DEF 14A of Natures Sunshine Products Inc
Filed Mar 15, 2024 · FY20230001628280-24-011333
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DEF 14A 1 natr2024proxystatement.htm DEF 14A
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| UNITED STATES | | | SECURITIES AND EXCHANGE COMMISSION | | | Washington, D.C. 20549 | | | SCHEDULE 14A | | | Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) | | | Filed by the Registrant x | | | Filed by a Party other than the Registrant o | | | Check the appropriate box: | | | □ | Preliminary Proxy Statement | | □ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | | ☒ | Definitive Proxy Statement | | □ | Definitive Additional Materials | | □ | Soliciting Material under §240.14a-12 | | | | | Nature's Sunshine Products, Inc. | | | (Name of Registrant as Specified In Its Charter) | | | (Name of Person(s) Filing Proxy Statement, if other than the Registrant) | | | Payment of Filing Fee (Check the appropriate box): | | | ☒ | No fee required. | | □ | Fee paid previously with preliminary materials. | | □ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
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| Table of Contents | | | | | Proxy Statement Summary | 6 | Proposals | 52 | | | | Proposal One: Election of Directors | 53 | | Corporate Governance | 10 | Proposal Two: Advisory Resolution to Approve Named Executive Officer Compensation | 54 | | Board Structure and Leadership | 11 | | | | Board Meetings in 2023 | 11 | Proposal Three: Ratification of Appointment of Independent Registered Public Accounting Firm | 55 | | Director Independence | 12 | | | | Board Committees | 12 | | | | Board Risk Oversight | 15 | | | | Certain Relationships and Related Transactions | 16 | Other Information | 57 | | | | Audit Committee Report | 58 | | Directors | 18 | Security Ownership of Certain Beneficial Owners and Management | 59 | | Board Leadership and Diversity | 19 | | | | Nominees for Election | 21 | Delinquent Section 16(a) Reports | 61 | | Director Compensation | 26 | Equity Compensation Plans | 61 | | | | Questions and Answers about the 2023 Annual Meeting and this Proxy Statement | 62 | | Executive Officers | 29 | | | | | | Householding of Proxy Materials | 65 | | Executive Compensation | 32 | Other Matters | 65 | | Narrative Discussion of Compensation Policies | 33 | | | | Summary Compensation Table | 43 | | | | Outstanding Equity Awards at Year-End | 44 | | | | Pay versus Performance | 46 | | | | Potential Payments Upon Termination or Change in Control | 49 | | | | Certain information included or incorporated herein by reference in this document may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies. All statements (other than statements of historical fact) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions, and are based on assumptions and assessments made in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. All forward-looking statements speak only as of the date of this document and are expressly qualified in their entirety by the cautionary statements included in or incorporated by reference into annual report on Form 10-K filed with the SEC on March 12, 2024. Except as is required by law, we expressly disclaim any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this document. Throughout this document, we refer to Nature’s Sunshine Products, Inc., together with our subsidiaries, as "Nature's Sunshine," “we,” “us,” “our,” “our Company” or “the Company.” | | | |
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| | | | | Letter from our President and Chief Executive Officer | | | Dear Fellow Shareholder: I invite you to attend the 2024 Nature’s Sunshine Products, Inc. Annual Meeting of Shareholders (the “Annual Meeting”), which will be held at Nature’s Sunshine Products, Inc.’s principal executive offices, located at 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043, on Wednesday, May 1, 2024, at 10:00 a.m., Mountain Daylight Time. The matters to be acted upon at the Annual Meeting are described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement. A copy of our annual report is also enclosed. Whether or not you plan to attend the Annual Meeting, and regardless of the number of shares you hold, it is important that your shares be represented and voted. Therefore, I urge you to vote as promptly as possible. Timely voting will ensure your representation at the Annual Meeting. If you decide to attend the Annual Meeting in person, we will gladly welcome your attendance, and you will be able to vote at the meeting, even if you have previously submitted your proxy. Thank you for your continued support of Nature’s Sunshine Products, Inc. | | | /s/ Terrence Moorehead Terrence Moorehead President and Chief Executive Officer March 15, 2024 |
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| Proxy Statement Summary |
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| 2024 Annual Meeting of Shareholders |
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| Time and Date | Place | Record Date | Voting | | 10:00 a.m. Mountain Daylight Time | 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043 | February 21, 2024 | Shareholders of record as of the Record Date are entitled to vote | | May 1, 2024 | | | |
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| Agenda and Voting Recommendations |
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| Proposal | Description | Board Recommendation | Page | | 1 | Election of Directors | ✓ For each nominee | 53 | | 2 | Advisory Resolution to Approve Named Executive Officer Compensation | ✓ For | 54 | | 3 | Ratification of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for the year ending December 31, 2024 | ✓ For | 55 |
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| The proxy solicitation materials are being sent on or about March 15, 2024 to our shareholders entitled to vote at the Annual Meeting. Pursuant to rules of the United States Securities and Exchange Commission (the “SEC”), we are providing our shareholders with access to our Notice of Annual Meeting of Shareholders, Proxy Statement and proxy card (referred to collectively as the “proxy materials”), and Annual Report on Form 10-K for the year ended December 31, 2023 (referred to as the “Annual Report”), over the internet. Because you received by mail a Notice Regarding the Availability of Proxy Materials, including a notice of Annual Meeting of Shareholders (referred to as the “Notice”), you will not receive a printed copy of the proxy materials unless you have previously made an election to receive these materials in printed form. Instead, all shareholders will have the ability to access the proxy materials and Annual Report by visiting the website at http://www.proxyvote.com. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found on the Notice. In addition, all shareholders may request to receive proxy materials in printed form by mail on an ongoing basis. |
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| 6 | 2024 Proxy Statement | |
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| 2023 Performance |
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| In 2023, we achieved excellent net sales, driven by strong growth in key markets. We continued to see strong growth in Asia, which was up 8% from the prior year, while North America grew by 4.9% for the full year, capping a great comeback year. We began to see results from our cost-saving and efficiency strategies, yielding improved profitability over the prior year. Our overall 2023 performance is highlighted in the metrics and charts below. | | | | | $445.3 Million | $16.4 Million | $40.4* Million | $122.12** | | NET SALES | NET INCOME | ADJUSTED EBITDA | TSR | | *We define adjusted EBITDA, which is a non-GAAP financial measure, as net income/loss from continuing operations before taxes, depreciation, amortization and other income/loss adjusted to exclude share-based compensation expense and certain unusual (noted) adjustments for non- budgeted costs deemed appropriate by the Compensation Committee. A reconciliation of net income to adjusted EBITDA is provided at the end of this Proxy Statement. **TSR is based on a comparison that assumes $100 was invested on December 31, 2020 in our common stock. | | | |
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| *All amounts in ($) millions. | | As we look to 2024, we continue to expand our digital initiatives and investments in key markets. Consistent with these objectives, we will continue to prioritize investments in digital, field activation, manufacturing efficiency, and brand-building to enhance the customer experience. As such, we look forward to driving more growth in 2024. |
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| | Nature's Sunshine Products, Inc. | 7 |
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| Our Current Board of Directors |
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| 7 of 8 Directors are Independent | 50% of directors self‐identify as women or as from an underrepresented community | 4 yrs. 9 mos. Average Tenure | 25% of committee leadership positions are filled by women |
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| NAME | EXPERIENCE | INDEPENDENT | AGE | DIRECTOR SINCE | COMMITTEES | | Richard Moss | Chairman of the Board Former CFO of Hanesbrands Inc. | ✓ | 66 | 2018 | Audit Compensation | | Terrence Moorehead | President & Chief Executive Officer of Nature's Sunshine Products, Inc. | | 61 | 2018 | | | Curtis Kopf | Chief Experience Officer at REI | ✓ | 58 | 2022 | Governance Risk Management (Chair) | | Tess Roering | Former Chief Commercial Officer and Chief Marketing Officer at CorePower Yoga | ✓ | 55 | 2022 | Audit Compensation | | Robert Straus | Portfolio Manager at Wynnefield Capital Management, LLC | ✓ | 53 | 2017 | Compensation (Chair) Governance | | Christopher Teets | Founding Partner of Red Mountain Capital Advisors LLC | ✓ | 51 | 2015 | Audit (Chair) Governance | | Heidi Wissmiller | Former Chief Growth Officer at Rodan + Fields | ✓ | 59 | 2020 | Governance (Chair) Risk Management | | Rong Yang | CEO Fosun Pharma USA Inc. | ✓ | 45 | 2022 | Audit Risk Management |
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| 8 | 2024 Proxy Statement | |
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| 2023 Executive Compensation |
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| Executive Compensation Highlights | | Obtaining and retaining a talented and experienced leadership team is key to our long term success. Our Compensation Committee has designed an effective compensation program, following important policies and best practices, in order to achieve this objective. Our named executive officer ("NEO") compensation packages primarily consists of three elements: (i) a base salary, (ii) annual cash incentive based upon overall Company or segment financial performance, and (iii) participation in long-term, stock-based incentive awards, in the form of restricted stock units ("RSUs") and performance-contingent RSUs ("PRSUs"). In 2023, we did not make significant changes to our executive compensation with it being the first full year of employment for all NEOs except Mr. Moorehead. Our performance in 2023 produced positive outcomes on all fronts, highlighted by strong fundamental growth in key markets and significant results from our profitability measures. Despite continued inflationary pressures and significant foreign exchange impacts, we managed to record overall net sales and net income gains. All of these impacted our results and performance, and in turn, our executive compensation. |
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| 2023 Performance-based Results Performance-based incentives paid to our NEOs in 2023 reflected our continued focus to take our Company to the next level. | | | Annual Cash Incentive | Our 2023 corporate revenue and adjusted EBITDA performance exceeded targets, resulting in a 2023 Annual Cash Incentive payout of 160%. | | Performance-based RSUs | In 2023, PRSUs were granted and contingent on rolling four-quarter adjusted EBITDA, which if achieved would evidence strong overall growth to our top and bottom line. | | Early 2024 Compensation Decisions | | | Based on a 94.3 percent vote of favorable shareholder approval in 2023, the Compensation Committee decided not to make any material changes to our compensation philosophies, policies and practices in 2024. In early 2024 our Compensation Committee reviewed the competitiveness of the current base salaries of our NEOs, our 2022 Executive Compensation Report, and our performance during 2023. Based on this review, base salary increases were provided to all NEOs. | | | For more information on our executive compensation program and the 2023 compensation of our named executive officers, see the section entitled "Narrative Discussion of Compensation Policies and Practices." | |
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| | Nature's Sunshine Products, Inc. | 9 |
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| Summary | Governance | Directors | Officers | Compensation | Proposals | Other |
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| Board Structure | | OUR FRAMEWORK |
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| Common Stock | We have one class of stock with equal voting rights. One share equals one vote. | | Annual Director Elections | Our Directors serve one-year terms and are elected each year. | | Corporate Governance Guidelines | Our guidelines cover requirements for independence, service on other boards, director qualification standards and selection criteria, in addition to periodic evaluations. | | Majority Voting | We have majority voting for uncontested elections of directors. | | Separate Chairman and CEO roles | Our CEO focuses on running Nature's Sunshine while our independent Chairman oversees accountability at the Board level. | | Board Refreshment | We have age and term limits for our Directors to ensure we keep an up-to-date team of experienced and qualified individuals. | | Executive Sessions | We have regularly scheduled executive sessions of independent directors at the Board and committee levels. | | Financial Expertise | We have 100% independent Audit and Compensation Committees. | | Stock Ownership Guidelines | We have robust stock ownership guidelines for our directors and executive officers. | | Hedging, Pledging and Short Sale Prohibitions | We prohibit hedging transactions, put and call options, pledging stock, or holding stock in margin accounts. | | Board Oversight of Key Initiatives | Our Board regularly reviews and oversees our ESG initiatives and our enterprise risk management program. |
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| LEADERSHIP STRUCTURE | | Mr. Moss serves as the Chairman of the Board. The Chairman of the Board is responsible for chairing Board meetings and meetings of shareholders, setting the agendas for Board meetings and providing information to the Board members in advance of meetings and between meetings. We believe that the leadership structure of the Board is appropriate because it provides both unified and consistent leadership, effective independent oversight, and expertise in the management of our complex operations as a consumer product and direct selling business. |
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| | Nature's Sunshine Products, Inc. | 11 |
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| BOARD MEETINGS AND ATTENDANCE | | Our Board of Directors held 5 meetings during 2023 with each Board Member serving at the time attending 75 percent or more of the board and committee meetings. Although we do not have a formal policy regarding attendance by members of the Board of Directors at the Annual Meeting, Directors are expected to attend, and all Directors attended the 2023 Annual Meeting. |
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| DIRECTOR INDEPENDENCE AND QUALIFICATIONS | | The Board has determined that all current directors and nominees for election at the Annual Meeting, except Mr. Moorehead, are independent directors under the current standards for “independence” established by NASDAQ. In making this determination, our Board considered Mr. Straus’ affiliation with Wynnefield Capital Management, LLC, one of our shareholders and Mr. Yang’s affiliation with Fosun Pharma, one of our shareholders. The Board has four standing committees: Audit Committee, Compensation Committee, Governance Committee, and Risk Management Committee. The Board has determined that the committee chairs and members are independent under the current standards for “independence” established by NASDAQ. |
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| BOARD COMMITTEES | | Our Board and Governance Committee regularly review the responsibilities and composition of the standing committees. We strive to promote diverse experience and perspectives across the Board and its committees. We believe our current structure allows our CEO and management to focus on our business, while our independent directors and Chairman monitor and drive accountability at a high level. The current composition and responsibilities of the standing committees is described below. Each committee operates under a charter, all of which are reviewed and approved annually. The committee charters may be found at https://ir.naturessunshine.com/corporate-governance/governance-documents. |
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| Audit Committee | | | J. Christopher Teets (Chair) Richard D. Moss Tess Roering Rong Yang Six meetings during 2023 100 % Attendance | The Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements. The Audit Committee is responsible for the engagement and oversight of our independent registered public accounting firm and reviews the adequacy and effectiveness of our internal control system and procedures. Our Board of Directors has determined that all members of our Audit Committee are independent directors and audit committee financial experts. Under its Charter, all members of the Audit Committee are required to meet the independence and experience requirements of the NASDAQ Stock Market, the Exchange Act, and the rules and regulations of the SEC, as affirmatively determined by the Company’s Board. |
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| 12 | 2024 Proxy Statement | |
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| Summary | Governance | Directors | Officers | Compensation | Proposals | Other |
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| Compensation Committee | | | Robert D. Straus (Chair) Richard D. Moss Tess Roering Five meetings during 2023 100 % Attendance | The Compensation Committee reviews compensation policies applicable to executive officers, certain key employees, and Board members. It evaluates and approves the compensation to be paid to executive officers and certain key employees (other than the Chief Executive Officer) and makes recommendations to the Board regarding the compensation to be paid to our Chief Executive Officer and all Board members. The Compensation Committee administers or makes recommendations to the Board with respect to the Company’s equity-based and other incentive compensation plans. The Compensation Committee is authorized to engage independent compensation consultants and other professionals to assist in the design, formulation, analysis and implementation of compensation programs for the Company’s executive officers and other key employees. The Compensation Committee has from time to time retained the services of Fredric W. Cook & Co., Inc. ("F.W. Cook"), a leading compensation consulting firm, to provide advice and recommendations regarding the Company’s compensation programs, including equity compensation practices and cash compensation structure for executive officers. Under its Charter, all members of the Compensation Committee are required to meet the independence requirements of the NASDAQ Stock Market, the Exchange Act, and the rules and regulations of the SEC, as affirmatively determined by the Company’s Board. | | Governance Committee | | | Heidi Wissmiller (Chair) Curtis Kopf Robert D. Straus J. Christopher Teets Five meetings during 2023 100 % Attendance | The Governance Committee makes recommendations to the Board of Directors about the size and composition of the Board or any of its committees; evaluates nominations received from shareholders; and develops and recommends to the Board corporate governance principles applicable to our Company. The Governance Committee also provides, on behalf of the Board, oversight of the Company’s environmental, social, and governmental initiatives. Under its Charter, all members of the Governance Committee are required to meet the independence requirements of the NASDAQ Stock Market, and applicable laws, as affirmatively determined by the Company’s Board. |
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| | Nature's Sunshine Products, Inc. | 13 |
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| Risk Management Committee | | | Curtis Kopf (Chair) Heidi Wissmiller Rong Yang Four meetings during 2022 100 % Attendance | The Risk Management Committee assists our Board of Directors in fulfilling its oversight responsibilities by overseeing our enterprise risk management program. The Risk Management Committee oversees and reviews the identification and assessment of material risks that we face based on the internal and external environment and oversees and reviews our risks related to legal and regulatory requirements, including, but not limited to, distributor compliance and direct selling best practices; employee compliance, such as code of conduct and other mandated trainings (including Foreign Corrupt Practices Act "FCPA" trainings); product and product distribution regulatory compliance, including adherence to FTC, FDA and other similar regulatory bodies’ mandates; FCPA compliance and best practices; data protection and privacy, cybersecurity, and IT governance compliance and best practices; and foreign operations compliance. Under its Charter, the Risk Management Committee is required to consist of at least three directors, one of whom shall be a member of the Company’s Audit Committee. Each member of the Risk Management Committee is required to meet the independence requirements of the NASDAQ Stock Market, the Exchange Act, and the rules and regulations of the SEC, as affirmatively determined by the Company’s Board. |
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| 14 | 2024 Proxy Statement | |
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| Summary | Governance | Directors | Officers | Compensation | Proposals | Other |
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| Board Risk Oversight | | BOARD'S ROLE IN THE OVERSIGHT OF RISK MANAGEMENT | | The Board of Directors is primarily responsible for assessing risks associated with our business. However, the Board delegates certain of such responsibilities to other groups. Specifically, the committees of the Board oversee and review various aspects of our risk management as outlined below. |
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| Audit | Compensation | | •Review our policies and procedures related to financial and accounting systems. •Review our investment strategies. •Review compliance with SEC mandates. •Oversees our internal audit team to evaluate and improve risk management. | •Reviews our compensation program for executives and key employees •Helps ensure compensation program does not encourage excessive risk taking by our executives or key employees. | | Governance | Risk Management | | •Monitors effectiveness of corporate governance guidelines. •Manages risk associated with independence of Board members and potential conflicts of interest. | •Oversees and reviews internal and external risks related to legal and regulatory requirements. •Monitors our distributor compliance and direct selling practices. •Reviews employee compliance with our code of conduct and mandatory trainings. •Oversees our adherence to FTC or FDA mandates. •Reviews FCPA compliance. •Oversees our Cybersecurity Committee and reviews compliance with data protection and privacy practices. |
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| Our management team and designated employees offer support in risk management through various ways, including the following: | | •Internal audit review of the effectiveness of risk management policies, practices and controls. •Our legal department assists the Board in compliance with corporate compliance activities including mandatory Code of Conduct, FCPA, and other trainings. •The Cybersecurity Committee is comprised of employees from IT, finance, legal, and human resources and reports its activities to the Risk Management Committee. This committee is tasked with reviewing data protection policies and coordinating response to any date security incident. |
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| | Nature's Sunshine Products, Inc. | 15 |
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| In the first quarter of each year, our Board of Directors and management team participate in an enterprise risk management survey to help identify collective areas of focus and oversight. This exercise aids the Risk Management Committee and Board of Directors in maintaining an up-to-date risk management program that adapts to changes in our business or the marketplace. The table below identifies select areas of focus in 2023. | | | Select Areas of Oversight | | | Cybersecurity and Technology | Analyzing the Company’s ability to incorporate digital technology, adjust to changing technologies or missed competitive advantages through the strategic use of technology. | | Insurance | Review of the Company’s overall insurance coverages and assessing whether adjustments are required based on the Company’s overall business strategy. | | Global Supply Chain | Evaluation of the Company’s ability to maintain a well-stocked pipeline of product that can be quickly delivered to customers. | | Compliance and Business Conduct | Assess the Company’s compliance with applicable global laws and regulations relating to the Company’s business model and products. |
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| CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS | | The Board’s Audit Committee is responsible for review, approval, or ratification of “related-party transactions” as defined under applicable SEC rules that involve the Company or its subsidiaries. We have adopted written policies and procedures that apply to any transaction or series of transactions in which the Company or a subsidiary is a participant, the amount involved exceeds the lesser of (i) $120,000, or (ii) 1% of the average of the Company's total assets at year-end for the last two completed fiscal years (the "Threshold"), and a related party has a direct or indirect material interest. If the Audit Committee determines a related party has a material interest in a transaction, the Audit Committee may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. Since the beginning of fiscal 2022, there have been no transactions, and there currently are no proposed transactions, in excess of the Threshold, between the Company (or one of our subsidiaries) and a related person in which the related person had or will have a direct or indirect material interest. | | COMMUNICATIONS WITH DIRECTORS We do not have a formal process for shareholder communications with the Board of Directors. Nevertheless, the Directors endeavor to ensure that the views of shareholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to shareholders in a timely manner. Communications to the Board of Directors may be submitted in writing to our Corporate Secretary at our principal executive offices at 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043. The Board of Directors relies upon the Corporate Secretary to forward written questions or comments to named directors or committees thereof, as appropriate. General comments or inquiries from shareholders are forwarded to the appropriate individual within the Company, including the Chief Executive Officer, as appropriate. |
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| 16 | 2024 Proxy Statement | |
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| CORPORATE GOVERNANCE GUIDELINES Our Board of Directors adopted Corporate Governance Guidelines, which are available on our website https://ir.naturessunshine.com/corporate-governance/governance-documents. Among other things, our Corporate Governance Guidelines set forth guidelines relating to board independence, service on other boards, director qualification standards and additional selection criteria, periodic self-evaluation, and stock ownership guidelines. | | The Corporate Governance Guidelines provide that the Governance Committee oversees periodic evaluations of the Board of Directors and its Committees. Such evaluations are conducted annually and focus on, among things, whether the Board of Directors has the appropriate skills and experience, whether the Board of Directors is appropriately structured and diversified, and whether the Board of Directors is effectively communicating. Generally, such evaluations are conducted as self-evaluations but from time to time the Governance Committee may engage a third party to conduct evaluations. The stock ownership guidelines provide that Directors are to hold shares of the Company’s stock with a minimum value of three times the grant date value of the annual equity grant to Directors. For example, the last equity grant, which was made in May of 2023, had a grant date value of $100,000, thereby requiring Directors to hold shares with a minimum value of $300,000. Directors have four years to be in compliance with the stock ownership guidelines and a period of twelve months to reestablish compliance with the guidelines if they fall below the minimum ownership level. Due to a recent increase in Director grant values, and a drop in stock price, some directors have fallen out of compliance with the guidelines. Given time, we anticipate that all directors will be in compliance. | | CODE OF ETHICS Our Code of Conduct (the "Code") applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer and senior financial and accounting officers. A copy of the Code is available on our website at https://ir.naturessunshine.com/corporate-governance/governance-documents. A physical copy may be requested by writing to our Corporate Secretary at our principal executive offices at 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043. We intend to post on our internet website all amendments to, or waivers from, the Code that are required to be disclosed by applicable law. | | |
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| | Nature's Sunshine Products, Inc. | 17 |
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| Summary | Governance | Directors | Officers | Compensation | Proposals | Other |
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| Board Composition and Refreshment | | Our Board is comprised of highly experienced and talented individuals. Our Governance Committee makes recommendations to the Board about the size and composition of the Board or any of its committees, evaluates nominations received from shareholders, and develops and recommends to the Board corporate governance principles applicable to our Company. The Board and the Governance Committee consider the qualifications of Directors and director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs. The Board monitors the mix of specific experience, qualifications, and skills of its directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure. In selecting or recommending candidates, the Governance Committee takes into consideration the criteria set forth in our Company's Corporate Governance Guidelines adopted by the Board and such other factors as it deems appropriate. These factors include: •the candidate’s experience in corporate management, such as serving as an officer or former officer of a publicly held company; •the candidate’s experience as a board member of another publicly held company; •the candidate’s professional and academic experience relevant to the Company’s industry; •the strength of the candidate’s leadership skills; •the candidate’s experience in finance and accounting and/or executive compensation practices; and •whether the candidate has the time required for preparation, participation and attendance at Board meetings and committee meetings, if applicable. The Governance Committee may also consider director candidates proposed by management and by shareholders of the Company. Recommendations for consideration by the Governance Committee, including recommendations from shareholders of the Company, should be sent in writing, together with appropriate biographical information concerning each proposed nominee, to our Corporate Secretary at our principal executive offices at 2901 West Bluegrass Blvd., Suite 100, Lehi, Utah 84043. The Governance Committee will consider a properly submitted shareholder nomination that meets the requirements under our Bylaws. Our Bylaws require, among other things, an advance written notice of the nomination in writing of not later than the ninetieth (90th), nor earlier than the one-hundred-twentieth (120th) day, from the date of the first anniversary of the annual meeting. This notice must also include certain information relating to the nominee and the nominating shareholders as described more fully in our Bylaws. The Governance Committee did not receive any director nominations from shareholders of the Company for the 2024 Annual Meeting. | | REFRESHMENT Our Board of Directors believes that its policy of periodic, rigorous self-evaluations is currently the best way to ensure it is appropriately structured to fit the demands of the Company’s business. In addition, Directors who will reach either the age of 70 or 10 years of service on the Board of Directors prior to the next annual meeting of Shareholders, shall not be nominated for election to the Board of Directors at the next annual meeting, unless the Board of Directors grants a waiver prior to nomination for another term. The average tenure of our Directors is about four years and nine months and the average age of our Directors is approximately 56 years old. |
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| | Nature's Sunshine Products, Inc. | 19 |
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| Nominees for Election The Board of Directors and Governance Committee are committed to building and maintaining a Board comprised of capable individuals who collectively provide the experience, ability and expertise to drive shareholder value while reflecting our values of quality, integrity, service, community, and innovation. We strive to have a mixture of experience and tenure in order to ensure continuity of institutional knowledge while welcoming fresh perspectives. The following demographic information illustrates the diversity of our director nominees. |
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| Board Diversity Matrix - as of March 15, 2024 | | | | | | Total Number of Directors | 8 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 2 | 6 | — | — | | Part II: Demographic Background | | | | | | African American or Black | — | 1 | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | 1 | — | — | | Hispanic or Latinx | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 2 | 4 | — | — | | Two or More Races or Ethnicities | — | — | — | — | | LGBTQ+ | — | | | | | Did Not Disclose Demographic Background | — | | | | | | | | | |
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| 20 | 2024 Proxy Statement | |
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| Summary | Governance | Directors | Officers | Compensation | Proposals | Other |
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| | Curtis Kopf Director since 2022 | Committees: Governance Risk Management (Chair) | | Mr. Kopf, 58, has served on the Board since January 2022, and currently serves as Chair of the Risk Management Committee and on the Governance Committee. Mr. Kopf is currently Group Vice President, Customer Experience at Insulet, a $2B global med-tech company. Mr. Kopf held the position of Chief Experience Officer at REI February 2021 - November 2023. Mr. Kopf joined REI in 2018 as its Chief Digital Officer. Prior to his senior leadership roles at REI, Mr. Kopf served as Senior Vice President, Customer and Digital Experience at Premera Blue Cross from June 2015 to September 2018. Mr. Kopf also held various positions at Alaska Airlines, Microsoft and Amazon. Mr. Kopf earned a Bachelor’s degree in English from Brown University and a Master’s degree in Writing from Johns Hopkins University. | | | | The Governance Committee nominated Mr. Kopf to the Board because of its belief that he brings significant consumer and digital experience to the Board, which supplements the Board’s skills in these key areas. | | |
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| | Terrence O. Moorehead Director, President and Chief Executive Officer Director since 2018 | | Mr. Moorehead, 61, was appointed as the Company’s President, Chief Executive Officer effective October 1, 2018. Mr. Moorehead brings more than 25 years of experience in the retail consumer products industry. He previously served as Chief Executive Officer of Carlisle Etcetera LLC, from 2015 through 2018. From 2013 through 2015, he served as Chief Executive Officer of Dana Beauty, Inc. From 1991 to 2013 he served in various capacities at Avon Products, Inc., including, among other positions, as VP, Strategy and Digital, for North America, President and Chairman of Avon Japan, and President of Avon Canada. Mr. Moorehead currently serves on the Board of Directors of Xenia Hotels & Resorts, Inc., a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts. Mr. Moorehead received his Master's of Business Administration in Marketing and Finance from Columbia University and a Bachelor of Arts in Economics and Marketing from Boston College. | | | The Governance Committee nominated Mr. Moorehead to the Board because of its belief that he brings significant experience in direct-to-consumer, business transformation, and extensive leadership management skills in global consumer-oriented businesses, which strengthens the Board in key areas. | |
director_bios
| | Nature's Sunshine Products, Inc. | 21 |
director_bios
| | Richard D. Moss Chairman of the Board Director since 2018 | Committees: Audit Compensation | | Mr. Moss, 66, has served on the Board since May 2018, and as Chairman of the Board since 2022. He currently serves on the Audit and Compensation Committees. Mr. Moss served as Chief Financial Officer of Hanesbrands Inc., a leading Fortune 500 apparel company, from October 2011 until October 2017, after which he served in an advisory role at Hanesbrands until his retirement on December 31, 2017. Prior to his appointment as Chief Financial Officer, Mr. Moss led several key financial functions, including treasury and tax, at Hanesbrands from 2006 to 2011. From 2002 to 2005, Mr. Moss served as Vice President and Chief Financial Officer of Chattem Inc., a leading marketer and manufacturer of branded over- the-counter health-care products, toiletries and dietary supplements. Mr. Moss currently serves on the Board of Directors of Winnebago Industries, Inc., a leading U.S. recreational vehicle manufacturer and on the Board of Directors of Hydrofarm Holdings Group, Inc., a leading independent distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture. Mr. Moss received a B.A. and an M.B.A from Brigham Young University. | | | | The Governance Committee nominated Mr. Moss to the Board because of its belief that he brings significant financial and corporate governance experience to the Board, including experience with public, consumer-oriented companies, which supplements the Board’s skills in these key areas. | | |
director_bios
| | Tess Roering Director since 2022 | Committees: Audit Compensation | | Ms. Roering, 55, has served on the Board since January 2022, and currently serves on the Audit and Compensation Committees. Ms. Roering held various leadership positions at CorePower Yoga, including as Chief Commercial Officer from 2019 to 2020 and Chief Marketing Officer from 2014 to 2018. Prior to joining CorePower Yoga, Ms. Roering led marketing at Athleta and held director and vice president level marketing positions at companies including Gap, Old Navy. Visa International, Hotwire.com, and Gillette. Ms. Roering currently serves on the boards of directors of three private companies: Elase, a pioneering medical spa platform, Rhone, an athletic and lifestyle apparel brand, and, I and love and you, a premium, natural pet food company. Ms. Roering earned a Bachelor’s degree in psychology from Stanford University and an MBA from the Fuqua School of Business at Duke University. | | | | The Governance Committee nominated Ms. Roering to the Board because of its belief that she brings significant consumer and marketing experience to the Board, which supplements the Board’s skills in these key areas. | | |
director_bios
| 22 | 2024 Proxy Statement | |
director_bios
| Summary | Governance | Directors | Officers | Compensation | Proposals | Other |
director_bios
| | Robert D. Straus Director since 2017 | Committees: Compensation (Chair) Governance | | Mr. Straus, 53, has served on the Board since June 2017, and currently serves on the Governance Committee and as Chair of the Compensation Committee. Mr. Straus is a Portfolio Manager at Wynnefield Capital Management, LLC, an investment management firm, since April 2015. Prior to joining Wynnefield Capital, Mr. Straus served as Managing Director or Senior Analyst at several investment banks over nearly 20 years. Mr. Straus served as a director of S&W Seed Company (NASDAQ: SANW) from January 2018 to October 2022, a global agriculture company with its primary activities in alfalfa seed, hybrid sorghum and sunflower germplasm and stevia. Mr. Straus is a member of the Board of Advisors for the Appalachian Mountain Club (AMC), the oldest outdoor group in the U.S. created in 1876, since December 2021. Mr. Straus is a member of the Board of Directors of one private company, MK Acquisition LLC - an authentic mountain lifestyle apparel brand founded in Jackson Hole, Wyoming - since May 2015; he also served on the Board of Directors of Hollender Sustainable Brands LLC - a female sexual wellness consumer brand with its headquarters in Burlington, VT and an office in New York, NY and B Lane, Inc. dba Fashion to Figure - a women’s apparel plus-size omnichannel retailer based in New York, NY. Mr. Straus received his B.S.B.A. from the University of Hartford and M.B.A. from Bentley College. | | | | The Governance Committee nominated Mr. Straus to the Board because of his extensive experience assessing capital allocation programs, evaluating business strategy and conducting in-depth due diligence, which the Governance Committee believes strengthens the Board's collective qualifications, skills and experience. | | |
director_bios
| | J. Christopher Teets Director since 2015 | Committees: Audit (Chair) Governance | | Mr. Teets, 51, has served on the Board since December 2015. Mr. Teets currently serves as Chair of the Audit Committee and also serves on the Governance Committee. Mr. Teets has served as a Partner of Red Mountain Capital Partners LLC, an investment management firm, since February 2005. Since 2021, Mr. Teets has also served as a founding partner of Red Mountain Capital Advisors LLC, a merchant bank serving middle market public and private companies. Before joining Red Mountain Capital, Mr. Teets was an investment banker at Goldman, Sachs & Co. Prior to joining Goldman Sachs & Co. in 2000, Mr. Teets worked in the investment banking division of Citigroup. Mr. Teets currently serves on the boards of directors of Marlin Business Services Corp., Air Transport Services Group, Inc. and he previously served on the Boards of Directors of Affirmative Insurance Holdings, Inc., Yuma Energy, Inc, and Encore Capital Group, Inc. Mr. Teets holds a bachelor’s degree from Occidental College and a M.Sc. degree from the London School of Economics. | | | | The Governance Committee nominated Mr. Teets to the Board because of his extensive investment banking and board experience, which the Governance Committee believes strengthens the Board's collective qualifications, skills and experience. | | |
director_bios
| | Nature's Sunshine Products, Inc. | 23 |
director_bios
| | Heidi Wissmiller Director since 2020 | Committees: Governance (Chair) Risk Management | | Ms. Wissmiller, 59, has served on the Board since July 2020, and serves as Chair of the Governance Committee and on the Risk Management Committee. Ms. Wissmiller served in multiple C-suite positions for Rodan + Fields from 2014 to April 2019, including Chief Growth Officer and Chief Operating Officer of Global Field Sales and Operations. Prior to Rodan + Fields, Ms. Wissmiller was the CEO for Micro Analytical Systems. She previously served in various senior leadership roles with globally recognized companies, including PepsiCo, E & J Gallo Winery and Nabisco. Ms. Wissmiller holds a Bachelor's degree from the University of Portland, a Finance for Executives Certificate from the University of Chicago, and a Board Readiness Certificate from the Yale University School of Management. | | | | The Governance Committee nominated Ms. Wissmiller to the Board because of her extensive experience in the consumer products industry which the Governance Committee believes strengthens the Board's collective qualifications, skills and experience. | | |
director_bios
| | Rong Yang Director since 2022 | Committees: Audit Risk Management | | Mr. Yang, 45, was appointed to the Board in June 2022, and serves on the Audit and Risk Management Committees. Mr. Yang currently serves as CEO of Fosun Pharma USA Inc. and Chief Representative of the Fosun Group in the United States, a position he has held since January 2022. Prior to joining Fosun, Mr. Yang held various senior positions with Bayer US LLC for nearly 20 years, including Vice President, Head of Specialty Sales with Bayer US; Vice President of Business Insight US; and Vice President of Finance and Strategy Americas. Mr. Yang holds a Bachelor’s degree from Beijing Foreign Studies University, a Master of Economics from Nankai University, and a Masters of Business Administration from Harvard University. | | | | The Governance Committee nominated Mr. Yang to the Board because of its belief that he brings significant experience to the Board, including experience with international companies, which supplements the Board’s skills in key areas. | | |
director_bios
| 24 | 2024 Proxy Statement | |
director_bios
| Summary | Governance | Directors | Officers | Compensation | Proposals | Other |
director_bios
| | | | | No family relationship exists among any of our Director nominees or executive officers. To our knowledge, there are no pending material legal proceedings in which any of our Directors or nominees for Director, or any of their associates, is a party adverse to us or any of our affiliates, or has a material interest adverse to us or any of our affiliates. To our knowledge, there have been no events under any bankruptcy act, no criminal proceedings and no judgments, sanctions, or injunctions that are material to the evaluation of the ability or integrity of any of our Directors or nominees for Director during the past 10 years. |
director_bios
| | Nature's Sunshine Products, Inc. | 25 |
director_comp
| Director Compensation | | | | | | CASH COMPENSATION Each non-employee Director receives an annual retainer of $55,000. The Chairman receives an additional retainer of $40,000. In addition to the annual retainer, committee chairs and members receive additional retainers as noted in the below table. All annual retainers are pro-rated for any partial year of service. | | | | | | | Audit | Compensation | Governance | Risk Management | | Committee Chair | $20,000 | $15,000 | $10,000 | $10,000 | | Committee Member | $10,000 | $7,500 | $5,000 | $5,000 | | EQUITY COMPENSATION Each non-employee Director receives an annual grant of a restricted stock unit ("RSU") award with a grant date value equal to $100,000 (based on the closing selling price of our common stock on the grant date). Such awards generally vest in 12 equal successive monthly installments, over a one-year period measured from the grant date until the Company's next annual shareholder meeting, subject to continued Board service, and accelerated in full upon a change in control. PRODUCT CREDIT Non-employee Directors are provided with $750 of credit to purchase Company products each calendar year. EXPENSES Non-employee Directors are reimbursed for travel and other expenses incurred in connection with their duties as directors to the extent such expenses are submitted to the Company for reimbursement. STOCK OWNERSHIP GUIDELINES Each non-employee Director is subject to stock ownership guidelines. Under these guidelines, each non-employee Director is required to maintain ownership of capital stock or an equity position in the Company of at least three times the value of the annual equity grant. Directors may obtain or hold capital stock or an equity position above what is stated in the guidelines. Compliance may be met by accumulating such equity through vested shares of RSUs; shares owned either directly or beneficially by the Director; and shares held in trust for the benefit of the Director, or his or her immediate family member. Directors have four years to be in compliance with the stock ownership guidelines and a period of twelve months to reestablish compliance with the guidelines if they fall below the minimum ownership level. Due to a recent increase in Director grant values, and a drop in stock price, some directors have fallen out of compliance with the guidelines. Given time, we anticipate that all directors will be in compliance. | | | | |
director_comp
| Director Compensation - 2023 The following table sets forth certain information regarding the compensation of each individual who served as a non-employee Director during 2023. Mr. Moorehead, who is our only employee on our Board of Directors, received no additional compensation for his service on our Board of Directors. | | | | | | Name | Fees Earned or Paid in Cash | Stock Awards (1) | All other Compensation (2) | Total | | Curtis Kopf | $68,750 | $100,000 | $750 | $169,500 | | Richard D. Moss | $112,500 | $100,000 | $750 | $213,250 | | Tess Roering | $72,500 | $100,000 | $750 | $173,250 | | Mary Beth Springer (3) | $25,833 | $— | $750 | $26,583 | | Robert D. Straus | $79,500 | $100,000 | $750 | $180,250 | | J. Christopher Teets | $84,500 | $100,000 | $750 | $185,250 | | Heidi Wissmiller | $70,000 | $100,000 | $750 | $170,750 | | Rong Yang (4) | $70,000 | $100,000 | $750 | $170,750 |
outstanding_equity
| Director Equity Ownership The following table displays the outstanding equity awards for our sitting Directors, other than Mr. Moorehead as of December 31, 2023. | | | | Name | Outstanding Stock Awards | Outstanding Option Awards | | Curtis Kopf | 16,691 | — | | Richard D. Moss | 18,724 | 25,000 | | Tess Roering | 16,691 | — | | Robert D. Straus | 18,724 | 25,000 | | J. Christopher Teets | 18,724 | 25,000 | | Heidi Wissmiller | 18,724 | — | | Rong Yang | 17,013 | — | | | | |
sct
| Summary Compensation Table | | | | | | | | | | The following table and footnotes show information regarding the total compensation of each NEO for 2023, 2022, and 2021. | | | | | | | | | | Name and Principal Position | Year | Salary (1) ($) | Bonus ($) | Stock Awards (2) ($) | Option Awards ($) | Non-Equity Incentive Plan (3) ($) | All Other Compensation (4) ($) | Total ($) | | Terrence Moorehead President and Chief Executive Officer | 2023 | 800,000 | — | 1,400,002 | — | 1,279,200 | 42,677 | 3,521,879 | | | 2022 | 723,559 | — | 2,023,328 | — | — | 38,560 | 2,785,447 | | | 2021 | 689,585 | — | 1,826,446 | — | 1,008,972 | 38,560 | 3,563,563 | | Shane Jones Executive Vice President, Chief Financial Officer | 2023 | 430,000 | 150,000 | 515,993 | — | 412,542 | 14,536 | 1,523,071 | | | 2022 | — | — | 550,004 | — | — | — | 550,004 | | | 2021 | — | — | — | — | — | — | — | | Martin Gonzalez Executive Vice President, Global Supply Chain | 2023 | 375,000 | — | 374,998 | — | 299,813 | 15,912 | 1,065,723 | | | 2022 | 230,769 | 187,443 | 1,047,112 | — | 118,151 | 10,016 | 1,593,491 | | | 2021 | — | — | — | — | — | — | — |
outstanding_equity
| Outstanding Equity Awards at Year-end | | The following table provides certain summary information concerning outstanding equity awards held by the NEOs as of December 31, 2023. |
pvp
| Pay Versus Performance Disclosure | | The following table sets forth information regarding the Company’s performance and the compensation actually paid to our NEOs, as calculated in accordance with SEC disclosure rules. |
pvp
| Year (1) | Summary Compensation Table Total for CEO (2) | Compensation Actually Paid to CEO (3) | Average Summary Compensation Table Total for non-CEO NEOs (2) | Average Compensation Actually Paid to non-CEO NEOs (3) | Value of Initial Fixed $100 Investment Based On: (4) Total Shareholder Return | Net Income ($ Thousands) | | 2023 | 3,521,879 | 6,671,980 | 1,295,532 | 2,280,896 | $122.12 | 16,416 | | 2022 | 2,785,447 | 94,372 | 1,066,551 | 369,933 | $98.35 | 550 | | 2021 | 3,563,563 | 4,762,817 | 1,049,003 | 1,218,975 | $218.68 | 30,207 |
pvp
| Adjustments to Calculate Compensation Actually Paid to CEO and Average Compensation Actually Paid to Other NEOs | | | | | | | | | 2023 | | 2022 | | 2021 | | | Adjustments | PEO | NEOs (1) | PEO | NEOs (1) | PEO | NEOs (1) | | Summary Compensation Table Total | 3,521,879 | 1,295,532 | 2,785,447 | 1,066,551 | 3,563,563 | 1,049,003 | | Adjustments for stock awards and option awards | | | | | | | | (Deduct): Aggregate value for stock awards and option awards included in Summary Compensation Table Total for the covered fiscal year | (1,400,002) | (445,496) | (2,023,328) | (774,188) | (1,826,446) | (379,676) | | Add: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end | 2,253,821 | 717,189 | 1,394,221 | 311,168 | 1,810,616 | 364,843 | | Add (Deduct): Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end | 2,118,079 | 573,649 | (1,917,235) | — | 445,890 | 108,900 |
pvp
| Adjustments to Calculate Compensation Actually Paid to CEO and Average Compensation Actually Paid to Other NEOs | | | | | | | | | 2023 | | 2022 | | 2021 | | | Adjustments | PEO | NEOs (1) | PEO | NEOs (1) | PEO | NEOs (1) | | Add: Vesting date fair value of awards granted and vested during the covered fiscal year | — | — | — | — | — | — | | Add (Deduct): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year | 178,203 | 140,022 | (132,123) | (7,015) | 1,100,042 | 295,152 | | (Deduct): Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year | — | — | (12,610) | (226,583) | (330,848) | (219,247) | | Add: Dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the Summary Compensation Table Total for the covered fiscal year | — | — | — | — | — | — | | Compensation Actually Paid (as calculated) | 6,671,980 | 2,280,896 | 94,372 | 369,933 | 4,762,817 | 1,218,975 |
pvp
| 1) | Amounts presented are averages for the entire group of Other NEOs in each respective year. | | Pay versus Performance Narrative | | | The following information is provided as a description of the relationship between the information presented in the Pay versus Performance Table above regarding compensation actually paid and each of the results in Total Shareholder Return (TSR) and Net Income. We do not utilize TSR or Net Income in our executive compensation program. However, we do utilize other corporate performance and financial measures to align executive compensation with our short and long term performance and our shareholder interests. Our compensation program supports a pay-for-performance philosophy, aligns with shareholder value creation, and maintains a level of compensation that allows us to attract and retain the best available executive team. As described in the Narrative Discussion of Compensation Policies section above, part of our executive compensation program focuses an annual corporate goals and objectives in addition to equity awards that incentivize long term value creation. | | | The most common and important measures we used to link executive compensation actually paid to our performance are: •Annual Corporate Revenue •Adjusted EBITDA As demonstrated in the graphs below, the amount of compensation actually paid to Mr. Moorehead and the average amount of compensation actually paid to our NEOs as a group, excluding Mr. Moorehead, is generally aligned with our profitability over the two years presented as measured based on TSR and Net Income. | |
termination
| Potential Payment upon Termination or Change in Control | | The benefits and payments that our NEOs could receive under certain hypothetical termination scenarios are described in the narrative below and quantified in the table that follows. | | VOLUNTARY TERMINATION AND TERMINATION FOR CAUSE If any of our NEOs voluntarily resigns without good reason or if an NEO's employment is terminated by the Company for cause, then no additional payments or benefits will accrue or be paid to the NEO under his or her employment agreement, other than what has been accrued and vested in the benefit plans discussed above in this Proxy Statement. A voluntary termination or involuntary termination for cause will not trigger an acceleration of the vesting of any stock options or other long-term incentive awards, and any such awards that had not already vested would be forfeited. | | TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON Under our employment agreements with our NEOs, in the event that his or her employment is terminated by the Company without “Cause” or if the NEO resigns for “Good Reason,” as those terms are defined in the employment agreements, the NEO would be entitled to the following benefits and payments: •Payment of all accrued and unpaid base salary through the date of such termination; •Monthly severance payments equal to one-twelfth of the NEO’s base salary as of the date of termination for a period equal to 12 months, except in the case of our Chief Executive Officer who would receive such severance payments for a period of 18 months; •Reimbursement for the cost the NEO incurs for continuation of his or her health insurance coverage under COBRA, and for his or her family members if he or she provided for their coverage during his or her employment, for a period of 12 months, except in the case of our Chief Executive Officer who would receive such reimbursement for a period of 18 months; and •Payment of a pro-rata bonus, based on the percentage of the year in which the NEO remained employed, for the year in which such termination occurs, which bonus shall be paid at the same time as similar bonuses are paid to the Company’s executive employees for such year. Except for Mr. Moorehead, a termination without cause will not trigger an acceleration of the vesting of any stock options or other long-term incentive awards, and any such awards that had not already vested would be forfeited. In the case of Mr. Moorehead, any unvested awards continue to vest for a period of 18 months after any termination without cause. | | TERMINATION DUE TO DEATH OR INCAPACITY If an NEO’s employment terminates due to death or incapacity, the employment agreements provide that such NEO would receive the same benefits and payments as if the employment had terminated without cause. A termination due to death or incapacity triggers an acceleration of the vesting of any stock options or other long-term incentive awards. |
termination
| POTENTIAL PAYMENTS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL The Company’s employment agreements with its NEOs provide that if an NEO's employment is terminated for any reason, except for Cause, within 18 months of a change in control event or in anticipation of a Change in Control Event or if an NEO terminates his employment within 18 months of a change in control event for Good Reason, the Company will pay a lump sum based upon a multiple, which varies for each NEO, of the NEO's (i) annual target bonus and (ii) annual base salary at the time of termination. For all NEOs, if an NEO's employment is terminated in connection with a change in control event, the Company will reimburse the cost the NEO incurs for continuation of his or her health insurance coverage under COBRA, and for his or her family members if he or she provided for their coverage, for a period of 18 months for Mr. Moorehead, and a period of 12 months for all other NEOs. The equity awards held by the NEOs at the time of a qualifying change in control event will vest in full, except for those PRSUs granted in 2022 and 2023, which only vest upon a change in control if certain conditions are met. | | The following table shows potential payments to the NEOs, upon death or incapacity, termination of employment without cause and termination of employment following a change in control of the Company. The amounts shown assume that the termination was effective December 31, 2023, and are estimates of the amounts that would be paid to the executive officers upon termination. The actual amounts to be paid can only be determined at the actual time of an officer's termination. No tax gross-ups are paid to the executive officers upon termination of employment. |