Executive Committee - Hass Avocado Board · 2014. 10. 1. · Hass Avocado Board 25212 Marguerite...

Hass Avocado Board 25212 Marguerite Pkwy., Ste. 250 Mission Viejo, CA 92692 Phone: 949-341-3250 hassavocadoboard.com

Executive Committee Conference Call Agenda Monday, August 26, 2019 10:00 a.m. to 10:30 a.m. (PST) Dialing instructions below

10:00 A.M. Call meeting to order

Roll call

Approval of August 7, 2019 meeting minutes

Review and Select Executive Compensation Consultant for the Executive Director

10:30 A.M. Adjourn*

To join the audio conference, please dial phone number and enter access code below:

U.S. – Los Angeles: (213) 226-1066

Access code: 250-508-517#

*Scheduled Adjournment Meeting time can run over schedule in order to complete all agenda items

VISION: HAB IS THE CATALYST FOR FRESH AVOCADOS BEING THE NO. 1 CONSUMED

FRUIT IN THE U.S. AND INDUSTRY STAKEHOLDERS BEING SUCCESSFUL. MISSION: HAB EXISTS TO SUPPORT THE GLOBAL AVOCADO INDUSTRY STAKEHOLDERS IN

OUR COLLECTIVE EFFORTS TOWARD MARKET EXPANSION IN THE U.S.

Executive Committee Conference Call Minutes Wednesday, August 7, 2019 2:30 p.m. (PST)

join.me (213) 226-106 Access Code: 250-508-517#

A conference call meeting of the Hass Avocado Board Executive Committee was held on Wednesday, August 7, 2019 at 2:30 p.m. with the following people in attendance:

COMMITTEE MEMBERS Jorge Hernandez Laurie Luschei Dave Fausset Ben Van Der Kar

GUESTS PRESENT Sue Coleman, USDA Susan Pinkerton Charley Wolk Sergio Chavez STAFF PRESENT Emiliano Escobedo, HAB Silvia Standke, HAB

CALL TO ORDER

Chairman, Jorge Hernandez called the meeting to order at 2:31 p.m. and thanked everyone for attending the meeting. He continued with roll call and established a quorum. The guests were also acknowledged and asked to state their name. He thanked the group for being on the call and asked that the group stick to the rules during the meeting and only speak when called upon by him. APPROVAL OF NOVEMBER 7, 2018 CONFERENCE CALL MINUTES

Mr. Hernandez asked the members if they read through the meeting materials and entertained a motion to approve the conference call minutes for November 7, 2018 as follows: MOTION: The Executive Committee of the Hass Avocado Board approves the November 7, 2019 Executive

Conference Call meeting minutes as presented. (Fausset/Van Der Kar) Laurie Luschei abstained - MSC (Motion Second and Carried)

DISCUSION: Ms. Luschei stated that according to the minutes under the approval of the October 10, 2018 committee meeting minutes, these were going to be revised to include “and subsequent meeting” in the second to last sentence of the paragraph in question; and asked Mr. Escobedo if in fact the minutes were revised to reflect this change. Mr. Escobedo stated that most likely this change was done but will double check. Ms. Luschei continued by asking about the term limits of a board member and alternates as noted in the Nomination Procedures and if that section was from the Act and/or the Order. Ms. Coleman stated that the Act and the Order have the term limits and the Board added the additional policy she was referring to. Ms. Luschei asked about the AD755 form (which is the Background Form) mentioned in the minutes and how it expired on December 31, 2018 and asked if there is a new form. Ms. Coleman stated that the request for a new form was

too late to submit and back in time for elections, but USDA will be able to process and will be available with the new question #10 for next year’s elections. Ms. Luschei asked if the Board already approved the new question #10. Ms. Coleman explained that per her understanding, the Nomination Procedures were submitted to USDA as being a request from the Board that the AD755 form be adjusted to reflect the changes in the Nomination Procedures. Ms. Luschei asked Mr. Escobedo to follow-up with this item and see if the Board approved question #10. Mr. Escobedo will get back to Ms. Luschei. Ms. Luschei continued by asking if the officer position descriptions were finalized and Mr. Escobedo stated that everything in the minutes was put on hold by the previous chair including the board member and chair evaluation. Mr. Van Der Kar also noted a typographical error, which Mr. Escobedo made a note of it. Mr. Hernandez asked if there were any additional comments and then called for a vote. TRANSPARENCY AND ACOUNTABILITY

Mr. Hernandez stated that in the meeting packet Mr. Escobedo provided a recommendation in response to the Board direction during the last meeting in July. He asked if the group read it and is prepared to take action on it. He reminded everyone that the Board directed the Executive Committee to work on and take action in any area that would improve HAB’s transparency and accountability to the public and the board of directors; specifically, looking at board and committee meeting information as well as financial reports and data and to also look at ways to improve member and staff accountability to the Board. He stated that the recommendation is broken into three main areas and continued with a discussion on each one with a vote on them one by one.

Item one - Mr. Hernandez continued with the first item relating to meeting agendas, packets and minutes for HAB meetings and committee meetings. He entertained the following motion:

MOTION: The Executive Committee of the Hass Avocado Board approves the proposal to post all board and committee meeting locations, dates, agendas, packets and minutes on HAB’s website hassavocadoboard.com with the exclusion of closed session minutes and to maintain 2 years’ worth of agendas, packets and minutes for committee meetings on the HAB website. (Fausset/Van Der Kar) MSC

DISCUSSION: Ms. Luschei asked why 2 years’ worth of agendas on the website. Mr. Escobedo explained that just trying to keep it manageable on the website and to avoid creating a library on the website. The agendas can always be requested and provided upon request. Ms. Luschei agreed as long as they are accessible upon request. After some discussion, it was agreed to leave it at 2 years. Mr. Hernandez called for a vote.

Item two – Mr. Hernandez stated that the second item is related to HAB’s business plans, budget and quarterly financial updates and to post on HAB’s website hassavocadoboard.com. Mr. Hernandez entertained the following motion: MOTION: The Executive Committee of the Hass Avocado Board approves the proposal to post on HAB’s website

hassavocadoboard.com the following: • Current year plus prior four years of HAB’s approved annual business plans and budgets and

business plan and budget amendments and HAB’s Quarterly financials and volume reports. • HAB’s monthly check register for a rolling period of 13 months and a monthly profit and loss

report. (Van Der Kar/Luschei) MSC

DISCUSSION: Ms. Luschei stated that having the current budget on the website is helpful but showing the prior years would be helpful too and if Mr. Rumph could post that. Mr. Escobedo to let the Finance Committee decide what the report format should be like and then include that report on the website. Mr. Luschei asked if the check

register will be posted with redactions and why only 13 months will be posted. Mr. Escobedo stated that the check register will be redacted and that he is following CAC’s model timeline of posting information. Ms. Luschei asked if anything that is no longer available on the website would still be made available if requested. Mr. Escobedo said yes. There was no further discussion and Mr. Hernandez called for a vote.

Item three – Mr. Hernandez stated that the third recommendation is related to HAB’s P-Card, report employee expense reports, board and committee member expense reports. He noted that it is fairly long so will be breaking it down into two separate motions; the first one will address the staff and the second one will address the board.

Mr. Hernandez entertained the following motion:

MOTION: The Executive Committee of the Hass Avocado Board approves the proposal to post all approved P-card expense report cover pages and all approved staff expense report cover pages on HAB’s portal (BoardEffect) starting from today’s date onward and to maintain on the portal the current year plus the two prior years of information. Personal Identifiable information will be redacted from all of the above. If at any time the board wants to see the full back-up to any of the reports, the board may request to the USDA or third party auditors the review of such information the board may request to the USDA or third party auditors the review of such information for compliance with existing policy. (Fausset/Van Der Kar) motion amended below

DISCUSSION: Ms. Luschei wants to confirm that the current HAB P-Card is the mastercard and no more american express card. Mr. Escobedo explained that the P-Card that the Board approved in March is currently the MasterCard which is mentioned in the internal controls and accounting procedures. He noted that it is referred to as the P-Card because it could change from a mastercard to a visa. Ms. Luschei stated that she does not agree that if the Board wants backup of the P-Card purchases that they need to go to the USDA or auditors. There was extensive discussion on this item and it was agreed by the group that going through the Finance Committee to make a request would be a good an option. Ms. Luschei then amended her motion to include the Finance Committee as follows: MOTION: The Executive Committee of the Hass Avocado Board approves the proposal to post all approved P-

card expense report cover pages and all approved staff expense report cover pages on HAB’s portal (BoardEffect) starting from today’s date onward and to maintain on the portal the current year plus the two prior years of information. Personal Identifiable information will be redacted from all of the above. If at any time the board wants to see the full back-up to any of the reports, the board or board member may request to the Finance Committee, USDA or third party auditors the review of such information the board may request to the USDA or third party auditors the review of such information for compliance with existing policy. (Luschei/Hernandez) MSC

Mr. Hernandez continued with the next motion as follows: MOTION: The Executive Committee of the Hass Avocado Board approves the proposal to post all approved

Board / Committee Member expense report cover pages on HAB’s portal (BoardEffect) starting from today’s date onward and to maintain on the portal the current year plus the two prior years of information. Personal Identifiable information will be redacted from all of the above. If at any time the board or board member wants to see the full back-up to any of the report cover pages, the board or the board member may request to the Finance Committee, USDA or third party auditors the review of such information for compliance with existing policy. (Luschei/Fausset) MSC

DISCUSSION: Mr. Van Der Kar asked for clarification if this would be exclusive of director or alternates when it refers to board member. Mr. Escobedo stated that it includes alternates. Mr. Hernandez then called for a vote.

Mr. Hernandez entertained the third motion in this category as follows: MOTION: The Executive Committee of the Hass Avocado Board approves the last part of the recommendation

titled redactions and compliance with applicable laws as presented. (Fausset/Van Der Kar) Laurie Luschei abstained - MSC

DISCUSSION: Ms. Luschei stated that her concern regarding redactions for the public under FOIA is the B6, B4 and B3 redaction to the board members, in particular the B6 redaction to the board members. She then gave an example that the avocado purchases should not be redacted under B6. Mr. Escobedo reminded Ms. Luschei that based on the last board meeting that the assessment letter and notification will include a statement that any avocado purchases will not be redacted and that in the future, there will be no redactions from avocado purchases. Ms. Coleman provided an explanation on the B3 and B4 redactions and noted that the avocado purchases fall under B4 redactions under “trade data”. Ms. Luschei continued with her concerns on what can and cannot be redacted and made available to the Board, but is glad that regardless of what it falls under, it will not be an issue based on what Mr. Escobedo just stated. Mr. Escobedo noted that the intention of the recommendation in this motion is based on the requirements by USDA for redacting and to be in compliance. In order for HAB to be able to post the check register it needs to redact and be in compliance with USDA. He noted that it is not from staff that the redactions occur but it is USDA that requires these redactions. Mr. Hernandez stated that during his conversation with Bruce Summers from USDA recently, Mr. Summers offered that USDA will always be very open and will help with the explanation of the redactions. Mr. Escobedo stated that through the Finance Committee, the Board may consider conducting an audit every year on the P-Card expenses for compliance of the policy, of all board member expenses for compliance of the policy and also for staff and then post the audit results on the website. This would be aside from the annual financial audit which is mandatory. There was continued discussion by Ms. Luschei as to the need for all the redactions currently being made by USDA. Ms. Coleman stated that USDA has taken note of these concerns and delivered to the administration. She noted that at this point it is better to over redact than not. She also stated that compared to other boards, most of them are not going through the level of review that HAB is. There was no further discussion and Mr. Hernandez called for a vote. REVIEW AND APPROVE EXECUTIVE COMPENSATION CONSULTANT RFP

Mr. Dave Fausset asked permission to leave the call due to a scheduled flight departing. Mr. Hernandez asked the group if they would like to continue since it is already past the hour. The group agreed and continued with the next agenda item.

Mr. Hernandez referred the group to the meeting packet where a draft request for proposal and a list of compensations consultants is included. He reminded the group that the Board directed the Executive committee to retain a consultant to assist in determining executive compensation and staff compensation and make a recommendation to the Board. Also, the Board approved a budget amendment of $30,000 to cover the cost of this consultant. He asked if the group is prepared to take action on this item and then entertained the following motion:

MOTION: The Executive Committee of the Hass Avocado Board approves the RFP and list of consultants as presented (Van Der Kar/Luschei) MSC

DISCUSSION: Ms. Luschei referred to the document and suggested a change on the wording of gross revenue. Mr. Escobedo will make it clearer. Ms. Luschei asked for clarification on the RFP for a consultant to assist with staff compensation and when did this portion of the RFP get approved. Mr. Escobedo and Mr. Hernandez both stated that this was approved during closed session and announced during the open session of the board

meeting. He continued by reading the motion from that meeting. Mr. Escobedo stated that the consultant and he would work on the staff compensation and the compensation for himself would be with the Executive Compensation Committee and/or the Executive Committee and he would not be involved at all. Ms. Luschei then asked how these consultants were determined. Mr. Escobedo stated that originally the Executive Committee was going to do this last year nothing was done. He explained how he found the consultants that are on the RFP. He did state that if there are any other contacts the committee members have, to please submit to Mr. Rumph so more RFPs can be sent out. He noted that if there is someone on the list that needs to be removed to let him know. Ms. Luschei asked how the consultant will be determined once the proposals are submitted. Mr. Escobedo stated that it was determined that the Executive Committee will be reviewing the proposals and determine the consultant. Ms. Luschei reiterated and asked if Mr. Escobedo knows any of the consultants on the list. Mr. Escobedo stated that he does not know any of them. Mr. Escobedo stated that he will need to revise the date on the RFP because of the timeline, which the goal is to have the consultant have his/her work done by the September Board meeting. It was noted that this is only for the executive director, not staff. Mr. Escobedo stated that as the proposals are received Mr. Rumph will forward them to the committee members in order to meet the deadline. Ms. Luschei suggested that if the committee members have any questions on the proposals, it would be best to communicate with Mr. Hernandez and Mr. Rumph. Mr. Escobedo asked the members if they have any other consultants in mind to send them to Mr. Rumph. Ms. Luschei stated that she has a couple of consultants in mind and will send over to Mr. Rumph. Mr. Van Der Kar suggested a revision to the RFP under Overview and Situation by adding the word “produced” in the second paragraph. He also suggested to reword the full-time and part-time employee language. Mr. Escobedo will make these revisions and noted that it will not change the motion. Mr. Hernandez then called for a vote.

ANNOUNCEMENTS

Mr. Hernandez has a couple of announcements:

First - He has reviewed and approved the 2019 goals for the executive director. His formal review is in September and most of the goals that were presented to the Board in March will remain and a few new ones were added. Mr. Van Der Kar asked if the group will be brought up to speed as to the new executive director goals. Mr. Hernandez said that the group will be updated on the new 2019 executive director goals.

Second - HAB’s Executive Committee Succession Planning and Onboarding policy states that shortly after HAB’s annual meeting and the election of officers, the new Executive Committee shall meet in person with HAB staff and outgoing members of the Executive Committee which they have replaced. Such meeting did not take place this year and having only three months left in this term it doesn’t make sense to have it any more this year. However, for future Executive Committees it is a practice that should not be delayed or overlooked. ADJOURN

Mr. Hernandez thanked everyone for a very fruitful and productive meeting and entertained a motion to adjourn the Executive Committee Meeting at 3:52 p.m.

MOTION: The Executive Committee of the Hass Avocado Board approves Adjournment of the August 7, 2019 Conference call meeting. (Luschei/Van Der Kar) MSC

Respectfully Submitted,

Silvia Standke, HAB Executive Assistant

August 12, 2019

Mr. Robert Rumph

Vice President, Finance,

Hass Avocado Board

25212 Marguerite Parkway, Suite 250

Mission Viejo, CA 92675

Dear Mr. Rumph:

This letter puts forth our proposal to provide compensation consulting advice to your Board of Directors

concerning the remuneration of your Executive Director and to the Executive Director concerning the

compensation and benefits provided to all other Hass Avocado Board employees. We are very interested in

these projects and look forward to the opportunity of working with you.

About SmithPilot

Founded over fifteen years ago, our firm focuses exclusively on compensation and benefits issues in

nonprofit organizations. We believe that no firm provides the depth of experience we have in this area. My

background includes over 35 years of compensation consulting for major organizations (private and public)

throughout the United States. For the past 15 years, my work has focused on nonprofits alone. My partner

and our Chief Executive, Rebecca Pilot, has over 15 years in consulting, focusing primarily on nonprofit

compensation and benefits issues for the past six years. While I will lead this project, both of us will be

actively involved throughout.

Our firm is lean and focused. With low overhead (and an unmatched fee guarantee), we are uniquely

positioned to provide cost-effective consulting to our clients, organizations where budgets are usually tight

and expense control important. Accordingly, we structure our projects to address clients’ issues in the most

efficient way possible.

One step to this efficiency is that we begin each project with a clarification of each client’s compensation

strategy. Our Research Associates are highly capable in determining the range of market values for specific

positions, but the value of this data depends largely on the organization’s philosophy about where pay and

benefits should stand relative to market averages. In the initial phases of each project, we work diligently to

ensure that we understand what makes your organization unique and how specific characteristics of your

organization should affect your compensation policy. Compensation consulting is a blend of art and

science, with emphasis on the art, and your board and executive team cannot determine appropriate

compensation and benefits without understanding and agreeing on the strategic issues involved.

All of our work involves nonprofit organizations throughout the United States. Rebecca and I are assisted

by our Senior Consultant, Leyla Hurt, and three Research Associates. A representative list of our client base

is attached, as well as brief biographies of all of our staff.

Our Approach to this Project

Our first step would be to ensure that we fully understand what makes your organization unique, how you

have approached compensation and benefits in the past, and the particulars concerning compensation and

benefits for the 11 positions shown in your RFP (including the Executive Director). This would include

reviewing information such as strategic plans, financials, your organization chart, position descriptions (if

Mr. Robert Rumph

August 12, 2019

Page 2 of 10

available), current compensation levels for each employee, your current performance and salary review

processes, any existing employment contracts, and your employee benefit programs (including any special

benefits or perquisites such as deferred compensation provided to executives).

This information-gathering process would include one or two teleconferences with you and Mr. Escobedo

to discuss strategic issues such as compensation strategy or philosophy, clearly defining the markets with

which you compete for talent, and identifying and agreeing on the sources of market information to be used

in the studies of both the Executive Director’s compensation and of the other staff. Typical compensation

strategy issues involve questions such as how much you want employee pay to vary based on individual

and/or organization performance, the balance between cash compensation and benefits, where you would

position pay ideally relative to the market, and whether your labor market differs significantly by position.

Answers to these questions will help direct our research and analysis for the two separate phases of this

study, the processes for which are outlined as follows.

Executive Director Review

For the Executive Director review, we assume that we will be reporting directly to the Board Chair, or the

head of whichever board committee is responsible for the annual ED compensation review. Accordingly,

we would begin this phase with a teleconference with that individual (and other board members if

appropriate) to get their input on the study and to understand their views on Mr. Escobedo’s current

compensation and benefits and the annual performance/salary review process.

We would also have a separate phone conversation with Mr. Escobedo to make sure we fully understand his

view on his current compensation and benefits arrangements, and the annual review process.

With this information as the basis for our work, we would then:

1. Determine an appropriate peer group for comparing market compensation, ideally comprised of

associations and advocacy groups with missions and metrics reasonably comparable to your

organization. We recognize that data on compensation on organizations funded primarily by the

government may not be public, but we believe that we can put together a strong peer group from

related 501(c)(3) and 501(c)(6) organizations, which do report compensation publicly.

2. Age the peer group compensation and benefit information obtained from the IRS 990 forms to

project current levels to September 2019 and adjust for regional salary differentials if needed.

3. Prepare tables comparing the value of Mr. Escobedo’s total remuneration (compensation and

benefits) to market levels and showing the range of pay (25th percentile, median, 75th percentile)

that is generally considered reasonable.

4. Supplement the peer group data with information from published compensation surveys, including

those published annually by the American Society of Association Executives, GuideStar, PRM

Consulting, the Economic Research Institute (ERI) and others if necessary.

5. Prepare a report detailing our findings and recommendations on a level of compensation for Mr.

Escobedo that is competitive in the marketplace, reflective of the board’s evaluation of his

performance, and reasonable in terms of both market practice and the concerns that donors,

overseers, and regulator. This report will include our formal opinion on the reasonableness of

Mr. Robert Rumph

August 12, 2019

Page 3 of 10

compensation in terms of the IRS intermediate sanctions regulations, and a review of his existing

employment contract, with any recommended changes thereto.

Assuming that we selected as your consultant by August 26th as in your RFP, we will have this initial report

on Executive Director remuneration to your Board before its September 16th meeting. This report will not

cover the ED’s performance review process, since there isn’t enough time to do this right. This will be

addressed later, when we evaluate the process for reviewing all staff.

Staff Review

Our next step will be to review the compensation and benefits for all remaining staff:

• Executive Assistant

• VP of Finance

• Director of Industry Affairs

• Senior Director of Nutrition

• Director of Marketing & Communications

• Digital Marketing & Communications Manager (located in Colorado)

• Category Data and Research Manager

• Bilingual Content Manager

• Web and Graphic Designer

• Office Assistant (Part-Time)

As with the Executive Director position, we will compare the current total compensation (salary and bonus

if any) for employees in each of these positions with the marketplace, using the peer group where possible

for the executive positions as well as the published compensation surveys mentioned above (which will be

the best source for market data on most of these positions). Our findings will be summarized in a report that

identifies the relative market competitiveness of each position with recommended steps for dealing with any

salaries that are out of the normal market range.

Our report on staff positions will also include our evaluation of the competitiveness of your employee

benefits package (e.g., medical and life insurance, retirement benefits, etc.), with recommendations for any

changes if appropriate.

Finally, the staff report will include a review of the performance review process you are currently using to

evaluate employees and relate pay to performance. If advisable, we will either recommend modifications to

your current system or recommend a new one. Whatever the outcome, our review will include an

assessment of the steps you currently take in conducting the reviews, the criteria used to measure individual

performance, the timing of the performance reviews, the timing of the salary reviews, and the degree to

which salary increases vary based on performance assessments.

The report on staff compensation and the performance review process will be completed by October 30 and

will be directed to Mr. Escobedo.

Executive Director Performance Review

Typically, the process for reviewing the Executive Director’s performance is different from that for staff

employees, since the Board is involved and since at times through a 360 degree review others are involved

as well. Our advice on the staff performance review process may help inform our advice on the ED review

Mr. Robert Rumph

August 12, 2019

Page 4 of 10

process, but we will address this in a separate report to the Board Chair (or Committee Chair). Our starting

point will be the existing review process, but we will use our extensive experience in advising boards on

CEO reviews either to validate your current process or recommend changes.

The report on the ED performance review will also be completed by the end of October.

Our Experience

We have attached a representative list of our clients – all of them nonprofit organizations – and summary

biographies of our staff.

Your RFP asks for our experience in the food/produce industry, federal/state instrumentalities, trade

associations. Personally, I have considerable experience with these types of organizations – for example,

advising the Semiconductor Industry Association, the National Hot Rod Association, Dole Foods, Chiquita

Brands, the Defense Department, the Interior Department, the Department of Homeland Security, and

various state and local governments. I have also provided some limited consulting advice regarding the

compensation of Executive Director of the Wine Institute in San Francisco.

But most this experience will not be directly applicable to you. What is applicable is our experience in

dealing with nonprofits that need to attract highly qualified employees with fair market compensation while

being overseen by government officials and/or directors for whom high compensation can be a red flag.

Here are some examples from clients whom we have served for the past few years:

The Commission on Presidential Debates

This is a nonprofit that oversees and runs the Presidential debates every four years. In a debate year,

their director handles a $6 - $8 million budget and has a combined staff and contractor cohort of

over 200 people. The Commission’s board is a fairly even mix of Republicans and Democrats, all

of whom know that the Commission’s ED’s performance has been outstanding, but any of whom

would be a ripe target for criticism if the pay level is deemed exorbitant. We have been successful

in providing them guidance on compensation that has helped to retain the Executive Director while

being understood as reasonable by the Board.

Our work for the debate commission has been coordinated through their outside counsel, Lew Loss,

who has been deeply involved in all the discussions and reports throughout our work with them.

Lew can be reached at [email protected] or 202-778-4060.

Los Angeles Cleantech Incubator (LACI)

This is a relatively new client for us where a relatively new Executive Director inherited an unusual

compensation program in serious need of revision. The organization’s funding includes significant

government grants and the reasonableness of compensation is a serious issue. We have been

working with them to come up with new approaches that will enable them to continue to attract and

retain highly qualified staff.

Our main contact at LACI is Anastasia Maier, their General Counsel. [email protected];

213-358-6500 (main number).

Interstate Commission on the Potomac River Basin (ICPRB)

Mr. Robert Rumph

August 12, 2019

Page 5 of 10

This organization is overseen by board members representing the District of Columbia and the

States of Maryland and Virginia. Before we became involved, there was very little agreement

among board members about compensation strategy and levels, especially for senior staff. Our

work resolved these problems.

Our primary contact at ICPRB is Bo Park, their Director of Administration. She can be reached at

[email protected] or 301-274-8100 extension 101.

Staffing and Timing

As stated above, I will manage this project and be actively involved in all phases, assisted by my partner

Rebecca Pilot, by our Senior Consultant Leyla Hurt, and by our Research Associates.

The first phase (review of the Executive Director’s compensation) of the project will be completed before

September 15, 2019 but will require a start date no later than August 26th. The other phases will be

completed by October 30, 2019.

Fees

Done correctly, we do not believe that this project should require what you have budgeted. We estimate that

our total consulting fees will range from $20,500 to $25,500, as follows:

Executive Director remuneration review and report: $6,000 to $7,500

Staff compensation and benefits review and report: $7,500 to $9,000

Staff performance appraisal system recommendations: $4,000 to $5,000

Executive Director performance appraisal process: $3,000 to $4,000

We invoice monthly, based on the time spent by our associates during the month. My billing rate is $500

per hour; Rebecca Pilot’s is $350 per hour; Leyla Hurt’s is $250 per hour; and our Research Associates are

billed at $150 to $175 per hour. These rates will not change throughout the work described above.

Other than a one-time $500 fee that we charge all new clients for access to our extensive library of

compensation surveys, there will be no expenses associated with this project. As stated above, payment of

our invoices is dependent on your full satisfaction with our work.

We hope that this proposal responds fully to your request; please let us know if you have any questions or

need more information. We look forward to the opportunity of working with you.

Sincerely,

Pete Smith, Founding Partner

703-901-6887

[email protected]

Mr. Robert Rumph

August 12, 2019

Page 6 of 10

Representative Smith Pilot Clients American Academy of Otolaryngic Allergy, Reston, VA American Ireland Fund, Boston, MA Arbor Day Foundation, Lincoln, NE Attorney General of Massachusetts Brooklyn Law School, Brooklyn, NY Car Donation Foundation, St Louis Park, MN Carleton College, Carleton, MM Casey Family Programs, Seattle, WA Catholic Leadership Institute, Wayne, PA Center for Economic Progress, Chicago, IL Center for Financial Services Innovation, Chicago, IL Center for Law & Social Policy, Washington, DC Certified Financial Planner Board of Standards, Washington, DC Commission on Presidential Debates, Washington, DC Community Foundation for Southeast Michigan, Detroit, MI Danville Regional Foundation, Danville, VA Disability Rights California, Sacramento, CA Earth Innovation Institute, San Francisco, CA Foundations for Laity Renewal, Kerrville, TX Greater Boston Food Bank, Boston, MA Green Building Initiative, Washington, DC Housing Assistance Council, Washington, DC Holton Arms School, Potomac, MD Interstate Commission on the Potomac River Basin, Rockville, MD Irish Arts Center, New York, NY Independent Sector, Washington, DC League of Conservation Voters, Washington, DC Lighthouse for the Blind and Visually Impaired, San Francisco, CA National Commission on Certification of Physician Assistants, Johns Creek, GA National Hot Rod Association, Glendale, CA National Senior Campuses, Baltimore, MD New York Public Radio, New York, NY Peninsula Humane Society, San Mateo, CA Physician Assistant Education Association, Washington, DC Sandy Hook Promise, Newtown, CT Semiconductor Industry Association, Washington, DC Simply Secure, Mountain View, CA Southeast Alabama Medical Center, Dothan, AL The ARC of the US, Washington, DC The Community House, Birmingham, MN The Summit Foundation, Washington, DC Walt Disney Family Museum, San Francisco, CA Washington Jesuit Academy, Washington, DC Year Up, Boston, MA

Mr. Robert Rumph

August 12, 2019

Page 7 of 10

A.W. (Pete) Smith, Jr. Founding Partner The former chief executive of Watson Wyatt Worldwide (now Willis Towers Watson), Pete Smith has significant experience in both the private and public sectors. Mr. Smith now focuses on executive compensation consulting services to a broad range of clients, primarily in the non-profit sector. In his thirty-year career with Watson Wyatt, Mr. Smith consulted in areas ranging from executive compensation and benefits design to global human resources strategy. His clients included major Fortune 100 corporations, start-ups, technology firms, multinationals, professional services firms, family held businesses, and nonprofits. Mr. Smith joined Wyatt in Boston in 1968 as a compensation consultant. In 1972, he was named Executive Vice President of Cole Surveys, then the leading provider of financial institution compensation survey data. In 1985, he was appointed Managing Partner of Wyatt’s San Francisco office. He was appointed to the Board of Directors in 1986, as Wyatt’s Global Compensation Practice Director in 1987, and as Managing Partner of the Washington, D.C. office (the firm’s largest) in 1992. In 1993, he was elected President & CEO. During his tenure, he engineered a major transformation of the firm, strengthening its focus, improving its financial results, and substantially extending its worldwide operations – including combining Wyatt with R. Watson & Sons to form Watson Wyatt Worldwide. The firm merged in 2010 to form Towers Watson and in 2016 to form Willis Towers Watson. A graduate of Harvard and a certified member of the National Association of Corporate Directors, Mr. Smith served for eight years on the Board of Alliance Bernstein, a New York based asset management firm. He has also served on the boards ADDX Corporation, Celerant Government Services, Inc., and the Mid-Atlantic Permanente Medical Group. Active in civic affairs, he currently chairs the board of directors at the Friends of the National Zoo. In the past, he served on the boards of the Association of Management Consulting Firms, Compass, the National Rehabilitation Hospital, the Washington Performing Arts Society, American University, and the Community Foundation of the National Capital Area. He also served on the Independent Review Committee evaluating governance problems at the Smithsonian Institution, and as a special adviser to the Coalition Provisional Authority in Baghdad in 2003, designing a new compensation program for the government of Iraq. More information can be found at www.smithpilot.com and on our blog, www.smithpilot.com/blog.

Mr. Robert Rumph

August 12, 2019

Page 8 of 10

Rebecca Pilot President & CEO A human-resources professional with over twenty years of experience in consulting to private and nonprofit organizations, Rebecca Pilot is the President and Chief Executive Officer of SmithPilot. In addition to leading the firm, she directs a variety of client engagements involving nonprofit compensation and benefits issues. Prior to joining Smith Pilot, Ms. Pilot served as human resources director for a variety of nonprofit organizations, leading the human resources function for these nonprofits as well as designing and implementing new programs as necessary. Ms. Pilot’s experience also includes ten years of service as a consultant in Accenture’s human resources department, where she advised executives on a wide variety of issues including staffing, leadership development, compensation planning, performance management, succession planning, and diversity. Prior to her tenure with Accenture, Ms. Pilot managed the graduate student programs for the School of Foreign Service at Georgetown University, overseeing student services for graduate and alumni programs. Ms. Pilot is a graduate of Georgetown University (Master of Arts in Communication, Culture, and Technology) and Lafayette College (Bachelor of Arts in International Affairs and German). Active in school and community affairs, she and her husband and their three children live in the Washington DC area. Leyla Hurt Senior Consultant A compensation and human resources professional with over twenty years of experience working in a variety of industries including consulting, professional services, telecommunications and technology. Prior to joining SmithPilot, Ms. Hurt served as the primary compensation consultant at TPO, Inc. where she conducted compensation studies for a variety of nonprofit organizations. These studies included working with executives and board members in order to ensure fair pay practices, developing salary structures and providing recommendations on compensation program implementation. Ms. Hurt’s experience also includes over ten years of service as a senior human resources manager at NII Holdings (Nextel International) where she managed compensation committee reporting and analysis at NII Holdings (Nextel International). Ms. Hurt analyzed executive compensation, managed short-term and long-term incentives and oversaw global compensation

Mr. Robert Rumph

August 12, 2019

Page 9 of 10

programs. In addition to compensation work, Ms. Hurt was a member of the human resources department, where she advised executives on a wide variety of issues including staffing, compliance, employee relations, and performance management. Ms. Hurt is a graduate of George Washington University (Master of Business Administration) and the University of Virginia (Bachelor of Arts in Economics). Active in school affairs and an avid sports fan, she and her husband and their two boys live in the Washington DC area. Amy Letonja Research Associate Amy Letonja provides research and data analysis support on a variety of compensation issues. Amy’s work experience includes nine years of management positions with the Advisory Board Company, where she previously was an Associate Director overseeing the publication teams and managing the resources of the Design Strategies and Solutions department. Amy’s experience includes managing personnel, oversight of a $3 million procurement budget, and extensive leadership training. Amy was elected to participate in the Advisory Board Fellowship in 2011. In addition to prior management positions at ABC, Amy previously worked at TTSS Interactive Products as a Marketing Assistant, at the Artisans as a Retail Associate, and at the Nantucket Island School of Design & the Arts as a Program Assistant. Amy is a graduate of Hamilton College in Clinton, New York with a Comparative Literature major and Studio Arts minor. Proficient in Spanish, her education includes semesters in Rome and Madrid. She provides volunteer services to a number of nonprofits in the Washington DC area. Eileen Prophett Research Associate Eileen Prophett has over ten years of experience working in strategic marketing and brand management in the private sector. Her experience includes writing strategic marketing plans, managing the research and cross-functional teams for new product development. In addition, Eileen was selected by Compass in Washington D.C. to provide pro bono strategic marketing consulting to local non-profits. Eileen has her Masters of Business Administration from The Fuqua School of Business at Duke University and her Bachelor of Business Administration from The College of William & Mary. She was a founding member of Amy’s Army; a local non-profit created to provide financial assistance to those in the community battling cancer. Eileen continues to actively provide volunteer services to non-profits in the Northern Virginia area through her membership with the Youth Men’s Service League-Vienna & Oakton; a mother/son volunteer organization. She also donates her time with various school and sports organizations in Northern Virginia, where she resides with her husband and their three children.

Mr. Robert Rumph

August 12, 2019

Page 10 of 10

Beth Rollison Research Associate Beth Rollison provides a variety of research and data analysis services on client projects.

A graduate of the Georgia Institute of Technology (Master of Science in Health Systems and Bachelor of Industrial Engineering), Beth’s work experience includes extensive professional experience in management consulting, IT implementation and support, process improvement, and data analysis. During her career, she has worked at Medical Management Associates, Cap Gemini Ernst & Young, Kaiser Permanente, and Valley Health.

Active in the community, Beth has a special interest in organizations dedicated to improving community health and wellness. An artist involved in the local community art scene, she lives in Northern Virginia with her husband and son.

Aon Consulting | Talent, Rewards & Performance Proprietary and Confidential

Risk. Reinsurance. Human Resources.

Proposal for Compensation and Performance Evaluation Services

Haas Avocado Board

August 19, 2019

Aon Consulting Proprietary and Confidential

HAB Proposal 2

Mr. Robert Rumph Vice President of Finance Haas Avocado Board 25212 Marguerite Parkway, Suite 250 Mission Viejo, CA 92692 Via E Mail Dear Mr. Rumph,

Aon is pleased to submit our proposal to partner with the Haas Avocado Board (HAB) to provide compensation and performance evaluation services. This letter details our approach, and estimated fees for the requested consulting services. We recognize the importance of this initiative and hope, through our proposal, and future meetings with us, you will recognize the advantages of partnering with us. While our proposal addresses the specifics of your request, we would like to highlight a few compelling reasons we believe we are the right partner for the HAB:

A Focus on the Client: We focus on what makes the HAB unique. We start with a perspective that the HAB, as a caring and dedicated organization, wants to stand out from its competitors. Our consulting process starts from a study of your unique business and human capital strategy, an understanding of the non-profit industry dynamics and the implications for talent, and a focus on delivering an approach that best meets your needs by integrating best fit with best practice.

Critical Perspective and Experience: The consulting team selected for this project consists of executive and rewards compensation experts with deep expertise. Our team brings a wealth of experience in the non-profit as well as a broad range of other industries, to ensure the HAB will benefit from both a deep understanding of current practices within your industry as well as our knowledge of applicable best practices emerging in other industries.

The Deepest Benchmarking Data: We maintain the industry’s broadest and deepest resources for measuring and benchmarking compensation and benefits practices and design elements. We have the largest, private, global database of cross-industry compensation. Aon’s proprietary compensation databases and tools allow us to measure and integrate compensation market data from multiple sources.

Process and Project Management: The ability to gather and synthesize data to form meaningful insights and recommendations, work collaboratively with client teams, be appropriately persuasive, and keep a design project on track is critical. Your Aon team has a track record of leading projects of similar scope, outcomes, and complexity that required adaptability, creativity, and efficiency to deliver high-quality results on time and on budget.

We look forward to the opportunity to discuss our proposal with the HAB.

Sincerely,

Patricia Szoeke Associate Partner Aon, PLC cc: Mr. Matthew Sand, Aon


HAB Proposal 3

About Aon

Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement, and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. Aon plc is headquartered in London, U.K., and the primary United States office is located in Chicago, IL.

We empower organizations and individuals to secure a better future through innovative retirement, health, and talent solutions. We advise and design a wide range of solutions that enable our clients’ success. Our teams of experts help clients navigate the risks and opportunities to optimize financial security; redefine health solutions for greater choice, affordability, and wellbeing; and achieve sustainable growth by driving business performance through people performance. Every day around the world our colleagues are working to empower results for our clients.

Our Approach to Compensation Consulting

Aon has a long history of working as an independent advisor and valuation expert with some of the most prestigious and largest non-profit organizations in the United States. Over the last five years, Aon has worked with more than 200 tax-exempt organizations, ranging from associations, large universities, private colleges, health care systems, fundraising organizations, and other similar entities. In most, we have provided similar compensation services.

We are a recognized leader in the process and governance aspects of leadership and highly compensated employees. We have in-depth expertise in well-designed governance practices and procedures, meeting the highest standards of both public and private companies, as well as for-profit and not-for-profit organizations. This means that our work is focused on the highest, differentiated standards of practice that have a positive impact on organizational performance.

Our approach to compensation consulting is rooted in a solid business understanding, technical and analytical sophistication, and unparalleled global data to develop tailored solutions that work for our clients. Our expertise in tax, regulatory compliance, corporate governance, plan design, and competitive intelligence enables us to design custom solutions that add value to our clients’ businesses, motivate plan participants, and represent “best-in-class” programs that will be positively received by various constituencies involved with executive pay.

We believe that successful compensation and governance practices must be effective, complete, and produce cost-effective solutions to business problems. We ensure that your pay programs are aligned with your business goals, effective, and competitive—yet simple enough to be clearly communicated, understood, and administered.


HAB Proposal 4

Proposed Approach for the HAB

The approach outlined below is based on our current understanding of the scope of services you’re requesting. As always, we welcome your feedback and will modify these steps as needed at the request of the HAB.

Executive Compensation To assist the HAB with determining the executive compensation package for this year’s annual review (scheduled for September 12, 2019) and performance evaluation process, we propose the approach outlined below.

Aon will conduct a market analysis of the compensation of the following the five executive positions:

1. Executive Director

2. VP of Finance

3. Director of Industry Affairs

4. Senior Director of Nutrition

5. Director of Marketing & Communications

Our approach to assessing the competitiveness of compensation at organizations is based on proven methodology and access to robust market data. We base our analysis of the market on our library of public and private data sources, supplemented by our experience in the industry. We will define the competitive market for the five executive positions by looking at market data from Aon’s proprietary Total Compensation MeasurementTM (TCM) database, which covers all major pay elements and provides unparalleled and comprehensive data covering both plan design and pay amounts for the for-profit market.

We understand the need to leverage additional survey sources beyond Aon’s TCM database to define the clearest picture of market compensation available; therefore, we supplement data from the TCM database with external market surveys (as applicable) to offer our clients an unbiased review of all market compensation.

Some of the data sources available to us and that may be applicable for the HAB are shown below. (Note: Some sources may be private and must be provided by the client for use).

Overview of Market Data Sources

Non-profit survey sources

Guidestar: National Nonprofit Compensation Report

PRM Consulting, Inc.: Management Compensation Report in Nonprofit Organizations

Total Compensation Solutions: Nonprofit Compensation Survey

Council on Foundations: Grantmakers Salary and Benefits Report

For-profit survey sources

Mercer: Executive Compensation Survey

Willis Towers Watson: Survey on Top Management


HAB Proposal 5

Optional Custom Peer Group Development and Analysis

Another possible source of market data for the executive positions is compensation data from public disclosures of a custom group of organizations viewed as peers of the HAB. At this point, we have not included development of a custom peer group or inclusion of compensation data from a custom peer group in the proposed scope of services or estimated fees. However, we would be happy to discuss inclusion of a custom peer group in the scope of services if the HAB wishes to consider this option in analysis of the five executive positions.

We will calculate the estimated market values for base salary and total cash (base salary + annual incentives) at the 25th, 50th (median), and 75th percentiles for the five executive positions.

We will draft a report that identifies where each executive’s compensation falls in relation to the respective competitive market and instances where the HAB may want to consider a market adjustment to bring the executive’s pay more in line with the competitive market and/or the HAB’s target market positioning / compensation philosophy. The report will also outline the methodology used to identify the competitive market for each position and note any key observations / findings noted during the analysis.

Aon will provide you with the draft report to review and, upon request, conduct a one-hour meeting via teleconference to discuss it with you. Following the meeting, we will make changes as appropriate and plan for up to one additional recycle, after which the report and underlying market data will be considered finalized.

We will facilitate a discussion with the HAB regarding the performance evaluation process and its impact on the decision-making process for merit adjustments (which are distinctive from the market adjustments noted in the report). This discussion can be held either during the one-hour meeting to discuss the draft report or during a separate one-hour teleconference with the Aon team. Results from the market analysis can inform the discussion of the performance evaluation process, but active participation and input from the HAB team members are key factors to the success of this phase of the engagement.

Timing

To meet the deadlines listed in the RFP, it is important that the HAB provide us with information about the scope of responsibilities for the five executive positions (e.g., job descriptions, organizational charts) as soon as possible following award of the engagement. We also ask that any input from and reviews conducted by the HAB be performed in a timely manner, so that the report can be finalized in time for the September 12, 2019, meeting of the HAB.


HAB Proposal 6

Staff Compensation To assist the Executive Director with determining and evaluating staff compensation and with the performance evaluation process prior to the end of 2019, we propose the following approach:

Aon will conduct a market analysis of the compensation of the following the six executive positions:

1. Digital Marketing & Communications Manager

2. Category Data and Research Manager

3. Bilingual Content Manager

4. Web & Graphic Designer

5. Executive Assistant

6. Office Assistant (part-time)

Our approach to assessing the competitiveness of staff compensation is similar to the process we take to assessing executive compensation. We apply a proven methodology for determining the competitive market for the staff positions, using our access to robust market data. Where possible, we will incorporate market data from the same market data surveys used in the executive compensation analysis, ensuring consistency of sources. However, we also anticipate the possibility of supplementing these data sources with surveys focused on staff positions. Aon’s library of market surveys contains a number of surveys that address compensation practices for staff-level positions.

We will calculate the estimated market values for base salary and total cash (base salary + annual incentives) at the 25th, 50th (median), and 75th percentiles for the six staff positions.

We will draft a report that identifies where each staff’s compensation falls in relation to the respective competitive market and instances where the HAB may want to consider a market adjustment to bring the staff position’s pay more in line with the competitive market and/or the HAB’s target market positioning / compensation philosophy. The report will also outline the methodology used to identify the competitive market for each position and note any key observations / findings noted during the analysis.

Aon will provide you with the draft report to review and, upon request, conduct a one-hour meeting via teleconference to discuss it with you. Following the meeting, we will make changes as appropriate and plan for up to one additional recycle, after which the report and underlying market data will be considered finalized.

We will facilitate a discussion with the HAB regarding the performance evaluation process and its impact on the decision-making process for merit adjustments (which are distinctive from the market adjustments noted in the report). This discussion can be held either during the one-hour meeting to discuss the draft report or during a separate one-hour teleconference with the Aon team.

Timing

To facilitate meeting the deadlines listed in the RFP, all activities related to the staff positions will be conducted following the September 12, 2019, meeting of the HAB.


HAB Proposal 7

Your Aon Team

We are committed to responsiveness and delivering on our commitments. Our client teams are formed and staffed in accordance with your needs and expectations, drawing from our large contingent of highly talented and dedicated consultants.

We staff each engagement based on the best talent for our clients’ needs—we bring the right specialists to you. In addition to Patricia and Matt named below, they will be supported by additional professionals and analysts as needed throughout the project.

Patricia Szoeke—Engagement Leader

Patricia is an Associate Partner in Aon’s Rewards Practice, focusing on executive compensation consulting. With over 18 years’ experience in the design of compensation and benefits programs, she has worked with domestic and international companies across a variety of industries, with a focus on executive compensation arrangements, fringe benefits, and employee benefit programs.

Patricia has been a member of Aon’s Rewards Practice for over six years, working primarily with non-profit organizations on compensation and governance matters. She works with non-profit and for-profit organizations to deliver strategic advice on executive and Board compensation, including market practice, external benchmarking, assessment of reasonableness, incentive compensation plan design, taxation considerations, and corporate governance and disclosures.

Prior to joining Aon, Patricia worked in the U.S. and Australian offices of a Big Four accounting firm as part of their global Human Capital practice. She also worked for a Washington, DC law firm, where she focused on the taxation of employee compensation and benefits arrangements.

Patricia received her B.A. from Tufts University, and her J.D. from The University of Texas School of Law.

Her current hourly rate is $536.

Matthew Sand—Engagement Manager Matt is an Associate Director in Aon’s Rewards Practice, focusing on executive compensation consulting. With over 10 years’ experience in the design of compensation and benefits programs, he has worked with a wide range of public, private, and tax-exempt organizations.

Matt has been a member of Aon’s Rewards Practice for over eight years, working primarily in the areas of benchmarking, comparator group design, and incentive plan design for executive and Board compensation. Prior to joining Aon, Matt worked in for Buck Consultants in a similar role.

Matt received his B.S. from the University of Illinois.

His current hourly rate is $428.


HAB Proposal 8

Our Clients

The table below provides a listing of non-profit clients for whom Aon provides services.

Non-Profit Clients

ACT (Standardized Testing Organization)

American Association of Insurance Services

American Benefits Council

American Medical Association

Argentum (Insurance Industry Trade Association)

Baptist Health

Baptist Memorial Health Care

Bluestem Health

Chapters Health System, Inc.

CHRISTUS Health

Claremont McKenna College

College of American Pathologists

Citrus Valley Health Partners

Community Health Network

Foundation for a Healthy St. Petersburg

Emanate (formerly Citrus Valley Health Partners)

Froedtert Health

HonorHealth

Housing Alternative Development Company

Klamath River Renewal Corporation

LCMC Health, Inc.

Northwestern Medicine

Northshore University Health System

Ohio State University Health

Partners Cooperative, Inc.

Phoenix Children’s Hospital

Professional Contract Services, Inc.

Rhode Island School of Design

SantaFe HealthCare, Inc.

Savannah College of Art and Design

St. Jude Children's Research Hospital/ALSAC

Stratum Health System

The Andrew W. Mellon Foundation

The University of Chicago Medical Center

Vitalant (formerly Blood Systems)

Yakima Valley Farm Workers Clinic


HAB Proposal 9

Client References

Organization Engagement Summary Client Contact

SantaFe HealthCare, Inc.

(2012 to Current)

SantaFe HealthCare, Inc. is a non-profit organization comprised of a health plan, senior living facilities, and hospice care facilities.

Aon serves as the executive and staff compensation consultant to the organization, providing a full range of compensation consulting (e.g., Board and executive market analysis, compensation reasonableness assessments, market adjustment assessments, incentive plan design, ad hoc analyses). Patricia Szoeke serves as the Board’s compensation consultant.

Ms. Christine Shipley

SVP, Human Resources

Emanate Health

(2016 to current)

Emanate Health (formerly Citrus Valley Health Partners), non- profit system made up of three hospitals and number of outpatient centers.

Aon provides ongoing executive compensation consulting services for Emanate. Aon has assisted Emanate with the development of comparator group and the design of a long-term incentive plan. Matt is a primary team member that serves as the Board’s compensation consultant.

Mr. Ryan Burke

Chief Human Resources Officer

Contact information for our clients can be provided upon request.


HAB Proposal 10

Estimate of Professional Fees

We determine our professional fees based on the time required by our team to complete the work requested, taking into account Aon’s standard billing rates and the value of our services based on our time, complexity, and the level of skill and urgency required, unless we agree to a different arrangement.

An estimate of our fees for the approach outlined in this proposal is listed below:

Activity Estimated Fees

Executive Compensation

Market analysis of five executive positions

Analysis of base salary and total cash (base salary + annual incentives)

Market data sourced from Aon’s TCM database and library of external market surveys; custom peer group analysis excluded from the scope of services

Identification of each executive position’s market positioning by compensation element, instances where the HAB may want to consider market adjustments, methodology, and key observations / findings

Development of a draft report and up to one round of revisions / recycle

Finalization of report

Facilitation of a one-hour discussion with the HAB regarding the performance evaluation process and its relationship to merit adjustments

$15,000 to $17,500

Staff Compensation

Market analysis of six staff positions

Analysis of base salary and total cash (base salary + annual incentives)

Market data sourced from Aon’s TCM database and library of external market surveys; custom peer group analysis excluded from the scope of services

Identification of each staff position’s market positioning by compensation element, instances where the HAB may want to consider market adjustments, methodology, and key observations / findings

Development of a draft report and up to one round of revisions / recycle

Finalization of report

Facilitation of a one-hour discussion with the HAB regarding the performance evaluation process and its relationship to merit adjustments

$10,000 to $11,000

Total Estimated Fees $25,000 to $28,500


HAB Proposal 11

In addition to the professional consulting fees, the HAB is responsible for travel-related expenses, any out-of-pocket expenses Aon has incurred on your behalf, outside delivery services such as shipping, express mail, and messenger services, and any and all taxes applicable for which it is liable. In addition to the professional fees and reimbursable expenses, Aon applies a standard 7% charge for miscellaneous expenses not directly allocable to each client (such as telephone, copying, faxes, internal communication networks, and databases) which is added to all professional fees.

We will invoice the HAB as the assignment progresses. Payment is due within 30 days of the invoice date. We request that client kindly notify Aon of any questions regarding invoices so that Aon may expect timely payment. Interest on late payments will be assessed at 9% per annum.

Changes in the services or additional projects may also be included as part of this engagement, as agreed to in writing or email by the parties. Unless otherwise set forth in such writing, our fees for other projects will be determined on a time and materials basis in accordance with Aon’s then current billing rates and the value of our services based on our time, complexity, and the level of skill and urgency required. We expect the average hourly rate of such services to be between approximately $400 and $550. We will discuss estimated fees in more detail and provide a written estimate for larger projects and gain your approval before proceeding.

Copyright © 2019 by The Segal Group, Inc. All rights reserved. 8892907v1/02716.017

Hass Avocado Board

PROPOSAL FOR EXECUTIVE COMPENSATION AND BENCHMARKING CONSULTING SERVICES

August 19, 2019

Sal DiFonzo, CCP, CBP, CSCP Vice President T 602-381-4074 [email protected]

mailto:[email protected]

1230 West Washington Street Suite 501 Tempe, AZ 85281-1248 T 602.381.4000 www.sibson.com

Sal DiFonzo Vice President, Performance and Rewards Practice [email protected]

Strategic HR Consulting. Member of The Segal Group. Offices throughout the United States and Canada

Founding Member of the Multinational Group of Actuaries and Consultants, a global affiliation of independent firms

August 19, 2019

Robert Rumph

Vice President of Finance

Hass Avocado Board

25212 Marguerite Parkway, Suite 250

Mission Viejo, CA 92692

Re: Executive Compensation Consulting Services

Dear Robert:

Thank you for the opportunity to propose on executive compensation and benchmarking services

to the Hass Avocado Board (“HAB”). In the following material, Sibson Consulting (“Sibson”)

describes how we would collaborate with you to conduct a competitive market assessment of

total compensation, including base salary, variable pay and deferred compensation, for

designated executive positions and serve as the executive compensation consultant to

management, the Board of Directors, and the Compensation Committee.

With our experience in executive compensation, the non-profit sector, and the food industry,

Sibson is qualified to perform the work your request for proposal specifies. In addition, I would

be negligent if I did not mention that I am a fan of the delicious Hass avocado. My family’s

favorite way to serve a Hass avocado is to cut it in half, fill the seed cavity on each side with

small shrimp, and top with lemon juice and salsa. We appreciate your consideration of Sibson to

collaborate with you on this important study.

Sincerely,

Sal DiFonzo, CCP, CBP, CSCP

Vice President, Western Region

Performance and Rewards Practice

i

Ta b l e o f C o n t e n t s

Executive Compensation Consulting Services

Introduction ........................................................................................................................... 2

Suggested Project Approach and Work Steps ..................................................................... 3

Project Team ......................................................................................................................... 5

Professional Arrangements ................................................................................................... 8

About Sibson Consulting and References ............................................................................ 9

2

Introduction

Our Understanding of the Work and Project Scope

In setting forth our suggested approach, it is important we confirm the background and context

for this engagement. It is our understanding that:

The Board of Directors will meet on September 12, 2019 to evaluate the performance and

compensation of the Executive Director. The incumbent operates under an annual contract,

and he has been in position since 2012.

From 2012 to 2019, HAB revenues have increased from $38 million to $62 million, and the

annual budget has increased from $6.2 million to $9.6 million.

HAB would like to engage a third party in conducting this year’s executive compensation

review.

The scope would include 10 other executive and non-executive positions to benchmark

before December 31, 2019.

Market analysis for the Executive Director will include an IRS Form 990 assessment that will

benchmark multiple components of executive compensation including:

Base salary

Variable pay (bonus and incentives)

Retirement / deferred compensation benefits

Benefits and perquisites

The Executive Director and other positions will also be benchmarked using published survey

sources, whose data will include base salaries and total cash compensation (base salary +

bonus/incentive). If available, Sibson will use surveys currently owned by HAB, but will also

supplement those sources with the Sibson survey library as well.

Additionally, if selected as HAB’s ongoing executive compensation consultant, Sibson

would be pleased to provide additional guidance on executive compensation as needed and

requested Potential services include:

Attendance at appropriate Board/Committee meetings

Review of executive contracts/employment agreements

Incentive plan guidance

Market trend updates to the Board

Additional analyses, as needed

3

Suggested Project Approach and Work Steps

Work Step Details

1. Data Collection and Review

Our data review provides the necessary background and context on HAB and its compensation programs to conduct the engagement. It includes (but is not limited to) the following information: Organizational charts Descriptions of executive roles and responsibilities Current and historical executive compensation data, including base salary,

incentives, and any supplemental benefits and perquisites Any executive contracts or employment agreements Executive compensation philosophy (if documented) Current executive compensation peer group and supporting rationale Incentive plan documents or communications (if any) Any additional pertinent executive compensation information

2. Stakeholder Interviews

Interviews with the Executive Director and key Compensation Committee members (2-3 interviews) covering the following topics: Organizational structure and strategic plan Pay philosophy and approach Comparison organizations for compensation benchmarking (for Executive

Director) Roles, responsibilities, and accountabilities for positions to be included in the

study Perspectives on current pay program effectiveness and on future pay designs

3. Total Compensation Strategy (Optional and would be completed after Executive Director review)

Conduct interviews with additional executives and Board members (5 – 6 additional interviews) to understand perspectives on current pay program effectiveness and any desired changes. Develop a total compensation strategy for executives, including: Role of compensation in the total rewards value proposition Define the compensation vehicles and purpose/objectives Comparison markets and the rationale for the peer group Desired pay positioning against the peer group Role of performance in compensation decisions, including determination of

metrics and goal setting Program administration Communication/transparency

4

Work Step Details

4. Peer Group Development

Work with HAB to define the comparison group of peer organizations. We typically recommend groups include 20 – 30 organizations such that there is a sufficient sample size to assess market practice. When developing compensation peer groups, we often review the following criteria: Operating model and industry (e.g., non-profit, food industry, produce

industry, etc.) Operating budget and revenues Scope of services Number of employees Geographic location Other factors as appropriate

5. Competitive Benchmarking

We will benchmark total compensation to the market. Data will come primarily from: 1. Custom Study of Comparison Organizations for the Executive

Director: Benchmark the Executive Director against HAB’s peer group using the latest available IRS Form 990 filings. Pay components include: salary, bonus and incentives, other compensation, retirement/deferred compensation, and non-taxable benefits.

Data gathered from the IRS Form 990s should be considered the primary data source, as it recognizes elements of total compensation, rather than just base salary, and comes from an identifiable group of organizations. To the extent IRS Form 990 data is not sufficient, we will supplement our study with published survey data. 2. Published Survey Analysis: For the remainder of the executive and other

roles, benchmark against a broader group of organizations. Peer matches will reflect reasonable and appropriate comparison markets for talent and we will work with HAB to confirm appropriate data sources and scope cuts.

For the published survey analysis, Sibson’s philosophy is to match jobs and leverage data from multiple sources. Using a variety of data contributes to a more holistic and reliable market analysis and provides insight on the ranges of pay opportunity in the market.

6. Assessment Report

We will develop a report of findings and recommendations summarizing the following: Study objectives and methodology Results of the competitive benchmarking, in aggregate, and by position,

including an examination of all components of pay We will present our analysis and findings to the Board and to the Executive Director, as appropriate.

5

Project Team

Sal DiFonzo, Vice President, will serve as client relationship manager, responsible for overall

client satisfaction. Sibson tenure is 1.5 years.

David Ko, Consultant, will be responsible for the overall day-to-day project administration and

management, ensuring project execution. Sibson tenure is 4 years.

SAL DIFONZO, CCP, CBP, CSCP

Vice President

Expertise

Mr. DiFonzo is a Vice President in Sibson’s Phoenix office. He has more than 20 years of

experience in compensation assessment, design and implementation. Areas of expertise include

compensation strategy, broad-based incentive compensation, executive compensation and sales

compensation. Mr. DiFonzo specializes in incentive compensation design and assists

organizations with converting from wholly discretionary programs to structured incentive

programs. His work also includes assisting organizational leaders with ownership

transition/management succession through the creation of long-term incentive programs.

Mr. DiFonzo assists clients in all industries but has worked in many sectors, including

engineering and construction, high technology, pharmaceuticals, biotech, medical devices,

manufacturing, telecommunications, aerospace, financial services and banking.

Professional Background

Prior to joining Sibson, Mr. DiFonzo was Managing Director of the compensation business unit

of FMI Corporation, a firm that provides management consulting and investment banking

services to the engineering and construction industry.

Prior to joining FMI Corporation, Mr. DiFonzo worked as an independent compensation

consultant whose clients included privately held and publicly traded companies. Earlier in his

career, he worked for several large corporations, including Honeywell and Eli Lilly.

Education/Professional Designations

Mr. DiFonzo is a Certified Compensation Professional (CCP), a Certified Benefits Professional

(CBP) and a Certified Sales Compensation Professional (CSCP). He is a cum laude graduate of

Cornell College (Mt. Vernon, IA) with a BA in Economics/Business and Psychology. He earned

an MS in Human Resource Management from the Krannert School of Management at Purdue

University (Lafayette, IN).

6

Published Works and Speeches Book

DiFonzo, Sal. “Designing Effective Incentive Compensation Plans.” Amazon, December 15, 2015.

Articles

DiFonzo, Sal. “Five Steps to an Innovative Compensation Strategy.” FMI Quarterly, 2017, Issue 4.

DiFonzo, Sal. “How to Use Phantom Stock to Assist with Ownership Transition and Retention.” FMI Quarterly, 2017, Issue 1.

DiFonzo, Sal and Priya Kapila. “Looking to the Future: How E&C Firms Can Leverage Long-Term Incentive Plans.” FMI Quarterly, 2016, Issue 3.

DiFonzo, Sal. “Time to Drain the Pool: Reinventing Your Bonus Pool Structure – A New Model.” FMI Quarterly, 2016, Issue 1.

DiFonzo, Sal and Cynthia Paul. “Leveraging the Seller-Doer Model in Construction.” FMI Quarterly, 2014, Issue 4: 69-76 Print.

DiFonzo, Sal and Sabine Huynen Hoover. “Increasing the Effectiveness of Incentive Compensation: Success Stories in the Construction Industry.” FMI Quarterly, 2014, Issue 3: 7-15. Print.

DiFonzo, Sal and Radek Knesl. “What You Need to Know About Designing Effective Incentive Compensation.” work-span, the magazine of WorldatWork, 2014, Issue 6: 41-44. Print.

DiFonzo, Sal. “Improving Teamwork Through Effective Compensation Design.” FMI Quarterly, 2014, Issue 2: 31-37. Print.

DiFonzo, Sal, Radek Knesl and Philip E. Warner. Incentive Compensation Effectiveness Study: The 2013 U.S. Construction Industry Incentive Compensation Survey. FMI Corporation, 2013.

Brown, Jeremy and Sal DiFonzo. “You Kept Your Employees During the Great Recession: Now You Owe Them?” FMI Quarterly, 2014, Issue 3: 18-22. Print.

Isaacs, Steven J. and Sal DiFonzo. “Section 8.2: Compensation Strategy and Philosophy”, AIA Handbook of Professional Practice 15th Edition, Wiley, 2013. Print.

DiFonzo, Sal and Carolyn DiFonzo. “Australia: Our Best Safari”, Cessna Owner, 2009 November: 24-41. Print.

Speeches

“Leading Operational Excellence: Compensation”, FMI Corporation Seminar: Leading Operational Excellence, Phoenix, AZ, 11/29/2017

“The War for Talent Drives Construction Pay Higher”, Mitsubishi Diamond Contractor Event, Dallas, TX, 10/20/2017

“Compensation Trends and Best Practices/Long-Term Incentive Plans”, FMI Corporation CFO Forum, Dallas, TX 10/19/2017

“Talent Development and Compensation”, Associated General Contractors Human Resources/TED Forum, Phoenix, AZ, 10/11/2017

“Compensation Trends and Best Practices”, FMI Corporation Peer Group: Heavy Civil Contractors, Baltimore, MD, 08/24/2017

“Compensation Trends”, Low Bidders Invitational, Napa, CA, 05/12/2017

“Short and Long-Term Incentive Plans”, FMI Corporation Seminar: Ownership Transfer and Management Succession, Marco Island, FL 04/04/2017

“Designing Effective Incentive Compensation Plans”, Brown Edwards Certified Public Accountants, Charleston, WV, 12/14/2016

“Designing Effective Incentive Compensation Plans and Current Trends”, Construction Financial Management Association (CFMA) South Florida, Fort Lauderdale, FL, 11/16/2016

7

David Ko

Consultant/Project Manager

Expertise

Mr. Ko is a Consultant in Sibson’s San Francisco office with expertise in modeling,

compensation analysis, and strategy. He consults clients to help achieve their strategic goals by

performing various complex quantitative and qualitative analyses, conducting research, assessing

organizational effectiveness, salary structure design, and performance management. Mr. Ko

works with clients in both the public and private sectors, as well as various not-for-profit

organizations, colleges, and universities. Examples of past and current work include:

Assessed an organization’s entire staff population and analyzed market data to determine

salary competitiveness to market, and recommended salary structure reorganization, career

progression, and leveling and administration guidelines

Conducted comprehensive assessment of executive compensation packages to determine

competitiveness and assess reasonableness of proposed adjustments

Designed a competitive long term incentive opportunity for an international pharmaceutical

company, limiting risk for the organization and the participants

Proposed recommendations for improving back end business processes and end-user

experience, facilitating multiple working sessions with key subject matter experts. Proposals

spanned across multiple functional areas, including communications, information

technology, resource accessibility, and administrative services

Performed assessment of an organization’s research office to identify management, cultural,

and structural issues or areas of opportunities, and proposed process improvements to

enhance responsiveness, increase collaboration with the rest of the organization, and align

priorities with the overall strategic direction

Evaluated and updated an institution’s pay practices, and designed multiple implementation

plans with costing analysis for each.

Professional Background

Prior to Sibson, Mr. Ko served as an analyst at a boutique investment-banking firm.

Education/Professional Designations

Mr. Ko obtained a B.S. in Business Administration with a concentration in Finance and Business

Economics from the University of Southern California.

8

Professional Arrangements

Project Phases and Timing

The Executive Director assessment is due by September 12, 2019. Benchmarking for 10 other

executive and staff positions is due by December 31, 2019 but Sibson estimates that this work

would take 5-8 weeks to complete from project acceptance.

Project Fees and Payment Schedule

Based on the approach described in this proposal, the professional fees for the executive

compensation study are as follows:

Option Professional Fees

Executive Director Study $18,000

Benchmarking Study for 10

Executive and Staff Positions

$12,000

Fees for optional services are based on the following schedule:

Consultant Level Hourly rate

Vice President/Senior Vice President $450 - $600

Consultant/Senior Consultant $275 - $400

Associate/Senior Associate $210 - $250

ERISA/IRS Counsel $500

All professional fees are non-contingent and non-refundable unless specifically stated otherwise

in this Agreement. In addition to the professional fees, we invoice for direct out-of-pocket travel

and lodging expenses, as incurred, on a pass through basis as well as a 6% charge of

administrative project fees. We expect travel and lodging expenses will be minimal as the

majority of the work will be conducted remotely.

All amounts are due and payable upon receipt of an invoice submitted by Sibson Consulting.

Work encountered during the performance of these services that warrant additional time or

process changes that are outside the scope of work described above may alter the above fee

quote. Should we encounter any of these circumstances, we will notify you immediately prior to

incurring any additional charges.

At the onset of the engagement, Sibson will invoice a retainer for one-half of the professional

fees. Given the short time-frame to complete the work, Sibson will invoice the remainder of fees

at project completion. If the work plan in this letter meets with your approval, let us know and

we can begin the contracting process immediately.

9

About Sibson Consulting

History

Sibson Consulting was founded 60 years ago by Robert Sibson. Mr. Sibson published one of the

first books focused on executive compensation management. While the advisory services offered

by Sibson have broadened over the years, executive compensation continues to be a core

competency of the firm. Today Sibson Consulting provides full service human resource, benefits,

and actuarial consulting to public and private corporations, hospital and healthcare systems, and

not-for-profit organizations.

Sibson Consulting is a division of Segal (Eastern States), Inc., a wholly owned subsidiary of The

Segal Group, Inc. Segal (Eastern States), Inc. Segal was founded in 1939 and was incorporated

in 1956 in the State of New York.

Our company is headquartered in New York City and has 23 offices throughout the United States

and Canada. Our offices are located in Atlanta, Boston, Chicago, Cleveland, Dallas, Denver,

Detroit, Edmonton, Glendale, Hartford, Houston, Los Angeles, Minneapolis, Montreal, New

Orleans, New York, Philadelphia, Phoenix, Princeton, Raleigh, San Francisco, Toronto, and

Washington, DC. The Segal Group has over 1,000 employees. The Segal Group is an

independent, privately held consulting firm. It has been employee-owned by its officers since

1978. There are currently 245 employee owners, with no shareholder owning more than 5% of

the company. An 11-member Board of Directors sets policy and governs the organization.

Implementation of policies, development of strategies, and day-to-day operations are the

responsibilities of the Chief Executive Officer.

Segal Consulting, Sibson Consulting, Segal Marco Advisors, Segal Waters Consulting and Segal

Select Insurance are all members of The Segal Group. While company names and logos have

evolved over the firm’s history, members of The Segal Group remain independent, employee-

owned firms that provide unbiased consulting services.

10

Our Values

Our organization was founded with these goals:

Aspiration Be the highest impact Human Capital consulting firm

Mission Create and implement solutions to Human Capital issues that generate high value employees and key stakeholders

Focus Hold deep expertise in selected issues and industries

Be qualified to address complex, interdisciplinary Human Capital issues

Be strategic and closely linked to business strategy

Approach Work closely with the client to identify root business issues

Support our recommendations with rigorous analysis

Build consensus around solutions with high ROI and solid business case

Deliver disciplined, detailed implementation

11

Sibson Service Areas

Health Benefits Communications Performance and Rewards

Organization and Talent Retirement Benefits

Optimize the return on investment in health and welfare benefits

Create design strategies that balance cost effectiveness and health promotion

Implement and execute plan strategies

Actuarial analysis and pricing

Change management strategies

Written communications

Multi-media Classroom training Train-the-trainer Online learning

Design effective executive and broad-based compensation plans

Create an effective employee value exchange

Improve performance management

Improve organization effectiveness and talent management programs

Build talent capability through development and succession

Design effective organizations and jobs

Predict and fill Human Capital needs

Retention management

Optimize the return on investment in retirement benefits

Manage financial risk

Comply with complex regulatory and accounting requirements

Improve administrative effectiveness

Our Executive Compensation and Intermediate Sanctions Advisory

Services

Executive Performance and Rewards Executive Compensation Governance

Total compensation reviews—establishment of rebuttable presumption / reasonable compensation for 501(c)(3) and 501(c)(4) organizations – Peer group development – Competitive assessment

Compensation philosophy and total rewards strategy development

Compensation plan redesign – Base salary – Annual incentives – Long-term incentives – Business unit and special incentives – Deferred compensation – Retirement plans – Executive perquisites and supplemental benefits

Executive performance assessment/ realignment Top executive contract review and negotiations

Board effectiveness assessments Board policies

– Legal and regulatory education and compliance

Board practices – Committee charters – Role and decision rights clarification – Board performance measures and

standards – Board alignment and dynamics – Board performance evaluation – President performance evaluation

People – Board composition – Director value proposition

12

Current and Former Food Industry Clients

Aliant Food Service

Creature Comforts

Grande Cheese

Empak Beef

Kenosha Beef

Milk Specialties

Other Half Brewing Company

Raskas Foods

Schreiber Foods

Specialty Milk Products

The Chicago Meat Authority

The Republic of Tea

Treehouse Foods

Wonderful Citrus

13

Sibson Sample Non-Profit Client List

Sibson has significant experience in providing market assessment and compensation advisory

services to non-profit organizations, including the ones listed below:

ACT

Air Line Pilots Association

Academy Motion Picture Arts & Sciences

American Bar Association

American Red Cross

American Lung Association

American Institutes for Research

American Society Composers, Authors and Publishers (ASCAP)

Argus Community, Inc.

Arizona Automobile Association

Association of American Medical Colleges

Atlanta Convention & Visitors Bureau

Board Education Employees - Essex County

Boston Symphony Orchestra, Inc.

Carter Burden Center for the Aging

CASEL

Charles A. Frueauff Foundation

Chicago Symphony Orchestra, Inc.

City of Henderson, Nevada

City of Scranton

City of NY Office of Comptroller

CNA Corporation

College Board

Community Care North Carolina

CopperPoint Insurances Services (formerly SCF Arizona)

County of Santa Barbara

Dana-Farber Cancer Institute

Diocese of Phoenix

Duke Clinical Research Institute

Educational Testing Service

Epilepsy-Pralid, Inc.

FHI 360

George Lucas Educational Foundation

Gift of Hope

Girl Scouts of America

Goodwill Industries of Central Arizona

Health Care Service Corporation

J. David Gladstone Institutes

Jewish Senior Life

Knights of Columbus

Lincoln Center for Performing Arts

Marie Stopes International

Maryland School for the Blind

Measured Progress

Medical & Health Research Association (MHRA)

Muscular Dystrophy Association (MDA)

National Academy of Recording Arts & Sciences, Inc.

National Association of Broadcasters

National Automobile Dealers Association

National Baseball Hall of Fame & Museum

National YMCA Employee Benefits Plan

New Jersey Education Association

New York Shakespeare Festival

New York State United Teachers Association

Questar Assessment

Santa Clara Water District

Scottsdale Health

Senior Service America Inc.

Society of Manufacturing Engineers

Southwestern Ohio Council for Higher Education

Special Olympics of Texas

St. Dominic’s Family Services

Tarzana Treatment Centers

The Advertising Council

The Colorado Health Foundation

The Henry Jackson Foundation

The Joyce and Saul Brandman Foundation

The Wartburg Adult Care Community

The Whitehead Institute for Biomedical Research

United Way of New York City

14

Senior Level References Recent Non-Profit Reference Circle the City (respite healthcare for the homeless) Phoenix, Arizona Project Type: Executive Compensation and Intermediate Sanctions Assessment (completed March 2019) Brandon Clark, Chief Executive Officer [email protected] Cell: 480.518.1333 Note: Mr. Clark has resigned from Circle the City since the completion of our project Recent Fresh Produce Industry Reference Wonderful Citrus (producer of Halo brand clementine oranges, Wonderful Pistachios, POM Wonderful and Fiji Water) Delano, California Project Type: Executive Compensation Assessment (completed September 2018) Julie Kurchak, SVP HR [email protected] Office: 661.778.1676 Recent Non-Profit and Quasi-Governmental Reference Central Arizona Project (delivers water from the Colorado River to the residents of Arizona) Phoenix, Arizona Project Type: Broad-Based Incentive Plan Design (anticipated completion September 2019) Mary Ann Ruzich, Sr. Compensation & Benefits Administrator [email protected] Office: 623.869.2371




Copyright 2019. PerformancePoint LLC. All Rights Reserved.

HR Consulting Proposal

Prepared for: Haas Avocado Board

August 19, 2019

Jennifer Blake, CCP Sr. HR Consultant

901-291-1577 [email protected]

Engaged Employees. Resilient Relationships. Collaborative Cultures.

Joel Myers Sr. HR Consultant

901-291-1576 [email protected]

Compensation Study & Performance Evaluation Review

Page | 2 Copyright 2019. PerformancePoint LLC. All Rights Reserved.

PERFORMANCEPOINT OVERVIEW

In 2003, Brad Federman began PerformancePoint with a focus on creatively helping clients become better at managing their people and servicing customers. In 2013, Brad merged his company with F&H Solutions Group (FHSG). Then, in 2016, Joel Myers of The Centre Group, an HR management consulting firm with an emphasis on executive and staff compensation, sold his company to FHSG. As of August 1, 2019, FHSG’s consulting services group in Memphis became PerformancePoint again.

The “new” PerformancePoint maintains the experienced consulting team from its predecessor firms. We have long-standing relationships with many of our clients for whom we have provided consulting services in the areas of compensation design, employee development and engagement, as well as a full spectrum of other human resources services.

SCOPE OF PRACTICE

Following are descriptions of PerformancePoint’s areas of practice. • Base pay and salary administration – job analysis, job evaluation, base pay structures, ongoing

administration. • Compensation surveys – custom surveys • Market studies – based on client industry, geographic location, and size of organization. • Executive compensation • Performance management • Surveys and research – e.g., employee engagement, 180- and 360-degree feedback tools,

training evaluation, etc. • E-Learning – Harassment and discrimination prevention (California specific), diversity and

inclusion basics, strategic selection and hiring. • Training – in-house, train-the-trainer, custom designed • General consulting • Retainers and staffing

CAPABILITIES

The consulting team at PerformancePoint is well equipped to provide the type of consulting expertise the client seeks. Our compensation team regularly provides similar services to clients both small and large, in a variety of industries. Jennifer Blake is a Certified Compensation Professional (CCP) through WorldatWork and specializes almost exclusively in compensation research, design, and implementation. Joel Myers has many years of compensation experience in a corporate setting and as a consultant. Joel has specific expertise in executive compensation and incentive plans.

Since we provide compensation services on a large scale, PerformancePoint subscribes to two highly credible survey sources at considerable cost. Both sources solicit pay data from employers only (not employees) and have a large enough database to easily filter data by organization size, industry, and geographic location.


Page | 3 Copyright 2019. PerformancePoint. All Rights Reserved.

All our consultants have widespread experience in employee development, performance management and performance appraisal processes. Bred Federman specializes in leadership development, coaching, and developing a culture of accountability.

COMPENSATION CONSULTING

Our approach to compensation consulting addresses four primary components that are part of an effective compensation plan:

• Market competitiveness • Internal Equity • Legal compliance • Effective administration

The ultimate determinant of whether a salary system is appropriate is whether the employer can hire and retain employees at the level of ability and performance desired. An employer’s ability to recruit and retain is largely based on the “market value” of a given job, tempered by other value factors such as benefits, location, opportunity and management. Employers must understand where their salaries fall in relation to the external market and why.

A clear, understandable and well-communicated salary structure is one of the best tools an employer can have to administer pay effectively and reduce legal risk in compensation matters. A salary structure provides objectivity in answering questions such as, “Why am I paid this amount?”, and provides the basis for external and internal comparison of pay rates. Establishing a useful structure depends on articulating appropriate goals for different job groups. For example, an employer probably has different compensation goals for its entry-level, nonexempt workforce than for it has for its senior leadership team.

As consultants, we aim to help our clients ask the right questions in the right order, then answer those questions to develop compensation goals and objectives.

OBJECTIVES

Haas Avocado Board has identified two HR practice areas for which it seeks guidance. The first is to review and assess its compensation plan, and then recommend improvements, for the Executive Director and staff members. The second is to provide an assessment of HAB’s performance evaluation process for its Executive Director and staff members.

The Executive Director’s annual review is due to be completed by the Board on September 12, 2019. Therefore, the client has requested the salary and performance evaluation for the Executive Director be completed first, in time to meet the Board’s deadline. The assessment and recommendations regarding staff pay and performance evaluation will be completed by the end of the year.



WORKPLAN

1. Discuss Compensation Philosophy

We will facilitate a discussion with the Board, or appropriate Board members, regarding the Board’s philosophy about executive compensation and the external market that the Board deems to be competitive. We will have a similar discussion with the Board and/or the Executive Director with respect to HAB staff compensation.

2. Obtain Client Data

We will request copies (preferably electronic) of the client’s job descriptions and performance evaluation policy and tools. Ideally, we will receive the data for all the jobs at one time, unless to do so would delay our getting the Executive Director job completed on time. We will also request current pay data by employee along with existing pay plans or structures.

3. Job Matching

We will search for job matches among our data sources. When matching jobs, we will consider the job content and qualifications, not just the job title, since titles can be misleading. When making market matches, we will collaborate with the client, as needed, to ensure we are making the best matches.

4. Data Sources

PerformancePoint subscribes to certain data sources we will utilize when searching for relevant job matches.

a. ERI (Economic Research Institute) – An online, up-to-date database including salary, cost-of-living, and executive survey data for more than 1,000 industry sectors. All data is employer (not employee) provided. The database is extensive, allowing for scoping data by geographic area, employer size (# of employees or revenue), and industry.

b. CompAnalyst Market Data – An online resource which continually blends data from multiple sources for a complete market picture. They select only those surveys published by leading compensation data firms that adhere to standards set by WorldatWork. Like ERI, CompAnalyst’s database is robust, facilitating the scoping of data by industry, geography and company size.

Any industry-specific data sources to which the client has access will also be considered along with data available in the public domain through the U.S. Department of Labor.

5. Comparison of Current Pay to Market

Once market data has been obtained, we will conduct a comparison to HAB’s current pay ranges and individual employee salaries. Based on our analysis, we will make recommendations regarding adjustments to existing pay ranges or development of pay ranges.



6. Impact Analysis

We will conduct an analysis of the impact on employee salaries of the adjusted pay ranges to quantify any costs associated with the implementation of the recommended pay structure. We will also work with the client to consider implementation strategies that may make the revised pay ranges more affordable.

7. Performance Evaluation

We will facilitate a discussion with the appropriate Board members about the Board’s expectations for a formal performance appraisal process. We’ll identify the aspects of the current process that fall short of the Board’s expectations. Then we will develop recommendations for improvement to the process and existing tools being used.

Developing an entirely new performance evaluation plan and process for recommendation to HAB, does not appear to be part of the RFP. However, in case HAB desires this level of intervention, we have prepared a separate fee structure for this additional work.

CURRENT AND PAST CLIENTS

Following is a partial list of clients for whom we have conducted projects related to compensation and/or performance appraisal.

• The Cotton Board (commodity board) • Stratas (food/produce industry) • Oklahoma Housing Finance Agency (non-profit, tax-exempt trust) • Church Health Center (non-profit) • City of Memphis (municipality) • Nevada Donor Network (non-profit, regulated) • Youth Villages (non-profit) • Memphis Area Legal Services (non-profit, government grantee) • Jackson Municipal Airport Authority (quasi-governmental agency)



CLIENT REFERENCES

The Cotton Board Emily Wyonzek Human Resources Manager 5050 Poplar Avenue Suite 1900 Memphis, TN 38157 901-271-1336 [email protected]

Stratas Foods Angelina Wallrath Vice President of Human Resources 7190 Goodlett Farms Parkway Suite 200 Memphis, TN 38016-4991 901-387-2203 [email protected]

Nevada Donor Network Jason Mahfood Chief Financial Officer 2055 E. Sahara Avenue Las Vegas, NV 89104 855-683-6667 [email protected]

Youth Villages Pat Lawler Chief Executive Officer 3320 Brother Blvd. Memphis, TN 38113 901-251-4801 [email protected]

CONSULTANT OVERVIEW

Jennifer Blake, CCP, Senior Consultant

With many years in the HR profession, Jennifer is a strong HR generalist with significant experience as both an internal and external consultant. As Director of HR for a large, partially unionized community hospital, Jennifer managed employee & labor relations, compensation, benefits, recruitment, and employee training. She has had the opportunity in other roles to develop key skills in the areas of job analysis & compensation design, performance management and designing HR workflow processes. Her current client work includes supporting small businesses that don’t have an internal HR presence

as well as completing compensation projects for clients in a variety of industries.

Jennifer was a consultant with The Centre Group for nine years when the business was sold to F&H Solutions Group in 2016. She continued as a full-time consultant with FHSG through July 2019 and now is part of the same team at PerformancePoint.

Jennifer is a graduate of Oklahoma State University where she earned a BS Degree in business, with a major in human resource management. She is an active member of SHRM-Memphis, the Mid-South Compensation Association and is a Certified Compensation Professional (CCP).






Joel Myers, Senior Consultant

Joel Myers is a career Human Resources management professional. His career includes 15 years of corporate and over 30 years of consulting experience. Joel’s expertise lies in strategic executive and employee compensation systems, performance enhancement and feedback systems, employee attitude research and organizational and leadership development. Prior to consulting, Joel held management positions at Baxter International, G.D. Searle & Co., Boise Cascade Corporation and Sara Lee Corporation where he was vice president of human resources for a $3 billion business

group. He received his bachelor’s degree in Psychology from Missouri Valley College and an MBA from Loyola University in Chicago. Joel is a Certified Management Consultant (CMC) with the Institute of Management Consultants. Joel is a member of and has received a lifetime achievement award from WorldatWork and is a member of Society for Human Resources Management (SHRM). Joel was a partner with The Centre Group for 15 years and in 2005 became the sole proprietor until he sold the business to F&H Solutions Group in 2016. Joel has continued to work full time at FHSG and now at PerformancePoint.

PROPOSED FEES

PerformancePoint consultants’ hourly billing rate is $275. The following proposed fees are based on this billing rate.

Executive Director Fees Discuss with Board their expectations for executive pay and for performance appraisal process. $1,100

Review existing job description, employment contract (if any), current compensation. Conduct market analysis and compare to HAB. Develop recommendations for executive pay.

$1,650

Review current performance evaluation process and tools. Develop recommendations. $1,650

Subtotal $4,400 HAB Staff Discussion with Executive Director re: staff compensation and performance appraisal. $1,100

Market price 10 staff-level jobs, compare to current pay structure/actual salaries, and develop recommendations.

$3,300

Review current performance evaluation process and tools. Develop recommendations. $2,200

Subtotal $6,600 TOTALS $11,000



Our proposed fees assume we will conduct the entire project via telecommunications and email without traveling to the client site. However, if the client would prefer one onsite meeting, our estimated additional fees, including transportation, would be approximately $2,000.

The additional cost to have PerformancePoint develop a new performance evaluation plan and process would be approximately $8,800.

The fees quoted above are not-to-exceed estimates based on our understanding of the project. Should the scope of the project change, we would notify the client to discuss any impact on the estimated fees. PerformancePoint bills on the first of the month for work completed in the month just ended.

TIMING

We are aware that HAB has a very short timeframe to complete the compensation and performance evaluation analysis for the Executive Director. Assuming we have a conference call with the Board and receive the data we need from the client August 23, 2019, we should be able to complete this portion of the project before September 12, 2019.

To complete the market pricing for the staff jobs and the review of the staff performance evaluation process will take about four weeks. If we have the data we need by mid-September, we will have no problem meeting the end of year deadline.

INVOLVEMENT FROM THE CLIENT

We will expect to spend time via telephone with the Board, or its designee, to discuss the Executive Director pay and performance evaluation. We will also need time over the phone from the Executive Director to discuss the same information for HAB staff. Additionally, we’ll require assistance from the client obtaining the information we’ll need to conduct our studies. Thereafter, we will only contact the client if we have questions about specific jobs or the employee data.

BENEFITS TO CLIENT

As a result of the completed market study, Haas Avocado Board, will have up-to-date pay data on important benchmark jobs that have been carefully matched to the market. The client will have an up-to-date pay structure, which is critical to any organization’s ability to attract and retain high quality talent. A competitive pay plan is especially critical in a tight labor market. HAB will also benefit from working with consultants who have worked in similar industries for similarly situated clients.

Confidential Page 1 of 6

August 19, 2019 Robert Rumph Vice President of Finance Haas Avocado Board (HAB) 25212 Marguerite Parkway, Suite 250 Mission Viejo, CA 92675 Dear Robert, Thank you for inviting us to submit a proposal for your upcoming compensation study. As Haas Avocado Board (HAB) looks forward to building a productive future, it is critical to have a solid compensation and benefits plan in place that engages employees and creates conditions for long-lasting success. We are excited to partner with you to find a solution that’s clear, streamlined, and right for HAB. 1. OneCompensation History, Overview, Scope of Business

For nearly fifteen years, Clifford Stephan (founder of OneCompensation) has worked with companies in multiple industries to develop comprehensive and competitive compensation plans.

Point of Contact Clifford Stephan Principal & Founder Phone: 408.391.4274 Email: [email protected] Website: www.onecompensation.com 1165 Lincoln Ave Suite 324 San Jose, CA 95125

2. OneCompensation’s Capabilities and HAB’s Needs HAB’s needs and business objectives drive OneCompensation’s approach to your plan design. Based on the information you give us, we develop a plan that is tailored to HAB’s job content, functions, requirements and responsibilities. Based in Silicon Valley, Clifford’s work has helped businesses in food, tech, education, healthcare, manufacturing, and service providers to attract the right talent, keep employees engaged, and promote long-term growth and stability for businesses. He and his team are dedicated to making life easier for a company—whether it’s decisions about hiring, salaries, and benefits, OneCompensation is focused on helping companies thrive in a competitive environment. In short, by engaging with OneCompensation, HAB stands to gain a stable future, enhanced ability to meet company goals, and streamline hiring and pay decisions.


3. Approach to Compensation Consulting in General

OneCompensation believes that one size does not fit all. Every company has different objectives, goals, and makeup—that is precisely what determines our approach to finding the best compensation solution for you. Whether it’s attracting and retaining the best talent, aligning compensation practices to bigger company objectives, or establishing fair and equal compensation for all team members, your objectives dictate our work with you.

4. Possible Approach to help HAB Attain Compensation Goals

HAB’s needs for this project will guide our own process—that said, we can describe our general process that will likely align with achieving your compensation goals:

Step 1. Internal Analysis & Project Development Step 1 means developing a thorough understanding of HAB—its pay philosophy, desired culture, organizational structure, past practices and future vision. At this phase, we will:

• Request a list of relevant internal documents, such as organization charts, job descriptions, employee information and current compensation, and benefits data

• Meet with you to plan the project and provide an in-depth understanding of HAB’s goals and culture, and develop a thorough understanding of roles and responsibilities that will be included in the benchmarking and compensation plan design initiative

Step 2. Match Jobs to Market Data and Analyze Based on the information collected in Step 1, we will match the Executive Director Job and 10 management and professional HAB’s jobs to the descriptions in published survey sources based on job responsibilities, complexity, as well as education and experience requirements. We will use your survey data and have other surveys that should prove useful and we will ensure we have the right data for the industries/ geographic locations required. Next, we pull the base salary information from the survey source(s) and develop a database comparing HAB’s jobs and incumbent data with the market data. From this database, we will be able to report what salaries are needed to reach market competitive levels for each job, individual, and for the organization overall. The data we use at this point is based on industry and geographical locations that best match HAB’s peer groups, as well as pay data that represents the desired market percentile. Step 3. Develop Salary Range(s) At this point, we develop competitive salary ranges for all of the core jobs across HAB’s business. Flexibility is important for your compensation plan, so we also work on developing ranges with minimums, midpoints, maximums for salaries. Range widths will allow for a reasonable distribution of salaries based on individual experience and performance levels. The recommended ranges will also allow for the development of reasonable job family career paths, as well as to prepare HAB for future growth. Step 4. Review and Finalize Salary Recommendations


We will review initial assignments with the relevant executive stakeholders to get adjustment feedback based on internal equity. Once the adjustments have been made, we can then finalize the salary ranges and may make other necessary recommendations for pay adjustments. Step 5. Determine Competitive Short-Term Incentive Levels During this step, we will look at market competitive incentive levels to determine the appropriate target incentive for each HAB job. The overall objective will be to ensure that HAB offers a competitive total cash compensation opportunity (target salary + bonus). We will then be able to better assess HAB’s total cash compensation opportunities and compare them to the marketplace. Step 6. Prepare and Present Final Report You will receive a final report detailing our findings and recommendations that includes:

• An analysis and any salary, short-term incentive recommendations for all positions • Competitive findings and recommendations for HR and management • Details on how to manage pay and rewards while maintaining your competitive position to

market We are happy to present this report to you, the Board, or any others you may choose, as well as answer any remaining questions you may have. This project will take approximately 2 weeks for the Executive Director study and 3 weeks for the remainder of the study once we officially start. Our timelines are based on both managers and the requested information being available in a timely manner, as well as allowing for any questions or feedback as needed. Outcomes As a result of our study, HAB will have the ability to:

• Engage, retain, and honor employees’ contributions to the company’s success • Provide managers with the right guidance and flexibility when making hiring, promotion,

and salary increase decisions • Ensure that the organization manages its compensation expense efficiently • Position the organization to have a clear understanding of their total rewards offerings

(base, bonus programs) and make any required adjustments

5. Past and Current Clients:

• LinkedIn

• Safeway

• Driscolls

• Google

• Kaiser Permanente

• Tanimura & Antle (TAP Produce) • MAAS Companies

• Stanford Hospitals and Clinics • Eventbrite

• Ebay (more clients can be found on our website)


6. Applicable Senior Client References

• Tanimura & Antle (TAP Produce) • MAAS Companies

(We are happy to provide references if we are selected/ short-listed but will need to contact them ahead of time to give them notice (as I don’t want to unnecessarily inconvenience them).

7. Team Members, Bios, and Hourly Rates

Two senior consultants will work with HAB on this project: Rick Olivieri Principal Consultant Rick has 25 years’ experience in the compensation field, working on salary, incentive, stock, sales, international, and executive compensation programs. He has held managerial positions at Union Bank of California, Adaptec, US Sprint, and Bank of America. In addition, he was a consultant for Towers-Perrin, Sibson & Company, and Ernst & Young. Rate: $225/hour Clifford Stephan Principal Consultant For 15+ years, Clifford has served both as a consultant and in management roles across a variety of industries–from computer technology and healthcare to government and financial sectors. His client list includes Google, Stanford Healthcare, Linkedin and Driscolls. His work experience covers a broad range of HR functions: conducting global compensation competitive analyses, benchmarking survey design and participation, ESOP design, incentives and benefits, and executing job evaluations. Additionally, he has acted as a consultant for organizational development, job definition, and career management. Rate: $225/ hour

8. Experience with food/produce industry, non-profits, commodity boards, federal/state instrumentalities and trade associations

• Tanimura and Antle (Tap Produce) • Driscolls Berries • USTA • Safeway (including their Consumer Brands Division where they manufacture and sell

thousands of food products)


The following chart summarizes the steps we anticipate for this project, and provides a list of our consulting fee estimates:

Internal Analysis & Project Plan Development $1,500

Benchmark Develop and Finalize Base/ Bonus Structures/ Guidelines Approximately 11 Jobs to Peer Competitors

$10,000

Develop and Present Final Report, Recommendations & Related Directives $3,000

Total: $14,500

Fees and schedules are tied to the scope of the project, and our pricing is based on a cumulative total of consulting services. OneCompensation will agree to complete the project for the amount reflected in our submitted estimate. If HAB institutes a change of direction in scope or deliverables during the course of the project, HAB will submit an addendum to this agreement to OneCompensation for prior approval before the work is completed. This agreement, superseding all prior understandings, oral or written, shall become binding when accepted by OneCompensation and the client on the dates entered below.

Key assumptions: • OneCompensation will provide drafts of materials using MS Office software, e.g.,

PowerPoint, Excel, Word, appropriate to the deliverable. • This proposal covers the study and finalization of approximately 11 jobs. • We will inform you of any additional fees that may be incurred on an ad hoc basis for ad

hoc requests. It is our practice to bill an initial retainer upon commencement of the assignment, to secure resources, cover expenses and factor in any accounts payable processing delays. A $4,500 initial retainer will be due upon commencement of this project and monthly invoices are payable upon receipt (with credit given for the initial retainer upon completion of the project).

Thank you again for considering our proposal on this important project. We are happy to answer any questions you may have.


Clifford Stephan OneCompensation Principal & Founder 408.391.4274 [email protected] Acknowledged and agreed: HAB By: _________________________ Title: _________________________ Date: __________________________

Executive Committee - Hass Avocado Board · 2014. 10. 1. · Hass Avocado Board 25212 Marguerite...

Documents

Transcript of Executive Committee - Hass Avocado Board · 2014. 10. 1. · Hass Avocado Board 25212 Marguerite...