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In a move to enhance corporate governance practices, The Hershey Company (NYSE:HSY), a $37.7 billion market cap company with a "GREAT" financial health score according to InvestingPro, has announced amendments to its bylaws that introduce a majority voting standard for the election of directors in uncontested elections and a director resignation policy. The changes were effective as of Monday, March 4, 2025, following approval by the company’s Board of Directors.
The new majority voting standard dictates that director nominees will be elected based on the majority of votes cast for or against their election. This applies to both the election of directors by holders of the company’s Common Stock, voting as a separate class, and the election of directors by holders of the company’s Common Stock and Class B Common Stock, voting together as a single class. This governance enhancement comes as Hershey maintains its strong track record of 55 consecutive years of dividend payments, with 15 consecutive years of dividend increases.
Additionally, the bylaw amendments establish a director resignation policy for both contested and uncontested elections. Under this policy, any incumbent director nominee who receives more votes against than for their election must offer to resign. The Board, excluding the director in question, will then decide whether to accept the resignation within 90 days, based on the recommendation of the Board’s Governance Committee. The company will disclose the Board’s decision and its rationale, if applicable, in a Form 8-K filing with the Securities and Exchange Commission.
The amendments also require that the Chairman of the Board be an independent director. However, there is a provision that allows Michele G. Buck, who currently serves as both a director and Chief Executive Officer of Hershey, to continue in her role as Chairman of the Board.
These governance enhancements reflect Hershey’s commitment to aligning with best practices and ensuring clear and effective leadership structures. Trading at a P/E ratio of 17.15 with strong profitability metrics, the company demonstrates solid fundamental performance. The complete text of the amended bylaws is attached as Exhibit 3.1 to the Current Report on Form 8-K filed by the company. For detailed analysis and additional insights, including 12 more exclusive ProTips, check out the comprehensive research report available on InvestingPro.
Investors and stakeholders can view the details of the amendments in the aforementioned exhibit, which provides full context for the changes made to Hershey’s governance framework. The information reported is based on a press release statement from The Hershey Company.
In other recent news, Hershey Co has expressed concerns about the ICE New York cocoa futures market, citing issues with liquidity and volatility that may not accurately reflect the global market. This situation has reportedly led to reduced participation and significant price fluctuations. Meanwhile, CFRA analyst Arun Sundaram raised the price target for Hershey shares to $192, maintaining a Hold rating, based on anticipated earnings per share (EPS) growth by 2026. Citi analyst Thomas Palmer also adjusted Hershey’s price target to $173, reflecting expectations of reduced cocoa costs in 2026, while maintaining a Neutral rating.
Additionally, Hershey has announced special retention awards for top executives, including time-based restricted stock units (RSUs) for key leaders, as part of its strategy to retain management talent. The awards are contingent on continued employment until March 2027. In related developments, Ghana’s cocoa arrivals have surged by 70% due to improved harvests and efforts to curb smuggling, a factor that could impact global cocoa supply and prices. Hershey’s recent presentations and financial updates have influenced analysts’ projections, with both CFRA and Citi adjusting their models based on current market conditions and future cost expectations. These developments indicate a dynamic environment for Hershey as it navigates market fluctuations and cost considerations.
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