Sanderson Farms — Proxy Contest (September 2018)
27 slides from Sanderson Farms's proxy contest presentation, Sep 6, 2018
Slide 1: Sanderson Farms Strategy and Governance Update September 2018
SANDERSON FARMS STRATEGY AND GOVERNANCE UPDATE September 2018
Slide 2: Table of Contents
Table of Contents Our Successful Strategy to Drive Organic Growth Our Commitment to Sustainable Practices Our Approach to Animal Welfare and Antibiotic Use Our Board of Directors and Governance to Support the Execution of Our Strategic Plan Company Mission Company Overview 3 4 6 7 11 13 17 19 21 Tra
Slide 3: Company Mission
Company Mission Mission Statement Sanderson Farms, Inc. maximizes stockholder value by being a successful producer and marketer of high quality food products and providing superior service to the food industry. As you will see from this presentation, we perform at the top of our industry. This is th
Slide 4: Company Overview
Sanderson Farms is a leading fully vertically integrated poultry processing company engaged in the production, processing, marketing, and distribution of fresh and frozen chicken products for our customers. We have been operating in Mississippi continuously since 1947, and we also have facilities in
Slide 5: How Sanderson Farms Creates Long-Term Value
How Sanderson Farms Creates Long-Term Value 1 Low Cost Producer As one of the industry’s most efficient producers, we are well positioned to capture market share 2 Favorable Product Mix All production is focused on what have historically been the two most profitable markets in our industry over the
Slide 6: Our Successful Strategy to Drive Organic Growth
Our Successful Strategy to Drive Organic Growth Continue to Responsibly Expand Production Capacity Concentrate Production on Medium and Larger Birds for Retail Grocery and Food Service Customers Allocate Capital Responsibly to Manage Through Down Cycles Learn from Our Customers and Adapt to Changing
Slide 7: Our Commitment to Sustainable Practices
Our Commitment to Sustainable Practices Sanderson Farms contracts with almost 1,000 family farmers who raise our live chickens. We were the first among our peers to offer long term, 15-year agreements for growers, and our compensation level is among the very top of our industry. Being able to attrac
Slide 8: Our Commitment to Sustainable Practices
Our Commitment to Sustainable Practices We continually strive to optimize the efficiency of our operations. Our people recognize that efficient operations inherently have less impact on the environment, and that protecting the environment is not only the right thing to do, but also creates value for
Slide 9: Integrity Is at the Foundation of Our Sustainable Practices
Integrity Is at the Foundation of Our Sustainable Practices Integrity with Our Animals Integrity with Our Employees Integrity with Our Product Sanderson Farms’ average audit score for animal welfare practices, as rated by the National Chicken Council, was 99% in 2017. 100% of our feed is formulated
Slide 10: Integrity Is at the Foundation of Our Sustainable Practices
Integrity Is at the Foundation of Our Sustainable Practices Integrity with the Environment Integrity with Our Communities 22% decrease in electricity usage per salable pound since 2008. 40% decrease in natural gas usage per salable pound since 2008. 41% decrease in water usage per salable pound sinc
Slide 11: Our Approach to Animal Welfare
Our Approach to Animal Welfare Our responsibility for the welfare of our animals cannot be compromised. Our commitment to our animals is reflected in our business model; by owning and operating our own feed mills and hatcheries, we can ensure that everything that goes into our chickens meets the hig
Slide 12: Shareholder proposal on antibiotic use
In 2016, we received our first shareholder proposal from As You Sow, a shareholder advocacy group, requesting that we adopt a policy to phase out the use of medically important antibiotics for growth promotion and disease prevention. We do not use any antibiotics for growth promotion in our operatio
Slide 13: Our Highly-Qualified Board of Directors
Our Highly-Qualified Board of Directors Non-Independent Independent Joe Sanderson, Jr. (Chairman) CEO of Sanderson Farms since 1989 Chairman since 1998 Lampkin Butts COO of Sanderson Farms since 2004 Former Vice President of Sales from 1996 to 2004 Mike Cockrell CFO of Sanderson Farms since 1993 For
Slide 14: Our Board Refreshment Process
Our Board Refreshment Process Regular Self-Assessment Identification of Candidates Nomination and Election Onboarding & Integration Our board conducts regular self-evaluations to determine whether it is functioning effectively. Part of this assessment examines the skill sets of our existing director
Slide 15: Our Board Benefits from Diversity of Age, Experience and Gender
Our Board Benefits from Diversity of Age, Experience and Gender Gender and Ethnic Diversity Director Age Board Independence Director Experience Average Age: 66.3 Years
Slide 16: Strong Lead Independent Director and Board Oversight
Strong lead independent director who: Is elected by and from the independent directors; Approves meeting schedules and agendas to ensure there is sufficient time for discussion of all agenda items; Approves all meeting material sent to board members; Chairs executive sessions at least four times ann
Slide 17: Our Executive Compensation Philosophy
Our Executive Compensation Philosophy The main objectives of our executive compensation programs have been to reward outstanding performance by our executives appropriately and to ensure that management and stockholder interests are closely aligned. The Compensation Committee strives to structure co
Slide 18: A Rigorous, Thoughtfully-Designed Compensation Program
A Rigorous, Thoughtfully-Designed Compensation Program Commitment to Performance-Based Pay Strong Historical Shareholder Support At-Risk1 Not At-Risk2 “At-Risk” compensation includes Non-Equity Incentive Plan Compensation and Stock Awards as described in the Summary Compensation Table in the 2018 Pr
Slide 19: Process of Consistent Shareholder Engagement
Process of Consistent Shareholder Engagement Solicitation Period Post-Meeting Off-Season Our Board of Directors and management team value the feedback we receive from shareholders and other stakeholders and have been diligent in monitoring evolving trends and science that impact the way we do busine
Slide 20: How We Engage With Our Shareholders
How We Engage With Our Shareholders For Sanderson Farms, shareholder engagement is a year-round practice. Rather than treating it as a check-the-box exercise, we genuinely seek to understand and learn from our shareholders. Historically, these efforts were led by our management team, but more recent
Slide 21: Track Record of Delivering Exceptional Shareholder Returns
Track Record of Delivering Exceptional Shareholder Returns Source: Bloomberg. Data as of 7/18/18. Peers include Dean Foods Company, Hormel Foods Corp., Pilgrim’s Pride Corp., and Tyson Foods, Inc. +40.5% TSR vs. Peers +14.2% TSR vs. S&P 500
Slide 22: Direct Link Between Successful Execution of Growth Strategy and Shareholder Value
Direct Link Between Successful Execution of Growth Strategy and Shareholder Value
Slide 23: Fiscal 2018 Performance Update
Fiscal 2018 Performance Update Income Statement Highlights (in millions, except per share amounts) Balance Sheet Highlights (in millions) Income Statement Highlights (in millions, except per share amounts) Nine Months Ended July 31, 2018 2017 Change Total Sales Dollars $2,437.9 $2,422.3000000000002
Slide 24: Sustainable Organic Growth Across Market Cycles
Sustainable Organic Growth Across Market Cycles Pounds Sold (millions) Pounds Processed (millions) Earnings per Share 8.9% CAGR 7.5% CAGR
Slide 25: Disciplined, Value-Accretive Capital Allocation
Disciplined, Value-Accretive Capital Allocation
Slide 26: Forward-Looking Statements
These materials and the Company’s statements and presentation may include forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statem
Slide 27: Important Information
IMPORTANT INFORMATION: Sanderson Farms, Inc., its board of directors and certain executive officers may be deemed to be “participants” in the solicitation of proxies as it relates to this presentation and its 2019 annual meeting of stockholders. Information about the directors and executive officers