CHURCH & DWIGHT CO INC /DE/
For the period ended May 1, 2025. Filed Mar 20, 2025.
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May 1, 2025 · Filed Mar 20, 2025
Contents
2024 EXECUTIVE COMPENSATION HIGHLIGHTS
In 2024 the Committee continued with the following overall design of our Annual Incentive and Long-Term Incentive awards that were approved in 2023, with some minor modifications.
| • | Long-Term Incentives. In connection with this evaluation and in consideration of market practice and risk management, the Committee determined to alter its years-long practice of granting long-term incentives entirely in the form of stock options and instead determined that, beginning in 2023, long-term incentives would be granted as a mix of restricted stock units, performance stock units and stock options. For our named executive officers, the mix of awards in 2023 and 2024 was 10% time-based restricted stock units, 15% performance stock units, and 75% stock options. The Committee believes that one of the reasons for the Company’s outperformance over the long term is due to the long-term incentive award significant reliance on stock options. Performance stock units granted in 2023 and 2024 vest entirely based on the achievement of a relative total shareholder return metric over a three-year performance period, reflecting our core principle of alignment with stockholder interests. |
| • | Annual Incentive Plan. In addition to reviewing and making changes to our long-term incentive program in 2023, our Committee reviewed our Annual Incentive Plan, which had been in place since 2004, and determined to make the following changes beginning in 2023: |
| • | In addition to the four financial metrics, introduced a fifth metric “Strategic Initiatives”, focused on sustainability and long-term growth, consistent with market practice and our compensation principles, with each of the five metrics equally weighted (i.e., 20% per metric); and |
| • | In light of the post-COVID supply chain disruptions and inflation that impact how we evaluate our annual gross margin performance, the Committee determined to replace the “Gross Margin” metric with a “Relative Gross Margin” metric, which allows us to consider our performance as a percentile ranking within our Performance Peer Group (as discussed further below). |
The Committee reviewed the effectiveness of the 2023 Annual Incentive Plan and Long-Term Incentive awards and approved the following minor administrative modifications for 2024:
| • | Adjusted the payout scale for the Relative Gross Margin metric by replacing a quartile ranking with a graduated ranking which removed significant payout swings from one quartile to the next. |
| • | Adjusted the start date of the performance stock unit performance period to the grant date, rather than using January 1st of the year of grant, to limit the year-over-year variability of the Monte Carlo pricing methodology. |
| Church & Dwight Co. | 2025 Proxy Statement | 55 |
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COMPENSATION DISCUSSION AND ANALYSIS
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