DEF 14A of Floor & Decor Holdings, Inc.
Filed Mar 19, 2024 · FY20230001104659-24-035904
Board of Director Nominees
Board of Director Nominees The following table provides summary information about each director nominee. Each director nominee is standing for election for a one-year term or until his or her successor is duly elected and qualified. All of the director nominees are current directors.
Board of Director Nominees
| Name | Age | Director Since | Principal Occupation | Committees | | Norman Axelrod | 71 | November 2010 | Former CEO, Linens ‘n Things | Compensation Committee | | William Giles | 64 | April 2021 | Former CFO, AutoZone | Audit Committee | | Dwight James | 50 | September 2021 | Senior Vice President, Delta Air Lines, Inc. | Nominating and Corporate Governance Committee | | Melissa Kersey | 49 | May 2023 | EVP & CHRO, Tractor Supply Company | Compensation Committee | | Ryan Marshall | 49 | January 2021 | CEO, PulteGroup, Inc. | Audit Committee | | Peter Starrett | 76 | November 2010 | Former President, Warner Bros. Studio Stores Worldwide | Compensation Committee | | Richard Sullivan | 67 | April 2017 | CEO, PGA TOUR Superstore | Audit Committee | | Thomas Taylor | 58 | December 2012 | CEO of Floor & Decor Holdings, Inc. | None | | Felicia Thornton | 60 | April 2017 | Former Interim CEO, 99 Cents Only Stores LLC | Nominating and Corporate Governance Committee | | George Vincent West | 69 | 2000 | Founder, Floor & Decor | None | | Charles Young | 55 | January 2021 | President and Chief Operating Officer of Invitation Homes Inc. | Nominating and Corporate Governance Committee |
Board Structure and the Nominees
Board Structure and the Nominees The Board is currently comprised of eleven directors, Norman Axelrod, William Giles, Dwight James, Melissa Kersey, Ryan Marshall, Peter Starrett, Richard Sullivan, Thomas Taylor, Felicia Thornton, George Vincent West and Charles Young (the “Directors”). Our Board was previously classified. Pursuant to an amendment to our Charter approved at our 2021 annual meeting of stockholders, beginning with this Annual Meeting, all of our directors will be subject to annual election and shall continue to hold office until their respective successors have been duly elected and qualified or until their earlier resignation or removal. Upon the expiration of the term of a director, the nominating and corporate governance committee of the Board (the “Nominating Committee”) will recommend to the Board for its approval a director nominee to be nominated for election for a one-year term at the annual meeting of stockholders in the year in which the term of such of director expires. Until the Board is completely declassified, any director appointed to the Board to fill a vacancy will hold office for the remaining term of his or her predecessor; thereafter, any director so appointed will hold office until the next annual meeting of stockholders. Our directors have a balance of tenure and age, which provides our Board with an effective mix of experience and perspective, as shown in the chart and biographies below: The terms of all Directors will expire at the Annual Meeting. In connection with the Annual Meeting, the Board, upon the recommendation of the Nominating Committee, has nominated each Director (in such capacity, a “Nominee”) for reelection as a director, each for a one-year term expiring at our 2025 annual meeting of stockholders once their respective successors have been duly elected and qualified or until their earlier resignation or removal.
Director Resignation Policy
Director Resignation Policy In accordance with our Corporate Governance Guidelines, in an uncontested election of directors, any Nominee who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will, within five days following the certification of the stockholder vote, tender his or her written resignation to the chairman of the Board for consideration by the Nominating Committee. As used herein, an “uncontested election of directors” is an election in which the number of Nominees is not greater than the number of Board seats open for election. The Nominating Committee will then review the director’s continuation on the Board and recommend to the Board whether the Board should accept such tendered resignation. The Board, giving due consideration to the best interests of the Company and our stockholders, will then evaluate the relevant facts and circumstances in connection with such director’s resignation, and make a decision, within 90 days following the certification of the stockholder vote, on whether to accept the tendered resignation. The Board will then promptly disclose publicly its decision and, if applicable, the reasons for rejecting the tendered resignation. Set forth below is information concerning our directors, and the key experience, qualifications and skills they bring to the Board as well as an overview of our Board’s diversity in demographic makeup. Our Board collectively leverages the diverse backgrounds of our directors and their strengths and experiences in many areas including those described below.
Board Skills & Experience and Demographic Matrix
Board Skills & Experience and Demographic Matrix The table below summarizes the specific qualifications, attributes, skills and experience of each director or director nominee that led our board of directors to conclude that the nominee is qualified to serve on our board of directors. While each director or nominee is generally knowledgeable in each of these areas, an “X” in the chart below indicates that the item is a specific qualification, attribute, skill or experience that the individual brings to our board. The lack of an “X” for a particular item does not mean that the individual does not possess the qualification, attribute, skill or experience.
Board Skills & Experience and Demographic Matrix
| Skills & Experience | Norman Axelrod | William Giles | Dwight James | Melissa Kersey | Ryan Marshall | Richard Sullivan | Peter M. Starrett | Thomas Taylor | Felicia Thornton | George Vincent West | Charles Young | | Audit & Financial Expertise | | X | X | | X | X | X | | X | X | | | Corporate Strategy & Business Development | X | X | X | X | X | X | X | X | X | X | X | | Corporate Governance | | | X | X | X | | X | | X | | X | | Ethics/Social Responsibility Oversight | | X | | X | X | | | | X | | | | Consumer Goods | X | X | X | X | | X | X | X | X | X | | | Retail Chains | X | X | X | X | | X | X | X | X | X | | | CEO | X | | X | | X | X | X | X | X | X | | | Mergers & Acquisitions | | X | X | | X | | | | X | | X | | Risk Oversight | | X | | | X | | | | X | | | | Company Founder | | | | | | | | | | X | | | Real Estate | X | X | | | X | | X | X | X | X | X | | Home Improvement | | | X | | | X | | X | | X | | | High Growth | X | | X | X | | X | X | X | | X | X | | Digital/Omni-Channel | | X | X | | | X | X | | X | | | | Human Capital/Compensation Oversight | X | | X | X | X | X | X | X | X | X | X | | International | | X | X | X | | | X | X | X | | | | Commercial or B-to-B | | X | | | X | | | X | X | X | X | | Years on Board | 13 | 3 | 3 | 1 | 3 | 7 | 13 | 11 | 7 | 24 | 3 | | Demographic Background | | | | | | | | | | | | | Gender | | | | | | | | | | | | | Male | X | X | X | | X | X | X | X | | X | X | | Female | | | | X | | | | | X | | | | Age | 71 | 64 | 50 | 49 | 49 | 67 | 76 | 58 | 60 | 69 | 55 | | Race/Ethnicity | | | | | | | | | | | | | African American/Black | | | X | | | | | | | | X | | Asian, Hawaiian, or Pacific Islander | | | | | | | | | | | | | White/Caucasian | X | X | | X | X | X | X | X | | X | |
Board Skills & Experience and Demographic Matrix
| Skills & Experience | Norman Axelrod | William Giles | Dwight James | Melissa Kersey | Ryan Marshall | Richard Sullivan | Peter M. Starrett | Thomas Taylor | Felicia Thornton | George Vincent West | Charles Young | | Hispanic/Latino | | | | | | | | | X | | | | Number of Public Boards | 2 | 2 | 2 | 1 | 2 | 1 | 2 | 2 | 2 | 1 | 1 |
The Nominees
The Nominees Norman H. Axelrod, 71, has served as our Chairman since December 2011 and as a member of our Board since November 2010. Beginning in 1988, Mr. Axelrod served as Chief Executive Officer and a member of the board of directors of Linens ‘n Things, Inc., a retailer of home textiles, housewares and decorative home accessories, was appointed as Chairman of its board of directors in 1997, and served in such capacities until its acquisition in February 2006. Mr. Axelrod also serves on the boards of directors of the parent entities of Guitar Center, Inc., a musical instruments retailer, The Neiman Marcus Group LLC, a luxury retailer, and 99 Cents Only Stores LLC, a deep-discount retailer. Mr. Axelrod served on the board of directors of the parent entity of Smart & Final Stores, Inc., a warehouse-style food and supply retailer, until 2019. Mr. Axelrod was also appointed Chairman of the board of directors of 99 Cents Only Stores LLC in February 2018 and has previously served as the Chairman of the boards of directors of GNC Holdings, Inc., a specialty retailer of health and wellness products, National Bedding Company LLC, a mattress and bedding product manufacturer, and Simmons Company, a mattress and bedding product manufacturer, and as a member of the boards of directors of Jaclyn, Inc., a handbags and apparel company, Reebok International Ltd., a leading worldwide designer and marketer of sports, fitness and casual footwear, apparel and equipment, and Maidenform Brands, Inc., an intimate apparel retailer. Mr. Axelrod has provided consulting services to certain entities related to Ares Management Corporation. Mr. Axelrod received a B.S. in Management and Marketing from Lehigh University and an M.B.A. from New York University. Mr. Axelrod’s vast experience, including as a CEO and a member of the board of other retailers, led to the conclusion that he should serve as a member of our Board. William T. Giles, 64, has served as a member of our Board since April 2021. Mr. Giles served as Chief Financial Officer and Executive Vice President — Finance, Information Technology and Store Development, Customer Satisfaction for AutoZone, Inc. (“AutoZone”) from 2007 to 2020. Mr. Giles joined AutoZone in 2006 as Chief Financial Officer and Executive Vice President Finance. From 1991 to May 2006, Mr. Giles held several positions with Linens ‘n Things, Inc., a retailer of home textiles, housewares and decorative home accessories, most recently as the Executive Vice President and Chief Financial Officer. Prior to 1991, Mr. Giles was with Melville, Inc. and PricewaterhouseCoopers. Mr. Giles currently serves on the board of directors for Brinker International, Constellation Brands and Autism Speaks. Mr. Giles is also a member of the Alfred University Board of Trustees. Mr. Giles received a Bachelor of Science in Accounting and Management from Alfred University. Mr. Giles’ demonstrated financial proficiency and business leadership in the retail products industry, his skills as chief financial officer of a public company and his ability to provide the Board unique insights into the strategic, governance and financial issues facing public companies in the retail industry led to the conclusion that he should serve as a member of our Board. Dwight James, 50, has served as a member of our Board since September 2021. Mr. James is a Senior Vice President at Delta Air Lines, responsible for the company’s Customer Engagement & Loyalty and serves as the CEO of Delta Vacations, a wholly owned global subsidiary of Delta. Since 2009, he has held several senior executive roles at Delta, which included leading pricing and revenue management, where he led the development and execution of the company’s global revenue generating strategies. Mr. James also led Delta’s international franchise where he was responsible for the company’s international revenue and profit performance. He also served as the company’s Chief Economist and lead Revenue Forecaster after beginning his career at Delta as an executive in the Corporate Strategy group. From August 2002 to September 2007, Mr. James held executive roles with The Home Depot in Strategy & Business Development and within the At Home Services division. From 1997 to 2002, Mr. James was a management consultant with Deloitte Consulting in the Mergers & Acquisitions and Corporate Restructuring practices. Mr. James serves on the Advisory Board Council of Cool Girls, Inc., and in addition to his community work, he is on the Executive Committee of the Diversity, Equity & Inclusion Council at Delta. Mr. James also serves on the Board of Directors of Wheels Up. Mr. James earned his B.A. in Business Administration from Morehouse College and MBA from Duke University — The Fuqua School of Business. Mr. James’ leadership experience, which has included overseeing digital strategies, customer loyalty and engagement, and strategic growth, led to the conclusion that he should serve as a member of our Board. Melissa Kersey, 49, has served as a member of our Board since May 2023. Ms. Kersey is the Executive Vice President and Chief Human Resources Officer at Tractor Supply Company, the largest rural lifestyle retailer in the United States. In this role, she oversees all Human Resources strategies for the Company, including compensation and benefits, recruiting, talent management, leadership development, and training, along with the Company’s diversity and inclusion initiatives. Before joining Tractor Supply in June 2020, she served as Senior Vice President and Chief People Officer for McDonald’s USA from October 2017 to July 2020. She provided executive-level leadership to expand and build people capabilities, create and drive a high-performing culture and strengthen the business alignment of the human resources function. Before joining McDonald’s in 2017, Kersey held several executive-level roles with Walmart from 2008 to 2017, including Senior Vice President of Global HR Transformation and People Services, Senior Vice President and Chief HR Officer of US Stores, and Senior Vice President of Learning and HR Strategy. Before Walmart, Kersey spent eight years with Alltel and four years with Target Corporation in Operations, Distribution, Human Resources, and Technology roles. She holds a Bachelor of Science in Business with a communications minor from Emporia State University. Her experience in human capital management, including talent development and diversity and inclusion initiatives, as well as her experience in high-growth retail, led to the conclusion that she should serve as a member of our Board. Ryan Marshall, 49, has served as a member of our Board since January 2021. Mr. Marshall has served as the President and Chief Executive Officer of PulteGroup, Inc. (“Pulte”) since September 2016. Prior to becoming the Chief Executive Officer and President of Pulte, Mr. Marshall served as the President of Pulte since February 2016 and had the responsibility for Pulte’s homebuilding operations and its marketing and strategy departments. Prior to being named President, Mr. Marshall served as Pulte’s Executive Vice President of Homebuilding Operations. Other previous roles with Pulte included Area President for Pulte’s Southeast Area, Area President for Florida, Division President in both South Florida and Orlando and Area Vice President of Finance. In those roles, he managed various financial and operating functions including financial reporting, land acquisition and strategic market risk and opportunity analysis. Mr. Marshall’s strategic growth experience, his financial expertise, his experience with home construction and ability to contribute to our commercial business and his experience as a public company CEO led to the conclusion that he should serve as a member of our Board.
The Nominees
Peter M. Starrett, 76, has served as a member of our Board since November 2010. In 1998, Mr. Starrett founded Peter Starrett Associates, a retail advisory firm, and currently serves as its President. In connection with his activities at Peter Starrett Associates, Mr. Starrett also provides consulting services to certain Freeman Spogli affiliated entities. From 1990 to 1998, Mr. Starrett served as the President of Warner Bros. Studio Stores Worldwide, a specialty retailer. Previously, he was Chairman and Chief Executive Officer of The Children’s Place, a specialty retailer. Prior to that, Mr. Starrett held senior executive positions at both Federated Department Stores and May Department Stores, each a department store retailer. Mr. Starrett is Chairman of the board of directors of Boot Barn, Inc., a specialty apparel and footwear retailer. From May to November of 2012, Mr. Starrett served as Boot Barn, Inc.’s interim Chief Executive Officer. In addition, he is a member of the board of directors of several private companies. Previously, he was also the Chairman of the board of directors of Pacific Sunwear, Inc. and served on the board of directors of hhgregg, Inc., an electronics and appliances retailer. Mr. Starrett received a B.S.B.A. from the University of Denver and an M.B.A. from Harvard Business School. Mr. Starrett’s extensive experience as an officer and a director of both public and private companies in the retail industry led to the conclusion that he should serve as a member of our Board. Richard L. Sullivan, 67, has served as a member of our Board since April 2017. Mr. Sullivan was the President and CEO of the parent entity of PGA TOUR Superstore, a nationwide specialty golf retailer, from 2009 to 2022, and has been a director of such entity since 2014. Previously, Mr. Sullivan was the Chief Marketing Officer for Home Depot Inc. (“Home Depot”) from 1992 to 2002. From 2002 to 2008, Mr. Sullivan served as the Executive Vice President and Chief Marketing Officer overseeing sales, marketing and other business-related functions for the Atlanta Falcons and team owner Arthur Blank. Mr. Sullivan was elected Vice Chairman of the board of directors of the National Golf Foundation in January 2016 and serves as a member of its compensation committee. He received his B.S. in Accounting from Roger Williams University. Mr. Sullivan’s business experience, including in home improvement and specialty retailers, led to the conclusion that he should serve as a member of our Board. Thomas V. Taylor, Jr., 58, has served as our Chief Executive Officer and a member of our Board since December 2012. Prior to joining us, Mr. Taylor began his career at age 16 in 1983 at a Miami Home Depot store. He worked his way up through various manager, district manager, vice president, president, and senior vice president roles to eventually serve as the Executive Vice President of Operations with responsibility for all 2,200 Home Depot stores and then the Executive Vice President of Merchandising and Marketing, again for all stores. After leaving Home Depot in 2006, for the next six years, Mr. Taylor was a Managing Director at Sun Capital Partners. During his tenure, he was a board member for over twenty portfolio companies in the United States and Europe. Mr. Taylor currently serves on the board of directors of National Vision Holdings Inc., an optical retailer, and Cooper’s Hawk, a differentiated wine club and restaurant concept. Mr. Taylor’s significant experience as a board member and his expertise in the home improvement retail industry led to the conclusion that he should serve as a member of our Board. Felicia D. Thornton, 60, has served as a member of our Board since April 2017. Ms. Thornton served as Interim Chief Executive Officer from June 2019 to March 2020 and Chief Financial Officer and Treasurer for 99 Cents Only Stores LLC, a deep-discount retailer, from November 2015 to August 2018. In February 2018, Ms. Thornton was appointed to the board of directors for 99 Cents Only Stores LLC (“99 Cents Only”) where she has served as Chair of the board of directors since March 2023 and Chair of the audit committee since February 2021, and previously served as Vice Chair of the board of directors from February 2018 through February 2023 and Chair of the 99 Cents Only audit committee from November 2018 to April 2019. In September 2020, Ms. Thornton was appointed to the board of directors and audit committee of Pactiv Evergreen Inc., a food and beverage packaging company. Ms. Thornton is a member of the board of directors and Chair of the audit committee of Covergint Technologies and Coolsys, both private companies. Ms. Thornton served on the board of directors and audit committee of Ares Acquisition Corp., a special purpose acquisition company, from February 2021 to December 2023. In April 2023, Ms. Thornton was appointed to the board of directors and Chair of the audit committee effective of Ares Acquisition Corporation II, a special purpose acquisition company. Previously, Ms. Thornton served as Co-Chief Executive Officer, President and Chief Operating Officer for DeMoulas Super Market, Inc., (“DeMoulas”), a supermarket chain, from June 2014 to December 2014 and as the Chief Executive Officer of Knowledge Universe U.S., a private childhood education company, from 2006 to 2011. Ms. Thornton served as Chief Financial Officer and led overall strategy for Albertsons, a grocery and drugstore company, from 2001 to 2006. Ms. Thornton served in a variety of executive strategic and financial roles from 1992 to 2000 for Ralphs Grocery Company, Inc., a grocery store chain, and for Fred Meyer, a retail supermarket company, both of which eventually became part of The Kroger Company, a global retailer of grocery, multi-department, discount, convenience and jewelry stores, where Ms. Thornton served as Group Vice President responsible for retail operations. Ms. Thornton has served as a member of the boards of directors of public and private companies, including Nordstrom, Inc., a luxury retailer, from November 2010 to May 2012 and for Knowledge Universe Education, Inc. from November 2006 to May 2012. Ms. Thornton also served as an Advisor to the Special Committee of the board of directors of DeMoulas from April 2014 to June 2014. Ms. Thornton is a member of the Latino Corporate Directors Association and is a National Association of Corporate Directors Fellow. Ms. Thornton received a B.S. in Economics from Santa Clara University and an M.B.A. from the University of Southern California. Ms. Thornton’s extensive executive experience in retail, and particularly in large high-growth multi-unit retailers, led to the conclusion that she should serve as a member of our Board. George Vincent West, 69, has served on our Board since he founded us in 2000. He served as our Chief Executive Officer from 2000 to 2002, as Co-Chief Executive Officer from 2008 to 2010 and as Chief Executive Officer from 2010 through 2012. Currently, Mr. West serves as the Vice Chairman of our Board, a position that he has held since December 2012. Mr. West began his business career starting a successful retail glassware business in Atlanta. He was eventually recruited to work for his family building materials business, West Building Materials, which operated in five southeastern states, and eventually became its President. Mr. West also developed and sold a multistate billboard company and has developed several real estate projects across the state of Georgia, the most recent being Utana Bluffs, a boutique mountain home community in the north Georgia Mountains. Mr. West’s most recent venture is Mountain & Marsh Hospitality Group, which offers accommodations in the North Georgia Mountains and the Georgia Coast. Mr. West currently
The Nominees
serves as Chair of the Lamar Dodd School of Art Board of Visitors, Mr. West also serves on the Board of Directors of The Savannah Music Festival and is the Vice Chair of the Board of Trustees of the Telfair Art Museum. Mr. West is a member of the Executive Advisory Council for the Emory Brain Health Center. Mr. West is also a member of the University of Georgia Terry School of Business Entrepreneurship Advisory Board. Mr. West graduated from the Terry College of Business at the University of Georgia in 1977. Mr. West’s experience and intimate knowledge of the Company led to the conclusion that he should serve as a member of our Board. Charles Young, 55, has served as a member of our Board since January 2021. Mr. Young was promoted to President and Chief Operating Officer of Invitation Homes in 2023, after having served as Executive Vice President and Chief Operating Officer from 2017 to 2023. From 2015 until Invitation Homes completed its merger with Starwood Waypoint Homes (“SWH”), Mr. Young served in a number of senior roles with SWH and its predecessor. Earlier in his career, Mr. Young worked for Goldman, Sachs & Co. in its Real Estate Principal Investment Area (Whitehall) and Goldman’s Investment Banking Division, in mergers and acquisitions. He also has prior experience in real estate development and diversity consulting. Before starting his career in real estate and investment banking, Mr. Young spent several years as a professional football player in the National Football League and the World League of American Football. He is a member of the Stanford Board of Trustees and currently serves as a member of the board of directors of Federal Home Loan Bank of Chicago. He was also a founding member of the LEARN Charter School Network. He received his B.A. in Economics from Stanford University and an M.B.A. from Stanford’s Graduate School of Business. Mr. Young’s operating experience, including in a high-growth public company, his experience in mergers and acquisitions and his real estate expertise led to the conclusion that he should serve as a member of our Board. THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF THE ELEVEN NOMINEES AS DIRECTORS.
Compensation Philosophy and Objectives
| Core Principles | | | Simplicity and Transparency | Base salary, incentive compensation and equity awards should be easy for executives and for our shareholders to understand. | | Linked to our Strategy | Our pay design should create a direct bridge to our strategy, and clearly reflect our key short- and long-term business objectives. | | Attractive Compensation for Top Talent | Pay quantums and design should be compelling enough to attract the best talent we can to support the successful execution of our strategies. | | Pay for Performance | Compensation should be paid only when financial performance levels achieved align with the strategic and financial priorities set by the Board. | | Appropriate Risk Orientation | The more senior a role, the more the total mix of that role’s compensation should be “at risk.” However, our compensation programs are designed in a manner that is intended to provide for performance-based compensation that is both challenging and achievable, and that does not encourage excessive or unnecessary risk-taking. |
Compensation Philosophy and Objectives
| What We Do | What We Don’t Do | | ✓ Pay-for-Performance: Majority of fiscal year pay is performance-based and not guaranteed ✓ Annual Compensation Risk Review: Our Compensation Committee annually assesses risk in compensation programs associated with regulatory, stockholder and market changes ✓ Share Ownership Guidelines: We maintain meaningful share ownership guidelines ✓ Annual Assessment of Compensation Program: Our Compensation Committee annually assesses the design and alignment of our incentive plans in relation to performance goals, business strategy, organizational priorities and shareholder interests ✓ Maximum Payouts: We limit both short-term and long-term incentive payouts as a percentage of target awards ✓ Clawback Policies: All cash-based incentive or performance-based equity compensation granted to our NEOs is subject to our Clawback Policies | X No Excise Tax Gross-ups: The Company does not provide any excise tax gross-up payments in connection with a change in control X No Tax Gross-ups for Perquisites: The Company does not provide tax gross-ups to NEOs for the perquisites we provide X No Hedging or Pledging: NEOs are prohibited from engaging in hedging transactions, pledging Company stock as collateral and similar arrangements with respect to the Company’s securities X No Problematic Option Practices: The Company does not have a practice of granting discounted stock options, extending the original option term, or repricing or exchanging underwater options |
Elements of Our Executive Compensation Program
Annual Cash Incentive Bonuses. Our NEOs are eligible to receive annual cash incentives. We consider annual cash incentive bonuses to be “at-risk” compensation. As “at-risk” compensation, we increase the size of the target incentive as a percentage of base compensation, proportionate to each NEO’s position and responsibilities. The annual incentives are intended to reward our NEOs for achieving target operating income and net sales objectives established by the Compensation Committee at the beginning of the year. The maximum annual cash incentive bonus payable pursuant to the 2023 Annual Performance Bonus Program (the “2023 Bonus Program”) is 200% of the NEO’s applicable target bonus. For Fiscal 2023 under the 2023 Bonus Program, our NEOs were eligible to receive an annual incentive with a target amount equal to a percentage of their respective full annual base salary earned in the fiscal year, as follows:
Elements of Our Executive Compensation Program
| Name | Target 2023 Bonus as a % of Base Salary | Target 2023 Bonus ($) | | Thomas V. Taylor | 125% | $1,325,000 | | Bryan H. Langley | 60% | $240,000 | | Trevor S. Lang | 70% | $437,500 | | David V. Christopherson | 65% | $308,750 | | Brian K. Robbins | 65% | $302,250 |
Elements of Our Executive Compensation Program
The goals were based on the Fiscal 2023 business outlook and plan. The Fiscal 2023 business outlook included our focus on store expansion and increased overall sales. However, during Fiscal 2023, operating income was impacted by macroeconomic pressures outside of the Company’s control, including inflation and increased interest rates. While the net sales performance target was nearly achieved, the relatively low weighting of net sales against the operating income performance metric meant that achievement of above-threshold performance for that metric was not sufficient to overcome below-threshold performance with respect to the operating income metric. Based on our achievement of 92.4% of our net sales target and 75.9% of our operating income target (adjusted in accordance with the 2023 Bonus Program to reflect the impact of costs such as earn-out liabilities and other transaction costs related to our acquisitions and costs related to employer taxes for stock-based compensation programs), the thresholds for payout under the 2023 Bonus Program were not achieved, resulting in no payout to the NEOs under the 2023 Bonus Program as reflected below.
Elements of Our Executive Compensation Program
| Performance Metric | Target ($s in millions) | Actual ($s in millions) | Percentage of Target (%) | Weighting (%) | Payout (%) | | Net Sales | $4,778.1 | $4,413.9 | 92.4% | 20% | 0.0% | | Operating Income* | $431.0 | $327.1 | 75.9% | 80% | 0.0% |
Elements of Our Executive Compensation Program
Equity Incentive Awards 2017 Stock Incentive Plan In connection with our 2017 initial public offering (“IPO”), our Board adopted and our stockholders approved the Floor & Decor Holdings, Inc. 2017 Stock Incentive Plan, as amended (the “2017 Plan”), pursuant to which we may grant incentive stock options, non-qualified stock options, restricted stock, other stock-based awards and performance-based cash awards to our employees, including the NEOs, which may be subject to such service-based, performance-based or other vesting factors or criteria as determined by the Compensation Committee in its discretion in accordance with the 2017 Plan. Fiscal 2023 Equity Awards We generally grant equity incentive awards to our NEOs annually, with interim grants for new hires and promotions after the regular grant date. We believe that regular equity-based long-term incentive awards align the interests of our NEOs with our stockholders and focus our NEOs on our long-term growth. In Fiscal 2023 we granted a mix of service-based restricted stock unit awards (RSUs) and performance and service-based performance stock units (PSUs). The Compensation Committee believes that awarding a mix of RSUs and PSUs encourages our NEOs to create and sustain stockholder value over longer periods because their value is directly attributable to changes in the price of our common stock over time, and because their full value cannot be realized until vesting occurs, which generally requires continued employment for multiple years and/or achievement of performance goals. The Compensation Committee views RSUs as a form of long-term incentive that focuses our NEOs on long-term strategy execution. In addition to the considerations applied to RSUs, the Compensation Committee views the long-term financial metrics applicable to the PSUs, which incorporate both operating profit and balance sheet return on investment performance, as valuable to ensure that our NEOs are appropriately incentivized to create long-term value for the Company and the Company’s stockholders and to effectively allocate capital toward investments that are intended to provide future growth for the Company’s stockholders. In determining the size of equity-based grants, the Compensation Committee considers, among other things, the number of shares available under the 2017 Plan, the potential dilutive impact of such grants on our stockholders and the individual’s position with the Company. The number of RSUs and PSUs granted to our NEOs in Fiscal 2023 is shown below. Annual Awards
Elements of Our Executive Compensation Program
| Name | RSUs Granted (#) | PSUs Granted (#)* | | Thomas V. Taylor | 20,525 | 20,525 | | Bryan H. Langley | 2,767 | 2,767 | | Trevor S. Lang | 4,426 | 4,426 | | David V. Christopherson | 3,873 | 3,873 | | Brian K. Robbins | 3,043 | 3,043 |
Elements of Our Executive Compensation Program
* The number of PSUs shown is based on the target number of PSUs that may become vested, subject to the attainment of the performance metrics applicable to the PSUs. The RSUs granted in Fiscal 2023 as a part of Annual Awards vest in three ratable annual installments on each of the first three anniversaries of the grant date, generally subject to the grantee’s continued employment as of each applicable vesting date. The vesting of the PSUs granted in Fiscal 2023 as a part of Annual Awards is subject to achievement of a three-year average ROIC of at least 13.0%, and the achievement of Adjusted EBIT targets, as described in the following table. To the extent Adjusted EBIT target performance falls between the levels specified below, the vesting percentage will be determined on a straight-line interpolated basis. The percentage of the PSUs that becomes vested (if any) will be based on the Compensation Committee’s certification of the Company’s achievement with respect to the performance targets over the three-year performance period. We believe this design most effectively incentivizes our NEOs to drive earnings growth as well as efficiently allocate capital. The Fiscal 2023 PSUs are not expected to meet the threshold requirements for vesting based on performance as of the end of Fiscal 2023. At the end of the performance period in December 2025, the Compensation Committee will review and certify the level of achievement of performance goals with respect to the Fiscal 2023 PSUs, which will be described in our proxy statement for Fiscal 2026.
Elements of Our Executive Compensation Program
| Three-Year Average ROIC | Adjusted EBIT | Percent of PSUs Vested | | Equal to or greater than 13.0% | Equal to or greater than $570,000,000 but less than $620,600,000 (Represents CAGR of 12%) | 50% | | | Equal to or greater than $620,600,000 but less than $695,200,000 (Represents CAGR of 16%) | 100% | | | Equal to or greater than $695,200,000 but less than $765,800,000 (Represents CAGR of 20%) | 150% | | | Equal or greater than $765,800,000 (Represents CAGR of 24%) | 200% |
Elements of Our Executive Compensation Program
With respect to PSUs granted as part of Fiscal 2023 Annual Awards, vesting generally requires continued employment through the date the Compensation Committee certifies the extent to which the Adjusted EBIT and ROIC performance criteria have been met. However, if an NEO’s employment is terminated by the Company without Cause (as defined in the applicable NEO’s employment agreement) or, with respect to Mr. Taylor, if he terminates his employment for Good Reason (as defined in his employment agreement), during the one-year period following a Change in Control (as defined in the 2017 Plan), the PSUs would become fully vested based on target performance. “Adjusted EBIT” is a non-GAAP financial measure, and is generally defined as earnings before interest and taxes, adjusted for certain special, unusual or non-recurring items affecting the Company or its financial statements, items related to the disposal of business or discontinued operations (including termination expenses), certain items related to acquisitions and the impact of acquisitions, employer taxes tied to stock-based compensation, asset impairments, one-time personnel-related expenses, material litigation charges or gains, goodwill impairment charges, items related to equity and/or debt related transactions, items related to changes in accounting principles or applicable law or regulations, and certain other adjustments as determined to be appropriate by the Compensation Committee (which may include adjustments taken into account in calculating Adjusted EBIT as reported by the Company in one or more of its earnings releases for the performance period), in each case, as determined by the Compensation Committee to be appropriate taking into account all relevant objective information or financial data, with the Compensation Committee’s determination to be final and conclusive on all parties. “ROIC” is generally defined as, with respect to each fiscal year during the three-year performance period, the Company’s return on invested capital for a fiscal year, determined as the quotient of (i) an amount equal to (A) the Company’s Adjusted EBIT, plus (B) the Company’s expenses and amortization related to the Company’s leased property, minus (C) the product of (I) the Company’s Adjusted EBIT, (II) plus the Company’s expenses and amortization related to the Company’s leased property multiplied by (III) the Company’s effective tax rate (the average tax rate applicable to pre-tax profits that would be applied to the next dollar of income, as determined by the Committee), divided by (ii) an amount equal to (A) the previous five-quarter-average net fixed assets, as reported by the Company in its quarterly and annual financial statements for the five quarters ending with the last quarter of the applicable fiscal year, plus (B) the Company’s then-current net working capital, as reported by the Company in its quarterly and annual financial statements for the five quarters ending with the last quarter of the applicable fiscal year (calculated as (1) total current assets, minus (2) cash and cash equivalents, less (3) total current liabilities, minus (4) current portion of debt), plus (C) the Company’s expenses and amortization related to the Company’s leased property multiplied by 7.5, in each case determined in accordance with generally accepted accounting principles, in each case as determined by the Compensation Committee in its sole discretion, with such determination to be final and conclusive on all parties. Our obligations with respect to our leased properties represent a substantial capital commitment by the Company. By including a multiple of the Company’ s expenses and amortization related to the Company’ s leased properties as an addition to the denominator of the formula used to calculate ROIC, achieving the annual ROIC goal was made more challenging. Special Performance Stock Unit Award As previously disclosed in our proxy statement for Fiscal 2022 under the section titled “— Fiscal 2022 Compensation — Elements of Our Executive Compensation Program — Fiscal 2023 Equity Awards — Special Performance Unit Stock Award”, to recognize the past achievements of our NEOs and to further propel the execution of the Company’s long-term strategy, in February 2023 the Compensation Committee and the Board, as applicable, approved a grant of special performance- and service-based PSUs (the “Special PSUs”) to our NEOs under the 2017 Plan. The Special PSU design includes the following key features: ✓ Three-year performance period, covering Fiscal 2023 – 2025; ✓ Mix of performance- and service-based Special PSUs and service-based Special PSUs as outlined in the table below;
Elements of Our Executive Compensation Program
| Equity Vehicle | Percentage of Total Special PSUs Granted | | Performance- and service-based Special PSUs | 67% | | Service-based Special PSUs | 33% |
Elements of Our Executive Compensation Program
✓ Performance- and service-based Special PSUs • Special PSUs vest based on achievement of performance goals as outlined in the table below;
Elements of Our Executive Compensation Program
| Performance Goal | Percentage of Total Special PSUs Granted | | Adjusted EBIT/Average Adjusted EBIT ROIC Special PSUs | 45% | | Relative Total Shareholder Return (rTSR) Special PSUs | 22% |
Elements of Our Executive Compensation Program
• rTSR Special PSUs vest based on achievement of relative TSR against a specified peer group and no above-target vesting can occur in the event of negative three-year absolute TSR; • Vesting based on achievement of threshold, target, or maximum performance metrics and linear interpolation for performance achieved between the various goals; • The maximum number of Special PSUs that can vest is 100% of the service-based Special PSUs and 150% of the performance- and service-based Special PSUs; ✓ Service-based PSUs will vest as outlined in the table below;
Adjusted EBIT/Average Adjusted EBIT ROIC PSUs
Adjusted EBIT/Average Adjusted EBIT ROIC PSUs Adjusted EBIT/Average Adjusted EBIT ROIC PSUs vest based on achieving threshold, target, or maximum levels of Adjusted EBIT as of the end of the performance period and a targeted level of Average Adjusted EBIT ROIC for the performance period, as follows:
Adjusted EBIT/Average Adjusted EBIT ROIC PSUs
| Three-Year Average Adjusted EBIT ROIC | Adjusted EBIT | Percent of PSUs Vested | | Equal to or greater than 13.0% | Equal to or greater than $610,300,000 but less than $693,000,000 (Represents CAGR of 15%) | 50% (Threshold) | | | Equal to or greater than $693,000,000 but less than $783,200,000 (Represents CAGR of 20%) | 100% (Target) | | | Equal to or greater than $783,200,000 (Represents CAGR of 25%) | 150% (Maximum) |
Adjusted EBIT/Average Adjusted EBIT ROIC PSUs
As noted above, vesting of the Adjusted EBIT/Average Adjusted EBIT ROIC PSUs requires achievement of both the Adjusted EBIT and Average Adjusted EBIT ROIC goals. Regardless of the achievement of the Adjust EBIT goal, if the Average Adjusted EBIT ROIC of at least 13.0% is not achieved, no Adjusted EBIT/Average Adjusted EBIT ROIC PSUs will vest. The maximum number of Adjusted EBIT/ Average Adjusted EBIT ROIC PSUs that can vest is 150% of the target number of Adjusted EBIT/ Average Adjusted EBIT ROIC PSUs. For this purpose, “Adjusted EBIT” is determined in a manner consistent with the annual PSUs (described above) but includes an adjustment for the stock-based compensation expense of the Special PSUs, and “Average Adjusted EBIT ROIC” is determined based on the three-year average of the Company’s return on invested capital for the performance period (calculated as Adjusted EBIT divided by the five-quarter average net working capital and net fixed assets).
rTSR PSUs
rTSR PSUs Vesting of rTSR PSUs is determined based on the Company’s average TSR as of the last trading day of the three-year performance period as compared to threshold, target, and maximum levels in relation to the rTSR Peer Group, determined without regard to the Company, as set forth in the table below. If the three-year average TSR for the performance period falls between the percentiles specified in the table, the payout percentages shall be determined on a straight-line interpolated basis. Additionally, the rTSR PSUs will not be eligible to vest above the target number of rTSR PSUs if the Company’s three-year absolute TSR is negative.
rTSR PSUs
| Average Three-year TSR | Percent of rTSR PSUs Vested | | 35th Percentile | 50% (Threshold) | | 55th Percentile | 100% (Target) | | 75th Percentile | 150% (Maximum) |
rTSR PSUs
The rTSR Peer Group is comprised of the following companies in the specialty retail and household durables industries, with exposure to homebuilding and/or home improvement markets.
rTSR PSUs
| Beacon Roofing Supply, Inc. Williams-Sonoma, Inc. Ulta Beauty, Inc. Tractor Supply Company Haverty Furniture Companies, Inc. Ethan Allen Interiors Inc. The Home Depot, Inc. Interface, Inc. Trex Company, Inc. The Sherwin-Williams Company | SiteOne Landscape Supply, Inc. Five Below, Inc. Sleep Number Corporation Lowe’s Companies, Inc. Mohawk Industries ,inc. LL Flooring Holdings, Inc. Tile Shop Holdings, Inc. The Aaron’s Company, Inc. Ferguson plc |
rTSR PSUs
The number of Special PSUs granted to our NEOs in Fiscal 2023 is shown below. In general, the number of Special PSUs granted to our NEOs in Fiscal 2023 was determined based on the respective NEOs’ job responsibilities and expected future contribution to our long-term performance and value creation, and competitive market data. The Adjusted EBIT/Average Adjusted EBIT ROIC Special PSUs are not expected to meet the threshold requirements for vesting based on performance as of the end of Fiscal 2023. At the end of the performance period in December 2025, the Compensation Committee will review and certify the level of achievement of performance goals with respect to the Special PSUs, which will be described in our proxy statement for Fiscal 2026.
rTSR PSUs
| Name | Special PSUs Granted (#)* | Adjusted EBIT / Average Adjusted EBIT ROIC PSUs (#)* | rTSR PSUs (#)* | Service PSUs (#)* | | Thomas V. Taylor | 107,322 | 49,790 | 21,019 | 36,513 | | Bryan H. Langley | 10,733 | 4,979 | 2,102 | 3,652 | | Trevor S. Lang | 85,857 | 39,832 | 16,815 | 29,210 | | David V. Christopherson | 32,197 | 14,937 | 6,306 | 10,954 | | Brian K. Robbins | 21,465 | 9,958 | 4,204 | 7,303 |
rTSR PSUs
* The number of Special PSUs shown is based on the target number of PSUs that may become vested. 401(k) Plan and other Benefits All full-time employees are eligible to participate in our 401(k) plan after six months of service and are eligible to receive matching contributions from us after six months of service. We match employee contributions in cash at a rate of 45% of the first 5% of base compensation that an employee contributes, with graded vesting over a six-year period. Our NEOs are also eligible for the Company matching contribution, subject to regulatory limits on contributions to 401(k) plans. Messrs. Langley, Lang, Christopherson and Robbins each participate in the 401(k) plan. In addition to participation in our 401(k) plan, we provide our NEOs with employer paid group term life insurance. Pursuant to the Company’s aircraft policy, in order to maximize productivity and ensure that Mr. Taylor can be immediately available to respond to business priorities, we pay for, or reimburse costs of, certain air travel arising in connection with Mr. Taylor’s regular business-related commuting to and from our corporate office and certain personal travel for Mr. Taylor and/or his family members or other guests. Mr. Taylor’s usage of the Company’s aircraft policy is reviewed by the Compensation Committee on an annual basis. Amounts paid and/or reimbursed under the Company’s aircraft policy constitute taxable income to Mr. Taylor, and we do not gross-up or in any way compensate Mr. Taylor for income tax owed in respect of such amounts. The costs relating to business-related commuting and personal travel by Mr. Taylor and/or his guests are reported as other compensation in the “All Other Compensation” column of the “Summary Compensation Table” below. Employment Agreements We are party to employment agreements with Messrs. Taylor, Lang, Christopherson, Robbins (as amended and restated in February 2020, each as amended on August 1, 2023, with respect to Mr. Robbins, as subsequently amended on August 25, 2023, and with respect to Mr. Christopherson, as subsequently amended on February 22, 2024) and Mr. Langley (effective as of February 2023, as amended on August 1, 2023) (the “Employment Agreements”). Each Employment Agreement provides for the payment of base salary and certain other benefits. Each of the NEOs is also eligible to earn an annual bonus equal to a percentage of base salary, based on the achievement of performance criteria. The NEOs are also eligible to receive severance benefits in the event of certain terminations of employment. For a more detailed description of such benefits, see “Potential Payments upon Termination or Change in Control.” Restrictive Covenants Each of the NEOs is subject to certain non-compete and non-solicitation restrictions while employed and for one year after termination of employment (or, in the case of Mr. Taylor, for two years after termination of employment). In addition, each NEO is subject to confidentiality and non-disparagement restrictions.
Role of Executive Officers in Determining Executive and Director Compensation
Role of Executive Officers in Determining Executive and Director Compensation As described above, during Fiscal 2023, the Compensation Committee and, as applicable, the Board made all decisions regarding the compensation of our executive officers and directors, after considering recommendations by Mr. Taylor (other than with respect to his own compensation). Our human resources department supported the Compensation Committee’s work, and in some cases acted under delegated authority to administer compensation programs.
Role of the Compensation Consultant
Role of the Compensation Consultant The Compensation Committee has retained Korn Ferry as its consultant to provide advice on executive and director compensation practices. Korn Ferry’s support generally includes analysis related to the competitiveness of our executive and director compensation programs, periodic reviews of our compensation peer group, the presentation of compensation and governance trends to the Compensation Committee, and other mandates as directed by the Compensation Committee. In Fiscal 2023, we paid Korn Ferry $158,773, which consisted of approximately $143,000 for services related to executive and director compensation and $15,773 for services related to store employee compensation. The Compensation Committee annually reviews the independence of Korn Ferry as its consultant under applicable SEC and NYSE rules on conflict of interest. Following this review, the Compensation Committee determined that Korn Ferry’s work for us does not raise any conflicts of interest. The Compensation Committee’s evaluation included consideration of all services provided to us, the amount of fees received as a percentage of Korn Ferry’s annual revenue, its policies and procedures designed to prevent conflicts of interest, any business or personal relationships between Korn Ferry and the members of the Compensation Committee or executive officers and any ownership of our stock by the advisors providing executive and director compensation services to us.
Peer Group Construction
Peer Group Construction In making executive compensation determinations for Fiscal 2023, we relied on the experience of the members of our Compensation Committee, as well as the input of our Chief Executive Officer (other than with respect to his own compensation), who has many years of experience in our industry. For Fiscal 2023, the Compensation Committee reviewed compensation data from the public filings for the following companies, which our Compensation Committee identified as our peer group for Fiscal 2023. The following group of companies reflect certain changes from the group reviewed in the prior fiscal year to reflect revenue size, growth rates and other characteristics that the Compensation Committee believes provide a more appropriate comparison.
Peer Group Construction
| Beacon Roofing Supply, Inc. Williams-Sonoma, Inc. Ulta Beauty, Inc. Lululemon Athletica Inc. Pool Corporation Tempur Sealy International, Inc. RH | SiteOne Landscape Supply, Inc. Deckers Outdoor Corporation Five Below, Inc. Sleep Number Corporation Ollie’s Bargain Outlet Holdings, Inc. Etsy, Inc. |
Peer Group Construction
While the Compensation Committee considered this data from time to time to generally inform decisions relating to NEO compensation, it did not seek to benchmark our NEO compensation to any particular level. The Compensation Committee expects to periodically evaluate competitive market data to include the most suitable peer group as well as other market data deemed relevant. The Compensation Committee expects to periodically review and update this peer group and to utilize Korn Ferry for peer group analysis in determining and developing compensation packages for our NEOs.
Summary Compensation Table
Summary Compensation Table The following table contains information about the compensation paid to or earned by each of our NEOs during Fiscal 2021, Fiscal 2022 and Fiscal 2023.
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)(4) | Option awards ($)(4) | Non-equity incentive plan Compensation ($) | All other Compensation ($)(5) | Total ($) | | Thomas V. Taylor – Chief Executive Officer | 2023 | 1,054,231 | — | 13,710,223 | — | 0 | 752,380 | 15,516,834 | | | 2022 | 1,025,385 | — | 3,605,000 | — | 1,007,880 | 644,049 | 6,282,314 | | | 2021 | 1,000,000 | — | 825,049 | 824,938 | 2,000,000 | 493,674 | 5,143,661 | | Bryan H. Langley – Executive Vice President and Chief Financial Officer(1) | 2023 | 395,192 | — | 1,500,249 | — | 0 | 5,481 | 1,900,922 | | | 2022 | 302,039 | — | 871,720 | — | 116,373 | 5,700 | 1,295,832 | | | 2021 | — | — | — | — | — | — | — | | Trevor S. Lang – President(2) | 2023 | 615,385 | — | 8,800,086 | — | 0 | 8,667 | 9,424,138 | | | 2022 | 536,808 | — | 800,000 | — | 295,481 | 8,058 | 1,640,347 | | | 2021 | 479,462 | — | 237,573 | 237,474 | 623,300 | 8,475 | 1,586,284 | | David V. Christopherson – Executive Vice President, Chief Administrative Officer & Chief Legal Officer(3) | 2023 | 470,193 | — | 3,700,161 | — | 0 | 6,951 | 4,177,305 | | | 2022 | 442,308 | — | 600,000 | — | 226,074 | 6,307 | 1,274,689 | | | 2021 | 396,154 | — | 151,079 | 151,010 | 475,385 | 6,385 | 1,180,013 | | Brian K. Robbins – Executive Vice President, Business Development Strategy(6) | 2023 | 462,116 | — | 2,550,135 | — | 0 | 11,121 | 3,023,372 | | | 2022 | 447,323 | — | 550,000 | — | 228,637 | 12,700 | 1,238,660 | | | 2021 | 430,662 | — | 151,079 | 151,010 | 516,794 | 9,136 | 1,258,681 |
Summary Compensation Table
(1) Mr. Langley was promoted to Executive Vice President and Chief Financial Officer on November 29, 2022; previously he served as Senior Vice President, Finance and was not an NEO. (2) Mr. Lang was promoted to President on November 29, 2022; previously he served as Executive Vice President and Chief Financial Officer. (3) Mr. Christopherson was promoted to Executive Vice President, Chief Administrative Officer and Chief Legal Officer on February 22, 2024; previously he served as Executive Vice President, Secretary and General Counsel. (4) Amounts set forth in the Stock Awards and Option Awards columns represent the aggregate grant date fair value of awards granted in Fiscal 2023 computed in accordance with the FASB Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). All assumptions made in the valuations are contained and described in footnote 11 to the Company’s financial statements for Fiscal 2023 contained in our Annual Report on Form 10-K for the fiscal year ended December 28, 2023, filed with the SEC on February 22, 2024. The amounts shown in the table reflect the total fair value on the date of grant and do not necessarily reflect the actual value, if any, that may be realized by the NEOs. (5) Amounts in this column also include (i) 401(k) employer matching contributions of $5,192, $7,425, $6,231 and $7,425 and for Messrs. Langley, Lang, Christopherson, Robbins, respectively; (ii) employer-paid group term life insurance premiums of $2,322, $289, $1,242, $720, and $3,696 for Messrs. Taylor, Langley, Lang, Christopherson and Robbins, respectively; and (iii) employer-incurred costs under the Company’s aircraft policy in respect of commuting and personal travel by Mr. Taylor and/or his guests in the amount of $750,058, of which $516,276 related to commuting-related costs and $233,782 related to personal travel costs. Mr. Robbins’s employment with the Company ended on March 1, 2024.
Grants of Plan-Based Awards Table for Fiscal 2023
Grants of Plan-Based Awards Table for Fiscal 2023 The following table contains information about each grant of an award made to our NEOs under any incentive plan in Fiscal 2023:
Grants of Plan-Based Awards Table for Fiscal 2023
| Name | Type of Award | Grant Date or Performance Period | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Restricted Stock Awards ($)(4) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Thomas V. Taylor | Annual Cash Incentive Bonus | 2/27/2023 | — | 1,325,000 | 2,650,000 | — | — | — | — | — | | | RSU | 2/27/2023 | — | — | — | — | — | — | 20,525 | 1,855,050 | | | PSU | 2/27/2023 | — | — | — | 10,263 | 20,525 | 41,050 | — | 1,855,050 | | | Special PSU | 2/27/2023 | — | — | — | 71,918 | 107,322 | 142,727 | — | 10,000,123 | | Bryan H. Langley | Annual Cash Incentive Bonus | 2/27/2023 | — | 240,000 | 480,000 | — | — | — | — | — | | | RSU | 2/27/2023 | — | — | — | — | — | — | 2,767 | 250,081 | | | PSU | 2/27/2023 | — | — | — | 1,384 | 2,767 | 5,534 | — | 250,081 | | | Special PSU | 2/27/2023 | — | — | — | 7,193 | 10,733 | 14,274 | — | 1,000,087 | | Trevor S. Lang | Annual Cash Incentive Bonus | 2/27/2023 | — | 437,500 | 875,000 | — | — | — | — | — | | | RSU | 2/27/2023 | — | — | — | — | — | — | 4,426 | 400,022 | | | PSU | 2/27/2023 | — | — | — | 2,213 | 4,426 | 8,852 | — | 400,022 | | | Special PSU | 2/27/2023 | — | — | — | 57,534 | 85,857 | 114,181 | — | 8,000,042 | | David V. Christopherson | Annual Cash Incentive Bonus | 2/27/2023 | — | 308,750 | 617,500 | — | — | — | — | — | | | RSU | 2/27/2023 | — | — | — | — | — | — | 3,873 | 350,042 | | | PSU | 2/27/2023 | — | — | — | 1,937 | 3,873 | 7,746 | — | 350,042 | | | Special PSU | 2/27/2023 | | | | 21,576 | 32,197 | 42,819 | — | 3,000,077 | | Brian K. Robbins | Annual Cash Incentive Bonus | 2/27/2023 | — | 302,250 | 604,500 | — | — | — | — | — | | | RSU | 2/27/2023 | — | — | — | — | — | — | 3,043 | 275,026 | | | PSU | 2/27/2023 | — | — | — | 1,522 | 3,043 | 6,086 | — | 275,026 | | | Special PSU | 2/27/2023 | | | | 14,384 | 21,465 | 28,546 | — | 2,000,083 |
Grants of Plan-Based Awards Table for Fiscal 2023
(1) Constitutes target and maximum award opportunities for our NEOs under the 2023 Bonus Program based on salaries earned in Fiscal 2023. See “— Fiscal 2023 Compensation — Elements of Our Executive Compensation Program — Annual Cash Incentive Bonuses” for information regarding the criteria applied in determining amounts payable under the awards. The actual amounts paid with respect to these awards are included in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table for Fiscal 2023. (2) Constitutes target and maximum award opportunities for our NEOs under the performance-based vesting of PSUs as outlined in the “— Fiscal 2023 Compensation — Elements of Our Executive Compensation Program — Fiscal 2023 Equity Awards” section. Constitutes time-vested restricted stock unit awards granted to our NEOs. See “— Fiscal 2023 Compensation — Elements of Our Executive Compensation Program — Fiscal 2023 Equity Awards”. Pursuant to the SEC rules, RSUs and PSUs are valued in accordance with FASB ASC Topic 718. All assumptions made in the valuations are contained and described in footnote 11 to the Company’s financial statements for Fiscal 2023 contained in our Annual Report on Form 10-K for the fiscal year ended December 28, 2023, filed with the SEC on February 22, 2024. The amounts shown in the table reflect the total fair value on the date of grant and do not necessarily reflect the actual value, if any, that may be realized by the NEOs.
Outstanding Equity Awards at Fiscal Year-End 2023
Outstanding Equity Awards at Fiscal Year-End 2023 The following table contains information about outstanding equity awards as of the last day of Fiscal 2023 for each of our NEOs:
Outstanding Equity Awards at Fiscal Year-End 2023
| | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of shares or units of stock that have not yet vested (#)(2) | Market value of shares or units of stock that have not yet vested ($)(2) | Equity Incentive Plan Awards: Number Of Unearned Shares, Units Or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market Or Payout Value Of Unearned Shares, Units Or Other Rights That Have Not Vested ($)(3) | | Thomas Taylor | 9/30/2016 | 68,397 | — | 9.99 | 9/30/2026 | | | | | | | 4/26/2017 | 224,618 | — | 21.00 | 4/26/2027 | | | | | | | 11/2/2018 | 135,301 | — | 31.98 | 11/2/2028 | | | | | | | 2/24/2020 | 42,375 | 14,125 | 57.70 | 2/24/2030 | 1,788 | 203,635 | | | | | 3/1/2021 | 9,880 | 9,879 | 95.68 | 3/1/2031 | 4,311 | 490,980 | | | | | 2/28/2022 | | | | | 12,568 | 1,431,370 | | | | | 2/27/2023 | | | | | 20,525 | 2,337,592 | | | | | 2/27/2023 | | | | | | | 10,263 | 1,168,853 | | | 2/27/2023 | | | | | 36,513 | 4,158,466 | 56,424 | 6,426,129 | | Bryan Langley | 5/20/2014 | 2,575 | — | 5.26 | 5/20/2024 | | | | | | | 7/13/2016 | 3,110 | — | 7.59 | 7/13/2026 | | | | | | | 9/30/2016 | 1,159 | — | 9.99 | 9/30/2026 | | | | | | | 4/26/2017 | 2,830 | — | 21.00 | 4/26/2027 | | | | | | | 11/6/2017 | 2,512 | — | 40.48 | 11/6/2027 | | | | | | | 11/2/2018 | 4,101 | — | 31.98 | 11/2/2028 | | | | | | | 5/6/2019 | 4,592 | — | 44.05 | 5/6/2029 | | | | | | | 2/24/2020 | 1,815 | 605 | 57.70 | 2/24/2030 | 230 | 26,195 | | | | | 3/1/2021 | 429 | 428 | 95.68 | 3/1/2031 | 561 | 63,892 | | | | | 2/28/2022 | | | | | 899 | 102,387 | | | | | 11/29/2022 | | | | | 7,363 | 838,572 | | | | | 2/27/2023 | | | | | 2,767 | 315,134 | | | | | 2/27/2023 | | | | | | | 1,384 | 157,624 | | | 2/27/2023 | | | | | 3,652 | 415,926 | 5,643 | 642,681 | | Trevor Lang | 9/30/2016 | 13,000 | — | 9.99 | 9/30/2026 | | | | | | | 4/26/2017 | 44,116 | — | 21.00 | 4/26/2027 | | | | | | | 11/2/2018 | 38,951 | — | 31.98 | 11/2/2028 | | | | | | | 2/24/2020 | 12,198 | 4,067 | 57.70 | 2/24/2030 | 515 | 58,653 | | | | | 2/24/2020(4) | | | | | 12,999 | 1,480,456 | 42,936 | 4,889,981 | | | 3/1/2021 | 2,844 | 2,844 | 95.68 | 3/1/2031 | 1,241 | 141,337 | | | | | 2/28/2022 | | | | | 2,441 | 278,005 | | | | | 8/8/2022 | | | | | 724 | 82,456 | | | | | 2/27/2023 | | | | | 4,426 | 504,077 | | | | | 2/27/2023 | | | | | | | 2,213 | 252,039 | | | 2/27/2023 | | | | | 29,210 | 3,326,727 | 45,139 | 5,140,881 | | David Christopherson | 2/24/2020 | — | 2,586 | 57.70 | 2/24/2030 | 328 | 37,356 | | | | | 2/24/2020(4) | | | | | 4,333 | 493,485 | 14,313 | 1,630,108 | | | 3/1/2021 | — | 1,808 | 95.68 | 3/1/2031 | 789 | 89,859 | | | | | 2/28/2022 | | | | | 2,093 | 238,372 | | | | | 2/27/2023 | | | | | 3,873 | 441,096 | | | | | 2/27/2023 | | | | | | | 1,937 | 220,605 |
Outstanding Equity Awards at Fiscal Year-End 2023
| | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of shares or units of stock that have not yet vested (#)(2) | Market value of shares or units of stock that have not yet vested ($)(2) | Equity Incentive Plan Awards: Number Of Unearned Shares, Units Or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market Or Payout Value Of Unearned Shares, Units Or Other Rights That Have Not Vested ($)(3) | | | 2/27/2023 | | | | | 10,954 | 1,247,551 | 16,928 | 1,927,930 | | Brian Robbins | 2/24/2020 | — | 2,586 | 57.70 | 2/24/2030 | 328 | 37,356 | | | | | 2/24/2020(4) | | | | | 6,500 | 740,285 | 21,469 | 2,445,104 | | | 3/1/2021 | 1,809 | 1,808 | 95.68 | 3/1/2031 | 789 | 89,859 | | | | | 2/28/2022 | | | | | 1,918 | 218,441 | | | | | 2/27/2023 | | | | | 3,043 | 346,567 | | | | | 2/27/2023 | | | | | | | 1,522 | 173,341 | | | 2/27/2023 | | | | | 7,303 | 831,739 | 11,285 | 1,285,249 |
Outstanding Equity Awards at Fiscal Year-End 2023
Unexercisable stock options outstanding as of the end of Fiscal 2023 for each NEO vest as follows:
Outstanding Equity Awards at Fiscal Year-End 2023
| Vesting Date | T. Taylor | B. Langley | T. Lang | D. Christopherson | B. Robbins | | 2/24/2024 | 14,125 | 605 | 4,067 | 2,586 | 2,586 | | 3/1/2024 | 4,939 | 214 | 1,422 | 904 | 904 | | 3/1/2025 | 4,940 | 214 | 1,422 | 904 | 904 | | Total | 24,004 | 1,033 | 6,911 | 4,394 | 4,394 |
Outstanding Equity Awards at Fiscal Year-End 2023
(2) Restricted stock and restricted stock units outstanding as of the end of Fiscal 2023 for each NEO vests as follows:
Outstanding Equity Awards at Fiscal Year-End 2023
| Vesting Date | T. Taylor | B. Langley | T. Lang | D. Christopherson | B. Robbins | | 2/24/2024 | 1,788 | 230 | 13,514 | 4,661 | 6,828 | | 2/27/2024 | 6,841 | 922 | 1,475 | 1,290 | 1,014 | | 2/28/2024 | 6,284 | 449 | 1,220 | 1,046 | 959 | | 3/1/2024 | 2,155 | 281 | 620 | 394 | 394 | | 8/8/2024 | | | 362 | | | | 11/29/2024 | | 2,454 | | | | | 2/27/2025 | 18,891 | 1,835 | 8,778 | 4,030 | 2,840 | | 2/28/2025 | 6,284 | 450 | 1,221 | 1,047 | 959 | | 3/1/2025 | 2,156 | 280 | 621 | 395 | 395 | | 8/8/2025 | | | 362 | | | | 11/29/2025 | | 2,455 | | | | | 2/27/2026 | 31,306 | 1,836 | 8,778 | 4,030 | 2,841 | | 11/29/2026 | | 2,454 | | | | | 2/27/2027 | | 1,826 | 14,605 | 5,477 | 3,651 | | Total | 75,705 | 15,472 | 51,556 | 22,370 | 19,881 |
Outstanding Equity Awards at Fiscal Year-End 2023
The reported value of the restricted stock and restricted stock unit awards is based on the closing stock price on December 28, 2023, the last trading day of Fiscal 2023. The NEOs’ performance restricted units (PSUs) vest after a three-year performance period ending December 25, 2025, subject to achievement of EBIT-based specified earnings and EBIT-based ROIC targets, specified relative total shareholder return against a specified peer group, and continued service through the date the Compensation Committee certifies the extent to which the applicable performance metrics have been met. The NEOs’ Special PSUs vest after a three-year performance period ending on December 25, 2025, subject to achievement of the performance metrics and such NEO’s continued employment through the fourth anniversary of the date of grant (or, in the case of Mr. Taylor, the third anniversary of the date of grant). See “Potential Payments upon Termination or Change in Control” for treatment of PSUs upon certain terminations of employment. The reported value of the PSUs is based on the closing stock price on December 28, 2023, the last trading day of Fiscal 2023. (4) Messrs. Lang’s, Christopherson’s and Robbins’s performance shares (PRSs) are earned upon the completion of the three-year performance period ending December 29, 2022, based on the achievement of EBIT-based specified earnings and EBIT-based ROIC targets, specified relative total shareholder return against a specified peer group, and continued service through February 24, 2024. In Fiscal 2023, in accordance with the terms of the PRS awards, the Compensation Committee determined that the performance targets applicable to the PRS awards were achieved. Accordingly, the PRS awards vested on February 24, 2024 for Messrs. Lang, Christopherson and Robbins. The reported value of the PRSs is based on the closing stock price on December 28, 2023, the last trading day of Fiscal 2023.
Option Exercises and Stock Vested During Fiscal 2023
Option Exercises and Stock Vested During Fiscal 2023 The following table provides information regarding option exercises by the NEOs and stock awards that vested, in each case during Fiscal 2023:
Option Exercises and Stock Vested During Fiscal 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Thomas V. Taylor | 100,000 | 10,051,000 | 196,671 | 17,896,696 | | Bryan H. Langley | — | — | 4,015 | 364,305 | | Trevor S. Lang | — | — | 2,717 | 251,895 | | David V. Christopherson | 25,565 | 1,807,747 | 19,923 | 1,777,799 | | Brian K. Robbins | 19,504 | 1,123,490 | 1,680 | 152,657 |
Option Exercises and Stock Vested During Fiscal 2023
(1) The value realized is computed as the difference between the fair market value of the underlying shares on the date of exercise and the exercise price times the number of options exercised. (2) The value realized is computed as the shares of stock or units multiplied by the closing price of the underlying shares on the vesting date.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control In this section, we describe payments that may be made to our NEOs upon several events of termination, assuming the termination event occurred on the last day of Fiscal 2023 (except as otherwise noted). Thomas V. Taylor Under Mr. Taylor’s Employment Agreement, if we terminate Mr. Taylor’s employment without Cause or do not renew it or if Mr. Taylor resigns for Good Reason, he is entitled to receive (i) any accrued and unpaid base salary and benefits and payments pursuant to the terms of any benefit plan (collectively, the “Accrued Benefits”), and (ii) subject to Mr. Taylor executing a valid release of claims, severance pay equal to (w) two times Mr. Taylor’s annual base salary, payable over 24 months; (x) any unpaid annual incentive bonus with respect to the most recently completed fiscal year if the bonus is unpaid on the date of termination; (y) a pro-rated portion of the average annual incentive bonus that Mr. Taylor earned over the two completed fiscal years prior to his date of termination; and (z) an amount equal to our portion of Mr. Taylor’s health care premiums for 24 months following his date of termination. In addition, with respect to any vested stock options held by Mr. Taylor at the time of his termination of employment without Cause or for Good Reason, such stock options will remain exercisable for a period of 90 days following the date of such termination. We generally may terminate Mr. Taylor’s employment for “Cause” immediately upon written notice of any of the following reasons: (i) his commission of, or being indicted for a felony, or his commission of a misdemeanor where imprisonment may be imposed (other than a traffic-related offense); (ii) any act of material misconduct or gross negligence in the performance of his duties or any act of moral turpitude; (iii) any act of theft, fraud or material dishonesty; (iv) his willful failure to perform any reasonable duties assigned by the Board, or his refusal to follow the directives of the Board that is not cured within 30 days; (v) any material breach of an agreement with us that is not cured within ten days; or (vi) his unlawful appropriation of a material corporate opportunity. Mr. Taylor generally may terminate his employment for “Good Reason” in connection with any of the following without his consent: (i) a material diminution of his authority, duties or responsibilities; (ii) a material diminution of his base salary; (iii) a relocation of his office to a location that is more than 50 miles from the Atlanta, Georgia metropolitan area; or (iv) any material breach of Mr. Taylor’s Employment Agreement by us that is not cured within 60 days. In the event of Mr. Taylor’s death or disability, Mr. Taylor or his personal representatives or heirs will receive (i) his Accrued Benefits, (ii) his base salary for 12 months, (iii) any unpaid annual incentive bonus with respect to the most recently completed fiscal year if the bonus is unpaid on the date of termination, and (iv) a pro-rated portion of the annual incentive bonus that Mr. Taylor would have earned if he had remained employed, payable at the time bonuses are paid to employees generally. Additionally, Mr. Taylor’s vested options will be exercisable for 12 months after his termination due to death or disability. If Mr. Taylor’s death occurs within the six-month period prior to the next scheduled vesting date of his then outstanding RSUs, the RSUs scheduled to vest on the next vesting date will immediately vest upon Mr. Taylor’s death. In the event that Mr. Taylor’s employment is terminated by us without Cause or by Mr. Taylor for Good Reason within one year following a Change in Control (as defined in his Employment Agreement), Mr. Taylor will be entitled to receive (i) the Accrued Benefits, and (ii) subject to Mr. Taylor executing a valid release of claims, severance pay equal to (v) two times Mr. Taylor’s annual base salary; (w) any unpaid annual incentive bonus with respect to the most recently completed fiscal year if the bonus is unpaid on the date of termination; (x) a pro-rated portion of the average annual incentive bonus that Mr. Taylor earned over the two completed fiscal years prior to his date of termination; (y) an amount equal to our portion of Mr. Taylor’s health care premiums for 24 months following his date of termination and (z) an amount equal to two times Mr. Taylor’s target annual incentive bonus. In addition, with respect to the outstanding PSUs (excluding the Special PSUs), in the event Mr. Taylor’s employment is terminated by us without Cause or by Mr. Taylor for Good Reason, in each case, within one year following a Change in Control (as defined in the 2017 Plan), subject to (i) Mr. Taylor’s continued compliance with all confidentiality obligations and restrictive covenants to which he is subject and (ii) Mr. Taylor executing a valid release of claims, 100% of the target number of PSUs granted will vest. Bryan H. Langley Under Mr. Langley’s Employment Agreement, if we terminate Mr. Langley’s employment without Cause or do not renew it or if Mr. Langley resigns for Good Reason, he is entitled to receive (i) any Accrued Benefits, and (ii) subject to Mr. Langley executing a valid release of claims, severance pay equal to Mr. Langley’s annual base salary, payable over 12 months. We may terminate Mr. Langley’s employment for “Cause” immediately upon written notice of any of the following reasons: (i) his (x) commission of, or being indicted for a felony, or (y) commission of a misdemeanor where imprisonment may be imposed (other than a traffic-related offense); (ii) any act of material misconduct or gross negligence in the performance of his duties or any act of moral turpitude; (iii) any act of theft, fraud or material dishonesty; (iv) his willful failure to perform any reasonable duties assigned by the Chief Executive Officer, or his refusal to follow the directives of the Company that is not cured within 30 days; (v) any material breach of an agreement with us that is not cured within ten days; or (vi) his unlawful appropriation of a material corporate opportunity. Mr. Langley generally may terminate his employment for “Good Reason” in connection with any of the following without his consent: (i) a material diminution of his authority, duties or responsibilities; (ii) a material diminution of his base salary; (iii) a relocation of his office to a location that is more than 50 miles from the Atlanta, Georgia metropolitan area; or (iv) any material breach of the Langley Employment Agreement by us, in each case that is not cured within 60 days. With respect to Mr. Langley’s RSUs, if Mr. Langley’s death occurs within the six-month period prior to the next scheduled vesting date of his then outstanding RSUs, the RSUs scheduled to vest on the next vesting date will immediately vest upon Mr. Langley’s death. With respect to Mr. Langley’s PSUs (excluding the Special PSUs), in the event Mr. Langley’s employment is terminated by us without Cause within one year following a Change in Control (as defined in the 2017 Plan), subject to (i) Mr. Langley’s continued compliance with all confidentiality obligations and restrictive covenants to which he is subject and (ii) Mr. Langley executing a valid release of claims, 100% of the target number of PSUs granted will vest. Trevor S. Lang Under Mr. Lang’s Employment Agreement, if we terminate Mr. Lang’s employment without Cause or do not renew it or if Mr. Lang resigns for Good Reason, he is entitled to receive (i) any Accrued Benefits, and (ii) subject to Mr. Lang executing a valid release of claims, severance pay equal to Mr. Lang’s annual base salary, payable over 12 months. In addition, any vested stock options held by Mr. Lang at the time of his termination of employment without Cause or for Good Reason will remain exercisable for a period of 90 days following the date of such termination.
Potential Payments upon Termination or Change in Control
We may terminate Mr. Lang’s employment for “Cause” immediately upon written notice of any of the following reasons: (i) his (x) commission of, or being indicted for, a felony, or (y) commission of a misdemeanor where imprisonment may be imposed (other than a traffic-related offense); (ii) any act of material misconduct or gross negligence in the performance of his duties or any act of moral turpitude; (iii) any act of theft, fraud or material dishonesty; (iv) his willful failure to perform any reasonable duties assigned by the Chief Executive Officer, or his refusal to follow the directives of the Company that is not cured within 30 days; (v) any material breach of an agreement with us that is not cured within ten days; or (vi) his unlawful appropriation of a material corporate opportunity. Mr. Lang generally may terminate his employment for “Good Reason” in connection with any of the following without his consent: (i) a material diminution of his authority, duties or responsibilities; (ii) a material diminution of his base salary; (iii) a relocation of his office to a location that is more than 50 miles from the Atlanta, Georgia metropolitan area; or (iv) any material breach of Mr. Lang’s Employment Agreement by us, in each case that is not cured within 60 days. With respect to Mr. Lang’s RSUs, if Mr. Lang’s death occurs within the six-month period prior to the next scheduled vesting date of his then outstanding RSUs, the RSUs scheduled to vest on the next vesting date will immediately vest upon Mr. Lang’s death. With respect to Mr. Lang’s PSUs (excluding the Special PSUs), in the event Mr. Lang’s employment is terminated by us without Cause within one year following a Change in Control (as defined in the 2017 Plan), subject to (i) Mr. Lang’s continued compliance with all confidentiality obligations and restrictive covenants to which he is subject and (ii) Mr. Lang executing a valid release of claims, 100% of the target number of PSUs granted will vest. David V. Christopherson On February 22, 2024, in connection with Mr. Christopherson’s promotion to Executive Vice President, Chief Administrative Officer & Chief Legal Officer of the Company, we entered into an amendment to Mr. Christopherson’s Employment Agreement (the “Christopherson Amendment”), which is attached to our Current Report on Form 8-K, filed with the SEC on February 22, 2024. Under Mr. Christopherson’s Employment Agreement, if we terminate Mr. Christopherson’s employment without Cause or do not renew it or if Mr. Christopherson resigns for Good Reason, he is entitled to receive (i) any Accrued Benefits, and (ii) subject to Mr. Christopherson executing a valid release of claims, severance pay equal to Mr. Christopherson’s annual base salary, payable over 12 months. In addition, any vested stock options held by Mr. Christopherson at the time of his termination of employment without Cause or for Good Reason remain exercisable for a period of 90 days following the date of such termination. We may terminate Mr. Christopherson’s employment for “Cause” immediately upon written notice of any of the following reasons: (i) his (x) commission of, or being indicted for a felony, or (y) commission of a misdemeanor where imprisonment may be imposed (other than a traffic-related offense); (ii) any act of material misconduct or gross negligence in the performance of his duties or any act of moral turpitude; (iii) any act of theft, fraud or material dishonesty; (iv) his willful failure to perform any reasonable duties assigned by the Chief Financial Officer or Chief Executive Officer, or his refusal to follow the directives of Company that is not cured within 30 days; (v) any material breach of an agreement with us that is not cured within ten days; or (vi) his unlawful appropriation of a material corporate opportunity. Mr. Christopherson generally may terminate his employment for “Good Reason” in connection with any of the following without his consent: (i) a material diminution of his authority, duties or responsibilities; (ii) a material diminution of his base salary; (iii) a relocation of his office to a location that is more than 50 miles from the Atlanta, Georgia metropolitan area; or (iv) any material breach of Mr. Christopherson’s Employment Agreement by us, in each case that is not cured within 60 days. With respect to Mr. Christopherson’s RSUs, if Mr. Christopherson’s death occurs within the six-month period prior to the next scheduled vesting date of his then outstanding RSUs, the RSUs scheduled to vest on the next vesting date will immediately vest upon Mr. Christopherson’s death. With respect to Mr. Christopherson’s PSUs (excluding the Special PSUs), in the event Mr. Christopherson’s employment is terminated by us without Cause within one year following a Change in Control (as defined in the 2017 Plan), subject to (i) Mr. Christopherson’s continued compliance with all confidentiality obligations and restrictive covenants to which he is subject and (ii) Mr. Christopherson executing a valid release of claims, 100% of the target number of PSUs granted will vest. Brian K. Robbins Under Mr. Robbins’s Employment Agreement, if we terminated Mr. Robbins’s employment without Cause prior to March 1, 2024, he was entitled to receive (i) any Accrued Benefits, and (ii) subject to Mr. Robbins executing a valid release of claims, severance pay equal to Mr. Robbins’s annual base salary, payable over 12 months. In addition, any vested stock options held by Mr. Robbins at the time of his termination of employment without Cause remained exercisable for a period of 90 days following the date of such termination. Pursuant to Mr. Robbins’s Employment Agreement addendum, dated August 25, 2023, Mr. Robbins’s employment terminated automatically following the completion of Mr. Robbins’s transition services period on March 1, 2024. In accordance with his Employment Agreement addendum, Mr. Robbins will be eligible to receive his annual bonus for Fiscal 2023 and to vest in his outstanding equity awards under the 2017 Plan. With respect to Mr. Robbins’s RSUs, if Mr. Robbins’s death occurred within the six-month period prior to the next scheduled vesting date of his then outstanding RSUs, the RSUs scheduled to vest on the next vesting date would immediately vest upon Mr. Robbins’s death. With respect to Mr. Robbins’s PSUs (excluding the Special PSUs), in the event Mr. Robbins’s employment was terminated by us without Cause within one year following a Change in Control (as defined in the 2017 Plan), subject to (i) Mr. Robbins’s continued compliance with all confidentiality obligations and restrictive covenants to which he is subject and (ii) Mr. Robbins executing a valid release of claims, 100% of the target number of PSUs granted would vest.
Potential Payments upon Termination or Change in Control
| Name | Cash Payments ($) | Continuation of Welfare Plans ($) | Equity Vesting ($) | | Thomas V. Taylor | | | | | Termination Without Cause | 3,623,940(1) | 25,856(2) | | | Company Non-Renewal/Resignation for Good Reason | 3,623,940(1) | 25,856(2) | | | Death/Disability | 2,385,000(3) | | 1,494,806(6) | | Termination Without Cause Within One Year Following a Change in Control | 6,273,940(4) | 25,856(2) | 2,337,592(7) | | Resignation for Good Reason Within One Year Following a Change in Control | 6,273,940(4) | 25,856(2) | 2,337,592(7) | | Bryan H. Langley | | | | | Termination Without Cause/Company Non-Renewal/ Resignation for Good Reason | 400,000(5) | | | | Death/Disability | | | 214,341(6) | | Termination Without Cause Within One Year Following a Change in Control | | | 315,134(7) | | Trevor S. Lang | | | | | Termination Without Cause | 625,000(5) | | | | Company Non-Renewal/Resignation for Good Reason | 625,000(5) | | | | Death/Disability | | | 306,934(6) | | Termination Without Cause Within One Year Following a Change in Control | | | 504,077(7) | | David V. Christopherson | | | | | Termination Without Cause/Company Non-Renewal/ Resignation for Good Reason | 475,000(5) | | | | Death/Disability | | | 266,047(6) | | Termination Without Cause Within One Year Following a Change in Control | | | 441,096(7) | | Brian K. Robbins | | | | | Termination Without Cause/Company Non-Renewal/Resignation for Good Reason | 465,000(5) | | | | Death/Disability | | | 224,705(6) | | Termination Without Cause Within One Year Following a Change in Control | | | 346,567(7) |
Potential Payments upon Termination or Change in Control
Represents an amount equal to (i) two times his base salary in effect at the end of Fiscal 2023, plus (ii) the average annual incentive bonus earned over the two completed fiscal years prior to the date of his termination. (2) Represents our payment for the employer portion of the cost of continuation health coverage for his family for 24 months following his termination. (3) Represents an amount equal to (i) his base salary in effect at the end of Fiscal 2023, plus (ii) the annual incentive bonus earned with respect to the year of his termination. This amount assumes that for Fiscal 2023, the annual incentive bonus was earned at target. (4) Represents an amount equal to (i) two times his base salary in effect at the end of Fiscal 2023, (ii) the average annual incentive bonus earned over the two completed fiscal years prior to the date of his termination, plus (iii) an amount equal to two times his target bonus (at the target bonus rate for the fiscal year of his termination). Represents an amount equal to his base salary in effect at the end of Fiscal 2023. For Mr. Robbins, this amount reflects what he would have been entitled to under his Employment Agreement for a Termination Without Cause/Company Non-Renewal/Resignation for Good Reason prior to March 1, 2024. Represents the value of accelerated vesting of any outstanding RSUs that would have vested in the six-month period following the date of such termination of employment, using our closing stock price of $113.89 on December 28, 2023. (7) Represent the value of accelerated vesting of any outstanding PSUs, assuming a payout percentage of 100% of the target number of PSUs granted, using our closing stock price of $113.89 on December 28, 2023. All PSUs that were outstanding as of December 28, 2023 were forfeited in accordance with their terms.
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure As required by Item 402(u) of Regulation S-K, which was mandated by Section 953(b) of the Dodd-Frank Act, we are providing the following information about the relationship of the median annual total compensation of our employees and the annual total compensation of Tom Taylor, our Chief Executive Officer (our “CEO”) and Principal Executive Officer (“PEO”), based on data as of December 28, 2023 (the “Determination Date”). Our employee population consists of a significant number of part-time employees, many of whom are also compensated on an hourly basis. Approximately 92% of our employees are compensated on an hourly basis, and part-time employees represent approximately 23% of our total workforce. Our median employee in Fiscal 2023 was determined to be a full-time hourly employee. For Fiscal 2023: • The median of the annual total compensation of all employees of our company (other than our CEO) was determined to be $33,404, and • the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this proxy statement was $15,516,834. Based on this information, for Fiscal 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 465 to 1. This pay ratio is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of Regulation S-K. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps: • We determined that, as of the Determination Date, our employee population consisted of approximately 12,783 individuals with 99.9% of these employees located in the United States and 0.1% located outside of the United States. This population consisted of our full-time, part-time, and temporary employees. • We used a consistently applied compensation measure to identify our median employee by comparing the amount of salary, wages, overtime pay, bonuses and tips of our employees as reflected in our payroll records as reported to the Internal Revenue Service on Form W-2 for 2023. We did not annualize the compensation for any employee in identifying our median employee. • We identified our median employee by consistently applying this compensation measure to all our employees included in the analysis. After we identified our median employee, we calculated such employee’s annual total compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $33,404. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this proxy statement.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure As required by Item 402(v) of Regulation S-K, which was mandated by Section 953(a) of the Dodd-Frank Act, we are providing the following information about the relationship between “compensation actually paid” to our PEO and average “compensation actually paid” to our NEOs and the financial performance of the Company for Fiscal 2023, Fiscal 2022, Fiscal 2021 and Fiscal 2020. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation — Compensation Discussion and Analysis.”
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(2)(3) | Value of Initial Fixed $100 Investment Based On(4): | | Net Income (in millions)(5) | Net Sales (in millions)(6) | | | | | | | Total Shareholder Return(4) | Peer Group Total Shareholder Return(4) | | | | | (a) | (b) | (c) | (d) | (e) | (f) | | | | 2023 | $15,516,834 | $23,458,383 | $4,631,434 | $7,186,862 | $226.42 | $180.77 | $246.0 | $4,413.9 | | 2022 | $6,282,314 | $(14,905,219) | $1,362,382 | $(1,990,516) | $141.13 | $161.70 | $298.2 | $4,264.5 | | 2021 | $5,143,661 | $23,822,167 | $1,477,609 | $5,718,110 | $258.41 | $201.50 | $283.2 | $3,433.5 | | 2020 | $13,929,515 | $36,101,391 | $3,339,331 | $8,352,669 | $184.59 | $126.85 | $195.0 | $2,425.8 |
Pay Versus Performance Disclosure
(1) The PEO reflected in these columns for Fiscal 2020, Fiscal 2021, Fiscal 2022, and Fiscal 2023 is Thomas V. Taylor. The dollar amounts reported in column (a) are the amounts of total compensation reported for Mr. Taylor for each corresponding year in the “Total” column of the Summary Compensation Table (“SCT”). Refer to “Executive Compensation — Compensation of our Named Executive Officers — Summary Compensation Table.” (2) The dollar amounts reported in columns (b) and (d) represent the amount of Compensation actually paid (“CAP”) to our PEO and Non-PEO NEOs. The amounts are calculated in accordance with Item 402(v) of Regulation S-K by deducting and adding the following amounts from the “Total” column of the SCT for each of the applicable fiscal years. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Taylor or our other non-PEO NEOs during the applicable fiscal year. The fair values of equity compensation are calculated in accordance with FASB ASC Topic 718. All assumptions made in the valuations are contained and described in footnote 11 to the Company’s financial statements for Fiscal 2023 contained in our Annual Report on Form 10-K for the fiscal year ended December 28, 2023, filed with the SEC on February 22, 2024:
Pay Versus Performance Disclosure
| PEO SCT Total to CAP Reconciliation: | 2023 | 2022 | 2021 | 2020 | | SCT Total | $15,516,834 | $6,282,314 | $5,143,661 | $13,929,515 | | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | $(13,710,223) | $(3,605,000) | $(1,649,987) | $(11,650,000) | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | $17,412,632 | $2,676,465 | $2,518,820 | $20,518,754 | | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | $1,419,609 | $(13,222,876) | $12,974,839 | $11,883,343 | | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $4,157,763 | $(7,036,122) | $4,834,834 | $1,419,779 |
Pay Versus Performance Disclosure
| PEO SCT Total to CAP Reconciliation: | 2023 | 2022 | 2021 | 2020 | | Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $(1,338,232) | $— | $— | $— | | Compensation Actually Paid | $23,458,383 | $(14,905,219) | $23,822,167 | $36,101,391 |
Pay Versus Performance Disclosure
| Average Non-PEO NEOs SCT Total to CAP Reconciliation: | 2023 | 2022 | 2021 | 2020 | | SCT Total Compensation | $4,631,434 | $1,362,382 | $1,477,609 | $3,339,331 | | Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | $(4,137,658) | $(562,500) | $(401,063) | $(2,526,000) | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | $5,261,580 | $568,790 | $565,023 | $4,420,337 | | Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | $1,424,528 | $(2,263,801) | $3,041,857 | $2,760,419 | | Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $186,654 | $(1,095,387) | $1,034,684 | $358,582 | | Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $(179,676) | $— | $— | $— | | Compensation Actually Paid | $7,186,862 | $(1,990,516) | $5,718,110 | $8,352,669 |
Pay Versus Performance Disclosure
(3) The non-PEO NEOs reflected in these columns are, (i) for Fiscal 2020 and Fiscal 2021: Trevor S. Lang, Lisa G. Laube, Brian K. Robbins, and David V. Christopherson; and (ii) for Fiscal 2022 and 2023: Bryan H. Langley, Trevor S. Lang, David V. Christopherson and Brian K. Robbins. The dollar amounts reported in column (c) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Taylor) in the “Total” column of the SCT for each applicable year. (4) The amounts reported in columns (e) and (f) represent cumulative total return to holders of our common stock against the cumulative total return of our peer entities, represented by the S&P 500 Home Improvement Retail Index, from December 26, 2019 (the last trading day before Fiscal 2020) through December 28, 2023, calculated from the market close on the last trading day before Fiscal 2020 through and including the end of each applicable fiscal year in the table above for which the total shareholder return is being calculated, respectively. The S&P 500 Home Improvement Retail Index is the same industry index referenced in our Annual Report on Form 10-K for Fiscal 2023. The total shareholder return for each investment assumes that $100 was invested in our Class A common stock and the respective index on December 26, 2019 through December 28, 2023, including reinvestment of any dividends. (5) The dollar amounts reported represent the amount of net income reflected in our audited financial statements for the applicable year. Net sales is calculated in accordance with GAAP, as reflected in our audited financial statements. While we use various performance measures for the purpose of evaluating performance for our compensation programs, we have determined that net sales is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by us to link compensation actually paid to our NEOs, for the most recently completed fiscal year, to Company performance.
Compensation of our Directors for Fiscal 2023
Compensation of our Directors for Fiscal 2023
Director Compensation(1)(2)(3)(4)(5)
Director Compensation(1)(2)(3)(4)(5)
Director Compensation(1)(2)(3)(4)(5)
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | All Other Compensation ($) | Totals ($) | | Norman Axelrod (Chairman) | $222,500 | $140,089 | $— | $362,589 | | Peter Starrett | $90,000 | $140,089 | $— | $230,089 | | George Vincent West(3) | $— | $— | $100,000 | $100,000 | | Melissa Kersey | $60,000 | $91,193 | $— | $151,193 | | Charles Young | $87,500 | $140,089 | $— | $227,589 | | Felicia Thornton | $— | $240,049 | $— | $240,049 | | Richard Sullivan | $90,000 | $140,089 | $— | $230,089 | | Ryan Marshall | $90,000 | $140,089 | $— | $230,089 | | Dwight James | $87,500 | $140,089 | $— | $227,589 | | William Giles | $105,000 | $140,089 | $— | $245,089 |
Director Compensation(1)(2)(3)(4)(5)
(1) For information regarding the compensation of Mr. Taylor, see “Compensation of our Named Executive Officers — Summary Compensation Table for Fiscal 2023.” (2) As of December 28, 2023, no directors held exercisable options. (3) George Vincent West is party to a consulting agreement with us, pursuant to which he receives annual consulting fees of $100,000. Either party may terminate the consulting agreement at any time upon 30 days written notice. Mr. West is subject to certain non-compete and non-solicitation restrictions while a consultant and for two years after the termination of his consultancy. In addition, Mr. West is subject to confidentiality and non-disparagement restrictions. (4) The table below discloses the aggregate number of outstanding restricted stock units held by each Non-Employee Director as of December 28, 2023.
Director Compensation(1)(2)(3)(4)(5)
| Name | Restricted Stock Units Outstanding | | Axelrod, Norman | 1,550 | | Starrett, Peter | 1,550 | | Kersey, Melissa | 1,009 | | Young, Charles | 1,550 | | Thornton, Felicia | 2,656 | | Sullivan, Richard | 1,550 | | Marshall, Ryan | 3,015 | | James, Dwight | 1,550 | | Giles, William | 1,550 |
Director Compensation(1)(2)(3)(4)(5)
(5) For Fiscal 2023, Messrs. Taylor and West did not receive compensation for their services as directors. All other Directors (collectively, “Non-Employee Directors”) each earned director fees in Fiscal 2023 as provided in the above table and as described below: For Fiscal 2023, our Non-Employee Directors were paid the following fees: • an annual cash retainer of $80,000; • an additional annual cash retainer of $125,000 to the non-executive chair of our Board; • an additional annual cash retainer of $25,000 to the chair of our Audit Committee; an additional annual cash retainer of $20,000 to the chair of our Compensation Committee; an additional annual cash retainer of $20,000 to the chair of our Nominating Committee • an additional annual cash retainer of $10,000 to a non-chair member of our Audit Committee; • an additional annual cash retainer of $10,000 to a non-chair member of our Compensation Committee; and • an additional annual cash retainer of $7,500 to the non-chair of our Nominating Committee. In addition, in Fiscal 2023, our Board approved a grant of 1,009 restricted stock units to Ms. Kersey and 1,550 restricted stock units to each of our other Non-Employee Directors, which will vest in full on the first anniversary of grant date, subject to the applicable Non-Employee Director’s continued service through the vesting date. Directors who are not Non-Employee Directors will not receive any compensation for their services as directors. We reimburse our directors for reasonable out-of-pocket expenses incurred in connection with the performance of their duties as directors, including travel expenses in connection with their attendance in-person at board and committee meetings. We maintain a Director Deferred Compensation Program. Under the Director Deferred Compensation Program, Non-Employee Directors may elect in advance to defer all or part of their annual cash and equity retainer fees received in connection with their service on the board. Elections to defer annual retainer fees must be made prior to the end of the calendar year immediately preceding the calendar year in which such annual retainer fees would otherwise be paid. For Fiscal 2023, we discontinued elections under the Director Deferred Compensation Program. A Non-Employee Director may elect, prior to the end of the calendar year immediately preceding the calendar year in which such cash fees would otherwise be paid, to receive all or any portion of the cash retainer and meeting fees in the form of restricted shares (or, commencing with cash fees received in Fiscal 2023, restricted share units), which will vest in full upon the first anniversary of the grant date, subject to the applicable Non-Employee Director’s continued service through the vesting date.