Michael Smith

About Michael Smith

Michael J. Smith, 48, has served as President and Chief Executive Officer (PEO) of Lamb Weston and as a director since January 3, 2025. He previously was COO (May 2023–Jan 2025) and held senior commercial and strategy roles at Lamb Weston and Conagra; he holds a BA in marketing communications (BYU) and an MBA (SMU) . FY2025 results under his leadership included net sales of $6,451.3 million and Adjusted EBITDA of $1,220.5 million, with AIP paying 0% against targets as both net sales and Adjusted EBITDA missed threshold; the CEO “compensation actually paid” (CAP) was negative for FY2025, and the $100 TSR index stood at $91 vs peer at $113 at fiscal-year end . The Board increased the CEO stock ownership guideline to 600% of base salary and emphasizes at‑risk pay (87% of CEO target pay), with longer-term incentives tied 50% to Adjusted EBITDA growth and 50% to relative TSR .

Past Roles

External Roles

Fixed Compensation

Notes:

• FY2025 AIP metrics (50% net sales, 50% Adjusted EBITDA) paid 0% as both results were below threshold .

Performance Compensation

Annual Incentive Plan (AIP) – FY2025

Design and adjustments: pre-determined adjustments to isolate underlying performance; no adjustments were made to FY2025 AIP awards .

Long-Term Incentive Plan (LTIP)

• Mix and vesting: 60% PSAs (3-year performance), 40% RSUs (3-year ratable vesting); PSAs measured 50% on relative TSR and 50% on Adjusted EBITDA growth .
• FY2025 CEO target pay mix at appointment: At-risk 87% (AIP 19%, RSUs 28%, PSAs 40%) .
• Timing: Annual grants approved in July, post-10-K; no options granted around earnings or MNPI windows .

PSA Outcomes (most recent completed cycle):

Option/RSU treatment on separation and CoC: double-trigger vesting for options and RSUs upon CoC and qualifying termination; detailed pro-rata and accelerated vesting by scenario set in plan documents .

Equity Ownership & Alignment

Note: Individual directors and executive officers each own <1% of shares outstanding; LW had 139,354,724 shares outstanding as of Aug 1, 2025 .

Vesting and realized equity (FY2025): 23,511 shares vested for Smith (value realized $1,324,847); no options exercised .

Deferred compensation (FY2025): Executive contributions $48,600; registrant contributions $36,450; aggregate balance $1,171,003; no above‑market earnings .

Employment Terms

• Employment status: U.S. executive officers are employed “at will”; no individual employment contracts or severance agreements; compensation plans include risk mitigators and clawbacks .
• Clawbacks: Dodd‑Frank Rule 10D‑1 recoupment plus broader legacy clawback for detrimental conduct .
• Hedging/pledging: Prohibited for directors and executive officers .

Change-of-Control (COC) Plan (double trigger):

• Tier I (Smith) benefits upon CoC + qualifying termination: 3x (base salary + higher of target bonus or highest of prior 3‑year actual), pro‑rated AIP for year of termination, COBRA differential for 36 months, full acceleration of service‑based equity, and performance awards at target or actual if determinable .

Potential payments if terminated at FY2025 year-end assumptions:

Board Governance (Director Service, Committees, Independence)

• Board service: Director since Jan 2025; employee director (not independent) .
• Committee roles: None (Audit, Compensation, and N&CG committees are fully independent; Smith is not a member) .
• Board leadership/independence: Independent Chairman (Bradley A. Alford); 12 of 13 directors independent; regular executive sessions without management .
• Attendance: Board held 14 meetings in FY2025; each director attended at least 75% of meetings in their service period .
• Director compensation: Employee directors receive no additional director pay; separate stock ownership requirements for non‑employee directors .

Dual-role implications:

• Concentration risk mitigated by independent chair, majority-independent board, and independent committee structures; Smith’s non‑independent status noted per NYSE rules .

Investment Implications

• Pay-for-performance alignment: FY2025 AIP paid 0% as both net sales and Adjusted EBITDA were below threshold; PSAs are majority of LTIP with 3‑year horizons; recent PSA cycle paid 116.7%, reflecting TSR at median+ and EBITDA AAGR above target, while in‑flight EBITDA tranches did not earn—suggests balanced but tight calibration and potential variability in realized equity .
• Retention and selling pressure: 600% CEO ownership guideline and 75% net-share retention until compliant, combined with no pledging/hedging, reduce near‑term selling pressure; meaningful unvested RSUs/PSAs and unexercised options further bind retention .
• Change-of-control economics: As a Tier I participant, Smith’s double‑trigger COC benefits (3x cash plus equity acceleration and benefits) are market‑standard for size/sector and support objectivity in strategic transactions; at FY2025 marks, potential COC package totaled ~$11.4 million .
• Governance quality: Independent chair, fully independent key committees, clawbacks, and prohibitions on hedging/pledging mitigate governance risk of CEO-director dual role; employee directors receive no board fees, limiting conflicts .
• Execution track record: FY2025 was challenged (Adjusted EBITDA $1,220.5m; TSR at $91 vs peer $113), but management initiated restructuring and a cost‑savings plan; H2 FY2025 showed a return to growth with “Focus to Win” actions aimed at FCF and ROIC in future incentives—monitor FY2026 AIP/ROIC metrics and any insider Form 4 activity near vesting dates for signals .