DEF 14A of Tapestry, Inc.
Filed Sep 22, 2023 · FY20230001140361-23-044958
PARTICIPATING IN THE ANNUAL MEETING & VOTING YOUR SHARES
| COMPENSATION RISK ASSESSMENT | 58 | | EXECUTIVE COMPENSATION | 59 | | Summary Compensation Table | 59 | | Grants of Plan-based Awards | 61 | | Outstanding Equity Awards at Fiscal Year-end 2023 | 62 | | 2023 Option Exercises and Stock Vested | 64 | | 2023 Non-Qualified Deferred Compensation | 65 | | Employment Agreements and Compensatory Arrangements | 66 | | Potential Payments Upon Termination or Change in Control | 68 | | CEO Pay Ratio | 71 | | Pay versus Performance | 74 | | SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS | 77 | | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 78 | | Transactions with Related Persons | 78 | | Policies and Procedures for Related Person Transactions | 78 | | OTHER INFORMATION | 79 | | Communicating with the Board | 79 | | Stockholder Proposals for the 2024 Annual Meeting | 79 | | Other Business | 79 | | Tapestry’s Form 10-K and Other Matters | 80 | | Expenses of Solicitation | 80 | | Householding | 80 | | APPENDIX A — RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | 81 | | APPENDIX B: — QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT | 83 |
Skills and Experience (see page 22 for individual skills matrix)
| Name & Principal Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Joanne Crevoiserat Chief Executive Officer | 1,350,000 | — | 6,694,692 | 4,002,498 | 2,381,400 | 60,913 | 14,489,503 | | Scott Roe Chief Financial Officer and Chief Operating Officer | 925,000 | — | 2,175,777 | 1,300,807 | 1,019,813 | 98,542 | 5,519,939 | | Todd Kahn Chief Executive Officer and Brand President, Coach | 950,000 | — | 1,673,684 | 1,000,624 | 1,240,938 | 75,913 | 4,941,159 | | Liz Fraser Chief Executive Officer and Brand President, Kate Spade | 850,000 | — | 870,325 | 520,320 | 449,650 | 68,913 | 2,759,208 | | David Howard General Counsel and Secretary | 575,000 | — | 869,454 | 400,246 | 355,005 | 49,791 | 2,249,496 |
Human Resources Committee
| • | reviews non-employee director compensation and benefits and recommends changes to the Board as necessary; |
Sarbanes-Oxley Certifications
| • | general industry survey data (303 companies across industries with revenues between $2.5 billion and $10 billion), from the 2021-22 Director Compensation Report from the National Association of Corporate Directors. |
2023 Director Compensation
2023 Director Compensation Compensation paid in fiscal year 2023 for each Independent Director is detailed below:
2023 Director Compensation
| Name | Fees Earned or Paid in Cash(2) ($) | Stock Awards(3) ($) | Option Awards(3) ($) | All Other Compensation(4) ($) | Total ($) | | John P. Bilbrey | 95,000 | 85,001 | 85,002 | — | 265,003 | | Darrell Cavens | 95,000 | 85,001 | 85,002 | 10,000 | 275,003 | | David Denton | 125,000 | 85,001 | 85,002 | — | 295,003 | | Hanneke Faber | 95,000 | 85,001 | 85,002 | — | 265,003 | | Anne Gates | 305,272 | 85,001 | 85,002 | 8,000 | 483,275 | | Thomas Greco | 139,750 | 85,001 | 85,002 | — | 309,753 | | Alan Lau(1) | — | 85,016 | 84,996 | — | 170,012 | | Pamela Lifford | 95,000 | 85,001 | 85,002 | — | 265,003 | | Annabelle Yu Long | 265,000 | — | — | — | 265,000 | | Ivan Menezes | 95,000 | 85,001 | 85,002 | — | 265,003 |
2023 Director Compensation
(1) Mr. Lau joined the Board in April 2022 and therefore received a grant upon appointment. Mr. Lau received no cash compensation in fiscal year 2023, his cash compensation related to services rendered in April, May and June was paid in July 2023. (2) In addition to the basic annual retainer, Ms. Long received a cash payment in lieu of stock options and RSUs considering regulatory requirements related to equity compensation in China. (3) Reflects the aggregate grant date fair value of all RSU awards and stock options, calculated according to FASB ASC Topic 718. The assumptions used in calculating the grant-date fair value of these awards are described in footnote 4 to the Summary Compensation Table. As of July 1, 2023, the last day of fiscal year 2023, each Independent Director held 2,485 unvested RSUs, except Mr. Lau who held 2,073 unvested RSUs due to his joining grant upon appointment and Ms. Long, who does not hold RSUs. The outstanding stock options held by each Independent Director were: Mr. Bilbrey 32,603; Mr. Cavens 47,980; Mr. Denton, 93,311; Ms. Faber 18,044; Ms. Gates, 49,322; Mr. Greco, 18,462; Mr. Lau, 6,011; Ms. Lifford, 18,462 and Mr. Menezes 67,780. (4) Amounts shown in “All Other Compensation” are matching charitable contributions under the Company’s Matching Gift program.
2023 Director Compensation
| 20 | 2023 PROXY STATEMENT | |
2023 Director Compensation
| | PROPOSAL 1: ELECTION OF DIRECTORS |
2023 Director Compensation
All of Tapestry’s Directors are elected each year at the Annual Meeting by the stockholders. We do not have staggered elections of our Board members. Nine Directors will be elected at this year’s Annual Meeting. Each Director’s term lasts until the 2024 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualifies. All of the nominees are currently members of Tapestry’s Board. Directors will be elected by a majority of the total votes cast “FOR” and “AGAINST” each nominee. The Board recommends that you vote FOR each of the Director nominees below. One of the current members of the Board, David Denton, is not standing for re-election at this year’s Annual Meeting. The Board intends to reduce the size of the Tapestry Board of Directors to nine effective immediately upon Mr. Denton’s departure and the proxy holders may only vote for the number of nominees named in this proxy statement. If a nominee is unable to serve or for good cause will not serve as a Director, the proxy holders may vote for another nominee proposed by the Board, or the Board may reduce the number of Directors to be elected at the Annual Meeting. The following information is furnished with respect to each nominee for election as a Director. The ages of the nominees are as of September 22, 2023.
2023 Director Compensation
| THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE BELOW NOMINEES FOR DIRECTOR. |
2023 Director Compensation
Director Nominees
2023 Director Compensation
| Name | Age | Position with Tapestry | | Anne Gates | 63 | Independent Chair of the Board of Directors | | John P. Bilbrey | 67 | Director | | Darrell Cavens | 50 | Director | | Joanne Crevoiserat | 59 | Director | | Johanna (Hanneke) Faber | 54 | Director | | Thomas Greco | 65 | Director | | Alan Lau | 48 | Director | | Pamela Lifford | 60 | Director | | Annabelle Yu Long | 50 | Director |
2023 Director Compensation
| | 2023 PROXY STATEMENT | 21 |
Executive Compensation Practices
| WHAT WE DO | | WHAT WE DON’T DO | | | | Pay for Performance, with 10% of AIP tied to EI&D goals for Leadership. | | No Excise Tax Gross-Ups Upon Change in Control. | | | Stock Ownership Policy for NEOs. | | No Excessive Executive Perquisites. | | | Double Trigger Equity Acceleration Upon a Change-in-Control. | | No Tax Gross-Ups on Perquisites or Benefits, other than standard relocation costs. | | | Independent Compensation Consultant Retained by HR Committee. | | No Payment of Dividends on Unvested Long-term Incentives. | | | Regular Review of Share Utilization. | | No Repricing of Underwater Stock Options Without Stockholder Approval. | | | Maintain a Clawback Policy. | | No Inclusion of Long-term Incentive Awards in Severance or Retirement Benefit Calculations. | | | Minimum Required Notice Period for voluntary resignations of NEOs. | | No Permitted Hedging, Short Sales or Derivative Transactions in Company stock. | | | Balance of short and long-term performance metrics. | | No guaranteed or automatic annual salary increases for NEOs. | | | Annual Say on Pay vote. | | No Fixed Term or Evergreen NEO Employment Agreements. | | | Regular stockholder outreach. | | |
Compensation Program Objectives
| • | support the attainment of the Company’s short- and long-term strategic and financial objectives; |
Compensation Program Objectives
| • | be competitive with our peer companies. |
Elements of Compensation
Elements of Compensation Compensation for our NEOs includes both fixed and performance-based components, with an emphasis on performance-based elements to support the objectives listed above. We consider a component to be performance-based if the amount eventually earned or paid varies based on one or more elements of the Company’s financial performance (e.g., sales, operating income, gross margin, etc.), operational measures (e.g. EI&D goals) or stock price appreciation. Performance-based components are designed so that above-plan performance is rewarded with above-target payouts and vice versa. The fixed components of compensation are designed to be competitive and are typically a minority portion of the total mix of each executive’s compensation package. We do not attempt to align each element of compensation to specific peer company percentiles or ratios; rather peer company data is one of several factors considered by the HR Committee when determining executive compensation. See the Compensation Decision Making Process section for details. The following table briefly describes each element of compensation. A detailed explanation of each component for fiscal year 2023 is provided in the next section, Fiscal Year 2023 Compensation.
Elements of Compensation
| Compensation Component | Reason to Provide | Performance Based | Not- Performance Based | Value Linked to Stock Price | Value Linked to Operating Results | | Annual Incentive | Rewards for achieving the annual financial performance goals established by the HR Committee early in each fiscal year. A portion of AIP compensation for the Company’s Leadership team is tied to achievement of EI&D goals. | | | | | | Long-term Incentive: PRSUs | Granted to drive focus on Tapestry’s long-term performance, align executive rewards with stockholders and link explicitly to achievement of long-term value creation. To further maximize TSR growth, starting in fiscal year 2023, a portion of the PRSU is tied to Relative TSR. | | | | | | Long-term Incentive: RSUs | Granted to encourage retention. Although the number of shares earned is fixed, provided the executive is still employed, their value rises and falls with the price of our common stock, adding a performance element. | | | | | | Long-term Incentive: Stock Options | Granted to drive focus on Tapestry’s long-term performance and align executive rewards with stockholders. Stock options have value only when our stock price increases from the price on the date of grant so they are a critical motivational tool to support Tapestry’s success and growth; we utilize stock options because of this strong pay for performance relationship. | | | | | | Base salary | Competitive base salaries are necessary to attract and retain qualified, high-performing executives. Prior experience, scope of responsibility and performance are key elements considered in setting base salaries. | | | | | | Benefits & Limited Perquisites | Competitive benefits and modest perquisites are necessary to attract and retain qualified, high-performing executives. | | | | |
Fiscal Year 2023 Compensation Summary----Target Pay Mix
| Compensation Program Changes | Rationale | | Fiscal Year 2023 | | | Did not provide salary increases to our NEOs. | To direct merit salary increase budget to more junior level employees in the organization; also considered benchmarking data. | | Increased target annual bonus as a percent of salary for Ms. Crevoiserat. | To align more closely with median for CEOs in our executive compensation peer group. | | Increased annual equity values for Mses. Crevoiserat and Fraser, and Messrs. Roe, Kahn and Howard. | Considered compensation for similar positions in our executive compensation peer group, performance in role, and changes to scope of role for Mr. Roe. | | For the AIP, modified financial measures by replacing Inventory Turnover with Gross Margin and increasing weighting on Sales. | To further incentivize and reward management for delivering results that prioritize sustainable brand health and maximize stockholder value creation. | | For AIP, tightened performance curves. | To recognize economic recovery trends in our industry despite continued uncertainty related to the softening consumer demand, general economic conditions, and supply chain challenges. | | For PRSU awards, modified financial measures by replacing Return on Net Assets (“RONA”) with Return on Invested Capital (“ROIC”), removing Net Income, and adding Sales and Relative TSR. In addition, increased the performance period from two years to three years. | Similar to AIP, to further incentivize and reward management for delivering results that prioritize sustainable brand health and maximize stockholder value creation over a longer time horizon; also considered peer practices data. |
Annual Incentive Plan
Annual Incentive Plan The Tapestry AIP rewards eligible employees, including the NEOs, for achievement of financial performance targets and EI&D measures, established by the HR Committee. In setting the financial performance measures, targets and incentive payout schedule for the AIP, the HR Committee considered prior fiscal year performance, desired financial and operational performance levels in line with our annual operating plan, long-term strategic plan and general economic conditions. We tightened the performance curves to recognize economic recovery trends in our industry while still accounting for continued uncertainty related to the general macroeconomic environment, softening consumer demand in certain global markets, and supply chain interruptions. The HR Committee certified the results after the end of the fiscal year. While payouts varied by segment, they were generally between threshold and target, or slightly above target. The fiscal year 2023 target award levels for each NEO were determined by the HR Committee based on the role and responsibility of each position and on peer company target award levels for similar positions. The HR Committee modified the fiscal year 2023 financial measures to incentivize and reward management for delivering results that prioritize sustainable brand health and maximize TSR growth. The table below outlines the rationale behind the new measures and weights.
Annual Incentive Plan
| Fiscal Year 2022 Measure (Weight) | Fiscal Year 2023 Measure (Weight) | Reason for Change | Performance / Payout Curve | | Inventory Turnover (25%) | Gross Margin (20%) | Presence of Inventory Turnover created heightened focus on inventory management and built a sustainable foundation; Replaced with Gross Margin, identified as a top driver of P/E multiple expansion and TSR growth | For maximum performance, 200% of the target award can be earned, and for threshold performance, 30% of the target award can be earned. | | Net Sales (25%) | Net Sales (40%) | Retained and increased weight of Sales because it was identified as a top driver of P/E multiple expansion, leading to long-term TSR growth | | | Operating Income (50%) | Operating Income (40%) | Operating Income remains a core profitability measure driving increases in operating cash flow and a measure of brand health; modestly decreased weight because Gross Margin and Sales already provide material profit exposure | |
Annual Incentive Plan
| 44 | 2023 PROXY STATEMENT | |
Annual Incentive Plan
The target values for fiscal year 2023 aligned with the company’s operating plans, and required growth in Net Sales, Operating Income and Gross Margin on a non-GAAP, constant currency basis versus fiscal year 2022 for Tapestry overall. These values were aligned with the Company’s strategic objective to drive long-term profitability, making necessary investments to support the health of its brands, while also drawing focus to the agility and discipline required to increase gross margin. Initial AIP funding was determined based on performance versus pre-defined financial goals. The HR Committee also set individual brand-level targets based on operating plans for each brand. For NEOs leading a brand, corporate financial goals were weighted 40% and brand goals were weighted 60%. The fiscal year 2023 target values at constant currency were all set above 2022 actual results. In setting the fiscal year 2023 threshold and maximum performance and payout values, the HR Committee considered several factors including the degree of difficulty in achieving each metric while balancing the uncertainty driven by global macro-economic conditions. The HR Committee deemed these targets would be sufficiently challenging to merit payout of the target AIP awards. The maximum performance levels were set such that maximum payout would be achieved for truly outstanding results versus fiscal year 2022. The EI&D AIP component applies to all Leadership, including NEOs and functions as a potential negative modifier on financial performance, based on the HR Committee’s assessment of performance versus predefined, quantitative and qualitative goals. Total potential payout for our AIP remained 0% to 200% of target incentive. Ten percent of the initial performance payout, based on results versus the pre-defined financial goals, was then adjusted through the EI&D modifier within a multiplier range of 90% to 100%. In this structure, we multiply the initial performance payout by 100% if we achieve our EI&D goals in full, resulting in no change to the initial performance payout. If we fail to achieve our EID goals, we multiply our initial performance payout by 90%, resulting in a 10% reduction in the initial performance payout. Partial achievement of our goals would result in a modifier between 90% and 100%. The EI&D modifier was designed as a scorecard with shared goals focused on fostering behaviors in our sourcing, recruitment and talent mobility practices and policies, and rewarding progress against our goals to further shape and support a culture that is equitable, inclusive and diverse, which we believe is aligned with and supports long-term business objectives. Actual AIP payments are made in cash, based on the degree to which the objectives have been achieved, as certified and approved by the HR Committee. No executive may receive an annual incentive payment exceeding $6.0 million under the AIP for any fiscal year. The fiscal year 2023 AIP components for each NEO are displayed below.
Annual Incentive Plan
| | | | Component and its Weight as a Percent of Each NEOs Target Annual Incentive | | | | | | | [90% of AIP] | | [10% of AIP] | | Named Executive Officer | Business Segment | Target Annual Incentive as a % of Salary | Tapestry, Inc. Component | Brand Component | Equity, Inclusion & Diversity Modifier(1) | | Joanne Crevoiserat | Tapestry, Inc. | 200% | 100% | | | | Scott Roe | Tapestry, Inc. | 125% | 100% | | | | Todd Kahn | Coach | 125% | 40% | 60% | | | Liz Fraser | Kate Spade | 100% | 40% | 60% | | | David Howard | Tapestry, Inc. | 70% | 100% | | |
Annual Incentive Plan
(1) The EI&D Modifier is a potential negative modifier on initial AIP funding based on financial results versus pre-defined goals. A full financial payout can only be achieved if the HR Committee certifies that all EI&D goals are achieved.
Annual Incentive Plan
| | 2023 PROXY STATEMENT | 45 |
Annual Incentive Plan
The financial performance measures, target values established by the HR Committee, and the certified financial results for the fiscal year 2023 AIP appear below. Tapestry, Inc.
Applied to all Named Executive Officers
| ($ in millions) | Weight | Fiscal Year 2022 Results(1) | Fiscal Year 2023 Award Targets(2)(3) | | | Fiscal Year 2023 Results(3) | Payout as a % of Target Incentive(2) | | | | | Threshold | Target | Maximum | | | | Net sales | 40% | $6,684.5 | $6,330.2 | $7,112.6 | $7,397.1 | $6,878.4 | 79.0% | | vs. prior year | | | | 6% | | 3% | | | Operating income (excluding AIP $) | 40% | $1,367.6 | $1,161.6 | $1,399.5 | $1,584.2 | $1,322.9 | 77.0% | | vs. prior year | | | | 2% | | (3)% | | | Gross Margin | 20% | 69.6% | 68.9% | 70.3% | 71.7% | 70.8% | 137.0% | | vs. prior year | | | | 1% | | 2% | | | Weighted average payout as a % of Target: | | | | | | | 90.0% |
Applied to Mr. Kahn
| ($ in millions) | Weight | Fiscal Year 2022 Results(1) | Fiscal Year 2023 Award Targets(2)(3) | | | Fiscal Year 2023 Results(3) | Payout as a % of Target Incentive(2) | | | | | Threshold | Target | Maximum | | | | Net sales | 40% | $4,921.4 | $4,626.8 | $5,198.7 | $5,406.6 | $5,141.3 | 93.0% | | vs. prior year | | | | 6% | | 4% | | | Operating income (excluding AIP $) | 40% | $1,529.6 | $1,403.3 | $1,613.0 | $1,774.3 | $1,637.0 | 115.0% | | vs. prior year | | | | 5% | | 7% | | | Gross Margin | 20% | 72.2% | 71.2% | 72.7% | 74.2% | 73.8% | 173.0% | | vs. prior year | | | | 1% | | 2% | | | Weighted average payout as a % of Target: | | | | | Coach: | | 117.7% | | | | | | | Combined with Tapestry: | | 106.6% |
Applied to Ms. Fraser
| ($ in millions) | Weight | Fiscal Year 2022 Results(1) | Fiscal Year 2023 Award Targets(2)(3) | | | Fiscal Year 2023 Results(3) | Payout as a % of Target Incentive(2) | | | | | Threshold | Target | Maximum | | | | Net sales | 40% | $1,445.5 | $1,377.7 | $1,548.0 | $1,609.9 | $1,448.6 | 59.0% | | vs. prior year | | | | 7% | | —% | | | Operating income (excluding AIP $) | 40% | $187.4 | $155.3 | $196.1 | $235.4 | $125.7 | —% | | vs. prior year | | | | 5% | | (33)% | | | Gross Margin | 20% | 63.1% | 63.6% | 64.9% | 66.2% | 63.7% | 32.0% | | vs. prior year | | | | 3% | | 1% | | | Weighted average payout as a % of Target: | | | | | Kate Spade | | 30.0% | | | | | | | Combined with Tapestry: | | 54.0% |
Applied to Ms. Fraser
(1) Fiscal year 2022 results reflect Non-GAAP financial figures in nominal currency. See Appendix A for a reconciliation to results as reported under GAAP. (2) For all metrics, actual payout is 0% if performance is below threshold, 30% of target for performance at threshold, 100% of target for target performance and 200% of target for maximum performance, with interpolation for performance levels between the amounts above. (3) Fiscal year 2023 targets and actual results reflect the impact of currency adjustments. See Appendix A for a reconciliation to results as reported under GAAP.
Applied to Ms. Fraser
Final payout for this AIP component was determined by the HR Committee through its evaluation of the scorecard and predefined criteria and related results; no component of the scorecard had a pre-assigned weighting. Strong progress was made through diversifying our employee sourcing and recruitment process, transparent job posting policies, and listening to our employees by collecting their feedback throughout the year on their perception of inclusion. Considering that a significant portion of objectives were achieved, but not all, and that meaningful results were observed, the HR Committee determined to apply a modest negative modifier for the EI&D component of the AIP, resulting in a reduction of 2% out of a possible 10%. The initial performance payouts were therefore multiplied by 98% (instead of 100%) to reflect partial achievement of our EI&D scorecard. Looking forward to fiscal year 2024, Leadership will continue to have 10% of their target AIP tied to EI&D scorecard measures, with expanded components to drive continued and sustainable progress. We will also explore opportunities to further evolve our metrics to align with the maturity of our EI&D and overall ESG program maturity across the Company. Calculation of Fiscal Year 2023 Annual Incentive Awards: The following table shows the fiscal year 2023 target awards as a percent of the salary as of the end of the fiscal year for each NEO, applies the results described above to each target award, and shows the actual award earned. The resulting payouts are also displayed in the Summary Compensation Table in the column “Non-Equity Incentive Plan Compensation.”
Applied to Ms. Fraser
| | | Financial Performance(1) | | | EI&D Performance | Total Performance and Payout(1) | | | | | | | [Tapestry Weight * b] + [Brand Weight * c] | | [d * e] | [a * f] | | Named Executive Officer | Target Annual Incentive(2) (a) | Tapestry(2) (0% - 200%) (b) | Brand(2) (0% - 200%) (c) | Total Tapestry & Brand (0% - 200%) (d) | EI&D Scorecard (90% - 100%) (e) | Total Financial and EI&D performance (f) | Annual Incentive Award(3) (g) | | Joanne Crevoiserat | $2,700,000 | 90.0% | | 90.0% | 98% | 88.2% | $2,381,400 | | Scott Roe | $1,156,250 | 90.0% | | 90.0% | 98% | 88.2% | $1,019,813 | | Todd Kahn | $1,187,500 | 90.0% | 117.7% | 106.6% | 98% | 104.5% | $1,240,938 | | Liz Fraser | $850,000 | 90.0% | 30.0% | 54.0% | 98% | 52.9% | $449,650 | | David Howard | $402,500 | 90.0% | | 90.0% | 98% | 88.2% | $355,005 |
Long-Term Incentive Plan
Long-Term Incentive Plan Long-term incentives (“LTI”) represent a significant proportion of compensation for our Chief Executive Officer and other NEOs. They are designed to align employee interests with those of our stockholders, reward employees for enhancing stockholder value and support retention of key employees. NEO’s awards are typically a set mix of stock options, PRSUs and RSUs. In addition, approximately 2,400 of our employees, including nearly all of our store managers, received an annual long term equity award in fiscal year 2023. We offer an “Equity Choice” program, under which eligible employees may elect to receive their annual LTI in the form of stock options, RSUs or a combination of the two. Under this program, the ratio of stock options to RSUs is set so that the grant date fair market value of stock options and RSUs is approximately equal. Equity Choice is not available to our Chief Executive Officer or our other NEOs. The number of PRSUs, stock options and/or RSUs granted to a NEO each year is based on a target grant value. The values granted are converted to shares based on the closing price of Tapestry common stock on the date of grant, and, in the case of stock options, on the estimated Black-Scholes value of the stock option. The exercise price for stock options is the closing price of Tapestry common stock on the grant date. Adjustments to the target grant value for each NEO may be made based on changes in the executive’s responsibilities and performance, changes in the competitive marketplace, or other factors determined by the HR Committee. From time to time, we also grant special PRSU and/or RSU awards as part of new hire agreements or other special circumstances. In fiscal year 2023 our burn rate (calculated as full value shares and stock options granted during the fiscal year divided by weighted average common shares outstanding excluding share repurchases) was 1.6%. All awards are made under the terms and conditions of the 2018 Stock Incentive Plan. The majority of the awards are granted during or around the Board and HR Committee’s regularly scheduled August meetings, at approximately the same time that salary increases and AIP award payments are approved. Off-cycle grants for new hires and other special events may be made on the first business day of the month following such event. Fiscal Year 2023 Long-Term Incentive Awards: In August 2022, the HR Committee granted the LTI awards shown in the table below to the NEOs with consideration given to median total compensation for NEOs in our industry, the competitive landscape for NEO talent, each executive’s performance and the Company’s guidelines for executive compensation. The HR Committee modified the fiscal year 2023 PRSU measures, similar to AIP changes, to further incentivize and reward management for delivering results that prioritize sustainable brand health and maximize TSR growth over a longer time horizon. These metrics provide focus on effective achievement of our long-term strategy to build a global house of brands. We also increased the performance period from two years to three years aligning with Tapestry’s long range planning horizon:
Long-Term Incentive Plan
| Fiscal Year 2022 Measure (Weight) | Fiscal Year 2023 Measure (Weight) | Reason for Change | Performance / Payout Curve | | Net Income (75%) | Sales (33%) | While Sales is also part of AIP, the HR Committee felt this was an essential measure to incentivize not only short-term, but long-term stable top line expansion in-line with our externally stated ambitions | For maximum performance, 200% of the target number of shares can be earned, and for threshold performance, 30% of the target number of shares can be earned. | | RONA (25%) | ROIC (33%) | Designed to measure how efficiently the Company manages its deployed capital. ROIC aligns more closely with how investment community views Tapestry | | | n/a | Relative TSR (33%) | To add a relative performance metric and further support alignment of executive compensation and stockholder return outcomes | See below |
Long-Term Incentive Plan
| | 2023 PROXY STATEMENT | 49 |
Long-Term Incentive Plan
For 33% of the PRSU award, potential payout will be based on Company TSR over a three year performance period relative to a predefined PRSU Peer Group. Objective criteria was used to select the PRSU Peer Group, which represents companies from the S&P 1500 Composite and Euronext Indexes in Apparel, Accessories and Luxury Goods which we believe is most relevant to Tapestry as far as their global reach, the products and services offered, the talent landscape we compete with, and are viewed as alternative investment choices by capital markets. Given the size of Tapestry, companies with a market cap over $100 billion were removed. The below charts outline the PRSU peer group companies and describe the PRSU payout levels tied to relative performance.
Long-Term Incentive Plan
| Performance Peer Group for FY23-FY25 Relative TSR Measurement | | | | Criteria: S&P 1500 Composite and Euronext Indexes in Apparel, Accessories and Luxury Goods with less than $100 billion in Market cap | adidas AG | Kontoor | | | Burberry | Moncler | | | Capri | Movado | | | Carter’s, Inc. | Oxford | | | Columbia | Pandora A/S | | | Richemont | PVH Corp. | | | Luxottica | Ralph Lauren | | | Fossil Group, Inc. | Swatch | | | G-III Apparel Group, Ltd. | Under Armour | | | Hanesbrands Inc. | VF | | | Hugo Boss AG | Vera Bradley | | | Kering SA | |
Long-Term Incentive Plan
| FY23 - FY25 Relative TSR Performance / Payout Curve | | | | | | PRSU Payout: | No Payout | 30% | 100% | 200% | | rTSR: | Bottom Quartile | Threshold | Median | Top Quartile | | | 0 - 24% | 25% | 50% | 75 - 100% |
Long-Term Incentive Plan
The HR Committee set the financial performance targets for each measure aligned to the Company’s long-term strategic plan, and the maximum and threshold performance goals and payout levels to establish a clear, demanding performance standard, and to provide appropriate reward for that performance. For maximum performance, 200% of the target number of stock units can be earned, and for threshold performance, 30% of the target number of stock units can be earned. The following table presents the HR Committee’s decisions for the NEO target value for equity grants and corresponding shares granted in fiscal year 2023:
Long-Term Incentive Plan
| | FY23 Long-Term Incentive Awards | | | | | | | | | Stock Options | | Target PRSUs | | RSUs | | Total | | Named Executive Officer | Shares | Grant Value ($) | Shares | Grant Value ($) | Shares | Grant Value ($) | Grant Value ($) | | Joanne Crevoiserat | 333,472 | 4,000,000 | 112,962 | 4,000,000 | 56,481 | 2,000,000 | 10,000,000 | | Scott Roe | 108,378 | 1,300,000 | 36,713 | 1,300,000 | 18,356 | 650,000 | 3,250,000 | | Todd Kahn | 83,368 | 1,000,000 | 28,241 | 1,000,000 | 14,120 | 500,000 | 2,500,000 | | Liz Fraser | 43,351 | 520,000 | 14,685 | 520,000 | 7,343 | 260,000 | 1,300,000 | | David Howard | 33,347 | 400,000 | 11,296 | 400,000 | 11,296 | 400,000 | 1,200,000 |
Long-Term Incentive Plan
While the table above summarizes how the HR Committee viewed its annual target equity decisions for the NEOs, it is not a substitute for the Summary Compensation Table which represents the accounting value of each award at grant, calculated in accordance with FASB ASC Topic 718, which includes the incremental expense (versus what is shown above) associated with incorporation of a relative TSR metric. Completed Performance Period: At the close of fiscal year 2023 the HR Committee certified the results for the performance-based LTI awards:
Long-Term Incentive Plan
| • | FY22-23 Annual PRSU: This award had Tapestry performance metrics and multi-year goals of cumulative net income and RONA for the FY22-23 performance period. Financial results for the two-year period were above target and 113.4% of the target shares were earned. This award is subject to an additional one year vesting requirement and the shares will be distributed in August 2024, subject to continued employment. The remainder of this section provides details on the structure of the FY22-23 Annual PRSU. |
Long-Term Incentive Plan
| 50 | 2023 PROXY STATEMENT | |
FY22-23 Annual PRSU
(1) Actual payout is 0% if performance is below threshold, 30% of target for performance at threshold, 100% of target for target performance, and 200% of target for maximum performance, with linear interpolation for performance levels between the amounts above. (2) Fiscal year 2023 targets and results reflect Non-GAAP financial figures.
Developments for Fiscal Year 2024
| Fiscal Year 2024 Compensation Program Changes | Rationale | | Awarded salary increases to Ms. Crevoiserat, Messrs. Roe, Kahn and Howard as part of the annual review cycle in September 2023. | To remain aligned with competitive total cash compensation for similar positions in our executive compensation peer group. | | Increased annual equity values for Messrs. Roe, Kahn and Howard. | To align more closely with competitive total compensation for similar positions in our executive compensation peer group. | | For the AIP, allocated higher weightings to Gross Margin measure and Sales. | To increase focus on metrics that we believe drive P/E multiple expansion and TSR growth. | | For AIP, continued to tighten our performance curves. | To recognize economic recovery trends in our industry despite continued uncertainty related to the softening consumer demand, general economic conditions. |
Developments for Fiscal Year 2024
The Company‘s retirement plans consist of a qualified 401(k) plan (the “401(k) Savings Plan”) and a voluntary, non-qualified defined contribution plan (the “Executive Deferred Compensation Plan” or “EDCP”). Employees, including our NEOs, are eligible to participate in the 401(k) Savings Plan after completing one month of service; the Company matches 100% of employee contributions, up to 3% of compensation contributed and 50% of the next 2% of compensation contributed. These matching contributions are immediately vested. Highly compensated employees whose annual target cash compensation exceeds the IRS 401(a)(17) compensation limit, are also eligible to participate in the EDCP. Under this plan, eligible employees, including our NEOs, may elect to defer a portion of their salary and/or annual incentive into the plan and invest the assets in substantially similar mutual funds as those offered under the qualified 401(k) Savings Plan. The Company matches 100% of employee contributions up to 3%, less the maximum company match available in the 401(k) Savings Plan. Deferral and distribution elections are made annually in accordance with IRS rules under Section 409A. Certain of our NEOs also maintain balances in the Supplemental Retirement Plan (the “SRP”), a non-qualified defined contribution plan frozen to new contributions as of December 31, 2015. Company contributions to the various retirement plans are included in the “All Other Compensation” column of the Summary Compensation Table and in the related footnote. Contributions, earnings and account balances for the EDCP and SRP are detailed in the Non-Qualified Deferred Compensation Table. None of these benefits or perquisites are included in the base compensation on which annual incentives and retirement plan contributions are calculated.
Roles and Responsibilities
Roles and Responsibilities The HR Committee has overall responsibility for executive compensation at Tapestry, including the approval and oversight of compensation and benefit program administration for Tapestry’s NEOs, as well as other key executives at Tapestry. The HR Committee reviews and approves Tapestry’s annual and LTI compensation programs, including performance goals, as well as significant changes in the design of employee benefits programs. In fiscal year 2023, the HR Committee retained and utilized the services of the independent firm, CAP, to provide advice and recommendations on the amount and form of executive compensation. CAP reported to and took direction from the HR Committee, and management provided information and input to CAP’s consultants at the HR Committee’s direction. CAP did not provide additional services to Tapestry or its affiliates in fiscal year 2023. The HR Committee, after taking into consideration all factors relevant to such independence, including, but not limited to factors specified in NYSE listing standards and Rule 10C-1(b)(4) of the Exchange Act, confirmed that CAP was independent and determined that no conflicts of interest existed between CAP and Tapestry. During fiscal year 2023, CAP attended HR Committee meetings and met with the members of the HR Committee without management present, and advised the HR Committee on various compensation matters such as executive compensation levels and practices among our peer group, amounts and structure of compensation for new hires, and investor policies on executive compensation. CAP also advised the HR Committee on considerations with respect to including EI&D measures as a portion of the Company’s AIP for Leadership starting in fiscal year 2022. CAP reviews and comments on materials prepared by management and also presents the HR Committee with its own analyses and recommendations. The HR Committee considered CAP’s advice in its decision making on the compensation actions described in the sections Executive Summary and Fiscal Year 2023 Compensation. Typically, the CEO and other members of management work with the HR Committee Chair and CAP to set meeting agendas and prepare materials for HR Committee meetings. Certain members of management typically attend HR Committee meetings to present information on the Company and the competitive environment for talent, discuss compensation and benefits policies and provide technical advice. The CEO is responsible for reviewing the performance of certain key executives, including the NEOs (other than herself), and recommending changes in their compensation to the HR Committee for approval. The HR Committee consults with CAP and determines and approves changes in the CEO’s compensation based on its own review of the CEO’s performance and other factors in its discretion. The HR Committee considers information on all elements of compensation over a period of years, as well as the impact of various termination scenarios in evaluating the appropriateness of executive compensation. Actual pay earned by our NEOs in prior years from AIP and LTI compensation is reviewed but is not specifically taken into account by the HR Committee in making the current year’s compensation decisions. Decisions to change a NEO’s (other than the CEO) base salary, AIP opportunity and/or LTI award are based on various factors, including the judgment of our CEO and the HR Committee. They consider the scope of their positions and any changes to those responsibilities, the skills and experience required for the job, their individual performance, business performance, labor market conditions and peer company compensation levels based on public disclosure and purchased industry compensation surveys. Salary increases, AIP opportunity and/or LTI award changes are considered annually and upon significant role changes, and are based on both financial and non-financial results achieved by the Company and the NEO during the preceding fiscal year. All changes are subject to HR Committee approval.
Peer Group and Competitive Assessment of Compensation
Peer Group and Competitive Assessment of Compensation Compensation at a defined group of companies is one reference point considered by the HR Committee and management in setting NEO compensation levels, although we do not attempt to link any single element of compensation to specific peer company percentiles or ratios. Pay practices at this group of companies are also reviewed by the HR Committee. The composition of the peer group is reviewed periodically and is determined by the HR Committee, considering input from its independent compensation consultant. In February 2023, following a regular review of the existing peer group by the HR Committee’s consultant, CAP, the HR Committee approved revisions to the peer group, adding Under Armour, Inc. and removing Abercrombie & Fitch Co. As a secondary reference point, the HR Committee considers publicly available data from the following foreign-listed and private companies with whom Tapestry competes for certain executive talent: Burberry Group plc, Hermes International, J. Crew Group, Inc., Kering S.A., and LVMH, as well as industry compensation surveys. The peer group used during fiscal year 2023 is shown below. It includes 15 companies whose aggregate profile was comparable to Tapestry in terms of size, industry, operating characteristics and/or competition for executive talent.
Peer Group and Competitive Assessment of Compensation
| Company Name | Sub-Industry (as defined by GICS codes) | Revenue(1) | Market Valuation as of 7/1/2023(2) | | Compagnie Financière Richemont SA(3) | Apparel, Accessories and Luxury Goods | $21,679 | $96,953 | | The Estée Lauder Companies Inc. | Personal Care Products | $15,910 | $70,189 | | The Gap, Inc. | Apparel Retail | $15,616 | $3,287 | | V.F. Corporation | Apparel, Accessories and Luxury Goods | $11,612 | $7,421 | | PVH Corp. | Apparel, Accessories and Luxury Goods | $9,024 | $5,329 | | Williams-Sonoma, Inc. | Homefurnishing Retail | $8,674 | $8,037 | | Lululemon Athletica Inc. | Apparel, Accessories and Luxury Goods | $8,111 | $48,094 | | Tapestry, Inc. | Apparel, Accessories and Luxury Goods | $6,661 | $9,921 | | Ralph Lauren Corporation | Apparel, Accessories and Luxury Goods | $6,444 | $8,047 | | Victoria’s Secret & Co. | Apparel Retail | $6,344 | $1,345 | | Levi Strauss & Co. | Apparel, Accessories and Luxury Goods | $6,169 | $5,720 | | Under Armour, Inc. | Apparel, Accessories and Luxury Goods | $5,904 | $3,097 | | Capri Holdings Limited | Apparel, Accessories and Luxury Goods | $5,619 | $4,213 | | Coty Inc. | Personal Care Products | $5,554 | $10,481 | | American Eagle Outfitters, Inc. | Apparel Retail | $4,990 | $2,330 | | Urban Outfitters, Inc. | Apparel Retail | $4,795 | $3,071 | | Tapestry, Inc. Percentile Rank | | 51st | 77th |
Peer Group and Competitive Assessment of Compensation
(1) As reported in the Form 10-K for the most recent fiscal year (in millions). (2) As reported by S&P Capital IQ (in millions). (3) Revenue was converted to U.S. dollars (US$) based on the exchange rate at the end of their fiscal year (3/31/2023). Market valuation was converted to US$ based on the exchange rate as of 7/1/2023.
Peer Group and Competitive Assessment of Compensation
| 54 | 2023 PROXY STATEMENT | |
Peer Group and Competitive Assessment of Compensation
Additional Information
Impact of Accounting and Tax Treatment
Management periodically reviews and shares with the HR Committee our compensation policies and practices and evaluates the degree to which they may motivate any employee, including our NEOs, to take on inappropriate or excessive risk. We believe that our various compensation programs are aligned to our strategy and objectives, and that they encourage prudent risk-taking to drive performance. As a result of its review and evaluation of our fiscal year 2023 compensation programs, the HR Committee, together with its independent compensation consultant, CAP, determined that our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on Tapestry. Factors evaluated by management and the HR Committee include the overall mix of pay between base salary, annual and long-term incentives, the performance metrics used in each program, the range of performance required to earn a payout under each program and incentive plan components such as maximum payouts, vesting, stock ownership requirements and clawbacks. Some of the key factors supporting the HR Committee’s conclusion that our programs do not drive inappropriate or excessive risk include capped payouts on all of our incentive plans, use of multiple, counter-balancing financial performance criteria in our AIP and Long-Term Incentive Plan, executive and Independent Director stock ownership and anti-hedging policies, a market competitive weight on each component of pay, multiple year vesting for LTI, a variety of performance metrics for PRSUs and an incentive compensation clawback policy. When the HR Committee and management are developing new or modified compensation programs and selecting performance measures for annual and long-term incentives, risk taking is considered and affects decisions accordingly.
Impact of Accounting and Tax Treatment
| Name & Principal Position | Fiscal Year | Salary(1) ($) | Bonus(2) ($) | Stock Awards(3) ($) | Option Awards(4) ($) | Non-Equity Incentive Plan Compensation(5) ($) | All Other Compensation(6) ($) | Total ($) | | Joanne Crevoiserat Chief Executive Officer | 2023 | 1,350,000 | — | 6,694,692 | 4,002,498 | 2,381,400 | 60,913 | 14,489,503 | | | 2022 | 1,340,385 | — | 4,799,985 | 3,199,996 | 4,337,550 | 61,510 | 13,739,426 | | | 2021 | 1,225,923 | — | 4,799,995 | 2,200,133 | 4,265,068 | 57,472 | 12,548,591 | | Scott Roe(7) Chief Financial Officer and Chief Operating Officer | 2023 | 925,000 | — | 2,175,777 | 1,300,807 | 1,019,813 | 98,542 | 5,519,939 | | | 2022 | 925,000 | 250,000 | 1,100,018 | — | 2,122,875 | 47,066 | 4,444,959 | | | 2021 | 67,596 | 250,000 | 549,983 | 1,100,040 | — | — | 1,967,619 | | Todd Kahn Chief Executive Officer and Brand President, Coach | 2023 | 950,000 | — | 1,673,684 | 1,000,624 | 1,240,938 | 75,913 | 4,941,159 | | | 2022 | 950,000 | — | 1,199,996 | 799,998 | 2,106,625 | 68,110 | 5,124,729 | | | 2021 | 870,423 | — | 2,299,988 | 799,998 | 2,348,878 | 36,259 | 6,355,546 | | Liz Fraser Chief Executive Officer and Brand President, Kate Spade | 2023 | 850,000 | — | 870,325 | 520,320 | 449,650 | 68,913 | 2,759,208 | | | 2022 | 840,385 | — | 719,989 | 480,005 | 1,619,250 | 66,560 | 3,726,189 | | | 2021 | 775,385 | 250,000 | 566,667 | — | 1,548,000 | 25,084 | 3,165,136 | | David Howard(8) General Counsel and Secretary | 2023 | 575,000 | — | 869,454 | 400,246 | 355,005 | 49,791 | 2,249,496 |
Treatment of Long-Term Incentives Upon Termination or Change in Control
Treatment of Long-Term Incentives Upon Termination or Change in Control In general, the annual stock option, PRSU and RSU grants made to our NEOs and outstanding as of the end of fiscal year 2023 are treated as indicated below in the event of termination or change-in-control. The HR Committee retains discretion to modify the terms of any agreement in certain situations.
Treatment of Long-Term Incentives Upon Termination or Change in Control
| Reason for Termination | Treatment of Unvested Awards | | Voluntary (including a resignation without “Good Reason,” as defined above under Employment Agreements and Compensatory Arrangements) | Unvested awards forfeit. Vested stock options remain exercisable for 90 days. | | Retirement (departure from the Company, other than for cause, if employee has attained age 65 and five years of service or age 55 and ten years of service with the Company) | Unvested awards remain outstanding and become vested according to their original schedule, subject to compliance with the restrictive covenants through the last vesting date. The number of PRSUs that vest is based on actual company performance. Vested options continue to be exercisable for the remainder of the ten-year term. | | Severance Event (including resignation with “Good Reason” or termination without “Cause,” as defined above under Employment Agreements and Compensatory Arrangements) | Unvested awards vest pro-rata as of the employee’s termination date. The number of PRSUs that ultimately vest will be based on actual performance relative to the pre-established targets. Exercisability of vested stock options continues for the 90 days following termination date. | | Death or Long-Term Disability | Vesting of unvested awards and target PRSUs is accelerated. The estate (or the executive) may exercise stock options for five years. | | Termination upon a Change-in-Control | Vesting of unvested awards is accelerated (at target performance for PRSUs if prior to completion of performance period). | | Cause (as defined above under Employment Agreements and Compensatory Arrangements) | Vested and unvested stock options and unvested RSUs and PRSUs forfeit, and financial gains realized in the twelve months prior to termination must be repaid. | | Change-in-Control without termination | Outstanding awards shall continue vesting as scheduled assuming continued employment, or an equivalent award shall be substituted by the successor corporation. PRSUs shall be deemed earned at target performance if Change-in-Control is prior to end of performance period. |
Treatment of Long-Term Incentives Upon Termination or Change in Control
| | 2023 PROXY STATEMENT | 67 |
Treatment of Long-Term Incentives Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The tables below reflect the amount of compensation that would have been owed to each of our NEOs in the event of employment termination, including due to a change in control, on July 1, 2023. The tables include amounts earned through July 1, 2023, as well as estimates of the amounts which would have been paid to such NEOs following that date. The actual amounts to be paid out can only be determined at the time of a NEO’s termination. Regardless of the reason for a NEO’s termination of employment, a NEO may be entitled to receive amounts earned during the term of employment. Such amounts include:
Treatment of Long-Term Incentives Upon Termination or Change in Control
| • | any vested balance in our qualified and non-qualified retirement plans; |
Treatment of Long-Term Incentives Upon Termination or Change in Control
| • | the ability to convert life insurance at the NEO’s own expense; |
Treatment of Long-Term Incentives Upon Termination or Change in Control
| • | the ability to exercise vested stock options for a defined period of time. |
Treatment of Long-Term Incentives Upon Termination or Change in Control
In the event a NEO dies or is terminated due to disability, such NEO or beneficiary would receive benefits under our broad-based life insurance or long-term disability plan, as appropriate. The amounts of compensation due upon various termination situations reflect the specific employment terms and conditions for each executive as described above under Employment Agreements and Compensatory Arrangements, and were calculated using the following assumptions:
Treatment of Long-Term Incentives Upon Termination or Change in Control
| • | LTI amounts reflect the intrinsic value of unvested stock options, RSUs and PRSUs whose vesting would be pro-rated, accelerated or continued due to the termination, assuming a closing price of our common stock on June 30, 2023 of $42.80 the last trading day before the assumed termination date. For termination reasons in which the value of PRSUs earned depends on satisfaction of the performance criteria, FY22-23 PRSUs reflect actual performance of 113.4% of target, as certified by the HR Committee in August 2022. |
Treatment of Long-Term Incentives Upon Termination or Change in Control
| • | The HR Committee does not exercise its discretion to pro-rata vest, increase or decrease any equity awards. |
Treatment of Long-Term Incentives Upon Termination or Change in Control
| • | The values shown for continuation of benefits and perquisites reflect our cost for each program as of July 1, 2023. These costs may change annually. |
Treatment of Long-Term Incentives Upon Termination or Change in Control
| • | The “Total” row represents the sum of all estimated payments in the column. |
Treatment of Long-Term Incentives Upon Termination or Change in Control
| 68 | 2023 PROXY STATEMENT | |
DAVID HOWARD
| | Pay versus Performance |
Pay versus Performance Relationship
Pay versus Performance Relationship See the Compensation Discussion & Analysis for a description of how the HR Committee assesses the relationship between executive compensation and performance. The chart below provides a comparison between (i) the total stockholder return of Tapestry and of the S&P Composite 1500 Apparel, Accessories & Luxury Goods Index assuming a fixed $100 initial investment on June 27, 2020 and reinvestment of dividends, and (ii) the compensation actually paid to our PEOs and the average compensation actually paid to our non-PEO NEOs for the fiscal years 2021, 2022 and 2023. Because our TSR outperformed the TSR of our industry index by a factor of more than 17 times, and because LTI are the most significant element of pay for our PEO and our other NEOs, compensation actually paid is substantially higher than amounts reported in the Summary Compensation Table on a cumulative basis for fiscal years 2021, 2022 and 2023. While we are extremely pleased with our strong absolute and relative TSR performance over the last three years, we realize that there is no guarantee that our executives will actually realize the amounts reported below as compensation actually paid.
Pay versus Performance Relationship
| | FY 2020 | FY 2021 | FY 2022 | FY 2023 | | Tapestry TSR | $100 | $339.92 | $252.06 | $361.01 | | S&P Composite 1500 Apparel, Accessories & Luxury Goods Index | $100 | $200.09 | $122.52 | $115.41 | | PEO Compensation Actually Paid - Zeitlin | | $4,088,619 | NA | NA | | PEO Compensation Actually Paid - Crevoiserat | | $32,598,067 | $8,274,188 | $21,941,536 | | Avg non-PEO NEO Compensation Actually Paid | | $9,037,986 | $2,782,806 | $5,632,476 |
Pay versus Performance Relationship
| 74 | 2023 PROXY STATEMENT | |
Pay versus Performance Relationship
The chart below provides a comparison between (i) Tapestry’s Net Income and (ii) compensation actually paid to our PEOs and average compensation actually paid to our non-PEO NEOs for the fiscal years ended July 3, 2021, July 2, 2022, and July 1, 2023.
Pay versus Performance Relationship
| | FY 2021 | FY 2022 | FY 2023 | | Net Income (in millions) | $834 | $856 | $936 | | PEO Compensation Actually Paid - Zeitlin | $4,088,619 | NA | NA | | PEO Compensation Actually Paid - Crevoiserat | $32,598,067 | $8,274,188 | $21,941,536 | | Avg non-PEO NEO Compensation Actually Paid | $9,037,986 | $2,782,806 | $5,632,476 |
Pay versus Performance Relationship
| | 2023 PROXY STATEMENT | 75 |
Pay versus Performance Relationship
The chart below provides a comparison between (i) Tapestry’s Net Sales and (ii) compensation actually paid to our PEOs and average compensation actually paid to our non-PEO NEOs for the fiscal years 2021, 2022 AND 2023.
Pay versus Performance Relationship
| | FY 2021 | FY 2022 | FY 2023 | | Net Sales (in millions) | $5,746 | $6,685 | $6,661 | | PEO Compensation Actually Paid - Zeitlin | $4,088,619 | NA | NA | | PEO Compensation Actually Paid - Crevoiserat | $32,598,067 | $8,274,188 | $21,941,536 | | Avg non-PEO NEO Compensation Actually Paid | $9,037,986 | $2,782,806 | $5,632,476 |
13. What happens if a Director nominee does not receive a majority of the votes cast?
13. What happens if a Director nominee does not receive a majority of the votes cast? Under our Corporate Governance Principles, a Director nominee, running uncontested, who does not receive a majority of the votes cast, is required to tender his or her resignation for consideration by the GN Committee. The GN Committee will recommend to the Board whether to accept or reject the resignation. The Board will act on the tendered resignation and publicly disclose its decision within 90 days following certification of the election results. Unless all Directors have tendered their resignation, any Director who tenders his or her resignation will not participate in the Board’s decision with respect to his or her resignation.