Annual Reports

 
Quarterly Reports

 
8-K

 
Other

  • SC 13D (Oct 6, 2017)
  • SC 13D (Sep 27, 2017)
  • Form 4 (Sep 20, 2017)
  • Form 4 (Sep 14, 2017)
  • Form 4 (Aug 16, 2017)
  • Form 4 (Aug 9, 2017)
Mondelez International, Inc. DEF 14A 2017
DEF 14A
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant    

Filed by a Party other than the Registrant    

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to § 240.14a-12

Mondelēz International, Inc.

 

(Name of Registrant as Specified In Its Charter)

 

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1) Title of each class of securities to which transaction applies:

 

 

(2) Aggregate number of securities to which transaction applies:

 

 

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

(4) Proposed maximum aggregate value of transaction:

 

 

(5) Total fee paid:

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1) Amount Previously Paid:

 

 

(2) Form, Schedule or Registration Statement No.:

 

 

(3) Filing Party:

 

 

(4) Date Filed:

 

 


Table of Contents

 

LOGO    

Irene B. Rosenfeld

Chairman of the Board and

Chief Executive Officer

Three Parkway North

Deerfield, IL 60015

March 28, 2017

Dear Fellow Shareholders:

Since we spun off our North American grocery business in 2012 and established Mondelēz International, the world, and our industry, have undergone a period of unprecedented change. 2016 was yet another example.

During the year, we successfully navigated an extraordinarily volatile and uncertain environment – slower GDP growth globally, especially in emerging markets, currency and commodity volatility, market shocks like the Brexit vote and demonetization in India, as well as complex developments in the political landscape, including a growing backlash against globalization. Through it all, we never lost sight of our vision to build the best snacking company in the world.

In times of rapid change like these, we’re acting with a sense of urgency to control what we can and create contingencies for what we cannot. Last year, we continued to sharpen our focus on our core snack categories, our Power Brands and key geographies. We also continued to drive down costs by delivering strong net productivity and improving operational efficiencies throughout the business. Through these actions, we generated the fuel needed to continue to invest for sustainable growth.

While we’re encouraged by our 2016 performance, we also acknowledge that our top-line growth is not yet where we want it to be. Some of this is due to factors outside of our control, e.g., a strong dollar, emerging markets GDP, but some is also attributable to mixed execution on our part or deliberate tradeoffs to make our business more profitable. Not all of our actions will pay off immediately, but we will continue to act boldly and decisively to best position our business for profitable growth over the long term.

More than ever, I’m convinced that our results underscore our ability to drive both top- and bottom-line growth. And while today’s market realities may present some near-term hurdles, we remain confident in our ability to deliver on our commitments.

 

YOU’RE INVITED!

I’m pleased to invite you to our 2017 Annual Meeting of Shareholders. We will hold the meeting at 9 a.m. CDT on Wednesday, May 17, 2017, at NOAH’s Event Venue in Lincolnshire, Illinois. The venue will open to shareholders at 8 a.m. If you wish to attend the meeting, please register in advance by following the instructions included in the Proxy Statement.

All shareholders of record as of March 8, 2017, are entitled to vote. Even if you plan to attend the meeting in person, we encourage you to vote in advance in one of three ways:

 

LOGO

   Internet: Visit the website listed on your proxy card/voting instruction form.

LOGO

   Telephone: Call the telephone number on your proxy card/voting instruction form.

LOGO

  

Mail: Sign, date and return your proxy card in the enclosed envelope.

Shareholders will have the opportunity to ask questions or make comments related to the matters being voted on and about our company. They may do so at the times indicated in the meeting agenda and according to the Chairman’s instructions. The company will endeavor to answer questions as fully and accurately as possible. To assist us in doing so, shareholders are requested to provide questions in advance of the Annual Meeting. Shareholders can submit questions in two ways:

 

LOGO

   Internet: Follow the “shareholder question” link at www.proxyvote.com.

LOGO

  

Mail: Send your questions to the Corporate Secretary at Mondelēz International, Inc., Three Parkway North, Deerfield, Illinois 60015.

Questions submitted in advance should be received by the company at least 10 days before the date of the Annual Meeting.

 

MONDELĒZ INTERNATIONAL


Table of Contents

As we prepare for our Annual Meeting of Shareholders, I’d like to share some highlights of where we’ve been and where we’re going.

DELIVERING COMMITMENTS IN A SLOW-GROWTH WORLD

I’m proud that we delivered another year of solid results, and I give tremendous credit to my colleagues around the world for their passion, their commitment and their performance.

 

 

LOGO

   Due to the substantial gain in 2015 from the coffee transactions, our diluted EPS was down 76.4 percent in 2016. However, Adjusted EPS(1) increased 24.1 percent on a constant-currency basis, driven by our strong operating performance.
 

LOGO

   Also reflecting the prior-year gain from the coffee transactions, 2016 operating income margin was 9.9 percent, down 20.1 percentage points. However, Adjusted Operating Income(2) margin expanded 230 basis points to 15.3 percent, due to continued reductions in overhead costs and supply chain productivity.
 

LOGO

   2016 net revenues were $25.9 billion, down 12.5 percent, driven by the coffee business transactions, deconsolidation of our Venezuelan operations and currency headwinds. Organic Net Revenue(1) increased 1.3 percent, led by our Power Brands, which grew above category rates.
 

LOGO

   We returned $3.7 billion of cash to our shareholders in 2016 in share repurchases and dividends. Since the 2012 launch of the company, we’ve returned $14.8 billion of cash to our shareholders!

WE’RE BUILDING A COMPANY THAT WILL THRIVE

Our strategy is guided by our belief that the best companies have been and will continue to be those with the brands, platforms and capabilities to create sustainable value for shareholders. With our advantaged assets and capabilities, we believe we’re one of the few industry players with the potential to deliver strong top- and bottom-line growth over the long term.

We’re executing on three fronts:

 

LOGO

Focus Our Portfolio

We continue to take actions to focus our portfolio on our advantaged snacks categories, which now represent approximately 85 percent of our net revenues, and our Power Brands, like Oreo, belVita, Cadbury Dairy Milk, Milka and Trident, which account for nearly 70 percent of our global revenues. Additionally, we continue to seek opportunities to enhance our capabilities and increase our geographic reach. Last year, we successfully integrated the Kinh Do snacks business, enabling growth in our $200 million Vietnam business, and we recently announced the divesture of our grocery business in Australia and New Zealand. We also expanded the flexibility and capacity of our allergy-friendly Enjoy Life brand, with the opening of a new, state-of-the-art U.S. manufacturing facility. This increased capacity enabled our recent expansion into the U.K. and Australia.

 

 

(1) See definition under “Compensation Discussion and Analysis – Description of Individual Executive Compensation Program Elements – Financial Measure Definitions,” the GAAP to Non-GAAP reconciliation in Exhibit A and the section entitled “Non-GAAP Financial Measures” in our Annual Report on Form 10-K for the year ended December 31, 2016.
(2) See the GAAP to Non-GAAP reconciliation in Exhibit A and the definition in the section entitled “Non-GAAP Financial Measures” in our Annual Report on Form 10-K for the year ended December 31, 2016.

 

MONDELĒZ INTERNATIONAL


Table of Contents

Reduce Costs

Cost consciousness has become part of our DNA, and we’re full steam ahead on cost-reduction initiatives that will drive margin expansion. Last year, we delivered best-in-class net productivity thanks to our supply chain reinvention program, while zero-based budgeting and our global shared services initiatives continued to provide meaningful overhead cost savings. These cost savings not only fueled our outstanding shareholder returns, but also enabled us to continue to invest for future growth. We’ve demonstrated our ability to deliver in tough times, and this strong execution gives me great confidence in our ability to deliver on our 17 to 18 percent Adjusted Operating Income margin target in 2018.(3)

Invest for Growth

The underlying trends and market dynamics that make snacking attractive globally align well to our strengths. We’re not deterred by the short-term challenges facing our industry and see tremendous growth opportunities ahead of us. We, therefore, continue to leverage our advantaged global footprint and make the necessary investments in our Power Brands, innovation platforms, white-space expansions and route-to-market capabilities so that we’re well-positioned to accelerate growth as market conditions improve.

AS OUR CONSUMERS AND CUSTOMERS CHANGE, WE’RE CHANGING TOO

It’s no secret: significant global power shifts are redefining the way our consumers live, eat and shop. But we’re not standing on the sidelines. We’re on the field, actively analyzing consumer behavior and the impacts of our tactics and investments, and moving quickly and decisively to act on what we learn. We’re following three strategies to accelerate growth.

 

Contemporizing Our Core   LOGO
We’re better connecting our portfolio with today’s consumer. That starts by distorting resources and investment behind our Power Brands, our largest and most profitable trademarks. In 2016, these brands continued to outpace category growth, led by Oreo, Milka and belVita.  
In addition, our investments in 55 manufacturing Lines of the Future around the world over the past three years have not only driven superior margins, but also enabled greater flexibility to meet evolving consumer needs in terms of product forms and packaging formats. Today, about half of our Power Brands are produced on advantaged assets, up from only 15 percent in 2013 and on our way to approximately 70 percent by 2018.  

Contemporizing our core business also means connecting consumers with our iconic brands through bigger, stronger and more disruptive ideas. As we generate more cost savings, we’re increasing our marketing investments to bring our spending to leadership levels across our categories.

Filling Key White Spaces

We’re expanding our Power Brands and innovation platforms into new geographies and new consumer demand spaces to make our brands available where we’re underrepresented today. Nowhere is this more important than in the rapid growth of the well-being trend. Everywhere, people have become more attentive to their health and food choices. So, we’re renovating our existing products and introducing new ones that fit how consumers define wellness today.

 

 

(3) The company’s outlook for 2018 Adjusted Operating Income margin is a non-GAAP financial measure that excludes or otherwise adjusts for items impacting comparability of financial results such as restructuring activities, acquisitions and divestitures. The company is not able to reconcile its full year 2018 projected Adjusted Operating Income margin to its full year 2018 projected reported operating income margin because the company is unable to predict the timing of its Restructuring Program costs, mark-to-market impacts from commodity and forecasted currency transaction derivative contracts and impacts from potential acquisitions or divestitures. Therefore, because of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, the company is unable to provide a reconciliation of these measures without unreasonable effort.

 

MONDELĒZ INTERNATIONAL


Table of Contents

Last year, among other initiatives, we launched GOOD THiNS, a delicious snack with no artificial colors and flavors, no high fructose corn syrup and no partially hydrogenated oils. We’re pleased that it was recently named the No. 1 new snacking brand in the U.S.!(4)

 

LOGO   Building on that momentum, 2017 promises to be an unprecedented year for our well-being innovations, extending across all of our categories and all of our regions.
  We recently announced the launch of Véa, a new premium well-being brand in the savory biscuit segment. Baked with real ingredients and visible herbs, spices and seeds, the recipes are on trend in every way – no artificial ingredients, colors or flavors, no trans-fat and non-GMO. It will be available in July in the U.S., with additional markets following over time.

In addition, we also expanded our products into a number of geographic white spaces last year. We’re seeing early success from our launches of Milka chocolate in China and the repatriation of our Nabisco biscuit trademarks in Japan. We made a big splash into the $14 billion U.S. chocolate market at the end of last year with the introduction of Milka Oreo chocolate candy bars and Green & Black’s premium chocolate.

 

Driving Selling and Channel Ubiquity  
eCommerce is emerging as the fastest growing channel in the marketplace. As the retail industry continues to undergo transformation, we’re expanding sales and distribution capabilities to ensure that our products are available wherever and whenever people shop. Our goal is to build an industry-leading eCommerce snacks business, targeting at least $1 billion in revenue by 2020. To reach this goal, we’re investing in stronger capabilities and better infrastructure.   LOGO
This past year, we established a dedicated cross-functional team of experienced talent. We improved data analytics, supply chain and digital technologies, optimized our content and search as well as invested in compelling programs to increase traffic. As we’re implementing these strategies, we’re also accelerating our momentum. Last year, eCommerce net revenues grew more than 35 percent.  

Beyond eCommerce, we’re also boosting our presence in higher growth brick-and-mortar channels, including discounters and convenience stores in developed markets as well as traditional trade outlets in emerging markets.

GROWING OUR POSITIVE IMPACT ON THE WORLD AROUND US

Embedding Sustainability in Our Agricultural Sourcing

At Mondelēz International, our growth is directly linked to enhancing the well-being of the people who make and enjoy our products, the communities we serve and our planet as a whole. We’ve launched innovative, industry-leading programs in key commodities like cocoa, wheat and palm oil.

 

LOGO

  Our 10-year, $400 million Cocoa Life program is empowering more than 200,000 farmers and improving the lives of more than 1 million people in key origin markets. Last year, we announced that the Cocoa Life program would be extended to all Cadbury products by 2019, including those that are currently Fairtrade-certified. For the first time ever, all Cadbury products will be covered by a single sustainable sourcing program – giving our consumers the confidence that whenever they buy a Cadbury chocolate bar, it will not only taste good but make a difference too.

 

 

(4) Nielsen Global and H&W Trend Report

 

MONDELĒZ INTERNATIONAL


Table of Contents

With respect to wheat production, our Harmony program promotes biodiversity and good environmental practices across Europe. The number of wheat farmers committed to follow Harmony agricultural practices – covering the cultivation process from seed to crop – continues to grow. The initial group of 68 farmers in France is now a partnership of more than 1,700 farmers across the continent.

In palm oil, we took steps last year to advance our goal to make sustainable palm oil the mainstream option, based on the principles that production should be on legally held land, not lead to deforestation or loss of peat land, respect human rights and not use forced or child labor. As part of our updated Palm Oil Action Plan, we laid out new milestones and requirements for suppliers to work toward a sustainable supply of palm oil. Key new provisions require suppliers to map and assess the risk for all supplying mills on Global Forest Watch, provide assurance that no deforestation occurs on their own concessions and exclude third-party suppliers who do not immediately cease deforestation and work with recognized third-party experts to protect labor rights.

We recognize concerns for the welfare of egg-laying chickens and, last year, we announced our decision to fully transition to cage-free eggs in the United States and Canada by 2020 and in Europe by 2025. This move followed years of progress in sustainable and responsible sourcing.

Helping Consumers Make Mindful Choices with Clear Nutrition Labeling

To make informed, mindful decisions for themselves and their families, consumers need the right nutritional information delivered in a simple and straightforward manner. We’re committed to helping our consumers be mindful of how many calories they are taking in and are working to provide clear information about our snacks.

In the U.S., we’re part of SmartLabel, an initiative created by manufacturers and retailers to enable consumers to get additional details about our products. As such, this year, we were one of the first companies to launch a SmartLabel app, providing in-store, on-the-spot access to detailed product information for many of our snacking products on smartphones.

In Europe, we recently announced our support for a pan-European color-coded front-of-pack labeling plan in response to consumer demand for better clarity and more understandable nutritional information. We’ll be working with five other multinationals to put in place a robust European approach to help consumers make balanced and mindful choices.

THE PATH AHEAD

In 2016, our advantaged business model enabled us to deliver another year of Adjusted OI margin expansion, Adjusted EPS growth and strong capital returns. I’m proud of and inspired by our talented colleagues around the world and proud of our management team for successfully navigating through another challenging environment and continuing to deliver more moments of joy to all of our stakeholders.

Snacking remains an attractive space for growth. It’s a $1.2 trillion market, and while near-term growth may be muted, the underlying trends indicate considerable runway for our categories to expand further.

But I also know that we must do more if we want to be the best snacking company in the world. So when the macro picture improves – and we’re confident it will – the foundation we’re laying today will position us to leverage the investments we’ve made to deliver balanced and sustainable growth on both the top and bottom lines.

On behalf of our leadership team and our Mondelēz International colleagues around the world, I thank you for another year of support of our company, and for your belief in our future.

Best regards,

 

LOGO

 

LOGO

 

MONDELĒZ INTERNATIONAL


Table of Contents

Forward-Looking Statements

This letter to shareholders contains a number of forward-looking statements. Words, and variations of words, such as “will,” “expect,” “believe,” “would,” “position,” “deliver,” “commitment,” “target” and similar expressions are intended to identify our forward-looking statements, including, but not limited to, statements about: our future performance, including our future revenue growth, earnings per share and margins; execution of our strategy, including our growth strategies; category growth; market conditions; new products; innovation; our investments and the results of those investments; growth in and revenues from e-commerce; our well-being initiatives; shareholder value; and our outlook, including 2018 Adjusted Operating Income margin. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those indicated in our forward looking statements. Such factors include, but are not limited to, risks from operating globally including in emerging markets; changes in currency exchange rates, controls and restrictions; continued volatility of commodity and other input costs; weakness in economic conditions; weakness in consumer spending; pricing actions; unanticipated disruptions to our business; competition; the restructuring program and our other transformation initiatives not yielding the anticipated benefits; changes in the assumptions on which the restructuring program is based; and tax law changes. Please also see our risk factors, as they may be amended from time to time, set forth in our filings with the SEC, including our most recently filed Annual Report on Form 10-K. Mondelēz International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this letter to shareholders, except as required by applicable law or regulation.

 

MONDELĒZ INTERNATIONAL


Table of Contents

MONDELĒZ INTERNATIONAL, INC.

Three Parkway North

Deerfield, Illinois 60015

NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS

 

TIME AND DATE:

9:00 a.m. CDT on May 17, 2017

 

PLACE:

NOAH’S Event Venue
  200 Barclay Boulevard
  Lincolnshire, Illinois 60069

 

ITEMS OF BUSINESS:

(1)

To elect as directors the 13 director nominees named in the Proxy Statement;

 

  (2) To ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accountants for the fiscal year ending December 31, 2017;

 

  (3) To approve, on an advisory basis, the Company’s executive compensation;

 

  (4) To hold an advisory vote on the frequency of future advisory votes to approve executive compensation;

 

  (5) To vote on two shareholder proposals if properly presented at the meeting; and

 

  (6) To transact any other business properly presented at the meeting and at any adjournments or postponements of the meeting.

 

WHO MAY VOTE:

Shareholders of record of Class A Common Stock at the close of business on March 8, 2017.

 

DATE OF DISTRIBUTION:

On or about March 28, 2017, we mailed/distributed the Notice of Internet Availability of Proxy Materials and made available the Proxy Statement, Proxy Card and Annual Report on Form 10-K for the year ended December 31, 2016 online at http://materials.proxyvote.com/609207.

 

  On or about March 30, 2017, we expect to mail the Proxy Statement, Proxy Card and Annual Report on Form 10-K for the year ended December 31, 2016 to shareholders who previously elected to receive a paper copy of the proxy materials.

 

LOGO

  Carol J. Ward
  Vice President and Corporate Secretary

March 28, 2017

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 17, 2017

Mondelēz International, Inc.’s Proxy Statement and Annual Report on Form 10-K for the year ended

December 31, 2016 are available at http://materials.proxyvote.com/609207.

 

MONDELĒZ INTERNATIONAL


Table of Contents

Table of Contents

 

Proxy Statement Summary

     1  

ITEM 1. Election of Directors

     9  

Process for Nominating Directors

     9  

Director Nominees for Election at the Annual Meeting

     12  

Corporate Governance

     19  

Governance Documents

     19  

Governance Guidelines

     19  

Key Elements of Corporate Governance Framework

     20  

Board Leadership Structure

     21  

Director Independence

     22  

Oversight of Risk Management

     23  

Codes of Conduct

     24  

Review of Transactions with Related Persons

     25  

Communications with the Board

     25  

Board Committees and Membership

     26  

Committee Membership

     26  

Meeting Attendance

     27  

Audit Committee

     27  

Audit Committee Report for the Year Ended December 31, 2016

     27  

Pre-Approval Policies

     29  

Independent Registered Public Accountants’ Fees

     29  

Finance Committee

     29  

Governance, Membership and Public Affairs Committee

     30  

Human Resources and Compensation Committee

     30  

Human Resources and Compensation Committee Independence, Interlocks and Insider Participation

     30  

Responsibilities

     30  

The Compensation Committee’s Use of an Independent Compensation Consultant

     31  

Executive Officers Have a Limited Role in the Compensation Committee’s Determination of Executive Compensation and Recommendations to the Board Regarding Non-Employee Director Compensation

     32  

How the Compensation Committee Manages Compensation-Related Risk

     32  

Compensation of Non-Employee Directors

     33  

Compensation Discussion and Analysis

     36  

Overview

     36  

 

i


Table of Contents

Our Executive Compensation Design Principles and Governance Practices Reflect Best Practices to Protect and Promote our Shareholders’ Interests

     39  

How We Design the Executive Compensation Program

     40  

Individual Executive Compensation Program Elements

     45  

Our Policy Authorizing Recoupment of Executive Incentive Compensation in the Event of Certain Restatements

     58  

Our Trading Restrictions, Anti-Hedging Policy and Anti-Pledging Policy

     59  

Our Policy on Qualifying Compensation for Tax Deductibility

     59  

Executive Compensation Tables

     60  

2016 Summary Compensation Table

     60  

2016 Grants of Plan-Based Awards

     62  

2016 Outstanding Equity Awards at Fiscal Year-End

     63  

2016 Options Exercised and Stock Vested

     65  

2016 Pension Benefits

     66  

Retirement Benefit Plan Descriptions

     66  

2016 Non-Qualified Deferred Compensation Benefits

     67  

Potential Payments Upon Termination or Change in Control

     69  

Human Resources and Compensation Committee Report for the Year Ended December 31, 2016

     73  

Ownership of Equity Securities

     74  

Section 16(a) Beneficial Ownership Reporting Compliance

     75  

ITEM 2.  Ratification of the Selection of Independent Registered Public Accountants for Fiscal Year 2017

     75  

ITEM 3. Advisory Vote to Approve Executive Compensation

     76  

ITEM 4.  Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive Compensation

     77  

ITEM 5. Report on Non-Recyclable Packaging

     79  

ITEM 6.  Create a Committee to Prepare a Report Regarding the Impact of Plant Closures on Communities and Alternatives

     83  

Other Matters that may be Presented at the Annual Meeting

     85  

Frequently Asked Questions About the Annual Meeting and Voting

     85  

2018 Annual Meeting of Shareholders

     91  

Shareholder Nominations and Proposals for the 2018 Annual Meeting

     91  

EXHIBIT A: GAAP to Non-GAAP Reconciliations

     A-1  

Maps and Directions to the 2017 Annual Meeting

     Back Cover  

 

ii


Table of Contents

Proxy Statement Summary

In this Proxy Statement Summary and throughout the Proxy Statement, “we,” “us,” “our,” “the Company” and “Mondelēz International” refer to Mondelēz International, Inc.

This summary highlights select information contained elsewhere in this Proxy Statement. You should read the entire Proxy Statement carefully before voting and consider all information in the Proxy Statement. For more complete information regarding the Company’s 2016 performance, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”).

2017 Annual Meeting of Shareholders (the “Annual Meeting”)

 

Time and Date    9:00 a.m. CDT on May 17, 2017
Place   

NOAH’S Event Venue

200 Barclay Boulevard

Lincolnshire, Illinois 60069

Record Date    March 8, 2017
Voting    Each outstanding share of Class A Common Stock (“Common Stock”) is entitled to one vote on each matter to be voted upon at the Annual Meeting.
Admission    Shareholders should follow the advance registration instructions described in Question 21 on page 90 of this Proxy Statement. The deadline for advance registration is: 11:59 p.m. EDT on May 16, 2017.

Items of Business

 

Item   Voting Choices   Board’s Voting
Recommendation
 

More

Information

Company Proposals:            
Item 1 –   Election of 13 Directors   With respect to each nominee:

For    

Against    

Abstain

  FOR ALL NOMINEES   Page 9
                 
Item 2 –   Ratification of the Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accountants for Fiscal Year 2017   For    

Against    

Abstain

  FOR   Page 75
                 
Item 3 –   Advisory Vote to Approve Executive Compensation   For    

Against    

Abstain

  FOR   Page 76
                 
Item 4 –   Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive Compensation   One Year    

Two Years    

Three Years    

Abstain

  ONE YEAR   Page 77
                 
Shareholder Proposals:            
Item 5 –   Report on Non-Recyclable Packaging   For    

Against    

Abstain

  AGAINST   Page 79
                 
Item 6 –   Create a Committee to Prepare a Report Regarding the Impact of Plant Closures on Communities and Alternatives   For    

Against    

Abstain

  AGAINST   Page 83
                 
Transact any other business that properly comes before the meeting.    

 



 

MONDELĒZ INTERNATIONAL    1


Table of Contents

COMPANY PROPOSALS

ITEM 1. Election of Directors – Nominees (Page 9 of this Proxy Statement)

LOGO The Board recommends a vote FOR each of the 13 Director Nominees listed below

The Governance, Membership and Public Affairs Committee (the “Governance Committee”) recommended and the Board of Directors (the “Board”) nominated each of the 13 incumbent directors listed here. The terms of all directors elected at the Annual Meeting will end at the 2018 Annual Meeting of Shareholders or when a director’s successor has been duly elected and qualified. Additional information about the director nominees is provided under “Election of Directors – Director Nominees for Election at the Annual Meeting.”

 

Name  

Age

as of

March 8

  Director
Since
  Primary Occupation   Independent   Membership*
          Audit   Finance   GMPAC   Comp
Lewis W.K. Booth   68   2012  

Former Executive Vice President and

Chief Financial Officer,

Ford Motor Company

 

LOGO

      X       X
                                 
Charles E. Bunch   67   2016  

Former Executive Chairman,

PPG Industries, Inc.

 

LOGO

          X   X
                                 
Lois D. Juliber   68   2007  

Former Vice Chairman and

Chief Operating Officer,

Colgate-Palmolive Company

 

 

LOGO

          X   Chair
                                 

Mark D. Ketchum

(Lead Director)

  67   2007  

Former President and

Chief Executive Officer,

Newell Rubbermaid Inc.

 

LOGO

  +   +   +   X
                                 
Jorge S. Mesquita   55   2012  

Worldwide Chairman, Consumer,

Johnson & Johnson

 

LOGO

  X            
                                 
Joseph Neubauer   75   2014  

Former Chairman of the Board,

ARAMARK Corporation

 

LOGO

      X   Chair    
                                 
Nelson Peltz   74   2014  

Chief Executive Officer and

Founding Partner,

Trian Fund Management, L.P.

 

LOGO

      X   X    
                                 
Fredric G. Reynolds   66   2007  

Former Executive Vice President and

Chief Financial Officer,

CBS Corporation

 

LOGO

  Chair   X        
                                 
Irene B. Rosenfeld   63   2006  

Chairman and Chief Executive Officer,

Mondelēz International, Inc.

                   
                                 
Christiana S. Shi   57   2016  

Former President, Direct-to-Consumer,

Nike, Inc.

 

LOGO

  X       X    
                                 
Patrick T. Siewert   61   2012  

Managing Director and Partner,

The Carlyle Group, L.P.

 

LOGO

  X   Chair        
                                 
Ruth J. Simmons   71   2012  

President Emerita,

Brown University

 

LOGO

          X   X
                                 

Jean-François M. L.

van Boxmeer

  55   2010  

Chairman of the Executive Board and

Chief Executive Officer,

Heineken N.V.

 

LOGO

      X       X

 

* Audit – Audit Committee; Finance – Finance Committee; GMPAC – Governance, Membership and Public Affairs Committee; Comp – Human Resources and Compensation Committee.

 

+ Mr. Ketchum, as Lead Director, is an ex-officio non-voting member of all committees of the Board of which he is not a member.

 



 

MONDELĒZ INTERNATIONAL    2


Table of Contents

Board Composition: Competencies, Diversity, Refreshment and Tenure

The composition of the Board taken as a whole enables the Board to represent effectively all shareholders. All 13 director nominees have the personal attributes including integrity, sound business judgement and vision necessary to establish a competent, ethical and well-functioning board. In addition, the individual director nominees have a variety of backgrounds and experiences that provide the Board with the key competencies needed for the Board to fulfill its current and future obligations.

 

    Industry Knowledge, Product Development and Marketing Experience: 12 of 13 director nominees have significant experience at food and beverage, consumer products and services, or manufacturing companies.

 

    Operating and Leadership Experience at Complex Organizations: All director nominees have significant strategic, general management and operating experience at major companies or institutions – many with international reach.

 

    International Business Experience and Global Perspectives: Over half of the director nominees are living and working or have lived and worked outside of his or her home country; several have lived and worked in multiple countries and on multiple continents.

 

    Accounting and Financial Management Experience: All director nominees have financial oversight and management experience; four were chief financial officers of major public companies.

 

    Public Company Board and Corporate Governance Experience: All director nominees bring a range of experiences serving on various public company boards or with public company boards in their leadership roles at public companies.

 

    Academic, Leadership and Research Experience: Dr. Simmons brings experience from her distinguished career as a scholar and leader in higher education.

 

    Diversity:

 

    Four of the director nominees are women, including the Chairman and Chief Executive Officer (“CEO”)

 

    Director nominees range in age from 55 to 75 (as of March 8, 2017)

 

    Director nominees represent varied races, national origins and geographic locations and possess diverse life and professional experiences.

 

    Refreshment and Tenure of Independent Director Nominees (as of March 8, 2017):

 

    Five of the independent director nominees served as directors before the Company spun-off Kraft Foods Group, Inc. to our shareholders on October 1, 2012; 7 joined the Board on or after October 1, 2012.

 

    Tenure Range: Less than 1 year to 10 years

 

    Average Tenure: 5 years

 

    Median Tenure: 3.8 years

Shareholders can find more information regarding the process for nominating directors, Board composition and the director nominees under “Election of Directors — Process for Nominating Directors and — Director Nominees for Election at the Annual Meeting beginning on page 9 of this Proxy Statement.

 



 

MONDELĒZ INTERNATIONAL    3


Table of Contents

Corporate Governance Highlights (Pages 19 and 36 and 91 of this Proxy Statement)

We believe that a strong and balanced corporate governance framework is essential to the Company’s long-term success because it promotes the long-term interests of shareholders, accountability and trust in the Company. We highlight here key aspects of the Company’s corporate governance framework. Shareholders can find additional detail under “Corporate Governance” beginning on page 19 of this Proxy Statement under “Compensation Discussion and Analysis – Our Executive Compensation Design Principles and Governance Practices Reflect Best Practices to Protect and Promote our Shareholders’ Interests” on page 36 of this Proxy Statement, and under “2018 Annual Meeting of Shareholders” on page 91.

 

LOGO Annual election of directors (i.e., no staggered Board)

 

LOGO Proxy access by-law provisions and shareholders may recommend director candidates for the Governance Committee’s consideration

 

LOGO Majority and confidential voting in uncontested Director Elections with director resignation policy

 

LOGO No supermajority voting

 

LOGO Shareholders of at least 20% of the voting power of the outstanding Common Stock may call a special meeting of shareholders

 

LOGO No “poison pill” (shareholder rights plan)

 

LOGO Highly independent Board. The Chairman and CEO is the only member of management to serve as a director

 

LOGO All committee chairs and committee members are independent

 

LOGO Independent leadership of the Board’s work. Our Lead Director has expansive substantive responsibilities and powers, including approval of meeting schedules and agendas

 

LOGO Lead Director presides at the frequent meetings of independent directors in executive session

 

LOGO As part of our ongoing shareholder engagement, Lead Director is available for consultation with our major shareholders

 

LOGO Annual Board, committee and director self-assessments include feedback on individual director performance through candid one-on-one discussions between the Governance Committee Chair and each director

 

LOGO Focus on Board refreshment, including via term limits and retirement policies

 

LOGO Limits on directors’ service on other public company boards

 

LOGO Board annually reviews the Strategic Plan

 

LOGO Board and committees oversee enterprise-wide risk management activities

 

LOGO The appropriate Board committees annually evaluate the Chairman and CEO’s performance and suitability to serve as Chairman of the Board

 

LOGO Stock ownership guidelines and retention policies for both directors and executives

 

LOGO Anti-hedging, anti-short sale and anti-pledging policies for both directors and executive officers

 

LOGO Clawback policy allows recoupment of executive compensation

 

LOGO Long-standing commitment to sustainability including Board committee oversight of environmental, social and governance matters
 

 

ITEM 2. Ratification of the Selection of PricewaterhouseCoopers LLP as Independent Registered Public

Accountants for Fiscal Year 2017 (Page 75 of this Proxy Statement)

LOGO The Board recommends a vote FOR this Proposal

As a matter of good governance, we are asking our shareholders to ratify the Audit Committee’s selection of PricewaterhouseCoopers LLP as the independent registered public accountants for the year ending December 31, 2017. We provide information on PricewaterhouseCoopers LLP’s fees in 2016 and 2015 on page 29 of this Proxy Statement.

 



 

MONDELĒZ INTERNATIONAL    4


Table of Contents

ITEM 3. Advisory Vote to Approve Executive Compensation (Page 76 of this Proxy Statement)

LOGO The Board recommends a vote FOR this Proposal

Compensation Goals

The Human Resources and Compensation Committee (the “Compensation Committee”) has four primary goals for our executive compensation program:

 

  1. Attract, retain and motivate talented executive officers and develop world-class business leaders;

 

  2. Support business strategies that promote superior long-term shareholder returns;

 

  3. Align pay and performance by making a significant portion of our Named Executive Officers’ (“NEOs”) compensation dependent on achieving financial and other critical strategic and individual goals; and

 

  4. Align our NEOs’ and shareholders’ interests through equity-based incentive grants that link executive compensation to sustained and superior Total Shareholder Return(1) (“TSR”) and stock ownership requirements.

Compensation Design

We design our executive compensation program to achieve these goals by:

 

    Linking pay to performance;

 

    Putting pay at risk based on short-term and long-term performance;

 

    Rewarding long-term sustainable performance;

 

    Targeting pay at or near the median of our peer group;

 

    Setting substantive performance goals; and

 

    Requiring executive officers to acquire and hold a significant amount of Common Stock.

2016 Executive Compensation Reflected the Performance of our NEOs and the Company

 

    Annual Cash Incentive Program

 

    We achieved an above target financial performance rating of 123% under the 2016 Annual Cash Incentive Program.

 

    Despite the challenging top-line environment, we generated strong earnings growth and margin expansion driven by strong operating performance.

 

    After accounting for financial and individual performance, the awards our NEOs earned were generally slightly above target performance.

 

    Performance Share Units (2014-2016 Performance Cycle)

 

    We achieved an above target performance rating of 106% for the performance share unit awards subject to the 2014-2016 performance cycle.

 

    We performed above target on two of the three performance measures – Adjusted Return on Invested Capital Increase and Annualized Relative TSR.

 

    We performed below threshold on Organic Net Revenue Growth (as defined on page 54 of this proxy Statement.

You can find detailed information about our compensation programs and decisions in the Compensation Discussion and Analysis beginning on page 36 and Executive Compensation Tables beginning on page 60 of this Proxy Statement.

  

 

(1) Total Shareholder Return reflects share price appreciation and dividends paid.

 



 

MONDELĒZ INTERNATIONAL    5


Table of Contents

ITEM 4. Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive Compensation (Page 77 of this Proxy Statement)

LOGO The Board recommends a vote for annual (“ONE YEAR”) frequency

The Board recommends that shareholders vote to continue annual (“ONE YEAR”) advisory votes to approve executive compensation (commonly known as “say-on-pay” votes). The Board believes that annual advisory say-on-pay votes provide the Company timely, direct shareholder input regarding our compensation philosophy, policies and practices. An annual (“ONE YEAR”) advisory say-on-pay vote is consistent with our practice of seeking input from and regularly engaging with our shareholders on corporate governance matters and our executive compensation program.

SHAREHOLDER PROPOSALS

In accordance with U.S. Securities and Exchange Commission (“SEC”) rules, this Proxy Statement includes two shareholder proposals.

ITEM 5. Report on Non-Recyclable Packaging (Page 79 of this Proxy Statement)

LOGO The Board recommends a vote AGAINST this Shareholder Proposal

ITEM 6. Create a Committee to Prepare a Report Regarding the Impact of Plant Closures on Communities and Alternatives (Page 83 of this Proxy Statement)

LOGO The Board recommends a vote AGAINST this Shareholder Proposal

Other Matters that may be Presented at the Annual Meeting

Other than Items 1 through 6 described in this Proxy Statement, we do not expect any additional matters to be presented for action at the Annual Meeting. We described the requirements for shareholders to properly submit proposals and nominations at the 2017 Annual Meeting in the 2016 proxy statement. They are similar to those described under “2018 Annual Meeting of Shareholders” in this Proxy Statement. The Chairman of the Annual Meeting may refuse to allow presentation of an improperly submitted proposal or a nomination for the Board at the Annual Meeting.

If any other matters properly come before the Annual Meeting, your proxy authorizes the designated proxies to vote on such matters in accordance with their best judgment and in their discretion.

Advance Voting Methods (Page 88 of this Proxy Statement)

Even if you plan to register for and attend the Annual Meeting in person, please vote in advance of the meeting using one of the following voting methods (see Question 12 on page 88 of this Proxy Statement for additional details). If you are voting via the Internet or by telephone, be sure to have your proxy card or voting instruction form (“VIF”) in hand and follow the instructions. You can vote in advance of the meeting any of three ways:

 

LOGO   Visit the website listed on the proxy card/VIF to vote VIA THE INTERNET
LOGO   Call the telephone number on the proxy card/VIF to vote BY TELEPHONE
LOGO   If you received paper copies of your proxy materials, mark, sign, date and return the proxy card in the enclosed envelope to vote BY MAIL

 



 

MONDELĒZ INTERNATIONAL    6


Table of Contents

Voting Instructions to Proxies

At the Annual Meeting, the persons named as proxies on each shareholder’s proxy card will vote the shares represented by the proxy card FOR or AGAINST or ABSTAIN from voting with respect to each of the nominees listed in proposal 1 and with respect to proposals 2, 3, 5 and 6 and for ONE YEAR, TWO YEARS or THREE YEARS or ABSTAIN from voting with respect to proposal 4, as indicated in the shareholder’s voting instructions. If no indication is made on the properly executed proxy card, proxies will vote FOR each of the director nominees listed in proposal 1, FOR proposals 2 and 3, ONE YEAR with respect to proposal 4 and AGAINST proposals 5 and 6 and in their discretion upon such other business as properly comes before the meeting.

Voting at the Annual Meeting (Page 88 of this Proxy Statement)

All shareholders of record as of March 8, 2017 may vote in person at the Annual Meeting. Generally, beneficial shareholders may vote in person at the Annual Meeting if they have a legal proxy. See Question 12 on page 88 of this Proxy Statement for detailed information.

Attending the Annual Meeting – Important Note about Advance Registration Process and Admission Requirements (Page 90 of this Proxy Statement)

If you plan to attend the Annual Meeting in person, see Question 21 on page 90 of this Proxy Statement for important details about advance registration and admission requirements.

Asking Questions at the Annual Meeting

Shareholders will have the opportunity to ask questions or make comments related to the matters being voted on and more generally about the Company and its business. They may do so at the times and in the manner indicated in the meeting agenda and meeting procedures that we will distribute at the Annual Meeting registration desk and according to the Chairman’s instructions.

To assist us in preparing to answer shareholder questions at the Annual Meeting, we request that shareholders who register to attend the Annual Meeting submit any questions they would like to ask at the Annual Meeting at least 10 days before the date of the Annual Meeting. Please:

 

    Follow the “shareholder question” link at www.proxyvote.com or

 

    Submit written questions directly to the Corporate Secretary at Mondelēz International, Inc., Three Parkway North, Deerfield, Illinois 60015.

Although we are asking shareholders to submit their questions in advance, we will also provide an opportunity for shareholders to make comments or ask additional questions during the Annual Meeting.

Frequently Asked Questions About the Annual Meeting and Voting (Page 85 of this Proxy Statement)

We provide answers to many frequently asked questions about the Annual Meeting and voting, including how to vote shares held in brokerage accounts and employee benefit plan accounts, in the FAQ section beginning on page 85 of this Proxy Statement.

 



 

MONDELĒZ INTERNATIONAL    7


Table of Contents

In Memory of Stephen Frasier Bollenbach

1942 – 2016

On October 8, 2016, the Board lost a great friend and remarkable colleague. Steve Bollenbach joined the Board in October 2012, when the Company spun off its North American grocery business to create Kraft Foods Group. His remarkable career in the family entertainment, media, hospitality, real estate and financial services industries, included senior roles at a number of major companies, among them Marriott Corporation, The Walt Disney Company and Hilton Hotels Corporation. While serving on the Company’s Board, he used his vast knowledge and experience to make many contributions to the Company’s success and the Board’s effectiveness. He was relied upon to share powerful insights, distill complex situations, ask tough questions and, always, to speak his mind. He is missed greatly.

 



 

MONDELĒZ INTERNATIONAL    8


Table of Contents

ITEM 1. Election of Directors

Process for Nominating Directors

The Governance Committee identifies, evaluates and recommends to the Board director nominees for election at the Annual Meeting (and any adjournments or postponements of the Annual Meeting). The Governance Committee invites director nominee suggestions from the directors, management, shareholders and others. In addition, the Governance Committee has retained a third-party executive search firm to assist it in identifying and evaluating potential director nominees based on the Board’s recruitment objectives.

General Qualifications for Nomination to the Board

The Board believes all directors should possess certain attributes, including integrity, sound business judgment and vision, as these characteristics are necessary to establish a competent, ethical and well-functioning board that best represents shareholders’ interests.

Consistent with the Corporate Governance Guidelines (the “Guidelines”), when evaluating the suitability of an individual for nomination, the Governance Committee considers that individual’s:

 

    general understanding of the varied disciplines relevant to the success of a large, publicly traded company in today’s global business environment;

 

    understanding of the Company’s global businesses and markets; and

 

    professional expertise and educational background.

The Governance Committee also considers:

 

    other factors that promote diversity of views, knowledge and experience, including, among others, gender, race and national origin;

 

    whether the individual meets various independence requirements, including whether an individual’s service on boards and committees of other organizations is consistent with our conflicts of interest policy; and

 

    whether the individual can devote sufficient time and effort to fulfill his or her responsibilities to the Company given the individual’s other commitments.

Board Composition: Director Competencies, Experiences and Expertise

The Governance Committee works with the Board to determine the appropriate mix of competencies that will result in a Board that is strong in its collective knowledge, enabling the Board to fulfill its responsibilities and best perpetuate the Company’s long-term success and represent all shareholders’ interests. Based upon its discussions with the Board, the Governance Committee has identified these key competencies that are particularly desirable in order for the Board to fulfill its current and future obligations:

 

Key Competencies   Relevant Experience
Industry Knowledge vital to understanding and reviewing strategy, including the acquisition of businesses that offer complementary products or services  

       Food and Beverage

 

       Consumer Products

Significant Operating Experience as current or former executives of large global companies or other large organizations giving directors specific insight into and expertise that will foster active participation in the development and implementation of the Company’s operating plan and business strategy  

       CEO/COO

 

       Best in Class – Manufacturing Operations

 

       Best in Class – Retail Operations

 

 

MONDELĒZ INTERNATIONAL    9


Table of Contents
Key Competencies   Relevant Experience
Leadership Experience giving directors the ability to motivate, manage, identify and develop leadership qualities in others  

       CEO/COO or Other Leadership Positions at Complex Organizations

 

       M&A/Alliances/Partnerships

 

       Strategic Planning

 

       Talent Assessment and People Development/Compensation

Substantial Global Business and other International Experience given the Company’s global presence  

       Developed Markets

 

       Emerging Markets

 

       New Media/Digital Technology/E-Commerce

 

       Technology/IT Strategy

 

       Government Affairs/Regulatory

Accounting and Financial Expertise enabling directors to analyze financial statements, capital structure and complex financial transactions and oversee accounting and financial reporting processes  

       CFO

 

       M&A/Alliances/Partnerships

 

       Financial Acumen/Capital Markets

 

       Cost Management

Product Development and Marketing Experience in food and beverage as well as complementary industries contributing to the identification and development of new food and beverage products and implementation of marketing strategies that will improve performance  

       Consumer Insights/Analytics

 

       Research & Development/Innovation

Public Company Board and Corporate Governance Experience at large publicly traded companies providing directors with a solid understanding of their extensive and complex oversight responsibilities and furthering the goals of greater transparency, accountability for management and the Board and protection of shareholders’ interest  

       CEO/COO/Other Governance Leadership Positions

 

       Government Affairs/Regulatory

Academic and Research Experience provides strong critical thinking and verbal communication skills as well as a greater diversity of views and thought processes  

       Talent Assessment and People Development/Compensation

 

       Research & Development/Innovation

The Governance Committee’s director recruitment planning considers both the evolving needs of the Company and Board as well as the impact of anticipated departures on the Board’s future composition and leadership of the Board. Based on that work, the Committee most recently sought to identify and recruit a sitting or recently retired CEO of a global manufacturing company with significant experience in cost management. That search identified Charles E. Bunch, who has significant experience in cost management and is a highly capable global executive and seasoned public company director. Mr. Bunch was recommended to the Governance Committee as a potential director by Nelson Peltz, an incumbent non-employee director, and also by the Governance Committee’s consultant in connection with the Governance Committee’s search. The Board appointed Mr. Bunch effective September 1, 2016.

Individual Director Self-Assessments and Considerations for Renomination of Incumbent Directors

The Governance Committee coordinates annual Board, committee and director self-assessments. The assessment process includes one-on-one discussions between each director and the Chair of the Governance Committee. Annually, the director nominees complete questionnaires to update and confirm their background, qualifications and skills and identify any potential conflicts of interest. The Governance Committee assesses the experience, qualifications, attributes, skills, diversity and contributions of each director. The Governance Committee also considers each individual in the context of the Board composition as a whole, with the objective of recruiting and recommending a slate of director nominees who can best perpetuate the Company’s success and represent our shareholders’ interests through the exercise of sound judgment and informed decision-making.

Board Refreshment, Director Tenure and Age Limits

The Board believes that its composition should provide continuity as well as new experiences and fresh perspectives relevant to the Board’s work. The Board does not believe that directors should expect to be automatically renominated. Therefore, the annual Board and director self-assessment processes are important determinants in a director’s renomination and tenure.

 

 

MONDELĒZ INTERNATIONAL    10


Table of Contents

In addition, as amended during 2016, the Guidelines provide that:

 

    All non-employee directors will have a term limit of 15 years.

 

    Non-employee directors will not be nominated for election to the Board after their 75th birthday.

 

    However, if a non-employee director aged 70 to 75 is appointed or elected to the Board, then that director will have a term limit of five years.

The current Board composition reflects the Board’s commitment to ongoing refreshment: five of the independent director nominees served as directors before we spun-off Kraft Foods Group, Inc. to shareholders on October 1, 2012; seven joined the Board on or after October 1, 2012.

 

LOGO

Board Diversity

Mondelēz International has cross-cultural and diverse employees manufacturing and marketing delicious snack food and beverage products for consumers in approximately 165 countries around the world. The Board embraces and encourages the Company’s and Board’s culture of diversity and inclusion.

Although the Board does not establish specific goals with respect to diversity, the Board’s overall diversity is an important consideration in the director recruitment and nomination process. The Guidelines provide that when evaluating the suitability of individuals for nomination, the Governance Committee considers criteria including, among others, gender, race and national origin as they promote diversity of views, knowledge and experience that contribute to a more informed and effective decision-making process. As part of its annual assessment of the Board’s composition, the Governance Committee assesses the effectiveness of the Board’s efforts to promote diversity in all its forms.

Four of the director nominees are women, including the Chairman and CEO; the director nominees represent varied ages (as of March 8, 2017): 55 to 75, races and national origins, and bring diverse life and professional experiences.

 

 

MONDELĒZ INTERNATIONAL    11


Table of Contents

The Governance Committee Welcomes Shareholder Recommendations for Candidates for Election to the Board

The Governance Committee will consider recommendations for director candidates submitted by a shareholder(s). The shareholder(s) should submit to the Corporate Secretary both the recommended candidate’s name along with the same information required for a shareholder to nominate a candidate for election to the Board at an Annual Meeting and in the same manner as set forth in the advance notice provisions of the Company’s By-Laws (the “By-Laws”).

The Governance Committee evaluates director candidates recommended by shareholder(s) using the same criteria as it uses to evaluate candidates whom the Governance Committee identifies (described above). The Governance Committee makes a recommendation to the Board regarding the candidate’s appointment or nomination for election to the Board. The Board considers the Governance Committee’s recommendation, and then decides whether to appoint or nominate the candidate. The Corporate Secretary advises the shareholder(s) of the Board’s decision whether to appoint or nominate the candidate.

Shareholders Elect Directors Annually

Each member of the Board is elected annually by a majority of votes cast (if the election is uncontested). The terms of all directors elected at the 2017 Annual Meeting will end at the 2018 Annual Meeting of Shareholders or when a director’s successor has been duly elected and qualified.

The Governance Committee recommended and the Board nominated for election at the 2017 Annual Meeting each of the 13 incumbent directors listed below under “– Director Nominees for Election at the Annual Meeting.” Of the 13 director nominees standing for election, shareholders elected 12 to one-year terms at the 2016 Annual Meeting of Shareholders. The Board appointed Mr. Bunch, the 13th director nominee, to the Board effective September 1, 2016. Mr. Bollenbach, whom shareholders elected at the 2016 Annual Meeting of Shareholders, passed away in October 2016.

Each director nominee consented to his or her nomination for election to the Board and to serving on the Board, if elected. If a director nominee should become unavailable to serve as a director, the persons named as proxies intend to vote the shares for a replacement director nominee designated by the Board. In lieu of naming a substitute, the Board may reduce the number of directors on the Board.

Director Nominees for Election at the Annual Meeting

Individual Nominees’ Experience, Qualifications, Attributes and Skills

The Board believes that each director nominee for election at the Annual Meeting is highly qualified. All 13 director nominees satisfy the criteria stated in the Guidelines and possess the personal attributes essential for the proper and effective functioning of the Board. The director nominees’ biographies describe the specific qualifications that the Governance Committee relied upon when determining whether to recommend the individual director nominees for election and led the Board to nominate him or her for election. The biographies also include information about current and past (covering the last five years) directorships at companies publicly listed in the U.S. and registered investment companies. A particular director nominee may have experience and qualifications in addition to those described in the biographies below, including service on the boards of various private companies, companies listed outside of the U.S. and charitable, educational and cultural institutions.

 

 

MONDELĒZ INTERNATIONAL    12


Table of Contents

THE BOARD RECOMMENDS SHAREHOLDERS VOTE FOR THE ELECTION OF EACH OF THE 13 DIRECTOR NOMINEES LISTED BELOW.

The following information regarding each director nominee is as of March 8, 2017.

 

 

LEWIS W.K. BOOTH, Former Executive Vice President and Chief Financial Officer, Ford Motor Company

 

Director since October 2012; Independent

Mr. Booth, 68, served as Executive Vice President and Chief Financial Officer of the Ford Motor Company (“Ford”), a global automobile manufacturer, from November 2008 until his retirement in April 2012. He was Executive Vice President of Ford of Europe, Volvo Car Corporation and Ford Export Operations and Global Growth Initiatives, and Executive Vice President of Ford’s Premier Automotive Group from October 2005 to October 2008. Prior to that, Mr. Booth held various executive leadership positions with Ford, including Chairman and Chief Executive Officer of Ford of Europe, President of Mazda Motor Corporation and President of Ford Asia Pacific and Africa Operations. He worked for Ford in various positions from 1978 to 2012. Mr. Booth was appointed Commander of the Order of the British Empire in June 2012 for his services to the United Kingdom’s automotive and manufacturing industries.

 

Director Qualifications:

 

     During his career at Ford, Mr. Booth gained global business experience. He led operations in Africa, Asia and Europe. In these and other roles, he successfully implemented major growth initiatives, business restructuring and cost management and was involved in strategy, product development, marketing and operations.

 

      Mr. Booth held a variety of positions in Ford’s Finance staff. As Ford’s Chief Financial Officer during the 2008 financial crisis, Mr. Booth led a restructuring of Ford’s balance sheet and a return to growth and profitability.

 

      Mr. Booth is a Chartered Management Accountant.

 

      Mr. Booth also has extensive public company board and corporate governance experience. He is a director of Gentherm Incorporated and Rolls-Royce Holdings plc.

 

CHARLES E. BUNCH, Former Executive Chairman, PPG Industries, Inc.

 

Director since September 2016; Independent

Mr. Bunch, 67, served as Executive Chairman of PPG Industries, Inc. (“PPG”), a manufacturer and distributor of a broad range of coatings, specialty materials and glass products, from September 2015 until his retirement in August 2016. He served as Chairman, President and Chief Executive Officer from July 2005 until August 2015; President and Chief Executive Officer from March 2005 until July 2005; and President and Chief Operating Officer from July 2002 to March 2005; Executive Vice President, Coatings from 2000 to 2002 and Senior Vice President, Strategic Planning and Corporate Services from 1997 to 2000.

 

He joined PPG in 1979 and held various positions in finance and planning, marketing, and general management in the United States and Europe.

 

Director Qualifications:

 

      During his 37 year career at PPG, he gained valuable experience in executive leadership, operations management, cost management, and strategic planning.

 

      Under Bunch’s leadership, PPG accelerated its business transformation, becoming the world’s leading paints and coatings company through strategic actions that focused its business portfolio, and that expanded and strengthened its international presence. During his tenure as Chairman and Chief Executive Officer, PPG made more than 30 acquisitions and delivered strong growth and record financial performance.

 

      Through his experience at the Federal Reserve Bank of Cleveland, including serving as its Chairman, Mr. Bunch gained a deep understanding of the U.S. economy and corporate finance.

 

      Mr. Bunch also has extensive public company board and corporate governance experience. He is a director of Marathon Petroleum Corporation, ConocoPhilips and The PNC Financial Services Group, Inc. and a former director of H.J. Heinz Company and PPG.

 

 

MONDELĒZ INTERNATIONAL    13


Table of Contents
 

LOIS D. JULIBER, Former Vice Chairman and Chief Operating Officer, Colgate-Palmolive Company

 

Director since November 2007; Independent

Ms. Juliber, 68, served as Vice Chairman of the Colgate-Palmolive Company (“Colgate-Palmolive”), a global consumer products company, from 2004 until her retirement in April 2005. She served as Colgate-Palmolive’s Chief Operating Officer from 2000 to 2003, Executive Vice President – North America and Europe from 1997 until 2000, President of Colgate North America from 1994 to 1997 and Chief Technology Officer from 1991 until 1994. Prior to joining Colgate-Palmolive, Ms. Juliber spent 15 years at Mondelēz International’s predecessor, General Foods Corporation, in a variety of key marketing and general management positions.

 

Director Qualifications:

      Ms. Juliber brings a global perspective and many years of experience in the food and consumer products industries.

      As Vice Chairman and Chief Operating Officer of Colgate-Palmolive, she led Colgate-Palmolive’s growth functions, including global marketing and business development, research and development, supply chain operations and investor relations, as well as business operations in Latin America.

      She is credited with leading Colgate-Palmolive’s Colgate North America business resurgence which was marked by market share increases, highly successful new products and increased profitability.

      Ms. Juliber also has extensive public company board and corporate governance experience. Ms. Juliber is a director of E. I. du Pont de Nemours and Company. She was formerly a director of Goldman Sachs Group, Inc.

 

MARK D. KETCHUM, Former President and Chief Executive Officer, Newell Rubbermaid Inc.

 

Director since April 2007; Lead Director since January 2009; Independent

Mr. Ketchum, 67, served as President and Chief Executive Officer of Newell Rubbermaid Inc. (“Newell Rubbermaid”), a global marketer of consumer and commercial products, from October 2005 until his retirement in June 2011. He was a member of Newell Rubbermaid’s board of directors from November 2004 to May 2012.

 

From 1971 to 2004, Mr. Ketchum served in a variety of roles at The Procter & Gamble Company (“P&G”), a global marketer of consumer products. Those roles included President, Global Baby and Family Care from 1999 to 2004, President – North American Paper Sector from 1996 to 1999, and Vice President and General Manager – Tissue/Towel from 1990 to 1996.

 

Director Qualifications:

      For over four decades, Mr. Ketchum held key executive roles at global consumer products companies with responsibility for operations, brand management, marketing and general management.

      While serving as Newell Rubbermaid’s President and Chief Executive Officer, he successfully transformed Newell Rubbermaid’s portfolio, gross margin structure and business model during difficult economic times.

      During his distinguished 33-year career at P&G, among other accomplishments, he was credited with repositioning key brands and for driving their notable profit and share growth and leading the turnaround of a major global brand.

      Mr. Ketchum also has extensive public company board and corporate governance experience. He was formerly a director of Newell Rubbermaid.

 

 

MONDELĒZ INTERNATIONAL    14


Table of Contents
 

JORGE S. MESQUITA, Worldwide Chairman, Consumer of Johnson & Johnson

 

Director since May 2012; Independent

Mr. Mesquita, 55, has been Worldwide Chairman, Consumer of Johnson & Johnson (“J&J”), a global healthcare products company, since December 2014.

 

Prior to that, he was employed by P&G, a global marketer of consumer products, in various marketing and leadership capacities for 29 years from 1984 to 2013. During his tenure at P&G, he served as Group President – New Business Creation and Innovation from March 2012 until June 2013, Group President – Special Assignment from January 2012 until March 2012, Group President, Global Fabric Care from 2007 to 2011 and President, Global Home Care from 2001 to 2007, also serving as President of Commercial Products and President of P&G Professional from 2006 to 2007.

 

Director Qualifications:

      Mr. Mesquita brings extensive experience leading major global company business units, currently Worldwide Chairman of a J&J division and previously Group President of various P&G divisions. In these roles, he gained broad operational and brand management as well as marketing experience.

      Mr. Mesquita has a strong track record of building and marketing global brands, including the reinvention of key P&G brands, leading strategic business transformations and driving strong, profitable growth.

      Mr. Mesquita spent 15 years at P&G working in various roles across Latin America.

      Mr. Mesquita also has extensive public company board and corporate governance experience. He has served on the Board since 2012.

 

JOSEPH NEUBAUER, Former Chairman of the Board, ARAMARK Corporation

 

Director since November 2014; Independent

Mr. Neubauer, 75, was Chairman of the Board of ARAMARK Corporation (“ARAMARK”), a leading provider of professional services including food, hospitality, facility and uniform services, from 1984 until his retirement in 2015.

 

Mr. Neubauer joined ARAMARK in 1979 as Executive Vice President of Finance and Development, Chief Financial Officer and a member of the Board of Directors. He was elected President in 1981, Chief Executive Officer in 1983 and Chairman in 1984. He served as Chairman and Chief Executive Officer until May 2012.

 

Director Qualifications:

      As former Chairman and Chief Executive Officer of ARAMARK, Mr. Neubauer brings a wealth of experience in operational excellence in a complex international professional services organization. During Mr. Neubauer’s tenure at ARAMARK, revenues grew from $2 billion to $14 billion and operations extended into 21 countries.

      Mr. Neubauer brings significant industry knowledge acquired during his career at ARAMARK and before that at PepsiCo, Inc. (“PepsiCo”), a food and beverage company.

      Mr. Neubauer gained significant financial experience while serving as ARAMARK’s Chief Financial Officer and prior to joining ARAMARK in 1979, during his employment with The Chase Manhattan Bank and service as Treasurer of PepsiCo.

      Mr. Neubauer also has extensive public company board and corporate governance experience. He was formerly a director of ARAMARK, Macy’s, Inc. and Verizon Communications, Inc.

 

 

MONDELĒZ INTERNATIONAL    15


Table of Contents
 

NELSON PELTZ, Chief Executive Officer and Founding Partner, Trian Fund Management, L.P.

 

Director since January 2014; Independent

Mr. Peltz, 74, has served as Chief Executive Officer and Founding Partner of Trian Fund Management, L.P. (“Trian”), an alternative investment management firm, since November 2005. He also served as Chairman and Chief Executive Officer of Triarc Companies, Inc. (now known as The Wendy’s Company), a holding company for various consumer and industrial businesses, from April 1993 to June 2007, and has served as its non-executive Chairman since June 2007. Prior to that, Mr. Peltz served as Chairman and Chief Executive Officer of Trian Group, Limited Partnership, which provided investment banking and management services to entities controlled by Mr. Peltz and Peter May, from January 1989 to April 1993 and as Chairman and Chief Executive Officer of Triangle Industries, Inc., a manufacturer of packaging products, from 1983 to December 1988.

 

Director Qualifications:

 

      Mr. Peltz has extensive investment, financial and leadership experience as Trian’s Chief Executive Officer and as non-executive Chairman (and formerly as the Chairman and Chief Executive Officer) of The Wendy’s Company, working with management teams and boards of directors, as well as in acquiring, investing in and building companies and has strong relationships with institutional investors, investment banking/capital markets advisors and others that can be drawn upon for the Company’s benefit.

 

      Mr. Peltz brings considerable experience in the food and beverage and consumer products industry through his service on the board of directors of H.J. Heinz Company, Sysco Corporation and The Wendy’s Company.

 

      Mr. Peltz also has extensive public company board and corporate governance experience. In addition to serving as a director of Sysco Corporation and The Wendy’s Company, he is also a director of The Madison Square Garden Company. He was formerly a director of H.J. Heinz Company, Legg Mason, Inc. and Ingersoll-Rand plc. The National Association of Corporate Directors recognized Mr. Peltz in 2010, 2011 and 2012 as among the most influential people in the global corporate governance arena.

 

FREDRIC G. REYNOLDS, Former Executive Vice President and Chief Financial Officer, CBS Corporation

 

Director since December 2007; Independent

Mr. Reynolds, 66, served as Executive Vice President and Chief Financial Officer of CBS Corporation (“CBS”), a mass media company, from 2006 until his retirement in 2009. From 2001 through 2005, Mr. Reynolds served as President and Chief Executive Officer of Viacom Television Stations Group and as Executive Vice President and Chief Financial Officer of Viacom Inc. (“Viacom”), a mass media company, from 2000 to 2001. He also served as Executive Vice President and Chief Financial Officer of CBS and its predecessor, Westinghouse Electric Corporation, from 1994 to 2000. Prior to that, Mr. Reynolds served in various capacities at PepsiCo, a food and beverage company, for twelve years, including Chief Financial Officer or Financial Officer at Pizza Hut, Pepsi Cola International, Kentucky Fried Chicken Worldwide and Frito-Lay.

 

Director Qualifications:

 

      Mr. Reynolds has extensive experience in both the media (including, advertising and marketing) and the food and beverage industries. He served in various roles, including as President, Chief Executive Officer, Executive Vice President and Chief Financial Officer at CBS, Viacom and PepsiCo. While at CBS, he successfully managed the integration following the CBS/Viacom merger and he was ultimately responsible for all financial functions and growing portfolio at Viacom. During his tenure as Chief Financial Officer of CBS, CBS shareholders experienced substantial share appreciation and return of capital.

 

      Mr. Reynolds brings extensive financial experience gained during his service as Chief Financial Officer at CBS and a Financial Officer at Viacom and at divisions of PepsiCo.

 

      Mr. Reynolds is a Certified Public Accountant.

 

      Mr. Reynolds also has extensive public company board and corporate governance experience. He is a director of Hess Corporation and United Technologies Corporation. He was formerly a director of AOL, Inc.

 

 

MONDELĒZ INTERNATIONAL    16


Table of Contents
 

IRENE B. ROSENFELD, Chairman and Chief Executive Officer, Mondelēz International, Inc.

 

Director since June 2006

Ms. Rosenfeld, 63, was appointed Chief Executive Officer and a director of Mondelēz International in June 2006 and became Chairman of the Board in March 2007. Prior to that, she served as Chairman and Chief Executive Officer of Frito-Lay, a division of PepsiCo, from 2004 to 2006. Ms. Rosenfeld was employed by Mondelēz International and its predecessor companies in various capacities from 1981 until 2003, including President of Kraft Foods North America and President of Operations, Technology, Information Systems and Kraft Foods, Canada, Mexico and Puerto Rico.

 

Director Qualifications:

      Ms. Rosenfeld possesses invaluable perspective and experience as current Chairman and Chief Executive Officer of Mondelēz International and former Chairman and Chief Executive Officer of the Frito-Lay division of PepsiCo. She led the restructuring and turnaround of key businesses, the acquisition of Cadbury and the successful spin-off of Kraft Foods’ North American Grocery business.

      Ms. Rosenfeld has extensive knowledge of the food and beverage industry and a history of bringing consumer focus and innovation to building successful global brands. She also led accelerated growth in better-for-you products and developed a pipeline of health and wellness offerings. Her extensive corporate insight is a result of long-term service in various positions, including key executive roles at Mondelēz International and its predecessor companies and at PepsiCo.

      Ms. Rosenfeld has extensive public company board and corporate governance experience. She has served on the Board since 2006.

 

CHRISTIANA S. SHI,  Former President, Direct-to-Consumer of Nike, Inc.

 

Director since January 2016; Independent

Ms. Shi, 57, served as President, Direct-to-Consumer of Nike, Inc. (“Nike”), a global provider of athletic footwear and apparel, from July 2013 until her retirement in September 2016. From 2012 to 2013, she served as Nike’s Vice President and General Manager, Global Digital Commerce. From 2010 to 2012, she served as Nike’s Chief Operating Officer for Global Direct-to-Consumer.

 

Prior to joining Nike, Ms. Shi spent 24 years at McKinsey & Company (“McKinsey”), a global management consulting firm, in various roles including ten years as Director and Senior Partner.

 

From July 1981 to July 1984, Ms. Shi served in various trading, institutional sales and investment banking roles at Merrill Lynch & Company.

 

Director Qualifications:

      During her career at McKinsey, Ms. Shi worked across North America, Europe, Latin America and Asia providing leadership, expertise and strategic vision to senior executives of Fortune 200 consumer companies. She designed and led performance transformation programs, developed cross-channel marketing and merchandising programs, and drove market entry work.

      In her various roles at Nike, Ms. Shi led Nike’s global integrated digital commerce strategy and retail organization, as well as real estate, finance, supply chain operations and information technology.

      With her deep knowledge of digital commerce, Ms. Shi grew Nike’s digital commerce capabilities.

      Ms. Shi also has extensive public company board and corporate governance experience. She is a director of West Marine, Inc.

 

 

MONDELĒZ INTERNATIONAL    17


Table of Contents
 

PATRICK T. SIEWERT, Managing Director and Partner, The Carlyle Group, L.P.

 

Director since October 2012; Independent

Mr. Siewert, 61, has served as a Managing Director and Partner for The Carlyle Group, L.P. (“Carlyle”), a global alternative asset management firm, since April 2007.

 

From 2001 to 2007, he held a variety of roles with The Coca-Cola Company (“Coca-Cola”), a global beverage company, including Group President and Chief Operating Officer, Asia and a member of the Global Executive Committee.

 

From 1974 to 2001, he held a variety of roles with Eastman Kodak Company (“Eastman Kodak”), a technology company focused on imaging products and services, including Chief Operating Officer, Consumer Imaging and Senior Vice President and President of the Kodak Professional Division.

 

Director Qualifications:

      While working at Coca-Cola, Eastman Kodak and Carlyle, Mr. Siewert developed extensive knowledge about the food and beverage and consumer products industries, especially insights into consumer trends and routes to market.

      Mr. Siewert led business operations in Europe, Africa, and the Middle East and most recently in Asia where he focuses on opportunities and challenges in Asian markets.

      Mr. Siewert also has extensive public company board and corporate governance experience. He is a director of Avery Dennison Corporation.

 

RUTH J. SIMMONS, President Emerita, Brown University

 

Director since October 2012; Independent

Dr. Simmons, 71, is President Emerita of Brown University, having served as President from 2001 to 2012. Prior to that, Dr. Simmons served as President of Smith College from 1995 to 2001 and Vice Provost of Princeton University from 1991 to 1995. She served in various leadership positions at colleges and universities beginning in 1977, including the University of Southern California from 1979 to 1983, Princeton University from 1983 to 1989 (and again from 1991 to 1995) and Spelman College from 1989 to 1991.

 

Director Qualifications:

      Dr. Simmons has over 25 years in leadership roles at Brown University, Princeton University and Smith College. In these roles, she was responsible for leading and managing large, complex institutions of higher education and for the development of student and faculty talent. She provides valuable perspective to our Governance Committee and is well-positioned to advise the Board and its committees on matters relating to our people.

      Dr. Simmons has had a distinguished career in academic research and leadership in the field of higher education for which she has been frequently honored. Dr. Simmons is a fellow of the American Academy of Arts and Sciences, a member of the American Philosophical Society and the Council on Foreign Relations. She has been knighted by the President of France as a chevalier of the French Legion of Honor for advancement of French arts and culture.

      Dr. Simmons also has extensive public company board and corporate governance experience. She is a director of Fiat Chrysler Automobiles NV and Square, Inc. and was formerly a director of Chrysler Group LLC and Texas Instruments Incorporated.

 

 

MONDELĒZ INTERNATIONAL    18


Table of Contents
 

JEAN-FRANÇOIS M. L. VAN BOXMEER, Chairman of the Executive Board and Chief Executive Officer,                                                                              Heineken N.V.

 

Director since January 2010; Independent

Mr. van Boxmeer, 55, has been Chairman of the Executive Board and Chief Executive Officer of Heineken N.V. (“Heineken”), a global brewing company with a global network of distributors and brewers in more than 70 countries, since 2005 and a member of its Executive Board since 2001. He has been employed by Heineken, in various capacities since 1984.

 

Director Qualifications:

 

      As Chairman and Chief Executive Officer of Heineken, Mr. van Boxmeer led Heineken’s significant global expansion, bringing Heineken’s iconic brands into new markets – most notably into Asian markets. He has a strong track record leading strategic acquisitions and integrations and driving revenue growth.

 

      Mr. van Boxmeer brings a global perspective with particular insights regarding developing markets.

 

      Mr. van Boxmeer has extensive leadership experience, including global operations, product development and marketing, and the beverages and consumer products industries.

 

      Mr. van Boxmeer also has extensive public company board and corporate governance experience. He is a Member of the Shareholders’ Committee of Henkel AG & Co. KGaA.

Corporate Governance

We believe that having and adhering to a strong corporate governance framework is essential to our long-term success. This section describes our governance policies, key practices, Board leadership structure and oversight functions.

Governance Documents

To learn more about our corporate governance practices, you can access the following corporate governance documents at www.mondelezinternational.com/investors/corporate-governance. We will also provide copies of any of these documents to shareholders upon written request to the Corporate Secretary.

 

    Articles of Incorporation

 

    By-Laws

 

    Corporate Governance Guidelines and Categorical Standards of Independence – Annex A to the Guidelines

 

    Related Person Transaction Policy

 

    Board Committee Charters

 

    Code of Business Conduct and Ethics for Non-Employee Directors

You can access our employee Code of Conduct (“Code of Conduct”) at www.mondelezinternational.com/about-us/compliance-and-integrity.

Governance Guidelines

The Board adopted the Guidelines articulating our governance philosophy, practices and policies in a range of areas, including: the Board’s role and responsibilities; Board composition and structure; responsibilities of the committees of the Board; CEO and Board performance evaluations; and succession planning. At least annually, the Governance Committee reviews the Guidelines and recommends any changes to the Board for its consideration.

 

 

MONDELĒZ INTERNATIONAL    19


Table of Contents

Key Elements of Corporate Governance Framework

 

    Annual Election of Directors. The By-Laws provide that the shareholders elect all directors annually.

 

    Proxy Access By-Law Provisions. Key parameters:

 

    Minimum Ownership Threshold: 3% or more of the outstanding Common Stock;

 

    Ownership Duration: continuously for at least 3 years;

 

    Nominating Group Size: no more than 20 shareholders may aggregate holdings to meet the minimum ownership threshold; and

 

    Maximum Nominations Permitted: greater of 20% of the Board or 2 nominees.

 

    Majority and Confidential Voting in Uncontested Director Elections with a Director Resignation Policy. The By-Laws provide that, in an election in which the number of nominees for election equals the number of directors to be elected, director nominees must be elected by a majority of the votes cast.

 

    Special Meetings of Shareholders. The By-Laws allow shareholders of record of at least 20% of the voting power of the outstanding stock to call a special meeting of shareholders.

 

    Limitation on Management Directors. The Guidelines provide that the Chairman and CEO generally should be the only member of management to serve as a director.

 

    Director, Committee and Board Independence. 12 of the 13 director nominees are independent. All Board committees consist entirely of independent directors. (See “– Director Independence” on page 22 for more information about the Board’s process for determining director independence.)

 

    Leadership Structure.

 

    An independent director serves as Lead Director and has expansive substantive responsibilities and powers, including approval of meeting schedules and agendas;

 

    Independent directors chair the Board’s four standing committees; and

 

    The CEO serves as Chairman of the Board.

See additional discussion below under “– Board Leadership Structure.”

 

    Executive Sessions. At each in-person Board meeting, the independent directors meet without the CEO or any other members of management present to discuss substantive issues important to the Company, including matters concerning management. Generally, the Lead Director chairs these sessions. A committee chair leads Board discussion of a topic relevant to that committee’s remit.

 

    Annual Board, Committee and Director Self-Assessments. In consultation with the Lead Director, the Governance Committee establishes and oversees processes for annual Board and committee self-assessments and coordinates individual director self-assessments. The directors’ self-evaluation process includes candid, one-on-one discussions between the Chair of the Governance Committee and each independent director. The Board, committees and management use the results of these self-assessments in planning their work, ensuring director accountability, Board composition analysis and director recruitment decisions, governance decisions, and planning meetings and agendas.

 

    Shareholder Engagement. Consistent with our shareholder engagement philosophy, we engage with shareholders to seek their input on emerging issues and to address their questions and concerns. During the year, we engaged with a diverse mix of shareholders on a wide range of topics including, among others, strategy, capital allocation, business performance, executive compensation, corporate governance, sustainability and corporate social responsibility. These exchanges were candid and constructive. The Lead Director is available for consultation with our major shareholders.

 

   

Strategic Planning and Risk Oversight. Annually, the Board meets with management to discuss, understand and challenge our strategic plan’s short-term and long-term objectives. At its meetings during the balance of the year, the Board and management track progress against the strategic plan’s goals, consider opportunities in light of circumstances in the food and beverage industry and the economic environment, and monitor strategic and operational risks. The Company’s goals and executive compensation design are tied to a number of metrics critical to achieving the strategic plan and promoting long-term shareholder returns. More generally, the Board is responsible for oversight of strategy, broad corporate policy and overall performance of the Company through engaged oversight of management.

 

 

MONDELĒZ INTERNATIONAL    20


Table of Contents
 

See “– Oversight of Risk Management” below for additional information about the Board’s important role in risk oversight.

 

    Annual Chairman and CEO Evaluation. The Compensation Committee annually evaluates the Chairman and CEO’s performance. The Compensation Committee seeks input from the other directors regarding her performance before deciding her performance rating and compensation actions.

 

    Director Stock Ownership Guidelines.

 

    To promote alignment of directors’ and shareholders’ interests, we expect directors to hold Common Stock in an amount equal to five times the annual Board retainer within five years of joining the Board. As of March 8, 2017, all directors with at least five years of service on the Board met or exceeded this requirement.

 

    Equity grants made to directors on or after May 2010 take the form of deferred stock units. Distribution of actual shares occurs six months after the director ends his or her service as a director.

 

    Special Meetings of the Board. The By-Laws empower either the Lead Director or the Chairman to call special meetings of the Board.

 

    Limits on Board Memberships. The Guidelines provide that a director who is also a sitting CEO should not serve on the boards of directors of more than two public companies, including the Company’s Board. Other directors should not serve on the boards of directors of more than four public companies, including the Company’s Board. All of our directors are in compliance with this policy.

Board Leadership Structure

The By-Laws provide the Board flexibility in determining its leadership structure. The Board may appoint and designate the duties of a Lead Director and permit one person to hold the offices of both Chairman and CEO. Within that framework, the Board annually re-evaluates its leadership structure to determine the most appropriate leadership structure at that time. In considering which leadership structure will allow it to most effectively carry out its responsibilities and best represent shareholders’ interests, the Board takes into account various factors. Among them are our specific business needs, our operating and financial performance, industry conditions, economic and regulatory environments, the results of Board and committee annual self-assessments, the advantages and disadvantages of alternative leadership structures based on circumstances at that time and our corporate governance practices. In keeping with this principle, the Board may determine that the CEO also serves as Chairman, but if it does so, it also appoints an independent Lead Director with substantive responsibilities.

Current Leadership

 

    An independent director, Mr. Ketchum, serves as Lead Director;

 

    Independent directors chair the Board’s four standing committees; and

 

    The CEO, Ms. Rosenfeld, serves as Chairman of the Board.

The Board believes that this leadership structure provides an effective balance of strong leadership and independent oversight and best meets the Board’s current circumstances and anticipated needs. The Board also believes that this leadership structure enhances its oversight of risk management because the CEO, who is ultimately responsible for the Company’s risk management process, is in the best position as Chairman to discuss with the Board key risks and management’s responses to them.

Independent Director Leadership and Oversight

The Board believes that independent Board leadership and oversight are very important. Therefore, it established the substantive and expansive position of independent Lead Director for times when one individual serves as both Chairman and CEO. The independent directors annually select the Lead Director for a one-year term. The Board created the Lead Director position to provide independent leadership of the Board’s affairs on behalf of shareholders, increase the Board’s effectiveness, promote open communication amongst the independent directors and serve as the principal liaison between the Chairman and the other independent directors.

 

 

MONDELĒZ INTERNATIONAL    21


Table of Contents

Lead Director Role and Responsibilities

Under the Guidelines, the Lead Director, in consultation with the other independent directors, has the following duties and responsibilities:

 

    Serve as liaison between the independent directors and the Chairman and CEO;

 

    Seek input from the independent directors and advise the Chairman and CEO as to an appropriate annual schedule of and major agenda topics and content of related briefing materials for regular Board meetings prior to Board review and approval;

 

    Review and approve meeting agenda as well as the content of Board briefing materials. Review and approve the allocation of time amongst the Board and committee meetings;

 

    Preside at Board meetings at which the Chairman and CEO is not present, including executive sessions of the independent directors and, as appropriate, apprise the Chairman of the topics considered;

 

    Call meetings of the independent directors or of the Board as needed;

 

    Facilitate effective communication and interaction between the Board and management;

 

    Serve as an ex-officio non-voting member of all Board committees of which he or she is not a member;

 

    Provide input into the design of the annual Board, committee and director self-evaluations;

 

    Working with the Governance Committee, develop recommendations for committee structure, membership, rotations and chairs;

 

    Be available for consultation with the Company’s major shareholders; and

 

    Perform such other duties as the Board may from time to time delegate to the Lead Director.

Mr. Ketchum is the Lead Director. The independent directors first appointed him to that role in 2009 and have re-appointed him annually. The independent directors believe that he is an effective Lead Director due to his independence, leadership, global operating experience and corporate governance experience.

Chairman and CEO Role and Responsibilities

Ms. Rosenfeld has served as the CEO and as a director since June 2006. In conjunction with the Company’s 2007 spin-off from Altria Group, Inc., the Board concluded that Ms. Rosenfeld should also serve as Chairman because of her extensive knowledge of the Company, the food industry and the competitive environment in which we operate, her leadership experience and her ability and dedication to working closely with the Lead Director and the other independent directors. Based on current circumstances and anticipated needs, the Board continues to believe that having Ms. Rosenfeld serve as both Chairman and CEO promotes shareholders’ interests and contributes to the Board’s efficiency and effectiveness. The Board believes that she is generally in the best position to inform the independent directors about our global operations and critical business matters including the Company’s risk management process, and ensure alignment of our business and strategic plans. Further, the Board believes that combining these roles also expedites communication between Ms. Rosenfeld and the Board.

Director Independence

All directors are independent except for Ms. Rosenfeld, our Chairman and CEO

The Board determined that, under the Board’s categorical standards and NASDAQ’s listing standards, the following directors are independent: Lewis W.K. Booth, Charles E. Bunch, Lois D. Juliber, Mark D. Ketchum, Jorge S. Mesquita, Joseph Neubauer, Nelson Peltz, Fredric G. Reynolds, Christiana S. Shi, Patrick T. Siewert, Ruth J. Simmons and Jean-François M. L. van Boxmeer. In addition, Stephen F. Bollenbach was independent during the portion of 2016 he served on the Board. Irene B. Rosenfeld is not independent because she is a Mondelēz International employee.

The Guidelines require that at least 80% of the directors meet the NASDAQ listing standards’ independence requirements. In order to determine that a director is independent, the Board must affirmatively determine, after reviewing all relevant information, that a director has no relationship with Mondelēz International or any of its subsidiaries that would interfere with the exercise of independent judgment in carrying out the responsibilities of a

 

 

MONDELĒZ INTERNATIONAL    22


Table of Contents

director. To assist in this determination, the Board adopted categorical standards of director independence, including whether a director or a member of the director’s immediate family has any current or past employment or affiliation with Mondelēz International or the independent registered public accountants. These standards are generally consistent with the NASDAQ listing standards’ independence requirements.

Oversight of Risk Management

Our business faces various risks, including strategic, financial, operational and compliance risks:

 

    Management is responsible for the day-to-day assessment, management and mitigation of risk. Identifying, managing and mitigating our exposure to these risks and effectively overseeing this process are critical to our operational decision-making and annual planning processes.

 

    The Board has ultimate responsibility for risk oversight, but it has delegated primary responsibility for overseeing risk assessment and management to the Audit Committee. Pursuant to its charter, the Audit Committee reviews and discusses risk assessment and risk management guidelines, policies and processes utilized in our Enterprise Risk Management (“ERM”) process.

Our ERM process is ongoing and implemented at all levels of our operations and across business units to identify, assess, monitor, manage and mitigate risk. Our ERM process facilitates open communication between management and the Board so that the Board and committees understand key risks to our business and performance, our risk management process and how it is functioning, the participants in the process and the information gathered through the process. The Audit Committee annually reviews the functioning of our ERM process as well as the results of our annual ERM risk assessment.

Annually, the Audit Committee reviews and approves management’s recommendation for allocating to the full Board or another committee or retaining for itself responsibility for reviewing and assessing key risk exposures and management’s response to those exposures. Management provides reports to the Board and the appropriate committee in advance of meetings regarding key risks and the actions management has taken to monitor, control and mitigate these risks. Management also attends Board and committee meetings to discuss these reports and provide any updates. The committees report key risk discussions to the Board following their meetings. Board members may also further discuss the risk management process directly with members of management.

 

 

MONDELĒZ INTERNATIONAL    23


Table of Contents

During 2016, the Board and committees reviewed and assessed risks related to our business and operations as shown below. The Board annually reviews and sometimes reallocates responsibilities amongst committees. Accordingly, the allocation of responsibilities shown in this table may change during 2017.

 

Board   Audit  

Governance,

Membership and

Public Affairs

 

Human Resources

and Compensation(1)

  Finance

Strategy

 

Operations

 

Food safety (including supply chain and food defense)

 

Competition (including private label and customer concentration)

 

Capital structure

 

Financial strategies and transactions (including economic trends)

 

Labor relations (including human capital)

 

Transformation (including zero-based budgeting, supply chain reinvention and the coffee business transactions)

 

Financial statements

 

Financial reporting process

 

Accounting matters

 

Legal, compliance and regulatory matters (including non-financial compliance risks)

 

Business continuity/operations

 

Sovereign risk

 

Financial risk management (including foreign exchange, commodities exposure, and income and other taxes)

 

Health, safety and environmental

 

Governance programs

 

Board organization, membership and structure

 

Related person transactions

 

Social responsibility

 

Public policy

 

Mondelēz International’s public image and reputation

 

Compensation policies and practices for all employees (including executives)

 

Succession planning

 

Human resources policies and practices

 

Interest rate exposure

 

Enterprise funding and liquidity

 

(1) For a discussion about risk oversight relating to the compensation programs, see “Board Committees and Membership – Human Resources and Compensation Committee – How the Compensation Committee Manages Compensation-Related Risk.”

Codes of Conduct

Code of Business Conduct and Ethics for Non-Employee Directors

We have adopted the Code of Business Conduct and Ethics for Non-Employee Directors. It fosters a culture of honesty and integrity, focuses on areas of ethical risk, guides non-employee directors in recognizing and handling ethical issues and provides mechanisms to report unethical conduct. Annually, each non-employee director must acknowledge in writing that he or she has received, reviewed and understands the Code of Business Conduct and Ethics for Non-Employee Directors.

Code of Conduct

We have adopted the Code of Conduct that applies to all of our employees. It includes policies that cover ethical and legal practices for every aspect of the business. The Code of Conduct reflects values and contains important rules employees must follow when conducting business. The Code of Conduct is part of our global compliance and integrity program. The program provides training throughout the Company and encourages reporting of wrongdoing by offering anonymous reporting options and a non-retaliation policy.

We will disclose in the Corporate Governance section of our website any amendments to the Code of Business Conduct and Ethics for Non-Employee Directors or Code of Conduct and any waiver granted to an executive officer or director under these codes.

 

 

MONDELĒZ INTERNATIONAL    24


Table of Contents

Review of Transactions with Related Persons

Related Persons Policy and Procedures

The Board has adopted a written policy regarding “related person transactions.” In general, “related persons” are the following persons and their immediate family members: directors, executive officers and shareholders beneficially owning more than 5% of the outstanding Common Stock. A related person transaction is one in which Mondelēz International is a participant, the amount involved exceeds $120,000 and any related person had, has or will have a direct or indirect material interest. The Governance Committee reviews transactions that might qualify as related person transactions. If the Governance Committee determines that a transaction qualifies as a related person transaction, then the Governance Committee reviews and approves, disapproves or ratifies the transaction. The Governance Committee approves or ratifies only those related person transactions that are fair and reasonable to Mondelēz International and in our shareholders’ best interests. When it is not practicable or desirable to delay review of a transaction until a committee meeting, the chair of the Governance Committee reviews and approves or ratifies potential related person transactions and reports to the Governance Committee any transaction so approved or ratified. When reviewing and acting on a related person transaction under this policy, the Governance Committee considers, among other things:

 

    its commercial reasonableness;

 

    the materiality of the related person’s direct or indirect interest in it;

 

    whether it may involve an actual, or create the appearance of a, conflict of interest;

 

    its impact on the related person’s independence (as defined in the Guidelines and the NASDAQ listing standards); and

 

    whether it would violate any provision of the Code of Business Conduct and Ethics for Non-Employee Directors or the Code of Conduct.

Any member of the Governance Committee who is a related person with respect to a transaction under review may not participate in the deliberations or decisions regarding the transaction.

Review of Related Persons Transactions Since January 1, 2016

On January 25, 2017, BlackRock, Inc. (“BlackRock”), an investment management corporation, filed a Schedule 13G/A with the SEC reporting that it was a greater than 5% shareholder of the Company as of December 31, 2016. During 2016, BlackRock acted as an investment manager with respect to certain investment options under our U.S. retirement savings plans and Canadian, Irish and U.K. pension plans. BlackRock was selected as an investment manager by each plan’s designated authority for plan investments. BlackRock’s selection was based on the determination of each plan’s designated authority that the selection met applicable standards and that the fees were reasonable and appropriate. BlackRock’s fees, approximately $1.9 million during 2016, were paid from the plan assets of the specific plans for which it performed services. The plans expect to pay similar fees to BlackRock during 2017 for similar services. (Fees, based on plan asset value, are paid quarterly on a lagging basis.)

Communications with the Board

Information for shareholders and other parties interested in communicating with the Lead Director, the Board or the independent directors, individually or as a group, is available at www.mondelezinternational.com/Investors/corporate-governance#contacts. The Corporate Secretary:

 

    forwards communications relating to matters within the Board’s purview to the Lead Director or appropriate independent director(s) and communications relating to matters within a Board committee’s area of responsibility to the chair of the appropriate committee;

 

    forwards communications relating to ordinary business matters, such as suggestions, inquiries and consumer complaints, to the appropriate Mondelēz International executive or employee, but makes them available to any independent director who requests them; and

 

    does not forward or retain solicitations, junk mail and frivolous or inappropriate communications.

 

 

MONDELĒZ INTERNATIONAL    25


Table of Contents

Board Committees and Membership

The Governance Committee considers and makes recommendations to the Board regarding the Board’s committee structure and membership. The committee structure and membership is as follows:

 

    The Board establishes committee structure and designates the committee members and chairs following consideration of the Governance Committee’s recommendations.

 

    The Board has adopted a written charter for each standing committee. The charters define each committee’s roles and responsibilities.

 

    Independent directors comprise 100% of the Audit, Compensation, Finance and Governance Committees.

 

    All committee chairs are independent. Committee chairs approve agendas and materials for their committee meetings.

 

    Each committee meets regularly in executive session without management.

 

    Committees may retain outside legal, financial and other advisors at the Company’s expense.

Throughout 2016, the Board had, and currently has, four standing committees: Audit, Finance, Governance and Compensation.

Committee Membership(1)

 

Director   Audit(2)     Finance     Governance,
Membership and
Public Affairs
    Human
Resources and
Compensation
 
Lewis W.K. Booth             X               X  
Charles E. Bunch(3)                     X       X  
Lois D. Juliber                     X       Chair  
Mark D. Ketchum(4)     +       +       +       X  
Jorge S. Mesquita     X                          
Joseph Neubauer(5)             X       Chair          
Nelson Peltz             X       X          
Fredric G. Reynolds(6)     Chair       X                  
Christiana S. Shi(7)     X               X          
Patrick T. Siewert     X       Chair                  
Ruth J. Simmons                     X       X  
Jean-François M. L. van Boxmeer             X               X  
         
Total Number of Committee Meetings During 2016     11       7       6       10  

 

+ Mr. Ketchum, as Lead Director, is an ex-officio non-voting member of all committees of which he is not a member.
(1) The Board periodically reviews and rotates committee memberships. Accordingly, the membership shown in this table may change during 2017.
(2) Mr. Bollenbach served on the Audit Committee until he passed away on October 8, 2016.
(3) Mr. Bunch was appointed to the Board effective September 1, 2016. He became a member of the Compensation and Governance Committees in September 2016.
(4) Mr. Ketchum served as Chairman of the Governance Committee until July 2016. He became a member of the Compensation Committee in July 2016.
(5) Mr. Neubauer became the Chairman of the Governance Committee in July 2016.
(6) Mr. Reynolds became a member of the Finance Committee in May 2016.
(7) Ms. Shi became a member of the Audit and Governance Committees in May 2016.

 

 

MONDELĒZ INTERNATIONAL    26


Table of Contents

Meeting Attendance

We expect directors to attend all Board meetings, the Annual Meeting and all meetings of the committees on which they serve. We understand, however, that occasionally a director may be unable to attend a meeting:

 

    The Board held 14 meetings during 2016 and acted three times by unanimous written consent.

 

    During 2016, Mses. Rosenfeld, Shi and Simmons and Messrs. Bunch, Ketchum, Peltz, Reynolds and Siewert attended 100% of the meetings of the Board and all committees on which they served; and Ms. Juliber and Messrs. Bollenbach, Booth, Mesquita, Neubauer and van Boxmeer attended at least 81% of meetings of the Board and all committees on which they served.

 

    11 of 13 the directors elected to the Board at the 2016 Annual Meeting of Shareholders attended that meeting.

Audit Committee

The Board established the Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”). The Board has determined that all of the Audit Committee members are independent within the meaning of the NASDAQ listing standards and Rule 10A-3 of the Exchange Act. The Board also determined that all Audit Committee members are able to read and understand financial statements in accordance with NASDAQ listing standards and are financially literate in accordance with the New York Stock Exchange listing standards. The Board has determined that Fredric G. Reynolds and Patrick T. Siewert are audit committee financial experts” within the meaning of SEC regulations and has financial sophistication in accordance with NASDAQ listing standards. No Audit Committee member received any payments in 2016 from us other than compensation for service as a director.

Under its charter, the Audit Committee is responsible for overseeing our accounting and financial reporting processes and audits of our financial statements. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accountants, including review of their qualifications, independence and performance.

Among other duties, the Audit Committee also oversees:

 

    the integrity of our financial statements, our accounting and financial reporting processes, and our systems of internal control over financial reporting and safeguarding our assets;

 

    our compliance with legal and regulatory requirements;

 

    the performance of our internal auditors and internal audit functions; and

 

    our guidelines and policies with respect to risk assessment and risk management.

The Audit Committee has established procedures for the receipt, retention and treatment, on a confidential basis, of any complaints we receive. We encourage employees and third-party individuals and organizations to report concerns about our accounting controls, auditing matters or anything else that appears to involve financial or other wrongdoing. To report such matters, please visit http://www.mondelezinternational.com/about-us/compliance-and-integrity for information about reporting options.

 

Audit Committee Report for the Year Ended December 31, 2016

Management has primary responsibility for Mondelēz International’s financial statements and the reporting process, including the systems of internal control over financial reporting. Our role as the Audit Committee of the Mondelēz International Board of Directors is to oversee Mondelēz International’s accounting and financial reporting processes and audits of its financial statements. In addition, in 2016 we assisted the Board in its oversight of:

 

    Mondelēz International’s compliance with legal and regulatory requirements;

 

    Mondelēz International’s independent registered public accountants’ qualifications, independence and performance;

 

    The performance of Mondelēz International’s internal auditor and the internal audit function; and

 

    Mondelēz International’s risk assessment and risk management guidelines and policies.

 

 

MONDELĒZ INTERNATIONAL    27


Table of Contents

Our duties include overseeing Mondelēz International’s management, the internal audit department and the independent registered public accountants in their performance of the following functions, for which they are responsible:

Management

 

    Preparing Mondelēz International’s consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”);

 

    Assessing and establishing effective financial reporting systems and internal controls and procedures; and

 

    Reporting on the effectiveness of Mondelēz International’s internal control over financial reporting.

Internal Audit Department

 

    Assessing management’s system of internal controls and procedures; and

 

    Reporting on the effectiveness of that system.

Independent Registered Public Accountants

 

    Auditing Mondelēz International’s financial statements;

 

    Issuing an opinion about whether the financial statements conform with U.S. GAAP; and

 

    Annually auditing the effectiveness of Mondelēz International’s internal control over financial reporting.

Periodically, we meet, both independently and collectively, with management, the internal auditor and the independent registered public accountants to, among other things:

 

    Discuss the quality of Mondelēz International’s accounting and financial reporting processes and the adequacy and effectiveness of its internal controls and procedures;

 

    Review significant audit findings prepared by each of the independent registered public accountants and internal audit department, together with management’s responses; and

 

    Review the overall scope and plans for the audits by the internal audit department and the independent registered public accountants.

Prior to Mondelēz International’s filing of its Annual Report on Form 10-K for the year ended December 31, 2016 with the SEC, we also:

 

    Reviewed and discussed the audited financial statements with management and the independent registered public accountants;

 

    Discussed with the independent registered public accountants the items the independent registered public accountants are required to communicate to the Audit Committee in accordance with the applicable requirements of the Public Company Accounting Oversight Board;

 

    Received from the independent registered public accountants the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accountants’ communications with us concerning independence; and

 

    Discussed with the independent registered public accountants their independence from Mondelēz International, including reviewing non-audit services and fees to assure compliance with (i) regulations prohibiting the independent registered public accountants from performing specified services that could impair their independence, and (ii) Mondelēz International’s and the Audit Committee’s policies.

Based upon the review and discussions described in this report and without other independent verification, and subject to the limitations of our role and responsibilities outlined in this report and in our written charter, we recommended to the Board, and the Board approved, that the audited consolidated financial statements be included in Mondelēz International’s Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the U. S. Securities and Exchange Commission on February 24, 2017.

Audit Committee:

Fredric G. Reynolds, Chair

Jorge S. Mesquita

Christiana S. Shi

Patrick T. Siewert

 

 

MONDELĒZ INTERNATIONAL    28


Table of Contents

Pre-Approval Policies

The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent registered public accountants. These services may include audit services, audit-related services, tax services and other permissible non-audit services. The pre-approval authority details the particular service or category of service that the independent registered public accountants will perform. Management reports to the Audit Committee on the actual fees charged by the independent registered public accountants for each category of service.

During the year, circumstances may arise when it becomes necessary to engage the independent registered public accountants for additional services not contemplated in the original pre-approval authority. In those instances, the committee approves the services before we engage the independent registered public accountants. In case approval is needed before a scheduled committee meeting, the committee has delegated pre-approval authority to its Chair. The Chair must report on such pre-approval decisions at the committee’s next regular meeting.

The Audit Committee pre-approved all 2016 audit and non-audit services provided by the independent registered public accountants.

Independent Registered Public Accountants’ Fees

Aggregate fees for professional services rendered by our independent registered public accountants, PricewaterhouseCoopers LLP, for 2016 and 2015 were:

 

       2016        2015  
Audit Fees      $ 16,594,000        $ 15,745,000  
Audit-Related Fees        1,165,000          2,614,000  
Tax Fees        760,000          788,000  
All Other Fees        11,000          48,000  
    

 

 

      

 

 

 
Total      $ 18,530,000        $ 19,195,000  
    

 

 

      

 

 

 

Audit Fees include (a) the integrated audit of our consolidated financial statements, including statutory audits of the financial statements of our affiliates, and our internal control over financial reporting and (b) the reviews of our unaudited condensed consolidated interim financial statements (quarterly financial statements).

Audit-Related Fees include professional services in connection with employee benefit plan audits, due diligence related to acquisitions and divestitures and procedures related to various other audit and special reports.

Tax Fees include professional services in connection with tax compliance and advice.

All Other Fees include professional services in connection with seminars and compliance reviews.

All fees above include out-of-pocket expenses.

Finance Committee

The Board has determined that all of the Finance Committee members are independent within the meaning of the NASDAQ listing standards. The Finance Committee’s charter sets out its responsibilities, which include reviewing and making recommendations to the Board on significant financial matters, including:

 

    the Company’s long-term capital structure, including financing plans, projected financial structure, funding requirements, target credit ratings and return on invested capital;

 

    authorization of issuances, sales or repurchases of equity and debt securities;

 

    the Company’s external dividend policy and dividend recommendations;

 

    proposed acquisitions, divestitures, joint ventures, investments, asset sales and purchase commitments for services in excess of $100 million; and

 

    Board authorization and delegation levels with respect to financing matters.

 

 

MONDELĒZ INTERNATIONAL    29


Table of Contents

The Finance Committee also reviews and discusses with management:

 

    results of transactions such as acquisitions, divestitures, joint ventures, and investments in excess of $100 million; and

 

    the cash-flow impact of non-debt obligations including funding pension and other post-retirement benefit plans.

Governance, Membership and Public Affairs Committee

The Board has determined that all of the Governance Committee members are independent within the meaning of the NASDAQ listing standards. The Governance Committee’s charter sets out its responsibilities. Among its responsibilities are:

 

    review candidates’ qualifications for Board membership consistent with criteria determined by the Board;

 

    consider the performance and suitability of incumbent directors for re-election and recommend to the Board a slate of nominees for each annual meeting of shareholders and candidates to be appointed to the Board as necessary to fill vacancies and newly created directorships;

 

    make recommendations to the Board as to directors’ independence and related party transactions;

 

    make recommendations to the Board concerning the functions, composition and structure of the Board and its committees;

 

    recommend frequency of Board meetings and content of Board agendas;

 

    advise and make recommendations to the Board on corporate governance matters, including the Guidelines and the annual self-assessments process for the Board, its committees and its directors;

 

    administer the Code of Business Conduct and Ethics for Non-Employee Directors and monitor directors’ compliance with our stock ownership guidelines;

 

    oversee policies and programs related to corporate citizenship, social responsibility and public policy issues significant to Mondelēz International such as sustainability and environmental responsibility; food labeling, marketing and packaging; and philanthropic and political activities and contributions; and

 

    monitor issues, trends, internal and external factors and relationships that may affect Mondelēz International’s public image and reputation.

Human Resources and Compensation Committee

Human Resources and Compensation Committee Independence, Interlocks and Insider Participation

The Board determined that all Compensation Committee members are independent within the meaning of the NASDAQ listing standards, including the heightened independence criteria for Compensation Committee members. All are “non-employee” directors under SEC rules and outsider directors under the Internal Revenue Code of 1986, as amended (the “Code”). None of the Compensation Committee’s members is or was:

 

    an officer or employee of Mondelēz International;

 

    a participant in a “related person” transaction required to be disclosed under Item 404 of Regulation S-K (for a description of our policy on related person transactions, see “Corporate Governance – Review of Transactions with Related Persons” above); or

 

    an executive officer of another entity at which one of our executive officers serves on the board of directors or the Compensation Committee.

Responsibilities

The Compensation Committee’s charter sets out its responsibilities. Among its responsibilities are to:

 

    establish our executive compensation philosophy;

 

    determine the group of companies the Compensation Committee uses to benchmark executive and director compensation;

 

    assess the appropriateness and competitiveness of our executive compensation programs;

 

 

MONDELĒZ INTERNATIONAL    30


Table of Contents
    review and approve the CEO’s goals and objectives, evaluate the CEO’s performance against those goals and objectives and, based upon its evaluation, determine both the elements and amounts of the CEO’s compensation;

 

    review and approve the compensation of the CEO’s direct reports and other officers subject to Section 16(a) of the Exchange Act;

 

    determine annual incentive compensation, equity grants and other long-term incentive grants and awards under our incentive plan;

 

    determine the Company’s policies governing option and other stock grants;

 

    make recommendations to the Board regarding incentive plans requiring shareholder approval, and approve eligibility for and design of executive compensation programs implemented under those plans;

 

    review our compensation and benefits policies and practices as they relate to our risk management practices and risk-taking incentives and review proposed material changes to those policies and practices;

 

    review periodically the Company’s key human resources policies and practices related to organizational engagement and effectiveness, talent sourcing strategies and employee development programs;

 

    oversee the management development and succession planning process (including emergency planning) for the CEO and her direct reports;

 

    review key human resource policies and practices, including our policies, objectives and programs related to diversity and periodically review our diversity performance;

 

    monitor executive officers’ compliance with our stock ownership guidelines;

 

    advise the Board regarding the compensation of independent directors;

 

    review and discuss with management the Compensation Discussion and Analysis and prepare and approve the Compensation Committee’s report to shareholders included in our Proxy Statement; and

 

    assess the independence of the Compensation Committee’s outside advisors and at least annually assess whether the work of its compensation consultants has raised any conflict of interest that must be disclosed in our annual report and Proxy Statement.

The Compensation Committee has the authority to delegate any of its responsibilities to the committee’s Chair, another Compensation Committee member or a subcommittee of Compensation Committee members, unless prohibited by law, regulation or any NASDAQ listing standard.

The Compensation Committee’s Use of an Independent Compensation Consultant

The Compensation Committee retains an independent compensation consultant to assist it in evaluating executive compensation programs and advise it regarding the amount and form of executive and director compensation. It uses a consultant to provide additional assurance that our executive and director compensation programs are reasonable, competitive and consistent with our objectives. It directly engages the consultant under an engagement letter that the Compensation Committee reviews at least annually.

Since September 2009, the Compensation Committee has retained Compensation Advisory Partners, LLC (“CAP”) as its independent compensation consultant. Annually, the Compensation Committee reviews CAP’s engagement. During 2016, CAP provided the Compensation Committee advice and services, including:

 

    regularly participating in Compensation Committee meetings including executive sessions that exclude management;

 

    consulting with the Compensation Committee Chair and being available to consult with other Committee members between committee meetings;

 

    providing competitive peer group compensation data for executive positions and evaluating how the compensation we pay the NEOs (as described under “Compensation Discussion and Analysis”) relates both to the Company’s performance and to how the peers compensate their executives;

 

    analyzing “best practices” and providing advice about design of the annual and long-term incentive plans, including selecting performance metrics;

 

 

MONDELĒZ INTERNATIONAL    31


Table of Contents
    advising on the composition of the Compensation Survey Group and the Performance Peer Group (as described in the “Compensation Discussion and Analysis”) that we use for benchmarking pay and performance;

 

    updating the Compensation Committee on executive compensation trends, issues and regulatory developments; and

 

    assessing and recommending non-employee director compensation.

For the year ended December 31, 2016, CAP provided no services to Mondelēz International other than consulting services to the Compensation Committee regarding executive and non-employee director compensation.

At least annually, the Compensation Committee reviews the current engagements and the objectivity and independence of the advice that CAP provides to it on executive and non-employee director compensation. The Compensation Committee considered the six specific independence factors adopted by the SEC and NASDAQ and determined that CAP is independent and CAP’s work did not raise any conflicts of interest.

Executive Officers Have a Limited Role in the Compensation Committee’s Determination of Executive Compensation and Recommendations to the Board Regarding Non-Employee Director Compensation

 

    Each year, the CEO presents compensation recommendations for her direct reports and the other executive officers, including the NEOs. The Compensation Committee reviews and discusses these recommendations with the CEO, but retains full discretion over the compensation of these employees.

 

    The CEO does not make recommendations or participate in deliberations regarding her own compensation.

 

    Executive officers do not play a role in determining or recommending the amount or form of non-employee director compensation.

How the Compensation Committee Manages Compensation-Related Risk

As it does each year, in 2016, the Compensation Committee evaluated whether our compensation designs, policies and practices operate to discourage our executive officers and other employees from taking unnecessary or excessive risks. As described in the “Compensation Discussion and Analysis,” we design our compensation to incentivize executives and other employees to achieve the Company’s financial and strategic goals as well as individual performance goals that promote long-term shareholder returns. Our compensation design discourages our executives and other employees from taking excessive risks for short-term benefits that may harm the Company and our shareholders in the long-term. The Compensation Committee uses various strategies to mitigate risk, including:

 

    using both short-term and long-term performance-based compensation so that executives do not focus solely on short-term performance;

 

    weighting executive compensation heavily toward long-term incentives to encourage sustainable shareholder value and accountability for long-term results;

 

    using multiple relevant performance measures in our incentive plan designs, so that executives do not place undue importance on one measure which could distort the results that we want to incent;

 

    weighting business and individual performance in our annual cash incentive program so that executives and employees do not have too narrow a focus;

 

    capping the amount of incentives that may be awarded or granted;

 

    retaining discretion to reduce incentive awards based on unforeseen or unintended consequences and clawback compensation in specified circumstances;

 

    requiring our top executives to hold a significant amount of their compensation in Common Stock and prohibit them from hedging, pledging or engaging in short sales of their Common Stock;

 

    not using employment contracts;

 

    not backdating or re-pricing option grants; and

 

    not paying severance benefits on change in control events unless the affected executive is first involuntarily terminated without cause or terminates due to good reason.

 

 

MONDELĒZ INTERNATIONAL    32


Table of Contents

In addition, the Audit Committee oversees our ethics and compliance programs that educate executives and other employees on appropriate behavior and the consequences of inappropriate actions. These programs not only drive compliance and integrity but also encourage employees with knowledge of bad behavior to report concerns by providing multiple reporting avenues while protecting reporting employees against retaliation.

CAP also reviewed the Compensation Committee’s risk analysis, including the underlying procedures, and confirmed the Compensation Committee’s conclusion below.

In light of these analyses, the Compensation Committee believes that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company.

Compensation of Non-Employee Directors

We strive to recruit and retain highly qualified non-employee directors who will best represent our shareholders’ interests. Each year our Compensation Committee reviews non-employee director compensation to ensure that the compensation we offer supports our objective without being excessive.

More specifically, CAP annually benchmarks our non-employee director compensation against our Compensation Survey Group and other Fortune 100 companies and assesses the appropriateness of the form and amount of our non-employee director compensation. CAP provides the Compensation Committee with this data and its independent assessment of the competitiveness of our non-employee directors’ compensation. The Compensation Committee determines whether to recommend any changes to the compensation. Based upon CAP’s 2016 review and recommendation, the Compensation Committee recommended to the Board and the Board determined that no changes would be made to non-employee compensation in 2016.

Additionally, our shareholder-approved Amended and Restated 2005 Performance Incentive Plan caps at $500,000 the maximum fair market value of Common Stock grants made to any non-employee director in any calendar year. All stock grants made in 2016 to non-employee directors were significantly below this amount. See the “2016 Non-Employee Director Compensation” and “– Non-Employee Director Equity Awards” tables below for specific values.

We do not pay a Company employee who also serves as a director any additional compensation for serving as a director. Currently, Irene B. Rosenfeld is the only director who is a Company employee.

Summary of 2016 Compensation Elements

 

Annual Compensation Elements  

Amount(1)

($)

 
Board Retainer     110,000  
Lead Director Retainer     30,000  
Audit Committee Chair Retainer     25,000  
Human Resources and Compensation Committee Chair Retainer     25,000  
Governance, Membership and Public Affairs Committee Chair Retainer     20,000  
Finance Committee Chair Retainer     15,000  
Annual Equity Grant Value     160,000  

 

(1) If the Board appoints a non-employee director during the year (i.e., other than at the annual meeting of shareholders), we pay that director prorated compensation for the balance of the year. We prorate cash compensation based on the number of days remaining in the calendar year. We prorate the annual equity grant value based on the number of months until the next annual meeting of shareholders over a denominator of twelve months.

Cash Compensation – Board, Lead Director and Committee Chair Retainers

We pay our non-employee directors their cash retainers quarterly. The Mondelēz International, Inc. 2001 Compensation Plan for Non-Employee Directors allows directors to defer 25%, 50%, 75% or 100% of their cash retainers into notional unfunded accounts. These accounts mirror certain of the investment options under the Thrift 401(k) Plan offered to U.S. salaried employees.

 

 

MONDELĒZ INTERNATIONAL    33


Table of Contents

Equity Compensation – Annual Equity Grant

We make our annual equity grants to our non-employee directors following the annual meeting of shareholders.

We make non-employee director annual equity grants in the form of vested deferred stock units. We distribute actual shares six months after the director ends his or her service as a director. When the Company pays a dividend on its Common Stock, we accrue the value of the dividends that the Company would have paid on the deferred stock units. Six months after the director ends his or her service as a director, we issue shares to the director equal to the accumulated accrued value.

Stock Ownership Guidelines

To align our non-employee directors’ and our shareholders’ interests, we expect our non-employee directors to hold shares of our Common Stock. The following chart summarizes our expectations:

 

Key Provisions   Explanation of Key Provisions
Ownership Expectation  

       Amount equal to five times the annual board cash retainer (i.e., $550,000).

Time to Meet Expectation  

       Five years from becoming a director.

Shares Counted Toward Ownership  

       Common Stock, including sole ownership, deferred stock units and accounts over which the director has direct or indirect ownership or control.

Holding Expectation  

       No specific holding expectation. However, actual shares for underlying deferred stock units are not distributed until six months after the director ends his or her service as a director.

If a non-employee director does not meet these expectations, the Lead Director will consider the non-employee director’s particular situation and may take action as he deems appropriate. As of March 8, 2017, each director serving for at least five years met or exceeded the ownership expectation.

Company Match for Director Charitable Contributions

Non-employee directors are eligible to participate in a Mondelēz International Foundation (the “Foundation”) Matching Gift program. Each year, the Foundation will generally match up to $15,000 in contributions by a non-employee director to a 501(c)(3) non-profit organization(s).

2016 Non-Employee Director Compensation Table

 

Name  

Fees Earned
or Paid in
Cash
(1)

($)

    Stock Awards(2)
($)
    All Other
Compensation
(3)
($)
   

Total

($)

 
Bollenbach, Stephen     84,891       160,031             244,922  
Booth, Lewis     110,000       160,031       15,000       285,031  
Bunch, Charles     36,467       120,027             156,494  
Juliber, Lois     135,000       160,031       12,500       307,531  
Ketchum, Mark     151,087       160,031       15,000       326,118  
Mesquita, Jorge     110,000       160,031             270,031  
Neubauer, Joseph     118,913       160,031             278,944  
Peltz, Nelson     110,000       160,031             270,031  
Reynolds, Fredric     135,000       160,031       15,000       310,031  
Shi, Christiana     109,093       226,723             335,816  
Siewert, Patrick     125,000       160,031             285,031  
Simmons, Ruth     110,000       160,031             270,031  
van Boxmeer, Jean-François     110,000       160,031             270,031  

 

(1) Includes all retainer fees earned or deferred pursuant to the 2001 Compensation Plan for Non-Employee Directors. Non-employee directors do not receive meeting fees.

 

 

MONDELĒZ INTERNATIONAL    34


Table of Contents
(2) The amounts shown in this column represent the full grant date fair value of the deferred stock unit grants in 2016 as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 to the consolidated financial statements contained in our 2016 Form 10-K. The deferred shares are immediately vested, but receipt of the shares is deferred until six months after the director no longer serves on the Board. The 2016 Non-Employee Director Equity Awards Table below provides further detail on the non-employee director grants made in 2016 and the number of stock awards outstanding as of December 31, 2016.
(3) Represents Foundation contributions made as part of the Company’s Foundation Matching Gift Program. Annual match limits are based on gift date, not the match date by the Foundation. As such, the amounts reflected may represent gifts that directors made in 2015, but the Foundation did not match until 2016.

Non-Employee Director Equity Awards Table

 

Name  

All Stock Awards:
Number of
Shares of Stock
or Units

Granted in 2016

(#)

   

All Stock Awards:
Grant Date Fair
Value of Stock
or  Units

Granted in 2016(1)

($)

   

Outstanding
Stock

Awards as of
December 31,

2016

(#)

 
Bollenbach, Stephen     3,701       160,031       19,943  
Booth, Lewis     3,701       160,031       19,943  
Bunch, Charles(2)     2,731       120,027       2,743  
Juliber, Lois     3,701       160,031       40,203  
Ketchum, Mark     3,701       160,031       44,698  
Mesquita, Jorge     3,701       160,031       20,277  
Neubauer, Jospeh     3,701       160,031       10,001  
Peltz, Nelson     3,701       160,031       13,606  
Reynolds, Fredric     3,701       160,031       29,092  
Shi, Christiana(3)     5,224       226,723       5,273  
Siewert, Patrick     3,701       160,031       20,085  
Simmons, Ruth     3,701       160,031       19,943  
van Boxmeer, Jean-François     3,701       160,031       25,571  

 

(1) The amounts shown in this column represent the full grant date fair value of the deferred stock units granted in 2016 as computed in accordance with FASB ASC Topic 718.
(2) In accordance with our policy (described above in Footnote 1 to the Annual Compensation Elements table), Mr. Bunch received a prorated deferred stock unit grant of 2,731 units in connection with his appointment as a director effective September 1, 2016.
(3) In accordance with our policy (described above in Footnote 1 to the Annual Compensation Elements table), Ms. Shi received two deferred stock unit grants in 2016. In connection with her appointment as a director effective January 4, 2016, she received a prorated deferred stock unit grant of 1,523 units and her second grant, received simultaneously with all of the other non-employee directors in connection with the 2016 annual meeting of shareholders, was the annual deferred stock unit grant of 3,701 units on May 18, 2016.

 

 

MONDELĒZ INTERNATIONAL    35


Table of Contents

Compensation Discussion and Analysis

In the Overview section of this Compensation Discussion and Analysis (“CD&A”), we highlight:

 

    How our financial performance impacted our NEOs’ 2016 annual incentive awards and performance share unit awards for the 2014-2016 performance cycle;

 

    Our 2016 say-on-pay shareholder advisory vote, which showed strong support for our executive compensation program and prior year actions;

 

    Our 2016 executive compensation program changes to refine the alignment with our strategies and objectives; and

 

    Our 2016 NEOs.

In the remainder of this CD&A, we describe:

 

    How our executive compensation design principles and governance practices align with our shareholders’ interests;

 

    Our executive compensation program design rationale;

 

    Our individual executive compensation program elements, including compensation paid to our NEOs in 2016; and

 

    Our clawback, trading restrictions and anti-hedging, anti-pledging and compensation deductibility policies.

Overview

How Our Financial Performance Impacted Our NEOs’ 2016 Annual Cash Incentive Program Awards and Performance Share Unit Awards Subject to the 2014-2016 Performance Cycle

2016 Annual Cash Incentive Program Awards

Our 2016 financial performance included:

 

    Below target Organic Net Revenue Growth,

 

    Significantly above target Defined Earnings Per Share (“EPS”),

 

    Slightly below target Defined Free Cash Flow,

 

    Significantly above target improvement in our Cash Conversion Cycle, and

 

    Below target Market Share performance.

Overall, we achieved an above target performance rating of 123% under the 2016 Annual Cash Incentive Program.

 

LOGO

See “– Individual Executive Compensation Program Elements – Financial Measure Definitions” for definitions of these performance measures and “– Individual Executive Compensation Program Elements – Annual Cash Incentive Program” for more information about our Annual Cash Incentive Program, including our performance targets under the program.

 

 

MONDELĒZ INTERNATIONAL    36


Table of Contents

Performance Share Unit Awards for the 2014-2016 Performance Cycle

The results for the 2014-2016 performance cycle included:

 

    Below threshold Organic Net Revenue Growth,

 

    Above target Adjusted Return on Invested Capital (“ROIC”) Increase, and

 

    Above target annualized TSR relative to the median of the applicable Performance Peer Group (“Annualized Relative TSR”).

Overall, we achieved an above target performance rating of 106% for the performance share unit awards subject to the 2014-2016 performance cycle.

 

LOGO

See “– Individual Executive Compensation Program Elements – Financial Measure Definitions” for definitions of these performance measures and “– Individual Executive Compensation Program Elements – Equity Program” for more information about the performance share units, including the performance targets.

Our 2016 Shareholder Say-on-Pay Vote Demonstrated Strong Support for Our Executive Compensation Program

Nearly 95% of the votes cast in our 2016 shareholder advisory say-on-pay voted to approve our executive compensation program and we made no changes to our executive compensation program directly in response to the 2016 shareholder advisory say-on-pay vote. Based on this vote as well as input from and discussions with our shareholders, we believe our shareholders support our overall compensation principles, programs and practices.

We Changed the 2016 Executive Compensation Program to Refine the Alignment with Our Strategies and Objectives

The Compensation Committee regularly assesses our executive compensation program in light of our strategy, market practices and shareholder input. For 2016, we made changes to our executive compensation program to refine the alignment with our strategies and objectives. We summarize the changes below.

2016 Annual Cash Incentive Program Changes

 

Item   Change   Rationale
Performance Measures   Added new Cash Conversion Cycle metric weighted at 10% of the financial performance rating. This metric measures the time we take to sell inventory, collect receivables and pay our suppliers.  

Increase focus on:

 

      ongoing cash management, and

 

      year-end cash flow results.

 

 

MONDELĒZ INTERNATIONAL    37


Table of Contents

Item

  Change     Rationale
Performance Measure Weightings   Changed weightings for the financial performance rating as follows:    

Further align weightings with the Company’s 2016 strategic objectives.

  Performance Measure     2016       2015      
  Organic Net Revenue Growth     40%       35%      
  Defined EPS     40%       45%      
  Defined Free Cash Flow     10%       20%      
    Cash Conversion Cycle     10%       0%      
    Total Weighting     100%       100%      
    Overlay–Change in Net Revenue Weighted Market Share    
Up to +/-
15 pp
 
 
   
     +/-10
    pp
 
 
   

Our 2016 NEOs

 

Name   Title(1)
Irene Rosenfeld   Chairman and CEO
Brian Gladden   Executive Vice President and Chief Financial Officer
Gustavo Abelenda(2)   Executive Vice President and President, Latin America
Timothy Cofer   Executive Vice President and Chief Growth Officer
Roberto Marques   Executive Vice President and President, North America

 

(1) Reflects each NEO’s title as of December 31, 2016.

 

(2) Gustavo Abelenda is an NEO due to his 2016 compensation levels and because he was an executive officer of the Company on December 31, 2016. Mr. Abelenda retired from the Company on January 1, 2017.

 

 

MONDELĒZ INTERNATIONAL    38


Table of Contents

Our Executive Compensation Design Principles and Governance Practices

Reflect Best Practices to Protect and Promote our Shareholders’ Interests

Design Principles.

 

What we do:

  What we don’t do:

   Link pay to performance and put pay at risk. We reward our NEOs based upon the value they add. 90% of our CEO’s compensation and 80% of our other NEOs’ compensation is at-risk.

 

   Reward long-term sustainable performance. 75% of our CEO’s compensation and 63% of our other NEOs’ compensation is based on long-term performance.

 

   Target compensation at or near the median of our peer group. We compensate fairly and competitively.

 

   Set substantive performance goals at the beginning of performance cycles and hold executives accountable for delivering on those targets.

 

   Intend that most performance-based compensation be tax deductible under Section 162(m) of the Code.

 

 

   Incent short-term results to the detriment of long-term goals and results.

 

   Incent excessively risky business strategies.

Governance Practices.

 

What we do:

  What we don’t do:

   Require significant stock ownership. Our stock ownership requirements are comparable to, or stricter than, our Compensation Survey Group companies.

 

   Require executives to retain equity compensation. NEOs must hold net shares upon vesting and net shares acquired upon exercising stock options for at least one year regardless of their ownership level.

 

   Provide for “clawbacks”. We can recoup incentive compensation upon certain financial restatements.

 

   Prohibit hedging, pledging and short sales of Common Stock.

 

   Compensation Committee retains an independent compensation consultant. The consultant does not provide services to the Company other than advising the Compensation Committee.

 

   Provide NEOs with tax gross-ups for perquisites or in the event of a change in control. Taxes are our NEOs’ responsibility.

 

   Re-price underwater stock options. We do not re-price outstanding stock options, whether vested or unvested.

 

   Pay dividends on unvested performance share units unless and until shares are earned. We do not pay accrued dividend equivalents unless and until the applicable performance targets are met and we award shares.

 

   Enter into employment agreements with our NEOs. We neither enter into employment agreements with our NEOs, nor guarantee salary increases.

 

   Provide separate, enhanced benefit plans for our NEOs. Our NEOs generally participate in the same retirement, health and welfare plans broadly available to all U.S. salaried employees.

   Conduct an annual compensation risk assessment.

 

   Engage with shareholders. We regularly engage shareholders through individual and small-group meetings and major investor conferences. We take input from shareholders into account.

 

   Offer limited number of perquisites. We offer a limited number of perquisites comparable to our Compensation Survey Group.

 

   Pay severance and vest equity only upon a “double trigger” in the event of a change in control. Our “double trigger” requires both a change in control and termination of the executive’s employment either without cause or for good reason.

 

 

 

MONDELĒZ INTERNATIONAL    39


Table of Contents

How We Design Our Executive Compensation Program

The Compensation Committee oversees our executive compensation program focusing on the program’s primary goals:

  1. Attract, retain and motivate talented executives and develop world-class business leaders;

 

  2. Support business strategies that promote superior long-term shareholder returns;

 

  3. Align pay and performance by making a significant portion of our executives’ compensation dependent on achieving financial and other critical strategic and individual goals; and

 

  4. Align our executives’ and shareholders’ interests through equity-based incentive grants that link executive compensation to sustained and superior TSR and stock ownership requirements.

Our executive compensation program design supports these goals by:

Using a Mix of Fixed and Variable Compensation. We heavily weight the mix toward variable compensation to attract, retain and motivate top-performing executives, as well as to appropriately align compensation levels with achieving relevant financial and strategic goals.

Using a Mix of Equity and Cash Incentives. We heavily weight the mix toward equity that vests over multiple years to focus executives on achieving long-term TSR that exceeds our peers’ median and to align the mix with the interests of our shareholders.

Compensating Based on Individual Performance. We consider an executive’s individual performance in making compensation decisions.

Requiring Our Executives to be Significant Shareholders. We require our executives to:

 

    Own specified levels of Common Stock to align their interests with those of our shareholders; and

 

    Hold for one year net shares (shares remaining after the payment of taxes and any exercise price) received upon the exercise of stock options, the vesting of restricted stock and deferred stock units and the award of shares related to performance share units.

Benchmarking our Compensation and Performance Against Relevant Comparators. We use two groups of companies to benchmark our executives’ compensation and assess our relative performance:

 

    Our Compensation Survey Group for compensation benchmarking (global peers of similar size who are primarily consumer-facing), and

 

    Our Performance Peer Group to assess relative performance (industry peers).

With CAP’s input, the Compensation Committee reviews the composition of these comparator groups to ensure the composition of each remains appropriate. See “– Composition and Purpose of our Compensation Survey Group” and “– Composition and Purpose of our Performance Peer Group” below for additional information.

Paying Competitively. Each year, we compare our compensation programs with those of our Compensation Survey Group. We assess whether our executive compensation and target compensation levels are consistent with market practice. In addition, we compare our financial and TSR performance against our Performance Peer Group. The Performance Peer Group comparison allows us to link long-term incentive compensation to the delivery of superior financial results relative to industry peers.

Composition and Purpose of our Compensation Survey Group

In constructing our Compensation Survey Group, the Compensation Committee considers global companies with the following attributes:

 

    Similar revenue size;

 

    Similar market capitalization;

 

 

MONDELĒZ INTERNATIONAL    40


Table of Contents
    Primarily focused on food/beverage or consumer/household products or are consumer-facing companies;

 

    Recognized for their industry leadership and brand recognition;

 

    Executive positions similar in breadth, complexity and/or scope of responsibility; and

 

    Competitors for executive talent.

The Compensation Committee also considers companies outside the consumer products industry based on the following criteria:

 

    Similar or higher revenue size;

 

    Strong global presence;

 

    World-class marketing capabilities specifically focused on the consumer;

 

    Manufacturing companies; and

 

    Multiple lines of business.

Based on these characteristics and input from CAP and management, the Compensation Committee selected the following companies for our 2016 Compensation Survey Group, which is unchanged from 2015. The median annual revenue of these companies at the time of our 2016 benchmarking was $33.4 billion, which was comparable to our revenue size at that time.

 

3M Company

  

Kimberly-Clark Corporation

Abbott Laboratories

  

McDonald’s Corporation

The Coca-Cola Company

  

Nestlé S.A.

Colgate-Palmolive Company

  

Nike, Inc.

Danone S.A.

  

PepsiCo, Inc.

The Dow Chemical Company

  

Pfizer Inc.

E. I. du Pont de Nemours and Company

  

Philip Morris International Inc.

General Mills, Inc.

  

The Procter & Gamble Company

Johnson & Johnson

  

Unilever PLC

Kellogg Company

  

United Parcel Service, Inc.

In determining appropriate compensation levels for our executives, the Compensation Committee reviews compensation levels for comparable roles at companies in our Compensation Survey Group. Aon Hewitt (“Aon”) provides the underlying compensation data. At the request of the Compensation Committee, CAP reviews and evaluates Aon’s data.

Competitive Positioning

The Compensation Committee’s compensation strategy is to benchmark total direct compensation (at target levels), including base salary and annual and long-term incentives, at or near the median of our Compensation Survey Group. Company and individual performance will determine whether actual compensation received is above or below the Compensation Survey Group median.

To further validate our compensation levels, using data provided by CAP, the Compensation Committee retrospectively evaluates how well we aligned pay-for-performance compared with our Compensation Survey Group.

Composition and Purpose of our Performance Peer Group

Companies primarily focused on the production and marketing of food and non-alcoholic beverages comprise our 2016 Performance Peer Group listed below. We directly compete with these companies and comparing our performance relative to the group’s performance provides a valuable measure of our performance. Specifically, we compare our annualized TSR with the median annualized TSR of our Performance Peer Group to assess our results on the TSR performance measure for our performance share units. This group of companies is less relevant when we compare compensation levels for certain executive positions because differences in size and complexity reduce comparability. Beginning with performance share units granted in 2016, we added The Kraft Heinz Company to our

 

 

MONDELĒZ INTERNATIONAL    41


Table of Contents

Performance Peer Group. The company was formed in 2015 following the merger of Kraft Foods Group and H.J. Heinz Holding Corporation and competes in similar markets with an expanded brand portfolio and global reach.

 

Campbell Soup Company

  

Kellogg Company

The Coca-Cola Company

  

The Kraft Heinz Company

Colgate-Palmolive Company

  

Nestlé S.A.

Danone S.A.

  

PepsiCo, Inc.

General Mills, Inc.

  

The Procter & Gamble Company

The Hershey Company

  

Unilever PLC

Our Performance Peer Group consists of 12 companies, 9 of which are also in our Compensation Survey Group. The groups differ slightly because companies in our Performance Peer Group are primarily food and non-alcoholic beverage companies. We include companies in our Performance Peer Group regardless of revenue size or market capitalization.

Overall Target Compensation Mix

The charts below compare the 2016 total target compensation mix for our CEO and, on average, our other NEOs with the average of the companies in our Compensation Survey Group. This compensation mix includes base pay, target annual incentive and equity program. The charts show that our target compensation mix aligns well with that of our Compensation Survey Group with a slightly stronger emphasis on the equity program than our peers.

 

LOGO

LOGO

 

 

MONDELĒZ INTERNATIONAL    42


Table of Contents

Overview of Our 2016 Executive Compensation Program Elements and Objectives

This table identifies and describes the specific elements of our 2016 executive compensation program for our NEOs, including each element’s program objectives. A more detailed discussion of these elements, including definitions of the financial measures used in our Annual Cash Incentive Program and performance share unit grants, follows this table. We discuss individual compensation decisions for each NEO under “– Individual Executive Compensation Program Elements.”

 

Element   Description   Program Objectives

Annual Cash Compensation

       
Base Salary   Ongoing cash compensation based on the NEO’s role, responsibilities, market data and individual performance.  

       Attract and retain talent

 

       Drive top-tier performance through individual contribution

Annual Cash Incentive Program   Annual incentive with a target award for each NEO. Actual cash awards may be higher or lower than target, based on Company business and individual performance.  

       Attract, motivate and retain talent

 

       Drive top-tier performance

 

–       Across entire organization

 

–       Through individual contribution

         

Equity Program

       

Performance

Share Units

  Each NEO receives a target annual grant of performance share units at the outset of a three-year performance cycle based upon the NEO’s role and long-term performance. Actual awards are determined once the performance cycle ends by evaluating performance against pre-determined performance targets. Awards range between 0% and 200% of target based on our performance. We deliver awards in Common Stock.  

       Attract, motivate and retain talent

 

       Drive top-tier performance

 

–       Across entire organization

 

–       Focus on long-term sustained success

 

       Enhance stock ownership/align with shareholders’ interests

Non-Qualified Stock Options  

Each NEO receives an annual grant of non-qualified stock options (“NQSOs”) based upon the NEO’s role, long-term performance and potential for advancement. The NQSOs vest:

 

       33% on the first and second anniversary of the grant date, and

 

       34% on the third anniversary of the grant date.

 

       Attract, motivate and retain talent

 

       Drive top-tier performance through long-term individual contribution

 

       Enhance stock ownership/align with shareholders’ interests

 

       Link realized value to stock appreciation

Deferred Stock Units   We grant deferred stock units to NEOs only in specific new hire and retention situations. The vesting periods for deferred stock unit grants may vary but are typically three years.  

       Attract, motivate and retain talent

 

       Enhance stock ownership/align with shareholders’ interests

         

Deferred Compensation and Executive Perquisites

   

Voluntary Non-Qualified

Deferred Compensation

Plan

  Allows NEOs (and other U.S.-based executives) to defer, on a pre-tax basis, certain defined compensation elements with flexible distribution options.  

       Attract and retain talent

 

       Provide opportunity to build future financial security

Executive Perquisites  

Generally limited to:

 

       executive physicals (discontinued early 2017);

 

       car allowance; and

 

       financial counseling allowances.

 

We require use of a private (non-commercial) aircraft for the CEO’s personal travel.

 

       Attract and retain talent

 

       Support personal financial planning needs

 

       Ensure CEO’s personal safety and facilitate CEO’s efficiency

 

 

MONDELĒZ INTERNATIONAL    43


Table of Contents
Element   Description   Program Objectives

Retirement and Separation Benefits

       

Defined Benefit Program

(i.e., Pension Plan)

  Generally replaces a portion of cash compensation (defined as base salary plus annual cash incentive award) after the NEO retires. We do not offer this program to any U.S. employees hired after 2008 and will make no additional accruals after 2019 for current participants. In addition to the tax-qualified defined benefit program, we also provide a supplemental nonqualified defined benefit program to account for the qualified plan limits under the Code.  

       Retain talent

 

       Provide financial security in retirement

Defined Contribution Program

(i.e., 401(k) Savings Plan)

  Company matches U.S. NEO contributions up to a limit. Account balances are typically payable after an NEO terminates employment. We enhanced this program for U.S. employees hired after 2008 who are not eligible for the defined benefit program described above. In addition to the tax-qualified defined contribution program, we also provide a supplemental defined contribution program to account for certain deferral and compensation limits applicable to qualified plans under the Code.  

       Attract and retain talent

 

       Provide opportunity for financial security in retirement

Change in Control Severance Plan   Provides for severance benefits if an NEO is terminated without cause or resigns for good reason within two years after a change in control.  

       Attract and retain talent

 

       Focus on delivering top-tier shareholder value in periods of uncertainty

 

       Support effective transition

         

Other Benefits

       
Other Benefits   Health, welfare and other benefits.  

       Attract and retain talent

 

       Promote executive health

 

       Provide death benefits to executives’ beneficiaries

 

 

MONDELĒZ INTERNATIONAL    44


Table of Contents

Individual Executive Compensation Program Elements

Base Salary

Overview

Base salary is the principal fixed element of executive compensation. In setting base salaries for our NEOs, the Compensation Committee generally targets base salary at or near the median of our Compensation Survey Group based on the executive’s comparable role. The Compensation Committee also considers a number of other factors when setting base salaries for our NEOs, including Company and individual performance, level of responsibility, experience and potential to assume roles with greater responsibility. The Compensation Committee reviews our NEOs’ salaries annually (or more often if there is a notable change in an executive officer’s role and responsibilities during the year) and considers whether any increases are warranted. If awarded, salary increases for all executive officers are generally effective April 1.

2016 Actions

None of the NEOs received a base salary increase in 2016.

Annual Cash Incentive Program

Overview

We design our Annual Cash Incentive Program to motivate our NEOs to achieve or exceed our annual financial and strategic goals. The Compensation Committee sets the formula and target, threshold and maximum annual incentive opportunities at the beginning of the year. The Compensation Committee bases actual awards made to an NEO on the Company’s annual financial results and the NEO’s individual performance. Annual incentive awards can vary greatly from year-to-year based on actual Company financial and individual performance relative to the target goals.

Annual Cash Incentive Program Award Formula

The Compensation Committee used the formula below to determine the awards to NEOs under the 2016 Annual Cash Incentive Program. This is the same formula it used to determine awards in 2015.

 

LOGO

 

 

MONDELĒZ INTERNATIONAL    45


Table of Contents

This chart describes the Annual Cash Incentive Program elements, except for base salary (discussed above).

 

Annual Cash Incentive
Program Element
  Key Provisions

Target Annual Incentive

Opportunity

 

The 2016 target annual incentive opportunity below is a target percentage of base salary that reflects each NEO’s role and responsibilities:

 

       Ms. Rosenfeld: 150%

 

       Mr. Gladden: 100%

 

       All Other NEOs: 80%

     
2016 Corporate Rating Adjusted for Market Share Overlay (60% Weighting)  

All NEO financial performance ratings align 100% to the corporate rating to reinforce and reward enterprise-wide collaboration. Ratings range from 0% to 200%.

 

In early 2016, the Compensation Committee approved the following performance measures to assess financial performance in determining the corporate rating:

 

     Performance Measures   Weighting       
    Organic Net Revenue Growth     40%      
    Defined EPS     40%      
    Defined Free Cash Flow     10%      
    Cash Conversion Cycle     10%      
   

 

The Compensation Committee chose these performance measures to incent:

 

       top-line growth,

 

       bottom-line growth, and

 

       strong cash flow and good cash management.

 

Additionally, we use a market share overlay to measure our performance against competitors in key markets and categories. Depending on actual performance, the market share overlay adjusts the corporate rating in one of five ways: no change, 5 pp increase, 5 pp decrease, 15 pp increase or 15 pp decrease.

    The Compensation Committee established the Annual Cash Incentive Program’s 2016 performance measures assuming a corporate rating of 100% if the Company met its targets. Performance exceeding or falling below target performance measures would then result in positive or negative adjustments. See “– Financial Measure Definitions” below for definitions of these performance measures.
     
Individual Performance Ratings (40% Weighting)   The 2016 potential individual performance ratings and payout ranges were:
     Individual Performance Ratings  

Incentive Payout Ranges

as a Percent of Target

    
    Outstanding   160% - 200%    
    Exceeded Expectations   120% - 155%    
    Achieved Expectations   85% - 115%    
    Partially Met Expectations   20% - 80%    
    Below Expectations   0%    

 

 

MONDELĒZ INTERNATIONAL    46


Table of Contents

2016 Actions

2016 Corporate Rating

To determine NEO awards, the Compensation Committee evaluated the 2016 Company results against the 2016 Company performance goals:

 

Performance Measures   Weighting     Performance Goals     Performance Results  
    Threshold     Target     Maximum     2016 Actual     Performance
Rating
 
Organic Net Revenue Growth     40%       0.5%       2.5%       5.0%       1.3%       70%  
Defined EPS     40%       $ 1.69          $ 1.78          $ 1.87          $ 1.97          200%  
Defined Free Cash Flow*     10%       $ 2,295          $ 2,700          $ 3,375          $ 2,606          97%  
Cash Conversion Cycle (reduction in number of days)     10%       5          8          14          14          200%  
Market Share Overlay(1)                                   (0.3) pp       (15) pp  
Final Corporate Rating                                             123%  

 

* U.S. dollars in millions.

 

(1) The market share overlay reflects our net revenue weighted average market share change in our global categories, including biscuits, chocolate, gum and candy, and beverages. A market share increase of 20 basis points (“bps”) or more increases the corporate rating by 15 pp and a market share increase of 10 bps increases the corporate rating by 5 pp. A market share decrease of 10 bps reduces the corporate rating by 5 pp and a market share decrease of 20 bps or more reduces the corporate rating by 15 pp. For 2016, our market share decreased by 30 bps resulting in a 15 pp reduction to the corporate rating, as reflected in the table above.

The Compensation Committee retains discretionary authority to adjust the final corporate rating (up or down) by as much as 25 pp to recognize more subjective, less quantifiable factors – such as how well we performed based on compliance, diversity and the quality of our results. The Compensation Committee did not adjust the 2016 rating.

Individual Performance Ratings

At the beginning of each year, based on the Company’s annual contract and Strategic Plan, Ms. Rosenfeld and the other NEOs develop annual quantitative and qualitative objectives. Ms. Rosenfeld discusses her objectives with the Compensation Committee. Following this discussion and input, the Compensation Committee approves her annual goals.

At the conclusion of the annual performance period:

 

    Ms. Rosenfeld provides a detailed review of her performance relative to her annual objectives with the full Board. After consultation with the full Board, the Compensation Committee determines Ms. Rosenfeld’s individual performance rating.

 

    For each of the other NEOs, Ms. Rosenfeld provides the Compensation Committee with an individual performance assessment and rating recommendation based on the NEO’s contributions, such as achievement of key strategic initiatives, operational efficiency, enterprise leadership, quality of financial results and talent management. The Compensation Committee reviews and discusses Ms. Rosenfeld’s recommendations before determining the individual performance rating for each of the other NEOs.

 

 

MONDELĒZ INTERNATIONAL    47


Table of Contents

Based on its evaluation, the Compensation Committee determined each NEO’s individual performance rating considering primarily the factors described in the following table:

 

     Primary Annual Objectives   Committee’s Review and Determination
Ms. Rosenfeld  

       Achieve key Company financial performance goals (see performance goals in “– 2016 Corporate Rating” above).

 

       Continue to improve talent pipeline.

 

       Progress strategic agenda – jumpstart revenue growth and achieve margin expansion goals.

 

Ms. Rosenfeld’s individual performance rating was slightly below target and reflects the following:

 

       Financial performance versus internal plan:

 

    Organic Net Revenue Growth and Net Revenue Weighted Market Share were below our internal targets.

 

    Adjusted Operating Income margin growth met internal target.

 

    Defined EPS and Cash Conversion Cycle were significantly above our internal targets.

 

    Defined Free Cash Flow was slightly below our internal target.

 

       In comparison to peers in the Performance Peer Group, the Company delivered:

 

    Below average Organic Net Revenue growth.

 

    Stronger Adjusted Operating Income margin expansion and Adjusted EPS growth.

 

       Strengthened our senior talent and leadership in key markets and increased emphasis on career development across the Company.

 

       Delivered solid performance on key strategic initiatives, including:

 

    Significant progress on improving volume/mix to drive revenue results,

 

    Robust innovation pipeline across all categories,

 

    Growth fundamentals in line with internal operating plan,

 

    Significant acceleration in e-commerce business growth, and

 

    Cost savings ahead of internal operating plan.

 

      Expanded scope and acceleration of overhead savings.

 

      Achieved record supply chain productivity.

 

      Accelerated implementation of our new shared services model to execute processes more efficiently at lower cost.

Mr. Gladden  

       Achieve key Company financial performance goals (see performance goals in “– 2016 Corporate Rating” above).

 

       Optimize capital returns to shareholders.

 

Mr. Gladden’s individual performance rating was slightly below target and reflects the following:

 

       Financial performance versus internal plan:

 

    Organic Net Revenue Growth and Net Revenue Weighted Market Share were below our internal targets.

 

    Defined EPS and Cash Conversion Cycle were significantly above our internal targets.

 

    Defined Free Cash Flow was slightly below our internal target.

 

    Repurchased shares ahead of internal plan and paid dividends in line with internal plan.

 

       Strong progress on margin agenda while simultaneously simplifying processes.

 

       Successful implementation of our new shared services model.

 

    Delivered savings without operational issues.

 

       Key leadership role in strategic initiatives.

 

       Enhanced talent capabilities for a critical function within his team.

Mr. Abelenda  

       Achieve key financial performance goals for the Latin America region.

  Mr. Abelenda’s individual performance rating was at target, which is consistent with the terms and conditions of his retirement agreement. Mr. Abelenda’s retirement details are described under “Executive Compensation Tables – Potential Payments upon Termination or Change in Control.”

 

 

MONDELĒZ INTERNATIONAL    48


Table of Contents
     Primary Annual Objectives   Committee’s Review and Determination
Mr. Cofer  

       Achieve key growth fundamentals.

 

Mr. Cofer’s individual performance rating was slightly below target and reflects the following:

 

       Organic Net Revenue Growth and Net Revenue Weighted Market Share were below our internal targets.

 

       Progressed gross margin agenda in all categories.

 

       Strong performance on building foundational growth platforms during the first year of his current role.

 

    Robust innovation pipeline across all categories.

 

    Successful launch of key platforms including the Good Thins and Bournvita brands in North America and India, respectively, as well as the chocolate category in both China and the United States and the biscuit category in Japan.

 

    Readied new well-being biscuit brand targeted to millennial generation for launch mid-year 2017.

 

    Significant acceleration in e-commerce business growth.

 

    Contemporized core portfolio to sharpen focus and distorted resources to drive toward growth objectives.

Mr. Marques  

       Achieve key financial performance goals for the North America region.

 

Mr. Marques’s individual performance rating was below target and reflects the following:

 

       Financial performance for the North America business was generally below our internal targets.

 

    Outstanding margin agenda execution.

 

    Challenging sales and supply chain execution.

Annual Cash Incentive Program Decisions

Based on the 2016 corporate rating and individual performance determined by the Compensation Committee following its evaluation of each NEO’s individual performance against the annual objectives described above, the Compensation Committee approved the following annual incentive cash payments:

 

Name   Base
Salary
    Target
Incentive
(% of
Salary)
    Target
Incentive
Amount
    Company Performance     Individual
Performance
    Total
Incentive
Payment
    Total
Incentive
Payment
as % of
Target
 
        Metric
Weighting
    Incentive
Payment
    Metric
Weighting
    Incentive
Payment
     
Ms. Rosenfeld     $1,600,000       150%       $2,400,000       60%       $1,771,200       40%       $864,000       $2,635,200       110%  
Mr. Gladden     $900,000       100%       $900,000       60%       $664,200       40%       $324,800       $989,000       110%  
Mr. Abelenda     $669,500       80%       $535,600       60%       $395,273       40%       $214,727       $610,000       114%  
Mr. Cofer     $875,000       80%       $700,000       60%       $516,600       40%       $252,400       $769,000       110%  
Mr. Marques     $875,000       80%       $700,000       60%       $516,600       40%       $84,400       $601,000       86%  

Equity Program

Overview

We design our equity grants to align our executive officers’ and shareholders’ interests. For our 2016 equity program, the Compensation Committee used the same mix used in 2015: 75% performance share units and 25% NQSOs.

 

LOGO

 

 

MONDELĒZ INTERNATIONAL    49


Table of Contents

The Compensation Committee bases equity grant value ranges for performance share units and NQSOs on an analysis of competitive market practice. The midpoint of the equity grant value ranges, inclusive of the value of the target performance share units, is approximately equal to the median total long-term incentives of our Compensation Survey Group. The Compensation Committee may make an equity grant to an NEO above or below the midpoint based on the Compensation Committee’s qualitative review of the NEO’s individual performance. Generally, the equity grant value is between 50% and 150% of the midpoint. All annual equity grants made to our NEOs in 2016 fell within that range.

2016 Actions

The table below shows the 2016 annual equity grants to our NEOs. The grants reflect individual performance, Company performance and external market positioning.

 

     2016 Annual Equity  Grant(1)  
Name   Performance Share Units     NQSOs  
Ms. Rosenfeld     233,790       389,650  
Mr. Gladden     88,800       147,990  
Mr. Abelenda     28,340       47,230  
Mr. Cofer     42,510       70,850  
Mr. Marques     42,510       70,850  

 

(1) The grant date for the annual equity grants was February 22, 2016. Grants of performance share units are reflected at target since actual shares, if any, will be determined after the three-year performance cycle ending on December 31, 2018.

We present the actual equity grants, including grant date fair value, in the 2016 Summary Compensation Table and 2016 Grants of Plan-Based Awards table under “Executive Compensation Tables” in this Proxy Statement. Our 2016 annual equity grant date was the regularly scheduled Compensation Committee meeting following the release of our annual financial results. The exercise price for all NQSO grants equals the closing trading price on the grant date.

Performance Share Units

The Compensation Committee grants performance share units to motivate executives to 1) achieve or exceed our long-term financial goals and 2) deliver top-tier shareholder returns. The Compensation Committee sets performance targets for a three-year performance cycle.

At the end of the three-year performance cycle, the Compensation Committee will only award shares if Company results meet or exceed the performance thresholds set at the beginning of the cycle. The number of shares awarded to an executive depends on the achievement of key financial measures and annualized TSR relative to the median of our Performance Peer Group. Share awards occur in the first quarter following the end of the performance cycle, provided the Compensation Committee certifies performance at or above threshold levels.

To address unforeseen or unintended consequences, the Compensation Committee retains discretion to adjust the final business performance rating for a performance cycle (up or down) by as much as 25 pp, allowing it to factor in a subjective review of quality of financial results, portfolio management, innovation and talent development. The Compensation Committee does not consider an NEO’s individual contributions as the basis for an award; awards related to performance share units are based solely on how the Company performed against performance targets. Dividend equivalents accrue during the performance period and are paid out in cash in the first quarter following the award payout date based on the actual share award.

 

 

MONDELĒZ INTERNATIONAL    50


Table of Contents

The Compensation Committee uses the following formula to determine actual awards for participants, including our NEOs. Each element of this formula is discussed below.

 

LOGO

 

(1) Participants receive dividend equivalents at the end of the performance cycle based on the actual number of shares awarded.

2016-2018 Performance Cycle

 

Award Formula Element   Explanation of Key Provisions

Target Incentive Opportunity

  Each NEO’s target number of performance share units is based on 75% of the total annual equity grant value.
   

 

Following the end of the performance cycle, the number of shares actually awarded may range from 0% to 200% of the target number of performance share units granted based on the final business performance rating for the performance cycle.

         

Business Performance Rating

 

 

Rating ranges from 0% to 200%.

 

Performance measures are:

 

   
     Measures   Weighting     
    Organic Net Revenue Growth   25%    
    Adjusted ROIC Increase   25%    
    Annualized Relative TSR   50%    
   

 

See “– Financial Measure Definitions” below for definitions of the above measures.

 

For performance share units with a 2016-2018 performance cycle, the target objective set for Annualized Relative TSR is the median of the Performance Peer Group. The Compensation Committee sets our financial performance targets for Organic Net Revenue Growth and Adjusted ROIC Increase taking into consideration our long-term strategy. The Company does not publicly disclose specific financial performance targets on a prospective basis. Revealing these specific targets prospectively would provide competitors and other third parties with insights into our confidential planning process and strategies and potentially harm us competitively. We design our financial performance targets to be challenging, and there is a plausible risk that no awards will be made or awards will be below target.

We base cash awards under our Annual Cash Incentive Program and share awards for our performance share units in part on our Organic Net Revenue Growth. However, the Compensation Committee uses a different benchmark to measure performance for each. The following chart highlights these differences:

 

     Annual Cash Incentive Program   Performance Share Units   Comments
Basis for targets set by Compensation Committee   Annual operating targets   Long-term strategy considered   Use of these different targets focuses our executives on critical internal drivers, both in the short- and long-term, and the different targets for each, when combined, drive shareholder value.
Percentage of target award based on Organic Net Revenue Growth   24% (40% of 60% award weighting on financial performance)   25% for our 2016-2018 performance cycle   We base the majority of any cash award under our Annual Cash Incentive Program or share award for the 2016-2018 performance cycle on separate independent performance measures.

 

 

MONDELĒZ INTERNATIONAL    51


Table of Contents

2014-2016 Performance Cycle

The Compensation Committee determined the share award for the 2014-2016 performance cycle based on a performance rating that included the Company’s performance on key financial goals (Organic Net Revenue Growth and Adjusted ROIC Increase) and Annualized Relative TSR goals. In determining our Annualized Relative TSR performance, we used our 2016 Performance Peer Group (excluding The Kraft Heinz Company). See “– How We Design Our Executive Compensation Program – Paying Competitively – Composition and Purpose of our Performance Peer Group” above. The following chart details:

 

    the key financial measures, weightings and performance standards the Compensation Committee set in 2014;

 

    our actual performance; and

 

    the final business performance rating approved by the Compensation Committee following the end of the 2014-2016 performance cycle.

The Compensation Committee did not adjust the final business performance rating for the 2014-2016 performance cycle.

 

           2014-2016 Performance Cycle Results  
Key Performance Measures   Weighting     Threshold     Target     Maximum     Actual     Performance
Rating
 
Organic Net Revenue Growth(1)     25%       3.4%       4.4%       6.4%       2.6%       0%  
Adjusted ROIC Increase(1)     25%       +100 bps       +150 bps       +250 bps       +190 bps       140%  
Annualized Relative TSR     50%       25th percentile       Median       90th percentile       71st percentile       142%  

Final Business Performance Rating

 

                                    106%  

 

(1) See definitions under “– Financial Measure Definitions” below.

Based on target awards determined as a percentage of salary and the performance rating of 106% of target, the share award (before taxes) for each NEO for the 2014-2016 performance cycle was as follows:

 

Name(1)   Target Award(2)   Target
Shares
  Share Award
Ms. Rosenfeld   350% of base salary   160,120   169,728
Mr. Abelenda   130% of base salary   24,170   25,621
Mr. Cofer   130% of base salary   29,740   31,525

 

(1) Because Mr. Gladden was hired on October 13, 2014 and Mr. Marques was hired on March 9, 2015, neither received awards for the 2014-2016 performance cycle and they therefore are excluded from the table above.

 

(2) Prior to the 2015-2017 performance cycle, the target award opportunity was based only on a percentage of the NEO’s base salary at the beginning of the performance cycle. Beginning with the 2015-2017 performance cycle, the target award opportunity is based on the NEO’s target equity grant value.

 

 

MONDELĒZ INTERNATIONAL    52


Table of Contents

Requiring Stock Ownership

To further align our NEOs’ and our shareholders’ interests, and to incent our NEOs to focus on shareholders’ interests, the Compensation Committee requires all executives to hold a significant amount of Common Stock. The following chart summarizes our requirements.

 

Key Provisions   Explanation of Key Provisions
Ownership Requirement  

       CEO: Eight times salary.

 

       Other NEOs: Four times salary.

Time to Meet Requirements  

       Five years from employment date or three years following a promotion.

Shares Counted Toward Ownership  

       Common Stock, including sole ownership, direct purchase plan shares, qualified savings plans, unvested restricted stock, unvested deferred stock units and accounts over which the executive has direct or indirect ownership or control. Prior to 2016, we granted restricted stock to employees in some circumstances.

 

       Excludes unexercised Mondelēz International stock options and unvested performance share units.

Holding Requirements  

       Until they meet their stock ownership requirement, our NEOs must hold 100% of all shares acquired under our equity program (including stock after the restrictions have lapsed, shares awarded for our vested deferred stock units, shares acquired upon exercise of a NQSO and shares awarded for our performance share units), net of shares withheld for taxes or payment of exercise price.

 

       Once an NEO meets the stock ownership requirements, he or she must hold 100% of the shares, net of shares withheld for taxes or payment of exercise price, for at least one year after the stock option exercise or receipt of shares awarded under our equity program.

We believe our stock ownership requirements are comparable to or more stringent than such requirements at the majority of the companies in our Compensation Survey Group.

We monitor our executives’ compliance with these requirements. As of March 1, 2017, all of our required NEOs satisfied or exceeded these requirements and adhered to the holding requirements.

Other 2016 Compensation Elements

The following compensation elements occurred for specific reasons described below. They are not part of our recurring compensation program.

2016 Retention Equity Grant for Mr. Abelenda

On January 4, 2016, the Compensation Committee made a retention-based equity grant to Mr. Abelenda. This grant consisted of 57,100 stock options that fully vest on the third anniversary of the grant date with the same terms and conditions as the 2015 annual equity grants made to eligible employees generally. The Committee made this grant to Mr. Abelenda as an incentive to defer his retirement until the end of 2016 to ensure leadership continuity at an important time in the Latin America region and to provide a smooth transition to his successor. The Committee determined this amount based on a review of Mr. Abelenda’s compensation and the value of outstanding equity grants for comparable positions at peer companies. This one-time grant did not affect any of Mr. Abelenda’s regular compensation arrangements.

International Assignment Payments for Mr. Cofer

Prior to his current role, Mr. Cofer was based in Singapore and served as Executive Vice President and President, Asia Pacific and Eastern Europe, Middle East and Africa until December 31, 2015. As a former U.S. expatriate, Mr. Cofer received payments in 2016 related to his repatriation from Singapore to the U.S. These payments to Mr. Cofer were similar to the amounts and types of payments generally made to other employees who repatriate from an international assignment under our International Assignment Policy. We designed our International Assignment Policy to facilitate relocation of employees to positions in other countries by covering expenses over and above those that the employees would have incurred had they remained in their home countries. Such payments cover housing expenses, a cost of living adjustment, education and some travel expenses. Similarly, our International Assignment Policy pays the additional taxes employees incur due solely to their international assignments.

 

 

MONDELĒZ INTERNATIONAL    53


Table of Contents

Financial Measure Definitions

We report our financial results in accordance with U.S. GAAP. However, we use non-GAAP financial measures in making financial, operating and planning decisions and in evaluating our performance. Therefore, we also base financial targets for our Annual Cash Incentive Program and performance share units on non-GAAP and other financial measures. The chart below defines each measure and describes the adjustments to the related GAAP measure (if applicable), modifications to our non-GAAP measures for purposes of our compensation targets and our reasons for using these measures. (See our 2016 Form 10-K for additional information on our Non-GAAP Financial Measures and definitions of terms used in the Definitions column below.)

 

Measures  

Definitions

(Including

Adjustment to GAAP Measure)

  Modifications   Rationale
Organic Net Revenue Growth (Annual Cash Incentive Program and Performance Share Units)  

Organic Net Revenue is defined as net revenues excluding the impacts of:

 

       acquisitions,

 

       divestitures(1),

 

       the historical global coffee business(2),

 

       the historical Venezuelan operations,

 

       accounting calendar changes, and