DEF 14A of American Eagle Outfitters Inc
Filed May 15, 2025 · FY20240001193125-25-120941
The Board of Directors recommends that the stockholders vote “FOR”
The Board of Directors recommends that the stockholders vote “FOR” each of the following Class III director nominees:
The Board of Directors recommends that the stockholders vote “FOR”
| Deborah A. Henretta | | | Age: 63 | BACKGROUND Ms. Henretta has over 30 years of business leadership experience across both developed and developing markets, as well as expertise in brand building, marketing, philanthropic program development, and government relations. She joined Procter & Gamble (“P&G”) in 1985. In 2005, she was appointed President acting as Senior Executive Officer of P&G’s business in Association of Southeast Asian Nations, Australia and India. She was appointed group president of P&G Asia in 2007, group president of P&G Global Beauty Sector in June 2013, and group president of P&G E-Business in February 2015. She retired from P&G in June 2015. Ms. Henretta is a partner at Council Advisors (formerly G100 Companies) where she assisted in establishing a Board Excellence program that provides director education on board oversight and governance responsibilities, including in the areas of digital transformation and cybersecurity, as well as a partnership program for New Director Training. She holds an M.A. in advertising from Newhouse School of Communications and a B.A. in communications and an Honorary Ph.D. in humane letters from St. Bonaventure. SKILLS AND QUALIFICATIONS Ms. Henretta has significant experience in business leadership and global and international operations. She is skilled in brand building, marketing, and emerging market management. Ms. Henretta has risk management experience as a former executive at P&G tasked with specific risk management duties. She also brings significant knowledge of digital transformation and cybersecurity to the Board. In April 2023, Ms. Henretta completed the Competent Boards Global ESG Certificate and Designation (GCB.D). SELECT PROFESSIONAL AND COMMUNITY CONTRIBUTIONS Ms. Henretta was a member of Singapore’s Economic Development Board (“EDB”) from 2007 to 2013. She contributed to the growth strategies for Singapore, and was selected to serve on the EDB’s Economic Strategies Committee between 2009 and 2011. In 2008, she received a U.S. State Department appointment to the Asia-Pacific Economic Cooperation’s Business Advisory Council. In 2011, she was appointed chair of this 21-economy council, becoming the first woman to hold the position. In that role, she advised top government officials, including former President Barack Obama and former Secretary of State Hillary Clinton. Ms. Henretta serves on the Board of Trustees of Syracuse University. PREVIOUS DIRECTORSHIPS Ms. Henretta previously served as a director of Staples, Inc. (Nasdaq: SPLS) from 2016 to 2017. | | Director since: February 2019 | | | Independent | | | Committees: • Audit • Compensation • Nominating | | | Current Public Company Directorships: • Corning, Inc. (NYSE: GLW) • Meritage Homes Corporation (NYSE: MTH) • NiSource, Inc. (NYSE: NI) | |
The Board of Directors recommends that the stockholders vote “FOR”
| 2025 Proxy Statement | | | 17 |
The Board of Directors recommends that the stockholders vote “FOR”
| Cary D. McMillan | | | Age: 67 | BACKGROUND From December 2005 until his retirement in 2020, Mr. McMillan served as Chief Executive Officer of True Partners Consulting, LLC, a professional services firm providing tax and other financial services. From October 2001 to April 2004, he was the Chief Executive Officer of Sara Lee Branded Apparel. Mr. McMillan served as Executive Vice President of Sara Lee Corporation (“Sara Lee”), a branded consumer packaged goods company, from January 2000 to April 2004. From November 1999 to December 2001, he served as Chief Financial and Administrative Officer of Sara Lee. Prior thereto, Mr. McMillan served as an audit partner with Arthur Andersen LLP. Mr. McMillan holds a B.S. from the University of Illinois and is a CPA. SKILLS AND QUALIFICATIONS Mr. McMillan brings to the Board demonstrated leadership abilities as a Chief Executive Officer and has a deep understanding of business, both domestically and internationally. His experience as a former audit partner and CPA also provides him with extensive knowledge of financial and accounting issues. Furthermore, Mr. McMillan’s current and prior service on other public boards provides the Board with diversified knowledge of best corporate governance and compensation practices. SELECT PROFESSIONAL AND COMMUNITY CONTRIBUTIONS Mr. McMillan serves on the AEO Foundation Board and brings a wealth of philanthropic experience to the position. He serves on a number of nonprofit boards in Chicago including as Treasurer of both the Millenium Park Foundation and WTTW, the local PBS station. He is also a Trustee of the Art Institute of Chicago. PREVIOUS DIRECTORSHIPS Mr. McMillan previously served as a director of McDonald’s Corporation (NYSE: MCD) from 2003 to 2015, Hewitt Associates, Inc. from 2002 to 2010, and Sara Lee from 2000 to 2004. | | Director since: June 2007 | | | Independent | | | Committees: • Audit • Compensation (Chair) • Nominating | | | Current Public Company Directorships: • Hyatt Corporation (NYSE: H) | | | Awards and Recognitions: • NACD Top 100 (2023) | |
The Board of Directors recommends that the stockholders vote “FOR”
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The following Class I Directors have terms that
The following Class I Directors have terms that expire as of the 2026 Annual Meeting:
The following Class I Directors have terms that
| Jay L. Schottenstein | | | Age: 70 | BACKGROUND Mr. Schottenstein has served as our Chief Executive Officer since December 2015. Prior thereto, he served as our Interim Chief Executive Officer from January 2014 to December 2015. He has served as Chairman of the Board since March 1992. He previously served the Company as Chief Executive Officer from March 1992 until December 2002 and as a Vice President and Director of the Company’s predecessors since 1980. He has also served as Chairman of the Board and Chief Executive Officer of Schottenstein Stores Corporation (“SSC”) since March 1992 and as President of SSC since 2001. Prior thereto, Mr. Schottenstein served as Vice Chairman of SSC from 1986 to 1992. He has been a Director of SSC since 1982. Mr. Schottenstein also has served since March 2005 as Executive Chairman of the Board of Directors of Designer Brands Inc. (f/k/a DSW Inc.) (NYSE: DBI) and formerly served as that company’s Chief Executive Officer from March 2005 to April 2009. He has served as an officer and director of various other entities owned or controlled by members of his family since 1976. He is a graduate of Indiana University. SKILLS AND QUALIFICATIONS Mr. Schottenstein has deep knowledge and extensive experience with respect to the Company’s operations and the retail industry in general. His expertise in merchandising, operations, retail, real estate, brand building, and team management has guided the Company from a single-brand company to a multi-brand $5+ billion global specialty retailer. SELECT PROFESSIONAL AND COMMUNITY CONTRIBUTIONS Mr. Schottenstein dedicates significant time to civic and cultural organizations. In 1985, he and his wife founded the Jay and Jeanie Schottenstein Foundation, the couple’s personal philanthropic organization. Together, they have donated millions of dollars to causes that improve the world, from arts and culture to mental health and cardiovascular research. The Schottensteins support many local organizations, including the Columbus Museum of Art, the United Way of Central Ohio, and The Ohio State University. In 2008, the Schottensteins endowed the biennial Jay and Jeanie Schottenstein Prize in Cardiovascular Sciences at The Ohio State University, an esteemed award given to outstanding medical and research professionals in the field. In 2010, Mr. and Mrs. Schottenstein were named Humanitarians of the Year by the American Red Cross of Central Ohio. In 2021, the Schottensteins pledged $10.15 million to The Ohio State University toward improving students’ access to behavioral healthcare and reducing stigma surrounding mental illness. Mr. Schottenstein is a member of the board of directors at the Columbus Partnership and the Columbus Development Corporation. PREVIOUS DIRECTORSHIPS Mr. Schottenstein previously served as a member of the Board of Directors for Albertsons Companies Inc. (NYSE: ACI) from 2006 to 2022. | | Director since: March 1992 | | | Executive | | | Committees: • None | | | Current Public Company Directorships: • Designer Brands Inc. (NYSE: DBI) | | | Awards and Recognitions: • World Retail Congress Retail Hall of Fame Inductee (2024) • Humanitarian of the Year: American Red Cross of Greater Columbus • T. Kenyon Holly Award for Outstanding Humanitarian Achievement (Two Ten Foundation) | |
The following Class I Directors have terms that
| 2025 Proxy Statement | | | 19 |
The following Class I Directors have terms that
| Sujatha Chandrasekaran | | | Age: 57 | BACKGROUND Ms. Chandrasekaran has been an advisor and independent consultant in the technology and consulting sectors since July 2022. Previously, she served as Senior Executive Vice President and Chief Digital and Information Officer for CommonSpirit Health, a non-profit health system, from 2019 to 2022. Prior to that, she was Global Chief Digital and Information Officer for Kimberly Clark Corporation, a multinational personal care corporation focused on consumer products, from 2016 to 2019 and Senior Vice President, Global Chief Technology and Data Officer for Walmart Inc. from 2011 to 2016. Before joining Walmart Inc., Ms. Chandrasekaran held senior technology, digital, and ecommerce roles at The Timberland Company and leadership roles at Nestlé S.A. Ms. Chandrasekaran holds a bachelor of engineering degree from University of Madras, India; a master of business systems from Monash University, Melbourne Australia; and an Executive Development Education Certificate from London Business School. She is certified as NACD.DC. SKILLS AND QUALIFICATIONS Ms. Chandrasekaran brings vast information, artificial intelligence (“AI”) and digital technology expertise and a wealth of leadership experience in the global retail, eCommerce, consumer and supply chain industries to the Board. Ms. Chandrasekaran is an industry thought leader in digital business transformation, digital business models, innovation and talent transformation. She possesses deep technical expertise in cybersecurity, data, AI and multiple technologies. Ms. Chandrasekaran also brings significant risk management and data protection experience as an executive level Enterprise Risk Committee member at Kimberly-Clark Corporation, CommonSpirit Health and the Timberland Company, Enterprise Compliance Committee at CommonSpirit Health and the Enterprise Privacy Council at Walmart Inc. SELECT PROFESSIONAL AND COMMUNITY CONTRIBUTIONS Ms. Chandrasekaran serves as a director of Pando.AI, a privately-held AI and digital supply chain platform company, and Agendia, Inc., a privately-held commercial-stage company focused on precision oncology for breast cancer. Ms. Chandrasekaran is the founder and chair of the board of directors of T200 Foundation, a non-profit focused on developing women in technology. PREVIOUS DIRECTORSHIPS Ms. Chandrasekaran previously served as a director of Cardinal Health (NYSE: CAH) from 2022 to 2024, Barry Callebaut AG (SIX: BARN) from 2018 to 2020 and Blume Global Technologies, a company focused on digital supply chain platform software-as-a-service, data and AI platform from 2019 to 2023. | | Director since: March 2018 | | | Independent | | | Committees: • Audit • Compensation • Nominating | | | Current Public Company Directorships: • Brenntag SE (BNR.DE) • ATOS (ATO.PA) • Jabil (NYSE: JBL) | | | Awards and Recognitions: • NACD Directorship 100 (2024) • Directors & Boards: Director to Watch (2023 and 2019) • Modern Healthcare: Top 25 Women Leaders in Healthcare (2022) • Forbes: Innovative Technology leader (2021) • NACD Governance Fellow (2018) • IDG: CIO Hall of Fame (2017) | |
The following Class I Directors have terms that
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The following Class II Directors have terms that
The following Class II Directors have terms that expire as of the 2027 Annual Meeting:
The following Class II Directors have terms that
| Janice E. Page | | | Age: 76 | BACKGROUND Ms. Page spent 27 years in apparel retailing, holding numerous merchandising, marketing and operating positions with Sears Roebuck & Company (“Sears”), including serving as Sears’ Group Vice President from 1992 to 1997. While at Sears, Ms. Page launched the direct-to-consumer business and oversaw sporting goods, men’s, women’s and children’s apparel, footwear and accessories, and beauty and fragrances, among other responsibilities. She holds a B.A. from Pennsylvania State University. SKILLS AND QUALIFICATIONS Ms. Page has extensive knowledge of the apparel retail industry and brings to the Board in-depth experience across diverse consumer product categories, as well as retail operations. Her service, tenure and committee leadership on multiple public company boards allows her to provide the Board with a variety of perspectives on corporate governance issues. SELECT PROFESSIONAL AND COMMUNITY CONTRIBUTIONS Ms. Page serves on the advisory boards for the Daveler Entrepreneurship Foundation and the Daveler Scholarship Fund, advising the University of Florida, Florida Gulf Coast University and Florida Southwest University entrepreneurship programs, as well as the Education Foundation of Collier County Champions for Learning and Center for Innovation. PREVIOUS DIRECTORSHIPS Ms. Page previously served as a director of R.G. Barry Corporation from 2000 to 2014, Hampshire Group, Limited from 2009 to 2011 and Kellwood Company from 2000 to 2008. Ms. Page also served as Trustee of Glimcher Realty Trust, a real estate investment trust that owns, manages, acquires and develops malls and community shopping centers from 2001 to 2004. | | Director since: June 2004 | | | Independent | | | Committees: • Audit • Compensation • Nominating (Chair) | | | Current Public Company Directorships: • None | |
The following Class II Directors have terms that
| 2025 Proxy Statement | | | 21 |
The following Class II Directors have terms that
| David M. Sable | | | Age: 71 | BACKGROUND Mr. Sable has served as Vice Chair at Stagwell Global since October 2023. He is also Co-Founder and Partner of DoAble, a Marketing Consultancy focused on branding, positioning and big ideas. As Senior Advisor to WPP plc (“WPP”), a multinational communications, advertising, public relations, technology, and commerce holding company, he mentored and consulted across the company. Previously he was Chairman and Chief Executive Officer of VMLY&R, a global marketing agency, from 2011 to 2019. He propelled Y&R to a top-five global creative firm at Cannes, developed new resources and practices, expanded the global footprint of subsidiary company VML, and ultimately helped unify Y&R and VML into VMLY&R, one of the most successful agencies in the industry today, now known as VML. Prior to his time at Y&R, Mr. Sable served at Wunderman, Inc., a leading customer relationship manager and digital unit of WPP, as Vice Chairman and Chief Operating Officer from August 2000 to February 2011. Mr. Sable was a Founding Partner and served as Executive Vice President and Chief Marketing Officer of Genesis Direct, Inc., a pioneer digital omni-channel retailer, from June 1996 to September 2000. Mr. Sable attended New York University and Hunter College in New York. SKILLS AND QUALIFICATIONS With more than 30 years of experience in digital leadership and marketing communications, Mr. Sable brings to the Board his strategic insight and ability to connect talent across marketing disciplines and geographies. The Board also benefits from his extensive involvement with community programs. In 2024, Mr. Sable earned the Harvard Business School Corporate Director Certificate and in 2025, he completed the Harvard Business School Advanced Corporate Director Seminar. SELECT PROFESSIONAL AND COMMUNITY CONTRIBUTIONS In 2013, Fast Company named Mr. Sable one of the 10 Most Generous Marketing Geniuses. He currently serves on the Board of Directors of UNCF and on the Executive Board of the International Special Olympics, and he was Executive Producer on MTV’s highly acclaimed REBEL MUSIC series. | | Director since: June 2013 | | | Independent | | | Committees: • Audit • Compensation • Nominating | | | Current Public Company Directorships: • Ethan Allen Interiors Inc. (NYSE: ETD) | | | Awards and Recognitions: • The Advertising Club of New York - Advertising People of the Year – Industry Legend Award (2025) • NACD Top 100 (2024) | |
The following Class II Directors have terms that
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The following Class II Directors have terms that
| Noel J. Spiegel | | | Age: 77 | BACKGROUND Mr. Spiegel was a partner at Deloitte & Touche, LLP (“Deloitte”), where he practiced from September 1969 until his retirement in May 2010. In his over 40-year career at Deloitte, he served in numerous management positions, including as Deputy Managing Partner, member of the Executive Committee, Managing Partner of Deloitte’s Transaction Assurance practice, Global Offerings and IFRS practice and Technology, Media and Telecommunications practice (Northeast Region), and as Partner-in-Charge of Audit Operations in Deloitte’s New York office. Mr. Spiegel holds a B.S. from Long Island University and he attended the Advanced Management Program at Harvard Business School. SKILLS AND QUALIFICATIONS Mr. Spiegel provides expertise in public company accounting, disclosure and financial system management to the Board and, more specifically, to the Audit Committee. SELECT PROFESSIONAL AND COMMUNITY CONTRIBUTIONS From 2006 to 2017, Mr. Spiegel was a Trustee, Chair of the Executive Committee and President of the Jewish Communal Fund of New York, a 501(c)(3) donor-advised fund. PREVIOUS DIRECTORSHIPS Mr. Spiegel previously served as a director at Vringo, Inc. from 2013 to 2016 and vTv Therapeutics Inc. (Nasdaq: VTVT) from 2015 to 2022. | | Director since: June 2011 | | | Independent (Lead Independent Director) | | | Committees: • Audit (Chair) • Compensation • Nominating | | | Current Public Company Directorships: • Radian Group Inc. (NYSE: RDN) | | | Awards and Recognitions: • (“NACD”) Top 100 (2020) | |
The following Class II Directors have terms that
| 2025 Proxy Statement | | | 23 |
The following Class II Directors have terms that
CORPORATE GOVERNANCE The following section discusses the Company’s corporate governance, including the role of the Board and its Committees. Additional information regarding corporate governance, including our Corporate Governance Guidelines, the charters of our Audit, Compensation, and Nominating Committees and our Code of Ethics, which applies to all of our directors, officers (including the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) and employees, may be found on our Investor website at investors.ae.com. Any amendments or waivers to our Code of Ethics will also be available on our website. The Code of Ethics includes our privacy and data security policies, as well as our policy on anti-corruption and bribery. We also have a comprehensive Code of Conduct that governs the behavior of our production, sourcing and supply chain business partners, and we routinely audit the factories with which we do business to ensure compliance with our expected standards of operations, human rights and quality in our products. A copy of our corporate governance materials is available in print to any stockholder upon written request to 77 Hot Metal Street, Pittsburgh, PA 15203, c/o the Corporate Secretary. The Evolving Role of the Board AEO benefits greatly from the vast industry-relevant experience, deep institutional knowledge, and thoughtful engagement of our Board. During Fiscal 2024, the Board continued to adapt and respond to the remarkable speed, volume and proliferation of matters that have created challenges, opportunities and responsibilities for the Company. As the business environment has grown more complex with macroeconomic uncertainty, geopolitical tensions, regulatory unpredictability, political polarization, culture wars, cyber threats, and the growth of generative artificial intelligence, our Board tapped into their experience and expertise to ensure that the Company is continuing to conduct its business to enable its continued success and increase in value over the long-term notwithstanding this unprecedented complexity. Far from a one-size-fits-all approach, our Board has used its knowledge, agility and focus to ensure that best-in-class policies, practices, and processes are in place, and management is challenged to think differently when needed while acknowledging the dynamic nature of our business and the material risks facing our industry and the Company. Our Board’s Principles of Effectiveness As the expectations and responsibilities of the Board continued to evolve during Fiscal 2024, our directors consistently adhered to critical fundamental principles to maintain effective operation:
The following Class II Directors have terms that
| • | Constant attention on AEO’s priorities. While the number of issues that require Board attention has expanded, the directors and management carefully crafted meeting agendas to ensure sufficient time and focus was given to those issues that would or could materially impact the business in the near-, medium-, and long-term. Further, the Board was able to align priorities and distribute responsibilities to each independent director serving on each of the three Committees. |
The following Class II Directors have terms that
| • | Effective collaboration with Management. The Board’s relationship with management has been central to its effectiveness. A relationship of mutual trust and candor ensures that information is timely received and the Board’s feedback can be reflected in day-to-day operations. The Board has leveraged management’s expertise to stay informed on emerging issues and identification of issues to share feedback and receive input frequently. |
The following Class II Directors have terms that
| • | Cohesiveness of the Directors. Our directors have the leadership, experience, diplomacy, judgment, tenure and overall business acumen that are vital to ensuring an effective, engaged oversight role. The ability to amicably raise and discuss different perspectives, and a willingness to build consensus and collaborate with each other have been vital to the well-functioning operation of the Board. |
The following Class II Directors have terms that
| • | Balancing the Near- and Long-Terms. The Board has helped management balance the need to deliver near-term results with developing longer-term stockholder value. The Board has empowered management to consider the longer-term direction of the business and has helped management balance competing interests, anticipate risks and threats and explore new opportunities to achieve its new long-term corporate strategy. |
The following Class II Directors have terms that
| • | Participate in the Innovation. As much as AEO is an innovator in retail, the Board has ensured that it has developed policies, practices and processes that are tailored to the needs of the business. While the Board remains informed about the Company’s peers and the market as appropriate, our directors have remained open to creative approaches to unprecedented challenges in a way that is appropriate for AEO and all of its stakeholders. |
The following Class II Directors have terms that
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Our Board’s Primary Responsibilities
Our Board’s Primary Responsibilities Board Oversight of AEO’s Strategy and Capital Deployment The Board receives frequent updates on the Company’s performance and is actively engaged in reviewing and assessing the Company’s strategy, both long- and short-term, including major business and organizational initiatives, capital allocation priorities and potential business development opportunities. During Fiscal 2024, the Board was instrumental in the oversight of the execution of the first year of the Powering Profitable Growth strategy. The Board reviews performance against strategy on a regular basis through robust discussions at Board meetings and through regular updates from management. In addition, at least one Board meeting per year is focused on review of strategy and strategic alignment, including identification of any risks that could impact results and any changes to the current fiscal year’s strategy in light of the operating environment. At this meeting, the Board provides input on and oversight of the short-term strategic goals and direction of the Company. The Board also reviews and approves capital deployment, including dividends and share repurchase plans. Board Oversight of Risk Management The Board as a whole has the responsibility for risk oversight and management, with a focus on the most significant risks facing the Company, including strategic, competitive, economic, operational, financial, legal, regulatory, cybersecurity, sustainability, compliance, culture and reputational risks. In addition, the Board’s Committees oversee and review risk areas that are relevant to their respective areas of responsibility and to which they have been delegated oversight. The Committees regularly report to the full Board on these risks. The risk oversight responsibility of the Board and its Committees is supported by our management reporting processes, which are designed to provide visibility to the Board to those Company personnel responsible for risk assessment, including our management-led Enterprise Risk Management Committee, and information about management’s identification, assessment, and mitigation strategies for critical risks. The Enterprise Risk Management Committee is chaired by the Chief Financial Officer and is composed of all members of our executive leadership team, as well as other key financial-control representatives. The Board receives regular Enterprise Risk Management risk reports from the Chief Financial Officer during routine Board meetings. In addition, we have a Chief Compliance Officer who provides regular updates to the Audit Committee on compliance-related matters, and our General Counsel regularly updates all Committees on relevant litigation, regulatory and legislative matters. In overseeing risk management, the Board and management also leverage the expertise of external advisors, as needed.
Our Board’s Primary Responsibilities
| Risk Oversight by the Board | | | | Full Board | | | | • Assesses major risks facing the Company and reviews options for risk mitigation with the assistance of management and the Committees • Monitors risks that have been delegated to a particular Committee through regular reports provided by the respective Board Committee | | | | Audit Committee | Compensation Committee | Nominating Committee | | • Assesses major financial, regulatory or reputational risk exposures and steps taken by management to address these exposures • Responsible for the review and assessment of information technology, cybersecurity, and artificial intelligence (“AI”) risk exposures and the steps taken to monitor and control these exposures (see details below) • Reviews risks identified during the internal and external auditors’ risk assessment procedures | • Oversees risk management related to employee compensation plans and arrangements • Assesses whether the Company’s compensation plans and practices may incentivize excessive risk-taking and discusses at least annually the relationship between risk management policies and compensation | • Manages risks associated with corporate governance policies and practices • Reviews any risks and exposures relating to director and executive succession planning and talent management • Oversees risk management related to the Company’s governance and corporate social responsibility matters |
Our Board’s Primary Responsibilities
| 2025 Proxy Statement | | | 25 |
Our Board’s Primary Responsibilities
Cybersecurity Oversight The Board recognizes the importance of maintaining the trust and confidence of our various stakeholders. The Board as a whole has responsibility for the Company’s oversight and management of cybersecurity risks. At the management level, to more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Security Officer whose team is responsible for leading our Company-wide cybersecurity strategies, policies, standards, architectures, operations and processes. The Audit Committee receives regular reports from the Chief Information Security Officer on pertinent cyber risk exposures, the status of projects designed to fortify our Information Security Program, metrics on the effectiveness of this program, and the emerging threats in this area. Furthermore, on at least a quarterly basis or more often as needed, the Chief Information Security Officer provides pertinent cybersecurity risk exposures and updates along with various other business units as part of the enterprise risk management report to the Audit Committee. On an annual basis, management invites third-party cyber experts to present to the Audit Committee on best practices in cybersecurity oversight. Please refer to Item 1C.Cybersecurity in Part I of our Fiscal 2024 Annual Report on Form 10-K for additional information regarding cybersecurity matters. Technology, AI and Data Governance Oversight AEO has fostered an innovative spirit since its founding, and the Company continuously aims to responsibly seize technology opportunities, including the various forms of AI (such as machine learning, deep learning, natural language processing, generative and agentic AI) across operations, including in planning, forecasting, supply chain, customer experience, and marketing. Our thoughtful use of technology has assisted us in making more informed decisions about pricing, inventory, marketing, supply chain operations, and other areas. Accordingly, the Board’s awareness, knowledge, and oversight of the use of such technologies has remained a priority. The Board regularly reviews with management how the Company is keeping pace with changing expectations related to technology and the customer and employee experience, and the returns AEO is seeing on AI and other technology investments, both in terms of financial gains and workplace efficiencies. The Board also reviews regularly with management how it is managing and mitigating technology-based risks, including risks relating to data privacy, misinformation, consumer trust, employee rights, bias mitigation, and legal/regulatory compliance. To maintain its oversight role, the Board regularly hears from external experts on trends in AI, including trends in retail. During Fiscal 2024, the Audit Committee included key external business advisors with targeted retail experience in these discussions with management to advise on best practices and the Company’s AI roadmap. Building a Better World Strategy Oversight We engage with a diverse group of stakeholders, including our third-party business partners, our associates, our customers, our communities, and our investors to ensure that we are thoughtfully considering their perspectives to determine priorities within our Building A Better World strategy. Our Board plays an active and vital role in overseeing our sustainability, governance and corporate social responsibility initiatives and ensuring that these opportunities are integrated into and are effectively aligned with the Company’s long-term strategy. Given the breadth of matters that fall within our Building a Better World strategy, the oversight of corporate citizenship and sustainability matters that may have a significant impact on us is allocated among each of the Committees as outlined below.
Our Board’s Primary Responsibilities
| Nominating Committee | Audit Committee | Compensation Committee | | Sustainability and Human Rights | Privacy, AI and Data Security | Human Capital Management Disclosures | | Culture | Anti-Corruption and Bribery | Executive Compensation | | Philanthropy/Charitable Giving | Business Ethics and Integrity | Employee Well-Being | | Board Structure and Governance Issues | Responsible Innovation | | | Public Policy | Sustainability Measurement, Controls and Reporting | |
Our Board’s Primary Responsibilities
At the management level, all matters related to our Building a Better World strategy are ultimately coordinated by a committee of our Chief Financial Officer, Chief Human Resources Officer, Chief Supply Chain Officer, Chief Accounting Officer, and General Counsel & Chief Compliance Officer. Depending on the topic, we have subject matter experts who present proposals and ideas to this management committee; the committee then conducts a robust and holistic review of the various matters presented, including how each proposal aligns with AEO’s strategy and returns value to our stakeholders.
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Succession Planning and Talent Management Oversight Our Board plays a critical role in overseeing succession planning and talent development. The Board meets annually for a two-day succession planning and talent development session (short-term and long-term for the CEO and other executive officers) with management. The Nominating Committee is responsible for recommending to the Board any candidates for succession under the succession plan for the CEO and any changes to such candidates. In assessing possible CEO candidates, the Nominating Committee continually evaluates and identifies the skills, experience and attributes it believes are required for an effective CEO in light of the Company’s business strategies, opportunities and challenges. During Fiscal 2024, the Board specifically enhanced its CEO succession planning roadmap, including identifying an interim structure, transition team and required communications, as a result of feedback received during the Board evaluation process. More broadly, the Board also engages with the Company’s leadership team on matters of talent and culture to review risks and exposures, including around the development of the Company’s talent pipeline. Director Selection and Nominations The Nominating Committee regularly reviews the appropriate size of the Board, whether any vacancies are expected due to retirement or otherwise, and the need for a particular expertise on the Board. In evaluating and determining whether to recommend a candidate to the Board, the Nominating Committee reviews the appropriate skills and characteristics required of Board members in the context of the background of existing members and in light of the perceived needs for the long-term goals and future growth of our business. This includes a review of expertise and experience in key substantive areas such as retail operations, marketing, technology, distribution, mergers and acquisitions, and finance. Through this robust process, Stephanie Pugliese was appointed to the Board in Fiscal 2024; however, as discussed on page 16, Ms. Pugliese resigned from the Board solely as a result of her appointment as President and Chief Executive Officer of another publicly traded company. Pursuant to its charter, the Nominating Committee has the authority to retain consultants and search firms to assist with the process of identifying and evaluating director candidates and to approve the fees and other retention terms for any such consultant or search firm. In prior years, we have used third-party search firms to help identify and evaluate director candidates. Ms. Pugliese’s candidacy was brought to the attention of our Nominating Committee as a result of a third-party search firm.
Our Board’s Primary Responsibilities
| 2025 Proxy Statement | | | 27 |
Our Board’s Primary Responsibilities
Director Skills and Qualifications The Nominating Committee believes that the current members of the Board collectively have the level and balance of skills, experience, and character to execute the Board’s responsibilities. The table below is a summary of the range of skills and experiences that each director brings to the Board, each of which we find to be relevant to our business. Because it is a summary, the table does not include all of the skills, experiences, and qualifications that each director offers, and the fact that a particular experience, skill, or qualification is not listed does not mean that a director does not possess it. All of our directors exhibit high integrity, an appreciation for diversity of background and thought, innovative thinking, a proven record of success, and deep knowledge of corporate governance requirements and best practices.
Our Board’s Primary Responsibilities
| ATTRIBUTES, EXPERIENCE AND SKILLS | | | | | | | | | SKILLS CENTRAL TO AEO’S STRATEGY | | | | | | | | | Retail Industry | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Marketing and Consumer Insight | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Technology and Digital | ✓ | ✓ | ✓ | | | ✓ | ✓ | | Real Estate | ✓ | | | | ✓ | | | | International | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | CORE COMPETENCIES | | | | | | | | | Leadership | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Risk Management | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Audit Committee Financial Expertise | | | ✓ | ✓ | ✓ | | ✓ | | Cybersecurity | | ✓ | | | | | | | Crisis Management | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Our Board’s Primary Responsibilities
Director Tenure The Nominating Committee and the Board recognize it is important for the Board to be “refreshed” by adding new directors from time to time, balanced against the importance of having directors who have deep, historical experience and institutional knowledge of the Company, its strategies and market opportunities and challenges. Accordingly, the Company does not have a mandatory retirement age or term limits for its directors. In the last seven years, the Board appointed four new independent directors, two of whom are currently serving on the Board. Sadly, Steven A. Davis passed away unexpectedly in July 2022, and Ms. Pugliese resigned from the Board in April 2025, solely as a result of her appointment as a President and Chief Executive Officer of another publicly traded company. While the Nominating Committee and the Board recognize the fresh perspectives that our new directors bring to the boardroom, they also believe that our longer-serving directors have critical skills, historical perspective, and deep institutional knowledge that are valuable and help to ensure the continuous oversight of the Company’s execution of its long-term strategy. Director Time Commitments and Protections Against Overboarding The Board appreciates that serving on a public board of directors is a significant responsibility and time commitment. Board members are expected to spend the time needed and meet as often as necessary to discharge their responsibilities properly. In considering each director’s ability to properly discharge their duties, the Nominating Committee annually reviews each Board member’s various time commitments, including, without limitation, their primary occupation, service on public company boards and committee memberships, as well as service with private companies and non-profit organizations.
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
The Board has approved a policy in our Corporate Governance Guidelines to review and limit the number of public company boards on which our directors may simultaneously serve. Directors who are executive officers of other publicly-traded companies generally may not serve on more than two public company boards (including our Board) at one time, and directors who are retired from full-time employment generally may not serve on more than four public company boards (including our Board) at one time. Our CEO may not serve on more than one other public company board unless otherwise determined by the Nominating Committee and must consult with the Chairperson of the Nominating Committee before accepting an appointment to an outside public company board. The Nominating Committee is responsible for oversight of these limits and has discretion to make individual exceptions as it deems appropriate. Director Recommendations and Nominations Candidates may come to the attention of the Nominating Committee from a variety of sources, including current Board members, stockholders and management. All candidates are reviewed in the same manner, regardless of the source of the recommendation. The Nominating Committee will consider, in normal course, the recommendations of stockholders regarding potential director candidates and, in doing so, will consider the needs of the Board and the qualifications of each candidate. Stockholders may recommend potential director candidates for consideration by the Nominating Committee by submitting the recommendation in writing to the Chair of the Nominating Committee, in care of the Company, at the Company’s principal executive offices at 77 Hot Metal Street, Pittsburgh, PA 15203. Additionally, stockholders may nominate candidates to the Board pursuant to certain procedural, informational, and consent requirements. See “Submission of Nominations and Proposals for the 2026 Annual Meeting” for information regarding the submission of director nominations. Director Independence Six of our seven current directors are independent, and such independent oversight bolsters our success. Our Board has determined that each of the following non-employee directors qualified as “independent” in accordance with the listing requirements of the New York Stock Exchange (“NYSE”) and applicable SEC rules: Sujatha Chandrasekaran, Deborah A. Henretta, Cary D. McMillan, Janice E. Page, David M. Sable, and Noel J. Spiegel. Additionally, the Board determined that Stephanie L. Pugliese, who served as a director from August 2024 to April 2025, was independent during her period of service as a director. In particular, the Board affirmatively determined that none of these directors had relationships that would cause them not to be independent under the specific criteria of Section 303A.02 of the NYSE Listed Company Manual. The Board also determined that each member of the Audit Committee meets the heightened independence standards required for audit committee members under the NYSE listing standards and applicable SEC rules and considered the additional factors under the NYSE listing standards relating to members of the Compensation Committee before determining that each member of the Compensation Committee is independent. In making these determinations, the Board evaluated all factors and circumstances that it considered relevant, including the following:
Our Board’s Primary Responsibilities
| • | Whether the director is currently, or at any time during the last three years was, an employee of the Company or any of its subsidiaries; |
Our Board’s Primary Responsibilities
| • | Whether any immediate family member of the director is currently, or at any time during the past three years was, an executive officer of the Company or any of its subsidiaries; |
Our Board’s Primary Responsibilities
| • | Whether the director is an employee or any immediate family member of the director is an executive officer of a company that has made payments to, or received payments from, the Company or any of its subsidiaries for property or services in an amount that is in excess of the greater of $1 million, or 2% of such other company’s consolidated fiscal gross revenues in the current year or any of the past three fiscal years; |
Our Board’s Primary Responsibilities
| • | Whether the director is an executive officer of a charitable organization that received contributions from the Company or any of its subsidiaries in the past three years in an amount that exceeds the greater of $1 million, or 2% of the charitable organization’s consolidated gross revenues; |
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
| • | Whether the director or any of the director’s immediate family members is, or has been in the past three years, employed as an executive officer by a company that has or had, during the same period, an executive officer of the Company on its compensation committee; |
Our Board’s Primary Responsibilities
| • | Whether the director or any of the director’s immediate family members is, or has been in the past three years, a partner or employee of the Company’s independent registered public accounting firm; and |
Our Board’s Primary Responsibilities
| • | Whether the director or any of the director’s immediate family members accepted any payment from the Company or any of its subsidiaries in excess of $120,000 during the current fiscal year or any of the past three fiscal years, other than compensation for Board or Committees service and pension or other forms of deferred compensation for prior service. |
Our Board’s Primary Responsibilities
Mr. Schottenstein is not independent because he is an executive officer of the Company. See “Related Party Transactions” for information regarding our policy on related party transactions and transactions with affiliates of Mr. Schottenstein, who is our sole employee director. Board Leadership Structure We believe that the Company’s current leadership structure with a combined Executive Chairman and Chief Executive Officer (held by Mr. Schottenstein), balanced by a strong Lead Independent Director (appointed annually by the independent directors), and Committees composed entirely of independent directors deliver the best results for our business. Having Mr. Schottenstein in this combined position provides unified leadership and direction to the Company and valuable insight to the Board. His duties include presiding over meetings of the Board, setting meeting agendas and schedules of the Board in collaboration with the Lead Independent Director, determining whether there are major risks upon which the Board should focus at meetings, and providing strategic and business awareness and guidance to the Board. Our Board believes that the current Board composition, along with an emphasis on Board independence, provides effective independent oversight of management. Mr. Spiegel served as our Lead Independent Director for Fiscal 2024. Our Corporate Governance Guidelines establish robust and well-defined duties for our Lead Independent Director. Our Board’s support of the current leadership structure is premised on these duties being transparently disclosed, comprehensive in nature, and actively exercised. The Lead Independent Director is responsible for:
Our Board’s Primary Responsibilities
| • | Presiding over the meetings of independent directors; |
Our Board’s Primary Responsibilities
| • | Serving as a liaison between the Executive Chair and independent directors; |
Our Board’s Primary Responsibilities
| • | Having input on information provided to the Board; |
Our Board’s Primary Responsibilities
| • | Collaborating with the Executive Chair and providing material input on meeting agendas for the Board; and |
Our Board’s Primary Responsibilities
| • | Approving meeting schedules to ensure that there is sufficient time for discussion of all agenda items. |
Our Board’s Primary Responsibilities
The Lead Independent Director also has the authority to call meetings of the independent directors, and, if requested by major stockholders, is available, when appropriate, for consultation and direct communication with our stockholders. The Lead Independent Director also meets regularly with members of management across the Company between Board and Committee meetings. We believe that this leadership structure provides our Board with the greatest depth of leadership and experience, while also ensuring independent oversight of the Company. Board Practices Meetings of Independent Directors The Board’s policy is to have the independent directors meet separately in executive sessions in connection with each regularly scheduled Board meeting (at least four times annually). During each meeting of the independent directors, the Lead Independent Director presides and leads the discussion. The independent directors of the Board also meet more frequently in between regularly scheduled quarterly meetings, as needed. Board Evaluation Process Our Board continually seeks to improve its performance. In addition to our annual formal evaluation process discussed below, our Lead Independent Director has regular one-on-one discussions with our directors and conveys their feedback on an ongoing basis. Separately, our executive officers, General Counsel and Corporate Secretary each routinely communicate with directors to obtain real-time feedback.
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Our Nominating Committee oversees the formal annual evaluation process of the effectiveness of our Board and its standing Committees. As part of the Board’s self-assessment process, directors consider various topics related to Board composition, structure, effectiveness, and responsibilities, as well as the overall mix of director skills, experience, and backgrounds. Conducting a robust annual evaluation process allows the Board to assess its performance and practices and identify areas for improvement. Below is a summary of our Board evaluation process:
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Director Education/Orientation Our Board believes that director education is vital to the ability of directors to fulfill their roles and supports Board members in their continuous learning. The Board encourages directors to participate annually in external continuing director education programs, and we reimburse directors for their expenses associated with this participation. Recent examples of our directors pursuing additional director certifications and attending continuing education programs include: in 2024, Mr. Sable received the Harvard Business School: Corporate Director certificate and attended the Harvard Business School: Advanced Corporate Director program, and Ms. Page attended the Corporate Directors Exchange program; and in 2023, Ms. Henretta received the Competent Board ESG Certification Program Certificate, Ms. Chandrasekaran received the NACD cybersecurity oversight CERT certification and Mr. Sable participated in the Harvard Business School: Marking Corporate Boards More Effective program. Our directors also attend professional development forums and industry-leading conferences convened by the NACD, National Retail Federation, external accounting firms, and retail/brand organizations focused on topics that are relevant to their duties as a director. In total, our directors completed over 200 hours of continuing education during Fiscal 2024 including sessions sponsored by the Company and third-party programs. Continuing director education is provided during Board meetings and other Board discussions as part of the formal meetings and as stand-alone information sessions outside of meetings, including a two-day offsite best practices conference with other publicly traded companies. Throughout Fiscal 2024, our Board participated in roundtable discussions with our external advisors and learning opportunities with management on various topics including:
Our Board’s Primary Responsibilities
| • Governance matters • Executive compensation • Stockholder engagement • Macroeconomic and political matters | • Industry- and Company- specific regulatory developments • Cybersecurity | • Artificial intelligence • Crisis management • Workplace culture |
Our Board’s Primary Responsibilities
All new directors also participate in our director orientation program during their first six months on our Board. The Board believes that it is important for each new director to understand our Company, the specialty retail industry, and his or her duties as a director. We provide this initial information through a combination of reference materials, formal meetings with business leaders and tours of our facilities/store locations. The orientation program is designed to familiarize new directors with the Company’s businesses, strategies and challenges. We believe that this onboarding approach over the first six months of Board service, coupled with participation in regular Board and Committee meetings, provides new directors with a strong foundation in our Company’s businesses, connects directors with members of management with whom they will interact and oversee, and accelerates their effectiveness to engage fully in Board deliberations.
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Board Committees The Board has a standing Audit Committee, a standing Compensation Committee and a standing Nominating Committee. These Committees are governed by written charters, which were approved by the Board and are available on our Investor website at investors.ae.com. The following sets forth Committee memberships as of the date of this Proxy Statement.
Our Board’s Primary Responsibilities
| Director | Audit Committee | Compensation Committee | Nominating Committee | | Jay L. Schottenstein, Executive Chairman of the Board and Chief Executive Officer | — | — | — | | Sujatha Chandrasekaran | | | | | Deborah A. Henretta | | | | | Cary D. McMillan | | | | | Janice E. Page | | | | | David M. Sable | | | | | Noel J. Spiegel, Lead Independent Director | | | |
Our Board’s Primary Responsibilities
| | = Member | | = Committee Chair | | = Audit Committee Financial Expert |
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
| Board Committee Responsibilities | | | | | | Responsibilities | Committee Members | Meetings in Fiscal 2024 | | AUDIT COMMITTEE | The primary function of the Audit Committee is to assist the Board with oversight of: • the integrity of the financial statements; • the qualifications, performance and independence of the Company’s independent registered public accounting firm; • the performance of the internal audit function; • our compliance with regulatory and legal requirements, including the financial reporting and disclosure process; • the performance of the Company’s ethics and compliance function; and • the assessment of key financial and certain other risks to the Company. The Audit Committee also reviews, approves, and monitors the terms of related party transactions, as required, in accordance with the policy developed and approved by the Audit Committee. The Board has determined that each member of the Audit Committee meets all applicable independence and financial literacy requirements under the NYSE listing standards and applicable SEC rules. | Sujatha Chandrasekaran Deborah A. Henretta * Cary D. McMillan * Janice E. Page * David M. Sable Noel J. Spiegel (Chair)* * Audit Committee financial experts | 20 | | COMPENSATION COMMITTEE | The primary function of the Compensation Committee is to aid the Board in meeting its responsibilities with regard to oversight and determination of executive compensation. Among other matters, the Compensation Committee: • reviews, recommends, and approves salaries and other compensation of executive officers; • administers our stock award and incentive plans (including reviewing, recommending, and approving stock award grants to executive officers); and • reviews and makes recommendations to the Board regarding director compensation. The Compensation Committee has the authority to retain a compensation consultant after taking into consideration all factors relevant to the adviser’s independence from management, including those specified in Section 303A.05(c) of the NYSE Listed Company Manual. The Compensation Committee also has the authority to delegate its authority to subcommittees, including subcommittees consisting solely of one or more persons, other Board members, and/or officers. Additionally, the Compensation Committee may delegate to the CEO the authority to review and grant equity awards to employees who are not executive officers. All members of the Compensation Committee are independent under applicable NYSE listing standards and qualify as “non-employee” directors within the meaning of Rule 16b-3 under the Exchange Act. | Sujatha Chandrasekaran Deborah A. Henretta Cary D. McMillan (Chair) Janice E. Page David M. Sable Noel J. Spiegel | 7 |
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
| Board Committee Responsibilities | | | | | | Responsibilities | Committee Members | Meetings in Fiscal 2024 | | NOMINATING COMMITTEE | The function of the Nominating Committee is to aid the Board in meeting its responsibilities with regard to: • the organization and operation of the Board; • selection of nominees for election to the Board; • evaluation of Board procedures and performance; • executive succession planning and leadership development; and • social responsibility, environmental sustainability, and other corporate governance matters. The Nominating Committee developed and reviews annually our Corporate Governance Guidelines, which were adopted by the Board and are available under the “Corporate Governance” section of our website at investors.ae.com. All members of the Nominating Committee are independent under applicable NYSE listing standards. | Sujatha Chandrasekaran Deborah A. Henretta Cary D. McMillan Janice E. Page (Chair) David M. Sable Noel J. Spiegel | 7 |
Our Board’s Primary Responsibilities
Communications with the Board The Board provides a process for stockholders and other interested parties to send communications to the Board, the Lead Independent Director, the independent directors as a group, or individual directors as described on our Investors website at investors.ae.com. Interested parties wishing to communicate with the Board may send an email to boardofdirectors@ae.com or write to American Eagle Outfitters, Inc. at our principal executive offices located at 77 Hot Metal Street, Pittsburgh, PA 15203, c/o the Corporate Secretary. Communications intended for a specific director or group of directors (such as the Lead Independent Director or independent directors) should be addressed to his, her or their attention c/o the Corporate Secretary at this address. Communications are provided directly to the applicable director or directors following receipt of the communications (other than spam, junk mail, mass mailings, solicitations, resumes, job inquiries, or other matters unrelated to the Company). Director Meetings and Attendance As discussed above, the expectations and responsibilities of the Board continued to evolve during Fiscal 2024, including their instrumental involvement in the Company’s Powering Profitable Growth strategy. During Fiscal 2024, the Board held five meetings and the Committees of the Board held a total of 34 meetings. Each director attended 75% or more of the aggregate of all meetings of the Board and the Committees on which he or she served during Fiscal 2024. It is our expectation, but not a requirement, that all current directors attend the Annual Meeting of Stockholders. All then-serving members of the Board virtually attended our 2024 Annual Meeting.
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Stockholder Engagement We value regular dialogue with all our stakeholders. The Company has an extensive, year-round stockholder engagement program led by management and overseen by the Board. Through this program, management addresses questions and concerns, provides perspective on the Company strategy and business performance, discusses details of the Company’s policies and practices and seeks stockholder feedback.
Our Board’s Primary Responsibilities
| WHO WE ENGAGE | HOW WE ENGAGE | WHO IS INVOLVED | TOPICS OF ENGAGEMENT | | We engage with a wide range of constituents, including: • Institutional stockholders • Research analysts • Proxy advisory firms • Sustainability rating firms • Regulators and legislators | We pursue multiple avenues for engagement, including: • Quarterly investor calls and investor-led conferences and presentations • Company-hosted investor meetings, both in-person and virtual • Annual Meeting of Stockholders • Quarterly and annual reporting and disclosures | • Executive leadership team • Investor Relations team • Independent directors | Our interactions cover a broad range of topics including: • Business performance and execution • Long-term strategic initiatives to drive growth and stockholder returns • Executive compensation and sustainability • Company culture |
Our Board’s Primary Responsibilities
In Fiscal 2024, the Company continued to have extensive engagement with our stockholders and met with approximately 51% of our top 100 stockholders, who collectively owned approximately 53% of the total shares outstanding as of February 1, 2025. In addition to regular engagement with our stockholders, we also participated in a number of conferences, which are included in the list of our engagement highlights below.
Our Board’s Primary Responsibilities
| MARCH | APRIL | MAY | JUNE | | | • Fourth Quarter 2024 Earnings & Long Term Strategy Meeting • Publication of Fiscal 2023 Form 10-K • Bank of America Consumer & Retail Conference • Citi Global Consumer Conference • Shoptalk Conference | • Proxy Advisory Firm Outreach • Publication of 2024 Proxy Statement • JP Morgan Retail Roundup Conference • London Non-Deal Roadshow hosted by Barclays • World Retail Congress | • First Quarter 2024 Earnings | • Cowen Future of the Consumer Conference • Canada Non-Deal Roadshow hosted by UBS • Jefferies Consumer Conference • Annual Meeting of Stockholders | | | AUGUST | SEPTEMBER | OCTOBER | DECEMBER | JANUARY | | • Second Quarter 2024 Earnings | • NYSE Opening Bell Ceremony • Wells Fargo Consumer Conference • Product Showcase Event hosted by JP Morgan | • Virtual Non-Deal Roadshow hosted by Telsey Advisory Group | • Third Quarter 2024 Earnings • Store Tour with Prospective Stockholder | • ICR 2025 Conference • Independent Director conversations with Top Stockholder |
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Building a Better World at AEO As we focus on growing our brands and generating stockholder returns, our corporate strategy and culture are equally aligned with our business-specific sustainability and corporate social responsibility initiatives. Our key areas of focus are prioritized by what matters most to our business and our stakeholders, including our customers, associates, vendors, investors and regulators. Unless otherwise stated, the information and data presented in this section primarily covers Fiscal 2024.
Our Board’s Primary Responsibilities
| FOCUS AREA | STATUS | | Furthering Our Water Leadership Program | The manufacturing of jeans is a water-intensive process and we are committed to improving efficiency and ensuring factory partners are dedicated to water conservation. The factories we use have reduced freshwater intensity by 39% (since 2017), minimizing the amount of water used to make each AE jean by 14 gallons. 100% of eligible denim laundries recycle water back into production, with a total of 73% of water recycled across all factories. | | Positively Impacting Our Communities | We continue to place a high priority on giving back in our communities through associate volunteerism and supporting organizations that focus on mental health and empowering youth. • AEO, our corporate foundations and our customers contributed an aggregate of nearly $10.7 million in monetary and in-kind donations to communities in need across the globe. • The Aerie Real Foundation celebrated its second anniversary and surpassed $2.3 million in grant making since its inception. To date, the foundation has positively impacted more than 220,000 people. • The AEO Better World Foundation distributed $1.7 million in grassroots funding throughout the U.S. and Canada, the most in its history. • The AE Foundation was founded and issued $618,000 in signature and community grants in its first three months. • AEO associates volunteered more than 14,000 hours in local communities, putting us on track to surpass our goal of 100,000 volunteer hours by 2030. | | Global Supply Chain | As regulatory and due diligence requirements increase, it is critical that we work with suppliers to ensure that they operate safely and ethically and also treat their workforce fairly and equitably. In addition to quality assurance, we assess risks for suppliers who are manufacturing AEO products and conduct on-site audits as appropriate. | | Culture | Our REAL culture is inclusive, optimistic, and empowering and celebrates self-expression. Our values are at the center of every decision, product and interaction. This means aiming to ensure that all people are respected and feel that being their authentic selves will not be a barrier to personal or professional fulfillment and growth. Our mission is to achieve sustainable progress in the pillars of hiring, community and development through strategic, data-supported and people-centric action. |
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Related Party Transactions Our Board has adopted a Related Party Transaction Policy (the “Policy”) to allow us to identify, document, and properly disclose related party transactions. The Policy applies to our directors and executive officers, as well as all associates who have authority to enter into commitments on behalf of the Company. Under the Policy, a related party transaction is any transaction to which we or any of our subsidiaries is a participant and in which a related party has a direct or indirect material interest. Examples of transactions include the purchase or sale of goods, the provision of services, the rental of property, or the licensing of intellectual property rights. Additionally, the following constitute related party transactions: (1) transactions where a related party or a member of such related party’s immediate family is a supplier of goods or services, owns or is employed by a business that supplies us; (2) the employment of a member of such related party’s immediate family by us; or (3) an applicable related party’s service on the board of directors of a business that supplies goods or services to us. Certain related party transactions must be approved in advance by the Audit Committee if they involve a significant stockholder, director, or executive officer. All other related party transactions must be disclosed in writing to, and approved in advance by, our General Counsel and our Chief Financial Officer. Each quarter, each individual covered by the Policy is required to certify that any related party transaction has been fully and accurately disclosed in our filings with the SEC. In the ordinary course of business, we have entered into agreements with affiliates of Jay L. Schottenstein, our Executive Chairman of the Board and Chief Executive Officer. We believe that each of these agreements is on terms at least as favorable to us as could be obtained in an arm’s-length transaction with an unaffiliated third party. The material terms of these transactions are described below. In each case, the transaction was approved or ratified by the Audit Committee in accordance with the Policy. Leases During Fiscal 2016, we entered into a store lease for an AE flagship store in Las Vegas with SG Island Plaza LLC (“SG Island Plaza”), an entity in which an affiliate of Mr. Schottenstein has a 25% interest. In April 2022, the Company entered into an agreement with the landlord to vacate the store and cancel the lease. As part of this agreement, during Fiscal 2024, the Company paid the landlord an ongoing rent guarantee of $0.9 million representing the difference between the rent that would have been payable to the landlord had the lease not been surrendered and the amount collected by the landlord from the succeeding tenant. The Company may incur additional rent guarantee expense in the future which is payable to the landlord through the end of the initial lease term (September 2027). In April 2018, we entered into a store lease for an Aerie store in Las Vegas with SG Island Plaza. Pursuant to that lease, we paid rent and other expenses of approximately $2 million during Fiscal 2024. In addition to these charges, we also may incur an annual payment equal to a percentage of the applicable store’s gross sales in excess of specified thresholds. The Company did not incur any such percentage rent payments related to this lease in Fiscal 2024. The lease expires in January 2029. During Fiscal 2020, we entered into leases for two open-air lifestyle stores with wholly owned subsidiaries of Schottenstein Realty LLC, an affiliate of Mr. Schottenstein. Pursuant to the leases, we incur rent equal to 5% of the applicable store’s gross sales plus other expenses. We paid rent and other expenses of approximately $0.5 million during Fiscal 2024. The leases have terms expiring in January 2026 and each has a renewal option. In May 2023, we entered into a store lease for a relocation of an AE store with a wholly owned subsidiary of Schottenstein Realty LLC, an affiliate of Mr. Schottenstein. Pursuant to the lease, we paid rent and other expenses of approximately $127,000 during Fiscal 2024. In addition to these charges, we also may incur an annual payment equal to a percentage of the applicable store’s gross sales in excess of specified thresholds. The Company did not incur any such percentage rent payments related to this lease in Fiscal 2024. The lease expires in May 2033. Other Agreements The Company has an agreement with Retail Entertainment Design, LLC (“R.E.D.”) for in-store music program services. A majority of R.E.D. is owned by Jubilee-RED LLC, which is indirectly owned by trusts for which Mr. Schottenstein serves as trustee. Mr. Schottenstein does not receive any remuneration for serving as trustee of the trusts. Payments by the Company to R.E.D. during Fiscal 2024 under the agreement totaled approximately $0.8 million.
Our Board’s Primary Responsibilities
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Our Board’s Primary Responsibilities
Director Compensation AEO strives to maintain a director compensation program that aligns our non-employee directors’ interests with the interests of our stockholders and to provide market-competitive compensation commensurate with the work required to serve on our Board. The Compensation Committee is charged with reviewing and making recommendations to the Board regarding director compensation. In making its recommendations, the Compensation Committee considers the overall size of the Board, the significant time committed by each of our directors to the performance of their duties, as well as peer data and input from the Compensation Committee’s independent compensation consultant, FW Cook. The Company’s director compensation program primarily consists of cash fees and a quarterly grant of fully-vested shares. In addition, directors may participate in the AEO Foundation Matching Gifts Program for eligible charitable organizations. The maximum matching gift amount available on behalf of each director is $5,000 per calendar year. We also pay attorneys’ fees related to the preparation and filing of director stock ownership forms with the SEC. We reimburse reasonable travel expenses to attend Board and Committee meetings and director continuing education expenses. Mr. Schottenstein, as CEO of the Company, does not receive additional compensation for his service as a director. The Compensation Committee periodically engages FW Cook to conduct comprehensive reviews and competitive assessments of the Company’s non-employee director compensation program to ensure that it remains competitive and that the structure is aligned with corporate governance best practices. The Compensation Committee strives to maintain total compensation alignment with total director compensation at peer companies while recognizing the time intensity of service on our Board because of the smaller than typical number of directors. There were no changes to the director compensation program during Fiscal 2024. The table below sets forth the compensation for non-employee directors during Fiscal 2024.
Our Board’s Primary Responsibilities
| Fiscal 2024 Director Compensation(1) | | | | | | | Fees Earned or Paid in Cash(2) | Stock Awards(3) | All Other Compensation(4) | Total | | Sujatha Chandrasekaran | $160,000 | $200,000 | $5,000 | $365,000 | | Deborah A. Henretta | $160,000 | $200,000 | $— | $360,000 | | Cary D. McMillan | $190,000 | $200,000 | $2,500 | $392,500 | | Janice E. Page | $185,750 | $200,000 | $5,000 | $390,750 | | Stephanie L. Pugliese(5) | $98,320 | $133,300 | $27,080 | $258,700 | | David M. Sable | $160,000 | $200,000 | $5,000 | $365,000 | | Noel J. Spiegel | $270,000 | $200,000 | $5,000 | $475,000 |
OUR EXECUTIVE COMPENSATION PROGRAM
OUR EXECUTIVE COMPENSATION PROGRAM Fiscal 2024 Goal-Setting Process Goal-Setting: We are committed to setting incentive goals that are designed to deliver strong financial performance and returns to our stockholders while also enabling the successful execution of our strategy. In the first quarter of Fiscal 2024, our Compensation Committee set the performance goal for the Annual Incentive Plan (“AIP”), measured on Earnings before Interest and Taxes (“EBIT”), informed by our financial results in Fiscal 2023, impressions about the macro environment, and internal expectations for performance and profitability. EBIT is a non-GAAP or adjusted measure, and when used in this CD&A represents net income, as reported in our consolidated financial statements, before interest expense and income taxes and excludes any asset impairment and restructuring charges, as determined by the Compensation Committee. See Appendix A of this Proxy Statement for additional detail on and reconciliations of adjusted results and other important information regarding the use of non-GAAP or adjusted measures. Role of Our Compensation Committee: The Board has delegated authority to the Compensation Committee to develop and approve the overall compensation program for our NEOs, including the authority to establish and award annual base salaries, annual incentive bonuses, and long-term incentive awards pursuant to our stockholder-approved incentive plan. Furthermore, the Compensation Committee reviews and approves changes to our compensation peer group, as appropriate. In making its decisions, the Compensation Committee takes
OUR EXECUTIVE COMPENSATION PROGRAM
Compensation Benchmarking In determining NEO compensation, the Compensation Committee reviews and considers the compensation practices of comparable companies. The Compensation Committee evaluates three key factors in choosing the companies that compose our peer group:
OUR EXECUTIVE COMPENSATION PROGRAM
Selection criteria also include a review of those companies listed as our peers by proxy advisory firms. We evaluate our peer group on an annual basis and propose changes when appropriate. For Fiscal 2024, our Peer Group consisted of 16 companies and was the same as the Peer Group used in Fiscal 2023, except with respect to the removal of Chico’s FAS., Inc as it ceased to be a public company. Peer Group data is supplemented as needed with additional data from various retail and general industry market surveys, as adjusted to reflect our revenue scope. For Fiscal 2025, the peer group has been updated to remove Express, Inc. and add Columbia Sportswear (COLM) and VF Corporation (VFC) which will result in 17 companies. How We Pay Our Executives and Why: Elements of Annual Compensation Our executive annual compensation program includes fixed components (base salary, benefits, and limited executive perquisites) and variable components (annual incentive bonus and long-term incentive awards), with the most weight generally placed on the variable, or “at risk,” components. For Fiscal 2024, a significant majority of our NEOs’ target annual direct compensation, which includes base salary, target annual incentive bonus, and a long-term incentive award, was weighted toward at-risk or variable compensation, as shown by the charts below.
OUR EXECUTIVE COMPENSATION PROGRAM
| • | balanced to provide a mix of cash and long-term incentive awards; and |
OUR EXECUTIVE COMPENSATION PROGRAM
| • | focused on both annual and long-term performance to ensure that NEOs are held accountable and rewarded for achievement of annual and longer-term financial and strategic objectives that lead to sustained stockholder value measured on both absolute and relative bases. |
OUR EXECUTIVE COMPENSATION PROGRAM
| Element of Compensation | Form and Objective | Fiscal 2024 Information | Alignment to Strategic Plan | | Base Salary | • Delivered in cash. • Provides a baseline compensation level that delivers a predictable level income to each NEO and reflects his or her job responsibilities, experience, skill set, and contribution to the Company. | • There were no base salary increases in Fiscal 2024. | • Base salaries enable us to attract and retain qualified, high-caliber executive officers to lead and implement our strategy. | | Annual Incentive Bonus | • Delivered in cash. • Provides bonus opportunities for NEOs if pre-established performance goals are attained, focusing our NEOs on key annual objectives. | • For Fiscal 2024, the incentive bonus was based 100% upon the Company achieving annual EBIT goals at predetermined threshold, target and stretch performance levels. • Actual performance resulted in a payout at 110% of target. | • Annually, the Compensation Committee establishes performance metrics and goals that align with our strategic plan. • The Fiscal 2024 annual incentive bonus structure funded 100% based on quantitative financial goals. | | Annual Long-Term Incentive Awards | • Delivered in PSUs, RSUs, and stock options. • Aligns our NEOs’ financial interests closely with those of our stockholders. • Links compensation to the achievement of multi-year financial or RTSR goals. | • PSUs represented 50% of the annual target grant values for Fiscal 2024 equity awards. These PSUs vest between threshold and stretch level only to the extent that the pre-established, three-year performance goals are met. If performance falls below the threshold, the award is forfeited in full. For Fiscal 2024, the PSUs are measured on RTSR performance. The three-year performance period for the 2022 PSU awards that was completed at the end of Fiscal 2024 vested at 85% of target. • In Fiscal 2024, stock options represented 30% of the annual equity grant target value. These stock options vest ratably over three years from the grant date based on continued service and provide compensation only to the extent that our share price appreciates. • RSUs represented 20% of the annual equity grant target value for Fiscal 2024 equity awards. These RSUs vest ratably over three years from the grant date based on continued service. | • Aligns NEO compensation with our longer-term performance objectives and changes in stockholder value over time. |
OUR EXECUTIVE COMPENSATION PROGRAM
Fiscal 2024 Annual Incentive Bonus Our NEOs are eligible for annual incentive bonuses, the achievement of which is based upon the Company meeting pre-established performance goals. Consistent with Fiscal 2023, 100% of the Fiscal 2024 annual incentive bonuses awarded to our NEOs pursuant to the AIP were based upon the achievement of annual EBIT goals.
EBIT Goal
EBIT Goal Bonus Opportunity EBIT was chosen as the sole performance measure as it reflects both sales performance and expense management initiatives, is controllable by the NEOs, and directly links the Company’s long-term growth with stockholder value. EBIT represents net income, as reported in our consolidated financial statements, before interest expense and income taxes and excludes any asset impairment and restructuring charges, as determined by the Compensation Committee. The Compensation Committee established EBIT performance goals, with threshold, target, and stretch level goals linked to payouts of 25%, 100%, and 200% of target bonus amounts, respectively. The goals were designed to be challenging in context of the need to generate both sales and margin improvement from trends at the time the goals were set, as well as expense reduction.
Setting Target Bonus Opportunities
Setting Target Bonus Opportunities Early in the fiscal year, the Compensation Committee establishes each NEO’s annual incentive bonus opportunity as a percentage of the NEO’s base salary. Each NEO’s target annual incentive bonus opportunity reflects his or her role and responsibilities as well as market competitiveness. For Fiscal 2024, there were no increases to the target bonus percentages for the NEOs.
Setting Target Bonus Opportunities
| 50 | | | |
Setting Target Bonus Opportunities
Target bonus award opportunities typically constitute approximately 24% of each NEO’s target compensation for the Fiscal year. During Fiscal 2024, the target bonus award opportunities for the NEOs were set as follows:
Setting Target Bonus Opportunities
| Executive Officer | Fiscal 2024 Target No increase from Fiscal 2023 (as a Percentage of Base Salary) | | Jay Schottenstein, CEO | 175% | | Michael Mathias, CFO | 100% | | Jennifer Foyle, President | 150% | | Marisa Baldwin, CHRO | 80% |
Fiscal 2024 EBIT Performance
Fiscal 2024 EBIT Performance EBIT performance of $452 million for Fiscal 2024 was achieved above our target level of $445 million; accordingly, a 110% bonus payout was earned and paid under the AIP. The EBIT threshold, target, and stretch goals are set forth below. Based on the above performance results, the NEOs received the below Fiscal 2024 annual incentive payouts.
Fiscal 2024 EBIT Performance
| Executive Officer | Fiscal 2024 Target Annual Incentive Awards | Fiscal 2024 Actual (1) Annual Incentive Award Payouts | | Jay Schottenstein, CEO | $3,062,500 | $3,368,750 | | Michael Mathias, CFO | $900,000 | $990,000 | | Jennifer Foyle, President | $2,250,000 | $2,475,000 | | Marisa Baldwin, CHRO | $500,000 | $550,000 |
Fiscal 2024 EBIT Performance
| (1) Amount represents a 110% payout based on wages paid during the 52-week fiscal year. |
Overview and Mix of Awards
Overview and Mix of Awards We utilize a combination of time- and performance-based long-term incentive awards, which are granted on an annual basis, to focus management on long-term corporate performance and sustainable earnings growth. The Fiscal 2024 equity blend of our long-term incentive awards was:
Overview and Mix of Awards
| • | PSUs represented 50% (at target) of total long-term equity awards; |
Overview and Mix of Awards
| • | Stock options represented 30% of total long-term equity awards; and |
Overview and Mix of Awards
| • | RSUs represented 20% of total long-term equity awards. |
Fiscal 2024 Long-Term Incentive Award Grants
Fiscal 2024 Long-Term Incentive Award Grants The Compensation Committee established the following Fiscal 2024 target long-term incentive opportunities for each NEO based on his or her overall responsibilities, contributions to the business and market position. With respect to Mr. Schottenstein, the Compensation Committee determined his long-term incentive award grant value within the context of his expertise, sizeable contributions to the success of the business, and overall compensation position relative to peers. The following table summarizes Fiscal 2024 long-term incentive award grants; actual amounts earned for the PSUs, if any, will depend on the Company’s RTSR performance results spanning Fiscal 2024 through Fiscal 2026.
Fiscal 2024 Long-Term Incentive Award Grants
| Executive Officer | Fiscal 2024 Target Long-Term Incentive: PSU Awards | Fiscal 2024 Long-Term Incentive: RSU Awards | Fiscal 2024 Long-Term Incentive: Stock Option Awards | Fiscal 2024 Target Total Long-Term Incentive Award | | Jay Schottenstein, CEO | $4,750,000 | $1,900,000 | $2,850,000 | $9,500,000 | | Michael Mathias, CFO | $935,000 | $374,000 | $561,000 | $1,870,000 | | Jennifer Foyle, President | $2,445,000 | $978,000 | $1,467,000 | $4,890,000 | | Marisa Baldwin, CHRO | $492,500 | $197,000 | $295,500 | $985,000 |
Fiscal 2024 Long-Term Incentive Award Grants
PSUs The grant of PSUs supports the Compensation Committee’s desire to create a stronger and more visible link between NEO pay and Company performance and further aligns the NEO’s’ interests with those of our stockholders. PSUs represent 50% of the value of the NEOs’ annual long-term incentive award. We determine the number of target PSUs based on the overall dollar grant value of the award divided by the estimated fair value of our common stock utilizing a Monte Carlo simulation on the date of the grant. Dividend equivalents on the PSUs are reinvested in additional units and paid out only to the extent that the associated PSUs vest.
Fiscal 2024 Long-Term Incentive Award Grants
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Fiscal 2024 Long-Term Incentive Award Grants
Annual PSU grants cliff vest, if at all, at the end of a three-year performance period upon achievement of pre-established goals. Consistent with Fiscal 2023, the Compensation Committee selected RTSR, measured against the Company’s Peer Group over a three-year performance period as the performance metric for the Fiscal 2024 PSUs. The selection of a relative performance metric ensures that the recipients will be measured against industry performance and encourages a balanced compensation program as the annual incentive bonus and long-term incentive awards are based on multiple metrics, without any overlap. Vesting of the PSUs ranges from 0% of the target amount for below threshold performance, 50% of the target amount at threshold performance, 100% of the target amount at target performance, and 150% of the target amount if we achieve stretch goals. Threshold performance is attained at the 25th percentile of the Peer Group, target is attained at the 50th percentile and stretch is attained at the 75th percentile or higher. If threshold performance is met or exceeded, performance and award payouts will be determined through interpolation. If the Company’s absolute TSR is negative over the three-year period, vesting is capped at target (100%), regardless of performance relative to the Peer Group. Stock Options The grant of stock options supports the Compensation Committee’s philosophy that stock price appreciation should be a significant determinant of the economic return received by our NEOs from equity compensation. Stock options represent 30% of the value of each NEO’s annual long-term incentive award. We determine the number of stock options for each grant based on the overall dollar grant value of the award divided by the estimated fair value of our common stock, utilizing the Black Scholes option pricing model on the grant date. Annual stock option grants have an exercise price per share equal to the fair market value of a share of stock on the grant date and vest ratably over three years from the grant date, subject to continued employment, and provide compensation to NEOs only to the extent that our share price appreciates from grant date to exercise date. RSUs RSUs are subject to time-based vesting and provide a retention incentive for our NEOs and an incentive to increase stockholder value. RSUs represent 20% of the value of NEOs’ annual long-term incentive award. We determine the number of RSUs in each grant based on the overall dollar grant value of the award divided by the closing price per share of our common stock on the grant date. Dividend equivalents on RSUs are reinvested in additional RSUs and paid only to the extent that the associated RSUs vest. RSUs vest with a three-year ratable vesting schedule, subject to continued employment. Fiscal 2022 PSU Payouts In Fiscal 2022, the Compensation Committee granted Messrs. Schottenstein and Mathias and Mss. Foyle and Baldwin PSUs that cliff-vested at the end of a three-year performance period ended February 1, 2025. Payout of the Fiscal 2022 PSUs was subject to the achievement of RTSR, measured against the S&P 1500 Specialty Retail Index. AEO’s RTSR was at the 42nd percentile, resulting in an 85% vesting. Accordingly, this resulted in an 85% payout of Fiscal 2022 PSUs. Based upon the performance discussed above, Messrs. Schottenstein and Mathias, and Mss. Foyle and Baldwin received the following payouts with respect to their Fiscal 2022 PSU awards:
Fiscal 2024 Long-Term Incentive Award Grants
| NEO | Target Fiscal 2022 PSU Award (# of Shares) | Fiscal 2022 PSU Payout (# of Shares)(1) | | Jay Schottenstein, CEO | 198,070 | 179,836 | | Michael Mathias, CFO | 38,090 | 34,584 | | Jennifer Foyle, President | 101,574 | 92,223 | | Marisa Baldwin, CHRO | 16,506 | 14,987 |
Fiscal 2024 Long-Term Incentive Award Grants
| (1) PSU Payout (# of Shares) includes accrued dividends. Pursuant to the terms of the award agreements, participants are eligible to receive dividend equivalents with respect to dividends paid prior to the settlement of the award. The earned shares reported in this table do not include additional shares acquired through the deemed reinvestment of dividend equivalents prior to settlement of the award. The earned shares, including shares acquired through the deemed reinvestment of dividends through February 1, 2025, are reported in the Fiscal 2024 Option Exercises and Stock Vested Table. PSU award recipients receive fractional shares upon settlement; however, for purposes of this table, share numbers have been rounded to the nearest whole share. |
Fiscal 2024 Long-Term Incentive Award Grants
| 2025 Proxy Statement | | | 53 |
COMPANY COMPENSATION POLICIES AND PRACTICES
COMPANY COMPENSATION POLICIES AND PRACTICES Other Practices and Policies Clawback Policy In accordance with the SEC’s and NYSE’s rules, the Company maintains an Incentive Based Compensation Recovery Policy (the “Clawback Policy”). Current executive officers of the Company have agreed in writing to the terms and conditions of the Clawback Policy. Under the Clawback Policy, if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the federal securities laws, the Company will recoup any erroneously awarded incentive-based compensation from the Company’s current and former executive officers. Additionally, the 2023 Stock Plan includes additional award forfeiture provisions that provide for the cancellation or forfeiture of an award (in full or in part) in the event that the award recipient engages in misconduct related to the restatement of financial statements. Benefits and Perquisites NEOs generally are eligible for the same health and welfare plans as other full-time Company employees, including medical, dental, life and disability insurance, and retirement plans. We provide limited perquisites for our NEOs, as set forth in the Summary Compensation Table, which we believe are reasonable and justified by market practice, personal safety and convenience that enhances productivity. For Fiscal 2024, perquisites primarily consist of a security benefit to Mr. Schottenstein and an executive physical program to proactively manage health risks for our executive officers that was utilized by Messrs. Schottenstein and Mses. Foyle and Baldwin during Fiscal 2024. Management Stock Ownership Requirements We have stock ownership requirements to establish a commonality of interest between management and stockholders. Certain members of management are required to own the equivalent value of a multiple of their salary. For Mr. Schottenstein, the multiple is six times and for the other NEOs, the multiple is three times. The requirement can be met through various forms of equity, including personal holdings and equity incentive awards such as restricted stock units. Unearned performance awards and unexercised stock options do not count toward ownership requirement attainment. If an executive officer does not meet his or her ownership requirement, he or she must retain 50% of the after-tax shares acquired through stock sales until the requirement is reached. As of the Record Date of this Proxy Statement, the CEO and the President are in compliance with their requirements. Ms. Baldwin, who was hired in September 2021 and Mr. Mathias who was promoted into an executive officer role in April 2020 are on both on track to meet their respective requirements within a reasonable timeline and are subject to trading restrictions until their respective ownership requirements have been met. Additional information regarding stock ownership requirements can be found on page 73. Change in Control and Other Agreements Our NEOs are entitled to receive consideration upon the termination of the NEOs employment with us under specified circumstances, including termination related to a change in control (“CIC”). These arrangements provide essential protections to the NEO to assist us in attracting and retaining qualified executive officers in a competitive environment. At the same time, we obtain certain agreements that preserve our valuable assets by imposing non-competition and non-solicitation restrictions, confidentiality obligations, and cooperation covenants on our NEOs. Change in Control Provisions The Company has entered into CIC agreements (each, a “CIC Agreement”) with all of our NEOs, with the exception of Mr. Schottenstein, our CEO. The CIC Agreements are designed to motivate the NEOs to continue to work for the best interests of the Company and our stockholders in a potential CIC situation. The CIC Agreements contain “double-trigger” provisions for severance and other benefits. In the event of a CIC, and within 18 months of such event, if a NEO’s employment is terminated by the Company other than for Cause, Disability, or as a result of the NEO’s death, or if the executive terminates his or her employment for Good Reason (each capitalized term as defined in the applicable CIC Agreement), the NEO is entitled to receive:
COMPANY COMPENSATION POLICIES AND PRACTICES
| • | a lump-sum severance payment equal to one and one-half times the NEO’s base salary, annualized for any partial year amount, and annual incentive cash bonus amount, at target; |
COMPANY COMPENSATION POLICIES AND PRACTICES
| • | a prorated amount of the NEO’s then-current annual incentive cash bonus, at target; and |
COMPANY COMPENSATION POLICIES AND PRACTICES
COMPENSATION POLICIES AND PRACTICES AND RISK MANAGEMENT Compensation Risk Assessment Annually, the Compensation Committee, together with management, conducts an analysis to determine whether any risks arising from compensation policies and practices are reasonably likely to have a material adverse effect on the Company in light of our overall business, strategy, and objectives. Management, in concert with the Compensation Committee, reviews and evaluates both cash and equity incentive plans across executive and non-executive employee populations, as well as other compensation-related policies to which our employees are subject. This assessment evaluates both (i) material enterprise risks related to our business that may be exacerbated by compensation policies and practices and (ii) the potential risks arising from attributes in our compensation practices, performance criteria, pay mix, and verification of performance results. Based on this assessment, the Compensation Committee has determined that the risks arising from the Company’s compensation plans and policies are not reasonably likely to have a material adverse effect on the Company. Accordingly, no material adjustments were made to the Company’s compensation policies and practices as a result of its risk profile. The Compensation Committee will continue to monitor the Company’s compensation policies and practices to determine whether its risk management objectives are being met. Insider Trading Policy The Company has adopted the AEO Policy on Insider Trading (the “Insider Trading Policy”) that applies to all associates, officers, directors, and individuals working on behalf of the Company (e.g., consultants and independent contractors) or any of its subsidiaries or affiliates, as well as the Company itself. The Company believes that the Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations with respect to the purchase, sale, and/or other dispositions of the Company’s securities, as well as the applicable rules and regulations of the New York Stock Exchange. A copy of the Insider Trading Policy is filed as Exhibit 19 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025. Prohibition Against Hedging Transactions and Pledging Employees (including our executive officers) and members of the Board are prohibited from engaging in transactions in financial instruments designed to hedge or offset any decrease in the market value of our stock. Our policy prohibits transactions in such instruments as prepaid variable forward contracts, equity swaps, collars or exchange funds, as well as any other hedging instrument. Employees and members of the Board are also prohibited from holding our stock in a margin account as collateral for a margin loan or otherwise pledging our stock as collateral. Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information Although we do not have a formal policy regarding the timing of stock option grants coinciding with the release of material nonpublic information, we do not time the release of material nonpublic information for the purpose of affecting the value of any equity award. Additionally, equity grant recipients do not choose the grant date for their individual stock option grants. The grant date for equity awards to executive officers generally ties to the date of the meeting during which the Compensation Committee approves such awards.
COMPANY COMPENSATION POLICIES AND PRACTICES
| Summary Compensation Table | | | | | | | | | | Name and Principal Position | Fiscal Year(1) | Base Salary | Bonus | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | All Other Compensation(5) | Total | | Jay L. Schottenstein Chief Executive Officer | 2024 | $1,750,000 | — | $6,650,019 | $2,850,005 | $3,368,750 | $361,753 | $14,980,527 | | | 2023 | $1,817,308 | — | $5,810,002 | $2,490,002 | $6,360,577 | $315,330 | $16,793,219 | | | 2022 | $1,750,000 | — | $5,459,994 | $2,340,002 | $— | $226,544 | $9,776,540 | | Michael A. Mathias Chief Financial Officer | 2024 | $900,000 | — | $1,309,020 | $561,004 | $990,000 | $12,938 | $3,772,961 | | | 2023 | $907,692 | — | $1,120,004 | $479,997 | $1,815,384 | $13,962 | $4,337,039 | | | 2022 | $779,808 | — | $1,049,985 | $450,001 | $— | $10,154 | $2,289,948 | | Jennifer M. Foyle President, Executive Creative Officer AE and Aerie | 2024 | $1,500,000 | — | $3,422,980 | $1,467,002 | $2,475,000 | $77,985 | $8,942,967 | | | 2023 | $1,530,769 | — | $2,939,989 | $1,259,999 | $4,592,308 | $51,087 | $10,374,152 | | | 2022 | $1,373,077 | — | $2,799,997 | $1,200,002 | $— | $10,445 | $5,383,521 | | Marisa A. Baldwin Chief Human Resources Officer | 2024 | $625,000 | — | $689,518 | $295,499 | $550,000 | $77,985 | $2,238,002 | | | 2023 | $634,231 | — | $525,006 | $225,001 | $1,014,769 | $49,750 | $2,448,756 | | | 2022 | $557,885 | — | $455,010 | $195,002 | $— | $1,955 | $1,209,852 |
COMPANY COMPENSATION POLICIES AND PRACTICES
| Grants of Plan-Based Awards – Fiscal 2024 | | | | | | | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payout Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Jay L. Schottenstein(1) | — | $765,625 | $3,062,500 | $6,125,000 | — | — | — | — | — | — | — | | (2) | 4/4/2024 | — | — | — | 81,925 | 163,850 | 245,775 | — | — | — | $4,750,012 | | (3) | 4/4/2024 | — | — | — | — | — | — | 77,965 | — | — | $1,900,007 | | (4) | 4/4/2024 | — | — | — | — | — | — | — | 268,615 | $24.37 | $2,850,005 | | Michael A. Mathias(1) | — | $225,000 | $900,000 | $1,800,000 | — | — | — | — | — | — | — | | (2) | 4/4/2024 | — | — | — | 16,127 | 32,253 | 48,380 | — | — | — | $935,014 | | (3) | 4/4/2024 | — | — | — | — | — | — | 15,347 | — | — | $374,006 | | (4) | 4/4/2024 | — | — | — | — | — | — | — | 52,875 | $24.37 | $561,004 | | Jennifer M. Foyle(1) | — | $562,500 | $2,250,000 | $4,500,000 | — | — | — | — | — | — | — | | (2) | 4/4/2024 | — | — | — | 42,170 | 84,339 | 126,509 | — | — | — | $2,444,988 | | (3) | 4/4/2024 | — | — | — | — | — | — | 40,131 | — | — | $977,992 | | (4) | 4/4/2024 | — | — | — | — | — | — | — | 138,266 | $24.37 | $1,467,002 | | Marisa A. Baldwin(1) | — | $125,000 | $500,000 | $1,000,000 | — | — | — | — | — | — | — | | (2) | 4/4/2024 | — | — | — | 8,495 | 16,989 | 25,484 | — | — | — | $492,511 | | (3) | 4/4/2024 | — | — | — | — | — | — | 8,084 | — | — | $197,007 | | (4) | 4/4/2024 | — | — | — | — | — | — | — | 27,851 | $24.37 | $295,499 |
COMPANY COMPENSATION POLICIES AND PRACTICES
| Outstanding Equity Awards at Fiscal 2024 Year – End | | | | | | | | | | | | Option Awards | | | | | Stock Awards(1) | | | | | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexer- cisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Jay L. Schottenstein(2) | 235,526 | — | — | $19.60 | 3/14/25 | — | — | — | — | | (3) | 266,719 | — | — | $21.41 | 3/26/26 | — | — | — | — | | (4) | 347,142 | — | — | $8.62 | 3/26/27 | — | — | — | — | | (5) | 258,000 | — | — | $12.33 | 6/4/27 | — | — | — | — | | (6) | 173,023 | — | — | $32.58 | 4/9/28 | — | — | — | — | | (8) | — | — | — | — | — | 211,571 | $3,414,757 | — | — | | (9) | — | — | — | — | — | 32,220 | $520,031 | — | — | | (10) | 264,565 | 132,283 | — | $17.24 | 3/30/29 | — | — | — | — | | (11) | — | — | — | — | — | — | — | 296,376 | $4,783,510 | | (12) | — | — | — | — | — | 88,456 | $1,427,686 | — | — | | (13) | 156,309 | 312,618 | — | $13.17 | 3/30/30 | — | — | — | — | | (14) | — | — | — | — | — | — | — | 167,883 | $2,709,626 | | (15) | — | — | — | — | — | 79,884 | $1,289,325 | — | — | | (16) | — | 268,615 | — | $24.37 | 4/4/31 | — | — | — | — | | Michael A. Mathias(5) | 40,471 | — | — | $12.33 | 6/4/27 | — | — | — | — | | (6) | 31,731 | — | — | $32.58 | 4/9/28 | — | — | — | — | | (8) | — | — | — | — | — | 40,686 | $656,678 | — | — | | (9) | — | — | — | — | — | 6,197 | $100,025 | — | — | | (10) | 50,878 | 25,439 | — | $17.24 | 3/30/29 | — | — | — | — | | (11) | — | — | — | — | — | — | — | 57,133 | $922,120 | | (12) | — | — | — | — | — | 17,053 | $275,236 | — | — | | (13) | 30,131 | 60,264 | — | $13.17 | 3/30/30 | — | — | — | — | | (14) | — | — | — | — | — | — | — | 33,047 | $533,376 | | (15) | — | — | — | — | — | 15,725 | $253,797 | — | — | | (16) | — | 52,875 | — | $24.37 | 4/4/31 | — | — | — | — | | Jennifer M. Foyle(2) | 73,032 | — | — | $19.60 | 3/14/25 | — | — | — | — | | (3) | 127,607 | — | — | $21.41 | 3/26/26 | — | — | — | — | | (4) | 86,084 | — | — | $8.62 | 3/26/27 | — | — | — | — | | (5) | 123,435 | — | — | $12.33 | 6/4/27 | — | — | — | — | | (6) | 98,870 | — | — | $32.58 | 4/9/28 | — | — | — | — | | (8) | — | — | — | — | — | 108,498 | $1,751,151 | — | — | | (9) | — | — | — | — | — | 16,522 | $266,673 | — | — | | (10) | 135,674 | 67,838 | | $17.24 | 3/30/29 | | | | | | (11) | — | — | — | — | — | — | — | 149,973 | $2,420,561 | | (12) | — | — | — | — | — | 44,761 | $722,439 | — | — | | (13) | 79,096 | 158,192 | — | $13.17 | 3/30/30 | — | — | — | — | | (14) | — | — | — | — | — | — | — | 86,415 | $1,394,734 | | (15) | — | — | — | — | — | 41,119 | $663,656 | — | — | | (16) | — | 138,266 | — | $24.37 | 4/4/31 | — | — | — | — | | Marisa A. Baldwin(7) | 7,455 | — | — | $27.01 | 9/13/28 | — | — | — | — | | (8) | — | — | — | — | — | 17,631 | $284,566 | — | — | | (9) | — | — | — | — | — | 2,686 | $43,356 | — | — | | (10) | 22,047 | 11,024 | — | $17.24 | 3/30/29 | — | — | — | — | | (11) | — | — | — | — | — | — | — | 26,781 | $432,245 | | (12) | — | — | — | — | — | 7,995 | $129,039 | — | — | | (13) | 14,124 | 28,249 | — | $13.17 | 3/30/30 | — | — | — | — | | (14) | — | — | — | — | — | — | — | 17,407 | $280,951 | | (15) | — | — | — | — | — | 8,283 | $133,687 | — | — | | (16) | — | 27,851 | — | $24.37 | 4/4/31 | — | — | — | — |
COMPANY COMPENSATION POLICIES AND PRACTICES
| Option Exercises and Stock Vested – Fiscal 2024 | | | | | | | Option Awards(1) | | Stock Awards(2) | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Jay L. Schottenstein | 227,937 | $2,198,452 | 170,166 | $4,101,821 | | Michael A. Mathias | — | — | 31,892 | $769,902 | | Jennifer M. Foyle | 20,000 | $247,600 | 92,574 | $2,223,618 | | Marisa A. Baldwin | — | — | 10,623 | $258,585 |
COMPANY COMPENSATION POLICIES AND PRACTICES
| Nonqualified Deferred Compensation |
COMPANY COMPENSATION POLICIES AND PRACTICES
| Pay Versus Performance Table | | | | | | | | | | Fiscal Year | Summary Compensation Table Total for PEO (1) ($) | Compensation Actually Paid to PEO (1)(2)(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs (1) ($) | Average Compensation Actually Paid to Non-PEO NEOs (1)(2)(3) ($) | Value of Initial Fixed $100 Investment based on: (4) | | Net Income (Loss) ($ Millions) (5) | Adjusted Earnings Before Interest and Taxes ($ Millions) (6) | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) | | | | 2024 | $14,980,527 | $3,597,586 | $4,984,643 | $1,942,131 | $125.0 | $153.5 | $329 | $452 | | 2023 | $16,793,219 | $24,307,437 | $5,932,748 | $8,206,623 | $156.8 | $139.7 | $170 | $386 | | 2022 | $9,776,540 | $1,499,742 | $3,080,683 | $726,957 | $115.0 | $119.1 | $125 | $280 | | 2021 | $14,875,447 | $15,274,358 | $5,334,752 | $5,623,793 | $160.4 | $122.0 | $420 | $617 | | 2020 | $14,784,288 | $29,296,913 | $4,920,732 | $9,134,036 | $158.7 | $114.2 | $(209) | $12 |
Proposal 1: Election of Directors
Proposal 1: Election of Directors
Proposal 1: Election of Directors
| NOMINEES: | FOR | AGAINST | ABSTAIN | | (1) Deborah A. Henretta | ☐ | ☐ | ☐ | | (2) Cary D. McMillan | ☐ | ☐ | ☐ |
Proposal 1: Election of Directors
Proposal 2: Ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending January 31, 2026. FOR ☐ AGAINST ☐ ABSTAIN ☐ Proposal 3: Hold an advisory vote on the compensation of our named executive officers. FOR ☐ AGAINST ☐ ABSTAIN ☐
Proposal 1: Election of Directors
| Signatures | | | | 2025 | | Date | | | Signature(s) of Stockholders | | | Title (if applicable) | | | Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as an attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such. | | | Address change/Comments: If you noted any Address Changes and/ or Comments, please mark box. ☐ | |
Proposal 1: Election of Directors
| VIRTUAL CONTROL NUMBER |