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Incentive Plans
12 Months Ended
Dec. 30, 2023
Incentive Plans  
Incentive Plans

(15)

Incentive Plans

Annual Bonus Plan; Special Bonus Awards. Annually, our board of directors establishes a bonus plan that provides for cash awards to be made to our executive officers and other senior managers upon our company’s attainment of pre-set annual financial objectives and individual performance. Awards are normally paid in cash in a lump sum following the close of each plan year. At December 30, 2023, accrued expenses in the accompanying consolidated balance sheet includes an accrual for the annual bonus of $11.1 million. Threshold performance objectives were not attained for fiscal 2022 and therefore accrued expenses in the accompanying consolidated balance sheet do not include an accrual for the annual bonus plan at December 31, 2022.

Omnibus Incentive Compensation Plan. Upon the recommendation of our compensation committee, our board of directors on March 10, 2008 adopted (subject to stockholder approval) the B&G Foods, Inc. 2008 Omnibus Incentive Compensation Plan, which we refer to as the Omnibus Plan. Our stockholders approved the Omnibus Plan at our annual meeting on May 6, 2008. Our stockholders reapproved the material terms of the performance goals in our Omnibus Plan at our annual meeting on May 16, 2013. Upon the recommendation of our compensation committee, our board of directors in March 2017 approved (subject to stockholder approval) the amendment and restatement of the Omnibus Plan, renamed the Omnibus Incentive Compensation Plan. Our stockholders approved the amended and restated Omnibus Plan, including the materials terms of the performance goals, at our annual meeting on May 23, 2017. Upon the recommendation of our compensation committee, our board of directors in March 2023 adopted an amendment to our Omnibus Plan (subject to stockholder approval), to increase the number of shares of common stock available for issuance under the plan by 5,000,000. Our stockholders approved the amendment at our annual meeting on May 17, 2023.

The Omnibus Plan authorizes the grant of performance share awards, restricted stock, options, stock appreciation rights, deferred stock, stock units and cash-based awards to employees, non-employee directors and consultants. As of December 30, 2023, 5,432,804 shares of common stock were available for future issuance. Some of those shares are subject to outstanding performance share LTIAs and stock options as described in the table below.

Performance Share Awards. Beginning in fiscal 2008, our compensation committee has made annual grants of performance share LTIAs to our executive officers and certain other members of senior management under the Omnibus Plan. The performance share LTIAs entitle the participants to earn shares of common stock upon the attainment of certain performance goals over the applicable performance period. The performance period is typically three years.

Each performance share LTIA has a threshold, target and maximum payout. The awards are settled subject to and based upon the achievement of applicable performance objectives over the applicable performance period. If our performance fails to meet the performance threshold, then the awards will not vest and no shares will be issued pursuant to the awards. If our performance meets or exceeds the performance threshold, then a varying amount of shares from the threshold amount (50% of the target number of shares) up to the maximum amount (233.333% or 300.000%, as applicable, of the target number of shares) may be earned.

Subject to the performance goal for the applicable performance period being certified in writing by our compensation committee as having been achieved, shares of common stock are issued prior to March 15 following the completion of the performance period.

The following table details the activity in our performance share LTIAs for fiscal 2023:

    

    

Weighted Average

Number of

Grant Date Fair Value

    

Performance Shares (1)

      

(per share)(2)

Beginning of fiscal 2023

 

1,072,274

$

20.26

Granted

 

998,191

$

13.00

Vested

 

(360,926)

$

10.84

Forfeited

 

(102,771)

$

29.32

End of fiscal 2023

 

1,606,768

$

17.29

(1)Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 233.333% or 300.000%, as applicable, of the target number of performance shares).
(2)The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes) reduced by the present value of expected dividends using the risk-free interest-rate as the award holders are not entitled to dividends or dividend equivalents during the vesting period.

Restricted Stock. The following table details the activity in our restricted stock for fiscal 2023:

    

    

Weighted Average

Number of Shares

Grant Date Fair Value

    

of Restricted Stock

      

(per share)(1)

Beginning of fiscal 2023

 

83,294

$

26.51

Granted

 

329,821

$

15.17

Vested

 

(40,944)

$

24.66

Forfeited

 

(2,598)

$

18.63

End of fiscal 2023

 

369,573

$

16.65

(1)The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes).

Stock Options. The following table details our stock option activity for fiscal 2023 (dollars in thousands, except per share data):

Weighted

Weighted Average

Average

Contractual Life

Aggregate

    

Options

    

Exercise Price

    

Remaining (Years)

    

Intrinsic Value

Outstanding at beginning of fiscal 2023

 

820,141

$

31.38

 

6.24

$

Granted

 

949,995

$

20.00

 

Exercised

 

$

Forfeited

 

$

Expired

(24,386)

$

37.04

Outstanding at end of fiscal 2023

 

1,745,750

$

25.11

 

7.44

$

Exercisable at end of fiscal 2023

 

566,873

$

30.05

 

4.61

$

The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is generally based on the “simplified method” in accordance with accounting guidance. We generally utilize the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. However, a portion of the options granted during the first quarter of 2023 were granted with exercise prices significantly above the closing price on the date of grant. For those options, we modified the method for determining the expected term and adjusted to or towards the full remaining contractual life. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The assumptions used in the Black-Scholes option-pricing model during fiscal 2023 and fiscal 2022 were as follows:

Fiscal 2023

Fiscal 2022

Weighted average grant date fair value

$

2.71

    

$

3.73

Expected volatility

39.6% - 43.3%

39.5%

Expected term

5.5 years - 8.3 years

5.5 years

Risk-free interest rate

3.6% - 3.7%

2.9%

Dividend yield

5.4% - 5.9%

8.5%

Non-Employee Director Grants. Each of our non-employee directors receives an annual grant of common stock as part of his or her non-employee director compensation. These shares fully vest when issued. In addition, each of our non-employee directors is given the option to receive all or a portion of his or her annual board service fee in cash or an equivalent amount of stock options. Such stock options are reflected in the information provided above under “Stock Options.

The following table details the net number of shares of common stock issued by our company during fiscal 2023, 2022 and 2021 for share-based compensation:

    

Fiscal 2023

    

Fiscal 2022

    

Fiscal 2021

Number of performance shares vested

 

360,926

 

337,284

 

86,523

Shares withheld for tax withholding

 

(131,803)

 

(125,152)

 

(35,281)

Shares of common stock issued for performance share LTIAs

 

229,123

 

212,132

 

51,242

Shares of common stock issued upon the exercise of stock options

2,227

467,152

Shares of common stock issued to non-employee directors for annual equity grants

 

81,531

 

46,773

 

39,251

Shares of restricted common stock issued to employees

329,821

51,590

38,098

Shares of restricted stock cancelled for tax withholding upon vesting

(14,448)

(15,903)

(21,528)

Shares of restricted stock cancelled upon forfeiture

(2,598)

(3,668)

(1,129)

Net shares of common stock issued

 

623,429

293,151

573,086

The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, restricted stock, stock options, non-employee director stock grants, and other share-based payments) during the last three fiscal years and where that expense is reflected in our consolidated statements of operations (in thousands):

Consolidated Statements of Operations Location

    

Fiscal 2023

    

Fiscal 2022

    

Fiscal 2021

Compensation expense included in cost of goods sold

$

633

$

695

$

910

Compensation expense included in selling, general and administrative expenses

 

6,558

 

3,222

 

4,473

Total compensation expense for share-based payments

$

7,191

$

3,917

$

5,383

As of December 30, 2023, there was $7.2 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.0 fiscal years, $4.0 million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over the next 2.2

fiscal years, and $2.3 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 4.1 fiscal years.