Michael T. Walters
CAL-MAINE FOODSAbout Michael T. Walters
Michael T. Walters, age 54, is Vice President – Operations and Chief Operating Officer (COO) of Cal-Maine Foods. He has served as a Vice President since July 11, 2011 and was appointed COO on March 24, 2023; he has been with the Company since 1997 . During fiscal 2025, Cal-Maine delivered net sales of $4.3 billion and net income of $1.2 billion with dozens sold up 11.8%, reflecting strong execution in a constrained supply environment; cumulative TSR since June 1, 2020 reached 264.77 versus 118.82 for the peer group . The company’s third quarter FY25 highlighted operational initiatives under management oversight: record dozens sold, a 14% increase in layer hens, and multiple capacity expansions despite HPAI-related disruptions .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cal-Maine Foods | Vice President – Operations | 2011–present | Operational leadership, commodity sourcing/logistics under COO/Operations functions; tenure supports continuity and scale execution |
| Cal-Maine Foods | Chief Operating Officer | 2023–present | Oversees operations during expansion and HPAI recovery; supports production ramp from acquisitions and capacity additions |
| Cal-Maine Foods | Employee (prior roles) | Since 1997 | Long tenure builds institutional process knowledge and execution capability |
Fixed Compensation
Multi-year disclosed compensation for Walters:
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Salary ($) | 189,938 | 248,659 | 296,154 |
| Bonus ($) | 278,942 | 230,481 | 555,481 |
| Stock Awards (Grant-Date Fair Value, $) | 61,458 | 91,700 | 116,128 |
| All Other Compensation ($) | 65,734 | 133,943 | 152,512 |
| Total Compensation ($) | 596,072 | 704,783 | 1,120,275 |
Key design points:
- Base salary increases approved effective January 1, 2025, with Walters up 18% reflecting peer benchmarking (still below the 25th percentile post-increase) .
- Annual bonus target for Walters equals 50% of the sum of base salary plus prior-year bonus; 50% of the bonus is tied to profitability measured by pre-tax profit of at least five cents per dozen produced, with discretion for adjustments .
- For FY25, the Compensation Committee approved payout of 200% of target bonus for named executive officers given record performance .
Performance Compensation
Annual Bonus Structure (FY25)
| Metric | Weighting | Target/Threshold | Actual Outcome | Payout | Vesting |
|---|---|---|---|---|---|
| Profit per dozen produced (pre-tax) | 50% | Full credit at ≥ $0.05/dozen | Record profitability; dozens sold up 11.8% YoY | 200% of target (for NEOs) | Cash (annual) |
| Individual performance (CEO discretion) | ~50% | Qualitative evaluation | All executives “performed well and met expectations” | 200% of target (for NEOs) | Cash (annual) |
Long-Term Equity: RSAs
| Grant Date | Shares Granted | Grant-Date Fair Value ($) | Vest Date | Vesting Rules |
|---|---|---|---|---|
| Jan 13, 2023 | 1,136 | — | Jan 13, 2026 | RSAs vest fully on third anniversary; accelerate on death, disability, or change in control; retirement vesting at Committee’s discretion |
| Jan 12, 2024 | 1,670 | 102,989 (market value at FY24 year-end) | Jan 12, 2027 | As above |
| Jan 14, 2025 | 1,056 | 116,128 (grant-date) | Jan 14, 2028 | As above |
Notes: FY25 grant-date fair value was based on $109.97 stock price; FY24 RSAs were granted at $54.91 .
Long-Term Equity: PSUs (Effective June 1, 2025)
| Metric | Weighting | Performance Period | Payout Range | Vesting |
|---|---|---|---|---|
| Cumulative adjusted EBITDA | 50% | 3 years starting FY26 | 0–150% of target | Service through period plus performance; settles in common shares |
| Relative TSR vs peer group | 50% | 3 years starting FY26 | 0–150% of target | As above |
Equity Ownership & Alignment
| Ownership Detail (as of Aug 11, 2025) | Amount | Notes |
|---|---|---|
| Total beneficial ownership (shares) | 12,972 | Less than 1% of outstanding |
| KSOP shares | 7,202 | Included in beneficial ownership |
| Unvested restricted common stock | 3,862 | Included in beneficial ownership; comprises 1,136 (2023), 1,670 (2024), 1,056 (2025) |
| % of shares outstanding | <1% | Based on 48,497,477 shares outstanding |
Alignment policies:
- Executive stock ownership guidelines: CEO 5x salary, CFO 3x, other executives 2x salary; all named executive officers exceeded or were in compliance as of the record date .
- Clawback: Nasdaq-compliant compensation recoupment policy applicable to incentive-based compensation .
- Anti-hedging: Insiders prohibited from hedging or monetization transactions (e.g., collars, swaps, exchange funds) .
- Pledging: Prohibited except for pre-existing pledges as of July 23, 2024 or approved non-margin loans with demonstrated financial capacity to repay without resorting to pledged securities . No pledging disclosed for Walters .
Insider activity:
- One late Form 4 was filed by Walters on August 7, 2024 related to a sale on July 31, 2024 .
Employment Terms
Severance and Change-in-Control Agreements (effective April 8, 2025)
Term through May 31, 2030, auto-renews annually unless non-renewed in writing .
| Scenario | Cash Severance | Bonus Component | Benefits | Notes |
|---|---|---|---|---|
| Termination without cause / good reason (pre-CIC) | 1.5x (base salary + 3-year avg bonus) | Plus Termination Bonus equal to 3-year avg bonus | Benefit continuation up to 3 years or earlier re-employment | Release required; no excise tax gross-up |
| Termination without cause / good reason (within 2 years post-CIC) | 2.0x (base salary at termination or pre-CIC if higher + 3-year avg bonus) | Plus Termination Bonus equal to 3-year avg bonus | Benefit continuation as above | Higher multiple post-CIC |
Quantified potential payments at FY25 year-end:
| Scenario | Severance Payments ($) | RSAs Accelerated ($) | DC Plan Accelerated ($) | Total Notes |
|---|---|---|---|---|
| Termination without cause or with good reason (pre-CIC) | 827,450 | — | — | Excludes RSAs (forfeited unless retirement, death, disability or CIC) |
| Change in control (no termination) | — | 370,482 | 212,258 | RSAs & DC Plan vest/accelerate |
| CIC-related termination without cause or with good reason | 1,369,785 | — | — | Includes estimated benefits continuation |
Other programs:
- Deferred Compensation Plan: Company contributions for Walters were $41,282 in FY24 and $49,500 in FY25; aggregate balance $160,580 (FY24) and $212,258 (FY25) with plan investments tracked to specified funds .
- Perquisites: FY25 included auto ($2,550), club dues ($3,511), life insurance premiums ($1,745), medical reimbursement ($10,590), KSOP contribution ($10,985), relocation benefits ($73,631); total “All Other” $152,512 .
Performance & Track Record
- FY25 context: Net sales $4.3B vs $2.3B in FY24; net income $1.2B vs $277.9M in FY24; dozens sold up 11.8% YoY .
- Q3 FY25 operations: record dozens sold; average selling price per dozen rose to $4.060; 14% increase in layer hens; 24% increase in chicks hatched; feed cost per dozen down 9.6% YoY; progress on HPAI recovery and capacity additions (Dexter MO, ISE America assets, Deal-Rite Feeds mills) .
- TSR: Value of an initial $100 investment since June 1, 2020 rose to $264.77 in 2025 vs peer group $118.82 .
Compensation Benchmarking and Peer Group
Mercer provided compensation benchmarking in 2024 and 2025; FY25 changes included instituting PSUs and formal severance/CIC agreements . Peer group (examples) includes B&G Foods, Boston Beer, Darling Ingredients, Flowers Foods, Lamb Weston, Post Holdings, Treehouse Foods, Vital Farms, among others .
Risk Indicators & Red Flags
- DOJ civil investigative demand regarding industry egg price increases; Company cooperating .
- Late Form 4 by Walters (Aug 7, 2024) related to sale on July 31, 2024 indicates potential short-term selling pressure, though magnitude undisclosed .
- Anti-hedging enforced; pledging tightly constrained to reduce misalignment risk .
- No tax gross-ups; double-trigger cash severance post-CIC enhances alignment vs single-trigger .
Investment Implications
- Alignment improving: Introduction of PSUs with 50/50 weighting on cumulative adjusted EBITDA and relative TSR ties upside to durable financial and market outcomes, reducing purely time-based equity reliance .
- Moderate retention risk: Walters’ severance provides meaningful cash protection (up to ~$1.37M post-CIC), plus accelerated vesting of RSAs/DC Plan upon CIC, supporting continuity through potential strategic changes .
- Ownership skin-in-the-game: Beneficial ownership (12,972 shares) and compliance with 2x salary ownership guidelines support alignment; low overall % of shares means incentives rely more on performance equity and cash outcomes .
- Near-term selling pressure: The late Form 4 sale in July 2024 signals some liquidity activity; combined with active repurchase program authorization and founder-family secondary/repurchase in April 2025, monitor insider activity around windows and liquidity events .
- Execution confidence: FY25 operational metrics and pricing dynamics demonstrate robust operations under challenging HPAI conditions; COO oversight of expansions and integrations is a lever for sustaining elevated profitability in FY26 and beyond, augmented by PSUs’ performance ties .