BROWN FORMAN CORP, DEF 14A filed on 6/23/2023
Proxy Statement (definitive)
v3.23.2
Cover
 12 Months Ended
Apr. 30, 2023
Document Information [Line Items]  
Document Type DEF 14A
Amendment Flag false
Entity Information [Line Items]  
Entity Registrant Name Brown-Forman Corporation
Entity Central Index Key 0000014693
v3.23.2
Pay vs Performance Disclosure
 12 Months Ended
Apr. 30, 2023
USD ($)
Apr. 30, 2022
USD ($)
Apr. 30, 2021
USD ($)
Pay vs Performance Disclosure [Table]      
Pay vs Performance [Table Text Block]
Pay versus Performance Table
The table below shows the total compensation for our PEO and the average of our
non-PEO
NEOs (as set forth in the Summary Compensation Table on page 50), the CAP for our PEO and the average for our
non-PEO
NEOs, our absolute TSR, the TSR of our peer group over the same period, our net income, our underlying net sales growth and underlying operating income growth for the last three fiscal years.
 
  FISCAL 2023 PAY VS PERFORMANCE
 
  Year
  
 


 
Summary
Compensation
Table Total for
PEO
(1)
 
 
 
 
  
 

 
Compensation
Actually Paid
to PEO
(3)
 
 
 
  
 


 
Average Summary
Compensation
Table Total for Non-
PEO NEOs
(2)
 
 
 
 
  
 


 
Average
Compensation
Actually Paid to
Non-PEO NEOs
(3)
 
 
 
 
   
 
B-F TSR
(4)
 
   
 
Peer Group
TSR
(4)
 
 
   
 

 
Net
Income (in
millions)
 
 
 
   
 

 
Underlying
Net Sales
Growth
 
 
 
   
 


 
Underlying
Operating
Income
Growth
 
 
 
 
  2023
     $ 9,651,262          $ 6,771,842          $ 2,059,136            $ 1,752,991             $ 109            $ 146            $ 783            11%            8%      
  2022
     8,364,936          4,476,542          1,567,977            1,271,730             112            143            838            13%            15%      
  2021
     9,112,109          11,798,204          2,072,337            2,709,953             124            123            903            6%            4%      
 
(1)
The PEO for each of fiscal 2021, 2022, and 2023 was Mr. Whiting.
(2)
The NEOs in fiscal 2023 were Ms. Cunningham, Mr. Hinrichs, Mr. Hamel, and Ms. Hawley. The NEOs in fiscal 2022 were Ms. Cunningham, Mr. Hinrichs, Mr. Hamel, Ms. Hawley, and Jane Morreau. The NEOs in fiscal 2021 were Ms. Morreau, Mr. Hinrichs, Mr. Hamel, and Ms. Hawley.
(3)
SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine “compensation actually paid” as reported in the Pay versus Performance Table. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a valuation calculated under applicable SEC rules. In general, “compensation actually paid” is calculated as summary compensation table total compensation adjusted to (a) include the value of any pension benefit (or loss) attributed to the past fiscal year, including on account of any amendments adopted during such year; and (b) include the fair market value of equity awards as of April 30, 2023 or, if earlier, the vesting date (rather than the grant date) and factor in dividends and interest accrued with respect to such awards. There was no prior service cost adjustment with respect to any pension plans; no awards were granted and vested in the same year; no awards granted in any prior fiscal year failed to meet applicable vesting conditions during the covered fiscal year; there was no change in fair value of outstanding, vested equity granted in prior years; and there were no dividends or other earnings paid on stock or option awards in the covered fiscal year prior to the vesting date that are not otherwise reported.
  
The following table detail the applicable adjustments:
 
PENSION VALUE AND EQUITY AWARD ADJUSTMENTS
 
  Year
   
 

 
Summary
Compensation
Table Total
 
 
 
   
 
Deduct change in
pension value
 
 
  
 

 
Add Pension
Service Cost
Adjustment
 
 
 
   
 

 
Deduct Summary
Compensation Table
Stock & Option Awards
 
 
 
  
 

 
Add Year-End Value of

Unvested Equity Granted in
Covered Fiscal Year
 
 
 
   
 

 
Add Change in Value
of Unvested Equity
Granted in Prior Years
 
 
 
  PEO
   
 
 
 
   
 
 
 
  
 
 
 
   
 
 
 
  
 
 
 
   
 
 
 
  2023
      $ 9,651,262        $ (1,095,610 )      $  375,220        $ (3,862,409 )      $ 2,773,884        $ (1,070,505)    
  2022
      8,364,936        (811,189 )      386,185        (3,371,539 )      2,908,042        (2,999,893)    
  2021
      9,112,109        (1,006,606 )      376,123        (3,595,862 )      4,457,842        (2,454,598)    
  Average
Non-PEO
NEOs
 
   
 
 
 
  2023
      2,059,136        (143,794 )      92,310        (500,230 )      359,253        (113,684)    
  2022
      1,567,977        –       112,527        (349,638 )      301,569        (60,704)    
  2021
      2,072,337        (297,275 )      157,787        (486,612 )      620,239        643,478    
 
(4)
TSR is calculated on a cumulative basis measured from the market close on April 30, 2020, through the end of the indicated fiscal year.
   
Company Selected Measure Name Underlying Net Sales Growth    
Named Executive Officers, Footnote [Text Block] The NEOs in fiscal 2023 were Ms. Cunningham, Mr. Hinrichs, Mr. Hamel, and Ms. Hawley. The NEOs in fiscal 2022 were Ms. Cunningham, Mr. Hinrichs, Mr. Hamel, Ms. Hawley, and Jane Morreau. The NEOs in fiscal 2021 were Ms. Morreau, Mr. Hinrichs, Mr. Hamel, and Ms. Hawley.    
Peer Group Issuers, Footnote [Text Block] TSR is calculated on a cumulative basis measured from the market close on April 30, 2020, through the end of the indicated fiscal year.    
PEO Total Compensation Amount $ 9,651,262 $ 8,364,936 $ 9,112,109
PEO Actually Paid Compensation Amount $ 6,771,842 4,476,542 11,798,204
Adjustment To PEO Compensation, Footnote [Text Block]
PENSION VALUE AND EQUITY AWARD ADJUSTMENTS
 
  Year
   
 

 
Summary
Compensation
Table Total
 
 
 
   
 
Deduct change in
pension value
 
 
  
 

 
Add Pension
Service Cost
Adjustment
 
 
 
   
 

 
Deduct Summary
Compensation Table
Stock & Option Awards
 
 
 
  
 

 
Add Year-End Value of

Unvested Equity Granted in
Covered Fiscal Year
 
 
 
   
 

 
Add Change in Value
of Unvested Equity
Granted in Prior Years
 
 
 
  PEO
   
 
 
 
   
 
 
 
  
 
 
 
   
 
 
 
  
 
 
 
   
 
 
 
  2023
      $ 9,651,262        $ (1,095,610 )      $  375,220        $ (3,862,409 )      $ 2,773,884        $ (1,070,505)    
  2022
      8,364,936        (811,189 )      386,185        (3,371,539 )      2,908,042        (2,999,893)    
  2021
      9,112,109        (1,006,606 )      376,123        (3,595,862 )      4,457,842        (2,454,598)    
  Average
Non-PEO
NEOs
 
   
 
 
 
  2023
      2,059,136        (143,794 )      92,310        (500,230 )      359,253        (113,684)    
  2022
      1,567,977        –       112,527        (349,638 )      301,569        (60,704)    
  2021
      2,072,337        (297,275 )      157,787        (486,612 )      620,239        643,478    
    
Non-PEO NEO Average Total Compensation Amount $ 2,059,136 1,567,977 2,072,337
Non-PEO NEO Average Compensation Actually Paid Amount $ 1,752,991 1,271,730 2,709,953
Adjustment to Non-PEO NEO Compensation Footnote [Text Block]
PENSION VALUE AND EQUITY AWARD ADJUSTMENTS
 
  Year
   
 

 
Summary
Compensation
Table Total
 
 
 
   
 
Deduct change in
pension value
 
 
  
 

 
Add Pension
Service Cost
Adjustment
 
 
 
   
 

 
Deduct Summary
Compensation Table
Stock & Option Awards
 
 
 
  
 

 
Add Year-End Value of

Unvested Equity Granted in
Covered Fiscal Year
 
 
 
   
 

 
Add Change in Value
of Unvested Equity
Granted in Prior Years
 
 
 
  PEO
   
 
 
 
   
 
 
 
  
 
 
 
   
 
 
 
  
 
 
 
   
 
 
 
  2023
      $ 9,651,262        $ (1,095,610 )      $  375,220        $ (3,862,409 )      $ 2,773,884        $ (1,070,505)    
  2022
      8,364,936        (811,189 )      386,185        (3,371,539 )      2,908,042        (2,999,893)    
  2021
      9,112,109        (1,006,606 )      376,123        (3,595,862 )      4,457,842        (2,454,598)    
  Average
Non-PEO
NEOs
 
   
 
 
 
  2023
      2,059,136        (143,794 )      92,310        (500,230 )      359,253        (113,684)    
  2022
      1,567,977        –       112,527        (349,638 )      301,569        (60,704)    
  2021
      2,072,337        (297,275 )      157,787        (486,612 )      620,239        643,478    
    
Compensation Actually Paid vs. Total Shareholder Return [Text Block] In fiscal 2023, our cumulative TSR was 109% compared to peer group TSR of 146% at the end of the three-year period (with variation by individual year). The PEO and
non-PEO
CAP decreased from fiscal 2021 to fiscal 2022 and then increased from fiscal 2022 to fiscal 2023, which reflects the significance of underlying net sales growth and underlying operating income growth as key drivers of our compensation program. 		   
Compensation Actually Paid vs. Net Income [Text Block] Our reported net income decreased over the three-year period, while our PEO and
non-PEO
CAP decreased from fiscal 2021 to fiscal 2022 and increased from fiscal 2022 to fiscal 2023, reflecting the emphasis on underlying net sales growth and underlying operating income growth, rather than net income, which is not part of our executive compensation program. 		   
Compensation Actually Paid vs. Company Selected Measure [Text Block] Underlying net sales growth and underlying operating income growth increased significantly during fiscal 2022 (+13% and +15%, respectively, compared to fiscal 2021) and increased again in fiscal 2023 (+11% and +8%, respectively, compared to fiscal 2022). As noted above, our PEO and
non-PEO
CAP decreased from fiscal 2021 to fiscal 2022 and then increased from fiscal 2022 to fiscal 2023. The reason for the variation between our CAP and company selected performance metrics is that we previously evaluated our short-term incentive performance relative to a peer group; however, we changed our executive compensation program for fiscal 2023 to measure underlying net sales growth and underlying operating income growth compared to an absolute target. 		   
Total Shareholder Return Vs Peer Group [Text Block] In fiscal 2023, our cumulative TSR was 109% compared to peer group TSR of 146% at the end of the three-year period (with variation by individual year). The PEO and
non-PEO
CAP decreased from fiscal 2021 to fiscal 2022 and then increased from fiscal 2022 to fiscal 2023, which reflects the significance of underlying net sales growth and underlying operating income growth as key drivers of our compensation program. 		   
Tabular List [Table Text Block]
The list below shows the most important metrics used by the Committee to link CAP to company performance.
 
 
  Underlying Net Sales
(1)
Growth
 
    We consider underlying net sales growth and underlying operating income growth to be the most important financial measures used to link pay with performance in fiscal 2023 because they (1) are used to determine 70% of the short-term cash incentive award payout for the company’s chief executive officer, who is our principal executive officer (PEO), and other NEOs, and (2) are used on a relative basis to determine 100% of the long-term incentive cash award payout for the PEO and other NEOs.
 
  Underlying Operating Income
(2)
Growth
 
 
  Relative TSR
 
 
  Stock Appreciation
 
 
(1)
“Underlying net sales” is not derived in accordance with GAAP. Please refer to Appendix A of this Proxy Statement for information about our use of
non-GAAP
measures.
(2)
“Underlying operating income” is not derived in accordance with GAAP. Please refer to Appendix A of this Proxy Statement for information about our use of
non-GAAP
measures.
   
Total Shareholder Return Amount $ 109 112 124
Peer Group Total Shareholder Return Amount 146 143 123
Net Income (Loss) $ 783,000,000 $ 838,000,000 $ 903,000,000
Company Selected Measure Amount 11 13 6
PEO Name Mr. Whiting    
Measure [Axis]: 1      
Pay vs Performance Disclosure [Table]      
Measure Name Underlying Net Sales(1) Growth    
Non-GAAP Measure Description [Text Block] “Underlying net sales” is not derived in accordance with GAAP. Please refer to Appendix A of this Proxy Statement for information about our use of
non-GAAP
measures. 		   
Measure [Axis]: 2      
Pay vs Performance Disclosure [Table]      
Other Performance Measure Amount 8 15 4
Measure Name Underlying Operating Income(2) Growth    
Non-GAAP Measure Description [Text Block] “Underlying operating income” is not derived in accordance with GAAP. Please refer to Appendix A of this Proxy Statement for information about our use of
non-GAAP
measures. 		   
Measure [Axis]: 3      
Pay vs Performance Disclosure [Table]      
Measure Name Relative TSR    
Measure [Axis]: 4      
Pay vs Performance Disclosure [Table]      
Measure Name Stock Appreciation    
PEO [Member] | Change In Pension Value [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount $ (1,095,610) $ (811,189) $ (1,006,606)
PEO [Member] | Pension Service Cost Adjustment [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount 375,220 386,185 376,123
PEO [Member] | Summary Compensation Table Stock Option Awards [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount (3,862,409) (3,371,539) (3,595,862)
PEO [Member] | YearEnd Value of Unvested Equity Granted in Covered Fiscal Year [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount 2,773,884 2,908,042 4,457,842
PEO [Member] | Change in Value of Unvested Equity Granted in Prior Years [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount (1,070,505) (2,999,893) (2,454,598)
Non-PEO NEO [Member] | Change In Pension Value [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount (143,794) 0 (297,275)
Non-PEO NEO [Member] | Pension Service Cost Adjustment [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount 92,310 112,527 157,787
Non-PEO NEO [Member] | Summary Compensation Table Stock Option Awards [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount (500,230) (349,638) (486,612)
Non-PEO NEO [Member] | YearEnd Value of Unvested Equity Granted in Covered Fiscal Year [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount 359,253 301,569 620,239
Non-PEO NEO [Member] | Change in Value of Unvested Equity Granted in Prior Years [Member]      
Pay vs Performance Disclosure [Table]      
Adjustment to Compensation Amount $ (113,684) $ (60,704) $ 643,478