US FOODS HOLDING CORP. 2024
PROXY STATEMENT
NOTICE OF ANNUAL MEETING
WEDNESDAY, MAY 15, 2024
8 AM (CENTRAL DAYLIGHT TIME)
OUR CULTURE
DELIVERSTOP
EXCELLENCEWASTE
I do it right for my customer every time
I drive productivity through continuous improvement
YOU
MATTER
I work safely,
care for my co-workers and enable their success
WIN
TOGETHER
I team up with the right people, in the right way, at the right time
SPEAK
UP
I seek the facts, talk straight and exchange objective feedback
April 2, 2024
DEAR STOCKHOLDERS
On behalf of the Board of Directors, I am pleased to invite you to attend US Foods' 2024 Annual Meeting of Stockholders on Wednesday, May 15, 2024, at 8:00 a.m. Central Daylight Time. We will once again host a completely virtual meeting this year, building off the success of last year's annual meeting to ensure expanded access for as many stockholders as possible.
Details of the business to be conducted at the Annual Meeting are included in the attached Notice of Annual Meeting and Proxy Statement. Whether or not you plan to attend the virtual Annual Meeting, the representation of your shares and your vote at the Annual Meeting are very important. I encourage you to review this Proxy Statement and submit your vote today. You can find the instructions for voting your shares in the Proxy Statement.
Throughout 2023, the dedicated US Foods team relentlessly focused on delivering best-in- class service to customers and executing on strategic long-range plan initiatives. The Board continued its oversight of the Company's growth strategy, prudent allocation of capital, and corporate sustainability initiatives.
The most significant change for US Foods in 2023 was the arrival of Dave Flitman as Chief Executive Officer and member of the Board. After a thoughtful and thorough search for the leader of this great company, the Board was thrilled to welcome Dave to US Foods. He is a highly accomplished executive, who has already made a meaningful impact on the organization by driving safety, operational excellence, profitable growth, shareholder returns, and a high-performing culture. The Board is confident in Dave's leadership in driving the Company's next chapter of growth.
We thank those of you who met with the Company over the past year and provided valuable feedback on broad-ranging topics such as the CEO transition; environmental, social, and governance matters; human capital management; Board refreshment and composition; and the Company's executive compensation program structure. The information received during this engagement helped to inform the Board's and its Committees' agendas and priorities for the year. We are committed to continuing the dialogue with the Company's stockholders and appreciate your engagement.
It is a privilege to serve as your Chair and I greatly value your support of US Foods. On behalf of the Board and everyone at US Foods, we are grateful for your continued trust and support. Thank you for being a US Foods stockholder.
Sincerely,
|
"Throughout 2023, the dedicated US Foods team relentlessly focused on delivering best-in-class service to customers and executing on strategic long-range plan initiatives."
|
ROBERT M. DUTKOWSKY
Chair of the Board
April 2, 2024
|
"After more than a full year with this great company, I am even more confident and excited about our future."
|
DEAR FELLOW STOCKHOLDER
In January 2023, I had the honor of joining US Foods as Chief Executive Officer. After more than a full year with this great company, I am even more confident and excited about our future. I attribute this confidence to the strong momentum we created by delivering against our long-range plan and to our 30,000 dedicated associates who bring their foodservice expertise and tireless dedication to work every day.
At US Foods, our promise is to help our customers Make It. We achieve this by focusing on four key strategic pillars that I announced in 2023 to drive value for our customers, associates and you, our stockholders.
Culture
We are committed to the safety of our associates and made significant strides in 2023 to reduce the number of vehicle accidents and associate injuries across our facilities, improving overall safety performance by 23%. Creating a supportive and inclusive workplace is also key to our success, and we increased our diverse talent pipeline by filling 51% of new or open leadership roles with women or persons of color, exceeding our 40% goal. We also remain steadfast and responsible stewards of our planet, including our commitment to reducing absolute Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 32.5% by 2032 from our 2019 climate goal base year and offering more sustainable and well-being Exclusive Brands products and Serve Good® responsible disposable products.
Service
We are dedicated to providing our customers with services that are reliable, efficient and easy to use. Our customer service levels are now in line with pre-Covid levels as we worked closely with our vendors to deliver consistent service. We are also taking proactive steps to further improve routing efficiency and reduce miles driven, while increasing cases per mile. In fact, in 2023, we delivered our best cases per mile in company history. Importantly, we boosted our digital leadership position through our new MOXēTM ecommerce platform that enables customers to place orders, manage inventory and check invoices all from the palm of their hand, while freeing up time for our sales teams to further accelerate growth. We have now embedded the MOXēTM platform across 100% of our local restaurant business and approximately 50% of our national chain business.
Growth
In 2023, we drove Net Sales growth of 4.5% to $35.6 billion. We exceeded 1.5x restaurant market growth and grew independent cases by 6.9% in 2023, consistently gaining share with independent restaurants enabled by technology and our service model advantages. And, we also grew share in both Healthcare and Hospitality, largely by converting our pipeline of customers into new business through innovation, such as our VITALS platform for acute care and senior living facilities. To bolster our footprint in key markets, we executed two tuck-in acquisitions - Renzi Foodservice and Saladino's. And we continued to differentiate ourselves through our fresh, on-trend and labor-saving ScoopTM product innovations and unique team-based selling model featuring our expert chefs and restaurant operations consultants.
Profit
Driving margin, productivity and optimization are the key tenets of our Profit pillar. We are focused on growing our Exclusive Brands to drive margin expansion. And our new flexible schedules in our distribution centers are reducing costs associated with turnover and helping us accelerate productivity. Addressing cost of goods sold, managing pricing to help neutralize commodity volatility, optimizing indirect spend and enhancing our Supply Chain operations also contributed to increased Gross Profit of 11.9% to $6.1 billion in 2023. As a result of our strategies, we grew Net Income to $506 million, an increase of 90.9%, and grew Adjusted EBITDA* to $1.56 billion, an increase of 19.0%.
We also maintain a disciplined approach to capital deployment. We reduced Total Debt to $4.67 billion, a decrease of $180 million, and reduced Net Debt* to $4.4 billion, a decrease of $238 million. This resulted in a reduction of our Net Debt* to Adjusted EBITDA* leverage ratio to 2.8 times, well within our stated range of 2.5-3.0 times. And we made significant progress in our $500 million share repurchase program, purchasing approximately $300 million in 2023.
In closing, I am pleased with our progress in 2023 as we executed the four pillars of our strategy, which is driving increased safety, productivity, and profitability - all as we live our Cultural Beliefs as a company. Even with this tremendous progress, we have a long runway of profitable growth and shareholder returns in front of us. I look forward to even greater success as we complete our current long-range plan by the end of 2024 and embark on our next exciting long-range plan that we will share in June.
I invite you to attend our virtual US Foods 2024 Annual Meeting on Wednesday, May 15, 2024, at 8:00 a.m. Central Daylight Time. And please submit your vote today - your vote matters! Meeting details and voting instructions are included in the attached Notice of Annual Meeting and Proxy Statement.
It is a true honor to serve as CEO of this great company and I greatly value your support. We are in a strong position today, and I believe we have sustainable competitive advantages to outperform the market well into the future as we continue to do what we do best - helping our customers Make It every day. Thank you for your continued trust and confidence in US Foods.
Sincerely,
Dave Flitman
Chief Executive Officer
*Note: An asterisk denotes a non-GAAPmeasure. All reconciliations to non-GAAP financial measures can be found in Appendix A.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Wednesday, May 15, 2024
8:00 a.m. (Central Daylight Time)
We are pleased to provide notice of the 2024 Annual Meeting of Stockholders of US Foods Holding Corp. (including any adjournments, postponements, or continuations thereof, the "Annual Meeting"). This year's Annual Meeting will be a completely virtual meeting of stockholders. You will be able to attend and participate in the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/USFD2024, where you will be able to listen to the meeting live, submit questions, and vote.
MEETING AGENDA
As described in the proxy statement detailing the business to be conducted at the Annual Meeting (the "Proxy Statement"), the holders of our Common Stock, par value $0.01 per share ("Common Stock"), will be asked to:
- Elect nine director nominees to our board of directors (our "Board");
- Approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed in the Proxy Statement;
- Approve an amendment to the US Foods Holding Corp. Amended and Restated Employee Stock Purchase Plan;
- Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2024; and
- Transact such other business that may properly come before the Annual Meeting.
RECORD DATE
Stockholders of record at the close of business on March 18, 2024, are entitled to notice of, and to vote at, the Annual Meeting.
ONLINE PROXY DELIVERY AND VOTING
As permitted by the Securities and Exchange Commission, we are making this Proxy Statement and the Company's annual report to stockholders
available to our stockholders electronically via the Internet. We believe electronic delivery expedites your receipt of materials, reduces the
environmental impact of our Annual Meeting, and reduces costs significantly. Beginning on or about April 2, 2024, a Notice of Internet Availability of
Proxy Materials ("Notice") was mailed to each of our stockholders of record as of March 18, 2024. The Notice contains instructions on how you can
access the proxy materials and vote online. If you received the Notice by mail, you will not receive a printed copy of the proxy materials unless you
request one in accordance with the instructions provided in the Notice. As more fully described in the Notice, all stockholders may choose to access
these materials online or may request printed or emailed copies.
We encourage you to vote your shares as soon as possible. Specific instructions for voting over the internet or by telephone or mail are included in
the Notice. If you attend the virtual Annual Meeting and vote electronically during the meeting, your vote will replace any earlier vote.
By Order of the Board of Directors,
MARTHA HA
Executive Vice President, General Counsel and Corporate Secretary
Access The Proxy Statement And Vote In One of Four Ways:
Internet
Visit the website on your proxy or voting instruction form
Telephone
Call the telephone number on your proxy or voting instruction card
Sign, date, and return your proxy or voting instruction card in the enclosed envelope
At the Meeting
Attend the virtual Annual Meeting at
www.virtualshareholdermeeting.com/
USFD2024
Please refer to the Notice or the information forwarded by your bank, broker, or other nominee to see which voting methods are available to you.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 15, 2024.
The Proxy Statement and our 2023 Annual Report are available free of charge at www.virtualshareholdermeeting.com/USFD2024 and under the Annual Report and Proxy Statements tab in the Financial Information section of our Investor Relations website (https://ir.usfoods.com/ investors/financial-information/annual-reports).
TABLE OF CONTENTS
This proxy statement (this "Proxy Statement") is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") of US Foods Holding Corp., a Delaware corporation ("US Foods," the "Company," "we," "us" or "our"), for the Annual Meeting of Stockholders scheduled to be held on May 15, 2024 (including any adjournments, postponements, or continuations thereof, the "Annual Meeting") at 8:00 a.m. Central Daylight Time. You will be able to attend and participate in the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/USFD2024 where you will be able to listen to the meeting live, submit questions, and vote. This Proxy Statement and accompanying form of proxy card were first mailed to stockholders on or about April 2, 2024.
Proxy Summary | 1 |
Proposal 1: Election of Directors | 8 |
Corporate Governance | 16 |
Director Compensation | 29 |
Proposal 2: Advisory Vote on Executive Compensation
32
Compensation Discussion and Analysis | 33 |
Compensation and Human Capital Committee Report | 51 |
Executive Compensation | 52 |
Pay Versus Performance | 64 |
Proposal 3: Approval of an Amendment to the Employee Stock Purchase Plan
67
Proposal 4: Ratification of Appointment of Independent Registered Public Accounting Firm
71
Audit Committee Report | 72 |
Security Ownership of Certain Beneficial Owners, Directors, and Executive Officers | 73 |
About the Annual Meeting | 76 |
Other Matters | 82 |
Appendix A - Non-GAAP Financial Measures | A-1 |
Appendix B - Amended and Restated Employee Stock Purchase Plan | B-1 |
FORWARD-LOOKING STATEMENTS
Statements in this Proxy Statement which are not historical in nature are "forward-looking statements" within the meaning of the federal securities laws. These statements often include words such as "believe," "expect," "project," "anticipate," "intend," "plan," "outlook," "estimate," "target," "seek," "will," "may," "would," "should," "could," "forecast," "mission," "strive," "more," "goal," or similar expressions (although not all forward-looking statements may contain such words) and are based upon various assumptions and our experience in the industry, as well as historical trends, current conditions, and expected future developments. However, you should understand that these statements are not guarantees of performance or results and there are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those expressed in the forward-looking statements, including, among others: economic factors affecting consumer confidence and discretionary spending and reducing the consumption of food prepared away from home; cost inflation/deflation and commodity volatility; competition; reliance on third party suppliers and interruption of product supply or increases in product costs; changes in our relationships with customers and group purchasing organizations; our ability to increase or maintain the highest margin portions of our business; achievement of expected benefits from cost savings initiatives; increases in fuel costs; changes in consumer eating habits; cost and pricing structures; the impact of climate change or related legal, regulatory or market measures; impairment charges for goodwill, indefinite-lived intangible assets or other long-lived assets; the impact of governmental regulations; product recalls and product liability claims; our reputation in the industry; labor relations and increased labor costs and continued access to qualified and diverse labor; indebtedness and restrictions under agreements governing our indebtedness; interest rate increases; disruption of existing technologies and implementation of new technologies; cybersecurity incidents and other technology disruptions; risks associated with intellectual property, including potential infringement; effective integration of acquired businesses; potential costs associated with stockholder activism; changes in tax laws and regulations and resolution of tax disputes; certain provisions in our governing documents; health and safety risks to our associates and related losses; adverse judgments or settlements resulting from litigation; extreme weather conditions, natural disasters and other catastrophic events; and management of retirement benefits and pension obligations.
For a detailed discussion of these risks, uncertainties and other factors that could cause our results to differ materially from those anticipated or expressed in any forward-looking statements, see the section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023 filed with the SEC on February 15, 2024. Additional risks and uncertainties are discussed from time to time in current, quarterly, and annual reports filed by the Company with the SEC, which are available on the SEC's website at www.sec.gov. Additionally, we operate in a highly competitive and rapidly changing environment; new risks and uncertainties may emerge from time to time, and it is not possible to predict all risks nor identify all uncertainties. The forward- looking statements contained in this Proxy Statement speak only as of the date of this Proxy Statement and are based on information and estimates available to us at this time. We undertake no obligation to update or revise any forward-looking statements, except as may be required by law.
WEBSITES
Links to websites included in this Proxy Statement are provided solely for convenience. Information contained on websites, including on our website, is not, and will not be deemed to be, a part of this Proxy Statement or incorporated by reference into any of our other filings with the SEC.
ABOUT US FOODS
US FOODS AT A GLANCE(1)
US Foods is one of America's great food companies and a leading foodservice distributor, providing restaurants, healthcare, hospitality, governmental and educational institutions with broad and innovative food offerings, a comprehensive suite of e- commerce, technology and business solutions, and omni-channel solutions that enable our customers to receive product in ways that best suit their needs. Our success is powered by our talented associates who come to work every day with one goal in mind - to help our customers Make It.
70+ | ~90 | $35.6B | 6,500+ | ~4,000 |
Distribution Facilities | CHEF'STORE® | Net Sales | Trucks in Our Fleet | Sales Associates |
Locations | ||||
150+ | ~30,000 | 400,000+ | ~6,000 | ~250,000 |
Years in Business | Associates | Products | Suppliers | Customers |
FISCAL YEAR 2023 PERFORMANCE HIGHLIGHTS(2)
Delivered Net Sales of $35.6 billion, up 4.5%
Grew total case | Grew Diluted | |||
volume 4.4%; | Increased Gross | Grew Net Income | Grew Adjusted | EPS 100.0% to |
independent | Profit 11.9% to | to $506 million, | EBITDA* to $1.56 | $2.02; Adjusted |
case volume | $6.1 billion | up 90.9% | billion, up 19% | Diluted EPS* |
6.9% | 22.9% to $2.63 | |||
WHERE YOU CAN LEARN MORE
LEARN MORE ABOUT US
You can learn more about US Foods, by visiting our website at www.usfoods.com or by viewing our social media content on the platforms noted below.
@usfoods | us_foods | US Foods | US Foods |
- Information provided above is as of fiscal year end 2023.
- An asterisk denotes a non-GAAP measure. For more information, including reconciliations of our non-GAAP measures to the comparable GAAP measures, see Appendix A to this Proxy Statement. All percentages noted above are increases over fiscal year 2022.
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Disclaimer
US Foods Holding Corp. published this content on 29 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 April 2024 21:48:04 UTC.
