DEF 14A of Prestige Consumer Healthcare Inc.
Filed Jun 29, 2023 · FY20230001104659-23-076310
Board of Directors
Board of Directors ■ Management communicates routinely with the Board and its Committees, including through the Lead Independent Director, on significant risks and how they are being managed, and directors are free to communicate directly with senior management. ■ The Board reviews risks to the Company strategy and operations.
Board of Directors
| Audit & Finance Committee Oversight Responsibilities | Compensation & Talent Committee Oversight Responsibilities | Nominating & Corporate Governance Committee Oversight Responsibilities | | ■ Overall risk exposures and enterprise risk management process; ■ Risks related to financial statements and the financial reporting process; ■ Accounting, legal, ethics and compliance matters; ■ Internal audit and the risk control organization including any significant changes to corporate risk control policies; ■ Risks related to information technology systems, privacy and cyber security management (including annual review of the structure and sufficiency of cyber security mitigation efforts including cyber risk insurance); ■ Financial risk related to ESG matters; and ■ Risks related to liquidity and capital allocation. | ■ Risks associated with the Company’s compensation philosophy and programs; ■ Engages an independent consultant to support in reviewing compensation programs and policies to encourage appropriate risk taking; ■ Talent acquisition and retention risks; and ■ Human capital management and issues related to diversity, equity, inclusion and belonging. | ■ Risks related to corporate governance, including the Corporate Governance Guidelines; ■ Along with the Audit and Finance Committee, the Company’s Code of Conduct and Ethics; ■ Corporate responsibility, sustainability and ESG related risks and opportunities; and ■ Succession planning for the Board and CEO. |
Board of Directors
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 11 |
What is the structure of the Board of Directors?
What is the structure of the Board of Directors? The number of directors on the Board of Directors is fixed from time to time by resolution adopted by the affirmative vote of a majority of the total number of directors then in office. Currently, the Board of Directors is fixed at seven directors. Six of the seven directors are considered independent. Ronald M. Lombardi serves as Chairman of the Board, and John E. Byom currently serves as the Lead Independent Director. The Board of Directors currently has three standing committees: Audit and Finance Committee, Compensation and Talent Management Committee and Nominating and Corporate Governance Committee. Six members of the Board of Directors are standing for re-election to hold office until the 2024 Annual Meeting of Stockholders. One new nominee for director, James C. D’Arecca, is also standing for election to the Board of Directors to hold office until the 2024 Annual Meeting of Stockholders. BOARD STRUCTURE AND COMPOSITION
What is the structure of the Board of Directors?
| Annual Election of Directors. All directors stand for election on an annual basis. Majority Voting Uncontested Director Elections. Any director nominee must resign if they do not receive an affirmative vote of a majority of votes cast in an uncontested election The Board will then determine whether to accept the resignation and disclose any decision not to accept the resignation. Director Independence. 6 out of 7 director nominees are independent (All directors are independent other than the CEO; fully independent Audit and Finance Committee, Compensation and Talent Management Committee and Nominating and Corporate Governance Committee). | Independent Board Leadership. Our Board of Directors maintains a Lead Independent Director who meets regularly with our independent members in executive session. Board Refreshment. 50% of our independent Board nominees have joined in the last 3 years and have expanded the Board’s scope of experience. Financial Literacy for Audit Committee. Three current Audit and Finance Committee members are “audit committee financial experts” under Securities and Exchange Commission rules. |
What is the structure of the Board of Directors?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 12 |
How are nominees evaluated; what are the minimum qualifications?
How are nominees evaluated; what are the minimum qualifications? We believe that our directors should possess the highest personal and professional ethics, integrity and values and be committed to representing the interests of the stockholders. They must also have an inquisitive and objective perspective, practical wisdom, mature judgment and demonstrated leadership skills. We also endeavor to have a Board of Directors representing a range of experiences in areas that are relevant to the Company’s business activities. Below we identify and describe the key experience, qualifications and skills our directors bring to the Board that are important considering the Company’s business and structure. The directors’ experiences, qualifications and skills that the Nominating and Corporate Governance Committee considered in their nominations are included in their individual biographies.
How are nominees evaluated; what are the minimum qualifications?
| | Leadership Experience. We believe that directors with experience in significant leadership positions over an extended period, especially chief executive officer positions, chief financial officers and other senior executives provide the Company with valuable insights and strategic thinking. These individuals generally possess extraordinary leadership qualities and the ability to identify and develop those qualities in others. They demonstrate a practical understanding of organizations, processes, strategy, risk management and the methods to drive change and growth. | | | Finance Experience. We believe that an understanding of finance and the financial reporting process is important for our directors. We measure our operating and strategic performance by reference to financial targets. In addition, accurate financial reporting and robust auditing are critical to our success and developing stockholders’ confidence in our reporting processes under the Sarbanes-Oxley Act of 2002. We expect all of our directors to be financially literate. | | | Consumer Products Experience. As a marketer and distributor of brand name personal healthcare products throughout the U.S. and Canada, Australia, and in certain other international markets, we seek directors with experience as executives managing consumer products businesses. | | | Marketing Experience. The Company seeks to grow organically by identifying and developing opportunities for expanding distribution of its existing product offerings through traditional and digital marketing, while also developing and launching new products to sell into the market. | | | Environmental, Social & Governance. As a global corporate citizen, we believe that sustainable operations are both financially and operationally beneficial to our business, and critical to the health of our employees and the communities in which we operate. We seek directors with experience in building strong environmental, labor, health & safety and ethical practices. | | | Supply Chain Experience. The Company relies on third party manufacturers and its manufacturing facility in Lynchburg, Virginia to fulfill its manufacturing needs. As a result, we seek to have directors with experience in supply chain management, and compliance with the various regulations that govern the manufacture, packaging, labeling, distribution, and importation of our products. |
How are nominees evaluated; what are the minimum qualifications?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 13 |
Who are the nominees this year?
Who are the nominees this year? We have seven nominees for the Board of Directors, six of whom serve on our current Board of Directors and one new nominee. One of our current directors, Mr. Christopher J. Coughlin has decided to not stand for re-election to the Board of Directors when his term expires at this year’s Annual Meeting. We thank Mr.Coughlin for his years of service and substantial contributions to the Board, the Company and our stockholders. If elected, each nominee would hold office until the 2024 Annual Meeting of Stockholders and until his or her respective successor is elected and qualified or until his or her earlier death, removal or resignation. These nominees, their ages at the date of this Proxy Statement and the year in which they first became directors are set forth in the table below. The Board of Directors has affirmatively determined that each of the nominees, other than Mr. Lombardi, is independent from the Company and its management under the NYSE’s independence standards. Mr. D’Arecca, our new nominee for the Board of Directors, was recommended by a non-management director and our recruiting firm.
Who are the nominees this year?
| | NAME AGE DIRECTOR SINCE | PRIMARY (OR FORMER) OCCUPATION | INDEPENDENCE | COMMITTEE ASSIGNMENTS | | | Ronald M. Lombardi 59 June 2015 | Chairman of the Board, President and Chief Executive Officer, Prestige Consumer Healthcare Inc. | | | | | John E. Byom 69 January 2006 | (Former) Chief Executive Officer of Classic Provisions Inc. and Chief Financial Officer of International Multifoods Corporation. | | Audit & Finance, Compensation & Talent Management | | | Celeste A. Clark 70 February 2021 | (Former) Senior Vice President, Global Policy and External Affairs and Chief Sustainability Officer of Kellogg Company. | | Compensation & Talent Management, Nominating & Corporate Governance (Chair) | | | James C. D’Arecca 52 Nominee | Executive Vice President, Chief Financial Officer of Haemonetics Corporation | | Proposed: Audit & Finance (Chair), Nominating & Corporate Governance ■ If elected | | | Sheila A. Hopkins 67 August 2015 | Interim Chief Executive Officer of Cutera, Inc; (Former) President, Global Vision Care and Executive Vice President of Bausch + Lomb. | | Audit & Finance, Nominating & Corporate Governance | | | Natale S. Ricciardi 74 May 2016 | (Former) President, Pfizer Global Manufacturing and Senior Vice President of Pfizer Inc. | | Compensation & Talent Management, Nominating & Corporate Governance | | | Dawn M. Zier 58 May 2020 | (Former) President and CEO of Nutrisystem. | | Audit & Finance, Compensation & Talent Management (Chair) |
Who are the nominees this year?
The Board is committed to an ongoing refreshment process and continually evaluates the composition of the Board to ensure that it has a strong balance of skills, experience, perspective and rigorous oversight through independent judgment. If a nominee is unable to stand for election, the Board may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee, unless you have voted “Withhold” with respect to the original nominee.
Who are the nominees this year?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 14 |
Who are the nominees this year?
DIRECTOR SKILLS MATRIX We endeavor to have a Board of Directors representing a range of experiences in areas that are relevant to the Company’s business activities. Below we identify and describe the key experience, qualifications and skills our directors bring to the Board that are important considering the Company’s business and structure.
Who are the nominees this year?
| | | BYOM | CLARK | D’ARECCA | HOPKINS | LOMBARDI | RICCIARDI | ZIER | TOTAL EXPERIENCE | | | | | | | | | | | | SOME KNOWLEDGE | DEEP KNOWLEDGE | | | Leadership Experience | | | | | | | | | | | | Finance Experience | | | | | | | | | | | | Consumer Products Experience | | | | | | | | | | | | Marketing Experience | | | | | | | | | | | | Environmental, Social & Governance | | | | | | | | | | | | Supply Chain Experience | | | | | | | | | |
Who are the nominees this year?
| | Deep Knowledge or Experience | | Some Knowledge or Experience |
Who are the nominees this year?
DIRECTOR DIVERSITY AND TENURE CHARTS Below is a snapshot of our Board.
Who are the nominees this year?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 15 |
Who are the nominees this year?
What are the backgrounds and qualifications of the Company’s nominees?
Who are the nominees this year?
| John E. Byom Director | | | | | | | | CAREER HIGHLIGHTS: John E. Byom has served as a director since January 2006. Mr. Byom was Chief Executive Officer of Classic Provisions Inc., a specialty foods distribution company, from October 2007 until the business was sold and he retired in June 2019. Mr. Byom was previously the Chief Financial Officer of International Multifoods Corporation. He left International Multifoods Corporation in March 2005 after 26 years, including four years as Vice President Finance and Chief Financial Officer from March 2000 to June 2004. After the sale of International Multifoods Corporation to The J.M. Smucker Company in June 2004, Mr. Byom was President of Multifoods Foodservice and Bakery Products. Prior to his time as Chief Financial Officer and as President of Multifoods Foodservice and Bakery Products, Mr. Byom was President of U.S. Manufacturing from July 1999 to March 2000, and Vice President Finance and IT for the North American Foods Division from 1993 to 1999. Prior to 1993, he held various positions in finance and was an internal auditor for International Multifoods Corporation from 1979 to 1981. Mr. Byom previously served on the board of MGP Ingredients Inc. Mr. Byom earned his B.A. in Accounting from Luther College. | | | | | | | DIRECTOR QUALIFICATIONS: | | | | | | | | | | | |
Who are the nominees this year?
| Celeste A. Clark, Ph.D. Director | | | | | | | CAREER HIGHLIGHTS: Celeste A. Clark, Ph.D. has served as a director since February 2021. Dr. Clark has been the principal of Abraham Clark Consulting, LLC, a consulting firm, since November 2011 and consults on nutrition and health policy, regulatory affairs and leadership development. Dr. Clark is also an adjunct professor in the Department of Food Science and Human Nutrition at Michigan State University since January 2012. She previously served as Senior Vice President, Global Policy and External Affairs of Kellogg Company, a food manufacturing company, and was the Chief Sustainability Officer until she retired in 2011. She was a member of the Global Executive Management Team and had an accomplished career spanning nearly 35 years at Kellogg Company in which time, she was responsible for the development and implementation of global health, nutrition and regulatory science initiatives. In addition, she led global corporate communications, public affairs, philanthropy and several administrative functions. Dr. Clark serves on the boards of The Hain Celestial Group, Inc. (organic and natural products) where she chairs the Compensation Committee, Wells Fargo & Company (financial services) where she chairs the Corporate Responsibility Committee and Darling Ingredients Inc. (sustainable products and renewable energy). She also serves as a trustee of the W.K. Kellogg Foundation. Dr. Clark previously served on the boards of Mead Johnson Nutrition Company, Diamond Foods, Inc., AdvancePierre Foods Holdings, Inc., and Omega Protein Corporation. Dr. Clark received her Ph.D. from Michigan State University in Food Science and Nutrition and in 2021, she was bestowed an honorary Ph.D. in Humanities. She brings significant industry experience in various nutrition, consumer productions, public policy, risk management, governance, sustainability and ESG matters to the Board. | | | | | | DIRECTOR QUALIFICATIONS: | | | | | | | | | |
Who are the nominees this year?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 16 |
Who are the nominees this year?
| James C. D’Arecca Director Nominee | | | | | CAREER HIGHLIGHTS: James C. D’Arecca has been nominated by the Board to stand for election to the Board at the 2023 Annual Meeting of Stockholders. Mr. D’Arecca is Executive Vice President, Chief Financial Officer of Haemonetics Corporation, a medical technology company, since April 2022 to present. Mr. D’Arecca previously served as Chief Financial Officer of TherapeuticsMD, Inc., a women’s healthcare company, from June 2020 to April 2022. Prior to joining Therapeutics MD, Inc., Mr. D’Arecca served as the Senior Vice President and Chief Accounting Officer of Allergen plc (formerly known as Actavis plc), a global pharmaceutical company, from August 2013 until its merger with AbbVie Inc. in May 2020. Mr. D’Arecca served as Chief Accounting Officer at Bausch & Lomb prior to joining Actavis plc and earlier in his career held finance and business development positions of increasing responsibility at Merck & Co., Inc. and Schering-Plough Corporation. Mr. D’Arecca began his career at PricewaterhouseCoopers LLP from 1992 to 2005, where he had an industry focus on pharmaceuticals, medical devices, and consumer products. Mr. D’Arecca earned a Bachelor of Science in Accounting from Rutgers University and a Master of Business Administration from Columbia University. He is a Certified Public Accountant. | | | | DIRECTOR QUALIFICATIONS: | | | | | |
Who are the nominees this year?
| Sheila A. Hopkins Director | | | | | | CAREER HIGHLIGHTS: Sheila A. Hopkins has served as a director since August 2015. Ms. Hopkins is the Interim Chief Executive Officer of Cutera, Inc., an energy based and aesthetic devices company, since April 2023 to present. Previously she served as President, Global Vision Care and Executive Vice President of Bausch + Lomb, a healthcare company, from September 2011 until her retirement in August 2013. From September 1997 to August 2011, Ms. Hopkins worked at Colgate-Palmolive, a leading consumer products company, where she held several senior executive positions including Vice President and General Manager, Personal Care, Vice President, Global Business Development and Vice President and General Manager, Professional Oral Care. Prior to that, she held significant marketing and sales positions at Procter & Gamble, American Cyanamid and Tambrands. Ms. Hopkins serves on the board of Cutera, Inc. (energy based and aesthetic devices). Ms. Hopkins previously served on the board of Warnaco Inc. She has also served on the Board of the Consumer Healthcare Products Association. Ms. Hopkins earned a B.A. in History from Wellesley College | | | | | DIRECTOR QUALIFICATIONS: | | | | | | | |
Who are the nominees this year?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 17 |
Who are the nominees this year?
| Ronald M. Lombardi Chairman of the Board, President and Chief Executive Officer | | | | | | CAREER HIGHLIGHTS: Ronald M. Lombardi was elected Chairman of the Board in May 2017 and has served as a director and as President and Chief Executive Officer of the Company since June 2015. He served as Chief Financial Officer of the Company from December 2010 until November 2015. Prior to joining the Company, from October 2010 to December 2010, Mr. Lombardi was employed by Medtech Group Holdings, a components and contract medical device manufacturer, as Chief Financial Officer. From October 2009 to October 2010, Mr. Lombardi served as the Chief Financial Officer of Waterbury International Holdings, a specialty chemical and pest control business. Mr. Lombardi was employed by Cannondale Sports Group, a sporting goods and apparel manufacturing company, as Chief Operating Officer from August 2008 to October 2009 and as Senior Vice President and Chief Financial Officer from March 2004 to August 2008. From 2000 to 2004, Mr. Lombardi served in various roles at Gerber Scientific Inc., including Vice President and Chief Financial Officer of Gerber Scientific Inc.’s Gerber Coburn Optical Division and Director of Financial Planning and Analysis of Gerber Scientific Inc. Mr. Lombardi was also previously employed by Emerson Electric, Scovill Fasteners, Inc. and Go/Dan Industries. Mr. Lombardi serves on the board of ACCO Brands Corporation (consumer and business products), where he chairs the Audit Committee. Mr. Lombardi received a B.S. from Springfield College and an M.B.A. from American International College and has been a licensed CPA. | | | | | DIRECTOR QUALIFICATIONS: | | | | | | | |
Who are the nominees this year?
| Natale S. Ricciardi Director | | | | | | | CAREER HIGHLIGHTS: Natale S. Ricciardi has served as a director since May 2016. Mr. Ricciardi developed a year career at Pfizer Inc., a biopharmaceutical company, retiring in 2011 as a member of the Pfizer Executive Leadership Team. While holding the positions of President, Pfizer Global Manufacturing and Senior Vice President of Pfizer Inc. from 2004 until 2011, Mr. Ricciardi was directly responsible for all of Pfizer’s internal and external supply and manufacturing organization, a global enterprise that grew to more than 100 manufacturing facilities supplying small and large molecule pharmaceuticals, vaccines, consumer, nutrition and animal health products. Previously, from 1999 to 2004, he had oversight for Pfizer’s U.S. manufacturing operations and from 1995 to 1999 was Vice President of Manufacturing for Pfizer’s Animal Health Group. Mr. Ricciardi serves on the board of Rapid Micro Biosystems, Inc. (commercial stage automation and rapid detection of microbial contamination in manufacturing operations). He recently retired from the board of Dynavax Technologies Corporation (commercial stage biopharmaceutical). He also sits on the Strategic Advisory Board of HealthCare Royalty Partners, an investment company. Mr. Ricciardi earned a degree in Chemical Engineering from The City College of New York and an MBA in Finance and International Business from Fordham University. | | | | | | DIRECTOR QUALIFICATIONS: | | | | | | | | | |
Who are the nominees this year?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 18 |
Who are the nominees this year?
| Dawn M. Zier Director | | | | | | | | CAREER HIGHLIGHTS: Dawn M. Zier has served as a director since May 2020. Since February 2020, Ms. Zier has been the principal of Aurora Business Consulting, LLC and advises public and private companies on business transformation, digital/marketing acceleration, and high-performance teams. Ms. Zier was formerly the President and CEO and a director of Nutrisystem, an innovative provider of weight loss programs and digital tools, from November 2012 until its March 2019 acquisition by Tivity Health, Inc., a leading provider of fitness and social engagement solutions. Ms. Zier then joined Tivity Health serving as President and Chief Operating Officer and a member of its Board of Directors, to help with the integration efforts through December 2019. Prior to November 2012 she served in a variety of executive positions at Reader’s Digest Association, a global media and data marketing company, including President of International from 2011-2012, President of Europe from 2009-2011, and President of Global Consumer Marketing from 2008-2009. Ms. Zier serves as Chair of the Board of The Hain Celestial Group, Inc. (organic and natural products). She also serves on the board of Spirit Airlines, Inc. (air travel), where she chairs the Nominating and Corporate Governance Committee. Ms. Zier previously served on the board of Purple Innovation Inc. and on the boards for multiple marketing and media entities, including the Data and Marketing Association’s (DMA) board from 2008 to 2015, where she was a voting director and on the executive committee. Ms. Zier earned her MBA and Master of Engineering from the Massachusetts Institute of Technology. Ms. Zier received her Corporate Director Certification from Harvard Business School in 2020 and was recognized as a Director 100 by the National Association of Corporate Directors in 2022. | | | | | | | DIRECTOR QUALIFICATIONS: | | | | | | | | | | | |
How are the Company’s directors compensated?
How are the Company’s directors compensated? The Compensation and Talent Management Committee retains Compensation Advisory Partners LLC (“CAP”) to perform a full review of director compensation against the Company’s peer group every other year. CAP most recently performed a full review against the peer group in August 2021. In consideration of the advice and recommendations from CAP, the Compensation and Talent Management Committee recommended, and the Board approved the compensation program for directors which became effective as of August 1, 2021. CAP is expected to complete a full review of director compensation against the Company’s peer group in July 2023. Under the director compensation program, each of our directors other than Mr. Lombardi receives the following cash and equity compensation for their services as a director: ■ annual grant of restricted stock units valued at $150,000, awarded on the date of the election of each director at the Annual Meeting of Stockholders, which restricted stock units vest one-year after the date of grant so long as membership on the Board of Directors continues through the vesting date, with settlement in common stock to occur at each recipient’s prior election either upon vesting or on the earliest of the director’s death, disability or the date on which the director’s board membership ceases for reasons other than death or disability; ■ one-time grant of restricted stock units valued at $150,000, pro-rated for service provided between the date he or she first becomes a director and the next Annual Meeting of Stockholders, which restricted stock units are awarded on the date of commencement of Board service and vest one year after the date of grant so long as membership on the Board of Directors continues through the vesting date, with settlement in common stock to occur at each recipient’s prior election, either upon vesting or on the earliest of the director’s death, disability or the date on which the director’s board membership ceases for reasons other than death or disability; and $90,000 annual cash retainer fee paid in equal quarterly installments.
How are the Company’s directors compensated?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 19 |
How are the Company’s directors compensated?
The Chairman of each of our standing Committees and our Lead Independent Director receive the additional fees set forth in the following table for their services in their respective capacities:
How are the Company’s directors compensated?
| POSITION | 2023 ANNUAL FEE($) | INCREASE | | • Chairman of the Audit and Finance Committee | 20,000 | -0- | | • Chairman of the Compensation and Talent Management Committee | 17,500 | -0- | | • Chairman of the Nominating and Corporate Governance Committee | 15,000 | -0- | | • Lead Independent Director | 30,000 | -0- |
How are the Company’s directors compensated?
No meeting fees are payable to directors. Our directors are reimbursed for out-of-pocket expenses incurred in connection with Board of Directors and/or Committee participation. Please see the Director Compensation table later in this Proxy Statement for information regarding the compensation paid to our directors during 2023.
Is there a limit on the number of shares that may be granted to non-employee directors?
Is there a limit on the number of shares that may be granted to non-employee directors? Pursuant to the terms of the Company’s 2020 Long-Term Incentive Plan, which our stockholders approved in August 2020, with respect to any one fiscal year, the aggregate compensation that may be granted or awarded to any one non-employee director, including all stock awards and cash payments (including meeting fees and retainers), may not exceed $600,000, or $900,000 in the case of a non-employee Chairman of the Board or Lead Director.
Are non-employee directors required to own a minimum amount of the Company’s common stock?
Are non-employee directors required to own a minimum amount of the Company’s common stock? Yes. The Board of Directors adopted Stock Ownership Guidelines for the directors and executive officers of the Company to align their interests with the Company’s stockholders. Each director is expected to be fully compliant with the guidelines by the date of the first Annual Meeting of Stockholders following the fifth anniversary of the date of election to the Board. Each director must maintain ownership of shares equal or greater than five (5) times the amount of their annual cash retainer, currently $450,000 (5 X $90,000 retainer). All directors are in compliance with these requirements.
Are there any family relationships between the Company’s directors and executive officers?
Are there any family relationships between the Company’s directors and executive officers? There are no family relationships between or among any of our directors and executive officers.
What is the purpose of the Compensation Discussion and Analysis?
Specifically, the following discussion outlines, among other things, the objectives of executive compensation, the elements of executive compensation, how determinations are made as to specific elements of, and total, executive compensation, severance and change-in-control payments, and executive officer involvement in setting executive compensation.
What is our compensation philosophy and what are the objectives of the compensation programs?
Our executive compensation philosophy is to have programs and pay levels that enable us to attract, retain and motivate talented management who will drive exceptional results for our stockholders. We accomplish this by ensuring that our executive officers are compensated in a way that considers market practice, supports good governance, and drives both company and individual performance. To ensure fair and competitive pay, the Compensation and Talent Management Committee references a peer group comprised of companies it selected based on various characteristics (as described further below) and targets the median of such peer group in setting target pay levels for the Company’s executive officers. The Company uses the following types of compensation to compensate and reward our executive officers for their performance: base salary, a cash-based annual incentive plan, and long-term equity awards comprised of performance stock units, restricted stock units and stock options. The Compensation and Talent Management Committee believes that the elements of compensation that it provides create a flexible, performance-based compensation package that focuses and rewards executives for short and long-term performance, while aligning the interests of our executive officers with the interests of the Company’s stockholders. Each element of executive compensation described above is determined based on:
What is our compensation philosophy and what are the objectives of the compensation programs?
| ■ executive compensation offered to similarly situated executives at peer companies; and | ■ good governance practices. |
How are the Company’s executive compensation programs structured to address the Company’s objectives?
The Compensation and Talent Management Committee believes that the use of performance-based or at-risk compensation allows the Company to tailor the compensation paid to our executive officers to the Company’s performance and maintain a compensation system that significantly affects executive compensation in the event the Company does not meet the pre-determined performance goals. Furthermore, utilizing threshold performance targets puts the performance units entirely at risk, which means that in the event the Company does not meet the threshold performance goals, the performance units would not be paid to the executive officers. Performance stock units are earned only if the Company achieves the pre-established three-year performance goals and the stock options only have value as the Company’s stock price increases. 75% of our CEO’s targeted value of the long-term incentive award is allocated to performance stock units, with the remaining 25% delivered in restricted stock units. Beginning in 2024, to further align our NEOs with our performance-based long-term incentive program, 60% of the other NEOs’ long-term incentive will be allocated to performance stock units, with the remaining 40% delivered in restricted stock units. No stock option incentives will be granted.
How are the Company’s executive compensation programs structured to address the Company’s objectives?
| Long-Term Incentive (LTI) Vehicle | 2023 Target LTI NEOs other than CEO | 2024 Target LTI NEOs other than CEO | Target LTI Value CEO | | Performance Stock Units | 33% | 60% | 75% | | Stock Options | 33% | 0% | 0% | | Service-based Restricted Stock Units | 33% | 40% | 25% |
Does the Compensation and Talent Management Committee use a peer group of companies?
Does the Compensation and Talent Management Committee use a peer group of companies? Yes. As part of its evaluation of the Company’s compensation packages, CAP recommended a group of peer companies that reflect the Company’s rapid growth and entrepreneurial business model, as well as being within a reasonable range of the Company’s revenue, EBITDA, EBITDA margin, and market capitalization. Because our core products are in the over-the-counter and personal care sector, there are relatively few companies like us. As a result, we consider companies with strong brands and similar business models as comparable peers. In addition, given our operating model and high margins, we consider strong EBITDA performance to be an important metric in selecting our peers. Based on this analysis, the Compensation and Talent Management Committee approved the following peer group:
Does the Compensation and Talent Management Committee use a peer group of companies?
| 2023 PEER GROUP | | | ■ B&G Foods Holdings Corp. | ■ Calavo Growers Inc. | | ■ Church & Dwight Co. | ■ Edgewell Personal Care Company | | ■ Energizer Holdings, Inc. | ■ Hain Celestial Group, Inc. | | ■ Helen of Troy Limited | ■ Jazz Pharmaceuticals plc | | ■ Lannett Co. | ■ Primo Water Corporation | | ■ Revlon, Inc. | ■ Tupperware Brands Corp | | ■ USANA Health Sciences, Inc. | ■ Vista Outdoor Inc. | | ■ Pacira BioSciences, Inc. | ■ Corcept Therapeutics Incorporated |
Does the Compensation and Talent Management Committee use a peer group of companies?
For 2023 compensation planning, the Compensation and Talent Management Committee added Pacira BioSciences, Inc. and Corcept Therapeutics Incorporated. For 2024 compensation planning, the Compensation and Talent Management Committee removed from the peer group Revlon, Inc. and Lannett Co. (both filed bankruptcy) and added Hostess Brands, Inc.
How does the Compensation and Talent Management Committee use market data from the peer group?
How does the Compensation and Talent Management Committee use market data from the peer group? In determining compensation for 2023, the Compensation and Talent Management Committee reviewed and considered market data provided to it by CAP related to individual pay components (salary and target annual bonus opportunity), total cash compensation, long-term incentive target grant values, and total direct compensation, at the 25th percentile, median, and 75th percentile of the peer group. The Compensation and Talent Management Committee intends compensation to approximate the median level of compensation offered to similarly situated executive officers at companies in the Company’s peer group. While market data is an important factor in setting pay, it is not the only factor we consider. For example, an executive officer’s total compensation may be higher or lower than the market median based on the level of responsibility, individual experience and performance in a particular year. In some situations, we will also use compensation survey data as an additional point of reference for select named executive officers.
How does the Company determine the types and amounts of executive compensation?
ANNUAL CASH INCENTIVE PLAN The Annual Incentive Plan (“AIP”) provides our executive officers with the ability to earn additional cash compensation based on a percentage of base salary and the Company’s performance. The Company views the AIP as a performance-based component of executive compensation that motivates and incentivizes the executive officers to achieve the short-term goals of the Company and our stockholders. For 2023, the Compensation and Talent Management Committee chose the following as the corporate financial goals for the AIP:
How does the Company determine the types and amounts of executive compensation?
| Metric | Weighting | Definition | Rationale for Selection | | AIP net sales | | Total revenues. | Drive consistent top-line growth. | | AIP Adjusted EBITDA | | Net income plus depreciation and amortization, interest expense, integration, transition, purchase accounting, legal and various other costs associated with acquisitions and divestitures, tradename impairment and certain tax adjustments. | Drive stockholder value creation in terms of growth of earnings per share and free cash flow. |
How does the Company determine the types and amounts of executive compensation?
Typically, no bonuses are payable under the AIP unless the Company achieves threshold performance for one of the goals set for net sales or Adjusted EBITDA. If the Company achieves both of these threshold goals, then each of our named executive officer’s bonus is subject to a maximum award of 200% of their target bonus based on achievement with respect to the Company performance factors. The award will be subject to an additional individual performance factor that may be added to and raise the total annual bonus for the executive above 200% of their target bonus up to the maximum of the individual award factor of 20%. The Compensation and Talent Management Committee identified a target bonus, expressed as a percentage of their base salary, for each named executive officer, which for 2023 were as follows: ■ Mr. Lombardi, 100% ■ Ms. Sacco, 60% ■ Mr. Mekhail, 60% ■ Mr. P’Pool, 50% ■ Mr. Zerillo, 40% The following table reflects the 2023 net sales, Adjusted EBITDA and payout levels approved by the Compensation and Talent Management Committee that correspond to the threshold, target and maximum performance by the Company. The named executive officers earn no payment (if performance is below threshold) or a payment on a sliding-scale between the minimum (threshold) amount and the maximum amount, inclusive of the target amount based on the Company’s performance.
How does the Company determine the types and amounts of executive compensation?
| | | Performance Level/ Payout (mil) | | | | Metric | Weighting | Threshold (50%) | Target (100%) | Maximum (200%) | | AIP net sales | 50% | $1,024.5 | $1,138.3 | $1,252.1 | | AIP Adjusted EBITDA | 50% | $346.1 | $384.6 | $423.1 |
How does the Company determine the types and amounts of executive compensation?
Following the close of the fiscal year, the Compensation and Talent Management Committee assesses the Company’s performance against the pre-determined performance targets and determines the amount, if any, of bonus earned by the executive officers. To be eligible to receive cash incentive compensation, the executive must be employed with the Company at the time payments are made by the Company. Despite a very challenging macroeconomic environment, our 2023 net sales and Adjusted EBITDA for the Company were $1,127.7 million and $378.1 million, respectively. Based on the results of these financial metrics, our named executive officers earned 93.4% of their target bonus. While the entire leadership team performed very well in the challenging macroeconmic environment, the Compensation and Talent Management Committee did not elect to award additional bonus to the named executive officers based on their individual performance throughout the year. When determining the adjustments to individual bonus payouts, the Compensation and Talent Management Committee considered each named executive officers’ achievement against their respective goals. Any adjustments to the payouts are linked to the goals and objectives set for the individual by the CEO or in the case of the CEO, by the Compensation and Talent Management Committee. Key achievements by our named executive officers considered by the Compensation and Talent Management Committee for 2023 included: ■ For Mr. Lombardi, our President and Chief Executive Officer, (a) successfully lead the Company through the challenging macroeconomic environment created by significant supply chain challenges and high inflation, delivering strong financial performance following a record fiscal 2022 with record Sales, EBITDA and EPS, (b) delivered cash flow in excess of $220 million while rebuilding inventory impacted by supply chain issues, (c) managed significant debt paydown with leverage below targeted level by year end, and (d) advanced 3-year roadmap for Company’s ESG initiatives, including publication of initial ESG report. ■ For Ms. Sacco, our Chief Financial Officer, (a) helped successfully lead the Company through the challenging macroeconomic environment created by significant supply chain challenges and high inflation, delivering a financial performance following a record fiscal 2022 with record Sales, EBITDA and EPS, (b) delivered cash flow in excess of $220 million while rebuilding inventory impacted by supply chain issues, (c) managed significant debt paydown with leverage below targeted level by year end, (d) worked within the finance function on maintaining and strengthening procedures and policies in support of effective controls, while helping to drive profitable growth, (e) continued enhancements in information management, technology and cybersecurity and (f) maintained strong investor relations program. For Mr. Mekhail, our Executive Vice President of Marketing & Sales, (a) successfully drove North American financial performance in the challenging macroeconomic environment which included significant supply chain challenges and high inflation, (b) continued to deliver strong sales and profit growth in ecommerce channels, (c) continued to strengthen marketing and sales team, and (d) successfully launched several new products extending product lines and growing revenue and profitability.
How does the Company determine the types and amounts of executive compensation?
| Name | Target Bonus | Company Performance Payout (93.4% of Target Bonus) | Individual Performance Adjustment | Total Payout | | Mr. Lombardi | $1,000,000 | $934,000 | $0 | $934,000 | | Ms. Sacco | $363,000 | $339,042 | $0 | $339,042 | | Mr. Mekhail | $300,000 | $280,200 | $0 | $280,200 | | Mr. P’Pool | $257,000 | $240,038 | $0 | $240,038 | | Mr. Zerillo | $140,000 | $130,760 | $0 | $130,760 |
How does the Company determine the types and amounts of executive compensation?
The 2023 AIP payouts to our named executive officers also are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation table later in this Proxy Statement. EQUITY AWARDS Executive officers of the Company are eligible to receive annual equity awards under our Long-Term Incentive Plan (“2020 LTIP”). Awards under the 2020 LTIP help tie a significant portion of an executive officer’s long-term compensation directly to stock price appreciation realized by all our stockholders and aligns an executive officer’s interests with those of our stockholders. Under the 2020 LTIP, our executive officers may receive performance stock units, restricted stock units and stock options. Overall Philosophy and Objectives Regarding Equity Awards The Company views the above-mentioned equity awards as components of executive compensation that motivate and incentivize management to achieve the long-term performance goals (including stock price appreciation) of the Company and our stockholders. The Compensation and Talent Management Committee believes equity-based incentive compensation aligns executive and stockholder interests because:
How does the Company determine the types and amounts of executive compensation?
| ■ the use of multi-year vesting for equity awards encourages executive retention and emphasizes the attainment of long-term performance goals; | ■ paying a significant portion of executive compensation with long-term incentive-based compensation motivates and incentivizes the executive officers to meet the long-term performance goals set by the Compensation and Talent Management Committee; and | ■ the executive officers will hold significant amounts of equity in the Company as required by the Company’s Stock Ownership Guidelines and will be motivated to increase stockholder value over the long-term. |
How does the Company determine the types and amounts of executive compensation?
In May 2022, following discussions with CAP and review of the benchmarking data for our executive officers, the Compensation and Talent Management Committee increased target award values for each executive for FY2023 to move each closer to the median of the peer group. Target award values increased, as provided in the table below.
How does the Company determine the types and amounts of executive compensation?
For our CEO, the Compensation and Talent Management Committee allocated approximately three-quarters of his targeted equity award value to performance stock units and the remaining one-quarter to restricted stock units. For our other named executive officers, the Compensation and Talent Management Committee allocated approximately one-third of the targeted equity award value to performance stock units, stock options and restricted stock units. In each case, the actual number of options and stock units granted was determined by dividing the allocated dollar value by the Black-Scholes value, in the case of the stock options, and the closing price of the Company’s common stock on the grant date, in the case of stock units. The 2023 equity grants to our named executive officers are set forth in the Grants of Plan-Based Awards table later in this Proxy Statement. Vesting Criteria for Equity Awards
How does the Company determine the types and amounts of executive compensation?
| Performance Stock Units | ■ Vest at the end of three years if company achieves pre-established goals relative to cumulative adjusted EBITDA and cumulative Net Sales (each weighted 50%). ■ The actual payout is determined based on the Company’s actual performance aggregated over the three-year period on a sliding-scale between the minimum (threshold) amount and the maximum amount, inclusive of the target amount. ■ Participants can earn up to 200% of the target number of shares with exceptional performance. ■ If performance is below target, but above threshold, participants can earn 50% of their award. ■ If performance is below threshold, participants earn 0% of their award. | | Stock Options | Vest ratably over three years based on service. | | Restricted Stock Units | Vest ratably over three years based on service. |
How does the Company determine the types and amounts of executive compensation?
May 2020 Performance Stock Unit Award Payout The May 2020 performance stock unit grant resulted in a payout of 152.3% for the three-year performance period FY 2021- 2023 as set out below:
How does the Company determine the types and amounts of executive compensation?
The Performance Multiplier resulted in the distribution of 87,854 shares to Mr. Lombardi, 9,968 shares to Ms. Sacco, 5,587 shares to Mr. Mekhail, 5,967 shares to Mr. P’Pool and 4,063 shares to Mr. Zerillo from their May 2020 performance stock unit grants. Although the Company incurred numerous unanticipated financial impacts and other volatility resulting from the macroeconomic environment especially significant supply chain issues and high inflation, no upward adjustments were factored into the performance stock unit grant payout for fiscal year 2023 results, other than non-cash goodwill and intangible asset impairments. Consistent with the plan provisions and previous decisions of the Committee, the results were adjusted to remove any benefit from the Akorn Consumer Health products acquisition. Please refer to Appendix A for a reconciliation of Non-GAAP Adjusted Total Net Sales to GAAP Total Revenues and Non-GAAP Adjusted EBITDA to GAAP Net Income used to determine our May 2020 Performance Grant Payout.
When does the Company typically grant equity awards?
When does the Company typically grant equity awards? The Company generally grants equity awards to its employees as soon as practicable after the beginning of a fiscal year, typically at its first regularly scheduled Board meeting in the new fiscal year. The equity awards are granted after the Chief Executive Officer has presented a proposed structure and level of awards and the Compensation and Talent Management Committee has fully reviewed all aspects of the awards, including the value of the awards and the vesting period. The awards are valued at the market closing price on the day of grant.
Are the Company’s directors and executive officers required to own a minimum amount of the Company’s common stock?
Are the Company’s directors and executive officers required to own a minimum amount of the Company’s common stock? Yes. The Board of Directors adopted Stock Ownership Guidelines for the directors and executive officers of the Company to align their interests with the Company’s stockholders. Each person subject to the Stock Ownership Guidelines is expected to be fully compliant with the guidelines by the date of the first Annual Meeting of Stockholders following the fifth anniversary of the date of employment as an executive officer of the Company or, for directors, the date of election to the Board. The following equity interests are included for purposes of determining compliance with the Stock Ownership Guidelines: ■ shares of the Company purchased on the open market or in privately negotiated transactions; ■ shares of the Company acquired by inheritance or gift or held by immediate family members or in trust for the benefit of the employee or family member; ■ after-tax shares of the Company acquired through vested restricted stock units and performance stock units; ■ 60% of vested options to the extent in-the-money — reflecting the approximate after-tax value of those shares; and ■ 60% of unvested restricted stock units and performance stock units that cliff vest, prorated to the extent full years of completed service or periods of performance, as applicable, at current projected performance multiple — reflecting the approximate after-tax value of those shares. The following equity interests are not included for purposes of determining compliance with the Stock Ownership Guidelines: ■ unvested restricted stock and restricted stock units, except as provided above; unvested stock options; and
Are the Company’s directors and executive officers required to own a minimum amount of the Company’s common stock?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 47 |
Are the Company’s directors and executive officers required to own a minimum amount of the Company’s common stock?
vested but not “in-the-money” stock options. The Stock Ownership Guidelines are summarized as follows: If a director or executive is below the ownership requirement, until the specified level is met, the director or officer will be required to retain 50 percent of the net, after-tax value of any equity received from the Company’s equity plan until the individual meets the guideline. All directors and executives are in compliance with the guidelines or are within the five-year transition period. The CEO currently exceeds his guideline by more than 300% of the holding requirement.
Does the Company have a policy regarding hedging or pledging Company securities?
Does the Company have a policy regarding hedging or pledging Company securities? Yes. The Company’s Insider Trading Policy prohibits hedging and limits any pledging by the Company’s directors, executive officers and employees. Does the Company have a policy regarding the recovery of incentive-based compensation paid to executive officers if the Company restates its financial statements? Yes. Pursuant to the Company’s Clawback Policy, in the event that the Company is required to restate its financial statements due to material non-compliance with any financial reporting requirement under the U.S. federal securities laws, the Company will, subject to the terms of the Clawback Policy, seek to recover from senior management any incentive-based compensation that was paid to or received by, or is to be paid to, senior management for the three years immediately preceding the period for which the Company is required to restate its financial statements, insofar as such incentive compensation is a result of errors within the financial statements that are required to be restated. The amount of the incentive-based compensation that the Company will seek to recover is the difference between the amount of the incentive-based compensation received by senior management based on the erroneous financial statements and the amount of incentive-based compensation that would have been paid to senior management based on the financial statements as restated. Notwithstanding the foregoing, the Company is not obligated to pursue any recovery if the Board of Directors or applicable committee determines that the recovery amount is de minimis to the Company or the expected cost of recovery will exceed the amount to be recovered. What are the respective roles of the Compensation and Talent Management Committee, its consultant and the Company’s executive officers in determining executive compensation? Executive Officer Compensation. Mr. Lombardi, our Chairman, President and Chief Executive Officer, with the assistance of certain members of senior management, participated in discussions with, and made recommendations to, the Compensation and Talent Management Committee regarding the setting of base salaries and cash and equity incentive plan compensation for the other executive officers. Mr. Lombardi was assisted by certain members of senior management and CAP in reviewing the competitive landscape for executive talent and structuring the types and levels of executive compensation for review by the Compensation and Talent Management Committee. Chief Executive Officer Compensation. The Compensation and Talent Management Committee and the Board of Directors are responsible for establishing the CEO’s compensation package. The Compensation and Talent Management Committee consulted with CAP, its independent compensation consultant, in determining the compensation to be awarded to Mr. Lombardi in 2023, and in determining his compensation program for 2024.
Does the Company have a policy regarding hedging or pledging Company securities?
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 48 |
Does the Company have a policy regarding hedging or pledging Company securities?
Compensation and Talent Management Committee Report Compensation and Talent Management Committee Report This Compensation and Talent 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 (the “Securities Act”), or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Securities Act and the Exchange Act. The Compensation and Talent Management Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review and discussions of the Compensation Discussion and Analysis with management, the Compensation and Talent Management Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for 2023.
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE Dawn M. Zier (Chair) John E. Byom Celeste A. Clark Natale S. Ricciardi
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 49 |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
Who are our Executive Officers? Our executive officers are as follows:
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Ronald M. Lombardi Chairman of the Board, President and Chief Executive Officer | Age: 59 | | | CAREER HIGHLIGHTS: Ronald M. Lombardi was elected Chairman of the Board in May 2017 and has served as a director and as President and Chief Executive Officer of the Company since June 2015. He served as Chief Financial Officer of the Company from December 2010 until November 2015. Prior to joining the Company, from October 2010 to December 2010, Mr. Lombardi was employed by Medtech Group Holdings, a components and contract medical device manufacturer, as Chief Financial Officer. From October 2009 to October 2010, Mr. Lombardi served as the Chief Financial Officer of Waterbury International Holdings, a specialty chemical and pest control business. Mr. Lombardi was employed by Cannondale Sports Group, a sporting goods and apparel manufacturing company, as Chief Operating Officer from August 2008 to October 2009 and as Senior Vice President and Chief Financial Officer from March 2004 to August 2008. From 2000 to 2004, Mr. Lombardi served in various roles at Gerber Scientific Inc., including Vice President and Chief Financial Officer of Gerber Scientific Inc.’s Gerber Coburn Optical Division and Director of Financial Planning and Analysis of Gerber Scientific Inc. Mr. Lombardi was also previously employed by Emerson Electric, Scovill Fasteners, Inc. and Go/Dan Industries. Mr. Lombardi currently serves as Chair of the Audit Committee on the board of ACCO Brands Corporation. Mr. Lombardi received a B.S. from Springfield College and an M.B.A. from American International College and has been a licensed CPA. |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Christine Sacco Chief Financial Officer | Age: 48 | | | CAREER HIGHLIGHTS: Christine Sacco was appointed to the position of Chief Financial Officer for the Company in September 2016. Ms. Sacco joined the Company from Boulder Brands, Inc., a health and wellness food manufacturer, where she served as the Chief Financial Officer and Treasurer from January 2012 to January 2016 and Vice President and Controller from January 2008 to January 2012, including Principal Accounting Officer from January 2011 to March 2012. From October 2002 until January 2008, she held positions of increasing financial responsibility with Alpharma, Inc., a global specialty pharma company, where she last held the position of Vice President, Treasurer. Ms. Sacco began her career with Ernst & Young and worked for five years in the Audit and Assurance group. She holds a B.S. in accounting from St. Thomas Aquinas College and has been a licensed CPA. |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| William C. P’Pool Senior Vice President, General Counsel and Corporate Secretary | Age: 57 | | | CAREER HIGHLIGHTS: William C. P’Pool was appointed to the position of Senior Vice President, General Counsel and Corporate Secretary for the Company in November 2016. From June 2004 to April 2015, Mr. P’Pool served in progressive leadership roles at Mead Johnson Nutrition Company, a nutritional products company, the last being Senior Vice President, General Counsel and Corporate Secretary. From May 2001 to June 2004, Mr. P’Pool served as a Senior Counsel and Director of Legal Services at Yum! Brands, Inc. From 1991 to 2001, he served in legal roles of increasing responsibility at GrafTech International and Service Merchandise Company, among others. He earned a B.S. in business from Murray State University and a J.D. from the University of Kentucky. |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 50 |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Adel Mekhail Executive Vice President, Marketing & Sales | Age: 62 | | | CAREER HIGHLIGHTS: Adel Mekhail was appointed to the position of Executive Vice President of Marketing & Sales for the Company in May 2019. From April 2017 to July 2018, Mr. Mekhail served as Vice President, Americas at Edgewell Personal Care Company, a personal care products company, and from July 2015 to April 2017 he served as Vice President and General Manager, Private Brands Group and Vice President, Latin America. From November 2013 to July 2015, Mr. Mekhail served as Vice President, Asia Pacific at Energizer. He held other increasingly responsible marketing roles at Energizer from 2003 to 2013. Mr. Mekhail also served in sales and marketing roles for Pfizer and Warner Lambert from 1996 to 2003. In 2000, he moved from Australia to the United States for Pfizer. Mr. Mekhail earned his BS in Pharmaceutical Sciences from Tanta University in Egypt and his MBA from RMIT University in Melbourne, Australia. |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Jeffrey Zerillo Executive Vice President, Operations | Age: 62 | | | CAREER HIGHLIGHTS: Jeffrey Zerillo was appointed to the position of Senior Vice President, Operations for the Company in April 2018. Mr. Zerillo joined the Company from Teva Pharmaceuticals, a pharmaceutical company, where he served as Vice President, Supply Chain Management for the America’s Region from 2016 to 2018. He brings experience managing complex supply chains in pharmaceuticals, biologics and medical devices from companies including Actavis/Allergan, a pharmaceutical company, from 2014 to 2016, Purdue Pharma from 1995 to 2013, Tura L.P. from 1994 to 1995 and Instrumentation Laboratories from 1988 to 1994. He earned a B.S. in Business Management- Production Operations from York College of Pennsylvania and an Executive Certificate from Sloan School of Business. |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Prestige Consumer Healthcare Inc. 2023 Proxy Statement | 51 |
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
SUMMARY COMPENSATION TABLE SUMMARY COMPENSATION TABLE The following table includes information regarding the compensation paid or awarded to the named executive officers listed below during our fiscal years ended March 31, 2023, 2022 and 2021. We have no applicable qualified pension or deferred compensation plans and, therefore, have omitted the column regarding compensation under such plans.
MEMBERS OF THE 2023 COMPENSATION AND TALENT MANAGEMENT COMMITTEE
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | | Ronald M. Lombardi Chairman, President, and Chief Executive Officer | 2023 | 1,002,322 | | 3,600,031 | 0 | 934,000 | 46,756(4) | 5,583,109 | | | 2022 | 937,321 | | 3,299,970 | 0 | 1,750,000 | 44,226(4) | 6,031,517 | | | 2021 | 887,739 | | 3,127,475 | 0 | 1,085,000 | 47,819(4) | 5,148,033 | | Christine Sacco Chief Financial Officer | 2023 | 605,809 | | 666,712 | 333,327 | 339,042 | 14,062(5) | 1,958,952 | | | 2022 | 565,809 | | 633,298 | 316,669 | 682,410 | 13,219(5) | 2,211,405 | | | 2021 | 530,704 | | 529,294 | 261,670 | 429,624 | 13,020(5) | 1,764,312 | | Adel Mekhail Executive Vice President, Sales and Marketing | 2023 | 503,543 | | 333,356 | 166,663 | 280,200 | 14,197(5) | 1,297,959 | | | 2022 | 473,308 | | 316,694 | 158,335 | 485,040 | 13,117(5) | 1,446,494 | | | 2021 | 447,315 | | 296,712 | 146,672 | 299,676 | 12,960(5) | 1,203,335 | | William C. P’Pool Senior Vice President, General Counsel and | 2023 | 516,314 | | 346,647 | 173,324 | 240,038 | 13,623(5) | 1,289,946 | | | 2022 | 485,226 | | 332,032 | 166,002 | 456,918 | 13,196(5) | 1,453,374 | | | 2021 | 464,985 | | 316,888 | 156,668 | 259,675 | 12,962(5) | 1,211,178 | | Jeffrey Zerillo Senior Vice President, Operations | 2023 | 352,365 | | 233,349 | 116,663 | 130,760 | 13,781(5) | 846,918 | | | 2022 | 337,248 | | 225,374 | 112,661 | 230,480 | 13,156(5) | 918,885 | | | 2021 | 321,969 | | 215,762 | 106,668 | 143,871 | 10,129(5) | 798,399 |
Pay Versus Performance Table
Pay Versus Performance Table The following table sets forth information regarding the Company’s Compensation Actually Paid and certain other Company financial information for fiscal years 2023, 2022 and 2021.
Pay Versus Performance Table
| Year | Summary Compensation Table Total for CEO(1) | Compensation Actually Paid to CEO(2) | Average Summary Compensation Table Total for non-CEO NEOs(1)(3) | Average Compensation Actually Paid to non-CEO NEOs(2)(3) | Value of Initial Fixed $100 Investment Based on: | | Net Income (in millions)(6) | | Adjusted EBITDA (in millions)(7) | | | | | | | Total Shareholder Return(4) | Peer Group Total Shareholder Return(4)(5) | | | | | 2023 | $5,583,109 | $9,544,538 | $1,348,444 | $1,900,028 | $170.74 | $130.75 | -$ | 82,306 | $378.1 | | 2022 | $6,031,517 | $9,906,721 | $1,507,548 | $2,034,984 | $144.33 | $156.72 | | 205,381 | $367.7 | | 2021 | $5,148,033 | $6,117,711 | $1,244,311 | $1,512,287 | $120.18 | $160.51 | | 164,682 | $331.3 |
Pay Versus Performance Table
(1) Represents the total compensation for Mr. Lombardi, our CEO, and the average total compensation for our non-CEO NEOs from the Summary Compensation Table for 2023, 2022, and 2021. (2) Represents the total compensation from the Summary Compensation Table for our CEO and the average total compensation for our non-CEO NEOs during 2023, 2022, and 2021 as adjusted to reflect changes in the fair value of outstanding stock and option awards in accordance with Item 402(v) of Regulation S-K. The table below details the adjustments: (3) Our non-CEO NEOs include the following individuals for each of 2023, 2022 and 2021: Messrs. Mekhail, P’Pool, Zerillo and Ms. Sacco. (4) Total Shareholder Return for each fiscal year assumes $100 was invested at the close of March 31, 2020 in Prestige and the Peer Group and that any dividends were reinvested when and as paid. (5) The Peer Group reflects the Company’s peer group that is used for purposes of compensation benchmarking, as defined in the Compensation Discussion and Analysis. (6) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. Represents the most important financial performance measure not otherwise reported in the above table that is used by the Company to link actual compensation paid during the most recent fiscal year to the Company’s performance, as required pursuant to Item 402(v) of Regulation S-K. Adjusted EBITDA is defined as net income plus depreciation and amortization, interest expense, integration, transition, purchase accounting, legal and various other costs associated with acquisitions and divestitures, tradename impairment and certain tax adjustments. This metric and definition is consistent with Adjusted EBITDA used in the Annual Incentive Plan, as described in the Compensation Discussion and Analysis.
Pay Versus Performance Table
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Pay Versus Performance Table
| Reconciliation of Summary Compensation Totals and Compensation Actually Paid | | 2023 | | 2022 | | 2021 | | | | | CEO | Average Non-CEO NEOs | CEO | Average Non-CEO NEOs | CEO | Average Non-CEO NEOs | | Summary Compensation Table Total | | $5,583,109 | $1,348,444 | $6,031,517 | $1,507,548 | $5,148,033 | $1,244,311 | | - Stock and Option Awards(a) | | $3,600,031 | $592,510 | $3,299,970 | $565,266 | $3,127,475 | $507,589 | | Equity Award Adjustments(b) | + Year End Fair Value of Equity Awards Granted in the Applicable Year | $4,139,342 | $718,300 | $3,940,907 | $735,436 | $3,390,325 | $583,912 | | | + Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested at Year End | $3,171,807 | $365,822 | $3,085,508 | $315,689 | $582,640 | $151,858 | | | + Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | $250,311 | $59,972 | $148,759 | $41,577 | $124,187 | $39,795 | | Compensation Actually Paid | | $9,544,538 | $1,900,028 | $9,906,721 | $2,034,984 | $6,117,711 | $1,512,287 |
Pay Versus Performance Table
(a) Represents the aggregate grant date fair value of all equity awards reported in the Stock Awards and Stock Option Awards columns in the Summary Compensation Table for the applicable year. (b) Represents the sum of the fair value of all equity awards granted during the covered fiscal year, measured at the end of the year plus the change in fair value of unvested awards granted in prior fiscal years, measured at the end of the covered fiscal year (or, for awards that vested in the covered fiscal year, as of the vesting date). The valuation methodology used to calculate fair values is consistent with those used at the time of grant. Required Tabular Disclosure of Most Important Measures to Determine FY2023 AIP As described in greater detail in our Compensation Discussion and Analysis (“CD&A”) within the sections titled “Pay for Performance Alignment” and “Annual Incentive Plan”, the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our stockholders. The three items listed below represent the most important metrics we used to determine AIP for FY2023.
Pay Versus Performance Table
| Most Important | | Performance Measures | | > Net Sales | | > Adjusted EBITDA | | > Free Cash Flow |
Pay Versus Performance Table
We believe in the importance of delivering significant value to our stockholders and linking executive pay to our performance. We believe that Adjusted EBITDA (which is a metric used for purposes of our Annual Incentive Plan — see additional details regarding adjustments in the section titled “Compensation Discussion and Analysis — Annual Incentive Plan”) represents the most important financial performance measure linking NEO CAP to Company performance because it is indicative of our profitability and impacts our stock price, and accordingly, EBITDA is the “Company-Selected Measure” that is required to be disclosed in accordance with the PvP Rules. We also view Free Cash Flow as an instrumental measure of the Company’s performance as it drives our capital allocation strategy.
Pay Versus Performance Table
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Pay Versus Performance Table
Relationship Between Compensation and Financial Performance The table below shows the relationship between the compensation actually paid to the CEO and average non-CEO NEOs relative to net income and adjusted EBITDA for 2023, 2022, and 2021.
Pay vs TSR
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Mr. Byom | 120,000 | 150,000 | 275,500 | | Ms. Clark | 107,008 | 150,000 | 257,008 | | Mr. Coughlin | 110,000 | 150,000 | 260,000 | | Ms. Hopkins | 90,000 | 150,000 | 240,000 | | Mr. Ricciardi | 90,000 | 150,000 | 240,000 | | Ms. Zier | 107,500 | 150,000 | 257,500 |