DEF 14A of Five Below, Inc
Filed May 2, 2024 · FY20230001193125-24-128057
BOARD NOMINEES
BOARD NOMINEES The following table provides summary information about each director nominee. At the Annual Meeting, directors will be elected by a majority of votes cast for each director nominee.
BOARD NOMINEES
| | Director Since | Class | | Committee Membership* | | | | Name, Age | | | Principal Occupation | AC | CC | NCGC | | Joel D. Anderson, 59 | 2015 | II | President and Chief Executive Officer of Five Below | | | | | Kathleen S. Barclay, 68 | 2015 | II | Former Senior Vice President of Human Resources for The Kroger Co. | | | | | Karen Bowman, 60 | 2024 | I | Global Boardroom and Executive Program Leader at Deloitte | | | | | Dinesh S. Lathi, 53 | 2018 | III | Former President and Chief Executive Officer of Tailored Brands | | | | | Richard L. Markee, 70 | 2016 | III | Former Chairman of Vitamin Shoppe, Inc. | | | | | Thomas M. Ryan, 71 | 2011 | II | Operating Partner of Advent International Corporation | | | | | Mimi E. Vaughn, 57 | 2023 | II | President and Chief Executive Officer of Genesco, Inc. | | | | | Thomas G. Vellios, 69 | 2002 | III | Non-Executive Chairman of the Company | | | | | Zuhairah S. Washington, 46 | 2020 | III | Senior Advisor and Corporate Officer at Otrium | | | |
BOARD NOMINEES
| * AC Audit Committee | CC | Compensation Committee | | NCGC Nominating and Corporate Governance Committee | | Chair of the Committee |
BOARD OF DIRECTORS
BOARD OF DIRECTORS Our bylaws provide that the number of members of our board of directors shall be determined by our board from time to time. The number of members of our board is currently 12 and is divided into three classes with staggered terms. Beginning at the 2025 annual meeting of shareholders, our board will no longer be divided into classes, and all directors will be subject to election for one-year terms. At our Annual Meeting, shareholders will elect one Class I director (who was previously elected by our board of directors to fill a vacancy and thus whose term expires at the Annual Meeting), four Class II directors, and four Class III directors, in each case to hold office for a one-year term, until our 2025 annual meeting of shareholders. Unless otherwise specified in the proxy, the shares voted pursuant thereto will be cast for each of Messrs. Anderson, Lathi, Markee, Ryan and Vellios, and Mses. Barclay, Bowman, Vaughn and Washington. If, for any reason, at the time of election any of the nominees named should decline or be unable to accept his or her nomination or election, it is intended that such proxy will be voted for a substitute nominee, who would be recommended by our board of directors. Our board of directors, however, has no reason to believe that any of the nominees will be unable to serve as a director. The following biographical information is furnished as to each nominee for election as a director and each of the current directors.
Nominees for Election to the Board of Directors for a Term Expiring at the 2025 Annual Meeting
Nominees for Election to the Board of Directors for a Term Expiring at the 2025 Annual Meeting Joel D. Anderson. Mr. Anderson, 59, has served as a director since February 2015, when he was appointed to serve as our President and Chief Executive Officer. Prior to becoming our President and Chief Executive Officer, Mr. Anderson was our President and Chief Operating Officer from July 2014 through January 2015. Prior to joining Five Below, Mr. Anderson served as President and Chief Executive Officer of Walmart.com from 2011 until 2014 and as the divisional Senior Vice President of the Northern Plains division of Walmart, Inc., a global retailer, from 2010 to 2011. Prior to joining Walmart, Mr. Anderson was President of the retail and direct business units for Lenox Group, Inc. and served in various executive positions at Toys “R” Us Inc. over a 14-year period. Mr. Anderson currently serves as a director of Sprouts Farmers Market where he serves on the audit and compensation committees. Mr. Anderson’s experience in the retail industry as well as his position as our President and Chief Executive Officer led to the conclusion that he should serve as a director of Five Below. Kathleen S. Barclay. Ms. Barclay, 68, has served as a director since March 2015. Ms. Barclay served as the Senior Vice President of Human Resources for The Kroger Co., a $100 billion grocery supermarket company, from 2009 until her retirement in 2016. Prior to joining The Kroger Co., Ms. Barclay served in many leadership roles at General Motors Corporation, a multinational automotive corporation, from 1985 to 2010, including Vice President of Global Human Resources from 1998 to 2009. Ms. Barclay served as a director of Kontoor Brands from 2019 to 2023. Ms. Barclay’s senior leadership experience with a large-scale, growing retailer led to the conclusion that she should serve as a director of Five Below. Karen Bowman. Ms. Bowman, 60, has served as a director since January 2024. She is currently the Deloitte Global Boardroom and Executive Program Leader and the Deloitte US Vice Chairman and National Sector Leader for the Automotive Industry. Previously, she served as a member of the US Deloitte Board of Directors and as a member of the Board of Directors for Deloitte Consulting LLP. She was also the leader of the Deloitte US Business Transformation Integrated Market Offering. She has more than 30 years of professional and consulting experience across a broad range of industries, with specific focus on the consumer industry. She helps clients transform their businesses as well as align their people and business strategies. Ms. Bowman holds a Juris Doctor from Wake Forest University and a Bachelor’s Degree in Political Science from the University of Oklahoma. Ms. Bowman’s senior leadership experience spanning diverse industries, with a keen focus on the consumer industry, led to the conclusion that she should serve as a director of Five Below. Dinesh S. Lathi. Mr. Lathi, 53, has served as a director since March 2018. Mr. Lathi is currently the Chairman of the Board of RugsUSA, a leading e-commerce provider of area rugs and home décor products, where he previously held the position of interim Chief Executive Officer since January 2022, and a Senior Operating Partner at Francisco Partners Consulting. Mr. Lathi previously served as President and Chief Executive Officer of Tailored Brands, Inc., a leading specialty retailer of men’s suits and formalwear, from March 2019 to March 2021. He joined Tailored Brands’ board of directors in March 2016, and served as its Non-Executive Chairman from April 2017 to August 2018, and its Executive Chairman from August 2018 to March 2019. In August 2020 Tailored Brands, Inc. filed for Chapter 11 bankruptcy protection and, under Mr. Lathi’s leadership, emerged from such protection in December 2020. Previously, he was the Chief Executive Officer of One Kings Lane, a digital home decor shopping platform, from 2014 to 2016, where he also served as the Chief Operating Officer and Chief Financial Officer from 2011 to 2014. Prior to One Kings Lane, Mr. Lathi was a Vice President at eBay, a global online marketplace, where he managed several key areas, including Buyer & Seller Experience. Mr. Lathi’s 20 plus years of leadership experience in the technology and consumer space led to the conclusion that he should serve as a director of Five Below. Richard L. Markee. Mr. Markee, 70, has served as a director since May 2016. Mr. Markee currently serves as a director of Macy’s, Inc. Previously, Mr. Markee served in various leadership positions at Vitamin Shoppe, Inc., including as Non-Executive Chairman from January 2016 to June 2016 and from April 2007 to September 2009, Executive Chairman from April 2011 to January 2016 and Chief Executive Officer and Chairman of the Board from September 2009 to April 2011. He held senior management positions at Toys “R” Us, Inc. from 1998 through November 2006, including Vice Chair of Toys “R” Us, Inc. and President of the Babies “R” Us and the Toys “R” Us U.S. and international operation divisions from August 2004 through November 2006. Mr. Markee previously served as a director of Collective Brands, Inc., The Sports Authority, Inc., Dorel Industries and Toys “R” Us. Mr. Markee’s extensive experience in the retail industry led to the conclusion that he should serve as a director of Five Below. Thomas M. Ryan. Mr. Ryan, 71, has served as a director since 2011. In 2011, Mr. Ryan became an operating partner of Advent International Corporation as a part of its Operating Partner Program. Prior to joining our board of directors, Mr. Ryan served as the Chairman of the board of directors, President and Chief Executive Officer of CVS Caremark Corporation, now CVS Health, a retail pharmacy and healthcare corporation, until he retired in 2011. Mr. Ryan became the Chief Executive Officer of CVS Corporation in 1998 and he also served as the Chairman of the board of directors of CVS Corporation from 1999 to 2007. Mr. Ryan also served as the Chairman of CVS Health’s board of directors from 2007 to 2011. Mr. Ryan currently serves as a director of PJT Partners and previously served as a director of Bank of America Corporation, Yum! Brands, Inc. and Vantiv, Inc. Mr. Ryan’s experience in the retail industry, as both an executive officer and director of a large retail company, led to the conclusion that he should serve as a director of Five Below. Mimi E. Vaughn. Ms. Vaughn, 57, has served as a director since September 2023. Ms. Vaughn is currently President, Chief Executive Officer and Chair of the Board of Genesco Inc. (NYSE: GCO), the parent company of teen retail leader Journeys. Ms. Vaughn joined Genesco 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, including information technology and human resources, 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’s senior leadership experience in multi-brand specialty retail, with a particular focus on the teen customer, led to the conclusion that she should serve as a director of Five Below.
Nominees for Election to the Board of Directors for a Term Expiring at the 2025 Annual Meeting
Thomas G. Vellios. Mr. Vellios, 69, is the co-founder of Five Below and has served as our Chairman since June 2018, our Executive Chairman from February 2015 until June 2018, and as one of our directors since our incorporation in 2002. Mr. Vellios previously served as our Chief Executive Officer from 2002 until January 31, 2015. Mr. Vellios also served as our President from 2005 until June 2014. Previously, Mr. Vellios served as President, Chief Executive Officer and a director of Zany Brainy, Inc. Prior to joining Zany Brainy, Mr. Vellios served as Senior Vice President, General Merchandise Manager at Caldor, a regional discount chain and a division of the May Company. Mr. Vellios’ 25 plus years of experience in the specialty, department store and discount retail industry, his experience with the management, operations and finance of a retail business, and his knowledge of the Company as a founder led to the conclusion that he should serve as a director of Five Below. Zuhairah S. Washington. Ms. Washington, 46, has served as a director since September 2020. Ms. Washington is currently a senior advisor and corporate officer of Otrium, a purpose-driven online marketplace for designer outlet fashion brands. Prior to her assuming this role in January 2024, she served at Chief Executive Officer of Otrium from Julu 2021. Prior to Otrium, Ms. Washington was SVP and Global Head of Strategic Partners, Lodging and Vacation Rentals at Expedia Group, whose brands include Expedia, Hotels.com, Orbitz and VRBO, from January 2019 to August 2021. Prior to joining Expedia, Ms. Washington was at Egon Zehnder, a global management consulting and executive search firm, from 2018 to 2019, and Uber, where she grew businesses from startup to scale and ran one of the top five U.S. markets, from 2013 to 2018. She also founded Kahnoodle, which was named to Entrepreneur Magazine’s 100 Brilliant Companies of 2012. Ms. Washington currently serves as a director and a member of the audit committee of Olo, the leading on-demand e-commerce platform for the restaurant industry. Ms. Washington earned a joint graduate degree: a JD from Harvard Law School and an MBA from Harvard Business School, and graduated magna cum laude from UCLA with a BA in political science and public policy. In March of 2020, she was named as one of the 100 Most Influential Black Executives in Corporate America by Savoy Magazine. Ms. Washington’s senior leadership experience with large-scale, growing technology companies led to the conclusion that she should serve as a director of Five Below.
Members of the Board of Directors Continuing in Office for a Term Expiring at the 2025 Annual Meeting
Members of the Board of Directors Continuing in Office for a Term Expiring at the 2025 Annual Meeting Michael F. Devine, III. Mr. Devine, 65, has served as a director since March 2013. Mr. Devine is the former Executive Vice President and Chief Financial Officer of Coach, Inc. Mr. Devine served as Chief Financial Officer at Coach, Inc. since December 2001 and Executive Vice President and Chief Financial Officer since August 2007 until his retirement in August 2011. Mr. Devine currently serves as the Chairman of the Board of Deckers Outdoor Corporation, where he serves on the audit committee and compensation committee. Mr. Devine previously served as a director and member of the audit committee of both Express, Inc. and Nutrisystem, Inc. and as a director of Talbots and Sur La Table. Mr. Devine’s extensive experience in the retail industry, as both an executive officer and director, led to the conclusion that he should serve as a director of Five Below. Bernard Kim. Mr. Kim, 47, has served as a director since 2022. Mr. Kim has been the Chief Executive Officer of Match Group, Inc. since 2022. From 2016 to 2022, he served as the President of Publishing for Zynga Inc., a global leader in interactive entertainment with a mission to connect the world through games. Prior to joining Zynga, Mr. Kim spent nearly ten years at Electronic Arts Inc., as the company’s Senior Vice President of Mobile Publishing. In that role, he oversaw EA’s mobile distribution, strategy, product management, analytics, network engagement, marketing, revenue demand planning, business development, third-party publishing, and mergers & acquisitions. Before joining EA, Mr. Kim served as Director of Sales and Channel Strategy at The Walt Disney Company, where he led sales and retail for Disney Mobile. He holds Bachelor of Arts degrees in both Economics and Communications from Boston College. Mr. Kim’s senior leadership experience with large-scale, growing technology companies led to the conclusion that he should serve as a director of Five Below. Ronald L. Sargent. Mr. Sargent, 68, has served as a director since 2004. Mr. Sargent served as the Chief Executive Officer of Staples, Inc., an office supply company, from 2002 to June 2016 and as Chairman of its board of directors from 2005 to January 2017. Mr. Sargent currently serves as a director of Wells Fargo & Co., where he serves as the Chairman of the human resources committee and as a member of the governance and nominating committee and the audit committee, and The Kroger Co., where he serves as Lead Director, Chairman of the governance committee and as a member of the audit and public responsibilities committees. Mr. Sargent previously served as a director of The Home Depot, Inc. and Mattel, Inc. Mr. Sargent’s experience as an executive officer and director of Staples, Inc. as well as his extensive experience in the retail industry led to the conclusion that he should serve as a director of Five Below. In addition to the information presented above regarding each director’s or nominee’s specific experiences, qualifications, attributes and skills, we believe that all of our directors and nominees have a reputation for integrity and adherence to high ethical standards. Each of our directors and nominees has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to us and our board. Finally, we value our directors’ and nominee’s experience on other company boards and board committees. There are no family relationships among any of our directors, nominees or executive officers.
Summary of Qualifications and Demographics of Directors and Director Nominees
Summary of Qualifications and Demographics of Directors and Director Nominees The table below summarizes the specific qualifications, attributes, skills, experience and demographics of each director and nominee. In the case of nominees, these are what led our board of directors to conclude that the nominee is qualified to serve on our board of directors. As to the knowledge, skills and experience section, while each director and nominee is generally knowledgeable in each of these areas, an “X” in the chart below indicates that the item is a specific qualification, attribute, skill or experience that each director or nominee brings to our board of directors. The lack of an “X” for a particular item does not mean that the nominee does not possess that qualification, attribute, skill or experience.
Summary of Qualifications and Demographics of Directors and Director Nominees
| | | | | | | | | | | | | | | Branding Experience | X | | | X | X | | X | X | X | X | X | X | | Entrepreneurial | X | | | X | | X | X | X | X | | X | X | | Distribution/Logistics Experience | X | | | X | | | | | X | | X | | | Retail Experience | X | X | X | X | X | X | X | X | X | X | X | X | | Sales and Marketing Experience | X | | | | X | X | X | X | X | X | X | X | | Financial Literacy and Experience | X | X | X | X | X | X | X | X | X | X | X | X | | Public Company Management Experience | X | X | X | X | X | X | X | X | X | X | X | X | | Risk Oversight Experience | X | X | X | X | | X | X | X | X | X | X | | | Technology (Consumer, Cybersecurity, Big Data, Social) | X | | | X | X | X | | | | X | X | X | | Race / Ethnicity | | | | | | | | | | | | | | African American or Black | | | | | | | | | | | | X | | Alaskan Native or Native American | | | | | | | | | | | | | | Asian | | | | | X | X | | | | | | | | Hispanic or Latinx | | | | | | | | | | | | | | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | | White | X | X | X | X | | | X | X | X | | X | | | Two or More Races or Ethnicities | | | | | | | | | | X | | | | LGBTQ+ | | | | | | | | | | | | | | Did Not Disclose Demographic Background | | | | | | | | | | | | | | Gender Identity | | | | | | | | | | | | | | Female | | X | X | | | | | | | X | | X | | Male | X | | | X | X | X | X | X | X | | X | | | Non-Binary | | | | | | | | | | | | | | Did Not Disclose Gender | | | | | | | | | | | | | | Years | 9 | 9 | <1 | 11 | 2 | 6 | 7 | 13 | 20 | <1 | 22 | 3 |
Summary of Qualifications and Demographics of Directors and Director Nominees
The table below summarizes the aggregate diversity characteristics of our directors:
Summary of Qualifications and Demographics of Directors and Director Nominees
| Board Diversity Matrix | | | Total Number of Directors | 12 |
Summary of Qualifications and Demographics of Directors and Director Nominees
| | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 4 | 8 | — | — | | Part II: Demographic Background | | | | | | African American or Black | 1 | — | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | 2 | — | — | | Hispanic or Latinx | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 2 | 6 | — | — | | Two or More Races or Ethnicities | 1 | — | — | — | | LGBTQ+ | — | | | | | Did Not Disclose Demographic Background | — | | | |
Director Compensation
Director Compensation In fiscal 2022, we engaged Meridian Compensation Partners, LLC (“Meridian”), the compensation committee’s independent advisor, to review the competitiveness of compensation provided to the board. Based on Meridian’s assessment and the board’s comparison to market, the compensation committee did not make any adjustments to board compensation for fiscal year 2023. Accordingly, in fiscal 2023, each of our non-employee directors was entitled to the following pursuant to our Compensation Policy for Non-Employee Directors:
Director Compensation
| • | an annual cash retainer of $85,000, paid quarterly, appropriately pro-rated for partial quarters served; |
Director Compensation
| • | an additional annual cash retainer of $80,000 for the non-executive Chairman of the board, paid quarterly, appropriately pro-rated for partial quarters served; |
Director Compensation
| • | an additional annual cash retainer of $30,000 for the audit committee Chair, $25,000 for the compensation committee Chair and $20,000 for the nominating and corporate governance committee Chair, paid quarterly, appropriately pro-rated for partial quarters served; and |
Director Compensation
| • | an annual equity grant with a fair market value of $165,000 in the form of restricted stock units vesting on the date of the next annual meeting, with an additional restricted stock unit grant with a fair market value of $150,000 for the non-executive Chairman of the board with the same vesting terms. |
Director Compensation
| • | If a person becomes a member of the board (including non-executive Chairman of the board) at least 90 days prior to an annual meeting, such person will receive an initial grant of restricted stock units having a Fair Market Value equal to the annual award (and the additional award for the non-executive Chairman, if applicable), appropriately prorated based on the number of days from such person’s commencement of service until the next annual meeting date over 365, and vesting on the next annual meeting date. |
Director Compensation
Each non-employee director has the option to receive some or all of his or her cash retainer in the form of shares of our common stock. Directors do not receive a fee for attending meetings, but they are entitled to reimbursement of travel expenses relating to their service. In addition, Mr. Vellios and his spouse are covered under the Company’s group health plan through fiscal year 2023. The following table sets forth information on the compensation of all our non-employee directors for fiscal 2023:
Director Compensation
| Name | Fees Earned or Paid in Cash (1) ($) | Stock Awards (2) ($) | All Other Compensation ($) | Total ($) | | Kathleen S. Barclay | 105,000 | 164,845 | — | 269,845 | | Karen Bowman | 0 | 62,980 | — | 62,980 | | Michael F. Devine III | 110,000 | 164,845 | — | 274,845 | | Bernard Kim | 85,000 | 164,845 | — | 249,845 | | Dinesh S. Lathi | 115,000 | 164,845 | — | 279,845 | | Richard L. Markee | 85,000 | 164,845 | — | 249,845 | | Thomas M. Ryan | 85,000 | 164,845 | — | 249,845 | | Ronald L. Sargent | 85,000 | 164,845 | — | 249,845 | | Mimi E. Vaughn | 9,341 | 120,465 | — | 129,806 | | Thomas G. Vellios | 165,000 | 314,930 | 18,525(3) | 498,455 | | Zuhairah S. Washington | 85,000 | 164,845 | — | 249,845 |
Director Compensation
| (1) Cash fees include annual director’s retainer and, where applicable, committee Chair and non-executive Chairman fees. Ms. Bowman commenced her service as a director in January 2024 and therefore received no annual cash retainer for fiscal 2023. Ms. Vaughn received a pro-rated annual cash retainer based on her commencement of service as a director in September 2023. Messrs. Lathi, Markee, Ryan, Sargent and Vellios, and Ms. Barclay elected to receive part of their fees in shares of Company stock in the following amounts: $114,412 for Mr. Lathi, $84,565 for Mr. Markee, $84,878 for Mr. Ryan, $84,506 for Mr. Sargent, $41,250 for Mr. Vellios and $104,295 for Ms. Barclay. |
Director Compensation
| (2) The amounts reported in this column reflect the fair value on the grant date of the restricted stock unit awards granted in fiscal 2023 computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation—Stock Compensation. For a discussion of the assumptions and methodologies used to calculate the amounts referred to above, please see the discussion of restricted stock unit awards contained in Note 1 and Note 8 to the consolidated financial statements included as a part of the 2023 Form 10-K, filed with the SEC on March 21, 2024. Mses. Bowman and Vaughn received initial equity award grants of restricted stock units, pro-rated based on their commencement of service as directors in January 2024 and September 2023, respectively. The aggregate number of shares subject to restricted stock units outstanding at fiscal year-end for each non-employee director was as follows: 338 units for Ms. Bowman, 767 units for Ms. Vaughn, 860 units for each of Mses. Barclay and Washington, and Messrs. Devine, Kim, Lathi, Markee, Ryan and Sargent, and 1,643 units for Mr. Vellios, each of which will vest on the date of the Annual Meeting. |
Director Compensation
| (3) This amount reflects the value of coverage under the Company’s group health plan. |
Director Compensation
In fiscal 2023, we engaged Meridian once again to review the competitiveness of compensation provided to the board. Following this review, the compensation committee determined to make the following changes effective June 11, 2024 and thereafter:
Director Compensation
| • | the annual cash retainer was increased from $85,000 to $90,000; |
Director Compensation
| • | the additional annual cash retainer for the audit committee Chair was increased from $30,000 to $35,000; |
Director Compensation
| • | the additional annual cash retainer for the compensation committee Chair was increased from $25,000 to $30,000; |
Director Compensation
| • | the additional annual cash retainer for the nominating and corporate governance committee Chair was increased from $20,00 to $25,000; and |
Director Compensation
| • | the annual equity grant was increased from a fair market value of $165,000 to $175,000. |
Director Compensation
Our non-employee directors are subject to stock ownership guidelines. Pursuant to the guidelines, each non-employee director is required to own shares of our common stock having an aggregate fair market value equal to or greater than five times the highest annual cash retainer payable to a non-employee director in the preceding calendar year pursuant to the Compensation Policy for Non-Employee Directors. For purposes of the guidelines, the highest annual cash retainer will include any cash retainer payable in a given calendar year (even if the payment of which is deferred to a later calendar year) and the value of shares or other property received in lieu of a cash retainer in a given calendar year. Any non-employee director serving at the time the guidelines were adopted in 2014 was given five years from the adoption of the guidelines to attain the specified level of equity ownership. Any non-employee director appointed or elected following the adoption of the guidelines is given five years from the date of such appointment or election to attain the specified level of equity ownership. Compliance with the stock ownership guidelines is measured annually on the first trading day of each calendar year, using the closing price of the Company’s common stock on that day. As of January 2, 2024, all non-employee directors for whom the stock ownership guidelines were effective were in compliance. For purposes of the guidelines, a non-employee director’s holdings include: shares held outright by the non-employee director; vested restricted shares and shares subject to vested but unsettled restricted stock units held by the non-employee director; and, in the discretion of the compensation committee, shares otherwise beneficially owned by the non-employee director. Our board of directors may waive compliance with the guidelines on a case by case basis, but it is anticipated that waivers will be rare and in the event of such a waiver, the board of directors will develop alternative ownership guidelines that reflect the intent of these guidelines and the non-employee director’s personal circumstances.
Fiscal 2023 Compensation Highlights
| • | CFO Hire: In June of 2023 our board of directors appointed Kristy Chipman as the Company’s chief financial officer, principal accounting officer and treasurer effective on or about July 17, 2023. In connection with her appointment, the Company entered into a letter agreement with Ms. Chipman to set forth the initial terms of her employment and compensation, as approved by the board and compensation committee. Ms. Chipman had an initial base salary of $600,000 per year and a target payout under the Company’s short-term (i.e., annual) incentive plan equal to 75% of her base salary (provided that her actual payout for any year may range from zero to 200% of target, depending on actual individual and/or corporate performance in that year). In addition, Ms. Chipman received a new hire equity grant of a number of time-vested restricted stock units and performance-vested restricted stock units as otherwise disclosed herein. |
Fiscal 2023 Compensation Highlights
| • | Annual Incentive Bonuses: |
Fiscal 2023 Compensation Highlights
| • | Target Bonus Opportunities. Fiscal 2023 target bonus opportunities (reflected as a percentage of base salary) were increased from fiscal 2022 levels for Mr. Anderson (to 150% from 125%) and Messrs. Bull and Romanko (to 100% from 85%). |
Fiscal 2023 Compensation Highlights
| • | Fiscal 2023 Annual Incentive Bonus Payout. Based on the Company’s achievement of $3.56 billion in net sales, and $404 million of operating income in fiscal year 2023, the incentive bonus yielded a 72% of target payout (per the metrics which were established in advance by the compensation committee in early fiscal 2023) for each of our executive officers. |
Fiscal 2023 Compensation Highlights
| • | Long-term Equity Incentive Grants: |
Fiscal 2023 Compensation Highlights
| • | In March 2023 the compensation committee granted equity awards to each NEO (except for Ms. Chipman, who was granted her awards in July 2023) consisting of time-vesting restricted stock units (“RSUs”) with a 25% weighting and performance-based restricted stock units (“PRSUs”) with a 75% weighting. |
Fiscal 2023 Compensation Highlights
| • | The RSUs vest 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversaries of the grant date, generally contingent on continued employment with the Company. |
Peer Group
Peer Group The peer group for market compensation analysis we used in fiscal 2023 was developed by the compensation committee with the support of Meridian, its independent advisor. The group used for fiscal 2023 purposes was comprised of the following similarly-situated companies within the retail industry:
Peer Group
| American Eagle Outfitters, Inc. Burlington Stores Carters Columbia Sportswear Deckers Outdoor Designer Brands Floor & Décor Lululemon Athletica | Ollie’s Bargain Outlet RH Sleep Number Ulta Beauty, Inc. Under Armour Urban Outfitters Williams-Sonoma |
Peer Group
At the time the peer group was established, the median of the peer group approximated $3.7B, $4.9B and 24% in terms of revenue dollars, market capitalization and 3-year revenue growth, respectively. While our revenue approximated the 25th percentile, our market cap was positioned above the 60th percentile and our 3-year revenue growth was above the 95th percentile. Our peer group companies were selected based on industry and size, but also took into account our profile as a growth company. During 2023, the compensation committee reviewed the peer group with assistance from Meridian and determined it was appropriate to modify the group. Companies excluded were: Carter’s, Designer Brands, Sleep Number and Under Armour. The compensation committee added Abercrombie & Fitch, Bath and Body Works, Crocs and Etsy. The revised peer group was used by the compensation committee in connection with its fiscal 2024 compensation decisions.
Compensation Consultant
Compensation Consultant In fiscal 2023, the compensation committee engaged Meridian as its independent compensation consultant to conduct market reviews and to provide assistance, guidance, and consideration with respect to, among other things:
Compensation Consultant
| • | Our compensation philosophy and peer group; |
Compensation Consultant
| • | Targeted compensation amounts for Named Executive Officers; |
Compensation Consultant
| • | Ongoing annual and long-term incentive compensation strategy and design; |
Compensation Consultant
| • | Board of directors’ compensation levels and structure; and |
Compensation Consultant
| • | Overall market trends, regulatory developments, and other executive and governance related pay matters |
Compensation Consultant
The compensation committee, in conjunction with its compensation advisor, regularly reviews various elements of our compensation program for both crew and directors. In fiscal 2023, Meridian supported the compensation committee with the mandates listed above and also provided other support, including an update on executive compensation governance and regulatory trends. The compensation committee has examined the independence of Meridian under factors contained in the Nasdaq listing standards and determined that Meridian is independent and concluded that their work for us does not raise any conflict of interest. Because of policies and procedures that Meridian and the compensation committee have in place, the compensation committee is confident that the advice it receives from executive compensation consultants at Meridian is objective and not influenced by Meridian’s or its affiliates’ relationships with the Company or its officers.
Annual Incentive Bonus
Annual Incentive Bonus Named Executive Officers earn cash incentive awards under the Five Below, Inc. 2020 Performance Bonus Plan (“Incentive Bonus Plan”) for achieving and exceeding our annual financial goals. The Incentive Bonus Plan is administered by the compensation committee. Payouts under the plan are calculated based on our performance relative to targets that are approved by the compensation committee each year. In March 2023, the compensation committee approved the Incentive Bonus Plan design and performance targets for the Named Executive Officers for fiscal 2023. The compensation committee adopted a weighted scorecard approach in 2023 to provide a balanced and motivating annual incentive plan that is also aligned with market best practices.
Annual Incentive Bonus
| • | Each Named Executive Officer has a targeted bonus opportunity defined as a percent of base salary. For fiscal 2023, the target bonus opportunity as a percentage of base salary: for Mr. Anderson was 150%, for Messrs. Bull and Romanko was 100%, and for Ms. Chipman and Messrs. Hill and Specter were 75%. |
Annual Incentive Bonus
| • | The payout opportunity is based on pre-incentive adjusted operating income (defined below) and total Company sales (referred to as “net sales”) for all Named Executive Officers. “Pre-Incentive Adjusted Operating Income” means the Company’s operating income (determined prior to giving any effect to any bonuses potentially payable under the Incentive Bonus Plan) as reflected in the Company’s audited financial statements, adjusted to exclude the impact of: (a) all expense (net of reimbursement) incurred as part of a public offering of the Company’s securities, whether by the Company or by selling shareholders or both; (b) expenses incurred related to acquisition transaction costs; (c) income/expense incurred due to a change in accounting principles; (d) external expenses incurred during the start-up period for any new business venture; and (e) any other adjustments that may be approved by the compensation committee. See Appendix A-1 for a reconciliation of Pre-Incentive Adjusted Operating Income to operating income. |
Annual Incentive Bonus
| • | Payouts for each metric can range from 0% to 200% of target, with payouts interpolated on a linear basis for actual performance that falls between threshold, target, above target and maximum performance goals. |
Annual Incentive Bonus
| • | For the portion of the bonus determined based on pre-incentive adjusted operating income, no amount may be earned if pre-incentive adjusted operating income does not meet the threshold level; and for the portion of the bonus determined based on net sales, no amount may be earned if net sales do not meet the threshold level. In addition, for the portion of the bonus determined based on net sales, payout is capped at target if pre-incentive adjusted operating income does not equal or exceed the threshold level. |
Annual Incentive Bonus
In early fiscal 2023, the compensation committee set target goals that were challenging and considered the Company’s growth expectations and strategy. Additionally, the level of performance required to achieve maximum payout under the Incentive Bonus Plan was determined by the compensation committee to be reflective of truly outstanding performance. The table below summarizes performance levels for pre-incentive adjusted operating income and net sales under the Incentive Bonus Plan for fiscal 2023:
Annual Incentive Bonus
| Metric | Fiscal 2023 Bonus Metric Weightings (% of Target) | Threshold (25% payout) | Target (100% payout) | Maximum (200% payout) | Actual Achievement | Actual Achievement (% of Target) | | Pre-Incentive Adjusted Operating Income | 60% | $365.2 million | $456.5.5 million | $525.0 million | $404.0 million | 62% | | Net Sales | 40% | $3,374.0 million | $3,602.3 million | $3,773.5 million | $3,559.4 million | 87% |
Annual Incentive Bonus
The target bonus opportunities and bonus achievement for each of our Named Executive Officers for fiscal 2023 were as follows:
Annual Incentive Bonus
| Named Executive Officer | Fiscal 2023 Target Bonus (% of base salary) | Fiscal 2023 Bonus Achievement (% of Target) | | Joel D. Anderson | 150% | 72% | | Kenneth R. Bull | 100% | 72% | | Kristy Chipman | 75% | 72% | | George Hill | 75% | 72% | | Michael F. Romanko | 100% | 72% | | Eric M. Specter | 75% | 72% |
Long-term Equity Incentive Compensation
Long-term Equity Incentive Compensation Equity awards are a vital piece of our total compensation package. They are intended to compensate Named Executive Officers for sustained long-term performance, align the interests of our Named Executive Officers and shareholders and encourage retention through multi-year vesting schedules. Long-term equity incentive awards may take a variety of forms, including the PRSU and RSU grants made in fiscal 2023. Levels, mix, and frequency of awards are determined by the compensation committee, and are designed to reflect each recipient’s level of responsibility and performance.
Overview of Fiscal 2023 Long-term Equity Incentive Awards
Overview of Fiscal 2023 Long-term Equity Incentive Awards Our long-term equity incentive program for fiscal 2023 delivered 25% of long-term equity incentive value in RSUs and 75% in PRSUs for our Named Executive Officers. We believe this balance of equity grants will motivate and reward grantees for long-term, sustainable performance that is aligned with shareholder interests. The value of our annual equity grants is targeted to be at competitive levels, though actual value realized will vary based on our long-term performance. For fiscal 2023, the stated values of the annual equity grants approved by our compensation committee were: $6,500,000 for Mr. Anderson, $2,500,000 for each of Messrs. Bull and Romanko, $1,500,000 for Mr. Hill, $900,000 for Mr. Specter, and $500,000 for Ms. Chipman. In addition, when Ms. Chipman joined the Company in July 2023, she was also awarded a one-time new hire award of $250,000 in time-vested restricted stock units (in addition to the 2023 annual equity grant described above). These stated values were converted into a number of RSUs and PRSUs by dividing the applicable dollar amount by the closing price of our common stock on the date of grant. Note, however, that the value of these equity grants reported in the Summary Compensation Table and the Grant of Plan-Based Awards Table below is required by SEC rules to be reported based on the grant date fair value of each award, as measured for accounting purposes. For technical reasons, the accounting value for the PRSUs differ from the values noted in this paragraph. Restricted Stock Units The retentive element of RSUs that vest solely based on continued service provides a complement to the PRSUs, which, in addition to containing a service-based vesting component, vest based on the achievement of specified performance criteria. Each RSU represents the right to receive one share of our stock, contingent on continued service to the Company. See “Grant of Plan-Based Awards Table” for more information on the awards granted in fiscal year 2023. RSUs generally vest over a four-year period, with 50% vesting on the second anniversary of grant and 25% vesting on each of the third and fourth anniversaries. In addition, RSUs granted in fiscal 2020 or after generally become fully vested upon a Named Executive Officer’s termination due to his or her death or disability. 2023 Performance-based Restricted Stock Units The PRSUs granted in March of 2023 (the “2023 PRSUs”) were designed to reward performance over a three-year performance period. Key design details include:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | PRSUs represent the right to receive shares of our common stock based on the attainment of applicable performance criteria and, generally, are further subject to continued service through the performance period. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Performance for 50% of the award is evaluated based on the Company’s three-year cumulative operating income, subject to adjustments, if any, as determined by the compensation committee (the “AOI Units”). |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Performance for the remaining 50% of the award is evaluated based on the Company’s relative total shareholder return performance against the Company’s compensation per group (split equally between four performance periods, each commencing on January 29, 2023 and ending on the last day of each fiscal quarter of fiscal 2025, respectively), subject to adjustments, if any, as determined by the compensation committee (the “TSR Units”). |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Vesting of PRSUs is generally conditioned on continued service through the end of fiscal 2025, with accelerated vesting in certain cases, as noted below. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | The compensation committee chose these metrics because it believes that there is a strong relationship between growth in operating income, growth in total shareholder return and growth in shareholder value. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Between 0%-200% of the PRSUs can be earned at the end of the three-year performance period. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
The 2023 PRSUs also included the following accelerated vesting terms. Upon a Named Executive Officer’s termination of employment due to death or disability, AOI Units will vest at the target level, any previously earned TSR Units for closed performance periods will vest, and TSR Units for uncompleted TSR periods will vest at the target level. Upon a change in control, AOI Units will vest at the target level, any previously earned TSR Units for closed performance periods will vest, and TSR Units for uncompleted TSR periods will vest at the greater of the target level or the actual performance level through the change in control, as determined in the compensation committee’s discretion. We believe that achievement of the target level of performance approved by the compensation committee for the PRSUs for each metric granted in fiscal 2023 is challenging, but achievable with significant effort and skill, and that the maximum level of performance would be indicative of truly outstanding performance. The AOI Units are eligible to be earned based the Company’s three-year cumulative operating income over the performance period, as follows, with interpolation for performance between any two levels:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| | Payout % of Target | | Maximum | 200% | | Target | 100% | | Threshold | 50% |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
One fourth of the TSR Units awarded under the 2023 PRSUs are eligible to be earned based on relative TSR performance during each performance period as follows, with interpolation for performance between any two levels:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| | TSR Performance Percentile | % of Target TSR Units Earned | | Maximum | 80th | 200% | | Target | 55th | 100% | | Threshold | 30th | 25% |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
2022 Performance-based Restricted Stock Units The PRSUs granted in March of 2022 (the “2022 PRSUs”) were designed to reward performance over a three-year performance period. Key design details include:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | PRSUs represent the right to receive shares of our common stock based on the attainment of applicable performance criteria and, generally, are further subject to continued service through the performance period. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Performance for 50% of the award is evaluated based on the Company’s three-year cumulative operating income, subject to adjustments, if any, as determined by the compensation committee (the “AOI Units”). |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Performance for the remaining 50% of the award is evaluated based on the Company’s relative total shareholder return performance against the Company’s compensation per group (split equally between four performance periods, each commencing on January 30, 2022 and ending on the last day of each fiscal quarter of fiscal 2024, respectively), subject to adjustments, if any, as determined by the compensation committee (the “TSR Units”). |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Vesting of PRSUs generally subject to continued service through the end of fiscal 2024, with accelerated vesting in certain cases, as noted below. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | The compensation committee chose these metrics because it believes that there is a strong relationship between growth in operating income, growth in total shareholder return and growth in shareholder value. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| • | Between 0%-200% of the PRSUs can be earned at the end of the three-year performance period. |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
The 2022 PRSUs also included the following accelerated vesting terms. Upon a Named Executive Officer’s termination of employment due to death or disability, AOI Units will vest at the target level, any previously earned TSR Units for closed performance periods will vest, and TSR Units for uncompleted TSR periods will vest at the target level. Upon a change in control, AOI Units will vest at the target level, any previously earned TSR Units for closed performance periods will vest, and TSR Units for uncompleted TSR periods will vest at the greater of the target level or the actual performance level through the change in control, as determined in the compensation committee’s discretion. We believe that achievement of the target level of performance approved by the compensation committee for the PRSUs for each metric granted in fiscal 2022 is challenging, but achievable with significant effort and skill, and that the maximum level of performance would be indicative of truly outstanding performance. The AOI Units are eligible to be earned based the Company’s three-year cumulative operating income over the performance period, as follows, with interpolation for performance between any two levels:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| | Payout % of Target | | Maximum | 200% | | Target | 100% | | Threshold | 50% |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
One fourth of the TSR Units awarded under the 2022 PRSUs are eligible to be earned based on relative TSR performance during each performance period as follows, with interpolation for performance between any two levels:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| | TSR Performance Percentile | % of Target TSR Units Earned | | Maximum | 85th | 200% | | Target | 55th | 100% | | Threshold | 25th | 25% |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
2021 Performance-based Restricted Stock Units The compensation committee awarded PRSUs to the NEOs in March of 2021 (the “2021 PRSUs”). Performance for 50% of the award is evaluated based on the Company’s three-year cumulative operating income from fiscal 2021 through fiscal 2023 (the “2021 AOI Units”). Performance for the remaining 50% of the award is evaluated based on the Company’s relative total shareholder return performance against the Company’s compensation per group (split equally between three performance periods, each commencing on January 31, 2021 and ending on the last day of fiscal 2021, fiscal 2022, and fiscal 2023) (the “2021 TSR Units”). The 2021 AOI Units were eligible to be earned based the Company’s three-year cumulative operating income over the performance period, as follows, with interpolation for performance between any two levels:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| | % of Target 2021 AOI Units Earned | Operating Income over the Performance Period (in million) | | Maximum | 200% | $1,248 | | Target | 100% | $1,136 | | Threshold | 50% | $1,021 |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
In March 2024, based on achievement of $1.10 billion adjusted operating income in fiscal 2023, the compensation committee certified the 2021 AOI Units at a payout of approximately 88%. For each performance period, the applicable number of 2021 PRSUs could be earned based on relative TSR performance as follows, with interpolation for performance between any two levels:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| | TSR Performance Percentile | % of Target 2021 TSR Units Earned | | Maximum | 90th | 200% | | Outperformance | 75th | 150% | | Target | 55th | 100% | | Threshold | 25th | 25% |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
The compensation committee has determined the following performance outcomes for each closed performance period of the 2021 PRSUs:
Overview of Fiscal 2023 Long-term Equity Incentive Awards
| Period of 2021 PRSUs | Determination by Committee | Percentile TSR Performance | % of Target PRSUs Earned | | Period #1 | March 2022 | 29.94th | 37.35% | | Period #2 | March 2023 | 53.39th | 96.48% | | Period #3 | March 2024 | 53.60th | 96.5% |
Overview of Fiscal 2023 Long-term Equity Incentive Awards
Based on this, in March 2024, the compensation committee certified a payout for the 2021 TSR Units of approximately 77%. Accordingly, the compensation committee certified the overall payout under the 2021 PRSUs at approximately 83% of target.
Severance Arrangements
Severance Arrangements The Company maintains the Five Below, Inc. Executive Severance Plan (the “Severance Plan”). Under the Severance Plan, each of Ms. Chipman, and Messrs. Hill and Romanko, as well as other senior executives of the Company, are eligible to receive 12 months of salary and reimbursements of COBRA expenses upon a termination of employment by the Company without “cause” or a resignation by such executive for “good reason.” Messrs. Anderson and Specter are not eligible to receive benefits under the Severance Plan, but have severance entitlements built into their employment agreements. Mr. Bull has severance entitlements under both his employment agreement and the Severance Plan. The benefits potentially payable to each executive upon a termination pursuant to the Severance Plan and/or individual employment agreements are more fully described below in the section entitled “Executive Compensation—Potential Payments Upon Termination or Change of Control.” As a general matter, the compensation committee believes that severance arrangements, when properly tailored, are appropriate and necessary to retain the Named Executive Officers and to recruit other potential executive candidates. The compensation committee also believes that reasonable severance benefits should generally be:
Severance Arrangements
| • | established with reference to an executive’s position and current cash compensation opportunities, not with reference to his or her tenure; |
Severance Arrangements
| • | conditioned upon execution of a release of claims against the Company and its affiliates; and |
Severance Arrangements
| • | accompanied by the executive’s commitment not to compete with the Company for a reasonable period following any cessation of his or her employment. |
Severance Arrangements
No Named Executive Officer of the Company has a right to receive a tax gross-up related to the impact of the excise tax under Section 280G of the Internal Revenue Code.
Named Executive Officer Base Salaries and Target Bonus Opportunity
Named Executive Officer Base Salaries and Target Bonus Opportunity After the end of fiscal 2023, upon considering our fiscal 2023 performance, the findings from compensation benchmarking conducted for our Named Executive Officers, and the individual performance of each Named Executive Officer, the compensation committee approved the following changes to the base salary rates of our Named Executive Officers to ensure ongoing alignment with our compensation philosophy.
Named Executive Officer Base Salaries and Target Bonus Opportunity
| Named Executive Officer | 2023 Base Salary (Rate) | 2024 Base Salary (Rate) | | Joel Anderson | $1,250,000 | $1,300,000 | | Kenneth R. Bull | $750,000 | $775,000 | | Kristy Chipman | $600,000 | $650,000 | | George Hill | $675,000 | $700,000 | | Michael F. Romanko | $725,000 | $750,000 | | Eric M. Specter | $635,000 | $650,000 |
Named Executive Officer Base Salaries and Target Bonus Opportunity
In addition, the compensation committee approved an increase in the target bonus opportunity for Mr. Anderson to 175% from 150% for fiscal 2024.
Summary Compensation Table
Summary Compensation Table The following table shows the annual compensation paid to or earned by the Named Executive Officers for fiscal years 2023, 2022 and 2021:
Summary Compensation Table
| Name & Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | | Joel D. Anderson | 2023 | 1,250,000 | | 7,576,450 | 1,350,000 | 8,904 | 10,185,354 | | President and Chief Executive Officer | 2022 | 1,211,538 | | 5,812,090 | | 2,923 | 7,026,551 | | | 2021 | 1,000,000 | | 5,279,695 | 2,750,000 | 18,227 | 9,047,922 | | Kenneth R. Bull † | 2023 | 718,269 | | 2,914,186 | 540,000 | 13,385 | 4,185,840 | | Chief Operating Officer | 2022 | 654,615 | | 1,107,013 | | 27,101 | 1,788,729 | | | 2021 | 641,082 | | 950,264 | 1,203,814 | 22,602 | 2,817,762 | | Kristy Chipman † | 2023 | 290,769 | | 816,960 | 324,000 | 750 | 1,432,749 | | Chief Financial Officer & Treasurer | | | | | | | | | George Hill | 2023 | 649,135 | | 1,748,569 | 364,500 | 11,298 | 2,773,502 | | Michael F. Romanko | 2023 | 717,308 | | 2,914,186 | 522,000 | 16,692 | 4,170,186 | | Chief Merchandising Officer | 2022 | 670,192 | | 2,160,542 | | 21,896 | 2,852,630 | | | 2021 | 641,082 | | 950,264 | 1,203,814 | | 2,795,160 | | Eric M. Specter | 2023 | 613,289 | | 1,049,008 | 342,900 | 13,288 | 2,018,485 | | Chief Administrative Officer | 2022 | 586,700 | | 885,665 | | 27,062 | 1,499,427 | | | 2021 | 574,409 | | 633,256 | 951,720 | 24,671 | 2,184,056 |
Summary Compensation Table
| (1) The amounts in this column, computed in accordance with current Financial Accounting Standard Board guidance for accounting for and reporting of stock-based compensation, represent the aggregate grant-date fair value of time-based restricted stock unit and performance-based restricted stock unit awards. Further detail surrounding the awards, the method of valuation and the assumptions made are set forth in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Company’s Annual Report on Form 10-K under “Critical Accounting Policies and Estimates.” For this purpose, the operating income portion of the PRSUs are valued based on the probable outcome of the performance condition at target, as determined for purposes of applicable accounting rules as of the grant date. The amounts in the “Stock Awards” column that are attributable to the operating income portion of the PRSUs based on this valuation methodology are: $2,437,516 for Mr. Anderson, $937,568 for Mr. Bull, $562,581 for Mr. Hill, $937,568 for Mr. Romanko, $337,428 for Mr. Specter and $187,557 for Ms. Chipman. The value of the maximum number of shares that could be earned under the operating income portion of the PRSU awards, based on the closing price of our shares on the grant date, is $4,875,032 for Mr. Anderson, $1,875,136 for Mr. Bull, $1,125,162 for Mr. Hill, $1,875,136 for Mr. Romanko, $674,856 for Mr. Specter and $375,114 for Ms. Chipman. |
Summary Compensation Table
| (2) The amounts in this column for 2023 reflect annual incentive bonus payments as a result of fiscal 2023 performance, as described under “Compensation Discussion and Analysis—Annual Incentive Bonus.” |
Summary Compensation Table
| (3) The amounts in the “All Other Compensation” column for fiscal 2023 relate solely to Company matching contributions under the Five Below 401(k) Retirement Savings Plan. |
Summary Compensation Table
| † Ms. Chipman joined the Company in July 2023. Prior to Ms. Chipman joining, Mr. Bull also served as Chief Financial Officer and Treasurer. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table shows all grants of awards in fiscal 2023 to each of the executive officers named in the Summary Compensation Table:
Grants of Plan-Based Awards
| | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(3) | | Name | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Joel D. Anderson | 3/9/2023 | 468,750 | 1,875,000 | 3,750,000 | | | | | | | | 3/9/2023 | | | | | | | 8,091 | 1,625,077 | | | 3/9/2023(4) | | | | 6,068 | 12,136 | 24,272 | | 2,437,516 | | | 3/9/2023(5) | | | | 6,068 | 12,136 | 24,272 | | 3,513,857 | | Kenneth R. Bull | 3/9/2023 | 187,500 | 750,000 | 1,500,000 | | | | | | | | 3/9/2023 | | | | | | | 3,112 | 625,045 | | | 3/9/2023(4) | | | | 2,334 | 4,668 | 9,336 | | 937,568 | | | 3/9/2023(5) | | | | 2,334 | 4,668 | 9,336 | | 1,351,573 | | Kristy Chipman | 7/17/2023 | 112,500 | 450,000 | 900,000 | | | | | | | | 7/17/2023 | | | | | | | 1,866 | 374,711 | | | 7/17/2023(4) | | | | 467 | 934 | 1,868 | | 187,557 | | | 7/17/2023(5) | | | | 467 | 934 | 1,868 | | 254,692 | | George Hill | 3/9/2023 | 126,563 | 506,250 | 1,012,500 | | | | | | | | 3/9/2023 | | | | | | | 1,867 | 374,987 | | | 3/9/2023(4) | | | | 1,400 | 2,801 | 5,602 | | 562,581 | | | 3/9/2023(5) | | | | 1,400 | 2,801 | 5,602 | | 811,002 | | Michael F. Romanko | 3/9/2023 | 181,250 | 725,000 | 1,450,000 | | | | | | | | 3/9/2023 | | | | | | | 3,112 | 625,045 | | | 3/9/2023(4) | | | | 2,334 | 4,668 | 9,336 | | 937,568 | | | 3/9/2023(5) | | | | 2,334 | 4,668 | 9,336 | | 1,351,573 | | Eric M. Specter | 3/9/2023 | 100,313 | 401,250 | 802,500 | | | | | | | | 3/9/2023 | | | | | | | 1,121 | 225,153 | | | 3/9/2023(4) | | | | 840 | 1,680 | 3,360 | | 337,428 | | | 3/9/2023(5) | | | | 840 | 1,680 | 3,360 | | 486,427 |
Grants of Plan-Based Awards
| (1) Amounts represent cash annual incentive bonus opportunities provided to Named Executive Officers under the Incentive Bonus Plan in fiscal 2023. The criteria used to determine the amount of the annual bonus payable to each executive, as well as the amount earned for fiscal 2023 for each executive, is described above under “Compensation Discussion and Analysis—Annual Incentive Bonus.” |
Grants of Plan-Based Awards
| (2) Amounts represent grants of the 2023 PRSUs under the Five Below, Inc. 2022 Equity Incentive Plan (the “2022 Plan”), which generally vest based upon the Company’s performance over a three-year period. The term “Threshold” means the lowest non-zero amount that could be delivered as PRSUs based on the Company’s performance over the applicable performance period. The threshold is not a minimum amount payable or deliverable. If specified performance objectives are not met for the applicable performance period, no PRSUs would be earned for that performance period. For more details, see “Compensation Discussion and Analysis—Long-term Equity Incentive Compensation” above. |
Grants of Plan-Based Awards
| (3) Amounts with respect to stock awards represent the fair value of the awards on the date of grant, as computed in accordance with applicable accounting standards and the assumptions contained in Note 1 and Note 8 to the consolidated financial statements included as a part of the 2023 Form 10-K, filed with the SEC on March 21, 2024. |
Grants of Plan-Based Awards
| (4) Represents the portion of the 2023 PRSUs that may be earned based on the achievement of the cumulative operating income metric. |
Grants of Plan-Based Awards
| (5) Represents the portion of the 2023 PRSUs that may be earned based on the achievement of the relative total shareholder return metric. |
Outstanding Equity Awards at Year End Fiscal 2023
Outstanding Equity Awards at Year End Fiscal 2023 The following table details information concerning unexercised stock options, stock awards that have not vested, and stock awards that have not been earned for each of the executive officers named in the Summary Compensation Table as of February 3, 2024:
Outstanding Equity Awards at Year End Fiscal 2023
| | | Option Awards | | | | Stock Awards | | | | | | Name | Number of Securities Underlying Unexercised Options (#) (Exercisable) | Number of Securities Underlying Unexercised Options (#) (Unexercisable) | Option Grant Date | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Award Grant Date | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Joel D. Anderson | — | — | — | — | — | 2,064(2) | 3/9/2020 | 373,811 | — | — | | | — | — | — | — | — | 3,421(2) | 3/9/2021 | 619,577 | — | — | | | — | — | — | — | — | 16,897(3) | 3/9/2021 | 3,060,216 | — | — | | | — | — | — | — | — | 9,041(2) | 3/7/2022 | 1,637,416 | — | — | | | — | — | — | — | — | 8,091(2) | 3/8/2023 | 1,465,361 | — | — | | | — | — | — | — | — | | 3/7/2022 | | 27,124(4) | 4,912,428 | | | — | — | — | — | — | | 3/7/2022 | | 6,780(5) | 1,227,926 | | | — | — | — | — | — | | 3/8/2023 | | 12,136(6) | 2,197,951 | | | — | — | — | — | — | | 3/8/2023 | | 12,136(7) | 2,197,951 | | Kenneth R. Bull | — | — | — | — | — | 516(2) | 3/9/2020 | 93,453 | — | — | | | — | — | — | — | — | 616(2) | 3/9/2021 | 111,564 | — | — | | | — | — | — | — | — | 3,041(3) | 3/9/2021 | 550,756 | — | — | | | — | — | — | — | — | 1,722(2) | 3/7/2022 | 311,871 | — | — | | | — | — | — | — | — | 3,112(2) | 3/8/2023 | 563,614 | — | — | | | — | — | — | — | — | | 3/7/2022 | | 5,166(4) | 935,614 | | | — | — | — | — | — | | 3/7/2022 | | 1,291(5) | 233,813 | | | — | — | — | — | — | | 3/8/2023 | | 4,668(6) | 845,421 | | | — | — | — | — | — | | 3/8/2023 | | 4,668(7) | 845,421 | | Kristy Chipman | — | — | — | — | — | 1,866(2) | 7/17/2023 | 337,951 | — | — | | | — | — | — | — | — | | 7/17/2023 | | 934(6) | 169,157 | | | — | — | — | — | — | | 7/17/2023 | | 934(7) | 169,157 | | George Hill | — | — | — | — | — | 482(2) | 3/9/2020 | 87,295 | — | — | | | — | — | — | — | — | 479(2) | 3/9/2021 | 86,752 | — | — | | | — | — | — | — | — | 2,364(3) | 3/9/2021 | 428,144 | — | — | | | — | — | — | — | — | 1,377(2) | 3/7/2022 | 249,388 | — | — | | | — | — | — | — | — | 1,867(2) | 3/8/2023 | 338,132 | — | — | | | — | — | — | — | — | | 3/7/2022 | | 4,134(4) | 748,709 | | | — | — | — | — | — | | 3/7/2022 | | 1,033(5) | 187,087 | | | — | — | — | — | — | | 3/8/2023 | | 2,801(6) | 507,289 | | | — | — | — | — | — | | 3/8/2023 | | 2,801(7) | 507,289 | | Michael F. Romanko | — | — | — | — | — | 688(2) | 3/9/2020 | 124,604 | — | — | | | — | — | — | — | — | 616(2) | 3/9/2021 | 111,564 | — | — | | | — | — | — | — | — | 3,041(3) | 3/9/2021 | 111,745 | — | — | | | — | — | — | — | — | 6,027(2) | 3/7/2022 | 111,926 | — | — | | | — | — | — | — | — | 3,112(2) | 3/8/2023 | 112,107 | — | — | | | — | — | — | — | — | | 3/7/2022 | | 7,750(4) | 1,403,603 | | | — | — | — | — | — | | 3/7/2022 | | 1,937(5) | 350,810 | | | — | — | — | — | — | | 3/8/2023 | | 4,668(6) | 845,421 | | | — | — | — | — | — | | 3/8/2023 | | 4,668(7) | 845,421 |
Outstanding Equity Awards at Year End Fiscal 2023
| | | Option Awards | | | | Stock Awards | | | | | | Name | Number of Securities Underlying Unexercised Options (#) (Exercisable) | Number of Securities Underlying Unexercised Options (#) (Unexercisable) | Option Grant Date | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Award Grant Date | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Eric M. Specter | 5,494 | — | 3/10/15 | 28.58 | 3/10/25 | — | — | — | — | — | | | 4,632 | — | 3/11/16 | 39.30 | 3/11/26 | — | — | — | — | — | | | — | — | — | — | — | 482(2) | 3/9/2020 | 87,295 | — | — | | | — | — | — | — | — | 410(2) | 3/9/2021 | 74,255 | — | — | | | — | — | — | — | — | 2,026(3) | 3/9/2021 | 366,929 | — | — | | | — | — | — | — | — | 1,377(2) | 3/7/2022 | 249,388 | — | — | | | — | — | — | — | — | 1,121(2) | 3/8/2023 | 203,024 | — | — | | | — | — | — | — | — | | 3/7/2022 | | 4,134(4) | 748,709 | | | — | — | — | — | — | | 3/7/2022 | | 1,033(5) | 187,087 | | | — | — | — | — | — | | 3/8/2023 | | 1,680(6) | 304,265 | | | — | — | — | — | — | | 3/8/2023 | | 1,680(7) | 304,265 |
Outstanding Equity Awards at Year End Fiscal 2023
| (1) This value was calculated using the closing price of our stock on February 2, 2024, the last trading date before the end of fiscal 2023 ($181.11). |
Outstanding Equity Awards at Year End Fiscal 2023
| (2) These restricted stock units vest upon the following time-based schedule: 50% of the restricted stock units vest on the second anniversary of the grant date and 25% of the restricted stock units vest on each of the third and fourth anniversary dates, subject generally to the continued employment of the grantee on each such date. |
Outstanding Equity Awards at Year End Fiscal 2023
| (3) These units represent the portion of PRSUs granted on March 9, 2021 that were earned based on relative total shareholder return performance through the end of fiscal 2023 at 76.68% of target, and adjusted operating income performance through the end of fiscal 2023 at 88% of target. The results for this award were certified by our compensation committee, and the awards were issued, in March 2024. |
Outstanding Equity Awards at Year End Fiscal 2023
| (4) These units represent the TSR portion of the PRSUs granted on March 7, 2022 that are subject to open performance periods. They are shown here at 200% of target which is the next highest performance level based on TSR performance measured through the end of fiscal 2023. |
Outstanding Equity Awards at Year End Fiscal 2023
| (5) These units represent the AOI portion of the PRSUs granted on March 7, 2022 that are subject to an open performance period. They are shown here at 50% of target which is the next highest performance level based on performance measured through the end of fiscal 2023. |
Outstanding Equity Awards at Year End Fiscal 2023
| (6) These units represent the TSR portion of the PRSUs granted on March 8, 2023 (or July 17, 2023, for Ms. Chipman) that are subject to open performance periods. They are shown here at 100% of target which is the next highest performance level based on TSR performance measured through the end of fiscal 2023. |
Outstanding Equity Awards at Year End Fiscal 2023
| (7) These units represent the AOI portion of the PRSUs granted on March 8, 2023 (or July 17, 2023, for Ms. Chipman) that are subject to an open performance period. They are shown here at 100% of target which is the next highest performance level based on performance measured through the end of fiscal 2023. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table details stock option exercises and restricted stock units vesting during fiscal 2023 for each of the Named Executive Officers.
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 ($) (2) | | Joel D. Anderson | — | — | 81,682 | 15,812,682 | | Kenneth R. Bull | — | — | 13,540 | 2,622,320 | | Kristy Chipman | — | — | — | — | | George Hill | — | — | 12,921 | 2,501,690 | | Michael F. Romanko | — | — | 15,949 | 3,088,582 | | Eric M. Specter | — | — | 12,853 | 2,488,122 |
Option Exercises and Stock Vested
| (1) The value realized is the difference between the fair market value of a share of our common stock at the time of exercise and the exercise price of the applicable option so exercised, multiplied by the number of shares acquired on exercise. |
Option Exercises and Stock Vested
| (2) The value realized on vesting is determined by multiplying the number of vested shares by the closing price of the Company’s common stock on the vesting date. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table sets forth information with respect to the Company’s Deferred Compensation Plan, which provides for the deferral of compensation for the Named Executive Officers that is not tax-qualified. The Deferred Compensation Plan is described in further detail on page 44 above.
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(2) | | Joel D. Anderson | 764,423 | — | 205,132 | — | 2,913,258 | | Kenneth R. Bull | 153,462 | — | 33,889 | — | 399,542 | | Eric M. Specter | 32,740 | — | 12,956 | — | 197,516 |
Nonqualified Deferred Compensation
| (1) The amounts listed in this column are reported as compensation in the “Salary” column of the Summary Compensation Table for fiscal 2023 or the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for fiscal 2023, as applicable. |
Nonqualified Deferred Compensation
| (2) The amounts listed in this column include the following amounts which were reported in the Summary Compensation Table in previous years: for Mr. Anderson, $1,991,238; for Mr. Bull, $218,214; and for Mr. Specter, $164,697. |
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control We have entered into employment agreements with our Named Executive Officers which generally set forth their entitlements to salary, annual bonus opportunities, eligibility for health and welfare benefits, and severance entitlements, as applicable. The Named Executive Officers are generally subject to standard restrictive covenants under the terms of their employment agreements and/or non-disclosure agreements, including non-competition, non-solicitation and non-disclosure of confidential information. Messrs. Anderson, Bull and Specter have contractual severance entitlements pursuant to their employment agreements (as described below). In addition, Ms. Chipman and Messrs. Bull, Hill and Romanko have entitlements to severance under the Severance Plan. Any severance benefits payable to a Named Executive Officer, whether under an employment agreement or the Severance Plan, are subject to execution of a release. Our Named Executive Officers are also entitled to accelerated vesting of certain equity grants upon the occurrence of a change in control (as defined in the applicable equity plan) and upon certain termination events, as indicated in the table entitled “Potential Payments” below.
Potential Payments
Potential Payments The table below summarizes the payments and benefits that each NEO would have been entitled to receive if the event specified had occurred on February 2, 2024. For the purpose of calculating amounts in this table, we used a stock price of $181.11, which was the closing price of our stock on February 2, 2024, the last trading date before the end of fiscal 2023.
Potential Payments
| Name | Cash Severance Payment ($) | Accelerated Restricted Stock Unit Vesting ($) | Health Insurance Coverage ($) | Paid Life Insurance Benefit ($) | Total ($) | | Joel D. Anderson | | | | | | | Resignation for good reason or termination without cause | 1,250,000(1) | — | 20,138(2) | — | 1,270,138 | | Change in control (no termination) | — | 12,370,356(3) | — | — | 12,370,356 | | Resignation for good reason or termination without cause following a change in control | 1,250,000(1) | 12,370,356(3) | 20,138(2) | — | 13,640,494 | | Death | — | 16,466,521(4) | — | 500,000(5) | 16,966,521 | | Disability | — | 16,466,521(4) | — | — | 16,466,521 | | Kenneth R. Bull | | | | | | | Resignation for good reason or termination without cause | 750,000(6) | — | 20,138(2) | — | 770,138 | | Change in control (no termination) | — | 3,177,575(3) | — | — | 3,177,575 | | Resignation for good reason or termination without cause following a change in control | 750,000(6) | 3,177,575(3) | 20,138(2) | — | 3,947,713 | | Death | — | 4,258,077(4) | — | 500,000(5) | 4,758,077 | | Disability | — | 4,258,077(4) | — | — | 4,258,077 | | Kristy Chipman | | | | | | | Resignation for good reason or termination without cause | 600,000(1) | — | 18,481(2) | — | 618,481 | | Change in control (no termination) | — | 338,313(3) | — | — | 338,313 | | Resignation for good reason or termination without cause following a change in control | 600,000(1) | 338,313(3) | 18,481(2) | — | 956,795 | | Death | — | 676,265(4) | — | 500,000(5) | 1,176,265 | | Disability | — | 676,265(4) | — | — | 676,265 | | Michael F. Romanko | | | | | | | Resignation for good reason or termination without cause | 725,000(7) | — | 12,717(2) | — | 737,717 | | Change in control (no termination) | — | 3,645,382(3) | — | — | 3,645,382 | | Resignation for good reason or termination without cause following a change in control | 725,000(7) | 3,645,382(3) | 12,717(2) | — | 4,383,099 | | Death | — | 5,536,714(4) | — | 500,000(5) | 6,036,714 | | Disability | — | 5,536,714(4) | — | — | 5,536,714 | | George Hill | | | | | | | Resignation for good reason or termination without cause | 675,000(7) | — | 17,626(2) | — | 692,626 | | Change in control (no termination) | — | 2,191,612(3) | — | — | 2,191,612 | | Resignation for good reason or termination without cause following a change in control | 675,000(7) | 2,191,612(3) | 17,626(2) | — | 2,884,238 | | Death | — | 2,953,180(4) | — | 500,000(5) | 3,453,180 | | Disability | — | 2,953,180(4) | — | — | 2,953,180 | | Eric M. Specter | | | | | | | Resignation for good reason or termination without cause | 635,000(1) | — | 11,318(2) | — | 646,318 | | Change in control (no termination) | — | 1,724,348(3) | — | — | 1,724,348 | | Resignation for good reason or termination without cause following a change in control | 635,000(1) | 1,724,348(3) | 11,318(2) | — | 2,370,666 | | Death | — | 2,338,311(4) | — | 500,000(5) | 2,663,311 | | Disability | — | 2,338,311(4) | — | — | 2,338,311 |
Potential Payments
| (1) Cash severance payments are made over 12 months. |
Potential Payments
| (2) Each executive is entitled to a continuation of their health and dental benefits for up to 12 months. |
Potential Payments
| (3) These amounts reflect 2021 PRSUs, 2022 PRSUs and 2023 PRSUs that will become vested upon a change in control. With respect to the 2021 PRSUs the amount reflects the number of units actually earned, as certified by our compensation committee in March 2024. With respect to incomplete performance periods (the entirety of the 2022 PRSUs and 2023 PRSUs), the amount reflects assumed performance at the target level (although they could vest at a higher or lower level based on actual performance). |
Potential Payments
| (4) These amounts reflect RSUs and PRSUs with accelerated vesting in the event of death or disability. RSUs will become fully vested upon the executive’s death or disability. With respect to the 2021 PRSUs the amount reflects the number of units actually earned, as certified by our compensation committee in March 2024. With respect to incomplete performance periods under the PRSUs (the entirety of the 2022 PRSUs and 2023 PRSUs), the amount reflects vesting of units at the target level. |
Potential Payments
| (5) This represents a lump sum death benefit under our life insurance program. |
Potential Payments
| (6) Upon a resignation for good reason, Mr. Bull receives all of the cash severance payments in a lump sum. Upon a termination without cause, Mr. Bull receives half of the cash severance payments over a 6-month period and the remainder in a lump sum. |
Potential Payments
| (7) Cash severance payments are made to Ms. Chipman and Messrs. Hill and Romanko in a lump sum. |
CEO Pay Ratio
CEO Pay Ratio Under rules adopted pursuant to the Dodd-Frank Act, we are required to calculate and disclose the ratio of the total annual compensation of our median crew member as compared to the total annual compensation of our CEO. Similar to prior years, we began by determining that we had 20,572 crew members as of November 1, 2023. To determine our median crew member, we used the consistently applied compensation measure of “gross pay” (which we define as base salary (or base wages, if an hourly crew member) paid in the applicable period, incentives paid in the applicable period (even if earned in a prior period) and equity incentive value realized (due to option exercise or RSU settlement) during the applicable period). We annualized pay for full-time regular crew commencing work in fiscal 2023 and used a valid statistical sampling methodology to provide a reasonable estimate of the median gross pay for the crew population considered. Then we identified crew who we expected were paid within a +/- 5% range of that value, based on our assumptions that the median crew member was likely to be within that group and that those within that group had substantially similar probabilities of being the median crew member. Next, we determined that our median crew member was a sales associate from within that group. Finally, we determined that median crew member’s total compensation, using the same methodology used for our Named Executive Officers in the Summary Compensation Table, to be $12,161, as compared to our CEO’s total compensation of $10,185,354. Based upon this methodology, we estimate that the ratio of CEO pay to median crew member pay for fiscal 2023 is 838:1.
Pay Versus Performance Outcomes
Pay Versus Performance Outcomes Pursuant to Section 953(a) of the Dodd-Frank Act, and Item 402(v) of Regulation S-K, we are required to provide the following information about the relationship between “Compensation Actually Paid,” defined by the SEC and referred to below as “CAP,” and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company’s aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis—Annual Incentive Bonus” and “Compensation Discussion and Analysis—Long-term Equity Incentive Compensation.”
Pay Versus Performance Outcomes
| | | | | | Value of Initial Fixed $100 Invested Based On: | | | | | Fiscal Year (a) | SCT Total Compensation for CEO (1) (b) | Compensation Actually Paid to CEO (2) (c) | Average SCT Total Compensation for Other NEOs (3) (d) | Average Compensation Actually Paid to Other NEOs (4) (e) | Company TSR (5) (f) | Nasdaq US Benchmark Retail Index TSR (6) (g) | Net Income ($M) (7) (h) | Adjusted Pre Incentive Operating Income ($M) (8) (i) | | 2023 | $10,185,354 | $5,860,102 | $2,916,152 | $2,049,998 | $159.96 | $187.54 | $301.0 | $404.0 | | 2022 | $7,026,551 | $10,728,894 | $1,912,785 | $2,722,276 | $172.43 | $138.03 | $261.5 | $352.5 | | 2021 | $9,047,922 | $5,755,350 | $2,492,862 | $1,927,477 | $140.29 | $163.44 | $278.8 | $412.1 | | 2020 | $16,786,568 | $13,521,989 | $3,388,934 | $3,164,338 | $155.21 | $141.08 | $123.4 | $171.7 |
Pay Versus Performance Outcomes
| 1 | The dollar amounts reported in column (b) are the amounts of total compensation reported in the Summary Compensation Table for Mr. Anderson, our President and CEO (the principal executive officer for each of the four fiscal years shown). |
Pay Versus Performance Outcomes
| 2 | The dollar amounts reported in column (c) represent the amount of CAP to Mr. Anderson. In accordance with the SEC methodology for determining CAP, the following adjustments were made to Mr. Anderson’s total compensation for each fiscal year shown: |
Pay Versus Performance Outcomes
| Fiscal Year | Salary | Bonus and Non- Equity Incentive Compensation | Equity Compensation | All Other Compensation | Summary Compensation Table Total | Deductions from Summary Compensation Table (a) | | Adjustments to Compensation Table Total (b) | Compensation Actually Paid | | 2023 | $1,250,000 | $1,350,000 | $7,576,450 | $8,904 | $10,185,354 | -$ | 7,576,450 | $3,251,198 | $5,860,102 | | 2022 | $1,211,538 | $0 | $5,812,090 | $2,923 | $7,026,551 | -$ | 5,812,090 | $9,514,432 | $10,728,894 | | 2021 | $1,000,000 | $2,750,000 | $5,279,695 | $18,227 | $9,047,922 | -$ | 5,279,695 | $1,987,123 | $5,755,350 | | 2020 | $901,923 | $937,500 | $14,939,068 | $8,077 | $16,786,568 | -$ | 14,939,068 | $11,674,489 | $13,521,989 |
Pay Versus Performance Outcomes
| (a) Represents the grant date fair value of equity awards reported in the “Stock Awards” column of the Summary Compensation Table for the applicable fiscal year. |
Pay Versus Performance Outcomes
| (b) The equity award adjustments for each applicable fiscal year include the addition (or subtraction, as applicable) of the following: (i) the fiscal year-end fair value of any equity awards granted in the applicable fiscal year that are outstanding and unvested as of the end of the fiscal year; (ii) the amount of change as of the end of the applicable fiscal year (from the end of the prior fiscal year) in fair value of any awards granted in prior fiscal years that are outstanding and unvested as of the end of the applicable fiscal year; (iii) for awards that are granted and vest in same applicable fiscal year, the fair value as of the vesting date; and (iv) for awards granted in prior fiscal years that vest in the applicable fiscal year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior fiscal years that are determined to fail to meet the applicable vesting conditions during the applicable fiscal year, a deduction for the amount equal to the fair value at the end of the prior fiscal year. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay Versus Performance Outcomes
| Fiscal Year | Addition of Fair Value of Current Year Equity Awards at FYE | Deduction for Awards Granted in Prior Years that Fail to Meet Vesting Criteria | | (Deductions) Additions for Change in Value of Prior Years’ Awards Unvested at FYE | | Additions (Deductions) for Change in Value of Prior Years’ Awards That Vested in Fiscal Year | | Equity Value Included in Compensation Actually Paid | | 2023 | $5,397,319 | | 0 | ($ | 2,169,943) | | 23,822 | $3,251,198 | | 2022 | $5,596,508 | | 0 | ($ | 151,797) | | 4,069,721 | $9,514,432 | | 2021 | $5,677,423 | | 0 | ($ | 4,098,584) | | 408,284 | $1,987,123 | | 2020 | $20,715,928 | ($ | 1,223,590) | ($ | 6,465,071) | ($ | 1,352,778) | $11,674,489 |
Pay Versus Performance Outcomes
| 3 | The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Anderson, who has served as our CEO since February 2015) in the “Total” column of the Summary Compensation Table in each applicable fiscal year. The NEOs (excluding Mr. Anderson) included for purposes of calculating the average amounts are as follows: for fiscal 2023, Messrs. Bull, Hill, Romanko, and Specter and Ms. Chipman; for fiscal 2022, 2021, and 2020, Messrs. Bull, Specter, and Romanko, and Ms. Werthauser. |
Pay Versus Performance Outcomes
| 4 | The dollar amounts reported in column (e) represent the average amount of CAP to the NEOs as a group (excluding Mr. Anderson). In accordance with the SEC methodology for determining CAP, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Anderson) for each fiscal year shown: |
Pay Versus Performance Outcomes
| Fiscal Year | Average Salary | Average Bonus and Non-Equity Incentive Compensation | Average Equity Compensation | Average All Other Compensation | Average Summary Compensation Table Total | Deductions from Summary Compensation Table (a) | | Adjustments to Compensation Table Total (b) | Average Compensation Actually Paid | | 2023 | $597,754 | $418,680 | $1,888,582 | $11,083 | $2,916,152 | -$ | 1,888,582 | $1,022,481 | $2,049,998 | | 2022 | $628,042 | $0 | $1,259,721 | $25,021 | $1,912,785 | -$ | 1,259,721 | $2,069,213 | $2,722,276 | | 2021 | $607,746 | $1,077,767 | $791,760 | $15,590 | $2,492,862 | -$ | 791,760 | $226,375 | $1,927,477 | | 2020 | $547,894 | $333,282 | $2,498,587 | $9,171 | $3,388,934 | -$ | 2,498,587 | $2,273,991 | $3,164,338 |
Pay Versus Performance Outcomes
| (a) Represents the grant date fair value of equity awards reported in the “Stock Awards” column of the Summary Compensation Table for the applicable fiscal year. |
Pay Versus Performance Outcomes
| (b) The amounts deducted or added in calculating the total average equity award adjustments, using the same methodology as described in note 2(b) above, are as follows: |
Pay Versus Performance Outcomes
| Fiscal Year | Addition of Fair Value of Current Year Equity Awards at FYE | Deduction for Awards Granted in Prior Years that Fail to Meet Vesting Criteria | (Deductions) Additions for Change in Value of Prior Years’ Awards Unvested at FYE | | Additions (Deductions) for Change in Value of Prior Years’ Awards That Vested in Fiscal Year | | Equity Value Included in Compensation Actually Paid | | 2023 | $1,357,106 | $0 | ($ | 338,331) | | 3,706 | $1,022,481 | | 2022 | $1,278,099 | $0 | ($ | 12,384) | | 803,497 | $2,069,213 | | 2021 | $851,424 | $0 | ($ | 691,367) | | 66,319 | $226,375 | | 2020 | $3,221,508 | $0 | ($ | 660,149) | ($ | 287,368) | $2,273,991 |
Pay Versus Performance Outcomes
| 5 | As used herein, “TSR” means cumulative total shareholder return, as calculated in accordance with SEC rules. |
Pay Versus Performance Outcomes
| 6 | The peer group we use for this purpose is the Nasdaq US Benchmark Retail Index, the same index we use for purposes of our performance graph disclosure pursuant to Item 201(e) of Regulation S-K. |
Pay Versus Performance Outcomes
| 7 | The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable fiscal year. |
Pay Versus Performance Outcomes
| 8 | Pre-Incentive Adjusted Operating Income is a non-GAAP measure we use to determine the majority of our annual incentive opportunity and is defined as the Company’s operating income as reflected in the Company’s audited financial statements, adjusted to exclude the impact of: (a) all expense (net of reimbursement) incurred as part of a public offering of the Company’s securities, whether by the Company or by selling shareholders or both; (b) expenses incurred related to acquisition transaction costs; (c) income/expense incurred due to a change in accounting principles; (d) external expenses incurred during the start-up period for any new business venture; (e) bonuses payable under the Incentive Bonus Plan, and (f) any other adjustments that may be approved by the compensation committee. See Appendix A-1 for a reconciliation of Pre-Incentive Adjusted Operating Income to operating income. |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS At our Annual Meeting, shareholders will elect one Class I director (who was previously elected by our board of directors to fill a vacancy and thus whose term expires at the Annual Meeting), four Class II directors, and four Class III directors, in each case to hold office for a one-year term, until our 2025 annual meeting of shareholders. Nominees were recommended and approved for nomination by our nominating and corporate governance committee. The directors shall serve until their successors have been duly elected and qualified or until any such director’s earlier resignation or removal. If any nominee for any reason is unable to serve or will not serve, the proxies may be voted for such substitute nominee as the proxy holder may determine. We are not aware of any nominee who will be unable to or will not serve as a director. Proxies cannot be voted for a greater number of persons than the number of nominees named. If you sign and return the accompanying proxy, your shares will be voted FOR the election of the three nominees recommended by our board of directors, unless you mark the proxy in such a manner as to vote AGAINST or ABSTAIN with respect to one or more nominees. See “What if I don’t vote for some of the items listed on my proxy card or voting instruction card?” on p. 6 of this proxy statement if you hold your shares in street name through a bank, broker, or other intermediary. The following directors are being nominated for election to our board of directors: Joel D. Anderson, Kathleen S. Barclay, Karen Bowman, Dinesh S. Lathi, Richard L. Markee, Thomas M. Ryan, Mimi E. Vaughn, Thomas G. Vellios and Zuhairah S. Washington. Please see the discussion under “Board of Directors” in this Proxy Statement for information concerning each of our nominees for director.