Company: LW
Filing Date: 2025-08-07
Form Type: DEF 14A
Source: 0001679273-25-000060
Chunk: 54

Company: Lamb Weston Holdings, Inc.
Filing Date: 2025-08-07
Form: DEF 14A
Chunk 54
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 Compensation Program, Philosophies and Objectives,” our executive compensation program is designed to promote sustained long-term growth and profitability and stockholder value creation. Target pay opportunities and the mix of pay elements are intended to be market-competitive and aligned with best practices in executive compensation. Performance measures are selected to support our growth strategy and reflect the fundamental financial measures of successful Company performance and long-term value creation. In selecting the financial measures used in our incentive plans, the Compensation Committee reviews measures used by our peer companies as well as general industry data and considers various measures and options. With input from its independent compensation consultant, the Compensation Committee analyzes alternative financial measures for the incentive plans, weighing multiple factors including alignment to our evolving business strategy and financial objectives, ability to incentivize management and ability to measure performance during the applicable performance period. Following its analysis, the Compensation Committee selects financial measures that it believes would achieve its compensation philosophy of tying pay to performance. By tying a significant portion of our NEOs’ compensation to these fundamental financial measures, we believe the program aligns the Company’s short- and long-term objectives with long-term stockholder value creation.

Actual compensation earned by our NEOs has been aligned with performance over time, not only because payouts on incentive compensation require achievement of rigorous performance goals, but also because the long-term component is 100% equity-based and therefore directly aligned with our absolute total shareholder returns, both positive and negative.

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As shown in the chart below, our AIP payouts have generally trended with annual growth in Adjusted EBITDA and net sales, with the exception of fiscal year 2024, when the Company did not pay executives an annual bonus despite record high Adjusted EBITDA and net sales. Since the Company's spin-off from Conagra Brands, Inc. in November 2016 (the "spin-off"), the Company's Adjusted EBITDA and net sales have grown 7% and 9%, respectively, on a compounded, annualized basis, and average bonus payouts have been 100% of target.

As shown in the chart below, PSA payouts under our LTIP have trended with annual growth in Adjusted EBITDA and total shareholder return (TSR). Since the spin-off, Adjusted EBITDA has grown 7% on a compounded, annualized basis, and average PSA payouts were 97% of target. A $100 investment in our common stock as of our spin-off (November 9, 2016) was worth $