SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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The Kraft Heinz Company
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|September 3, 2019|
Dear Fellow Stockholders:
I am writing to ask for your support by voting in accordance with the recommendations of the Board of Directors of The Kraft Heinz Company (the Company) on all of the proposals included in our Proxy Statement for our 2019 Annual Meeting of Shareholders, which was filed with the U.S. Securities and Exchange Commission (SEC) on August 2, 2019.
In particular, I am requesting your support on Proposal 2 the annual advisory vote to approve our executive compensation (referred to here as the Say-on-Pay Proposal).
Glass, Lewis & Co., LLC (Glass Lewis), a leading proxy advisory firm, has recommended that stockholders vote in favor of our Say-on-Pay Proposal. In contrast, another leading proxy advisory firm, Institutional Shareholder Services, Inc. (ISS), has recommended that stockholders vote against this proposal.
As described in our Proxy Statement and below, I believe our executive compensation program directly links pay with performance. Specifically, a proxy advisory firm has questioned the value of the performance-based restricted stock units (PSUs) that were granted to our named executive officers in March 2018. However, as described in our Proxy Statement, I note that as of December 29, 2018, due to the performance of our business, the expected payout of the PSUs was determined to be zero. Therefore, while we were required to report the full grant date accounting value of these PSUs in the summary compensation table in accordance with SEC rules, these awards have no actual value at this time, which is the very cornerstone of pay-for-performance and clearly indicates that we are holding our named executive officers accountable for performance results. Similarly, while we were required to report the full value of cash bonuses that were earned by our named executive officers for fiscal 2018 in the summary compensation table in accordance with the SEC rules, as described in our Proxy Statement in further detail, several of our named executive officers have asked, and the Compensation Committee has agreed, that their bonuses be forfeited for the 2018 fiscal year due to the Companys performance, including the decline in the Companys stock price. As a result, they did not receive any cash bonuses for fiscal 2018, even though, based on the combination of individual and Company performance, bonuses were earned. Finally, as disclosed in our Proxy Statement, our former chief executive officers total actual compensation in 2018 was $1,149,136, as he forfeited the PSUs and restricted stock units granted to him in 2018 (with an aggregate grant date fair value of $25,483,713) due to the performance of the business and his decision to leave the company, respectively. In addition, our former chief executive officer did not receive any additional severance other than what he was entitled to under the Companys U.S. Severance Pay Plan that is generally applicable to U.S.-based salaried employees, including our U.S.-based named executive officers.
I believe that the above demonstrates that we take seriously our commitment to pay-for-performance. I also strongly believe that our executive compensation program is in the best interests of the Companys stockholders, fosters close alignment between the interests of our stockholders and our executive officers and that both the design and, most importantly, outcomes of our program support these beliefs.
I encourage you to vote FOR Proposal 2 the annual advisory vote to approve our executive compensation.
/s/ Joao M. Castro-Neves
Joao M. Castro-Neves, Chair of the Compensation Committee