DEF 14A of Boot Barn Holdings, Inc.
Filed Jul 20, 2023 · FY20230001558370-23-011984
Our Board
Our Board Our business and affairs are managed by our board of directors, which currently consists of eight members. The following sets out information about the eight director nominees.
Our Board
| Peter Starrett Chairman of the Board Independent Director Age: 75 Director since: 2011 Chairman since: 2012 Committees: Compensation Corporate Governance and Nominating | Mr. Starrett has served as Chairman of the Board since 2012 and as a member of our board of directors since 2011. Mr. Starrett has over 30 years of experience in the retail industry. In 1998, Mr. Starrett founded Peter Starrett Associates, a retail advisory firm, and has served as its President since that time. From 1990 to 1998, Mr. Starrett served as the President of Warner Bros. Studio Stores Worldwide, a specialty retailer. Previously, he was Chairman and Chief Executive Officer at The Children’s Place, a specialty clothing retailer. Prior to that, he held senior executive positions at both Federated Department Stores and May Department Stores, each a department store retailer. Mr. Starrett serves on the board of directors of Floor & Decor Holdings, Inc. (NYSE, FND), a retailer of hard surface flooring. In addition, he is a member of the board of directors of several private companies. Mr. Starrett received a bachelor’s degree from the University of Denver and received a master’s degree in business administration from Harvard University. We believe that Mr. Starrett is qualified to serve on our board of directors because of his extensive experience as an officer and director of both public and private companies in the retail industry. |
Our Board
| Chris Bruzzo Independent Director Age: 53 Director since: 2021 Committee: Compensation, Chairperson | Mr. Bruzzo joined our board of directors in April of 2021. Mr. Bruzzo served as the Executive Vice President and Chief Experience Officer of Electronic Arts from September 2014 through June 2023. Mr. Bruzzo has more than 20 years of experience working for global consumer brands, with extensive knowledge in marketing, brand management, digital strategy and communications. Amongst other roles, Mr. Bruzzo previously served as the Senior Vice President, Channel Brand Management for Starbucks Corporation from 2007 to 2014, Vice President, Marketing and Public Relations for Amazon.com Inc. from 2003 to 2006, and Assistant Vice President, Communications for Regence Blue Shield from 1998 to 2003. Mr. Bruzzo was the founding executive sponsor and advocate for Somos EA, Electronic Arts’ Latinx employee resource group, and is a member of the Latino Corporate Directors Association. Mr. Bruzzo currently serves on the advisory board of Mission Scholars, a non-profit that provides college access to low-income students. Mr. Bruzzo holds a bachelor of arts degree in political science from Whitworth University. We believe that Mr. Bruzzo is qualified to serve on our board of directors because of his extensive experience working for global consumer brands. | | Eddie Burt Independent Director Age: 57 Director since: 2021 Committee: Audit | Mr. Burt joined our board of directors in February of 2021. Mr. Burt currently serves as the Chief Supply Chain Officer of Love’s Travel Stops & Country Stores, Inc. Mr. Burt served as the Executive Vice President, Chief Supply Chain Officer of Big Lots Inc. (NYSE, BIG) from February 2019 through June 2023. Mr. Burt has over 30 years of experience in the retail industry with extensive knowledge around supply chain and real estate operations. Mr. Burt previously served as the Executive Vice President of Merchandising and Supply Chain for GNC from 2017 to 2018. Prior to that, Mr. Burt worked for PetSmart, Inc. from 2007 to 2015, beginning as Vice President of Distribution and progressing to Senior Vice President of Supply Chain with later movement to Senior Vice President of Real Estate and Development. From 2004 to 2007, he worked as the Director of Domestic Distribution for The Home Depot, Inc. From 1989 to 2004, Mr. Burt worked in various roles within Distribution at Mervyn’s Department Store, which included a two-year developmental assignment running asset protection. Mr. Burt holds a bachelor’s degree in business administration from Morehouse College in Atlanta, Georgia. We believe that Mr. Burt is qualified to serve on our board of directors because of his extensive experience in the retail industry. | | James G. Conroy Director Age: 53 Director since: 2012 | Mr. Conroy has been a director and our President and Chief Executive Officer since 2012. Prior to joining Boot Barn, Mr. Conroy was with Claire’s Stores, Inc. from 2007 to 2012 where Mr. Conroy served as Chief Operating Officer and Interim Co‑Chief Executive Officer in 2012, President from 2009 to 2012 and Executive Vice President from 2007 to 2009. Before joining Claire’s Stores, Inc., Mr. Conroy was also employed by Blockbuster Entertainment Group from 1996 to 1998, Kurt Salmon Associates from 2003 to 2005 and Deloitte Consulting in various capacities. Mr. Conroy serves on the board of directors of Party City Holdco Inc. (NYSE, PRTY), a vertically integrated supplier of decorated party goods. Mr. Conroy also serves on the Foundation Board of Children’s Hospital of Orange County as well as the Foundation Board of Orange County School of the Arts. Mr. Conroy received a bachelor’s degree in business management and statistics and a master’s degree in business administration from Cornell University. We believe Mr. Conroy is qualified to serve on our board of directors because of his expertise in the strategic and operational aspects of the retail industry, which he has gained working in the industry for more than 25 years. |
Our Board
| Lisa G. Laube Independent Director Age: 60 Director since: 2018 Committees: Compensation Corporate Governance and Nominating, Chairperson | Ms. Laube joined our board of directors in July of 2018. She previously served as the President of Floor & Decor until her retirement in April 2022. She joined the company as Executive Vice President and Chief Merchandising Officer in 2012 and was promoted to President in February 2020, where she was responsible for Merchandising, Marketing, Training, E-Commerce and Store Operations. From 2005 to 2011, Ms. Laube was President of Party City where she was responsible for Merchandising, Marketing and E- Commerce and prior to that she was the company’s Chief Merchandising Officer. From 2002 to 2004, she was the Vice President of Merchandising for White Barn Candle Company, a division of Bath and Body Works. Prior to that, Ms. Laube worked from 1996 to 2002 at Linens ‘n Things beginning as a Buyer and progressing to General Merchandising Manager. From 1988 to 1996, she was a Buyer at Macy’s in the Textiles division. Ms. Laube began her career at Rich’s department store in the Executive Training Program. Ms. Laube currently serves on the board of directors of Zoo Atlanta, a zoological park in Atlanta and she is on the Terry Dean’s Advisory Council for the Terry School of Business at the University of Georgia. She graduated from the Terry School of Business, University of Georgia in 1985 with a B.B.A. in Marketing. We believe Ms. Laube is qualified to serve on our board of directors because of her extensive experience in the retail industry. | | Anne MacDonald Independent Director Age: 67 Director since: 2018 Committees: Audit Corporate Governance and Nominating | Ms. MacDonald joined our board of directors in May of 2018. Ms. MacDonald has over 30 years of experience across marketing disciplines and industries. She started her career in the advertising industry prior to moving to the corporate side in 1993 as VP Brand Management for PepsiCo’s Pizza Hut division. From 1997 to 2011, Ms. MacDonald held the position of Chief Marketing Officer at several Fortune 100 companies, including Citigroup, Macy’s and Travelers Insurance. Ms. MacDonald currently serves on the board of directors of British Insurer, Hiscox Inc. and previously served on the public boards of Catalina Marketing Corporation and Rentrak Corporation. From 2014 to 2017 Ms. MacDonald worked as an advisor to Yale University’s start-up incubator, Yale Entrepreneurial Institute. Ms. MacDonald received her bachelor’s degree from Boston College and an MSc. from the University of Bath in England. We believe that Ms. MacDonald is qualified to serve on our board of directors because of her experience as a board member and over 30+ years of experience and insight in marketing, building enduring brands and developing and launching new products. |
Our Board
| Brenda I. Morris Independent Director Age: 58 Director since: 2014 Committee: Audit, Chairperson | Ms. Morris has served on our board of directors since 2014. Ms. Morris has over 35 years of experience in finance, accounting and operations roles concentrated in consumer products, food and beverage, retail and wholesale sectors. Ms. Morris is currently a Partner at CSuite Financial Partners, a financial executive services firm, which she joined in November 2015. Ms. Morris has served since 2019 on the board of directors for Xponential Fitness, (XPOF) and since 2021 on the board of Ideal Image Development, Inc., a medical spa chain and iHerb Holdings, Inc, a health and wellness retailer. Ms. Morris also serves on the advisory board of Asarasi, Inc., a private tree water company, and she formerly served on the Pacific Lutheran University Board of Regents from 2011 until 2020. Ms. Morris served from 2015 until 2022 on the board of directors for Duluth Holdings Inc. (DLTH). Ms. Morris is a board member for National Association of Corporate Directors, Pacific Southwest Chapter. Ms. Morris has served on several non-profit boards in various capacities during her career. Ms. Morris holds a NACD Directorship Certification® and NACD Cyber-Risk Oversight Certification®, the leading-edge board certifications on governance issues demonstrating a commitment to the profession of directorship. Ms. Morris is a CPA (inactive), Certified Management Accountant and Certified Global Management Accountant. From 2016 to 2019, Ms. Morris was the CFO of Apex Parks Group, a company operating amusement parks and family entertainment centers. Ms. Morris previously served at Hot Topic, Inc., a specialty retailer, as Senior Vice President, Finance from 2015 to October 2016. Ms. Morris previously served as Chief Financial Officer for 5.11 Inc., a tactical gear and apparel wholesaler and retailer, from 2013 to 2015, as Chief Financial Officer for Love Culture, a young women’s fashion retailer, from 2011 to 2013, and as Chief Financial Officer for Icicle Seafoods, Inc., a premium seafood processor and distributor, from 2009 to 2011. Ms. Morris was also Chief Operating Officer and Chief Financial Officer of iFloor.com from 2007 to 2009, Chief Financial Officer at Zumiez Inc. from 2003 to 2007, and Director of Finance and Vice President/Chief Financial Officer at K2 Corporation from 1999 to 2003. Ms. Morris holds a B.A. in business administration with a concentration in accounting from Pacific Lutheran University and an M.B.A. from Seattle University. We believe that Ms. Morris is qualified to serve on our board of directors because of her extensive experience in accounting, finance and executive management. | | Brad Weston Independent Director Age: 58 Director since: 2018 Committee: Audit | Mr. Weston joined our board of directors in July of 2018. Mr. Weston currently serves as the Chief Executive Officer of Party City Holdco Inc. (NYSE, PRTY). Mr. Weston joined Party City Holdco Inc. in July 2019 as President of Party City Holdco Inc. and Chief Executive Officer of Party City Retail Group, before becoming Chief Executive Officer of Party City Holdco Inc. in April 2020. On January 17, 2023, Party City Holdco Inc. filed a voluntary Chapter 11 bankruptcy petition within the U.S. Bankruptcy Court for the Southern District of Texas. Mr. Weston previously worked for Petco from 2011 to 2018, first as Executive Vice President and Chief Merchandising Officer overseeing all merchandising activities, including buying, operations, planning and inventory, sourcing, private brand, store design, and Petco’s marketing and e-commerce, and then as Chief Executive Officer from 2016. Prior to joining Petco, Brad served as Senior Vice President and Chief Merchandising Officer for Dick’s Sporting Goods, Inc., Golf Galaxy and dicksportinggoods.com Previously, Mr. Weston was Senior Vice President, General Merchandise Manager for May Merchandising Company in St. Louis. Mr. Weston started his career as an executive trainee with Robinsons-May in Los Angeles, and eventually became Senior Vice President and General Merchandise Manager. Since July of 2017, Mr. Weston has served on the board of directors of National Retail Federation, the world’s largest retail trade association. Mr. Weston holds a bachelor’s degree in business administration with a finance and marketing emphasis from the University of California, Berkeley. We believe that Mr. Weston is qualified to serve on our board of directors because of his extensive experience in the retail industry. |
Compensation Committee
| ● | making recommendations regarding non-employee director compensation to the full board of directors; |
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Our board of directors has adopted a compensation policy for our directors who are not our employees (“Outside Directors”). During fiscal 2023, under this policy, Outside Directors received an annual cash retainer of $75,000, payable quarterly, and reimbursement of expenses relating to attendance at board of directors and board committee meetings. In addition, the chairperson of our board of directors, if an Outside Director, received an additional annual cash retainer of $100,000, the chairperson of our audit committee, if an Outside Director, received an additional annual cash retainer of $20,000, the chairperson of our compensation committee, if an Outside Director, received an additional annual cash retainer of $15,000, and the chairperson of our nominating and corporate governance committee, if an Outside Director, received an additional annual cash retainer of $10,000, payable quarterly. In addition to the cash compensation discussed above, we grant to our Outside Directors under our 2020 Equity Incentive Plan restricted stock units, payable in shares of our common stock. The restricted stock units are subject to vesting conditions that lapse on the first anniversary of the date of grant, subject to continued service as a member of our board of directors. Payment in respect of the restricted stock units is made upon vesting; however, beginning in fiscal 2020, our Outside Directors may elect to defer receipt of such shares of common stock. In fiscal 2023, we granted to our Outside Directors under our 2020 Equity Incentive Plan restricted stock units with a market value of $110,000. Our board of directors recognizes that stock ownership by directors may strengthen their commitment to the long-term future of our Company and further align their interests with those of our stockholders. Accordingly, our Outside Directors are encouraged to own shares of our common stock (including shares owned outright, unvested shares, stock options, restricted stock units or other equity grants) having a value over five years of at least three times their annual cash retainer until he/she leaves the board of directors.
Director Compensation Table
Director Compensation Table The following table sets forth a summary of the compensation paid to our Outside Directors in fiscal 2023.
Director Compensation Table
| Name | Fees Earned or Paid in Cash | Stock Awards (1) | Option Awards | All Other Compensation | Total | | Peter Starrett | $167,500 | $110,004 | $- | $- | $277,504 | | Chris Bruzzo | 86,250 | 110,004 | - | - | 196,254 | | Eddie Burt | 75,000 | 110,004 | - | - | 185,004 | | Lisa G. Laube | 82,500 | 110,004 | - | - | 192,504 | | Anne MacDonald | 75,000 | 110,004 | - | - | 185,004 | | Brenda Morris | 95,000 | 110,004 | - | - | 205,004 | | Brad Weston | 75,000 | 110,004 | - | - | 185,004 |
Director Compensation Table
| (1) The amounts in this column reflect the aggregate grant date fair value of each restricted stock unit award granted during the fiscal year, computed in accordance with ASC 718. The restricted stock units granted include 1,265 restricted stock units, calculated by dividing the $110,000 intended value by the closing stock price of $86.96 on the grant date of May 12, 2022. The valuation assumptions used in determining such amounts are further described in Note 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended April 1, 2023. |
Director Compensation Table
The following table lists all outstanding equity awards held by our Outside Directors as of April 1, 2023. The market value is based upon the closing stock price of $76.64 on March 31, 2023, the last trading day of fiscal 2023. Equity awards held by Outside Directors consist solely of restricted stock units.
Director Compensation Table
| | Stock Awards | | | | Name | Date of Grant | Shares/units not vested (#) | Market value of units not vested ($) | | Peter Starrett | 5/12/2022 | 1,265(1) | 96,950 | | Chris Bruzzo | 5/12/2022 | 1,265(2) | 96,950 | | Eddie Burt | 5/12/2022 | 1,265(2) | 96,950 | | Lisa Laube | 5/12/2022 | 1,265(2) | 96,950 | | Anne MacDonald | 5/12/2022 | 1,265(1) | 96,950 | | Brenda Morris | 5/12/2022 | 1,265(2) | 96,950 | | Brad Weston | 5/12/2022 | 1,265(2) | 96,950 |
Director Compensation Table
| (1) The restricted stock units held by the director as of April 1, 2023 vested fully on the one-year anniversary of the date of grant, which was following the completion of fiscal 2023. The receipt of such shares upon vesting has been deferred by the director until six months after they cease to be a director. |
Director Compensation Table
| (2) The restricted stock units held by the director as of April 1, 2023 vested fully on the one-year anniversary of the date of grant, which was following the completion of fiscal 2023. |
Compensation Philosophy and Objectives
| What We Do | | * Review total compensation relative to median of a peer group of companies in similar business sectors, notably specialty retailers, of comparable size and complexity | | * Tie short-term incentives to achievement of financial and strategic metrics | | * Deliver a significant percentage of target annual compensation in the form of variable compensation tied to performance and align long-term incentive compensation objectives with the creation of stockholder value | | * Use an independent compensation consultant retained directly by the Committee that provides no other services to the Company | | * Assess annually potential risks relating to our compensation policies and practices |
Compensation Philosophy and Objectives
| What We Don't Do | | * Incentivize participants to take excessive risks | | * Allow margining, derivative, or speculative transactions, such as hedges and margin accounts, by executive officers | | * Provide excessive severance or excessive perquisites | | * Provide excise tax gross-ups related to change-in-control or other payments | | * Allow for repricing of stock options without stockholder approval | | * Provide “single-trigger” change-in-control cash payments or equity acceleration |
Pay Philosophy
| ● | Target an overall pay structure that includes base salary, bonuses and equity awards that are based upon both market and performance measures. The long-term intent is generally to pay NEO compensation approximating market median. |
Elements of Our Executive Compensation Program
| 2. | Short-term cash performance-based bonus |
Elements of Our Executive Compensation Program
| 3. | Long-term equity incentives |
Elements of Our Executive Compensation Program
We do not have formal policies relating to the allocation of total compensation among the various elements of our compensation program. The Committee generally allocates compensation between short-term and long-term components and between cash and equity in a manner that it believes will maximize executive performance and retention. The variable pay elements (annual cash incentive and long-term equity incentive awards) comprise an increasingly larger proportion of total target compensation of our senior executives as position level increases. This is consistent with the Committee’s belief that these variable elements of compensation more closely align management's interests with our financial performance and with our stockholders’ interests. Based on our fiscal 2023 target direct compensation (including grant date fair value of equity awards and annual bonus amounts at target), 90% of our Chief Executive Officer’s (“CEO”) target direct compensation and an average of 68% of the target direct compensation for the other NEOs was variable, because it was realized only if the applicable financial performance goals were met and/or its value is tied to our stock price. The charts below demonstrate our performance-aligned pay mix.
Base Salary
Base Salary Base salary is structured and intended to provide a base-line level of fixed compensation to our NEOs to serve as the platform for our pay-for-performance program. The base salaries of our NEOs are intended to reflect the position, duties and responsibilities of each NEO and the market for base salaries of similarly situated executives at other companies of similar size and in similar industries. Base salaries for fiscal 2023 for our NEOs were set by the Committee after reviewing and considering (i) the experience, skills, and performance levels of each NEO, (ii) whether there were any material changes to the individual’s role and responsibilities during the year, (iii) each NEO’s relative pay level against peer group companies, (iv) internal equity within the Company, and (v) the Chief Executive Officer’s recommendations (for positions other than his own). Mr. Watkins and Mr. Love received larger salary increases year-over-year as a result of adjusting their base pay to the market median of the Company’s peer group. Base salaries for our NEOs as of the end of fiscal 2023 and 2022 are listed below.
Annual Cash Incentive Bonus
Annual Cash Incentive Bonus Our NEOs are eligible to receive annual cash incentives as part of our Annual Cash Incentive Bonus Plan. Our Annual Cash Incentive Bonus Plan was designed by the Committee to reward our senior executives for achieving targeted amounts of a variation of Consolidated EBIT, defined for this purpose as earnings before income taxes, excluding certain one-time selling, general and administrative expenses. In addition, in the case of NEOs other than our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, certain additional financial performance goals related to such NEO’s duties and responsibilities, are as follows:
Annual Cash Incentive Bonus
| ● | Laurie Grijalva, Chief Merchandising Officer, Consolidated merchandise margin and consolidated exclusive brand sales penetration; |
Annual Cash Incentive Bonus
| ● | John Hazen, Chief Digital Officer, E-commerce EBIT performance and e-commerce exclusive brand sales penetration; and |
Annual Cash Incentive Bonus
| ● | Michael A. Love, Chief Retail Officer, Retail store EBIT performance and retail store exclusive brand sales penetration. |
Annual Cash Incentive Bonus
In early fiscal 2023, the Compensation Committee established a target performance objective for Consolidated EBIT. In setting the performance measure, the Compensation Committee approved a target performance objective that it considered to be challenging, but achievable. At the same time that the target performance objective was approved, the Committee also set each NEO’s targeted payout as a percentage of his or her base salary – with potential payouts ranging from 0% to 200% of the targeted amounts based on actual performance. For fiscal 2023, target Consolidated EBIT was set at $266.2 million. The minimum threshold to receive a Consolidated EBIT bonus (at 85% of target) was set at $226.2 million, and annual Consolidated EBIT of $306.1 million or more would result in a 200% payout percentage. Actual Consolidated EBIT was $231.8 million, which was 87% of the target and resulted in a payout percentage of 57%. In addition, the Compensation Committee determined that the individual financial performance goals for each NEO had been achieved at various levels. Consolidated exclusive brand sales penetration and e-commerce exclusive brand sales penetration were achieved at the maximum level, resulting in 200% payout percentages. Retail store exclusive brand sales penetration resulted in a payout at the 170% level. Consolidated merchandise margin resulted in a payout at the 50% level. Retail store EBIT resulted in a payout at the 42% level, and e-commerce EBIT did not result in any payout. The below table highlights the annual cash incentive bonus potentials and payouts for each of our NEOs in fiscal 2023.
Annual Cash Incentive Bonus
| Name | Target Annual Cash Incentive Bonus | Target Bonus as a % of Salary | Maximum Bonus as a % of Salary | Actual Annual Cash Incentive Bonus | % of Target Bonus Paid | | James G. Conroy | | | | | | | Consolidated EBIT | $1,060,234 | 110% | 220% | $603,799 | 57% | | Gregory V. Hackman | | | | | | | Consolidated EBIT | $427,748 | 75% | 150% | $243,601 | 57% | | James M. Watkins | | | | | | | Consolidated EBIT | $254,713 | 60% | 120% | $145,058 | 57% | | Laurie Grijalva | | | | | | | Consolidated EBIT | $148,270 | 30% | 60% | $84,439 | 57% | | Consolidated merchandise margin | 74,135 | 15 | 30 | 37,014 | 50 | | Consolidated exclusive brand sales penetration | 74,135 | 15 | 30 | 148,270 | 200 | | | $296,540 | 60% | 120% | $269,723 | 91% | | John Hazen | | | | | | | Consolidated EBIT | $147,923 | 30% | 60% | $84,242 | 57% | | E-commerce EBIT | 98,616 | 20 | 40 | - | - | | E-commerce exclusive brand sales penetration | 49,308 | 10 | 20 | 98,615 | 200 | | | $295,847 | 60% | 120% | $182,857 | 62% | | Michael A. Love | | | | | | | Consolidated EBIT | $128,510 | 30% | 60% | $73,186 | 57% | | Retail store EBIT | 64,255 | 15 | 30 | 26,864 | 42 | | Retail store exclusive brand sales penetration | 64,255 | 15 | 30 | 109,506 | 170 | | | $257,020 | 60% | 120% | $209,556 | 82% |
Fiscal 2024 Bonus Plan
Fiscal 2024 Bonus Plan The fiscal 2024 bonus program will be substantially the same as the fiscal 2023 bonus program, with a few changes. The Committee approved increases in the target bonus percentage for Mr. Conroy and Mr. Watkins, and for the other NEOs, added a provision where future bonus payouts will be capped at target level for secondary measures if the Company fails to meet its minimum threshold on Consolidated EBIT.
Long-Term Equity Incentives
Long-Term Equity Incentives Under our long-term incentive program, the Committee has the authority to award various forms of long-term incentive grants, including stock options, performance-based awards and restricted stock units. All awards granted in fiscal 2023 to our NEOs were restricted stock units or performance share units, and in the case of Mr. Conroy, market-based stock options, granted under our 2020 Equity Incentive Plan (the “2020 Plan”). While all types of awards incentivize retention, the value of restricted stock units increase as our stock price increases, the number of performance share units ultimately received depends on the Company's cumulative earnings per share over a three-year performance period relative to the established performance target, and stock options have value only if our stock price appreciates. The Committee’s objectives for the fiscal 2023 long-term incentive awards were to establish a direct link between compensation and Company performance as demonstrated through our stock price and earnings per share and to retain the services of our executives through multi-year vesting provisions. The Committee’s objective with regards to NEO compensation is to continue to increase the component of pay tied to long-term incentive awards. The Committee believes long-term incentive compensation becomes a more critical component of NEO pay and retaining key executives through challenging economic periods. In determining the fiscal 2023 long-term incentive award levels for our NEOs, the Committee compared the target total direct compensation of each NEO to applicable market data including both salary and equity-incentive awards. The fiscal 2023 restricted stock units granted to the NEOs vest in equal annual installments over a three-year period subject to continued service or in connection with certain events as defined by the 2020 Plan and as determined by the Committee. The performance share units granted are stock-based awards under which the number of shares ultimately received depends on the Company's cumulative earnings per share over a three-year performance period beginning March 27, 2022 and ending March 29, 2025 relative to the established performance target. This performance metric was established by the Committee at the beginning of the performance period. At the end of the performance period, the number of shares to be issued in settlement of the performance share units is based on the Company’s actual achievement of the applicable performance goals. If the cumulative three-year performance is at a level below the threshold level, the number of performance units to vest will be 0%, if performance is at the threshold level, the number of performance units to vest will be 50% of the target amounts, if performance is at the target level, the number of performance units to vest will be 100% of the target amounts, and if performance is at the maximum level, the number of performance units to vest will be 200% of the target amounts, each subject to continued service by the applicable award recipient through the last day of the performance period (subject to certain exceptions described below under the headings “Employment Agreements” and “Potential Payments Upon Termination or Change in Control”). If performance is between threshold and target goals or between target and maximum goals, the number of performance units to vest will be determined by linear interpolation. The number of shares ultimately issued under the performance unit award ranges from 0% to 200% of the participant's target amount. The awards are forfeited if the threshold performance goals are not achieved as of the end of the performance period. In addition to the above, during fiscal 2023 the Company granted Mr. Conroy an option to purchase 86,189 shares of common stock under the 2020 Plan subject to both service and market vesting conditions. Vesting of this option is contingent upon the market price of the Company’s common stock achieving three stated price targets for 30 consecutive trading days on or prior to the third anniversary of the date of grant and Mr. Conroy’s continued service (subject to certain exceptions). If the first market price target of 150% of the exercise price is met, 33% of the option granted will cliff vest on the third anniversary of the date of grant, with an additional 33% of the option vesting if the second market price target of 175% of the exercise price is met, and the last 34% of the option vesting if the final market price target of 200% of the exercise price is met, subject to the applicable service conditions. During fiscal 2023, none of the market price targets were satisfied. The total grant date fair value of this option was $4.0 million, with a grant date fair value of $46.41 per share. In considering this grant, the Committee desired to satisfy several key objectives, including:
Long-Term Equity Incentives
| ● | Provide a strong retention incentive for a seasoned executive who has led the Company through significant growth by offering a meaningful grant with none of the award vesting earlier than three years from the date of grant. |
Long-Term Equity Incentives
| ● | Increase Mr. Conroy’s alignment with exceptional absolute outcomes for our stockholders and demonstrate a commitment to paying executives for long-term, sustained performance by tying the entirety of the vesting triggers for the different tranches of the award to measures based on increased stock price. |
Long-Term Equity Incentives
The grant mix shown below was chosen to provide a majority emphasis on driving performance results and stock price appreciation, while also providing retentive value. For more information, see “Grants of Plan-Based Awards” below.
Long-Term Equity Incentives
| Name and Equity Granted | Approximate Weighting | | James G. Conroy | | | Market-based stock options | 48.8% | | Performance share units | 25.6% | | Restricted stock units | 25.6% | | | 100.0% | | Gregory V. Hackman | | | Performance share units | 50.0% | | Restricted stock units | 50.0% | | | 100.0% | | James M. Watkins | | | Performance share units | 50.0% | | Restricted stock units | 50.0% | | | 100.0% | | Laurie Grijalva | | | Performance share units | 50.0% | | Restricted stock units | 50.0% | | | 100.0% | | John Hazen | | | Performance share units | 50.0% | | Restricted stock units | 50.0% | | | 100.0% | | Michael A. Love | | | Performance share units | 50.0% | | Restricted stock units | 50.0% | | | 100.0% |
Fiscal 2024 Changes to Long-Term Equity Incentives
Fiscal 2024 Changes to Long-Term Equity Incentives For fiscal 2024, the Committee decided to once again grant to all of the NEOs performance share units which vest based on achievement of a specified performance goal over a three-year performance period and time-based restricted stock units, which vest in equal annual installments over a three-year period subject to continued service or in connection with certain events as defined by the 2020 Plan and as determined by the Committee. The Committee has not granted any stock options for fiscal 2024.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Since fiscal 2019, we have maintained the Boot Barn, Inc. Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). Under the Deferred Compensation Plan, participants may defer up to 80% of their base salary, 90% of bonus payments, and 100% of restricted stock units. Our Company may make discretionary contributions to the Deferred Compensation Plan on behalf of participants. Any Company-based contributions are subject to a five-year graded vesting schedule. Cash amounts deferred under the Deferred Compensation Plan are deemed invested in one or more investment funds made available by the Company and selected by the participant. Mr. Love was the only NEO participating in the Deferred Compensation Plan in fiscal 2023. The Company did not make any discretionary contributions to the Deferred Compensation Plan in fiscal 2023.
Role of Independent Compensation Consultant
Role of Independent Compensation Consultant The Committee engaged Korn Ferry in October 2022 as its independent compensation consultant to advise on NEO and director compensation for fiscal 2023. The independent compensation consultant generally advises the Committee on the appropriateness of our compensation philosophy, peer group selection and general executive compensation program design. As part of its engagement with the Committee, the independent compensation consultant:
Role of Independent Compensation Consultant
| ● | advised on the selection of a peer group of companies for executive officer compensation comparison purposes; |
Role of Independent Compensation Consultant
| ● | provided guidance on industry best practices and emerging trends and developments in executive officer compensation; |
Role of Independent Compensation Consultant
| ● | analyzed peer company proxy and other survey data as appropriate; and |
Role of Independent Compensation Consultant
| ● | advised on determining the total compensation of each of our executive officers and the material elements of total compensation, including annual base salaries, target cash bonus amounts, and the structure and target amount of long-term incentive awards. |
Role of Independent Compensation Consultant
The Committee annually reviews the independence of Korn Ferry as its consultant under applicable SEC and NYSE rules on conflicts of interest. Following this review, the Committee determined that Korn Ferry’s work for us does not raise any conflicts of interest. The Committee's evaluation included consideration of all services provided to us, the amount of fees received as a percentage of Korn Ferry’s annual revenue, its policies and procedures designed to prevent conflicts of interest, any business or personal relationships between Korn Ferry and the members of the Committee or executive officers and any ownership of our stock by the advisors providing executive and director compensation services to us.
Peer Group and Benchmarking
Peer Group and Benchmarking In making executive compensation determinations for fiscal 2023, we relied on the significant experience of our directors in establishing compensation across many companies in multiple industries, as well as the input of our Chief Executive Officer, who has many years of experience in our industry. We have also established a peer group of firms in similar business sectors, most notably specialty retail. The peers selected are of a comparable size and complexity. Our fiscal 2023 peer group reflects the removal of eight previous peers (At Home Group Inc., Sportsman’s Warehouse Holdings, Inc., Lands’ End, Inc., The Container Store Group, Inc., Citi Trends, Haverty Furniture Companies Inc., Duluth Holdings Inc., and Tilly’s) and the addition of six new peers (Abercrombie & Fitch Co., Crocs, Inc., Five Below, Inc., Leslie’s, Inc., Sally Beauty Holdings, Inc., and Urban Outfitters, Inc.). Our fiscal 2023 peer group was comprised of the companies listed below. Abercrombie & Fitch Co. Children’s Place, Inc. Crocs, Inc. Five Below, Inc. Floor and Decor Holdings, Inc. Hibbett Sports, Inc. Leslie’s, Inc. MarineMax, Inc. National Vision Holdings, Inc. Ollie’s Bargain Outlet Holdings, Inc. Sally Beauty Holdings, Inc. Shoe Carnival, Inc. Sleep Number Corporation Stitch Fix, Inc. The Buckle, Inc. Urban Outfitters, Inc. Zumiez Inc. The pay levels and award practices of these firms were considered as inputs when establishing the fiscal 2023 compensation programs for our NEOs. The Committee periodically evaluates competitive market data to include the most suitable peer group as well as other market data deemed relevant. The Committee reviews our NEO compensation against an appropriate peer group on a more formal basis and also considers other relevant market data to ensure that our NEO compensation is competitive and sufficient to recruit and retain our NEOs. The Committee periodically reviews and updates this peer group for benchmarking and peer group analysis in determining and developing compensation packages for our NEOs.
Summary Compensation Table
Summary Compensation Table The following table provides information regarding the compensation of our NEOs for fiscal 2023, 2022 and 2021. James M. Watkins became a NEO in fiscal 2022.
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary | Stock Awards (1) | Option Awards (2) | Non-Equity Incentive Plan Compensation (3) | Non-Qualified Deferred Compensation Earnings | All Other Compensation (4) | Total | | James G. Conroy | 2023 | $963,849 | $4,199,994 | $4,000,031 | $603,799 | $- | $28,136 | $9,795,809 | | President, Chief Executive Officer and Director | 2022 | 891,301 | 1,600,078 | - | 1,960,863 | - | 27,536 | 4,479,778 | | | 2021 | 749,683 | 576,038 | 864,526 | 1,840,130 | - | 27,024 | 4,057,401 | | Gregory V. Hackman | 2023 | 570,331 | 1,000,040 | - | 243,601 | - | 18,452 | 1,832,424 | | Executive Vice President, Chief Operating Officer (Retired effective June 16, 2023) | 2022 | 527,288 | 734,955 | - | 790,933 | - | 17,852 | 2,071,028 | | | 2021 | 449,198 | 284,952 | 430,285 | 706,731 | - | 17,532 | 1,888,698 | | James M. Watkins | 2023 | 424,522 | 700,028 | - | 145,058 | - | 29,036 | 1,298,644 | | Chief Financial Officer and Secretary | 2022 | 319,457 | 434,974 | - | 349,746 | - | 18,240 | 1,122,417 | | Laurie Grijalva | 2023 | 494,234 | 700,028 | - | 269,723 | - | 22,952 | 1,486,937 | | Chief Merchandising Officer | 2022 | 456,146 | 434,989 | - | 547,375 | - | 22,964 | 1,461,474 | | | 2021 | 408,929 | 176,315 | 264,620 | 417,287 | - | 22,536 | 1,289,687 | | John Hazen | 2023 | 493,078 | 700,028 | - | 182,857 | - | 28,136 | 1,404,099 | | Chief Digital Officer | 2022 | 453,940 | 434,989 | - | 544,728 | - | 27,536 | 1,461,193 | | | 2021 | 394,751 | 180,587 | 271,028 | 399,428 | - | 27,024 | 1,272,818 | | Michael A. Love | 2023 | 428,366 | 700,028 | - | 209,556 | - | 21,160 | 1,359,110 | | Chief Retail Officer | 2022 | 352,670 | 284,928 | - | 330,930 | - | 11,600 | 980,128 | | | 2021 | 298,418 | 119,505 | 179,376 | 257,491 | - | 11,400 | 866,190 |
Summary Compensation Table
| (1) The amounts in this column reflect the aggregate grant date fair value of the restricted stock unit award and performance share unit awards granted to NEOs during the fiscal year, computed in accordance with ASC 718. The amounts included for the performance share units in both fiscal 2023 and fiscal 2022 represent the grant date fair value assuming the achievement of the performance goals for a target payout. The valuation assumptions used in determining such amounts in fiscal 2023 are further described in Note 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended April 1, 2023. The table below sets forth the grant date fair value of the performance share units granted in fiscal 2023 at both target and maximum payout: |
Summary Compensation Table
| | Target | Maximum | | James G. Conroy | $2,099,997 | $4,199,994 | | Gregory V. Hackman | 500,020 | 1,000,040 | | James M. Watkins | 350,014 | 700,028 | | Laurie Grijalva | 350,014 | 700,028 | | John Hazen | 350,014 | 700,028 | | Michael A. Love | 350,014 | 700,028 |
Summary Compensation Table
| (2) The amounts in this column reflect the aggregate grant date fair value of each option award granted during the fiscal year, computed in accordance with ASC 718. Such amount for James G. Conroy also includes his option awards containing both service and market vesting conditions. The valuation assumptions used in determining such amounts are further described in Note 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended April 1, 2023. |
Summary Compensation Table
| (3) Non-Equity Incentive Plan Compensation represents the cash performance-based bonus paid to the NEOs pursuant to the achievement of certain Company and financial performance goals assigned to each NEO during the fiscal year with respect to which such bonuses are earned, although payment of any such bonuses occurs after the completion of the fiscal year. |
Summary Compensation Table
| (4) All Other Compensation for fiscal 2023 consisted of the following: |
Summary Compensation Table
| | 401(k) Match | Payout of Accrued Vacation | Health Benefits (1) | Total | | James G. Conroy | $12,200 | $- | $15,936 | $28,136 | | Gregory V. Hackman | 12,200 | - | 6,252 | 18,452 | | James M. Watkins | 12,200 | - | 16,836 | 29,036 | | Laurie Grijalva | 12,200 | - | 10,752 | 22,952 | | John Hazen | 12,200 | - | 15,936 | 28,136 | | Michael A. Love | 12,200 | - | 8,960 | 21,160 |
Summary Compensation Table
| (1) The amounts in this column reflect the supplemental insurance policy premiums paid by the Company to cover out-of-pocket medical expenses not covered by the NEO’s health plans. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards
Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | | All Other Stock Awards: | | | | Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | Number of Shares of Stock or Units | Grant Date Fair Value of Stock and Option Awards | | | James G. Conroy | 4/26/2023(1) | $530,117 | $1,060,234 | $2,120,468 | | | | | | | | | 5/12/2022(2) | | | | 12,075 | 24,149 | 48,298 | | | | | | 5/12/2022(3) | | | | | | | 24,149 | $ | 2,099,997 | | | 5/12/2022(4) | | | | 28,442 | 56,885 | 86,189 | | $ | 4,000,031 | | Gregory V. Hackman | 4/26/2023(1) | 213,874 | 427,748 | 855,496 | | | | | | | | | 5/12/2022(2) | | | | 2,875 | 5,750 | 11,500 | | | | | | 5/12/2022(3) | | | | | | | 5,750 | $ | 500,020 | | James M. Watkins | 4/26/2023(1) | 127,357 | 254,713 | 509,426 | | | | | | | | | 5/12/2022(2) | | | | 2,013 | 4,025 | 8,050 | | | | | | 5/12/2022(3) | | | | | | | 4,025 | $ | 350,014 | | Laurie Grijalva | 4/26/2023(1) | 148,270 | 296,540 | 593,080 | | | | | | | | | 5/12/2022(2) | | | | 2,013 | 4,025 | 8,050 | | | | | | 5/12/2022(3) | | | | | | | 4,025 | $ | 350,014 | | John Hazen | 4/26/2023(1) | 147,924 | 295,847 | 591,694 | | | | | | | | | 5/12/2022(2) | | | | 2,013 | 4,025 | 8,050 | | | | | | 5/12/2022(3) | | | | | | | 4,025 | $ | 350,014 | | Michael A. Love | 4/26/2023(1) | 128,510 | 257,020 | 514,040 | | | | | | | | | 5/12/2022(2) | | | | 2,013 | 4,025 | 8,050 | | | | | | 5/12/2022(3) | | | | | | | 4,025 | $ | 350,014 |
Grants of Plan-Based Awards
| (1) Consists of an award of a cash bonus opportunity under our Cash Incentive Plan for Executives. |
Grants of Plan-Based Awards
| (2) Consists of the estimated future payout of performance share units granted to each NEO. The number of shares of common stock ultimately received depends on the Company’s cumulative earnings per share over a three-year performance period beginning March 27, 2022 and ending March 29, 2025 relative to the established performance target. See “Long Term Equity Incentives” above for further discussion of the payout at threshold, target and maximum performance. |
Grants of Plan-Based Awards
| (3) Consists of an award of restricted stock units subject to vesting over a three-year period in equal annual installments on each anniversary of the grant date. |
Grants of Plan-Based Awards
| (4) Consists of an option granted to the Company’s CEO to purchase 86,189 shares of common stock, subject to both service and market vesting conditions. The exercise price of the option is $86.96. Vesting of this option is contingent upon the market price of the Company's common stock achieving three stated price targets for 30 consecutive trading days on or prior to the third anniversary of the date of grant and the CEO’s continued service (subject to certain exceptions). If the first market price target of 150% of the exercise price is met, 33% of the option granted will cliff vest on the third anniversary of the date of grant, with an additional 33% of the option vesting if the second market price target of 175% of the exercise price is met, and the last 34% of the |
Grants of Plan-Based Awards
| option vesting if the final market price target of 200% of the exercise price is met, subject to the applicable service conditions. During fiscal 2023, none of the market price targets were satisfied. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table provides information regarding outstanding equity awards held by our NEOs as of April 1, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | | | Option Awards | | | Stock Awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Shares/units not vested (#) | Market value of units not vested ($) (15) | Equity incentive plan shares/units not vested (#) | Equity incentive plan market value of units not vested ($) | | James G. Conroy | 9,739 | 19,478 | - | 20.94 | 5/21/2030(1) | | | | | | | | | | | | 13,754(1) | 1,054,107 | | | | | 10,395 | 20,789 | - | 24.08 | 5/21/2030(1) | | | | | | | 9,440 | 9,440 | - | 28.63 | 5/19/2029(2) | | | | | | | | | | | | 3,492(2) | 267,627 | | | | | - | 227,273 | - | 28.63 | 5/19/2029(3) | | | | | | | | | | | | 7,661(4) | 587,139 | | | | | | | | | | | | 20,430(5) | 1,565,755 | | | - | - | 86,189 | 86.96 | 5/11/2032(6) | 24,149(7) | 1,850,779 | | | | | | | | | | | | -(8) | - | | Gregory V. Hackman | 6,749 | - | - | 6.15 | 6/5/2025(9) | | | | | | | 11,000 | - | - | 7.11 | 5/20/2024(10) | | | | | | | 3,126 | 6,253 | - | 20.94 | 5/21/2030(1) | | | | | | | | | | | | 4,415(1) | 338,366 | | | | | 3,005 | 6,010 | - | 23.57 | 8/9/2030(11) | | | | | | | | | | | | 2,122(11) | 162,630 | | | | | 7,166 | - | - | 23.92 | 5/24/2026(12) | | | | | | | 3,337 | 6,673 | - | 24.08 | 5/21/2030(1) | | | | | | | 3,107 | 3,107 | - | 28.63 | 5/19/2029(2) | | | | | | | | | | | | 1,149(2) | 88,059 | | | | | | | | | | 3,519(4) | 269,696 | | | | | | | | | | | | 9,384(5) | 719,190 | | | | | | | | 5,750(7) | 440,680 | | | | | | | | | | | | -(8) | - | | James M. Watkins | 2,924 | - | - | 6.15 | 6/5/2025(9) | | | | | | | 1,119 | - | - | 23.92 | 5/24/2026(12) | | | | | | | 1,369 | 2,738 | - | 20.94 | 5/21/2030(1) | | | | | | | | | | | | 1,450(1) | 111,128 | | | | | 730 | 1,461 | - | 24.08 | 5/21/2030(1) | | | | | | | 1,502 | 3,005 | - | 23.57 | 8/9/2030(11) | | | | | | | | | | | | 1,061(11) | 81,315 | | | | | 779 | 778 | - | 28.63 | 5/19/2029(2) | | | | | | | | | | | | 288(2) | 22,072 | | | | | | | | | | 1,364(4) | 104,537 | | | | | | | | | | | | 3,638(5) | 278,816 | | | | | | | | 1,040(13) | 79,706 | | | | | | | | | | 4,025(7) | 308,476 | | | | | | | | | | | | -(8) | - | | Laurie Grijalva | 6,749 | - | - | 6.15 | 6/5/2025(9) | | | | | | | 28,667 | - | - | 23.92 | 5/24/2026(12) | | | | | | | 5,962 | 5,962 | - | 20.94 | 5/21/2030(1) | | | | | | | | | | | | 4,210(1) | 322,654 | | | | | 6,364 | 6,363 | - | 24.08 | 5/21/2030(1) | | | | | | | 9,322 | 3,107 | - | 28.63 | 5/19/2029(2) | | | | | | | | | | | | 1,149(2) | 88,059 | | | | | | | | | | 2,082(4) | 159,564 | | | | | | | | | | | | 5,554(5) | 425,659 | | | | | | | | 4,025(7) | 308,476 | | | | | | | | | | | | -(8) | - |
Outstanding Equity Awards at Fiscal Year-End
| John Hazen | 11,254 | - | - | 18.66 | 3/19/2026(14) | | | | | | | - | 6,106 | - | 20.94 | 5/21/2030(1) | | | | | | | | | | | | 4,312(1) | 330,472 | | | | | - | 6,517 | - | 24.08 | 5/21/2030(1) | | | | | | | - | 3,107 | - | 28.63 | 5/19/2029(2) | | | | | | | | | | | | 1,149(2) | 88,059 | | | | | | | | | | 2,082(4) | 159,564 | | | | | | | | | | | | 5,554(5) | 425,659 | | | | | | | | 4,025(7) | 308,476 | | | | | | | | | | | | -(8) | - | | Michael A. Love | 5,061 | - | - | 6.15 | 6/5/2025(9) | | | | | | | 3,970 | - | - | 23.92 | 5/24/2026(12) | | | | | | | 2,021 | 4,041 | - | 20.94 | 5/21/2030(1) | | | | | | | | | | | | 2,853(1) | 218,654 | | | | | 2,157 | 4,313 | - | 24.08 | 5/21/2030(1) | | | | | | | 2,045 | 2,045 | - | 28.63 | 5/19/2029(2) | | | | | | | | | | | | 756(2) | 57,940 | | | | | | | | | | 1,364(4) | 104,537 | | | | | | | | | | | | 3,638(5) | 278,816 | | | | | | | | 4,025(7) | 308,476 | | | | | | | | | | | | -(8) | - |
Outstanding Equity Awards at Fiscal Year-End
| (1) The stock options and restricted stock units held by the NEO were granted on May 22, 2020, and vest over a four-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (2) The stock options and restricted stock units held by the NEO were granted on May 20, 2019, and vest over a four-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (3) The stock option held by the NEO was granted on May 20, 2019 and contained both service and market vesting conditions. Vesting of this option was contingent upon the market price of the Company's common stock achieving three stated price targets for 30 consecutive trading days on or prior to the fourth anniversary of the date of grant and the NEO’s continued service (subject to certain exceptions). If the first market price target of 150% of the exercise price was met, 33% of the option granted would cliff vest on the fourth anniversary of the date of grant, with an additional 33% of the option vesting if the second market price target of 175% of the exercise price was met, and the last 34% of the option vesting if the final market price target of 200% of the exercise price was met, subject to the applicable service conditions. During fiscal 2021, all three market price targets were met, and as such, 227,273 shares cliff vested subsequent to April 1, 2023, on May 20, 2023, the fourth anniversary of the date of grant. |
Outstanding Equity Awards at Fiscal Year-End
| (4) The restricted stock units held by the NEO were granted on May 14, 2021, and vest over a four-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (5) The performance share units held by the NEO were granted on May 14, 2021 and the number of shares ultimately received depends on the Company’s cumulative earnings per share target over a three-year performance period beginning March 28, 2021 and ending March 30, 2024 relative to its established target. The number of shares issued can range from 0% to 200% of the participant's target award. The number of shares shown herein reflects the maximum award level based on the estimated probable outcome of achieving the performance conditions as of April 1, 2023. |
Outstanding Equity Awards at Fiscal Year-End
| (6) The stock option held by the NEO was granted on May 12, 2022 and contains both service and market vesting conditions. Vesting of this option is contingent upon the market price of the Company's common stock achieving three stated price targets for 30 consecutive trading days on or prior to the third anniversary of the date of grant and the NEO’s continued service (subject to certain exceptions). If the first market price target of 150% of the exercise price is met, 33% of the option granted will cliff vest on the third anniversary of the date of grant, with an additional 33% of the option vesting if the second market price target of 175% of the exercise price is met, and the last 34% of the option vesting if the final market price target of 200% of the exercise price is met, subject to the applicable service conditions. During fiscal 2023, none of the market price targets were satisfied. |
Outstanding Equity Awards at Fiscal Year-End
| (7) The restricted stock units held by the NEO were granted on May 12, 2022, and vest over a three-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (8) The performance share units held by the NEO were granted on May 12, 2022 and the number of shares ultimately received depends on the Company’s cumulative earnings per share target over a three-year performance period beginning March 27, 2022 and ending March 29, 2025 relative to its established target. The number of shares issued can range from 0% to 200% of the |
Outstanding Equity Awards at Fiscal Year-End
| participant's target award. The number of shares shown herein is reflected as zero, or below threshold award level, based on the estimated probable outcome of achieving the performance conditions as of April 1, 2023. |
Outstanding Equity Awards at Fiscal Year-End
| (9) The stock options held by the NEO were granted on June 5, 2017, and vested over a five-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (10) The stock options held by the NEO were granted on May 20, 2016, and vested over a five-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (11) The stock options and restricted stock units held by the NEO were granted on August 10, 2020, and vest over a four-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (12) The stock options held by the NEO were granted on May 24, 2018, and vested over a four-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (13) The restricted stock units held by the NEO were granted on November 1, 2021, and vest over a four-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (14) The stock options held by the NEO were granted on March 19, 2018, and vested over a five-year period in equal annual installments on each anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year-End
| (15) Market value is based upon the closing stock price of $76.64 on March 31, 2023, the last trading day of fiscal 2023. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The table below reflects the value realized on the exercise of stock options and vesting of restricted stock units during the fiscal year ended April 1, 2023.
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 | | James G. Conroy | 56,880 | $3,787,657 | 45,800 | $3,904,876 | | Gregory V. Hackman | - | - | 15,925 | 1,344,100 | | James M. Watkins | - | - | 4,230 | 330,171 | | Laurie Grijalva | - | - | 14,283 | 1,221,268 | | John Hazen | 9,419 | 477,440 | 16,950 | 1,414,954 | | Michael A. Love | - | - | 9,774 | 829,735 |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The Company has a Deferred Compensation Plan permitting a select group of management employees and our directors to defer compensation to a future date. The value of the deferred compensation is recognized based on the fair value of the participants’ accounts. Our Company established a rabbi trust for the purpose of funding the benefits payable under this plan, with the assets invested in a variety of marketable securities and cash equivalents, excluding our Company’s stock. Under the Deferred Compensation Plan, the Company may credit participant accounts with discretionary contributions. Any Company credits are subject to a five-year graded vesting schedule; however, the Company did not make any discretionary contributions during fiscal 2023. The table below reflects the contributions made and aggregate earnings/(losses) during fiscal 2023 for Michael A. Love, who was the only NEO who participated in the Deferred Compensation Plan during the fiscal year.
Nonqualified Deferred Compensation
| Name | Executive Contributions in Fiscal 2023 (1) | Registrant Contributions in Fiscal 2023 | Aggregate Earnings/(Loss) in Fiscal 2023 (2) | Aggregate Withdrawals/Distributions | Aggregate Balance at April 1, 2023 | | Michael A. Love | $218,278 | $- | $(21,741) | $- | $695,120 |
Nonqualified Deferred Compensation
| (1) Contributions in fiscal 2023 were made from Mr. Love’s salary and cash performance-based bonus as reflected in the Summary Compensation Table. |
Nonqualified Deferred Compensation
| (2) Consists of an unrealized loss during the fiscal year. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The Committee recognizes that the possibility of the termination of an executive officer’s employment, and the uncertainty it creates, may result in the loss or distraction of the executive officer, and present challenges in recruiting potential executive officers, all to the detriment of the Company and its stockholders. The Committee considers the avoidance of such loss, distraction and challenges to be essential to protecting and enhancing the best interests of the Company and its stockholders. To help ensure that the Company has the continued attention and dedication of these executives and the availability of their continued service, to facilitate the Company’s recruiting efforts and to provide severance benefits upon a qualifying termination that are consistent with market practices, the Company provides certain severance payments and benefits to our NEOs pursuant to the terms of their employment agreements and equity award agreements. As noted in the CD&A, we employ our executive officers, including all of our NEOs, “at will.” We do not provide any Internal Revenue Code Section 280G excise tax gross-up payments and none of our change in control payments are “single trigger.” Refer to the “Executive Compensation--Employment Agreements” section above. The table below reflects the amount of compensation that would be payable to our NEOs in the event of a termination without “cause” or for “good reason” (a “Qualifying Termination”) (each such term as defined in the applicable employment agreement (except that for Ms. Grijalva the payments are only triggered by a termination without cause)), assuming the NEO had terminated employment on the last day of fiscal 2023. Except for Mr. Conroy, the NEOs’ equity awards granted prior to fiscal 2020 do not provide for any additional vesting upon a termination of employment. For Mr. Conroy there is an acceleration of vesting if he experiences a Qualifying Termination within three months preceding or 12 months following a change in control. Mr. Hackman retired from the Company effective June 16, 2023. Following his retirement, he will continue to vest in any equity awards granted in fiscal 2020 and forward (Mr. Hackman did not receive any equity awards in fiscal 2024). Mr. Hackman will also continue to receive supplemental health insurance benefits from the Company for a period of 18 months following his retirement date. He will not receive any additional compensation and has been excluded from the disclosure in this section.
Qualifying Termination in Connection with a Change in Control
Qualifying Termination in Connection with a Change in Control
Qualifying Termination in Connection with a Change in Control
| Name | Salary | Bonus (2) | Health and Welfare Benefits (3) | Restricted Stock Units (4) | Performance Share Units (4)(5) | Stock Options (4)(6) | Total Compensation | | James G. Conroy (1) | $3,342,500 | $603,799 | $14,422 | $3,759,652 | $1,565,755 | $13,542,186 | $22,828,314 | | James M. Watkins | 425,000 | 145,058 | - | 707,234 | 278,816 | 426,124 | 1,982,232 | | Laurie Grijalva | 245,000 | 269,723 | - | 878,754 | 425,659 | 815,690 | 2,634,826 | | John Hazen | 367,500 | 182,857 | - | 886,572 | 425,659 | 831,805 | 2,694,393 | | Michael A. Love (7) | 212,500 | 209,556 | - | 689,607 | 278,816 | 1,204,689 | 2,595,168 |
Qualifying Termination in Connection with a Change in Control
| (1) Pursuant to Mr. Conroy’s employment agreement, he is eligible to receive change in control severance payments and benefits (including accelerated vesting of outstanding equity awards) if his Qualifying Termination occurs within three months prior to, or 12 months following, a change in control. |
Qualifying Termination in Connection with a Change in Control
| (2) Pursuant to the terms of our Cash Incentive Plan for Executives, in the event of a change in control, payment of any annual incentive bonuses will be paid within 60 days following the change in control. The amounts set forth in this column represent the annual bonuses payable to our NEOs for fiscal 2023 which would have been paid to our NEOs following termination of employment for any reason upon or following a Change in Control. |
Qualifying Termination in Connection with a Change in Control
| (3) Consists of the employer portion of medical insurance premiums to be paid to Mr. Conroy for 12 months following termination of employment. |
Qualifying Termination in Connection with a Change in Control
| (4) Assumes either (i) the equity award is assumed by the surviving company in any change of control transaction and the Qualifying Termination occurs within 18 months following the change of control or (ii) the equity award is not assumed by the surviving company. |
Qualifying Termination in Connection with a Change in Control
| (5) For performance share units, vesting is based upon actual performance through the date of the change of control. |
Qualifying Termination in Connection with a Change in Control
| (6) For Mr. Conroy’s market-based option awards, vesting is based upon the achievement of the applicable trading price targets through the date of the change of control. |
Qualifying Termination in Connection with a Change in Control
| (7) Upon his termination of employment for any reason, Mr. Love receives payment of his vested deferred compensation pursuant to our non-qualified deferred compensation plan. As of April 1, 2023, Mr. Love’s vested account balance was equal to $695,120. |
Qualifying Termination in Connection with a Change in Control
In addition, for each of our NEOs, as was the case upon Mr. Hackman’s retirement effective June 16, 2023, a termination upon retirement results in the continued vesting of equity awards granted in fiscal 2020 and forward, excluding Mr. Conroy’s market-based option awards, without continued service requirements, subject to compliance with certain post-termination confidentiality and other obligations. Messrs. Conroy, Watkins, and Hazen and Ms. Grijalva are eligible to retire after the earlier of (a) age 60 with 10 years of service or (b) age 65. Mr. Love is eligible to retire after the earlier of (a) age 60 with 5 years of service or (b) age 65. With respect to performance share units, the number of shares issuable to a retired NEO upon completion of the applicable vesting period is based upon actual performance during the entire performance period, including the post-termination period without regard to the date of retirement. Excluding Mr. Conroy’s market-based option awards, in the event that an NEO’s employment terminates by reason of his or her death or disability, all unvested restricted stock units and stock options granted in fiscal 2020 and beyond become fully vested, and unvested performance share units granted in fiscal 2020 and beyond become vested based upon actual performance through the date of termination. Upon termination as a result of death or disability, Mr. Conroy’s market-based option awards would vest based upon the achievement of the applicable trading price targets through the date of termination. Any unvested restricted stock units and stock options granted to Mr. Conroy prior to fiscal 2020 become fully vested upon termination as a result of death. As of the last day of fiscal 2023, these amounts would have been as set forth in the table below.
Equity Compensation Plan Information
| Plan Category | Number of Securities to Be Issued Upon Exercise of Outstanding Equity Awards (a) (3) | Weighted-Average Exercise Price of Outstanding Equity Awards (b) (4) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | | Equity Compensation Plans Approved by Stockholders (1) | 1,025,567 | $31.59 | 2,120,271 | | Equity Compensation Plans Not Approved by Stockholders (2) | - | $- | 879,724 | | Total | 1,025,567 | $31.59 | 2,999,995 |
Equity Compensation Plan Information
| (3) The number of securities to be issued upon exercise of outstanding equity awards, includes the issuance of 64,826 performance share units. The performance share units granted May 14, 2021 assume maximum performance and the performance share units granted May 12, 2022 assume the payout of zero shares at below threshold performance. At target, the total amount of performance share units to be issued would be 90,256. The market-based stock option award granted to Mr. Conroy during fiscal 2023 has been included in the calculation even though the criteria for vesting has not been met as of April 1, 2023. |
CEO Pay Ratio
CEO Pay Ratio SEC rules require us to disclose the total annual compensation of our principal executive officer for fiscal 2023, who was James G. Conroy, the median of the total annual compensation of all employees other than our principal executive officer, as well as their ratio to each other (the “CEO Pay Ratio”). Total annual compensation for our principal executive officer and for the median of the total annual compensation of all employees is calculated in accordance with SEC rules applicable to the Summary Compensation Table. For fiscal 2023, these amounts were as follows:
CEO Pay Ratio
| ● | Our principal executive officer’s total annual compensation was $9,795,809. |
CEO Pay Ratio
| ● | Our median compensated employee’s total annual compensation was $14,005. Our median compensated employee works part-time for the Company. |
CEO Pay Ratio
| ● | Based on this information for fiscal 2023, we estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 699 to 1. |
CEO Pay Ratio
To identify the median of the annual total compensation of all of our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps:
CEO Pay Ratio
| ● | We determined our employee population as of April 1, 2023, our determination date. As of this date, we had a total of 8,986 employees, excluding our CEO. Of this total, 62% were part-time employees and seasonal or temporary workers. |
CEO Pay Ratio
| ● | To identify the “median employee” from our employee population, we measured the employee population’s total annual compensation for fiscal 2023, including salary, stock awards, option awards, non-equity incentive plan compensation, non-qualified deferred compensation earnings and all other compensation. |
CEO Pay Ratio
| ● | We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the calculation. We did not make any cost-of-living adjustments in identifying the “median employee.” |
CEO Pay Ratio
| ● | We annualized compensation of employees who were not employed with us for the full fiscal year. We did not annualize compensation for seasonal workers and we did not make full-time equivalent adjustments for part-time employees. In determining our median compensated employee and calculating the CEO Pay Ratio, we did not use any of the exemptions permitted under SEC rules. |
CEO Pay Ratio
Our Company believes that the CEO Pay Ratio set forth above is a reasonable estimate for fiscal 2023, determined in a manner consistent with SEC rules. The SEC rules for identifying the median compensated employee and calculating the CEO Pay Ratio based on that employee’s total annual compensation permit companies to adopt a variety of methodologies, to apply certain exemptions and to make certain assumptions, adjustments or estimates that reflect their compensation policies. Accordingly, the CEO Pay Ratio may not be comparable to the pay ratios reported by other companies, which may have used different methodologies, assumptions, adjustments or estimates in calculating their pay ratios.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship of “compensation actually paid” (“CAP”) to our principal executive officer (“PEO”) and other NEOs (“Non-PEO NEOs”) and our, and certain of our peers’, performance. For information regarding the Company’s compensation philosophy and how the Company aligns executive compensation with financial performance, refer to the “Compensation Discussion and Analysis” section of this Proxy Statement, beginning on page 19. The CAP for the PEO and the average Non-PEO NEOs is calculated by taking the Summary Compensation Table values: a) less the grant date fair value of equity granted during the year; b) plus the year-end fair value of unvested equity awards granted during the year; c) plus, for awards granted in prior years that are outstanding and unvested at the end of the year, the difference between the year-end fair value and the immediately prior year-end fair value; d) plus, for awards granted in prior years that vested during the year, the difference between the fair value as of the vesting date and the immediately prior year-end fair value. The following tables and narrative disclosure provide information on the relationship of the compensation of our Chief Executive Officer, or “PEO” and our other Non-PEO NEOs, compared to our performance over the past three fiscal years.
PAY VERSUS PERFORMANCE
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Fiscal Year | Summary Compensation Table Total PEO (1) | Compensation Actually Paid to PEO (1)(3) | Average Summary Compensation Table Total for Non-PEO NEO's (2) | Average Compensation Actually Paid to Non-PEO NEO's (2)(3) | Total Shareholder Return (4) | Peer Group Total Shareholder Return (4) | Net Income (in thousands) | CSM: Consolidated EBIT (in thousands) (5) | | 2023 | $9,795,809 | $(3,068,276) | $1,476,243 | $103,495 | $573.22 | $178.75 | $170,553 | $231,787 | | 2022 | 4,479,778 | 17,738,024 | 1,419,248 | 3,174,953 | 721.99 | 225.49 | 192,450 | 258,338 | | 2021 | 4,057,401 | 29,205,374 | 1,329,348 | 5,540,862 | 473.45 | 415.25 | 59,386 | 86,326 |
PAY VERSUS PERFORMANCE
| (1) James G. Conroy was PEO for each of fiscal years 2023, 2022 and 2021. |
PAY VERSUS PERFORMANCE
| (2) Non-PEO NEOs whose average compensation is reflected in columns (d) and (e) consist of Gregory V. Hackman, Laurie Grijalva, John Hazen and Michael A. Love for each of the years presented and James M. Watkins for fiscal 2023 and fiscal 2022, as Mr. Watkins became a Non-PEO NEO in fiscal 2022. |
PAY VERSUS PERFORMANCE
| (3) Compensation actually paid, or “CAP”, as reflected in columns (c) and (e) was calculated in accordance with SEC rules based on the Total Compensation as reflected in the Summary Compensation Table, or “SCT”. The following tables reconcile CAP to the SCT Total for the PEO and the non-PEO NEOs. |
Indemnification of Directors and Officers
Indemnification of Directors and Officers Our amended and restated bylaws provide that we will indemnify and advance expenses to our directors and executive officers to the fullest extent permitted by the General Corporation Law of the State of Delaware (the “DGCL”). In addition, our amended and restated certificate of incorporation provides that our directors will not be liable for monetary damages for breach of fiduciary duty, except as otherwise prohibited under the DGCL. We have entered into customary indemnification agreements with each of our directors and executive officers. The indemnification agreements provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the DGCL. Our indemnification agreements also provide that we are required to advance expenses to our directors and officers as incurred in connection with legal proceedings against them for which they may be indemnified and that the rights conferred in the indemnification agreements are not exclusive. There is no pending litigation or proceeding involving any of our directors or executive officers to which indemnification is being sought, and we are not aware of any pending litigation that may result in claims for indemnification by any director or executive officer.