DEF 14A of YETI Holdings, Inc.
Filed Mar 26, 2024 · FY20230001670592-24-000013
WEBSITE REFERENCES
| Company Product Discount | 24 | | Non-Employee Director Stock Ownership Guidelines | 24 | | Fiscal 2023 Director Compensation Table | 25 | | EXECUTIVE COMPENSATION | 26 | | Proposal 2. Approval, on an Advisory Basis, of the Compensation Paid to Our Named Executive Officers | 26 | | Executive Officers | 27 | | Compensation Discussion and Analysis | 28 | | Executive Summary | 29 | | Compensation Philosophy and Objectives | 33 | | Compensation Determination Process | 35 | | Compensation Program Components | 37 | | Additional Compensation Policies and Practices | 45 | | Executive Stock Ownership Guidelines | 45 | | Clawback Policy | 45 | | Anti-Hedging and Anti-Pledging Policies | 45 | | Compensation Committee Report | 46 | | 2023 Summary Compensation Table | 47 | | Employment Agreements | 48 | | Fiscal 2023 Grants of Plan-Based Awards Table | 49 | | Outstanding Equity Awards at 2023 Fiscal Year-End Table | 51 | | Equity Compensation Plans | 53 | | Fiscal 2023 Option Exercises and Stock Vested Table | 53 | | Post-Termination Compensation | 54 | | Senior Leadership Severance Benefits Plan | 54 | | Potential Payments upon Termination or Change of Control | 54 | | Post-Employment Compensation Table | 56 | | CEO Pay Ratio | 57 | | Pay Versus Performance Information | 58 | | Equity Compensation Plan Information | 62 | | EQUITY PLAN | 63 | | Proposal 3. Approval of the 2024 Equity and Incentive Compensation Plan | 63 | | AUDIT MATTERS | 70 | | Independent Registered Public Accounting Firm Fees | 70 |
OUR BOARD OF DIRECTORS
OUR BOARD OF DIRECTORS
OUR BOARD OF DIRECTORS
| Name | Age | Class | Director Since | Current Term Expires | Committee Membership | | | | | | | | | Audit | Compensation | Nominating and Governance | | Elizabeth L. Axelrod | 61 | I | 2023 | 2025 | | ■ | ■ | | Alison Dean | 59 | III | 2020 | 2024 | ■ • | | ■ | | Frank D. Gibeau | 55 | I | 2020 | 2025 | ■ | ■ | | | Robert Katz | 57 | III | 2023 | 2024 | | ■ | ■ | | Mary Lou Kelley | 63 | II | 2019 | 2026 | ■ | | ● | | Dustan E. McCoy | 74 | II | 2018 | 2026 | | ● | | | Matthew J. Reintjes | 48 | I | 2016 | 2025 | | | | | Robert K. Shearer • | 72 | II | 2018 | 2026 | ●• | | |
OUR BOARD OF DIRECTORS
• Chair of the Board ● Committee Chair ■ Committee Member • Audit Committee Financial Expert
OUR BOARD OF DIRECTORS
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PROPOSAL 1. ELECTION OF CLASS III DIRECTORS
PROPOSAL 1. ELECTION OF CLASS III DIRECTORS The Board currently consists of eight qualified directors with skills aligned to our business and strategy. The table below sets forth the names of our current directors, including each of our Class III directors whose term expires at the Annual Meeting and each director of YETI who will continue to serve as a director after the Annual Meeting. Our Board has nominated each of the two current Class III directors for election at the Annual Meeting as further described under “Director Nominees” below.
PROPOSAL 1. ELECTION OF CLASS III DIRECTORS
| Name | Class | Year Term Expires | | Frank D. Gibeau | I | 2025 | | Matthew J. Reintjes | I | 2025 | | Elizabeth L. Axelrod | I | 2025 | | Mary Lou Kelley | II | 2026 | | Dustan E. McCoy | II | 2026 | | Robert K. Shearer | II | 2026 | | Alison Dean | III | 2024 | | Robert Katz | III | 2024 |
PROPOSAL 1. ELECTION OF CLASS III DIRECTORS
The classified structure of the Board was adopted in our Amended and Restated Certificate of Incorporation, effective October 25, 2018 (the “Certificate of Incorporation”). Director nominees are elected by a plurality of the votes cast by holders of the shares of our common stock entitled to vote in the election of directors at a meeting of stockholders at which a quorum is present. This means that the two Class III director nominees who receive the most affirmative votes (among votes properly cast in person or by proxy) will be elected to the Board at the Annual Meeting. Should any director nominee become unable or unwilling to serve as a director at the time of the Annual Meeting, the proxy holders may vote the proxies for the election of any substitute nominee the Board may nominate or designate, or the Board may reduce the number of directors constituting the Board. However, we are not aware of any circumstances that would prevent any of the Class III director nominees from serving. Directors are elected to serve until the expiration of their three-year term and until their successors have been elected and qualified. Unless otherwise directed, the proxy holders named in the proxy you submit intend to vote “For All” to elect each Class III director nominee to the Board.
PROPOSAL 1. ELECTION OF CLASS III DIRECTORS
| | The Board unanimously recommends that stockholders vote “FOR ALL” to elect each Class III director nominee to the Board. |
PROPOSAL 1. ELECTION OF CLASS III DIRECTORS
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BOARD SNAPSHOT
BOARD SNAPSHOT
Age Distribution Average Age: 61
Age Distribution Average Age: 61
Gender Diversity Female: 38%
Gender Diversity Female: 38%
Board Tenure Average Tenure: 3.75 Years
Board Tenure Average Tenure: 3.75 Years
DIRECTOR NOMINEES
DIRECTOR NOMINEES We are asking our stockholders to elect Alison Dean and Robert Katz to serve as Class III directors for a term of three years ending at our 2027 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified. Each Class III director nominee currently serves as a Class III director whose term expires at the Annual Meeting. Each Class III director nominee has consented to be named as a director nominee in this Proxy Statement and to serve as a Class III director if elected, and each Class III director nominee has expressed his or her intention to serve the entire term. The Board has nominated these directors following the recommendation of the Nominating and Governance Committee of the Board. The following sections provide information with respect to each nominee for election as a Class III director. It includes the specific experience, qualifications, and skills considered by the Nominating and Governance Committee and the Board in assessing the appropriateness of the person to serve as a director, as well as the start of each director’s tenure on the Board, his or her age, and such director’s committee assignments. Ages are as of March 26, 2024.
DIRECTOR NOMINEES
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CLASS III DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2027)
CLASS III DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2027)
CLASS III DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2027)
| Alison Dean | | | | CAREER HIGHLIGHTS •iRobot Corporation, a leading global consumer robot company ◦Executive Vice President, Chief Financial Officer, and Treasurer (April 2013 to May 2020) ◦Senior Vice President, Corporate Finance (February 2010 to April 2013) ◦Vice President, Finance (August 2005 to February 2010) •3Com Corporation, a digital electronics manufacturer ◦Several senior financial roles (1995 to August 2005), including vice president and corporate controller (2004 to 2005) and vice president of finance, worldwide sales (2003 to 2004) OTHER PUBLIC COMPANY BOARD SERVICE •Everbridge, Inc., a global software company that provides critical event management and enterprise safety applications (since July 2018) — current Chair of its Audit Committee •SmartRent, Inc., a provider of smart home and smart property solutions for the multifamily industry (since March 2024) – current member of its Audit Committee. EDUCATION •M.B.A., Boston University •B.A., Business Economics, Brown University KEY SKILLS AND QUALIFICATIONS Ms. Dean was selected to serve on our Board because of her: ◦extensive consumer business and corporate finance experience and knowledge ◦experience leading global retail consumer products expansion initiatives | | Director Since: October 2020 | | | Age: 59 | | | Committees: Audit; Nominating & Governance | | | Independent: Yes | |
CLASS III DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2027)
| Robert Katz | | | | CAREER HIGHLIGHTS •Vail Resorts, Inc., a mountain resort company ◦Executive Chairperson (November 2021 to present) ◦Chairperson (March 2009 to November 2021) ◦Chief Executive Officer (February 2006 to November 2021) •Apollo Management L.P., a private equity investment firm ◦Various roles (1990-2006) OTHER PUBLIC COMPANY BOARD SERVICE •Vail Resorts, Inc. (since 1996) EDUCATION •B.S., Economics, University of Pennsylvania Wharton School KEY SKILLS AND QUALIFICATIONS Mr. Katz was selected to serve on our Board because of his: ◦senior leadership experience at an outdoor sports and recreation company ◦deep knowledge of corporate strategy, development and global branding | | Director Since: December 2023 | | | Age: 57 | | | Committees: Compensation; Nominating & Governance | | | Independent: Yes | |
CLASS III DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2027)
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DIRECTORS CONTINUING IN OFFICE
DIRECTORS CONTINUING IN OFFICE The following section provides information with respect to each director of YETI who will continue to serve as a director after the Annual Meeting. It includes the specific experience, qualifications, and skills considered by the Nominating and Governance Committee and the Board in assessing the appropriateness of the person to serve as a director, as well as the start of each director’s tenure on the Board, his or her age, and such director’s committee assignments. Ages are as of March 26, 2024.
CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
| Elizabeth L. Axelrod | | | | CAREER HIGHLIGHTS •Airbnb, Inc., a vacation rental online marketplace company ◦Global Head of Employee Experience (2017 to 2021) •eBay Inc., an e-commerce company ◦Senior Vice President, Human Resources (2005-2015) OTHER PUBLIC COMPANY BOARD SERVICE •Heidrick & Struggles International, Inc., an international executive search, management and leadership consulting firm (since 2016) — current Chair of its Human Resources and Compensation Committee and member of its Nominating and Board Governance Committee EDUCATION •M.P.P.M., Yale University •B.S., Economics, University of Pennsylvania Wharton School KEY SKILLS AND QUALIFICATIONS Ms. Axelrod was selected to serve on our Board because of her: ◦extensive human resources and talent management experience ◦deep understanding of global businesses and e-commerce | | Director Since: December 2023 | | | Age: 61 | | | Committees: Compensation; Nominating & Governance | | | Independent: Yes | |
CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
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CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
| Frank D. Gibeau | | | | KEY SKILLS AND QUALIFICATIONS •Take Two Interactive Software, Inc., a leading developer of interactive entertainment ◦President, Zynga Label (July 2022 to present) •Zynga Inc., a leading provider of social game services ◦Chief Executive Officer (March 2016 to July 2022) •Electronic Arts Inc., a global leader in digital interactive entertainment ◦Executive Vice President of EA Mobile (September 2013 to May 2015) ◦President of EA Labels (August 2011 to September 2013) ◦President of EA Games Label (June 2007 to August 2011) ◦Executive Vice President, General Manager, North America Publishing (September 2005 to June 2007) ◦Senior Vice President of North American Marketing (2002 to September 2005) OTHER PUBLIC COMPANY BOARD SERVICE •Zynga (August 2015 to July 2022) EDUCATION •M.B.A., Santa Clara University •B.S., Business Administration, University of Southern California KEY SKILLS AND QUALIFICATIONS Mr. Gibeau was selected to serve on our Board because of his: •extensive leadership experience in a public company •extensive public accounting, finance, and internal control experience •deep knowledge of corporate strategy, product development and brand building | | Director Since: February 2020 | | | Age: 55 | | | Committees: Audit; Compensation | | | Independent: Yes | |
CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
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CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
| Matthew J. Reintjes | | | | CAREER HIGHLIGHTS •YETI Holdings, Inc. ◦President and Chief Executive Officer (September 2015 to Present) •Vista Outdoor Inc., a manufacturer of outdoor sports and recreation products, which, prior to February 9, 2015, was operated as a reporting segment of Alliant Techsystems Inc. ◦Vice President of Outdoor Products (February 2015 to September 2015) •Alliant Techsystems Inc., an aerospace, defense, and sporting goods company ◦Vice President of Accessories (November 2013 to February 2015) •Bushnell Holdings Inc., a portfolio of leading brands in outdoor and recreation products ◦Chief Operating Officer (May 2013 to November 2013) •Hi-Tech Industrial Services, Inc., a supplier of industrial services ◦Chief Operating Officer (January 2013 to May 2013) •Danaher Corporation, a global science and technology company ◦President of KaVo Equipment Group-North America (October 2011 to January 2013) ◦President-Imaging (April 2011 to October 2011) ◦Roles including Vice President/General Manager, Vice President of Sales, and Senior Product Manager (2004 to October 2011) EDUCATION •M.B.A., University of Virginia’s Darden School of Business •B.A., Economics, University of Notre Dame KEY SKILLS AND QUALIFICATIONS Mr. Reintjes was selected to serve on our Board because of his: •perspective and experience as our President and CEO •extensive experience in corporate strategy, brand leadership, new product development, general management processes •operations leadership with companies in the outdoor sports and recreation products industries | | Director Since: March 2016 | | | Age: 48 | |
CLASS I DIRECTORS (FOR TERMS EXPIRING IN 2025)
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CLASS II DIRECTORS (FOR TERMS EXPIRING IN 2026)
CLASS II DIRECTORS (FOR TERMS EXPIRING IN 2026)
CLASS II DIRECTORS (FOR TERMS EXPIRING IN 2026)
| Mary Lou Kelley | | | | CAREER HIGHLIGHTS •Best Buy Co., Inc., a consumer electronics retailer ◦President, E-commerce (April 2014 to March 2017) •Chico’s FAS Inc., a retail women’s clothing chain ◦Senior Vice President, E-commerce (July 2010 to March 2014) •L.L. Bean, a retail company ◦Vice President of Retail Real Estate and Marketing (2006 to 2009) OTHER PUBLIC COMPANY BOARD SERVICE •Vera Bradley, Inc., a luggage and handbag design company (since December 2015) •Finning International, Inc., a dealer of construction machinery and equipment (since January 2018) EDUCATION •M.B.A., University of Virginia’s Darden School of Business •B.A., Economics, Boston College KEY SKILLS AND QUALIFICATIONS Ms. Kelley was selected to serve on our Board because of her: •extensive executive leadership experience •deep knowledge of consumer products, e-commerce, and omni-channel marketing •knowledge of corporate compensation and governance matters | | Director Since: February 2019 | | | Age: 63 | | | Committees: Audit; Nominating & Governance (Chair) | | | Independent: Yes | |
CLASS II DIRECTORS (FOR TERMS EXPIRING IN 2026)
| Dustan E. McCoy | | | | CAREER HIGHLIGHTS •Brunswick Corporation, a global manufacturer and marketer of recreation products ◦Chairman of the Board and Chief Executive Officer (December 2005 to February 2016) ◦President, Brunswick Boat Group (October 2000 to December 2005) ◦Vice President, General Counsel and Corporate Secretary (September 1999 to October 2000) •Witco Corporation, a specialty chemical products company ◦Executive Vice President ◦Senior Vice President, General Counsel and Secretary OTHER PUBLIC COMPANY BOARD SERVICE •Freeport-McMoRan Inc., a mining company (since 2006) — current member of its Compensation Committee and Lead Independent Director •Louisiana-Pacific Corporation, a building materials manufacturer (since 2002) — current member of its Compensation Committee and Lead Independent Director EDUCATION •J.D., Salmon P. Chase College of Law, Northern Kentucky University •B.A., Political Science, Eastern Kentucky University KEY SKILLS AND QUALIFICATIONS Mr. McCoy was selected to serve on our Board because of his: •extensive leadership experience •broad understanding of global businesses •knowledge of corporate compensation, legal, compliance, governance and disclosure matters | | Director Since: October 2018 | | | Age: 74 | | | Committees: Compensation (Chair) | | | Independent: Yes | |
CLASS II DIRECTORS (FOR TERMS EXPIRING IN 2026)
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CLASS II DIRECTORS (FOR TERMS EXPIRING IN 2026)
| Robert K. Shearer (Chair of the Board) | | | | CAREER HIGHLIGHTS •VF Corporation, a global lifestyle and apparel company ◦Senior Vice President and Chief Financial Officer (May 2005 to March 2015) ◦Vice President — Finance and Chief Financial Officer (January 2003 to May 2005) ◦Vice President and Controller (June 2000 to January 2003) ◦Various senior leadership positions, including two years as President of VF Corporation’s Outdoor Coalition, which was formed with the acquisition of The North Face brand (1986 to 2002) •Ernst & Young LLP, a multinational professional services firm ◦Senior Audit Manager OTHER PUBLIC COMPANY BOARD SERVICE •Church & Dwight Co, Inc., a household products manufacturer (since 2008) — current member of its Audit Committee •Kontoor Brands Inc., a global lifestyle apparel company (since May 2019) — current Lead Director of the Board and Chair of its Audit Committee EDUCATION •B.S., Accounting, Catawba College KEY SKILLS AND QUALIFICATIONS Mr. Shearer was selected to serve on our Board because of his: •extensive public accounting, finance, and internal control experience •experience leading global retail consumer products expansion initiatives •knowledge of corporate disclosure matters •broad understanding of global businesses •experience in investor relations and communications | | Director Since: October 2018 | | | Age: 72 | | | Committees: Audit (Chair) | | | Independent: Yes | |
NON-EMPLOYEE DIRECTOR COMPENSATION
NON-EMPLOYEE DIRECTOR COMPENSATION Our directors receive compensation in accordance with our Non-Employee Director Compensation Policy. All of our non-employee directors are currently eligible to receive compensation under this Policy. In November 2023, the Compensation Committee completed a review of director compensation and determined that, based upon research provided by FW Cook, several elements of YETI’s director compensation were below market median. As a result, the Compensation Committee recommended, and the Board approved certain increases, effective December 31, 2023. Such increases are described below.
FISCAL 2023 DIRECTOR COMPENSATION TABLE
FISCAL 2023 DIRECTOR COMPENSATION TABLE The table below sets forth information regarding all compensation awarded to, earned by, or paid to our non-employee directors during fiscal 2023.
FISCAL 2023 DIRECTOR COMPENSATION TABLE
| Name | Fees earned or paid in cash(1) ($) | Stock Awards(2) ($) | Total ($) | | Elizabeth L. Axelrod(3) | — | 45,652 | 45,652 | | Tracey D. Brown(4) | 43,870 | 120,000 | 163,870 | | Alison Dean | 90,000 | 120,000 | 210,000 | | Frank D. Gibeau | 92,500 | 120,000 | 212,500 | | Robert Katz(3) | — | 45,652 | 45,652 | | Mary Lou Kelley | 92,500 | 120,000 | 212,500 | | Dustan E. McCoy | 100,000 | 120,000 | 220,000 | | Robert K. Shearer | 180,000 | 120,000 | 300,000 |
FISCAL 2023 DIRECTOR COMPENSATION TABLE
(1)Represents retainers for Board service and for Board chair, committee chair and committee service. Ms. Kelley and Mr. Shearer elected to defer a portion of their annual cash retainer and committee cash fees, as applicable. (2)For all directors except Ms. Axelrod and Mr. Katz, represents the grant date fair value of restricted stock units (“RSUs”) granted on May 4, 2023 calculated in accordance with FASB Accounting Standards Codification Topic 718 (“Topic 718”). Ms. Kelley and Mr. Shearer elected to receive DSUs in lieu of RSUs. As of December 30, 2023, Ms. Dean held 1,342 DSUs and 2,801 RSUs, Mr. Gibeau held 6,322 DSUs and 2,801 RSUs, Ms. Kelley held 17,300 DSUs, Mr. McCoy held 3,155 DSUs and 2,801 RSUs, and Mr. Shearer held 38,588 DSUs. For Ms. Axelrod and Mr. Katz, represents the grant date fair value of RSUs granted on December 19, 2023, the effective day of their appointment, calculated in accordance with Topic 718. Ms. Axelrod elected to receive DSUs in lieu of RSUs. As of December 30, 2023, Ms. Axelrod held 864 DSUs and Mr. Katz held 864 RSUs. (3)Because Ms. Axelrod and Mr. Katz were appointed to the Board in December 2023, they did not receive their first cash payment until fiscal 2024. (4)Ms. Brown resigned from the Board effective May 4, 2023.
FISCAL 2023 DIRECTOR COMPENSATION TABLE
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Adjusted Operating Income
Adjusted Operating Income YETI’s adjusted operating income (a non-GAAP performance metric), which, in addition to adjusted net sales, is a performance metric under our annual short-term incentive plan, decreased 4% to $262.8 million, or 15.6% of adjusted net sales, for fiscal 2023, compared to $274.3 million, or 16.8% of adjusted net sales, in fiscal 2022. (See “— Short-Term Incentives — Performance Measures” for a discussion of this metric and see Appendix B for a reconciliation to the corresponding GAAP metric.)
Base Salaries
Base Salaries During the annual compensation review cycle in February 2023, the Compensation Committee maintained or increased the base salaries of our NEOs from the levels set in 2022. The Compensation Committee determined that Mr. Reintjes’ base salary was appropriately aligned with market-based compensation paid to CEOs in our peer group; therefore, his base salary was maintained at the level set in 2022. Mr. McMullen’s base salary was increased 50% in connection with his appointment as Chief Financial Officer in February 2023. Because Messrs. Ahmad and Duff joined YETI in the second half of 2022, the Compensation Committee maintained their base salaries at the levels set in 2022. The Compensation Committee increased Mr. Barksdale’s base salary by 5% to align with compensation paid to similarly situated executives in our peer group.
2023 Short-Term Incentive Plan
2023 Short-Term Incentive Plan YETI’s annual incentive program takes the form of a short-term incentive plan, which is a cash plan. The management team led a process to set the financial performance targets under the 2023 short-term incentive plan (“STIP”), as approved by the Compensation Committee and as described below. The STIP in 2023 utilized two financial performance metrics, which the Compensation Committee believes appropriately focus executive officers on the critical strategic priorities necessary to grow stockholder value:
2023 Short-Term Incentive Plan
| Adjusted Net Sales (40% Weighting) | + | Adjusted Operating Income (60% Weighting) | | •Performance threshold: 90% of target •Performance maximum: 110% of target | | •Performance threshold: 90% of target •Performance maximum: 110% of target |
2023 Short-Term Incentive Plan
For the NEOs, the STIP is based exclusively on company performance metrics, and there are no division, geographic or individual components. In addition, all of our eligible employees are participants in the same annual incentive plan. Failure to achieve the minimum level of performance results in no payout under the STIP, and payouts were capped at 200% of the target opportunity. The target opportunities under the STIP for the NEOs were denominated as a percentage of annual eligible salary as set forth below:
2023 Short-Term Incentive Plan
| NEO | 2023 Target Annual Cash Incentive Percentage | | Matthew J. Reintjes | 150% | | Michael J. McMullen | 75% | | S. Faiz Ahmad | 75% | | Bryan C. Barksdale | 60% | | Martin H. Duff | 60% |
2023 Short-Term Incentive Plan
As described above, adjusted net sales increased 3% to $1.68 billion and adjusted operating income decreased 4% to $262.8 million, which drove payouts under our STIP at 88.3% of target for our NEOs.
2023 Long-Term Incentive Plan
2023 Long-Term Incentive Plan Consistent with our continuing focus on pay-for-performance, NEOs other than our CEO received an annual equity award consisting of an equal mix of performance-based and time-based equity awards under the long-term incentive plan (“LTIP”) in fiscal 2023. Our CEO received an annual equity award consisting of 75% performance-based equity awards and 25% time-based equity awards in 2023. The Compensation Committee believes that this weighting reflects the Company’s commitment to a highly performance-oriented compensation program that incentivizes our CEO to continue driving future growth and shareholder value creation. For tax purposes related to our ability to no longer rely on a special Section 162(m) grandfathering rule for newly public companies, in 2023, the Compensation Committee decided to grant our NEOs annual equity awards in the form of restricted stock units (“RSUs”) vesting over a three-year period rather than restricted stock, as was done in prior years. Similarly, the performance-based awards granted in 2023 were structured as performance-based restricted stock units (“PBRSUs”) versus performance-based restricted stock (“PBRS”). The 2023 PBRSUs vest in the same manner as prior PBRS awards vested. The PBRSUs are eligible to cliff vest after three years based on cumulative free cash flow measured over the three-year performance period, with a relative total shareholder return (“TSR”) modifier tied to our stock price performance relative to the companies in the Russell 2000 Index. We define free cash flow as net cash provided by operating activities, less purchases of property and equipment. As discussed below, three NEOs, Messrs. Reintjes, McMullen, and Barksdale, received one-time long-term equity awards in 2023 to recognize significant contributions in 2022, to further drive focus on sustained long-term performance, and to promote retention of these valuable leaders. The awards have a strong performance orientation, with the CEO’s grant having a mix of 75% PBRSUs and 25% RSUs and Messrs. McMullen and Barksdale having mixes of 50% PBRSUs and 50% RSUs. In order to further enhance retention, holding power, and alignment with the long-term interests of our investors, Mr. Reintjes’ PBRSUs and RSUs cliff vest at the end of the three-year period and have an additional one-year holding period after vesting. The vesting for Messrs. McMullen and Barksdale align with that of the annual grants.
2023 Long-Term Incentive Plan
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Target Pay Mix
Target Pay Mix The following graphic titled “YETI CEO Target Pay Mix” shows the allocation of target total direct compensation payable to our CEO, reflecting the elements and mix of the regular, ongoing compensation program. The graphic titled “YETI Peer Target Pay Mix” reflects equivalent information for our peer group. The Compensation Committee allocated compensation among base salary, target STI, and the grant date fair value of long-term incentives in the form of a combination of performance- and time-based RSU awards. A vast majority of compensation for our CEO and other NEOs is at-risk and performance-based.
Compensation Philosophy
| Alignment with our business strategy and stockholders’ interests. YETI’s executive compensation program contains specific financial performance metrics such as adjusted net sales and adjusted operating income that are consistent with our strategic goals and are indicative of top-line and bottom-line performance. Our program also contains a significant allocation to equity incentives to promote the prioritization of our long-term operational and, in turn, stock price performance and to closely tie the interests of executive officers with those of our stockholders. |
Compensation Philosophy
| Motivate and reward achievement of our key goals. Performance-based incentives using financial metrics that tie to our short- and long-term goals are significant components of our executive compensation program. By linking performance and achievement to compensation, we seek to motivate executive officers to accomplish our key strategic objectives. We define clear and measurable quantitative objectives that are designed to strengthen this link and thus improve results and returns to our stockholders. |
Compensation Philosophy
| Provide competitive pay to attract and retain talent. We recruit executive officers with a wide diversity of experiences, expertise, capabilities, and backgrounds to lead us as we scale our business and execute our strategy. In recruiting our executives and determining competitive pay levels, we consider a number of reference points, including the compensation structure and amounts of compensation paid to the executive officers at peer group companies, as well as broader general industry surveys. The total compensation of a particular executive officer in a particular year may vary from the level implied by reference to the peer group companies or general industry surveys to reflect his or her specific experience, skills, scope of responsibilities, our specific talent needs, performance, or other internal factors. |
Compensation Program Governance
| What We Do | | | | ✓ | Pay for Performance | The majority of targeted total executive officer compensation is variable and tied to our financial results or the performance of our stock price, or both. | | ✓ | Balance Short- and Long-Term Compensation | The allocation of incentives among the STIP and the LTIP does not over-emphasize short-term performance at the expense of achieving long-term goals. | | ✓ | Stock Ownership Guidelines | Executive officers are expected to acquire and maintain a certain level of ownership interest, in order to emphasize long-term performance and to promote alignment with stockholders. | | ✓ | Mitigation of Risk | Our compensation program has provisions to mitigate undue risk, including caps on the maximum level of payouts, clawback provisions, and multiple performance metrics. | | ✓ | Clawback Policy | Our executives’ incentive compensation is subject to a clawback policy that complies with SEC and NYSE rules. | | ✓ | Double Trigger Change-in-Control Provisions | If there is a change in control, outstanding equity will vest only if there is a termination of employment following such change in control (a “double trigger”). A change in control alone will not trigger vesting. | | ✓ | Regularly Review Share Utilization | Management and the Board regularly evaluate share utilization levels by reviewing the cost and dilutive impact of stock compensation. | | ✓ | Independent Compensation Consultant | The Compensation Committee retains an independent compensation consultant on matters pertaining to executive and non-employee director pay and governance. |
Compensation Program Governance
| What We Don’t Do | | | | ✗ | No employment agreements other than with the CEO | We do not have employment agreements with our executive officers, other than the CEO. | | ✗ | No Dividends on Unearned Awards | Under our equity plan, we do not pay dividends or dividend equivalents on shares or units that a participant has not yet earned or that have not vested. | | ✗ | Hedging or Pledging of YETI Securities | We prohibit employees and non-employee directors from engaging in hedging, pledging, or short sale transactions in YETI securities. | | ✗ | No Repricing of Underwater Stock Options | Under our equity plan, we expressly prohibit repricing of stock options or exchanges of underwater stock options without stockholder approval. | | ✗ | No Excessive Perquisites | We do not provide excessive perquisites to executive officers. | | ✗ | No Excise Tax Gross-Ups | We do not provide excise tax gross-ups on change-in-control payments. | | ✗ | No Special Executive Retirement Programs | We do not have any special executive retirement programs that are specific to executive officers. |
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant Since 2018, the Compensation Committee has engaged FW Cook to serve as its independent compensation consultant. FW Cook reports directly to the Compensation Committee, and the Compensation Committee has the sole authority to retain, terminate, and obtain the advice of FW Cook at YETI’s expense to assist it in the performance of its duties and responsibilities. The Compensation Committee selected FW Cook as its consultant because of the firm’s expertise and reputation. The Compensation Committee has worked with FW Cook to: assess our executive compensation philosophy, objectives and components; develop a peer group of companies for compensation comparison purposes; review considerations and market practices related to short-term incentive plans and long-term equity and other incentive plans; collect comparative compensation levels for each of our executive officer positions; assess our executive officers’ base salaries, short-term annual incentive targets, and long-term equity compensation levels; review our equity compensation strategy, including the development of award guidelines; and review board of director compensation and design practices. While the Compensation Committee takes into consideration the review and recommendations of FW Cook when making decisions about our executive compensation program, ultimately, the Compensation Committee makes its own independent decisions about compensation matters. The Compensation Committee has assessed the independence of FW Cook pursuant to SEC and NYSE rules. In doing so, the Compensation Committee considered various factors bearing upon FW Cook’s independence, including the nature and amount of work performed for the Compensation Committee and the fees paid for those services in relation to the firm’s total revenues. FW Cook did not provide any services to us other than the services provided to the Compensation Committee as described herein and in the “Non-Employee Director Compensation” section of this Proxy Statement. Based on its consideration of the foregoing and other relevant factors, the Compensation Committee concluded that there were no conflicts of interest and that FW Cook is independent under applicable standards.
Compensation Peer Group and Peer Selection Process
Compensation Peer Group and Peer Selection Process The Compensation Committee believes that obtaining market data is important in making determinations about executive compensation. Such information provides helpful context and a solid reference point for making decisions, even though, relative to other companies, there are differences and unique aspects of YETI. When making decisions about the structure and component mix of our executive compensation program, the Compensation Committee takes into consideration the structure and components of, and the amounts paid under, the executive compensation programs of comparable peer companies, as derived from public filings and other sources. However, the Compensation Committee does not have any formal benchmarking policy and uses the peer compensation data solely as a reference point when making compensation decisions for the NEOs using its business judgment. The Compensation Committee, with the assistance of FW Cook, uses the following guiding principles when selecting peer group companies:
Compensation Peer Group and Peer Selection Process
| Business Focus | Talent Sources | Competitors for Investments | | Companies that operate in similar industries, ideally with similar cost structures and geographic footprint. | Companies that are competitors for our talent. | Companies that investors may consider alternative investment opportunities. | | Peer Group Size | Company Size | Overall Reasonableness | | The peer group should have a sufficient number of companies, generally 12 to 20, to provide meaningful results and to lessen volatility in comparative compensation values. | Companies of comparable organizational scale and complexity or of comparable market value or financial performance make for good reference points, though companies outside the parameters may be included if other factors present a compelling justification. | The peer group, in totality, is reasonable and defensible for comparison purposes. |
Compensation Peer Group and Peer Selection Process
The Compensation Committee reviews the peer group annually. FW Cook provides the Compensation Committee with peer group data, including the revenues, EBITDA, net income, assets, employees, and market capitalization of each peer company in comparison to that of YETI. The peer group used to evaluate competitive market compensation of our NEOs for fiscal 2023 consisted of the following 18 companies:
Compensation Peer Group and Peer Selection Process
| Acushnet Holdings Corp. Callaway Golf Company Canada Goose Holdings Inc. Capri Holdings Limited Columbia Sportswear Company | Crocs, Inc. Deckers Outdoor Corporation Fox Factory Holding Corp. Garmin Ltd. GoPro, Inc. | Helen of Troy Limited Johnson Outdoors Inc. Lululemon Athletica Inc. Oxford Industries, Inc. Peloton Interactive, Inc. | Skechers U.S.A., Inc. Under Armour, Inc. Vista Outdoor Inc. |
Compensation Peer Group and Peer Selection Process
The Compensation Committee, with assistance from FW Cook, conducted its annual review of the peer group in July 2023. At this time, YETI was ranked at approximately the 26th percentile for revenue and in the 53rd percentile for market capitalization among its peer group. Based on its review of the aforementioned guiding principles and additional data provided by FW Cook, the Compensation Committee decided to alter the peer group it is using for performing market checks on executive and director compensation for fiscal 2024 and going forward by removing Lululemon Athletica Inc. and adding Kontoor Brands, Inc. Lululemon Athletica’s market capitalization was approximately $63.9 billion dollars on January 2, 2024 while Kontoor Brands had a market capitalization of approximately $3.46 billion dollars on January 2, 2024, so we believe this change has the effect of substituting a company with a market capitalization substantially in excess of ours for a company that had a market capitalization that is lower than ours as of January 2, 2024.
Compensation Peer Group and Peer Selection Process
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2023 Components in General
| Compensation Type | | Pay Element | Objectives, Basis and Key Features | | Fixed | Cash Compensation | Base Salary | •Intended to provide stable compensation to executive officers, allow us to attract and retain skilled executive talent and maintain a stable leadership team. •Determined based on each executive officer’s role, individual skills, experience, performance, external market value, and internal equity. | | Variable | | Short-Term Incentives: Annual Cash Incentive Opportunities | •Rewards achievement of key drivers of our annual operating plan (“AOP”). •Requires the achievement of rigorous adjusted net sales and adjusted operating income targets. •Sets target cash award as a percentage of base salary at 150% for the CEO and between 60% and 75% for all other NEOs. •Caps STIP awards at 200% of the target cash awards for maximum performance. | | | Equity Compensation | Long-Term Incentives: Annual Equity-Based Compensation | •Used to foster a long-term link between executive officers’ interests and the interests of YETI and our stockholders, as well as to attract, motivate and retain executive officers for the long term. •Sets executive officer annual equity award mix in fiscal 2023 at 75% of the value granted in the form of PBRSUs for our CEO and 50% in the form of PBRSUs for our other NEOs, with the remainder granted in the form of time-based restricted stock units consistent with our continuing focus on pay-for-performance. No stock options were granted in fiscal 2023. •Requires corporate performance against goals to be at least 90% of target in order for any PBRSU award to be earned. •Caps PBRSU grants at 200% of the target number of shares for maximum performance. |
Base Salary
Base Salary Base salaries provide fixed compensation to executive officers and help us to attract and retain the executive talent needed to lead the business and maintain a stable leadership team. We evaluate a number of factors when setting base salaries, including: •Roles & responsibilities: We consider each executive officer’s areas of responsibility, role and experience. •Professional background: Factors such as education, skills, expertise, professional experience and achievements are considered. •Competitiveness: The base salary of executive officers is evaluated for competitiveness by considering, as a reference point, information with respect to comparable positions at companies in our peer group and other market surveys. •Internal pay equity: The variation in the base salary among executive officers is designed to reflect the differences in position, education, scope of responsibilities, previous experience in similar roles and contribution to the attainment of our goals. In February 2023, the Compensation Committee reviewed each then employed executive officer’s performance, our performance and market data provided by FW Cook on our peer companies and general industry to determine whether any changes to base salaries were warranted for fiscal 2023. As a result of this review, the Compensation Committee approved adjustments to reflect executive performance and to align better with the market, as set forth below:
Short-Term Incentives
Short-Term Incentives The short-term incentive plan (“STIP”) is a cash plan that rewards NEOs for the achievement of key short-term financial and operational objectives that the Compensation Committee views as critical to the execution of our business strategy and ensures each executive officer is focused on strategic goals that ultimately will drive long-term value for our stockholders. The STIP is based entirely on YETI’s performance with respect to company performance metrics. To align with the market and ensure each executive officer is focused on the same strategic goals, there was no allocation to individual performance goals. All of our eligible employees participate in the STIP on generally the same terms, other than the target bonus opportunity amount and inclusion of additional performance components for employees other than the NEOs. The calculation of the STIP payout amount for each NEO can be summarized by the following formula:
Short-Term Incentives
| Eligible Salary | × | Target Incentive % | × | Payout % | = | STIP Payout |
Performance Measures
Performance Measures The amount of the payout, if any, under the STIP is based on our achievement against two performance metrics. The Compensation Committee incorporated these two measures, adjusted net sales and adjusted operating income, into the STIP in order to focus executive officers on the critical strategic priorities of revenue growth and operating profitability. These two metrics underscore the emphasis on growth and profitability, and the Compensation Committee considers them as building blocks to achieve our key strategic goals and to grow stockholder value.
Performance Measures
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Performance Measures
| 40% of STIP Opportunity Comprised of wholesale and DTC channel net sales, adjusted for product recalls. |
Performance Measures
| 60% of STIP Opportunity Derived from operating income from our income statement, adjusted for non-cash stock-based compensation expense, asset impairment charges, product recalls, organizational realignment costs, business optimization expense, and transaction costs. |
Performance Measures
* Adjusted net sales and adjusted operating income are non-GAAP measures that we use to compare our performance to other companies. For a reconciliation of adjusted net sales and adjusted operating income as set forth in this Proxy Statement to the comparable GAAP measures, see “Appendix B: Reconciliation of Non-GAAP Financial Measures.”
Performance Levels and Payout Levels
Performance Levels and Payout Levels The Compensation Committee set goals for each of the performance measures at levels that it considered rigorous and challenging based, in part, on its evaluation of the relevant risks and opportunities. More specifically, the Compensation Committee reviewed the relevant financial objectives set forth in our AOP and assessed various factors related to the achievability of these goals, including the risks associated with achieving specific actions that underlie our AOP and the implied performance relative to prior years. Considering these factors, the fiscal 2023 target for adjusted net sales represented a 4.9% growth rate over our fiscal 2022 financial results, and the target for adjusted operating income represented a -2.4% growth rate over our fiscal 2022 financial results. Fiscal 2022 growth rates presented a challenging baseline because the year included the full benefit of the soft coolers included in our voluntary recall as well as the benefit of a restocking of our product by the wholesale channel as the channel was able to return to optimal stock levels after a number of periods of constrained supply. Consequently, the Compensation Committee set fiscal 2023 target growth rates that it believed would be reflective of core operating performance. Having set the targets, the Compensation Committee also set the threshold and maximum performance levels. For fiscal 2023, the Compensation Committee set threshold at what it believed to be a high level of performance equating to 90% of the target for both adjusted net sales and adjusted operating income. The Compensation Committee set maximum at a level of performance equating to 110% of the target for each of adjusted net sales and adjusted operating income, levels that represented a significant challenge. The payment slope for 2023 reflected a change from our 2022 plan design. In 2022, the payment slopes for adjusted net sales and adjusted operating income were not uniform and, relative to the target performance level, the threshold payout levels were higher and the maximum payment level for adjusted net sales was lower (i.e., 105% of target instead of 110% of target in 2023). The Compensation Committee believes that having symmetric performance ranges enhanced the structure of our 2023 STIP. Payout levels represent the amount to be paid to NEOs based on the level of actual performance relative to the goals. In order to motivate performance and underscore the importance of achieving, or closely approaching, the performance goals at this critical time in our development, the Compensation Committee set the payout at 0% for achievement below the threshold level of performance. If we achieve the target performance level for either metric, 100% of the target incentive payment for that metric will become payable to the NEOs, and if we achieve the maximum performance level for either metric, 200% of the target incentive payment for that metric will become payable to the NEOs. If the threshold performance level is achieved for either metric, performance between the threshold and target levels and between the target and maximum levels will result in a payout for each metric that is interpolated in a straight-line manner. Please see the table below for the 2023 performance levels for each metric as well as the 2023 achievement and payout percentages.
Performance Levels and Payout Levels
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Performance Levels and Payout Levels
| Performance Metric | Below Threshold ($) | Threshold ($) | Target ($) | Maximum ($) | Actual Result ($) | % Achievement | Payout % | | Adjusted Net Sales | <1,541.8 | 1,541.8 | 1,713.1 | 1,884.5 | 1,680.4 | 98% | 90% | | | Less than ~90% | ~90% | 100% | ~110% | | | | | Adjusted Operating Income | <240.9 | 240.9 | 267.7 | 294.5 | 262.8 | 97% | 87% | | | Less than ~90% | ~90% | 100% | ~110% | | | | | Payout Percentage | 0% | 50% | 100% | 200% | | | 88.3% |
Performance Levels and Payout Levels
Note: $ in millions, except percentages.
Target Opportunities & Payout Determination
Target Opportunities & Payout Determination The Compensation Committee determines the target cash incentive opportunity available to each NEO by taking the individual’s base salary and multiplying it by the individual’s target incentive percentage. Among other factors, the target incentive percentages are determined with reference to peer group companies and market surveys and the proportion of total direct compensation represented by the annual incentive. In fiscal 2023, the target annual cash incentive percentages of the NEOs remained unchanged from fiscal 2022, except for Mr. McMullen, whose target annual cash incentive increased from 40% to 75% in connection with his appointment to CFO. The Compensation Committee verifies our achievement relative to the pre-established goals to determine the respective performance levels, and then translates those performance levels to payout levels based on the payout curve. The Compensation Committee then adds the amounts for the two portions together to determine the total fiscal 2023 STIP payout for each NEO. The Compensation Committee then presents the determination of the STIP payout amounts to the Board for its review.
Target Opportunities & Payout Determination
| NEO | Eligible Salary ($) | 2023 Target Annual Cash Incentive Percentage (%) | Payout Percentage (%) | Total STIP Payout ($) | | Matthew J. Reintjes | 1,025,000 | 150% | 88.3% | 1,357,613 | | Michael J. McMullen | 442,307 | 75% | 88.3% | 292,918 | | S. Faiz Ahmad | 569,038 | 75% | 88.3% | 376,846 | | Bryan C. Barksdale | 421,923 | 60% | 88.3% | 223,535 | | Martin H. Duff (1) | 425,000 | 60% | 88.3% | 225,165 |
Target Opportunities & Payout Determination
(1) In addition to Mr. Duff’s STIP payout reflected above, Mr. Duff was also awarded a one-time bonus of $150,000 in January 2023. This bonus was provided as an incentive to join YETI, in light of the compensation he forfeited from his prior employer.
Long-Term Incentives
Long-Term Incentives The third primary component of our executive compensation program, and the largest, is long-term equity incentives. The Compensation Committee has designed the long-term incentive opportunity to motivate and reward executive officers to achieve multi-year strategic goals and to deliver sustained long-term value to stockholders. (See “— Compensation Philosophy and Objectives — Compensation Philosophy — Alignment with our business strategy and stockholders’ interests”.) The long-term incentives create a strong link between payouts and performance and a strong alignment between the interests of executive officers and the interests of our stockholders. Long-term equity incentives also promote retention, as executive officers will only receive value if they remain employed by us over the required term, and they foster an ownership culture among our executive officers by making executive officers stockholders with a personal stake in the value they are intended to create.
Long-Term Incentives
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Equity Vehicles
Equity Vehicles
2023 CEO Equity Mix
2023 CEO Equity Mix
2023 NEO Equity Mix
2023 NEO Equity Mix The Compensation Committee set the weighting of the CEO’s equity awards so that 75% of the grant date values are performance-based. The Compensation Committee has structured the mix of equity vehicles and the relative weight assigned to each type to further enhance the link between payouts and performance, and to ensure some amount of value delivery through RSU awards to maximize retention and reinforce an ownership culture and commitment to YETI. The PBRSU awards are eligible to become vested following the end of a three-year performance period based on cumulative free cash flow, with the number of PBRSUs eligible to vest subject to potential modification based on YETI’s TSR relative to the TSR of the companies who were in the Russell 2000 Index as of the start of the performance period. These multi-year performance goals incentivize our executive officers to drive company performance and promote consistent growth in stockholder value across a longer time horizon. The Compensation Committee selected free cash flow because it is a key performance metric for consumer goods companies and is indicative of our ability to generate liquidity and increase stockholder value. The presence of relative TSR in our PBRSU design directly links executive officer compensation to the creation of stockholder value and aligns the interests of executive officers with YETI and our stockholders. The Russell 2000 Index represents a broad index of relatively similarly sized companies.
2023 NEO Equity Mix
| Equity Vehicle | 2023 Allocation of Annual, Ongoing Grants | Performance/ Vesting Period | How Payouts Are Determined | Rationale for Use | | PBRSUs | 75% for our CEO 50% for all other NEOs | 3-year performance period with cliff vesting of award subject to performance measured during the performance period | Cumulative free cash flow measured over a three-year period, with a relative TSR modifier based on the performance of our stock price relative to the companies who were in the Russell 2000 Index as of the start of the performance period | •Prioritizes increasing stockholder value •Promotes long-term focus and retention | | Restricted Stock Units | 25% for our CEO 50% for all other NEOs | 3-year vesting period: 1/3 after Year 1, then 1/6 semi-annually | Value of stock underlying RSUs | •Aligns with stockholders •Promotes retention |
2023 NEO Equity Mix
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2023 NEO Equity Mix
With respect to the cumulative free cash flow (“CFC”) performance metric, the Compensation Committee has approved threshold, target, and maximum performance levels at the time of grant as shown in the table below.
2023 NEO Equity Mix
| Performance Level | % of Target PBRSUs Eligible to Become Vested | | Less Than Threshold | 0% | | Threshold | 50% | | Target | 100% | | Maximum or Greater | 200% |
2023 NEO Equity Mix
Vesting for performance between any of the performance levels specified above is interpolated on a straight-line basis. The number of PBRSUs determined to be eligible to become vested may be further modified based on YETI’s percentile ranking of its TSR compared to companies within the Russell 2000 Index as of the start of the performance period using 20 trading-day start and end periods to mitigate one day volatility in stock price (i.e., “Relative TSR Modifier”). The Relative TSR Modifier is applied using the following table.
2023 NEO Equity Mix
| TSR Percentile Rank | % of CFC PBRSUs to Vest | | ≤25% | 80% | | Between 25% and 75% | 100% (i.e., no modification) | | ≥75% | 120% |
2023 NEO Equity Mix
In all events, the maximum number of target PBRSUs that can vest is capped at 200%. We believe the cumulative three-year free cash flow target is attainable if we are able to successfully execute on our business plan and continue to grow our business.
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards In February 2023, the Compensation Committee established target long-term incentive opportunities for each of the NEOs employed at that time. In establishing the size of the long-term incentive opportunity, the Compensation Committee considered the following: •the values of, allocations to, and proportion of total compensation represented by, the long-term incentive opportunities at the peer group companies and in market surveys; •individual performance and criticality of, and expected future, contributions of the NEO; •time in role, skills and level of experience; and •retention considerations.
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
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Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
The Compensation Committee intends to make grants of long-term incentive awards annually and may also grant long-term incentive awards in other circumstances, such as when an individual is hired or promoted. In February 2023, the Compensation Committee determined annual executive target LTIP incentive percentages, which are a percentage of base salary. Mr. McMullen’s annual target LTIP incentive percentage increased in connection with his appointment to CFO in February 2023. The Compensation Committee maintained the annual target LTIP incentive percentages from 2022 for Messrs. Reintjes and Barksdale. Since Messrs. Ahmad and Duff joined the Company in the second half of 2022, 2023 was their first year being granted annual LTIP awards; therefore, there was no change to their target LTIP incentive percentages. Having established the target value of the long-term incentive, and the mix of equity vehicles, the Compensation Committee used the closing price on the date of grant to determine the actual number of PBRSUs and restricted stock units to be granted to each NEO as shown in the table below.
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
| NEO | 2023 Annual Target LTIP Incentive Percentage | 2023 Annual Target Opportunity ($) | PBRSU ($) | PBRSU (#)(1) | RSU ($) | RSU (#) | | Matthew J. Reintjes | 400% | 4,100,000 | 3,075,000 | 80,224 | 1,025,000 | 26,741 | | Michael J. McMullen | 175% | 787,500 | 393,750 | 10,273 | 393,750 | 10,273 | | S. Faiz Ahmad | 175% | 963,000 | 481,500 | 12,562 | 481,500 | 12,562 | | Bryan C. Barksdale | 150% | 637,500 | 318,750 | 8,316 | 318,750 | 8,316 | | Martin H. Duff | 150% | 638,000 | 319,000 | 8,322 | 319,000 | 8,322 |
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
(1)Reflects the number of PBRSUs for target performance goal. In addition to the annual grants, in 2023 the Compensation Committee provided one-time LTIP awards to Messrs. Reintjes, McMullen, and Barksdale, along with other non-NEO critical talent at YETI. The Committee based this decision on the desire to reward exemplary performance and drive retention of key long-standing members of management. Management successfully navigated through complex strategic factors impacting our business, including a challenging macroeconomic environment and unprecedented supply chain headwinds. The decision to use long-term incentives as the vehicle to reward performance drives retention of these key long-standing members of management, while also holding them accountable to delivering shareholder value based on stock price performance and meeting the financial targets of the PBRSUs. In balancing shareholder interests, the Committee structured the NEO awards to be heavily performance-oriented (i.e., 75% PBRSUs and 25% RSUs for the CEO and 50% PBRSUs and 50% RSUs for Messrs. McMullen and Barksdale). To further enhance retention, the Committee added more stringent vesting periods than normal awards, with Mr. Reintjes’ PBRSUs and RSUs both cliff vesting at the end of three years and subject to an additional one-year holding period after vesting. Vesting for Messrs. McMullen and Barksdale align with that of the annual grants. In sizing the NEO awards, the Committee analyzed executive officer holding power associated with currently outstanding awards and deemed these values to be below market and posing a competitive risk. Target values were set equal to each NEO’s respective annual target LTIP percentage of base salary, as shown below.
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
| NEO | 2023 One-Time LTIP Incentive Percentage | 2023 One-Time Target Opportunity ($) | PBRSU ($) | PBRSU (#)(1) | RSU ($) | RSU (#) | | Matthew J. Reintjes(2) | 400% | 4,100,000 | 3,075,000 | 80,224 | 1,025,000 | 26,741 | | Michael J. McMullen | 175% | 787,500 | 393,750 | 10,273 | 393,750 | 10,273 | | Bryan C. Barksdale | 150% | 637,500 | 318,750 | 8,316 | 318,750 | 8,316 |
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
(1)Reflects the number of PBRSUs for target performance goal. (2)Mr. Reintjes’ grants are subject to a one-year holding period after vesting. In addition, the RSUs vest in full on the three-year anniversary of the grant date.
Target Long-Term Incentive Opportunities and 2023 Grants of PBRSU & Time-Based RSU Awards
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Payouts of Previously Granted 2021-2023 PBRS Awards
Payouts of Previously Granted 2021-2023 PBRS Awards In 2021, we granted each of our NEOs who was employed at that time an award of PBRS with substantially the same design as our 2023 PBRSU awards described above. The applicable cumulative free cash flow target for the performance period was set at $376 million. Based on our performance during the three-year performance period and taking into account the relative TSR modifier, the payout percentage for the 2021 PBRS awards was determined to be 113% of the target number of PBRS awarded.
Additional Aspects of Long-Term Incentive Compensation
Additional Aspects of Long-Term Incentive Compensation We make grants of long-term incentive equity under our 2018 Equity and Incentive Compensation Plan, which our stockholders approved and adopted in 2018, and will make future grants under our 2024 Equity and Incentive Compensation Plan, provided such plan is approved by stockholders at the 2024 Annual Meeting. The grant dates for awards made in 2023 are detailed in the “2023 Grants of Plan-Based Awards” table later in this Proxy Statement. We generally intend to make annual grants during the first quarter of our fiscal year following the release of financial results for the preceding fiscal year.
Severance Arrangements
Severance Arrangements We have adopted a senior leadership severance benefits plan (the “Severance Plan”), which covers all currently employed NEOs, except the CEO, to provide protection in the event of a termination of employment. The Severance Plan generally provides for severance amounts if the NEO’s employment is terminated by us without cause or by the NEO for good reason. For a termination not in connection with a change in control, the NEO is eligible to receive (a) a severance amount equal to 100% of his or her base salary and (b) a pro rata STIP payout based on actual company performance for the year of termination. For terminations within two years after a change in control, the NEO is eligible to receive (x) a severance amount equal to 150% of the sum of base salary plus target annual incentive compensation amount at the time of termination and (y) a pro rata STIP payout. The Severance Plan also provides for reimbursement for health benefit continuation of up to 12 to 18 months. The payments and benefits provided under the Severance Plan are contingent upon the affected NEO’s execution and non-revocation of a general release of claims and compliance with specified restrictive covenants. See “— Potential Payments upon a Termination or Change in Control,” which describes the payments to which the participating NEOs may be entitled under the Severance Plan. Our CEO does not participate in the Severance Plan because he is entitled to severance benefits under his employment agreement that was entered into during 2018. Our CEO’s severance benefits are based on a 1.5x multiple for qualifying terminations not in connection with a change in control and a 2x multiple for qualifying terminations in connection with a change in control. The severance arrangements for our CEO are described below under “— 2023 Summary Compensation Table — Employment Agreement of Mr. Reintjes.”
Severance Arrangements
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2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE The following table sets forth information regarding all compensation awarded to, earned by or paid to our NEOs during fiscal years 2021, 2022 and 2023.
2023 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation(3) ($) | Total ($) | | Matthew J. Reintjes President and Chief Executive Officer | 2023 | 1,025,000 | — | 7,680,891 | 1,357,613 | 13,400 | 10,076,903 | | | 2022 | 1,017,308 | — | 4,313,664 | — | 8,082 | 5,339,054 | | | 2021 | 969,231 | — | 3,821,928 | 2,878,615 | 8,700 | 7,678,474 | | Michael J. McMullen Senior Vice President, Chief Financial Officer and Treasurer | 2023 | 442,307 | — | 1,636,489 | 292,918 | 13,400 | 2,385,114 | | | 2022 | 311,269 | — | 610,418 | — | 8,884 | 930,571 | | | 2021 | — | — | — | — | — | — | | S. Faiz Ahmad Former Senior Vice President and Chief Commercial Officer | 2023 | 569,038 | — | 1,000,563 | 376,846 | 9,900 | 1,956,348 | | | 2022 | 211,538 | 250,000 | 3,000,017 | — | 84,717 | 3,546,272 | | | 2021 | — | — | — | — | — | — | | Bryan C. Barksdale Senior Vice President, Chief Legal Officer and Secretary | 2023 | 421,923 | | 1,324,739 | 223,535 | 11,520 | 1,981,717 | | | 2022 | 402,692 | — | 629,090 | — | 6,947 | 1,038,729 | | | 2021 | 388,269 | — | 881,995 | 461,264 | 6,698 | 1,738,226 | | Martin H. Duff Senior Vice President, Supply Chain and Operations | 2023 | 425,000 | 150,000 | 662,847 | 225,165 | 9,808 | 1,472,820 | | | 2022 | 32,692 | — | 599,987 | — | 491 | 633,170 | | | 2021 | — | — | — | — | — | — |
2023 SUMMARY COMPENSATION TABLE
(1)The amounts shown in the Stock Awards column represent the aggregate grant date fair value of the RSUs, PBRS, PBRSU and shares of time-based restricted stock granted to our NEOs, computed in accordance with Topic 718. The amount attributable to the PBRSU awards shown in the Stock Awards column reflects the value of annual and one-time PBRSU awards based on target performance, which was the probable outcome of the applicable performance conditions as determined on the grant date, which results in a grant date fair value for the 2023 PBRSU awards as follows: Mr. Reintjes $5,866,781; Mr. McMullen $848,961; Mr. Ahmad $519,062; Mr. Barksdale $687,234; and Mr. Duff $343,865. If there is a maximum payout under the 2023 PBRSU awards, assuming no change in stock price, the values for such awards would be as follows: Mr. Reintjes $10,751,620; Mr. McMullen $1,555,743; Mr. Ahmad $475,597; Mr. Barksdale $1,259,375; and Mr. Duff $315,071. For information regarding assumptions, factors and methodologies used in our computations pursuant to Topic 718, see Note 9 (Stock-Based Compensation) to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023. (2)The amounts shown in the Non-Equity Incentive Plan Compensation column are comprised of amounts paid in respect of the STIP, as determined by the Compensation Committee and in accordance with the plan and the awards thereunder. Payments pursuant to the STIP are generally made early in the year following the year in which they are earned. (3)Amounts disclosed in this column reflect Company contributions to the tax-qualified 401(k) retirement plan. In 2023, for Messrs. Reintjes, McMullen, and Barksdale, this amount also included the cost for a comprehensive physical health exam. In 2022, for Mr. Ahmad, this amount included reimbursement of relocation expenses in the amount of $84,717.
2023 SUMMARY COMPENSATION TABLE
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FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE The following table sets forth information regarding plan-based awards granted to our NEOs during fiscal 2023:
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| Name | Grant Date | Award Type | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock and Option Awards ($) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Matthew J. Reintjes | | Annual Incentive | 768,750 | 1,537,500 | 3,075,000 | | | | | | | | 2/24/2023 | RSU | | | | | | | 26,741 | 1,024,983 | | | 2/24/2023 | RSU | | | | | | | 26,741 | 789,127 | | | 2/24/2023 | PBRSU | | | | 40,112 | 80,224 | 160,448 | | 2,551,925 | | | 2/24/2023 | PBRSU | | | | 40,112 | 80,224 | 160,448 | | 3,314,856 | | Michael J. McMullen | | Annual Incentive | 165,865 | 331,731 | 663,461 | | | | | | | | 2/24/2023 | RSU | | | | | | | 10,273 | 393,764 | | | 2/24/2023 | RSU | | | | | | | 10,273 | 393,764 | | | 2/24/2023 | PBRSU | | | | 5,137 | 10,273 | 20,546 | | 424,480 | | | 2/24/2023 | PBRSU | | | | 5,137 | 10,273 | 20,546 | | 424,480 | | S. Faiz Ahmad | | Annual Incentive | 213,389 | 426,779 | 853,558 | | | | | | | | 2/24/2023 | RSU | | | | | | | 12,562 | 481,501 | | | 2/24/2023 | PBRSU | | | | 6,281 | 12,562 | 25,124 | | 519,062 | | Bryan C. Barksdale | | Annual Incentive | 126,577 | 253,154 | 506,308 | | | | | | | | 2/24/2023 | RSU | | | | | | | 8,316 | 318,752 | | | 2/24/2023 | RSU | | | | | | | 8,316 | 318,752 | | | 2/24/2023 | PBRSU | | | | 4,158 | 8,316 | 16,632 | | 343,617 | | | 2/24/2023 | PBRSU | | | | 4,158 | 8,316 | 16,632 | | 343,617 | | Martin H. Duff | | Annual Incentive | 127,500 | 255,000 | 510,000 | | | | | | | | 2/24/2023 | RSU | | | | | | | 8,322 | 318,982 | | | 2/24/2023 | PBRSU | | | | 4,161 | 8,322 | 16,644 | | 343,865 |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE The following table sets forth information regarding outstanding equity awards held by each of our NEOs as of December 30, 2023:
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
| | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Exercisable (#)(1) | Unexercisable (#)(2) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units That Have Not Vested (#)(3) | Market Value of Shares or Units That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6) | | Matthew J. Reintjes | 10/24/2018 | 321,691 | | | 18.00 | 10/24/2028 | | | | | | | 2/15/2019 | 179,059 | | | 22.84 | 2/15/2029 | | | | | | | 2/12/2021(7) | | | | | | 4,171 | 215,974 | | | | | 2/18/2022(7) | | | | | | 8,500 | 440,130 | | | | | 2/24/2023(7) | | | | | | 53,482 | 2,769,298 | | | | | 2/12/2021(8) | | | | | | | | 50,058 | 2,592,003 | | | 2/18/2022(8) | | | | | | | | 102,006 | 5,281,871 | | | 2/24/2023(9) | | | | | | | | 320,896 | 16,615,995 | | Michael J. McMullen | 10/24/2018 | 8,639 | | | 18.00 | 10/24/2028 | | | | | | | 2/15/2019 | 2,805 | | | 22.84 | 2/15/2029 | | | | | | | 2/12/2021(7) | | | | | | 423 | 21,903 | | | | | 2/18/2022(7) | | | | | | 1,243 | 64,363 | | | | | 2/24/2023(7) | | | | | | 20,546 | 1,063,872 | | | | | 2/12/2021(8) | | | | | | | | 5,082 | 263,146 | | | 2/18/2022(8) | | | | | | | | 4,976 | 257,657 | | | 2/24/2023(8) | | | | | | | | 41,092 | 2,127,744 | | S. Faiz Ahmad | 8/9/2022(7) | | | | | | 46,838 | 2,425,272 | | | | | 2/24/2023(7) | | | | | | 12,562 | 650,460 | | | | | 2/24/2023 | | | | | | | | 25,124 | 1,300,921 | | Bryan C. Barksdale | 10/24/2018 | 28,737 | | | 18.00 | 10/24/2028 | | | | | | | 2/15/2019 | 18,556 | | | 22.84 | 2/15/2029 | | | | | | | 2/12/2021(7) | | | | | | 962 | 49,812 | | | | | 2/18/2022(7) | | | | | | 2,520 | 130,486 | | | | | 2/24/2023(7) | | | | | | 16,632 | 861,205 | | | | | 2/12/2021(8) | | | | | | | | 11,552 | 598,163 | | | 2/18/2022(8) | | | | | | | | 10,084 | 522,150 | | | 2/24/2023(8) | | | | | | | | 33,264 | 1,722,410 | | Martin H. Duff | 11/21/2022(7) | | | | | | 9,744 | 504,544 | | | | | 2/24/2023(7) | | | | | | 8,322 | 430,913 | | | | | 2/24/2023(8) | | | | | | | | 16,644 | 861,826 |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
(1)Amounts disclosed in this column reflect the number of options granted to our NEOs that were subject to time-based vesting and have vested. The options generally expire ten years from the date of grant and have an exercise price of no less than 100% of the fair market value of a YETI share on the date of grant. See “2023 Potential Payments Upon Termination or Change in Control” for information on the treatment of options upon retirement, death, disability, termination or change in control.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
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OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
(2)As of December 30, 2023, all outstanding options granted to our NEOs are fully vested and exercisable. (3)Amounts disclosed in this column reflect the number of unvested RSUs and shares of restricted stock granted that were subject to time-based vesting. See “2023 Potential Payments Upon Termination or Change in Control” for information on the treatment of RSUs and shares of restricted stock upon retirement, death, disability, termination or change in control. (4)Amounts disclosed in this column reflect the market value of the RSUs and shares of time-based restricted stock as reported in the preceding column using the closing price of a YETI share as reported on the New York Stock Exchange on December 29, 2023, the last trading day of our fiscal year, multiplied by the number of shares underlying each award. (5)Amounts disclosed in this column reflect the number of PBRS or PBRSUs that would be paid out if the maximum performance goal is achieved. See “2023 Potential Payments Upon Termination or Change in Control” for information on the treatment of PBRS and PBRSUs upon retirement, death, disability, termination or change in control. (6)Amounts disclosed in this column reflect the market value of the PBRS or PBRSU as reported in the preceding column using the closing price of a YETI share as reported on the New York Stock Exchange on December 29, 2023, the last trading day of our fiscal year, multiplied by the number of shares underlying each award. (7)Vest one-third on the first anniversary of the grant date and one-sixth on each of the first four six-month anniversaries thereafter, except that Mr. Reintjes’ 2023 one-time RSU award cliff vests in full at the end of three years and is subject to an additional one-year holding period after such vesting. (8)Vest following the end of a three-year performance period based on cumulative free cash flow during the performance period, subject to potential modification based on YETI’s TSR relative to the TSR of the companies who were in the Russell 2000 Index as of the start of the performance period. (9)Mr. Reintjes’ 2023 one-time PBRSU award cliff vests in full following the end of a three-year performance period based on cumulative free cash flow during the performance period, subject to potential modification based on YETI’s TSR relative to the TSR of the companies who were in the Russell 2000 Index as of the start of the performance period. Mr. Reintjes’ one-time PBRSUs are subject to a one-year holding period after such vesting.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE
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FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE The following table provides information about the number of shares issued upon option exercises, the number of stock awards that vested, and the value realized on exercise or vesting, by our NEOs during fiscal 2023.
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | Number of Shares Acquired on Vesting (#)(3) | Value Realized on Vesting (#)(4) | | Matthew J. Reintjes | — | — | 87,495 | 3,481,423 | | Michael J. McMullen | — | — | 17,960 | 716,701 | | S. Faiz Ahmad | — | — | 23,420 | 1,071,465 | | Bryan C. Barksdale | — | — | 16,722 | 669,057 | | Martin H. Duff | — | — | 4,872 | 207,401 |
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE
(1)The amounts shown in this column represent the number of shares acquired on the exercise of options during fiscal 2023. (2)The amounts shown in this column represent the number of shares acquired on exercise multiplied by the difference between the option exercise price and the closing price of a YETI share on the date of exercise. (3)Amounts disclosed in this column reflect the number of PBRS, RSUs and shares of restricted stock that vested during fiscal 2023. (4)Amounts disclosed in this column reflect the value realized upon vesting of the RSUs and shares of restricted stock, as calculated based on the price of a YETI share on the vesting date, multiplied by the number of shares underlying each award.
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE
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Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control Mr. Reintjes’ employment agreement provides for certain payments to be made in connection with certain terminations of employment. Under Mr. Reintjes’ employment agreement, Mr. Reintjes is entitled to severance, subject to his execution of a release of claims, as follows: •If Mr. Reintjes’ employment is terminated by us without cause (as such term is defined in Mr. Reintjes’ employment agreement) or by Mr. Reintjes for good reason (as such term is defined in Mr. Reintjes’ employment agreement), and such termination occurs outside of the change in control protection period (as such term is defined in Mr. Reintjes’ employment agreement), Mr. Reintjes will be eligible to receive a severance payment in an amount equal to 150% of the sum of his annual base salary amount plus target annual incentive compensation amount for the year in which such termination occurs. This amount would be paid over the 18-month period following Mr. Reintjes’ termination of employment. Mr. Reintjes will also be eligible to receive a pro rata portion of his annual incentive compensation payment for the year of termination, based on actual performance for the full year and the number of days he was employed during such year, to be paid in a lump sum at the later of (a) the time when annual incentive compensation payments are paid to our executive officers for the calendar year in which Mr. Reintjes’ employment terminates or (b) the 61st day after the date on which Mr. Reintjes’ employment terminates. In addition, we will reimburse Mr. Reintjes for the full amount of his premiums for health care continuation coverage for a period of up to 18 months. •If Mr. Reintjes’ employment is terminated by us without cause or by Mr. Reintjes for good reason, and such termination occurs during the change in control protection period, Mr. Reintjes will be eligible to receive a severance payment in an amount equal to 200% of the sum of his annual base salary amount plus his target annual incentive compensation amount for the year in which such termination occurs. This amount generally would be paid in a single lump sum following Mr. Reintjes’ termination of employment; although a portion of this amount would be paid over the 18-month period following Mr. Reintjes’ termination of employment if required under Section 409A of the Code. Mr. Reintjes will also be eligible to receive a pro rata portion of his target annual incentive compensation payment for the year of termination, based on the number of days he was employed during such year, to be paid in a lump sum at the later of (a) the time when annual incentive compensation payments are paid to our executive officers for the calendar year in which Mr. Reintjes’ employment terminates or (b) the 61st day after the date on which Mr. Reintjes’ employment terminates. In addition, we will reimburse Mr. Reintjes for the full amount of his premiums for health care continuation coverage for a period of up to 18 months. •Mr. Reintjes’ employment agreement also contains a net-better Section 280G cutback provision, which provides that, if payments to Mr. Reintjes would constitute “parachute payments” within the meaning of Section 280G of the Code and be subject to an excise tax under Section 4999 of the Code, then such payments would be reduced by the amount needed to avoid triggering such tax, provided that such reduction leaves Mr. Reintjes in a better after-tax position than if such payments had not been reduced (taking into account the effect of the excise tax). Under the Severance Plan, each participating NEO is entitled to severance, subject to his or her execution of a release of claims, as follows: •If the employment of any of Messrs. Barksdale, Duff, or McMullen is terminated by us without cause (as such term is defined in the Severance Plan) or by the applicable executive for good reason (as such term is defined in the Severance Plan), and such termination does not occur during the change in control protection period (as such term is defined in the Severance Plan), such executive will be eligible to receive a severance amount equal to 100% of his or her respective annual base salary amount (the “Base Severance Amount”). The Base Severance Amount would be paid over the 12-month period following the applicable
Potential Payments Upon Termination or Change of Control
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Potential Payments Upon Termination or Change of Control
executive’s termination of employment. Such executive will also be eligible to receive a pro rata portion of his or her respective annual incentive compensation payment for the year of termination, based on actual performance for the full year and the number of days the applicable executive was employed during such year, to be paid in a lump sum at the later of (a) the time when annual incentive compensation payments are paid to our executive officers for the calendar year in which the applicable executive’s employment terminates or (b) the 61st day after the date on which the applicable executive’s employment terminates. In addition, we will reimburse the applicable executive for the full amount of his or her premiums for health care continuation coverage for a period of up to 12 months. •If the employment of any of Messrs. Barksdale, Duff, or McMullen is terminated by us without cause or by the applicable executive for good reason, and such termination occurs during the change in control protection period, such executive will be eligible to receive a severance payment equal to 150% of the sum of his or her annual base salary amount plus target annual incentive compensation amount (the “Enhanced Severance Amount”). The Enhanced Severance Amount generally would be paid in a single lump sum following the applicable executive’s termination of employment; although a portion of this amount would be paid over the 12-month period following the applicable executive’s termination of employment, if required under Section 409A of the Code. Such executive will also be eligible to receive a pro rata portion of his or her target annual incentive compensation payment for the year of termination, based on the number of days he or she was employed during such year, to be paid in a lump sum at the later of (a) the time when annual incentive compensation payments are paid to our executive officers for the calendar year in which the applicable executive’s employment terminates or (b) the 61st day after the date on which the applicable executive’s employment terminates. In addition, we will reimburse the applicable executive for the full amount of his or her premiums for health care continuation coverage for a period of up to 18 months. •For purposes of the Severance Plan, the change in control protection period is the 24-month period following a change in control (as defined in the Severance Plan). If a change in control occurs during the six-month period following termination of the employment of either of Messrs. Barksdale, Duff, or McMullen by us without cause, or by the applicable executive for good reason, and such termination of employment (or the event giving rise to the termination for good reason) occurred at the request of a third party which had taken steps reasonably calculated or intended to effectuate such change in control, or otherwise arose in connection with or in anticipation of such change in control, then such executive would be entitled to receive the Enhanced Severance Amount, less any portion of the Base Severance Amount that was previously paid. •The Severance Plan also contains a net-better Section 280G cutback provision, which provides that, if payments to a participant would constitute “parachute payments” within the meaning of Section 280G of the Code and be subject to an excise tax under Section 4999 of the Code, then such payments would be reduced by the amount needed to avoid triggering such tax, provided that such reduction leaves the participant in a better after-tax position than if such payments had not been reduced (taking into account the effect of the excise tax).
Potential Payments Upon Termination or Change of Control
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CEO PAY RATIO
CEO PAY RATIO For fiscal 2023, the median of the annual total compensation of all employees of YETI (other than our CEO) was $105,841, and the annual total compensation of our CEO, Matthew J. Reintjes, was $10,076,903. Based on this information, for fiscal 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was approximately 95 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules. The methodology and the material assumptions, adjustments and estimates that we used to identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” were as follows: For 2023, we used the same median employee as in 2021 because during 2023 there was no change in our employee population or compensation arrangements that would significantly impact this disclosure. When we originally identified the median employee for 2021, we used the following methodology: •As of November 1, 2021, our employee population consisted of approximately 802 individuals globally, of which 726 were in the United States and 76 were outside of the United States. •In accordance with the “de minimis exemption” adjustment permitted under SEC rules, which allows the exclusion of non-U.S. employees constituting less than 5% of the total employee population from the median employee calculation, we excluded 32 employees (representing fewer than 5% of our total employee population, excluding the CEO, as of November 1, 2021) from 3 countries as follows: 25 employees in China, 3 employees in Singapore, and 4 employees in the Philippines. After the exclusions, 726 employees in the United States and 44 employees located outside of the United States were considered for identifying the median employee. •To identify our “median employee,” we analyzed the actual total earnings compiled from our payroll records for the one-year period ending December 31, 2021 to determine the median employee. Actual earnings included base pay, overtime compensation, bonuses and other incentive pay (including commissions and fringe benefits). ◦We annualized the compensation of the employees who were hired during the applicable period, but who did not work for us during the entire 12 months. ◦We did not make any cost-of-living adjustments to adjust for employees living outside of Austin, Texas. ◦For employees in foreign jurisdictions, we converted amounts paid in local currencies to U.S. dollars using the exchange rate as of November 1, 2021. •We determined that our median employee was a full-time corporate employee located in the United States. •With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for fiscal 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $105,841. With respect to the annual total compensation for our CEO, we used the amount reported in the “Total” column of the “Summary Compensation Table” set forth above. Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of methodologies, apply certain exclusions and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
CEO PAY RATIO
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PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE Under rules adopted pursuant to the Dodd-Frank Act, we are required to disclose certain information about the relationship between the compensation actually paid to our named executive officers and certain measures of company performance. The material that follows is provided in compliance with these rules; however, additional information regarding our compensation philosophy, the structure of our performance-based compensation programs, and compensation decisions made this year is described above in our “Compensation Discussion and Analysis”. The following table provides information regarding compensation actually paid to our principal executive officer, or PEO, and other NEOs for each year from 2020 to 2023, compared to our total shareholder return (TSR) from December 31, 2019 through the end of each such year, and our Net Income and Free Cash Flow for each such year.
PAY VERSUS PERFORMANCE
| Year (a) | Summary Compensation Table Total for PEO (b)(1)(2) | Compensation Actually Paid to PEO (c)(1)(3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (d)(4)(5) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (e)(4)(6) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($K)(h)(9) | Free Cash Flow ($K)(i)(10)(11) | | | | | | | Total Shareholder Return (f)(7) | Peer Group Total Shareholder Return (g)(8) | | | | 2023 | 10,076,903 | 14,478,831 | 1,949,000 | 2,625,281 | 148 | 54 | 169,885 | 235,270 | | 2022 | 5,339,054 | (7,609,029) | 1,587,779 | (1,234,645) | 118 | 54 | 89,693 | 54,965 | | 2021 | 7,678,474 | 15,467,715 | 2,110,998 | 3,839,208 | 237 | 95 | 212,602 | 90,399 | | 2020 | 6,265,215 | 22,820,769 | 1,624,573 | 5,202,817 | 196 | 90 | 155,801 | 350,861 |
PAY VERSUS PERFORMANCE
(1)Our PEO was Matthew J. Reintjes. (2)Represents the total compensation paid to our PEO in each listed year, as shown in our Summary Compensation Table for such listed year. (3)Compensation actually paid does not mean that our PEO was actually paid those amounts in the listed year, but this is a dollar amount derived from the starting point of summary compensation table total compensation under the methodology prescribed under the relevant rules as shown in the adjustment table below.
PAY VERSUS PERFORMANCE
| | 2020 ($) | 2021 ($) | 2022 ($) | 2023 ($) | | Summary Compensation Table Total(a) | 6,265,215 | 7,678,474 | 5,339,054 | 10,076,903 | | Subtract Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year(b) | (3,237,499) | (3,821,928) | (4,313,664) | (7,680,891) | | Add Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year(c) | 9,510,530 | 4,378,393 | 2,819,293 | 10,883,616 | | Adjust for Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years(c) | 8,779,001 | 3,278,399 | (2,316,950) | 672,532 | | Adjust for Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year(c) | — | — | — | — | | Adjust for Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year(c) | 1,503,522 | 3,954,377 | (9,136,763) | 526,670 | | Subtract Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year(c) | — | — | — | — | | Add Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | — | — | — | | Compensation Actually Paid | 22,820,769 | 15,467,715 | (7,609,029) | 14,478,831 |
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
a.We have not reported any amounts in our Summary Compensation Table with respect to “Change in Pension and Nonqualified Deferred Compensation” and, accordingly, the adjustments with respect to such items prescribed by the pay-versus-performance rules are not relevant to our analysis and no adjustments have been made. b.The amounts reflect the aggregate grant-date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. c.In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards to our PEO were remeasured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the table above. We approached the determination of fair value in the same way as we historically have determined fair value and fair values as of each measurement date were determined using valuation assumptions and methodologies (including expected term, volatility, dividend yield, and risk-free interest rates) that are generally consistent with those used to estimate fair value at grant under US GAAP. See “Stock-Based Compensation” in the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for additional details. (4)The FY2020, FY2021, and FY2022 values for compensation actually paid have been updated to align with the latest SEC guidance. (5)This figure is the average of the total compensation paid to our NEOs other than our PEO in each listed year, as shown in our Summary Compensation Table for such listed year. The names of the non-PEO NEOs in each year are listed in the table below.
PAY VERSUS PERFORMANCE
| 2020 | 2021 | 2022 | 2023 | | Paul C. Carbone | Paul C. Carbone | Paul C. Carbone | Michael J. McMullen | | Bryan C. Barksdale | Bryan C. Barksdale | Michael J. McMullen | Bryan C. Barksdale | | Kirk A. Zambetti | Kirk A. Zambetti | Bryan C. Barksdale | S. Faiz Ahmad | | Hollie S. Castro | Hollie S. Castro | Kirk A. Zambetti | Martin Duff | | | | Hollie S. Castro | | | | | S. Faiz Ahmad | |
PAY VERSUS PERFORMANCE
(6)This figure is the average of compensation actually paid for our NEOs other than our PEO in each listed year. Compensation actually paid does not mean that these NEOs were actually paid those amounts in the listed year, but this is a dollar amount derived from the starting point of Summary Compensation Table total compensation under the methodology prescribed under the SEC’s rules as shown in the table below, with the indicated figures showing an average of such figure for all NEOs other than our PEO in each listed year.
PAY VERSUS PERFORMANCE
| | 2020 ($) | 2021 ($) | 2022 ($) | 2023 ($) | | Summary Compensation Table Total(a) | 1,624,573 | 2,110,998 | 1,587,779 | 1,949,000 | | Subtract Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year(b) | (699,377) | (1,096,615) | (1,168,424) | (1,156,160) | | Add Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year(c) | 2,054,493 | 1,256,280 | 723,855 | 1,583,539 | | Adjust for Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years(c) | 1,902,153 | 708,125 | (218,333) | 181,505 | | Adjust for Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year(c) | — | — | — | — | | Adjust for Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year(c) | 320,975 | 860,420 | (1,066,720) | 67,397 | | Subtract Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year(c) | — | — | (1,092,803) | — | | Add Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | — | — | — | — | | Compensation Actually Paid | 5,202,817 | 3,839,208 | (1,234,645) | 2,625,281 |
PAY VERSUS PERFORMANCE
(a)We have not reported any amounts in our Summary Compensation Table with respect to “Change in Pension and Nonqualified Deferred Compensation” and, accordingly, the adjustments with respect to such items prescribed by the pay-versus-performance rules are not relevant to our analysis and no adjustments have been made.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
(b)The amounts reflect the aggregate grant-date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (c)In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards to our NEOs were remeasured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the table above. We approached the determination of fair value in the same way as we historically have determined fair value and fair values as of each measurement date were determined using valuation assumptions and methodologies (including expected term, volatility, dividend yield, and risk-free interest rates) that are generally consistent with those used to estimate fair value at grant under US GAAP. See “Stock-Based Compensation” in the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for additional details. (7)Total shareholder return is calculated by assuming that a $100 investment was made on the day prior to the first fiscal year reported below and that all dividends are reinvested until the last day of each reported fiscal year. (8)The peer group used is the S&P 500 Apparel, Accessories & Luxury Goods Index, as used in the Company’s Stock Performance Graph in our annual report. Total shareholder return is calculated by assuming that a $100 investment was made on the day prior to the first fiscal year reported below and that all dividends are reinvested until the last day of each reported fiscal year. (9)The dollar amounts reported are the Company’s net income reflected in the Company’s audited financial statements for the applicable year. (10)In the Company’s assessment, Free Cash Flow is the financial performance measure that is the most important financial performance measure used by the Company in 2023 to link compensation actually paid to performance. Please see the Compensation Discussion and Analysis section above for a further discussion of Free Cash Flow and how it is utilized in our executive compensation program. (11)Our Proxy Statement for the year ended December 31, 2022 mistakenly listed as Free Cash Flow figures for 2020, 2021 and 2022 adjusted operating income figures for such years. These figures have been revised to reflect Free Cash Flow for each applicable year.
Description of Relationships Between Compensation Actually Paid and Performance
Description of Relationships Between Compensation Actually Paid and Performance The graphs below describe, in a manner compliant with the relevant rules, the relationship between Compensation Actually Paid and the individual performance measures shown.
Description of Relationships Between Compensation Actually Paid and Performance
| 60 | YETI® 2024 Proxy Statement |
Description of Relationships Between Compensation Actually Paid and Performance
| YETI® 2024 Proxy Statement | 61 |