Marshall B. Farrer

About Marshall B. Farrer

Marshall B. Farrer (age 54) is a fifth‑generation Brown family member who has served on Brown‑Forman’s Board since 2016 and is currently Executive Vice President and Chief Strategic Growth Officer; he will resign his management role and, if reelected, assume the role of Chair of the Board following the July 24, 2025 Annual Meeting . The Board has determined he is not independent due to his management position; post‑transition, the proxy does not state a new independence determination . He has extensive international leadership experience across Europe, APAC, Global Travel Retail, and Jack Daniel’s brand management .

Past Roles

External Roles

Board Governance

• Independence: Not independent due to management role; Board elected not to determine independence for certain Brown family directors; post‑management resignation no updated determination provided .
• Committee assignments (as of Apr 30, 2025): None listed; slated to become Chair post‑meeting; Lead Independent Director is Michael A. Todman, providing counter‑balance .
• Board attendance: Board held five regular meetings in fiscal 2025; all directors attended ≥89% of aggregate Board and committee meetings; all current directors attended the 2024 Annual Meeting .
• Executive sessions: At least one executive session attended solely by independent directors in fiscal 2025 .
• Controlled company context: Brown‑Forman is a controlled company under NYSE rules (Brown family controls >50% Class A voting stock); nonetheless maintains majority independent Board and fully independent Compensation Committee .
• Governance engagement: Following the Annual Meeting, Farrer expected to co‑chair the Brown‑Forman/Brown Family Shareholders Committee, strengthening structured family–company dialogue .

Fixed Compensation

• Director pay: Employee directors (including Farrer) received no Board or committee compensation for the 2025 Board Year .
• Executive fixed pay (fiscal 2025): Base salary plus holiday bonus totaled $540,297 .

Performance Compensation

• Short‑term incentive structure: 80% tied to Company performance (underlying net sales and operating income growth) and 20% tied to individual performance; fiscal 2025 Company results were below threshold, yielding a 7% of target payout on Company metrics; the Committee applied a uniform individual performance percentage given restructuring impacts .
• Short‑term incentive (actual): $117,394 vs. $371,500 target for fiscal 2025 .
• Long‑term incentives (equity): PBRSUs (2/3 weight) and SSARs (1/3 weight) for FY25–27 cycle; PBRSU performance measured on 3‑yr TSR rank and 3‑yr adjusted operating income CAGR rank vs. S&P 500 Consumer Staples (50%/50%), payout range 50%–150% .
• FY25 grants: PBRSU target value $550,404; SSARs granted 21,329 with $45.07 exercise price (Black‑Scholes value $12.90), exercisable May 1, 2027, expiring Apr 30, 2034 .
• Prior cycle outcomes: FY23–25 PBRSU paid 50% of target; Farrer received 1,092 Class A shares on June 2, 2025; long‑term cash award paid at 137% for FY23–25 cycle totaling $360,392 (final cash LT program) .

Performance Metric Design (PBRSUs)

Other Directorships & Interlocks

Expertise & Qualifications

• Deep beverage alcohol, brand management, and global commercial leadership; extensive international operations exposure; governance experience via Brown‑Forman/Brown Family Shareholders Committee .
• Family stewardship perspective as fifth‑generation stockholder, relevant to controlled company governance .

Equity Ownership

• Beneficial ownership (as of Apr 30, 2025): 1,573 Class A shares and 47,169 Class B shares; each position represents less than 1% of the respective class .
• Outstanding/unvested awards (as of Apr 30, 2025): PBRSUs unearned—7,727 (FY2024 grant, $267,431 mkt value) and 12,732 (FY2025 grant, $443,583 mkt value); SSARs unexercisable—7,253 (2022), 12,651 (2023), 21,329 (2024) with exercise prices $73.61, $69.87, $45.07, respectively .

• Hedging/derivatives/short sales prohibited by Insider Trading Policy; pledging not disclosed; no share pledges identified for Farrer .

Governance Assessment

• Chair transition and controlled company dynamics: Farrer’s elevation to Chair (from management) reinforces Brown family stewardship; the Lead Independent Director structure is a key counter‑balance for investor confidence in oversight quality .
• Independence and committee roles: As of April 30, 2025, he is non‑independent and not on standing committees; post‑transition, oversight effectiveness will hinge on committee independence (Audit fully independent; Comp fully independent; Nominating includes one non‑independent family director) and continued robust executive sessions .
• Attendance: ≥89% attendance supports engagement; expected continuity as Chair .
• Pay‑for‑performance alignment: Executive STI paid well below target given Company underperformance; PBRSU design uses rigorous relative TSR and operating income growth vs. S&P Consumer Staples; long‑term cash LTI (final cycle) paid 137% reflecting 3‑yr relative outcomes .
• Ownership alignment: Direct holdings are modest versus director stock ownership guideline (5x Board retainer applies to non‑employee directors); as Chair, compliance will be monitored (guideline value $1,175,000 for 2025 Board Year) .
• Clawback policy: Robust SEC/NYSE‑compliant recoupment for erroneously awarded incentive pay enhances governance discipline .

RED FLAGS and Mitigants

• Controlled company influence: Brown family control and familial ties (first cousin relationship with current Chair Campbell P. Brown) can raise perceived conflict risks; mitigated by majority independent Board, independent Audit and Compensation Committees, and Lead Independent Director .
• Tax payments on expatriate assignment: Company‑paid taxes ($448,060) and significant expatriate allowances ($197,848) for Farrer may be viewed as shareholder‑unfriendly perquisite levels; context is assignment in the Netherlands during prior role .
• Related‑party transactions: No Farrer‑specific related‑party transactions disclosed; family employee roles disclosed (e.g., Keeling W. Brown) with standard compensation controls and Audit Committee oversight .

Compensation Comparator, Say‑on‑Pay, and Risk Controls

• Comparator group includes global consumer and beverage alcohol peers (e.g., Diageo, Pernod Ricard, Constellation Brands), targeting the 50th percentile .
• Say‑on‑pay support: 99% approval in 2023, indicating strong historical shareholder support for pay program design .
• Compensation risk assessment: Committee concluded programs are not reasonably likely to have a material adverse effect; no single‑trigger CIC, hedging prohibited, clawbacks in place .

Implications: Investors should monitor post‑meeting independence classification for Farrer, adherence to director ownership guidelines as non‑employee Chair, and continued reliance on independent committees and executive sessions to mitigate controlled‑company governance risks. His executive pay outcomes show discipline tied to underlying results, while expatriate‑related perquisites warrant scrutiny for optics and alignment .