Kevin P. Hourican
About Kevin P. Hourican
Kevin P. Hourican, 52, is Sysco’s Chair of the Board and Chief Executive Officer; he joined the board and became CEO in 2020 and was elevated to Chair in April 2024 . Prior to Sysco, he served as Executive Vice President of CVS Health and President of CVS Pharmacy; earlier roles included executive leadership positions at Macy’s . Under his tenure, Sysco delivered record sales of $81.37B in FY2025 (+3.2% y/y) with adjusted operating income of $3.52B; adjusted EBITDA rose 2.4% y/y to $4.29B, while GAAP EBITDA was $4.00B (–1.2% y/y) . Five‑year cumulative TSR as presented in the proxy’s pay-versus-performance disclosure stood at 164 vs peer index 232 (cumulative from a $100 base) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CVS Health (CVS Pharmacy) | EVP, President of CVS Pharmacy | Not disclosed | Led $85B retail business (9,900 stores, 200K+ employees), overseeing merchandising, marketing, supply chain, and pharmacy operations . |
| Macy’s | Executive leadership roles | Not disclosed | Built experience in strategy, merchandising and operations prior to CVS . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Tapestry, Inc. (NYSE: TPR) | Director | 2024–present | Current public company directorship . |
| WSJ CEO Council | Member | 2020–present | External engagement . |
| Business Roundtable | Member | 2020–present | External engagement . |
Fixed Compensation
| Component | FY2024 | FY2025 | Notes |
|---|---|---|---|
| Base Salary | $1,341,760 | $1,392,308 | FY2025 SCT “Salary” (actual paid). FY2025 salary rate set at $1,400,000 effective Aug 25, 2024 . |
Performance Compensation
Annual Incentive Plan (AIP) – FY2025 Design and Outcomes
| Metric | Weight | Threshold | Target | Max | Actual | Payout as % Target |
|---|---|---|---|---|---|---|
| Operating Income (adjusted, $B) | 50% | 3.516 | 3.742 | 3.899 | 3.523 | 51.52% |
| Sales Revenue ($B) | 20% | 80.421 | 83.181 | 85.152 | 81.370 | 67.19% |
| Local Case Growth | 10% | 0.50% | 4.00% | 6.00% | 0.60% | 51.40% |
| USBL Cost Per Piece | 10% | 103% of Target | 100% | 97% of Target | 102% | 70.00% |
| Engagement Improvement | 10% | –1% | 1% | 3% | 2% | 150.00% |
- CEO target bonus: 175% of base salary . FY2025 corporate formula produced a 66.34% payout; Hourican’s AIP paid $1,616,000 (individual modifier 1.00) .
- FY2026 AIP: refines weights (Operating Income 45%, Sales 25%; SBOs 30%) and removes Engagement metric to focus on core financial/strategic metrics .
Long-Term Incentive Plan (LTIP) – FY2025 Structure and Grants
| Element | Weight | Vesting | FY2025 Target Award |
|---|---|---|---|
| Performance Share Units (PSUs) | 50% | 3-year cliff (FY2025–FY2027) with TSR modifier (±25%) | $12,500,000 total LTIP; PSU target and RSU/Options split below . |
| Restricted Stock Units (RSUs) | 30% | Ratable over 3 years | 49,420 RSUs granted 8/21/2024 . |
| Stock Options | 20% | Ratable over 3 years; 10-year term | 130,140 options @ $76.54 (8/20/2034 expiry) . |
PSU performance metrics and weights: Adjusted EPS growth (37.5%), ROIC (37.5%), Revenue growth (25%), with S&P 500 relative TSR as an outcome modifier capped at 200% . For the prior PSU cycle (FY2023 awards covering FY2023–FY2025), the certified payout was 56.14% after applying the –23.20% TSR modifier (25.2nd percentile vs S&P 500) .
Equity Grant Details – FY2025 (as granted 8/21/2024)
| Award Type | Shares/Units | Pricing/Terms |
|---|---|---|
| PSUs (target) | 82,366 | 3-year performance; grant-date value per unit $76.54 . |
| RSUs | 49,420 | Ratable vesting over 3 years; dividend equivalents in cash upon vest . |
| Options | 130,140 | Exercise $76.54; vest 1/3 annually; 10-year term to 8/20/2034 . |
Equity Ownership & Alignment
- Beneficial ownership (as of 9/17/2025): 367,995 shares directly; options exercisable within 60 days covering 1,202,579 shares; total beneficial ownership 1,570,574 shares (approx. 0.33% of 478,507,440 shares outstanding) .
- CEO stock ownership guideline: 7x base salary; all NEOs either exceed or are on track to meet requirements .
- Hedging and pledging: prohibited for directors and executive officers; transactions must go through pre‑approved Rule 10b5‑1 plans with cooling‑off and blackout constraints .
- FY2025 equity vesting realized: 72,884 shares vested, value realized $5,729,858; no option exercises reported by the CEO in FY2025 .
- Outstanding unvested awards at FY2025 year‑end (6/28/2025):
- PSUs at target: 84,080 (Aug 2024 grant) and 84,175 (Aug 2023 grant) .
- RSUs: 49,420 (Aug 2024) and 32,064 (Aug 2023) .
- Options: 130,140 granted Aug 2024 (unexercised), plus prior option tranches outstanding .
| Policy / Plan | Key Terms |
|---|---|
| Ownership guidelines | CEO 7x salary; retention requirements if below (retain 75% of net shares from RSU/PSU vesting; 25% from options) . |
| Hedging / Pledging | Prohibited; trading windows and 10b5‑1 plan pre‑approvals required . |
| Clawbacks | Dodd‑Frank compliant; recovery for restatements or misconduct causing material financial/reputational harm; applies to cash, equity and certain plan contributions . |
Employment Terms
- CEO offer letter (Jan 10, 2020):
- Non‑CIC termination (without cause / good reason): cash severance = 2x (base + target AIP); pro‑rated AIP based on actuals; 24 months health benefits at active rates .
- CIC termination (double trigger within 24 months): cash severance = 3x (base + target AIP); pro‑rated AIP; 36 months health benefits at active rates .
- Change-in-control equity acceleration uses double‑trigger (also reflected across plans) .
- Protective covenants: confidentiality, non‑disparagement, non‑compete and non‑solicit; post‑termination restrictions include a two‑year non‑compete/non‑solicit period tied to severance eligibility .
Quantified as of 6/28/2025 (illustrative, per proxy methodology):
| Scenario | Severance Payment | PSU Payments | RSU/Option Accel/Other Equity | Insurance/Benefits | Other |
|---|---|---|---|---|---|
| Involuntary w/o Cause or Good Reason (Non‑CIC) | $7,700,000 | — | — | $29,736 | $65,873 |
| Termination w/o Cause following a CIC (Double Trigger) | $11,550,000 | $12,620,806 | $7,121,228 | $44,604 | $65,873 |
No excise tax gross‑ups upon a change in control; no option repricing or exchange without shareholder approval .
Performance & Track Record
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Sales (GAAP, $B) | 76.325 | 78.844 | 81.370 |
| EBITDA (GAAP, $B) | — | 4.045 | 3.995 |
| Adjusted EBITDA (Non‑GAAP, $B) | — | 4.192 | 4.293 |
- FY2025 highlights: record revenue $81.37B (+3.2% y/y); adjusted operating income $3.523B; adjusted EPS $4.46; returned ~$2.3B via dividends and buybacks .
- Pay-vs-Performance disclosure (cumulative value of $100): SYY TSR 164 vs peer TSR 232; Net earnings $1,828MM; operating income $3,523MM (adjusted) in FY2025 .
Board Governance
- Roles: Combined Chair & CEO since April 2024; Lead Independent Director (Larry Glasscock) provides robust independent oversight; LID responsibilities include agenda setting, presiding over executive sessions, CEO evaluation, and shareholder outreach .
- Committee roles: Hourican chairs the Executive Committee .
- Independence: Hourican is not an independent director; all other nominees are independent .
- Board effectiveness: FY2025 attendance ~99%; all directors attended ≥75%; five independent‑only executive sessions; 100% attendance at 2024 annual meeting .
- 2025 shareholder proposal: request to separate Chair and CEO; the board recommends against codifying separation to preserve flexibility and cites the LID framework .
Director Compensation (context for dual role)
Sysco does not pay additional board fees to the employee director (CEO); non‑employee director program terms and fees are disclosed separately .
Compensation Committee & Peer Benchmarking
- Independent consultant: Semler Brossy (independence affirmed) advises on design, peer group, and pay-for-performance alignment .
- Peer group includes Aramark, ADM, Bunge, Costco, Kroger, UPS, FedEx, US Foods, Performance Food Group, Target, Dollar General, Tyson, Walgreens, etc.; Sysco sits around the median of the peer set by market cap and revenue in the FY2025 peer screen .
- Philosophy: emphasize variable, equity‑heavy pay; CEO ~91% variable at target; committee references market median but does not target a fixed percentile by component .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay support: 93.37% (2023) and 93.80% (2024) .
- 2025 outcomes translated into a 66.34% AIP payout, reflecting below‑target performance on several FY2025 AIP financial and strategic measures .
Compensation Structure Analysis (signals)
- Mix shift remains equity‑heavy: FY2025 target LTIP $12.5M, split 50% PSUs / 30% RSUs / 20% options, with PSU design tightened to EPS, ROIC, and Revenue plus relative TSR .
- FY2026 AIP sharpened to core financial/operational metrics (removal of Engagement metric) after year‑end review, reinforcing discipline and investor feedback responsiveness .
- Governance guardrails: robust clawback; hedging/pledging ban; no repricing; no CIC excise tax gross‑ups .
Related Party Transactions
The board reviewed transactions since June 30, 2024 and determined there were none requiring related‑party disclosure under SEC rules .
Deferred Compensation & Perquisites
- Management Savings Plan (MSP): CEO contributed $206,991; company contributed $194,483; FY2025 aggregate balance $1,357,081 .
- Perquisites FY2025: financial advisor reimbursement $15,000; limited personal aircraft usage $185,959; security measures, including vehicle/driver, $212,072 (captured in “All Other Compensation”) .
Investment Implications
- Alignment: High equity weighting, strict ownership rules (7x salary), and clawback/anti‑hedging policies align CEO incentives with long‑term TSR and cash flow; hedging/pledging bans reduce misalignment risk .
- Retention and overhang: Significant unvested PSUs/RSUs and multi‑year vesting cadence (annual RSU tranches in 2026–2027 and PSU vest in 2027) support retention but can create predictable supply as awards settle; CEO had no option exercises in FY2025 but realized ~$5.73M from vesting, with further tranches scheduled .
- Pay-for-performance tension: FY2025 AIP paid at 66.34% amid below‑target operating income and revenue outcomes; however, adjusted EBITDA grew and LTIP remains performance‑weighted with relative TSR modifier, which curtailed the FY2023 PSU cycle payout to 56.14%—evidence of downside sensitivity .
- Governance optics: Combined Chair/CEO role may continue to invite shareholder scrutiny (active 2025 proposal to separate roles), though Sysco’s LID construct and strong say‑on‑pay results mitigate governance risk in the near term .
Appendix – Selected Multi‑Year Compensation (SCT)
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non‑Equity Incentive ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2025 | 1,392,308 | 10,086,901 | 2,499,989 | 1,616,000 | 633,401 | 16,228,599 |
| 2024 | 1,341,760 | 9,430,664 | 2,399,982 | 2,221,000 | 204,844 | 15,598,250 |
| 2023 | 1,296,438 | 7,775,318 | 3,299,985 | 1,762,976 | 206,303 | 14,341,020 |
FY2025 Company Performance (for context)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Sales (GAAP, $B) | 76.325 | 78.844 | 81.370 |
| EBITDA (GAAP, $B) | — | 4.045 | 3.995 |
| Adjusted EBITDA (Non‑GAAP, $B) | — | 4.192 | 4.293 |
Notes: All data cited directly from Sysco’s 2025 DEF 14A and 2025 Form 10‑K as referenced above.