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This excerpt taken from the GIS DEF 14A filed Aug 10, 2009. DIRECTOR
COMPENSATION AND BENEFITS
We structure director compensation to attract and retain
qualified non-employee directors and to further align the
interests of directors with the interests of stockholders. A
substantial portion of director compensation is linked to our
stock performance, and directors can elect to receive their
entire board remuneration in stock and stock-related
compensation. Directors are expected to keep all of the shares
that they receive as compensation, net of shares used to pay the
exercise price or withholding taxes, until they own shares equal
in market value to at least five-times their annual retainer.
Determining Director Compensation. The
compensation committee periodically reviews surveys of
non-employee director compensation trends, and a competitive
analysis of peer company practices prepared by our compensation
consultants, and makes recommendations to the board of directors
on compensation for our non-employee directors, including their
retainers and annual equity awards. Each component of director
compensation is described below.
Annual Retainer. Non-employee directors
each receive an annual retainer of $75,000. The chair of the
audit committee receives an additional $15,000, chairs of other
committees receive an additional $10,000, and other audit
committee members receive an additional $5,000. We do not pay
any additional fees for attending or chairing a meeting. We pay
annual retainers in quarterly installments. Directors can elect
to have their retainers paid in cash
and/or
common stock.
Restricted Stock Units. Upon attending
their first board meeting and at each re-election, each
non-employee
director receives restricted stock units with a value of
$90,000. The number of restricted stock units is determined
based on the closing price of our common stock on the New York
Stock Exchange on the date of the grant. Restricted stock units
are granted under the 2006 Compensation Plan for Non-Employee
Directors. The restricted stock units vest at the next annual
meeting of stockholders. Directors who leave the board prior to
vesting forfeit their restricted stock units. In the event an
active director dies, his or her restricted stock units fully
vest. Restricted stock units earn amounts equivalent to the
regular dividend payments on our common stock. These amounts can
be reinvested in additional stock units or paid to the director.
Stock Options. Upon attending their
first board meeting and at each re-election, each
non-employee
director receives stock options to purchase a certain number of
shares for every restricted stock unit that they receive. This
award may be periodically re-adjusted with the intent that 50%
of the value of their equity award is delivered in stock
options, and 50% of the value is delivered in restricted stock
units. Options are granted under the 2006 Compensation Plan for
Non-Employee Directors. The exercise price is the closing price
of our common stock on the New York Stock Exchange on the date
of grant. The options become exercisable at the next annual
meeting of stockholders and expire 10 years after grant.
Directors who leave the board prior to vesting forfeit their
unvested options. In the event an active director dies, the
options fully vest and remain exercisable by the directors’
estate for the remainder of the option’s full term.
Deferred Compensation. Non-employee
directors may defer their retainers and restricted stock units.
We credit any deferred cash retainers with earnings based on a
director’s selection from a group of funds offered to
employees participating in our Deferred Compensation Plan. One
of these funds tracks the return on our common stock. Earnings
credited are not above-market or preferential. The value of
deferred retainers paid in shares of our common stock and
deferred restricted stock units tracks our common stock
performance.
Other Benefits. We have a Planned Gift
Program for Directors (the “Planned Gift Program”)
that has been discontinued for all directors elected during or
after fiscal 2007. The Planned Gift Program is funded by General
Mills-paid life insurance policies on each participating
director. Upon the death of a director, we donate
$1 million to a qualifying charity recommended by the
director, and we receive the entire charitable deduction. We are
then reimbursed by life insurance proceeds. We have calculated
the change in the accrued liability for the benefit in fiscal
2009 and included it under footnote six, All Other
Compensation.
The General Mills Foundation matches charitable contributions
made by directors of up to $15,000 in each calendar year to
eligible colleges, secondary and elementary schools, and up to
$15,000 to eligible art and cultural organizations.
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From time to time, we also invite our directors’ spouses to
accompany them to the company’s annual strategic planning
meetings, and we reimburse travel and incidental expenses
related to their attendance, in order to foster social
interaction among the directors.
The fiscal 2009 compensation of our non-employee directors is
shown in the following table.
This excerpt taken from the GIS DEF 14A filed Aug 12, 2008. DIRECTOR
COMPENSATION AND BENEFITS
We structure director compensation to attract and retain
qualified non-employee directors and to further align the
interests of directors with the interests of stockholders. A
substantial portion of director compensation is linked to our
stock performance, and directors can elect to receive their
entire board remuneration in stock and stock-related
compensation. Directors are expected to keep all of the shares
which they receive as compensation, net of shares used to pay
the exercise price or withholding taxes, until they own shares
equal in market value to at least five-times their annual
retainer.
Determining Director Compensation. The
compensation committee periodically reviews a competitive
analysis of non-employee director compensation and makes
recommendations to the board of directors on compensation for
our non-employee directors, including their retainers and annual
equity awards. In fiscal 2008, the compensation committee
reviewed and approved a transition to fixed-value stock awards
for our non-employee directors in response to market trends and
comparable changes to management stock awards. Each component of
director compensation is described below.
Annual Retainer. Non-employee directors
each receive an annual retainer of $75,000. The chair of the
audit committee receives an additional $15,000, chairs of other
committees receive an additional $10,000, and other audit
committee members receive an additional $5,000. We do not pay
any additional fees for attending or chairing a meeting. We pay
annual retainers in quarterly installments. Directors can elect
to have their retainers paid in cash
and/or
common stock.
Restricted Stock Units. Through fiscal
2008, non-employee directors received 1,000 restricted stock
units when they attended their first board meeting and each time
they were re-elected to the board. Beginning in fiscal 2009,
each director will receive restricted stock units with a value
of $90,000, upon attending their first board meeting and each
re-election. The number of restricted units will be determined
based on the closing sales price of our common stock on the date
of the grant. Restricted stock units are granted under the 2006
Compensation Plan for Non-Employee Directors. The restricted
stock units vest at the next annual meeting of stockholders.
Directors who leave the board prior to the end of this vesting
period forfeit their restricted stock units. In the event an
active director dies, his or her restricted stock units fully
vest. Restricted stock units earn amounts equivalent to the
regular dividend payments on our common stock. These amounts can
be reinvested in additional stock units or paid to the director.
Stock Options. Through fiscal 2008,
non-employee directors also received options to purchase
10,000 shares of our common stock when they attended their
first board meeting and each time they were re-elected to the
board. Beginning in fiscal 2009, each director will receive
stock options valued at $90,000 upon attending their first board
meeting and each re-election. Options are granted under the 2006
Compensation Plan for Non-Employee Directors. The exercise price
is the closing sales price of our common stock on the date of
grant. The options become exercisable at the next annual meeting
of stockholders and expire 10 years after grant. Directors
who stop serving on the board prior to vesting forfeit their
unvested options, unless they have died during their board
service, in which case the options fully vest upon death and
remain exercisable by the directors’ estate for the
remainder of the option’s full term.
Deferred Compensation. Non-employee
directors may defer their retainer and restricted stock units.
Any deferred cash contributions earn interest based on a
director’s selection from a group of funds offered to
employees participating in our Deferred Compensation Plan. One
of these funds tracks the return on our common stock. The
interest rate earned is not above-market or preferential.
Other Benefits. We have a Planned Gift
Program for Directors (the “Planned Gift Program”)
that has been discontinued for all directors elected during or
after fiscal 2007. The Planned Gift Program is funded by General
Mills-paid life insurance policies on each participating
director. Upon the death of a director, we donate
$1 million to a qualifying charity recommended by the
director, and we receive the entire charitable deduction. We are
then reimbursed by life insurance proceeds. We have calculated
the change in the accrued liability for the benefit in fiscal
2008 and included it in our directors’ compensation
disclosure.
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From time to time, we also invite our directors’ spouses to
accompany them to the company’s annual strategic planning
meetings, and we reimburse travel and incidental expenses
related to their attendance, in order to encourage attendance
and to foster social interaction among the directors. There were
no such reimbursements in fiscal 2008.
The fiscal 2008 compensation of our non-employee directors is
shown in the following table.
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