DEF 14A of RH
Filed May 4, 2026 · FY20250001104659-26-054988
Fiscal 2025 Financial Performance
| (7) Includes 670 restricted stock awards that vest on June 26, 2026. |
Fiscal 2025 Financial Performance
| (10) Includes 46,434 shares of common stock held by various family trusts established by Mr. Demilio, 42,000 shares of common stock issuable upon the exercise of options that are exercisable within 60 days of April 21, 2026, 2,000 restricted stock awards that vest in two quarterly increments through October 17, 2026, 11,375 restricted stock awards that vest in seven quarterly increments through January 1, 2028 and 670 restricted stock awards that vest on June 26, 2026. |
Fiscal 2025 Financial Performance
| (13) Includes 9,525 shares of common stock held by the Rowghani Keshavarz Living Trust and 670 restricted stock awards that vest on June 26, 2026. |
Fiscal 2025 Financial Performance
| (14) Includes 1,981,572 shares of common stock our executive officers and directors have a right to acquire upon the exercise of options that are exercisable within 60 days of April 21, 2026, 2,000 restricted stock awards that vest in two quarterly increments through October 17, 2026, 11,375 restricted stock awards that vest in seven quarterly increments through January 1, 2028 and 4,690 restricted stock awards that vest on June 26, 2026. |
Fiscal 2025 Financial Performance
| 12 | 2026 PROXY STATEMENT | SECURITY OWNERSHIP OF TOP SHAREHOLDERS & LEADERSHIP |
Fiscal 2025 Financial Performance
| SECURITY OWNERSHIP OF TOP SHAREHOLDERS & LEADERSHIP | 2026 PROXY STATEMENT | 13 |
Fiscal 2025 Financial Performance
DIRECTORS
Fiscal 2025 Financial Performance
| GARY FRIEDMAN | | | Chairman and Chief Executive Officer Age: 68 Director since 2013 Board Committees: Real Estate Class III Director: Continuing in office until the 2027 annual meeting | Gary Friedman has served as our Chairman and Chief Executive Officer of the Company, and Founder of the RH brand as we know it today, since January 2014. Mr. Friedman joined RH in April 2001 when the business was known as Restoration Hardware, a $350 million mall-based retail business on the verge of bankruptcy, selling mostly nostalgic discovery items and some Mission-style furniture. He has spent the past 25 years transforming every aspect of the business and building RH into the leading luxury interior design brand in the world today with revenues in excess of $3 billion. Prior to RH, Mr. Friedman spent 14 years in various positions at Williams-Sonoma Inc. lastly serving as President and Chief Operating Officer, and President of the Williams-Sonoma, Pottery Barn, and West Elm brands. Mr. Friedman was responsible for transforming Pottery Barn from a $50 million tabletop and accessories business into a billion dollar plus home lifestyle brand. Mr. Friedman also developed the revolutionary Williams-Sonoma Grande Cuisine stores and conceptualized and developed the West Elm brand. Mr. Friedman began his career as a stock boy at the Gap store in Santa Rosa, California. He spent eleven years with the Gap, and held the positions of Store Manager, District Manager, and Regional Manager overseeing 63 stores in Southern California. | | Qualifications: | Mr. Friedman was selected to our Board of Directors because of his leadership in re-conceptualizing and developing the RH brand and business into the leading luxury home brand in the North American market, his deep and unmatched expertise in developing and rapidly growing many of the leading consumer brands in the home furnishings space, and his extensive knowledge of building and leading complex multi-branded and multi-channel organizations. |
Fiscal 2025 Financial Performance
| COMPANY LEADERSHIP, DIRECTORS & OFFICERS | 2026 PROXY STATEMENT | 15 |
Fiscal 2025 Financial Performance
| MARK DEMILIO | | | Lead Independent Director Age: 70 Director since 2009 Board Committees: Audit, Compensation, Nominating and Corporate Governance, Real Estate Class I Director: Continuing in office until the 2028 annual meeting | Mark Demilio has served as a member of our Board of Directors since September 2009 and currently serves as the board’s Lead Independent Director. Mr. Demilio currently serves as a member of the Board of Directors and Chairman of the Audit Committee of SCP Health, a privately-held provider of emergency medicine and hospitalist services through physician staffing and management since September 2015. From January 2021 until May 2025, Mr. Demilio served as a consultant to Spinnaker Medical, a privately held special purpose acquisition company and since March 2025 has been a business and financial consultant to Boylston Surgical LLC, a start-up in the business of providing orthobiologics products. Mr. Demilio served as a member of the Board of Directors of Cosi, Inc., a national restaurant chain, from April 2004 to May 2017, served on its audit committee, its compensation committee and its nominating and corporate governance committee, and served for a time as Chairman of the Board of Directors of Cosi and as the interim Chief Executive Officer of Cosi. From June 2018 through December 2020, Mr. Demilio was a member of the Board of Directors and Chairman of the audit committee of Nurse Assist, a medical device manufacturer and distributer. From February 2014 through March 2016, Mr. Demilio served as a member of the Board of Directors and Chairman of the audit committee of The Paslin Company, a private company that designs, assembles and integrates robotic assembly lines for the automotive industry. From December 2000 until his retirement in October 2008, Mr. Demilio served as the Chief Financial Officer of Magellan Health Services, Inc., a Nasdaq-listed managed specialty healthcare company that managed the delivery of behavioral healthcare treatment services, specialty pharmaceuticals and radiology services. Mr. Demilio has also been the General Counsel for Magellan Health Services, the Chief Financial Officer and General Counsel of Youth Services International, Inc., an attorney specializing in corporate, transactional and securities law with the law firms of Miles & Stockbridge and Piper & Marbury, a financial analyst for CareFirst BlueCross BlueShield of Maryland and a certified public accountant with Arthur Andersen LLP. | | Qualifications: | Mr. Demilio was selected to our Board of Directors because he possesses particular knowledge and experience in accounting, finance and capital structure, strategic planning and leadership of complex organizations and board practices of other major corporations. |
Fiscal 2025 Financial Performance
| 16 | 2026 PROXY STATEMENT | COMPANY LEADERSHIP, DIRECTORS & OFFICERS |
Fiscal 2025 Financial Performance
| LEONARD SCHLESINGER | | | Age: 73 Director since 2014 Board Committees: Compensation Class I Director: Continuing in office until the 2028 annual meeting | Leonard Schlesinger was appointed to our Board of Directors in April 2014. Dr. Schlesinger has served as Baker Foundation Professor of Business Administration and Chair of the Practice Faculty at Harvard Business School, a role he returned to in July 2013 after serving as President of Babson College from July 2008 until July 2013 and has held various positions at public and private companies. He also serves as a Director of Viewpost Holdings. From 1999 to 2007, Dr. Schlesinger held various executive positions at Limited Brands, Inc. (L Brands, Inc.), a formerly NYSE-listed company, including Vice Chairman of the Board of Directors and Chief Operating Officer. While at Limited Brands, he was responsible for the operational and financial functions across the enterprise, including Express, Limited Stores, Victoria’s Secret Beauty, Bath and Body Works, C.O. Bigelow, Henri Bendel, and White Barn Candle Company. Dr. Schlesinger also served as Executive Vice President and Chief Operating Officer at Au Bon Pain Co., Inc. and as a director of numerous public and private retail, consumer products, and technology companies. Dr. Schlesinger has also held leadership roles at leading MBA and executive education programs and other academic institutions, including thirty years at Harvard Business School, where he served as the George Fisher Baker Jr. Professor of Business Administration. Dr. Schlesinger holds a Doctor of Business Administration from Harvard Business School, an MBA from Columbia University, and a Bachelor of Arts in American Civilization from Brown University. | | Qualifications: | Dr. Schlesinger was selected to our Board of Directors because he possesses extensive leadership, operational, financial, and business expertise from his significant and broad experience with numerous private and public retail companies. | | KEITH BELLING | | | Age: 68 Director since 2016 Board Committees: Real Estate Class III Director: Continuing in office until the 2027 annual meeting | Keith Belling has served on our Board of Directors since April 2016 and previously served as an advisor to the Board of Directors from May 2015 to April 2016. Mr. Belling is the founder and former Chief Executive Officer of popchips, Inc. (“popchips”), a leading better-for-you snack food business that launched in 2007. He previously served as popchips’ Chief Executive Officer from 2007 through 2012, leading the company to sales and distribution at over 30,000 retail stores across North America and the United Kingdom and served as the Chairman of the Board from 2007 through 2019. Mr. Belling has served as an advisor to several innovative consumer, real estate and technology companies, including LBA Realty, Inc., Ripple and Olly Nutrition. Mr. Belling also has founded other businesses, including e-commerce company AllBusiness.com, a leading small business portal, founded in 1998, where Mr. Belling formerly served as Chief Executive Officer and which was acquired by NBCi. Mr. Belling was a real estate attorney with Morrison & Foerster LLP, where he represented a diverse clientele including developers and real estate investors. | | Qualifications: | Mr. Belling was selected to our Board of Directors because of his experience as a founder, leader, and entrepreneur of several innovative consumer companies, as well as his background and experience in the real estate sector. |
Fiscal 2025 Financial Performance
| COMPANY LEADERSHIP, DIRECTORS & OFFICERS | 2026 PROXY STATEMENT | 17 |
Fiscal 2025 Financial Performance
| CARLOS ALBERINI | | | Age: 70 Director since 2010 Board Committees: None Class III Director: Continuing in office until the 2027 annual meeting | Carlos Alberini has served on our Board of Directors since June 2010. Mr. Alberini currently serves as a member of the Board of Directors and Chief Executive Officer of Guess?, Inc. (“Guess”), a specialty retailer of apparel and accessories, since February 2019. Mr. Alberini previously served as the Chairman and Chief Executive Officer of Lucky Brand from February 2014 to February 2019. Mr. Alberini served as our Co-Chief Executive Officer from June 2010 through October 2012 and from July 2013 through January 2014, and he served as our sole Chief Executive Officer from October 2012 through July 2013. Mr. Alberini was President and Chief Operating Officer of Guess from December 2000 to June 2010. From May 2006 to July 2006, Mr. Alberini served as Interim Chief Financial Officer of Guess. Mr. Alberini served as a member of the Board of Directors of Guess from December 2000 to September 2011. Prior to Guess, Mr. Alberini served as Senior Vice President and Chief Financial Officer of Footstar, Inc., a retailer of footwear from October 1996 to December 2000. From May 1995 to October 1996, Mr. Alberini served as Vice President of Finance and Acting Chief Financial Officer of the Melville Corporation, a retail holding corporation. From 1987 to 1995, Mr. Alberini was with The Bon-Ton Stores, Inc., an operator of department stores, in various capacities, including Corporate Controller, Senior Vice President, Chief Financial Officer and Treasurer. Prior to that, Mr. Alberini served in various positions at PricewaterhouseCoopers LLP. | | Qualifications: | Mr. Alberini was selected to our Board of Directors because he possesses particular knowledge and experience in retail and merchandising, branded consumer goods, accounting, financing and capital finance, board practices of other large retail companies and leadership of complex organizations. | | ERI CHAYA | | | Age: 52 Director since 2012 Board Committees: None Class I Director: Continuing in office until the 2028 annual meeting | Eri Chaya has served on our Board of Directors since 2012, and has served as our President, Co-Chief Creative and Merchandising Officer since May 2025. Prior to that, she served as our President, Chief Creative and Merchandising Officer from November 2017 to May 2025. Ms. Chaya leads product curation and integration, brand creative and business development for our brand concepts across the Company’s physical, digital and print channels of distribution. Ms. Chaya previously served as RH’s Co-President, Chief Creative and Merchandising Officer and Director from May 2016 to November 2017, Chief Creative Officer from April 2008 to May 2016 and Vice President of Creative from July 2006 to April 2008. Prior to RH, Ms. Chaya was a creative director at Goodby, Silverstein and Partners, an international advertising agency, and a creative director at Banana Republic. | | Qualifications: | Ms. Chaya was selected to our Board of Directors because of her extensive knowledge and experience in design, product development, brand development, marketing and advertising. |
Fiscal 2025 Financial Performance
| 18 | 2026 PROXY STATEMENT | COMPANY LEADERSHIP, DIRECTORS & OFFICERS |
Fiscal 2025 Financial Performance
| HILARY KRANE | | | Age: 62 Director since 2016 Board Committees: Audit Class II Director: Continuing in office until the Annual Meeting | Hilary Krane has served on our Board of Directors since her appointment in June 2016. Ms. Krane is currently the Chief Legal Officer for Creative Artists Agency. Up until February 2022, Ms. Krane served in various executive roles at Nike since 2010, including most recently as Executive Vice President, Chief Administrative Officer and General Counsel for NIKE, Inc. Prior to joining NIKE, Inc., Ms. Krane was General Counsel and Senior Vice President for Corporate Affairs at Levi Strauss & Co. from 2006 to 2010. From 1996 to 2006, she was a partner and assistant general counsel at PricewaterhouseCoopers LLP. Ms. Krane has been a director at the Federal Reserve Bank of San Francisco, Portland Branch since January 2018. Ms. Krane holds a Bachelor of Arts from Stanford University and a J.D. from the University of Chicago. | | Qualifications: | Ms. Krane was selected to our Board of Directors because of her extensive operational, compliance and business experience contributing to the growth and development of innovative and iconic global brands. | | KATIE MITIC | | | Age: 56 Director since 2013 Board Committees: Audit Class II Director: Continuing in office until the Annual Meeting | Katie Mitic is Chief Executive Officer and Co-founder of SomethingElse, Inc., a technology-enabled beverage platform building a portfolio of modern consumer brands, a role she has held since 2019. Ms. Mitic previously held senior leadership roles at several leading technology companies during periods of significant platform growth. At Facebook, Inc., she served as Director of Platform and Mobile Marketing, where she helped scale the company’s global developer ecosystem and strategic partnerships. At Palm, Inc., she served as Senior Vice President of Product Marketing, responsible for expanding the company’s product portfolio and international footprint prior to its acquisition by Hewlett-Packard. Earlier, Ms. Mitic held leadership roles at NetDynamics (acquired by Sun Microsystems), where she helped launch one of the industry’s first application servers; at Four11, where she helped build RocketMail, the early web-based email service that became Yahoo! Mail; and at Yahoo!, where she served as Vice President and General Manager. Ms. Mitic currently serves on the boards of DVx Ventures and LeanIn.Org. She holds a Bachelor of Arts from Stanford University and an M.B.A. from Harvard Business School. | | Qualifications: | Ms. Mitic was selected to our Board of Directors because of her entrepreneurial leadership and extensive experience building and scaling innovative technology and consumer businesses. |
Fiscal 2025 Financial Performance
| COMPANY LEADERSHIP, DIRECTORS & OFFICERS | 2026 PROXY STATEMENT | 19 |
Fiscal 2025 Financial Performance
| ALI ROWGHANI | | | Age: 53 Director since 2015 Board Committees: Nominating and Corporate Governance Class II Director Continuing in office until the Annual Meeting | Ali Rowghani was appointed to our Board of Directors on January 22, 2015. Mr. Rowghani has served in executive leadership positions at innovative growth companies, including Twitter, Inc. and Pixar Animation Studios, Inc. He is currently the founder and Managing General Partner of First Harmonic, a technology investing firm established in 2025. Mr. Rowghani was previously the Manager of YCombinator Continuity Fund, an investor in growth-stage startups that Mr. Rowghani launched in 2015. At Twitter, Mr. Rowghani was hired as the Company’s first Chief Financial Officer in March 2010, and later served as Chief Operating Officer, with responsibility for business development, platform, media, product, and business analytics, from December 2012 to June 2014. Prior to Twitter, from June 2002 to February 2010, Mr. Rowghani served in various leadership roles at Pixar, including Chief Financial Officer and Senior Vice President, Strategic Planning, reporting to Pixar founder and President, Ed Catmull. Mr. Rowghani holds a Bachelor of Arts in International Relations and an M.B.A. from Stanford University. | | Qualifications: | Mr. Rowghani was selected to our Board of Directors because he possesses extensive operational, financial and leadership experience, and because of his expertise in scaling innovative and high-growth companies. |
Fiscal 2025 Financial Performance
| 20 | 2026 PROXY STATEMENT | COMPANY LEADERSHIP, DIRECTORS & OFFICERS |
Fiscal 2025 Financial Performance
EXECUTIVE OFFICERS Below is a list of the names and ages, as of April 21, 2026, of our executive officers and a description of their business experience.
Fiscal 2025 Financial Performance
| GARY FRIEDMAN | | | Chairman and Chief Executive Officer Age: 68 | Gary Friedman has served as our Chairman and Chief Executive Officer of the Company, and Founder of the RH brand as we know it today, since January 2014. His description appears under “Company Leadership Directors & Officers—Directors.” | | ERI CHAYA | | | President, Co-Chief Creative and Merchandising Officer Age: 52 | Eri Chaya has served as our President, Co-Chief Creative and Merchandising Officer since May 2025 and on our Board of Directors since 2012. Prior to that, she served as our President, Chief Creative and Merchandising Officer from November 2017 to May 2025. Her description appears under “Company Leadership Directors & Officers—Directors.” | | LISA CHI | | | President, Co-Chief Creative and Merchandising Officer Age: 51 | Lisa Chi has served as our President, Co-Chief Creative and Merchandising Officer since May 2025. Ms. Chi co-leads product curation and integration, brand creative and business development for our brand concepts across the Company’s physical, digital and print channels of distribution. Ms. Chi brings extensive experience in merchandising, product development and brand strategy, having served as Chief Merchandising Officer at Arhaus from July 2021 to May 2025. Prior to that, Ms. Chi held the role of Senior Vice President of Merchandising for Upholstery at RH from March 2017 to June 2020. Previously, Ms. Chi served as Senior Vice President and General Merchandise Manager of Stores, Digital and Catalog at Talbots from July 2014 to March 2016. Ms. Chi holds a Bachelor of Arts in Public Policy from Stanford University. |
Fiscal 2025 Financial Performance
| COMPANY LEADERSHIP, DIRECTORS & OFFICERS | 2026 PROXY STATEMENT | 21 |
Fiscal 2025 Financial Performance
| JACK PRESTON | | | Chief Financial Officer Age: 51 | Jack Preston has served as our Chief Financial Officer since March 2019 and leads all financial functions, including strategic and financial planning, accounting, treasury, tax, internal audit, investor relations, as well as our legal, compliance and technology teams, across the Company’s multiple businesses and brands. Mr. Preston served as RH’s Senior Vice President, Finance and Chief Strategy Officer from August 2014 to March 2019, and Senior Vice President, Finance and Strategy from April 2013 to August 2014. Prior to RH, Mr. Preston worked for Bank of America Merrill Lynch for over 12 years, where he served as a Director in the consumer and retail investment banking group. Mr. Preston holds a Bachelor of Commerce degree from the Sauder School of Business at the University of British Columbia. | | STEFAN DUBAN | | | Former Chief Gallery & Customer Officer Age: 43 | Stefan Duban served as our Chief Gallery & Customer Officer from 2021 until his resignation, effective January 26, 2026. In this role, Mr. Duban was responsible for the global operations of the Company’s Galleries, Interior Design, Hospitality, Trade, Contract, Outlet and the Gallery Optimization Teams. Mr. Duban began his career as a part-time sales associate in our Thousand Oaks, California Gallery and also held the positions of Gallery Leader, Vice President of Home Delivery, Vice President and Regional Field Leader. |
Fiscal 2025 Financial Performance
| 22 | 2026 PROXY STATEMENT | COMPANY LEADERSHIP, DIRECTORS & OFFICERS |
Fiscal 2025 Financial Performance
| COMPANY LEADERSHIP, DIRECTORS & OFFICERS | 2026 PROXY STATEMENT | 23 |
Fiscal 2025 Financial Performance
CORPORATE GOVERNANCE & DIRECTOR INDEPENDENCE We have a number of policies and practices related to corporate governance and oversight of our business. A number of the more important policies and procedures are described in this section of the proxy statement. CORPORATE GOVERNANCE GUIDELINES Our Corporate Governance Guidelines specify the distribution of rights and responsibilities of our Board of Directors and detail the rules and procedures for making decisions on corporate affairs. In general, the shareholders elect our Board of Directors, which is responsible for overall governance of our Company, including selection and oversight of key leadership, and leadership is responsible for running our day-to-day operations. Our Corporate Governance Guidelines are available on the Investor Relations section of our website at ir.rh.com under “Governance.” The contents of our website are not incorporated by reference into this proxy statement and are not soliciting materials. CODE OF ETHICS & CODE OF BUSINESS CONDUCT We have adopted a code of ethics for our chief executive officer and senior financial officers. We have also adopted a code of business conduct applicable to our team members, officers and directors. Copies of these codes are available on the Investor Relations section of our website at ir.rh.com under “Governance.” We expect that any amendment to, or waiver of, the requirements of the code of ethics for our chief executive officer and senior financial officers will be disclosed on our website and any waiver of the requirements of the code of business conduct relating to our executive officers and directors will be promptly disclosed to shareholders, in each case as required by applicable law or NYSE listing requirements. INCENTIVE COMPENSATION RECOUPMENT POLICY Effective October 2, 2023, our Board of Directors adopted an incentive compensation recoupment policy (the “Clawback Policy”) as required by Rule 10D-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the corresponding NYSE listing standards. In the event we are required to prepare an accounting restatement to correct material noncompliance with any financial reporting requirement under U.S. federal securities laws, the Clawback Policy requires us to recover erroneously awarded compensation that is granted, earned or vested based in whole or in part upon the attainment of a financial reporting measure and that is received by our current and former executive officers (as defined in Rule 10D-1) during the three fiscal years preceding the date that we are required to prepare the accounting restatement. The amount recoverable is the compensation paid or payable in excess of the amount that would have been paid or payable based on the restated financial results. In addition, as a public company subject to Section 304 of the Sarbanes-Oxley Act of 2002, if we are required to restate our financial results due to our material noncompliance, as a result of misconduct, with any financial reporting requirements under the federal securities laws, our Chief Executive Officer and Chief Financial Officer may be legally required to reimburse us for any bonus or incentive-based or equity-based compensation they receive.
Fiscal 2025 Financial Performance
| CORPORATE GOVERNANCE | 2026 PROXY STATEMENT | 25 |
Fiscal 2025 Financial Performance
INSIDER TRADING POLICY We have adopted an insider trading policy (the “Insider Trading Policy”) that governs the purchase, sale and other dispositions of our securities by our directors, officers, team members and other persons, which we believe is reasonably designed to promote compliance with insider trading laws, rules, regulations and listing standards applicable to us. Although the Insider Trading Policy does not apply to the Company itself, it is the Company’s practice to conduct transactions in its own securities only in compliance with all applicable securities laws and regulations. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to our Annual Report. COMPENSATION COMMITTEE INTERLOCKS & INSIDER PARTICIPATION No member of the compensation committee of our Board of Directors has served as one of our officers or been employed as one of our team members at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of our Board of Directors. None of our executive officers serves as a member of the Board of Directors of any other company that has an executive officer serving as a member of our compensation committee. None of our directors or executive officers are members of the same family. DELINQUENT SECTION 16(A) REPORTS Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors, executive officers and any person who owns more than 10% of our common stock to file initial reports of ownership and reports of changes in beneficial ownership with the SEC. Such persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file. Except as set forth herein, based solely on our review of the copies of such forms furnished to us and written representations from the directors and executive officers, we believe that all Section 16(a) filing requirements were met in a timely manner in fiscal 2025, except for a Form 4 filing for Ms. Chi. On June 17, 2025, a Form 4 filed on behalf of Ms. Chi to report a transaction was filed twelve business days late due to the Company having to reset her EDGAR codes upon her start of employment. COMPOSITION & QUALIFICATIONS OF OUR BOARD OF DIRECTORS Our Board of Directors consists of nine directors, including our Chairman and Chief Executive Officer. Our certificate of incorporation provides that, subject to any rights applicable to any then-outstanding preferred stock, our Board of Directors shall consist of such number of directors as determined from time to time by resolution adopted by a majority of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. Subject to any rights applicable to any then-outstanding preferred stock, any additional directorships resulting from an increase in the number of directors may only be filled by the directors then in office, unless otherwise required by law or by a resolution passed by our Board of Directors. The term of office for each director will be until his or her successor is elected at the applicable annual meeting of shareholders or his or her death, resignation or removal, whichever is earliest to occur. Our Board of Directors is divided into three classes, with each director serving a three-year term, and one class being elected at each year’s annual meeting of shareholders. Our directors by class are as follows: Class I: Eri Chaya, Mark Demilio and Leonard Schlesinger, with a term expiring at the 2028 annual meeting. Class II: Hilary Krane, Katie Mitic and Ali Rowghani, with a term expiring at the Annual Meeting. Class III: Gary Friedman, Carlos Alberini and Keith Belling, with a term expiring at the 2027 annual meeting.
Fiscal 2025 Financial Performance
| 26 | 2026 PROXY STATEMENT | CORPORATE GOVERNANCE |
Fiscal 2025 Financial Performance
| | | | | COMMITTEE MEMBERSHIP | | | | | NAME/CURRENT POSITION | AGE | DIRECTOR SINCE | INDEPENDENT | AUDIT | COMP. | NOM. & CORP. GOV. | REAL ESTATE | | Gary Friedman RH Chairman and CEO | 68 | Jul. 2013 | | | | | ∎ | | Carlos Alberini Director and CEO of Guess?, Inc. | 70 | Jun. 2010 | ● | | | | | | Keith Belling Founder and Former CEO of popchips, Inc. | 68 | Apr. 2016 | | | | | ∎ | | Eri Chaya RH President, Co-Chief Creative and Merchandising Officer | 52 | Nov. 2012 | | | | | | | Mark Demilio Director and Chairman of the Audit Committee of SCP Health | 70 | Sep. 2009 | ● | ⁕ | ∎ | ⁕ | ⁕ | | Hilary Krane Chief Legal Officer, Creative Artists Agency | 62 | Jun. 2016 | ● | ∎ | | | | | Katie Mitic CEO and Co-Founder of SomethingElse, Inc. | 56 | Oct. 2013 | ● | ∎ | | | | | Ali Rowghani Founder and Managing General Partner, First Harmonic | 53 | Jan. 2015 | ● | | | ∎ | | | Leonard Schlesinger Professor of Business Administration Harvard Business School | 73 | Apr. 2014 | ● | | ⁕ | | |
Fiscal 2025 Financial Performance
| ⁕ | Committee Chair |
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| ∎ | Committee Member |
Fiscal 2025 Financial Performance
| CORPORATE GOVERNANCE | 2026 PROXY STATEMENT | 27 |
Fiscal 2025 Financial Performance
| | EXPERIENCE | | | | | | | | NAME/CURRENT POSITION | BUSINESS LEADERSHIP | BRAND/ RETAIL | GROWTH COMPANY | PUBLIC CO. EXECUTIVE/ DIRECTOR | INVESTMENT/ FINANCIAL | LEGAL | RISK & GOVERNANCE | | Gary Friedman RH Chairman and CEO | ● | ● | ● | ● | | | | | Carlos Alberini Director and CEO of Guess?, Inc. | ● | ● | ● | ● | ● | | | | Keith Belling Founder and Former CEO of popchips, Inc. | ● | ● | ● | | ● | | | | Eri Chaya RH President, Co-Chief Creative and Merchandising Officer | | ● | ● | | | | | | Mark Demilio Director and Chairman of the Audit Committee of SCP Health | ● | | | ● | ● | ● | ● | | Hilary Krane Chief Legal Officer, Creative Artists Agency | | ● | | ● | | ● | ● | | Katie Mitic CEO and Co-Founder of SomethingElse, Inc. | ● | ● | ● | ● | | | ● | | Ali Rowghani Founder and Managing General Partner, First Harmonic | ● | ● | ● | ● | ● | | | | Leonard Schlesinger Professor of Business Administration Harvard Business School | ● | ● | ● | ● | | | ● |
Fiscal 2025 Financial Performance
We believe our Board of Directors should be composed of individuals with sophistication and experience in many substantive areas that impact our business. We believe experience, qualifications, or skills in the following areas are most important: (i) business expertise in general and specific familiarity with high growth business models; (ii) experience building high value and luxury brands; (iii) industry knowledge of retail and consumer; and (iv) domain expertise in specialized areas such as merchandising and advertising; sales and distribution; accounting, finance, and capital structure; strategic planning and leadership of complex organizations; legal/regulatory and government affairs; people leadership; and board practices of other major corporations. We believe that all our current board members possess the professional and personal qualifications necessary for board service and have highlighted selected noteworthy attributes for each board member in their individual biographies and as otherwise summarized above.
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| 28 | 2026 PROXY STATEMENT | CORPORATE GOVERNANCE |
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BOARD ASSESSMENT
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Our Board of Directors strongly believes its effectiveness is enhanced by being comprised of individuals with diverse backgrounds, skills and experience that are relevant to the role of the Board of Directors and the needs of the business. Accordingly, our Board of Directors regularly reviews the changing needs of the business and the skills and experience resident in its members, with the intention that the board will be periodically “renewed” as certain directors rotate off and new directors are recruited.
Fiscal 2025 Financial Performance
| CORPORATE GOVERNANCE | 2026 PROXY STATEMENT | 29 |
Fiscal 2025 Financial Performance
BOARD LEADERSHIP STRUCTURE; LEAD INDEPENDENT DIRECTOR Our Corporate Governance Guidelines provide that the roles of Chairman of our Board of Directors and Chief Executive Officer may be either separate or combined, and our Board of Directors exercises its discretion in combining or separating these positions as it deems appropriate. Our Board of Directors believes that the combination or separation of these positions should continue to be considered as part of our succession planning process. Currently, the roles are combined, with Mr. Friedman serving as Chairman of our Board of Directors and Chief Executive Officer. In July 2013, the Board of Directors created the position of Lead Independent Director and adopted a Lead Independent Director Charter, which is available on the Investor Relations section of our website at ir.rh.com under “Governance.” The Lead Independent Director Charter provides that the Lead Independent Director shall serve in a lead capacity to coordinate the activities of the other non-employee directors, to help facilitate communication between the Board of Directors and leadership, and perform such other duties and functions as directed by the Board of Directors from time to time. The Lead Independent Director presides over executive sessions of non-management directors. Mr. Demilio currently serves as our Lead Independent Director. We believe the appointment of Mr. Demilio as our Lead Independent Director is beneficial to the Company due to Mr. Demilio’s breadth of experience and ability to facilitate communication between leadership and the Board of Directors and devote significant time to the Company. Our Board of Directors has determined that the Lead Independent Director provides an important governance construct for the Board of Directors to enhance regular communication with the Company’s leadership team and in particular the Chairman and Chief Executive Officer. Our Corporate Governance Guidelines provide the flexibility for our Board of Directors to modify our leadership structure in the future as appropriate. We believe that our Company is well served by this flexible leadership structure. BOARD INDEPENDENCE In accordance with our Corporate Governance Guidelines, the Board of Directors affirmatively determines that each independent director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company) and meets the standards for independence as defined by applicable law and the rules of the NYSE.
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| 30 | 2026 PROXY STATEMENT | CORPORATE GOVERNANCE |
Fiscal 2025 Financial Performance
Our Board of Directors undertook its annual review of the independence of our directors and considered whether any director has a material relationship with us that could compromise that director’s ability to exercise independent judgment in carrying out that director’s responsibilities. Our Board of Directors affirmatively determined that each of Mr. Alberini, Mr. Demilio, Ms. Krane, Ms. Mitic, Mr. Rowghani and Dr. Schlesinger is an “independent director,” as defined under the applicable rules of the NYSE and the SEC, and that the other members of the Board of Directors are not independent. The board’s independence determination was based on information provided by our current directors. In particular, in making its determination that Mr. Alberini is an independent director, the Board of Directors considered that under the rules of the NYSE and the SEC, Mr. Alberini could be deemed independent for membership on the Board of Directors after February 2017 given that his prior service as the Company’s Co-Chief Executive Officer and Chief Executive Officer had occurred more than three years prior to such date. In addition, as of February 2019, Mr. Alberini also meets the enhanced independence standard for a director who has not served as an employee of the Company for more than five years. In reaching its conclusions regarding the independence of Mr. Alberini, the Board of Directors further considered Mr. Alberini’s time away from the management of RH, the fact that he had served as the chief executive officer of Lucky Brands, and the fact that he subsequently left Lucky Brands and is now serving as the chief executive officer of Guess?, Inc., along with other prior and existing relationships between the Company and Mr. Alberini. Further, the Board of Directors determined that each member of the Board of Directors’ audit committee, compensation committee, and nominating and corporate governance committee satisfies independence standards applicable to each committee, on which he or she serves. Although the Board of Directors determined that Mr. Alberini is an independent director under the applicable rules of the NYSE and the SEC, the Board of Directors has elected not to appoint Mr. Alberini to any of the committees of the Company that are required under applicable rules of the NYSE or SEC to be composed entirely of independent directors. BOARD MEETINGS During fiscal 2025, our Board of Directors held a total of five meetings. Additionally, our independent directors met in a number of executive sessions presided over by our Lead Independent Director. During fiscal 2025, all of our director nominees and all of our incumbent directors attended at least 75% of the total meetings such directors were eligible to attend during the period in terms of the board, the committees of the board on which they served and independent or non-executive board meetings. Agendas and topics for board and committee meetings are developed through discussions among leadership and members of our Board of Directors and its committees. Information and data that are important to the issues to be considered are distributed in advance of each meeting. Board of Directors meetings and background materials focus on key strategic, operational, financial, governance and compliance matters applicable to us.
Fiscal 2025 Financial Performance
| CORPORATE GOVERNANCE | 2026 PROXY STATEMENT | 31 |
Fiscal 2025 Financial Performance
COMMITTEE COMPOSITION & MEETINGS In fiscal 2025, our Board of Directors had the following standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. All standing board committees are composed of independent directors. Committee membership and the number of meetings each standing committee held in fiscal 2025 are as follows:
Fiscal 2025 Financial Performance
| | STANDING COMMITTEES | | | | DIRECTORS | AUDIT(3) | COMPENSATION(3) | NOM. & CORP. GOVERNANCE(3) | | Mark Demilio(1)(2) | Chair | Member | Chair | | Hilary Krane | Member | | | | Katie Mitic | Member | | | | Ali Rowghani | | | Member | | Leonard Schlesinger | | Chair | | | Number of meetings in fiscal 2025 | 8 | 5 | 1 |
Fiscal 2025 Financial Performance
| (1) Designated by the Board of Directors as an “audit committee financial expert.” |
Fiscal 2025 Financial Performance
| (2) Currently the board’s Lead Independent Director. |
Fiscal 2025 Financial Performance
| (3) Committee members had various informal meetings in fiscal 2025. |
Fiscal 2025 Financial Performance
Our Board of Directors has delegated various responsibilities and authorities to its three standing committees, as described below and in the committee charters, as applicable. The board committees regularly report on their activities and actions to the full Board of Directors as they deem appropriate and as the Board of Directors may request. Each member of the audit committee, the compensation committee, and the nominating and corporate governance committee was appointed by our Board of Directors, which reviews committee composition from time to time.
Shareholder Outreach & Feedback
| WHAT WE HEARD | WHAT WE DID | | Shareholders have communicated to us their preference that we provide clear and readily accessible information in our proxy statements | We have continued to fine tune our proxy statement presentation, including providing more information in tables and charts rather than within lengthy narrative form in order to make the proxy statement easier to read and the information more accessible | | Shareholders have communicated a preference for further disclosures around the nature and reason for the metrics used in our annual (short-term) cash bonus or Leadership Incentive Program | We have provided additional disclosure in “Executive Compensation—Compensation Discussion & Analysis” in order to explain the reasons we chose certain compensation metrics and to show how our program is aligned with shareholder interests | | Shareholders have requested information related to other performance metrics such as total shareholder return (“TSR”) | After receiving feedback from shareholders regarding the disclosure of other performance metrics for our business, we have been providing additional information regarding key metrics such as TSR in our Annual Report and in our shareholder letters in which we report our financial results and we disclose similar information here in our proxy statement for convenience We have also included a stock performance table to disclose a measure of TSR, as well as enhanced disclosures regarding TSR in “Executive Compensation—Compensation Discussion & Analysis—Stock Performance” Although we do not use TSR as a direct metric as part of our long-term incentive strategy, we believe that the stock price performance metric that we do use in equity awards is likely to be well correlated with other metrics such as TSR | | Shareholders have requested additional disclosure regarding our environmental, social and governance practices and profile | We have included information regarding our corporate social responsibility program, including our approach to environmental, social and governance initiatives and other related topics relevant to the Company’s business. We have included disclosures with respect to, among other things, material sourcing, ethical manufacturing and workforce health and wellness Please see the “Corporate Governance” and “Corporate Responsibility” sections of this proxy statement |
Shareholder Outreach & Feedback
BOARD’S ROLE IN RISK OVERSIGHT Our Board of Directors is responsible for overseeing our risk management process. Our Board of Directors focuses on our general risk management strategy, including the most significant risks facing us, and oversees the implementation of risk mitigation strategies by leadership. Our Board of Directors is also apprised by leadership of particular risk management matters in connection with the Board’s general oversight and approval of corporate matters and significant transactions. In addition, each of the board committees is responsible for risk management under its area of responsibility and consistent with its charter and such other responsibilities as may be delegated to them by the Board of Directors from time to time. See “Corporate Responsibility—Board Oversight of Cybersecurity Matters.” DIRECTOR & EXECUTIVE STOCK OWNERSHIP GUIDELINES Our Board of Directors has adopted stock ownership guidelines applicable to all directors and senior executive officers of the Company in order to further align the financial interest of our directors and senior executive officers with the interests of our investors. The guidelines provide that the Chief Executive Officer should own RH stock with a value at least equal to six times annual base salary and other senior executive officers should own two times annual base salary. The guidelines provide that directors should own RH stock with a value at least equal to two times the amount of the annual cash retainer paid to directors. Senior executive officers and directors are expected to achieve the stock ownership levels under these guidelines by the later of five years from the effective date of the guideline or the date of their hire, promotion or appointment, except for the Chief Executive Officer for whom these guidelines were effective immediately upon their adoption in May 2018. All senior executive officers and directors are in compliance with the guidelines. Our Chairman and Chief Executive Officer, Mr. Friedman, has consistently maintained a significant equity ownership interest in the Company and, as of April 21, 2026, beneficially owns approximately 24.3% of our common stock, which, based on the average closing price for RH stock for fiscal 2025, was valued at approximately 690 times his annual base salary for fiscal 2025, far above the multiple of six times salary minimum ownership requirement. The foregoing calculation was based on shares owned directly, shares owned indirectly and reported as beneficially owned for Section 16 reporting purposes, and the “in the money” value of stock options, restricted stock and restricted stock units that are no longer subject to vesting or selling restrictions. Additional information regarding the shareholdings of our other named executive officers and directors is set forth in this proxy statement in the section entitled “Security Ownership of Top Shareholders & Leadership.” STOCK TRADING PRACTICES Our Insider Trading Policy, among other things, prohibits our officers, including our named executive officers, directors and team members from trading during quarterly blackout periods and contains other restrictions on trading activities designed to avoid circumstances where Company insiders may be deemed to have traded on material nonpublic information.
10b5-1 Trading Plans
| NAME | FEES EARNED | STOCK AWARDS(1) | TOTAL | | Carlos Alberini | $135,000 | $129,337 | $264,337 | | Keith Belling | $135,000 | $129,337 | $264,337 | | Mark Demilio | $290,000 | $129,337 | $419,337 | | Hilary Krane | $160,000 | $129,337 | $289,337 | | Katie Mitic | $160,000 | $129,337 | $289,337 | | Ali Rowghani | $150,000 | $129,337 | $279,337 | | Leonard Schlesinger | $210,000 | $129,337 | $339,337 |
10b5-1 Trading Plans
| (1) Reflects the aggregate grant date fair value of the awards of restricted stock computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock-Based Compensation (“FASB ASC 718”). Refer to Note 16—Stock-Based Compensation in our audited consolidated financial statements contained in our Annual Report. Amounts shown do not reflect compensation actually received or that may be realized in the future by the director. |
10b5-1 Trading Plans
At January 31, 2026, the last day of fiscal 2025, the aggregate number of unvested restricted stock awards and unexercised stock options held by each of our directors, other than Mr. Friedman and Ms. Chaya, is set forth below. Information regarding equity awards held by Mr. Friedman and Ms. Chaya is set forth in the table entitled “—Outstanding Equity Awards at Fiscal Year-End.”
10b5-1 Trading Plans
| NAME | UNVESTED RESTRICTED STOCK | | UNEXERCISED STOCK OPTIONS | | Carlos Alberini | 670(1) | — | | | Keith Belling | 670(1) | — | | | Mark Demilio | 4,170(2) | 66,000 | (3) | | Hilary Krane | 670(1) | — | | | Katie Mitic | 670(1) | — | | | Ali Rowghani | 670(1) | — | | | Leonard Schlesinger | 670(1) | — | |
10b5-1 Trading Plans
| (1) Unvested restricted stock award will vest as to 100% of the shares on June 26, 2026. |
10b5-1 Trading Plans
| (2) In connection with Mr. Demilio’s ongoing service as Lead Independent Director, he was granted (1) 4,000 shares of restricted stock, with 1/8 of the aggregate number of shares vesting on a quarterly basis from April 2024, of which 500 were unvested as of January 31, 2026, and (2) 8,000 shares of restricted stock, with 1/8 of the aggregate number of shares vesting on a quarterly basis from October 2024, of which 3,000 were unvested as of January 31, 2026, in each case subject to his continuous service as the Lead Independent Director. In addition, 670 shares of restricted stock for service as a director will vest as to 100% of the shares on June 26, 2026. |
Responsible Sourcing
We have partnered with Benchmark International to monitor products made with endangered plant species or plant species that are harvested illegally. Benchmark International, LLC is an accredited, independent auditing and testing lab with world-wide expertise in the areas of the U.S. Lacey Act & EUTR/EUDR compliance, TSCA compliance and wood testing. RH and Waterworks continue to partner with Assent, an industry-leading supply chain data management company that enhances automation and accuracy when collecting, submitting or managing data related to Corporate Responsibility, product safety and compliance and vendor compliance. Assent has automated our processes such as vendor onboarding and other vendor compliance processes. Assent has assisted us in achieving compliance with product regulatory requirements, including CA Proposition 65, EU RoHS, TSCA Restrictions, and EU Waste Framework. In addition, Waterworks has worked extensively to ensure all of its faucets, water dispensers, and pot fillers met NSF 61 certification standards by the required date. We have established guidelines around the use in our supply chain of conflict minerals (which we define to include columbite-tantalite (coltan), cassiterite, gold, wolframite, and their derivatives, which are limited to tantalum, tin and tungsten) sourced from central African countries to address concerns over the exploitation and trade of minerals that supports ongoing conflicts in the region. We require our vendors to conduct their sourcing in compliance with local and internationally recognized laws and with commonly viewed industry practices with respect to animal welfare. We do not condone the mistreatment of animals. We monitor certain animal and natural products such as those made with down and feathers, including a number of measures and practices in support of our efforts to obtain down and feathers from ethical and humane sources. We offer alternatives to down and feathers with respect to many of our products to provide for additional customer choice and preference. We also comply with and monitor bans in certain states and municipalities on the sale of fur, and we monitor supply chain traceability with regard to the sources of our Belgian linen. Since 2021, RH has partnered with Benchmark International, LLC to support due diligence on the wood raw materials and components used in RH products. This partnership focuses on building transparency throughout RH supply chains to identify, evaluate, and mitigate risk associated with wood materials potentially taken, possessed, transported, or sold in contravention of domestic, tribal, or foreign law, as required by the U.S. Lacey Act.
Compensation Framework
Compensation Framework We believe that compensation paid to our executive officers should be: Closely aligned with the performance of the Company, on both a short-term and long-term basis; Linked to specific, measurable results intended to create value for shareholders; Transparent, accessible and understandable by all stakeholders to understand what drives our executives; and Tailored to achieve the key goals of our compensation program and philosophy. Our executive compensation programs are aligned with our shareholders’ interests, with performance-based compensation being tied primarily to our annual earnings before taxes and our long-term stock price performance. In addition, we have structured the equity awards made to our Chairman and Chief Executive Officer to have a substantial performance component. Performance for these purposes is measured by stock price appreciation over a minimum four-year service period. We achieve this alignment in part by providing a substantial portion of compensation to our executive officers in the form of equity awards. This approach generally aligns executive compensation with shareholder stock price appreciation. In the case of our Chairman and Chief Executive Officer, we have structured his equity grants in reliance on multi-year stock option awards. Mr. Friedman’s grants for both 2017 and 2020 were designed to require substantial stock price appreciation from the Company’s share price on the date of grant. As further described below, in the case of Mr. Friedman’s 2020 Stock Option Award, the option was fully vested and exercisable upon grant, but the shares underlying the option are subject to selling restrictions that were initially measured over four annual performance years from May 2021 through May 2025, with any shares that remained subject to selling restrictions after that initial period continuing to be eligible for release in later performance years in accordance with the award agreement. Mr. Friedman’s base salary has remained unchanged since it was last increased in June 2013 when he returned to the Company, at the time, as our Chairman and Co-Chief Executive Officer. Mr. Friedman’s bonus opportunity has not changed since fiscal 2020. We have made these compensation decisions with respect to our Chairman and Chief Executive Officer to place the highest priority in his compensation incentives on performance using the measure of stock price appreciation, which we believe is the single best overall measure of performance that aligns the executive’s compensation with shareholder returns over time. The compensation committee’s decision-making regarding executive compensation in any given fiscal year is informed in part by financial performance as well as the strategic and business initiatives pursued by us during the year and over time. We undergo an annual process to assess the compensation of our senior leadership team to ensure that there is strong alignment with our performance goals and long-term business strategy. In terms of equity compensation for our executive officers, we have instituted a number of investor-friendly practices in connection with stock-based incentive awards. We recognize the dilutive impact of stock-based incentive awards on our shareholders and strive to balance the impact of dilution with our need to attract and retain talent. In addition, we rely on a number of other measures to address the dilutive effects of equity awards including: (i) use of longer term vesting with respect to many equity awards, a large number of which have a seven-year vesting measurement period, (ii) back-end loaded vesting with respect to many of our equity grants, (iii) avoiding mechanistic or formulaic grant practices that may create expectations around annual refresh grants that are not linked to market and business conditions, and (iv) repurchase of shares under our share repurchase programs as an offsetting mechanism to reduce dilution from equity awards. We believe that our approach to equity compensation for our executive officers has contributed to our overall business performance and will contribute to our expectation of long-term appreciation in our share price.
Performance-Based Annual Cash Incentives
Performance-Based Annual Cash Incentives We have adopted the Leadership Incentive Program (“LIP”), which is a cash-based incentive compensation program designed to motivate and reward annual performance for eligible team members, including our named executive officers. The compensation committee considers annually whether LIP bonus targets should be established for the year and, if so, approves the group of team members eligible to participate in the LIP for that year. The LIP includes various incentive levels based on the participant’s position with the Company. Cash bonuses under the LIP link a significant portion of the named executive officer’s total cash compensation to our overall performance. The LIP bonus for our named executive officers is based on achievement of financial objectives, rather than individual performance, in order to focus the entire senior management team on the attainment of enterprise-wide financial objectives. Each named executive officer is provided a target bonus amount equal to a percentage of the eligible portion of such officer’s base salary (which eligible portion is based on the salary earned during the fiscal year). The target bonus amount is based on the Company meeting the target achievement level for the relevant financial objective. The compensation committee, either as a committee or with the Board of Directors as a whole, sets the financial objectives each year under the LIP, and the payment and amount of any bonus depends upon whether we achieve at least a certain percentage of the financial objectives under the LIP. The compensation committee, either as a committee or with the Board of Directors as a whole, generally establishes such objectives for the Company at levels that it believes can be reasonably achieved with strong performance over the fiscal year. In making the determination of minimum and target levels, the compensation committee and/or the Board of Directors may consider the specific circumstances facing our Company during the year and our strategic plan for the year. The compensation committee and the Board of Directors have discretion to interpret the LIP’s performance objectives in light of relevant factors both internal and external to the Company, and to adjust the amount paid under the LIP accordingly. The compensation committee and the Board of Directors exercise such discretion based on business judgment, taking into account both recurring and extraordinary factors affecting performance of the Company as well as other relevant factors. The compensation committee may consult the Board of Directors, as deemed necessary, with respect to material issues concerning the administration of the LIP, including interpretations of the terms of the LIP. For fiscal 2025, the performance metric for the LIP was based on adjusted income, which we define as consolidated operating income, adjusted for the impact of certain non-recurring and other items that we do not consider representative of our ongoing operating performance (“Adjusted Income”). We believe that Adjusted Income provides meaningful information regarding the performance of our business and facilitates a meaningful evaluation of operating results on a comparable basis with historical results. We do not adjust for depreciation or amortization. Therefore, Adjusted Income indirectly reflects our capital use and capital expenditures, which are important factors of our long-term business strategy. We believe the use of Adjusted Income is relevant in assessing our overall performance and aligns this performance metric with the interests of shareholders. The compensation committee reviewed the Company’s fiscal 2025 financial results related to the Adjusted Income LIP targets and determined that the Company did not reach the threshold achievement level required to become entitled to a payment. As a result, the compensation committee determined that no amounts would be paid under the LIP for fiscal 2025, other than to Ms. Chi, who is guaranteed a minimum bonus payout under the LIP for fiscal 2025, fiscal 2026 and fiscal 2027.
Performance-Based Annual Cash Incentives
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 63 |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer Our last two stock option awards to Mr. Friedman were granted on a multi-year basis in May 2017 (the “2017 Stock Option Award”) and in October 2020 (the “2020 Stock Option Award”), with selling restrictions tied to stock price appreciation that are measured over a four-year initial performance period. The awards were designed to reward Mr. Friedman for long-term stock price appreciation. The 2020 Stock Option Award contains the same overall structure as the 2017 Stock Option Award by utilizing both time-based service period requirements and performance-based metrics. The 2017 Stock Option Award was granted for 1 million shares at an exercise price of $50 per share with stock price performance targets of $100, $125 and $150 per share, which performance hurdles each represented a substantial premium above the prevailing RH common stock price at the time of the grant. The 2020 Stock Option Award was granted for 700,000 shares at an exercise price of $385.30 per share with stock price performance targets of $500, $650 and $800 per share, which performance hurdles each represented a substantial premium above the prevailing RH common stock price at the time of the grant. The compensation committee determined to grant Mr. Friedman the 2020 Stock Option Award to cover the successive four-year period upon the expiration of the time-based service requirements of the 2017 Stock Option Award in order to provide a continuation of the stock price performance methodology of the 2017 award for four successive performance years commencing in May 2021 through May 2025 at enhanced price levels. For clarity, the end of the initial four-year performance measurement period in May 2025 did not terminate or forfeit the portion of the 2020 Stock Option Award that remained subject to selling restrictions. Under the award agreement, shares that remained subject to selling restrictions because one or more stock price goals were not achieved during a performance year ending on or before May 1, 2025 are carried forward and remain eligible for the selling restrictions to lapse in later performance years if the applicable stock price goals are subsequently achieved while Mr. Friedman remains in continuous service. Selling restrictions attached to the shares with respect to these multi-year awards only lapse upon the achievement of both certain time-based service period requirements and certain stock price-based performance objectives. The compensation committee believes that the combination of time-based restrictions and performance-based restrictions tied to stock price appreciation creates a strong alignment between Mr. Friedman and the objectives of the Company’s shareholders. The RH stock price substantially exceeded the performance hurdles under the 2017 Stock Option Award granted to Mr. Friedman such that all of the selling restrictions associated with that award have lapsed. The Board of Directors and the compensation committee concluded that the 2017 Stock Option Award was a successful incentive structure for the Chief Executive Officer using a combination of both time-based restrictions and performance-based restrictions to create strong alignment between the Chief Executive Officer and the Company’s shareholders.
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| + | | | 64 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
2020 Stock Option Award—Initial Performance Results and Remaining Selling Restrictions The following table quantifies the stock price appreciation from the date of grant that were required as of the date of the initial grant in order to achieve each performance target under the 2020 Stock Option Award:
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| | PRICE TARGET ($) | PREMIUM TO GRANT DATE STOCK PRICE (%) | | Exercise Price | $385 | 0.0% | | Performance Target | $500 | 29.8% | | Performance Target | $650 | 68.7% | | Performance Target | $800 | 107.6% |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
A portion of the time-based service period requirements and stock price-based performance hurdles for the 2020 Stock Option Award were achieved during the first year of performance measurement under the 2020 Stock Option Award from May 2021 through May 2022 as follows: 58,333 shares with stock price performance hurdle of $500 per share 58,333 shares with a stock price performance hurdle of $650 per share As of January 31, 2026, 583,334 shares subject to the 2020 Stock Option Award remained subject to selling restrictions. Those selling restrictions did not lapse during the initial performance years ending through May 2025, but they remain eligible to lapse in later performance years under the award agreement if the applicable stock price goals are subsequently achieved while Mr. Friedman remains in continuous service. The compensation committee believes that the stock price appreciation and stock option exercise metrics of the 2020 Stock Option Award provide substantial incentive for Mr. Friedman to help to achieve stock price appreciation in the years ahead, which the compensation committee believes create a high degree of alignment with successful outcomes for the Company’s investors. If Mr. Friedman’s employment with RH is terminated (i) by RH without cause, (iii) by Mr. Friedman for good reason (as such terms are defined in the option award agreement), or (iii) for death or disability (as such terms are defined in the option award agreement), then any share selling restrictions on shares subject to the 2020 Stock Option Award that would have been eligible to lapse at any time during the twelve-month period following such termination had such termination not occurred will be eligible to lapse based solely upon the achievement of the stated stock price performance levels at any point during such twelve-month period. For further details regarding the option award agreement with respect to the 2020 Stock Option Award, refer to the Company’s Current Report on Form 8-K filed with the SEC on October 21, 2020. We continue to believe that our executive compensation program, including the compensation of our Chairman and Chief Executive Officer, is clearly structured to reflect the best interests of shareholders and that if we continue to drive improving operational and financial performance investors will be rewarded by stock price appreciation.
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 65 |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
OVERVIEW OF COMPENSATION PROGRAM & PHILOSOPHY
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| OUR COMPENSATION PROGRAM IS DESIGNED TO DO THE FOLLOWING: | | | Attract and retain | We focus on attracting and retaining top-caliber, knowledgeable and experienced senior executives | | Encourage an ownership and entrepreneurial mindset | Our programs create in our leadership an ownership and entrepreneurial mindset in order to align the annual and long-term strategic goals of our executives with those of our Company and our shareholders, including improvements in shareholder returns | | Motivate | Our programs motivate our executives to achieve superior results for our Company and our shareholders | | Reward performance | We pay for performance that is achieved through creativity, the capitalization of unique strategic opportunities and business initiatives, and results in shareholder-aligned financial successes, including improvements in our stock price | | Encourage appropriate risk taking | Our programs focus our executives to analyze business initiatives where we seek return on investment that exceeds downside risks | | Provide transparent reward systems | Our reward systems are easily understood by our leaders and shareholders | | Reinforce the succession planning process | Our programs help leadership to focus on identifying, and help us reward, retain and promote from within, the next generation of senior leadership to achieve the Company’s growth, profitability and other objectives through increased responsibilities and compensation |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| + | | | 66 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
This compensation philosophy guides the compensation committee in assessing the compensation to be paid to our executives, including our named executive officers, and the compensation committee endeavors to ensure that the total compensation paid to the named executive officers is fair, competitive and consistent with our compensation philosophy. This compensation philosophy also guides the compensation committee as to the proper allocation among current cash compensation (in the form of annual base salary), short-term compensation (in the form of performance-based, annual cash incentives), and long-term compensation (in the form of equity incentive compensation). We evaluate both the performance and compensation of our named executive officers annually to ensure that the executive compensation program we implement achieves these goals. One of our overriding goals informing our compensation philosophy is to create in our leadership an ownership and entrepreneurial mindset in order to align leadership performance with improvements in shareholder returns. Our compensation programs aim to improve upon this interest alignment through various methods, including the use of stock options for equity grants, the use of long-term price performance targets in the award granted to our Chairman and Chief Executive Officer and various profit metrics under the LIP. We have implemented executive compensation policies and practices that reinforce our compensation philosophy and align with those commonly viewed best practices and sound governance principles that we believe are appropriate for us. The following summarizes these policies and practices:
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| PRACTICES WE FOLLOW |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
Our compensation committee is comprised entirely of independent directors We review our compensation strategy annually We use an independent compensation consultant that is engaged by our compensation committee Our cash incentives are performance-based and we use rigorous performance targets A significant portion of our executive compensation is either tied to corporate performance directly or indirectly through stock price performance because of the equity component of compensation We use seven-year vesting schedules for most of our equity grants, generally with back-end loaded vesting periods, which we believe motivates our team members and leaders in favor of creating long-term shareholder value on a sustained basis. With regard to back-end loaded vesting, we often use schedules along these lines: Our seven-year award structure would generally vest 10% in years one, two and three; 15% in years four and five; and 20% in years six and seven Our five-year award structure would generally vest either (i) 15% in years one and two; 20% in year three; and 25% in years four and five, or (ii) 10% in years one and two; 20% in year three; and 30% in years four and five We sometimes provide shorter vesting schedules in connection with new hire equity awards, including where there is a need to compensate for the lost value of equity or other compensation from a prior employer We maintain stock ownership guidelines applicable to all our directors and executive officers in order to further align the financial interest of our directors and executive officers with the interest of our investors We maintain a Clawback Policy that requires us to recover erroneously awarded compensation that is granted, earned or vested based in whole or in part upon the attainment of a financial reporting measure and that is received by our current and former executive officers during the three fiscal years preceding the date that we are required to prepare the accounting restatement We provide broad-based company-sponsored health and retirement benefits programs
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 67 |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| PRACTICES WE AVOID |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
No “single trigger” change of control benefits No post-termination retirement- or pension-type non-cash benefits or perquisites for our executive officers that are not available to our team members generally No short sales with respect to our common stock or hedging or derivative transactions involving our securities by directors, officers, team members or other insiders No discount stock options or stock appreciation rights (“SARs”). Under the RH 2023 Stock Incentive Plan (the “2023 Equity Plan”), all stock options and SARs will be granted with an exercise price equal to or greater than the fair market value of our common stock on the date the stock option or SAR is granted We have not repriced, replaced or repurchased underwater stock options or SARs, which is prohibited in absence of approval by our shareholders for grants under the 2023 Equity Plan No acceleration of share vesting generally—instead, we have simple customary levels of severance protection commensurate with a senior position No tax gross-ups for change of control benefits No defined benefit pensions or long-term cash incentives like supplemental retirement plans or other forms of long-term deferred compensation No equity awards for leadership with short-term restrictions or vesting, such as one- or two-year vesting Under the 2023 Equity Plan, transfers of awards are only permitted (i) by will, (ii) by the laws of descent and distribution and (iii) for awards other than incentive stock options, to the extent authorized by the administrator No annual “evergreen” provision under the 2023 Equity Plan. The 2023 Equity Plan does not contain an annual “evergreen” provision that provides for automatic increases of shares of our common stock authorized for issuance under the plan. The 2023 Equity Plan authorizes a fixed share reserve. Therefore, we would have to obtain shareholder approval to increase the 2023 Equity Plan’s share reserve
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| + | | | 68 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
COMPENSATION COMMITTEE REVIEW OF COMPENSATION Our Board of Directors has established a compensation committee that is generally responsible for the oversight, implementation and administration of our executive compensation plans and programs. The compensation committee engages in the following, either together with the Board of Directors as a whole or as a committee, making recommendations to the Board of Directors regarding approval, as necessary: Annually review and approve the Company’s corporate goals and objectives relevant to compensation of the Chief Executive Officer; Evaluate the Chief Executive Officer’s performance in light of such goals and objectives; and Determine and approve the Chief Executive Officer’s compensation level based on this evaluation. In addition, the compensation committee annually reviews the following: Annual base salary levels; Annual incentive compensation levels; Long-term incentive compensation levels; and Any supplemental or special benefits. The compensation committee also ensures that appropriate overall corporate performance measures and goals are set and determines the extent to which the established goals have been achieved and any related compensation earned; Determines the appropriateness of, and in some cases retains, a compensation consultant to offer advice for the consideration of the compensation committee and considers the independence of such consultant in accordance with applicable SEC and NYSE rules; and Performs other necessary tasks related to the implementation and administration of executive compensation plans and programs. The compensation committee’s annual review of executive compensation generally occurs within the first and second fiscal quarters of each year. COMPENSATION LEVEL SETTING PROCESS Our compensation committee reviews the following, among other factors, when determining compensation: The individual’s performance and contributions to financial objectives; Equity awards previously granted to the executive, which includes amounts of such awards that remain unvested or are under selling restrictions and therefore continue to incentivize future performance; Individual leadership, expectations, expertise, skill, and knowledge; Overall compensation, including base salary and bonus opportunity, as a whole; Analyses of competitive market compensation practices and labor market conditions; Alignment with the long-term business strategy of the Company; Retention and succession planning; Input from senior leadership, including our Chairman and Chief Executive Officer; and Input from an independent compensation consultant.
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 69 |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
As we are headquartered in the San Francisco Bay Area, which is a highly dynamic and competitive market for talent, we seek to provide competitive compensation practices for our executive leadership in order to attract and retain the best available talent. To set a competitive, reasonable and appropriate level of compensation, the Board of Directors and the compensation committee take a holistic approach and consider all relevant factors to the compensation decision being made in any given year. The Board of Directors’ and the compensation committee’s approach to evaluating these factors is subjective, not formulaic, and may place more or less weight on a particular factor when determining a particular executive officer’s compensation. ROLE OF LEADERSHIP IN DETERMINING EXECUTIVE COMPENSATION In determining the total compensation for each executive officer, the Board of Directors and the compensation committee consider the specific recommendations of our Chairman and Chief Executive Officer (other than with respect to his own compensation) and may consider input from other senior members of leadership. Our Chairman and Chief Executive Officer plays a significant role in the compensation setting process for the other named executive officers by: Evaluating their performance; Discussing the role and responsibilities of the relevant executive officer within the Company and the expected future contributions of the executive officer; Considering retention and succession planning; Recommending business performance targets and establishing objectives; and Recommending salary levels, bonuses and equity awards. Our Chairman and Chief Executive Officer annually reviews the compensation paid to other named executive officers over the fiscal year through presentations to the compensation committee, either as a committee or together with the Board of Directors as a whole, and provides his recommendations regarding the compensation to be paid to such persons during the next year. Following a review of such recommendations, the Board of Directors or the compensation committee, after reviewing the other factors and input as discussed above, takes action regarding such compensation recommendations as it deems appropriate. The Board of Directors and the compensation committee also consider input from our Chairman and Chief Executive Officer, as well as our Chief Financial Officer and other senior executive officers, when setting performance objectives for our performance-based incentive program. Our executive compensation program is designed to reward successful annual performance while encouraging long-term value creation for our shareholders. Short- and long-term incentive compensation is subject to rigorous, objective, at-risk performance hurdles across our performance metrics and performance periods, which the compensation committee intends to be an incentive to leadership to drive Company performance and encourage prudent risk management consistent with the Company’s financial and strategic goals.
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| + | | | 70 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
ROLE OF COMPENSATION CONSULTANTS The compensation committee has periodically engaged compensation consultants to assist the committee in assessing compensation market conditions. Since January 2017, the compensation committee has engaged Mercer to provide evaluations and recommendations concerning our executive and board compensation programs and to advise the compensation committee with respect to structuring our compensation plans to achieve our business objectives. Mercer has provided evaluations and recommendations concerning our executive and board compensation programs and has advised the compensation committee with respect to structuring our compensation plans. For example, Mercer provided support to the compensation committee in connection with equity awards and compensation for our leadership and in particular in connection with the structuring and details of the multi-year equity award granted in fiscal 2020 to our Chairman and Chief Executive Officer. The compensation committee has considered the independence of Mercer in accordance with applicable SEC and NYSE rules. Although Mercer worked with leadership to develop plans that support our business objectives while carrying out its duties for the compensation committee, Mercer was retained by and reports directly to the compensation committee and does not provide any other services to the Company other than those approved by the compensation committee that would not constitute a conflict of interest or that would not otherwise compromise their independence. ANALYSES OF COMPETITIVE MARKET PRACTICES Due to the unique nature of our Company and the lack of direct industry competitors, we do not engage in a formal benchmarking process in setting compensation. Instead, we consider from time to time, as the compensation committee deems appropriate, an array of available data and information in order to assess the competitiveness of our compensation program and philosophy, including market information concerning local and national market compensation practices that are determined to be relevant to the Company. Given the location of our corporate headquarters in the San Francisco Bay Area, we pay close attention to the opportunities that exist for executives at other growth companies, both inside and outside the retail industry, located in the San Francisco Bay Area, including public companies, as well as private companies that could be candidates for an initial public offering in the future. We conducted a comprehensive review of market compensation practices for executive officer compensation in fiscal 2016 and then again conducted reviews in relation to our review of our Chief Executive Officer’s compensation at the respective time of setting each of his fiscal 2017 multi-year equity grant and fiscal 2020 multi-year equity grant. In the case of our market check activities with respect to the Chief Executive Officer equity awards, we focused on compensation practices for a variety of different companies, including companies of similar sizes to us, companies that have out-performed the market in terms of growth and return measures, and companies that had adopted multi-year equity awards for a chief executive officer or other senior executive officers. Certain of these other companies had adopted such senior executive multi-year equity awards that included various performance metrics, including in some instances stock price performance. In terms of industry sectors of the companies that were part of these market checks, these other companies included technology and disruptive growth companies, retail and consumer businesses including specialty retail businesses, and various other industry verticals.
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 71 |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
In addition, when making decisions with respect to most significant compensation matters with respect to our executive officers and other members of our senior leadership team, we examine compensation metrics used by some of these different market check companies with a particular emphasis on companies headquartered in the San Francisco Bay Area. In connection with the comprehensive review of market compensation practices, the Company and the compensation committee consider the executive compensation practices and the market data as reference points in the review of the Company’s compensation practices, but do not benchmark or use market data in order to set compensation for the executive officers and other executives of the Company. EXECUTIVE COMPENSATION COMPONENTS The principal components of our compensation program for our named executive officers are summarized in the chart below, which is followed by a detailed explanation of the principal components of our compensation program for our named executive officers. In determining our named executive officers’ overall compensation program, the compensation committee and the Board of Directors, as applicable, each considers how a particular component motivates performance and promotes retention and sound long-term decision-making.
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| COMPENSATION ELEMENTS | OBJECTIVES | | Annual base salary | Compensates for services rendered during the fiscal year | | Performance-based annual cash incentives | Motivates and rewards our named executive officers for specific annual financial and/or operational goals and objectives | | Long-term equity incentive compensation | Attracts and retains our named executive officers and aligns the financial rewards paid to our named executive officers with our long-term performance and the financial interests of our shareholders | | Perquisites and other personal benefits | Provides a competitive level of perquisites to better enable us to attract and retain superior team members for key positions | | Employment agreements; severance and change of control benefits | Promotes stability and continuity of senior leadership |
Multi-Year Stock Option Awards to Chairman and Chief Executive Officer
| + | | | 72 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Performance-Based Annual Cash Incentives
Performance-Based Annual Cash Incentives Cash bonuses under the LIP are designed to motivate and reward annual performance for eligible team members, including our named executive officers, and to link a significant portion of the named executive officer’s total cash compensation to our overall performance. The compensation committee considers annually whether LIP bonus targets should be established for the year and, if so, approves the group of team members eligible to participate in the LIP for that year. The LIP includes various incentive levels based on the participant’s position with the Company. The LIP bonus for our named executive officers is based on achievement of performance objectives, rather than individual performance, in order to focus the entire senior leadership team on the attainment of enterprise-wide financial objectives. Each named executive officer is provided a target bonus amount equal to a percentage of the eligible portion of such officer’s base salary (which eligible portion is based on the salary earned during the fiscal year). The target bonus amount is based on the Company meeting the target achievement level for the relevant performance objectives.
Performance-Based Annual Cash Incentives
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 73 |
Performance-Based Annual Cash Incentives
The compensation committee and/or the Board of Directors establishes the target achievement level at which 100% of such participant’s target bonus will be paid (the “100% Achievement Level”), the minimum threshold achievement level at which 20% of the participant’s target bonus will be paid (the “20% Achievement Level”) and the achievement level at which 200% of the participant’s target bonus will be paid (the “200% Achievement Level”). The exact amount of the bonus payable under the LIP is based on the level of achievement of such performance objectives, with the bonus amount increasing for each named executive officer as a percentage of the eligible portion of such officer’s base salary to the extent the achievement of such performance objectives for the fiscal year exceeds the 100% Achievement Level, and with the bonus amount decreasing as a percentage of base salary to the extent the achievement of such performance objectives for the fiscal year is below the 100% Achievement Level (but above the 20% Achievement Level). The compensation committee also may adopt separate minimum or maximum payout amounts for certain individuals under the LIP. The LIP is structured so that no bonuses are paid under the LIP unless we meet the 20% Achievement Level. The compensation committee, either as a committee or with the Board of Directors as a whole, sets the performance objectives each year under the LIP, and the payment and amount of any bonus depends upon whether we achieve at least a certain percentage of the performance objectives under the LIP. The compensation committee, either as a committee or with the Board of Directors as a whole, generally establishes such objectives for the Company at levels that it believes can be reasonably achieved with strong performance over the fiscal year. The compensation committee and the Board of Directors have discretion to interpret the LIP’s performance objectives in light of relevant factors both internal and external to the Company, and to adjust the amount paid under the LIP accordingly. The compensation committee and the Board of Directors exercise such discretion based on business judgment, taking into account both recurring and extraordinary factors affecting performance of the Company as well as other relevant factors. The compensation committee may consult the Board of Directors, as deemed necessary, with respect to material issues concerning the administration of the LIP, including interpretations of the terms of the LIP. In making the determination of minimum and target achievement levels, the compensation committee and/or the Board of Directors may consider the specific circumstances facing our Company during the year and our strategic plan for the year. In general, the LIP targets are established based upon the Company’s operating plans and objectives for the fiscal year in question, which in turn are formulated in part based upon the results for the previous fiscal year. The compensation committee sets the LIP targets with the objective of encouraging the leadership team to drive financial performance based upon the Company’s operating plan and financial objectives for the year in question. The following table sets forth the bonus targets as a percentage of the eligible portion of the executive’s base salary under the LIP that would have been applicable in fiscal 2025 for our executive officers at the 20% Achievement Level, the 100% Achievement Level and the 200% Achievement Level. During its annual review of the LIP for the executive officers for fiscal 2025, the compensation committee determined not to make any changes to the bonus targets as a percentage of the eligible portion of the executive’s base salary for Mr. Friedman, Mr. Preston, Ms. Chaya, and Mr. Duban from such targets for fiscal 2024.
Performance-Based Annual Cash Incentives
| ACHIEVEMENT LEVEL | GARY FRIEDMAN | JACK PRESTON | ERI CHAYA | LISA CHI(1) | STEFAN DUBAN(2) | | Below 20% | —% | —% | —% | —% | —% | | 20% | 20% | 10% | 10% | 10% | 10% | | 100% | 125% | 50% | 50% | 50% | 50% | | 200% | 250% | 100% | 100% | 100% | 100% |
Performance-Based Annual Cash Incentives
| (1) Ms. Chi received a minimum guaranteed bonus of $500,000 in respect of her bonus under the LIP for fiscal 2025 as provided in her offer letter. |
Performance-Based Annual Cash Incentives
| (2) Mr. Duban resigned from his position on January 26, 2026. |
Performance-Based Annual Cash Incentives
| + | | | 74 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Performance-Based Annual Cash Incentives
For fiscal 2025, the performance objective for the LIP was based on Adjusted Income. The specific Adjusted Income target levels for the fiscal 2025 LIP are not disclosed because we believe that disclosure of those target levels is competitively sensitive information. The compensation committee set the Adjusted Income targets for the fiscal 2025 LIP at levels that it believed could be reasonably achieved only with strong performance over the fiscal year and that required meaningful performance by the Company. The compensation committee reviewed the Company’s fiscal 2025 financial results against the LIP targets and determined that the Company did not reach the achievement level with respect to the Company’s performance objectives. As a result, the compensation committee determined that the amount of the payout under the LIP would be set at 0%, as shown in the table below:
Performance-Based Annual Cash Incentives
| | FISCAL 2025 | | | | | NAME | BONUS EARNED UNDER THE LIP | ELIGIBLE PORTION OF BASE SALARY | BONUS EARNED AS % OF ELIGIBLE BASE SALARY | CHANGE FROM FISCAL 2024 BONUS AS % OF BASE SALARY | | Gary Friedman | $— | $1,250,000 | —% | —% | | Jack Preston | $— | $925,000 | —% | —% | | Eri Chaya | $— | $1,300,000 | —% | —% | | Lisa Chi(1) | $— | $1,000,000 | 50% | n/a | | Stefan Duban(2) | n/a | n/a | n/a | n/a |
Performance-Based Annual Cash Incentives
| (1) Under her offer letter, Ms. Chi is guaranteed a minimum bonus payout under the LIP of $500,000 for fiscal 2025, and minimum bonus opportunities for fiscal 2026 and fiscal 2027 equal to $550,000 and $600,000, respectively. This guaranteed amount represents a minimum payout under the LIP, and Ms. Chi is entitled to receive the greater of the bonus otherwise payable under the LIP based on performance and such guaranteed minimum amount. |
Performance-Based Annual Cash Incentives
| (2) Mr. Duban resigned from his position on January 26, 2026. |
Performance-Based Annual Cash Incentives
The LIP provides substantial variation in compensation from year to year based upon the achievement of financial performance objectives, as reflected in the table below on a fiscal year basis. In prior years, we have paid bonuses under the LIP based on financial performance that has exceeded targets and partially met targets, and we have not paid bonuses under the LIP when the Company has not met targets.
Performance-Based Annual Cash Incentives
| | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | Achievement level | 175% | 200% | 200% | 100% | 0% | 0% | 0% |
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation We believe that providing long-term incentives as a component of compensation helps us to attract and retain our named executive officers. These incentives also align the financial rewards paid to our named executive officers with our long-term performance, thereby encouraging our named executive officers to focus on our long-term performance goals. The compensation committee reviews executive compensation on an ongoing basis, including a review of the Company’s annual share usage, or “burn rate,” and equity use as they relate to equity grants for named executive officers to determine if the Company’s overall grant practices with respect to its named executive officers were appropriate and in line with our compensation philosophy and objectives. The compensation committee also takes into consideration (i) recommendations from the Chairman and Chief Executive Officer (other than with respect to his own compensation), (ii) the competitive environment for executive talent in the San Francisco Bay Area, (iii) each executive officer’s current equity holdings and the present value thereof and (iv) our continued desire to align our executive officers’ long-term interests with those of our shareholders.
Long-Term Equity Incentive Compensation
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 75 |
Long-Term Equity Incentive Compensation
In fiscal 2025, the compensation committee granted the following equity awards to the named executive officers:
Long-Term Equity Incentive Compensation
| NAME | STOCK OPTIONS | RESTRICTED STOCK UNITS | | Gary Friedman | — | — | | Jack Preston | 25,000(1) | — | | Eri Chaya | 35,000(1) | — | | Lisa Chi | 50,000(2) | 20,000(3) | | Stefan Duban | 25,000(1) | — |
Long-Term Equity Incentive Compensation
| (1) The stock options were granted at an exercise price of $164.62 per share, the fair market value of our common stock on April 13, 2025, the date of grant. The options vest pro rata on each anniversary of the date of grant over 7 years and expire in 10 years, subject to the named executive officer’s continued service with the Company. |
Long-Term Equity Incentive Compensation
| (2) The stock options were granted at an exercise price of $181.11 per share, the fair market value of our common stock on May 30, 2025, the date of grant. The options were granted in connection with Ms. Chi’s offer to join the Company and vest pro rata on each anniversary of the date of grant over 5 years and expire in 10 years, subject to Ms. Chi’s continued service with the Company. |
Long-Term Equity Incentive Compensation
| (3) The restricted stock unit award was granted on May 30, 2025 in connection with Ms. Chi’s offer to join the Company and vests over 3 years with 30% of the award vesting on January 31, 2026, 35% of the award vesting on January 31, 2027 and 35% of the award vesting on January 31, 2028, subject to Ms. Chi’s continued service with the Company. |
Long-Term Equity Incentive Compensation
We primarily use stock options in our equity grants, in lieu of “full value” awards such as restricted stock units, as part of our long-term equity incentive plan. As a high-growth company, we believe the use of stock options creates strong alignment with our executives with regard to the expectation of shareholders for the Company to exceed and increase its value over time. At the same time, we have historically granted some “full value” awards and believe that such awards can be an appropriate alternative as our share price has increased substantially since the initial public offering and in that context a full value award allows for the grant of a lower number of shares than a stock option award, which can result in a grant of restricted stock units being an appropriate equity award structure or portion of an overall award in some instances. For fiscal 2025, we used seven-year vesting periods for most equity awards granted to our continuing executive officers rather than five-year vesting periods. We believe these longer vesting periods motivate our team members and executives to take a sustainable approach in creating long-term shareholder value and allow for these equity awards to create a retention structure over a seven-year period as opposed to a shorter timeframe. Ms. Chi’s equity awards were structured in connection with her commencement of employment in May 2025. The compensation committee determined that a combination of a five-year stock option award and a three-year restricted stock unit award was appropriate to support Ms. Chi’s recruitment and retention and to align her interests with the Company’s performance over the near and longer term.
Employment Agreements; Severance and Change of Control Benefits
Employment Agreements; Severance and Change of Control Benefits We have entered into agreements with certain key team members, including certain of the named executive officers, which agreements provide severance benefits in the event of certain terminations of employment. These severance protection agreements are designed to promote stability and continuity of senior leadership. Information regarding amounts that would be payable under such agreements for the named executive officers is provided under the heading “—Potential Payments Upon Termination or Change in Control.” None of our agreements with our officers or team members or other applicable policies have tax gross-up features. In the event that any termination payments made to our Chairman and Chief Executive Officer are deemed under Section 280G of the Code, to constitute excess parachute payments subject to an excise tax, then such payments will be payable either (i) in full or (ii) as to such lesser amount that would result in no portion of such payments being subject to the excise tax, and our Chairman and Chief Executive Officer will receive the greater, on an after-tax basis, of (i) or (ii) above, as determined by an independent accountant or tax advisor selected by our Chairman and Chief Executive Officer and paid for by the Company. RISK CONSIDERATIONS IN OUR COMPENSATION PROGRAM We conducted an assessment of our compensation policies and practices for team members and concluded that these policies and practices as currently designed are appropriately weighted among base salaries and short- and long-term incentives such that our team members are not encouraged to take excessive risks. The compensation committee believes that such compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, the compensation committee reviewed the compensation elements that comprise our compensation program, as well as the objectives that each item is designed to encourage, as described above under “—Executive Compensation Components.”
Timing of Equity Grants
Timing of Equity Grants We do not have a formal policy regarding the timing of equity award grants. All equity grants made to named executive officers must be either directly approved by the compensation committee, the Board of Directors or through delegated authority. During fiscal 2025, we did not grant stock options (or similar awards) to our named executive officers during the four business days prior to or the one business day following the filing of our periodic reports or the filing or furnishing of a Form 8-K that disclosed material, non-public information.
Summary Compensation Table
Summary Compensation Table The following table shows the compensation earned by our named executive officers in fiscal 2025, fiscal 2024 and fiscal 2023, as applicable.
Summary Compensation Table
| NAME AND PRINCIPAL POSITION | FISCAL YEAR | SALARY | NON-EQUITY INCENTIVE PLAN COMPENSATION(1) | OPTION AWARDS(2) | RESTRICTED STOCK UNITS(2) | ALL OTHER COMPENSATION | TOTAL | | Gary Friedman | 2025 | $1,250,000 | $— | $— | $— | $12,000(5) | $1,262,000 | | Chairman and CEO | 2024 | $1,250,000 | $— | $— | $— | $12,000(5) | $1,262,000 | | | 2023 | $1,250,000 | $— | $— | $— | $12,000(5) | $1,262,000 | | Jack Preston | 2025 | $925,000 | $— | $2,928,133 | $— | $39,500(6) | $3,892,633 | | Chief Financial Officer | 2024 | $925,000 | $— | $2,512,920 | $— | $39,500(6) | $3,477,420 | | | 2023 | $896,698 | $— | $2,371,824 | $— | $39,500(6) | $3,308,022 | | Eri Chaya | 2025 | $1,300,000 | $— | $4,099,386 | $— | $39,500(7) | $5,438,886 | | President, Co-Chief Creative and | 2024 | $1,300,000 | $— | $3,350,560 | $— | $39,500(7) | $4,690,060 | | Merchandising Officer & Director | 2023 | $1,271,698 | $— | $3,953,040 | $— | $39,500(7) | $5,264,238 | | Lisa Chi(3) | | | | | | | | | President, Co-Chief Creative and | 2025 | $657,692 | $500,000 | $5,981,140 | $3,622,200 | $24,042(8) | $10,785,074 | | Merchandising Officer | | | | | | | | | Stefan Duban(4) | 2025 | $950,000 | $— | $2,928,133 | $— | $18,875(9) | $3,897,008 | | Former Chief Gallery & Customer Officer | 2024 | $950,000 | $— | $3,350,560 | $— | $12,000(9) | $4,312,560 | | | 2023 | $822,642 | $— | $3,162,432 | $— | $12,000(9) | $3,997,074 |
Summary Compensation Table
| (1) Reflects the cash awards that our named executive officers received under our LIP. |
Summary Compensation Table
| (2) Reflects the aggregate grant date fair value of the awards made in fiscal 2025, fiscal 2024 and fiscal 2023 computed in accordance with FASB ASC 718 rather than the amount paid to or realized by the named executive officer. Refer to Note 16—Stock-Based Compensation in our audited consolidated financial statements contained in our Annual Report. |
Summary Compensation Table
| (3) Ms. Chi joined the Company in May 2025 and is first included as a named executive officer for fiscal 2025. Accordingly, no compensation is presented for prior fiscal years. |
Summary Compensation Table
| (4) Mr. Duban resigned from his position on January 26, 2026. |
Summary Compensation Table
| (5) Represents $12,000 in the form of a car allowance. For fiscal 2025, 2024 and 2023, Mr. Friedman had income imputed to him related to certain personal use of corporate aircraft in the amounts of $15,052, $6,690 and $30,948, respectively, which amounts are not part of Mr. Friedman’s Other Compensation for purposes of the Summary Compensation Table. Mr. Friedman reimburses the Company for use of corporate aircraft for personal purposes pursuant to a time sharing agreement and for other personal uses of Company services, including hotel and yacht charter services as further described in the section “—Executive Compensation—Certain Relationships & Related Party Transactions.” |
Summary Compensation Table
| (6) Represents $12,000 in the form of a car allowance and $27,500 in the form of third-party concierge medical services for Mr. Preston. Mr. Preston also had $1,751 in income imputed to him related to certain personal use of corporate aircraft in fiscal 2023. |
Summary Compensation Table
| (7) Represents $12,000 in the form of a car allowance and $27,500 in the form of third-party concierge medical services for Ms. Chaya. |
Summary Compensation Table
| (8) Represents $8,000 in the form of a car allowance and $16,042 in the form of third-party concierge medical services for Ms. Chi. |
Summary Compensation Table
| (9) Represents $12,000 in the form of a car allowance. Mr. Duban also had $6,875 in the form of third-party concierge medical services in fiscal 2025. |
Summary Compensation Table
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 79 |
Summary Compensation Table
For a description of actions taken by the compensation committee with respect to base salaries of our named executive officers for fiscal 2025, please see section entitled “—Compensation Discussion & Analysis—Annual Base Salary.” For a description of the material terms of the named executive officers’ employment agreements, please see the section entitled “—Employment & Other Compensation Agreements.” For a description of our Non-Equity Incentive Plan Compensation, please see the section entitled “—Compensation Discussion & Analysis—Performance-Based Annual Cash Incentives.” For the compensation committee’s determination of awards under the LIP for our named executive officers for fiscal 2025, please see the section entitled “—Compensation Discussion & Analysis—Performance-Based Annual Cash Incentives.” For the vesting schedules of outstanding equity awards and additional information concerning outstanding equity awards, please see “—Outstanding Equity Awards at Fiscal Year-End.”
Grants of Plan-Based Awards
Grants of Plan-Based Awards As further described above in the Compensation Discussion & Analysis section of this proxy statement, the named executive officers are eligible to receive an annual cash bonus based on a percentage of their base salary under our LIP. Our Company’s financial objectives with respect to the LIP are generally established each year and the payment and the amount of any bonus depend upon whether our Company achieves the applicable performance goals. The specific amount any participant could receive generally depends on the level of our performance. The amounts shown in these columns for the named executive officers are based on the following assumptions: In the “threshold” column, the amount for each named executive officer reflects the minimum bonus that would be awarded if we reach the 20% achievement level of our financial objectives, which is the minimum achievement level required for bonus payouts under the LIP. In the “target” column, the amount for each named executive officer reflects the bonus amount that would be awarded if we reach the 100% achievement level of our financial objectives. In the “maximum” column, the amount for each named executive officer reflects the bonus that would be awarded if we reach the 200% achievement level of our financial objectives.
Grants of Plan-Based Awards
| + | | | 80 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Grants of Plan-Based Awards
The following table provides information on the possible payouts under our LIP for fiscal 2025 based on certain assumptions about the achievement of performance objectives for our Company and the individual named executive officer at various levels assuming we had followed the same convention used in prior fiscal years with a low point achievement level set at 20%, a high point set at 200% and a midpoint target achievement level set at 100%. The following table does not set forth the actual bonuses to be awarded to the named executive officers for fiscal 2025 under the LIP. The actual bonuses awarded to the named executive officers for fiscal 2025 are reported in the Summary Compensation Table above under the column entitled “Non-Equity Incentive Plan Compensation.”
Grants of Plan-Based Awards
| | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | | | | ALL OTHER STOCK AWARDS: # OF | ALL OTHER OPTION AWARDS # OF | EXERCISE OR | GRANT DATE FAIR VALUE | | NAME | GRANT DATE | ACTION DATE | THRESHOLD | TARGET | MAXIMUM | SHARES OF STOCK OR UNITS | SECURITIES UNDERLYING OPTIONS | BASE PRICE OF OPTION AWARDS | OF STOCK AND OPTION AWARDS(2) | | Gary Friedman | — | — | $250,000 | $1,562,500 | $3,125,000 | — | — | — | — | | Jack Preston | — | — | $92,500 | $462,500 | $925,000 | — | — | — | — | | | 4/13/2025 | 4/13/2025 | — | — | — | — | 25,000 | $164.62 | $2,928,133 | | Eri Chaya | — | — | $130,000 | $650,000 | $1,300,000 | — | — | — | — | | | 4/13/2025 | 4/13/2025 | — | — | — | — | 35,000 | $164.62 | $4,099,386 | | Lisa Chi | — | — | $100,000 | $500,000(3) | $1,000,000 | — | — | — | — | | | 5/30/2025 | 5/20/2025 | — | — | — | 20,000 | 50,000 | $181.11 | $9,603,340 | | Stefan Duban(4) | — | — | $95,000 | $475,000 | $950,000 | — | — | — | — | | | 4/13/2025 | 4/13/2025 | — | — | — | — | 25,000 | $164.62 | $2,928,133 |
Grants of Plan-Based Awards
| (1) Target awards as a percentage of the eligible portion of base salary for the named executive officers are set forth in the section entitled “—Compensation Discussion & Analysis—Performance-Based Annual Cash Incentives.” |
Grants of Plan-Based Awards
| (2) For stock and option awards, reflects the aggregate grant date fair value of the awards made in fiscal 2025, computed in accordance with FASB ASC 718. Refer to Note 16—Stock-Based Compensation to our audited consolidated financial statements contained in our Annual Report. Amounts shown do not reflect compensation actually received or that may be realized in the future by the named executive officer. For option awards, grant date fair market value is calculated by multiplying the number of options granted by the fair market value of the Company’s shares on the date of grant. The grant date fair value for stock option awards granted to Mr. Preston, Ms. Chaya and Mr. Duban was $164.62 per share on April 13, 2025, the date of grant. The grant date fair value for stock and option awards granted to Ms. Chi was $181.11 per share on May 30, 2025, the date of grant. |
Grants of Plan-Based Awards
| (3) Under her offer letter, Ms. Chi is guaranteed a minimum bonus payout under the LIP of $500,000 for fiscal 2025. This guaranteed amount represents a minimum payment and Ms. Chi is entitled to receive the greater of the bonus otherwise payable under the LIP based on performance and such guaranteed minimum amount. |
Grants of Plan-Based Awards
| (4) Represents Mr. Duban’s potential payout for fiscal 2025 under the LIP prior to his resignation. |
Grants of Plan-Based Awards
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 81 |
Grants of Plan-Based Awards
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table shows all outstanding stock option and restricted stock unit awards held by the named executive officers as of January 31, 2026, the last day of fiscal 2025.
Grants of Plan-Based Awards
| | STOCK OPTION AWARDS | | | | STOCK AWARDS | | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS | | | | SHARES OR UNITS THAT HAVE NOT YET VESTED | | | NAME | EXERCISABLE (#) | UNEXERCISABLE (#) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SHARES (#) | MARKET VALUE ($)(1) | | Gary Friedman | 1,000,000 | — | $50.00 | 5/1/2027 | — | — | | | 700,000(2) | — | $385.30 | 10/17/2030 | — | — | | Jack Preston | 56,000 | 14,000(3) | $101.25 | 4/1/2029 | — | — | | | 6,000 | 4,000(4) | $154.82 | 4/28/2030 | — | — | | | 3,000 | 12,000(5) | $264.27 | 6/8/2033 | — | — | | | 1,500 | 13,500(6) | $267.09 | 4/10/2034 | — | — | | | — | 25,000(7) | $164.62 | 4/12/2035 | — | — | | Eri Chaya | 50,000 | — | $39.42 | 5/3/2026 | — | — | | | 50,000 | — | $109.87 | 6/5/2028 | — | — | | | 40,000 | 10,000(3) | $101.25 | 4/1/2029 | — | — | | | 18,000 | 12,000(4) | $154.82 | 4/28/2030 | — | — | | | 5,000 | 20,000(5) | $264.27 | 6/8/2033 | — | — | | | 2,000 | 18,000(6) | $267.09 | 4/10/2034 | — | — | | | — | 35,000(7) | $164.62 | 4/12/2035 | — | — | | Lisa Chi | — | 50,000(8) | $181.11 | 5/29/2035 | — | — | | | — | — | — | — | 14,000(9) | $2,783,620 | | Stefan Duban | 6,250 | — | $151.35 | 4/26/2026(10) | — | — | | | 24,000 | — | $154.82 | 4/26/2026(10) | — | — | | | 4,000 | — | $264.27 | 4/26/2026(10) | — | — | | | 2,000 | — | $267.09 | 4/26/2026(10) | — | — |
Grants of Plan-Based Awards
| (1) Calculated by multiplying the number of unvested stock units by $198.83, the fair market value of the Company’s common stock on January 30, 2026, the last trading day of fiscal 2025. |
Grants of Plan-Based Awards
| (2) Represents options granted to Mr. Friedman under the 2012 Plan on October 18, 2020. These options are fully vested but the underlying shares are subject to selling restrictions that only lapse upon the achievement of both certain stock price-based performance objectives and certain time-based service period requirements. As of January 31, 2026, 583,334 of these options were subject to selling restrictions. |
Grants of Plan-Based Awards
| (3) Represents options granted on April 2, 2019. Subject to continuous service, the remaining unvested options will be fully vested on April 2, 2026. |
Grants of Plan-Based Awards
| (4) Represents options granted on April 29, 2020. Subject to continuous service, these options vest on each anniversary of the date of grant with 20% of the total options granted on each of years 6 and 7, and will be fully vested on April 29, 2027. |
Grants of Plan-Based Awards
| (5) Represents options granted on June 9, 2023. Subject to continuous service, these options vest on each anniversary of the date of grant with 10% of the total options granted on year 3, 15% of the total options granted on each of years 4 and 5, and 20% of the total options granted on each of years 6 and 7, and will be fully vested on June 9, 2030. |
Grants of Plan-Based Awards
| (6) Represents options granted on April 11, 2024. Subject to continuous service, these options vest on each anniversary of the date of grant with 10% of the total options granted on each of years 2 and 3, 15% of the total options granted on each of years 4 and 5, and 20% of the total options granted on each of years 6 and 7, and will be fully vested on April 11, 2031. |
Grants of Plan-Based Awards
| (7) Represents options granted on April 13, 2025. Subject to continuous service, these options vest and become exercisable as to 1/7th of the options on each anniversary of the grant date, and will be fully vested on April 13, 2032. |
Grants of Plan-Based Awards
| (8) Represents options granted on May 30, 2025. Subject to continuous service, these options vest and become exercisable as to 20% of the options on each anniversary of the grant date, and will be fully vested on May 30, 2030. |
Grants of Plan-Based Awards
| (9) Represents restricted stock units granted on May 30, 2025. Subject to continuous service, these restricted stock units vest as to 35% of the total units granted on each of January 31, 2027 and January 31, 2028, and will be fully vested on January 31, 2028. |
Grants of Plan-Based Awards
| (10) Mr. Duban’s option expiration date for all awards is April 26, 2026, which is the expiration date of the post-termination exercise period. |
Grants of Plan-Based Awards
| + | | | 82 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Grants of Plan-Based Awards
OPTIONS EXERCISED, UNITS VESTED & STOCK VESTED The following table presents all restricted stock units and stock awards that vested in fiscal 2025.
Grants of Plan-Based Awards
| | STOCK AWARDS | | | NAME | NUMBER OF SHARES ACQUIRED ON VESTING | VALUE REALIZED ON VESTING | | Gary Friedman | — | $— | | Jack Preston | — | $— | | Eri Chaya | — | $— | | Lisa Chi | 6,000 | $1,192,980 | | Stefan Duban(1) | — | $— |
Grants of Plan-Based Awards
| (1) Mr. Duban resigned from his position on January 26, 2026. Prior to January 26, 2026, Mr. Duban did not have any option exercise activity or restricted stock units or stock awards vest during fiscal 2025. |
Grants of Plan-Based Awards
BURN RATE, SHARE REPURCHASE PROGRAMS & DILUTION The aggregate equity burn rate is a measurement of how quickly the Company is granting stock-based incentive awards in relation to shares outstanding. We calculate our “burn rate” using the total number of equity awards (full value stock awards and stock options) granted under our stock incentive plan during the current fiscal year as a percentage of the total number of common shares outstanding as of the prior fiscal year. Using this formulation, our fiscal 2025 burn rate was 2.1%. We believe that understanding our use of equity under our stock incentive plan (including our annual burn rate) requires understanding the impact of our recent share repurchase programs on the potential dilution to our shareholders from awards of stock-based incentive compensation, which we call our “overhang.” In recent years, we have maintained active share repurchase programs as a means of creating shareholder value for our investors. To illustrate, since June 2022, when we announced our updated share repurchase program in an aggregate amount of up to $2.45 billion, we have repurchased 7.6 million shares of our common stock for an aggregate price of $2.3 billion. We believe that our share repurchase programs have been a key component of our overall shareholder returns, including the substantial increases in our share price from $24 per share at the time of our initial public offering and we expect that the ongoing use of share repurchases will be an important element of our ongoing strategy. Share repurchases also have the effect of offsetting dilution related to stock-based incentive awards. We are conscious that equity awards can be an important incentive for our leadership team in their efforts to drive shareholder returns while at the same time being mindful that share repurchases can be a means of offsetting dilution related to equity grants. As shown below, during fiscal 2022 and fiscal 2023, we completed substantial share repurchases that more than offset the dilutive effect of our equity awards granted during that time.
Grants of Plan-Based Awards
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 83 |
Grants of Plan-Based Awards
As a result, we analyze our equity metrics as a percentage of both the total number of common shares outstanding and the total number of pro forma common shares outstanding, which takes into account the effect of our share repurchase programs on our total number of common shares outstanding. We calculate our overhang as the total number of shares to be issued under outstanding equity awards (including any unexercised and unvested outstanding awards, a large portion of which is comprised of vested options which, if exercised, would significantly reduce overhang), plus shares available for issuance under our equity plans as a percentage of the total number of common shares outstanding. Our pro forma overhang takes into account the effect of our share repurchase programs by using the total number of common shares outstanding prior to our share repurchases during fiscal 2022 and fiscal 2023 (as of fiscal 2021) and includes the actual issuance of common stock via equity instruments through the current fiscal year end period. As presented in the table below, our pro forma overhang for fiscal 2025 based on the pro forma common shares outstanding was 18.0% and our overhang for fiscal 2025 based on the total number of common shares outstanding was 23.6%.
Grants of Plan-Based Awards
| | | FISCAL 2025 (POST REPURCHASE ACTIVITY) | | | | | FISCAL 2021 (PRE-REPURCHASE ACTIVITY) | ON FISCAL 2025 SHARES OUTSTANDING | ON FISCAL 2021 SHARES OUTSTANDING | ON PRO FORMA FISCAL 2025 SHARES OUTSTANDING | | Shares to be Issued under Outstanding Options & RSUs | 7,719,857 | 3,759,073 | 3,759,073 | 3,759,073 | | Shares Available for Issuance | 427,062 | 2,046,492 | 2,046,492 | 2,046,492 | | Shares Outstanding | 21,506,967 | 18,818,976 | 21,506,967 | 26,426,491 | | Overhang | 27.5% | 23.6% | 21.3% | 18.0% |
Grants of Plan-Based Awards
| + | | | 84 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Grants of Plan-Based Awards
NONQUALIFIED DEFERRED COMPENSATION None of our named executive officers contributed to or received earnings from a nonqualified deferred compensation plan during fiscal 2025. EMPLOYMENT & OTHER COMPENSATION AGREEMENTS We have entered into employment agreements with the following named executive officers.
Jack Preston, Eri Chaya, Lisa Chi and Stefan Duban
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Friedman, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Friedman during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Friedman’s total compensation for each year to determine the compensation actually paid: |
Jack Preston, Eri Chaya, Lisa Chi and Stefan Duban
| (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Friedman), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Friedman) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Friedman) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table As described in more detail in the section “Executive Compensation—Compensation Discussion & Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. While we utilize several operating performance measures to align executive compensation with our performance, all of those measures are not presented in the Pay Versus Performance table for purposes of the Pay Versus Performance Rule. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s operating performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table.
Compensation Actually Paid and Cumulative TSR of the Company
Compensation Actually Paid and Cumulative TSR of the Company The graph below sets forth the relationship between the amount of Compensation Actually Paid to our PEO, the average amount of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s TSR over the five most recently completed fiscal years assuming that $100 was invested at the market close on January 29, 2021 in the common stock of RH.
Compensation Actually Paid and Cumulative TSR of the Company
| + | | | 92 | 2026 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income The graph below sets forth the amount of Compensation Actually Paid to our PEO, the average amount of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the five most recently completed fiscal years.
Compensation Actually Paid and Adjusted Income
Compensation Actually Paid and Adjusted Income The graph below sets forth the amount of Compensation Actually Paid to our PEO, the average amount of Compensation Actually Paid to our Non-PEO NEOs, and our Adjusted Income during the five most recently completed fiscal years. For fiscal 2025, we utilized Adjusted Income when setting goals in the LIP. For more information regarding the Company’s executive compensation programs, including the LIP, see the section “Executive Compensation—Compensation Discussion & Analysis.”
Compensation Actually Paid and Adjusted Income
| EXECUTIVE COMPENSATION | 2026 PROXY STATEMENT | 93 |
Our Policy Regarding Related Party Transactions
| HILARY KRANE | | | Age: 62 Director since 2016 Board Committees: Audit | Hilary Krane has served on our Board of Directors since her appointment in June 2016. Ms. Krane is currently the Chief Legal Officer for Creative Artists Agency. Up until February 2022, Ms. Krane served in various executive roles at Nike since 2010, including most recently as Executive Vice President, Chief Administrative Officer and General Counsel for NIKE, Inc. Prior to joining NIKE, Inc., Ms. Krane was General Counsel and Senior Vice President for Corporate Affairs at Levi Strauss & Co. from 2006 to 2010. From 1996 to 2006, she was a partner and assistant general counsel at PricewaterhouseCoopers LLP. Ms. Krane has been a director at the Federal Reserve Bank of San Francisco, Portland Branch since January 2018. Ms. Krane holds a Bachelor of Arts from Stanford University and a J.D. from the University of Chicago. | | Qualifications: | Ms. Krane was selected to our Board of Directors because of her extensive operational, compliance and business experience contributing to the growth and development of innovative and iconic global brands. |
Our Policy Regarding Related Party Transactions
| KATIE MITIC | | | Age: 56 Director since 2013 Board Committees: Audit | Katie Mitic is Chief Executive Officer and Co-founder of SomethingElse, Inc., a technology-enabled beverage platform building a portfolio of modern consumer brands, a role she has held since 2019. Ms. Mitic previously held senior leadership roles at several leading technology companies during periods of significant platform growth. At Facebook, Inc., she served as Director of Platform and Mobile Marketing, where she helped scale the company’s global developer ecosystem and strategic partnerships. At Palm, Inc., she served as Senior Vice President of Product Marketing, responsible for expanding the company’s product portfolio and international footprint prior to its acquisition by Hewlett-Packard. Earlier, Ms. Mitic held leadership roles at NetDynamics (acquired by Sun Microsystems), where she helped launch one of the industry’s first application servers; at Four11, where she helped build RocketMail, the early web-based email service that became Yahoo! Mail; and at Yahoo!, where she served as Vice President and General Manager. Ms. Mitic currently serves on the boards of DVx Ventures and LeanIn.Org. She holds a Bachelor of Arts from Stanford University and an M.B.A. from Harvard Business School. | | Qualifications: | Ms. Mitic was selected to our Board of Directors because of her entrepreneurial leadership and extensive experience building and scaling innovative technology and consumer businesses. |
Our Policy Regarding Related Party Transactions
| ALI ROWGHANI | | | Age: 53 Director since 2015 Board Committees: Nominating and Corporate Governance | Ali Rowghani was appointed to our Board of Directors on January 22, 2015. Mr. Rowghani has served in executive leadership positions at innovative growth companies, including Twitter, Inc. and Pixar Animation Studios, Inc. He is currently the founder and Managing General Partner of First Harmonic, a technology investing firm established in 2025. Mr. Rowghani was previously the Manager of YCombinator Continuity Fund, an investor in growth-stage startups that Mr. Rowghani launched in 2015. At Twitter, Mr. Rowghani was hired as the Company’s first Chief Financial Officer in March 2010, and later served as Chief Operating Officer, with responsibility for business development, platform, media, product, and business analytics, from December 2012 to June 2014. Prior to Twitter, from June 2002 to February 2010, Mr. Rowghani served in various leadership roles at Pixar, including Chief Financial Officer and Senior Vice President, Strategic Planning, reporting to Pixar founder and President, Ed Catmull. Mr. Rowghani holds a Bachelor of Arts in International Relations and an M.B.A. from Stanford University. | | Qualifications: | Mr. Rowghani was selected to our Board of Directors because he possesses extensive operational, financial and leadership experience, and because of his expertise in scaling innovative and high-growth companies. |