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.
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.
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. Lawrences 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. Powells appointment as Chief Executive Officer, he entered into an aircraft time sharing agreement in December 2007. Since Mr. Sangers 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.
As part of our efforts to communicate with a number of the companys 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 committees 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.