William A. Newlands
CONSTELLATION BRANDSAbout William A. Newlands
William A. Newlands, age 66, is President and Chief Executive Officer of Constellation Brands (STZ) and a director since 2019; he became CEO in March 2019 and has served as President since February 2018, previously COO (2017–2019), President Wine & Spirits (2016–2017), and Chief Growth Officer (2015–2016) . Under current leadership, STZ delivered record net sales of over $10 billion in FY2025, generated $3.2 billion in operating cash flow and $1.94 billion in free cash flow, while Comparable EBIT reached $3.50 billion, though relative TSR for the FY2023–FY2025 PSU program ranked ~16th percentile (no payout) . The Board is led by an independent Chair and holds executive sessions at every regularly scheduled meeting; nine of twelve directors are independent, with Newlands classified as non-independent due to his management role .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Constellation Brands | Chief Executive Officer | Mar 2019–present | Oversaw multi-year growth including record FY2025 net sales >$10B and strong cash generation . |
| Constellation Brands | President | Feb 2018–present | Enterprise leadership during Beer Division capacity expansion to ~48M hl by Feb 28, 2025 . |
| Constellation Brands | Chief Operating Officer | Jan 2017–Feb 2019 | Operational oversight across beer, wine & spirits . |
| Constellation Brands | President, Wine & Spirits Division | Jan 2016–Jan 2017 | Led portfolio repositioning aimed at higher-end brands . |
| Constellation Brands | Chief Growth Officer | Jan 2015–Jan 2016 | Consumer-led growth, brand innovation . |
| Beam Inc./Beam Global Spirits & Wine | President, North America (SVP) | 2010–2014 | Senior leadership across major spirits portfolio . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hormel Foods Corporation (HRL) | Chairman of the Board | Current | Public company board leadership; governance and strategy oversight . |
| Canopy Growth Corporation | Director | 2018–2021 | Board oversight at STZ equity investee during investment period . |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary (paid) | $1,338,462 | $1,350,000 | $1,388,462 |
| Base Salary (set level) | — | — | $1,400,000 |
Notes:
- STZ increased CEO base salary to $1,400,000 effective FY2025 (+3.7%) .
Performance Compensation
Annual Cash Incentive (AMIP) – FY2025 Design and Outcomes
| Metric | Weighting | Threshold | Target | Maximum | Actual Result | % of Target | Payout % of Target |
|---|---|---|---|---|---|---|---|
| Net Sales ($mm) | 40% | $10,263.4 | $10,635.7 | $11,007.9 | $10,208.7 | 96.0% | 0.0% |
| Comparable EBIT ($mm) | 40% | $3,357.6 | $3,553.0 | $3,748.4 | $3,497.9 | 98.4% | 78.9% |
| Free Cash Flow ($mm) | 20% | $1,232.0 | $1,540.0 | $1,848.0 | $1,938.1 | 125.9% | 200.0% |
| Weighted Result | 100% | — | — | — | — | — | 71.6% |
| CEO AMIP Target and Payout | FY 2025 |
|---|---|
| Target Bonus % of Salary | 170% |
| Actual AMIP Paid ($) | $1,688,714 |
Design Notes:
- FY2025 CEO AMIP target increased from 160% to 170% of base salary .
- Consolidated payout certified at 71.6% of target .
Long-Term Incentives (FY2025 Grants)
| Award Type | Grant Date | Number of Units | Valuation/Strike | Vesting |
|---|---|---|---|---|
| PSUs | 4/25/2024 | 21,016 target (10,508 unearned at 2/28/25 shown) | Fair value per award mix; metrics: 50% relative TSR vs S&P 500 Food, Beverage & Tobacco; 50% organic net sales CAGR (6/7/8% for 50/100/200%) | Performance period to May 1, 2027; service through 5/1/2027 |
| RSUs | 4/25/2024 | 12,610 | Fair value $3,300,163 | 33% annually each May 1, 2024–2026 |
| NQSOs (Class 1) | 4/25/2024 | 26,402 | $261.71 strike; 10-year term | 33% annually over 3 years |
PSU Historical Outcome:
- FY2023–FY2025 relative TSR PSU certified at ~16th percentile vs S&P 500; no units earned .
Multi-year CEO Compensation Mix
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Stock Awards | $6,389,602 | $8,303,888 | $9,465,102 |
| Option Awards | $4,999,557 | $2,000,105 | $2,200,343 |
| Non-Equity Incentive | $3,110,960 | $2,750,329 | $1,688,714 |
| All Other Compensation | $232,879 | $224,692 | $264,179 |
| Total Compensation | $16,071,460 | $14,629,014 | $15,006,800 |
Equity Ownership & Alignment
| Ownership and Awards | Detail |
|---|---|
| Beneficial Class A shares | 15,102 shares; <1% of Class A outstanding . |
| Exercisable Class 1 NQSOs (≤60 days) | 251,879 shares; percent of Class 1 based on methodology in table is 90.3% due to small Class 1 base . |
| Unvested RSUs (2/28/25) | 12,610 shares; market value $2,213,055 at $175.50 . |
| Unearned PSUs in-flight | 10,508 shown at threshold/target display for 4/25/2024 grant; payout contingent . |
| Stock Ownership Guidelines | CEO must hold ≥6x base salary; executives have met or are within accumulation period . |
| Hedging/Pledging | Hedging barred; executive officers and directors prohibited from pledging company stock (Sands carve-out only) . |
| Director Pay | As CEO-director, receives no additional director compensation . |
| Option Exercises FY2025 | 50,000 shares exercised; value realized $4,977,084 (implies selling pressure given Class 1 conversion rules) . |
Policy Notes:
- Anti-hedging; clawback compliant with Dodd-Frank for 3-year lookback on restatements .
- Class 1 stock must be converted to Class A and sold upon exercise; cannot be held as Class A post-conversion .
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | Signed 2015; auto-renews annually unless company gives ≥180 days’ notice . |
| Severance (qualifying termination) | 2x base salary + 2x average AMIP over prior 3 years; 24 months medical/dental; up to 18 months outplacement; no excise tax gross-up (best-net) . |
| Severance Amounts (as of 2/28/25) | $7,833,335 severance; $49,206 medical/dental; $55,000 outplacement; total $7,937,541 . |
| Change-in-Control Treatment | Double-trigger; NQSOs and RSUs vest; PSUs vest at target on qualifying termination within 24 months . |
| Non-Compete / Non-Solicit | Non-compete 2 years; non-solicit 12 months; confidentiality obligations . |
| Clawback | Dodd-Frank compliant clawback policy adopted April 2023 . |
| Ownership & Pledging | Executive officers prohibited from pledging; hedging banned . |
Board Governance and Service
- Board service: Director since 2019; currently non-independent by virtue of CEO role; no committee membership .
- Board structure: Independent Board Chair (Christopher J. Baldwin) since March 1, 2024; no Lead Independent Director needed while Chair is independent .
- Committee composition: All standing committees (Audit, CGNR, Human Resources) are fully independent; Newlands is not a member .
- Meeting attendance: Board met six times in FY2025; the company disclosed each incumbent director standing for re-election attended at least 75% of Board and committee meetings on which they served .
Dual-role implications:
- With an independent Chair and fully independent committees, CEO-director dual-role concerns are mitigated by governance structure and regular executive sessions at every Board meeting . Independence classification ensures clarity in oversight lines .
Performance & Track Record
| Measure | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Net Sales ($mm GAAP) | $9,452.6 | $9,961.8 | $10,208.7 |
| Comparable EBIT ($mm) | $3,066.2 | $3,276.3 | $3,497.9 |
| Operating Cash Flow ($mm) | — | $2,780.0 | $3,152.2 |
| Free Cash Flow ($mm) | — | $1,510.9 | $1,938.1 |
| Relative TSR PSU (FY2023–FY2025) | — | — | ~16th percentile; 0% payout |
Strategic context:
- Beer Division delivered double-digit Comparable EBIT growth in FY2025 and expanded capacity to ~48M hl; Wine & Spirits portfolio repositioned to higher-end brands with divestitures (e.g., SVEDKA) .
Compensation Structure Analysis
- Shift in cash/equity mix: FY2025 targeted long-term equity increased to $11.0M; mix maintained at 50% PSUs / 30% RSUs / 20% NQSOs, indicating continued emphasis on performance-conditioned equity and retention .
- AMIP metrics tightened: FY2025 Net Sales and Comparable EBIT targets set above FY2024 maxima and actuals, while FCF target above FY2024 target and actuals; overall payout constrained to 71.6% despite strong FCF, reflecting balanced pay-for-performance .
- Governance safeguards: Double-trigger CIC vesting; robust ownership guidelines; no excise tax gross-ups; updated clawback; anti-hedging/anti-pledging .
- Say-on-pay: 97% approval at 2024 Annual Meeting supports design alignment with shareholder expectations .
Equity Award Vesting Schedules and Insider Selling Pressure
| Element | Vesting/Settlement | Notes |
|---|---|---|
| RSUs (FY2025 grants) | 33% annually at each of first three anniversaries of May 1, 2024 | Time-based retention. |
| NQSOs (FY2025 grants) | 33% annually over 3 years; 10-year term; $261.71 strike | Class 1 options; conversion requires immediate sale of Class A upon exercise . |
| PSUs (FY2025 grants) | Performance through May 1, 2027; TSR vs S&P 500 FBT and organic net sales CAGR (6/7/8% for threshold/target/max); negative TSR cap at target | Service through 5/1/2027 required. |
| FY2025 Exercises (CEO) | 50,000 options exercised; $4,977,084 value realized | Indicates realized gains and potential selling due to conversion rule . |
Director Compensation (context)
- Non-management director program includes cash retainers and annual RSU/NQSO grants; as CEO, Newlands receives no additional director compensation .
Compensation Peer Group (Benchmarking)
- FY2025 peer group includes Brown‑Forman, Diageo, Keurig Dr Pepper, Molson Coors, Monster Beverage, Starbucks, Hershey, General Mills, Clorox, Colgate‑Palmolive, Kellanova, Conagra, Campbell Soup, Estée Lauder, McCormick, J.M. Smucker, YUM! Brands; STZ revenues at 39th percentile and market cap at 70th percentile within group .
Risk Indicators & Red Flags
- PSU zero payout for FY2023–FY2025 relative TSR demonstrates outcome sensitivity and alignment; no option repricing disclosed; anti-hedging and anti-pledging policies in place; no excise tax gross-ups; strong 2024 say-on-pay support (97%) .
- Related party transactions exist with Sands family entities (e.g., office lease payments), but oversight via CGNR and policy thresholds; no disclosures implicate Newlands personally .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval ~97% indicates broad support for compensation program design and pay‑for‑performance alignment .
- Ongoing investor engagement with ~45% of Class A outstanding covered; Board and management report back to Board on feedback .
Expertise & Qualifications
- Extensive senior leadership across consumer products and beverage alcohol; skills spanning brand building, operations, finance, and international markets as profiled by STZ .
Work History & Career Trajectory
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Constellation Brands | CEO; President; COO; Divisional President; CGO | 2015–present | Progressive leadership roles culminating in CEO; board service since 2019 . |
| Beam Inc/Beam Global Spirits & Wine | President, North America (SVP roles) | 2008–2014 | Major spirits operator roles . |
Compensation Committee Analysis
- HRC comprised entirely of independent directors; engages FW Cook (independent consultant) for peer reviews, design recommendations, risk assessments; no consultant conflicts identified .
- Compensation risk assessment found no risks reasonably likely to have a material adverse effect; program includes capped payouts and double-trigger CIC .
Investment Implications
- Pay-for-performance linkage is intact: constrained FY2025 AMIP payout despite strong FCF underscores multi-metric discipline; zero PSU payout for FY23–25 relative TSR adds further performance sensitivity—positive for alignment but may temper realized long-term pay if TSR underperforms .
- Insider selling pressure from option exercises is structurally higher due to mandatory sale upon Class 1 conversion; FY2025 CEO exercises ($4.98M value) reflect realized gains but not discretionary pledging or hedging risk (both prohibited) .
- Governance mitigants (independent Chair, independent committees, robust clawback/ownership policies, no tax gross-ups) reduce dual-role and entrenchment risk; strong say-on-pay support suggests investor confidence in incentives design .
- Operational performance remains the primary lever for compensation outcomes: Beer capacity expansion and cash generation support future PSU metrics tied to organic net sales and TSR; sustained relative TSR improvement would be needed for PSU accretion .