US Foods Holding (USFD) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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US Foods Holding Corp.

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2020 PROXY STATEMENT

NOTICE OF ANNUAL MEETING

WEDNESDAY, MAY 13, 2020

9:00 a.m. (Central Daylight Time)

March 27, 2020 

DEAR FELLOW

STOCKHOLDER: 

On behalf of the Board of Directors, I am pleased to invite you to attend US Foods’ 2020 Annual Meeting of Stockholders on Wednesday, May 13, 2020, at 9:00 a.m. (CDT). The Annual Meeting will be held entirely online due to the emerging public health impact of the coronavirus outbreak (COVID-19) and to support the health and safety of our associates and stockholders. You will be able to attend and participate in the online Annual Meeting by visiting www.virtualshareholdermeeting.com/ USFD2020, where you will be able to listen to the meeting live, submit questions, and vote. Information about attending the online Annual Meeting and voting your shares may be found in the accompanying notice and proxy statement. Your vote is very important to us and, whether or not you plan to attend the online Annual Meeting, I encourage you to review the notice and proxy statement and submit your vote today. 

In fiscal 2019, we maintained our differentiated market position by providing innovative, on- trend products and value-added technology solutions to help our customersMake It. Our focus on profitable growth enabled us to deliver organic independent restaurant case volume growth and increased penetration of our private brands during fiscal 2019. These drivers, together with results from our cost discipline initiatives, contributed to continued Adjusted EBITDA growth. At the same time, we advanced our omni-channel selling strategy to provide customers with more ways to purchase our products. During fiscal 2019, we also completed the acquisition of the Food Group of Companies, which enhances our overall scale and footprint in the Northwest and West regions of the country. We remain confident in our growth prospects and believe that we are well-positioned for long-term success. 

Our Board continues to play a key role in overseeing our business’ foundation and long-term growth trajectory. Our nine directors, eight of whom are independent and seven of whom have joined the Board since our initial public offering in 2016, comprise a highly skilled and diverse Board with a mix of perspectives, backgrounds, and experiences that we believe provides a distinct competitive advantage. Feedback from stockholders on corporate governance, compensation, and sustainability has provided the Board with valuable insights. Most recently, our focus on serving our stakeholders through established best practices has led to declassifying the Board, reinforcing our pay-for-performance philosophy through the enhanced design of our incentive compensation programs, and implementing sustainability initiatives, among other things. 

At US Foods, our goal of helping our customersMake It. extends to how we serve the communities where we live and work. Our commitment to caring for people, protecting the environment, and providing sustainably-sourced products is a fundamental component of our approach, complementing our long-term business strategy and strengthening our drive for sustainable growth. We have continued to enhance our corporate social responsibility disclosures, and encourage you to review our efforts, initiatives, and accomplishments in the accompanying proxy statement and in our latest Corporate Social Responsibility Review atwww.usfoods.com/csr. 

Entering fiscal 2020, we look forward to continuing to make significant progress on ourGreat Food. Made Easy. strategy and building upon the momentum generated by the hard work and focus of our 28,000 associates. 

On behalf of the Board and everyone at US Foods, we are grateful for your continued trust and support. Thank you for being a US Foods stockholder. 

Sincerely,

PIETRO SATRIANO

CHAIRMAN AND

CHIEF EXECUTIVE OFFICER

March 27, 2020

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

MEETING INFORMATION

WEDNESDAY, MAY 13, 2020

9:00 a.m. (Central Daylight Time) 

Stockholders of record at the close of business on March 16, 2020 are entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. A complete list of stockholders entitled to vote at the Annual Meeting may be accessed electronically, upon request, starting ten (10) days prior to the meeting by contacting US Foods Investor Relations via email atir@usfoods.com. In addition, such stockholder list will be posted on the virtual meeting website during the meeting.

Beginning on or about March 27, 2020, a Notice of Internet Availability of Proxy Materials will be mailed to our stockholders of record as of March 16, 2020. In addition, the proxy statement, the accompanying proxy or voting instruction card, and our 2019 Annual Report to Stockholders are available athttps://materials.proxyvote.com/912008. As more fully described in the Notice, all stockholders may choose to access these materials online or may request printed or emailed copies.

We encourage you to vote your shares as soon as possible. Specific instructions for voting over the internet or by telephone or mail are included in the Notice. If you attend the Annual Meeting online and vote electronically during the meeting, your vote will replace any earlier vote.

By Order of the Board of Directors,

KRISTIN M. COLEMAN

Executive Vice President, General Counsel and
Chief Compliance Officer

REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:

INTERNET		TELEPHONE		MAIL		AT THE MEETING
Visit www.proxyvote.com		Call the telephone number on your proxy or voting instruction card		Sign, date, and return your proxy or voting instruction card in the enclosed envelope		Attend the meeting online at www.virtualshareholdermeeting.com/USFD2020

Please refer to the enclosed proxy materials or the information forwarded by your bank, broker, or other nominee to see which voting methods are available to you.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    4

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    5

PROXY SUMMARY

 

VOTING MATTERS

 

	Board Recommendation	Page
Proposal 1 – Election of Three Director Nominees	FOR	8
Proposal 2 – Advisory Approval of Say on Pay Resolution	FOR	45
Proposal 3 – Ratification of Appointment of Independent Auditor	FOR	47

 

DIRECTOR HIGHLIGHTS

 

Name		Age		Director Since		Term Expiring		Audit		Compensation		Executive		Nominating and Corporate Governance
Cheryl A. Bachelder
Independent		63		October 2018		2021		—		—		—
Court D. Carruthers
Independent		47		July 2016		2020	*							—
Robert M. Dutkowsky
Lead Independent Director		65		January 2017		2022		—		—
Sunil Gupta
Independent		61		March 2018		2022				—		—		—
John A. Lederer
Independent		64		September 2010		2021		—		—		—		—
Carl Andrew Pforzheimer
Independent		58		January 2017		2021		—		—		—
Pietro Satriano
Chairman and Chief Executive Officer		57		July 2015		2022		—		—				—
David M. Tehle
Independent		63		July 2016		2020	*							—
Ann E. Ziegler
Independent		61		January 2018		2020	*					—		—

 

* Denotes standing for re-election at 2020 Annual Meeting

Denotes Committee Chairperson

 

 

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    6

GOVERNANCE HIGHLIGHTS & RECENT ENHANCEMENTS

 

	Eight of nine directors are independent
	Fully independent Audit, Compensation, and Nominating and Corporate Governance Committees
	Lead Independent Director
	Strong commitment to Board diversity
	Comprehensive and strategic approach to enterprise risk management
	No shareholder rights plan or poison pill
	Annual say on pay vote
	Stock ownership guidelines for directors and executives
	No stock hedging or pledging permitted by directors and executives
	Annual Board and committee self-evaluations
	Proactive stockholder engagement

 

RECENT CORPORATE GOVERNANCE ENHANCEMENTS:
■	Declassified Board, with all directors standing for election now subject to annual election for one-year terms, and elimination of requirement that directors may be removed only for cause
■	New long-term incentive plan reflecting key stockholder-friendly features
■	New sustainability initiatives and strengthened commitment to ESG engagement

 

EXECUTIVE COMPENSATION HIGHLIGHTS

 

PHILOSOPHY (PAGE 23)

 

Our executive compensation program is designed to attract, motivate, develop, and retain the right talent, in the right places, at the right time. The following guiding principles form the basis of our executive compensation philosophy:

 

■	Appropriately balance annual and long-term incentive compensation opportunities to align with our goals, priorities, and the creation of stockholder value;

 

■	Balance risk and reward to encourage sustainable financial performance; and

 

■	Offer fiscally responsible programs that ensure accountability in meeting our performance goals.

 

FISCAL 2019 COMPENSATION MIX (PAGE 27)

 

CEO TARGET COMPENSATION MIX		OTHER NEOs TARGET COMPENSATION MIX

 

IMPORTANT DATES FOR 2021 ANNUAL MEETING

 

■  Deadline to include stockholder proposals in our proxy statement		→ On or before November 27, 2020
■  Period to submit stockholder proposals not included in our proxy statement		→ Between January 13, 2021 and February 12, 2021
■  Period for stockholders to nominate director candidates for election		→ Between January 13, 2021 and February 12, 2021

 

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    7

Our business and affairs are managed under the direction of our Board of Directors (the “Board”). The Board is currently comprised of nine directors, eight of whom are independent under the corporate governance standards of the New York Stock Exchange (the “NYSE”).

At our 2019 annual meeting of stockholders, our stockholders adopted an amendment and restatement of our Certificate of Incorporation to, among other things, eliminate the classification of the Board on a phased-in basis. As a result, all of our directors standing for election following the effectiveness of our amended and restated Certificate Incorporation in May 2019 (including the three director nominees standing for election at the Annual Meeting) will be elected for one-year terms. Beginning at our 2022 annual meeting, the declassification of the Board will be complete and all of our directors will be subject to annual election.

The terms of three of our directors expire on the date of the Annual Meeting, subject to the election and qualification of their successors. Upon the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the three individuals named below for re-election as directors for one-year terms.

DIRECTOR NOMINATING PROCESS

The Nominating and Corporate Governance Committee recommends candidates to the Board it believes are qualified and suitable to become members of the Board. The Nominating and Corporate Governance Committee also considers the performance of incumbent directors in determining whether to recommend them for re-election. Recommendations may be received by the Nominating and Corporate Governance Committee from various sources, including current and former directors, a search firm retained by the Nominating and Corporate Governance Committee, stockholders, Company executives, and candidates themselves.

In the case of a vacancy in the office of a director (including a vacancy created by an increase in the size of the Board), the Nominating and Corporate Governance Committee will recommend to the Board an individual to fill the vacancy.

Stockholders who wish to identify director candidates for consideration by the Nominating and Corporate Governance Committee should write to the address provided in the section entitled “Board Policy Regarding Communications” on page 52. Stockholders may also nominate directors for election to the Board as described in the section entitled “How can I propose someone to be a nominee for election to the Board?” on page 52. All submissions should comply with the requirements set forth in our Bylaws.

SKILLS, EXPERIENCE, AND COMMITMENT TO DIVERSITY

The Board seeks members with varying professional backgrounds and other differentiating personal characteristics who combine a broad spectrum of experience and expertise with a reputation for integrity. The Board believes that maintaining a diverse membership enhances the Board’s discussions and enables the Board to better represent all of the Company’s constituents. The Board is currently comprised of two sitting chief executive officers, three former chief executive officers, two former chief financial officers, a successful restaurateur, and a tenured business school professor. With our three most recent director appointments, the Board reflects a more diverse composition, with two of our directors being women and one of our directors being ethnically diverse.

Our Corporate Governance Guidelines provide that individuals will be considered for nomination to the Board based on their business and professional experience, judgment, gender, race and ethnicity, skills, background, and other unique characteristics as the Board deems appropriate. Accordingly, the Board is committed to actively seeking out highly qualified women and individuals from minority groups as well as candidates with diverse or non-traditional backgrounds, skills, and experiences as part of the director search process.

Director candidates should demonstrate a reputation for integrity, strong values, and discipline, high ethical standards, a commitment to full participation on the Board and its committees, and relevant career experience, along with other skills and characteristics that meet the current needs of the Board. The Nominating and Corporate Governance Committee and the Board will also consider whether candidates meet applicable independence standards where appropriate and evaluate any potential conflicts of interest with respect to each candidate.

The three nominees named below have been recommended to the Board by the Nominating and Corporate Governance Committee and nominated by the Board to serve as directors until our 2021 annual meeting and until their successors are duly elected and qualified. Each nominee has consented to stand for election, and the Board does not anticipate that any nominee will be unavailable to serve. If a director nominee should become unavailable to serve at the time of the Annual Meeting, shares represented by proxy may be voted for the election of a substitute nominee to be designated by the Board. Alternatively, in lieu of designating a substitute, the Board may reduce the size of the Board.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    8

BACKGROUND AND EXPERIENCE OF DIRECTORS 

The professional background and experience of each member of the Board is provided below. We believe that our directors collectively provide an appropriate mix of experience and skills relevant to the size and nature of our business.

NOMINEES FOR ELECTION AS DIRECTORS WITH A TERM EXPIRING AT THE 2021 ANNUAL MEETING

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE THREE DIRECTOR NOMINEES.

Age 63   Director since: 2016   INDEPENDENT   COMMITTEES: • Audit (Chair) • Compensation • Executive

Mr. Tehleserved as Executive Vice President and Chief Financial Officer of Dollar General Corporation, a discount retailer, from 2004 until retiring in July 2015. Prior to Dollar General, Mr. Tehle was Chief Financial Officer of Haggar Corporation, a manufacturing, marketing, and retail company, from 1997 to 2004 and held finance positions at several companies, including Ryder System, Inc., a transportation and logistics company, and Texas Instruments Incorporated, a semiconductor design and manufacturing company.     SKILLS AND QUALIFICATIONS: • Mr. Tehle has extensive knowledge of financial reporting, internal controls and procedures, and risk management, in addition to significant experience as chief financial officer of a public company. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Jack in the Box Inc. • National Vision Holdings, Inc. PAST PUBLIC COMPANY DIRECTORSHIPS: • Genesco Inc.

Age 61   Director since: 2018 INDEPENDENT   COMMITTEES: • Audit • Compensation

Ms. Ziegler served as Senior Vice President and Chief Financial Officer of CDW Corporation, a technology solutions provider, from 2008 to 2017. From 2005 to 2008, Ms. Ziegler served as Senior Vice President, Administration and Chief Financial Officer of Sara Lee Food and Beverage, a division of Sara Lee Corporation, a global consumer goods company. From 2003 to 2005, she served as Chief Financial Officer of Sara Lee Bakery Group. From 2000 to 2003, she served as Senior Vice President, Corporate Development of Sara Lee. Prior to joining Sara Lee, Ms. Ziegler was a corporate attorney at the law firm Skadden, Arps, Slate, Meagher & Flom. Ms. Ziegler serves on the board of directors of Wolters Kluwer N.V. and the board of governors of the Smart Museum of Art of the University of Chicago. Before her election as a director, Ms. Ziegler was identified as a potential director candidate by a search firm retained by the Nominating and Corporate Governance Committee.     SKILLS AND QUALIFICATIONS: • Ms. Ziegler has extensive knowledge of financial reporting, internal controls and procedures, risk management, corporate development, and mergers and acquisitions, in addition to significant experience as a chief financial officer of a public company. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Hanesbrands Inc. • Groupon, Inc.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    9

DIRECTORS CONTINUING IN OFFICE

DIRECTORS WITH A TERM EXPIRING AT THE 2021 ANNUAL MEETING

Age 63   Director since: 2018   INDEPENDENT   COMMITTEES: • Nominating and Corporate Governance

Ms. Bachelderserved as Interim Chief Executive Officer of Pier 1 Imports, Inc., a home furnishings and decor retailer, from December 2018 to November 2019, a role to which she was appointed in connection with her service on the Pier 1 board of directors. Pier 1 filed for Chapter 11 bankruptcy in February 2020. She served as Chief Executive Officer of Popeyes Louisiana Kitchen, Inc., a multi-national restaurant operator and franchisor, from 2007 to 2017. Prior to her role with Popeyes, she served as President and Chief Concept Officer of KFC restaurants, a division of Yum! Brands, Inc. Ms. Bachelder’s earlier career included brand leadership roles at Domino’s Pizza, RJR Nabisco, Gillette, and Procter & Gamble. Ms. Bachelder serves on the board of directors of Chick-fil-A, Inc. and the advisory board of Procter & Gamble’s franchising venture, Tide Dry Cleaners.     SKILLS AND QUALIFICATIONS: • Ms. Bachelder is an accomplished executive, with extensive experience in the food industry and a track record of creating strong brand value. Her expertise provides valuable insights as the Company executes on ourGreat Food. Made Easy®. strategy. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Pier 1 Imports, Inc. PAST PUBLIC COMPANY DIRECTORSHIPS: • Popeyes Louisiana Kitchen, Inc.

Age 64   Director since: 2010   INDEPENDENT   COMMITTEES: • None

Mr. Ledererhas served as a Senior Advisor with Sycamore Partners, a private equity firm specializing in retail and consumer investments, since September 2017. In that capacity, he serves as Executive Chairman of the board of directors of Staples, Inc. and its U.S. and Canadian businesses. From September 2010 to July 2015, Mr. Lederer served as our President and Chief Executive Officer. From 2008 to 2010, Mr. Lederer was Chairman and Chief Executive Officer of Duane Reade, a retail pharmacy chain. Prior to Duane Reade, he spent 30 years at Loblaw Companies Limited, a Canadian grocery retailer and wholesale food distributor, where he held a number of leadership roles and served as President from 2000 to 2006.     SKILLS AND QUALIFICATIONS: • Mr. Lederer has extensive senior executive leadership experience in the food industry, including five years of service as our Chief Executive Officer. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Maple Leaf Foods Inc. • Walgreens Boots Alliance, Inc. PAST PUBLIC COMPANY DIRECTORSHIPS: • Restaurant Brands International, Inc.

Age 58   Director since: 2017   INDEPENDENT   COMMITTEES: •  Nominating and Corporate Governance

Mr. Pforzheimer is the founder of Barteca Holdings, LLC, a multi-location restaurant group, where he served as Chief Executive Officer from 1995 to August 2016. He also served as Chairman of the board of directors of Barteca from 2012 to June 2018. Mr. Pforzheimer serves on the boards of directors of several private restaurant companies throughout the U.S. and on the Education Policy Committee of the Culinary Institute of America.     SKILLS AND QUALIFICATIONS: • Mr. Pforzheimer is a successful restaurateur and has served as a member of the Education Policy Committee at the Culinary Institute of America and the board of directors of the Connecticut Restaurant Association. He brings a customer perspective and experience and expertise in the food industry to the Board. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • None

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    10

DIRECTORS WITH A TERM EXPIRING AT THE 2022 ANNUAL MEETING

Age 65   Director since: 2017   INDEPENDENT   COMMITTEES: • Executive • Nominating and Corporate Governance (Chair)

Mr. Dutkowskyhas served as Executive Chairman of Tech Data Corporation, a technology distributor, since June 2018. He previously served as Chief Executive Officer of Tech Data from October 2006 to June 2018. Prior to joining Tech Data, Mr. Dutkowsky served as President and Chief Executive Officer, and Chairman of the board of directors of Egenera, Inc., a software company, from 2004 to 2006, President and Chief Executive Officer, and Chairman of the board of directors of J.D. Edwards & Co., Inc., a software company, from 2002 to 2004, and President and Chief Executive Officer, and Chairman of the board of directors of GenRad, Inc., an electronic equipment manufacturer, from 2000 to 2002. He also served as Executive Vice President, Markets and Channels, from 1997 to 1999, and President, Data General, in 1999, of EMC Corporation, a data storage manufacturer. Mr. Dutkowsky began his career at IBM, a technology company, where he served in several senior management positions.     SKILLS AND QUALIFICATIONS: • Mr. Dutkowsky has substantial senior executive leadership experience and provides valuable governance perspectives based on his experience as a board member, and, in some cases, chairman, of numerous public and private companies. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Pitney Bowes Inc. • Raymond James Financial, Inc. • Tech Data Corporation PAST PUBLIC COMPANY DIRECTORSHIPS: • The ADT Corporation

Age 61   Director since: 2018   INDEPENDENT COMMITTEES: • Audit

Prof. Guptajoined Harvard Business School in 2006 as a Professor and was named the Edward W. Carter Professor of Business Administration in 2007. He has served as the Chair of the General Management Program for senior executives and Co-Chair of the Driving Digital Strategy executive education program since 2013 and, prior to that, served as the Chair of the Marketing Department from 2008 to 2013. Before joining Harvard Business School, Prof. Gupta held a number of positions at the Columbia University Graduate School of Business, including serving as the Meyer Feldberg Professor of Business from 2000 to 2006.     SKILLS AND QUALIFICATIONS: • Prof. Gupta has over 30 years of research, teaching, and consulting experience in marketing and strategy, including over 10 years in digital marketing, as well as a Ph.D. in Marketing from Columbia University. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • None

Age 57   Director since:2015  COMMITTEES: • Executive (Chair)

Mr. Satrianohas served as our Chief Executive Officer since July 2015, and was elected Chairman of the Board in December 2017. From February 2011 to July 2015, Mr. Satriano served as our Chief Merchandising Officer. Prior to joining US Foods, Mr. Satriano was President of LoyaltyOne Canada, a provider of loyalty marketing and programs, from 2009 to 2011. From 2002 to 2008, he served in a number of leadership positions at Loblaw Companies Limited, a Canadian grocery retailer and wholesale food distributor, including Executive Vice President, Loblaw Brands, and Executive Vice President, Food Segment. Mr. Satriano began his career in strategy consulting, first in Toronto, Canada with Canada Consulting Group and then in Milan, Italy with the Monitor Company.     SKILLS AND QUALIFICATIONS: • Mr. Satriano has extensive experience and leadership in the food industry and setting and executing corporate strategy. Additionally, his role as our Chief Executive Officer provides valuable insight into our operations and brings a management perspective to the deliberations of the Board. OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • CarMax, Inc.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    11

CORPORATE GOVERNANCE

STOCKHOLDER ENGAGEMENT

We recognize the value of listening to and considering the perspectives of our stockholders on corporate governance, compensation, and sustainability. Developing relationships with our stockholders is an integral part of that process and we routinely engage with, and collect feedback from, our stockholders on a variety of topics. In fiscal 2019, we held discussions with a diverse cross-section of our stockholders collectively owning over 50% of our outstanding stock, including 17 of our top 25 stockholders. These discussions covered various governance, compensation, operational, financial performance, and industry matters, as well as our corporate social responsibility initiatives. Recent examples of enhancements to our practices that have reflected feedback from our stockholders include declassification of the Board, strengthening our commitment to diversity on the Board (including the election of two female directors and one ethnically diverse director), further external promotion of our leadership development and diversity and inclusion programs, reinforcement of our pay-for-performance philosophy through the enhanced design of our incentive compensation programs, and implementation of sustainability initiatives.

We are continuing our program of active stockholder engagement during fiscal 2020, including participation at industry and investment community conferences, analyst meetings, and select one-on-one meetings with stockholders.

In addition to direct engagement, we have instituted a number of complementary mechanisms that allow stockholders to effectively communicate with the Board and management, including the policy regarding direct correspondence with individual directors and the Board as a whole described in the section entitled “Board Policy Regarding Communications” on page 52, a commitment to thoughtfully consider stockholder proposals submitted to the Company, an annual advisory vote to approve executive compensation, and attendance at our annual stockholder meetings. Our investor relations website (athttps:// ir.usfoods.com) features substantive information and materials for the reference of our stockholders, including earnings and investor conference presentations and webcast replays, corporate governance documents, public filings, and news releases.

BOARD LEADERSHIP STRUCTURE

The Board has no policy regarding the separation of the offices of Chairman of the Board and Chief Executive Officer. The Board believes it is important to retain its flexibility to allocate the responsibilities of the Chairman of the Board and the Chief Executive Officer in any way that it deems to be in the best interests of the Company at a given point in time.

Mr. Satriano, our Chief Executive Officer, serves as Chairman of the Board. As Chairman, Mr. Satriano:

Because the roles of Chief Executive Officer and Chairman of the Board are currently combined, Mr. Dutkowsky has been appointed Lead Independent Director. As Lead Independent Director, Mr. Dutkowsky:

The Board believes this provides a clear and efficient leadership structure for the Company, allowing one person to set the “tone at the top” and have primary responsibility for managing the Company’s overall business strategy.

RISK OVERSIGHT

Our approach to enterprise risk management is designed to effectively identify, assess, prioritize, mitigate, and monitor the Company’s principal risks. Management is responsible for the Company’s day-to-day risk management activities. The Board’s role is to exercise informed risk oversight, which is done both directly and indirectly through its committees. In addition, for each of the top risks, the Board and/or its applicable committee receives periodic updates from a senior member of management. The Board’s effectiveness in risk oversight is bolstered through open dialogue with management, established monitoring and reporting processes and the collective knowledge and experience of its members.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    12

There are several ways the Board and its committees undertake their risk oversight responsibilities, including:

ANNUAL BOARD AND COMMITTEE SELF-EVALUATIONS

The Nominating and Corporate Governance Committee oversees the annual self-evaluation process for the Board and each of its committees. These self-evaluations are designed to assess whether the Board or the respective committee is functioning effectively and to provide a mechanism for the Board or the respective committee to identify potential areas for improvement. For example, in furtherance of the Board’s commitment to maintaining a diverse Board membership, the Board self-evaluation specifically asks directors to assess the Board’s progress against that commitment. Once completed, the results of the self-evaluations and any appropriate recommendations or action plans are discussed among the members of the Board and each of its committees.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    13

MEETINGS OF THE BOARD AND ITS COMMITTEES

The Board met six times in fiscal 2019. As a whole, our directors attended over 95% of the aggregate number of meetings of the Board and the committees of the Board on which they served (during the periods served) in fiscal 2019.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    14

BOARD ATTENDANCE AT THE ANNUAL MEETING

Although the Company does not have a written policy concerning Board attendance at annual meetings of the Company’s stockholders, it is our expectation that all directors attend annual meetings. All of our directors attended the 2019 annual meeting.

ANTI-HEDGING AND ANTI-PLEDGING POLICY

Under the terms of the Company’s insider trading policy, our directors and executive officers are prohibited from engaging in transactions that involve short-term trades, short sales, exchange-traded options, hedging, margin loans, or pledging of or relating to our common stock. The Company’s insider trading policy does not currently prevent employees, other than executive officers, from engaging in hedging transactions, but it allows management to consider whether to prohibit employees from engaging in these transactions.

RELATED PARTY TRANSACTION POLICY

The Board has adopted a written policy governing the identification, consideration, review, approval, and ratification of related party transactions. Under the policy, the Audit Committee reviews and decides whether to approve or ratify any proposed related party transaction for which the amount involved exceeds $120,000. Each proposed related party transaction is required to be reported to our General Counsel, and our General Counsel then determines whether it should be submitted to the Audit Committee for review.

There have been no related party transactions requiring approval or ratification under the policy since the beginning of fiscal 2019.

CORPORATE GOVERNANCE MATERIALS

The Board has adopted Corporate Governance Guidelines in furtherance of its commitment to the principles of good corporate governance. The Board and the Nominating and Corporate Governance Committee are responsible for reviewing the Corporate Governance Guidelines annually and making amendments, as necessary and appropriate, based on stockholder feedback, changes in the rules of the SEC and the corporate governance standards of the NYSE, and best practices.

The Board has also adopted a Code of Conduct that applies to all of our directors, officers, and employees, including our principal executive officer, principal financial officer, and principal accounting officer. We intend to make available any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Conduct on our investor relations website.

Copies of our Corporate Governance Guidelines; the charters of each of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee; and our Code of Conduct are publicly available and may be found by visiting the “Corporate Governance—Governance Documents” page of our investor relations website athttps://ir.usfoods.com/investors/corporate-governance/governance-documents.

US FOODS HOLDING CORP.  |  2020 PROXY STATEMENT    15

CORPORATESOCIAL RESPONSIBILITY

Our corporate social responsibility platform is focused on our commitments in three areas: People, Planet, and Products. This framework guides our priorities and helps us articulate our progress to stakeholders. Our latest Corporate Social Responsibility Review and other information regarding our efforts, initiatives, and accomplishments can be found atwww.usfoods.com/csr. Our corporate social responsibility disclosures are informed by reporting frameworks and recommendations of organizations such as the Sustainability Accounting Standards Board, the Global Reporting Initiative, and the Task Force on Climate-related Financial Disclosures. We report environmental data through the CDP, and respond to numerous investor, customer, vendor, and rating agency disclosure requests.

The Company’s corporate social responsibility efforts are managed by a cross-functional CSR Working Group led by our Executive Vice President, General Counsel and Chief Compliance Officer. The CSR Working Group includes senior leaders and subject matter experts with responsibility for areas such as supply chain, real estate, merchandising, food safety, human resources, and communications. Updates on the Company’s corporate social responsibility initiatives and accomplishments are provided multiple times each year to the Nominating and Corporate Governance Committee, which oversees the progress of these efforts.

PEOPLE

At US Foods, we strive to make a positive difference in the lives of our associates and in the communities we serve.

IN OUR WORKPLACE

Through training, mentoring, and on-the-job development, we help associates at all levels of our organization learn and grow. Our signature development programs includeGateway to Leadershipfor new people managers andAspire to LeadandAspire to Growfor high-potential leaders.

IN OUR COMMUNITIES

As a Feeding America Leadership Partner, US Foods supports food banks and other related nonprofits through product and financial contributions. Since 2007, US Foods has donated more than 100 million pounds of food, and our associates also generously volunteer their time at food banks and other organizations.

Launched in 2017, our US Foods Scholars program addresses two pressing needs: providing economic opportunity to underserved students and helping tackle the talent shortage facing the restaurant industry. The program provides individual awards of up to $20,000 in financial support and professional development to outstanding students seeking to achieve their dreams in the culinary arts.

PLANET

We’re continually improving the efficiency of our facilities and fleet, reducing our environmental footprint.

IN OUR FACILITIES

We work diligently to reduce the energy intensity of our business (measured in kilowatt hours per case shipped) and have achieved more than a 12% improvement in our broadline business since 2015.

US Foods currently operates three Leadership in Energy and Environmental Design (LEED) Silver-certified facilities, with two additional locations in Marrero, LA and Sacramento, CA in progress. LEED-certified buildings have been shown to lower environmental impact and operating costs, while providing a healthier working environment for associates.

Solar arrays have been installed on six of our distribution centers, including an 8.4-megawatt solar installation in Perth Amboy, New Jersey – one of the largest in the state.

ABOUT OUR FLEET

We’re optimizing our routing to reduce miles driven and rightsizing our vehicles by route type to improve transportation efficiency.

As we update and add to our fleet, we’re choosing new vehicle models with features designed to reduce fuel consumption.

We’re also piloting new alternative-fuel vehicles like the 55 compressed natural gas vehicles we recently added to our fleet.

PRODUCTS

We have a network of programs and policies in place to support our commitment to providing a portfolio of responsibly and sustainably-sourced products.

Through a third party sustainable product materiality assessment that included feedback from internal and external stakeholders, US Foods has prioritized key initiatives we believe will have the most impact.

OUR INITIATIVES

SERVE GOOD

Our Serve Good® program features a growing portfolio of products that are developed in collaboration with our suppliers. The products adhere to responsible practices and many come with a third party certification. Every Serve Good product must come with a claim of responsible sourcing or contribution to waste reduction.

PROGRESS CHECK

Our Progress Check™ program recognizes seafood products and vendors that have made significant progress toward meeting our Serve Good program standards and serves as a gateway for inclusion in Serve Good. In 2018, we published a Responsibly Sourced Seafood Policy that outlines our forward-looking commitments and goals for sustainable seafood products.

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DIRECTORCOMPENSATION

Non-employee directors serving on the Board receive an annual cash retainer of $100,000. Our Lead Independent Director and the Chair of the Audit Committee each receives an additional annual cash retainer of $25,000, and the Chair of the Compensation Committee and the Chair of the Nominating and Corporate Governance Committee each receives an additional annual cash retainer of $20,000. All cash retainers are paid quarterly, in arrears. In addition, for fiscal 2019, each non-employee director received an annual equity grant of $100,000 in restricted stock units (“RSUs”), which vest ratably on an annual basis over three years. Directors who are also our employees do not receive additional compensation for serving on the Board.

The Nominating and Corporate Governance Committee is responsible for reviewing and making recommendations to the Board regarding our director compensation. In completing its review, the Nominating and Corporate Governance Committee receives assistance from an independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”). The Board reviews the recommendations of the Nominating and Corporate Governance Committee and determines the form and amount of director compensation.

Effective as of January 1, 2020, we updated the stock ownership guidelines that apply to each of our non-employee directors to provide that each non-employee director is expected to own and retain shares of our common stock with a value of at least five times the annual cash retainer, or $500,000 (up from four times the annual cash retainer, or $400,000), within five years of the date the director joins the Board. All of our directors were in compliance with the guidelines at the end of fiscal 2019.

The following table reflects the fees earned by our non-employee directors who were compensated for their service in fiscal 2019:

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS, AND OFFICERS

The following table sets forth information as of February 28, 2020 with respect to the beneficial ownership of our common stock by: (1) each individual or entity known to us to own beneficially more than 5% of our outstanding common stock, (2) each of our directors, (3) each of our named executive officers, and (4) all of our directors and executive officers as a group. There were 219,914,596 shares of our common stock outstanding as of February 28, 2020.

The amounts and percentages of shares of our common stock beneficially owned are reported on the basis of SEC rules governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of the security. A person is also deemed a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be acquired this way are deemed to be outstanding for purposes of computing a person’s ownership percentage, but not for purposes of computing any other person’s ownership percentage. Under these rules, more than one person may be deemed a beneficial owner of the same securities, and a person may be deemed a beneficial owner of securities to which that person has no economic interest.

Except as otherwise indicated in the footnotes to the following table, each of the beneficial owners listed below has, to our knowledge, sole voting and investment power for the indicated shares of our common stock. Unless otherwise noted, the address of each beneficial owner listed below is c/o US Foods Holding Corp., 9399 W. Higgins Road, Suite 100, Rosemont, IL 60018.

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Does not include beneficial ownership by Timothy P. Connolly, our former Executive Vice President and Chief Supply Chain Officer, as he is no longer employed by the Company. As of his resignation effective October 14, 2019, Mr. Connolly did not beneficially own any shares of our common stock and forfeited all equity awards that had been granted to him by the Company.

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COMPENSATIONDISCUSSION AND ANALYSIS

The Compensation Committee determines and approves the compensation of our named executive officers (“NEOs”), whose compensation for fiscal 2019 is set forth in the Summary Compensation Table and other compensation tables in this proxy statement. For fiscal 2019, our NEOs were:

Mr. Connolly resigned as our Executive Vice President and Chief Supply Chain Officer effective October 14, 2019. Notwithstanding this resignation, he is considered an NEO under the SEC’s compensation disclosure rules. A discussion of his fiscal 2019 compensation arrangements with the Company appears in the section entitled “Compensation Arrangements for Former Chief Supply Chain Officer” below. His compensation arrangements have otherwise been excluded from this Compensation Discussion and Analysis.

EXECUTIVE SUMMARY

Our executive compensation program is designed to attract, motivate, develop, and retain the right talent, in the right places, at the right time. The following guiding principles form the basis of our executive compensation philosophy:

COMPENSATION COMPONENTS AND PAY-FOR-PERFORMANCE ALIGNMENT

The following graphs show the various components of the target compensation of our CEO and the other NEOs for fiscal 2019:

As shown in these graphs, a substantial portion of our NEOs’ target compensation is tied directly to the Company’s financial performance. For fiscal 2019, the payment of cash bonus awards under our Annual Incentive Plan (“AIP”) was based on the Company’s relative achievement of predetermined Adjusted EBITDA, Net Debt, and, for certain of our NEOs, individual functional performance goals. In addition, two-thirds of the equity grants made to our NEOs under our fiscal 2019 Long-Term Incentive Plan (“LTIP”) are designed to reward our executives for the Company’s financial performance over the long-term: the vesting of performance-based restricted stock awards (“RSAs”) is based on our relative achievement of predetermined Adjusted EBITDA and Adjusted Return on Invested Capital (“ROIC”) growth goals over a three-year performance period, and the ultimate value of stock options to our NEOs is based on the price per share of our common stock.

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FISCAL 2019 FINANCIAL PERFORMANCE

In fiscal 2019, we continued to profitably grow our business. We expanded total case volumes and gross profit, resulting in higher Adjusted EBITDA over the prior fiscal year. OurGreat Food. Made Easy. strategy continues to resonate with customers, and our innovative products, suite of value-added services, and team-based selling strategies give us a competitive advantage in the marketplace.

Our performance relative to the goals established by the Compensation Committee at the beginning of fiscal 2019 under our fiscal 2019

AIP is shown in the following table:

FISCAL 2019 PAY-FOR-PERFORMANCE AWARDS

As described above, components of our NEOs’ compensation were tied directly to the Company’s financial performance in fiscal 2019.

ANNUAL CASH INCENTIVE

As a result of our fiscal 2019 financial performance described above (and, for certain of our NEOs, achievement of individual functional performance goals), cash awards paid to our NEOs under our fiscal 2019 AIP ranged from 85.96% to 89.94% of their respective target awards.

VESTING OF PRIOR PERFORMANCE-BASED AWARDS

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EXECUTIVE COMPENSATION PRACTICES

The Compensation Committee evaluates whether our executive compensation program is consistent with both our pay-for-performance philosophy and best practices among our peer group and the overall market. The following table reflects the features of our executive compensation program that the Compensation Committee believes reinforce our pay-for-performance philosophy and best practices.

	WHAT WE DO…
	Pay-for-Performance Philosophy. A substantial portion of our executives’ compensation opportunities for fiscal 2019 were linked directly to our financial performance, including 85.1% of our CEO’s target compensation.
	Benchmarking. The Compensation Committee reviews external market data when making compensation decisions and generally targets compensation opportunities at the median of our peer group.
	Independent Compensation Consultant. The Compensation Committee selects and engages its own independent consultant, Meridian.
	Stock Ownership Guidelines. Our stock ownership guidelines require holdings equal to 6x base salary for the CEO and 3x base salary for our other executives.
	“Double-trigger” Change in Control (“CIC”) Severance Benefits. Our executives are entitled to enhanced CIC severance benefits only if their employment is terminated by the Company without cause or by the executive for good reason within 18 months following a CIC.
	Clawback Policy.Our Executive Compensation Recoupment Policy provides for recovery of certain incentive-based compensation paid to our executives in the event of a restatement of our financial results due to material noncompliance with any financial reporting requirement under federal securities laws.
	Long-Term Performance Targets. The performance-based awards granted under our fiscal 2019 LTIP have three-year performance goals.
	Pre-Established Targets. Our AIP and LTIP performance goals are set by the Compensation Committee at the beginning of the applicable performance periods.
	Annual Say on Pay Vote. We provide stockholders with the opportunity to cast an advisory vote on our executive compensation on an annual basis.

WHAT WE DON’T DO…
	No Excise Tax Reimbursements or Gross-Ups. Our executives are not reimbursed for CIC excise taxes. We do not reimburse our executives for taxes related to their annual executive allowance or any other compensation or benefits.
	No Uncapped Incentive Compensation Opportunities. Our AIP and LTIP permit maximum payouts of 150% and 200% of their target levels, respectively.
	No Accelerated Vesting of Equity Awards upon CIC. We do not accelerate the vesting of long-term incentive awards upon a CIC, except where awards are not assumed or there is a qualifying termination within 18 months.
	No Employment Agreements for Defined Terms. We do not have employment agreements with any of our executives, including our CEO.
	No Repricing of Underwater Stock Options. We do not allow repricing of outstanding stock options without stockholder approval.
	No Excessive Perquisites. We do not provide excessive perquisites to our executives.
	No Supplemental Retirement Benefits. We do not offer supplemental retirement benefit plans to any of our executives.
	No Stock Hedging or Pledging. Our executive officers are prohibited from hedging or pledging our stock.

APPROVAL OF 2019 LONG-TERM INCENTIVE PLAN

At our 2019 annual meeting, our stockholders approved the US Foods Holding Corp. 2019 Long-Term Incentive Plan (the “2019 Plan”). The 2019 Plan, which replaced the 2016 US Foods Holding Corp. Omnibus Incentive Plan (the “2016 Plan”), allows us to continue to make awards of long-term incentives, which we believe are critical for attracting, motivating, rewarding, and retaining a talented management team that will contribute to our success. The 2019 Plan authorizes the Compensation Committee to grant RSAs, RSUs, stock options, stock appreciation rights (“SARs”), and other equity-based and cash-based awards. Although our NEOs received their fiscal 2019 LTIP awards under the 2016 Plan (since they were granted prior to the 2019 Plan being approved by our stockholders), we now grant all equity awards under the 2019 Plan.

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The Compensation Committee believes that the 2019 Plan reinforces our pay-for-performance philosophy and reflects compensation best practices. Key features of the 2019 Plan include:

PHILOSOPHY OF OUR EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program is designed to attract, motivate, develop, and retain the right talent, in the right places, at the right time. We strive to provide a total compensation package to our executives that is competitive with employers who compete with us for talent and is equitable among our internal workforce, balancing pay-for-performance alignment with retention considerations. This means that even during temporary downturns in either the foodservice distribution industry or the general economy, our program is designed to appropriately incentivize our executives to stay committed to executing our long-range plan and increasing long-term stockholder value. The guiding principles described in the section entitled “Executive Summary” above form the basis of our executive compensation philosophy.

COMPONENTS AND OBJECTIVES OF OUR EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program for fiscal 2019 was built upon the following framework:

ANNUAL CASH COMPENSATION

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LONG-TERM EQUITY INCENTIVE COMPENSATION

HOW WE MAKE COMPENSATION DECISIONS

The Compensation Committee, in consultation with management and its independent compensation consultant, regularly evaluates whether our executive compensation program reinforces our pay-for-performance philosophy and enhances long-term stockholder value creation.

COMPENSATION COMMITTEE OVERSIGHT

The Compensation Committee is responsible for overseeing our executive compensation program. The Compensation Committee determines and approves all compensation for our NEOs, including the framework and components of our executive compensation program. When setting compensation levels, the Compensation Committee is assisted by our CEO, who evaluates the performance of and presents an annual compensation recommendation for each of our other executives. While our Lead Independent Director (who is also the Chair of the Nominating and Corporate Governance Committee) evaluates our CEO’s performance and sets his goals each fiscal year, the Compensation Committee approves all compensation awards and payout levels for the CEO based on that evaluation. For fiscal 2019, our CEO set his goals in consultation with our Lead Independent Director and then provided a self-assessment of his performance at year-end to our Lead Independent Director. Feedback was also solicited from the full Board in executive session, and this feedback was ultimately shared with the Compensation Committee to support its decisions regarding CEO compensation.

The Compensation Committee also consults with members of our human resources, legal, and finance organizations annually to assess whether our compensation plans, policies, and practices encourage excessive or inappropriate risk taking by our employees. As a result of the assessment, the Compensation Committee has concluded that our compensation plans, policies, and practices do not encourage excessive or inappropriate risk taking and are not reasonably likely to have a material adverse effect on the Company.

The Compensation Committee uses several resources and analytical tools when making decisions related to executive compensation. These resources and tools are described below.

INDEPENDENT COMPENSATION CONSULTANT

Meridian provides independent advice to the Compensation Committee in connection with matters pertaining to executive compensation. The scope of services Meridian provides includes:

Meridian is engaged directly by the Compensation Committee to provide these services. In fiscal 2019, Meridian did not provide any services to management that were unrelated to executive compensation. In addition, as described in the section entitled “Director Compensation” on page 17, Meridian assists the Nominating and Corporate Governance Committee in the review of our non-employee director compensation program.

After evaluating information presented in accordance with the independence rules of the NYSE, the Compensation Committee concluded that Meridian was independent.

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HUMAN RESOURCES DEPARTMENT

Our Human Resources Department provides benchmarking data (consisting of peer group analysis and supplemental external compensation survey data analysis) and recommendations with respect to annual base salary, AIP, and LTIP compensation decisions to the Compensation Committee. As requested by the Compensation Committee, our Human Resources Department works with Meridian to gather and analyze relevant competitive market data and to identify and evaluate various alternatives for features of our executive compensation program.

ROLE OF CEO IN DETERMINING EXECUTIVE COMPENSATION

Our CEO assists the Compensation Committee by evaluating the performance of the other NEOs and recommending compensation levels. Our CEO also consults with management with respect to recommendations for the Company’s performance goals used in the AIP and LTIP. In preparing recommendations to the Compensation Committee, our CEO consults benchmarking data and other market surveys from Meridian and the Human Resources Department. Our CEO structures his recommendations to adhere to the principles and objectives described in the section entitled “Philosophy of Our Executive Compensation Program” above.

Our CEO is not involved in, or present during, discussions related to his own compensation.

USE OF COMPETITIVE MARKET DATA

We believe our executive compensation program should be competitive with the external market for executive talent. For the NEOs, we generally construct external market comparisons by examining peer group proxy statement data and compensation market survey data, and we generally target the median of base salary, annual cash incentive target, and long-term equity incentive opportunity ranges for similar executive positions in our peer group. Although the elements of our compensation packages are benchmarked against the market, the Compensation Committee believes in the importance of retaining flexibility in structuring our compensation programs and adjusting awards for the evolving business environment.

Periodically, the Compensation Committee and Meridian review our peer group to evaluate whether it continues to reflect companies that are similar to us in business, size, and complexity and with which we compete for top executive talent. In selecting our peer group:

The Compensation Committee approved the following peer group of companies for executive pay and program benchmarking for fiscal 2019. This is the same peer group as was used for fiscal 2018, with the exception of the removal of The Andersons, Inc. due to its revenue, Adjusted EBITDA, and market capitalization no longer being within a reasonable range when compared to the Company.

INTERNAL ANALYSIS IN SETTING COMPENSATION ELEMENTS

With respect to annual base salary, AIP awards, and LTIP awards, the Compensation Committee also considers the internal equity of the compensation awarded by using comparisons within the Company based on, among other factors, role, title, and relative responsibilities.

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CONSIDERATION OF 2019 SAY ON PAY VOTE

At our 2019 annual meeting, stockholders showed strong support for our executive compensation program, with 97% of the votes cast approving, on an advisory basis, the compensation paid to our NEOs. The Compensation Committee considered this result and, consequently, did not make significant changes to our executive compensation program. Similar to the prior year, our executive compensation program for fiscal 2019 continued to emphasize performance and retention-based compensation opportunities designed to incentivize our executives to execute our long-range plan and increase long-term stockholder value.

We value the perspectives of our stockholders, and the Compensation Committee will continue to consider the outcomes of say on pay votes when making future executive compensation decisions.

OVERVIEW OF FISCAL 2019 ANNUAL INCENTIVE PLAN

The AIP is designed to offer opportunities for cash compensation tied directly to the Company’s annual financial performance. We pay AIP awards in cash, with payments generally made in the first quarter of the fiscal year following the plan year. Our NEOs are not eligible to receive an AIP award unless they were employed by the Company at the end of the plan year.

In February 2019, the Compensation Committee approved the AIP framework and target awards for fiscal 2019. The framework for the fiscal 2019 AIP for our NEOs was based on the following:

An NEO’s Eligible Earnings are equal to the NEO’s base salary earnings during the plan year. If an NEO’s salary changes during the year, those changes are reflected in the individual’s Eligible Earnings for purposes of the AIP.

An NEO’sAIP Target Percentage is the individual percentage by which we determine the NEO’s target award (i.e., the award the NEO would receive if the target level of performance was achieved). Eligible Earnings is multiplied by the AIP Target Percentage to determine the target award. The individual AIP Target Percentages are based on competitive market data and are established as a percentage of Eligible Earnings. The Compensation Committee designates individual AIP Target Percentages for each NEO at the beginning of each plan year. If an NEO’s AIP Target Percentage changes during the year, the individual’s AIP Target Percentage is prorated for that plan year.

An NEO’sBusiness Performance Factor is calculated based on the Company’s performance against predetermined annual Adjusted EBITDA, Net Debt, and, for certain NEOs, individual functional performance goals. The Business Performance Factor is multiplied by the target award for the NEO to arrive at the AIP award payout.

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The potential payments under the fiscal 2019 AIP award ranged from 0% to 150% of our NEOs’ target awards. The Compensation Committee believes that our executives should be awarded annual cash bonuses based on the Company’s achievement of its performance goals. For this reason, the fiscal 2019 AIP did not include any potential for upward modification based on extraordinary individual performance. The Compensation Committee retains the ability, however, to use negative discretion to reduce or eliminate an AIP award based on individual performance.

OVERVIEW OF FISCAL 2019 LONG-TERM EQUITY INCENTIVE PLAN

Our LTIP is designed to provide an opportunity for wealth creation tied to our long-term performance. Our long-term equity incentives provide a balanced focus on both short-term and long-term goals for our NEOs. These incentives are important to recruiting, retention, and motivation. LTIP awards are designed to compensate our NEOs for their long-term commitment to the Company, while motivating sustained increases in our financial performance and stockholder value. Moreover, the LTIP creates long-term incentive opportunities that are competitive with the opportunities offered by the companies with which we compete for talent.

For fiscal 2019, our NEOs received LTIP awards under the 2016 Plan that were divided equally among performance-based RSAs, time-based RSAs, and time-based stock options. Our equity awards are granted with a per share price or exercise price, as applicable, equal to the “fair market value” of one share of our common stock on the date of grant. The individual LTIP target award values were based on competitive market data.

FISCAL 2019 LTIP PERFORMANCE GOALS

SUMMARY OF FISCAL 2019 EXECUTIVE COMPENSATION PROGRAM

For fiscal 2019, except as otherwise noted below, our NEOs’ compensation primarily consisted of a base salary, an AIP award, and LTIP awards.

BASE SALARY

The following table shows the base salary of each of our NEOs for fiscal 2019 that was approved by the Compensation Committee:

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In addition, in October 2019, the Compensation Committee approved a biweekly stipend in the amount of $5,000 payable to Mr. Kvasnicka in recognition of his interim leadership of our supply chain organization, which was paid beginning in November 2019.

FISCAL 2019 ANNUAL INCENTIVE PLAN AWARDS

The AIP Eligible Earnings, AIP Target Percentages, and AIP target awards for our NEOs for fiscal 2019 were as follows:

BUSINESS PERFORMANCE FACTORS AND POTENTIAL PAYOUTS

The threshold, target, and maximum Adjusted EBITDA and Net Debt performance goals and unweighted payout percentages for the fiscal 2019 AIP are set forth in the following table. The Compensation Committee believes the threshold and target levels of performance represent challenging but attainable performance, while the maximum level represents extremely challenging and exemplary performance. Adjusted EBITDA performance is determined independently of Net Debt performance. As a result, it is possible that the payout for either measure, or both measures, could be zero.

The following table reflects the calculation of the AIP Business Performance Factors for fiscal 2019 for our NEOs:

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SUMMARY OF FISCAL 2019 AIP AWARDS

Based on the applicable Business Performance Factors, the fiscal 2019 AIP awards approved by the Compensation Committee and paid to the NEOs in March 2020 are as follows:

FISCAL 2019 LONG-TERM INCENTIVE PLAN AWARDS

In fiscal 2019, our NEOs received LTIP awards consisting of performance-based RSAs, time-based RSAs, and time-based stock options under the 2016 Plan.

FISCAL 2019 LTIP MIX

The total fiscal 2019 target grant value and the number of performance-based RSAs, time-based RSAs, and time-based stock options that were awarded to the NEOs, and their vesting conditions, are as follows:

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VESTING OF PRIOR PERFORMANCE-BASED AWARDS

FISCAL 2017 PERFORMANCE-BASED AWARDS

In fiscal 2017, we redesigned our long-term incentive program to better align pay with performance over the long-term. The fiscal 2017 performance-based RSAs that we granted to our NEOs will vest on June 3, 2020 based on our relative achievement of Adjusted EBITDA and Adjusted ROIC growth goals during the three-year performance period ended December 28, 2019, which were set by the Compensation Committee at the beginning of the three-year performance period.

The threshold, target, and maximum Adjusted EBITDA and Adjusted ROIC growth goals and the corresponding vesting percentages applicable to these awards are set forth in the following table:

Based on the Company’s actual annual Adjusted EBITDA growth rate for each fiscal year in the three-year performance period, the vesting percentage for the corresponding tranches of these performance-based equity awards was determined as follows:

Based on the Company’s actual annual Adjusted ROIC growth rate for each fiscal year in the three-year performance period, the vesting percentage for the corresponding tranche of these performance-based equity awards was determined as follows:

Accordingly, based on the Company’s Adjusted EBITDA and Adjusted ROIC growth rates during the three-year performance period ended December 28, 2019, the vesting percentage of the performance-based RSAs granted in fiscal 2017 to our NEOs was 89.72% of the target shares underlying the awards after applying the weighting of each performance goal.

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FISCAL 2016 PERFORMANCE-BASED AWARDS

Prior to fiscal 2017, awards granted to our executives were comprised of a mix of 50% time-based equity awards and 50% performance-based equity awards, each of which was to vest annually in four equal tranches. Under our prior long-term incentive program design, the Compensation Committee set annual Adjusted EBITDA performance goals for each tranche of the outstanding performance-based equity awards. Accordingly, the fourth and final tranche of the performance-based equity awards granted in fiscal 2016 was subject to a performance goal set in fiscal 2019. The Adjusted EBITDA performance goal for fiscal 2019 was $1,180 million, while actual Adjusted EBITDA for fiscal 2019 was $1,171 million (excluding contributions from the Food Group acquired in fiscal 2019; for additional information regarding and reconciliation of this non-GAAP financial measure, see Appendix A). Because the Company did not achieve the Adjusted EBITDA performance goal for fiscal 2019, the Compensation Committee certified on February 18, 2020 that the applicable tranche of these performance-based equity awards will not vest in June 2020. Accordingly, the awards will be forfeited by the NEOs.

FISCAL 2015 PERFORMANCE-BASED AWARDS

In addition, the fourth and final tranche of the performance-based equity awards granted to our NEOs in fiscal 2015 will not vest because the Company did not achieve a cumulative Adjusted EBITDA performance goal for the combined fiscal 2018 and fiscal 2019 performance period. As discussed in the proxy statement for the 2019 annual meeting, those awards could have vested in June 2019 based upon the Company’s Adjusted EBITDA performance for fiscal 2018 or in June 2020 based upon the Company’s cumulative Adjusted EBITDA performance for the combined fiscal 2018 and fiscal 2019 performance period. Since neither vesting condition was met, these awards will be forfeited by the NEOs.

COMPENSATION ARRANGEMENTS FOR FORMER CHIEF SUPPLY CHAIN OFFICER

Mr. Connolly resigned as our Executive Vice President and Chief Supply Chain Officer effective October 14, 2019. As a result, his realized compensation for fiscal 2019 consisted primarily of base salary for the portion of fiscal 2019 he was employed by the Company and a one-time cash sign-on bonus in connection with his offer of employment. Mr. Connolly was not eligible to receive a cash bonus award under the fiscal 2019 AIP, and he forfeited all equity awards that had been granted to him by the Company. Further, he did not receive any severance benefits or other payments under his executive severance agreement with the Company.

EXECUTIVE SEVERANCE AGREEMENTS

All of our NEOs are employed “at will” and have no defined term of employment with us. Each of the NEOs has an executive severance agreement with the Company. These agreements outline additional compensation considerations in the event of (1) termination of the executive’s employment by the Company other than for “cause” or (2) termination of the executive’s employment by the executive with “good reason.” The executive severance agreements are designed to provide standard protections to both the executive and the Company and help us to ensure continuity and aid in recruitment and retention. We believe that the severance benefits are reasonable and appropriate to protect the NEOs against circumstances over which they do not have control. The executive severance agreements also provide us with commitments of non-disclosure, non-competition, non-solicitation, and non-interference.

The key terms of our executive severance agreements include:

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base salary through the date of termination, (2) a prorated AIP award for the year of termination, (3) a fixed payment equal to 24 months (30 months for Mr. Satriano) of the executive’s annual base salary, (4) a fixed bonus equal to 2.0 times (2.5 times in the case of for Mr. Satriano) the executive’s then-current AIP target award, and (5) a payment for COBRA benefit continuation during the severance period.

RETIREMENT BENEFITS AND OTHER COMPENSATION

The only retirement benefits currently provided to our NEOs are those under our tax-qualified 401(k) savings plan, which is offered to all eligible employees (not just to our executives). Mr. Kvasnicka previously accrued benefits under the US Foods, Inc. Defined Benefit Pension Plan and the Alliant Foodservice, Inc. Pension Plan, which have since been consolidated into the US Foods Consolidated Defined Benefit Retirement Plan and are now frozen for all exempt employees.

Each of our NEOs receives an annual executive allowance, which is intended to defray expenses such as those for financial and legal planning, professional organization membership, and executive physicals, and a monthly cellular phone allowance. We do not reimburse our NEOs for taxes related to their annual executive allowance or any other compensation or benefits.

EXECUTIVE COMPENSATION RECOUPMENT POLICY

Our Executive Compensation Recoupment Policy provides that in the event of a restatement of our financial results due to material noncompliance with any financial reporting requirement under the federal securities laws, we will use reasonable efforts to recover the amount of any excess incentive-based compensation paid to any current or former executive officer during the previous three fiscal years, including compensation received under the AIP and LTIP. The Compensation Committee has the sole discretion, subject to applicable law, to determine the form and timing of the recoupment. This may include repayment from the executive or an adjustment to the payout of a future incentive award.

EXECUTIVE STOCK OWNERSHIP PROGRAM

Each of our executives and senior leaders is required to satisfy certain stock ownership guidelines. These guidelines have been designed to closely align our executives’ and senior leaders’ financial interests with those of our stockholders. The guidelines require equity holdings with a value of six times base salary for the CEO and three times base salary for our other executives. Executives have five years from the later of the date the stock ownership guidelines were effective and the executive’s promotion/hire date to reach the applicable guideline. All of our executives were in compliance with the guidelines at the end of fiscal 2019.

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COMPENSATIONCOMMITTEE REPORT

The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management of the Company. Based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.

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EXECUTIVECOMPENSATION

FISCAL 2019 SUMMARY COMPENSATION TABLE

The following table provides information regarding the compensation of the NEOs for fiscal 2019, as well as fiscal 2018 and fiscal 2017 where applicable:

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EXECUTIVE COMPENSATION
FISCAL 2019 SUMMARY COMPENSATION TABLE

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EXECUTIVE COMPENSATION
FISCAL 2019 GRANTS OF PLAN-BASED AWARDS

FISCAL 2019 GRANTS OF PLAN-BASED AWARDS

The following table provides information regarding plan-based awards granted to the NEOs during fiscal 2019: