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This excerpt taken from the GIS DEF 14A filed Aug 12, 2008. Significant
Compensation Actions Since the Beginning of Fiscal
2008
In addition to the compensation decisions described above, the
board of directors has taken the following actions since the
beginning of fiscal 2008 that impact the named executive
officers’ compensation arrangements:
Discontinuation of Management Continuity Agreements
In June 2007, the board of directors authorized the
discontinuation of individual Management Continuity Agreements
previously granted to certain executive officers. These
Management Continuity Agreements defined the salary and benefit
payments which would be made in the event that the executive was
to be terminated as a result of a change of control. All of the
named executive officers with Management Continuity Agreements
have terminated their agreements.
Adoption of General Mills Separation Pay and Benefits Program
for Officers
With the discontinuation of Management Continuity Agreements in
June 2007, the board of directors determined it advisable to
formalize the separation payments and benefits made to
executives involuntarily terminated other than for cause, and
adopted the General Mills Separation Pay and Benefits Program
for Officers (the “Severance Plan”). The payments and
benefits to be provided to select senior executives who are
terminated in connection with a change of control, including the
named executive officers, are specifically addressed as part of
the Severance Plan. These payments and benefits materially
reduce those previously provided in the discontinued Management
Continuity Agreements. For more detail on the Severance Plan,
see Potential Payments Upon Termination.
Table of Contents
Approval of 2007 Stock Compensation Plan
In June 2007, the board of directors approved the 2007 Stock
Compensation Plan, and stockholders approved the Plan at the
2007 Annual Meeting, with 79 percent of the votes cast in
favor of the Plan.
Management Succession
Mr. Sanger announced his intention to retire as Chief
Executive Officer in September 2007 and as Chairman at the end
of fiscal 2008, and Mr. Lawrence announced his intention to
retire as Chief Financial Officer in October 2007. In September,
the board approved the promotions of Mr. Powell and
Mr. Mulligan to the positions of Chief Executive Officer
and Chief Financial Officer, respectively, and the compensation
committee approved commensurate pay actions. Both
Mr. Powell and Mr. Mulligan received increases to base
salary, target annual incentive awards and long-term incentive
awards. The compensation committee approved the continued
vesting through 2010 of 8,334 restricted stock units granted to
Mr. Lawrence in return for Mr. Lawrence’s
agreeing to sign a non-disclosure and non-solicitation agreement.
Limitation on Company-Covered Costs of Personal Use of
Corporate Aircraft
In December 2006, the compensation committee limited the
company-covered costs of personal use of corporate aircraft by
the Chief Executive Officer to $50,000 in value annually.
Expenses incurred for the personal use of corporate aircraft
which exceeded $50,000 during fiscal 2008 were fully reimbursed
by the Chief Executive Officer under an aircraft time sharing
agreement. After Mr. Powell’s appointment as Chief
Executive Officer, he entered into an aircraft time sharing
agreement in December 2007. Since Mr. Sanger’s
retirement as Chairman, he is no longer able to use corporate
aircraft for personal travel.
The compensation committee periodically reviews the annual limit
on company paid personal use of corporate aircraft to make sure
it is competitive. As a result of the 2008 review completed in
June, the compensation committee increased the annual limit for
the Chief Executive Officer to $100,000. In arriving at its
decision, the compensation committee reviewed the value of
similar benefits at peer companies and a cross-industry sample
of large companies. The committee also considered trends in cost
elements included in value of the benefit, and the number of
flights the company considered reasonable and intended to have
covered by the policy.
Shareholder Dialogue
As part of our efforts to communicate with a number of the
company’s largest investors in July and August 2007,
management engaged the investors in a discussion about executive
compensation policies and practices at General Mills.
Approval of Guidelines for Compensation Consultant Use
In May 2008, the compensation committee approved guidelines for
engagement of the committee’s independent consultant. The
guidelines formally state that the compensation committee has
the sole authority to retain or replace the independent
consultant. Compensation committee approval is required prior to
the company retaining the independent consultant
and/or the
firm for any executive compensation services or other new
consulting services or products above an aggregate annual amount
of $25,000.
Approval of Consulting Arrangement with Mr. Darcy
In May 2008, the compensation committee approved an arrangement
for Mr. Darcy to provide transitional consulting services
in fiscal 2009 following his retirement. The consulting
arrangement provides that Mr. Darcy will receive $400,000
in fees and vesting of 20,000 previously granted restricted
stock units 10 months ahead of the original vesting date in
return for his services.
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