SunOpta Inc. Reports Inducement Grants to CEO Brian W. Kocher Under NASDAQ Listing Rule 5635(c)(4)

Rhea-AI Summary

SunOpta Inc. (STKL) reported the appointment of Brian W. Kocher as CEO and the granting of stock option, restricted stock, and performance stock awards, approved by the Compensation Committee, in accordance with NASDAQ Listing Rule 5635(c)(4). Mr. Kocher was granted 144,404 restricted stock units, 230,804 time-based stock options, and 288,808 performance stock units at target performance, effective on his first day of employment. The awards will vest over three years, and the performance stock units will be subject to specific performance hurdles based on the Company’s total shareholder return performance relative to certain Russell 3000 Food and Beverage companies during the period from January 1, 2024, to December 31, 2026.

Insights

Market Research Analyst

The appointment of Brian W. Kocher as CEO of SunOpta and the subsequent equity awards represent strategic corporate decisions with potential long-term implications for the company's performance. From a market research perspective, the structure and size of the equity awards can signal the board's confidence in the new CEO's ability to drive growth and increase shareholder value. The inclusion of performance stock units tied to total shareholder return relative to peers introduces a competitive benchmark, which may align the CEO's incentives with the interests of shareholders.

Furthermore, the market may view the inducement awards as a tool to attract and retain top executive talent, which could be a positive indicator of the company's commitment to leadership stability and strategic execution. However, the market's reaction to the news will likely be contingent upon Mr. Kocher's perceived capabilities and track record, as well as the company's past performance and future potential within the sustainable, plant-based foods sector.

Financial Analyst

Analyzing the financial implications of the newly appointed CEO's equity awards, it is important to consider the dilutive effect of issuing additional shares. The 144,404 restricted stock units, 230,804 stock options and up to 577,616 performance stock units represent a significant addition to the company's share count upon vesting. This dilution could potentially affect earnings per share (EPS) figures, which are closely watched by investors.

Moreover, the performance hurdles for the stock units are tied to the company's total shareholder return as compared to certain Russell 3000 Food and Beverage companies. This creates a direct link between executive compensation and company performance, potentially driving operational improvements and strategic initiatives that enhance shareholder value. The financial community will closely monitor the progress towards these performance targets as a measure of the CEO's effectiveness and the company's competitive positioning.

Compensation Consultant

From a compensation strategy standpoint, the design of Mr. Kocher's equity awards package is indicative of current trends in executive compensation, where a significant portion is variable and tied to performance. The mix of restricted stock units, time-based stock options and performance stock units is tailored to ensure that executive rewards are linked to both short-term and long-term company success.

The decision to grant additional restricted stock units equivalent to the value of shares purchased by Mr. Kocher in the open market represents a unique mechanism to further align his interests with those of shareholders. This approach could incentivize the CEO to personally invest in the company, thereby reinforcing his commitment to the company's future. The three-year vesting period for the equity awards is a standard practice designed to retain executives and ensure their focus on sustainable performance.

MINNEAPOLIS--(BUSINESS WIRE)-- SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL) (TSX:SOY), a U.S.-based global pioneer fueling the future of sustainable, plant-based foods and beverages, today reported that in connection with the appointment of Brian W. Kocher as Chief Executive Officer, effective January 2, 2024, the Company granted a stock option award, restricted stock award and performance stock award. These awards were approved by the Compensation Committee of the SunOpta Board of Directors on December 1, 2023, and granted as an inducement equity award outside the Company's 2013 Stock Incentive Plan in accordance with NASDAQ Listing Rule 5635(c)(4).

SunOpta granted Mr. Kocher 144,404 restricted stock units, 230,804 time-based stock options and 288,808 performance stock units at target performance (not to exceed 577,616 units at 200% of target performance), effective on his first day of employment. SunOpta will issue additional restricted stock units to Mr. Kocher equal to the number of shares of common stock, not to exceed $1,000,000, purchased by Mr. Kocher in the open market within a designated timeframe. The restricted stock units will vest in equal annual installments over three years, and each vested restricted stock unit will entitle Mr. Kocher to receive one common share of SunOpta. The stock options will vest in equal annual installments over three years and will entitle Mr. Kocher to purchase one common share of SunOpta at an exercise price equal to the closing price of SunOpta’s common shares as reported on Nasdaq on January 2, 2024. The vesting of the performance stock units will be subject to certain performance hurdles based on the Company’s total shareholder return performance relative to certain Russell 3000 Food and Beverage companies during the performance period beginning January 1, 2024 and ending December 31, 2026. Each vested performance stock unit will entitle Mr. Kocher to receive one common share of SunOpta without payment of additional consideration.

About SunOpta Inc.

SunOpta (Nasdaq:STKL) (TSX:SOY) is a U.S.-based, global pioneer fueling the future of sustainable, plant-based food and beverages. Founded more than 50 years ago, SunOpta manufactures natural, organic and specialty products sold through retail and foodservice channels. SunOpta operates as a manufacturer for leading natural and private label brands, and also proudly produces its own brands, including SOWN ^®, Dream^®, and West Life^TM. For more information, visit www.sunopta.com and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240104116273/en/

Investor Relations:

Reed Anderson

ICR

646-277-1260

reed.anderson@icrinc.com



Media Relations:

Konnect Agency

213-988-8344

sunopta@konnectagency.com

Source: SunOpta Inc.

FAQ

Who was appointed as Chief Executive Officer of SunOpta Inc. (STKL)?

Brian W. Kocher was appointed as Chief Executive Officer of SunOpta Inc. (STKL).

What were the stock awards granted to Mr. Kocher?

Mr. Kocher was granted 144,404 restricted stock units, 230,804 time-based stock options, and 288,808 performance stock units at target performance.

What is the vesting period for the stock awards?

The stock awards will vest over three years.

What are the performance hurdles for the performance stock units?

The performance stock units will be subject to specific performance hurdles based on the Company’s total shareholder return performance relative to certain Russell 3000 Food and Beverage companies during the period from January 1, 2024, to December 31, 2026.