DEF 14A of Victoria's Secret & Co.
Filed May 3, 2024 · FY20230001193125-24-130736
CONTENTS
| 39 | | | Human Capital Management | | | 44 | | | Director Compensation | | | 46 | | | Compensation Discussion and Analysis | | | 51 | Compensation Governance Processes | | 53 | NEO Compensation Components | | 57 | Compensation Governance | | 59 | Compensation Committee Report | | 60 | Executive Compensation Tables | | 70 | CEO Pay Ratio | | 71 | Pay Versus Performance | | 75 | | | PROPOSAL THREE: Advisory Approval of Compensation of Named Executive Officers | |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The VS&Co Board is currently comprised of nine directors. Each director is elected annually by our stockholders to serve a one-year term expiring at the next annual meeting of stockholders. At the 2024 Annual Meeting, stockholders will be asked to elect nine directors who will serve on our Board until the 2025 annual meeting of stockholders and their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. All of the nine nominees for election as director at the 2024 Annual Meeting are incumbent directors who currently serve on our Board. Our Board is comprised of individuals with diverse and complementary business experience, leadership prowess, and financial expertise. Each of our directors possesses industry-leading skills that support our long-term growth strategy, including expertise in retail, international business development, brand transformation, supply chain logistics, e-commerce, and public company governance. Together, our directors’ complementary experiences create an engaged and effective Board that exercises independent oversight of our material risks and long-term strategy. Through their unique backgrounds, skills, and qualifications, each of our directors brings a wealth of knowledge, experience, expertise, and energy to our Board. The Board believes that each of our director nominees is highly qualified to continue to serve as a director. Each nominee’s background, skills, experience, and other qualifications are described below. Each nominee has consented to be named as a nominee and stand for election at the 2024 Annual Meeting. We know of no reason why any nominee would be unable or unwilling to serve as director, but in that event our Board, based on the recommendation of the Nominating and Governance Committee, may either reduce the number of directors or designate a substitute nominee. If a substitute nominee is designated, the persons named in the enclosed proxy will vote all proxies that would otherwise be voted for the named nominee for the election of such substitute nominee. Pursuant to our Second Amended and Restated Bylaws (the “Bylaws”), in an uncontested election, each director is elected by the affirmative vote of the holders of a majority of the votes cast with respect to that director’s election. Each nominee must receive more votes cast “for” his or her election than “against” his or her election. If you are a beneficial owner of VS&Co common stock, your broker is not permitted to vote your shares on the election of directors if no instructions are received from you (this is commonly referred to as a “broker non-vote”). Abstentions and broker non-votes will not count as a vote cast and, therefore, will have no effect on the outcome of the election of directors. Cumulative voting is not permitted. If a director does not receive more votes cast “for” his or her election than “against” his or her election, such director’s resignation will be tendered to the Board. The Nominating and Governance Committee will make a recommendation to the Board regarding whether to accept or decline the resignation, taking into account the best interests of VS&Co and its stockholders and considering any factors or other information that the Nominating and Governance Committee believes is appropriate and relevant. The Board will make its decision regarding the resignation at its next regularly scheduled Board meeting following certification of the election results. A director whose resignation is under consideration must abstain from participating in any decision regarding his or her resignation. As a requirement for any person to serve as director, he or she must submit an irrevocable resignation that becomes effective upon (i) that person not receiving a majority of the votes cast in an uncontested election and (ii) acceptance by the Board of that resignation in accordance with any policies and procedures adopted by the Board for that purpose.
ELECTION OF DIRECTORS
| | The Board unanimously recommends a vote “FOR” each of the following nominees for election as director. |
ELECTION OF DIRECTORS
| | 8 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
Director Nominees
ELECTION OF DIRECTORS
| | Public Company Directorships • American Electric Power (NASDAQ: AEP), a public utility holding company, 2022 – present • The Hartford Financial Services Group (NYSE: HIG), an investment and insurance company, 2021 – present • Boston Scientific Corporation, a global developer, manufacturer and marketer of medical devices, 2015 – 2023 • Marathon Petroleum Corporation, an integrated downstream energy company, 2011 – 2018 • Time Warner Cable Inc., a provider of video, data and voice services, 2009 – 2016 • CNO Financial Group, a holding company of insurance companies, 2007 – 2011 • Coca-Cola Enterprises, Inc., a multinational nonalcoholic beverages manufacturer and distributor, 2005 – 2012 • L Brands, Inc., the former parent company of VS&Co, 2003 – 2021 • Intimate Brands, Inc., a former subsidiary of L Brands, 2000 – 2001 Professional Experience • President and Chief Executive Officer, Lardon & Associates LLC, a business and executive advisory services firm, 2006 – present • Chairman, Financial Settlement Services Agency, Inc., 2005 – 2006 • President, Nationwide Strategic Investments, a division of Nationwide Mutual Insurance Company, 2003 – 2006 • Chairman and Manager, Nationwide Strategic Investment Fund, LLC, 2003 – 2006 • Executive Vice President and Chief Administrative Officer, Nationwide Mutual Insurance Company and Nationwide Financial Services, 2000 – 2003 Key Skills and Qualifications • Strategic Planning • Risk Management • Business Operations • Public Company Finance • Human Capital Management • Corporate Governance What does Donna James bring to the VS&Co Board? Donna is a seasoned veteran of public company boardrooms, having served as a director at ten public companies over the past two decades. Donna’s financial expertise and leadership experience as an executive and public company director, coupled with her deep understanding of VS&Co, its history, and the industry in which it operates, equip her with the wisdom and skills to effectively lead the VS&Co Board. Donna is not afraid to ask tough questions and challenge management’s strategies and assumptions. She engages regularly with the investor community and is a valued sounding board for the CEO and other members of the executive leadership team. | | Chair of the Board Independent Age: 66 Director Since: 2021 Board Committees • Audit • Nominating and Governance | |
ELECTION OF DIRECTORS
| | 9 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| | Public Company Directorships • IDEXX Laboratories, Inc. (NASDAQ: IDXX), a veterinary animal health care innovator, 2023 – present • First Watch Restaurant Group, Inc. (NASDAQ: FWRG), daytime dining restaurants, 2023 – present • Brighthouse Financial, Inc., a leading provider of annuities and life insurance, 2017 – 2023 • TerraVia Holdings, Inc., a food, nutrition and specialty ingredient company, 2016 – 2018 • Tailored Brands Inc., formerly Men’s Warehouse, Inc., 2015 – 2020 • Dunkin’ Brand Group Inc., a leading franchisor of quick service restaurants, 2014 – 2020 • Sunoco, a fuel distribution company, 2011 – 2012 Professional Experience • Chief Executive Officer, ICB Enterprises LLC, a consulting firm, 2015 – present • President and Divisional Chief Executive Officer, Pepperidge Farm, a subsidiary of Campbell Soup Company, 2012 – 2015 • Senior Vice President of Global Baking and Snacking, Campbell Soup Company, 2012 – 2015 Key Skills and Qualifications • Brand Transformation • Strategic Planning • Risk Management • Executive Compensation • Consumer Marketing • Public Relations What does Irene Chang Britt bring to the VS&Co Board? Irene has a broad range of experience and skills pertinent to global business operations, especially within the retail industry, gained from her numerous leadership positions and public directorships, including at sector-leading consumer companies. Irene led Campbell’s second largest global reportable segment, with net sales exceeding $2.4 billion in 2014. She has deep experience in business transformation and is an expert in human capital management, branding, and marketing. Irene is a thoughtful and strategic leader of the Human Capital and Compensation Committee. As Chair of the committee, Irene leads the critical work of overseeing VS&Co’s executive compensation program and succession planning for the executive management team. She guided the development of VS&Co’s inaugural executive compensation program and is constantly exploring ways to improve it. | | Independent Age: 61 Director Since: 2021 Board Committees • Audit • Chair of Human Capital and Compensation | |
ELECTION OF DIRECTORS
| | 10 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| | Public Company Directorships • Amdocs (NASDAQ: DOX), a leading software and digital services provider, 2021 – present • Pet Valu (TSX: PET), a Canadian retailer of pet food and related supplies, 2021 – present • AGF Investments, an investment management firm, 2014 – 2022 Professional Experience • President, Loblaw Companies Limited, a grocery, pharmacy and beauty retailer, 2017 – 2021 • Chief Administrative Officer, Loblaw Companies Limited, 2014 – 2017 • Chief Financial Officer, Loblaw Companies Limited, 2010 – 2014 Key Skills and Qualifications • Public Company Finance • Strategic Planning • Risk Management • Operations • Mergers and Acquisitions • Women’s Advocacy What does Sarah Davis bring to the VS&Co Board? A seasoned public company executive and director, Sarah served as Chief Financial Officer, Chief Administrative Officer, and President of Loblaw Companies Limited, one of Canada’s largest omni-channel retailers of grocery, pharmacy, and beauty. At Loblaw, Sarah had a broad portfolio of responsibilities including corporate strategy, supply chain, information technology, real estate, and human resources. When Sarah left the company in 2021, the Loblaw loyalty program had 16 million members, almost one for every household in Canada. Sarah brings value to the VS&Co Board through her corporate finance expertise and public company board experience. Her knowledge as an accountant and experience in various executive leadership roles are critical to leading the strategic and oversight functions of the Audit Committee. | | Independent Age: 56 Director Since: 2021 Board Committees • Chair of Audit • Nominating and Governance | |
ELECTION OF DIRECTORS
| | 11 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| Independent Age: 58 Director Since: 2021 Board Committees • Human Capital and Compensation • Nominating and Governance | Public Company Directorships • MediaCo Holding Inc. (NASDAQ: MDIA), a multimedia company focused on radio and digital advertising, premium programming and events, 2024 –present • Isos Acquisition Corporation, a special purpose acquisition company, 2021 Professional Experience • Interim Chief Executive Officer, MediaCo Holding Inc., 2024 – present • Founder and Chief Executive Officer, New Majority Ready, a marketing and strategy consulting firm, 2019 – present • President, Combate Américas, a Hispanic sports franchise, 2017 – 2020 • Chief Marketing Officer, NBCUniversal Hispanic Enterprises, 2014 – 2017 • Chief Operating Officer, NBCUniversal Telemundo Enterprises, 2008 – 2014 Key Skills and Qualifications • Consumer Marketing • Data Analytics • Business Operations • Strategic Planning • AI Ethics • Brand Transformation • Digital and Social Media Marketing • Diversity, Equity and Inclusion What does Jacqueline Hernández bring to the VS&Co Board? Jacqueline brings business and cultural fluency in many of VS&Co’s key markets, notably U.S. Hispanic and North America. As VS&Co develops and executes on its go-to-market strategy through the lens of a product-led entertainment brand, the Board and management team benefit greatly from Jacqueline’s insight and experience in brand transformation and multimedia marketing. When it comes to multicultural and youth consumer marketing, Jacqueline is an expert. Her business leadership experience makes her a trustworthy authority on long-term and short-term strategic planning, brand transformation, consumer insights, and DEI. |
ELECTION OF DIRECTORS
| | 12 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| | Public Company Directorships • Edgewell Personal Care Company (NYSE: EPC), a multinational consumer products company, 2019 – present Professional Experience • Chief Executive Officer, Edgewell Personal Care Company, 2019 – present • Chief Financial Officer, Edgewell Personal Care Company, 2018 – 2019 • Chief Financial Officer, HSN, Inc., formerly known as the Home Shopping Network, 2017 • Chief Financial Officer, Elizabeth Arden, a makeup, skincare, and perfume company, 2014 – 2016 • Global Finance Director, Procter & Gamble, a global consumer goods company, 2009 – 2014 Key Skills and Qualifications • Strategic Planning • Mergers and Acquisitions • Public Company Finance • E-Commerce and Digital Operations • Beauty Merchandise • International Retail Operations • Sustainability What does Rod Little bring to the VS&Co Board? Rod brings more than 20 years of experience in the global consumer goods industry, significant public company leadership and finance experience, and a strong track record of driving results. As Chief Executive Officer of Edgewell Personal Care Company, one of the world’s largest manufacturers and marketers of personal care products in the wet shave, sun and skin care, and feminine care categories, Rod accelerated growth and margin expansion of a highly profitable business. Before beginning his career in the consumer goods industry, Rod served as an officer in the United States Air Force for five years. As the CEO of a multinational, publicly traded consumer products company with decades of experience in the industry, Rod’s recent appointment to the VS&Co Board further strengthens our ability to unlock long-term stockholder value through informed oversight of our ongoing strategic initiatives. | | Independent Age: 54 Director Since: 2023 Board Committees • Human Capital and Compensation | |
ELECTION OF DIRECTORS
| | 13 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| | Public Company Directorships • Yelp, Inc., a broad-based local advertising platform, 2014 – 2020 Professional Experience • Chief Executive Officer and Founder, Arcade.ai, an artificial intelligence commerce company, 2022 – present • Managing Partner, Heretic Ventures, a venture incubator that launches and funds online consumer businesses that capitalize on new technology, 2021 – present • Executive Chairman, Minted, an online marketplace for creative and custom goods, 2022 – present • Co-Chief Executive Officer, Minted, 2021 – 2022 • Chief Executive Officer and Founder, Minted, 2007 – 2021 • Vice President and General Manager, The Body Shop International plc, a global cosmetics retailer, 2003 – 2007 Key Skills and Qualifications • E-Commerce and Digital Operations • Women’s and Beauty Merchandise • Consumer Marketing • Strategic Planning • Mergers and Acquisitions • Diversity, Equity and Inclusion What does Mariam Naficy bring to the VS&Co Board? Mariam is an experienced CEO and successful entrepreneur known for seeing around corners and pioneering both e-commerce and online creative communities. She founded Heretic Ventures, an incubator for companies at the intersection of culture, commerce, and creators; Minted, one of the most successful community-based e-commerce companies in the world; and Eve.com, a first-of-its-kind cosmetic e-commerce site. Mariam brings to the Board deep expertise in digital and direct-to-consumer retailing, modern media marketing, and mergers and acquisition transactions. Mariam is a pioneer of capitalizing on opportunities within the digital retail space. She has been a key partner overseeing the acquisition of Adore Me, VS&Co’s technology-led, digitally native intimates brand, and the realization of synergies and other benefits from that acquisition. | | Independent Age: 53 Director Since: 2022 Board Committees • Nominating and Governance | |
ELECTION OF DIRECTORS
| | 14 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| | Public Company Directorships • Allegion plc (NYSE: ALLE), a leading global security products and solutions provider, 2021 – present • La-Z-Boy, Inc. (NYSE: LZB), a manufacturer of residential and office furniture, 2016 – present Professional Experience • Chief Financial Officer, Foot Locker, Inc., a global multi-channel specialty retailer of footwear and apparel, 2011 – 2021 • Senior Vice President, Strategic Planning, Foot Locker, Inc., 2002 – 2011 Key Skills and Qualifications • Public Company Finance • Women’s and Youth Merchandise • Omni-Channel Operations • Strategic Planning • Investor Relations • Real Estate Strategy What does Lauren Peters bring to the VS&Co Board? Lauren is a seasoned financial executive and Certified Public Accountant with over thirty years of financial experience. During her executive career at Foot Locker, Lauren led development of the strategic planning process, digital transformation, and several acquisitions and divestitures. Her leadership experience with consumer focused, omni-channel, global retailers, together with her financial and strategic planning expertise and public company board experience, make her an asset to the VS&Co Board. Lauren’s accomplishments as Chief Financial Officer of Foot Locker are evident in the way she provides strategic counsel and guidance to the VS&Co Board and Audit Committee. She knows what it takes to be successful in the competitive specialty retail environment. | | Independent Age: 62 Director Since: 2021 Board Committees • Human Capital and Compensation • Audit | |
ELECTION OF DIRECTORS
| | 15 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| | Public Company Directorships • Janus Henderson Group PLC (NYSE: JHG), a global active asset manager, 2022 – present • Cohn Robbins Holding Company, a special purpose acquisition company, 2020 – 2022 • L Brands, Inc., the former parent company of VS&Co, 2019 – 2021 Professional Experience • Senior Advisor, PJT Partners, a global advisory-focused investment bank, 2018 – present • Founder, Investor Stewardship Group, a collective of institutional investors that introduced a framework for principles-based corporate governance, 2017 • Chair of Investor Advisory Committee, Securities and Exchange Commission, 2012 – 2020 • Director of Corporate Governance, The California State Teachers’ Retirement System (CalSTRS), 2008 – 2018 • Chief Deputy Director for Policy, California Department of Finance, 2004 – 2008 Key Skills and Qualifications • Corporate Governance • Investor Relations • Sustainability • Human Capital Management • Executive Compensation • Legal and Regulatory Compliance What does Anne Sheehan bring to the VS&Co Board? Anne is a renowned governance expert, having served as Chair of the SEC’s Investor Advisory Committee for eight years and as Director of Corporate Governance at CalSTRS, one of the largest pension funds in the United States, for ten years. In these and other roles, Anne was a leader in navigating complex legislative, regulatory, and shareholder relations affairs. Anne is a founder of the Investor Stewardship Group and serves on the advisory boards of the Weinberg Center for Corporate Governance at the University of Delaware and the Rock Center for Corporate Governance at Stanford Law School. Anne utilizes her deep knowledge, understanding of investor perspectives, and experience in all aspects of corporate governance to lead the Nominating and Governance Committee and provide valuable insight to the Board. Anne has seen it all when it comes to corporate governance and investor relations. She is a trusted leader in this space and knows the players, options, risks, and opportunities. | | Independent Age: 67 Director Since: 2021 Board Committees • Chair of Nominating and Governance • Human Capital and Compensation | |
ELECTION OF DIRECTORS
| | 16 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
| | Professional Experience • Chief Executive Officer, Victoria’s Secret & Co., 2021 – present • Chief Executive Officer of VS Lingerie, L Brands, Inc., the former parent company of VS&Co, 2020 – 2021 • Chief Executive Officer of International, L Brands, Inc., 2008 – 2020 Key Skills and Qualifications • Beauty and Women’s Merchandise • Retail Store Operations • International Retail Operations • Omni-Channel Operations • Franchising and Joint Ventures • Brand Transformation • Strategic Planning What does Martin Waters bring to the VS&Co Board? Martin is a career retail executive who is respected for leading businesses with strong financial performance and equally strong and healthy corporate cultures. Martin has lived and worked in five countries, leveraging his experience in strategic planning, merchandising, brand management, marketing and supply chain operations to establish new business models in over 80 countries worldwide. Martin applies his experience serving as CEO of VS&Co and other leadership roles at L Brands since 2008 to supply unparalleled knowledge of VS&Co and the global intimates and beauty markets. Martin leads the VS&Co executive management team in developing and implementing our long-term strategic growth plan. He is also a strong advocate of maintaining VS&Co’s happy, healthy and inclusive culture. | | Age: 58 Director Since: 2021 | |
ELECTION OF DIRECTORS
| | 17 | 2024 PROXY STATEMENT |
ELECTION OF DIRECTORS
We are committed to strong and effective corporate governance, an attribute we consider critical to achieving long-term value for our stockholders. Role of the Board The Board of Directors is ultimately responsible for overseeing the management of VS&Co. The executive management team is responsible for the day-to-day business and operations of VS&Co. The Board works with the management team to guide VS&Co’s long-term strategy and overall vision and direction. The Board is responsible for making certain key decisions about financial planning, significant capital expenditures, executive compensation structure and philosophy, the composition of the Board and executive management team, material acquisitions, and other high-priority matters. The Board is also involved in stockholder and community relations, ethical and legal compliance, risk management, and ESG issues. Many of these roles are performed through the Board’s three standing committees: the Audit Committee, the Human Capital and Compensation Committee, and the Nominating and Governance Committee. See “Board Committees” below for additional detail on the roles of each committee.
Director Nominee Selection
Director Nominee Selection The Nominating and Governance Committee is responsible for developing the criteria for the selection of nominees for director and recommends to the Board candidates for nomination at the annual meeting of stockholders or to fill any vacancy on the Board. The Board is responsible for the final selection of director nominees. The Nominating and Governance Committee oversees searches for and identifies qualified individuals for Board membership taking into consideration candidates’ independence, judgment, ethics and integrity, experience, and skills, as well as our commitment to diversity, equity, and inclusion. Our Corporate Governance Guidelines require that the initial pool of candidates identified to be considered for any Board vacancy include persons reflecting a diversity of race, ethnicity, gender, sexual orientation, or other underrepresented groups. Each year, the Nominating and Governance Committee undergoes a comprehensive process that leads to the determination of the director nominees. This process includes:
Director Nominee Selection
| • | Examining the composition of the Board and its committees in light of the current needs of the Board, the Company, and each of the Board committees |
Director Nominee Selection
| • | Conducting an annual evaluation of the Board, each Board committee, and each individual director (see “Performance Evaluations” below) |
Director Nominee Selection
| • | Considering the aggregated skills, experience and expertise of the Board and each Board committee and identifying any skills, experience or expertise that is underrepresented or would be additive |
Director Nominee Selection
| • | Proactive succession planning for directors who may be planning to exit the Board |
Director Nominee Selection
| • | Considering Board refreshment and the value of new directors with fresh ideas and perspectives (see “Board Refreshment” below) |
Director Nominee Selection
The Nominating and Governance Committee may consider director candidates from any reasonable source. A third party search firm may be engaged to assist the Nominating and Governance Committee in identifying potential new director candidates. For information on how stockholders can propose nominees for director, see “Stockholder Proposals for the 2025 Annual Meeting” below. The Nominating and Governance Committee uses the same criteria and process to evaluate candidates nominated by stockholders as it does for any other candidate. All candidates undergo a rigorous vetting process that includes a background check, multiple interviews and contacting references.
Director Nominee Selection
| | 21 | 2024 PROXY STATEMENT |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Our 2023 compensation plan for non-employee directors remained unchanged since the spin-off and is outlined in the following chart. The Board has reviewed and assessed the program relative to the VS&Co executive compensation peer group, in partnership with the Human Capital and Compensation Committee and its independent compensation consultant, and approved the program for 2024.
DIRECTOR COMPENSATION
| | Cash | Stock (fair market value of VSCO stock on grant date) | | Board Fees | $111,900 | $111,900 | | Committee Member Fees | | | | Audit | $12,500 | $12,500 | | Human Capital and Compensation | $12,500 | $12,500 | | Nominating and Governance | $10,000 | $10,000 | | Committee Chair Fees | | | | Audit | $20,000 | — | | Human Capital and Compensation | $15,000 | — | | Nominating and Governance | $15,000 | — | | Board Chair Fees | $80,000 | $80,000 |
DIRECTOR COMPENSATION
The Chair fees are paid in addition to any Board and committee member fees. All cash retainers are paid quarterly in arrears. The equity retainers are granted under the Victoria’s Secret & Co. 2021 Stock Option and Performance Incentive Plan (the “VS 2021 Stock Plan”) and delivered in the form of unrestricted VS&Co shares generally on the date of our annual meeting of stockholders.
DIRECTOR COMPENSATION
| | 44 | 2024 PROXY STATEMENT |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
2023 Director Compensation
2023 Director Compensation In 2023, compensation earned by our non-employee directors was as follows. Mr. Waters’ compensation is disclosed in the 2023 Summary Compensation Table in the Compensation Discussion and Analysis section of this Proxy Statement.
2023 Director Compensation
| Name | Fees Earned or Paid In Cash ($) | Stock Awards ($)(1) | Total ($) | | Irene Chang Britt | 151,900 | 136,900 | 288,800 | | Sarah Davis | 154,400 | 134,400 | 288,800 | | Jacqueline Hernández | 134,400 | 134,400 | 268,800 | | Donna James | 214,400 | 214,400 | 428,800 | | Rod Little(2) | 62,200 | 124,400 | 186,600 | | Mariam Naficy | 121,900 | 121,900 | 243,800 | | Lauren Peters | 136,900 | 136,900 | 273,800 | | Anne Sheehan | 149,400 | 134,400 | 283,800 |
2023 Director Compensation
| (1) Stock awards were granted under the VS 2021 Stock Plan. We valued the stock awards by multiplying the closing price of our common shares on the NYSE on the grant date by the number of shares awarded. |
2023 Director Compensation
| (2) Rod Little was appointed to the Board on August 29, 2023. As a result, his cash retainer was prorated based on his period of service. |
Compensation Program
| Role and Mix of Pay Elements | • Base Salary. Provide fixed pay commensurate with an individual’s level/grade, internal equity, criticality of role, experience, skills (and external market for such skills), and/or performance; serve as baseline attraction and retention tool for a talent strategy aimed to recruit top talent. • Short-Term Incentive Plan (“STIP”). Provide a variable, at-risk pay element that aligns pay outcomes, behavior and decision making with short-term financial, operational and/or strategic goals and performance. Performance should contemplate enterprise-wide measurement to drive collaboration and re-enforce the One VS&Co mindset. • Long-Term Incentive Plan (“LTIP”). Provide a variable, at-risk pay element that aligns pay outcomes, behavior and decision making with the long-term financial, operational and/or strategic business objectives of VS&Co and its stockholders. The LTIP drives retention, ownership mentality, and accountability to external market evaluation of VS&Co. • Pay Mix. Fixed components (base salary) should comprise a minority of the pay mix for executives. Variable components (STIP and LTIP) should comprise the majority of the pay mix. LTIP should make up the largest component of pay at the top levels of the organization. • Rigor of Goal-Setting. Our STIP and LTIP goals are designed to challenge executives to achieve a high level of performance and are calibrated to deliver value creation to stockholders in order for our executives to earn cash and equity incentives at target levels. | | Market Position | • Publicly disclosed pay data from the executive compensation peer group serves as the primary market reference for our executive officers. • VS&Co does not specifically set its executive compensation against its peer group. Instead, it considers peer group comparisons as one of several factors in making executive compensation decisions as described below. • Pay outcomes will flex up and down commensurately with performance, such that above target performance will generally yield above median compensation and below target performance will generally yield below median compensation. | | Internal vs External Focus | • Guideline pay structures and incentive targets will be informed by external market data—primarily from the retail industry. • An individual’s placement within those structures will be influenced by internal considerations (e.g., internal equity, skill, performance and potential). • Goal: deliver compensation that is fair, consistent and enables VS&Co to achieve its talent strategy. |
Overview of Executive Compensation Governance Practices
| ✔ | Put meaningful compensation at risk: On average, approximately 80% of our NEOs’ pay is dependent upon company performance, thus aligning the interests of our executives with those of our stockholders. | | ✔ | Set stock ownership guidelines: Set at six times base salary for our CEO and three times base salary for other named executive officers. | | ✔ | Require double-trigger vesting of equity awards upon a change in control under our long-term incentive plan. | | ✔ | Enforce our Clawback Policy as described under “Compensation Governance—Recovery of Compensation.” | | ✔ | Include fixed share authorization: Long-term incentive plan does not provide for an evergreen feature that would automatically replenish the shares authorized for issuance. | | ✔ | Regularly review share utilization: We regularly evaluate share utilization levels and review the dilutive impact of stock compensation. | | ✔ | Independent compensation committee: Our HCCC is composed solely of independent directors. | | ✔ | Work with an independent compensation consultant retained by the HCCC. | | ✔ | Cap our incentive plans: The maximum payout for our short- and long-term incentive compensation is 200% of target. | | ✔ | Grant stock with vesting period of at least one year (subject to certain exceptions). | | ✔ | Conduct an annual review of the pay programs to ensure we reward executives for performance against clear metrics that align with our long-term strategic plan and stockholder interests, retain top talent, and discourage unnecessary risk taking by our executives. |
Overview of Executive Compensation Governance Practices
| × | No tax gross-ups upon a change in control. | | × | No hedging or pledging is permitted under our Insider Trading Policy. | | × | No re-pricing or cash-out of underwater stock options without stockholder approval. | | × | No discounted equity grants. | | × | No guaranteed increases to pay. | | × | No excise tax gross-ups under our long-term incentive plan. |
Independent Compensation Consultant
Independent Compensation Consultant As permitted by its charter, the HCCC retained Semler Brossy as its independent executive compensation consultant. The HCCC has the sole authority to retain and terminate any independent executive compensation consultant. The HCCC, considering recommendations from VS&Co management, determines the work to be performed by Semler Brossy. Semler Brossy works with management to gather data required in preparing analyses for HCCC review. Specifically, the services the consultant provides include:
Independent Compensation Consultant
| • | Assisting in the evaluation of and providing recommendations for the CEO and other executives’ compensation |
Independent Compensation Consultant
| • | Informing the HCCC of evolving market practices |
Independent Compensation Consultant
| • | Consulting on executive compensation strategy and program design |
Independent Compensation Consultant
| • | Analyzing the competitiveness of executive pay |
Independent Compensation Consultant
| • | Assisting in the selection of our executive compensation peer group |
Independent Compensation Consultant
| • | Assisting with and reviewing our CD&A disclosure |
Independent Compensation Consultant
The HCCC has analyzed whether the work of Semler Brossy raised any conflict of interest and has concluded that it has not created any conflict of interest.
Compensation Comparison
Compensation Comparison VS&Co compares its executive compensation with publicly available data, including the executive compensation paid by its peer companies, in order to ensure its pay programs remain competitive with market practices. In consultation with management and with advice of its advisors, the HCCC reviewed and affirmed the prior year’s executive compensation peer group again for fiscal 2023.
Compensation Comparison
The HCCC reaffirmed this peer group for fiscal 2024. The HCCC used the following criteria to select the peer group:
Compensation Comparison
VS&Co does not specifically set its executive compensation against the peer group. Instead, we consider peer group comparisons provided by the HCCC’s independent compensation consultant as one of several factors in making executive compensation decisions.
Short-Term Performance-Based Cash Incentive Compensation
Short-Term Performance-Based Cash Incentive Compensation For 2023, the short-term incentive plan (the “STIP”) was paid pursuant to the Victoria’s Secret & Co. 2021 Cash Incentive Compensation Performance Plan (the “VS 2021 IC Plan”). For 2023, the STIP performance metrics applicable to executives, including our NEOs, now has a carveout of 25% of the award based on annual performance with seasonal performance (described below) representing 75% of the award. Beginning in 2023, we also introduced a revenue metric to the STIP to align with our growth priorities. Operating income remains the most important metric in the STIP, weighted at 75% with revenue weighted at 25%. The seasonal component of the STIP focuses on achievement of six-month goals, reflecting VS&Co’s two selling seasons: Spring (the first and second quarters) and Fall (the third and fourth quarters). The Fall season, which includes holiday sales, is weighted more heavily than Spring because of its importance to VS&Co’s profitability. The use of seasonal performance periods in the plan design reflects the belief that achievement of short-term goals season after season aligns with the business strategy and helps drive and maintain long-term value for stockholders. Beginning in 2023, an annual performance period was added to measure achievement of goals over the full fiscal year. The annual component now comprises 25% of the total bonus for our NEOs and other executives. The Spring and Fall seasonal components were subsequently adjusted to 30% and 45%, respectively, to accommodate the new annual component. In addition to the modification to the measurement periods, the HCCC added an additional metric, revenue, to the existing financial metric of adjusted operating income. Adjusted operating income is used because it is considered a performance measure over which executives can have significant impact and is also directly linked to the long-term strategic plan and performance that drives long-term stockholder value. In line with our strategic plan to be a profitable growth company, revenue was added as a balance to the adjusted operating income metric. While the plans provide for adjustment due to extraordinary items, Spring, Fall and annual payouts reflect the actual, quantitative results, without retroactive adjustments. At the beginning of the fiscal year and each six-month season, operating income and revenue goals are set by the HCCC with recommendations from management. The goals are based on:
Short-Term Performance-Based Cash Incentive Compensation
| • | An analysis of historical performance |
Short-Term Performance-Based Cash Incentive Compensation
| • | Income goals |
Short-Term Performance-Based Cash Incentive Compensation
| • | Overall economic environment including financial results of other comparable businesses |
Short-Term Performance-Based Cash Incentive Compensation
| • | Progress toward achieving our long-term strategic plan |
Short-Term Performance-Based Cash Incentive Compensation
The table below shows the operating income (“OI”) goals for VS&Co for each performance period required to earn short-term performance-based incentive compensation at target and actual performance. The full performance bands are shown along with corresponding payout per the plan design for threshold, target and maximum performance.
Short-Term Performance-Based Cash Incentive Compensation
| | Fiscal 2023 Spring Season | | | | Fiscal 2023 Fall Season | | | | Fiscal 2023 Annual | | | | | | Threshold | Target(1) | Maximum | Actual(2) | Threshold | Target(1) | Maximum | Actual(2) | Threshold | Target(1) | Maximum | Actual(2) | | Revenue $($ millions) | 2,760 | 2,935 | 3,070 | 2,688 | 3,090 | 3,285 | 3,520 | 3,215 | 6,455 | 6,750 | 6,965 | 6,182 | | OI $ Performance ($ millions) | 155 | 230 | 305 | 98 | 130 | 230 | 330 | 205 | 455 | 590 | 725 | 327 | | Plan Payout | 20% | 100% | 200% | 0% | 20% | 100% | 200% | 77.9% | 20% | 100% | 200% | 0% |
Short-Term Performance-Based Cash Incentive Compensation
| (1) Revenue and operating income goals and performance for VS&Co reflect goals and performance for the total segment, including international operations and North America operations. |
Short-Term Performance-Based Cash Incentive Compensation
| | 54 | 2024 PROXY STATEMENT |
Short-Term Performance-Based Cash Incentive Compensation
| (2) Actual performance presents operating income on an adjusted basis that removes certain non-recurring, infrequent or unusual items that are not indicative of ongoing operations due to their size and nature. VS&Co uses adjusted financial information as key performance measures of results for purposes of evaluating performance internally, which may not correspond to amounts reported externally. |
Short-Term Performance-Based Cash Incentive Compensation
Performance between threshold and target and target and maximum is interpolated to determine payout percentage beginning at 20% for threshold performance up to 200% at maximum performance. Fall 2023 seasonal financial targets for VS&Co were set below prior year actual results to reflect macroeconomic pressure on our business observed in Spring 2023. When evaluating financial goals, the HCCC compares the change in operating income relative to the change in the incentive payments to associates to analyze the reasonableness of the potential payout. Short-term performance-based cash incentive compensation targets are set as a percentage of base salary with the amount earned ranging from zero to double the target incentive, based on the extent to which financial goals are achieved or exceeded. Payouts for fiscal 2023 performance are set forth below and in the “Non-Equity Incentive Plan Compensation” column of the 2023 Summary Compensation Table. Spring, Fall and annual payouts reflect the actual, quantitative results originally set at the beginning of each period.
Total Fiscal 2023 Short-Term Incentive Payout
Total Fiscal 2023 Short-Term Incentive Payout
Total Fiscal 2023 Short-Term Incentive Payout
| | Target (% of Base Salary) (%) | Fiscal 2023 Target Incentive ($) | Fiscal 2023 Spring Incentive Payout(1) ($) | Fiscal 2023 Fall Incentive Payout(2) ($) | Fiscal 2023 Annual Incentive Payout(3) ($) | Total Fiscal 2023 Payout ($) | Percent of Fiscal 2023 Target (%) | | Mr. Waters | 180 | 2,250,000 | — | 788,738 | — | 788,738 | 35 | | Mr. Johnson | 100 | 800,000 | — | 280,440 | — | 280,440 | 35 | | Ms. McAfee | 100 | 725,000 | — | 254,149 | — | 254,149 | 35 | | Ms. Rupp | 170 | 1,674,500 | — | 586,996 | — | 586,996 | 35 | | Mr. Unis(4) | 170 | 1,717,018 | — | 634,671 | — | 634,671 | 37 |
Total Fiscal 2023 Short-Term Incentive Payout
| (1) Spring payout awarded at 0% based on achievement against operating income and revenue goals. |
Total Fiscal 2023 Short-Term Incentive Payout
| (2) Fall payout awarded at 77.9% based on achievement against operating income and revenue goals. |
Total Fiscal 2023 Short-Term Incentive Payout
| (3) Annual payout awarded at 0% based on achievement against operating income and revenue goals. |
Total Fiscal 2023 Short-Term Incentive Payout
| (4) Mr. Unis’s payout was pro-rated based on the number of days his base salary increase was in effect before and after his promotion. |
Total Fiscal 2023 Short-Term Incentive Payout
The HCCC, in consultation with its compensation consultant, reviews performance metrics, performance periods, vesting and other terms and conditions as appropriate for VS&Co considering our business goals and objectives.
Long-Term Equity Compensation
Long-Term Equity Compensation Equity awards granted to certain of our NEOs in fiscal 2021 were granted under L Brands’ equity compensation program prior to the spin-off. L Brands’ long-term equity compensation program for executive officers had historically been comprised of a mix of three types of awards: performance stock units (“PSUs”), time-vested restricted stock units (“RSUs”) and stock options, providing a balance of performance-based incentives, alignment with stockholders, and retention. Only Martin Waters was an executive officer of L Brands prior to the spin-off. Mr. Unis was a division leader and participated in an L Brands equity compensation program comprised of time-vested RSUs and stock options. For fiscal 2023, the HCCC, in consultation with its compensation consultant, reviewed the long-term performance metrics, vesting and other terms and conditions of our long-term incentive (“LTI”) compensation structure and approved the following terms of VS&Co’s LTI program, which were consistent with 2022:
Long-Term Equity Compensation
| • | The CEO and other executive officers receive a mix of both PSUs and RSUs. |
Long-Term Equity Compensation
| | 55 | 2024 PROXY STATEMENT |
Long-Term Equity Compensation
| • | The CEO’s award is more heavily weighted to PSUs—at 70% for 2023. |
Long-Term Equity Compensation
| • | The other executive officers have an equal portion of their LTI award in PSUs and time-vested RSUs. |
Long-Term Equity Compensation
The HCCC believes it is important that all executive officers of VS&Co receive performance based LTI compensation to align the interests of the executive with our stockholders. The PSU metrics are comprised of three-year operating income goals and three-year relative total shareholder return compared to the S&P 1500 Specialty Retail Index. The two PSU metrics are weighted equally. The two metrics strike a balance between an internal directly controllable metric and a metric that acts as a measure of our success compared to other specialty retail peers. For the portion of the PSU measured by VS&Co total shareholder return percentile ranking against the S&P 1500 Specialty Retail Index, the payout is earned as follows:
Long-Term Equity Compensation
| Performance | Payout | | Below 25th Percentile | —% | | 25th Percentile | 50% | | 50th Percentile | 100% | | 75th Percentile and above | 200% |
Long-Term Equity Compensation
Interpolation for payout is used for achievement between 25th and 50th percentile and 50th and 75th percentile. The 2023 PSU operating income goals were set to drive meaningful growth in profit and stockholder value. Through a combination of higher sales and savings through transforming our foundation, the compound annual operating income growth rate for threshold, target and maximum were low single digit, low double digit and greater than 20% growth, respectively. In determining the size of any grants of equity awards, the HCCC takes into account the applicable executive’s individual performance (including contribution to the achievement of business goals, execution of retail fundamentals and accomplishment of talent and cultural objectives), company performance, competitive practice, VS&Co’s overall equity compensation expense budget, stockholder dilution, internal equity, and retention risk. The table below shows the long-term incentive awards made in the March 2023 annual grant.
Long-Term Equity Compensation
| | RSUs ($) | PSUs ($) | Total ($) | | Mr. Waters | 2,400,000 | 5,600,000 | 8,000,000 | | Mr. Johnson | 800,000 | 800,000 | 1,600,000 | | Ms. McAfee | 725,000 | 725,000 | 1,450,000 | | Ms. Rupp | 985,000 | 985,000 | 1,970,000 | | Mr. Unis | 905,000 | 905,000 | 1,810,000 |
Long-Term Equity Compensation
In addition to Mr. Unis’s annual grant, the HCCC approved a $1,500,000 grant in July 2023, split evenly between RSUs and PSUs, in connection with his promotion to Brand President of Victoria’s Secret Lingerie and PINK.
Inducement Cash Bonus Awards
Inducement Cash Bonus Awards As part of Ms. Rupp’s compensation arrangement made at her hire, to offset anticipated near-term future payments at her then-current employer, VS&Co agreed to pay Ms. Rupp a one-time hire-on bonus paid on the first anniversary of her hire date if she was actively employed at the date. There are no other cash bonus arrangements with Ms. Rupp or any other executive officer.
Inducement Cash Bonus Awards
| | 56 | 2024 PROXY STATEMENT |
Inducement Cash Bonus Awards
| NEO | Total Cash Retention Bonus Award Amount ($) | | Ms. Rupp | 960,000 |
Termination Benefits: Severance and Change in Control Agreements
Termination Benefits: Severance and Change in Control Agreements VS&Co has entered into severance and change in control agreements with certain executives, including Messrs. Waters, Johnson, and Unis and Mses. McAfee and Rupp. For additional information regarding these arrangements, see “Estimated Post-Employment Payments and Benefits” below. Upon a change in control of VS&Co, VS&Co equity awards will only vest if the executive’s employment is terminated by the executive for good reason or by VS&Co other than for cause within 24 months of the change in control. None of VS&Co’s executives (including our NEOs) is entitled to a tax gross-up for any excise taxes on compensation paid in connection with a change in control.
Recovery of Cash Bonus and Stock Compensation
Recovery of Cash Bonus and Stock Compensation In 2022, the HCCC adopted a new incentive compensation Clawback Policy in line with corporate governance best practice. The policy was further revised in 2023 to comply with SEC rules and NYSE listing requirements. Our Clawback Policy includes a cause-related clawback provision that applies to all cash-based performance or incentive compensation and any equity compensation granted, awarded, issued, paid or payable for all Senior Vice Presidents and above. The HCCC determines if a cause-related clawback trigger exists. The triggers are defined as:
Recovery of Cash Bonus and Stock Compensation
| • | an executive was grossly negligent in the performance of duties; |
Recovery of Cash Bonus and Stock Compensation
| • | an executive has pled “guilty” or “no contest” to, or has been convicted of, an act which is defined as a felony under applicable federal or state law; |
Recovery of Cash Bonus and Stock Compensation
| • | an executive has engaged in misconduct in bad faith that could reasonably be expected to materially harm the Company’s business or its reputation; or |
Recovery of Cash Bonus and Stock Compensation
| • | an executive has violated a material provision of the Company’s Code of Conduct, including, but not limited to, committing Subject Conduct or other violations of the Company’s Discrimination, Anti-Harassment, Sexual Harassment and Non-Retaliation policies. “Subject Conduct” means sexual harassment (including creation of a hostile work environment), gender discrimination and retaliation. |
Recovery of Cash Bonus and Stock Compensation
Our Clawback Policy is filed as an exhibit to our 2023 Annual Report.
Risk Assessment
programs, share ownership guidelines for named executive officers, as well as the multiyear vesting schedules for equity awards encourage employees to maintain both a short-and long-term view with respect to Company performance. Compensation Committee Report The Human Capital and Compensation Committee of the Board of Directors is composed of five directors who are independent, as defined under the NYSE listing standards. Additionally, each member of the Human Capital and Compensation Committee is a “non-employee director” within the meaning of Section 16b-3 under the Securities Exchange Act of 1934, as amended. The Human Capital and Compensation Committee has reviewed and discussed the CD&A with management. Based on that review and discussion, the Human Capital and Compensation Committee recommended to the Board that the CD&A be included in this Proxy Statement and in the Annual Report on Form 10-K for the fiscal year ended February 3, 2024. Human Capital and Compensation Committee Irene Chang Britt, Chair Jacqueline Hernández Rod Little Lauren Peters Anne Sheehan
2023 Summary Compensation Table
2023 Summary Compensation Table The following table sets forth information concerning total compensation earned by or paid to our NEOs for the fiscal year ended February 3, 2024.
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Martin Waters Chief Executive Officer | 2023 | 1,250,000 | – | 8,851,198 | – | 788,738 | 35,315 | 10,925,251 | | | 2022 | 1,250,000 | 1,000,000 | 9,450,415 | – | 788,400 | 31,097 | 12,519,912 | | | 2021 | 1,250,000 | 1,600,000 | 6,500,029 | – | 3,395,700 | 125,956 | 12,905,231 | | Timothy Johnson Chief Financial and Administrative Officer | 2023 | 795,755 | – | 1,721,602 | – | 280,440 | 34,973 | 2,832,770 | | | 2022 | 770,673 | – | 2,315,465 | – | 271,560 | 14,542 | 3,372,240 | | | 2021 | 498,626 | – | 1,500,025 | – | 656,732 | 213 | 2,655,596 | | Melinda McAfee Chief Human Resources and Legal Officer | 2023 | 720,755 | – | 1,560,183 | – | 254,149 | 29,695 | 2,564,782 | | Christine Rupp Chief Customer Officer | 2023 | 980,755 | 960,000 | 2,119,695 | – | 586,996 | 18,291 | 4,665,737 | | | 2022 | 382,418 | – | 4,248,661 | – | 455,597 | 585,286 | 5,671,962 | | Gregory Unis(6) Brand President, Victoria’s Secret and PINK | 2023 | 997,358 | – | 3,561,545 | – | 634,671 | 36,385 | 5,229,959 | | | 2022 | 880,000 | 700,000 | 2,617,456 | – | 524,198 | 31,281 | 4,752,935 | | | 2021 | 874,808 | 1,400,000 | 660,002 | 220,001 | 2,257,763 | 179,144 | 5,597,399 |
2023 Summary Compensation Table
| (1) The amounts reported for 2023 represent a sign on bonus paid on the one-year anniversary of Ms. Rupp’s start date. |
2023 Summary Compensation Table
| (2) The amounts reported represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of PSUs (at target) and RSUs granted during the fiscal year. The amounts reported do not represent amounts paid to or realized by the NEOs. Assumptions used in the calculation of the stock awards included in this column are included in Note 19 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended February 3, 2024. The accounting values of the PSUs granted during fiscal 2023 assuming that the highest level of performance conditions will be achieved are: Mr. Waters—$12,902,377; Mr. Johnson—$1,843,198; Ms. McAfee—$1,670,382; Ms. Rupp—$2,269,409; Mr. Unis—$3,813,104. |
2023 Summary Compensation Table
| (3) The amounts reported represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of stock options granted to our NEOs. |
2023 Summary Compensation Table
| (4) The amounts reported represent the aggregate value of the non-equity performance-based incentive compensation paid for the applicable Spring and Fall selling seasons and the annual performance period based on the full fiscal year, as applicable. Incentive compensation targets are set based on a percentage of base salary and are paid both seasonally and annually based on the achievement of adjusted operating income and revenue results. |
2023 Summary Compensation Table
| | 60 | 2024 PROXY STATEMENT |
2023 Summary Compensation Table
| (5) The elements of compensation included in the “All Other Compensation” column for fiscal 2023 are set forth in the table below. |
2023 Summary Compensation Table
| Name | Company Contributions to the Executive’s Qualified and Non-Qualified Retirement Plan Account ($) | Incremental Company Cost to Provide Supplemental Life and Disability Insurance Coverage ($) | Other ($) | Total ($) | | Martin Waters | 34,685 | 630 | – | 35,315 | | Timothy Johnson | 34,301 | 672 | – | 34,973 | | Melinda McAfee | 29,086 | 609 | – | 29,695 | | Christine Rupp | 17,464 | 827 | – | 18,291 | | Gregory Unis | 35,600 | 785 | – | 36,385 |
2023 Summary Compensation Table
| (6) Mr. Unis took on additional responsibility as Brand President of Victoria’s Secret Lingerie and PINK, in addition to keeping his role as Head of Victoria’s Secret Beauty and New Business Development. In addition to his annual long-term incentive award grant, the amount shown includes $750,000 of RSUs and $864,000 of PSUs granted in connection with his expanded role. |
2023 Summary Compensation Table
| | 61 | 2024 PROXY STATEMENT |
Grants of Plan-Based Awards for Fiscal 2023
Grants of Plan-Based Awards for Fiscal 2023 The following table provides information relating to plan-based awards and opportunities granted to the NEOs during fiscal 2023.
Grants of Plan-Based Awards for Fiscal 2023
| | | | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | | | | Name/Award Type | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | Martin Waters | | | | | | | | | | | | Annual Incentive | | | 450,000 | 2,250,000 | 4,500,000 | | | | | | | PSUs | 3/16/2023 | 3/14/2023 | | | | 90,968 | 181,936 | 363,872 | | 6,451,189 | | RSUs | 3/16/2023 | 3/14/2023 | | | | | | | 77,973 | 2,400,009 | | Timothy Johnson | | | | | | | | | | | | Annual Incentive | | | 160,000 | 800,000 | 1,600,000 | | | | | | | PSUs | 3/16/2023 | 3/14/2023 | | | | 12,996 | 25,991 | 51,982 | | 921,599 | | RSUs | 3/16/2023 | 3/14/2023 | | | | | | | 25,991 | 800,003 | | Melinda McAfee | | | | | | | | | | | | Annual Incentive | | | 145,000 | 725,000 | 1,450,000 | | | | | | | PSUs | 3/16/2023 | 3/14/2023 | | | | 11,777 | 23,554 | 47,108 | | 835,191 | | RSUs | 3/16/2023 | 3/14/2023 | | | | | | | 23,554 | 724,992 | | Christine Rupp | | | | | | | | | | | | Annual Incentive | | | 334,900 | 1,674,500 | 3,349,000 | | | | | | | PSUs | 3/16/2023 | 3/14/2023 | | | | 16,001 | 32,001 | 64,002 | | 1,134,705 | | RSUs | 3/16/2023 | 3/14/2023 | | | | | | | 32,001 | 984,991 | | Gregory Unis | | | | | | | | | | | | Annual Incentive | | | 343,404 | 1,717,018 | 3,434,036 | | | | | | | PSUs | 3/16/2023 | 3/14/2023 | | | | 14,701 | 29,402 | 58,504 | | 1,042,553 | | RSUs | 3/16/2023 | 3/14/2023 | | | | | | | 29,402 | 904,994 | | PSUs(5) | 7/3/2023 | 6/15/2023 | | | | 20,903 | 41,806 | 83,612 | | 864,000 | | RSUs(5) | 7/3/2023 | 6/15/2023 | | | | | | | 41,806 | 750,000 |
Grants of Plan-Based Awards for Fiscal 2023
| (1) “Non-Equity Incentive Plan Awards” represent the threshold, target and maximum opportunities for the fiscal 2023 Spring and Fall seasons and the annual performance period based on the full fiscal year. The actual amount earned under this plan is disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. |
Grants of Plan-Based Awards for Fiscal 2023
| (2) “Equity Incentive Plan Awards” are PSUs granted during the fiscal year pursuant to the VS 2021 Stock Plan. PSUs are eligible to vest at the end of the three-year performance period, with the number of shares to be awarded determined based on the achievement of (i) 3-year cumulative operating income goals and (ii) 3-year cumulative total shareholder return relative to the S&P 1500 Specialty Retail Index. |
Grants of Plan-Based Awards for Fiscal 2023
| | 62 | 2024 PROXY STATEMENT |
Grants of Plan-Based Awards for Fiscal 2023
| (3) “All Other Stock Awards” are RSUs granted during the fiscal year pursuant to the VS 2021 Stock Plan. Awards vest 30% on the first and second anniversary of the grant date and 40% on the third anniversary of the grant date. |
Grants of Plan-Based Awards for Fiscal 2023
| (4) We valued the RSUs, and the portion of the PSUs based on 3-year cumulative operating income results, by multiplying the closing price of our common shares on the NYSE on the grant date by the number of units awarded. We valued the portion of the PSUs based on 3-year cumulative total shareholder return relative to the S&P 1500 Specialty Retail Index results using a Monte Carlo simulation valuation model which applies a risk-free interest rate and volatility assumptions. The risk-free interest rate is based on treasury constant maturity yields as reported in the H.15 Federal Reserve Statistical Release on the grant date with a term corresponding to the length of the remaining performance period. Due to our limited trading history, the volatility assumption was set equal to the average volatility for the companies in the S&P 1500 Specialty Retail Index and VS&Co was excluded from the correlation calculation. The assumed per-share value is 130.4% of the closing stock price on the date of the grant, using a risk-free interest rate of 4.01% and volatility of 47.1%. The accounting values differ from the compensation values of the PSU awards disclosed in the CD&A. |
Grants of Plan-Based Awards for Fiscal 2023
| (5) PSUs and RSUs granted in connection with a reorganization in July 2023 in which Mr. Unis took on greater responsibility. |
Grants of Plan-Based Awards for Fiscal 2023
| | 63 | 2024 PROXY STATEMENT |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023 The table below shows the number of shares underlying exercisable and unexercisable stock options and unvested PSUs and RSUs held by our NEOs on February 3, 2024. For awards granted prior to our spin-off from L Brands, the number of options, PSUs and RSUs represent the adjusted number of outstanding awards. The awards and grant price were adjusted in a manner intended to preserve the overall intrinsic value of the converted equity awards by taking into account the relative value of L Brands common stock before the spin-off and the value of VS&Co common stock after the spin-off.
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| | Option Awards | | | | | Stock Awards | | | | | Name | Option Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($/Sh) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1)(2) | | Martin Waters | 3/31/2014 | 35,697 | – | 32.56 | 3/31/2024 | | | | | | | 4/2/2015 | 23,285 | – | 54.76 | 4/2/2025 | | | | | | | 3/31/2016 | 14,221 | – | 52.74 | 3/31/2026 | | | | | | | 3/31/2017 | 23,861 | – | 28.29 | 3/31/2027 | | | | | | | 3/21/2018 | 29,302 | – | 23.68 | 3/21/2028 | | | | | | | 3/28/2019 | 42,459 | – | 16.78 | 3/28/2029 | | | | | | | | | | | | 110,601(3) | 2,988,439 | 345,878(4) | 9,345,624 | | Timothy Johnson | | | | | | 55,962(5) | 1,512,093 | 36,932(6) | 997,903 | | Melinda McAfee | | | | | | 46,372(7) | 1,252,971 | 35,544(8) | 960,399 | | Christine Rupp | | | | | | 102,209(9) | 2,761,687 | 47,838(10) | 1,292,583 | | Gregory Unis | 3/31/2017 | 17,895 | – | 28.29 | 3/31/2027 | | | | | | | 3/21/2018 | 23,757 | – | 23.68 | 3/21/2028 | | | | | | | 3/28/2019 | 37,990 | – | 16.78 | 3/28/2029 | | | | | | | 3/16/2021 | 9,118 | 9,115(11) | 36.20 | 3/16/2031 | | | | | | | | | | | | 92,287(12) | 2,493,595 | 86,583(13) | 2,339,473 |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (1) The market value is the product of $27.02, the closing price of our common shares on the NYSE on February 2, 2024, and the number of shares subject to unvested stock awards. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (2) Based on current performance in accordance with the SEC rules, PSUs granted in fiscal 2021 and fiscal 2022 assume threshold payout level and PSUs granted in fiscal 2023 assume target payout level. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (3) Reflects RSUs that vest as follows: 37,376 shares on March 16, 2024; 42,036 shares on March 16, 2025; and 31,189 shares on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (4) Subject to achievement of performance conditions; 109,562 shares vest on February 5, 2024, 54,380 shares vest on March 16, 2025 and 181,936 shares vest on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (5) Reflects RSUs that vest as follows: 12,313 shares on March 16, 2024; 14,655 shares on June 2, 2024; 2,048 shares on August 1, 2024; 13,818 shares on March 16, 2025; 2,732 shares on August 1, 2025; and 10,396 shares on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (6) Subject to achievement of performance conditions; 10,941 shares vest on March 16, 2025 and 25,991 shares vest on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (7) Reflects RSUs that vest as follows: 10,270 shares on March 16, 2024; 5,195 shares on May 19, 2024; 837 shares on August 18, 2024; 3,990 shares on October 31, 2024; 11,339 shares on March 16, 2025; 5,319 shares on October 31, 2025; and 9,422 shares on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (8) Subject to achievement of performance conditions; 11,990 shares vest on March 16, 2025 and 23,554 shares vest on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (9) Reflects RSUs that vest as follows: 9,600 shares on March 16, 2024; 30,089 shares on October 3, 2024; 9,601 shares on March 16, 2025; 40,119 shares on October 3, 2025; and 12,800 shares on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (10) Subject to achievement of performance conditions; 15,837 shares vest on March 16, 2025 and 32,001 shares vest on March 16, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (11) Options vest on March 16, 2024. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| | 64 | 2024 PROXY STATEMENT |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (12) Reflects RSUs that vest as follows: 23,064 shares on March 16, 2024; 12,542 shares on July 3, 2024; 15,656 shares on March 16, 2025; 12,542 shares on July 3, 2025; 11,761 shares on March 16, 2026; and 16,722 shares on July 3, 2026. |
Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023
| (13) Subject to achievement of performance conditions; 15,375 shares vest on March 16, 2025 and 71,208 on March 16, 2026. |
Option Exercises and Stock Vested for Fiscal 2023
Option Exercises and Stock Vested for Fiscal 2023 The table below shows stock options that were exercised and RSUs that vested during fiscal 2023 for each of our NEOs.
Option Exercises and Stock Vested for Fiscal 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($) | | Martin Waters | – | – | 77,914 | 2,224,590 | | Timothy Johnson | – | – | 17,555 | 400,942 | | Melinda McAfee | – | – | 11,717 | 281,997 | | Christine Rupp | – | – | 30,089 | 452,238 | | Gregory Unis | – | – | 37,920 | 1,185,590 |
Option Exercises and Stock Vested for Fiscal 2023
| (1) This column represents the vesting during fiscal 2023 of RSUs granted during fiscal 2018, 2020, 2021 and 2022. |
Messrs. Johnson and Unis and Mses. McAfee and Rupp’s Employment Agreements
| (2) To calculate Compensation Actually Paid (“CAP”), the following amounts were deducted from and added to Summary Compensation Table (“SCT”) total compensation: |
Pay Versus Performance Comparative Disclosure
Pay Versus Performance Comparative Disclosure As described in more detail in the Compensation Program section in the CD&A, the Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the table above. Further, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with Compensation Actually Paid for a particular year (as computed in accordance with Item 402(v) of Regulation S-K). In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between the information presented in the table above. Company TSR and Peer Group TSR The chart below compares VS&Co’s TSR performance to the TSR performance of the S&P 500 Consumer Discretionary Distribution & Retail Index.
Pay Versus Performance Comparative Disclosure
| | 73 | 2024 PROXY STATEMENT |
Pay Versus Performance Comparative Disclosure
Compensation Actually Paid and Certain Financial Measures As shown in the chart below, the PEO and average non-PEO NEO’s CAP amounts are aligned with Company TSR, net income and operating income performance. The use of long-term equity compensation is tied directly to the stock price as well as our financial performance.
Pay Versus Performance Tabular List
Pay Versus Performance Tabular List The three items listed below represent the most important metrics for determining pay in the previous year, as further described in the Short-Term Performance-Based Cash Incentive Compensation and Long-Term Equity Compensation sections in the CD&A. The performance measures in this table are not ranked by relative importance.