Conagra Brands (CAG) DEF 14ADefinitive proxy

UNITED STATES

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		Conagra Brands, Inc.
		222 Merchandise Mart Plaza
		Suite 1300
		Chicago, Illinois 60654

August 13, 2020

Dear Shareholders,

I am pleased to invite you to join us for the Conagra Brands Annual Meeting of Shareholders, or the Annual Meeting, which will be held virtually via live webcast on Wednesday, September 23, 2020, at 11:00 a.m. CDT. You will be able to attend and participate in the Annual Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/CAG2020.

We have decided to hold the Annual Meeting virtually this year due to the uncertainty relating to the coronavirus (COVID-19) pandemic. In addition to supporting the health and well-being of our shareholders, employees, and their families, we believe that hosting a virtual Annual Meeting will enable greater shareholder attendance and participation, improve meeting efficiency and our ability to communicate effectively with our shareholders, and reduce the cost of the Annual Meeting. The Annual Meeting will include a brief report on our business, a discussion of and voting on matters described in the Notice of 2020 Annual Meeting of Shareholders and Proxy Statement, and a question-and-answer session.

Conagra’s performance in fiscal 2020 was unprecedented. By leveraging the brands, capabilities, and culture built over the last five years, our team effectively responded to the COVID-19 related increase in consumer demand for our products. We simultaneously strengthened our business for the long-term. At all times, we did so with employee health and safety at the forefront. I am particularly thankful for the thousands of hardworking Conagra team members in our manufacturing facilities across North America. Without their dedication, we could not have delivered for our consumers, customers, or shareholders.

With fiscal 2021 now underway, we remain as confident as ever in the long-term value creation potential of the company. On behalf of our entire organization, I thank you for your shared confidence that Conagra Brands continues to be a compelling investment opportunity.

Sincerely,

Sean Connolly

President and Chief Executive Officer

Notice of Annual Meeting of Shareholders and Proxy Statement

ITEMS OF BUSINESS

Colleen Batcheler

Executive Vice President, General Counsel and Corporate Secretary

August 13, 2020

Table of Contents

Proxy Statement

We are providing the enclosed proxy materials to you in connection with the solicitation by the Board of Directors, or the Board, of Conagra Brands, Inc. (referred to as Conagra Brands, Conagra or the company) of proxies to be voted at the Annual Meeting of Shareholders to be held on September 23, 2020, or the 2020 Annual Meeting. We began making our proxy materials available to shareholders on or about August 13, 2020.

Conagra Brands At a Glance

Our Company

Conagra Brands (NYSE: CAG) is one of North America’s leading branded food companies. From our headquarters in Chicago and guided by an entrepreneurial spirit, we combine a rich heritage of making great food with a sharpened focus on innovation. Our portfolio evolves to satisfy people’s changing food preferences. Our iconic brands, such as Birds Eye^®, Marie Callender’s^®, Banquet^®, Healthy Choice^®, Slim Jim^®, Reddi-wip^®, and Vlasic^®, as well as emerging brands, including Angie’s^® BOOMCHICKAPOP^®, Duke’s^®, Earth Balance^®, Gardein^®, and Frontera^®, offer choices for every occasion.

Conagra By the Numbers

Fiscal 2020 Highlights

For Conagra Brands, fiscal 2020 was a year of navigating unprecedented business conditions and, in the face of extraordinary uncertainty, delivering for shareholders. We set rigorous goals that were communicated to investors and incorporated into our compensation programs in July 2019. Over the first two quarters of fiscal 2020, our business was on-track to meet expectations. We made progress strengthening our brands, introduced new product innovations, and identified cost synergies associated with the fiscal 2019 Pinnacle Foods acquisition in excess of prior plans. The third fiscal quarter, however, brought discrete headwinds; softness appeared in our foodservice business and in categories across our retail portfolio. As a result, we lowered our expectations for the full fiscal year. Subsequently, at the beginning of the fourth quarter, the COVID-19 pandemic drove a surge in consumer demand for our food. Our modernized portfolio, strong operational foundation, commitment to employee health and safety, agile culture, and dedicated team enabled us to respond effectively. Ultimately, we delivered results consistent with and in some instances above our original fiscal 2020 guidance.

Our Results:

With respect to the three-years ended with fiscal 2020, the company made significant progress on its transformation. During fiscal 2018, the company continued its efforts to strengthen the legacy Conagra portfolio through investments in innovation, retailer marketing investments and the value over volume playbook. The company also acquired the Angie’s^® BOOMCHICKAPOP^® popcorn business and Sandwich Bros. of Wisconsin frozen sandwich business. During fiscal 2019, we acquired Pinnacle Foods, improving the scale and breadth of our portfolio. And during fiscal 2020, we rose to the challenge of the COVID-19 pandemic, and delivered for our consumers, customers and shareholders.

As a result of our focus on reshaping the Conagra Brands portfolio over the last several years, and our accomplishments in fiscal 2020, we believe that we enter fiscal 2021 with a solid foundation from which to deliver for investors.

Fiscal 2020 Compensation

For fiscal 2020, the Human Resources Committee of our Board of Directors established an executive compensation program that was designed to promote attainment of our fiscal 2020 operating plan and long-term goals. More specifically, the program contained the following elements:

In designing the program, the Committee chose to include a mix of compensation types (salary, benefits, cash-based incentives and equity-based incentives) and a mix of performance periods (single year and multi-year) to promote long-term strategic decision-making. This approach was also intended to minimize the likelihood that our executives would be motivated to pursue risky or unsustainable results.

As more fully described in the “Compensation Discussion and Analysis” section of the Proxy Statement, beginning on page 40, our Human Resources Committee considered the positive business outcomes described above in determining final payouts under incentive programs with performance periods concluding in fiscal 2020. Our Chief Executive Officer and other senior executives named in this Proxy Statement received above target payouts under both the fiscal year 2020 annual incentive plan and fiscal year 2018 to fiscal year 2020 cycle of the long-term performance share plan.

The Human Resources Committee believes that its fiscal 2020 compensation decisions appropriately reflect its pay-for-performance philosophy.

Voting Items and Recommendations

At the 2020 Annual Meeting of Shareholders, we are asking shareholders to vote on the following items:

Our Social Responsibility

At Conagra, we believe that when our people, our communities and the environment are nourished and thriving, so are we. We publish a Citizenship Report each year and make it available on our website at https://www.conagrabrands.com/our-company/corporate-social-responsibility. The report details our citizenship strategy, which covers four focus areas: Good Food, Better Planet, Responsible Sourcing and Stronger Communities. It also summarizes our accomplishments. We encourage you to read our entire Citizenship Report; a few highlights follow.

		Better Planet

Climate Change Mitigation - Since 2009, we have decreased Conagra’s carbon footprint by 189,280 metric tons by engaging the employees closest to the opportunities in our efforts. Our Sustainable Development Awards program is a cornerstone of our climate change mitigation strategy and uses an annual internal competition to recognize innovative ideas related to sustainable production. Conagra Brands is also a signatory of the Science-Based Targets Initiative, and we are in the process of setting science-based climate change targets in line with the Initiative’s protocols.

Water Conservation – Our water conservation projects have conserved 3.5 billion gallons of water since 2009, including 120 million gallons of water in fiscal year 2020. More than 85% of our operational water comes from areas on the lower end of the World Resources Institute water risk spectrum.

Zero Waste - In fiscal year 2020, eight of our manufacturing facilities diverted more than 95% of waste materials from landfills through recycling and other innovative waste reduction measures.

		Responsible Sourcing

All of our goods and services are sourced in accordance with our Supplier Code of Conduct, under which suppliers are required to: reduce environmental impacts such as deforestation, greenhouse gas emissions, and waste generation; protect water resources through restorative or conservation efforts; support social needs in the communities in which they operate though philanthropic investment, diversity and inclusion, and human rights practices; and support efforts to implement traceability of goods and services throughout the supply chain.

Conagra’s approach to product packaging takes environmental impacts into account while continuing to ensure food quality and safety. We are striving toward making 100% of our current plastic packaging renewable, recyclable or compostable by 2025.

		Stronger Communities

Corporate Ethics and Culture - Our Code of Conduct provides guideposts for how our employees and Board members must conduct themselves when representing Conagra both inside and outside the workplace. We conduct annual trainings to ensure that employees are aware of our expectations and their obligations under the Code of Conduct.

We take pride in our culture—the most energized, high-impact culture in the food industry. We call it the Conagra Experience—a culture that supports and enables our six Timeless Values:

Human Rights, Diversity and Inclusion - We leverage the differences we bring to the table as a competitive advantage.

Employee Health & Safety - Our global Environment, Occupational Health and Safety Philosophy drives us towards continuous environment health and safety (“EH&S”) improvement, as measured by our leading environmental and safety indicators and implemented through our EH&S management approach. During fiscal year 2020, our Occupational Safety & Health Administration incident rate was 1.98 incidents per 100 full-time workers, which is below the industry average of 4.21 for companies in the food manufacturing sector.

Community Impact & Philanthropy - We believe in giving back to the communities in which we live and work. Employee volunteerism, product donations and financial contributions are all a part of our community impact approach.

Who We Are

Currently, the Board consists of 11 directors whose terms expire at the 2020 Annual Meeting. Mr. Stephen Butler, one of the Company’s current independent directors, has turned 72, Conagra’s retirement age under its Corporate Governance Principles. As a result, Mr. Butler has not been re-nominated as a director and will not stand for re-election at the 2020 Annual Meeting. Our Board thanks Mr. Butler for his many years of exemplary service.

Based on the recommendation of the Board’s Nominating and Corporate Governance Committee, the Board has nominated 10 current directors, as named in this Proxy Statement, for election at the 2020 Annual Meeting. Information about each of the 10 nominees is set forth on pages 9-17. If elected, each of the directors will hold office until the Conagra Brands 2021 Annual Meeting of Shareholders, and until their successors have been elected and qualified. We have no reason to believe that any of the nominees for director will be unable to serve if elected.

How We Are Selected

Our Skills and Qualifications

We seek independent directors with high standards for ethics and integrity. Individuals must be willing to commit the time needed to carry out their director duties, including overseeing our strategy, CEO succession planning, and director refreshment. We also seek directors with experience in the following areas:

The following matrix summarizes our director nominees’ individual experiences, skills and characteristics. This summary is not an exhaustive list of each nominee’s contributions to the Board.

Public Company Board Experience

Active / Former C-Suite Executive

Market- Facing Experience

International Expertise

Finance / Capital Management Expertise

M&A Experience

Technology Expertise

Risk     Management     Expertise

Anil Arora

Thomas K. Brown

Sean M. Connolly

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Joie A. Gregor

Rajive Johri

Richard H. Lenny

Melissa Lora

Ruth Ann Marshall

Craig P. Omtvedt

Scott Ostfeld

The Board also values diversity and strives to build a Board of diverse views, perspectives, backgrounds and experiences. While diversity is viewed broadly at Conagra Brands, the Board also measures its diversity along more traditional lines, including by examining:

		Diversity     6 of 10 are female or ethnically diverse				Age         62: Average age of the Board

Director Refreshment

The Board desires that its membership collectively hold a broad range of skills, education, experiences and qualifications that can be leveraged for the benefit of the company and its shareholders. The Board uses refreshment processes to enable it to evaluate the continued alignment of the Board’s membership with the needs of Conagra Brands. The Board’s refreshment processes involve reviewing and modifying the skills and characteristics required for membership. The Board also enables planned refreshment through its maintenance of a mandatory retirement age for directors. As a result of our refreshment processes, our Board represents a mix of long-tenured directors and directors who provide new and different insights, expertise and experiences. In fact, five of our current directors (including our CEO) are new to the Board since 2015.

For additional information on the director nomination process, please see “How We Govern – Nominating and Corporate Governance Committee – Director Nomination Process” below.

Director Independence

To be considered independent, the Board must affirmatively determine that a director has no material relationship with Conagra Brands. The Board has determined that 9 of our 10 nominees for director – directors Arora, Brown, Gregor, Johri, Lenny, Lora, Marshall, Omtvedt and Ostfeld – have no material relationships with Conagra Brands and are independent within the meaning of applicable independence standards. The Board also determined that Stephen Butler, who served as a director during fiscal 2020 but who will not stand for re-election at the 2020 Annual Meeting, has no material relationships with Conagra Brands and is independent within the meaning of applicable independence standards. Mr. Connolly is not considered to be independent due to his employment with Conagra Brands.

In making its independence determinations, the Board applied the listing standards of the New York Stock Exchange, or NYSE, and the categorical independence standards contained in our Corporate Governance Principles. The Board considers even immaterial relationships, including transactions, relationships and arrangements with the company, in its decision-making process to ensure a complete view of each director’s independence.

The Board also reviewed our commercial relationships with companies on whose boards members of the Board served during fiscal 2020. The relationships with these companies involved Conagra Brands’ purchase or sale of products and services in the ordinary course of business on arm’s-length terms in amounts and under other circumstances that did not affect the relevant directors’ independence under our Corporate Governance Principles or under applicable law and NYSE listing standards.

In addition to satisfying our independence standards, each member of the Audit / Finance Committee of the Board must satisfy an additional Securities and Exchange Commission, or SEC, independence requirement. This requirement provides that the member may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than his or her director’s compensation and may not be an “affiliated person” of Conagra Brands. Each member of the Audit / Finance Committee satisfies this additional independence requirement.

The SEC and NYSE have also adopted heightened standards relating to the independence of members of the Human Resources Committee, which we refer to as the HR Committee. These standards require consideration of the source of HR Committee members’ compensation, including any consulting, advisory or other compensatory fees paid to an HR Committee member, and each HR Committee member’s affiliation with us, any of our subsidiaries or any affiliates of our subsidiaries. Each member of the HR Committee satisfies these additional independence requirements.

How We Govern

The Board is committed to performing its responsibilities in a manner consistent with sound governance practices. It routinely reviews its processes, assesses the regulatory and legislative environment, communicates with investors, and adopts governance practices as needed that support informed, competent, and independent oversight on behalf of our shareholders. Our Corporate Governance Principles provide a summary of these practices and are available on our website at http://www.conagrabrands.com/investor-relations/corporate-governance/principles. Highlights of our corporate governance practices include the following:

Board Leadership Structure

The Board believes that independent Board leadership is a critical component of our governance structure. Our Corporate Governance Principles require us to have either an independent Board Chair or, if the positions of Board Chair and Chief Executive Officer are held by the same person, a lead independent director. Since 2005, our Board Chair and CEO roles have been separate. With separate Board Chair and CEO roles, our CEO can focus his time and energy on setting the strategic direction for the company, overseeing daily operations, engaging with external constituents, developing our leaders and promoting employee engagement at all levels of the organization. Meanwhile, our independent Board Chair leads the Board in the performance of its duties by establishing agendas and ensuring appropriate meeting content, engaging with the CEO and senior leadership team between Board meetings on business developments and providing overall guidance to our CEO as to the Board’s views and perspectives, particularly on the strategic direction of the company.

Board Committees

The Board has established four standing committees: the Audit / Finance Committee, the Executive Committee, the HR Committee, and the Nominating and Corporate Governance Committee. The Audit / Finance Committee, HR Committee and Nominating and Corporate Governance Committee operate under written charters that have been approved by the full Board; each of these three committees is comprised entirely of independent directors.

Membership on each of the Board’s standing committees as of August 3, 2020 is as follows:

Name		Audit / Finance Committee		Executive Committee		HR Committee		Nominating and Corporate Governance Committee
Anil Arora
Thomas K. Brown
Stephen G. Butler(1)		Chair
Sean M. Connolly
Joie A. Gregor								Chair
Rajive Johri
Richard H. Lenny		ex officio		Chair
Melissa Lora(1)
Ruth Ann Marshall						Chair
Craig P. Omtvedt
Scott Ostfeld
Total Meetings in FY2020		10		--		4		4

Audit / Finance Committee

Financial Expertise and Financial Literacy

Each member of the Audit / Finance Committee is financially literate within the meaning of NYSE rules and the Board has determined that directors Arora, Butler, Johri, Lora and Omtvedt are qualified as audit committee financial experts within the meaning of SEC regulations. All directors serving on the Audit / Finance Committee are independent in accordance with SEC rules, NYSE listing standards and the company’s independence standards.

Related-Party Transactions

The Audit / Finance Committee has adopted a written policy regarding the review, approval, and ratification of related-party transactions (generally, transactions involving an amount in excess of $120,000 in which the company is a participant and in which a related person has or will have a direct or indirect material interest). Under the policy, all related-party transactions must be pre-approved by the Audit / Finance Committee unless circumstances make pre-approval impracticable. In the latter case, management may enter into the transaction, but the transaction remains subject to ratification by the Audit / Finance Committee at its next regular, in-person meeting.

In determining whether to approve or ratify a related-party transaction, the Audit / Finance Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related-party’s interest in the transaction. No director is permitted to participate in any approval of a related-party transaction in which he or she is a related party, except that the Board member will provide all material information concerning the related party transaction to the Audit / Finance Committee. On at least an annual basis, the Audit / Finance Committee reviews and assesses ongoing related-party transactions to determine whether they comply with the company’s guidelines and that the relationships remain appropriate. All related-party transactions are disclosed to the full Board.

During fiscal 2020, one related party transaction arose. David B. Biegger is the company’s Executive Vice President and Chief Supply Chain Officer. One of Mr. Biegger’s immediate family members is employed by the company as a Brand Manager and earned total compensation in excess of $120,000. The immediate family member’s position does not report, directly or indirectly, to Mr. Biegger. In addition, the individual is compensated in a manner that is appropriate for their responsibilities and experience and in accordance with standard compensation practices available to other individuals in comparable roles. The relationship described was reviewed and ratified in accordance with our policy for review of transactions with related persons.

Executive Committee

Human Resources Committee

Executive and Director Compensation

The HR Committee has retained authority over the determination of executive and non-employee director compensation, subject only to the further involvement of the other independent directors with respect to the approval of the overall compensation for non-employee directors and any base salary change for the CEO. The HR Committee may delegate its responsibilities to subcommittees comprised of one or more HR Committee members or to selected members of management, subject to requirements of our by-laws and applicable laws, regulations and the terms of shareholder-approved plans. Additional information about the HR Committee’s processes for determining executive compensation and the role of the HR Committee’s compensation consultant can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement.

Human Capital Management

In addition to leading the Board’s oversight of succession planning, the HR Committee takes an active interest in making sure all employees are fully engaged and realizing their potential. To accomplish this, the HR Committee receives reports from management on the diversity pipeline within the company and initiatives underway focused on improving the diversity of the company’s workforce. The HR Committee also reviews the human capital strategic plan and progress on work underway to ensure Conagra achieves its vision of having the most energized, highest impact culture in food.

Compensation Committee Interlocks and Insider Participation

The Committee members set forth above, as well as Mr. Johri, served as members of the HR Committee during fiscal 2020. During fiscal 2020, none of the current or former executive officers of Conagra Brands or any of its current employees served on the compensation committee (or equivalent) or the board of directors of another entity whose executive officer(s) served on the HR Committee or the Board of Conagra Brands.

Additional information about the roles and responsibilities of the HR Committee is provided in the “Compensation Discussion and Analysis” section of this Proxy Statement.

Nominating and Corporate Governance Committee

Director Nomination Process

The Nominating and Corporate Governance Committee considers Board candidates suggested by Board members, management and shareholders. During fiscal 2020, the Nominating and Corporate Governance Committee also retained a third-party search firm to identify director candidates. The Nominating and Corporate Governance Committee provided the third-party search firm with guidance as to the skills, experience and qualifications that the Nominating and Corporate Governance Committee was seeking in potential candidates, and the search firm identified candidates for the Nominating and Corporate Governance Committee’s consideration. Shareholders may also directly nominate candidates pursuant to our “proxy access” bylaws, as described below. Shareholders wishing to submit candidates for election as directors must notify our Corporate Secretary in writing by delivering or mailing a notice to our principal executive offices at 222 Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654. See “— Ability of Shareholders to Nominate Directors via Proxy Access” and “Our Annual Meeting of Shareholders — Our 2021 Annual Meeting of Shareholders” for further details regarding the procedures for submission of director nominations by shareholders.

When a potential candidate is brought to the Board’s attention, the Nominating and Corporate Governance Committee makes an initial determination as to whether to conduct a full evaluation of the individual. This initial determination is based on whether additional Board members are necessary or desirable. It is also based on whether, based on the information provided or otherwise available to the Nominating and Corporate Governance Committee, the prospective nominee is likely to satisfy the evaluation factors described below. If the Nominating and Corporate Governance Committee determines that additional consideration is warranted, it may request a third-party to gather additional information about the prospective director candidate. The Nominating and Corporate Governance Committee may also elect to interview a candidate.

Although the Nominating and Corporate Governance Committee does not have specific minimum qualifications that must be met for a candidate to be nominated as a director, the Nominating and Corporate Governance Committee evaluates each prospective director candidate against the standards and qualifications set forth in our Corporate Governance Principles, including, but not limited to:

In evaluating potential director nominees, the Nominating and Corporate Governance Committee assesses whether the Board, collectively, represents diverse views, perspectives, backgrounds and experiences that will enhance the Board’s and our effectiveness. The Nominating and Corporate Governance Committee seeks directors who have qualities to achieve the goal of a well-rounded, diverse Board as a whole, including through the consideration of diversity in professional experience, skills, board tenure, race, ethnicity, gender and age.

After completing its evaluation process, the Nominating and Corporate Governance Committee makes a recommendation to the Board as to who should be nominated, and the Board determines the director nominees after considering the Nominating and Corporate Governance Committee’s recommendations. The evaluation process for nominees recommended by shareholders does not differ from the process set forth above.

Ability of Shareholders to Nominate Directors via Proxy Access. If a shareholder or group of shareholders wishes to nominate a candidate directly, they may do so in accordance with the provisions set forth in our by-laws. In July 2020, our Board amended our by-laws to permit any shareholder, or group of up to 20 shareholders collectively, owning 3% or more of our outstanding shares of common stock continuously for at least three years to nominate and include in our proxy materials director nominees for election to the Board. A shareholder or shareholders, as applicable, can nominate up to

the greater of:

all in accordance with the requirements set forth more fully in our by-laws.

Under our by-laws, requests to include shareholder-nominated candidates for director in our proxy materials must be received no earlier than 150 days and no later than 120 days before the anniversary of the date that we issued our proxy statement for the previous year’s annual meeting of shareholders.

See “Our Annual Meeting of Shareholders – Our 2021 Annual Meeting of Shareholders – Other Shareholder Proposals to be Presented at our 2020 Annual Meeting” for further details regarding the procedures for submission of director nominations by shareholders.

Forum Bylaw. In December 2019, our Board amended the by-laws to designate the Court of Chancery of the State of Delaware, or the federal district court for the District of Delaware if the Court of Chancery does not have jurisdiction, as the forum for litigation related to the following types of proceedings:

The Company adopted this amendment because the Company believes the best courts to decide matters of Delaware law are the courts of Delaware. Additionally, the amendment is designed to reduce the cost and complexity of the Company’s defense of litigation. The Company had previously been sued on the same underlying facts in multiple courts and in multiple jurisdictions simultaneously.

The Board’s Role in Risk Oversight

Our senior leadership is responsible for identifying, assessing, and managing our exposure to risk. The Board and its committees play an active role in overseeing management’s activities and ensuring that management’s plans are balanced from a risk/reward perspective. The Board and its committees perform this oversight through the following mechanisms.

Board-Level Discussions

Each fiscal year, the Board reviews and discusses our strategic plan and the longer-term risks and opportunities we face. The Board routinely receives reports from significant business units and functions, and these presentations include a discussion of the business, regulatory, compliance, operational, and other risks associated with planned strategies and tactics. The Board also receives regular reports regarding the activities of management’s Enterprise Risk Management Committee, which focuses on assessing and monitoring enterprise-wide risk.

Without the right talent, we cannot implement the strategies we devise. Oversight of the company’s approach to and investment in human capital management and talent development are thus key governance matters for the Board. Directly, and through its HR Committee, the Board engages regularly with management on human capital matters. Specific HR Committee activities (noted below) are supplemented by full Board actions. For example, the full Board receives an annual succession planning presentation from management during which potential successors to senior leadership roles are discussed, arranges opportunities to engage directly with emerging talent in the organization and discusses the evolution of the Conagra culture in the context of the CEO’s annual goals and objectives.

Audit / Finance Committee Oversight

The Audit / Finance Committee’s charter requires it to review our processes for identifying and managing enterprise-wide risks facing the company, including, but not limited to, financial risks (such as derivative and treasury risks), cybersecurity and information technology risks, and operational risks, and to oversee our risks related to capital structure, including borrowing, liquidity, and allocation of capital. The Audit / Finance Committee also oversees our management of financial risks by, among other things, reviewing our significant accounting policies and the activities of management’s Enterprise Risk Management Committee and Risk Oversight Committee (which focuses on financial risk related to commodities, foreign currency, interest rate, credit, insurable risk, risk of loss and counterparty risk), maintaining oversight of our Internal Audit function, holding regular executive sessions with our Chief Financial Officer and Controller, our head of Internal Audit, and our independent auditors, and receiving regular legal and regulatory updates. Our management provides an enterprise risk management report to the Audit / Finance Committee on a semi-annual basis. The Chair of the Audit / Finance Committee reports to the Board on its activities.

Human Resources Committee Oversight

The HR Committee reviews the company’s leadership development activities to ensure appropriate succession planning occurs. This includes the establishment of an emergency succession protocol in the event of the CEO’s sudden incapacity or departure. The HR Committee also reviews the relationship between the company’s compensation programs and risk. The Chair of the HR Committee reports to the Board on its activities. The HR Committee has also adopted a series of policies and practices to reduce risk in our compensation programs. These policies and practices include the following:

Nominating and Corporate Governance Committee Oversight

The Nominating and Corporate Governance Committee assists the Board in managing risks associated with Board organization, membership and structure. It also assists management in the oversight of reputational risks. The Committee reviews the company’s policies and programs related to corporate citizenship, social responsibility and public policy issues, such as sustainability, environmental responsibility and philanthropic activities. The Nominating and Corporate Governance Committee also oversees the modest political activities of the company, including political contributions and lobbying expenditures, to ensure they focus on adding shareholder value and enhancing our position as a good corporate citizen. We publish a report of these activities on our website. The Chair of the Nominating and Corporate Governance Committee reports to the Board on its activities.

Because issues related to risk oversight often overlap, certain issues may be addressed at both the committee and Board level.

Investor Engagement

We conduct investor outreach throughout the year. Our efforts help ensure that management and the Board understand and consider the issues that matter most to our shareholders and allow us to effectively address them. Management regularly attends investor conferences, holds one-on-one and small group meetings and calls with investors, and also has the opportunity to directly interact with investors and analysts during our quarterly earnings conference calls. On two occasions over the last five years, management has also hosted a large-scale investor day event at our headquarters and webcast the presentations live. Investors and analysts may email IR@conagra.com or call (312) 549-5002 to contact our Investor Relations Team.

Corporate Governance Materials Available on Our Website

To learn more about our governance practices, you can review any of the following documents at http://www.conagrabrands.com/investor-relations/corporate-governance:

We promptly post updates to these documents on our website. The information on our website is not, however, and will not be deemed to be, a part of this Proxy Statement or incorporated by reference into any of our other filings with the SEC. These documents are also available in print to any shareholder who requests them from the Corporate Secretary.

How to Communicate with Us

We welcome opportunities to engage and receive feedback from our shareholders and other important stakeholders and believe that such engagement is critical to our effectiveness. You may contact any of our directors individually, any Committee of the Board, our independent directors as a group, our Chairman of the Board, or the Board generally by writing to:

Conagra Brands Board of Directors

c/o Corporate Secretary, Conagra Brands, Inc.

222 Merchandise Mart Plaza, Suite 1300

Chicago, Illinois 60654

Communications are compiled by the Corporate Secretary and forwarded to the addressee(s). The Corporate Secretary routinely filters communications that are solicitations, consumer complaints, unrelated to Conagra Brands, or Conagra Brands’ business or determined to pose a possible security risk to the addressee.

You may also attend the 2020 Annual Meeting, reach out to our Shareholder Services line and share information with our Investor Relations team. See “Investor Engagement” above.

We encourage you to share your feedback by voting on the voting items described in this Proxy Statement. We are attuned to input from each of these sources and encourage your feedback.

How We Are Paid

We use a combination of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on the Board. On an annual basis, the HR Committee recommends the non-employee director compensation program to the Board for approval. In setting director compensation, the HR Committee receives input from FW Cook, its independent compensation consultant, on factors including the time commitment and skill level required to serve on the Board, as well as broader market practices. In addition, our Conagra Brands, Inc. 2014 Stock Plan places a limit on the equity awards that may be awarded to each non-employee director in any fiscal year.

A summary of non-employee director compensation for fiscal 2020 is set forth below.

Non-Employee Director Compensation — Other than the Chairman

The following table summarizes the compensation program for our non-employee directors other than the Chairman that was in effect during fiscal 2020. No changes were made to the compensation program described below from fiscal 2019 to fiscal 2020.

All non-employee directors (other than the Chairman) serving as of the first trading day of fiscal 2020 received 5,054 RSUs on May 28, 2019 (targeted value of $150,000). These RSUs vested on May 28, 2020.

Vesting of the RSUs in the non-employee director compensation program is accelerated in the event of death or permanent disability. If a director is no longer serving one year from the date of grant, vesting is prorated 25% for each fiscal quarter during which the director served for any amount of time.

Dividend equivalents are paid on the RSUs at the regular dividend rate in shares of our common stock.

Non-Employee Director Compensation — Chairman

In lieu of the elements described above, the Chairman’s compensation for fiscal 2020 consisted of a grant of RSUs with a targeted value equal to $425,000. The number of RSUs granted, 14,319, was determined by dividing $425,000 by the average closing price of our common stock on the NYSE for the 30 trading days prior to the grant date of May 28, 2019. The material terms of the RSUs were identical to those described above for non-employee directors other than the Chairman.

Other Non-Employee Director Compensation Programs

In addition to the cash payments and equity awards described above, non-employee directors were entitled to participate in the following programs during fiscal 2020:

Director Stock Ownership Requirements

The Board has adopted stock ownership requirements for its non-employee directors. All non-employee directors, including the Chairman, are expected to acquire and hold shares of common stock of Conagra Brands during their tenure with a value of at least $500,000. All directors must acquire this ownership level within five years following their first election to the Board. Shares personally acquired by the non-employee directors through open market purchases or RSUs, and shares acquired upon the deferral of fees, are counted toward the ownership requirement. Unexercised stock options are not counted. Prior to meeting the guideline, non-employee directors agree not to sell any shares of

company common stock until they have reached the guideline. All of our Board members meet the stock ownership guidelines or have followed the retention requirements.

At fiscal 2020 year-end, none of our non-employee directors had any outstanding stock awards or outstanding unexercised option awards.

The Audit / Finance Committee has sole authority to appoint, retain, compensate, oversee and terminate our independent auditor. In addition, the Committee evaluates and ensures the rotation of the lead audit partner at our independent auditor and will, if it deems it advisable, consider the rotation of the audit firm.

The Audit / Finance Committee has appointed KPMG LLP, an independent registered public accounting firm, as our independent auditor for fiscal 2021 to conduct the audit of our financial statements. KPMG LLP has conducted the audits of our financial statements since fiscal 2006. Since that time, four different partners of the firm have served as the audit lead. The Audit / Finance Committee and the Board request that the shareholders ratify this appointment.

Representatives from KPMG LLP are expected to be present at the 2020 Annual Meeting. The representatives will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. If shareholders do not ratify the appointment of KPMG LLP as our independent auditor, the Audit / Finance Committee will reconsider the appointment. Even if the appointment of KPMG LLP is ratified, the Audit / Finance Committee may appoint a different independent auditor at any time if, in its discretion, it determines that such a change would be in the company’s and its shareholders’ best interests.

Fees billed by KPMG LLP for services provided for fiscal years 2020 and 2019 were as follows:

Audit Fees. Audit fees consist of the audits of our annual financial statements, the reviews of our quarterly financial statements and foreign statutory audits.

Audit-Related Fees. In fiscal years 2020 and 2019, audit-related fees consisted of a pension plan audit as well as other attestation services.

Tax Fees. In fiscal years 2020 and 2019, tax fees consisted of tax consultation and tax compliance services.

The Audit / Finance Committee pre-approves all audit and non-audit services performed by our independent auditor. The Audit / Finance Committee will periodically grant a general pre-approval of categories of audit and non-audit services. Any other services must be specifically approved by the Audit / Finance Committee, and any proposed services exceeding pre-approved cost levels must be specifically pre-approved by the Audit / Finance Committee. In periods between Audit / Finance Committee meetings, the Chairman of the Audit / Finance Committee has been delegated authority from the Audit / Finance Committee to pre-approve additional services; any such pre-approvals are subsequently communicated to the full Audit / Finance Committee at its next meeting.

The Audit / Finance Committee approved 100% of the services performed by KPMG LLP that were billed as Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees during fiscal years 2020 and 2019.

Audit / Finance Committee Report

The Audit / Finance Committee assists the Board in fulfilling its oversight responsibilities by reviewing (1) the integrity of the financial statements of the company, (2) the qualifications, independence and performance of the company’s independent auditor and internal audit department, (3) the compliance by the company with legal and regulatory requirements, and (4) the company’s perspectives on financing strategies and capital structure, in light of its strategic long range plans. The Audit / Finance Committee acts under a written charter, adopted by the Board, a copy of which is available on our website.

Management is responsible for the company’s financial reporting process and internal controls. Our independent auditor is responsible for performing an independent audit of the company’s consolidated financial statements, issuing an opinion on the conformity of those audited financial statements with generally accepted accounting principles and assessing the effectiveness of the company’s internal control over financial reporting. The Audit / Finance Committee oversees the company’s financial reporting process and internal controls on behalf of the Board.

The Audit / Finance Committee has sole authority to appoint, retain, compensate, oversee and terminate our independent auditor. The Audit / Finance Committee reviews the company’s annual audited financial statements, quarterly financial statements and other filings with the SEC. The Audit / Finance Committee reviews reports on various matters, including: (1) critical accounting policies of the company; (2) material written communications between our independent auditor and management; (3) our independent auditor’s internal quality-control procedures; (4) significant changes in the company’s selection or application of accounting principles; and (5) the effect of regulatory and accounting initiatives on the financial statements of the company. The Audit / Finance Committee also has the authority to conduct investigations within the scope of its responsibilities and to retain legal, accounting and other advisors to assist the Audit / Finance Committee in its functions.

During the last fiscal year, the Audit / Finance Committee met and held discussions with representatives of Conagra Brands’ management, its internal audit staff, and KPMG LLP, Conagra Brands’ independent auditor. Representatives of financial management, the internal audit staff, and our independent auditor have unrestricted access to the Audit / Finance Committee and periodically meet privately with the Audit / Finance Committee. The Audit / Finance Committee reviewed and discussed with the company’s management and KPMG LLP the audited financial statements contained in the company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020.

The Audit / Finance Committee also discussed with our independent auditor the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board, or the PCAOB, and the SEC. The Audit / Finance Committee also reviewed and discussed with KPMG LLP its independence and, as part of that review, received the written disclosures and the letter from KPMG LLP required by applicable requirements of the PCAOB regarding KPMG LLP’s communications with the Audit / Finance Committee concerning independence from Conagra Brands. The Audit / Finance Committee also considered whether the provision of non-audit services provided by KPMG LLP to the company during fiscal 2020 was compatible with the auditor’s independence.

Based on these reviews and discussions and the report of our independent auditor, the Audit / Finance Committee recommended to the Board, and the Board approved, that the audited financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020 for filing with the SEC.

Conagra Brands, Inc. Audit / Finance Committee

Consistent with our shareholders’ preference, last indicated at our 2017 Annual Meeting of Shareholders, we give our shareholders an opportunity to vote, on an advisory basis, to approve the compensation of our named executive officers on an annual basis. This vote is not intended to address any specific item of our compensation program, but rather to address our overall approach to our named executive officer compensation as we have described it in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement, beginning on pages 40 and 62, respectively.

Our executive compensation program is designed to reward performance, drive focus, engagement and execution, support our business strategies, discourage excessive risk-taking, make us competitive with other organizations for top talent, and align the interests of our executive officers with the long-term interests of our shareholders. A few notable items associated with our fiscal 2020 program include the following:

Since we began seeking a shareholder vote on our named executive officer compensation, shareholders have exhibited strong support of our executive compensation program. In each of the past five fiscal years, we have received over 92% approval on this voting item.

We are asking our shareholders to once again indicate their support for our named executive officer compensation as described in this Proxy Statement. Accordingly, we are asking our shareholders to vote to approve the following resolution:

“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion in this Proxy Statement, is hereby APPROVED.”

While this vote is advisory and not binding on our company, the Board and its HR Committee value the opinions of our shareholders and expect to consider the outcome of the vote, along with other relevant factors, when considering named executive officer compensation in the future. We expect to hold our next advisory vote at our 2021 Annual Meeting of Shareholders.

The Board of Directors recommends a vote “FOR” the resolution approving our named executive officer compensation.

Compensation Discussion and Analysis

Introduction

At Conagra Brands, our fundamental objectives are to create sustainable, profitable growth and long-term value for our shareholders. Management sets our annual and long-term business goals to support attainment of these objectives. The Board’s HR Committee (in this section, the Committee) oversees the design of our executive compensation program to promote achievement of our goals.

This Compensation Discussion and Analysis describes and analyzes our executive compensation program. Specifically, we describe and analyze the program’s application to the executive officers listed in the Summary Compensation Table; these are our “named executive officers.” For fiscal 2020, or FY20, which began on May 27, 2019 and ended on May 31, 2020, our named executive officers were:

We have provided a summary of our fiscal 2020 executive compensation program and fiscal 2020 performance in the “Executive Summary” below. For more complete information on the program and the Committee’s processes related to the program, we encourage you to read this entire Compensation Discussion and Analysis and the related sections of this Proxy Statement.

Executive Summary

Our executive compensation program is designed to encourage and reward behavior that promotes attainment of our annual and long-term goals. In turn, those goals are intended to lead to sustainable, profitable growth and long-term shareholder value. The elements of our fiscal 2020 executive compensation program were as follows:

Fiscal 2020 Highlights

For Conagra Brands, fiscal 2020 was a year of navigating unprecedented business conditions and, in the face of extraordinary uncertainty, delivering for shareholders. We set rigorous goals that were communicated to investors and incorporated into our compensation programs in July 2019. Over the first two quarters of fiscal 2020, our business was on-track to meet expectations. We made progress strengthening our brands, introduced new product innovations, and identified cost synergies associated with the fiscal 2019 Pinnacle Foods acquisition in excess of prior plans. The third fiscal quarter, however, brought discrete headwinds; softness appeared in our foodservice business and in categories across our retail portfolio. As a result, we lowered our expectations for the full fiscal year. Subsequently, at the beginning of the fourth quarter, the COVID-19 pandemic drove a surge in consumer demand for our food. Our modernized portfolio, strong operational foundation, commitment to employee health and safety, agile culture, and dedicated team enabled us to respond effectively. Ultimately, we delivered results consistent with and in some instances above our original fiscal 2020 guidance.

Our Results:

With respect to the three-years ended with fiscal 2020, the company made significant progress on its transformation. During fiscal 2018, the company continued its efforts to strengthen the legacy Conagra portfolio through investments in innovation, retailer marketing investments and the value over volume playbook. The company also acquired the Angie’s^® BOOMCHICKAPOP^® popcorn business and Sandwich Bros. of Wisconsin frozen sandwich business. During fiscal 2019, we acquired Pinnacle Foods, improving the scale and breadth of our portfolio. And during fiscal 2020, we rose to the challenge of the COVID-19 pandemic, and delivered for our consumers, customers and shareholders.

As a result of our focus on reshaping the Conagra Brands portfolio over the last several years, and our accomplishments in fiscal 2020, we believe that we enter fiscal 2021 with a solid foundation from which to deliver for investors.

Fiscal 2020 Pay Outcomes

As more fully described in this Compensation Discussion and Analysis, the Committee considered the positive business outcomes described above in determining final payouts under incentive programs with performance periods concluding in fiscal 2020. Our Chief Executive Officer and other senior executives named in this Proxy Statement received above target payouts under both the fiscal year 2020 annual incentive plan and fiscal year 2018 to fiscal year 2020 cycle of the long-term performance share plan.

The Committee believes that its fiscal 2020 compensation decisions appropriately reflect its pay-for-performance philosophy. This philosophy is focused on compensating executives based on actual company performance and aligning management’s interests with those of our shareholders.

Below is a more detailed analysis of the fiscal 2020 compensation program for our named executive officers, as well as actual fiscal 2020 payouts under the programs.

Our Fiscal 2020 Executive Compensation Program

For fiscal 2020, the Committee created an executive compensation program with multiple elements:

The use of a mix of compensation types (salary, benefits, cash-based incentives and equity-based incentives) and a mix of performance periods (single year and multi-year) was intended to promote behavior consistent with our long-term strategic plan and minimize the likelihood of executives having significant motivation to pursue risky or unsustainable results.

In overseeing this compensation program design, the Committee sought to encourage and reward behavior that would promote attainment of our annual and long-term goals and lead to sustainable growth in shareholder value. In particular, the Committee focused on:

With respect to each named executive officer, the Committee also considered the following:

The unique roles, contributions and tenure of our named executive officers had a meaningful impact on their total fiscal 2020 compensation opportunity. A consistent theme across our named executive officers, however, is that by design, targeted incentive compensation for fiscal 2020 was a significant percentage of the total compensation opportunity. The Committee’s general policy is to provide the greatest percentage of the incentive opportunity in the form of long-term compensation payable in shares of our common stock. The Committee believes that the emphasis on stock-based compensation is the best method of aligning management interests with those of our shareholders.

The charts below show the total target compensation opportunity (calculated using base salary rate, targeted fiscal 2020 Annual Incentive Plan award, and targeted long-term incentive value) for Mr. Connolly and for our other named executive officers as a group.

More detail on each fiscal 2020 compensation element follows.

Base Salaries

We pay salaries to our named executive officers to provide them with a base level of fixed income for services rendered. On average, 22% of the total fiscal 2020 compensation opportunity for each named executive officer, other than the Chief Executive Officer, was provided in the form of base salary. For Mr. Connolly, our Chief Executive Officer, 11% of his total compensation opportunity was provided in the form of base salary. For more information on Mr. Connolly’s base salary, see “Agreements with Named Executive Officers — Agreement with Mr. Connolly” below.

A summary of the salaries of our named executive officers is set forth below.

In fiscal 2020, the Committee approved a base salary increase for Mr. Marberger, from $689,000 to $715,200, in order to align his salary more closely to the market median for his role. The base salary rates for the other named executive officers were unchanged from fiscal 2019.

Please see the information included above for discussion of the other factors the Committee considered when determining the individual salaries of each of the named executive officers.

Incentive Programs – Overview

We use incentive programs to closely align management compensation with company performance. Our incentive programs reward the achievement of our annual operating plan and our long-term strategic plan. For fiscal 2020, opportunities under these programs combined to represent approximately 89% of Mr. Connolly’s compensation opportunity. For each named executive officer other than the Chief Executive Officer, targeted incentive compensation for fiscal 2020 was approximately 78% of the total compensation opportunity.

We provide details of our incentive programs below. Financial targets disclosed in these discussions are done so in the limited context of our incentive plans; they are not statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Annual Incentive Plan

The fiscal 2020 Annual Incentive Plan, or FY20 AIP, provided a cash incentive opportunity to approximately 4,525 employees, including our named executive officers. We have regularly provided an annual incentive opportunity to a broad group of employees, to reinforce a sense of ownership across our company and drive and sustain a pay-for-performance culture.

At the start of fiscal 2020, the Committee approved fiscal 2020 operating income, fiscal 2020 net sales, and fiscal 2020 free cash flow as the funding metrics for the FY20 AIP (subject to adjustment, as appropriate, for items impacting comparability of results). The Committee selected these three goals, with operating income weighted 50% in the plan, net sales weighted 30%, and free cash flow weighted 20%, to reward employees for achieving key elements of the fiscal 2020 annual operating plan: sales growth, profit growth and debt reduction. In fiscal 2019, the company included earnings before interest and taxes (or EBIT) and net sales as the AIP metrics. The Committee moved to operating income and free cash flow in fiscal 2020, in lieu of EBIT, to better acknowledge the company’s dual focus on increasing the operating earnings of the business and maximizing the business’s ability to generate cash to repay debt. Under the fiscal 2020 AIP, the total payout opportunity for participants continued to be capped at 200% of targeted awards.

The operating income, net sales, and free cash flow goals for the FY20 AIP were as follows:

Individual Payout Opportunities

In addition to setting the financial goals for the FY20 AIP, the Committee set corresponding target AIP opportunities for each named executive officer, measured as a percentage of his or her base salary for fiscal 2020. The following table shows the ranges of authorized payments (expressed as a percentage of base salary) for the named executive officers upon achievement of the operating income, net sales, and free cash flow goals approved for the FY20 AIP. No portion of the incentive was guaranteed.

The targets for the named executive officers, as percentages of base salary, remained unchanged from fiscal 2019. Please see the information above for discussion of the factors the Committee considered when determining the individual target AIP awards of each of the named executive officers.

Fiscal 2020 Results

As discussed above, our results were above target in fiscal 2020. For FY20 AIP purposes, the Committee determined that Conagra achieved fiscal 2020 operating income of $1,831.9 million, fiscal 2020 adjusted net sales of $11,156.7 million, and fiscal 2020 free cash flow of $1,534.0 million. Formulaically, these results provided for a payout equal to 138.2% of target.

Once the performance metrics review was complete, the Committee considered the manner in which management executed the operating plan during the year to determine if any adjustments were necessary to the overall payout. The FY20 AIP permitted the Committee to increase or decrease the pool funding level by an amount, up to 15% of target, based on how the company achieved its business results. Reflecting on the many operational and strategic accomplishments from the year, Mr. Connolly recommended, and the Committee agreed, not to exercise any discretion to alter the overall pool funding. The Committee did empower management to allocate approximately 3.2 points of the

funded pool toward greater individual recognition of employees who worked most directly on the company’s COVID-19 response, and to fund the pool at 135% of target for the balance of the AIP eligible population.

Determination of Individual Named Executive Officer Awards

The Committee’s final step was to determine each named executive officer’s individual payout under the FY20 AIP. This process involved an assessment of the individual’s target award, the company performance against the performance goals and each executive’s individual performance. The Committee considered the factors set forth above when determining named executive officer payouts under the FY20 AIP, including the application of those factors during fiscal 2020. Mr. Connolly’s input on the individual contribution of these leaders, and his recommendations on program payouts, also assisted the Committee in approving specific AIP payouts. The full Board’s performance evaluation of Mr. Connolly was used in determining his payout. Ultimately, the Committee decided that each named executive officer should be compensated under the FY20 AIP, as detailed in the chart below. The Committee believes that the AIP awards paid to the named executive officers for fiscal 2020 are consistent with the level of accomplishment by the company and each named executive officer during the year.

To incent management to make decisions that have positive long-term impacts, even at the expense of shorter-term results, and to prevent unusual gains and losses from having too great of an impact on plan payouts in any year, the Committee retained discretion in the FY20 AIP to exclude items impacting comparability from company-wide results and adjust actual results for specific items that occurred during the fiscal year. The use of adjustments approved by the Committee and applicable to the fiscal 2020 operating income, net sales, and free cash flow metrics is described below under “Additional Information on Compensation Practices – Use of Adjustments in Incentive Programs.”

Fiscal 2021 Annual Incentive Plan

At the start of fiscal 2021, the Committee approved operating income, net sales and free cash flow (in each case subject to adjustment as appropriate for items impacting comparability of results) as the funding metrics for the fiscal 2021 Annual Incentive Plan. No changes were made to the funding metrics and weightings used for the fiscal 2020 Annual Incentive Plan.

Long-Term Incentive Plan Overview

The Committee firmly believes in aligning the interests of our senior leaders with those of our shareholders. The significant extent to which equity is included in our named executive officers’ compensation opportunity evidences this belief.

For fiscal 2020, the long-term incentive program was intended to:

The fiscal 2020 program for the named executive officers included two elements: an award of performance shares that are settled in shares of common stock, and an award of service-based restricted stock units (RSUs).

The Committee annually establishes a target long-term incentive grant value for each named executive officer using a value-based approach. 75% of this total targeted value was delivered in the form of a performance share grant, and 25% of this total targeted value was delivered in the form of an RSU grant. Targeted values were converted into grant sizes by dividing the dollar value of the targeted opportunity by the average of the closing market price of our common stock on the NYSE for the 10 trading days prior to the grant date, but not including the grant date. The aggregate target opportunities for fiscal 2020 long-term incentive awards for the named executive officers were as follows:

Mr. Serrao’s target long-term incentive award increased from $1,200,000 to $1,600,000 in fiscal 2020. The increase was approved during fiscal 2019 (to take effect for grants beginning in fiscal 2020) to reflect his new role as Co-Chief Operating Officer. Other than Mr. Serrao’s increased target opportunity, no changes were made to the named executive officers’ target long-term incentive opportunities from fiscal 2019. Each element of the long-term incentive plan used in fiscal 2020 is discussed more fully below.

Long-Term Incentive Plan – Restricted Stock Units

RSUs generally represent the right to receive a defined number of shares of our common stock after completing a period of service established at the grant date. RSUs encourage long-term commitment to the company.

In general, all RSUs granted in fiscal 2020 vest in full on the third anniversary of the date of grant, subject to the executive’s continued employment with us. Awards granted in fiscal 2020 are not entitled to dividend equivalents.

The number of RSUs granted to each named executive officer pursuant to the fiscal 2020 long-term incentive program is set forth below.

The Committee considered the factors set forth above with respect to each named executive officer when determining grant sizes by individual. Grants to the named executive officers other than Mr. Connolly were made on July 16, 2019. Mr. Connolly’s RSUs were granted on July 17, 2019. The grant date fair value of the RSUs awarded to our named executive officers is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2020.

Long-Term Incentive Plan – Performance Shares

Performance shares represent an opportunity to earn a defined number of shares of our common stock if we achieve pre-set performance goals over time. In general, the performance shares vest following completion of the third fiscal year following grant and provide the named executive officer participating in the cycle the opportunity to earn a payout, in shares of common stock, from 0% to 200% of their respective targeted award. Dividend equivalents are paid on the portion of performance shares actually earned at our regular dividend rate in additional shares of common stock.

The three-year nature of each performance share grant means that in any year, a named executive officer can have up to three outstanding performance share plan, or PSP, cycles outstanding. In fiscal 2020, for example, each named executive officer participated in our fiscal 2018 to 2020 PSP, our fiscal 2019 to 2021 PSP, and our fiscal 2020 to 2022 PSP.

The targeted number of performance shares granted to our named executive officers in fiscal 2020, together with the performance share grants made under the comparable program in fiscal 2019 and fiscal 2018, are set forth below.

Goal Setting in the PSP

The Committee’s approach to selecting and setting performance goals for each cycle of the PSP is thorough. Prior to the start of a performance period, the Committee discusses proposed plan design, taking into consideration the company’s strategic plan. Then, shortly after the start of each performance period, the Committee approves the actual metric or metrics for the program and the specific financial hurdles that must be met for awards to be earned.

The Committee’s preferred approach is for the performance goals in each grant to cover the full three-years of the performance period and remain un-revised throughout the cycle. However, the Committee retains the discretion to modify goals or use longer or shorter performance periods if doing so is appropriate in light of relevant company dynamics or macroeconomic conditions. For example, in recent years, the Committee has amended plan targets under the PSP in light of the Pinnacle Foods acquisition and tax reform legislation known as the Tax Cuts and Jobs Act, or TCJA. In addition, due to the significant uncertainty created by the ongoing COVID-19 pandemic, the Committee made the decision in connection with the implementation of the fiscal 2021 through 2023 cycle of the performance share plan (approved in July 2020), to adopt a staged approach to goal setting. As will be more fully described in the company’s fiscal 2021 proxy statement, program payouts for the fiscal 2021 to 2023 PSP will ultimately be based on the company’s performance versus a one-year EPS growth target (fiscal 2021) and a yet-to-be approved two-year target (covering fiscal 2022 to 2023).

The Committee believes that appropriate goal setting is among the most important aspects of establishing the executive compensation program. As such, the Committee makes goal-setting decisions that it believes best maintain the alignment of the company’s long-term incentive program with the company’s external financial commitments to investors.

The balance of this subsection of the Compensation Discussion and Analysis describes, in more detail, each cycle of our PSP outstanding during fiscal 2020.

FY20 to FY22 Performance Share Awards

Performance shares for the fiscal 2020 to fiscal 2022 cycle of the long-term incentive plan were granted at the start of fiscal 2020. The performance measure adopted for the cycle is a three-year EPS CAGR. The performance period will conclude at the end of fiscal 2022 and the awards will pay out, to the extent earned, in shares of common stock in summer 2022. The specific plan targets are as follows:

The grant date fair value of all performance shares granted to the named executive officers under the fiscal 2020 to 2022 cycle, based on the probable outcome of the performance conditions for such period, is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2020.

FY19 to FY21 Performance Share Awards

Performance shares for the fiscal 2019 to fiscal 2021 cycle of the long-term incentive plan were granted at the start of fiscal 2019. The plan will conclude at the end of fiscal 2021 and pay out, to the extent earned, in shares of common stock in summer 2021. As discussed in our 2019 proxy statement, the original EPS CAGR goals for this cycle were revised following the Pinnacle acquisition. The revised plan targets are as follows:

The grant date fair value of all performance shares granted under the fiscal 2019 to 2021 cycle, based on the probable outcome of the performance conditions for such period, is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2020.

FY18 to FY20 Performance Share Awards

Performance shares for the fiscal 2018 to fiscal 2020 cycle of the long-term incentive plan were granted at the start of fiscal 2018 and the performance period concluded at the end of fiscal 2020. The performance measure adopted for the cycle was a three-year EPS CAGR. As discussed in our 2019 proxy statement, the original EPS CAGR goals for this cycle were revised to reflect the impact of the Pinnacle acquisition and the implementation of the TCJA. The revised plan targets are as follows: