Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant  ☐

Payment of Filing Fee (Check the appropriate box):

 

MISSION PRODUCE, INC.

2710 Camino Del Sol

Oxnard, California 93030

 

February 27, 2023

Dear fellow stockholders:

Fiscal 2022 proved to be a challenging year for Mission. Nevertheless, we were able to achieve several key successes and milestones despite these challenges. As always, we remain fully committed to delivering value to our customers, stakeholders, and to you, our stockholders. With fiscal 2022 behind us, we have eagerly begun the hard work that is needed in fiscal 2023 to drive the business forward, and we remain laser focused on bolstering our position as a world leader in sourcing, producing, and distributing our suite of products.

With that in mind, I would like to cordially invite you to attend the 2023 Annual Meeting of Stockholders of Mission Produce, Inc. to be held virtually via live webcast on April 13, 2023, at 1:30 p.m. (Pacific Time). You can attend and participate in the Annual Meeting online, vote your shares electronically, and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/AVO2023.

We have decided to hold the Annual Meeting virtually again as it (i) enables stockholders to attend and participate from any location around the world, (ii) provides for cost savings to the Company and our stockholders, and (iii) reduces the environmental impact of our Annual Meeting.

At the Annual Meeting you will be asked to (i) elect three Class III director nominees for three-year terms, (ii) approve, on an advisory basis, the compensation of our named executive officers, (iii) ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2023, and (iv) transact any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.

Your vote is important to us. Whether or not you plan to participate in the Annual Meeting, it is important that your shares be represented and voted. We encourage you to vote promptly and submit your proxy via the Internet, by telephone, or by completing and mailing a proxy card.

On behalf of our Board of Directors, we thank you for your continued support of the Company.

Sincerely,

 

Stephen J. Barnard

Chief Executive Officer

February 27, 2023

Date and Time: The 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”) of Mission Produce, Inc. will be held on Thursday, April 13, 2023, at 1:30 p.m. Pacific Time.

Location and Attendance: Our 2023 Annual Meeting will be held solely by remote communication via an online platform. You will be able to attend the 2023 Annual Meeting, vote, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/AVO2023 and using your control number which can be found on your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card. Please read “GENERAL INFORMATION” in the accompanying proxy statement.

Record Date: February 14, 2023. Stockholders of record at the close of business on the record date are entitled to receive notice of, and vote at, the 2023 Annual Meeting and any continuation, postponement, or adjournment thereof.

Beginning on February 27, 2023, we sent a Notice Regarding the Availability of Proxy Materials, or the Proxy Statement and proxy card, as applicable, to all stockholders entitled to vote at the 2023 Annual Meeting.

Items of Business: At the 2023 Annual Meeting, you will be asked to:

Voting: Regardless of whether you plan to attend the 2023 Annual Meeting, it is important that your shares be represented and voted. Please read the Notice of Annual Meeting of Stockholders and proxy statement with care and follow the voting instructions to ensure that your shares are represented. We encourage you to submit your proxy as soon as possible by Internet, telephone, or by signing, dating, and returning your proxy card or voter instruction form provided to you.

By order of the Board of Directors,

 

Joanne C. Wu

General Counsel and Secretary

Oxnard, California

February 27, 2023

This Proxy Statement is furnished in connection with the solicitation of proxies, on behalf of the Board of Directors of Mission Produce, Inc., a Delaware corporation (“we,” “our,” the “Company” or “Mission”), for use at our 2023 Annual Meeting of Stockholders (“2023 Annual Meeting”) to be held on Thursday, April 13, 2023, at 1:30 p.m. Pacific Time, or at any adjournment or postponement thereof. At the 2023 Annual Meeting, you will be asked to consider and vote on the matters described in this Proxy Statement. The 2023 Annual Meeting will be held virtually on the Internet. You will be able to attend the 2023 Annual Meeting, vote, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/AVO2023. Only common stockholders of record at the close of business on February 14, 2023, which is the record date for the 2023 Annual Meeting, are permitted to vote at the 2023 Annual Meeting and any adjournment or postponement thereof.

This summary highlights information contained elsewhere in our Proxy Statement and does not contain all of the information that you should consider. We encourage you to read the entire Proxy Statement carefully before voting.

We intend to mail the Notice Regarding the Availability of Proxy Materials (“Notice”), or the Proxy Statement and proxy card, as applicable, on February 27, 2023, to all stockholders entitled to vote at the 2023 Annual Meeting.

Important Notice Regarding Availability of Proxy Materials for the 2023 Annual Meeting to be held on April 13, 2023. This Proxy Statement and 2022 Annual Report are available at www.proxyvote.com. You are encouraged to read these materials before you vote.

Fiscal 2022 was a challenging year for us. Our business experienced a number of setbacks early on in the fiscal year with our transition to a new enterprise resource planning (“ERP”) system. While our operations largely recovered from the challenges associated with our ERP conversion beginning with the second quarter, our financial results continued to be impacted by significant cost inflation, limited fruit supply out of Mexico (our largest sourcing region) and sub-optimal sizing of our owned Peruvian fruit.

While our business certainly faced some headwinds and challenges, we were nevertheless able to deliver several key successes and milestones. First, we generated $1 billion of revenue (a 17% increase compared to the prior year) for the first time in our Company’s nearly 40-year history. Additionally, we made significant inroads with Peruvian programs on our owned production and converted several large retailers to Peruvian product for the first time. We continued to demonstrate the value of our vertically integrated global sourcing network and delivered for our customers amidst an industry environment plagued with short supply and high pricing. Importantly, we continued to make investments in expanding our global footprint, a critical element of our long-term growth strategy, with the expansion into the United Kingdom. We began development of our new distribution center in the United Kingdom and put in place a strong team with a proven track record.

As demonstrated below, our business remains resilient, and we delivered on several financial, strategic, and operational points that position us well for future long-term growth and success.

For almost 40 years, we have invested in our people, provided the highest quality product, and demonstrated good stewardship of our planet. Our sustainability strategy focuses on identifying the sustainability issues and risks most relevant to our business and developing a comprehensive governance structure and long-term strategy to address these key risks.

In 2020, we performed a systematic materiality assessment with guidance from an external third party to identify the most important areas of sustainability from a business and stakeholder perspective. We engaged with more than 40 stakeholders, including customers, suppliers, business partners, and Company leadership to learn the topics that were most important and/or relevant to each stakeholder group. As part of this materiality assessment, we focused primarily on the following:

Our sustainability framework currently centers around three key pillars – people, product, and planet. Each pillar is supported by several key focus areas that are most relevant to our business and that are evaluated consistently to ensure relevance, prioritization, and risk mitigation. Our focus areas are geared towards identifying where the business has the most impact as well as the topics where we feel we can make a significant positive impact.

 

The People pillar of our sustainability strategy focuses on our people and the communities within which we operate. We seek to provide the finest workplace for our people by being transparent in our business practices, demonstrating our credibility, and adhering to our standards of integrity. We are also actively involved in supporting our surrounding communities, and we contribute to causes involving children, families, and agriculture education, including through our Mission Produce Foundation charitable organization.

Within our Product pillar, we focus on food waste, food safety and quality, and packaging. Our Research and Development teams consistently explore opportunities to implement technologies that are environmentally, socially, and economically impactful, including solutions to reduce food waste and extend the shelf-life of our products. Food safety and quality is a top priority in every aspect of growing, packing, and shipping avocados to market. We have a centralized department comprised of scientists, engineers, project managers, sanitation professionals, and food safety experts who manage global uniformity for all food safety programs. Additionally, our teams consistently explore packaging alternatives to reduce our use of plastic and cardboard without sacrificing product integrity.

We believe and understand the meaningful impact our business has on the planet. Within our Planet pillar, we focus on water management, energy and emissions, and the environmental impact of our global footprint. We use advanced irrigation systems to keep our water usage per avocado well below the industry average. We track our emissions in accordance with the Greenhouse Gas (GHG) Protocol, which supplies the world’s most widely used greenhouse gas accounting standards, as well as report on our energy use year-over-year. In addition, our precision agriculture methods are adapted to satisfy the environmental needs of each region, so we can grow healthier trees with lower inputs while preserving the natural resources of our growing regions.

We take a strategic approach to identifying projects and initiatives each year that fall within our sustainability pillars and address key focus areas or mitigate important sustainability risks. For fiscal 2022, our key successes included the following:

For the past two years, we have released an annual Sustainability Report, which is available on our website at www.missionproduce.com. Our annual Sustainability Report includes information regarding our approach to sustainability, our goals and roadmap, sustainability governance structure, operating procedures, projects and initiatives, and use of resources.

In our annual Sustainability Report, we also report in reference to the Sustainability Accounting Standards Board (SASB) index framework to provide our stakeholders with standardized metrics showing the comprehensive impact of Mission’s sustainability activities. We primarily report under the Agricultural Products industry in addition to select metrics under the Food Retailers & Distributors industry. We have historically reported under the SASB index on the following categories:

We have a cross-functional, executive-level sustainability council that sets our overall sustainability strategy, provides guidance on program implementation, and oversees the continuing enhancement of our approach to sustainability. Our efforts are managed on a day-to-day basis by our Sustainability Senior Manager who works with our subject area experts across our global footprint to ensure we are regularly evaluating current and emerging opportunities and risks from a sustainability standpoint.

Our Board of Directors is committed to diversity and the pursuit of board refreshment and balanced tenure. Our Board of Directors has actively focused on refreshing the composition and expertise of the Board of Directors over the last several years to better align with the Company’s status as a public company, to enhance the Board of Directors’ oversight capabilities with respect to our long-term strategy, and to increase the diversity of perspectives, experience, gender, and ethnic representation on the Board of Directors. The following charts show the diversity of our nine-member Board of Directors.

Our Board of Directors recognizes that the Company’s success over the long term requires a strong corporate governance framework. As the Company grows and evolves, our Board of Directors evaluates and refines its governance policies and practices. Below are highlights of our corporate governance framework:

The Compensation Committee believes that it is imperative that our executive compensation program motivates our management team in such a manner as to encourage and reward successful execution of our long-term growth strategy. Fundamentally, we believe that pay should be linked to performance and that executives and long-term stockholders alike should benefit from our success and growth. In addition, we design our executive compensation program to recognize the value of our management team and ensure that the overall compensation mix drives strong retention and recruitment.

In fiscal 2022, our executive compensation program consisted of three components: (1) base salary; (2) an annual cash incentive award based on achievement of a pre-determined operating income goal; and (3) the introduction of a long-term equity incentive program comprised of time-vesting restricted stock units (“RSUs”) and three-year performance-based share units (“PSUs”).

Due to the challenges the Company faced with the implementation of a new ERP system in the first quarter of fiscal 2022, persistent cost inflation, macro-level headwinds impacting supply chain, labor, and fruit availability out of Mexico, and fruit sizing issues from our owned Peruvian production, the Company did not achieve the threshold level of adjusted operating income performance required for a payout under our 2022 annual cash incentive plan. As such, the Company’s named executive officers (“NEOs”) received a 0% payout under our 2022 annual cash incentive plan⁵, thereby demonstrating a firm commitment to our pay-for-performance philosophy.

For fiscal 2022, after extensive review and discussion, the Compensation Committee introduced a long-term equity incentive program comprising 30% of the annual long-term equity value in the form of PSUs and 70% in the form of RSUs, further demonstrating our commitment to a pay-for-performance philosophy. The Compensation Committee believes the PSUs create a direct tie between compensation and Company performance and foster long-term stockholder value creation, while the RSUs provide important retention value and a tie to our stock price performance. The 2022-2024 PSUs are earned based on achievement of pre-established cumulative adjusted net income per share goals over the three-year performance period (November 1, 2021 to October 31, 2024). Our RSUs vest ratably over a three year period subject to continued service through the vesting date.

Prior to our Initial Public Offering in October 2020 (“IPO”), we only granted options. We did not grant any equity awards in fiscal 2021. Our 2022 long-term equity awards were granted in January 2022 with the following values which were informed in part by ranges around market median values among our peer group and compensation survey data.

Timothy A. Bulow, our President and Chief Operating Officer, joined the Company in July 2022 and did not participate in our 2022 long-term equity award program.

The Compensation Committee reviewed and implemented a number of compensation best practices in fiscal 2022, including the following:

In addition to the foregoing, we maintain the following executive compensation best practices:

Our Board of Directors currently consists of nine members. In accordance with our Certificate of Incorporation, our Board of Directors is divided into three classes (Class I, Class II, and Class III) with staggered three-year terms. At each annual meeting of stockholders, the successors to the directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following their election, or, if earlier, until his or her earlier death, resignation, disqualification, or removal. In December 2021, the Board of Directors appointed Shaunte D. Mears-Watkins as a Class II director. Ms. Mears-Watkins was identified as a director candidate by an independent third-party search firm used by the Nominating and Corporate Governance Committee to assist with identifying qualified director candidates. Our current directors are divided among the three classes as follows:

Based on the recommendation of the Nominating and Governance Committee, the Board of Directors has nominated Stephen J. Barnard, Bonnie C. Lind, and Linda B. Segre for re-election to the Board for three-year terms expiring at the 2026 annual meeting of stockholders, or until the director’s earlier death, resignation, disqualification, or removal.

The following table provides an overview of the composition of our Board of Directors.

Our Board of Directors consists of a diverse group of highly qualified leaders in their respective fields. Our directors have significant and wide-ranging management experience, and many have extensive farming, agricultural or food related experience relevant to our industry. Several of our directors also have public company experience either from serving as chief executive officers or chief financial officers of public companies or from serving on public company boards (other than the Mission board). The Board of Directors and the Nominating and Corporate Governance Committee believe the skills, qualities, attributes, experience, and diversity of backgrounds of our directors provide us with a diverse range of perspectives to effectively address the Company’s current and evolving needs.

The following table highlights the key skills and qualifications of our Board of Directors.* The Nominating and Corporate Governance Committee and the Board of Directors continuously monitors the mix of specific experience, qualifications and skills of our directors in order to ensure that the Board of Directors, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s current and future business needs and organizational structure.

The Nominating and Corporate Governance Committee and the Board of Directors views diversity as a priority, considers diversity in its director candidate selections, and seeks representation across a range of attributes. Diversity includes race, ethnicity, age, and gender and is also broadly construed to take into consideration many other factors, including industry knowledge, operational experience, agricultural or food experience, academic expertise, geography, and personal backgrounds.

In accordance with Nasdaq rules, the following Board Diversity Matrix sets forth the required diversity statistics for our directors:

The Nominating and Corporate Governance Committee annually reviews all relationships directors have that are relevant to a determination of independence and recommends to the Board of Directors the status of a director’s independence under applicable rules established by the Securities and Exchange Commission (“SEC”) and Nasdaq. Based on this review and recommendation, the Board of Directors has determined that the following six directors are independent: Mr. Beebe, Ms. Lind, Mr. Pack, Ms. Segre, Mr. Taylor, and Ms. Mears-Watkins. As a result, we currently have a majority of independent directors. The Board of Directors has also determined that each of the directors serving on our three standing committees satisfies applicable standards of independence and other requirements for service on such committee.

Mr. Barnard serves as the Company’s Chief Executive Officer and therefore is not an independent director. In addition, the Company purchases avocados from farms owned by Mr. Barnard and Barnard Properties, an entity owned by Mr. Barnard, in amounts exceeding the categorical standards set by Nasdaq. Purchases are made at market prices similar to purchases from other California growers.

In November 2022, the Company entered into a long-term lease and an option purchase agreement with AgroLatam, a company owned by Mr. Gonzalez. The parcels of land leased and the option to purchase land from AgroLatam are related to the Company’s blueberry farming operations in Olmos, Peru. The amounts paid for the parcel of land purchased and the amounts to be paid to AgroLatam under the lease, exceed the categorical standards set forth by Nasdaq, and therefore, Mr. Gonzalez is not considered an independent director. In addition, the Company previously had a consulting agreement with Mr. Gonzalez which terminated in June 2021.

Lastly, the Company purchases avocados from Rancho Guacamole, LLC, an avocado grower in Southern California that is owned by Mr. Bershad, at market prices similar to purchases from other California growers. The amounts sold exceed the categorical standards set forth by Nasdaq, and therefore, Mr. Bershad is not considered an independent director.

The Board of Directors believes that board refreshment is important to help ensure that the Board of Directors’ composition is aligned with the needs of the Company as it evolves over time and that fresh viewpoints and perspectives are regularly considered. Due to the nature of the agricultural and farming industry, however, the Board of Directors also feels that, over time, directors develop an understanding of the Company and industry which provides significant value to stockholders.

Further, a certain degree of continuity and tenure is critical to the Board of Directors’ ability to work together effectively and efficiently as a group. Because term limits or mandatory retirement ages could cause the loss of experience or expertise important to the optimal operation of the Board of Directors, there are no limits on the length of time that a director may serve.

Our Board of Directors has undergone significant refreshment in the past several years to better align the Board of Directors’ composition and expertise with our status as a public company, to enhance the Board of Directors’ oversight capabilities with respect to our long-term strategy, and to increase the diversity of perspectives and experience represented on our Board of Directors. In 2020, we appointed Linda B. Segre and Bonnie C. Lind to the Board of Directors, and in 2021, we appointed Shaunte D. Mears-Watkins to our Board of Directors.

Set forth below is biographical information for each of our Class III director nominees and a summary of the specific qualifications, attributes, skills, and experiences which led our Board of Directors to conclude that such nominee should serve on the Board of Directors at this time. The Nominating and Corporate Governance Committee and the Board of Directors believe that each nominee brings a strong and diverse set of skills and experiences to the Company that strengthen our Board of Directors’ leadership and effectiveness with respect to our business and long-term strategy. If elected, the nominees for election as Class III directors will serve for a term of three years (and until their successors are elected and qualified) or, if earlier, until his or her earlier death, resignation, disqualification, or removal. There are no family relationships among any of our directors or among any of our directors and our executive officers.

Stephen J. Barnard founded the Company in 1983 and has served as the Chief Executive Officer since 1988. Mr. Barnard also served as the Company’s President from 1988 until July 2022. Mr. Barnard serves as a member of the Board of Directors, a role he has held since the Company was founded. Prior to founding Mission Produce, Mr. Barnard worked in the lettuce and avocado divisions of Santa Clara Produce, Inc. Mr. Barnard previously served as Chairman of the Produce Marketing Association (PMA), Chairman of the Western Growers Association, a director of the California Avocado Commission, and a director of Sunkist Growers. He currently serves as a director for the Cal Poly Foundation.

Mr. Barnard received a Bachelor of Science degree in agricultural business management from California Polytechnic State University, San Luis Obispo.

The Board of Directors concluded that Mr. Barnard should serve as a director based on his deep and thorough knowledge of all aspects of our business and industry, his effective leadership and management skills, and his long-tenured service in senior roles with key industry groups.

Bonnie C. Lind has served on our Board of Directors since September 2020. Ms. Lind is the retired Senior Vice President, CFO and Treasurer of Neenah, Inc., (NYSE: NP), a publicly traded technical specialties and fine paper company, a position she held from June 2004 to May 2020. Prior to that, Ms. Lind held a variety of increasingly senior financial and operations positions with Kimberly-Clark Corporation (NYSE: KMB), a manufacturer of personal care, consumer tissue and health care products, from 1982 until 2004. She has been a member of the Board of Directors of Hubbell Incorporated (NYSE: HUBB) since January 2019 where she is chair of the Audit Committee and a member of the Nominating and Corporate Governance Committee. Beginning in January 2022, she joined the Board of Directors of a private timberlands company, Tamarack Holdings LLC, where she is Chairman of the Audit Committee. She was previously a director at U.S. Silica Holdings, Inc. (NYSE: SLCA), a global industrial minerals and logistics leader, from 2019 to 2021 where she served on the Audit and Nominating and Corporate Governance Committees. She was also previously a director at Federal Signal Corporation (NYSE: FSS), a world leader in manufacturing lightbars, beacons, warning lights, and backup alarms/cameras, from 2014 to 2018, where she served on the Nominating and Governance Committee and the Audit Committee. She also served as a director of Empire District Electric Company (NYSE: EDE), an investor-owned utility providing electric, natural gas, and water service, from 2009 to 2017 and was a member of the Audit Committee and Chairman of its Nominating and Corporate Governance Committee.

Ms. Lind holds a Bachelor of Business Administration (Finance) with honors from the University of Georgia.

The Board of Directors concluded that Ms. Lind should serve as a director based on her experience as the chief financial officer of a public company, her financial acumen and financial expertise, her public and private company board experience, as well as her decades of senior financial and operations positions for public and private companies across a wide variety of industries.

Linda B. Segre has served on our Board of Directors since September 2020. She is a member of the Board of Directors of Top Golf Callaway Brands (NYSE: MODG) where she is chair of the Compensation and Management Succession Committee and a member of the Nominating and Corporate Governance Committee. She is also a member of the Board of Directors of Pecan Grove Farms & Nursery, a private provider of pecan products and Schwab Charitable Fund. From 2009 until 2016 she was the Executive Vice President, Chief Strategy and People Officer at Diamond Foods, Inc. (NASDAQ: DMND). Before joining Diamond Foods, Ms. Segre served as Managing Director of Google.org and was previously the Vice President and Managing Director of The Boston Consulting Group’s San Francisco Office.

Ms. Segre holds a degree in economics with academic distinction from Stanford University and an M.B.A. from the Stanford Graduate School of Business.

The Board of Directors concluded that Ms. Segre should serve as a director based on her public and private company board experience and extensive management experience serving in key leadership roles, including as chief people officer, across a variety of sectors, including the food and agriculture industries.

The biographical information for our six directors whose terms will continue after the 2023 Annual Meeting and will expire at the 2024 annual meeting (Class I) or the 2025 annual meeting (Class II) is below.

Stephen A. Beebe has served on our Board of Directors since 1995 and served as Chairman of our Board of Directors from 2003 until 2020. From 1993 until his retirement in 2002, Mr. Beebe served as the President and Chief Executive Officer of the J.R. Simplot Company, one of the largest privately held diversified agribusiness companies in the United States. He guided the J.R. Simplot Company through expansions in Canada, Mexico, Australia, China and Europe. Mr. Beebe continues to serve as a director for the J.R. Simplot Company, where he is a member of the Audit Committee. Mr. Beebe is also a co-manager of JRS Properties 111, which is a Simplot family partnership. He is a retired member of the executive committee of the United States Golf Association and chaired and was a member of their Audit Committee and Equipment Standards Committee.

Mr. Beebe received a Juris Doctorate from the University of Idaho, is a member of the Idaho Bar Association (retired) and is a graduate of the Stanford University Executive Program. In 2002, Mr. Beebe was awarded an Honorary Doctorate of Agriculture Science from the University of Idaho.

The Board of Directors concluded that Mr. Beebe should serve as a director based on his substantial business experience in the agriculture sector and his extensive management and leadership experience serving as a chief executive officer of a global agribusiness company.

Stephen W. Bershad has served on our Board of Directors since 2012 and has served as the Chairman of the Board of Directors since 2020. Mr. Bershad currently serves as the Chairman Emeritus of the Board of Directors of Novanta Inc. (NASDAQ: NOVT), a manufacturer of highly engineered proprietary components sold to medical and advanced technology equipment manufacturers. Previously, Mr. Bershad served as Chairman of the Board of Directors of Novanta Inc. from 2010 until 2020. Mr. Bershad served as Chairman and Chief Executive Officer of Axsys Technologies, Inc. (NASDAQ: AXYS), a manufacturer of surveillance and imaging equipment, from 1986 until 2009. Previously, he was a Managing Director of Lehman Brothers, Inc., an investment banking firm, and its predecessor firms, where he held a series of senior management positions in private equity and mergers and acquisitions. From 2013 to 2018, Mr. Bershad was Chairman of the Board of Directors of EMCOR Group (NYSE:EME), a Fortune 500 leader in mechanical and electrical construction, energy infrastructure and facilities services for a diverse range of businesses. Mr. Bershad also owns Rancho Guacamole, LLC, an avocado grower in the Southern California, and thus has extensive experience in the avocado and lemon industries.

Mr. Bershad received a Bachelor of Science degree from the University of Southern California and a Juris Doctorate from the University of California at Los Angeles.

The Board of Directors concluded that Mr. Bershad should serve as a director based on his substantial business, investment banking, and board and management experience with both public and private companies, including serving as Chairman of the board of directors of several public corporations.

Luis A. Gonzalez has served on our Board of Directors since 2011. Mr. Gonzalez is a private investor in real estate and other ventures. Previously, Mr. Gonzalez founded Austral Group S.A., Peru, which was the second largest fishing and marine based food producer in Peru. Mr. Gonzalez also founded Camposol S.A., a leading agroindustrial company in Peru. Mr. Gonzalez also co-founded Grupo Arato in 2011, which the Company acquired in 2018. Previously, Mr. Gonzalez also served as a director of our wholly-owned Peruvian subsidiaries – Grupo Arato Holding S.A.C., Beggie Peru S.A., Arato Peru S.A., Inversiones Agricolas Olmos S.A.C., and Avocado Packing Company S.A.C.– until November 24, 2021. In 2007, Mr. Gonzalez was honored with the “Comendador por Servicios Distinguidos” medal by the President of Peru for his contributions to the country.

Mr. Gonzalez studied mechanical engineering at Saarbrücken Fachhochschule in Germany.

The Board of Directors concluded that Mr. Gonzalez should serve as a director based on his extensive business and leadership experience in the avocado and agroindustrial industries and his first-hand knowledge of avocado farming and packing operations in Peru.

Shaunte D. Mears-Watkins has served on our Board of Directors since December 2021. Ms. Mears-Watkins is an independent advisor. Previously, she served as the Chief Commercial Officer of Clif Bar & Company, a leading maker of energy and nutrition foods, from June 2021 to May 2022. Previously, Ms. Mears-Watkins held senior roles of increasing responsibility in marketing, sales, and strategy at The Clorox Company (NYSE: CLX), a global manufacturer and marketer of household goods, food, pet care, and commercial cleaning products, from 2005 to 2008 and again from 2009 to 2021. From 2008 to 2009, Ms. Mears-Watkins was a Global Category Manager at Bare Escentuals Beauty, Inc., a retail cosmetics and personal care company. Ms. Mears-Watkins has served on the board of the Alameda County Community Food Bank since February 2022.

Ms. Mears-Watkins received a Bachelor of Arts degree from Stanford University and a Master of Business Administration degree from Harvard Business School.

The Board of Directors concluded that Ms. Mears-Watkins should serve as a director based on her broad commercial and marketing experience in the food and consumer products industries and her expertise in global branding and strategy.

Jay A. Pack has served on our Board of Directors since 2008. Mr. Pack is the former owner of Standard Fruit and Vegetable, an integrated re-packer, logistics, and value-added produce company, which was sold to Del Monte in 2003. He served on the board of Coastal Sunbelt Produce, a private foodservice distributor serving the Mid-Atlantic states, from 2014 to March 2022 when Coastal Sunbelt was acquired by Sysco. Previously, Mr. Pack served on the boards of Misionero and Earthbound Farm and Combs Produce. He has also previously served as a trustee of Sarah Lawrence College, a board member of the Produce Marketing Association (PMA), Chairman of the PMA Foodservice Division, and as President of the North Texas Food Bank.

Mr. Pack received a Bachelor of Science degree from Boston University and a Master of Business Administration degree from Southern Methodist University.

The Board of Directors concluded that Mr. Pack should serve as a director based on his broad knowledge of the produce industry and his extensive business and leadership experience with various produce companies and agricultural industry groups.

Bruce C. Taylor has served on our Board of Directors since 2001. Mr. Taylor founded Taylor Fresh Foods, a private multi-billion dollar producer of salads, fresh vegetables, and healthy fresh food, in 1995 and serves as its Chairman and Chief Executive Officer.

Mr. Taylor received a Bachelor of Science degree (Business) and a Bachelor of Arts degree (Development Studies) from the University of California Berkeley and a Master’s in Business Administration from Harvard University.

The Board of Directors concluded that Mr. Taylor should serve as a director based on his extensive business and industry knowledge and his long tenured leadership and management experience in the agriculture and farming sectors at Taylor Fresh Foods.

Our Board of Directors recognizes that one of its key responsibilities is to evaluate and determine the optimal leadership structure for the sound and effective oversight of management. Our Bylaws and Corporate Governance Guidelines provide our Board of Directors with flexibility to combine or separate the positions of Chairman of the Board of Directors and Chief Executive Officer. The Board of Directors values its flexibility to select, from time to time, a leadership structure that is most able to serve the Company’s and stockholders’ best interests based on the qualifications of individuals available and existing circumstances.

Currently, the Board of Directors has determined that separating the roles of Chairman and Chief Executive Officer is the most effective leadership structure. Mr. Barnard serves as Chief Executive Officer, and Mr. Bershad serves as Chairman of the Board of Directors. Our Board of Directors believes that this leadership structure provides the appropriate balance of authority and achieves the optimal governance model at this time.

If the Chairman of the Board of Directors does not otherwise qualify as an independent director, our Corporate Governance Guidelines allow for the appointment of a lead independent director. As noted above, Mr. Bershad is not an independent director under applicable SEC and Nasdaq rules. Therefore, the Board of Directors has elected Stephen A. Beebe to serve as the lead independent director. The lead independent director’s responsibilities include but are not limited to: presiding over all meetings of the Board of Directors at which the Chairman is not present, including any executive sessions of the independent directors, and acting as the liaison between the independent directors and the Chief Executive Officer and Chairman of the Board of Directors.

Our Board of Directors oversees an enterprise-wide approach to risk management. Our risk management efforts are designed to support execution of our long-term strategy and achievement of the Company’s objectives to improve long-term operational and financial performance and enhance stockholder value. Our Board of Directors believes that a fundamental part of risk management is understanding the risks that we face, adopting appropriate controls and mitigation activities for such risks, monitoring these risks, and responding to emerging developments for such risks. As such, in 2022, we developed an Enterprise Risk Management, or ERM, framework to enhance our risk management efforts. Our ERM framework is primarily focused on identifying, assessing, managing, reporting, and monitoring enterprise-level risks that may impact the ability of the Company to achieve its long-term goals and objectives.

Bi-annually, we evaluate the greatest risks to our business, their underlying risk drivers, and the associated mitigation activities, maturity, and controls. Our ERM framework taps into the knowledge, assessment, and feedback of a cross-functional group of the Company’s business leaders representing all key business functions across all our U.S. and international operations. Our bi-annual assessment includes identification and evaluation of the likelihood and potential impact of the top risks facing the Company and the controls in place or needed to mitigate such risks.

Our Audit Committee oversees our overall ERM framework. The Audit Committee receives a bi-annual review of the ERM framework and key enterprise-level risks. In addition, annual updates to the full Board of Directors are provided and results are discussed. Our three standing Board of Directors committees also assist the Board of Directors in fulfilling its oversight responsibilities in certain areas of risk. The Audit Committee coordinates the Board of Directors’ oversight of our internal control over financial reporting, disclosure controls and procedures, related party transactions, code of conduct, and litigation and compliance matters. Management regularly reports to the Audit Committee on these areas. The Compensation Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The Nominating and Corporate Governance Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, and succession planning for our directors and executive officers. At each regular meeting, or more frequently as needed, the Board of Directors receives and considers committee reports, which may provide additional detail on risk management issues and management’s response.

Our Board of Directors considers cybersecurity risk to be an important potential risk to our business. The Board of Directors has delegated to the Audit Committee oversight of cybersecurity and other information technology risks affecting the Company. The Audit Committee periodically evaluates our cybersecurity strategy to ensure its effectiveness. Management provides regular reports to the Audit Committee and the Board of Directors regarding cybersecurity and other information technology risks.

Our Chief Information Officer oversees our information security program. His teams are responsible for leading enterprise-wide cyber resilience strategy, policy, standards, architecture, and processes. We devote significant resources to protecting and continuing to improve the security of our computer systems, software, networks, and other technology assets. Our security efforts are designed to preserve the confidentiality, integrity, and continued availability of all information owned by, or in the care of, the Company and protect against, among other things, cybersecurity attacks by unauthorized parties attempting to obtain access to confidential information, destroy data, disrupt or degrade service, sabotage systems, or cause other damage.

We identify and address information security risks by employing a defense-in-depth methodology that provides multiple, redundant defensive measures and prescribes actions to take in case a security control fails or a vulnerability is exploited. We leverage internal resources, along with strategic external partnerships, to mitigate cybersecurity threats to the Company. We have partnerships for Security Operations Center (SOC) services, and various third-party assessments. We deploy both commercially available solutions and proprietary systems to manage threats to our information technology environment actively.

Certain of our information technology applications are externally audited as part of our Sarbanes-Oxley audit program and our controls include information security standards. We follow industry best practices and the National Institute of Standards and Technology (NIST) Cyber Security Framework. We regularly engage appropriate external resources regarding emerging threats to navigate the diverse cybersecurity landscape.

In addition to ensuring adequate safeguards are in place to minimize the chance of a successful cyber-attack, the Company has established well-defined response procedures to effectively address cyber events that may occur despite these robust safeguards. These response procedures are designed to identify, analyze, contain, and remediate such cyber incidents to ensure a timely, consistent, and compliant response to actual or attempted data incidents impacting the Company. The Company devotes appropriate resources and enlists partners to adapt to the evolving threat landscape.

The Company takes data protection seriously and ensures employees understand their role in keeping the Company safe from cyber-attacks. We employ a robust information security and training program for our employees, including mandatory computer-based training, regular internal communications, and ongoing end-user testing to measure the effectiveness of our information security program. As part of this commitment, we require our employees to complete a Cybersecurity Awareness eCourse and acknowledge our Information Security policies. In addition, we have an established schedule and process for regular phishing awareness campaigns that are designed to emulate real-world contemporary threats and provide immediate feedback (and, if necessary, additional training or remedial action) to employees.

We have experienced no material information security breaches in the last three years. As such, we have not spent any material amount of capital on addressing information security breaches in the last three years, nor have we incurred any material expenses from penalties and settlements related to a material breach during this same time. We also carry third-party cybersecurity insurance.

Our Board of Directors is governed by our Corporate Governance Guidelines which are reviewed annually and amended from time to time to incorporate certain current best practices or as otherwise may be advisable. Our Corporate Governance Guidelines may be found on our website at www.missionproduce.com and are available in print upon written request to the Company’s Secretary at our principal executive offices at 2710 Camino Del Sol, Oxnard, California 93030.

We have adopted a written code of ethics and conduct that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our Board of Directors reviews the Code of Ethics and Conduct on an annual basis and makes changes if and when appropriate. We have posted the Code of Ethics and Conduct on our website, www.missionproduce.com. In addition, we will post on our website all disclosures that are required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of the codes.

The Board of Directors held five meetings in fiscal year 2022, and all directors attended at least 75% of the total number of meetings of the Board of Directors and committees on which they served. It is the Company’s policy that all current directors attend our annual meetings of stockholders barring unforeseen circumstances or irresolvable conflicts. Seven out of our nine directors serving on the Board of Directors as of the 2022 Annual Meeting were present; the remaining directors were unable to attend due to extenuating circumstances.

Our annual meeting of stockholders provides an opportunity each year for stockholders to ask questions of our Chairman of the Board and Chief Executive Officer, who is also a member of the Board of Directors. In addition, stockholders may communicate in writing with any particular director, any committee of the Board of Directors, or the directors as a group, by sending such written communication to our Secretary at our principal executive offices at 2710 Camino Del Sol, Oxnard, California 93030. Copies of written communications received at such address will be provided to the Board of Directors or the relevant director or committee unless such communications are considered, in the reasonable judgment of our Secretary, to be inappropriate for submission to the intended recipient(s). Examples of stockholder communications that would be considered inappropriate for submission to the Board of Directors, relevant director, or committee include, without limitation, customer complaints, solicitations, communications that do not relate to our business, or communications that relate to improper or irrelevant topics.

The Board of Directors has three standing committees – the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. Each committee maintains a charter that is approved by the Board of Directors and evaluated annually. The charter for each of our standing committees is available on our website at www.missionproduce.com.

Our Audit Committee oversees the accounting and financial reporting process of the Company and the audits of the Company’s financial statements. Among other matters, the Audit Committee:

The current members of our Audit Committee are Ms. Lind (Chair), Mr. Beebe, and Mr. Pack. All members of our Audit Committee meet the heightened standards of independence required for service on the Audit Committee and satisfy the financial literacy and sophistication requirements under applicable Nasdaq rules and regulations. Ms. Lind is an Audit Committee financial expert as defined under applicable SEC rules. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq.

The Audit Committee met four times during fiscal year 2022.

Our Compensation Committee oversees matters pertaining to the compensation of the Company’s executive officers and directors. Among other matters, the Compensation Committee:

The Compensation Committee engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent third party compensation consultant in 2022 to advise on a variety of subjects, including peer group composition and benchmarking, executive compensation philosophy and strategy, incentive plan and equity plan design, director compensation program design, overall compensation plan design and trends, pay-for-performance analytics, and other compensation topics. During fiscal year 2022, Pearl Meyer did not provide any services other than compensation-related matters for our executives and the Board of Directors. Pearl Meyer reported directly to the Compensation Committee and attended meetings of the Compensation Committee (including meeting in executive session with the Compensation Committee), as requested. Each year the Compensation Committee reviews the independence of Pearl Meyer, including considering the factors required by Nasdaq listing standards. During its fiscal 2022 review, the Compensation Committee determined that Pearl Meyer is independent and that no conflict of interest exists that would prevent it from providing independent and objective advice to the Compensation Committee.

The current members of our Compensation Committee are Ms. Segre (Chair), Mr. Beebe, and Mr. Pack. Each of the members of our Compensation Committee is independent under the applicable rules and regulations of Nasdaq and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The Compensation Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq.

The Compensation Committee met four times during fiscal year 2022.

The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become directors, recommending director nominees for election at the annual meeting of stockholders, overseeing the corporate governance of the Company and the Board of Directors, overseeing executive succession planning, and overseeing environmental, social, and governance matters. Among other matters, the Nominating and Corporate Governance Committee:

The Nominating and Corporate Governance Committee considers a wide range of factors when assessing potential director nominees. This assessment includes a review of the potential nominee’s experience and expertise, diversity, independence, understanding of the Company’s business or industry, and such other factors as the Nominating and Corporate Governance Committee concludes are pertinent in light of the current and anticipated future needs of the Board of Directors. Specifically, the Nominating and Corporate Governance Committee, in recommending director candidates, and the Board of Directors, in nominating or appointing director candidates, evaluates candidates in accordance with the following qualification standards and selection criteria:

The Nominating and Corporate Governance Committee and the Board of Directors also considers the diversity of director candidates, which is defined broadly to include experience, background and other factors including gender, age, race, and other characteristics. In addition, the Nominating and Corporate Governance Committee considers whether there are potential conflicts with the candidate’s other personal and professional pursuits.

From time to time, the Board of Directors or the Nominating and Corporate Governance Committee may find it helpful to utilize a third-party search firm to assist in identifying a qualified director candidate pool for consideration.

The Nominating and Governance Committee will consider stockholder recommendations of candidates on the same basis, and under the same criteria, as it considers all other candidates. Stockholders wishing to nominate a candidate for director at an annual meeting must (a) provide Timely Notice (as defined in Section 2.4(b) of the Company’s Bylaws) to the Corporate Secretary at 2710 Camino Del Sol, Oxnard, CA 93030, (b) provide the information, agreements and questionnaires with respect to such stockholder and its candidate for nomination as required in the Company’s Bylaws and under SEC rules concerning nominees, and (c) provide any updates or supplements to such notice at the times and in the forms required by, and otherwise comply with, our Bylaws.

The current members of our Nominating and Corporate Governance Committee are Mr. Beebe (Chair), Ms. Lind, and Mr. Taylor. Each member of the Nominating and Corporate Governance Committee is an independent director under applicable Nasdaq regulations. The Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq.

The Nominating and Corporate Governance Committee met three times during fiscal year 2022.

The Board of Directors recognizes that a robust and constructive evaluation process is an essential component of good corporate governance and board effectiveness. Under the leadership of the Chairman of the Board of Directors, the Nominating and Corporate Governance Committee oversees the annual evaluation process. The Nominating and Corporate Governance Committee periodically reviews the format and components of the evaluation process to ensure that actionable feedback is solicited on the operation and effectiveness of the Board of Directors, its committees, and director performance.

The Board of Directors believes that director education is important to the ability of directors to fulfill their roles and supports directors in their continuous learning. During Board of Directors and committee meetings, information sessions may also be provided on specific subjects relevant to our business or certain pertinent topics. New directors also participate in our director orientation program.

In March 2022, following its biennial review of the Non-Employee Director Compensation Policy, and after consultation with the Compensation Committee’s independent compensation consultant, the Compensation Committee recommended, and the Board of Directors adopted, certain changes to our Non-Employee Director Compensation Policy to be effective for fiscal 2022. Such changes included (1) eliminating the initial equity award of $50,000 RSUs made to non-employee directors upon appointment to the Board of Directors and replacing such award with an annual equity award of $100,000 RSUs, pro-rated based on the number of days between the effective date of appointment and the Company’s next annual meeting of

stockholders; and (2) providing for a Chairman of the Board of Directors annual equity award grant of $40,000 RSUs in order to recognize the significant additional time and attention to Company matters required of the Chairman. Our Non-Employee Director Compensation Policy consists of the following components:

Annual cash retainers are paid in quarterly installments in arrears and pro-rated for any partial calendar quarter of service. In accordance with the Non-Employee Director Compensation Policy, each non-employee director who is initially elected or appointed to serve on the Board of Directors is automatically granted RSUs with a value of approximately $100,000 on the date on which such director is appointed or elected to serve on the Board of Directors, pro-rated based on the number of days between the effective date of appointment and the Company’s next annual meeting. Additionally, each non-employee director who is serving on the Board of Directors as of the date of each annual meeting of the stockholders is automatically granted, on such annual meeting date, an RSU award with a value of approximately $100,000, and a non-employee director serving as the Chairman of the Board of Directors is automatically granted additional RSUs with a value of $40,000 on such date.

All equity grants vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date and (ii) the date of the next annual meeting following the grant date, subject to the directors’ continued service through the applicable vesting date. In addition, such awards vest in full upon a change in control of the Company (as defined in the Company’s 2020 Incentive Award Plan).

Pursuant to the Company’s Deferred Compensation Plan applicable to non-employee directors, our non-employee directors can elect to defer up to 100% of their annual equity award grant. Annual equity awards that are deferred are credited to a deferred compensation account and vested balances are distributed: (1) at the time of separation either in a lump sum or up to 10 annual installments; (2) pursuant to an in-service election on specified dates of distribution either in a lump sum or up to five annual installments; (3) upon a separation from service due to a change in control either in a lump sum or up to 10 annual installments; and (4) upon death in a lump sum to the director’s beneficiaries.

The unfunded, nonqualified plan structure of the Deferred Compensation Plan is required in order to preserve the beneficial tax deferral treatment for the participants. Amounts in a participant’s deferral accounts are considered general liabilities of the Company and subject to creditor risk in the case of corporate insolvency or bankruptcy.

Messrs. Beebe and Bershad and Ms. Lind participated in the Deferred Compensation Plan during 2022.

The Compensation Committee has adopted robust stock ownership guidelines for non-employee directors equal to five times their annual cash retainer, or, $300,000. Non-employee directors are expected to achieve the required guidelines within 5 years of the later of the adoption of the guidelines or the director’s appointment to the Board of Directors. After achievement, directors must continue to hold enough shares to maintain such levels while covered by the guidelines. In September 2022, the Compensation Committee approved an amendment to the stock ownership guidelines to remove vested stock options from counting towards achievement of the required threshold holdings. As such, the following forms of equity count towards the required stock ownership guidelines:

The value of ownership is measured by reference to the average closing stock price of the Company’s common stock over the prior full year from the date of measurement. The Compensation Committee assesses compliance annually as of the fiscal year-end date. Failure to meet or show progress toward meeting the guidelines may result in (1) restrictions on sales of stock acquired upon vesting of equity awards until such guidelines are met; and/or (2) reductions in future long term equity incentive awards or other equity grants. The Compensation Committee has the sole discretion to determine the appropriate remedy for failure to comply with the guidelines, taking into consideration all pertinent facts and circumstances.

All non-employee directors exceeded the required level of holdings at the time of measurement except for Ms. Mears-Watkins who is on track to meet the requirement within the allotted period of time.

The following table sets forth information for the fiscal year ended October 31, 2022 regarding the compensation awarded to, earned by or paid to our non-employee directors who served on our Board of Directors during fiscal year 2022. Mr. Barnard, who serves as our Chief Executive Officer does not receive additional compensation for his service as a director. All compensation paid to Mr. Barnard is reported in the “Summary Compensation Table.”

The Company’s executive officers as of the record date are:

This Compensation Discussion and Analysis provides a detailed description of our executive compensation philosophy and programs, the compensation decisions the Compensation Committee has made under those programs, and the factors considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our NEOs, who for fiscal 2022 were:

Our business experienced a number of operational challenges early on in the fiscal year with our transition to a new ERP system. While our operations largely recovered from these setbacks beginning with the second quarter, our financial results continued to be impacted by significant cost inflation, limited supply of fruit out of Mexico, our largest sourcing region, as well as sub-optimal sizing of our owned Peruvian fruit. As a result, we fell short on several financial performance metrics, including adjusted operating income which drives our annual cash incentive plan.

While the business faced some headwinds and challenges, we nevertheless achieved several key successes and milestones. We generated $1 billion of revenue (a 17% increase compared to prior year) for the first time in our Company’s nearly 40-year history. Additionally, we made significant inroads with Peruvian programs on our owned production and converted several large retailers to Peruvian product for the first time. We continued to demonstrate the value of our vertically integrated global sourcing network and delivered for our customers amidst an industry environment plagued with short supply and high pricing. Importantly, we also continued to make investments in expanding our global footprint, a critical element of our long-term growth strategy, with the development of a new distribution center in the United Kingdom.

The following summarizes the key elements of total direct compensation for fiscal 2022 for our NEOs: base salary, annual cash incentive, and long-term equity incentives.

After reviewing market data and benchmarking provided by Pearl Meyer, the Compensation Committee increased base salaries for fiscal 2022 to move closer to market competitive rates, with our Chief Financial Officer receiving a 12.5% increase, our Director of South American Operations receiving a 2.4% increase, and our General Counsel and Secretary receiving a 11.4% increase. Our Chief Executive Officer received a modest 3.3% increase, in line with the annual cost of living increase for all employees.

Mr. Wiesner also receives additional annual cash compensation based on a profit-sharing scheme required under Peruvian labor regulations. Such additional compensation is based on the application of a certain percentage applied to gross profits and distributed to Peruvian employees based on their respective compensation and days worked. The amount paid to Mr. Wiesner under such profit-sharing scheme for fiscal 2022 was $18,376.

Annual cash incentive awards are designed to reward annual performance of objective goals tied to our budget and individual contributions that support business results and execution of the Company’s strategy. Awards for our NEOs, other than Mr. Wiesner, are determined based on our annual cash incentive plan, with payouts determined based on a formulaic approach of company achievement against a predetermined financial measure and may be adjusted based on each NEO’s individual performance.

The 2022 annual cash incentive plan utilized adjusted operating income as the metric for determination of annual cash incentive payouts. Adjusted operating income has been used historically by the Company as a key performance indicator and is well understood by the Company’s stockholders, investment community, and employees. Operating income is also a prevalent metric in short-term incentive plans among the Company’s peers and the broader market.

For 2022, target bonus opportunity under the annual cash incentive plan ranged from 100% of base salary for our Chief Executive Officer to 75% of base salary for our other participating NEOs, with potential payouts that ranged from 50% for threshold performance to 200% for maximum performance on our adjusted operating income goal. These amounts remained unchanged from prior years.

For 2022, the Company achieved 22% of the target adjusted operating income goal, resulting in a payout percentage of 0% of target bonus opportunity. Due to the operational failures associated with our ERP conversion, the challenges associated with sub-optimal fruit sizing on our owned Peruvian production, limited fruit supply out of Mexico, and persistent cost inflation, no payouts were made to our NEOs under our annual cash incentive plan, except for a guaranteed payout to our newly hired President and Chief Operating Officer, consistent with his offer letter. The 0% payout under our annual cash incentive plan reinforces our commitment to a pay-for-performance philosophy.

Mr. Wiesner does not participate in our annual cash incentive plan; instead, he is eligible for a discretionary bonus based on the Chief Executive Officer’s assessment of Mr. Wiesner’s performance. Given the challenges with sizing of fruit out of the Company’s owned farms in Peru, along with the overall performance of the Company and internal pay-equity considerations, our Chief Executive Officer and Mr. Wiesner concurred that Mr. Wiesner would not receive a bonus payout for fiscal 2022.

Mr. Bulow joined the Company in July 2022. Per the terms of Mr. Bulow’s offer letter dated April 22, 2022, he was guaranteed a minimum payout of 50% of his target bonus opportunity, pro-rated based on the amount of time between his start date and October 31, 2022. As such, Mr. Bulow’s payout totaled $54,170.

After extensive review and discussions, during the first quarter of 2022, the Compensation Committee approved a new long-term equity incentive program for fiscal 2022. In order to: (1) better tie our compensation to our long-term growth strategy; (2) align our executive’s interests to the interests of our stockholders; and (3) emphasize our pay-for-performance philosophy, the Compensation Committee introduced PSUs to the annual long-term equity mix. In addition, to ensure retention value and tie a meaningful portion of our NEOs’ pay packages to stock price performance, the Compensation Committee also introduced RSUs to the equity mix. Prior to our IPO, we only granted stock options, and no equity awards were granted in fiscal 2021 (in part due to the Compensation Committee’s deliberations regarding the implementation of an appropriate long-term incentive program for a public company). For fiscal 2022, the inaugural year of this program, the Compensation Committee determined to assign 70% of the award value to RSUs and 30% to PSUs. The percentage of PSUs comprising total annual equity long-term value increased to 40% in fiscal 2023 and is expected to increase to 50% in fiscal 2024.

The 2022-2024 PSUs are earned based on achievement of pre-established cumulative adjusted net income per share goals over the three-year performance period running from November 1, 2021 – October 31, 2024, as illustrated in the following table. The number of shares that may be earned and paid ranges from 50% of target PSUs granted for threshold performance of 70% of the target performance goal, 100% for achieving the target performance goal, and 200% for achieving the maximum performance of 130% of the target performance goal; no amounts are earned for performance below threshold level.

RSUs under the long-term equity incentive program vest ratably over three years, subject to continued service through the vesting date.

The Company has robust stock ownership guidelines requiring our Chief Executive Officer to hold 5x, our President and Chief Operating Officer and our Chief Financial Officer 3x, and our other NEOs 1x, their respective base salary within 5 years. Failure to meet or show progress toward meeting the guidelines may result in (1) restrictions on sales of stock acquired upon vesting of equity awards; and/or (2) reductions in future long term equity incentive awards or other equity grants, at the discretion of the Compensation Committee. In fiscal 2022, consistent with best practices, the Compensation Committee determined that vested unexercised stock options would no longer count toward the ownership guidelines. Only shares of common stock directly or indirectly owned and unvested RSUs subject to time-based vesting are counted towards satisfaction of the holding requirements.

In the first quarter of fiscal 2022, the Compensation Committee adopted a Clawback Policy that permits the recoupment of certain executive incentive compensation in the event the Company’s financial statements are restated or corrected due to material noncompliance with financial reporting requirements under the federal securities laws, or if the Board of Directors reasonably determines a material misstatement has occurred.

We do not have any employment agreements with our executive officers. We also do not have any formalized severance or change in control cash compensation arrangements with our NEOs. We do not provide for single or double trigger equity award acceleration for our RSUs. Our PSUs provided limited assumed target performance in the event of death and disability (pro-rated for time served), and in the event of a change in control in which the award is not assumed or replaced.

In 2021, our Compensation Committee performed, with the assistance of its compensation consultant, Pearl Meyer, an extensive review of the Company’s compensation philosophy and objectives and implemented new programs that are consistent with such objectives and compensation best practices. In fiscal 2022, the Compensation Committee reviewed the compensation philosophy and objectives set in 2021 and affirmed that the existing compensation philosophy continued to be appropriate for the Company.

The Compensation Committee is committed to creating a competitive compensation program that supports the Company’s mission and values and facilitates successful execution of our business goals. We believe our compensation program should support and reinforce our goals for growth, financial performance, and leadership development while aligning the interests of our executives and stockholders. The three key pillars of our compensation philosophy are:

 

Our compensation philosophy is intended to guide the decisions that the Compensation Committee makes each year regarding executive officer compensation. The Compensation Committee operationalizes its compensation philosophy in the following ways:

The Compensation Committee evaluates the following components when making determinations regarding executive officer compensation:

The Compensation Committee’s independent compensation consultant, Pearl Meyer, conducted a risk assessment in 2022 regarding the Company’s compensation policies and practices as they apply to all employees, including the NEOs. Pearl Meyer reviewed the design features and performance metrics of the Company’s cash and stock-based incentive programs along with the approval mechanisms associated with each and based, in part, on this risk assessment we believe that the Company’s policies and practices are unlikely to create risks that are reasonably likely to have a material adverse effect on the Company.

In addition, the following actions, practices, and policies are intended to provide for continued alignment with our Compensation Philosophy and/or reduce the likelihood of excessive compensation-related risk-taking:

Market data, including information for peer group companies and from compensation surveys, is part of the diverse toolkit the Compensation Committee uses to set fair and competitive compensation levels that help drive the creation of long-term value while mitigating undue risk-taking. The Compensation Committee uses market compensation information to understand how other comparable public companies design executive compensation to assist the Company in offering competitive compensation levels to attract and retain exceptional executives.

The Compensation Committee annually reviews the composition of our peer group to ensure that each company’s relevant attributes remain comparable to ours. The Compensation Committee believes it is appropriate to focus on companies with similar characteristics based on total revenues, market capitalization, and industry (by primary GICS classification). These are representative companies that face many of the same strategic and operational considerations we do and against whom we compete for executive talent.

The Compensation Committee approved the following companies as our fiscal 2021 peer group to review and inform our fiscal 2022 compensation decisions. Dole plc, Sovos Brands, Inc. and Tootsie Roll Industries, Inc were added to the peer group for fiscal 2023:

The following table illustrates the market capitalization and revenue statistics for the peer group and the Company’s relative position across these metrics as reviewed by the Compensation Committee in connection with fiscal 2022 compensation decisions.

In March 2022, the Compensation Committee commenced its review of the peer group, and in June 2022, the Compensation Committee determined to add Dole plc, Sovos Brands, Inc., and Tootsie Roll Industries, Inc. to the peer group given their business comparability and relative financial size. The following table illustrates market capitalization and revenue statistics for the current peer group, including the additions made in 2022 for 2023 compensation decisions, and the Company’s relative position across these metrics as of June 2022.

In accordance with its charter, the Compensation Committee determines and approves the compensation of our Chief Executive Officer and other NEOs. Annually, the Compensation Committee conducts a comprehensive 360 degree review of the Chief Executive Officer’s performance within the context of the financial and operational goals of the Company and the Chief Executive Officer’s leadership effectiveness in driving the organization forward.

The Compensation Committee reviews the Company’s executive compensation plans throughout the fiscal year. Decisions concerning annual salary increases, the approval of annual cash incentives, the design and objectives of each year’s cash and equity incentive plans and the granting of long-term incentive awards are typically made in the first quarter of each fiscal year after a series of meetings among the Compensation Committee, its compensation consultant, the Chief Executive Officer and other members of the executive team as necessary. The Compensation Committee considers the feedback of the Chief Executive Officer regarding other NEOs’ performance. The Compensation Committee performs this analysis on an annual basis as part of its oversight function with respect to executive compensation.

In addition, the Compensation Committee periodically reviews and makes recommendations to the Board of Directors regarding director compensation.

The Compensation Committee has the sole authority to engage and terminate any compensation consultant to assist in the evaluation of director or executive compensation and has the sole authority to approve the fees and other terms of retention of such compensation consultants.

The Compensation Committee has engaged Pearl Meyer since 2021 to advise on a variety of subjects, which for fiscal 2022 included peer group composition and benchmarking, executive compensation philosophy and strategy, incentive plan and equity plan design, overall compensation plan design and trends, pay-for-performance analytics, director compensation, and other compensation topics. While Pearl Meyer provided data and analyses and made recommendations for the compensation program, the Compensation Committee, or the Board of Directors, made all decisions regarding the compensation of the NEOs and our directors.

Base salary is fixed cash compensation delivered in return for day-to-day job responsibilities and service in key leadership roles. Base salary provides competitive levels of fixed compensation determined by the market value of the position, and the qualifications, experience, and performance expectations of each NEO for his/her position. Market-competitive base salaries help attract and retain executive talent. The Compensation Committee annually reviews the base salary of our NEOs and makes adjustments when appropriate based on an assessment of the role, performance, and market competitiveness. The Compensation Committee may also make periodic adjustments in connection with promotions or changes in responsibility.

In the first quarter of fiscal 2022, our Compensation Committee approved increases to base salaries, in part, to better align certain of our NEOs with the market median of our peer group and compensation survey data. In doing so, the Compensation Committee considered data provided by Pearl Meyer indicating that our NEOs’ base salaries were well below market median, and in some instances, near or below the 25^th percentile of market. Our Chief Financial Officer received a 12.5% increase, our Director of South American Operations received a 2.4% increase, and our General Counsel and Secretary received a 11.4% increase. Our Chief Executive Officer received a modest 3.3% increase, in line with the annual cost of living increase for all employees. The Compensation Committee, in setting Mr. Wiesner’s base salary, also takes into account the additional annual cash compensation he receives based on a profit-sharing scheme required under Peruvian labor regulations. Such additional compensation is based on the application of a certain percentage applied to the gross profits and distributed to Peruvian employees based on their respective compensation and days worked. The amount paid to Mr. Wiesner under such profit-sharing scheme for 2022 was $18,376 and is not included in the base salary table below.

In determining Mr. Bulow’s annual base salary at the time of his appointment in July 2022, the Compensation Committee considered market data for Chief Operating Officers and also took into consideration the additional responsibilities for the President role.

The table below sets forth the base salaries of our NEOs and reflects the 2022 adjustments that were made to better align with the competitive market.

In December 2021, the Compensation Committee approved the 2022 annual cash incentive plan, including threshold, target, and maximum performance ranges, adjusted operating income goals, and bonus pool payout percentages, on substantially similar terms (other than target goals) as in fiscal 2021.

There were no changes to target bonus opportunities in fiscal 2022. Each NEO’s target bonus percentage for 2022 was set as follows: Mr. Barnard – 100% of base salary, Mr. Giles – 75% of base salary, and Ms. Wu – 75% of base salary. Upon Mr. Bulow’s hire, the Compensation Committee set his target bonus percentage at 75% of base salary in alignment with the other NEOs, excluding the CEO. In each case, the percentage of base salary is based on such NEO’s base salary as of the last day of the fiscal year. Mr. Wiesner does not participate in the annual cash incentive plan.

Threshold performance under the annual cash incentive plan was set at 70% of target such that any achievement on adjusted operating income goals below that amount would result in a zero payout. Conversely, maximum payouts were capped at 200% corresponding to achievement at 130% or more of the target adjusted operating income goal. The following sets forth the goals, operation of the annual cash incentive plan, and the actual performance achievement and payout percentage for fiscal 2022. Linear interpolation is utilized between the levels of achievement.

Individual payouts are then subject to adjustment based on the Compensation Committee’s review of the Chief Executive Officer’s assessment of each NEO’s contributions and performance. No payouts were modified by the Compensation Committee for fiscal 2022.

The operating income goal for 2022 was set by the Compensation Committee at the commencement of the performance period and aligned with internal budgeted adjusted operating income. The Compensation Committee believed that adjusted operating income goals were set at an appropriately rigorous level to account for anticipated growth while taking into consideration the uncertainties concerning inflationary pressures and supply chain issues that were envisioned at the time the goals were set.

In calculating adjusted operating income, the Compensation Committee made certain adjustments, consistent with plan parameters, as shown in the table below, to eliminate the impact of certain non-recurring items such as costs associated with ERP development, stock compensation expense, non-productive farming leases, M&A transaction costs, and other one-time adjustments in our Marketing and Distribution and International Farming segments regarding asset disposals:

For 2022, the Company achieved 22% of the target adjusted operating income goal, resulting in a payout percentage of 0%. No discretion or adjustments were made to the payouts to our NEOs under the annual cash incentive plan. As such, our NEOs did not receive an annual cash incentive award (other than Mr. Bulow’s minimum guaranteed payout that was negotiated in connection with his hiring), thereby reinforcing our strong commitment to a pay-for-performance philosophy.

Mr. Wiesner is based in Peru and oversees our South and Central American operations, which includes our international farming and blueberries segments. Mr. Wiesner does not participate in our annual cash incentive plan; instead, he is eligible for a discretionary bonus based on the Chief Executive Officer’s assessment of Mr. Wiesner’s performance. Given the challenges with sizing of fruit out of the Company’s owned farms in Peru, along with the overall performance of the Company and internal pay-equity considerations, our Chief Executive Officer and Mr. Wiesner concurred that Mr. Wiesner would not receive a bonus payout for fiscal 2022.

In order to attract and induce Mr. Bulow to join the Company, the Compensation Committee approved a new hire cash bonus of $350,000 for Mr. Bulow. In the event Mr. Bulow terminates employment, or the Company terminates Mr. Bulow’s employment for cause, during the three years succeeding his July 12, 2022 hire date, Mr. Bulow must repay the bonus on a pro-rated basis based on the length of time between his departure and three years from his hire date.

The Company grants long-term incentive equity compensation to reward performance over the longer term and to align the interests of key employees with stockholders. Prior to our IPO in October 2020, we only granted stock options.

In the first quarter of 2022, after extensive review and discussion, the Compensation Committee approved a long-term equity incentive program comprised of a mix of three-year performance-based PSUs and time-vesting RSUs in order to encourage long-term performance-based value creation and to facilitate retention.

For fiscal 2022, the inaugural year, the Compensation Committee assigned 70% of the award value to RSUs and 30% to PSUs. The Compensation Committee has transitioned the mix to be more heavily based on PSUs, with 60% RSUs and 40% PSUs for fiscal 2023, and expects to implement a 50/50 split between RSUs and PSUs for fiscal 2024 and beyond. The 2022 PSUs are earned based on achievement of pre-established cumulative adjusted net income per share goals at threshold, target, and maximum over the three-year performance period commencing November 1, 2021 through October 31, 2024. Payout levels range from 50% to 200%, with 50% of PSUs earned for performance at threshold (70% of target), 100% PSUs earned for performance at target, and 200% PSUs earned for performance at maximum (130% of target). No PSUs are earned for performance below threshold levels. RSUs under the long-term equity incentive program vest ratably over three years following the date of grant, subject to continued employment with us through the vesting dates.

The Compensation Committee determined that cumulative adjusted net income was an appropriate metric because it incentivizes performance over a multi-year period, and adjusted net income is utilized in the Company’s financial modeling and disclosed to stockholders as part of our quarterly and year-end results. In setting the adjusted net income per share goals for fiscal 2022, the Compensation Committee considered a number of factors, including the Company’s financial forecasts and existing market and competitive conditions. Based on these factors, the Compensation Committee determined that the targets set would be appropriately challenging for the Company to achieve and would result in delivery of meaningful stockholder value.

All outstanding PSUs are forfeited upon an executive’s voluntarily termination or termination for cause. In the event of:

(i) death or disability, the number of PSUs earned is based on target performance and are pro-rated based on the number of months of service during each performance period;

(ii) termination by the Company without “Cause” or by executive for “Good Reason”, the number of PSUs earned is based on actual performance at the end of the performance period, pro-rated based on number of months of service during each performance period; and

(iii) upon a Change-in-Control, if outstanding awards are not continued, converted, assumed, or replaced with a substantially similar award, the number of PSUs earned is based on target performance, without pro-rating.

All outstanding RSUs are forfeited for all terminations prior to vesting, and there is no accelerated vesting in connection with a change in control.

No annual equity awards were granted to our NEOs in fiscal 2021, in part due to the Compensation Committee’s deliberations regarding implementation of an appropriate long-term incentive program for a public company. In the first quarter of fiscal 2022, the Compensation Committee determined to award long-term equity incentives for fiscal 2022, the values of which were informed in part by ranges around market median long-term equity values among our peer group and are designed to increase the amount of at-risk compensation tied to our stock price and financial performance as well as long-term value creation. Mr. Bulow joined the Company in July 2022 and did not participate in our 2022 long-term equity award program. Mr. Bulow’s offer letter provided for a guaranteed $500,000 long-term equity value for fiscal 2023.

Beginning with fiscal 2022, the Compensation Committee approved a compensation pay mix that includes performance-based long-term equity incentive compensation as a meaningful component. The Compensation Committee believes that a greater emphasis on at-risk long-term equity incentive compensation supports the Company’s long-term growth orientation and stockholder alignment and focuses on leadership development over the long- rather than short-term.

The following pay mix charts shows fiscal 2022 compensation for our CEO and other NEOs at target performance achievement and demonstrates the Compensation Committee’s commitment to ensuring an overwhelming majority of NEO compensation is based on performance and aligned with stockholders.

For fiscal 2023, the Compensation Committee did not approve any base salary increases for Mr. Barnard, Mr. Bulow, and Mr. Wiesner. The Compensation Committee approved modest increases to base salaries for Mr. Giles and Ms. Wu that were in line with, or slightly above, the levels approved for employees at-large. Increases were made to move Mr. Giles and Ms. Wu more in line with the 50^th percentile of market.

For the fiscal 2023 annual cash incentive plan, the Compensation Committee approved a design that was largely in line with the fiscal 2022 annual cash incentive plan design, except that the Compensation Committee determined to allocate 80% of target bonus potential to achievement of adjusted operating income goals, in line with prior year, and 20% to individual performance.

The design for the long-term equity incentive program for fiscal 2023 remains largely the same as prior year, except that the allocation between RSUs and PSUs for the NEOs shifted more heavily in favor of PSUs, with 60% allocated to RSUs, and 40% to PSUs. The annual long-term equity values granted to Messrs. Barnard and Wiesner for fiscal 2023 remained the same as granted in fiscal 2022. The Compensation Committee approved increases in long-term equity value for Mr. Giles and Ms. Wu to better approximate the median compensation for their positions at our peer group companies. Mr. Bulow’s long-term equity value for fiscal 2023 was set in his April 26, 2022 offer letter, which was based in part on market data and negotiations with Mr. Bulow.

The essential elements of our 2023 compensation program are as follows:

We believe that providing certain limited perquisites to our NEOs is necessary and appropriate to provide a competitive, well-rounded compensation package. We pay for health insurance premiums for certain of our senior executives, including our NEOs. We also provide group term life insurance for our NEOs. We provide Mr. Giles, Mr. Bulow, and Ms. Wu with a monthly car allowance and Mr. Barnard with the use of a company-owned car. We provide relocation assistance, including for Mr. Bulow in fiscal 2022, in the form of reimbursement of certain relocation expenses. Except for relocation benefits, we do not make gross-up payments to cover our NEOs’ personal income taxes that may pertain to any of the compensation or perquisites paid or provided by the Company. We also provide for limited Company-paid personal use of chartered aircraft for our CEO.

Certain of our executive officers, including our NEOs, are subject to robust stock ownership guidelines approved by the Compensation Committee:

Executives are expected to achieve the required guidelines within 5 years of the later of the adoption of the guidelines or their appointment to the relevant position. After achievement, executives must continue to hold enough shares to maintain such levels while covered by the guidelines. In September 2022, the Compensation Committee approved an amendment to the stock ownership guidelines to remove vested stock options from counting towards achievement of the required threshold holdings. As such, the following forms of equity count towards the required stock ownership guidelines:

The value of ownership is measured by reference to the average closing stock price of the Company’s common stock over the prior full year from the date of measurement. The Compensation Committee assesses compliance annually as of the fiscal year-end date. Failure to meet or show progress toward meeting the guidelines may result in (1) restrictions on sales of stock acquired upon vesting of equity awards until such guidelines are met; and/or (2) reductions in future long term equity incentive awards or other equity grants. The Compensation Committee has the sole discretion to determine the appropriate remedy for failure to comply with the guidelines, taking into consideration all pertinent facts and circumstances.

All NEOs serving as of October 31, 2022 exceeded the required level of holdings except for Ms. Wu and Mr. Bulow who joined the Company on March 8, 2021 and July 12, 2022, respectively. Ms. Wu is not required to be in compliance until September 2026, and Mr. Bulow is not required to be in compliance until July 2027.

The Compensation Committee believes that it is in the best interests of the Company and its stockholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance compensation philosophy. To that end, in November 2021, the Compensation Committee approved a clawback policy applicable to current and former Section 16 officers of the Company.

The clawback policy permits the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws. Specifically, following any restatement or correction of the Company’s financial results due to material non-compliance with any financial reporting requirement under the federal securities laws (or if the Board of Directors reasonably determines that financial results have been materially misstated), the Company may recoup any incentive compensation paid or granted in excess of what would have been paid or granted after giving effect to the restatement or correction during the three years preceding such misstatement or correction. Incentive compensation subject to recoupment includes all cash or equity-based incentive compensation, including but not limited to, (i) annual cash bonuses, and (ii) long-term equity-based incentive awards, such as restricted stock awards, RSU awards, performance shares units, and option awards.

Under our Insider Trading Policy, we prohibit our employees, including our executive officers, and Board members, from hedging the risk associated with ownership of shares of our common stock and other securities.

We believe in maintaining an ongoing dialogue with our stockholders and seek their feedback on a wide range of issues. The Company regularly engages with our stockholders and carefully considers any feedback received, including with regard to our governance practices and executive compensation program. Our management team participated in four investor events in fiscal 2022 and had approximately 50 interactions with our investors during the year.

The following table provides information concerning the compensation of our NEOs for each of the last three completed fiscal years. Our fiscal year end is October 31.

The following table sets forth information concerning each grant of an award made to an NEO in fiscal 2022 under any compensatory plan.

The following table sets forth certain information concerning outstanding equity awards held by the NEOs at October 31, 2022.

The following table provides information about options exercised by the NEOs and stock vested for the NEOs during the fiscal year ended October 31, 2022.

We currently maintain two deferred compensation plans for certain of our employees, including our NEOs. We have a cash deferred compensation plan which provides eligible employees an opportunity to save for retirement and other purposes. Employees may defer up to 90% of their pre-tax base salary and between 10% and 100% of their annual bonus under the plan, which contribution amounts may be matched by the Company at our discretion. Matching contributions, if any, are immediately vested. Employees have an opportunity to earn returns (positive or negative) based on notional investment alternatives offered under the plan but may only earn such returns with respect to any portion of the deferral account based on a single investment option at a time (i.e., no “greater of” returns apply to any amounts deferred under the Deferred Compensation Plan, and any changes to notional investments may only be made prospectively). Employees may elect that account balances be distributed upon any or all of the following payment events: a date specified by the participant with a minimum deferral period of two years, upon a separation from service, retirement or death.

In fiscal 2022, Mr. Barnard, Mr. Bulow, and Mr. Giles participated in our cash deferred compensation plan. The Company did not provide any matching contributions.