UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Soliciting Material Pursuant to §240.14a-12 |
The Children’s Place, Inc. |
(Name of Registrant as Specified In Its Charter) |
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May 6, 2024
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 2024 Annual Meeting of Shareholders
(the “Annual Meeting”) of The Children’s Place, Inc. (referred to in this Proxy Statement as “we”,
“The Children’s Place” or the “Company”) will be held at 500 Plaza Drive, Secaucus, New Jersey on
Wednesday, May 22, 2024, at 8:30 a.m. (Eastern), for the following purposes:
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To elect six members (the “Directors”) of the Board of Directors (the “Board”),
each to serve for a one-year term; |
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To ratify the selection of Ernst & Young LLP (“EY”) as the Company’s independent registered
public accounting firm for fiscal 2024; and |
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To conduct an advisory vote to approve the compensation (“Say-on-Pay”) of the Company’s named executive
officers (the “NEOs”). |
Shareholders of record at the close of
business on April 10, 2024 (the “Record Date”) are entitled to vote at the Annual Meeting.
Your vote is important. We encourage
you to vote by proxy, even if you plan to attend the Annual Meeting. You may vote your proxy via the internet or by telephone
by following the instructions included on your proxy card. You may also vote by mail by signing, dating and returning your proxy
card in the envelope provided. Voting now will not limit your right to change your vote and/or to attend the Annual Meeting.
By order of the Board of Directors,
Jared E. Shure
Senior Vice President, General Counsel and Corporate Secretary
The Children’s Place, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094
If you have any questions or require any
assistance with voting your shares, please contact:
MACKENZIE PARTNERS, INC.
1407 Broadway, 27th Floor
New York, New York 10018
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
Email: proxy@mackenziepartners.com
TABLE OF CONTENTS
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2024 PROXY STATEMENT
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I |
PROXY SUMMARY
The Children’s Place is sending
you this Proxy Statement in connection with the solicitation by the Board of proxies to be voted at the Annual Meeting. The below
summary highlights key information contained in this Proxy Statement. As it is only a summary, please review the entire Proxy
Statement and the accompanying Annual Report before you vote.
Summary of Shareholder Voting Matters
At our Annual Meeting at 500 Plaza Drive, Secaucus, New Jersey
on Wednesday, May 22, 2024, at 8:30 a.m. (Eastern), shareholders are being asked to vote on the following matters:
Proposal |
Board Vote
Recommendation |
Page
Reference |
1. Election of Six Members of the Board of Directors |
FOR each Nominee |
57 |
2. Ratification of Selection of Independent Registered Public
Accounting Firm |
FOR |
58 |
3. Say-on-Pay – Advisory Vote on NEO Compensation |
FOR |
60 |
Fiscal 2023 Overview
During fiscal 2023, the Company realized
continued benefits from its structural transformation to a digital first retailer. Despite persisting challenges in the macro-economic
environment, the Company’s focus, diligence, consumer-centric marketing and digital investments enabled it to accelerate
its digital transformation and fleet optimization strategies, resulting in expanded digital penetration and customer acquisition.
The Company’s accelerated digital transformation and fleet optimization strategies have positioned the Company to operate
with less resources, including less stores, less inventory, less people, and less expense. These strategies allow us to better
service customers online, where they prefer to shop, which we believe will drive more consistent and sustainable results over
time.
Fiscal 2023 Highlights:
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Made progress driving digital sales and traffic, despite the difficult consumer environment, resulting
in digital sales representing an industry leading 54% of net retail sales in fiscal 2023. |
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Continued to execute a complementary multi-brand marketing strategy, with each brand (The Children’s Place, Gymboree,
Sugar & Jade and PJ Place) strategically positioned to target an underdeveloped or untapped market share opportunity. |
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Expanded wholesale channel strategy, centered around the Company’s strong and growing relationship with Amazon. |
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Accelerated inventory reduction and liquidation efforts, ending the year with lower levels of inventory. |
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Closed 90 under-performing stores in fiscal 2023. |
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Published a comprehensive Environment, Social & Governance (“ESG”) Report which details the Company’s
strategic approach to ESG. |
Fiscal 2024 Key Events
Following the end of fiscal 2023, the
Company made several public disclosures, including the announcement of the following key events:
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On February 9, 2024, the Company announced that it had been working to improve its liquidity position
and strengthen its balance sheet to best position the Company for the future. The Company also announced that it was working
with its advisors (including Centerview Partners), lenders and potential lenders to obtain new financing necessary to support
ongoing operations, and considering strategic alternatives in the event that the Company was unable to consummate new financing. |
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2024 PROXY STATEMENT
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PROXY SUMMARY
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On February 14, 2024, the Company received correspondence from Mithaq Capital SPC (“Mithaq”)
notifying the Company that it acquired approximately 54% of the Company’s outstanding shares of common stock, par value
$0.10 per share (the “Common Stock”) and the Company stated that it would accept Mithaq’s request to enter
into discussions regarding the provision of financing to assist with the Company’s liquidity needs. |
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On February 16, 2024, the Company announced its entry into a non-binding term sheet, dated February 15, 2024, with 1903P
Loan Agent, LLC (“Gordon Brothers”), as Lender, Administrative Agent and Collateral Agent, (the “Term Sheet”),
for a $130 million term loan (the “Proposed Term Loan”). |
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On February 29, 2024, the Company entered into an interest-free unsecured promissory note with Mithaq, providing for up
to $78.6 million in term loans, consisting of (a) an initial term loan in an aggregate principal amount of $30.0 million (the
“Initial Term Loan”) and (b) a delayed draw term loan commitment of $48.6 million (the “Delayed Draw Term
Loan;” and together with the Initial Term Loan, collectively, the “Mithaq Term Loans”). On February 29,
2024, the Company received the proceeds of the Initial Term Loan, that were used to, among other things, support the Company’s
operations, including payments to vendors and service providers to address overdue accounts payable |
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On February 29, 2024, the Company and Mithaq also entered into a letter agreement (the “Letter Agreement”)
for purposes of, among other things, ensuring an orderly transition of the governance of the Company following Mithaq’s
acquisition of over 50% of the outstanding shares of Common Stock of the Company, including the continued presence of certain
non-Mithaq nominated members on the Board during a transitional period. The Letter Agreement also required the Company to
use reasonable best efforts to commence and complete a registered rights offering of up to approximately $90 million by distributing
transferrable subscription rights to the stockholders of the Company at the applicable record date to purchase shares of common
stock of the Company. |
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On February 29, 2024, the Company announced that four persons nominated by Mithaq – Turki Saleh A. AlRajhi, Muhammad
Asif Seemab, Muhammad Umair and Hussan Arshad – had been appointed to the Board effective February 29, 2024, in accordance
with the Letter Agreement. The Company also announced that, concurrently with the execution of the Letter Agreement, Elizabeth
Boland, Alicia Enciso, Katherine Kountze and Wesley S. McDonald resigned from the Board effective February 29, 2024. |
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On March 11, 2024, the Company announced that Mithaq provided the Delayed Draw Term Loan to the Company on March 8, 2024.
The net proceeds from the Delayed Draw Term Loan were used to, among other things, support the Company’s operations,
including payments to vendors and service providers to address overdue accounts payable. With the funding of the Delayed Draw
Term Loan, the resignations from the Board of Norman Matthews, John E. Bachman, Debby Reiner and Michael Shaffer became effective
and the size of the Board was reduced to six. In addition, Mr. John A. Frascotti elected to resign from the Board on March
8, 2024 simultaneously with the resignations of the aforementioned resigning directors. Jane Elfers, President, CEO and current
director of the Company, continues to serve on the Board, as well as in her roles as President and CEO of the Company. In
addition, the Board appointed Douglas R. Edwards to serve on the reconstituted Board as an independent director, which appointment
became effective March 14, 2024. |
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As a result of the Board composition changes described above, Norman Matthews ceased to be the Chairman of the Board,
and Turki Saleh A. AlRajhi was appointed the new Chairman of the Board. Muhammad Asif Seemab was also appointed to the newly-created
position of Vice-Chairman of the Board. |
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On April 17, 2024, the Company announced the closing of an additional $90 million term loan with Mithaq (the “New
Mithaq Term Loan”). Given that the New Mithaq Term Loan will further strengthen the Company’s liquidity position
on better overall terms in the aggregate than the Proposed Term Loan, the Company will not pursue the Proposed Term Loan any
further. |
For additional details regarding the above
events, please review the Company’s public filings and visit the Company’s investor relations homepage found at https://investor.childrensplace.com/
2 |
2024 PROXY STATEMENT
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PROXY SUMMARY
Election of Six Members of the Board of Directors
The Board has nominated six persons for
election at the Annual Meeting. The Board recommends that shareholders vote “FOR” each of the nominees named below.
Name, Tenure, Committees |
Age |
Other Public
Company
Boards |
Turki Saleh A. AlRajhi
Director since 2024
Chairman of the Board
Human Capital & Compensation Committee |
31 |
— |
Muhammad Asif Seemab
Director since 2024
Vice Chairman of the Board
Human Capital & Compensation Committee (Chair), Corporate Responsibility, Sustainability & Governance
Committee (Chair) |
41 |
— |
Hussan Arshad
Independent Director since 2024
Audit Committee (Chair), Corporate Responsibility, Sustainability & Governance Committee |
40 |
— |
Douglas Edwards
Independent Director since 2024
Audit Committee, Corporate Responsibility, Sustainability & Governance Committee |
66 |
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Jane Elfers
Director since 2010
CEO and President |
63 |
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Muhammad Umair
Independent Director since 2024
Audit Committee, Human Capital & Compensation Committee |
38 |
— |
Board Diversity Matrix |
Total Number of Directors |
6 |
Part I: Gender Identity |
Female |
Male |
Non-Binary |
Did Not
Disclose Gender |
Directors |
1 |
5 |
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Part II: Demographic Background |
African American or Black |
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Alaskan Native or American Indian |
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Asian |
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2 |
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Hispanic or Latinx |
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Native Hawaiian or Pacific Islander |
— |
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White |
1 |
1 |
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Two or More Races or Ethnicities |
— |
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LGBTQ+ |
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Did not Disclose Demographic Background |
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2024 PROXY STATEMENT
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PROXY SUMMARY
2023 Shareholder Engagement
2023 Shareholder Engagement |
Shareholders Contacted |
Director Participation |
Over
66% of our
outstanding shares
at the time of invitation |
Two
independent Directors,
together with members of senior management,
participated in all engagement conversations |
Primary Topics Discussed |
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ESG Initiatives, Goals and Enhanced Disclosure |
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Human Capital Management, including diversity, equity and inclusion (“DE&I”) |
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Board Refreshment |
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Fiscal 2023 CEO Compensation Overview |
Shareholder Engagement
Our Board and senior management team have
a long and continuous history of engaging with shareholders and responding to their feedback. 2023 marked the 12th consecutive
year that members of the Board –– the Chair of the Corporate Responsibility, Sustainability & Governance
Committee and the Chair of the Human Capital & Compensation Committee –– together with members of senior
management, engaged in conversations with our shareholders to exchange ideas and share perspectives.
In 2023, we reached out to shareholders
holding over 66% of our outstanding shares of Common Stock, and two independent directors and members of our senior management
spoke with shareholders who accepted our invitation to engage. Those who declined our invitation indicated either that they did
not have any questions or a need to engage, and a few did not respond. We provided all invited shareholders with a presentation
that outlined the important topics on which we wished to obtain their feedback. Shareholders who declined to engage did not indicate
that they had any concerns with the matters set forth in the presentation. We held a call with proxy advisory firm Glass Lewis
to discuss our outreach process and the shareholder feedback we received. We had also invited proxy advisory firm Institutional
Shareholder Services (“ISS”) who declined to engage this year.
4 |
2024 PROXY STATEMENT
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2024 PROXY STATEMENT
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CORPORATE GOVERNANCE AT THE CHILDREN’S
PLACE
Our Corporate Governance Framework
The Board strongly believes that good
corporate governance accompanies and aids our long-term business success.
Corporate Governance Policies and Practices
Board and Committee Independence
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Director Independence Standards. The Board makes an annual independence
determination concerning its Directors using guidelines established to assist the Board in making these determinations. These
guidelines are contained in our Corporate Governance Guidelines and in our Related Person Transactions Policy and cover, among
other things, employment, family, compensatory and business relationships, and relationships with our independent registered
public accounting firm. |
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Our Board also makes an annual determination that: (i) all of the members of the Audit Committee are “independent”
within the meaning of applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
Securities and Exchange Commission (“SEC”) rules and regulations and NASDAQ listing standards, as well as the
ISS’ independence guidelines for purposes of overseeing the Company’s information security risk management, and
meet the “financial sophistication” requirement of NASDAQ rules; and (ii) all of the members of the Human Capital &
Compensation Committee are “non-employee directors” within the meaning of Rule 16b-3 of the Exchange Act. |
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Executive Sessions of Directors. Executive sessions of Directors
are an important governance practice because they enable our Directors to discuss matters such as strategy, succession planning,
risk, senior executive performance and compensation, future agenda items, and Board and Committee priorities and effectiveness,
all without management present. Led by the Chairman of the Board and Committee Chairs, during fiscal 2023, the Directors of
the Board and each Committee met in executive session, without our CEO or other members of Company management present, at
every regularly scheduled Board and Committee meeting. |
Board Composition and Continuous Evaluation
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Board Skill Set and Experience. An important function of our
Corporate Responsibility, Sustainability & Governance Committee is to evaluate whether the members of our Board,
as a whole, possess a mix of the diverse skills, backgrounds and experience that are necessary to further the Company’s
strategy and address the risks we face in the rapidly changing business environment in which we operate. |
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Board, Committee and Director Evaluation Process. The Corporate
Responsibility, Sustainability & Governance Committee in fiscal 2023 engaged in an important process to evaluate
the relevance and the breadth of our Directors’ skills, backgrounds and experience. The Committee conducted a formal
evaluation of how well the Board functions and performs, the membership, leadership, roles and performance of each of the
Board’s Committees, and the skill sets and contribution of individual independent Directors. During Fiscal 2023, the
Committee engaged an independent third-party advisor to assist the Company in conducting its annual independent director self-assessment
process. Following a brief written questionnaire, the centerpiece of this process were individual interviews conducted by
the third party advisor with each independent director and selected members of the senior management team. The interviews
solicited anonymous feedback on topics that are believed to be the most important to successfully accomplishing the goals
of the Board and its Committees. TRB Partners then prepared a final report for the Committee that developed a focused list
of priority topics and created an effective action plan for the Committee. |
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Board as a Whole and Individual Committees. The self-assessment process is designed to elicit
a critical evaluation by the independent Directors of the performance of the Board and its Committees, including assessing
agendas, informational needs, composition, processes, dynamics and effectiveness. The Corporate Responsibility, Sustainability &
Governance Committee shared its findings and recommendations with the Board. The Board then considers the results of the evaluation
and recommendations and, as necessary, identifies and authorizes steps to be taken to enhance Board and Board Committee performance. |
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2024 PROXY STATEMENT
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CORPORATE GOVERNANCE AT THE CHILDREN’S
PLACE
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Individual Independent Directors. The self-assessment process is also designed to elicit a critical
evaluation by the independent Directors of their peers, including discussion of skill sets against a list of skill sets, experience
and attributes important to the Company. Independent Directors evaluate their peers on the basis of effectiveness and various
attribute criteria. The Corporate Responsibility, Sustainability & Governance Committee utilizes the feedback to
inform its succession planning. The Committee also utilizes the skill set inventory to identify any gaps in relevant knowledge
and experience not covered by existing independent Directors. This process results in a discussion on how our Board is constituted
currently and how our Board could be constituted in the future to align with our strategic objectives. |
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Board and Committee Refreshment and Succession Planning.
By identifying and mapping individual skill sets, backgrounds and experience, and engaging in a Board, Committee and independent
Director self-assessment and evaluation process, the Board prioritizes refreshment and succession planning for the Board,
as a whole, as well as each of the Board’s Committees. |
Board Engagement
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Limit the Number of Public Company Boards. Our
Corporate Governance Guidelines limit the number of public company boards of directors (including our Company) on which our
Directors may serve to four, for our independent Directors, and two (including our Company), for our CEO. No Director nominee
serves on any other public company board. |
Board and Committee Oversight
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Oversight Role of Board. The Board plays a
fundamental role in overseeing the Company’s strategy, succession planning and risk management activities. In addition,
the Board has charged each of our standing Committees with the responsibility for the oversight of the management of certain
risks. |
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Strategy. The Board reviews and evaluates
the Company’s execution of its strategic initiatives, engages in reviews with senior management, conducts separate independent
Director sessions without our CEO or other members of the Company management present during which the Company’s strategy
is evaluated and discussed, and receives presentations throughout the year on important aspects of the implementation of these
initiatives. These periodic presentations include a review of the progress on initiatives, and reports from specific departments
such as finance, information technology, supply chain, real estate, human resources and legal. |
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Succession Planning and Emergency Plans. CEO succession planning
is a topic reviewed annually by our Board. On an annual basis, the Board engages in an in-depth review of the succession planning
for the senior leaders of the Company’s management team. In addition, the Board reviews and evaluates of the skills
and competencies needed to be possessed by potential CEO successors and has established a CEO emergency succession plan to
prepare for unanticipated circumstances. The Board has a similar plan in place for the Chairman of the Board. |
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Risk Management. Our Board and its three standing Committees
review and evaluate management’s activities concerning the identification, ranking, mitigation and monitoring of the
major strategic, operational, financial, compliance and reputational risks we face in the course of our domestic and international
business operations. |
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Corporate Responsibility, Sustainability & Governance Committee. Our Corporate Responsibility,
Sustainability & Governance Committee (“CRS&G Committee”) has the oversight responsibility for ESG
and governance risks. With respect to ESG matters, the Corporate Responsibility, Sustainability & Governance Committee
receives reports on a regular basis from executives in charge of the Company’s various environmental and social initiatives
and goals. The CRS&G Committee dedicates two meetings each year to an in-depth discussion of ESG topics, including matters
related to the Company’s environmental and social initiatives, progress toward public goals and the Company’s
overall ESG roadmap. Regarding governance matters, the Committee regularly reviews the composition, skill sets and |
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2024 PROXY STATEMENT
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CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
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experience of our Board and individual Directors to assess the Board’s gender and racial diversity,
the diversity of background and experience, and the skill sets necessary to oversee the Company’s strategic growth initiatives.
This Committee also regularly reviews the Company’s governance policies, guidelines and practices, including with the
periodic input of appropriate outside advisors, in order to continue to ensure that our policies, guidelines and practices
reflect industry best practices. |
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Human Capital & Compensation Committee. Our Human Capital & Compensation Committee (“HC&C
Committee”) has oversight responsibility for human capital management and compensation risk. The Committee receives
reports on a regular basis from executives in charge of the Company’s various human capital/DE&I initiatives, as
well as a report from its independent compensation consultants and management concerning their assessment of risk, if any,
arising from the Company’s compensation policies and practices. The HC&C Committee dedicated two meetings in fiscal
2023 to an in-depth discussion of the various human capital/DE&I initiatives, including matters related to our public
goals and the Company’s overall human capital management roadmap. |
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Audit Committee. Our Audit Committee has oversight responsibility for financial and enterprise risks. In connection
with the oversight of financial risk, the Audit Committee meets regularly, together and separately, with senior finance management,
the head of internal control and the Company’s independent auditors. With respect to enterprise risk oversight, the
Audit Committee receives reports on a regular basis concerning the activities of the Company’s Strategic Risk Committee
(“SRC”), which is composed of members of the Company’s senior leadership team. The Audit Committee dedicated
two meetings in fiscal 2023 to an in-depth discussion of enterprise risk topics with the SRC’s members, including matters
related to our global supply chain, information and data security, privacy, and business transformation activities. The SRC
is composed of senior leaders from various business units where a particular risk resides, including the sourcing, logistics,
information technology, finance, internal audit, human resources and legal departments. The SRC meets regularly throughout
the year to discuss the identification and mitigation of enterprise risks, and is advised by third-party experts where appropriate
(e.g., technical and legal experts on cybersecurity, privacy and business continuity matters). |
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Board of Directors. Our Board received regular reports during fiscal 2023 from the Chairs of the Corporate Responsibility,
Sustainability & Governance, Human Capital & Compensation and Audit Committees. The Board meets periodically
with members of the Company’s SRC to discuss risk identification and mitigation activities, and receives an annual update
of ESG topics, including reports on the progress the Company has made toward its public goals and the status of the Company’s
ESG roadmap. The Board also meets periodically with the Company’s third-party cybersecurity, privacy, financial and
other experts to obtain their perspective on various matters. Finally, our Directors apply the breadth and depth of their
own experience in domestic and international business operations, finance and accounting, and other fields in this risk oversight
function. |
For more detailed information on the changes described above
concerning our Board Committees’ oversight responsibilities, see “Board of Directors and Board Committees” beginning
on page 11 below.
Ensuring Board Accountability
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Shareholder Oversight. The Company’s governance practices
provide for Board accountability to the Company’s shareholders through: (i) majority voting for Directors in uncontested
elections; (ii) declassification of the Board by providing for the annual election of all Directors; (iii) the ability for
25% of our shareholders to call special meetings; and (iv) the elimination of super-majority voting requirements to amend
our Charter and Bylaw provisions. |
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Proxy Access. Our Bylaws provide proxy access rights to our shareholders
pursuant to which the Company will include the names of up to two Director nominees (or, if greater, that number equal to
20% of the Board) in our proxy materials proposed by a shareholder or a group of up to 20 shareholders who have continuously
owned 3% or more of our Common Stock for three years or more. |
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2024 PROXY STATEMENT
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CORPORATE GOVERNANCE AT THE CHILDREN’S
PLACE
Ensuring Management Accountability
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Performance-Based Compensation. The Company has linked a substantial
portion of the pay of its executives directly to the Company’s performance. As described in greater detail under the
heading “Compensation Discussion & Analysis” beginning on page 24 below, in fiscal 2023 the Human Capital &
Compensation Committee adhered to this pay-for-performance philosophy, and performance-based short-term and long-term incentives
(cash and equity) comprise a significant component of our executives’ overall compensation. |
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Effective Performance Metrics. An important governance function
is to measure progress in achieving strategic growth initiatives in an objective and quantitative manner, and to hold management
accountable and reward success. In fiscal 2023, our Human Capital & Compensation Committee gave effect to this function
through the adoption of performance metrics for the Company’s annual bonus plan and LTIP which directly measure progress
in advancing our strategic growth initiatives and achieving our financial, diversity and sustainability goals, hold senior
management accountable for financial and operational results over which they have more direct influence, and are key value
creation drivers in the specialty retail industry. |
Board Leadership Structure
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Separate Chairman and CEO. The Board selects
the Company’s CEO and Chairman of the Board in the manner that it determines to be in the best interests of the Company’s
shareholders. The Board has determined that having an independent Director serve as Chairman of the Board is in the best interests
of the Company’s shareholders at this time. Our Board believes that this structure ensures a greater role for the independent
Directors in the oversight of the Company and active participation of the independent Directors in setting Board and Committee
agendas and establishing priorities and procedures. Further, this structure permits the CEO to focus on the Company’s
strategic matters and the management of the Company’s day-to-day operations. |
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Committee Chairs. Our Board’s leadership structure also
includes experienced and involved Board Committee Chairs. |
Established Policies Guide Governance and Business Integrity
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Charters for Board Committees. Each of the
CRS&G Committee, HC&C Committee and Audit Committee has a charter developed and maintained under the leadership of
its Committee Chair. The Committee charters describe the purpose, responsibilities, structure and operations of each Committee.
The HC&C Committee charter and the Audit Committee charter include the authority and responsibilities of each Committee
under the applicable rules and regulations of the SEC and NASDAQ. |
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Corporate Governance Guidelines. The Company’s Corporate
Governance Guidelines reflect the Board’s views and Company policy regarding significant corporate governance issues.
As part of its ongoing review of best practices in corporate governance, the Board reviews these guidelines annually and updates
these guidelines as appropriate. |
|
|
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|
● |
Code of Business Conduct. The Company’s Code of Business
Conduct is designed to promote the highest ethical standards in all of the Company’s business dealings. The Code of
Business Conduct applies to the Directors, officers (including its principal executive officer, principal financial officer
and principal accounting officer) and employees. |
|
|
|
|
● |
Anti-Corruption Policy. The Company’s Anti-Corruption Policy
requires compliance with all laws, domestic and foreign, prohibiting improper payments or inducements to any person, including
government officials. The Anti-Corruption Policy provides guidance on the types of improper payments that the Company prohibits
and how to recognize and deal with corruption, bribery, and other unethical conduct. |
|
2024 PROXY STATEMENT
|
9 |
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
|
● |
Insider Trading Policy; Prohibition on Hedging/Pledging of Common Stock.
The Company’s Insider Trading Policy is designed to assist the Directors, officers (including our named executive
officers (“NEOs”)) and employees to comply with insider trading laws and prevent even the appearance of improper
insider trading. Our Insider Trading Policy prohibits trading in derivatives of our Common Stock, including puts, calls and
other financial derivatives, and also prohibits hedging and pledging of our Common Stock by any of our Directors, officers
(including our NEOs) and employees in order to ensure that the interests of Directors, officers (including our NEOs) and employees
align with those of our shareholders. For more information, see “Prohibition on Hedging/Pledging of Common Stock”
on page 33 below. |
|
|
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|
● |
Clawback Policy. The Company’s Clawback Policy applies
to short term and long term incentive compensation and allows the Company to recover performance-based annual cash bonuses
and stock awards granted under our LTIP from members of Company management, including our NEOs, in the event of certain occurrences,
including the restatement of financial statements and other actions having a significant adverse impact on the Company. |
|
|
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|
● |
Equity Award Grant Policy. The Company’s Equity Award Grant
Policy governs the Company’s grant of equity and cash awards under the Company’s Fourth Amended and Restated 2011
Equity Incentive Plan, helping to promote consistent administration and effective compliance for the Company’s equity
and cash awards program. During fiscal 2023, we worked with our independent compensation consultant to update this policy
in line with best practices. |
|
|
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|
Shareholders may view these documents on the Company’s corporate website http://corporate.childrensplace.com
in the “Corporate Overview” section under the “Investor Relations” tab and in the section entitled
“Corporate Info —Governance Documents”. |
Director Access to Management
|
● |
Management Participation at Board Meetings. Topics
are presented to the Board by members of Company management in an environment that encourages dialogue to develop between
Directors and Company management. The Board’s direct access to management continues outside the boardroom during on-going
discussions with our executives. |
Shareholder Access to the Board of Directors
|
● |
Communications to the Board of Directors. Shareholders may communicate
directly with the Company’s independent Directors concerning proper and relevant topics by sending an e-mail to childrensplaceboard@childrensplace.com
or by writing to Board of Directors, c/o Corporate Secretary, The Children’s Place, Inc., 500 Plaza Drive, Secaucus,
New Jersey 07094. |
Consideration of Board Nominees
|
● |
Nomination by Shareholders. The CRS&G
Committee acts on behalf of the Board to recruit, consider the qualifications of and recommend to the Board nominees for election
as Directors, including by our shareholders and candidates to be appointed by the Board to fill vacancies on the Board. Our
Corporate Governance Guidelines provide that the CRS&G Committee will consider candidates recommended by shareholders
and that there will be no differences in the manner in which it evaluates nominees recommended by shareholders, and nominees
recommended by the CRS&G Committee and/or Company management. |
10 |
2024 PROXY STATEMENT
|
|
CORPORATE GOVERNANCE AT THE CHILDREN’S
PLACE
Board of Directors and Board Committees
Board
of Directors. The Board oversees the business, assets, affairs and performance of the Company. At the end of
fiscal 2023, the Board had ten Directors, with nine independent Directors and one employee Director, our CEO. Six board members
have been nominated for election at the Annual Meeting.
Committees
of the Board of Directors. The Board has three standing Committees: the Corporate Responsibility, Sustainability &
Governance Committee, the Human Capital & Compensation Committee and the Audit Committee. The members of the Board’s
Committees as of the end of fiscal 2023 were as follows:
Name |
Board of
Directors |
Audit
Committee |
Corporate Responsibility,
Sustainability &
Governance
Committee |
Human Capital &
Compensation
Committee |
John
E. Bachman* |
|
|
|
|
Elizabeth Boland* |
|
|
|
|
Jane T. Elfers |
|
|
|
|
Alicia Enciso* |
|
|
|
|
John A. Frascotti* |
|
|
|
|
Katherine Kountze* |
|
|
|
|
Norman Matthews* |
|
|
|
|
Wesley S. McDonald* |
|
|
|
|
Debby Reiner* |
|
|
|
|
Michael Shaffer* |
|
|
|
|
|
|
|
|
|
Financial Expert |
Member |
Chairperson |
|
2024 PROXY STATEMENT
|
11 |
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
Following the changes to the Board in early fiscal 2024, the
members of the Board’s Committees are now as follows:
Name |
Board of
Directors |
Audit
Committee |
Corporate Responsibility,
Sustainability &
Governance
Committee |
Human Capital &
Compensation
Committee |
Turki Saleh A. AlRajhi |
|
|
|
|
Hussan Arshad* |
|
|
|
|
Douglas Edwards* |
|
|
|
|
Jane T. Elfers |
|
|
|
|
Muhammad Asif Seemab |
|
|
|
|
Muhammad Umair* |
|
|
|
|
|
|
|
|
|
Member |
Chairperson |
|
Attendance at Board and Committee Meetings
|
Board of
Directors |
Audit
Committee |
Corporate Responsibility,
Sustainability &
Governance
Committee |
Human Capital &
Compensation
Committee |
Meetings held in fiscal 2023 (in person, via video conference and/or telephonically) |
15 |
11 |
6 |
7 |
Attendance |
All directors, all meetings* |
All members, all meetings |
All members, all meetings |
All members, all meetings |
|
|
* |
One Board member did not attend one meeting |
12 |
2024 PROXY STATEMENT
|
|
CORPORATE GOVERNANCE AT THE CHILDREN’S
PLACE
Corporate Responsibility, Sustainability & Governance
Committee
The CRS&G Committee is responsible
for overseeing the Company’s ESG risk management activities, including environmental initiatives, and social topics such
as responsible sourcing in the Company’s global supply chain. This Committee is also charged with the oversight of the Company’s
corporate governance policies and practices.
Environmental Initiatives
The CRS&G Committee oversees the Company’s
environmental strategies, initiatives and goals. We believe that purpose-led companies such as ours have the opportunity and responsibility
to work to ensure that our business contributes to a healthy planet. We continue to focus on topics that are important to our
long-term success and where we believe we can have a positive impact. The CRS&G Committee oversees our environmental initiatives
which aim to:
|
● |
Reduce GHG emissions in our operations and across our global supply chain through science-based goals
to address climate change; |
|
|
|
|
● |
Deliver responsibly sourced product offerings through the use of sustainable raw materials; |
|
|
|
|
● |
Divert the amount of waste from our operations sent to landfills and move to a more circular system through reusing and
recycling; and |
|
|
|
|
● |
Implement third-party worker well-being programs with our top global vendors. |
In designing and implementing the Company’s
environmental initiatives, we identify areas where we believe we can make a difference and establish quantitative goals in an
effort to positively impact the communities and environments affected by our business. To have the greatest impact, we collaborate
with experts, non-governmental organizations (“NGOs”), other non-profit organizations, industry peers, and third-party
vendors and factories to identify and implement initiatives. The CRS&G Committee oversees the Company’s commitment to
a long-term approach across its global operations to act responsibly and efficiently.
Social Topics
The Company’s commitment to positive
social practices includes our responsible sourcing activities in our global supply chain where we partner with our global third-party
vendors and factories, NGOs and others in supporting workers’ health, safety and well-being. The Company monitors compliance
by its third-party vendors and factories with the Company’s Vendor Code of Conduct, local laws and ethical business practices
to help ensure fair and safe work conditions for the people who make the Company’s products. The Company also recognizes
the importance of eliminating forced labor within the supply chain and its increasing significance in light of reports of human
rights abuses in various regions of the world. In addition, the Company sponsors a number of worker well-being programs designed
to improve the daily lives of the predominantly female factory workers who make its products. The Company’s commitment to
being a positive social influence extends to its charitable mission of supporting children and families in need.
The CRS&G Committee regularly receives
reports from executives overseeing the above initiatives and topics. In turn, the Chair of the CRS&G Committee regularly updates
the full Board on the Committee’s activities.
For additional information concerning
the Company’s environmental and social initiatives & goals, please refer to the Company’s ESG Report, which
can be found on the Company’s corporate website at http://corporate.childrensplace.com
under the ESG section, and the Company’s Annual Report on Form 10-K for fiscal 2023.
|
2024 PROXY STATEMENT
|
13 |
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
Governance Matters
The CRS&G Committee recommends nominees
for Directors and administers the formal Board, Committee and individual Director self-evaluation procedures. It also oversees
and reviews the Company’s corporate governance policies, guidelines and practices and makes recommendations to the Board
regarding corporate governance and Board and Committee structure.
Human Capital & Compensation Committee
The HC&C Committee has the oversight
responsibility for the Company’s human capital management policies and practices, including diversity, equity and inclusion
topics and associated risks. The HC&C Committee also is charged with the oversight of the Company’s executive compensation
policies, practices and plans and associated risks.
Human Capital Management
The HC&C Committee is actively engaged
in overseeing the Company’s human capital management strategies, including our talent and succession planning initiatives
designed to attract, develop, engage, reward and retain top retail, digital and business leaders who can drive our financial performance
and strategic growth initiatives and contribute to building long-term shareholder value. The Company has benefited greatly from
the stability of our senior leadership team, who have an average tenure of approximately seven years, led by our CEO who has led
the Company for over a decade. The HC&C Committee’s involvement in leadership development and succession planning is
systematic and ongoing, culminating in an annual review at the Board level of succession plans for all senior leaders of the Company’s
management team, inclusive of development strategies for top talent within the Company.
Diversity, Equity and Inclusion
In fiscal 2021, the Board approved the
assignment of oversight responsibilities for human capital management activities and risks, including DE&I, to the HC&C
Committee.
To improve the Board’s understanding
of the Company’s culture and talent pipeline, the Board and its Committees periodically meet with high-potential executives
in formal and informal settings. More broadly, the HC&C Committee and the Board are regularly updated on key talent metrics
for the overall workforce, including diversity and inclusion, pay equity, employee relations, recruiting and development programs,
and overall progress against the Company’s human capital development strategies. Diversity and inclusion are top priorities
for the Company, and we actively strive to ensure that our workplace includes a range of perspectives and backgrounds at the Board
level, in senior leadership, and throughout our management and associate base. The Company reports annually on employment data,
including ethnicity, in line with Equal Employment Opportunity Commission guidelines, publishes its complete EEO-1 data on its
corporate website, and continues to focus on building a culture which supports diversity, equity and inclusion, and which works
to ensure fair compensation and opportunity for all employees regardless of gender or race.
14 |
2024 PROXY STATEMENT
|
|
CORPORATE GOVERNANCE AT THE CHILDREN’S
PLACE
The Company is women-led and believes
that it is positioned to outperform industry standards by employing diverse teams operating in an inclusive environment. Over
85% of our customers are women and we are proud of our industry-leading gender diversity statistics across every level of the
organization:
Women Representation in 2022 |
Overall
Workforce |
Board
Members |
Senior
Leadership |
Corporate
Leadership |
Store
Management |
Promotions
Overall |
Promotions
in Corporate
Leadership |
Promotions
in Store
Management |
New
Hires
Overall |
86% |
55% * |
50% |
62% |
92% |
94% |
71% |
97% |
87% |
Our women-led workforce deeply understands
the wants and needs of our customer base, allowing the voice of the customer to be at the forefront of every decision we make.
This is a key differentiator in the marketplace and helps us to ensure that we deliver on our brand promise. To underscore these
efforts, the Company has established a goal to maintain our industry leading position of at least 80% representation of women
in our overall workforce and maintain at least 50% representation of women in our corporate leadership positions.
The Company’s position is further
enhanced by the diversity of teams across its stores, distribution centers and corporate headquarters, and in its senior leadership
team. The Company has broad representation of races and ethnicities throughout the organization, with 68% of the Company’s
overall workforce identifying as racially or ethnically diverse and associates identifying as racially or ethnically diverse representing
75% of new hires and 57% of promotions during fiscal 2022. The Company has reinforced its commitment to ensure that its workforce
is reflective of local demographics and the customers the Company serves by setting a new goal to double the representation of
Black/African American associates at its U.S. corporate offices by 2025. The Company seeks to uphold its diverse and inclusive
culture by striving to ensure its talent acquisition programs sustain and grow diverse representation across its workforce, promoting
talent from within, building an inclusive culture through awareness and education, and rewarding all employees equitably.
For additional information concerning
the Company’s DE&I initiatives and EEO-1 data, please refer to the Company’s ESG Report, which can be found on
the Company’s corporate website at http://corporate.childrensplace.com under
the ESG section, and the Company’s Annual Report on Form 10-K for fiscal 2023.
Executive Compensation
The HC&C Committee reviews and recommends
to the Board our CEO’s compensation, and with input from senior management, reviews and approves the compensation of our
other executive officers. The HC&C Committee establishes our management compensation policies, reviews the terms of the Company’s
incentive compensation plans and programs, and oversees the implementation and operation of these plans and programs. In addition,
the HC&C Committee makes recommendations to the Board regarding the compensation of independent Directors.
The HC&C Committee is also responsible
for reviewing and assessing potential risk arising from the Company’s compensation policies and practices. Each year, in
conjunction with its independent compensation consultant and management, the HC&C Committee conducts a risk assessment of
the Company’s compensation policies and practices to ascertain any potential material risks that may be created by the policies
and practices. In fiscal 2023, the HC&C Committee considered the findings of the risk assessment and concluded that the Company’s
compensation programs and practices are aligned with the interests of our shareholders, appropriately reward pay for performance,
and do not promote excessive or imprudent risk-taking.
|
2024 PROXY STATEMENT
|
15 |
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
The HC&C Committee has the authority
to retain the services of compensation consultants to provide it with recommendations, advice and information on various compensation
matters, including the Company’s compensation of the CEO, the Company’s other executive officers and independent Directors.
Acting in the capacity of an independent compensation consultant, Frederic W. Cook & Co. (“FW Cook”) advises
the HC&C Committee with respect to the Company’s compensation policies and practices, the design and implementation
of executive compensation plans and programs, and such other matters as the HC&C Committee may direct. FW Cook provides the
HC&C Committee with benchmarking data concerning the compensation paid to senior executives and independent directors by companies
in the Company’s peer group and the retail industry. FW Cook works directly with the HC&C Committee and its Chair, and
meets with the Committee in executive sessions. FW Cook does not provide any services to the Company. The HC&C Committee has
determined that FW Cook is independent and does not have any conflict of interest in its dealings with the HC&C Committee.
The HC&C Committee made this determination, in part, by reviewing and considering the factors set out by the applicable rules
and regulations of the SEC and NASDAQ covering independence, conflicts of interest and compensation advisors.
Human Capital & Compensation
Committee Interlocks and Insider Participation
None of the members of the HC&C Committee
is or has been an officer of the Company, none was an employee of the Company during fiscal 2023, and none had any relationship
with the Company or any of its subsidiaries during fiscal 2023 that would be required to be disclosed as a transaction with a
related person. None of the executive officers of the Company has served on the board of directors or compensation committee of
another company at any time during which an executive officer of such other company served on the Company’s Board or the
HC&C Committee.
16 |
2024 PROXY STATEMENT
|
|
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
Audit Committee
The Audit Committee has oversight responsibility
for the Company’s financial and enterprise risk management activities:
|
● |
Financial Risk, including: |
|
|
Financial reporting |
|
|
Internal controls and internal audit function |
|
|
Independent audits of the Company’s financial statements |
|
|
|
|
● |
Enterprise Risk, including: |
|
|
Cybersecurity and privacy |
|
|
Business continuity and disaster recovery |
|
|
Operational matters, including global supply chain |
|
|
Legal compliance |
Reporting, Controls and Internal Audit
The Audit Committee monitors the preparation and
integrity of our financial statements, our overall financial disclosure practices, the soundness of our system of internal financial controls,
our compliance with good accounting practices and the adoption of new accounting standards. The Audit Committee also has oversight responsibility
for the performance of our internal audit function and, in this capacity, the Audit Committee approves the annual internal audit plan.
The Audit Committee regularly meets in executive sessions with the Company’s independent registered public accounting firm outside
the presence of management, and also meets separately in executive sessions with members of senior management and with the head of our
internal audit department.
Independent Auditors
The Audit Committee is responsible for the appointment
of our independent registered public accounting firm, the oversight of the scope of its audit work and the determination of its compensation.
In discharging this responsibility, the Audit Committee reviews our current firm’s qualifications, performance, control procedures
and independence, all in accordance with regulatory requirements and guidelines, and periodically considers whether a change in the independent
registered public accounting firm is recommended. As part of this evaluation, the Audit Committee considers a number of factors, including
the current firm’s capabilities and expertise, industry knowledge and experience, the quality and performance of the lead engagement
partner, other professionals and specialists on the audit team, audit methodology, including use of technology, and continuity for the
Company. Based on this evaluation, the members of the Audit Committee believe that the selection of EY, our independent registered public
accounting firm since 2018, to continue to serve as our independent registered public accounting firm for fiscal 2023, is in the best
interests of the Company and our shareholders.
Cybersecurity and Privacy
The Company considers cybersecurity and privacy
to be important issues affecting the enterprise both in terms of reputational risk and economic risk. The Company has implemented comprehensive
controls consistent with the requirements of the International Organization for Standardization (“ISO”) and assesses cybersecurity
maturity levels against the National Institute of Standards and Technology (“NIST”) framework to set appropriate standards,
guidelines and best practices to manage cybersecurity-related risk. The Audit Committee is responsible for the oversight of the Company’s
cybersecurity risk identification and mitigation activities, receives reports on these activities on a regular basis, and provides reports
regularly to the Board.
|
2024 PROXY STATEMENT
|
17 |
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
The Company’s cybersecurity program is a continuous
process where we strive to:
|
● |
Identify Threats—both internal and external; |
|
|
|
|
● |
Identify Vulnerabilities—in order to understand any limitations,
as well as to identify opportunities involving methodologies and technology; |
|
|
|
|
● |
Assess Risk Exposure—determine the likelihood that vulnerabilities
may be exploited and the impact, financial and reputational, of being exploited; |
|
|
|
|
● |
Implement Detection and Protection Measures—through appropriate
policies, procedures and use of technology to reduce the likelihood and impact of a breach, including by leveraging third-party
cybersecurity experts to conduct vulnerability scanning, penetration testing, workforce control assessments, and a maturity
assessment, and to enhance our cybersecurity training curriculum; and |
|
|
|
|
● |
Implement Incident Response Plans—which the Company has
documented, leveraging third-party cybersecurity experts, and includes periodic training. |
To keep pace with ever-evolving threats and industry
best practices, the Company has made, and will continue to make, sizeable investments in the building and development of cybersecurity
talent and expertise, and the implementation of state-of-the-art systems and tools. We employ benchmarking to understand best practices
and industry trends. We conduct security and compliance assessments throughout the year to validate the efficiency of our programs and
practices. We also periodically engage an independent third-party expert to assess our cybersecurity maturity level against our Peer Group
and the retail industry. The results of this maturity assessment inform our cybersecurity development roadmap going forward and are presented
to the Audit Committee and the Board of Directors by our senior management and representatives from the third-party expert.
In an effort to ensure that the Company’s
employees are familiar with the Company’s data security and protection policies and enable them to proficiently handle the threat
of cyber-attacks, all employees are required to participate in a cybersecurity awareness training program annually. Our financial, information-technology
and other associates who have administrative authority or access to sensitive information are required to attend additional training courses
during the year. The Company also circulates cyber awareness materials on a periodic basis on its intranet and holds a “Cyber Awareness
Month” each year to promote the importance of cybersecurity topics.
The Company’s SRC meets regularly throughout
the year to discuss security risks and is advised by third-party experts where appropriate (e.g., technical and legal experts on cybersecurity
and business continuity matters). The Company’s information security team receives daily alerts from the Cybersecurity &
Infrastructure Security Agency, part of the U.S. Department of Homeland Security, in an effort to proactively manage the remediation of
any new items that may arise. Given that remote working arrangements have increased significantly during the COVID-19 pandemic, the Company
monitors internal network activity on a daily and weekly basis.
The Audit Committee receives reports concerning
the activities of the SRC and dedicates at least two meetings each year to an in-depth discussion of enterprise risk topics with the SRC’s
members, including topics related to cybersecurity. Subsequently, the Board receives updates from the Audit Committee regarding the Company’s
risk identification and mitigation activities, including matters related to cybersecurity, and if necessary, the Audit Committee directs
the SRC to provide reports on important activities directly to the Board.
In the event of a suspected data security incident,
the Company has in place a cybersecurity incident response team, comprised of members of the Company’s information security, internal
audit and legal teams, and whose function is to respond to any such incident, define and seek to control the extent of the incident, assess
and remediate any damage caused, and implement measures designed to prevent future reoccurrences. Reports of significant incidents and
significant mitigation efforts are provided to the Company’s SRC, and as necessary, to the Audit Committee and the Board.
18 |
2024 PROXY STATEMENT
|
|
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
Business Continuity Management
The Audit Committee oversees the Company’s
business continuity management program, consisting of both crisis management and disaster recovery activities. The Company’s crisis
management efforts include identification of the roles, responsibilities, actions and events to occur during the first 24-hour period
following the occurrence of a crisis; our disaster recovery efforts cover the activities to occur following that initial 24-hour period
to ensure our technology, systems, people, company locations and business operations are active or are successfully reactivated as necessary.
Business continuity management strategies and capabilities are tested and monitored through periodic meetings of a cross-functional team
of Company management. In addition, except during the recent COVID-19 disruption, members of senior management participate in periodic
crisis management exercises with third-party experts on crisis management best practices to apply their learnings to the Company’s
business continuity management program. In particular, in fiscal 2023, the table-top exercise that was conducted for senior management
focused on the handling of a cyber-security incident. Members of senior management are continually engaged to ensure appropriate oversight
of business continuity risk management, including the following: (i) periodic reviews of status reports by the Company’s SRC; (ii)
periodic updates to our business continuity management strategy and practices, which are reviewed by the SRC and our CEO; and (iii) periodic
reviews of business continuity management status and practices by the Audit Committee.
Global Sourcing
The Audit Committee receives regular reports from
our sourcing and logistics executives concerning the Company’s global sourcing activities, including in less developed countries
where political instability, infrastructure limitations, labor practices and other factors can create operational and reputational risk.
Product Safety & Quality Control
As a children’s apparel retailer, safety is
a top priority for the Company. Our products are regulated by the U.S. Consumer Product Safety Commission (“CPSC”), Health
Canada, and similar state, provincial and international regulatory authorities. Our product safety and quality program includes factory
safety audits, product safety reviews, testing by a CPSC-approved third party laboratory, and quality assurance inspections at various
stages of production and upon receipt of products in our distribution centers. Our product safety team is responsible for investigating
and assessing product safety and quality issues as they arise, and escalating those issues to the SRC when needed. The Audit Committee
reviews and receives periodic reports on product safety matters, including any new regulatory developments affecting our products, a summary
of identified safety and quality issues, and any updates to our product safety protocols.
Anti-Corruption
We conduct business in numerous countries around
the world, including in less developed countries where corruption is more prevalent. Our CEO and the SRC have oversight of our anti-corruption
program. The Audit Committee reviews and receives reports on compliance with the Company’s anti-corruption policies and on training
activities in these countries. These activities include regular, periodic in-country training by Company personnel and third-party experts
for Company employees and agents, as well as third-party vendor and factory personnel. The Company also uses online training materials
to reach members of management and its associates around the world.
Legal Compliance
The Audit Committee receives reports from our legal
department regarding the Company’s compliance related risks, including any material changes in laws and regulations that impact
the Company, material legal claims and proceedings involving the Company and code of conduct compliance.
|
2024 PROXY STATEMENT
|
19 |
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
Fiscal 2023 Audit Committee Report
As stated in the Audit Committee Charter, a copy
of which is available on the Company’s corporate website, http://corporate.childrensplace.com
in the “Corporate Overview” section under the “Investor Relations” tab and in the section entitled “Corporate
Info – Governance Documents,” the Audit Committee’s responsibility is one of oversight. It is the responsibility of
Company management to establish and maintain a system of internal controls over financial reporting, to prepare consolidated financial
statements of the Company and its subsidiaries in accordance with generally accepted accounting principles (“GAAP”), and
to prepare other financial reports and disclosures. Our independent registered public accounting firm is responsible for performing an
independent audit of the Company’s consolidated financial statements and to issue a report thereon. The Audit Committee does not
provide any expert or other special assurance as to the Company’s financial statements or any expert or professional certification
as to the work of our independent registered public accounting firm. In addition to overseeing the preparation and integrity of our financial
statements and our overall financial disclosure practices, the Audit Committee oversees the Company’s enterprise risk management
activities.
At Audit Committee meetings in 2023, the Audit Committee
met with the Company’s internal and independent auditors, with and without management present, to discuss the overall scope of their
respective annual audit plans, the results of their respective audits, the effectiveness of the Company’s internal controls over
financial reporting, including management’s and EY’s reports thereon, the bases for the conclusions expressed in those reports,
and the overall quality of the Company’s financial reporting. In addition, the Audit Committee reviewed and discussed with management
the Company’s audited consolidated financial statements for fiscal 2023, and met and held discussions with management, the Company’s
independent registered public accounting firm and the head of the Company’s internal audit function (both with and without management
present) regarding the fair and complete presentation of the Company’s financial results and discussed the significant accounting
policies applied in the Company’s financial statements as well as alternative treatments. The Audit Committee also reviewed and
discussed with management, the head of the Company’s internal audit function and the Company’s independent registered public
accounting firm the reports required by Section 404 of the Sarbanes Oxley Act of 2002, namely, management’s annual assessment of
the Company’s internal controls over financial reporting and the Company’s independent registered public accounting firm’s
attestation report thereon. The Audit Committee has discussed with the Company’s independent registered public accounting firm the
matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, issued by the Public Company
Accounting Oversight Board, or “PCAOB”. In addition, the Audit Committee has received the written disclosures and the letter
from the Company’s independent registered public accounting firm required by applicable requirements of the PCAOB regarding the
independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed
with the independent registered public accounting firm such firm’s independence.
Based on the reviews and discussions referred to
above, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements for fiscal 2023
be included in our Annual Report on Form 10-K for such fiscal year for filing with the SEC.
The foregoing Audit Committee report has been
submitted by the members of the Audit Committee: Hussan Arshad (Chair), Muhammad Umair and Douglas Edwards.
20 |
2024 PROXY STATEMENT
|
|
CORPORATE GOVERNANCE AT THE CHILDREN’S
PLACE
Board Nominees for Directors
Biographical information for each candidate nominated
for election at the Annual Meeting is set forth below.
Turki Saleh A. AlRajhi,
31
Director
Since 2024 |
|
Mr. AlRajhi currently serves as the Chairman
of the Board and as a member of the Human Capital & Compensation Committee. Mr. AlRajhi is the Chairman of the Board and
Chief Executive Officer of Mithaq Holding Company and Managing Director of Mithaq Capital SPC. Prior to founding Mithaq Holding Company,
in August 2014, Mr. AlRajhi was a Corporate Analyst in the Deal Advisory group of KPMG International Limited. Mr. AlRajhi is the
Vice Chairman of the Board of Trustees of Mozon Philanthropies, a foundation providing donations and support to healthcare and education
projects. He is also the Chairman of the Board of Themar Foods & Catering, one of Saudi Arabia’s leading quick service
restaurants, and Bunyah Real Estate. He is the Co-Founder, Board Member and Head of the Executive Committee of the Riyadh Chamber
of Commerce, Family Business Committee, and a Member of the Board of Trustees and Executive Committee of the AlRajhi Endowment, a
charitable foundation. Mr. AlRajhi holds a Bachelor of Science in Finance and Banking from Dar Al Uloom University in Riyadh, Saudi
Arabia and completed the Value Investing Program from Columbia Business School. |
|
|
|
Muhammad Asif Seemab, 41
Director
Since 2024 |
|
Mr. Seemab currently serves as the Vice Chairman of the
Board, the Chair of the Human Capital & Compensation Committee and the Chair of the Corporate Responsibility, Sustainability &
Governance Committee. He is Managing Director of Mithaq Capital SPC. He previously spent four years in the audit group at Ernst &
Young. Mr. Seemab received his Bachelor of Commerce degree from Hailey College of Commerce at the University of Punjab in Lahore,
Pakistan and is a Chartered Accountant and an associate member of The Institute of Chartered Accountants of Pakistan. |
|
|
|
Hussan Arshad, 40
Independent Director
Since 2024 |
|
Mr. Arshad currently serves as the Chair of the Audit Committee and as a member
of the Human Capital & Compensation Committee. He is currently the Group Senior Manager for DP World, where he leads complex
audits, manages a portion of the GIA Business audit portfolio, supervises auditing teams, and provides advice to business management
on best internal control practices and procedures. Mr. Arshad has previously held positions in various organizations, including Ernst &
Young, and as a Senior Manager of Operational Audits with Bell Canada Enterprise. Mr. Arshad is a member of the Chartered Professional
Accountants of Canada and the Institute of Chartered Accountant of Pakistan and England and Wales. He is also a Certified Internal
Auditor in the United States. |
|
2024 PROXY STATEMENT
|
21 |
CORPORATE GOVERNANCE AT THE CHILDREN’S PLACE
Douglas Edwards, 66
Independent Director
Since 2024 |
|
Mr. Edwards currently serves as a member of
the Audit Committee and the Corporate Responsibility, Sustainability & Governance Committee. Mr. Edwards served as the Executive
Vice President and Deputy General Counsel at Wells Fargo, responsible for the Global Commercial and Securities Division. Prior to
his tenure at Wells Fargo, Mr. Edwards he served in various roles in the legal division of First Union Corporation. Prior to that
role, he had worked at the Buffalo law firm of Hodgson, Russ, Andrews, Woods & Goodyear, where he focused on commercial
litigation with specialties in bankruptcy litigation and representation of financial institutions. Mr. Edwards earned his B.A. from
the University of Virginia in 1979, an M.A. in history from the University of Kentucky in 1985 and a J.D., cum laude, from
the University of Buffalo in 1985. |
|
|
|
Jane Elfers, 63
Director
Since 2010 |
|
Ms. Elfers became our President and Chief Executive Officer
in January 2010. She set our strategic vision as a leading global, omni-channel children’s apparel brand, and developed and
executed our key strategic growth initiatives, including superior product and design, transformation to a digital first model, expansion
of our wholesale channel and omni-channel marketing strategy, and optimization of our store fleet to position the business to drive
shareholder value over time. Ms. Elfers led our successful company-wide, multi-year strategic reset by assembling, motivating and
leading a best-in-class management team and she has instituted a culture of operational excellence. Ms. Elfers formerly served as
President and Chief Executive Officer of Lord & Taylor from May 2000 to September 2008. She is a graduate of Bucknell University
where she received a degree in Business Administration. |
|
|
|
Muhammad Umair, 38
Independent Director
Since 2024 |
|
Mr. Umair currently serves as a member of the Audit Committee and the Human
Capital & Compensation Committee. Mr. Umair is Senior Advisor for Origin Funding Partners, a trade finance fund located
in Sacramento County, California, where he is responsible for credit, recovery, and due diligence. Prior to joining Origin Funding
Partners, Mr. Umair held positions in various organizations, including Head of Advisory at Armacom and Senior Auditor at Ernst &
Young. He is a Chartered Accountant and associate member of the Institute of Chartered Accountants of Pakistan and England and Wales.
Mr. Umair has more than 15 years of financial and commercial experience, including investment management, corporate advisory, operational
and financial due diligence and audit. |
22 |
2024 PROXY STATEMENT
|
|
EXECUTIVE OFFICERS
Set forth below are the names, ages and titles of
our executive officers as of April 10, 2024:
Name |
Age |
Position |
Jane
Elfers |
63 |
President
and Chief Executive Officer, Director |
Maegan
Markee |
38 |
Brand
President |
Sheamus
Toal |
54 |
Chief
Operating Officer & Chief Financial Officer |
Jared
E. Shure |
43 |
Senior
Vice President, General Counsel & Corporate Secretary |
The biography of Ms. Elfers is set forth above under
the heading “Corporate Governance at The Children’s Place – Board Nominees for Directors.”
Maegan Markee, 38
Brand President |
|
Maegan Markee joined the Company in 2010 and
has held positions of increasing responsibility, culminating in her appointment as Brand President on August 1, 2023. In her current
role, Ms. Markee oversees all customer facing activities across all of the Company’s family of brands and her leadership portfolio
includes design, sourcing, merchandising, marketing, planning, allocation and the Company’s wholesale and international businesses.
Since becoming a member of the Company’s senior leadership team in 2020, Ms. Markee has been instrumental in architecting the
Company’s marketing transformation, and played an integral part in its accelerated transformation to a digital-first Company
and implementing our successful Amazon marketplace strategy. Ms. Markee earned her BS in Management and Marketing from Quinnipiac
University. |
|
|
|
Sheamus Toal, 54
Chief Operating
Officer & Chief Financial Officer |
|
Sheamus Toal joined the Company in 2022 as Senior Vice President,
Chief Financial Officer. During his tenure, he has assumed roles of increasing responsibility, culminating in his expanded role as
Chief Operating Officer & Chief Financial Officer of the Company on August 1, 2023. Mr. Toal was most recently the Executive
Vice President and Chief Financial Officer at Saatva, Inc., a high growth digital e-commerce retailer. Previously, Mr. Toal spent
over 16 years with New York & Company where he held several senior level finance and operational positions as Chief Operating
Officer, Chief Financial Officer, Chief Accounting Officer and Treasurer, culminating in his role as Chief Executive Officer from
2020 to 2021, during which time he led the company through the COVID-19 pandemic (New York & Company filed for reorganization
in bankruptcy court in July 2020). He began his career in finance and accounting in positions of increasing responsibility with Footstar,
Inc. and Standard Motors Products, Inc., and was a Manager with KPMG, LLP. Mr. Toal graduated with a BS in Accounting from St. John’s
University and is a CPA. |
|
|
|
Jared Shure, 43
Senior Vice President,
General Counsel &
Corporate Secretary |
|
Jared E. Shure joined the Company in 2018 as Vice President, Assistant General
Counsel. During his tenure, he has assumed roles of increasing responsibility, including being appointed Deputy General Counsel in
2019 and General Counsel and Corporate Secretary in 2021. Mr. Shure has more than 17 years of business and legal experience. Prior
to joining the Company, he was a Vice President & Corporate Counsel at Kate Spade & Company and a Vice President &
Deputy General Counsel at Tapestry, Inc. following its acquisition of Kate Spade. Mr. Shure began his legal career as a mergers &
acquisitions associate at Paul, Weiss, Rifkind, Wharton & Garrison LLP and O’Melveny & Myers LLP. Mr. Shure
earned his BS in Business Administration from the University of North Carolina and his JD from Cornell Law School. |
As previously announced, Claudia Lima-Guinehut left
her position as Senior Vice President, Global Merchandising and Strategic Partnerships of the Company on June 6, 2023. Prior to such date,
Ms. Lima-Guinehut was an executive officer of the Company.
|
2024 PROXY STATEMENT
|
23 |
EXECUTIVE AND DIRECTOR COMPENSATION
COMPENSATION DISCUSSION & ANALYSIS |
This CD&A has four sections:
Topic |
Page |
Summary |
24 |
Elements of Compensation
Program |
27 |
Compensation Process and
Policies |
31 |
Human Capital &
Compensation Committee Report |
34 |
SUMMARY
Compensation Philosophy
Attract, Motivate,
Reward and Retain |
|
Encourage Strong
Financial Performance |
|
Align Pay
with Performance |
Entice and keep superior executive talent committed to our Company, in a highly competitive environment |
|
Encourage strong financial performance on an annual and long-term basis, without encouraging excessive risks |
|
Compensation is directly linked to Company performance, including the progress being made against strategic growth initiatives |
2023 Shareholder Engagement
2023
Shareholder Engagement |
|
Shareholders Contacted |
Director Participation |
Over
66% of our
outstanding shares
at the time of invitation |
Two
independent Directors,
together with members of senior
management, participated
in all
engagement conversations |
Primary Compensation Topic Discussed |
● Fiscal 2023 CEO Compensation Overview |
24 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
Shareholder Engagement
Our Board and senior management team have a long
and continuous history of engaging with shareholders and responding to their feedback. 2023 marked the 12th consecutive year
that members of the Board –– the Chair of the Corporate Responsibility, Sustainability & Governance Committee and
the Chair of the Human Capital & Compensation Committee –– together with members of senior management, engaged in
conversations with our shareholders to exchange ideas and share perspectives.
In 2023, we reached out to shareholders holding
over 66% of our outstanding shares of Common Stock, and two independent directors and members of our senior management spoke with shareholders
who accepted our invitation to engage. Those who declined our invitation indicated either that they did not have any questions or a need
to engage, and a few did not respond. We provided all invited shareholders with a presentation that outlined the topics on which we wished
to obtain their feedback. Shareholders who declined to engage did not indicate that they had any concerns with the matters set forth in
the presentation. We held a call with proxy advisory firm Glass Lewis to discuss our outreach process and the shareholder feedback we
received. We had also invited proxy advisory firm Institutional Shareholder Services (“ISS”) who declined to engage this year.
Compensation of Our CEO in Fiscal 2023
The following table outlines the compensation program
for our CEO in fiscal 2023. Our CEO’s annual salary and target bonus opportunity did not change in fiscal 2023 from fiscal 2022
and prior years.
The Company’s actual adjusted operating income
in fiscal 2023 was less than the adjusted operating income threshold under our 2023 Management Bonus Plan. Accordingly, no cash bonus
was paid to our CEO for fiscal 2023. See “Annual Performance-Based Cash Bonus Opportunity—Annual Cash Bonus for Fiscal 2023”
beginning on page 27 below. Further, as previously disclosed in our 2023 proxy statement, in light of the Company’s financial results
in fiscal 2022, and in order to further align her interests with those of our shareholders, our CEO has, for the second year in a row,
declined to accept an LTIP equity award for fiscal 2023. As such, her total compensation for fiscal 2023 consisted only of her salary
and 2023 Management Bonus Plan opportunity.
Pay
Element |
Component |
Performance
Element |
Link
to Strategic
Growth Initiatives |
Base
Salary
and Other
(100%) |
Cash |
● Reviewed
periodically in light of market practices, performance factors, and advice from our independent
compensation consultant
● Fiscal
2023 base salary remained unchanged from pre-pandemic levels
|
● Reflects
job responsibilities, skills and experience and provides a reasonable, competitive level of fixed compensation |
|
2024 PROXY STATEMENT
|
25 |
EXECUTIVE AND DIRECTOR COMPENSATION
Executive and Director Compensation Best Practices, Based on
Shareholder Feedback over Time
Executive
and Director Compensation Best Practices |
|
Value driving performance metrics in the annual bonus plan and LTIP that measure progress on our financial results, strategic growth initiatives and include both a sustainability and a diversity core metric in LTIP awards |
|
Robust stock ownership guidelines and holding requirements for our CEO, other senior executives (including our NEOs) and independent Directors |
|
No tax gross-ups (excluding those in connection with standard relocation expenses) |
|
All equity awards subject to “double trigger” vesting upon a change in control |
|
Cap on the aggregate fair market value of equity awards made to each independent Director in any calendar year |
|
Annual compensation risk assessment by management and an independent compensation consultant |
|
Annual peer group review by an independent compensation consultant |
|
Incentive compensation clawback policy (in place prior to new SEC regulation) in the case of financial restatements and other activity that is in conflict with or adverse to the interests of the Company, applicable to both the annual bonus plan and LTIP |
|
No hedging and pledging activities in Company stock by our Directors, executives (including our NEOs) and associates |
|
Bonus and performance share caps |
|
Annual benchmarking of independent Director compensation by an independent
compensation consultant |
26 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
ELEMENTS OF COMPENSATION PROGRAM
Components of Compensation
Our executive compensation program has historically
consisted of four basic elements:
|
|
Base
salary |
|
|
Annual
performance-based cash bonus opportunity |
|
|
Long-term
incentive equity awards (time-based and performance-based) |
|
|
Employee
benefits and perquisites |
Base Salary
Purpose.
The HC&C Committee intends that base salary provide a reasonable, competitive level of fixed
compensation based on responsibilities, skills and experience.
Our HC&C Committee reviews base salary benchmarking
information provided by their independent compensation consultant on an annual basis. The base salaries of our NEOs are generally +/-
10% of the median of our Peer Group and our industry. We believe that setting salaries in this range mitigates the incentive that might
otherwise exist for an executive to support short-term focused or higher-risk business strategies if fixed compensation was set substantially
below the median.
Annual Performance-Based Cash Bonus Opportunity
Purpose.
Our annual bonus plan rewards performance over a one-year period against a financial performance
measure pre-established by the HC&C Committee. As in the past, this measure for fiscal 2023 was adjusted operating income. The HC&C
Committee believes that, as a measure of operating performance, adjusted operating income measures progress on our strategic growth initiatives
and is an important driver of shareholder value.
Terms
of Annual Bonus Plan. The HC&C Committee assigns our executives, including our CEO and the
other NEOs, a bonus target opportunity expressed as a percentage of base salary (for our CEO, 160% of base salary, and for our other
NEOs, ranging from 50% of base salary to 100% of base salary). For fiscal 2023, these formula-driven cash payouts could have ranged from
zero, if Company performance fell below an adjusted operating income threshold, to 100% of bonus opportunity, if the adjusted operating
income target was met, and up to a maximum of 200% of the target bonus opportunity, if performance exceeded target. Based on market trends
surveyed by our HC&C Committee’s independent compensation consultant and reviewed with the HC&C Committee, we believe that
our management’s bonus opportunities in fiscal 2023, as a percentage of base salaries, were generally in-line with those of our
Peer Group and our industry. Our annual bonus plan provides the HC&C Committee with the authority to reduce the amount of bonus paid
to a participant, or some or all participants, if the HC&C Committee determines that such reduction is appropriate.
Annual
Cash Bonus for Fiscal 2023. The Company’s actual adjusted operating loss in fiscal 2023
was less than the adjusted operating income threshold of $35.8 million under our 2023 Management Bonus Plan. Accordingly, no cash bonuses
for fiscal 2023 were paid to our CEO or the other NEOs.
|
2024 PROXY STATEMENT
|
27 |
EXECUTIVE AND DIRECTOR COMPENSATION
Long-Term Incentive Equity Awards
Purpose.
The HC&C Committee uses performance-based equity as a reward for the contribution to our
performance, including the progress made on our strategic growth initiatives, and to align the interests of members of our senior leadership
team with those of our shareholders. Time-based equity is used to provide for retention, thereby promoting stability of our senior leadership
team, and to reward our senior leadership team.
Types
of Awards. During fiscal 2023, we granted time-based and performance-based awards to members
of our senior leadership team, including the NEOs, under our LTIP, except that, as previously disclosed in our 2023 proxy statement,
in light of the Company’s financial results in fiscal 2022, and in order to further align her interests with those of our shareholders,
our CEO has, for the second year in a row, declined to accept an LTIP equity award for fiscal 2023. As with other elements of our executive
compensation, based on data surveyed by the HC&C Committee’s independent compensation consultant and reviewed with the HC&C
Committee, we believe that the award date value of these equity awards in fiscal 2023 were generally within the range of our Peer Group
and our industry. These awards consisted of time-based restricted stock units (“TRSUs”) and performance-based restricted
stock units (“PRSUs”).
The fiscal 2023 PRSU performance metrics reflect
the continued use of (i) the Company’s core historical performance metrics, (ii) a relative adjusted ROIC modifier, and (iii) two
ESG-based metrics consisting of (a) the percentage use of Better Cotton in the Company’s products, and (b) the percentage representation
by Black/African American associates at the Company’s U.S. corporate offices. See “Performance-Based Stock Awards—PRSU
Performance Metrics” beginning on page 28 below. For fiscal 2023, the HC&C Committee continued to grant LTIP equity awards for
senior leadership team members (other than our CEO) comprised of 50% TRSUs and 50% PRSUs. These TRSUs and PRSUs have an annual vesting
over three years and a three-year performance period, respectively.
Our HC&C Committee determines whether the TRSUs
and/or PRSUs are settled in shares of Common Stock, in cash equal to the fair market value of such shares at the time of vesting, or part
in shares of Common Stock and part in cash. To date, all awards under our LTIP have been settled in shares of Common Stock. We typically
award equity once each fiscal year, as well as in connection with certain new-hire awards and promotions. As of February 3, 2024 (the
end of fiscal 2023), there were 470,805 shares of Common Stock available for grant under our Fourth Amended and Restated 2011 Equity Incentive
Plan (the “2011 Equity Plan”).
Time-Based
Stock Awards. The TRSUs awarded in fiscal 2023 are subject to annual vesting, in three equal
annual installments. The recipient must be employed by the Company on the applicable vesting dates in order to receive the vesting shares.
The three-year vesting period underscores the long-term and retentive focus of this award program.
Mindful to avoid “pay for failure,”
generally, the HC&C Committee requires that TRSUs provide for forfeiture if the awardee leaves the Company voluntarily or is terminated
by the Company without cause.
Performance-Based
Stock Awards. Our fiscal 2023 PRSUs tie payouts directly to Company performance based on pre-established
performance metrics over a three-year performance period (fiscal 2023–2025), with cliff vesting of earned shares at the end of
the three-year performance period.
|
PRSU Performance Metrics.
In fiscal 2023, the HC&C Committee continued the use of (i) the Company’s core historical
performance metrics, (ii) a relative adjusted ROIC modifier, and (iii) two ESG-based metrics consisting of (a) the percentage use
of Better Cotton in the Company’s products and (b) the percentage representation by Black/African American associates at our
U.S. corporate offices. The HC&C Committee sets targets for the performance period based on the Board approved multi-year operating
plan, which takes into account any planned stock repurchases. Eligible members of our senior leadership team, including our NEOs,
may earn from 0% to 200% of their target 2023 PRSUs based on the following metrics: |
28 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
Performance Metric
(weighting) |
Rationale
for Selection |
Adjusted
EPS
(50%) |
● Creates
a strong focus on our overall profit goal and the underlying drivers of revenue growth, cost control, cash flow, and ultimately
total shareholder return
|
Adjusted Operating
Margin Expansion
(20%) |
● Added
in fiscal 2016 based on feedback from our shareholders
● Directly
measures the progress we are making on our strategic growth initiatives
● Management
can more directly affect these metrics
● Key
valuation drivers in the specialty retail industry
|
Adjusted
ROIC
(20%) |
Responsibly
Sourced Cotton
(5%) |
● Added
in fiscal 2020 as a modifier, and converted into a core performance metric in fiscal 2022
● Measures
the percentage use of Better Cotton in the Company’s products
● Focuses
on Company’s sustainability ESG initiatives
|
Black
/African
American Associate
Representation
(5%) |
● Added
in fiscal 2022
● Measures
the percentage representation by Black/African American associates at the Company’s U.S. corporate offices
● Focuses
on Company’s DE&I initiatives
|
Relative
Adjusted
ROIC Modifier
(+/-38%) |
● Added
first in fiscal 2018 (and resumed use in fiscal 2021) in response to shareholder feedback calling for use of a relative metric
and noting adjusted ROIC as a preferred metric
● Directly
measures the progress we are making on our strategic growth initiatives
● Focuses
on direct operational performance (as compared to the use of relative TSR, which the Company previously discontinued based on
shareholder feedback)
|
|
|
|
Modifier. The
relative adjusted ROIC modifier, in the case of significant outperformance or underperformance, adjusts up or down the number of
shares of Common Stock otherwise earned by reference to the core performance metrics. It is based on the ranking of our Adjusted
ROIC relative to the Adjusted ROIC of companies in our Peer Group at the end of the three-year performance period, as illustrated
below: |
|
|
Adjusted ROIC Ranking
Compared to Peer Group: |
Payout Percentage of
PRSUs Otherwise Earned |
1st – 4th |
138% |
5th – 8th |
100% (Target) |
9th – 13th |
62% |
Future
LTIP Performance Goals. While the Company discloses performance metrics and their weighting for
outstanding PRSUs, the Company does not disclose performance targets for PRSUs, other than performance targets related to PRSUs which
are vested, because to do so would disclose material non-public and/or competitively sensitive information.
|
2024 PROXY STATEMENT
|
29 |
EXECUTIVE AND DIRECTOR COMPENSATION
Settlement
of 2020-2022 PRSU Award. The terms of the PRSUs that were awarded in fiscal 2020 and that vested
in fiscal 2023 are summarized below:
|
Performance was measured over a three-year period, with cliff vesting of earned shares following the end of the period. |
|
|
|
Performance metrics consisted of total ecommerce sales as a percentage of total sales (80%) and sales of Gymboree product (20%). |
|
|
|
A modifier which adjusts (up, down or not at all) the number of shares of Common Stock otherwise earned by reference to the above-mentioned performance metrics. The modifier is the percentage of Better Cotton used in the Company’s products as of fiscal 2022. |
The threshold, target and maximum performance goals for these PRSU
awards are as follows:
Performance
Measure |
Threshold
(0%) |
Target
(100%) |
Maximum
(200%) |
Actual
Results |
E-commerce
Penetration (80%) |
25.0% (or less) |
35.0% |
45.0% (or greater) |
47.5% |
Gymboree
Sales (20%) |
$20.0 million (or less) |
$30.0
million |
$50.0 million (or greater) |
$56.9
million |
Better
Cotton Modifier (+/- 25%) |
10.0% (or less) |
20.0% |
30.0% (or greater) |
72.0% |
These PRSUs vested (following the end of the three-fiscal
year performance period of fiscal 2020-2022) based upon: (i) the Company’s achievement of 47.5% in total e-commerce sales out of
total sales (excluding wholesale and international) for fiscal 2022; (ii) the Company’s achievement of $56.9 million in sales of
Gymboree product in fiscal 2022; and (iii) the Company’s achievement of 72.0% in the use of Better Cotton in the Company’s
products as of fiscal 2022, all of which, in accordance with the performance metrics and terms established by the HC&C Committee,
resulted in a payout of 250% for these PRSUs.
Non-GAAP Financial Measures
The Company uses non-GAAP results to measure operating
performance, including to measure performance for purposes of the Company’s incentive compensation. Adjusted financial measures
are non-GAAP measures and are not intended to replace GAAP financial information. The Company believes that the unusual and non-recurring
items excluded as non-GAAP adjustments do not reflect the performance of its core business and that providing supplemental disclosure
to investors in the form of adjusted financial measures facilitates comparisons of the past and present performance of its core business.
Employee Benefits and Perquisites
The Company provides its senior leadership team
(including the NEOs, but other than our CEO) with the same employee benefits other employees receive, including health insurance coverage.
In addition, they also receive group long-term disability coverage, an opportunity to participate in our voluntary deferred compensation
plan, an opportunity to purchase supplemental disability coverage, and certain other modest perquisites. In the case of our CEO, perquisites
were agreed to as a result of the arms-length negotiation of her employment agreement and were determined by the HC&C Committee to
be important for retaining an executive of her talent. Any personal income taxes due as a result of these perquisites are the responsibility
of the recipients, as we do not provide tax gross-ups (other than in connection with certain standard relocation expenses).
The Company uses severance guidelines. These guidelines
are designed to offer our employees fair and adequate replacement income based upon market practice. In general, all of the members of
our senior leadership team (including the NEOs, but other than our CEO) participate under the same severance guidelines that are applied
to other employees. Our CEO’s severance arrangements are as provided in her employment agreement.
30 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR
COMPENSATION
COMPENSATION PROCESS AND POLICIES
Setting Compensation
In setting compensation for our CEO and the other NEOs, our
HC&C Committee takes into account multiple objective and position-specific factors, including:
|
● |
the nature and scope of each executive’s responsibilities; |
|
|
|
|
● |
each executive’s experience, performance and contribution to the Company and its strategic growth initiatives; |
|
|
|
|
● |
comparative compensation data for executives in similar positions at companies participating in a retail survey conducted
by an independent third-party consulting firm, as described below, and at companies in our Peer Group; |
|
|
|
|
● |
the Company’s performance; |
|
|
|
|
● |
prior equity awards and potential future earnings from equity awards; |
|
|
|
|
● |
retention needs; and |
|
|
|
|
● |
other factors the HC&C Committee deems relevant. |
The HC&C Committee annually reviews with its independent
compensation consultant total compensation, and its individual components, at the 25th, 50th and 75th percentile levels paid to
executives in similar positions at specialty retailers (including companies in our Peer Group) by reference to an industry-wide
retail survey prepared by an independent survey provider to understand where the compensation our HC&C Committee sets falls
relative to market practice. The HC&C Committee utilizes this data as a reference point, along with the other factors outlined
above, in determining whether an executive’s total compensation opportunity is likely to provide sufficient incentive, motivation
and retention. The HC&C Committee also uses this data to determine whether an executive’s total compensation opportunity
properly reflects the executive’s role and scope of responsibilities relative to similarly situated executives of companies
in the retail survey and our Peer Group. We do not use this data as a single determinative factor, but rather as an external check
and reference point to verify that our executive compensation programs are reasonable and competitive.
|
2024 PROXY STATEMENT
|
31 |
EXECUTIVE AND DIRECTOR
COMPENSATION
Peer Group
The HC&C Committee regularly reviews the members of our
Peer Group with the assistance of its independent compensation consultant. The review is guided by the following principles: (i)
comparable business content (i.e. specialty retailers); (ii) company size (range of 0.5x to 2.0x the Company’s annual revenue);
(iii) statistical reliability; (iv) executive talent sources; (v) competition for investor capital; and (vi) overall reasonableness.
The HC&C Committee approved the following 14 companies as the members of our peer group during fiscal 2023 (the “Peer
Group”):
Fiscal 2023 Peer Group |
Abercrombie
& Fitch |
Genesco |
American
Eagle Outfitters |
G-III Apparel Group |
Buckle |
Guess? |
Caleres |
Lands’ End |
Carter’s |
Oxford Industries |
Chico’s
FAS |
Tilly’s |
Designer
Brands |
Zumiez |
Stock Ownership Guidelines and Holding Requirements
In order to ensure that the interests of our senior leadership
team (including our CEO and the other NEOs) and the members of our Board are properly aligned with those of our shareholders,
upon the recommendation of the HC&C Committee, the Board adopted stock ownership guidelines for our independent Directors
and senior leadership team. The HC&C Committee reviews the equity ownership of those individuals subject to this guideline
on an annual basis to determine compliance with the Company’s stock ownership guidelines and holding requirements. Under
these guidelines, unvested PRSUs do not count as stock earned. The ownership multiples under the guidelines are as follows:
Individual |
Ownership
Multiple |
Chief
Executive Officer |
5x Base Salary |
Brand President, COO/CFO &
Senior Vice Presidents |
3x Base Salary |
Independent
Directors |
5x Annual Cash Retainer |
Also under our guidelines, our CEO, the other NEOs and the
other members of our senior leadership team are required to retain 67% of the net shares (after withholding taxes) acquired upon
the vesting of PRSUs and TRSUs until the date on which he or she satisfies (and, for any and all periods of time during which
he or she fails to maintain) the relevant ownership guideline multiple set forth above.
32 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR
COMPENSATION
Prohibition on Hedging/Pledging of Common Stock
Company policy prohibits
all Directors, officers (including our CEO and the other NEOs) and employees from engaging in hedging and pledging, as well as
trading in derivatives, of our Common Stock, including puts, calls and other financial derivatives, to ensure that the interests
of our Directors, officers and employees are aligned with those of our shareholders. Shareholders may view the Company’s
Insider Trading Policy (which includes the foregoing prohibition on hedging and pledging of the Company’s Common Stock)
on the Company’s corporate website http://corporate.childrensplace.com in the
“Corporate Overview” section under the “Investor Relations” tab and in the section entitled “Corporate
Info — Governance Documents”.
Taxation
Section 162(m) of the Internal Revenue Code of 1986 (the “Code”),
as amended by the Tax Cuts and Jobs Act of 2017, generally limits the deductibility of certain compensation in excess of $1 million
paid in any one year to any “covered employee.” A “covered employee” under Section 162(m) is any employee
who has served as our CEO, CFO or other NEO for tax years after December 31, 2016.
Section 409A of the Code, which governs the form and timing
of payment of deferred compensation, imposes sanctions, including a 20% penalty and an interest penalty, on the recipient of deferred
compensation that does not comply with Section 409A. The HC&C Committee takes into account the potential implications of Section
409A in determining the form and timing of compensation awarded to executives.
The HC&C Committee will also take into account the potential
implications of Sections 280G and 4999 of the Code in determining potential payments to be made to executives in connection with
a change in control. Nevertheless, to the extent that certain payments upon a change in control are classified as excess parachute
payments, the Company may not be able to deduct such payments pursuant to Section 280G, and the recipient of such payments may
be subject to the excise tax under Section 4999.
The Company does not provide tax gross-ups for any “golden
parachute” excise tax payable by the recipient under Sections 280G or 4999 of the Code. Rather, upon a termination of employment
in connection with a change in control that gives rise to the payment of severance, our CEO (pursuant to her employment agreement)
and the other members of our senior leadership team, including the NEOs other than the CEO (pursuant to the Company’s change
in control severance agreements), will receive the greater of: (i) the largest portion of the payment that is not subject to a
“golden parachute” excise tax under Sections 280G or 4999 of the Code; or (ii) the full amount of the payment if the
net-after-excise tax amount retained by the executive would exceed the amount in clause (i).
|
2024 PROXY STATEMENT
|
33 |
HUMAN CAPITAL & COMPENSATION COMMITTEE REPORT
The Human Capital & Compensation Committee has reviewed
and discussed with management the foregoing Compensation Discussion & Analysis and, based on such review and discussion, recommended
to our Board that the Compensation Discussion & Analysis be included in the Company’s Annual Report on Form 10-K for
fiscal 2023 and in this Proxy Statement.
The foregoing Human Capital & Compensation Committee
report has been submitted by the members of the Human Capital & Compensation Committee: Muhammad Asif Seemab (Chair), Turki
Saleh A. AlRajhi and Muhammad Umair.
34 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR
COMPENSATION
Summary Compensation Table
The following table shows the compensation of the Company’s
NEOs, including the Company’s CEO (our principal executive officer), the Company’s CFO (our principal financial officer)
and the other most highly compensated executives who were designated by the Board as “executive officers” of the Company,
for fiscal 2023, 2022 and 2021, as applicable.
Name and Principal Position | |
Fiscal Year | |
Salary(1) | |
Bonus | |
Stock Awards(2) | |
Non-Equity Incentive Plan Compensation(3) | |
All Other Compensation | |
Total |
Jane Elfers | |
| 2023 | | |
$ | 1,100,000 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 150,781 | (4) | |
$ | 1,250,781 | |
President and | |
| 2022 | | |
| 1,100,000 | | |
| | | |
| — | | |
| — | | |
| 144,770 | (4) | |
| 1,244,770 | |
Chief Executive Officer | |
| 2021 | | |
| 1,100,000 | | |
| | | |
| 7,069,367 | | |
| 3,520,000 | | |
| 141,765 | (4) | |
| 11,831,132 | |
Maegan Markee(5) | |
| 2023 | | |
$ | 619,038 | | |
| | | |
$ | 1,338,330 | | |
$ | — | | |
$ | 8,969 | (6) | |
$ | 1,966,337 | |
Brand President | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Sheamus
Toal(7) | |
| 2023 | | |
$ | 686,892 | | |
$ | | | |
$ | 1,272,557 | | |
$ | — | | |
$ | 15,823 | (8) | |
$ | 1,975,272 | |
Chief Operating Officer and | |
| 2022 | | |
| 150,000 | | |
| 100,000 | (9) | |
| 1,700,000 | (9) | |
| — | | |
| 2,230 | (8) | |
| 1,952,230 | |
Chief Financial Officer | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Jared Shure | |
| 2023 | | |
$ | 425,000 | | |
| | | |
$ | 268,492 | | |
$ | — | | |
$ | 15,059 | (10) | |
$ | 708,551 | |
Senior Vice President, | |
| 2022 | | |
| 419,712 | | |
| | | |
| 750,085 | | |
| — | | |
| 13,570 | (10) | |
| 1,183,367 | |
General Counsel | |
| 2021 | | |
| 380,385 | | |
| | | |
| 500,026 | | |
| 329,577 | | |
| 14,483 | (10) | |
| 1,524,471 | (11) |
Claudia
Lima-Guinehut(12) | |
| 2023 | | |
$ | 173,973 | | |
| | | |
$ | — | | |
$ | — | | |
$ | 5,301 | (13) | |
$ | 179,274 | |
Former Senior Vice President, | |
| 2022 | | |
| 500,000 | | |
| | | |
| 1,250,011 | | |
| — | | |
| 12,911 | (13) | |
| 1,762,922 | |
Global Merchandising and | |
| 2021 | | |
| 500,000 | | |
| | | |
| 750,036 | | |
| 600,000 | | |
| 14,833 | (13) | |
| 1,864,869 | |
Strategic Partnerships | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Notes to the Summary Compensation Table
(1) |
Includes any amounts deferred under our Deferred Compensation Plan and contributed under our 401(k)
Plan. Fiscal 2023, 2022 and 2021 were each 52-week fiscal years. |
|
|
(2) |
Does not include dividend equivalent shares accrued on applicable awards. The stock award grant date fair value for both
time-vested and performance-based stock awards is determined in accordance with FASB ASC Topic 718, in the case of performance-based
stock awards, based on the number of shares probable of vesting as determined by those rules, multiplied by the fair market
value of one share of our Common Stock on the grant date. For fiscal 2023, at the maximum possible vesting values, the performance-based
stock awards set forth in this column, computed on the basis of the fair value price of one share of our Common Stock on the
grant date, were $1,338,330, $1,272,557 and $268,492 for Ms. Markee, Mr. Toal and Mr. Shure, respectively. For fiscal 2022,
at the maximum possible vesting values, the performance-based stock awards set forth in this column, computed on the basis
of the fair value price of one share of our Common Stock on the grant date, was $750,085 for Mr. Shure; Mr. Toal did not receive
any performance-based stock awards during fiscal 2022. For fiscal 2021, at the maximum possible vesting values, the performance-based
stock awards set forth in this column, computed on the basis of the fair value price of one share of our Common Stock on the
grant date, were $14,274,891 and $1,500,077 for Ms. Elfers and Mr. Shure, respectively. For more information concerning the
assumptions used in determining the portion of the performance-based awards that are probable of vesting, see Note 6 - Stock-Based
Compensation in the accompanying Notes to Consolidated Financial Statements filed in our Annual Report on Form 10-K for our
2023 fiscal year; see also the “Grants of Plan-Based Awards” table below. |
|
|
(3) |
The amounts shown are incentives earned in accordance with the annual incentive arrangements described in the Compensation
Discussion & Analysis above, and which are payable pursuant to the annual Management Bonus Plan approved by the HC&C
Committee for each respective fiscal year. Amounts shown are for services performed during the fiscal year and paid during
the subsequent fiscal year. |
|
|
(4) |
The amounts shown consist of: (i) for fiscal 2023, $84,210 for a driver, $42,841 for driver reimbursements, $19,154 for
a leased vehicle, $516 for life insurance premiums, and $4,060 for executive long-term disability premiums; (ii) for fiscal
2022, $83,292 for a driver, $45,235 for driver reimbursements, $11,555 for a leased vehicle, $516 for life insurance premiums,
and $4,172 for executive long-term disability premiums; and (iii) for fiscal 2021, $82,625 for a driver, $35,296 for driver
reimbursements, $10,392 for a leased vehicle, $515 for life insurance premiums, $6,211 for executive long-term disability
premiums and $6,726 for supplemental life insurance premiums. |
|
|
(5) |
Ms. Markee was appointed as an executive officer on August 10, 2023. Accordingly, the table includes Ms. Markee’s
compensation only for fiscal 2023. |
|
|
(6) |
The amounts shown consist of $516 for life insurance premiums, $876 for executive long-term disability premiums and $7,577
for 401(k) plan matching contributions. |
|
2024 PROXY STATEMENT
|
35 |
EXECUTIVE AND DIRECTOR
COMPENSATION
(7) |
Mr. Toal commenced serving as an executive officer on November 7, 2022. Accordingly, the table includes
Mr. Toal’s compensation only for fiscal 2023 and fiscal 2022. |
|
|
(8) |
The amounts shown consist of: (i) for fiscal 2023, $516 for life insurance premiums, $876 for executive long-term disability
premiums and $14,431 for 401(k) plan matching contributions; and (ii) for fiscal 2022, $84 for life insurance premiums, $146
for executive long-term disability premiums and $2,000 for 401(k) plan matching contributions. |
|
|
(9) |
Awarded in connection with Mr. Toal’s appointment as Senior Vice President, Chief Financial Officer on November
7, 2022, as set forth in the Letter Agreement dated October 16, 2022 between The Children’s Place Services Company,
LLC and Mr. Toal, filed on November 30, 2022 as Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company for the quarter
ended October 29, 2022. The bonus and TRSUs reflected in the above table were agreed to by the Company as part of the negotiation
to recruit Mr. Toal from his then current senior executive position in order to compensate Mr. Toal for the bonus and equity
compensation forfeited by Mr. Toal upon his departure from his former employer. |
|
|
(10) |
The amounts shown consist of: (i) for fiscal 2023, $516 for life insurance premiums, $876 for executive long-term disability
premiums and $13,854 for 401(k) plan matching contributions; (ii) for fiscal 2022, $324 for life insurance premiums, $969
for executive long-term disability premiums and $12,277 for 401(k) plan matching contributions; and (iii) for fiscal 2021,
$621 for life insurance premiums, $1,031 for executive long-term disability premiums and $12,831 for 401(k) plan matching
contributions. |
|
|
(11) |
The amount shown includes deferred cash awards in the amount of $75,000 and price leveraged cash awards in the amount
of $225,000, in each case granted prior to Mr. Shure becoming an executive officer. |
|
|
(12) |
On June 7, 2023, the Company announced that Claudia Lima-Guinehut, Senior Vice President, Global Merchandising and Strategic
Partnerships, left the Company effective June 6, 2023. |
|
|
(13) |
The amounts shown consist of: (i) for fiscal 2023, $133 for life insurance premiums, $476 for executive long-term disability
premiums and $4,692 for 401(k) plan matching contributions; (ii) for fiscal 2022, $387 for life insurance premiums, $1,478
for executive long-term disability premiums and $11,046 for 401(k) plan matching contributions; and (iii) for fiscal 2021,
$386 for life insurance premiums, $1,885 for executive long-term disability premiums and $12,562 for 401(k) plan matching
contributions. |
36 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR
COMPENSATION
Grants of Plan-Based Awards
The following table shows information concerning the non-equity
incentive awards, equity incentive awards and other stock awards that were granted to the Company’s NEOs during fiscal 2023.
| |
| | |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | |
Estimated Future Payouts Under Equity Incentive Plan Awards | | |
All Other Stock Awards: Number of Shares of Stock | | |
Grant Date Fair Value of Stock and | |
Name and Principal Position | |
Grant Date | |
Threshold ($) | | |
Target ($) | | |
Maximum ($) | | |
Threshold (#) | | |
Target (#)(2) | | |
Maximum (#)(2) | | |
or Units (#) | | |
Option Awards(3) | |
Jane
Elfers(4) | |
| | | |
$ | 0 | | |
$ | 1,760,000 | | |
$ | 3,520,000 | | |
| | | |
| | | |
| | | |
| | | |
| | |
President and | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Chief Executive Officer | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Maegan
Markee | |
| | | |
$ | 0 | | |
$ | 725,000 | | |
$ | 1,450,000 | | |
| | | |
| | | |
| | | |
| | | |
| | |
Brand President | |
| 6/9/23 | (5) | |
| | | |
| | | |
| | | |
| | | |
| 20,693 | | |
| 31,040 | | |
| | | |
$ | 369,163 | |
| |
| 6/9/23 | (6) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 20,693 | | |
| 369,163 | |
| |
| 8/1/23 | (7) | |
| | | |
| | | |
| | | |
| | | |
| 9,378 | | |
| 14,067 | | |
| | | |
| 300,002 | |
| |
| 8/1/23 | (8) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 9,378 | | |
| 300,002 | |
Sheamus
Toal | |
| | | |
$ | 0 | | |
$ | 725,000 | | |
$ | 1,450,000 | | |
| | | |
| | | |
| | | |
| | | |
| | |
Chief Operating Officer and | |
| 6/9/23 | (9) | |
| | | |
| | | |
| | | |
| | | |
| 24,455 | | |
| 36,683 | | |
| | | |
$ | 436,277 | |
Chief Financial Officer | |
| 6/9/23 | (10) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 24,455 | | |
| 436,277 | |
| |
| 8/1/23 | (11) | |
| | | |
| | | |
| | | |
| | | |
| 6,252 | | |
| 9,378 | | |
| | | |
| 200,001 | |
| |
| 8/1/23 | (12) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 6,252 | | |
| 200,001 | |
Jared
Shure | |
| | | |
$ | 0 | | |
$ | 212,500 | | |
$ | 425,000 | | |
| | | |
| | | |
| | | |
| | | |
| | |
Senior Vice President, | |
| 6/9/23 | (13) | |
| | | |
| | | |
| | | |
| 0 | | |
| 7,525 | | |
| 11,288 | | |
| | | |
$ | 134,246 | |
General Counsel | |
| 6/9/23 | (14) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 7,525 | | |
| 134,246 | |
Notes to the Grants of Plan-Based Awards Table
(1) |
Amounts reflect bonuses available to be earned in accordance with our annual Management Bonus Plan
approved by the HC&C Committee for fiscal 2023. |
|
|
(2) |
Following the close of Fiscal 2023 on February 13, 2024, as a result of the occurrence of the Change in Control at the
Company triggered by Mithaq’s acquisition of over 50% of the Company’s common stock, and in accordance with the
terms and conditions of the Plan, all performance shares granted but unvested had performance criteria eliminated and such
performance shares automatically convert into service-based performance shares. |
|
|
(3) |
The stock award grant date fair value for both time-vested and performance-based stock awards is determined in accordance
with FASB ASC Topic 718, in the case of performance-based stock awards, based on the number of shares probable of vesting
as determined by those rules, multiplied by the fair market value of one share of our Common Stock on the grant date. The
estimated fair value of the performance-based awards is based upon the probable outcome of the performance conditions on the
date that each award was communicated to each of our NEOs for the performance period and the fair market value of our Common
Stock on that date. For more information, see Note 6 - Stock-Based Compensation in the accompanying Notes to Consolidated
Financial Statements filed in our Annual Report on Form 10-K for our 2023 fiscal year. The maximum possible vesting values
of the performance-based stock awards awarded for fiscal 2023, computed on the basis of the fair value price of one share
of our Common Stock on the grant date, were $1,338,330, $1,272,557 and $268,492 for Ms. Markee, Mr. Toal and Mr. Shure, respectively. |
|
|
(4) |
As previously disclosed in our 2023 proxy statement, in light of the Company’s financial results in fiscal 2022,
and in order to further align her interests with those of our shareholders, our CEO has, for the second year in a row, declined
to accept an LTIP equity award for fiscal 2023. |
|
|
(5) |
Awarded pursuant to the terms of TRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. Of the TRSUs
awarded, one-third vest on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided Ms. Markee is employed by the Company
on the respective vesting dates. |
|
|
(6) |
Awarded pursuant to the terms of PRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. The amounts
shown reflect the number of shares of Common Stock able to be earned by Ms. Markee based upon the achievement of the performance
targets for fiscal years 2023-2025. |
|
2024 PROXY STATEMENT
|
37 |
EXECUTIVE AND DIRECTOR
COMPENSATION
(7) |
Awarded pursuant to the terms of TRSUs granted on August 1, 2023 under the Company’s 2011 Equity
Plan. Of the TRSUs awarded, one-third vest on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided Ms. Markee is
employed by the Company on the respective vesting dates. |
|
|
(8) |
Awarded pursuant to the terms of PRSUs granted on August 1, 2023 under the Company’s 2011 Equity Plan. The amounts
shown reflect the number of shares of Common Stock able to be earned by Ms. Markee based upon the achievement of the performance
targets for fiscal years 2023-2025. |
|
|
(9) |
Awarded pursuant to the terms of TRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. Of the TRSUs
awarded, one-third vest on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided Mr. Toal is employed by the Company
on the respective vesting dates. |
|
|
(10) |
Awarded pursuant to the terms of PRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. The amounts
shown reflect the number of shares of Common Stock able to be earned by Mr. Toal based upon the achievement of the performance
targets for fiscal years 2023-2025. |
|
|
(11) |
Awarded pursuant to the terms of TRSUs granted on August 1, 2023 under the Company’s 2011 Equity Plan. Of the TRSUs
awarded, one-third vest on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided Mr. Toal is employed by the Company
on the respective vesting dates. |
|
|
(12) |
Awarded pursuant to the terms of PRSUs granted on August 1, 2023 under the Company’s 2011 Equity Plan. The amounts
shown reflect the number of shares of Common Stock able to be earned by Mr. Toal based upon the achievement of the performance
targets for fiscal years 2023-2025. |
|
|
(13) |
Awarded pursuant to the terms of TRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. Of the TRSUs
awarded, one-third vest on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided Mr. Shure is employed by the Company
on the respective vesting dates. |
|
|
(14) |
Awarded pursuant to the terms of PRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. The amounts
shown reflect the number of shares of Common Stock able to be earned by Mr. Shure based upon the achievement of the performance
targets for fiscal years 2023-2025. |
38 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR
COMPENSATION
Outstanding Equity Awards at Fiscal Year-End
The following
table contains information concerning equity awards held by the Company’s NEOs as of February 3, 2024 (the end of our 2023
fiscal year).
| |
| | |
Stock Awards | | |
| |
Name and Principal Position | |
Number of Shares or Units of Stock That Have Not Vested (#) | |
Market Value of Shares or Units of Stock 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) |
Jane
Elfers | |
| 8,558 | (3) | |
$ | 183,056 | | |
| | | |
| | |
President and | |
| | | |
| | | |
| 59,898 | (4) | |
$ | 1,281,218 | |
Chief Executive Officer | |
| | | |
| | | |
| | | |
| | |
Maegan
Markee | |
| 2,392 | (5) | |
$ | 51,165 | | |
| | | |
| | |
Brand President | |
| 8,532 | (6) | |
| 182,499 | | |
| | | |
| | |
| |
| 20,693 | (7) | |
| 442,623 | | |
| | | |
| | |
| |
| 9,378 | (8) | |
| 200,595 | | |
| | | |
| | |
| |
| | | |
| | | |
| 7,176 | (9) | |
$ | 153,495 | |
| |
| | | |
| | | |
| 12,797 | (10) | |
| 273,728 | |
| |
| | | |
| | | |
| 20,693 | (11) | |
| 442,623 | |
| |
| | | |
| | | |
| 9,378 | (12) | |
| 200,595 | |
Sheamus
Toal | |
| 38,037 | (13) | |
$ | 813,611 | | |
| | | |
| | |
Chief Operating Officer and | |
| 24,455 | (14) | |
| 523,092 | | |
| | | |
| | |
Chief Financial Officer | |
| 6,252 | (15) | |
| 133,730 | | |
| | | |
| | |
| |
| | | |
| | | |
| 24,455 | (16) | |
$ | 523,092 | |
| |
| | | |
| | | |
| 6,252 | (17) | |
| 133,730 | |
Jared
Shure | |
| 5,120 | (18) | |
$ | 109,517 | | |
| | | |
| | |
Senior Vice President, | |
| 7,525 | (19) | |
| 160,960 | | |
| | | |
| | |
General Counsel | |
| | | |
| | | |
| 5,760 | (20) | |
$ | 123,206 | |
| |
| | | |
| | | |
| 7,679 | (21) | |
| 164,254 | |
| |
| | | |
| | | |
| 7,525 | (22) | |
| 160,960 | |
Notes to the Outstanding Equity Awards at Fiscal Year-End
Table
(1) |
Calculated based on $21.39 per share, which was the closing market price per share of the Company’s
Common Stock, as reported on The NASDAQ Stock Market, on February 2, 2024. |
|
|
(2) |
Following the close of Fiscal 2023, on February 13, 2024, as a result of the occurrence of the Change in Control at the
Company triggered by Mithaq’s acquisition of over 50% of the Company’s common stock, and in accordance with the
terms and conditions of the Plan, all performance shares granted but unvested had performance criteria eliminated and such
performance shares automatically convert into service-based performance shares. |
|
|
(3) |
Represents unvested TRSUs initially comprising 25,670 shares of Common Stock awarded to Ms. Elfers on May 17, 2021. Of
the shares awarded, one-third vested and were delivered on the first and second anniversaries of the award date and one-third
will vest on the third anniversary of the award date, provided Ms. Elfers is employed by the Company on the respective vesting
date, subject to the terms and conditions of the 2011 Equity Plan. The shares reflected in the table will vest on May 17,
2024. |
|
|
(4) |
Awarded pursuant to the terms of PRSUs granted on March 18, 2021 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Ms. Elfers at target based upon the achievement of
the performance targets for fiscal years 2021-2023. Earned performance shares vested in April 2024, subject to the terms and
conditions of the 2011 Equity Plan. |
|
2024 PROXY STATEMENT
|
39 |
EXECUTIVE AND DIRECTOR
COMPENSATION
(5) |
Represents unvested TRSUs initially comprising 7,176 shares of Common Stock awarded to Ms. Markee on
April 5, 2021. Of the shares awarded, one-third vested and were delivered on the first and second anniversaries of the award
date and one-third will vest on the third anniversary of the award date, provided Ms. Markee is employed by the Company on
the respective vesting date, subject to the terms and conditions of the 2011 Equity Plan. The shares reflected in the table
vested on April 5, 2024. |
|
|
(6) |
Represents unvested TRSUs initially comprising 12,797 shares of Common Stock awarded to Ms. Markee on August 11, 2022.
Of the shares awarded, one-third vested and was delivered on May 23, 2023 and one-third will vest and be delivered on each
of May 23, 2024 and May 23, 2025, provided Ms. Markee is employed by the Company on the respective vesting dates, subject
to the terms and conditions of the 2011 Equity Plan. 4,266 of the shares reflected in the table will vest on May 23, 2024. |
|
|
(7) |
Represents unvested TRSUs initially comprising 20,693 shares of Common Stock awarded to Ms. Markee on June 9, 2023. Of
the shares awarded, one-third will vest and be delivered on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided
Ms. Markee is employed by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity
Plan. 6,897 of the shares reflected in the table will vest on May 22, 2024. |
|
|
(8) |
Represents unvested TRSUs initially comprising 9,378 shares of Common Stock awarded to Ms. Markee on August 1, 2023. Of
the shares awarded, one-third will vest and be delivered on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided
Ms. Markee is employed by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity
Plan. 3,126 of the shares reflected in the table will vest on May 22, 2024. |
|
|
(9) |
Awarded pursuant to the terms of PRSUs granted on April 5, 2021 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Ms. Markee at target based upon the achievement of
the performance targets for fiscal years 2021-2023. Earned performance shares will vest in April 2024, provided Ms. Markee
is employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(10) |
Awarded pursuant to the terms of PRSUs granted on August 11, 2022 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Ms. Markee at target based upon the achievement of
the performance targets for fiscal years 2022-2024. Earned performance shares will vest in April 2025, provided Ms. Markee
is employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(11) |
Awarded pursuant to the terms of PRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Ms. Markee at target based upon the achievement of
the performance targets for fiscal years 2023-2025. Earned performance shares will vest in April 2026, provided Ms. Markee
is employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(12) |
Awarded pursuant to the terms of PRSUs granted on August 1, 2023 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Ms. Markee at target based upon the achievement of
the performance targets for fiscal years 2023-2025. Earned performance shares will vest in April 2026, provided Ms. Markee
is employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(13) |
Represents unvested TRSUs initially comprising 50,716 shares of Common Stock awarded to Mr. Toal on December 1, 2022.
Of the shares awarded, twenty-five percent vested and were delivered on the first anniversary of the award date, twenty-five
percent will vest and be delivered on the second anniversary of the award date and fifty percent will vest and be delivered
on the third anniversary of the award date, provided Mr. Toal is employed by the Company on the respective vesting dates,
subject to the terms and conditions of the 2011 Equity Plan. 12,679 of the shares reflected in the table will vest on December
2, 2024. |
|
|
(14) |
Represents unvested TRSUs initially comprising 24,455 shares of Common Stock awarded to Mr. Toal on June 9, 2023. Of the
shares awarded, one-third will vest and be delivered on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided Mr.
Toal is employed by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity Plan.
8,151 of the shares reflected in the table will vest on May 22, 2024. |
|
|
(15) |
Represents unvested TRSUs initially comprising 6,252 shares of Common Stock awarded to Mr. Toal on August 1, 2023. Of
the shares awarded, one-third will vest and be delivered on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided
Mr. Toal is employed by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity
Plan. 2,084 of the shares reflected in the table will vest on May 22, 2024. |
|
|
(16) |
Awarded pursuant to the terms of PRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Mr. Toal at target based upon the achievement of
the performance targets for fiscal years 2023-2025. Earned performance shares will vest in April 2026, provided Mr. Toal is
employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(17) |
Awarded pursuant to the terms of PRSUs granted on August 1, 2023 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Mr. Toal at target based upon the achievement of
the performance targets for fiscal years 2023-2025. Earned performance shares will vest in April 2026, provided Mr. Toal is
employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
40 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR
COMPENSATION
(18) |
Represents unvested TRSUs initially comprising 7,679 shares of Common Stock awarded to Mr. Shure on
August 11, 2022. Of the shares awarded, one-third vested and was delivered on May 23, 2023 and one-third will vest and be
delivered on each of May 23, 2024 and May 23, 2025, provided Mr. Shure is employed by the Company on the respective vesting
dates, subject to the terms and conditions of the 2011 Equity Plan. 2,559 of the shares reflected in the table will vest on
May 23, 2024. |
|
|
(19) |
Represents unvested TRSUs initially comprising 7,525 shares of Common Stock awarded to Mr. Shure on June 9, 2023. Of the
shares awarded, one-third will vest and be delivered on each of May 22, 2024, May 22, 2025 and May 22, 2026, provided Mr.
Shure is employed by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity Plan.
2,508 of the shares reflected in the table will vest on May 22, 2024. |
|
|
(20) |
Awarded pursuant to the terms of PRSUs granted on August 2, 2021 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Mr. Shure at target based upon the achievement of
the performance targets for fiscal years 2021-2023. Earned performance shares will vest in April 2024, provided Mr. Shure
is employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(21) |
Awarded pursuant to the terms of PRSUs granted on August 11, 2022 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Mr. Shure at target based upon the achievement of
the performance targets for fiscal years 2022-2024. Earned performance shares will vest in April 2025, provided Mr. Shure
is employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(22) |
Awarded pursuant to the terms of PRSUs granted on June 9, 2023 under the Company’s 2011 Equity Plan. The amount
shown reflects the number of shares of Common Stock able to be earned by Mr. Shure at target based upon the achievement of
the performance targets for fiscal years 2023-2025. Earned performance shares will vest in April 2026, provided Mr. Shure
is employed by the Company on that date, subject to the terms and conditions of the 2011 Equity Plan. |
|
2024 PROXY STATEMENT
|
41 |
EXECUTIVE AND DIRECTOR
COMPENSATION
Stock Vested
The following table contains information concerning the number
of shares acquired and value realized during fiscal 2023 upon the vesting/delivery of equity awards previously granted to each
of the Company’s NEOs who held awards that vested in fiscal 2023.
| |
Stock Awards |
Name and Principal Position* | |
Number of Shares Acquired on Vesting/Delivery (#) | |
Value Realized on Vesting ($)(1) |
Jane
Elfers | |
| 300,193 | (2) | |
$ | 11,791,581 | |
President and Chief Executive Officer | |
| 8,556 | (3) | |
| 217,408 | |
| |
| 40,027 | (4) | |
| 652,440 | |
Maegan
Markee | |
| 2,392 | (5) | |
$ | 91,494 | |
Brand President | |
| 4,326 | (6) | |
| 102,786 | |
Sheamus
Toal | |
| 12,679 | (7) | |
$ | 296,308 | |
Chief Operating Officer and Chief Financial Officer | |
| | | |
| | |
Jared
Shure
Senior Vice President, General Counsel | |
| 2,559 | (8) | |
$ | 60,802 | |
* |
No NEOs held options to acquire Common Stock during fiscal 2023. |
Notes to the Stock Vested Table
(1) |
Represents the aggregate dollar amount realized based upon the fair market value of the Company’s
Common Stock on the vesting date or delivery date, as applicable, of each award. |
|
|
(2) |
Represents the delivery of vested shares of Common Stock (together with dividend equivalent shares accrued thereon) underlying
PRSUs granted to Ms. Elfers on June 5, 2020. |
|
|
(3) |
Represents the second partial vesting of 25,670 shares of Common Stock granted to Ms. Elfers pursuant to TRSUs awarded
on May 17, 2021, one-third of which vested and were delivered on the first and second anniversaries of the date of grant and
one-third will vest and be delivered on the third anniversary of the date of grant, provided Ms. Elfers is employed by the
Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(4) |
Represents the third partial vesting of 120,077 shares of Common Stock granted to Ms. Elfers pursuant to TRSUs awarded
on May 29, 2020, one-third of which vested and were delivered on each of the first, second and third anniversaries of the
date of grant, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(5) |
Represents the second partial vesting of 7,176 shares of Common Stock granted to Ms. Markee pursuant to TRSUs awarded
on April 5, 2021, one-third of which vested and were delivered on the first and second anniversaries of the date of grant
and one-third will vest and be delivered on the third anniversary of the date of grant, provided Ms. Markee is employed by
the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(6) |
Represents the first partial vesting of 12,797 shares of Common Stock granted to Ms. Markee pursuant to TRSUs awarded
on August 11, 2022, one-third of which vested and were delivered on the first anniversary of the date of grant and one-third
will vest and be delivered on each of the second and third anniversaries of the date of grant, provided Ms. Markee is employed
by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(7) |
Represents the first partial vesting of 50,716 shares of Common Stock granted to Mr. Toal pursuant to TRSUs awarded on
December 1, 2022, one-third of which vested and were delivered on the first anniversary of the date of grant and one-third
will vest and be delivered on each of the second and third anniversaries of the date of grant, provided Mr. Toal is employed
by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity Plan. |
|
|
(8) |
Represents the first partial vesting of 7,679 shares of Common Stock granted to Mr. Shure pursuant to TRSUs awarded on
August 11, 2022, one-third of which vested and were delivered on the first anniversary of the date of grant and one-third
will vest and be delivered on each of the second and third anniversaries of the date of grant, provided Mr. Shure is employed
by the Company on the respective vesting dates, subject to the terms and conditions of the 2011 Equity Plan. |
42 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
Deferred Compensation Plan
Eligible employees, including our NEOs, and
our Directors may elect annually to defer a portion of their salary, cash bonus, Director fees and stock awards under The Children’s
Place, Inc. Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”). Under this plan, participants
can defer up to 80% of their salary, 100% of their cash bonus, 100% of their Director fees and/or 100% of their stock awards payable
in the following calendar year. At the option of the participant, these amounts may be deferred to a specific date at least two
years from the last day of the year in which deferrals are credited into the participant’s account. Interest on deferred
amounts is credited to the participant’s account based upon the earnings and losses of one or more of the investments selected
by the participant from the various investment alternatives available under the Deferred Compensation Plan, as determined by the
HC&C Committee. Directors may elect to invest their cash fees in Company Common Stock. All stock awards are distributed in
the form of shares of Company Common Stock.
At the time of deferral, a participant must
indicate whether he or she wishes to receive the amount deferred in either a lump sum or in substantially equal annual installments
over a period of up to five years. If a participant is an employee of the Company and separates from service prior to the elected
commencement date for distributions and has not attained a combination of age and years of service to the Company the sum of which
is equal to at least 55, then the deferred amounts will be distributed immediately in a lump sum, regardless of the method of distribution
originally elected by the participant. If the participant in question is an employee of the Company and separates from service
prior to the elected commencement date for distribution and has attained a combination of age and years of service to the Company,
the sum of which is equal to at least 55, then the participant may receive the amounts in substantially equal annual installments
over a period of up to 15 years. If the participant is a Director and separates from service prior to the elected commencement
date for distributions, then the deferred amounts will be distributed immediately in a lump sum unless the recipient has elected
on a timely basis to receive the amounts in substantially equal installments over a period of up to 15 years. If the participant
in question is a “specified employee” under the Code, there may be a six-month delay in the commencement of distributions,
if triggered by the participant’s termination or retirement. Changes to deferral elections with respect to previously deferred
amounts are permitted only under the limited terms and conditions specified in the Code, and early withdrawals from deferred accounts
are permitted only in extreme cases, such as unforeseen financial hardship resulting from an illness or accident of the participant
which is demonstrated to the HC&C Committee.
CEO Employment Agreement
The Company and Jane Elfers, our President
and Chief Executive Officer, are parties to an employment agreement dated December 2009, as amended (the “employment agreement”).
Set forth below is a summary of certain terms contained in Ms.
Elfers’ employment agreement.
Board of Directors. Ms. Elfers is
to be nominated for election to our Board pursuant to her employment agreement.
Benefits and Perquisites. During the
term of her employment agreement, Ms. Elfers will be entitled to the perquisites described under the heading “Executive and
Director Compensation - Compensation Discussion & Analysis - Elements of Compensation Program - Employee Benefits and
Perquisites” above and to participate in all employee benefit and perquisite plans, programs and arrangements offered by
the Company as the Company generally makes available to senior executives of the Company from time to time (other than any severance
plan or program).
|
2024 PROXY STATEMENT
|
43 |
EXECUTIVE AND DIRECTOR COMPENSATION
Awards and Benefits. The bonus awards,
equity awards, benefits and perquisites provided to Ms. Elfers under the employment agreement are to be on a basis which is no
less favorable to Ms. Elfers than the most favorable basis on which such awards, benefits or perquisites are granted to any other
senior executive officer of the Company, except for such awards, benefits or perquisites granted to any senior executive officer
in connection with an initial hire or promotion or other grants not in the regular course.
Severance. Certain severance benefits
are provided in the event of a termination of Ms. Elfers’ employment by the Company other than for cause, in the case of
disability, by Ms. Elfers for good reason or at the expiration of the term of her employment agreement due to the Company’s
issuance of a non-renewal notice. In the event of such termination and subject to a release of claims against the Company by Ms.
Elfers, Ms. Elfers will be entitled to receive: (i) earned, but unpaid, base salary and unpaid expense reimbursement through the
date of termination; (ii) a lump sum cash payment of any annual bonus and other incentive compensation earned, but unpaid, for
the most recent fiscal year ended prior to the date of termination; (iii) an amount equal to the sum of (a) two times her then
current base salary and (b) two times the greater of (x) her target bonus or (y) the average of the immediately preceding two year’s
annual bonuses earned by her (the greater of clause (x) or (y), the “bonus amount”), payable in cash in equal installments
(the payments set forth in (iii), collectively, the “severance payments”) over a period of 24 months following the
date of termination (the “severance period”); (iv) a lump sum cash payment of a pro-rata portion of $1.2 million for
the fiscal year in which her employment terminates; and (v) continued healthcare coverage under the Company’s group health
plan, at the Company’s expense, and continued provision of certain benefits and perquisites, for a period not to exceed the
severance period.
Change in Control. In the event of
a termination of Ms. Elfers’ employment by the Company other than for cause, in the case of disability, by Ms. Elfers for
good reason or at the expiration of the term of her employment agreement due to the Company’s issuance of a non-renewal notice
that occurs, in any case, within two years following the occurrence of a change in control which constitutes a “change in
control event” within the meaning of Treasury Regulation §1.409A-3(i)(5)(i), then, in addition to the amounts and benefits
described in clauses (i), (ii) and (iv) of the immediately preceding paragraph, but in lieu of the severance payments and the benefits
described in clauses (iii) and (v) of the immediately preceding paragraph, Ms. Elfers will be entitled to a lump sum cash severance
payment in an amount equal to three times the sum of her base salary and the bonus amount, and continued healthcare coverage under
the Company’s group health plan, at the Company’s expense, and continued provision of certain benefits and perquisites,
for a period of 36 months. If such a termination occurs within two years following the occurrence of a change in control which
does not constitute a “change in control event” within the meaning of Treas. Reg. §1.409A-3(i)(5)(i), Ms. Elfers
will receive the same benefits and amounts described above, but a portion of the change in control severance will be paid over
the severance period rather than in a lump sum. The Company experienced a “change in control” event in February 2024
when Mithaq acquired over 50% of the outstanding shares of Common Stock of the Company.
In the event that the “golden parachute”
excise tax provisions of the Code (Sections 280G and 4999) are implicated because of the foregoing payments and benefits, the Company
will not provide any tax gross-up to Ms. Elfers. Rather, Ms. Elfers will receive the greater of: (i) the largest portion of the
payments and benefits that are not subject to a “golden parachute” excise tax under Sections 280G and 4999 of the Code
or (ii) the largest portion of the payments and benefits, up to and including the total, if the net-after-excise tax amount retained
by her would exceed the amount in clause (i) above.
44 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
Restrictions and Indemnification. During
the term of her employment agreement and for a period of 12 months following the date of termination, Ms. Elfers will be subject
to restrictions on competition with the Company. During the term of her employment agreement and for a period of 18 months following
the date of termination, Ms. Elfers will be subject to restrictions on the solicitation of the Company’s employees, and of
the Company’s vendors, distributors, manufacturers, lessors, independent contractors or agents for and on behalf of a competitive
business. For all periods during and after the term of her employment agreement, Ms. Elfers will be subject to non-disclosure and
confidentiality restrictions relating to the Company’s confidential information and trade secrets. Ms. Elfers’ employment
agreement also contains indemnification provisions for claims that may arise in connection with Ms. Elfers’ service as President
and CEO or as a Director of the Company.
Other Arrangements
The Company does not have any employment
agreements with any of its NEOs (other than Ms. Elfers) or any other member of management. As is its practice, the Company and
each of the NEOs (other than Ms. Elfers) and certain other members of management are parties to offer letters, which generally
establish certain terms of employment, including base salary, target bonus as a percentage of base salary, initial equity awards,
paid time off and other benefits, and contain confidentiality, work product, non-solicitation and non-competition obligations.
Change in Control Agreements
We have entered into change in control severance
agreements with our NEOs (other than Ms. Elfers), certain other executives and other key employees that require us to make payments
and provide benefits in the event of the termination of his or her employment by the Company without cause or by such executive
or key employee for good reason occurring in connection with a change in control of the Company. We utilize these provisions in
order to recruit and retain, including to obtain a long-term commitment to employment from, executives and key employees. We believe
that appropriate severance arrangements will provide our executives with important incentives to remain employed with us and to
concentrate on the Company’s business objectives in circumstances where a change in control of the Company becomes imminent.
Each of Mr. Toal, Ms. Markee and Mr. Shure
(as well as other executives and certain other key employees) has entered into separate change in control severance agreements,
pursuant to which each is provided severance benefits upon a termination of employment in connection with a change in control.
Pursuant to their change in control severance agreements, each of Mr. Toal, Ms. Markee and Mr. Shure will receive severance benefits
upon a termination of employment by the Company without cause or by the executive for “good reason” within two years
following a change in control.
Each change in control severance agreement
is for two years and then automatically renews for one-year terms thereafter, unless the Company provides 90 days’ notice
of its intent to terminate the agreement. Upon a termination of employment in connection with a change in control entitling them
to benefits under the agreement, each of Mr. Toal, Ms. Markee and Mr. Shure is to receive a lump sum severance payment equal to
the sum of their respective base salary, and the average of their respective actual bonuses payable for each of the previous three
years, multiplied by 1.5.
In the event that the “golden parachute”
excise tax provisions of the Code (Sections 280G and 4999) are implicated because of any payments and benefits to be made and provided
to an executive under the change in control severance agreements, the Company will not provide any tax gross-ups. Rather, the change
in control severance agreements provide for the executives to receive the greater of: (i) the largest portion of the payments and
benefits that would result in no parachute excise tax under Sections 280G and 4999 of the Code, or (ii) the largest portion of
the payments and benefits, up to and including the total, if the net after-excise-tax amount retained by the executive would exceed
the amount in clause (i) above.
|
2024 PROXY STATEMENT
|
45 |
EXECUTIVE AND DIRECTOR COMPENSATION
For purposes of the change in control severance
agreements, the term “change in control” is defined as: (i) the sale to any purchaser of (a) all or substantially all
of the assets of the Company, or (b) capital stock representing more than 50% of the stock of the Company entitled to vote generally
in the election of directors; (ii) a merger or consolidation of the Company with another corporation if, immediately after such
merger or consolidation, less than a majority of the combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors of the surviving corporation is held by those who held such securities immediately prior
to the transaction; (iii) if any person becomes the beneficial owner of securities representing more than 50% of the combined voting
power of voting stock of the Company (or the subsidiary employing the executive) entitled to vote generally in the election of
directors; or (iv) if the individuals (a) who, as of the date of the applicable agreement, constitute the Board (the “Original
Directors”) and (b) who thereafter are elected to the Board and whose election or nomination was approved by a majority of
the Original Directors then still in office (the “Additional Original Directors”) and (c) who thereafter are elected
to the Board and whose election or nomination was approved by a majority of the Original Directors and Additional Original Directors
then still in office, cease for any reason to constitute a majority of the members of the Board. The Company experienced a “change
in control” event in February 2024 when Mithaq acquired over 50% of the outstanding shares of Common Stock of the Company.
Severance Guidelines and Offer Letters
Under the Company’s severance guidelines
and its offer letters with Mr. Toal, Ms. Markee and Mr. Shure, upon a termination of employment (other than in connection with
a change in control) of any of these NEOs by the Company without cause, the affected NEOs will receive severance in the form of
salary continuation payments for a period which is the greater of the period provided under the Company’s severance guidelines
in effect at the time of termination or 12 months, in the case of Mr. Toal, Ms. Markee and Mr. Shure, provided that, in any event,
the Company’s severance obligations will be automatically reduced by the amount of salary and other like annual remuneration
received from employment or engagement as an independent contractor during the severance period. Receipt of severance payments
is conditioned upon the execution and delivery by the affected NEO of an agreement containing a release of claims, a confidentiality
agreement, and a non-solicitation and non-competition agreement for a period of time following termination equal to the severance
period.
46 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
Potential Payments upon Termination or Change in Control
The following table sets forth the estimated
incremental payments and benefits that would be payable to each NEO upon termination of such NEO’s employment in certain
circumstances, including in connection with a change in control of the Company, assuming that the triggering event occurred at
year-end fiscal 2023 (February 3, 2024). All equity held by all NEOs is subject to a “double trigger”, i.e., an NEO’s
employment would have to be terminated in connection with a change in control in order for the NEO’s equity to vest in accordance
with the applicable award agreement.
Name and Principal
Position | |
Termination Reason | |
Severance ($) | | |
Payment of Time-Based RSUs ($)(1) | |
Payment of Performance-Based RSUs ($)(1) | |
Health & Welfare Benefits ($) | |
Total ($) | |
Jane
Elfers | |
By Company without cause | |
$ | 6,920,000 | (2) | |
$ | 183,056 | | |
$ | 1,281,218 | | |
$ | 94,834 | | |
$ | 8,479,108 | |
President and | |
By Executive for Good Reason | |
| 6,920,000 | (2) | |
| 183,056 | | |
| 1,281,218 | | |
| 94,834 | | |
| 8,479,108 | |
Chief Executive Officer | |
Following Change in Control | |
| 9,780,000 | (3) | |
| 183,056 | | |
| 1,281,218 | | |
| 142,251 | | |
| 11,386,525 | |
| |
Death | |
| — | | |
| 183,056 | | |
| 1,281,218 | | |
| 4,576 | | |
| 1,468,850 | |
| |
Disability | |
| — | | |
| 183,056 | | |
| 1,281,218 | | |
| 4,576 | | |
| 1,468,850 | |
Maegan
Markee | |
By Company without cause | |
$ | 725,000 | (2) | |
| — | | |
| — | | |
$ | 8,969 | | |
$ | 733,969 | |
Brand President | |
By Executive for Good Reason | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| |
Following Change in Control | |
| 1,426,313 | (3) | |
$ | 876,833 | | |
$ | 1,070,441 | | |
| 13,454 | | |
| 3,387,041 | |
| |
Death | |
| — | | |
| 876,833 | | |
| 1,070,441 | | |
| — | | |
| 1,947,274 | |
| |
Disability | |
| — | | |
| 876,833 | | |
| 1,070,441 | | |
| — | | |
| 1,947,274 | |
Sheamus
Toal | |
By Company without cause | |
$ | 725,000 | (2) | |
| — | | |
| — | | |
$ | 15,823 | | |
$ | 740,823 | |
Chief Operating | |
By Executive for Good Reason | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Officer and Chief | |
Following Change in Control | |
| 2,175,000 | (3) | |
$ | 1,470,434 | | |
$ | 656,823 | | |
| 23,735 | | |
| 4,325,992 | |
Financial Officer | |
Death | |
| — | | |
| 1,470,434 | | |
| 656,823 | | |
| — | | |
| 2,127,257 | |
| |
Disability | |
| — | | |
| 1,470,434 | | |
| 656,823 | | |
| — | | |
| 2,127,257 | |
Jared
Shure | |
By Company without cause | |
$ | 425,000 | (2) | |
| — | | |
| — | | |
$ | 15,059 | | |
$ | 440,059 | |
Senior Vice President, | |
By Executive for Good Reason | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
General Counsel | |
Following Change in Control | |
| 894,789 | (3) | |
$ | 270,477 | | |
$ | 448,420 | | |
| 22,589 | | |
| 1,736,275 | (4) |
| |
Death | |
| — | | |
| 270,477 | | |
| 448,420 | | |
| — | | |
| 718,897 | (4) |
| |
Disability | |
| — | | |
| 270,477 | | |
| 448,420 | | |
| — | | |
| 718,897 | (4) |
Notes to the Potential Payments upon Termination or Change
in Control Table
(1) |
Calculated based on $21.39 per share, which was the closing market price per share of the Company’s
Common Stock as reported on The NASDAQ Stock Market on February 2, 2024. For purposes of calculating the amounts in the “Payment
of Performance Shares” column, the target (100%) amounts of all performance-based awards were used. |
|
|
(2) |
Paid by way of salary continuation. |
|
|
(3) |
Paid in a lump sum. |
|
|
(4) |
The amount shown includes unvested deferred cash awards in the amount of $25,000 and unvested price leveraged cash awards
in the amount of $75,000. |
|
2024 PROXY STATEMENT
|
47 |
EXECUTIVE AND DIRECTOR COMPENSATION
CEO Pay Ratio
The following sets forth information concerning
the total annual compensation of our CEO and the total annual compensation of our median employee.
For the 2023 fiscal year ended February 3, 2024:
|
● |
The total annual compensation of our CEO was $1,250,781 |
|
|
|
|
● |
The total annual compensation of our median employee was $7,351; our median employee is a part-time, hourly retail store
associate averaging 9.12 hours worked per week |
For fiscal 2023, the ratio of the total annual
compensation of our CEO to our median employee was estimated to be 170:1.
To calculate the total annual compensation
of our median employee, the methodology and the material assumptions, adjustments and estimates were as follows:
|
● |
As is permitted by applicable SEC regulations, our median employee for fiscal 2023 was selected on
November 1, 2023, our most recent date for internal collection of employee compensation data and which is within the last
three months of fiscal 2023, as the date upon which to identify our median employee. To identify the median employee from
our employee population, we collected actual base salary, wages and other amounts paid, as applicable. |
Pay Versus Performance
Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | Value of Initial Fixed $100 Investment Based on: | Net Income (or Loss) | Adjusted Operating Income (or Loss) |
Company Total Shareholder Return (TSR) | Peer Group(1) Total Shareholder Return (TSR) |
2023 | $1,250,781 | ($8,013,379)(2) | $1,207,359 | ($236,030)(3) | $36 | $152 | ($154,541,000) | ($32,490,000) |
2022 | $1,244,770 | ($2,916,093)(4) | $1,318,682 | $765,963(5) | $73 | $116 | ($1,138,000) | $7,055,000 |
2021 | $11,831,132 | $22,052,386(6) | $3,182,697 | $3,583,291(7) | $118 | $128 | $187,171,000 | $288,567,000 |
2020 | $15,736,658 | $20,312,174(8) | $2,806,044 | $3,633,116(9) | $123 | $115 | ($140,365,000) | ($56,733,000) |
Notes to the Pay Versus Performance Table
48 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
Company-Selected Financial Performance Measures |
Adjusted Operating Income |
Adjusted EPS |
Adjusted Operating Margin Expansion |
Adjusted ROIC |
Better Cotton |
Black/African American Associate Representation |
|
2024 PROXY STATEMENT
|
49 |
EXECUTIVE AND DIRECTOR COMPENSATION
50 |
2024 PROXY STATEMENT
|
|
EXECUTIVE AND DIRECTOR COMPENSATION
Compensation of Directors
Compensation in fiscal 2023 for our non-employee
Directors was set by the Board on the recommendation of the HC&C Committee. Compensation paid to our non-employee Directors
was in the form of cash retainer payments and a time-vested equity award pursuant to our 2011 Equity Plan that provides for fixed
annual grants.
In fiscal 2023, non-employee Director compensation consisted
of the following, as applicable:
Annual Retainer in Fiscal 2023 |
Cash |
$70,000 |
Equity Grant(1) |
$140,000 of TRSUs ($190,000 for the Company’s Chairman) which generally vest after one year, on the first business
day of the Company’s fiscal year. |
Additional Annual Cash Retainer in Fiscal 2023 for the Chairman of the Board
and Committee Chairs |
Chairman |
$100,000 |
Audit Committee Chair |
$ 30,000 |
Human Capital & Compensation Committee Chair |
$ 25,000 |
Corporate Responsibility, Sustainability & Governance Committee Chair |
$ 25,000 |
Additional Annual Retainer in Fiscal 2023 for the Members of Committees Including
Committee Chairs |
Audit Committee |
$15,000 |
Human Capital & Compensation Committee |
$12,500 |
Corporate Responsibility, Sustainability & Governance Committee |
$10,000 |
(1) |
The 2011 Equity Plan caps at $250,000 the aggregate fair market value of equity awards made to any
non-employee Director in any calendar year. |
The Company also pays or reimburses Directors
for travel expenses relating to attending meetings of our Board, its Committees and annual meetings of shareholders, and reimburses
Directors in an amount not to exceed $6,000 per year for attendance at director educational seminars. In addition, all Directors
are eligible to receive 15 Company-issued discount cards for use in purchasing our merchandise in accordance with our employee
merchandise discount policy, which they may distribute to their friends and family, at their discretion.
Employee Directors are paid for their services
to the Company as employees and do not receive any additional compensation for serving on our Board. Accordingly, employee Directors
are not eligible for any annual retainer or other Director fees or the Director-related equity award.
Under the Company’s stock ownership
guidelines, in fiscal 2023 non-employee Directors were required to acquire shares of Common Stock (directly or through share equivalent
units) with a value of at least five times their annual Director cash retainer within five years of joining the Board.
|
2024 PROXY STATEMENT
|
51 |
EXECUTIVE AND DIRECTOR COMPENSATION
The following table shows the compensation earned by each non-employee
Director in fiscal 2023.
Non-Employee Directors’ Compensation
| |
Fees Earned or Paid
in Cash ($)(1) | |
Stock Awards ($)(2) | |
Total ($) |
Norman Matthews(3) | |
$ | 192,500 | | |
$ | 190,039 | | |
$ | 382,539 | |
Joseph Alutto(4) | |
| 26,250 | | |
| 35,017 | | |
| 61,267 | |
John E. Bachman(5) | |
| 117,500 | | |
| 140,026 | | |
| 257,526 | |
Marla Beck(6) | |
| 76,667 | | |
| 140,026 | | |
| 216,693 | |
Elizabeth J. Boland(7) | |
| 83,125 | | |
| 140,026 | | |
| 227,191 | |
Alicia Enciso(8) | |
| 40,000 | | |
| 70,023 | | |
| 110,023 | |
John A. Frascotti(9) | |
| 98,750 | | |
| 140,026 | | |
| 238,776 | |
Tracey R. Griffin(10) | |
| 41,250 | | |
| 140,026 | | |
| 181,276 | |
Katherine Kountze(11) | |
| 85,000 | | |
| 140,026 | | |
| 225,026 | |
Wesley S. McDonald(12) | |
| 63,750 | | |
| 105,018 | | |
| 168,768 | |
Debby Reiner(13) | |
| 107,500 | | |
| 140,026 | | |
| 247,526 | |
Michael Shaffer(14) | |
| 63,750 | | |
| 105,018 | | |
| 168,768 | |
Notes to the Non-Employee Directors’ Compensation
Table
(1) |
Represents the aggregate dollar amount of all fees earned in cash for services as a Director and as
a member(s) of a Board Committee(s) in fiscal 2023. |
|
|
(2) |
Represents the stock award grant date fair value recognized for financial statement reporting purposes in accordance with
the “Compensation - Stock Compensation” topic of the Financial Accounting Standards Board’s Accounting Standards
Codification. For more information, see Note 6 - Stock-Based Compensation in the accompanying Notes to Consolidated Financial
Statements filed in our Annual Report on Form 10-K for our 2023 fiscal year. The fair value of TRSUs is defined as the closing
price of the Company’s Common Stock on the grant date. Stock awards to those who have attained the age of retirement
are subject to accelerated expensing for financial reporting purposes. Each of Messrs. Bachman and Matthews has reached retirement
age, and consequently each stock award received by him is subject to accelerated vesting upon retirement from the Board. |
|
|
(3) |
Norman Matthews served as a Director through March 8, 2024. |
|
|
(4) |
Joseph Alutto served as a Director through May 10, 2023. The fees paid to Dr. Alutto reflect a pro-rated amount for the
portion of fiscal 2023 during which he served as a Director. |
|
|
(5) |
John Bachman served as a Director through March 8, 2024. |
|
|
(6) |
Marla Beck served as a Director through January 16, 2024. The fees paid to Ms. Beck reflect a pro-rated amount for the
portion of fiscal 2023 during which she served as a Director. |
|
|
(7) |
Elizabeth Boland served as a Director through February 29, 2024. |
|
|
(8) |
Alicia Enciso was appointed to the Board on July 13, 2023. The fees paid to Ms. Enciso reflect a pro-rated amount for
the portion of fiscal 2023 during which she served as a Director. Ms. Enciso served as a Director through February 29, 2024. |
|
|
(9) |
John Frascotti served as a Director through March 8, 2024. |
|
|
(10) |
Tracey Griffin served as a Director through July 13, 2023. The fees paid to Ms. Griffin reflect a pro-rated amount for
the portion of fiscal 2023 during which she served as a Director. |
|
|
(11) |
Kathy Kountze served as a Director through February 29, 2024. |
|
|
(12) |
Wesley S. McDonald was elected to the Board on May 10, 2023. The fees paid to Mr. McDonald reflect a pro-rated amount
for the portion of fiscal 2023 during which he served as a Director. Mr. McDonald served as a Director through February 29,
2024. |
|
|
(13) |
Debby Reiner served as a Director through March 8, 2024. |
|
|
(14) |
Michael Shaffer was elected to the Board on May 10, 2023. The fees paid to Mr. Shaffer reflect a pro-rated amount for
the portion of fiscal 2023 during which he served as a Director. Mr. Shaffer served as a Director through March 8, 2024. |
Deferral of Fees
Under the Company’s Deferred Compensation
Plan as described above, Directors may elect to defer all or a part of their Director fees and stock awards. The Deferred Compensation
Plan permits Directors to invest deferred cash fees in the Company’s Common Stock. A Director who elects to invest deferred
cash fees in Common Stock will receive shares upon completion of the deferral period. Mr. Matthews and Dr. Alutto elected to defer
their fiscal 2023 Directors fees pursuant to the Deferred Compensation Plan and elected to invest those deferred fees in shares
of Common Stock. Mr. Frascotti and Ms. Boland elected to defer their fiscal 2023 Directors fees pursuant to the Deferred Compensation
Plan and elected to receive those deferred fees as cash.
52 |
2024 PROXY STATEMENT
|
|
STOCK OWNERSHIP
Stock Ownership of Directors and Executive Officers
The following table shows the beneficial
ownership of Common Stock of each Director, each of our NEOs, and the Directors and executive officers as a group. “Beneficial
ownership” as used here means more than “ownership” as that term is commonly used. For example, a person “beneficially”
owns Company stock not only if he or she holds it directly, but also if he or she has (or shares) the power to vote or sell the
stock indirectly (for example, through a relationship, a position as a director or trustee, or a contract or understanding). Beneficial
ownership also includes shares a person has the right to acquire within 60 days, for example, through the scheduled vesting of
an equity award or the exercise of a stock option.
Name of Beneficial Owner(1) | |
Shares Beneficially
Owned(2)(3) | |
Turki Saleh A. AlRajhi(4) | |
| 0 | |
Hussan Arshad(5) | |
| 0 | |
Douglas Edwards(6) | |
| 0 | |
Jane Elfers | |
| 409,054 | |
Muhammad Asif Seemab(4) | |
| 0 | |
Muhammad Umair(7) | |
| 0 | |
Maegan Markee(8) | |
| 28,854 | |
Sheamus Toal(9) | |
| 18,606 | |
Jared Shure(10) | |
| 11,726 | |
All Directors and executive officers as a group (9 persons) | |
| 468,240 | |
Notes to the Stock Ownership of Directors and Executive
Officers Table
(1) |
Information about Common Stock holdings in the above table and in these footnotes is as of April 10,
2024. Unless stated otherwise in these footnotes, each person named in the table owned his or her shares directly and has
sole voting and investment power over such shares. |
|
|
(2) |
The number of shares beneficially owned in the above table includes, in each case, all dividend equivalent shares accrued
and issuable upon the vesting of the applicable equity awards held by the beneficial owner. |
|
|
(3) |
On April 10, 2024 each person named in the table beneficially owned less than 1.0% of the outstanding Common Stock, other
than Ms. Elfers, who beneficially owned approximately 3.24% of the outstanding shares. The Directors and executive officers
as a group beneficially owned approximately 3.72% of the outstanding Common Stock. |
|
|
(4) |
See “Stock Ownership for Certain Beneficial Owners” on the following page for further description of Mr. AlRajhi’s
and Mr. Seemab’s indirect ownership of outstanding Common Stock in their roles with Mithaq Capital SPC. |
|
|
(5) |
Does not include 8,474 shares of Common Stock granted on March 13, 2024 pursuant to TRSUs not yet vested. |
|
|
(6) |
Does not include 9,531 shares of Common Stock granted on March 14, 2024 pursuant to TRSUs not yet vested. |
|
|
(7) |
Does not include 8,474 shares of Common Stock granted on March 13, 2024 pursuant to TRSUs not yet vested. |
|
|
(8) |
Does not include 13,794 shares of Common Stock granted on June 9, 2023 pursuant to TRSUs not yet vested, 6,252 shares
of Common Stock granted on August 1, 2023 pursuant to TRSUs not yet vested and 8,654 shares of Common Stock granted on August
11, 2022 pursuant to TRSUs not yet vested. |
|
|
(9) |
Does not include 38,037 shares of Common Stock granted on December 1, 2022 pursuant to TRSUs not yet vested, 16,302 shares
of Common Stock granted on June 9, 2023 pursuant to TRSUs not yet vested and 4,168 shares of Common Stock granted on August
1, 2023 pursuant to TRSUs not yet vested. |
|
|
(10) |
Does not include 2,561 shares of Common Stock granted on August 11, 2022 pursuant to TRSUs not yet vested and 5,017 shares
of Common Stock granted on June 9, 2023 pursuant to TRSUs not yet vested. |
|
2024 PROXY STATEMENT
|
53 |
STOCK OWNERSHIP
Stock Ownership of Certain Beneficial Owners
The following table sets forth information
regarding persons or groups known to the Company to be beneficial owners of more than 5% of the Company’s Common Stock.
Name of Beneficial Owner | |
Shares Beneficially Owned | | |
Percent of Class |
Mithaq Capital SPC(1) | |
| 7,001,387 | | |
| 56.1 | % |
BlackRock, Inc.(2) | |
| 1,031,721 | | |
| 8.3 | % |
D. E. Shaw & Co., L.P.(3) | |
| 907,595 | | |
| 7.3 | % |
The Vanguard Group, Inc.(4) | |
| 698,485 | | |
| 5.6 | % |
Notes to the Stock Ownership of Certain Beneficial Owners
Table
(1) |
According to a Statement on Schedule 13D/A filed with the SEC on March 11, 2024, as of March 7, 2024,
(i) (a) Mithaq Capital SPC, a Cayman Islands segregated portfolio company, (b) Mithaq Global, a Cayman Islands company, and
(c) Mithaq Capital, a Cayman Islands company, each with an address of c/o Synergy, Anas Ibn Malik Road, Al Malqa, Riyadh 13521
Saudi Arabia, had shared voting power with respect to 7,001,387 shares and shared dispositive power with respect to 7,001,387
shares; (ii) (a) Turki Saleh A. AlRajhi, a Saudi Arabian citizen and (b) Muhammad Asif Seemab, a Pakistani citizen, each with
an address of c/o Mithaq Capital SPC, Synergy, Anas Ibn Malik Road, Al Malqa, Riyadh 13521 Saudi Arabia, had shared voting
power with respect to 7,001,387 shares and shared dispositive power with respect to 7,001,387 shares; and (iii) Snowball Compounding
Ltd., a Cayman Islands exempted company with an address of c/o Synergy, Anas Ibn Malik Road, Al Malqa, Riyadh 13521 Saudi
Arabia, had shared voting power with respect to 1,000 shares and shared dispositive power with respect to 1,000 shares. |
|
|
(2) |
According to a Statement on Schedule 13G/A filed with the SEC on January 25, 2024, as of December 31, 2023, BlackRock,
Inc., a Delaware corporation with an address of 50 Hudson Yards, New York, New York 10001, had sole voting power with respect
to 1,006,360 shares and sole dispositive power with respect to 1,031,721 shares. |
|
|
(3) |
According to a Statement on Schedule 13G/A filed with the SEC on February 22, 2024, as of February 12, 2024, (i) D. E.
Shaw & Co., L.P., a Delaware limited partnership with an address of 1166 Avenue of the Americas, 9th Floor, New York,
New York 10036, had shared voting power with respect to 898,395 shares and shared dispositive power with respect to 907,595
shares; and (ii) D. E. Shaw & Co., L.L.C., a Delaware limited liability company with an address of 1166 Avenue of
the Americas, 9th Floor, New York, New York 10036, had shared voting power with respect to 680,925 shares and shared dispositive
power with respect to 680,925 shares. |
|
|
(4) |
According to a Statement on Schedule 13G/A filed with the SEC on February 13, 2024, as of December 29, 2023, The Vanguard
Group, Inc., a Pennsylvania corporation with an address of 100 Vanguard Boulevard, Malvern, Pennsylvania 19355, had shared
voting power with respect to 7,734 shares, sole dispositive power with respect to 679,988 shares, and shared dispositive power
with respect to 18,497 shares. |
54 |
2024 PROXY STATEMENT
|
|
STOCK OWNERSHIP
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires
the Directors, executive officers and any person owning more than 10% of a class of the Company’s stock to file reports with
the SEC and NASDAQ regarding their ownership of the Company’s stock and any changes in such ownership. The Company files
such reports on behalf of its Directors and executive officers pursuant to a power of attorney given to certain attorneys-in-fact.
Based on the Company’s review of copies of these reports and Director and executive officer certifications, the Company believes
that all Section 16(a) filing requirements applicable to its Directors and executive officers were complied with during fiscal
2023.
Certain Relationships and Related Transactions
The Company has a long-standing policy prohibiting
its Directors, officers and employees from entering into transactions that present actual or potential conflicts of interest. This
policy is reflected in the Company’s Code of Business Conduct and Related Person Transactions Policy, which is in writing
and has been adopted by the Board.
The CRS&G Committee approves all related
person transactions, including related person compensation arrangements. Pursuant to the Company’s Related Person Transactions
Policy, each related person is responsible for notifying the Company’s legal department of any potential related party transaction
in which such person, or any member of his or her immediate family, may be directly or indirectly involved as soon as he or she
becomes aware of such a transaction. The CRS&G Committee is to be provided the details of the transaction and determines whether
to approve the transaction taking into consideration, among other things: (i) whether the terms of the transaction are fair to
the Company and are comparable to the terms that would exist in a similar transaction with an unaffiliated third-party; (ii) whether
there are business reasons for the Company to enter into the transaction; (iii) whether the transaction would impair the independence
of a non-management director; and (iv) whether the transaction would present or create the appearance of an improper conflict
of interest for any related person, taking into account the size of the transaction and the direct or indirect nature of the interest
of the related person in the transaction. In addition, the CRS&G Committee reviews any ongoing related person transactions
on at least an annual basis to ensure that such transactions are being pursued in accordance with the understandings made at the
time such transactions were originally approved and if any changes should be pursued.
Based on the Company’s review of its
transactions, there were no transactions considered to be a related person transaction during fiscal 2023.
|
2024 PROXY STATEMENT
|
55 |
STOCK PRICE PERFORMANCE GRAPH
The following graph and table compares the
cumulative shareholder return on our Common Stock with the return of companies comprising the NASDAQ US Benchmark TR index and
the NASDAQ US Benchmark Retail TR Index. The graph and the table below assume that $100 was invested on January 31, 2019 in each
of our Common Stock, the NASDAQ US Benchmark TR index and the NASDAQ US Benchmark Retail TR Index.
|
|
FY2019 |
|
FY2020 |
|
FY2021 |
|
FY2022 |
|
FY2023 |
The Children’s Place—“PLCE” |
|
63.46 |
|
78.14 |
|
74.92 |
|
46.36 |
|
22.74 |
NASDAQ US Benchmark TR Index |
|
120.73 |
|
145.89 |
|
169.72 |
|
157.91 |
|
193.50 |
NASDAQ US Benchmark Retail TR Index |
|
116.29 |
|
160.89 |
|
168.29 |
|
143.42 |
|
194.21 |
The table below sets forth the closing price
of our Common Stock and the closing indices for the NASDAQ US Benchmark TR Index and the NASDAQ US Benchmark Retail TR Index on
the last day of certain of our fiscal years.
|
|
FY2019 |
|
FY2020 |
|
FY2021 |
|
FY2022 |
|
FY2023 |
The Children’s Place—“PLCE” |
|
59.67 |
|
73.47 |
|
70.44 |
|
43.60 |
|
21.39 |
NASDAQ US Benchmark TR Index |
|
2,819.09 |
|
3,406.63 |
|
3,963.21 |
|
3,687.47 |
|
4,518.41 |
NASDAQ US Benchmark Retail TR Index |
|
3,768.85 |
|
5,214.30 |
|
5,453.85 |
|
4,647.98 |
|
6,293.98 |
56 |
2024 PROXY STATEMENT
|
|
PROPOSALS REQUIRING YOUR VOTE
The following three proposals will be presented
at the Annual Meeting for your vote. When voting by internet or telephone, you will be instructed how to vote for or against or
abstain from voting on these proposals. If you received a printed copy of your proxy materials, space is provided on the proxy
card to vote for or against or abstain from voting on each of the proposals.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ALL OF THE NOMINEES FOR DIRECTOR SET FORTH IN PROPOSAL 1 AND FOR
PROPOSALS 2 AND 3.
Proposal 1: |
Election of Six Members of the Board Of Directors |
The Board has
nominated Turki Saleh A. AlRajhi, Hussan Arshad, Douglas Edwards, Jane Elfers, Muhammad Asif Seemab and Muhammad Umair for
election as Directors at the Annual Meeting. If you elect these nominees, they will each hold office until the annual meeting of
shareholders to be held in the Spring of 2025 or until their successors have been elected and qualified.
Biographical information regarding the nominees
and information regarding the qualifications of the nominees appears beginning on page 21 above under the heading “Corporate
Governance at The Children’s Place – Board Nominees for Directors”.
Each of the nominees for Director
who receives at least a majority of the votes cast at the Annual Meeting, either in person or by proxy, will be elected.
Votes cast include votes for or against each nominee and exclude abstentions and withheld authority. This means that if you
abstain from voting or withhold authority to vote for a particular nominee, your vote will not count for or against the
nominee. Any nominee in this election who does not receive a majority of the votes cast must promptly offer to tender his or
her resignation to the Board. The CRS&G Committee will then consider the resignation and make a recommendation to the
Board. If you hold your shares in your name and you submit your proxy card with an unclear voting designation or no
voting designation at all, the Proxy Committee will vote your shares in favor of the nominees. If your broker holds your
shares, your broker is not entitled to vote your shares on this proposal without your instructions.
The Board of Directors recommends a vote FOR all of the nominees
for Director listed above.
|
2024 PROXY STATEMENT
|
57 |
PROPOSALS REQUIRING YOUR VOTE
Proposal 2: |
Ratification of Selection of Independent Registered Public Accounting Firm |
We are asking you to ratify the Audit Committee’s
selection of EY as our independent registered public accounting firm for fiscal 2024. The Board considers it desirable and in the
best interest of our shareholders to continue the services of EY for fiscal 2024.
Fees
The fees and out-of-pocket expenses billed
or expected to be billed by EY for professional services rendered to the Company for fiscal 2023 and fiscal 2022 are set forth
below.
|
|
Fiscal 2023 |
|
Fiscal 2022 |
|
|
(in thousands) |
Audit Fees |
|
$2,050 |
|
$1,780 |
Audit-Related Fees |
|
— |
|
— |
Tax Fees |
|
— |
|
— |
All Other Fees |
|
— |
|
— |
Total |
|
$2,050 |
|
$1,780 |
With respect to fiscal year 2023, Audit Fees
represent fees billed or expected to be billed by EY for professional services rendered for the audit of the Company’s annual
financial statements for fiscal 2023 and the effectiveness of its internal controls over financial reporting as of February 3,
2024, including the review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q and services
related to statutory and regulatory filings, international audits, and engagements for such fiscal year.
With respect to fiscal year 2022, Audit Fees
represent fees billed by EY for professional services rendered for the audit of the Company’s annual financial statements
for fiscal 2022 and the effectiveness of its internal controls over financial reporting as of January 28, 2023, including the review
of the financial statements included in the Company’s Quarterly Reports on Form 10-Q and services related to statutory and
regulatory filings, international audits, and engagements for such fiscal year.
Audit Committee Pre-Approval Policy
The Audit Committee has adopted a policy
for the pre-approval of all audit, audit-related, tax and permitted non-audit services that may be performed by the Company’s
independent registered public accounting firm. Under this policy, each year, at the time it engages the independent registered
public accounting firm, the Audit Committee pre-approves the audit engagement terms and fees and also pre-approves certain audit,
audit-related, tax and permitted non-audit services, subject to certain dollar limits, to be performed during the year, as appropriate.
All other audit and non-audit services are subject to pre-approval by the Audit Committee on an engagement-by-engagement basis
after taking into account whether the provision of such services by the Company’s independent registered public accounting
firm would be compatible with maintaining such firm’s independence.
Representatives of EY are expected to be
present at the Annual Meeting. They will have the opportunity to make a statement if they desire to do so and will be available
to respond to appropriate questions.
The affirmative vote of a majority of the
votes cast at the Annual Meeting, either in person or by proxy, is required to ratify the selection of the independent registered
public accounting firm. This means that if you abstain from voting on this proposal, your vote will not count for or against this
proposal. When voting your proxy, the Proxy Committee will vote for this proposal unless you instruct otherwise. If you hold your
shares in your name and you submit your proxy card with an unclear voting designation or no voting designation at all, the Proxy
Committee will vote your shares in favor of this proposal. If your broker holds your shares, your broker is entitled to vote your
shares in favor of or against this proposal.
58 |
2024 PROXY STATEMENT
|
|
PROPOSALS REQUIRING YOUR VOTE
If the shareholders should fail to ratify
the selection of the independent registered public accounting firm, the Audit Committee will designate an independent registered
public accounting firm as required under the rules of the Exchange Act and in accordance with its Charter.
The Board of Directors recommends a vote FOR the ratification
of the selection of Ernst &
Young LLP as the Company’s independent registered public accounting firm for fiscal 2024.
|
2024 PROXY STATEMENT
|
59 |
PROPOSALS REQUIRING YOUR VOTE
Proposal 3: |
Advisory Vote on Named Executive Officer Compensation |
As discussed under the heading “Executive
and Director Compensation—Compensation Discussion & Analysis” above, the Company’s executive compensation
program is designed to attract, motivate, reward and retain the executive management talent who are expected to advance both the
short-term and long-term interests of our shareholders. Additionally, the Company’s compensation practices reflect a pay-for-performance
philosophy, whereby a substantial portion of an executive’s potential compensation is tied to performance of the Company.
For these reasons and the others described
elsewhere in this Proxy Statement, the Board recommends that, on an advisory basis, the Company’s shareholders vote in favor
of approving the compensation of the NEOs as described in the narrative disclosure, tables and footnotes contained in this Proxy
Statement (including under the heading “Executive and Director Compensation—Compensation Discussion & Analysis”
above and in the Summary Compensation Table for fiscal 2023 above).
The Board recommends approval of the following
resolution:
“RESOLVED, that, on an advisory
basis, the shareholders approve the compensation of the Company’s named executive officers for the fiscal year ended February
3, 2024, as disclosed in the Company’s Proxy Statement for fiscal 2023 pursuant to the compensation disclosure rules of the
Securities and Exchange Commission”.
The above “Say-on-Pay” vote is
an advisory vote only and is not binding on the Company, the HC&C Committee or the Board. However, the Board and the HC&C
Committee will consider the result of the “Say-on-Pay” vote in future compensation decisions for NEOs. The next “Say-on-Pay”
vote will be held at our 2025 annual meeting of shareholders.
The affirmative vote of a majority of the
votes cast at the Annual Meeting, either in person or by proxy, is required to approve the advisory vote on named executive officer
compensation. This means that if you abstain from voting on this proposal, your vote will not count for or against this proposal.
If you hold your shares in your name and you submit your proxy card with an unclear voting designation or no voting designation
at all, the Proxy Committee will vote your shares in favor of this proposal. If your broker holds your shares, your broker is not
entitled to vote your shares on this proposal without your instructions.
The Board of Directors recommends a vote FOR the resolution approving,
on an advisory
basis, the compensation of the Company’s NEOs as described in this Proxy Statement.
60 |
2024 PROXY STATEMENT
|
|
OTHER INFORMATION
Admission
We do not require tickets for admission to
the Annual Meeting but do limit attendance to shareholders on the Record Date or their proxy holders. Please bring proof of your
Company stock ownership, such as a current brokerage statement, and photo identification. Only shareholders or their valid proxy
holders may attend the Annual Meeting.
Voting Information
Who Can Vote. The Company has one
class of voting stock outstanding: Common Stock. If you were a record owner of Common Stock on April 10, 2024, the Record Date
for voting at the Annual Meeting, you are entitled to vote at the Annual Meeting. At the close of business on April 10, 2024, there
were 12,609,973 shares of Common Stock issued and outstanding and entitled to vote. Each share of Common Stock has one vote.
How to Vote. You can vote your shares
either (1) by proxy, or (2) in person at the Annual Meeting by written ballot. If you choose to vote by proxy, you may do so by
mail, using the internet or by telephone. Even if you plan to attend the Annual Meeting, the Board recommends that you vote by
proxy.
Voting by Proxy. Because many shareholders
cannot attend the Annual Meeting in person, it is necessary that a large number of shareholders be represented by proxy. You may
vote your proxy by mail, using the internet or by telephone, each as more fully explained below. In each case, we will vote your
shares as you direct. When you vote your proxy, you can specify whether you wish to vote for or against or abstain from voting
on each nominee for Director; the ratification of the selection of EY as the Company’s independent registered public accounting
firm for fiscal 2024; and on an advisory basis, the approval of the fiscal 2023 compensation for the Company’s named executive
officers.
If any other matters are properly presented
for consideration at the Annual Meeting, the persons named on the voting website and your proxy card as the Proxy Committee (the
“Proxy Committee”) will have discretion to vote for you on those matters. At the time this Proxy Statement was printed,
we knew of no other matters to be raised at the Annual Meeting. Attending the Annual Meeting alone will not be deemed to revoke
your proxy.
You can vote your shares by completing and mailing
the enclosed proxy card to us so that we receive it before 11:59 p.m. (Eastern Daylight Time) on Tuesday, May 21, 2024.
You can vote your shares via the internet on the
voting website, which is www.voteproxy.com. Internet voting is available 24 hours a
day, seven days a week, until 11:59 p.m. (Eastern Daylight Time) on Tuesday, May 21, 2024. Our internet voting procedures are
designed to authenticate shareholders through individual control numbers. If you received a proxy card in the mail and choose
to vote via the internet, you do not need to return your proxy card.
If you reside in the United States, Canada or Puerto
Rico, you can also vote your shares by telephone by calling the toll-free number provided on the voting website www.voteproxy.com
and on the proxy card. Telephone voting is available 24 hours a day, seven days a week, until 11:59 p.m. (Eastern Daylight
Time) on Tuesday, May 21, 2024. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions
have been properly recorded. Our telephone voting procedures are designed to authenticate shareholders through individual control
numbers. If you received a proxy card in the mail and choose to vote by telephone, you do not need to return your proxy card.
|
2024 PROXY STATEMENT
|
61 |
OTHER INFORMATION
Voting in Person at the Annual Meeting.
If you wish to vote in person at the Annual Meeting, written ballots will be available from the ushers at the Annual Meeting.
If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor,
from the holder of record to be able to vote at the Annual Meeting. Voting by proxy, whether by mail, using the internet or by
telephone, will not limit your right to vote at the Annual Meeting if you decide to attend in person. However, if you vote by proxy
and also attend the Annual Meeting, there is no need to vote again at the Annual Meeting unless you wish to change your vote. Attending
the Annual Meeting alone will not be deemed to revoke your proxy.
Revocation of Proxies. You can revoke
your proxy at any time before it is exercised at the Annual Meeting by taking any one of the following actions: (1) you can follow
the instructions given for changing your vote using the internet or by telephone or deliver a valid written proxy with a later
date; (2) you can notify the Corporate Secretary of the Company in writing that you have revoked your proxy (using the address
in the Notice of Annual Meeting of Shareholders above); or (3) you can vote in person by written ballot at the Annual Meeting.
Quorum. To carry on the business of
the Annual Meeting, a minimum number of shares, constituting a quorum, must be present. The quorum for the Annual Meeting is a
majority of the outstanding shares of Common Stock of the Company entitled to vote at the Annual Meeting. This majority may be
present in person or by proxy. Abstentions and “broker non-votes” (which are explained below) are counted as present
to determine whether there is a quorum for the Annual Meeting.
Broker Non-Votes. A “broker
non-vote” occurs when your broker submits a proxy for your shares but does not indicate a vote for a particular proposal
because the broker does not have authority to vote on that proposal and has not received voting instructions from you. “Broker
non-votes” are not counted as votes for or against the proposal in question or as abstentions, nor are they counted to determine
the number of votes present for the particular proposal (but, are counted for purposes of determining whether a quorum for the
Annual Meeting exists).
Street Name Shareholders. If you are
a beneficial owner whose shares are held by a broker, your broker has discretionary voting authority to vote your shares for the
ratification of EY, even if your broker does not receive voting instructions from you. However, your broker does not have discretionary
authority to vote on any of the other matters to be voted on at the Annual Meeting without instructions from you, in which case
a broker non-vote will occur. It is important that you instruct your broker on how to vote your shares.
Householding. Some banks, brokers
and other nominee record holders may be participating in the practice of “householding” proxy statements and annual
reports. This means that only one copy of the Company’s Proxy Statement and annual report may have been sent to multiple
shareholders in your household. The Company will promptly deliver a separate copy of any of these documents to you if you request
one by writing, calling or emailing as follows: Investor Relations, The Children’s Place, Inc., 500 Plaza Drive, Secaucus,
New Jersey 07094; telephone number (201) 558-2400 ext. 14500; or email investor_relations@childrensplace.com. If you want to receive
separate copies of the annual report or proxy statement in the future, or if you are receiving multiple copies and would like to
receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact
the Company at the above address, phone number or email address.
Shareholders of Record. If you are
a registered shareholder and do not vote by internet or telephone, or return your voted proxy card, your shares will not be voted.
If you submit your proxy card with an unclear voting designation or no voting designation at all, your shares will be voted in
favor of the particular proposal by the Proxy Committee.
Confidential Voting. All proxies,
ballots and vote tabulations that identify shareholders are confidential. An independent tabulator will receive, inspect and tabulate
your proxy whether you vote by mail, using the internet or by telephone. Your vote will not be disclosed to anyone other than the
independent tabulator without your consent, except if doing so is necessary to meet legal requirements.
62 |
2024 PROXY STATEMENT
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OTHER INFORMATION
Voting in Director Elections. Under
the Company’s Charter, in an uncontested election for Directors (i.e., an election where there are the same number of nominees
as seats on the Board up for election), Directors must be elected by a majority of the votes cast at the Annual Meeting. A majority
of votes cast is defined to mean that the number of shares voted “for” a Director’s election exceeds 50% of the
total number of votes cast “for” and “against” the election of the nominee. Accordingly, an abstention
or a withholding of authority to vote for a particular Director nominee will not count for or against that nominee.
If a Director nominee who is an incumbent
Director is not re-elected by a majority of the votes cast as set forth above, and no successor has been elected at the Annual
Meeting, the Company’s Corporate Governance Guidelines require the Director to promptly offer to tender his or her resignation
to the Board.
The CRS&G Committee will then make a
recommendation to the Board as to whether to accept or reject the tendered resignation or to take other action. The Board will
act on the tendered resignation, taking into account the Committee’s recommendation, and will publicly disclose its decision
and rationale within 90 days from the date of certification of the election results. The Committee, in making its recommendation,
and the Board, in making its decision, may each consider any factors or other information that it considers appropriate or relevant.
The Director who tenders his or her resignation shall not participate in the recommendation of the Committee or the decision of
the Board with respect to the acceptance or rejection of his or her resignation.
If a Director’s resignation is accepted
by the Board, or if a nominee who is not an incumbent Director is not elected, then the Board in its discretion may determine either
to fill such vacancy or to reduce the size of the Board.
In contested elections, where there are more
nominees than seats on the Board up for election, Directors are elected by a plurality vote. This means that, to the extent of
the number of then-available seats on the Board, the nominees who receive the most votes of all the votes cast for Directors will
be elected.
Required Vote
Proposal 1: Election of Six Members of
the Board of Directors. Each of the Director nominees who receives at least a majority of the votes cast at the Annual Meeting,
either in person or by proxy, will be elected. Votes cast are votes for or against each nominee and exclude abstentions and withheld
authority. This means that if you abstain from voting or withhold authority to vote for a particular nominee, your vote will not
count for or against the nominee. As more fully described in “Voting in Director Elections” above, any nominee in this
election who does not receive a majority of the votes cast must promptly offer to tender his or her resignation to the Board. The
CRS&G Committee will then consider the resignation and make a recommendation to the Board. As discussed above, if you hold
your shares in your name and you submit your proxy card with an unclear voting designation or no voting designation at all, the
Proxy Committee will vote your shares in favor of each of the nominees. Also, as discussed above, if your broker holds your shares,
your broker is not entitled to vote your shares on this proposal without your instructions.
Proposal 2: Ratification of Selection
of Independent Registered Public Accounting Firm. The affirmative vote of a majority of the votes cast at the Annual Meeting,
either in person or by proxy, is required to ratify the selection of the independent registered public accounting firm. This means
that if you abstain from voting on this proposal, your vote will not count for or against this proposal. When voting your proxy,
the Proxy Committee will vote for this proposal unless you instruct otherwise. As discussed above, if you hold your shares in your
name and you submit your proxy card with an unclear voting designation or no voting designation at all, the Proxy Committee will
vote your shares in favor of this proposal. Also, as discussed above, if your broker holds your shares, your broker is entitled
to vote your shares in favor of or against this proposal.
|
2024 PROXY STATEMENT
|
63 |
OTHER INFORMATION
Proposal 3: Advisory Vote on Named Executive
Officer Compensation. The affirmative vote of a majority of the votes cast at the Annual Meeting, either in person or by proxy,
is required to approve the advisory vote on named executive officer compensation. This means that if you abstain from voting on
this proposal, your vote will not count for or against this proposal. As discussed above, if you hold your shares in your name
and you submit your proxy card with an unclear voting designation or no voting designation at all, the Proxy Committee will vote
your shares in favor of this proposal. Also, as discussed above, if your broker holds your shares, your broker is not entitled
to vote your shares on this proposal without your instructions.
Future Shareholder Proposals
Under the rules of the SEC, if you wish us
to include a proposal in the proxy statement for next year’s Annual Meeting, we must receive it no later than December 20,
2024.
Under our Bylaws, if you wish to submit a
proposal for consideration at next year’s annual meeting of shareholders, the Corporate Secretary of the Company must receive
your proposal not less than 90 days nor more than 120 days prior to May 22, 2025 (the anniversary date of the immediately preceding
annual meeting of shareholders); provided, however, that in the event that the annual meeting is called for a date that is not
within 30 days before or after such anniversary date, notice by the shareholder in order to be timely must be received not later
than the close of business on the 10th day following the day on which such notice of the date of the annual meeting is mailed or
such public disclosure of the date of the annual meeting is made, whichever first occurs.
You may obtain a copy of our Bylaws from
the Corporate Secretary of the Company. These requirements apply to any matter that a shareholder wishes to raise at the annual
meeting of shareholders other than pursuant to the procedures set forth in Rule 14a-8 under the Exchange Act.
Nominations for Director
Nominations for Directors of the Company
may be made at an annual meeting of shareholders by the Board or by any shareholder of the Company who complies with the information
and timely notice requirements of the Bylaws. In addition, the CRS&G Committee will consider Director nominees recommended
by shareholders in writing if such candidates meet our criteria for Board membership. The deadline for nominations for next year’s
annual meeting of shareholders is the same as described above under “Future Shareholder Proposals”.
Cost and Methods of Soliciting Proxies
We pay the cost of soliciting proxies for
the Annual Meeting. Proxies may be solicited in person by our employees, or by mail, courier, telephone, facsimile or e-mail. In
addition, we have retained MacKenzie Partners, Inc. to perform proxy solicitation services for us, involving conducting bank/broker
searches, distributing proxy solicitation materials to shareholders, providing information to shareholders from the materials,
and soliciting proxies by mail, courier, telephone, facsimile and e-mail. In connection with its retention, MacKenzie Partners,
Inc. has agreed to provide consulting and analytic services upon request. We will pay a fee of approximately $16,000 to MacKenzie
Partners, Inc., plus out-of-pocket expenses for these services.
64 |
2024 PROXY STATEMENT
|
|
OTHER INFORMATION
Available Information
The Company’s corporate website address
is http://corporate.childrensplace.com. The information contained on the Company’s website is not included as a part of,
or incorporated by reference into, this Proxy Statement. The Company makes available, free of charge on its website, its annual
reports on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K and amendments to such reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after the Company has electronically
filed such material with, or furnished it to, the SEC. Also available on the Company’s website are the Company’s Corporate
Governance Guidelines, Code of Business Conduct, Anti-Corruption Policy, Insider Trading Policy, Clawback Policy, Equity Award
Grant Policy and the charters of the Board Committees. Hard copies of these materials are also available free of charge from the
Company’s Investor Relations department.
Other Business
As of the date of this Proxy Statement’s
printing, we do not intend to submit any matters to the Annual Meeting other than those set forth herein, and we know of no additional
matters that will be presented by others.
By order of the Board of Directors,
Jared E. Shure
Senior Vice President, General Counsel and Corporate Secretary
The Children’s Place, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094
May 6, 2024
|
2024 PROXY STATEMENT
|
65 |
[This Page Intentionally Left Blank]
ANNEX A
The Children’s Place, Inc.
Reconciliation of Non-GAAP (Adjusted)
to GAAP Financial Information
(In thousands, except per share amounts)
(Unaudited)
| |
Year-to-Date
Ended |
| |
February 3,
2024 | | |
January 28,
2023 | | |
January 29,
2022 | |
Net income (loss) | |
| $(154,541 | ) | |
| $(1,138 | ) | |
| $187,171 | |
Non-GAAP adjustments: | |
| | | |
| | | |
| | |
Asset impairment charges | |
| 34,543 | | |
| 3,256 | | |
| 1,506 | |
Restructuring charges | |
| 10,458 | | |
| 1,897 | | |
| 2,345 | |
Fleet optimization | |
| 3,086 | | |
| 1,215 | | |
| 2,375 | |
Provision for legal settlement | |
| 3,000 | | |
| 375 | | |
| — | |
Contract termination costs | |
| 2,961 | | |
| — | | |
| 750 | |
Accelerated depreciation | |
| 1,959 | | |
| 746 | | |
| 2,858 | |
Credit agreement amendment | |
| 1,762 | | |
| — | | |
| — | |
Settlement agreement | |
| (6,461 | ) | |
| — | | |
| — | |
Professional and consulting fees | |
| — | | |
| 721 | | |
| — | |
Provision for foreign settlement | |
| — | | |
| 375 | | |
| — | |
Incremental COVID-19 operating expenses | |
| — | | |
| — | | |
| 3,085 | |
Loss on debt refinancing | |
| — | | |
| — | | |
| 3,679 | |
Aggregate impact of Non-GAAP adjustments | |
| 51,308 | | |
| 8,585 | | |
| 16,598 | |
Income tax effect(1) | |
| (80 | ) | |
| (2,162 | ) | |
| (4,523 | ) |
Settlement of tax examination | |
| — | | |
| (6,379 | ) | |
| — | |
Net impact of Non-GAAP adjustments | |
| 51,228 | | |
| 44 | | |
| 12,075 | |
Adjusted net income (loss) | |
| $(103,313 | ) | |
| $(1,094 | ) | |
| $199,246 | |
GAAP net income (loss) per common share | |
| ($12.36 | ) | |
| ($0.09 | ) | |
| 12.59 | |
Adjusted net income (loss) per common share | |
| ($8.26 | ) | |
| ($0.08 | ) | |
| 13.40 | |
(1) |
The tax effects of the non-GAAP items are calculated based on the statutory rate of the jurisdiction in which the discrete item
resides, adjusted for the impact of any valuation allowance. |
|
2024 PROXY STATEMENT
|
A-1 |
ANNEX A
| |
Year-to-Date Ended |
| |
February 3, 2024 | | |
January 28, 2023 | | |
January 29, 2022 | |
Operating Income (Loss) | |
| $(83,798 | ) | |
| $(1,530 | ) | |
| $275,648 | |
Non-GAAP adjustments: | |
| | | |
| | | |
| | |
Asset impairment charges | |
| 34,543 | | |
| 3,256 | | |
| 1,506 | |
Restructuring charges | |
| 10,458 | | |
| 1,897 | | |
| 2,345 | |
Fleet optimization | |
| 3,086 | | |
| 1,215 | | |
| 2,375 | |
Provision for legal settlement | |
| 3,000 | | |
| 375 | | |
| — | |
Contract termination costs | |
| 2,961 | | |
| — | | |
| 750 | |
Accelerated depreciation | |
| 1,959 | | |
| 746 | | |
| 2,858 | |
Credit agreement amendment | |
| 1,762 | | |
| — | | |
| — | |
Settlement agreement | |
| (6,461 | ) | |
| — | | |
| — | |
Professional and consulting fees | |
| — | | |
| 721 | | |
| — | |
Provision for foreign settlement | |
| — | | |
| 375 | | |
| — | |
Incremental COVID-19 operating expenses | |
| — | | |
| — | | |
| 3,085 | |
Aggregate impact of Non-GAAP adjustments | |
| 51,308 | | |
| 8,585 | | |
| 12,919 | |
Adjusted operating income (loss) | |
| $(32,490 | ) | |
| $7,055 | | |
| $288,567 | |
| |
| |
| |
Year-to-Date Ended |
| |
| February 3,
2024 | | |
| January 28,
2023 | | |
| January 28,
2022 | |
Net Sales | |
| $1,602,508 | | |
| $1,708,482 | | |
| $1,915,364 | |
GAAP Operating Margin | |
| (5.2)% | | |
| (0.1)% | | |
| 14.4% | |
Non-GAAP (Adjusted) Operating Margin | |
| (2.0)% | | |
| 0.4% | | |
| 15.1% | |
A-2 |
2024 PROXY STATEMENT
|
|
[This Page Intentionally Left Blank]
[This Page Intentionally Left Blank]
Important Notice Regarding the Availability of Proxy Materials for the
Stockholders Meeting to Be Held on May 22, 2024:
The proxy statement and form of proxy distributed by the Board of Directors and the
Company’s Form 10-K Annual Report for the fiscal year ended February 3, 2024 are
available at http://corporate.childrensplace.com under the section “Investor Relations.”
|
|
0 |
|
THE CHILDREN’S PLACE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE CHILDREN’S PLACE, INC.
The undersigned hereby appoints Sheamus Toal and Jared Shure (the “Proxy Committee”), and each of
them, as attorneys and proxies of the undersigned, with full power of substitution, to vote all of the shares of
stock of The Children’s Place, Inc. which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of The Children’s Place, Inc. to be held at 500 Plaza Drive, Secaucus, New Jersey 07094, on
Wednesday, May 22, 2024, at 8:30 a.m., Secaucus New Jersey time, and at any and all postponements,
continuations and adjournments thereof, with all powers that the undersigned would possess if personally
present, upon and in respect of the following matters and in accordance with the following instructions.
The proxies shall vote subject to the directions indicated on the reverse side of this card, and
proxies are authorized to vote in their discretion upon other business as may properly come before the
meeting to the extent permitted by Rule 14a-4(c) under the Exchange Act. The undersigned hereby
revokes all proxies previously given.
If no specification is made, this proxy will be voted with respect to item (1) FOR the Board of
Directors’ nominees listed, (2) FOR ratification of the selection of Ernst & Young LLP as independent
registered public accounting firm of the Company for the fiscal year ending February 1, 2025 and (3)
FOR the approval, on an advisory basis, of executive compensation.
(Continued and to be signed on the reverse side)
|
1.1 |
14475 |
|
ANNUAL MEETING OF STOCKHOLDERS OF
THE CHILDREN’S PLACE, INC.
May 22, 2024
GO GREEN
e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy
material, statements and other eligible documents online, while reducing costs, clutter and
paper waste. Enroll today via https://equiniti.com/us/ast-access to enjoy online access.
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
|
|
|
052224 |
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒
The Board of Directors recommends a vote “FOR” each of the nominees for director. |
|
1. |
To elect the persons listed below to serve as directors of The Children’s Place, Inc. for a
one-year term and in each case until his or her successor is duly elected and qualified. |
|
|
|
|
|
FOR |
AGAINST |
ABSTAIN |
|
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Turki Saleh A. AlRajhi |
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☐ |
☐ |
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Hussan Arshad |
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☐ |
☐ |
☐ |
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Douglas Edwards |
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☐ |
☐ |
☐ |
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Jane Elfers |
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☐ |
☐ |
☐ |
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Muhammad Asif Seemab |
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☐ |
☐ |
☐ |
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Muhammad Umair |
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☐ |
☐ |
☐ |
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To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method. |
☐ |
The Board of Directors recommends a vote “FOR” proposals 2 and 3. |
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FOR |
AGAINST |
ABSTAIN |
2. |
To ratify the appointment of Ernst & Young LLP as the independent registered public
accounting firm of The Children’s Place, Inc. for the fiscal year ending February 1, 2025. |
☐ |
☐ |
☐ |
3. |
To approve, by non-binding vote, executive compensation as described in the proxy
statement. |
☐ |
☐ |
☐ |
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This proxy, when properly executed, will be voted in the manner directed herein by the undersigned
stockholder. If no direction is made, this proxy will be voted in accordance with the Board of Directors’
recommendations. |
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Signature of Stockholder |
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Date: |
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Signature of Stockholder |
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Date: |
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Note: |
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
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v3.24.1.u1
Pay vs Performance Disclosure
|
12 Months Ended |
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Pay vs Performance Disclosure |
|
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|
Pay vs Performance Disclosure, Table |
|
Pay Versus Performance
Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | Value of Initial Fixed $100 Investment Based on: | Net Income (or Loss) | Adjusted Operating Income (or Loss) |
Company Total Shareholder Return (TSR) | Peer Group(1) Total Shareholder Return (TSR) |
2023 | $1,250,781 | ($8,013,379)(2) | $1,207,359 | ($236,030)(3) | $36 | $152 | ($154,541,000) | ($32,490,000) |
2022 | $1,244,770 | ($2,916,093)(4) | $1,318,682 | $765,963(5) | $73 | $116 | ($1,138,000) | $7,055,000 |
2021 | $11,831,132 | $22,052,386(6) | $3,182,697 | $3,583,291(7) | $118 | $128 | $187,171,000 | $288,567,000 |
2020 | $15,736,658 | $20,312,174(8) | $2,806,044 | $3,633,116(9) | $123 | $115 | ($140,365,000) | ($56,733,000) |
Notes to the Pay Versus Performance Table
(1) | Reflects the total shareholder return indexed to $100 for the Peer Group as disclosed on page 32. The peer group used for 2023 included the removal of Express and the addition of Lands’ End, Oxford Industries, and Tilly’s. The peer group TSR calculated using the fiscal 2022 peer group would be $114 (2020, $126 (2021), $110 (2022) and $152 (2023). |
| |
(2) | The amount shown consists of the following: (i) total compensation reported in fiscal 2023, $1,250,781, less the grant date value of all equity awards granted in fiscal 2023, $0 (as previously disclosed in our 2023 proxy statement, in light of the Company’s financial results in fiscal 2023, and in order to further align her interests with those of our shareholders, our CEO has, for the second year in a row, declined to accept an LTIP equity award for fiscal 2023); (ii) TRSUs granted on May 17, 2021 which decreased in value during fiscal 2023 in the amount of $190,073 and PRSUs granted on March 18, 2021 which decreased in value during fiscal 2023 in the amount of $6,528,882; (iii) TRSUs granted on May 17, 2021 which decreased in value during fiscal 2023 prior to the vest date in the amount of $155,634; (iv) TRSUs granted on May 29, 2020, which decreased in value during fiscal 2023 prior to the vest date in the amount of $1,092,737, and PRSUs granted on June 5, 2020, which decreased in value during fiscal 2023 prior to the vest date in the amount of $1,296,834. |
| |
(3) | For fiscal 2023 the non-PEO NEOs consisted of: Maegan Markee, Sheamus Toal, Jared Shure and Claudia Lima-Guinehut (“Fiscal 2023 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2023 Non-PEO NEOs): (i) total compensation reported in fiscal 2023, $1,207,359, less the grant date value of all equity awards granted in fiscal 2023, $719,845; (ii) TRSUs granted in fiscal 2023 with a fiscal year-end value of $365,251 and PRSUs granted in fiscal 2023 with a fiscal year-end value |
| of $365,251; (iii) unvested TRSUs which decreased in value during fiscal 2023 in the amount of $412,838 and unvested PRSUs which decreased in value during fiscal 2023 in the amount of $861,841 (iv) TRSUs vested in fiscal 2023 which decreased in value during fiscal 2023 prior to the vest date in the amount of $179,365 and no PRSUs vested in fiscal 2023. |
| |
(4) | The amount shown consists of the following: (i) total compensation reported in fiscal 2022, $1,244,770, less the grant date value of all equity awards granted in fiscal 2022, $0 (as previously disclosed in our 2023 proxy statement, in light of the Company’s financial results in fiscal 2022, and in order to further align her interests with those of our shareholders, our CEO has, for the second year in a row, declined to accept an LTIP equity award for fiscal 2023); (ii) TRSUs granted on May 29, 2020 which decreased in value during fiscal 2022 in the amount of $1,074,325 and PRSUs granted on June 5, 2020 which decreased in value during fiscal 2022 in the amount of $3,828,033; (iii) TRSUs granted on May 17, 2021 which decreased in value during fiscal 2022 in the amount of $459,340 and PRSUs granted on March 18, 2021 which increased in value during fiscal 2022 in the amount of $2,309,667; (iv) TRSUs vested on May 17, 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $189,858 and TRSUs vested on May 31, 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $918,974. |
| |
(5) | For fiscal 2022 the non-PEO NEOs consisted of: Sheamus Toal, Claudia Lima-Guinehut, Jared Shure and Robert Helm (“Fiscal 2022 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2022 Non-PEO NEOs): (i) total compensation reported in fiscal 2022, $1,318,682, less the grant date value of all equity awards granted in fiscal 2022, $925,024; (ii) TRSUs granted in fiscal 2022 with a fiscal year-end value of $775,993 and PRSUs granted in fiscal 2021 with a fiscal year-end value of $223,188; (iii) unvested TRSUs which decreased in value during fiscal 2022 in the amount of $373,697 and unvested PRSUs which decreased in value during fiscal 2022 in the amount of $113,738; (iv) TRSUs vested in fiscal 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $121,347 and PRSUs vested in fiscal 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $18,096. |
| |
(6) | The amount shown consists of the following: (i) total compensation reported in fiscal 2021, $11,831,132, less the grant date value of all equity awards granted in fiscal 2021, $7,069,367; (ii) TRSUs granted on May 17, 2021 with a fiscal year-end value of $1,808,195 and PRSUs granted on March 18, 2021 with a fiscal year-end value of $4,219,215; (iii) TRSUs granted on May 29, 2020 which decreased in value during fiscal 2021 in the amount of $242,555 and PRSUs granted on June 5, 2020 which increased in value during fiscal 2021 in the amount of $8,094,391; (iv) PRSUs vested on June 25, 2021 which increased in value during fiscal 2021 prior to the vest date in the amount of $2,529,626 and TRSUs vested on June 1, 2021 which increased in value during fiscal 2021 prior to the vest date in the amount of $881,751. |
| |
(7) | For fiscal 2021 the non-PEO NEOs consisted of: Leah Swan, Robert Helm, Bradley Cost and Claudia Lima-Guinehut (“Fiscal 2021 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2021 Non-PEO NEOs): (i) total compensation reported in fiscal 2021, $3,182,697, less the grant date value of all equity awards granted in fiscal 2021, $1,750,038; (ii) TRSUs granted in fiscal 2021 with a fiscal year-end value of $988,520 and PRSUs granted in fiscal 2021 with a fiscal year-end value of $695,014; (iii) unvested TRSUs which decreased in value during fiscal 2021 in the amount of $76,301 and unvested PRSUs which increased in value during fiscal 2021 in the amount of $351,196; (iv) TRSUs vested in fiscal 2021 which increased in value during fiscal 2021 prior to the vest date in the amount of $192,204. |
| |
(8) | The amount shown consists of the following: (i) total compensation reported in fiscal 2020, $15,736,658, less the grant date value of all equity awards granted in fiscal 2020, $11,263,222; (ii) TRSUs granted on May 29, 2020 with a fiscal year-end value of $8,822,057 and PRSUs granted on June 5, 2020 with a fiscal year-end value of $8,822,057; (iii) PRSUs granted on June 27, 2019 which decreased in value during fiscal 2020 in the amount of $1,814,862; (iv) PRSUs vested on April 2, 2020 which decreased in value during fiscal 2020 prior to the vest date in the amount of $85,389 and TRSUs vested on February 7, 2020 which increased in value during fiscal 2020 prior to the vest date in the amount of $94,875. |
| |
(9) | For fiscal 2020 the non-PEO NEOs consisted of: Leah Swan, Michael Scarpa, Robert Helm and Claudia Lima-Guinehut (“Fiscal 2020 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2020 Non-PEO NEOs): (i) total compensation reported in fiscal 2020, $2,806,044, less the grant date value of all equity awards granted in fiscal 2020, $1,500,690; (ii) TRSUs granted in fiscal 2020 with a fiscal year-end value of $2,095,273 and PRSUs granted in fiscal 2020 with a fiscal year-end value of $441,114; (iii) unvested TRSUs which increased in value during fiscal 2020 in the amount of $130,209 and unvested PRSUs which decreased in value during fiscal 2020 in the amount of $117,812; (iv) TRSUs vested in fiscal 2020 which decreased in value during fiscal 2020 prior to the vest date in the amount of $214,557 and PRSUs vested in fiscal 2020 which decreased in value during fiscal 2020 prior to the vest date in the amount of $6,465. |
|
|
|
|
|
|
|
|
Company Selected Measure Name |
|
Adjusted Operating Income
|
|
|
|
|
|
|
|
Named Executive Officers, Footnote |
|
Maegan Markee, Sheamus Toal, Jared Shure and Claudia Lima-Guinehut
|
|
Sheamus Toal, Claudia Lima-Guinehut, Jared Shure and Robert Helm
|
|
Leah Swan, Robert Helm, Bradley Cost and Claudia Lima-Guinehut
|
|
Leah Swan, Michael Scarpa, Robert Helm and Claudia Lima-Guinehut
|
|
PEO Total Compensation Amount |
|
$ 1,250,781
|
|
$ 1,244,770
|
|
$ 11,831,132
|
|
$ 15,736,658
|
|
PEO Actually Paid Compensation Amount |
|
$ (8,013,379)
|
[1] |
(2,916,093)
|
[2] |
22,052,386
|
[3] |
20,312,174
|
[4] |
Adjustment To PEO Compensation, Footnote |
|
(2)The amount shown consists of the following: (i) total compensation reported in fiscal 2023, $1,250,781, less the grant date value of all equity awards granted in fiscal 2023, $0 (as previously disclosed in our 2023 proxy statement, in light of the Company’s financial results in fiscal 2023, and in order to further align her interests with those of our shareholders, our CEO has, for the second year in a row, declined to accept an LTIP equity award for fiscal 2023); (ii) TRSUs granted on May 17, 2021 which decreased in value during fiscal 2023 in the amount of $190,073 and PRSUs granted on March 18, 2021 which decreased in value during fiscal 2023 in the amount of $6,528,882; (iii) TRSUs granted on May 17, 2021 which decreased in value during fiscal 2023 prior to the vest date in the amount of $155,634; (iv) TRSUs granted on May 29, 2020, which decreased in value during fiscal 2023 prior to the vest date in the amount of $1,092,737, and PRSUs granted on June 5, 2020, which decreased in value during fiscal 2023 prior to the vest date in the amount of $1,296,834.(4)The amount shown consists of the following: (i) total compensation reported in fiscal 2022, $1,244,770, less the grant date value of all equity awards granted in fiscal 2022, $0 (as previously disclosed in our 2023 proxy statement, in light of the Company’s financial results in fiscal 2022, and in order to further align her interests with those of our shareholders, our CEO has, for the second year in a row, declined to accept an LTIP equity award for fiscal 2023); (ii) TRSUs granted on May 29, 2020 which decreased in value during fiscal 2022 in the amount of $1,074,325 and PRSUs granted on June 5, 2020 which decreased in value during fiscal 2022 in the amount of $3,828,033; (iii) TRSUs granted on May 17, 2021 which decreased in value during fiscal 2022 in the amount of $459,340 and PRSUs granted on March 18, 2021 which increased in value during fiscal 2022 in the amount of $2,309,667; (iv) TRSUs vested on May 17, 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $189,858 and TRSUs vested on May 31, 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $918,974.(6)The amount shown consists of the following: (i) total compensation reported in fiscal 2021, $11,831,132, less the grant date value of all equity awards granted in fiscal 2021, $7,069,367; (ii) TRSUs granted on May 17, 2021 with a fiscal year-end value of $1,808,195 and PRSUs granted on March 18, 2021 with a fiscal year-end value of $4,219,215; (iii) TRSUs granted on May 29, 2020 which decreased in value during fiscal 2021 in the amount of $242,555 and PRSUs granted on June 5, 2020 which increased in value during fiscal 2021 in the amount of $8,094,391; (iv) PRSUs vested on June 25, 2021 which increased in value during fiscal 2021 prior to the vest date in the amount of $2,529,626 and TRSUs vested on June 1, 2021 which increased in value during fiscal 2021 prior to the vest date in the amount of $881,751.(8)The amount shown consists of the following: (i) total compensation reported in fiscal 2020, $15,736,658, less the grant date value of all equity awards granted in fiscal 2020, $11,263,222; (ii) TRSUs granted on May 29, 2020 with a fiscal year-end value of $8,822,057 and PRSUs granted on June 5, 2020 with a fiscal year-end value of $8,822,057; (iii) PRSUs granted on June 27, 2019 which decreased in value during fiscal 2020 in the amount of $1,814,862; (iv) PRSUs vested on April 2, 2020 which decreased in value during fiscal 2020 prior to the vest date in the amount of $85,389 and TRSUs vested on February 7, 2020 which increased in value during fiscal 2020 prior to the vest date in the amount of $94,875.
|
|
|
|
|
|
|
|
Non-PEO NEO Average Total Compensation Amount |
|
$ 1,207,359
|
|
1,318,682
|
|
3,182,697
|
|
2,806,044
|
|
Non-PEO NEO Average Compensation Actually Paid Amount |
|
$ (236,030)
|
[5] |
765,963
|
[6] |
3,583,291
|
[7] |
3,633,116
|
[8] |
Adjustment to Non-PEO NEO Compensation Footnote |
|
(3)For fiscal 2023 the non-PEO NEOs consisted of: Maegan Markee, Sheamus Toal, Jared Shure and Claudia Lima-Guinehut (“Fiscal 2023 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2023 Non-PEO NEOs): (i) total compensation reported in fiscal 2023, $1,207,359, less the grant date value of all equity awards granted in fiscal 2023, $719,845; (ii) TRSUs granted in fiscal 2023 with a fiscal year-end value of $365,251 and PRSUs granted in fiscal 2023 with a fiscal year-end value of $365,251; (iii) unvested TRSUs which decreased in value during fiscal 2023 in the amount of $412,838 and unvested PRSUs which decreased in value during fiscal 2023 in the amount of $861,841 (iv) TRSUs vested in fiscal 2023 which decreased in value during fiscal 2023 prior to the vest date in the amount of $179,365 and no PRSUs vested in fiscal 2023.(5)For fiscal 2022 the non-PEO NEOs consisted of: Sheamus Toal, Claudia Lima-Guinehut, Jared Shure and Robert Helm (“Fiscal 2022 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2022 Non-PEO NEOs): (i) total compensation reported in fiscal 2022, $1,318,682, less the grant date value of all equity awards granted in fiscal 2022, $925,024; (ii) TRSUs granted in fiscal 2022 with a fiscal year-end value of $775,993 and PRSUs granted in fiscal 2021 with a fiscal year-end value of $223,188; (iii) unvested TRSUs which decreased in value during fiscal 2022 in the amount of $373,697 and unvested PRSUs which decreased in value during fiscal 2022 in the amount of $113,738; (iv) TRSUs vested in fiscal 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $121,347 and PRSUs vested in fiscal 2022 which decreased in value during fiscal 2022 prior to the vest date in the amount of $18,096.(7)For fiscal 2021 the non-PEO NEOs consisted of: Leah Swan, Robert Helm, Bradley Cost and Claudia Lima-Guinehut (“Fiscal 2021 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2021 Non-PEO NEOs): (i) total compensation reported in fiscal 2021, $3,182,697, less the grant date value of all equity awards granted in fiscal 2021, $1,750,038; (ii) TRSUs granted in fiscal 2021 with a fiscal year-end value of $988,520 and PRSUs granted in fiscal 2021 with a fiscal year-end value of $695,014; (iii) unvested TRSUs which decreased in value during fiscal 2021 in the amount of $76,301 and unvested PRSUs which increased in value during fiscal 2021 in the amount of $351,196; (iv) TRSUs vested in fiscal 2021 which increased in value during fiscal 2021 prior to the vest date in the amount of $192,204.(9)For fiscal 2020 the non-PEO NEOs consisted of: Leah Swan, Michael Scarpa, Robert Helm and Claudia Lima-Guinehut (“Fiscal 2020 Non-PEO NEOs”). The amount shown consists of the following (in each case, as average values for the Fiscal 2020 Non-PEO NEOs): (i) total compensation reported in fiscal 2020, $2,806,044, less the grant date value of all equity awards granted in fiscal 2020, $1,500,690; (ii) TRSUs granted in fiscal 2020 with a fiscal year-end value of $2,095,273 and PRSUs granted in fiscal 2020 with a fiscal year-end value of $441,114; (iii) unvested TRSUs which increased in value during fiscal 2020 in the amount of $130,209 and unvested PRSUs which decreased in value during fiscal 2020 in the amount of $117,812; (iv) TRSUs vested in fiscal 2020 which decreased in value during fiscal 2020 prior to the vest date in the amount of $214,557 and PRSUs vested in fiscal 2020 which decreased in value during fiscal 2020 prior to the vest date in the amount of $6,465.
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Compensation Actually Paid vs. Total Shareholder Return |
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Compensation Actually Paid vs. Net Income |
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Compensation Actually Paid vs. Company Selected Measure |
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Tabular List, Table |
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Company-Selected Financial Performance Measures |
Adjusted Operating Income |
Adjusted EPS |
Adjusted Operating Margin Expansion |
Adjusted ROIC |
Better Cotton |
Black/African American Associate Representation |
|
|
|
|
|
|
|
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Total Shareholder Return Amount |
|
$ 36
|
|
73
|
|
118
|
|
123
|
|
Peer Group Total Shareholder Return Amount |
[9] |
152
|
|
116
|
|
128
|
|
115
|
|
Net Income (Loss) |
|
$ (154,541,000)
|
|
$ (1,138,000)
|
|
$ 187,171,000
|
|
$ (140,365,000)
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Company Selected Measure Amount |
|
(32,490,000)
|
|
7,055,000
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288,567,000
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(56,733,000)
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PEO Name |
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Jane Elfers
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Measure:: 1 |
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Pay vs Performance Disclosure |
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Name |
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Adjusted Operating Income
|
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Measure:: 2 |
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Pay vs Performance Disclosure |
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Name |
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Adjusted EPS
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Measure:: 3 |
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Pay vs Performance Disclosure |
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Name |
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Adjusted Operating Margin Expansion
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Measure:: 4 |
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Pay vs Performance Disclosure |
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Name |
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Adjusted ROIC
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Measure:: 5 |
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Pay vs Performance Disclosure |
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Name |
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Better Cotton
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Measure:: 6 |
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Pay vs Performance Disclosure |
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Name |
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Black/African American Associate Representation
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Peer Group TSR [Member] |
|
|
|
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
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|
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Adjustment to Compensation, Amount |
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$ 152
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|
$ 110
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|
$ 126
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|
$ 114
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Grant Date Value of All Equity Awards Granted [Member] |
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Pay vs Performance Disclosure |
|
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Adjustment to Compensation, Amount |
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0
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0
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1,500,690
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TRSU granted on May 17, 2021 [Member] |
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|
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Pay vs Performance Disclosure |
|
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Adjustment to Compensation, Amount |
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190,073
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|
459,340
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1,808,195
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PRSU granted on March 18, 2021 [Member] |
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|
|
|
|
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Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
6,528,882
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2,309,667
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4,219,215
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|
TRSU granted on May 17, 2021 Pior to Vest Date [Member] |
|
|
|
|
|
|
|
|
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Pay vs Performance Disclosure |
|
|
|
|
|
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Adjustment to Compensation, Amount |
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155,634
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TRSU granted on May 29, 2020 [Member] |
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Pay vs Performance Disclosure |
|
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|
|
|
|
|
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Adjustment to Compensation, Amount |
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1,092,737
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1,074,325
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242,555
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8,822,057
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PRSU granted on June 5, 2020 [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
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1,296,834
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3,828,033
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8,094,391
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8,822,057
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TRSU granted [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
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365,251
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775,993
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988,520
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2,095,273
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PRSU granted [Member] |
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Pay vs Performance Disclosure |
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|
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Adjustment to Compensation, Amount |
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365,251
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|
223,188
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|
695,014
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441,114
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Unvested TRSU [Member] |
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|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
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Adjustment to Compensation, Amount |
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412,838
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373,697
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76,301
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130,209
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Unvested PRSU [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
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861,841
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113,738
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351,196
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117,812
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Vested TRSU [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
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179,365
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121,347
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192,204
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214,557
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TRSU vested on May 17, 2022 [Member] |
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|
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Pay vs Performance Disclosure |
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|
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|
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|
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Adjustment to Compensation, Amount |
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|
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189,858
|
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|
TRSU vested on May 31, 2022 [Member] |
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Pay vs Performance Disclosure |
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|
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Adjustment to Compensation, Amount |
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918,974
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Vested PRSU [Member] |
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Pay vs Performance Disclosure |
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|
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Adjustment to Compensation, Amount |
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|
|
18,096
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|
6,465
|
|
PRSU vested on June 25, 2021 [Member] |
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Pay vs Performance Disclosure |
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|
|
|
|
|
|
|
Adjustment to Compensation, Amount |
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|
|
|
|
2,529,626
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|
TRSU vested on June 1, 2021 [Member] |
|
|
|
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
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Adjustment to Compensation, Amount |
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|
|
|
|
881,751
|
|
|
|
PRSU granted on June 27, 2019 [Member] |
|
|
|
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
|
|
1,814,862
|
|
PRSU vested on April 2, 2020 [Member] |
|
|
|
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
|
|
85,389
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|
TRSY vested on February 7, 2020 [Member] |
|
|
|
|
|
|
|
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|
Pay vs Performance Disclosure |
|
|
|
|
|
|
|
|
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Adjustment to Compensation, Amount |
|
|
|
|
|
|
|
94,875
|
|
PEO | Grant Date Value of All Equity Awards Granted [Member] |
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Pay vs Performance Disclosure |
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|
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Adjustment to Compensation, Amount |
|
|
|
|
|
7,069,367
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$ 11,263,222
|
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Non-PEO NEO | Grant Date Value of All Equity Awards Granted [Member] |
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|
|
|
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|
|
|
Pay vs Performance Disclosure |
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|
|
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
$ 719,845
|
|
$ 925,024
|
|
$ 1,750,038
|
|
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