DEF 14A of Tapestry, Inc.
Filed Sep 27, 2024 · FY20240001140361-24-042187
PARTICIPATING IN THE ANNUAL MEETING & VOTING YOUR SHARES
| COMPENSATION RISK ASSESSMENT | 60 | | EXECUTIVE COMPENSATION | 61 | | Summary Compensation Table | 61 | | Grants of Plan-based Awards | 63 | | Outstanding Equity Awards at Fiscal Year-end 2024 | 64 | | 2024 Option Exercises and Stock Vested | 66 | | 2024 Non-Qualified Deferred Compensation | 67 | | Employment Agreements and Compensatory Arrangements | 68 | | Potential Payments Upon Termination or Change in Control | 71 | | CEO Pay Ratio | 74 | | Pay versus Performance | 75 | | SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS | 80 | | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 81 | | Transactions with Related Persons | 81 | | Policies and Procedures for Related Person Transactions | 81 | | OTHER INFORMATION | 82 | | Communicating with the Board | 82 | | Stockholder Proposals for the 2025 Annual Meeting | 82 | | Other Business | 82 | | Tapestry’s Form 10-K and Other Matters | 83 | | Expenses of Solicitation | 83 | | Householding | 83 | | APPENDIX A — RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | 84 | | APPENDIX B: — QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT | 86 |
Well-being and Safety
| Name & Principal Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Joanne Crevoiserat Chief Executive Officer | 1,390,385 | — | 6,323,364 | 3,999,753 | 3,654,000 | 62,711 | 15,430,213 | | Scott Roe Chief Financial Officer and Chief Operating Officer | 965,385 | — | 2,371,288 | 1,499,903 | 1,590,469 | 78,033 | 6,505,078 | | Todd Kahn Chief Executive Officer and Brand President, Coach | 990,385 | — | 1,896,988 | 1,199,925 | 1,875,000 | 62,467 | 6,024,765 | | Liz Fraser(1) Chief Executive Officer and Brand President, Kate Spade | 850,000 | — | 822,036 | 519,963 | 797,300 | 26,900 | 3,016,199 | | David Howard General Counsel and Secretary | 595,192 | — | 1,040,456 | 499,967 | 548,100 | 34,188 | 2,717,903 |
Human Resources Committee
| • | reviews non-employee director compensation and benefits and recommends changes to the Board as necessary; |
2024 Director Compensation
2024 Director Compensation Compensation paid in fiscal year 2024 for each Independent Director is detailed below:
2024 Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards(1) ($) | All Other Compensation(2) | Total ($) | | John P. Bilbrey | 112,391 | 84,996 | 84,992 | — | 282,380 | | Darrell Cavens | 100,000 | 84,996 | 84,992 | 10,000 | 279,988 | | David Denton(3) | 76,658 | — | — | — | 76,658 | | David Elkins(3) | 8,791 | 84,984 | 85,008 | — | 178,783 | | Hanneke Faber | 100,000 | 84,996 | 84,992 | — | 269,988 | | Anne Gates | 325,000 | 84,996 | 84,992 | 12,000 | 506,988 | | Thomas Greco | 135,000 | 84,996 | 84,992 | — | 304,988 | | Kevin Hourican(3) | 8,791 | 84,984 | 85,008 | — | 178,783 | | Alan Lau | 97,431 | 84,996 | 84,992 | — | 267,419 | | Pamela Lifford | 100,000 | 84,996 | 84,992 | — | 269,988 | | Annabelle Yu Long(4) | 270,000 | — | — | — | 270,000 |
2024 Director Compensation
(1) 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 June 29, 2024, the last day of fiscal year 2024, each Independent Director held 3,189 unvested RSUs, except Messrs. Elkins and Hourican who held 1,816 unvested RSUs due to their joining grant upon appointment and Ms. Long, who does not hold RSUs. The outstanding stock options held by each Independent Director were: Mr. Bilbrey 42,905; Mr. Cavens 58,282; Mr. Denton 84,085; Mr. Elkins 5,280; Ms. Faber 28,346; Ms. Gates, 59,624; Mr. Greco, 28,764; Mr. Hourican 5,280; Mr. Lau 16,313 and Ms. Lifford, 28,764. (2) Amounts shown in “All Other Compensation” are matching charitable contributions under the Company’s Matching Gift Program. (3) Mr. Denton did not stand for re-election to the Tapestry Board of Directors in November 2023; Messrs. Elkins and Hourican were appointed to the Tapestry Board of Directors in February 2024. (4) 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.
2024 Director Compensation
| | 2024 PROXY STATEMENT | 21 |
2024 Director Compensation
| | PROPOSAL 1: ELECTION OF DIRECTORS |
2024 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. Eleven Directors will be elected at this year’s Annual Meeting. Each Director’s term lasts until the 2025 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. 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 27, 2024.
2024 Director Compensation
| THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR’’ EACH OF THE BELOW NOMINEES FOR DIRECTOR. |
2024 Director Compensation
Director Nominees
2024 Director Compensation
| Name | Age | Position with Tapestry | | Anne Gates | 64 | Independent Chair of the Board of Directors | | John P. Bilbrey | 68 | Director | | Darrell Cavens | 51 | Director | | Joanne Crevoiserat | 60 | Director and Chief Executive Officer | | David Elkins | 56 | Director | | Johanna (Hanneke) Faber | 55 | Director | | Thomas Greco | 66 | Director | | Kevin Hourican | 51 | Director | | Alan Lau | 49 | Director | | Pamela Lifford | 61 | Director | | Annabelle Yu Long | 51 | Director |
Director Qualifications, Skills and Experience
Director Qualifications, Skills and Experience The Company does not set specific criteria for Directors, except to the extent required to meet applicable legal, regulatory and stock exchange requirements, including the independence requirements of the SEC and the NYSE. Nominees for Director will be selected on the basis of outstanding achievement in their personal careers, board experience, wisdom, integrity, ability to make independent, analytical inquiries, understanding of the business environment and willingness to devote adequate time to Board duties. While the selection of qualified Directors is a complex and subjective process that requires consideration of many intangible factors, the GN Committee of the Board believes that each Director should have a basic understanding of (a) the principal operational and financial objectives, plans and strategies of the Company, (b) the results of operations and financial condition of the Company and its business, and (c) the relative standing of the Company and its business in relation to its competitors. The Board believes that each of its current Directors meet all of these qualifications, as well as the individual qualifications presented in each of their biographies.
Director Qualifications, Skills and Experience
| 22 | 2024 PROXY STATEMENT | |
Director Qualifications, Skills and Experience
As reflected in the following chart, we believe our Director nominees offer a diverse range of key skills and experience to provide effective oversight of the Company and create long- term sustainable growth through successful execution of the Company's strategic initiatives
Director Qualifications, Skills and Experience
| Experience | John P. Bilbrey | Darrell Cavens | Joanne Crevoiserat | David Elkins | Hanneke Faber | Anne Gates | Thomas Greco | Kevin Hourican | Alan Lau | Pamela Lifford | Annabelle Yu Long | Total | | Operating Experience | | | | | | | | | | | | | | Prior Public Company Experience (directorships or executive officer) | • | • | • | • | • | • | • | • | | | • | 9 | | Executive Leadership | | | | | | | | | | | | | | Current Public Company CEO | | | • | | • | | | • | | | | | | Former Public Company CEO | • | • | | | | | • | | | | | 11 | | Other Senior Executive | | | | • | | • | | | • | • | • | | | Financial / Accounting Experience | | | | | | | | | | | | | | Financial Background (CFO, Treasurer, Accounting) | | | • | • | | • | | | | | | | | Oversight Financial Functions | • | • | • | • | • | • | • | | • | • | • | | | Other Significant Experience | • | • | • | • | • | • | • | • | • | • | • | 11 | | Investment Experience | | • | | • | | | | | | | • | | | Industry Experience | | | | | | | | | | | | | | Artificial Intelligence (A.I.) | ❖ | ❖ | | ⯀ | ❖ | ◯ | ❖ | | ⯀ | ◯ | | 8 | | Cyber / Information Security | ❖ | ⯀ | ⯀ | ❖ | ❖ | ◯ | ❖ | ❖ | ⯀ | | | 9 | | Entrepreneurial / Innovation | | ⯀ | ❖ | ⯀ | ❖ | ❖ | ❖ | | ❖ | ⯀ | ❖ | 9 | | Global / International | ⯀ | ❖ | ❖ | ⯀ | ⯀ | ❖ | ❖ | ❖ | ❖ | ⯀ | ❖ | 11 | | Human Capital Management | ❖ | ❖ | ❖ | ❖ | ❖ | ❖ | ❖ | ❖ | ⯀ | ❖ | | 10 | | Industry (Retail / Consumer Products) | ⯀ | ⯀ | ⯀ | ⯀ | ⯀ | ❖ | ⯀ | ❖ | ❖ | ⯀ | ❖ | 11 | | Marketing & Branding | ❖ | ❖ | ❖ | ❖ | ⯀ | ❖ | ⯀ | ❖ | ❖ | ⯀ | | 10 | | Mergers & Acquisitions | ❖ | ⯀ | | ⯀ | ❖ | ⯀ | ❖ | ⯀ | ❖ | | ❖ | 9 | | Supply Chain / Manufacturing | ❖ | ❖ | ❖ | ⯀ | ❖ | ❖ | ❖ | ❖ | | | | 8 | | Technology / Digital / E-commerce | ❖ | ⯀ | ❖ | ❖ | ⯀ | ❖ | ❖ | ❖ | ❖ | ❖ | ❖ | 11 | | Corporate Responsibility | | | | | | | | | | | | | | Environmental | | | ❖ | ⯀ | ❖ | ◯ | ❖ | ❖ | | ❖ | | 7 | | Social | | | ❖ | ⯀ | ❖ | ❖ | ❖ | ❖ | ⯀ | ❖ | | 8 | | Governance | ❖ | ❖ | ❖ | ⯀ | ❖ | ❖ | ❖ | ❖ | ⯀ | ❖ | ❖ | 11 |
Director Qualifications, Skills and Experience
| ⯀ | Direct Experience | ❖ | Managing / Overseeing | ◯ | Continuing Education |
Director Qualifications, Skills and Experience
| | 2024 PROXY STATEMENT | 23 |
Director Qualifications, Skills and Experience
| JOHN P. BILBREY (J.P.) | | Age: 68 • Director since 2020 • Independent Committees: Human Resources, Governance and Nominations | | Business Experience: | | » Executive Chairman of Olaplex Holdings, Inc. (July 2023 – Current) » The Hershey Company (2003 – 2017) » President and Chief Executive Officer (2011 – 2017); Executive Vice President and Chief Operating Officer (2010 – 2011); Senior Vice President, President Hersey North America (2007 – 2010); Senior Vice President, President Hershey International (2003 – 2007) | | U.S. Public Board Memberships: | | Current Colgate-Palmolive Elanco Animal Health Olaplex Previous (past five years) Campbell Soup Company |
Director Qualifications, Skills and Experience
Mr. Bilbrey is qualified to serve as a Director based on his experience as the chief executive officer of a large, publicly-traded company as well as his strong operational and financial background in consumer facing industries. Mr. Bilbrey holds a Bachelor of Science in Psychology from Kansas State University.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| DARRELL CAVENS | | | Age: 51 • Director since 2018 • Independent Committees: Human Resources | | | Business Experience: | | | » President of New Ventures, Qurate Retail Group (2017 – 2018) » President and Chief Executive Officer, Zulily, Inc., (2009 – 2017) » Director, SQL Server / BizTalk Server Microsoft (2008 – 2009) » Chief Technology Officer and Senior Vice President, Marketing, Blue Nile (1999 – 2008) | | | U.S. Public Board Memberships: | Other Experience and Community Involvement: | | Previous (past five years) Big Sky Growth Partners | Rad Power Bikes Vouched Brooks Running |
Director Qualifications, Skills and Experience
Mr. Cavens is qualified to serve as a Director based on his experience as the chief executive officer and co-founder of a large, publicly-traded company, his strong background in online retailing, technology and data analytics and his understanding of the retail industry. Mr. Cavens attended the University of Victoria.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| 24 | 2024 PROXY STATEMENT | |
Director Qualifications, Skills and Experience
| JOANNE CREVOISERAT | | | Age: 60 • Director since 2020 • Chief Executive Officer and Director | | | Business Experience: | | | » Tapestry, Inc. (2019 – Current) » Chief Executive Officer (2020 – Current); Chief Financial Officer (2019 – 2020) » Abercrombie & Fitch Co. (2014 – 2019) » Executive Vice President and Chief Operating Officer (2017 – 2019); Chief Financial Officer (2014 – 2017) » Prior to 2014, Senior level finance positions at Kohl’s, Wal-mart Stores and May Department Stores, including Chief Financial Officer, Filene’s, Foley’s and Famous-Barr. | | | U.S. Public Board Memberships: | Other Experience and Community Involvement: | | Current General Motors Previous (past five years) At Home Group | Partnership for New York The Fashion Pact |
Director Qualifications, Skills and Experience
Ms. Crevoiserat is uniquely qualified to serve as a Director based on her experience in the management of the Company and oversight of strategic planning and operations, as well as her significant financial expertise and experience in the retail industry. Ms. Crevoiserat holds a Bachelor of Science in Finance from the University of Connecticut.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| DAVID ELKINS | | Age: 56 • Director since 2024 • Independent Committees: Audit | | Business Experience: | | » Executive Vice President and Chief Financial Officer, Bristol Myers Squibb (2019 – Current) » Executive Vice President and Chief Financial Officer, Celgene Corporation (2018 – 2019) » Chief Financial Officer, Johnson & Johnson’s (J&J) Consumer Products (2014 – 2017) » Chief Financial Officer, Round Rock Research LLC (2012 – 2014) » Executive Vice President and Chief Financial Officer, Becton Dickinson & Company (2008 – 2012) » Vice President and Chief Financial Officer, North America & Global Marketing, AstraZeneca (2001 – 2008) |
Director Qualifications, Skills and Experience
Mr. Elkins is qualified to serve as a Director based on his experience as an executive officer of a large, publicly-traded consumer-facing company, his extensive financial background and M&A experience. Mr. Elkins holds a Bachelor’s degree in Economics from the University of Delaware, an M.S. degree from the University of Pennsylvania, and an M.B.A. from Drexel University.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| | 2024 PROXY STATEMENT | 25 |
Director Qualifications, Skills and Experience
| HANNEKE FABER | | Age: 55 • Director since 2021 • Independent Committees: Audit | | Business Experience: | | » Chief Executive Officer, Logitech International S.A. (2023 – Current) » Unilever PLC (2018 – 2023) » President Global Nutrition (2022 – 2023); President Global Foods & Refreshment (2019 – 2022); President Europe (2018 – 2019) » Royal Ahold Delhaize (2013 – 2017) » Chief Innovation & eCommerce Officer (2016 –2017); Chief Commercial Officer (2013 – 2016) » Prior to 2013, Vice President and Global Leader, The Procter and Gamble Company | | U.S. Public Board Memberships: | | Current Logitech Previous (past five years) Bayer AG |
Director Qualifications, Skills and Experience
Ms. Faber is qualified to serve as a Director based on her experience as a senior executive of large global publicly-traded companies and her nearly 30 years of experience in technology, consumer goods and retail. Ms. Faber holds a Bachelor of Journalism and Master of Business Administration from the University of Houston.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| 26 | 2024 PROXY STATEMENT | |
Director Qualifications, Skills and Experience
| ANNE GATES | | | Age: 64 • Director since 2017 • Independent Chair Committees: Audit, Governance and Nominations | | | Business Experience: | | | » President, MGA Entertainment (2014 – 2017) » The Walt Disney Company (1991 – 2012) » Executive Vice President and Chief Financial Officer for Disney Consumer Products; Managing Director for Disney Consumer Products Europe and Emerging Markets; Senior Vice President of Operations, Planning, and Analysis | | | U.S. Public Board Memberships: | Other Experience and Community Involvement: | | Current The Kroger Company Raymond James Financial, Inc. | Packard Foundation Save the Children Salzburg Global Seminar Public Media Group of Southern California |
Director Qualifications, Skills and Experience
Ms. Gates is qualified to serve as a Director and Board Chair based on her business acumen, financial literacy and her broad background in finance, marketing, strategy and business development, including growing international business, and her understanding of the retail and consumer products industries. Ms. Gates holds a Bachelor of Arts in Mathematics from the University of California, Berkeley, and an M.Sc. in Operations Research from Columbia University.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| | 2024 PROXY STATEMENT | 27 |
Director Qualifications, Skills and Experience
| THOMAS GRECO | | | Age: 66 • Director since 2020 • Independent Committees: Audit, Governance and Nominations | | | Business Experience: | | | » Advance Auto Parts (2016 – 2024) » Strategic Advisor at Advance Auto Parts (2023 – 2024); Chief Executive Officer (2016 – 2023) » Chief Executive Officer of Frito-Lay North America unit of PepsiCo (2011 – 2016) » Various leadership positions at The Procter & Gamble Company (1986 – 2011) | | | U.S. Public Board Memberships: | Other Experience and Community Involvement: | | Current Centene Corporation Previous (past five years) Advance Auto Parts | Sabra Dipping Company |
Director Qualifications, Skills and Experience
Mr. Greco is qualified to serve as a Director based on his extensive leadership experience, including his role as CEO of a large public company, and his background in strategy, supply chain and logistics. Mr. Greco holds a Bachelor of Commerce degree form Laurentian University in Sudbury, Ontario and a Master of Business Administration from the Richard Ivey School of Business in London, Ontario.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| KEVIN HOURICAN | | Age: 51 • Director since 2024 • Independent Committees: Human Resources | | Business Experience: | | » Chair of the Board and Chief Executive Officer, Sysco (February 2020 – Current) » Executive Vice President, CVS Health and President, CVS Pharmacy (2012 – 2020) » Senior Vice President and Regional Director of Stores, Macy’s (2006 – 2012) | | U.S. Public Board Memberships: | | Current Sysco Corporation |
Director Qualifications, Skills and Experience
Mr. Hourican is qualified to serve as a Director based on his experience as the chief executive officer of a large, publicly-traded company as well as his strong operational and supply chain experience. Mr. Hourican holds an undergraduate degree in Economics and a master’s degree in Supply Chain Management from The Pennsylvania State University.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| 28 | 2024 PROXY STATEMENT | |
Director Qualifications, Skills and Experience
| ALAN LAU | | Age: 49 • Director since 2023 • Independent Committees: Audit | | Business Experience: | | » Chief Business Officer for Animoca Brands (2022 – Current) » Chairman and CEO of Tencent WeSure (2016 – 2022) » Various roles, most recent, Senior Partner; Asia head for McKinsey Digital (1997 – 2016) | | Other Experience and Community Involvement: | | Vice-chair of M+ in Hong Kong Co-chair of the Asia committees at both the Tate and the Guggenheim |
Director Qualifications, Skills and Experience
Mr. Lau is qualified to serve as a Director based on his broad experience in engaging consumers across digital channels and leveraging technology and data analytics, as well as his deep knowledge of the important China market. Mr. Lau holds a master’s degree in Engineering from Oxford University.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| PAMELA LIFFORD | | Age: 61 • Director since 2020 • Independent Committees: Human Resources | | Business Experience: | | » President, Global Brands, Franchises, and Experiences, Warner Bros. Discovery (2016 – 2023) » Executive Vice President, Global Licensing, Quicksilver (2013 – 2015) » Executive Vice President, General Manager Global Fashion/Home/Infant - Disney Consumer Products, The Walt Disney Company (2000 – 2012) |
Director Qualifications, Skills and Experience
Ms. Lifford is qualified to serve as a Director based on her unique and proven abilities to create global lifestyle brands through successful collaborations andher extensive experience in retail and licensing.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| | 2024 PROXY STATEMENT | 29 |
Director Qualifications, Skills and Experience
| ANNABELLE YU LONG | | | Age: 51 • Director since 2016 • Independent | | | Business Experience: | | | » Founding and Managing Partner of BAI Capital (2021 – Current) » Bertelsmann (2008 – Current) » Bertelsmann Group Management Committee (2011 – Current); Chief Executive Officer of Bertelsmann China Corporate Center (2008 – 2020); Managing partner of Bertelsmann Asia Investments (2008 – 2020); Founding and Managing partner of Bertelsmann Asia Investments (2008 – 2020); Bertelsmann Digital Media Investments & Bertelsmann Asia Media Development (2007); Bertelsmann Entrepreneur Program (2005 – 2006) | | | U.S. Public Board Memberships: | Other Experience and Community Involvement: | | Current Nio Inc. LexinFintech Holdings Ltd. | The Hongkong and Shanghai Banking Corporation Limited, Independent Director Limon Media Limited, Independent Director Governor of China Venture Capital and Private Equity Association |
Director Qualifications, Skills and Experience
Ms. Long is qualified to serve as a Director based on her insight about the Chinese consumer and knowledge of and experience with the media landscape in China, along with her track record of investing in digital and lifestyle companies. Ms. Long holds a bachelor’s degree in electrical engineering from the University of Electronic Science and Technology in China and an MBA from Stanford Graduate School of Business.
Director Qualifications, Skills and Experience
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Director Qualifications, Skills and Experience
| 30 | 2024 PROXY STATEMENT | |
Director Qualifications, Skills and Experience
| | PROPOSAL 2: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
Director Qualifications, Skills and Experience
This section should be read in conjunction with the Audit Committee Report presented below.
Audit Committee Pre-Approval Policy
* Mr. Elkins joined the Audit Committee effective February 29, 2024.
Executive Compensation Practices
| WHAT WE DO | | WHAT WE DON’T DO | | | | Pay for Performance, with 10% of AIP tied to EI&D goals that support business performance. | | 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 in compliance with new SEC rules. | | 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 dashboard) 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 Compensation Decision Making Process for details. The following table briefly describes each element of compensation. A detailed explanation of each component for fiscal year 2024 is provided in the next section, Fiscal Year 2024 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: AIP | 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 performance under dashboard of EI&D measures. | | | | | | 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 maximize TSR growth, 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 on an absolute basis. Stock options have value only when our stock price increases from the price on the date of grant so they are a 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 2024 Compensation Summary----Target Pay Mix
| Fiscal Year 2024 Compensation Program Highlights | Rationale | | Awarded salary increases to Ms. Crevoiserat and Messrs. Roe, Kahn and Howard as part of the annual review cycle. | To align more closely 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 weighting to Gross Margin measure. | To increase focus on metric(s) that we believe drive P/E multiple expansion and TSR growth. | | For AIP and for PRSU awards, continued to tighten our performance curves. | To recognize economic recovery trends in our industry despite continued uncertainty related to softening consumer demand and general economic conditions. |
Base Salary
Base Salary Tapestry employees, including our NEOs, are paid a salary based on the responsibilities of their position, the skills and experience required for the position, their individual performance, business performance, labor market conditions and with consideration of salary levels for similar positions in our peer companies. For our NEOs, in addition to these factors, it is Tapestry’s practice to recommend salary increases for HR Committee consideration only if there is clear evidence (based on benchmarking) that their salary lags the market. During fiscal year 2024, the HR Committee approved the base salary rate increases for Ms. Crevoiserat and Messrs. Roe, Kahn and Howard. The salary rates in effect during fiscal year 2024 for each NEO were as follows:
Annual Incentive Plan
Annual Incentive Plan The Tapestry AIP rewards eligible employees, including 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 in fiscal year 2024 to continue to incentivize a top line growth and operational efficiency mindset, and also considering peer group practices and trends. We also recognized economic recovery trends in our industry while still accounting for continued uncertainty related to the general macroeconomic environment and softening consumer demand. The HR Committee certified the results after the end of the fiscal year. Payouts for Tapestry and Coach brand results were above target, while payouts for kate spade new york brand results were between threshold and target. The fiscal year 2024 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 fiscal year 2024 financial measures were intended to incentivize and reward management for delivering results that prioritize sustainable brand health and TSR performance. For fiscal year 2024 we modified the metric weights to allocate the strongest focus on Sales and Gross Margin goals, aligned with key business priorities and which we believe are top drivers of TSR growth. We also felt comfortable lowering the weight on Operating Income given the Gross Margin metric also provides profit exposure.
Annual Incentive Plan
| Fiscal Year 2024 Measure | Reason for Measure | Fiscal Year 2023 Weight | Fiscal Year 2024 Weight | Performance / Payout Curve | | Net Sales | Top drivers of P/E multiple expansion, leading to long-term TSR growth | 40% | 35% | For maximum performance, 200% of the target award can be earned, and for threshold performance, 30% of the target award can be earned. | | Gross Margin | | 20% | 35% | | | Operating Income | Core profitability measure driving increases in operating cash flow and a measure of brand health | 40% | 30% | |
Annual Incentive Plan
| 46 | 2024 PROXY STATEMENT | |
Annual Incentive Plan
The company’s operating plans were the basis used by the HR Committee for setting target AIP metric goals for fiscal year 2024, and required growth in Net Sales, Operating Income and Gross Margin on a non-GAAP, constant currency basis versus fiscal year 2023 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 predefined 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%. In setting the fiscal year 2024 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 2023. The EI&D AIP component applied to all Leadership in fiscal year 2024, including NEOs and functions as a potential negative modifier on financial performance, based on the HR Committee’s assessment of performance versus a predefined, quantitative and qualitative dashboard of EI&D 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 predefined 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 EI&D 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 dashboard 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 $6.0 million under the AIP for any fiscal year. The fiscal year 2024 AIP components for each NEO are displayed below.
Annual Incentive Plan
| | | | Component and its Weight as a Percent of Each NEOs Target Annual Incentive | | | | | | | [90% of AIP] | | [10% of AIP] | | Named Executive Officer | Business Segment | Target Annual Incentive as a % of Salary | Tapestry, Inc. Component | Brand Component | Equity, Inclusion & Diversity Modifier(1) | | Joanne Crevoiserat | Tapestry, Inc. | 200% | 100% | | | | Scott Roe | Tapestry, Inc. | 125% | 100% | | | | Todd Kahn | Coach | 125% | 40% | 60% | | | Liz Fraser | Kate Spade | 100% | 40% | 60% | | | David Howard | Tapestry, Inc. | 70% | 100% | | |
Annual Incentive Plan
(1) The EI&D Modifier is a potential negative modifier on initial AIP funding based on financial results versus pre-defined goals. A full financial payout can only be achieved if the HR Committee certifies that all EI&D goals are achieved.
Annual Incentive Plan
| | 2024 PROXY STATEMENT | 47 |
Annual Incentive Plan
The financial performance measures, target values established by the HR Committee, and the certified financial results for the fiscal year 2024 AIP appear below. Tapestry, Inc.
Applied to all Named Executive Officers
| ($ in millions) | Weight | Fiscal Year 2023 Results (1) | Fiscal Year 2024 Award Targets(2)(3) | | | Fiscal Year 2024 Results(3) | Payout as a % of Target Incentive(2) | | | | | Threshold | Target | Maximum | | | | Net sales | 35% | $6,660.9 | $6,411.7 | $6,969.3 | $7,178.3 | $6,748.5 | 72.0% | | vs. prior year | | | | 5% | | 1% | | | Operating income (excluding AIP $) | 30% | $1,251.3 | $1,156.4 | $1,360.5 | $1,537.4 | $1,398.9 | 122.0% | | vs. prior year | | | | 9% | | 12% | | | Gross Margin | 35% | 70.8% | 70.5% | 71.5% | 72.5% | 73.1% | 200.0% | | vs. prior year | | | | 1% | | 3% | | | Weighted average payout as a % of Target: | | | | | | | 131.8% |
Applied to Mr. Kahn
| ($ in millions) | Weight | Fiscal Year 2023 Results (1) | Fiscal Year 2024 Award Targets(2)(3) | | | Fiscal Year 2024 Results(3) | Payout as a % of Target Incentive(2) | | | | | Threshold | Target | Maximum | | | | Net sales | 35% | $4,960.4 | $4,796.7 | $5,157.7 | $5,312.5 | $5,162.8 | 103.0% | | vs. prior year | | | | 4% | | 4% | | | Operating income (excluding AIP $) | 30% | $1,561.9 | $1,446.9 | $1,607.7 | $1,736.3 | $1,730.1 | 195.0% | | vs. prior year | | | | 3% | | 11% | | | Gross Margin | 35% | 73.5% | 73.2% | 74.2% | 75.2% | 76.1% | 200.0% | | vs. prior year | | | | 1% | | 4% | | | Weighted average payout as a % of Target: | | | | | Coach: | | 164.7% | | | | | | | Combined with Tapestry: | | 151.5% |
Applied to Ms. Fraser
| ($ in millions) | Weight | Fiscal Year 2023 Results (1) | Fiscal Year 2024 Award Targets(2)(3) | | | Fiscal Year 2024 Results(3) | Payout as a % of Target Incentive(2) | | | | | Threshold | Target | Maximum | | | | Net sales | 35% | $1,418.9 | $1,378.3 | $1,498.2 | $1,543.1 | $1,341.9 | —% | | vs. prior year | | | | 6% | | (5)% | | | Operating income (excluding AIP $) | 30% | $122.3 | $155.1 | $182.4 | $209.8 | $145.2 | —% | | vs. prior year | | | | 49% | | 19% | | | Gross Margin | 35% | 63.4% | 63.5% | 64.4% | 65.3% | 65.3% | 200.0% | | vs. prior year | | | | 2% | | 3% | | | Weighted average payout as a % of Target: | | | | | Kate Spade | | 70.0% | | | | | | | Combined with Tapestry: | | 94.7% |
Applied to Ms. Fraser
(1) Fiscal year 2023 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 2024 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 a dashboard with the predefined criteria and related results; no component of the scorecard had a pre-assigned weighting. Progress was made through diversifying our employee sourcing and recruitment process, transparent job posting policies, leadership participation in EI&D events, 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 1% out of a possible 10%. The initial performance payouts were therefore multiplied by 99% (instead of 100%) to reflect majority achievement of our EI&D dashboard. Calculation of Fiscal Year 2024 Annual Incentive Awards: The following table shows the fiscal year 2024 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 | $2,800,000 | 131.8% | | 131.8% | 99% | 130.5% | $3,654,000 | | Scott Roe | $1,218,750 | 131.8% | | 131.8% | 99% | 130.5% | $1,590,469 | | Todd Kahn | $1,250,000 | 131.8% | 164.7% | 151.5% | 99% | 150.0% | $1,875,000 | | Liz Fraser | $850,000 | 131.8% | 70.0% | 94.7% | 99% | 93.8% | $797,300 | | David Howard | $420,000 | 131.8% | | 131.8% | 99% | 130.5% | $548,100 |
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 2024. 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 2024 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 1.7%. 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 2024 Long-Term Incentive Awards: In August 2023, 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 fiscal year 2024 PRSU measures were intended to incentivize and reward management for delivering results that prioritize sustainable brand health and maximize TSR growth over a longer time horizon. These metrics support focus on effective achievement of our long-term strategy to build a global house of brands.
Long-Term Incentive Plan
| Fiscal Year 2024 Measure | Reason for Measure | Fiscal Year 2024 Weight | Performance / Payout Curve | | Sales | While Sales is also part of AIP, it is an essential measure to incentivize not only short-term, but long-term stable top line expansion in-line with our externally stated ambitions | 33% | For maximum performance, 200% of the target award can be earned, and for threshold performance, 30% of the target award can be earned. | | ROIC | Designed to measure how efficiently the Company manages its deployed capital. ROIC aligns closely with how investment community views Tapestry | 33% | | | Relative TSR | Supports alignment of executive compensation and stockholder return outcomes | 33% | See below |
Long-Term Incentive Plan
| | 2024 PROXY STATEMENT | 51 |
Long-Term Incentive Plan
For 33% of the PRSU award, potential payout is 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 FY24-FY26 Relative TSR Measurement | | | | Criteria: S&P 1500 Composite and Euronext Indexes in Apparel, Accessories and Luxury Goods with less than $100 billion in Market cap | adidas AG | Kontoor | | | Burberry | Moncler | | | Capri | Movado | | | Carter's, Inc. | Oxford | | | Columbia | Pandora A/S | | | Richemont | PVH Corp. | | | Luxottica | Ralph Lauren | | | Fossil Group, Inc. | Swatch | | | G-III Apparel Group, Ltd. | Under Armour | | | Hanesbrands Inc. | VF | | | Hugo Boss AG | Vera Bradley | | | Kering SA | |
Long-Term Incentive Plan
| FY24 - FY26 Relative TSR Performance / Payout Curve | | | | | | PRSU Payout: | No Payout | 30% | 100% | 200% | | rTSR: | Bottom Quartile | Threshold | Median | Top Quartile | | | 0 - 24% | 25% | 50% | 75 - 100% |
Long-Term Incentive Plan
The Company’s long-term strategic plan was a basis for the HR Committee setting the financial performance targets for each measure, and the maximum and threshold performance goals and payout levels to establish a clear performance standard. For maximum performance, 200% of the target number of stock units can be earned, and for threshold performance, 30% of the target number of stock units can be earned. The following table presents the HR Committee’s decisions for the NEO target value for equity grants and corresponding shares granted in fiscal year 2024:
Long-Term Incentive Plan
| | FY24 Long-Term Incentive Awards | | | | | | | | | Stock Options | | Target PRSUs | | RSUs | | Total | | Named Executive Officer | Shares | Grant Value ($) | Shares | Grant Value ($) | Shares | Grant Value ($) | Grant Value ($) | | Joanne Crevoiserat | 380,657 | 4,000,000 | 118,308 | 4,000,000 | 59,154 | 2,000,000 | 10,000,000 | | Scott Roe | 142,746 | 1,500,000 | 44,366 | 1,500,000 | 22,183 | 750,000 | 3,750,000 | | Todd Kahn | 114,197 | 1,200,000 | 35,492 | 1,200,000 | 17,746 | 600,000 | 3,000,000 | | Liz Fraser | 49,485 | 520,000 | 15,380 | 520,000 | 7,690 | 260,000 | 1,300,000 | | David Howard | 47,582 | 500,000 | 14,789 | 500,000 | 14,789 | 500,000 | 1,500,000 |
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. There are currently two outstanding Annual PRSU awards for fiscal years 2023-2025 and fiscal years 2024-2026 awarded to approximately 50 corporate leaders, including our NEOs. There are no Annual PRSU performance periods completed as of the end of fiscal year 2024. At the close of fiscal year 2023, the HR Committee certified the results for the performance-based LTI awards for the FY22-23 Annual PRSUs as described in the Long-Term Incentive Section of the Fiscal Year 2023 Proxy Statement. This award was subject to an additional one-year vesting requirement and the shares were distributed in August 2024.
Long-Term Incentive Plan
| 52 | 2024 PROXY STATEMENT | |
Long-Term Incentive Plan
Shares Earned: The following table displays the number of shares each NEO earned from the FY22-23 Annual PRSUs in August 2023 that were distributed in August 2024.
Long-Term Incentive Plan
| Name | Shares Granted at Target(1) | Shares Earned(2) | | Joanne Crevoiserat | 84,272 | 94,406 | | Scott Roe | 28,969 | 32,453 | | Todd Kahn | 21,068 | 23,602 | | Liz Fraser | 12,641 | 14,161 | | David Howard | 7,901 | 8,851 | | TOTAL: | | 173,473 |
Long-Term Incentive Plan
(1) Includes dividend equivalent shares accumulated through June 29, 2024. (2) This award is subject to an additional one-year vesting requirement and the shares were distributed in August 2024.
Long-Term Incentive Plan
| | 2024 PROXY STATEMENT | 53 |
Developments for Fiscal Year 2025
| Fiscal Year 2025 Compensation Highlights | Rationale | | Did not award salary increases to NEOs. | Currently aligned with competitive salaries for similar positions in our executive compensation peer group. | | Increased target AIP as a percent of salary for Mr. Kahn. | To align more closely with competitive total cash compensation for similar positions in our executive compensation peer group. | | For the AIP, enhanced EI&D modifier design to create up to +10% upside modifier for above target results and up to -10% negative modifier for below target results. Maximum payout remains 200% of target. | Align pay with performance and encourage outperformance versus communicated objectives to continue to educate, equip and empower the business to leverage our EI&D program as a strategic differentiator in our workforce and marketplace. | | For the AIP and PRSUs, further tightened our performance curves. | To incentivize a top line growth mindset, a focus on operational efficiencies, and to stay in line with executive compensation peer group trends. |
Developments for Fiscal Year 2025
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 2024, 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 2024. 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 2024, 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 2024 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. The most recent review was completed in February 2023 and will be revisited in fiscal year 2025. The peer group used during fiscal year 2024 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. 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.
Peer Group and Competitive Assessment of Compensation
| Company Name | Sub-Industry (as defined by GICS codes) | Revenue(1) | Market Valuation as of 6/29/2024(2) | | Compagnie Financière Richemont SA(3) | Apparel, Accessories and Luxury Goods | $22,242 | $92,140 | | The Estée Lauder Companies Inc. | Personal Care Products | $15,608 | $38,151 | | The Gap, Inc. | Apparel Retail | $14,889 | $8,960 | | V.F. Corporation | Apparel, Accessories and Luxury Goods | $10,455 | $5,252 | | Lululemon Athletica Inc. | Apparel, Accessories and Luxury Goods | $9,619 | $37,338 | | PVH Corp. | Apparel, Accessories and Luxury Goods | $9,218 | $5,914 | | Williams-Sonoma, Inc. | Homefurnishing Retail | $7,751 | $18,159 | | Tapestry, Inc. | Apparel, Accessories and Luxury Goods | $6,671 | $9,832 | | Ralph Lauren Corporation | Apparel, Accessories and Luxury Goods | $6,631 | $10,968 | | Victoria's Secret & Co. | Apparel Retail | $6,182 | $1,384 | | Levi Strauss & Co. | Apparel, Accessories and Luxury Goods | $6,179 | $7,664 | | Under Armour, Inc. | Apparel, Accessories and Luxury Goods | $5,702 | $2,882 | | Coty Inc. | Personal Care Products | $6,118 | $8,650 | | American Eagle Outfitters, Inc. | Apparel Retail | $5,262 | $3,921 | | Capri Holdings Limited | Apparel, Accessories and Luxury Goods | $5,170 | $3,859 | | Urban Outfitters, Inc. | Apparel Retail | $5,153 | $3,834 | | Tapestry, Inc. Percentile Rank | | 50th | 67th |
Peer Group and Competitive Assessment of Compensation
(1) As reported in the Form 10-K for the most recent fiscal year (in millions). (2) As reported by S&P Capital IQ (in millions). (3) Revenue was converted to U.S. dollars (US$) based on the exchange rate at the end of the fiscal year (3/31/2024). Market valuation was converted to US$ based on the exchange rate as of 6/29/2024.
Peer Group and Competitive Assessment of Compensation
| 56 | 2024 PROXY STATEMENT | |
Peer Group and Competitive Assessment of Compensation
Additional Information
Impact of Accounting and Tax Treatment
Impact of Accounting and Tax Treatment In designing our compensation and benefits programs, the HR Committee reviews and considers the accounting implications of its decisions, including the accounting treatment of amounts awarded or paid to our executives. Section 162(m) of the Internal Revenue Code (the “IRC”) limits the income tax deduction by Tapestry for compensation paid to certain executive officers to $1 million per year. As a result of amendments to Section 162(m) as part of the Tax Cuts and Jobs
Impact of Accounting and Tax Treatment
| | 2024 PROXY STATEMENT | 57 |
Impact of Accounting and Tax Treatment
Acts of 2017, Tapestry is generally no longer able to take a deduction for any compensation paid to its current or former NEOs in excess of $1 million, with the exception of compensation pursuant to a binding written agreement in place on November 2, 2017, which can be exempt from the deduction limit if applicable requirements are met. Other provisions of the IRC can also affect compensation decisions. Section 409A of the IRC, which governs the form and timing of payment of deferred compensation, imposes a 20% additional tax and an interest penalty on the recipient of deferred compensation that does not comply with Section 409A. The HR Committee takes into account the potential implications of Section 409A in determining the form and timing of compensation awarded to our executives and intends to structure any non-qualified deferred compensation plans or arrangements to be exempt from or to comply with the requirements of Section 409A.
Impact of Accounting and Tax Treatment
| 58 | 2024 PROXY STATEMENT | |
Impact of Accounting and Tax Treatment
| | HUMAN RESOURCES COMMITTEE REPORT |
Impact of Accounting and Tax Treatment
The Human Resources Committee of the Board of Directors of Tapestry, Inc. (the “Human Resources Committee”), which performs the functions of a compensation committee, reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on our reviews and discussion with management, the Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the proxy statement for the Annual Meeting and incorporated by reference into our Annual Report on Form 10-K.
Impact of Accounting and Tax Treatment
| Human Resources Committee | | John P. Bilbrey, Chair | | Darrell Cavens | | Kevin Hourican* | | Pamela Lifford |
Impact of Accounting and Tax Treatment
*Mr. Hourican joined the Human Resources Committee effective February 29, 2024.
Impact of Accounting and Tax Treatment
| | 2024 PROXY STATEMENT | 59 |
Impact of Accounting and Tax Treatment
| | COMPENSATION RISK ASSESSMENT |
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 2024 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 | 2024 | 1,390,385 | — | 6,323,364 | 3,999,753 | 3,654,000 | 62,711 | 15,430,213 | | | 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 | | Scott Roe(7) Chief Financial Officer and Chief Operating Officer | 2024 | 965,385 | — | 2,371,288 | 1,499,903 | 1,590,469 | 78,033 | 6,505,078 | | | 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 | 0 | 2,122,875 | 47,066 | 4,444,959 | | Todd Kahn Chief Executive Officer and Brand President, Coach | 2024 | 990,385 | — | 1,896,988 | 1,199,925 | 1,875,000 | 62,467 | 6,024,765 | | | 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 | | Liz Fraser Chief Executive Officer and Brand President, Kate Spade | 2024 | 850,000 | — | 822,036 | 519,963 | 797,300 | 26,900 | 3,016,199 | | | 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 | | David Howard(8) General Counsel and Secretary | 2024 | 595,192 | — | 1,040,456 | 499,967 | 548,100 | 34,188 | 2,717,903 | | | 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 2024 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
| 70 | 2024 PROXY STATEMENT | |
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 June 29, 2024. The tables include amounts earned through June 29, 2024, 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 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 28, 2024 of $42.79 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 June 29, 2024. 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
| | 2024 PROXY STATEMENT | 71 |
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 TSR 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, 2023, and 2024. Because our TSR significantly outperformed the TSR of our industry index, 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, 2023, and 2024. While we are extremely pleased with our strong absolute and relative TSR performance over the last four 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 | FY 2024 | | Tapestry TSR | $100 | $339.92 | $252.06 | $361.01 | $374.51 | | S&P Composite 1500 Apparel, Accessories & Luxury Goods Index | $100 | $200.09 | $122.52 | $115.41 | 101.22 | | PEO Compensation Actually Paid - Zeitlin | | $4,088,619 | NA | NA | NA | | PEO Compensation Actually Paid - Crevoiserat | | $32,598,067 | $8,274,188 | $21,941,536 | $16,312,370 | | Avg non-PEO NEO Compensation Actually Paid | | $9,037,986 | $2,782,806 | $5,632,476 | $4,968,207 |
Pay versus Performance Relationship
| | 2024 PROXY STATEMENT | 77 |
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 2021, 2022, 2023 and 2024.
Pay versus Performance Relationship
| | FY 2021 | FY 2022 | FY 2023 | FY 2024 | | Net Income (in millions) | $834 | $856 | $936 | $816 | | PEO Compensation Actually Paid - Zeitlin | $4,088,619 | NA | NA | NA | | PEO Compensation Actually Paid - Crevoiserat | $32,598,067 | $8,274,188 | $21,941,536 | $16,312,370 | | Avg non-PEO NEO Compensation Actually Paid | $9,037,986 | $2,782,806 | $5,632,476 | $4,968,207 |
Pay versus Performance Relationship
| 78 | 2024 PROXY STATEMENT | |
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, 2023, and 2024.
Pay versus Performance Relationship
| | FY 2021 | FY 2022 | FY 2023 | FY 2024 | | Net Sales (in millions) | $5,746 | $6,685 | $6,661 | $6,671 | | PEO Compensation Actually Paid - Zeitlin | $4,088,619 | NA | NA | N/A | | PEO Compensation Actually Paid - Crevoiserat | $32,598,067 | $8,274,188 | $21,941,536 | $16,312,370 | | Avg non-PEO NEO Compensation Actually Paid | $9,037,986 | $2,782,806 | $5,632,476 | $4,968,207 |
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.