DEF 14A of Fossil Group, Inc.
Filed May 10, 2024 · FY20230001104659-24-059888
ITEMS OF BUSINESS
| Fiscal 2023 and 2022 Summary Compensation Table | 24 | | Narrative Disclosure to Summary Compensation Table | 25 | | Perquisites | 31 | | Employment Agreements | 31 | | Outstanding Equity Awards At 2023 Fiscal Year-End Table | 32 | | 2016 Incentive Plan | 33 | | 2008 Incentive Plan | 33 | | Pay Versus Performance | 34 | | Post-Termination Compensation | 36 | | Delinquent Section 16(a) Reports | 38 | | PROPOSAL 2: APPROVAL, ON AN ADVISORY BASIS, OF COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS | 39 | | PROPOSAL 3: APPROVAL OF THE FOSSIL GROUP, INC. 2024 LONG-TERM INCENTIVE PLAN | 40 | | Equity Compensation Plan Information | 40 | | Description of the 2024 Plan | 41 | | PROPOSAL 4: APPROVAL OF THE AMENDMENT TO THE THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT THE REVERSE STOCK SPLIT | 50 | | PROPOSAL 5: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 57 | | Independent Registered Public Accounting Firm Fees | 57 | | DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS | 59 | | ANNUAL REPORT | 59 | | OTHER BUSINESS | 59 | | QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING | 60 | | APPENDIX A: FOSSIL GROUP, INC. 2024 LONG-TERM INCENTIVE PLAN | A-1 |
PROXY SUMMARY
PROXY SUMMARY This proxy statement (this “Proxy Statement”) is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Fossil Group, Inc., a Delaware corporation (the “Company”), of your proxy to be voted at the 2024 Annual Meeting of Stockholders of the Company (the “Annual Meeting”) to be held on June 21, 2024, at the time and place and for the purpose of voting on the matters set forth in the Notice of Annual Meeting of Stockholders (the “Annual Meeting Notice”) and at any adjournment(s) or postponement(s) thereof. These matters include: 1. To elect nine (9) directors to the Board to serve for a term of one year or until their respective successors are elected and qualified. 2. To hold an advisory vote on executive compensation as disclosed in these materials. 3. To vote on a proposal to approve the Fossil Group, Inc. 2024 Long-Term Incentive Plan. 4. To vote on a proposal to amend the Third Amended and Restated Certificate of Incorporation to effect a reverse stock split of the shares of our common stock at a ratio of not less than 1-for-2 and not greater than 1-for-50, along with a corresponding reduction in the total number of authorized shares of our common stock, with the exact ratio of, effective time of and decision to implement the reverse stock split to be determined by the Board of Directors in its sole discretion (the “Reverse Stock Split”). 5. To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 28, 2024. 6. To transact any and all other business that may properly come before the meeting or any adjournment(s) or postponement(s) thereof. We began mailing the Notice of Internet Availability of Proxy Materials (the “Proxy Notice”), and first made available the Proxy Statement and the accompanying form of the proxy to our stockholders, on or about May 10, 2024. When proxies are properly executed and received, the shares represented thereby will be voted at the Annual Meeting in accordance with the directions noted thereon. If no direction is indicated, the shares will be voted: FOR each of the nine nominees named in this Proxy Statement for election to the Board under Proposal 1; FOR approval of the compensation of the Company’s Named Executive Officers (as defined in Executive Compensation) under Proposal 2; FOR the approval of the Fossil Group, Inc. 2024 Long-Term Incentive Plan under Proposal 3; FOR the amendment to the Third Amended and Restated Certificate of Incorporation to effect a Reverse Stock Split under Proposal 4; and FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 28, 2024 under Proposal 5.
Mark R. Belgya
Mark R. Belgya Mark R. Belgya was appointed to the Board in May 2018, and he is currently Chairman of the Company’s Audit Committee and a member of the Compensation and Talent Management Committee. Mr. Belgya served as Vice Chair and Chief Financial Officer of The J.M. Smucker Company (NYSE: SJM), a leading manufacturer and distributor of consumer food, beverage, and pet food
Mark R. Belgya
| 2024 PROXY STATEMENT | 3 |
Mark R. Belgya
products (“Smucker”), from May 2016 until his retirement in September 2020. Mr. Belgya joined Smucker in an internal audit capacity in 1985 and rose through finance positions of increasing responsibility becoming Corporate Controller in 1997, Treasurer in 2001, and Chief Financial Officer in 2005. Prior to joining Smucker, Mr. Belgya was a staff auditor from 1982 until 1985 for Ernst & Whinney, a multinational professional services and consultancy, now known as Ernst & Young. Mr. Belgya currently serves on the board of directors of Hamilton Beach Brands Holding Company (NYSE: HBB), a designer, marketer, and distributor of consumer, commercial, and specialty small appliances and kitchen equipment brands, where he serves on the Audit Review Committee, Compensation and Human Capital Committee and Planning Advisory Committee. Mr. Belgya has extensive leadership experience as Chief Financial Officer of a large multinational organization and possesses a deep understanding of risk and capital allocation for growth, developed through his finance and accounting positions held at Smucker, his various board positions and his public accounting experience and has been determined by the Board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules.
Jeffrey N. Boyer
Jeffrey N. Boyer Mr. Boyer has served as Interim Chief Executive Officer and Director since March 2024. Previously, Mr. Boyer served as Executive Vice President, Chief Operating Officer from April 2021 to March 2024. Mr. Boyer served as Chief Operating Officer, Chief Financial Officer and Treasurer from April 2020 until April 2021. Mr. Boyer served as Executive Vice President, Chief Financial Officer and Treasurer from October 2017 until April 2020. Mr. Boyer previously served on the Company’s Board from December 2007 until October 2017. Mr. Boyer served as Executive Vice President and Chief Financial Officer for Pier 1 Imports, Inc. from June 2015 until October 2017. Prior to joining Pier I Imports, Mr. Boyer served as Executive Vice President, Chief Administrative Officer and Chief Financial Officer for Tuesday Morning Corporation from September 2013 until June 2015. Mr. Boyer served as Executive Vice President and Chief Operating Officer of 24 Hour Fitness Worldwide Holdings, Inc., from June 2012 until September 2013 and as its Executive Vice President and Chief Financial Officer from April 2008 until June 2012. Mr. Boyer served as President and Chief Financial Officer of Michaels Stores, Inc. (“Michaels”) from July 2007 until April 2008 and Co-President and Chief Financial Officer from March 2006 to July 2007. Mr. Boyer also held Chief Financial Officer roles at Kmart Corporation and Sears, Roebuck & Company. Mr. Boyer was elected to the Board of Directors of Sally Beauty Holdings, Inc. in July 2022 and serves on the Audit Committee and Compensation and Talent Committee of the Company. Mr. Boyer has extensive finance an operations experience, leadership experience and a deep knowledge of the Company and its businesses, having served on the Board or as an executive officer of the Company since 2007.
Pamela B. Corrie
Pamela B. Corrie Pamela B. Corrie was appointed to the Board in March 2024, and she is currently a member of the Company’s Nominating and Corporate Governance Committee. Ms. Corrie has over 25 years of experience in complex corporate turnarounds and restructuring strategy. After practicing law at Weil, Gotshal & Manges for a decade, Ms. Corrie served in multiple executive leadership roles, including as the General Counsel for Risk and Restructuring at General Electric Capital Corporation, Americas from 2003 to 2015. She also served as Chief Executive Officer, Corporate division of Epiq Systems, Inc., a provider of legal and business services from 2015 to 2016, Chief Restructuring Officer of ABC Carpet and Home, Inc. from 2017 to 2019, and was a Managing Director at the financial advisory firm of Carl Marks Advisors from 2018 to 2023. Ms. Corrie does not currently serve on the board of directors of any other public company. Ms. Corrie currently holds board positions at Burford Capital, since January 2024, where she serves as a member of the Audit and Nominating and Governance Committees; AIG Financial Products, since 2022; and iFIT Health and Fitness Inc., since 2022, where she serves as Chair of the Nominating and Governance Committee and as a member of the Audit, Compensation and Special Committees. Ms. Corrie also previously served on a number of boards since 2019, including Pier 1 Imports, Inc., Lord & Taylor, Bed, Bath & Beyond (director of 15 subsidiaries), Boxed, Inc., Spark Networks SE, Blockfi Wallet LLC, Altera Infrastructure Holdings LLC, Katera, Inc. and AM Castle. Ms. Corrie was selected for her position as a director pursuant to the terms of the Company’s Cooperation Agreement with Buxton. Ms. Corrie has extensive experience in corporate restructurings and turnarounds.
Pamela B. Corrie
| 4 | WWW.FOSSILGROUP.COM |
Susie Coulter
Susie Coulter Susie Coulter was appointed to the Board in December 2022, and she is currently a member of the Company’s Nominating and Corporate Governance Committee. Ms. Coulter is the founder and Chief Executive Officer of ARQ Botanics LLC, a personal care company specializing in all-natural skin care products. Previously, Ms. Coulter was the co-founder and served as Chief Executive Officer of Bronty Beauty LLC, a beauty company specializing in all-natural skin care products, from January 2017 to December 2020. From November 2012 to March 2016, Ms. Coulter served as the President of Victoria’s Secret Beauty for L Brands, Inc. (n/k/a Victoria’s Secret & Co., which was separated from L Brands, Inc. in 2021). From 1998 to 2012, Ms. Coulter served in a number of leadership roles, most recently as President of Polo Ralph Lauren Retail Stores, at Ralph Lauren Corporation, an apparel retailer. Ms. Coulter serves on the board of directors of Abercrombie & Fitch Co., where she is Chair of the Environmental, Social and Governance Committee. Ms. Coulter has executive leadership experience having served as a founder and chief executive officer in addition to her roles as president for large retail organizations. Ms. Coulter also has experience with supply chain and logistics, marketing, global operations, merchandising and consumer facing retail.
Eugene I. Davis
Eugene I. Davis Eugene I. Davis was appointed to the Board in March 2024, and he is currently a member of the Company’s Audit Committee. Mr. Davis, over the course of the past 40 years, has served as chairman, chairman of audit, compensation, nominating and governance, finance, and special committees, director, chief executive officer or chief restructuring officer of more than 250 public and private companies and businesses operating in diverse sectors, including consumer products and retail. During the past five years, Mr. Davis was a member of the board of directors of each of Aeromexico, Babylon Holdings Limited, Bluestem Group Inc., F45 Training Holdings Inc., GTT Communications, Inc., Hycroft Mining Holding Corporation, Loyalty Ventures Inc., MediaMath Holdings, Inc., Parker Drilling Company, PGX Holdings, Inc., Skillsoft Corp., Verso Corporation, and VICI Properties Inc. Mr. Davis does not currently serve on the board of directors of any other public company. In his capacity as an executive, director and advisor he has managed, restructured, sold, liquidated and advised businesses across multiple sectors on business transformations, complex transactions, operational turnarounds and leadership succession planning. He is currently the Chairman and Chief Executive Officer of PIRINATE Consulting Group, LLC, a privately held consulting firm specializing in turnaround management, merger and acquisition consulting and strategic planning advisory services for domestic and international public and private business entities. Mr. Davis has extensive leadership, finance and governance experience, has served in an executive capacity in a broad range of industries and has led the restructuring efforts at a number of companies and has been determined by the Board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules.
Kim Harris Jones
Kim Harris Jones Kim Harris Jones was appointed to the Board in October 2019, and she is currently a member of the Company’s Audit Committee and Nominating and Corporate Governance Committee. Ms. Harris Jones served as Senior Vice President and Corporate Controller of Mondelez International, Inc. (NASDAQ: MDLZ), the global publicly traded snacking foods business, from 2012 until she retired in 2015. Previously, she served as Senior Vice President and Corporate Controller of Kraft Foods from 2009 to 2012. Prior to joining Kraft Foods, she held numerous leadership roles during 17 years with Chrysler Group LLC, including Senior Vice President, Corporate Controller and General Auditor from 2008 to 2009. Ms. Harris Jones also serves on the boards of United Rentals, Inc. (NYSE: URI), where she serves as Chair of the Audit Committee and a member of the Compensation and Talent Management Committee, and TrueBlue, Inc. (NYSE: TBI), where she chairs the Audit Committee, and serves as a member of the Innovation and Technology Committee and the Corporate Governance and Nominating Committee. Ms. Harris Jones has leadership experience as a Corporate Controller and auditor of large organizations, extensive experience in accounting and finance, and has been determined by the Board to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules.
Kevin Mansell
Kevin Mansell Kevin Mansell was elected to the Board in May 2019, and he is currently Chairman of the Board and Chairman of the Company’s Compensation and Talent Management Committee. Mr. Mansell served as Chairman, CEO and President of Kohl’s Corporation
Kevin Mansell
| 2024 PROXY STATEMENT | 5 |
Kevin Mansell
(NYSE: KSS), one of the largest department store retail chains in the United States (“Kohl’s”), until his retirement in May 2018. Mr. Mansell joined Kohl’s in 1982 as a Divisional Merchandise Manager and was promoted to General Merchandise Manager in 1987. Mr. Mansell was promoted to Senior Executive Vice President of Merchandising and Marketing of Kohl’s in 1998, and was named President and Director in 1999. He was promoted to Kohl’s CEO in 2008 and named Chairman of the Board in 2009. Prior to joining Kohl’s, Mr. Mansell spent seven years in the Venture Store division of The May Department Stores Company, an American department store holding company, where he held a variety of positions in buying and merchandising. Mr. Mansell serves as a director, the co-chair of the Nominating and Corporate Governance Committee and as a member of the Audit Committee of Columbia Sportswear Company (NASDAQ: COLM), a leading innovator in active outdoor apparel, footwear, accessories, and equipment. Mr. Mansell also serves as a director of Chico’s FAS, Inc. (NYSE: CHS), an omnichannel specialty retailer of women’s private branded casual-to-dressy clothing, intimates, and complementary accessories, where he serves as lead independent director, member of the Human Resources, Compensation and Benefits Committee and member of the Executive Committee. Mr. Mansell has extensive leadership experience as the CEO of a large national organization and has over 40 years of retail experience.
Marc R. Y. Rey
Marc R. Y. Rey Marc R. Y. Rey was appointed to the Board in July 2020 and is currently a member of the Company’s Compensation and Talent Management Committee. Mr. Rey has served as the Chief Executive Officer of Beautycounter, a private clean beauty brand, since February 2022. Mr. Rey served as President and Chief Executive Officer of Shiseido Americas, a division of Shiseido Company Limited, and Chief Growth Officer of Shiseido Group Limited, a leading global beauty brand, from September 2015 until September 2020. From July 2014 until August 2015, Mr. Rey served as Senior Vice President for Coty North America and President of Coty USA, a leading global beauty company, and served as Regional Vice President North America from December 2012 to July 2014. From March 2009 to July 2012, Mr. Rey served in various roles for L’Oreal USA, including President International Designers Collections from September 2010 to July 2012, President Specialty Beauty Group from October 2009 to September 2010 and President Giorgio Armani and Yves Saint Laurent Beauty USA from March 2009 to October 2009. Mr. Rey has extensive leadership experience as the CEO of a major beauty company and has over 25 years of consumer products experience.
Gail B. Tifford
Gail B. Tifford Gail B. Tifford was appointed to the Board in August 2017, and she is currently the Chair of the Company’s Nominating and Corporate Governance Committee. Ms. Tifford has served as a partner at True Search, a global platform for talent management products and services, since May 2022. Ms. Tifford previously served as Chief Brand Officer for WW International, Inc. (f/k/a Weight Watchers), a global weight management service company, from March 2018 until August 2021. Previously, Ms. Tifford served in a variety of leadership roles at Unilever, a leading global consumer goods company that offers products in the food, home care, personal care and refreshment segments. Her roles included brand, marketing, and digital innovation from 1996 until 2009, and after she rejoined Unilever in 2011, most recently serving as Vice President, Media North America and Global Digital Media Innovation. From October 2009 until May 2011, Ms. Tifford served as Vice President for Strategic Partnerships at MTV Networks, a cable and satellite television channel owned by Viacom Media Networks. Ms. Tifford has substantial experience in branding and marketing and a proven track record of building brands in an evolving digital landscape.
Gail B. Tifford
| 6 | WWW.FOSSILGROUP.COM |
Peer Group
Peer Group Attracting, retaining, and motivating top talent is critical to drive our success. Each year we review our peer group to ensure total compensation components, design and practices are competitive with similar companies. The following was considered when determining our peer group: • companies who we compete against for attracting and retaining talent • industry, product category, geography and operational complexity • financials such as revenue and market capitalization • the opinion of proxy advisory firms such as ISS and Glass Lewis our compensation consultant’s feedback and recommendations
Peer Group
| 12 | WWW.FOSSILGROUP.COM |
Peer Group
Based on this analysis, for fiscal year 2023, we removed Urban Outfitters, Inc. For fiscal year 2023, the peer group consisted of the following 13 companies:
Peer Group
| Caleres, Inc. Chico’s FAS, Inc. Columbia Sportswear Company Crocs, Inc. Deckers Outdoor Corporation | Express, Inc. Genesco, Inc. G-III Apparel Group, Ltd. Guess?, Inc. Movado Group, Inc. | Oxford Industries, Inc. Steven Madden, Ltd. Wolverine World Wide, Inc. |
Peer Group
Korn Ferry obtains relevant data for each company from each company’s respective SEC filings, from Korn Ferry’s proprietary surveys or as otherwise available. The data reviewed by the Compensation and Talent Management Committee in setting fiscal year 2023 compensation included compensation information for each of the named executive officers identified by each company as well as each company’s financial performance data. From this company-specific information as well as the surveys reviewed, Korn Ferry presented the data to the Compensation and Talent Management Committee by each compensation element. This data provided visibility into how the compensation of each of our NEOs compared to the peer group counterpart with respect to each compensation component and total compensation. The Compensation and Talent Management Committee evaluated base salaries, target bonuses, actual bonuses, equity awards and any other incentive programs for which we could obtain data. The Compensation and Talent Management Committee did not assign any particular weights or formulas to the individual elements of compensation at peer companies or shown in the surveys. Rather, the Compensation and Talent Management Committee evaluated the compensation of each of the NEOs in light of the totality of the information reviewed for their peers.
Peer Group
| 2024 PROXY STATEMENT | 13 |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Equity Compensation
Equity Compensation Each outside director of the Company who does not elect to decline to participate in the Fossil Group, Inc. 2016 Long-Term Incentive Plan (the “2016 Plan”) is automatically granted restricted stock units (“RSUs”) as follows: (1) on the date of the annual stockholders meeting, each outside director is automatically granted RSUs with a fair market value of approximately $130,000, which RSUs will vest 100% on the earlier of (a) the date of the next annual stockholders meeting or (b) one year from the date of grant, provided the outside director is providing services to the Company or a subsidiary on that date; and (2) each individual who first becomes an outside director is automatically granted a one-time grant, effective as of the date of appointment, equal to the grant he or she would have received if he or she had been elected at the previous annual stockholders meeting, pro-rated based on the number of days such director will actually serve before the one-year anniversary of such previous annual stockholders meeting, which RSUs will vest 100% one year from the date of grant, provided the outside director is providing services to the Company or a subsidiary on that date. Notwithstanding the foregoing, in the event of an outside director’s termination of service due to his or her death, all unvested RSUs will immediately become 100% vested. RSUs are awarded subject to such terms and conditions as established by the Compensation and Talent Management Committee, which may include the requirement that the holder forfeit the RSUs upon termination of service during the period of restriction. The target total annual compensation for non-employee directors is $220,000. In May 2023, the Board approved changes to the composition of, but not the total target, compensation of non-employee directors for 2023 to enhance the competitiveness of non-employee director pay for retention and recruitment purposes and to conserve the number of RSU shares granted to non-employee directors pursuant to the automatic grant under the 2016 Plan. In May 2023, the Board increased the non-employee director annual retainer from $90,000 to $140,000 and reduced the fair market value of the May 2023 RSU grant to non-employee directors from $130,000 to $80,000.
Equity Compensation
| 2024 PROXY STATEMENT | 19 |
FISCAL 2023 DIRECTOR COMPENSATION TABLE
FISCAL 2023 DIRECTOR COMPENSATION TABLE The following table provides information regarding director compensation for fiscal year 2023. Non-employee directors who join the Board during the fiscal year receive a pro-rated annual cash retainer.
FISCAL 2023 DIRECTOR COMPENSATION TABLE
| NAME (1)(2) | FEES EARNED OR PAID IN CASH ($)(3) | STOCK AWARDS ($)(4) | TOTAL ($) | | Mark R. Belgya | 172,285 | 79,998 (5) | 252,283 | | William B. Chiasson | 165,698 | 79,998 (5) | 245,696 | | Susie Coulter | 128,553 | 79,998 | 208,551 | | Kim Harris Jones | 162,285 | 79,998 (5) | 242,283 | | Kevin Mansell | 175,219 | 79,998 | 255,217 | | Marc R. Y. Rey | 130,219 | 79,998 | 210,217 | | Gail B. Tifford | 135,219 | 79,998 | 215,217 |
FISCAL 2023 DIRECTOR COMPENSATION TABLE
(1) Mr. Kartsotis was a director and NEO during fiscal year 2023. Mr. Kartsotis did not receive any additional compensation for services as a director. As such, information about his compensation is listed in the Fiscal 2023 and 2022 Summary Compensation Table below. (2) Our directors’ outstanding equity awards as of fiscal year end 2023 were as follows: Mr. Belgya — 35,476 RSUs; Mr. Chiasson — 35,476 RSUs; Ms. Coulter — 35,476 RSUs; Ms. Harris Jones — 35,476 RSUs; Mr. Mansell — 35,476 RSUs; Mr. Rey — 35,476 RSUs; and Ms. Tifford — 35,476 RSUs. (3) Consists of retainer fees. (4) Consists of an award of RSUs granted pursuant to the 2016 Plan to each director on May 24, 2023. Pursuant to the 2016 Plan, each outside director is to receive an automatic grant of RSUs on the date of the Annual Stockholders Meeting equal to the number of shares of Common Stock having an aggregate fair market value of $130,000. However, in 2023, as a result of the Company’s stock price performance, each outside director agreed that an aggregate fair market value of $80,000 on the date of grant would be used in calculating the number of shares to be granted. Awards vest 100% on the earlier of (i) the next annual stockholders meeting or (ii) one year from the date of grant. The amounts shown were not actually paid to the directors. Rather, as required by the rules of the SEC, the amounts represent the aggregate grant date fair value of the RSUs awarded to each of them in fiscal year 2023. These values were determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). The aggregate grant date fair value of the RSUs is equal to the midpoint between the high and low sales prices of our Common Stock on the date of grant multiplied by the number of shares granted. On May 24, 2023, the date of grant for all directors, the midpoint of the high and low sales prices of our Common Stock was $2.255 per share. The amounts reported do not include any reduction in the value of the awards for the possibility of forfeiture. (5) Messrs. Belgya and Chiasson and Ms. Harris Jones elected to defer the receipt of their 2023 RSU grant that vests in May 2024, until their termination of service as a director of the Company.
Melissa B. Lowenkron
Melissa B. Lowenkron Melissa B. Lowenkron has served as Chief Brand Officer since March 2023. Ms. Lowenkron is responsible for brand strategy and management and product design, development and merchandising for FOSSIL, MICHELLE, SKAGEN and ZODIAC. Ms. Lowenkron joined the Company in January 2022 as Senior Vice President and General Manager, Fossil Brand. Prior to joining the Company, Ms. Lowenkron served as the Senior Vice President/General Merchandising Manager for handbags, ladies shoes, beauty and jewelry at Neiman Marcus Group, a luxury department store, from October 2018 to February 2021. From April 2014 to October 2018, Ms. Lowenkron served as the Senior Vice President/General Merchandising Manager for ready-to-wear, handbags, ladies shoes, beauty, jewelry, men’s and kids at Bergdorf Goodman, a subsidiary of Neiman Marcus Group. Ms. Lowenkron joined Neiman Marcus Group in 1997 and held various other leadership positions, including Vice President/Divisional Merchandising Manager Men’s Sportswear from October 2010 to April 2014.
Melissa B. Lowenkron
| 2024 PROXY STATEMENT | 23 |
Melissa B. Lowenkron
In accordance with the executive compensation rules applicable to smaller reporting companies, this section contains a discussion of all plan and non-plan compensation awarded to, earned by or paid to the following individuals. These individuals are referred to as the Named Executive Officers (“NEOs”) in this Proxy Statement.
Melissa B. Lowenkron
| NAME | POSITION | | Kosta N. Kartsotis* | Former Chairman of the Board and Chief Executive Officer | | Jeffrey N. Boyer | Interim Chief Executive Officer** | | Darren E. Hart*** | Former Executive Vice President, Chief Human Resources Officer | | Greg A. McKelvey**** | Former Executive Vice President, Chief Commercial Officer |
Melissa B. Lowenkron
* Mr. Kartsotis stepped down as Chairman and a member of the Board and as Chief Executive Officer effective March 13, 2024. ** Mr. Boyer served as Executive Vice President and Chief Operating Officer during 2023 and was named Interim Chief Executive Officer effective March 13, 2024. *** Mr. Hart’s employment with the Company was terminated effective April 26, 2024. **** Mr. McKelvey’s employment with the Company was terminated effective August 11, 2023.
FISCAL 2023 AND 2022 SUMMARY COMPENSATION TABLE
| NAME AND PRINCIPAL POSITION | YEAR | SALARY ($) | BONUS ($) | STOCK AWARDS ($)(1) | OPTION AWARDS ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($)(2) | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($) | ALL OTEHR COMPENSATION ($) | TOTAL ($) | | Kosta N. Kartsotis (3) Former Chief Executive Officer and Director | 2023 | 1,057,692 | -0- | -0- | -0- | 393,250 | -0- | -0- | 1,450,942 | | | 2022 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | | Jeffrey N. Boyer Interim Chief Executive Officer | 2023 | 719,250 | -0- | 262,598 | -0- | 197,794 | -0- | 24,594 (4) | 1,204,236 | | | 2022 | 716,288 | -0- | 862,571 | -0- | 197,075 | -0- | 27,066 | 1,803,000 | | Darren E. Hart Former Executive Vice President, Chief Human Resources Officer | 2023 | 700,550 | -0- | 321,680 | -0- | 144,488 | -0- | 20,657 (5) | 1,187,375 | | | 2022 | 697,158 | -0- | 629,850 | -0- | 143,963 | -0- | 18,807 | 1,489,778 | | Greg A. McKelvey Former Executive Vice President, Chief Commercial Officer | 2023 | 484,369 | -0- | 399,462 | -0- | 124,465 | -0- | 351,837 (6) | 1,360,133 | | | 2022 | 737,754 | -0- | 888,455 | -0- | 202,979 | -0- | 8,176 | 1,837,364 |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE The following table provides information about the number of outstanding equity awards held by our NEOs at fiscal year-end 2023. The table also includes, where applicable, the value of these awards based on the closing price of our Common Stock on Nasdaq on December 29, 2023, which was $1.46 per share. All awards vest one third each year over three years following the grant date, except as otherwise noted.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
| Name | | Option Awards(1) | | | | Stock Awards | | | | | | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (2) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) | | Kosta N. Kartsotis (3) | N/A | — | — | — | — | — | — | — | — | | Jeffrey N. Boyer | 4/15/2021 | — | — | — | — | 11,886 | 17,354 | 11,886 (4) | 17,354 | | | 4/15/2022 | — | — | — | — | 26,414 | 38,564 | 26,414 (5) | 38,564 | | | 4/15/2023 | — | — | — | — | 40,713 | 59,441 | 40,713 (6) | 59,441 | | Darren E. Hart | 3/15/2016 | 18,515 | — | 47.99 | 3/15/2024 | — | — | — | — | | | 4/15/2021 | — | — | — | — | 8,679 | 12,671 | 8,679 (4) | 12,671 | | | 4/15/2022 | — | — | — | — | 19,288 | 28,160 | 19,288 (5) | 28,160 | | | 4/15/2023 | — | — | — | — | 69,873 | 102,015 | 29,873 (6) | 43,615 | | Greg A. McKelvey | 3/15/2016 | 17,634 | — | 47.99 | 3/15/2024 | — | — | — | — | | | 4/15/2021 | — | — | — | — | 12,243 | 17,875 | 12,243 (4) | 17,875 | | | 4/15/2022 | — | — | — | — | 13,604 | 19,862 | 13,604 (5) | 19,862 | | | 4/15/2023 | — | — | — | — | 27,312 | 39,876 | 13,978 (6) | 20,408 |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
(1) Consists of stock appreciation rights (“SARs”) issued pursuant to the Fossil Group, Inc. 2008 Long-Term Incentive Plan (the “2008 Plan”) and the 2016 Plan. (2) Consists of RSUs issued pursuant to the 2016 Plan. (3) Mr. Kartsotis refused all forms of equity compensation for fiscal years 2022 and 2023. (4) These PSUs were granted on April 15, 2021 and will vest, if at all, one-third each year over three years following the grant date. Vesting is subject to satisfaction of the applicable performance criteria and is generally subject to the recipient’s continued employment through that date. As required by the SEC’s disclosure rules, the number of PSUs shown assumes that target levels of performance (100%) will be achieved. The Compensation and Talent Management Committee will determine the actual levels of performance achieved within 60 days of the vesting date. (5) These PSUs were granted on April 15, 2022 and will vest, if at all, one-third each year over three years following the grant date. Vesting is subject to satisfaction of the applicable performance criteria and is generally subject to the recipient’s continued employment through that date. As required by the SEC’s disclosure rules, the number of PSUs shown assumes that target levels of performance (100%) will be achieved. The Compensation and Talent Management Committee will determine the actual levels of performance achieved within 60 days of the vesting date. These PSUs were granted on April 15, 2023 and will vest, if at all, one-third each year over three years following the grant date. Vesting is subject to satisfaction of the applicable performance criteria and is generally subject to the recipient’s continued employment through that date. As required by the SEC’s disclosure rules, the number of PSUs shown assumes that target levels of performance (100%) will be achieved. The Compensation and Talent Management Committee will determine the actual levels of performance achieved within 60 days of the vesting date.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
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PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
| | | | | | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: | | | FISCAL YEAR (a) | SUMMARY COMPENSATION TABLE TOTAL FOR PEO (b) | COMPENSATION ACTUALLY PAID TO PEO (c) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NEOS (d) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOS (e) | TOTAL SHAREHOLDER RETURN (f) | NET INCOME (IN $M) (g) | | 2023 | $1,450,942 | $1,450,942 | $1,250,581 | $712,032 | $16.84 | $(156.7) | | 2022 | $0 | $0 | $1,509,719 | $553,910 | $49.71 | $(43.5) | | 2021 | $0 | $0 | $2,157,293 | $2,403,236 | $118.69 | $26.6 |
PAY VERSUS PERFORMANCE
Columns (b) and (c). Mr. Kartsotis did not receive any compensation from the Company in fiscal years 2021 and 2022. Column (d). The following non-PEO NEOs are included in the average figures in Column (e): 2021: Messrs. Boyer, Belcher, Doshi, Hart and McKelvey 2022: Messrs. Boyer, Doshi, Hart and McKelvey 2023: Messrs. Boyer, Hart and McKelvey The amounts shown in column (d) do not reflect the actual amount of compensation earned by or paid to our non-PEO NEOs during the applicable years. For information regarding the decisions made by our Compensation and Talent Management Committee in regard to the non-PEO NEOs’ compensation for each fiscal year, please see (i) the Executive Compensation section of this Proxy Statement for fiscal year 2023 and (ii) the Compensation Discussion and Analysis sections of the proxy statements reporting pay for fiscal years 2022 and 2021. Column (e). Reflects the average “compensation actually paid” for our non-PEO NEOs in each of 2023, 2022 and 2021, as determined in accordance with SEC rules. Such amounts were computed by making the following adjustments to total compensation, as reported in the Summary Compensation Table (“SCT”), for each year: Amounts subtracted from the average SCT total to calculate Average Compensation Actually Paid to the Non-PEO NEOs for the years 2023, 2022 and 2021, respectively, include ($327,913), ($671,697), and ($826,930) for the average date of grant fair value of stock awards granted in the fiscal year. Amounts added to (or subtracted from) the Average SCT for the years 2023, 2022 and 2021, respectively, also include: $121,983, $226,683 and $634,156 for the average fair value of stock awards that were granted in the year and remain outstanding at the end of the year; ($167,878), $(617,951) and $235,153 for the average change in fair value of stock awards that were granted in prior years and still outstanding at the end of each respective year; ($132,169), $107,155 and $203,564 for the average change in fair value of stock awards that were granted in prior years and vested during each respective year. Column (f). For the relevant fiscal year, represents the cumulative total shareholder return (“TSR”) of the Company for the measurement periods ending on December 31 of each of 2023, 2022 and 2021, respectively. Column (g). Reflects “Net Income” in the Company’s Consolidated Income Statements included in the Company’s Annual Reports on Form 10-K for fiscal years 2023, 2022 and 2021.
PAY VERSUS PERFORMANCE
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NARRATIVE TO PAY VERSUS PERFORMANCE TABLE
NARRATIVE TO PAY VERSUS PERFORMANCE TABLE This section should be read in conjunction with Executive Compensation beginning on page 24, which includes additional discussion of our objectives of executive compensation and benefits program and how they are aligned with the Company’s financial and operational performance. Our Compensation and Talent Management Committee does not use “compensation actually paid” as a basis for making compensation decisions. Each of our non-PEO NEO’s total target compensation incentivizes short-term and long-term performance by using performance goals aligned with our shareholders’ interests. The majority of total target compensation was weighted toward long-term equity performance with (i) time-based RSUs and (ii) PSUs with adjusted operating margin as the financial performance metric for the 2021 and 2023 PSU awards and adjusted operating income for the 2022 PSU awards. The short-term incentive program’s performance metrics include net sales, adjusted operating income and strategic goals. The charts below show, for the past three years, the relationship of TSR and net income relative to our PEO’s “compensation actually paid” and the average of our non-PEO NEO’s “compensation actually paid”.
NARRATIVE TO PAY VERSUS PERFORMANCE TABLE
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