Boston Beer Company announced a truly sweet round of bonuses for its top executives last week, as well as their 2021 salaries.
Riding the wave of hard seltzer and hard tea growth, Boston Beer — which also produces the Samuel Adams and Dogfish Head craft beer brands and Angry Orchard cider offerings — provided a peek behind the curtain of the salaries of the top executives of one of the country’s largest craft beer and FMB makers via an 8K filed with the U.S. Securities and Exchange Commission.
Boston Beer pays bonuses based on company performance against certain goals — which include pre-established depletions growth, earnings before interest and tax, and resource efficiency targets — on a “bonus scale,” which is approved by the company’s compensation committee of the board of directors.
The compensation committee determined on February 9 that the company achieved 250% of its 2020 bonus scale, according to the filing. As such, the committee approved bonuses for:
- CEO Dave Burwick ($1,975,817);
- Treasurer and CFO Frank Smalla ($1,042,904);
- Chief sales officer John Geist ($834,323);
- Senior VP of supply chain Quincy Troupe ($562,022);
- Chief people officer Carolyn O’Boyle ($525,000).
Bonuses are slated to be paid around March 10, 2021.
The compensation committee also approved 2021 base salaries for its top executives, including:
- $835,459 for Burwick, a 5% increase over his 2020 base salary;
- $579,272 for Smalla, a 3% increase over 2020;
- $579,272 for Geist, a 3% increase over 2020;
- $515,000 for Troupe, a 3% increase over 2020;
- $432,600 for O’Boyle, a 3% increase over 2020.
The 2021 salaries will go into effect on March 21.
In addition to salaries and bonuses, the compensation committee also approved awards of stock options and restricted stock units (RSUs) of shares of Class A common stock, which will be granted on March 1.
- Burwick received $2 million in stock options and $2 million in RSUs;
- Smalla and Geist each received $281,200 in stock options and $281,200 in RSUs;
- Troupe was awarded $250,000 in stock options and $250,000 in RSUs;
- O’Boyle received $210,000 in stock options and $250,000 in RSUs.
Those awards are dependent on Boston Beer reaching certain compound annual growth rate targets based on net revenue growth in fiscal year 2022 over fiscal year 2020. They will begin vesting in March 2022 and fully vest in 2025.
The SEC filing also revealed that Boston Beer hired consulting firm Frederic W. Cook & Co. last year to review the total compensation being paid to Burwick, who took over as CEO in April 2018. The firm determined that Burwick’s total compensation was “below the market median total target compensation” for CEOs of similarly sized companies.
As such, Boston Beer’s compensation committee approved a special stock option grant and special RSU grant, both valued at $5 million, for Burwick. The special grants will begin vesting in March 2024 and fully vest in March 2026. Boston Beer said those grants are being made to retain Burwick, “provide leadership stability, and to align his total compensation with the market compared” to other companies of similar size.
Burwick received $20 million in total compensation in 2018, primarily as a result of one-time stock awards and signing bonuses, according to the Boston Business Journal. His pro-rated salary in 2018 was $562,500. In 2019, Boston Beer’s compensation committee approved a raise of his $750,000 base salary to $772,500.
Boston Beer also laid out its 2021 bonus opportunities for its top execs. Burwick can earn a bonus of 100% of his base salary this year, while Smalla and Geist can each earn bonuses of 75%, and Troupe and O’Boyle can earn bonuses of 60% of their base salaries.
In 2020, Boston Beer ranked as the fifth best selling beer company in the U.S., growing off-premise dollar sales 52%, to $1.9 billion, according to market research firm IRI. Those sales were driven by hard seltzer and hard tea, as Truly Hard Seltzer increased year-over-year sales 147.1%, to $923.2 million, and portfolio-wide sales of Twisted Tea increased 31.8%, to $506.3 million.
Look for more coverage of Boston Beer’s financials this week as the company reports its four quarter and full-year 2020 earnings on Wednesday, February 17.