Kellogg Company (NYSE:K)
91st Annual Shareowner Meeting
April 26, 2013 1:00 pm ET
James M. Jenness - Chairman, Chairman of Executive Committee and Co-Trustee of the W K Kellogg Foundation Trust
Gary H. Pilnick - Senior Vice President of Corporate Development, General Counsel and Secretary
John A. Bryant - Chief Executive Officer, President, Director and Member of Executive Committee
Ladies and gentlemen, please welcome, Chairman of the Board of Kellogg Company, Mr. Jim Jenness.
James M. Jenness
Thank you. So how many of you remember that Opera commercial for Rice Krispies when you're growing up? It's fantastic, isn't it?
Well, Good afternoon. It's a pleasure seeing you all, another great turnout, as usual, to our meeting. And we thank you, all, very much for coming.
Now, every year I do this, I give my Cubs report. So here's my report this year. I have a very brief report this year because for the Cubs, I'm waiting until next year. So I guess, it's going to be Go Tigers, right?
Yes. So I guess like being a Cub fan is being like a Lions fan, right? Let's keep this friendly, all right? So it's now my privilege to call toward the 91st Annual Shareowner Meeting of the Kellogg company.
As you just saw for 85 years, we've been delighting consumers, young and old, with the enticing snap-crackle-pop sounds and great taste that comes from only a bowl of our Kellogg's Rice Krispies. We think that deserves a great round of applause. So our friends, Snap, Crackle and Pop, and our newest family, Mr. P, and then I must say there's something about Mr. P that -- we have this connection. But the great thing about this is all of our buddies, who's following the meeting today to distribute our gift to you, a packet of coupons good for a variety of our Kellogg products. These coupons are of comparable value to last year's packet and give you a chance to try some of our great tasting and nutritious foods, including of course, Rice Krispies, including Pringles and some of the new innovation John will be telling -- talking about a little later in the meeting.
The gift packets will be available at the end of today's meeting, and so I thank you for your ongoing support. We've got plenty of coupons available, so you don't have to rush out to get one. And be sure on your way out, be sure to give Snap, Crackle and Pop and Mr. P a big hug from all Kellogg shareowners.
Okay, down to business. If you have not received the agenda or rules of procedure for our meeting, please raise your hand, and they will be delivered to you. Okay, we have a full agenda today: The election of 4 directors; approval of the advisory resolution for executive compensation and the Kellogg company 2013 long-term incentive plan; ratification of the appointment of the company's independent auditors; and a shareowner proposal.
As the company's bylaws provide, I will act as Chairman of our meeting. And I must say, over the years, this introduction is always an overwhelming highlight for me. Seated at the table on the platform with me is Gary Pilnick, our General Counsel and Secretary to the Board, who will act as Secretary to the meeting.
Hi, Gary. I think that's the first time Gary ever got an applause. The Board of Directors has appointed a representative of Carl Hagberg & Associates to act as the independent judge of the election. The customary oath of office has been taken and signed and will be filed at the records of our meeting. His function is to decide on the qualification of voters, accept the votes and tally the ballots cast.
Also present today are representatives from PricewaterhouseCoopers, our company's auditors. After the meeting, they will be available to answer any questions you may have.
I would like to introduce the company's directors and nominees attending today's meeting. As your name is called, please stand and please hold your applause until all our directors have been introduced. So the nominees for director to stand for reelection at today's meeting are Gordon Gund, Mary Laschinger, Ann McLaughlin Korologos and Cynthia Milligan.
Directors with us today whose terms do not expire this year and are continuing in office are John Bryant, our CEO; Dr. Benjamin Carson -- feel free to applaud for Ben. Dillon is going to feel bad in a minute but -- John Dillon, Don Knauss, Rogelio Rebolledo, Sterling Speirn and me.
We'd like to highlight the 2 newest members of our Board, Cynthia Milligan, Dean Emeritus of the College of Business Administration at University of Nebraska, Lincoln and also a longtime W.K. Kellogg Foundation trustee; and Mary Laschinger, President of Xpedx and Senior Vice President of the International Paper Company. How about a warm welcome for Cynthia and Mary who'll be on our board for a long time.
During 2012, our Board of Directors held 10 meetings. Each of the incumbent directors attended more than 75% of the board meetings and board committee meetings, of which the director is a member. Our thank to our directors for joining us today and their service and commitment to our company. And no doubt our company would not be where it is today if it wasn't for some prior heroes and directors of our retired officers of our company. Any and all retired officers -- I know there's a couple here -- would you please stand and let us give you a round of applause? Paul, yes, you got to stand up, come on.
This is a special deal. It is our privilege to recognize a very special member of our Kellogg family and a dedicated member of our Board for over 15 years, Dottie Johnson. But first, let's watch a short video highlighting Dottie's outstanding work and efforts.
James M. Jenness
This is Dottie's last meeting with us. She's retiring from our Board. We're thrilled for her and her family and the new adventures that lie ahead.
Dottie has helped guide our company through significant growth, including service during the Pringles and Keebler acquisitions, her leadership and passion have greatly advanced our vision to enrich and delight the world through foods and brands that matter.
Beyond her contributions to Kellogg, we recognize Dottie for her distinguished career with the Ahlburg Company, value her tenure as a highly respected trustee of the W.K. Kellogg Foundation for the last 32 years, and that's amazing, and her work as President Emeritus of the Council of Michigan Foundation, which she led as President and CEO for 25 years. Our company benefited greatly from her experience, her key knowledge of corporate responsibility and her commitment to philanthropy. She truly embodies Mr. Kellogg's legacy and commitment to community. There is no doubt Mr. Kellogg would be very proud of our Dottie Johnson. So Dottie, would you please stand so we could give you a round of applause. And John, your job is to go over to her and give her a big hug for everybody here.
We also want to recognize and thank those employees who are currently serving our country in the military. Your bravery and commitment are inspiring to us all, and we pray for your safe and quick return home. We would also like to thank all of the veterans who are with us today. With so many Kellogg employees having served in the military, and employees who are family members and supporters of loved ones in the military, we're pleased to share with you that last year we created Kellogg Vets & Supporters, a new Kellogg company employee research group. This group allows us to honor, support and thank those who are serving or who has served in the military, as well as those who made sacrifices while their friends, colleagues and family served our country. Please join me in a round of applause for our employees in the armed services, those on active duty, and those in reserves and are veterans.
Now would the Secretary please report on the mailing of the annual report, notice of the meeting and proxy statement in a while and advise whether or not the necessary quorum to conduct the business of the meeting is present.
Gary H. Pilnick
Mr. Chairman, beginning on or about March 12, 2013, a copy of the annual report on Form 10-K, notice of the Annual Meeting and the proxy statement were mailed to each holder of record of common stock at the close of business on the record date for this meeting, March 1, 2013, which is in accordance with the bylaws of the company. We have received an affidavit attesting to this mailing.
Our list of shareowners as of the record date has been duly certified by our transfer agent. That list has been opened for inspection by the shareowners at the company's headquarters for the past 10 days, and is available now at this meeting for examination by any shareowner.
In addition, I have been advised by the independent judge of election that there are present at today's meeting, in person or by proxy, approximately 325 million shares of common stock, which represents approximately 89% of the shares of stock outstanding and entitled to vote. Since the majority of the company's shares are represented here today, a quorum is present, the meeting is duly constituted, and the business of the meeting may proceed.
James M. Jenness
Thank you, Gary. The report of the secretary on the existence of a quorum is accepted. I direct that the affidavit of mailing has to be made part of the minutes of our meeting.
On behalf of the Board of Directors, we would like to express our appreciation to all shareowners who returned their proxies. If there is a shareowner present who has not and who desires to have a proxy recorded, please hand it to one of our ushers. If you wish to vote in person, please obtain a ballot from the ushers at this time as the vote will be held later in our meeting.
The first order of business to come before us is the election of directors. The 4 nominees for reelection to the board for a 3-year term expiring at our 2016 Annual Meeting are Gordon Gund, Mary Laschinger, Ann McLaughlin Korologos and Cynthia Milligan. The information concerning the nominees' experiences and qualifications is in our Proxy Statement. The company bylaws require that a shareowner provide advance notice to the company of a shareowner's intent to nominate persons as Director -- Directors. No such notice was received, and therefore, I declare the nominations for Director, closed.
The next order of business is an advisory resolution to approve executive compensation. At this time, I would like to ask Gary to present the proposal.
Gary H. Pilnick
The Board of Directors has recommended that the shareowners vote for the resolution approving the compensation for our named executive officers and disclosed in the company's proxy Statement.
James M. Jenness
Is there any discussion on this proposal? As there is no discussion, we will move on. The next order of business is a proposal to approve Kellogg Company 2013 Long-Term Incentive Plan. At this time, I would like to ask Gary to present the proposal.
Gary H. Pilnick
The Board of Directors has recommended that the shareowners vote for the Kellogg Company 2013 Long-Term Incentive Plan as described in the company's proxy statement.
James M. Jenness
Is there any discussion on this proposal? As there is no discussion, we will move on. The next order of business is to ratify the appointment of an independent registered public accounting firm for fiscal 2013. At this time, I would like to ask Gary to present the proposal.
Gary H. Pilnick
The Audit Committee of the Board of Directors has appointed and recommends that the shareowners ratify PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for fiscal year 2013.
James M. Jenness
Is there any discussion on this proposal? As there is none, we will move on. The next order of business is a shareowner proposal to repeal our classified board. I understand that Beth [indiscernible] is here to present the proposal. Beth, you want to... As Beth is moving to the microphone, I tried to give her $300 to leave and not present this but she wouldn't take it.
Proposal to repeal classified board, resolve that shareholders of Kellogg company urge the Board of Directors to take all necessary steps other than any steps that must be taken by shareholders to eliminate the classification of the Board of Directors and to require that all directors elected at or after the Annual Meeting held in 2014 be elected on an annual basis. Implementation of this proposal should not prevent any director elected prior to the Annual Meeting held in 2014 from completing the term for which such director was elected. This resolution was submitted by the Shareholder Rights Project on behalf of the North Carolina Equity Investment Fund Pooled Trust. The North Carolina Equity Investment Fund Pooled Trust was represented and advised by the Shareholder Rights Project. The resolution urges the Board of Directors to facilitate a declassification of the board. Such a change would enable shareholders to register their views on the performance of all directors at each annual meeting. Having directors stand for elections annually makes directors more accountable to shareholders and could, thereby, contribute to improving performance and increasing firm value. Please vote for this proposal to make directors more accountable to shareholders. Thank you.
James M. Jenness
Thank you, Beth, nice job. The Board's statement of opposition to this proposal is included in our Proxy Statement. The board has carefully considered the proposal and they believe the classified board structure remains in the best long-term interest of all of our shareowners. Because there's no further business schedule to come before the shareowners, I declare the polls for voting on each matter before this meeting are now open, and direct that a vote of the shareowners be taken by written ballot. Please remember if you returned your proxy whether by mail, telephone, Internet or to the ushers earlier in the meeting, your vote has already been counted. If there is any one who wishes to vote in person, please raise your hand so that you may receive a ballot. I suggest that those shareowners voting in person mark their ballots, pass them to the end of the aisle so they may be picked up by our ushers.
The polls for voting on these matters will remain open for 5 minutes and then will be closed. After voting has been completed on all matters on our agenda, the ballots will be tabulated by the proxy judge. Ushers will be available in the aisles to pick up your ballots.
While the votes are being counted, our company's President and CEO, John Bryant, will update you on the business. And afterwards, something that John is looking forward to, he's looking for an opportunity to answer all of your questions. John?
John A. Bryant
Thank you, Jim. And thank you for your ongoing passion and commitment and dedication to the Kellogg company. Sharon Jenness and Jim's son Jim here with us today as well so great to have you.
Before I get started, I'm going to make some forward-looking statements. So I'd like to refer you to some documents from our lawyers up here, all the risks that we face in the company, please take the time to read them in the annual report. Take them into account when considering what I have to say this afternoon.
I have 3 quick agenda items. One is introduction to our leadership team. The second is talking about our vision and our strategy, and a follow-on is about corporate responsibility and what we're doing as a company to try to make the world a better place.
First in terms of introducing the leadership team. This is a group of people who run our operations around the world. Some of them have nearly 30 years of Kellogg experience, some of them have 1 or 2 years of Kellogg experience coming from prior companies such as Colgate and Kraft. If I can ask you, can you please -- to stand up over here, [indiscernible] Battle Creek and can I ask for a round of applause please for all 30,000 employees around the world.
Let me change gears to the vision of the company. Our vision is to enrich and delight the world through foods and brands that matter. And our purpose is nourishing families so they can flourish and thrive. And it's pretty hard to distill the essence of the company into a few words. One way to think about the Kellogg company is what makes us so special is our connection with our consumers. Every day, around hundreds of millions of consumers invite us into their home, sit us down at the breakfast table and give our foods to their children, to their loved ones.
Whether it be breakfast cereal in the morning or popping a can of Pringles throughout the day, we have a special connection and emotional bond with our consumers all around the world, and we take that very seriously.
We try to capture that here with our vision and our purpose, and we have a video also to try to bring that to life. So if we could run the video, please.
John A. Bryant
That's our vision, but how do we make it a reality? We have 4 growth platforms as a company. First, we are the leader in cereal around the world, and we're passionate, we're committed to continue to drive the growth lever for our business. Second, we're going from a U.S. snacks player to a truly global snacks player, and Pringles is a key part of that transition as a company. Third, we have the best Frozen Food business in North America than any of our competitors out there. And we want to keep growing that business aggressively. And fourth, we want to position ourselves to take advantage of the emerging markets to position ourselves to participate in what has been a defining event in the food industry today, which is the emergence of billions of consumers around the world looking for the benefits of packaged foods.
We'll talk first about how we're going to win in cereal. In the past, we've had a very clear definition of cereals arctic, ready-to-eat cereal meaning a bowl, cold cereal, milk, spoon, first thing in the morning sitting at the breakfast table. And we think we can absolutely grow that definition of cereal. If you look at per capita consumption of cereal in the United States, it's high for kids, it comes down for breakfast skippers, 20-, 30-, 40-year-olds, and starts coming back up for old adults. Old adults at this point are about health and wellness and so on. And we are innovating to drive that consumption to take advantage of the aging population in the U.S. to bring them into our business. So for example, we have a Raisin Bran Omega-3 product coming out here in the middle of the year. Feel free to save your coupon up to try this or even buy it for full price. That's one example of what's coming up. Also we do welcome the kids side as well. I mean, kids remains a very important part of our business. As we think about health and wellness and obesity, we know that kids who eat cereal for breakfast have a lower body mass index than kids who don't. We know that milk consumption with cereal is a primary way of getting milk into kids' diets. And cereal is a source of 9 to 10 key nutrients to kids. So a lot of great things that cereal brings and reasons that mean we can keep growing the cereal category over time.
We're also reframing or redefining the category, broadening what we mean when we say cereal. Some people just don't have the time to sit down at the breakfast table and have cereal with milk. And so what we come up with is Kellogg's to Go, which is basically a bowl of cereal and milk in a portable beverage format, 10 grams of protein, 5 grams of fiber. A great product just launching really now across the United States, going national and a big opportunity for us to really drive additional growth in the cereal business.
In addition to that, outside the United States, a lot of people around the world don't like to consume milk. And what we see from those markets is people eating cookies for breakfast in order to get the benefits of cereal through cookies and dunking it in coffee and so on. So in the U.K., we've come out with Nutri-Grain breakfast biscuits, biscuits designed again for consumption at the breakfast occasion. Other examples include hot cereal markets like India and South Africa, where the local consumer have it, is more oriented towards hot or even savory products early in the morning, and we're meeting those consumer needs through different food forms.
So we are very excited about our cereal business. We are the clear global leader in cereal, and we think we can continue to grow this business quite aggressively.
The big change in our strategy over the last few years has been in the area of snacks. We've had snacks business for a number of years. If you go back to the '70s and '80s, it actually began with that inside of portable cereal. People don't have time to have breakfast in the morning. So I have Nutri-Grain bars as part of the best solution for missed breakfast. And we saw people are eating those bars more and more outside the breakfast occasion. And so we actually have a snacks business here.
So when we acquired Keebler around 2000, which gave us the snacks capability in the U.S., their export delivery system, tremendous brands in cookies and crackers, and an entire organization focused on driving snacks. It's been an incredible source of growth for us over the last decade, a tremendous amount of our success. Unfortunately, we haven't been able to leverage that in our International business because Keebler is really just a U.S. company.
So we have acquired Pringles, and Pringles gives us the ability now to become a truly global snacks player. With Pringles comes the second largest savory snacks business in the world. It comes with Mr. Pringles, a tremendous icon and brand. It also comes with a sort of great dedicated snacks experts around the world. We have a team now in Geneva for our European business, in Singapore for our Asia Pacific business and a team in Latin America as well. So what Pringles gives us is a platform for additional growth in terms of products, as well as an infrastructure and an organization designed to help us drive our snacks business more aggressively.
So excited about the potential opportunity for snacks.
The third area is our Frozen Foods business. This is a large business. This is roughly $1 billion business. It's been growing on average for the last 10 years between 8% and 9% a year. The last 3 years, it's grown over 10% a year. So it makes us by far the best and fastest growing large Frozen Foods business here in the U.S. At the center of this business is Eggo, Eggo Waffles. And Eggo is actually the second strongest brand the Kellogg Company has, second only to the Kellogg brand itself. We also have great brands like Morningstar Farms and Garden Burger. And we're only just scratching the surface of meat alternatives here in the United States. So I think this continues to be a very exciting long-term platform for the company.
And then we've leveraged some Kellogg equities, some cereal equities into the frozen foods place, whether it be Kashi entrees or Special K flatbread breakfast sandwiches, which are up on track to be roughly a $70 million, $80 billion business this year. So a tremendous piece of innovation, one of the most successful the company has had in a long time. So excited about the growth of our Frozen Foods business.
The fourth platform is emerging markets. And this is a defining event in the food industry today. There's billions of people who are in a position where they can afford the benefits of packaged food whether it be concerns on food safety, nutrition, convenience or value.
And in some parts of the world, we're very well positioned to take advantage of this already. Markets like India, South Africa, Brazil, will be in those markets, some of them for as long as 50, 60 years. We have strong brands, excellent infrastructure and we're well-positioned to grow.
There are some other markets where we didn't have as much scale, we've made joint ventures and acquisitions. We have joint ventures in Turkey and China, an acquisition in Russia. And in other parts of the world, we still have work to do. We have white spaces in Eastern Europe, most of Africa and parts of Asia. So you see the company continues to look in some of these other parts of the world to position ourselves for that long-term growth.
Through our growth strategy I think you see we're making some great progress, particularly on the Pringles acquisition and integration. I'm happy to say that Pringles now is pretty much fully integrated into our European business and our Asia Pacific business. We are in the process of going through a systems integration in North America and everything is going well so fast. We're feeling very good about the Pringles integration, seeing good topline growth from Pringles as well. But let me run a video giving you a sense of some of the great work that's been going on.
John A. Bryant
We continue to be very, very disciplined on our cost structure so we can continue to invest back in our business, create brands that really have strong emotional bonds with consumers, and help us bring more innovation out to the marketplace, as I showed you before, helps us drive our topline, drive gross margin so we can invest back in our brands and so on and get the whole virtuous cycle going around.
If we do that well, we can generate lots of good cash flow as well, particularly through very disciplined approach to co-working capital and capital expenditure. And so what we do with our cash, I'm happy to say we pay it to shareholders in the form of dividends. We've paid 354 consecutive quarterly dividends since we started in 1925. And I'm also happy to say that our Board of Directors approved today the increase in dividend in the third quarter of this year by $0.02 to $0.46 or 4.5% increase in the dividend, so even more money going back to shareholders.
So one way shareholders benefit from holding Kellogg shares is the dividend. The second way is the share price itself. I'm also happy to say that over the last year, the Kellogg share price has gone up by 30% compared to the market increase of 15%, the S&P 500. So the share price has really done extremely well. We are trading around all-time high for the Kellogg company, around $65, $66. And we've added $6 billion of market value since this time last year.
So a tremendous drop in the share price, which I think reflects the underlying strength of the company.
Of course, there's more to a company than just the share price and the dividend; it's what we can do to make the world a better place. And we issued our fifth annual corporate responsibility report. And you can go on to our website to have a look at that, if you like. It has 4 buckets of things we're trying to do as a company. First, what do we do with the consumers? The single biggest impact we can have on society is through our foods. We're constantly challenging ourselves to make our foods better for people. And you see we're adding vitamin D, in some markets, reducing sugar, salt, whatever it might be around the world, adding whole grains, fiber. The second is what could we do to make the Kellogg company a wonderful place to work? What could we do for employees? And I think in there you can see some of the great programs we have, this is a feeling great program, help promote programs inside to have people moving and exercising regularly.
And furthermore, what we do to make the world a better place from a sustainability perspective. Reduce the use of water, you reduce the use of energy, greenhouse gases and so on. And you can see programs, we're making progress on that.
And then the fourth is how do we support the local communities that we live in, committees such as Battle Creek. And it's something that we're very focused on to give you a sense of how we do it, we have the United Way program. And last year, we generated over $7 million of donations in the United Way, of which nearly $4 million in Battle Creek. And this was a record year for the United Way yet again for the Kellogg Company, so a tremendous performance.
As we think about making the world a better place, we challenge ourselves what can we uniquely do? What is the Kellogg company competitively advantaged at doing? And so we come up with a program called Kellogg's Breakfasts for Better Days. And we pledged that by end of 2016, we will give away 1 billion servings of cereal and snacks to people who need it the most when they need it, where they need it. So a very exciting, very powerful program that I think the Kellogg Company is uniquely positioned to be able to do. We have a video to give a little bit more flavor what's going on behind that program, if we could run the video, please.
John A. Bryant
With all these programs it's wonderful also to see ourselves recognized in the media, whether it be Forbes Most Innovative Companies, Fortune's Most Admired Companies, or amongst some of the World's Most Ethical Companies by Ethisphere magazine.
There's one award in particular that I'm particularly proud of and that's Diversity and Inclusion Incorporated. Diversity and Inclusion Incorporated does a lot of work around the world to identify those companies that are creating the most D&I supportive environment within their companies. And which we have hundreds, I think about 800 very large companies around the world go through a ranking process here to determine how they rank. And we're very fortunate last year that we got into the Diversity and Inclusion Top 50 list, at #49. And I'm even happier today saying we made it in #32 this year. So we continue to improve our program, continue to improve our performance in the whole area of Diversity and Inclusion in making our company a wonderful place to work. So with that, the strategy is clear, vision is clear, executing with excellence, making great progress.
I'd like to take a moment to stop and turn it over to Q&A. Feel free to throw any soft balls up as well then throw them to Jim Jenness. If you have any question, please move to one of the microphones in the corridors, and I'd be happy to take your question.
John A. Bryant
So we have one over here.
My name is Mike Robinson [ph] and my question deals with the ability to produce quality cereal in the United States and North America and the inability to sell as much as we can produce. Do you have plans to convert part of or the whole facility into the snack or other part of the breakfast mode? Or are you going to mothball the plan?
John A. Bryant
Mike, I would love to sell more cereal, that's our first goal. And you could see converting cereal to maybe more of a snacks facility. We really got cereal in the United States. 10 years ago, 20% of all the cereal was consumed outside the breakfast occasion, so it's 30%. So cereal, the traditional definition of cereal, is actually a great snacks product. And we think we can grow consumption outside that breakfast occasion. So our goal is to basically keep looking to sell more cereal with things like Raisin Bran, with Omega-3, the innovation such as Krave, we've had here in the U.S. the last couple of years, so that's our goal.
Would you be willing to allow the plants in the United States to know what the advertising value would be of being landfill free?
John A. Bryant
The value of being landfill free, I think we could certainly try to find that out. I think when we got the landfill free, what we're trying to do there is make an impact on the environment less, and that's our goal around that. I'm not sure if there's a big advertising benefit. I know consumers are increasingly concerned about our carbon footprint, our impact on the environment. But I think at the end of the day, it's more about trying to do the right thing rather than advertise it.
My name is Matthew Sheen [ph]. I want to know more about genetically modified crops and how Kellogg is dealing with that, monitoring if there's some way of posting something on the website to better explain what products are being used in that modified crop?
John A. Bryant
All right. So there's a lot of questions these days about GMOs or genetically modified crops. It's good to keep in mind that the FDA has come out and said GMOs are safe and there's a general scientific agreement with that.
John A. Bryant
I guess I'll check the FDA. So I think the opportunity for us is to have portfolio flexibility by choice, and within that portfolio, we do actually have some GMO-free products and some clean label products; you can see those on the shelves. So if you're concerned about that, we do provide that offering. Thank you.
Betty Crider [ph] and I called in and I felt like I was bailing out the Atlantic Ocean with a teacup but I ask if you couldn't reduce salt and sugar and so on like in England and all. Of course, I understand they have regulations so all the companies are on the same boat. I did read a very good book of Michael Moss's. He's a Pulitzer Prize winner. Have you read this book? Salt, Sugar and Fat: How The Food Giants Hooked Us, and particularly the children, the kids. Kellogg's is prominent in the sugar section. Not in too good a light, I might add. Of course, I think it's changing because what you did do with Kashi GoLean, your salt is 4%, which is really good; sugar, 6 grams; fat, 1 gram; protein, 13; fiber, 10. I wish you could market this to kids. And get them hooked on it because the advertising part in here was very interesting. Do you have any intentions of trying to market truly healthy cereal that you would give away and market to children?
John A. Bryant
I believe we are absolutely committed to advertising healthy cereals to kids and in fact, we have internal guidelines that we won't advertise to kids unless the food meets certain criteria. And we continue to do that whether that be Rice Krispies or even some of the GoLean products to moms for kids' consumption. And we'll be reducing sugar and salt in our cereals over time, so we constantly move towards making more progress at a time.
Good. I mean, like to get salt to 4 and sugar to 6. I mean, that would be a good movement, and you are doing it?
John A. Bryant
We are. We have a Scooby Doo cereal that came out, with, I think, around 6 grams of sugar. So we're constantly innovating, bringing out new products that are lower in sugar and salt. Thank you. If there are no further questions, I'll leave it at that. Thank you very much. I appreciate it.
James M. Jenness
I tell you, we're lucky to have John as our CEO. He's going to be around for a long time, he's doing a great job. I wish somebody have asked him this year what his favorite flavor of Pop-Tarts is, maybe next year, you can work that into the questions.
Okay, thanks, John. Gary, are you ready to report the results of the vote?
Gary H. Pilnick
Jim, the independent judge of election has tabulated the vote and report that all 4 nominees have been reelected Directors to serve a 3-year term, expiring at the company's annual meeting in 2016, each having received at least 94% of the shares voted.
I have been further advised by the independent judge of election that with respect to Proposal 2, the advisory resolution to approve executive compensation, was also approved by approximately 96% of the shares present and entitled to vote.
With respect to Proposal 3, the resolution to approve the Kellogg Company 2013 Long-Term Incentive Plan was approved by approximately 91% of the shares present and entitled to vote.
With respect to Proposal 4, the appointment of PricewaterhouseCoopers LLP as the company's independent registered accounting firm for 2013 was also ratified by our shareowners. And with respect to Proposal 5, the shareowners' proposal concerning the classified board was approved by shareowners. The independent judge of election will furnish a written report of the final vote count, with respect to the matters voted on today which shall be included in the minutes of the meeting.
James M. Jenness
Great. Thanks, Gary. On the basis of the vote of the shareowners of the company, I declare that all 4 nominees for Director are reelected, the executive compensation vote was approved, the Kellogg Company 2013 Long-Term Incentive Plan approved, and the independent auditors were ratified and the shareowner proposal approved.
We would like to express our sincere appreciation to all the shareowners who attended today's meeting as well as those who submitted their proxies but were unable to attend. We would also like -- Kris, would you please stand up? We'd like to thank Kris Charles and her team for organizing and pulling off a great meeting, Kris? Now as there is no other business, this concludes the 91st Annual Kellogg Company Shareholder Meeting. The meeting is adjourned. Thank you very much.
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