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United Natural Foods, Inc. Message Board

  • wooglin_kai wooglin_kai Nov 19, 2013 12:11 PM Flag

    PROXY: Teamsters' Proposal 7

    Re Proposal 7, presented by the good folks at the International Brotherhood of Teamsters, which way to vote?

    Currently UNFI uses a “double trigger mechanism to determine eligibility for accelerated vesting” of executive equity awards; meaning that both a “change of control” and “employment must be terminated” to have the executive’s options vest immediately. The Teamsters have proposed to have “any unvested award…vest on a partial, pro rata basis up to the time of the senior executive’s termination…”

    UNFI counters that their current double trigger plan is fair to all and it allows UNFI to be competitive re employment. Or in other words, lots of companies do the same, so we have to / should, instead of perhaps shedding some of the rape and pillaging common shareholders experience re various forms of seemingly outrageous compensation methods.

    Under either scenario, what would happen if UNFI was taken over by a PRIVATE firm and the UNFI executive loses his/her job several months later? Change of control? Check. Employment termination? Check. Options are vested, but there isn’t any common stock to receive via exercise. Perhaps the executive would receive shares in the private company with the ability to immediately sell them back to the company? I imagine the executives would not get s c r e w e d.

    I think I’ll vote in favor of the Teamsters’ proposal.

    Comments welcome!

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