Company: KHC
Filing Date: 2025-03-28
Form Type: DEF 14A
Source: 0001308179-25-000266
Chunk: 26

Company: Kraft Heinz Co
Filing Date: 2025-03-28
Form: DEF 14A
Chunk 26
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0 Achieved | 2019 Achieved |
| 48%                                                 | 120%          | 96%           | 94%           | 120%          | 48%           |

FINANCIAL MEASURES PBP Adjusted Operating Incomeis defined as net income/(loss)before interest expense, other expense/(income), provision for/(benefit from) income taxes; in addition to these adjustments, we exclude, when they occur, the impact of foreign currency fluctuations by maintaining the exchange rates established in our Annual Operating Plan (“AOP”), restructuring activities, deal costs, unrealized gains/(losses) on commodity hedges, impairment losses, and certain non-ordinary course legal and regulatory matters. In cases where zone achievement is 100% or lower, we adjust for higher or lower incentive compensation compared with what we established in our AOP. PBP Organic Net Salesis defined as total external revenue minus discounts and allowances. It also excludes, when they occur, the impact of foreign currency fluctuations by maintaining the exchange rates established in our AOP. PBP Free Cash Flow Conversionis defined as Free Cash Flow divided by Adjusted Net Income/(Loss). Free Cash Flow is defined as net cash provided by/(used for) operating activities less capital expenditures. It excludes, where they occur, the impact of foreign currency employee goals throughout the organization. We may adjust the threshold, target, and maximum metrics to incorporate the impact of acquisitions and divestitures. In 2024, we adjusted the threshold, target, and maximum for the divestiture of a business in Russia. INDIVIDUAL PERFORMANCE SCORE The foundation of each employee’s individual performance score is our Management by Objectives (“MBO”) process. At the beginning of each year, the Compensation Committee establishes a series of individual performance goals, or MBOs, that are based upon our corporate strategy, which are then cascaded throughout the organization. First, the Compensation Committee establishes MBOs for our CEO. Then, in consultation with the Compensation Committee, the CEO establishes corresponding MBOs for each of his direct reports, including the NEOs, which are further cascaded down throughout the organization. This cascading process enables us to drive initiatives by aligning individual employee goals throughout the organization. Each NEO has an MBO comprised of multiple goals or objectives. For each goal, there are one or more key performance indicators (KPIs), which are the quantitative or qualitative metrics used to track achievement of the goal. The individual performance multiplier ranges from