Compensation and Talent Committee Report
The Compensation and Talent Committee reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management. Based on such review and discussion, the Compensation and Talent Committee recommended to the Board, and the Board approved, that the Compensation Discussion and Analysis be included in the proxy statement for the 2023 Annual Meeting of Shareholders and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended April 1, 2023.
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Compensation and Talent Committee | | Jean Tomlin (Chair), Marilyn Crouther, Robin Freestone, Mahesh Madhavan and Jane Thompson |
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Compensation and Talent Committee Risk Assessment |
Management periodically reviews with the Compensation and Talent Committee our compensation policies and practices and evaluates the degree to which the various design elements of our compensation program encourage excessive or inappropriate risk-taking, including by our named executive officers. We believe that the various elements of our compensation program discourage imprudent risk taking and are aligned with our strategy and objectives. As a result of its review and evaluation of our Fiscal 2023 compensation program, the Compensation and Talent Committee concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.
The factors evaluated by management and the Compensation and Talent Committee included:
•the overall mix of pay between base salary, short-term and long-term incentives
•the variety of performance metrics used in our performance-based incentive compensation plans
•the range of performance required to earn a payout under performance-based compensation and capped payouts under our Incentive Plan
•the timing of incentive payouts and the vesting schedules and vesting conditions under our Incentive Plan
•our incentive compensation clawback policy
•the balance between the use of time-based and performance-based equity incentives
•share ownership guidelines for our non-employee directors and our executives
•our policy against buying Company shares on margin or engaging in any hedging transactions
•our rigorous management performance evaluation process with an emphasis on core competencies and leadership capabilities
•our leadership and culture that values long-term value creation for our shareholders and strong financial performance
•its certification of all performance results, approval of all performance payouts, and ability to apply discretion as appropriate
When we are developing new compensation programs or modifying existing programs and selecting performance measures for annual and long-term incentives, management and the Compensation and Talent Committee consider the associated risks when making its decisions.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned by, awarded, or paid to each of our named executive officers for our last three completed fiscal years:
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| Name and Principal Position | Fiscal
Year | Salary ($) | Bonus ($) | Share Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | |
John D. Idol Chairman and Chief Executive Officer | 2023 | 1,350,000 | | — | | 8,500,044 | | — | | 4,320,000 | | 161,769 | | 14,331,813 | | |
| 2022 | 1,215,000 | | — | | 8,500,021 | | — | | 4,860,000 | | 162,810 | | 14,737,831 | | |
| 2021 | 24,502 | | — | | 6,000,005 | | — | | 2,025,000 | | 143,918 | | 8,193,425 | | |
Thomas J. Edwards, Jr. Executive Vice President, Chief Financial Officer and Chief Operating Officer | 2023 | 800,000 | | — | | 3,000,010 | | — | | 1,280,000 | | 8,700 | | 5,088,710 | | |
| 2022 | 745,000 | | — | | 3,000,023 | | — | | 1,500,000 | | 8,550 | | 5,253,573 | | |
| 2021 | 693,333 | | — | | 1,499,993 | | — | | 360,000 | | 4,200 | | 2,557,526 | | |
Jenna Hendricks(4) Senior Vice President, Chief People Officer | 2023 | 500,000 | | — | | 1,499,958 | | — | | 400,000 | | 15,876 | | 2,415,834 | | |
| 2022 | 476,667 | | — | | 1,499,984 | | — | | 500,000 | | 12,340 | | 2,488,991 | | |
Krista A. McDonough Senior Vice President, General Counsel and Chief Sustainability Officer | 2023 | 550,000 | | — | | 1,499,958 | | — | | 440,000 | | 8,700 | | 2,498,658 | | |
| 2022 | 533,333 | | — | | 1,499,984 | | — | | 550,000 | | 8,550 | | 2,591,867 | | |
| 2021 | 437,179 | | — | | 1,000,001 | | — | | 112,500 | | 4,200 | | 1,553,880 | | |
Daniel T. Purefoy(5) Former Senior Vice President, Global Operations and Head of Diversity and Inclusion | 2023 | 145,192 | | — | | — | | — | | — | | — | | 145,192 | | |
| 2022 | 372,115 | | — | | 600,005 | | — | | 375,000 | | — | | 1,347,120 | | |
| 2021 | 346,346 | | — | | 999,996 | | — | | 90,000 | | — | | 1,436,342 | | |
1.The amounts reported in these columns reflect the aggregate grant date fair value computed in accordance with Accounting Standards Codification topic 718, “Stock Compensation,” as issued by the Financial Accounting Standards Board (disregarding any forfeiture assumptions). These values have been determined based on the fair market value on the date of grant for each award. The aggregate grant date fair value is the amount that the Company expects to expense for accounting purposes over the award’s vesting schedule and does not correspond to the actual value that the NEOs will realize from the award. The weighted average assumptions for share-based awards are set forth in Note 16 (Share-Based Compensation) to our audited financial statements included in our Annual Report on Form 10-K for Fiscal 2023. The value of the PRSUs included in the amount reported in this column is based on achieving target performance goals and represents 100% of the grant date fair value.
2.The amounts reported in this column were earned under our Cash Incentive Plan for the applicable fiscal year. For a more detailed discussion of our cash incentive program, see “Compensation Discussion and Analysis—Fiscal 2023 Compensation—Incentive Compensation—Fiscal 2023 Annual Cash Incentive.”
3.For each of our NEOs, “All Other Compensation” consists of the payments that are shown in the table below for the applicable fiscal year.
4.Ms. Hendricks was not a NEO for Fiscal 2021.
5.Mr. Purefoy’s last day of employment with the Company was on July 29, 2022. Represents his pro rated base salary for the portion of the fiscal year that he was actually employed.
All Other Compensation
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| Perquisite | Mr. Idol ($) | Mr. Edwards ($) | Ms. Hendricks ($) | Ms. McDonough ($) | Mr. Purefoy ($) | |
| Transportation Benefit(1) | | | | | | |
| 2023 | 5,006 | | — | | — | | — | | — | | |
| 2022 | 30,365 | | — | | — | | — | | — | | |
| 2021 | 16,027 | | — | | (3) | — | | — | | |
| 401(k) Company Match | | | | | | |
| 2023 | 8,700 | | 8,700 | | 8,700 | | 8,700 | | — | | |
| 2022 | 8,550 | | 8,550 | | 8,550 | | 8,550 | | — | | |
| 2021 | 4,200 | | 4,200 | | (3) | 4,200 | | — | | |
| Company Paid Life Insurance Premiums | | | | | | |
| 2023 | 50,000 | | — | | — | | — | | — | | |
| 2022 | 50,000 | | — | | — | | — | | — | | |
| 2021 | 50,000 | | — | | (3) | — | | — | | |
| Other | | | | | | |
| 2023 | 98,063(2) | — | | 7,176(4) | — | | — | | |
| 2022 | 73,895(2) | — | | 3,790(4) | — | | — | | |
| 2021 | 73,691(2) | — | | (3) | — | | — | | |
1.Represents the value of an automobile and driver provided on behalf of the Company to Mr. Idol for all fiscal years presented.
2.Represents (i) a foreign tax credit in the amount of $1,874 for Fiscal 2023, $1,874 for Fiscal 2022 and $22,055 for Fiscal 2021and (ii) the aggregate incremental cost associated with personal use of the Company aircraft in the amount of $96,189 for Fiscal 2023, $72,022 for Fiscal 2022 and $51,636 for Fiscal 2021 for Mr. Idol.
3.Ms. Hendricks was not a NEO for Fiscal 2021.
4.Represents clothing allowance for Ms. Hendricks.
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
The following table sets forth information on potential payment opportunities in respect of Fiscal 2023 performance under our annual Cash Incentive Plan and equity awards granted during Fiscal 2023 under our Incentive Plan. Mr. Purefoy has been omitted from the below table as he did not receive any grants of plan-based awards during Fiscal 2023.
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| | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards | | Estimated Future Payouts
Under Equity Incentive Plan
Awards | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/ Share) | Grant Date Fair Value of Share and Option Awards ($)(2) | |
| Name | Type of Award | Grant Date | Threshold ($) | Target ($) | Maximum(($) | | Threshold (#) | Target (#) | Maximum (#) | |
| John D. Idol | RSUs | 6/15/22 | — | | — | | — | | | — | | — | | — | | 89,644 | | — | | — | | 4,250,022 | | |
PRSUs(3) | 6/15/22 | — | | — | | — | | | 44,822 | | 89,644 | | 179,288 | | — | | — | | — | | 4,250,022 | | |
Annual Cash Incentive Plan(4) | — | — | | 2,700,000 | | 5,400,000 | | | — | | — | | — | | — | | — | | — | | — | | |
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| Thomas J. Edwards, Jr. | RSUs | 6/15/22 | — | | — | | — | | | — | | — | | — | | 31,639 | | — | | — | | 1,500,005 | | |
PRSUs(3) | 6/15/22 | — | | — | | — | | | 15,820 | | 31,639 | | 63,278 | | — | | — | | — | | 1,500,005 | | |
Annual Cash Incentive Plan(4) | — | — | | 800,000 | | 1,600,000 | | | — | | — | | — | | — | | — | | — | | — | | |
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| Jenna Hendricks | RSUs | 6/15/22 | — | | — | | — | | | — | | — | | — | | 15,819 | | — | | — | | 749,979 | | |
PRSUs(3) | 6/15/22 | — | | — | | — | | | 7,910 | | 15,819 | | 31,638 | | — | | — | | — | | 749,979 | | |
Annual Cash Incentive Plan(4) | — | — | | 250,000 | | 500,000 | | | — | | — | | — | | — | | — | | — | | — | | |
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| Krista A. McDonough | RSUs | 6/15/22 | — | | — | | — | | | — | | — | | — | | 15,819 | | — | | — | | 749,979 | | |
PRSUs(3) | 6/15/22 | — | | — | | — | | | 7,910 | | 15,819 | | 31,638 | | — | | — | | — | | 749,979 | | |
Annual Cash Incentive Plan(4) | — | — | | 275,000 | | 550,000 | | | — | | — | | — | | — | | — | | — | | — | | |
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1.The share-based awards reflected in this column were granted on June 15, 2022 and will vest in 1/3 installments on each of the first three anniversary dates following the grant date, subject to the NEO’s continued employment with the Company through the vesting date, unless the executive officer dies, becomes permanently disabled or is retirement eligible under the Incentive Plan.
2.The amounts reported in these columns reflect the aggregate grant date fair value computed in accordance with Accounting Standards Codification topic 718, “Stock Compensation,” as issued by the Financial Accounting Standards Board (disregarding any forfeiture assumptions). These values have been determined based on the fair market value on the date of grant for each award. The aggregate grant date fair value is the amount that the Company expects to expense for accounting purposes over the award’s vesting schedule and does not correspond to the actual value that the NEOs will realize from the award. The weighted average assumptions for share-based awards are set forth in Note 16 (Share-Based Compensation) to our audited financial statements included in our Annual Report on Form 10-K for Fiscal 2023. The value of the PRSUs included in the amount reported in this column is based on achieving target performance goals and represents 100% of the grant date fair value.
3.The PRSUs will vest after three years subject to attainment of pre-established three year performance goals and subject to the NEO’s continued employment with the Company through the vesting date, unless the executive officer dies, becomes permanently disabled or is retirement eligible under the Incentive Plan. The actual number of PRSUs earned at the end of the three year period ranges from 0% of the target number of shares originally awarded (for performance below established thresholds) to up to 200% of the target number of shares for maximum performance (interpolated based on actual level of attainment in accordance with the terms of our Incentive Plan).
4.Represents the range of possible cash payouts for Fiscal 2023 under the Cash Incentive Plan if performance metrics were attained at varying levels. If performance falls below the pre-established thresholds, the payout is $0. See “Compensation Discussion and Analysis—Fiscal 2023 Compensation—Incentive Compensation—Fiscal 2023 Annual Cash Incentive” for more information regarding cash incentive awards. Amounts actually earned for Fiscal 2023 are set forth in the Summary Compensation Table above.
EMPLOYMENT AGREEMENTS WITH OUR NAMED EXECUTIVE OFFICERS
John D. Idol
John D. Idol is employed pursuant to an employment agreement between the Company and him. Mr. Idol is not subject to a fixed term contract and his employment will continue pursuant to the employment agreement unless terminated by either party.
Pursuant to terms of his employment agreement, Mr. Idol serves as our Chairman and Chief Executive Officer, reporting to the Board of Directors. We must use best efforts to cause Mr. Idol to be appointed or elected to the position of Chairman of the Board. Upon termination of his employment for any reason, Mr. Idol will immediately resign from the Board and from other officer and director positions with the Company and its subsidiaries.
Mr. Idol is entitled to receive an annual base salary of at least $1.35 million. In addition, Mr. Idol is eligible to receive a cash incentive in accordance with, and subject to the terms and conditions of, our then existing Cash Incentive Plan which is a component of the Incentive Plan
The annual cash incentive payment is equal to a percentage of Mr. Idol’s then-current base salary with the incentive levels set at 0% for performance below established thresholds and 200% target – 400% maximum. Mr. Idol’s actual annual cash incentive will be interpolated based on the actual level of attainment with performance components, measures and target values established by the Compensation and Talent Committee. Except in limited circumstances, Mr. Idol must be employed by us on the date that the annual cash incentive is actually paid, which will be the same date that annual cash incentives are paid to our other senior executives that participate in the Cash Incentive Plan.
If the Compensation and Talent Committee determines that Mr. Idol was overpaid as a result of certain restatements of the reported financial or operating results of the Company due to material non-compliance with financial reporting requirements, then it may reduce the amount of the cash incentive, or require the executive to re-pay the overpaid portion of the cash incentive, as long as the determination as to the fact that a cash incentive has been overpaid is made before the end of the third fiscal year following the year for which the cash incentive performance criteria were inaccurate, provided that if steps have been taken within such period to restate the Company’s financial or operating results, such three year time period shall be extended until such restatement is completed.
Mr. Idol will not accrue any vacation but he is entitled to take unlimited vacation so long as the vacation time does not interfere with his ability to complete his obligations under his employment agreement. Mr. Idol is entitled to participate in all employee benefit plans and programs generally available to our senior executives, including, without limitation, health and 401(k) plans, deferred compensation plans and long-term equity incentive compensation plans. We pay the premiums, up to a maximum of $50,000 per annum in the aggregate, for Mr. Idol’s approximately $5.0 million whole life insurance and $500,000 term life insurance policy. We also provide Mr. Idol with an automobile and driver for transportation to and from our offices and for business purposes as provided for in his employment agreement, and Mr. Idol is entitled to use our corporate aircraft in accordance with his Aircraft Time Sharing Agreement.
Mr. Idol has also agreed that during the term of his employment agreement he will not engage in or carry on any “Competitive Business” (as defined in his employment agreement); provided that he may own 10% or less in a Competitive Business as a passive investor so long as he does not manage or exercise influence or control over such business.
Pursuant to his employment agreement, to the extent permitted by law and our by-laws or other governing documents, we will indemnify Mr. Idol with respect to any claims made against him as an officer, director or employee of the Company or any subsidiary, except for acts taken in bad faith or in breach of his duty of loyalty to the Company. During the term of his employment agreement and for as long thereafter as is practicable, we agreed that Mr. Idol will be covered under a directors and officers liability insurance policy with coverage limits in amounts no less than that which we maintained as of the date of his employment agreement.
Mr. Idol has agreed that all rights to our intellectual property are and will remain the sole and exclusive property of the Company and Mr. Idol remains obligated to maintain the confidentiality of our proprietary information. For two years after termination of his employment, Mr. Idol has agreed not to hire any person who was employed or retained by the Company or any of its affiliates within the one-year period immediately preceding such employment or retention.
Thomas J. Edwards, Jr.
Thomas J. Edwards, Jr. is employed as our Executive Vice President, Chief Financial Officer and Chief Operating Officer pursuant to an employment agreement between the Company and him. Mr. Edwards is not subject to a fixed term contract and his employment will continue pursuant to the employment agreement unless terminated by either party.
Mr. Edwards is entitled to receive a base salary of $800,000 per year. Mr. Edwards is eligible to receive an annual cash incentive based on a percentage of his then-current base salary (with the incentive levels set at 0% for below threshold performance –100% target – 200% maximum) interpolated based on actual level of attainment in accordance with the terms of our Cash Incentive Plan. Mr. Edwards is also able to participate in all of our other benefit plans and programs, including, without limitation, health and 401(k) plans, deferred compensation plans and long-term equity incentive compensation plans.
Mr. Edwards is obligated to maintain the confidentiality of our proprietary information and has agreed that all rights to our intellectual property are and will remain the sole and exclusive property of the Company. Mr. Edwards has also agreed not to hire, for a two-year period following the termination of his employment, any person who was employed or retained by the Company or any of its affiliates within the one-year period immediately preceding such employment or retention.
Jenna Hendricks
Jenna Hendricks is employed as our Senior Vice President, Chief People Officer pursuant to an employment agreement between her and the Company. Ms. Hendricks is not subject to a fixed term contract and her employment will continue pursuant to the employment agreement unless terminated by either party.
Ms. Hendricks receives a base salary of $500,000 per year. Ms. Hendricks is eligible to receive an annual cash incentive based on a percentage of her then-current base salary (with incentive levels set at 0% for below threshold performance – 50% target – 100% maximum) interpolated based on actual level of attainment in accordance with the terms of our Cash Incentive Plan. Ms. Hendricks is also able to participate in all of our other benefit plans and programs, including, without limitation, health and 401(k) plans, deferred compensation plans and long-term equity incentive compensation plans.
Ms. Hendricks receives an annual clothing allowance in the amount of $10,000 plus an additional clothing allowance of $15,000 for use at any time during the term.
Ms. Hendricks is obligated to maintain the confidentiality of our proprietary information and has agreed that all rights to our intellectual property are and will remain the sole and exclusive property of the Company. Ms. Hendricks has also agreed not to hire, for a two-year period following the termination of her employment, any person who was employed or retained by the Company or any of its affiliates within the one-year period immediately preceding such employment or retention.
Krista A. McDonough
Krista A. McDonough is employed as our Senior Vice President, General Counsel and Chief Sustainability Officer pursuant to an employment agreement between her and the Company. Ms. McDonough is not subject to a fixed term contract and her employment will continue pursuant to the employment agreement unless terminated by either party.
Ms. McDonough receives a base salary of $550,000 per year. Ms. McDonough is eligible to receive an annual cash incentive based on a percentage of her then-current base salary (with incentive levels set at 0% for below threshold performance – 50% target – 100% maximum) interpolated based on actual level of attainment in accordance with the terms of our Cash Incentive Plan. Ms. McDonough is also able to participate in all of our other benefit plans and programs, including, without limitation, health and 401(k) plans, deferred compensation plans and long-term equity incentive compensation plans.
Ms. McDonough is obligated to maintain the confidentiality of our proprietary information and has agreed that all rights to our intellectual property are and will remain the sole and exclusive property of the Company. Ms. McDonough has also agreed not to hire, for a two-year period following the termination of her employment, any person who was employed or retained by the Company or any of its affiliates within the one-year period immediately preceding such employment or retention.
Daniel T. Purefoy
Pursuant to an employment agreement, effective as of March 30, 2020, between the Company and Daniel T. Purefoy, Mr. Purefoy served as our Senior Vice President, Global Operations and Head of Diversity and Inclusion, until his departure on July 29, 2022.
Mr. Purefoy received a base salary of $400,000 per year while employed by us. Prior to his departure, Mr. Purefoy was also eligible to receive an annual cash incentive based on a percentage of his then-current base salary (with the incentive levels set at 0% for below threshold performance – 50% target – 100% maximum) interpolated based on actual level of attainment in accordance with the terms of our Cash Incentive Plan. Mr. Purefoy was also able to participate in all of our other benefit plans and programs, including, without limitation, health and 401(k) plans, deferred compensation plans and long-term equity incentive compensation plans.
Mr. Purefoy remains obligated to maintain confidentiality of our proprietary information and has agreed that all rights to our intellectual property are and will remain the sole and exclusive property of the Company. Mr. Purefoy has also agreed not to hire, for a two-year period following the termination of his employment, any person who was employed or retained by the Company or any of its affiliates within the one-year period immediately preceding such employment or retention.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
The following table sets forth unexercised and unvested share options and other share-based awards that were outstanding as of the end of Fiscal 2023 for each named executive officer:
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| Option Awards | | Share Awards | |
| Name | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | Option Exercise Price ($) | | Option
Expiration
Date | | Number of Shares or Units That Have Not Yet Vested (#) | | Market Value of Shares or Units of Shares That Have Not Vested ($)(1) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That have Not Vested (#)(2) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |
| John D. Idol | 14,503 | | | — | | | 49.88 | | | 6/15/2023 | | — | | | — | | | — | | | — | | |
| 61,249 | | | — | | | 67.52 | | | 6/15/2025 | | — | | | — | | | — | | | — | | |
| — | | | — | | | — | | | — | | 322,769(3) | | 15,170,143 | | | — | | | — | | |
| — | | | — | | | — | | | — | | — | | | — | | | 89,644 | | | 4,213,268 | | |
| Thomas J. Edwards, Jr. | 12,250 | | | — | | | 67.52 | | | 6/15/2025 | | — | | | — | | | — | | | — | | |
| — | | | — | | | — | | | — | | 103,046(3) | | 4,843,162 | | | — | | | — | | |
| — | | | — | | | — | | | — | | — | | | — | | | 31,639 | | | 1,487,033 | | |
| Jenna Hendricks | — | | | — | | | — | | | — | | 42,517(3) | | 1,998,299 | | | — | | | — | | |
| — | | | — | | | — | | | — | | — | | | — | | | 15,819 | | | 743,493 | | |
| Krista A. McDonough | 6,885 | | | — | | | 34.68 | | | 6/15/2024 | | — | | | — | | | — | | | — | | |
| 4,900 | | | — | | | 67.52 | | | 6/15/2025 | | — | | | — | | | — | | | — | | |
| — | | | — | | | — | | | — | | 57,344(3) | | 2,695,168 | | | — | | | — | | |
| — | | | — | | | — | | | — | | — | | | — | | | 15,819 | | | 743,493 | | |
Daniel T. Purefoy(4) | — | | | — | | | — | | | — | | — | | | — | | | — | | | — | | |
1.The aggregate market or payout value of unvested or unearned shares is based on $47.00, which is the closing price of the Company’s ordinary shares on the NYSE on March 31, 2023 (the last business day of Fiscal 2023).
2.Reflects unearned PRSUs that will vest after three years subject to attainment of pre-established three year performance goals and subject to the NEO’s continued employment with the Company through the vesting date, unless the executive officer dies, becomes permanently disabled or is retirement eligible under the Incentive Plan. The actual number of PRSUs earned at the end of the three year period ranges from 0% of the target number of shares originally awarded (for performance below established thresholds) to up to 200% of the target number of shares for maximum performance (interpolated based on actual level of attainment in accordance with the terms of our Incentive Plan). The number of unearned PRSUs reported in this column is based on achieving target performance goals, which represents 100% of the shares originally subject to the award.
3.Reflects unvested RSUs that will vest 1/3 each year over three years on each of the first three anniversaries of the date of grant, except for the awards granted to the NEOs on June 15, 2019, which vest in equal installments over four years on the anniversary of the date of grant, in each case, subject to the NEO’s continued employment with the Company through the vesting date, unless the executive officer dies, becomes permanently disabled or is retirement eligible under the Incentive Plan.
4.Mr. Purefoy’s last day of employment with the Company was on July 29, 2022. All of Mr. Purefoy’s unvested equity was forfeited as of that date.
Option Exercises and Shares Vested During Fiscal 2023
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| Option Awards | | Share Awards |
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) |
| John D. Idol | 3,803(1) | 10,192 | | | 371,942 | | 17,338,575 | |
| Thomas J. Edwards, Jr. | — | | — | | | 86,923 | | 4,036,144 |
| Jenna Hendricks | — | | — | | | 18,690 | | 882,881 | |
| Krista A. McDonough | — | | — | | | 54,935 | | 2,547,882 | |
| Daniel T. Purefoy | — | | — | | | 5,587 | | 261,320 | |
1.Reflects the exercise in June 2022 of options with a $47.10 exercise price granted in June 2015 that were scheduled to expire on June 15, 2022.
Fiscal 2023 Non-Qualified Deferred Compensation
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| Name | Executive Contributions ($) in Last FY(1) (2023) | Registrant Contributions ($) in Last FY(2) (2023) | Aggregate Earnings/(Losses) ($) in Last FY(3) (2023) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance ($) at Last FYE (2023)(4) |
| John D. Idol | — | | — | | — | | — | | — | |
| Thomas J. Edwards, Jr. | — | | — | | — | | — | | — | |
| Jenna Hendricks | 100,000 | | — | | (211) | | — | | 152,375 | |
| Krista A. McDonough | 55,000 | | — | | (10,325) | | — | | 173,059 |
| Daniel T. Purefoy | — | | — | | — | | — | | — | |
1.Amounts shown in this column represent elective salary and/or annual cash incentive deferrals made by NEOs into the Deferred Compensation Plan in Fiscal 2023. All contributions shown are also reported as “Salary” and/or “Non-Equity Incentive Plan Compensation,” as applicable, for Fiscal 2023 in the Summary Compensation Table.
2.In Fiscal 2023, the Company did not make any matching contributions to the accounts of employees who participated in the Deferred Compensation Plan.
3.Amounts shown in this column represent total investment earnings (losses) under the Deferred Compensation Plan. The Deferred Compensation Plan does not pay above-market or preferential earnings on compensation that is deferred, and the amounts shown in this column are not reported as compensation in the Summary Compensation Table.
4.The aggregate balance in this column includes contributions, net of withdrawals and distributions, and total investment earnings (losses) for each NEO under the Deferred Compensation Plan in Fiscal 2023. Amounts shown in this column include amounts that were reported as compensation in the Summary Compensation Table to the extent that such amounts were contributed by the executive or the Company but not to the extent that such amounts represent earnings (losses). See Note (3) above.
See “Compensation Discussion and Analysis—Fiscal 2023 Compensation—Other Compensation” for a description of the Deferred Compensation Plan.
Potential Payments Upon Termination of Employment or Change in Control
Severance Benefits
John D. Idol
Mr. Idol’s employment agreement continues until it is terminated in accordance with its terms. Mr. Idol agreed not to terminate his employment for any reason (other than “Good Reason” (as defined in his employment agreement)) without giving the Company at least six months’ notice.
Mr. Idol’s employment agreement will terminate upon Mr. Idol’s death or “Total Disability” (as defined in his employment agreement) or with Good Reason, subject to certain notice and cure rights. We may terminate Mr. Idol’s employment for Cause (as defined in his employment agreement) upon 10 days’ advance written notice, subject to Mr. Idol having certain rights to meet with the Board, and a majority of the Board must approve his dismissal.
If Mr. Idol’s employment is terminated by us without Cause or by him for Good Reason, he will be entitled to receive a pro rata portion of his annual cash incentive (as described under “—Employment Agreements with Our Named Executive Officers—John D. Idol”) that would have been payable in respect of the fiscal year, or part fiscal year, as of the date of termination plus severance equal to two times (i) the sum of his then-current base salary and (ii) the annual cash incentive paid or payable to him with respect to the Company’s last full fiscal year, payable in a single lump sum within 30 days following termination as well as payment of any accrued benefits including earned but unpaid base salary, cash incentives and reimbursement of any reimbursable expenses incurred prior to the termination date. If Mr. Idol dies or has a Total Disability, in addition to the accrued benefits referenced above, Mr. Idol (or his estate, as applicable) is entitled to a pro rata portion of his cash incentive that would have been payable to Mr. Idol in respect of such fiscal year as of the date of death or Total Disability. He would also be entitled to a benefit under his whole life insurance policy (currently valued at approximately $5.0 million) and his term life insurance policy (currently valued at approximately $500,000) upon termination due to death. In the event Mr. Idol is terminated for Cause, he is not entitled to receive any compensation or benefits other than for accrued benefits (including base salary earned but not yet paid, vested equity, his annual cash incentive with respect to any performance period that has been completed prior to the termination date, and such other accrued obligations as defined in his employment agreement).
“Good Reason” is defined in Mr. Idol’s employment agreement as:
•the assignment of duties or responsibilities that are inconsistent in any material respect with the scope of the duties or responsibilities of his title or position,
•the Company’s failure to perform substantially any material term of his employment agreement and such failure, if curable, is not cured within 60 days after the Company receives notice of the breach,
•his office is relocated more than 50 miles from his then-current office,
•the employment agreement is not assumed by any successor-entity to the Company following a change in control (as defined in the Incentive Plan),
•his duties or responsibilities are significantly reduced, except with respect to any corporate action initiated or recommended by him and approved by the Board, including any succession planning initiated and recommended by him,
•he is involuntarily removed from the Board (other than in connection with a termination for Cause, voluntary termination without Good Reason, death or Total Disability), or
•subject to the terms of the employment agreement, the Board is managing the day-to-day operations of the Company and, after receipt of written notice from him and sufficient time to cease such involvement, the Board continues to do so.
“Cause” is defined in Mr. Idol’s employment agreement as Mr. Idol’s:
•gross negligence, willful misconduct or dishonesty in performing his duties,
•conviction of a felony (other than a felony involving a traffic violation),
•commission of a felony involving fraud or other business crime against the Company or any of its subsidiaries, or
•breach of the no-hire, confidentiality or non-compete covenants contained in his employment agreement if such breach, if curable, is not cured within 30 days after written notice of such breach.
Thomas J. Edwards, Jr.
Mr. Edwards’ employment agreement continues until it is terminated in accordance with its terms. Mr. Edwards has agreed not to terminate his employment for any reason (other than “Good Reason” (as defined in his employment agreement)) without giving the Company at least 90 days’ notice.
If Mr. Edwards’ employment is terminated by us without “Cause” (as defined in his employment agreement) or by Mr. Edwards for “Good Reason” (as defined in his employment agreement), he will be entitled to 12-months of base salary continuation at his then-current base salary payable in equal installments over such one-year period consistent with our payroll practice, continuation of medical, dental and vision benefits for that same period, and his prorated annual cash incentive for the fiscal year in which the termination date occurs, subject to his execution of a release of claims.
“Good Reason” is defined in Mr. Edwards’ employment agreement as:
•a significant reduction of his duties or responsibilities relating to his position except with respect to any action initiated or recommended by him and approved by the Company,
•the assignment to him of duties or responsibilities that are inconsistent in any material respect with the scope of the duties or responsibilities of his position,
•a reduction in base salary,
•his office is relocated more than 50 miles from its location immediately prior to such relocation, or
•a material breach by the Company of its obligations under his employment agreement, in each case, that the Company has failed to cure (as determined by the Company acting in good faith) within 30 days following notice.
“Cause” is defined in Mr. Edwards’ employment agreement as Mr. Edwards’:
•gross negligence, willful misconduct or dishonesty in performing his duties,
•conviction of a felony (other than a felony involving a traffic violation),
•commission of a felony involving a fraud or other business crime against the Company, or
•material breach of the confidentiality, non-solicit and non-disparagement covenants contained his employment agreement; provided that, if such breach is curable, Mr. Edwards shall have an opportunity to correct such breach within 30 days following notice.
Jenna Hendricks
Ms. Hendricks employment agreement continues until it is terminated in accordance with its terms. Ms. Hendricks has agreed not to terminate her employment for any reason (other than “Good Reason” (as defined in her employment agreement)) without giving the Company at least 90 days’ notice.
If Ms. Hendricks’ employment is terminated by us without “Cause” (as defined in her employment agreement) or by Ms. Hendricks for “Good Reason” (as defined in her employment agreement), she will be entitled to 12-months of base salary continuation at her then-current base salary payable in equal installments over such one-year period consistent with our payroll practice, continuation of medical, dental and vision benefits for that same period, and her prorated annual cash incentive for the fiscal year in which the termination date occurs, subject to her execution of a release of claims.
“Good Reason” is defined in Ms. Hendricks’ employment agreement as:
•a significant reduction of her duties or responsibilities relating to her position except with respect to any action initiated or recommended by her and approved by the Company,
•the assignment to her of duties or responsibilities that are inconsistent in any material respect with the scope of the duties or responsibilities of her position,
•a reduction in base salary,
•her office is relocated more than 50 miles from its location immediately prior to such relocation, or
•a material breach by the Company of its obligations under her employment agreement, in each case, that the Company has failed to cure (as determined by the Company acting in good faith) within 30 days following notice.
“Cause” is defined in Ms. Hendricks’ employment agreement as Ms. Hendricks’:
•gross negligence, willful misconduct or dishonesty in performing her duties,
•conviction of a felony (other than a felony involving a traffic violation),
•commission of a felony involving a fraud or other business crime against the Company, or
•material breach of the confidentiality, non-solicit and non-disparagement covenants contained her employment agreement; provided that, if such breach is curable, Ms. Hendricks shall have an opportunity to correct such breach within 30 days following notice.
Krista A. McDonough
Ms. McDonough’s employment agreement continues until it is terminated in accordance with its terms. Ms. McDonough has agreed not to terminate her employment for any reason (other than “Good Reason” (as defined in her employment agreement)) without giving the Company at least 90 days’ notice.
If Ms. McDonough’s employment is terminated by us without “Cause” (as defined in her employment agreement) or by Ms. McDonough for “Good Reason” (as defined in her employment agreement), she will be entitled to 12-months of base salary continuation at her then-current base salary payable in equal installments over such one-year period consistent with our payroll practice, continuation of medical, dental and vision benefits for that same period, and her prorated annual cash incentive for the fiscal year in which the termination date occurs, subject to her execution of a release of claims.
“Good Reason” is defined in Ms. McDonough’s employment agreement as:
•a significant reduction of her duties or responsibilities relating to her position except with respect to any action initiated or recommended by her and approved by the Company,
•the assignment to her of duties or responsibilities that are inconsistent in any material respect with the scope of the duties or responsibilities of her position,
•a reduction in base salary,
•her office is relocated more than 50 miles from its location immediately prior to such relocation, or
•a material breach by the Company of its obligations under her employment agreement, in each case, that the Company has failed to cure (as determined by the Company acting in good faith) within 30 days following notice.
“Cause” is defined in Ms. McDonough’s employment agreement as Ms. McDonough’s:
•gross negligence, willful misconduct or dishonesty in performing her duties,
•conviction of a felony (other than a felony involving a traffic violation),
•commission of a felony involving a fraud or other business crime against the Company, or
•material breach of the confidentiality, non-solicit and non-disparagement covenants contained her employment agreement; provided that, if such breach is curable, Ms. McDonough shall have an opportunity to correct such breach within 30 days following notice.
Change in Control Benefits
We do not provide our NEOs with any single-trigger change in control payments or benefits. If a change in control were to have occurred on April 1, 2023, and none of our NEOs had a qualifying termination event, there would have been no payments due to our named executive officers under their respective agreements or the Incentive Plan (assuming assumption of the agreements and awards (or substitution of the awards on a substantially equivalent basis) by the successor-entity to the Company following a change in control).
Pursuant to his employment agreement, Mr. Idol may resign for “Good Reason” if his employment agreement is not assumed by the successor-entity to the Company following a change in control and he would be entitled to the the severance benefits described under “—Severance Benefits—John D. Idol” above.
Thomas J. Edwards, Jr., Jenna Hendricks and Krista A. McDonough (the “CIC Executive Officers”) are entitled to severance protections pursuant to their respective CIC Agreements. The CIC Agreements provide for an initial two-year term that will renew automatically for additional years commencing on the first anniversary of the effective date and each annual anniversary thereafter, unless notice of nonrenewal is provided. The CIC Agreements become effective on a change in control of the Company and remain in effect for a two-year protected period thereafter. During such two-year period, each of the CIC Executives would generally be entitled to compensation and benefits consistent with those applicable prior to the change in control, and if the CIC Executive’s employment is terminated by the Company without “Cause” (as defined in the CIC Agreement)(and other than by reason of death or disability) or by the CIC Executive for “Good Reason” (as defined in the CIC Agreement), the CIC Executive would be entitled to receive the following payments and benefits, subject to an effective release of claims against the Company and its affiliates: (i) an amount equal to two-times the sum of such CIC Executive’s annual base salary and target annual cash incentive; (ii) a prorated target annual cash incentive for the portion of the Company’s fiscal year elapsed prior to the date of termination; (iii) a payment equal to the cost of the monthly COBRA premiums for group health care plan coverage for a period of 24 months; and (iv) outplacement services up to a maximum cost of $25,000. If the CIC Executive’s employment is terminated during the protected period following a change in control due to death or disability, the CIC Executive would not be entitled to the benefits described above, but would be entitled to receive a prorated annual cash incentive based on such CIC Executive’s target annual cash incentive opportunity and death or disability benefits not less than those provided prior to the change in control. The payments and benefits under the CIC Agreements will be reduced to the extent that they would be subject to an excise tax under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, unless the CIC Executive would be better off on an after-tax basis receiving all such payments and benefits and paying his or her own excise tax. The CIC Agreements do not provide for an excise tax gross-up and include perpetual confidentiality and non-disparagement covenants, and non-solicitation covenants that apply while the CIC Executive is employed and for two years thereafter.
“Good Reason” is defined in the CIC Agreements as actions taken by the Company resulting in a material negative change in the employment relationship which includes:
•the assignment to CIC Executive of duties or responsibilities that are inconsistent in any material respect with CIC Executive’s position, a material diminution in CIC Executive’s position, or a material diminution in the budget over which CIC Executive retains authority,
•a material diminution in the duties of the person to whom CIC Executive is required to report, including a requirement that CIC Executive report to an officer other than the Chief Executive Officer of the Company (or, if the Company is not the ultimate parent entity of the Company and is not publicly traded, the Chief Executive Officer of the ultimate parent of the Company),
•failure to provide, in all material respects, any elements of compensation and benefits required to be provided to CIC Executive, including any decrease in annual base salary,
•requiring CIC Executive to be based at any office or location 50 miles or more from CIC Executive’s then-current location, or
•any other action or inaction that constitutes a material breach by the Company of the CIC Agreement, including any failure by the Company to require any successor to assume the CIC Agreement.
“Cause” is defined in the CIC Agreements in a manner generally consistent with the definition of Cause in each CIC Executive’s employment agreement.
Under the Company’s Incentive Plan, there is no single-trigger accelerated vesting of any awards issued, unless the successor company does not assume (or substitute on a substantially equivalent basis) the awards. In the event of a change in control of the Company, with respect to each outstanding award under the Incentive Plan, such outstanding award will, except as otherwise set forth in the Incentive Plan, continue in effect, or be assumed or an equivalent award substituted by a successor company, and the portion of any such award subject to performance-based vesting (including, without limitation, any PRSUs) will have any performance goals or other performance-based conditions deemed to be achieved at the target level of performance and any performance period deemed to have expired, but will continue to be subject to time-based vesting in accordance with the same time-based vesting schedule that applied to the award immediately prior to the change in control without any performance-based condition. Except as otherwise provided in an individual award agreement, in the event of a change in control in which the successor assumes, substitutes or continues an award, if executive’s employment is terminated by us without “Cause” or by the executive for “Good Reason” (each as defined in the applicable award agreement which refers to the definition in the Company's employment or similar agreement with executive) within 24 months following a change in control, all unvested share options will immediately vest and become fully exercisable for a two-year period (or, if earlier, the expiration date set forth in applicable award agreement) and all unvested RSUs will fully vest and all restrictions, limitations and conditions will lapse.
A “change in control” is generally defined in the CIC Agreements and Incentive Plan as:
•during any 24-month period, the individuals serving on the Board cease to comprise a majority of the Board,
•the acquisition by a third party of securities representing 30% or more of the voting power of the Company,
•the consummation of a merger, consolidation or similar corporate transaction that requires approval of the Company’s shareholders, unless: (i) more than 50% of the voting power is retained by the holders of the voting securities immediately prior to the transaction, (ii) no person acquires securities of the Company representing more than 30% of the total voting power of the Company, and (iii) at least a majority of the directors on the Board were the same as those serving immediately prior to the transaction, or
•the shareholders of the Company approve a complete liquidation of the Company or sale of substantially all of the assets of the Company.
No named executive officer has any right to receive a “gross up” for any excise tax imposed by Section 4999 of the Code, or any other U.S. federal, state or local income tax.
Treatment of Long-Term Equity Incentives Upon Termination or Change in Control
In general, unless stated otherwise in an employment agreement, the share options and other share-based awards granted to our NEOs under the Incentive Plan would have been treated as follows in the event of termination or change in control in Fiscal 2023:
| | | | | | | | |
| Reason for Termination | | Impact on Equity Awards |
| Voluntary by Executive (No Grounds for Company to Terminate for Cause) | | •Unvested share options, RSUs and PRSUs are forfeited •Vested share options are exercisable for 30 days following termination |
| By Company without Cause | | •Unvested share options, RSUs and PRSUs are forfeited •Vested share options are exercisable for 90 days following termination |
| By Company for Cause | | •Vested but unexercised share options and unvested share options are forfeited and unvested RSUs and PRSUs are forfeited |
| Death or Disability | | •All unvested share options and RSUs will vest in full and unvested PRSUs will vest at target •Vested share options are exercisable by executive or beneficiary (as applicable) for one year following death or disability (or, if earlier, the expiration date set forth in the applicable award agreement) |
| Retirement (at least age 60 plus at least 10 years of service) | | •Unvested share options and RSUs will continue to vest on the applicable vesting schedule •Unvested PRSUs will vest at the end of the performance period based on actual performance on a pro rata basis based on the number of completed months worked during the performance period •Vested share options are exercisable for four years following retirement (or, if earlier, the expiration date set forth in the applicable award agreement) |
| Termination on (or within 24 months of) Change in Control by Company without Cause or by Executive with Good Reason | | •Vesting of unvested share options will be accelerated and remain fully exercisable for a two-year period (or, if earlier, the expiration date set forth in the applicable award agreement) •Unvested RSUs will fully vest and all restrictions, limitations and conditions will lapse |
| Change in Control without Termination | | •There is no single-trigger accelerated vesting of any awards issued to date, unless the successor corporation does not assume (or substitute on a substantially equivalent basis) the awards •Unvested PRSUs will vest at target and any performance conditions and performance periods will lapse, but the awards will continue to be subject to time-based vesting in accordance with the same time-based vesting schedule that applied to the award immediately prior to the change in control |
Potential Payments Upon Termination of Employment and Change in Control Table
The Potential Payments Upon Termination of Employment and Change in Control Tables below set forth the estimated potential payments and benefits that would be payable to each of the named executive officers that were employed on the last day of Fiscal 2023 in the event of a termination of employment or change in control of the Company as of April 1, 2023 (the last day of Fiscal 2023). Because termination of employment and/or change in control is assumed to have occurred on the last day of Fiscal 2023, the amounts presented in the tables below assume all accrued obligations (including base salary earned but not yet paid, vested equity, any annual cash incentive with respect to any performance period that has been completed prior to the termination date, and any other accrued obligations as defined in an executive’s employment agreement) have been paid as of the termination of employment and/or change in control date. Regardless of the reason for a named executive officer’s termination of employment, he or she may be entitled to receive certain other amounts or accrued benefits, including any vested balance in his or her 401(k) plan or deferred compensation plan. These estimates are merely illustrative of the impact of hypothetical events, based on the terms of arrangements then in effect. The amounts that would actually be paid or payable to our NEOs upon an actual termination of employment and/or change in control will depend on the circumstances and timing of such termination or change in control. Mr. Purefoy has been omitted from these tables because he was not employed by us as of the last day of Fiscal 2023.
| | | | | | | | | | | | | | | | | | | | | | | |
| John Idol | Voluntary Termination ($) | Retirement ($) | Disability ($) | Death ($) | Cause ($) | By the Company Without Cause or by Executive with Good Reason ($) | By the Company Without Cause or by Executive with Good Reason on or within 24 months of Change in Control ($) |
Cash Severance(1) | — | | — | | — | | — | | — | | 12,420,000 | | 12,420,000 | |
Annual Incentive Compensation(2) | — | | — | | 4,320,000 | | 4,320,000 | | — | | 4,320,000 | | 4,320,000 | |
Benefits(3) | — | | — | | — | | 5,500,000 | | — | | — | | — | |
Vesting of Annual Long-Term Incentives(4) | 19,383,411 | | 19,383,411 | | 19,383,411 | | 19,383,411 | | — | | 19,383,411 | | 19,383,411 | |
| Total | 19,383,411 | | 19,383,411 | | 23,703,411 | | 29,203,411 | | 0 | 36,123,411 | | 36,123,411 | |
| | | | | | | |
| Thomas J. Edwards, Jr. | Voluntary Termination ($) | Retirement ($) | Disability ($)(9) | Death ($)(9) | Cause ($) | By the Company Without Cause or by Executive with Good Reason ($) | By the Company Without Cause or by Executive with Good Reason on or within 24 months of Change in Control ($) |
Cash Severance(5) | — | | — | | — | | — | | — | | 800,000 | | 3,200,000 | |
Annual Incentive Compensation(6) | — | | — | | — | | — | | — | | 1,280,000 | | 1,280,000 | |
Benefits(7) | — | | — | | — | | — | | — | | 13,765 | | 52,529 | |
Vesting of Annual Long-Term Incentives(8) | — | | — | | 6,330,195 | | 6,330,195 | | — | | — | | 6,330,195 | |
| Total | 0 | 0 | 6,330,195 | 6,330,195 | 0 | 2,093,765 | 10,862,724 |
| | | | | | | |
| Jenna Hendricks | Voluntary Termination ($) | Retirement ($) | Disability ($)(9) | Death ($)(9) | Cause ($) | By the Company Without Cause or by Executive with Good Reason ($) | By the Company Without Cause or by Executive with Good Reason on or within 24 months of Change in Control ($) |
Cash Severance(5) | — | | — | | — | | — | | — | | 500,000 | | 1,500,000 | |
Annual Incentive Compensation(6) | — | | — | | — | | — | | — | | 400,000 | | 400,000 | |
Benefits(7) | — | | — | | — | | — | | — | | 579 | | 25,579 | |
Vesting of Annual Long-Term Incentives(8) | — | | — | | 2,741,792 | | 2,741,792 | | — | | 0 | | 2,741,792 | |
| Total | 0 | | 0 | | 2,741,792 | | 2,741,792 | | 0 | 900,579 | | 4,667,371 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Krista A. McDonough | Voluntary Termination ($) | Retirement ($) | Disability ($)(9) | Death ($)(9) | Cause ($) | By the Company Without Cause or by Executive with Good Reason ($) | By the Company Without Cause or by Executive with Good Reason on or within 24 months of Change in Control ($) |
Cash Severance(5) | — | | — | | — | | — | | — | | 550,000 | | 1,650,000 | |
Annual Incentive Compensation(6) | — | | — | | — | | — | | — | | 440,000 | | 440,000 | |
Benefits(7) | — | | — | | — | | — | | — | | 20,823 | | 45,823 | |
Vesting of Annual Long-Term Incentives(8) | — | | — | | 3,438,661 | | 3,438,661 | | — | | — | | 3,438,661 | |
| Total | 0 | 0 | 3,438,661 | | 3,438,661 | | 0 | 1,010,823 | | 5,574,484 | |
1.Pursuant to the terms of Mr. Idol’s employment agreement, reflects severance pay equal to two times the sum of: (i) Mr. Idol's base salary as in effect on the last day of Fiscal 2023 and (ii) the annual cash incentive paid to him with respect to the Company’s last full fiscal year ended prior to the termination date (Fiscal 2022), payable in a single lump sum within 30 days following the date of termination. Because termination is assumed to have occurred on the last day of Fiscal 2023, the amounts presented in this row assume all accrued obligations under Mr. Idol’s employment agreement have been paid.
2.Represents payment of the annual cash incentive for Fiscal 2023 which executive is entitled to pursuant to his employment agreement in the event of death or “Total Disability” or upon a termination by the Company without “Cause” or by Mr. Idol for “Good Reason.” Because termination is assumed to have occurred on the last day of Fiscal 2023, the amounts presented in this row assume all accrued obligations with respect to any cash incentive payment for a completed fiscal period which may be due and owing to Mr. Idol under other termination scenarios under his employment agreement have been paid.
3.Mr. Idol is entitled to a death benefit of $5.0 million and $500,000 under his whole life insurance policy and term life insurance policy, respectively.
4.Excludes awards that are already vested as of April 1, 2023. Mr. Idol is retirement eligible under the Incentive Plan and the amount in this row represents the value associated with the acceleration or continuation (as the case may be) of the vesting of equity awards pursuant to the terms of the Incentive Plan, using $47.00 per share, which is the closing price of the Company’s ordinary shares on the NYSE on March 31, 2023 (the last business day of Fiscal 2023).
5.Pursuant to the terms of executive’s employment agreement, reflects severance pay equal to 12 months’ of executive’s base salary as in effect on the last day of Fiscal 2023 payable in equal installments over a one-year period consistent with our payroll practices.
6.Represents payment of the annual cash incentive for Fiscal 2023 which executive is entitled to pursuant to his or her employment agreement upon a termination by the Company without “Cause” or by executive for “Good Reason.”
7.Represents the cost of continuation of medical, dental, and vision benefits for executive for one year, or in the case of a termination by the Company without “Cause” or by executive for “Good Reason” within 24 months following a change of control, the cost of monthly COBRA premiums for group health care plan coverage for 24 months. Assumes costs will be equal to our cost for equivalent benefits in Fiscal 2023. These costs may change annually. Also includes $25,000 for outplacement services if executive is terminated by the Company without “Cause” or by executive for “Good Reason” within 24 months following a change of control.
8.Excludes awards that are already vested as of April 1, 2023. Represents the value of accelerated vesting for awards that will become fully vested and exercisable upon death or disability or a termination by the Company without “Cause” or by the NEO for “Good Reason” within 24 months following a change in control, pursuant to the terms of the Incentive Plan, using $47.00 per share, which is the closing price of the Company’s ordinary shares on the NYSE on March 31, 2023 (the last business day of Fiscal 2023).
9.Assumes termination due to death or disability occurs prior to any change in control. Pursuant to the CIC Agreements, if executive’s employment is terminated within two years following a change in control due to death or disability, executive would not be entitled to payment for medical, dental and vision benefits, but would be entitled to receive a prorated annual cash incentive based on such executive’s target annual cash incentive opportunity and death and disability benefits not less than those provided prior to the change in control.
We are a global fashion luxury group operating in three principal geographic markets: the Americas (including North America, Latin America and the Caribbean), Europe and Asia. Presented below is the ratio of the annual total compensation paid to John D. Idol, our Chief Executive Officer, in Fiscal 2023 to the annual total compensation of our median employee, excluding Mr. Idol’s compensation. This ratio is a reasonable estimate calculated in compliance with Item 402(u) of Regulation S-K of the Securities Act.
Methodology
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:
•We selected February 1, 2023 as the date on which to determine our median employee.
•As of the determination date, we employed approximately 14,732 employees, consisting of approximately 10,661 full-time employees and approximately 4,071 part-time employees. Out of the total employee population as of the determination date, approximately 11,351 were engaged in retail selling or administrative positions.
•We relied on the de minimis exemption provided for under the pay ratio disclosure rules which permit us to exclude non-U.S. employees constituting less than 5% of the total employee population from the median employee calculation.
◦We excluded 420 employees (representing 2.85% of our total employee population, excluding the CEO, as of February 1, 2023) from 16 countries as follows: 34 employees in Sweden, 48 employees in Ireland, 45 employees in Malaysia, 7 employees in Lithuania, 32 employees in Hungary, 154 employees in Taiwan, 54 employees in Poland, 9 employees in Latvia, 27 employees in Czechia and 10 employees in Romania.
•We analyzed the actual total earnings compiled from our payroll records for the one-year period ending December 31, 2022 to determine the median employee. Actual earnings included base pay, overtime compensation, bonuses and other incentive pay (including commissions, fringe benefits and 401(k) match).
◦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 New York City.
◦For employees in foreign jurisdictions, we converted amounts paid in local currencies to U.S. dollars using the exchange rate as of February 1, 2023.
Calculation
•We determined that our median employee was a part-time, hourly retail sales assistant located in the United States.
•The estimated annual total compensation for our median employee was $28,846.
•Fiscal 2023 annual total compensation for our Chief Executive Officer as set forth in the Summary Compensation Table was $14,331,813.
•The estimated ratio of our Chief Executive Officer’s annual total compensation to our median employee’s total compensation for Fiscal 2023 was 497 to 1.
In accordance with SEC rules, the following table sets forth information with respect to how compensation actually paid to our NEOs aligns with company performance. “Compensation actually paid” (or CAP) is an SEC-defined term that does not necessarily reflect the amounts ultimately realized by the NEOs or how the Compensation and Talent Committee views the link between company performance and NEO compensation. 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.” In addition, a significant portion of compensation actually paid relates to changes in fair value of unvested equity awards over the course of each year. Unvested equity awards remain subject to risk from forfeiture and vesting conditions and possible future declines in value based on changes in the price of our ordinary shares. The ultimate values actually realized by our NEOs from unvested equity awards cannot be determined until the awards vest.
The following table provides information regarding compensation actually paid to our Chief Executive Officer, also referred to as our Principal Executive Officer, or PEO, and the other NEOs for each year from Fiscal 2021 to 2023, compared to our total shareholder return (TSR) and our peer group TSR from March 29, 2020 through March 28, 2021 (Fiscal 2021), March 29, 2021 through April 2, 2022 (Fiscal 2022), and April 3, 2022 through April 1, 2023 (Fiscal 2023), as well our Net Income and Adjusted Free Cash Flow for the applicable fiscal year.