DEF 14A of Monro, Inc.
Filed Jul 6, 2023 · FY20230001193125-23-182539
Director Nominees
Director Nominees You are being asked to vote to elect the following four director nominees to Class 2 of our Board of Directors. Detailed information about each of these nominees begins on page 8 of the Proxy Statement.
Director Nominees
| Name | Age | Director Since | Independent | Occupation | | Stephen C. McCluski | 71 | 2013 | Yes | Retired. Former Senior Vice President and Chief Financial Officer of Bausch & Lomb Incorporated | | Robert E. Mellor | 79 | 2010 | Yes | Chairman of the Board of Monro, Inc. (Nasdaq: MNRO) | | Peter J. Solomon | 84 | 1984 | Yes | Chairman of Solomon Partners, LP | | Hope B. Woodhouse | 67 | 2023 | Yes | Retired. Director of Granite Point Mortgage Trust Inc. (NYSE: GPMT), Two Harbors Investment Corp. (NYSE: TWO) and Acadia Realty Trust (NYSE: AKR). |
Director Nominees
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Director Nominees
You are also being asked to vote to elect the following director nominee to Class 1 of our Board of Directors. Detailed information about this nominee begins on page 10 of the Proxy Statement.
Director Nominees
| Name | Age | Director Since | Independent | Occupation | | Lindsay N. Hyde | 41 | 2017 | Yes | Entrepreneur in Residence, Moderne Ventures, Senior Lecturer in Residence, Entrepreneurial Management at Harvard Business School |
Class 2 Nominee Information
Class 2 Nominee Information Set forth below is a summary of the biographical information for each of the Class 2 director nominees:
Class 2 Nominee Information
| Stephen C. McCluski Age: 71 Director since: 2013 Committees: Audit (Chair) Executive Compensation Nominating and Corporate Responsibility | Principal Occupation: Former senior vice president and chief financial officer of Bausch & Lomb Incorporated (Retired) Business Experience: • Former senior vice president and chief financial officer of Bausch & Lomb Incorporated • Former vice president and controller of Bausch & Lomb Incorporated Current and Former Directorships: • Current chairman of the Board of Directors and member of the audit committee of ImmunoGen, Inc. (Nasdaq: IMGN) • Former director of Standard Microsytems Corporation | | | Skills and Expertise: • Knowledge in finance, risk management, mergers and acquisitions, strategic planning, and financial reporting, accounting and controls |
Class 2 Nominee Information
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Class 2 Nominee Information
| Robert E. Mellor Age: 79 Director since: 2010 Committees: Nominating and Corporate Responsibility (Chair) Compensation Executive | Principal Occupation: Chairman of the Board of Directors Business Experience: • Interim chief executive officer of Monro, Inc. from August 2020 to April 2021 • Former director of Ryland Group, Inc. • Former lead independent director of Board of Monro, Inc. • Former chairman of the Board of Directors and chief executive officer of Building Materials Holding Corporation (“BMHC”), provider of the distribution, manufacturing and sale of building materials and component products Current and Former Directorships: • Current Non-Executive Chairman of the Board of Directors of Coeur Mining, Inc. (NYSE: CDE) • Former Director of CalAtlantic Group, Inc. • Former Chairman of the Board of Directors of BMHC Stock Holdings, Inc. | | | Skills and Expertise: • Knowledge in legal and regulatory matters, mergers and acquisitions, risk management, real estate, strategic development and execution, accounting and finance • Experience in corporate governance best practices of other major corporations |
Class 2 Nominee Information
| Peter J. Solomon Age: 84 Director since: 1984 Committees: Executive | Principal Occupation: Chairman of Solomon Partners, LP, an investment banking firm, and independently operated affiliate of Natixis, part of Groupe BPCE, a top 10 European and a top 20 global bank Business Experience: • Chairman of Solomon Partners, LP, an investment banking firm Current and Former Directorships: • Former member of Boards of Director of Associate Dry Goods Corporation, Culbro Corporation, Edison Brothers Stores, Inc., Esquire, Inc., Handyman Corporation, Lawfin International Limited, LIN Broadcasting Corporation (now known as LIN Media, LLC (NYSE: LIN)), Office Depot, Inc. (Nasdaq: ODP), Phillips-Van Heusen Corporation (now known as PVH Corp. (NYSE: PVH)), The Miller-Wohl Company and The Stop & Shop Supermarket Company. | | | Skills and Expertise: • Knowledge in banking and financial services, capital markets, government regulations, mergers and acquisitions, strategic development and execution and risk management • Leadership skills shown throughout business career and government service • Experience in corporate governance best practices of other major corporations |
Class 2 Nominee Information
| Hope B. Woodhouse Age: 67 Director since: 2023 Committees: Audit Compensation | Principal Occupation: Former chief operating officer of Bridgewater Associates, Inc. (Retired) Business Experience: • Former chief operating officer of Bridgewater Associates, Inc. • Former president and chief operating officer of Auspex Group, L.P. • Former chief operating officer of Soros Fund Management LLC Current and Former Directorships: • Director of Granite Point Mortgage Trust Inc. (NYSE: GPMT) • Director of Two Harbors Investment Corp. (NYSE: TWO) • Director of Acadia Realty Trust (NYSE: AKR) • Former member of Boards of Director of Atomyze LLC, Piper Jaffray Companies (NYSE: PJC), Soros Funds Limited, and Seoul Securities Corporation Ltd. | | | Skills and Expertise: • Knowledge in risk management, executive compensation, strategic planning, auditing, financial reporting, accounting and finance • Significant experience in corporate governance and executive compensation best practices of other public corporations |
Class 2 Nominee Information
The Board of Directors recommends that you vote “FOR” each of the director nominees listed above.
Class 2 Nominee Information
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PROPOSAL NO. 2 – ELECTION OF CLASS 1 DIRECTOR
PROPOSAL NO. 2 – ELECTION OF CLASS 1 DIRECTOR One Class 1 director is nominated for election at the Annual Meeting to serve until the 2024 annual meeting of shareholders, or until her successor has been duly elected and qualified. Ms. Hyde is nominated for election at the Annual Meeting because she received less than a majority vote in favor of her election at the 2022 annual meeting of shareholders. The Board of Directors reappointed Ms. Hyde to serve as a director during fiscal 2023 and determined that she should stand for reelection at this Annual Meeting because of her strong and complimentary skills relative to the Board, including leadership in the Company’s ESG programs and initiatives; her service as an independent director; and her service on the Audit Committee and the Nominating and Corporate Responsibility Committee. The Nominating and Corporate Responsibility Committee has assessed and recommends this nominee for election to our Board of Directors. Set forth below is a brief statement about this nominee’s age, principal occupation and business experience, including any directorships with any other public companies, describing the specific individual qualities and skills of such nominee that contribute to the overall effectiveness of the Board of Directors and its committees. This nominee has consented to being named as a nominee and to serve as a director if elected. Although we do not anticipate that this nominee will be unable to serve if elected, the votes will be cast for a substitute nominee selected by the Board of Directors unless the number of directors to be elected has been reduced to the number of nominees willing and able to serve on our Board of Directors. THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF THIS NOMINEE TO CLASS 1:
PROPOSAL NO. 2 – ELECTION OF CLASS 1 DIRECTOR
| Name | Age | Director Since | Independent | Occupation | | Lindsay N. Hyde | 41 | 2017 | Yes | Entrepreneur in Residence, Moderne Ventures Senior Lecturer, Harvard Business School |
Class 1 Nominee Information
Class 1 Nominee Information Set forth below is a summary of the biographical information for the Class 1 Director Nominee:
Class 1 Nominee Information
| Lindsay N. Hyde Age: 41 Director since: 2017 Committees: Audit Nominating and Corporate Responsibility | Principal Occupation: Entrepreneur in residence, Moderne Ventures, a venture capital fund focused on technology companies innovating within real estate, mortgage, finance, insurance, hospitality and home services, as well as a Senior Lecturer in Residence, Entrepreneurial Management at Harvard Business School. Business Experience: • Founder and former chief executive officer of Baroo, a provider of pet-related amenities in multifamily communities in large urban markets across the U.S. • Founder and former executive director of Strong Women, Strong Girls, a nationally recognized mentoring organization Current and Former Directorships: • Former elected director of the Harvard Alumni Association • Former director of Coca-Cola Scholars Alumni Foundation | | | Skills and Expertise: • Experience in service delivery, marketing, strategic development and execution • Knowledge in risk management and human resources • Entrepreneurial leadership and approach • Community engagement and culture |
Class 1 Nominee Information
The Board of Directors recommends that you vote “FOR” the director nominee listed above.
Class 1 Nominee Information
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Class 1 Director Information
Class 1 Director Information Set forth below is a summary of the biographical information for each of the continuing Class 1 directors:
Class 1 Director Information
| John L. Auerbach Age: 45 Director since: 2017 Committees: Compensation (Chair) | Principal Occupation: Chief Executive Officer of Uovo Art, LLC Business Experience: • Founder of LiveArt Holdings, Inc., a collector to collector digital marketplace for fine art and objects • Founder of Eloquii Design, Inc., a digitally native direct-to-consumer women’s fashion brand sold to Walmart • Former executive vice president of Art & Objects and Digital Businesses at Sotheby’s, Inc. • Former senior vice president of Digital & Global eCommerce at Kate Spade & Company • Former international managing director of Digital & eCommerce Initiatives at Christie’s Inc. Current and Former Directorships: • Co-chairman, LiveArt Holdings, Inc. • Former chairman, Eloquii Design, Inc. | | | Skills and Expertise: • Knowledge and extensive operational experience in retail, eCommerce deployment and strategy, brand building, digital marketing and artificial intelligence |
Class 1 Director Information
| Michael T. Broderick Age: 55 Director since: 2021 Committees: Executive | Principal Occupation: President and Chief Executive Officer of Monro, Inc. (Nasdaq: MNRO) Business Experience: • Former executive vice president of merchandising and store operations support at Advance Auto Parts (NYSE: AAP) • Former senior vice president of the automotive division of Canadian Tire Corporation (CTC-A.TO) • Former chief executive officer of Federal Mogul Corporation (Nasdaq: FDML) | | | Skills and Expertise: • Knowledge in store operations, category management, mergers and acquisitions, strategic development and execution and risk management • Leadership skills as a senior officer of several different companies • Experience in corporate governance best practices of other major corporations |
Class 1 Director Information
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Class 1 Director Information
| Leah C. Johnson Age: 59 Director since: 2020 Committees: None | Principal Occupation: Executive Vice President, Chief Communications, Marketing & Advocacy Officer of Lincoln Center for the Performing Arts, an internationally renowned performing arts institution Business Experience: • Founder and former chief executive officer of LCJ Solutions, LLC, a strategic communications consulting firm • Former senior vice president, Global Corporate Affairs at Citigroup, Inc. • Former vice president of corporate communications at S&P Global Ratings (previously, Standard & Poor’s) Current and Former Directorships: • Former director of Pluralsight, Inc. • Current trustee of The Trust for Cultural Resources of the City of New York • Current trustee of the Museum of the City of New York • Current vice chair of the Board of Trustees at New York Public Radio | | | Skills and Expertise: • Knowledge and operational experience in corporate strategy and communications, public affairs, marketing, change management, and diversity and inclusion • Entrepreneurial leadership and approach • Community engagement and culture |
Class 1 Director Information
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Director Compensation
Director Compensation The Company does not pay any director who is also an employee of Monro or its subsidiaries for his or her service as director. In Fiscal 2023, non-employee directors received the following compensation:
Director Compensation
| • | $40,000 annual retainer; a $30,000 annual retainer for the Board Chair, as well as the Chairs of the Audit Committee and the Finance Committee; a $15,000 annual retainer for the Compensation Committee Chair and a $10,000 annual retainer for the Nominating and Corporate Responsibility Committee Chair; |
Director Compensation
| • | a grant of 2,426 shares of restricted stock on the date of the 2022 annual meeting of shareholders, determined by dividing $130,000 by $53.58, the closing price of a share of our common stock on the date of the 2022 annual meeting of shareholders; |
Director Compensation
| • | $3,000 for each meeting of the Board of Directors and $1,000 for each committee meeting attended; and |
Director Compensation
| • | reasonable travel expenses to attend meetings, if applicable. |
Director Compensation
In addition to normal course compensation, non-employee directors who served on the Special Committee received compensation of $1,000 per each committee meeting attended for that service during Fiscal 2023. This is included in the Director Compensation Table below and described further in Proposal No. 7 — Approval of the Reclassification Amendment — Background of the Reclassification.
Director Compensation Table
Director Compensation Table
Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) | | John L. Auerbach | 56,000 | 129,985 | 187,987 | | Frederick M. Danziger | 76,000 | 129,985 | 205,985 | | Donald Glickman | 91,000 | 129,985 | 220,985 | | Lindsay N. Hyde | 64,000 | 129,985 | 193,985 | | Leah C. Johnson | 55,000 | 129,985 | 184,985 | | Stephen C. McCluski | 98,000 | 129,985 | 227,985 | | Robert E. Mellor | 108,000 | 129,985 | 237,985 | | Peter J. Solomon | 61,000 | 129,985 | 190,985 | | Hope B. Woodhouse | 1,000 | — | 1,000 |
Director Compensation Table
| (1) Each non-employee director was awarded 2,426 shares of the Company’s restricted stock on August 16, 2022 (the “Award Date”). This column represents the aggregate award date value of the restricted stock awarded during Fiscal 2023 under FASB ASC 718. The value of the restricted stock is derived by multiplying number of shares awarded by the closing price per share on the Award Date of $53.58. For additional information on the valuation assumptions with respect to the Fiscal 2023 awards, refer to Note 10 of the Company’s financial statements in the Form 10-K for the year ended March 25, 2023, as filed with the SEC. The restricted stock awarded to directors vests over a three-year period. The following table shows the number of restricted stock awards outstanding for each non-management director as of March 25, 2023. There are no remaining outstanding stock options from grants made prior to 2018. |
Director Compensation Table
| Name | Restricted Stock Outstanding (Shares) | | John L. Auerbach | 4,851 | | Frederick M. Danziger(1) | — | | Donald Glickman | 4,851 | | Lindsay N. Hyde | 4,851 | | Leah C. Johnson | 4,851 | | Stephen C. McCluski | 4,851 | | Robert E. Mellor | 5,710 | | Peter J. Solomon | 4,851 | | Hope B. Woodhouse | — | | TOTAL | 34,816 |
Director Compensation Table
| (1) Mr. Danziger retired from the Board of Directors in February 2023 and all of his Restricted Stock vested at that time. |
Compensation Philosophy and Objectives
| - | setting challenging yet realistic annual performance goals in our short-term incentive plan that rewards executives for the achievement of these goals; and |
Compensation Philosophy and Objectives
| - | providing a mix of long-term incentives weighted toward performance to ensure alignment with shareholders and focus on increasing shareholder value, while retaining key talent. |
Compensation Philosophy and Objectives
Our compensation program rewards our Named Executive Officers for attaining established goals that require the dedication of their time, efforts, skills and business experience for the success of the Company. The program is designed to reward both annual and long-term performance. Short-term performance is rewarded through base salary and annual incentive. Beginning in fiscal 2019, long-term performance has usually been rewarded through a mix of three vehicles: stock options, performance-vesting restricted stock units (“PSUs”); and time-vesting restricted stock units (“RSUs”). The value of each vehicle is based on a number of factors predicated on the Company’s financial performance. In addition, our Named Executive Officers receive other benefits, certain of which are available to all other salaried employees of the Company.
Compensation Philosophy and Objectives
| What We Do | What We Don’t Do | | ✓ Pay for performance – majority of compensation “at risk” | X Permit short sales by directors, officers or employees | | ✓ Reasonable post-employment and change in control provisions | X Allow hedging or pledging of company stock | | ✓ Stock ownership guidelines | X Offer change in control tax gross-ups | | ✓ Utilize independent compensation advisor | X Permit repricing of underwater options without shareholder approval | | ✓ Clawback policy | X Offer unreasonable perquisites | | ✓ Annual shareholder “say on pay” vote | X No single trigger cash severance based solely upon a change-in-control of the Company | | ✓ Executive benchmarking | | | ✓ Modest perquisites | |
Role of the Compensation Consultant
Role of the Compensation Consultant As outlined in its charter, the Committee has the authority to retain consultants and advisers, at the Company’s expense, to assist in the discharge of the Committee’s duties. The Committee has retained the services of Exequity,
Role of the Compensation Consultant
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Role of the Compensation Consultant
LLP (“Exequity”) as its independent compensation consultant. Exequity has not provided any other services to the Company prior to or subsequent to being retained as the compensation consultant to the Committee. The Committee was solely responsible for the decision to retain Exequity as its consultant. Exequity advises the Committee on matters of Named Executive Officer compensation, assists with analysis and research, and provides updates on evolving best practices in compensation. While Exequity may express an opinion on compensation matters, the Committee is solely responsible for setting the type and amount of compensation for our Named Executive Officers. Exequity reports directly to the Committee and has direct access to the Committee through the Committee’s Chair. The Committee requires that any compensation consultant it retains cannot be utilized by management for other purposes. Although management may work closely with the consultant, the consultant is ultimately accountable to the Committee on matters related to executive compensation. The Committee recognizes that it is essential to receive objective advice from its compensation consultant. The Committee examines the procedures and safeguards that Exequity takes to ensure that the compensation consulting services are objective. The Committee has assessed the independence of Exequity pursuant to Nasdaq rules and its charter and concluded that Exequity’s work for the Committee does not raise any conflict of interest. In making this assessment, the factors taken into consideration included:
Role of the Compensation Consultant
| • | that the compensation consultant reports directly to the Committee, and the Committee has the sole power to terminate or replace its compensation consultant at any time; |
Role of the Compensation Consultant
| • | the compensation consultant does not provide any other services to the Company; |
Role of the Compensation Consultant
| • | the compensation consultant’s policies and procedures are designed to prevent conflicts of interest; |
Role of the Compensation Consultant
| • | whether the compensation consultant’s advisor to the Company owns stock in the Company; and |
Role of the Compensation Consultant
| • | any business or personal relationships between the compensation consultant’s advisor to the Company, on one hand, and any member of the Committee or any executive officer, on the other hand. |
Benchmarking
Benchmarking In addition to many other factors that affect compensation determinations, the Committee considers the compensation practices of a peer group, where available, in evaluating the compensation program. In fiscal 2019, the Committee engaged Exequity to reevaluate its peer group to be used for executive compensation purposes. The Committee originally approved a peer group of 22 companies, including companies within the automotive aftermarket and 12 retailers with revenues between $500M and $1.5B to ensure a more robust group, with a focus on size and industry. No changes were made to this peer group during Fiscal 2023, however, as previously disclosed, two companies in the original peer group are no longer publicly listed. As such, the peer group used in Fiscal 2023 executive compensation decisions includes:
Benchmarking
| Aarons, Inc. | Five Below, Inc. | Murphy USA Inc. | | Advance Auto Parts, Inc. | Floor & Décor Holdings, Inc. | O’Reilly Automotive, Inc. | | Asbury Automotive Group, Inc. | Group 1 Automotive, Inc. | Shoe Carnival, Inc. | | Autozone, Inc. | Hibbett Sports, Inc. | Sleep Number Corporation | | Carvana Co. | Haverty Furniture Companies, Inc. | Valvoline Inc. | | The Children’s Place, Inc. | La-Z-Boy Incorporated | Zumiez Inc. | | Citi Trends Inc. | Lithia Motors, Inc. | |
Benchmarking
This peer group was used to conduct executive compensation benchmarking for the named executive officers in Fiscal 2023. The peer group served as the primary reference, with survey data utilized as a secondary reference. Results of the benchmarking indicated that, on an aggregate basis, all components of pay (base salary, target bonus, and long-term incentives) lagged the 25th percentile of both the peer group and survey data.
Benchmarking
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Elements of Compensation for Fiscal 2023
| • | Motivate our executive officers to achieve short-term and long-term corporate goals that will enhance shareholder value |
Elements of Compensation for Fiscal 2023
| Compensation Element | | Period Covered | Objectives | | Fixed | Base Salary (Cash) | Annual | • Fixed annual cash provided for performing day-to-day job responsibilities • Generally determined based on an individual’s time in the position, experience, performance, future potential and market data • Reviewed annually for potential adjustment based on factors such as changes in the executive’s responsibilities, individual performance and market data | | At-Risk | Annual Incentive Bonus (Cash) | Annual | • Variable cash compensation tied to the achievement of annual corporate financial and operational goals established by the Committee each fiscal year • Aligns interests of executives with shareholders, with amount earned dependent on Company performance objectives designed to enhance shareholder value | | | Long-Term Incentive (“LTI”) Compensation (Equity Awards) | 3-4 years | • Mix of equity awards intended to provide a balanced portfolio with the intention of motivating, rewarding, and retaining executives • Objective is to provide 75% of equity awards as performance-based awards with the following mix: 25% stock options, 50% PSUs, and 25% RSUs • Stock options ○ Aligns executive rewards with shareholder returns; no value unless stock price appreciates over the grant price ○ Vests in equal installments over four years ○ Encourages long-term, sustained performance ○ Encourages retention through multi-year vesting • Performance-vesting stock units (PSUs) ○ Vest over a three-year performance period ○ PSUs are forfeited if multi-year objectives are not met ○ Encourages long-term, sustained performance and retention ○ Facilitates stock ownership • Time-vesting restricted stock units (RSUs) ○ Vests in equal installments over four years ○ Encourages retention through multi-year vesting ○ Facilitates stock ownership |
Base Salary
Base Salary We provide our Named Executive Officers with a base salary to compensate them for services rendered during the fiscal year. The amount of base salary is meant to reflect the primary responsibilities of his or her position and is set at a level that the Committee believes will enable us to attract and retain talent. The Committee considers a number of criteria in establishing and adjusting the base salary of a particular executive officer, including, among other things, recent hiring experience, individual performance, internal pay alignment and equity, responsibilities of the position, longer term potential, individual experience and methods to achieve results, as well as market data. Salaries for executive officers are reviewed annually or when there is a change in position or responsibilities, such as a promotion. Annual salary planning begins with a percentage guideline for increases, based upon our annual budget, which is adjusted upward or downward for individual performance based on recommendations from our CEO. The guidelines are set after considering competitive market factors as previously described, affordability and current salary levels, as appropriate. The performance of each executive officer is evaluated annually following the close of the fiscal year so that each executive’s performance can be assessed within the context of our performance against its financial and strategic goals for the year. Individual performance is evaluated based on the specific responsibilities and accountabilities of the executive, the value of the services provided, the executive’s management skills and experience, and the individual’s contribution to our performance and profitability. The Committee typically approves the base salary increases in May. In May 2022, the Committee approved a salary increase of 4% to the base salaries of each of the Named Executive Officers to ensure greater consistency with market practice. This increase followed the results of Exequity’s study of our peer group, which showed that all components of the Named Executive Officers’ pay (base salary, target bonus, and long-term incentives) lagged the 25th percentile of peer group and survey data.
Annual Incentive
Annual Incentive The Committee has the authority to award annual incentives to our executive officers. Each May, the Committee establishes targets for annual incentives in the form of performance-based cash bonuses to compensate executive officers, as well as other management employees. Our Named Executive Officers receive their annual incentive pursuant to our executive incentive plan. The incentive plan for Fiscal 2023 was established in line with more traditional annual bonus measures meant to focus executives on our objectives to increase revenue, profit and same store sales. Fiscal 2023 performance measures and weighting were:
Annual Incentive
| 1. | 50% based on comparable store sales; and |
Annual Incentive
| 2. | 50% based on pre-tax income. |
Annual Incentive
The targets for comparable store sales and pre-tax income were set based on the budget approved by the Board for Fiscal 2023. The Fiscal 2023 incentive opportunities for executives ranged from 0% to 150% of target based on performance. Under the executive bonus plan for Fiscal 2023, the target bonus amounts and maximum payout amounts for our Named Executive Officers were:
Annual Incentive
| Name | Base Salary ($)(1) | Target Bonus (% of Base Salary) | Maximum Bonus (% of Base Salary) | | Michael T. Broderick | 714,179 | 100 | 150 | | Brian J. D’Ambrosia | 408,103 | 60 | 90 | | Maureen E. Mulholland | 346,887 | 60 | 90 | | Robert J. Rajkowski | 136,103 | 60 | 90 | | Matt Henson | 346,888 | 60 | 90 | | Dan Tripoli | 306,077 | 40 | 60 |
Annual Incentive
| (1) The base salaries represent actual amounts paid to the Company’s executives Named Executive Officers in Fiscal 2023. |
Annual Incentive
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Annual Incentive
All incentive awards made under the executive incentive plan are subject to the Committee’s approval. In addition, the Committee has the sole authority to determine whether the performance targets have been achieved by us and, if so, the applicable incentive award percentages to be paid. The Committee may use its discretion to include or exclude extraordinary or unusual items in determining the level of achievement of the performance targets. The Committee’s practice is to pay cash awards based upon the achievement of our annual financial performance goals. The Committee carefully considers any exceptions. Absent extraordinary circumstances, there are no payouts for below threshold performance. The table below provides the Fiscal 2023 goals and achievements:
Annual Incentive
| | Fiscal 2023 Goal and Actual Results Achieved | | | | | Name | Threshold | Target | Maximum | Actual | | Comparable Store Sales Increase | 4.5% | 6.8% | 9.1% | 2.8% | | % of Target | 50% | 100% | 150% | | | Pre-tax income (thousands) | $86,300 | $98,100 | $109,900 | $57,200 | | % of Target | 50% | 100% | 150% | |
Annual Incentive
None of our Named Executive Officers earned an annual incentive for Fiscal 2023 because both comparable store sales and pre-tax income were less than their thresholds.
Long-Term Incentive Compensation
Long-Term Incentive Compensation In Fiscal 2023 the Committee again utilized a mix of three long-term incentive vehicles (stock options, PSUs and RSUs). The percentages assigned between each long-term incentive vehicle are as follows:
Long-Term Incentive Compensation
| 1. | 25% stock options; |
Long-Term Incentive Compensation
| 2. | 50% PSUs; and |
Long-Term Incentive Compensation
| 3. | 25% RSUs. |
Long-Term Incentive Compensation
We believe our three-pronged approach to long-term incentives encourages retention, performance and a continuing link with shareholders. For our executives, the amount of long-term incentive compensation is intended to motivate executives to make stronger business decisions, improve financial performance, focus on both short-term and long-term objectives and encourage behavior that protects and enhances the long-term interests of our shareholders. We believe that equity awards are a significant portion of the total compensation package for executives and are an important retention tool. PSUs issued for Fiscal 2023 (the “Fiscal 2023 PSUs”) vest on a sliding scale based on our attainment of a pre-tax return on invested capital goal calculated at the end of fiscal year 2024 (“Fiscal 2023 PSU ROIC”). Fifty percent of the Fiscal 2023 PSUs will vest upon the attainment of a threshold calculation of 10% Fiscal 2023 PSU ROIC, up to the entirety of the Fiscal 2023 PSUs vesting based on the attainment of a 12% Fiscal 2023 PSU ROIC. ROIC was identified as an important measure for us to focus management on the efficient deployment of capital over the long-term. We believe ROIC in the long-term plan, coupled with the short-term metrics in the annual bonus of profit and organic growth, ensures a balanced approach of both income and capital management. The Committee considered the following factors in evaluating the 2023 long-term incentive compensation grants for our Named Executive Officers: recommendation by our CEO, Company and individual performance, change in responsibility, peer group benchmarking, the recipient’s level within the Company’s overall workforce, prior equity compensation awards, the value of the awards as a percentage of the recipient’s total compensation and the expense associated with the awards. Fiscal 2023 long-term incentive grants are consistent with the prior fiscal year to maintain the proportion of performance-based compensation relative to our peer group median.
Long-Term Incentive Compensation
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Employment Agreements
Employment Agreements The Company did not enter into any new employment agreements with its Named Executive Officers in Fiscal 2023, however the Company previously entered into employment agreements with Michael T. Broderick, Brian J. D’Ambrosia and Matt Henson. All of these employment agreements were reviewed and approved by the Committee. The Committee believes that these employment agreements are an important part of our overall executive compensation program and serve as a recruitment and retention device. The employment agreement for each Named Executive Officer generally addresses role and responsibilities; rights to compensation and benefits during active employment; resignation by the employee with or without “Good Reason”, as defined in the agreement; termination in the event of death, disability or retirement; and termination for “Cause” and termination without “Cause”, as defined in the agreement. Further, the agreements stipulate that the executive may not compete with us or solicit our employees for prescribed periods following termination of employment and may not disclose confidential information of the Company. The employment agreements also contain termination and related pay provisions in the event of a “change in control.” In each case, for the change in control provision to apply, there must be both (1) a “change in control,” as well as (2) a termination by us without cause or a resignation by the executive for reasons defined in the agreement, including a material diminution of his duties. A “change in control” is generally deemed to occur (i) when a person or group who was not an affiliate as of the date we entered into the agreement (a “Non-Affiliate”) acquires beneficial ownership of 50% or more of our Common Stock; (ii) upon our sale substantially as an entity to a Non-Affiliate; or (iii) when there occurs a merger, consolidation or other reorganization of the Company with a Non-Affiliate, in which our shareholders immediately preceding the merger hold less than 50% (disregarding the voting and consent rights of the Class C Preferred Stock) of the combined voting power for the election of directors of the Company immediately following the merger. Consistent with our policy, none of the employment agreements include an excise tax gross-up provision.
Broderick Agreement
Broderick Agreement In March 2021, we entered into an employment agreement (the “Broderick Agreement”) with Mr. Broderick, with an initial term of April 5, 2021 through December 31, 2023. The Broderick Agreement automatically renews for successive one-year terms, unless either party gives notice of its intention not to renew. During the term of the Broderick Agreement, Mr. Broderick serves as our President and Chief Executive Officer. Under the Broderick Agreement, Mr. Broderick (i) is paid an annual base salary of at least $700,000; (ii) is eligible to earn an annual bonus for each fiscal year, pursuant to the terms of the bonus plan, of 75% of his base salary for achievement of Company threshold performance levels, 100% of his base salary for achievement of Company target performance levels, and 150% of his base salary for achievement of Company maximum performance levels or more;
D’Ambrosia Agreement
D’Ambrosia Agreement In December 2020, we entered into an employment agreement (the “D’Ambrosia Agreement”) with Mr. D’Ambrosia, with an initial term of January 1, 2021 through December 31, 2021. The D’Ambrosia Agreement automatically renews for successive one-year terms, unless either party gives notice of its intention not to renew. During the term of the D’Ambrosia Agreement, Mr. D’Ambrosia serves as our Executive Vice President – Finance and Chief Financial Officer. Under the D’Ambrosia Agreement, Mr. D’Ambrosia (i) is paid a base salary of at least $400,000; (ii) is eligible to earn an annual bonus for each fiscal year, pursuant to the terms of our bonus plan, of 30% of his base salary for achievement of Company threshold performance levels, 60% of his base salary for achievement of Company target performance levels, and 90% of his base salary for the achievement of Company maximum performance levels or more; and (iii) participates in our other incentive and welfare and benefit plans made available to executives. In addition, under the D’Ambrosia Agreement, Mr. D’Ambrosia is entitled to certain payments upon a termination without Cause (as defined therein), a resignation by Mr. D’Ambrosia for Good Reason (as defined therein) or a termination in the event of a Change in Control of the Company (as defined therein), all as set forth in detail in the D’Ambrosia Agreement and described in the “Potential Payments Upon Termination or Change in Control” section of this Proxy Statement.
2023 Summary Compensation Table
2023 Summary Compensation Table The table below sets forth the compensation paid to or earned by our “Named Executive Officers” listed in the table for the three-year period ended March 25, 2023, or if less, the period of time in which the individual served as a Named Executive Officer.
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary(1) ($) | Bonus(2) | Option Awards(3) ($) | Stock Award(4) ($) | Non-Equity Incentive Plan Compensation(5) ($) | All Other Compensation(6) ($) | Total ($) | | Michael T. Broderick | 2023 | 714,179 | | 199,969 | 599,972 | — | 45,600 | 1,559,720 | | Chief Executive Officer and | 2022 | 695,511 | | 197,522 | 2,897,110 | 560,000 | 16,500 | 4,366,643 | | President | | | | | | | | | | Brian J. D’Ambrosia | 2023 | 408,103 | | 174,981 | 524,998 | — | 34,700 | 1,142,782 | | Executive Vice President— | 2022 | 400,000 | | 172,876 | 524,958 | 164,000 | 26,100 | 1,287,934 | | Finance and Chief Financial Officer | 2021 | 388,750 | | 176,057 | 174,991 | 171,660 | 24,600 | 936,058 | | Maureen E. Mulholland | 2023 | 346,887 | | 149,980 | 449,979 | — | 30,300 | 977,146 | | Executive Vice President— | 2022 | 333,333 | | 148,176 | 449,964 | 136,667 | 26,100 | 1,094,240 | | Chief Legal Officer and Secretary | 2021 | 275,000 | | 62,872 | 62,485 | 93,290 | 23,800 | 517,447 | | Matt Henson | 2023 | 346,888 | | 149,980 | 712,472 | — | 16,700 | 1,226,040 | | Chief Human Resources Officer— | 2022 | 251,513 | 225,000 | 99,054 | 562,428 | 85,934 | 7,000 | 1,230,929 | | Retail Operations | | | | | | | | | | Daniel J. Tripoli | 2023 | 306,077 | | 99,991 | 199,990 | — | 16,800 | 622,858 | | Former Sr. Vice President— | 2022 | 300,000 | | 98,775 | 99,992 | 82,000 | 21,800 | 602,567 | | Retail Operations | 2021 | 262,564 | | 62,872 | 62,485 | 62,287 | 17,400 | 467,608 | | Robert J. Rajkowski | 2023 | 136,103 | | 149,980 | 149,991 | — | 271,300 | 707,374 | | Former Executive Vice President— | 2022 | 400,000 | | 148,176 | 449,964 | 164,000 | 19,900 | 1,182,040 | | Chief Operating Officer | 2021 | 368,179 | | 150,901 | 149,953 | 146,512 | 65,900 | 881,445 |
2023 Summary Compensation Table
| (1) The reported salaries for our Named Executive Officers reflect the payments they actually received in Fiscal 2023. All NEOs received a salary increase in FY23 effective May 29, 2022. In the case of Mr. Rajkowski, the amount represents salary earned in FY23 prior to him leaving the Company on July 31, 2022. |
2023 Summary Compensation Table
| (2) For Mr. Henson, the 2022 bonus represents the $225,000 sign-on bonus associated with his employment agreement, which was paid as a lump sum in August 2021. |
2023 Summary Compensation Table
| (3) Amounts do not reflect compensation actually received by our Named Executive Officers. Instead, the amounts shown are the aggregate grant date fair value of option awards computed in accordance with FASB ASC 718. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The assumptions used in calculating compensation costs are described more fully in Note 10 in the Company’s financial statements in the Form 10-K for the year ended March 25, 2023, as filed with the SEC. See the Grants of Plan-Based Awards table for further information on options granted in Fiscal 2023. |
2023 Summary Compensation Table
| (4) The amounts in this column represent the aggregate grant date fair value of Time-Vesting Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) calculated in accordance with FASB ASC 718. The assumptions used in calculating compensation costs are described more fully in Note 10 in the Company’s financial statements in the Form 10-K for the year ended March 25, 2023, as filed with the SEC. See the Grants of Plan-Based Awards table for further information on RSUs awarded in Fiscal 2023. |
2023 Summary Compensation Table
| (5) This column represents the amounts earned by our Named Executive Officers in Fiscal 2023, as well as fiscal 2022 and fiscal 2021 pursuant to the Company’s annual incentive bonus plan. Additional information regarding the potential threshold, target and maximum payouts underlying this column is included in the Grants of Plan-Based Awards table. |
2023 Summary Compensation Table
| (6) The following table shows each component of the “All Other Compensation” column in the 2023 Summary Compensation Table. For our Named Executive Officers, these components consist of the Company’s matching contributions to the 401(k) and the Nonqualified Deferred Compensation Plans, nonqualified deferred compensation (“NQDC”) earnings in excess of 120% of the long-term applicable federal rate (“AFR”), payment of life insurance premiums on behalf of our Named Executive Officers, and the incremental cost to the Company of automobiles provided to our Named Executive Officers. |
2023 Summary Compensation Table
| 34 | |
2023 Summary Compensation Table
| Name | Year | Company Matching Contributions ($) | NQDC Earnings in excess of 120% of long-term AFR ($) | Life Insurance Premium ($) | Auto Allowance Perquisites ($) | Severance(1) ($) | Total ($) | | Michael T. Broderick | 2023 | 32,600 | 400 | 800 | 11,800 | | 45,600 | | Brian J. D’Ambrosia | 2023 | 14,200 | 6,300 | 800 | 13,400 | | 34,700 | | Maureen E. Mulholland | 2023 | 14,200 | 800 | 800 | 14,500 | | 30,300 | | Matt Henson | 2023 | 6,300 | — | 800 | 9,600 | | 16,700 | | Daniel J. Tripoli | 2023 | 4,000 | — | 800 | 12,000 | | 16,800 | | Robert J. Rajkowski | 2023 | 3,200 | — | 300 | 3,800 | 264,000 | 271,300 |
2023 Summary Compensation Table
| (1) Mr. Rajkowski’s severance was in the form of base salary. The amount reflected above represents what was actually paid to Mr. Rajkowski in Fiscal 2023. |
Outstanding Equity Awards at Fiscal 2023 Year End
Outstanding Equity Awards at Fiscal 2023 Year End The following table provides information about the number of outstanding equity awards held by our Named Executive Officers at March 25, 2023:
Outstanding Equity Awards at Fiscal 2023 Year End
| | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares or Units That Have Not Vested ($) | | Michael T. Broderick(1) | 4/5/2021(8) | | | | | 10,000 | 489,300 | | | | | 4/5/2021(7) | | | | | | | 10,000 | 489,300 | | | 4/5/2021(6) | | | | | | | 10,000 | 489,300 | | | 7/30/2021(3) | | | | | 2,586 | 126,533 | | | | | 7/30/2021(2) | 3,583 | 10,747 | 58.00 | 7/30/2031 | | | | | | | 7/30/2021(4) | | | | | | | 6,897 | 337,470 | | | 5/12/2022(2) | | 16,077 | 44.68 | 5/11/2028 | | | | | | | 5/12/2022(3) | | | | | 4,476 | 219,011 | | | | | 6/30/2022(4) | | | | | | | 9,328 | 456,419 | | | | 3,583 | 26,824 | | | 17,062 | 834,844 | 36,225 | 1,772,489 | | Brian J. D’Ambrosia | 5/15/2019(2) | 3,465 | 1,155 | 80.18 | 5/14/2025 | | | | | | | 5/15/2019(3) | | | | | 280 | 13,700 | | | | | 6/1/2020(2) | 7,079 | 7,079 | 55.15 | 5/31/2026 | | | | | | | 6/1/2020(3) | | | | | 1,586 | 77,603 | | | | | 7/30/2021(2) | 3,136 | 9,406 | 58.00 | 7/30/2031 | | | | | | | 7/30/2021(3) | | | | | 2,263 | 110,729 | | | | | 7/30/2021(4) | | | | | | | 6,034 | 295,244 | | | 5/12/2022(2) | | 14,068 | 44.68 | 5/11/2028 | | | | | | | 5/12/2022(3) | | | | | 3,917 | 191,659 | | | | | 6/30/2022(4) | | | | | | | 8,162 | 399,367 | | | | 13,680 | 31,708 | | | 8,046 | 393,691 | 14,196 | 694,610 | | Maureen E. Mulholland | 5/11/2017(2) | 2,000 | | 50.48 | 5/10/2023 | | | | | | | 8/15/2017(2) | 5,000 | | 44.90 | 8/14/2023 | | | | | | | 6/5/2018(2) | 1,484 | | 57.45 | 6/4/2024 | | | | | | | 5/15/2019(2) | 1,155 | 385 | 80.18 | 5/14/2025 | | | | | | | 5/15/2019(3) | | | | | 93 | 4,550 | | | | | 6/1/2020(2) | 2,528 | 2,528 | 55.15 | 5/31/2026 | | | | | | | 6/1/2020(3) | | | | | 566 | 27,694 | | | | | 7/30/2021(3) | | | | | 1,939 | 94,875 | | | | | 7/30/2021(4) | | | | | | | 5,172 | 253,066 | | | 7/30/2021(2) | 2,688 | 8,062 | 58.00 | 7/30/2031 | | | | | | | 5/12/2022(2) | | 12,058 | 44.68 | 5/11/2028 | | | | | | | 5/12/2022(3) | | | | | 3,357 | 164,258 | | | | | 6/30/2022(4) | | | | | | | 6,996 | 342,314 | | | | 14,855 | 23,033 | | | 5,955 | 291,378 | 12,168 | 595,380 | | Matt Henson (5) | 7/6/2021(2) | 1,632 | 4,896 | 62.75 | 7/5/2027 | | | | | | | 7/6/2021(3) | | | | | 3,137 | 153,493 | | | | | 7/6/2021(3) | | | | | 1,195 | 58,471 | | | | | 7/30/2021(4) | | | | | | | 3,448 | 168,711 | | | 5/12/2022(2) | | 12,058 | 44.68 | 5/11/2028 | | | | | | | 5/12/2022(3) | | | | | 3,357 | 164,258 | | | | | 6/30/2022(4) | | | | | | | 6,996 | 342,314 | | | 7/6/2022(3) | | | | | 5,912 | 289,274 | | | | | | 1,632 | 16,954 | | | 13,601 | 665,497 | 10,444 | 511,025 | | Dan Tripoli | 7/18/2018(2) | 2,000 | | 67.25 | 7/17/2024 | | | | | | | 5/15/2019(2) | 462 | 154 | 80.18 | 5/14/2025 | | | | | | | 5/15/2019(3) | | | | | 37 | 1,810 | | | | | 6/1/2020(2) | 2,528 | 2,528 | 55.15 | 5/31/2026 | | | | | | | 6/1/2020(3) | | | | | 566 | 27,694 | | | | | 7/30/2021(2) | 1,792 | 5,374 | 58.00 | 7/30/2031 | | | | | | | 7/30/2021(4) | | | | | | | 1,724 | 84,355 | | | 7/30/2021(3) | | | | | 1,293 | 63,266 | | | | | 5/12/2022(2) | | 8,039 | 44.68 | 5/11/2028 | | | | | | | 5/12/2022(3) | | | | | 2,238 | 109,505 | | | | | 6/30/2022(4) | | | | | | | 2,332 | 114,105 | | | | 6,782 | 16,095 | | | 4,134 | 202,277 | 4,056 | 198,460 | | Robert J. Rajkowski | (9) | | | | | | | | |
Outstanding Equity Awards at Fiscal 2023 Year End
| (1) Awards issued on April 5, 2021 were in connection with Mr. Broderick joining the Company. |
Outstanding Equity Awards at Fiscal 2023 Year End
| | 37 |
Outstanding Equity Awards at Fiscal 2023 Year End
| (2) This option grant vests over four years as follows: One-quarter of the options in each grant vests on the yearly anniversary of the grant. These options have a six-year life from the grant date. |
Outstanding Equity Awards at Fiscal 2023 Year End
| (3) These RSUs vest over four years as follows: One-quarter of the units on the yearly anniversary of the grant date. |
Outstanding Equity Awards at Fiscal 2023 Year End
| (4) These PSUs vest in three years if the Company achieves its return on invested capital goal established by the Board of Directors. |
Outstanding Equity Awards at Fiscal 2023 Year End
| (5) Award issued on July 6, 2021 and July 6, 2022 was in connection with Mr. Henson joining the Company. |
Outstanding Equity Awards at Fiscal 2023 Year End
| (6) These RSUs vest if the stock price is over $85 for 30 consecutive days. |
Outstanding Equity Awards at Fiscal 2023 Year End
| (7) These RSUs vest if the stock price is over $75 for 30 consecutive days. |
Outstanding Equity Awards at Fiscal 2023 Year End
| (8) These RSUs vest on the second anniversary of the grant. |
Outstanding Equity Awards at Fiscal 2023 Year End
| (9) Mr. Rajkowski had no equity awards outstanding at the end of the fiscal year. See “Potential Payments Upon Termination Or Change In Control” below. |
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested The following table shows all stock options exercised and value realized upon exercise by our Named Executive Officers during Fiscal 2023. The following table also shows all RSUs that vested and the value received upon vesting by our Named Executive Officers during Fiscal 2023:
2023 Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(2) ($) | | Michael T. Broderick | — | — | 10,862 | 485,229 | | Brian J. D’Ambrosia | — | — | 2,155 | 102,219 | | Maureen E. Mulholland | — | — | 1,075 | 52,134 | | Matt Henson | — | — | 1,444 | 64,114 | | Daniel J. Tripoli | — | — | 753 | 36,430 | | Robert J. Rajkowski(3) | 12,058 | 75,780 | 7,982 | 397,475 |
2023 Option Exercises and Stock Vested
| (1) The value realized equals the difference between the option exercise price and the fair market value of our common stock on the date of exercise, multiplied by the number of shares for which the option was exercised. |
2023 Option Exercises and Stock Vested
| (2) The value realized equals the fair market value of our common stock on the date of vesting, multiplied by the number of RSUs that vested. |
2023 Option Exercises and Stock Vested
| (3) Mr. Rajkowski’s stock awards vested upon his resignation effective July 31, 2022. |
Nonqualified Deferred Compensation Table
Nonqualified Deferred Compensation Table
Nonqualified Deferred Compensation Table
| Name | Executive Contributions in Last Fiscal Year ($)(1) | Company Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($)(4) | | Michael T. Broderick | 79,111 | 28,050 | 4,157 | — | 125,410 | | Brian J. D’Ambrosia | 27,204 | 11,349 | 6,972 | — | 161,024 | | Maureen E. Mulholland | 23,505 | 10,618 | 8,191 | — | 185,053 | | Matt Henson | 4,080 | 1,632 | 27 | — | 5,739 | | Daniel J. Tripoli(5) | — | — | 925 | — | 19,430 | | Robert J. Rajkowski(5) | — | — | — | — | — |
Nonqualified Deferred Compensation Table
| (1) Amounts in this column include amounts reported in the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns in the 2023 Summary Compensation Table. |
Nonqualified Deferred Compensation Table
| (2) These amounts are included in the “All Other Compensation” column of the 2023 Summary Compensation Table. |
Nonqualified Deferred Compensation Table
| (3) The portion of the amounts in this column in excess of 120% of the long-term applicable federal rate have been included in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the 2023 Summary Compensation Table. |
Nonqualified Deferred Compensation Table
| (4) Of the total amounts shown in this column, only $112,357 of Mr. D’Ambrosia’s amount and $118,034 of Ms. Mulholland’s amount have been previously reported as compensation in Summary Compensation Tables since 2002 when the prior Deferred Compensation Plan was implemented. The total amounts include compensation for years when they were not one of our Named Executive Officers. |
Nonqualified Deferred Compensation Table
| (5) Messrs. Tripoli and Rajkowski did not participate in the Deferred Compensation Plan for Fiscal 2023. |
Potential Payments Upon Termination Or Change In Control
Potential Payments Upon Termination Or Change In Control The following is a summary setting forth potential payments payable to our Named Executive Officers (other than Mr. Rajkowski) upon termination of employment or a change in control of the Company under their employment arrangements or letter agreements and our other compensation programs in effect as of March 25, 2023. Specifically, compensation payable to each of our Named Executive Officers upon voluntary termination, involuntary termination without cause, retirement, termination following a change in control, and in the event of death or disability of the executive is discussed below. The amounts shown in the tables below assume that such termination was effective as of March 25, 2023. Therefore, they include amounts earned through such time and are estimates of the amounts which would be paid out to the executives (or their beneficiaries) upon their termination. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such
Potential Payments Upon Termination Or Change In Control
| | 39 |
Potential Payments Upon Termination Or Change In Control
event, the price of our common stock and the executive’s age. For Mr. Rajkowski, the following summary sets forth the actual amounts that he received in connection with his resignation effective July 31, 2022. For all of the Named Executive Officers, these benefits are in addition to benefits available generally to salaried employees upon termination, such as earned but unpaid salary through the date of termination and amounts accrued and vested under our 401(k) Plan.
Payments Made Upon Any Termination
| • | amounts accrued and vested under the Company’s 401(k) and Nonqualified Deferred Compensation Plans. |
Table of Potential Payments Upon Change in Control
Table of Potential Payments Upon Change in Control The following table includes the intrinsic value (that is, the value based upon the price of the Company’s common stock, and in the case of options, minus the exercise price) of equity awards that would be exercisable or vested if the Named Executive Officer (other than Mr. Rajkowski) had been involuntarily terminated without cause or resigned for good reason on March 25, 2023 within two years following a change in control.
Table of Potential Payments Upon Change in Control
| Name | Base Salary ($) | Non-Equity Incentive Plan Compensation Award ($) | Stock Options ($) | RSUs ($) | PSUs ($) | Total ($) | | Michael T. Broderick | 1,456,000 | — | 68,327 | 1,813,444 | 625,154 | 3,962,925 | | Brian J. D’Ambrosia | 832,000 | — | 59,789 | 393,691 | 546,988 | 1,832,468 | | Maureen E. Mulholland | 707,200 | — | 71,397 | 291,378 | 468,847 | 1,538,822 | | Matt Henson | 707,200 | — | 51,247 | 665,497 | 426,670 | 1,850,614 | | Daniel J. Tripoli | 624,000 | — | 34,166 | 202,277 | 156,282 | 1,016,725 |
CEO Pay Ratio
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO, Michael T. Broderick. For Fiscal 2023, the median of the annual total compensation of all employees of the Company (other than our CEO) was $41,978 and the annual total compensation of our CEO was $1,559,720. Based on this information, we reasonably estimate that the ratio of the annual total compensation of our CEO to the median annual total compensation of all other employees for Fiscal 2023 was 37 to 1.
CEO Pay Ratio
| | 43 |
CEO Pay Ratio
To identify the median employee, we used the following methodology and material assumptions, adjustments and estimates:
CEO Pay Ratio
| • | We selected March 25, 2023, as the date upon which we would identify our median employee. We determined that, as of such date, we employed approximately 8,400 employees, including full-time, part-time and temporary employees. |
CEO Pay Ratio
| • | We chose gross pay for the period of March 27, 2022 through March 25, 2023 as the consistently applied compensation measure used to determine our median employee. We did not make any cost of living adjustments. |
CEO Pay Ratio
| • | As permitted by the SEC rules, we annualized the compensation of employees (other than seasonal and temporary employees) who were employed with us on March 25, 2023, but who were not employed for all of Fiscal 2023. Pursuant to SEC rules, we did not annualize the compensation of seasonal or temporary employees and we did not convert the compensation of part-time employees to a full-time equivalency. |
CEO Pay Ratio
| • | Applying this methodology, we determined that our median employee was a full-time hourly employee, working as a store-level technician. |
CEO Pay Ratio
After we identified our median employee, we calculated the median employee’s annual total compensation for Fiscal 2023 in accordance with the requirements of the applicable SEC rules. To calculate the pay ratio, we divided our CEO’s annual total compensation by our median employee’s annual total compensation. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
CEO Pay Ratio
| 44 | |
Pay Versus Performance
Pay Versus Performance The following table sets forth the compensation for our principal executive officer (the “PEO”) and the average c o mpensation for our other Named Executive Officers (“non-PEO NEOs”), both as reported in the Summary Compensation Table in this Proxy Statement and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under the SEC’s pay versus performance disclosure rules, for each of fiscal year 2023, 2022 and 2021. For further information concerning our pay-for-performance philosophy and how we align executive compensation with Company financial performance, refer to the CD&A in this Proxy Statement.
Pay Versus Performance
| A | B | C | D | E | F | G | H | I | | Year | Summary Compensation Table Total for PEO | Compensation “Actually Paid” to PEO | Average Summary Compensation Table Total for non-PEO NEOs | Average Compensation “Actually Paid” to non- PEO NEOs | Value of Initial Fixed $100 Investment Based On: | | Net Income ( in thousands ) | Revenue ( in thousands ) | | | | | | | Company TSR | Peer Group TSR | | | | 2023 | $1,559,720 | $1,492,150 | $935,240 | $887,887 | 130 | 188 | $39,048 | $1,325,382 | | 2022 | $4,554,904 | $3,125,422 | $1,198,786 | $868,745 | 114 | 194 | $61,568 | $1,359,328 | | 2021 | $1,298,669 | $1,696,771 | $700,640 | $847,295 | 168 | 188 | $34,319 | $1,125,721 |
Pay Versus Performance
The following table shows the executives who were included in columns B through E for fiscal years 2021, 2022 and 2023:
Pay Versus Performance
| | PEO | | | Non-PEO NEO | | | | Executive Name | 2021 | 2022 | 2023 | 2021 | 2022 | 2023 | | M. Broderick | | X | X | | | | | B. Ponton | X | | | | | | | R. Mellor | X | X | | | | | | M. Henson | | | | | X | X | | B. D’Ambrosia | | | | X | X | X | | M. Mulholland | | | | X | X | X | | R. Rajkowski | | | | X | X | X | | D. Tripoli | | | | X | | X |
Compensation Actually Paid to PEO and Average Compensation Actually Paid to
Compensation Actually Paid to PEO and Average Compensation Actually Paid to
NEOs (Columns C and E)
| | Summary Compensation Table Total | Minus summary compensation table value of STOCK awards | Minus summary compensation table value of OPTION awards | plus pay versus performance value of equity awards | equals compensation actually paid | | PEO | | | | | | | 2023 | $1,559,720 | $599,972 | $199,969 | $732,371 | $1,492,150 | | 2022 | $4,554,904 | $3,070,948 | $197,522 | $1,838,988 | $3,125,422 | | 2021 | $1,298,669 | $249,995 | $251,514 | $899,611 | $1,696,771 | | Average Non-PEO | | | | | | | 2023 | $935,240 | $407,486 | $144,982 | $505,116 | $887,887 | | 2022 | $1,198,786 | $496,829 | $142,071 | $308,858 | $868,745 | | 2021 | $700,640 | $112,479 | $113,176 | $372,310 | $847,295 |
NEOs (Columns C and E)
| • | Summary Compensation Table Value of Equity Awards includes the total grant date fair value of equity awards reported in the Stock Awards and Option Awards columns in the Summary Compensation Table. |
NEOs (Columns C and E)
| • | Pay Versus Performance Value of Equity Awards includes the following: |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, the Company is providing the following graphs with respect to the relationships between information presented in the Pay Versus Performance table. 1. CA P versus TSR As shown in the chart below, the PEO and other NEO CAP amounts are aligned with the Company’s TSR. This is due primarily to the Company’s use of equity incentives, which are tied directly to stock price in addition to the Company’s financial performance. The Fiscal Year 2022 PEO CAP is higher primarily due to the equity awards granted to the Company’s new CEO in that year. 2. CAP versus Net Income As shown in the chart below, the Company’s net income has fluctuated each year while the NEO CAP has not varied significantly, primarily due to the significant emphasis the Company places on equity incentives. The PEO CAP did increase significantly in Fiscal Year 2022, primarily due to the equity awards granted to the Company’s new CEO. In addition, when determining incentive plan payouts, the Company does use pre-tax income which closely correlates to net income.
Analysis of the Information Presented in the Pay Versus Performance Table
| 48 | |
Analysis of the Information Presented in the Pay Versus Performance Table
3. C AP versus Revenue As shown in the chart below, the Company’s revenue trend has been in line with the NEO CAP each year. The PEO CAP did increase significantly in Fiscal Year 2022, primarily due to the equity awards granted to the Company’s new CEO. In addition, the Company does use comparable store sales increases when determining incentive plan payouts.
Board of Directors
Board of Directors Following the receipt of the above-described unanimous recommendation of the Special Committee, the Board of Directors (at a meeting from which Mr. Solomon had recused himself) also reviewed certain pertinent factors in its decision to (i) approve the Reclassification Agreement and the Proposed Class C Amendments and the consummation of the Reclassification and the other transactions contemplated by the Reclassification Agreement, (ii) determine and declare that the terms of the Reclassification Agreement and the Proposed Class C Amendments and the Reclassification and the other transactions contemplated by the Reclassification Agreement are advisable, fair to, and in the best interests of, the Company and the Unaffiliated Shareholders, (iii) authorize the Company enter into the Reclassification Agreement, (iv) submit the approval of the Reclassification Amendment Proposal and the Liquidation Preference Amendment Proposal to shareholders at the Annual Meeting, and (v) recommend that shareholders approve such proposals at the Annual Meeting.
Board of Directors
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Board of Directors
In reaching its determinations and recommendations with respect to the Reclassification, the Board of Directors consulted with the Company’s management, the Special Committee, and the Company’s advisors in connection with the Reclassification, including Gibson Dunn, the Company’s outside legal counsel, and considered various material information and factors described below. Among the material information and factors considered by the Board of Directors were the following:
Board of Directors
| • | Negotiation by Special Committee. The Board of Directors considered the fact that the Reclassification, including the Reclassification Consideration and other aspects of the Reclassification, were negotiated on behalf of Monro by the Special Committee, consisting solely of independent and disinterested directors on the Board of Directors, with the assistance of its independent financial and legal advisors, and the support of the Company’s management. |
Board of Directors
| • | Recommendation of the Special Committee. The Board of Directors considered the unanimous recommendation of the Special Committee that the Board of Directors approve the Reclassification Agreement and the Proposed Class C Amendments and declare that the Reclassification Agreement and the Proposed Class C Amendments were advisable, fair to and in the best interests of the Monro and the Unaffiliated Shareholders, that the Board of Directors authorize Monro to enter into the Reclassification Agreement and, subject to Board of Directors’ approval, that the Board of Directors (a) submit the approval and the adoption of the Proposed Class C Amendments to the shareholders of Monro at the Annual Meeting, and (b) resolve to recommend that the Monro shareholders approve and adopt the Proposed Class C Amendments at the Annual Meeting. |
Board of Directors
| • | Factors Considered by the Special Committee. The Board of Directors discussed with the Special Committee and considered the factors considered by the Special Committee in reaching its recommendation, including the positive factors and potential benefits of the Reclassification and the potential adverse consequences, risks and negative factors of the Reclassification, as described above. The Board of Directors also took note of the fact that the Special Committee received advice from its legal and financial advisors and considered the content of the presentations made to the Board of Directors by the Special Committee and its advisors. |
Board of Directors
In reaching its determinations and recommendations with respect to the Reclassification, the Board of Directors concluded that the positive factors regarding the Reclassification outweighed the potential adverse consequences, risks and negative factors, as described above. The discussion of the information and factors that the Special Committee and the Board of Directors considered noted above in making their respective determinations and recommendations regarding the Reclassification is not intended to be exhaustive but includes the material factors considered. In view of the wide variety of factors considered and the complexity of these matters, neither the Special Committee nor the Board of directors found it useful to, and did not attempt to, quantify, rank or otherwise assign relative weight to these factors. In addition, the individual members of the Special Committee and the Board of Directors may have assigned different weight to different factors. The Special Committee and the Board of Directors each considered this information as a whole and overall considered the information and factors to be favorable to, and in support of, its determinations and recommendations.