Doug Sutton
About Doug Sutton
Doug Sutton is Chief Manufacturing Officer (NEO) of Smithfield Foods (SFD). He has 21 years of credited service under Smithfield’s salaried pension plan and 24 years under the supplemental pension plan, indicating a long-tenured operator focused on manufacturing execution . As of April 10, 2025, he beneficially owned 5,000 SFD shares (<1%), with WH Group’s SFDS UK Holdings Limited controlling ~92.7% of shares post-IPO . Company performance context during his current tenure: Q3 FY2025 net sales grew 12.4% YoY to $3.7B, adjusted operating margin was 8.3%, and adjusted diluted EPS was $0.58; nine-month net sales rose 10.9% YoY to $11.3B with adjusted diluted EPS of $1.72 .
Fixed Compensation
2024 Summary Compensation (revised)
| Component | Amount (USD) |
|---|---|
| Base Salary | $1,000,000 |
| Discretionary Bonus (paid Q1’25) | $2,000,000 |
| Non-Equity Incentive Plan Compensation | $2,610,000 |
| Change in Pension Value & Nonqualified Deferred Compensation Earnings | $2,065,104 |
| All Other Compensation | $28,843 |
| Total | $7,703,947 |
2024 Perquisites Detail
| Perquisite | Amount (USD) |
|---|---|
| 401(k) Contributions | $17,231 |
| Personal Use of Aircraft | — (none disclosed) |
| Personal Use of Car (leased automobile provided) | $15,782 |
| Insurance Premiums (umbrella) | $812 |
| Tax Gross-ups/Reimbursements | — (none disclosed) |
| Referral Bonus | $1,000 |
Performance Compensation
Annual Cash Incentive Program Design (FY2024)
| Item | Details |
|---|---|
| Target Bonus Opportunity (% of Salary) | 300% for Doug Sutton |
| Primary Performance Metric | North America Net Income |
| Threshold (NA Net Income) | $600M → 36% payout |
| Target (NA Net Income) | $1,000M → 100% payout |
| Stretch | >$1,000M → >100% payout via excess formula |
| Payout on Excess Above Target | 0.3% of amount above $1B (Sutton-specific) |
| Maximum Cap | None (no maximum payout cap) |
| Discretionary Bonus Clawback | 50% repay if departure within 1 year; 25% if within 2 years |
2024 Outcomes (Paid/Accrued)
| Metric | Target | Actual Payout |
|---|---|---|
| Target Bonus (% salary) | 300% | $2,610,000 (actual non-equity incentive) |
| Discretionary Bonus | n/a | $2,000,000 (subject to repayment provisions) |
Equity Awards (Post-IPO – Granted January 27, 2025)
| Attribute | Details |
|---|---|
| Plan | 2025 Omnibus Incentive Plan |
| Grant Mix | 50% RSUs / 50% Stock Options |
| Grant Date | January 27, 2025 |
| Option Exercise Price | $20.00 (IPO price) |
| Vesting | Equal annual installments over five years from grant date |
| NEO Aggregate Grants | 330,000 RSUs; 2,160,933 options (individual allocation not disclosed) |
Note: No equity awards existed pre-IPO; therefore no FY2024 option exercises/stock vesting and no outstanding FY2024 awards .
Equity Ownership & Alignment
| Ownership (as of April 10, 2025) | Shares | % of Class |
|---|---|---|
| Doug Sutton | 5,000 | <1% |
- Anti-pledging and anti-hedging policies apply to senior executives and directors, and a compensation recoupment (clawback) policy applies to executive officers .
- Clawback definitions and scope for incentive-based compensation tied to financial reporting measures (including stock price/TSR) are codified in the 10-K (restatement-based recovery framework) .
- Executive stock ownership guidelines not disclosed for NEOs; director program fosters equity via RSUs, but executive guidelines not specified .
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | None; NEOs are not party to individual employment agreements |
| Executive Severance Plan (effective IPO) | Qualifying termination (without cause or for good reason): base salary continuation for 18 months (CEO: 24 months); prorated bonus for year of termination based on actual company performance; COBRA subsidy to active-employee rate up to 18 months |
| Change-in-Control (Severance) | If termination within 2 months before or within 2 years after a change in control, prorated bonus based on target for year of termination |
| Equity Award Treatment | All outstanding awards vest in full upon death or change in control; awards remain eligible to vest per schedule following “retirement” or involuntary termination without cause (per 2025 Plan forms) |
| Restrictive Covenants | Participation conditioned on customary non-disclosure, non-compete, non-solicit, and non-disparagement covenants (subject to local law) |
Company Performance Context (FY2025 to date)
| Metric | Q3 FY2025 | 9M FY2025 |
|---|---|---|
| Net Sales ($) | $3.7B; +12.4% YoY | $11.3B; +10.9% YoY |
| Operating Profit | $310M | $892M |
| Adjusted Operating Profit | $310M (Q3 indicates same) | $934M |
| Adjusted Operating Margin | 8.3% | 8.3% |
| Diluted EPS (Continuing Ops) | $0.63 | $1.68 |
| Adjusted Diluted EPS (Continuing Ops) | $0.58 | $1.72 |
Compensation Structure Analysis
- High at-risk cash mix in 2024: Target annual incentive 300% of salary; actual non-equity payout $2.61M, plus discretionary $2.0M subject to repayment if departure within 1–2 years, reinforcing retention through clawback-like provisions .
- Introduction of long-term equity post-IPO with five-year vesting and $20 strike aligns executives with shareholder value creation while deferring realizable value; individual award sizes for Sutton not disclosed (NEO aggregate provided) .
- No maximum cap on cash incentive payouts; payout curves include above-target participation in excess NA Net Income (Sutton 0.3%), increasing upside exposure to corporate profit outperformance .
- Anti-pledging/hedging and formal clawback regime reduce misalignment/financial reporting risk; beneficial ownership for Sutton is modest (5,000 shares), with alignment more driven by newly granted RSUs/options .
Investment Implications
- Retention risk: Moderated by severance (18 months salary continuation, prorated bonus) and discretionary bonus repayment terms; equity vesting continues on retirement/without-cause termination, reducing binary separation risk but still encouraging tenure through five-year vest schedule .
- Trading signals: Five-year RSU/option vesting creates potential periodic incremental supply beginning on the first anniversary of the Jan 27, 2025 grant; anti-pledging reduces forced-selling risk; modest current share ownership suggests future alignment will hinge on equity award vesting rather than large pre-existing holdings .
- Pay-for-performance alignment: Cash plan tied to North America Net Income with uncapped upside and explicit participation in above-target profits (0.3% of excess above $1B for Sutton) supports linkage to profitability; post-IPO equity adds longer-duration alignment to TSR/stock price outcomes through options and RSUs .
- Governance and risk: Presence of anti-hedging/pledging and clawback rules, plus single-trigger vesting on change-in-control for equity and defined severance economics, provide clarity; lack of disclosed executive ownership guidelines is a minor governance gap relative to best practice benchmarks .