Corporation.

7


Table of Contents

 

Relevant Industry Experience. Ms. Taaffe has acquired valuable experience in the consumer food and beverage industry including through her roles as Vice President of Marketing for Frito-Lay’s Convenience Foods Division of PepsiCo and Vice President of Marketing for Snacks and Side Dishes at Quaker Oats Company. She also served as Vice President of Health and Wellness Strategy and Programming at PepsiCo.
Governance and Public Company Experience. Ms. Taaffe is a NACD Certified Board Director and an NACD Board Leadership Fellow. She serves on the Board of Directors of AARP Services, Inc. and Hooker Furniture Corporation. Ms. Taaffe's governance experience is also based on her role as nominating and governance chair at other public companies.
Marketing and Product Development Experience. Ms. Taaffe has held a variety of roles in sales, sales management, marketing and product development, including service in senior marketing roles at Royal Caribbean Cruises Ltd. She has extensive experience in brand and portfolio management, P&L responsibility, marketing communications, new product development and cross-channel trade marketing with multiple leading companies.
ESG Experience. Ms. Taaffe has ESG related expertise through her roles as a clinical professor of leadership and Director of Women’s Leadership Programming in the Management and Organizations Department at Northwestern University’s Kellogg School of Management. She is a regular speaker, writer, panelist and coach in the areas of leadership, management style and organizational culture and change. She was a participant in the inaugural 2021 NACD ESG Continuous Learning Cohort.

8


Table of Contents

 

NOMINEES FOR ELECTION BY THE HOLDERS OF CLASS A STOCK

The name of and certain information regarding each nominee for election to our Board of Directors by the holders of Class A Stock, as reported to us, is set forth below.

Jasper B. Sanfilippo, Jr., Chief Operating Officer, President, Assistant Secretary and Director, age 55 – Mr. Sanfilippo has been employed by us since 1991. In November 2006, Mr. Sanfilippo was named our Chief Operating Officer and President, and, in May 2007, Mr. Sanfilippo was named our Treasurer and held that position until January 2009. Mr. Sanfilippo was appointed as a member of the Board of Directors in December 2003. Mr. Sanfilippo served as Executive Vice President Operations from 2001 to November 2006, retaining his position as Assistant Secretary, which he assumed in December 1995. Mr. Sanfilippo served as our Senior Vice President Operations in August 1999 and served as Vice President Operations between December 1995 and August 1999. Prior to that, Mr. Sanfilippo was the General Manager of our Gustine, California facility beginning in October 1995, and from June 1992 to October 1995 he served as Assistant Treasurer and worked in our Financial Relations department. Mr. Sanfilippo’s responsibilities include overseeing Plant Operations, as well as Commodity Procurement and Research and Development functions. Mr. Sanfilippo has previously served on the Board of Directors of the National Pecan Shellers Association, an industry association of which our company is a member. Mr. Sanfilippo is the brother of Jeffrey T. Sanfilippo, an executive officer and director of our company, the brother of James J. Sanfilippo, John E. Sanfilippo and Lisa A. Sanfilippo, all directors of our company, the cousin of Michael J. Valentine and James A. Valentine, both directors of our company.

Key Qualifications and Experience; Rationale for Nomination and Election by Holders of Class A Stock

Senior Leadership Experience. Mr. Sanfilippo has significant senior leadership experience as our Chief Operating Officer.
Innovation and Production Experience. Mr. Sanfilippo has an extensive background in food production, manufacture and packaging innovation and improving and streamlining our operations.
Risk Management/Oversight Experience. Mr. Sanfilippo has valuable experience in managing production risk and managing our capital expenditures to benefit the company’s Long-Range Plan.

Jeffrey T. Sanfilippo, Chief Executive Officer and Chairman of the Board of Directors, age 60 – Mr. Sanfilippo has been employed by us since 1991, and on November 6, 2006, Mr. Sanfilippo was named our Chief Executive Officer. Mr. Sanfilippo became a director of our company in August 1999 and was elected as our Chairman of the Board of Directors on October 30, 2008. Mr. Sanfilippo served as our Executive Vice President Sales and Marketing from January 2001 to November 2006. He served as Senior Vice President Sales and Marketing from August 1999 to January 2001 and as Vice President Sales and Marketing from October 1995 to August 1999. Prior to that, Mr. Sanfilippo served as Vice President West Coast Operations and Sales from October 1993 to September 1995 and as General Manager West Coast Operations from September 1991 to September 1993. Mr. Sanfilippo is responsible for overseeing our Sales, Marketing, Food Safety and Human Resource departments. Mr. Sanfilippo is the brother of Jasper B. Sanfilippo, Jr., an executive officer and director of our company, the brother of James J. Sanfilippo, John E. Sanfilippo and Lisa A. Sanfilippo, all directors of our company, and the cousin of Michael J. Valentine and James A. Valentine, both directors of our company. Mr. Sanfilippo earned his Masters of Business Administration and is an active member of the Chicago chapter of the Young Presidents’ Organization.

Key Qualifications and Experience; Rationale for Nomination and Election by Holders of Class A Stock

Senior Leadership Experience. Mr. Sanfilippo has significant senior leadership experience as our Chief Executive Officer.
Deep Industry Experience. Mr. Sanfilippo’s tenure at the company provides him with a significant knowledge of the nut and snack industry and an appreciation for our culture and values.
Strategic Experience. Mr. Sanfilippo has led the development of our Long-Range Plan and has experience in positioning the company for continued growth and innovation.

9


Table of Contents

 

James J. Sanfilippo, Director, age 61 – Mr. Sanfilippo is the Chief Executive Officer of TruStar Holdings, LLC, and VIST Labs, LLC, developers and suppliers of advanced packing systems. Through August 2020, Mr. Sanfilippo served as President of the Sonoco Elk Grove, Inc. Division of Sonoco Products Company (“Sonoco”), a publicly traded, diversified global manufacturer of packaging materials. Prior to Sonoco, he served in the role of President and Chief Executive Officer of Clear Lam Packaging, Inc. (“Clear Lam”) from 1999 to July 2017, when Clear Lam was sold to Sonoco. Mr. Sanfilippo became a director of our company in October 2013. Before Clear Lam, Mr. Sanfilippo served as the founder of MAP Systems LLC, a thermoforming packaging business. From 1995 to 1999, Mr. Sanfilippo served as a Vice President and Treasurer of our company where he was responsible for our Illinois operations and contract manufacturing. From 1992 to 1994, Mr. Sanfilippo served as Director of Contract Manufacturing for our company and from 1985 to 1991 served as a Product Manager for our company. Mr. Sanfilippo is the brother of Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr., both executive officers and directors of our company, the brother of John E. Sanfilippo and Lisa A. Sanfilippo, both directors of our company, and the cousin of Michael J. Valentine and James A. Valentine, both directors of our company. Mr. Sanfilippo has been responsible for a number of patents in the packaging industry.

Key Qualifications and Experience; Rationale for Nomination and Election by Holders of Class A Stock

Innovation and Production Experience. Mr. Sanfilippo has an extensive background in packaging and product innovation through history at the company and multiple packaging companies.
Senior Leadership Experience. Mr. Sanfilippo has significant senior leadership experience as CEO of TruStar Holdings, LLC and VIST Labs, LLC and former President and CEO of Clear Lam.
Deep Industry Experience. Mr. Sanfilippo’s tenure at the company provides him with a significant knowledge of the nut and snack industry and an appreciation for our culture and values.

John E. Sanfilippo, Director, age 64 – Mr. Sanfilippo is the President of Engineering at TruStar Holdings, LLC, a developer and supplier of advanced packaging systems. He became a director of our company in October 2020. Mr. Sanfilippo is also a Manager of Sanfilippo Tech, LLC, Sanfilippo Equity Partners, LLC, and VIST Labs, LLC. Through August 2020, Mr. Sanfilippo served as Vice President of Engineering of the Sonoco Elk Grove, Inc. Division of Sonoco Products Company (“Sonoco”), a publicly traded, diversified global manufacturer of packaging materials. Prior to Sonoco, Mr. Sanfilippo served as Group President of Corporate Engineering at Clear Lam Packaging, Inc. (“Clear Lam”) from 2005 to July 2017, when Clear Lam was sold to Sonoco. Before Clear Lam, Mr. Sanfilippo served as an executive with MAP Systems and Jescorp, both packaging companies. From 1975 to 1999, Mr. Sanfilippo served in varying engineering roles and manager of engineering projects for our company, including as a plant engineer. Mr. Sanfilippo is the brother of Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr., both executive officers and directors of our company, the brother of James J. Sanfilippo and Lisa A. Sanfilippo, both directors of our company, and the cousin of Michael J. Valentine and James A. Valentine, both directors of our company.

Key Qualifications and Experience; Rationale for Nomination and Election by Holders of Class A Stock

Supply and Procurement Experience. Mr. Sanfilippo’s experience in the packaging industry has allowed him to provide oversight on a variety of supply and logistics risks.
Innovation and Production Experience. Mr. Sanfilippo has an extensive background in engineering and packaging innovation and bringing new products to market in a variety of industries, including the food industry.
Risk Management/Oversight Experience. Mr. Sanfilippo has valuable experience in overseeing product risk and managing product issues through the procurement and packaging of various food products.

Lisa A. Sanfilippo, Director, age 59 – Ms. Sanfilippo is a former Co-Director of The Global Society for Female Entrepreneurs in Beverly Hills, California and former founder and Co-Owner of Acceptance Recovery Center in Scottsdale, Arizona. She became a director for our company in April 2021. Previously, Ms. Sanfilippo served as Director of Business Development & Innovation Trends at the company from 2011 to 2017. Before that, Ms. Sanfilippo served in several other roles at the company, including Senior Business Manager in charge of Alternative Channels from 2009 to 2011, Director of Customer Service from 2007 to 2009, and Senior Business Manager for Industrial Sales from 1991 to 2007. Ms. Sanfilippo is the sister of Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr., both executive officers and directors of our company, the sister of James J. Sanfilippo and John E. Sanfilippo, both directors of our company, and the cousin of Michael J. Valentine and James A. Valentine, both directors of our company.

10


Table of Contents

 

Key Qualifications and Experience; Rationale for Nomination and Election by Holders of Class A Stock

Marketing and Product Development Experience. Ms. Sanfilippo has significant experience in developing products and overseeing innovation trends in the snack industry.
Deep Industry Experience. Ms. Sanfilippo’s long tenure at the company provides her with a deep knowledge of the nut and snack industry and an appreciation for our culture and values.
Strategic Experience. Ms. Sanfilippo has experience in expanding into alternative channels and formulating strategic initiatives to support our Long-Range Plan through her experience at The Global Society for Female Entrepreneurs and at the company.

James A. Valentine, Senior Technical Advisor, Director, age 59 — Mr. Valentine has been employed by the company since 1986 and (most recently) in August 2021 was named the company’s Senior Technical Advisor. He became a director of our company in October 2021. He served as the company’s Senior Technical Officer from January 2018 until August 2021 and Chief Information Officer from November 2006 to January 2018. He served as the company’s Executive Vice President, Information Technology, from August 2001 to November 2006. Mr. Valentine served as Senior Vice President, Information Technology, from January 2000 to August 2001, and as Vice President of Management Information Systems from January 1995 to January 2000. Mr. Valentine is responsible for providing guidance to management regarding the strategic direction of the company’s information technology functions that support our corporate strategy. Mr. Valentine is the brother of Michael J. Valentine, a director of our company, and the cousin of Jasper B. Sanfilippo, Jr. and Jeffrey T. Sanfilippo, both of whom are executive officers and directors of our company, and a cousin of James J. Sanfilippo, John E. Sanfilippo and Lisa A. Sanfilippo, all directors of our company.

Key Qualifications and Experience; Rationale for Nomination and Election by Holders of Class A Stock

Cybersecurity and IT Experience. Mr. Valentine has extensive cybersecurity and IT experience through his role as former Chief Information Officer of the company and his knowledge of developing cybersecurity and IT trends.
Deep Industry Experience. Mr. Valentine has a wealth of experience through working at the company over multiple decades.
Senior Leadership Experience. Mr. Valentine has significant senior leadership experience as our former Chief Information Officer.

Michael J. Valentine, Director, age 64 – Mr. Valentine was employed by us from 1987 until he retired on January 23, 2023. Mr. Valentine served as Chief Financial Officer from January 2001 to August 2021 and has served as Group President from November 2006 to January 2023. In January 2001 Mr. Valentine was named Executive Vice President Finance, Chief Financial Officer and Secretary. He served as Secretary until August 2022. Mr. Valentine was elected as a director of our company in April 1997. Mr. Valentine served as our Senior Vice President and Secretary from August 1999 to January 2001. He served as Vice President and Secretary from December 1995 to August 1999. He served as our Assistant Secretary and General Manager of External Operations from June 1987 and 1990, respectively, to December 1995. Mr. Valentine’s responsibilities also include peanut, almond, imported nut, packaging and other ingredient procurement and our contract packaging business. Since 1999 and 2009 Mr. Valentine has served on the Board of Directors of the Peanut and Tree Nut Processors Association and the Board of Directors of the American Peanut Council, respectively, both of which are nut industry associations of which our company is a member. Mr. Valentine is the brother of James A. Valentine, a director of our company, the cousin of Jasper B. Sanfilippo, Jr. and Jeffrey T. Sanfilippo, both of whom are executive officers and directors of our company and the cousin of James J. Sanfilippo, John E. Sanfilippo and Lisa A. Sanfilippo, all directors of our company.

Key Qualifications and Experience; Rationale for Nomination and Election by Holders of Class A Stock

Accounting and Financial Experience. Mr. Valentine has extensive financial and accounting experience through his role as former Chief Financial Officer of the company.
Deep Industry Experience. Mr. Valentine has a wealth of experience through working at the company over multiple decades and in the nut industry from his service on the board of directors of two industry associations related to our core business.
Senior Leadership Experience. Mr. Valentine has significant senior leadership experience as our former Chief Financial Officer and former Group President.

11


Table of Contents

 

CORPORATE GOVERNANCE

Fiscal Year 2023 and 2024 Governance Changes

The Board of Directors and its committees (driven by Ms. Forbes Lieberman, Ms. Taaffe and Ms. Romero) have recently implemented a significant number of governance changes, which are designed to improve (among other things) the oversight of the company and communications with our stockholders, including the changes identified below. The changes implemented during fiscal year 2023 and into fiscal year 2024 were a continuation of the governance changes adopted by the Board of Directors and its committees during the fiscal year 2022 and illustrate our commitment to both good governance and improvement on existing high governance standards.

Elected Ms. Ellen C. Taaffe as Lead Independent Director.

Audit Committee, composed entirely of independent directors, continued its oversight of pledging and no new pledges were entered into during the 2023 and 2024 fiscal years.

Continued our enhanced stockholder outreach program and adopted new governance disclosures in response to stockholder outreach.

Rotated Governance Committee Chair to support director leadership refreshment.

Implemented new Board and committee evaluation and director feedback process to improve Board and committee effectiveness.

 

Controlled Company Status and Independence of the Board of Directors

We are a family-controlled company with independent directors performing key oversight roles. As set forth below under “Beneficial ownership,” the Sanfilippo Group owns shares entitled to cast 50.7% of the votes on matters submitted to stockholders generally (other than the election of directors which are elected as described above) and Michael J. Valentine is the only member of the Valentine Group and owns shares (individually and as trustee of certain trusts) entitled to cast 23.9% of the votes on matters submitted to stockholders generally (other than the election of directors which are elected as described above).

On account of (a) the Sanfilippo Group and Valentine Group share ownership and (b) the oral understanding between the members of the Sanfilippo Group and the Valentine Group not to cumulate their votes for the election of Class A Directors and to vote in a reciprocal manner for each other’s nominees, under Nasdaq Listing Rule 5615(c)(1), we qualify as a “controlled company.” Pursuant to the Nasdaq Listing Rules, we are not required to have

a majority of independent directors on our Board of Directors,
a nominations committee comprised solely of independent directors or
a compensation committee comprised solely of independent directors.

Notwithstanding these requirements, the Sanfilippo Group and Valentine Group believe strongly in good corporate governance and related practices and procedures. As a result, the Board of Directors has determined that the best interests of our company and its stockholders are served by independent oversight of our audit, nominating and compensation functions, and that our key committees should be comprised only of independent directors.

Board of Directors—Leadership Structure and Chairman/CEO Roles and Lead Independent Director

The Board of Directors believes it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairman of the Board of Directors (“Chairman”) and the Chief Executive Officer in any way that is in the best interests of our company and stockholders. The Board of Directors believes that the decision as to who should serve as Chairman and as Chief Executive Officer, and whether the offices should be combined or separate, should be assessed periodically by the Board of Directors, and that the Board of Directors should not be constrained by a rigid policy mandating that such positions be separate. The Board of Directors has determined that, in light of (among other things) the current size of our company and its family-controlled status, the most efficient leadership structure is to combine the roles of Chairman and Chief Executive Officer and have Jeffrey T. Sanfilippo serve as such. Combining the roles of Chairman and Chief Executive Officer helps the Board of Directors make efficient decisions, allows our company to tap fully Mr. Sanfilippo’s extensive knowledge of our industry and company and enables him to exercise effectively his proven leadership skills.

12


Table of Contents

 

Furthermore, we believe that the combined office of the Chairman and the Chief Executive Officer puts an individual in the best position to focus the attention of the Board on the issues of greatest importance to the company and its stockholders, including issues related to strategy (including implementation of a comprehensive long-range plan (our “Long-Range Plan”)) and risk management.

We have adopted Governance Guidelines that provide for the position of a Lead Independent Director. In particular, if the Board elects a Chairperson who is not independent under the rules of the principal stock exchange on which our Common Stock is listed for trading, the position of Lead Independent Director will be established. The Lead Independent Director will be independent under the rules of the principal stock exchange on which our Common Stock is listed for trading and elected by a vote of the directors of the Board who have been elected by holders of our Common Stock. As a guideline, the Lead Independent Director is anticipated to serve in that capacity for a two-year term, which term can be extended or reduced (or an individual serving in such capacity removed) based on the vote of such Common Stock elected directors of the Board. The Lead Independent Director (i) has the authority to call meetings of such independent directors of the Board and chairs all such meetings (other than with respect to any meeting or executive session held by any committee of the Board), (ii) serves as the primary liaison between the Chairman and such independent directors regarding matters specific to the operation, functions and duties of the Board, (iii) coordinates and communicates with the Chairman in respect of the development of agendas for meetings of the Board and (iv) is available for consultations and communications with major stockholders and other third parties, as requested by management or otherwise appropriate.

In fiscal 2023, the Common Stock Directors elected Ms. Taaffe as Lead Independent Director for a two-year term.

In furtherance of good governance practices, we emphasize that the Audit, Governance and Compensation and Human Resources Committees are comprised exclusively of independent Common Stock Directors and each committee chairperson performs certain and significant lead director-type functions. Such independent directors, through their committee meetings, hold regular executive sessions without the attendance of management at which discussions are facilitated by the chairperson of the respective committee regarding its work and responsibilities.

Board of Directors - Evaluation and Assessment

Our Board of Directors routinely evaluates and assesses individual directors to ensure that the composition of our Board of Directors remains a strategic fit in assisting the company achieve its Long-Range Plan. The Governance Committee evaluates relations between the Board of Directors and management and the functions of each committee and Board of Directors more generally. Additionally, the Board utilized a skills matrix to assess the background, skill set, and experiences of each director. Our Board of Directors is highly skilled and diversified and offers unique perspectives from their varying experiences, as is reflected in the engaging conversations during each and every Board of Directors and committee meeting.

 

Common Stock Directors

Class A Directors

Experience / Qualifications

Pamela Forbes Lieberman

Mercedes Romero

Ellen C. Taaffe

James J. Sanfilippo

Jasper B. Sanfilippo Jr.

Jeffrey T. Sanfilippo

John E. Sanfilippo

Lisa A. Sanfilippo

James A. Valentine

Michael J. Valentine

Industry (Consumer Packaged Goods) Experience

X

X

X

X

X

X

X

X

X

X

Executive (C-Suite) and other Leadership and Strategy Experience

X

X

X

X

X

X

X

X

X

X

Operations, Manufacturing and Supply Chain Experience

X

X

X

X

X

X

X

Sales and Marketing Experience

X

X

X

13


Table of Contents

 

Common Stock Directors

Class A Directors

Experience / Qualifications

Pamela Forbes Lieberman

Mercedes Romero

Ellen C. Taaffe

James J. Sanfilippo

Jasper B. Sanfilippo Jr.

Jeffrey T. Sanfilippo

John E. Sanfilippo

Lisa A. Sanfilippo

James A. Valentine

Michael J. Valentine

Financial, Audit and/or Accounting Experience

X

X

IT and Cybersecurity Oversight Experience

X

X

X

Innovation and New Product Development Experience

X

X

X

X

X

X

X

X

Public

Company Experience, Governance Experience

X

X

X

X

X

Risk Management Experience

X

X

X

X

X

X

X

X

X

DEI, Sustainability and Environmental Related Experience

X

X

X

X

X

M&A Experience, including Integration

X

X

X

X

X

X

X

Board of Directors—Director Succession Planning

The Governance Committee has discussions, from time to time, regarding director tenure, director succession planning and the overall skills possessed by each member of the Board of Directors to help ensure that the Board of Directors possesses the necessary perspectives to oversee management and effectively monitor our operations. The Governance Committee has reviewed director tenure and refreshment best practices in light of the composition of the Board of Directors and considered strategies to maintain a qualified, diverse and experienced Board of Directors. In selecting a nominee for the Board, the Governance Committee may receive suggestions from its extensive network, including, but not limited to, the current and former executive officers and directors of the Company. Additionally, from time to time, the Governance Committee may engage a third party (for a fee) to assist in identifying and selecting potential director candidates.

Board of Directors—Role in Risk Oversight—Structure and Programs

Throughout the year, risk management is an integral part of the deliberations of the Board of Directors and its committees. Importantly, the Board of Directors reviews and periodically receives updates on and helps formulate our Long-Range Plan, taking into account, among other considerations, our risk profile and potential exposures. In addition, the Board of Directors receives regular reports from management regarding specific risks that the Board of Directors or management has identified as important for Board review and input, including (but not limited to) cybersecurity or information security risks, environmental, social and governance (“ESG”) risks and food safety risks. The Board risk oversight function is also implemented through Board committees. Although the Board of Directors, as a whole, has the ultimate responsibility for risk oversight, its committees also help oversee our risk profile and exposures relating to matters within the scope of their authority, and each committee reports to the Board of Directors about their deliberations and findings.

14


Table of Contents

 

Specifically, the Compensation and Human Resources Committee reviews risks associated with our compensation programs, to ensure that incentive compensation programs do not encourage inappropriate risk-taking by management or employees. The Compensation and Human Resources Committee determined in fiscal 2023 that our compensation programs do not encourage inappropriate risk-taking, and our compensation programs would be unlikely to have a material adverse effect upon the company. In addition to reviewing compensation program risks, our Compensation and Human Resources Committee reviews risks related to our talent and human capital and other employee programs. The Governance Committee considers risks related to our corporate governance, including certain ESG initiatives and considerations. The Audit Committee considers risks relating to our accounting and finance functions, internal controls, related party transactions, cybersecurity and information security, pledging of Class A Stock by stockholders, and disclosure and financial reporting.

With respect to cybersecurity risks, the Board has increased its oversight of cybersecurity matters through the appointment of Mr. James A. Valentine, who has specific and extensive experience in cybersecurity and IT security matters as noted in his “Key Qualifications and Experience” above. In addition to Mr. Valentine, Ms. Forbes Lieberman has significant cybersecurity oversight experience.

Our company has a Risk Assessment Committee which is composed entirely of members of company management. The Risk Assessment Committee is chaired by Kelly A. Day, Senior Director of Administration, and consisting of Shaun A. Crandall, Senior Director of Information Technology Infrastructure and Cybersecurity, Neeraj Sharma, Vice President of Operations, Michael J. Finn, Vice President and Corporate Controller, Michael D. Campagna, Vice President of Food Safety, Quality and Regulatory Compliance, Walter S. Kowal, Senior Director of Internal Audit and Resource Conservation, Kimberly A. Calderone, Senior Director of Procurement, Julia A. Pronitcheva, Senior Vice President of Human Resources and Gina M. Lakatos, Vice President, General Counsel and Secretary. The purpose of the Risk Assessment Committee is to aid further the Board of Directors and its committees in reviewing the risks which face our company, including risks related to compensation policies and practices, food safety and quality, cybersecurity and information technology, ESG risks and security and general enterprise and business risks. The Risk Assessment Committee meets quarterly and a member of the Risk Assessment Committee delivers a written and oral report to the Board of Directors about their findings and general discussions.

With respect to supply procurement risks, our members of management provide regular updates to the Board of Directors. With regard to food safety risks, our Vice President of Food Safety, Quality and Regulatory Compliance, regularly reports directly to the Board of Directors and also through the Risk Assessment Committee process. With regard to cybersecurity risks, our Senior Director of Information Technology Infrastructure and Cybersecurity reports at each Risk Assessment Committee meeting; however, both our Vice President of Information Technology and Cybersecurity, and our Senior Director of Information Technology Infrastructure and Cybersecurity will report quarterly to the Audit Committee and at least annually to the Board of Directors.

Board of Directors—Role in Risk Oversight—Pledging Matters

The Board of Directors believes that ownership of Common Stock and Class A Stock by directors and executive officers of the company promotes alignment of interest with stockholders and is an important element of a strong corporate governance program. The Board of Directors recognizes that pledging by directors and executive officers of their stock as collateral for indebtedness or for certain other purposes creates the risk of a sale or transfer to a third party that may occur at a time when the director or executive officer is aware of material nonpublic information, is not authorized to trade or any resulting transfer or sale could cause adverse consequences to the company or cause a change in control of the company.

Consequently, on the recommendation of the Audit Committee, on January 27, 2022, the Board of Directors adopted an Anti-Pledging Policy (the “Anti-Pledging Policy”) applicable to directors and executive officers with respect to directly owned shares of Common Stock and Class A Stock of the company, which policy was effective immediately. The Board adopted the Anti-Pledging Policy in response to stockholder input and as a good corporate governance measure.

In particular, pursuant to the Anti-Pledging Policy, directors and executive officers of the company cannot pledge, hypothecate, loan or otherwise encumber shares of stock that such director or executive officer directly owns as collateral to secure indebtedness or for a margin loan of any kind, including placing shares in a margin account. Such restrictions apply to shares of stock that a director or executive officer directly owns and is titled in his or her name on the books and records of the company, including with respect to the books and records of any transfer agent of the company, and shares granted by the company as part of the compensation awarded to a director or executive officer. The Anti-Pledging Policy does not apply to stockholders who are not directors or executive officers, including trustees of any trusts holding stock of the company.

Each director and executive officer of the company is expected to periodically (and upon request) certify compliance with the Anti-Pledging Policy. The Audit Committee reviews compliance with the Anti-Pledging Policy and pledging related matters on a quarterly basis. In addition, as noted below under “Corporate Governance—Board Meetings and Committees—Audit Committee,” the Audit

15


Table of Contents

 

Committee regularly receives and considers information regarding any pledging matters and evaluates any risk related to such pledges. As of the date of this proxy statement, no director or executive officer of the company has directly pledged shares of stock of the company.

In addition, representatives of the stockholder trusts holding pledged Class A Stock have informed the Audit Committee of the following, which representatives of such trusts believe mitigate the overall risk regarding such pledging arrangements:

the stockholder trusts are bona fide estate planning vehicles used by the Sanfilippo family to manage their estate planning process and objectives;
the trust that has pledged the largest number of shares of Class A Stock holds additional assets in the trust in addition to the Class A Stock;
the indebtedness (net of liquid assets) associated with the trust that has pledged the largest number of shares of Class A Stock is modest compared to the total assets in the trust;
certain of the stockholder trusts of the Sanfilippo Group hold significant, additional liquid assets beyond the Class A Stock; and
any liquid assets contained in the various stockholder trusts of the Sanfilippo Group would be used first to satisfy any requirement for additional collateral or required payments for indebtedness, reducing the risk of foreclosure on any shares of Class A Stock.

A copy of the Anti-Pledging Policy is posted on the website of the company under the “Corporate Governance” section at https://jbssinc.com/investors/corporate-governance. The Anti-Pledging Policy complements the Anti-Hedging Policy and Stock Ownership Guidelines of the company.

Board of Directors—Role in Environmental, Social and Risk Oversight

Since fiscal year 2022, the Board of Directors and its committees reviewed and periodically received updates regarding ESG initiatives and considerations at the company and provided input thereon. In fiscal year 2023, the company's ESG committee (consisting of a cross-functional group of company management) continued to improve the oversight and execution of our ESG initiatives, including engaging an ESG consultant to advise the company on policies and programs to support our ESG initiatives. Such initiatives include the following:

Diversity and Inclusion: We recognize that our business is stronger and more successful if supported by a diverse workforce. Our goal is to maintain and promote diversity among our employees and foster an inclusive environment where differences are celebrated. In the 2023 fiscal year, our Diversity, Equity and Inclusion Council, consisting of a team of employees from different functional areas, provided oversight and enhanced our diversity and inclusion initiatives. We also promote inclusion through our use of employee resource groups. For example, our women’s employee resource group conducted leadership events attended by female members of our Board of Directors in 2023, integrating inclusion throughout each level of our organization. In addition, our Governance Committee regularly receives reports about diversity matters and the Compensation and Human Resources Committee regularly receives information about the diversity and compensation of our workforce.
Environmental: We have put in place several initiatives focused on preserving one of our most precious resources: our natural environment. We have assessed our carbon footprint and are focused on reducing our energy usage to lower our carbon footprint through optimizing our facilities and through differentiation of suppliers. We seek to use less packaging in our products to both conserve resources and reduce the carbon impact with respect to our products. We strive to increase recycling and reduce our waste reduction year over year. We have devoted additional internal resources to discover and implement ways in which we can conserve resources and orient our production around environmental preservation.
Social: We have a long history of being focused on helping the communities that we serve and in which we are located. During fiscal 2023, we worked with partner food banks to provide a significant volume of high-protein products such as peanut butter and other nut products to help solve food insecurity and reduce hunger. Our brand, Orchard Valley Harvest, has pledged to donate 1% of Orchard Valley Harvest's sales to fight food insecurity in the United States. Our employees also donated their time, over 1,000 hours of volunteer time, to support our local communities. In addition, we are supporters of such charitable and civic organizations such as the Ronald McDonald House and the Elgin Symphony Orchestra. During the 2023 fiscal year, we have also developed sustainable supply chain practices with our cashew growers in Ghana. We have invested in their future by providing good agricultural practice lessons and introducing beekeeping to enhance their yields and strengthen their future.

16


Table of Contents

 

During the 2024 fiscal year, we are working with our internal resources and external consultant to develop and evaluate applicable metrics and goals to track our progress on ESG initiatives with the assistance of our ESG committee. For additional information about our ESG initiatives, please see https://jbssinc.com/social-responsibility.

Board Meetings and Committees

Board of Directors

It is expected that each member of the Board of Directors will be available to attend all regularly scheduled meetings and all regularly scheduled meetings of the committees on which a director serves, as well as our annual meeting of stockholders, after taking into consideration the director’s other business and professional commitments. Each director is expected to make his or her best effort to attend all special meetings of the Board of Directors and of the committees on which a director serves.

Our Board of Directors held six meetings during fiscal 2023. Each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and meetings held by all committees of the Board of Directors on which they served, during the period for which they served. All directors attended the 2022 annual meeting of stockholders which was held virtually on November 3, 2022. The Audit Committee, the Compensation and Human Resources Committee and the Governance Committee are each subject to a charter which governs their respective activities. These committee charters are available on our website at www.jbssinc.com.

Our Nasdaq Board Diversity Matrix is posted on our website at https://jbssinc.com/investors/corporate-governance.

Determination of Director Independence

During fiscal 2023, the Board determined that each of Ms. Forbes Lieberman, Ms. Romero and Ms. Taaffe each qualify as:

an “independent director” as defined in Section 5605(a)(2) of the Nasdaq Listing Rules;
“independent” for purposes of Section 10A and Rule 10A-3 of the Exchange Act;
independent under Rule 10C-1 of the Exchange Act; and
a “non-employee director” under Rule 16b-3 of the Exchange Act.

Overview of Our Committees

Compensation and Human Resources Committee

Members (all independent directors)

Number of Meetings

6

Ms. Taaffe (Chairperson)
Ms. Forbes Lieberman
Ms. Romero

 

Key Functions/Duties

Reviews and approves the compensation (salaries, equity grants, incentive compensation) of executive officers.
Recommends to the Board of Directors the compensation of non-management directors.
Reviews and approves the employment-related compensation paid to related parties.
Reviews and provides oversight of human capital and talent development functions, including employee compensation, culture, turnover, retention, organizational reputation with employees, employee engagement and well-being, training, leadership development, recruiting, diversity and inclusion and labor relations.
Provides oversight of certain human capital related ESG matters.

 

Nominating and Governance Committee

Members (all independent directors)

Number of Meetings

5

17


Table of Contents

 

Ms. Forbes Lieberman (Chairperson)
Ms. Taaffe
Ms. Romero

 

Key Functions/Duties

Recommends to the Board of Directors the nominees for election to the Board of Directors by the holders of our Common Stock.
Reviews and makes recommendations on matters related to the practices, policies and procedures of the Board of Directors and the committees of the Board of Directors.
Performs leading role in shaping our overall system of corporate governance.
Oversees certain governance-related ESG matters.
Assesses the size, structure and composition of the Board of Directors and committees of the Board of Directors, including director qualifications, director tenure and director succession planning, and helps coordinate the performance evaluation of the Board of Directors and the committees of the Board of Directors.

 

Audit Committee

Members (all independent directors)

Number of Meetings

5

Ms. Forbes Lieberman (Chairperson)
Ms. Romero
Ms. Taaffe

Audit Committee Financial Expert

Ms. Forbes Lieberman

Key Functions/Duties

Provides oversight on matters relating to accounting, financial reporting, internal control, auditing, and regulatory compliance.
Reviews our audited financial statements with management and the Independent Registered Public Accounting Firm, recommends whether such audited financial statements should be included in our Annual Report on Form 10-K and prepares a report to stockholders to be included in this Proxy Statement.
Reviews certain related party transactions as more specifically described under “Review of Related Party Transactions”.
Provides oversight of Anti-Pledging Policy.
Provides oversight of cybersecurity, information security and data protection and compliance.
Has the sole authority to:
retain and terminate the independent registered public accounting firm that audits our annual consolidated financial statements (the “Independent Registered Public Accounting Firm”) and
evaluate the independence of the auditors.

Compensation and Human Resources Committee Interlocks and Insider Participation

During fiscal 2023, Ms. Forbes Lieberman, Ms. Romero and Ms. Taaffe served as the sole members of the Compensation and Human Resources Committee. None of these individuals (a) were, during the fiscal year, an officer or employee of the company, (b) were formerly an officer of the company or (c) had any related party transactions with the company. No executive officer of our company served on the board of directors or the Compensation and Human Resources Committee of another company which had any of its officers or directors serving on our Compensation and Human Resources Committee or on our Board of Directors at any time during fiscal 2023.

18


Table of Contents

 

Director Nominations

Director Qualifications

While there is no single set of characteristics required to be possessed by a member of the Board of Directors, the Governance Committee will consider whether to nominate a director candidate for election by the holders of our Common Stock based on a variety of criteria as set forth in our Corporate Governance Guidelines. Under exceptional and limited circumstances, the Governance Committee may approve the candidacy of a candidate notwithstanding the foregoing criteria if the Governance Committee believes the service of such a nominee is in our best interests and those of the holders of our Common Stock.

In selecting candidates, the Governance Committee and the Board of Directors take diversity into account, seeking to ensure a representation of varied perspectives and experience, although neither the Governance Committee nor the Board of Directors has prescribed specific standards for diversity or adopted a specific diversity policy.

However, the Governance Committee considers certain items to be minimum requirements for nomination. Those requirements are: (a) a commitment to the duties and responsibilities of a director; (b) the ability to contribute meaningfully to the Board of Directors’ supervisory management of the company and its officers; and (c) an outstanding record of integrity in prior professional activities.

In addition, the Governance Committee ensures that:

at least three of the directors serving at any time on the Board of Directors are independent, as defined under the rules of the principal stock market on which our common shares are listed for trading;
all members of the Audit Committee satisfy the financial literacy requirements required under the rules of the principal stock market on which our common shares are listed for trading;
at least one of the Audit Committee members qualifies as an audit committee financial expert under the rules of the Commission; and
at least one of the independent directors has experience as a senior executive at a public company or a large private company.

In selecting a nominee or nominees for our Board of Directors, the Governance Committee may receive suggestions from many different groups including, but not limited to, the company’s current and former executive officers and directors, and such suggestions may or may not be in response to a request from the Governance Committee. As described below, the Governance Committee will also consider nominations from holders of Common Stock. From time to time, the Governance Committee may engage a third party for a fee to assist it in identifying potential director candidates.

After identifying a potential director nominee for election by the holders of our Common Stock and deciding to pursue further the potential nominee, the Governance Committee will then evaluate the potential nominee by using information collected from a variety of sources. Those sources include, but are not limited to, publicly available information, information provided by knowledgeable members of the company and information provided by the potential candidate. The Governance Committee may contact the potential nominee to determine his or her interest and willingness to serve as a director and may conduct one or more in-person or telephonic interviews with the potential candidate. The Governance Committee may contact references of the potential candidate or other members of the professional community who may have relevant knowledge of the potential candidate’s qualifications and successes. The Governance Committee may compare the potential candidate’s information to all such information collected for other potential candidates.

Class A Director Nominations

The Class A Directors listed in Proposal 1 were nominated by holders of Class A Stock in accordance with our Restated Certificate and our Bylaws. In accordance with their commitment to good governance, holders of Class A Stock have consulted with the Governance Committee on matters such as director succession planning and the process for nominating the Class A Directors. In doing so, the holders of Class A Stock consider the characteristics of such individuals with the criteria listed in “Director Qualifications” above and evaluate their specific skills among a number of factors the holders of Class A Stock consider important. As part of these discussions, the holders of Class A Stock determined to nominate the slate of Class A Directors as set forth under Proposal 1. The Governance Committee and holders of Class A Stock intend to continue these consultations regarding Class A director nominations on an ongoing basis.

19


Table of Contents

 

Nominations of Directors by Stockholders

The Governance Committee does not solicit, but will consider, nominees for director submitted by holders of our Common Stock. The Governance Committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders as it uses for all other candidates it nominates under the Governance Committee charter, although the number of shares held by the proposing stockholder and the length of time such shares have been held may be considered by the Governance Committee.

Stockholders wishing to have the Governance Committee consider a director nominee may do so by sending notice of the nominee’s name, biographical information and qualifications to:

Governance Committee

c/o Corporate Secretary

John B. Sanfilippo & Son, Inc.

1703 N. Randall Road, Elgin, Illinois 60123-7820

Under our Bylaws and applicable law, all director nominations submitted by our holders of Common Stock must provide (a) all information relating to the nominee that is required to be disclosed in a solicitation of proxies for the election of directors in an election contest, or as is otherwise required, pursuant to and in accordance with Regulation 14A under the Exchange Act and (b) the nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director, if elected. In addition, such notice of a nominee, that is submitted by the holders of Common Stock and the beneficial owner, if any, on whose behalf the nomination or proposal is made, shall include, among other matters, (a) the name and address of such stockholder, as they appear on our company’s books, and of such beneficial owner, (b) the class and number of shares of stock of our company which are owned beneficially and of record by such stockholder and such beneficial owner, (c) a representation that the stockholder is a holder of record of the stock of our company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose the nominee, and (d) a representation of whether the stockholder or the beneficial owner, if any, intends to or is part of a group which intends to (1) deliver a proxy statement and/or form of proxy to holders of at least the percentage of our company’s outstanding capital stock required to elect the nominee and/or (2) otherwise solicit proxies from stockholders in support of the nominee’s election. Our company may require any such proposed nominee to furnish such other information as it may reasonably require in order to determine the eligibility of such proposed nominee to serve as a director of our company and such other information as contained in our Bylaws.

Please see “Stockholder Proposals for the 2024 Annual Meeting” below for the notice deadlines for director nominations to be considered for inclusion in our company’s proxy materials and director nominations to be presented at the 2024 annual meeting (but not to be included in our company’s proxy materials) by holders of Common Stock.

20


Table of Contents

 

PROPOSAL 2: RATIFY THE AUDIT COMMITTEE’S APPOINTMENT OF

PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM FOR THE 2024 FISCAL YEAR

The Audit Committee has appointed PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm to audit our consolidated financial statements for the 2024 fiscal year, and to render other professional services as required, in accordance with our pre-approval policies and procedures described below. The Audit Committee and the Board of Directors, as a matter of company policy, are submitting the appointment of PricewaterhouseCoopers LLP to stockholders for ratification.

If the stockholders do not vote on an advisory basis in favor of the appointment of PricewaterhouseCoopers LLP as our company’s Independent Registered Public Accounting Firm, the Audit Committee will reconsider whether to engage PricewaterhouseCoopers LLP but may ultimately determine to engage PricewaterhouseCoopers LLP or another audit firm without re-submitting the matter to stockholders. Even if the stockholders vote in favor of the selection of PricewaterhouseCoopers LLP, the Audit Committee may, in its sole discretion, terminate the engagement of PricewaterhouseCoopers LLP and direct the appointment of another Independent Registered Public Accounting Firm at any time during the year.

Representatives of PricewaterhouseCoopers LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they so desire and are expected to be available to respond to appropriate questions.

Aggregate fees billed by our Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP, for audit services related to the most recent two fiscal years, and for other professional services billed in the most recent two fiscal years, were as follows:

 

Type of Service

 

2023

 

 

2022

 

Audit Fees(1)

 

$

1,165,000

 

 

$

1,125,000

 

Audit Related Fees

 

 

 

 

 

 

Tax Fees

 

 

 

 

 

 

All Other Fees(2)

 

 

5,400

 

 

 

6,650

 

Total(3)

 

$

1,170,400

 

 

$

1,131,650

 

 

(1)
Comprised of services for the audit of our annual financial statements, the audit of our internal control over financial reporting, reviewing of our quarterly financial statements, consents and reviewing documents to be filed with the SEC.
(2)
Comprised of the licensing of accounting technical research software.
(3)
The actual amount paid by us is different than the total amount as stated here due to the variations in the timing of the billing cycles between our company and PricewaterhouseCoopers LLP.

Reports on our Independent Registered Public Accounting Firm’s projects and services are presented to the Audit Committee on a regular basis. The Audit Committee is solely responsible for the engagement of our Independent Registered Public Accounting Firm. The Audit Committee has established pre-approval policies and procedures in order for our Independent Registered Public Accounting Firm to perform all audit services and permitted non-audit services. These pre-approval policies and procedures allow for pre-approval of certain designated services, depending on the type of service. All services not subject to general pre-approval must be specifically pre-approved by the Audit Committee. Under the pre-approval policies and procedures, the Audit Committee may delegate pre-approval responsibilities to its chairperson or any other member or members. All of the fees described above were approved by the Audit Committee pursuant to our pre-approval policies and procedures.

The Board of Directors recommends a vote “FOR” ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the 2024 fiscal year.

21


Table of Contents

 

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed with management and PricewaterhouseCoopers LLP, the company’s Independent Registered Public Accounting Firm for fiscal 2023, the company’s audited financial statements as of and for the year ended June 29, 2023. Management is responsible for the company’s financial reporting process, including maintaining a system of internal controls, and is responsible for preparing the consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). PricewaterhouseCoopers LLP is responsible for auditing those financial statements and for giving an opinion regarding the conformity of the financial statements with GAAP. Additionally, in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the Audit Committee reviewed and discussed with management, the company’s internal auditors and PricewaterhouseCoopers LLP, management’s report on the operating effectiveness of internal control over financial reporting, including PricewaterhouseCoopers LLP’s related report.

The Audit Committee also discussed with PricewaterhouseCoopers LLP those matters required to be discussed under Public Company Accounting Oversight Board standards. In addition, the Audit Committee has received and reviewed the written disclosures and letter from PricewaterhouseCoopers LLP regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence. Also, the Audit Committee has discussed with PricewaterhouseCoopers LLP the independence of PricewaterhouseCoopers LLP, including whether PricewaterhouseCoopers LLP’s independence is compatible with PricewaterhouseCoopers LLP providing non-audit services to the company. Based on the foregoing discussions and reviews, the Audit Committee is satisfied with the independence of PricewaterhouseCoopers LLP.

In reliance on the reviews and discussions described above and the report of PricewaterhouseCoopers LLP, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, the inclusion of the audited financial statements in the company’s Annual Report on Form 10-K for the year ended June 29, 2023, for filing with the Commission.

Respectfully submitted by all of the members of the Audit Committee of the Board of Directors.

Pamela Forbes Lieberman, Chairperson

Mercedes Romero

Ellen C. Taaffe

The information contained in the preceding report shall not be deemed to be “soliciting material” or to be “filed” with the Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent that we specifically incorporate it by reference in such filing.

22


Table of Contents

 

PROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

As required by SEC rules, we are providing our stockholders with an advisory, nonbinding vote to approve the compensation paid to our named executive officers, as we have described it in the Compensation Discussion and Analysis and Summary Compensation Table of this Proxy Statement.

As described in detail in the Compensation Discussion and Analysis section, the Compensation and Human Resources Committee oversees our executive compensation program. The Compensation and Human Resources Committee reviews the executive compensation program and approves the awards of executive compensation to be paid as appropriate to reflect our performance and to promote the main objectives of the program. These objectives include helping us attract, motivate, reward and retain superior leaders who are capable of creating sustained value for our stockholders and promoting a performance-based culture that is intended to align the interests of our executives with those of our stockholders.

Highlights of our program include:

Our “pay for performance” orientation. As set forth more fully in the Compensation Discussion and Analysis and related Summary Compensation Table, the company achieved above targeted levels of financial performance and therefore annual incentive compensation was awarded to our named executive officers at levels above target to reflect such performance for fiscal 2023;
Awarding restricted stock units (“RSUs”) to encourage our executives to remain with the company long-term and to align their interests with the interests of our stockholders;
Total direct compensation opportunities at target for Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr. (collectively, the “Family Management Team”) are targeted above the 50th percentile of our peers to align with our performance expectations;
Our named executive officers do not have employment agreements; and
Our named executive officers are subject to claw back arrangements requiring the executives to forfeit outstanding cash bonus awards or requiring the executives to repay previously awarded cash bonuses if the executive engages in certain misconduct or if there is a restatement, subject to certain conditions.

Last year, approximately 99.1% of votes cast in our Say on Pay vote supported the resolution.

We are asking our stockholders to indicate their continued support for the compensation paid to our named executive officers by casting a FOR vote on this proposal. We believe that the information we have provided in this Proxy Statement demonstrates that our executive compensation program was designed appropriately in light of our goals and business and is adequately working to ensure that executives’ interests are aligned with our stockholders’ interests to support long-term value creation.

You may vote for or against the following resolution, or you may abstain. This vote is not intended to address any specific item or the policies generally regarding executive compensation, but rather the overall compensation paid to our named executive officers.

While this vote is advisory and not binding on our company, the Board of Directors and the Compensation and Human Resources Committee will consider the outcome of the vote, along with other relevant factors, when considering future executive compensation decisions. For information on how our Compensation and Human Resources Committee considered the 2022 advisory vote on executive compensation, see “Response to the 2022 Advisory Vote on Executive Compensation” as set forth below. If any stockholder wishes to communicate with the Board of Directors regarding executive compensation, the Board of Directors can be contacted using the procedures outlined in “Stockholder Communications with Directors” as set forth in this Proxy Statement.

The Board of Directors recommends a vote “FOR” the advisory vote to approve executive compensation.

23


Table of Contents

 

PROPOSAL 4: ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTES ON EXECUTIVE COMPENSATION

We are also providing our stockholders with an advisory, nonbinding vote on how frequently the advisory vote on executive compensation should be presented to the stockholders, as required by SEC rules. You may vote your shares to have the advisory vote held every year (i.e. annually), two years or three years, or you may abstain. The company currently conducts annual advisory votes on executive compensation, as set forth in Proposal 3 in this Proxy Statement.

While this vote is advisory and not binding on our company, the Board of Directors and the Compensation and Human Resources Committee expect to take into account the outcome of the vote, along with other relevant factors, when considering the frequency of future advisory votes on executive compensation. If any stockholder wishes to communicate with the Board of Directors regarding executive compensation, the Board of Directors can be contacted using the procedures outlined in “Stockholder Communications with Directors” as set forth in this Proxy Statement.

After careful consideration and dialogue with our stockholders, the Board of Directors has determined that holding an advisory vote on executive compensation annually is the most appropriate policy for the company, and recommends that stockholders vote for future advisory votes on executive compensation to occur annually, which is set forth as “One Year” on the proxy card. In addition, we believe that the best way to receive stockholder feedback on our executive compensation decisions is to have annual votes.

The Board of Directors recommends a vote of “ONE YEAR” on the frequency of the advisory votes on executive compensation.

24


Table of Contents

 

PROPOSAL 5: APPROVAL OF THE JOHN B. SANFILIPPO & SON, INC. 2023 OMNIBUS INCENTIVE PLAN

On August 22, 2023, the Compensation and Human Resources Committee recommended that the Board of Directors approve the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan (the “New Omnibus Plan”) and on August 23, 2023 the Board of Directors approved the New Omnibus Plan, subject to stockholder approval at the Annual Meeting. If approved by a majority of the votes cast by holders of the shares of Common Stock and Class A Stock, voting as a single class, voting in person or by proxy at the Annual Meeting, the New Omnibus Plan will become effective as of the date of such approval (the “Effective Date”).

Purpose of the New Omnibus Plan—Equity Compensation

As discussed in the Compensation Discussion and Analysis section of this Proxy Statement, equity awards play an important role in our compensation system. Equity awards help our company remain competitive in attracting and retaining highly qualified employees upon whom, in large measure, the future success of our company depend.

The purpose of the New Omnibus Plan is to foster and promote the long-term financial success of the company by (i) motivating superior performance by means of performance-related incentives, (ii) encouraging and providing for the acquisition of an ownership interest in the company by New Omnibus Plan participants (including employees, executive officers and non-employee directors), and (iii) enabling the company to attract and retain qualified and competent persons as employees of the company and to serve as members of the Board of Directors upon whose judgment, interest, and performance are required for the successful operations of the company.

Approving the New Omnibus Plan would further these objectives by allowing the company to continue to grant equity compensation for approximately seven to ten years. If the New Omnibus Plan is not approved, the company will be unable to grant shares under the John B. Sanfilippo & Son, Inc. 2014 Omnibus Plan (the “Prior Plan” or the “2014 Omnibus Plan”) after October 29, 2024, the date on which the Prior Plan expires.

Determination of Number of Shares for the New Omnibus Plan

If the New Omnibus Plan is approved, the aggregate number of shares of Common Stock that will be available for issuance pursuant to awards under the New Omnibus Plan will be 747,065, which consists of the existing share awards available for grant under the Prior Plan and 200,000 new shares (the “Share Limit”). In setting the Share Limit, the Compensation and Human Resources Committee and the Board of Directors considered the following material factors:

Shares currently available under the Prior Plan, and how long the available shares under the Prior Plan would be expected to last;
Historical equity award granting practices, including the company's three-year average share usage rate (also known as the company's “burn rate”) and the historical equity practices over a longer period;
Expected dilution, including under various equity granting scenarios; and
Previous authorization of shares under the Prior Plan.

Each of these factors is further discussed below.

Historical Equity Granting Practices and Information on Previous Equity Usage

In setting and recommending to stockholders the number of shares authorized under the New Omnibus Plan, the Compensation and Human Resources Committee and the Board of Directors considered the number of equity awards granted under the Prior Plan in recent years and discussed the number of shares intended to be granted in fiscal 2024 and beyond, assuming different scenarios. In fiscal 2021, 2022 and 2023, the company granted to employees and non-employee directors 55,404, 53,524, and 64,351, respectively, of the shares authorized under the Prior Plan.

The Compensation and Human Resources Committee and the Board of Directors also considered the company’s three-year average burn rate is lower than the industry thresholds established by certain major proxy advisory firms. Due to significant ownership of Class A Stock by the CEO and COO and former CFO, and the respective groups to which they belong, the company has been conservative in the granting of equity in recent years to such individuals, while reasonable in granting equity to other executive officers and non-employee directors. In fiscal 2023, we granted equity under the Prior Plan to 55 employees and 6 non-employee directors.

Based on historical granting practices and the recent trading prices of the Common Stock, the New Omnibus Plan is currently expected to cover equity awards for approximately seven to ten years. The Prior Plan had 1,000,000 shares authorized for issuance in 2014 and the Prior Plan will expire by its 10-year term before all of its authorized shares will be issued.

25


Table of Contents

 

If the New Omnibus Plan is approved, no further awards will be granted under the Prior Plan. In addition, per the terms of the New Omnibus Plan, all of the existing shares under the Prior Plan will be subsumed into and as a part of the Share Limit under the New Omnibus Plan (other than shares reflecting awards that are currently outstanding under the Prior Plan). As a result, 547,065 shares that were authorized for issuance under the Prior Plan, but not granted to participants, will be transferred to the New Omnibus Plan. The New Omnibus Plan will contain 200,000 new shares which were not previously authorized for issuance under the Prior Plan but will be authorized for issuance under the New Omnibus Plan. If all 747,065 shares of stock were granted, the total dilution would be approximately 8%, based on the number of shares of our Common Stock outstanding. As of September 5, 2023, 8,973,031 shares of our Common Stock were outstanding. Under the Prior Plan there are 130,947 restricted stock units outstanding.

Summary Description of the New Omnibus Plan

The following is a summary of the principal features of the New Omnibus Plan. The summary is not a complete description of all the terms of the New Omnibus Plan and is qualified in its entirety by reference to the complete text of the New Omnibus Plan, which is attached to this Proxy Statement as Annex A. To the extent there is a conflict between this summary and the actual terms of the New Omnibus Plan, the terms of the New Omnibus Plan will govern.

Eligibility and Award Types

The New Omnibus Plan authorizes the following types of awards to be made to employees, officers or non-employee directors of the company as designated by the Compensation and Human Resources Committee:

Restricted stock and restricted stock units, which represent the right to receive shares of Common Stock in the future, each of which are subject to certain restrictions and conditions set by the Compensation and Human Resources Committee and also as set forth in the New Omnibus Plan.
Performance shares, which represent the right to receive shares of Common Stock in the future based on the achievement of one or more performance goals over a specified performance period. The number of performance shares earned over a performance period may vary based on the level of achieved performance.
Performance units, which represent the right to receive shares of Common Stock or cash in the future based on the achievement of one or more performance goals over a specified performance period. The ultimate award earned over a performance period may vary based on the level of achieved performance.
Stock options, which give the holder the right to purchase shares of Common Stock at a specified price during specified time periods. The exercise price of an option granted under the New Omnibus Plan may not be less than the fair market value of the Common Stock on the date of grant. Stock options granted under the New Omnibus Plan have a maximum term of ten years. Stock options may be in the form of nonqualified stock options or incentive stock options.
Stock appreciation rights, or SARs, which give the holder the right to receive the excess, if any, of the fair market value of one share of Common Stock on the date of exercise, over the grant price of the SAR. The grant price of a SAR may not be less than the fair market value of the Common Stock on the date of grant. SARs granted under the New Omnibus Plan have a maximum term of ten years.
Other stock-based awards, in the discretion of the Compensation and Human Resources Committee, including unrestricted stock grants.
Cash-based awards, as established by the Compensation and Human Resources Committee.

All awards will be evidenced by a written award agreement between the company and the participant. Dividends and dividend equivalent payments on any award may be granted subject to the terms and conditions set forth under the New Omnibus Plan and any applicable award agreement under the New Omnibus Plan. However, no dividends or dividend equivalents may be granted on awards of stock options and SARs. In addition, no dividends or dividend equivalents will be paid on performance shares and performance-based restricted stock and RSUs unless the applicable performance goals are satisfied.

Repricing/Cash-Out of Awards Prohibited without Stockholder Approval

The company may not implement any of the following repricing or cash-out programs without obtaining stockholder approval: (i) a reduction in the option price or grant price of any previously granted stock option or SAR, (ii) a cancellation of any previously granted stock option or SAR in exchange for another stock option or SAR with a lower exercise price or grant price, respectively or (iii) a cancellation of any previously granted stock option or SAR in exchange for cash or another award if the option price of the stock option or the grant price of the SAR exceeds the fair market value of a share of Common Stock on the date of such cancellation, in each case other than in connection with a change in control or the capitalization adjustment provisions in the New Omnibus Plan.

26


Table of Contents

 

Share Counting Under the New Omnibus Plan

The number of shares of Common Stock reserved for issuance under the New Omnibus Plan will be reduced by one share for each share of Common Stock that is subject to a share-based award granted under the New Omnibus Plan, subject to certain terms and conditions set forth in more detail in the New Omnibus Plan.

Any shares of Common Stock related to an award granted under the Prior Plan or New Omnibus Plan that on or after the Effective Date terminates by expiration, forfeiture, cancellation or otherwise without the issuance of the shares of Common Stock, are settled in cash in lieu of shares, or are exchanged with the Compensation and Human Resources Committee’s permission, prior to the issuance of shares, for awards not involving shares of Common Stock shall be available again for grant under the New Omnibus Plan.

Any shares of Common Stock tendered (by either actual delivery or attestation) on or after the Effective Date (i) to pay the option price of an option granted under the Prior Plan or New Omnibus Plan or (ii) to satisfy tax withholding obligations associated with an award granted under the Prior Plan or New Omnibus Plan, shall not become available again for grant under the New Omnibus Plan.

Any shares of Common Stock that were subject to an SAR granted under the Prior Plan or New Omnibus Plan that were not issued upon the exercise of such SAR on or after the Effective Date shall not become available again for grant under the New Omnibus Plan.

Limitation on Awards

The New Omnibus Plan contains the following limitations and restrictions (“Annual Award Limits”):

The total number of shares of Common Stock with respect to which options or SARs may be granted in any calendar year to any participant may not exceed 500,000 shares (this limit applies separately with respect to each type of award).
For awards of restricted stock, RSUs, performance shares or other stock-based awards that are intended to qualify as performance-based compensation: (i) the total number of shares of Common Stock that may be granted in any calendar year to any participant may not exceed 250,000 shares (this limit applies separately to each type of award) and (ii) the maximum amount that may be paid to any participant for awards that are payable in cash or property other than Common Stock in any calendar year is $5,000,000.

In addition to the Annual Award Limits, the maximum number of shares granted under the New Omnibus Plan, along with any cash fees paid by the Company, to any non-employee director during a fiscal year for service as a non-employee director, will not (subject to certain exceptions) exceed $600,000 in total value (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes). This includes the value of any awards that are received in lieu of all or a portion of any annual cash retainers or other similar cash-based payments and excludes, for this purpose, the value of any dividend equivalents, if any, paid pursuant to any award granted in a previous fiscal year.

Administration

Subject to any limitations or delegations as set forth in the New Omnibus Plan, the New Omnibus Plan will be administered by the Compensation and Human Resources Committee. The Compensation and Human Resources Committee will have the authority to, among other things, make awards; designate participants; determine the types of awards to be granted to each participant and the number, terms and conditions thereof; establish or revise any rules, regulations, guidelines and procedures as it may deem advisable; prescribe forms of award agreements; and make any rules, interpretations, and any and all other decisions and determinations that may be required under the New Omnibus Plan.

Treatment of Awards on Certain Events

Change in Control

The Compensation and Human Resources Committee shall determine the treatment of outstanding awards prior to a “change in control”, except that to the extent the Compensation and Human Resources Committee takes no action (and except as otherwise expressly provided for in an award agreement or as required to comply with Section 409A of the Code), then the following shall apply:

all options and SARs then outstanding shall become immediately vested and fully exercisable, notwithstanding any provision therein for the exercise in installments;
all restrictions and conditions of all restricted stock then outstanding shall be deemed satisfied as of the date of the change in control;
all restricted stock units and dividend equivalent payments shall become vested and deemed notwithstanding that the applicable retention cycle or restriction conditions shall not have been completed or met, and shall be settled pro rata,

27


Table of Contents

 

based on the proportion of the applicable period during which the participant was employed, in cash, shares or a combination thereof as provided for under the applicable award agreement or otherwise settled within 30 days of the change in control (except to the extent that payment must be made pursuant to its original schedule in order to comply with Section 409A of the Code); and
any award subject to performance goals, including performance stock or performance stock units, shall become vested and deemed earned or satisfied at the greater of target or actual performance, notwithstanding that the applicable performance cycle, retention cycle or restriction conditions shall not have been completed or met, and shall be settled pro rata, based on the proportion of the applicable performance period during which the participant was employed, in cash, shares or a combination thereof as provided for under the applicable award agreement or otherwise settled within 30 days of the change in control (except to the extent that payment must be made pursuant to its original schedule in order to comply with Section 409A of the Code).

A change in control will be deemed to occur upon (i) the consummation of a merger or consolidation of the company into another entity or similar transaction; (ii) the sale, transfer or other disposition of all of the company’s assets; (iii) certain changes in the composition of our Board of Directors, and (iv) any transaction as a result of which any person or group of related persons acquires, directly or indirectly, at least thirty (30) percent of the voting securities of the company.

However, the Compensation and Human Resources Committee may elect prior to a change in control, that in the event of a change in control, that all or any portion of an award, with no requirement of uniform treatment:

shall be assumed or an equivalent award be substituted by the successor corporation in any change in control transaction, or a parent or subsidiary of such successor corporation;
shall be canceled or forfeited and settled in cash (except where such action would cause an excise tax to be payable pursuant to Section 409A of the Code); or
with respect to any unexercised portion of an option or SAR, shall be canceled following the time permitted to exercise the award.

Termination of Service Events

Death or Disability

If a participant’s termination of service is due to death or disability then: (i) options and SARs that are not exercisable and as to which such ability to exercise depends solely on the satisfaction of a service obligation by the participant to the company shall immediately become fully exercisable and (ii) the participant’s then-outstanding awards (other than options and SARs), that are not vested and as to which vesting depends solely on the satisfaction of a service obligation by the participant to the company shall become fully vested and shall be settled in cash, shares or a combination thereof as soon as practicable following such termination of service but no later than sixty days thereafter.

Retirement

If a participant’s termination of service is due to retirement, then: (i) options and SARs that are not exercisable and as to which such ability to exercise depends solely on the satisfaction of a service obligation by the participant to the company shall immediately become fully exercisable and (ii) the participant’s other then-outstanding awards (other than options and SARs), that are not vested and as to which vesting depends solely on the satisfaction of a service obligation by the participant to the company shall become fully vested and shall be settled in cash, shares or a combination thereof as soon as practicable following such termination of service but no later than sixty days thereafter.
In order for a participant to be eligible for the benefits described in this “Retirement” section, the participant must provide notice of his or her intent to retire at least 365 days in advance of the date of retirement and meet the age and service conditions applicable for “Retirement” as defined in the New Omnibus Plan. If the participant does not do so, then the Compensation and Human Resources Committee shall have the discretion to determine the treatment of the participant’s awards.

Involuntary or Voluntary Termination of Service, Other than Retirement

If a participant’s termination of service is due to voluntary or involuntary termination of service, except in the case of retirement as outlined above in “Retirement”, then the participant’s then-outstanding awards that are not exercisable or vested shall be immediately forfeited.

28


Table of Contents

 

Termination For Cause

A participant’s termination of service for “cause” shall result in the forfeiture of the participant’s outstanding and unexercisable options and SARs and any outstanding and unvested restricted stock, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards granted to the participant as of the date immediately preceding the participant’s termination of service.

Adjustments

In the event of any significant corporate event or transaction detailed in the New Omnibus Plan, the Compensation and Human Resources Committee, in order to prevent dilution or enlargement of participants’ rights under the New Omnibus Plan, shall substitute or adjust, as applicable, the number and kind of shares of Common Stock that may be issued under the New Omnibus Plan or under particular forms of awards, the number and kind of shares of Common Stock subject to outstanding awards, the option price or grant price applicable to outstanding awards, the Annual Award Limits, and other value determinations applicable to outstanding awards. The Compensation and Human Resources Committee, in its discretion, shall determine the methodology or manner of making such substitution or adjustment. In addition to the adjustments discussed above, the Compensation and Human Resources Committee, in its sole discretion, may make such other adjustments or modifications in the terms of any awards that it deems appropriate to reflect any significant corporate event or transaction.

Forfeiture Events

Awards under the New Omnibus Plan will be subject to any compensation clawback policy that the company may adopt from time to time that is applicable to the participant or as required by applicable law.

Termination and Amendment

If the New Omnibus Plan is approved at the 2023 Annual Meeting of Stockholders, it will terminate 10 years from the Effective Date.

Subject to the limitations set forth in the New Omnibus Plan, the Board of Directors may amend, modify or terminate the New Omnibus Plan, however, no amendment of the New Omnibus Plan shall be made without stockholder approval if stockholder approval required by applicable law, regulation or the rules of the NASDAQ stock exchange. No termination, amendment, or suspension of the New Omnibus Plan may adversely affect in any material way any award previously granted under the New Omnibus Plan without the written consent of the award recipient subject to certain exceptions. These exceptions permit the Board of Directors or Compensation and Human Resources Committee to amend outstanding awards to adjust for the occurrence of certain unusual or non-recurring events and to conform to legal requirements with the written consent of the award recipient.

Certain U.S. Tax Effects

The following discussion is limited to a summary of the U.S. federal income tax effects relating to the grant, exercise and vesting of awards under the New Omnibus Plan and the subsequent sale of Common Stock acquired under the New Omnibus Plan. This discussion does not address all aspects of the United States federal income tax consequences of participating in the New Omnibus Plan that may be relevant to participants in light of their personal investment or tax circumstances and does not discuss any state, local or non-United States tax consequences of participating in the New Omnibus Plan. The tax consequences of awards may vary depending upon the particular circumstances, and it should be noted that the income tax laws, regulations and interpretations thereof change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local, and foreign tax laws.

Stock Options

There will be no federal income tax consequences to the optionee or to the company upon the grant of a nonqualified stock option under the New Omnibus Plan. When the optionee exercises a nonqualified stock option, however, he or she will recognize ordinary income in an amount equal to the excess of the fair market value of the Common Stock received upon exercise over the exercise price, and the company expects that it will be allowed a corresponding deduction. Any gain that the optionee realizes when he or she later sells or disposes of the nonqualified option shares will be short-term or long-term capital gain, depending on how long the shares were held.

A participant generally will have no taxable income upon exercise of an incentive stock option, except that the alternative minimum tax may apply. Subject to certain statutory restrictions, gain realized upon a disposition of the company’s Common Stock received pursuant to the exercise of an incentive stock option will generally be taxed as long-term capital gain if (i) the participant holds the shares for at least two years after the date of grant and one year after the date of exercise and (ii) at all times during the period beginning on the option grant date and ending on the day three months before the option is exercised the participant remains our employee or an employee of our subsidiary (the “Holding Period Requirement”). The company will not be entitled to a deduction with

29


Table of Contents

 

respect to the exercise of an incentive stock option, except as discussed below. Generally, if the participant has not satisfied the Holding Period Requirement described above, the participant will recognize ordinary income upon the disposition of the Common Stock equal to the excess of the fair market value of the Common Stock at the time the option was exercised over the exercise price (but not in excess of the gain realized on the sale). The balance of the realized gain, if any, will generally be capital gain. The company will generally be entitled to a deduction to the extent the participant recognizes ordinary income.

Stock Appreciation Rights

A participant receiving a stock appreciation right will not recognize income, and the company will not be allowed a tax deduction, at the time the award is granted. When the participant exercises the stock appreciation right, the amount of cash and the fair market value of any shares of Common Stock received will be ordinary income to the participant and the company expects that it will be allowed a corresponding federal income tax deduction at that time.

Restricted Stock

Unless a participant makes an election to accelerate recognition of income to the date of grant as described below, the participant will not recognize income, and the company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is subject to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the Common Stock as of that date (less any amount he or she paid for the stock), and the company will be allowed a corresponding federal income tax deduction at that time. If the participant files an election under Section 83(b) of the Code within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and the company will be allowed a corresponding federal income tax deduction at that time. Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to his or her election under Section 83(b) of the Code.

Stock Units (Performance and Restricted)

A participant will not recognize income, and the company will not be allowed a tax deduction, at the time a stock unit award is granted. Stock unit awards are typically restricted stock units or performance units. Upon receipt of shares of Common Stock (or the equivalent value in cash) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the Common Stock or other property as of that date, and the company will be allowed a corresponding federal income tax deduction at that time.

Cash-Based Awards

A participant will not recognize income, and the company will not be allowed a tax deduction, at the time a cash-based award is granted (for example, when the performance goals are established). Upon receipt of cash in settlement of the award, a participant will recognize ordinary income equal to the cash received, and the company will be allowed a corresponding federal income tax deduction at that time.

Tax Code Section 409A

If an award is subject to Section 409A of the Code (which relates to nonqualified deferred compensation plans), and if the requirements of Section 409A are not met, the taxable events as described above could apply earlier than described, and could result in the imposition of additional taxes and penalties. All awards that comply with the terms of the New Omnibus Plan, however, are intended to be exempt from the application of Section 409A of the Code or meet the requirements of Section 409A in order to avoid such early taxation and penalties.

Benefits to Named Executive Officers and Others

No awards have been granted under the New Omnibus Plan. If the New Omnibus Plan is approved, awards will be granted at the discretion of the Compensation and Human Resources Committee. Accordingly, future benefits under the New Omnibus Plan are not determinable at this current time.

The Board of Directors recommends a vote “FOR” the approval of the John B. Sanfilippo & Son, Inc. 2023 Omnibus Incentive Plan.

30


Table of Contents

 

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Compensation of Directors

Our non-employee director compensation program is designed to be competitive with our peer companies and to align the interests of our non-employee directors with the long-term interests of our stockholders. Our director compensation program is reviewed annually by the Compensation and Human Resources Committee using external data derived from (among other things) a review of our peer company practices as conducted by the independent compensation consultant to such committee. Our directors are compensated for their services with respect to each Board Year. We define “Board Year” for director compensation purposes as the time between annual stockholder meetings.

The Compensation and Human Resources Committee last reviewed our non-employee director compensation program in October 2022 and based on such review by the Compensation and Human Resources Committee, including input from our independent compensation consultant, the annual equity grant to our non-employee directors (an “Outside Director”) was increased by $5,000 to $89,000.

In addition to such annual equity grant of $89,000, current compensation for our Outside Directors consists of the following cash components:

Annual Board cash retainer of $74,000;
Annual cash retainers for the Audit Committee Chairperson and Compensation and Human Resources Committee Chairperson of $20,000;
Annual cash retainer for the Governance Committee Chairperson of $15,000;
Annual cash retainer for each member of each committee of the Board (other than the chairperson) of $9,000; and
Annual cash retainer for the Lead Independent Director of the Board of $15,000.

Under the 2014 Omnibus Incentive Plan, each Outside Director is also eligible to participate in (and receive equity-based director compensation under) the 2014 Omnibus Plan. On November 2, 2022, the Compensation and Human Resources Committee approved a grant of $89,000 in RSUs to each of our six Outside Directors, with a grant date of November 17, 2022. These RSUs are scheduled to vest on November 2, 2023, and once vested, they can be paid to the director in an equal number of shares of Common Stock upon vesting or become payable in an equal number of shares of Common Stock after the director ceases being a member of the Board of Directors.

Directors are also reimbursed for their reasonable expenses incurred in attending such meetings. Directors who are current employees of our company receive no additional compensation for their services as directors.

31


Table of Contents

 

Director Compensation for Fiscal Year 2023

Name

 

Fees Earned
or Paid in
Cash ($)

 

 

Stock Awards
($)
(1)

 

 

Total ($)

 

Pamela Forbes Lieberman(2)

 

 

115,000

 

 

 

84,979

 

 

 

199,979

 

Mercedes Romero(3)

 

 

101,000

 

 

 

84,979

 

 

 

185,979

 

James J. Sanfilippo(4)

 

 

74,000

 

 

 

84,979

 

 

 

158,979

 

John E. Sanfilippo(5)

 

 

74,000

 

 

 

84,979

 

 

 

158,979

 

Lisa A. Sanfilippo(6)

 

 

74,000

 

 

 

84,979

 

 

 

158,979

 

Ellen C. Taaffe(7)

 

 

122,500

 

 

 

84,979

 

 

 

207,479

 

Michael J. Valentine(8)

 

 

37,000

 

 

 

 

 

 

37,000

 

 

$

597,500

 

 

$

509,874

 

 

$

1,107,374

 

(1)
As noted above, the Compensation and Human Resources Committee approved a grant of $89,000 of RSUs for each Outside Director. Based on the closing price ($83.19) of our Common Stock on the date of grant (November 17, 2022), each Outside Director was awarded 1,070 RSUs. Pursuant to applicable SEC reporting rules, we have reported the 1,070 RSUs at the grant date fair value under FASB ASC Topic 718, which may differ from the methodology we use to determine the value the of RSUs to award each Outside Director.
(2)
The “Fees Earned or Paid in Cash” column for Ms. Pamela Forbes Lieberman consists of annual retainer fees of $74,000, committee chairperson fees of $27,500, and committee member fees of $13,500. As of June 29, 2023, Ms. Pamela Forbes Lieberman had 1,070 RSUs outstanding, all of which were granted for fiscal 2023 service.
(3)
The “Fees Earned or Paid in Cash” column for Ms. Mercedes Romero consists of annual retainer fees of $74,000 and committee member fees of $27,000. As of June 29, 2023, Ms. Mercedes Romero had 1,070 RSUs outstanding, all of which were granted for fiscal 2023 service.
(4)
The “Fees Earned or Paid in Cash” column for Mr. James J. Sanfilippo consists of annual retainer fees of $74,000. As of June 29, 2023, Mr. James J. Sanfilippo had 1,070 RSUs outstanding, all of which were granted for fiscal 2023 service.
(5)
The “Fees Earned or Paid in Cash” column for Mr. John E. Sanfilippo consists of annual retainer fees of $74,000. As of June 29, 2023, Mr. John E. Sanfilippo had 1,070 RSUs outstanding, all of which were granted for fiscal 2023 service.
(6)
The “Fees Earned or Paid in Cash” column for Ms. Lisa A. Sanfilippo consists of annual retainer fees of $74,000. As of June 29, 2023, Ms. Lisa A. Sanfilippo had 1,070 RSUs outstanding, all of which were granted for fiscal 2023 service.
(7)
The “Fees Earned or Paid in Cash” column for Ms. Ellen C. Taaffe consists of annual retainer fees of $74,000, committee chairperson fees of $27,500, committee member fees of $13,500, and lead independent director fees of $7,500. As of June 29, 2023, Ms. Ellen C. Taaffe had 10,119 RSUs outstanding, including the 1,070 RSUs granted for fiscal 2023 service and 9,049 RSUs that are vested but deferred.
(8)
Mr. Michael J. Valentine became a non-employee director upon his retirement as an employee of the company on January 23, 2023. The “Fees Earned or Paid in Cash” column for Mr. Michael J. Valentine consists of annual retainer fees of $37,000, which were for his service from his retirement from the company to the end of the 2023 fiscal year. As of June 29, 2023, Mr. Michael J. Valentine had 14,605 RSUs that are vested but deferred. Mr. Michael J. Valentine did not receive an equity award in the 2023 fiscal year for his service as a director.

32


Table of Contents

 

Compensation Discussion and Analysis

The following is a discussion and analysis of the compensation paid to the following persons (collectively, the “named executive officers”) during the 2023 fiscal year:

Jeffrey T. Sanfilippo, our Chief Executive Officer and Chairman,
Frank S. Pellegrino, our Chief Financial Officer, Executive Vice President, Finance and Administration and Treasurer,
Jasper B. Sanfilippo, Jr., our Chief Operating Officer, President and Assistant Secretary,
Shayn E. Wallace, our former Executive Vice President, Sales and Marketing,
Julia A. Pronitcheva, our Senior Vice President, Human Resources, and
Michael J. Valentine, our former Group President.

Mr. Valentine retired as Group President on January 23, 2023. Mr. Wallace’s position was eliminated and his last day of employment was June 29, 2023, the final day of our fiscal year.

Executive Summary

Our company’s fiscal 2023 financial results improved over a successful fiscal 2022. In fiscal 2023, our company achieved record net income of $62.9 million, a 1.7% increase from fiscal 2022, driven primarily by an increase in net sales due to a 6.5% increase in the weighted average selling price per pound. As a result, our earnings per diluted share increased by 1.3% to a record $5.40 in fiscal 2023 from $5.33 for fiscal 2022. Our financial performance during fiscal 2023 also allowed us to pay dividends of $54.9 million in fiscal 2023 and a special cash dividend of $1.20 per share and a regular cash dividend of $0.80 per share to our stockholders during the first quarter of fiscal 2024.

Our compensation programs are designed to reward our executive officers for our company’s performance, and in particular the economic value added to our business. In fiscal 2023, we continued to utilize a number of compensation measures to reinforce the link between our company’s performance and the pay of our executive officers. Due to our strong operating performance in fiscal 2023, the executive officers earned cash incentive compensation above target as set by the Compensation and Human Resources Committee under the company’s Sanfilippo Value Added Plan, or “SVA Plan”. In addition, we continued our practice of evaluating our executive officers’ individual performance when setting their salaries and considered our overall performance and the current holdings of equity by certain named executive officers in awarding equity.

We believe that our stockholders support the design and implementation of our pay for performance compensation programs. For fiscal 2022, approximately 99.1% of votes cast in our advisory vote to approve executive compensation supported the compensation paid to our named executive officers.

The Role of the Compensation and Human Resources Committee

The Compensation and Human Resources Committee of the Board of Directors administers our company’s executive compensation program. In that regard, the responsibilities of the Compensation and Human Resources Committee, among others, are as follows:

Oversee the establishment of annual, long-term and other goals and objectives relevant to the compensation of the Chief Executive Officer and other executive officers;
Evaluate the performance of the Chief Executive Officer and other executive officers;
Review and approve the form and amount of compensation for the Chief Executive Officer and other executive officers;
Review, from time to time, market comparisons of the compensation of the Chief Executive Officer and other executive officers;
Review and recommend to the Board of Directors for approval retirement, health and welfare and other benefit plans, policies and arrangements for the employees of our company;
Review and approve any employment agreements, retirement agreements, severance and separation agreements, or similar agreements, plans or policies, covering the executive officers of the Company;
Review and recommend to the Board of Directors for approval all equity-related, incentive and other performance-related compensation plans; and

33


Table of Contents

 

Evaluate the risk and reward with respect to incentive compensation arrangements.

The Role of Management

With respect to all areas of compensation, the Compensation and Human Resources Committee regularly communicates with management. For example, the Compensation and Human Resources Committee invites certain members of our senior management team to be present for a significant portion of every Compensation and Human Resources Committee meeting. This allows the Compensation and Human Resources Committee to solicit management’s input regarding various compensation matters, such as management’s views regarding the company’s performance, salary decisions, performance of the executive officers of the company, form and amount of equity compensation and the components of the SVA Plan. The Compensation and Human Resources Committee then meets in executive session without management to deliberate and decide on certain compensation matters as it sees fit. The Compensation and Human Resources Committee also regularly receives and considers information related to the compensation of our hourly and other employees.

The Role of the Independent Consultant

In fiscal 2023, the Compensation and Human Resources Committee utilized Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent compensation consultant to provide guidance regarding the compensation of our named executive officers and our Outside Directors. Pearl Meyer provided no other services to our company in fiscal year 2023 other than those directly related to compensation strategy. The Compensation and Human Resources Committee determined that the work of Pearl Meyer did not raise any conflict of interest issues.

Our Compensation Philosophy

Our company’s compensation philosophy is designed to align executive compensation with our company’s objectives, management initiatives and business financial performance. In making decisions with respect to executive compensation, the Board of Directors and the Compensation and Human Resources Committee apply the following key principles. Total compensation should:

Be comparable to or exceed that of our peers in order to attract and retain key executives who are critical to our success;
Reward executives for long-term strategic management and the creation of stockholder value;
Support a performance-oriented environment that rewards company and individual achievement; and
Balance the costs and benefits associated with both (a) short-term and long-term compensation and (b) cash and non-cash compensation, to achieve continuous improvement in financial performance and enhance employee retention and recruiting.

Overview of Fiscal 2023 Executive Compensation Program

Our total compensation program for the named executive officers and other executive officers in fiscal 2023 consisted of both cash compensation and equity-based compensation in the form of RSUs. Each executive officer’s annual cash compensation is comprised of a base salary and an opportunity to earn an annual incentive award under the SVA Plan. The SVA Plan rewards participants for year-over-year improvement in our net operating profit after tax minus a capital charge. In addition, to be competitive in the marketplace we offer standard benefits available to all salaried employees, provide life insurance for all named executive officers, the ability to defer compensation under a Non-Qualified Deferred Compensation Plan (“NQDC”), and provide for participation in our Supplemental Retirement Plan (“SERP”) for certain named executive officers.

Operating Principles. The Compensation and Human Resources Committee broadly considered the factors more specifically set forth below when setting compensation for our named executive officers in fiscal 2023.

34


Table of Contents

 

Management Philosophy. The Family Management Team has established an executive committee comprised of the named executive officers, as well as certain other executives (the “Executive Committee”). The members of this Executive Committee work together to manage our company’s affairs, which includes meeting regularly to discuss various aspects of our company’s operations and strategic goals. The Family Management Team adopted this collaborative approach to management for several reasons, including (a) the Family Management Team’s belief that input from the Executive Committee members is essential to our company’s success and (b) the Family Management Team’s belief that the familial relationship between the Family Management Team members lends itself naturally to a collaborative approach to management. The Compensation and Human Resources Committee supports the Family Management Team’s overall team-oriented approach to managing our company. Accordingly, at the Family Management Team’s request, the Compensation and Human Resources Committee generally determined that the primary elements of compensation for Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr. should be equal for fiscal 2023.

Industry Comparison Group. When setting compensation for the named executive officers for fiscal 2023, the Compensation and Human Resources Committee compared elements of compensation (base salary, incentive compensation and equity grants) against the compensation reported for the named executive officers of a select group of companies engaged in the food and beverage business, which are generally similar in size to our company (the “Industry Comparison Group”), as a reference in setting overall compensation competitiveness. For fiscal 2023, the Industry Comparison Group was comprised of 16 publicly traded companies with annual revenues between approximately $449 million and $2.2 billion. The Compensation and Human Resources Committee’s independent consultant developed the Industry Comparison Group. For fiscal 2023, the Industry Comparison Group consisted of the following companies:

 

B&G Foods, Inc.

Lancaster Colony Corporation

The Boston Beer Company, Inc.

Landec Corporation

Cal-Maine Foods, Inc.

National Beverage Corp.

Calavo Growers, Inc.

Seneca Foods Corporation.

The Chefs’ Warehouse, Inc.

The Simply Good Foods Company

Farmer Bros. Co.

SunOpta, Inc

Hostess Brands, Inc

Tootsie Roll Industries, Inc.

J & J Snack Foods Corp.

Utz Brands, Inc.

 

In addition to the Industry Comparison Group, the independent consultant also provided additional information from certain broad-based compensation surveys to facilitate comparison and provide additional data points. This survey data served to supplement the Industry Comparison Group.

In setting compensation, the Compensation and Human Resources Committee recognized that, among other things, the roles of the named executive officers in the Industry Comparison Group may not fully align with the roles and responsibilities of our named executive officers due to our collaborative approach to management, the tenure of our named executive officers and our unique business needs. As a result, the Compensation and Human Resources Committee took a holistic review of compensation and did not mechanically attempt to benchmark the compensation of our Family Management Team.

Individual Performance. Notwithstanding the Family Management Team’s collaborative approach to management, the Compensation and Human Resources Committee considered the individual performance of each member of the Family Management Team, as well as the other executive officers, when it set and awarded compensation for fiscal 2023.

For fiscal 2023, Pearl Meyer reviewed the various components of compensation for our named executive officers, as well as the proposed changes in such compensation, and advised the Compensation and Human Resources Committee regarding how the changes compared to the Industry Comparison Group as well as the broader market.

When determining pay levels for the Family Management Team, the Compensation and Human Resources Committee examines the competitive market data and individual performance of the two Family Management Team officers and deliberates in executive session without any members of management present. The Compensation and Human Resources Committee specifically reviews and considers the significant equity holdings of the Sanfilippo Group in making compensation decisions for the Family Management Team, including the pay mix between cash and equity compensation. When determining pay levels for the other executive officers that are not members of the Family Management Team, the Compensation and Human Resources Committee considers the competitive external market data, individual performance and the recommendations from the Family Management Team.

35


Table of Contents

 

Direct Compensation

Base Salary

The Compensation and Human Resources Committee approves the level of base salary for named executive officers, including the Chief Executive Officer, and the other executive officers. When determining the base salaries of our named executive officers and executive officers for fiscal 2023, the Compensation and Human Resources Committee considered the following factors:

The Family Management Team’s collaborative approach to management;
The Compensation and Human Resources Committee’s historical practices, including the salaries paid to our named executive officers and executive officers during the immediately preceding fiscal year;
The salaries paid to the named executive officers of the companies in the Industry Comparison Group and other compensation survey data;
The individual performance, roles and responsibilities and experience and tenure of our named executive officers and executive officers;
The input and recommendations from the Family Management Team regarding the performance, functions and responsibilities of other executive officers; and
The input from the Compensation and Human Resources Committee’s independent consultant, including information regarding general executive salary trends and survey information.

In connection with setting the base salaries for fiscal 2023, the Compensation and Human Resources Committee, with the input from the Family Management Team for all other executive officers, reviewed the individual performance and roles and responsibilities of our company’s management. The reviews consisted of the Compensation and Human Resources Committee members’ observations of the Chief Executive Officer and other executive officers’ performance throughout the fiscal year and specifically with respect to each individual officer’s (a) roles and functions, and the fulfillment thereof and (b) positive contribution to our overall performance. The Compensation and Human Resources Committee also considered its desire to set the Family Management Team’s direct compensation above the 50th percentile of the Industry Comparison Group, provided such adjustments were supported by the overall long-term performance of our company and the individual performance and responsibilities of each member of the Family Management Team.

Based upon all of the foregoing factors, our Compensation and Human Resources Committee approved a 4.7% increase in the salaries paid to Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr. for fiscal 2023. The uniform increase to the base salary of Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr. were approved in part because of the Family Management Team’s collaborative approach to management outlined above and the Compensation and Human Resources Committee’s desire to orient the base salaries of the Family Management Team above the 50th percentile of the Industry Comparison Group for fiscal 2023. The Compensation and Human Resources Committee also considered the sustained positive financial and operating performance of our company in approving the salary increases for the Family Management Team, which included the increases for Michael J. Valentine of 4.7%, Frank S. Pellegrino of 8.0%, and Shayn E. Wallace of 4.5%. While the Compensation and Human Resources Committee did not specifically approve Julia A. Pronitcheva’s base salary for fiscal year 2023 due to the timing of her promotion during the year, the Compensation and Human Resources Committee reviewed her salary and comparison to a survey group for internal and external equity purposes.

After taking these increases into account, base salaries for the Family Management Team were, in the aggregate, modestly above the 50th percentile for the Industry Comparison Group. Michael J. Valentine's base salary was slightly above the 50th percentile for the Industry Comparison Group. Frank S. Pellegrino’s and Shayn E. Wallace’s base salaries were slightly below the 50th percentile of a survey group, and Julia A. Pronitcheva's base salary was slightly below the 50th percentile of a survey group.

Annual Incentive Compensation—Sanfilippo Value-Added Plan

As described in greater detail below, the general structure of the SVA Plan results in a cash payment to each participant calculated as follows:

 

Participant’s

Salary

X

Participant’s

Target Salary

Percentage

X

SVA

Improvement

Multiple

=

SVA Payment

Declared

The SVA Plan rewards plan participants with cash incentive compensation for year-over-year improvement in economic profit. Economic profit is our net operating profit, as adjusted for share based compensation and net rental and miscellaneous expense, after taxes minus a charge for capital. The charge for capital is determined by multiplying the weighted average cost of capital (9%) by the

36


Table of Contents

 

invested capital in the business(adjusted net working capital plus net property, plant, and equipment and goodwill), excluding any excess cash and cash equivalents in excess of $2 million (such year-over-year improvement hereinafter referred to as “SVA”), as illustrated below:

 

SVA

=

Net operating profit after taxes (NOPAT)

minus

9% Capital Charge

Overall SVA improvement occurs when the net operating profit, as adjusted, after taxes less the capital charge increases on a year-over-year basis. Actual incentive compensation will be determined by comparing the actual SVA improvement amount relative to SVA improvement goals set for the fiscal year. To better align goals and incentive awards between all participants, the SVA Plan does not contain an individual performance component.

The Compensation and Human Resources Committee believes that using year-over-year SVA improvement in the SVA Plan motivates the plan participants to improve our company’s financial performance and more effectively manage its working and fixed capital by encouraging the productive use of capital resources relative to their cost. For example, the Compensation and Human Resources Committee, from time to time, receives information from the Family Management Team on the impact of certain business decisions on SVA performance and how the Family Management Team uses SVA in business planning. The Compensation and Human Resources Committee also believes that continuous SVA improvement correlates with stockholder returns over time. In addition, our company management has solicited feedback from significant stockholders and such stockholders have supported our use of the SVA Plan. For fiscal 2023, the SVA Plan participants included members of the Executive Committee and approximately 270 other employees. Almost all of our salaried and many hourly employees participate in the SVA Plan, and management thus believes the SVA Plan helps to broadly align incentive compensation with our company’s performance.

SVA Targets and Payments

The Compensation and Human Resources Committee, with the assistance of Pearl Meyer, its independent consultant, and the Family Management Team, established the SVA improvement goals for fiscal 2023. The Compensation and Human Resources Committee set three parameters for the SVA payout: the Threshold, or Minimum goal of SVA improvement, the Target goal and the Maximum goal.

Achieving at or below the Threshold, or Minimum goal of SVA improvement, would result in a 0% payout, or no payout of the participant’s target award.
Achieving the Target goal of SVA improvement would result in a 100% payout, or a 1x multiplier of the participant’s target award.
Achieving at or above the Maximum goal of SVA improvement would result in a 200% payout, or a 2x multiplier of the participant’s target award.

In order to achieve a payout under the SVA Plan, SVA improvement must exceed the Threshold, or Minimum goal of SVA improvement. SVA improvement amounts that fall in between the Threshold, Target, and Maximum goals are interpolated between each respective amount. For example, an SVA improvement level which was exactly in between the Target and Maximum goals would result in a 150% payout, or 1.5x multiplier of the participant’s target award. Each participant receives the same SVA improvement multiplier. The SVA Improvement Multiple cannot exceed the Maximum, or 2x multiplier, even if SVA improvement exceeds the Maximum goal. Because of the structure of the SVA Plan, the previous year’s performance impacts the target-setting process and ultimately the SVA improvement for the next fiscal year.

The goals for SVA improvement and actual fiscal 2023 results are shown below:

 

Fiscal 2023 SVA Improvement Goals, Results, and Payouts

Threshold/Minimum Goal

 

$

(2,200,000

)

 

0%, or 0x multiplier

Target Goal

 

$

800,000

 

 

100%, or 1x multiplier

Maximum Goal

 

$

3,800,000

 

 

200%, or 2x multiplier

Fiscal 2023 Result

 

$

1,833,161

 

 

134%, or 1.34x multiplier

Fiscal 2023 SVA Payout = 134%, or 1.34x of the participant’s target award

 

For fiscal 2023, the Compensation and Human Resources Committee established each SVA Plan participant’s target award by multiplying the participant’s salary paid in fiscal 2023 by a set percentage, or “Target Salary Percentage.” For fiscal 2023, each SVA Plan participant had a Target Salary Percentage ranging from 5% to 110% of their base salary. The Compensation and Human Resources Committee determined the Target Salary Percentage based on recommendations from management as to the participant’s overall responsibilities and title and information from the Industry Comparison Group and other survey data. For fiscal 2023, each member of the Family Management Team received a 110% Target Salary Percentage, Michael J. Valentine received a 110% Target

37


Table of Contents

 

Salary Percentage, Frank S. Pellegrino received a 100% Target Salary Percentage, Shayn E. Wallace received a 75% Target Salary Percentage, and Julia A. Pronitcheva received a 60% Target Salary Percentage. Applying the compensation philosophy discussed above, the target award for each of the named executive officers was above the 50th percentile of the market competitive benchmarks.

The table below summarizes the SVA Payments for the 2023 fiscal year for our named executive officers, based on the respective salaries paid, Target Salary Percentages and SVA Improvement Multiple:

 

 

 

 

 

 

 

Fiscal 2023 SVA Payout

 

 

 

 

 

 

 

 

 

Officer

 

Fiscal 2023 Salary Paid

 

X

 

Target Salary Percentage

 

X

 

SVA Improvement Multiple

 

=

 

SVA Payment Declared

 

Jeffrey T. Sanfilippo

 

$

789,461

 

 

 

 

110

%

 

 

 

1.34

 

 

 

$

1,167,139

 

Jasper B. Sanfilippo, Jr.

 

$

789,461

 

 

 

 

110

%

 

 

 

1.34

 

 

 

$

1,167,139

 

Michael J. Valentine

 

$

463,287

 

 

 

 

110

%

 

 

 

1.34

 

 

 

$

684,924

 

Frank S. Pellegrino

 

$

448,432

 

 

 

 

100

%

 

 

 

1.34

 

 

 

$

602,692

 

Shayn E. Wallace

 

$

370,583

 

 

 

 

75

%

 

 

 

1.34

 

 

 

$

373,548

 

Julia A. Pronitcheva(1)

 

$

300,672

 

 

 

 

60

%

 

 

 

1.34

 

 

 

$

220,926

 

(1)
Ms. Julia A. Pronitcheva was promoted during our 2023 fiscal year and her target salary percentage increased. The SVA payment declared is a blend of her previous and current target salary percentages.

Long-Term Incentives—Equity Awards Under the 2014 Omnibus Plan

As described under “Security Ownership of Certain Beneficial Owners and Management”, the Family Management Team, and the “groups” to which they belong, have a large ownership interest in our company. The Compensation and Human Resources Committee recognizes that the Sanfilippo Group's large equity holdings in our company have resulted in the alignment of the Family Management Team’s interests with those of our stockholders. As a result, the Compensation and Human Resources Committee’s philosophy with respect to both the total amount of equity granted and equity as a compensation component has historically been more conservative as compared to our peers in the Industry Comparison Group. Thus, grants of equity awards to the Family Management Team were below the 50th percentile of the Industry Comparison Group in fiscal 2023. The grant of equity award to Michael J. Valentine was below the 50th percentile of the Industry Comparison Group. Grants of equity awards to Frank S. Pellegrino, Shayn E. Wallace, and Julia A. Pronitcheva all approximated the 50th percentile of the market benchmarks in fiscal 2023. In granting the number of RSUs, the Compensation and Human Resources Committee also considered the Board of Directors’ equity grant cap policy for the 2023 fiscal year. This policy limited the number of awards to 20,000 for any one individual and 250,000 in the aggregate to all individuals for the 2023 fiscal year.

In deciding the amount of RSUs to grant in fiscal 2023, the Compensation and Human Resources Committee considered the responsibilities of each executive officer and our financial and operating performance in the prior fiscal year. In addition, for fiscal 2023, the Compensation and Human Resources Committee specifically considered the company’s conservative use of equity compensation and the Family Management Team’s current pay positioning relative to the Industry Comparison Group. As part of these considerations, the Compensation and Human Resources Committee granted Jeffrey T. Sanfilippo and Jasper B. Sanfilippo, Jr. $600,000 of RSUs, which translated into 7,212 RSUs granted. Mr. Michael J. Valentine was granted $400,000 of RSUs, which translated into 4,808 RSUs granted. Frank S. Pellegrino, Shayn E. Wallace, and Julia A. Pronitcheva, after input from management and deliberation by the Compensation and Human Resources Committee, were awarded $250,000, $225,000, and $150,000 of RSUs, which translated into 3,005, 2,705, and 1,803 RSUs granted, respectively.

The Compensation and Human Resources Committee typically approves the equity awards to be granted for any given fiscal year at the Compensation and Human Resources Committee meeting held in conjunction with the annual meeting of stockholders. Annual equity award grant dates are set on the 10th business day after the grant approval date. This date was chosen for administrative, compliance and governance reasons. For the fiscal 2023 RSU award grant, the Compensation and Human Resources Committee approved the grant on November 2, 2022, with a grant date of November 17, 2022. Pursuant to applicable SEC reporting rules, we have reported in the Summary Compensation Table and Grants of Plan-Based Awards Table below the applicable number of RSUs granted to each named executive officer at the grant date fair value under FASB ASC Topic 718, which may differ from the methodology we use to determine the value of RSUs we award each named executive officer.

38


Table of Contents

 

Stock Ownership Guidelines and Anti-Hedging Policy

Generally, members of our Family Management Team, executive officers and Outside Directors must hold the following number of shares of our Common Stock, Class A Stock or outstanding RSUs (“Eligible Shares”) before any shares of Common Stock can be sold:

Family Management Team and Chief Financial Officer: the lesser of 20,000 Eligible Shares or Eligible Shares with a fair market value equal to five times the executive’s annual base salary.
Other Executive Officers: the lesser of 10,500 Eligible Shares or Eligible Shares with a fair market value equal to two times the executive’s annual base salary.
Outside Directors: the lesser of 10,500 Eligible Shares or Eligible Shares with a fair market value equal to four times the director’s annual cash retainer.

In addition to the company’s Stock Ownership Guidelines, our company has implemented an Anti-Hedging Policy which prohibits our executive officers and directors from engaging in certain hedging transactions with respect to our Common Stock or Class A Stock. In accordance with its regular review of equity ownership by executive officers and directors, the Compensation and Human Resources Committee determined that all executive officers and directors have met or are on track to meet stock ownership requirements by their respective dates in accordance with the company’s Stock Ownership Guidelines.

All Other Compensation

In addition to the direct compensation described above, our company offers certain other benefits to our executive officers, including the named executive officers, which consist of life insurance, company-sponsored retirement plans and limited perquisites.

Life Insurance We provide our named executive officers with life insurance.

Company-Sponsored Retirement Plans Our company offers retirement plans for eligible employees, as follows:

401(k) Plan. The company’s 401(k) Plan is a tax-qualified defined-contribution retirement plan. All non-union employees who are 21 years of age or older, including the named executive officers, are automatically enrolled in the plan and eligible to participate and receive a company match in our 401(k) Plan. All participants in our 401(k) Plan may receive company matching contributions of 100% of the employee’s contribution up to 3% of an employee’s salary and 50% of the next 2% of an employee’s salary; however, the match may not exceed 4% of an employee’s total salary. Our company contributed $66,662 as matching funds under the 401(k) Plan for fiscal 2023 for the named executive officers as a group, which are set forth in more detail in the “All Other Compensation for Fiscal Year 2023” table below.

SERP. On August 2, 2007 the former Compensation, Nominating and Governance Committee (“CNG Committee”) approved a restated SERP for certain named executive officers and key employees of our company (the “SERP Participants”) and their beneficiaries, if applicable. The restated SERP changed the plan adopted on August 25, 2005 to, among other things, clarify certain actuarial provisions and incorporate new Internal Revenue Service (“IRS”) requirements. The current SERP Participants are Mathias A. Valentine (as a former employee), Michael J. Valentine (as a former employee), the members of the Family Management Team and James A. Valentine, Senior Technical Advisor and Director. Jasper B. Sanfilippo was also a SERP Participant (as a former employee) until the time of his death in January 2020, at which time his SERP benefits passed to his spouse. The purpose of the SERP is to provide unfunded, non-qualified deferred compensation benefits to participants upon retirement, disability or death. The Compensation and Human Resources Committee believes that the SERP is a useful tool in motivating employees that are key to our company’s success and helps to ensure that the benefits provided by our company are competitive with the market. The current plan participants were chosen by our CNG Committee (prior to the creation of a separate Compensation and Human Resources Committee) based upon numerous factors, including the participant’s seniority, role within our company, and demonstrated commitment and dedication to our company. Participants with at least five years of employment with us are eligible to receive monthly benefits from the SERP after separating from service with our company, provided such participant’s employment is not terminated for “cause” (as defined in the SERP). For more information about the SERP please see “Company-Sponsored Retirement Plans” below.

39


Table of Contents

 

Non-Qualified Deferred Compensation Plan. Beginning in fiscal 2023, we offered the NQDC to provide executives with the opportunity to accumulate assets for retirement on a tax-deferred basis. Participants in the NQDC can defer up to 80% of their base salary and up to 100% of performance-based compensation. The compensation deferred under the NQDC is credited with earnings and losses as determined by the rate of return of reference investments selected by the participants. Participants are fully vested in their respective deferrals and earnings. We may also make discretionary contributions, which vest three years from the crediting date, at full vesting age, or other events as defined and described in the NQDC. We invest in corporate owned life insurance contracts on the lives of designated individuals that are held in a Rabbi Trust (“Trust”) to fund the NQDC obligations. The Trust is the owner and beneficiary of such insurance contracts. Our promise to pay amounts deferred under the NQDC is an unsecured obligation. Participant’s benefits can be paid out as a lump sum or in annual installments over a term of up to 10 years.

Perquisites Our company provides a minimal amount of perquisites to the named executive officers, including members of the Family Management Team. The perquisites provided in fiscal 2023 were personal use of company vehicles or a direct car allowance. We have provided additional information on perquisites in the table entitled “All Other Compensation for Fiscal Year 2022.”

Retirement Agreement with Michael J. Valentine: On January 23, 2023, we entered into a Retirement Agreement with Michael J. Valentine, our former Group President. Under the terms of the Retirement Agreement, Mr. Valentine retired from the company effective January 23, 2023. In exchange for being bound by customary release, non-solicit, non-disparagement and confidentiality provisions, and consideration of other factors, Mr. Valentine received a company-paid COBRA continuation coverage for eighteen months after his retirement from the company. Mr. Valentine was paid his fiscal 2023 SVA bonus as set forth in the Summary Compensation Table below and received retirement treatment for his unvested RSUs granted under the 2014 Omnibus Plan.

Separation Agreement with Shayn E. Wallace: On June 27, 2023, we entered into a Separation and General Release Agreement (the Separation Agreement”) with Shayn E. Wallace, our former Executive Vice President of Sales and Marketing. Under the terms of the Separation Agreement, Mr. Shayn E. Wallace was separated from the company effective June 29, 2023. In exchange for being bound by customary release, non-solicit, non-solicit, non-disparagement and confidentiality provisions, and consideration of other factors, Mr. Shayn E. Wallace received a cash severance payment of $310,000, which is equivalent to approximately 43 weeks of pay, and a payment of $8,490 for the COBRA continuation of coverage for six months after his separation with the company. Mr. Shayn E. Wallace was paid his fiscal 2023 SVA bonus as set forth in the Summary Compensation Table below and forfeited 7,409 of his unvested RSUs granted under the 2014 Omnibus Plan in fiscal year 2021, 2022, and 2023.

Response to the 2022 Advisory Vote on Executive Compensation

In 2022, the stockholders of our company had the opportunity, pursuant to SEC regulations, to have an advisory vote to approve the compensation paid to the named executive officers. The results of the vote were as follows:

33,106,548 votes were “For” the compensation paid to our named executive officers;
276,229 votes were “Against” the compensation paid to our named executive officers; and
9,356 votes abstained.

Based on the above results, approximately 99.1% of votes cast at the 2022 annual meeting of stockholders supported the compensation paid to our named executive officers. The Compensation and Human Resources Committee considered these results in light of our company’s corporate structure and determined that no significant changes were required to our company’s compensation program as a result of the vote.

40


Table of Contents

 

Policy With Respect to Qualifying Compensation for Tax Deductibility and Accounting Matters

Prior to the enactment of the U.S. Tax Cuts and Jobs Act on December 22, 2017 (the “TCJA”), our company’s ability to deduct compensation paid to covered employees (as defined in the Section 162(m) of the Internal Revenue Code (“Section 162(m)”)), including certain named executive officers, for tax purposes was generally limited to $1.0 million annually. However, this $1.0 million limitation did not apply to “performance-based” compensation if certain conditions were satisfied as set forth in more detail in Section 162(m). The TCJA repealed the performance-based compensation exemption, effective for taxable years beginning January 1, 2018, and expanded the definition of covered employees whose compensation is subject to the annual $1.0 million deduction limitation to cover compensation paid to the CFO plus any individual who has previously been a covered employee, even if the individual no longer holds the position. Compensation paid to our named executive officers in excess of $1.0 million since the 2019 fiscal year and later fiscal years is generally not tax deductible even if performance-based. In addition, further changes in tax laws (and interpretations of those laws), as well as other factors beyond our company’s control, may affect the deductibility of any other compensation paid to our employees. Although the Section 162(m) exemption is no longer available, the Compensation and Human Resources Committee intends to continue to use selected performance-based metrics in our compensation programs because it believes that it aligns the interests of our stockholders with the interests of our named executive officers.

The Compensation and Human Resources Committee, as necessary in its judgment, reviews projections of the estimated accounting (pro forma expense) and tax impacts of all material elements of the executive compensation program. Generally, the accounting expenses are accrued over the requisite service period of the particular pay element (generally equal to the performance period) and our company realizes a tax deduction upon the payment to or realization by the executive. We account for our equity awards under FASB ASC Topic 718.

41


Table of Contents

 

Compensation of Executive Officers

Summary Compensation Table

The Summary Compensation Table provides the total compensation for the last three completed fiscal years for each of our company’s named executive officers.

Summary Compensation Table for Fiscal Year 2023

 

Name and Principal
Position(*)

 

Year

 

 

Salary(1)

 

 

Stock
Awards
(2)

 

 

Non-
Equity
Incentive
Compensation
(3)

 

 

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(4)

 

 

All
Other
Compensation
(5)

 

 

Total(6)

 

Jeffrey T. Sanfilippo

 

 

2023

 

 

$

790,846

 

 

$

537,150

 

 

$

1,167,139

 

 

$

317,658

 

 

$

19,008

 

 

$

2,831,801

 

Chief Executive Officer

 

 

2022

 

 

$

764,313

 

 

$

382,517

 

 

$

610,837

 

 

$

 

 

$

18,660

 

 

$

1,776,327

 

 

 

2021

 

 

$

684,650

 

 

$

350,611

 

 

$

1,305,937

 

 

$

1,156,502

 

 

$

17,350

 

 

$

3,515,050

 

Jasper B. Sanfilippo, Jr.

 

 

2023

 

 

$

790,846

 

 

$

518,038

 

 

$

1,167,139

 

 

$

93,921

 

 

$

30,379

 

 

$

2,600,323

 

Chief Operating Officer

 

 

2022

 

 

$

764,313

 

 

$

382,517

 

 

$

610,837

 

 

$

 

 

$

29,136

 

 

$

1,786,803

 

 

 

2021

 

 

$

684,650

 

 

$

350,611

 

 

$

1,305,937

 

 

$

793,205

 

 

$

29,386

 

 

$

3,163,789

 

Michael J. Valentine

 

 

2023

 

 

$

421,225

 

 

$

395,170

 

 

$

684,924

 

 

$

 

 

$

173,361

 

 

$

1,674,680

 

Former Group President

 

 

2022

 

 

$

727,690

 

 

$

373,219

 

 

$

582,244

 

 

$

 

 

$

29,136

 

 

$

1,712,289

 

 

 

2021

 

 

$

684,650

 

 

$

383,707

 

 

$

1,305,937

 

 

$

1,394,810

 

 

$

30,086

 

 

$

3,799,190

 

Frank S. Pellegrino

 

 

2023

 

 

$

449,724

 

 

$

215,849

 

 

$

602,692

 

 

$

 

 

$

22,101

 

 

$

1,290,366

 

Chief Financial Officer

 

 

2022

 

 

$

417,307

 

 

$

191,259

 

 

$

272,385

 

 

$

 

 

$

20,942

 

 

$

901,893

 

Executive Vice President

 

 

2021

 

 

$

343,309

 

 

$

162,188

 

 

$

445,744

 

 

$

 

 

$

19,990

 

 

$

971,231

 

Finance and Administration

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shayn E. Wallace

 

 

2023

 

 

$

371,204

 

 

$

194,300

 

 

$

373,548

 

 

$

 

 

$

20,195

 

 

$

959,247

 

Former Executive Vice President

 

 

2022

 

 

$

361,944

 

 

$

170,049

 

 

$

197,455

 

 

$

 

 

$

19,678

 

 

$

749,126

 

Sales and Marketing

 

 

2021

 

 

$

341,423

 

 

$

162,188

 

 

$

444,202

 

 

$

 

 

$

21,410

 

 

$

969,223

 

Julia A. Pronitcheva

 

 

2023

 

 

$

302,386

 

 

$

129,509

 

 

$

220,926

 

 

$

 

 

$

21,032

 

 

$

673,853

 

Senior Vice President