DEF 14A of Sally Beauty Holdings, Inc.
Filed Dec 11, 2024 · FY20240001193125-24-275572
DIRECTOR NOMINEES
DIRECTOR NOMINEES Nine nominees are standing for election at the 2025 Annual Meeting for one-year terms as directors. The following table provides summary information about each of the director nominees as well as their committee memberships. The table also discloses the Board’s determination as to the independence of each nominee under the listing standards of the New York Stock Exchange (“NYSE”) and relevant rules of the Securities and Exchange Commission (“SEC”). Additional information about each nominee’s background and experience can be found beginning on page 12. To be elected, each nominee must receive more votes cast “for” such nominee’s election than votes cast “against” such nominee’s election.
DIRECTOR NOMINEES
| Name | Age | Director Since | Occupation | Experience / Qualification | Indep. | AC | CC | NG/ CR | EC | | Denise Paulonis | 52 | May 2018 | President & CEO, Sally Beauty Holdings, Inc. | Management, Finance, Audit, International Retail | | | | | • | | Rachel R. Bishop, Ph.D. | 51 | July 2022 | President, Hefty Tableware, Reynolds Consumer Products | Consumer Products, Retail, ESG, M&A | ✓ | | • | • | | | Jeffrey Boyer | 66 | July 2022 | COO, Fossil Group, Inc. | Management, Audit, Retail | ✓ | • | • | | | | Diana S. Ferguson (Board Chair) | 61 | Jan. 2019 | Principal, Scarlett Investments LLC | Management, Finance | ✓ | | C | | • | | Dorlisa K. Flur | 59 | Jan. 2020 | Advisor, Former Chief Strategy & Transformation Officer, Southeastern Grocers | Management, Mass Market Retail Transformation | ✓ | • | | • | | | James M. Head | 59 | Jan. 2021 | Former CFO, MultiPlan Corporation | Finance, Strategy, M&A | ✓ | • | | | C | | Lawrence “Chip” P. Molloy | 63 | July 2022 | Retired; Former CFO, Sprouts Farmers Market | Management, Finance, Audit | ✓ | C | | | • | | Erin Nealy Cox | 54 | July 2021 (Also Aug. 2016 to Nov. 2017) | Partner, Kirkland & Ellis | Cyber Security, Governance, Legal | ✓ | | | C | • | | Debra Perelman | 51 | — | Former President & CEO, Revlon, Inc. | Beauty Industry, Finance, Retail, Management | ✓ | | | | |
DIRECTOR NOMINEES
Committees: AC = Audit CC = Compensation & Talent NG/CR = Nominating, Governance and Corporate Responsibility EC = Executive C = Chair Each director nominee elected will serve until the 2026 annual meeting. The Board recommends a vote FOR each nominee.
BOARD NOMINEES SNAPSHOT
BOARD NOMINEES SNAPSHOT
BOARD NOMINEES SNAPSHOT
| Diversity | Independence | | | | | Age Mix | Tenure | | | |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
| Our current Board of Directors consists of nine individuals, eight of whom qualify as independent of us under the rules of the NYSE. Eight of our current nine directors are standing for re-election. Our Certificate of Incorporation and our By-Laws provide for the annual election of each of our directors for one-year terms. Following the recommendations of our Nominating, Governance and Corporate Responsibility Committee, our Board of Directors has nominated the following nine individuals for election to our Board of Directors: Ms. Paulonis, Ms. Bishop, Mr. Boyer, Ms. Ferguson, Ms. Flur, Mr. Head, Mr. Molloy, Ms. Nealy Cox and Debra Perelman. Accordingly, this Proposal 1 seeks the election of these nine individuals to be directors, each with a one-year term that will expire at the annual meeting of stockholders in 2026. Due to a job change Mr. Conroy is not standing for re-election, but will serve out his current term. Unless otherwise indicated, all proxies that authorize the proxy holders to vote for the election of directors will be voted “FOR” the election of the nominees listed below. If a nominee becomes unavailable for election as a result of unforeseen circumstances, it is the intention of the proxy holders to vote for the election of such substitute nominee, if any, as the Board of Directors may propose. As of the date of this Proxy Statement, each of the nominees has consented to serve and the Board is not aware of any circumstances that would cause a nominee to be unable to serve as a director. Except for Debra Perelman who is standing for election to our Board for the first time, each director nominee is a current director with a term expiring at this annual meeting. Each director nominee has furnished to us the following information with respect to their principal occupation or employment and principal directorships: | | | | Denise A. Paulonis | | | Director, President and Chief Executive Officer, age 52 Ms. Paulonis has served on our Board of Directors since May 2018 and is the Company’s President and Chief Executive Officer, a role she has held since October 2021. Prior to being appointed to her current role, Ms. Paulonis served as Chief Financial Officer of Sprouts Farmers Market, Inc. Prior to joining Sprouts in February 2020, Ms. Paulonis was the Executive Vice President and Chief Financial Officer of The Michaels Companies, a position she held from August 2016 to January 2020. Ms. Paulonis joined Michaels in September 2014 and served as its Senior Vice President, Finance and Treasurer from November 2015 to August 2016 and as its Vice President, Corporate Finance, Investor Relations and Treasury from September 2014 to November 2015. Prior to joining Michaels, Ms. Paulonis held various senior level positions with PepsiCo and McKinsey & Company, after starting her career at Procter & Gamble. She holds an M.B.A. from The Wharton School at the University of Pennsylvania and a Bachelors of Science in Finance and Economics from Miami University. Ms. Paulonis has served on the Conagra Brands Board of Directors since August 2022. We believe that Ms. Paulonis’ executive, management and finance experience well qualifies her to serve on our Board. |
ELECTION OF DIRECTORS
| Rachel R. Bishop, Ph.D. | | | Director, age 51 Ms. Bishop was elected to our Board of Directors in July 2022. Ms. Bishop brings more than 20 years of experience in consumer goods, manufacturing and retail. She currently serves as President, Hefty Tableware at Reynolds Consumer Products (NASDAQ: REYN), where she oversees a $1Bn portfolio of consumer products and leads Reynolds’ ESG programming. She was a member of the management team that led Reynolds through a successful IPO in January 2020. Prior to joining Reynolds in 2019, she held senior positions with Treehouse Foods, Inc., (NYSE: THS) from 2014 through 2018, including President, Snacks Division and SVP & Chief Strategy Officer. Her previous roles include GVP Retail Development and Global Merchandising at The Walgreen Co., now Walgreens Boots Alliance Inc., and started her business career with eight years at McKinsey & Company. Ms. Bishop holds a Ph.D. in Materials Science and Engineering from Northwestern University, and a Bachelor of Science in Materials Science and Engineering, and in Geophysics from Brown University. We believe that Ms. Bishop’s strong executive background in consumer products, retail, ESG, M&A and strategic planning well qualifies her to serve on our Board. | | | Jeffrey Boyer | | | Director, age 66 Mr. Boyer was elected to our Board of Directors in July 2022. Mr. Boyer is an experienced finance and operations executive and retail industry veteran. He currently serves as Chief Operating Officer of Fossil Group (NASDAQ: FOSL) after having held the roles of Chief Financial Officer and Treasurer from October 2017 to April 2020. Mr. Boyer also served as a director on Fossil Group’s Board from 2007 to 2017, including serving as Chair and a member of its Audit Committee. Prior to joining Fossil Group, Mr. Boyer held Chief Financial Officer roles at Pier 1 Imports, Tuesday Morning, and Michaels Stores, Inc., among others. He began his career at PricewaterhouseCoopers. Mr. Boyer holds a Bachelor of Science in Finance from the University of Illinois. We believe that Mr. Boyer’s extensive finance and operations experience, and his executive leadership in retail, well qualifies him to serve on our Board. | |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
| | Diana S. Ferguson | | | Director, age 61 Ms. Ferguson was elected to our Board of Directors in January 2019 and has served as Chair of the Board since January 2023. Ms. Ferguson has served as a principal of Scarlett Investments, LLC, a private investment firm, since 2013. She formerly served as Chief Financial Officer to Cleveland Avenue, LLC, a venture capital investment firm, from September 2015 to December 2020. She also served as Chief Financial Officer of the Chicago Board of Education from February 2010 to May 2011 and as Senior Vice President and Chief Financial Officer of The Folgers Coffee Company from April 2008 to November 2008 when Folgers was sold. Prior to joining Folgers, she was Executive Vice President and Chief Financial Officer of Merisant Worldwide, Inc. Ms. Ferguson also served as the Chief Financial Officer of Sara Lee Foodservice, a division of Sara Lee Corporation, and in a number of leadership positions at Sara Lee Corporation, including Senior Vice President of Strategy and Corporate Development, as well as Treasurer. She currently is a director of Mattel, Inc., where she serves on the Audit Committee and is also a director of Gartner, Inc., where she serves on the Audit Committee. We believe that Ms. Ferguson’s executive, management and finance experience well qualifies her to serve on our Board. | | | Dorlisa K. Flur | | | Director, age 59 Ms. Flur has served on our Board of Directors since 2020. Ms. Flur is a corporate director and strategic advisor to companies in the retail industry. She was recently appointed as a director of SpartanNash and serves on its Audit and Compensation Committees. She also serves as a director of United States Cold Storage, a wholly-owned subsidiary of John Swire & Sons, Ltd., and chairs its Strategy Committee. She is on the Board of Trustees for BlueCross BlueShield of NC and serves on its Audit and Governance & Nominating Committees. She previously served on the board of Hibbet, Inc. from 2019 to 2024. Ms. Flur has served as strategic advisor to Southeastern Grocers, Inc. since August 2018 and was previously its Chief Strategy and Transformation Officer from August 2016 to July 2018. Ms. Flur previously served as Executive Vice President, Omnichannel for Belk, Inc. from 2013 to 2016, where she integrated stores and eCommerce and also led supply chain. Prior to that she was Vice Chair, Strategy and Chief Administrative Officer at Family Dollar Stores, Inc. where she held a series of top operating roles including real estate, marketing and merchandising as the company scaled from 5000 to 7500 stores. Ms. Flur is a former partner of McKinsey & Company, Inc. and co-led its Charlotte, North Carolina office. She is recognized by the National Association of Corporate Directors as NACD Directorship Certified™ and also served as one of 24 Commissioners on its 2024 Blue Ribbon Commission on technology leadership in the boardroom. We believe that Ms. Flur’s governance, executive and management experience, including extensive work driving transformations within mass market retail, well qualifies her to serve on our Board. |
ELECTION OF DIRECTORS
| James M. Head | | | Director, age 59 Mr. Head was elected to our Board of Directors in January 2021. Mr. Head serves as Strategic Advisor at MultiPlan Corporation where he was the Executive Vice President and Chief Financial Officer from November, 2021 to August, 2024. Prior to his roles at MultiPlan, Mr. Head served as a Partner at BDT & Company, LLC from 2016 until June 2021 and, prior to that, worked at Morgan Stanley for 22 years where he held various executive leadership roles, including Co-Head of the Mergers, Acquisitions and Restructuring Group, Americas from 2013 to 2016; Co-Head of the Financial Institutions M&A Group, Americas from 2008 to 2013; and Managing Director from 2003 to 2016. We believe that Mr. Head’s financial, strategic, and transactional experience – including over 30 years as an investment banker involved in complex financial and strategic transactions – well qualifies him to serve on our Board. | | | Lawrence “Chip” P. Molloy | | | Director, age 63 Mr. Molloy was elected to our Board of Directors in July 2022. Mr. Molloy brings finance, private equity and board experience to Sally Beauty. He retired from Sprouts Farmers Market (NASDAQ: SFM) in January 2024 where he was Chief Financial Officer from September 2021 through 2023, Chair of the Audit and Compensation Committees of Sprouts’ board from 2012 to 2021 and Interim Chief Financial Officer from June 2019 to February 2020. Previously, Mr. Molloy served as a director and Chair of Torrid’s Audit Committee from 2018 to 2021 and Interim Chief Executive Officer of Torrid from January 2018 through August 2018. His previous roles include serving as Senior Advisor at Roark Capital Group, a private equity firm focused predominately on the restaurant and retail sectors, as well as holding Chief Financial Officer roles at Under Armour and PetSmart. Prior to his business career, Chip served as a U.S. Navy fighter pilot for 10 years, later retiring from the Naval Reserve with the rank of Commander. Mr. Molloy holds an MBA from the University of Virginia and a Bachelor of Science in Computer Science from the US Naval Academy. We believe that Mr. Molloy’s extensive executive and finance experience well qualifies him to serve on our Board. | |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
| | Erin Nealy Cox | | | Director, age 54 Ms. Nealy Cox has served on our Board of Directors since July 2021 and is a partner in the Government, Regulatory and Internal Investigations Group at Kirkland & Ellis. Ms. Nealy Cox is a trial attorney, cybersecurity expert and former federal prosecutor who served as an independent director on our Board from August 2016 to November 2017. She resigned from the Board when she was nominated and confirmed as the U.S. Attorney for the Northern District of Texas. Ms. Nealy Cox served in this role until January 2021. Prior to her appointment as the U.S. Attorney, she served briefly in 2017 as a senior advisor at McKinsey & Co. in the consulting firm’s cybersecurity and risk practice. From 2008 to 2016 Ms. Nealy Cox was executive managing director at Stroz Friedberg, a cybersecurity and investigations consulting firm. She began her career serving as an Assistant U.S. Attorney for ten years in the Northern District of Texas. We believe that Ms. Nealy Cox’s executive management, cybersecurity and legal experience well qualifies her to serve on our Board. | | | Debra Perelman | | | Director Nominee, age 51 Ms. Perelman is a successful advisor and investor who partners with investors and management teams to scale CPG brands. She is currently Executive Chair of Stripes Beauty, an L Catterton backed business as well as advisor to several beauty and wellness businesses. Ms. Perelman served as President and Chief Executive Officer of Revlon, Inc. from May 2018 to August 2023 and as Chief Operating Officer from January 2018 to May 2018. Prior to joining Revlon, Ms. Perelman served as Executive Vice President, Strategy and New Business Development from January 2012 until January 2018 at MacAndrews & Forbes Incorporated where she focused on new technology investment opportunities, strategy and portfolio management. Ms. Perelman is currently a director of AMC Networks, where she serves on the Audit Committee. Ms. Perelman sits on the board of Sakara, a nutrition based meal delivery business. She also sits on Mastercard’s Innovate Steering Committee. Ms. Perelman is co-founder and board member of the Child Mind Institute, an independent, national nonprofit dedicated to transforming the lives of children and families struggling with mental health and learning disorders. |
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES LISTED ABOVE. BOARD NOMINEE QUALIFICATIONS AND EXPERIENCE
ANNUAL ELECTION OF DIRECTORS
ANNUAL ELECTION OF DIRECTORS In 2014, the Board of Directors began the process of declassifying the Board to provide for the annual election of all directors for one-year terms. Our stockholders approved the declassification of the Board at our 2014 annual meeting of stockholders. At the annual meeting each year, all directors of the Board will be elected for one-year terms. At the 2025 annual meeting, our stockholders will elect nine individuals to serve on our Board.
FY24 Director Compensation Table (1)
FY24 Director Compensation Table (1)
FY24 Director Compensation Table (1)
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(4) | Total ($) | | Rachel R. Bishop, Ph.D. | 105,000 | 187,496 | 292,496 | | Jeffrey Boyer | 105,000 | 187,496 | 292,496 | | James Conroy | 71,827 | 149,997 | 221,824 | | Diana S. Ferguson | 280,000 | 187,496 | 467,496 | | Dorlisa K. Flur | 105,000 | 187,496 | 292,496 | | James M. Head | 105,000 | 187,496 | 292,496 | | Linda Heasley (2) | 33,462 | 187,496 | 220,958 | | Lawrence “Chip” P. Molloy | 135,000 | 187,496 | 322,496 | | Erin Nealy Cox | 125,000 | 187,496 | 312,496 | | Denise A. Paulonis (3) | — | — | — |
FY24 Director Compensation Table (1)
| (1) During FY24, we did not grant any stock options to, award any non-equity incentive plan compensation to, or maintain any pension or deferred compensation arrangements for members of our Board of Directors, and our directors did not receive any compensation that would constitute “All Other Compensation.” |
FY24 Director Compensation Table (1)
| (2) Ms. Heasley did not stand for re-election at the 2024 Annual Meeting. |
FY24 Director Compensation Table (1)
| (3) Ms. Paulonis did not receive compensation for her service as a director during FY24. |
FY24 Director Compensation Table (1)
| (4) Reflects the grant date fair value of restricted stock unit (RSU) awards, determined in accordance with Financial Accounting Standards Board ASC Topic 718 Stock Compensation (“ASC 718”). The grant date fair value of the RSUs is based on the fair market value of the underlying shares on the date of grant. On January 25, 2024, Mr. Conroy received 12,376 RSUs, which stock award had a grant date fair value of $149,997, and each director other than Ms. Paulonis and Mr. Conroy received 15,470 RSUs, which stock award had a grant date fair value equal to $187,496. As of September 30, 2024, the directors beneficially owned RSUs which were vested but not yet delivered in shares in the following amounts: (a) Ms. Bishop, 6,229; (b) Mr. Boyer, 0; (c) Mr. Conroy, 0; (d) Ms. Ferguson, 44,312; (e) Ms. Flur, 15,401; (f) Mr. Head, 26,750; (g) Ms. Heasley, 0; (h) Mr. Molloy, 12,458; (i) Ms. Nealy Cox, 20,503; and (j) Ms. Paulonis, 0. |
NARRATIVE DISCUSSION OF DIRECTOR COMPENSATION TABLE
NARRATIVE DISCUSSION OF DIRECTOR COMPENSATION TABLE The following is a narrative discussion of the material factors which we believe are necessary to understand the information disclosed in the Director Compensation Table. The Sally Beauty Holdings, Inc. Amended and Restated Independent Director Compensation Policy (the “Director Compensation Policy”) governs the compensation paid to our independent directors. Following FW Cook’s biennial review of our director compensation program in FY24, the Director Compensation Policy was amended with changes to take effect in FY25, beginning October 1, 2024. Under the revised Director Compensation Policy, the NEC additional cash retainer fee increased to $200,000, the NGCR committee chair fee increased to $22,500, and the annual Board equity retainer fee increased to $160,000, while the annual Board cash retainer fee remained unchanged.
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership of Common Stock (1) | Percent of Class (2) | | Marlo M. Cormier | 132,507(3) | * | | Mary Beth Edwards | 90,046(4) | * | | John H. Goss | 160,474(5) | * | | Kim McIntosh | 16,685(6) | * | | Denise A. Paulonis | 487,708(7) | * | | Scott C. Sherman | 191,504(8) | * | | Mark G. Spinks | 331,612(9) | * | | Rachel R. Bishop | 12,458(10) | * | | Jeffrey Boyer | 12,458(11) | * | | James Conroy | —(12) | * | | Diana S. Ferguson | 49,724(13) | * | | Dorlisa K. Flur | 42,537(14) | * | | James M. Head | 26,801(15) | * | | Lawrence “Chip” P. Molloy | 12,458(16) | * | | Erin Nealy Cox | 25,967(17) | * | | Debra Perelman | —(18) | * | | All directors and executive officers as a group (16 persons) | 1,592,939 | 1.56% |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (1) Except as otherwise noted, the directors and named executive officers, and all directors and executive officers as a group, have sole voting power and sole investment power over the shares listed. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (2) An asterisk indicates that the percentage of Common Stock projected to be beneficially owned by the named individual does not exceed one percent of our Common Stock. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (3) Includes 42,771 shares of Common Stock underlying vested stock options. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (4) Includes 41,775 shares of Common Stock underlying vested stock options and 100 shares held by trust. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (5) Includes 86,340 shares of Common Stock underlying vested stock options. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (6) Includes 0 shares of Common Stock underlying vested stock options. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (7) Includes 125,343 shares of Common Stock underlying vested stock options. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (8) Includes 149,073 shares of Common Stock underlying vested stock options. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (9) Includes 241,703 shares of Common Stock underlying vested stock options and 2,283 shares held as a participant in the Sally Beauty Holdings, Inc. 401(k) and Profit Sharing Plan. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (10) Includes 6,229 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (11) Includes 0 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (12) Includes 0 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (13) Includes 44,312 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (14) Includes 15,401 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (15) Includes 26,750 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (16) Includes 12,458 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (17) Includes 20,503 vested and deferred restricted stock units. |
SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
| (18) Ms. Perelman beneficially owns no common stock of the Company. |
EXECUTIVE SUMMARY
| FY24 Company Financial Performance | (1) Please see “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Annual Incentive” section of this CD&A for Comparable Sales and Adjusted Operating Income (“AOI”) definition. (2) Information in this Proxy Statement includes discussion of financial metrics that are not calculated in accordance with U.S. GAAP, including AOI, AOIM and Adjusted Diluted EPS. Please see Appendix 1 for a reconciliation of these measures to financial measures derived in accordance with U.S. GAAP. (3) 3-Year Average Return on Invested Capital (“ROIC”) is defined as net income plus after-tax interest expense divided by monthly invested capital over the three-year performance period. (4) Please see “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Long-Term Incentives” section of this CD&A for Total Shareholder Return (“TSR”) and Adjusted Operating Income Margin (“AOIM”) definition. |
EXECUTIVE SUMMARY
| FY24 Changes | Compensation Program Changes Going into FY24, as we looked at program design, we were focused on additional improvements to our supply chain end-to-end and activating key initiatives aimed at driving long-term future growth and enhanced efficiencies and profitability. We also strived to balance retention, incentivizing associates on key growth and efficiency initiatives and growing our value for shareholders. As a result, we: ✓ Flattened our payout scales and continued to set challenging, yet achievable goals aligned with our annual plan; ✓ Returned our maximum payouts to 200% and changed our threshold payouts to 50% (except for Comparable Sales and Strategic Initiatives), consistent with market; ✓ Maintained the same metrics and weightings for the Annual Incentive Plan (“AIP”) (60% AOI, 20% Comparable Sales, and 20% Strategic Initiatives), but implemented two, six-month Comparable Sales performance periods (“H1 Comparable Sales” and “H2 Comparable Sales”) versus a one-year performance period, with any payout for this metric occurring after the end of FY24; and ✓ Continued long-term incentive (“LTI”) awards in the form of 50% performance stock units (“PSUs”) and 50% restricted stock units (“RSUs”), but changed the weighting of the PSU performance metrics to 60% AOIM over three, one-year performance periods and 40% relative TSR (“rTSR”) over a three-year performance (from 50% AOIM and 50% rTSR). See “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Annual Incentive” section and “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Long-Term Incentives” section for specific goals. | | FY24 NEO Pay | ✓ The Committee increased base salaries for the NEOs between 4.8% to 7.2%, consistent with market data from our peer group. In addition to the annual merit and market-based increase in November 2023, Mr. Sherman received a larger increase in connection with his promotion in February 2024. ✓ The NEOs were eligible for annual bonuses under the AIP and were granted LTI awards in the form of 50% PSUs and 50% RSUs. • The Committee increased Ms. Paulonis’ AIP target award percentage from 150% to 160%, consistent with market data from our peer group. The Committee increased Mr. Sherman’s AIP target award percentage from 65% to 70% in connection with his promotion in February 2024. ✓ Our FY24 AOI performance was 88.3% performance achieved, H1 Comparable Sales performance was 98.4% performance achieved, and H2 Comparable Sales performance was 100.3% performance achieved. Accordingly, the weighted payout for the financial component of the AIP was 52.6% of target. Our teams remained focused on fueling growth through our core strategic initiatives – enhancing our customer centricity, amplifying innovation, increasing the efficiency of our operations and optimizing our capabilities (including our Fuel for Growth initiative to drive cost savings and allow for reinvestment in SBH’s future), and making progress on sustainability. The work done in FY24 to enhance and implement these growth strategies will continue to build upon our modern and dynamic retail / distribution platform, preparing us for a successful future. Importantly, we remain steadfast in our commitment to enhance value for our customers and shareholders over the long-term. As such, given the successful activation and enhancement of these long-term growth initiatives, as well as BSG’s strong results throughout FY24 and Sally Beauty gaining momentum through the back half of the fiscal year, the Committee determined a 150% payout for performance with respect to our strategic initiatives was appropriate (20% weighting, at target). Overall, after weighting the financial and strategic initiative components of the AIP, the AIP payouts were 82.6% of target. ✓ Following the completion of the performance period on September 30, 2024, the Committee determined that the FY22-24 relative total shareholder return PSUs (“FY22-24 rTSR PSUs”) granted in November 2021 were earned at 77.9% of the target award. ✓ Following the completion of the performance period on September 30, 2024, the Committee determined that the third one-year performance period of the FY22-24 adjusted operating income margin PSUs (“FY22-24 Y3AOIM PSUs”) granted in November 2021 were earned at 74.1% of the target award. ✓ Following the completion of the performance period on September 30, 2024, the Committee determined that the second one-year performance period of the FY23-25 adjusted operating income margin PSUs (“FY23-25 Y2AOIM PSUs”) granted in November 2022 were earned at 74.1% of the target award. The earned FY23-25 Y2AOIM PSUs were banked and will be paid out after completion of all performance periods on November 15, 2025, subject to the executive’s continued employment on such date. ✓ Following the completion of the performance period on September 30, 2024, the Committee determined that the first one-year performance period of the FY24-26 adjusted operating income margin PSUs (“FY24-26 Y1AOIM PSUs”) granted in November 2023 were earned at 74.1% of the target award. The earned FY24-26 Y1AOIM PSUs were banked and will be paid out after completion of all performance periods on November 15, 2026, subject to the executive’s continued employment on such date. |
COMPENSATION PHILOSOPHY AND OBJECTIVES
| Pay for Performance | ✓ Link incentive compensation to performance through objectives that align with shareholder and other stakeholder interests and drive annual and long-term results. ✓ The higher the level in the organization, the greater the link to performance (more at-risk; making leaders more accountable). | | Alignment with Shareholders | ✓ Align executive and long-term shareholder interests by linking pay to achievement of performance objectives viewed as drivers of sustained value creation, delivering a significant portion of pay in equity compensation, and requiring executive officers to accumulate and hold a meaningful amount of SBH stock. | | Drive Annual and Long-Term Results | ✓ Ensure performance objectives are understandable and drive delivery of financial results and successful execution of strategic initiatives. ✓ Ensure performance goals align to our annual and long-term strategies and financial operating plans. | | Pay Competitively | ✓ Ensure pay remains competitive with peer companies in order to attract, motivate and retain associates. ✓ Target the 50th percentile of market for all compensation components, adjusted by various factors such as individual performance, responsibilities, experience, internal equity, and expected future contributions. | | Mitigate Undue Risk | ✓ Use a mix of annual and long-term incentives and financial and strategic metrics. ✓ Use caps for annual incentives and use vesting periods, caps, and restrictive covenants for long-term incentives. ✓ Maintain clawback and equity ownership policies. ✓ Review and approval of annual and long-term incentive performance goals, results and payouts by the Committee. |
FY24 EXECUTIVE COMPENSATION PROGRAM
| Component | Form of Compensation | Purpose | Performance Criteria | | Base Salary | Cash | Providing a competitive level of fixed compensation that attracts and retains skilled management, recognizing their respective roles, responsibilities, and experience. | Reviewed annually for increases. | | AIP | Cash | Communicating and driving achievement of financial and strategic annual objectives that are important to our sustained success and stock value. | Earned based on achievement of AOI, comparable sales, and strategic initiative goals, with potential adjustment based on individual performance. | | LTI 2019 Omnibus Incentive Plan | PSUs | Creating a strong financial incentive for meeting or exceeding long-term financial goals, rewarding performance, recognizing promotions, encouraging an equity stake in the Company, and aligning interests with those of our stockholders. | PSUs are eligible to vest based on achievement of goals related to AOIM over three, one-year periods and rTSR over a three-year period. In addition, realized value of PSUs at vesting is tied to SBH’s stock price. | | | RSUs | Encouraging retention through multi-year vesting requirements. | RSUs vest ratably over a three-year period with continued employment providing a retention incentive. Realized value of RSUs at vesting is tied to SBH’s stock price. |
FY24 EXECUTIVE COMPENSATION PROGRAM
| Component | | Form of Compensation | Purpose | | Other Compensation | Health and Welfare Benefits | Eligibility to receive available health and other welfare benefits paid for, in whole or in part, by the Company, including broad-based medical, dental, life and disability insurance. | Providing a competitive, broad-based employee benefits structure and promoting the good health of our executive officers. | | | Retirement Plan | Eligibility to participate in, and receive Company contributions to, our 401(k) plan (available to all employees). | Providing competitive retirement-planning benefits to attract and retain skilled management. | | | Executive Physical | Reimbursement for an annual physical exam. | Promoting the good health of our executive officers. | | | New Hire Benefits | Limited new hire benefits (including Company-paid COBRA and relocation expenses). | Attracting new talent by providing a smooth transition to our Company. | | Change-in-Control Severance Protection | | Eligibility to receive cash severance (1.99 times base salary and a 5-year average AIP award payout) and post-termination health and welfare benefits (24 months) in connection with involuntary termination within two years after a change in control. | Providing a competitive compensation package for attraction and retention purposes before and after a change in control, as well as ensuring continuity of management in the event of any actual or threatened change in control of our Company. |
TYING COMPENSATION TO PERFORMANCE
TYING COMPENSATION TO PERFORMANCE Our executive compensation program closely links realized compensation to the achievement of financial objectives and changes in SBH’s stock price, with 54% of Ms. Paulonis’ and 46% of our other NEOs’ FY24 target compensation being performance-based and contingent upon the achievement of financial or strategic performance objectives or changes in our stock price. We use five key performance metrics to measure results and determine annual incentive and PSU payouts: Use of these metrics supports the following objectives: Generate sustainable growth. The Committee believes these performance components – incorporated into the Company’s annual budget and long-term planning – represent the metrics that can be used by our stockholders to assess the Company’s value. Using these metrics, together with overlapping performance periods for our PSUs, enables the Committee to evaluate the NEOs’ performance in generating sustainable growth. Balance annual and long-term objectives. The Committee also believes these measures highlight the importance of leading the Company to achieve both annual and long-term financial and strategic goals. These measures also reduce the risk that actions would be taken to sacrifice long-term growth to meet annual targets or vice versa. Accountability for controllable operating performance and long-term growth. The standards for determining performance against objectives established for these metrics are derived from the Company’s financial statements, which follow generally accepted accounting principles. The terms of our AIP and PSUs provide the Committee the ability to adjust results to exclude certain items, either positive or negative, that it considers extraordinary when determining performance against pre-established financial goals. The Committee believes that retaining the ability to make adjustments encourages management’s willingness to take actions that may limit annual Company performance yet support long-term growth.
BASE SALARY
BASE SALARY The Committee determines the base salary of each NEO on an annual basis (unless market conditions or changes in responsibilities warrant a mid-year change) and targets the 50th percentile of our peer group. The Committee uses its judgment to vary executive officer pay based on factors such as an executive officer’s experience, performance and responsibilities, as well as internal parity. In evaluating the NEOs’ performance, the Committee relies primarily on our Chief Executive Officer’s performance review of each executive officer (other than herself). The subjective factors considered by our Chief Executive Officer (“CEO”) primarily consist of whether the executive officer met his or her developmental and operational goals and the financial performance within the executive officer’s area of responsibility. In September 2023, the Committee reviewed market data provided by FW Cook, our independent compensation consultant, on our peer companies and the retail industry generally to determine whether changes to the base salaries for our executive officers were needed for FY24 to align our executive team with the market. The Committee increased base salary levels of the NEOs, with adjustments to reflect executive performance and to move executive salaries closer to the targeted competitive position. The Committee believes that the base salaries paid to our NEOs during FY24, as reflected in the table below, were appropriate to retain and motivate the officers and were competitive with those offered by our peer companies.
ANNUAL INCENTIVE
ANNUAL INCENTIVE Our AIP provides each NEO the opportunity to receive an annual cash incentive payout based on their base salary for the fiscal year, target award percentage and achievement of performance objectives:
ANNUAL INCENTIVE
| FY24 Base SalaryX | Target Award PercentageX | Performance Objectives Payout % | = | Award Payout | | Target Award | | | | |
TARGET AWARD
TARGET AWARD Our Chief Executive Officer made recommendations to the Committee for each NEO’s target award percentage (other than herself), based on job responsibilities and peer group data provided by FW Cook. After reviewing these recommendations, job responsibilities, peer group data, and ensuring an emphasis on performance-based / at-risk pay, the Committee approved the following FY24 target award percentages:
TARGET AWARD
| (2) Ms. Paulonis’ AIP target award percentage was increased 10% (from 150% to 160%), consistent with market data from our peer group. |
TARGET AWARD
| (3) Mr. Sherman’s AIP target award percentage was prorated based on his prior target (65%) and his increased target (70%), in connection with his promotion in February 2024. |
TARGET AWARD
| (2) Mr. Sherman’s AIP target award percentage was prorated based on his prior target (65%) and his increased target (70%), in connection with his promotion in February 2024. |
PERFORMANCE OBJECTIVES
| Payout Scale (1) | AOI (Millions) | Performance Achieved | Payout % | Weighted Payout % | | Maximum | ≥ $385.8 | ≥ 108.3% | 200% | 120% | | Target | $356.2 | 100% | 100% | 60% | | Threshold | $302.8 | 85% | 50% | 30% | | Below Threshold | < $302.8 | < 85% | 0% | 0% |
PERFORMANCE OBJECTIVES
| (1) Payouts between performance levels is determined based on straight-line interpolation. |
PERFORMANCE OBJECTIVES
| Payout Scale (1) | H1 Comparable Sales | Performance Achieved | Payout % | Weighted Payout % | | Maximum | ≥ 2.0% | ≥ 101.5% | 150% | 15% | | Target | 0.5% | 100% | 100% | 10% | | Threshold | -2.0% | 97.5% | 25% | 2.5% | | Below Threshold | < -2.0% | < 97.5% | 0% | 0% |
PERFORMANCE OBJECTIVES
| (1) Payouts between performance levels is determined based on straight-line interpolation. |
PERFORMANCE OBJECTIVES
| Payout Scale (1) | H2 Comparable Sales | Performance Achieved | Payout % | Weighted Payout % | | Maximum | ≥ 3.0% | ≥ 101.5% | 150% | 15% | | Target | 1.5% | 100% | 100% | 10% | | Threshold | -1.0% | 97.5% | 25% | 2.5% | | Below Threshold | < -1.0% | < 97.5% | 0% | 0% |
PERFORMANCE OBJECTIVES
| (1) Payouts between performance levels is determined based on straight-line interpolation. |
PERFORMANCE OBJECTIVES
| Performance Achieved | Payout % | Weighted Payout % | | Exceeds | 101-150% | 21-30% | | Target | 100% | 20% | | Not Fully Achieved | 0-99% | 0-19% |
PAYOUT
PAYOUT Actual results for FY24 were as follows:
PAYOUT
| | | Performance Achieved | Payout % | Weighted Payout % | | Adjusted Operating Income | $314.6M | 88.3% | 61.1% | 36.6% | | H1 Comparable Sales | -1.1% | 98.4% | 51.5% | 5.1% | | H2 Comparable Sales | 1.8% | 100.3% | 108.8% | 10.9% | | Strategic Initiatives | — | Exceeds | 150% | 30% | | Performance Objectives Payout % | | | | 82.6% |
PAYOUT
The Committee determined that the Company over-delivered on our strategic initiatives, each of which is discussed further in the “Compensation Discussion and Analysis – Executive Summary – FY24 Company Strategies” section of this Proxy Statement. Our teams remained focused on fueling growth through our core strategic initiatives – enhancing our customer centricity (with initiatives such as Cosmo Prof Direct, Moroccan Oil brand expansion, our Licensed Colorist on Demand at Sally, and Happy Beauty Co.), growing high margin Own Brands and amplifying innovation (expanding distribution and sales of Amika and Color Wow), increasing the efficiency of our operations and optimizing our capabilities (including our Fuel for Growth initiative to drive cost savings and allow for reinvestment in SBH’s future), and making progress on sustainability. The work done in FY24 to enhance and implement these growth strategies will continue to build upon our modern and dynamic retail / distribution platform, preparing us for a successful future. Importantly, we remain steadfast in our commitment to enhance value for our customers and shareholders over the long-term. As such, given the successful activation and enhancement of these long-term growth initiatives, as well as BSG’s strong results throughout FY24 and Sally Beauty gaining momentum through the back half of the fiscal year, the Committee determined a 150% payout for performance with respect to our strategic initiatives was appropriate for this component of the AIP (20% weighting, at target). The table below shows the target awards under the AIP for the NEOs for FY24 and the award payouts:
PAYOUT
| Name | Target Award (1) | Performance Objectives Payout % | Award Payout (1) | | Denise A. Paulonis | $1,894,156 | 82.6% | $1,564,573 | | Marlo M. Cormier | $493,414 | 82.6% | $407,560 | | John H. Goss | $433,299 | 82.6% | $357,905 | | Mark G. Spinks | $384,246 | 82.6% | $317,388 | | Scott C. Sherman | $330,329 | 82.6% | $272,852 |
PAYOUT
| (1) Target Award and Award Payout are rounded up to the nearest dollar per our plan. |
LONG-TERM INCENTIVES
LONG-TERM INCENTIVES The Committee’s policy is to approve and grant equity awards on the same day. Other than special one-time grants, such as at the time of a new hire or promotion, the Committee intends to grant equity awards to its executive officers once a year, and such grants are generally made at the same time that the Committee approves base salary increases and the AIP target awards for the fiscal year. These actions generally occur within the first quarter of the fiscal year. Our Senior Vice President, Chief Legal and Human Resources Officer provides our Chief Executive Officer with a list of employees eligible for equity awards. Our Chief Executive Officer then makes a grant recommendation to the Committee for each of the proposed grantees, including the NEOs other than herself, based on consideration of the value of the grants that the employee received in prior years, the competitive market data provided to the Committee by FW Cook, and her views as to the employee’s expected future contribution to our business results. The Chair of the Committee recommends to the Committee the Chief Executive Officer’s proposed equity grant based on her review of competitive market data provided by FW Cook and the CEO’s performance. The Committee is ultimately responsible for approving the award grant value and the methodology for converting this value into number of shares. In making equity grants for eligible employees, the Committee considers the recommendations of the Chief Executive Officer and the competitive data provided by FW Cook regarding aggregate share usage and costs associated with equity grants.
FY24 EQUITY AWARDS
FY24 EQUITY AWARDS Consistent with its equity grant policy, the Committee granted RSUs and PSUs in November 1, 2023 to each of our executive officers. For more information regarding the equity awards granted to our NEOs during FY24, please see the “Grants of Plan-Based Awards” table of this Proxy Statement. The intended grant values of the NEOs’ FY24 equity awards are reflected in the following table:
FY24 EQUITY AWARDS
| Name | FY24 Equity Award Grant Value | | Denise A. Paulonis | $5,000,000 | | Marlo M. Cormier | $1,000,000 | | John H. Goss | $900,000 | | Mark G. Spinks | $900,000 | | Scott C. Sherman | $575,000 |
FY24 EQUITY AWARDS
| • | RSUs comprised 50% of the equity award value. RSUs vest ratably over a three-year period, subject to continued employment. |
FY24 EQUITY AWARDS
| • | PSUs comprised 50% of the equity award value. PSUs are eligible to vest based on the following FY24-26 PSU performance objectives (and continued employment): |
FY24 EQUITY AWARDS
| – | 60% AOIM measured over three, one-year performance periods. |
FY24 EQUITY AWARDS
| ◾ | AOIM is defined as Sally Beauty Holdings, Inc.’s adjusted operating income divided by total sales for the AOIM Performance Period. |
FY24 EQUITY AWARDS
| ◾ | AOIM Performance Period means: |
FY24 EQUITY AWARDS
| • | Year 1: Fiscal year of the Company beginning on October 1, 2023 and ending on September 30, 2024 (“Y1AOIM”); |
FY24 EQUITY AWARDS
| • | Year 2: Fiscal year of the Company beginning on October 1, 2024 and ending on September 30, 2025 (“Y2AOIM”); and |
FY24 EQUITY AWARDS
| • | Year 3: Fiscal year of the Company beginning on October 1, 2025 and ending on September 30, 2026 (“Y3AOIM”). |
FY24 EQUITY AWARDS
| ◾ | AOIM Payout Scale – AOIM for the FY24-26 PSUs pays out between 0-200% of target based on the Company’s performance. The payout scale for each tranche is determined at the beginning of each AOIM performance period. See “Determination of FY24-26 Y1AOIM PSUs” for the payout scale of the first, one-year performance period. |
FY24 EQUITY AWARDS
| – | 40% rTSR measured over a three-year performance period. |
FY24 EQUITY AWARDS
| ◾ | TSR means the change in a company’s stock price plus dividends paid to shareholders (assumed to be reinvested) over the rTSR Performance Period, and is measured as follows: |
FY24 EQUITY AWARDS
| TSR = | Ending Stock Price – Beginning Stock Price + Reinvested Dividends | | | Beginning Stock Price |
FY24 EQUITY AWARDS
| – | Beginning and Ending Stock Price Determination: A 30-day trading average at the beginning and ending of the rTSR Performance Period. |
FY24 EQUITY AWARDS
| – | Dividend Reinvestment: Dividends will be determined using the Ex-Dividend date with the sum of all dividends paid throughout the performance period added to the difference between the Ending Stock Price and Beginning Stock Price. |
FY24 EQUITY AWARDS
| • | Sally Beauty Holdings, Inc.’s TSR is measured on a relative basis compared to the rTSR Comparator Companies. |
FY24 EQUITY AWARDS
| • | If Sally Beauty Holdings, Inc.’s absolute TSR (as measured for the FY24-26 PSU grants) is negative, then the payout or rTSR PSUs will be capped at 100%. |
FY24 EQUITY AWARDS
| ◾ | rTSR Performance Period means fiscal years of the Company beginning on October 1, 2023 and ending on September 30, 2026. |
FY24 EQUITY AWARDS
| ◾ | rTSR Comparator Companies are the companies comprising the S&P Composite 1500 Specialty Stores Index. |
FY24 EQUITY AWARDS
| • | The S&P Composite 1500 Specialty Stores Index companies are locked in as of the grant date and remain the same throughout the rTSR Performance Period even if the Index composition changes. |
FY24 EQUITY AWARDS
| • | Award treatment if the following situations occur during the rTSR Performance Period: |
FY24 EQUITY AWARDS
| | Situation | Plan Treatment | | Adjustments | Stock splits and recapitalizations | Opening share price adjusted for recapitalizations | | | rTSR Comparator Company bankruptcy / delisting / liquidation | Company not removed from rTSR Comparator Companies; Company considered to be at the bottom of the rTSR Comparator Companies | | | rTSR Comparator Company acquired or taken private | Company removed from the rTSR Comparator Companies from the beginning of the performance period | | | rTSR Comparator Company announcement of being acquired but not yet closed | | | No Adjustments | Stock buybacks or issuance | No special adjustments made | | | Significant acquisition or divestiture | Acquisition or divestiture would impact the company’s TSR, so no adjustment needed | | | rTSR Comparator Company financial restatements which occur after the performance period ends | No adjustments made; Captured in the next annual grant cycle as reflected in stock price |
FY24 EQUITY AWARDS
| ◾ | rTSR Payout Scale – rTSR pays out between 0-200% of target based on Sally Beauty Holdings, Inc.’s percentile rank: |
FY24 EQUITY AWARDS
| Payout Scale (1)(2) | Percentile Rank Achieved | Payout % | | Maximum | ≥ 85th %ile | 200% | | Target | 55th %ile | 100% | | Threshold | 25th %ile | 50% | | Below Threshold | < 25th %ile | 0% |
FY24 EQUITY AWARDS
| (1) Payouts between performance levels will be determined on a straight-line interpolation. |
FY24 EQUITY AWARDS
| (2) If Sally Beauty Holdings, Inc.’s absolute TSR (as measured for the FY24-26 rTSR PSUs) is negative, then the payout will be capped at 100%. |
FY24 EQUITY AWARDS
Any FY24-26 PSUs earned are banked and paid out after the completion of all performance periods on November 15, 2026, subject to the executive’s continued employment.
DETERMINATION OF FY22-24 RTSR PSUS
DETERMINATION OF FY22-24 RTSR PSUS Following the completion of the performance period on September 30, 2024, the Committee determined that the FY22-24 rTSR PSUs granted in November 2021 were earned at 77.9% of the target award:
DETERMINATION OF FY22-24 RTSR PSUS
| Payout Scale (1)(2) | Percentile Rank Achieved | Payout % | | Maximum | ≥ 85th %ile | 200% | | Target | 55th %ile | 100% | | Threshold | 25th %ile | 25% | | Below Threshold | < 25th %ile | 0% | | Performance Achieved & Payout % | 46.2th %ile | 77.9% |
DETERMINATION OF FY22-24 RTSR PSUS
| (1) Payouts between performance levels were determined based on straight-line interpolation. |
DETERMINATION OF FY22-24 RTSR PSUS
| (2) If Sally Beauty Holdings, Inc.’s absolute TSR (as measured for the FY22-24 rTSR PSUs) is negative, then the payout will be capped at 100%. |
DETERMINATION OF FY22-24 RTSR PSUS
The earned FY22-24 rTSR PSUs were banked and paid out after completion of all performance periods on November 15, 2024, subject to the executive’s continued employment on such date.
DETERMINATION OF FY22-24 Y3AOIM PSUS
DETERMINATION OF FY22-24 Y3AOIM PSUS Following the completion of the performance period on September 30, 2024, the Committee determined that the FY22-24 Y3AOIM PSUs granted in November 2021 were earned at 74.1% of the target award:
DETERMINATION OF FY22-24 Y3AOIM PSUS
| Payout Scale (1) | Y3AOIM | Performance Achieved | Payout % | | Maximum | ≥ 10.2% | ≥ 100.7% | 200% | | Target | 9.5% | 100% | 100% | | Threshold | 7.5% | 98% | 50% | | Below Threshold | < 7.5% | < 98% | 0% | | Performance Achieved & Payout % | 8.5% | 99.0% | 74.1% |
DETERMINATION OF FY22-24 Y3AOIM PSUS
| (1) Payouts between performance levels were determined based on straight-line interpolation. |
DETERMINATION OF FY22-24 Y3AOIM PSUS
The earned FY22-24 Y3AOIM PSUs were banked and paid out after completion of all performance periods on November 15, 2024, subject to the executive’s continued employment on such date. With the completion of the performance periods for the FY22-24 rTSR PSUs and the FY22-24 Y3AOIM PSUs, all performance periods for the FY22-24 PSUs have now concluded and the total weighted payout for this grant was 65.1% of target:
DETERMINATION OF FY22-24 Y3AOIM PSUS
| Grant | Metrics and Weighting | Performance Period(s) | FY22 | FY23 | FY24 | | FY22-24 | | | | | | | | 50% rTSR | 3-Year | rTSR 77.9% Payout | | | | | 50% AOIM | 3, 1-Year | Y1AOIM 0% Payout | Y2AOIM 82.9% Payout | Y3AOIM 74.1% Payout |
DETERMINATION OF FY22-24 Y3AOIM PSUS
All earned and banked PSUs paid out on November 15, 2024, subject to the executive’s continued employment on such date.
DETERMINATION OF FY23-25 Y2AOIM PSUS
DETERMINATION OF FY23-25 Y2AOIM PSUS Following the completion of the performance period on September 30, 2024, the Committee determined that the FY23-25 Y2AOIM PSUs granted in November 2022 were earned at 74.1% of the target award:
DETERMINATION OF FY23-25 Y2AOIM PSUS
| Payout Scale (1) | Y2AOIM | Performance Achieved | Payout % | | Maximum | ≥ 10.2% | ≥ 100.7% | 150% | | Target | 9.5% | 100% | 100% | | Threshold | 7.5% | 98% | 50% | | Below Threshold | < 7.5% | < 98% | 0% | | Performance Achieved & Payout % | 8.5% | 99.0% | 74.1% |
DETERMINATION OF FY23-25 Y2AOIM PSUS
| (1) Payouts between performance levels were determined based on straight-line interpolation. |
DETERMINATION OF FY23-25 Y2AOIM PSUS
The earned FY23-25 Y2AOIM PSUs were banked and will be paid out after completion of all performance periods on November 15, 2025, subject to the executive’s continued employment on such date.
DETERMINATION OF FY24-26 Y1AOIM PSUS
DETERMINATION OF FY24-26 Y1AOIM PSUS Following the completion of the performance period on September 30, 2024, the Committee determined that the FY24-26 Y1AOIM PSUs granted in November 2023 were earned at 74.1% of the target award:
DETERMINATION OF FY24-26 Y1AOIM PSUS
| Payout Scale (1) | Y1AOIM | Performance Achieved | Payout % | | Maximum | ≥ 10.2% | ≥ 100.7% | 200% | | Target | 9.5% | 100% | 100% | | Threshold | 7.5% | 98% | 50% | | Below Threshold | < 7.5% | < 98% | 0% | | Performance Achieved & Payout % | 8.5% | 99.0% | 74.1% |
DETERMINATION OF FY24-26 Y1AOIM PSUS
| (1) Payouts between performance levels were determined based on straight-line interpolation. |
DETERMINATION OF FY24-26 Y1AOIM PSUS
The earned FY24-26 Y1AOIM PSUs were banked and will be paid out after completion of all performance periods on November 15, 2026, subject to the executive’s continued employment on such date.
CHANGE-IN-CONTROL SEVERANCE PROTECTION
CHANGE-IN-CONTROL SEVERANCE PROTECTION Many change-in-control transactions result in significant organizational changes, particularly at the senior executive level. To encourage our senior executive officers to remain employed with the Company during an important time when their prospects for continued employment can be uncertain, we are parties to change-in-control severance agreements with each of our NEOs, which provide payments and benefits in the event of the executive’s termination of employment by the Company without cause or by the executive for “good reason” within two years following a change in control. Because a termination by the executive for good reason is effectively a “constructive termination” by the Company without cause, we believe it is appropriate to provide severance benefits in these circumstances. The Committee has determined that our change-in-control agreements are generally consistent with those in place at similarly-situated public companies, are designed to keep our executive officers focused on their work responsibilities during the uncertainty that accompanies a potential change-in-control and are necessary to retain and recruit our executive officers. The Committee also deemed it important from a retention perspective to treat all of the NEOs similarly with respect to their change-in-control arrangements. Under the terms of our 2010 and 2019 Omnibus Incentive Plans, and as proposed under our 2025 Omnibus Incentive Plan, stock options, PSUs and RSUs have “double trigger” change-in-control vesting if the awards are assumed by the surviving company and equitably converted to awards for publicly traded stock in connection with such transaction. This means that the awards would vest upon the holder’s involuntary separation from service within two years following the change in control, or such other period specified by the Committee. If the awards are not assumed by the surviving company and equitably converted, they would vest upon the change in control. In either case, PSUs for which the performance period has not commenced will be forfeited.
ROLE OF INDEPENDENT COMPENSATION CONSULTANT
ROLE OF INDEPENDENT COMPENSATION CONSULTANT The Committee retained the services of an independent consultant, FW Cook, to assist in its annual review of our executive compensation program and biennial review of our non-employee director compensation program. As part of this engagement, FW Cook assisted the Committee in the design of our current programs and continues to advise the Committee on our programs. The Committee has directly engaged FW Cook to assist with these same services for FY24, based on FW Cook’s experience, expertise and knowledge of the Company’s programs. FW Cook does not provide any services to our management, and does not provide any service to us, other than with respect to its role as the Committee’s executive compensation consultant. The Committee determined that FW Cook is independent and the work FW Cook performed on behalf of the Committee did not raise any conflicts of interest in FY24. In making this assessment, the Committee considered the independence factors enumerated in Rule 10C-1(b) under the Securities Exchange Act of 1934 and the NYSE listing standards, including the fact that FW Cook does not provide any other services to the Company, the level of fees received from the Company as a percentage of FW Cook’s total revenue, policies and procedures employed by FW Cook to prevent conflicts of interest, and whether the individual FW Cook advisers to the Committee own any stock of the Company or have any business or personal relationships with members of the Committee or our executive officers.
MARKET DATA/BENCHMARKING
MARKET DATA/BENCHMARKING FW Cook assisted the Committee in benchmarking our compensation arrangements and aggregate equity compensation practices against public companies similar in size and scope to our company. FW Cook obtained proxy data from the peer companies described below, as well as comparative compensation surveys of retail companies. The following 15 specialty retail companies comprised our peer group for FY24 and was used to set FY24 compensation for our NEOs, which we refer to as our “peer companies” or “peer group”:
MARKET DATA/BENCHMARKING
| Abercrombie & Fitch | Genesco | Signet Jewelers | | American Eagle Outfitters | Guess? | Ulta Beauty | | Caleres | Hibbett Sports | Urban Outfitters | | Carter’s | Kontoor Brands | Williams-Sonoma | | Foot Locker | Petco Health & Wellness | Wolverine World Wide |
MARKET DATA/BENCHMARKING
The Committee selected the companies in the peer group, after reviewing data on retail companies (including financial metrics, line-of-business, stock performance and employee count for each respective company) and considering several criteria, including the comparability of specialty retailers and the volatility and maturity of potential peers. At the time of approval, in terms of size, our revenues were near the median and our market capitalization was between the 25th percentile and median of these peer companies. The peer group differs from our peer group for FY23 as described below:
MARKET DATA/BENCHMARKING
| • | The Committee approved the removal of Party City as it was no longer listed on a major exchange. |
TOTAL COMPENSATION REVIEW
| • | compensation (base salary, bonus, types and amounts of long-term incentives), perquisites, and benefits for the last two fiscal years; |
TOTAL COMPENSATION REVIEW
| • | outstanding long-term incentive awards and benefits as of the end of the most recently completed fiscal year; and |
TOTAL COMPENSATION REVIEW
| • | potential payments upon termination as of the end of the most recently completed fiscal year. |
MANAGEMENT OF COMPENSATION-RELATED RISK
| • | Diversification of incentive-related risk by employing complementary performance measures linked to growth, profitability and shareholder returns; |
MANAGEMENT OF COMPENSATION-RELATED RISK
| • | A balanced weighting of the various performance measures, to avoid excessive attention on achievement of one measure over another; |
MANAGEMENT OF COMPENSATION-RELATED RISK
| • | Standardized equity grant procedures; and |
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table contains compensation information for our NEOs. The information included in this table reflects compensation earned by the NEOs for services rendered to us for the fiscal years ended September 30, 2024, September 30, 2023, and September 30, 2022.
SUMMARY COMPENSATION TABLE
| Name and Principal Position (1) | Fiscal Year | Salary ($) | Bonus ($)(2) | Stock Awards ($)(3)(4) | Option Awards ($)(5) | Non-Equity Incentive Plan Compensation ($)(6) | All Other Compensation ($)(7) | Total ($) | | Denise A. Paulonis | 2024 | 1,183,846 | — | 4,775,838 | — | 1,564,573 | 14,640 | 7,538,897 | | President and Chief Executive Officer | 2023 | 1,129,231 | — | 4,701,885 | — | 1,377,935 | 21,884 | 7,230,935 | | | 2022 | 1,083,077 | 400,000 | 5,357,400 | 999,999 | 330,000 | 192,678 | 8,363,154 | | Marlo M. Cormier | 2024 | 657,885 | — | 953,125 | — | 407,560 | 14,308 | 2,032,878 | | Senior Vice President, Chief Financial Officer | 2023 | 618,269 | — | 964,884 | — | 377,251 | 17,539 | 1,977,943 | | | 2022 | 586,538 | — | 768,259 | — | 82,216 | 22,245 | 1,459,258 | | John H. Goss | 2024 | 577,731 | — | 846,771 | — | 357,905 | 14,622 | 1,797,029 | | President, Sally Beauty Supply | 2023 | 549,115 | — | 760,339 | — | 335,169 | 17,870 | 1,662,493 | | | 2022 | 507,231 | — | 578,453 | — | 71,146 | 16,546 | 1,173,376 | | Mark G. Spinks | 2024 | 512,327 | — | 846,771 | — | 317,388 | 14,877 | 1,691,363 | | President, Beauty Systems Group | 2023 | 487,058 | — | 769,440 | — | 297,156 | 22,450 | 1,576,104 | | | 2022 | 470,692 | — | 589,050 | — | 65,929 | 21,128 | 1,146,799 | | Scott C. Sherman | 2024 | 483,642 | — | 551,372 | — | 272,852 | 15,380 | 1,323,246 | | Senior Vice President, Chief Legal and Human Resources Officer | | | | | | | | |
SUMMARY COMPENSATION TABLE
| (1) Reflects principal positions held as of September 30, 2024. |
SUMMARY COMPENSATION TABLE
| (2) Reflects a cash sign-on bonus intended to compensate Ms. Paulonis for amounts forfeited upon termination from her prior employer (50% of which was subject to repayment if Ms. Paulonis resigned or if the Company terminated her employment for cause within her first year of employment with the Company). |
SUMMARY COMPENSATION TABLE
| (3) Reflects the grant date fair value of the stock awards (RSUs and PSUs), determined in accordance with ASC 718. The PSUs granted: |
SUMMARY COMPENSATION TABLE
| (a) In FY24 are comprised of PSUs with one, three-year performance period with goals related to rTSR (referred to herein as the FY24-26 rTSR PSUs) and PSUs with three, one-year performance periods with goals related to AOIM (referred to herein as the FY24-26 Y1AOIM PSUs, FY24-26 Y2AOIM PSUs and FY24-26 Y3AOIM PSUs), in each case with the number of shares earned paid out at the end of the three-year performance period on November 15, 2026. The AOIM goals for the FY24-26 Y2AOIM PSUs and FY24-26 Y3AOIM PSUs were not established on the date of grant and, as a result, for accounting purposes, are not considered granted until the respective performance goals are established. Accordingly, the grant date fair value of the FY24-26 rTSR PSUs and FY24-26 Y1AOIM PSUs are reported in the Stock Awards column for 2024, but the grant date fair value of the FY24-26 Y2AOIM PSUs and FY24-26 Y3AOIM PSUs will not be reported in the Stock Awards column until 2025 and 2026, respectively. |
SUMMARY COMPENSATION TABLE
| (b) In FY23 are comprised of PSUs with one, three-year performance period with goals related to rTSR (referred to herein as the FY23-25 rTSR PSUs) and PSUs with three, one-year performance periods with goals related to AOIM (referred to herein as the FY23-25 Y1AOIM PSUs, FY23-25 Y2AOIM PSUs and FY23-25 Y3AOIM PSUs), in each case with the number of shares earned paid out at the end of the three-year performance period on November 15, 2025. The AOIM goals for the FY23-25 Y2AOIM PSUs and FY23-25 Y3AOIM PSUs were not established on the date of grant and, as a result, for accounting purposes, are not considered granted until the respective performance goals are established. Accordingly, the |
SUMMARY COMPENSATION TABLE
| grant date fair value of the FY23-25 rTSR PSUs and FY23-25 Y1AOIM PSUs were reported in the Stock Awards column for 2023, and the grant date fair value of the FY23-25 Y2AOIM PSUs are reported in the Stock Awards column for 2024. The grant date fair value of the FY23-25 Y3AOIM PSUs will not be reported in the Stock Awards column until 2025. |
SUMMARY COMPENSATION TABLE
| (c) In FY22 are comprised of PSUs with one, three-year performance period with goals related to rTSR (referred to herein as the FY22-24 rTSR PSUs) and PSUs with three, one-year performance periods with goals related to AOI (referred to herein as the FY22-24 Y1AOIM PSUs, FY22-24 Y2AOIM PSUs and FY22-24 Y3AOIM PSUs), in each case with the number of shares earned paid out at the end of the three-year performance period on November 15, 2024. The AOIM goals for the FY22-24 Y2AOIM PSUs and FY22-24 Y3AOIM PSUs were not established on the date of grant and, as a result, for accounting purposes, are not considered granted until the respective performance goals are established. Accordingly, the grant date fair value of the FY22-24 rTSR PSUs and FY22-24 Y1AOIM PSUs were reported in the Stock Awards column for 2022, the grant date fair value of the FY22-24 Y2AOIM PSUs were reported in the Stock Awards column for 2023, and the grant date fair value of the FY22-24 Y3AOIM PSUs are reported in the Stock Awards column for 2024. |
SUMMARY COMPENSATION TABLE
| (4) The fair value of the FY24 RSUs is calculated using the closing price for shares of our Common Stock on the date of grant (November 1, 2023). The fair value of the FY24-26 Y1AOIM PSUs, FY23-25 Y2AOIM PSUs and FY22-24 Y3AOIM PSUs is calculated using the closing price for shares of our Common Stock on the date the Committee approved the performance objectives of the awards (November 1, 2023). The fair value of the FY24-26 rTSR PSUs is based on the Monte Carlo valuation as of the grant date (November 1, 2023). The assumptions used in the Monte Carlo valuation of the FY24-26 rTSR PSUs are included in Note 6 to our audited financial statements for the fiscal year ended September 30, 2024, included in our Form 10-K filed with the SEC on November 14, 2024. For PSUs, the grant date fair value is calculated using the target number of PSUs awarded to each NEO, which was the assumed probable outcome as of the grant date. Assuming, instead, that the highest level of performance conditions would be achieved, the grant date fair values would have been as follows: |
SUMMARY COMPENSATION TABLE
| Name | FY24 PSUs ($)(a) | FY23 PSUs ($)(b) | FY22 PSUs ($)(c) | | Denise A. Paulonis | 4,412,119 | 4,408,517 | 3,564,846 | | Marlo M. Cormier | 878,355 | 930,745 | 736,536 | | John H. Goss | 771,522 | 731,964 | 556,920 | | Mark G. Spinks | 771,522 | 750,167 | 578,114 | | Scott C. Sherman | 510,855 | — | — |
SUMMARY COMPENSATION TABLE
| (a) Includes the FY24-26 rTSR PSUs, FY24-26 Y1AOIM PSUs, FY23-25 Y2AOIM PSUs, and FY22-24 Y3AOIM PSUs. |
SUMMARY COMPENSATION TABLE
| (b) Includes the FY23-25 rTSR PSUs, FY23-25 Y1AOIM PSUs, FY22-24 Y2AOIM PSUs, and FY21-23 Y3AOI PSUs. |
SUMMARY COMPENSATION TABLE
| (c) Includes the FY22-24 rTSR PSUs, FY22-24 Y1AOIM PSUs, and FY21-23 Y2AOI PSUs. |
SUMMARY COMPENSATION TABLE
| (5) Reflects the grant date fair value of the option awards, determined in accordance with ASC 718. The assumptions used in the calculation of the grant date fair values of the stock option awards are included in Note 6 to our audited financial statements for the fiscal years ended September 30, 2024, September 30, 2023, and September 30, 2022, included in our Form 10-K filed with the SEC on November 14, 2024, November 16, 2023, and November 17, 2022, respectively. |
SUMMARY COMPENSATION TABLE
| (6) The amounts reported reflect AIP awards earned for the respective fiscal year. For information regarding the AIP, please see “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Annual Incentive” of this Proxy Statement. |
SUMMARY COMPENSATION TABLE
| (7) Amounts reported as “All Other Compensation” for FY24 include the following: |
SUMMARY COMPENSATION TABLE
| Name | Company Matching Contributions to 401(k) ($) | Life Insurance Premiums ($) | Total ($) | | Denise A. Paulonis | 13,800 | 840 | 14,640 | | Marlo M. Cormier | 13,048 | 1,260 | 14,308 | | John H. Goss | 13,782 | 840 | 14,622 | | Mark G. Spinks | 13,800 | 1,077 | 14,877 | | Scott C. Sherman | 14,358 | 1,022 | 15,380 |
GRANTS OF PLAN-BASED AWARDS FOR FY24
GRANTS OF PLAN-BASED AWARDS FOR FY24 The following table contains information regarding plan-based awards provided during FY24 to the NEOs:
GRANTS OF PLAN-BASED AWARDS FOR FY24
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (2) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards (3) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | Grant Date Fair Value of Stock Awards ($)(5) | | Name | Grant Date (1) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Denise A. Paulonis | | | | | | | | | | | AIP | | 828,693 | 1,894,156 | 3,409,481 | | | | | | | RSUs | 11/01/23 | | | | | | | 294,464 | 2,499,999 | | FY24-26 rTSR PSUs | 11/01/23 | | | | 58,893 | 117,786 | 235,572 | | 1,323,915 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | 29,446 | 58,892 | 117,784 | | 499,993 | | FY23-25 Y2AOIM PSUs | 11/01/23 | | | | 16,438 | 32,876 | 49,314 | | 279,117 | | FY22-24 Y3AOIM PSUs | 11/01/23 | | | | 10,178 | 20,355 | 40,710 | | 172,814 | | Marlo M. Cormier | | | | | | | | | | | AIP | | 215,869 | 493,414 | 888,145 | | | | | | | RSUs | 11/01/23 | | | | | | | 58,892 | 499,993 | | FY24-26 rTSR PSUs | 11/01/23 | | | | 11,779 | 23,557 | 47,114 | | 264,781 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | 5,889 | 11,778 | 23,556 | | 99,995 | | FY23-25 Y2AOIM PSUs | 11/01/23 | | | | 3,288 | 6,575 | 9,863 | | 55,822 | | FY22-24 Y3AOIM PSUs | 11/01/23 | | | | 1,916 | 3,832 | 7,664 | | 32,534 | | John H. Goss | | | | | | | | | | | AIP | | 189,568 | 433,299 | 779,938 | | | | | | | RSUs | 11/01/23 | | | | | | | 53,003 | 449,995 | | FY24-26 rTSR PSUs | 11/01/23 | | | | 10,601 | 21,202 | 42,404 | | 238,310 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | 5,300 | 10,600 | 21,200 | | 89,994 | | FY23-25 Y2AOIM PSUs | 11/01/23 | | | | 2,596 | 5,191 | 7,787 | | 44,072 | | FY22-24 Y3AOIM PSUs | 11/01/23 | | | | 1,437 | 2,874 | 5,748 | | 24,400 | | Mark G. Spinks | | | | | | | | | | | AIP | | 168,108 | 384,246 | 691,643 | | | | | | | RSUs | 11/01/23 | | | | | | | 53,003 | 449,995 | | FY24-26 rTSR PSUs | 11/01/23 | | | | 10,601 | 21,202 | 42,404 | | 238,310 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | 5,300 | 10,600 | 21,200 | | 89,994 | | FY23-25 Y2AOIM PSUs | 11/01/23 | | | | 2,596 | 5,191 | 7,787 | | 44,072 | | FY22-24 Y3AOIM PSUs | 11/01/23 | | | | 1,437 | 2,874 | 5,748 | | 24,400 | | Scott C. Sherman | | | | | | | | | | | AIP | | 144,519 | 330,329 | 594,592 | | | | | | | RSUs | 11/01/23 | | | | | | | 33,863 | 287,497 | | FY24-26 rTSR PSUs | 11/01/23 | | | | 6,773 | 13,546 | 27,092 | | 152,257 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | 3,386 | 6,772 | 13,544 | | 57,494 | | FY23-25 Y2AOIM PSUs | 11/01/23 | | | | 1,990 | 3,980 | 5,970 | | 33,790 | | FY22-24 Y3AOIM PSUs | 11/01/23 | | | | 1,198 | 2,395 | 4,790 | | 20,334 |
GRANTS OF PLAN-BASED AWARDS FOR FY24
| (1) As described in footnotes 2 and 3 in the “Summary Compensation Table” of this Proxy Statement, the FY22-24 Y3AOIM PSUs were granted during FY22 (grant date of November 3, 2021), the FY23-25 Y2AOIM PSUs were granted during FY23 (grant date of November 2, 2022) and the FY24-26 Y1AOIM PSUs were granted during FY24 (grant date of November 1, 2023), but the Committee established the applicable performance objectives for such awards during FY24 (on November 1, 2023). Equity award grant values are converted into RSUs and target PSUs using the closing stock price on the date of grant. |
GRANTS OF PLAN-BASED AWARDS FOR FY24
| (2) Reflects potential cash award payouts under the AIP. Thresholds are based on financial measures only (no threshold for Strategic Initiatives). See “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Annual Incentive” of this Proxy Statement for more details. FY24 AIP payouts are shown in the “Summary Compensation Table” of this Proxy Statement under “Non-Equity Incentive Plan Compensation”. |
GRANTS OF PLAN-BASED AWARDS FOR FY24
| (3) Reflects potential payouts of the PSUs described in footnote (1), in each case under the 2019 Omnibus Incentive Plan. See “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Long-Term Incentives” and footnotes 2 and 3 in the “Summary Compensation Table” of this Proxy Statement for more details. |
GRANTS OF PLAN-BASED AWARDS FOR FY24
| (4) Reflects RSUs granted in FY24, in each case under the 2019 Omnibus Plan. The restrictions upon these awards lapse ratably over three years. See “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Long-Term Incentives” of this Proxy Statement for more details. |
GRANTS OF PLAN-BASED AWARDS FOR FY24
| (5) Reflects a grant date fair value of $8.49 per RSU (granted on November 1, 2023), $11.24 per rTSR PSU (granted on November 1, 2023), $8.49 per Y1AOIM PSU (granted on November 1, 2023 – performance objectives established on November 1, 2023), $8.49 per Y2AOIM PSU (granted on November 2, 2022 – performance objectives established on November 1, 2023)) and $8.49 per Y3AOIM PSU (granted on November 3, 2021 – performance objectives established on November 1, 2023). |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END The following table contains information about outstanding stock option and stock awards held by the NEOs on September 30, 2024:
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#)(1) | Option Exercise Price ($) | Option Expiration Date | Number of Units of Stock That Have Not Vested (#)(2) | Market Value of Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Units That Have Not Vested ($)(4) | | Denise A. Paulonis | | | | | | | | | | | RSUs | 11/01/23 | | | | | 294,464 | 3,995,876 | | | | FY24-26 rTSR PSUs | 11/01/23 | | | | | | | 117,786 | 1,598,356 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | | 43,639 | 592,181 | | | | RSUs | 11/02/22 | | | | | 131,507 | 1,784,550 | | | | FY23-25 rTSR PSUs | 11/02/22 | | | | | | | 98,629 | 1,338,396 | | FY23-25 Y1AOIM PSUs | 11/02/22 | | | | | 27,255 | 369,850 | | | | FY23-25 Y2AOIM PSUs | 11/02/22 | | | | | 24,362 | 330,592 | | | | RSUs | 11/03/21 | | | | | 40,709 | 552,421 | | | | FY22-24 rTSR PSUs | 11/03/21 | | | | | 47,569 | 645,511 | | | | FY22-24 Y2AOIM PSUs | 11/03/21 | | | | | 16,874 | 228,980 | | | | FY22-24 Y3AOIM PSUs | 11/03/21 | | | | | 15,084 | 204,690 | | | | Options & RSUs | 10/01/21 | 83,562 | 41,781 | 17.09 | 10/01/31 | 28,282 | 383,787 | | | | Marlo M. Cormier | | | | | | | | | | | RSUs | 11/01/23 | | | | | 58,892 | 799,164 | | | | FY24-26 rTSR PSUs | 11/01/23 | | | | | | | 23,557 | 319,668 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | | 8,728 | 118,439 | | | | RSUs | 11/02/22 | | | | | 26,301 | 356,905 | | | | FY23-25 rTSR PSUs | 11/02/22 | | | | | | | 19,725 | 267,668 | | FY23-25 Y1AOIM PSUs | 11/02/22 | | | | | 5,451 | 73,970 | | | | FY23-25 Y2AOIM PSUs | 11/02/22 | | | | | 4,873 | 66,127 | | | | RSUs | 11/03/21 | | | | | 7,663 | 103,987 | | | | FY22-24 rTSR PSUs | 11/03/21 | | | | | 8,954 | 121,506 | | | | FY22-24 Y2AOIM PSUs | 11/03/21 | | | | | 3,176 | 43,098 | | | | FY22-24 Y3AOIM PSUs | 11/03/21 | | | | | 2,840 | 38,539 | | | | Options | 11/23/20 | 11,747 | — | 11.78 | 11/23/30 | | | | | | Options | 11/04/20 | 31,024 | — | 9.09 | 11/04/30 | | | | | | John H. Goss | | | | | | | | | | | RSUs | 11/01/23 | | | | | 53,003 | 719,251 | | | | FY24-26 rTSR PSUs | 11/01/23 | | | | | | | 21,202 | 287,711 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | | 7,855 | 106,592 | | | | RSUs | 11/02/22 | | | | | 20,765 | 281,781 | | | | FY23-25 rTSR PSUs | 11/02/22 | | | | | | | 15,573 | 211,326 | | FY23-25 Y1AOIM PSUs | 11/02/22 | | | | | 4,304 | 58,405 | | | | FY23-25 Y2AOIM PSUs | 11/02/22 | | | | | 3,847 | 52,204 | | | | RSUs | 11/03/21 | | | | | 5,747 | 77,987 | | | | FY22-24 rTSR PSUs | 11/03/21 | | | | | 6,715 | 91,123 | | | | FY22-24 Y2AOIM PSUs | 11/03/21 | | | | | 2,382 | 32,324 | | | | FY22-24 Y3AOIM PSUs | 11/03/21 | | | | | 2,130 | 28,904 | | | | Options | 11/23/20 | 7,608 | — | 11.78 | 11/23/30 | | | | | | Options | 11/04/20 | 15,364 | — | 9.09 | 11/04/30 | | | | | | Options | 11/05/19 | 5,002 | — | 16.65 | 11/05/29 | | | | | | Options | 11/01/18 | 14,505 | — | 18.14 | 11/01/28 | | | | | | Options | 11/01/17 | 17,516 | — | 17.42 | 11/01/27 | | | | | | Options | 11/01/16 | 26,345 | — | 25.53 | 11/01/26 | | | | |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#)(1) | Option Exercise Price ($) | Option Expiration Date | Number of Units of Stock That Have Not Vested (#)(2) | Market Value of Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Units That Have Not Vested ($)(4) | | Mark G. Spinks | | | | | | | | | | | RSUs | 11/01/23 | | | | | 53,003 | 719,251 | | | | FY24-26 rTSR PSUs | 11/01/23 | | | | | | | 21,202 | 287,711 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | | 7,855 | 106,592 | | | | RSUs | 11/02/22 | | | | | 20,765 | 281,781 | | | | FY23-25 rTSR PSUs | 11/02/22 | | | | | | | 15,573 | 211,326 | | FY23-25 Y1AOIM PSUs | 11/02/22 | | | | | 4,304 | 58,405 | | | | FY23-25 Y2AOIM PSUs | 11/02/22 | | | | | 3,847 | 52,204 | | | | RSUs | 11/03/21 | | | | | 5,747 | 77,987 | | | | FY22-24 rTSR PSUs | 11/03/21 | | | | | 6,715 | 91,123 | | | | FY22-24 Y2AOIM PSUs | 11/03/21 | | | | | 2,382 | 32,324 | | | | FY22-24 Y3AOIM PSUs | 11/03/21 | | | | | 2,130 | 28,904 | | | | Options | 11/04/20 | 17,728 | — | 9.09 | 11/04/30 | | | | | | Options | 11/05/19 | 36,013 | — | 16.65 | 11/05/29 | | | | | | Options | 11/01/18 | 34,812 | — | 18.14 | 11/01/28 | | | | | | Options | 11/01/17 | 42,040 | — | 17.42 | 11/01/27 | | | | | | Options | 11/01/16 | 57,959 | — | 25.53 | 11/01/26 | | | | | | Options | 10/28/15 | 53,151 | — | 23.45 | 10/28/25 | | | | | | Options | 10/29/14 | 34,204 | — | 29.20 | 10/29/24 | | | | | | Scott C. Sherman | | | | | | | | | | | RSUs | 11/01/23 | | | | | 33,863 | 459,521 | | | | FY24-26 rTSR PSUs | 11/01/23 | | | | | | | 13,546 | 183,819 | | FY24-26 Y1AOIM PSUs | 11/01/23 | | | | | 5,019 | 68,108 | | | | RSUs | 11/02/22 | | | | | 15,919 | 216,021 | | | | FY23-25 rTSR PSUs | 11/02/22 | | | | | | | 11,939 | 162,012 | | FY23-25 Y1AOIM PSUs | 11/02/22 | | | | | 3,299 | 44,767 | | | | FY23-25 Y2AOIM PSUs | 11/02/22 | | | | | 2,950 | 40,032 | | | | RSUs | 11/03/21 | | | | | 4,789 | 64,987 | | | | FY22-24 rTSR PSUs | 11/03/21 | | | | | 5,596 | 75,938 | | | | FY22-24 Y2AOIM PSUs | 11/03/21 | | | | | 1,985 | 26,936 | | | | FY22-24 Y3AOIM PSUs | 11/03/21 | | | | | 1,775 | 24,087 | | | | Options | 11/04/20 | 39,888 | — | 9.09 | 11/04/30 | | | | | | Options | 11/05/19 | 27,010 | — | 16.65 | 11/05/29 | | | | | | Options | 11/01/18 | 26,109 | — | 18.14 | 11/01/28 | | | | | | Options | 11/01/17 | 28,026 | — | 17.42 | 11/01/27 | | | | | | Options | 11/01/16 | 14,753 | — | 25.53 | 11/01/26 | | | | | | Options | 10/28/15 | 13,287 | — | 23.45 | 10/28/25 | | | | | | Options | 10/29/14 | 6,840 | — | 29.20 | 10/29/24 | | | | |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (1) The unvested option awards vest as follows: |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | Grant Date | Vest Date | | | Name | | 10/01/24 | Total | | Denise A. Paulonis | | | | | Options | 10/01/21 | 41,781 | 41,781 |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (2) The unvested time-based stock awards (including RSUs and earned and banked PSUs) vest as follows: |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | Grant Date | Vest Date | | | | | | Name | | 10/01/24 | 11/15/24 | 11/15/25 | 11/15/26 | Total | | Denise A. Paulonis | | | | | | | | RSUs | 11/01/23 | | 98,153 | 98,154 | 98,157 | 294,464 | | FY24-26 Y1AOIM PSUs (a) | 11/01/23 | | | | 43,639 | 43,639 | | RSUs | 11/02/22 | | 65,752 | 65,755 | | 131,507 | | FY23-25 Y1AOIM PSUs (b) | 11/02/22 | | | 27,255 | | 27,255 | | FY23-25 Y2AOIM PSUs (b) | 11/02/22 | | | 24,362 | | 24,362 | | RSUs | 11/03/21 | | 40,709 | | | 40,709 | | FY22-24 rTSR PSUs (c) | 11/03/21 | | 47,569 | | | 47,569 | | FY22-24 Y2AOIM PSUs (c) | 11/03/21 | | 16,874 | | | 16,874 | | FY22-24 Y3AOIM PSUs (c) | 11/03/21 | | 15,084 | | | 15,084 | | RSUs | 10/01/21 | 28,282 | | | | 28,282 | | Marlo M. Cormier | | | | | | | | RSUs | 11/01/23 | | 19,630 | 19,630 | 19,632 | 58,892 | | FY24-26 Y1AOIM PSUs (a) | 11/01/23 | | | | 8,728 | 8,728 | | RSUs | 11/02/22 | | 13,150 | 13,151 | | 26,301 | | FY23-25 Y1AOIM PSUs (b) | 11/02/22 | | | 5,451 | | 5,451 | | FY23-25 Y2AOIM PSUs (b) | 11/02/22 | | | 4,873 | | 4,873 | | RSUs | 11/03/21 | | 7,663 | | | 7,663 | | FY22-24 rTSR PSUs (c) | 11/03/21 | | 8,954 | | | 8,954 | | FY22-24 Y2AOIM PSUs (c) | 11/03/21 | | 3,176 | | | 3,176 | | FY22-24 Y3AOIM PSUs (c) | 11/03/21 | | 2,840 | | | 2,840 | | John H. Goss | | | | | | | | RSUs | 11/01/23 | | 17,667 | 17,667 | 17,669 | 53,003 | | FY24-26 Y1AOIM PSUs (a) | 11/01/23 | | | | 7,855 | 7,855 | | RSUs | 11/02/22 | | 10,382 | 10,383 | | 20,765 | | FY23-25 Y1AOIM PSUs (b) | 11/02/22 | | | 4,304 | | 4,304 | | FY23-25 Y2AOIM PSUs (b) | 11/02/22 | | | 3,847 | | 3,847 | | RSUs | 11/03/21 | | 5,747 | | | 5,747 | | FY22-24 rTSR PSUs (c) | 11/03/21 | | 6,715 | | | 6,715 | | FY22-24 Y2AOIM PSUs (c) | 11/03/21 | | 2,382 | | | 2,382 | | FY22-24 Y3AOIM PSUs (c) | 11/03/21 | | 2,130 | | | 2,130 | | Mark G. Spinks | | | | | | | | RSUs | 11/01/23 | | 17,667 | 17,667 | 17,669 | 53,003 | | FY24-26 Y1AOIM PSUs (a) | 11/01/23 | | | | 7,855 | 7,855 | | RSUs | 11/02/22 | | 10,382 | 10,383 | | 20,765 | | FY23-25 Y1AOIM PSUs (b) | 11/02/22 | | | 4,304 | | 4,304 | | FY23-25 Y2AOIM PSUs (b) | 11/02/22 | | | 3,847 | | 3,847 | | RSUs | 11/03/21 | | 5,747 | | | 5,747 | | FY22-24 rTSR PSUs (c) | 11/03/21 | | 6,715 | | | 6,715 | | FY22-24 Y2AOIM PSUs (c) | 11/03/21 | | 2,382 | | | 2,382 | | FY22-24 Y3AOIM PSUs (c) | 11/03/21 | | 2,130 | | | 2,130 |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | Grant Date | Vest Date | | | | | | Name | | 10/01/24 | 11/15/24 | 11/15/25 | 11/15/26 | Total | | Scott C. Sherman | | | | | | | | RSUs | 11/01/23 | | 11,287 | 11,288 | 11,288 | 33,863 | | FY24-26 Y1AOIM PSUs (a) | 11/01/23 | | | | 5,019 | 5,019 | | RSUs | 11/02/22 | | 7,959 | 7,960 | | 15,919 | | FY23-25 Y1AOIM PSUs (b) | 11/02/22 | | | 3,299 | | 3,299 | | FY23-25 Y2AOIM PSUs (b) | 11/02/22 | | | 2,950 | | 2,950 | | RSUs | 11/03/21 | | 4,789 | | | 4,789 | | FY22-24 rTSR PSUs (c) | 11/03/21 | | 5,596 | | | 5,596 | | FY22-24 Y2AOIM PSUs (c) | 11/03/21 | | 1,985 | | | 1,985 | | FY22-24 Y3AOIM PSUs (c) | 11/03/21 | | 1,775 | | | 1,775 |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (a) The FY24-26 Y1AOIM PSUs are included in this table based on actual performance of 74.1% and will vest on November 15, 2026, subject to continued employment on such date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (b) The FY23-25 Y1AOIM PSUs and FY23-25 Y2AOIM PSUs are included in this table based on actual performance of 82.9% and 74.1%, respectively, and will vest on November 15, 2025 subject to continued employment on such date. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (c) The FY22-24 rTSR PSUs, FY22-24 Y2AOIM PSUs and FY22-24 Y3AOIM PSUs are included in this table based on actual performance of 77.9%, 82.9%, and 74.1%, respectively, which will vest on November 15, 2024, subject to continued employment on such date. The FY22-24 Y1AOIM PSUs are not included in this table because they were not earned and were canceled without payout following the conclusion of the performance period on September 30, 2023. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (3) The potential payout dates for the unearned PSUs are as follows (shown at target). See “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Long-Term Incentives” of this Proxy Statement for more details. The FY24-26 Y2AOIM PSUs, FY24-26 Y3AOIM PSUs, and FY23-25 Y3AOIM PSUs are not included in this table because the performance goals for such awards have not been established and, as a result, are not considered granted for accounting and disclosure purposes until the respective performance goals are established. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | Grant Date | Performance Period | Potential Payout Date | | Total | | Name | | | 11/15/25 | 11/15/26 | | | Denise A. Paulonis | | | | | | | FY24-26 rTSR PSUs | 11/01/23 | FY24-26 | | 117,786 | 117,786 | | FY23-25 rTSR PSUs | 11/02/22 | FY23-25 | 98,629 | | 98,629 | | Marlo M. Cormier | | | | | | | FY24-26 rTSR PSUs | 11/01/23 | FY24-26 | | 23,557 | 23,557 | | FY23-25 rTSR PSUs | 11/02/22 | FY23-25 | 19,725 | | 19,725 | | John H. Goss | | | | | | | FY24-26 rTSR PSUs | 11/01/23 | FY24-26 | | 21,202 | 21,202 | | FY23-25 rTSR PSUs | 11/02/22 | FY23-25 | 15,573 | | 15,573 | | Mark G. Spinks | | | | | | | FY24-26 rTSR PSUs | 11/01/23 | FY24-26 | | 21,202 | 21,202 | | FY23-25 rTSR PSUs | 11/02/22 | FY23-25 | 15,573 | | 15,573 | | Scott C. Sherman | | | | | | | FY24-26 rTSR PSUs | 11/01/23 | FY24-26 | | 13,546 | 13,546 | | FY23-25 rTSR PSUs | 11/02/22 | FY23-25 | 11,939 | | 11,939 |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| (4) Value based on the closing price for shares of our Common Stock on September 30, 2024 of $13.57. |
OPTION EXERCISES AND STOCK VESTED IN FY24
OPTION EXERCISES AND STOCK VESTED IN FY24 The following table contains information about stock options exercised, stock vested and the value realized by the NEOs during FY24:
OPTION EXERCISES AND STOCK VESTED IN FY24
| | Option Awards | | Stock Awards (1) | | | Name | Number of Shares Acquired on Exercise (#) | Valued Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Denise A. Paulonis | — | — | 134,742 | 1,206,854 | | Marlo M. Cormier | — | — | 30,636 | 280,303 | | John H. Goss | — | — | 24,100 | 220,726 | | Mark G. Spinks | — | — | 27,907 | 254,233 | | Scott C. Sherman | — | — | 21,582 | 196,612 |
OPTION EXERCISES AND STOCK VESTED IN FY24
| (1) Value realized on vesting for RSUs and earned PSUs is equal to the closing price for shares of our Common Stock on the date of vesting multiplied by the number of shares acquired upon vesting. The “Number of Shares Acquired on Vesting” and the “Value Realized on Vesting” include shares that were withheld for taxes at the time of vesting. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table summarizes the estimated value of the payments and benefits that each of our NEOs would receive upon termination of employment under various circumstances or a change in control. The amounts shown assume that the triggering event (termination of employment or a change in control) occurred on September 30, 2024. The amounts presented in the following table do not reflect amounts the NEO earned or accrued prior to the triggering event, such as previously vested equity awards. For information about these previously earned and accrued amounts, see the “Summary Compensation Table”, “Outstanding Equity Awards at 2024 Fiscal Year-End” table and “Option Exercises and Stock Vested in FY24” table of this Proxy Statement.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| Name and Potential Payment Type | Death or Disability ($) | Retirement ($)(1) | Change in Control ($)(2)(8) | Change in Control with Qualified Termination ($)(2)(3)(9) | Termination for Any Other Reason ($)(10) | | Denise A. Paulonis | | | | | | | FY24 Bonus (4) | 1,564,573 | — | — | 1,564,573 | — | | Severance (5) | — | — | — | 4,087,394 | — | | Equity Awards (6) | 6,957,254 | — | — | 12,208,304 | — | | Health and Welfare Benefits (7) | — | — | — | 16,033 | — | | Total | 8,521,827 | — | — | 17,876,304 | — | | Marlo M. Cormier | | | | | | | FY24 Bonus (4) | 407,560 | — | — | 407,560 | — | | Severance (5) | — | — | — | 1,883,497 | — | | Equity Awards (6) | 1,295,494 | — | — | 2,343,539 | — | | Health and Welfare Benefits (7) | — | — | — | 41,832 | — | | Total | 1,703,054 | — | — | 4,676,428 | — |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| Name and Potential Payment Type | Death or Disability ($) | Retirement ($)(1) | Change in Control ($)(2)(8) | Change in Control with Qualified Termination ($)(2)(3)(9) | Termination for Any Other Reason ($)(10) | | John H. Goss | | | | | | | FY24 Bonus (4) | 357,905 | 357,905 | — | 357,905 | — | | Severance (5) | — | — | — | 1,606,941 | — | | Equity Awards (6) | 1,064,952 | — | — | 1,973,458 | — | | Health and Welfare Benefits (7) | — | — | — | 31,316 | — | | Total | 1,422,857 | 357,905 | — | 3,969,620 | — | | Mark G. Spinks | | | | | | | FY24 Bonus (4) | 317,388 | 317,388 | — | 317,388 | — | | Severance (5) | — | — | — | 1,508,884 | — | | Equity Awards (6) | 1,064,952 | 1,685,359 | — | 1,973,458 | — | | Health and Welfare Benefits (7) | — | — | — | 31,820 | — | | Total | 1,382,340 | 2,002,747 | — | 3,831,550 | — | | Scott C. Sherman | | | | | | | FY24 Bonus (4) | 272,852 | — | — | 272,852 | — | | Severance (5) | — | — | — | 1,384,387 | — | | Equity Awards (6) | 775,307 | — | — | 1,387,763 | — | | Health and Welfare Benefits (7) | — | — | — | 42,196 | — | | Total | 1,048,159 | — | — | 3,087,198 | — |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (1) Mr. Spinks was eligible for retirement for purposes of both AIP and stock awards, and Mr. Goss was eligible for retirement for purposes of AIP only, in each case as of September 30, 2024. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (2) For purposes of the severance agreements, a “change in control” generally includes: (i) the acquisition by any person of 20% or more of the voting power of our outstanding Common Stock; (ii) a change in the majority of the incumbent Board of Directors; (iii) certain reorganizations, mergers or consolidations of us involving a change of ownership of 50% or more of our Common Stock or sales of substantially all of our assets; or (iv) stockholder approval of our complete liquidation or dissolution. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (3) For purposes of this table, a qualified termination means termination without cause or a resignation for good reason within 24 months following a change in control. “Good reason” generally includes: (i) a material diminution in authority, duties or responsibilities of the executive or the supervisor to whom the executive reports; (ii) a material reduction in the executive’s base salary; (iii) a material reduction in the budget over which the executive retains authority; (iv) a relocation of the executive’s principal location by more than 20 miles; or (v) any other material breach of the severance agreement. “Cause” generally includes: (i) the executive’s uncured demonstrably willful and deliberate material breach of duties and responsibilities, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company; and (ii) the executive’s commission of a felony involving moral turpitude. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (4) Reflects the current fiscal year AIP award payout, which was not yet paid as of September 30, 2024. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (5) Reflects a severance payment of 1.99 times the NEO’s base salary as of the end of FY24 plus 1.99 times the average of the NEO’s AIP award payouts for the previous five fiscal years (excluding FY24), payable in a lump sum. Because she commenced employment in FY20, an annualized bonus was used for FY20 for Ms. Cormier. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (6) Reflects the estimated value of unvested in-the-money stock options, PSUs and RSUs based on the closing price per share of our Common Stock on September 30, 2024 of $13.57. For purposes of this calculation, unvested stock options having a value less than $13.57 have a value of $0. For PSUs, calculations are based on the following: (i) in the case of death, disability, or retirement, 100% of the target number of units for the FY24-26 rTSR PSUs and FY23-25 rTSR PSUs, 77.9% of the target number of units for the FY22-24 rTSR PSUs, 0% of the target number of units for the FY22-24 Y1AOIM PSUs, 82.9% of the target number of units for the FY22-24 Y2AOIM PSUs, 74.1% of the target number of units for the FY22-24 Y3AOIM PSUs, |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| 82.9% of the target number of units for the FY23-25 Y1AOIM PSUs, 74.1% of the target number of units for the FY23-25 Y2AOIM PSUs, and 74.1% of the target number of units for the FY24-26 Y1AOIM PSUs; and (ii) in the case of a change in control with qualified termination, 100% of the target number of units for the FY24-26 rTSR PSUs, FY23-25 rTSR PSUs and FY22-24 rTSR PSUs, 0% of the target number of units for the FY22-24 Y1AOIM PSUs, 82.9% of the target number of units for the FY22-24 Y2AOIM PSUs, 74.1% of the target number of units for the FY22-24 Y3AOIM PSUs, 82.9% of the target number of units for the FY23-25 Y1AOIM PSUs, 74.1% of the target number of units for the FY23-25 Y2AOIM PSUs, and 74.1% of the target number of units for the FY24-26 Y1AOIM PSUs, per the terms of the award agreements. The impact of each scenario on outstanding stock options, PSUs and RSUs is described in the following table: |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| Equity Award Type | Death or Disability | Retirement (a) | Change in Control with Qualified Termination | Termination for Any Other Reason | | Options | Accelerated Vesting (Next Tranche Only) | Continues to Vest up to 36 Months | Accelerated Vesting (All) | Forfeited | | PSUs | In Progress, Prorated (Based on Actual Performance); Not in Progress, Forfeited | In Progress, Prorated (Based on Actual Performance); Not in Progress, Forfeited | rTSR PSUs, Accelerated Vesting (All at Target); All Other PSUs (In Progress, Based on Actual Performance; Not in Progress, Forfeited) | Forfeited | | RSUs | Accelerated Vesting (Next Tranche Only) | Continues to Vest up to 36 Months | Accelerated Vesting (All) | Forfeited |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (a) Assuming the NEO agrees to restrictive covenants. If the NEO does not agree to restrictive covenants, then the NEO will forfeit his or her unvested equity awards. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (7) Reflects the cost of continued health and welfare benefits for 24 months, based on (i) our portion of the projected cost of the benefits (the NEO pays the employee cost for such coverage) and (ii) the level of coverage selected by the NEO. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (8) Assuming stock options, RSUs and PSUs awarded pursuant to the 2010 and 2019 Omnibus Incentive Plans are assumed by the acquirer. If, instead, the stock options, RSUs and PSUs were not assumed by the buyer, then such awards would be canceled in in exchange for a cash payment (based upon the difference between the price per share offered in connection with the change in control and the exercise price, in the case of stock options). The estimated value of such awards is reflected in the “Change in Control with Qualified Termination” column of this table. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (9) Pursuant to the terms of the severance agreements, any payments to the executive under such agreements will be reduced so that the present value of such payments plus any other “parachute payments” as determined under Section 280G of the Internal Revenue Code will not, in the aggregate, exceed 2.99 times the executive’s average taxable income from us over the five-year period ending prior to the year in which a change in control occurs. However, no such reduction will apply to payments that do not constitute “excess parachute payments” under Section 280G of the Internal Revenue Code. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (10) If the executive terminates employment with the Company for any reason other than death or disability, retirement or a change in control with a qualified termination, then such executive will not be entitled to any payments or benefits in connection with such termination. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
CEO PAY RATIO The CEO pay ratio figures below are a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported below should not be used as a basis for comparison between companies. The employee we identified as the median employee in FY23 experienced a significant change in their circumstances in FY24. As a result, we identified a new median employee for FY24. Our median employee determination date was July 1, 2024, which was within the last three months of FY24, as required by the pay ratio rule. We determined that the Company and its consolidated subsidiaries had 26,885 employees as of July 1, 2024. To determine our median employee, we used W-2 “gross pay” as our consistently applied compensation measure. We then annualized gross pay for permanent employees who commenced work during FY24 and any employees who were on temporary leave for a portion of FY24. From the considered population, we identified the median employee and determined their annual total compensation using the same methodology we use for our NEOs as set forth in the Summary Compensation Table included in this Proxy Statement. For FY24, the total annual compensation of our CEO was $7,538,897 and the median employee’s total annual compensation was $16,599. Accordingly, the ratio of CEO pay to median employee pay was 454:1. PAY VERSUS PERFORMANCE The following table shows the compensation actually paid (“CAP”) (as defined by the SEC in Item 402(v) of Regulation S-K) for our NEOs and our financial performance for the fiscal years shown.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| | CEO (1) | | Other NEOs (1) | | | | | | | Fiscal Year | Summary Compensation Table Total (2) | Compensation Actually Paid (3) | Average Summary Compensation Table Total (2) | Average Compensation Actually Paid (3) | Total Shareholder Return (4) | Peer Group Total Shareholder Return (5) | Net Income (Millions) (6) | AOI (Millions) (7) | | 2024 | $7,538,897 | $12,772,501 | $1,711,129 | $2,546,032 | $156.16 | $143.51 | $153.4 | $314.6 | | 2023 | $7,230,935 | $2,854,742 | $1,634,032 | $857,188 | $96.43 | $94.71 | $184.6 | $340.8 | | 2022 | $8,363,154 | $6,267,042 | $1,286,427 | $575,679 | $144.99 | $82.42 | $183.6 | $391.3 | | 2021 | $6,723,259 | $5,734,028 | $1,407,832 | $1,781,613 | $193.90 | $124.60 | $239.9 | $461.1 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (1) NEOs included in these columns reflect the following individuals: |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| Fiscal Year | CEO | Other NEOs | | 2024 | Denise A. Paulonis | Marlo M. Cormier, John H. Goss, Mark G. Spinks, Scott C. Sherman | | 2023 | Denise A. Paulonis | Marlo M. Cormier, John H. Goss, Mark G. Spinks, Mary Beth Edwards | | 2022 | Denise A. Paulonis | Marlo M. Cormier, John H. Goss, Mark G. Spinks, Mary Beth Edwards, Pam K. Kohn | | 2021 | Christian A. Brickman | Marlo M. Cormier, John H. Goss, Mark G. Spinks, Pam K. Kohn, Aaron E. Alt |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (2) Amounts reflect Summary Compensation Table Total for our NEOs for each corresponding year. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (3) The following table illustrates the adjustments to the Summary Compensation Table Total for our CEO as well as the average for our other NEOs (“Other NEOs”), to determine “compensation actually paid”, as computed in accordance with Item 402(v). Amounts do not reflect actual compensation earned by or paid to our NEO s during the applicable year. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| Reconciliation of Fiscal Year 2024 Summary Compensation Table Total to Compensation Actually Paid | CEO | Average Other NEOs | | Summary Compensation Table Total | $7,538,897 | $1,711,129 | | Minus: Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | $4,775,838 | $799,510 | | Plus: Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | $7,562,663 | $1,268,605 | | Plus: Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | $2,369,069 | $339,814 | | Plus: Fair Value at Vesting of Option and Stock Awards Granted and Vested in Same Fiscal Year | $— | $— | | Plus: Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $77,711 | $25,993 | | Minus: Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $— | $— | | Compensation Actually Paid | $12,772,501 | $2,546,032 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
For purposes of the above adjustments, the fair value of equity awards on the applicable date were determined in accordance with FASB’s ASC Topic 718. For more information, please see the notes to our financial statements in our Annual Report on Form 10-K and the footnotes to the Summary Compensation Table of this proxy statement. The assumptions used in calculating the fair value of the Option and Stock Awards did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table, except that the fair value www.sallybeautyholdings.com calculations of (i) the options granted on or between November 4, 2020 and October 1, 2021 used an estimated term between 2.97 years and 6.00 years in FY24, as compared to an estimated term of 6.00 years used to calculate the grant date fair value of such awards, and (ii) the AOIM PSU, FY23-25 AOIM PSU, and FY24-26 AOIM PSU awards had payouts below target in FY24, in each case as compared to the grant date fair value calculations which assumed a payout at target.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (4) Total Shareholder Return (“TSR”) represents the cumulative return on a fixed investment of $100 in the common stock of Sally Beauty Holdings, Inc., for the period beginning on the last trading day of fiscal year 2020 through the end of the applicable fiscal year, assuming reinvestment of dividends. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (5) Peer Group Total Shareholder Return represents the cumulative return on a fixed investment of $100 in the Dow Jones U.S. Specialty Retailers Index for the period beginning on the last trading day of fiscal year 2020 through the end of the applicable fiscal year, assuming reinvestment of dividends. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (6) The dollar amounts reported represent the net income reflected in the Company’s audited financial statements for the applicable year. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (7) Adjusted Operating Income (“AOI”) is our Company Selected Measure. Please see “Compensation Discussion and Analysis – FY24 Executive Compensation Program – Annual Incentive” section of this CD&A for AOI definition. Please see Appendix 1 for a reconciliation to the most directly comparable GAAP financial measure. |
PROMOTION OF SOUND CORPORATE GOVERNANCE PRACTICES
| • | Limit on Non-Employee Director Compensation. Under the 2025 Omnibus Plan, the sum of the aggregate grant date fair value of all equity-based grants and cash fees paid to a single non-employee director, for services as a non-employee director, in a fiscal year may not exceed $675,000. |
KEY DATA RELATING TO OUTSTANDING EQUITY AWARDS AND SHARES AVAILABLE
KEY DATA RELATING TO OUTSTANDING EQUITY AWARDS AND SHARES AVAILABLE The following table includes information regarding outstanding equity awards and shares available for future awards under the 2019 Omnibus Plan and the 2010 Omnibus Incentive Plan (the “2010 Omnibus Plan” and, together with the 2019 Omnibus Plan, the “Prior Plans”) as of November 25, 2024 (and without giving effect to approval of the 2025 Omnibus Plan under this Proposal):
KEY DATA RELATING TO OUTSTANDING EQUITY AWARDS AND SHARES AVAILABLE
| | 2019 Omnibus Plan (1) | 2010 Omnibus Plan (1) | | Total shares underlying outstanding stock options and SARs | 980,443 | 938,103 | | Weighted-average exercise price of outstanding stock options and SARs | $13.80 | $21.13 | | Weighted-average remaining contractual life of outstanding stock options and SARs | 5.8 years | 2.5 years | | Total shares underlying time-based outstanding unvested full value awards | 2,564,882 | — | | Total shares underlying performance-based outstanding full value awards | 2,011,911(2) | — | | Total shares currently available for grant | 3,219,321(3) | —(4) | | Common Stock Outstanding as of the Record Date, November 25, 2024 | 102,472,251 | | | Market Price of Common Stock as of the Record Date, November 25, 2024 | $14.09 | |
KEY DATA RELATING TO OUTSTANDING EQUITY AWARDS AND SHARES AVAILABLE
| (1) Includes information regarding all outstanding equity awards under the Prior Plans and shares available for future awards under the 2019 Omnibus Plan, as of November 25, 2024. |
KEY DATA RELATING TO OUTSTANDING EQUITY AWARDS AND SHARES AVAILABLE
| (2) Assumes performance-based awards will vest and pay out based on target performance levels being achieved. |
KEY DATA RELATING TO OUTSTANDING EQUITY AWARDS AND SHARES AVAILABLE
| (3) If our stockholders approve the 2025 Omnibus Plan, no further awards will be made under the 2019 Omnibus Plan. |
KEY DATA RELATING TO OUTSTANDING EQUITY AWARDS AND SHARES AVAILABLE
| (4) No further awards may be granted under the 2010 Omnibus Plan following the effective date of the 2019 Omnibus Plan. |