DEF 14A of Lovesac Co
Filed Apr 24, 2025 · FY20250001213900-25-035098
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Lovesac’s business and affairs are managed under the direction of our Board of Directors. The number of directors is determined by our Board, subject to the terms of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws (the “Bylaws”). Our Board currently consists of eight members and is authorized to have no less than five members nor more than nine members. Each of our directors serves until the next annual meeting of stockholders and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal. On April 3, 2025, our Board of Directors fixed the number of directors constituting the full Board at seven members, effective at the Annual Meeting.
Board Composition
Board Composition The Nominating and Governance Committee (the “Nominating Committee”) works with the Board to determine the appropriate skills and qualifications necessary for Board membership, taking into consideration the Board’s needs at the time. In seeking qualified candidates for Board membership, the Board will consider a variety of factors including professional experience and other individual qualities and characteristics that contribute to a diverse mix of viewpoints, qualifications and experience represented on the Board.
Required Qualifications for Board Membership
Required Qualifications for Board Membership The Board and Nominating Committee require all directors and director candidates to be of high character and integrity and have the ability to guide our Company based on experience gained in positions as leaders with a high degree of responsibility in the companies with which they are or were affiliated. Each director and director candidate must also ensure that other existing and anticipated future commitments do not interfere with his or her service as a director. In determining whether to recommend a director for re-election, the Nominating Committee also considers the director’s past attendance at meetings, participation in and contributions to the activities of the Board and the Company, tenure and other qualifications set forth in the Corporate Governance Guidelines or developed and approved by the Nominating Committee.
Key Qualifications and Experience for Board Membership
Key Qualifications and Experience for Board Membership The Board has identified key qualifications and experience that are important to be represented on the Board based on the Company’s current business strategy and future business goals. These qualifications are evaluated regularly and updated to adapt to the evolving needs of the Board and the Company. This list is not exhaustive, but rather represents a summary of the key criteria considered by the Board during the nomination and appointment process.
Key Qualifications and Experience for Board Membership
| | Executive Leadership | Experience leading and building high functioning teams, developing interdisciplinary long-range strategic plans, policy development and people management. | | | Business Operations | Experience with day-to-day operational execution of long-range plans and targets, leading sourcing, distribution and transportation strategy, and developing real estate strategy and assessing and negotiating real estate leases. | | | Marketing and Sales | Experience developing and executing digital marketing strategies, managing the customer experience, brand management, developing sales plans and promotions to meet financial targets, and ecommerce. | | | Environmental, Social and Governance | Experience in environmental and sustainability practices, fostering our unique culture and talent programs, and providing accountability and transparency and protecting stockholder interests. |
Key Qualifications and Experience for Board Membership
| | Technology and Security | Experience in safeguarding the generation, transmission and distribution of digital assets, knowledge and experience in the strategic use and governance of information management and information technology | | | Accounting, Finance and Internal Controls | Experience evaluating financial statements and capital structure, overseeing financial reporting, fundraising across debt/equity markets, investor relations, assessing internal controls and regulatory compliance, and risk valuation and risk management oversight. |
Director Nominees
Director Nominees Shawn D. Nelson, Andrew R. Heyer, John Grafer, Sharon M. Leite, Walter F. McLallen, Vineet Mehra and Shirley Romig have been nominated for election as directors to serve until the 2026 Annual Meeting of Stockholders and until their successors are elected and have qualified. Mr. Jack A. Krause notified us on April 3, 2025 that he will retire and not stand for re-election at the Annual Meeting, and his current term will expire at the Annual Meeting. His decision to not stand for re-election was not a result of any disagreements with the Company on any matter relating to the Company’s operations, policies or practices. The Board and Company thank Mr. Krause for his valuable service and many contributions over his tenure. All our nominees are current directors. Each nominee has consented to being named in the Proxy Statement and has agreed to serve as a member of the Board, if elected. If any of the nominees is unable to serve as a director, it is intended that the proxy will be voted for the election of such substitute nominee, if any, as shall be designated by the Board. The Board has no reason to believe that any of the nominees named below will be unable to serve if elected. The Board believes that each nominee has valuable skills and experiences that provide us with the knowledge, judgment and strategic vision necessary to provide effective oversight. The biographies below reflect the particular experience, qualifications and skills that led the Board to conclude that each director nominee should serve on the Board. There are no family relationships between and among any of our executive officers or directors. There are no arrangements or understandings between any of our executive officers or directors and any other person pursuant to which any of them are elected as an officer or director.
Director Nominees
| | Shawn D. Nelson | | | | Age: 48 Director since: 2017 Independent: No Fiscal 25 Committees: None | Skills and Qualifications: We believe Mr. Nelson is qualified to serve on our Board because of his leadership experience as our founder, his extensive knowledge of the Company and his service as our Chief Executive Officer. |
Director Nominees
Shawn Nelson founded Lovesac in 1998 and is currently serving as our Chief Executive Officer and as a member of the Board. Mr. Nelson is the lead designer of the Company’s patented products and directly oversees design, product development, public relations, and investor relations. In 2005, Mr. Nelson won Richard Branson’s “The Rebel Billionaire” on Fox and continues to participate in ongoing TV appearances. Mr. Nelson has a master’s degree in Strategic Design and Management and is a former graduate-level instructor at Parsons, The New School for Design in New York City. Mr. Nelson is also fluent in Chinese with a B.A. in Mandarin from the University of Utah.
Director Nominees
| | Andrew R. Heyer | | | | Age: 67 Director since: 2017 Independent: Yes Fiscal 25 Committee: Nominating and Governance Designation: Chairman of the Board | Skills and Qualifications: We believe Mr. Heyer is qualified to serve on our Board because of his extensive experience in private equity investing in the consumer goods industry and his experience on other private and public company boards. |
Director Nominees
Andrew R. Heyer is the Chair of our Board. Mr. Heyer is a finance professional with over 35 years of experience investing in the consumer and consumer-related products and services industries. He has deployed in excess of $1 billion of capital over that time frame and has guided several public and private companies as a member of their boards of directors. Mr. Heyer is the Chief Executive Officer and Founder of Mistral Equity Partners, a private equity fund manager founded in 2007 that invests in the consumer industry. Prior to founding Mistral, Mr. Heyer served as a Founding Managing Partner of Trimaran Capital Partners. Until 1995, Mr. Heyer was a vice chairman of CIBC World Markets Corp. and a co-head of the CIBC Argosy Merchant Banking Funds. Prior to joining CIBC World Markets Corp., Mr. Heyer was a Founder and Managing Director of The Argosy Group L.P. Prior to joining Argosy, Mr. Heyer was a Managing Director at Drexel Burnham Lambert Incorporated and, prior to that, he worked at Shearson/American Express. Mr. Heyer received his B.Sc. and M.B.A. from the Wharton School of the University of Pennsylvania, graduating magna cum laude. Mr. Heyer currently serves as a member of the Executive Committee and Board of Trustees of the University of Pennsylvania and the University of Pennsylvania Health System. Other Public Company Directorships: ■ Current: OneSpaWorld Holdings Limited (since 2019); Arko Corp. (since 2020); and Biote Inc. (since 2022). ■ Previous (During Past 5 Years): XpresSpa Group, Inc. (2016 – 2020); Haymaker Acquisition Corp. III (2019 – 2022); AF Acquisition Corp. (2021 – 2023); Tastemaker Acquisition Corp. (2021 – 2023); and Haymaker Acquisition Corp. 4 (2023 – 2024).
Director Nominees
| | John Grafer | | | | Age: 55 Director since: 2017 Independent: Yes Fiscal 25 Committees: • Compensation Committee | Skills and Qualifications: We believe Mr. Grafer is qualified to serve on our Board because of his substantial experience in private equity investing and investment banking, his accounting expertise and his experience on other company boards. |
Director Nominees
John Grafer is a member of our Board. Mr. Grafer is a partner at Satori Capital, a multi-strategy alternative investment firm founded on the principles of conscious capitalism. Mr. Grafer is a member of Satori’s investment committee, a board member of Accelerated Learning Solutions, Hobo, Formulife, and Zorch International, a former board observer for Aspen Heights, and a former board member of SunTree Snack Foods, California Products Corporation, Longhorn Health Solutions, and FWT. Prior to joining Satori in 2009, Mr. Grafer was Senior Vice President at Giuliani Partners, a principal investment and consulting firm founded by former New York City Mayor Rudolph W. Giuliani. Prior to joining Giuliani Partners in 2003, Mr. Grafer was a member of the mergers and acquisitions group at Credit Suisse First Boston, a member of the proprietary trading group at J.P. Morgan Chase, and a team member at Ernst & Young, where he earned his C.P.A. Mr. Grafer has also assisted a family office with early-stage investments in sustainably managed companies, including Honest Tea. Mr. Grafer is an elected member of the board of directors and executive committee of Americans For Fair Taxation® (FairTax®) and was formerly a first-round judge for the McCloskey Business Plan competition at the University of Notre Dame. Mr. Grafer received a B.B.A. from the University of Notre Dame and an M.B.A. in Finance from the University of Chicago Booth School of Business. ■ Current: None. ■ Previous (During Past 5 Years): None.
Director Nominees
| | Sharon M. Leite | | | | Age: 62 Director since: 2021 Independent: Yes Fiscal 25 Committees: • Audit Committee • Compensation Committee • Nominating and Governance Committee | Skills and Qualifications: We believe Ms. Leite is qualified to serve on our Board because she brings significant general management experience, as well as retail sales, operations, digital, ecommerce, real estate, merchandising and marketing experience. |
Director Nominees
Sharon M. Leite is a member of our Board. Ms. Leite is an experienced operational leader and advisor to private equity and small businesses, most recently serving as Executive Advisor of Omni Retail Enterprises. Previously, Ms. Leite served as the Chief Executive Officer and a member of the board of directors of Ideal Image from January through October 2023. Previously, she was the Chief Executive Officer of The Vitamin Shoppe, Inc., from August 2018 to January 2023. She also served as President, North America, for Godiva Chocolatier from October 2017 until August 2018. Prior to joining Godiva, from February 2016 until May 2017, Ms. Leite was the President of Sally Beauty — North America (NYSE: SBH), an international specialty retailer and distributor of professional beauty products, with over 3,000 stores. Prior to joining Sally Beauty, from August 2007 until January 2016, Ms. Leite was the Executive Vice President of Sales, Customer Experience and Real Estate at Pier 1 Imports (NYSE: PIR). In addition, Ms. Leite has held various executive leadership roles at Bath and Body Works (L Brands) as well as various sales and operations positions with other prominent retailers including Gap Inc. and The Walt Disney Company. She serves on the board of the Neeley School of Business at Texas Christian University. Ms. Leite attended Loyola University, Kent State University and Delgado College and has an M.B.A. from The Jack Welch Management Institute. Other Public Company Directorships: ■ Current: None. ■ Previous (During Past 5 Years): Tandy Leather Factory, Inc. (2017 – 2022).
Director Nominees
| | Walter F. McLallen | | | | Age: 59 Director since: 2019 Independent: Yes Fiscal 25 Committees: • Audit Committee • Compensation Committee • Nominating and Governance Committee | Skills and Qualifications: We believe Mr. McLallen is qualified to serve on our Board due to his extensive consumer products, operational and board experience, as well as his background in finance. |
Director Nominees
Walter F. McLallen is a member of our Board. Mr. McLallen is a finance professional with over 35 years of leveraged finance, private equity and operations experience. Mr. McLallen has been the Managing Member of Meritage Farms LLC (dba Meritage Capital Advisors), an advisory boutique firm focused on debt and private equity transaction origination, structuring and consulting, since 2004. Mr. McLallen has extensive board and organizational experience and has served on numerous corporate and non-profit boards and committees, with a significant historical focus on consumer products-related companies. He also served on the boards of several consumer-focused private companies, including Timeless Wine Company, the producer of consumer luxury wine brands; adMarketplace, a search engine advertiser; and Frontier Dermatology Partners, a dermatology practice management company. Mr. McLallen is the Founder and Co-Chairman of Tomahawk Strategic Solutions, a law enforcement and corporate training and risk management company. From 2006 to 2015, he was Vice Chairman of Remington Outdoor Company, an outdoor consumer platform he co-founded with a major investment firm. Mr. McLallen was formerly with CIBC World Markets from 1995 to 2004, during which time he was a Managing Director, head of Debt Capital Markets and head of High Yield Distribution. Mr. McLallen started his career in the Mergers & Acquisitions Department of Drexel Burnham Lambert and was a founding member of The Argosy Group L.P. Mr. McLallen received a B.A. with a double major in Economics and Finance from the University of Illinois at Urbana-Champaign. Other Public Company Directorships: ■ Current: OneSpaWorld Holdings Limited (since 2017); and Haymaker Acquisition Corp. 4 (since 2023). ■ Previous (During Past 5 Years): Centric Brands Inc. (2016 – 2020); and Haymaker Acquisition Corp. II (2019 – 2020).
Director Nominees
| | Vineet Mehra | | | | Age: 46 Director since: 2022 Independent: Yes Fiscal 25 Committees: • Audit Committee • Compensation Committee | Skills and Qualifications: We believe Mr. Mehra is qualified to serve on our Board based on his expertise in global marketing strategy, brand development, and deep knowledge of the omni-channel retail and consumer products industries. |
Director Nominees
Vineet Mehra is a member of our Board. Since June 2022, he has served as the Chief Marketing Officer for Chime, where he oversees all marketing initiatives across the company. Prior to Chime, Mr. Mehra was the Chief Growth and Customer Experience Officer of Good Eggs, from March 2021 to May 2022. From February 2019 to February 2021, he was the Global Chief Customer and Marketing Officer for Walgreens Boots Alliance (WBA) where he was responsible for laying out the vision and strategic direction for all of WBA’s marketing activities across their full portfolio of Retail and Consumer Brands. From January 2017 to December 2019, he was the Global Chief Marketing and Revenue Officer for Ancestry.com. Prior to Ancestry, Mr. Mehra held key leadership positions at Johnson & Johnson from 2013 to 2017 including Global President — Baby Care where he led their flagship portfolio of brands, and Global President — Marketing Services, where he held responsibility for their Global Media budget and Global Consumer Insights & Analytics. Mr. Mehra was named by Forbes as one of the world’s Top 50 CMOs, recognized by AdWeek as one of the Top 20 Tech-Driven CMOs, honored with the Top 40 under 40 award by Ad Age, Chair of the Jury for the Global Media Awards, and an Invited Speaker at Cannes Lions Festival of Creativity. Mr. Mehra serves on the board of MMA Global, a marketing trade association, and served as Chairman of the Board of Effie Worldwide, a non-profit organization investing in the global marketing industry. His views and opinions have been quoted in major publications such as the Harvard Business Review, WSJ, Business Insider, Forbes and Ad Age. ■ Previous (During Past 5 Years): AdTheorent (2021 – 2024).
Director Nominees
| | Shirley Romig | | | | Age: 47 Director since: 2019 Independent: Yes Fiscal 25 Committees: • Nominating and Governance Committee • Compensation Committee | Skills and Qualifications: We believe Ms. Romig is qualified to serve on our Board based on her expertise in ecommerce, digital innovation, corporate strategy and scaling complex retail operations. |
Director Nominees
Shirley Romig is a member of our Board. Since June 2023, Ms. Romig has served as Chief Operating Officer of Techstars, LLC, a global venture capital investment firm and leading pre-seed investor. Ms. Romig has two decades of experience in operationalizing growth strategies and leading transformational initiatives in complex consumer-oriented and technology organizations. Prior to TechStars, Ms. Romig was the Co-Founder and CEO of Mixo Group, a digital creator platform for the $1.7 trillion food market, from February 2022 to December 2022. Prior to that, Ms. Romig was a Vice President with Lyft, leading Global Operations, East and Canada from July 2019 to February 2022. From April 2017 to April 2019, Ms. Romig led six lines of businesses at Equinox Fitness Clubs as Group Vice President. From 2016 to 2017, Ms. Romig was the Head of Retail Strategy for SapientRazorfish, a global digital agency. From 2013 to 2015, Ms. Romig was the Senior Vice President of Corporate Strategy with HBC responsible for implementation of growth initiatives across Saks Fifth Avenue, Saks OFF 5th, Lord & Taylor and Hudson’s Bay in Canada. Ms. Romig also served as a Vice President for Saks Incorporated where she led the company’s omnichannel transformation work and launched Saksoff5th.com as well as numerous growth initiatives for Saks.com from 2009 to 2013. Earlier in her career, Ms. Romig worked in equity research and digital and strategy consulting. Ms. Romig holds an M.B.A. from the Darden School of Business and a Bachelor of Science from the McIntire School of Commerce, both at the University of Virginia. Other Public Company Directorships: ■ Current: Mama’s Creations, Inc. (since 2023). ■ Previous (During Past 5 Years): None. The affirmative vote of a plurality of the votes cast at the Annual Meeting and entitled to vote on the matter is required for the election of directors.
Director Nominees
| | THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” EACH OF THE NOMINEES FOR DIRECTOR IN THIS PROXY STATEMENT. |
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees
Identifying Director Nominees
Identifying Director Nominees The Nominating Committee identifies qualified candidates through a variety of means, including recommendations from members of the Board, suggestions from our management or third-party search firms. Our Nominating Committee will evaluate candidates that have been duly recommended or nominated by stockholders in accordance with the requirements set forth in our Bylaws. The criteria the Nominating Committee uses for evaluating a candidate duly recommended or nominated by a stockholder are the same criteria used for evaluating candidates recommended by management or members of our Board. For more information on the procedures to be followed by stockholders who wish to recommend or nominate individuals to serve on our Board, see “Other Matters — Stockholder Proposals for Fiscal 2026 Annual Meeting of Stockholders” on page 55.
Director Nominee Qualifications
Director Nominee Qualifications In evaluating director candidates, including the members of the Board eligible for re-election, our Nominating Committee will consider the current size and composition of our Board of Directors, the needs of our Board of Directors and its respective committees, and other factors that the Nominating Committee deems appropriate and in our stockholders’ best interests. The Nominating Committee requires each nominee to satisfy the following minimum qualifications for a position on the Board: ■ The highest level of personal and professional ethics and integrity; ■ Proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment; ■ Skills that are complementary to those of the existing Board; ■ The ability to assist and support management and make significant contributions to the Company’s success; and ■ An understanding of the fiduciary responsibilities that are required of a member of the Board and the commitment of time and energy necessary to diligently carry out those responsibilities. Director candidates must have sufficient time available in the judgment of our Nominating Committee to perform all Board and applicable committee responsibilities. Members of our Board are expected to prepare for, attend, and participate in all Board and applicable committee meetings. Our Nominating Committee also considers these and other factors as it oversees the annual Board evaluations. After completing its review and evaluation of director candidates, our Nominating Committee recommends to our full Board the director nominees for selection.
Director Compensation
Director Compensation Our non-employee directors are compensated pursuant to the Company’s Director Compensation Policy (“DCP”) which supports the objective of assembling a high-performing Board that can best guide the Company in achieving its strategic and operational goals and promoting long-term stockholder value. Board compensation is reviewed annually by the Compensation Committee to ensure that it continues to satisfy the Board’s overall compensation objectives and philosophy. The Compensation Committee and Nominating Committee are guided in their review by an independent compensation consultant, FW Cook, which provides compensation benchmarking and consultation services using the same peer group that is used for purposes of benchmarking executive compensation. In fiscal 2025, the Board, upon the recommendation of the Compensation Committee, amended the DCP to increase the annual cash retainer for the Chairman of the Board from $30,000 to $50,000 following a review of FW Cook’s director compensation benchmarking study. Below is a description of compensation approved by our directors under the DCP.
Director Compensation Table for Fiscal 2025
Director Compensation Table for Fiscal 2025 The following table provides information on the compensation paid to persons serving as non-employee directors of our Company for the fiscal year ended February 2, 2025. Mr. Krause notified us that he will not stand for re-election at the Annual Meeting, and his current term will expire at the Annual Meeting. Mr. Nelson, our CEO received no additional compensation for his service as director. Mr. Nelson’s compensation is discussed in the “Compensation Discussion and Analysis” section beginning on page 25, and is reflected in the Summary Compensation Table on page 38.
Director Compensation Table for Fiscal 2025
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | All Other Compensation ($) | Total ($) | | John Grafer | 75,000 | 125,000 | — | 200,000 | | Andrew R. Heyer | 52,500 | 125,000 | — | 177,500 | | Jack Krause | 106,386 | 125,000 | — | 231,386 | | Sharon M. Leite | 80,852 | 125,000 | — | 205,852 | | Walter F. McLallen | 94,148 | 125,000 | — | 219,148 | | Vineet Mehra | 75,000 | 125,000 | — | 162,500 | | Shirley Romig | 85,000 | 125,000 | — | 200,000 |
Director Compensation Table for Fiscal 2025
(1) For Mr. Heyer includes the fair value of RSUs elected in lieu of his cash retainer for fiscal 2025. (2) Reflects the aggregate grant date fair value of RSUs awarded to the director calculated in accordance with FASB ASC Topic 718. The methods and assumptions used in calculating the grant date fair value of RSUs reported in this column are set forth in Note 9 of our audited financial statements included in our 2025 Annual Report. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. (3) Reflects the fair value of each director’s Annual Grant awarded on June 11, 2024 which vests in full on the one year anniversary of the grant date. Mr. Heyer and Ms. Leite elected to defer receipt of their Annual Grant. The following table lists all outstanding RSUs (including RSUs for which the payout of shares has been deferred by such director) held by our non-employee directors as of February 2, 2025.
Director Compensation Table for Fiscal 2025
| Name | Aggregate Number of Unvested Stock Awards | | John Grafer | 4,808 | | Andrew R. Heyer | 8,846 | | Jack Krause | 4,808 | | Sharon M. Leite | 4,808 | | Walter F. McLallen | 11,510 | | Vineet Mehra | 4,808 | | Shirley Romig | 4,808 |
Executive Compensation Policies and Practices
| WHAT WE DO | | WHAT WE DON’T DO | | | | Place a significant emphasis on performance-based at-risk long-term incentive compensation | | No repricing of stock option awards without stockholder approval | | | Have 100% independent directors on our Compensation Committee | | No tax gross-ups at all | | | Engage an independent compensation consultant that reports to our Compensation Committee | | No post-employment retirement benefits for our NEOs that are not available to all associates | | | Maintain a clawback policy covering incentive-based compensation | | No executive perquisites offered to our NEOs | | | Maintain robust stock ownership guidelines for executives to ensure alignment with stockholder interests | | Our NEOs are employed “at-will” under their Employment Agreements and have market aligned severance benefits |
Elements of Compensation
| Element | Mr. Nelson and Ms. Fox | Mr. Siegner | Description | | Base Salary | | | Fixed compensation for performing day-to-day job responsibilities. Reviewed annually for potential adjustment based on market competitiveness, change in responsibilities and other factors. | | Annual Incentive | | | Annual performance-based award opportunity based on achievements related to Company performance metrics and targets established by the Compensation Committee. | | Long-Term Incentives | | | Equity awards designed to reward executives for strong long-term performance, serve as a retention tool and to align the interests of executives and stockholders. |
Executive Compensation Program Snapshot
| | Type | Terms | | Salary | Cash | Fixed amount of compensation, reviewed annually for potential adjustment based on market competitiveness, changes in responsibilities and other factors. | | Annual Incentive | Cash | Annual performance-based award opportunity based on achievements with respect to the Company’s net sales, adjusted EBITDA and customer satisfaction performance. | | Long-Term Incentives | Time-based Restricted Stock Units (“RSUs”) | Time-based RSUs vest in three equal installments over three years subject to continued employment through each vesting date. RSUs are payable in shares of Company stock upon vesting. Unvested RSUs are forfeited upon termination from the Company. | | | Performance-based RSUs (PSUs) | Eligible to vest based on the Company’s achievements of net sales and adjusted EBITDA targets pre-established by the Compensation Committee for the applicable performance period, subject to continued employment on the vesting date. Once vested, PSUs are payable in shares of Company stock. Unearned PSUs are forfeited. | | | Long-Term Performance Awards (LTPAs) | Eligible to vest based on the Company’s achievements of stretch net sales and adjusted EBITDA targets pre-established by the Compensation Committee for the applicable performance period, subject to continued employment on the vesting date. Once vested, LTPAs are payable in shares of Company stock. Unearned LTPAs are forfeited. | | Retirement | 401(k) | A qualified safe harbor 401(k) plan that provides all eligible Company associates (including our NEOs) with the opportunity to defer a portion of their compensation and receive a Company matching contribution equal to 100% of deferrals up to 4% of gross pay. |
Role of the Compensation Committee
Role of the Compensation Committee The Compensation Committee is responsible for establishing, approving and adjusting compensation arrangements for our NEOs, and for reviewing and approving corporate goals and objectives relevant to these compensation arrangements. The Compensation Committee also evaluates the performance of our NEOs taking into consideration achievements relative to the Company’s long-term business and financial goals. The Compensation Committee is comprised of independent directors and works closely with its independent consultant, FW Cook, and senior executives to assess the effectiveness of the Company’s executive compensation program throughout the year. Compensation decisions for our NEOs were made by the Compensation Committee with input from FW Cook for fiscal 2025. The Compensation Committee reviewed the cash and equity compensation of our NEOs with the goal of ensuring that our executive officers are properly incentivized and made adjustments it determined to be appropriate. The Compensation Committee considers compensation data from our peer group as one of several factors that inform its judgment of appropriate compensation levels. The Compensation Committee also considers other factors in determining compensation including those set forth below, and may pay up to the 75th percentile of our peer group in target total direct compensation: ▪ The performance and experience of each NEO; ▪ The scope and strategic impact of the NEO’s responsibilities; ▪ Our past business performance and future expectations; ▪ Our long-term goals and strategies; ▪ The difficulty and cost of replacing high-performing leaders with in-demand skills; and ▪ The relative compensation among our NEOs.
Role of the Compensation Consultant
Role of the Compensation Consultant The Compensation Committee has the authority to retain the services of external advisors, including compensation consultants, legal counsel and other advisors, as needed to carry out its duties. The Compensation Committee engaged FW Cook to assist in guiding and executing our executive and director compensation strategy, assessing the target total direct compensation opportunities of our named executive officers relative to market practices, developing a compensation peer group and advising on executive compensation decisions for fiscal 2025. FW Cook does not provide any services to us other than the services provided to the Compensation Committee. Our Compensation Committee has assessed the independence of FW Cook and has concluded that no conflict of interest exists with respect to the work that FW Cook performs for the Compensation Committee.
Compensation Peer Group
Compensation Peer Group The Compensation Committee reviews market data of companies that we believe are comparable to us. The Compensation Committee, with assistance from FW Cook, determined our peer group for fiscal 2025 based on several factors, including industry classification, company size, and other qualitative and business-related factors. Each year, the Compensation Committee examines our compensation peer group to ensure that it continues to reflect these factors and will make adjustments as needed. Our peer group for fiscal 2025 compensation decisions consisted of 17 companies the majority of which are consumer goods companies. The Compensation Committee referred to compensation data from this peer group when making base salary, annual incentive award and long-term incentive award decisions for our NEOs. The following is a list of the companies that comprised our fiscal 2025 peer group.
Compensation Peer Group
| ▪ | Boot Barn Holdings, Inc. | ▪ | Funko, Inc. | ▪ | Revolve Group, Inc. | | ▪ | CarParts.com, Inc. | ▪ | GoPro, Inc. | ▪ | Snap One Holdings, Corp. | | ▪ | Clarus Corporation | ▪ | Holley Inc. | ▪ | Solo Brands | | ▪ | e.l.f. Beauty, Inc. | ▪ | Inter Parfums, Inc. | ▪ | Sonos, Inc. | | ▪ | Ethan Allen Interiors, Inc. | ▪ | Johnson Outdoors, Inc. | ▪ | XPEL, Inc. | | ▪ | FIGS | ▪ | Purple Innovation, Inc. | | |
Annual Incentive Plan (AIP) Compensation
Annual Incentive Plan (AIP) Compensation A significant portion of each NEO’s compensation is tied to Company performance. We provide for annual performance-based cash incentive opportunities for our NEOs (“AIP Award”) based on achievements relative to Company financial and strategic objectives. Target AIP Award levels are based on a percentage of our NEOs’ base salaries at the conclusion of the applicable performance year and are informed by market data and Compensation Committee judgment. In fiscal 2025, the target AIP Award levels for Mr. Nelson and Ms. Fox were increased from 60% to 75%, and the target AIP Award level for Mr. Signer was increased from 55% to 60% following the Compensation Committee’s annual compensation review. Actual AIP Award amounts are based on achievement relative to threshold, target, stretch and maximum performance goals established by the Compensation Committee. Performance is measured at the end of the fiscal year and actual payouts made relative to each NEO’s target AIP Award opportunity as shown in the following table:
Annual Incentive Plan (AIP) Compensation
| | AIP Payout Levels based on Performance Levels(1) | | | | | | | | | | Threshold | | Target | | Stretch | | Maximum | | | Name | Performance | Payout | Performance | Payout | Performance | Payout | Performance | Payout | | Shawn Nelson | 50% of target | 206,250 | 100% of target | 412,500 | 150% of target | 618,750 | 200% of target | 825,000 | | Mary Fox | | 206,250 | | 412,500 | | 618,750 | | 825,000 | | Keith Siegner | | 139,200 | | 278,400 | | 417,600 | | 556,800 |
Annual Incentive Plan (AIP) Compensation
(1) Threshold performance results in a payout of 37.5% of base salary for Mr. Nelson and Ms. Fox, and 30% of base salary for Mr. Siegner. Target performance results in a payout of 75% of base salary for Mr. Nelson and Ms. Fox, and 60% of base salary for Mr. Siegner. (2) Stretch performance results in payout of 112.5% of base salary for Mr. Nelson and Ms. Fox, and 90% of base salary for Mr. Siegner. Maximum performance results in payout capped at 150% of base salary for Mr. Nelson and Ms. Fox, and 120% of base salary for Mr. Siegner.
Fiscal 2025 AIP Awards
Fiscal 2025 AIP Awards
Company Performance Metrics
Company Performance Metrics For fiscal 2025 AIP Awards, the Compensation Committee selected metrics and weightings that balance a growth measure (net sales) and a profitability-related measure (adjusted EBITDA). In addition, to drive strong customer service the Company established targets for post-purchase customer satisfaction (“CSAT”) survey results as a condition to maximum payout eligibility under the 2025 AIP. If CSAT is not attained, the maximum payout is 180% of target (rather than 200% of target). The performance targets for each metric are based on Company operating and financial plans and other factors. Each year, the Compensation Committee also reviews overall financial performance and adjusts for items that are not reflective of normal operating performance for that year. These adjustments are items that the Compensation Committee believes are fair to both participants and stockholders, encourage appropriate actions that foster the long-term health of the business, and are consistent with the objectives underlying our predetermined AIP performance goals. The adjustments identified by the Compensation Committee at the beginning of fiscal year 2025 included unplanned legal fees and settlement costs, currency fluctuations, unbudgeted supply chain impacts, category headwinds, national/global crises, changes in tax laws, rates or accounting standards, or other extraordinary non-recurring items or significant change in business assumptions, if there is a valid business rationale. During fiscal 2025, the Company’s net sales and adjusted EBITDA performance was below threshold levels earning a 0% payout on both metrics. Net sales performance was impacted by two key factors: (i) slower than expected recovery from category headwinds and a challenging macro environment, and (ii) the Company’s strategic decision to protect the brand by maintaining its standard promotional pricing levels relative to record high industry promotional levels. Lower than expected net sales performance also resulted in adjusted EBITDA performance below the threshold performance levels required for payout on the adjusted EBITDA metric. The Committee considered that adjusting for these factors would have resulted in net sales and adjusted EBITDA performance yielding an approximately 65% payout. For fiscal 2025, the Committee exercised its discretion to adjust the AIP payout to 40%. The amounts shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 38 reflect this level of performance.
Company Performance Metrics
| Metrics | Weight | Performance Levels (rounded) | | | Results | Weighted Payout Percent | | Net Sales | 50% | Threshold: | $700M = | 50% | $680.6M | 0% | | (Growth measure) | | Target: | $735M = | 100% | | | | | | Stretch: | $752.5M = | 150% | | | | | | Maximum: | $770M = | 200% | | | | Adjusted EBITDA(1) | 50% | Threshold: | $52.7M = | 50% | $47.8M | 0% | | (Profitability-related measure) | | Target: | $58.9M = | 100% | | | | | | Stretch: | $61.7M = | 150% | | | | | | Maximum: | $64M = | 200% | | | | CSAT | Achievement of CSAT targets is a condition to maximum payout. Target: 85.6% | | | | 86.1% | Not applicable | | (Customer satisfaction measure) | | | | | | | | Total Payout Percent Adjusted Payout Percent | | | | | | 0% 40% |
Company Performance Metrics
(1) Adjusted EBITDA is a non-GAAP measure. For a discussion of this measure and for a reconciliation to the most directly comparable GAAP measure, see “Reconciliation of Non-GAAP Financial Measures” in Appendix A of this Proxy Statement. (2) Achievement of CSAT targets is a condition to maximum payout of 200%.
Discretionary Bonus Awards
Discretionary Bonus Awards In fiscal 2025, the Compensation Committee awarded Mr. Siegner a discretionary bonus of $120,000 in recognition of his leadership in connection with the restatement of certain of the Company’s historical financial statements. In addition, the Compensation Committee awarded discretionary bonuses to Mr. Nelson, Ms. Fox and Mr. Siegner in the amounts of $123,750, $123,750, and $83,520, respectively, due to the Company’s outperformance relative to the category gaining market share, and their leadership driving significant progress on the Company’s strategic plan, including the fiscal 2025 launch of Sactionals Reclining Seat, the fiscal 2026 launch of EverCouch™ and pending new platforms. The Compensation Committee also considered that Mr. Nelson’s and Ms. Fox’s target total direct compensation and realized pay was significantly lower than the benchmark group.
Long-Term Incentive Compensation
Long-Term Incentive Compensation To encourage a strong focus on long-term performance, our Compensation Committee grants our NEOs stock-based awards, the value of which depends on our stock performance and other performance measures. The Compensation Committee generally awards long-term incentive compensation in the form of time-based RSUs, and performance-based PSUs and LTPAs. Long-term incentive (“LTI”) awards are generally granted to our NEOs annually and grant amounts are determined based on various factors including Company performance and market practices. In fiscal 2025, the Compensation Committee awarded long-term incentives to the NEOs under our 2017 Equity Plan in the form of RSUs, PSUs, and LTPAs weighted approximately (i) 19%, 19% and 62%, respectively, of Mr. Nelson’s and Ms. Fox’s total LTI target award value, and (ii) 26%, 26% and 48%, respectively, of Mr. Siegner’s total LTI target award value. The Compensation Committee selected these award mixes to emphasize incentive award opportunities that are contingent upon both strong Company performance and retention. Target award values for RSUs, PSUs and LTPAs were determined based on peer group data provided by FW Cook. In fiscal 2025, the Compensation Committee increased the total long-term incentive award target values for Mr. Nelson, Ms. Fox and Mr. Siegner to align with the peer group. The following table shows the long-term incentive target award values for fiscal 2025 for each of the NEOs:
Long-Term Incentive Compensation
| FISCAL 2025 LONG-TERM INCENTIVE TARGET VALUES | RSU ($) | PSU ($) | LTPA ($)(1) | Total Value ($) | | Shawn Nelson | 750,000 | 750,000 | 2,537,500 | 4,037,500 | | Mary Fox | 750,000 | 750,000 | 2,537,500 | 4,037,500 | | Keith Siegner | 395,500 | 395,500 | 732,000 | 1,523,000 |
Long-Term Incentive Compensation
(1) For Mr. Nelson and Ms. Fox, includes an increase in their LTPA target award value of $987,500 for fiscal 2025 to bring their total long-term incentive award target value over three years in alignment with the peer group. Actual RSU, PSU and LTPA share amounts are determined by dividing the target award values by the average closing price of a share of the Company’s common stock for the 30-day trading period prior to the date of grant.
Fiscal 2025 PSU and RSU Awards
Fiscal 2025 PSU and RSU Awards PSUs. The Compensation Committee grants performance-based awards to align executive compensation with stockholder interests. PSU awards are granted to our NEOs and can be earned based on achievement of predefined Company performance metrics and targets measured and certified by the Compensation Committee at the end of three consecutive 12-month performance periods. The Compensation Committee sets performance targets at the beginning of each 12-month performance period and the performance targets may change from year to year. NEOs can earn 25% of their target award for achieving 80% of the performance targets up to a maximum of 100% of their target award. There is no payout for performance below 80% of the performance targets. Once earned, PSUs are paid in shares of Company stock. If the PSU performance targets are met for a given 12-month performance period, one-third of the target PSU award will be paid out to the NEO on the applicable anniversary of the grant date provided that the NEO is employed by the Company on the payout date. If the PSU performance targets are not met for the first or second 12-month performance period, then such unearned PSUs (representing one-third of the target award) will be eligible to vest if the Company’s performance at the end of the next fiscal year exceeds the aggregate of the performance targets for the current fiscal year plus the prior fiscal year. ▪ Fiscal 2025 PSUs. In fiscal 2025, one-third of target PSUs could be earned by our NEOs based on Company performance relative to the net sales and adjusted EBITDA performance targets set forth below for the 12-month performance period ending February 2, 2025 (“Fiscal 2025 PSUs”). Payout for performance on each metric is calculated independently and weighted 50% in the overall payout calculation. During fiscal 2025, the Company achieved net sales performance of $680.6 million equating to 72.3% achievement on the net sales metric and adjusted EBITDA performance of $47.8 million equating to a 29.2% payout on the adjusted EBITDA metric. Based on the performance ranges and results shown in the table below, the Company’s net sales and adjusted EBITDA performance earned the NEOs a payout of 50.8% of their target Fiscal 2025 PSU award representing the following shares: Mr. Nelson — 4,884 shares, Ms. Fox — 4,884 shares, and Mr. Siegner — 2,576. The balance of unearned shares from the Fiscal 2025 PSU award were forfeited.
Fiscal 2025 PSU and RSU Awards
| Metrics | Weight | Performance Ranges | | | Results | Achievement | | Net Sales | 50% | Threshold: | $588M = | 25% | $680.6M | 72.3% | | (Growth measure) | | Target: | $735M = | 100% | | | | Adjusted EBITDA(1) | 50% | Threshold: | $47M = | 25% | $47.8M | 29.2% | | (Profitability measure) | | Target: | $58.9M = | 100% | | | | Payout Percent(2) | | | | | | 50.8% |
Fiscal 2025 PSU and RSU Awards
(1) Adjusted EBITDA is a non-GAAP measure. For a discussion of this measure and for a reconciliation to the most directly comparable GAAP measure, see “Reconciliation of Non-GAAP Financial Measures” in Appendix A of this Proxy Statement. (2) Net sales and adjusted EBITDA are calculated independently. Performance on each metric must meet or exceed 80% threshold levels for payout eligibility. Performance between 80% and 100% of target will be determined using linear interpolation. ▪ Fiscal 2022, 2023 and 2024 PSUs. The fiscal 2025 PSU metrics also applied to one-third of the PSUs awarded in fiscal 2024 (“Fiscal 2024 PSUs”) and fiscal 2023 (“Fiscal 2023 PSUs”), and one-quarter of the PSUs awarded to Ms. Fox only in fiscal 2022 (“Fiscal 2022 PSUs”), none of which were earned. Fiscal 2024 PSUs, Fiscal 2023 PSUs and Fiscal 2022 PSUs could be earned based on blended net sales and adjusted EBITDA performance with a 90% performance threshold which was not met. The following unearned Fiscal 2024 PSUs were carried forward and eligible to be earned in fiscal 2026 if the Company’s aggregate net sales and adjusted EBITDA performance targets for fiscal 2025 and 2026 are met: Mr. Nelson — 4,848, Ms. Fox — 4,848, and Mr. Siegner — 3,189. The following unearned Fiscal 2024 PSUs, Fiscal 2023 PSUs, and Fiscal 2022 PSUs were not eligible for carry forward and forfeited: Mr. Nelson — 10,392, Ms. Fox — 15,224 and Mr. Siegner — 3,188. Long-Term Performance Awards. The Compensation Committee grants LTPAs to reward strong Company and individual performance and to serve as a retention tool. LTPAs are denominated in performance-based restricted stock units of which 100% may be earned by the NEOs based on performance relative to stretch targets established by the Committee for a designated performance period. Once earned, LTPA’s are payable in a single tranche following the fiscal year in which the performance levels were achieved. If the performance targets are not achieved, no LTPAs will be paid. ▪ Fiscal 2025 LTPAs. In fiscal 2025, the Compensation Committee granted LTPAs (“Fiscal 2025 LTPAs” or “LTPA1s”) to the NEOs that vest upon achievement of stretch net sales and adjusted EBITDA targets designed to award accelerated performance over a three-year performance period ending in fiscal 2027. 100% of the Fiscal 2025 LTPAs vest in the fiscal year following the completed fiscal year in which the Company achieves both the net sales and adjusted EBITDA targets but no later than fiscal 2027. 50% of the Fiscal 2025 LTPAs vest in fiscal 2027 if either one of the net sales or the adjusted EBITDA targets is met, but no later than fiscal 2027. Unearned Fiscal 2025 LTPAs are forfeited. In fiscal 2025, Mr. Nelson and Ms. Fox each received an additional LTPA grant (“LTPA2”) with net sales and adjusted EBITDA performance targets greater than the LTPA1s to reward higher levels of Company performance. 100% of the LTPA2s vest in the fiscal year following the completed fiscal year in which the Company achieves both the net sales and adjusted EBITDA targets but no later than fiscal 2027. 50% of the LTPA2s vest in fiscal 2027 if either one of the net sales or the adjusted EBITDA targets is met, but no later than fiscal 2027. Unearned LTPA2 are forfeited. ▪ Fiscal 2023 and Fiscal 2024 LTPAs. In fiscal 2025, based on a review of Company forecasted performance and macroeconomic factors the fiscal 2023 and fiscal 2024 LTPAs were not expected to be earned. The Compensation Committee approved the cancellation and forfeiture of the fiscal 2023 and fiscal 2024 LTPA grants granted to our associates, including Mr. Nelson and Ms. Fox, to enable the shares to be added back to the share pool to meet the Company’s fiscal 2025 grant needs. RSUs. RSUs provide incentives for executives to remain employed by the Company to execute the Company’s long-term strategic goals. The Compensation Committee believes that RSUs tie compensation to Company performance, given that the value of an RSU can increase or decrease with our stock price. Generally, RSUs vest in three equal annual installments on each of the first three anniversaries of the grant date. Vested shares are settled in common stock on each vest date provided that the executive remains employed by the Company on such date.
Post-Employment Agreements
Post-Employment Agreements For a description of the material terms of each contract, agreement, plan or arrangement with our NEOs at, following, or in connection with the resignation or other termination of an NEO, or a change in control, see the section entitled “Executive Employment Arrangements” beginning on page 41.
Practices Related to the Timing of Equity Compensation
Practices Related to the Timing of Equity Compensation The Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information (“MNPI”), and the Company does not time the release of MNPI based upon grant dates of equity awards. The Company has not granted stock options or other appreciation awards since 2019.
Summary Compensation Table
Summary Compensation Table The following Summary Compensation Table summarizes the total compensation paid to or earned by each of our named executive officers for services provided to the Company for fiscal 2025.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Shawn Nelson | 2025 | 528,225 | 123,750 | 3,840,346 | — | 165,000 | 14,090 | 4,671,414 | | Chief Executive | 2024 | 476,996 | — | 8,526,949 | — | 74,990 | 14,000 | 9,092,935 | | Officer | 2023 | 440,229 | — | 2,472,858 | — | 267,060 | 24,536 | 3,204,682 | | Mary Fox | 2025 | 528,225 | 123,750 | 3,840,346 | — | 165,000 | 14,090 | 4,671,414 | | President and Chief | 2024 | 476,996 | — | 2,369,660 | — | 74,990 | 14,000 | 2,935,647 | | Operating Officer | 2023 | 440,404 | — | 2,472,858 | — | 667,060 | 12,227 | 3,592,548 | | Keith Siegner | 2025 | 460,500 | 203,520 | 1,448,634 | — | 111,360 | 13,849 | 2,237,863 | | EVP and Chief | 2024 | 300,000 | 50,000 | 515,607 | — | 66,825 | 1,500 | 933,932 | | Financial Officer | | | | | | | | |
Summary Compensation Table
(1) The Salary column reflects base salaries paid during the years shown. (2) The Bonus column reflects discretionary bonuses for each of the NEOs. See the section “Discretionary Bonus Awards” on page 32 for more information. (3) The Stock Awards column reflects the fair value of RSUs, PSUs, LTPA1s and LTPA2s granted in fiscal 2025 as computed in accordance with FASB ASC Topic 718. The methods and assumptions used to calculate these amounts are discussed in Note 9 to our financial statements included in our 2025 Annual Report for the fiscal year ended February 2, 2025. The aggregate grant date fair value for each type of award assumes the satisfaction of all relevant conditions. If the Company were to meet its performance targets the maximum payout for PSUs, LTPA1s and LTPA2s is 100% of target, consistent with the values in the table. (4) The Non-Equity Incentive Plan Compensation column reflects payments made under the Company’s AIP, as adjusted by the Compensation Committee, based on performance relative to net sales, adjusted EBITDA and CSAT targets established for the 12-month performance period ended February 2, 2025. See the section titled “Fiscal 2025 AIP Awards” on page 31 for more information. (5) The All Other Compensation column includes 401(k) matching contributions for the named executive officers.
Grants of Plan-Based Awards
Grants of Plan-Based Awards
Grants of Plan-Based Awards
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Shawn Nelson | | | | | | | | | | | AIP | | 206,250 | 412,500 | 825,000 | — | — | — | — | — | | RSU(2) | 06/11/2024 | — | — | — | — | — | — | 28,847 | 713,386 | | PSU(3) | 06/11/2024 | — | — | — | 7,211 | 28,847 | — | — | 713,386 | | LTPA1(4) | 06/11/2024 | — | — | — | — | 59,616 | — | — | 1,474,304 | | LTPA2(4) | 06/11/2024 | — | — | — | — | 37,981 | — | — | 939,270 | | Mary Fox | | | | | | | | | | | AIP | | 206,250 | 412,500 | 825,000 | — | — | — | — | — | | RSU(2) | 06/11/2024 | — | — | — | — | — | — | 28,847 | 713,386 | | PSU(3) | 06/11/2024 | — | — | — | 7,211 | 28,847 | — | — | 713,386 | | LTPA1(4) | 06/11/2024 | — | — | — | — | 59,616 | — | — | 1,474,304 | | LTPA2(4) | 06/11/2024 | — | — | — | — | 37,981 | — | — | 939,270 | | Keith Siegner | | | | | | | | | | | AIP | | 139,200 | 278,400 | 556,800 | — | — | — | — | — | | RSU(2) | 06/11/2024 | — | — | — | — | — | — | 15,212 | 376,193 | | PSU(3) | 06/11/2024 | — | — | — | 3,803 | 15,212 | — | — | 376,193 | | LTPA1(4) | 06/11/2024 | — | — | — | — | 28,154 | — | — | 696,248 |
Grants of Plan-Based Awards
(1) NEOs can earn AIP Awards between 0% and 200% of target based on net sales, adjusted EBITDA and CSAT performance relative to targets pre-established by the Compensation Committee. Performance is measured at the end of a 12-month performance period ending February 2, 2025. Actual payout levels are reflected in the Summary Compensation Table on page 38. (2) Reflects RSUs that vest in three equal annual installments on each of the first, second, and third anniversaries of the grant date, subject to continued service with the Company through the vesting date. (3) Reflects PSUs that may be earned based on achievements relative to net sales and adjusted EBITDA performance targets pre-established by the Compensation Committee. NEOs are eligible to earn between 50% and 100% of their target award. PSUs are payable in shares of the Company’s common stock, subject to continued service with the Company through the vesting date. See the section “Fiscal 2025 PSU and RSU Awards” on page 33 for additional information. (4) Reflects LTPAs that may be earned based on achievements relative to stretch net sales and adjusted EBITDA performance targets pre-established by the Compensation Committee. NEOs are eligible to earn 100% of their target award. LTPAs are payable in shares of the Company’s common stock, subject to continued service with the Company through the vesting date. In fiscal 2025, LTPA1s were granted to the NEOs, and LTPA2s were granted to Mr. Nelson and Ms. Fox. See the section “Long-Term Performance Awards” on page 34 for additional information. (5) Reflects the grant date fair value of awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of the awards reported, see Note 9 to the Company’s financial statements in the Company’s 2025 Annual Report for the fiscal year ended February 2, 2025.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth for each Named Executive Officer certain information concerning their outstanding equity awards as of the fiscal year ended February 2, 2025.
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards | | | | | Stock Awards | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(1) (#) | Market Value of Shares of Stock That Have Not Vested ($)(2) | 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 ($)(6) | | Shawn Nelson | 06/05/2019 | 330,244 | — | 38.10 | 06/05/2029 | — | — | — | — | | | 04/15/2022 | — | — | — | — | 2,772 | 70,908 | 5,544(3) | 141,815 | | | 03/27/2023 | — | — | — | — | — | — | 235,000(4) | 6,011,300 | | | 04/15/2023 | — | — | — | — | 9,696 | 248,024 | 14,544(3) | 372,036 | | | 06/11/2024 | — | — | — | — | 28,847 | 737,907 | 28,847(3) | 737,907 | | | 06/11/2024 | — | — | — | — | — | — | 59,616(5) | 1,524,977 | | | 06/11/2024 | — | — | — | — | — | — | 37,981(5) | 971,554 | | Mary Fox | 11/18/2021 | — | — | — | — | 2,417 | 61,827 | 4,832(3) | 123,603 | | | 04/15/2022 | — | — | — | — | 2,772 | 70,908 | 5,544(3) | 141,815 | | | 04/15/2023 | — | — | — | — | 9,696 | 248,024 | 14,544(3) | 372,036 | | | 06/11/2024 | — | — | — | — | 28,847 | 737,907 | 28,847(3) | 737,907 | | | 06/11/2024 | — | — | — | — | — | — | 59,616(5) | 1,524,977 | | | 06/11/2024 | — | — | — | — | — | — | 37,981(5) | 971,554 | | Keith Siegner | 06/30/2023 | — | — | — | — | 6,378 | 163,149 | 9,566(3) | 244,698 | | | 06/11/2024 | — | — | — | — | 15,212 | 389,123 | 15,212(3) | 389,123 | | | 06/11/2024 | — | — | — | — | — | — | 28,154(5) | 720,179 |
Outstanding Equity Awards at Fiscal Year-End
(1) Reflects RSUs which vest in three equal annual installments (and four annual installments for Ms. Fox’s November 18, 2021 grant only) on the anniversary of the grant date subject to continued service with the Company through the vesting dates. (2) Reflects the market value of the shares underlying RSUs that have not vested as of the fiscal year ended February 2, 2025, based on the closing price of our common stock of $25.58 per share on January 28, 2025, the last trading day of fiscal 2025. (3) Reflects Fiscal 2022 PSUs (fourth tranche for Ms. Fox’s November 18, 2021 grant), Fiscal 2023 PSUs (third tranche), Fiscal 2024 PSUs (second and third tranches), and Fiscal 2025 PSUs (first, second and third tranches) which may be earned based on the Company’s performance relative to pre-established metrics and targets set by the Compensation Committee for three consecutive 12-month performance periods. See the discussion on page 33 for more information on PSU awards. (4) Reflects a performance-based RSU retention award granted to Mr. Nelson that vests upon achievement of certain stock price and net sales goals over a five- and seven-year performance period, as applicable. (5) Reflects LTPA1s granted to the NEOs in fiscal 2025, and LTPA2s granted to Mr. Nelson and Ms. Fox which may be earned based on the Company’s performance relative to stretch net sales and adjusted EBITDA targets pre-established by the Compensation Committee over a three-year performance period ending in fiscal 2027. In fiscal 2025, based on a review of Company forecasted performance and macroeconomic factors the fiscal 2023 and fiscal 2024 LTPA grants were not expected to be earned. The Compensation Committee approved the cancellation and forfeiture of the fiscal 2023 and fiscal 2024 LTPA grants granted to Mr. Nelson and Ms. Fox. See the section “Long-Term Performance Awards” on page 34 for additional information. (6) Reflects the market value of the shares underlying Fiscal 2022 PSUs (for Ms. Fox only), Fiscal 2023 PSUs, the Nelson PSU Grant, Fiscal 2024 PSUs, Fiscal 2025 PSUs, LTPA1s and LTPA2s, as applicable, as of the fiscal year ended February 2, 2025, assuming performance at target, and based on the closing price of our common stock of $25.58 per share on January 28, 2025, the last trading day of fiscal 2025.
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table provides information on stock options exercised and stock awards that vested for the NEOs in fiscal 2025.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Shawn Nelson | — | — | 9,078 | 181,689 | | Mary Fox | — | — | 10,036 | 219,722 | | Keith Siegner | — | — | 3,188 | 71,895 |
Option Exercises and Stock Vested
(1) The Value Realized on Vesting is based on the number of shares of the Company’s common stock that vested on the vesting date multiplied by the closing price of the Company’s common stock on the vesting date – April 15, 2024 of $18.80; June 7, 2024 of $26.36; June 30, 2024 of $22.58; and November 18, 2024 of $31.65.
Potential Payments Upon Termination of Employment or Change in Control
Potential Payments Upon Termination of Employment or Change in Control The table below shows potential payments to our NEOs in the event of their termination of employment by the Company without Cause, termination by the executive for Good Reason, and termination due to disability or in connection with a change in control. The payments and benefits extended to the NEOs upon each of these termination scenarios are payable pursuant to the terms of each of their Employment Agreements, the 2017 Equity Plan and related award agreements. Except as otherwise described under the Executive Employment Arrangements section on page 41. The table below assumes the following: ▪ Termination of employment, change of control or Existing Investor Asset Disposal, as applicable, occurred on February 2, 2025, the last day of fiscal 2025; ▪ The Company performed at target levels for purposes of calculating the AIP Award and equity awards; and ▪ The NEOs elected COBRA benefits for the maximum time period allowed under their Employment Agreements.
Potential Payments Upon Termination of Employment or Change in Control
| Name | Disability ($) | Termination of NEO Without Cause or by Executive for Good Reason ($) | Termination of NEO Without Cause or by NEO for Good Reason following Change in Control or Existing Investor Asset Disposal ($) | | Shawn Nelson | | | | | Cash Severance | 183,333 | 1,100,000 | 1,100,000 | | AIP Award | — | 412,500 | 412,500 | | Health and Life Benefits | — | 62,618 | 62,618 | | Equity | — | 8,319,895 | 10,816,426 | | TOTAL | 183,333 | 9,895,013 | 12,391,544 | | Mary Fox | | | | | Cash Severance | 183,333 | 550,000 | 550,000 | | AIP Award | — | 412,500 | 412,500 | | Health and Life Benefits | — | 25,953 | 25,953 | | Equity | — | 2,494,024 | 4,990,556 | | TOTAL | 183,333 | 3,482,478 | 5,979,009 | | Keith Siegner | | | | | Cash Severance | 154,667 | 464,000 | 464,000 | | AIP Award | — | 278,400 | 278,400 | | Health and Life Benefits | — | 25,053 | 25,053 | | Equity | — | 1,186,093 | 1,906,273 | | TOTAL | 154,667 | 1,953,547 | 2,673,726 |
Pay Versus Performance
Pay Versus Performance This disclosure has been prepared in accordance with the SEC’s pay versus performance rules in Item 402(v) of Regulation S-K under the 1934 Act (“Item 402(v)”) and does not necessarily reflect value actually realized by the NEOs. The following tables and related disclosures provide information about (i) the total compensation (“SCT Total”) of our principal executive officer (“PEO”) and our non-PEO NEOs (collectively, the “Other NEOs”) as presented in the Summary Compensation Table on page 38, (ii) the “compensation actually paid” (“CAP”) to our PEO and our Other NEOs, as calculated pursuant to Item 402(v), (iii) certain financial performance measures used by the Company when making compensation decisions, and (iv) the relationship of the CAP to those financial performance measures.
Pay Versus Performance
| Year(1) | Summary Compensation Total for PEO ($) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(2) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($M) | Company Selected Measure: Adjusted EBITDA ($M)(4) | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(3) | | | | FY25 | 4,671,414 | 4,242,538 | 3,454,639 | 3,481,915 | 45 | 102 | 11.6 | 47.8 | | FY24 | 9,092,935 | 3,744,799 | 1,722,952 | 917,163 | 41 | 87 | 23.9 | 54 | | FY23 | 3,204,682 | (2,926,332) | 2,411,309 | 182,775 | 229 | 118 | 28.2 | 60.4 | | FY22 | 1,640,096 | (961,134) | 1,798,217 | 1,123,546 | 445 | 122 | 45.9 | 55.5 | | FY21 | 2,610,303 | 13,954,746 | 1,897,737 | 6,720,312 | 498 | 139 | 14.7 | 28.3 |
Pay Versus Performance
(1) The Principal Executive Officer (“PEO”) in all five reporting years is our CEO, Shawn Nelson. The Non-PEO NEOs for fiscal year 2025 are Mary Fox and Keith Siegner. The Non-PEO NEOs for fiscal year 2024 are Jack Krause, Mary Fox, Donna Dellomo, and Keith Siegner. The Non-PEO NEOs for fiscal years 2023 and 2022 are Jack Krause, Mary Fox, and Donna Dellomo. The Non-PEO NEOs for fiscal year 2021 are Jack Krause and Donna Dellomo. (2) “Compensation actually paid” amounts to our CEO and NEOs in each of 2025, 2024, 2023, 2022, and 2021, reflect the respective Summary Compensation Total with adjustments shown below as determined pursuant to SEC rules. (3) Reflects the total shareholder return indexed to $100 per share for the Russell 2000 Index. (4) Adjusted EBITDA is a non-GAAP measure. For a discussion of this measure and for a reconciliation to the most directly comparable GAAP measure, see “Reconciliation of Non-GAAP Financial Measures” in Appendix A of this Proxy Statement.
Pay Versus Performance
| Year | SCT Total ($) | Minus SCT Change in Pension Value ($) | Plus Pension Value Service Cost ($) | Minus SCT Equity ($) | Plus (Minus) EOY Fair Value of Equity Awards Granted During Fiscal Year that are Outstanding and Unvested at EOY ($) | Plus (Minus) Change from BOY to EOY in Fair Value of Awards Granted in Any Prior Fiscal Year that are Outstanding and Unvested at EOY ($) | Plus Fair Value at Vesting Date of Awards Granted and Vested During the Fiscal Year ($) | Plus (Minus) Change in Fair Value from BOY to Vesting Date of Awards Granted in Any Prior Fiscal Year that Vested During the Fiscal Year ($) | Minus Fair Value at BOY of Awards Granted in Prior Year that were Forfeited During the Fiscal Year ($) | Plus Value of Dividends or Other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Calculated CAP ($) | | PEO | | | | | | | | | | | | | 2025 | $4,671,414 | $0 | $0 | $3,840,346 | $3,848,324 | $(409,567) | $0 | $(27,287) | $0 | $0 | $4,242,538 | | 2024 | $9,092,935 | $0 | $0 | $8,526,949 | $3,254,606 | $(37,011) | $0 | $(38,782) | $0 | $0 | $3,744,799 | | 2023 | $3,204,682 | $0 | $0 | $2,472,858 | $1,362,906 | $(494,398) | $0 | $(4,526,664) | $0 | $0 | $(2,926,332) | | 2022 | $1,640,096 | $0 | $0 | $732,744 | $441,972 | $(2,832,849) | $0 | $522,391 | $0 | $0 | $(961,134) | | 2021 | $2,610,303 | $0 | $0 | $1,849,542 | $3,823,574 | $8,807,809 | $527,971 | $34,631 | $0 | $0 | $13,954,746 | | Average Non-PEO NEOs | | | | | | | | | | | | | 2025 | $3,454,639 | $0 | $0 | $2,644,490 | $2,640,910 | $37,211 | $0 | $(6,355) | $0 | $0 | $3,481,915 | | 2024 | $1,722,952 | $0 | $0 | $1,267,306 | $508,592 | $(28,080) | $0 | $(18,995) | $0 | $0 | $917,163 | | 2023 | $2,411,309 | $0 | $0 | $1,579,290 | $870,419 | $(346,322) | $0 | $(1,173,341) | $0 | $0 | $182,775 | | 2022 | $1,798,217 | $0 | $0 | $884,257 | $538,217 | $(606,465) | $0 | $277,834 | $0 | $0 | $1,123,546 | | 2021 | $1,897,737 | $0 | $0 | $1,160,146 | $3,029,668 | $2,417,441 | $511,489 | $24,123 | $0 | $0 | $6,720,313 |
Pay Versus Performance
“SCT” — Summary Compensation Table; “CAP” — Compensation Actually Paid; “EOY” — End of Year; “BOY” — Beginning of Year Equity valuations above are as follows: Stock option fair values are calculated based on a Monte Carlo simulation as of each measurement date. Performance-based restricted stock fair values are calculated assuming target performance on the grant date. Subsequent valuations reflected probable outcomes at each measurement date and the actual outcome when vested. All time-vested restricted stock fair values are determined based on the valuation assumptions at the time of the grant.
Relationship Between Compensation Actually Paid and Company Performance
Relationship Between Compensation Actually Paid and Company Performance The graphs below show the relationship between “compensation actually paid” to our PEO and Other NEOs and (i) the Company’s adjusted EBITDA performance (non-GAAP), (ii) the Company’s net income performance, and (iii) the Total Shareholder Return (“TSR”) of both the Company and the Russell 2000 Index, in each case for the fiscal years ended 2021, 2022, 2023, 2024 and 2025. In accordance with Item 402(v), the CAP calculation reflects, among others, adjustments to the fair value of equity awards during the years presented. Factors impacting the fair value of equity awards include the price of our common stock at year end, as well as the projected and actual achievement of performance goals.
CEO Pay Ratio
CEO Pay Ratio Under SEC rules, the Company is providing the following information for fiscal year 2025: ▪ The total compensation of the median employee, excluding the CEO, was $23,069 ▪ The annual total compensation of the CEO was $4,547,664 ▪ The ratio of CEO total compensation to median employee total compensation: 197 to 1 Our CEO pay ratio information is a reasonable good faith estimate calculated in a manner consistent with the SEC pay ratio rules and methods for disclosure. In order to determine the median employee, the Company examined W2 wages for the 2024 calendar year for all employees, excluding our CEO, employed as of December 31, 2024. On the determination date, our employee population consisted of 2,037 individuals, all located in the United States. This population consisted of our full-time, part-time, seasonal and temporary employees. There are no employee exclusions considered for median employee determination. Our median employee is an hourly associate, employed at an hourly rate of $18.80, working part-time. Our part-time employees are also eligible to participate in a field incentive program. Once we identified our median employee, we combined all the elements of the median employee’s compensation for fiscal year 2025 to determine the median employee total compensation in accordance with the requirements of item 402(c)(2)(x) of Regulation S-K and compared such total compensation to the total compensation of our CEO, as reported in the Summary Compensation Table.