A. Ryals McMullian
FLOWERS FOODSAbout A. Ryals McMullian
A. Ryals McMullian is Chairman and Chief Executive Officer of Flowers Foods (FLO), age 55, director since 2019; he became CEO in May 2019 and Chairman in May 2023, after progressing through COO, Chief Strategy Officer, and M&A/Legal roles at the company, with prior experience at Jones Day, a global law firm . Education not disclosed in the proxy statement; core credentials include extensive M&A execution (led the acquisitions of Dave’s Killer Bread and Canyon Bakehouse) and governance/legal expertise drawn from senior legal roles at Flowers and Jones Day . Under his leadership, fiscal 2024 delivered net sales of $5.103B, net income of $248.1M, adjusted EBITDA of $538.5M, and adjusted EPS of $1.28, with management highlighting margin expansion from efficiency initiatives; the company targets long‑term growth of net sales 1–2%, adjusted EBITDA 4–6%, and adjusted EPS 7–9% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Flowers Foods | Chairman & Chief Executive Officer | May 2023 – present | Combined CEO/Chair role; board cites unified strategic leadership with independent presiding director oversight . |
| Flowers Foods | President & Chief Executive Officer | May 2019 – May 2023 | Led portfolio strategy and M&A; drove acquisitions of Dave’s Killer Bread and Canyon Bakehouse . |
| Flowers Foods | Chief Operating Officer | Jun 2018 – May 2019 | Operational leadership bridging strategy to execution . |
| Flowers Foods | Chief Strategy Officer | May 2017 – Jun 2018 | Set corporate strategy and portfolio priorities . |
| Flowers Foods | VP M&A & Deputy General Counsel | 2015 – 2017 | Led major brand acquisitions and legal structuring . |
| Flowers Foods | Various legal roles | 2003 – 2015 | Corporate legal, governance, and compliance foundation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Jones Day (global law firm) | Attorney (prior role) | Not disclosed | Legal background cited; no other public boards . |
| Other public company boards | — | — | None disclosed . |
Fixed Compensation
- Base salary rate increased to $1,000,000 effective March 31, 2024 (from $955,000 at end of 2023) .
- CEO received no additional pay for serving as Chairman .
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 917,654 | 954,289 | 987,884 |
| All Other Compensation ($) | 185,493 | 258,937 | 220,540 |
| Nonqualified Deferred Comp “above‑market” earnings ($) | 53,851 | 53,133 | 50,135 |
Performance Compensation
- Annual cash incentive target: 125% of base salary; 2024 program metrics: Adjusted EBITDA (70%) and Net Revenue (30%); individual performance modifier ±20% (not used for 2024) .
- 2024 actual payout achieved 96.6% of target, yielding CEO non‑equity incentive of $1,193,915 .
| Annual Incentive Metric (2024) | Weight | Threshold (30% payout) | Target (100%) | Max (200%) | Actual Payout % | Weighted Payout % |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 70% | 85% of goal | 100% | 115% | 97.9% | 68.53% |
| Net Revenue | 30% | 90% of goal | 100% | 110% | 93.4% | 28.02% |
| Final Payout | — | — | — | — | 96.6% | 96.6% |
- Long‑term incentives (LTI) shifted in 2024 to 70% Performance Shares (50% ROIC PSUs, 50% TSR PSUs) and 30% time‑based RSUs; vesting/performance measured over multi‑year periods (ROIC: 12/31/2023–1/2/2027; TSR: 1/1/2024–12/31/2026) with vest by no later than March 15, 2027 .
- 2024 CEO LTI target value $5,491,252; actual grant date fair value recorded $5,492,059 .
| 2024 Equity Grants (as of 12/31/2023 grant date) | Target # Shares | Vesting/Performance Terms |
|---|---|---|
| ROIC‑based Performance Shares | 80,920 | Payout 0–150% based on ROIC minus WACC: <150 bps=0%; 150 bps=50%; 300 bps=100%; ≥450 bps=150% (linear interpolation) . |
| TSR‑based Performance Shares | 80,920 | Relative TSR vs food industry peer group over 2024–2026; payout per plan . |
| Time‑based RSUs | 69,360 | Time‑based vesting; 2024 mix introduced RSUs at 30% of LTI . |
Multi‑year CEO compensation (total and mix):
| Component | FY 2022 ($) | FY 2023 ($) | FY 2024 ($) |
|---|---|---|---|
| Stock Awards | 4,360,518 | 4,452,212 | 5,492,059 |
| Non‑Equity Incentive Plan | 737,843 | 674,469 | 1,193,915 |
| Total Compensation | 6,255,359 | 6,393,039 | 7,944,533 |
Performance metric design signals:
- 2024 annual plan widened EBITDA performance scale; continued emphasis on Adjusted EBITDA and Net Revenue, with capped payouts and no discretionary modifier used in 2024 .
- 2024 LTI changes increased time‑based RSUs (lower risk vs 100% PSUs used previously), and updated “retirement” definition (age ≥55 and age+service ≥65, generally with 6 months’ notice) .
Equity Ownership & Alignment
- Beneficial ownership: 1,363,229 shares; percent of class less than 1% (denoted “*”) as of March 6, 2025 .
- Executive stock ownership guideline: 6× base salary for CEO; executives must retain at least 75% of net shares from vested awards until meeting guideline; Named Executives are in compliance/on track or have an approved waiver .
- Anti‑hedging policy for executives and directors; multiple clawback policies including a 2023 policy complying with NYSE/SEC requirements .
- Deferred compensation: CEO contributed $251,735 in 2024; company credited $199,136; above‑market earnings $205,877; year‑end EDCP balance $3,260,253 .
| Ownership and Deferral Snapshot | Value |
|---|---|
| Shares beneficially owned | 1,363,229 |
| CEO ownership guideline | 6× base salary |
| EDCP balance (12/28/2024) | $3,260,253 |
| 2024 EDCP “above‑market” earnings | $205,877 |
Note: The proxy discloses anti‑hedging but does not disclose any pledging by the CEO; no pledging details were found in the proxy .
Employment Terms
- No employment agreement; company states “no employment agreements” in executive comp practices .
- Change‑of‑Control (CoC) Plan: double‑trigger; CEO receives 3× (base salary + target annual cash incentive) cash severance, plus 18 months’ health benefits and up to $25,000 outplacement; “best‑net” cutback applies (no excise tax gross‑up) .
- Restrictive covenants: one‑year non‑compete; two‑year non‑solicit; perpetual confidentiality/trade secret protections; non‑disparagement .
- Estimated CoC payout (assuming event on 12/27/2024 at $20.47 share price): Cash $6,750,000; equity vesting $8,473,972; other benefits $59,900; total $15,283,872 .
- Retirement/vesting: 2024 awards include updated retirement eligibility and notice provisions; 2024 PSU measurement through FY2026/early 2027; RSUs time‑vest over the cycle .
Board Governance (director service, roles, and dual‑role implications)
- Board service history: Director since 2019; currently Chairman; not independent (inside director as CEO); serves on no board committees .
- Leadership structure: Combined CEO/Chairman since 2023 with an Independent Presiding Director (Thomas C. Chubb III) vested with meaningful authorities (approves board materials/agendas, presides executive sessions, liaises with independent directors, engages shareholders) .
- Board independence/attendance: 10 of 11 director‑nominees are independent; board held 8 meetings in fiscal 2024; no incumbent director attended less than 75% of required meetings .
- Governance safeguards: Fully independent committees; robust stock ownership guidelines; multiple clawbacks; anti‑hedging policy .
- Shareholder sentiment: 2024 say‑on‑pay support exceeded 98% ; a 2025 shareholder proposal sought an independent chair (board recommended AGAINST, citing flexibility and independent presiding director safeguards) .
Director Compensation (as applicable to dual roles)
- As an employee director, the CEO received no additional compensation for board service or chair role in 2024 .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approval at 2024 annual meeting: >98% support; committee continued applying similar compensation principles in 2024 .
- Ongoing shareholder engagement process overseen by the board; independent presiding director participates as appropriate .
Compensation Committee Analysis and Peer Benchmarking
- Compensation & Human Capital Committee (independent): Chair Margaret G. Lewis; members Casey, Chubb, Stith; uses Meridian as independent consultant; annual independence assessments found no consultant conflicts .
- Benchmarking: Uses Willis Towers Watson survey data (food and general industry; size‑adjusted to Flowers’ revenue) rather than a fixed named peer group for executive pay opportunity targeting around the size‑adjusted 50th percentile .
- Pay practices: double‑trigger CoC vesting; capped payouts; multiple performance measures; no option repricing; no income tax or excise tax gross‑ups; no significant perquisites .
Performance & Track Record
- 2024 performance: Net sales $5.103B; net income $248.1M; adjusted EBITDA $538.5M; management cites margin expansion from efficiency initiatives and moderating input costs .
- Pay vs Performance disclosure links compensation actually paid to TSR, net income, and adjusted EBITDA; 2024 value of a $100 investment in Flowers TSR stood at $112.71 (peer group $113.91) .
- Strategic priorities include brand focus, margin prioritization, and disciplined M&A; 2025 proxy notes the 2025 acquisition of Simple Mills to expand better‑for‑you/snacking exposure and growth/margin prospects .
Risk Indicators & Red Flags (from proxy)
- Clawback policies and anti‑hedging policy in place; no tax gross‑ups; double‑trigger CoC severance; independent committees .
- Related party transactions disclosed for a director’s family and CFO family member; none involving the CEO .
- Insider trading policy disclosed; no pledging disclosure identified in the proxy .
Multi‑Year CEO Compensation Summary
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 917,654 | 954,289 | 987,884 |
| Stock Awards ($) | 4,360,518 | 4,452,212 | 5,492,059 |
| Non‑Equity Incentive ($) | 737,843 | 674,469 | 1,193,915 |
| Change in Pension/EDCP above‑market earnings ($) | 53,851 | 53,133 | 50,135 |
| All Other Compensation ($) | 185,493 | 258,937 | 220,540 |
| Total ($) | 6,255,359 | 6,393,039 | 7,944,533 |
Investment Implications
- Pay‑for‑performance alignment: 2024 incentives were tightly tied to Adjusted EBITDA and Net Revenue (96.6% payout), while LTI continues to emphasize ROIC vs WACC and relative TSR; the 2024 addition of 30% RSUs modestly reduces performance risk and may smooth realized compensation through cycles .
- Retention and selling pressure: Multi‑year PSU cycles run through 2026/early 2027 with vest by March 15, 2027; this schedule concentrates potential share delivery in 2027 (watch Form 4s approaching vest dates for supply signals) .
- Alignment and governance: CEO ownership ≥ guideline (committee notes compliance/on‑track) and clawbacks/anti‑hedging reduce misalignment risk; combined CEO/Chair structure is counterbalanced by an independent presiding director and fully independent committees, though investors advocating for an independent chair raised a 2025 proposal the board opposed .
- Change‑of‑control economics: Market‑standard, double‑trigger with 3× cash multiple for CEO and no gross‑up; estimated CEO CoC package ~$15.3M as of 12/27/2024 underscores potential event‑driven incentives and cost considerations in strategic scenarios .
- Execution track record: 2024 showed margin expansion and higher adjusted EBITDA and net income with management signaling continued portfolio optimization and cost discipline; sustained performance against ROIC‑over‑WACC and TSR hurdles will be key to realizing PSU value and supporting long‑term TSR .