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SEC Company Response from SONOCO PRODUCTS CO (SON) (CIK 0000091767) (SON) — Sep 12, 2007

SONOCO PRODUCTS CO (SON) (CIK 0000091767)
Date: Sept. 12, 2007 · CIK: 0000091767 · Accession: 0000948520-07-000133

AI Filing Summary & Sentiment

File numbers found in text: 000-00516

Date
September 11, 2007
Author
President and Chief Executive Officer
Form
CORRESP
Company
SONOCO PRODUCTS CO (SON) (CIK 0000091767)

Letter

Sonoco Products Company One North Second Street Post Office Box 160 Hartsville, South Carolina 29551-0160 September 11, 2007 Mr. Jay E. Ingram, Esquire Attorney Advisor Division of Corporation Finance Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549

Re: Sonoco Products Company Definitive 14A Filed March 16, 2007 File No. 000-00516

Dear Mr. Ingram:

This letter is in response to your August 21, 2007 comment letter addressed to Harris E. DeLoach, Jr., President and Chief Executive Officer, Sonoco Products Company regarding the filing referenced above.

Management Compensation. page 27

Compensation Discussion and Analysis. page 27:

COMMENT:

1. To the extent you correlate incentive programs with the achievement of certain annual individual objectives, please discuss the specific items of individual performance used to determine bonus payments and how you structure your incentive bonuses around such individual objectives. Also disclose whether any discretion can be or has been exercised with respect to meeting such goals and objectives and, if so, to whom such discretion is applicable. Please see Items 402(b)(2)(vi)-(vii) of Regulation S-K and Instruction 4 to Item 402(b). To the extent the committee's consideration of individual performance resulted in a payout for the last fiscal year, please provide appropriate qualitative and quantitative disclosure.

<PAGE>

Mr. Jay E. Ingram, Esquire September 11, 2007 Page 2

RESPONSE:

The Annual Cash Incentive Awards discussed on pages 31 and 38-40 of the Proxy Statement do not have an individual objective component. Payouts, if any, under these awards are based solely on the extent to which the Company achieves base earnings per share, revenue growth and working capital improvement threshold, target or maximum levels. As stated in the third sentence at the top of page 31: "If actual performance is less than threshold, no incentive compensation is earned at the end of the performance period."

As further stated in the last sentence of the fourth paragraph on page 40: "No additional discretionary bonus awards were made to any of the NEOs in 2006." The term "bonus" was used in the context of annual bonus awards that would be reported in column (d) of the Summary Compensation Table.

The 2006 Long-Term Incentive Program awards discussed on pages 40-42 of the Proxy Statement do have a discretionary individual performance component with regard to the size of each executive officer's individual award opportunity. As stated in the last sentence of the carry-over paragraph at the top of page 41, "The actual number of SSARs granted to the NEOs was based on the Committee's assessment of each person's relative performance in meeting the expectations of his or her position." The elements of individual performance considered by the Committee are set forth in the first, second and third full paragraphs at the top of page 41. Actual compensation earned as a result of the grant is solely dependent on stock price performance above the grant price.

As stated in the third sentence under the caption "Performance Contingent Restricted Stock Units" on page 41, "The number of PCSUs granted to each individual was based on his target award as described on page 31, and adjusted upward or downward from target based on the Committee's judgment of the individual's performance." As noted in the last sentence of the first paragraph under this caption, "The size of these awards was based on the same achievements as cited above for the SSAR awards." Once the PCSU award is granted, the actual number of PCSUs that will vest, if any, after three years depends on the extent to which the Company achieves specified performance levels of cumulative base earnings per share and average return on net assets employed, as discussed at the bottom of page 41.

As stated in the second paragraph of page 42, "The [2006 Long-Term Incentive Program] does not permit the use of discretion if performance targets are not met."

<PAGE>

Mr. Jay E. Ingram, Esquire September 11, 2007 Page 3

COMMENT:

2. With respect to the disclosure relating to competitive benchmarks, please specify where actual payments fall within targeted parameters.

RESPONSE:

The Committee attempts to position the target compensation opportunity for incentive compensation for its executive officers between the 50th and 75th percentile of the surveyed peer group. The Committee then sets performance goals at a level deemed to be commensurately difficult to justify the payouts in the annual incentive and the long-term incentive program based on performance contingent restricted stock units at the threshold, target and maximum payout levels. The performance goals are set based on a variety of factors, including prior year results, the Board-approved business plan, comparisons of peer company performance levels, and stock analyst and investor expectations. In your letter you request detail on where the "actual payments fall within targeted parameters". Payouts for performance cycles ending with Fiscal Year 2006 were 179.6% of target and 123.3% of target in the annual incentive and performance contingent restricted stock unit plans, respectively. It is not possible to determine how actual payments made by the Company compare on a percentile basis to those made by peer companies due to differences in payout schedules and target grant levels among companies.

Review of Overall Compensation Components and Aggregate Awards. page 34

COMMENT:

3. Please provide appropriate disclosure addressing the committee's analysis of the information contained in the tally sheets and how the evaluation of this information resulted in specific awards or modifications to the manner in which you implement your compensation program. Please ensure that your disclosure explains and places in context how and why determinations with respect to one element may or may not have influenced the committee's decisions with respect to other allocated or contemplated awards. See Item 402(b)(1)(vi) of Regulation S-K.

RESPONSE:

The Committee uses tally sheets to assess total executive compensation, to determine where total executive compensation falls in relation to peer companies, and to assess how the Company's overall compensation programs operate. The Committee did not make any adjustments to the Company's

<PAGE>

Mr. Jay E. Ingram, Esquire September 11, 2007 Page 4

compensation programs as a result of review of tally sheets for 2006, and did not make any specific awards or modifications to awards for any individuals with respect to 2007 compensation. Furthermore, as noted at the bottom of page 34 and top of page 35 of the Proxy Statement, the Committee does not adjust one element of compensation to take account of performance, be it good or bad, with respect to another element of compensation.

Role of Executive Officers in Determining Executive Compensation. page 37

COMMENT:

4. Please provide a complete description of the committee's processes and procedures for the consideration and determination of executive compensation. See Item 407(e)(3) of Regulation S-K and Section V.D. of Commission Release 33-8732A. In doing so, discuss the extent to which Mr. DeLoach attends committee meetings or meets with the consultants used by the committee.

RESPONSE:

The Company believes it has discussed its processes and procedures for consideration and determination of executive compensation as required by Item 407(e)(3) of Regulation S-K. The scope of authority of the Committee is set forth in the description of the Committee's purpose on page 18. (407(e)(3)(i)(A)). The last sentence under the caption "Role of the Executive Compensation Committee" on page 27 of the Proxy Statement states that the Committee does not delegate its decision-making authority relating to executive compensation. (407(e)(3)(i)(B)). The role of executive officers in determining or recommending the amount or form of executive compensation is discussed on page 37 under the caption "Role of Executive Officers in Determining Executive Compensation." (407(e)(3)(ii)).

The Executive Compensation Committee's compensation consultant is identified and the consultant's role is discussed on page 36 under the caption "Relationship with Executive Compensation Consultant." As noted in the first sentence of the first paragraph of that section, the consultant is hired by the Committee, and as noted in the last sentence of that paragraph, the Committee has sole authority to dismiss the consultant. The consultant has no other economic relationships with the Company other than its role in providing advisory services in relation to executive compensation. The consultant is expected to assist the Committee and work on its behalf on matters related to the Committee's purposes and responsibilities as set forth in the Committee Charter.

Mr. DeLoach attends Committee meetings, but is not present when his own compensation is discussed. As noted on page 36 of the Proxy Statement under the caption "Relationship with Executive Compensation Consultant," Mr. DeLoach may have "incidental contact" with the Committee's compensation consultant. In practice, this means that Mr. DeLoach may from time to time

<PAGE>

Mr. Jay E. Ingram, Esquire September 11, 2007 Page 5

attend meetings at which the Committee's consultant is present or at which the consultant makes a presentation, and Mr. DeLoach may from time to time participate in group conference calls with the Committee's consultant. Mr. DeLoach does not, however, engage in one-on-one communications with the consultant and does not attempt to exercise any influence over the consultant's recommendations to the Committee.

In its 2008 proxy statement, the Company intends to provide all of the Item 407(e)(3) information together in one section.

The Company acknowledges that:

o the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

o staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

o the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Sincerely,
/s/Harris E. DeLoach, Jr.
Harris E. DeLoach, Jr.
President and Chief Executive Officer

Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

                             Sonoco Products Company
                             One North Second Street
                               Post Office Box 160
                      Hartsville, South Carolina 29551-0160

                               September 11, 2007

Mr. Jay E. Ingram, Esquire
Attorney Advisor
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549

Re:      Sonoco Products Company
         Definitive 14A Filed March 16, 2007
         File No.  000-00516

Dear Mr. Ingram:

         This  letter is in response  to your  August 21,  2007  comment  letter
addressed to Harris E.  DeLoach,  Jr.,  President and Chief  Executive  Officer,
Sonoco Products Company regarding the filing referenced above.

Management Compensation. page 27

Compensation Discussion and Analysis. page 27:

COMMENT:

1.   To the extent you  correlate  incentive  programs with the  achievement  of
     certain annual individual objectives,  please discuss the specific items of
     individual  performance  used  to  determine  bonus  payments  and  how you
     structure your incentive  bonuses around such individual  objectives.  Also
     disclose  whether any  discretion can be or has been exercised with respect
     to meeting such goals and objectives and, if so, to whom such discretion is
     applicable.  Please see Items  402(b)(2)(vi)-(vii)  of  Regulation  S-K and
     Instruction 4 to Item 402(b).  To the extent the committee's  consideration
     of  individual  performance  resulted in a payout for the last fiscal year,
     please provide appropriate qualitative and quantitative disclosure.

<PAGE>

Mr. Jay E. Ingram, Esquire
September 11, 2007
Page 2

RESPONSE:

     The Annual Cash  Incentive  Awards  discussed  on pages 31 and 38-40 of the
     Proxy Statement do not have an individual objective component.  Payouts, if
     any, under these awards are based solely on the extent to which the Company
     achieves  base  earnings  per share,  revenue  growth and  working  capital
     improvement  threshold,  target or maximum  levels.  As stated in the third
     sentence  at the  top of page  31:  "If  actual  performance  is less  than
     threshold,   no  incentive  compensation  is  earned  at  the  end  of  the
     performance period."

     As further stated in the last sentence of the fourth  paragraph on page 40:
     "No additional  discretionary  bonus awards were made to any of the NEOs in
     2006." The term "bonus" was used in the context of annual bonus awards that
     would be reported in column (d) of the Summary Compensation Table.

     The 2006 Long-Term Incentive Program awards discussed on pages 40-42 of the
     Proxy Statement do have a discretionary  individual  performance  component
     with  regard  to the  size of each  executive  officer's  individual  award
     opportunity.  As stated in the last sentence of the carry-over paragraph at
     the top of page 41,  "The  actual  number of SSARs  granted to the NEOs was
     based on the Committee's  assessment of each person's relative  performance
     in meeting  the  expectations  of his or her  position."  The  elements  of
     individual  performance  considered  by the  Committee are set forth in the
     first,  second  and third  full  paragraphs  at the top of page 41.  Actual
     compensation  earned as a result of the grant is solely  dependent on stock
     price performance above the grant price.

     As stated in the third sentence under the caption  "Performance  Contingent
     Restricted  Stock  Units" on page 41, "The number of PCSUs  granted to each
     individual  was based on his  target  award as  described  on page 31,  and
     adjusted upward or downward from target based on the  Committee's  judgment
     of the  individual's  performance."  As noted in the last  sentence  of the
     first paragraph under this caption,  "The size of these awards was based on
     the same  achievements  as cited above for the SSAR  awards." Once the PCSU
     award is granted,  the actual number of PCSUs that will vest, if any, after
     three years depends on the extent to which the Company  achieves  specified
     performance levels of cumulative base earnings per share and average return
     on net assets employed, as discussed at the bottom of page 41.

     As  stated  in the  second  paragraph  of page  42,  "The  [2006  Long-Term
     Incentive  Program] does not permit the use of  discretion  if  performance
     targets are not met."

<PAGE>

Mr. Jay E. Ingram, Esquire
September 11, 2007
Page 3

COMMENT:

2.   With respect to the disclosure relating to competitive  benchmarks,  please
     specify where actual payments fall within targeted parameters.

RESPONSE:

     The Committee attempts to position the target compensation  opportunity for
     incentive compensation for its executive officers between the 50th and 75th
     percentile of the surveyed peer group.  The Committee then sets performance
     goals at a level  deemed to be  commensurately  difficult  to  justify  the
     payouts in the annual incentive and the long-term  incentive  program based
     on performance  contingent restricted stock units at the threshold,  target
     and maximum payout levels. The performance goals are set based on a variety
     of factors, including prior year results, the Board-approved business plan,
     comparisons  of peer  company  performance  levels,  and stock  analyst and
     investor  expectations.  In your  letter  you  request  detail on where the
     "actual payments fall within targeted parameters".  Payouts for performance
     cycles  ending  with  Fiscal  Year 2006 were 179.6% of target and 123.3% of
     target in the annual incentive and performance  contingent restricted stock
     unit  plans,  respectively.  It is not  possible  to  determine  how actual
     payments made by the Company compare on a percentile basis to those made by
     peer  companies  due to  differences  in payout  schedules and target grant
     levels among companies.

Review of Overall Compensation Components and Aggregate Awards. page 34

COMMENT:

3.   Please provide appropriate  disclosure  addressing the committee's analysis
     of the information  contained in the tally sheets and how the evaluation of
     this information resulted in specific awards or modifications to the manner
     in which you implement your compensation  program.  Please ensure that your
     disclosure  explains and places in context how and why determinations  with
     respect  to one  element  may or may not have  influenced  the  committee's
     decisions with respect to other allocated or contemplated  awards. See Item
     402(b)(1)(vi) of Regulation S-K.

RESPONSE:

     The Committee uses tally sheets to assess total executive compensation,  to
     determine  where  total  executive  compensation  falls in relation to peer
     companies,  and to assess how the Company's overall  compensation  programs
     operate.  The  Committee  did not make  any  adjustments  to the  Company's

<PAGE>

Mr. Jay E. Ingram, Esquire
September 11, 2007
Page 4

     compensation  programs as a result of review of tally sheets for 2006,  and
     did not make  any  specific  awards  or  modifications  to  awards  for any
     individuals with respect to 2007 compensation. Furthermore, as noted at the
     bottom of page 34 and top of page 35 of the Proxy Statement,  the Committee
     does not adjust one element of compensation to take account of performance,
     be it good or bad, with respect to another element of compensation.

Role of Executive Officers in Determining Executive Compensation. page 37

COMMENT:

4.   Please  provide a complete  description  of the  committee's  processes and
     procedures   for  the   consideration   and   determination   of  executive
     compensation.  See Item  407(e)(3)  of  Regulation  S-K and Section V.D. of
     Commission  Release 33-8732A.  In doing so, discuss the extent to which Mr.
     DeLoach attends  committee  meetings or meets with the consultants  used by
     the committee.

RESPONSE:

     The Company  believes it has discussed its  processes  and  procedures  for
     consideration  and  determination of executive  compensation as required by
     Item  407(e)(3) of Regulation  S-K. The scope of authority of the Committee
     is set forth in the  description  of the  Committee's  purpose  on page 18.
     (407(e)(3)(i)(A)).  The  last  sentence  under  the  caption  "Role  of the
     Executive Compensation  Committee" on page 27 of the Proxy Statement states
     that the Committee does not delegate its decision-making authority relating
     to  executive  compensation.   (407(e)(3)(i)(B)).  The  role  of  executive
     officers in  determining  or  recommending  the amount or form of executive
     compensation  is discussed on page 37 under the caption  "Role of Executive
     Officers in Determining Executive Compensation." (407(e)(3)(ii)).

     The  Executive   Compensation   Committee's   compensation   consultant  is
     identified  and the  consultant's  role is  discussed  on page 36 under the
     caption "Relationship with Executive Compensation  Consultant." As noted in
     the first sentence of the first  paragraph of that section,  the consultant
     is hired by the  Committee,  and as  noted  in the  last  sentence  of that
     paragraph, the Committee has sole authority to dismiss the consultant.  The
     consultant has no other economic  relationships with the Company other than
     its  role  in  providing   advisory   services  in  relation  to  executive
     compensation.  The  consultant is expected to assist the Committee and work
     on  its  behalf  on  matters  related  to  the  Committee's   purposes  and
     responsibilities as set forth in the Committee Charter.

     Mr. DeLoach  attends  Committee  meetings,  but is not present when his own
     compensation is discussed. As noted on page 36 of the Proxy Statement under
     the caption  "Relationship  with Executive  Compensation  Consultant,"  Mr.
     DeLoach may have  "incidental  contact" with the  Committee's  compensation
     consultant.  In practice, this means that Mr. DeLoach may from time to time

<PAGE>

Mr. Jay E. Ingram, Esquire
September 11, 2007
Page 5

          attend meetings at which the  Committee's  consultant is present or at
          which the consultant  makes a  presentation,  and Mr. DeLoach may from
          time  to  time   participate  in  group   conference  calls  with  the
          Committee's  consultant.  Mr.  DeLoach  does not,  however,  engage in
          one-on-one  communications with the consultant and does not attempt to
          exercise any influence over the  consultant's  recommendations  to the
          Committee.

          In its 2008 proxy statement, the Company intends to provide all of the
          Item 407(e)(3) information together in one section.

     The Company acknowledges that:

     o    the  Company is  responsible  for the  adequacy  and  accuracy  of the
          disclosure in the filing;

     o    staff  comments or changes to disclosure in response to staff comments
          do not foreclose the Commission from taking any action with respect to
          the filing; and

     o    the  Company  may  not  assert  staff  comments  as a  defense  in any
          proceeding initiated by the Commission or any person under the federal
          securities laws of the United States.

                                  Sincerely,

                                  /s/Harris E. DeLoach, Jr.
                                  Harris E. DeLoach, Jr.
                                  President and Chief Executive Officer

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