SEC Filings

Primo Water Corp /CN/ (Form: DEF 14A, Received: 03/25/2021 10:01:22)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒    Filed by a Party other than the Registrant
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
Primo Water Corporation
(Name of registrant as specified in its charter)
 
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)
Title of each class of securities to which the transaction applies:
 
 
 
 
(2)
Aggregate number of securities to which the transaction applies:
 
 
 
 
(3)
Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
 
(4)
Proposed maximum aggregate value of the transaction:
 
 
 
 
(5)
Total fee paid:
 
 
 
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
 
 
 
 
(2)
Form, Schedule or Registration Statement No.:
 
 
 
 
(3)
Filing Party:
 
 
 
 
(4)
Date Filed:
 
 
 

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Primo Water Corporation
4221 W. Boy Scout Blvd.
Suite 400
Tampa, Florida 33607
March 25, 2021
Dear Shareowners:
We are pleased to invite you to attend our annual and special meeting of shareowners, which will be held at 8:00 a.m. (local time in Tampa) on Tuesday, May 4, 2021. Out of an abundance of caution, to proactively deal with the unprecedented impact of the coronavirus (COVID-19) outbreak and to mitigate risks to the health and safety of our shareowners, associates and other stakeholders, we will again hold our annual and special meeting of shareowners in a virtual meeting, via live audio webcast. You can access the meeting by visiting www.virtualshareholdermeeting.com/PRMW2021. You will be able to listen to the meeting live and submit questions and submit your vote while the meeting is being held.
At this meeting, you will have the opportunity to learn more about Primo and our strategy and to receive our financial results for the 2020 fiscal year.
The notice of meeting and proxy statement that accompany this letter describe the business to be conducted at the meeting.
We are pleased to furnish our proxy materials over the Internet in accordance with applicable law. As a result, we are mailing to many of our shareowners a notice instead of paper copies of our proxy statement, form of proxy and 2020 annual report. The notice contains instructions on how to access these materials over the Internet, as well as instructions on how shareowners can receive paper copies of these materials. Employing this distribution process will conserve natural resources, consistent with our sustainability efforts described in this proxy statement, and reduce the costs of printing and distributing these materials.
Even if you cannot attend the meeting, it is important that your shares be represented and voted by using the form of proxy provided. We encourage you to read the proxy statement and vote as soon as possible. We look forward to your participation.
Sincerely,

Thomas J. Harrington
Chief Executive Officer

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Primo Water Corporation

Notice of Annual and Special Meeting of Shareowners
The Annual and Special Meeting of Shareowners of Primo Water Corporation (“Primo”) will be held
on:
Tuesday, May 4, 2021
at:
8:00 a.m. (local time in Tampa). We encourage you to access the meeting prior to the start time to allow you ample time to log in to the live audio webcast and test your computer audio system.
at:
Virtual meeting only via live audio webcast online at www.virtualshareholdermeeting.com/
PRMW2021. To participate in the meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompany your proxy materials. You will be able to listen to the meeting live and submit questions and submit your vote while the meeting is being held.
to:
receive the financial statements for the year ended January 2, 2021 and the report on those statements by Primo’s independent registered certified public accounting firm,
 
elect directors,
 
approve the appointment of Primo’s independent registered certified public accounting firm,
 
hold a non-binding advisory vote on executive compensation,
 
confirm, ratify and approve Primo’s Shareholder Rights Plan,
 
approve the continuance of Primo under the Business Corporations Act (Ontario) from the Canada Business Corporations Act, and
 
transact any other business that properly may be brought before the meeting and any adjournment of the meeting.
By order of the board of directors

Marni Morgan Poe
Chief Legal Officer and Secretary
Tampa, Florida
March 25, 2021
YOU ARE INVITED TO VOTE BY COMPLETING, DATING AND SIGNING THE FORM OF PROXY AND RETURNING IT BY MAIL OR BY FOLLOWING THE INSTRUCTIONS FOR VOTING OVER THE INTERNET OR BY PHONE IN THE PROXY STATEMENT. A VOTE BY PROXY WILL BE COUNTED IF IT IS COMPLETED PROPERLY AND IS RECEIVED BY BROADRIDGE NO LATER THAN 11:59 P.M. LOCAL TIME IN TAMPA ON MAY 3, 2021 OR THE LAST BUSINESS DAY PRIOR TO ANY POSTPONED OR ADJOURNED MEETING OR IS OTHERWISE RECEIVED BY OUR SECRETARY, AS DESCRIBED HEREIN, PRIOR TO THE COMMENCEMENT OF THE MEETING OR ANY POSTPONED OR ADJOURNED MEETING. BROADRIDGE’S MAILING ADDRESS IS VOTE PROCESSING C/O BROADRIDGE, 51 MERCEDES WAY, EDGEWOOD, NY 11717.

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL AND SPECIAL MEETING OF SHAREOWNERS TO BE HELD ON MAY 4, 2021
This communication is not a form for voting and presents only an overview of the more complete proxy materials, which are available on the Internet or by mail. We encourage you to access and review all of the important information contained in the proxy materials before voting.
Our proxy statement, form of proxy and 2020 annual report are available at our website (www.primowatercorp.com), as well as our profile on SEDAR (www.sedar.com). Our proxy statement includes information on the following matters, among other things:
The date, time and location of the Annual and Special Meeting of Shareowners;
A list of the matters being submitted to the shareowners for approval; and
Information concerning voting at the Annual and Special Meeting of Shareowners.
If you want to receive a paper copy or e-mail of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy to Broadridge by internet at www.proxyvote.com, by telephone at 1-800-579-1639, or by email at sendmaterial@proxyvote.com, or contact Primo’s Investor Relations Department directly at our principal executive office: Primo Water Corporation, 4221 W. Boy Scout Blvd., Suite 400, Tampa, Florida 33607, telephone (813) 313-1732, email InvestorRelations@primowater.com.

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Primo Water Corporation
Annual and Special Meeting of Shareowners
THIS BOOKLET EXPLAINS:
details of the matters to be voted upon at the meeting, and
how to exercise your right to vote even if you cannot attend the meeting.
THIS BOOKLET CONTAINS:
the notice of the meeting,
the proxy statement for the meeting, and
a proxy form that you may use to vote your shares without attending the meeting.
REGISTERED SHAREOWNERS
A form of proxy is enclosed with this booklet. This form may be used to vote your shares if you are unable to attend the virtual meeting. Instructions on how to vote using this form are found starting on page 2 of this proxy statement.
NON-REGISTERED BENEFICIAL SHAREOWNERS
If your shares are held on your behalf or for your account by a broker, securities dealer, bank, trust company or other intermediary, you will not be able to vote unless you carefully follow the instructions provided by your intermediary.
The accompanying proxy statement and form of proxy are furnished in connection with the solicitation of proxies by or on behalf of management and the board of directors for use at the annual and special meeting of shareowners to be held on Tuesday, May 4, 2021 and any continuation of the meeting after an adjournment of such meeting.
AVAILABILITY OF QUARTERLY FINANCIAL INFORMATION
If you are a shareowner and wish to receive (or continue to receive) our quarterly interim financial statements (and the related management discussion and analysis) by mail, you must complete and return the enclosed request form. If you do not do so, quarterly financial statements will not be sent to you. Financial results are announced by media release, and financial statements are available on our website at www.primowatercorp.com, on the SEDAR website maintained by the Canadian securities regulators at www.sedar.com and on the EDGAR website maintained by the United States Securities and Exchange Commission at www.sec.gov.

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Primo Water Corporation
Proxy Statement
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of proxies by or on behalf of management and the board of directors (the “Board”) of Primo Water Corporation (“Primo” ) for use at the annual and special meeting of shareowners (the “meeting”) that is to be held at the time and place, and for the purposes, described in the accompanying notice of the meeting and any continuation of the meeting after an adjournment of such meeting.
We are first mailing or making available to shareowners this proxy statement, our 2020 annual report and related materials on or about March 25, 2021. All dollar amounts are in United States dollars unless otherwise stated. All information contained in this proxy statement is as of March 15, 2021, unless otherwise indicated. Our fiscal year ends on the Saturday closest to December 31 of each year. In this proxy statement, therefore, references to the year 2018 are to the fiscal year ended December 29, 2018, references to the year 2019 are to the fiscal year ended December 28, 2019, and references to the year 2020 are to the fiscal year ended January 2, 2021. As used herein, “GAAP” means United States generally accepted accounting principles.
Out of an abundance of caution, to proactively deal with the unprecedented impact of the coronavirus (COVID-19) outbreak and to mitigate risks to the health and safety of our shareowners, associates and other stakeholders, we will again hold our annual and special meeting of shareowners in a virtual meeting, via live audio webcast. Shareowners can access the meeting by visiting www.virtualshareholdermeeting.com/PRMW2021. To participate in the meeting, shareowners will need the 16-digit control number included on their proxy cards or on the instructions that accompany the proxy materials. We recommend that shareowners carefully review in advance the procedures needed to gain admission virtually to the meeting. Technicians will be ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the meeting login page at www.virtualshareholdermeeting.com/PRMW2021.
We designed the format of the online meeting to ensure that our shareowners who attend the meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting and to enhance shareowner access, participation and communication through online tools. We will take the following steps to ensure such an experience:
providing shareowners with the ability to submit appropriate questions real-time via the meeting website; and
answering questions submitted in the time allotted for the meeting (given time constraints, we may have to limit the number of questions addressed at the meeting).
If there are any questions that cannot be addressed due to time constraints or for any other reason, we will post answers to such questions on our website following the meeting. If we receive substantially similar questions, we may group them together and provide a single response to avoid repetition. Only questions that are relevant to the purpose of the meeting or our business will be answered.
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VOTING AT THE MEETING
Who Can Vote
March 15, 2021 is the record date to determine shareowners who are entitled to receive notice of the meeting. Shareowners at the close of business on that date will be entitled to vote at the meeting. As of the record date, 160,811,933 common shares were outstanding. Each common share entitles the holder to one vote on all matters presented at the meeting.
Voting By Registered Shareowners
The following instructions are for registered shareowners only. If you are a non-registered beneficial shareowner, please follow your intermediary’s instructions on how to vote your shares. See below under “Voting By Non-Registered Beneficial Shareowners.”
Voting at the Meeting
Primo is holding the meeting in a virtual only format and shareowners will not be able to attend the meeting in person. Registered shareowners who attend the meeting online by accessing www.virtualshareholdermeeting.com/PRMW2021 may electronically vote the shares registered in their name on resolutions put before the meeting. If you are a registered holder who will attend and vote online at the meeting, you do not need to complete or return the form of proxy, although you are requested to do so. Whether or not you plan to attend the meeting, you are requested to complete and promptly return the enclosed proxy. Sending in a proxy card will not prevent a registered shareowner from voting online at the meeting. Such registered shareowner’s vote will be taken and counted at the meeting. If you are attending the meeting, please log-on to the virtual meeting in advance to ensure that your vote will be counted.
Voting by Proxy
If you are a registered shareowner but do not plan to attend the online meeting, there are four ways that you can vote your proxy:
Mail: You may vote by completing, dating and signing the enclosed form of proxy and returning it to Broadridge Corporate Issuer Services (“Broadridge”) no later than 11:59 p.m. local time in Tampa on May 3, 2021, or the last business day prior to any postponed or adjourned meeting, by mail to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 using the envelope provided.
Telephone: You may vote over the phone by calling toll free 1-800-690-6903 no later than 11:59 p.m. local time in Tampa on May 3, 2021 or the last business day prior to any postponed or adjourned meeting.
Internet: You may vote over the Internet by accessing www.proxyvote.com and following the proxy login and voting procedures described for the meeting. The enclosed form of proxy contains certain information required for the Internet voting process. Detailed voting instructions will then be conveyed electronically via the Internet to those who have completed the login procedure. You may vote (and revoke a previous vote) over the Internet at any time before 11:59 p.m. local time in Tampa on May 3, 2021 or the last business day prior to any postponed or adjourned meeting.
The Internet voting procedure, which complies with Canadian law, is designed to authenticate shareowners’ identities, to allow shareowners to vote their shares and to confirm that shareowners’ votes have been recorded properly. Shareowners voting via the Internet should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies that must be borne by the shareowners. Also, please be aware that Primo is not involved in the operation of the Internet voting procedure and cannot take responsibility for any access or Internet service interruptions that may occur or any inaccurate, erroneous or incomplete information that may appear.
Other: If you have not availed yourself of any of the foregoing voting procedures by 11:59 p.m. local time in Tampa on May 3, 2021 or the last business day prior to any postponed or adjourned meeting but still wish to vote by proxy, you may vote by (i) completing, dating and signing the enclosed form of proxy and faxing it to the attention of our Secretary at (813) 434-2139, or (ii) having the person you have chosen as your proxyholder deliver it in person to our Secretary, in each case so that it is received prior to the commencement of the meeting or any postponed or adjourned meeting.
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What Is a Proxy?
A proxy is a document that authorizes another person to attend the meeting and cast votes on behalf of a registered shareowner at the meeting. If you are a registered shareowner, you can use the accompanying proxy form. You may also use any other legal form of proxy.
How do You Appoint a Proxyholder?
Your proxyholder is the person you appoint to cast your votes for you at the meeting. The persons named in the enclosed form of proxy are directors or officers of Primo. You may choose those individuals or any other person to be your proxyholder. Your proxyholder does not have to be a shareowner of Primo. If you want to authorize a director or officer of Primo who is named on the enclosed proxy form as your proxyholder, please leave the line near the top of the proxy form blank, as their names are pre-printed on the form. If you want to authorize another person as your proxyholder, fill in that person’s name in the blank space located near the top of the enclosed proxy form.
Your proxy authorizes the proxyholder to vote and otherwise act for you at the meeting, including any continuation of the meeting if it is adjourned.
How Will a Proxyholder Vote?
If you mark on the proxy how you want to vote on a particular issue, your proxyholder must cast your votes as instructed. By checking “WITHHOLD” on the proxy form, you will be abstaining from voting.
If you do NOT mark on the proxy how you want to vote on a particular matter, your proxyholder is entitled to vote your shares as he or she sees fit. If your proxy does not specify how to vote on any particular matter, and if you have authorized a director or officer of Primo to act as your proxyholder, your shares will be voted at the meeting:
FOR the election of the nominees named in this proxy statement as directors;
FOR the approval of the appointment of PricewaterhouseCoopers LLP as Primo’s independent registered certified public accounting firm;
FOR the approval, on a non-binding advisory basis, of the compensation of the named executive officers, as such information is disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative disclosure beginning on page 67 (commonly referred to as “say-on-pay”);
FOR the confirmation, ratification and approval of Primo’s Shareholder Rights Plan described under “Approval of 2021 Rights Plan” beginning on page 68 of this proxy statement, in accordance with the resolution attached as Appendix B to this proxy statement on page B-1; and
FOR the approval of the continuance of Primo under the Business Corporations Act (Ontario) from the Canada Business Corporations Act (the “Continuance”) described under “Approval of the Continuance” beginning on page 70 of this proxy statement, in accordance with the resolution attached as Appendix E to this proxy statement on page E-1.
For more information on these matters, please see “Election of Directors,” beginning on page 8, “Independent Registered Certified Public Accounting Firm—Approval of Appointment of Independent Registered Certified Public Accounting Firm” on page 64, “Advisory Vote on Executive Compensation” on page 67, “Approval of 2021 Rights Plan” on page 68, and “Approval of the Continuance” on page 70.
If any amendments are proposed to these matters, or if any other matters properly arise at the meeting, your proxyholder can generally vote your shares as he or she sees fit. The notice of the meeting sets out all the matters to be presented at the meeting that are known to management as of March 15, 2021.
How do You Revoke Your Proxy?
Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before the meeting by delivering to our Secretary a written notice of revocation or a duly executed proxy bearing a later date, by voting via the Internet at a later date or by attending the online meeting and voting at the online meeting. You may send a written notice to our Secretary to the following address: 4221 W. Boy Scout Blvd., Suite 400, Tampa, Florida 33607.
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This revocation must be received by our Secretary before the meeting (or before the date of the reconvened meeting if it is adjourned), or in any other way permitted by law.
If you revoke your proxy and do not replace it with another form of proxy that is properly deposited, you may still vote shares registered in your name online during the meeting.
Voting By Non-Registered Beneficial Shareowners
If your common shares are not registered in your name but in the name of an intermediary (typically a bank, trust company, securities dealer or broker, or a clearing agency in which an intermediary participates), then you are a non-registered beneficial shareowner (as opposed to a registered shareowner). Copies of this document have been distributed to intermediaries who are required to deliver them to, and seek voting instructions from, our non-registered beneficial shareowners. Intermediaries often use a service company (such as Broadridge) to forward meeting materials to beneficial shareowners. Primo intends to pay for intermediaries to deliver proxy-related materials and the request for voting instructions (Form 54-101F7) to “objecting beneficial owners” in accordance with National Instrument 54-101—Communication with Beneficial Owners of Securities. If you are a non-registered beneficial shareowner, you can vote your common shares by proxy, by following the instructions your intermediary provides to you, through your intermediary or at the meeting. As a non-registered beneficial shareowner, while you are invited to attend the meeting, you will not be entitled to vote at the meeting unless you make the necessary arrangements with your intermediary to do so.
Voting at the Meeting
Primo is holding the meeting in a virtual only format and shareowners will not be able to attend the meeting in person. A non-registered beneficial shareowner who received a voting instruction form from the intermediary and who wishes to attend and vote at the meeting online by accessing www.virtualshareholdermeeting.com/PRMW2021 (or have another person attend and vote on their behalf) should strike out the proxyholders named in the voting instruction form and insert the beneficial shareowner’s (or such other person’s) name in the blank space provided or follow the corresponding instructions provided by the intermediary. However, even if you plan to attend the meeting, Primo recommends that you vote your shares in advance, so that your vote will be counted in the event you later decide not to attend the meeting.
Voting by Proxy through Intermediary
Internet: If your intermediary is registered with Broadridge, which we have retained to manage beneficial shareowner Internet voting, you may vote over the Internet by following the proxy login and voting instructions on your voting instruction form.
Through Intermediary: A beneficial shareowner who does not vote via the Internet will be given a voting instruction form or other document by his or her intermediary that must be submitted by the beneficial shareowner in accordance with the instructions provided by the intermediary. In such case, you cannot use the Internet voting procedures described above and must follow the intermediary’s instructions (which in some cases may allow the completion of the voting instruction form by telephone or on the intermediary’s Internet website). Occasionally, a beneficial shareowner may be given a form of proxy that has been signed by the intermediary and is restricted to the number of shares owned by the beneficial shareowner but is otherwise not completed. This form of proxy does not need to be signed by the beneficial shareowner. In this case, you can complete the form of proxy and vote by mail only in the same manner as described above under “Voting by Registered Shareowners—Voting by Proxy” beginning on page 2 of this proxy statement.
In all cases, beneficial shareowners should carefully follow the instructions provided by the intermediary.
Proxies returned by intermediaries as “non-votes” because the intermediary has not received instructions from the beneficial shareowner with respect to the voting of certain shares, or because under applicable stock exchange or other rules, the intermediary does not have the discretion to vote those shares on one or more of the matters that come before the meeting, will be treated as not entitled to vote on any such matter and will not be counted as having been voted in respect of any such matter. Shares represented by such broker “non-votes” will, however, be counted in determining whether there is a quorum for the meeting. In addition to being able to submit to Primo or the intermediary, as applicable, a voting instruction form, beneficial shareowners are permitted to submit any other documents in writing that requests that the beneficial shareowner or a nominee thereof be appointed as a proxyholder.
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Confidentiality of Vote
Broadridge counts and tabulates proxies in a manner that preserves the confidentiality of your votes. Proxies will not be submitted to management unless:
there is a proxy contest;
the proxy contains comments clearly intended for management; or
it is necessary to determine a proxy’s validity or to enable management and/or the Board to meet their legal obligations to shareowners or to discharge their legal duties to Primo.
Quorum
The annual and special meeting requires a quorum, which for this meeting means:
at least two persons personally present, each being a shareowner entitled to vote at the meeting or a duly appointed proxy for an absent shareowner so entitled; and
persons owning or representing not less than a majority of the total number of our shares entitled to vote.
Vote Counting Rules
All matters that are scheduled to be voted upon at the meeting, other than as set out below, are ordinary resolutions. Ordinary resolutions are passed by a simple majority of votes—if more than half of the votes that are cast are cast in favor, the resolution passes.
Twelve directors nominated must be elected by ordinary resolution of the shareowners. Pursuant to Primo’s Majority Voting and Director Resignation Policy, if a nominee in an uncontested election does not receive the vote of at least the majority of the votes cast (including votes “for” and votes “withheld”), such director is required to promptly deliver written notice to the ESG and Nominating Committee offering to resign from the Board. Primo’s Majority Voting and Director Resignation Policy is described more particularly below under the heading “Majority Voting and Director Resignation Policy” on page 16 of this proxy statement.
The approval of Primo’s independent registered certified public accounting firm and the reconfirmation, ratification and approval of Primo’s Shareholder Rights Plan must be approved by ordinary resolution of the shareowners.
The approval of the Continuance is a special resolution, which must be approved by not less than sixty-six and two-thirds percent (66 23%) of the votes cast by the shareowners.
Due to the non-binding advisory nature of the matter to be voted upon in respect of the compensation of our executive officers, there is no minimum vote requirement for the proposal. However, the matter will be considered to have passed with the affirmative vote of a majority of the votes cast by shareowners that are present or represented and entitled to vote at the meeting.
Proxies may be marked “FOR,” “AGAINST” or “WITHHOLD/ABSTAIN.” Abstentions/withholding and broker non-votes are counted for purposes of establishing a quorum, but they are not counted as votes cast for or against a proposal.
Solicitation of Proxies
The cost of soliciting proxies will be borne by Primo. In addition, Primo may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation materials to such beneficial owners. Proxies may also be solicited by certain of our directors, officers and employees, without additional compensation, personally or by telephone, telegram, letter or facsimile. We have hired MacKenzie Partners, Inc., a professional soliciting organization, to assist us in distributing proxy solicitation materials and responding to information requests from shareowners with respect to the materials. For these services, MacKenzie Partners, Inc. will be paid a fee of $12,500, plus limited reimbursement for out-of-pocket expenses.
Please Complete Your Proxy
Our management, with the support of the Board, requests that you fill out your proxy to ensure your votes are cast at the meeting. This solicitation of your proxy (your vote) is made on behalf of management and the Board.
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PROCEDURE FOR CONSIDERING SHAREOWNER PROPOSALS
If you want to propose any matter for inclusion in our 2022 proxy statement, it must be received by our Chief Legal Officer and Secretary no later than November 25, 2021 at Primo Water Corporation, 4221 W. Boy Scout Blvd., Suite 400, Tampa, Florida 33607.
Our by-laws fix a deadline by which shareowners must submit director nominations prior to any meeting of shareowners. In the case of annual meetings, advance notice must be delivered to us not less than 30 nor more than 60 days prior to the date of the annual meeting; provided, however, that if the annual meeting is called for a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, advance notice may be made not later than the close of business on the 10th day following the date on which the public announcement of the date of the annual meeting is first made by us. In the case of a special meeting of shareowners (which is not also an annual meeting), advance notice must be delivered to us no later than the close of business on the 15th day following the day on which the public announcement of the date of the special meeting is first made by us. Our by-laws also require any shareowner making a director nomination to provide certain important information about its nominees with its advance notice. Only shareowners who comply with these requirements will be permitted to nominate directors to the Board unless the “advance notice” requirements of our by-laws are waived by the Board in its sole discretion. You are advised to review our by-laws, which contain additional requirements about advance notice of director nominations.
If the Continuance is approved and effected, our by-laws will have substantially similar provisions relating to advance notice as described above.
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PRINCIPAL SHAREOWNERS
We are not aware of any person who, as of March 15, 2021, beneficially owned or exercised control or direction, directly or indirectly, over more than 5% of our common shares except as set forth below:
Name and Address
Nature of Ownership or
Control
Number of
Shares
Percentage of
Class(1)
BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055
Beneficial ownership
11,044,035
​6.87%
Nitorum Capital, L.P.(3)
450 Park Avenue, 7th Floor
New York, New York 10022
​Beneficial ownership
10,546,115
​6.56%
The Vanguard Group Inc.(4)
100 Vanguard Blvd.
Malvern, PA 19355
Beneficial ownership
9,510,432
​5.91%
Integrated Core Strategies (US) LLC(5)
c/o Millennium Management LLC
666 Fifth Avenue
New York, New York 10103
Beneficial ownership
8,254,613
​5.13%
(1)
Percentage of class is based on 160,811,933 shares outstanding as of March 15, 2021.
(2)
Based on information reported in a Schedule 13G filed by BlackRock, Inc. on February 2, 2021 with the Securities and Exchange Commission (the “SEC”). As reported in such filing, BlackRock, Inc. is the beneficial owner of 11,044,035 shares, with sole voting power with respect to 10,834,270 shares and sole dispositive power with respect to 11,044,035 shares.
(3)
Based on information reported in a Schedule 13G/A filed jointly by Nitorum Capital, L.P. (“Nitorum Capital”), Nitorum GP, LLC (“Nitorum GP”), and Mr. Seth Rosen on February 16, 2021 with the SEC. As disclosed in the Schedule 13G/A, Nitorum Fund, L.P. and Nitorum Master Fund, L.P. (together, the “Nitorum Funds”) hold the common stock directly. Nitorum Capital serves as the investment adviser to the Nitorum Funds, Nitorum GP serves as the general partner of the Nitorum Funds, and Mr. Rosen serves as the Managing Partner of Nitorum Capital and the Managing Member of Nitorum GP. As indicated in the Schedule 13G/A, each of Nitorum Capital, Nitorum GP and Mr. Rosen have shared voting power and shared dispositive power over 10,546,115 shares.
(4)
Based on information reported in a Schedule 13G filed by The Vanguard Group Inc. (“Vanguard Group”) on February 10, 2021 with the SEC. As reported in such filing, the Vanguard Group is the beneficial owner of 9,510,432 shares, with shared voting power with respect to 785,560 shares, sole dispositive power with respect to 8,858,460 shares and shared dispositive power with respect to 651,972 shares.
(5)
Based on information reported in a Schedule 13G filed jointly by Integrated Core Strategies (US) LLC, Millennium Management LLC, Millennium Group Management LLC, and Israel A. Englander, on June 30, 2020 with the SEC. As reported in such filing, each of the reporting persons and entities listed in the filing are the beneficial owners of 8,254,613 shares, with shared voting power and shared dispositive power with respect to 3,065,757 shares.
FINANCIAL STATEMENTS
At the meeting, we will submit to our shareowners Primo’s annual consolidated financial statements for the year ended January 2, 2021, and the related report of Primo’s independent registered certified public accounting firm. No vote will be taken regarding the financial statements.
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ELECTION OF DIRECTORS
The ESG and Nominating Committee of the Board (the “ESG and Nominating Committee”) reviews annually the qualifications of persons proposed for election to the Board and submits its recommendations to the Board for consideration.
The ESG and Nominating Committee believes that the Board should be comprised of directors with a broad range of experience and expertise. The following table reflects the diverse skill set requirements of the Board and identifies the specific experience and expertise brought by each individual director nominee.
 
Industry
Experience
International
Experience
Executive
Experience
Investment
Banking/Private
Equity/M&A
Experience
Finance
Accounting
Legal
Governance
Britta Bomhard
 
X
X
X
 
 
 
X
Susan E. Cates
X
X
X
X
X
X
 
X
Jerry Fowden
X
X
X
X
X
 
 
X
Stephen H. Halperin
 
X
 
X
 
 
X
X
Thomas J. Harrington
X
X
X
X
X
 
 
X
Betty Jane Hess
 
X
X
X
 
 
 
X
Gregory Monahan
 
 
 
X
X
X
 
X
Mario Pilozzi
X
X
X
 
X
 
 
X
Billy D. Prim
X
X
X
X
 
 
 
X
Eric Rosenfeld
 
X
 
X
X
 
 
X
Graham W. Savage
 
 
X
X
X
X
 
X
Steven P. Stanbrook
 
X
X
X
X
 
 
X
In the opinion of the ESG and Nominating Committee and the Board, each of the twelve nominees for election as a director is well qualified to act as a director of Primo and, together, the nominees bring the mix of independence, diversity, expertise and experience necessary for the Board and its committees to function effectively. Our approach to corporate governance and the roles of the Board and its committees are described under “Corporate Governance” on page 53 of this proxy statement.
During 2020, the Board held nine meetings. Each of our incumbent directors attended, in person or by telephone, 75% or more of the applicable meetings of the Board and committees on which they served in 2020.
Set forth below is certain information concerning our nominees for election as directors of Primo, including information regarding each person’s service as a director, committee membership, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the ESG and Nominating Committee and the Board to determine that the person should serve as a director of Primo. Because Primo is incorporated under the Canadian Business Corporations Act, we are required to have at least 25% of our directors be Canadian residents. The directors who are Canadian residents are identified below. If elected, each director will hold office until the next annual meeting of shareowners.
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The Board has considered the independence of each of the nominees for election as directors of Primo for purposes of the rules of the SEC, New York Stock Exchange and National Instrument 58-101—Disclosure of Corporate Governance Practices (“NI 58-101”) of the Canadian Securities Administrators. All nominees are independent except for Mr. Harrington, our Chief Executive Officer, Mr. Fowden, our current Chairman of the Board and former Chief Executive Officer and Executive Chairman of the Board, and Mr. Prim, former Executive Chairman of the legacy Primo business. See “Certain Relationships and Related Transactions” on page 21 of this proxy statement for further discussion of the Board’s determinations as to independence.
Nominee
Committee Membership
Britta Bomhard, 52, of Princeton, New Jersey, U.S.A., is the Executive Vice President and Chief Marketing Officer of Church & Dwight Co., Inc., an S&P 500 company and maker of Arm & Hammer baking soda and other branded household, personal care and specialty products. She has held this position since 2016. She previously held the role of President of Europe at Church & Dwight from 2013 to 2016. From 2005 to 2013, Ms. Bomhard held the general manager role for Energizer Holdings, Inc. in Spain & Portugal and Nordics & Austria as well as a variety of marketing roles. Prior to Energizer, Ms. Bomhard worked for Wella AG and GlaxoSmithKline in their marketing organizations. Ms. Bomhard has served on our Board since November 2018. The Board nominated Ms. Bomhard to be a director because of her background in international business with extensive experience in strategic planning, sales and marketing, operational improvement and acquisition integration.
ESG and Nominating Committee
Susan E. Cates, 50, of Chapel Hill, North Carolina, U.S.A., is a Partner of Leeds Equity Partners, a private equity firm investing in the Knowledge Industries, and the Managing Partner of Leeds Illuminate, the firm’s growth equity investment entity. She serves on the Board of Advisors at Kenan-Flagler Business School at the University of North Carolina at Chapel Hill, where she co-chaired the Nominations and Governance Committee from 2016 through 2020. Ms. Cates served on the board of the legacy Primo business for six years prior to our acquisition of such business. She served on the audit committee of that board and was appointed lead independent director in January 2019. Ms. Cates served as the Chief Executive Officer of the Association of College and University Educators from 2019 to 2021, and as Chief Operating Officer of 2U, Inc., a leading provider of digital education services to universities around the world, from 2016 to 2017. Prior to joining 2U, Ms. Cates served as the President of Executive Development at UNC’s Kenan-Flagler Business School from 2008 to 2016, and as the founding Executive Director of MBA@UNC from 2010 to 2016. Prior to joining UNC, Ms. Cates was a partner with Best Associates, a Dallas-based private equity firm, where she led the identification, acquisition and oversight of multiple domestic and international companies operating in the education sector, including leading M&A efforts for Best Associates’ largest portfolio company and closing a series of acquisitions and partnerships in South America. Prior to joining Best Associates, she co-founded ThinkEquity Partners, a boutique investment bank in New York, with former colleagues from Merrill Lynch & Co. At ThinkEquity, Ms. Cates headed the education investment banking practice with responsibility for business development, client relationships and deal execution. Prior to co-founding ThinkEquity, she worked in investment banking at Merrill Lynch in New York, as well as in corporate lending at Wachovia Bank in Atlanta. She has served on our Board since May 2020. The Board nominated Ms. Cates to be a director because it believes that her extensive executive, financial and transactional experience, along with her knowledge of the legacy Primo business, will be valuable assets to the Board.
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Nominee
Committee Membership
Jerry Fowden, 64, of St. Petersburg, Florida, U.S.A., was our Chief Executive Officer from 2009 until the end of 2018, at which point he became our Executive Chairman. Beginning in the second quarter of 2020, he transitioned to the role of Chairman. Prior to his service as our Chief Executive Officer, he served as President of our international operating segment, Interim President North America and Interim President of our UK and European business from 2007 to 2009. Prior to joining Primo, Mr. Fowden served as Chief Executive Officer of Trader Media Group (now known as Autotrader plc) and was a member of the Guardian Media Group plc’s board of directors from 2005 to 2007. Prior to this time, Mr. Fowden served in a variety of roles at multiple companies, including global Chief Operating Officer of ABInBev S.A. Belgium, an alcoholic beverage company, Chief Executive Officer of Bass Brewers Ltd., a subsidiary of AB InBev S.A. Belgium, Managing Director of the Rank Group plc’s Hospitality and Holiday Division and member of the Rank Group plc’s board of directors, Chief Executive Officer of Hero AG’s European beverage operations and various roles within PepsiCo Inc.’s beverage operations and Mars, Incorporated’s pet food operations. Mr. Fowden currently serves on the board of directors of Constellation Brands Inc., a premium alcoholic beverage company, and is a member of its Corporate Governance Committee and Chair of its Human Resources Committee. Mr. Fowden also serves on the board of directors of British American Tobacco p.l.c., a leading consumer goods company, and is a member of its Audit Committee and its Nominations Committee. Mr. Fowden previously served as a member of the board of directors of the American Beverage Association and the British Soft Drinks Association. He has served on our Board since 2009. The Board nominated Mr. Fowden to be a director because he is our former Chief Executive Officer and has extensive international business and industry experience.
Stephen H. Halperin, 71, of Toronto, Ontario, Canada, is of counsel at the law firm of Goodmans LLP. He was a partner with Goodmans from 1987 until his retirement from the partnership at the end of 2017. He is a member of the Board of Governors of McGill University and the nominating, governance and ethics committee of that board, and is on the board of directors of Our Family Office Ltd, a private company registered as an investment advisor under Canadian law. Mr. Halperin previously served on the board of trustees of KCP Income Fund, a custom manufacturer of national brand and retailer brand consumer products, and on the board of directors of Gluskin Sheff + Associates, Inc., a TSX-listed wealth management company. He has also served on the boards of five other publicly listed issuers. He has served on our Board since 1992. The Board nominated Mr. Halperin to be a director because he is an expert in Canadian corporate law, with over 40 years of experience counseling boards and senior management regarding corporate governance, mergers and acquisitions, compliance, disclosure, international business conduct, capital markets, corporate strategy and other relevant issues. Mr. Halperin is a Canadian resident.
Chair, Human Resources and Compensation Committee; ESG and Nominating Committee
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Nominee
Committee Membership
Thomas J. Harrington, 63, of Tampa, Florida, U.S.A., was appointed as our Chief Executive Officer effective as of the beginning of 2019. Prior to his appointment, Mr. Harrington served as the Chief Executive Officer of our North America business unit since our acquisition of DS Services in December 2014 and was appointed President Route Based Services in July 2016. Prior to the acquisition, Mr. Harrington served in various roles with DS Services from 2004 to 2014, including Chief Executive Officer, President, Chief Operating Officer, West Division President, and Senior Vice President, Central Division. Prior to joining DS Services, Mr. Harrington served in various roles with Coca-Cola Enterprises, Inc. including Vice President and General Manager of Coca-Cola Enterprises New York and Chicago divisions. He also served in various sales and marketing roles with Pepperidge Farm from 1979 to 1985. Mr. Harrington previously served as a member of the board of directors of the National Automatic Merchandising Association, the International Bottled Water Association and the Water Quality Association. He has served on our Board since the beginning of 2019. The Board nominated Mr. Harrington to be a director because he is our Chief Executive Officer and has extensive international business and industry experience.
Betty Jane (BJ) Hess, 72, of Naples, Florida, U.S.A., was Senior Vice President, Office of the President, of Arrow Electronics, Inc., an electronics distributor listed on the NYSE, for five years prior to her retirement in 2004. At Arrow Electronics, Inc., Ms. Hess was responsible for global operations and led or participated in the integration of 62 acquisitions in the United States, Europe and Asia over a 20-year period. She served on the board of directors of the ServiceMaster Company, a company providing home maintenance and lawn care services, and Harvest Power, a firm specializing in the management of organic waste. Ms. Hess is the protagonist in case studies at Harvard Business School and MIT Sloan School of Management on integration strategy and operational excellence in the supply chain at Arrow Electronics, Inc. She has served on our Board since 2004. The Board nominated Ms. Hess to be a director because it believes that her executive experience, acquisition integration expertise, leadership and communication skills are valuable assets to the board.
Human Resources and Compensation Committee
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Nominee
Committee Membership
Gregory Monahan, 47, of Darien, Connecticut, U.S.A., has been a Senior Managing Director of Crescendo Partners, L.P., a New York-based investment firm, since December 2014. Prior to December 2014, he served as Managing Director of Crescendo Partners and has held various positions at Crescendo Partners since May 2005. He is also a Managing Member and Portfolio Manager for Jamarant Capital, LP, a private investment firm. Previously, he was co-founder of Bind Network Solutions, a consulting firm focused on network infrastructure and security. Mr. Monahan is currently on the board of directors of Absolute Software Corp., a leader in firmware-embedded endpoint security and management for computers and ultra-portable devices. He previously served on the board of directors of BSM Technologies Inc., a global commercial fleet telematics provider, COM DEV International Ltd., a supplier of space equipment and services, SAExploration Holdings Inc., a seismic data services company, ENTREC Corporation, a heavy haul and crane services provider, Bridgewater Systems, a telecommunications software provider, and O’Charley’s Inc., a multi-concept restaurant company. Mr. Monahan has served on our Board since June 2008. The Board nominated Mr. Monahan to be a director because it believes he possesses valuable financial expertise, including extensive expertise with capital markets transactions and investments in both public and private companies. He has served in managing roles in investment and technology consulting firms, which experience informs his judgment and risk assessment as a board member.
Audit Committee
Mario Pilozzi, 74, of Oakville, Ontario, Canada, was, until January 2008, President and Chief Executive Officer of Wal-Mart Canada Corp. He joined Wal-Mart Canada in 1994 as Vice-President of Hardline Merchandise and was promoted to Senior Vice-President of Merchandise and Sales, and later Chief Operating Officer, before serving as President and Chief Executive Officer. Prior to joining Wal-Mart Canada, Mr. Pilozzi held a broad range of positions with Woolworth Canada Inc. spanning more than 30 years, including the positions of Vice-President of Hardline Merchandise, Administrator of Store Openings, District Manager, Store Manager and several other key roles in Woolworth’s variety and discount-store divisions. Since his retirement in 2008, Mr. Pilozzi has served as a consultant for WalMart’s businesses in Puerto Rico, Brazil, Argentina, Chile, Mexico, China and Japan. Mr. Pilozzi has served on our Board since June 2008. The Board nominated Mr. Pilozzi to be a director because he has extensive executive experience with well-known, multinational corporations and understands the retail sales business of our retailer partners. Mr. Pilozzi is a Canadian resident.
Audit Committee
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Nominee
Committee Membership
Billy D. Prim, 65, of Palm Beach Gardens, Florida, U.S.A., founded the legacy Primo business in 2004 and served on that board since inception and served as Executive Chairman from June 2017 until the closing of our acquisition of the legacy Primo business in March 2020. Prior to founding legacy Primo, Mr. Prim founded Blue Rhino Corporation, a provider of propane cylinder exchange and complementary propane and non-propane products, in March 1994 and served as its Chief Executive Officer and Chairman of the board. Mr. Prim led Blue Rhino’s initial public offering in May 1998 and remained its Chief Executive Officer until April 2004, when Blue Rhino was acquired by Ferrellgas Partners, L.P. at which time he was elected to the board of directors of Ferrellgas on which he served until November 2008. Mr. Prim previously served on the board of directors of Southern Community Bank and Trust from 1996 through 2005, its previous parent company, Southern Community Financial Corporation, and Towne Park Ltd. Mr. Prim also serves on the Wake Forest School of Business Board of Visitors and the Wake Forest Institute for Regenerative Medicine Advisory Board. He has served on our Board since May 2020. The Board nominated Mr. Prim to be a director because he has extensive business, managerial and leadership experience, as well as extensive knowledge of the legacy Primo business and substantial corporate and shareholder governance expertise.
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Nominee
Committee Membership
Eric Rosenfeld, 63, of New York, New York, U.S.A., has been the President and Chief Executive Officer of Crescendo Partners, L.P., a New York-based investment firm, since its formation in November 1998. Prior to forming Crescendo Partners, he held the position of Managing Director at CIBC Oppenheimer and its predecessor company Oppenheimer & Co., Inc. for 14 years. Mr. Rosenfeld currently serves as Chairman Emeritus for CPI Aerostructures Inc., a company engaged in the contract production of structural aircraft parts. He is also on the board at Pangaea Logistics Solutions Ltd., a logistics and shipping company, and Aecon Group Inc., a construction company. In addition, Mr. Rosenfeld is the CEO of Allegro Merger Corp., a shell company, and the Chief SPAC Officer of Legato Merger Corp., a special purpose acquisition company. Mr. Rosenfeld has also served as Chairman and CEO for Arpeggio Acquisition Corporation, Rhapsody Acquisition Corporation, Trio Merger Corp., Quartet Merger Corp. and Harmony Merger Corp., all blank check corporations that later merged with Hill International, Primoris Services Corporation, SAExploration Holdings Inc., Pangaea Logistics Solutions Ltd. and NextDecade Corporation, respectively. He was also a director of Canaccord Genuity Group Inc., a full-service financial services company, NextDecade Corporation, a development stage company building natural gas liquefaction plants, Absolute Software Corp., a leader in firmware-embedded endpoint security and management for computers and ultraportable devices, AD OPT Technologies Inc., an airline crew planning service, Sierra Systems Group Inc., an information technology, management consulting and systems integration firm, Emergis Inc., an electronic commerce company, Hill International, a construction management firm, Matrikon Inc., a company that provides industrial intelligence solutions, DALSA Corp., a digital imaging and semiconductor firm, HIP Interactive, a video game company, GEAC Computer Corporation, a software company, Computer Horizons Corp. (Chairman), an IT services company, Pivotal Corp, a cloud software firm, Call-Net Enterprises, a telecommunication firm, Primoris Services Corporation, a specialty construction company, and SAExploration Holdings Inc., a seismic exploration company. Mr. Rosenfeld is a regular guest lecturer at Columbia Business School and has served on numerous panels at Queen’s University Business Law School Symposia, McGill Law School, the World Presidents’ Organization and the Value Investing Congress. He is a senior faculty member at the Director’s College. He has also been a regular guest host on CNBC. Mr. Rosenfeld has served on our Board since June 2008 and is our Lead Independent Director. The Board nominated Mr. Rosenfeld to be a director because he has extensive experience serving on the boards of multinational public companies and in capital markets and mergers and acquisitions transactions. Mr. Rosenfeld also has valuable experience in the operation of a worldwide business faced with a myriad of international business issues. Mr. Rosenfeld’s leadership and consensus-building skills, together with his experience as senior independent director, make him an effective Lead Independent Director for the Board.
Chair, ESG and Nominating Committee
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Nominee
Committee Membership
Graham W. Savage, 71, of Toronto, Ontario, Canada, is a corporate director. Between 2002 and 2007, Mr. Savage served as the Chairman of Callisto Capital L.P., a Toronto-based private equity firm. Prior to this, since 1998, Mr. Savage was Managing Director at Savage Walker Capital Inc., Callisto Capital L.P.’s predecessor. Between 1975 and 1996, Mr. Savage was with Rogers Communications Inc. in various positions culminating in being appointed the Senior Vice President, Finance and Chief Financial Officer, a position he held for seven years. In addition, Mr. Savage serves on the board of Postmedia Network Canada Corp. He has also previously served on the boards of Canadian Tire Corporation, Rogers Communications Inc., Alias Corp., Lions Gate Entertainment Corp. and Royal Group Technologies Limited, among others. Mr. Savage has served on our Board since February 2008. The Board nominated Mr. Savage to be a director because of his financial expertise, including expertise in the area of private equity. He is our audit committee financial expert and has served as Chief Financial Officer of a large public company. Mr. Savage also has board and committee experience at both public and private companies, and his extensive executive experience brings strong financial and operational expertise to the Board. Mr. Savage is a Canadian resident.
Chair, Audit Committee
Steven P. Stanbrook, 63, of Racine, Wisconsin, U.S.A., is a corporate director, currently serving on the boards of directors for Group 1 Automotive, Inc., an international automotive retailer listed on the NYSE, and Imperial Brands PLC, a multinational company listed on the London Stock Exchange. Additionally, he is an Executive Advisory Partner at Wind Point Partners, a Chicago-based private equity firm, where he serves on the Board of Directors of one of their portfolio companies, Voyant Beauty LLC, a contract manufacturer of personal and beauty care products. Mr. Stanbrook previously served on the board of directors of The Vollrath Company, LLC, a privately owned commercial and institutional foodservice equipment supplier, Hewitt Associates, Inc., a provider of human capital and management consulting services, and Chiquita Brands International, Inc., a producer and distributor of fresh fruit and produce, fruit ingredients and other processed foods, both listed on the NYSE. From 1996 to 2015, Mr. Stanbrook served in various roles at S.C. Johnson & Son, Inc., a global manufacturer of consumer products, including Chief Operating Officer, International Markets. Prior to S.C. Johnson & Son, Inc., he served as Chief Executive Officer of Sara Lee Bakery. Mr. Stanbrook has served on our Board since November 2018. The Board nominated Mr. Stanbrook to be a director because he has extensive executive experience gained through his various roles with international consumer packaged goods businesses and extensive governance experience gained from serving on the boards of multinational companies.
Human Resources and Compensation Committee
It is intended that each director will hold office until the close of business of the 2022 annual meeting or until his or her earlier resignation, retirement or death. Pursuant to Primo’s Corporate Governance Guidelines, no director may stand for election or re-election to the Board after the director has reached the age of 75 (a director that turns 75 during his or her term, however, may serve out the remainder of that term). Other than Mr. Pilozzi, no nominee identified above will reach the age of 75 prior to the date of the 2022 annual meeting. If elected at the 2021 Annual and Special Meeting, Mr. Pilozzi will serve out the remainder of his term and will not stand for re-election at the 2022 annual meeting.
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Unless otherwise instructed, the persons named in the accompanying form of proxy intend to vote FOR the election to the Board of the twelve nominees who are identified above. Management and the Board do not contemplate that any of the nominees will be unable to serve as a director. If, for any reason at the time of the meeting, any of the nominees are unable to serve, then the persons named in the accompanying form of proxy will, unless otherwise instructed, vote at their discretion for a substitute nominee or nominees.
Cease Trade Orders, Corporate and Personal Bankruptcies, Penalties and Sanctions
To the knowledge of Primo, none of its directors and officers is, or within 10 years prior to the date hereof has been, a director, chief executive officer or chief financial officer of any company (including Primo) that (i) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the director or officer was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the director or officer ceased to be a director, chief executive officer or chief financial officer and that resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
Except as set forth below, to the knowledge of Primo, none of its directors and officers is, or within 10 years prior to the date hereof has been, a director or executive officer of any company (including Primo) that, (i) while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (ii) has, within 10 years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or executive officer.
Mr. Savage resigned as a director of Sears Canada Inc. (“Sears”) on December 31, 2020. Prior to that time, he served on the Sears’ board since April 2015. On June 22, 2017, Sears announced that it and certain of its subsidiaries (the “Sears Group”) had been granted an order from the Ontario Superior Court of Justice (Commercial List) that, among other things, granted the Sears Group protection from their creditors under the Companies’ Creditors Arrangement Act (Canada). On June 29, 2017, Sears received notice that the Continued Listings Committee of the Toronto Stock Exchange (the “TSX”) had determined to delist Sears’ common shares effective at the close of market on July 28, 2017. Sears did not appeal the decision. Subsequently, on October 16, 2017, Sears announced that it had received approval from the Ontario Superior Court of Justice to proceed with a liquidation of all of its inventory and furniture, fixtures and equipment located at its remaining stores.
To the knowledge of Primo, none of its directors and officers has been subject to (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to invest in Primo.
Majority Voting and Director Resignation Policy
Pursuant to Primo’s Majority Voting and Director Resignation Policy, if a nominee in an uncontested election does not receive the vote of at least the majority of the votes cast, the director is required to promptly deliver a written notice to the ESG and Nominating Committee offering to resign from the Board. Following receipt of an offer of resignation, the ESG and Nominating Committee must consider whether or not to accept the offer of resignation and recommend to the Board whether or not to accept it. With the exception of exceptional circumstances that would warrant the continued service of the applicable director on the Board, the ESG and Nominating Committee is expected to accept and recommend acceptance of the resignation by the Board. In considering whether or not to accept the resignation, the ESG and Nominating Committee may consider factors provided as guidance by the TSX and all factors deemed relevant by members of the ESG and Nominating Committee including, without limitation, any stated reasons why shareowners withheld votes from the election of that nominee, the length of service and the qualifications of the director whose resignation has been submitted, such director’s contributions to Primo, Primo’s
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governance guidelines and Primo’s obligations under applicable laws. The Board must make its decision on the ESG and Nominating Committee’s recommendation within 90 days following the meeting of Primo’s shareowners. In considering the ESG and Nominating Committee’s recommendation, the Board will evaluate the factors considered by the ESG and Nominating Committee and such additional information and factors that the Board deems relevant and, with the exception of exceptional circumstances that would warrant the continued service of the applicable director on the Board, the Board will accept the resignation. If an offer of resignation is accepted in accordance with this policy, the Board may in accordance with the provisions of Primo’s articles and by-laws appoint a new director to fill any vacancy created by the resignation or reduce the size of the Board.
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COMPENSATION OF DIRECTORS
We use a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on the Board. We set director compensation at a level that reflects the significant amount of time and high skill level required of directors in performing their duties for Primo and for its shareowners. In 2020, other than Thomas J. Harrington, our Chief Executive Officer, and Jerry Fowden, our Chairman of the Board and former Chief Executive Officer and Executive Chairman of the Board, no employees served as directors. Mr. Harrington was not compensated for serving as a director in 2020. His compensation as Chief Executive Officer during 2020 has been fully reflected in the Summary Compensation Table on page 38 of this proxy statement. Mr. Fowden transitioned from the role of Executive Chairman to Chairman of the Board on March 28, 2020. His compensation for serving as a director is included in the table below. We provided the following annual compensation to our non-employee directors in 2020:
Name
Fees Earned or
Paid in Cash
($)(3)(4)
Stock Awards
($)(5)
Total
($)
Britta Bomhard
83,250
120,000
203,250
Susan E. Cates(1)
54,865
120,000
174,865
Jerry Fowden
162,000
131,831(6)
293,831(7)
Stephen H. Halperin(2)
97,125
120,000
217,125
Betty Jane Hess
83,250
120,000
203,250
Gregory Monahan
83,250
120,000
203,250
Mario Pilozzi(2)
83,250
120,000
203,250
Billy D. Prim(1)
54,865
120,000
174,865
Eric Rosenfeld
120,250
120,000
240,250
Graham W. Savage(2)
101,750
120,000
221,750
Steven P. Stanbrook
83,250
120,000
203,250
(1)
Ms. Cates and Mr. Prim were appointed to the Board on May 5, 2020.
(2)
Messrs. Halperin, Pilozzi and Savage are compensated in Canadian dollars. The amounts paid to such individuals are converted from the U.S. dollar amounts listed above to Canadian dollar amounts at the U.S. to Canadian conversion rate in effect at the time of payment.
(3)
As part of our broad-based effort to respond to the coronavirus (COVID-19) outbreak, all members of our Board voluntarily agreed to reduce their second quarter 2020 director cash compensation by 30%.
(4)
Non-employee directors are also reimbursed for certain business expenses, including travel expenses, in connection with Board and committee meeting attendance. These amounts are not included in the above table.
(5)
Represents common shares issued in payment of the annual director long-term incentive fee for non-employee directors. The values of the awards reflect the grant date fair values, as computed in accordance with FASB ASC Topic 718 (“ASC 718”).
(6)
Includes (1) a grant with a grant date fair value of $11,831, which represents the fee for services rendered from March 28, 2020, the date Mr. Fowden transitioned to the role of Chairman of the Board, to May 5, 2020, the date of the 2020 Annual Meeting of Shareowners, and (2) a grant with a grant date fair value of $120,000, which represents the fee for services from the date of the 2020 Annual Meeting of Shareowners to the date of the 2021 Annual and Special Meeting of Shareowners.
(7)
Mr. Fowden served as Executive Chairman in the first quarter of fiscal 2020, during which time he received $289,190 as compensation for that role.
Directors’ Compensation Schedule
The compensation of directors is considered in light of the overall governance structure of Primo. Compensation for directors is recommended to the Board by the Human Resources and Compensation Committee (the “Compensation Committee”) and is approved by the independent directors. Director compensation is set solely on an annual fee basis (paid quarterly in arrears) and per-meeting attendance fees are not paid. Generally, directors are not separately compensated for service on Board committees in roles other than the committee chair.
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During 2020, directors were entitled to the following annual fees:
Category
Annual Fees(1)
Annual Board retainer
$90,000
Annual fee for the non-executive chair of the Board
$150,000
Annual fee for chairing the:
 
Audit Committee
$20,000
Compensation Committee
$15,000
ESG and Nominating Committee
$10,000
Annual fee for the lead independent director
$30,000
Annual long-term equity incentive fee (stock award)
$120,000
(1)
As part of our broad-based effort to respond to the coronavirus (COVID-19) outbreak, all members of our Board voluntarily agreed to reduce their second quarter 2020 director cash compensation by 30%.
Share Ownership Requirements for Board Members
The Board has adopted minimum share ownership requirements for non-management directors. Under the requirements, each such director must own common shares having a minimum aggregate value equal to five times his or her annual board retainer fee (excluding additional committee or chairman retainers). The Compensation Committee or the Board may, from time to time, reevaluate and revise these guidelines to give effect to changes in Primo’s common share price or capitalization. The value of shares owned by each director is recalculated on an annual basis on December 31 of each year. Compliance with the requirements is measured on December 31 of each year and reported to the Compensation Committee. Directors are not required to attain the minimum ownership level by a particular deadline. However, until the guideline amount is achieved, such directors are required to retain an amount equal to 100% of net shares received as equity compensation. Once a director achieves the applicable ownership guideline, such director will be considered in compliance, regardless of any changes in the price of Primo common shares, so long as such director continues to own at least the number of Primo common shares owned in order to achieve the applicable guideline. “Net shares” are defined as those shares that remain after shares are sold or netted to pay the exercise price of stock options (if applicable) and taxes payable upon the grant of a stock payment or the vesting of restricted shares, restricted share units, performance shares, or performance share units or the exercise of stock options or stock appreciation rights. Failure to meet or to show sustained progress toward meeting the guidelines may be a factor considered by the Compensation Committee in determining future long-term incentive equity grants to such directors. These requirements are designed to ensure that directors’ long-term interests are closely aligned with those of our shareowners. Shares purchased on the open market may be sold in compliance with Primo’s policies and applicable securities law.
Each of the incumbent non-management directors, other than Britta Bomhard, who was appointed to the Board on November 5, 2018, holds common shares in excess of the threshold required by the share ownership guidelines as of December 31, 2020.
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SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table and the notes that follow show the number of our common shares beneficially owned as of March 15, 2021 by each of our directors and the individuals named in the Summary Compensation Table, as well as by our current directors, director nominees and executive officers as a group.
Name
Common Shares
Beneficially Owned,
Controlled or Directed(1)
Options
Exercisable within
60 days
Total
Common Shares
Percentage of Class(2)
Britta Bomhard
22,661
22,661
*
Susan E. Cates
32,515
32,515
*
Jerry Fowden(3)
1,346,464
2,068,423
3,414,887
2.12%
Stephen H. Halperin
118,966
118,966
*
Betty Jane Hess
108,426
108,426
*
Gregory Monahan(4)
156,629
156,629
*
Mario Pilozzi
160,176
160,176
*
Billy D. Prim(5)
1,111,429
1,111,429
*
Eric Rosenfeld(6)
843,808
843,808
*
Graham W. Savage
51,672
51,672
*
Steven P. Stanbrook
36,161
36,161
*
Thomas J. Harrington(3)(7)
480,289
605,824
1,086,113
*
Jay Wells(3)
242,365
675,113
917,478
*
Charles R. Hinson(8)
124,999
69,962
194,961
*
David Muscato(3)
37,962
193,340
231,302
*
Marni Morgan Poe(3)
198,099
454,380
652,479
*
William “Jamie” Jamieson(3)
18,796
29,841
48,637
*
Directors, director nominees and executive officers as a group (consisting of 21 persons, including the directors and executive officers named above)
5,267,099(2)
4,215,833
9,482,932
5.90%
*
Less than 1%
(1)
Each director and officer has provided the information on shares beneficially owned, controlled or directed. The shareowners named in this table have sole voting and investment power over all shares shown as beneficially owned by them except as otherwise noted in the footnotes below.
(2)
Percentage of class is based on 160,811,933 shares outstanding as of March 15, 2021.
(3)
Amounts reported in the above table do not include unvested time-based restricted share units included in the amount of securities beneficially owned by such person as reported on Form 4.
(4)
Includes 27,280 shares indirectly held by Mr. Monahan through Jamarant Capital, L.P.
(5)
Includes (a) 1,073,301 common shares held by the Billy D. Prim Revocable Trust (as to which he has shared voting and investment power); (b) 15,887 common shares held by 2010 Irrevocable Trust fbo Sarcanda W. Bellissimo (as to which he has shared voting and investment power); (c) 15,887 common shares held by 2010 Irrevocable Trust fbo Anthony Gray Westmoreland (as to which he has shared voting and investment power); (d) 3,177 common shares held by the 2010 Irrevocable Trust fbo Jager Grayln Dean Bellissimo (as to which he has shared voting and investment power); and (e) 3,177 common shares held by the 2010 Irrevocable Trust fbo Joseph Alexander Bellissimo (as to which he has shared voting and investment power).
(6)
Includes 245,033 shares indirectly held by Mr. Rosenfeld through Crescendo Partners III, L.P. and 172,687 shares indirectly held by Mr. Rosenfeld through Crescendo Partners, II, L.P. Series II.
(7)
Includes 251,493 shares held indirectly by Mr. Harrington through TAH Capital LLC.
(8)
On February 28, 2020, we completed the sale of all of the equity of our S&D Coffee and Tea business to Westrock Coffee Company, LLC, and Mr. Hinson ceased to be an executive officer of Primo on that date. Information regarding his share ownership is based on our corporate records.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board has determined that nine of the nominees for director, Britta Bomhard, Susan E. Cates, Stephen H. Halperin, Betty Jane Hess, Gregory Monahan, Mario Pilozzi, Eric Rosenfeld, Graham W. Savage and Steven P. Stanbrook, are independent within the meaning of the rules of the SEC, NYSE and NI 58-101. A director is “independent” in accordance with the rules of the SEC, NYSE and NI 58-101 if the Board affirmatively determines that such director has no material relationship with us (either directly or as a partner, shareowner or officer of an organization that has a relationship with us). Mr. Harrington is a management director and therefore is not independent. Mr. Fowden is our current Chairman of the Board and former Chief Executive Officer and Executive Chairman of the Board. In the second quarter of 2020, Mr. Fowden transitioned to the role of Chairman of the Board, and will not be eligible to be independent for a three-year period after the date of the transition (i.e., until March 2023). Mr. Prim is the former Executive Chairman of the legacy Primo business and was considered an executive officer in such role, and therefore will not be eligible to be independent for a three-year period after the closing of the Primo acquisition (i.e., until March 2023).
Mr. Halperin is of counsel at Goodmans LLP, a law firm that provides services to Primo on a regular basis, where he previously served as a partner prior to December 31, 2017. The amount of fees earned by Goodmans LLP for legal services rendered to Primo was and has been financially immaterial to Goodmans LLP and is unrelated to Mr. Halperin’s compensation from such firm. Following his retirement from the partnership, Mr. Halperin (i) has not received and is not anticipated to receive any compensation from Goodmans LLP, other than in respect of de minimis payments on account of ongoing benefit programs; and (ii) is not involved in the management or oversight of Goodmans LLP operations. Prior to his retirement, Mr. Halperin did not provide and was not involved in the provision of legal services by Goodmans LLP to Primo, and following his retirement, he has not and does not intend to provide or be involved in the provision of such services by Goodmans LLP to Primo. The Board considered these matters and determined that Mr. Halperin is independent.
Each director and nominee for election as director delivers to Primo annually a questionnaire that includes, among other things, a request for information relating to any transactions in which both the director or nominee, or their family members, and Primo participates, and in which the director or nominee, or such family member, has a material interest. Pursuant to Primo’s Corporate Governance Guidelines and the charter of the ESG and Nominating Committee, the ESG and Nominating Committee is required to review all transactions between Primo and any related party (including transactions reported to it by a director or nominee in response to the questionnaire, or that are brought to its attention by management or otherwise), regardless of whether the transactions are reportable pursuant to Item 404 of Regulation S-K under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).
After considering advice from the ESG and Nominating Committee, the Board is required to review, and, if appropriate, approve or ratify, such related party transactions. A “related party transaction” is defined under the Corporate Governance Guidelines as any transaction in which Primo was or is to be a participant and in which any related party has a direct or indirect material interest, other than transactions that (i) are available to all employees generally, (ii) involve compensation of executive officers or directors duly authorized by the appropriate board committee, or (iii) involve reimbursement of expenses in accordance with Primo’s established policy.
A “related party” is defined under the Corporate Governance Guidelines as any person who is, or at any time since the beginning of Primo’s last fiscal year was, an executive officer or director (including in each case nominees for director), any shareowner owning in excess of 5% of Primo’s common shares, or an immediate family member of an executive officer, director, nominee for director or 5% shareowner.
An “immediate family member” is defined under the Corporate Governance Guidelines as a person’s spouse, parents, stepparents, children, stepchildren, siblings, mother- and father-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than employees) who shares such person’s home.
Management and directors must also update the Board as to any material changes to proposed transactions as they occur.
Because related party transactions potentially vary, the ESG and Nominating Committee or the Board has not to date developed a written set of standards for evaluating them, but rather addresses any such transactions on a case-by-case basis.
To the knowledge of the directors, no insider, director or proposed nominee for election as a director, or any associate or affiliate of any such persons, had any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any material transaction with Primo since January 2, 2021.
None of the directors, executive officers, employees, former executive officers, former directors or former employees of Primo has any indebtedness to Primo or any of its subsidiaries.
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COMPENSATION OF EXECUTIVE OFFICERS
Compensation Discussion and Analysis
Executive Summary
This Compensation Discussion and Analysis focuses on the compensation of our named executive officers for 2020, who were:
Thomas J. Harrington
Chief Executive Officer
Jay Wells
Chief Financial Officer
Charles R. Hinson
Chief Executive Officer—S&D Coffee and Tea (the “S&D CEO”)(1)
David Muscato
President, North America
Marni Morgan Poe
Chief Legal Officer and Secretary
William “Jamie” Jamieson
Vice President, Global Chief Information Officer
(1)
On February 28, 2020, we completed the sale of all of the equity of our S&D Coffee and Tea business to Westrock Coffee Company, LLC, and Mr. Hinson ceased to be an executive officer of Primo on that date.
Our management’s focus is on executing our vision of becoming the leading brand in the pure-play water category with a unique portfolio of sustainable drinking water solutions. In 2020, our vision was executed through a focus on several key strategies: (1) Water Your Way, (2) Category Leading Innovation, (3) Customer for Life Promise, (4) Operational Excellence, (5) ESG Leadership, and (6) Associate Experience. We believe that our named executive officers were instrumental in helping us execute our strategy in 2020, as follows:
Completed the acquisition of the legacy Primo business and divestiture of S&D, allowing us to shift to our focus to leading drinking water solutions;
Enhanced our recurring-revenue offering with Water Exchange, Water Refill and Water Dispensers to complement our Water Direct and Water Filtration solutions;
Increased household penetration of our water solutions across our global footprint;
Utilized our contact-free offering to safely support our customers’ health and wellness journeys;
Improved our digital presence with the release of our MyWater App and other digital enhancements;
Launched innovative new dispensers and water products to drive water consumption growth;
Understood customer needs and improved customer experience based on their feedback;
Leveraged our global footprint and scale to increase productivity, efficiencies and margins;
Achieved ESG milestones in 2020, as further described under the heading “Environmental, Social and Governance”; and
Cultivated an engaged workforce with a consistent set of values and behaviors all rallying around our new purpose.
The primary objectives of our executive compensation program are to attract and retain executives, provide a competitive compensation package, and motivate and reward a talented, entrepreneurial and creative executive team to execute our vision. Our methods of achieving these objectives are summarized below:
Attract and retain talented executives
Provide a competitive total compensation package by taking into account base salary, opportunities for annual performance-based cash bonus compensation, and long-term compensation in the form of equity ownership
Motivate and reward executives
Provide a significant portion of each executive’s target total compensation in the form of equity compensation
 
Balance incentives between equity-based and cash-based compensation to support a high-performing culture
Provide a competitive compensation package
Benchmark our compensation against competitors and peer group, with the ultimate objective of aligning our named executive officers’ compensation with the market median of the compensation of executives performing similar functions in the competitive market and in our peer group
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Ensure internal equity among executives
Adjust compensation based on review of job responsibilities and
individual performance in addition to market data
Align management and shareowner interests
Provide compensation based on short-term and long-term performance
objectives
Pay for performance
Provide the majority of executive pay in variable, “at-risk” incentive
awards - approximately 43% and 40% of targeted compensation in 2020
for our Chief Executive Officer and other named executive officers,
respectively, to ensure that realized pay is tied to attainment of significant
short-term and long-term operating goals
What We Do and Do Not Do. We seek to ensure that our executive compensation program is closely aligned with the interests of our shareowners by following these executive compensation best practices:
WHAT WE DO
WHAT WE DO NOT DO
Administer a robust risk management program, which includes our Compensation Committee’s oversight of the ongoing evaluation of the relationship between our compensation programs and risk, as well as the oversight of risk by the Audit Committee on behalf of the full Board pursuant to the Audit Committee Charter
Permit employees or directors to engage in any hedging or monetization transactions, short-term, or speculative transactions, or to hold Primo securities in a margin account or pledging Primo securities as collateral for a loan
Award annual incentive compensation subject to achievement of objective and pre-established performance goals tied to operational and strategic objectives
Perform stock option re-pricing without shareowner approval
Benchmark executive officer compensation around the market median on all elements of target compensation against a relevant peer group
Provide cash buyouts for underwater stock options or stock appreciation rights without shareowner approval
Include double trigger change in control vesting provisions for equity awards
Provide cash compensation upon death or disability
Engage an independent compensation consultant that does not provide any services to management and that had no relationship with management prior to the engagement
Provide excise tax gross-ups upon change in control
Use a clawback policy to allow the Board to recoup any excess annual or long-term incentive compensation paid to our current and former executive officers in the event of a required accounting restatement of a financial statement of Primo, whether or not based on misconduct, due to material non-compliance with any financial reporting requirement under the securities laws of the United States
Provide excessive perquisites
Require our directors, named executive officers, and other key employees to hold a certain amount of shares received as equity compensation from Primo, with the amount set at a particular multiple of base salary
 
 
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The charts below illustrate the target total direct compensation for 2020 for our Chief Executive Officer and the average of the other four named executive officers who remained employed with us on January 2, 2021.

As summarized in the above charts:
43% of Chief Executive Officer compensation is at-risk.
40% of average named executive officer compensation is at-risk.
59% of Chief Executive Officer compensation is long-term.
52% of average named executive officer compensation is long-term.
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Additionally, we believe that the following table is helpful in understanding the targeted versus actual payout of the performance-based cash bonuses to our named executive officers over the previous three fiscal years. This table supplements the information in the Summary Compensation Table appearing following the Compensation Discussion and Analysis.
PERFORMANCE-BASED CASH BONUS ACHIEVEMENT HISTORY
Named Executive Officer
Fiscal Year
Annual Bonus
Actual Payout
as Percent
of Target
Thomas J. Harrington
Chief Executive Officer
​2020
73.0%
2019
86.0%
2018
37.3%

Jay Wells
Chief Financial Officer
2020
73.0%
2019
86.0%
2018
91.0%

Charles R. Hinson
Chief Executive Officer—S&D Coffee and Tea
2020
(1)
2019
​131.0%
2018
76.0%

David Muscato
President, North America
2020
122.0%
2019
(2)
2018
(2)

Marni Morgan Poe
Chief Legal Officer and Secretary
2020
73.0%
2019
86.0%
2018
91.0%

William “Jamie” Jamieson
Vice President, Global Chief Information Officer
2020
73.0%
2019
(2)
2018
(2)
(1)
Mr. Hinson did not receive a performance bonus in 2020 as S&D was sold in early 2020.
(2)
Messrs. Muscato and Jamieson were not named executive officers in 2019 or 2018.
As we believe the above information indicates, Primo’s executive compensation program emphasizes compensation that is at-risk and generally only payable based on the achievement of challenging corporate and individual targets. We encourage you to read this Compensation Discussion and Analysis for details regarding our executive compensation program, including information about the 2020 compensation of the named executive officers.
Say-on-Pay and Say-on-Frequency Results
At the 2020 annual meeting of shareowners, we solicited from our shareowners an advisory vote on the compensation of our named executive officers. The shareowners voted to approve, on an advisory basis, the compensation of our named executive officers, as such information is disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative disclosure, set forth in our 2020 annual meeting proxy statement. The vote was 96.3% of the shares voting “For,” 3.6% of the shares voting “Against,” and 0.1% of the shares “Withholding” their votes.
The Compensation Committee took into account the result of the shareowner vote in determining executive compensation policies and decisions since the 2020 annual meeting of shareowners. The Compensation Committee viewed the vote as an expression of the shareowners’ general satisfaction with our current executive compensation programs.
Consistent with our shareowners’ determination, on an advisory basis, at the 2017 annual and special meeting of shareowners, the Board determined that an advisory vote on the compensation of our named executive officers will
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be conducted every year. The next advisory vote on the frequency of an advisory vote on executive compensation will take place at the 2023 annual meeting of shareowners.
Overview of Compensation Program
The Compensation Committee is responsible for overseeing Primo’s compensation reward programs, which include compensation (base salary, bonus and equity compensation) and limited perquisites as described below and as set forth in the Summary Compensation Table. In addition, the Compensation Committee is responsible for overseeing talent management and succession planning for the senior management team, as well as setting objectives and evaluating the performance of Primo’s Chief Executive Officer. To assist in executing its responsibilities, the Compensation Committee may retain independent compensation consultants, at Primo’s expense, who report solely to the Compensation Committee. The Compensation Committee is responsible for ensuring that the total compensation paid to our Chief Executive Officer and the officers who directly report to him is fair, reasonable and competitive. The Compensation Committee must recommend to the independent members of the Board, and the Board must review and, if it deems appropriate, approve any changes to our Chief Executive Officer’s compensation package. The Compensation Committee reviews and approves all compensation packages and any adjustments thereto for the direct reports. The Compensation Committee also approves any severance packages to departing direct reports, as well as the severance plans that govern the terms of the severance packages. We refer to the officers who report directly to our Chief Executive Officer as “direct reports.” In 2020, each of our named executive officers, other than Mr. Harrington, were direct reports.
Company Objectives
The primary objectives of our executive compensation program are to attract and retain executives, provide a competitive compensation package, and motivate and reward a talented, entrepreneurial and creative executive team. Our methods of achieving these objectives are summarized below:
Attract and retain talented executives
Provide a competitive total compensation package by taking into account
base salary, opportunities for annual performance-based cash bonus
compensation, and long-term compensation in the form of equity ownership
Motivate and reward executives
Provide a significant portion of each executive’s target total compensation
in the form of equity compensation
 
Balance incentives between equity-based and cash-based compensation to
support a high-performing culture
Provide a competitive compensation package
Benchmark our compensation against competitors and peer group, with
the ultimate objective of aligning our named executive officers’
compensation with the market median of the compensation of executives
performing similar functions in the competitive market and in Primo’s peer group
Ensure internal equity among executives
Adjust compensation based on review of job responsibilities and
individual performance in addition to market data
Align management and shareowner interests
Provide compensation based on short-term and long-term performance
objectives
Pay for performance
Provide the majority of executive pay in variable, “at-risk” incentive
awards - approximately 43% and 40% of targeted compensation in 2020
for our Chief Executive Officer and other named executive officers,
respectively, to ensure that realized pay is tied to attainment of significant
short-term and long-term operating goals
Setting Executive Compensation and the Role of Executive Officers in Compensation Decisions
Periodically, the Compensation Committee determines what adjustments, if any, to base salary, cash performance bonus amounts, performance targets for performance-based compensation, and the applicable levels and targets for other compensation would be appropriate for our Chief Executive Officer, and recommends any adjustments to the Board. The Board considers the Compensation Committee’s proposals and, if acceptable, approves them.
The Compensation Committee also determines whether any adjustments to compensation would be appropriate for the direct reports. The Compensation Committee, annually and as it otherwise deems appropriate, meets with our
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Chief Executive Officer and our Vice President Corporate Human Resources to obtain recommendations with respect to our compensation programs and packages for the direct reports. The Chief Executive Officer and our Vice President Corporate Human Resources may make recommendations to the Compensation Committee on base salary, long-term incentive plan awards, performance targets, and other compensation terms for the direct reports that the Compensation Committee may consider. The Compensation Committee considers management’s proposals, reviews independent data to validate these recommendations and, if acceptable, approves them. The Compensation Committee is not bound to, and does not always accept, management’s recommendations with respect to executive compensation for the direct reports. In addition, the Compensation Committee has the authority to access (at Primo’s expense) independent, outside compensation consultants and other advisors for both advice and competitive data as it determines the level and nature of Primo’s executive compensation.
In 2020, the Compensation Committee continued to retain Frederic W. Cook & Co. (“FW Cook”) as its sole independent compensation consultant. FW Cook only performs work for and reports directly to the Compensation Committee and attends Compensation Committee meetings as requested. FW Cook provided recommendations to the Compensation Committee on the competitiveness and appropriateness of all elements of executive compensation, including the Chief Executive Officer’s compensation. FW Cook did not provide any additional services to the Board or management in 2020.
The Compensation Committee has considered the independence of FW Cook in light of SEC rules and NYSE listing standards. In connection with this process, the Compensation Committee has reviewed, among other items, a report from FW Cook addressing the independence of FW Cook and the members of the consulting team serving the Compensation Committee, including the following factors: (i) other services provided to Primo by FW Cook; (ii) fees paid by Primo as a percentage of FW Cook’s total revenue; (iii) policies or procedures of FW Cook that are designed to prevent conflicts of interest; (iv) any business or personal relationships between the senior advisor of the consulting team with a member of the Compensation Committee; (v) any Primo stock owned by the senior advisor or any immediate family member; and (vi) any business or personal relationships between our executive officers and the senior advisor. The Compensation Committee discussed these considerations and concluded that the work performed by FW Cook and its senior advisor involved in the engagement did not raise any conflict of interest.
The Compensation Committee periodically reviews compensation data and pay practices from Primo’s peer group and general industry surveys to determine the “market median” of the compensation of executives performing similar functions in the competitive market and in Primo’s peer group. However, the Board and the Compensation Committee retain discretion in setting the compensation for our Chief Executive Officer and his direct reports, respectively. As a result, compensation for these executives may differ materially from the peer group and may vary according to factors such as experience, position, tenure, individual and organizational factors, and retention needs, among others. The Compensation Committee periodically evaluates and selects which companies to reference for purposes of executive compensation competitiveness. With guidance from its compensation consultant and input and discussion with management, the Compensation Committee discusses annually whether the mix of companies in the peer group produces a valid competitive analysis relative to our talent requirements.
The Compensation Committee, with input from FW Cook, determined that the peer group below, consisting of selected North American companies, was appropriate for setting 2020 target compensation.
Companies used for Compensation Comparison
AquaVenture Holdings Limited
Rexnord Corporation
A.O. Smith Corporation
Rollins, Inc.
The Brink’s Company
Servicemaster Global Holdings Inc.
Chemed Corporation
Stericycle Inc.
Cintas Corporation
Tetra Tech, Inc.
Evoqua Water Technologies Corp.
UniFirst Corporation
Farmer Bros. Co.
Watts Water Technologies Inc.
Frontier Communications Corporation
Windstream Holdings, Inc.
IDEX Corporation
Xylem Inc.
Pentair plc
 
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During its May 2020 meeting, the Compensation Committee, with input from FW Cook, reviewed the peer group that would be used for setting 2021 target compensation and determined to make the following changes to the peer group to more closely reflect Primo’s business and financial profile:
Removals
Additions
Revised Peer Group
AquaVenture Holdings Limited
ADT Inc.
ADT Inc.
Farmer Bros. Co.
Franklin Electric Co., Inc.
A.O. Smith Corporation
Frontier Communications Corporation
Mueller Water Products, Inc.
The Brink’s Company
 
 
Chemed Corporation
 
 
Cintas Corporation
 
 
Evoqua Water Technologies Corp.
 
 
Franklin Electric Co., Inc.
 
 
IDEX Corporation
 
 
Mueller Water Products, Inc.
 
 
Pentair plc
 
 
Rexnord Corporation
 
 
Rollins, Inc.
 
 
Servicemaster Global Holdings Inc.
 
 
Stericycle Inc.
 
 
Tetra Tech, Inc.
 
 
UniFirst Corporation
 
 
Watts Water Technologies Inc.
 
 
Windstream Holdings, Inc.
 
 
Xylem Inc.
In addition, the Compensation Committee reviews size-adjusted median compensation data from two general industry surveys in which management annually participates: the Aon Hewitt Total Compensation Measurement survey and the Willis Towers Watson Compensation Data Bank survey. The Aon Hewitt survey in 2019 included 450 companies ranging in size from approximately $1 million to over $250 billion in annual revenue, and the Willis Towers Watson survey in 2019 included over 800 organizations ranging in size from approximately $10 million to over $265 billion in annual revenue.
The Compensation Committee annually reviews peer group and survey data in recommending our Chief Executive Officer’s compensation to the Board and in setting compensation for the direct reports. We consider the compensation paid by companies in our peer group as one factor in setting compensation for our named executive officers, and we may review peer group data with respect to individual components of compensation in addition to overall compensation. Compensation for the majority of our named executive officers has historically fallen at the low end of our “market median range.” Our market median range is defined as plus or minus 10% of the market median for base salary, plus or minus 15% of the market median for all other elements of compensation, and plus or minus 15% of the market median for total direct compensation. Our goal, over time and depending on the success of our overall business, is to more closely align components of our named executive officers’ compensation with the market median range for all compensation elements. In 2020, total direct compensation opportunities for our named executive officers were within or below the market median range, except for the S&D CEO and Vice President, Global Chief Information Officer, which were above the high end of our market median range.
The Compensation Committee intends to continue to make adjustments to executive compensation in light of the objectives of our compensation program, our financial and competitive position and our business. The Compensation Committee may exercise discretion as to the type and magnitude of these adjustments. In addition, the Compensation Committee may choose to set compensation based on factors other than external data and company performance, including individual responsibilities, potential and achievement. The Compensation Committee believes that its 2020 decisions supported the objectives of Primo’s compensation program.
Long-Term versus Currently-Paid Compensation
Currently-paid compensation to our named executive officers includes base salaries, which are paid periodically throughout the fiscal year, annual cash performance bonuses based on performance targets proposed by management and approved by the Compensation Committee, which are awarded after the end of the fiscal year, and limited
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perquisites and personal benefits, which are paid consistent with our policies in appropriate circumstances. Our named executive officers historically have been eligible to participate in our long-term equity incentive plans, including the Amended and Restated Primo Water Corporation Equity Incentive Plan (the “Amended and Restated Equity Plan”) and the Primo Water Corporation 2018 Equity Incentive Plan, as each may be amended from time to time (the “2018 Equity Plan” and together with the Amended and Restated Equity Plan, the “Equity Plans”). The Equity Plans provide the Compensation Committee and management with the flexibility to design compensatory awards responsive to Primo’s business needs and goals. Awards under the Equity Plans may be in the form of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, performance units or stock payments. The Equity Plans are described in more detail under the heading “Equity Compensation Plan Information” on page 51 of this proxy statement. Our executive officers may also participate in our 401(k) Plan, which is available to all employees in the United States, except for certain union employees.
The compensation structure for our named executive officers is intended to balance the need of these executives for current income with the need to create long-term incentives that are directly tied to achievement of our operational targets and growth in shareowner value. For our Chief Executive Officer, the Compensation Committee reviews peer group and survey data and recommends to the Board the terms of his compensation arrangements. The Board reviews the recommendation and, if acceptable, approves such arrangements. Our Chief Executive Officer and Vice President Corporate Human Resources review peer group and survey data and recommend to the Compensation Committee the terms of the compensation arrangements for direct reports. The Compensation Committee reviews those recommendations and, if acceptable, approves them.
Compensation Components
For 2020, the principal compensation components for Primo’s named executive officers consisted of the following:
Base salary
Fixed pay that takes into account an individual’s role and responsibilities, experience, expertise, and individual performance, and compensates named executive officers for services rendered during the fiscal year.
 
 
Cash Performance bonuses
Performance-based compensation that is paid to reward attainment of annual corporate and individual performance targets.
 
 
Long-term equity incentive awards
Equity compensation that reinforces the link between incentives and long-term Primo performance, incentivizes our named executive officers, aligns the interests of our named executive officers with those of our shareowners, and encourages executive retention.
 
 
Retirement benefits
Retirement benefits that provide the opportunity for financial security in retirement consistent with programs for our broad-based employee population, including limited matching contributions under Primo’s 401(k) Plan.
 
 
Limited perquisites and benefits
Limited perquisites and benefits that effectively facilitate job performance, including an annual executive physical examination, a car allowance, and, in the case of the President, North America, a housing allowance.
Base Salary
We provide named executive officers and other employees with base salary, paid over the course of the year, to compensate them for services rendered during the fiscal year. Base salary is determined by an annual assessment of a number of factors, including position and responsibilities, experience, individual job performance relative to responsibilities, impact on development and achievement of our business strategy, and competitive market factors for comparable talent in the peer group. However, the Board and the Compensation Committee retain discretion in setting the compensation for our Chief Executive Officer and the direct reports, respectively, and as a result, base salary for these executives may differ from that of comparable executives in the peer group.
In 2019, the Compensation Committee recommended, and the Board approved, an increase to the base salary for our Chief Executive Officer. Similarly, upon the recommendation of our Chief Executive Officer and our Vice President Human Resources in 2019, the Compensation Committee determined to increase the base salary for our
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other named executive officers (other than the S&D CEO). In making such determinations, the Board and the Compensation Committee considered the achievement of individual performance goals, a review of peer group and survey data, the results of Primo’s performance and input from FW Cook. The following table sets forth the 2020 base salary, 2019 base salary, and, if applicable, the percentage increases or decreases for each named executive officer:
Name
2020 Base Salary
2019 Base Salary
% Decrease
or Increase
Thomas J. Harrington
$900,000
$850,000
5.9%
Jay Wells
$570,000
$553,019
3.1%
Charles R. Hinson
$1,000,000
$1,000,000
0.0%
David Muscato
$500,000
$463,500
7.9%
Marni Morgan Poe
$425,000
$401,300
5.9%
William “Jamie” Jamieson
$412,000
$400,000
3.0%
In 2020, the Compensation Committee recommended, and the Board approved, an increase to the base salary for our Chief Executive Officer, effective as of March 28, 2021. Similarly, in 2020, upon the recommendation of our Chief Executive Officer and our Vice President Corporate Human Resources, the Compensation Committee determined to increase the base salary for each of our other named executive officers (other than the S&D CEO), effective as of March 28, 2021.
Performance Bonuses
General
The Compensation Committee believes that some portion of overall cash compensation for named executive officers should be performance-based, that is, contingent on successful achievement of corporate and individual targets. To that end, and depending on our financial and operating performance, the Compensation Committee may approve performance-based bonuses. The addition of performance bonuses in these situations more closely aligns a named executive officer’s overall compensation with his or her individual performance and the profitability of the business unit for which he or she is accountable. Eligibility for performance bonuses is set forth in a named executive officer’s employment offer letter, and is based on market competitiveness, the impact of the executive’s role within Primo, and the executive’s long-term contributions. Any changes to the target bonus levels set forth in the employment offer letter for our Chief Executive Officer are recommended by the Compensation Committee and determined by the Board. Any changes to the target bonus levels set forth in the employment offer letters for the direct reports are reviewed and approved by the Compensation Committee. The targets related to performance-based bonuses are reviewed and approved by the Compensation Committee. The Compensation Committee believes that this bonus arrangement presents executives with clear, quantified targets that will focus them on strategic issues and align management’s interests with those of our long-term shareowners in the sustained growth of shareowner value.
At the end of each fiscal year, an individual performance review is conducted for each named executive officer. If an individual performance review results in a rating below acceptable levels for the relevant period, all or a portion of the performance bonus may be withheld, even if corporate targets were met. During the performance review for our Chief Executive Officer and for his direct reports, the Compensation Committee determines whether the individual performance targets were met. Our Board retains the discretion to make adjustments to the performance bonus for our Chief Executive Officer, and the Compensation Committee retains the discretion to make adjustments to the performance bonuses for the direct reports.
Additionally, discretionary bonuses may be paid to named executive officers, and three such bonuses were paid in 2020. The Chief Executive Officer recommended, and the Compensation Committee approved, bonuses payable in common shares to our Chief Financial Officer, President, North America and Vice President, Global Chief Information Officer, along with other members of management, to incentivize such individuals to achieve synergy targets in connection with the acquisition of the legacy Primo business. While discretionary bonuses may be paid in appropriate circumstances, no named executive officer has a guaranteed right to a discretionary bonus as a substitute for a performance-based bonus in the event that performance targets are not met.
The S&D CEO did not receive a performance bonus in 2020 as S&D was sold in early 2020. Mr. Hinson remained with the S&D business after the sale and ceased to be employed by us. References to our named executive officers in this section exclude Mr. Hinson.
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Company Performance Targets
Performance bonus eligibility in 2020 was determined based in part on achieving corporate targets and in part on achieving individual targets. In 2020, the performance bonus of our named executive officers was calculated based on achievement of a specified level of EBITDA, operating free cash flow and revenue, weighted 50%, 25% and 25%, respectively.
For performance bonus purposes, (i) “EBITDA” is GAAP earnings before interest, taxes, depreciation, and amortization, (ii) “operating free cash flow” is GAAP net cash provided by operating activities, less capital expenditures, and (iii) “revenue” is GAAP revenue. The metrics utilized for performance bonus purposes may be adjusted to exclude the impact of certain items as approved by the Compensation Committee, and as a result, they may not correspond to the reported measures used in Primo’s other disclosures or filings.
The business unit in which an individual is employed determines the bonus pool from which he or she is eligible to receive a performance bonus payment and the metrics applicable for the payment of the bonus. All of our named executive officers, other than the President, North America, participated in the Corporate bonus pool in 2020. The President, North America participated in the Primo Water North America bonus pool.
The metrics described above closely correspond with the performance of our business, and the Compensation Committee therefore viewed them as appropriate performance targets for measuring the achievement of Primo’s business goals by our named executive officers. Once the corporate performance targets were achieved, the individual performance of the named executive officer was considered, and if expectations for his or her role had been met, the executive was paid a bonus in full. A bonus could have been withheld in whole or in part if the executive did not meet expectations for his or her role. No bonus or portion of a bonus was withheld in 2020.
Performance bonuses in 2020 had a “threshold” level, a base “target” level and an “outperform” level. Performance bonuses may be paid if the actual result for any metric is less than the applicable “threshold” level; however, if the actual results for the EBITDA metric are below the “threshold” level, no performance bonuses will be paid, subject to the discretion of the Board and the Compensation Committee to modify the performance bonus of our Chief Executive Officer and his direct reports, respectively, based on achievement of individual performance targets. For 2020, our named executive officers could earn a performance bonus of up to a maximum level of 200% of the target bonus amount based on achievement of goals in excess of the “outperform” level. The target bonus awards for 2020 for our named executive officers varied between 75% and 110% of annual base salary.
The Compensation Committee believes that setting an achievable goal is important in motivating our employees appropriately and in constructing a pay package that allows us to compete successfully in the market for talented employees. The following chart sets forth the “threshold,” “target” and “outperform” performance targets established by the Compensation Committee in December 2019 for the bonus pools in which our named executive officers participate (which were subsequently revised in May 2020 to reflect the sale of S&D and the legacy Primo acquisition), and the actual results achieved for those bonus pools.
2020 Performance Bonus Program

Targets applicable to named executive officers ($ in millions)
 
Corporate Pool
(enterprise level)
PWNA Unit Pool
(operating unit level)
 
EBITDA
$
Operating
Free Cash
Flow
$
Revenue
$
PWNA
EBITDA
$
PWNA
Operating
Free Cash
Flow
$
PWNA
Revenue
$
“Threshold”
303.0
123.4
2,005.3
244.0
159.9
1,497.3
“Target”
356.5
145.1
2,110.8
287.1
192.0
1,576.1
“Outperform”
409.9
167.0
2,258.6
330.1
216.3
1,686.4
Actual
$360.0
$136.6
$1,942.0
$311.8
$233.4
$1,489.9
These metrics are interpolated on a straight-line basis between the “threshold,” “target” and “outperform” performance levels, resulting in a payout percentage for each metric. The relative weighting for each metric as set
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forth in the chart below is applied to the payout percentages, and the results are aggregated, resulting in a bonus payout as a percentage of the target award. This percentage is then applied to the target bonus amount to determine the amount of a named executive officer’s bonus, subject to the discretion of the Board and the Compensation Committee to modify the performance bonus.
The following chart sets forth the calculation of the bonus payouts as a percentage of target award opportunities for the bonus pools in which our named executive officers participate.
2020 Performance Bonus Program

Calculation of bonus payout as a percent target award
 
Corporate Pool
(enterprise level)
PWNA Unit Pool
(operating unit level)
 
EBITDA
50%
Operating
Free Cash
Flow
25%
Revenue
25%
PWNA
EBITDA
50%
PWNA
Operating
Free Cash
Flow
25%
PWNA
Revenue
25%
% Payout (Per Metric)
105%
81%
0%
143%
200%
0%
% Payout—Weighted (Per Metric)
53%
20%
0%
72%
50%
0%
Bonus Payout % Target Award
73%
122%
As noted above, actual results, when weighted as described above, resulted in a bonus payout of 73% of target award opportunity for our named executive officers other than the President, North America. The bonus payout for the President, North America was 122%.
For 2021, the Compensation Committee has determined to utilize the same metrics and weighting utilized in the 2020 performance bonus program.
Individual Performance Targets
During 2020, we used individual performance targets for named executive officers in two ways. First, the Compensation Committee could have reduced a performance bonus based on a named executive officer’s achievement of or failure to achieve individual performance targets. The Compensation Committee determined that our named executive officers met their respective individual performance targets and, as a result, no reductions would be made to performance bonuses. Second, the Compensation Committee made salary adjustment decisions with respect to a named executive officer based in part upon achievement of individual performance targets, as discussed above under the heading “Compensation Components—Base Salary” on page 29 of this proxy statement. The targets set for 2020 varied by business unit and the named executive officer’s function within Primo. The individual targets for the Chief Executive Officer were approved by the Compensation Committee, and the individual targets for the other named executive officers were approved by the Chief Executive Officer. The targets were set to reflect the executive’s role in ongoing and planned business initiatives and were designed to closely correlate with our business plan for 2020. In setting specific target levels, a variety of factors were considered, including our areas of focus for the year, our relationships with customers and suppliers and general economic conditions. A description of the individual 2020 performance targets applicable to our named executive officers is set out below:
Chief Executive Officer:
Develop and implement strategic and operational initiatives for long-term growth of Primo; and
Achieve specific financial and operational targets.
Chief Financial Officer:
Implement strategic and operational initiatives for long-term growth of Primo; and
Achieve specific financial and operational targets.
President, North America:
Implement strategic and operational initiatives for long-term growth of Primo; and
Achieve specific financial and operational targets.
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Chief Legal Officer and Secretary:
Develop and oversee legal support function for implementation of strategic and operational initiatives for long-term growth of Primo; and
Resolve certain litigation matters in a cost effective manner.
Vice President, Global Chief Information Officer:
Implement strategic and operational initiatives for long-term growth of Primo.
The individual performance targets are set in order to accomplish two objectives. First, the targets represent management’s and the Compensation Committee’s goals for Primo’s performance over time, based on market factors and other operational considerations that we weigh in preparing internal forecasts. Second, they provide executives with meaningful objectives, directly related to their job function, that motivate them to positively contribute to our success.
Long-Term Incentive Plans
In 2020, our senior-level employees were eligible to participate in our Equity Plans. Generally, we use a methodology to determine award size based on benchmarking against our peer group and the industry in general, among other factors. The Equity Plans provide the Compensation Committee and management with the flexibility to design compensatory awards responsive to Primo’s needs. Awards under the Equity Plans may be in the form of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, performance units or stock payments.
Beginning in December 2016, we began granting awards in the annual grant cycle for the following fiscal year. In December 2019, each of our named executive officers received an equity award for the 2020 annual grant cycle, and in December 2020, each of our named executive officers received an equity award for the 2021 annual grant cycle, in each case other than the S&D CEO. Each of these awards comprises a combination of performance-based restricted share units weighted 37.5%, time-based restricted share units weighted 25% and stock options weighted 37.5%. The Compensation Committee determined to award this combination of equity to the named executive officers following a review of peer group and survey data. All of the time-based restricted share units and stock options vest in three equal annual installments. The performance-based restricted share units granted in December 2019 vest based upon the achievement of a specific level of cumulative pre-tax income over a three-year period, while the performance-based restricted share units granted in December 2020 vest based upon the achievement of average annual ROIC and aggregate revenues over a three-year period beginning on the first day of Primo’s 2021 fiscal year and ending on the last day of Primo’s 2023 fiscal year (weighted 75% and 25%, respectively). The Compensation Committee selected a three-year performance period based upon input received from FW Cook regarding the time period utilized with respect to similar awards made by Primo’s peer group companies, as well as the Compensation Committee’s belief that a three-year measurement period reinforces the link between incentives and long-term Primo performance. We believe that these equity awards incentivize our named executive officers, align the interests of our named executive officers with those of our shareowners and encourage executive retention. The December 2020 equity awards are reflected in the Summary Compensation Table on page 38.
The performance-based restricted share units granted in 2017 to our Chief Executive Officer, Chief Financial Officer and Chief Legal Officer were originally granted with a pre-tax income target of $174.4 million. Following the sale of S&D and the acquisition of the legacy Primo business, the Compensation Committee determined to revise such target to $112.3 million to exclude from the target the pre-tax income attributable to S&D (discontinued operations) and include the pre-tax income attributable to acquired operations, and make similar adjustments to pre-tax income achieved for the three-year period ending at the end of 2020. Set forth below are the pre-tax income thresholds and variable vesting percentages based on the level of pre-tax income achieved:
Achievement
Pre-Tax Income
Percentage of Performance
Units Vested
125% of Target or greater
$140.4 million
200%
100% of Target
$112.3 million
100%
70% of Target
$78.6 million
40%
Less than 70% of Target
Less than $78.6 million
0%
Actual (continuing operations)
$124.5 million
144%
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As noted above, our actual cumulative pre-tax income for our remaining businesses (or continuing operations) during the three-year period ending at the end of fiscal 2020 was $124.5 million, which included the benefit of pre-tax income contributed by acquired companies (notably, legacy Primo). As a result, the percentage of performance-based restricted share units that vested in February 2021 was 144%. For performance-based restricted share unit purposes, “pre-tax income” is GAAP income before income taxes. This metric may be adjusted to exclude the impact of certain items as approved by the Compensation Committee and, as a result, it may not correspond to similarly titled reported measures used in Primo’s other disclosures or filings.
Retirement Benefits
In 2020, as part of our cost management efforts, we continued to limit executive benefits to those specifically granted pursuant to employment agreements (as discussed in the narrative following the Summary Compensation Table and below). Our named executive officers are eligible to participate in our 401(k) Plan, which is generally open to all employees in the United States except certain union employees. Employees can contribute a percentage of their eligible earnings, subject to annual contribution limits set by the Internal Revenue Service.
Perquisites and Other Personal Benefits
We provide our named executive officers with limited perquisites and other personal benefits that are not otherwise available to all of our employees, including an annual executive physical examination, a car allowance, and in the case of the President, North America, a housing allowance. The Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers to ensure that they are appropriately limited and effectively facilitate job performance. Perquisites and personal benefits are taken into account as part of the total compensation to executive officers.
Perquisites and other personal benefits for our named executive officers are set forth in the Summary Compensation Table, under the heading “All Other Compensation” and related footnotes on page 38 of this proxy statement.
Severance Arrangements
We have arrangements with our named executive officers to provide for payment and other benefits if such executive’s employment is terminated under certain circumstances. We have entered into such arrangements in order to discourage these executives from voluntarily terminating their employment with us in order to accept other employment opportunities, and to provide assurances to these executives that they will be compensated if terminated by us without cause.
Severance Plan
As of the last day of fiscal 2020, each of our named executive officers (other than the S&D CEO, who is no longer employed with Primo following the sale of S&D) participated in our Amended and Restated Severance and Non-Competition Plan (the “Amended and Restated Severance Plan”), which we first implemented in 2009. The Amended and Restated Severance Plan defines the entitlements for these executives upon a qualified termination of employment and replaces all previous termination and severance entitlements to which they may have been entitled. The Amended and Restated Severance Plan and entitlements under such plan are described in more detail under the heading “Potential Payments Upon Termination or Change of ControlAmended and Restated Severance Plan” on page 49 of this proxy statement.
Treatment of Equity Awards upon Termination or Change of Control
Our Equity Plans (see “Equity Compensation Plan Information” on page 51 of this proxy statement) contain provisions triggered by a change of control of Primo, thus providing assurances to our named executive officers and employees that their equity investment in Primo will not be lost in the event of the sale, liquidation, dissolution or other change of control of Primo. These terms provide for the acceleration of equity awards in limited circumstances, namely, when the awards (1) are not continued, assumed, or replaced by the surviving or successor entity or (2) are so assumed, but where a named executive officer or employee is involuntarily terminated for reasons other than Cause, or terminates his or her employment for Good Reason (as such capitalized terms are defined in the Amended and Restated Equity Plan), within two years after the change of control.
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Additionally, our Equity Plans contain provisions triggered when a named executive officer or employee is terminated without Cause, resigns with Good Reason or retires. In the case of a termination without Cause or resignation with Good Reason, the Equity Plans contemplate partial vesting for performance-based awards, restricted shares and restricted share units based on the length of employment relative to the performance or vesting period and accelerated vesting of options, generally on the employment termination date. In the case of retirement (defined in the Equity Plans as having attained age 60, and completed ten continuous years of service with Primo), the Equity Plans contemplate continued vesting of such awards.
A more detailed discussion of payments in connection with a termination or change of control is set forth under “Potential Payments Upon Termination or Change of Control” on page 45 of this proxy statement.
Share Ownership Guidelines
The Board has established minimum share ownership requirements for the Chief Executive Officer, Chief Financial Officer, all other direct reports to the Chief Executive Officer, and certain other members of senior management. Under these requirements, the Chief Executive Officer must own common shares having a minimum aggregate value equal to six times his annual base salary. The Chief Financial Officer must own common shares having a minimum aggregate value equal to two times his annual base salary. Other direct reports must own common shares having a minimum aggregate value equal to one and a half times his or her annual base salary. The Compensation Committee or the Board may, from time to time, reevaluate and revise these guidelines to give effect to changes in Primo’s common share price, capitalization, or changes in the base salary or the title of the above mentioned persons.
The value of shares owned by each of the above persons necessary to maintain compliance with the guidelines is recalculated on an annual basis on December 31 of each year. Compliance with the requirements is measured on December 31 of each year and reported to the Compensation Committee. Individuals are expected to monitor their own compliance throughout the year. Individuals subject to the guidelines are not required to attain the minimum ownership level by a particular deadline; however, until the guideline amount is achieved, the CEO is required to retain an amount equal to 100% of net shares received as equity compensation, and each other named executive officer is required to retain an amount equal to 75% of the net shares received as equity compensation. Once an individual achieves the applicable ownership guideline, he or she will be considered in compliance, regardless of any changes in base salary (except for promotional increases) or the price of Primo common shares, so long as he or she continues to own at least the number of Primo common shares owned at the time he or she achieved the applicable guideline. “Net shares” are defined as those shares that remain after shares are sold or netted to pay the exercise price of stock options (if applicable) and taxes payable upon the grant of a stock payment or the vesting of restricted shares, restricted share units, performance shares, performance share units or the exercise of stock options or stock appreciation rights. Shares purchased on the open market may be sold in compliance with Primo’s policies and applicable securities laws. Failure to meet or to show sustained progress toward meeting the guidelines may be a factor considered by the Compensation Committee in determining future long-term incentive equity grants to such persons. These requirements are designed to ensure that the economic interests of senior management correlate with the value of our stock and are thus closely aligned with the interests of Primo’s shareowners.
Employee Share Purchase Plan
We have maintained Primo’s Employee Share Purchase Plan (the “ESPP”) since 2015. The purpose of the ESPP is to provide eligible employees of Primo and our designated subsidiaries with an opportunity to acquire an ownership interest in us through the purchase of our common shares through payroll deductions at a discounted price. Eligible employees may purchase common shares at a price equal to 90% of the lower of the closing price of common shares on the NYSE on the first and last day of the offering period. We believe the ESPP further aligns the interests of our employees and shareowners and aids in the recruitment and retention of employees.
Insider Trading Restrictions and Policy Against Hedging
Our insider trading policy prohibits directors, officers, employees and consultants of Primo and certain of their family members from purchasing or selling any type of security, whether issued by us or another company, while such person is aware of material non-public information relating to the issuer of the security or from providing such material non-public information to any person who may trade while aware of such information. Trades by directors, executive officers and certain other employees are prohibited during certain prescribed blackout periods and are
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required to be pre-cleared by our Chief Legal Officer and Secretary, subject to limited exceptions for approved Rule 10b5-1 plans. This policy prohibits directors, officers, employees and consultants of Primo from engaging in “short sales” with respect to our securities, trading in put or call options, or engaging in hedging or monetization transactions, such as zero-cost collars and forward sale contracts, with respect to our securities. This policy also prohibits employees and directors, including the named executive officers, from holding Primo securities in a margin account or pledging Primo securities as collateral for a loan.
Policy Regarding Clawback of Incentive Compensation
Our Board has adopted a clawback policy that allows the Board to recoup any excess annual or long-term incentive compensation paid to our current and former executive officers in the event of a required accounting restatement of a financial statement of Primo, whether or not based on misconduct, due to material non-compliance with any financial reporting requirement under the securities laws of the United States. The clawback policy is intended to reduce potential risks associated with our incentive plans, and thus better align the long-term interests of our named executive officers and shareowners.
We believe that the clawback policy is sufficiently broad to reduce the potential risk that an executive officer would intentionally misstate results in order to benefit under an incentive program and provides a right of recovery in the event that an executive officer took actions that, in hindsight, should not have been rewarded.
Risk Management Considerations
The Compensation Committee believes that Primo’s performance-based cash bonus and long-term incentive plans provide incentives for our executives and other employees to create long-term shareowner value. Several elements of the program are designed to promote the creation of long-term value and thereby discourage behavior that leads to excessive risk:
The base salary portion of compensation is designed to provide a steady income regardless of Primo’s performance so that executives do not feel pressured to focus on achievement of certain performance goals at the expense of other aspects of Primo’s business.
The performance goals used to determine the amount of an executive’s bonus are measures that the Compensation Committee believes drive long-term shareowner value. The Compensation Committee attempts to set ranges for these measures that promote success without encouraging excessive risk-taking to achieve short-term results.
The measures used to determine whether performance-based restricted share units vest are based on performance over a three-year period. The Compensation Committee believes that the three-year measurement period reinforces the link between incentives and long-term Primo performance, and the performance cycles overlap to reduce any incentive to maximize performance in a particular period at the expense of another.
Cash bonuses are capped at 200% of target. Similarly, vesting for performance-based restricted share units is capped at 200% of target.
The equity awarded to our named executive officers is a mix of performance-based restricted share units, time-based restricted share units and stock options. The Compensation Committee believes that this mix avoids having a relatively high percentage of compensation tied to one element, and that the time-based restricted share units and stock options should reduce risky behavior because these awards are designed to retain employees and because they are earned over time.
Compensation is balanced between short-term and long-term compensation, creating diverse time horizons.
The Compensation Committee believes that linking performance and the corresponding payout factor mitigates risk by avoiding situations where a relatively small amount of increased performance results in a relatively high corresponding amount of increased compensation.
Named executive officers are required to hold a certain amount of Primo shares, which aligns their interests with those of our shareowners.
We have implemented accounting policies and internal controls over the measurement and calculation of performance goals.
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We have implemented a clawback policy, which is intended to reduce potential risks associated with our incentive plans, and thus better align the long-term interests of our named executive officers and shareowners.
We have a “no-hedging” policy that prohibits our directors, officers, employees and consultants from engaging in any hedging or monetization transactions, such as zero-cost collars and forward sale contracts, with respect to Primo securities.
We have a policy prohibiting employees from engaging in any short-term, speculative transactions involving Primo securities, including purchasing securities on margin, engaging in short sales, buying or selling put or call options, and trading in options.
We have a policy prohibiting employees from holding Primo securities in a margin account or pledging Primo securities as collateral for a loan.
The Compensation Committee approves our short-term and long-term incentive compensation programs, which mitigates risk by empowering a group of independent directors with substantial experience and expertise.
The Compensation Committee has engaged an outside, independent compensation consultant who is knowledgeable regarding various compensation policies and their associated risks and is free from any conflict of interest.
The Compensation Committee has reviewed Primo’s compensation policies and practices for its employees and determined that the risks arising from those policies and practices are not reasonably likely to have a material adverse effect on Primo.
Tax and Accounting Implications
When determining amounts of long-term incentive grants to executives and employees, the Compensation Committee considers the accounting cost associated with the grants. Under FASB ASC Topic 718, “Share-based Payments,” grants of equity-classified awards result in compensation expense for Primo. The Compensation Committee considers the accounting and tax treatment accorded to equity awards and takes steps to ensure that any issues are addressed by management; however, such treatment has not been a significant factor in establishing Primo’s compensation programs or in the decisions of the Compensation Committee concerning the amount or type of equity award.
As part of its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Prior to 2018, Section 162(m) limited the deductibility of compensation in excess of $1 million paid to our Chief Executive Officer and our three other most highly compensated executive officers (other than our principal financial officer) serving on the last day of the year. Beginning in 2018, as a result of the passage of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), the $1 million deductibility limitation of Section 162(m) also applies to compensation paid to our principal financial officer and will continue to apply to each of these officers for all future years (including after death). Our Amended and Restated Equity Plan was intended to provide for the deductibility of payments in excess of the $1 million limitation with respect to awards under Primo’s annual performance bonus plan and awards of stock options and performance-based restricted share units, by designing these awards to constitute “qualified performance-based compensation.” Prior to 2018, qualified performance-based compensation was exempt from the deductibility limitations of Section 162(m). Beginning in 2018, however, the TCJA eliminated the qualified performance-based compensation exemption from Section 162(m), except for certain grandfathered payments related to awards made under plans in effect on November 2, 2017, which are not modified after such date. The adoption of the 2018 Equity Plan in May 2018 was intended, in part, to help preserve the grandfathered status of such awards under the Amended and Restated Equity Plan. In contrast, time-based restricted share units generally did not qualify as “performance-based compensation” under Section 162(m). Therefore, the payment of vested time-based restricted share units in some cases could be non-deductible due to the limitations of Section 162(m). While we view preserving tax deductibility as an important objective, we believe the primary purpose of our compensation program is to support our strategy and the long-term interests of our shareowners, and we intend to continue to make performance-based awards notwithstanding the elimination of the qualified performance-based compensation exception to the Section 162(m) deductibility limitation. In specific instances we have authorized, and in the future may authorize, compensation arrangements that are not fully tax deductible but that promote other important objectives of Primo and of our executive compensation program.
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Summary Compensation Table
Name and Principal
Position
Year
Salary
($)
Bonus
($)
Stock
Awards(1)
($)
Option/
SAR
Awards(2)
($)
Non-Equity
Incentive Plan
Compensation(3)
($)
All Other
Compensation
($)
Total
($)
Thomas J. Harrington
Chief Executive Officer
2020
824,231(4)
​3,579,266(5)
​1,847,715(5)
722,700
​25,633(6)
​6,999,545(5)
2019
850,000
​1,562,500
937,500
731,000
​25,760
​4,106,760
2018
802,220
​250,000
​1,437,500
862,500
301,253
​20,914
​3,674,387

Jay Wells
Chief Financial Officer
​2020
525,967(4)
​521,550(7)
562,500
337,500
312,075
​25,155(8)
​2,284,747
2019
553,019
562,500
337,500
356,697
​24,533
​1,834,249
2018
473,051
562,500
337,500
322,857
​18,573
​1,714,481

Charles R. Hinson
Chief Executive Officer—S&D Coffee and Tea(9)
2020
161,644
​2,765,299(10)
​2,926,943
2019
1,000,000
​1,310,000
​25,769
​2,335,769
2018
1,000,000
468,750
281,250
760,000
​25,522
​2,535,522

David Muscato
President, North America
2020
455,558(4)
457,500(7)
468,750
281,250
457,500
58,820(11)
2,179,378

Marni Morgan Poe
Chief Legal Officer and Secretary
2020
389,196(4)
437,500
262,500
232,688
​31,554(12)
1,353,438
2019
398,154
437,500
262,500
256,809
16,819
1,371,782
2018
386,993
437,500
262,500
264,123
18,044
1,369,160

William “Jamie” Jamieson
Vice President, Global Chief Information Officer
2020
380,246(4)
376,980(7)
187,500
112,500
225,570
24,069(8)
1,306,865
(1)
Stock awards made in 2020 were time-based and performance-based restricted share units granted under the Amended and Restated Equity Plan and the 2018 Equity Plan. The amounts reported in this column for 2020 reflect the aggregate grant date fair values for time-based and performance-based restricted share units computed in accordance with ASC 718, excluding the effect of estimated forfeitures. The assumptions used for the valuations are set forth in Note 9 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021. Assuming achievement of the highest level of performance for these awards, the grant date fair values of awards subject to performance conditions would have been as follows: Mr. Harrington: $2,250,000; Mr. Wells: $675,000; Mr. Muscato: $562,500; Ms. Poe: $525,000; and Mr. Jamieson: $225,000.
(2)
The values of option awards reflect the grant date fair values, as computed in accordance with ASC 718. The assumptions used for the valuations are set forth in Note 9 to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended January 2, 2021.
(3)
The amounts under the Non-Equity Incentive Plan Compensation column reflect amounts earned under Primo’s annual performance bonus plan.
(4)
As part of our broad-based effort to respond to the coronavirus (COVID-19) outbreak, these executive officers voluntarily agreed to reduce their second quarter 2020 base salaries by 30%.
(5)
On August 4, 2020, we amended each of the Amended and Restated Equity Plan and the 2018 Equity Plan to provide for defined criteria for a retirement along with continued vesting of equity awards upon a retirement. Mr. Harrington meets the criteria for retirement under the Equity Plans, and as a result, we incurred incremental compensation expense associated with the modification of his outstanding awards. The incremental fair values of the modified awards computed as of the modification date are included in the Stock Awards and Option/SAR Awards columns, even though the grant date fair values for such equity awards are or have been reported in the Summary Compensation Table for prior fiscal years. Accordingly, the Summary Compensation Table shows a significant increase in the total compensation for fiscal 2020 for Mr. Harrington. This increase in compensation relates to accounting charges resulting from the modification of Mr. Harrington’s equity awards, and not an increase in the realizable value of the awards. The table below sets forth equity modification charges required by the applicable accounting rules and the total compensation amounts for fiscal 2020 after excluding such modification charges:
Name
Time-Based
Restricted
Share Unit
Modification
Charge
Performance-
Based
Restricted
Share Unit
Modification
Charge
Options
Modification
Charge
Total
Modification
Charge
Total
(Without Equity
Accounting
Modification
Charge)
Thomas J. Harrington
$504,379
$1,199,887
$722,715
$2,426,981
$4,572,564
(6)
Represents a car allowance, 401(k) match, and annual medical exam.
(7)
Represents the grant date fair value of a bonus payable in common shares in connection with the legacy Primo acquisition based upon attainment of (1) a specified percentage target under Primo’s annual cash performance bonus plan for the Primo Water North America business, and (2) a specified annualized 2020 synergy target. The gross number of common shares ultimately issued (Mr. Wells: 29,922, Mr. Muscato 26,247, and Mr. Jamieson 21,628) was calculated based on the closing share price on February 12, 2021, the date that achievement of the performance target was certified by the Compensation Committee.
(8)
Includes a car allowance, phone allowance, 401(k) match, and annual medical exam.
(9)
On February 28, 2020, we completed the sale of all of the equity of our S&D Coffee and Tea business to Westrock Coffee Company, LLC, and Mr. Hinson ceased to be an executive officer of Primo on that date.
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(10)
The amounts in the column represent (a) common shares issued to Mr. Hinson in connection with the sale of S&D with a grant date fair value of $2,516,180, and (b) $249,119 in incremental fair value on outstanding awards that were accelerated upon the closing of the sale resulting in a modification of such awards.
(11)
Includes a car allowance, 401(k) match, annual medical exam, and a $35,000 housing allowance.
(12)
Includes a car allowance, phone allowance, and 401(k) match.
CEO Pay Ratio
In accordance with SEC rules, we are providing the ratio of the annual total compensation of Mr. Harrington, our CEO, to the annual total compensation of our median associate. The 2020 annual total compensation of Mr. Harrington was $6,999,545, which includes a $2,426,981 equity modification charge (as further explained in footnote 5 to the Summary Compensation Table), which we are required to include in the ratio calculation. Mr. Harrington meets the criteria for retirement under the Equity Plans, and as a result, we incurred incremental compensation expense associated with the modification of his outstanding awards. The 2020 annual total compensation of our median compensated associate was $44,177, and the ratio of these amounts is 158 to 1 with the equity modification charge and 104 to 1 without the equity modification charge. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described below.
Methodology for Determining Our Median Associate
As permitted under SEC rules, to determine our median associate, we used annual taxable compensation as derived from our payroll records. We believe that taxable compensation encompasses all of the principal methods of compensation that we use for our associates and provides a reasonable estimate of annual compensation for our associates. Furthermore, in identifying our median associate, wages and salaries were annualized for associates who were not employed for the full 2020 fiscal year and who were not temporary or seasonal. We did not make a full-time equivalent adjustment for any associate.
Determination Date and Associate Population
We determined that, as of October 31, 2020, the date we selected to identify the median associate, our associate population consisted of approximately 8,800 associates working for Primo (after reflecting the sale of our S&D Coffee and Tea business and the acquisition of the legacy Primo business) and its consolidated subsidiaries. No associates were excluded under the de minimis or data privacy exemptions under the rule.
Compensation Measure Used to Identify the Median Associate
To identify the median associate, we used base salary/wages and overtime pay, plus actual annual cash incentive compensation (annual bonus) paid through October 31, 2020 as the compensation measure. In addition, we annualized the compensation of all associates over the full calendar year and the compensation of new hires in 2020 as if they were hired at the beginning of the fiscal year. We did not make any cost-of-living adjustments.
Annual Total Compensation of Median Associate
In order to determine the annual total compensation of the median associate, we identified and calculated the elements of that associate’s compensation for 2020 in accordance with SEC requirements, resulting in annual total compensation in the amount of $44,177.
Annual Total Compensation of Chief Executive Officer
With respect to the annual total compensation of our CEO, we included the amount reported for Mr. Harrington in the “Total” column for 2020 in the Summary Compensation Table included in this proxy statement.
Named Executive Officer Employment Agreements
Each of our named executive officers has a written employment agreement or offer letter setting forth the material terms of his or her employment. Under these employment agreements or offer letters, these executives receive annual base salaries, which may be adjusted from time to time. Each of these agreements provides for:
eligibility to earn bonuses based upon the achievement of agreed-upon criteria established from time to time by the Compensation Committee; and
customary allowances and limited perquisites.
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Each of the named executive officers employed by Primo as of the end of 2020 participates in both short-term and long-term incentive programs provided by us. The level of participation is determined by the Compensation Committee and varies by named executive officer. Each of our named executive officers is bound by restrictive covenants that generally limit their ability to compete with us in any countries in which we conduct business. They have also agreed to non-solicitation and non-disparagement covenants. These limitations continue during the term of employment and for a period of time following termination (regardless of the cause of the termination).
Potential severance payments in the event of termination or change of control of Primo for each named executive officer, as applicable, are described more particularly below under the heading “Potential Payments Upon Termination or Change of Control” on page 45 of this proxy statement.
Thomas J. Harrington Employment Agreement
On August 1, 2018, we entered into an employment letter agreement with Thomas J. Harrington to serve as our Chief Executive Officer, effective as of December 30, 2018, the first day of our 2019 fiscal year. The agreement has an indefinite term and provides for an annual base salary, which will be increased to $927,000 effective as of March 28, 2021, and a car allowance. Mr. Harrington is eligible to participate in our annual performance bonus plan with a target bonus equal to 110% of his base salary.
Mr. Harrington is eligible to participate in all of our long-term incentive plans made available from time to time to our senior executives at the discretion of the Compensation Committee. The grants to Mr. Harrington under our long-term incentive plans are set forth in the “Grants of Plan-Based Awards in Fiscal 2020” Table below.
Mr. Harrington participates in the Amended and Restated Severance Plan, pursuant to which he is subject to standard confidentiality undertakings and non-disparagement covenants that survive the termination of his employment, regardless of the cause of the termination. He is also subject to a non-competition covenant that generally limits his ability to compete with us in any countries in which we conduct business, as well as a non-solicitation covenant. These limitations continue during the term of employment and for a period of one year following termination, regardless of the cause of the termination.
Jay Wells Employment Agreement
In December 2020, we entered into an amended and restated offer letter agreement with Jay Wells to serve as our Chief Financial Officer, which memorialized the previously disclosed terms of his employment with us. The agreement has an indefinite term and provides for an annual base salary, which will be increased to $585,000 effective as of March 28, 2021, and a car allowance. Mr. Wells is eligible to participate in our annual performance bonus plan with an annual target bonus equal to 75% of his base salary.
Mr. Wells is also eligible to participate in our benefit plans made available to our employees and senior executives, as well as our long-term incentive plans at the discretion of the Compensation Committee. The grants to Mr. Wells under our long-term incentive plans are set forth in the “Grants of Plan-Based Awards in Fiscal 2020” Table below.
Mr. Wells participates in the Amended and Restated Severance Plan, pursuant to which he is subject to standard confidentiality undertakings and non-disparagement covenants that survive the termination of his employment, regardless of the cause of the termination. He is also subject to a non-competition covenant that generally limits his ability to compete with us in any countries in which we conduct business, as well as a non-solicitation covenant. These limitations continue during the term of employment and for a period of nine months following termination, regardless of the cause of the termination.
Charles R. Hinson Employment Agreement
On November 6, 2017, we entered into an amended and restated employment agreement with Charles R. Hinson, which amended and restated his prior employment agreement with S.& D. Coffee, Inc. (“S&D”), to serve as the Chief Executive Officer of S&D. The agreement had an indefinite term and provided for an annual base salary of $1,000,000. Mr. Hinson was eligible to participate in our annual performance bonus plan with an annual target bonus equal to 100% of his base salary.
Mr. Hinson was also eligible to participate in benefit plans made available to S&D employees and senior executives, as well as our long-term incentive plans at the discretion of the Compensation Committee. Mr. Hinson did not receive a long-term incentive award grant in 2019.
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On February 28, 2020, we completed the sale of all of the equity of our S&D Coffee and Tea business to Westrock Coffee Company, LLC, and Mr. Hinson ceased to be an executive officer and employee of Primo on that date, but remains a named executive officer for this proxy statement as a result of the compensation received from us in 2020. Until February 28, 2021, Mr. Hinson was subject to a post-employment restrictive covenant that generally limited his ability to compete with us in any countries in which we conduct business, as well as a non-solicitation covenant.
David Muscato Employment Agreement
In June 2020, we entered into an offer letter agreement with David Muscato to serve as President, North America, effective June 26, 2020. The agreement has an indefinite term and provides for an annual base salary, which will be increased to $513,000 effective as of March 28, 2021, a car allowance, and a housing allowance. Mr. Muscato is eligible to participate in our annual performance bonus plan with an annual bonus target of 75% of his base salary.
Mr. Muscato is also eligible to participate in our benefit plans made available to our employees and senior executives, as well as our long-term incentive plans at the discretion of the Compensation Committee. The grants to Mr. Muscato under our long-term incentive plans are set forth in the “Grants of Plan-Based Awards in Fiscal 2020” Table below.
Mr. Muscato participates in the Amended and Restated Severance Plan, pursuant to which he is subject to standard confidentiality undertakings and non-disparagement covenants that survive the termination of his employment, regardless of the cause of the termination. He is also subject to a non-competition covenant that generally limits his ability to compete with us in any countries in which we conduct business, as well as a non-solicitation covenant. These limitations continue during the term of employment and for a period of nine months following termination, regardless of the cause of the termination.
Marni Morgan Poe Employment Agreement
In December 2020, we entered into an amended and restated offer letter agreement with Marni Morgan Poe to serve as our Chief Legal Officer, which memorialized the previously disclosed terms of her employment with us. The agreement has an indefinite term and provides for an annual base salary, which will be increased to $450,000 effective as of March 28, 2021, and a car allowance. Ms. Poe is eligible to participate in our annual performance bonus plan with an annual bonus target of 75% of her base salary.
Ms. Poe is also eligible to participate in our benefit plans made available to our employees and senior executives, as well as our long-term incentive plans at the discretion of the Compensation Committee. The grants to Ms. Poe under our long-term incentive plans are set forth in the “Grants of Plan-Based Awards in Fiscal 2020” Table below.
Ms. Poe participates in the Amended and Restated Severance Plan, pursuant to which she is subject to standard confidentiality undertakings and non-disparagement covenants that survive the termination of her employment, regardless of the cause of the termination. She is also subject to a non-competition covenant that generally limits her ability to compete with us in any countries in which we conduct business, as well as a non-solicitation covenant. These limitations continue during the term of employment and for a period of nine months following termination, regardless of the cause of the termination.
William “Jamie” Jamieson Employment Agreement
In January 2019, we entered into an offer letter agreement with William “Jamie” Jamieson to serve as our Vice President, Global Chief Information Officer. The agreement has an indefinite term and provides for an annual base salary, which will be increased to $423,000 effective as of March 28, 2021, and a car allowance. Mr. Jamieson is eligible to participate in our annual performance bonus plan with an annual bonus target of 75% of his base salary.
Mr. Jamieson is also eligible to participate in our benefit plans made available to our employees and senior executives, as well as