UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Brown-Forman Corporation

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June 25, 2019

 

DEAR BROWN-FORMAN STOCKHOLDER:

 

 

It is our pleasure to invite you to attend Brown-Forman Corporation’s 2019 Annual Meeting of Stockholders, which will be held at the Brown-Forman Conference Center in Louisville, Kentucky, on Thursday, July 25, 2019, at 9:30 A.M. (Eastern Daylight Time). Please see the Notice of Annual Meeting on the next page for more information about this location and our admission procedures.

 

Your vote is important to us. Please complete and return your proxy card, or vote by telephone or online as soon as possible, even if you plan to attend the Annual Meeting.

 

We hope to see you on July 25. On behalf of the Board of Directors, thank you for your continued support.

 

Very truly yours,

 

Geo. Garvin Brown IV, Chairman of the Board of Directors	Lawson E. Whiting, President and Chief Executive Officer

Table of Contents

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Proxy Summary

In this section, we highlight certain information about matters discussed in this Proxy Statement. As it is only a summary, we encourage you to read the entire Proxy Statement before voting.

ANNUAL MEETING OF STOCKHOLDERS

PROPOSAL FOR STOCKHOLDER VOTING

Proposal	Our Board’s voting recommendation		Where to find details
Election of fourteen directors		FOR all nominees	Pages 16–20

PERFORMANCE AND COMPENSATION HIGHLIGHTS

We believe our executive compensation program continues to attract, motivate, reward, and retain a talented and diverse team of executives. These individuals lead our efforts to be the best brand builder in the spirits industry, and enable us to deliver superior and sustainable value for our stockholders. The incentive payouts to our executives described in this Proxy Statement reflect our performance both during the most recent fiscal year and over time.

The following charts compare trends in our performance with respect to total shareholder return (TSR), diluted earnings per share, and underlying operating income growth with trends in the compensation of our former Chief Executive Officer, Paul C. Varga, and current Chief Executive Officer, Lawson E. Whiting. These metrics reflect long-term value generated for our stockholders, and the charts show how our compensation strategy aligns with that performance.

OUR PERFORMANCE IN FISCAL 2019:

TSR     Earnings Per Share	Underlying Operating Income(1)	CEO Total Compensation(2)
(compound annual growth rate; Class B common stock)	(compound annual growth rate)	(in $ millions)

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PROXY SUMMARY  |  OUR DIRECTOR NOMINEES TO THE BOARD

OUR DIRECTOR NOMINEES TO THE BOARD

Class A stockholders are being asked to vote on the election of the fourteen directors named below. More details about each director’s background, skills, and expertise can be found under “Election of Directors” beginning on page 16. On December 31, 2018, our former Chairman and Chief Executive Officer, Paul C. Varga, retired from his role as an employee and officer of Brown-Forman, but continues to serve as a member of the Board through the upcoming Annual Meeting to be held on July 25, 2019 (the Annual Meeting). In anticipation of Mr. Varga’s retirement, Lawson E. Whiting was appointed to the Board on November 15, 2018, and became Chief Executive Officer of Brown-Forman on January 1, 2019.

Board Nominees

B=Brown Family Director   M=Management Director   I=Independent Director   C=Chair    •=Committee Member

FISCAL 2019

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Annual Meeting Information

ABOUT YOUR PROXY MATERIALS

Our Board of Directors (the Board) is soliciting proxies for our Annual Meeting of Stockholders. This means that you can vote “by proxy” at the Annual Meeting — that is, you can instruct us how you would like your shares to be voted at the meeting even if you cannot personally attend.

We are providing this Proxy Statement and accompanying materials to help you make an informed decision on the matters to be considered at the Annual Meeting. We will begin mailing this Proxy Statement and accompanying materials, and also make them available online, on or about June 25, 2019, to holders of record of our Class A and Class B common stock at the close of business on June 17, 2019, which is the “record date” for the Annual Meeting.

This Proxy Statement and our Annual & Corporate Responsibility Report, which includes our Form 10-K for fiscal 2019, are available at www.brown-forman.com/investors/annual-report/. You may request additional printed copies at any time using the contact information below.

Please let us know as soon as possible how you would like your shares voted. See “How to Vote” below for details.

Contact Information

For information about your stock ownership or other stockholder services, please contact Steve Cassin, our Investor Relations Manager, by telephone at (502) 774-7658, by e-mail at Steve_Cassin@b-f.com, or by mail at Brown-Forman Corporation, 850 Dixie Highway, Louisville, Kentucky 40210.

Reducing Duplicate Mailings

The Securities and Exchange Commission (SEC) permits us to deliver a single Proxy Statement and Annual & Corporate Responsibility Report to stockholders who share the same address and last name. Unless we receive contrary instructions from any stockholder in the household, even if your household receives only one Proxy Statement and Annual & Corporate Responsibility Report, each stockholder will receive an individual proxy card. We implemented this “householding” process to reduce our printing costs and postage fees, and to reduce the environmental impact of our Annual Meeting. If you would like to enroll in householding, or if your household is already enrolled but you prefer to opt out of householding for next year, please inform us using the contact information above and we will promptly fulfill your request.

ATTENDING THE ANNUAL MEETING

Although only Class A stockholders may vote at the Annual Meeting, Class A and Class B stockholders who owned their shares as of the record date are welcome to attend.

If you plan to attend, please register by July 23, 2019, online at asm.b-f.com or by contacting Steve Cassin using the contact information above. Please bring a photo ID and, if your shares are registered in the name of a bank, broker, or other holder of record, documentation of your stock ownership as of the record date. Please see “Admission Procedures” outlined in the Notice of Annual Meeting of Stockholders for full details.

VOTING

Who May Vote

If you held shares of Class A common stock at the close of business on the record date, you (or your legal proxies) may vote at the Annual Meeting. At the close of business on the record date, there were 169,038,689 shares of Class A common stock outstanding and entitled to vote at the Annual Meeting. At the close of business on the record date, there were 308,489,725 shares of Class B common stock outstanding. Class B shares are not entitled to vote.

If you purchased Class A common stock after the record date, you may vote those shares only if you receive a proxy to do so from the person who held the shares on the record date. Each share of Class A common stock is entitled to one vote. If you receive more than one proxy card or voting instruction card, you should complete, sign, date, and return each one (or follow the telephone or online voting instructions) because each card represents different shares.

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ANNUAL MEETING INFORMATION  |  VOTING

How to Vote

Stockholders of record. If your shares are registered directly in your name with our stock transfer agent, Computershare, you are considered the “stockholder of record” of those shares. If you are a stockholder of record of Class A common stock, you can give a proxy to be voted at the Annual Meeting:

	over the telephone by calling this toll-free number (1-800-690-6903);			online (www.proxyvote.com); or			by completing, signing, dating, and mailing the enclosed proxy card in the envelope provided.

Even if you plan to attend the Annual Meeting, we encourage you to submit a proxy in advance. If you are voting by telephone or online, we must receive your proxy by 11:59 P.M., Eastern Daylight Time, on Wednesday, July 24, 2019, to ensure your vote is recorded. You may override a proxy or change your voting instructions by following the applicable procedure outlined below in “Changing Your Vote.”

The telephone and online voting procedures are designed to authenticate your identity, enable you to give voting instructions, and confirm that those instructions are recorded properly. If you are a stockholder of record and wish to vote by telephone or online, please refer to the instructions on the enclosed proxy card.

Your proxy will authorize the individuals named on the proxy card to vote your shares in accordance with your instructions. These individuals also will have the obligation and authority to vote your shares as they see fit on any other matter properly presented for a vote at the Annual Meeting. If for any reason a director nominee is not available to serve, the individuals named as proxy holders may vote your shares at the Annual Meeting for another nominee. The proxy holders for this year’s Annual Meeting are Geo. Garvin Brown IV, Lawson E. Whiting, and Matthew E. Hamel.

“Street name” stockholders. If your shares are held in a stock brokerage account or by a bank (known as holding shares in “street name”), you have the right to instruct your broker or bank how to vote your shares, and the broker or bank is required to vote in accordance with your instructions. To provide those instructions by mail, please complete, sign, date, and return your voting instruction card in the accompanying postage-paid envelope. Alternatively, if the broker or bank that holds your shares offers online or telephone voting, you will receive information about how to submit your voting instructions by those methods. You may vote in person at the Annual Meeting, but only if you obtain a “legal proxy” from the broker or bank that holds your shares.

Changing Your Vote

If you are a stockholder of record, you may change your vote by submitting another proxy by telephone or online, by mailing another properly signed proxy card bearing a later date than your original one, or by attending the Annual Meeting and casting your vote in person. You also may revoke a proxy that you previously provided by delivering timely written notice of revocation to our Secretary, Matthew E. Hamel, at Brown-Forman Corporation, 850 Dixie Highway, Louisville, Kentucky 40210, or at Secretary@b-f.com.

If you hold your shares in street name and you wish to change or revoke your voting instructions, please refer to the materials your broker or bank provided to you for instructions.

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ANNUAL MEETING INFORMATION  |  ANNOUNCEMENT OF VOTING RESULTS

Quorum Requirements

Business can be conducted at the Annual Meeting only if a quorum consisting of a majority of the outstanding shares of Class A common stock is present in person or represented by proxy. Abstentions will be counted as present for purposes of establishing a quorum.

Votes Needed For Approval

Dividend Reinvestment and Employee Stock Purchase Plan Shares

Shares of Class A common stock held in Brown-Forman’s dividend reinvestment and employee stock purchase plans are included in your holdings and reflected on your proxy card. These shares will be voted as you direct.

ANNOUNCEMENT OF VOTING RESULTS

We intend to announce the preliminary voting results at the Annual Meeting and to issue a press release announcing the final voting results later that day. In addition, we will report the final voting results by filing a Form 8-K with the SEC within four business days following the Annual Meeting.

PROXY SOLICITATION EXPENSES

Brown-Forman bears the cost of soliciting proxies. Beginning on June 25, 2019, which is the mailing date for these proxy materials, our directors, officers, and other employees may solicit proxies in person or by regular mail, email, phone, or online. These individuals will not receive additional compensation for soliciting proxies. We will reimburse banks, brokers, nominees, and other fiduciaries for their reasonable charges and expenses incurred in forwarding our proxy materials to the beneficial owners of our stock held in street name.

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Corporate Governance

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CORPORATE GOVERNANCE  |  BOARD COMPOSITION

The Corporate Governance and Nominating Committee occasionally engages independent search firms to assist in identifying potential Board candidates. The Board has not adopted a formal policy regarding stockholder-nominated director candidates because the Corporate Governance and Nominating Committee believes the process it follows to identify and select Board members has been appropriate and effective. Any candidates submitted by stockholders will be evaluated in the same manner as all other director candidates.

BOARD COMPOSITION

How Our Controlled-Company Status Affects Our Board

Our Board has determined that Brown-Forman is a “controlled company” under New York Stock Exchange (NYSE) rules because more than 50% of our Class A voting stock is held by members of the Brown family.

As a controlled company, we are exempt from NYSE listing standards that require boards to have a majority of independent directors, a fully independent nominating/corporate governance committee, and a fully independent compensation committee. As a matter of good corporate governance, the Board has voluntarily chosen to have a Compensation Committee that is composed entirely of directors who meet the NYSE’s heightened independence standards for compensation committee members. Our Board does not have a majority of independent directors or a fully independent nominating/corporate governance committee. We are not exempt from, and comply in full with, requirements respecting the independence and qualifications of our Audit Committee members.

Our Independent Directors

We recognize the value of having independent directors. Under NYSE listing rules, a director qualifies as “independent” if the board of directors affirmatively determines the director has no material relationship with the company. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships. While the focus is on independence from management, our Board considers all relevant facts and circumstances in making an independence determination. Our Board has determined that the following seven directors are independent under NYSE standards: Patrick Bousquet-Chavanne, Bruce L. Byrnes, John D. Cook, Kathleen M. Gutmann, Michael J. Roney, Tracy L. Skeans, and Michael A. Todman.

The Board has determined that Campbell P. Brown, Marshall B. Farrer, and Lawson E. Whiting are not independent because they are members of Brown-Forman management. The Board elected not to make a determination with respect to the independence of Geo. Garvin Brown IV, Stuart R. Brown, Laura L. Frazier, and Augusta Brown Holland.

Our Brown Family Directors

We believe it is strategically important for Brown family members to be actively engaged in the oversight of Brown-Forman. Through participation on the Board, the Brown family’s long-term perspective is brought to bear, in some measure, upon each and every matter the Board considers. Brown family directors also serve as an effective link between the Board and the controlling family stockholders.

In addition, Board service allows the Brown family to actively oversee its investment in the company. Currently, the Brown family directors are Campbell P. Brown, Geo. Garvin Brown IV, Stuart R. Brown, Marshall B. Farrer, Laura L. Frazier, and Augusta Brown Holland.

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CORPORATE GOVERNANCE  |  BOARD COMPOSITION

Our Management Directors

We believe it is important, from a corporate governance standpoint, for management to be represented on the Board. Currently, Campbell P. Brown, Marshall B. Farrer, and Lawson E. Whiting serve in dual roles as Board members and Brown-Forman executives.

BROWN-FORMAN BOARD OF DIRECTORS

PATRICK BOUSQUET-CHAVANNE			CAMPBELL P. BROWN			GEO. GARVIN BROWN IV
	Chief Executive Officer, Emaar Malls			Senior Vice President, President and Managing Director of Old Forester, Brown-Forman Corporation			Chairman of the Board, Brown-Forman Corporation
STUART R. BROWN			BRUCE L. BYRNES			JOHN D. COOK
	Managing Partner, Typha Partners, LLC			Retired Vice Chairman of the Board, The Procter & Gamble Company			Director Emeritus of McKinsey & Company
MARSHALL B. FARRER			LAURA L. FRAZIER			KATHLEEN M. GUTMANN
	Senior Vice President, Managing Director of GTR and Developed APAC Region, Brown-Forman Corporation			Owner and Chairman, Bittners LLC			Chief Sales and Solutions Officer, United Parcel Service, Inc.
AUGUSTA BROWN HOLLAND			MICHAEL J. RONEY			TRACY L. SKEANS
	Founding Partner, Haystack Partners LLC			Retired Chief Executive Officer, Bunzl plc			Chief Transformation and People Officer, Yum! Brands, Inc.
MICHAEL A. TODMAN			LAWSON E. WHITING			INDEPENDENT   BROWN FAMILY   MANAGEMENT   BROWN FAMILY & MANAGEMENT
	Retired Vice Chairman, Whirlpool Corporation			President and Chief Executive Officer, Brown-Forman Corporation

Recent Changes to Our Board

As previously disclosed, our President and Chief Executive Officer, Lawson E. Whiting, joined the Board on November 15, 2018. Paul C. Varga, our former Chairman and Chief Executive Officer, will retire from the Board as of the Annual Meeting.

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CORPORATE GOVERNANCE  |  LEADERSHIP STRUCTURE

LEADERSHIP STRUCTURE

Chairman of the Board

Our Board believes that the determination of whether to separate or combine the roles of Chairman of the Board and Chief Executive Officer should depend largely upon the identity of the Chief Executive Officer and the composition of the Board at the time. For this reason, the Board does not have a policy on separation of these roles, but rather evaluates the situation on a case-by-case basis. Although these roles have been separate since 2007, they have been combined in the past.

Lead Independent Director

When a director who has not been determined to be independent holds the office of Chairman of the Board, as is currently the case, the Board may select one independent director (after considering the recommendation of the Corporate Governance and Nominating Committee) to serve as Lead Independent Director. The Lead Independent Director, if any, is elected annually. John D. Cook has served in this role since 2012.

As Lead Independent Director, Mr. Cook’s responsibilities include calling meetings of the independent directors and non-management directors, when necessary or advisable, and setting the agenda for and chairing those meetings. Other responsibilities appear in our Corporate Governance Guidelines at our website (www.brown-forman.com/about/ corporate-governance/guidelines).

Mr. Cook chaired one executive session of non-management directors in fiscal 2019 and called and presided over one executive session in fiscal 2019 that was attended solely by our independent directors.

President and Chief Executive Officer

As the President and Chief Executive Officer of Brown-Forman, Mr. Whiting is our highest ranking executive officer and is responsible for Brown-Forman’s strategy, operations, and performance. Mr. Whiting also serves as a management member of our Board.

Why the Board Chose this Leadership Structure

The Board has determined that this leadership structure currently serves the best interests of Brown-Forman and all of its stockholders. Having a Brown family member serve as Chairman of the Board promotes the Brown family’s active oversight of, and engagement and participation in, the company and its business and reflects the fact that Brown-Forman is controlled by the Brown family. In addition, because Mr. Brown handles the responsibilities associated with the position of Chairman of the Board, Mr. Whiting can concentrate on strategy and operations, while the Board still has access to his comprehensive knowledge of Brown-Forman’s business. The Lead Independent Director position provides leadership to, and fosters coordination among, our independent directors, enabling them to fulfill their role of bringing outside perspectives to the Board.

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CORPORATE GOVERNANCE  |  BOARD GUIDELINES AND PROCEDURES

BOARD GUIDELINES AND PROCEDURES

Corporate Governance Guidelines

The Board believes transparency is a hallmark of good corporate governance. To that end, the Board has adopted Corporate Governance Guidelines that provide a framework for the Board to exercise its duties. Among other things, these guidelines contain policies and requirements regarding director qualifications; director responsibilities, including the Lead Independent Director’s role; meetings and attendance; committee composition and responsibilities; director compensation; and director access to management and independent advisors. The Corporate Governance Guidelines are published on our website at www.brown-forman.com/about/corporate-governance/guidelines/.

Board and Committee Self-Assessment

The Corporate Governance Guidelines require the Board to conduct an annual self-assessment. Each Board committee (except the Executive Committee) also annually assesses how it performed during the preceding twelve-month period. These assessment procedures vary, from requiring members to complete questionnaires that call for both quantitative responses and free-ranging comments, to having an independent third party interview each member and then synthesize themes that emerge. This past fiscal year, our Chairman of the Board engaged in a 360 degree feedback process facilitated by an outside consultant. The Chairman of the Board, the Chief Executive Officer, and the Lead Independent Director consult at least annually regarding individual director performance.

Director Service on Other Public Company Boards

The Board recognizes that its members benefit from service on the boards of other companies. The Board encourages that service, with the understanding that our directors must have adequate time to devote to their work for Brown-Forman. The Corporate Governance Guidelines provide that any director who serves full-time as an officer or employee of Brown-Forman or any other entity should not serve on more than two public company boards in addition to the Brown-Forman Board, which includes the board of any public company at which a director is employed. Directors who are not employed full-time may serve on up to three public company boards in addition to the Brown-Forman Board. Directors must inform the Chairman, the Lead Independent Director, the Chair or Secretary of the Corporate Governance and Nominating Committee, or the Secretary of the Board as soon as practicable that they will be, or have been, elected to serve on an additional public company board.

The Board recognizes that service on the boards of nonprofit entities can be important and time consuming as well, and encourages directors to engage in such service as long as they continue to have the time necessary to devote to their work for Brown-Forman.

Director Service

The Board is authorized to fix the size of the Board at a number between three and seventeen members. Directors are elected each year at the Annual Meeting by a majority of the votes cast by our Class A stockholders. Once elected, a director holds office until the next Annual Meeting or until a successor is elected and qualified, unless the director first resigns, retires, or is removed. The Board does not have term limits, but directors generally may not stand for re-election to the Board after reaching the age of 71. In exceptional circumstances, the Board may ask a director to remain on the Board after age 71 if the director’s continued service would significantly benefit Brown-Forman. Service of a director beyond the age of 71 requires a recommendation by the Corporate Governance and Nominating Committee and the approval of two-thirds of the Board (not including the director under consideration). The Board has determined that the continued service of Bruce L. Byrnes as director would be of significant value to Brown-Forman and has requested that Mr. Byrnes stand for election at the Annual Meeting for an additional term. Mr. Byrnes has agreed to do so.

Board Meetings

The Board held six regular meetings and no special meetings during fiscal 2019. Absent an appropriate reason, all directors are expected to attend the Annual Meeting, all Board meetings, and all meetings of each committee on which they serve. All directors attended 75% or more of the aggregate meetings of the Board and committees on which they served during fiscal 2019. All directors then serving attended the 2018 Annual Meeting.

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CORPORATE GOVERNANCE  |  BOARD GUIDELINES AND PROCEDURES

Board Committees

Our Board has four standing committees: Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee, and Executive Committee. Each Board committee operates under a written charter that is posted on our website at www.brown-forman.com/about/corporate-governance/committee-composition/.

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CORPORATE GOVERNANCE  |  BOARD GUIDELINES AND PROCEDURES

Board’s Role in Risk Oversight

The Board believes its current leadership structure best enables it to fulfill its risk oversight function. Our Corporate Governance Guidelines require the Board to ensure we implement appropriate processes for managing enterprise risk, and our Board considers risk oversight an integral part of its role in the strategic planning process. The Board regularly and actively considers how strategic decisions affect Brown-Forman’s risk profile.

While the Board has ultimate oversight responsibility for the risk management process, certain committees have important supplementary roles. During fiscal 2019, the Board tasked its committees to assist with the responsibilities outlined below:

These committees periodically met with members of management and outside advisors, as necessary, and reported to the Board regularly on their risk oversight and mitigation activities. In addition, management’s Disclosure Controls Committee and the Chief

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CORPORATE GOVERNANCE  |  BEST PRACTICES

Risk Officer both play an integral role in making sure that relevant risk-related information is reported to senior management and the Board as directly and quickly as possible. For more information, see “Best Practices” below.

Communication with Our Board

Stockholders and other interested parties may communicate with our directors, including the non-management directors or the independent directors as a group, by writing to our Secretary, Matthew E. Hamel, at 850 Dixie Highway, Louisville, Kentucky 40210, or at Secretary@b-f.com. The Secretary’s office will forward appropriate written communications to the individual director or group of directors to whom they are addressed, with copies to all other directors. We generally will not forward to directors a stockholder communication that the Secretary determines to be primarily commercial in nature, relates to an improper or irrelevant topic, or requests general information about Brown-Forman.

BEST PRACTICES

Brown-Forman has long believed that good corporate governance is essential to long-term success. We continually evaluate our corporate governance practices in the context of our controlled-company status to address the changing regulatory environment, and adopt those practices that we believe are in the best interests of Brown-Forman and all of our stockholders.

Code of Conduct and Code of Ethics for Senior Financial Officers

The Brown-Forman Code of Conduct expresses our expectation of ethical behavior for all of our employees and directors. Our Code of Ethics for Senior Financial Officers reflects the expectation that all of our financial, accounting, reporting, and auditing activities will be conducted in strict compliance with all applicable rules and regulations and will conform to the highest ethical standards. We encourage our employees to speak up when aware of a potential Code of Conduct violation, and provide multiple channels for doing so — including anonymously. Links to the Code of Conduct, including reporting channels, and the Code of Ethics for Senior Financial Officers can be found on the Corporate Governance page of our website at www.brown-forman.com/ about/corporate-governance/.

Disclosure Controls Committee

The Disclosure Controls Committee is composed of members of management. This committee has established controls and procedures designed to ensure that information Brown-Forman may be required to disclose is gathered and communicated to the committee and that all required disclosures are timely and accurate. The committee has implemented a financial review process that enables our Chief Executive Officer and Chief Financial Officer to certify our quarterly and annual reports, as well as procedures designed to ensure our compliance with SEC Regulation FD (Fair Disclosure).

Enterprise Risk Management

The Chief Risk Officer maintains the risk register, facilitates risk scoring, identifies the individuals and teams that are responsible for mitigating risks and ensures that plans are in place to mitigate Brown-Forman’s most significant risks. The Chief Risk Officer reports to the Audit Committee regarding procedures, risk ranking results and risk mitigation status. In addition, the Chief Risk Officer reports to the Board at least annually regarding the top risks facing Brown-Forman and periodically updates the Board on the mitigation plans related to those risks.

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CORPORATE GOVERNANCE  |  OUR CONTROLLING FAMILY STOCKHOLDERS

OUR CONTROLLING FAMILY STOCKHOLDERS

Brown-Forman has an engaged family stockholder base with a long-term ownership perspective. We view our status as a publicly-traded, family-controlled company as a distinct competitive advantage, and we believe a strong relationship with the Brown family is essential to our growth, independence, and ability to create long-term value for all stockholders. Management interacts with Brown family members in a manner consistent with all applicable laws and regulations. We actively cultivate our relationship with the Brown family through a variety of channels, as detailed below.

Brown-Forman/Brown Family Shareholders Committee

In 2007, Geo. Garvin Brown IV and Paul C. Varga, our former Chairman and Chief Executive Officer, organized the Brown-Forman/Brown Family Shareholders Committee. They co-chaired this committee until Mr. Varga’s retirement, at which point Lawson E. Whiting, our new President and Chief Executive Officer, joined Mr. Brown as co-chair. The Brown-Forman/Brown Family Shareholders Committee provides a forum for frequent, open, and constructive dialogue between Brown-Forman and its controlling family stockholders. In addition, the committee engages the Brown family on topics of mutual interest such as the company and our industry, governance, ownership, and philanthropy.

Director of Family Shareholder Relations

The Director of Family Shareholder Relations, a Brown-Forman employee, works with other employees and Brown family members to develop and implement policies and practices designed to further strengthen the relationship between Brown-Forman and the Brown family.

Brown Family Member Employees

Brown-Forman currently employs ten Brown family members, some of whom participate on management teams that oversee strategic and operational matters. Participation in these roles enables our Brown family employees to contribute their perspectives on the important issues we confront. In addition to their management contributions, the Brown family employees play a critical role in upholding the Brown-Forman corporate culture.

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Election of Directors

This section provides information about our fourteen director nominees, including the experience, qualifications, attributes, and skills that enable them to make valuable contributions to our Board and that led the Board to conclude that they should serve as directors of Brown-Forman.

All of our director nominees are current directors of Brown-Forman. Each director was elected by the stockholders at our 2018 Annual Meeting except for Lawson E. Whiting, who was appointed to the Board in November 2018.

The Board unanimously recommends a vote “FOR” the election of each director nominee.

Your shares will be voted “FOR” the election of all director nominees listed below unless you instruct the proxy holders to vote against, or to abstain from voting for, one or more nominees. If any nominee becomes unable to serve before the Annual Meeting, the proxy holders may vote for a substitute nominee if the Board designates one. As of the date of this Proxy Statement, the Board believes each nominee is prepared to serve if elected.

NOMINEES

PATRICK BOUSQUET-CHAVANNE
Director since 2005 Age 61       COMMITTEES:   •   Compensation •   Corporate Governance and Nominating		CURRENT AND PAST POSITIONS   Emaar Malls (a developer of premium shopping malls and retail assets), Chief Executive Officer since August 2018   Positions at Marks and Spencer Group PLC:   •   Executive Director of Customer, Marketing and M&S.com from 2016 to 2018 •   Executive Director of Marketing and International from 2014 to 2016 •   Executive Director of Marketing and Business Development from 2013 to 2014 •   Corporate Director of Strategy and Business Development from 2012 to 2013   Positions at Yoostar Entertainment Group:   •   Co-Chairman from 2010 to 2012 •   President and Chief Executive Officer from 2009 to 2012		QUALIFICATIONS AND SKILLS   •   Senior management and board experience at one of the world’s leading manufacturers and marketers of branded consumer goods, including experience with implementing strategy, branding, licensing, distribution, digital, and international expansion •   Experience dealing with governance issues relevant to family-controlled public companies   OTHER DIRECTORSHIPS   •   Marks and Spencer Group PLC from 2013 to 2018 •   HSNi Corporation from 2008 to 2013
CAMPBELL P. BROWN
Director since 2016 Age 51		CURRENT AND PAST POSITIONS   Positions with Brown-Forman and affiliates:   •   Senior Vice President since 2018 •   President and Managing Director of Old Forester, our founding bourbon brand, since 2015 •   Led the wine and spirits portfolio in Canada and the Midwest region of the U.S. •   Served in the emerging markets of India, the Philippines, and Turkey •   Various other positions over a 25-year career •   Founding member of Brown-Forman/Brown Family Shareholders Committee from 2007 to 2018		QUALIFICATIONS AND SKILLS   •   Business and industry experience gained by serving in operational, management, and executive positions within Brown-Forman •   Deep knowledge of family corporate governance •   Perspective as a fifth generation Brown family stockholder •   A history of service on the Brown-Forman/Brown Family Shareholders Committee, which demonstrates his ability to represent the long-term interests of stockholders   OTHER DIRECTORSHIPS   •   Republic Bank and Trust Company since 2008 •   Kentucky Distillers Association since 2016

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Election of Directors  |  Nominees

GEO. GARVIN BROWN IV
Director since 2006 Age 50       COMMITTEES:   •   Corporate Governance and Nominating •   Executive (Chair)		CURRENT AND PAST POSITIONS   Positions with Brown-Forman and affiliates:   •   Chairman of the Board since 2007 •   Executive Vice President from 2011 to 2015 •   Senior Vice President and Managing Director of Western Europe and Africa from 2009 to 2011 •   Vice President and Jack Daniel’s Brand Director in Europe and Africa from 2004 to 2008 •   Director of the Office of the Chairman and Chief Executive Officer from 2002 to 2004 •   Founding member and Co-Chairman of Brown-Forman/Brown Family Shareholders Committee since 2007		QUALIFICATIONS AND SKILLS   •   Business and industry experience gained by serving in operational, management, and executive positions within Brown-Forman •   Deep knowledge of family corporate governance •   Perspective as a fifth generation Brown family stockholder •   A history of service on the Brown-Forman/Brown Family Shareholders Committee, which demonstrates his ability to represent the long-term interests of stockholders
STUART R. BROWN
Director since 2015 Age 54		CURRENT AND PAST POSITIONS   Typha Partners, LLC (an early-stage private equity investment company), Managing Partner since 2010   DendriFund, Inc. (a private, non-operating foundation focused on natural resource sustainability, seeded by Brown-Forman), Founding Director and President from 2011 to April 2019   Between the Covers Bookstore, Owner from 1998 to 2010   Positions with Brown-Forman and affiliates:   •   Sales and Marketing Management from 1995 to 1998 •   Founding member of Brown-Forman/Brown Family Shareholders Committee from 2007 to 2018		QUALIFICATIONS AND SKILLS   •   Extensive experience in family governance, entrepreneurial management, finance, and board leadership •   Perspective as a fifth generation Brown family stockholder •   A history of service on the Brown-Forman/Brown Family Shareholders Committee, which demonstrates his ability to represent the long-term interests of stockholders
BRUCE L. BYRNES
Director since 2010 Age 71       COMMITTEES:   •   Audit •   Corporate Governance and Nominating		CURRENT AND PAST POSITIONS   Positions with The Procter & Gamble Company:   •   Vice Chairman of the Board from 2002 to 2008 •   Vice Chairman of Global Brand Building Training from 2007 to 2008 •   Vice Chairman of Global Household Care Division from 2004 to 2007		QUALIFICATIONS AND SKILLS   •   Executive leadership of a global consumer goods company •   Expertise in brand building, brand management, and finance •   Experience with international marketing and operations and corporate strategy   OTHER DIRECTORSHIPS   •   Boston Scientific Corporation from 2009 to 2015 •   Diebold, Incorporated from 2010 to 2015 •   Cincinnati Bell, Inc. from 2003 to 2013

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Election of Directors  |  Nominees

JOHN D. COOK
Director since 2008; Lead Independent Director since 2012 Age 66       COMMITTEES:   •   Compensation •   Corporate Governance and Nominating (Chair) •   Executive		CURRENT AND PAST POSITIONS   Positions with McKinsey & Company:   •   Director Emeritus •   Director from 2003 to 2008		QUALIFICATIONS AND SKILLS   •   Skills gained during an over 40-year career advising and managing consumer products companies and creating stockholder value •   Leadership and senior management experience •   Financial and international expertise •   Marketing skills •   Experience with strategic acquisitions and integrations   OTHER DIRECTORSHIPS   •   Winona Capital Management since 2007
MARSHALL B. FARRER
Director since 2016 Age 48		CURRENT AND PAST POSITIONS   Positions with Brown-Forman and affiliates:   •   Senior Vice President, Managing Director of Global Travel Retail and Developed Australia/Pacific Region since 2018 •   Senior Vice President, Managing Director of Global Travel Retail from 2015 to 2018 •   Led the global Jack Daniel’s Tennessee Honey brand team from 2014 to 2015 •   Managing director of the Australia/Pacific region from 2010 to 2014 •   Led the Latin America & Caribbean region from 2006 to 2009 •   Various other positions over a 21-year career •   Founding member of Brown-Forman/Brown Family Shareholders Committee from 2007 to 2018 •   Member of the Brown-Forman Management Executive Committee from 2007 to 2009		QUALIFICATIONS AND SKILLS   •   Business and industry experience gained from serving in operational, management, marketing, and executive positions within Brown-Forman and industry •   Extensive international operations and leadership experience •   Perspective as a fifth generation Brown family stockholder •   A history of service on the Brown-Forman/Brown Family Shareholders Committee, which demonstrates his ability to represent the long-term interests of stockholders
LAURA L. FRAZIER
Director since 2016 Age 61		CURRENT AND PAST POSITIONS   Bittners LLC (a more than 160-year-old interior and commercial design firm), Owner, Chairman, and past-CEO   Positions with Brown-Forman and affiliates:   •   Member of the board of directors of Lenox, Inc., a former subsidiary, from 1999 to 2005 •   Founding member of Brown-Forman/Brown Family Shareholders Committee from 2007 to 2018		QUALIFICATIONS AND SKILLS   •   Executive leadership and entrepreneurial management skills •   Perspective as a fifth generation Brown family stockholder •   A history of service on the Brown-Forman/Brown Family Shareholders Committee, which demonstrates her ability to represent the long-term interests of stockholders

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Election of Directors  |  Nominees

KATHLEEN M. GUTMANN
Director since 2017 Age 50       COMMITTEES:   •   Audit		CURRENT AND PAST POSITIONS   Positions with United Parcel Service:   •   Chief Sales and Solutions Officer and Senior Vice President of The UPS Store and UPS Capital since 2014 •   President of Worldwide Sales from 2011 to 2014		QUALIFICATIONS AND SKILLS   •   Extensive senior management and executive leadership experience •   Experience directing long-term strategy as a member of the UPS Management Committee •   Oversight of P&L for UPS Capital (a UPS subsidiary that provides supply chain, financial, insurance, and payment solutions) and The UPS Store (a franchise system of retail shipping, mailbox, print, and business service centers)
AUGUSTA BROWN HOLLAND
Director since 2015 Age 43		CURRENT AND PAST POSITIONS   •   Haystack Partners LLC (environmentally conscious real estate development company), Founding Partner since 2006 •   Founding member of Brown-Forman/Brown Family Shareholders Committee from 2007 to 2018		QUALIFICATIONS AND SKILLS   •   Extensive knowledge of urban planning and revitalization and environmentally friendly development •   Experience serving on numerous civic boards •   Perspective as a fifth generation Brown family stockholder •   A history of service on the Brown-Forman/Brown Family Shareholders Committee, which demonstrates her ability to represent the long-term interests of stockholders
MICHAEL J. RONEY
Director since 2014 Age 65       COMMITTEES:   •   Compensation (Chair)		CURRENT AND PAST POSITIONS   Bunzl plc, Chief Executive Officer from 2005 to 2016		QUALIFICATIONS AND SKILLS   •   Extensive senior management and executive leadership experience •   Deep expertise in multinational production, distribution, and operations •   Financial expertise •   International mergers and acquisitions experience   OTHER DIRECTORSHIPS   •   Next plc since 2017 •   Grafton Group plc since 2016 •   Johnson Matthey plc from 2007 to 2014 •   Bunzl plc from 2003 to 2005

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Election of Directors  |  Nominees

TRACY L. SKEANS
Director since 2018 Age 46       COMMITTEES:   •   Audit		CURRENT AND PAST POSITIONS   Positions with Yum! Brands, Inc. and affiliates:   •   Chief Transformation and People Officer, Yum! Brands, Inc. since 2016 •   President, Pizza Hut International from 2014 to 2015 •   Chief People Officer, Pizza Hut Global from 2013 to 2014 •   Chief People Officer, Pizza Hut US from 2011 to 2013		QUALIFICATIONS AND SKILLS   •   Strong track record of business leadership overseeing transformation strategy, human resources, and corporate communications functions •   Experience leading business transformation and global people capability strategies to build powerful brands and fuel sustainable results •   Extensive accounting, treasury, and financial expertise
MICHAEL A. TODMAN
Director since 2014 Age 61       COMMITTEES:   •   Audit (Chair)		CURRENT AND PAST POSITIONS   Positions with Whirlpool and affiliates:   •   Vice Chairman, Whirlpool Corporation from 2014 to 2015 •   President, Whirlpool International from 2009 to 2014 •   President, Whirlpool North America from 2007 to 2009		QUALIFICATIONS AND SKILLS   •   Extensive knowledge and experience in multinational operations, sales and distribution, and manufacturing •   Executive leadership of large multinational organizations •   Financial expertise   OTHER DIRECTORSHIPS   •   Newell Rubbermaid, Inc. since 2007 •   Prudential Financial, Inc. since 2016 •   Whirlpool Corporation from 2006 to 2015
LAWSON E. WHITING
Director since November 2018 Age 51       COMMITTEES:   •   Executive		CURRENT AND PAST POSITIONS   Positions with Brown-Forman and affiliates:   •   President and Chief Executive Officer since 2019 •   Executive Vice President and Chief Operating Officer from 2017 to 2018 •   Executive Vice President and Chief Brands and Strategy Officer from 2015 to 2017 •   Senior Vice President and Chief Brands Officer from 2013 to 2015 •   Senior Vice President and Managing Director for Western Europe from 2011 to 2013 •   Vice President and Finance Director for Western Europe from 2010 to 2011 •   Vice President and Finance Director for North America from 2009 to 2010		QUALIFICATIONS AND SKILLS   •   In-depth knowledge of Brown-Forman’s business, operations, and strategy gained during his 22-year career •   Extensive knowledge of the beverage alcohol industry •   Operations and financial experience •   Strategic thinking, leadership, management, consensus-building, and communication skills

Family relationships. No family relationship — first cousin or closer — exists between any two directors, executive officers, or individuals nominated or chosen to become a director or executive officer, except for the following relationships between Brown family directors: Geo. Garvin Brown IV and Campbell P. Brown are brothers, and Marshall B. Farrer is their first cousin; and Stuart R. Brown and Augusta Brown Holland are first cousins.

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Director Compensation

OVERVIEW

Our directors serve one-year terms that begin when they are elected at an Annual Meeting and end immediately upon the election of directors at the next Annual Meeting. We refer to this period as a “Board Year” for director compensation purposes.

Our non-employee director compensation consists of an annual Board retainer, a Chair of the Board retainer, a Lead Independent Director retainer, committee member retainers, committee chair retainers, and meeting fees. To align the interests of our non-employee directors with those of our stockholders, non-employee directors receive their Board retainers in a combination of cash and equity. Non-employee directors receive meeting fees only if they attend more than eight meetings (Board), ten meetings (Audit Committee), or six meetings (Compensation Committee and Corporate Governance and Nominating Committee). The Compensation Committee believes this compensation structure appropriately reflects the importance of directors’ active participation at Board and committee meetings.

The Compensation Committee reviews, with the assistance of its independent consultant, FWC, information each year related to the competitiveness of our non-employee director compensation. From time to time, the Compensation Committee recommends adjustments to our compensation structure to ensure both continued competitiveness and the appropriate level and mix of compensation. Based upon the review conducted in fiscal 2019, and with the advice of FWC, the Compensation Committee recommended to the Board, and the Board approved, the following changes to director compensation:

These changes are intended to better align compensation levels with those of our compensation comparator group.

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Director Compensation  |  Overview

Deferred Stock Units

Our Deferred Stock Unit (DSU) program for non-employee directors allows us to issue both Class A common DSUs and Class B common DSUs. Each DSU represents the right to receive one share of Brown-Forman’s Class A or Class B common stock, based on the closing price of the shares on the date the award is made. After a non-employee director’s Board service ends, his or her DSUs are paid out in shares of Class A or Class B common stock following a six-month waiting period. Directors may elect to receive this distribution either in a single lump sum or in ten equal annual installments.

Non-employee directors are credited with the cash dividends on the number of shares represented by the DSUs they held on the record date for that dividend. These dividend credits are converted to additional DSUs based on the market value of the Class A or Class B common stock as of the dividend payment date.

If a director’s Board service ends during a Board Year, the DSUs attributable to the remainder of that Board Year do not vest and are forfeited.

Employee Directors

Lawson E. Whiting, Campbell P. Brown, and Marshall B. Farrer are our employee directors. They do not receive any compensation for serving on our Board, any of its committees, or on the boards or equivalent bodies of any of our subsidiaries.

Stock Ownership Guideline

Our stock ownership guideline for non-employee directors is equal to five times the annual board retainer, which for the 2019 Board Year was $1,025,000. When considering whether a non-employee director has satisfied the stock ownership guideline, the Compensation Committee includes Class A or Class B common stock held directly and DSUs. The value of any unexercised stock-settled stock appreciation rights (SSARs) is not included. Any non-employee director who has not yet met the stock ownership guideline will receive at least 60% of his or her annual equity Board retainer in DSUs.

Expense Reimbursement

We reimburse all directors for reasonable and necessary expenses they incur in connection with attending Brown-Forman Board and committee meetings. In addition, we provide a stipend of $3,000 per meeting to directors who must travel to an overseas location for such Board and committee meetings.

Continuing Education Allowance

Brown-Forman covers the cost, up to $10,000 per director per Board Year, of continuing education programs to support our directors’ efforts to remain current on best practices in board governance, industry matters, or other business topics relevant to their Board service.

Events

We occasionally invite our directors and their spouses to events, including strategy retreats, retirement celebrations, award dinners, and similar functions. We believe these occasions provide valuable opportunities for our directors to establish and develop relationships with our senior executives, long-term stockholders, employees, and each other, furthering our objective of having a strong and cohesive board.

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Director Compensation  |  Fiscal 2019 Director Compensation

FISCAL 2019 DIRECTOR COMPENSATION

The following table shows the compensation paid to non-employee directors for their service in fiscal 2019.

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Compensation Discussion and Analysis

This section describes our executive compensation philosophy and objectives, and the decisions of the Compensation Committee (Committee) regarding the compensation of our Named Executive Officers (NEOs). For fiscal 2019, our NEOs were:

EXECUTIVE SUMMARY

Pay for Performance

We believe our short- and long-term incentive programs should drive performance. These programs utilize key performance metrics to compare our performance to that of our peers. We believe the use of these metrics accomplishes four key objectives:

	demonstrating value provided to our stockholders			ensuring that we hold ourselves to an objective performance standard			reinforcing a competitive and innovative mindset among our leadership			ensuring that incentive payments are appropriate

We believe one of the best measures of value our NEOs create is the return provided to our stockholders relative to the returns of other companies in our industry and the broader S&P 500, as shown in the charts below:

BROWN-FORMAN TOTAL SHAREHOLDER RETURN (TSR) VS. EARNINGS PER SHARE (EPS) VS. CEO TOTAL COMPENSATION GROWTH(1)		TSR: BROWN-FORMAN VS. INDUSTRY VS. S&P 500(2)

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COMPENSATION DISCUSSION AND ANALYSIS  |  EXECUTIVE SUMMARY

Every year, the Committee evaluates NEO compensation in comparison to the compensation of executives with equivalent positions within our industry. (This process is described below under “How We Set Target Compensation for Our NEOs.”) The Committee’s 2019 annual review revealed that the total target direct compensation for our NEOs was below the market median for our compensation peer group listed on page 29. In light of this review, we believe our executive compensation program delivers exceptional value to our stockholders, particularly considering the combination of strong returns and financial performance that Brown-Forman and our management team have delivered over multiple years.

Performance-Based Payouts for Fiscal 2019

Our compensation program demonstrates the close alignment between pay and performance.

EQUITY-BASED INCENTIVES

We use equity-based compensation to align the long-term economic interests of our NEOs with those of our stockholders. We offer our NEOs two types of equity-based incentives: performance-based restricted stock or stock units, and stock-settled stock appreciation rights.

Advisory Votes on Executive Compensation

We conduct an advisory vote on our executive compensation (“say-on-pay”) every three years. Our last “say-on-pay” vote occurred at our 2017 Annual Meeting, and our stockholders expressed overwhelming support for the compensation of our NEOs, with more than 99% of the votes cast approving the advisory “say-on-pay” resolution. The Committee considered these results as one of many factors in its executive compensation decisions for fiscal 2018 and 2019, and did not make any material changes to the executive compensation program.

Following the expressed preference of our stockholders, who approved an advisory resolution favoring a three-year frequency for advisory say-on-pay votes at our 2017 Annual Meeting, Brown-Forman will continue to conduct future advisory votes on executive compensation every three years. We expect that our next say-on-pay vote will occur at our 2020 Annual Meeting. However, we reserve the right to conduct votes more frequently in order to seek additional feedback when warranted.

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COMPENSATION DISCUSSION AND ANALYSIS  |  OVERVIEW OF OUR COMPENSATION PROGRAM

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COMPENSATION DISCUSSION AND ANALYSIS  |  THE ROLE OF OUR COMPENSATION COMMITTEE

FISCAL 2019 PERFORMANCE METRICS FOR BROWN-FORMAN INCENTIVE PLANS

Competitive Compensation

We aspire to provide target compensation for our NEOs that approximates median target compensation delivered to executives in similar positions at companies we consider competition for senior executive talent. We believe that providing strong, competitive target compensation aligned with performance enhances our ability to secure the right executive leadership while driving the right results for our stockholders.

To help ensure we meet this objective, the Committee compares Brown-Forman’s compensation practices with those of a group of high-performing, brand-building consumer products companies with similar financial characteristics. The Committee reviews this group of companies annually to ensure they continue to meet these criteria. These companies are listed on page 29.

THE ROLE OF OUR COMPENSATION COMMITTEE

The Committee serves a critical role in our compensation governance by providing independent oversight and thought leadership on executive compensation and establishing performance objectives that correlate pay and performance. The Committee, with the assistance of its independent compensation consultant, FWC, establishes compensation for our NEOs and other designated executive officers, and helps the Board fulfill its duties relating to the compensation of our directors, officers, and employees. The Committee also has the sole authority, on behalf of the Board, to determine the compensation of our CEO. Pursuant to its charter, the Committee may delegate to the Management Compensation and Benefits Committee, or to one or more company officers, the authority to make equity awards to other eligible individuals. The Committee may change or revoke any delegation at any time.

The Committee is composed of three independent directors — Messrs. Roney (Chair), Bousquet-Chavanne, and Cook. Each member of the Committee qualifies as an independent director under the NYSE’s heightened independence standards for compensation committee members of non-controlled companies, as a non-employee director under SEC rules, and as an outside director under regulations adopted pursuant to Section 162(m) of the Internal Revenue Code. As a “controlled company,” Brown-Forman is not required to meet all of these standards, but we believe that doing so is in the best interests of our company and our stockholders.

The Committee’s deliberations and decisions are informed by the diverse experience of its members, input from certain members of management, advice from FWC, and access to functional experts at the company.

Sound Pay Practices

We avoid pay practices that we believe do not support the objectives of our executive compensation program or our culture. We do not offer NEOs employment agreements, non-performance-based cash payments (other than base salary and holiday bonus), tax gross-ups, excessive perquisites, or change-in-control agreements. We also have an Incentive Compensation Recoupment Policy (commonly known as a “clawback” policy) that permits Brown-Forman to seek recovery of incentive compensation paid or awarded in the event we restate a financial filing because of material noncompliance with financial reporting requirements or we discover an error in the calculation of that incentive compensation.

Each year, we assess and evaluate potential compensation-related risks. Based upon this year’s review, management and the Committee have concluded that our compensation policies and practices do not create any risk that is reasonably likely to have a material adverse effect on Brown-Forman. This is our intent and it is consistent with our findings in prior years.

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COMPENSATION DISCUSSION AND ANALYSIS  |  TARGET COMPENSATION

The Compensation Consultant

As an independent compensation advisor, FWC reports directly to the Committee and attends meetings as requested. FWC provides the Committee with information on external compensation trends and guidance on the compensation of our CEO and other NEOs, and also reviews this Compensation Discussion and Analysis. In addition, FWC provides independent advice to the Board on director remuneration, assists with the Board and committee self-assessment process, and acts as the Committee’s advisor in working with management. FWC provides no other services to Brown-Forman or management.

In accordance with SEC and NYSE requirements, the Committee has reviewed the independence of FWC and determined that no conflict exists that would compromise the independence of the advice the firm provides.

TARGET COMPENSATION

How We Set Target Compensation for Our NEOs

We apply a customized approach to determine the target compensation for each NEO. We consider each NEO’s role, the value of the role in the labor market, and factors specific to the NEO as an individual. Individual factors include tenure with Brown-Forman, mastery of current role, potential to move into expanded roles, performance, scarcity of skill sets, retention risk, fit within our culture, career experience, and internal pay equity. We find that this approach leads to a more effective pay program than one based solely on external labor market data.

To ensure our pay is competitive, we compare NEO compensation with the compensation for executives in similar positions within our compensation comparator group. FWC prepares a market analysis comparing the target value of each element of compensation for Brown-Forman’s NEOs to the compensation paid by our compensation comparator group. This analysis produces a range of market-competitive levels of target compensation as one consideration in determining pay for our NEOs. While we do not set target compensation to meet specific benchmarks, we do consider the median of the comparator group as a guide to appropriate target pay ranges for our NEOs.

To determine the pay elements that make up each NEO’s target compensation, we begin by reviewing the pay mix of our compensation comparator group. The objective of this practice is to have a pay mix that aligns our internal perspective with the comparator group, while supporting our goal of promoting stockholder value. FWC and the Committee periodically review pay mix to ensure we maintain this alignment.

BROWN-FORMAN CEO AND NEO PAY MIX VS. COMPENSATION COMPARATOR GROUP

COMPENSATION DISCUSSION AND ANALYSIS  |  AWARDS AND PAYOUTS IN FISCAL 2019: FIXED AND SHORT-TERM COMPENSATION

Compensation Comparator Group

Each year, the Committee reviews the membership of the compensation comparator group to ensure continued alignment with the characteristics of Brown-Forman. As a result of the most recent review, Dr. Pepper Snapple Group, Inc. and Pinnacle Foods Inc. were removed from the comparator group, and Tiffany & Co. was added. The companies shown below constituted the compensation comparator group for decisions made as of March 21, 2019.

Target Total Direct Compensation for Fiscal 2019

The chart below shows the annualized target total direct compensation for each of our NEOs in fiscal 2019 versus fiscal 2018, and the percentage increase of the compensation packages.

FISCAL 2019 VERSUS FISCAL 2018 NEO TARGET TOTAL DIRECT COMPENSATION

Name		Year		Salary and Holiday Bonus(1)		Short-Term Incentive Target		Long-Term Incentive Target		Target Total Direct Comp		Percent (+/-)		Pay Mix at Target
Lawson E. Whiting(2)		2019		$899,113		$850,000		$1,666,667		$3,415,780		89%
		2018		625,099		390,027		795,833		1,810,959
Jane C. Morreau		2019		625,020		450,000		1,050,000		2,125,020		11%
		2018		598,978		420,000		900,000		1,918,978
Mark I. McCallum		2019		681,324		463,500		885,800		2,030,624		3%
		2018		661,480		450,000		860,000		1,971,480
Matthew E. Hamel		2019		536,476		309,000		654,050		1,499,526		3%
		2018		520,850		300,000		635,000		1,455,850
Thomas Hinrichs(3)		2019		478,965		410,364		482,782		1,372,111		14%
		2018		458,796		361,850		383,160		1,203,806
Paul C. Varga(4)		2019		812,478		1,006,920		3,024,267		4,843,665		-31%
		2018		1,145,870		1,455,000		4,400,000		7,000,870

AWARDS AND PAYOUTS IN FISCAL 2019: FIXED AND SHORT-TERM COMPENSATION

Fixed Compensation

Base salary. Salaries typically are adjusted each July after we complete our annual performance review process, but an NEO’s salary may be adjusted at other times to reflect a change in role or responsibility.

Holiday bonus. One of our longstanding traditions is to offer a majority of our employees, including our NEOs, a lump-sum cash bonus during the holiday season. This bonus is intended to promote continued service and to show appreciation for our employees. The holiday bonus, which we consider to be part of base salary, is guaranteed and based solely on the employee’s tenure with Brown-Forman.

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COMPENSATION DISCUSSION AND ANALYSIS  |  AWARDS AND PAYOUTS IN FISCAL 2019: FIXED AND SHORT-TERM COMPENSATION

The table below shows the total amount of fixed compensation that each of our NEOs received in fiscal 2019.

FIXED COMPENSATION FOR 2019⁽¹⁾

Short-Term Incentive Compensation

Our NEOs participate in an annual performance-based cash compensation program in which payouts depend on the achievement of certain performance goals during the fiscal year.

For fiscal 2019, 80% of the target award was tied to company performance and 20% was tied to individual performance. We believe basing the majority of short-term incentive awards for NEOs on company performance appropriately reflects the collective accountability of our most senior executives for the success of the organization. We also believe that basing a lesser, but meaningful, portion of the short-term incentive on individual performance provides flexibility to differentiate awards among NEOs based on their respective achievements during the fiscal year.

Both the corporate and individual portions of our short-term incentives are subject to a performance factor of 0% to 200%. After adjusting for performance, the two components are added together to determine the total short-term incentive payment. As a result, the total value of short-term incentives may vary between 0% and 200% of target, a range we believe is sufficient for recognizing varying levels of performance without encouraging excessive risk-taking.

Please see the “Non-Equity Incentive Plan Compensation” column of the Fiscal 2019 Summary Compensation Table found on page 40 for the amounts paid to NEOs in short-term incentive compensation for fiscal 2019.

COMPANY PERFORMANCE (80% OF TARGET AWARD)

Company performance goals for fiscal 2019 were based on Brown-Forman’s underlying operating income growth compared to the expected performance of our industry peers. We aspire to outperform these peers consistently and sustainably, and considered our historic underlying operating income growth trends and outlook for fiscal 2019 performance when setting these objectives.

The Committee determined that, for purposes of the short-term incentive compensation plan, Brown-Forman achieved underlying operating income of $1,157 million for fiscal 2019, which represents 5% growth over last year, compared to an expected growth rate of 6% for our industry peers. As shown on the next page, these results led to a payout of 87% of target for this portion of the short-term incentive.

Underlying operating income at Brown-Forman was calculated by adjusting GAAP operating income for the following effects:

“Underlying operating income” is not derived in accordance with GAAP. Please refer to Appendix A at the end of this Proxy Statement for additional information.

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COMPENSATION DISCUSSION AND ANALYSIS  |  AWARDS AND PAYOUTS IN FISCAL 2019: LONG-TERM COMPENSATION

The fiscal 2019 short-term performance goal, our actual performance, and the resulting payout percentage of 87% of target is shown in the chart below:

FISCAL 2019 SHORT-TERM INCENTIVE COMPENSATION PERFORMANCE GOAL (IN $MM)

INDIVIDUAL PERFORMANCE (20% OF TARGET AWARD)

Individual performance objectives for the NEOs consist of qualitative and quantitative goals that support the achievement of our strategic priorities, such as fulfilling individual job responsibilities, providing diversity and inclusion leadership, implementing talent development, developing profit-driving ideas, implementing BF 150 strategies, and making overall contributions to Brown-Forman as a senior leader. Payout levels for the individual portion of the short-term incentive are based on the following guidelines for aligning performance and compensation:

AWARDS AND PAYOUTS IN FISCAL 2019: LONG-TERM COMPENSATION

Long-term incentives are the most important and largest portion of our NEOs’ compensation. These awards are intended to focus the efforts of our executives on long-range strategic goals, including sustainable growth and performance of our brands, and superior returns to our stockholders. They also serve as a strong retention incentive and enhance the alignment of our executives’ interests with those of our stockholders by building equity ownership.

The Committee initially determines the target dollar value of the total long-term incentive award for each NEO. The target long-term incentives are divided equally into four components:

	25% performance-based cash incentives			25% stock-settled stock appreciation rights
	25% performance-based restricted stock units			25% any combination of the above, based on the NEO’s preference, subject to Committee discretion

The Committee has discretion to allocate the flexible 25% portion of the award in any manner it chooses. Traditionally, however, the Committee has chosen to follow the individual preferences expressed by each NEO. Our aim with this approach is to encourage balanced performance in order to create sustainable value for stockholders, while also delivering compensation that has the highest perceived value for each individual NEO.

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COMPENSATION DISCUSSION AND ANALYSIS   |  AWARDS AND PAYOUTS IN FISCAL 2019: LONG-TERM COMPENSATION

Long-Term Performance-Based Cash Incentive

(For the Fiscal 2019–2021 Performance Period)

We provide our NEOs an opportunity to earn a cash-based incentive award linked to Brown-Forman’s achievement of long-term performance goals. The graphic below shows how we tie this incentive to those goals.

LONG-TERM CASH INCENTIVES FORMULA

To calculate the final payout, we:

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COMPENSATION DISCUSSION AND ANALYSIS   |  AWARDS AND PAYOUTS IN FISCAL 2019: LONG-TERM COMPENSATION

AWARDS GRANTED IN FISCAL 2019 (FOR THE FISCAL 2019–2021 PERFORMANCE PERIOD)

Long-term cash incentives granted in fiscal 2019 have a three-year performance period and, if earned, will be paid shortly after fiscal 2021 ends. The table below shows the target awards granted to each NEO in fiscal 2019.

TARGET LONG-TERM CASH AWARDS FOR FISCAL 2019–2021 PERFORMANCE PERIOD

AWARDS EARNED IN FISCAL 2019 (FOR THE FISCAL 2017–2019 PERFORMANCE PERIOD)

Our long-term cash awards for the three-year performance period beginning in fiscal 2017 were paid out shortly after fiscal 2019 ended. Based on our performance, the payout was 103% of the target award, calculated as shown in the graphic below:

ACTUAL PERFORMANCE AND PAYOUT FOR FISCAL 2017–2019 PERFORMANCE PERIOD⁽¹⁾

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COMPENSATION DISCUSSION AND ANALYSIS  |  AWARDS AND PAYOUTS IN FISCAL 2019: LONG-TERM COMPENSATION

The table below shows the long-term cash award that each NEO earned in fiscal 2019 based on the 103% payout for the fiscal 2017–2019 performance period.

LONG-TERM CASH AWARDS PAID FOR FISCAL 2017–2019 PERFORMANCE PERIOD

Performance-Based Restricted Stock

We award our NEOs and certain other executives shares of Class A common stock through our performance-based restricted stock unit awards. Unless otherwise determined by the Committee, performance-based restricted stock unit awards are granted on the date of the Annual Meeting.

AWARDS GRANTED IN FISCAL 2019 (FOR THE FISCAL 2019–2021 PERFORMANCE PERIOD)

Performance-based restricted stock units granted in fiscal 2019 have a three-year performance period. These awards are initially expressed as a dollar value and converted to a specific number of units. At the end of the three-year performance period, the number of units will be adjusted for performance and converted to shares that are subject to an additional one-year holding requirement.

TARGET PERFORMANCE-BASED RESTRICTED STOCK UNITS AWARDS FOR FISCAL 2019–2021 PERFORMANCE PERIOD

Performance will be measured by comparing the three-year cumulative TSR of Brown-Forman’s Class B common stock with the three-year cumulative TSR of the companies in the S&P Consumer Staples Index. The payout scale is shown on the next page. In addition to the relative TSR performance measurement, Brown-Forman must achieve an underlying operating income objective during the three-year performance period. If the underlying operating income threshold is not achieved, no awards will be earned.

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COMPENSATION DISCUSSION AND ANALYSIS  |  AWARDS AND PAYOUTS IN FISCAL 2019: LONG-TERM COMPENSATION

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARDS:

PAYOUT SCALE AND POTENTIAL PAYOUTS FOR FISCAL 2019–2021 PERFORMANCE PERIOD

Payouts for performance between threshold and target and between target and maximum will be interpolated using a straight-line method. In calculating TSR, we look at the average closing stock prices over the 60 trading days preceding the performance period and the final 60 trading days of the performance period. The companies used for the performance comparison will be those that constitute the S&P Consumer Products Index at the end of the performance period.

AWARDS EARNED IN FISCAL 2019 (FOR THE FISCAL 2017–2019 PERFORMANCE PERIOD)

Performance-based restricted stock unit awards for the fiscal 2017–2019 performance period were subject to a three-year performance period followed by a one-year holding period. Performance was measured by comparing the three-year cumulative TSR of Brown-Forman’s Class B common stock with the three-year cumulative TSR of the companies that constituted the S&P Consumer Staples Index when the performance period ended. Performance-based restricted stock unit awards earned over the three-year performance period ending April 30, 2019 will vest on April 30, 2020, subject to certain events that may cause an award to vest earlier.

The following companies constituted the comparative S&P Consumer Staples Index at the end of the 2017–2019 performance period:

The Committee chose a payout range of (50% to 150% of target) to support our goals of pay for performance and increased NEO equity ownership, while at the same time discouraging unnecessary risk-taking. Based on performance over the three-year period ending in fiscal 2019, the awards paid out at 150% of target, as shown below.

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARDS:

PERFORMANCE FOR FISCAL 2017–2019 PERFORMANCE PERIOD

Payouts for performance between threshold and target and between target and maximum will be interpolated using a straight-line method. In calculating TSR, we look at average closing stock prices over the 60 trading days preceding the performance period and the final 60 trading days of the performance period.

The number of shares issued was determined by multiplying the target award by a three-year performance percentage and adjusting the resulting number upwards to account for dividends paid during the second and third years of the performance period. The Committee chose this calculation method to ensure that our NEOs remain exposed to changes in stock price, but also earn the dividends issued during the performance period, consistent with the goals of our long-term incentive plan.

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COMPENSATION DISCUSSION AND ANALYSIS  |  OTHER COMPENSATION ELEMENTS

The shares awarded for the 2017–2019 performance period were issued on June 3, 2019, and are subject to a one-year holding period that ends on April 30, 2020. For more information on the performance-based restricted stock unit awards granted during fiscal 2019, please see the Fiscal 2019 Grants of Plan-Based Awards Table and the Outstanding Equity Awards at 2019 Fiscal Year-End Table, set forth on pages 42 and 43, respectively.

The table below shows the number of shares of performance-based restricted stock units issued for the fiscal 2017–2019 performance period.

SHARES ISSUED FOR FISCAL 2017–2019 PERFORMANCE PERIOD⁽¹⁾

Stock-Settled Stock Appreciation Rights

We award stock-settled stock appreciation rights (SSARs) that allow our NEOs to receive the value of the appreciation of our Class B common stock between the grant date and the exercise date. Unless the Committee determines otherwise, SSARs are granted annually on the date of the Annual Meeting. The number of Class B common stock SSARs awarded to our NEOs for fiscal 2019 was determined by dividing the total dollar value of each SSAR award by the value of one SSAR (determined by the Black-Scholes method) at the close of trading on the grant date. SSARs become exercisable on the first day of the third fiscal year following the grant date, and generally are exercisable for seven fiscal years thereafter. The SSARs granted in July 2018 (for fiscal 2019) therefore become exercisable on May 1, 2021, and expire on April 30, 2028.

SSAR GRANTS IN FISCAL 2019 (IN CLASS B COMMON STOCK)

OTHER COMPENSATION ELEMENTS

Post-Termination Compensation and Benefits

We do not have employment agreements with any of our NEOs, nor do we maintain a formal severance plan that provides for post-termination compensation or benefits.

Employee Benefits and Perquisites

We provide our NEOs with certain benefits that are available to nearly all of our salaried employees in the United States, including term life insurance (equal to two times target cash compensation), travel accident insurance, matching contributions

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COMPENSATION DISCUSSION AND ANALYSIS  |  COMPENSATION POLICIES AND PRACTICES

to a 401(k) savings plan, medical and dental insurance, and a pension that grows with each additional year of service and pay. NEOs and certain other executives receive additional benefits, including a leased automobile, automobile insurance, and limited reimbursement of financial planning expenses.

We purchase tickets to sporting and entertainment events for business outings with customers and suppliers. If the tickets are not used for business purposes, employees (including the NEOs) may use the tickets at no incremental cost to Brown-Forman. In addition, we occasionally invite the NEOs and their spouses to social events, including retirement celebrations, award dinners, and similar functions. We believe these events provide valuable opportunities for our senior executives to establish and develop relationships with our directors, long-term stockholders, employees, and each other, furthering our objectives of retention and having a strong and cohesive management team. For more detail on these employee benefits, please see the “All Other Compensation” column of the Fiscal 2019 Summary Compensation Table found on page 40.

Brown-Forman Corporation Non-Qualified Savings Plan

We provide our NEOs and other senior executives the opportunity to defer income on a pre-tax basis to help them plan for future financial needs. The Brown-Forman Corporation Non-Qualified Savings Plan (Savings Plan) enhances the perceived value of compensation for participants at very little cost to Brown-Forman. The Savings Plan allows our NEOs to make pre-tax deferrals of up to 50% of base salary (including holiday bonus) and up to 75% of short- and long-term cash incentives. Participants in the Savings Plan may notionally invest their plan balances in mutual funds within generally the same asset classes available to participants in our qualified 401(k) savings plan.

In the event a participant’s deferrals into the Savings Plan reduce the participant’s taxable compensation that would otherwise be considered 401(k)-eligible pay upon which a company matching contribution is calculated, Brown-Forman will contribute to the Savings Plan to make up for any lost match under the 401(k) plan. All deferrals to the Savings Plan, and Brown-Forman’s contributions to it, are 100% vested when made, as are any deemed earnings related to those contributions. The benefits owed under the Savings Plan are general unsecured obligations of Brown-Forman. Brown-Forman is not entitled to an income tax deduction on the benefits owed under the Savings Plan until the benefits become taxable to the participants, which generally will be when the benefits are actually paid. Benefits accumulated under the Savings Plan are payable at either a participant-selected date at least two years after a contribution is made or after a participant’s employment terminates. Amounts accumulated are payable in a lump sum six months after termination, except in the case of retirement, where the form of payment (lump sum or installments of up to ten years) and the time of payment (up to ten years after retirement) will be chosen by the participant. The fiscal 2019 Non-Qualified Deferred Compensation Table on page 47 contains information about NEO activity in the Savings Plan during fiscal 2019, including employee contributions, gains, and losses attributable to the change in market value of the notional investments, and any payments to our NEOs.

COMPENSATION POLICIES AND PRACTICES

Incentive Compensation Recoupment Policy

The Committee oversees our Incentive Compensation Recoupment Policy. If Brown-Forman restates its reported financial results due to material noncompliance with any financial reporting requirement under the U.S. federal securities laws within three years after the date the results are first publicly issued or filed, or if we discover an error in the calculation of any incentive compensation that was awarded or paid within the preceding three years, then Brown-Forman will, at the direction of the Committee, seek to recover all or part of the incentive compensation awarded or paid to executive officers that would not have been awarded or paid based upon the restated financial results or correct incentive calculation. If the Committee determines that any executive officer engaged in fraud or intentional misconduct in connection with any such material noncompliance or error in incentive calculation, the Committee can direct Brown-Forman to seek to recover incentive compensation awarded or paid to that executive officer that would not have been awarded or paid based upon the restated financial results or correct calculation for a period of six years after the date such financial results were first publicly issued or filed or six years prior to the date such fraud or misconduct was discovered.

Retirement Age Policy

Our NEOs and other executive officers with high level policy-making positions are subject to a mandatory retirement age of 65. Such NEOs and executive officers are notified of the mandatory retirement policy at age 60 (or older if criteria for mandatory retirement are met following age 60). An employee who does not become an NEO or executive officer until after attaining the age of 65 will have a two-year grace period once becoming subject to the policy.

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COMPENSATION DISCUSSION AND ANALYSIS  |  COMPENSATION POLICIES AND PRACTICES

Deductibility of Compensation

Section 162(m) of the Internal Revenue Code limits to $1 million the amount of annual compensation Brown-Forman may deduct for tax purposes for compensation paid to each of the Chief Executive Officer, the Chief Financial Officer, and the three highest compensated officers other than these two individuals. Prior to 2018, Brown-Forman could deduct compensation above $1 million if it was “performance-based compensation” within the meaning of Section 162(m). Under the Tax Cuts and Jobs Act of 2017, effective for taxable years beginning on or after January 1, 2018, the exception under Section 162(m) for performance-based compensation is no longer available, subject to transition relief for certain grandfathered arrangements in effect as of November 2, 2017.

To maintain flexibility, Brown-Forman has never had a policy requiring that all NEO compensation be fully deductible, but the Committee has generally considered the issue of deductibility when making compensation decisions.

Compensation Risk Assessment

To determine the level of risk arising from our compensation policies and practices, we conduct an annual risk assessment, with oversight by the Committee, its independent advisor, FWC, and by our internal auditors. The assessment is based on a framework provided by FWC and examines the risk associated with the compensation programs applicable to all of our employees. The assessment also considers the features of our compensation programs that are designed to mitigate risk. We believe our compensation programs encourage and reward an appropriate level of risk taking. Management and the Committee concluded, based upon the results of the assessment for fiscal 2019, that our compensation policies and practices are not reasonably likely to have a material adverse effect on Brown-Forman.

Equity Award Grants

Under our equity award grant policy, the grant date of any award must be the date of the Committee or Board meeting at which it was approved, and the grant price must be the closing price of the relevant class of our common stock on the grant date. We do not have a program, plan, or practice of timing equity award grants in conjunction with the release of material nonpublic information (or vice versa). We have never re-priced or back-dated options or SSARs granted under any of our equity compensation plans, and our 2013 Omnibus Compensation Plan specifically prohibits such practices.

Source of Plan Shares

We try to limit the source of shares delivered to participants under our equity compensation plans to those we purchase from time to time on the open market (in connection with our publicly announced share repurchase programs), in private transactions, or otherwise. If we determine that the timing of such purchases may unduly affect the market price of the shares, the purchases may be spread over a period of time sufficient to minimize this effect. We may use newly-issued shares to cover exercises or redemptions of awards and then purchase an equal number of shares on the open market or otherwise as quickly as is reasonably practicable thereafter. These practices minimize long-term dilution to our stockholders.

Margin Sales, Derivative, and Hedging Transactions Prohibited

Our Insider Trading Policy prohibits employees, officers, and directors from selling Brown-Forman securities that they do not own (a “short sale”), purchasing shares on margin, or holding shares in a margin account. Employees, officers, and directors also are prohibited from engaging in transactions involving exchange-traded options, puts, calls, or other derivative securities based on Brown-Forman securities and in any hedging or monetization transactions accomplished through a number of possible mechanisms, including the use of financial instruments such as prepaid variable forwards, equity swaps, and collars.

Our Policy on Stock Ownership Guidelines

We do not have stock ownership guidelines for our employees. Due to our family-controlled status, we do not believe that encouraging employees to accumulate large quantities of Brown-Forman stock is a top priority. However, the Committee does review the stock ownership status of our NEOs before granting additional stock-based compensation each year to ensure that such grants are necessary and to assess potential retention risk. We list the stock beneficially owned by our NEOs on page 52.

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Compensation Committee Report

We, the Compensation Committee of the Board of Directors of Brown-Forman Corporation, have reviewed and discussed with management the above Compensation Discussion and Analysis, and based on such review and discussion, have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

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Compensation Tables

SUMMARY COMPENSATION

The following table sets forth the compensation of our NEOs for the fiscal years shown below, calculated under SEC rules.

FISCAL 2019 SUMMARY COMPENSATION TABLE

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COMPENSATION TABLES  |  SUMMARY COMPENSATION

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COMPENSATION TABLES  |  GRANTS OF PLAN-BASED AWARDS

GRANTS OF PLAN-BASED AWARDS

The following table contains information regarding the equity and non-equity awards granted to our NEOs during fiscal 2019 under our 2013 Omnibus Compensation Plan. For additional information on the fiscal 2019 awards, please see the Compensation Discussion and Analysis, which begins on page 24.

FISCAL 2019 GRANTS OF PLAN-BASED AWARDS TABLE