UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )

 

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Mondelēz International, Inc.

 

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Alongside our financial commitments, we remain fully focused on living our Purpose and delivering on our environmental, social and governance (“ESG”) agenda, particularly at a time when there are opportunities for companies to exert an even more positive influence on society and the planet through their actions and scale.

Led by our local teams, we stepped up in 2020 to support the communities in which we operate with approximately $28 million in product and cash donations that went towards addressing the most acute needs and other COVID-19-related impacts.

During the pandemic, I am proud to say we not only maintained our strong progress against ambitious sustainability goals, but also accelerated our agenda in key areas such as packaging, where, in addition to our previously communicated goal to achieve 100% recyclability by 2025, we are now committing to reducing virgin plastic use in our rigid plastic packaging by at least 25% over the same timeframe.

Similarly, we built on our long-standing commitment to promoting diversity and inclusion in our business by launching a new multi-year program of action that includes the appointment of a Chief Global Diversity & Inclusion Officer, a material increase in Black management representation in the United States, and a commitment to spend $1 billion annually with women- and minority-owned businesses by 2024.

Finally, at Mondelēz International, we’ve always been focused on driving and measuring the impact of our actions, as well as actively seeking partnerships and collaborations to help scale our efforts. To help us increase our impact, we’re developing Sustainable Futures, an investment fund that will help us partner with others on climate and social projects around the world.

None of this would be possible without a highly engaged and motivated workforce, committed to driving our collective financial and organizational goals. Over the past three years, the changes we have made have increased local accountability, created a sharper winning spirit and a stronger mindset of agility across our business. In a global survey of our colleagues last year, we improved scores across all of our key measures, including employee pride and happiness, as well as colleagues’ willingness to recommend Mondelēz International as a great place to work.

With these strong foundations and the progress we’re making against our plans, the prospects for sustainable growth and value-creation for shareholders, customers, consumers and colleagues are sizable and clear. I believe that our unique portfolio of our brands, coupled with our broad geographic footprint and dedicated and motivated teams, create a powerful platform for future expansion.

We responded to the challenges presented by COVID-19 with determination and agility, taking decisive actions to prepare our business to emerge stronger, and this positions us well to continue delivering on our targets in 2021 and beyond. We look forward to engaging with you in the months ahead as we share more details on the progress we have made with our financial goals and ESG agenda.

On behalf of the Mondelēz International team, I would like to thank you for your investment.

Best wishes,

 

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Board joins me in thanking Debra for her many contributions and service to Mondelēz International during her time on the Board. Overall, our director nominees include three women, and represent ages ranging from 56 to 78 years, several national origins, and a myriad of professional and life experiences. As Mondelēz International continues to execute its strategy the Board is well-equipped to create long-term value for our shareholders.

On behalf of the Mondelēz International Board of Directors, I would like to thank you for your investment in our company and your support for our continued efforts to create value for our shareholders. Please see this proxy statement and visit our website at www.mondelezinternational.com to learn more about the Board, as well as our corporate governance approach, our policies and our active role in overseeing ESG matters.

When you buy shares in Mondelēz International, you are placing your trust in the Board of Directors. We value your investment and we are committed to meeting your expectations. Please consider the proxy statement and annual report in full; we recommend that you vote in accordance with our recommendations in order to secure the long-term growth and success of the company.

Sincerely,

 

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Technical Assistance: Online access to the webcast will open approximately 30 minutes prior to the start of the Annual Meeting to allow time for you to log in and test your device’s system. We encourage you to access the meeting prior to the start time. If you encounter any difficulties accessing the meeting or during the meeting time, please call 1-844-986-0822 (U.S.) or 1-303-562-9302 (International).

WHO MAY VOTE:

Shareholders of record of Class A Common Stock at the close of business on March 12, 2021.

DATE OF DISTRIBUTION:

On or about April 7, 2021, we distributed the Notice of Internet Availability of Proxy Materials and made available the Proxy Statement, Proxy Card and Annual Report on Form 10-K for the year ended December 31, 2020 online at http://materials.proxyvote.com/609207.

On or about April 7, 2021, we expect to mail the Proxy Statement, Proxy Card and Annual Report on Form 10-K for the year ended December 31, 2020, to shareholders who previously elected to receive a paper copy of the proxy materials.

 

On behalf of our Board of Directors, management and employees, thank you for your continued support.

 

Ellen M. Smith
Senior Vice President & Chief Counsel, Chief Compliance Officer and Corporate Secretary
April 7, 2021

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 19, 2021

Mondelēz International, Inc.’s Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2020, are available at http://materials.proxyvote.com/609207.

 

FORWARD-LOOKING STATEMENTS

This proxy statement contains a number of forward-looking statements. Words, and variations of words, such as “will,” “expect,” “may,” “believe,” “plan,” “intend,” “deliver,” “target,” “commitment” and similar expressions are intended to identify our forward-looking statements. Please see our risk factors, as they may be amended from time to time, set forth in our filings with the U.S. Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K. Mondelēz International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this proxy statement, except as required by applicable law or regulation.

 

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Mondelēz International empowers people to snack right around the world. With global net revenues of $26.6 billion in 2020, we are leading the future of snacking with iconic global and local brands such as Oreo, belVita and LU biscuits; Cadbury Dairy Milk, Milka and Toblerone chocolate; Sour Patch Kids candy and Trident gum. Our mission is to provide the right snack, for the right moment, made the right way.

 

ELECTION OF DIRECTORS – NOMINEES

The Governance, Membership and Public Affairs Committee (the “Governance Committee”) recommended and the Board of Directors (the “Board”) nominated each of the 11 incumbent directors listed here as well as one new director nominee: Jane Hamilton Nielsen, Chief Operating Officer and Chief Financial Officer of Ralph Lauren Corporation. Ms. Nielsen will bring to the Board a wealth of expertise pertaining to global finance, business development and operational strategy. Debra A. Crew, a current member of our Board, is not standing for re-election at the Annual Meeting. The terms of all director nominees elected at the Annual Meeting will end at the 2022 Annual Meeting of Shareholders or when a director’s successor has been duly elected and qualified. Additional information about the director nominees is provided under “Director Nominees for Election at the Annual Meeting” on page 19

 

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Our Director Nominees at a Glance

Debra A. Crew, a current member of our Board, is not standing for re-election at the Annual Meeting.

We Value the Diversity of our Director Nominees

 

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OUR STRONG CORPORATE GOVERNANCE FRAMEWORK PROMOTES THE LONG-TERM INTERESTS OF SHAREHOLDERS AND ACCOUNTABILITY AND TRUST IN THE COMPANY

Our governance practices and policies enhance the effectiveness and accountability of our Board and promote the Company’s long-term success. Key aspects of our corporate governance framework are highlighted below. You can find additional detail under “Corporate Governance” beginning on page 26, “Compensation Governance” on page 73 and “2022 Annual Meeting of Shareholders” on page 106.

 

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2020 brought significant challenges to the Company, including the COVID-19 pandemic and social unrest, which affected our employees, customers, communities and shareholders. In the face of these challenges, we acted swiftly to prioritize all of our stakeholders as we continued to execute against our strategic priorities. In a difficult year, we drove record market share gains thanks to the strength of our brands and strong execution.

Following the regular March 2020 meeting, the Board began meeting more frequently to provide oversight of the Company’s approach and response to COVID-19 and the impact to the safety and well-being of our employees. By October 2020, remote working and social distancing protocols had normalized, and the Board returned to its regular meeting schedule while still receiving frequent updates from management.

Over the past year, we have taken a number of actions to support the health and safety of our employees, customers and communities, and to position ourselves to emerge stronger from the pandemic. Some of these actions include:

 

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OVERVIEW OF PAY ELEMENTS AND THEIR ALIGNMENT TO OUR STRATEGY

This table identifies and describes the primary elements of the 2020 executive compensation program for our named executive officers (“NEOs”), including each incentive plan metric’s alignment with our strategy. A more detailed discussion, including definitions of the financial measures used in our AIP and performance share unit (“PSU”) grants, can be found in the CD&A and in Annex A.

 

 

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TOTAL TARGET COMPENSATION MIX

The Human Resources and Compensation Committee (the “Compensation Committee”) places significant focus on performance-based compensation, which is provided in the form of an annual performance incentive under the AIP, and stock options and PSUs under the LTIP. Our focus on performance-based compensation rewards strong Company financial and operating performance and aligns the interests of our NEOs with those of our shareholders.

Below is the 2020 total target compensation mix for our CEO and, on average, our other NEOs serving as executive officers on December 31, 2020. This compensation mix includes base pay, target annual incentive and long-term incentive grants. The majority of compensation for both the CEO and the other NEOs is at risk/variable pay.

 

 

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This year, the Board is renominating 11 incumbent directors. Debra A. Crew, a current member of our Board, is not standing for re-election at the Annual Meeting. The Board is nominating one new director, Jane Hamilton Nielsen, the Chief Operating Officer and Chief Financial Officer of Ralph Lauren Corporation. Ms. Nielsen will bring to the Board a wealth of expertise pertaining to global finance, business development and operational strategy.

 

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BOARD COMPOSITION: DIRECTOR QUALIFICATIONS, KNOWLEDGE AND EXPERIENCE

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

 

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INDIVIDUAL DIRECTOR SELF-ASSESSMENTS AND CONSIDERATIONS FOR RENOMINATION OF INCUMBENT DIRECTORS

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

BOARD REFRESHMENT THROUGH DIRECTOR TENURE, AGE LIMITS AND ANNUAL SELF-ASSESSMENTS

The Board believes that its composition should provide continuity as well as new experiences and fresh perspectives relevant to the Board’s work. The Board does not believe that directors should expect to be automatically renominated. Therefore, the annual Board and director self-assessment processes are important determinants in a director’s renomination and tenure. Our Guidelines provide that non-employee directors will have a tenure limit of 15 years. Non-employee directors will not be nominated for re-election to the Board after they turn 75, except in the case of a non-employee director who first joins the Board between age 70 to 75. In such a case, the director will have a tenure limit of five years.

In addition, as noted above, the Board’s annual self-assessment process includes director self-assessments and discussions between the Lead Director and each director, in coordination with the Governance Committee, regarding the director’s strengths and opportunities to enhance contributions.

The current Board composition reflects the Board’s commitment to ongoing refreshment. Four of the non-employee directors served as directors before the spin-off of KFG to shareholders on October 1, 2012 and seven joined the Board on or after the spin-off.

THE BOARD SEEKS AND VALUES DIVERSITY

Mondelēz International manufactures and markets food and beverage products for consumers in over 150 countries around the world. The Board embraces and encourages the Company’s culture of diversity and inclusion. The Board’s directors bring diversity of gender, race, national origin, thought and global experience that promote informed decision making.

Although the Board does not establish specific diversity goals, the Board’s overall diversity is an important consideration in the director recruitment and nomination process. When assembling the pool of candidates from which directors are selected, the Governance Committee considers criteria including gender, race and national origin, as diversity in those characteristics promotes a diversity of views, knowledge and experience that contributes to a more informed and effective decision-making process.

The ultimate selection of a director from the candidate pool depends on a variety of factors, which are discussed under “How We Build an Experienced and Qualified Board” on page 15 and “Board Composition: Director Qualifications, Knowledge and Experience” on page 17. As part of its annual assessment of the Board’s composition, the Governance Committee assesses the effectiveness of the Board’s efforts to promote diversity. In addition, the Board joined other international organizations as a signatory of the Board Diversity Action Alliance (the “Alliance”), which seeks to increase the number of racially and ethnically diverse leaders on the boards of corporations, beginning with Black directors. The Alliance also is accelerating change through enhanced disclosure of Board directors’ race and ethnicity and the annual reporting of diversity, equity and inclusion progress.

Our director nominees include three women, range in age between 56 and 78 with an average age of approximately 66, represent several national origins, and collectively bring a range of professional and life experiences to the Board’s work. One director nominee self-identifies as Black and 11 self-identify as white.

The Governance Committee will consider recommendations for director candidates submitted by shareholders. Shareholders should submit the proposed candidate’s name along with the same information required for a shareholder to nominate a candidate for election to the Board at an annual meeting. Recommendations should be sent to our Corporate Secretary in the same manner as set forth in the advance notice provisions of our By-Laws.

The Governance Committee evaluates director candidates recommended by shareholders using the same criteria as it uses to evaluate candidates from other sources. Following the evaluation process, the Governance Committee makes a recommendation to the Board regarding the candidate’s appointment or nomination for election to the Board, and the Board considers whether to appoint or nominate the candidate. Shareholders who nominate prospective candidates will be advised of the Board’s decision.

 

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Members of the Board are elected annually by a majority of votes cast if the election is uncontested. The terms of all directors elected at the Annual Meeting will end at the 2022 Annual Meeting of Shareholders or when a director’s successor has been duly elected and qualified.

The Governance Committee recommended, and the Board nominated for election at the Annual Meeting, the 12 director nominees listed below under “Director Nominees for Election at the Annual Meeting.” Ms. Nielsen was recommended for consideration by Heidrick & Struggles, an international executive search firm. Shareholders most recently elected 11 incumbent directors and one new director to one-year terms at the 2020 Annual Meeting of Shareholders. Ms. Crew, who was elected by the shareholders at the 2020 Annual Meeting of Shareholders, is not standing for re-election at the Annual Meeting.

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

The following information regarding each director nominee is as of March 12, 2021 except as otherwise noted.

 

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We provide new directors with a substantive onboarding program. They meet with numerous Company executives to learn about different aspects of the Company operations, and they are invited to attend various Board committee meetings prior to joining any committees. Once new directors are appointed to committees, they meet with the Company officers who support those committees.

During their service, directors have opportunities to meet and talk with our employees during Board visits to Company facilities and during Board and committee meetings. Prior to the COVID-19 pandemic, individual directors experienced our Direct Store Delivery model by riding with one of our drivers during an assigned route, met with employees involved in our e-commerce initiatives and observed a Line of the Future during production at our factories.

In addition, the Company supports director participation in continuing education programs and reimburses directors for reasonable costs associated with attendance.

 

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The Board has a duty to act as it believes to be in the best interests of the Company and its shareholders, including determining the leadership structure that will best serve those interests. The By-Laws provide the Board flexibility in determining its leadership structure. Within this framework, the Board determines the most appropriate leadership structure at a given time in light of the Company’s needs and circumstances, as described below. The Board may determine that the CEO should also serve as Chairman, but if it does so, the independent directors appoint an independent Lead Director with substantive responsibilities.

The Board recognizes the importance of the Company’s leadership structure to our shareholders and regularly receives and considers input on the topic obtained through engagement with our shareholders.

In considering which leadership structure will allow it to carry out its responsibilities most effectively and best represent shareholders’ interests, the Board takes into account various factors. Among them are our specific business needs, our operating and financial performance, industry conditions, economic and regulatory environments, the results of Board and committee annual self-assessments, the advantages and disadvantages of alternative leadership structures based on circumstances at that time, shareholder input, and our corporate governance practices.

 

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THE BOARD’S CURRENT LEADERSHIP STRUCTURE PROVIDES INDEPENDENT LEADERSHIP AND MANAGEMENT OVERSIGHT

Our Board is led by Mr. Van de Put, the Chairman and CEO, together with Mr. van Boxmeer, our independent Lead Director. In addition, independent directors chair the Board’s four standing committees.

Messrs. Van de Put and van Boxmeer are committed to working closely together. The Board believes that they, together with our independent committee chairs, provide appropriate leadership and oversight of the Company and facilitate effective functioning of both the Board and management.

MR. VAN DE PUT		MR. VAN BOXMEER
Chairman since 2018		Lead Director since 2020
The Board carefully considered its leadership structure, including whether the role of Chairman should be a non-executive position or combined with that of the CEO. Following due consideration, the Board concluded that combining these roles best positions Mr. Van de Put to: • promote shareholders’ interests and contribute to the Board’s efficiency and effectiveness because of his knowledge of the Company, the food industry and the competitive environment in which we operate; • promote the alignment of our strategic and business plans; • inform the Board about our global operations and critical business matters including oversight of the Company’s risk management process; and • discuss with the Board key risks and management’s responses to them.		The independent directors selected Mr. van Boxmeer because he: • is well-positioned to lead a high-performing Board by keeping it focused, coordinating across committees and facilitating effective information flow to the directors given his experience serving on multiple Board committees, as well as experience as Chairman of Vodafone and prior experience as former Executive Chairman and Chief Executive Officer of Heineken; • builds a productive relationship between the Board and Mr. Van de Put by providing him with candid, constructive feedback from the Board; • serves as a contact person for our shareholders; and • is deeply engaged in the Company’s commitment to create a positive impact on the world while driving business performance.

 

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INDEPENDENT LEAD DIRECTOR ROLE AND RESPONSIBILITIES

The Board created the Lead Director position to provide strong leadership of the Board’s affairs on behalf of shareholders, increase the Board’s effectiveness, promote open communication among the independent directors, and serve as the principal liaison between the
Chairman and the other independent directors. The independent directors annually select the Lead Director for a one-year term.

The Lead Director has significant authority and responsibilities that protect shareholders’ interests by promoting strong management oversight and accountability. Under the Guidelines, the Lead Director, in consultation with the other independent directors, has the following substantive duties and responsibilities:

ALL DIRECTORS ARE INDEPENDENT EXCEPT FOR OUR CHAIRMAN AND CEO

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

Based on that criterion, the Board determined that the following directors and director nominee are independent: Lewis W.K. Booth, Charles E. Bunch, Debra A. Crew, Lois D. Juliber, Peter W. May, Jorge S. Mesquita, Jane Hamilton Nielsen, Fredric G. Reynolds, Christiana S. Shi, Patrick T. Siewert, Michael A. Todman and Jean-François M. L. van Boxmeer. The Board also determined that former directors Mark D. Ketchum and Joseph Neubauer were independent during the time that they served as directors in 2020.

Mr. Van de Put is not independent because he is a Mondelēz International employee.

 

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Oversight of our business strategy is one of our Board’s key responsibilities. The Board believes that overseeing and monitoring strategy is a continuous process. The Board has at least one meeting each year primarily dedicated to strategy where it meets with management to discuss, understand and challenge our strategic plan’s short- and long-term objectives. At Board meetings held throughout the year, the Board and management track progress against the strategic plan’s goals, consider impacts due to changing circumstances in the industry and the economic environment, and monitor strategic and operational risks. Throughout the strategic review that led to the development of our growth strategy, the Board and management team worked in close coordination to craft a consumer-centric strategy that leverages our Company’s unique strengths in the snacking market to accelerate growth.

Our Board, with recommendations from the Finance Committee, oversees the alignment of our capital allocation priorities with our long-term strategy. The Board oversees our capital allocation process and annually reviews our capital deployment budget, with the goal of balancing investment in growth and returning cash to shareholders. We continue to demonstrate this balance through our historical investments in capital expenditures and research and development, paired with dividend growth and share repurchases.

Our business faces various risks, including strategic, financial, operational and compliance risks. Identifying, managing and mitigating our exposure to these risks, along with effective oversight of such matters, are activities critical to our operational decision-making and annual planning processes.

Management is responsible for the day-to-day assessment, management and mitigation of risk. The Board has ultimate responsibility for risk oversight, but it has delegated primary responsibility for overseeing risk assessment and management to the Audit Committee. Pursuant to its charter, the Audit Committee annually reviews and discusses our enterprise risk management (“ERM”) process, and global and business unit assessment and risk mitigation results.

Our ERM process is ongoing and implemented at all levels of our operations and across business units to identify, assess, monitor, manage and mitigate risk. Our ERM process facilitates open communication between management and the Board, so that the Board and committees understand key risks to our business and performance, and the functioning of our risk management process, including who participates in the process and the information gathered in the assessment.

Annually, the Audit Committee reviews and approves management’s recommendation for allocating to the full Board or another committee, or retaining for itself, responsibility for reviewing and assessing key risk exposures and management’s response to those exposures.

Management provides reports to the Board or the appropriate committee on key risks and the actions management has taken to monitor, control and mitigate these risks. Management also attends Board and committee meetings to discuss these reports and provide any updates. The committees report key risk discussions to the Board following their meetings. Board members may also further discuss the risk management process directly with members of management.

 

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During 2020, the Board and committees reviewed and assessed risks related to our business and operations as shown below. The Board annually reviews and sometimes reallocates responsibilities among committees. Accordingly, the allocation of responsibilities and/or descriptions of risk categories shown in this table may change during 2021.

 

 

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HUMAN CAPITAL MANAGEMENT

Our Board recognizes that our employees are our greatest asset and is actively engaged in human capital management throughout the organization. The Compensation Committee is responsible for oversight of organizational engagement and effectiveness and regularly reviews human resources policies and practices, talent sourcing strategies, employee development programs, succession plans, and diversity policies, objectives and programs.

2020 brought significant challenges as the Company navigated the impacts of COVID-19 and social unrest that affected our employees. Following the regular March 2020 meeting, the Board began meeting more frequently to provide oversight of the Company’s approach and response to COVID-19 and the impact to the safety and well-being of employees. By October 2020, remote working and social distancing protocols had normalized, and the Board returned to its regular meeting schedule while still receiving frequent updates from management.

Talent Development

At the executive level, the Compensation Committee, together with the CEO, regularly reviews senior management talent, including readiness to take on additional leadership roles and developmental opportunities needed to prepare leaders for greater responsibilities. The Compensation Committee also has a focus on developing our mid-level talent into our future leaders, and there are a number of initiatives underway to provide these potential future leaders with the experience and exposure needed to succeed at the highest levels of our business. Recent initiatives include:

 

Diversity and Inclusion

To build on the Company’s significant progress on our diversity and inclusion initiatives over the last several years and to continue to further progress in diversity, equity and inclusion, the Board adopted a new governance model that includes full Board reviews two times per year of the Company’s approach and response to diversity and inclusion.

The Board was involved and aligned with management on each of the diversity and inclusion commitments and initiatives.

 

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Workplace Safety

We are also continuously improving the safety of our work environments through investments in our people and our facilities, and we are committed to achieving world class safety standards in the places where our people work and for the foods we produce. Our objective is to build a safety culture that promotes our goal of zero incidents and zero defects.

 

CORPORATE CULTURE

Our Board believes that a positive corporate culture is vitally important to our success and oversees implementation of practices and policies to maintain a positive and engaging work environment for our team members. Our global compliance and integrity program guides our employees to act with integrity and make ethical decisions while conducting business around the world. In addition, Board members are provided direct access to our employees and have engaged with them in person in the pre-COVID-19 era through activities such as walking the floors of our offices, and periodic plant and in-market visits. These visits provide directors with an opportunity to assess our culture and interact with employees outside of the senior management team, and we anticipate that they will resume once it is safe to do so.

Each year we review our global employee engagement survey results with the Board. The survey provides rich data for our leaders and a more robust benchmark to other companies. We had the highest-ever level of employee participation in 2020, and the results of the survey showed marked improvement in confidence in our leadership as we continue to progress our strategy, direction and local-first culture. During the pandemic, our workforce expressed they felt supported and proud to work for the Company. Based on the improvements, we are now among the top tier of companies in our external benchmark data, which we are especially proud of given the challenges presented by COVID-19.

Directors are expected to attend all Board meetings, the Annual Meeting of Shareholders and all meetings of the committees on which they serve. We understand, however, that occasionally a director may be unable to attend a meeting for good reason due to conflicts or unforeseen circumstances.

CODE OF BUSINESS CONDUCT AND ETHICS FOR NON-EMPLOYEE DIRECTORS

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

EMPLOYEE CODE OF CONDUCT

We have adopted the Mondelēz International Code of Conduct for all our employees that reflects our values and contains important rules for conducting our business. The Code of Conduct is part of our global compliance and integrity program. The program provides training throughout the Company and encourages reporting of potential wrongdoing by offering anonymous reporting options and a non-retaliation policy.

 

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

You can access the Code of Conduct at www.mondelezinternational.com/about-us/our-way-of-doing-business/Code-of-Conduct.

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

RELATED PERSON TRANSACTIONS POLICY AND PROCEDURES

The Board has adopted a written policy regarding related person transactions. In general, “related persons” are the following persons and their immediate family members: directors, executive officers and shareholders beneficially owning more than 5% of our outstanding Common Stock. A related person transaction is one in which Mondelēz International or one of its subsidiaries is a participant, the amount involved exceeds $120,000, and any related person had, has or will have a direct or indirect material interest.

The Governance Committee reviews transactions that might qualify as related person transactions. If the Governance Committee determines that a transaction is a related person transaction, then the Governance Committee reviews and approves, disapproves or ratifies the transaction. Only those related person transactions that are fair and reasonable to Mondelēz International and in our shareholders’ best interests are ratified or approved. When it is not practicable or desirable to delay review of a transaction until a committee meeting, the chair of the Governance Committee may act on behalf of the committee and report to the Governance Committee on any transaction reviewed.

When reviewing and acting on a related person transaction under this policy, the Governance Committee considers, among other things:

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

 

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REVIEW OF RELATED PERSON TRANSACTIONS SINCE JANUARY 1, 2020

On January 29, 2021, BlackRock, Inc. (“BlackRock”), an investment management corporation, filed a Schedule 13G/A with the U.S. Securities and Exchange Commission (the “SEC”) reporting that it was a greater than 5% shareholder of the Company as of December 31, 2020. During 2020, BlackRock acted as an investment manager with respect to certain investment options under our U.S., Canadian and Puerto Rican retirement savings plans and Canadian, Irish and U.K. pension plans. BlackRock was selected as an investment manager by each plan’s designated authority for plan investments. BlackRock’s selection was based on the determination of each plan’s designated authority that the selection met applicable standards and that the fees were reasonable and appropriate. BlackRock’s fees were approximately $2.8 million during 2020. Each of the plans for which Blackrock performed services paid the fees for those services from its assets. The plans expect to pay similar fees to BlackRock during 2021 for similar services. Fees, based on plan asset value, are paid quarterly on a lag basis.

Our Insider Trading Policy prohibits our employees, including our executive officers, and our directors (together, “Mondelēz International personnel”) from engaging in transactions involving Mondelēz International, Inc.-based or Mondelēz International, Inc. subsidiary-based derivative securities, short-selling or hedging transactions that create an actual or potential bet against Mondelēz International, Inc. or one of its subsidiaries. Derivative securities include options, warrants, convertible securities, stock appreciation rights or similar rights whose value is derived from the value of an equity security, such as Mondelēz International, Inc. stock. This prohibition includes, but is not limited to, trading in Mondelēz International, Inc.-based or Mondelēz International, Inc. subsidiary-based option contracts (for example, buying and/or writing puts and calls or transacting in straddles). This prohibition also applies to family members who reside with Mondelēz International personnel, others who live in their households (except tenants or staff), any family members who do not live in their households but whose transactions in securities they direct or are subject to their influence or control, any corporations or other business entities controlled or managed by Mondelēz International personnel and any trusts of which Mondelēz International personnel are the trustee or over which they otherwise have investment control.

As part of our effort to better understand our shareholders’ perspectives, we regularly engage with our shareholders, seeking their input and views on various matters. Since our 2020 Annual Meeting of Shareholders, non-employee directors and members of senior management have conducted comprehensive shareholder engagement by reaching out to shareholders representing 47% of our outstanding shares. We engaged with 25 different shareholders, representing approximately 37% of our outstanding shares, and the Lead Director and three other directors led conversations with shareholders representing 20% of our outstanding shares. In addition, we engaged with shareholders at roundtables and corporate governance forums. During the engagements, we discussed a variety of topics, including the Company’s business strategy, executive compensation and environmental, social and governance (“ESG”) matters. These discussions were very productive, and we appreciate that our shareholders took the time to share their perspectives and questions with us. The Board values our shareholders’ perspectives, and the feedback we received during these conversations was shared with the Board, the Compensation Committee and the Governance Committee, and continues to inform our policies and practices. For more information on our shareholder engagement, see “Shareholder Engagement on Executive Compensation” on page 57.

Interested parties may directly contact the Board, the Lead Director, any of the independent directors or any committee of the Board regarding matters relevant to the Board’s duties and responsibilities. Information about how to do so is available at www.mondelezinternational.com/investors/corporate-governance/contacting-the-board-and-reporting-wrongdoings. The Lead Director is available for consultation with our major shareholders.

The Corporate Secretary forwards communications relating to matters within the Board’s purview to the Lead Director or appropriate independent director(s), and communications relating to matters within a Board committee’s area of responsibility to the chair of the appropriate committee. Communications relating to ordinary business matters, such as suggestions, inquiries and consumer complaints, are forwarded to the appropriate Mondelēz International executive or employee and made available to any independent director who requests them. We do not forward solicitations, junk mail, or frivolous or inappropriate communications.

 

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The Board established the Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”). The Board has determined that all of the Audit Committee members are independent within the meaning of the Nasdaq listing standards and Rule 10A-3 of the Exchange Act. The Board also determined that all Audit Committee members are able to read and understand financial statements in accordance with Nasdaq listing standards and are financially literate in accordance with the New York Stock Exchange listing standards. The Board has determined that Fredric G. Reynolds and Patrick T. Siewert are “audit committee financial experts” within the meaning of SEC regulations and have financial sophistication in accordance with Nasdaq listing standards. No Audit Committee member received any payments in 2020 from us other than compensation for service as a director.

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

Among other duties, the Audit Committee also oversees:

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

 

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PRE-APPROVAL POLICIES

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

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

The Audit Committee pre-approved all 2020 audit and non-audit services provided by the independent registered public accountants.

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS’ FEES

The aggregate fees for professional services provided to us by our independent registered public accountants, PricewaterhouseCoopers LLP, for 2020 and 2019 were:

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

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

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

All Other Fees include fees for seminars and use of accounting research and reporting tools.

All fees above include out-of-pocket expenses.

The Finance Committee’s charter sets out its responsibilities, which include reviewing and making recommendations to the Board on significant financial matters, including:

The Finance Committee also reviews and discusses with management:

 

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The Governance Committee’s charter sets out its responsibilities, which include:

POLITICAL ACTIVITY AND GOVERNANCE

We maintain a robust governance framework for overseeing our political activities. We do so responsibly and transparently, with priority on compliance with federal, state and local laws. The Governance Committee oversees our policies and programs related to corporate citizenship and public policy issues significant to the Company. As our success depends on sound public policies, we regularly work with government officials regarding matters of concern in accordance with applicable laws and regulations.

Mondelēz International has a proud history of involvement in the communities where employees live and work, including participation in the political process to support policies that impact our communities, employees and businesses. We provide comprehensive disclosure of political activity through our website: www.mondelezinternational.com/investors/ corporate-governance/board-oversight-of-corporate-citizenship reflecting our policies and procedures for making political contributions and expenditures. In addition, the website provides information on our lobbying activities and a link to the lobbying disclosure reports we file with the U.S. Congress. A list of trade associations to which we pay dues of more than $50,000 annually, including the portion of dues attributable to lobbying, can also be found on our website. As demonstrated by our robust reporting, we are firmly committed to providing shareholders with transparency about our political activities.

 

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HUMAN RESOURCES AND COMPENSATION COMMITTEE INDEPENDENCE, INTERLOCKS AND INSIDER PARTICIPATION

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

RESPONSIBILITIES

The Compensation Committee’s charter sets out its responsibilities, which include:

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

 

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THE COMPENSATION COMMITTEE’S USE OF AN INDEPENDENT COMPENSATION CONSULTANT

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

Since August 2019, the Compensation Committee has retained Semler Brossy as its independent compensation consultant. Annually, the Compensation Committee reviews Semler Brossy’s engagement. During 2020, Semler Brossy provided the Compensation Committee advice and services, including:

For the year ended December 31, 2020, Semler Brossy provided no services to Mondelēz International other than consulting services to the Compensation Committee regarding executive and non-employee director compensation.

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

EXECUTIVE OFFICERS HAVE A LIMITED ROLE IN THE COMPENSATION COMMITTEE’S DETERMINATION OF EXECUTIVE COMPENSATION AND RECOMMENDATIONS TO THE BOARD REGARDING NON-EMPLOYEE DIRECTOR COMPENSATION

See “How Compensation Decisions are Made” on page 70 for additional detail on roles in the decision making process.

 

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THE COMPENSATION COMMITTEE’S ROLE IN MANAGEMENT SUCCESSION PLANNING AND DEVELOPMENT

Succession planning for senior management positions, which facilitates continuity of leadership over the long-term, is critical to our success and important at all levels within our organization. Our Board’s involvement in leadership development and succession planning is systematic, strategic and continuous. The Compensation Committee oversees the development and retention of senior management talent while also maintaining an appropriate succession plan for our CEO. Additionally, the Board has contingency plans for emergencies such as the death or disability of the CEO.

The Compensation Committee, together with the CEO, regularly reviews senior management talent, including readiness to take on additional leadership roles and developmental opportunities needed to prepare leaders for greater responsibilities. The CEO also provides a regular review to the Compensation Committee of the executive leadership team. While the Compensation Committee has the primary responsibility to develop succession plans for the CEO position, it annually reports to the Board and decisions are made at the Board level. Potential leaders interact with Board members through formal presentations and, prior to the onset of the COVID-19 pandemic, during informal events. More broadly, the Board is updated on human capital matters for the overall workforce, including diversity, recruiting and development programs.

HOW THE COMPENSATION COMMITTEE MANAGES COMPENSATION-RELATED RISK

As it does each year, in 2020 the Compensation Committee evaluated whether our compensation designs, policies and practices operate to discourage our executive officers and other employees from taking unnecessary or excessive risks. As described in the “Compensation Discussion and Analysis,” we design our compensation to incentivize executives and other employees to achieve the Company’s financial and strategic goals as well as individual performance goals that promote long-term shareholder returns. Our compensation design discourages our executives and other employees from taking excessive risks for short-term benefits that may harm the Company and our shareholders in the long term. The compensation program includes several risk-mitigating elements, including:

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

In light of these analyses, the Compensation Committee believes that our compensation programs and processes do not encourage excessive risk taking nor do they create risks that are reasonably likely to have a material adverse effect on the Company.

Semler Brossy also reviewed the Compensation Committee’s risk analysis and agreed with the Compensation Committee’s conclusion.

 

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GOVERNANCE FRAMEWORK AROUND THE USE OF EARNINGS PER SHARE IN OUR INCENTIVE PROGRAMS

The Compensation Committee believes it is appropriate to base executive compensation on performance metrics that align with our external reporting framework and the means by which shareholders and other stakeholders measure our performance. Accordingly, the EPS metric we use in our long-term incentive program, like our external targets, accounts for our capital allocation plans for the year, including expected share repurchases. The Compensation Committee recognizes there are differing views among investors as to whether share repurchases should be factored into EPS targets in executive compensation programs but believes our robust governance and compensation practices mitigate the risk that an executive would act imprudently. Specifically,

In 2020, the Compensation Committee replaced Defined EPS with Defined Operating Income in the AIP to eliminate a duplicative metric and also reduce the impact of EPS in the incentive plans.

 

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Our Company, under the leadership of our Board, is committed to the principle that living our values and doing business the right way can help create a future where people and planet thrive.

Snacking Made Right means taking a stand on the issues that matter; it is at the core of how we drive sustainable business growth at scale with a positive impact on the lives of those across our value chain and the world around us. We have public goals to which we hold ourselves accountable and continue to make progress in our efforts to deliver meaningful change.

We believe that consumers should not have to choose between snacking and eating right, or be concerned about the impact their snacking choices have on the world and their communities. Beginning with our Board, we have a comprehensive governance structure that provides oversight of our ESG efforts at all levels of our organization including our strategic areas of focus: climate change, circular packaging solutions and social impact. This includes management team oversight on critical sustainability programming and strategy development, in addition to regular progress reviews. The Governance Committee is directly responsible for overseeing environmental and social responsibility, including well-being. We take a disciplined approach to our sustainability initiatives and are committed to remaining transparent and proactive about our progress. We track, report on and hold people accountable for achieving our goals, and include sustainability metrics in the annual compensation plan for executives.

 

 

At Mondelēz International, we have aligned our commitments to the business ambition to make snacks the right way. Several of our commitments and the work that we are doing to deliver against these commitments directly support the U.N. Sustainable Development Goals:

 

 

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Every year we report the positive impact that we have on people and planet by tracking progress against our public goals. Our next update will be published later this year as part of our 2020 Snacking Made Right report, which will be available on our website, www.mondelezinternational.com. The report will demonstrate the impact of our activities, progress against our public goals and the alignment of our Snacking Made Right strategies with the U.N. Sustainable Development Goals. We are also tracking adoption of standards such as those published by the Sustainability Accounting Standards Board (“SASB”) and the Task Force on Climate-related Financial Disclosures (“TCFD”) and disclose alignment indexes to SASB and TCFD on our website. Our 2020 report will publish updated areas of alignment between those standards and our current disclosures, and we will reflect shareholder feedback as we continue to align our sustainability reporting with evolving standards. When we release our 2020 Snacking Made Right report, we will also release our consolidated EEO-1 statement, which includes the racial and gender diversity of our U.S. employees.

 

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We do not pay non-employee directors any meeting fees.

We also do not pay a Company employee who serves as a director any additional compensation for serving as a director. Dirk Van de Put is the only director who is also a Company employee.

Our shareholder-approved Amended and Restated 2005 Performance Incentive Plan (the “Equity Plan”) caps the maximum fair market value of Common Stock grants made to any non-employee director in any calendar year at $500,000. All stock grants made in 2020 to non-employee directors were significantly below this amount. See the “2020 Non-Employee Director Compensation” and “2020 Non-Employee Director Equity Awards” tables on page 52 for specific values.

 

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

If the Board appoints a new non-employee director during the year (i.e., other than at the Annual Meeting of Shareholders), we pay that director prorated compensation for the balance of the year. We prorate cash compensation based on the number of days remaining in the calendar year.

We make annual equity grants to our non-employee directors following the Annual Meeting of Shareholders. In order to align directors’ interests with shareholders during the directors’ service, grants are in the form of vested deferred stock units. We settle these deferred stock units by distributing actual shares six months after the director ends his or her service as a director. When we pay a dividend on our Common Stock, we accrue the value of the dividends that we would have paid on the shares underlying the deferred stock units. Six months after the director ends his or her service as a director, we issue shares to the director equal to the accumulated accrued value of the dividends.

If the Board appoints a new non-employee director during the year (i.e., other than at the Annual Meeting of Shareholders), we prorate the annual equity grant value based on the number of months until the next Annual Meeting of Shareholders divided by twelve months.

To align our non-employee directors’ and our shareholders’ interests, we expect our non-employee directors to hold shares of our Common Stock. Our expectations are as follows:

If a non-employee director does not meet these ownership expectations, the Lead Director will consider the non-employee director’s particular situation and may take action as deemed appropriate. As of March 12, 2021, each director serving for at least five years met or exceeded the ownership expectation.

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

 

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Our reward structure continues to be tightly aligned with our strategy, using incentive plan metrics that are intended to drive high quality results such as volume and market share-driven growth, innovation, operational excellence, and a winning growth culture with a “local first” commercial approach.

PERFORMANCE OVERVIEW

Our 2020 performance demonstrates that our strategic priorities and long-term strategy are working. Year-over-year highlights of our 2020 performance, which reflects the impact of COVID-19, include:

 

See definitions of these measures and GAAP to non-GAAP reconciliations in Annex A.

Our results continue to demonstrate the power of our brands, the strength of our global footprint and the potential of our strategic plan. Since Mr. Van de Put assumed the CEO role in November 2017 and developed and implemented our new strategy, our TSR performance has outpaced most of our industry peers.

Annualized Total Shareholder Return During Mr. Van de Put’s Tenure as CEO

(11/20/2017-12/31/2020)

 

We also announced an 11% dividend per share increase in the third quarter of 2020 and returned $3.1 billion of capital to shareholders during the year while continuing to make significant investments in our business. All of this was made possible through our strong cash flow results, with net cash provided by operating activities generating $4.0 billion, resulting in Free Cash Flow⁽¹⁾ of $3.1 billion for 2020.

 

 

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IMPACT OF COVID-19 ON COMPENSATION PLANS

Given the timing of our fiscal year, the Compensation Committee approved the annual and long-term incentive plans, including performance metrics and targets, in February 2020 prior to the onset of the global COVID-19 pandemic. While we monitored the impact of COVID-19 on our stakeholders, the Compensation Committee, in conjunction with management, also monitored the impact of COVID-19 on the financial and strategic metrics in both the AIP and LTIP. Analyses were done several times throughout the year and each time the Compensation Committee determined that the targets remained relevant. Therefore, we did not make any adjustments to our financial or strategic targets to account for the impacts of COVID-19.

OVERVIEW OF PAY ELEMENTS

This table identifies and describes the primary elements of the 2020 executive compensation program for our NEOs, including the alignment of each incentive plan metric with our strategy. A more detailed discussion, including definitions of the financial measures used in our AIP and PSU grants, can be found later in this CD&A and in Annex A.

 

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EXECUTIVE COMPENSATION GOALS AND DESIGN PRINCIPLES

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

 

 

Design Principles

 

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SHAREHOLDER ENGAGEMENT ON EXECUTIVE COMPENSATION

The Board encourages open and constructive dialogue with shareholders on executive compensation to facilitate alignment on policies and practices. At the 2020 Annual Meeting of Shareholders, over 92% of the votes cast for our say-on-pay advisory vote were in favor of our executive compensation policies and practices.

This year we continued our ongoing shareholder engagement program to solicit feedback on our strategy, governance, sustainability practices and compensation programs. In total, we reached out to shareholders representing 47% of our outstanding shares. We ultimately had conversations with 25 different shareholders, representing approximately 37% of our outstanding shares. The independent Lead Director and three members of the Compensation Committee led conversations with shareholders representing 20% of our outstanding shares.

Conversations this year focused heavily on the impact of COVID-19 on the Company’s strategy and our response to the pandemic. Shareholders were pleased with our response to COVID-19 and the steps our Board and management team took to support and protect our employees and other stakeholders.

Throughout our discussions, we heard broad support for our compensation programs. Shareholders continue to be supportive of our AIP and the metrics we use to incentivize growth. They were also supportive of our LTIP and pleased with the changes we made in both our annual and long-term incentive plans in 2020 as a result of feedback we received from shareholders during our engagement conversations in late 2019. See “2020 Compensation Program Design Changes” on page 56 for details on the specific changes made as a result of shareholder feedback.

Feedback from the shareholder discussions was shared with the Board, the Compensation Committee and the Governance Committee.

 

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CORE COMPENSATION PRACTICES

Our executive compensation governance reflects best practices to protect and promote our shareholders’ interests.

 

TOTAL TARGET COMPENSATION MIX

The Compensation Committee places significant focus on performance-based compensation, which is provided in the form of an annual performance incentive under the AIP, and stock options and PSUs under the LTIP. Our focus on performance-based compensation rewards strong Company financial and operating performance as well as aligning the interests of our NEOs with those of our shareholders.

Below we show the 2020 total target compensation mix for our CEO and, on average, our other NEOs serving as executive officers on December 31, 2020. This compensation mix includes base pay, target annual incentive and long-term incentive grants. The majority of compensation for both the CEO and the other NEOs is at risk/variable pay.

 

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ELEMENTS OF COMPENSATION

Base Salary

Overview

Base salary is the primary element of compensation that is fixed. In setting base salaries for each NEO, the Compensation Committee uses the same approach used in determining compensation for the broader employee population, including pay competitiveness (generally targeting the median of comparable roles within our Compensation Survey Peer Group) and the use of performance-based metrics that reward exceptional financial performance. The Compensation Committee then considers several other factors, including individual NEO performance, level of responsibility, global pay fairness, experience, potential to assume roles with greater responsibility and, if relevant, host country salary data. The Compensation Committee reviews NEO salaries annually. If awarded, salary increases are generally effective April 1.

If there is a notable change in an NEO’s role and responsibilities during the year, the Compensation Committee considers whether an off-cycle increase is warranted.

2020 Compensation Actions

Except for Mr. Van de Put, each of our NEOs received a base salary increase in 2020 to reflect their level of responsibility and continued strong performance. Base salaries for all of the NEOs and increases (where applicable) are shown in the table below. After the increases for each NEO, the total target compensation opportunity provided to each NEO remains at or below the market median.

Annual Incentive Plan

Overview

We design our AIP to motivate our NEOs to achieve or exceed our annual financial and strategic goals. The Compensation Committee sets the formula, target, threshold and maximum annual incentive opportunities at the beginning of each year. Targets are set based on internal financial and operating plans for the year as well as external market factors. The Compensation Committee determines actual awards earned by each NEO based on the Company’s annual financial results and performance against key strategic objectives. Annual incentive award payouts can vary greatly from year-to-year based on actual performance relative to target goals.

As noted previously, in response to shareholder feedback, we made a number of significant enhancements to the 2020 AIP and shifted the weightings of several metrics:

 

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Annual Incentive Plan Award Formula

The Compensation Committee used the formula below to determine awards to the NEOs under the 2020 AIP.

 

Target annual incentive opportunity:

 

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The Compensation Committee reviews benchmark data from our Compensation Survey Peer Group (see page 71) to align with our goal of targeting each compensation element near market median. Target annual incentive opportunities remained the same for all NEOs in 2020.

The graphic below describes the 2020 AIP components:

 

Financial Performance Rating (80% Weighting)

Metrics and Alignment with Strategy

The financial performance rating for Messrs. Van de Put and Zaramella is based on global performance while the financial performance ratings for Messrs. Brusadelli, Gruber and Walter are based on both their region and global Company performance. The metrics used to determine the financial performance component and their alignment with our strategy are described below. In selecting metrics, the Board seeks to incentivize actions that drive execution against our strategy. After considering many potential metrics, the Board determined that each of the metrics below incentivizes a key component of our growth strategy and executives have the ability to influence our performance on each measure. Performance ratings against each measure can range from 0% to 200%, with the exception of the Market Share Overlay.

 

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Target-Setting Process

The Board recognizes the importance of establishing realistic but rigorous targets that continue to motivate and retain executives. As such, the Board approves annual operating targets after a thorough review and discussion. The targets set in the annual operating budget are the same targets approved by the Compensation Committee as targets for the AIP. The Board sets targets as stretch goals, which would also reflect superior performance within our industry if achieved.

AIP targets were approved in February 2020 prior to the onset of the COVID-19 pandemic. The Compensation Committee, in conjunction with management, monitored the impact of COVID-19 on each metric throughout the year and determined that the targets remained relevant. Therefore, we did not make any adjustments to our targets or results to reflect the impact of COVID-19.

2020 Targets and Corporate Financial Rating

To determine awards for Messrs. Van de Put and Zaramella, the Compensation Committee first evaluated the 2020 Company results against the 2020 Company performance goals listed below (U.S. dollars in millions). Overall, we achieved an above target Company performance rating of 136% under the 2020 AIP.

 

 

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2020 AMEA, Europe and North America Targets and Financial Rating

To determine the annual incentive awards for Messrs. Brusadelli, Gruber and Walter, the Compensation Committee evaluated the weighted average of the performance of the business units in each of their respective regions against the performance measures and determined a final region performance rating.

The Compensation Committee then considered targets, actual results and overall financial performance ratings for both the region and Corporate to determine a final blended financial performance rating (AMEA: 70% region, 30% Corporate; Europe and North America: 80% region, 20% Corporate) for each region president, as shown below:

This performance resulted in the region financial performance ratings as indicated above. The final blended region rating, together with strategic KPI achievement for the respective region, determined the final 2020 annual incentive award for each region president.

Strategic KPI Objectives (20% Weighting)

When the Company created its strategic plan, it established a number of KPIs directly linked to the Company’s three strategic pillars with the measurement of corresponding long-term targets for each KPI. The long-term targets were set as stretch goals with 20% of the leadership team’s annual incentive award target aligned to these KPIs. It is important to the Company that our progress on the KPIs be assessed annually to stay on track to achieve our long-term strategic goals. This approach aligns the leadership team in delivering the right strategic outcomes for the Company and replaces the subjective Individual Performance Ratings in our AIP. Achievement on the KPIs can range from 0-200% of target.

Each member of the corporate leadership team is measured on the same KPIs and goals and receives the same KPI rating, while region leaders receive a rating specific to their respective region depending on actual performance of the business units in the region.

At the end of the year, the Compensation Committee determined a payout percentage based on its assessment of achievement of pre-set annual progress goals for each KPI. The chart on the following page summarizes the KPI performance considered by the Compensation Committee during its assessment of the Company’s global performance against the annual KPI goals.

 

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Final KPI Rating

The region strategic KPI ratings are a weighted average (on a net revenue basis) of the final KPI rating for each business unit in the region. After reviewing annual progress toward each of the long-term KPI goals for the business units in the region, the Compensation Committee determined that the appropriate payout ratings for the strategic KPI goals were:

 

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Annual Cash Incentive Program Decisions

After determining the 2020 Corporate, AMEA, Europe and North America financial payout percentages and strategic KPI ratings, the Compensation Committee approved the following annual incentive cash payments:

 

Long-Term Incentive Plan

Overview

We design our LTIP to incentivize our NEOs to focus on critical performance objectives that we believe will translate into sustainable shareholder returns over the long term. Grants made under our 2020 long-term incentive program were entirely in equity using the same mix used in 2019: 75% PSUs and 25% stock options.

2020 Equity Grants to NEOs

The table below shows the 2020 equity grants to our NEOs. In determining each grant, the executive’s level of responsibility, individual and Company performance, external market positioning and recommendations from the CEO were all taken into account by the Compensation Committee.

 

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We present the actual equity grants, including grant date fair value, in the 2020 Summary Compensation Table and 2020 GOPBAT under “Executive Compensation Tables” beginning on page 75. Our 2020 annual equity grant date was the regularly scheduled Compensation Committee meeting following the release of our annual financial results. The exercise price for all stock option grants equals the closing stock price on the grant date.

Performance Share Units (75%)

Overview

The Compensation Committee grants PSUs as a part of the equity grant to motivate executives to achieve or exceed our long-term financial goals and deliver top-tier shareholder returns. Each NEO’s target number of PSUs is based on 75% of the total annual equity grant value.

The Compensation Committee approves performance targets for a three-year performance cycle when it grants PSUs. At the end of the three-year performance cycle, the grants will only vest if the Compensation Committee certifies that Company results meet or exceed the performance thresholds set at the beginning of the cycle. The number of shares earned by an executive depends on the Company’s achievement of key financial measures and annualized TSR relative to the median of our Performance Peer Group. Vested PSUs are settled in shares of our Common Stock in the first quarter following the end of the performance cycle. Dividend equivalents accrue during the performance period and are paid in cash after the shares are issued based on the actual number of shares earned.

After vesting, executives must hold net shares acquired for at least one year.

2020-2022 Metrics and Weighting

The table below describes the performance measures and weightings for the 2020-2022 PSUs and outlines how those measures align with our strategy. In selecting the metrics, the Compensation Committee seeks to incentivize behavior consistent with achieving our long-term growth objectives and to align the interests of our executives with the interests of our shareholders. The Compensation Committee considered several financial metrics for the most recent performance period and ultimately decided to use Organic Net Revenue Growth and Adjusted EPS Growth, as in prior years, because these two metrics promote growth and overall financial performance.

At the end of the performance cycle, the number of shares actually earned may range from 0% to 200% of the target number of PSUs granted. The number of shares that may be earned against each measure, as a percentage of target, at threshold, target and maximum performance levels is as follows:

 

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2020-2022 Targets and Target Setting Process

For the 2020-2022 PSU grant, the target set for Annualized Relative TSR is the 55th percentile of the Performance Peer Group. The Compensation Committee sets our financial performance targets for Organic Net Revenue Growth and Adjusted EPS Growth based on annual average growth rates while also taking into consideration our long-term strategic plan and external guidance. Targets were set in February 2020 before the global outbreak of COVID-19. The Compensation Committee, in conjunction with management, monitored the impact of COVID-19 on the Organic Net Revenue Growth and Adjusted EPS Growth targets throughout the year and determined that the targets remained relevant. Therefore, we did not make any adjustments to our targets at any point throughout the year as a result of the COVID-19 pandemic.

Although we do not prospectively disclose specific financial performance targets, we do disclose them retrospectively, along with results, at the end of each performance cycle (see “2018-2020 Performance Cycle Results and Shares Earned” on page 68). Revealing specific targets prospectively would provide competitors and other third parties with insights into our confidential planning process and strategies and potentially harm us competitively. We design our financial performance targets to be challenging, and there is no guarantee that any shares will be earned or that grants will pay out at or above target.

We provide directional guidance to assist shareholders in determining if our prospective performance targets are rigorous when evaluating our compensation programs. Below is the directional guidance on the prospective performance target, threshold and maximum for each metric in our 2020-2022 performance cycle.

The performance measures for cash awards under our AIP and for share grants related to our PSUs both include Organic Net Revenue Growth as a metric. This metric is a fundamental driver of shareholder value, and we believe our executives should focus on it over both the short and long term. A one-year target (under the AIP) and a three-year target (for the PSUs) for Organic Net Revenue Growth create different, yet complementary incentives for our employees to achieve this strategic goal and is a key driver impacting our operational and financial performance and advancing our strategic plan.

Earned PSUs vest and pay out (or are cancelled if not earned) three years following the date of grant. The actual value realized by our NEOs with respect to these awards is based on achievement of performance goals and our stock price at the time of vesting.

As described in “Annual Incentive Plan” on page 59, the Compensation Committee replaced Defined EPS with Defined Operating Income in the AIP beginning in 2020, so EPS performance is no longer duplicated between the annual and long-term incentive plans. However, growth is a key element of our strategy, so the Compensation Committee determined it was appropriate for Organic Net Revenue Growth to remain a metric in both the annual and long-term incentive plans.

 

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2018-2020 Performance Cycle Results and Shares Earned

The following chart details:

The Compensation Committee did not apply any discretion to adjust the final business performance rating for the 2018-2020 performance cycle and no adjustments were made for the impact of COVID-19. Based on the Company’s three-year results, we achieved an above target performance rating of 193% for the 2018-2020 PSU awards. Actual results for the 2018-2020 performance cycle included:

Based on target awards and the performance rating, the shares earned (before taxes) for each NEO for the 2018-2020 performance cycle were as follows:

Other Outstanding Performance Share grants

While the 2018-2020 PSU grant just vested, two additional PSU grants remain outstanding as of the end of 2020 and have the following characteristics:

 

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Stock Options (25%)

25% of our NEOs’ long-term incentive is delivered in the form of stock options that vest ratably over 3 years and have a term of 10 years. The Board believes options are an appropriate vehicle for long-term compensation because they are performance-based and emphasize growth.

As with PSUs, NEOs must hold the net shares acquired upon exercising stock options for at least one year while also maintaining their stock ownership requirement.

Other Compensation Elements

Deferred Compensation

In 2020, our U.S.-based NEOs were eligible to participate in the Mondelēz Global LLC Executive Deferred Compensation Plan (“MEDCP”), a voluntary non-qualified deferred compensation plan. The MEDCP allows executives to defer, on a pre-tax basis, up to 50% of their salary and up to 100% of their award under the AIP. Participants may invest deferred amounts in one or more notional investment options.

The MEDCP is similar to plans provided to executives at many of the companies in our Compensation Survey Peer Group. The Compensation Committee believes the MEDCP aids in recruitment and assists executives in managing their future cash flow.

Retirement and Separation Benefits

Our U.S.-based NEOs are eligible for broad-based U.S. employee benefit plans on the same terms as U.S. salaried employees, including two tax-qualified plans: the Mondelēz Global LLC Retirement Plan (“Retirement Plan”) and the Mondelēz Global LLC Thrift Plan (“Thrift Plan”). The Retirement Plan was closed to new participants in 2009; as a result, none of our NEOs participate in that plan. Accruals under the Retirement Plan and the defined benefit portion of the Supplemental Plan (as defined below) ceased December 31, 2019. U.S. salaried employees who are not eligible to participate in the Retirement Plan receive a Company contribution based on a percentage of eligible compensation under the Thrift Plan.

We also provide an unfunded non-qualified plan, the Mondelēz Global LLC Supplemental Benefits Plan (“Supplemental Plan”), for eligible U.S. employees. The Supplemental Plan provides benefits that are not provided under the Retirement Plan or the Thrift Plan because:

The Compensation Committee believes the Thrift Plan and the Supplemental Plan are integral pieces of our overall executive compensation program because they promote the retention of our executive leadership team over the long term. The Compensation Committee believes our NEOs should receive the same defined benefit accruals, be able to defer the same percentage of their compensation and receive the same corresponding notional employer contributions as all other employees, without regard to the Code’s compensation limit applicable to tax-qualified plans or whether the NEO has elected to defer compensation.

 

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HOW COMPENSATION DECISIONS ARE MADE

Role of Peer Groups

The Compensation Committee uses two different groups of companies to: i) benchmark executive compensation, market practices and compensation design; and ii) assess relative performance.

Compensation Survey Peer Group

The Compensation Committee reviews compensation data from a comparator group of companies as one reference point when making compensation decisions for all executive pay including CEO pay, and when benchmarking compensation plan designs. Aggregate pay level benchmarking data for all elements of compensation, including salary, target bonus, total target cash, long-term incentive and target total pay, is provided for each NEO role by Aon Hewitt (“Aon”), and at the request of the Compensation Committee, the Compensation Committee’s consultant reviews and evaluates the Aon data. Separately, market data for the CEO is reviewed independently from the Aon data. Other factors considered in NEO compensation decisions include individual performance, responsibilities, leadership, years of experience, Company performance and long-term growth potential.

We routinely review the selection criteria and companies in our Compensation Survey Peer Group. In late 2019, the Compensation Committee reviewed the Compensation Survey Peer Group to ensure all companies were still meeting the original criteria for selection. This review resulted in the removal of Newell Brands from the peer group. The table on the following page shows our criteria for choosing the Compensation Survey Peer Group and how it is used.

 

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To further validate our compensation levels, using data provided by the executive compensation consultant, the Compensation Committee retrospectively evaluates our pay-for-performance alignment versus our Compensation Survey Peer Group. The Committee believes that pay and performance is appropriately aligned.

Performance Peer Group

We compare our financial and TSR performance against our Performance Peer Group, which allows us to link long-term incentive compensation directly to the delivery of superior financial results relative to our food and beverage peers. This group of companies is less relevant as a comparator for compensation levels for certain executive positions because of differences in company size, scope and complexity. However, we consider these companies direct competitors both for business and talent so comparing our results with this peer group’s performance provides a valuable and relevant measure of our performance. The table below shows our criteria for choosing the Performance Peer Group and how it is used.

 

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Decision-Making Process

Role of the Compensation Consultant

The Compensation Committee retains an independent compensation consultant to assist in evaluating executive compensation programs, advising the Committee regarding the amount and form of executive and director compensation and determining pay-for-performance alignment. Conferring with a consultant provides additional assurance that our executive and director compensation programs are reasonable, competitive and consistent with our objectives. The Compensation Committee directly engages the consultant.

Since August 2019, the Compensation Committee has engaged Semler Brossy as its independent compensation consultant. For additional information regarding the Compensation Committee’s use of an independent compensation consultant, see “The Compensation Committee’s Use of an Independent Compensation Consultant” on page 44.

 

Role of the Compensation Committee

The Compensation Committee understands that CEO pay should be perceived as reasonable relative to overall employee pay and is mindful of the pay grades and salary ranges of our employees when making compensation decisions. The approach used to determine both CEO and NEO compensation is the same approach used in determining compensation for the broader employee population, including pay competitiveness and the use of performance-based metrics that reward exceptional financial performance. When determining CEO and NEO pay, the Compensation Committee also considers other factors that it regularly reviews, including shareholder feedback, the advisory vote on compensation, global pay fairness, performance and progress against the strategic KPIs.

The Compensation Committee reviews and discusses the CEO’s self-evaluation of his performance with the Board and makes preliminary recommendations about base salary and long-term incentive compensation based on a consideration of all the factors mentioned above. The Compensation Committee then discusses the compensation recommendations with the Board before approving the final compensation decisions. The CEO is not present during Compensation Committee voting or deliberations regarding his own compensation.

Role of the Chief Executive Officer

The CEO makes compensation recommendations to the Compensation Committee for base salary and long-term incentive compensation for the NEOs other than himself, and considers pay competitiveness as well as both individual and Company performance when making his recommendations. Although individual performance is no longer a discrete component of the AIP for our executives, individual performance plays an important role in the base salary and long-term incentive recommendations made by the CEO. Based on an NEO’s contributions in specific areas, such as achievement of key strategic initiatives, operational efficiency, enterprise leadership, quality of financial results, leadership in a time of crisis and talent management, the CEO provides the Compensation Committee with an individual performance assessment and rating recommendation as well as compensation recommendation for each NEO.

The Compensation Committee considers the CEO’s analysis and direct knowledge of each NEO’s performance and contributions when determining each NEO’s individual performance rating and when making their final compensation decisions.

 

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Compensation Committee Resources

The Compensation Committee uses several resources to help with decision-making including competitive market data and “tally sheets” that quantify each compensation element as well as accumulated outstanding long-term equity awards for each NEO.

STOCK OWNERSHIP

To further align NEO and shareholder interests, the Compensation Committee requires all executives to hold a significant amount of Common Stock. The following chart summarizes our requirements, which are comparable to, or greater than, such requirements at the majority of companies in our Compensation Survey Peer Group.

The Compensation Committee monitors our executives’ compliance with these requirements. As of March 12, 2021, all NEOs have satisfied, exceeded or were on track to meet their stock ownership requirements and adhered to the holding requirements.

CLAWBACK POLICY

The Board or an appropriate committee of the Board may determine the extent to which the Company should recoup the incentive-based compensation of any executive officer whose act or omission necessitated a restatement or who participated in significant misconduct. The Board or committee, in its discretion, may then take the actions it deems necessary or appropriate to address the events that gave rise to the restatement or misconduct and to prevent its recurrence. Those actions may include, to the extent permitted by applicable law:

 

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TRADING RESTRICTIONS, ANTI-HEDGING AND ANTI-PLEDGING POLICY

Our insider trading policy limits the timing and types of transactions in Mondelēz International securities by Section 16 officers, including our NEOs. Among other restrictions, the policy:

Our insider trading policy also prohibits our executive officers and certain additional executives from holding Mondelēz International securities in a margin account or pledging Mondelēz International securities as collateral for a loan.

These restrictions extend to any member of a Section 16 officer’s family sharing the same household, any corporations or other business entities a Section 16 officer controls or manages, and any trusts of which a Section 16 officer is the trustee or over which a Section 16 officer has investment control. See “Anti-Hedging Policy” on page 36 for more information on our hedging policy.

TAX DEDUCTIBILITY

Section 162(m) of the Code generally places a limit of $1 million per year on the amount of deductible compensation paid to certain “covered employees” under the Code, which includes our NEOs. The Compensation Committee believes that shareholder interests are best served if it retains discretion and flexibility in awarding compensation. Even though some compensation awards may result in non-deductible compensation expenses, the Compensation Committee intends to maintain strong pay-for-performance alignment of executive compensation arrangements even though the exemption for certain performance-based compensation has been repealed.

 

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Name	Performance Cycle	Value at Maximum Performance ($)
Van de Put, Dirk	2020 - 2022	16,500,499
	2019 - 2021	15,675,066
	2018 - 2020	13,500,283
Zaramella, Luca	2020 - 2022	4,651,171
	2019 - 2021	3,375,713
	2018 - 2020	1,170,419
	2018 - 2020	1,500,763
Brusadelli, Maurizio	2020 - 2022	3,450,298
	2019 - 2021	3,375,713
Gruber, Vinzenz	2020 - 2022	3,300,336
Walter, Glen	2020 - 2022	3,300,336
	2019 - 2021	3,150,474
	2018 - 2020	3,150,124

 

(3) Reflects stock option grants. The amounts shown represent the full grant date fair value of the options granted in each year as computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 12 to the consolidated financial statements contained in our 2020 Form 10-K. (4) Reflects awards made under our 2020 AIP which were paid in March 2021. (5) Reflects the aggregate increase in the actuarial present value of the benefits under the Pension Fund Mondelēz Switzerland for Mr. Gruber. Messrs. Van de Put, Zaramella, Brusadelli and Walter are not eligible to participate in a defined benefit retirement plan. (6) The amounts shown in the “All Other Compensation” column for 2020 reflect the following:

 

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PENSION FUND MONDELĒZ SWITZERLAND – MR. GRUBER

Eligibility for this funded contributory, tax-qualified defined benefit plan is limited to full-time and part-time employees with a Swiss employment contract signed before January 1, 2011. Benefits are payable upon normal retirement (defined as age 65) in the form of an annuity or lump sum. If a participant elects to receive a distribution prior to normal retirement, benefits are subject to reduction.

Benefits generally accrue based on 1.85% of pensionable salary (defined as annual base salary minus a coordination deduction) up to 37 years. The coordination deduction is limited to 40% of salary, up to 100% of the maximum full Federal Old Age and Survivors’ Insurance pension (for 2020: CHF28,440). The maximum pensionable salary corresponds to ten times the upper limit under Article 8 Paragraph 1 of the Swiss Federal Act on Occupational Retirement, Survivors’ and Disability Pension Plans (for 2020: CHF853,200).

Participating employees contribute 10% of pensionable salary to the plan.

 

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MONDELĒZ GLOBAL LLC SUPPLEMENTAL BENEFITS PLAN I

Because IRS Code Sections 401(a)(17) and 415 limits the amount that may be contributed to our U.S. tax-qualified defined contribution plan on behalf of an employee, we offer our U.S.-based NEOs a supplemental defined contribution program under the Supplemental Plan. This is an unfunded non-qualified plan that allows eligible employees to defer a portion of their annual compensation (base salary and AIP awards) and receive corresponding matching amounts to the extent that their contributions to the tax-qualified defined contribution plan (and the corresponding matching contributions) are limited by Code Sections 401(a)(17) or 415. In addition, employees hired after 2008 or localized to the United States after 2015, who are not otherwise eligible to participate in the Retirement Plan, receive an additional non-elective Company contribution to the Supplemental Plan equal to 4.5% of eligible compensation.

The timing of distributions depends on whether the amount distributed is subject to Code Section 409A. For distributions not subject to Code Section 409A, the distribution will be made in accordance with the employee’s distribution election. For distributions subject to Code Section 409A, employees will receive their account balances in a lump sum within 90 days after separation from service. An employee who is a “specified employee” for purposes of Code Section 409A will have the lump sum delayed for six months. Amounts deferred and notional employer matching contributions earn the same notional rate of return as the Income Fund, which is a market rate investment option available to participants in the U.S. tax-qualified defined contribution plan. The rate of return under this investment option in 2020 was 2.42%.

Beginning January 1, 2020, all eligible U.S. based employees receive a non-elective Company contribution because the Retirement Plan is frozen as of January 1, 2020.

MONDELĒZ GLOBAL LLC EXECUTIVE DEFERRED COMPENSATION PLAN

The MEDCP is a non-qualified plan that allows U.S.-based participants to defer, on a pre-tax basis, up to 50% of salary and up to 100% of their AIP award. The notional investment options are similar to those offered to participants in our U.S. tax-qualified defined contribution plan. A participant who elects to defer compensation must decide whether to defer receipt of the compensation until separation from service, as determined under Code Section 409A, or to receive a distribution while still employed with the Company. Distributions may be made in a lump sum or annual installments of between two and ten years. Any participant who is a specified employee for purposes of Code Section 409A will have the distribution delayed for six months following a separation from service.

The notional investment options available to participants in the MEDCP are selected by the Company and may be changed from time to time. Participants are permitted to change their investment elections at any time on a prospective basis. The table below shows the available notional investment options under the MEDCP and their annual rate of return for the calendar year ended December 31, 2020.

 

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The narrative and tables below describe the potential payments to each NEO upon certain terminations, including following a CIC. In accordance with SEC rules, all information described in this section is presented as if the triggering events occurred on December 31, 2020.

INVOLUNTARY TERMINATION WITHOUT CAUSE (NON-CHANGE IN CONTROL EVENT)

Generally, we do not enter into ongoing agreements that provide for separation benefits on the NEO’s departure from the Company. However, if we involuntarily terminate an NEO without cause outside of a CIC event, we expect that in most cases, the Compensation Committee would offer separation benefits as consideration for protections we would likely seek, such as a release of claims and entering into non-compete, non-solicitation and confidentiality agreements. More specifically, we expect to treat our U.S. salaried NEOs (other than Mr. Van de Put) at least comparably to other U.S. salaried employees whom we involuntarily terminate without cause. For U.S. salaried employees such as our NEOs, our severance plan provides an employee whose job is eliminated with severance pay of up to 12 months based on length of service. Because Mr. Brusadelli is an employee of Mondelēz Italia Services, his separation benefits are comparable to those offered to our other Italian employees whom we involuntarily terminate without cause. Because Mr. Gruber is an employee of Mondelēz Europe GmbH, his separation benefits are comparable to those offered to our other Swiss employees whom we involuntarily terminate without cause.

The following chart reflects the typical separation benefits that may be offered to a U.S. NEO whom we involuntarily terminate without cause. The Compensation Committee would determine actual terms and conditions based on the particular facts in each specific case.

 

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POTENTIAL PAYOUT UPON AN INVOLUNTARY TERMINATION WITHOUT CAUSE

The table below was prepared as if each of the NEOs were involuntarily terminated without cause on December 31, 2020.

 

 

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DOUBLE TRIGGER CHANGE IN CONTROL ARRANGEMENTS

NEOs are not eligible for any benefit solely upon a CIC. Our CIC Plan for senior executive officers, including the NEOs, provides for certain benefits upon an involuntary termination of employment without “Cause” or voluntary termination for “Good Reason” within two years following a CIC. To receive any benefits under the CIC Plan, a participant must abide by certain restrictive covenants, including a non-compete and non-solicitation for one year following termination. Under the terms of the CIC Plan, a participant who violates a provision of these restrictive covenants must pay back any amounts already paid and receives no further payments from the CIC Plan.

Additionally, the Equity Plan provides for the treatment of unassumed outstanding equity grants following a CIC and assumed outstanding equity grants upon an involuntary termination of employment without Cause or voluntary termination for Good Reason within two years following a CIC.

The key elements of the CIC Plan and Equity Plan assuming a double trigger event are described in the table below.

 

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POTENTIAL PAYOUT UPON A TERMINATION FOLLOWING A CHANGE IN CONTROL

The table below was prepared as if each of the NEOs covered under our CIC Plan and Equity Plan were involuntarily terminated without cause or voluntarily terminated for Good Reason immediately following a CIC on December 31, 2020.

 

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POTENTIAL PAYOUT UPON OTHER TYPES OF SEPARATION

Death or Disability. If an NEO terminates employment due to death or disability, all of the NEO’s outstanding unvested stock option grants would vest. In addition, the NEO (or beneficiary) would become eligible for an award under the AIP and a prorated award for outstanding PSU grants.

The table below describes the estimated value of such payments based on a December 31, 2020 termination due to death or disability.

 

Retirement. If an NEO terminates employment due to retirement:

None of our NEOs were eligible for retirement treatment on December 31, 2020.

 

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The following table displays information about persons we know were the beneficial owners of more than 5% of the issued and outstanding Common Stock as of December 31, 2020.

 

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Following its review and consideration of the potential benefits and costs of choosing a different auditor, the Audit Committee selected PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for 2021. The Audit Committee and the Board believe that the continued retention of PricewaterhouseCoopers LLP as the independent external auditor is in our and our shareholders’ best interests and are requesting, as a matter of good corporate governance, that shareholders ratify this selection.

The Audit Committee and the Board are not required to take any action as a result of the outcome of the vote on this proposal. However, if our shareholders do not ratify the selection, the Audit Committee may investigate the reasons for our shareholders’ rejection and may consider whether to retain PricewaterhouseCoopers LLP or appoint another independent registered public accountant. Even if the selection is ratified, the Audit Committee may appoint a different independent registered public accountant if, in its discretion, it determines that such a change would be in Mondelēz International’s and our shareholders’ best interests.

We expect that a representative of PricewaterhouseCoopers LLP will be present at the Annual Meeting and will have an opportunity to make a statement if desired and to respond to appropriate questions from shareholders. Additional information about the independent registered public accountants, including the pre-approval policies and PricewaterhouseCoopers LLP’s aggregate fees for services rendered for 2020 and 2019, can be found in the section on the Audit Committee beginning on page 38.

 

 

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BOARD OF DIRECTORS’ STATEMENT IN OPPOSITION TO ITEM 4.

The Human Resources and Compensation Committee (the “Compensation Committee”) of our Board has established a thoughtful and robust practice for evaluating and reviewing executive compensation that emphasizes a strong pay-for-performance philosophy and creates incentives to align the interests of our executives with those of our shareholders, while taking into consideration the competition for talent in our industry. Its philosophy and process are detailed in our Compensation Discussion and Analysis (“CD&A”) set forth on pages 53 to 74.

Our approach to executive compensation occurs within the context of established global compensation principles to make our practices fair and reasonable for our employees. We have a robust process to set employee compensation levels. The Compensation Committee understands that CEO pay should be perceived as reasonable relative to overall employee pay, and it is mindful of the pay grades and/or salary ranges of our employees when making compensation decisions. The approach used to set CEO and executive pay is the same approach used to determine compensation for our broader employee population, including pay competitiveness and the use of performance-based metrics that reward exceptional financial performance and promote sustainable long-term growth. The Compensation Committee also regularly reviews and considers other factors when setting CEO and executive pay, including shareholder feedback, the advisory vote on executive compensation, global pay equity, performance and progress against the strategic KPIs. These principles and practices align with our strategy, balance both individual and enterprise-wide performance, and provide competitive wages and benefits compared to the most relevant markets for our employees based on their roles, responsibilities, skills and performance. We also have consistent compensation and benefits programs across the globe where possible. For example, executives generally participate in the same annual management incentive plan as many of our managers and other associates, and they generally receive the same welfare, life and retirement benefits as other salaried employees in the same geography. To monitor the effectiveness of our program, we regularly assess how our pay components compare to those of other similarly sized multinational companies, and we make adjustments to stay competitive and to attract, retain and motivate a highly qualified diverse workforce at all levels throughout the organization.

Our Board and Compensation Committee are thoughtful and diligent in their approach to evaluating executive compensation. In addition to being independent, the Compensation Committee retains an independent compensation consultant to advise on and evaluate the amount, form, reasonableness and competitiveness of our executive compensation. As part of its process, the Compensation Committee considers key drivers of Company performance and holds executives accountable for delivering on such performance targets. The Compensation Committee regularly assesses our executive compensation program, considering our strategy, market practices and shareholder input to confirm that it remains appropriately aligned with current market practices and shareholders’ interests. In addition, the Compensation Committee also considers broader issues such as leadership effectiveness, culture, diversity and succession planning.

Our executive compensation practices are informed by shareholders. We value and carefully consider the feedback we receive from shareholders regarding our executive compensation programs. Our executive compensation programs received 92% shareholder support at the 2020 Annual Meeting of Shareholders. Following the 2020 meeting, we engaged with 25 shareholders representing nearly 37% of our outstanding shares, with four independent directors leading conversations with shareholders representing 20% of our outstanding shares. During these conversations, we solicited input on our executive compensation programs and other important matters. During our engagement, shareholders continued to be supportive of the changes we had previously implemented to our 2020 compensation program, which included, among other changes, increased rigor of target pay, limited use of duplicative metrics in incentive plans, and the inclusion of more quantitative measurable metrics in individual performance factors that support our strategy, including metrics around diversity, talent and employee engagement. A summary of our executive compensation program, including the alignment of incentive plans to our strategy and an overview of the program design changes made in 2020 can be found in our CD&A on pages 53 to 74.

Based on all of these factors and given the breadth of the information available to and already taken into consideration by the Compensation Committee, we believe that mandating that certain information be utilized by the Compensation Committee in the performance of its duties is redundant and unnecessary.

 

 

 

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Due to the continued public health concerns about in-person gatherings related to COVID-19, the Board has determined that this year we will hold a virtual Annual Meeting conducted via webcast in order to support the health and well-being of our shareholders and other participants. We will hold the Annual Meeting at 9:00 a.m. CDT on May 19, 2021. Shareholders may attend, vote and submit questions by visiting www.virtualshareholdermeeting.com/MDLZ2021 and using the 16-digit control number shown on your Notice, proxy card or VIF.

The Board established March 12, 2021, as the record date (the “Record Date”) for the Annual Meeting. Each shareholder (registered or beneficial) who held shares of Common Stock at the close of business on the Record Date is entitled to receive notice of the Annual Meeting, to attend the Annual Meeting online and to vote on all matters that properly come before the Annual Meeting.

At the close of business on the Record Date, 1,405,095,675 shares of Common Stock were outstanding and entitled to vote. Each share is entitled to one vote on each matter to be voted upon at the Annual Meeting.

You received these proxy materials because as of the Record Date, you directly or indirectly held, and had the right to vote, shares of Common Stock. In connection with the Board’s solicitation of proxies to be voted at the Annual Meeting, we are providing shareholders entitled to vote at the Annual Meeting with this Proxy Statement, the 2020 Form 10-K and a proxy card or VIF. We are providing your proxy card or VIF in the form of a paper card or a unique control number that allows you to give your proxy voting instructions online or by phone. We refer to these materials collectively as the “proxy materials.” These materials provide important information about Mondelēz International and describe the voting procedures and the matters to be voted on at the AnnualMeeting.

Shareholders who hold Mondelēz International stock directly with our stock registrar and transfer agent, EQ Shareowner Services, are registered shareholders. If you are a registered shareholder, the proxy distributors will send the proxy materials directly to you, and your vote instructs the proxies how to vote your shares.

Shareholders who hold stock indirectly through an account with an institutional or other nominee holder of stock, such as a broker or bank, are referred to as beneficial shareholders or shareholders “in street name.” If you are a beneficial shareholder, your broker, bank or other nominee delivers the proxy materials to you, and your vote instructs your nominee how to vote your shares; your nominee in turn instructs the proxies how to vote your shares.

If you hold your shares beneficially in an employee benefit plan, your shares are voted by the trustee of the plan per your instructions. If you do not give instructions, your shares will be voted in accordance with the plan’s governing documents and applicable law.

We are furnishing proxy materials to our shareholders primarily via “Notice and Access” delivery. On or about April 7, 2021, we mailed to our shareholders (other than those who previously requested email or paper delivery) the Notice containing instructions on how to access the proxy materials electronically.

If you receive the Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice instructs you on how to access the proxy materials and vote by going to a secure website. However, if you received the Notice by mail and would like to receive paper copies of the proxy materials in the mail on a one-time or ongoing basis, or if you would like to receive an electronic copy of the proxy materials by email on a one-time or ongoing basis, follow the instructions in the Notice for making such a request.

The Notice is not a proxy card. You cannot use it to vote your shares.

 

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We will send printed, paper copies of proxy materials, including the 2020 Form 10-K, free of charge to any shareholder who requests copies in writing to: Investor Relations, Mondelēz International, Inc., 905 West Fulton Market, Suite 200, Chicago, Illinois 60607.

Shareholders may also request copies of these materials using one of the following methods:

These materials are also available at http://materials.proxyvote.com/609207.

Yes, you are entitled to vote. Your proxy card or control number for voting electronically includes all shares allocated to your Mondelēz International Stock Fund account(s). With regard to each plan in which you hold the stock, your vote directs the plan trustee how to vote the shares allocated to you.

In order to direct the plan trustee how to vote the shares held in your Mondelēz International Stock Fund account(s), you must vote these plan shares (whether by Internet, QR barcode, telephone or mailed proxy card) by 11:59 p.m. EDT on May 14, 2021. If the trustee(s) does not receive your voting instructions or proxy card by that time, the trustee(s) will vote the shares allocated to your account(s) in the same proportion as the respective plan shares for which the trustee timely received voting instructions, unless doing so would be contrary to the Employee Retirement Income Security Act of 1974. Please follow the instructions for registered shareholders described in Question 12 below to cast your vote. Note that although you may attend the Annual Meeting online, you may not vote shares held in your Mondelēz International Stock Fund account(s) at the Annual Meeting.

If you hold shares in the Direct Purchase Plan, follow the instructions for registered shareholders described in Question 12 below to vote your shares. When you vote those shares, you will be voting all the shares you hold at our transfer agent as a registered shareholder. If you do not vote your shares, they will not be voted. PLEASE VOTE.

Computershare Investor Services Plc (“Computershare”) will send all CREST Participants (including nominee companies and sponsored individuals) that hold CDIs a notice and Form of Proxy that allow these participants to vote prior to the Annual Meeting. If you hold your CDIs in CREST, you can vote the underlying shares by completing and sending the Form of Proxy to the Voting Agent, Computershare, or via CREST as detailed on the Form of Proxy. Computershare must receive your vote by 3:00 p.m. London time on May 14, 2021. Computershare will then notify the Registrar of the vote for the underlying shares and your vote will be included in the final tally for the Annual Meeting. If you wish to attend the meeting and/or vote at the Annual Meeting, you must notify the Depository 48 hours prior to the Annual Meeting in writing or email at csnditeam@computershare.co.uk who will issue you a 16-digit pin number for the meeting.

 

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If Computershare holds your CDIs on your behalf within Mondelēz International Corporate Sponsored Nominee Service, Computershare, as the international nominee for your CDIs, will send you a notice and Form of Direction. You may direct Computershare how to vote your underlying shares online or by returning your Form of Direction according to the instructions in the notice and Form of Direction by 3:00 p.m. London time on May 13, 2021. Computershare will then arrange to vote your underlying shares according to your instructions. If you wish to attend or vote at the Annual Meeting, please inform Computershare 48 hours prior to the meeting, they will provide you with a letter of representation with respect to your CDI holding that will contain the 16-digit pin number that will enable you to attend, submit a question or vote your underlying shares at the Annual Meeting on Computershare’s behalf. You can notify Computershare by emailing them at csnditeam@computershare.co.uk or by calling the helpline on 0344 472 6005.

If another international nominee holds your CDIs on your behalf, your nominee may have its own arrangements in place to provide you with a separate notice of the Annual Meeting and proxy voting card with respect to your underlying shares. In that case, please follow your nominee’s voting instructions to direct your nominee how to vote your underlying shares. Please vote by the deadline stated on the nominee’s notice and proxy voting card.

If you hold CDIs and have questions about voting your shares of Common Stock underlying your CDIs, please contact Computershare at +44 (0)344 472 6005.

Yes.

If you are a registered shareholder, any subsequent vote you cast will replace your earlier vote. This applies whether you vote by mailing a proxy card or via QR barcode, telephone or the Internet. You may also revoke an earlier vote by voting online at the Annual Meeting prior to the closing of the polls. Alternatively, you may revoke your proxy by submitting a written revocation to the Corporate Secretary at Mondelēz International, Inc., 905 West Fulton Market, Suite 200, Chicago, Illinois 60607.

If you are a beneficial shareholder, you must contact your broker, bank or other nominee for specific instructions on how to change or revoke your vote.

We need a quorum of shareholders to validly hold the Annual Meeting. A quorum will be present if a majority of the outstanding shares of Common Stock entitled to vote as of the Record Date is represented at the Annual Meeting, either online or by proxy.

Abstentions and broker non-votes (described in Question 15 below) will be counted for the purpose of determining whether a quorum is present for the Annual Meeting.

If you are a registered shareholder, you may vote any of these four ways:

 

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If you are a beneficial shareholder, you may vote any of these four ways:

To be elected in an uncontested election such as at this Annual Meeting, a director nominee must receive a majority of the votes cast – i.e., more votes FOR than AGAINST. Abstentions and broker non-votes (described in Question 15 below) are not considered as votes cast and will have no effect on the vote outcome for these matters.

In an uncontested election, if an incumbent director nominated for re-election receives a greater number of votes AGAINST than votes FOR, the director must tender his or her resignation to the Governance Committee for its consideration following certification of the election results. The Governance Committee then will recommend to the Board whether to accept the resignation. The director will continue to serve until the Board decides whether to accept the resignation but will not participate in the committee’s recommendation or the Board’s action regarding whether to accept the resignation offer. The Board considers all factors it deems relevant to the Company’s best interests and will publicly disclose its decision and rationale within 90 days after certification of the election results. If the Board does not accept the director’s resignation, the director will continue to serve until the next annual meeting of shareholders or until the director’s successor is duly elected and qualified.

Approval of each of Item 2 (Advisory Vote to Approve Executive Compensation), Item 3 (Ratification of the Selection of the Independent Registered Public Accountants) and Item 4 (Shareholder Proposal) also requires a majority of votes cast – i.e., more votes FOR than AGAINST. Abstentions and broker non-votes (described in Question 15 below) are not considered as votes cast and will have no effect on the vote outcome for Items 2 and 4. There should not be any broker non-votes with respect to Item 3 (as explained in Question 15 below).

If you are a beneficial shareholder, your vote instructs your broker, bank or other nominee, as the holder of record, how to vote your shares. If you do not provide voting instructions to your broker, bank or other nominee, your nominee has discretion to vote your shares only on matters classified as “routine” under stock exchange rules. The ratification of the selection of the independent registered public accountants (Item 3) is the only item on the agenda for the Annual Meeting that is considered routine. If you do not provide voting instructions to your broker or other nominee, your nominee may vote your shares only on Item 3. In that case, your shares will count toward the quorum for the Annual Meeting and be voted on Item 3, but they will not be voted on Items 1, 2 and 4 and any other matters that may come to vote at the Annual Meeting, resulting in “broker non-votes.”

The Company bears the cost of soliciting your vote. The Company’s directors, officers or employees may solicit proxies or votes in person, by telephone or by electronic communication. They will not receive any additional compensation for these solicitation activities.

The Company will enlist the help of banks, brokers and other nominee holders in soliciting proxies for the Annual Meeting from their customers (i.e., beneficial shareholders) and reimburse those firms for related out-of-pocket expenses. We retained Morrow Sodali LLC to aid in soliciting votes for the Annual Meeting for a fee not to exceed $30,000 plus reasonable expenses.

 

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We have adopted procedures that allow us to deliver proxy materials more cost effectively. If you are a beneficial shareholder and you and other residents at your mailing address share the same last name and also own shares of Common Stock in an account at the same broker, bank or other nominee, your nominee delivered a single Notice or set of proxy materials to your address, unless you provided contrary instructions. This method of delivery is known as householding. Householding reduces the number of mailings you receive, saves on printing and postage costs, and helps the environment. Shareholders participating in householding continue to receive separate proxy cards and control numbers for voting electronically.

A shareholder who received a single Notice or set of proxy materials to a shared address may request a separate copy of the Notice or proxy materials by contacting in writing Broadridge Financial Solutions, Inc., Householding Department at 51 Mercedes Way, Edgewood, New York, 11717, or calling 1-866-540-7095. We will deliver promptly a separate copy of the Notice or proxy materials to a shareholder at a shared address to which a single copy was delivered, if requested. If you would like to opt out of householding for future deliveries of proxy materials, please contact your broker, bank or other nominee.

Beneficial shareholders who share an address and receive multiple copies of the proxy materials but want to receive only a single copy of these materials in the future should contact their broker, bank or other nominee and make this request.

If you are a registered shareholder or hold your shares in an employee benefit plan, we sent you and each registered or plan shareholder at your address separate Notices or sets of proxy materials.

Yes. Your votes will not be disclosed to our directors, officers or employees except:

Broadridge Financial Solutions will receive and tabulate the proxies. Representatives of Hagberg Associates LLC will act as the inspectors of election and will certify the results.

We expect to announce preliminary voting results at the Annual Meeting. We will disclose final voting results in a Current Report on Form 8-K to be filed with the SEC on or before May 25, 2021. The Form 8-K will be available at http://ir.mondelezinternational.com/sec.cfm and on the SEC’s website at www.sec.gov.

Due to the continued public health concerns about in-person gatherings related to COVID-19, the Annual Meeting will be a virtual meeting of shareholders. All shareholders of record as of March 12, 2021 may attend, vote and submit questions by visiting www.virtualshareholdermeeting.com/MDLZ2021 and using the 16-digit control number that is shown on your Notice, proxy card or VIF. If you are not a shareholder or do not have a control number, you may still access the meeting as a guest but you will not be able to submit questions.

 

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Yes. On the day of, and during, the Annual Meeting, shareholders of record can submit questions via www.virtualshareholdermeeting.com/MDLZ2021. Shareholders must have their 16-digit control number to submit questions. Shareholders will have an opportunity to raise questions about the items being voted on at the Annual Meeting. In addition, after the business portion of the Annual Meeting concludes and the meeting is adjourned, shareholders will have another opportunity to raise questions of a more general nature. We intend to answer during the Annual Meeting all questions submitted that are pertinent to the Company and the items being voted on by shareholders, as time permits and in accordance with our meeting procedures. Answers to questions not addressed during the Annual Meeting will be posted following the meeting on the investor relations section of our website. Questions and answers will be grouped by topic and substantially similar questions will be answered only once. To promote fairness, efficiently use the Company’s resources and address all shareholder questions, we will respond to no more than three questions from any single shareholder. Questions that are irrelevant to our business or the conduct of our operations, related to pending or threatened litigation, derogatory, not in good taste, related to personal grievances or otherwise inappropriate will not be addressed.

 

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Our long-term financial target for Organic Net Revenue growth is a non-GAAP financial measure that excludes or otherwise adjusts for items impacting comparability of financial results such as the impact of changes in currency exchange rates, acquisitions and divestitures. We are not able to reconcile our target Organic Net Revenue growth to comparable reported net revenue growth because we are unable to predict the impact from potential acquisitions or divestitures, as well as the impact of currency translation due to the unpredictability of future changes in currency exchange rates, which could be material as a significant portion of our operations are outside the U.S. Therefore, because of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, we are unable to provide a reconciliation of this measure without unreasonable effort.

 

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