DEF 14A of Titan Machinery Inc.
Filed Apr 22, 2025 · FY20250001409171-25-000038
BOARD OF DIRECTORS
BOARD OF DIRECTORS The Board consists of three classes of directors, which classes are, as of the date of this Proxy Statement, composed of: •three Class III directors who hold office until the 2025 Annual Meeting; •three Class I directors who hold office until the 2026 Annual Meeting; and •three Class II directors who hold office until the 2027 Annual Meeting. or, in all cases, until their successors are duly elected and qualified. The Governance/Nominating Committee has recommended, and the Board has approved, Frank Anglin, Richard Lewis, and David Meyer as director nominees for the three Class III director positions to be elected at the 2025 Annual Meeting. The following information states the principal occupations for at least the past five years of the 2025 director nominees and the remaining directors whose terms will continue beyond the Annual Meeting subject to the Company's age based retirement policy as applicable:
BOARD OF DIRECTORS
| 2025 Nominees Upon election, these Directors will Hold Office Until the 2028 Annual Meeting | Age | Position/Committee Membership/Biography | | Frank Anglin | 62 | Director; Governance/Nominating Committee; Compensation Committee | | | | Mr. Anglin has been a director of Titan Machinery since February 1, 2022. Since March 11, 2025, Mr. Anglin has served as the Chief Financial Officer for Interstate Companies, Inc., a heavy and medium duty truck dealership. Prior to his appointment as CFO, he served as the Vice President, West and South Regions, for Istate Truck Centers, a wholly owned subsidiary of Interstate Companies, Inc., since September 2019. From July 2018 to August 2019, Mr. Anglin served as Chief Executive Officer, President and Director for Boyer Trucks. From January 2017 to May 2018, he served as CEO and Board Director for Midwest Can and Container Specialties Inc. Prior to that, he served as CEO, President, and Director for Western Peterbilt Inc., and held a variety of management positions during his tenure at General Electric and CNH Industrial. Among other attributes, skills and qualifications that we believe make Mr. Anglin qualified to serve on our Board , Mr. Anglin brings to the Board his substantial leadership experience in the equipment manufacturing and truck dealership industries, which provides the Board with a seasoned perspective on dealership operations, equipment manufacturing, operating strategies, financing, and investment strategies. | | Richard Lewis | 54 | Director; Governance/Nominating Committee; Compensation Committee | | | | Mr. Lewis has been a director of Titan Machinery since February 1, 2024. A resident of Australia, Mr. Lewis currently serves as director and the principal executive of Iron Capital Group, a company founded by Mr. Lewis in 2015. Iron Capital Group offers equipment leasing solutions to earthmoving and mining customers in Australia and North America. Previously, Mr. Lewis was employed in various positions in the equipment finance and dealership industries. Mr. Lewis served as a director of the Australian Tractor and Machinery Association from 2002-2008, holding the position of chairperson for his final two years. In 2011, Mr. Lewis became a director of J.J. O’Connor & Sons Pty. Ltd. and was serving as Board Chair at the time of Titan’s acquisition of the O’Connors’ dealership business in October 2023. Among other attributes, skills, and qualifications that we believe make Mr. Lewis qualified to serve on our Board, Mr. Lewis has significant leadership experience in the Australian equipment industry, as well as in-depth knowledge of the equipment finance industry, operating strategies, financing and international business. |
BOARD OF DIRECTORS
| David Meyer | 71 | Chairman of the Board of Directors | | | | Mr. Meyer has served as our Chairman of the Board of Directors since 1980 and as Chief Executive Officer from 1980 through January 31, 2024. For the period from February 1, 2024 to January 31, 2025 he served as Executive Chairman of the Board of Directors. Mr. Meyer worked for JI Case Company in 1975. From 1976 to 1980, Mr. Meyer was a partner in a Case/New Holland Dealership with locations in Lisbon, North Dakota and Wahpeton, North Dakota. In 1980, Mr. Meyer, along with a partner, founded Titan Machinery Inc. Mr. Meyer has served on both the Case Construction and CaseIH Agriculture Dealer Advisory Boards. Mr. Meyer is the past chairman and past board member of the North Dakota Implement Dealers Association. Mr. Meyer currently serves as a Trustee of the University of Minnesota Foundation, Director on the North Dakota Community Foundation, and Director of the Evans Scholars Foundation (ESF) of the Western Golf Association (WGA). Among other attributes, skills and qualifications that we believe make Mr. Meyer qualified to serve on our Board, Mr. Meyer is uniquely qualified to serve as a director and the Board's Chair due to his in-depth knowledge of the Company's history, business and industry, and his ability to effectively identify strategic priorities and to lead the discussion and execution of strategy. | | Directors Who Hold Office Until the 2026 Annual Meeting | | Position/Committee Membership/Biography | | Tony Christianson | 72 | Director; Governance/Nominating Committee; Compensation Committee | | | | Mr. Christianson has been a director of Titan Machinery since January 2003. Since 1981, Mr. Christianson has been the Chairman of Cherry Tree Companies, an affiliated group of investment banking and wealth management firms in Minneapolis, Minnesota. Mr. Christianson also currently serves as managing partner of Adam Smith Companies, LLC, a holding company with investments in several companies, and as a director of MetaFarms, Inc., a privately-held SAS provider of information management for animal protein production. Among other attributes, skills and qualifications that we believe make Mr. Christianson qualified to serve on our Board, Mr. Christianson has comprehensive experience in the financial services and investment industries, as well as his experience as a public and private company director, which provides particular value to the Board with a seasoned view on financing, investment, acquisition and operating strategies, public company regulatory compliance issues, and investor relations. | | Christine Hamilton | 69 | Director; Chair of Governance/Nominating Committee; Audit Committee | | | | Ms. Hamilton has been a director of Titan Machinery since March 1, 2018. Ms. Hamilton is the co-owner and managing partner of Christiansen Land and Cattle, Ltd., a large diversified farming and ranching operation in central South Dakota, and is also the co-owner of Dakota Packing, Inc., a wholesale meat distribution business. Ms. Hamilton is a former director for the Federal Reserve Bank, Ninth District, located in Minneapolis, Minnesota, and is a current director of SAb Biotherapeutics, a publicly-traded clinical stage biopharmaceutical company, where she serves as chair of its compensation committee and a member of its nominating and corporate governance committee. Among other attributes, skills and qualifications that we believe make Ms. Hamilton qualified to serve on our Board, Ms. Hamilton brings to the Board her extensive experience in the agri-business sector and her unique knowledge of operating strategies, priorities and challenges facing our customers in the agriculture sector. |
BOARD OF DIRECTORS
| Bryan Knutson | 46 | Director; President and Chief Executive Officer | | | | Mr. Knutson has served as a director and President and Chief Executive Officer of Titan Machinery since February 1, 2024. Prior to that, Mr. Knutson was our Chief Operating Officer since 2017, adding the position of President in 2022. Prior to these executive roles, Mr. Knutson led Titan Machinery's North American Agriculture and Construction Equipment Operations and has implemented lasting positive changes across the organization, leveraging his first-hand experience as a Sales Consultant, General Manager, and various Senior Field positions during his tenure at the Company, which commenced in September 2002. Mr. Knutson is past Chairman of the Board of the Pioneer Equipment Dealers Association, which represents Equipment Dealers in Minnesota, North Dakota, and South Dakota. He has served long tenures on both the Case IH Agriculture and Case Construction Dealer Advisory Boards. Among other attributes, skills, and qualifications that we believe make Mr. Knutson qualified to serve on our Board, Mr. Knutson brings to the Board his in-depth knowledge of the Company’s operations, history, and culture, knowledge of the equipment dealership industry, and the ability to identify strategic priorities for the Company. | | Directors Who Hold Office Until the 2027 Annual Meeting | | Position/Committee Membership/Biography | | Stan Erickson | 74 | Lead Independent Director; Audit Committee | | | | Mr. Erickson has been a director of Titan Machinery since March 1, 2017. Mr. Erickson currently serves as the President and Chief Executive Officer of Liberty Capital, Inc., which provides capital and investment services. Mr. Erickson co-founded Liberty Capital in 2013 after retiring from a 32-year career at Ziegler Inc., a Caterpillar dealer, where he most recently served as President and Chief Operating Officer. Mr. Erickson is a veteran of the United States Marine Corps and currently serves on the board of directors of Electromed, Inc., a publicly-traded company, where he is chair of the audit committee and a member of the nominating and governance committee. Mr. Erickson also currently serves on the board of directors of McAninch Corporation, a privately-held construction company based in Des Moines, Iowa. Among other attributes, skills and qualifications that we believe make Mr. Erickson qualified to serve on our Board, Mr. Erickson has significant senior leadership experience in the equipment industry, as well as experience as a public company director, which provides the Board with a strong perspective on financing, investment, acquisition and operating strategies, public company regulatory compliance issues, and investor relations. | | Jody Horner | 63 | Director; Chair of Compensation Committee; Audit Committee | | | | Ms. Horner has been a director of Titan Machinery since August 1, 2015. In February 2015, Ms. Horner was appointed President of Midland University, a private liberal arts college located in Fremont, Nebraska, a position from which she will retire effective at the end of the current academic year. Prior to joining Midland University, Ms. Horner spent over 30 years at Cargill, Inc., holding several leadership positions including President of Cargill Meat Solutions, President of Cargill Case Ready, President of Cargill Salt, Vice President - Corporate Global Diversity, and Vice President - Human Resources. At Cargill, Ms. Horner was a member of several corporate committees including the Global Business Conduct & Ethics Committee and the Global Enterprise Process, Data and Technology Committee. Ms. Horner currently serves as a director and board chair of H.J. Baker & Bro., LLC, a privately-held sulphur and animal nutrition industry company. Among other attributes, skills and qualifications that we believe make Ms. Horner qualified to serve on our Board, Ms. Horner brings valuable insight to the Board based on her extensive experience in leadership positions and her broad knowledge of financial matters, operating strategies, agri-business markets, and human resources. |
BOARD OF DIRECTORS
| Richard Mack | 57 | Director; Chair of Audit Committee | | | | Mr. Mack has been a director of Titan Machinery since June 4, 2015. From June 2014 through his retirement in January 2018, Mr. Mack served as Executive Vice President and Chief Financial Officer for The Mosaic Company, a leading international producer and marketer of phosphate and potash crop nutrients. Prior to that, Mr. Mack held the position of Senior Vice President, General Counsel and Corporate Secretary for Mosaic from the date of its initial public offering in 2004 until his promotion in 2009 to Executive Vice President (while continuing his role as General Counsel and Corporate Secretary). In the decade prior to Mosaic's formation, he served in various legal positions at Cargill, Inc., and was a founding executive of Mosaic and Cargill Ventures. Mr. Mack was also the founder of the Streamsong Resort, which is owned by Mosaic. Mr. Mack served from 2018 through 2022 as a director and audit committee chair of Anuvia Plant Nutrient Holdings, Inc., which is a privately-held crop nutrient company. Mr. Mack currently serves as a director and finance committee chair of H.J. Baker & Bro., LLC, a privately-held sulphur and animal nutrition industry company. Among other attributes, skills and qualifications that we believe make Mr. Mack qualified to serve on our Board, Mr. Mack brings to the Board significant experience as a public company executive, along with extensive knowledge of public company finance and financial statements, capital markets, corporate governance, agri-business markets, mergers and acquisitions, operating strategies, and international business. |
Board Skills and Experience Matrix
Board Skills and Experience Matrix The following matrix provides information regarding the members of our Board, including certain types of knowledge, skills, experiences and attributes possessed by one or more of our directors, which our Board believes are relevant to our business structure, and the tenure of our directors. The matrix does not encompass all of the knowledge, skills, experiences or attributes of our directors, and the fact that a particular knowledge, skill, experience or attribute is not listed does not mean that a director does not possess it. In addition, the absence of a particular knowledge, skill, experience or attribute with respect to any of our directors does not mean the director in question is unable to contribute to the decision-making process in that area. The type and degree of knowledge, skill and experience listed below may vary among the members of the Board. As shown by the tenure of our directors below, the Board also believes it is desirable to maintain a mix of experienced, longer-tenured directors who possess deep institutional knowledge along with newer directors who have different expertise, backgrounds and fresh perspectives.
Board Skills and Experience Matrix
| | F. Anglin | T. Christianson | S. Erickson | C. Hamilton | J. Horner | B. Knutson | R. Lewis | R. Mack | D. Meyer | | Knowledge, Skills and Experience | | | | | | | | | | | Other Public Company Board Experience | | X | X | X | | | | | | | Executive Leadership | X | X | X | X | X | X | X | X | X | | Industry Knowledge | X | X | X | X | | X | X | X | X | | Finance and Accounting | | X | X | X | X | | | X | X | | Corporate Strategy and Execution | X | X | X | X | X | X | X | X | X | | Sales and Marketing | X | | | | | X | X | X | X | | Corporate Governance and Compliance | X | X | X | X | X | | | X | X | | Operations and Supply Chain | X | | X | | X | X | X | X | X | | International Operations | X | | | | X | X | X | X | X | | Human Capital and Executive Compensation | X | | X | X | X | X | X | X | X | | Risk Management | X | X | X | X | X | | X | X | X | | Technology and Data Security | | X | X | | | | | | | | Director Independence | X | X | X | X | X | | X | X | | | Board Tenure | | | | | | | | | | | Years | 4 | 18 | 8 | 7 | 10 | 2 | 2 | 10 | 18 |
Board Skills and Experience Matrix
The demographic background of our directors includes ethnicity (one director) and gender (two directors). Our Board believes that the current composition of the Board as a whole reflects an appropriate mix of tenure, skill sets, backgrounds and perspectives, experience and qualifications that are relevant to the Company's business strategy and governance.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
(PROPOSAL 1)
(PROPOSAL 1)
2025 Director Nominees
2025 Director Nominees The Governance/Nominating Committee recommended to the Board that the following persons be nominated and elected as directors at the Annual Meeting, which persons were then formally nominated by the Board:
2025 Director Nominees
| Frank Anglin | | Richard Lewis | | David Meyer |
2025 Director Nominees
The nominees are currently Class III Directors whose terms expire at the upcoming 2025 Annual Meeting. Each of the nominees has consented to being named as a nominee. If elected, each nominee will serve a three-year term until the 2028 Annual Meeting or until his or her successor is duly elected and qualified, subject to the Company's age-based retirement policy as applicable. If any nominee is unable or declines to serve as a director at the time of the Annual Meeting, proxies will be voted for the nominee designated by the Board to fill the vacancy. THE BOARD RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES TO THE BOARD OF DIRECTORS SET FORTH IN THIS PROPOSAL 1.
NON-EMPLOYEE DIRECTOR COMPENSATION
NON-EMPLOYEE DIRECTOR COMPENSATION Our non-employee directors receive cash and restricted stock awards as compensation for their service as directors pursuant to our Non-Employee Director Compensation Plan, which, for fiscal 2025, was as follows:
NON-EMPLOYEE DIRECTOR COMPENSATION
| | Cash Retainer ($) | Restricted Stock Awards ($) | | Compensation for each non-employee director | 55,000 | 80,000 | | Additional cash retainers: | | | | Audit Committee Chair | 25,000 | | | Compensation Committee Chair | 10,000 | | | Governance/Nominating Committee Chair | 10,000 | | | Lead Independent Director | 15,000 | |
NON-EMPLOYEE DIRECTOR COMPENSATION
We also reimburse our non-employee directors for reasonable expenses incurred in connection with their service as directors. Directors who are appointed to the Board during the year receive a prorated cash retainer and restricted stock award, the equity component of which is granted on the director's effective start date and has the same vesting date as awards to directors who serve for the full year. Under the terms of the Non-Employee Director Compensation Plan, the cash portion of the non-employee director retainer (both the Board annual retainer and any committee chair, lead independent director, or chair retainer) is to be paid in arrears in equal quarterly installments on approximately the final business day of each fiscal quarter. Restricted stock awards under the Non-Employee Director Compensation Plan are granted on the date of the annual meeting of stockholders each year, and vest on the date of the next annual meeting of stockholders or such other date as determined by the Compensation Committee. In addition, pursuant to the Non-Employee Director Compensation Plan, unvested restricted stock awarded to a director is automatically forfeited upon termination from service, unless the reason for termination from service is as a result of death, permanent disability (as determined by the Compensation Committee), or mandatory retirement pursuant to the Board’s retirement policy in which case the unvested restricted stock award will vest pro rata based upon the term of service as compared to the vesting period. Mr. Meyer served as Executive Chairman of the Board, and remained an employee of the Company, for fiscal 2025 ending January 31, 2025. Effective February 1, 2025, Mr. Meyer is no longer an employee of the Company and serves as Chairman of the Board and will be entitled to the cash retainer and restricted stock award stated above. In addition, beginning in fiscal 2026, the Board approved an additional annual cash retainer in the amount of $95,000 for the non-employee Chairman of the Board position. The following table provides compensation information for our non-employee directors during fiscal 2025:
NON-EMPLOYEE DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Total ($) | | Frank Anglin | 55,000 | 80,000 | 135,000 | | Tony Christianson | 55,000 | 80,000 | 135,000 | | Stan Erickson | 70,000 | 80,000 | 150,000 | | Christine Hamilton | 65,000 | 80,000 | 145,000 | | Jody Horner | 65,000 | 80,000 | 145,000 | | Richard Lewis | 55,000 | 80,000 | 135,000 | | Richard Mack | 80,000 | 80,000 | 160,000 |
NON-EMPLOYEE DIRECTOR COMPENSATION
(1)These amounts represent the grant date fair value for each grant awarded in fiscal 2025, valued in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, Compensation—Stock Compensation. Each director included in this table received an award of 4,396 restricted shares based on the $18.20 closing price for our Common Stock on the grant date of June 3, 2024. In addition, each director included in this table continued to hold their respective 4,396 restricted shares as of the end of fiscal 2025 on January 31, 2025.
Executive Compensation Overview for Fiscal 2025
Executive Compensation Overview for Fiscal 2025 •In fiscal 2025, Mr. Meyer, consistent with his employment agreement effective February 1, 2024, was not eligible to receive any equity awards or an annual performance cash bonus. •In fiscal 2025, Messrs. Knutson and Larsen did not earn an annual performance cash bonus due to the Company's failure to achieve threshold targets for any of the three performance objectives. •The Compensation Committee compared our compensation program and the compensation of our named executive officers with our peer group, and concluded that our current executive compensation program is reasonable and appropriate. •The Compensation Committee believes that our executive compensation program properly aligns the interests of our named executive officers with the interests of our stockholders. •In fiscal 2025, the Compensation Committee engaged Mercer LLC ("Mercer") as our independent compensation consultant to assess and update the Company's peer group for compensation benchmarking purposes and to perform a market compensation study for certain executive positions and non-employee directors.
Risk Mitigation
Risk Mitigation As discussed above, the Compensation Committee annually reviews and seeks to address risks arising out of the Company’s executive compensation program. The Compensation Committee strives to implement an executive compensation program that is simple, transparent, and devoid of perks and other benefits not provided to all employees. The Compensation Committee has established a cap on the amount eligible to be earned by each executive under the Company's annual cash incentive program, with no additional cash bonus being payable upon the achievement of greater than the established maximum goal for each financial metric that is part of the annual cash incentive program. The Compensation Committee has developed and monitors minimum stock ownership guidelines for executives, aligning the interests of executives with stockholders. Further supporting risk mitigation, the Board has adopted a robust anti-hedging/pledging policy and a clawback policy.
Fiscal 2025 Executive Compensation as Compared to our Peer Group
Fiscal 2025 Executive Compensation as Compared to our Peer Group During fiscal 2025, the Compensation Committee approved the retention of Mercer, an independent compensation consultant to provide analysis and recommendations on the Company's peer group, the Company’s executive compensation program, and the Company's non-employee director compensation program. In connection with this engagement, the Compensation Committee determined that, based upon an assessment of the factors described in the listing standards for the Nasdaq Stock Market, Mercer was independent and that the engagement of Mercer did not present any conflicts of interest. The Compensation Committee reviewed the Mercer executive compensation market data and compared this data to the target total direct compensation of our named executive officers, consisting of base salary, annual performance cash bonus, and the grant date fair value of restricted stock equity awards. The Compensation Committee does not target compensation at a particular benchmark of the peer group analysis or otherwise make any determination of, or change to, compensation in reaction to market data alone. Rather, the Compensation Committee uses this information as one of several considerations to make its judgments and determinations of appropriate compensation levels for our named executive officers.
Equity Award Timing Policies and Practices
Equity Award Timing Policies and Practices We do not grant equity awards in anticipation of the release of material nonpublic information, and we do not time the release of material nonpublic information based on equity award grant dates or for the purpose of affecting the value of executive compensation. Furthermore, we do not take material nonpublic information into account when determining the timing and terms of such awards. We have no policies or practices to disclose pursuant to Item 402(x) of Regulation S-K. In fiscal 2025, we did not grant new awards of stock options to our named executive officers during the time period outlined in Item 402(x) of Regulation S-K.
Peer Group
Peer Group The Compensation Committee engaged Mercer in fiscal 2025 as our independent compensation consultant to assess and update the Company's peer group for compensation benchmarking purposes. The Company’s executive officers did not participate in the selection of the companies for inclusion in the peer group. The Compensation Committee asked Mercer to develop a peer group by considering companies that: •were compatible with the Company’s compensation strategy; •were an accurate reflection of the typical external labor market; •were consistent with the Company’s size and complexity of operations; and •could be easily described to external constituents. Based on these considerations, the peer group for the Company recommended by Mercer, and approved by the Compensation Committee, consists of the following companies:
Peer Group
| Alamo Group, Inc. | MarineMax, Inc. | | Alta Equipment Group Inc. | Monro, Inc. | | Applied Industrial Technologies, Inc. | MRC Global Inc. | | Camping World Holdings, Inc. | MSC Industrial Direct Co., Inc. | | DXP Enterprises, Inc. | Rush Enterprises, Inc. | | GATX Corporation | The Manitowoc Company, Inc. | | H&E Equipment Services, Inc. | Titan International, Inc. | | Herc Holdings Inc. | |
Annual Performance Cash Bonus
Annual Performance Cash Bonus We establish competitive annual cash incentive opportunities for our named executive officers that link annual cash incentive compensation to the achievement of the Company's annual financial performance objectives of the business. Each executive has a target bonus ("Target Bonus"), which is a percentage of the executive's annual base salary, under the annual incentive cash bonus plan. Mr. Knutson was eligible to earn a cash bonus for fiscal 2025 ranging from 0% to 200% of his annual base salary, with the target bonus equal to 100% of his annual base salary or $575,000 (100% X $575,000). Mr. Larsen was eligible to earn a cash bonus for fiscal 2025 ranging from 0% to 150% of his annual base salary, with the target bonus equal to 75% of his annual base salary or $337,500 (75% X $450,000). Mr. Meyer was not eligible to participate in the fiscal 2025 annual cash bonus plan. For the annual cash bonus plan, our Compensation Committee establishes the financial performance categories for the fiscal year and the weight for each of the categories. The performance categories for the fiscal 2025 annual cash bonus plan were: 1. Adjusted Pre-Tax Income: The Company's pre-tax income, determined in accordance with Generally Accepted Accounting Principles ("GAAP"), adjusted to exclude the pre-tax income impact from gains or losses that occur outside of the ordinary course of our business. For fiscal 2025, the only adjustment from GAAP pre-tax income for purposes of the calculation of Adjusted Pre-Tax Income were adjustments for Disqualified Sale Leaseback real estate purchases. 2. Return on Assets ("ROA"): Calculated as Adjusted Pre-Tax Income (see above) divided by our average monthly total assets less available cash. 3. Total Revenue: The Company's GAAP total revenue from its statement of operations. The Compensation Committee allocated a portion of the eligible bonus amount to each of the financial performance categories as follows:
Annual Performance Cash Bonus
| Financial Performance Category | % Allocation of Eligible Bonus Amount | | Adjusted Pre-Tax Income | 40% | | Return on Assets | 30% | | Total Revenue | 30% |
Annual Performance Cash Bonus
The threshold, target and maximum financial goals for each metric are determined by the Compensation Committee in consideration of the Company's budget and financial estimates for the fiscal year, with the target goals deemed a realistic, but challenging goal and the maximum goal deemed a "stretch" goal for high performance. The threshold, target, and maximum goals for each of the three financial performance categories for the fiscal 2025 cash incentive plan are stated in the discussion below. For fiscal 2025, the payout percentage at each of the goals (threshold, target and maximum) is stated as follows: •20% of Target Bonus payable upon achievement of threshold goal; •100% of Target Bonus payable upon achievement of target goal; and •200% of Target Bonus payable upon achievement of maximum goal. If the threshold goal is not satisfied for any financial performance category, then no bonus is payable for that category. If actual performance by the Company for any financial performance category falls between the threshold and target goals or between the target and maximum goals, then the percentage payout for that category is calculated proportionately based on where the actual performance falls within the range between the threshold and target goals or the range between the target and maximum goals, as applicable. No additional payment in excess of the maximum bonus amount is earned for performance exceeding the maximum goals. The calculated percentage payout for each financial metric, based on actual performance for the year, is referred to below as the "bonus payout percentage". For each of the three financial performance categories, the cash bonus earned by the executive is calculated as follows: [the dollar amount of the Target Bonus for the executive i.e., $575,000 for Mr. Knutson, and $337,500 for Mr. Larsen] X [% of the eligible bonus amount allocated to the financial performance category - i.e., 40% for Adjusted Pre-Tax Income, 30% for ROA, and 30% for Total Revenue] X [the bonus payout percentage for the category based on actual results]. The cash bonus paid to the executive is equal to the sum of the bonus amounts earned for each financial performance category. As stated above, Mr. Meyer was not eligible to participate in the fiscal 2025 annual cash bonus plan, and accordingly he was not paid a cash bonus. Under the fiscal 2025 cash bonus plan, Mr. Knutson earned a bonus of $0 as described below.
Annual Performance Cash Bonus
| | Maximum Percent of Base Salary Eligible for Cash Bonus | Eligible Max Cash Bonus Amount | Target Bonus | Bonus Earned | Bonus Earned as a % of Target | | Bryan Knutson | 200% | $1,150,000 | $575,000 | 0 | 0.00% |
Annual Performance Cash Bonus
Under the fiscal 2025 cash bonus plan, Mr. Larsen earned a bonus of $0 as described below.
Annual Performance Cash Bonus
| | Maximum Percent of Base Salary Eligible for Cash Bonus | Eligible Max Cash Bonus Amount | Target Bonus | Bonus Earned | Bonus Earned as a % of Target | | Robert Larsen | 150% | $675,000 | $337,500 | 0 | 0.00% |
Annual Performance Cash Bonus
The threshold, target and maximum goals, the applicable bonus payout percentages at these goal levels, and the bonus calculation for each financial performance category are stated below:
1.Adjusted Pre-Tax Income (40%)
| | Adjusted Pre-Tax Income Goals | Payout Percentages | | Threshold | $100,696,755 | 20% | | Target | $111,885,283 | 100% | | Maximum | $139,856,604 | 200% |
2.Return on Assets (30%)
| | Return on Assets | Payout Percentages | | Threshold | 4.71% | 20% | | Target | 5.23% | 100% | | Maximum | 6.54% | 200% |
2.Return on Assets (30%)
Our fiscal 2025 Return on Assets was (2.0)%, which was below the threshold goal. Therefore, our named executive officers did not receive a cash bonus attributable to this performance category. 3.Total Revenue (30%) The goals and bonus payout percentage at each goal level are stated below:
2.Return on Assets (30%)
| | Total Revenue Goals | Percentage Payout | | Threshold | $2,781,550,885 | 20% | | Target | $3,090,612,094 | 100% | | Maximum | $3,863,265,118 | 200% |
Long-Term Equity Incentive Awards
Long-Term Equity Incentive Awards Under the terms of Mr. Meyer's employment agreement, he was not entitled to receive an equity incentive award in fiscal 2025. Mr. Knutson received an award of 31,593 shares of restricted stock with a grant date fair value of $574,993 (31,593 shares at $18.20 per share, the closing price of our Common Stock on June 3, 2024). One-fourth of Mr. Knutson's 2024 restricted stock award vests on each of April 1, 2025, 2026, 2027, and 2028, respectively. Mr. Larsen received an award of 24,725 shares of restricted stock with a grant date fair value of $449,995 (24,725 shares at $18.20 per share, the closing price of our Common Stock on June 3, 2024). One-fourth of Mr. Larsen's 2024 restricted stock award vests on each of April 1, 2025, 2026, 2027, and 2028, respectively. All awards of restricted stock were made under the Second Amended and Restated Titan Machinery Inc. 2014 Equity Incentive Plan (the "2014 Equity Plan"), which is administered by our Compensation Committee. Consistent with our compensation philosophies related to performance-based compensation, long-term stockholder value creation and alignment of our management's interests with those of our stockholders, we may make future awards of long-term compensation in the form of stock options, restricted stock units (either time-based or performance-based), or restricted stock awards to our named executive officers and other key employees. In the future, we may, from time to time, make one-time awards to recognize promotion or consistent long-term contribution, or for specific incentive purposes. We may also make awards in connection with the hiring of new employees.
Employment Agreements
Employment Agreements During fiscal 2025, we had written employment agreements with David Meyer to serve as our Executive Chairman of the Board of Directors, Bryan Knutson to serve as our President and Chief Executive Officer, and Robert Larsen to serve as our Chief Financial Officer. On October 17, 2023, the Company and Mr. Meyer entered into an amendment to Mr. Meyer’s existing employment agreement with the Company. This amendment provided that Mr. Meyer’s employment as the Company’s Chief Executive Officer would end on January 31, 2024, at which time Mr. Meyer would accept the role of Executive Chairman of the Board of Directors for a 12-month period beginning February 1, 2024 and ending January 31, 2025. Mr. Meyer's employment agreement ended on January 31, 2025. He currently serves as Chairman of the Board and is entitled to compensation under the Company's Non-Employee Director Compensation Plan. Mr. Knutson’s current employment agreement has an initial three-year term with automatic annual one-year extensions (running from February 1 through January 31), subject to earlier termination, as described below under "Potential Payments Upon Termination or Change-In-Control". Pursuant to the agreement, Mr. Knutson is paid a base salary as established by our Compensation Committee and subject to ratification by the Board of Directors. As of January 31, 2025, Mr. Knutson's base salary is $575,000. The agreement provides that Mr. Knutson may receive yearly equity incentive awards in a dollar amount equal to his base salary, as further discussed above under "Long-Term Equity Incentive Awards," pursuant to terms, conditions and annual objectives established by our Compensation Committee. Mr. Knutson is also eligible for an annual performance cash bonus up to 200% of his base salary pursuant to terms, conditions and annual objectives established by the Compensation Committee. Mr. Knutson is eligible to participate in any employee benefit plans and programs generally available to our employees. Mr. Larsen’s current employment agreement has a rolling three-year term with automatic annual one-year extensions (running from February 1 through January 31), subject to earlier termination, as described below under "Potential Payments Upon Termination or Change-In-Control". Pursuant to the agreement, Mr. Larsen is paid a base salary as established by our Compensation Committee. As of January 31, 2025, Mr. Larsen's base salary was $450,000 per year. Mr. Larsen is also eligible for an annual performance cash bonus of up to 150% of his base salary pursuant to terms, conditions and annual objectives established by the Compensation Committee. The agreement also provides that Mr. Larsen may receive yearly equity incentive awards in a dollar amount equal to his base salary, as further discussed above under "Long-Term Equity Incentive Awards," pursuant to terms, conditions and annual objectives established by our Compensation Committee. Mr. Larsen is eligible to participate in any employee benefit plans and programs generally available to our employees.
Summary Compensation Table for Fiscal 2025
Summary Compensation Table for Fiscal 2025 The table below sets forth certain information regarding compensation earned during the last three fiscal years by the Company's named executive officers.
Summary Compensation Table for Fiscal 2025
| Name and Principal Position | Fiscal Year | Salary ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Bryan Knutson, President & Chief Executive Officer | 2025 | 575,000 | 574,993 | — | 11,865 | 1,161,858 | | | 2024 | 516,667 | 525,006 | 323,425 | 11,313 | 1,376,411 | | | 2023 | 470,000 | 499,996 | 680,327 | 10,475 | 1,660,798 | | Robert Larsen, Chief Financial Officer | 2025 | 440,000 | 449,995 | — | 11,600 | 901,595 | | | 2024 | 413,333 | 419,999 | 258,740 | 11,317 | 1,103,389 | | | 2023 | 100,000 | 50,018 | 137,184 | 49,240 | 336,442 | | David Meyer, Executive Chairman (5) | 2025 | 500,000 | — | — | 14,008 | 514,008 | | | 2024 | 491,667 | — | — | 12,292 | 503,959 | | | 2023 | 475,000 | — | — | 11,875 | 486,875 |
Summary Compensation Table for Fiscal 2025
(1)Amounts shown are not reduced to reflect the named executive officers' elections, if any, to contribute portions of their salaries to 401(k) plans. (2)Amounts represent the grant date fair value of time-based restricted stock awards granted in each fiscal year. The fair value of these awards is determined based on the closing market price of the Company's stock on the date of grant. See the Grants of Plan-Based Awards for Fiscal 2025 table for further information regarding the equity awards granted in fiscal 2025 and the Outstanding Equity Awards at January 31, 2025 table for information regarding all outstanding equity awards. (3)Amount represents the cash bonus compensation earned in each fiscal year under our annual performance cash bonus plan. (4)For each fiscal year, amounts for Messrs. Knutson, Larsen, and Meyer represent a Company match to the 401(k) plan. For Mr. Larsen for fiscal 2023, this number also includes tuition reimbursement of $47,907. (5)As discussed above, for fiscal years 2025, 2024, and 2023, Mr. Meyer did not receive an equity award and did not participate in the annual performance cash bonus plan.
Grants of Plan-Based Awards for Fiscal 2025
Grants of Plan-Based Awards for Fiscal 2025 The following table sets forth information regarding awards to Messrs. Meyer, Knutson, and Larsen, our named executive officers, of plan-based awards (annual performance cash bonus and long-term equity incentive) in fiscal 2025:
Grants of Plan-Based Awards for Fiscal 2025
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards($)(1) | | | All Other Stock Awards: Number of Shares of Stock(#)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | Name | Grant Date | Threshold | Target | Maximum | | | | Bryan Knutson | 6/3/2024 | 115,000 | 575,000 | 1,150,000 | 31,593 | 574,993 | | Robert Larsen | 6/3/2024 | 67,500 | 337,500 | 675,000 | 24,725 | 449,995 | | David Meyer | — | — | — | — | — | — |
Grants of Plan-Based Awards for Fiscal 2025
(1)Amounts shown in the table reflect the potential amount of annual performance cash bonuses that could have been earned in fiscal 2025 by Mr. Knutson and Mr. Larsen, based on meeting the threshold goals, target goals and maximum goals amounts, as defined in our fiscal 2025 annual performance cash bonus plan. Actual amounts earned by the named executive officers for fiscal 2025 are reported in the Summary Compensation Table on page 31 under the column entitled "Non-Equity Incentive Plan Compensation." (2)Mr. Knutson and Mr. Larsen each received an award of restricted stock on June 3, 2024. The risk of forfeiture for these awards will lapse ratably on April 1st of each year from 2025 to 2028. (3)This amount represents the grant date fair value of the restricted stock determined in accordance with FASB ASC Topic 718, Compensation-Stock Compensation.
Outstanding Equity Awards at January 31, 2025
Outstanding Equity Awards at January 31, 2025 The following table sets forth certain information regarding equity awards granted to our named executive officers outstanding as of January 31, 2025:
Outstanding Equity Awards at January 31, 2025
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Bryan Knutson | — | — | — | — | — | 58,965 | 1,103,825 | — | — | | Robert Larsen | — | — | — | — | — | 37,216 | 696,684 | — | — | | David Meyer | — | — | — | — | — | — | — | — | — |
Outstanding Equity Awards at January 31, 2025
(1)For Mr. Knutson, 20,585 shares vest on April 1, 2025; 17,623 shares vest on April 1, 2026; 12,858 shares vest on April 1, 2027; and 7,899 shares vest on April 1, 2028. For Mr. Larsen, 10,441 shares vest on April 1, 2025; 10,443 shares vest on April 1, 2026; 10,150 shares vest on April 1, 2027; and 6,182 shares vest on April 1, 2028. (2)The market value of the unvested shares has been computed using the closing price of our Common Stock of $18.72 on January 31, 2025 (the last trading day of fiscal 2025).
Option Exercises and Stock Vested for Fiscal 2025
Option Exercises and Stock Vested for Fiscal 2025
Option Exercises and Stock Vested for Fiscal 2025
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | | Bryan Knutson | — | — | 21,521 | 516,504 | | Robert Larsen | — | — | 4,260 | 102,240 | | David Meyer | — | — | — | — |
Option Exercises and Stock Vested for Fiscal 2025
(1)Represents shares of restricted stock as to which the risk of forfeiture lapsed on April 1, 2024. (2)Calculated based on the closing share price of our Common Stock of $24.00 on April 1, 2024, the date the risk of forfeiture lapsed with regard to Mr. Knutson's 21,521 shares of restricted stock and Mr. Larsen's 4,260 shares of restricted stock.
Potential Payments upon Termination or Change-In-Control
Potential Payments upon Termination or Change-In-Control The following is a discussion of the agreements, plans or arrangements that provide for payments or benefits to our named executive officers in connection with any termination of employment or change in control of the Company. As provided under "Compensation Discussion and Analysis - Employment Agreements," we were party to an employment agreement with Mr. Meyer in connection with his service as Executive Chairman of the Board, which commenced February 1, 2024 and terminated on January 31, 2025. After termination of that agreement, as of February 1, 2025, we are no longer required to pay any severance or other similar amounts to Mr. Meyer upon a termination or a change in control. We are also party to an employment agreement with Mr. Knutson, effective February 1, 2024, which provides that if Mr. Knutson is terminated by us without "cause" prior to the expiration of the term or if he resigns for "good reason" (in either case, not following a "change in control"): (a) we are obligated to pay severance in an amount equal to the sum of (i) his annual base salary plus (ii) the amount of the average annual incentive bonus paid to Mr. Knutson in the three years preceding termination or such fewer number of years during which he has been employed in his current position or if he has not yet received an incentive bonus in his current position then the target bonus under his employment agreement (100% of base salary); (b) his non-vested restricted equity awards that vest based solely on continued employment will vest; and (c) we are required to allow Mr. Knutson to continue to participate in our group medical and dental plans under the same cost sharing arrangement that applied on the last day of employment for a period of 12 months. If such termination occurred on January 31, 2025, (not following a "change in control"), Mr. Knutson would have been entitled to a severance payment of $1,150,000 (paid in equal monthly installments over 12 months) calculated as follows: the sum of (i) the current base salary of $575,000, plus (ii) the amount of the target incentive bonus of $575,000 (the target incentive is used if he has not been paid an incentive bonus while holding his current position, thereafter it would be the average of the incentive payment over the preceding three years or lesser number of years that he has served). In addition, the Company would pay for the employer share, in effect on the last day of employment, of the cost of his participation in our group medical and dental plans for the 12 month period following termination (as of January 31, 2025, the employer's share of the premium cost is $758.26 per month). Assuming a termination date of January 31, 2025, the value of the non-vested equity awards that would vest following the termination would be $1,103,825, calculated based upon the closing price of our Common Stock on January 31, 2025 of $18.72 (the actual vesting date and corresponding value of stock would be as of the first day following the release having become effective). If Mr. Knutson is terminated by the Company without "cause" within 12 months following a "change in control" or if he resigns for "good reason" within 12 months following a "change in control", the Company is obligated to pay severance in an amount equal to two times the sum of (i) the annual base salary then in effect, plus (ii) the amount of the average annual incentive bonus paid to Mr. Knutson in the three years preceding the termination or such lesser number of years served, or if he has not yet received an incentive bonus in his current position then the target bonus under his employment agreement (100% of base salary). These severance payments would be made in 24 equal monthly installments. Also, Mr. Knutson's equity awards would become fully vested and earned as of the first day following the expiration of the rescission period under the release. If such termination occurs we would also be required to allow Mr. Knutson to continue to participate in our group medical and dental plans under the same cost sharing arrangement that applied on the last day of employment for a period of 24 months following termination. If Mr. Knutson was terminated on January 31, 2025 following a "change in control", under the terms of his current employment agreement effective February 1, 2024, he would have been entitled to a severance payment of $2,300,000 (paid in equal monthly installments over 24 months) calculated as follows: two times the sum of (i) the current base salary of $575,000, plus (ii) the amount of the target annual incentive bonus of $575,000. In addition, the Company would pay for the employer share, in effect on the last day of employment, of the cost of his participation in our group medical and dental plans for the 24 month period following termination (as of January 31, 2025, the employer's share of the premium cost is $758.26 per month). Assuming a termination date of January 31, 2025, the value of the equity awards that would vest following a change in control would be $1,103,825, calculated based upon the closing price of our Common Stock on January 31, 2025 of $18.72 (the actual vesting date and corresponding value of stock would be as of the first day following the release having become effective). Under Mr. Knutson's employment agreement, “cause” is defined to mean any of the following: (i) material breach of the employment agreement; (ii) willful refusal to perform assigned duties without justification, or willful misconduct or gross negligence in the performance of duties; (iii) a material breach of the Company’s material policies or codes of conduct or of material obligations under any other agreement; (iv) the willful engagement in dishonesty, fraud, illegal conduct, with respect to or in the course of the business or affairs of the Company, which materially and adversely harms the Company; (v) conviction of, or a plea of nolo contendere to, a felony or other crime involving moral turpitude; and (vi) death or permanent disability. In addition, “good reason” is defined to mean any of the following: (i) the assignment to Mr. Knutson of material duties inconsistent with his status or position as President and Chief Executive Officer, or other action that results in a material change in Mr. Knutson's status, responsibilities, duties, authority, base salary, compensation, position, or change in reporting relationship; (ii) the relocation of the principal office for Company business to a location more than forty (40) miles from the Company’s current headquarters; (iii) material breach by the Company of any terms or conditions of the employment agreement; or (iv) the failure of the Company to require a successor to assume the terms of the employment agreement. In addition, “change in control” is defined to mean the occurrence of any of the following: (i) one person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total voting power of the stock of the Company; (ii) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or (iii) the sale of all or substantially all of the Company’s assets.
Potential Payments upon Termination or Change-In-Control
Under the terms of the Company's various restricted stock agreements, if Mr. Knutson's employment with the Company terminated on account of his death, any unvested shares of restricted stock would become 100% vested. In addition, if Mr. Knutson's employment with the Company terminated on account of his disability or retirement, any unvested shares of restricted stock would become 100% vested. For this purpose, "disability" means that Mr. Knutson's employment is severed due to disability under the Company's long-term disability plan, and "retirement" means Mr. Knutson's retirement from the Company on or after attaining age 64 and completion of 5 years of service (or pursuant to early retirement with the consent of the Compensation Committee). Mr. Knutson is not currently retirement eligible under the restricted stock agreements. If Mr. Knutson's employment with the Company had terminated on January 31, 2025 on account of his death or disability, the value of the restricted stock awards that would have vested would be $1,103,825 . We are party to an employment agreement with Mr. Larsen, which provides that if Mr. Larsen is terminated by us without "cause" prior to the expiration of the term or if he resigns for "good reason" (in either case, not following a "change in control"): (a) we are obligated to pay severance in an amount equal to the sum of (i) his annual base salary plus (ii) the amount of the average annual incentive bonus paid to Mr. Larsen in the three years preceding termination; (b) his non-vested restricted equity awards that vest based solely on continued employment will vest; and (c) we are required to allow Mr. Larsen to continue to participate in our group medical and dental plans under the same cost sharing arrangement that applied on the last day of employment for a period of 12 months. If such termination occurred on January 31, 2025, (not following a "change in control"), Mr. Larsen would have been entitled to a severance payment of $581,976 (paid in equal monthly installments over 12 months) calculated as follows: the sum of (i) the current base salary of $450,000, plus (ii) the amount of the average annual incentive bonus paid in the three years preceding termination of $131,976. In addition, the Company would pay the employer share, in effect on the last day of employment, of the cost of his participation in our group medical and dental plans for the 12 month period following termination (as of January 31, 2025, the employer's share of the premium cost was $1,834.91 per month). Assuming a termination date of January 31, 2025, the value of the non-vested equity awards that would continue to vest over the established vesting schedules would be $696,684, calculated based upon the closing price of our Common Stock on January 31, 2025 of $18.72 (the actual vesting date and corresponding value of stock would be as of the first day following the release having become effective). If Mr. Larsen is terminated by the Company without "cause" within 12 months following a "change in control" or if he resigns for "good reason" within 12 months following a "change in control", the Company is obligated to pay severance in an amount equal to two times the sum of (i) the annual base salary then in effect, plus (ii) the amount of the average annual incentive bonus paid to Mr. Larsen in the three years preceding the termination. These severance payments would be made in 24 equal monthly installments. Also, Mr. Larsen's time-based equity awards would become fully vested and earned as of the first day following the expiration of the rescission period under the release. If such termination occurs we would also be required to allow Mr. Larsen to continue to participate in our group medical and dental plans under the same cost sharing arrangement that applied on the last day of employment for a period of 24 months following termination. If Mr. Larsen was terminated on January 31, 2025 following a "change in control", he would have been entitled to a severance payment of $1,163,952 (paid in equal monthly installments over 24 months) calculated as follows: two times the sum of (i) the current base salary of $450,000, plus (ii) the amount of the average annual incentive bonus paid in the three years preceding termination of $131,976. In addition, the Company would pay In addition, the Company would pay the employer share, in effect on the last day of employment, of the cost of his participation in our group medical and dental plans for the 24 month period following termination (as of January 31, 2025, the employer's share of the premium cost was $1,834.91 per month). Assuming a termination date of January 31, 2025, the value of the equity awards that would vest on a change in control would be $696,684, calculated based upon the closing price of our Common Stock on January 31, 2025 of $18.72 (the actual vesting date and corresponding value of stock would be as of the first day following the release having become effective). Under Mr. Larsen's employment agreement, “cause” is defined to mean any of the following: (i) material breach of the employment agreement; (ii) willful refusal to perform assigned duties without justification, or willful misconduct or gross negligence in the performance of duties; (iii) a material breach of the Company’s material policies or codes of conduct or of material obligations under any other agreement; (iv) the willful engagement in dishonesty, fraud, illegal conduct, with respect to or in the course of the business or affairs of the Company, which materially and adversely harms the Company; (v) conviction of, or a plea of nolo contendere to, a felony or other crime involving moral turpitude; and (vi) death or permanent disability. In addition, “good reason” is defined to mean any of the following: (i) the assignment to Mr. Larsen of material duties inconsistent with his status or position as Chief Financial Officer, or other action that results in a material change in Mr. Larsen's status, responsibilities, duties, authority, base salary, compensation, or position, or change in reporting relationship; (ii) the relocation of the principal office for Company business to a location more than forty (40) miles from the Company’s current headquarters; (iii) material breach by the Company of any terms or conditions of the employment agreement; or (iv) the failure of the Company to require a successor to assume the terms of the employment agreement. In addition, “change in control” is defined to mean the occurrence of any of the following: (i) one person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total voting power of the stock of the Company; (ii) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or (iii) the sale of all or substantially all of the Company’s assets. Under the terms of the Company's various restricted stock agreements, if Mr. Larsen's employment with the Company terminated on account of his death, any unvested shares of restricted stock would become 100% vested. In addition, if Mr. Larsen's employment with the Company terminated on account of his disability or retirement, any unvested shares of restricted stock would become 100% vested. For this purpose, "disability" means that Mr. Larsen's employment is severed due to disability under the Company's long-term disability plan, and "retirement" means Mr. Larsen's retirement from the Company on or after attaining age 64 and completion of 5 years of service (or pursuant to early retirement with the consent of the Compensation Committee). Mr. Larsen is not currently retirement eligible under the restricted stock agreements. If Mr. Larsen's
Potential Payments upon Termination or Change-In-Control
employment with the Company had terminated on January 31, 2025 on account of his death or disability, the value of the restricted stock awards that would have vested would be $696,684. In order to receive the severance and continued benefits described above, each officer would be required to sign a release of claims against us, fulfill his non-competition and non-solicitation obligations, cooperate with transitioning his duties and execute a non-disparagement agreement with us. We have arrived at these terms based on the advice and experience of our advisors and directors, including their knowledge of practices and agreements at public companies.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
Pay Versus Performance Table for Fiscal 2025
Pay Versus Performance Table for Fiscal 2025 In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), below is disclosure regarding executive compensation for our principal executive officer ("PEO," also known as our Chief Executive Officer) and other named executive officers and certain Company performance measures for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its compensation decisions for any of the fiscal years shown.
Pay Versus Performance Table for Fiscal 2025
| Fiscal Year (a) | Summary Compensation Table Total for PEO (1) (b) | Compensation Actually Paid to PEO (2) (c) | Average Summary Compensation Table Total for non-PEO NEOs (3) (d) | Average Compensation Actually Paid to non-PEO NEOs (4) (e) | Value of Initial Fixed $100 Investment Based on: | | Net Income (7) (Thousands) (h) | Adjusted Pre-Tax Income (8) (Thousands) (i) | | | | | | | Total Shareholder Return (5) (f) | Peer Group Total Shareholder Return (6) (g) | | | | 2025 | 1,161,858 | 900,284 | 707,802 | 658,389 | 153.32 | 219.98 | (36,911) | (40,335) | | 2024 | 503,959 | 503,959 | 1,239,900 | 842,774 | 218.92 | 157.55 | 112,441 | 146,926 | | 2023 | 486,875 | 486,875 | 1,548,296 | 1,892,269 | 359.87 | 123.04 | 101,868 | 137,138 | | 2022 | 483,700 | 483,700 | 1,391,515 | 1,850,998 | 252.25 | 152.98 | 66,047 | 88,136 | | 2021 | 483,550 | 483,550 | 1,180,318 | 1,752,898 | 174.45 | 140.50 | 19,356 | 38,097 |
Pay Versus Performance Table for Fiscal 2025
(1) The dollar amounts reported in column (b) for fiscal years 2021-2024 are the amounts of total compensation reported for David Meyer (our former Chief Executive Officer and current Chairman of the Board of Directors) for each corresponding year in the “Total” column of the Summary Compensation Table for fiscal years 2021-2024. The dollar amount in column (b) for fiscal 2025 is the amount of total compensation reported for Bryan Knutson, our current President and Chief Executive Officer, in the “Total” column of the Summary Compensation Table for fiscal 2025. (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Meyer, as Chief Executive Officer, for fiscal years 2021-2024 and to Bryan Knutson, as President and Chief Executive Officer, for fiscal 2025, as computed in accordance with Item 402(v) of SEC Regulation S-K. There are no adjustments to Mr. Meyer’s compensation as required by Item 402(v) of SEC Regulation S-K, because he did not receive any equity awards and did not have an accumulated pension benefit during any fiscal year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Knutson’s total compensation for fiscal 2025 to determine the compensation actually paid:
Pay Versus Performance Table for Fiscal 2025
| Year | Reported Summary Compensation Table Total for PEO | Reported Grant Date Fair Value of Equity Awards | Equity Award Adjustments (a) | Compensation Actually Paid to PEO | | 2025 | 1,161,858 | (574,993) | 313,419 | 900,284 |
Pay Versus Performance Table for Fiscal 2025
| Fiscal Year | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in Applicable Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Dollar Value of Dividends or Other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2025 | 591,421 | (219,250) | — | (58,752) | — | — | 313,419 |
Pay Versus Performance Table for Fiscal 2025
(3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s non-PEO named executive officers as a group in the “Total” column of the Summary Compensation Table in each of fiscal years 2021-2025. The names of the non-PEO named executive officers included for purposes of calculating the average amounts in each applicable year are David Meyer (as Executive Chairman of the Board of Directors) and Robert Larsen (our CFO) for fiscal 2025; Bryan Knutson (as President and COO) and Mr. Larsen for fiscal 2024; Mr. Knutson, Mr. Larsen, and Mark Kalvoda (our former CFO) for fiscal 2023; and Mr. Knutson and Mr. Kalvoda for fiscal years 2022 and 2021. (4) The dollar amounts reported in column (e) represent the average “compensation actually paid” to the non-PEO named executive officers as a group, as computed in accordance with Item 402(v) of SEC Regulation S-K. The names of the non-PEO named executive officers included for purposes of calculating the average amounts in each applicable year are David Meyer and Robert Larsen for fiscal 2025; Bryan Knutson and Mr. Larsen for fiscal 2024; Mr. Knutson, Mr. Larsen, and Mr. Kalvoda for fiscal 2023; and Mr. Knutson and Mr. Kalvoda for fiscal years 2022 and 2021. Mr. Larsen was employed for the final three months of fiscal 2023, November 1, 2022 through January 31, 2023, and Mr. Kalvoda was employed for the first 50 weeks of fiscal 2023, February 1, 2022 through January 15, 2023. None of the non-PEO named executive officers had an accumulated pension benefit during any of the fiscal years. The “equity award adjustments” for each applicable year consist of the following: (i) adding the year-end fair value of any equity awards granted in the applicable year that were outstanding and unvested as of the end of the applicable year; (ii) adding the amount of change as of the end of the applicable year (from the end of the prior year) in fair value of any equity awards granted in prior years that were outstanding and unvested as of the end of the applicable year; (iii) for equity awards that were granted and vested in the same applicable year, adding the fair value of the equity awards as of the vesting date; (iv) for equity awards granted in prior years that vested in the applicable year, adding the amount equal to the change as of the vesting date (from the end of the prior year) in fair value of the equity awards; (v) for equity awards granted in prior years that were determined to fail to meet the applicable vesting conditions during the applicable year, deducting the amount equal to the fair value at the end of the prior year; and (vi) adding the dollar value of any dividends or other earnings paid on equity awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such equity awards or included in any other component of total compensation for the applicable year. The amounts deducted or added in calculating the “equity award adjustments” are as follows:
Pay Versus Performance Table for Fiscal 2025
| Fiscal Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Grant Date Fair Value of Equity Awards | Average Equity Award Adjustments (a) | Average Compensation Actually Paid to Non-PEO NEOs | | 2025 | 707,802 | (224,998) | 175,585 | 658,389 | | 2024 | 1,239,900 | (472,503) | 75,377 | 842,774 | | 2023 | 1,548,296 | (183,338) | 527,311 | 1,892,269 | | 2022 | 1,391,515 | (409,996) | 869,479 | 1,850,998 | | 2021 | 1,180,318 | (380,000) | 952,580 | 1,752,898 |
Pay Versus Performance Table for Fiscal 2025
(a) The amounts deducted or added in calculating the total average equity award adjustments are as follows:
Pay Versus Performance Table for Fiscal 2025
| Fiscal Year | Average Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in Applicable Year | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Average Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Dollar Value of Dividends or Other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Average Equity Award Adjustments | | 2025 | 231,426 | (50,026) | — | (5,815) | — | — | 175,585 | | 2024 | 477,144 | (257,660) | — | (144,107) | — | — | 75,377 | | 2023 | 296,449 | 136,075 | — | 94,787 | — | — | 527,311 | | 2022 | 365,072 | 396,174 | — | 108,233 | — | — | 869,479 | | 2021 | 783,542 | 235,726 | — | (66,688) | — | — | 952,580 |
Pay Versus Performance Table for Fiscal 2025
(5) Cumulative Total Shareholder Return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period (determined in accordance with Item 402(v) of SEC Regulation S-K), assuming dividend reinvestment, and the difference between the Company’s common share price at the end and the beginning of the measurement period by the Company’s common share price at the beginning of the measurement period. (6) Represents the S&P Retail Index cumulative TSR for the applicable performance period. (7) The dollar amounts reported represent the amount of net income (in thousands) reflected in the Company’s audited consolidated financial statements for the applicable year. (8) Adjusted Pre-Tax Income is defined as GAAP pre-tax income adjusted to exclude the pre-tax impact from gains or losses that occur outside of the ordinary course of our business during the applicable year. In fiscal 2025, the results were adjusted for Disqualified Sale Leaseback real estate purchases. In fiscal 2024, the results of the new Australian segment acquired in October 2023 were not included in the Adjusted Pre-Tax Income calculation. In fiscal 2023, the results of the Ukrainian entity were not included in the Adjusted Pre-Tax Income calculation due to the conflict between Russia and Ukraine. In years prior other items, such as fixed asset impairments, intangible asset impairments, and the foreign currency gain or loss of the hryvnia, Ukraine's local currency, was excluded as gains or losses that occurred outside of the ordinary course of business. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that adjusted pre-tax income is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in this table) used by the Company to link compensation actually paid to the Company’s named executive officers for the most recently completed fiscal year, to the Company’s performance.
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of SEC Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance Table for Fiscal 2025. Compensation Actually Paid and Cumulative TSR As demonstrated by the following graph, the amount of compensation actually paid to Mr. Meyer as Chief Executive Officer for fiscal years 2021-2024 was essentially flat, since he only received a base salary that was fairly constant throughout that period. The amount of compensation actually paid to Bryan Knutson, as President and Chief Executive Officer, for fiscal 2025 was $900,284. The average amount of compensation actually paid to the Company’s non-PEO named executive officers as a group and, with respect to fiscal 2025, our PEO is generally aligned with the Company’s cumulative TSR over the relevant period presented in the Pay Versus Performance Table for Fiscal 2025. The alignment of compensation actually paid with the Company’s cumulative TSR over the period presented is due in large part to the fact that a significant portion of the compensation actually paid to the non-PEO named executive officers and, with respect to 2025, our PEO is comprised of equity awards. The following table details the Company’s cumulative TSR in comparison to the Index’s cumulative TSR for each of the measurement periods (determined in accordance with Item 402(v) of Section Regulation S-K). Compensation Actually Paid and Net Income (Loss) As demonstrated by the following table, the amount of compensation actually paid to Mr. Meyer as Chief Executive Officer for fiscal years 2021-2024 was essentially flat, since he only received a base salary that was fairly constant throughout the four-year period. The amount of compensation actually paid to Mr. Knutson, as President and Chief Executive Officer, for fiscal 2025 was $900,284. The average amount of compensation actually paid to the Company’s non-PEO named executive officers as a group and, with respect to fiscal 2025, our PEO is generally aligned with the Company’s net income over the relevant period presented in the Pay Versus Performance Table for Fiscal 2025. The Company uses adjusted pre-tax net income (loss) as a performance measure in the overall executive compensation program, which is highly correlated to the measure of net income. As described in more detail above in this section, the target annual cash incentive compensation as a percent of base salary was 100% for Mr. Knutson in fiscal 2025, and 75% for each of Mr. Knutson, Mr. Larsen, and Mr. Kalvoda for all other applicable time periods. Compensation Actually Paid and Adjusted Pre-Tax Income (Loss) As described in more detail above in this section, one of the three financial performance metrics used to determine the annual cash incentive payment is adjusted pre-tax income. As demonstrated by the following table, the amount of compensation actually paid to Mr. Meyer, as Chief Executive Officer, for fiscal years 2021-2024 was essentially flat, since he only received a fairly constant base salary ($475,000 for the entire period up until June 1, 2023, when his base salary increased to $500,000). The amount of compensation actually paid to Mr. Knutson, as President and Chief Executive Officer, for fiscal 2025 was $900,284. The average amount of compensation actually paid to the Company’s non-PEO named executive officers as a group and, with respect to fiscal 2025, our PEO is generally aligned with the Company’s adjusted pre-tax income over the relevant period presented in the Pay Versus Performance Table for Fiscal 2025.
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure As required by the Dodd-Frank Act, and applicable SEC rules, we are providing the following information about the relationship of the annual total compensation of the employee identified at median of our Company and the annual total compensation of Bryan Knutson, our President and Chief Executive Officer in fiscal 2025. For fiscal 2025: •the annual total compensation of the employee identified at median of our Company (other than our President and Chief Executive Officer) was $74,654.07; and •the annual total compensation of our President and Chief Executive Officer for purposes of determining the CEO pay ratio was $1,172,314. Based on this information, for fiscal 2025, the ratio of the annual total compensation of Mr. Knutson, our Chief Executive Officer, to the median of the annual total compensation of all employees was estimated to be 15.7 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the "median employee," the methodology and the material assumptions, adjustments, and estimates that we used were as follows: •When we determined our median employee as of December 31, 2024, our employee population consisted of approximately 3,690 individuals in the United States, Europe, and Australia. We selected December 31, 2024, which was within the last three months of fiscal 2025, as the date upon which we would identify the "median employee" to allow sufficient time to identify the median employee given our international operations. •We selected salary and wages as reported to the Internal Revenue Service on Form W-2 for our U.S. employees and used equivalent taxable income for our international employees as our consistently applied compensation measure as it represents the primary compensation component paid to all of our employees. In addition, this approach allows us to reasonably compare compensation for our U.S. employees with that of our employees in Europe and Australia. •Compensation paid in foreign currencies was converted to U.S. dollars based on exchange rates in effect on December 31, 2024. •We did not annualize the pay of employees who were not employed by us for the entire fiscal year. In determining the annual total compensation of the median employee, such employee’s compensation was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, as required pursuant to SEC rules, except that we elected to include the Company-paid portion of a single health insurance premium and the Company-paid contribution to the employees' health savings account, which are normally excluded from the calculation of annual total compensation for purposes of the summary compensation table. As a result, Mr. Knutson’s compensation for purposes of the pay ratio calculation differs from the summary compensation table for fiscal 2025 to reflect the inclusion of the Company-paid portion of a single health insurance premium and the Company-paid contribution to his health savings account, which are excluded for summary compensation table purposes.