DEF 14A of Movado Group Inc
Filed May 11, 2023 · FY20230001140361-23-024146
PROPOSAL 1 — ELECTION OF DIRECTORS
PROPOSAL 1 — ELECTION OF DIRECTORS Directors hold office until the next annual meeting of shareholders and until the election and qualification of their successors. Under the Company’s by-laws, the Board of Directors can change the number of directors comprising the entire Board of Directors so long as the number is not less than three. The Board of Directors currently consists of eight directors, including four Caucasian males, one Caucasian female, two Hispanic males and one Black female. All of the nominees are members of the present Board of Directors. If any nominee for election to the Board of Directors should be unable to accept nomination or election as a director, which is not expected, your proxy may be voted for a substitute or substitutes designated by the Board of Directors or the number of directors constituting the Board of Directors may be reduced in accordance with the Company’s by-laws. Directors will be elected by the holders of a plurality of the voting power present in person or represented by proxy and entitled to vote. Abstentions will not be counted for purposes of the election of directors. The Board of Directors recommends that shareholders vote FOR the election of the nominees listed below.
PROPOSAL 1 — ELECTION OF DIRECTORS
| Name | Age | Director Since | Position | | Peter A. Bridgman | 71 | 2014 | Director and Audit Committee Chair | | Alex Grinberg | 60 | 2011 | Senior Vice President Customer Experience; Director | | Efraim Grinberg | 65 | 1988 | Chair of the Board of Directors and Chief Executive Officer; Director | | Alan H. Howard | 63 | 1997 | Lead Director and Compensation and Human Capital Committee Chair | | Richard Isserman | 88 | 2005 | Director | | Ann Kirschner | 72 | 2019 | Director and Nominating, Governance and Corporate Responsibility Committee Chair | | Maya Peterson | 43 | 2022 | Director | | Stephen Sadove | 71 | 2018 | Director |
PROPOSAL 1 — ELECTION OF DIRECTORS
Except for Efraim Grinberg and Alex Grinberg, who are brothers, there are no family relationships between any of the Company’s directors. There are no arrangements between any director and any other person pursuant to which any of them was elected a director. Peter A. Bridgman served as Senior Vice President and General Auditor at PepsiCo Inc. before his election to the Board of Directors of the Company in February 2014. From 2000 to 2011, Mr. Bridgman was SVP and Controller at PepsiCo Inc., during which time he led the financial reporting and control functions for the $67 billion global consumer products company, ensuring best practice governance and regulatory compliance around the world. From 1992 to 2000, Mr. Bridgman served as SVP and Controller of Pepsi Bottling Group and from 1985 to 1992, he held positions of increasing responsibility at Pepsi International. Prior to that, Mr. Bridgman spent 12 years at KPMG where he had global client audit responsibilities. Mr. Bridgman served on the board of Alltel Corporation, a $10 billion wireless provider acquired by Verizon in 2009, and Pepsi Bottling Ventures, an $800 million private beverage manufacturer. He received a B.S. in Economics and Accounting from Bristol University in England, and is both a Certified Public Accountant in the United States and a Chartered Accountant in England. Mr. Bridgman’s extensive experience in financial reporting and internal control and his background in public accounting qualify him for service on our Board of Directors and provide the Board of Directors with additional expertise in these areas. Alex Grinberg joined the Company in December 1994 as a territory manager for the Movado brand and was promoted to Vice President of International Sales for the Concord brand in June 1996. From February 1999 through October 2001 he was stationed in the Far East, developing Movado Group brands in Hong Kong and Japan. Beginning in November 2001 he held a number of positions of increasing responsibility within the Concord brand in the United States until November 2010, when he was appointed Senior Vice President of Customer/Consumer Centric Initiatives. In 2020, Mr. Grinberg was appointed Senior Vice President of Customer Experience with responsibility for developing and implementing strategies to improve customer experience and recommending best practices to ensure that Company decisions align with our customers’ needs. Mr. A. Grinberg’s many years with the Company, during which time he has held a number of positions in sales and brand management, and his international experience, make him well qualified for service on the Board of Directors. Efraim Grinberg has served as Chair of the Board of Directors and the Company’s Chief Executive Officer since 2009. Mr. E. Grinberg’s more than three decades of experience in the watch industry and in a variety of positions at the Company during this period of its growth provides him with extensive knowledge of the Company’s brands, markets, competitors, customers and other aspects of its business and the industry as a whole and qualifies him for service on the Board of Directors. Additional biographical information regarding Mr. E. Grinberg can be found under “Executive Officers,” below. Alan Howard is the Managing Partner of Heathcote Advisors LLC, which he formed in March 2008 and which provides financial advisory services as well as makes principal investments. Since April 2022, Mr. Howard has served on the board of directors of New England Expert Technologies Corporation, a privately held company that manufactures complicated, close tolerance parts and assemblies, where he also serves on the board’s compensation committee. Since April 2018, Mr. Howard has served on the board of directors of the BNY Mellon Family of Funds (formerly The Dreyfus Family of Funds), a number of equity, fixed income and money market funds managed by investment advisor BNY Mellon Investments, where he also serves as chair of the board’s audit committee and a member of the board’s compensation and nominating committees. From March 2020 through April 2021, Mr. Howard also served on the board of directors of Diamond Offshore Drilling (NYSE:DO), a global provider of contract drilling services to the energy industry, where he also served as Lead Director and chair of the audit committee as well as a member of the executive and finance committees. From 2012 through 2019, Mr. Howard was a member of the board of directors of Dynatech/MPX Holdings LLC, a global supplier and service provider of U.S. military aircraft parts, and held executive positions with that company and its subsidiaries. From 2008 through 2010 he was Managing Partner of advisory firm S3 Strategic Advisors LLC. From June 2006 through July 2007, Mr. Howard was a Managing Director of Greenbriar Equity Group LLC, a private equity firm. Prior to June 2006, Mr. Howard was a Managing Director of Credit Suisse First Boston LLC, an international financial services firm which he joined in 1985. Mr. Howard’s broad experience in corporate governance, organizational management and investment banking make him well qualified for service on the Board of Directors. Richard Isserman had a distinguished career of nearly 40 years with KPMG LLP and, for 26 years, served as Audit Partner in KPMG’s New York office. He also led KPMG’s real estate audit practice in New York and was a member of the firm’s SEC Reviewing Partner’s Committee. Mr. Isserman retired from KPMG in June 1995. He is a licensed New York State CPA. Based on his years of demonstrated leadership in the field of public accounting, Mr. Isserman provides our Board of Directors with in-depth knowledge and experience in financial, accounting and risk management issues. Ann Kirschner is an educator, consultant, and writer. Since 2006 she has been associated with The City University of New York, where she is University Professor, having previously served as Dean of Macaulay Honors College, and Strategic Advisor to the Chancellor. Ms. Kirschner is also President and Founder of Comma Communications, which provides advisory services for institutions and organizations focused on innovation in media, technology and education. A pioneer in digital technology and media and a veteran of four start-ups in cable, satellite, and online, she was the first digital strategist for the National Football League, where she launched NFL.COM and NFL SUNDAY TICKET. Ms. Kirschner serves on the boards of Strategic Cyber Ventures and Noodle Partners. She is Vice Chair of Arizona State University’s EdPlus; a trustee of the Paul and Daisy Soros Foundation, Footsteps and nycFIRST; co-chair of the Princeton University Graduate School Leadership Council; a former trustee of Princeton University; and a member of the advisory boards of Chegg, ShortTok and WorldQuant University. Ms. Kirschner’s extensive experience in education and digital technology adds an important perspective to the Board as the Company continues to invest in online marketing and technology and makes her well qualified for service on the Board of Directors. Maya Peterson currently serves as Vice President, Insights & Strategy at Universal Music Group for Brands. Additionally, she serves as a Senior Advisor to Influence Change, a nonpartisan organization focused on voter justice. She has held both of these positions since 2020. From 2013 through 2020, Ms. Peterson held senior marketing positions at Viacom CBS, and before that held brand and marketing roles at several other consumer products and services companies. Since 2021, Ms. Peterson has served as an Advisory Board Member for Good
PROPOSAL 1 — ELECTION OF DIRECTORS
Information, Inc. and since 2018 as a Youth Solutions Advisory Council Member for the YMCA Global Alliance. Ms. Peterson has received various awards for her marketing expertise and ability to influence through media. Her media and marketing experience and proven ability to research and leverage consumer insights and attract millennial and GenZ consumers make her well qualified to serve on the Board of Directors. Stephen Sadove has served as a founding partner of JW Levin Management Partners LLC, a private management and investment firm, since 2015. Mr. Sadove has also served since 2014 as principal of Stephen Sadove and Associates, which provides consulting services to retail and non-retail clients. From 2007 until 2013, Mr. Sadove served as Chair and Chief Executive Officer of Saks Incorporated, having previously served Saks in the roles of Vice Chair, Chief Operating Officer and Chief Executive Officer. Prior to his tenure with Saks, Mr. Sadove served Bristol-Myers Squibb Company (NYSE: BMY) from 1991 until 2001, most recently as Senior Vice President of Bristol-Myers Squibb and President, Worldwide Beauty Care. Mr. Sadove currently serves on the board of directors of Colgate-Palmolive Company (NYSE: CL); Aramark (NYSE: ARMK), where he serves as Chair of the Board; and Park Hotels and Resorts Inc. (NYSE: PK), where he serves as the Lead Independent Director. Mr. Sadove served on the board of directors of J.C. Penney Company, Inc. (NYSE: JCP) until May 2016 and Ruby Tuesday, Inc. (NYSE: RT) until December 2017. He currently serves as Chairman Emeritus of the board of trustees of Hamilton College. Mr. Sadove’s operations and leadership expertise, extensive marketing experience at retail and consumer-products companies, and significant public company directorship experience make him well qualified to serve on the Board of Directors.
Compensation Philosophy
| What we do | What we don’t do | | ✔ Endeavor to pay fair and equitable compensation to employees throughout the Company ✔ Base a significant portion of executive pay on business performance; pay is not guaranteed ✔ Align pay outcomes with individual and Company performance ✔ Align executive compensation with the interests of our shareholders ✔ Balance short-term and long-term incentives ✔ Prohibit short sales; trading in puts, calls and other derivatives of Company stock; and buying Company stock on margin ✔ Maintain an excess incentive compensation “clawback” policy applicable to executive officers ✔ Conduct an annual say-on-pay vote | ✗ No dividends or dividend equivalents paid on unvested stock-based awards ✗ No repricing of underwater stock options ✗ No tax gross-ups for executive perquisites ✗ No tax gross-ups related to change in control ✗ No excessive reliance on formulaic models that can result in inappropriately high or low incentive compensation when viewed in the context of the actual operating environment |
Shareholder Engagement
Shareholder Engagement The Compensation and Human Capital Committee (as used in this Compensation Discussion and Analysis, the “Committee”) actively solicits and considers feedback from shareholders regarding the Company’s executive compensation programs. In the spring of 2022 and in March 2023, we held discussions regarding corporate governance and compensation matters with several of our largest shareholders. These discussions, which took place after fiscal year 2023 executive compensation programs were established, informed our executive compensation decisions for fiscal year 2024. During the discussions, the shareholders expressed a preference for long-term incentive programs with vesting conditions tied to financial performance over a multi-year period, although the shareholders were not prescriptive as to program structure. Taking into account the feedback received from shareholders and the review conducted by Meridian, the Committee revised the Company’s long-term incentive executive compensation program for fiscal 2024 to replace stock options with performance-based restricted stock units. The Committee intends to continue this structure in future years. The Committee also increased the CEO’s target equity grant value for fiscal 2024, with the majority of the increase in the form of the new PSUs. Based on shareholder input, the Committee also capped payouts under the Company’s fiscal 2024 Annual Incentive Compensation Plan at 200%. At the 2022 annual meeting, approximately 85% of the votes represented and 86% of the votes cast voted in favor of our shareholders’ advisory vote on executive compensation. In addition, more than 96% of the votes cast at our 2017 annual meeting expressed a preference for annual advisory votes on executive compensation. In accordance with the shareholders’ stated preference, the Board of Directors decided that such future advisory votes would be submitted to shareholders every year. Shareholders will have another opportunity at this year’s annual meeting to express their preference regarding the frequency of future advisory votes on executive compensation. In addition, shareholders are invited to express their views to the Board of Directors regarding executive compensation generally as well as on other matters as described in this proxy statement under the heading “Communications with the Board of Directors.”
Role of the Compensation and Human Capital Committee
| 2 | As explained in the fiscal 2022 and 2021 proxy statements, by the time the fiscal 2021 bonus program was established in late March 2020, COVID-19 had been declared a pandemic and the Committee recognized that its impact on operating profit could not be quantified, that the adjusted operating profit target of $60 million was likely unattainable, and that any bonus for fiscal 2021 would be at the Committee’s discretion. The Committee ultimately awarded a partial bonus in light of the decisive actions taken by management and the significant financial and strategic achievements realized despite the pandemic. |
Compensation Objectives
Compensation Objectives The fundamental purpose served by every compensation recommendation made by the Company and approved by the Committee is to appropriately reward, motivate, retain and attract a group of highly qualified individuals who contribute to the Company’s continued success, with the ultimate objective of enhancing shareholder value. The three most significant elements of compensation used by the Company in developing specific compensation packages offered to its executives and management level employees generally are: (1) base salary, (2) annual incentive cash bonuses, and (3) long-term equity compensation. Of these, annual incentive cash bonuses and equity compensation vary with performance, are closely linked to the creation of long-term shareholder value and, as such, most closely align executives’ interests with those of the Company’s shareholders. The Company and the Committee believe that the most effective executive compensation programs are those designed to reward the achievement of specific strategic and financial goals set by the Company and those that are closely linked to the creation of long-term shareholder value; therefore, a significant portion of the total compensation that may be earned by the NEOs is determined by these performance-based elements.
Fiscal 2023 Executive Compensation Components
| • | performance-based annual incentive compensation; |
Fiscal 2023 Executive Compensation Components
| • | equity incentive compensation; |
Base Salary
| • | market data with respect to average merit and cost of living increases for similar positions; |
Performance-Based Annual Incentive Compensation - Structure
Performance-Based Annual Incentive Compensation - Structure The Company’s annual performance-based incentive compensation program is governed by the Annual Incentive Compensation Plan, in which all bonus-eligible employees (including the NEOs) participate. This plan is designed to tie a significant portion of participants’ annual cash compensation to the Company’s annual financial performance. For fiscal 2023, the Committee set the target annual incentive payments for the CEO at 150% of his base salary; for Ms. DeMarsilis at 75% of her base salary; for Mr. Soltani at 75% of his base salary; for Mr. Sussis at 40% of his base salary; and for Ms. D’Elia at 40% of her base salary. These percentages were unchanged from fiscal 2022, except for Ms. DeMarsilis’ and Mr. Soltani’s targets, which were each increased by 15% of base salary. The Committee determines the target bonus for each NEO by exercising its judgment of what an appropriate percentage is, informed by a consideration of such person’s total compensation compared to target bonus levels and total compensation payable to other executive officers in other positions within the Company and relative to similar executive positions in the competitive marketplace. The Committee assesses the Company’s overall financial performance and each NEO’s individual performance in determining the cash incentive actually paid to each of them. To assess corporate performance for the fiscal year, the Committee considers as a threshold matter the extent to which the Company met the criterion for funding the bonus pool under the Annual Incentive Compensation Plan. In fiscal 2023, the Committee established adjusted operating income of $130 million as the target for 100% bonus pool funding for all bonus-eligible employees. In determining the amount of funding of the overall bonus pool, the Committee also assesses the Company’s overall financial performance, the general operating environment, the Company’s strategic execution and relative performance in the watch industry, and total shareholder return during the year. These factors serve the purpose of providing the Committee with objective criteria by which to assess the Company’s performance notwithstanding that they are not assigned a relative weight to one another. In addition to financial performance and the overall level of bonus pool funding, the Committee also considers individual performance in determining the amount of each NEO’s bonus payment under the Annual Incentive Compensation Plan. There is no specific relative weight given by the Committee to the financial performance of the Company as compared to the individual performance of any executive officer. The Committee determines the amount of each NEO’s annual incentive payment regardless of the extent to which any of the performance criteria (individual or corporate) are met. However, the Committee does, in practice, take into account these criteria, including individual performance. In considering individual performance, the Committee is briefed by, and relies on a general summary assessment and recommendation provided by, the Company’s CEO and/or Senior Vice President of Human Resources relative to the performance of the NEOs (other than the CEO). That summary assessment and recommendation addresses the individual performance goals of the NEO as well as his or her overall performance. When it considers the individual performance of the CEO in determining the annual incentive payment to be made to him, the Committee considers the CEO’s individual performance goals, the performance of the business viewed holistically and the economic context relevant to the performance.
Performance-Based Annual Incentive Compensation – Fiscal 2023 Payouts
Performance-Based Annual Incentive Compensation – Fiscal 2023 Payouts In determining the overall level of bonus pool funding for fiscal 2023, the Committee started its analysis by reviewing adjusted operating income performance relative to the $130 million bonus target. The Committee then assessed the Company’s overall financial performance, the general operating environment, the significant negative impact of foreign exchange movements on operating results, the Company’s strategic execution and relative performance in the watch industry, and total shareholder return during the year. The Company’s strategic objectives for fiscal 2023 included aggressively driving its digital businesses, further developing key international growth markets, and growing its jewelry business. The Company made significant progress against each of these objectives, including increasing the portion of net sales attributable to international locations from 52.7% to 55.6% and growing jewelry sales by over 25%. In light of all these factors, the Committee approved funding the overall pool under the Annual Incentive Compensation Plan at a level that resulted in the Company’s adjusted operating income being $123.2 million, which was $3.5 million in excess of fiscal 2022’s then-record results, but $6.8 million below the $130 million target established by the Committee in March 2022. In determining the specific annual incentive payment for each NEO, the Committee considered the overall level of bonus pool funding as well as each NEO’s contributions to the Company’s operational, strategic and financial performance. The specific award granted to each NEO is set forth in the SUMMARY COMPENSATION TABLE below. Since the fiscal 2023 AICP target level of performance was not achieved, in accordance with SEC rules the entire amount of each NEO’s fiscal 2023 AICP payout is listed in the “Bonus” column of the Summary Compensation Table.
Equity Incentive Compensation
Equity Incentive Compensation Stock ownership is a key element of the Company’s compensation program for the named executive officers and senior management generally, as well as mid-level managers throughout the Company. Under the Stock Plan, the Committee may grant participants shares of the Company’s Common Stock, restricted stock, share units, stock options, stock appreciation rights, performance units and/or performance bonuses. In granting these awards, the Committee may establish any conditions or restrictions it deems appropriate. All grants made by the Committee under the Stock Plan since its inception have been in the form of stock options, time-vesting restricted stock unit awards (pursuant to which unrestricted shares of Common Stock are issued to the grantee when the award vests) or performance-based awards (under which vesting occurs only if one or more predetermined financial goals are achieved within the relevant performance period). The Committee believes that all of these equity awards are useful retention tools to the extent that vesting only occurs after a period of several years and are also an effective means of encouraging award recipients to focus on enhancing shareholder value over the long term by directly aligning the recipient’s financial interests with the interests of the Company’s shareholders. The Committee typically makes annual grants under the Stock Plan effective shortly after the release of the Company’s fourth quarter and year-end earnings results. Considering the Company’s history of using various types of equity grants under the Stock Plan as well as the difficulty of projecting financial performance given the pending COVID-19 pandemic, for fiscal 2023 the Committee decided to grant the NEOs and other senior level executives a mix of time-based restricted stock unit awards (“RSUs”) and stock options, which the Company considers to be performance based and aligned with shareholder experience, as stock options have value only to the extent share price increases. Both RSUs and stock options cliff-vest three years from the grant date. Each NEO’s equity grant was valued at 100% of his or her target bonus. Approximately half the value of each NEO’s equity grant was made in the form of time-based RSUs and approximately half was made in the form of stock options. The equity awards are reported below in the SUMMARY COMPENSATION TABLE FOR FISCAL 2023 and in the GRANTS OF PLAN-BASED AWARDS table. As discussed above, the Committee revised its long-term incentive executive compensation program for fiscal 2024 to replace the annual grant of stock options with performance-based restricted stock units vesting based on performance achievement over a three-year period.
Retirement and Other Post-Employment Benefits
Retirement and Other Post-Employment Benefits 401(k) Plan All employees in the United States, including the NEOs, are eligible to participate in the Company’s Employee Savings and Investment Plan (“401(k) Plan”), a tax-qualified defined contribution retirement savings plan that includes a Company matching contribution feature. Deferred Compensation Plan The NEOs and certain other executives selected by the Committee are eligible to participate in the Company’s Amended and Restated Deferred Compensation Plan for Executives (“DCP”). The DCP is designed to offer retirement benefits to the NEOs, senior management and key employees, consistent with overall market practices, to attract and retain the talent needed in the Company. Under the DCP, participants may defer amounts from their base salary and cash bonus (if any) annually, and the Company will credit to the account of each participant a matching contribution in an amount equal to one hundred percent of the compensation deferral, up to a maximum match equal to either 10% (for “Group I” participants) or 5% (for “Group II” participants) of the participant’s base salary. During fiscal 2023, Messrs. E. Grinberg and Soltani and Ms. DeMarsilis were Group I participants and Mr. Sussis and Ms. D’Elia were Group II participants. Twenty percent of the Company’s matching contribution is in the form of rights to receive Common Stock. All matching contributions vest ratably in annual installments over five years. The DCP also permits the Company to make discretionary contributions to any participant’s DCP account. Consistent with recent years (except for fiscal 2021, which was significantly impacted by the COVID-19 pandemic), the Committee exercised its discretion to supplement Mr. E. Grinberg’s matching contributions for fiscal 2023. Specifically, in March 2022, the Committee approved $125,000 in discretionary contributions to the CEO’s DCP account (bringing his total Company contributions to $250,000). Such contributions were made ratably over the balance of fiscal 2023. Eighty percent of such contributions were made in cash and the balance in rights to receive Common Stock, in each case vesting ratably in annual installments over five years. Participants may direct the investment of amounts in their DCP accounts (other than rights to receive Common Stock) among third-party investment funds that are made available to them under the plan. Those funds largely track the funds offered under the 401(k) Plan. Further information regarding the participation by the NEOs in the DCP is discussed in further detail under the heading “NONQUALIFIED DEFERRED COMPENSATION” below. Severance and Change of Control Agreements The Company has a severance agreement with Ms. D’Elia under which her then-current base salary would continue to be paid for 12 months after the termination of her employment by the Company without cause. See POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL, below, for a description of this agreement.
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
SUMMARY COMPENSATION TABLE FOR FISCAL 2023 The following Summary Compensation Table sets forth information about the compensation paid in respect of fiscal 2023 by the Company to the CEO, the CFO and the three most highly compensated executive officers of the Company other than the CEO and the CFO who were serving as executive officers at January 31, 2023. The foregoing individuals are referred to in this proxy statement as the “named executive officers.”
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (i) | (j) | | Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | | Efraim Grinberg, Chair and Chief Executive Officer | 2023 | 1,250,001 | 1,593,750 | 937,496 | 937,503 | — | 344,126(4) | 5,062,875 | | | 2022 | 1,239,809 | — | 937,561 | 939,319 | 3,750,000 | 345,315 | 7,212,004 | | | 2021 | 890,769 | 1,500,000 | — | 1,086,000 | — | 86,694 | 3,563,463 | | Sallie A. DeMarsilis, EVP, Chief Operating Officer & Chief Financial Officer | 2023 | 643,770 | 414,375 | 243,760 | 243,743 | — | 99,463(5) | 1,645,111 | | | 2022 | 615,923 | — | 186,021 | 186,339 | 745,000 | 93,385 | 1,826,668 | | | 2021 | 516,924 | 360,000 | 126,525 | 511,890 | — | 44,359 | 1,559,698 | | Behzad Soltani, EVP, Commercial President & Chief Technology Officer | 2023 | 582,346 | 382,500 | 225,007 | 224,994 | — | 67,908(6) | 1,482,754 | | | 2022 | 511,942 | — | 154,534 | 154,780 | 620,000 | 58,369 | 1,499,625 | | | 2021 | 431,084 | 250,000 | 87,724 | 473,880 | — | 12,066 | 1,254,754 | | Mitchell C. Sussis, SVP, General Counsel and Secretary | 2023 | 416,262 | 151,200 | 83,992 | 84,002 | — | 30,723(7) | 766,180 | | | 2022 | 399,554 | — | 80,374 | 80,561 | 320,000 | 26,084 | 906,573 | | | 2021 | 359,250 | 140,000 | 55,671 | 54,300 | — | 11,776 | 620,997 | | Vivian D’Elia, SVP Human Resources | 2023 | 371,884 | 200,000 | 75,015 | 74,998 | — | 28,548(8) | 750,445 | | | 2022 | 357,963 | — | 71,950 | 72,122 | 290,000 | 25,804 | 817,839 | | | 2021 | 329,134 | 140,000 | 50,610 | 48,870 | — | 8,620 | 577,234 |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (1) Salary amounts include amounts deferred at the election of the executive under the Company’s DCP and under the 401(k) Plan. Amounts deferred under the DCP are also shown in the NONQUALIFIED DEFERRED COMPENSATION TABLE. |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (2) Amounts shown under the “Stock Awards” column and the “Option Awards” column do not reflect compensation actually received by the NEOs. Instead the dollar value of these awards represents the fair value of the awards on the date of grant calculated in accordance with FASB ASC Topic 718. Assumptions used in calculating these amounts are described in Note 18 to the Company’s audited financial statements for the fiscal year ended January 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on March 23, 2023. The stock and option awards cliff-vest on the third anniversary of the grant date and are not subject to any performance conditions other than the continued employment of the grantee. |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (3) Represents the annual incentive payments under the Annual Incentive Compensation Plan. However, since the performance goals for fiscal 2023 and 2021 were not achieved, the payments made under the Annual Incentive Compensation Plan for those years are considered discretionary cash bonus payments and are set forth in the “Bonus” column above. |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (4) Includes a taxable car allowance and automobile insurance reimbursement of $27,056. Includes $63,670 for premiums paid in respect of certain life insurance policies purchased for Mr. E. Grinberg by the Company. Under his arrangement with the Company, Mr. E. Grinberg is entitled to the cash surrender value in respect of certain of these life insurance policies and his beneficiaries are entitled to the applicable benefit without, in either event, reimbursement to the Company of any premiums paid by the Company under such policies. Includes a $3,400 matching contribution made by the Company for the account of Mr. E. Grinberg under the Company’s 401(k) Plan. Includes discretionary and matching contributions of $250,000 to his account under the DCP, of which $200,000 was in cash and $50,000 was in the form of phantom stock units (valued based on the closing prices of the Company’s Common Stock on the grant dates). These contributions under the DCP are also shown in the NONQUALIFIED DEFERRED COMPENSATION TABLE below. |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (5) Includes a taxable car allowance of $6,600 and a taxable housing allowance of $25,200. Includes a $3,400 matching contribution made by the Company for the account of Ms. DeMarsilis under the Company’s 401(k) Plan. Includes a matching cash contribution of $51,447 and a matching non-cash contribution of phantom stock units valued at $12,816 (based on the closing prices of the Company’s Common Stock on the grant dates) to her account under the DCP. These contributions under the DCP are also shown in the NONQUALIFIED DEFERRED COMPENSATION TABLE below. |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (6) Includes a taxable car allowance of $6,600. Includes a $3,400 matching contribution made by the Company for the account of Mr. Soltani under the Company’s 401(k) Plan. Includes a matching cash contribution of $46,431 and a matching non-cash contribution of phantom stock units valued at $11,477 (based on the closing prices of the Company’s Common Stock on the grant dates) to his account under the DCP. These contributions under the DCP are also shown in the NONQUALIFIED DEFERRED COMPENSATION TABLE below. |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (7) Includes a taxable car allowance of $6,600. Includes a $3,400 matching contribution made by the Company for the account of Mr. Sussis under the Company’s 401(k) Plan. Includes a matching cash contribution of $16,578 and a matching non-cash contribution of phantom stock units valued at $4,145 (based on the closing prices of the Company’s Common Stock on the grant dates) to his account under the DCP. These contributions under the DCP are also shown in the NONQUALIFIED DEFERRED COMPENSATION TABLE below. |
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
| (8) Includes a taxable car allowance of $6,600. Includes a $3,400 matching contribution made by the Company for the account of Ms. D’Elia under the Company’s 401(k) Plan. Includes a matching cash contribution of $14,838 and a matching non-cash contribution of phantom stock units valued at $3,710 (based on the closing prices of the Company’s Common Stock on the grant dates) to her account under the DCP. These contributions under the DCP are also shown in the NONQUALIFIED DEFERRED COMPENSATION TABLE below. |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
| Name | Grant Date | Date of Action by Committee | Estimated Possible Payouts Under Non- Equity Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares of Stock or Units #(2) | All Other Option Awards: Number of Securities Underlying Options (#)(3) | Exercise or Base Price of Option Awards ($/sh) | Grant Date Fair Value of Stock and Option Awards ($)(4) | | (a) | (b) | | (d) | (i) | (j) | (k) | (l) | | | | | Target ($) | | | | | | Efraim Grinberg | 03/28/2022 | 03/22/2022 | 1,875,000 | 24,645 | 63,302 | 38.04 | 1,874,998 | | Sallie DeMarsilis | 03/28/2022 | 03/22/2022 | 487,500 | 6,408 | 16,458 | 38.04 | 487,503 | | Behzad Soltani | 03/28/2022 | 03/22/2022 | 450,000 | 5,915 | 15,192 | 38.04 | 450,000 | | Mitchell Sussis | 03/28/2022 | 03/22/2022 | 168,000 | 2,208 | 5,672 | 38.04 | 167,995 | | Vivian D’Elia | 03/28/2022 | 03/22/2022 | 150,000 | 1,972 | 5,064 | 38.04 | 150,013 |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
| (1) Reflects annual cash incentive opportunities for the NEOs in fiscal 2023 under the Company’s Annual Incentive Compensation Plan. See “Fiscal 2023 Executive Compensation Components — Performance Based Annual Incentive Compensation - Structure,” above. There are no threshold or maximum performance levels provided for under the Annual Incentive Compensation Plan. |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
| (2) Reflects time-vesting stock awards granted under the fiscal 2023 long-term incentive program as discussed above under “— Equity Incentive Compensation.” The awards cliff-vest on the third anniversary of the grant date. |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
| (3) Reflects options to purchase Common Stock granted under the fiscal 2023 long-term incentive program as discussed above under “— Equity Incentive Compensation.” These options become fully exercisable on the third anniversary of the grant date and expire on the tenth anniversary of the grant date. |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
| (4) The amounts in column (l) represent the grant date fair value of the stock awards computed in accordance with FASB ASC Topic 718. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| | Option Awards | | | | Stock Awards | | | (a) | (b) | (c) | (e) | (f) | (g) | (h) | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Efraim Grinberg | 27,000 | | 42.12 | 04/15/2024 | 58,590 | 2,071,742 | | | | 200,000 | 16.87 | 12/01/2030 | | | | | | 91,820 | 27.62 | 03/29/2031 | | | | | | 63,302 | 38.04 | 03/28/2032 | | | | Sallie DeMarsilis | | | | | 20,643 | 729,936 | | | 6,300 | | 42.12 | 04/15/2024 | | | | | 9,850 | | 30.36 | 04/15/2025 | | | | | 10,534 | | 27.74 | 04/15/2026 | | | | | 13,660 | | 23.35 | 04/17/2027 | | | | | | 100,000 | 12.42 | 06/16/2030 | | | | | | 23,000 | 16.87 | 12/01/2030 | | | | | | 18,215 | 27.62 | 03/29/2031 | | | | | | 16,458 | 38.04 | 03/28/2032 | | | | Behzad Soltani | | 100,000 | 12.42 | 06/16/2030 | 16,710 | 590,866 | | | | 16,000 | 16.87 | 12/01/2030 | | | | | | 15,130 | 27.62 | 03/29/2031 | | | | | | 15,192 | 38.04 | 03/28/2032 | | | | Mitchell Sussis | 3,171 | | 27.74 | 04/15/2026 | 8,418 | 297,660 | | | 7,980 | | 23.35 | 04/17/2027 | | | | | | 10,000 | 16.87 | 12/01/2030 | | | | | | 7,875 | 27.62 | 03/29/2031 | | | | | | 5,672 | 38.04 | 03/28/2032 | | | | Vivian D’Elia | 2,200 | | 42.12 | 04/15/2024 | 7,577 | 267,923 | | | 3,660 | | 30.36 | 04/15/2025 | | | | | | 9,000 | 16.87 | 12/01/2030 | | | | | | 7,050 | 27.62 | 03/29/2031 | | | | | | 5,064 | 38.04 | 03/28/2032 | | |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| (1) The options with an exercise price of $12.42/share were granted June 16, 2020 and vest June 16, 2023. The options with an exercise price of $16.87/share were granted December 1, 2020 and vest December 1, 2023. The options with an exercise price of $27.62/share were granted March 29, 2021 and vest March 29, 2024. The options with an exercise price of $38.04/share were granted March 28, 2022 and vest March 28, 2025. All vesting dates are contingent on continued employment through such dates. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| (2) Represents unvested stock awards granted under the Company’s Stock Plan which is discussed above under “Fiscal 2023 Executive Compensation Components — Equity Incentive Compensation.” The following table lists the vesting dates (assuming continued employment on such dates) and the number of shares of Common Stock vesting on such dates. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| Name | Vesting Date | Shares (#) | | Efraim Grinberg | 03/29/2024 | 33,945 | | | 03/28/2025 | 24,645 | | Sallie DeMarsilis | 12/01/2023 | 7,500 | | | 03/29/2024 | 6,735 | | | 03/28/2025 | 6,408 | | Behzad Soltani | 12/01/2023 | 5,200 | | | 03/29/2024 | 5,595 | | | 03/28/2025 | 5,915 | | Mitchell Sussis | 12/01/2023 | 3,300 | | | 03/29/2024 | 2,910 | | | 03/28/2025 | 2,208 | | Vivian D’Elia | 12/01/2023 | 3,000 | | | 03/29/2024 | 2,605 | | | 03/28/2025 | 1,972 |
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023
| | Option Awards | | Stock Awards | | | (a) | (b) | (c) | (d) | (e) | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Efraim Grinberg | — | — | 31,715 | 1,254,328 | | Sallie DeMarsilis | — | — | 6,134 | 242,600 | | Behzad Soltani | — | — | 3,636 | 143,804 | | Mitchell Sussis | — | — | 2,750 | 108,763 | | Vivian D’Elia | 2,700 | 10,248 | 2,370 | 93,734 |
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023
| (1) Value represents the excess of the market price of the shares on the date of exercise, over the exercise price of the option. |
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023
| (2) Value represents the number of shares vesting multiplied by the market price of the shares on the vesting date. |
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION Under the Company’s DCP, participants may defer amounts from their base salary and cash bonus, if any, annually and the Company will credit to the account of each participant a matching contribution in an amount equal to the deferral, up to a maximum match of either 10% or 5% of the participant’s base salary (depending on whether the participant is included in Group I or Group II, as defined in the DCP). During fiscal 2023, Messrs. E. Grinberg and Soltani and Ms. DeMarsilis were in Group I; and Ms. D’Elia and Mr. Sussis were in Group II. Deferral elections must be made no later than December 31 of the year before the year in which the salary or bonus will be deferred. Twenty percent of the Company’s matching contribution is made in the form of rights to the Company’s Common Stock, representing the number of shares (including fractional shares) of Common Stock that the matching contribution could purchase based upon the New York Stock Exchange’s closing price of the stock on the date when the matching contribution is made. Matching contributions are made on the last business day of each calendar quarter. The Company also has the right to make discretionary contributions to any participant’s account in such amount and in such manner as it shall determine. The following table shows the deferrals made by the NEOs and the contributions made by the Company under the DCP in fiscal 2023.
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
| (a) | (b) | (c) | (d) | (e) | (f) | | | Executive Contributions in Last FY(1) ($) | Registrant Contributions in Last FY(1) ($) | Aggregate Earnings in Last FY(2) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE(3) ($) | | Efraim Grinberg | 125,000 | 250,000 | (746,444) | — | 12,389,010 | | Sallie DeMarsilis | 64,308 | 64,263 | (274,719) | — | 3,769,628 | | Behzad Soltani | 120,039 | 57,908 | (19,909) | — | 451,100 | | Mitchell Sussis | 20,792 | 20,723 | 1,459 | — | 351,789 | | Vivian D’Elia | 280,901 | 18,548 | (334,307) | — | 4,520,210 |
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
| (1) The amounts reported in column (b) above are also reported as compensation to the NEO in columns (c), (d) and/or (g) of the SUMMARY COMPENSATION TABLE above. The amounts reported in column (c) above are also reported as compensation to the NEO in column (i) of the SUMMARY COMPENSATION TABLE above. |
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
| (2) These amounts are not required to be reported as compensation in the Summary Compensation Table for fiscal 2023 because there were no above-market earnings on the deferred compensation. |
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
| (3) The amounts reported in column (f), other than earnings on deferred compensation, have all been previously disclosed in Summary Compensation Tables in our prior proxy statements, except for Mr. Soltani and Ms. D’Elia, who were not NEOs prior to fiscal 2021 and fiscal 2017, respectively. |
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
A participant’s compensation deferrals and any earnings on those deferrals are immediately vested. Company matching contributions and any discretionary contributions vest at the rate of 20% per year so long as the participant remains employed by the Company. A participant who attains the age of 65 or whose employment terminates due to death or disability automatically vests in all amounts in such participant’s account. A participant may also vest in all amounts credited to his or her account upon their “separation from service” as defined under Code Section 409A and the Treasury Regulations promulgated thereunder after attaining the age of fifty-five (55), provided the participant has been employed by the Company or one of the Company’s affiliates for at least 10 years and further subject to the approval of the Compensation and Human Capital Committee of the Company’s Board of Directors, including any limitations or conditions such committee may, in its discretion, impose which are not inconsistent with the terms of the DCP (including, without limitation, a covenant not to compete with the Company or any Company affiliate). A participant whose employment terminates for any other reason forfeits unvested amounts. If there is a “change in control” (as defined in the DCP) of the Company, all amounts attributable to matching contributions and discretionary Company contributions become fully vested on the date of such change in control. Participants may direct the investment of amounts in their accounts (other than rights to receive Common Stock) among third-party investment funds that largely track the funds offered under the 401(k) Plan. Participants in the DCP elect as part of their initial deferral election whether to receive distributions after termination of their employment in a lump sum or in 10 equal annual installments. Payments are made in Common Stock to the extent a participant’s vested account balance is denominated in Common Stock, except for any fractional shares which are paid in cash. All other payments are made in cash. Payments generally are made or begin only upon the expiration of six months following the participant’s separation of service from the Company except to the extent that the payments are payable during the short-term deferral period set forth in Treasury Regulation Section 1.409A-1(b)(4). In the event that an exception to the six-month delay provision applies, payments are made or begin within 90 days after a participant’s employment terminates.
POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL None of the NEOs have employment agreements. The Company has entered into a severance and change in control agreement with Ms. D’Elia, which is described below. In addition, the DCP and awards granted under the Stock Plan prior to fiscal year 2024 provide for accelerated vesting of Company matching contributions and of equity compensation (stock options and stock awards), respectively, in the event of a change in control. The Stock Plan also provides for accelerated vesting of equity awards in the event of a participant’s death, disability or retirement.
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship of the annual total compensation of CEO Efraim Grinberg to that of our median employee. To identify the median employee, we used the total calendar 2022 compensation as reflected in our tax records for all employees, excluding our CEO, who were employed by us on January 31, 2023. We included full-time, part-time, seasonal and temporary employees. We converted compensation paid in foreign currencies using the applicable prevailing exchange rate in effect on December 31, 2022. After identifying the median employee, we calculated annual total compensation for the median employee using the same methodology we used for determining total compensation for our NEOs as shown in the Summary Compensation Table for Fiscal 2023 above. For fiscal 2023, the annual total compensation of Efraim Grinberg was $5,062,875 and the annual total compensation of our median employee was $48,797, resulting in a ratio of 104 to 1. Excluding United States-based part-time employees, the ratio would be 89 to 1. The SEC rules for identifying the median employee and calculating the pay ratio permit companies to use various methodologies and assumptions, to apply certain exclusions and to make reasonable estimates that reflect their employee population and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio that we have reported.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table sets forth the pay versus performance disclosure required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K. The Compensation and Human Capital Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the “Compensation Discussion and Analysis,” above.
PAY VERSUS PERFORMANCE
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | Year | Summary Comp. Table Total for CEO(1) | Comp. Actually Paid to CEO(2) | Average Summary Comp. Table Total for Non- CEO NEOs(3) | Average Comp. Actually Paid to Non-CEO NEOs(4) | Value of Initial Fixed $100 Investment Based On: | | Net Income(7) | Adjusted Operating Income(8) | | | | | | | TSR(5) | Peer Group TSR(6) | | | | FY23 | $5,062,875 | $4,260,124 | $1,161,122 | $947,625 | 220.54 | 124.26 | $94,528,000 | $123,204,000 | | FY22 | $7,212,004 | $11,626,776 | $1,262,676 | $2,411,382 | 221.92 | 128.61 | $91,599,000 | $119,711,000 | | FY21 | $3,563,463 | $3,776,556 | $1,003,171 | $1,234,019 | 120.56 | 130.17 | $(111,518,000) | $30,724,000 |
PAY VERSUS PERFORMANCE
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for the CEO for each corresponding year in the “Total Compensation” column of the Summary Compensation Table. Mr. Grinberg was our only CEO for each such year. |
PAY VERSUS PERFORMANCE
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to the CEO, as computed in accordance with Item 402(v) of Regulation S-K (the “CAP”). CAP does not reflect the actual amount of compensation earned by or paid to the CEO during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the CEO’s total compensation for each year to determine his CAP. (RSU and stock option values were computed in accordance with FASB ASC Topic 718 as of the dates indicated, with the options using similar assumptions as set forth in the “Stock-Based Compensation” note to the Company’s consolidated financial statements included in Form 10-K for the applicable fiscal year.) |
PAY VERSUS PERFORMANCE
| Year | Summary Comp. Table Total for CEO | Minus RSU Grant Date Fair Values | Minus Option Grant Date Fair Values | Plus FYE Fair Value of RSUs Granted During FY23 that Remained Unvested as of FYE | Plus FYE Fair Value of Options Granted During FY23 that Remained Unvested as of FYE | Plus Change in Fair Value of Unvested RSUs from End of FY22 to End of FY23 | Plus Change in Fair Value of Unvested Options from End of FY22 to End of FY23 | Plus Change in Fair Value from End of FY22 to Vesting Date of RSUs that Vested in FY23 | Plus Change in Fair Value from End of FY22 to Vesting Date of Options that Vested in FY23 | Compensation Actually Paid to CEO | | FY23 | $5,062,875 | $937,496 | $937,503 | $871,447 | $706,450 | $(58,046) | $(526,258) | $78,653 | $ — | $4,260,124 | | FY22 | $7,212,004 | $937,561 | $939,319 | $1,258,341 | $1,382,809 | $520,443 | $2,478,000 | $652,059 | $ — | $11,626,776 | | FY21 | $3,563,463 | $ — | $1,086,000 | $ — | $1,320,000 | $326,453 | $ — | $(209,839) | $(137,520) | $3,776,556 |
PAY VERSUS PERFORMANCE
| (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the non-CEO NEOs as a group for each corresponding year in the “Total” column of the Summary Compensation Table. Ms. DeMarsilis, Mr. Soltani, Mr. Sussis and Ms. D’Elia were our only non-CEO NEOs for each such year. |
PAY VERSUS PERFORMANCE
| (4) The dollar amounts reported in column (e) represent the average of the CAP amounts for the non-CEO NEOs, as computed in accordance with Item 402(v) of Regulation S-K. The CAP amounts do not reflect the actual average amount of compensation earned by or paid to the Non-CEO NEOs 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 Non-CEO NEOs for each year to determine their CAP. (RSU and stock option values are computed in accordance with FASB ASC Topic 718 as of the dates indicated, with the options using similar assumptions as set forth in the “Stock-Based Compensation” note to the Company’s consolidated financial statements included in Form 10-K for the applicable fiscal year.) |
PAY VERSUS PERFORMANCE
| Year | Summary Comp. Table Non- CEO NEOs Average Total | Minus RSU Grant Date Fair Values | Minus Option Grant Date Fair Values | Plus FYE Fair Value of RSUs Granted During FY23 that Remained Unvested as of FYE | Plus FYE Fair Value of Options Granted During FY23 that Remained Unvested as of FYE | Plus Change in Fair Value of Unvested RSUs from End of FY22 to End of FY23 | Plus Change in Fair Value of Unvested Options from End of FY22 to End of FY23 | Plus Change in Fair Value from End of FY22 to Vesting Date of RSUs that Vested in FY23 | Plus Change in Fair Value from End of FY22 to Vesting Date of Options that Vested in FY23 | Average Compensation Actually Paid to Non-CEO NEOs | | FY23 | $1,161,122 | $156,944 | $156,934 | $145,887 | $118,257 | $(15,751) | $(157,243) | $9,232 | $ — | $947,625 | | FY22 | $1,262,676 | $123,220 | $123,451 | $165,379 | $181,737 | $139,034 | $852,155 | $57,072 | $ — | $2,411,382 | | FY21 | $1,003,171 | $80,133 | $272,235 | $98,135 | $489,200 | $35,862 | $ — | $(23,938) | $(16,044) | $1,234,019 |
PAY VERSUS PERFORMANCE
| (5) TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
PAY VERSUS PERFORMANCE
| (6) Represents the TSR, calculated in the same manner as set forth in note (5) immediately above, for the Russell 2000 Index, which is the peer group we utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. |
PAY VERSUS PERFORMANCE
| (7) The dollar amounts represent the amount of net income reported in the Company’s audited financial statements for the applicable year after eliminating net income attributable to noncontrolling interests. |
PAY VERSUS PERFORMANCE
| (8) The dollar amounts represent Adjusted Operating Income, which the Company defines as operating income reported in the Company’s audited financial statements, adjusted to eliminate the amortization of acquisition accounting adjustments related to the Olivia Burton and MVMT acquisitions and corporate initiatives. The detailed adjustments for each fiscal year can be found in the Company’s Annual Report on Form 10-K for such year. The Company has determined that Adjusted Operating Income is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION No executive officer of the Company receives any additional compensation for serving on the Board of Directors. The annual base compensation paid to the non-employee directors for fiscal 2023 was increased by $10,000 to $210,000 and consisted of an $85,000 cash retainer and an equity component valued at approximately $125,000 in the form of a stock award, cliff-vesting in one year. In addition to the annual base compensation, the annual retainers paid to the committee chairs remained unchanged from fiscal 2022 levels and were as follows: Audit: $17,500; and Compensation and Human Capital and Nominating, Governance and Corporate Responsibility: $12,500 each. The lead director received an annual cash retainer of $50,000 and an equity component valued at $25,000, which retainers remained unchanged from fiscal 2022. The cash compensation is paid quarterly and the equity grants are made annually after the reporting of financial results for the prior fiscal year. Each director was also granted an annual allowance for the purchase of Company watches up to an aggregate suggested retail value of $5,000. Recognizing that ownership of the Company’s Common Stock more closely aligns non-employee director interests with the long-term interests of shareholders and is consistent with best governance practices, the Board of Directors maintains stock ownership guidelines for the non-employee directors to the effect that each non-employee director is expected to beneficially own shares of the Company’s Common Stock with a market value of at least $250,000. The following table shows the cash amounts and the value of other compensation paid to each non-employee director in respect of fiscal 2023:
DIRECTOR COMPENSATION
| (a) | (b) | (c) | (d) | (e) | (f) | | Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards ($) | All Other Compensation(2) ($) | Total ($) | | Peter Bridgman | 102,500 | 125,000 | — | — | 227,500 | | Alan H. Howard | 147,500 | 150,000 | — | — | 297,500 | | Richard Isserman | 85,000 | 125,000 | — | — | 210,000 | | Ann Kirschner | 97,500 | 125,000 | — | 435 | 222,935 | | Maya Peterson | 85,000 | 125,000 | — | — | 210,000 | | Stephen Sadove | 85,000 | 125,000 | — | 819 | 210,819 |
DIRECTOR COMPENSATION
| (1) Amounts shown do not reflect compensation actually received by the director. Instead the dollar value of these awards represents the fair value of the stock award on the date of grant calculated in accordance with FASB ASC Topic 718. Assumptions used in calculating these amounts are described in Note 18 to the Company’s audited financial statements for the fiscal year ended January 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on March 23, 2023. Each non-employee director was granted one stock award in fiscal 2023 for 3,286 shares of the Company’s Common Stock (3,943 shares in the case of Mr. Howard, whose grant included compensation for his role as lead director). At January 31, 2023 each non-employee director held no other stock awards except this one, unvested stock award. |
DIRECTOR COMPENSATION
| (2) Each non-employee director was provided an annual allowance for the purchase of Company watches up to an aggregate suggested retail value of $5,000. The amounts listed above reflect the actual allowance utilized by each non-employee director, at Company cost. |