CHURCH & DWIGHT CO INC /DE/
For the period ended May 1, 2025. Filed Mar 20, 2025.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 1, 2025 · Filed Mar 20, 2025
Contents
EXECUTIVE SUMMARY
2024 Key Business Highlights and Strong Pay for Performance Alignment
We believe that the 2024 compensation of our named executive officers appropriately reflects and rewards their significant contributions to the Company’s performance in a year that demonstrated the strength of our brands, the success of our new products, and our continued focus on execution. During 2024 we delivered the following results and closely aligned our executive compensation programs with these results and our business strategy.
Financial Highlights
| $6.1 billion NET SALES | 45.7% GROSS MARGIN | $3.44 ADJUSTED DILUTED EPS |
|---|---|---|
| $1.16 billion CASH FROM OPERATIONS | 124 CONSECUTIVE YEARS OF DIVIDEND PAYMENTS | 12.0% TOTAL SHAREHOLDER RETURN |
For our 2024 Annual Incentive Plan, we retained the same design as in 2023, utilizing Net Sales, Adjusted Diluted EPS, Cash from Operations, and Strategic Initiatives metrics. The effect of the financial results, and the Strategic Initiatives metric, on payouts under our Annual Incentive Plan are discussed in further detail below under the heading “Annual Incentive Plan.” In addition, the Company delivered total shareholder return (“TSR”), assuming dividends are reinvested, of 12.0 percent, following an increase of 18.7 percent in TSR in 2023.
Alignment to Strategy
The Compensation & Human Capital Committee, or the “Committee,” reviews and analyzes the executive compensation program each year for alignment with our business strategy and evolving market and governance practices for executive compensation. We believe that our current programs are aligned with the Company’s business priorities and designed to encourage stockholder value creation.
As part of the foregoing analysis, the Committee evaluates the relationship between pay and performance of our named executive officers. The analysis includes a review of the relationship between the compensation paid to the CEO and the other named executive officers and Company performance relative to roles having generally corresponding responsibilities within other similarly sized companies. For 2024, the analysis shows a strong link between Company pay and Company performance as it relates to key operating measures.
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COMPENSATION DISCUSSION AND ANALYSIS
We focus on the following objectives in making compensation determinations:
| • | Provide compensation that is competitive in markets in which we compete for management talent. We refer to this objective as “competitive compensation”. |
| • | Condition the majority of a named executive officer’s compensation on achievement of both short- and long-term performance. We refer to this objective as “performance incentives”. |
| • | Encourage the aggregation and maintenance of meaningful equity ownership, and the alignment of executive officer and stockholder interests as an incentive to increase stockholder value. We refer to this objective as “alignment with stockholder interests”. |
| • | Provide an incentive for long-term continued employment with us. We refer to this objective as “retention incentives”. |
Church & Dwight’s fiscal year 2024 results continued to be aligned with pay in the following ways:
| • | Annual Incentive Plan: The Annual Incentive Plan aligns the interests of our executives and stockholders by achieving goals that support long-term stockholder return. Each year the Committee assesses the difficulty of the projected EPS goal and provides a rating that influences the target payout. In 2024, the Annual Incentive Plan rating was set at 1.2, a level 20 percent higher than a 1.0 target rating because our projected EPS growth on a percentage basis was significantly more challenging to achieve than the median projected EPS growth of the Corporate Incentive Plan Rating Peer Group (as defined below). The Company achieved a plan rating of 1.39 based on 2024 actual performance, as adjusted. The Annual Incentive Plan payouts to our named executive officers for 2024 are discussed in further detail below under “2024 Compensation – Annual Incentive Plan.” |
| • | Long-Term Incentive (“LTI”): The Committee utilizes stock options as the primary form of long-term compensation. The Committee believes that stock options provide a strong incentive to increase stockholder value, since the value of stock options is directly dependent on the market performance of our common stock. The Committee believes that options are an appropriate vehicle for long-term equity compensation because they directly reflect the stockholder experience, are straightforward to communicate, and provide value only if our stock price increases over time, which aligns our executives’ interests with those of our stockholders in delivering TSR. Beginning in 2023, the Committee approved performance stock units and restricted stock units as additional LTI vehicles in order to more closely align with market practice and to provide our executives with alternative forms of incentives that complement our stock option awards. In deciding the weighting among LTI vehicles, the Committee benchmarked the Compensation Peer Group but also balanced the historical reliance on stock options in driving successful results. For 2023 and 2024, 75% of the long-term incentive awards for the executive officers consisted of stock options, 15% of performance stock units, and 10% of restricted stock units. The performance stock units granted in 2023 and 2024 are measured based on a relative ranking of total shareholder return over a three-year performance period as we believe this is the best output metric available. |
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COMPENSATION DISCUSSION AND ANALYSIS
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