Keller Watts
About Keller Watts
Keller D. Watts is Chief Business Officer and a named executive officer at Smithfield Foods (SFD). He participates in the company’s pension programs with 28 credited years in the Salaried Pension Plan and 31 in the Supplemental Pension Plan, indicating long-tenured experience at Smithfield . SFD became publicly traded on January 29, 2025; post-IPO, equity incentives were adopted to increase long-term alignment . Company performance context: FY2024 revenues ~$14.142B*, EBITDA ~$1.358B*, and net income ~$953M*, reflecting margin recovery versus FY2023; diluted EPS was ~2.055* (continuing ops) for FY2024*. Values retrieved from S&P Global.
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $16,199,000,000* | $14,640,000,000* | $14,142,000,000* |
| EBITDA ($USD) | $1,204,000,000* | $604,000,000* | $1,358,000,000* |
| Net Income ($USD) | $870,000,000* | $17,000,000* | $953,000,000* |
| Diluted EPS - Continuing Ops ($USD) | ~$2.10* | ~-0.363* | ~2.055* |
| EBIT ($USD) | $847,000,000* | $262,000,000* | $1,022,000,000* |
| EBITDA Margin (%) | 7.43%* | 4.13%* | 9.60%* |
| Net Income Margin (%) | 5.37%* | 0.12%* | 6.74%* |
Values retrieved from S&P Global.
Fixed Compensation
| Component (FY2024) | Amount/Detail |
|---|---|
| Base Salary | $1,000,000 |
| Target Annual Cash Incentive | 400% of base salary |
| Actual Non-Equity Incentive (AIP) | $3,480,000 |
| Discretionary Bonus | $2,000,000; subject to repayment if resignation/for-cause: 50% if <1 year post-payment, 25% if >1 and <2 years |
| Total Compensation | $9,474,528 (includes salary, bonus, AIP, change in pension value, all other compensation) |
All Other Compensation – key components (FY2024):
- 401(k) and non-qualified plan contributions: $23,000
- Leased vehicle: $10,800
- Life insurance premiums: $812
Additional perquisites detail from proxy:
- Personal use of aircraft: $817
- Personal use of car: $19,993
- Insurance premiums: $812
- Tax gross-ups/reimbursements: — (none disclosed for Watts)
Performance Compensation
Annual Cash Incentive (FY2024):
- Metric: North America Net Income (NANI)
- Threshold/Target/Stretch structure: < $600M = 0% payout; $600M = 36%; $1,000M = 100%; >$1,000M = >100%
- Above-target sharing: Keller Watts entitled to 0.4% of the amount over the $1.0B target (no maximum payout cap)
- Actual FY2024 payout: $3,480,000
| Metric | Weighting | Threshold | Target | Stretch | Payout Rule Above Target | FY2024 Actual Payout | Vesting |
|---|---|---|---|---|---|---|---|
| North America Net Income | Not specifically disclosed (measured solely vs NANI) | $600M → 36% | $1,000M → 100% | >$1,000M → >100% | 0.4% of excess over $1.0B | $3,480,000 | Cash (N/A) |
Equity Incentives (Post-IPO Grants):
- Plan: 2025 Omnibus Incentive Plan adopted in connection with IPO
- Grant date: January 27, 2025
- Award mix: 50% RSUs / 50% stock options
- Vesting: equal annual installments over five years from grant date
- Option exercise price: $20.00 per share (IPO price)
- FY2024: No equity grants; no outstanding awards as of 12/29/2024
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of 4/10/2025) | 6,733 shares; less than 1% of class |
| Vested vs Unvested Shares | Not disclosed; IPO awards vest ratably over 5 years |
| Options (Exercisable/Unexercisable) | Grants made 1/27/2025; per-person counts not disclosed; exercise price $20.00; 5-year equal vesting |
| Pledging/Hedging Policy | Executives prohibited from hedging and pledging company securities |
| Rule 10b5-1 Plans | Permitted under policy when not in possession of MNPI |
| Stock Ownership Guidelines | Not disclosed for executives in retrieved filings |
Retirement & Deferred Compensation:
- Pension Present Value (FY2024): Salaried Pension Plan: $630,319; Supplemental Plan (SERP): $4,848,890; credited service 28 and 31 years respectively
- Deferred Compensation (FY2024): Executive contributions $150,000; aggregate earnings $170,585; year-end balance $1,213,215
| Program | Credited Service | Present Value / Balance |
|---|---|---|
| Salaried Pension Plan | 28 years | $630,319 |
| Supplemental Pension Plan (SERP) | 31 years | $4,848,890 |
| Deferred Compensation Plan | — | Contributions: $150,000; Earnings: $170,585; Balance: $1,213,215 |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | None; not party to an employment agreement |
| Executive Severance Plan | Base salary continuation for 18 months (CEO: 24 months); prorated bonus for year of termination based on actual performance; COBRA subsidy up to 18 months |
| Change-in-Control (CIC) Cash Bonus | If termination within 2 months pre-CIC or within 2 years post-CIC, prorated bonus based on target for year of termination |
| Equity Treatment (2025 Plan) | Awards vest in full upon death or CIC; post-retirement or involuntary termination without cause: options/RSUs remain outstanding and eligible to vest per regular schedule |
| Restrictive Covenants | Participation conditioned on customary covenants: non-disclosure, non-competition, non-solicitation, non-disparagement |
| Clawback/Recoupment | Compensation recoupment policy applies to executive officers ; discretionary bonuses subject to repayment if resignation/for cause within 1–2 years |
| Hedging/Pledging | Prohibited by insider trading policy |
Investment Implications
- High at-risk cash leverage and no cap: AIP targets at 400% of salary with no maximum payout; above-target sharing (0.4% of NANI excess) can create significant variability and potential selling pressure if paired with large post-IPO equity grants .
- Alignment improving post-IPO: Introduction of 5-year RSU/option vesting and CIC vesting aligns executive outcomes with shareholder value creation over time; option strike set at IPO price ($20.00) provides clear performance hurdle .
- Governance and control considerations: SFD is a Nasdaq “controlled company” (WH Group ~92.7% ownership), with compensation and nominating committees not fully independent—investors should monitor compensation decisions for pay-for-performance integrity under controlling shareholder influence .
- Risk mitigants: Prohibitions on hedging/pledging, recoupment policy, and bonus repayment terms reduce misalignment and discourage opportunistic behaviors around cash awards .
- Tenure and retirement obligations: Significant pension/SERP values reflect long tenure, bolstering retention but increasing fixed obligations; deferred comp balances add to future payouts—assess total liability versus performance sustainability .
Note on insider activity: An attempt to fetch Keller Watts’ Form 4 transactions via the insider-trades skill encountered an authorization error; ongoing monitoring of Form 4s is recommended for assessing potential selling pressure.