DEF 14A of Deckers Outdoor Corp
Filed Jul 24, 2023 · FY20230000910521-23-000025
Q: What happens if a director nominee fails to receive a majority vote in an uncontested election at the Annual Meeting?
Q: What happens if a director nominee fails to receive a majority vote in an uncontested election at the Annual Meeting? A: Each incumbent director standing for reelection at the Annual Meeting has tendered an irrevocable letter of resignation, effective upon such incumbent director not receiving a majority vote at the Annual Meeting and acceptance of such resignation by our Board. Our Board must accept or reject such resignation within 90 days following certification of the stockholder vote in accordance with the procedures established by our Amended and Restated Bylaws, or our Bylaws. If a director’s resignation offer is not accepted by our Board, that director will continue to serve until our annual meeting of stockholders to be held in 2024 or his or her successor is duly elected and qualified, or until such director’s earlier death, resignation, or removal. Any director nominee who is not an incumbent director and who fails to receive a majority vote in an uncontested election will not be elected as a director, and a vacancy will be left on our Board. Our Board, in its sole discretion, may either fill a vacancy resulting from a director nominee not receiving a majority vote pursuant to our Bylaws or decrease the size of our Board to eliminate the vacancy. All director nominees are incumbent directors standing for reelection at the Annual Meeting.
ª Committee Chair
ª Committee Chair (1) Subject to the reelection of each director nominee at the Annual Meeting. (2) AR: Audit & Risk Management Committee, TC: Talent & Compensation Committee, CG: Corporate Responsibility, Sustainability & Governance Committee
ª Committee Chair
| MICHAEL F. DEVINE, III | | | | Age: 64 Director Since: 2011 | | | | Chairman of our Board | Public Company Directorships: FIVE Below, Inc. (NYSE: FIVE) | |
ª Committee Chair
Mr. Devine previously served as a director and member of the audit committee of Express, Inc. (NYSE: EXPR) and currently serves as director and member of the audit committee and chair of the compensation committee at FIVE Below, Inc. (Nasdaq: FIVE). Mr. Devine retired as executive vice president and chief financial officer of Coach, Inc. in 2011. He served as a member of the board of Sur La Table, Inc. and was previously a member of the board of directors of The Talbots Inc. From 2004 to 2007, Mr. Devine served as a member of the board of directors and chair of the audit committee of Educate, Inc., a leading K-12 education service company with solutions such as Sylvan Learning Center. Mr. Devine also previously served as a director and member of the audit committee of NutriSystem, Inc. (Nasdaq: NTRI). •High Level of Financial Literacy - In addition to experience as the current and former member and chair of four audit committees and experience at Coach, Inc., served as chief financial officer and vice president-finance of Mothers Work, Inc., a maternity apparel retailer that was previously listed on Nasdaq, from February 2000 to November 2001. From 1997 to 2000, was chief financial officer of Strategic Distribution, Inc. (Nasdaq: STRD), a Nasdaq-listed industrial store operator. From 1995 to 1997, was chief financial officer at Industrial System Associates, Inc., and for the prior six years was the director of finance and distribution for McMaster-Carr Supply Company. Holds a B.S. in Finance and Marketing from Boston College and an M.B.A. in Finance from the Wharton School of the University of Pennsylvania. •Public Company Executive - Experience at Coach, Inc. involved in managing a public company during a period of high growth. Serves as a corporate director and chair of the audit committees of Express, Inc. and FIVE Below, Inc. •Compliance and Risk Oversight - 17 years of experience as a corporate director with risk oversight responsibilities. •Premium Branding - Coach, Inc. is a leading marketer of modern classic American accessories. •International - Involved in a global brand with worldwide operations while at Coach, Inc. •Industry - In addition to experience at Coach, Inc., serves as a director of Express, Inc., a nationally recognized specialty apparel and accessory retailer offering women’s and men’s merchandise. •Supply Chain Management and Retail - Involved in supply chain and wholesale and retail distribution channels while at Coach, Inc.
ª Committee Chair
| DAVID A. BURWICK | | | | Age: 61 Director Since: 2021 | | | | Board Committees: Talent & Compensation | Public Company Directorships: The Boston Beer Company, Inc. (NYSE: SAM) | |
ª Committee Chair
Mr. Burwick has served on the board of directors of The Boston Beer Company, Inc. (NYSE: SAM) since May 2005 and was appointed as its president and chief executive officer in April 2018. Prior to April 2018, Mr. Burwick served as president and chief executive officer of Peet's Coffee & Tea, Inc., since December 2012. From April 2010 to December 2012, Mr. Burwick served as president, North America of WW International, Inc., formerly Weight Watchers International, Inc. Prior to that, Mr. Burwick held numerous positions with PepsiCo, Inc., including chief marketing officer, PepsiCo Americas Beverages from August 2008 to August 2009; executive vice president, Marketing, Sales and R&D, PepsiCo International from April 2008 to July 2008; President, Pepsi-QTG Canada from January 2006 to March 2008; chief marketing officer, Pepsi-Cola North America from June 2002 to December 2005; and various marketing roles from 1989 to 2002. Mr. Burwick has extensive experience leading consumer products organizations. During Mr. Burwick's tenure as a director of The Boston Beer Company, Inc., he has served as chair and as a member of its compensation committee, and as chair and as a member of the nominating/governance committee.
Selected Qualifications and Skills
Selected Qualifications and Skills •Premium Branding - Experience as an executive at Peet's Coffee & Tea, Inc., PepsiCo. Inc. and The Boston Beer Company, Inc. •Public Company Executive - Extensive experience with several leading public and private companies, both as an executive and as a director. •Sales and Marketing - Held key marketing and sales positions with PepsiCo. Inc., including chief marketing officer. •Human Resources - Held executive positions with leading companies and is a member of the compensation committee and nominating/governance committee of The Boston Beer Company, Inc. •Retail - Previously served as president and chief executive officer at Peet's Coffee & Tea, Inc., WW International, Inc. and PepsiCo, Inc.
Selected Qualifications and Skills
| NELSON C. CHAN | | | | Age: 62 Director Since: 2014 | | | | Board Committees: Audit & Risk Management Corporate Responsibility, Sustainability & Governance | Public Company Directorships: Synaptics, Inc. (Nasdaq: SYNA) Twist Bioscience Corporation (Nasdaq: TWST) | |
Selected Qualifications and Skills
Mr. Chan is a private investor and entrepreneur. Mr. Chan is a director and member of the nominating and corporate governance and audit committee of Twist Bioscience Corporation (Nasdaq: TWST), as well as chairman of the board and member of the audit committee and nominations and corporate governance committee of Synaptics, Inc. (Nasdaq: SYNA). He was chairman of the board, chair of the compensation committee, member of the audit committee and member of the nominating and corporate governance committee of Adesto Technologies Corporation (Nasdaq: IOTS). From 2016 to 2019, Mr. Chan served as a director and member of the compensation and nominating and governance committees of Socket Mobile, Inc. (Nasdaq: SCKT). From 2006 to 2008, he served as chief executive officer of Magellan Corporation, and from 1992 to 2006, he served in various management positions with SanDisk Corporation. Mr. Chan is also a director of several privately held companies. •Entrepreneurial - Expertise in building technology companies. •High Level of Financial Literacy - Has held numerous senior management positions with leading companies, including chief executive officer at Magellan Corporation. •Public Company Executive - Extensive experience with several leading public and private companies, both as an executive and as a director. •Sales and Marketing - Held key sales, marketing and engineering positions at SanDisk Corporation, Chips and Technologies, Signetics and Delco Electronics. •International - Served as the executive vice president and general manager of consumer business at SanDisk Corporation, a global multi-billion dollar company. •Compliance and Risk Oversight - Currently serves as a member of our Audit & Risk Management Committee and has over 14 years of experience as a corporate director with risk oversight responsibilities. •Technology Infrastructure and Cybersecurity - Extensive experience in technology-based companies including sales, marketing and engineering.
Selected Qualifications and Skills
| CYNTHIA (CINDY) L. DAVIS | | | | Age: 61 Director Since: 2018 | | | | Board Committees: Talent & Compensation (Chair) Corporate Responsibility, Sustainability & Governance | Public Company Directorships: Kennametal Inc. (NYSE: KMT) Brinker International, Inc. (NYSE: EAT) | |
Selected Qualifications and Skills
Ms. Davis currently serves as a member of the board of directors and is the chair of the compensation and human capital committee and member of the nominating and governance committee of Kennametal Inc. (NYSE: KMT), a global supplier of tooling, engineering components. In January 2019, she joined the board of directors and currently chairs the governance committee and is a member of the compensation committee of Brinker International, Inc. (NYSE: EAT). Prior to 2019, Ms. Davis served as a member of the board of directors, as chair of the compensation committee and on the governance committee of Buffalo Wild Wings, Inc. (Nasdaq: BWLD), a casual dining restaurant and sports bar chain, from 2015 to 2018. Ms. Davis served as vice president of NIKE, Inc. (NYSE: NKE) and president of Nike Golf at NIKE, Inc. from 2008 to 2014, and as U.S. general manager at Nike Golf from 2005 to 2008. Prior to NIKE, Inc., Ms. Davis served as senior vice president of golf sponsorships, sports marketing and new media at Golf Channel, a subsidiary of Comcast Corporation (Nasdaq: CMCSA), from 2001 to 2004. She is a Trustee for the Board of Trustees at Furman University. •Premium Branding - Experience as vice president of NIKE, Inc. and president of Nike Golf at NIKE, Inc., a company engaged in the design, development, manufacturing, and worldwide marketing and sales of footwear, apparel, equipment, accessories, and services. •Sales and Marketing; Retail - In addition to leading the division’s sales, marketing, and strategy while serving as senior vice president of golf sponsorships, sports marketing and new media at Golf Channel, led the $800 million global golf business for NIKE, Inc. •High Level of Financial Literacy - Served on the audit committee of Kennametal Inc. Holds an M.B.A. in Marketing and Finance from the University of Maryland College Park. Oversaw the profit and loss of a separate operating unit within NIKE, Inc. •International - Involved in global brands with worldwide operations while at NIKE, Inc. and Kennametal Inc. •Public Company Executive - Held various executive management positions at NIKE, Inc. and Golf Channel, currently serves as a director of Kennametal Inc. and Brinker International, Inc., and previously served as a director and chair of the compensation committee of Buffalo Wild Wings, Inc. •Industry - Extensive experience in the footwear, apparel and equipment industries through various positions at NIKE, Inc. •Compliance and Risk Oversight - In addition to leadership roles at NIKE, Inc., served as a corporate director on the audit committee and serves on the compensation and nominating and corporate governance committees of Kennametal, Inc., and serves on the board of directors, as well as the compensation and corporate governance committees, of Brinker International, Inc. Previously served as chair of the compensation committee and on the governance committee of Buffalo Wild Wings. •Technology Infrastructure and Cybersecurity - Serves as a director and chair of the compensation and human capital committee and member of the nominating and governance committee of Kennametal Inc., a technology-based company.
Selected Qualifications and Skills
| JUAN R. FIGUEREO | | | | Age: 67 Director Since: 2020 | | | | Board Committees: Audit & Risk Management (Chair) | Public Company Directorships: Western Alliance Bancorporation (NYSE: WAL) Diversey, Inc. (Nasdaq: DSEY) | |
Selected Qualifications and Skills
Mr. Figuereo currently serves as a director and member of the finance and investment committee and chair of the audit committee of Western Alliance Bancorporation (NYSE: WAL). In April 2021, he joined the board of directors and currently serves as chair of the audit committee and member of the nominating and corporate governance committee of Diversey, Inc. (Nasdaq: DSEY). Mr. Figuereo served as the executive vice president and chief financial officer of Revlon (NYSE: REV), a manufacturer and marketer of beauty and personal care products, from 2016 to 2017. From 2012 to 2015, he served as executive vice president and chief financial officer of NII Holdings, Inc. (NASDAQ: NIHD), a wireless communication services provider under the Nextel brand. NII Holdings, Inc. filed for bankruptcy protection in New York, New York on September 15, 2014. From 2009 to 2012, Mr. Figuereo served as executive vice president and chief financial officer of Newell Brands (NYSE: NWL), a global marketer of consumer and commercial products, and from 2007 to 2009 he served as executive vice president and chief financial officer of Cott Corporation (NYSE: PRMW). Mr. Figuereo has also served in senior management positions at Walmart, Inc. (NYSE: WMT) and PepsiCo, Inc. (Nasdaq: PEP). Mr. Figuereo served as a director and chair of the audit committee at PVH Corp. (NYSE: PVH), a leading apparel company with iconic brands such as Calvin Klein and Tommy Hilfiger in its portfolio. Mr. Figuereo is a venture partner with Ocean Azul Partners, LLC, an early stage investments fund based in South Florida. He is a member of the National Association of Corporate Directors and of the Florida Institute of CPAs. •Public Company Executive - Previously served as chief financial officer of several public companies with global footprints, including Revlon and Newell Brands, and held executive leadership roles at Walmart, Inc. and PepsiCo, Inc. •High Level of Financial Literacy - Served as chief financial officer of several public companies and as chair of the audit committee of PVH Corp. Serves as the chair of the audit committee of Western Alliance Bancorporation and Diversey Inc. In addition, he serves as a member of the Audit & Risk Management Committee of our Company. Holds a B.B.A. from Florida International University, and previously worked for eight years as a certified public accountant. •International - Significant executive leadership experience supporting global brands with worldwide operations. •Supply Chain Management - Extensive experience in worldwide supply chain operations while in management roles for global companies. •Sales and Marketing; Retail - Served as executive vice president of several global marketers, including Revlon and Newell Brands, and held senior management positions at Walmart, Inc. and PepsiCo, Inc. •Mergers and Acquisitions - Previously served as the vice president in charge of mergers and acquisitions at Walmart, Inc.
Selected Qualifications and Skills
| MAHA S. IBRAHIM | | | | Age: 52 Director Since: 2021 | | | | Board Committees: Audit & Risk Management | Public Company Directorships: None | |
Selected Qualifications and Skills
Ms. Ibrahim is currently a general partner of Canaan Partners, an early stage venture capital firm, where she has worked since March 2000. Prior to joining Canaan Partners, from 1998 to 2000 she served as vice president of e-business at Qwest Communications, where she architected the company’s e-business strategy and spearheaded the redesign of Qwest.com, and previously served as Qwest Communication’s vice president of business development. From 2012 through 2020, Ms. Ibrahim served as a member of the board of directors of The RealReal, Inc. (Nasdaq: REAL), an online brick-and-mortar marketplace for authenticated luxury consignment, providing leadership to the company through its 2019 initial public offering. Ms. Ibrahim currently serves on the boards of directors of a number of private innovative enterprise and consumer companies. Further, she has served as a trustee for the Carnegie Endowment for International Peace, a foreign policy think tank, since 2017.
Selected Qualifications and Skills
Selected Qualifications and Skills •Industry - Extensive experience in the apparel industry through her experience on the board of The RealReal, Inc. •Premium Branding - Premium branding experience in the luxury consignment business during her time as a director of RealReal, Inc. •Consumer Technology/Big Data - Served as vice president of e-business at Qwest Communications. •Sales and Marketing; Retail - Served as vice president of business development at Qwest Communications. •Technology Infrastructure and Cybersecurity - Extensive experience in wireless and telecommunications industries. •Mergers and Acquisitions – Experience with mergers and acquisitions while serving as general partner of Canaan Partners. •Corporate Responsibility - Served on the board of The RealReal, Inc. a sustainable luxury company that promotes the re-circulation of products across the multi-billion dollar fashion industry and experience serving on the board of a private luxury brand company that has implemented a sustainability program and related initiatives.
Selected Qualifications and Skills
| VICTOR LUIS | | | | Age: 56 Director Since: 2020 | | | | Board Committees: Talent & Compensation | Public Company Directorships: FarFetch (NYSE: FTCH) | |
Selected Qualifications and Skills
Mr. Luis joined the board of directors of FarFetch Limited (NYSE: FTCH) in August 2020 and currently serves on the audit committee and as chair of the nominating and corporate governance committee. He served as the chief executive officer and on the board of directors of Tapestry, Inc. (formerly known as Coach, Inc.) (NYSE: TPR) from 2014 to 2019, where he led the company’s transformation into Tapestry Inc., a New York-based house of modern luxury brands including Coach, Kate Spade and Stuart Weitzman. Mr. Luis joined Coach, Inc. in 2006 as president and chief executive officer of Coach Japan. He rapidly assumed additional leadership responsibilities across Asia and Europe, becoming chief commercial officer of Coach, Inc. in 2013 and chief executive officer in 2014. Prior to joining Coach, Inc., from 2002 to 2006, Mr. Luis was president and chief executive officer of Baccarat, Inc., where he ran the North American operation of the French luxury brand. Mr. Luis joined the Moët-Hennessy Louis Vuitton Group in 1995, ultimately advancing to president and chief executive officer of its subsidiary, Givenchy, Japan Incorporated, before leaving in 2002. •International - Significant experience in managing multi-national teams while at Coach, Inc. and Moët-Hennessy Louis Vuitton Group. •Retail - Previously served as chief executive officer of several global luxury retailers. •Premium Branding - Premium global branding experience spanning over two decades as chief executive officer of Tapestry, Inc., overseeing its modern luxury brands, and as chief executive officer of Baccarat, Inc. and Givenchy, Japan Incorporated. •Industry - Experience in footwear, apparel and accessories while on the board of Tapestry, Inc. with the brands Coach, Kate Spade and Stuart Weitzman. •Public Company Executive - Executive management experience, including service as chief executive officer of publicly traded companies.
Selected Qualifications and Skills
| DAVE POWERS | | | | Age: 57 Director Since: 2016 | | | | Executive Positions: Chief Executive Officer and President | Public Company Directorships: Solo Brands, Inc. (NYSE: DTC) | |
Selected Qualifications and Skills
Mr. Powers became our Chief Executive Officer in June 2016 and joined our Board at that time. Mr. Powers joined our Company as President of Direct-to-Consumer in August 2012. He was appointed President of Omni-Channel in January 2014 and was appointed President in March 2015. Prior to joining our Company, Mr. Powers held several executive leadership roles at Converse Inc. (a subsidiary of NIKE, Inc.), Timberland LLC and Gap Inc. (NYSE: GPS). In May 2022, he joined the board of directors and currently serves on the audit committee of Solo Brands, Inc. (NYSE: DTC).
Selected Qualifications and Skills
Selected Qualifications and Skills •Industry - Extensive experience in the footwear and apparel industry through a variety of positions at three different footwear companies and a global apparel retailer. •Supply Chain Management; Retail - As part of the NIKE, Inc. retail leadership team, was responsible for Converse Inc.'s global owned and distributor Direct-to-Consumer operations. During tenure at Timberland LLC and Gap Inc., held leadership roles with a variety of retail responsibilities from merchandising to store design. •Sales and Marketing - Graduated cum laude from Northeastern University with a B.S. in Marketing. Throughout his career, has been responsible for the development of marketing strategy, with a focus on consumer engagement and digital marketing. While President of Brands of our Company, led the Omni-Channel organization, elevating and advancing the Omni-Channel platform. •International - While serving in leadership roles at Timberland LLC, led worldwide retail merchandising, marketing, visual and store design, and oversaw European retail operations. •Public Company Executive - Serves as our Chief Executive Officer and President with global responsibilities and oversight. Other leadership roles have been with public companies.
Selected Qualifications and Skills
| LAURI M. SHANAHAN | | | | Age: 60 Director Since: 2011 | | | | Board Committees: Audit & Risk Management Corporate Responsibility, Sustainability & Governance | Public Company Directorships: Treasury Wine Estates Limited (ASX: TWE) CAVA Group, Inc. (NYSE: CAVA) | |
Selected Qualifications and Skills
Ms. Shanahan has over 25 years of senior-level experience in retail, consumer products and hospitality, ranging from global, multi-channel, multi-brand enterprises to small and mid-cap growth companies. In June 2023, she joined the board of directors and is the chair of the people, culture and compensation committee of CAVA Group Inc. (NYSE: CAVA). She serves on the board of directors, and chair of the human resources committee of Treasury Wine Estates Limited (ASX: TWE), a vertically integrated global wine business with over 70 brands. She joined Gap Inc. in 1992 and served in numerous leadership roles, including chief administrative officer and chief legal officer, during her 16-year career with the company. Since then, she has served as a principal of Maroon Peak Advisors, a consumer products and retail consulting firm.
Selected Qualifications and Skills
Selected Qualifications and Skills •Public Company Executive - Joined Gap Inc. in 1992 and served for 16 years in numerous leadership roles including chief administrative officer, chief legal officer and corporate secretary and chairman of the foundation board. Gap Inc. is a leading global specialty retailer offering clothing, footwear, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, and Athleta brands. •International - Directly involved in global brand development, supply chain and worldwide operations while at Gap Inc. and as a director and consultant. •Supply Chain Management and Retail - Involved in retail, franchise, online licensing and other distribution channels, as well as sourcing and supply chain, while at Gap Inc. and as a consultant. •Sales and Marketing - Acquired sales and marketing experience throughout her career at Gap Inc. and as director and consultant. •Industry - Experience in footwear, apparel and accessories at Gap Inc., Charlotte Russe Holdings, Inc. and through consulting firm. •Premium Branding - Premium and luxury branding experience at Gap Inc., through serving on the board of Treasury Wine Estates Limited and through retail consulting firm. •Compliance and Risk Oversight - In addition to other leadership roles at Gap Inc., served as chief compliance officer and chief legal officer, overseeing the global corporate risk committee, as well as the global governance and compliance organization. •Corporate Responsibility - While at Gap Inc., led development and oversight of global strategy, organization and execution of comprehensive social and environmental programs involving product development, supply chain, stakeholder engagement and employee and consumer-facing initiatives. Was president of Gap Inc. Foundation and also led government affairs and public policy.
Selected Qualifications and Skills
| BONITA C. STEWART | | | | Age: 66 Director Since: 2014 | | | | Board Committees: Corporate Responsibility, Sustainability & Governance (Chair) Talent & Compensation | Public Company Directorships: PagerDuty, Inc. (NYSE: PD) | |
Selected Qualifications and Skills
Ms. Stewart is currently a Board Partner at Gradient Ventures, Google's early-stage venture fund focused on artificial intelligence. She has been driving digital transformation at scale across multiple industries throughout her career. Prior to Gradient Ventures, Ms. Stewart served in various executive roles at Google, Inc. (Nasdaq: GOOG, GOOGL), a subsidiary of Alphabet Inc., including as Vice President, Global Partnerships where she led partner management for the largest U.S. publishers across search, news, commerce, media and entertainment, telecommunications and mobile applications. In January 2021 she joined the board of directors and serves as a member of the audit committee and nominating and corporate governance committees for PagerDuty (NYSE: PD), a digital operations management company. Ms. Stewart previously served on the board of directors and as a member of the compensation committee and nominating and corporate governance committee for Volta Industries, Inc. (NYSE: VLTA). Ms. Stewart served as a corporate director for Pluralsight, Inc. (Nasdaq: PS), from 2018 to 2021. From 2002 to 2006 she worked for DaimlerChrysler AG (now Daimler AG) as director of Chrysler Brand Advertising and the director of Chrysler Group’s first Interactive Communications team. Ms. Stewart began her career in 1979 at IBM Corporation (NYSE: IBM) where she served in various financial and marketing management positions. She is the co-author of A Blessing: Women of Color Teaming Up to Lead, Empower and Thrive and the 2019-2020 Women of Color in Business Cross-Generational Survey. •Industry - Over 30 years of experience in brand management, digital strategy, and execution. •High Level of Financial Literacy - Lead strategy, business development and revenue growth plans for Google Inc.'s largest publisher partnerships. Holds an M.B.A. from Harvard Business School. •Consumer Technology/Big Data - Extensive experience in digital transformation, and data driven digital strategies across multiple industries. •Entrepreneurial - Served as president, chief operating officer, and co-founder of Nia Enterprises, LLC, a web-based company, and founder and chief executive officer of One Moment in Time, a women's formal-wear rental company. •Sales and Marketing - Acquired sales, marketing, product distribution and online advertising experience. •International - Led publisher partnerships for Latin America and Canada and has worked for Daimler AG and IBM Corporation, which are multi-billion dollar global companies. •Public Company Executive - Strategic planning and large-scale operations experience with Google Inc. and IBM Corporation. •Technology Infrastructure and Cybersecurity - Extensive experience in technology-based companies and fluency in digital transformation including digital strategy, mobile, video, programmatic, online advertising, cloud solutions, analytics and data privacy. •Corporate Responsibility - Experience with employee resource group executive sponsorship, global hiring and retention processes and racial equity compliance oversight.
Compensation Program Highlights
| COMPENSATION HIGHLIGHTS | PHILOSOPHY AND CONSIDERATIONS | | Pay-for-performance alignment | • We emphasized strong pay-for-performance alignment by providing a significant portion of the overall compensation opportunity for our NEOs in the form of performance-based compensation that is directly tied to the achievement of specific Company financial and operational performance objectives. • Our performance-based compensation is designed to align the interests of our NEOs with those of our stockholders and encourage the achievement of strategic objectives that the Committee believes are critical to our short and long-term success. • For fiscal year 2023, only 11% of the total compensation opportunity for our Chief Executive Officer and President was fixed, while 89% of his total compensation opportunity was directly tied to the achievement of specific performance conditions or otherwise at risk. | | Alignment of performance metrics with strategic objectives | • Selecting the appropriate performance metrics for our performance-based awards is critical to achieving our business and strategic objectives, motivating our executives and advancing our pay-for-performance philosophy. • In light of our strategic focus on increased revenue, enhanced profitability and the creation of long-term stockholder value, the Committee selected (i) consolidated operating income and revenue for all NEOs (and business unit operating income and revenue targets for certain executives with business unit oversight responsibilities) as the primary performance metrics for our 2023 Annual Cash Incentive Awards, and (ii) both “pre-tax income” and consolidated revenue for each of fiscal years 2023, 2024 and 2025 as the primary performance metrics for our 2023 LTIP PSUs. • The decision by the Committee to use the consolidated revenue metric for both our 2023 Annual Cash Incentive Awards and our 2023 LTIP PSUs reflects our continued focus on top-line growth. • To further reinforce the importance of achieving ESG initiatives, the Committee incorporated an ESG modifier into the 2023 Annual Cash Incentive Awards. The payment of the cash incentive awards is subject to adjustment based upon the application of the ESG modifier, thereby further correlating the payments with the achievement of our strategic objectives. | | Limited overlap in performance conditions and measurement periods | • Our performance metrics involve multiple performance conditions over multiple time periods to ensure our compensation program encourages healthy and sustained growth across our business, while eliminating excessive overlap between both performance conditions and measurement periods. • This approach mitigates against risk associated with our compensation program as it de-emphasizes the impact of any one performance metric or performance period. | | Reference to a "median" pay philosophy | • We have actively and consistently reformulated our executive compensation program to benchmark the target total compensation opportunity for our NEOs at the median compared to our peer group. • In adopting this philosophy, the Committee carefully considered a number of factors, including specific feedback received from our stockholders during our stockholder engagement efforts in prior years. | | Use of PSUs for LTIP awards | • LTIP awards are designed to align the interests of our executives with those of our stockholders by utilizing performance-based vesting conditions. • Vesting is based on the achievement of profitability and revenue metrics, in each year during a three-year period, that align closely with our strategic objectives. • 100% of the LTIP awards granted during fiscal year 2023 were subject to long-term vesting in order to promote retention of our executives. • The vesting of each LTIP award is also subject to adjustment based upon the application of a total stockholder return, or TSR, modifier thereby correlating the vesting of the award to both total and relative stockholder returns. |
Compensation Program Highlights
| Appropriate mix of equity awards with focus on performance-based vesting | • Approximately 60% of the value of the equity awards granted during fiscal year 2023 vest based on the achievement of Company performance conditions to ensure pay-for-performance alignment, while the remainder of the awards vest based on the achievement of long-term, time-based vesting conditions. • The Committee believes this mix strikes the appropriate balance between compensation incentives and risks. | | Continued focus on executive retention | • While we seek to develop our executive compensation program so it closely aligns with our pay-for-performance philosophy and rewards achievement of performance goals, this objective must complement other critical objectives, including the retention of key executives. • For fiscal year 2023, approximately 40% of the value of the equity awards granted vest based on the achievement of time-based vesting conditions, which promote executive retention because they vest over a long-term service period. • Consistent with its historical practice, the Committee expects a majority of future equity awards to continue to have performance-based vesting conditions. | | Consideration of peer group data and advice of our independent compensation consultant | • We use peer group compensation data as an initial starting point in making compensation decisions for our executives, including with respect to both the target level of compensation and the overall structure of our executive compensation program. • Our independent compensation consultant provides us with information on competitive pay practices and trends in our industry and makes recommendations regarding the design and structure of our compensation program, as well as the formulation of our peer group. • The information and guidance provided by our independent compensation consultant is consistent with our median pay philosophy. |
Pay-for-Performance
Pay-for-Performance Our pay-for-performance philosophy demands that we offer performance-based compensation that is directly linked to factors that the Committee believes will lead to the creation of stockholder value. Specifically, we pay for performance by tying a significant portion of our executive compensation opportunity to the achievement of pre-established performance metrics that are reflective of our business and strategic objectives, as well as to increases in our stock price. The Committee believes choosing the right performance metrics is critical to our ability to properly motivate our executives and advance our pay-for-performance philosophy. In particular, this requires that the performance metrics be reconsidered each year as our business and strategic objectives evolve to ensure they provide the appropriate barometer of our growth and success, and motivate the achievement of our objectives in line with how we currently view the business. As a result of our strong commitment to our pay-for-performance philosophy, a substantial portion of our executives’ compensation opportunity is performance-based and not guaranteed. While we offer certain standard compensation elements that provide fixed payments or benefits, our executive compensation mix is heavily weighted toward compensation that is performance-based or otherwise at risk, which we refer to as "performance-based." The Committee seeks to establish appropriate performance targets for the performance-based pay so as to ensure they align with our business and strategic objectives, are appropriately challenging to achieve, and mitigate our overall compensation-related risk. As an example, for fiscal year 2023, fixed pay for our Chief Executive Officer represented only 11% of his targeted compensation opportunity for the year, while performance-based pay represented 89% of his targeted compensation. The fixed pay reflects the value of base salary and limited employee benefits. The performance-based pay reflects a combination of the target value of the 2023 Annual Cash Incentive Awards and the value of the target number of 2023 LTIP PSUs, each of which are earned or vest only upon the achievement of pre-established Company performance metrics. In addition, the performance-based pay reflects the value of the 2023 Time-Based RSUs, which the Committee believes is appropriate to include because our Chief Executive Officer is at risk of not receiving the full value of these awards since vesting is conditioned upon continued employment over an extended period of time, and their value is subject to fluctuation based on our stock price. The graphic below illustrates the amount of target performance-based pay vs. fixed pay for our Chief Executive Officer for fiscal year 2023 and the breakdown of the various components of the compensation program on a percentage basis. "All Other Compensation" includes premiums for long-term disability insurance and life insurance, as well as Company matching contributions under our 401(k) plan. We believe the significant focus on performance-based awards reflected in the graphic above, including the relative weighting of the various compensation elements, reflects our strong pay-for-performance alignment.
Governance Practices that Support Our Compensation Philosophy
| GOVERNANCE PRACTICE | | WHAT WE DO | | Independent Directors | ☑ | All of the members of our Board, other than our Chief Executive Officer and President, are independent directors under applicable SEC and NYSE rules. | | Independent Compensation Committee | ☑ | The Committee consists entirely of independent directors who meet the independence standards set forth in applicable SEC and NYSE rules. | | Independent Compensation Consultant | ☑ | The Committee has retained, and routinely consults with, an independent compensation consultant who assists the Committee in gathering competitive pay data, selecting our peer group, and structuring our executive compensation program. The decision to engage the consultant was made solely by the Committee and the consultant reports directly to the Committee. | | ESG Modifier | ☑ | In fiscal year 2023, the Committee incorporated an ESG modifier for the 2023 Annual Cash Incentive Awards in order to further strengthen our pay-for-performance alignment and encourage the achievement of our ESG initiatives. | | Compensation Risk Assessment | ☑ | The Committee performs an annual review of the risks related to our compensation practices. See the section of this Proxy Statement titled "Compensation Risk Assessment" for additional information. | | Frequency of "Say-on-Pay" Vote | ☑ | Historically, we have provided our stockholders the opportunity to approve, on a non-binding advisory basis, the compensation of our NEOs on an annual basis as this affords our stockholders the ability to provide routine feedback on our compensation program. At the Annual Meeting, we are again asking our stockholders to approve the compensation of our NEOs every year. | | Clawback and Forfeiture Policy | ☑ | We maintain a Clawback and Forfeiture Policy that applies to our cash and equity incentive awards, which reinforces our pay-for performance philosophy and contributes to a Company culture that emphasizes integrity and accountability in financial reporting. | | Stock Ownership Guidelines | ☑ | We have voluntarily adopted stock ownership guidelines for our executive officers and directors, which aligns the incentives of these persons with those of our stockholders. | | No Hedging and Pledging | ☑ | We have adopted an Insider Trading Policy that specifically prohibits directors, executive offices or employees from hedging or pledging Company securities, or adopting similar practices. | | Equity Award Vesting Provisions | ☑ | Our equity awards are subject to "double-trigger" vesting upon a change in control. | | No Tax Gross Ups | ☑ | Our change-in-control and severance agreements do not contain provisions allowing for excise tax gross up payments. | | No Repricing of Awards | ☑ | Our 2015 Stock Incentive Plan, or 2015 Plan, explicitly prohibits the repricing of equity awards. No repricing of awards will occur without the approval of our stockholders. | | No Dividends on Unvested Equity Awards | ☑ | Our equity award agreements do not provide for the payment of dividends on unvested equity awards. |
Governance Practices that Support Our Compensation Philosophy
| COMPENSATION CONSULTANT AND PEER GROUP |
Compensation Consultant
Compensation Consultant The Committee receives assessments and advice regarding our compensation practices and philosophy from its independent compensation consultant, Frederic W. Cook & Co.Inc., or FW Cook. FW Cook provides information on competitive pay practices and trends in our industry, and makes recommendations regarding the formulation of our Peer Group (as defined below), as well as the design and structure of our compensation program. The Committee meets regularly with FW Cook throughout the year, carefully reviews and assesses the materials provided by FW Cook, and engages in thorough deliberations with FW Cook and management regarding our executive compensation program and potential changes. While our Company is not obligated to retain an independent compensation consultant, the Committee believes that the use of an independent consultant provides additional assurance that our executive compensation program is attractive and competitive in the marketplace, consistent with market conditions, aligned with our business and strategic objectives, and reflective of our executive compensation philosophy. During fiscal year 2023, the Committee conducted a request for proposal process and sought proposals from several prominent compensation consultants. Four agencies submitted proposals and, after a thorough review process, the Committee reengaged FW Cook as our independent compensation consultant. In accordance with applicable SEC rules, the Committee took certain factors into consideration when selecting FW Cook, which it believes may affect the independence of a compensation consultant. In particular, the Committee considered: •whether any other services had been or were being provided by FW Cook to our Company; •the amount of fees paid by our Company to FW Cook as a percent of FW Cook’s total revenues; •FW Cook’s policies and procedures designed to prevent conflicts, a copy of which was provided to the Committee prior to the meeting; •FW Cook’s ownership of our common stock (if any); and •any business or personal relationships between FW Cook and any Committee members or any of our executive officers. Furthermore, FW Cook does not provide any additional services to us or our management, other than those provided to the Committee. Following the consideration of these factors, and such additional factors as the Committee deemed appropriate under the circumstances, the Committee made an affirmative determination that FW Cook is independent and unanimously approved the engagement of FW Cook. The decision to engage FW Cook was made by the Committee, and FW Cook reports directly to the Committee. While members of our management regularly communicate with representatives of FW Cook, our management did not recommend the engagement of FW Cook in any capacity for fiscal year 2023 (or any prior year) and does not direct or oversee the retention, termination or scope of services of FW Cook with respect to our executive compensation program.
Peer Group
Peer Group In making compensation decisions for fiscal year 2023, the Committee compared the aggregate compensation opportunity, as well as each element of compensation, against a peer group of publicly traded footwear, apparel, accessories and lifestyle brand companies that is recommended by FW Cook and approved by the Committee. Our peer group is generally comprised of companies against which we compete for executive talent and stockholder investment, are in related businesses or industries, and are otherwise similar to us based on a number of characteristics. Our peer group is reviewed at least annually by the Committee with support from FW Cook. In particular, when selecting our peer group, the Committee considers the characteristics set forth in the chart below. For fiscal year 2023, the Committee approved an updated peer group based on consideration of the various factors and characteristics discussed above. In particular, changes were made to the peer group to reflect the relatively greater size and complexity of our organization taking into account metrics such as revenue and market capitalization. While no single company in our peer group reflected all of our Company's characteristics, taken together the Committee believed that these companies provided strong comparative analogs to our overall business model at the time the peer group was selected. Our peer group for fiscal year 2023, which we refer to as our Peer Group, consisted of the following 20 companies:
Peer Group
| FISCAL YEAR 2023 PEER GROUP | | | | | • Capri Holdings Limited | • Hanesbrands Inc. | • RH | • Under Armour Inc. | | • Carter's, Inc. | • Levi Strauss & Co. | • Skechers U.S.A., Inc. | • Urban Outfitters Inc. | | • Columbia Sportswear Company | • Lululemon Athletica, Inc. | • Steve Madden, Ltd. | • VF Corporation | | • Crocs, Inc. | • PVH Corp. | • Tapestry, Inc. | • Williams-Sonoma, Inc. | | • Foot Locker, Inc. | • Ralph Lauren Corp | • Ulta Beauty, Inc. | • Wolverine World Wide, Inc. |
Use of Peer Group in Setting Executive Compensation
Use of Peer Group in Setting Executive Compensation As part of its effort to ensure that our executive compensation program is attractive and competitive in the marketplace, the Committee regularly reviews compensation data from our Peer Group provided by FW Cook. In addition, in order to gain perspective on overall market trends and practices, the Committee regularly reviews data from broader-based compensation surveys. Our Peer Group compensation data is generally used as an initial starting point in making compensation decisions for our executives, including with respect to both the target level of compensation and the overall structure of our executive compensation program. For comparison purposes, FW Cook typically presents Peer Group data on individual executive pay levels, both with respect to the total compensation opportunity and individual elements of compensation for each executive. In setting the target compensation opportunity for each individual executive for fiscal year 2023, the Committee focused on benchmarking our executives’ target total compensation opportunity to the 50th percentile compared to our Peer Group, subject to the discretion retained by the Committee to make adjustments as it deems appropriate. While the focus of the median pay philosophy is on the total compensation opportunity available to our executives, the individual elements of compensation are also generally targeted to the 50th percentile as a starting point. While an assessment of our Peer Group compensation data, and broader-based compensation surveys, is a significant factor in the Committee’s evaluation of compensation decisions, it also considers a variety of additional factors, including the tenure, experience, and level of responsibility of each executive, recent and projected Company performance, recent individual performance, retention considerations, general industry practices and economic conditions.
Use of Peer Group in Setting Executive Compensation
| ELEMENTS OF FISCAL YEAR 2023 EXECUTIVE COMPENSATION PROGRAM |
Use of Peer Group in Setting Executive Compensation
The following table provides summary information regarding the key elements of our fiscal year 2023 executive compensation program:
Use of Peer Group in Setting Executive Compensation
| COMPENSATION ELEMENT | FIXED V. PERFORMANCE-BASED / AT RISK | CASH V. EQUITY | | Base Salary | Fixed | Cash | | 2023 Annual Cash Incentive Awards | Performance-Based / At Risk (Short-Term Company Performance Criteria) (ESG Modifier) | Cash | | 2023 Time-Based RSUs | Performance-Based / At Risk (Long-Term Time-Based Vesting) | Approximately 40% of total equity compensation | | 2023 LTIP PSUs | Performance-Based / At Risk (Long-Term Company Performance Criteria and Vesting) (TSR Modifier) | Approximately 60% of total equity compensation | | Employee Benefits | Fixed | Other | | Severance and Change in Control | Fixed | Cash/Equity/Other |
2023 Annual Cash Incentive Awards
2023 Annual Cash Incentive Awards The following table provides information regarding the 2023 Annual Cash Incentive Awards granted to our NEOs during fiscal year 2023:
2023 Annual Cash Incentive Awards
| COMPENSATION ELEMENT 2023 ANNUAL CASH INCENTIVE AWARDS | | | | | Compensation | Description | Performance Conditions/ Vesting Provisions | Pay-for-Performance | | • Performance-Based (Short-Term Company Performance Criteria) • Cash | • Short-term Company performance conditions based on Committee-approved annual metrics derived from our annual and long-range business and strategic plan. • Pay based on achievement of threshold, target and maximum Company financial performance levels to reward achievement and strike appropriate balance between compensation incentives and risks. • The "target" performance condition level is typically in line with the level of Company performance projected for each metric based on the annual budget. • All NEOs have operating income and revenue-based performance metrics to reflect a continued focus on profitability and top line growth, and to ensure our compensation program encourages healthy and sustained growth across our business. • The Committee incorporated an ESG modifier for fiscal year 2023. | • Target bonus set as percentage of base salary. • Actual bonus payout is based on achievement of fiscal year 2023 consolidated operating income and consolidated revenue targets for all NEOs (and business unit operating income and revenue targets for certain executives with business unit oversight responsibilities). • The Committee assigned relative weighting to each component, which is expressed as a percentage of the targeted cash incentive amount. • For threshold performance, 50% of the cash incentive related to that component would be earned. For target performance, 100% would be earned. For maximum performance, 200% would be earned. • Achievement below threshold levels results in no payout. To the extent Company financial performance is achieved above the threshold levels, the bonus payout that will be earned from the threshold to the target, and then from the target to the maximum, will increase as determined by linear interpolation. • The ESG modifier was designed to impact payouts within the range of +10% to -10%, and highlights our efforts to drive accountability for achievement of our ESG initiatives. | • Fiscal year 2023 consolidated operating income, consolidated revenue, and Global Omni-Channel revenue, metrics were all achieved above the target levels based on Company performance. Global Omni-Channel operating income and Global Fashion Lifestyle revenue were each achieved above the threshold level and below the target level. Global Fashion Lifestyle operating income was not achieved at the threshold level. • The Committee determined that the ESG modifier was achieved at the +8% level. • As a result of this performance, 2023 Annual Cash Incentive Award payments ranging from 58% to 114% of base salary were earned by each of the NEOs (inclusive of the impact of the ESG modifier). • The calculation of the 2023 Annual Cash Incentive Awards is described in detail below. |
2023 Annual Cash Incentive Awards
Target Cash Incentive Amount The Committee establishes a target amount of annual cash incentive compensation for each NEO, which is expressed as a percentage of base salary. The percentage is determined by the Committee by reference to a number of factors, including title and scope of responsibilities, our recent and projected financial performance, and a review of Peer Group data. Further, the target cash incentive amount is prorated to reflect any base salary adjustments throughout the full fiscal year so that the target amount reflects actual base salary earned. Performance Targets The following table summarizes the performance conditions for the 2023 Annual Cash Incentive Awards, the relative weighting of each performance condition for each NEO, our performance in light of the targets, and the actual payout percentage for each component:
2023 Annual Cash Incentive Awards
| COMPONENT | RELATIVE WEIGHT FOR EACH NEO | THRESHOLD PERFORMANCE | TARGET PERFORMANCE | MAXIMUM PERFORMANCE | PERFORMANCE AND PAYOUT(1) | | Consolidated Operating Income | • 70% for Messrs. Powers, Fasching and Garcia • 30% for Mr. Caroti and Ms. Spangenberg | $584.4 million | $649.4 million | $779.2 million | $652.8 million, resulting in a payout of 103% | | Consolidated Revenue | • 30% for Messrs. Powers, Fasching and Garcia | $3,289.4 million | $3,575.4 million | $3,933.0 million | $3,627.3 million, resulting in a payout of 115% | | Business Unit Operating Income | • 40% for Mr. Caroti (Global Omni-Channel) | $752.8 million | $836.5 million | $1,003.8 million | $802.2 million, resulting in a payout of 80% | | | • 40% for Ms. Spangenberg (Fashion Lifestyle) | $655.8 million | $728.7 million | $874.4 million | $611.3 million, resulting in no payout | | Business Unit Revenue | • 30% for Mr. Caroti (Global Omni-Channel) | $2,658.6 million | $2,889.8 million | $3,178.8 million | $2,957.6 million, resulting in a payout of 123% | | | • 30% for Ms. Spangenberg (Fashion Lifestyle) | $1,939.4 million | $2,108.1 million | $2,318.9 million | $1,991.8 million, resulting in a payout of 66% |
2023 Annual Cash Incentive Awards
(1) Payout percentages reflect the level of payout achieved for each component of the 2023 Annual Cash Incentive Award. Payout amounts based on achievement between threshold and target levels, or between target and maximum levels, are determined by linear interpolation. Achievement below threshold levels results in no payout. Calculation of Total Payout The amount of cash incentive compensation actually earned by each NEO with respect to the 2023 Annual Cash Incentive Awards, or total payout, is calculated by multiplying each NEO's relative weight for each component by the percentage of target earned for each component (using linear interpolation), resulting in an overall weighted achievement, and multiplying the target cash incentive amount by the overall weighted achievement percentage, resulting in the payout amount for each component. The payout for each component is then added and multiplied by the percentage of ESG modifier earned. Each of these steps is illustrated by the table below:
2023 Annual Cash Incentive Awards
| NAME | TARGET % OF SALARY | COMPONENT | RELATIVE WEIGHT OF COMPONENT | % OF TARGET EARNED FOR COMPONENT | OVERALL WEIGHTED ACHIEVEMENT | TARGET CASH INCENTIVE AMOUNT(1) | PAYOUT FOR EACH COMPONENT | % OF ESG MODIFIER EARNED | TOTAL PAYOUT | | Dave Powers | 175% | Consolidated Operating Income | 70% | 103% | 106% | $1,343,473 | $1,426,459 | 8% | $2,200,821 | | | | Consolidated Revenue | 30% | 115% | | $575,774 | $611,340 | | | | Steven J. Fasching | 75% | Consolidated Operating Income | 70% | 103% | 106% | $397,698 | $422,264 | 8% | $651,493 | | | | Consolidated Revenue | 30% | 115% | | $170,442 | $180,970 | | | | Stefano Caroti | 75% | Consolidated Operating Income | 30% | 103% | 100% | $164,256 | $163,634 | 8% | $589,081 | | | | Global Omni-Channel Operating Income | 40% | 80% | | $219,008 | $218,178 | | | | | | Global Omni-Channel Revenue | 30% | 123% | | $164,256 | $163,634 | | | | Anne Spangenberg | 75% | Consolidated Operating Income | 30% | 103% | 50% | $189,863 | $95,776 | 8% | $206,877 | | | | Fashion Lifestyle Operating Income | 40% | — | | — | — | | | | | | Fashion Lifestyle Revenue | 30% | 66% | | $189,863 | $95,776 | | | | Thomas Garcia | 75% | Consolidated Operating Income | 70% | 103% | 106% | $283,514 | $301,027 | 8% | $464,442 | | | | Consolidated Revenue | 30% | 115% | | $121,506 | $129,012 | | |
2023 Annual Cash Incentive Awards
(1) Target cash incentive amounts are based on actual base salary amounts earned during the year multiplied by the target bonus percentage for the year, each of which are subject to change during the year. One-Time Cash Bonus As discussed above, during fiscal year 2023, Mr. Caroti assumed an interim leadership role within the Performance Lifestyle Group in addition to continuing to manage the responsibilities associated with his regular position. During this time, Mr. Caroti drove successful engagement across the organization, as well as outstanding financial and operational results. The Committee specifically considered these additional responsibilities and results in electing to pay a one-time cash bonus of $400,000 to Mr. Caroti, which was paid in addition to the 2023 Annual Cash Incentive Award referenced above. Mr. Caroti was the only NEO to receive a cash bonus in addition to a 2023 Annual Cash Incentive Award. Please see the section of this Proxy Statement titled "Summary Compensation Table" for additional information.
2023 Time-Based Restricted Stock Units
2023 Time-Based Restricted Stock Units The following table provides information regarding the 2023 Time-Based RSUs granted to our NEOs during fiscal year 2023:
2023 Time-Based Restricted Stock Units
| COMPENSATION ELEMENT 2023 TIME-BASED RSUs | | | | | Compensation | Description | Performance Criteria/ Vesting Provisions | Pay-for-Performance | | • Fixed • Long-Term Time-Based Vesting • Approximately 40% of total equity compensation | • Balance the level of performance-based pay with time-based pay to properly manage our compensation-related risk. • Primarily used for retention of our executives. • Customary among our Peer Group. | • 2023 Time-Based awards vest in three equal installments over three years commencing August 15, 2023. | • While the 2023 Time-Based RSUs are not subject to a performance-based vesting condition, our NEOs are at risk of not receiving the full value of these awards because vesting is conditioned upon continued employment over an extended period of time and their value is subject to fluctuation based on our stock price. • The Committee expects a majority of equity awards to continue to have performance-based vesting conditions. |
2023 Long-Term Incentive Plan Performance-Based Stock Units
2023 Long-Term Incentive Plan Performance-Based Stock Units The following table provides information regarding the 2023 LTIP PSUs granted to our NEOs during fiscal year 2023:
2023 Long-Term Incentive Plan Performance-Based Stock Units
| COMPENSATION ELEMENT 2023 LTIP PSUs | | | | | Compensation | Description | Performance Conditions/ Vesting Provisions | Pay-for-Performance | | • Performance-Based (Long-Term Company Performance Criteria and Vesting) • Approximately 60% of total equity compensation | • Company performance criteria are based on Committee-approved metrics derived from our three-year long-range business and strategic plan that are approved at the beginning of the performance measurement period. • Pre-tax income and revenue support our focus on profitability and consolidated revenue as key strategic initiatives and align executives’ interests with the execution of our long-range plan. • Reliance on multiple performance-based vesting conditions strikes appropriate balance between compensation incentives and risks. | • 50% of each award will vest subject to the achievement of annual pre-tax income targets measured in fiscal years 2023, 2024 and 2025, based on our three-year long range plan. • 50% of each award will vest subject to the achievement of an annual consolidated revenue target measured in fiscal years 2023, 2024 and 2025, based on our three-year long range plan. • While we measure performance annually over the three-year period, the goals for each fiscal year are established at the beginning of the performance measurement period. • No vesting of any portion of the award will occur if the Company fails to achieve the pre-established minimum revenue and pre-tax income thresholds. To the extent Company financial performance is achieved above the threshold amounts, the number of PSUs that will vest from the threshold to the target, and then from the target to the maximum, will increase as determined by linear interpolation, provided that the maximum number of PSUs that may vest with respect to a particular award will not exceed 200% of the targeted amount for that award regardless of the level of Company performance. • The executive must provide continued service through March 31, 2025. | • Vesting of awards dependent on achievement of profitability and consolidated revenue targets that are established by the Committee on the grant date, which are consistent with achievement of our strategic objectives. •The vesting of the awards is subject to adjustment based upon the application of a TSR modifier, thereby correlating the vesting of the awards to both total and relative stockholder returns over the full three-year performance period. |
2023 Long-Term Incentive Plan Performance-Based Stock Units
TSR Modifier The 2023 LTIP PSU awards earned are subject to adjustment based on a TSR modifier. The amount of the adjustment will be determined based upon a comparison of Company TSR relative to the TSR of a pre-determined set of peer group companies, or TSR Peer Group, for the 36-month performance period commencing on April 1, 2022 and ending on March 31, 2025. For purposes of the 2023 LTIP PSUs, the TSR Peer Group used is the same as the Peer Group, but also includes two additional companies deemed appropriate by the Committee. Depending on Company TSR relative to the TSR of the TSR Peer Group, the number of RSUs that will be subject to vesting pursuant to each 2023 LTIP PSU will be modified as follows (with linear interpolation applied between the percentiles):
2023 Long-Term Incentive Plan Performance-Based Stock Units
| Company TSR Relative to Peer Group TSR (Percentile) | TSR Modifier (Multiplier) | | ≥75th | 125% | | 55th | 100% (no modification) | | ≤25th | 75% |
2023 Long-Term Incentive Plan Performance-Based Stock Units
Notwithstanding the foregoing, in the event that Company TSR is greater than or equal to the 55th percentile relative to the TSR of the TSR Peer Group, but Company TSR is a negative amount, the TSR modifier will not be applied (the number of RSUs to be vested will not be increased as a result of the TSR multiplier), which further aligns the interests of our executives with those of our stockholders. In addition, regardless of Company TSR relative to the TSR of the TSR Peer Group, the maximum number of RSUs that may vest pursuant to a particular 2023 LTIP PSU will not exceed 200% of the targeted amount, thereby mitigating compensation-related risk.
Severance and Change-in-Control Provisions
Severance and Change-in-Control Provisions The following table provides information regarding the severance and change in control provisions in our severance agreements and equity award agreements entered into with each of our NEOs:
Severance and Change-in-Control Provisions
| COMPENSATION ELEMENT SEVERANCE AND CHANGE IN CONTROL PROVISIONS | | | | Compensation | Considerations | Terms | | • Certain cash payments to NEOs, and vesting of certain equity awards in the event of a separation of employment | • The employment of our NEOs is "at will," meaning we can terminate them at any time and they can terminate their employment with us at any time. • "Double-trigger" provisions preserve morale and productivity and encourage executive retention in the face of the potentially disruptive impact of a change in control. • Considered a typical component of a competitive executive compensation program for executives among our Peer Group. • Provisions take into account the expected time it takes a separated executive to find a similarly situated job. | Change-in-Control and Severance Agreements: • Provide for certain cash payments, and the vesting of certain equity awards, in the event there is a separation of employment under various circumstances. Equity Award Agreements: • Provide for accelerated vesting of awards upon a change in control if the recipient is terminated by the acquiring entity in connection with the change in control under specified circumstances. In addition, vesting of awards will be accelerated in full if the acquiring entity does not agree to provide for the assumption or substitution of the awards, and for certain outstanding historical awards if the transaction is not approved by a majority of the continuing directors. |
Severance and Change-in-Control Provisions
For additional information about the severance and change in control provisions in our severance agreements and equity award agreements, please refer to the section of this Proxy Statement titled "Potential Payments upon Termination or Change in Control."
Severance and Change-in-Control Provisions
| OTHER COMPENSATION CONSIDERATIONS |
Compensation Risk Considerations
Compensation Risk Considerations The Committee is responsible for reviewing the payments that may be made and the value that may be achieved from our compensation program for all employees, including our NEOs, to assess whether the program encourages excessive or unnecessary risk-taking or otherwise is likely to have a material adverse effect on us. The Committee conducts a compensation risk analysis at least annually, but also takes into account compensation-related risks each time it grants compensation awards throughout the fiscal year. In conducting these assessments, the Committee considers a number of factors including the following: •Our compensation program consists of elements that provide both fixed and performance-based compensation, and the Committee reviews these elements and the relative mix annually. •Our Peer Group and industry compensation data is reviewed regularly to ensure that our compensation program is appropriate and competitive. •We have adopted a median pay philosophy whereby we remain focused on benchmarking our executives’ target total compensation at the median compared to our Peer Group. •The Committee expects a majority of equity awards to continue to have performance-based vesting conditions. •Performance-based awards are earned based on the achievement of pre-established Company and business unit performance goals, and are subject to modification based on the application of an ESG modifier and TSR modifier, as applicable. •We seek to limit overlap between our performance conditions and measurement periods to ensure our compensation program encourages healthy and sustained growth across our business, as well as over time. •Our performance-based awards are subject to maximum award amounts to cap the potential compensation amount associated with an award. •Our executive compensation program encourages executive retention through long-term vesting provisions. For fiscal year 2023, all of the equity awards we granted were subject to three-year vesting. •We have voluntarily adopted Stock Ownership Guidelines, which encourage executives to have a significant, long-term equity position in our Company, thereby aligning the interests of our executives with our stockholders. •We maintain a Clawback and Forfeiture Policy related to our cash and equity incentive awards, which emphasizes integrity and accountability in financial reporting. •Our governance policies, including our Insider Trading Policy, prohibit our directors, executive officers and employees from conducting speculative trading in Company securities, hedging Company securities, or pledging Company securities as collateral for a loan. •Our severance and change in control benefits are designed to attract and retain executives without providing excessive benefits such as excise tax gross up payments. •Our equity awards are intended to provide for “double-trigger” vesting upon a change in control. The Committee believes that, although the majority of the compensation opportunity provided to our executives is performance-based pay that is determined based upon the achievement of Company performance conditions, our executive compensation program does not encourage excessive or unnecessary risk-taking. The Committee does not believe that our compensation program is reasonably likely to have a material adverse effect on us.
Clawback and Forfeiture Policy
Clawback and Forfeiture Policy Consistent with our executive compensation philosophy, which seeks to reward executive officers for financial performance that creates value for our stockholders, we have voluntarily adopted a Clawback and Forfeiture Policy. Under this policy, we will seek recoupment or reimbursement with respect to performance-based compensation paid or awarded to our executive officers when the following three factors exist: •the incentive compensation payment or award (or the vesting of such award) was based upon the achievement of financial results, as reported in a Form 10-Q, Form 10-K or other report filed with the SEC, that were subsequently the subject of a restatement to correct an accounting error due to material noncompliance with any financial reporting requirement under the federal securities laws; •a lower payment or award would have been made to such executive officer (or lesser or no vesting would have occurred with respect to such award) based upon the restated financial results; and •the requirement to file the restatement was identified within three years after the date of the first public filing of the financial results that were subsequently the subject of the accounting restatement. Under the policy, the restatement does not need to be the result of misconduct by the executive officers for the recoupment to apply. The recoupment or reimbursement to be sought by our Company will be equal to the portion of any performance-based compensation paid to or received by such executive officer for or during each of the restated periods that is greater than the amount that would have been paid or received had the financial results been properly reported. In addition, under this policy, the Committee may seek to recoup or recover from an employee certain performance-based compensation previously paid or awarded to such employee if the Company determines the employee has engaged in significant misconduct that causes financial or reputational harm to the Company (regardless of whether a restatement of financial results has occurred), as determined in the discretion of the Committee. We anticipate our Board of Directors will adopt an updated Clawback and Forfeiture Policy during fiscal year 2024 that will be compliant with recently adopted SEC and NYSE rules.
Tax and Accounting Considerations
| SUMMARY COMPENSATION TABLE |
Tax and Accounting Considerations
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2) | Non-Equity Incentive Plan Comp. ($)(3) | All Other Comp. ($)(4) | Total ($) | | Dave Powers | 2023 | 1,173,077 | — | 7,999,562 | 2,200,822 | 18,015 | 11,391,476 | | Chief Executive Officer President | 2022 | 1,100,000 | — | 7,999,651 | 1,701,521 | 53,762 | 10,854,934 | | | 2021 | 1,100,000 | — | 3,999,580 | 2,750,000 | 10,870 | 7,860,450 | | Steven J. Fasching | 2023 | 756,923 | — | 1,699,907 | 651,493 | 18,003 | 3,126,326 | | Chief Financial Officer | 2022 | 686,538 | — | 2,499,639 | 643,137 | 10,632 | 3,839,946 | | | 2021 | 600,000 | — | 749,537 | 900,000 | 10,482 | 2,260,019 | | Stefano Caroti (5) | 2023 | 729,231 | 400,000 | 2,999,273 | 589,081 | 57,438 | 4,775,023 | | Chief Commercial Officer | 2022 | 686,539 | — | 2,499,684 | 545,519 | 53,458 | 3,785,200 | | | 2021 | 650,000 | — | 849,615 | 975,000 | 48,521 | 2,523,136 | | Anne Spangenberg (6) | 2023 | 471,472 | — | 1,199,466 | 206,877 | 9,611 | 1,887,426 | | President of Fashion Lifestyle | | | | | | | | | Thomas Garcia (7) | 2023 | 546,182 | — | 999,612 | 464,442 | 46,595 | 2,056,831 | | Chief Administrative Officer | | | | | | | |
Tax and Accounting Considerations
| GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2023 |
Tax and Accounting Considerations
| OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR END |
Tax and Accounting Considerations
| FISCAL YEAR 2023 OPTION EXERCISES AND STOCK VESTED |
Tax and Accounting Considerations
| NONQUALIFIED DEFERRED COMPENSATION |
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan The Committee has adopted the Nonqualified Deferred Compensation Plan, or the NQDC Plan, which is an unfunded, nonqualified deferred compensation program sponsored by our Company to provide certain members of our management the opportunity to defer compensation into the NQDC Plan. The NQDC Plan year is from January 1st to December 31st. Participants may defer up to 50% of their annual base salary and up to 85% of any cash incentive bonus under the NQDC Plan. We have the option, but not the obligation, to make discretionary or matching cash contributions to NQDC Plan participants. We have established a rabbi trust as a reserve for the benefits payable under the NQDC Plan. During fiscal year 2023, certain of our NEOs elected to make contributions to the NQDC Plan, and the Committee elected to match a portion of the contributions under the NQDC Plan.
Nonqualified Deferred Compensation Plan
| Name | Executive contributions during fiscal year 2023 ($)(1) | Registrant contributions during fiscal year 2023 ($)(2) | Aggregate gain (loss) during fiscal year 2023 ($) | Aggregate withdrawals/distributions during fiscal year 2023 ($) | Aggregate balance at end of fiscal year 2023 ($) | | Dave Powers | — | — | (115,194) | — | 628,818 | | Steven J. Fasching | — | — | — | — | — | | Stefano Caroti | 490,106 | 37,966 | (205,341) | — | 2,182,429 | | Anne Spangenberg | 129,231 | — | 5,955 | — | 135,186 | | Thomas Garcia | 305,762 | 30,100 | (161,025) | — | 1,643,189 | | Total | 925,099 | 68,066 | (475,605) | — | 4,589,622 |
Nonqualified Deferred Compensation Plan
(1)The amounts reported in this column reflect contributions made by our NEOs under the NQDC Plan during fiscal year 2023. These amounts are separately reported as compensation within the "Summary Compensation Table" above, and do not reflect amounts in addition to those amounts. (2)The amounts reported in this column reflect discretionary matching contributions made by us to our NEOs under the NQDC Plan during fiscal year 2023. These amounts are included in the "All Other Compensation" column of the "Summary Compensation Table" above, and do not reflect amounts in addition to those amounts.
Deferred Stock Unit Compensation Plan
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL |
Severance and Change-in-Control Payments
| DIRECTOR COMPENSATION |
Director Compensation Table
Director Compensation Table The following table sets forth all compensation paid or awarded to our Nonemployee Directors during fiscal year 2023. The amounts set forth in the table have been calculated in accordance with applicable SEC rules, and do not necessarily reflect the amounts that have actually been paid to, or which may be realized by, our Nonemployee Directors.
Director Compensation Table
| Name | Fees Earned ($) | Stock Awards ($)(1) | Total ($) | | Michael F. Devine, III | 280,000 | 173,149 | 453,149 | | David A. Burwick (2) | 526 | 264,462 | 264,988 | | Nelson C. Chan | 100,000 | 173,149 | 273,149 | | Cynthia (Cindy) L. Davis | 135,000 | 173,149 | 308,149 | | Juan R. Figuereo | 130,000 | 173,149 | 303,149 | | Maha S. Ibrahim (2) | 526 | 264,462 | 264,988 | | Victor Luis (2) | 526 | 264,462 | 264,988 | | Lauri M. Shanahan | 100,000 | 173,149 | 273,149 | | Bonita C. Stewart (2) | 90,271 | 203,487 | 293,758 |
Director Compensation Table
(1)The amounts in this column represent the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. For information about the assumptions underlying these computations, please refer to Note 8 to our consolidated financial statements included in our Annual Report. (2)This director has elected to receive some or all of his or her annual cash retainer fees through the issuance of our common stock.
Stock Ownership Guidelines
| CEO PAY RATIO |
Stock Ownership Guidelines
| PAY VERSUS PERFORMANCE |
Pay Versus Performance
Pay Versus Performance The following pay-versus-performance table sets forth information regarding the CAP to our Chief Executive Officer and President, who is our PEO, and our other NEOs, or our Non-PEO NEOs, for each of our fiscal years ended March 31, 2023, 2022 and 2021, or fiscal year 2023, 2022 or 2021, respectively, as calculated in accordance with Item 402(v), and our financial performance for each such fiscal year:
Pay Versus Performance
| PAY VERSUS PERFORMANCE TABLE | | | | | | | | | | | Summary Compensation Table Total for PEO ($)(1)(2) | Compensation Actually Paid to PEO ($)(1)(3) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1)(2) | Average Compensation Actually Paid to Non-PEO NEOs ($)(1)(3) | Value of Initial Fixed $100 Investment Based on: | | | | | Fiscal Year | | | | | TSR | Peer Group TSR(4) | Net Income ($,000) | Consolidated Operating Income ($,000) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | 11,391,476 | 21,415,165 | 2,961,401 | 4,799,279 | 335.5 | 103.9 | 516,822 | 652,751 | | 2022 | 10,854,934 | 6,190,970 | 3,867,018 | 2,845,438 | 204.3 | 155.6 | 451,949 | 564,707 | | 2021 | 7,860,450 | 19,464,880 | 2,479,351 | 5,207,671 | 246.6 | 200.6 | 382,575 | 504,205 |
Pay Versus Performance
(1)The table below includes the name of each individual serving as an NEO during our last three fiscal years, including our PEO:
Pay Versus Performance
| Fiscal Year | PEO | Non-PEO NEOs | | 2023 | Dave Powers | Steven J. Fasching, Stefano Caroti, Anne Spangenberg and Thomas Garcia | | 2022 | Dave Powers | Steven J. Fasching, David Lafitte, Stefano Caroti and Wendy Yang | | 2021 | Dave Powers | Steven J. Fasching, David Lafitte, Stefano Caroti and Andrea O'Donnell |
Pay Versus Performance
(2)The dollar amounts included in this column reflect the total compensation of our PEO and the average total compensation of our Non-PEO NEOs reported in the Summary Compensation Table for each fiscal year presented. (3)The table below provides the adjustments to the Summary Compensation Table total compensation made to arrive at our PEO’s CAP and our Non-PEO NEOs’ average CAP:
Pay Versus Performance
| CALCULATION OF COMPENSATION ACTUALLY PAID(a) | | | | | | | | | Fiscal Year | Executives | Summary Compensation Table Total ($)(b) | Minus - Amount Reported in the "Stock Awards" Column in the Summary Compensation Table ($) | Plus - Fair Value of Fiscal Year End of Outstanding and Unvested Stock Awards Granted in the Fiscal Year ($) (c) | Plus / Minus - Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years ($)(d) | Plus / Minus - Change in Fair Value at Vesting of Stock Awards Granted in Prior Fiscal Years ($)(e) | Compensation Actually Paid ($) | | 2023 | PEO | 11,391,476 | (7,999,562) | 10,951,395 | 4,242,444 | 2,829,412 | 21,415,165 | | | Average for Non-PEO NEOs | 2,961,401 | (1,724,565) | 2,383,845 | 780,911 | 397,687 | 4,799,279 | | 2022 | PEO | 10,854,934 | (7,999,651) | 5,398,210 | (1,160,869) | (901,654) | 6,190,970 | | | Average for Non-PEO NEOs | 3,867,018 | (2,549,581) | 1,946,763 | (242,995) | (175,767) | 2,845,438 | | 2021 | PEO | 7,860,450 | (3,999,580) | 4,787,303 | 4,760,338 | 6,056,369 | 19,464,880 | | | Average for Non-PEO NEOs | 2,479,351 | (849,565) | 1,016,903 | 1,060,293 | 1,500,689 | 5,207,671 |
Pay Versus Performance
(a) This table excludes adjustments for awards granted that vest in the same year, awards that failed to achieve their vesting conditions, and dividends, in each case because there is no applicable adjustment for the covered fiscal years. (b) Represents amounts from the Summary Compensation Table for the indicated fiscal year. (c) The fair value amounts are calculated in accordance with ASC Topic 718 Compensation - Stock Compensation (ASC 718), determined as of the covered fiscal year. Represents the fair value as of the indicated fiscal year end of the outstanding and unvested awards granted during such fiscal year, calculated in accordance with the methodology used for financial reporting purposes, in accordance with ASC Topic 718 and described further in our Annual Reports on Form 10-K. (d) The fair value amounts are determined based on the change in the fair value from the prior fiscal year end to the covered fiscal year end calculated in accordance with ASC 718. Represents the fair value as of the indicated fiscal year end of the outstanding and unvested awards that were granted in previous fiscal years, calculated in accordance with the methodology used for financial reporting purposes, in accordance with ASC Topic 718 and described further in our Annual Reports on Form 10-K. (e) The fair value amounts are determined based on the change in the fair value from the prior fiscal year end to the vesting date calculated in accordance with ASC 718. Represents the change in fair value, measured from the prior fiscal year end to the vesting date, of each stock award that was granted in previous fiscal year and which vested during the indicated,fiscal year, calculated in accordance with the methodology used for financial reporting purposes, in accordance with ASC Topic 718 and described further in our Annual Reports on Form 10-K. (4)The TSR Peer Group consist of the S&P 500 Apparel, Accessories & Luxury Goods Index.
Compensation Actually Paid Versus Total Stockholder Return
Compensation Actually Paid Versus Total Stockholder Return The chart below illustrates the relationship between the CAP to our PEO and the average CAP to our Non-PEO NEOs in relation to our TSR, and the TSR of our peer group, the NYSE Composite Index, over the last three fiscal years.
Compensation Actually Paid Versus Net Income
Compensation Actually Paid Versus Net Income The chart below illustrates the CAP to our PEO and the average CAP to our Non-PEO NEOs in relation to our net income over the last three fiscal years. We do not use net income as a performance measure in our executive compensation program.
Compensation Actually Paid Versus Consolidated Operating Income
Compensation Actually Paid Versus Consolidated Operating Income The chart below illustrates the CAP to our PEO and the average CAP to our Non-PEO NEOs in relation to our consolidated operating income over the last three fiscal years. Consolidated operating income is the financial performance measure that, in our assessment, represents the most important financial performance measure to link CAP to our performance.
Compensation Actually Paid Versus Consolidated Operating Income
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
Compensation Actually Paid Versus Consolidated Operating Income
The following table sets forth, as of June 30, 2023 (except as specified in the footnotes following the table), certain information concerning the shares of our common stock beneficially owned by (i) each person who is an NEO, (ii) each director or director nominee, (iii) all executive officers and directors as a group (14 persons), and (iv) each person known to us to be the beneficial owner of more than 5% of our common stock. There were 26,134,458 shares of our common stock outstanding on June 30, 2023.
Compensation Actually Paid Versus Consolidated Operating Income
| Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership (#)(2)(3) | Percent of Common Stock(3) | | Named Executive Officers | | | | Dave Powers | 60,093 | * | | Steven J. Fasching | 11,069 | * | | Stefano Caroti | 40,801 | * | | Anne Spangenberg | 98 | * | | Thomas Garcia | 22,628 | * | | Directors (4) | | | | Michael F. Devine, III | 12,008 | * | | David A. Burwick | 1,452 | * | | Nelson C. Chan | 9,833 | * | | Cynthia (Cindy) L. Davis | 3,177 | * | | Juan R. Figuereo | 555(5) | * | | Maha S. Ibrahim | 1,504 | * | | Victor Luis | —(6) | * | | Lauri M. Shanahan | 5,933(7) | * | | Bonita C. Stewart | 11,713(8) | * | | All Directors and Executive Officers as a Group (14 persons) | 180,864 | 0.7% | | 5% Stockholders | | | | FMR, LLC (9) | 3,969,940 | 15.0% | | BlackRock, Inc. (10) | 3,024,347 | 11.6% | | The Vanguard Group, Inc. (11) | 2,460,265 | 9.3% |
Compensation Actually Paid Versus Consolidated Operating Income
* Percentage of shares beneficially owned does not exceed 1.0% of our outstanding shares of common stock. (1)Unless otherwise noted, the address of each beneficial owner is 250 Coromar Drive, Goleta, California 93117. (2)Unless otherwise noted, we believe each individual or entity named has sole investment and voting power with respect to the shares of our common stock reported as beneficially owned by them, subject to community property laws, where applicable. (3)Pursuant to applicable SEC rules, shares not outstanding which are subject to options, warrants, rights or conversion privileges exercisable on or before the date that is 60 days after June 30, 2023 are deemed outstanding for the purpose of calculating the number and percentage owned by a person, but are not deemed outstanding for the purpose of calculating the number and percentage owned by any other person. (4)The reported amounts include shares held by certain directors through one or more family trusts over which shares the respective directors may have shared voting and/or investment power. (5)An additional 1,077 shares previously earned by this director have been deferred pursuant to an election made under our Deferred Stock Unit Compensation Plan. These deferred shares have been excluded from the table. (6)An additional 2,193 shares previously earned by this director have been deferred pursuant to an election made under our Deferred Stock Unit Compensation Plan. These deferred shares have been excluded from the table. (7)An additional 2,106 shares previously earned by this director have been deferred pursuant to an election made under our Deferred Stock Unit Compensation Plan. These deferred shares have been excluded from the table. (8)An additional 893 shares previously earned by this director have been deferred pursuant to an election made under our Deferred Stock Unit Compensation Plan. These deferred shares have been excluded from the table. (9)This information is based solely on Amendment No. 4 to Schedule 13G filed by this stockholder on February 9, 2023. This stockholder’s business address is 245 Summer Street, Boston, MA 02210. This stockholder has sole voting power over 3,964,335 of such shares and sole dispositive power over 3,969,940 of such shares. (10)This information is based solely on Amendment No. 1 to Schedule 13G filed by this stockholder on June 6, 2023. This stockholder’s business address is 50 Hudson Yards, New York, NY 10001. This stockholder has sole voting power over 2,882,066 such shares and sole dispositive power over 3,024,347 of such shares. (11)This information is based solely on Amendment No. 12 to Schedule 13G filed by this stockholder on February 9, 2023. This stockholder’s business address is 100 Vanguard Boulevard, Malvern, PA 19355. This stockholder has shared voting power over 11,729 of such shares, sole dispositive power over 2,422,442 of such shares, and shared dispositive power over 37,823 of such shares.
Compensation Actually Paid Versus Consolidated Operating Income
| DELINQUENT SECTION 16(a) FILINGS |
Compensation Actually Paid Versus Consolidated Operating Income
Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than ten percent of a registered class of our securities, to file with the SEC reports of initial ownership (Form 3) and reports of changes in ownership (Form 4 and Form 5) of our securities. Officers, directors, and greater than ten percent stockholders are required by SEC rules to furnish us with copies of all Section 16(a) forms they file. Based on our review of copies of Form 3, Form 4 and Form 5 furnished to us, as well as communications with our officers, directors, and greater than ten percent stockholders, we believe all of them complied with the filing requirements of Section 16(a) and we are not aware of any late or missed filings of such reports for fiscal year 2023.
Compensation Actually Paid Versus Consolidated Operating Income
| AUDIT & RISK MANAGEMENT COMMITTEE REPORT |
Compensation Actually Paid Versus Consolidated Operating Income
The Audit & Risk Management Committee of our Board of Directors is responsible for providing independent, objective oversight of, among other things, our financial reporting functions, our independent registered public accounting firm, our highest ranking manager of internal audit, our system of internal controls, our legal and regulatory compliance, and compliance with our related person transaction policy and Code of Ethics. The Audit & Risk Management Committee is currently composed of four directors, each of whom meets the independence and experience requirements under applicable NYSE rules, as well as the independence requirements applicable to Audit & Risk Management Committee members under applicable SEC rules. In addition, our Board of Directors has determined that the Chair of the Audit & Risk Management Committee qualifies as an “audit committee financial expert” under applicable SEC rules. Management is responsible for the preparation of our financial statements and financial reporting process, including our system of internal controls. KPMG LLP, our independent registered public accounting firm, is responsible for performing an independent audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), or the PCAOB, and expressing (i) an opinion on whether our consolidated financial statements present fairly, in all material respects, our financial position and results of operations and cash flows for the periods presented in conformity with US generally accepted accounting principles, and (ii) an opinion on whether we have maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023, based on criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Audit & Risk Management Committee’s responsibility is to monitor and oversee these processes. In connection with these responsibilities, the Audit & Risk Management Committee met with management and KPMG LLP to review and discuss the March 31, 2023 consolidated financial statements and obtained from management their representation that our financial statements have been prepared in accordance with US generally accepted accounting principles. In addition, management represented that, as of March 31, 2023, our Company maintained effective internal control over financial reporting. The Audit & Risk Management Committee also discussed with KPMG LLP the matters required by Auditing Standard No. 1301, “Communications with Audit Committees” of the PCAOB, which includes, among other items, information regarding the conduct of the integrated audit of our consolidated financial statements. The Audit & Risk Management Committee has received the written communications from KPMG LLP required by applicable requirements of the PCAOB regarding KPMG LLP's communication with the Audit & Risk Management Committee concerning independence and has discussed with them their independence. The Audit & Risk Management Committee operates under a written charter, which was adopted by our Board of Directors and is assessed annually for adequacy by the Audit & Risk Management Committee. The Audit & Risk Management Committee held ten meetings during fiscal year 2023, including meetings with KPMG LLP and our highest ranking manager of internal audit, both with and without management present. In performing its functions, the Audit & Risk Management Committee acts only in an oversight capacity. It is not the responsibility of the Audit & Risk Management Committee to determine that our financial statements are complete and accurate, are presented in accordance with US generally accepted accounting principles or present fairly our results of operations for the periods presented, or that we maintain appropriate internal controls. Furthermore, the Audit & Risk Management Committee’s oversight responsibilities do not independently assure that the audit of our financial statements has been carried out in accordance with the standards of the PCAOB or that our registered public accounting firm is independent. Based upon the Audit & Risk Management Committee’s review and discussions with management and KPMG LLP, and subject to the limitations of the Audit & Risk Management Committee’s role and responsibilities referred to above and in the Audit & Risk Management Committee charter, the Audit & Risk Management Committee recommended that our Board of Directors include the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended March 31, 2023, which was filed with the SEC on May 26, 2023.
Compensation Actually Paid Versus Consolidated Operating Income
| THE AUDIT & RISK MANAGEMENT COMMITTEE | | Juan R. Figuereo (Chair) | | Nelson C. Chan | | Maha S. Ibrahim | | Lauri M. Shanahan |
Compensation Actually Paid Versus Consolidated Operating Income
The Audit & Risk Management Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, or the Acts, except to the extent that our Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Acts.
Compensation Actually Paid Versus Consolidated Operating Income
| RELATED-PERSON TRANSACTIONS |
Compensation Actually Paid Versus Consolidated Operating Income
Our legal department is primarily responsible for identifying and reviewing relationships and transactions in which our Company and our directors, director nominees, executive officers, principal stockholders, or any of their respective immediate family members, are participants to determine whether any of these related persons had or will have a direct or indirect material interest in such transactions. In order to assist in identifying potential related-person transactions, our legal department annually prepares and distributes to all directors, director nominees and executive officers a detailed written questionnaire which includes questions intended to elicit information about any current or proposed related-person transactions. In addition, our Code of Ethics addresses conflicts of interest where an individual’s personal interests may interfere or conflict with the interests of our Company, including relationships with suppliers, customers or competitors. Conflicts of interest which might impair (or appear to impair) the exercise of judgment solely for the benefit of our Company and our stockholders are prohibited. In general, such conflicts must be approved by our legal department, the employee’s supervisor or, in the case of directors, the Audit & Risk Management Committee. Information regarding potential conflicts of interest in violation of our Code of Ethics may be reported to our anonymous reporting hotline, which may be accessed by the Chair of the Audit & Risk Management Committee, the Chairman of our Board and our highest ranking manager of internal audit. If a related-person transaction is identified by our legal department as one which would be required to be publicly reported pursuant to applicable SEC rules, the Audit & Risk Management Committee is responsible for reviewing and approving or ratifying any such transaction. The Audit & Risk Management Committee may approve a related person transaction when, in its good faith judgment, it determines that the transaction is in the best interests of our Company and our stockholders. There were no transactions with related persons that required disclosure under applicable SEC rules during fiscal year 2023, and no such transactions are currently proposed.
Compensation Actually Paid Versus Consolidated Operating Income
| PROPOSAL NO. 2 RATIFICATION OF THE SELECTION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
Compensation Actually Paid Versus Consolidated Operating Income
For fiscal year 2023, KPMG LLP, or KPMG, provided audit services, which included an examination of the consolidated financial statements included in our Annual Report. The Audit & Risk Management Committee has selected KPMG to provide audit services to our Company for fiscal year 2024, which covers the period from April 1, 2023 to March 31, 2024. We are asking our stockholders to ratify this selection at the Annual Meeting. Ratification of the selection of our independent registered public accounting firm is not required to be submitted to a vote of our stockholders by our Bylaws or applicable SEC rules, however the Audit & Risk Management Committee believes it is appropriate as a matter of good corporate governance practice. If our stockholders do not ratify the selection, the Audit & Risk Management Committee will consider the selection of another independent registered public accounting firm, but is not required to select a different firm. In addition, even if our stockholders ratify the selection, the Audit & Risk Management Committee will retain the discretion to select a different independent registered public accounting firm in the future if it believes doing so is in the best interests of our Company and stockholders. A representative of KPMG will attend the Annual Meeting and will have the opportunity to make a statement and/or respond to appropriate questions from stockholders present at the Annual Meeting.