Leanne D. Cunningham
About Leanne D. Cunningham
Executive Vice President and Chief Financial Officer of Brown-Forman (BF-A). Joined Brown-Forman in 1995 and was appointed CFO in July 2021; she announced plans to retire effective May 1, 2026 . Fiscal 2025 saw underlying net sales decline 2% and underlying operating income decline 3%, with Brown-Forman’s 1-year TSR at -26% versus +15% for the S&P 500 Consumer Staples Index and +12% for the S&P 500, highlighting pay-for-performance tension in a challenging year . She has 29.83 years of credited service; pension present value as of April 30, 2025 totals $3.56 million (qualified $1.02M, non-qualified $2.54M) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Brown-Forman | Executive Vice President & CFO | 2021–2026 | Led finance organization, investor relations, and capital allocation; guided long-term strategic decisions and talent development |
| Brown-Forman | Corporate Accountant | 1995 (start) | Foundation in accounting; progressed through finance, corporate strategy, and production operations |
| Brown-Forman | Senior VP roles (Shareholder Relations Officer; Commercial Finance; FP&A) | Not disclosed | Built investor and shareholder engagement; strengthened commercial finance and planning capabilities |
External Roles
- None disclosed in company filings or press releases for public-company directorships .
Fixed Compensation
| Metric | FY 2025 | Notes |
|---|---|---|
| Salary and Holiday Bonus ($) | $729,190 | Fixed cash; holiday bonus is tenure-based |
| Target Short-Term Incentive ($) | $650,000 | Target opportunity for FY 2025 |
| Actual Short-Term Incentive Paid ($) | $205,400 (paid June 15, 2025) | Reflects FY 2025 performance and uniform individual payout decision |
Performance Compensation
Short-Term Incentive (Company metrics; vest one-year)
| Metric | Weighting | Threshold | Target | Maximum | Actual FY 2025 | Resulting Payout Basis |
|---|---|---|---|---|---|---|
| Underlying Net Sales Growth YoY | 40% (half of 80% company portion) | -3% → 0% payout | 2% → 100% | 7% → 200% | -2% | Company portion outcome equated to 7% of target overall |
| Underlying Operating Income Growth YoY | 40% (half of 80% company portion) | -3% → 0% payout | 4% → 100% | 11% → 200% | -3% | Company portion outcome equated to 7% of target overall |
| Individual Performance | 20% | Committee awarded same percentage for all NEOs due to restructuring (“Building Better”) | — | — | — | Included in actual payout total ($205,400) |
Long-Term Incentives (Equity)
| Award Type | Performance Metrics | Weighting | Target Grant (FY 2025 cycle) | Vesting / Measurement | Outcome / Vesting Dates |
|---|---|---|---|---|---|
| PBRSUs (Performance-Based RSUs) | 3-year cumulative TSR vs S&P 500 Consumer Staples; 3-year adjusted operating income CAGR vs same index | 50% TSR / 50% Op Inc | $1,233,482 target for FY 2025–2027 | Payout 50%–150%; straight-line; TSR and operating income ranks determine multiplier | FY 2025 grant vests on or about June 1, 2027 |
| SSARs (Stock-Settled Stock Appreciation Rights) | Stock price appreciation above grant price | n/a | 47,799 SSARs granted at $45.07 exercise price | Become exercisable May 1, 2027; expire April 30, 2034 | No FY 2025 exercises by Cunningham |
Recently Completed Cycle Outcomes
| Award | Performance Period | Result | Shares / Cash to Cunningham |
|---|---|---|---|
| PBRSUs | FY 2023–2025 | 50% payout; TSR rank 11th percentile | 2,427 Class A shares issued June 2, 2025 |
| Long-Term Cash Incentive | FY 2023–2025 | 137% payout based on relative underlying net sales and operating income | $456,758 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of 4/30/2025) | Class A: 5,712 shares; Class B: 56,693 shares (includes 14 Class B shares in 401(k)) — each less than 1% of class |
| Unvested PBRSUs (market value) | FY 2023 grant: 14,040 shares (~$485,924) expected vest June 1, 2026; FY 2024 grant: 28,533 shares ($994,090) expected vest ~June 1, 2027 |
| SSARs Outstanding | Exercisable: historic grants (2016–2021) shown; Unexercisable: 16,125 (2022), 22,987 (2023), 47,799 (2024); strike prices $73.61, $69.87, $45.07; expiries 2032–2034 |
| Pledging / Hedging | No pledging disclosed for Cunningham; company prohibits hedging, short sales, and derivatives for insiders |
| Ownership Guidelines | No stock ownership guidelines for employees; Committee reviews NEO ownership for grant decisions |
Employment Terms
| Topic | Terms / Status |
|---|---|
| Employment agreement | None for NEOs (no fixed-term contracts) |
| Severance plan | No formal severance plan; occasional consulting agreements for retirees (e.g., used with other NEOs) |
| Clawback | SEC Rule 10D-compliant mandatory recoupment; additional 2013 policy extends to 6 years for fraud/misconduct |
| Change-in-control | Awards continue on same cycle; options/SSARs immediately vest but retain original schedule; “double-trigger” acceleration and payout at target upon qualifying termination within 1 year post-CIC |
| Termination treatment | Pro-rata current-year awards at target upon death/disability/CIC; retirement and involuntary not-for-cause remain outstanding and settle on actual performance; SSAR exercise windows adjusted per event |
| Deferred compensation | Executive Savings Plan (ESP) balance $487,668; registrant contributed $43,106; FY 2025 earnings $(49,790); one withdrawal in FY 2025 |
| Pension | Present value: Qualified $1,021,246; SERP $2,543,181; credited service 29.83 years |
| Perquisites | 401(k) match $18,198; life insurance $2,496; car allowance $14,400; other reimbursements $13,268 (incl. personal security support) |
Multi-Year Compensation (Summary)
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Salary ($) | 620,842 | 655,646 | 729,190 |
| Stock Awards ($) | 387,315 | 1,075,043 | 1,204,949 |
| SSAR Awards ($) | 333,304 | 499,967 | 616,607 |
| Non-Equity Incentive ($) | 902,001 | 937,015 | 662,158 |
| Change in Pension Value and NQDC Earnings ($) | 450,596 | 579,124 | 1,087,460 |
| All Other Compensation ($) | 38,881 | 37,906 | 48,362 |
| Total ($) | 2,732,939 | 3,784,701 | 4,348,726 |
Compensation Structure Analysis
- Mix and targets: Brown-Forman targets executive pay at ~50th percentile of a 21-company comparator group; CEO/NEO pay is majority variable/at-risk through PBRSUs and SSARs .
- Metric changes: FY 2025 short-term plan increased company performance weight to 80% and removed prior D&I metric to focus on underlying net sales and operating income .
- Equity design: PBRSUs include a 50% payout floor in lieu of time-based RSUs; payouts range 50%–150% on relative TSR and adjusted operating income, discouraging award repricing and emphasizing long-term alignment; company prohibits option/SSAR repricing and backdating .
- Say-on-pay: 2023 say-on-pay received >99% approval, indicating strong shareholder support for program design .
Vesting Schedules and Potential Selling Pressure
- PBRSUs: FY 2023 grant vested June 2, 2025; FY 2024 grant expected ~June 1, 2026; FY 2025 grant expected ~June 1, 2027 .
- SSARs: FY 2024 SSARs become exercisable May 1, 2027 and expire April 30, 2034; no FY 2025 SSAR exercises by Cunningham, reducing near-term selling pressure signals .
Equity Ownership & Pledging Risk
- Beneficial ownership is de minimis percentage; no pledging disclosed for Cunningham. Company restricts insider hedging, short sales, and derivative transactions, which supports alignment and mitigates risk of adverse trading optics .
Performance & Track Record
- FY 2025 outcomes: Underlying net sales -2% and underlying operating income -3%; company returned $420M via regular dividends; ROAIC reported at 14.4% .
- Relative TSR: -26% (1-year), -19% (3-year), -10% (5-year) vs Consumer Staples +15%, +6%, +12% and S&P 500 +12%, +12%, +16%, underscoring a challenging period during CFO tenure .
Compensation Peer Group
- Comparator group includes global beverages and consumer brands (e.g., Constellation, Diageo, Pernod Ricard, Hershey, Monster, Molson Coors) used to benchmark compensation; targets set at median (50th percentile) .
Governance, Clawbacks, and Trading Policy
- Independent Compensation Committee and consultant (WTW); robust clawback policies per SEC Rule 10D plus legacy policy; strict insider trading policy banning hedging/derivatives/short sales; no employee stock ownership guidelines, but Committee reviews NEO ownership annually .
Investment Implications
- Alignment: Heavy PBRSU/SSAR mix and strict anti-hedging policy align incentives with long-term TSR and adjusted operating income; PBRSU floor (50%) moderates downside but can dilute pure pay-for-performance in weak markets .
- Retention risk: Announced retirement effective May 1, 2026 introduces succession risk; search underway for successor, suggesting planned transition and limited near-term disruption .
- Selling pressure: No FY 2025 SSAR exercises and staggered vesting dates imply limited immediate selling pressure; potential activity may increase as FY 2024 PBRSUs vest (~June 2026) and FY 2024 SSARs approach exercisability (May 2027) .
- Performance sensitivity: Short-term incentives tied to underlying net sales and operating income, with FY 2025 underperformance producing low payouts; long-term cash component for 2023–2025 paid at 137%, indicating better relative multi-year fundamentals vs industry peers despite recent TSR underperformance .
