XML 38 R24.htm IDEA: XBRL DOCUMENT
v3.20.4

INCENTIVE COMPENSATION | 12 Months Ended
--- | ---
Dec. 27, 2020
Share-based Payment Arrangement [Abstract] |
INCENTIVE COMPENSATION | INCENTIVE COMPENSATIONThe Company sponsors short-term incentive plans that provides the grant of either cash or stock-based bonus awards payable upon achievement of specified performance goals. Full-time, salaried exempt employees of the Company's U.S. operations who are selected by the administering committee are eligible to participate in the Pilgrim's Short Term Incentive Plan (“STIP”). Certain full-time, salaried employees of the Company’s Mexico operations are eligible to participate in the Pilgrim’s Mexico Incentive Plan (“PMIP”). The Company assumed responsibility for the Moy Park Incentive Plan dated January 1, 2013, as amended (the “MPIP”) through its acquisition of Moy Park on September 8, 2017. As of December 27, 2020, the Company has accrued $27.9 million, $3.8 million and $2.9 million related to cash bonus awards that could potentially be awarded under the STIP, MPIP and PMIP, respectively. The Company also sponsors a performance-based, omnibus long-term incentive plan that provides for the grant of a broad range of long-term equity-based and liability-based awards to the Company’s officers and other employees, members of the Board of Directors and any consultants (the “LTIP”). Awards that may be granted under the LTIP include “incentive stock options,” within the meaning of the IRC, nonqualified stock options, stock appreciation rights, restricted stock awards and restricted stock units (“RSUs”). Equity-based awards are converted into shares of the Company's common stock shortly after award vesting. Compensation cost to be recognized for an equity-based awards grant is determined by multiplying the number of awards granted by the closing price of a share of the Company's common stock on the award grant date. Liability-based awards granted under the LTIP are converted into cash shortly after award vesting. Compensation cost to be recognized for a liability-based awards grant is first determined by multiplying the number of awards granted by the closing price of a share of PPC’s common stock on the award grant date. However, the compensation cost to be recognized is adjusted at each subsequent milestone date (i.e., forfeiture date, vesting date or financial reporting date) by multiplying the number of awards granted by the closing price of a share of PPC’s common stock on the milestone date. On May 1, 2019, the Company's stockholders approved the Pilgrim’s Pride Corporation 2019 Long Term Incentive Plan (the “2019 LTIP”), which replaced the expiring Pilgrim’s Pride Corporation 2009 Long-Term Incentive Plan (the “2009 LTIP”). The 2019 LTIP became effective as of December 28, 2019. As of December 27, 2020, we have in reserve approximately 1.8 million shares of common stock for future issuance under the 2019 LTIP. The following awards were outstanding during 2020:
Benefit Plan | Award Type |  | Grant Date |  | Grant Date Fair Value per Award |  | Vesting Condition |  | Vesting Date |  | Intended Settlement Method |  | Milestone Date Fair Value per Award |  | Awards Granted |  | Performance Target Achievement Award Adjustment |  | Awards Forfeited to Date
2009 LTIP | RSU |  | 3/1/2018 |  | $24.93 |  | Service |  | (a) |  | Stock |  | NA |  | 163,764 |  |  | — |  |  | (51,473) |
2009 LTIP | RSU |  | 3/1/2018 |  | $24.93 |  | Performance/Service |  | (b) |  | Stock |  | NA |  | 217,253 |  |  | (53,381) |  |  | (78,449) |
2009 LTIP | RSU |  | 3/1/2018 |  | $24.93 |  | Performance/Service |  | (c) |  | Cash |  | $19.35 |  | 66,272 |  |  | (17,863) |  |  | (15,235) |
2009 LTIP | RSU |  | 5/10/2018 |  | $21.54 |  | Service |  | (d) |  | Stock |  | NA |  | 8,358 |  |  | — |  |  | — |
2009 LTIP | RSU |  | 1/7/2019 |  | $16.47 |  | Performance/Service |  | (e) |  | Stock |  | NA |  | 414,620 |  |  | 39,620 |  |  | (137,413) |
2009 LTIP | RSU |  | 1/7/2019 |  | $16.47 |  | Performance/Service |  | (f) |  | Cash |  | $19.35 |  | 109,654 |  |  | 13,705 |  |  | — |
2009 LTIP | RSU |  | 4/30/2019 |  | $26.91 |  | Service |  | 7/1/2020 |  | Cash |  | $15.12 |  | 200,000 |  |  | — |  |  | — |
2009 LTIP | RSU |  | 4/30/2019 |  | $26.91 |  | Performance/Service |  | (g) |  | Stock |  | NA |  | 470,000 |  |  | — |  |  | (470,000) |
2009 LTIP | RSU |  | 5/24/2019 |  | $27.86 |  | Service |  | (d) |  | Stock |  | NA |  | 11,170 |  |  | — |  |  | — |
2019 LTIP | RSU |  | 1/8/2020 |  | $30.94 |  | Performance/Service |  | (h) |  | Stock |  | NA |  | 195,140 |  |  | — |  |  | (33,729) |
2019 LTIP | RSU |  | 1/8/2020 |  | $30.94 |  | Performance/Service |  | (i) |  | Cash |  | $19.35 |  | 121,310 |  |  | — |  |  | — |
2019 LTIP | RSU |  | 4/29/2020 |  | $22.01 |  | Service |  | (d) |  | Stock |  | NA |  | 13,630 |  |  | — |  |  | — |
(a) The restricted stock units vest in ratable tranches on December 31, 2018, December 31, 2019 and December 31, 2020. Expected compensation cost related to these units totals $2.8 million based on a closing stock price for the Company’s common stock of $24.93 per share on March 1, 2018. Compensation cost will be amortized to profit/loss over the remaining vesting period. (b) The restricted stock units vest in ratable tranches on December 31, 2019, December 31, 2020 and December 31, 2021. Expected compensation cost related to these units totals $2.1 million based on a closing stock price for the Company’s common stock of $24.93 per share on March 1, 2018. Compensation cost will be amortized to profit/loss over the remaining vesting period. (c) The restricted stock units vest in ratable tranches on December 31, 2019, December 31, 2020 and December 31, 2021. Expected compensation cost related to these units totals $0.6 million based on a closing stock price for the Company's common stock of $19.35 per share on December 27, 2020. Compensation cost will be amortized to profit/loss over the remaining vesting period. (d) These restricted stock units were granted to the non-employees who currently serve on the Company's Board of Directors. Each participating director's units will vest upon his departure from the Company's Board of Directors. Compensation cost was recognized in profit/loss upon the grant date. (e) The restricted stock units vest in ratable tranches on December 31, 2020, December 31, 2021 and December 31, 2022. Expected compensation cost related to these units totals $5.2 million based on a closing stock price for the Company's common stock of $16.47 per share on January 7, 2019. Compensation cost will be amortized to profit/loss over the remaining vesting period. (f) The restricted stock units vest in ratable tranches on December 31, 2020, December 31, 2021 and December 31, 2022. Expected compensation cost related to these units totals $2.1 million based on a closing stock price for the Company's common stock of $19.35 per share on December 27, 2020. Compensation cost will be amortized to profit/loss upon satisfaction of the performance conditions over the remaining vesting period. (g) The restricted stock units were cancelled in their entirety by the Company's Board of Directors on December 8, 2020. (h) If performance conditions related to the Company's 2020 operating results are satisfied, the restricted stock units vest in ratable tranches on December 31, 2021, December 31, 2022 and December 31, 2023. Expected compensation cost related to these units totals $5.0 million based on a closing stock price for the Company's common stock of $30.94 per share on January 8, 2020. Compensation cost will be amortized to profit/loss upon satisfaction of the performance conditions over the remaining vesting period. (i) If performance conditions related to the Company's 2020 operating results are satisfied, the restricted stock units vest in ratable tranches on December 31, 2021, December 31, 2022 and December 31, 2023. Expected compensation cost related to these units totals $3.8 million based on a closing stock price for the Company's common stock of $30.94 per share on December 27, 2020. Compensation cost will be amortized to profit/loss upon satisfaction of the performance conditions over the remaining vesting period. Compensation costs and the income tax benefit recognized for our stock-based compensation arrangements are included below:
| 2020 |  | 2019 |  | 2018
| (In thousands)
Equity-based awards compensation cost: |  |  |  |  |
Cost of sales | $ | 838 |  |  | $ | 461 |  |  | $ | 389 |
Selling, general and administrative expense | 1,938 |  |  | 9,671 |  |  | 12,764 |
Total cost | 2,776 |  |  | 10,132 |  |  | 13,153 |
Income tax benefit | 676 |  |  | 2,466 |  |  | 3,202 |
Net cost | $ | 2,100 |  |  | $ | 7,666 |  |  | $ | 9,951 |
Liability-based awards compensation cost: |  |  |  |  |
Selling, general and administrative expense | $ | 1,081 |  |  | $ | 671 |  |  | $ | — |
Income tax benefit | 263 |  |  | 163 |  |  | — |
Net cost | $ | 818 |  |  | $ | 508 |  |  | $ | — |
The Company’s RSU activity is included below:
| 2020 |  | 2019 |  | 2018
| Number |  | Weighted Average Milestone Date Fair Value(a) |  | Number |  | Weighted Average Milestone Date Fair Value(a) |  | Number |  | Weighted Average Milestone Date Fair Value(a)
| (In thousands, except weighted average fair values)
Equity-based RSUs: |  |  |  |  |  |  |  |  |  |  |
Outstanding at beginning of year | 926 |  |  | $ | 24.04 |  |  | 1,069 |  |  | $ | 22.97 |  |  | 389 |  |  | $ | 18.39 |
Transferred to liability-based awards | (200) |  |  | 26.91 |  |  | (36) |  |  | 24.67 |  |  | — |  |  | — |
Granted | 249 |  |  | 28.14 |  |  | 843 |  |  | 22.01 |  |  | 1,114 |  |  | 23.05 |
Vested | (66) |  |  | 24.93 |  |  | (723) |  |  | 22.08 |  |  | — |  |  | — |
Forfeited | (325) |  |  | 25.95 |  |  | (227) |  |  | 21.51 |  |  | (434) |  |  | 19.06 |
Outstanding at end of year | 584 |  |  | $ | 22.12 |  |  | 926 |  |  | $ | 24.04 |  |  | 1,069 |  | $ | 22.97 |
| 2020 |  | 2019 |  | 2018
| Number |  | Weighted Average Milestone Date Fair Value(a) |  | Number |  | Weighted Average Milestone Date Fair Value(a) |  | Number |  | Weighted Average Milestone Date Fair Value(a)
| (In thousands, except weighted average fair values)
Liability-based RSUs: |  |  |  |  |  |  |  |  |  |  |
Outstanding at beginning of year | 143 |  |  | $ | 32.97 |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Transferred from equity-based awards | 200 |  |  | 26.91 |  |  | 36 |  |  | 14.77 |  |  | — |  |  | — |
Granted | 135 |  |  | 29.47 |  |  | 110 |  |  | 16.47 |  |  | — |  |  | — |
Vested | (211) |  |  | 16.04 |  |  | (3) |  |  | 26.86 |  |  | — |  |  | — |
Forfeited | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Outstanding at end of year | 267 |  |  | $ | 19.35 |  |  | 143 |  |  | $ | 32.97 |  |  | — |  |  | $ | — |
(a) The milestone date fair value is either the closing price of the Company’s common stock on the grant date for equity-based awards or the closing price of a share of the Company's common stock on the respective milestone date for cash-based liability-based awards (i.e., grant date, vesting date, forfeiture date or financial reporting date). The total fair values of equity-based awards and liability-based awards vested during 2020 were $2.5 million and $3.0 million, respectively. The total fair values of equity-based awards and liability-based awards vested during 2019 were $14.0 million and $0.1 million, respectively. As of December 27, 2020, the total unrecognized compensation cost related to all nonvested equity-based awards was $5.1 million. This cost is expected to be recognized over a weighted average period of 1.76 years. As of December 27, 2020, the total unrecognized compensation cost related to all nonvested liability-based awards was $3.8 million. This cost is expected to be recognized over a weighted average period of 1.74 years. Historically, we have issued new shares to satisfy equity-based award conversions.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration