DEF 14A of Weyco Group Inc
Filed Apr 5, 2024 · FY20230001558370-24-004751
Proposal One: Election of Directors
Proposal One: Election of Directors The Board of Directors currently consists of seven members. The Nominating and Corporate Governance Committee has recommended, and the Board of Directors has approved, the following nominees for reelection: Tina Chang, Robert Feitler, John W. Florsheim, Thomas W. Florsheim, Thomas W. Florsheim, Jr., Cory L. Nettles, and Frederick P. Stratton, Jr. A majority of the votes entitled to be cast by holders of outstanding shares of our common stock, represented in person or by proxy, will constitute a quorum at the Annual Meeting. Directors are elected by a plurality of the votes cast by the holders of our common stock at a meeting at which a quorum is present. “Plurality” means that the individuals who receive the largest number of votes cast are elected as directors up to the maximum number of directors to be chosen at the meeting. Consequently, any shares not voted (whether by abstention, broker nonvote or otherwise) have no impact in the election of directors except to the extent the failure to vote for an individual results in another individual receiving a comparatively larger number of votes. Votes “against” a candidate are given no legal effect and are not counted as votes cast in an election of directors. Votes will be tabulated by an inspector at the meeting. If any of the nominees should decline or be unable to act as a director, which is not expected, the proxies will be voted with discretionary authority by the persons named to vote in the proxy for a substitute nominee designated by the Board of Directors. Thomas W. Florsheim, Jr. and John W. Florsheim are brothers, and their father is Thomas W. Florsheim. There are no other family relationships between any of our directors.
The Board recommends that you vote “FOR” the election of
The Board recommends that you vote “FOR” the election of Tina Chang, Robert Feitler, John W. Florsheim, Thomas W. Florsheim, Thomas W. Florsheim, Jr., Cory L. Nettles, and Frederick P. Stratton, Jr. Information regarding the nominees, including the particular skills, qualifications and other attributes that we believe qualify each to serve on our Board, is set forth below as well as in “Board Information — Composition of the Board of Directors.” For additional information regarding the criteria to evaluate Board membership, see “Board Information — Nomination of Director Candidates” below.
Nominees for Election for Terms Expiring in 2025
Nominees for Election for Terms Expiring in 2025
John W. Florsheim, Director since 1996
John W. Florsheim, Director since 1996 John Florsheim has served as President, Chief Operating Officer and Assistant Secretary of the Company since 2002. He also has served as a Director of North Shore Bank since 2008. From 1999 to 2002, John served as Executive Vice President, Chief Operating Officer and Assistant Secretary of the Company. From 1996 to 1999, he served as Executive Vice President of the Company, and from 1994 to 1996, he served as Vice President of the Company. Prior to joining the Company in 1994, John was a Marketing Manager for M&M / Mars, Inc. John brings to the Board 30 years of experience in the shoe industry as well as detailed knowledge of the overall operations of the Company and expertise in the areas of sales and marketing, licensing and customer relations.
Director Compensation
Director Compensation Our directors who are not also employees receive a quarterly cash retainer. The quarterly cash retainer was $9,000 in 2023. Non-employee directors are also eligible to receive equity awards. In 2023, each non-employee director received 1,000 shares of restricted stock and options to purchase 3,500 shares of common stock under the Weyco Group, Inc. 2017 Incentive Plan. The restricted stock awards vest ratably over four years and the stock options vest ratably over five years. The following table shows director compensation for the non-employee directors for 2023.
Director Compensation
| | Fees Earned or | Stock | Option | All Other | | | Name | Paid in Cash ($) | Awards ($)(1) | Awards ($)(2) | Compensation(3) | Total ($) | | (a) | (b) | (c) | (d) | (g) | (h) | | Thomas W. Florsheim | $36,000 | $25,790 | $23,205 | $14,400 | $99,395 | | Tina Chang | $36,000 | $25,790 | $23,205 | $— | $84,995 | | Robert Feitler | $36,000 | $25,790 | $23,205 | $— | $84,995 | | Cory L. Nettles | $36,000 | $25,790 | $23,205 | $— | $84,995 | | Frederick P. Stratton, Jr. | $36,000 | $25,790 | $23,205 | $— | $84,995 |
Director Compensation
Notes:
Director Compensation
| (1) Grant date fair value (which was calculated to be $25.79 per share) of the restricted stock granted on August 25, 2023, computed in accordance with Accounting Standards Codification Topic 718 (“ASC 718”). See Note 19 of the Notes to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K. |
Director Compensation
| (2) Grant date fair value (which was calculated to be $6.63 per option) of the stock options granted on August 25, 2023, computed in accordance with ASC 718 as calculated under the Black-Scholes option pricing model, as described in Note 19 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K. |
Director Compensation
| (3) On December 28, 2000, a director and Chairman Emeritus of the Board, Thomas W. Florsheim, entered into a consulting agreement with the Company under which he agreed to act as advisor to the Company in connection with our acquisition and sale of products and materials. In accordance with this agreement, Thomas W. Florsheim was paid $14,400 in 2023. |
Director Compensation
As of December 31, 2023, each non-employee director had outstanding the following number of stock awards and option awards:
Director Compensation
| | Stock | Option | | | Awards | Awards | | Name | Outstanding | Outstanding | | Thomas W. Florsheim | 2,500 | 23,000 | | Tina Chang | 2,500 | 22,300 | | Robert Feitler | 2,500 | 23,000 | | Cory L. Nettles | 2,500 | 23,000 | | Frederick P. Stratton, Jr. | 2,500 | 23,000 |
Summary Compensation Table
Summary Compensation Table The following table sets forth total compensation of our named executive officers (“NEOs”) for the years ended December 31, 2023 and 2022.
Summary Compensation Table
| | | | | | Non-equity | | | | | | | Stock | Option | incentive plan | All other | | | Name and Principal Position | Year | Salary ($) | Awards ($) | Awards ($) | compensation | compensation ($) | Total ($) | | (a) | (b) | (c) | (e) | (f) | (g) | (i) | (j) | | Thomas W. Florsheim, Jr. | 2023 | $753,239 | $38,685(1) | $46,410(3) | $508,436(5) | $36,173(6) | $1,382,943 | | Chairman and Chief Executive Officer | 2022 | $731,300 | $43,245(2) | $47,460(4) | $493,628(5) | $32,034(6) | $1,347,667 | | John W. Florsheim | 2023 | $719,821 | $38,685(1) | $46,410(3) | $485,879(5) | $19,229(6) | $1,310,024 | | President, Chief Operating Officer and Assistant Secretary | 2022 | $698,855 | $43,245(2) | $47,460(4) | $471,727(5) | $18,313(6) | $1,279,600 | | Brian Flannery | 2023 | $397,000 | $20,632(1) | $25,857(3) | $178,650(5) | $14,576(7) | $636,715 | | Vice President, and President of Stacy Adams Brand | 2022(8) | — | — | — | — | — | — |
Summary Compensation Table
Notes:
Summary Compensation Table
| (1) This amount represents the grant date fair value ($25.79 per share) of the restricted stock granted on August 25, 2023, computed in accordance with ASC 718. See Note 19 of the Notes to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K. Restricted stock vests ratably over four years. |
Summary Compensation Table
| (2) This amount represents the grant date fair value ($28.83 per share) of the restricted stock granted on August 25, 2022, computed in accordance with ASC 718. See Note 20 of the Notes to the Consolidated Financial Statements in our 2022 Annual Report on Form 10-K. Restricted stock vests ratably over four years. |
Summary Compensation Table
| (3) This amount includes the grant date fair value of the stock option awards granted on August 25, 2023, using the fair value of $6.63 per option computed in accordance with ASC 718, as calculated under the Black-Scholes option pricing model as described in Note 19 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K. Stock options vest ratably over five years and expire 10 years from grant date. |
Summary Compensation Table
| (4) This amount includes the grant date fair value of the stock option awards granted on August 25, 2022, using the fair value of $6.78 per option computed in accordance with ASC 718, as calculated under the Black-Scholes option pricing model as described in Note 20 to the Consolidated Financial Statements in our 2022 Annual Report on Form 10-K. Stock options vest ratably over five years and expire 10 years from grant date. |
Summary Compensation Table
| (5) These amounts reflect annual cash bonuses related to the achievement of Company-wide financial goals in 2023 and 2022 and were paid after each respective fiscal year end (December 31). A more detailed description of these bonuses is provided under “Non-Equity Incentive Plan Compensation” below. |
Summary Compensation Table
| (6) All other compensation relates to the use of an automobile, life insurance premiums and 401(k) match contributions. |
Summary Compensation Table
| (7) All other compensation relates to life insurance premiums and 401(k) match contributions. |
Summary Compensation Table
| (8) Brian became a named executive officer in 2023. Therefore, Brian’s 2022 compensation data is not being reported. |
Summary Compensation Table
Non-Equity Incentive Plan Compensation Non-equity incentive plan compensation represents annual cash bonuses awarded pursuant to our 2017 Incentive Plan. Annual cash bonuses are based solely upon the achievement of Company-wide financial goals, established by the Compensation Committee. Bonuses are based on a set percentage of the executive’s salary, with a maximum bonus of 67.5% of salary for Thomas W. Florsheim, Jr. and John W. Florsheim, and 45.0% of salary for Brian Flannery. For Thomas W. Florsheim, Jr. and John W. Florsheim, the 2023 annual cash bonus was based on specified earnings targets set by the former Corporate Governance and Compensation Committee. For Brian Flannery, the 2023 annual cash bonus was based on specified gross margin targets for the Stacy Adams division. For 2023, Thomas W. Florsheim, Jr. and John W. Florsheim each received a maximum cash bonus equal to 67.5% of their base salaries, and Brian Flannery received a maximum cash bonus equal to 45.0% of his base salary. For 2022, Thomas W. Florsheim, Jr. and John W. Florsheim each received a maximum cash bonus equal to 67.5% of their base salaries.
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023
| | | Option Awards | | | | Stock Awards | | | | | | | | | | Market | | | | Number of | Number of | | | Number of | Value of | | | | Securities | Securities | | | Shares or | Shares or | | | | Underlying | Underlying | | | Units of | Units of | | | | Unexercised | Unexercised | Option | Option | Stock That | Stock That | | | | Options (#) | Options (#) | Exercise | Expiration | Have Not | Have Not | | Name | | Exercisable | Unexercisable(1) | Price ($) | Date | Vested (#)(2) | Vested ($)(3) | | (a) | Grant Date | (b) | (c) | (e) | (f) | (g) | (h) | | Thomas W. Florsheim, Jr. | 8/25/2017 | 15,000 | | $27.94 | 8/25/2027 | | | | | 8/23/2018 | 8,000 | | $37.22 | 8/23/2028 | | | | | 8/14/2019 | 8,000 | 2,000 | $23.38 | 8/14/2029 | | | | | 8/26/2020 | 6,000 | 4,000 | $18.00 | 8/26/2030 | 500 | $15,680 | | | 8/25/2021 | 4,000 | 6,000 | $24.00 | 8/25/2031 | 1,000 | $31,360 | | | 8/25/2022 | 1,400 | 5,600 | $28.83 | 8/25/2032 | 1,125 | $35,280 | | | 8/25/2023 | | 7,000 | $25.79 | 8/25/2033 | 1,500 | $47,040 | | John W. Florsheim | 8/25/2017 | 15,000 | | $27.94 | 8/25/2027 | | | | | 8/23/2018 | 8,000 | | $37.22 | 8/23/2028 | | | | | 8/14/2019 | 8,000 | 2,000 | $23.38 | 8/14/2029 | | | | | 8/26/2020 | 6,000 | 4,000 | $18.00 | 8/26/2030 | 500 | $15,680 | | | 8/25/2021 | 4,000 | 6,000 | $24.00 | 8/25/2031 | 1,000 | $31,360 | | | 8/25/2022 | 1,400 | 5,600 | $28.83 | 8/25/2032 | 1,125 | $35,280 | | | 8/25/2023 | | 7,000 | $25.79 | 8/25/2033 | 1,500 | $47,040 | | Brian Flannery | 8/25/2017 | 7,500 | | $27.94 | 8/25/2027 | | | | | 8/23/2018 | 4,000 | | $37.22 | 8/23/2028 | | | | | 8/14/2019 | 4,800 | 1,200 | $23.38 | 8/14/2029 | | | | | 8/26/2020 | 3,600 | 2,400 | $18.00 | 8/26/2030 | 250 | $7,840 | | | 8/25/2021 | 2,400 | 3,600 | $24.00 | 8/25/2031 | 500 | $15,680 | | | 8/25/2022 | 780 | 3,120 | $28.83 | 8/25/2032 | 600 | $18,816 | | | 8/25/2023 | | 3,900 | $25.79 | 8/25/2033 | 800 | $25,088 |
Outstanding Equity Awards at December 31, 2023
Notes:
Outstanding Equity Awards at December 31, 2023
| (1) Option awards vest ratably over five years beginning on the first anniversary of the grant date. |
Outstanding Equity Awards at December 31, 2023
| (2) Restricted stock awards vest ratably over four years beginning on the first anniversary of the grant date. |
Outstanding Equity Awards at December 31, 2023
| (3) Amounts are calculated using the market value of our common stock on December 29, 2023, of $31.36. |
Outstanding Equity Awards at December 31, 2023
All awards reflected in the above table were granted under our 2017 Incentive Plan.
Pension Benefits
Pension Benefits The Company has a defined benefit pension plan which was frozen effective December 31, 2016. No benefits have been accrued under the plan subsequent to that date. The Company also has an unfunded supplemental pension plan for key executives so they may receive pension benefits which they would otherwise be prevented from receiving as a result of certain limitations of the Internal Revenue Code. Normal retirement benefits generally equal one and six-tenths of an employee’s average annual compensation multiplied by number of years of credited service, up to a maximum of 25 years. The plans provide for normal retirement at age 65 and provide for reduced benefits for early retirement beginning at age 55. Pension benefits are payable under a variety of options, to be selected by the retiree and are calculated under a formula that is integrated with Social Security, although the amounts determined under the formula are not reduced by Social Security benefits. Benefits under the supplemental plan are payable either in the form of an annuity or as a single lump-sum payment following the retiree’s termination of service. The normal retirement benefit is 1.6% of average compensation per year and is based on (i) the highest average earnings for any 5 consecutive years during the 10 calendar years ending December 31, 2016, (ii) length of service up to 25 years and (iii) the highest average covered compensation for Social Security purposes. The foregoing describes the general formula under the defined benefit plan and related excess benefits plan as revised in 1997. Those salaried employees who were covered in the plans on January 1, 1989, and all officers (including the NEOs) who are Senior Vice Presidents or above are provided with the higher of the benefits described above or a minimum benefit based on a prior formula through the defined benefit plan, the unfunded excess benefits plan described above and an unfunded deferred compensation plan. The normal retirement benefit under the prior formula is based on the highest average earnings for any five consecutive years during the 10 calendar years preceding December 31, 2016 and length of service up to 25 years. The normal retirement benefit for officers (including the NEOs) who are Senior Vice Presidents or above is based on the highest average earnings for any five years during the 20 calendar years preceding December 31, 2016 and length of service up to 25 years. Minimum benefit amounts are not subject to any deduction for Social Security benefits. Under the excess benefits plan, upon a change in control, a lump sum benefit payment shall be made to each participant.
Employment Contracts and Potential Payments Upon Termination or Change of Control
Employment Contracts and Potential Payments Upon Termination or Change of Control The Company has entered into employment contracts with Thomas W. Florsheim, Jr. and John W. Florsheim whereby, for services to be rendered, their employment will continue until December 31, 2025, at salary levels to be determined and reviewed periodically. These contracts provide, among other things, that a lump sum amount equal to slightly less than three times the base amount compensation (as defined in Section 280G of the Internal Revenue Code) will be paid to Thomas W. Florsheim, Jr. and John W. Florsheim, respectively, as severance pay, in the event the Company terminates the executive’s employment without cause or the individual terminates his employment following a change of control of the Company. A “change of control” is defined in the employment agreements as: a change in control of more than 15% of the shares of the Company; the replacement of two or more directors by persons not nominated by the Board of Directors; any enlargement of the size of the Board of Directors if the change was not supported by the existing Board of Directors; a merger, consolidation or transfer of assets of the Company; or a substantial change in his responsibilities. In the event Thomas W. Florsheim, Jr. or John W. Florsheim is prevented from performing his duties by reason of permanent disability, the executive’s normal salary will be discontinued and a disability salary of 75% of the individual’s then-current salary will be paid until December 31, 2025. Also, in the event Thomas W. Florsheim, Jr. or John W. Florsheim dies prior to the termination of his employment under the contract, a death benefit equal to his salary at the annual rate being paid to the executive at the date of death will be paid to a designated beneficiary for a three-year period. As of March 31, 2024, the annual salary of Thomas W. Florsheim, Jr. is $776,000 and John W. Florsheim’s annual salary is $741,000. In accordance with the terms of the 2017 Incentive Plan and 2024 Incentive Plan, if a change of control should occur, all options and stock awards granted by the Company shall immediately vest.
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 between executive compensation actually paid and certain financial performance of the Company.
Pay Versus Performance
| | Summary | | Average Summary | Average | | | | | Compensation | Compensation | Compensation | Compensation | Value of Initial Fixed $100 | | | | Table Total | Actually Paid | Table Total for | Actually Paid to | Investments based on Total | Net Income | | Year | for PEO(1) | to PEO(2) | Non-PEO NEOs(3) | Non-PEO NEOs(4) | Shareholder Return(5) | (in Millions)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (h) | | 2023 | $1,382,943 | $1,613,111 | $973,370 | $1,153,855 | $146 | $30.2 | | 2022 | $1,347,667 | $1,360,466 | $937,959 | $948,056 | $145 | $29.5 |
Pay Versus Performance
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Tom Florsheim, Jr., our principal executive officer (“PEO”), for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation — Summary Compensation Table.” |
Pay Versus Performance
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Tom Florsheim, Jr. as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Tom during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Tom’s total compensation for each year to determine the compensation actually paid: |
Pay Versus Performance
| | Reported Summary | | | Compensation | | | Compensation | Reported Value of | Equity Award | Actually Paid to | | Year | Table Total for PEO | Equity Awards(a) | Adjustments(b) | PEO | | 2023 | 1,382,943 | (85,095) | 315,263 | 1,613,111 | | 2022 | 1,347,667 | (90,705) | 103,504 | 1,360,466 |
Pay Versus Performance
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
Pay Versus Performance
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay Versus Performance
| | | Year over Year | Fair Value as of | Year over Year | Fair Value at the End | Value of Dividends or | | | | | Change in Fair | Vesting Date of | Change in Fair | of the Prior Year of | other Earnings Paid on | | | | | Value of | Equity Awards | Value of Equity | Equity Awards that | Stock or Option Awards | | | | Year End Fair | Outstanding and | Granted and | Awards Granted in | Failed to Meet | not Otherwise Reflected | Total Equity | | | Value of Equity | Unvested Equity | Vested in the | Prior Years that | Vesting Conditions | in Fair Value or Total | Award | | Year | Awards | Awards | Year | Vested in the Year | in the Year | Compensation | Adjustments | | 2023 | $120,190 | $152,915 | $— | $37,459 | $— | $4,699 | $315,263 | | 2022 | $55,050 | $(6,340) | $— | $50,390 | $— | $4,404 | $103,504 |
Pay Versus Performance
| (3) The dollar amounts reported in column (d) represent the average of the amounts reported for our NEOs as a group (excluding Tom Florsheim, Jr.) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Tom Florsheim, Jr.) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, John W. Florsheim and Brian Flannery; and (ii) for 2022, John W. Florsheim and Kevin S. Schiff. |
Pay Versus Performance
| (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Tom Florsheim, Jr.), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Tom Florsheim, Jr.) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Tom Florsheim, Jr.) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |
Pay Versus Performance
| | Average Reported | | | Average | | | Summary Compensation | Averaged Reported | | Compensation | | | Table Total for Non-PEO | Fair Value of Equity | Average Equity | Actually Paid to | | Year | NEO’s | Awards | Award Adjustments(a) | Non-PEO NEOs | | 2023 | $973,370 | $(65,792) | $246,277 | $1,153,855 | | 2022 | $937,959 | $(70,106) | $80,203 | $948,056 |
Pay Versus Performance
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Pay Versus Performance
| | | | Average Fair | | Average Fair Value | Average Value of | | | | | | Year over Year | Value as of | Year over Year | at the End of the | Dividends or other | | | | | | Change in Fair | Vesting Date of | Change in Fair | Prior Year of Equity | Earnings Paid on Stock | | | | | | Value of | Equity Awards | Value of Equity | Awards that Failed | or Option Awards not | Total | | | | Average Year | Outstanding and | Granted and | Awards Granted in | to Meet Vesting | Otherwise Reflected in | Average | | | | End Fair Value of | Unvested Equity | Vested in the | Prior Years that | Conditions in the | Fair Value or Total | Equity Award | | | Year | Equity Awards | Awards | Year | Vested in the Year | Year | Compensation | Adjustments | | | 2023 | $93,017 | $120,429 | $— | $29,303 | $— | $3,528 | $ | 246,277 | | 2022 | $42,483 | $(4,683) | $— | $39,101 | $— | $3,302 | $ | 80,203 |
Pay Versus Performance
| (5) The cumulative total shareholder return (“TSR”) reported in column (f) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
Pay Versus Performance
| (6) The dollar amounts reported in column (h) represent the amount of net income reflected in our audited financial statements for the applicable year. |