UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, DC 20549

 

SCHEDULE 14A

 

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.     )

 

Filed by the Registrant

Filed by a Party other than the Registrant

 

Check the appropriate box:
	Preliminary Proxy Statement
	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
	Definitive Proxy Statement
	Definitive Additional Materials
	Soliciting Material under §240.14a-12

 

 

Mondelēz International, Inc.

 

(Name of Registrant as Specified in Its Charter)

 

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

 

Payment of Filing Fee (Check all boxes that apply):
	No fee required.
	Fee paid previously with preliminary materials.
	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Our annual State of Snacking survey shows that consumers around the world increasingly choose snacking over traditional mealtimes, and they are continuing to consume more snacks at home. These trends make our core categories of chocolate and biscuits, as well as our growing portfolio of baked snacks, very attractive. Additionally, increased mobility creates more opportunities for consumers to select our brands on-the-go. Although we continue to face near-term input cost inflation – as well as supply chain, labor and transportation disruptions – we are navigating these challenges through our revenue growth management activities.

Our Purpose-led growth strategy, launched in September 2018, continues to create shareholder value. Our continued focus on profit dollar growth enables us to advance a virtuous cycle that funds high-return investments and powers local-first, consumer-centric commercial execution. Examples of our strategy in action in 2021 include:

Along with our financial performance, we made strong progress against our environmental, social and governance (“ESG”) strategic priorities while maintaining relentless focus on our Purpose. We continued to improve cocoa farmers’ productivity through our transformational Cocoa Life program – now entering its 10^th year of environmental and social innovation. We also launched a green bond offering to help fund our projects aimed at advancing sustainable sourcing, reducing packaging waste and tackling climate change. At the time of issue, this bond was the largest-ever green bond in the Packaged Food and Consumer Goods Industry.

Recognizing that we cannot address these urgent issues alone, we expanded our involvement in several key public and private partnerships. In November, we announced our goal of achieving net zero greenhouse gas emissions across our full value chain by 2050 – signing onto the Science Based Targets Initiative’s Business Ambition for 1.5°C, while joining the United Nations Race to Zero campaign. Additionally, we joined the Circulate Capital Ocean Fund as a limited partner – supporting scalable business solutions to help advance infrastructure for collecting, sorting and recycling plastic waste in developing countries.

We also made significant progress toward our long-standing commitment to advancing diversity, equity and inclusion. In 2021, we advanced numerous economic inclusion and supplier diversity initiatives. We also increased the proportion of Black colleagues in U.S. management positions (defined as Director and above) from 3.2 percent at year-end 2020 to 5.1 percent at year-end 2021. Our share of women in global management roles (defined as Director and above) also continues to rise, and stood at 39.3 percent at year-end 2021.

These are just a few examples of key actions advancing our ambition to become a more sustainable snacking company. We continue transforming how we do business across our own operations – as well as partnering with farmers and suppliers – to help drive lasting progress at scale. We believe our differentiated approach to sustainability will not only

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help protect the environment and address critical social needs in our communities, but also create long-term value for the business and our stakeholders.

We’re confident that the strength of our brands, our proven strategy, our continued investments, and our multi-faceted ESG agenda position us well to deliver sustainable growth and value creation for years to come. Our local-first approach enables us to stay close to our consumers – anticipating changes in their snacking needs and habits, and continuously evolving to meet their changing tastes and preferences. Most importantly, our diverse and talented team remain passionately dedicated to providing consumers the right snack, for the right moment, made the right way.

On behalf of the Mondelēz International team, thank you for your investment. We look forward to continuing engagement with you as we advance our sustainable, Purpose-driven global snacking leadership.

Best wishes,

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We firmly believe that an engaged and thriving workforce – which continuously learns from and celebrates diverse voices – is a critical engine for consumer-centric innovation.

As a Board, our broad and diverse perspectives and our experience in global public companies enable us to provide critical oversight and decision-making support across the full spectrum of strategic, operational and culture opportunities and challenges. Earlier this year, we further broadened the experience and composition of our Board with the addition of a new director, Ertharin Cousin, whose expert perspective on food policy and sustainability issues provides important insights and value as we continue advancing our strategy and ESG priorities.

After serving for more than twelve years as director, I will not stand for election at this year’s annual meeting. It has been a privilege to serve on the Board and as independent Lead Director during my tenure. My colleagues Fredric Reynolds and Peter May are also not standing for election this year. The Board joins me in thanking them for their valuable service to Mondelēz International. Following the annual meeting, Patrick Siewert will succeed me as Lead Director and will continue our commitment to strong independent oversight, provided that he is re-elected. Currently serving as Managing Director and Partner for The Carlyle Group, Patrick will bring a wealth of experience to the independent Lead Director role. He has led business operations globally and in Europe, Africa, the Middle East and Asia over the course of his tenure at Coca-Cola, Eastman Kodak and Carlyle. Patrick also has extensive governance experience and currently serves as the chair of our Finance Committee. Overall, our ten director nominees include four women, represent several national origins, vary in age from 57 to 73, and collectively bring a myriad of professional and life experiences to the Board. Two director nominees self-identify as Black and eight self-identify as white. 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, thank you for your investment and for your support of our strategy to become the global snacking leader. To learn more about the Board, as well as our governance approach, policies and oversight role, please consult this proxy statement and visit our website at www.mondelezinternational.com.

We recognize that 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 of delivering long-term, sustainable value.

Please review 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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We intend to answer all questions submitted during the Annual Meeting 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 raised that we were unable to answer 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.

Technical Assistance: Online access to the webcast will open approximately 30 minutes prior to the start of the Annual Meeting to allow time for shareholders to log in and test their device’s system. We encourage shareholders 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 14, 2022.

DATE OF DISTRIBUTION:

On or about April 6, 2022, 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, 2021 online at http://materials.proxyvote.com/609207.

On or about April 6, 2022, we expect to mail the Proxy Statement, Proxy Card and Annual Report on Form 10-K for the year ended December 31, 2021, 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 & Corporate Secretary
April 6, 2022

 

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 18, 2022

Mondelēz International, Inc.’s Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2021, are available at http://materials.proxyvote.com/609207.

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Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document. We assume no liability for any third-party content contained on the referenced websites.

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” and similar expressions are intended to identify our forward-looking statements. Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions. The information included in, and any issues identified as material for purposes of, this document may not be considered material for U.S. Securities and Exchange Commission ("SEC") reporting purposes. In the context of this disclosure, the term “material” is distinct from, and should not be confused with, such term as defined for SEC reporting purposes.

Please see our risk factors, as they may be amended from time to time, set forth in our filings with the SEC, including our most recently filed Annual Report on Form 10-K. Mondelēz International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this 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 $28.7 billion in 2021, we are leading the future of snacking with iconic global and local brands such as Cadbury, Milka and Toblerone chocolate; Oreo, belVita and LU biscuits; Halls candy; Trident gum and Tang powdered beverages. Our mission is to provide the right snack, for the right moment, made the right way.

 

 

ELECTION OF DIRECTORS – NOMINEES

The Governance, Membership and Sustainability Committee (the “Governance Committee”) recommended and the Board of Directors (the “Board”) nominated each of the ten incumbent directors listed here. The terms of all director nominees elected at the Annual Meeting will end at the 2023 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 23.

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Director Nominees at a Glance

 

 

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 32, “Compensation Governance” on page 87 and “2023 Annual Meeting of Shareholders” on page 124.

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OVERVIEW OF PAY ELEMENTS AND THEIR ALIGNMENT TO OUR STRATEGY

This table identifies and describes the primary elements of the 2021 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 Annual Incentive Plan ("AIP") and performance share unit (“PSU”) grants, can be found in the Compensation, Discussion and Analysis ("CD&A") and in Annex A.

 

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TOTAL TARGET COMPENSATION MIX

The People and 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 Long-Term Incentive Plan ("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 2021 total target compensation mix for our CEO and, on average, our other NEOs serving as executive officers on December 31, 2021. 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 ten incumbent directors. Peter W. May, Fredric G. Reynolds and Jean-François M. L. van Boxmeer will not stand for re-election at the Annual Meeting. Patrick Siewert will succeed Mr. van Boxmeer as independent Lead Director, provided he is re-elected to the Board. Effective as of the Annual Meeting, the size of the Board will be reduced to ten.

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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, diversity 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 independent 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 independent 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

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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 independent 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 with three new directors joining the Board within the last two years.

 

THE BOARD SEEKS AND VALUES DIVERSITY

The Board values diversity, equity and inclusion ("DEI"), and the Board’s diversity is an important aspect of 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, ethnicity, national origin and geography, as diversity in those characteristics promotes a breadth of views, knowledge and experience that contributes to informed and effective decision-making. The Governance Guidelines state that as part of the search process for each new director, the Governance Committee actively seeks out (and will instruct any search firm that it engages to provide) women and minority candidates to include in the pool from which director nominees are chosen. As part of its annual assessment of the Board’s composition, the Governance Committee also assesses the effectiveness of the Board’s efforts to promote diversity. The ultimate selection of directors from the candidate pool depends on a variety of factors, which are discussed under “How We Build an Experienced and Qualified Board” on page 17 and “Board Composition: Director Qualifications, Knowledge and Experience” on page 19.

The Board also embraces and encourages the Company’s DEI culture. The Board is a signatory to the Board Diversity Action Alliance (the “Alliance”), which seeks to increase the representation of racially and ethnically diverse leaders on boards of corporations, beginning with Black directors. The Alliance is also accelerating change through enhanced disclosure of directors’ race and ethnicity and annual reporting of progress on DEI. Twice per year, the Board reviews the Company’s DEI strategy, stakeholder interests, risks and progress with our SVP, Chief Global Diversity Officer. Additionally, our SVP, Chief Global Diversity Officer reports progress to the People and Compensation Committee.

The Board’s directors bring a diversity of gender, race, national original, thought and global experiences that promotes informed decision-making. Our director nominees include four women, vary in age from 57 to 73, represent several national origins and collectively bring a range of professional and life experiences to the Board’s work. Two director nominees self-identify as Black and eight self-identify as white.

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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.

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 2023 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 ten director nominees listed below under “Director Nominees for Election at the Annual Meeting.” Ms. Cousin, who was appointed to the Board in January 2022, 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 2021 Annual Meeting of Shareholders. Peter W. May, Fredric G. Reynolds and Jean-François M. L. van Boxmeer, who were re-elected by the shareholders at the 2021 Annual Meeting of Shareholders, will not stand for re-election in 2022.

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.

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The following information regarding each director nominee is as of March 14, 2022, except as otherwise noted.

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Ms. Shi served as President, Direct-to-Consumer of Nike, Inc., a global provider of athletic footwear and apparel, from July 2013 until her retirement in September 2016. From 2012 to 2013, she served as Nike’s Vice President and General Manager, Global Digital Commerce. From 2010 to 2012, she served as Nike’s Chief Operating Officer for Global Direct-to-Consumer. Ms. Shi is a principal of Lovejoy Advisors, LLC, an advisory services firm for digitally transforming consumer and retail businesses, which she founded in November 2016. Prior to joining Nike, Ms. Shi spent 24 years at McKinsey & Company, a global management consulting firm, in various roles including ten years as Director and Senior Partner. Ms. Shi has served as a senior advisor for McKinsey’s Consumer Digital Practice since August 2020. From 1981 to 1984, Ms. Shi served in various trading, institutional sales and investment banking roles at Merrill Lynch & Company.

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Director Onboarding and Education

 

We provide new directors with a substantive onboarding program. They meet with numerous Company executives to learn about different aspects of 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 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. We anticipate these activities will resume in 2022. We also regularly conduct voluntary educational sessions for directors on a variety of topics relevant to the Company. In 2021, these sessions focused on Well-being, sustainability and ESG.

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

 

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Board Leadership Structure

 

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 more fully below.

The Board may determine that the CEO should also serve as Chairman, and if it does so, the independent directors appoint an independent Lead Director with broad and substantive duties and responsibilities that have considerable overlap with those of an independent Board Chair. The independent Lead Director engages in planning and approving meeting schedules and agendas, including the review of briefing materials, and has the power to call meetings of the independent directors or the Board as needed. As part of the Board’s regular agenda, the independent Lead Director presides over executive sessions of the independent directors without the participation of the Chairman and Chief Executive Officer. The independent Lead Director also serves as a direct point of contact for shareholders, and in Fall 2021 led engagements with investors holding approximately 30% of our outstanding shares. The independent Lead Director also frequently confers with the other independent directors on various Board and Company matters. Finally, the independent directors also may assign to the independent Lead Director any additional duties over and above these fixed responsibilities as they deem appropriate.

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

 

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, each Board committee is composed entirely of independent directors and each committee has a clearly defined area of oversight regarding key risks and Company functions.

Messrs. Van de Put and van Boxmeer work 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. Under Mr. Van de Put’s leadership and the Board’s oversight, we have delivered strong total shareholder returns, outpacing most of our peers, and we have made sustained progress against our ESG goals.

 

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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 actively engaged in shareholder outreach; and • is deeply engaged in the Company’s commitment to create a positive impact on the world while driving business performance.

Mr. van Boxmeer will not stand for re-election as a director. Mr. Siewert will succeed Mr. van Boxmeer as independent Lead Director, provided he is re-elected to the Board at the Annual Meeting.

INDEPENDENT LEAD DIRECTOR ROLE AND RESPONSIBILITIES

The Board created the independent 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 independent Lead Director for a one-year term.

 

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The independent Lead Director has significant authority and responsibilities that protect shareholders’ interests by promoting strong management oversight and accountability. Under the Guidelines, the independent 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 are independent: Lewis W.K. Booth, Charles E. Bunch, Ertharin Cousin, 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 director Debra A. Crew was independent during the time that she served as a director in 2021.

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

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.

 

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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 investments in capital expenditures, mergers and acquisitions, research and development paired with dividend growth and share repurchases.

Our Board also oversees our ESG strategy, progress, alignment with purpose, stakeholder interests and strategic risk, and reviews progress on evolving our growth culture and our DEI goals. Specific responsibilities are delegated to committees. The Governance Committee oversees our ESG framework, including critical issues, KPI performance and strategic communications; consumer well-being, environmental and social sustainability; and Board ESG education and capabilities. The People and Compensation Committee oversees our DEI priorities, including hiring practices and pay equity tracking, as well as employee well-being matters and ESG KPIs for incentive plans. The Audit Committee oversees our safety priorities and goals, as well as ESG-related frameworks, disclosures, controls and assurance.

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 regularly and at least 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 2021, 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 2022.

 

 

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Board Oversight of Human Capital Management and Corporate Culture

 

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 People and 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.

Talent Development

At the executive level, the People and 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 People and Compensation Committee also focuses on plans for developing our mid-level talent into our future leaders, and we have a number of initiatives to provide these potential future leaders with the experience and exposure needed to succeed at the highest levels of our Company. Specifically, we promote employee development by reviewing strategic positions regularly and identifying potential internal candidates to fill those roles, evaluating job skill sets to identify competency gaps and creating developmental plans to facilitate employee professional growth. We invest in our employees through training and development programs, on the job experiences, coaching, as well as tuition reimbursement for a majority of our employees in the United States to promote continued professional growth. Additionally, we understand the importance of maintaining competitive compensation, benefits and appropriate training that provide growth, developmental opportunities and multiple career paths with the Company.

Diversity, Equity and Inclusion

To build on our significant progress on DEI initiatives over the last several years and to continue to further our progress, the Board uses a governance model that includes full Board reviews twice per year of the Company’s approach and response to diversity, equity and inclusion. The Board is involved and aligned with management, including our Mondelēz Leadership Team and SVP, Chief Global Diversity Officer, on these DEI commitments and initiatives.

To reinforce these commitments and initiatives, we include specific DEI metrics as a part of the strategic scorecard within our AIP for our CEO and other senior leaders. These metrics include women in leadership globally and Black representation in our U.S. management team. At the end of 2021, women held 39% of executive leadership roles (defined as the Mondelēz Leadership Team plus one level below), significantly closing the gap to the balance of the organization, and 27% of the CEO’s management leadership team roles. We are exceeding our expected annual progress on our goal to double the percentage of Black representation in U.S. management by 2024. For our U.S. leadership, Black employees held 5.1% of management roles (defined as Director and above) at the end of 2021 and 3.2% at the end of 2020, a 1.9 percentage point (“pp”) increase.

Workplace Safety

The Audit Committee oversees our safety performance and reviews with management our safety priorities and initiatives. To promote a strong culture of safety and prioritize keeping a safe working environment, we employ comprehensive health, safety and environment management policies and standards throughout the organization. In addition, we strive to continuously improve our work processes, tools and metrics to reduce workplace injuries and enhance safety.

 

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In response to the COVID-19 pandemic, we implemented strict health and safety protocols and took appropriate measures in our facilities. To support our colleagues and promote a diverse and sustainable workforce, we launched “The Right You,” a global cross-functional initiative empowering our team members to thrive both at work and at home. “The Right You” is a globally-integrated, holistic approach to employee Well-being, that provides employees with resources, tools, social support, privacy, and strategies to adopt and maintain healthy behaviors and ensures clarity for all employees on the resources that are available.

 

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 pandemic 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 the senior management team, and we anticipate that these activities will resume in 2022.

Each year the Board reviews our global employee engagement survey results. The survey provides rich data for our leaders and a benchmark to other companies, and we create action plans at global, regional, functional and managerial levels.

For additional details on talent and development initiatives, our DEI initiatives, workplace safety and wellness, and our engagement survey, please see the Human Capital section of our 2021 Form 10-K.

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.

 

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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 through anonymous reporting options and a publicized non-retaliation policy.

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.

 

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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.

 

REVIEW OF RELATED PERSON TRANSACTIONS SINCE JANUARY 1, 2021

On February 3, 2022, BlackRock, Inc. (“BlackRock”), an investment management corporation, filed a Schedule 13G/A with the SEC reporting that it was a greater than 5% shareholder of the Company as of December 31, 2021. During 2021, 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 $2.89 million during 2021. 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 2022 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.

 

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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 2021 Annual Meeting of Shareholders, non-employee directors and members of senior management have conducted comprehensive shareholder engagement. We reached out to shareholders representing approximately 50% of our outstanding shares, engaged with 22 different shareholders, representing approximately 40% of our outstanding shares, and the independent Lead Director led conversations with shareholders representing approximately 30% 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 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 People and Compensation Committee, and the Governance Committee, and it continues to inform our policies and practices. For more information on our shareholder engagement, see “Shareholder Engagement on Executive Compensation” on page 68.

Interested parties may directly contact the Board, the independent 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 independent 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 independent 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 director nominees Jane Hamilton Nielsen, Patrick T. Siewert and Michael A. Todman are “audit committee financial experts” within the meaning of SEC regulations and have financial sophistication in accordance with Nasdaq listing standards. The Board has also determined that Frederic G. Reynolds, who will not stand for re-election, is also an audit committee financial expert within the meaning of the SEC regulations. No Audit Committee member received any payments in 2021 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 2021 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 2021 and 2020 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:

 

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The Finance Committee also reviews and discusses with management:

The Governance Committee’s charter sets out its responsibilities. Among other duties, the Governance Committee’s activities 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.

 

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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.

PEOPLE AND COMPENSATION COMMITTEE INDEPENDENCE, INTERLOCKS AND INSIDER PARTICIPATION

The Board determined that all People and Compensation Committee members are independent within the meaning of the Nasdaq listing standards, including the heightened independence criteria for People and 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 People and Compensation Committee’s members are or were:

RESPONSIBILITIES

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

 

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

 

THE PEOPLE AND COMPENSATION COMMITTEE’S USE OF AN INDEPENDENT COMPENSATION CONSULTANT

The People and 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 People and Compensation Committee reviews at least annually.

Since August 2019, the People and Compensation Committee has retained Semler Brossy as its independent compensation consultant. Annually, the People and Compensation Committee reviews Semler Brossy’s engagement. During 2021, Semler Brossy provided the People and Compensation Committee advice and services, including:

 

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For the year ended December 31, 2021, Semler Brossy provided no services to Mondelēz International other than consulting services to the People and Compensation Committee regarding executive and non-employee director compensation.

At least annually, the People and 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 People and 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 PEOPLE AND 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 84 for additional detail on roles in the decision-making process.

 

THE PEOPLE AND 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 People and 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 People and 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 People and Compensation Committee of the executive leadership team. While the People and 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 recruiting, DEI and development programs.

 

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HOW THE PEOPLE AND COMPENSATION COMMITTEE MANAGES COMPENSATION-RELATED RISK

As it does each year, in 2021 the People and 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 People and 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 People and Compensation Committee’s risk analysis and agreed with the People and Compensation Committee’s conclusion.

 

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

The People and 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 Earning Per Share (“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 People and 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,

 

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Ingredients

Climate

Packaging

Social Impact

Diversity, Equity & Inclusion

Consumer Well-Being

Employee Well-Being

Signature sourcing programs: Cocoa Life, Harmony Wheat and Sustainable Palm Oil building resilient landscapes and supply chains

Combat climate change through science-based targets, using natural resources end-to-end more efficiently and renewably

Strive for net zero waste packaging through less and better packaging and improved systems aiming for a circular pack economy

Promote human rights across our value chain and enable empowered communities

Champion DEI for our colleagues, culture and communities

Empower consumers with contemporary Well-being options and choices, mindful snacking habits and portion control

Build a culture which enhances safety, physical and mental Well-being of our colleagues

 

Under the leadership of our Board, we are committed to the principle that living our values and doing business the right way can help create a future where people and planet thrive.

Our Board oversees our ESG strategy, progress, alignment with purpose, stakeholder interests and strategic risk, and reviews progress on evolving our growth culture and our diversity, equity and inclusion goals. Specific responsibilities are delegated to committees. The Governance Committee oversees our ESG framework, including critical issues, KPI performance and strategic communications; consumer Well-being, environmental and social sustainability including climate; and Board ESG education and capabilities. The People and Compensation Committee oversees our DEI priorities, including talent acquisition and development practices and pay equity tracking, as well as employee Well-being matters and ESG KPIs for incentive plans. The Audit Committee oversees our safety priorities and goals, as well as ESG-related frameworks, disclosures, controls and assurance.

We have a comprehensive governance structure that provides oversight of our ESG efforts, including our strategic areas of focus: climate change, more circular packaging solutions and social impact. This includes management team oversight on critical sustainability programming and strategy development, in addition to regular progress reviews. 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 we include sustainability metrics in the annual compensation plan for executives.

As part of our commitment to promoting accountability, many of our long-term public goals and associated action plans are developed in partnership with external experts. We consider perspectives from our ongoing engagement with shareholders and other stakeholders, and actively engage with multiple ESG ratings and indices as we advance our disclosure and promote transparency. This two-way dialogue informs our ESG approach, which defines our assessment of the social and environmental issues most significant to us. Materials and processes that guide our assessment include our ERM program for identifying, measuring, monitoring and managing risks; external affairs analysis of stakeholder and regulatory issues; information about our greenhouse gas, land and water footprint; proprietary consumer insight data; and publicly available data on societal issues, including statistics and reports from authorities, non-governmental organizations and peer companies.

 

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We have public goals, we aim to continue to make progress in our efforts, and we are committed to being transparent and effective in sharing our progress. Some of our goals include the following:

Ingredients

Climate

Packaging

Social Impact

Diversity, Equity & Inclusion

Consumer Well-Being

Employee Well-Being

By 2025, 100% of the cocoa volume for our chocolate brands sourced through Cocoa Life By 2022, 100% wheat volume needed for Europe business unit biscuits production grown under Harmony charter

By 2025, reduce end-to-end CO2e emissions by 10%, reduce absolute water usage in priority sites by 10%, and reduce food waste in internal manufacturing by 15%, over 2018 base

By 2025, 100% of packaging designed to be recyclable By 2025, 5% reduction in virgin plastic, and 25% reduction in virgin rigid plastic, over 2020 base

By 2025, Child Labor Monitoring & Remediation Systems cover 100% of Cocoa Life communities in West Africa Invest in innovative Sustainable Futures ventures and funds

By 2024, double % of women in leadership roles, over 2018 base By 2024, double % U.S. Black representation in management, over 2020 base

By 2025, 20% snacks net revenue from portion control snacks

Continued focus to reduce severity 1 safety incidents to zero By 2022, continue to advance mental and physical Well-being (100% of colleagues have access to Employee Assistance Programs)

 

Our goals are aligned to our business ambition to lead the future of snacking at Mondelēz International. Several of our ESG goals and the work that we are doing to advance ESG positively impact the U.N. Sustainable Development Goals (“SDG”) and we focus on those SDGs where we can make a bigger impact or where our signature programming, like Cocoa Life, has a direct contribution:

 

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Some of our 2021 environmental and social achievements include:

SUSTAINABLE INGREDIENTS   75%		PACKAGING INNOVATION   95%		ENVIRONMENTAL IMPACT		ACCELERATED PROGRESS THROUGH IMPACT INVESTMENTS
Cocoa volume for chocolate brands sourced through Cocoa Life   91%   Wheat volume needed for Europe business unit biscuits production grown under Harmony charter		Packaging designed to be recyclable		Announced goal of net zero greenhouse gas emissions across Scopes 1, 2 and 3 by 2050; will establish near-term emissions-reduction goals in the next two years, in line with the Science Based Targets Initiative (SBTi) “Business Ambition for 1.5°C Pledge”		Launched Impact Investing Platform Sustainable Futures   Invested in Circulate Capital’s Ocean Fund to advance plastic waste collection and recycling efforts

Every year we report our progress against our public goals. We expect to publish our next update in May 2022 as part of our 2021 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 we disclose alignment indexes to SASB and TCFD on our website. Our 2021 report will detail alignment between those standards and our current disclosures, and we will continue to consider shareholder feedback as we align our sustainability reporting with evolving standards. We monitor investor voting policies and continue to evolve our practices and disclosures. We disclose our consolidated EEO-1 statement of the race and gender of US-based employees, as well as our Board diversity data.

Reported performance against our quantitative ESG goals covers the period from January 1, 2021 to December 31, 2021, and includes manufacturing facilities under our direct and indirect control, and excludes acquisitions since 2018, unless stated otherwise. Where quantitative goals are linked to revenue, coverage is for all Mondelēz International revenue (excluding acquisitions since 2018) except Venezuela, for which results are excluded from our consolidated financial statements. Where quantitative goals are linked to operations, coverage is for all operations under the control of our integrated supply chain function (excluding acquisitions since 2018); data for external manufacturing includes estimations. Our 2015 acquisition of Enjoy Life Foods is included only in our reporting for our packaging innovation goal. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

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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 14, 2022, each director serving for at least five years met or exceeded the ownership expectation.

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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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The three pillars of our strategy:

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, operational excellence, and a winning growth culture with a “local first” commercial approach.

PERFORMANCE OVERVIEW

Our 2021 performance demonstrates that our strategic priorities and long-term strategy are working. Year-over-year highlights of our 2021 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, as well as over the past three years and the past year, our Total Shareholder Return (“TSR”) performance has outpaced most of our industry peers.

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Annualized Total Shareholder Return

 

 

We also announced an 11% dividend per share increase in the second quarter of 2021 and returned $3.9 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 $4.1 billion, resulting in Free Cash Flow of $3.2 billion for 2021. See definition of Free Cash Flow and GAAP to non-GAAP reconciliation in Annex A.

OVERVIEW OF PAY ELEMENTS

This table identifies and describes the primary elements of the 2021 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 People and 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 2021 Annual Meeting of Shareholders, more than 92% of the votes cast for our say-on-pay advisory vote were in favor of our executive compensation policies and practices. We did not make any changes to our compensation program as a result of the advisory vote.

In 2021, 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 approximately 50% of our outstanding shares. We ultimately had conversations with 22 different shareholders, representing approximately 40% of our outstanding shares. The independent Lead Director led meetings with shareholders representing approximately 30% of our outstanding shares.

Throughout our discussions, we heard broad support for our compensation programs. Shareholders continue to be supportive of our AIP and LTIP and the metrics we use to incentivize growth.

Feedback from the shareholder discussions was shared with the Board, the People and 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.

 

 

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TOTAL TARGET COMPENSATION MIX

The People and 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 2021 total target compensation mix for our CEO and, on average, our other NEOs. 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.

 

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 People and Compensation Committee follows 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). The People and Compensation Committee then considers several other factors, including individual NEO performance, level of responsibility, complexity of role, 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 People and Compensation Committee considers whether an off-cycle increase is warranted. Our NEOs did not receive any off-cycle increases in 2021.

2021 Compensation Actions

Mr. Van de Put and Mr. Zaramella each received a base salary increase in 2021 to reflect their strong performance and contributions in their current roles and to maintain market competitiveness with external peers. Ms. Stein started her employment with the Company on January 11, 2021. None of our other NEOs received a base salary increase in 2021. Base salaries for all the NEOs and increases (where applicable) are shown in the table below. After the increases for each NEO, the base salary provided to each NEO remains at or near the market median.

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Annual Incentive Plan

 

Annual Incentive Plan Award Formula

The People and Compensation Committee used the formula below to determine awards to the NEOs under the 2021 AIP.

 

Target annual incentive opportunity:

The People and Compensation Committee reviews benchmark data from our Compensation Survey Peer Group (see page 84) to align with our goal of targeting each compensation element near market median. Target annual incentive opportunities remained the same for all NEOs in 2021 except for Mr. Van de Put, whose target opportunity increased from 175% to 185% effective January 1, 2021, to align more closely with market median, and Ms. Stein, who commenced employment in January 2021.

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The graphic below describes the 2021 AIP components:

 

 

 

Financial Performance Rating (80% Weighting)

Metrics and Alignment with Strategy

The financial performance rating for Messrs. Van de Put and Zaramella and Ms. Stein is based on global performance while the financial performance ratings for Messrs. Brusadelli and Gruber 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. 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 People and Compensation Committee as targets for the AIP. The Board sets targets as stretch goals, which would also reflect above average performance within our industry if achieved. AIP targets were approved in February 2021.

2021 Targets and Corporate Financial Rating

To determine awards for Messrs. Van de Put and Zaramella and Ms. Stein, the People and Compensation Committee first evaluated the 2021 Company results against the 2021 Company performance goals listed below (U.S. dollars in millions). Overall, we achieved a below target Company performance rating of 89% under the 2021 AIP.

 

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2021 AMEA and Europe Financial Ratings

To determine the annual incentive awards for Messrs. Brusadelli and Gruber, the People and 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.

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The People and 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: 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 2021 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 goals for each KPI. Twenty percent 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. 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.

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At the end of the year, the People and Compensation Committee determined a payout percentage based on its assessment of achievement of preset annual progress goals for each KPI. The chart on the following page summarizes the KPI performance considered by the People and 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:

Annual Cash Incentive Program Decisions

After determining the 2021 Corporate, AMEA, Europe and North America financial payout percentages and strategic KPI ratings, the People and 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 2021 long-term incentive program were entirely in equity using the same mix used in 2020: 75% PSUs and 25% stock options.

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2021 Annual Equity Grants to NEOs

The table below shows the 2021 annual 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 People and Compensation Committee. Ms. Stein also received equity grants as part of her recruitment package as detailed under Other 2021 Compensation Actions on page 81.

We present the actual equity grants, including grant date fair value, in the 2021 Summary Compensation Table and 2021 GOPBA table under “Executive Compensation Tables” beginning on page 89. Our 2021 annual equity grant date was the regularly scheduled People and 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 People and 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 People and 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 People and 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. We did not make any material changes to our PSU program in 2021.

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

2021-2023 Metrics and Weighting

The table below describes the performance measures and weightings for the 2021-2023 PSUs and outlines how those measures align with our strategy. In selecting the metrics, the People and 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 People and Compensation Committee uses Organic Net Revenue Growth and Adjusted EPS Growth because these two metrics promote growth and overall financial performance.

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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:

2021-2023 Targets and Target Setting Process

For the 2021-2023 PSU grant, the target set for Annualized Relative TSR is the 55th percentile of the Performance Peer Group. The People and 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.

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 “2019-2021 Performance Cycle Results and Shares Earned” on page 80). 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 2021-2023 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. The People and Compensation Committee uses different time periods to measure performance relative to each metric in the incentive plans:

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