DEF 14A of Genesco Inc
Filed May 12, 2023 · FY20230001193125-23-142978
IMPORTANT
| | Page | | Director Compensation | 60 | | Proposal 2: Advisory Vote on Compensation of Named Executive Officers | 62 | | Proposal 3: Advisory Vote on the Frequency of Advisory Votes on Executive Compensation | 63 | | Proposal 4: Approval of the Genesco Inc. Amended and Restated 2020 Equity Incentive Plan | 64 | | Audit Matters | 77 | | Proposal 5: Ratification of Independent Registered Public Accounting Firm | 77 | | Proposals for the 2024 Annual Meeting | 81 | | Financial Statements Available | 82 | | Appendix A — Genesco Inc. Amended and Restated 2020 Equity Incentive Plan | A-1 |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Board currently has eleven directors, nine of which are standing for re-election at the meeting; Matthew C. Diamond and Kevin P. McDermott are not seeking re-election at the meeting. The nine directors standing for re-election at the meeting will hold office until the next annual meeting of shareholders and/or until their successors are elected and qualified. A majority of the votes cast by the shares entitled to vote in the election is required to elect a director. All the nominees are presently serving as directors, and all have agreed to serve if elected. All nominees other than Matthew M. Bilunas and Carolyn Bojanowski, who were appointed to the Board effective January 29, 2023, have previously been elected by the Company’s shareholders. The shares represented by valid proxies will be voted FOR the election of the following nominees, unless the proxies specify otherwise. If any nominee becomes unable or unwilling to serve prior to the Annual Meeting, the Board may reduce the number of directors comprising the Board, as permitted by the Company’s Second Amended and Restated Bylaws (the “Bylaws”), or the proxies will be voted for a substitute nominee recommended by the Board. The Board unanimously recommends that the shareholders vote FOR all of the director nominees.
Information Concerning Nominees
Information Concerning Nominees All the Company’s directors have demonstrated business acumen, the ability to exercise sound business judgment, and a commitment to serve the Company as directors. They also bring a variety of professional backgrounds and leadership experience that contribute to the effectiveness of the Board in fulfilling its responsibilities to the Company. Set forth below is biographical information about each director and a discussion of factors in his or her experience that the Board views as supporting his or her continued service on the Board. JOANNA BARSH, 70, Independent Consultant; Senior Partner Emeritus, McKinsey & Company. Ms. Barsh joined the Board in November 2013. She became a senior partner emeritus of McKinsey & Company, a global management consulting firm, in March 2013, after more than 30 years with that firm, where she had been a senior partner since 1994. She is the author of several books and an expert on leadership development, growth strategy, organization effectiveness and performance transformation. Ms. Barsh has counseled companies, organizations and governments around the world in the retail, consumer products, direct selling, private equity, and media sectors on strategic and operational issues. She is a strong advocate for women, serving on New York City’s Commission on Women’s Issues for over a decade and leading ground-breaking research for The Wall Street Journal’s Women in Econ Task Force and the U.S. Chamber of Commerce. She was a member of former Secretary Clinton’s International Council of Women Business Leaders, co-chairing its Leadership Working Group. The Board believes that Ms. Barsh’s expertise gained through more than three decades of helping management teams and boards identify market opportunities, chart and implement strategies, identify and execute business transformations and navigate industry transitions, as well as her extensive research on advancing women and people of color in the workplace, provide valuable insight to the Board and management. MATTHEW M. BILUNAS, 50, Executive Vice President, Chief Financial Officer Best Buy Co., Inc. Mr. Bilunas is an experienced retail veteran, currently serving as executive vice president, chief financial officer for Best Buy Co., Inc., a retailer of technology products, services and solutions in North America, since July 2019. His executive leadership responsibilities include strategic planning, FP&A, internal audit, accounting, investor relations, treasury, tax, financial services and procurement. In addition to his extensive global financial expertise, Mr. Bilunas is a seasoned operator and strategist, deeply knowledgeable about supply chain and e-commerce operations. From 2017 to 2019, he served as Best Buy’s senior vice president, enterprise and merchandise finance, a role where he served as the central finance leader. Mr. Bilunas spearheaded the company’s planning process as the enterprise FP&A leader. Mr. Bilunas has also played a vital role in positioning Best Buy as a mission driven company and an Environmental, Social and Governance leader. He began his career in public accounting at KPMG. Mr. Bilunas also serves as a board member for the Children’s Hospital of Minnesota. The Board believes that Mr. Bilunas’ experience as a chief financial officer and his expertise and knowledge of accounting, auditing, internal control over financial reporting and investor relations by publicly-traded companies are valuable to the Board and to the Company. CAROLYN BOJANOWSKI, 45, Executive Vice President Merchandising, Sephora USA, a division of LVMH Moët Hennessy Louis Vuitton SE. During her 18-year tenure at Sephora USA, a division of LVMH Moët Hennessy Louis Vuitton SE, where she has served as executive vice president merchandising since September 2022, Ms. Bojanowski has made transformative contributions in omni-channel retailing, e-commerce, merchandising, marketing, and brand and product development. She is currently a member of the company’s North American Operating Committee and is responsible for sales through all of Sephora’s channels, including Sephora stores, Sephora.com and Sephora inside Kohl’s. From June 2020 to September 2022, Ms. Bojanowski served as senior vice president, general manager e-commerce, from March 2020 to June 2020, she served as senior vice president, dotcom merchandising and gift cards and from January 2017 to March 2020, she served as vice president, Sephora.com merchandising. Ms. Bojanowski has led the company’s dotcom merchandising and marketing, and e-commerce delivery strategy, created new digital partnerships, introduced new payment methods, launched buy online pick up in store and same day delivery capabilities, and elevated the dotcom client experience in both the U.S. and Canada. A seasoned operator and accomplished strategist, Ms. Bojanowski has extensive experience working with more than 200 brands and driving growth and innovation at Sephora. The Board believes that Ms. Bojanowski’s experience in merchandising, marketing and brand development, as well as her experience in digital and e-commerce, is valuable to the Board and to the Company. JOHN F. LAMBROS, 57, Managing Director and Co-Head U.S. Technology Group, Head Global Digital Media & Entertainment, Houlihan Lokey. Mr. Lambros is managing director and co-head U.S. technology group, and head global digital media & entertainment at Houlihan Lokey. He previously served as president of GCA-U.S., a global investment bank, serving as the head of its digital media banking practice. He also served as a member of its board of directors and executive committee and serves as a member of the board of directors of GCA Corporation, its parent company (TYO: 2174). Mr. Lambros has been an active advisor to and operator in the digital media and emerging technology markets. As an investment banker, Mr. Lambros has led more than 250 public and private market financings, merger and acquisition transactions, recapitalizations, joint ventures and senior and subordinated debt financings. From 2000 to 2003, he was senior vice president of business development for Into Networks, a broadband technology company. From 1993 to 2000, Mr. Lambros was a banker at Morgan Stanley & Co., where he served as a vice president and member of the global communications group focused on advising emerging telecommunications, media and technology clients. The Board considers Mr. Lambros’ experience in corporate finance, digital media, emerging technology sectors, as well as his experience with strategic portfolio reviews, M&A, transaction matters and capital markets to be beneficial to Genesco’s Board. THURGOOD MARSHALL, JR., 66, Retired Partner, Morgan, Lewis & Bockius LLP. Mr. Marshall, who joined Genesco’s Board in 2012, was a partner in the Washington, D.C. office of the law firm of Morgan, Lewis & Bockius LLP until his retirement in September 2019. He serves on the board of EN+ Group (LSE:ENPL & MOEX:ENPG), a publicly traded multinational producer of hydropower and low-carbon aluminum. He also serves on the board of CoreCivic Inc. (NYSE: CXW), a publicly-traded, full-service corrections management and real estate solutions provider. He is a former board member of the Ethics Compliance and Certification Institute, the United States Postal Service and the Ford Foundation. Mr. Marshall works at the intersection of law, business, politics and policy. He has practiced law, held senior government appointments, and he serves on an array of corporate and non-profit boards.
Information Concerning Nominees
Mr. Marshall’s professional background includes service in all three branches of the federal government and in the private sector. Prior to joining a predecessor of Morgan, Lewis & Bockius LLP as a partner in 2001, he served in roles including Assistant to the President and Cabinet Secretary from 1997 to 2001, co-chair of the White House Olympic Task Force in connection with the 2002 Winter Olympics, director of legislative affairs and deputy counsel to the Vice President, counsel to the Senate Judiciary Committee, the Committee on Commerce, Science & Transportation, and the Governmental Affairs Committee, and as a judicial clerk to the Honorable Barrington D. Parker of the U.S. District Court for the District of Columbia. The Board believes that Mr. Marshall’s extensive experience in government service, insight into regulatory affairs, and his expertise in corporate governance and oversight, ethics and risk management and stakeholder relations gained through service as a director in for-profit, non-profit, and public sectors, bring unique and valuable perspective to Genesco. ANGEL R. MARTINEZ, 68, Retired Chief Executive Officer and Chairman of the Board of Directors, Deckers Brands. Mr. Martinez served as chief executive officer and president of Deckers Brands (formerly known as Deckers Outdoor Corporation) (NYSE: DECK), a footwear designer and distributor whose brands include UGG, Teva, Sanuk, Hoka and Koolaburra, from April 2005 until his retirement in June 2016, as executive chairman of the board from 2008 until June 2016, and as non-executive chairman of the board from June 2016 until September 2017. Prior to joining Deckers, Mr. Martinez was co-founder of Keen LLC, an outdoor footwear manufacturer, and served as its president, chief executive officer and vice chairman from April 2003 to March 2005. Prior thereto, he served as executive vice president and chief marketing officer of Reebok International Ltd. and as chief executive officer and president of The Rockport Company, a subsidiary of Reebok International Ltd. He currently serves on the board of directors and is a member of the audit committee of Korn Ferry (NYSE: KFY) and served on the board of directors and as a member of the compensation committee of Tupperware Brands Corporation (NYSE: TUP) from 1998 to 2020. The Board believes that Mr. Martinez’s 40 years of experience in the retail footwear industry and his operational and strategic knowledge, including his expertise in capital allocation, navigating and leading industry transitions and business transformation, and human capital management, gained through his experience as a leader and board member of other publicly-traded companies brings valuable insight to the Board and the Company. MARY E. MEIXELSPERGER, 62, Chief Financial Officer of Valvoline Inc. Mary E. Meixelsperger is chief financial officer of Valvoline Inc. (NYSE: VVV) and has served in that role since June 2016. Valvoline is a leading provider of automotive services and marketer and supplier of premium branded lubricants worldwide. Valvoline operates more than 1,600 quick-lube locations in North America. Prior to joining Valvoline Inc., Ms. Meixelsperger was senior vice president and chief financial officer of DSW Inc. (NYSE: DSW), now operating as Designer Brands Inc. (NYSE: DBI), one of North America’s largest designers, producers and retailers of footwear and accessories, from April 2014 to June 2016, and held the roles of chief financial officer, controller and treasurer at Shopko Stores from 2006 to 2014. Ms. Meixelsperger also served as a director of a wholly-owned subsidiary of Valvoline Inc. and served as a director of Valvoline Cummins Private Ltd., a joint venture between Valvoline Inc. and Cummins India from 2017 to 2020. She also serves as Vice Chairman of the board of United Way of the Bluegrass. Ms. Meixelsperger has over thirty years of experience in various aspects of finance, accounting, risk management, business development, strategic planning, and information technology, and has served in senior leadership roles at several companies, including shoe retailer, DSW, and automotive services company, Valvoline. The Board believes that Ms. Meixelsperger’s decades of experience as a chief financial officer, her expertise and knowledge of accounting, auditing, and internal control over financial reporting by publicly-traded companies, and her experience with omni-channel strategy and the specialty footwear retail industry will be valuable to the Board and to the Company. GREGORY A. SANDFORT, 68, Former Chief Executive Officer and Director, Tractor Supply Company. Gregory A. Sandfort served as chief executive officer of Tractor Supply Company (Nasdaq: TSCO) from May 2016 to January 2020 and as a member of the board of directors of Tractor Supply from February 2013 to May 2020. Following his retirement, he served as strategic advisor and consultant to Tractor Supply from January to August 2020. Mr. Sandfort served as president and chief executive officer of Tractor Supply from December 2012 to May 2016 and as president and chief operating officer of Tractor Supply from February 2012. Mr. Sandfort also previously served in the roles of president and chief merchandising officer and executive vice president – chief merchandising officer of Tractor Supply. Mr. Sandfort served as president and chief operating officer at Michaels Stores, Inc. from March 2006 to August 2007 and as executive vice president – general merchandise manager at Michaels Stores, Inc. from January 2004 to February 2006. Mr. Sandfort has also served as a director of WD-40 Company (Nasdaq: WDFC) since 2011 and as Chair of the Board of WD-40 Company since October 2020. He was also formerly a director of Kirkland’s, Inc. (Nasdaq: KIRK). With over 40 years of experience in the retail industry, Mr. Sandfort brings a wealth of knowledge regarding all facets of Genesco’s industry and retail, including merchandising, marketing, brand management, operations, strategic planning, human resource management and logistics. The Board considers his broad-based experience in the retail industry, his expertise in capital allocation and his understanding of customer dynamics and shifting consumer preferences and ability to leverage such understanding to successfully lead business transformations to be valuable to the Board and to the Company. MIMI E. VAUGHN, 57, Board Chair, President and Chief Executive Officer. Ms. Vaughn joined the Company in September 2003 as vice president of strategy and business development. She was named senior vice president, strategy and business development in October 2006, senior vice president of strategy and shared services in April 2009 and senior vice president – finance and chief financial officer in February 2015. In May 2019, Ms. Vaughn was named senior vice president and chief operating officer and continued to serve as senior vice president-finance and chief financial officer until her successor was appointed in June 2019. In October 2019, Ms. Vaughn was appointed to become president and chief executive officer of the Company on February 2, 2020 and was appointed as a director effective October 30, 2019. Prior to joining the Company, Ms. Vaughn was executive vice president of business development and marketing, and acting chief financial officer from 2000 to 2001, for Link2Gov Corporation in Nashville. From 1993 to 1999, she was a consultant at McKinsey & Company in Atlanta. Ms. Vaughn brings to the Board proven and critical experience and leadership developed by serving in multiple positions with the Company for more than 19 years. With her background in strategy and corporate finance, and her experience in the retail industry, the Board believes Ms. Vaughn is the appropriate person to lead the Company in executing its footwear focused strategy.
Anti-Hedging Policy for Directors and Officers
Anti-Hedging Policy for Directors and Officers The Board has adopted a policy prohibiting hedging against future declines in the market value of the Company’s securities by directors and officers of the Company. This policy prohibits directors and officers from directly or indirectly engaging in any hedging transaction that eliminates or limits economic risk with respect to the director’s or officer’s interest in the Company’s securities, including any compensation awards the value of which are derived from, referenced to or based on the value or market price of the Company’s securities. The policy reflects the Board’s judgment that hedging transactions decrease alignment between the interests of the officers and directors and those of the shareholders, undermining the objectives underlying stock-based compensation and the share ownership policy for officers and directors.
Fiscal 2023 Compensation Discussion
Fiscal 2023 Compensation Discussion 1. Compensation Mix. Genesco’s compensation programs for its senior management are designed to incorporate a significant element of pay for performance. For Fiscal 2023, the Company generally targeted base salaries at or below the median of its peer group, while providing upside potential through performance-based compensation, comprised of a combination of annual cash incentives (which incorporated a multi-year banking mechanism) linked to operating results and stock-based compensation. The graphs below illustrate, for the chief executive officer and for the other named executive officers as a group, the components of target total direct compensation (defined as base salary, target annual cash incentive award and the grant date market value of restricted shares granted under the 2020 Equity Incentive Plan) for Fiscal 2023:
Other Named Executive Officers (Group Average)
| (1) The base salary of Ms. Vaughn remains positioned below the market median and was increased in an effort to align it more closely with external benchmarks. |
Other Named Executive Officers (Group Average)
B. Annual Incentive Compensation. (i) Overview. Executive officers (other than the chief executive officer) participated in the EVA Plan in Fiscal 2023, which is designed to reward increasing earnings in an amount sufficient to provide a return on capital greater than the Company’s cost of capital. While the committee has determined to eliminate the banking features of the EVA plan beginning in Fiscal 2024, the committee believes that the EVA Plan, with its historical potential for positive and negative effects on compensation based on performance and the multi-year effects of its banking features, has adequately aligned pay and long-term performance. The committee has historically recommended that the Board award the chief executive officer’s annual bonus on the same basis as if the chief executive officer were a Corporate Total business unit participant in the EVA Plan, and the committee did so again in Fiscal 2023. Along with other executive compensation changes beginning in Fiscal 2024, the chief executive officer has been added as a participant under the New EVA Plan. The EVA Plan also incorporates a provision making a portion of each participant’s award contingent on the achievement of individual strategic goals to provide an incentive for strategic and operational objectives that may not be immediately reflected in the annual financial performance of the participant’s business unit. The compensation committee annually sets target bonus levels based on the Company’s peer group and survey comparisons of target bonuses as a percentage of base salary and target total cash compensation. The chief executive officer also provides input to the committee on target bonus levels for positions other than his or her own. (ii) Bonus Targets. The following table sets forth target bonuses as a percentage of base salary for the named executive officers for Fiscal 2023:
Other Named Executive Officers (Group Average)
| Named Executive Officer | Target Bonus as a Percentage of Base Salary | | Mimi E. Vaughn | 110% | | Thomas A. George | 70% | | Parag D. Desai | 75% | | Mario Gallione | 75% | | Danny Ewoldsen | 55% |
Other Named Executive Officers (Group Average)
The named executive officers’ target bonuses as a percentage of base salary (other than Mr. Ewoldsen who was not a named executive officer in Fiscal 2022) were unchanged from Fiscal 2022 except for Ms. Vaughn whose target bonus was increased from 106% to 110% and Mr. George who was a new participant in the EVA Plan for Fiscal 2023. (iii) Award Components. The named executive officers participating in the EVA Plan in Fiscal 2023 were eligible to receive a fraction or multiple of their target awards based on the factors described below. For Fiscal 2023, bonuses earned could be negative, potentially offsetting or entirely eliminating “banked” amounts carried over from prior years and, subject to the limitations described below, offsetting awards in future years. Participants were eligible to earn cash awards equal to the sum of (a) 75% of their bonus targets multiplied by a factor determined by changes in Economic Value Added (“EVA”) (the “EVA change factor”) for their respective business units or for the Company as a whole for the year, and (b) 25% of the targets multiplied by (i) the EVA change factor for their respective business units for the year and (ii) the percentage of achievement of individual strategic goals (discussed in greater detail below) agreed upon by the participant and the chief executive officer during the first quarter of the fiscal year. For Fiscal 2023, each participant’s business unit allocation was assigned by the chief executive officer, who also determined the weighting of the various business unit components for participants with responsibility for multiple units, and approved by the committee. Among the named executive officers participating in the EVA Plan in Fiscal 2023, Mr. George and Mr. Desai were assigned 100% to the Corporate Total business unit; Mr. Gallione was assigned 100% to the Journeys Group business unit; and Mr. Ewoldsen was assigned 100% to the Johnston & Murphy business unit. As noted above, Ms. Vaughn did not participate in the EVA Plan in Fiscal 2023. However, while Ms. Vaughn was not a participant in the EVA Plan in Fiscal 2023, the committee has historically awarded the chief executive officer’s bonus on the same basis as if the chief executive officer were assigned 100% to the Corporate Total business unit. See “Bonus Calculation Factors,” below, for additional information on the performance factors for each primary business unit and for the Company as a whole for Fiscal 2023. (iv) EVA Calculations. EVA for Fiscal 2023 was determined by subtracting from a business unit’s net operating profit after taxes (“NOPAT”) a charge of 10% of the average net assets (total assets minus non-interest bearing liabilities) employed to generate the profit. The 10% capital charge represented the Company’s estimate of its weighted average cost of debt and equity capital. The EVA Plan is designed to encourage efficient use of assets, since profit improvement that is less than 10% of the incremental net assets employed reduces the participant’s bonus. Incentive awards are determined by the amount of actual EVA change during the year relative to EVA change targets for the year. NOPAT and net assets employed for EVA Plan purposes are not necessarily the same as the corresponding accounting measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) for financial reporting purposes. The Company’s NOPAT for purposes of the EVA Plan in Fiscal 2023 was calculated by (a) adjusting reported earnings from operations upward by the following amounts which adjustments were approved at the beginning of the plan year:
Other Named Executive Officers (Group Average)
| • | $11.0 million related to the difference between recorded bonus expense under GAAP and a one-time target bonus; and |
Other Named Executive Officers (Group Average)
(v) Bonus Calculation Factors. The following table shows for each of the Company’s primary business units in Fiscal 2023: (a) the amount of EVA improvement required to earn a target bonus award, (b) the incremental EVA change required to earn each additional whole-number multiple of the target, (c) the EVA change for the business unit, and (d) the multiple of the target bonus actually earned. Fractional multiples are earned for incremental changes less than the full improvement interval shown in column (b). For Fiscal 2023, negative bonuses accrued to the extent that shortfalls from the target improvement (column (a)) exceeded the interval shown in column (b). See the discussion under the heading “Bonus Bank” below for the consequences of a negative bonus for Fiscal 2023.
Other Named Executive Officers (Group Average)
Each business unit’s target for EVA improvement (shown in column (a), above) is determined in advance by allocating the Company’s total expected EVA improvement among all its business units. Typically every three years, with the assistance of an outside advisor, the Company calculates the amount of EVA improvement which it believes is “expected” by the market from the amount by which its current market value exceeds the capitalized value of current EVA plus invested capital — in other words, the amount of value associated with the Company’s future growth. Target EVA improvement is the amount of improvement required to give investors a cost of capital return on this future growth value, and thus on the market value of their investment. The incremental improvement interval (shown in column (b), above), is both the amount of additional EVA improvement above the amount in column (a) that is required to earn a bonus of two times the participant’s target and also the amount of shortfall from the column (a) target that will result in a zero bonus. The calibration of the intervals shown in column (b) reflects an effort to give the business units appropriate shares of above-target EVA improvement for a given bonus pool based primarily on unit size with adjustments designed to achieve a similar likelihood of multi-year zero bonuses among all units. (vi) Individual Strategic Objectives. As noted above, the payment of 25% of each participant’s annual incentive award for EVA improvement is contingent on the participant’s achievement of individual strategic goals agreed upon in advance with the participant’s supervisor. Not achieving all individual strategic goals for a given fiscal year can reduce an EVA Plan award that is otherwise payable, but performance meeting or exceeding these strategic goals cannot serve to increase the amount of any such award. Individual strategic goals for the named executive officers typically involve initiatives that the executive officers consider important to the long-term prospects of the participants’ business units, but that may not be adequately rewarded by the portion of the bonus calculated on current financial performance. Examples could include retail divisions’ opening a targeted number of new retail stores on schedule, implementation of an operational improvement or cost reduction program, or a business unit’s launch of a new retail concept or product line. No individual strategic goal was material to any named executive officer’s compensation or to any component of it in Fiscal 2023. The participant’s supervisor, generally in consultation with the participant, determines whether and to what extent the participant’s individual strategic goals have been met. Certain strategic goals are quantitative, allowing an objective determination of the extent to which they are achieved, while others are more qualitative in nature, requiring a subjective determination of achievement. The EVA Plan permits full credit for strategic goals if they have been at least 95% achieved. No portion of the award for achievement of individual strategic goals is ordinarily to be paid unless some portion of the applicable award for operating results is earned, although the EVA Plan authorizes the committee to consider exceptions for extraordinary strategic successes upon the recommendation of the chief executive officer. No exceptions of this nature have ever been made. (vii) Bonus Bank. For Fiscal 2023 the EVA Plan included a “bonus bank” feature. Awards for EVA results in excess of target are uncapped and “negative awards” for results less than target are possible and also uncapped. For Fiscal 2023, (i) two-thirds of any award in excess of three times the target bonus and (ii) any negative award is credited to the participant’s account in the bonus bank, and positive bank balances are payable in future years only subject to performance in those years. For the Fiscal 2023 EVA Plan year, a participant will receive a payout equal to (i) the current year’s award, up to three times the target, plus (ii) one-third of any amount in excess of three times the target in the current year, and (iii) the installments of banked awards from previous years, if any, that are payable in the current year. Positive bank balances from each year are paid out in three equal annual installments, subject to current-year performance in each of the three subsequent years. If the current year’s award is negative, any positive balance in the participant’s bank is applied against it, reducing or entirely eliminating the positive balance, depending upon the magnitude of the negative award for the current year. Any positive balance is forfeited if the participant is terminated for “cause” (as defined in the EVA Plan). For Fiscal 2023, if the participant voluntarily resigns from employment with the Company, any positive bank balance does not become payable until the end of the fifth fiscal year following the participant’s resignation and is subject to reduction or elimination in the meantime based upon the performance of the business unit or units to which the participant was assigned when he or she resigned. For Fiscal 2023, if the participant’s bonus bank balance from prior years is negative, 50% of any positive award in excess of two times the target in a subsequent year will be applied toward “repaying” the negative balance and 50% will be paid out to the participant (up to the generally applicable limit of three times the target plus one-third of any amount in excess of three times the target in the current year). Any negative balance from a single year will be canceled to the extent not repaid after three subsequent years. Including Fiscal 2023 accruals, bonus bank balances for the named executive officers are as follows:
Other Named Executive Officers (Group Average)
Bonuses reported in column (g) of the Summary Compensation Table below are cash bonuses actually payable for the years indicated, reflecting, where applicable, reductions of amounts otherwise payable by the recapture of previously accrued negative balances pursuant to the “banking” feature of the EVA Plan and positive bank balances held back in prior years that became payable for the year indicated because of performance in that year. C. Stock-Based Compensation. Grants of restricted stock to executive officers and other key employees of the Company including the named executive officers are intended to provide them with an incentive to make decisions that are in the long-term best interests of the Company and to balance the shorter-term annual cash incentive component of executive compensation. Stock-based compensation is also intended to align the financial interests of management with those of the Company’s shareholders, since the value of a share of restricted stock is dependent upon the Company’s performance and the recognition of that performance in the market for the Company’s stock. The grant date fair value of restricted shares granted in June 2022 for each named executive officer is as follows:
Other Named Executive Officers (Group Average)
| (2) Ms. Vaughn’s stock-based compensation was increased in an effort to align it more closely with external benchmarks. |
Other Named Executive Officers (Group Average)
Stock-based incentive awards in the form of restricted stock are typically granted to executive officers and other key employees once annually. The committee does not award stock-based incentive grants in relation to the Company’s release of material information. From 2009 until 2022, with the one-time exception of the 2021 grants which were made on July 1, 2021 due to the timing of the 2021 annual meeting, stock-based incentive grants have typically been awarded in June. The committee has also occasionally made grants to newly-hired key employees at its next meeting after their employment commenced, and Mr. George was made a one-time grant in October 2021 for service through March 2024 in connection with his promotion to senior vice president — finance and chief financial officer. Since 2008, except for a one-time, promotion-based option grant to Ms. Vaughn in Fiscal 2021, the committee has awarded equity compensation in the form of restricted stock, in part to offset the multi-year and leveraged nature of the EVA program. The restricted stock is subject to forfeiture upon termination of the grantee’s employment prior to vesting, which, for the Company’s annual award grants, occurs in four equal annual increments with respect to all currently outstanding grants to executive officers other than grants made in April 2023 and special grants of restricted stock to the named executive officers (other than Mr. Ewoldsen) made in March of 2022 with respect to Fiscal 2022 compensation which awards vest two-thirds on the first anniversary of the grant date and one-third on the second anniversary of the grant date, subject to continued employment. The Company’s officers are subject to share ownership guidelines. See “Security Ownership of Officers, Directors and Principal Shareholders — Director and Executive Officer Ownership Guidelines.” 4. OtherCompensation. A. Change of Control Arrangements, Severance Plan and Arrangements with Mr. George. (i) Change of Control Arrangements and Severance Plan. All the named executive officers other than Mr. George are parties to employment protection agreements, which become effective only in the event of a change of control (as defined in the agreements). Each agreement provides for employment by the Company for a term of up to three years following a change of control. In the event that the executive’s employment is terminated under certain circumstances during the contractual employment period after a change of control, the executive is entitled to a lump sum payment and the continuation of certain benefits, as described below under the heading “Change of Control Arrangements and Severance Plan.” Additionally, awards made by the Company under the Second Amended and Restated 2009 Equity Incentive Plan and the 2020 Equity Incentive Plan become immediately vested and exercisable upon a “change of control” unless the award is assumed by the acquirer or new rights meeting certain conditions are substituted therefor. The Company maintains a Severance Plan for monthly-paid salaried employees to provide for certain benefits to covered employees (including the named executive officers) in the event of a Company-initiated separation from the Company other than for cause (as defined in the Severance Plan). Under the terms of the Severance Plan, an eligible employee is entitled to one week of base salary at the termination date multiplied by each year of service with the Company with a maximum of 24 weeks and a minimum of two weeks. The Severance Plan is discussed in further detail under the heading “Change of Control Arrangements and Severance Plan.” The Company believes that reasonable severance and change of control benefits are necessary in order to recruit and retain effective senior managers. These severance benefits reflect the fact that it may be difficult for such executives to find comparable employment within a short period of time and are a product of a recruiting environment within our industry that has historically been competitive. The Company also believes that a change of control arrangement will provide an executive security that will likely reduce the reluctance of an executive to pursue a change of control transaction that could be in the best interests of shareholders. (ii) Arrangements with Mr. George. In connection with Mr. George’s promotion to senior vice president — finance and chief financial officer, beginning January 30, 2022, Mr. George will continue to receive an annual base salary of $500,000 and is entitled to receive a target incentive award for fiscal years 2023 and 2024 under the EVA Plan and the New EVA Plan, respectively, equal to 70% of his base salary (the “EVA Incentive Award”). If Mr. George’s employment is involuntarily terminated without cause prior to the filing of the 2024 annual report on Form 10-K, he is entitled to payment of a pro rata portion of the EVA Incentive Award for full months of service based on the Company’s full-year actual performance provided that he has been employed for at least 120 days during the plan year. If Mr. George’s employment continues through March 2024, any positive bonus bank balance will be paid to him six months thereafter. In October 2021, Mr. George received a grant of restricted stock under the 2020 Equity Incentive Plan with a grant date fair value equal to $1,480,000 (which is intended to cover his full two-year employment period through March 2024). The award vests 25% on the first anniversary of the grant date, 25% on the second anniversary of the grant date and 50% at the end of the employment period in March 2024. Like other awards under the 2020 Equity Incentive Plan, the award is subject to the 2020 Equity Incentive Plan’s “change of control” provisions. The Company has also agreed to provide to Mr. George certain severance and change of control arrangements. In the event of Mr. George’s involuntary termination without cause within the first 18 months following April 1, 2022, Mr. George will receive salary on a monthly basis for the remainder of such period. Upon Mr. George’s death, disability or involuntary termination without cause, vesting of any unvested portion of the restricted stock grant will be accelerated. Upon voluntary termination or termination with cause, any unvested awards will be forfeited. Mr. George will also be paid a $15,000 lump sum stipend per quarter in each quarter beginning January 1, 2022 until termination of employment in lieu of relocation assistance. B. Defined Contribution and Deferred Income Plans. (i) Defined Contribution Plan. The Company also offers to all employees (including the named executive officers) a voluntary defined contribution plan (the “401(k) Plan”) designed to comply with Section 401(k) of the Internal Revenue Code. Participants in the 401(k) Plan (including all the named executive officers) may defer a percentage of their qualifying pre-tax compensation for each year. Beginning with calendar year 2006, the Company has made a matching contribution equal to 100% of deferrals up to 3% of compensation (limited to $250,000) plus 50% of the next 2% of compensation (similarly limited) deferred. Matching contribution amounts for each named executive officer for Fiscal 2023 are included in column (i) of the “Summary Compensation Table,” below. Deferrals and matching contributions to the defined contribution plan may be invested in any of a number of mutual fund investments and in a guaranteed income option. Participants may also self-direct their investments, subject to certain restrictions.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The table below summarizes the total compensation earned by each of the named executive officers for Fiscal 2023, Fiscal 2022 and Fiscal 2021.
SUMMARY COMPENSATION TABLE
| | Fiscal Year (b) | Salary ($) (c)(1) | Bonus ($) (d) | Stock Awards ($) (e)(3) | Option Awards ($) (f) | Non-Equity Incentive Plan Compensation ($) (g)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h) | All Other Compensation ($) (i)(5) | Total ($) (j) | | Mimi E. Vaughn | 2023 | 999,500 | -0- | 2,674,267 | -0- | -0- | -0- | 37,448 | 3,711,215 | | Chair of the Board, President and | 2022 | 865,000 | -0- | 5,113,804 | -0- | 2,751,000 | -0- | 36,654 | 8,766,458 | | Chief Executive Officer | 2021 | 609,875 | 50,000 | 1,596,519 | 500,000 | -0- | -0- | 40,403 | 2,796,797 | | Thomas A. George(2) | 2023 | 500,000 | -0- | -0- | -0- | -0- | -0- | 81,536 | 581,536 | | Senior Vice President-Finance and | 2022 | 500,000 | 125,000 | 1,478,455 | -0- | 500,000 | -0- | 12,352 | 2,615,807 | | Chief Financial Officer | 2021 | 85,318 | -0- | -0- | -0- | -0- | -0- | 1,667 | 86,985 | | Parag D. Desai | 2023 | 417,000 | -0- | 487,434 | -0- | -0- | -0- | 16,649 | 921,083 | | Senior Vice President Chief Strategy and | 2022 | 405,500 | -0- | 1,552,118 | -0- | 912,375 | -0- | 15,019 | 2,885,012 | | Digital Officer | 2021 | 290,947 | 50,000 | 488,381 | -0- | -0- | -0- | 19,703 | 849,031 | | Mario Gallione | 2023 | 510,000 | -0- | 596,212 | -0- | -0- | -0- | 30,858 | 1,137,070 | | Senior Vice President | 2022 | 491,683 | -0- | 1,724,895 | -0- | 1,106,283 | -0- | 38,585 | 3,361,446 | | and President of the Journeys Group | 2021 | 347,407 | 50,000 | 580,595 | -0- | -0- | -0- | 33,085 | 1,011,087 | | Danny Ewoldsen | 2023 | 355,000 | -0- | 331,976 | -0- | 410,025 | -0- | 30,263 | 1,127,264 | | Senior Vice President and President of the | | | | | | | | | | | Johnston & Murphy Group | | | | | | | | | |
SUMMARY COMPENSATION TABLE
| (1) The amounts in column (c) include salary voluntarily deferred in the Defined Contribution Plan and the Deferred Income Plan described under the heading “Other Compensation — Defined Contribution and Deferred Income Plans” in the “Compensation Discussion and Analysis” section, above, in the following amounts: |
SUMMARY COMPENSATION TABLE
| | Amount Deferred ($) | | | | Name | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | | Mimi E. Vaughn | 27,563 | 26,063 | 17,812 | | Thomas A. George | 27,000 | 26,063 | 2,500 | | Parag D. Desai | 20,548 | 19,162 | 6,083 | | Mario Gallione | 2,722 | 27,245 | 12,320 | | Danny Ewoldsen | 27,066 | N/A | N/A |
SUMMARY COMPENSATION TABLE
| (2) Mr. George began employment with the Company as a financial advisor on November 30, 2020. Effective December 14, 2020, Mr. George was named interim chief financial officer. Effective October 21, 2021, Mr. George was named as permanent senior vice president – finance and chief financial officer. See “Other Compensation — Change of Control Arrangements, Severance Plan and Arrangements with Mr. George” in the “Compensation Discussion and Analysis” section above for a description of Mr. George’s compensation arrangement with the Company. |
SUMMARY COMPENSATION TABLE
| (3) The amounts in column (e) represent the aggregate grant date fair value of restricted stock awards, calculated in accordance with ASC Topic 718 “Compensation — Stock Compensation” (“ASC 718”) by multiplying the closing price of the Company’s common stock on the NYSE on the grant date by the number of shares granted. |
SUMMARY COMPENSATION TABLE
| (4) The amounts in column (g) are cash awards under the Company’s EVA Plan, discussed in greater detail under the headings “Elements of Direct Compensation — Annual Incentive Compensation” in the “Compensation Discussion and Analysis” section, above. They include amounts voluntarily deferred by the named executive officers in the Company’s 401(k) Plan and Deferred Income Plan, discussed under the heading “Other Compensation — Defined Contribution and Deferred Income Plans” in the “Compensation Discussion and Analysis” section, above. Of the amounts reported in column (g), the named executive officers elected to defer the following amounts in the 401(k) Plan and/or the Deferred Income Plan: |
SUMMARY COMPENSATION TABLE
| | Amount Deferred ($) | | | | Name | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | | Mimi E. Vaughn | N/A | 9,031 | -0- | | Thomas A. George | N/A | N/A | N/A | | Parag D. Desai | N/A | -0- | -0- | | Mario Gallione | N/A | -0- | -0- | | Danny Ewoldsen | 7,100 | — | — |
SUMMARY COMPENSATION TABLE
For the Fiscal 2023 EVA Plan year, a participant will receive a payout equal to (i) the current year’s award, up to three times the target, plus (ii) one-third of any amount in excess of three times the target in the current year, and (iii) the installments of banked awards from previous years, if any, that are payable in the current year. See “Compensation Discussion and Analysis — Elements of Direct Compensation — Annual Incentive Compensation — Bonus Bank.” Bonuses reported in column (g) of the Summary Compensation Table are bonuses actually payable for the years indicated, reflecting, where applicable, reductions of amounts otherwise payable by the recapture of previously accrued negative balances pursuant to the “banking” feature of the EVA Plan and positive bank balances held back in prior years that became payable for the year indicated because of performance in that year. For Fiscal 2023, the following amounts were applied to negative bank balances:
SUMMARY COMPENSATION TABLE
| Mimi E. Vaughn | $-0- | | Thomas A. George | $-0- | | Parag D. Desai | $-0- | | Mario Gallione | $-0- | | Danny Ewoldsen | $179,630 |
SUMMARY COMPENSATION TABLE
For each of the named executive officers, no amounts attributable to prior-year positive “bank” balances became payable based on Fiscal 2023 performance.
SUMMARY COMPENSATION TABLE
| (5) The amounts in column (i) for Fiscal 2023 include, for the following amounts: |
SUMMARY COMPENSATION TABLE
| Name | Matching Contributions (13-a) ($) | Life Insurance Premiums (13-b) ($) | Personal Benefits (13-c) ($) | Total All Other Compensation ($) | | Mimi E. Vaughn | 9,626 | 240 | 27,582 | 37,448 | | Thomas A. George | 12,200 | 240 | 69,096 | 81,536 | | Parag D. Desai | 12,238 | 240 | 4,171 | 16,649 | | Mario Gallione | 2,226 | 240 | 28,392 | 30,858 | | Danny Ewoldsen | 12,233 | 240 | 17,790 | 30,263 |
SUMMARY COMPENSATION TABLE
| (13-a) | Matching contributions paid under the Company’s 401(k) plan to each of the named executive officers. |
SUMMARY COMPENSATION TABLE
| (13-b) | Life insurance premium paid by the Company for the benefit of the named executive officers with a death benefit equal to their base salary up to $500,000. |
SUMMARY COMPENSATION TABLE
| (13-c) | Includes (i) for each named executive officer, (a) an employee discount on merchandise sold by the Company that is available to all employees and (b) the Company’s contribution to the named executive officer’s health and dental benefits, as applicable; (ii) stipend payments to Mr. George of $60,000 in lieu of relocation assistance; and (iii) payments of $13,945 to each of Ms. Vaughn and Messrs. Gallione and Ewoldsen pursuant to the STEP Up Plan as described under the heading “Other Compensation — Defined Contribution and Deferred Income Plans” in the “Compensation Discussion and Analysis” section above. |
GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2023
GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2023 The following table shows, for each of the named executive officers, information regarding his or her target award under the Company’s EVA Plan for Fiscal 2023 and grants of restricted stock under the 2020 Equity Incentive Plan in Fiscal 2023.
GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2023
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (f)(2) | Grant Date Fair Value of Stock and Option Awards (i) | | Name (a) | Grant Date (b) | Threshold ($) (c) | Target ($) (d)(1) | Maximum ($) (e) | | | | Mimi E. Vaughn | N/A | | $1,100,000 | | — | — | | | March 24, 2022(3) | — | — | — | 38,722 | $2,644,325 | | | June 28, 2022 | — | — | — | 49,268 | $2,674,267 | | Thomas A. George | N/A | | $350,000 | | — | — | | Parag D. Desai | N/A | | $312,750 | | — | — | | | March 24, 2022(3) | — | — | — | 12,425 | $848,503 | | | June 28, 2022 | — | — | — | 8,980 | $487,434 | | Mario Gallione | N/A | | $382,500 | | — | — | | | March 24, 2022(3) | — | — | — | 15,238 | $1,040,603 | | | June 28, 2022 | — | — | — | 10,984 | $596,212 | | Danny Ewoldsen | N/A | | $195,250 | | — | — | | | June 28, 2022 | — | — | — | 6,116 | $331,976 |
GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2023
| (1) Columns (c), (d) and (e) relate to the EVA Plan. As discussed in detail under the heading “Annual Incentive Compensation” in the “Compensation Discussion and Analysis,” for Fiscal 2023 potential awards are uncapped (although prior to changes in the EVA Plan effective in Fiscal 2024 in connection with the New EVA Plan, any award in excess of three and one-third times the target would have been mandatorily deferred and at risk for future performance) and negative awards that may be offset against positive bonus bank balances deferred from past years and from future positive awards are possible. Consequently, no “threshold” (column (c)) or “maximum” (column (e)) is applicable. |
GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2023
| (2) Column (f) reflects awards of restricted stock under the 2020 Equity Incentive Plan, the grant date fair values of which were calculated in accordance with ASC 718 by multiplying the closing price of the Company’s common stock on the NYSE on the grant date by the number of shares granted. The awards of restricted stock granted on March 24, 2022 vest two-thirds on the first anniversary of the grant date and one-third on the second anniversary of the grant date, subject to continued employment. The awards of restricted stock granted on June 28, 2022 vest in four equal annual increments, subject to continued employment. |
GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2023
| (3) The grants made on March 24, 2022, relate to compensation earned with respect to Fiscal 2022 but not granted until Fiscal 2023. The grant date fair value of such awards is reported under the heading “Stock Awards” for Fiscal 2022 in the Summary Compensation Table. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END The following table shows, for each named executive officer, certain information concerning vested and unvested equity awards outstanding at January 28, 2023. The awards include restricted stock and stock options, as described under the heading “Stock-Based Compensation” in the “Compensation Discussion and Analysis,” above.
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| | Option Awards | | | | Stock Awards | | | Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b)(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Option Exercise Price ($) (d) | Option Expiration Date (e) | Number of Shares or Units of Stock That Have Not Vested (#) (f)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (g)(3) | | Mimi E. Vaughn | 13,310 | 13,310 | $41.41 | 02/05/2030 | 163,307 | 7,799,542 | | Thomas A. George | -0- | -0- | N/A | N/A | 18,702 | 893,208 | | Parag D. Desai | -0- | -0- | N/A | N/A | 44,908 | 2,144,806 | | Mario Gallione | -0- | -0- | N/A | N/A | 52,260 | 2,495,938 | | Danny Ewoldsen | -0- | -0- | N/A | N/A | 20,701 | 988,680 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| (1) Ms. Vaughn’s stock option award vests in four equal installments on each of February 5, 2021, 2022, 2023 and 2024. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| (2) The shares of restricted stock vest on the following schedule: |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| Name | Grant Date | Restricted Shares Outstanding | Vesting Increments | | Mimi E. Vaughn | 6/28/2019 | 5,876 | 5,876 on 6/28/2023 | | | 6/28/2020 | 40,686 | 20,343 on 6/28/2023 | | | | | 20,343 on 6/28/2024 | | | 7/1/2021 | 28,755 | 9,585 on 7/1/2023 | | | | | 9,585 on 7/1/2024 | | | | | 9,585 on 7/1/2025 | | | 3/24/2022 | 38,722 | 25,815 on 3/24/2023 | | | | | 12,907 on 3/24/2024 | | | 6/28/2022 | 49,268 | 12,317 on 6/28/2023 | | | | | 12,317 on 6/28/2024 | | | | | 12,317 on 6/28/2025 | | | | | 12,317 on 6/28/2026 | | Thomas A. George | 10/20/2021 | 18,702 | 6,234 on 10/20/2023 | | | | | 12,468 on 3/31/2024 | | Parag D. Desai | 6/28/2019 | 2,864 | 2,864 on 6/28/2023 | | | 6/28/2020 | 12,446 | 6,223 on 6/28/2023 | | | | | 6,223 on 6/28/2024 | | | 7/1/2021 | 8,193 | 2,731 on 7/1/2023 | | | | | 2,731 on 7/1/2024 | | | | | 2,731 on 7/1/2025 | | | 3/24/2022 | 12,425 | 8,283 on 3/24/2023 | | | | | 4,142 on 3/24/2024 | | | 6/28/2022 | 8,980 | 2,245 on 6/28/2023 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| Name | Grant Date | Restricted Shares Outstanding | Vesting Increments | | | | | 2,245 on 6/28/2024 | | | | | 2,245 on 6/28/2025 | | | | | 2,245 on 6/28/2026 | | Mario Gallione | 6/28/2019 | 3,274 | 3,274 on 6/28/2023 | | | 6/28/2020 | 14,796 | 7,398 on 6/28/2023 | | | | | 7,398 on 6/28/2024 | | | 7/1/2021 | 7,968 | 2,656 on 7/1/2023 | | | | | 2,656 on 7/1/2024 | | | | | 2,656 on 7/1/2025 | | | 3/24/2022 | 15,238 | 10,159 on 3/24/2023 | | | | | 5,079 on 3/24/2024 | | | 6/28/2022 | 10,984 | 2,746 on 6/28/2023 | | | | | 2,746 on 6/28/2024 | | | | | 2,746 on 6/28/2025 | | | | | 2,746 on 6/28/2026 | | Danny Ewoldsen | 6/28/2019 | 1,640 | 1,640 on 6/28/2023 | | | 6/28/2020 | 8,472 | 4,236 on 6/28/2023 | | | | | 4,236 on 6/28/2024 | | | 7/21/2021 | 4,473 | 1,491 on 7/1/2023 | | | | | 1,491 on 7/1/2024 | | | | | 1,491 on 7/1/2025 | | | 6/28/2022 | 6,116 | 1,529 on 6/28/2023 | | | | | 1,529 on 6/28/2024 | | | | | 1,529 on 6/28/2025 | | | | | 1,529 on 6/28/2026 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| (3) Market value is calculated based on the closing price of the Company’s common stock on the NYSE on January 27, 2023 ($47.76), the last trading day prior to the end of Fiscal 2023 on January 28, 2023. |
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023 The following table shows, for each named executive officer, certain information about his or her shares of restricted stock that vested during Fiscal 2023:
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | | Mimi E. Vaughn | 40,109 | 2,198,374 | | Thomas A. George | 6,234 | 260,519 | | Parag D. Desai | 14,536 | 796,718 | | Mario Gallione | 16,247 | 890,498 | | Danny Ewoldsen | 8,363 | 458,376 |
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
| (1) Amounts reflect gross shares vested which excludes shares withheld for taxes. |
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
| (2) Amounts reflect the product of the closing price of the Company’s common stock on the NYSE on the last trading day before the vesting date ($54.81 for all named executive officers other than Mr. George, and $41.79 for Mr. George) multiplied by the number of shares vested. |
NON-QUALIFIED DEFERRED COMPENSATION
NON-QUALIFIED DEFERRED COMPENSATION The following table shows, for each named executive officer, his or her contributions to and investment earnings on balances in the Company’s Deferred Income Plan, described under the heading “Deferred Income Plan” in the “Defined Compensation and Deferred Income Plans” section of the “Compensation Discussion and Analysis,” above. Earnings on plan balances are from investments selected by the participants, which may not include Company securities.
NON-QUALIFIED DEFERRED COMPENSATION
| Name (a) | Executive Contributions in Last FY ($) (b)(1) | Registrant Contributions in Last FY ($) (c) | Aggregate Earnings in Last FY ($) (d)(2) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f)(3) | | Mimi E. Vaughn | -0- | -0- | (1,984) | -0- | 134,904 | | Thomas A. George | N/A | N/A | N/A | N/A | N/A | | Parag D. Desai | -0- | -0- | -0- | -0- | -0- | | Mario Gallione | -0- | -0- | (2,300) | -0- | 33,378 | | Danny Ewoldsen | -0- | -0- | (4,770) | -0- | 52,999 |
NON-QUALIFIED DEFERRED COMPENSATION
| (1) All amounts reported in column (b) are included in the salary reported for each named executive officer in column (c) of the Summary Compensation Table for Fiscal 2023. |
NON-QUALIFIED DEFERRED COMPENSATION
| (2) Because no named executive officer’s deferred compensation earnings for Fiscal 2023 constituted above-market interest under the disclosure requirements applicable to the Summary Compensation Table, above, none of the amounts reported in column (d) are reflected in column (h) of the Summary Compensation Table. |
NON-QUALIFIED DEFERRED COMPENSATION
| (3) The amount reported in column (f) includes, for each named executive officer, the following amount reported as compensation in the Summary Compensation Table for each of the three fiscal years in the Summary Compensation Table. |
NON-QUALIFIED DEFERRED COMPENSATION
| | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | | Mimi E. Vaughn | -0- | -0- | -0- | | Thomas A. George | N/A | N/A | N/A | | Parag D. Desai | -0- | -0- | -0- | | Mario Gallione | -0- | -0- | -0- | | Danny Ewoldsen | -0- | N/A | N/A |
Summary of Potential Payments Upon Change of Control or Termination
Summary of Potential Payments Upon Change of Control or Termination The following table shows for each of the named executive officers, assuming that a Change of Control, followed by immediate involuntary termination of his or her employment (other than for Cause) or by a voluntary termination by the named executive officer for Good Reason, occurred on January 28, 2023, the estimated amounts payable with respect to (a) salary, (b) bonus, (c) the value, based on the closing price of the Company’s stock on the NYSE on January 27, 2023 (the last trading day of the fiscal year) of all previously unvested restricted stock and stock options subject to accelerated vesting, (d) the estimated value of the payment related to benefits provided under the Employment Protection Agreement, (e) the non-qualified deferred compensation (which would be paid upon termination for any reason regardless of whether a Change of Control has occurred, under the terms of the Deferred Income Plan), (f) for named executive officers who entered into Employment Protection Agreements prior to Fiscal 2020, the gross-up related to excise taxes that would have been reimbursable to the named executive officer (assuming a 37.0% marginal federal income tax rate), and (g) the total of items (a) through (f). With respect to each named executive officer, the actual awards and amounts payable can only be determined at the time of each named executive officer’s termination of employment.
Summary of Potential Payments Upon Change of Control or Termination
| Name | Cash Severance (a) ($) | Bonus (b)(1) ($) | Accelerated Stock-Based Compensation (c)(2) ($) | Estimated Benefits Value (d)(3) ($) | Deferred Compensation Payout (e) ($) | Tax Gross-Up (f)(4) ($) | Total (g) ($) | | Mimi E. Vaughn | 1,999,000 | 7,037,526 | 7,221,551 | 240,943 | -0- | 6,733,776 | 23,232,796 | | Tom George (5) | 333,333 | -0- | 893,208 | -0- | -0- | -0- | 1,226,541 | | Parag D. Desai | 834,000 | 2,287,823 | 1,551,388 | 101,231 | -0- | 1,691,873 | 6,466,315 | | Mario Gallione | 1,020,000 | 2,793,130 | 1,768,171 | 146,867 | -0- | 2,048,714 | 7,776,882 | | Danny Ewoldsen | 710,000 | 781,000 | 988,680 | 101,393 | -0- | 924,682 | 3,505,755 |
Summary of Potential Payments Upon Change of Control or Termination
| (1) Two times the average of the last two annual bonuses earned by the named executive officer. |
Summary of Potential Payments Upon Change of Control or Termination
| (2) The value, based on the closing price of the Company’s common stock on the NYSE on January 27, 2023, of the previously unvested restricted stock and stock options that would have vested on an accelerated basis upon the Change of Control. |
Summary of Potential Payments Upon Change of Control or Termination
| (3) Includes the present value, calculated using the annual federal short-term rate as determined under Section 1274(d) of the Internal Revenue Code of (a) the annual cost to the Company of obtaining coverage under the welfare benefit plans discussed above and (b) the annualized value of fringe benefits provided to the named executive officer immediately prior to January 28, 2023. |
Summary of Potential Payments Upon Change of Control or Termination
| (4) Employment Protection Agreements entered into prior to Fiscal 2020 provide for the reimbursement of the excise tax payable on the Change of Control payment plus income taxes payable on the reimbursement. Beginning in Fiscal 2020, this provision was eliminated from the form of Employment Protection Agreement. |
Summary of Potential Payments Upon Change of Control or Termination
| (5) Mr. George is not a party to an Employment Protection Agreement but is entitled to this compensation in connection with an involuntary termination without cause. |
Summary of Potential Payments Upon Change of Control or Termination
The following table shows, for each of the named executive officers, assuming that a Change of Control, followed by immediate termination of his or her employment because of death or disability, occurred on January 28, 2023, the estimated amounts payable with respect to (a) salary, (b) bonus, (c) the value, based on the closing price of the Company’s common stock on the NYSE on January 27, 2023 (the last trading day of the fiscal year), of all previously unvested restricted stock and stock options subject to accelerated vesting, (d) non-qualified deferred compensation, and (e) the total of items (a) through (d):
Summary of Potential Payments Upon Change of Control or Termination
| Name | Cash Severance (a)(1) ($) | Bonus (b)(2) ($) | Accelerated Stock-Based Compensation (c)(3) ($) | Deferred Compensation Payout (d) ($) | Total (e) ($) | | Mimi E. Vaughn | -0- | 3,518,763 | 2,685,918 | -0- | 6,204,681 | | Tom George | -0- | -0- | 74,434 | -0- | 74,434 | | Parag D. Desai | -0- | 1,143,912 | 721,472 | -0- | 1,865,384 | | Mario Gallione | -0- | 1,396,565 | 852,137 | -0- | 2,248,702 | | Danny Ewoldsen | -0- | 390,500 | 247,843 | -0- | 638,343 |
Summary of Potential Payments Upon Change of Control or Termination
| (1) Accrued and unpaid salary of the named executive officers at January 28, 2023. |
Summary of Potential Payments Upon Change of Control or Termination
| (2) The average of the last two annual bonuses earned by the named executive officer. |
Summary of Potential Payments Upon Change of Control or Termination
| (3) The value, based on the closing price of the Company’s common stock on the NYSE on January 27, 2023, of the previously unvested restricted stock and stock options that would have vested on an accelerated basis upon the Change of Control. |
Summary of Potential Payments Upon Change of Control or Termination
The following table shows, for each of the named executive officers, assuming such named executive officer was involuntarily terminated without Cause, died or became disabled on January 28, 2023, and no Change of Control had occurred, the estimated amounts payable with respect to (a) salary, (b) the value, based on the closing price of the Company’s common stock on the NYSE on January 27, 2023 (the last trading day of the fiscal year), of all previously unvested restricted stock and stock options subject to accelerated vesting, (c) non-qualified deferred compensation, and (d) the total of items (a) through (c):
Summary of Potential Payments Upon Change of Control or Termination
| Name | Cash Severance (a)(1) ($) | Accelerated Stock-Based Compensation (b)(2) ($) | Deferred Compensation Payout (c) ($) | Total (d) ($) | | Mimi E. Vaughn | -0- | 2,685,918 | -0- | 2,685,918 | | Tom George | -0- | 74,434 | -0- | 74,434 | | Parag D. Desai | -0- | 721,472 | -0- | 721,472 | | Mario Gallione | -0- | 852,137 | -0- | 852,137 | | Danny Ewoldsen | -0- | 247,843 | -0- | 247,843 |
Summary of Potential Payments Upon Change of Control or Termination
| (1) Accrued and unpaid salary of the named executive officers at January 28, 2023. |
Summary of Potential Payments Upon Change of Control or Termination
| (2) The value, based on the closing price of the Company’s common stock on the NYSE on January 27, 2023, of the previously unvested restricted stock and stock options that would have vested on an accelerated basis upon the Change of Control. |
Summary of Potential Payments Upon Change of Control or Termination
In addition, under the terms of our 2020 Equity Incentive Plan, our 2009 Equity Incentive Plan, and the equity award agreements issued thereunder, in the event equity awards are not assumed or Alternative Awards (as defined in the plans) are not substituted therefor in connection with a Change of Control, such equity awards automatically vest and, in the case of options, become immediately exercisable. General Severance Plan. The Company maintains a severance plan for monthly-paid salaried employees to provide for certain benefits in the event of a Company-initiated separation from the Company other than for Cause (as defined in the plan). Under the terms of the plan, an eligible employee is entitled to one week of his or her base salary at the termination date multiplied by each year of service with the Company with a maximum of 24 weeks and a minimum of two weeks. If their employment had been terminated without Cause as of January 28, 2023, the named executive officers would have been entitled to the following severance payments under the plan, which reduce payments due under the Employment Protection Agreements described above: Ms. Vaughn — $365,385; Mr. George — $19,231; Mr. Desai — $64,154; Mr. Gallione — $235,385; and Mr. Ewoldsen — $ 136,538.
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Company is providing the following information about the relationship of the median annual total compensation of all its employees and the annual total compensation of Mimi E. Vaughn, its chief executive officer for Fiscal 2023 (the “CEO”). The ratio reported below represents a reasonable estimate, calculated in a manner consistent with Item 402(u) of Regulation S-K. For Fiscal 2023, the annual total compensation of the Company’s median employee was $6,181. The Company’s median employee was a part-time, hourly-paid employee in one of its retail stores. As reported in the Summary Compensation Table, the annual total compensation of the CEO was $3,711,215. Based on this information, the ratio of the annual total compensation of the CEO to the median employee was 600 to 1 (the “CEO Pay Ratio”). In calculating the CEO Pay Ratio, the Company first identified all active employees as of November 1, 2022, a date within three months of the end of Fiscal 2023. Including all full-time, part-time, seasonal and temporary employees, as required by SEC rules, the Company had 14,935 U.S. and 4,022 non-U.S. employees on that date. The Company did not exclude any employees whether pursuant to the de minimis exemption for foreign employees or any other permitted exclusion. To identify its median employee, the Company used total taxable compensation based on 2022 W-2 income for U.S. employees and the equivalent for non-U.S. employees. In identifying the median employee, the Company did not annualize compensation for any employees who were employed for less than the full fiscal year. For employees not paid in U.S. dollars, the Company converted their pay into U.S. dollars using the average of month-end exchange rates for the twelve months ended December 31, 2022. The Company then determined the median employee’s total compensation, including any perquisites and other benefits, in the same manner that it determines the total compensation of the named executive officers for purposes of the Summary Compensation Table disclosed in this proxy statement. Pay ratios reported by the Company’s peers may not be directly comparable to the Company’s because of differences in the composition of each company’s workforce, as well as the assumptions, methodologies, adjustments and estimates used in calculating the pay ratio, as permitted by SEC rules.
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE The following table sets forth additional compensation information of our Principal Executive Officer (“PEO”) and our non-PEO named executive officers (“non-PEO NEOs”) along with total shareholder return, net income and change in EVA results for Fiscal 2023, Fiscal 2022 and Fiscal 2021. “Compensation actually paid” (“CAP”), as required under SEC rules, reflects adjusted values to unvested and vested equity awards during the fiscal years shown in the table based on year-end stock prices, various accounting valuation assumptions, and projected performance modifiers but does not reflect actual amounts paid out for those awards. For a discussion of how the compensation committee assessed Genesco’s performance and the named executive officers’ pay each year, see the “Compensation Discussion and Analysis” in this proxy statement and in the proxy statements for 2021 and 2022.
PAY VERSUS PERFORMANCE TABLE
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | | | Year (a) | Summary Compensation Table Total for PEO ($)(1) (b) | Compensation Actually Paid to PEO ($)(2) (c) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) (d) | Average Compensation Actually Paid to Non-PEO NEOs ($)(4) (e) | Genesco TSR ($)(5) (f) | Peer Group TSR ($)(6) (g) | Net Income ($ Millions)(7) (h) | | Change in EVA ($ Millions) (8) (i) | | | Fiscal 2023 | $3,711,215 | $3,555,298 | $942,522 | $794,370 | $121 | $102 | | 72 | -$ | 98 | | Fiscal 2022 | $8,766,458 | $9,019,572 | $2,876,839 | $2,887,343 | $160 | $113 | | 115 | | 173 | | Fiscal 2021 | $2,796,797 | $4,037,797 | $605,265 | $731,096 | $99 | $106 | -$ | 56 | -$ | 98 |
PAY VERSUS PERFORMANCE TABLE
| (1) Reflects compensation amounts reported in the “Summary Compensation Table” for the PEO for the respective years shown. |
PAY VERSUS PERFORMANCE TABLE
| (2) “Compensation actually paid” to the PEO in each of Fiscal 2023, Fiscal 2022 and Fiscal 2021 reflects the respective amounts set forth in column (b) above, adjusted as set forth in the table below, as determined in accordance with SEC rules. The dollar amounts reflected in column (b) above do not reflect the actual amount of compensation earned by or paid to our PEO during the applicable year. For information regarding the decisions made by the compensation committee with respect to the PEO compensation for each fiscal year, please see the “Compensation Discussion and Analysis” sections of the proxy statements reporting pay for the fiscal years covered in the table above. |
PAY VERSUS PERFORMANCE TABLE
| Fiscal Year | 2021 | | 2022 | 2023 | | | CEO | Vaughn | | Vaughn | Vaughn | | | SCT Total Compensation ($) | | 2,796,797 | $8,766,458 | | 3,711,215 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | | 2,096,519 | $5,113,804 | | 2,674,267 | | Plus: Fair Value for Stock and Option Awards Granted in the Covered Year ($) | | 3,706,419 | $2,413,120 | | 4,202,402 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | ($ | 15,538) | $2,127,017 | ($ | 1,290,521 | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | ($ | 353,362) | $826,781 | ($ | 393,532 | | Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year ($) | | 0 | $0 | | 0 | | Less: Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans ($) | | 0 | $0 | | 0 | | Plus: Aggregate Service Cost and Prior Service Cost for Pension Plans ($) | | 0 | $0 | | 0 | | Compensation Actually Paid ($) | | 4,037,797 | $9,019,572 | | 3,555,298 |
PAY VERSUS PERFORMANCE TABLE
Note: Equity Valuations: Stock option grant date fair value is calculated based on the Black-Scholes option pricing model as of date of grant. Adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. Time-vested restricted share grant date fair values are calculated using the stock price as of date of grant. Adjustments have been made using the stock price as of year end and as of each date of vest. Note that a portion of fiscal 2022 bonus was paid in stock in Fiscal 2023, with a grant date of March 24, 2022. Both the cash and equity portions of this bonus were disclosed in the Summary Compensation Table for Fiscal 2022. Given the early Fiscal 2023 grant date for the equity portion of the bonus, this award is initially reflected in “compensation actually paid” in fiscal 2023.
PAY VERSUS PERFORMANCE TABLE
| (3) The following non-PEO named executive officers are included in the average figures shown: George, Gallione, Desai and Ewoldsen for Fiscal 2023; George, Becker, Gallione and Desai for Fiscal 2022; and George, Becker, Gallione, Desai and Tucker for Fiscal 2021. |
PAY VERSUS PERFORMANCE TABLE
| (4) Average “compensation actually paid” for our non-PEO NEOs in each of Fiscal 2023, Fiscal 2022 and Fiscal 2021 reflects the respective amounts set forth in column (d) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. The dollar amounts reflected in column (d) of the table above do not reflect the actual amount of compensation earned by or paid to our non-PEO NEOs during the applicable year. For information regarding the decisions made by our compensation committee in regards to the non-PEO NEOs’ compensation for each fiscal year, please see the “Compensation Discussion and Analysis” sections of the proxy statements reporting pay for the fiscal years covered in the table above. |
PAY VERSUS PERFORMANCE TABLE
| Fiscal Year | 2021 | | 2022 | 2023 | | | Non-PEO NEOs | See Column (d) Note | | See Column (d) Note | See Column (d) Note | | | SCT Total Compensation ($) | | 605,265 | $2,876,839 | | 942,522 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | | 298,773 | $1,538,400 | | 353,906 | | Plus: Fair Value for Stock and Option Awards Granted in the Covered Year ($) | | 590,999 | $887,769 | | 641,691 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | ($ | 3,469) | $452,546 | ($ | 314,332) | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | ($ | 90,451) | $208,590 | ($ | 121,605) | | Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year ($) | ($ | 72,475) | $0 | | 0 | | Less: Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans ($) | | 0 | $0 | | 0 | | Plus: Aggregate Service Cost and Prior Service Cost for Pension Plans ($) | | 0 | $0 | | 0 | | Compensation Actually Paid ($) | | 731,096 | $2,887,343 | | 794,370 |
PAY VERSUS PERFORMANCE TABLE
Note: Equity Valuations: Stock option grant date fair value is calculated based on the Black-Scholes option pricing model as of date of grant. Adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. Time-vested restricted share grant date fair values are calculated using the stock price as of date of grant. Adjustments have been made using the stock price as of year end and as of each date of vest. Note that a portion of fiscal 2022 bonus was paid in stock in Fiscal 2023, with a grant date of March 24, 2022. Both the cash and equity portions of this bonus were disclosed in the Summary Compensation Table for Fiscal 2022. Given the early Fiscal 2023 grant date for the equity portion of the bonus, this award is initially reflected in “compensation actually paid” in Fiscal 2023.
PAY VERSUS PERFORMANCE TABLE
| (5) For the relevant fiscal year, represents the cumulative value of $100 invested in Genesco for the measurement periods beginning on February 2, 2020 and ending on January 28, 2023, January 29, 2022 and January 31, 2021, respectively. |
PAY VERSUS PERFORMANCE TABLE
| (6) For the relevant fiscal year, represents the cumulative TSR (“Peer Group TSR”) of the annual report Peer Group consisting of Caleres, Inc., Designer Brands, Foot Locker, Inc., Shoe Carnival, Inc. and Wolverine World Wide, Inc. (the “Peer Group”) for the measurement periods ending on January 28, 2023, January 29, 2022 and January 31, 2021, respectively. |
PAY VERSUS PERFORMANCE TABLE
| (7) Reflects “Net Income” in the Company’s Consolidated Income Statements included in the Company’s Annual Reports on Form 10-K for each of the years ended January 28, 2023, January 29, 2022 and January 31, 2021. |
PAY VERSUS PERFORMANCE TABLE
| (8) Company-Selected Measure is change in economic value added, or EVA. The Company determined EVA in Fiscal 2023 by subtracting from a business unit’s “net operating profit after taxes,” or NOPAT, a charge of 10% of the “average net assets” employed to generate the profit. EVA, NOPAT and average net assets are non-GAAP financial measures the Company computes utilizing, and for purposes of supplementing, certain financial metrics included in the Company’s audited consolidated financial statements, which are prepared in accordance with GAAP. For more information on EVA, NOPAT and average net assets, please see “EVA Calculations” above in “Executive Compensation — Compensation Discussion and Analysis — Fiscal 2023 Compensation Discussion.” |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Cash and Equity-Based Compensation
| Name (a) | Fees Earned or Paid in Cash ($) (b)(1) | Stock Awards ($) (c)(2) | Total ($) (h) | | Joanna Barsh | 104,792 | 112,207 | 216,999 | | Matthew C. Diamond | 97,292 | 112,207 | 209,499 | | John F. Lambros | 103,542 | 112,207 | 215,749 | | Thurgood Marshall, Jr. | 88,958 | 112,207 | 201,165 | | Angel R. Martinez | 88,958 | 112,207 | 201,165 | | Kevin P. McDermott | 95,208 | 112,207 | 207,415 | | Mary E. Meixelsperger | 106,523 | 112,207 | 218,730 | | Gregory A. Sandfort | 109,375 | 112,207 | 221,582 |