HERSHEY CO (Form: DEF 14A, Received: 04/07/2021 08:05:10)

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. )

Filed by the Registrant X Filed by a Party other than the Registrant ☐

Check the appropriate box:


☐			Preliminary Proxy Statement


☐			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))


X			Definitive Proxy Statement


☐			Definitive Additional Materials


☐			Soliciting Material Pursuant to §240.14a-12

The Hershey Company

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):


X			No fee required.


☐			Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)Title of each class of securities to which transaction applies:

(2)Aggregate number of securities to which transaction applies:

(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4)Proposed maximum aggregate value of transaction:

(5)Total fee paid:


☐			Fee paid previously with preliminary materials.


☐			Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)Amount Previously Paid:

(2)Form, Schedule or Registration Statement No.:

(3)Filing Party:

(4)Date Filed:


Notice of 2021 Annual Meeting of Stockholders

Monday, May 17, 2021

10:00 a.m., Eastern Daylight Time

The 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of The Hershey Company (the “Company”) will be held on Monday, May 17, 2021, beginning at 10:00 a.m., Eastern Daylight Time. Due to the ongoing public health impact of the coronavirus pandemic, this year’s Annual Meeting will again be a virtual meeting conducted solely via live webcast. You will be able to attend the Annual Meeting, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/HSY2021. You may also listen to the meeting by calling 1-877-328-2502. You will not be able to attend the Annual Meeting in person. Additional information regarding attending the Annual Meeting, voting your shares and submitting questions can be found in the Proxy Statement.

The purposes of the meeting are as follows:


1			To elect the 12 nominees named in the Proxy Statement to serve as directors of the Company until the 2022 Annual Meeting of Stockholders;
2.			To ratify the appointment of Ernst & Young LLP as the Company’s independent auditors for the fiscal year ending December 31, 2021;
3.			To conduct an advisory vote regarding the compensation of the Company’s named executive officers; and
4.			To discuss and take action on any other business that is properly brought before the Annual Meeting.

The Proxy Statement accompanying this Notice of 2021 Annual Meeting of Stockholders describes each of these items in detail. The Proxy Statement contains other important information that you should read and consider before you vote.

The Board of Directors of the Company has established the close of business on March 18, 2021 as the record date for determining the stockholders who are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof.

The Company is furnishing proxy materials to its stockholders through the internet as permitted under the rules of the Securities and Exchange Commission. Under these rules, many of the Company’s stockholders will receive a Notice of Internet Availability of Proxy Materials instead of a paper copy of the Notice of 2021 Annual Meeting of Stockholders and Proxy Statement, our proxy card, and our Annual Report on Form 10-K. We believe this process gives us the opportunity to serve you more efficiently by making the proxy materials available quickly online and reducing costs associated with printing and postage. Stockholders who do not receive a Notice of Internet Availability of Proxy Materials will receive a paper copy of the proxy materials by mail.

By order of the Board of Directors,

James Turoff

Vice President, Assistant Secretary

April 7, 2021

Your vote is important. Instructions on how to vote are contained in our Proxy Statement and in the Notice of Internet Availability of Proxy Materials. Please cast your vote by telephone or over the internet as described in those materials. Alternatively, if you requested a copy of the proxy/voting instruction card by mail, you may mark, sign, date and return the proxy/voting instruction card in the envelope provided.

TABLE OF CONTENTS


NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

PROXY STATEMENT SUMMARY
2021 Annual Meeting of Stockholders			1
Voting Matters and Board Recommendations			1
Our Director Nominees			2
Governance Highlights			3
Company Strategy and 2020 Business Highlights			5
Executive Compensation Highlights			6
PROXY STATEMENT
Questions and Answers about the Annual Meeting			7
Corporate Governance			13
The Board of Directors			19
Meetings and Committees of the Board			24
Proposal No. 1 – Election of Directors			27
Non-Employee Director Compensation			34
Share Ownership of Directors, Management and Certain Beneficial Owners			38
Audit Committee Report			42
Information about our Independent Auditors			44
Proposal No. 2 – Ratification of Appointment of Independent Auditors			45
Compensation Discussion & Analysis			46
Executive Compensation			46
Executive Summary			46
The Role of the Compensation Committee			52
Compensation Components			53
Setting Compensation			54
Base Salary			55
Annual Incentives			55
Long-Term Incentives			58
Perquisites			61
Retirement Plans			61
Employment Agreements			62
Severance and Change in Control Plans			62
Stock Ownership Guidelines			62
Other Compensation Policies and Practices			63
Compensation Committee Report			64
2020 Summary Compensation Table			65
2020 Grants of Plan-Based Awards Table			67
Outstanding Equity Awards at 2020 Fiscal-Year End Table			69
2020 Option Exercises and Stock Vested Table			70
2020 Pension Benefits Table			71
2020 Non-Qualified Deferred Compensation Table			73
Potential Payments upon Termination or Change in Control			75
Separation Payments under Confidential Separation Agreement and General Release			82
CEO Pay Ratio Disclosure			83
Equity Compensation Plan Information			84
Proposal No. 3 – Advise on Named Executive Officer Compensation			85
Certain Transactions and Relationships			86
Compensation Committee Interlocks and Insider Participation			87
Other Matters			87


Proxy Statement Summary

2021 ANNUAL MEETING OF STOCKHOLDERS


Date and Time:						Monday, May 17, 2021
						10:00 a.m., Eastern Daylight Time

Meeting Access:						Webcast: www.virtualshareholdermeeting.com/HSY2021
						Phone: 1-877-328-2502 (listen only mode)

Record Date:						March 18, 2021

VOTING MATTERS AND BOARD RECOMMENDATIONS


Voting Matter		Board Vote Recommendation	Page Number with More Information
Proposal 1:	Election of Directors	FOR each nominee	27
Proposal 2:	Ratification of Appointment of Independent Auditors	FOR	45
Proposal 3:	Advise on Named Executive Officer Compensation	FOR	85

This Proxy Statement Summary contains highlights of certain information in this Proxy Statement. Because it is only a summary, it does not contain all the information that you should consider prior to voting. Please review the complete Proxy Statement and the Company’s 2020 Annual Report on Form 10-K that accompanies the Proxy Statement for additional information.

OUR DIRECTOR NOMINEES

You have the opportunity to vote on the election of the following 12 nominees for director. Additional information regarding each director nominee’s experience, skills and qualifications to serve as a member of the Company’s Board of Directors (the “Board”) can be found in the Proxy Statement under Proposal No. 1 – Election of Directors.

Name

Age

Years on

Board

Position

Independent

Committee

Memberships*

Pamela M. Arway

Former President, Japan/Asia Pacific/Australia Region, American Express International, Inc.

Yes

Compensation+
Executive
Finance & Risk

James W. Brown

Director, Hershey Trust Company; Member, Board of Managers, Milton Hershey School

Yes

Audit
Governance

Michele G. Buck**

Chairman of the Board, President and Chief Executive Officer, The Hershey Company

Executive+

Victor L. Crawford

Chief Executive Officer, Pharmaceutical Segment, Cardinal Health, Inc.

Yes

Audit
Compensation

Robert M. Dutkowsky

Former Executive Chairman and Chief Executive Officer, Tech Data Corporation

Yes

Finance & Risk
Governance

Mary Kay Haben

Former President, North America, Wm. Wrigley Jr. Company

Yes

Compensation
Executive
Governance+

James C. Katzman

Director, Hershey Trust Company; Member, Board of Managers, Milton Hershey School

Yes

Finance & Risk
Governance

M. Diane Koken

Chairman of the Board, Hershey Trust Company and Milton Hershey School

Yes

Audit
Compensation

Robert M. Malcolm

Former President, Global Marketing, Sales & Innovation, Diageo PLC

Yes

Audit
Executive
Finance & Risk+

Anthony J. Palmer***

Chief Executive Officer,
TropicSport

Yes

Audit****
Compensation****
Executive
Finance & Risk****
Governance

Juan R. Perez

Chief Information and Engineering Officer, United Parcel Service, Inc.

Yes

Compensation
Finance & Risk

Wendy L. Schoppert

Former Executive Vice President and Chief Financial Officer, Sleep Number Corporation

Yes

Audit
Finance & Risk

____________________


*			Compensation = Compensation and Executive Organization Committee Finance & Risk = Finance and Risk Management Committee
**			Chairman of the Board
***			Lead Independent Director
****			Mr. Palmer, as our Lead Independent Director, is an ex-officio member of the Audit Committee, the Compensation and Executive Organization Committee and the Finance and Risk Management Committee
+			Committee Chair

GOVERNANCE HIGHLIGHTS


Composition of Director Nominees

Over 50% of director nominees are diverse


						Female						Racial/Ethnic						Non-Diverse									50-59						60-69

Strong focus on board refreshment and independence

Director Tenure

Average Tenure: 5 Years

0 - 2 Years

3 - 6 Years

7 - 10 Years

11+ Years


11 Independent Director Nominees


Board Highlights

Director nominees have appropriate mix of experiences, skills, qualifications and backgrounds to drive strategy and risk oversight

Risk Management Operational Leadership

Innovation Experience International Experience

Consumer Packaged Goods Financial/Investment Leadership

Mergers & Acquisitions Technology Experience

Government Relations/Regulatory Supply Chain

Corporate Governance

Board Structure Ensures Strong Oversight

Policies and Practices
Align to High Corporate Governance Standards

Strong Alignment with
Stockholders’ Interests

•Four standing independent Board committees

•Strong Lead Independent Director position

•Independent directors meet separately at each

regularly-scheduled Board meeting

•Frequent Board and committee meetings to ensure awareness and alignment

•All directors elected annually

•Highly qualified directors reflect broad mix of skills, experiences and attributes

•Active role in risk oversight, including separate risk management committee

•Strong clawback and anti-hedging policies

•Significant stock ownership requirements

•Annual advisory vote on executive compensation

◦Greater than 90% stockholder approval every year

COMPANY STRATEGY AND 2020 BUSINESS HIGHLIGHTS


16,880	$8.1B	90+
EMPLOYEES GLOBALLY	IN ANNUAL REVENUES	BRANDS


Our vision is to be an innovative snacking powerhouse
We are focused on four strategic imperatives to ensure the Company’s success now and in the future:
Drive core confection business and broaden participation in snacking	Deliver profitable, international growth	Expand competitive advantage through differentiated capabilities	Responsibly manage our operations to ensure the long-term sustainability of our business, our planet and our people


2020 Performance Highlights
2.0%			8.8%
NET SALES GROWTH			ADJUSTED EARNINGS PER SHARE-DILUTED GROWTH(1)

Over the last three years, we have delivered advantaged
Total Shareholder Return versus our peer group


Total Shareholder Return December Average 2017 through December Average 2020(2)

(1)While we report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), we also use non-GAAP financial measures in order to provide additional information to investors to facilitate the comparison of past and present performance. Some of the financial targets under our short- and long-term incentive programs are also based on non-GAAP financial measures. Non-GAAP financial measures are used by management in evaluating results of operations internally and in assessing the impact of known trends and uncertainties on our business, but they are not intended to replace the presentation of financial results in accordance with GAAP. Adjusted earnings per share-diluted is a non-GAAP financial measure. We define adjusted earnings per share-diluted as diluted earnings per share of the Company’s common stock (“Common Stock”), excluding costs associated with business realignment activities, acquisition-related costs and benefits, long-lived and intangible asset impairment charges, gains and losses associated with mark-to-market commodity derivatives, pension settlement charges relating to Company-directed initiatives and an adjustment to a reserve associated with a prior year facility closure.

(2)For our 2018-2020 Performance Stock Unit awards, Total Shareholder Return was measured based on the average closing price of the Common Stock in the month of December 2017 as compared to the average closing price of the Common Stock in the month of December 2020.

EXECUTIVE COMPENSATION HIGHLIGHTS

Our strategic plan and the financial metrics we establish to help achieve and measure success against that plan serve as the foundation of our executive compensation program. Our executive compensation program is intended to provide competitive compensation based on performance and contributions to the Company, to incentivize, attract and retain key executives, to align the interests of our executive officers and our stockholders and to drive stockholder value over the long term. To achieve these objectives, our executive compensation program includes the following key features:

•We Pay for Performance by aligning our short- and long-term incentive compensation plans with business strategies to reward executives who achieve or exceed applicable Company and business division goals.

◦The target total direct compensation mix in 2020 for our Chief Executive Officer (“CEO”) and our other named executive officers (“NEOs”), excluding Kevin R. Walling, our former Senior Vice President, Chief Human Resources Officer and Mary Beth West, our former Senior Vice President, Chief Growth Officer, who both retired from the Company on February 29, 2020, reflects this philosophy.


At-Risk Compensation = 87%			At-Risk Compensation = 71%

◦Payouts to our NEOs under our annual cash incentive program for 2020 were 100% performance based.

◦65% of the equity awards granted to our NEOs in 2020 took the form of performance stock units, which will be earned based on achievement of pre-determined performance goals.

•We Pay Competitively by targeting total direct compensation for our executive officers, in aggregate, at competitive pay levels using the median of our peer group for reference.

◦We regularly review and, as appropriate, make changes to our peer group to ensure it is representative of our market for talent, our business portfolio, our overall size and our global footprint.

◦We do not provide excessive benefits and perquisites to our executives.

•We Align Our Compensation Program with Stockholder Interests by providing a significant amount of each NEO’s compensation opportunity in the form of equity and requiring executive stock ownership.

◦Equity grants represented 67% of our CEO’s 2020 target total direct compensation and, on average, 51% of the 2020 target total direct compensation for our other NEOs, excluding Mr. Walling and Ms. West.

◦Stock ownership requirements for our NEOs range from 6x salary (for our CEO) to 3x salary (for NEOs other than our CEO).


Proxy Statement

The Board of Directors (the “Board”) of The Hershey Company (the “Company,” “we,” or “us”) is furnishing this Proxy Statement and the accompanying form of proxy in connection with the solicitation of proxies for the 2021 Annual Meeting of Stockholders of the Company (the “Annual Meeting”). The Annual Meeting will be held on May 17, 2021, beginning at 10:00 a.m., Eastern Daylight Time (“EDT”). Due to the ongoing public health impact of the coronavirus pandemic (“COVID-19”), this year’s Annual Meeting will again be a virtual meeting conducted solely via live webcast. You will be able to attend the Annual Meeting, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/HSY2021. You may also listen to the Annual Meeting by calling 1-877-328-2502. You will not be able to attend the Annual Meeting in person.

Important Notice Regarding the Availability of Proxy Materials for the

2021 Annual Meeting of Stockholders to be held on May 17, 2021

The Notice of 2021 Annual Meeting of Stockholders and Proxy Statement, our proxy card, our Annual Report on Form 10-K and other annual meeting materials are available free of charge on the internet at www.proxyvote.com. We intend to begin mailing our Notice of Internet Availability of Proxy Materials to stockholders on or about April 7, 2021. At that time, we also will begin mailing paper copies of our proxy materials to stockholders who requested them.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING


Q:			Why is this year’s Annual Meeting being held as a virtual-only meeting?


A:			This year’s Annual Meeting is again being held as a virtual-only meeting conducted solely via live webcast due to the ongoing public health impact of the coronavirus pandemic COVID-19 and to support the health and well-being of our stockholders, employees and community members. Holding the Annual Meeting as a virtual-only meeting allows us to reach the broadest number of stockholders while maintaining our commitment to health and safety.


Q:			Who is entitled to attend and vote at the Annual Meeting?


A:			You can attend and vote at the Annual Meeting if, as of the close of business on March 18, 2021 (the “Record Date”), you were a stockholder of record of the Company’s common stock (“Common Stock”) or Class B common stock (“Class B Common Stock”). As of the Record Date, there were 146,302,245 shares of our Common Stock and 60,613,777 shares of our Class B Common Stock outstanding.

			If you were not a stockholder of record as of the Record Date, you may still attend the Annual Meeting by logging into the webcast as a guest, but you will not be able to vote before or during the meeting.


Q:			How do I attend the Annual Meeting?


A:			This year’s Annual Meeting will be a virtual-only meeting conducted solely via live webcast.


To participate in the Annual Meeting, visit www.virtualshareholdermeeting.com/HSY2021 and enter the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card. The live webcast will begin at 10:00 a.m. EDT on Monday, May 17, 2021. We encourage you to access the virtual meeting platform at least 15 minutes prior to the start time. If you do not have a 16-digit control number, you will still be able to access the webcast as a guest, but will not be able to vote your shares or ask a question during the meeting. You may also listen to the Annual Meeting by calling 1-877-328-2502, but you will not be able to vote your shares or ask a question telephonically.


The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and mobile phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong WiFi connection wherever they intend to participate in the meeting. Further instructions on how to attend and participate in the Annual Meeting, including how to demonstrate proof of stock ownership, will be posted on the virtual meeting website.

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. Technical support will be available on the virtual meeting platform beginning at 9:30 a.m. EDT on the day of the meeting and will remain available until 30 minutes after the meeting has finished.


Q:			Can I submit questions before or during the Annual Meeting?


A:			Stockholders have multiple opportunities to submit questions for the Annual Meeting. If you wish to submit a question prior to the Annual Meeting, you may log into www.proxyvote.com and enter your 16-digit control number. Once past the login screen, click on “Question for Management,” type in your question, and click “Submit.” Alternatively, if you wish to submit a question during the Annual Meeting, visit www.virtualshareholdermeeting.com/HSY2021, type your question into the “Ask a Question” field, and click “Submit.”

			Questions pertinent to meeting matters will be answered during the Annual Meeting, subject to time constraints. Questions regarding personal matters, including those relating to employment, product or service issues or suggestions for product innovations may not be considered pertinent to meeting matters and therefore may not be answered. Any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints will be posted online and answered on the Investors section of our website at www.thehersheycompany.com. The questions and answers will be available as soon as practical after the Annual Meeting and will remain available until one week after posting.


Q:			What is the difference between a registered stockholder and a stockholder who owns stock in street name?


A:			If you hold shares of Common Stock or Class B Common Stock directly in your name on the books of the Company’s transfer agent, you are a registered stockholder. If you own your Company shares indirectly through a broker, bank or other holder of record, then you are a beneficial owner and those shares are held in street name.


Q:			What are the voting rights of each class of stock?


A:			Stockholders are entitled to cast one vote for each share of Common Stock held as of the Record Date, and 10 votes for each share of Class B Common Stock held as of the Record Date. There are no cumulative voting rights.


Q:			Can I vote my shares before the Annual Meeting?


A:			Yes. If you are a registered stockholder, there are three ways to vote your shares before the Annual Meeting:


:			By internet (www.proxyvote.com) – Use the internet to transmit your voting instructions until 11:59 p.m. EDT on May 16, 2021. Have your Notice of Internet Availability of Proxy Materials or proxy card available and follow the instructions on the website to vote your shares.

)			By telephone (800-690-6903) – Submit your vote by telephone until 11:59 p.m. EDT on May 16, 2021. Have your Notice of Internet Availability of Proxy Materials or proxy card available and follow the instructions provided by the recorded message to vote your shares.

,			By mail – If you received a paper copy of the proxy materials, you can vote by mail by filling out the proxy card enclosed with those materials and returning it pursuant to the instructions set forth on the card. To be valid, proxy cards must be received before the start of the Annual Meeting.


If your shares are held in street name, your broker, bank or other holder of record may provide you with a Notice of Internet Availability of Proxy Materials that contains instructions on how to access our proxy materials and vote online or to request a paper or email copy of our proxy materials. If you received these materials in paper form, the materials included a voting instruction card so you can instruct your broker, bank or other holder of record how to vote your shares.

Please see the Notice of Internet Availability of Proxy Materials or the information your bank, broker or other holder of record provided you for more information on these voting options.


Q:			Can I vote during the Annual Meeting instead of by proxy?


A:			If you are a registered stockholder, you can vote during the Annual Meeting any shares that were registered in your name as the stockholder of record as of the Record Date.

			If your shares are held in street name, you can vote those shares during the Annual Meeting only if you have a legal proxy from the holder of record. If you plan to attend and vote your street-name shares during the Annual Meeting, you should request a legal proxy from your broker, bank or other holder of record.

			To vote your shares during the Annual Meeting, log into www.virtualshareholdermeeting.com/HSY2021 and follow the voting instructions. You will need the 16-digit control number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card. Shares may not be voted after the polls close.

			Whether or not you plan to attend the Annual Meeting, we strongly encourage you to vote your shares by proxy prior to the Annual Meeting.


Q:			Can I revoke my proxy or change my voting instructions once submitted?


A:			If you are a registered stockholder, you can revoke your proxy and change your vote prior to the Annual Meeting by:

•Sending a written notice of revocation to our Secretary at 19 East Chocolate Avenue, Hershey, Pennsylvania 17033 (the notification must be received by the close of business on May 12, 2021);

•Voting again by internet or telephone prior to 11:59 p.m. EDT on May 16, 2021 (only the latest vote you submit will be counted); or

•Submitting a new properly signed and dated paper proxy card with a later date (your proxy card must be received before the start of the Annual Meeting).


			If your shares are held in street name, you should contact your broker, bank or other holder of record about revoking your voting instructions and changing your vote prior to the Annual Meeting.

			If you are eligible to vote during the Annual Meeting, you also can revoke your proxy or voting instructions and change your vote during the Annual Meeting by logging into www.virtualshareholdermeeting.com/HSY2021 and following the voting instructions.


Q:			What will happen if I submit my proxy but do not vote on a proposal?


A:			If you submit a valid proxy but fail to provide instructions on how you want your shares to be voted, your proxy will be voted in the manner recommended by the Board on all matters presented in this Proxy Statement, which is as follows:

•“FOR” the election of all director nominees;

•“FOR” the ratification of the appointment of Ernst & Young LLP as our independent auditors; and

•“FOR” the approval of the compensation of the Company’s named executive officers (“NEOs”).


			If any other item is properly presented for a vote at the Annual Meeting, the shares represented by your properly submitted proxy will be voted at the discretion of the proxies.


Q:			What will happen if I neither submit my proxy nor vote my shares during the Annual Meeting?


A:			If you are a registered stockholder, your shares will not be voted.


			If your shares are held in street name, your broker, bank or other holder of record may vote your shares on certain “routine” matters. The ratification of independent auditors is currently considered to be a routine matter. On this matter, your broker, bank or other holder of record can:

•Vote your street-name shares even though you have not provided voting instructions; or

•Choose not to vote your shares.


			The other matters you are being asked to vote on are not routine and cannot be voted by your broker, bank or other holder of record without your instructions. When a broker, bank or other holder of record is unable to vote shares for this reason, it is called a “broker non-vote.”


Q:			How do I vote my shares in the Company’s Automatic Dividend Reinvestment Service Plan?


A:			Computershare, our transfer agent, has arranged for any shares that you hold in the Automatic Dividend Reinvestment Service Plan to be included in the total registered shares of Common Stock shown on the Notice of Internet Availability of Proxy Materials or proxy card we have provided you. By voting these shares, you also will be voting your shares in the Automatic Dividend Reinvestment Service Plan.


Q:			What does it mean if I received more than one Notice of Internet Availability of Proxy Materials or proxy card?


A:			You probably have multiple accounts with us and/or brokers, banks or other holders of record. You should vote all of the shares represented by these Notices/proxy cards. Certain brokers, banks and other holders of record have procedures in place to discontinue duplicate mailings upon a stockholder’s request. You should contact your broker, bank or other holder of record for more information. Additionally, Computershare can assist you if you want to consolidate multiple registered accounts existing in your name. To contact Computershare, visit their website at www.computershare.com/investor; or write to P.O. Box 505000, Louisville, KY 40233-5000; or for overnight delivery, to Computershare, 462 South 4th Street, Suite 1600, Louisville, KY 40202; or call:

•(800) 851-4216 Domestic Holders

•(201) 680-6578 Foreign Holders

•(800) 952-9245 Domestic TDD line for hearing impaired

•(312) 588-4110 Foreign TDD line for hearing impaired


Q:			How many shares must be present to conduct business during the Annual Meeting?


A:			To carry on the business of the Annual Meeting, a minimum number of shares, constituting a quorum, must be present, either electronically or by proxy.

			On most matters, the votes of the holders of the Common Stock and Class B Common Stock are counted together. However, there are some matters that must be voted on only by the holders of one class of stock. We will have a quorum for all matters to be voted on during the Annual Meeting if the following number of votes is present, electronically or by proxy:

•For any matter requiring the vote of the Common Stock voting separately: a majority of the votes of the Common Stock outstanding on the Record Date.

•For any matter requiring the vote of the Class B Common Stock voting separately: a majority of the votes of the Class B Common Stock outstanding on the Record Date.

•For any matter requiring the vote of the Common Stock and Class B Common Stock voting together without regard to class: a majority of the votes of the Common Stock and Class B Common Stock outstanding on the Record Date.


			It is possible that we could have a quorum for certain items of business to be voted on during the Annual Meeting and not have a quorum for other matters. If that occurs, we will proceed with a vote only on the matters for which a quorum is present.


Q:			What vote is required to approve each proposal?


A:			Assuming that a quorum is present:

•Proposal No. 1: Election of Directors – the two nominees to be elected by holders of our Common Stock voting separately as a class who receive the greatest number of votes cast “FOR,” and the 10 nominees to be elected by holders of our Common Stock and Class B Common Stock voting together who receive the greatest number of votes cast “FOR,” will be elected as directors.

•Proposal No. 2: Ratification of the Appointment of Ernst & Young LLP as Independent Auditors – the affirmative vote of at least a majority of the votes of the Common Stock and Class B Common Stock (voting together as a class) represented at the Annual Meeting.

•Proposal No. 3: Advise on Named Executive Officer Compensation – the affirmative vote of at least a majority of the votes of the Common Stock and Class B Common Stock (voting together as a class) represented at the Annual Meeting.


Q:			Are abstentions and broker non-votes counted in the vote totals?


A:			Abstentions are counted as being present and entitled to vote in determining whether a quorum is present. Shares as to which broker non-votes exist will be counted as present and entitled to vote in determining whether a quorum is present for any matter requiring the vote of the Common Stock and Class B Common Stock voting together as a class, but they will not be counted as present and entitled to vote in determining whether a quorum is present for any matter requiring the vote of the Common Stock or Class B Common Stock voting separately as a class.

			If you mark or vote “abstain” on Proposal Nos. 2 or 3, the abstention will have the effect of being counted as a vote “AGAINST” the proposal. Broker non-votes with respect to Proposal Nos. 1-3 are not included in vote totals and will not affect the outcome of the vote on those proposals.


Q:			Who will pay the cost of soliciting votes for the Annual Meeting?


A:			We will pay the cost of preparing, assembling and furnishing proxy solicitation and other required Annual Meeting materials. We do not use a third-party solicitor. It is possible that our directors, officers and employees might solicit proxies by mail, telephone, telefax, electronically over the internet or by personal contact, without receiving additional compensation. We will reimburse brokers, banks and other nominees, fiduciaries and custodians who nominally hold shares of our stock as of the Record Date for the reasonable costs they incur furnishing proxy solicitation and other required Annual Meeting materials to street-name holders who beneficially own those shares on the Record Date.

CORPORATE GOVERNANCE

We have a long-standing commitment to good corporate governance practices. Our corporate governance policies and other documents establish the high standards of professional and personal conduct we expect of our Board, members of senior management and all employees, and promote compliance with various financial, ethical, legal and other obligations and responsibilities.

The business activities of the Company are carried out by our employees under the direction and supervision of our Chairman of the Board, President and Chief Executive Officer (“CEO”). The Board is responsible for overseeing these activities. In doing so, each director is required to use his or her business judgment in the best interests of the Company. The Board’s responsibilities include:

•Reviewing the Company’s performance, strategies and major decisions;

•Overseeing the Company’s compliance with legal and regulatory requirements and the integrity of its financial statements;

•Overseeing the Company’s policies and practices for identifying, managing and mitigating key enterprise risks;

•Overseeing management, including reviewing the CEO’s performance and succession planning for key management roles; and

•Overseeing executive and director compensation, and our compensation program and policies.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines that, along with the charters of the Board committees, provide the basic framework for the Board’s operation and role in the governance of the Company. The guidelines include the Board’s policies regarding director independence, qualifications and responsibilities, access to management and outside advisors, compensation, continuing education, oversight of management succession and stockholding requirements. They also provide a process for directors to annually evaluate the performance of the Board.

The Governance Committee is responsible for overseeing and reviewing the Board’s Corporate Governance Guidelines at least annually and recommending any proposed changes to the Board for approval. The Corporate Governance Guidelines are available on the Investors section of our website at www.thehersheycompany.com.

Code of Conduct

The Board has adopted a Code of Conduct that applies to all of our directors, officers and employees worldwide. Adherence to this Code of Conduct assures that our directors, officers and employees are held to the highest standards of integrity. The Code of Conduct covers areas such as conflicts of interest, insider trading and compliance with laws and regulations. The Audit Committee oversees the Company’s communication of, and compliance with, the Code of Conduct. The Code of Conduct, including amendments thereto or waivers granted to a director or officer, if any, can be viewed on the Investors section of our website at www.thehersheycompany.com.

Environmental, Social and Governance (“ESG”)

We are committed to operating our business with all stakeholders in mind and with a view toward long-term sustainability, even as our business and society face a variety of existing and emerging challenges. We leverage our expertise along with external partners to help address these challenges so that we can continue to delight consumers and help make a positive impact in the world.

Meeting changing consumer needs

Combating
climate change

       Addressing poverty
          and supporting
       farmer livelihoods

Stakeholder
expectations

Consumers’ preferences are changing — from seeking healthier options that satisfy different snacking occasions, to wanting greater transparency across the supply chain and products made with responsibly sourced ingredients.

Our products rely on a global supply chain and agricultural ingredients. Climate change poses a significant and increasing pressure on agricultural commodities and the communities where we live, work and source our ingredients.

Our complex global supply chain spans across communities with high levels of poverty and inequality. The raw ingredients we source come from different countries with unique laws, environmental conditions and concerns, labor standards and pricing models.

A wide variety of stakeholders, including consumers, retailers, investors, governments and non-governmental organizations, are increasingly expecting companies to use their operations as a force for good by making an impact on some of society’s most pressing issues.

Sustainability Priorities

Our sustainability efforts are brought to life through our strategy, the Shared Goodness Promise, which can be viewed, along with the work we do, in our Shared Goodness Sustainability Report on the Sustainability section of our website at www.thehersheycompany.com.

While we focus on sustainability and social impact across our value chain, our key priorities are focused on

•improving the lives of cocoa farmers and cocoa communities;

•the environmental priorities of climate change; and

•the role of packaging in our business, responsibly sourcing product inputs, maintaining and improving our workplace for those that work within Hershey and along our value chain, helping kids and teens succeed and positively impacting the communities where we live and work.

Cocoa Farmers and Cocoa Communities

We support cocoa farmers and their communities through our Cocoa For Good strategy and a commitment to invest $500 million by 2030. We reached a critical milestone in 2020 by delivering on our commitment to source 100% certified and sustainable cocoa. Our investments go beyond certification and are focused on enabling systemic change to improve farmer livelihoods and address environmental and social risks in cocoa communities. We do this by investing in programs that:

•deliver training and financial support to cocoa farmers and their families so they can grow their business, help improve their household incomes and economically empower women;

•improve quality education and nutrition at schools for children;

•work with communities and multiple stakeholders on the ground to eliminate child labor by implementing with our partners Child Labor Monitoring and Remediation System (“CLMRS”) to identify, track, remediate and report instances of child labor;

•support youth to become tomorrow’s leaders; and

•work closely with farmers and communities to protect forests, spread more environmentally responsible agriculture practices and promote agroforestry and shade-grown cocoa to eliminate deforestation in cocoa communities.

Climate Change

Climate change is a risk not only to our planet and people but also to the sustainability of our business. In 2020, we set a science-based greenhouse gas reduction goal to cut our absolute Scope 1 and Scope 2 emissions by more than 50% and our absolute Scope 3 emissions by 25% by 2030 compared to a 2018 baseline. This meets the highest ambition level currently recognized by the Science Based Targets Initiative and aligns with the goals of the Paris Climate Agreement to limit global warming to 1.5°C below pre-industrial levels. Supported by our Environmental and Deforestation policies, this will require us to invest in manufacturing efficiencies, move to renewable energy, work with suppliers and farmers to reduce on-farm emissions, and reduce waste and packaging, to name a few of our priorities. Our Environmental and Deforestation policies are available for viewing on the Sustainability section of our website at www.thehersheycompany.com.

Packaging

We have increased our commitments toward both reducing our overall packaging footprint and making our packaging more sustainable. We achieved our commitment to decrease our packaging by 25 million pounds five years ahead of schedule, and committed to decreasing our packaging by an additional 25 million pounds by 2030. We also have committed to making 100% of our plastic packaging reusable, recyclable, or compostable by 2030.

Responsible Sourcing

We are committed to sustainably sourcing our ingredients and helping to ensure human rights protections across our entire value chain. In 2020, Hershey analyzed global environmental and social risks of our ingredients and raw materials alongside spend data to identify priority supply chains for future responsible sourcing investments and programming. We identified five priorities: cocoa, dairy, sugar, palm oil, and pulp and paper. This prioritization helps us target where we can make the biggest impact while best reducing risks in our supply chain. Additionally,we are strengthening our human rights due diligence across our supply chain including a revised Tier 1 Supplier Program and Responsible Recruitment Program with a goal of enrolling 100% of high-risk suppliers by the end of 2021.

Social Impact

Human Capital

The remarkable people employed by the Company and the individuals who work along our value chain are our most important assets. Without them we would not be able to fulfil our purpose to Make More Moments of Goodness. For individuals throughout our business, 2020 was not a normal year. Immediately following the onset of the COVID-19 pandemic, we rapidly took steps to strengthen our employee health and safety protocols. We adapted and expanded employee benefits to support the physical, emotional and economic well-being of our employees. By focusing on the changing consumer and working to fulfil our purpose, we concluded the year with no significant layoffs. COVID-19 was not the only event of 2020 that demanded a bold response.

Diversity, Equity and Inclusion

In 2020, the Company accelerated its diversity, equity, and inclusion efforts and elevated work in these areas to an enterprise-wide business imperative because we believe in our responsibility to live and visibly demonstrate our values. The Pathways Project – a five-year plan to make Hershey more diverse and inclusive – has three focus areas:

•Pathways to Join: We committed to representation expansion, with an initial focus on increasing diverse talent in our retail sales and manufacturing teams.

•Pathways to Grow: We committed to expanding career development actions to increase diverse talent across commercial and people leadership roles. We delivered commercial and financial acumen trainings, unconscious bias and microinequities training, and leadership development sessions focused on feedback and coaching, creating business opportunities, influencing others and utilizing emotional intelligence as a leadership capability.

•Pathways to Reach Out: We established our first-ever corporate scholarship endowment with Thurgood Marshall College Fund (“TMCF”), which will provide students from TMCF’s historically Black colleges and universities financial support to complete their education in food science. The initial $1.5 million investment will grow to $3 million over the next decade. The Company also created a three-year partnership to support the Equal Justice Initiative to promote internal and external historical education. Our African-American Business Resource Group established a meaningful partnership with our local NAACP chapter’s Afro-Academic, Cultural, Technological and Scientific Olympics program to conduct virtual mentorships and coaching opportunities with Harrisburg, Pennsylvania teens.

Supporting Youth

We are committed to helping children succeed and reach their full potential. Our employees regularly mentor students and volunteer with Milton Hershey School. We have also forged partnerships that support children’s education and nutrition, using our expertise as a snacking company to provide nutritious snacks that help children in cocoa communities learn in school. Our ViVi school feeding program reaches more than 50,000 students a day in Ghana and has been proven to reduce anemia by 40%. Our Heartwarming Project builds upon our brands’ role of creating connections and works to equip over 667,000 children and teens across the U.S. with the social and emotional skills they need to build meaningful connections with one another and their communities, enhancing youth well-being.

Investing in Communities

We have a long tradition of putting people first. From supporting causes our employees care about to investing in the long-term success of the communities where we live and work, our philanthropy and volunteerism efforts reflect how we bring to life our value of making a difference. As part of our COVID-19 response, in 2020, we invested over $1 million to establish a production line for disposable masks in Hershey, Pennsylvania. This ensured an ongoing supply of masks during a time when personal protective equipment was scarce. We donated more than 1.5 million masks to 85 different community and health care organizations, including two dozen school districts. In 2020, we also focused much of our philanthropic giving on racial justice and COVID-19 relief efforts. We deepened our long-time partnerships with NAACP-ACTSO in Greater Harrisburg and initiated a scholarship endowment with the Thurgood Marshall Scholarship Fund. We also committed support to the Equal Justice Initiative and mobilized employees to support these and other racial justice organizations. Also, knowing that frontline healthcare workers and hospital staff faced challenges throughout the pandemic in 2020, we established a ‘Healthcare Heroes’ rapid response product donation care package program, donating over $1.5 million worth of product to more than 200 hospitals and non-profits directly supporting COVID-19 relief efforts.

Governance

Managing ESG and sustainability initiatives at Hershey and operating with integrity are key drivers for how we build trust with our consumers and make a positive impact in our society. We have an ESG and sustainability governance model that includes a multi-level operating structure to ensure we are aligned on the most important issues facing the Company and allocating the right resources to drive progress within our Shared Goodness Promise. Accountability for managing ESG and sustainability across the enterprise sits with the Vice President of Corporate Communications and Global Sustainability.

•Board of Directors. Oversees our ESG and sustainability programs and reviews the most important emerging trends, risks and opportunities.

•Executive Committee. Our CEO and her direct reports conduct at least quarterly reviews of the Shared Goodness Promise strategy, data and progress against our commitments and targets and emerging ESG and sustainability challenges and opportunities.

•ESG and Sustainability Steering Committee. Led by our Chief Supply Chain Officer and comprised of key business leaders and owners who meet monthly throughout the year to review progress, discuss challenges and opportunities and approve key decisions related to our global ESG and sustainability programs.

•Global ESG and Sustainability Team and cross-functional working teams. Led by the Senior Director of Global Sustainability and Social Impact, these teams are made up of leaders from across the business who manage the strategy, implementation and reporting of our global ESG and sustainability initiatives. They are in regular communication with external stakeholders who provide valuable perspectives and insights into our program decisions and focus areas.

Stockholder and Interested Party Communications with Directors

Stockholders and other interested parties may communicate with our directors in several ways. Communications regarding accounting, internal accounting controls or auditing matters may be emailed to the Audit Committee at auditcommittee@hersheys.com or sent to the Audit Committee at the following address:

Audit Committee

c/o Secretary

The Hershey Company

19 East Chocolate Avenue

P.O. Box 819

Hershey, PA 17033-0819

Stockholders and other interested parties also can submit comments, confidentially and anonymously if desired, to the Audit Committee by calling the Hershey Concern Line at (800) 871-3659, by accessing the Hershey Concern Line website at www.HersheysConcern.com or emailing ethics@hersheys.com.

Stockholders and other interested parties may contact any of the independent directors, including the Lead Independent Director, as well as the independent directors as a group, by writing to the specified party at the address set forth above or by emailing the independent directors (or a specific independent director, including the Lead Independent Director) at independentdirectors@hersheys.com. Stockholders and other interested parties may also contact any of the independent directors using the Hershey Concern Line website noted above.

Communications to the Audit Committee, any of the independent directors and the Hershey Concern Line are processed by the Office of General Counsel. The Office of General Counsel reviews and summarizes these communications and provides reports to the applicable party on a periodic basis. Communications regarding any accounting, internal control or auditing matter are reported immediately to the Audit Committee, as are allegations about our officers. The Audit Committee will address communications from any interested party in accordance with our Board-approved Procedures for Submission and Handling of Complaints Regarding Compliance Matters, which are available for viewing on the Investors section of our website at www.thehersheycompany.com. Solicitations, junk mail and obviously frivolous or inappropriate communications are not forwarded to the Audit Committee or the independent directors, but copies are retained and made available to any director who wishes to review them.

Director Independence

The Board, in consultation with the Governance Committee, determines which of our directors are independent. The Board has adopted categorical standards for independence that the Board uses in determining which directors are independent. The Board bases its determination of independence for each director on the more stringent independence standards applicable to Audit Committee members regardless of whether such director serves on the Audit Committee. These standards are contained in the Board’s Corporate Governance Guidelines.

Applying these categorical standards for independence, as well as the independence requirements set forth in the listing standards of the New York Stock Exchange (the “NYSE Rules”) and the rules and regulations of the Securities and Exchange Commission (“SEC”), the Board determined that the following directors recommended for election at the Annual Meeting are independent: Pamela M. Arway, James W. Brown, Victor L. Crawford, Robert M. Dutkowsky, Mary Kay Haben, James C. Katzman, M. Diane Koken, Robert M. Malcolm, Anthony J. Palmer, Juan R. Perez and Wendy L. Schoppert. In addition, the Board determined the following individuals who will continue to serve as directors until the Annual Meeting are independent: Charles A. Davis and David L. Shedlarz. The Board determined that Michele G. Buck is not independent because she is an executive officer of the Company.

In making its independence determinations, the Board, in consultation with the Governance Committee, reviewed the direct and indirect relationships between each director and the Company and its subsidiaries, as well as the compensation and other payments each director received from or made to the Company and its subsidiaries.

In making its independence determinations with respect to Ms. Koken and Messrs. Brown and Katzman, the Board considered their roles as current members of the board of directors of Hershey Trust Company and the board of managers (governing body) of Milton Hershey School, as well as certain transactions the Company had or may have with these entities.

Hershey Trust Company, as trustee for the trust established by Milton S. and Catherine S. Hershey that has as its sole beneficiary Milton Hershey School (such trust, the “Milton Hershey School Trust”), is our controlling stockholder. Hershey Trust Company is in turn owned by the Milton Hershey School Trust. As such, Hershey Trust Company, Milton Hershey School, the Milton Hershey School Trust and companies owned by the Milton Hershey School Trust are considered affiliates of the Company under SEC rules. During 2020, we had a number of transactions with Hershey Trust Company, Milton Hershey School and companies owned by the Milton Hershey School Trust involving the purchase and sale of goods and services in the ordinary course of business. We have outlined these transactions in greater detail in the section entitled “Certain Transactions and Relationships.” We have provided information about Company stock owned by Hershey Trust Company, as trustee for the Milton Hershey School Trust, and by Hershey Trust Company for its own investment purposes in the section entitled “Information Regarding Our Controlling Stockholder.”

Ms. Koken and Messrs. Brown and Katzman do not receive any compensation from The Hershey Company, from Hershey Trust Company or from Milton Hershey School other than compensation they receive or will receive in the ordinary course as members of the board of directors or board of managers of each of those entities, as applicable. In addition, Ms. Koken and Messrs. Brown and Katzman do not vote on Board decisions in connection with the Company’s transactions with Hershey Trust Company, Milton Hershey School and companies owned by the Milton Hershey School Trust. The Board therefore concluded that the positions Ms. Koken and Messrs. Brown and Katzman have as members of the board of directors of Hershey Trust Company and the board of managers of Milton Hershey School do not impact their independence.

Director Nominations

The Governance Committee is responsible for identifying and recommending to the Board candidates for Board membership. As our controlling stockholder, Hershey Trust Company, as trustee for the Milton Hershey School Trust, also may from time to time recommend to the Governance Committee, or elect outright, individuals to serve on our Board.

In administering its responsibilities, the Governance Committee has not adopted formal selection procedures, but instead utilizes general guidelines that allow it to adjust the selection process to best satisfy the objectives established for any director search. The Governance Committee considers director candidates recommended by any reasonable source, including current directors, management, stockholders and other sources. The Governance Committee evaluates all director candidates in the same manner, regardless of the source of the recommendation.

From time to time, the Governance Committee engages a paid third-party consultant to assist in identifying and evaluating director candidates. The Governance Committee has sole authority under its charter to retain, compensate and terminate these consultants. At the beginning of 2020, the Governance Committee retained Spencer Stuart and Heidrick & Struggles to assist in identifying potential future director candidates. Beginning in August 2020, the Governance Committee engaged Daversa Partners to assist in that process.

Stockholders desiring to recommend or nominate a director candidate must comply with certain procedures. If you are a stockholder and desire to nominate a director candidate at the 2022 Annual Meeting of Stockholders of the Company, you must comply with the procedures for nomination set forth in the section entitled “Information Regarding the 2022 Annual Meeting of Stockholders.” Stockholders who do not intend to nominate a director at an annual meeting may recommend a director candidate to the Governance Committee for consideration at any time. Stockholders desiring to do so must submit their recommendation in writing to The Hershey Company, c/o Secretary, 19 East Chocolate Avenue, Hershey, Pennsylvania 17033, and include in the submission all of the information that would be required if the stockholder nominated the candidate at an annual meeting. The Governance Committee may require the nominating stockholder to submit additional information before considering the candidate.

There were no changes to the procedures relating to stockholder nominations during 2020, and there have been no changes to such procedures to date in 2021. These procedural requirements are intended to ensure the Governance Committee has sufficient time and a basis on which to assess potential director candidates and are not intended to discourage or interfere with appropriate stockholder nominations. The Governance Committee does not believe that these procedural requirements subject any stockholder or proposed nominee to unreasonable burdens. The Governance Committee and the Board reserve the right to change the procedural requirements from time to time and/or to waive some or all of the requirements with respect to certain nominees, but any such waiver shall not preclude the Governance Committee from insisting upon compliance with any and all of the above requirements by any other recommending stockholder or proposed nominees.

THE BOARD OF DIRECTORS

General Oversight

The Board has general oversight responsibility for the Company’s affairs. Although the Board does not have responsibility for day-to-day management of the Company, Board members stay informed about the Company’s business through regular meetings, site visits and other periodic interactions with management. The Board is deeply involved in the Company’s strategic planning process. The Board also plays an important oversight role in the Company’s leadership development, succession planning and risk management processes.

Composition

The Board is currently comprised of 14 members, each serving a one-year term that expires at the Annual Meeting. Eleven of the 12 director nominees are considered independent under the NYSE Rules and the Board’s Corporate Governance Guidelines.

Leadership Structure

The Company’s governance documents provide the Board with flexibility to select the leadership structure that is most appropriate for the Company and its stockholders. The Board regularly evaluates its governance structure and has concluded that the Company and its stockholders are best served by not having a formal policy regarding whether the same individual should serve as both Chairman of the Board and CEO. This approach allows the Board to exercise its business judgment in determining the most appropriate leadership structure in light of the current facts and circumstances facing the Company, including the composition and tenure of the Board, the tenure of the CEO, the strength of the Company’s management team, the Company’s recent financial performance, the Company’s current strategic plan and the current economic environment, among other factors.

Michele G. Buck currently serves as our Chairman of the Board, President and CEO. The Board believes that combining the roles of Chairman of the Board and CEO under Ms. Buck’s leadership is in the best interests of the Company and its stockholders for several reasons:

•Ms. Buck has served as the Company’s CEO and a member of the Board for more than four years. During that time, she has fostered a strong working relationship between the Board and management and has cultivated a high level of trust with the Board. She also has a deep understanding of Board governance and operations through her service as Lead Director of New York Life Insurance Company.

•Having served as an executive in numerous positions with the Company for more than fifteen years, Ms. Buck has an unparalleled knowledge of the Company and its products, which the Board believes puts her in the best position to lead the Board through the strategic business issues facing the Company. During her tenure as CEO, Ms. Buck has proven her ability to drive business strategy and operational excellence. The Board believes that having Ms. Buck leverage these skills as Chairman of the Board provides the Company with a significant competitive advantage in the current marketplace.

•The Board believes that combining the roles of Chairman of the Board and CEO promotes decisive, unified leadership, which enables the Company to make rapid strategic decisions in the face of increasing competition and shifting market opportunities.

The Board also recognizes the importance of strong independent Board leadership. For that reason, the Board elected

Charles A. Davis to serve as Lead Independent Director when Ms. Buck became Chairman of the Board in October 2019. In May 2020, the Board elected Anthony J. Palmer to succeed Mr. Davis as Lead Independent Director.

Under the terms of the Board’s Corporate Governance Guidelines, the Lead Independent Director’s responsibilities include the following:

•In the absence of the Chairman of the Board, presiding at all Board and stockholder meetings;

•Calling meetings of the independent directors of the Board, in addition to the executive sessions of independent directors held after each Board meeting;

•Establishing the agenda and presiding at all executive sessions and other meetings of the independent directors of the Board;

•Communicating with the independent directors of the Board between meetings as necessary or appropriate;

•Serving as a liaison between the Chairman of the Board and the independent directors, ensuring independent director consensus is communicated to the Chairman of the Board, and communicating the results of meetings of the independent directors to the Chairman of the Board and other members of management, as appropriate;

•In coordination with the CEO, approving Board meeting agendas and schedules to assure there is sufficient time for discussion of all agenda items;

•Approving Board meeting materials and other information sent to the Board;

•Evaluating the quality and timeliness of information sent to the Board by the CEO and other members of management;

•Assisting the Chairman of the Board in implementing and overseeing the Board succession planning process;

•Assisting the Chairman of the Board with crisis management matters;

•Overseeing the evaluation of the CEO;

•Assisting the chair of the Governance Committee with Board and individual director evaluations; and

•Being available for consultation and direct communication at the request of major stockholders.

The Board has determined that Mr. Palmer is an independent member of the Board under the NYSE Rules and the Board’s Corporate Governance Guidelines.

The Board has established five standing committees to assist with its oversight responsibilities: (1) Audit Committee; (2) Compensation and Executive Organization Committee (“Compensation Committee”); (3) Finance and Risk Management Committee; (4) Governance Committee; and (5) Executive Committee. Each of the Audit Committee, the Compensation Committee, the Finance and Risk Management Committee, and the Governance Committee is comprised entirely of independent directors. Finally, Ms. Koken and Messrs. Brown and Katzman are direct representatives of the Company’s largest stockholder. This composition of our Board helps to ensure that boardroom discussions reflect the views of management, our independent directors and our stockholders.

Board Role in Risk Oversight

Our Board takes an active role in risk oversight. While management is responsible for identifying, evaluating, managing and mitigating the Company’s exposure to risk, it is the Board’s responsibility to oversee the Company’s risk management process and to ensure that management is taking appropriate action to identify, manage and mitigate key risks and keeping the Board appropriately informed. The Board administers its risk oversight responsibilities both through active review and discussion of key risks facing the Company and by delegating certain risk oversight responsibilities to committees for further consideration and evaluation.


Board of Directors			• Review and evaluate strategic plans and associated risks • Oversee enterprise risk management (“ERM”) framework and the overall ERM process • Conduct annual succession plan reviews • Oversee ESG programs and policies, including sustainability and climate change

Audit

Committee

Compensation

and Executive

Organization

Committee

Finance and Risk

Management

Committee

Governance

Committee

Executive

Committee

• Oversee legal and regulatory compliance and the Code of Conduct

• Oversee risks relating to key accounting policies

• Review internal controls with management and internal auditors

• Oversee risks relating to compensation program and policies

• Employ independent compensation consultants to assist in reviewing compensation program, including potential risks

• Oversee succession planning and talent processes and programs, including Human Capital Management and Diversity, Equity and Inclusion

• Review key enterprise risks identified through the ERM process as well as risk mitigation plans, including information security

• Oversee key financial risks

• Oversee and approve merger and acquisition activities and related risks

• Oversee governance-related risks

• Oversee compliance with key corporate governance documents

• Approve related party transactions between the Company and entities affiliated with the Company and certain of its directors

The decision to administer the Board’s oversight responsibilities in this manner has an important effect on the Board’s leadership and committee structure, described in more detail above. The Board believes that its structure – including a

strong Lead Independent Director, 13 of 14 independent directors and key committees comprised entirely of independent directors – helps to ensure that key strategic decisions made by senior management, up to and including the CEO, are reviewed and overseen by independent directors of the Board.

Information Security

As indicated above, the Finance and Risk Management Committee is responsible for reviewing key enterprise risks identified through the ERM process, which includes information security strategies and risks, as well as data privacy and protection risks and mitigation strategies (“Information Security”). At each regularly scheduled Finance and Risk Management Committee meeting, management, through the Company’s Chief Information Security Officer, reports on Information Security controls, audits, guidelines and developments. The Chief Information Security Officer oversees the dedicated Information Security team, which works in partnership with internal audit to review information technology-related internal controls with our external auditors as part of the overall internal controls process. Annual third-party audits are also conducted on penetration testing and overall program maturity.

Our Company-wide Information Security training program includes:

•Security awareness training, including regular phishing simulations;

•Acceptable use training; and

•Other targeted trainings throughout the year.

We currently maintain a cyber insurance policy that provides coverage for security breaches. The Company has neither experienced an Information Security breach nor incurred any breach-related expenses over the last three years.

Experiences, Skills and Qualifications

The Governance Committee works with the Board to determine the appropriate skills, experiences and attributes that should be possessed by the Board as a whole as well as its individual members. While the Governance Committee has not established minimum criteria for director candidates, in general, the Board seeks individuals with skills and backgrounds that will complement those of other directors and maximize the diversity and effectiveness of the Board as a whole. The Board also seeks individuals who bring unique and varied perspectives and life experiences to the Board. As such, the Governance Committee assists the Board by recommending prospective director candidates who will enhance the overall diversity of the Board. The Board views diversity broadly, taking into consideration the age, professional experience, race, education, gender and other attributes of its members. In addition, the Board’s Corporate Governance Guidelines describe the general experiences, qualifications, attributes and skills sought by the Board of any director nominee, including:


Qualifications, Attributes and Skills			Knowledge and Experience
ü Integrity			ü Consumer Products
ü Judgment			ü Innovation
ü Skill			ü Mergers and Acquisitions
ü Diversity			ü Government Relations
ü Ability to express informed, useful and constructive views			ü Supply Chain
ü Experience with businesses and other organizations of comparable size			ü Emerging Markets
ü Ability to commit the time necessary to learn our business and to prepare for and participate actively in committee meetings and in Board meetings			ü Finance ü Marketing
			ü Risk Management ü Technology
ü Interplay of skills, experiences and attributes with those of the other Board members

In addition to evaluating new director candidates, the Governance Committee regularly assesses the composition of the Board in order to ensure it reflects an appropriate balance of knowledge, skills, expertise, diversity and independence. As part of this assessment, each director is asked to identify and assess the particular experiences, skills and other attributes that qualify him or her to serve as a member of the Board. Based on the most recent assessment of the Board’s composition completed in February 2021, the Governance Committee and the Board have determined that, in light of the Company’s current business structure and strategies, the Board has an appropriate mix of director experiences, skills, qualifications and backgrounds.

The following chart provides a summary of the collective qualifications of our director nominees:


Experience	Qualifications	Board Composition
Risk Management	Experience with ERM programs (through operations or via board/committee oversight), including strategic, financial, operational and commercial risks, as well as experience with cybersecurity risk and/or ESG oversight/execution	92%
Operational Leadership	Functional experience in a senior operating position (President, Chief Operating Officer, head of large division) within a public/private company, including current or recent experience as a public company CEO	75%
Innovation	Experience in research & development/new product and packaging innovation, proven track record of implementing innovative ways of working	58%
International	Significant experience working and managing operations in markets outside the US, combined with an intimate understanding of issues, trends and other relevant business activities in those markets	58%.
Consumer Packaged Goods (“CPG”)	Experience in a senior level position of a durable or non-durable consumer-oriented company, preferably within the fast-moving consumer goods sector; senior-level experience with consumer marketing, sales and/or CPG retailers	50%
Financial/Investment Leadership	Has been a public company Chief Financial Officer, Audit Partner or has chaired a public company Audit Committee or has significant experience in capital markets, investment banking, corporate finance, financial reporting or the financial management of a major organization	50%
Mergers & Acquisitions (“M&A”)	Experience sourcing, negotiating and integrating complex M&A deals, either as a senior operating executive or an investment banking or private equity professional	50%
Technology	Recent leadership experience implementing new technologies to drive efficiencies and deliver commercial advantage; significant experience with data analytics or enterprise digital transformation and ability to drive unique insights that lead to better strategic decisions and actions; senior leadership in a digital marketing organization or business unit	42%
Government Relations/Regulatory	Experience in a government capacity at the state or federal level and/or senior executive experience within legal, regulatory or other policy-making functions	33%
Supply Chain	Experience at a senior level managing or overseeing global supply chain strategy and execution for a major corporation, including responsibility for demand planning, procurement/sourcing, shipping, warehousing and logistics management	33%

A description of the most relevant experiences, skills and attributes that qualify each director nominee to serve as a member of the Board is included in his or her biography.

MEETINGS AND COMMITTEES OF THE BOARD

Meetings of the Board of Directors and Director Attendance at Annual Meeting

The Board held 12 meetings in 2020. Each incumbent director attended at least 92% of all of the meetings of the Board and committees of the Board on which he or she served in 2020. Average director attendance for all meetings equaled 98%.

In addition, the independent directors meet regularly in executive session at every Board meeting and at other times as the independent directors deem necessary. These meetings allow the independent directors to discuss important issues, including the business and affairs of the Company as well as matters concerning management, without any member of management present. Each executive session is chaired by the Lead Independent Director. In the absence of the Lead Independent Director, executive sessions are chaired by an independent director assigned on a rotating basis. Members of the Audit Committee, Compensation Committee, Finance and Risk Management Committee, and Governance Committee also meet regularly in executive session.

Directors are expected to attend our annual meetings of stockholders. Eleven of the twelve directors standing for election at the 2020 Annual Meeting of Stockholders of the Company attended the virtual meeting.

Committees of the Board

The Board has established five standing committees. Membership on each of these committees, as of March 18, 2021, is shown in the following chart:

Name

Audit

Compensation and Executive Organization

Finance and Risk Management

Governance

Executive

Pamela M. Arway

Chair

James W. Brown

Michele G. Buck

Chair

Victor L. Crawford

Charles A. Davis

Robert M. Dutkowsky

Mary Kay Haben

Chair

James C. Katzman

M. Diane Koken

Robert M. Malcolm

Chair

Anthony J. Palmer

Juan R. Perez

Wendy L. Schoppert

David L. Shedlarz

Chair

____________________

Committee Member

Ex-Officio

The Board’s Corporate Governance Guidelines require that every member of the Audit Committee, Compensation Committee, Finance and Risk Management Committee, and Governance Committee be independent.

The Board may also from time to time establish committees of limited duration for a special purpose. No such committees were established in 2020.

The table below identifies the number of meetings held by each standing committee in 2020, provides a brief description of the duties and responsibilities of each committee, and provides general information regarding the location of each committee’s charter:


Audit Committee		Meetings in 2020: 6
Duties and Responsibilities	• Oversee financial reporting processes and integrity of the financial statements. • Oversee compliance with legal and regulatory requirements. • Oversee independent auditors and the internal audit function. • Approve audit and non-audit services and fees. • Oversee (in consultation with the Finance and Risk Management Committee) risk management processes and policies. • Review adequacy of internal controls. • Review Quarterly and Annual Reports. • Review earnings releases.
General Information	• All Audit Committee members are financially literate. Ms. Schoppert and Messrs. Crawford and Shedlarz qualify as “audit committee financial experts.” • Charter can be viewed on the Investors section of our website at www.thehersheycompany.com. • Charter prohibits any member of the Audit Committee from serving on the audit committees of more than two other public companies unless the Board determines that such simultaneous service would not impair the ability of the director to effectively serve on the Committee.


Compensation and Executive Organization Committee		Meetings in 2020: 6
Duties and Responsibilities	• Establish executive officer compensation (other than CEO compensation) and oversee compensation program and policies. • Evaluate CEO performance and make recommendations regarding CEO compensation. • Review director compensation. • Make equity grants under and administer the Equity and Incentive Compensation Plan (the “EICP”). • Establish target award levels and make awards under the annual cash incentive component of the EICP. • Review the Company’s executive organization. • Oversee executive succession planning.
General Information	• Charter can be viewed on the Investors section of our website at www.thehersheycompany.com.


Finance and Risk Management Committee		Meetings in 2020: 6
Duties and Responsibilities	• Oversee management of the Company’s assets, liabilities and risks. • Review capital projects, acquisitions and dispositions of assets and changes in capital structure. • Review the annual budget and monitor performance against operational plans. • Review principal banking relationships, credit facilities and commercial paper programs. • Oversee (in consultation with the Audit Committee) risk management processes and policies.
General Information	• Charter can be viewed on the Investors section of our website at www.thehersheycompany.com.


Governance Committee		Meetings in 2020: 5
Duties and Responsibilities	• Review the composition of the Board and its committees. • Identify, evaluate and recommend candidates for election to the Board. • Review corporate governance matters and policies, including the Board’s Corporate Governance Guidelines. • Administer the Company’s Related Person Transaction Policy. • Evaluate the performance of the Board, its independent committees and each director.
General Information	• Charter can be viewed on the Investors section of our website at www.thehersheycompany.com.


Executive Committee		Meetings in 2020: 1
Duties and Responsibilities	• Manage the business and affairs of the Company, to the extent permitted by the Delaware General Corporation Law, when the Board is not in session. • Review and approve related-party transactions between the Company and Hershey Trust Company, Hershey Entertainment & Resorts Company and/or Milton Hershey School, or any of their affiliates.
General Information	• Charter can be viewed on the Investors section of our website at www.thehersheycompany.com. • For more information regarding the review, approval or ratification of related-party transactions, please refer to the section entitled “Certain Transactions and Relationships.”

PROPOSAL NO. 1 – ELECTION OF DIRECTORS


ü			The Board of Directors unanimously recommends that stockholders vote FOR each of the nominees for director at the 2021 Annual Meeting

The first proposal to be voted on at the Annual Meeting is the election of 12 directors. If elected, the directors will hold office until the 2022 Annual Meeting of Stockholders of the Company or until their successors are elected and qualified.

Election Procedures

We have two classes of common stock outstanding: Common Stock and Class B Common Stock. Under our certificate of incorporation and by-laws:

•One-sixth of the total number of our directors (which equates presently to two directors) will be elected by the holders of our Common Stock voting separately as a class. For the 2021 Annual Meeting, the Board has nominated Victor L. Crawford and Robert M. Dutkowsky for election by the holders of our Common Stock voting separately as a class.

•The remaining 10 directors will be elected by the holders of our Common Stock and Class B Common Stock voting together without regard to class.

With respect to the nominees to be elected by the holders of the Common Stock and the Class B Common Stock voting together, the 10 nominees receiving the greatest number of votes of the Common Stock and Class B Common Stock will be elected as directors. With respect to the nominees to be elected by the holders of the Common Stock voting separately as a class, the two nominees receiving the greatest number of votes of the Common Stock will be elected as directors.

The Board’s Corporate Governance Guidelines provide that directors will generally not be nominated for re-election after their 72nd birthday. All of the directors standing for election at the 2021 Annual Meeting satisfied the applicable age guideline.

All nominees for election as director have indicated their willingness to serve if elected. If a nominee becomes unavailable for election for any reason, the proxies will have discretionary authority to vote for a substitute.

Nominees for Director

The Board unanimously recommends the following nominees for election at the 2021 Annual Meeting. These nominees were recommended to the Board by the Governance Committee. In making its recommendation, the Governance Committee considered the experience, qualifications, attributes and skills of each nominee, as well as each director’s past performance on our Board, as reflected in the Governance Committee’s annual evaluation of Board and committee performance. This evaluation considers, among other things, each director’s individual contributions to the Board, the director’s ability to work collaboratively with other directors and the effectiveness of the Board as a whole.

On the following pages, we provide certain biographical information about each nominee for director, as well as information regarding the nominee’s specific experience, qualifications, attributes and skills that qualify him or her to serve as a director and as a member of the committee(s) of the Board on which the nominee serves.


Pamela M. Arway Director since 2010 Age 67 Board Committees • Compensation (Chair) • Executive • Finance and Risk Management	Former President, Japan/Asia Pacific/Australia Region, American Express International, Inc., a global payments, network and travel company, and its subsidiaries (October 2005 to January 2008)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS Throughout her 21-year career with American Express Company, Inc., Ms. Arway gained experience in the areas of finance, marketing, international business, government affairs, consumer products and human resources. She is a significant contributor to the Board in each of these areas.

	PREVIOUS BUSINESS EXPERIENCE • Spent 21 years in positions of increasing responsibility at American Express Company, Inc. and its subsidiaries CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • Carlson Inc. (May 2019 to present) • Iron Mountain Incorporated (May 2014 to present) • DaVita Inc. (July 2009 to present)	EDUCATION • Bachelor’s degree in languages from Memorial University of Newfoundland • Masters of Business Administration degree from Queen’s University, Kingston, Ontario, Canada


James W. Brown Director since 2017 Age 69 Board Committees • Audit • Governance	Director, Hershey Trust Company; Member, Board of Managers, Milton Hershey School (February 2016 to present)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS One of three representatives of Hershey Trust Company and Milton Hershey School currently serving on the Board, Mr. Brown provides valuable perspectives not only as a representative of our largest stockholder, but also of the school that is its sole beneficiary. In addition, Mr. Brown has significant experience in government relations, finance and private equity/venture capital. His familiarity with policy and operations of both Pennsylvania State and U.S. Federal Government and his experience as an investor in and director of both public and private companies make him an important addition to the Board on matters of strategy and risk management.

	PREVIOUS BUSINESS EXPERIENCE • Chief of Staff, United States Senator Robert P. Casey, Jr. (January 2007 to February 2016) • Partner, SCP Private Equity Partners (January 1996 to December 2006) • Chief of Staff, Pennsylvania Governor Robert P. Casey, Sr. (January 1989 to December 1994) CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • FS Multi-Strategy Alternatives Fund/FS Series Trust (August 2017 to present)	PAST PUBLIC COMPANY BOARDS • FS Investment Corporation III (February 2016 to December 2018) EDUCATION • Bachelor’s degree, magna cum laude, from Villanova University • Juris Doctor degree from the University of Virginia Law School


Michele G. Buck Director since 2017 Age 59 Board Committees • Executive (Chair)	Chairman of the Board, President and Chief Executive Officer, The Hershey Company (October 2019 to present)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS As Chairman of the Board, President and Chief Executive Officer, Ms. Buck is responsible for all day-to-day global operations and commercial activities of the Company. Having served at the Company for more than 15 years and as an executive in the consumer packaged goods industry for more than 30 years, Ms. Buck is a valuable contributor to the Board in the areas of marketing, consumer products, strategy, supply chain management and mergers and acquisitions. Her presence in the boardroom also ensures efficient communication between the Board and Company management.

	PREVIOUS BUSINESS EXPERIENCE • President and Chief Executive Officer (March 2017 to October 2019) • Executive Vice President, Chief Operating Officer (June 2016 to March 2017) • President, North America (May 2013 to June 2016) • Senior Vice President, Chief Growth Officer (September 2011 to May 2013) • Senior Vice President, Global Chief Marketing Officer (December 2007 to September 2011) CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • New York Life Insurance Company (November 2013 to present)	EDUCATION • Bachelor’s degree from Shippensburg University of Pennsylvania • Masters of Business Administration degree from the University of North Carolina


Victor L. Crawford Director since 2020 Age 59 Committees • Audit • Compensation	Chief Executive Officer, Pharmaceutical Segment, Cardinal Health, Inc., a global healthcare services and products company (November 2018 to present)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS Having held senior management positions at several companies across the food and beverage, hospitality and healthcare services industries, Mr. Crawford has a broad range of experience in digital transformation, fast moving consumer goods, logistics and supply chain management. He also brings valuable insights in the areas of emerging markets, consumer retail and finance to the Board.

	PREVIOUS BUSINESS EXPERIENCE • President and Chief Operating Officer, Healthcare, Education and Business Dining, Aramark Corporation (September 2012 to October 2018) • President, North America, Pepsi Beverage Company, PepsiCo, Inc. (September 2010 to January 2012) • Executive Vice President, Supply Chain and Transformation, The Pepsi Bottling Group, Inc. (August 2009 to September 2010) CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS •Board of Trustees, National Urban League (October 2010 to present)	PAST PUBLIC COMPANY BOARDS • Dave & Buster’s Entertainment, Inc. (August 2016 to June 2020) EDUCATION • Bachelor of Science in accounting from Boston College
	One of two directors nominated for election by the holders of the Common Stock voting separately as a class.


Robert M. Dutkowsky Director since 2020 Age 66 Board Committees •Finance and Risk Management •Governance	Former Executive Chairman and Chief Executive Officer, Tech Data Corporation, a wholesale distributor of technology products (June 2018 to June 2020)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS Having spent most of his professional career in the technology industry, Mr. Dutkowsky brings to the Board broad operational experience and a deep understanding of how technology and digital capabilities drive growth and resiliency. The experiences and skills he developed as a senior executive at multiple technology and software businesses also allow Mr. Dutkowsky to provide the Board with insights related to finance, management, operations, risk management and governance. Mr. Dutkowsky was identified as a director nominee by Spencer Stuart as part of the Governance Committee’s director succession planning process.

	PREVIOUS BUSINESS EXPERIENCE • Tech Data Corporation ○ Chairman and Chief Executive Officer (June 2017 to June 2018) ○ Chief Executive Officer (October 2006 to June 2017) CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • Pitney Bowes, Inc. (July 2018 to present) • Raymond James Financial, Inc. (October 2018 to present) • US Foods, Inc. (January 2017 to present)	PAST PUBLIC COMPANY BOARDS • Tech Data Corporation (October 2006 to June 2020) EDUCATION • Bachelor of Science in Industrial Labor Relations from Cornell University
	One of two directors nominated for election by the holders of the Common Stock voting separately as a class.


Mary Kay Haben Director since 2013 Age 64 Board Committees • Governance (Chair) • Compensation • Executive	Former President, North America, Wm. Wrigley Jr. Company, a leading confectionery company (October 2008 to February 2011)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS Throughout Ms. Haben’s 33-year career, she gained extensive experience managing businesses in the consumer packaged goods industry and developed a track record of growing brands and developing new products. Her knowledge of and ability to analyze the overall consumer packaged goods industry, evolving market dynamics and consumers’ relationships with brands make her a valuable contributor to the Board and the Company.

	PREVIOUS BUSINESS EXPERIENCE • Group Vice President and Managing Director, North America, Wm. Wrigley Jr. Company (April 2007 to October 2008) • Held several key positions during 27-year career with Kraft Foods, Inc., a grocery manufacturing and processing conglomerate CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • Grocery Outlet Holding Corp. (November 2019 to present) • Trustee of Equity Residential (July 2011 to present); currently serves as Chair of the Compensation Committee	EDUCATION • Bachelor’s degree, magna cum laude, in business administration from the University of Illinois • Masters of Business Administration degree in marketing from the University of Michigan, Ross School of Business


James C. Katzman Director since 2018 Age 53 Board Committees • Finance and Risk Management • Governance	Director, Hershey Trust Company; Member, Board of Managers, Milton Hershey School (April 2017 to present)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS One of three representatives of Hershey Trust Company and Milton Hershey School currently serving on the Board, Mr. Katzman provides the Board with valuable perspectives of our largest stockholder and the school that is its sole beneficiary. In addition, he has extensive experience in corporate financial matters and merger transactions, developed throughout his career in investment banking, which further adds to the Board as it oversees the Company’s financial stewardship and transformation into an innovative snacking powerhouse.

	PREVIOUS BUSINESS EXPERIENCE • Partner, Goldman Sachs Group, Inc. (December 2004 to March 2015) CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • Brinker International, Inc. (January 2018 to present)	EDUCATION • Bachelor’s degree, cum laude, from Dartmouth College • Masters of Business Administration degree from Columbia University Graduate School of Business


M. Diane Koken Director since 2017 Age 68 Board Committees • Audit • Compensation	Chairman of the Board, Hershey Trust Company and Milton Hershey School (December 2020 to present); Director, Hershey Trust Company and Member, Board of Managers, Milton Hershey School (December 2015 to present)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS As Chairman of the Boards and one of three representatives of Hershey Trust Company and Milton Hershey School currently serving on the Board, Ms. Koken brings to the Board valuable insights from our largest stockholder. Having served as Insurance Commissioner of Pennsylvania for three governors and as President of the National Association of Insurance Commissioners, Ms. Koken has considerable expertise in the areas of insurance, risk management and regulatory affairs. Her experience in the areas of legal operations and corporate governance, developed throughout her 22-year career at a national life insurer that culminated in her serving as Vice President, General Counsel and Corporate Secretary, further adds to the Board.

	PREVIOUS BUSINESS EXPERIENCE • Commissioner of Insurance in Pennsylvania (August 1997 to February 2007) • Provident Mutual Life Insurance Company (October 1975 to July 1997) CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • Nationwide Mutual Funds and Nationwide Variable Insurance Trust (April 2019 to present) • Capital BlueCross (December 2011 to present) • NORCAL Mutual (January 2009 to present) • Nationwide Mutual Insurance Company; Nationwide Mutual Fire Insurance Company; Nationwide Corporation (April 2007 to present)	EDUCATION • Bachelor’s degree, magna cum laude, from Millersville University • Juris Doctor degree from Villanova University School of Law


Robert M. Malcolm Director since 2011 Age 68 Board Committees • Finance and Risk Management (Chair) • Audit • Executive	Former President, Global Marketing, Sales & Innovation, Diageo PLC, a leading premium drinks company (June 2002 to December 2008)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS Mr. Malcolm is a globally recognized expert in strategic marketing and is currently Executive in Residence, Center for Customer Insight and Marketing Solutions, McCombs School of Business, University of Texas. He brings to the Board significant experience in emerging markets and in the marketing and sales of consumer products, including consumer packaged goods and fast-moving consumer goods.

	PREVIOUS BUSINESS EXPERIENCE • Spent 24 years at The Procter & Gamble Company in positions of increasing responsibility CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • Boston Consulting Group (senior advisor)	EDUCATION • Bachelor’s degree in marketing from the University of Southern California • Masters of Business Administration degree in marketing from the University of Southern California


Anthony J. Palmer Director since 2011 Age 61 Board Committees • Audit (ex-officio) • Compensation (ex-officio) • Executive • Finance and Risk Management (ex-officio) • Governance	Chief Executive Officer, TropicSport, a natural suncare and skincare products company (April 2019 to present); Lead Independent Director, The Hershey Company (May 2020 to present)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS Having spent most of his professional career in the consumer packaged goods industry, Mr. Palmer brings to the Board substantial experience and insight in several key strategic areas for the Company, including fast-moving consumer packaged goods, emerging markets, marketing and human resources.

	PREVIOUS BUSINESS EXPERIENCE • Kimberly-Clark Corporation ○ President, Global Brands and Innovation (April 2012 to April 2019) ○ Senior Vice President and Chief Marketing Officer (October 2006 to March 2012)	EDUCATION • Bachelor’s degree in business marketing from Monash University in Melbourne, Australia • Masters of Business Administration degree, with distinction, from the International Management Institute, Geneva, Switzerland


Juan R. Perez Director since 2019 Age 54 Board Committees • Compensation • Finance and Risk Management	Chief Information and Engineering Officer, United Parcel Service, Inc., a multinational package delivery and supply chain management company (April 2017 to present)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS During his 30-year career at United Parcel Service, Inc., Mr. Perez has developed a broad range of commercial, operational and technological expertise. In addition to his overall leadership experience, Mr. Perez brings significant strength in the areas of supply chain management and logistics, digital technology, innovation and data analytics to the Board.

	PREVIOUS BUSINESS EXPERIENCE • United Parcel Service, Inc. ○ Chief Information Officer (March 2016 to April 2017) ○ Vice President, Technology (July 2010 to March 2016) ○ Vice President, Engineering (January 2005 to July 2010)	EDUCATION • Bachelor of Science in industrial and systems engineering from the University of Southern California • Masters of Science in computer and manufacturing engineering from the University of Southern California


Wendy L. Schoppert Director since 2017 Age 54 Board Committees • Audit • Finance and Risk Management	Former Executive Vice President and Chief Financial Officer, Sleep Number Corporation, a bedding manufacturer, marketer and retailer (June 2011 to February 2014)
	QUALIFICATIONS, ATTRIBUTES AND SKILLS As Chief Financial Officer for Sleep Number Corporation, Ms. Schoppert gained extensive experience leading all finance functions including financial planning and analysis, accounting, tax, treasury, investor relations, decision support and IT. She began her career in the airline industry, serving in various financial, strategic and general management leadership positions at American Airlines, Northwest Airlines and America West Airlines.

	PREVIOUS BUSINESS EXPERIENCE • Sleep Number Corporation ○ Senior Vice President and Chief Information Officer (March 2008 to June 2011) ○ Senior Vice President, International and New Channel Development (April 2005 to March 2008) CURRENT PUBLIC AND OTHER KEY DIRECTORSHIPS • ODP Corporation (July 2020 to present) • Bremer Financial Corporation (May 2017 to present) • Big Lots, Inc. (May 2015 to present)	PAST PUBLIC COMPANY BOARDS • Gaia, Inc. (October 2013 to December 2018) EDUCATION • Bachelor of Arts in mathematics and operations research from Cornell University • Masters of Business Administration in finance and general management from Cornell University

NON-EMPLOYEE DIRECTOR COMPENSATION

The Hershey Company Directors’ Compensation Plan

We maintain a Directors’ Compensation Plan that is designed to:

•Attract and retain highly qualified, non-employee directors; and

•Align the interests of non-employee directors with those of our stockholders by paying a portion of non-employee compensation in units representing shares of our Common Stock.

Directors who are employees of the Company receive no additional compensation for their service on our Board. Ms. Buck is the only employee of the Company who also served as a director during 2020 and thus received no additional compensation for her Board service.

The Board targets non-employee director compensation at the 50th percentile of compensation paid to directors at a peer group of companies we call the 2020 Compensation Peer Group. Information about the 2020 Compensation Peer Group is included in the section entitled “Setting Compensation” in the Compensation Discussion & Analysis. Each year, with the assistance of the Compensation Committee and the Compensation Committee’s compensation consultant, the Board reviews the compensation paid to directors at companies in the current peer group to determine whether any changes to non-employee director compensation are warranted.

As a result of its review in October 2019, the Board increased the annual cash retainer from $100,000 to $105,000, increased the annual Restricted Stock Unit (“RSU”) award from $155,000 to $160,000 and increased the annual Compensation Committee Chair retainer from $15,000 to $20,000.

Accordingly, compensation paid to non-employee directors in 2020 was as follows:


Form of Compensation			Payment ($)
Annual retainer for Chairman of the Board(1) (2)			150,000
Annual retainer for other non-employee directors			105,000
Annual RSU award			160,000
Annual retainer for Lead Independent Director(2) (3)			25,000
Annual retainers for chairs of Audit and Compensation Committee(2)			20,000
Annual retainers for chairs of Finance and Risk Management and Governance Committees(2)			15,000

____________________

(1)Applies only when Chairman of the Board is a non-employee director.

(2)Paid in addition to $105,000 annual retainer for non-employee directors.

(3)A Lead Independent Director is appointed if the Chairman of the Board is not independent.

The Board completed its annual review of non-employee director compensation in October 2020 and determined that the following changes were warranted for 2021 to ensure that the program remains aligned to the 50th percentile of compensation paid to directors from our 2020 Compensation Peer Group. The Board elected to increase the annual retainer for the Lead Independent Director from $25,000 to $30,000 and to increase the annual Finance and Risk Management Committee Chair retainer from $15,000 to $20,000. Except for these changes, all other elements of the non-employee director compensation program described above remain unchanged for 2021.

Payment of Annual Retainer, Lead Independent Director Fee and Committee Chair Fees

The annual retainer (including the annual retainer for the Chairman of the Board, when applicable) and any applicable Lead Independent Director or committee chair retainers for all non-employee directors are paid in quarterly installments on the 15th day of March, June, September and December, or the prior business day if the 15th is not a business day. Non-employee directors may elect to receive all or a portion of the annual retainer (including the annual retainer for the Chairman of the Board, when applicable) in cash or in Common Stock. Non-employee directors may also elect to defer receipt of all or a portion of the retainer (including the annual retainer for the Chairman of the Board, when applicable) any applicable Lead Independent

Director retainer or committee chair retainers until the date their membership on the Board ends. Lead Independent Director and committee chair retainers that are not deferred are paid only in cash.

Non-employee directors choosing to defer all or a portion of their retainer, any applicable Lead Independent Director retainer or committee chair retainers may invest the deferred amounts in two ways:

•In a cash account that values the performance of the investment based upon the performance of one or more third-party investment funds selected by the director from among the mutual funds or other investment options available to all employees participating in our 401(k) Plan. Amounts invested in the cash account are paid only in cash.

•In a deferred common stock unit account that we value according to the performance of our Common Stock, including reinvested dividends. Amounts invested in the deferred common stock unit account are paid in shares of Common Stock.

Restricted Stock Units

RSUs are granted quarterly to non-employee directors on the first day of January, April, July and October. In 2020, the number of RSUs granted in each quarter was determined by dividing $40,000 by the average closing price of a share of our Common Stock on the New York Stock Exchange (“NYSE”) on the last three trading days preceding the grant date. RSUs awarded to non-employee directors vest one year after the date of grant, or earlier upon termination of the director’s membership on the Board by reason of retirement (termination of service from the Board after the director’s 60th birthday), death or disability, for any reason after a Change in Control as defined in our Executive Benefits Protection Plan (Group 3A) (“EBPP 3A”), or under such other circumstances as the Board may determine. Vested RSUs are payable to directors in shares of Common Stock or, at the option of the director, can be deferred as common stock units under the Directors’ Compensation Plan until the director’s membership on the Board ends. Dividend equivalent units are credited at regular rates on the RSUs during the restriction period and, upon vesting of the RSUs, are payable in shares of Common Stock or deferred as common stock units together with any RSUs the director has deferred.

As of March 18, 2021, Messrs. Brown, Davis, Dutkowsky, Malcolm, Palmer and Shedlarz and Mmes. Arway, Haben and Koken had attained retirement age for purposes of the vesting of RSUs.

Other Compensation, Reimbursements and Programs

The Board occasionally establishes committees of limited duration for special purposes. When a special committee is established, the Board will determine whether to provide non-employee directors with additional compensation for service on such committee based on the expected duties of the committee, the anticipated number and length of any committee meetings, and other factors the Board, in its discretion, may deem relevant. No such committees were established in 2020.

We reimburse our directors for travel and other out-of-pocket expenses they incur when attending Board and committee meetings and for minor incidental expenses they incur when performing directors’ services. We also provide reimbursement for at least one director continuing education program each year. Directors receive travel accident insurance while traveling on the Company’s business and receive discounts on the purchase of our products to the same extent and on the same terms as our employees. Directors also are eligible to participate in the Company’s Gift Matching Program. Under the Gift Matching Program, the Company will match, upon a director’s request, contributions made by the director to one or more charitable organizations, on a dollar-for-dollar basis up to a maximum aggregate contribution of $5,000 annually.

Stock Ownership Guidelines

Pursuant to the Board’s Corporate Governance Guidelines, non-employee directors are expected to own shares of Common Stock having a value equal to at least five times the annual retainer. Each non-employee director has until January 1 of the year following his or her fifth anniversary of becoming a director to satisfy the guideline. The Compensation Committee reviews the stock ownership guidelines annually to ensure they are aligned with external market comparisons.

2020 Director Compensation

The following table and explanatory footnotes provide information with respect to the compensation paid or provided to non-employee directors during 2020:


Name(1)	Fees Earned or Paid in Cash(2) ($)	Stock Awards(3) ($)	All Other Compensation(4) ($)	Total ($)
Pamela M. Arway	117,747	160,000	5,000	282,747
James W. Brown	105,000	160,000	5,000	270,000
Victor L. Crawford	66,923	101,978	5,000	173,901
Charles A. Davis	114,135	160,000	5,000	279,135
Robert M. Dutkowsky	35,666	54,348	—	90,014
Mary Kay Haben	120,000	160,000	5,000	285,000
James C. Katzman	105,000	160,000	5,000	270,000
M. Diane Koken	105,000	160,000	5,000	270,000
Robert M. Malcolm	120,000	160,000	5,000	285,000
Anthony J. Palmer	128,187	160,000	2,550	290,737
Juan R. Perez	105,000	160,000	—	265,000
Wendy L. Schoppert	105,000	160,000	2,275	267,275
David L. Shedlarz	125,000	160,000	—	285,000

___________________

(1)During 2020, Mr. Davis served as Lead Independent Director until May 11, 2020, at which time he was succeeded by Mr. Palmer. Messrs. Crawford and Dutkowsky joined the Board on May 12, 2020 and August 29, 2020, respectively.

(2)Includes amounts earned or paid in cash or shares of Common Stock at the election of the director or deferred by the director under the Directors’ Compensation Plan. Amounts credited as earnings on amounts deferred under the Directors’ Compensation Plan are based on investment options available to all participants in our 401(k) Plan or our Common Stock and, accordingly, the earnings credited during 2020 were not considered “above market” or “preferential” earnings.

The following table sets forth the portion of fees earned or paid in cash or Common Stock, and the portion deferred with respect to retainers and fees earned during 2020:


Name	Immediate Payment			Deferred and Investment Election
	Cash Paid ($)	Value Paid in Shares of Common Stock ($)	Number of Shares of Common Stock (#)	Value Deferred to a Cash Account ($)	Value Deferred to a Common Stock Unit Account ($)	Number of Deferred Common Stock Units (#)
Pamela M. Arway	117,747	—	—	—	—	—
James W. Brown	105,000	—	—	—	—	—
Victor L. Crawford	—	—	—	66,923	—	—
Charles A. Davis	114,135	—	—	—	—	—
Robert M. Dutkowsky	35,666	—	—	—	—	—
Mary Kay Haben	120,000	—	—	—	—	—
James C. Katzman	—	—	—	—	105,000	737
M. Diane Koken	105,000	—	—	—	—	—
Robert M. Malcolm	120,000	—	—	—	—	—
Anthony J. Palmer	7,253	120,934	850	—	—	—
Juan R. Perez	89,250	15,750	111	—	—	—
Wendy L. Schoppert	105,000	—	—	—	—	—
David L. Shedlarz	125,000	—	—	—	—	—

(3)Represents the dollar amount recognized as expense during 2020 for financial statement reporting purposes with respect to RSUs awarded to the directors during 2020. RSUs awarded to directors are charged to expense in the Company’s financial statements at the grant date fair value on each quarterly grant date. The target annual grant date fair value of the RSUs for each director during 2020 was $160,000.

The following table provides information with respect to the number and market value of deferred common stock units and RSUs held as of December 31, 2020, based on the $152.33 closing price of our Common Stock as reported by NYSE on December 31, 2020, the last trading day of 2020. The information presented includes the accumulated value of each director’s deferred common stock units and RSUs. Balances shown below include dividend equivalent units credited in the form of additional common stock units on deferred amounts and dividend equivalent units credited in the form of additional common stock units on RSUs.


Name	Number of Deferred Common Stock Units (#)	Market Value of Deferred Common Stock Units as of December 31, 2020 ($)	Number of RSUs (#)	Market Value of RSUs as of December 31, 2020 ($)
Pamela M. Arway	—	—	1,183	180,206
James W. Brown	3,910	595,610	1,183	180,206
Victor L. Crawford	—	—	767	116,837
Charles A. Davis	—	—	1,183	180,206
Robert M. Dutkowsky	—	—	397	60,475
Mary Kay Haben	9,865	1,502,735	1,183	180,206
James C. Katzman	4,653	708,791	1,183	180,206
M. Diane Koken	3,910	595,610	1,183	180,206
Robert M. Malcolm	—	—	1,183	180,206
Anthony J. Palmer	—	—	1,183	180,206
Juan R. Perez	—	—	1,183	180,206
Wendy L. Schoppert	3,023	460,494	1,183	180,206
David L. Shedlarz	—	—	1,183	180,206

(4)Represents the Company match for contributions made by the director to one or more charitable organizations during 2020 under the Gift Matching Program.

SHARE OWNERSHIP OF DIRECTORS, MANAGEMENT

AND CERTAIN BENEFICIAL OWNERS

The following table sets forth information with respect to the beneficial ownership of our outstanding voting securities and exercisable stock options by:

•Stockholders who we believe owned more than 5% of our outstanding Common Stock or Class B Common Stock, as of March 18, 2021; and

•Our directors, director nominees, NEOs and all directors and executive officers as a group, as of March 18, 2021.


Holder	Common Stock(1)	Exercisable Stock Options	Percent of Common Stock(2)	Class B Common Stock	Percent of Class B Common Stock(3)
Hershey Trust Company, as trustee for the Milton Hershey School Trust(4) 100 Mansion Road, Hershey, PA 17033 Milton Hershey School(4) Founders Hall, Hershey, PA 17033	47,170	—	**	60,612,012	99.9
Hershey Trust Company(5)	76,430	—	**	—	—
BlackRock, Inc.(6) 55 East 52nd Street, New York, NY 10055	15,462,485	—	10.5	—	—
Vanguard Group, Inc.(7) 100 Vanguard Blvd, Malvern, PA 19355	13,477,131	—	9.1	—	—
Pamela M. Arway*	15,129	—	**	—	—
Damien Atkins	—	—	**	—	—
James W. Brown*	—	—	**	—	—
Michele G. Buck*	83,015	258,803	**	—	—
Victor L. Crawford*	—	—	**	—	—
Charles A. Davis*	24,654	—	**	—	—
Robert M. Dutkowsky*	—	—	**	—	—
Mary Kay Haben*	—	—	**	—	—
James C. Katzman*	—	—	**	—	—
M. Diane Koken*	600	—	**	—	—
Robert M. Malcolm*	12,612	—	**	—	—
Anthony J. Palmer*	12,562	—	**	—	—
Juan R. Perez*	1,491	—	**	—	—
Charles R. Raup	7,821	4,523	**	—	—
Jason R. Reiman	7,215	6,780	**	—	—
Wendy L. Schoppert*	—	—	**	—	—
David L. Shedlarz*	15,342	—	**	—	—
Steven E. Voskuil	6,216	—	**	—	—
Kevin R. Walling	31,563	—	**	—	—
Mary Beth West	—	—	**	—	—
All directors and executive officers as a group (24 persons)	244,059	427,311	**	—	—

____________________

Director/Director nominee

Less than 1%

(1)Amounts listed also include the following RSUs that will vest and be paid to the following holders within 60 days of March 18, 2021:


Name			RSUs (#)
Pamela M. Arway			304
Michele G. Buck			4,457
Charles A. Davis			304
Robert M. Malcolm			304
Anthony J. Palmer			304
Juan R. Perez			304
Charles R. Raup			556
Jason R. Reiman			570
David L. Shedlarz			304
Steven E. Voskuil			1,727

For all directors and executive officers as a group, the amount listed also includes 1,187 RSUs that will vest and be paid within 60 days of March 18, 2021 to executive officers who are not a NEO.

Amounts listed also include shares for which certain of the directors share voting and/or investment power with one or more other persons as follows: Ms. Arway, 14,825 shares owned jointly with her spouse; Ms. Koken, 600 shares held at Glenmede Trust Company; Mr. Malcolm, 12,308 shares owned jointly with his spouse; Mr. Palmer, 12,258 shares owned jointly with his spouse and Mr. Walling, 27,128 shares owned jointly with his spouse.

(2)Based upon 146,302,245 shares of Common Stock outstanding on March 18, 2021.

(3)Based upon 60,613,777 shares of Class B Common Stock outstanding on March 18, 2021.

(4)Hershey Trust Company, as trustee for the Milton Hershey School Trust, has the right at any time to convert its Class B Common Stock into Common Stock on a share-for-share basis. If on March 18, 2021, Hershey Trust Company, as trustee for the Milton Hershey School Trust, converted all of its Class B Common Stock into Common Stock, Hershey Trust Company, as trustee for the Milton Hershey School Trust, would own beneficially 60,659,182 shares of our Common Stock (47,170 Common Stock shares plus 60,612,012 converted Class B Common Stock shares), or 29.3% of the 206,914,257 shares of Common Stock outstanding following the conversion (calculated as 146,302,245 Common Stock shares outstanding prior to the conversion plus 60,612,012 converted Class B Common Stock shares). For more information about the Milton Hershey School Trust, Hershey Trust Company, Milton Hershey School and the ownership and voting of these securities, please see the section entitled “Information Regarding Our Controlling Stockholder.”

(5)Please see the section entitled “Information Regarding Our Controlling Stockholder” for more information about shares of Common Stock held by Hershey Trust Company as investments.

(6)Information regarding BlackRock, Inc. and its beneficial holdings was obtained from a Schedule 13G/A filed with the SEC on January 27, 2021. The filing indicated that, as of December 31, 2020, BlackRock, Inc. had sole voting power over 13,499,651 shares, shared voting power over no shares, sole investment power over 15,462,485 shares and shared investment power over no shares. The filing indicated that BlackRock, Inc. is a parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G).

(7)Information regarding Vanguard Group, Inc. and its beneficial holdings was obtained from a Schedule 13G/A filed with the SEC on February 10, 2021. The filing indicated that, as of December 31, 2020, Vanguard Group, Inc. had sole voting power over no shares, shared voting power over 289,333 shares, sole investment power over 12,783,950 shares and shared investment power over 693,181 shares. The filing indicated that Vanguard Group, Inc. is an investment advisor in accordance with Rule 13d-1(b)(1)(ii)(E).

Ownership of Other Company Securities

Certain directors and NEOs hold Company securities not reflected in the beneficial ownership table above because they will not convert, or cannot be converted, to shares of Common Stock within 60 days of our March 18, 2021 Record Date. These securities include:

•Certain unvested RSUs or deferred common stock units held by our directors and NEOs; and

•Certain unvested stock options held by our NEOs.

The table below shows these holdings as of March 18, 2021. You can find additional information about RSUs and deferred common stock units held by directors in the section entitled “Non-Employee Director Compensation.” You can find additional information about stock options, RSUs and deferred common stock units held by the NEOs in the section entitled “Executive Compensation.”


Holder	Shares Underlying RSUs and Common Stock Units Not Beneficially Owned	Shares Underlying Stock Options Not Beneficially Owned
Pamela M. Arway*	871	—
Damien Atkins	3,186	—
James W. Brown*	5,386	—
Michele G. Buck*	109,316	22,727
Victor L. Crawford*	1,036	—
Charles A. Davis*	871	—
Robert M. Dutkowsky*	664	—
Mary Kay Haben*	11,371	—
James C. Katzman*	6,308	—
M. Diane Koken*	5,386	—
Robert M. Malcolm*	871	—
Anthony J. Palmer*	1,097	—
Juan R. Perez*	871	—
Charles R. Raup	5,547	1,025
Jason R. Reiman	6,438	872
Wendy L. Schoppert*	4,494	—
David L. Shedlarz*	871	—
Steven E. Voskuil	13,776	—
Kevin R. Walling	—	—
Mary Beth West	—	—

___________________


*			Director

Information Regarding Our Controlling Stockholder

In 1909, Milton S. and Catherine S. Hershey established a trust having as its sole beneficiary Milton Hershey School, a non-profit school for the full-time care and education of disadvantaged children located in Hershey, Pennsylvania. Hershey Trust Company, a state-chartered trust company, is trustee of the Milton Hershey School Trust.

In its capacity as trustee for the Milton Hershey School Trust, Hershey Trust Company is our controlling stockholder. In this capacity, it will have the right to cast .032% of all of the votes entitled to be cast on matters requiring the vote of the Common Stock voting separately and 80.6% of all of the votes entitled to be cast on matters requiring the vote of the Common Stock and Class B Common Stock voting together. The board of directors of Hershey Trust Company, with the approval of the board of managers (governing body) of Milton Hershey School (which authorizes the investment policy for the Milton Hershey School Trust), decides how funds held by Hershey Trust Company, as trustee for the Milton Hershey School Trust, will be invested and how its shares of The Hershey Company will be voted.

As of the Record Date, Hershey Trust Company also held 76,430 shares of our Common Stock as investments. The board of directors or management of Hershey Trust Company decides how these shares will be voted.

In all, Hershey Trust Company, as trustee for the Milton Hershey School Trust and as direct owner of investment shares, will be entitled to vote 123,600 shares of our Common Stock and 60,612,012 shares of our Class B Common Stock at the Annual Meeting. Stated in terms of voting power, Hershey Trust Company will have the right to cast .084% of all of the votes entitled to be cast on matters requiring the vote of the Common Stock voting separately and 80.6% of all of the votes entitled to be cast on matters requiring the vote of the Common Stock and Class B Common Stock voting together at the Annual Meeting.

Our certificate of incorporation contains the following important provisions regarding our Class B Common Stock:

•All holders of Class B Common Stock, including Hershey Trust Company, as trustee for Milton Hershey School Trust, may convert any of their Class B Common Stock shares into shares of our Common Stock at any time on a share-for-share basis.

•All shares of Class B Common Stock will automatically be converted to shares of Common Stock on a share-for-share basis if Hershey Trust Company, as trustee for Milton Hershey School Trust, or any successor trustee, or Milton Hershey School, as appropriate, ceases to hold more than 50% of the total Class B Common Stock shares outstanding and at least 15% of the total Common Stock and Class B Common Stock shares outstanding.

•We must obtain the approval of Hershey Trust Company, as trustee for Milton Hershey School Trust, or any successor trustee, or Milton Hershey School, as appropriate, before we issue any Common Stock or take any other action that would deprive Hershey Trust Company, as trustee for Milton Hershey School Trust, or any successor trustee, or Milton Hershey School, as appropriate, of the ability to cast a majority of the votes on any matter where the Class B Common Stock is entitled to vote, either separately as a class or together with any other class.

AUDIT COMMITTEE REPORT

To Our Stockholders:

The Audit Committee is currently comprised of six directors, each of whom is considered independent under the NYSE Rules and the rules and regulations of the SEC. The Board has determined that each member of the Audit Committee is financially literate and that each of Ms. Schoppert and Messrs. Crawford and Shedlarz qualifies as an “audit committee financial expert,” as that term is defined under the rules promulgated by the SEC.

Our role as the Audit Committee is to assist the Board in its oversight of:

•The integrity of the Company’s financial statements;

•The Company’s compliance with legal and regulatory requirements;

•The independent auditors’ qualifications and independence; and

•The performance of the independent auditors and the Company’s internal audit function.

The Audit Committee operates under a written charter that was last reviewed by the Audit Committee on December 3, 2020.

Our duties as an Audit Committee include overseeing the Company’s management, internal auditors and independent auditors in their performance of the following functions, for which they are responsible:

Management

•Preparing the Company’s financial statements;

•Establishing effective financial reporting systems and internal controls and procedures; and

•Reporting on the effectiveness of the Company’s internal control over financial reporting.

Internal Audit Department

•Independently assessing management’s system of internal controls and procedures; and

•Reporting on the effectiveness of that system.

Independent Auditors

•Auditing the Company’s financial statements;

•Expressing an opinion about the financial statements’ conformity with U.S. generally accepted accounting principles; and

•Annually auditing the effectiveness of the Company’s internal control over financial reporting.

We meet periodically with management, the internal auditors and independent auditors, independently and collectively, to discuss the quality of the Company’s financial reporting process and the adequacy and effectiveness of the Company’s internal controls. Prior to the Company filing its Annual Report on Form 10-K for the year ended December 31, 2020 with the SEC, we also:

•Reviewed and discussed the audited financial statements with management and the independent auditors;

•Discussed with the independent auditors the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board;

•Received the written disclosures and the letter from the independent auditors in accordance with applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence; and

•Discussed with the independent auditors their independence from the Company.

We are not employees of the Company and are not performing the functions of auditors or accountants. We are not responsible as an Audit Committee or individually to conduct “field work” or other types of auditing or accounting reviews or procedures or to set auditor independence standards. In carrying out our duties as Audit Committee members, we have relied on the information provided to us by management and the independent auditors. Consequently, we do not assure that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with U.S. generally accepted accounting principles or that the Company’s auditors are in fact “independent.”

Based on the reports and discussions described in this report, and subject to the limitations on our role and responsibilities as an Audit Committee referred to above and in our charter, we recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 17, 2021.

Submitted by the Audit Committee:

David L. Shedlarz, Chair

James W. Brown

Victor L. Crawford

M. Diane Koken

Robert M. Malcolm

Wendy L. Schoppert

INFORMATION ABOUT OUR INDEPENDENT AUDITORS

The following table sets forth the amount of audit fees, audit-related fees, tax fees and all other fees billed or expected to be billed by Ernst & Young LLP, our independent auditors for the fiscal years ended December 31, 2020 and December 31, 2019:


Nature of Fees	2020 ($)	2019 ($)
Audit Fees	4,967,785	4,505,851
Audit-Related Fees(1)	4,502	288,646
Tax Fees(2)	246,336	399,462
All Other Fees(3)	—	—
Total Fees	5,218,623	5,193,959

____________________

(1)Fees associated primarily with services related to due diligence for potential business acquisitions.

(2)Fees pertaining primarily to tax consultation and tax compliance services.

(3)Fees for other permissible services that do not meet the above category descriptions, including subscription programs.

The Audit Committee pre-approves all audit, audit-related and non-audit services performed by the independent auditors. The Audit Committee is authorized by its charter to delegate to one or more of its members the authority to pre-approve any audit, audit-related or non-audit services, provided that the approval is presented to the Audit Committee at its next scheduled meeting.

The Audit Committee pre-approved all services provided by Ernst & Young LLP in 2020.

PROPOSAL NO. 2 – RATIFICATION OF APPOINTMENT

OF INDEPENDENT AUDITORS


ü			The Board of Directors unanimously recommends that stockholders vote FOR ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent auditors for 2021

The Audit Committee has appointed Ernst & Young LLP as the Company’s independent auditors for 2021. Although not required to do so, the Board, upon the Audit Committee’s recommendation, has determined to submit the Audit Committee’s appointment of Ernst & Young LLP as our independent auditors to stockholders for ratification as a matter of good corporate governance.

The Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent auditors for 2021 will be considered ratified if at least a majority of the votes of the Common Stock and Class B Common Stock (voting together without regard to class) represented at the Annual Meeting are voted for the proposal. If stockholders do not ratify the appointment of Ernst & Young LLP as the Company’s independent auditors for 2021, the Audit Committee will reconsider its appointment.

Representatives of Ernst & Young LLP will attend the Annual Meeting, will have the opportunity to make a statement, if they so desire, and will be available to respond to questions.

COMPENSATION DISCUSSION & ANALYSIS

EXECUTIVE COMPENSATION

This section discusses and analyzes the decisions we made concerning the compensation of our named executive officers (“NEOs”) for 2020. It also describes the process for determining executive compensation and the factors considered in determining the amount of compensation awarded to our NEOs. Our NEOs for 2020 are:


Name			Title
Michele G. Buck			Chairman of the Board, President and Chief Executive Officer (“CEO”)
Steven E. Voskuil			Senior Vice President, Chief Financial Officer (“CFO”)
Charles R. Raup			President, U.S.
Jason R. Reiman			Senior Vice President, Chief Supply Chain Officer
Damien Atkins(1)			Former Senior Vice President, General Counsel and Secretary
Kevin R. Walling(2)			Former Senior Vice President, Chief Human Resources Officer
Mary Beth West(3)			Former Senior Vice President, Chief Growth Officer

____________________

(1)Mr. Atkins separated from the Company on January 31, 2021.

(2)Mr. Walling retired on February 29, 2020.

(3)Ms. West retired on February 29, 2020.

Executive Summary

Strategic Plan

The Hershey Company (the “Company”), headquartered in Hershey, Pa., is a global confectionery leader known for making more moments of goodness through its chocolate, sweets, mints, gum and other great-tasting snacks. We have approximately 16,880 employees around the world who work every day to deliver delicious, quality products. We have more than 90 brands that drive approximately $8.1 billion in annual revenues.

Our vision is to be an innovative snacking powerhouse. We are currently the number two snacking manufacturer in the United States. We aspire to be a leader in meeting consumers’ evolving snacking needs while strengthening the capabilities that drive our growth. We are focused on four strategic imperatives to ensure the Company’s success now and in the future:

•Drive core confection business and broaden participation in snacking;

•Deliver profitable international growth;

•Expand competitive advantage through differentiated capabilities; and

•Responsibly manage our operations to ensure the long-term sustainability of our business, our planet and our people.

Our strategic plan, and the financial metrics we establish to help achieve and measure success against our plan, serve as the foundation of our executive compensation program. In January 2020, we announced the following Company financial expectations:

•Increase net sales between 2% and 4% from 2019; and

•Increase adjusted earnings per share-diluted(1) between 6% and 8% from 2019.

See the section entitled “Annual Incentives” for more information regarding our 2020 annual incentive targets and related results.

In 2020, COVID-19 had a positive impact on certain parts of our business while having a negative impact on others. Despite changes to what and where consumers were eating, our categories and our trusted brands remained important, particularly when celebrating seasons and spending time at home with family. With the onset of the pandemic, we immediately enhanced our people safety protocols to support our employees’ physical, emotional and economic well-being and maintain our ability to make and sell these trusted brands.

We delivered the low end of our 2020 net sales guidance despite a one-and-one-half-point headwind on businesses hardest hit by COVID-19, and exceeded the high end of our 2020 adjusted earnings per share-diluted guidance. Over the last three years, we also delivered advantaged shareholder returns versus our 2018 peer group. Our 2018 peer group is described in more detail in the section entitled “Long-Term Incentives.”

Executive Compensation Philosophy

Our executive compensation philosophy is to provide compelling, dynamic, market-based total compensation tied to performance and aligned with our stockholders’ interests. Our goal is to ensure the Company has the talent it needs to maintain sustained long-term performance for our stockholders, employees and communities. The guiding principles that help us achieve this goal are compensation programs which:

Hershey Has Strong Pay-for-Performance Alignment

The Compensation and Executive Organization Committee (the “Compensation Committee”) of our Board of Directors (the “Board”) has oversight responsibility for our executive compensation framework and for aligning our executives’ pay with the Company’s performance. We believe we have strong pay-for-performance alignment because a significant portion of each NEO’s target total direct compensation is tied to the financial performance of the Company as well as stockholder returns.

In 2020, approximately 87% of our CEO’s and 71% of our other NEOs’ target total direct compensation, excluding Ms. West’s and Mr. Walling’s, was at-risk, including a substantial portion tied to stockholder value. Specifically, 34% of our Performance Stock Units (“PSUs”) were tied to Total Shareholder Return (“TSR”). Combined with the other financial and strategic metrics that determine our NEOs’ compensation, we have aligned our executive compensation program with the long-term interests of our stockholders.

Our Stockholders Strongly Approve of Our Pay Practices

Last year, our stockholders overwhelmingly approved our “say-on-pay” resolution, with more than 93% of the votes cast by the holders of Common Stock and more than 99% of the combined votes cast by the holders of the Common Stock and Class B Common Stock voting in favor. Our Compensation Committee believes the results of last year’s “say-on-pay” vote affirmed our stockholders’ support of our Company’s executive compensation program. Consequentially, our approach to executive compensation in 2020 was substantially the same as the approach stockholders approved in 2019. At the 2017 Annual Meeting of Stockholders, our stockholders voted to continue having an annual “say-on-pay” vote as described in Proposal No. 3 –Advise on Named Executive Officer Compensation. We plan to ask stockholders to express a preference for the frequency of the “say-on-pay” vote at our 2023 Annual Meeting of Stockholders.

We believe our compensation and governance policies and practices are significant drivers of our stockholder support. These policies and practices include:


WHAT WE DO			Pay for performance: A substantial percentage of each NEO’s target total direct compensation is at-risk.
			Performance measures support strategic objectives: The performance measures we use in our compensation programs reflect strategic and operating objectives, creating long-term value for our stockholders.
			Appropriate risk-taking: We set performance goals that consider our publicly-announced financial expectations, which we believe will encourage appropriate risk taking. Our incentive programs are appropriately capped so as not to encourage excessive risk taking.
			“Double-trigger” benefits in the event of a change in control: In the event of a change in control, the payment of severance benefits and the acceleration of vesting of long-term incentive awards that are replaced with qualifying awards will not occur unless there is also a qualifying termination of employment upon or within two years following the change in control.
			Clawbacks and other covenants: We require our NEOs to enter into an Employee Confidentiality and Restrictive Covenant Agreement (“ECRCA”) as a condition of receipt of long-term incentive awards. Failure to comply with the ECRCA may subject the employee to cancellation of awards and a requirement to repay amounts received from awards. Under the Equity and Incentive Compensation Plan (“EICP”), when an individual’s actions result in the filing of financial documents not in compliance with financial reporting requirements, the Company has the right to recoup or require repayment of an award earned or accrued during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission (“SEC”) of the non-compliant document. Beginning in 2021, the Company updated the clawback language within our One Hershey Incentive Program (“OHIP”) and long-term incentive award agreements to authorize the Compensation Committee to seek repayment in the event of intentional misconduct by a grantee that causes the Company material financial or reputational harm.
			Significant stock ownership guidelines: Our NEOs and other executives are required to accumulate and hold stock equal to a multiple of base salary. If an executive has not met his or her ownership requirement in a timely manner, the executive is required to retain a portion of shares received under long-term incentive awards until the requirement is met.

WHAT WE DON’T DO			Provide excessive perquisites: Executive perquisites are kept to a minimal level relative to a NEO’s total compensation and do not play a significant role in our executive compensation program.
			Tax gross-ups: We generally do not provide tax gross-ups, except for relocation expenses and standard expatriate tax equalization benefits available to all similarly situated employees.
			Provide for the prepayment of dividends on unearned PSUs: Dividends are not paid on PSU awards during the three-year performance cycle.
			Hedging Company stock: Our NEOs, directors, employees and other insiders are prohibited from entering into hedging transactions related to our stock, including forward sale purchase contracts, equity swaps, collars or exchange funds.
			Pledging Company stock: Our NEOs, directors, employees and other insiders are prohibited from entering into pledging transactions related to our stock.
			Re-pricings or exchanges of underwater stock options: Our stockholder-approved EICP prohibits re-pricing or exchange of underwater stock options without stockholder approval.

Changes to Our Annual and Long-Term Incentive Programs

In October 2019, the Compensation Committee approved eliminating the individual performance metrics for Ms. Buck so that, effective January 1, 2020, 100% of her OHIP award is based on Company financial performance; enhancing the pay-for-performance alignment between the CEO’s OHIP payout and objective, financial performance results. Non-financial performance is evaluated as part of the CEO’s annual performance assessment. Except for this change, all other elements of our annual and long-term incentive programs remained unchanged for 2020. These programs are described in more detail in the sections entitled “Annual Incentives” and “Long-Term Incentives,” respectively.

2020 Performance Results and Payouts

2020 OHIP - Performance Metrics and Results

As mentioned previously, COVID-19 had both positive and negative impacts on our business. Payouts under the 2020 OHIP reflect our below target performance in net sales due to COVID-19 headwinds in certain business units and maximum performance in adjusted earnings per share-diluted and Earnings Before Interest and Tax (“EBIT”) Margin % resulting from strong performance in North America and Selling, Marketing and Administrative optimization. As a result, for Ms. Buck, 100% of the 2020 OHIP award, and, for all other NEOs, 75% of the 2020 OHIP award was based on the Company performance score of 149.09%. With the exception of Ms. Buck, the remainder of the 2020 OHIP award for each NEO was determined by individual performance as described in more detail in the section entitled “Annual Incentives.”


Metric	2020 ResultsRe	2020 Awards
Net Sales(1)	2.7% growth was below target	Company performance score of 149.09%
Adjusted Earnings per Share-Diluted(2)	8.8% growth was above target
EBIT Margin %(3)	22.43% was above target
Individual Performance Metrics(4)	Described in more detail in the section entitled “Annual Incentives”	Individual performance scores ranged from 100% to 200% of target for each NEO

____________________

(1)For purposes of determining the Company performance score, net sales is measured on a constant currency basis, further adjusted to reflect the impact of divestitures and acquisitions as compared to target, which is a non-GAAP performance measure. To calculate net sales on a constant currency basis, net sales for the current fiscal year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average rates during the comparable period of the prior fiscal year. For more information on our use of non-GAAP performance measures, please see footnote (1) in the section entitled “Executive Summary.”

(2)For purposes of determining the Company performance score, adjusted earnings per share-diluted as determined for financial reporting purposes, which is a non-GAAP performance measure, is further adjusted to reflect the impact of divestitures and acquisitions as compared to target. For more information regarding how we define adjusted earnings per share-diluted, please see footnote (1) in the section entitled “Executive Summary.”

(3)EBIT Margin is a non-GAAP performance measure. We define EBIT margin as the adjusted operating margin which excludes certain one-time items impacting comparability and further adjusted to reflect the impact of divestitures and acquisitions as compared to target. For more information regarding our use of non-GAAP performance measures and how we define adjusted operating margin, please see the Company’s earnings release on Form 8-K dated February 4, 2021.

(4)Ms. Buck’s OHIP award does not include individual performance metrics.

2018-2020 PSU Cycle - Performance Metrics and Results

Payouts for the 2018-2020 PSU cycle, shown in the table below, reflect above target performance in all three metrics, successfully delivering financial commitments to shareholders during the COVID-19 pandemic. These payouts are described in more detail in the section entitled “Performance Stock Unit Targets and Results.”


Metric	2018-2020 Results	2018-2020 Awards
Total Shareholder Return	73rd percentile was above target	170.71% payout
Three-year Compound Annual Growth Rate (“CAGR”) in Net Sales(1)(2)	2.4% CAGR was above target
Three-year CAGR in Adjusted Earnings per Share-Diluted(1)(3)	10.6% CAGR was above target

____________________

(1)Results for our Pirate Brands and ONE businesses were excluded from the following metrics, as applicable, as these acquisitions were made subsequent to the approval of the 2018-2020 PSU cycle metrics:

• Three-year CAGR in net sales growth; and

• Three-year CAGR in adjusted earnings per share-diluted.

(2)Net Sales is measured on a constant currency basis, which is a non-GAAP performance measure. To calculate net sales on a constant currency basis, net sales for the current fiscal year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average rates during the comparable period of the base fiscal year.

(3)Adjusted earnings per share-diluted is a non-GAAP performance measure. For more information regarding how we define adjusted earnings per share-diluted, please see footnote (1) in the section entitled “Executive Summary.”

The Role of the Compensation Committee

The Compensation Committee has primary responsibility for making compensation decisions for our NEOs other than our CEO. Our CEO’s compensation is approved by the independent members of the Board based on the recommendations of the Compensation Committee.

The Compensation Committee operates under a charter approved by the Board. The Compensation Committee uses information from its independent executive compensation consultant, input from our CEO (except for matters regarding her own pay) and assistance from our Human Resources Department to make decisions and to conduct its annual review of the Company’s executive compensation program.

The Compensation Committee works with a rolling agenda, with its heaviest workload occurring during the first quarter of the year. During this quarter, decisions are made with respect to annual and long-term incentives earned based on the prior year’s performance and target compensation levels are finalized for the current year. The Compensation Committee also reviews and approves this Compensation Discussion & Analysis. During the second and third quarters, the Compensation Committee reviews materials relating to peer group composition, tally sheets, competitive pay analysis and other information that forms the foundation for future decisions. The Compensation Committee uses the third and fourth quarters to finalize decisions relating to the peer group and compensation plan design for use in the upcoming year.

The Compensation Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Compensation Committee and, pursuant to the provisions of the EICP, may appoint the CEO as a committee of the Board as necessary for the purpose of making equity grants under the EICP; provided, however, the Compensation Committee may not delegate the approval of certain transactions to a subcommittee or to the CEO if such transactions involve the approval or grant of equity-based compensation to an “officer” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 (“Exchange Act”) or certification as to the attainment of performance goals for a “covered employee” for purposes of Section 162(m) of the Internal Revenue Code (“IRC”) unless such subcommittee consists solely of members of the Compensation Committee who are (i) “Non-Employee Directors” for the purposes of Rule 16b-3 under the Exchange Act, and (ii) “outside directors” for the purposes of Section 162(m) of the IRC.

Compensation Advisor Independence

The Compensation Committee retained Frederic W. Cook & Co., Inc. (“F.W. Cook”) as its independent executive compensation consultant for fiscal 2020. F.W. Cook advised the Compensation Committee on director and executive compensation, but did no other work for the Company. The Compensation Committee reviews all fees for services related to executive and director compensation provided by F.W. Cook.

The Committee has assessed the independence of F.W. Cook pursuant to SEC and NYSE rules, and concluded that no conflict of interest exists that would prevent the consulting firm from independently advising the Committee.

In establishing compensation levels and awards for executive officers other than our CEO, the Compensation Committee takes into consideration the recommendations of the independent executive compensation consultant and the Human Resources Department, combined with our CEO’s evaluations of each officer’s individual performance and Company performance. The Compensation Committee evaluates director compensation primarily on the basis of peer group data used for benchmarking director compensation provided by the independent executive compensation consultant.

Compensation Components

Our executive compensation program includes the following key elements:


Element	Design	Purpose
Base Salary	Fixed compensation component. Reviewed annually and adjusted as appropriate.	Intended to attract and retain executives with proven skills and leadership abilities that will enable us to be successful.
Annual Incentive Award	Variable, performance-based compensation component. Payable based on business results and, with the exception of the CEO, individual performance.	Intended to motivate and reward executives for successful execution of strategic priorities.
Long-Term Incentive Awards	Variable compensation component. Granted annually as a combination of RSUs and PSUs. PSUs are considered to be performance-based; the value of amounts actually earned depend on Company and stock price performance.	Intended to motivate and reward executives for long-term Company financial performance and enhanced long-term stockholder value by balancing compensation opportunity and risk, while encouraging sustained performance and retention.

The following charts illustrate the weighting of base salary, annual incentive awards and long-term incentive awards at target for our CEO and our other NEOs, excluding Mr. Walling and Ms. West, during 2020:


At-Risk Compensation = 87%			At-Risk Compensation = 71%

Setting Compensation

The Compensation Committee’s annual compensation review for 2020 included an analysis of data, comparing the Company’s executive compensation levels against a peer group of publicly-held consumer products companies. F.W. Cook, the Compensation Committee’s independent executive compensation consultant provides the Compensation Committee with advice, counsel and recommendations with respect to the composition of the peer group and competitive data used for benchmarking our compensation program. The Compensation Committee uses this and other information provided by F.W. Cook to reach an independent recommendation regarding compensation to be paid to our CEO, directors and other officers. The Compensation Committee’s final recommendation with respect to CEO compensation is then given to the independent directors of our Board for review and final approval.

Companies in the peer group used to benchmark executive pay levels for 2020 (the “2020 Compensation Peer Group”) are:


Brown-Forman Corporation	General Mills, Inc.	Molson Coors Brewing Company
Campbell Soup Company	Hormel Foods Corporation	Mondelez International, Inc.
Colgate-Palmolive Company	Kellogg Company	The Clorox Company
ConAgra Brands, Inc.	Keurig Dr. Pepper, Inc.	The J. M. Smucker Company
Constellation Brands, Inc.	McCormick & Company, Inc.

The Compensation Committee selected these companies after reviewing publicly-held companies offering products/services similar to ours, with annual revenues within a range of approximately one-third to three times our annual revenue (with the exception of Mondelez International who is outside of this range and whom we also consider a peer company for executive talent) and market capitalization within a reasonable range of our market capitalization. As compared to the 2020 Compensation Peer Group, Hershey’s 2019 revenue of $7.8 billion and market capitalization of $28.0 billion were at the 23rd and 63rd percentiles, respectively. All of the companies in our 2019 Compensation Peer Group were included in our 2020 Compensation Peer Group.

Data from the 2020 Compensation Peer Group was supplemented by composite data from consumer products and general industry companies of comparable size. The survey composite data provided us with broader, industry-specific information regarding pay levels at consumer products and general industry companies for positions similar to those held by our NEOs.

The Compensation Committee reviewed a report summarizing target total direct compensation (base salary plus target annual incentive plus target long-term incentive) levels at the 25th, 50th and 75th percentiles of the 2020 Compensation Peer Group and the survey composite data for positions comparable to those held by each of our NEOs. Hershey targets total direct compensation for its executive officers, in aggregate, at competitive pay levels using the median of our peer group for reference. Positioning varies by job, and the Compensation Committee considers a number of factors including market competitiveness, specific duties and responsibilities of the executive versus those of peers, experience and succession planning. The Compensation Committee believes it is appropriate to reward the executive management team with compensation above or below the competitive median if the financial targets associated with its variable pay programs are above or below target, respectively.

During 2020, the Compensation Committee received detailed tally sheets prepared by management. Each tally sheet captures comprehensive compensation, benefits and stock ownership data. The tally sheets provide the Compensation Committee with a complete picture of each executive’s current and projected compensation and the amount of each element of compensation or other benefit the executive would receive in the event of voluntary or involuntary termination, retirement, disability, death, or upon change in control. The Compensation Committee considers this information, as well as the benchmark information, when making compensation decisions.

Base Salary

Base salary for each NEO is determined by considering the relative importance of the position, the competitive marketplace and the individual’s performance, responsibilities and experience. Salary reviews are generally conducted annually at the beginning of the year. Each NEO’s base salary is compared to internal and external references. Base salary adjustments, if any, are made after considering market references, Company performance against financial goals and individual performance. CEO performance is evaluated by the Compensation Committee and independent members of the Board. The CEO evaluates the performance of her direct reports, including all NEOs, and reviews her recommendations for salary adjustments with the Compensation Committee prior to its approval of the base salary for each NEO. If a NEO has responsibility for a particular business unit, the business unit’s financial results also will be strongly considered.

On the basis of the foregoing considerations, the Compensation Committee, and all independent directors in the case of our CEO, approved base salaries for 2020 as follows:


Name	2020 Base Salary ($)	Increase from 2019 (%)
Ms. Buck	1,202,000	3.0
Mr. Voskuil	675,000	8.0
Mr. Raup(1)	500,000	25.0
Mr. Reiman	513,000	8.0
Mr. Atkins	589,050	2.0
Mr. Walling	532,080	—
Ms. West	703,020	—

____________________

(1)Mr. Raup was promoted into the President, U.S. role effective January 1, 2020.

See Column (c) of the 2020 Summary Compensation Table for information regarding the base salary earned by each of our NEOs during 2020.

Annual Incentives

Our NEOs are eligible to receive an annual cash incentive award under the OHIP. The OHIP links the NEO’s annual payout opportunity to measures he or she can affect most directly. For 2020, our CEO and all employees reporting directly to her, including the NEOs, had common financial objectives tied to total Company performance consistent with their responsibility to manage the entire Company. Total Company performance targets are established in the context of our announced expectations for financial performance, prior year results and market conditions.

For 2020, our NEOs were eligible to earn individual OHIP awards as follows:


Name			2020 Target OHIP (% of Base Salary)
Ms. Buck			150
Mr. Voskuil			85
Mr. Raup			70
Mr. Reiman			65
Mr. Atkins			70
Mr. Walling			70
Ms. West			80

In determining the target OHIP percentage for each of the NEOs, the Compensation Committee, and the independent directors in the case of our CEO, considered the value of target total cash compensation against market references. Target total cash compensation levels for each of the NEOs fall within an appropriate range relative to the median for comparable positions given each incumbent’s performance, responsibilities and tenure in the role.

In general, the final OHIP award is determined by multiplying the NEO’s base salary, the applicable target percentage and performance scores ranging from 0% to 200% based on Company performance and, with the exception of Ms. Buck, individual performance. The Company financial performance goals are established at the beginning of each year by the Compensation Committee. Individual performance goals also are established at that time, or at the time of hire if later. If performance scores exceed the target objectives, a NEO may receive an OHIP payout greater than his or her target award value. If performance scores are below the target objectives, the NEO’s OHIP payout will be below his or her target award value, subject to no award if performance is below threshold levels.

2020 OHIP Financial Performance Targets and Results (75% - 100% of Total OHIP)

Our 2020 OHIP financial performance targets, our financial performance results for 2020 and the resulting financial performance scores for OHIP were as follows:


Metric	2020 Target		2020 Actual		Target Award (%)	Performance Score (%)
	($)	(% growth)	($)	(% growth)
Net Sales(1)	8.234 billion	3.1	8.199 billion	2.7	50.00	49.09
Adjusted Earnings per Share-Diluted(2)	6.19	7.1	6.29	8.8	25.00	50.00
EBIT Margin %(3)	21.79%	65 basis points	22.43%	129 basis points	25.00	50.00
Total OHIP Company Score					100.00	149.09

____________________

As described earlier, for 2020 the Compensation Committee increased the weighting of financial performance metrics from 75% to 100% and removed the individual performance component of Ms. Buck’s target award. This change enhanced the pay-for-performance alignment between the CEO’s OHIP payout and objective, financial performance results. For Ms. Buck, based upon the Company financial score of 149.09%, she earned the following 2020 OHIP award:


Name	Award Target (%)	Award Target(1) ($)	2020 OHIP Award ($)
Ms. Buck	150	1,801,586	2,685,985

________________

(1)Target award is based upon actual salary received in 2020.

2020 OHIP Individual Performance Results (0% - 25% of Total OHIP)

With the exception of Ms. Buck, the remaining 25% of each NEO’s 2020 OHIP award was based upon individual performance toward achievement of individual performance goals focused on strategic priorities applicable to the NEO’s position, but tied to the overall Company’s top priorities for the year.

Steven E. Voskuil, Senior Vice President, CFO

Mr. Voskuil led the development and execution of the COVID-19 financial plan that enabled strong financial results. Mr. Voskuil also led initiatives that advanced our strategic planning and Mergers and Acquisitions (“M&A”) capabilities and kept the Enterprise Resource Planning program on track to deliver a contemporized technology system to support enterprise goals.

______________________________________________________________________________________________________

Charles Raup, President, U.S.

Mr. Raup successfully deployed strategies focused on delivering sustainable, profitable growth and market share gains, achieving the financial objectives for the U.S. market. Mr. Raup also set the foundation to deliver our strategic plan objectives through advanced commercial capabilities.

______________________________________________________________________________________________________

Jason Reiman, Senior Vice President, Chief Supply Chain Officer

Mr. Reiman led the development and execution of the Company’s response to safely make and distribute our products during COVID-19. He also successfully delivered key milestones of Hershey’s next generation Supply Chain, focused on delivering an agile supply chain network to expand margins and enable enterprise growth through expanding manufacturing capacity, improving fulfillment and developing supply chain capabilities.

______________________________________________________________________________________________________

Damien Atkins, Former Senior Vice President, General Counsel and Secretary

Mr. Atkins successfully executed the duties of the Senior Vice President, General Counsel and Secretary role, including advancing compliance, government relations and legal capabilities.

______________________________________________________________________________________________________

Kevin R. Walling, Former Senior Vice President, Chief Human Resources Officer

Mr. Walling successfully executed and transitioned the key accountabilities of the Chief Human Resources Officer.

Mary Beth West, Former Senior Vice President, Chief Growth Officer

Ms. West successfully executed and transitioned the key accountabilities of the Chief Growth Officer.

______________________________________________________________________________________________________

Ms. Buck provided the Compensation Committee with her assessment of each NEO’s 2020 performance and achievement in relation to their performance goals. Based upon those assessments, Ms. Buck recommended, and the Compensation Committee approved, the individual performance awards and total OHIP payouts as shown in the table below.

Based upon a 75% weight for the Company financial score of 149.09% of target and a 25% weight for individual performance, our other NEOs earned the following 2020 OHIP awards:


Name	Award Target (%)	Award Target(1) ($)	Company Financial Performance Award (75% Weighting) ($)	Individual Performance Award (25% Weighting) ($)	2020 OHIP Award ($)
Mr. Voskuil	85	572,606	640,273	213,425	853,698
Mr. Raup	70	348,115	389,254	174,058	563,312
Mr. Reiman	65	332,785	372,112	124,037	496,149
Mr. Atkins	70	412,117	460,819	103,030	563,849
Mr. Walling(2)	70	372,456	380,920	17,907	398,827
Ms. West(2)	80	562,416	575,197	27,040	602,237

____________________

(1)Target award is based upon actual salary received in 2020.

(2)Per the terms of Mr. Walling and Ms. West’s respective Confidential Separation Agreement and General Release, their 2020 OHIP awards were calculated as follows:

• From January 1, 2020 through February 29, 2020, their respective 2020 OHIP awards were based 75% on Company financial performance results and 25% on individual performance.

• From March 1, 2020 through December 31, 2020, their respective 2020 OHIP awards were based 100% on Company financial performance, calculated as the lower of the Company financial performance score or target.

The 2020 OHIP payments are included in Column (g) of the 2020 Summary Compensation Table for each NEO.

Long-Term Incentives

We provide long-term incentive opportunities to motivate, retain and reward our NEOs for their contributions to multi-year performance in achieving strategies and improving long-term share value. In February of each year, the Compensation Committee awards long-term incentive grants to our NEOs.

The Compensation Committee, and the independent directors in the case of our CEO, determines the value of long-term incentive awards made to each NEO by considering the NEO’s target total direct compensation against internal and external references. The target award percentages approved in 2020, expressed as a percentage of base salary, were:


Name			Target Long-Term Incentive Award (% of Salary)
Ms. Buck			500
Mr. Voskuil			230
Mr. Raup			150
Mr. Reiman			150
Mr. Atkins			170
Mr. Walling			165
Ms. West			230

The Compensation Committee values RSUs and PSUs using the closing stock price of the Company’s Common Stock on the NYSE on the date of grant. Target total direct compensation levels for each of the NEOs fall within an appropriate range relative to the median for comparable positions given each incumbent’s performance, responsibilities and tenure in the role.

Performance Stock Unit Targets and Results (65% of long-term incentive mix)

PSUs are granted to NEOs and other executives in a position to affect the Company’s long-term results. At the start of each three-year cycle, a contingent target number of PSUs is established for each executive. This target is expressed as a percentage of the executive’s base salary and is determined as part of a total compensation package based on the peer group and survey composite benchmarks. Dividends are not paid on PSU awards during the three-year performance cycle.

2018-2020 PSU Awards

The performance objectives for the 2018-2020 performance cycle awarded in 2018 were based upon the following metrics:

•Three-year relative TSR versus the 2018 peer group described below;

•Three-year CAGR in total Company net sales; and

•Three-year CAGR in adjusted earnings per share-diluted measured against an internal target.

The Compensation Committee selected these metrics to measure performance against internal targets aligned with our stockholders’ interests and investment returns offered by our peer companies. The 2018 peer group originally included 15 companies with median revenues of $7.8 billion. Dr Pepper Snapple Group, Inc. and Dean Foods Company were subsequently removed from the 2018 peer group as a result of a corporate transactions, which occurred in July 2018 and May 2020, respectively. Therefore, 13 companies remained in the 2018-2020 cycle for use in assessing our Company’s 2018-2020 TSR.

Companies included in the 2018 peer group for the 2018-2020 PSU cycle award were:


Brown-Forman Corporation	General Mills, Inc.	Mondelez International
Campbell Soup Company	Hormel Foods Corporation	The Clorox Company
Colgate-Palmolive Company	Kellogg Company	The J. M. Smucker Company
ConAgra Brands, Inc.	McCormick & Company, Inc.
Constellation Brands, Inc.	Molson Coors Brewing Company

Payment of any amounts earned is made in shares of Common Stock at the conclusion of the three-year performance cycle. The maximum award for any participant in a performance cycle is 250% of the contingent target award.

Targets and results for the 2018-2020 performance cycle were as follows:

Metric

Target

Actual

Performance

Target Award

Weighting

(%)

Final
Performance
Score
(%)

Total Shareholder Return

50th Percentile

73rd Percentile

34.00

65.28

Three-year CAGR in Net Sales

Growth(1)(2)

2.0% CAGR

2.4% CAGR

33.00

44.49

Three-year CAGR in Adjusted Earnings

per Share-Diluted(1)(3)

8.5% CAGR

10.6% CAGR

33.00

60.94

Total

100.00

170.71

____________________

(1)Results for our Pirate Brands and ONE businesses were excluded from the following metrics, as applicable, as these acquisitions were made in October 2018 and September 2019, respectively:

• Three-year CAGR in net sales growth; and

• Three-year CAGR in adjusted earnings per share-diluted.

At the conclusion of each three-year cycle, the Compensation Committee reviews the level of performance achieved and the percentage, if any, of the applicable portion of the target number of PSUs earned. In determining the final performance cycle score, adjustments may be made by the Compensation Committee to the Company’s performance score to take into account extraordinary or unusual items occurring during the period. No adjustments were made in determining the 170.71% performance score or the number of PSUs earned by our NEOs for the 2018-2020 performance cycle.

2019-2021 PSU Awards

In October 2018, the Committee approved changes to the performance metrics for the 2019-2021 performance cycle. The performance objectives for the 2019-2021 performance cycle are based upon the following metrics:

•Three-year relative TSR versus the 2019 Financial Peer Group described below;

•Three-year CAGR in adjusted earnings per share-diluted measured against an internal target; and

•Three-year cumulative free cash flow measured against an internal target.

These metrics are weighted 34%, 33% and 33%, respectively.

In October 2018, the Committee also approved the addition of a separate peer group for comparing relative pay for performance and for measuring relative TSR within our PSU cycles (the “2019 Financial Peer Group”). The Committee approved the following group of 15 companies with median revenues of $7.9 billion as the 2019 Financial Peer Group.

Companies included in the 2019 Financial Peer Group for the 2019-2021 PSU cycle awards are:


Campbell Soup Company	Kellogg Company	Post Holdings, Inc.
Colgate-Palmolive Company	Kimberly-Clark Corporation	The Clorox Company
ConAgra Brands, Inc.	The Kraft Heinz Company	The Hain Celestial Group, Inc.
Flowers Foods	McCormick & Company, Inc.	The J. M. Smucker Company
General Mills, Inc.	Mondelez International, Inc.	TreeHouse Foods, Inc.

2020-2022 PSU Awards

The performance metrics and weightings for the 2020-2022 performance cycle are the same as the 2019-2021 performance cycle. The three-year relative TSR metric for the 2020-2022 performance cycle is based on our 2020 Financial Peer Group, which was unchanged from the 2019 Financial Peer Group.

See Column (e) of the 2020 Summary Compensation Table, Columns (f) through (h) of the 2020 Grants of Plan-Based Awards Table, Columns (i) and (j) of the Outstanding Equity Awards at 2020 Fiscal-Year End Table and Columns (d) and (e) of the 2020 Option Exercises and Stock Vested Table for more information about PSUs awarded to the NEOs.

Restricted Stock Units (35% of long-term incentive mix)

The Compensation Committee sets guidelines for the value of the annual RSUs to be awarded based on competitive compensation data. These RSU awards represent approximately thirty-five percent of the NEO’s long-term incentive compensation target award. In 2020, the target number of RSUs awarded to each NEO was determined by multiplying the NEO’s base salary by thirty-five percent of his or her target long-term incentive award percentage divided by the closing price of the Company’s Common Stock on the NYSE on the grant date. The actual number of RSUs awarded may vary from the target level based on each NEO’s individual p