The Board has established an Audit Committee, a Nominating and Corporate Governance Committee (“NCG Committee”) and a Compensation Committee. The memberships and functions of these committees are set forth below. The Board has no standing Executive Committee. Michael J. Newsome and Jeffry O. Rosenthal areE. Longo is the only non-independent DirectorsDirector on the Board and dodoes not serve on any committee. The following table below provides Fiscal 20192022 membership and meeting information for each of the Board Committees.
Under the terms of its Charter, the Compensation Committee is directly responsible for establishing compensation policies for our executive officers. The Compensation Committee met eight times in Fiscal 2022.
The Compensation Committee may, in its sole discretion, obtain the advice of any compensation consultant, legal counsel or other advisor to assist in the evaluation of the compensation of our CEO and other elected executive officers. In employing external advisors, the Compensation Committee considers independence factors required by NASDAQNasdaq and the Securities Exchange Act of 1934.1934, as amended (Exchange Act). In addition, the committeeCommittee may obtain assistance and resources from Company employees as it deems necessary, to carry out its responsibilities under its charter.
The NCG Committee is authorized to exercise oversight with respect to the nomination of candidates for the Board in such a fashion as determined from time to time by the Board. The NCG Committee has recommended the election of Ms. Aggers,Mr. Ramesh, Ms. Etzkorn and Mr. YotherMs. Hubbard as Class II Directors at the 20192022 Annual Meeting of Stockholders. Under the terms of its Charter, the NCG Committee meets at least one time annually, and met foursix times in Fiscal 2019.2022.
The NCG Committee’s purpose is to advise the Board on the composition, organization, effectiveness and compensation of the Board and its committees and on other issues relating to the Company’s corporate governance. The NCG Committee’s duties and responsibilities primarily relate to director nominations, Board and Committee effectiveness, Board structure and Director compensation, corporate governance and stockholder communications and disclosure.
(5) Ms. EtzkornFlur was appointed Chair of our NCG Committee in May 2021.
Fees earned or paid in cash consist of annual Board fees to all non-employee Directors and annual retainers for our Lead DirectorChairman of the Board and ChairChairs of our Audit, Compensation and CompensationNCG Committees. The Board adopted the following pay structure in Fiscal 20192022 for non-management Directors:
There were two plans that governed equity awards to non-employee Directors during Fiscal 2019.
2022.
2012 Non-Employee Director Equity Plan (DEP)HIBBETT® 2022 Proxy Statement - 37 -
DEP. The DEP provides for grants of equity awards to non-employee Directors and was adopted by our stockholders and made effective on May 24, 2012. The DEP allows each non-employee Director to elect the form of equity they prefer and to receive their equity on a tax deferred basis. Non-employee Directors receive a fully vested equity award based on the value approved by the Board and the irrevocable elections must be made prior to the beginning of each calendar year. If no choice is made, the equity award will be issued as stock options.
A newly appointed or elected non-employee Director to the Board can elect a form of equity prior to the first Board meeting attended. If no choice is made, the equity award will be issued as stock options based on the value approved by the Board for newly appointed or elected Directors. This initial award is subject to forfeiture if the Director does not complete one year of service on the Board, subject to death, change in control or subsequent Board action.
Each non-employee Director who is elected or appointed to the Board receives an equity award upon election, receives $75,000 in value of stock determined as of the market close on the date of grant. Eachelection. An annual grant is made to each non-employee Director who has served a full fiscal year, receives $100,000 in value of stock determined as of the market close on the date of grant,which is pro-rated for Directors who serve less than one full fiscal year. The Chair of our Board receives $150,000 in value of stock determined as of the market close on the date of grant. Under the DEP, the Board has elected to reduce the actual value of grants to Directors, with the exception of our Chair, below the stockholder approved maximum value allowed for equity awards to each non-employee Directors is $150,000 annually. The Board currently awards below the maximum value allowed. For Fiscal 2022, the value of $150,000.the award to each tenured Director was $110,000 with the exception of Mr. Crudele whose award value was $135,000 as Chairman of the Board. Mr. Jackson received a pro-rated award based on his Fiscal 2021 service and Ms. Hubbard received an award value of $75,000 for newly appointed/elected Directors.
The annual option grant to non-employee Directors is governed by the DEP. The annual grant to non-employee Directors occurs on the same date as the annual grant of equity awards to management and our other employees. The Compensation Committee has adopted the annual grant date as no earlier than the third business day following the release of the Company’s annual earnings for the fiscal year, but no later than the first (1st) Monday in April. Equity forms allowed under the DEP are stock options, stock appreciation rights, restricted stock and restricted stock units.
2015
The expiration date of the DEP is May 24, 2022. See Proposal Number 4 that proposes to, through the adoption of the Hibbett, Inc. Amended and Restated Non-Employee Director Equity Plan, extend the DEP through May 25, 2032 and provide for 500,000 total shares available for grant, pending stockholder approval.
Deferred Compensation Plan (Deferred Plan). The 2015 Deferred Plan was adopted effective July 1, 2015 and allows non-employee directors an election to defer all or a portion of their fees into cash, stock units or stock options annually on a calendar year basis. Any eligible Director may make a deferral by delivering an election to us no later than December 31 of the year immediately preceding the year to which the election is related. Newly elected or appointed eligible Directors have 30 days following the date on which they first became a Director to make suchan election.
TwoOne eligible DirectorsDirector deferred all Board fees earned in Fiscal 20192022 and one eligible Director deferred a portion of Board fees earned in Fiscal 2019.2022. For Fiscal 2020, two2023, one eligible Directors haveDirector has elected to defer all or a portion of theirher
Board fees. Deferrals to stock unitsoption awards are governed by the DEP. Deferral elections for Fiscal 20202022 were made pursuant to the Deferred Plan.
The annual option grant to non-employee Directors in Fiscal 2019 was governed by the DEP. The annual grant to non-employee Directors occurs on the same date as the annual grant of equity awards to management and our other employees. The Compensation Committee has adopted the annual grant date as no earlier than the third business day following the release of the Company’s annual earnings for the fiscal year, but no later than the first (1st) Monday in April. Stock awards under the DEP relating to service during the current fiscal year are awarded the following fiscal year to eligible directors serving as a director on the last day of our fiscal year. All of our non-employee Directors served the full fiscal year and were awarded a value of $100,000 in the equity form of their choice, with the exception of Mr. Hilt. Mr. Newsome, as Chair of the Board, was awarded a value of $150,000 in the equity form of his choice. The annual awards to Directors were dated March 28, 2018. Mr. Hilt was appointed to the Board in August 2017 and was awarded a pro-rata value of $46,849.
Stock Awards.Under the 2015 Deferred Plan, the election to defer fees into stock units is calculated by taking the total fees deferred each calendar quarter and dividing by the closing price of our common stock on the next to last day of the calendar quarter to determine the number of stock units earned for that period. Stock units earned are governed by the DEP.
Ms. Aggers elected to defer 25% of her Board fees earned during Fiscal 20192022 into stock units. In Fiscal 2019,2022, Ms. Aggers deferred total fees of $23,750approximately $7,900 which converted into 1,238107 stock units. Ms. EtzkornHubbard elected to defer 100% of her Board fees earned during Fiscal 20192022 into stock units. In Fiscal 2019,2022, Ms. EtzkornHubbard deferred total fees of $70,000approximately $48,000 which converted into 3,650622 stock units.
Option Awards.Under the 2015 Deferred Plan, the election to defer fees into stock options is calculated by taking the total fees deferred each calendar quarter and dividing by the closing price of our common stock on the next to last
HIBBETT® 2022 Proxy Statement - 38 -
day of the calendar quarter times a factor of 0.33 to determine the number of stock options earned for that period. Stock options earned are governed by the DEP.
Options awarded to non-employee Directors vest immediately upon grant and expire on the tenth anniversary of the date of grant. We apply the fair value recognition provisions of ASC Topic 718. The fair value of each stock option is estimated on the grant date using the Black-Scholes option-pricing model. (See Note 43 to the consolidated financial statements in our Annual Report on Form 10-K filed on April 18, 2019.Report.) Mr. Hilt opted to defer fees into stock options in Fiscal 2019.
All Other Compensation
We have determined that there was no other compensation paid to Directors for director services in Fiscal 20192022 except for the interest earned on Mr. Yother’s deferred compensation. It does not include occasional giftgifts to Directors, usually in the form of sporting goodsathletic-inspired merchandise such as footwear or apparel, and the interest earned on Messrs. Newsome’s and Yother’s deferred compensation. The occasional giftswhich have a negligible market value. Each Director is entitled to reimbursement for his/her reasonable out-of-pocket expenses incurred in connection with travel to and from, and attendance at, meetings of the Board or its committees and related activities, including director education courses and materials.
Director Compensation Changes for Fiscal 20202023
Currently, there are no changes planned changes tofor the compensation structure for non-employee Directors for Fiscal 2020.
However, with2023. The NCG Committee typically reassesses the pending retirement of our Chairman, Mr. Newsome, at this year’s Annual Meeting of Stockholders, the Nominating and Corporate Governance Committee will be assessing Board structure, committee assignments and compensation overannually after the next few months.Annual Meeting.
Stock Ownership Requirements for Non-Employee Directors
The Compensation Committee has adopted stock ownership requirements for Directors in an effort to better align personal and corporate incentives of Directors with our stockholders. Within three years of a Director’s election or appointment, non-employee Directors are required to maintain ownership of Company equity in an amount equal to threefour times (3x)(4x) their annual cash retainer. Company equity may be in the form of common stock or common stock equivalents such as options, restricted stock, stock units, etc. Common stock and common stock equivalents are valued based on the closing price of our common stock on the last business day of the fiscal year, and stock options are valued using the Black Scholes method as if the award had been granted on the last day of the fiscal year but usingif the initial grant date strike price.stock options are “in-the-money” as of the last business day of the fiscal year.
Once the ownership requirement threshold is initially achieved, the Director will be granted reasonable, additional time to re-achieve the required equitystock ownership level if it is determined that the ownership fell below the required level due solely to a price decline of our stock, as opposed to the sellingdisposition of Company equity.
As of the fiscal year ended February 2, 2019,January 29, 2022, all of our non-employee Directors were in compliance with the stock ownership requirements, with the exception ofincluding Ms. Etzkorn who was appointed on November 1, 2016Hubbard and Mr. Finley whose ownership fell belowJackson who were elected to the Board in May 2021 and May 2020, respectively, and who have three years from their appointment to achieve the required level due solely to the decline in price of our common stock.ownership amount.
COMPENSATION COMMITTEE REPORT
The Compensation Discussion and Analysis (CD&A)(the “CD&A”) included in this Proxy Statement is intended to provide our stockholders with information about our compensation philosophy and to understand our rationale and decision-making process concerning our compensation practices with respect to our NEOs through clearly communicated narratives and tables.
We have identified the NEOs for Fiscal 2019 as:
● | Jeffry O. Rosenthal, our Chief Executive Officer (CEO) and President; |
● | Scott J. Bowman, our Senior Vice President and Chief Financial Officer (CFO); |
● | Cathy E. Pryor, our Senior Vice President of Operations; and |
● | Jared S. Briskin, our Senior Vice President and Chief Merchant. |
The CD&A should be read in conjunction with the Summary Compensation Table, related tables and narrative disclosures contained within. We have reviewed the CD&A included in this Proxy Statement and discussed it with management. In reliance on such reviews and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis following this report be included in this Proxy
HIBBETT® 2022 Proxy Statement - 39 -
Statement and, through incorporation by reference from this Proxy Statement, the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019.January 29, 2022.
Submitted by the members of the Compensation Committee of the Company’s Board of Directors:
Jane F. Aggers, Chair; Lorna E. Nagler, Chair,
Karen S. Etzkorn, Terrance G. Finley and Ralph ParksJames A. Hilt
The Compensation Committee report does not constitute soliciting material and shall not be deemed to be filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates the Compensation Committee Report by reference therein.
Compensation Risk Assessment
As part of our overall business risk assessment, we conduct an assessment of our compensation plans and measures to evaluate whether the plans may cause the Board, executives, managers and/or all employees to act in an undesired manner inconsistent with Company objectives, strategies and ethical standards and with prudent business practices. We further evaluate whether the Company may fail to identify Key Performance Indicators (KPI) and/or accurately report existing KPIs. The Compensation Committee supports the Board’s oversight of risk management by addressing risks inherent in matters under the Committee’s purview, including executive compensation, incentive plans and succession planning.
We present and discuss the findings of the risk assessment with the Audit Committee on an annual basis. Based upon the assessment and discussions with the Audit Committee, we believe that our compensation policies and practices do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on the Company.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is a current or former officer of the Company or any of our subsidiaries. In addition, none of the members of the Compensation Committee has or had any relationship with the Company during Fiscal 20192022 that requires disclosure in accordance with the applicable SEC rules of the Securities and Exchange Commission relating to compensation committee interlocks and insider participation.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis (CD&A)
Executive SummaryThis Compensation Discussion and Analysis describes our executive compensation program, including a discussion of our compensation objectives and philosophy and the material elements of the program. The discussion is focused on our named executive officers (NEOs) for Fiscal 2022, who were:
| | | | | | | | |
Named Executive Officer | | Title |
Michael E. Longo | | President and Chief Executive Officer |
Robert J. Volke | | Senior Vice President and Chief Financial Officer |
Jared S. Briskin | | Executive Vice President, Merchandising |
William G. Quinn | | Senior Vice President, Marketing and Digital |
Ronald P. Blahnik | | Senior Vice President and Chief Information Officer |
HIBBETT® 2022 Proxy Statement - 40 -
Fiscal 2022 Compensation Highlights
The primary objectives of our executive compensation program arein Fiscal 2022 were to provide compensation that:
● | attracts and retains highly qualified executive officers and motivates them to deliver a consistently high level of performance; |
● | aligns the economic interests of our executive officers with those of our stockholders by placing a substantial portion of their compensation at risk through performance goals that, if achieved, are expected to increase total stockholder return; |
•attracts and retains highly qualified executive officers and motivates them to deliver a consistently high level of performance;● | rewards performance that emphasizes teamwork among executive officers that supports healthy Company growth and supports the Company’s values by promoting a culture of integrity, business ethics and customer service; and |
•aligns the economic interests of our executive officers with those of our stockholders by placing a portion of their compensation at risk through performance goals that, if achieved, are expected to increase total stockholder return;● | rewards execution of short-term and long-term strategic initiatives. |
•rewards performance that emphasizes teamwork among executive officers that supports healthy Company growth and supports the Company’s values by promoting a culture of integrity, business ethics and customer service; and•rewards execution of short-term and long-term strategic initiatives.
We believe the compensation earned by our NEOs reflect our financial results in Fiscal 2019,2022, particularly their variable or at risk compensation. The performance and pay results are strong indicators that our business strategy and compensation philosophies are appropriately synchronized.
TheIn Fiscal 2022, the Compensation Committee structuresstructured the total compensation program for executives to consist of:
● | performance-based cash bonus, |
•base salary,● | performance-based equity awards, and |
•performance-based cash bonus,● | certain other benefits, including a nonqualified deferred compensation plan and supplemental 401(k) plan discussed in more detail later in this document. |
•performance-based equity awards,
•service-based equity awards, and
Our•certain other benefits discussed in more detail later in this document.
Apart from the changes discussed below for Fiscal 2021 as a result of the impacts of the COVID-19 pandemic, our compensation programphilosophy has been consistently applied by the Compensation Committee for several years. The Compensation Committee believes that a majority of the total compensation opportunity for executives should be variable or at risk with the majority allocated to cash bonuses and equity awards that are contingent on the achievement of pre-determinedpredetermined performance measures in order to align compensation with the interests of stockholders. Performance measures for management are based on Company-wide targets, with a greater emphasis for more senior personnel.
AtEach year, we seek to mitigate compensation-related risk through:
•an annual enterprise-wide risk assessment, which includes compensation;
•a recoupment policy for NEOs and other employees covering both cash incentive and equity compensation;
•stock ownership guidelines for all NEOs and Directors;
•no guaranteed bonuses; and
•an anti-hedging policy applicable to all Directors, executive officers and certain employees.
COVID-19 Impacts to Fiscal 2021 Incentive Compensation and Equity Awards
Our Compensation Committee historically bases the 2018 Annual Meeting of Stockholders,performance-incentive program (including cash incentive and equity) for our stockholders soundly approved our Fiscal 2018 named executive officer compensation program, receiving 97.3% of eligible votes cast in favor.officers on Company metrics, which over the last several years has been Return on Invested Capital (“ROIC”) and Earnings Before Interest and Taxes (“EBIT”). The Compensation Committee concluded thatagain based the stockholders support our compensation policies and programs, whichshort-term cash incentive on EBIT for Fiscal 2021 but in light of the onset of the COVID-19 pandemic, the Compensation Committee believes continuedecided to provide a competitive pay-for-performance package that effectively incentivizesaward only service-based equity awards to our NEOs and reinforcesexecutive officers in Fiscal 2021. In addition, the Compensation Committee’s views thatCommittee moved away from value-based awards for all team members, including our executive compensation program is achieving its objectivesofficers.
This varied from our historical practice of awarding a specific value of awards that was determined based on the price of our common stock on the date of grant in a mix of performance-based and service-based awards. The
HIBBETT® 2022 Proxy Statement - 41 -
Compensation Committee reasoned that the depressed price of our common stock at that time could yield an unintended windfall to our executive officers. The Compensation Committee believed that under the current economic environment at that time, all team members were faced with unmitigated working conditions to keep our business on track towards our strategic goals for Fiscal 2021 and beyond. In considering overall workforce retention and the unknown, immeasurable effects of the pandemic, the Compensation Committee determined it was important to award equity to executive officers and eligible team members recognizing that all were working under unprecedented conditions while protecting against unintended windfalls.
The Compensation Committee believes that their decision in Fiscal 2021 to grant equity awards without giving riseperformance conditions to excessive risk.
Fiscal 2019 Executive Compensation Highlights
We pay for Performance |
▪ | A significant portion of our named executive officers' (NEOs) total target compensation is "at-risk" |
| For Fiscal 2019: |
| » | 54% for the Chief Executive Officer (CEO) and President |
| » | 48% for the Senior Vice President and Chief Financial Officer (CFO) |
| » | 48% for the Senior Vice President of Operations |
| » | 48% for the Senior Vice President and Chief Merchant |
▪ | A minimum of 87% of equity compensation and annual cash incentive compensation is tied to |
| performance against pre-established, specific, measurable financial performance goals |
We seek to Mitigate Compensation-Related Risk |
▪ | Annual enterprise-wide risk assessment, including compensation |
▪ | Clawback policy for NEOs and other employees covering both cash incentive and equity
|
| compensation |
▪ | Stock ownership guidelines for all NEOs and Directors |
▪ | No guaranteed bonuses |
▪ | Anti-hedging policy applicable to all employees, officers and Directors |
Set forth below isour executive officers was the Fiscal 2019 target annual compensation mixright decision for our NEOs:
Chief Executive Officer | | Average of all other NEOs | |
54% Performance-Based | | 48% Performance-Based | |
| | | | | | | | |
stockholders and was reflected in the Company’s financial results for Fiscal 2021.
(1) | Performance-based restricted stock unit (PSU). PSU awards contain a performance condition and service criteria. |
(2) | Restricted stock unit (RSU). RSU awards do not contain a performance condition but vest only after the service criteria is met. (See Elements of our Compensation Program beginning on page 29 for more information on executive compensation.)
|
Total Compensation Program Objectives and Philosophy
Individual compensation levels are based on the duties and responsibilities assumed by each named executive officer,NEO, individual performance, tenure and the attainment of Company goals. The Compensation Committee considers compensation levels of comparable executives at peer companies to ensure basic compensation competitiveness but does not benchmark NEO compensation to particular executive compensation percentiles at peer group companies.
Our NEOs are accountable for the performance of the Company and the function they manage and are compensated based on that performance. NEOs are rewarded when defined performance objectives are achieved and value is created for our stockholders. The Compensation Committee has decided to base the majority of performance-based compensation, including equity awards, on the achievement of Company goals, with the exception of any newly-hired executive whose initial bonus and equity are typically based solely on service.service, particularly if they are appointed later in the fiscal year. The Compensation Committee’s philosophy is that a higher percentage of pay dependent on our performance adds stockholder value by aligning executive compensation with revenue and net income growth.
Long-term compensation for NEOs consists of equity awards such as restricted stock units (RSUs). In determining equity awards, the Compensation Committee endeavors to create a balance that reinforces the “pay-for-performance” philosophy while encouraging share ownership and retention. The Compensation Committee has currently opted to award only RSUs in the annual employee award, which includes our NEOs.
TheHistorically, the majority of RSU awards to our NEOs contain performance and service criteria (PSUs) set by the Compensation Committee that must be achieved in order to be earned. The awarding of PSUs is designed to align stockholder and management interests through incentives that encourage the highest level of corporate governance and focus on rewarding our executives for increased Company value and financial results over the long-term, without encouraging excessive or unnecessary risk-taking. The remainder of RSU awards to our NEOs are service-based and vest equally over a three-year period. The service-based awards encourage share ownership and retention of key employees. We also awarded a special grant of service-based RSUs to Mr. Briskin in Fiscal 2020 as part of a retention agreement discussed below. The form and composition of equity awards, as well as other elements of compensation, may be adjusted in the future as our compensation philosophy evolves. The RSU awards to our employees, excluding our NEOs, are service-based only.
Role of Our Compensation Committee
The Compensation Committee approves all cash and equity-based compensation to our executive officers, including the CEO. Prior to approving such compensation, the Compensation Committee oversees the performance evaluations of our CEO and other executive officers. The Compensation Committee reviews the compensation of the CEO in light of his performance evaluation and, following discussions with him where it deems appropriate, establishes his compensation. Our Compensation Committee also administers the Company’s 2015 Equity Incentive Plan (EIP) and approves all equity grants to executive officers.
HIBBETT® 2022 Proxy Statement - 42 -
The Compensation Committee recognizes the importance of maintaining sound principles for the development and administration of compensation and benefit programs and has taken steps to significantly enhance the Compensation Committee’s ability to effectively carry out its responsibilities as well as ensure that we maintain strong links between executive pay and Company performance. The Compensation Committee actively and consistently:
● | holds executive sessions without the presence of management; |
● | reviews and implements a compensation structure for our NEOs; |
•holds executive sessions without the presence of management;● | considers succession plans and strategies for our NEOs, as well as other key employees; and |
•reviews and implements a compensation structure for our NEOs;● | monitors stock ownership of our NEOs. |
•considers succession plans and strategies for our NEOs, as well as other key employees; and•monitors stock ownership of our NEOs.
The Compensation Committee’s Charter reflects these and other responsibilities, and the Compensation Committee and the Board periodically review and revise the Compensation Committee Charter. The NCG Committee recommends the Compensation Committee’s membership.
Role of Executive Officers in Compensation Decisions
For Fiscal 2019, Jane2022, Ms. Aggers, former Chair of our Compensation Committee, reviewed the performance of our CEO with the Compensation Committee, while Jeffry Rosenthal,Mr. Longo, our CEO and President, reviewed the performance of the other NEOs with the Compensation Committee. Recommendations for base pay, as well as for percent of base pay for bonus and equity awards, were made accordingly with respect to executive compensation for NEOs. The Compensation Committee generally approves the recommendations with minor adjustments. As prescribed in the Company’s Statement of Employee Equity Grant Practices, the Compensation Committee conducts these reviews within 90 calendar days of the Company’s fiscal year end. The only other role NEOs have in the determination of executive compensation is in the recommendation of the annual Company budget from which performance levels are based for incentive bonuses and performance-based equity awards. The annual Company budget is presented by management to the entire BoardAudit Committee for review and approval.
Role of Compensation Consultants
TheThroughout Fiscal 2022, the Compensation Committee last engaged Compensation Advisory Partners (“CAPs”), an independent compensation consultant in Fiscal 2016 to advisereview the Committee on matters relating to executivecompetitiveness of our compensation and assist in developing and implementingprogram for executives. The scope of the engagement included an analysis of our executive compensation program. Furthermore, the Compensation Committee, on occasion, utilizesprogram, including equity grant practices, against our peers and an on-line compensation subscription service that provides detailed executive compensation benchmarking analytics for comparison of our executive pay packages to thatanalysis of our peer group. The Compensation Committee utilizes CAPs’ services on a regular basis to monitor best practices and trends in executive compensation.
Our Company counsel also provides feedback from time to time, particularly on matters related to our equity plans, change of control agreements and severance agreements.
Advisory Vote on Executive Compensation
At our annual meeting in May 2021, we held a stockholder advisory vote on the compensation of our NEOs, commonly referred to as a “say-on-pay” vote. In our say-on-pay vote, approximately 96.4% of the stockholder votes were cast in favor of the say-on-pay resolution. As the Compensation Committee reviewed our compensation practices, it was mindful of the level of support our stockholders had previously expressed for our compensation programs, including our “pay-for-performance” philosophy. The Compensation Committee intends to continue to consider the outcome of future advisory say-on-pay votes, which we hold annually, when making executive compensation decisions.
Peer Groups, Annual Benchmarking and Survey Data
The Compensation Committee evaluates our executive compensation practices and financial performance by reference to a peer group. The peer group is a group of companies which would be considered peers for executive talent purposes and is similar to Hibbettus in terms of size, industry and/or scope of operations. Due to the limited number of companies directly similar in size, we include companies that are both somewhat smaller and somewhat larger
HIBBETT® 2022 Proxy Statement - 43 -
than us, particularly companies from which we could recruit executive talent. The Compensation Committee periodically reviews the companies comprising the peer group and revises the group as it deems appropriate to reflect applicable changes within the industry.
We lastFor Fiscal 2022, we reviewed our senior executive compensation relative to the peer group in Fiscal 2018 with supplemental data from published market surveys with the independent compensation consultant we engaged in Fiscal 2016.provided by CAPs. The Committee used the reporting and services provided to evaluate whether the executive compensation levels, including base salary and incentive payouts, were within industry norms and our business strategy. Data from the peer group was supplemented with broad-based compensation survey data to develop a comprehensive view of the competitive market. The Committee believes that use of this survey data is an important element of our compensation evaluation. Compensation survey data includes companies comparable to us in terms of size and scale from the broader retail industry that influence the competitive market for executive compensation levels.
The following is a list of the companies which were most often used by the Compensation Committee in Fiscal 20192022 when evaluating our executive compensation:
Ascena Retail Group, | | | | | | | | | | | | | | |
Company/Division | Ticker | | Company/Division | Ticker |
Barnes & Noble Education, Inc. | BNED | Citi Trends, | Genesco, Inc. | | Select Comfort CorpGCO |
Big 5 Sporting Goods Corp | BGFV | DSW, | Haverty Furniture Companies Inc. | HVT |
Boot Barn Holdings, Inc. | Shoe Carnival,BOOT | | Lumber Liquidators Holdings, Inc. | LL |
Buckle Inc. | BKE | Finish Line, | Marinemax Inc. | | Stage Stores, Inc.HZO |
Caleres,Cato Corp | CATO | | Shoe Carnival Inc. | SCVL |
Chicos FAS Inc. | CHS | | Sportsman’s Warehouse Holdings, Inc. | SPWH |
City Trends Inc. | CTRN | | The Children’s Place, Inc. | PLCE |
Express, Inc. | EXPR | | Tilly’s, Inc. | TLYS |
Five Below, Inc. | FIVE | | Zumiez, Inc. | ZUMZ |
Foot Locker, Inc. | FL | Urban Outfitters, Inc. |
Cato Corp. | | Genesco, Inc. | | Zumiez Inc. |
While the Compensation Committee does not directly benchmark NEO compensation to the comparable executive compensation at these peer companies, it does consider general competitiveness of the total compensation of our NEOs compared to similarly situated executive officers. The Compensation Committee therefore generally confirmshas adopted a philosophy of targeting overall compensation levels that total annual compensation for our NEOs, assuming performance-based compensation targets are met but not exceeded, is abovecompetitive with market median, while factors such as length of time in the median but belowposition, performance in the 75th percentile of total compensation for similarly situated executives at the peer group companies.role, overall corporate performance and retention concerns ultimately influence decisions and individual positioning relative to market.
Compensation Program Principles
Our Compensation Committee uses the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:
● | Pay for performance
. A substantial portion of the total compensation of our executive officers is composed of annual and long-term incentive payments that are earned upon achievement of financial results that contribute to total stockholder return.
|
● | Reward long-term growth and sustained profitability. The majority of equity awards•Pay-for-performance. A significant portion of the total compensation of our executive officers is composed of annual and long-term incentive payments that are earned upon achievement of financial results that contribute to total stockholder return.
•Reward long-term growth and sustained profitability. The majority of equity awards were historically based on a combination of short-term and long-term financial goals. Beginning in Fiscal 2022, the majority of equity awards are based solely on long-term financial goals. These awards require sustained financial performance to deliver significant value and encourage our executive officers to execute strategic initiatives and deliver continued growth over an extended period of time. |
HIBBETT SPORTS® 2019 2022 Proxy Statement - 44 -
28•Share ownership and retention. While the performance-based equity awards also contain a service condition, a portion of equity awards are intended solely to encourage retention and ownership in the Company.
•Modest benefits and limited perquisites. We provide standard employee benefits and very limited perquisites or other forms of compensation to our NEOs. Any perquisites received are generally available to other levels of management and employees. We believe our compensation program provides adequate financial opportunities to our executive officers to the extent that extra benefits and perquisites are not required to attract and retain such executives.
● | Share ownership and retention. While the performance-based equity awards also contain a service condition, a portion of equity awards are intended solely to encourage retention and ownership in the Company.
|
● | Modest benefits and limited perquisites. We provide standard employee benefits and very limited perquisites or other forms of compensation to our NEOs. Any perquisites received are generally available to other levels of management and employees. We believe our compensation program provides adequate financial opportunities to our executive officers to the extent that extra benefits and perquisites are not required to attract and retain such executives.
|
Elements of our Compensation Program for Fiscal 2022
| | | | | | | | | | | | | | |
Compensation Element | Objective | | Type and Form of Compensation |
Base Salary | To provide a minimum, fixed level of cash compensation for executive officers | | Not at risk; Annual cash compensation |
Stock Unit Awards(1) | To provide a minimum, fixed level of equity compensation for executive officers
| | Not at risk; AnnualLong-term service- based compensation
|
Short-Term Incentive (Cash Bonus) | To encourage and reward executive officers for achieving annual Company performance goals | | At risk; Annual performance compensation |
Long-Term Incentive (Equity Awards)(2) | To motivate and retain executive officers and align their interest with stockholders through: | |
| | Performance-based RSUs based on short-term financial goals and long-term service | At risk; Short-term performance compensation |
| | Performance-basedthrough performance-based RSUs based on long-term financial goals | | At risk; Long-term performance compensation |
Employee Benefits | To promote health, well-being and financial security of employees, including executive officers | | Not at risk; Annual indirect compensation |
(1) Prior to Fiscal 2022, stock unit awards to our executives were annual service-based compensation, with a graded vesting provision. Beginning in Fiscal 2022, all service-based awards, including those to our executive officers, have cliff vest provisions only.
(2) The Fiscal 2021 compensation package of our NEOs did not include long-term incentive equity awards as discussed throughout this Proxy Statement. Prior to Fiscal 2021, a portion of long-term incentive equity awards also included performance-based RSUs based on short-term financial goals and long-term service.
Annual Cash Compensation
Base Salary
Base salaries are the foundation of our executive compensation program. They provide a fixed, baseline level of cash compensation based on each executive officer’s position, experience, level of responsibility, individual job performance, contributions to the Company’s corporate performance, job tenure and future performance. Base salary levels also impact amounts paid under other elements of our executive compensation program, including short-term incentives and equity awards.
The base salaries for our NEOs in Fiscal 2019,2022, Fiscal 20182021 and Fiscal 20172020 were:
NEO | | Fiscal 2019 | Fiscal 2018 | Fiscal 2017 |
Mr. Rosenthal | | $575,000 | $515,000 | $515,000 |
Mr. Bowman | | $375,000 | $340,000 | $340,000 |
Ms. Pryor | | $400,000 | $400,000 | $400,000 |
Mr. Briskin | | $325,000 | $300,000 | $300,000 |
| | | | | | | | | | | | | | |
NEO | | Fiscal 2022 | Fiscal 2021 | Fiscal 2020 |
Mr. Longo(1) | | $700,000 | $500,000 | $369,479 |
Mr. Volke(2) | | $360,000 | $335,000 | N/A |
Mr. Briskin(3) | | $450,386 | $380,000 | $350,000 |
Mr. Quinn(4) | | $365,000 | $345,000 | N/A |
Mr. Blahnik(5) | | $355,000 | $340,000 | N/A |
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(1) Mr. Longo, as Chief Executive Officer of City Gear, a wholly owned subsidiary of the Company following the acquisition of City Gear in November 2018, had a base salary of $370,000, which was raised to $500,000 upon appointment as President and CEO of the Company on December 16, 2019. The amount in the table above represents the blended amount of his base salary in Fiscal 2020.
(2) Mr. Volke was appointed as our Senior Vice President of Accounting and Finance, effective April 13, 2020, and Chief Financial Officer, effective April 17, 2020. Mr. Volke was not an NEO in Fiscal 2020.
(3) Mr. Briskin, as Senior Vice President had a base salary of $425,000 in Fiscal 2022. In September 2021, he was promoted to Executive Vice President and his base salary was increased to $485,000. The amount in the table above represents the blended amount of his base salary in Fiscal 2022.
(4) Mr. Quinn was appointed as our Senior Vice President of Marketing and Digital, effective April 26, 2019. Mr. Quinn was not an NEO in Fiscal 2020.
(5) Mr. Blahnik was appointed as our Senior Vice President and Chief Information Officer effective April 26, 2019. Mr. Blahnik was not an NEO in Fiscal 2020.
In most instances,some cases, base salaries fall atbelow the 25th percentile of median base salaries for comparable executives at peer companies due to the Compensation Committee’s philosophy of emphasizing performance-based compensation. The salary levels for our NEOs for the fiscal year ended February 2, 2019, including the salary of Mr. Rosenthal as President and CEO,January 29, 2022, are based upon individual performance and responsibility, as well as the salary levels paid by other similarly situated sporting goods and specialty retail companies from our peer group. Based upon a review of such companies, the base salary levels approved by the Compensation Committee are generally conservative when compared to our peers, because their philosophy is that performance-based pay adds more value to the stockholder.
Substantial additional earnings opportunities are provided primarily through achievement of Company performance goals that also apply to equity-based awards. We havegenerally set a moderate base pay and combinedcombine it with a significant performance component that provides our executives with an incentive-based compensation program consistent with our emphasis on being financially conservative. For Fiscal 2019, an average of 50% of our NEO’s compensation was at risk.
Short-Term Incentive Compensation (Cash Bonus)
Our cash bonus program is subject to the 2016 Executive Officer Cash Bonus Plan (Bonus Plan)(the “Bonus Plan”) adopted by our stockholders. With the adoption of the Bonus Plan, the Compensation Committee has guidelines by which to structure incentives to executive officers through the use of qualified performance-based compensation. The Bonus Plan allows flexible compensation alternatives within our overall compensation philosophy.
The programBonus Plan is designed to provide short-term incentive compensation to our executives based upon pre-established performance goals for the Company. The Compensation Committee determines the amount of target bonus awards for each executive as a percent of their base salary. Bonus targets emphasize contribution to our success during the year and the performance of those aspects of our business for which each executive has responsibility. See the Summary Compensation Table and narrative discussion below for individual executive officer detail.
The following table illustrates the executives’NEO’s target bonus as a percent of individual base salaries for Fiscal 2019,2022, Fiscal 20182021 and Fiscal 20172020 of which the executives earned 65.0%200.0%, 0.0%200.0% and 72.5%190.0% of their target for each year, respectively:respectively, with the exception of Mr. Longo, whose Fiscal 2022 bonus was capped at 143% of target due to the current $1.0 million individual maximum bonus payout under the terms of the Bonus Plan. However, as noted in Proposal Number 6, we are asking for stockholder approval to increase the amount of an incentive bonus payable to an eligible executive officer under the Bonus Plan from $1.0 million during any fiscal year to an amount not to exceed two times (2x) the Target Incentive Bonus Percentage (as defined in Proposal Number 6) multiplied by an eligible executive’s Base Salary (as defined in Proposal Number 6) during any fiscal year. If the Cash Bonus Plan
HIBBETT® 2022 Proxy Statement - 46 -
Amendment (as defined in Proposal Number 6) is approved by our stockholders, we intend to award the remaining $400,000 of bonus to Mr. Longo under the Bonus Plan. If stockholders do not approve the Cash Bonus Plan Amendment (as defined below), Mr. Longo will not be awarded the bonus under the Bonus Plan that is in excess of the current maximum amount; however, the Compensation Committee retains discretion to consider other forms of awards, as necessary, to remain competitive for talent and reward exceptional performance. See Proposal Number 6 for additional information.
NEO | Position | Fiscal 2019 | Fiscal 2018 | Fiscal 2017 |
Jeffry O. Rosenthal | CEO and President | 100.0% | 100.0% | 100.0% |
Scott J. Bowman | Senior Vice President and CFO | 75.0% | 75.0% | 75.0% |
Cathy E. Pryor | Senior Vice President of Operations | 75.0% | 75.0% | 75.0% |
Jared S. Briskin | Senior Vice President and Chief Merchant | 75.0% | 75.0% | 75.0% |
| | | | | | | | | | | | | | |
NEO | Position | Fiscal 2022 | Fiscal 2021 | Fiscal 2020 |
Michael E. Longo(1) | CEO and President | 100.0% | 100.0% | 100.0% |
Robert J. Volke(2) | Senior Vice President and CFO | 70.0% | 75.0% | N/A |
Jared S. Briskin(3) | Executive Vice President, Merchandising | 85.0% | 75.0% | 75.0% |
William G. Quinn(2) | Senior Vice President, Marketing and Digital | 70.0% | 75.0% | N/A |
Ronald P. Blahnik(2) | Senior Vice President and CIO | 70.0% | 75.0% | N/A |
(1) Mr. Longo, upon appointment as CEO and President in December 2019, was given a target bonus of 100% of his base salary, pro-rated for his time as CEO and President in Fiscal 2020. As Chief Executive Officer of City Gear, his target bonus was 50.0% of his base salary, pro-rated for his time as Chief Executive Officer of City Gear in Fiscal 2020.
(2) Messrs. Volke, Briskin, Quinn and Blahnik were not NEOs in Fiscal 2020.
(3) Mr. Briskin, upon promotion as Executive Vice President in September 2021, was given a target bonus of 85% of his base salary, pro-rated for his time as Executive Vice President in Fiscal 2022. As Senior Vice President, his target bonus was 75.0% of his base salary, pro-rated for his time as Senior Vice President in Fiscal 2022.
Company performance goals were based on earnings before interest and taxes (EBIT)(“EBIT”) determined by the annual budget as approved by the Board of Directors for Fiscal 2019,2022, Fiscal 20182021 and Fiscal 2017.2020 and adjusted as described below. Each bonus was contingent solely upon Company performance. The annual cash bonus represents the Compensation Committee’s “pay for performance”“pay-for-performance” philosophy. If the EBIT target that is established is exceeded, then the NEO earns more, up to 150%200.0% of the target bonus; if we fall short of our EBIT target, then the NEO earns less or nothing at all. This tiered structure is applied to all our NEOs and also to the overall employee cash bonus portion that is contingent on the EBIT goal.
For Fiscal 2019,2022, Fiscal 20182021 and Fiscal 2017,2020, each executive’s (and employee’s) earned percentage of his or her Company performance bonus depended on the Company’s actual performance in relation to the Company’s EBIT goal as summarized in the following table:
Fiscal 2019 | | Fiscal 2018 and Fiscal 2017 | |
| % of Company Performance Goal Attained | Portion of Executive’s Company Performance Bonus Deemed Earned | | % of Company Performance Goal Attained | Portion of Executive’s Company Performance Bonus Deemed Earned | % of Company Performance Goal Attained | Portion of NEO’s Company Performance Bonus Deemed Earned |
Below 90.0 % | 0.0% | | Below 85.0 % | 0.0% | Below 90.0 % | 0.0% |
90.0% | 50.0% | | 85.0% | 62.5% | 90.0% | 50.0% |
95.0% | 75.0% | | 90.0% | 75.0% | 95.0% | 75.0% |
100.0% | 100.0% | | 95.0% | 87.5% | 100.0% | 100.0% |
105.0% | 125.0% | | 100.0% | 100.0% | 105.0% | 125.0% |
110.0% | 150.0% | | 105.0% | 112.5% | 110.0% | 150.0% |
115.0% | 175.0% | | 110.0% | 125.0% | 115.0% | 175.0% |
| | | 115.0% | 137.5% | |
120.0% or above | 200.0% | | 120.0% or above | 150.0% | 120.0% or above | 200.0% |
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30
The following table sets forth the EBIT goal for each year and the level achieved and paid out to our eligible NEOs (and employees in our bonus pool) based on that achievement for Fiscal 2019,2022, Fiscal 20182021 and Fiscal 2017:
| EBIT Goal | EBIT Achieved | % of Goal Achieved | % of Payout |
Fiscal 2019 | $46.8 million | $43.8 million | 93.6% | 65.0% |
Fiscal 2018 | $94.4 million | $53.7 million | 56.9% | Forfeited |
Fiscal 2017 | $108.0 million | $96.8 million | 89.0% | 72.5% |
2020:
| | | | | | | | | | | | | | |
Fiscal Year | EBIT Goal | EBIT Achieved | % of Goal Achieved | % of Payout |
Fiscal 2022 | $127.0 million | $228.2 million | 179.7% | 200.0% |
Fiscal 2021 | $60.6 million | $141.4 million | 233.3% | 200.0% |
Fiscal 2020 | $49.5 million | $58.8 million | 118.8% | 190.0% |
The Compensation Committee strives to set goals that motivate our executive officers to improve performance over previous years, without encouraging excessive risk taking, while taking into consideration long-term strategic initiatives that may impact year-over-year comparability. Calculation of the Company performance bonus earned by each NEO is based on the final audited consolidated financial statements and, if applicable, is usually paid out in March of the following yearyear.
.
The Compensation Committee reserves the right to make adjustments to incentive bonuses. No adjustments were made to incentive bonuses in Fiscal 2022, except with respect to Mr. Longo’s payout capped at 143% as a result of the current $1.0 million Bonus Plan limitation. For additional information, see Proposal Number 6.
In Fiscal 2018,2021, the Compensation Committee excluded costs of $43.1 million associated with the favorable effectacquisition and integration of City Gear and expenses attributable to the sale of our Team Division of $3.0 millionCOVID-19 pandemic when determining the level of achievement for the EBIT goal for Fiscal 2018. 2021. Even without consideration of excluded costs, the EBIT achieved for Fiscal 2021 was $98.4 million which would have yielded the same payout.
In Fiscal 2019,2020, the Compensation Committee excluded identified non-recurring costs of $6.2$22.7 million associated with the acquisition of City Gear, the CEO transition and our store realignment when determining the level of achievement for the EBIT goal for Fiscal 2019. 2020.
In bothall cases, the Compensation Committee determined that the adjustments were reasonable based primarily on the fact these transactions were not included in the projections at the time the Board was adopting the performance measurements and/or management’s ability or inability to control the financial impacts of the transactions. Any modifications are carefully considered by the Compensation Committee and applied to special circumstances, such as those above, that warrant the modification. There were no individual performance goals set for our NEOs for Fiscal 2019,2022, Fiscal 2018 or2021 and Fiscal 2017.2020.
Annual Long-Term Incentive Compensation (Equity Awards)
Equity Award Practices
The Compensation Committee determines the amount of target equity awards for each executive as a percent of their base salary. Through our EIP,2015 Plan, the Compensation Committee has a wide range of award-based incentive alternatives to offer our NEOs. Equity award types including stock options, stock appreciation rights, PSUs and RSUs, may be granted at the discretion of the Compensation Committee. Awards of equity-based compensation to our executive officers complement our cash incentives and encourage an ownership stake in our Company to align the interest of our NEOs and our stockholders.
With the exception of new hire grants to executive officers, the Compensation Committee primarily grants PSUs to our NEOs as part of their annual compensation package, up to the limits allowed in the EIP2015 Plan at the time of grant. InBeginning in Fiscal 2019, the Committee addedintroduced RSUs to the mix of equity awards granted to our NEOs. PSUs are believed to strengthen the longer-term pay-for-performance alignment of the Company’s compensation program and provide retention motivation through time-vesting of half of the awards after achievement of the stated
HIBBETT® 2022 Proxy Statement - 48 -
performance goal. RSUs with time-based vesting without performance conditions are believed to strengthen retention motivation and overall equitystock ownership in the Company.
The Compensation Committee’s equity award policy is designed to facilitate the establishment of appropriate processes, procedures and controls in connection with the administration of our equity-based incentive plans. The Compensation Committee’s policy sets the annual grant date for management and employee equity awards as no earlier than the third business day following the release of the Company’s annual earnings for the fiscal year just ended but no later than the first (1st) Monday of April each year. However, they do have the discretion to set the annual grant date outside these dates if circumstances warrant such as it did in Fiscal 2021 where the grant date was set as April 7, 2020. The Compensation Committee utilized this extra time to give thoughtful and judicious consideration for temporary changes to the executive compensation structure in light of any unanticipated impacts of the COVID-19 pandemic and its potential effects, both business and personal, on the leadership team while navigating unforeseen challenges.
Stock Awards
As part of the annual equity award, our practice is to determine the dollar amount of equity compensation that we want to provide to our executive officers as a percentage of base salary. Over
In Fiscal 2022, the last several years, 100%Committee awarded 60% of the dollar amount of the NEO’s equity award was in the form of PSUs. Historically,PSUs and 40% in the full equity award wasform of RSUs. These awards were awarded based on the closing market price of our common stock on the date preceding the date of grant or $76.04.
In Fiscal 2021, the Committee awarded only RSUs to all employees, including our NEOs, as a result of the uncertainty in the market related to the COVID-19 pandemic. In addition, the shares awarded to our NEOs and employees were not based on a formula that yielded an amount based on 80% of the 30-day trailing average (trailing average) price of our stock from the date of grant. The trailing average price of our stock used for Fiscal 2019, Fiscal 2018 and Fiscal 2017 was $23.52, $29.45 and $28.57, respectively.value as a percent to base salary.
In Fiscal 2019,2020, the Committee awarded 60% of the dollar amount of the NEO’s equity award in the form of PSUs and 40% in the form of RSUs. The PSUs were awarded based on the trailing average price of our stock from the date of grant while thegrant. The trailing average price of our stock used for Fiscal 2020 was $18.38. RSUs were awarded based on the closing market price of our common stock on the date of grant or $22.55 in Fiscal 2019. $18.04.
Awards granted to our NEOs reflect our desire to provide incentives to these individuals that encourage our growth and long-term success as a Company.
Employee RSUs are granted under the provisions of the EIP,2015 Plan, are based on a value determined individually by management, are based on the closing market price of our common stock on the date preceding the date of grant date and have a service period of fourthree years.
The following table reflects the target PSU awards granted to our NEOs in office at the time of the annual grant and the percentage of base salary that the PSU award was based on for Fiscal 2019,2022, Fiscal 20182021 and Fiscal 2017:2020:
| Fiscal 2019 | Fiscal 2018 | Fiscal 2017 |
NEO | Target # of PSUs | % of Base Salary | Target # of PSUs | % of Base Salary | Target # of PSUs | % of Base Salary |
Mr. Rosenthal | 18,300 | 60.0% | 21,900 | 100.0% | 18,000 | 100.0% |
Mr. Bowman | 9,000 | 45.0% | 10,800 | 75.0% | 8,900 | 75.0% |
Ms. Pryor | 9,600 | 45.0% | 12,700 | 75.0% | 10,500 | 75.0% |
Mr. Briskin | 7,800 | 45.0% | 9,500 | 75.0% | 7,900 | 75.0% |
| | | | | | | | | | | | | | | | | | | | |
| Fiscal 2022 | Fiscal 2021(1) | Fiscal 2020 |
NEO | Target # of PSUs | % of Base Salary | Target # of PSUs | % of Base Salary | Target # of PSUs | % of Base Salary |
| | | | | | |
| | | | | | |
Mr. Longo(2) | 7,890 | 85.7% | — | —% | N/A | N/A |
Mr. Volke | 2,368 | 50.0% | — | —% | N/A | N/A |
Mr. Briskin | 2,762 | 49.4% | — | —% | 10,100 | 45.0% |
Mr. Quinn | 2,368 | 49.3% | — | —% | N/A | N/A |
Mr. Blahnik | 2,368 | 50.7% | — | —% | N/A | N/A |
| | | | | | |
| | | | | | |
Note: Messrs. Volke, Quinn and Blahnik were not NEOs in Fiscal 2020.
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(1) PSUs were not awarded to our NEOs in Fiscal 2021.
(2) Mr. Longo was appointed President and CEO in December 2019 and did not qualify for equity awards as an NEO until Fiscal 2021.
For the Fiscal 2019, Fiscal 2018 and Fiscal 2017,2022 annual awards, half of the PSU award to our NEOs established by the Compensation Committee was a performance goal established on a one-yearthree-year achievement based on Return on Invested Capital (ROIC)(“ROIC”). The PSU award based on ROIC had a three-year vesting provision in all three fiscal years. The other half of the PSU award was a performance goal established on a three-year achievement based on cumulative EBIT for all three fiscal years which vestsFiscal 2022, Fiscal 2023 and Fiscal 2024. Both awards vest in three years.years, if achieved.
For the Fiscal 2020 annual awards, half of the PSU award to our Mr. Briskin established by the Compensation Committee was a performance goal established on a one-year achievement based on ROIC with a three-year vesting provision. The other half of the PSU award was a performance goal established on a three-year achievement based on cumulative EBIT for Fiscal 2020, Fiscal 2021 and Fiscal 2022.
In Fiscal 2019, each NEO was also2022, our NEOs were awarded an RSU award with cliff vesting after three years as part of the annual award. In Fiscal 2021 and Fiscal 2020, our NEOs were awarded an RSU award with graded vesting over three years.years as part of the annual award. In Fiscal 2022 and Fiscal 2020, this was in addition to the PSU award. The number of RSUs awarded and the percentage of base salary for the RSU award to each NEO was:
NEO | RSUs Awarded | % of
Base Salary |
Mr. Rosenthal | 10,200 | 40.0% |
Mr. Bowman | 4,989 | 30.0% |
Ms. Pryor | 5,322 | 30.0% |
Mr. Briskin | 4,324 | 30.0% |
| | | | | | | | | | | | | | | | | | | | |
| Fiscal 2022 | Fiscal 2021(1) | Fiscal 2020 |
NEO | RSUs Awarded | % of Base Salary | RSUs Awarded | % of Base Salary | RSUs Awarded | % of Base Salary |
Mr. Longo | 5,260 | 57.1% | 35,000 | 86.1% | 18,897 | N/A |
Mr. Volke | 1,578 | 33.3% | 24,000 | 90.1% | N/A | N/A |
Mr. Briskin | 1,841 | 32.9% | 24,000 | 77.7% | 5,488 | 30.0% |
Mr. Quinn | 1,578 | 32.9% | 12,500 | 44.6% | N/A | N/A |
Mr. Blahnik | 1,578 | 33.8% | 12,500 | 45.2% | N/A | N/A |
Note: Messrs. Volke, Quinn and Blahnik were not NEOs in Fiscal 2020.
(1) The Committee did not award RSUs based on a percentage of base salary for Fiscal 2021. In each instance, based on the fair market value of our stock on the date of grant, the RSUs awarded were less than what would have been awarded if based on the historical percentage of 100% of base salary for the CEO and 75% of base salary for all other NEOs. Mr. Volke was appointed as our CFO after the annual award date. If he had been awarded on the same date, the percentage of base salary would have been 88.1%.
Mr. Briskin was also awarded a special grant of RSUs in May 2019 of 4,857 shares as part of a retention agreement discussed below. Including the value of this special grant, the percent to base salary for Mr. Briskin in Fiscal 2020 was 58.6%. The special grant vested equally on the first and second anniversary of the date of grant of May 6, 2019.
In addition, Mr. Longo was awarded RSUs upon his appointment as CEO and President equal to 100% of his base salary. These awards will cliff vest on January 1, 2023 and can be forfeited if there is a break in service.
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The following tables set forth the ROIC and cumulative EBIT goals set for each year and the level achieved and earned by our applicable NEOs based on that achievement:
| Goal | Goal Set | Goal Achieved | % of Equity Earned |
Fiscal 2019 | ROIC | 13.7% | 12.7% | 65.0% |
Fiscal 2018 | ROIC | 15.6% | 11.6% | 50.0% |
Fiscal 2017 | ROIC | 16.8% | 15.8% | 80.0% |
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| | | | | | | | | | | | | | |
Fiscal Year | Year(s) | ROIC Goal Set | Goal Achieved | % of Equity Earned |
Fiscal 2022 | F2022 - F2024 | 10.1% | undetermined | undetermined |
| | | | |
Fiscal 2020 | F2020 | 13.8% | 15.2% | 150.0% |
| | | | | | | | | | | | | | |
Fiscal Year | Cumulative Years | Cumulative EBIT Goal | Cumulative EBIT GoalAchieved | Cumulative
EBIT Achieved
| % of Equity Earned |
Fiscal 20192022 | F2019 – F2021 | (1) | undetermined | undetermined |
Fiscal 2018 | F2018 – F2020F2022 - F2024 | $393.3404.0 million | undetermined | undetermined |
| | | | |
Fiscal 20172020 | F2017 – F2019F2020 - F2022 | $345.0259.8 million | $194.2428.5 million | Forfeited |
(1) | The structure for the three-year EBIT goal for Fiscal 2019 will be determined over time. The first year’s base was set at $46.8 million. Years two and three will be determined at 5% above the actual EBIT achieved in Fiscal 2019 and Fiscal 2020. Fiscal 2019 EBIT achieved was $37.5 million but was adjusted for identified non-recurring costs of $6.2 million for an adjusted EBIT of $43.7 million. At 5% above the Fiscal 2019 adjusted EBIT, the second year base added was $45.9 million for a cumulative total goal to-date of $92.7 million.200% |
As with the cash bonus potential, the Compensation Committee excluded the effect of identified non-recurring costs of $6.2 million when determining theThe level of achievement forof the three-year ROIC goal inand three-year cumulative EBIT goal for Fiscal 2019 and2022 has not been determined. The three-year ROIC goal for Fiscal 2022 will be measured over the three-year period, whereas the three-year EBIT goals in Fiscal 2019, Fiscal 2018 and Fiscal 2017. The ROIC award would have been forfeited with inclusion of the costs. Inclusion of the costs would not have impacted the percentage of equity earned as it relates to the Fiscal 2017 awardgoal will be based on EBIT. In addition, upon adoption of the cumulative EBIT total over three fiscal years.
The Fiscal 2018 executive compensation program, the Compensation Committee elected to exclude the Team Division financial results from any incentive calculations in anticipation of its sale during the fiscal year.2020 ROIC goal was a one-year goal. The inclusion of the Team Division financial results would not have impacted the percentage of equity earned in Fiscal 2018.
We calculate ROIC as: (EBIT + Rent) x (1-Tax Rate) / (Shareholder’s Equity + Debt + Leases)
● | EBIT is defined as earnings before interest and income tax expense but after all other expenses. |
● | Rent is defined as our consolidated rent expense on buildings. |
● | 1-Tax Rate where the Tax Rate is defined as the annual effective tax rate. |
● | Shareholder’s Equity was defined as the average of the fiscal year total beginning and total ending balance, excluding stock repurchases under our stock repurchase authorization program. |
● | Debt is defined as consolidated short-term, long-term or bank debt, but does not include capital leases. |
● | Leases are defined as a multiple of four (4) times the annual consolidated rent expense. |
Because the2020 EBIT goal is based onwas a three-year cumulative achievement, the achievement for Fiscal 2019 and Fiscal 2018 are yet to be determined.
Consistent with prior years, the Compensation Committee will award only RSUs in Fiscal 2020 to all participating employees, including the NEOs.goal. The NEO awards will be a mixfirst year base was set at $49.5 million. The second year base of RSUs and PSUs$61.8 million was determined based on a percentage5% above the Fiscal 2020 EBIT achieved of each executive’s$36.1 million adjusted for excluded costs of $22.7 million, or $58.8 million. The third year base salary while awards to other participating employees areof $148.5 million was determined based primarily on their position and salary level. The Compensation Committee approved a budget5% above the Fiscal 2021 EBIT achieved of $2.7$98.4 million and the Company awarded a valueadjusted for excluded costs of $2.6$43.1 million, or $141.4 million for employee RSU awards (excluding our NEOs) for Fiscal 2020. The total shares awarded for the annual award for Fiscal 2020 was 197,606 sharesa three-year cumulative EBIT goal of which our NEOs were awarded 18,625 service-based RSUs based on the stock price at the close of the date of grant of $18.04 and 34,300 RSUs in the form of PSUs based on a trailing average of $18.38. See Summary Compensation Table and related disclosures for more detail of equity awards to each NEO.$259.8 million.
Timing of Equity Awards
We grant equity awards to eligible employees generally on three occasions: annually, upon hire (for certain senior positions) and occasional special one-time grants to executive management upon approval by the Compensation Committee. The fair value of awards is based on the closing price of our common stock on the first business day immediately preceding the date of grant (or if not a business day, the immediately preceding business day) as defined in our equity plans.
In Fiscal 20192022, Fiscal 2021 and Fiscal 2017,2020, we granted all annual employee equity awards, including our executives, on the same day. Inday, with the exception of Mr. Volke whose Fiscal 2018, the annual2021 grant towas awarded on April 13, 2020 when he was appointed our executives was two days after the annual grant to our employees because the material terms of the executive awards were not finalized until March 15, 2017. The annual grant date to our employees was March 14, 2017 and to our executives was March 16, 2017.CFO. Under the Statement of Employee Equity Grant Practices (EGP)(“EGP”) adopted by the Compensation Committee, the grant date for annual awards to executives and employees is defined as no earlier than the third business day following the public release of our annual earnings, but no later than the first (1st) Monday of April.April although the Compensation Committee has discretion to award outside these dates and did so for the Fiscal 2021 awards as described above.
Any grants to newly hired executives are typically made on the first day of the fiscal quarter after hire. Special purpose grants are effective as of the Friday following the Compensation Committee’s formal approval. The Compensation Committee reserves the right to modify this practice if circumstances warrant as it did for the special grant in Fiscal 2018 grant date to our executives.2020. No award will be deemed made until all material terms, including the type of award, number of shares, grant date and the identification of each grantee, is determined with finality without the benefit of hindsight. The award date for all Fiscal 20202023 awards was set for March 21, 2019.30, 2022.
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Employment and Retention Agreements
Employment Agreement
Mr. Longo entered into an employment agreement in connection with his appointment as President and CEO of the Company, effective December 16, 2019 (the “Employment Agreement”), which provided, among other things, for an annual base salary of $500,000 (as such may be adjusted from time to time) and the opportunity to participate in the Company’s Bonus Plan and the 2015 Plan. The Employment Agreement also provided for the one-time payment of a relocation allowance of $100,000 and temporary housing for Mr. Longo for a period of 90 days. Mr. Longo’s employment is at will and his services may be terminated by Hibbett at any time subject to applicable notice requirements. In the event of termination of his employment other than by reason of death or disability, Mr. Longo is entitled to certain severance payments that vary according to whether the termination is with or without “cause” or “good reason,” as such terms are defined in the Employment Agreement.
For Fiscal 2020, Mr. Longo was eligible to receive an annual incentive bonus based on the same performance criteria and target bonus percentage in effect for the President and Chief Executive Officer as of December 16, 2019, subject to proration based on the length of Mr. Longo’s service in those capacities during the fiscal year. In addition, Mr. Longo was eligible for an annual performance bonus based on a percentage of his previous base salary as Chief Executive Officer of City Gear if certain City Gear performance goals were met.
Mr. Longo also received an equity award of restricted stock units having a value of $500,000 as of December 13, 2019 pursuant to the 2015 Plan. The award will vest in full on January 1, 2023, provided Mr. Longo is employed by the Company on the vesting date.
Retention Agreements
With the announced retirement of our former CEO and resignation of our former CFO in early Fiscal 2020, the Compensation Committee determined it would be in the best interests of the Company and its stockholders to enter into a Retention Agreement (the “Retention Agreements”) with certain employees of the Company, including Messrs. Briskin, Quinn and Blahnik. The effective date of the Retention Agreements was April 26, 2019, and the terms of the Retention Agreements ended on the second anniversary of the effective date, or April 26, 2021.
The Retention Agreements provided for a lump sum severance payment equal to one times the executive’s base salary, less deductions for applicable taxes, in the event that the executive was terminated by the Company during the two-year term of the agreement without “cause” or if the executive resigned for “good reason” (as those terms were defined in the Retention Agreements). However, the severance payment would not be paid if the executive was also entitled to receive benefits under any change of control severance agreement of the Company or if the separation from service was due to retirement or disability. In addition, the payment would be forfeited if the executive breaches certain confidentiality, nondisclosure or non-competition covenants contained in existing agreements between the Company and the executive.
The Retention Agreements also called for a special grant of RSUs. In the event the executive became entitled to a severance payment under their respective Retention Agreement, the outstanding RSUs awarded to the executive pursuant to such agreement would automatically vest upon termination of the executive’s employment. All other outstanding equity-based awards to the executive would continue to be governed by the applicable terms of such awards and would not be modified or amended by the Retention Agreement.
There are currently no other employment or retention agreements with any executive officer or employee of the Company.
Severance and Change in Control Payments
The Compensation Committee has adopted a Change in Control Severance Agreement (Severance Agreement)(the “Severance Agreement”) for our Named Executive Officers. IfNEOs, other than Mr. Longo, whose change in control and severance protections are contained in his
HIBBETT® 2022 Proxy Statement - 52 -
Employment Agreement as well as a covered executive’s employment is terminated bystandalone change in control severance agreement (the “Longo Severance Agreement”). For a discussion of these severance arrangements, please see the Company without causediscussion below under in the subsection entitled “Potential Payments upon Termination or by the executive for good reason within: (i) two years following a Change in Control; or (ii) within a six-month period prior to a Change in Control if the executive’s termination or resignation is also directly related to or occurs in connection with a Change in Control, the Company shall pay the executive a severance payment in the amount equal to one and one half (1.5) times the sum of the executive’s covered salary and covered bonus. The severance shall be paid within thirty (30) days of the executive’s termination date or the Change in Control date, whichever is later. In addition, to the extent the executive has been granted equity compensation under the Company’s equity compensation plans, the executive’s interest in such awards would become fully exercisable, vested and nonforfeitable as of the Change in Control date, to the extent not already exercisable or vested as of such date.
The covered salary for purposes of this Severance Agreement shall mean 1.5 times the highest annual rate of base salary paid to the executive by the Company prior to the termination or resignation of the executive’s employment. The covered bonus for purposes of this Severance Agreement shall mean the average of the actual cash bonuses paid to the executive for the five years prior to the year of the executive’s termination or resignation from the Company (or shorter period if the executive has been employed for a shorter period), but not to exceed the target bonus in the year of termination or resignation.
The following table shows the estimated payouts to our NEOs if a Change in Control event occurred on February 2, 2019:
| Named Executive Officer |
| Mr. Rosenthal | | Mr. Bowman | | Ms. Pryor | | Mr. Briskin |
Salary & Bonus (1) | | | | | | | |
Covered Salary | $862,500 | | $562,500 | | $600,000 | | $487,500 |
Covered Bonus | 458,509 | | 222,150 | | 255,376 | | 149,554 |
Cash Payout | 1,321,009 | | 784,650 | | 855,376 | | 637,054 |
| | | | | | | |
Equity Awards (2) | | | | | | | |
Restricted Stock Units | 597,729 | | 291,525 | | 329,332 | | 220,495 |
Stock Options | -- | | -- | | -- | | -- |
Total Value of Equity | 597,729 | | 291,525 | | 329,332 | | 220,495 |
Total | $1,918,738 | | $1,076,175 | | $1,184,708 | | $857,549 |
| | | | | | | |
Estimated Payout | $1,918,738 | | $1,076,175 | | $1,184,708 | | $857,549 |
(1)Covered salary is based on the highest annual rate of base pay paid to each NEO. Covered bonus is based on a five-year average of bonuses paid to each NEO.
(2)The value of equity awards was calculated on non-vested awards using the closing price of our stock on February 2, 2019 of $16.31. RSUs were valued at the closing stock price times the number of non-vested shares and do not include unearned PSUs. There were no unvested stock options outstanding on February 2, 2019. As of February 2, 2019, the number of non-vested RSUs considered in the calculation above was:
NEO | Non-Vested
RSUs
|
Mr. Rosenthal | 36,648 |
Mr. Bowman | 17,874 |
Ms. Pryor | 20,192 |
Mr. Briskin | 13,519 |
Perquisites and Other Benefits
The Compensation Committee’s philosophy is that NEOs should not be treated differently from the general employee population in the design of their benefits, other than one-time or special benefits provided under broader programs, such as relocation. The Company’s overall viewpoint is to offer a compensation package that emphasizes long-term contribution and stability rather than extra benefits, particularly benefits not available to our employees, in general. The NEOs receive the same medical, dental, vision, disability, employee discount, flexible spending options and 401(k) benefits as the broader employee population who qualify. The perquisites provided to eligible NEOs are also available to other employees, where applicable, and include:
Paid holidays and paid time off (PTO)(“PTO”). We currently allow eight8 paid holidays. Based on years of service, our full-time employees can earn up to 28twenty-eight days of PTO per year. All our NEOs areMr. Briskin is the only NEO currently eligible for the maximum PTO per year, with the exception of Mr. Bowman who is eligible for 20 days of PTO per year, based on their years of service.year.
Discount on the Company’s common stock through the Hibbett, Sports, Inc. Employee Stock Purchase Plan (ESPP)(the “ESPP”). All employees, including our NEOs, who have been employed with the Company over one year and work an average of 20twenty hours per week, qualify for participation in our ESPP. The ESPP permits employees to purchase our common stock each calendar quarter at a discount of 15.0% off the closing price of the lower of the first day of the calendar quarter or the last day of the calendar quarter. Currently, all our NEOs, with the exception of Mr. Bowman is the only NEO that participatesQuinn, participate in the ESPP.
Company-paid life insurance. The Company provides life insurance coverage equal to two times the annual base salary of all full-time employees up to $500,000 with further reductions once an employee reaches age 65 and 70.
Deferred Contribution Benefit Plans. The Hibbett, Sports, Inc. 401(k) Plan (the “401(k) Plan”) is our tax qualifiedtax-qualified retirement plan where our employees, including our NEOs, are able to make contributions from their cash compensation either pre-tax through various investment options or post-tax through a ROTH option. We make matching contributions for all participants equal to 100% of the first 3% of eligible compensation and 50% of the next 3% of eligible compensation for a total possible match of 4.5%75% of the first 6% of eligible compensation. All of our NEOs participate in the 401(k) Plan. The Internal Revenue Code limits the amount of compensation that can be deferred under the 401(k) Plan.
We maintain a non-qualified Supplemental 401(k) Plan (the “Supplemental Plan”) but no longer offer it to our executive officers or other highly compensated employees. Under the Supplemental Plan, our executive officers and other highly compensated employees had the opportunity to defer their compensation, including amounts in excess of the tax law limit, under our nonqualified Supplemental 401(k) Plan (Supplemental Plan). Contributions made under the Supplemental Plan are not matched by the Company.limit. Balances in the Supplemental Plan are unsecured and at risk, meaning the balances may be forfeited in the event of the Company’s financial distress such as bankruptcy. The group of employees eligible for this deferral option includesThough not offered currently, the Compensation Committee can reinstate the plan at its discretion and if it did so, all our NEOs. Currently, none of ourapplicable NEOs are making deferrals into the Supplemental Plan.
Executive Voluntary Deferral Plan. The Company maintains the Hibbett Sports, Inc. Executive Voluntary Deferral Plan (Deferral Plan) which gives key executives of the Company an opportunity to defer, on a pre-tax basis, up to 50% of their base salary and up to 100% of any bonus earned. All of our NEOs are eligible for participation under this plan. Currently, none of our NEOs participate in the Deferral Plan.
Flexible Spending Account Plan. The Company maintains a Flexible Spending Account Plan (FSA)(the “FSA”) that allows employees to set aside pre-tax amounts for certain out-of-pocket health care and dependent care expenses. All of our NEOs are eligible for participation under the FSA. Mr. Rosenthal and Mr. Briskin participated in the FSA in Fiscal 2017. Currently, none of our NEOs participate in the FSA.
Employee Discounts. The Company currently offers employee discounts to all team members, including our Directors and NEOs, for merchandise bought at our retail stores and on our website.
See the Summary Compensation Table and related disclosures for more details on specific perquisites applicable to each NEO.
EquityHIBBETT® 2022 Proxy Statement - 53 -
Stock Ownership
The Compensation Committee has adopted stock ownership requirements for our NEOs. Within three years of any executive officer’s hire date or promotion to a covered office, whichever is later, ownership in the following equity ownershipCompany’s stock must be maintained in the amounts indicated:adopted. In Fiscal 2022, the Compensation Committee increased the stock ownership required of our NEOs as follows:
| | | | | | | | | | | | | | |
| | Beginning Fiscal 2022 | | Before Fiscal 2022 |
Office Held |
| Stock Ownership Requirement | | Stock Ownership Requirement |
Chief Executive Officer, President | | Six (6) times base salary | | Three (3) times base salary |
Executive Vice President | | Three (3) times base salary | | N/A |
Senior Vice President | | Two (2) times base salary | | One (1) time base salary |
Company equitystock may be in the form of common stock or common stock equivalents such as options, restricted stock, restricted stock units, etc. Once the ownership requirement is initially achieved, should the executive’s ownership fall below the required level due solely to a price decline in the share price, as opposed to selling of company equity,Company stock, the executive is granted reasonable, additional time to regain the required equitystock ownership level. In verifying the above ownership requirements are achieved, common stock and common stock equivalents are valued based on the closing price of our common stock on the last business day of the fiscal year, and stock options are valued using the Black Scholes method as if the award had been granted on the last day of the fiscal year but using the initial grant date strike price.year. Performance-based units are not considered until earned. As of our fiscal year ended February 2, 2019,January 29, 2022, all our NEOs had met their stock ownership requirements.
Prohibition on Hedging and Pledging
We have a policy prohibiting our executivesDirectors, executive officers and Directorscertain employees from engaging in hedging, holding securities in a margin account, and otherwise pledging transactions with respect to Companythe Company’s securities.
Trading in Hibbett, Sports Inc. Stock Derivatives
It is our policy that our employees, including our NEOs, and Directors may not purchase or sell options on our stock, nor engage in short sales with respect to our common stock. Also trading by executivesour employees, including our NEOs and Directors, in puts, calls, straddles, equity swaps or other derivative securities that are directly linked to our stock is strictly prohibited.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code imposes a limitation on the deductibility of non‑performance‑based compensation in excess of $1 million paid to “covered employees” in any fiscal year. Our “covered employees” include our Chief Executive Officer, our Chief Financial Officer, and the three other most highly compensated named executive officers. For Fiscal 2018 and prior fiscal years, an exception to Section 162(m) allowed certain compensation that qualified as “performance‑based” to be deducted notwithstanding the $1 million limitation. As noted above, the Compensation Committee has adopted a policy of pay‑for‑performance, and the Compensation Committee took appropriate steps in the past to cause a majority of the performance‑based compensation of covered executive officers to qualify for deductibility under Section 162(m) to the extent consistent with our best interests and the interests of our stockholders.
The Tax Cuts and Jobs Act (2017 Tax Reform Act), enacted in December 2017, eliminated the performance‑based compensation exception under Section 162(m) for Fiscal 2019 and subsequent fiscal years, other than with respect to certain “grandfathered” compensation that is paid pursuant to a written binding contract which was in effect on November 2, 2017 and which was not materially modified after that date. Thus, performance‑based awards outstanding on November 2, 2017 pursuant to a binding written agreement may be exempt from the deduction limit if applicable requirements are met. In addition, the 2017 Tax Reform Act expanded the group of “covered employees” under Section 162(m) to include our Chief Financial Officer (under prior law, the Chief Financial Officer was not a “covered employee”) and mandated that once an individual is treated as a covered employee for a given year, that individual will be treated as a covered employee for all subsequent years. As a result of these changes in the tax laws, any compensation paid to our covered executive officers in excess of $1 million beginning with Fiscal 2019 generally will not be deductible unless the qualified compensation arrangements were in place as of November 2, 2017.
In Fiscal 2019, the Committee considered the anticipated tax treatment to the Company and the covered executive officers in its review and establishment of compensation programs and payments. While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the compensation is not deductible for tax purposes. Further, the Compensation Committee may determine to make changes or amendments to the Company’s existing compensation programs, consistent with the Compensation Committee’s overall compensation program philosophy, in order to revise aspects of our executive compensation programs that were initially designed to comply with Section 162(m) but that may no longer serve as an appropriate incentive measure for our executive officers.
Finally, interpretations of and changes in applicable tax laws and regulations, as well as other factors beyond the control of the Compensation Committee, may affect deductibility of compensation, and there can be no assurance that compensation payable to our executive officers who are covered by Section 162(m) will be deductible in the future. The Compensation Committee will continue to monitor and assess the impact of the amendments to Section 162(m) included in the 2017 Tax Reform Act, and related tax regulations and interpretations, to determine what adjustments to our executive compensation practices, if any, it considers appropriate.
Financial Restatement and Recoupment
The Board has adopted a Recoupment Policy within its Corporate Governance Guidelines which allows the Board, at its discretion, to seek reimbursement of performance-based compensation, including performance-based equity compensation, from any senior executive, including our NEOs, who has engaged in fraud, willful misconduct, recklessness or gross negligence that has caused or otherwise significantly contributed to the need for a material restatement of the Company’s financial statements. The policy is effective for all performance-based compensation earned after Fiscal 2010. Bonuses and PSUs are based on achieved financial targets and are determined based on our audited consolidated financial statements.
The Compensation Committee has the discretion to reduce the amount of performance-based compensation payable to our executives and has done so most recently in Fiscal 2016. A copy of our Corporate Governance Guidelines is available at hibbett.com under “Investor Relations.”
HIBBETT SPORTS® 2019 2022 Proxy Statement - 54 -
Annual Compensation of Named Executive Officers
The following table reports amounts paid during the fiscal years ended February 2, 2019, February 3, 2018Fiscal 2022, Fiscal 2021 and January 28, 2017Fiscal 2020 to our NEOs, including equity awards that were granted during the year and other benefits that accrued during the fiscal year.
Summary Compensation Table
For the Fiscal Years Ended February 2, 2019, February 3, 20182022, Fiscal 2021 and January 28, 2017Fiscal 2020
(In dollars)
Name and Principal Position | Year (1) | Salary | Stock Awards (2) | Non- Equity Incentive Plan Compen- sation (3) | All Other Compen- sation (4) | TOTAL |
Jeffry O. Rosenthal | 2019 | $575,000 | $642,675 | $373,750 | $12,150 | $1,603,575 |
Chief Executive Officer | 2018 | $515,000 | $641,670 | $-- | $11,925 | $1,168,595 |
and President | 2017 | $515,000 | $631,260 | $373,375 | $11,925 | $1,531,560 |
| | | | | | |
Scott J. Bowman | 2019 | $375,000 | $315,452 | $182,813 | $12,150 | $885,415 |
Chief Financial Officer and | 2018 | $340,000 | $316,440 | $-- | $11,925 | $668,365 |
Senior Vice President | 2017 | $340,000 | $312,123 | $184,875 | $11,925 | $848,923 |
| | | | | | |
Cathy E. Pryor | 2019 | $400,000 | $336,491 | $195,000 | $12,150 | $943,641 |
Senior Vice President | 2018 | $400,000 | $372,110 | $-- | $11,925 | $784,035 |
of Operations | 2017 | $400,000 | $368,235 | $217,500 | $11,925 | $997,660 |
| | | | | | |
Jared S. Briskin | 2019 | $325,000 | $273,396 | $158,438 | $12,150 | $768,984 |
Senior Vice President and | 2018 | $300,000 | $278,350 | $-- | $11,925 | $590,275 |
Chief Merchant | 2017 | $300,000 | $277,053 | $163,125 | $11,925 | $752,103 |
Note: The Summary Compensation Table requires a column for Bonus, Option Awards (which requires the fair market value of options awarded) and Change in Pension Value and Nonqualified Deferred Compensation Dollars (which requires the reporting of “above-market” or “preferential” earnings from nonqualified deferred compensation plans) of which there were none. Therefore, for presentation purposes, these columns were omitted. | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Fiscal Year(1) | Salary | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | TOTAL |
Michael E. Longo | 2022 | $700,000 | $999,926 | $1,000,000 | $13,050 | $2,712,976 |
Chief Executive Officer | 2021 | $500,000 | $430,500 | $1,000,000 | $12,825 | $1,943,325 |
and President | 2020 | $369,479 | $500,015 | $286,772 | $118,400 | $1,274,666 |
Robert J. Volke | 2022 | $360,000 | $300,054 | $504,000 | $13,050 | $1,177,104 |
Chief Financial Officer and | 2021 | $335,000 | $301,920 | $502,500 | $75,113 | $1,214,533 |
Senior Vice President | | | | | | |
Jared S. Briskin(5) | 2022 | $485,000 | $350,012 | $716,615 | $13,050 | $1,564,677 |
Executive Vice President, | 2021 | $380,000 | $295,200 | $570,000 | $12,825 | $1,258,025 |
Merchandising | 2020 | $350,000 | $381,213 | $498,750 | $12,600 | $1,242,563 |
William G. Quinn | 2022 | $365,000 | $300,054 | $511,000 | $13,050 | $1,189,104 |
Senior Vice President, | 2021 | $345,000 | $153,750 | $517,500 | $12,825 | $1,029,075 |
Marketing and Digital | | | | | | |
Ronald P. Blahnik | 2022 | $355,000 | $300,054 | $497,000 | $13,050 | $1,165,104 |
Senior Vice President and | 2021 | $340,000 | $153,750 | $510,000 | $12,825 | $1,016,575 |
Chief Information Officer | | | | | | |
(1) Hibbett Sports Inc.’sThe Company’s fiscal year ends on the Saturday nearest to January 31 of each year.
(2) The values set forth in this column reflect PSUsservice-based and/or performance-based RSUs granted to all our NEOs. In addition, in Fiscal 2020, Mr. Briskin received a special award of service-based RSUs as part of his Retention Agreement. Mr. Quinn and Mr. Blahnik also received a special award of service-based RSUs as part of their respective Retention Agreements but were not NEOs in Fiscal 2020. The valuation method, in accordance with ASC Topic 718, is based on the closing price of our common stock on the date ofimmediately preceding grant, without considering an estimate for forfeitures. The values in the table represent the target number of awards established for each NEO.
PSUs awarded by our Compensation Committee in Fiscal 2022 and Fiscal 2020 to our NEOs are granted based on a percent of their base salary. The NEOs could earnbe earned at less or more than the target amountaward depending on the level of performance achieved. The awards could also be forfeited upon failure to achieve the minimum performance target. The following table sets forth the aggregate grant date fair value for the PSUs awarded to our NEOs, assuming the highest level of performance conditions were achieved:
| | Fiscal Year | |
Name | | 2019 | | | 2018 | | | 2017 | |
Mr. Rosenthal | | $ | 825,330 | | | $ | 1,283,340 | | | $ | 1,262,520 | |
Mr. Bowman | | $ | 405,900 | | | $ | 632,880 | | | $ | 624,246 | |
Ms. Pryor | | $ | 432,960 | | | $ | 744,220 | | | $ | 736,470 | |
Mr. Briskin | | $ | 351,780 | | | $ | 556,700 | | | $ | 554,106 | |
HIBBETT SPORTS® 2019 2022 Proxy Statement - 55 -
| | | | | | | | | |
NEO | Fiscal 2022 | | Fiscal 2020 |
Mr. Longo | $1,999,852 | | N/A |
Mr. Volke | $600,108 | | N/A |
Mr. Briskin | $700,024 | | $364,408 |
Mr. Quinn | $600,108 | | N/A |
Mr. Blahnik | $600,108 | | N/A |
38
The following table representsCompensation Committee did not award performance-based awards in Fiscal 2021 in response to the aggregateuncertainty surrounding the COVID-19 pandemic. Messrs. Longo, Volke, Quinn, Blahnik were not awarded PSUs in Fiscal 2020 because they were not executive officers at the time the awards were made.
The level of achievement for Fiscal 2022 performance-based awards earned cannot be determined until the three-year measurement period is complete. The Compensation Committee did not award performance-based awards in Fiscal 2021 in response to the uncertainty surrounding the COVID-19 pandemic as described earlier. Mr. Briskin was the only executive eligible to receive performance-based awards in Fiscal 2020. The grant date fair value of the actual restricted stock awards earned based on actual achievement of performance conditions.from the Fiscal 2020 performance-based awards was $318,857.
| | Fiscal Year | |
Name | | 2019 | | | 2018 | | | 2017 | |
Mr. Rosenthal | | $ | 134,127 | | | $ | 160,418 | | | $ | 252,504 | |
Mr. Bowman | | $ | 65,959 | | | $ | 79,110 | | | $ | 124,849 | |
Ms. Pryor | | $ | 70,356 | | | $ | 93,028 | | | $ | 147,294 | |
Mr. Briskin | | $ | 57,164 | | | $ | 69,588 | | | $ | 110,821 | |
Some of the awards considered in the table are still subject to a service requirement. The amounts shown for Fiscal 2019 and Fiscal 2018 include outstanding and unearned awards that are contingent on future performance achievement.
(3) Non-Equity Incentive Plan Compensation is defined as compensation earned (whether paid during the period or not) based on the achievement of performance criteria that is substantially uncertain at the time it is established and communicated to the executive.
Our executive cash bonuses are comprised of a Company performance component, which is a percent of base salary and based on performance criteria the Compensation Committee feels is substantially uncertain at the time it is established and communicated to the executive. The criterion established by the Compensation Committee which typically requires an improvement on ratios and earnings from the prior year, with consideration in the past few years for significant strategic investments around our omni-channel initiatives, and the acquisition of City Gear. Performance measuresGear and impacts of the COVID-19 pandemic. None of our performance criterion are not based on the price of our common stock. The targeted bonus potential for Fiscal 2019,2022, Fiscal 20182021 and Fiscal 20172020 was communicated to each executive officer following the March 2018,2021, March 20172020 and March 20162019 meetings of the Compensation Committee, respectively.
In Fiscal 2022, Mr. Longo’s earned bonus was capped under the provisions of our Bonus Plan at $1.0 million. The bonus achieved for all our NEO’s was 200% of target with the exception of Mr. Longo, who effectively earned 143% of target (or $1.0 million). Mr. Briskin’s earned bonus was pro-rated based on his targets as Executive Vice President and Senior Vice President.
Mr. Longo’s targeted bonus in Fiscal 2020 consisted of a pro-rata portion of his target bonus as Chief Executive Officer of City Gear and as President and CEO of Hibbett. Both were based on a percent of his base salary with the target bonus at City Gear and Hibbett based on 50% and 100% of his base salary for each position held, respectively. Mr. Briskin’s targeted bonus in Fiscal 2022 consisted of a pro-rata portion of his target bonus as Vice President and Executive Vice President.
(4) Other compensation is historically made up of the incremental cost to us of benefits and other perquisites. For Fiscal 2019,2022, Fiscal 20182021 and Fiscal 2017,2020, other compensation consisted solely ofincluded the match under the Company’s 401(k) Plan.
Plan for each NEO participating in the 401(k) Plan of $13,050, $12,825 and $12,600, respectively. In Fiscal 2021, Mr. Volke’s consisted of relocation incentives. In Fiscal 2020, Mr. Longo’s included $100,000 relocation incentives and $5,800 for personal use of a Company automobile.
Jeffry O. Rosenthal
(5) Mr. Briskin was promoted to Executive Vice President in September 2021. Prior to his promotion, his annual base salary was $425,000.
Jeffry O. Rosenthal,
HIBBETT® 2022 Proxy Statement - 56 -
Michael E. Longo
Michael E. Longo, age 61, has been60, joined the Company as our Chief Executive Officer and President since March 2010.in December 2019. Formerly, he served as PresidentChief Executive Officer for City Gear, LLC from October 2006 to November 2018, where he oversaw the successful acquisition of the company in 2018 by Hibbett. Prior to City Gear, he worked in positions of increasing responsibility and Chief Operating Officer from February 2009 through March 2010 andleadership with AutoZone, Inc. starting as a Vice President of Merchandising from August 1998 through February 2009. PriorSupply Chain in 1996 to joining us, Mr. Rosenthal wasExecutive Vice President of Supply Chain, IT, Development, Mexico in 2005. Mr. Longo holds a Bachelor of Science degree in Engineering from the United States Military Academy and Divisional Merchandise Manager for Apparel with Champs Sports, a division of Foot Locker, Inc.an MBA from 1981 to 1998.Harvard University.
The following table represents the compensation package awarded to Mr. RosenthalLongo in each of the years presented, regardless of whether ultimately achieved or obtained:
| | Fiscal 2019 | | Fiscal 2018 | | Fiscal 2017 |
Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | % to Base Salary | | Dollars or Number of | % to Base Salary |
Base Salary | | $575,000 | | | $515,000 | | | $515,000 | |
Non-Equity Incentive Plan Compensation | | | | | | | | | |
Company Bonus Target (1) | | 575,000 | 100.0% | | 515,000 | 100.0% | | 515,000 | 100.0% |
TOTAL Cash Compensation Potential | | $1,150,000 | 200.0% | | $1,030,000 | 200.0% | | $1,030,000 | 200.0% |
| | | | | | | | | | |
Restricted Stock Units (2) | | 28,500 | | | 21,900 | | | 18,000 | |
(1) Upon appointment as Chief Executive Officer and President in December 2019, Mr. Longo’s base salary was set at $500,000. As Chief Executive Officer of City Gear, his base salary was $370,000.
(1)
(2) See “Bonus and Non-Equity Incentive Plan Compensation” for a complete discussion of the Company’s bonus compensation program. The Company bonuses for Mr. RosenthalLongo were based on the Company’s EBIT achievements in Fiscal 2019,2022, Fiscal 20182021 and Fiscal 2017, respectively.2020. The actual Company bonus earned by Mr. RosenthalLongo in each of these years based on the Company’s achievement of its EBIT goal was:
| Bonus Earned | % to Base Salary |
Fiscal 2019 | $373,750 | 65.0% |
Fiscal 2018 | $-- | 0.0% |
Fiscal 2017 | $373,375 | 72.5% |
| | | | | | | | |
Year | Bonus Earned | % to Base Salary |
Fiscal 2022 | $1,000,000 | 142.9% |
Fiscal 2021 | $1,000,000 | 200.0% |
Fiscal 2020 | $286,772 | 57.4% |
(2)
The bonus earned by Mr. Longo in Fiscal 2022 was capped under the provisions of the Bonus Plan. His bonus earned would have been $1.4 million, or 200% of base salary, if not limited by the Bonus Plan. However, as noted in Proposal Number 6, we are asking for stockholder approval to increase the amount of an incentive bonus payable to an eligible executive officer under the Bonus Plan from $1.0 million during any fiscal year to an amount not to exceed two times (2x) the Target Incentive Bonus Percentage (as defined in Proposal Number 6) multiplied by an eligible executive’s Base Salary (as defined in Proposal Number 6) during any fiscal year. If the Cash Bonus Plan Amendment is approved by our stockholders, we intend to award the remaining $400,000 of bonus to Mr. Longo under the Bonus Plan.
If stockholders do not approve the Cash Bonus Plan Amendment, Mr. Longo will not be awarded the bonus under the Bonus Plan that is in excess of the current maximum amount; however, the Compensation Committee retains discretion to consider other forms of awards, as necessary, to remain competitive for talent and reward exceptional
HIBBETT® 2022 Proxy Statement - 57 -
performance. See Proposal Number 6 for additional information. The bonus earned by Mr. Longo in Fiscal 2020, consisted of the applicable bonus target set as Chief Executive Officer of City Gear and CEO and President of the Company, pro-rated for his time served in each position.
(3) See “Equity Awards” for a complete discussion on equity awards to our NEOs. In Fiscal 2019,2022, 60% of equity awards to our NEOs were performance-based awards whileand the remaining 40% were service-basedservice based awards that vest on the third anniversary from the date of grant. In Fiscal 2021 and Fiscal 2020, Mr. Longo was only awarded service-based RSUs. In Fiscal 2021, the equity awards were service-based RSUs in response to the COVID-19 pandemic which vest equally over three years. In Fiscal 2018 and Fiscal 2017, all our equity awards to our NEOs were performance-based awards.
PSUs are earned by achieving the performance goals determined by the Compensation Committee and for all years presented, half of the PSU was based on a short-term performance goal while the other half was based on a long-term performance goal. The short-term performance goal was established on a one-year achievement based on ROIC with a three-year vesting provision. The long-term performance goal was established on a three-year achievement based on cumulative EBIT which vests in three years. The award associated with each performance goal could be forfeited if a minimum goal was not attained or could be earned up to 200% if a maximum goal was attained.
The table below illustrates the total PSUs awarded to Mr. Rosenthal and the number of PSUs he has earned to-date based on achievement of the stated goals:
| Total PSUs Awarded | PSUs Earned Based on ROIC Goal | ROIC Achievement Rate | PSUs Earned Based on EBIT Goal | EBIT Achievement Rate | PSUs Still Subject to EBIT Goal |
Fiscal 2019 | 18,300 | 5,948 | 65% | N/A | N/A | 9,150 |
Fiscal 2018 | 21,900 | 5,475 | 50% | N/A | N/A | 10,950 |
Fiscal 2017 | 18,000 | 7,200 | 80% | Forfeit | 0% | None |
The 9,150 and 10,950 outstanding PSUs are contingent on the achievement of a three-year cumulative EBIT goal for Fiscal 2019 and Fiscal 2018, respectively. PSUs have cliff vesting provisions of three years from date of grant and upon achievement of performance criteria.
Other Compensation. Other compensation earned by Mr. Rosenthal is made upLongo in Fiscal 2022 and Fiscal 2021 consists of the match under the Company’s 401(k) Plan. See PerquisitesIn Fiscal 2020, it also consisted of a $100,000 moving incentive and Other Benefits.$5,800 for personal use of a Company vehicle.
Robert J. Volke
Scott
Robert J. Bowman
Scott J. Bowman,Volke, age 52, was hired58, joined the Company as ourthe Senior Vice President of Accounting and Finance in April 2020 and was named our Chief Financial Officer and Principal Accounting Officer effective July 2012. Prior to joining us, Mr. Bowman was the Divisionshortly thereafter. Formerly, he served as Interim Chief Financial Officer – Northern Division (Division CFO) of The Home Depot,Fleet Farm LLC (“Fleet Farm”), a large home improvement retailerposition he held since June 2006. Mr. Bowman also served The Home DepotMarch 2020, and as their Senior Director, Finance – ITits Vice President, Accounting and Corporate Controller from October 2003 through June 2006 priorAugust 2018 to his duties as Division CFO.February 2020. Prior to his tenureservice at The Home Depot, he workedFleet Farm, Mr. Volke held various positions of increasing responsibility with Tractor Supply Company (Nasdaq: TSCO), including as its Vice President and Controller from March 2017 to August 2018, Vice President – Accounting and Reporting from February 2014 to February 2017, Director of General Accounting and Financial Reporting from February 2009 to January 2014, and Manager of General Accounting and Financial Reporting from May 2007 to February 2009. Mr. Volke earned his Bachelor Science in various controller and accounting management positions with Rubbermaid Home Products, a Division of Newell Rubbermaid, Anchor Hocking Glass Company and The Sherwin-Williams Company.
The following table represents the compensation package awarded to Mr. BowmanVolke in each of the years presented,Fiscal 2022 and Fiscal 2021, regardless of whether ultimately achieved or obtained:
| | | | Fiscal 2019 | | Fiscal 2018 | | Fiscal 2017 | | Fiscal 2022 | | Fiscal 2021 | |
Salary Component | Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | | | Dollars or Number of | | Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | % to Base Salary | |
Base Salary | Base Salary | | $375,000 | | | $340,000 | | | $340,000 | | Base Salary | | $360,000 | | | $335,000 | | |
Non-Equity Incentive Plan Compensation | Non-Equity Incentive Plan Compensation | | | | | | | | | | Non-Equity Incentive Plan Compensation | | |
Company Bonus Target (1) | Company Bonus Target (1) | | 281,250 | 75.0% | | 255,000 | 75.0% | | 255,000 | 75.0% | Company Bonus Target(1) | | 252,000 | 70.0% | | 251,250 | 75.0% | |
TOTAL Cash Compensation Potential | TOTAL Cash Compensation Potential | | $656,250 | 175.0% | | $595,000 | 175.0% | | $595,000 | 175.0% | TOTAL Cash Compensation Potential | | $612,000 | 170.0% | | $586,250 | 175.0% | |
| | | | | | | | | | | | | | | | |
Restricted Stock Units (2) | Restricted Stock Units (2) | | 13,989 | | | 10,800 | | | 8,900 | | Restricted Stock Units(2) | | 3,946 | | | 24,000 | | | |
(1) See “Bonus and Non-Equity Incentive Plan Compensation” for a complete discussion of the Company’s bonus compensation program. The Company bonuses for Mr. BowmanVolke were based on the Company’s EBIT achievements in Fiscal 2019, Fiscal 20182022 and Fiscal 2017, respectively.2021. The actual Company bonus earned by Mr. RosenthalVolke in each of these years based on the Company’s achievement of its EBIT goal was:
| Bonus Earned | % to Base Salary |
Fiscal 2019 | $182,813 | 65.0% |
Fiscal 2018 | $-- | 0.0% |
Fiscal 2017 | $184,875 | 54.4% |
| | | | | | | | |
Year | Bonus Earned | % to Base Salary |
Fiscal 2022 | $504,000 | 140.0% |
Fiscal 2021 | $502,500 | 150.0% |
| | |
HIBBETT® 2022 Proxy Statement - 58 -
(2) See “Equity Awards” for a complete discussion on equity awards to our NEOs. In Fiscal 2019,2022, 60% of equity awards to our NEOs were performance-based awards whileand the remaining 40% were service-basedservice based awards that vest on the third anniversary from the date of grant. In Fiscal 2021, all equity awards were service-based RSUs in response to the COVID-19 pandemic which vest equally over three years. In Fiscal 2018 and Fiscal 2017, all our equity awards to our NEOs were performance-based awards.
PSUs are earned by achieving the performance goals determined by the Compensation Committee and for all years presented, half of the PSU was based on a short-term performance goal while the other half was based on a long-term performance goal. The short-term performance goal was established on a one-year achievement based on ROIC with a three-year vesting provision. The long-term performance goal was established on a three-year achievement based on cumulative EBIT which vests in three years. The award associated with each performance goal could be forfeited if a minimum goal was not attained or could be earned up to 200% if a maximum goal was attained.
The table below illustrates the total PSUs awarded to Mr. Bowman and the number of PSUs he has earned to-date based on achievement of the stated goals:
| Total PSUs Awarded | PSUs Earned Based on ROIC Goal | ROIC Achievement Rate | PSUs Earned Based on EBIT Goal | EBIT Achievement Rate | PSUs Still Subject to EBIT Goal |
Fiscal 2019 | 9,000 | 2,925 | 65% | N/A | N/A | 4,500 |
Fiscal 2018 | 10,800 | 2,700 | 50% | N/A | N/A | 5,400 |
Fiscal 2017 | 8,900 | 3,560 | 80% | Forfeit | 0% | None |
The 4,500 and 5,400 outstanding PSUs are contingent on the achievement of a three-year cumulative EBIT goal for Fiscal 2019 and Fiscal 2018, respectively. PSUs have cliff vesting provisions of three years from date of grant and upon achievement of performance criteria.
Other Compensation. Other compensation earned by Mr. Bowman is made upVolke consists of the match under the Company’s 401(k) Plan.plan in Fiscal 2022 and moving incentives in Fiscal 2021. See Perquisites and Other Benefits.
Cathy E. Pryor
Cathy E. Pryor, age 56, has been our Senior Vice President of Operations since 2012. Formerly, she served as Vice President of Operations from 1995 to 2012. She joined our Company in 1988 serving in areas of increasing responsibility including district manager and Director of Store Operations.
The following table represents the compensation package awarded to Ms. Pryor in each of the years presented, regardless of whether ultimately achieved or obtained:
| | Fiscal 2019 | | Fiscal 2018 | | Fiscal 2017 |
Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | | | Dollars or Number of | |
Base Salary | | $400,000 | | | $400,000 | | | $400,000 | |
Non-Equity Incentive Plan Compensation | | | | | | | | | |
Company Bonus Target (1) | | 300,000 | 75.0% | | 300,000 | 75.0% | | 300,000 | 75.0% |
TOTAL Cash Compensation Potential | | $700,000 | 175.0% | | $700,000 | 175.0% | | $700,000 | 175.0% |
| | | | | | | | | | |
Restricted Stock Units (2) | | 14,922 | | | 12,700 | | | 10,500 | |
(1) See “Bonus and Non-Equity Incentive Plan Compensation” for a complete discussion of the Company’s bonus compensation program. The Company bonuses for Ms. Pryor were based on the Company’s EBIT achievements in Fiscal 2019, Fiscal 2018 and Fiscal 2017, respectively. The actual Company bonus earned by Ms. Pryor in each of these years based on the Company’s achievement of its EBIT goal was:
| Bonus Earned | % to Base Salary |
Fiscal 2019 | $195,000 | 65.0% |
Fiscal 2018 | $-- | 0.0% |
Fiscal 2017 | $217,500 | 54.4% |
(2) See “Equity Awards” for a complete discussion on equity awards to our NEOs. In Fiscal 2019, 60% of equity awards to our NEOs were performance-based awards, while the remaining 40% were service-based awards that vest equally over three years. In Fiscal 2018 and Fiscal 2017, all our equity awards to our NEOs were performance-based awards.
PSUs are earned by achieving the performance goals determined by the Compensation Committee and for all years presented, half of the PSU was based on a short-term performance goal while the other half was based on a long-term performance goal. The short-term performance goal was established on a one-year achievement based on ROIC with a three-year vesting provision. The long-term performance goal was established on a three-year achievement based on cumulative EBIT which vests in three years. The award associated with each performance goal could be forfeited if a minimum goal was not attained or could be earned up to 200% if a maximum goal was attained.
The table below illustrates the total PSUs awarded to Ms. Pryor and the number of PSUs she has earned based on achievement of the stated goals:
| Total PSUs Awarded | PSUs Earned Based on ROIC Goal | ROIC Achievement Rate | PSUs Earned Based on EBIT Goal | EBIT Achievement ate | PSUs Still Subject to EBIT Goal |
Fiscal 2019 | 9,600 | 3,120 | 65% | N/A | N/A | 4,800 |
Fiscal 2018 | 12,700 | 3,175 | 50% | N/A | N/A | 6,350 |
Fiscal 2017 | 10,500 | 4,200 | 80% | Forfeit | 0% | None |
The 4,800 and 6,350 outstanding PSUs are contingent on the achievement of a three-year cumulative EBIT goal for Fiscal 2019 and Fiscal 2018, respectively. PSUs have cliff vesting provisions of three years from date of grant and upon achievement of performance criteria.
Other Compensation. Other compensation earned by Ms. Pryor is made up of the match under the Company’s 401(k) Plan. See Perquisites and Other Benefits.
Jared S. Briskin
Jared S. Briskin, age 46,49, was appointed our Executive Vice President of Merchandising in September 2021. Previously, he served as Senior Vice President and Chief Merchant from September 2014 through September 2021. He has served in September 2014. Formerly, he served asroles of increasing responsibility and leadership in various merchandising positions across multiple categories since joining the Company in April 1998, including Vice President/Divisional Merchandise Manager of Footwear and Equipment from March 2010 through September 2014 and Vice President/Divisional Merchandise Manager of Apparel and Equipment from June 2004 through March 2010. Prior to his appointment to Vice President in 2004, Mr. Briskin held various merchandising positions across multiple categories since joining the Company in April 1998.
The following table represents the compensation package awarded to Mr. Briskin in each of the years presented, regardless of whether ultimately achieved or obtained:
| | | | Fiscal 2019 | | Fiscal 2018 | | Fiscal 2017 | | Fiscal 2022 | | Fiscal 2021 | | Fiscal 2020 |
Salary Component | Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | | | Dollars or Number of | | Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | % to Base Salary | | Dollars or Number of | % to Base Salary |
Base Salary | | $325,000 | | | $300,000 | | | $300,000 | | |
Base Salary(1) | | Base Salary(1) | | $450,386 | | | $380,000 | | | $350,000 | |
Non-Equity Incentive Plan Compensation | Non-Equity Incentive Plan Compensation | | | | | | | | | | Non-Equity Incentive Plan Compensation | |
Company Bonus Target (1) | | 243,750 | 75.0% | | 225,000 | 75.0% | | 225,000 | 75.0% | |
Company Bonus Target(2) | | Company Bonus Target(2) | | 358,308 | 79.6% | | 285,000 | 75.0% | | 262,500 | 75.0% |
TOTAL Cash Compensation Potential | TOTAL Cash Compensation Potential | | $568,750 | 175.0% | | $525,000 | 175.0% | | $525,000 | 175.0% | TOTAL Cash Compensation Potential | | $808,694 | 179.6% | | $665,000 | 175.0% | | $612,500 | 175.0% |
| | | | | | | | | | | | | | | | | |
Restricted Stock Units (2) | | 12,124 | | | 9,500 | | | 7,900 | | |
Restricted Stock Units(3) | | Restricted Stock Units(3) | | 4,603 | | | 24,000 | | | 20,445 | | |
(1) In Fiscal 2022, the base salary represents the pro-rata amount based on his service as Executive Vice President and Senior Vice President.
(2) See “Bonus and Non-Equity Incentive Plan Compensation” for a complete discussion of the Company’s bonus compensation program. The Company bonuses for Mr. Briskin were based on the Company’s EBIT achievements in Fiscal 2019,2022, Fiscal 20182021 and Fiscal 2017, respectively.2020. The actual Company bonus earned by Mr. Briskin in each of these years based on the Company’s achievement of its EBIT goal was:
| Bonus Earned | % to Base Salary |
Fiscal 2019 | $158,438 | 65.0% |
Fiscal 2018 | $-- | 0.0% |
Fiscal 2017 | $163,125 | 54.4% |
| | | | | | | | |
Year | Bonus Earned | % to Base Salary |
Fiscal 2022 | $716,615 | 159.1% |
Fiscal 2021 | $570,000 | 150.0% |
Fiscal 2020 | $498,750 | 142.5% |
(2)
The Fiscal 2022 bonus earned represents the pro-rata amount based on his service as Executive Vice President and Senior Vice President.
HIBBETT® 2022 Proxy Statement - 59 -
(3) See “Equity Awards” for a complete discussion on equity awards to our NEOs. In Fiscal 2019,2022, 60% of equity awards to our NEOs were performance-based awards and the remaining 40% were service based awards that vest on the third anniversary from the date of grant. In Fiscal 2021, all equity awards were service-based RSUs in response to the COVID-19 pandemic which vest equally over three years. In Fiscal 2020, 60% of equity awards to our NEOs were performance-based awards, while the remaining 40% were service-based awards that vestvested equally over three years. InAs provided for in his Retention Agreement, in addition to the annual equity award, Mr. Briskin also received a special award of service-based awards in Fiscal 2018 and Fiscal 2017, all our equity awards to our NEOs were performance-based awards.2020 in May 2019 which vested equally over two years.
PSUs are earned by achieving the performance goals determined by the Compensation CommitteeCommittee. For Fiscal 2022, the PSU award was based on two long-term goals, ROIC and for all years presented,EBIT measured over three years. For Fiscal 2020, half of the PSU award was based on a short-term performance goal while the other half was based on a long-term performance goal. The short-term performance goal was established on a one-year achievementmeasurement based on ROIC with a three-year vesting provision. The long-term performance goal was established on a three-year achievementmeasurement based on cumulative EBIT which vests in three years. The award associated with each performance goala three-year vesting provision. All PSU awards granted could be forfeited if a minimum goal was not attained or could be earned up to 200% if a maximum goal was attained.
The table below illustrates the total PSUs awarded to Mr. Briskin and the number of PSUs he has earned based on achievement of the stated goals:goals in Fiscal 2022 and Fiscal 2020:
| Total PSUs Awarded | PSUs Earned Based on ROIC Goal | ROIC Achievement Rate | PSUs Earned Based on EBIT Goal | EBIT Achievement Rate | PSUs Still Subject to EBIT Goal |
Fiscal 2019 | 7,800 | 2,535 | 65% | N/A | N/A | 3,800 |
Fiscal 2018 | 9,500 | 2,375 | 50% | N/A | N/A | 4,750 |
Fiscal 2017 | 7,900 | 3,160 | 80% | Forfeit | 0% | None |
| | | | | | | | | | | | | | | | | | | | |
Fiscal Year | Total PSUs Awarded | PSUs Earned Based on ROIC Goal | ROIC Achievement Rate | PSUs Earned Based on EBIT Goal | EBIT Achievement Rate | PSUs Still Subject to EBIT Goal |
Fiscal 2022 | 2,762 | undetermined | undetermined | undetermined | undetermined | 2,762 |
| | | | | | |
Fiscal 2020 | 10,100 | 7,575 | 150% | 10,100 | 200% | None |
In Fiscal 2021, no performance-based awards were given. The 3,800 and 4,750 outstanding PSUs in Fiscal 2022 are contingent on the achievement of a three-year ROIC goal and a three-year cumulative EBIT goal for Fiscal 2019 and Fiscal 2018, respectively.2022. PSUs have cliff vesting provisions of three years from date of grant and upon achievement of performance criteria.
if achieved.
Other Compensation. Other compensation earned by Mr. Briskin is made upconsists of the match under the Company’s 401(k) Plan. See Perquisites and Other Benefits.
HIBBETT® 2022 Proxy Statement - 60 -
William G. Quinn
William G. Quinn, age 46, was appointed our Senior Vice President of Marketing and Digital in April 2019. He joined the Company in February 2016 as our Vice President of Digital Commerce. Prior to joining the Company, he served as Vice President, Digital for David’s Bridal and as Executive Vice President, Chief Marketing Officer for 24 Hour Fitness. Mr. Quinn earned his Bachelor of Arts degree at Vanderbilt University, his MBA at Duke University and also holds a Certificate of Web Design from Temple University.
The following table represents the compensation package awarded to Mr. Quinn Fiscal 2022 and Fiscal 2021, regardless of whether ultimately achieved or obtained:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fiscal 2022 | | Fiscal 2021 | | | | |
Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | % to Base Salary | | | | | | |
Base Salary | | $365,000 | | | $345,000 | | | | | | | |
Non-Equity Incentive Plan Compensation | | | | | | | | | | | | |
Company Bonus Target(1) | | 255,500 | 70.0% | | 258,750 | 75.0% | | | | | | |
TOTAL Cash Compensation Potential | | $620,500 | 170.0% | | $603,750 | 175.0% | | | | | | |
| | | | | | | | | | | | |
Restricted Stock Units(2) | | 3,946 | | | | 12,500 | | | | | | | | |
(1) See “Bonus and Non-Equity Incentive Plan Compensation” for a complete discussion of the Company’s bonus compensation program. The bonuses for Mr. Quinn were based on the Company’s EBIT achievements in Fiscal 2022 and Fiscal 2021. The actual bonus earned by Mr. Quinn in each of these years based on the Company’s achievement of its EBIT goal was:
| | | | | | | | |
Year | Bonus Earned | % to Base Salary |
Fiscal 2022 | $511,000 | 140.0% |
Fiscal 2021 | $517,500 | 150.0% |
| | |
(2) See “Equity Awards” for a complete discussion on equity awards to our NEOs. In Fiscal 2022, 60% of equity awards to our NEOs were performance-based awards and the remaining 40% were service based awards that vest on the third anniversary from the date of grant. In Fiscal 2021, all equity awards were service-based RSUs in response to the COVID-19 pandemic which vest equally over three years.
Other Compensation. Other compensation earned by Mr. Quinn consists of the match under the Company’s 401(k) Plan. See Perquisites and Other Benefits.
HIBBETT® 2022 Proxy Statement - 61 -
Ronald P. Blahnik
Ronald P. Blahnik, age 63, was appointed our Senior Vice President and Chief Information Officer in April 2019. Mr. Blahnik joined the Company in November 2016 as our Vice President and Chief Information Officer. Before joining our Company, he served as a managing partner of Blahnik Consulting Services, LLC. from April 2011 to November 2016. Mr. Blahnik is a retired Army officer and has worked in the information technology field for more than 40 years. He holds a Bachelor of Science degree in Information Technology.
The following table represents the compensation package awarded to Mr. Blahnik in Fiscal 2022 and Fiscal 2021, regardless of whether ultimately achieved or obtained:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fiscal 2022 | | Fiscal 2021 | | | | |
Salary Component | | Dollars or Number of | % to Base Salary | | Dollars or Number of | % to Base Salary | | | | | | |
Base Salary | | $355,000 | | | $340,000 | | | | | | | |
Non-Equity Incentive Plan Compensation | | | | | | | | | | | | |
Company Bonus Target(1) | | 248,500 | 70.0% | | 255,000 | 75.0% | | | | | | |
TOTAL Cash Compensation Potential | | $603,500 | 170.0% | | $595,000 | 175.0% | | | | | | |
| | | | | | | | | | | | |
Restricted Stock Units(2) | | 3,946 | | | | 12,500 | | | | | | | | |
(1) See “Bonus and Non-Equity Incentive Plan Compensation” for a complete discussion of the Company’s bonus compensation program. The bonuses for Mr. Blahnik were based on the Company’s EBIT achievements in Fiscal 2022 and Fiscal 2021. The actual bonus earned by Mr. Blahnik in each of these years based on the Company’s achievement of its EBIT goal was:
| | | | | | | | |
Year | Bonus Earned | % to Base Salary |
Fiscal 2022 | $497,000 | 140.0% |
Fiscal 2021 | $510,000 | 150.0% |
| | |
(2) See “Equity Awards” for a complete discussion on equity awards to our NEOs. In Fiscal 2022, 60% of equity awards to our NEOs were performance-based awards and the remaining 40% were service based awards that vest on the third anniversary from the date of grant. In Fiscal 2021, all equity awards were service-based RSUs in response to the COVID-19 pandemic which vest equally over three years.
Other Compensation. Other compensation earned by Mr. Blahnik consists of the match under the Company’s 401(k) Plan. See Perquisites and Other Benefits.
HIBBETT® 2022 Proxy Statement - 62 -
Grants of Plan-Based Awards Table
The following table provides additional detail regarding stock options and other equity awards (such as restricted stock and restricted stock units) granted during the last fiscal year and amounts payable under other compensation plans (such as long-term incentive awards that are payable in cash or stock): for our NEOs:
Grants of Plan-Based Awards
For the Fiscal Year Ended February 2, 2019
| | | Estimated Possible Payouts Under Non- quity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | All Other Stock
Awards:
Number of Shares of Stock or Units | | Fair Value of Equity Award on Date of Grant |
Executive | Grant Date | Approval Date (3) | Threshold ($) | Target ($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) | | (#)(4) | | ($)(5) |
Rosenthal | 3/27/18 | 3/20/18 | $287,500 | $575,000 | $1,150,000 | | 9,150 | 18,300 | 36,600 | | 10,200 | | $642,675 |
Bowman | 3/27/18 | 3/20/18 | $140,625 | $281,250 | $562,500 | | 4,500 | 9,000 | 18,000 | | 4,989 | | $315,452 |
Pryor | 3/27/18 | 3/20/18 | $150,000 | $300,000 | $600,000 | | 4,800 | 9,600 | 19,200 | | 5,322 | | $336,491 |
Briskin | 3/27/18 | 3/20/18 | $121,875 | $243,750 | $487,500 | | 3,900 | 7,800 | 15,600 | | 4,324 | | $273,396 |
Note: No stock option awards were granted in Fiscal 2019 to our NEOs, therefore the columns applicable to option awards are not presented in this table.
January 29, 2022
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | All Other Stock Awards: Number of Shares of Stock or Units | | Fair Value of Equity Awards on Date of Grant |
NEO | Grant Date | Approval Date(3) | Threshold ($) | Target ($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) | | (#)(4) | | ($)(5) |
Longo(1) | 3/22/21 | 2/19/21 | $350,000 | $700,000 | $1,000,000 | | 3,945 | 7,890 | 15,780 | | 5,260 | | $999,926 |
Volke | 3/22/21 | 2/19/21 | $126,000 | $252,000 | $504,000 | | 1,184 | 2,368 | 4,736 | | 1,578 | | $300,054 |
Briskin(6) | 3/22/21 | 2/19/21 | $179,154 | $358,308 | $716,615 | | 1,381 | 2,762 | 5,524 | | 1,841 | | $350,012 |
Quinn | 3/22/21 | 2/19/21 | $127,750 | $255,500 | $511,000 | | 1,184 | 2,368 | 4,736 | | 1,578 | | $300,054 |
Blahnik | 3/22/21 | 2/19/21 | $124,250 | $248,500 | $497,000 | | 1,184 | 2,368 | 4,736 | | 1,578 | | $300,054 |
(1)Estimated possible payouts under non-equity incentive plan awards represent the cash bonus subject to performance conditions. The amounts presented represent the minimum amount that could be earned (threshold) assuming a certain level of required performance under the plan, the target amount awarded and the maximum amount that could be earned. The entire cash bonus was based on an EBIT goal for Fiscal 20192022 for all NEOs listed. The EBIT goal was achieved at 65%200% of the target as reflected in the Summary Compensation Table,. with the exception of Mr. Longo whose maximum was capped at $1.0 million under the provisions of our Bonus Plan. See Note 3 under the Summary Compensation Table. and Proposal Number 6 for more information related to the current $1.0 million maximum payout cap under the Bonus Plan.
(2)Estimated future payouts under equity incentive plan awards consist of those equity awards with performance conditions. The amounts presented represent the minimum award (threshold) that could be earned assuming a certain level of required performance under the plan, the target amount that was awarded and the maximum award that could be earned assuming the equity award value when earned equaled the fair value on the date of grant.
(3) The Fiscal 2019 PSUs awarded to the NEOs were tiered with cliff vesting on the third anniversary ofapproval date represents the date of grant and contingent on the achievement of specified performance criteria over the next three fiscal years. Half of the award was based on performance criteria for Fiscal 2019 and was certified by the Compensation Committee as having been achieved at 65%. The remaining half of the award will be certified, if performance is achieved.
(3) | The approval date represents the date the awards were approved by our Compensation Committee. |
(4)All other stock awards or units awarded to the NEOs represent service-based RSUs with gradeda three-year cliff vesting over the next three fiscal years.provision.
(5)Fair value of equity award on date of grant is determined under the provisions of ASC Topic 718. All of the equity awards granted to our NEOs in Fiscal 20192022 were in the form of RSUs and were valued at the closing price of our common stock on the date immediately preceding the date of grant or $22.55grant. The closing price of our common stock for the units awarded on March 27, 2018.19, 2021, was $76.04.
(6) Mr. Briskin was promoted to Executive Vice President of Merchandising in September 2021, having formerly served as Senior Vice President and Chief Merchant. The estimated possible payout under non-equity incentive plan awards represents the pro-rated cash bonus subject to performance conditions.
HIBBETT® 2022 Proxy Statement - 63 -
Outstanding Equity Awards at Fiscal Year-End Table
The following table presents information on each outstanding equity award held by our NEOs at the end of our fiscal year ended February 2, 2019, including the number of securities underlying both exercisable and unexercisable portions of each stock option as well as the exercise price and expiration date of each outstanding option:Fiscal 2022:
Outstanding Equity Awards at Fiscal Year-End
For the Fiscal Year Ended February 2, 20192022
| | Stock Awards |
NEO | | Number of Units of Stock That Have Not Vested (#) | Market Value of Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($) |
Mr. Rosenthal | (1) | 4,800 | 78,288 | -- | -- |
| (2) | 3,025 | 49,338 | -- | -- |
| (3) | 7,200 | 117,432 | -- | -- |
| (4) | 5,475 | 89,297 | 10,950 | 178,595 |
| (5) | 16,148 | 263,374 | 9,150 | 149,237 |
| | | | | |
Mr. Bowman | (1) | 2,250 | 36,698 | -- | -- |
| (2) | 1,450 | 23,650 | -- | -- |
| (3) | 3,560 | 58,064 | - | - |
| (4) | 2,700 | 44,037 | 5,400 | 88,074 |
| (5) | 7,689 | 125,408 | 4,500 | 73,395 |
| | | | | |
Ms. Pryor | (1) | 2,650 | 43,222 | -- | -- |
| (2) | 1,725 | 28,135 | -- | -- |
| (3) | 4,200 | 68,502 | -- | -- |
| (4) | 3,175 | 51,784 | 6,350 | 103,569 |
| (5) | 8,497 | 138,586 | 4,800 | 78,288 |
| | | | | |
Mr. Briskin | (2) | 1,125 | 18,349 | -- | -- |
| (3) | 3,160 | 51,540 | -- | -- |
| (4) | 2,375 | 38,736 | 4,750 | 77,473 |
| (5) | 6,699 | 109,261 | 3,900 | 63,609 |
| | | | | | | | | | | | | | | | | |
| | Stock Awards |
NEO | | Number of Units of Stock That Have Not Vested (#) | Market Value of Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($) |
Mr. Longo | (1) | 18,897 | 1,124,938 | — | — |
| (2) | 23,334 | 1,389,073 | — | — |
| (3) | 5,260 | 313,128 | 7,890 | 469,692 |
Mr. Volke | (4) | 16,000 | 952,480 | — | — |
| (3) | 1,578 | 93,938 | 2,368 | 140,967 |
Mr. Briskin | (5) | 1,865 | 111,023 | — | — |
| (6) | 17,675 | 1,052,193 | — | — |
| (2) | 16,000 | 952,480 | — | — |
| (3) | 1,841 | 109,595 | 2,762 | 164,422 |
Mr. Quinn | (7) | 4,435 | 264,016 | — | — |
| (8) | 5,544 | 330,034 | — | — |
| (2) | 8,334 | 496,123 | — | — |
| (3) | 1,578 | 93,938 | 2,368 | 140,967 |
| | | | | |
Mr. Blahnik | (7) | 3,326 | 197,997 | — | — |
| (8) | 5,544 | 330,034 | — | — |
| (2) | 8,334 | 496,123 | — | — |
| (3) | 1,578 | 93,938 | 2,368 | 140,967 |
| | | | | |
Note: There are no stock options outstanding for any of our NEOs. Columns associated with stock options have been omitted for presentation purposes. All values are shown at the closing price of $16.31$59.53 as of February 2, 2019.
(1)Restricted stock units awarded March 18, 2014January 6, 2020 under the EIP2015 Plan subject to a Company ROIC goal for Fiscal 2015 subject to a five-year vesting condition. The performance goal was achieved in Fiscal 2015 for the ROIC goal and represents an achievement of 100% of the award granted for all executives and which will vest on the fifth anniversary of the date of grant or March 18, 2019.continuous service through January 1, 2023.
(2)Restricted stock units awarded March 17, 2015April 7, 2020 under the EIP subject to a Company ROIC goal for Fiscal 2016 subject to a five-year vesting condition. The performance goal was achieved in Fiscal 2016 for the ROIC goal and represents an achievement of 50% of the award granted for all executives and2015 Plan which will vest on the fifth anniversary of the date of grant or March 17, 2020.
(3)Restricted stock units awarded March 15, 2016 under the EIP subject to a Company ROIC goal for Fiscal 2017 subject to a three-year vesting condition and a cumulative Company EBIT goal for Fiscal 2017 through Fiscal 2019 subject to a three-year vesting condition. The performance goal was achieved in Fiscal 2017 for the ROIC goal and represents an achievement of 80% of the award granted for all executives and which will vest on the third anniversary of the date of grant or March 15, 2019. The performance goal was not achieved for the three-year cumulative EBIT goal and the awards were forfeited.
(4)Restricted stock units awarded March 16, 2017 under the EIP subject to a Company ROIC goal for Fiscal 2018 subject to a three-year vesting condition and a cumulative Company EBIT goal for Fiscal 2018 through Fiscal 2020 subject to a three-year vesting condition. The performance goal was achieved in Fiscal 2018 for the ROIC goal and represents an achievement of 50% of the award granted for all executives and which will vest on the third anniversary of the date of grant or March 16, 2020. The achievement for the performance goal for cumulative EBIT has yet to be determined.
(5)Restricted stock units awarded March 27, 2018 under the EIP of which the majority is subject to a Company ROIC goal for Fiscal 2019 subject to a three-year vesting condition and a cumulative Company EBIT goal for Fiscal 2019 through Fiscal 2021 subject to a three-year vesting condition. The performance goal was achieved in Fiscal 2019 for the ROIC goal and represents an achievement of 65% of the award granted for all executives and which will vest on the third anniversary of the date of grant or March 27, 2021. The achievement for the performance goal for cumulative EBIT has yet to be determined.
The remainder of the award dated March 27, 2018 is service-based and will vest equally on the first, second and third anniversaries of the date of grant. The first tranche vested on April 7, 2021.
(3) Restricted stock units awarded March 22, 2021 under the 2015 Plan. The number of units that have not vested represents service-based awards that will vest on the third anniversary from the date of grant. The number of units that are unearned represents performance-based awards subject to three-year performance metrics; half based on an ROIC goal and half based on a cumulative EBIT goal. If achieved, these awards will vest on the third anniversary from the date of grant or when certified by our Compensation Committee, whichever is later.
HIBBETT® 2022 Proxy Statement - 64 -
(4) Restricted stock units awarded April 13, 2020 under the 2015 Plan which will vest equally on the first, second and third anniversaries of the date of grant. The first tranche vested April 13, 2021.
(5)Restricted stock units awarded on March 21, 2019 under the 2015 Plan which will vest equally on the first, second and third anniversaries of the date of grant. The first and second tranches vested on March 21, 2020 and March 21, 2021, respectively.
(6) Restricted stock units awarded March 21, 2019 under the 2015 Plan which are performance-based awards. Half of the award was based on an ROIC goal for Fiscal 2020 subject to a three-year vesting condition and half of the award was based on a three-year cumulative EBIT goal for Fiscal 2020 through Fiscal 2022 subject to a three-year vesting condition. The performance goal was achieved in Fiscal 2020 for the ROIC goal and represents an achievement of 150% of the award.The achievement for the performance goal for cumulative EBIT was achieved in Fiscal 2022 and represents an achievement of 200% of the award. Both awards vested on the third anniversary of the date of grant or March 21, 2022.
(7) Restricted stock units awarded March 27, 2018 which vested on the fourth anniversary of the date of grant, or March 27, 2022.
(8) Restricted stock units awarded March 21, 2019 which will vest on the fourth anniversary of the date of grant.
Option Exercises and Stock Vested in Fiscal Year 20192022
The following table reflects amountsthe total amount realized by our NEOs on each option that was exercised and eachNEO for stock awardawards that vested during the fiscal year:
| Option Awards | | Stock Awards |
NEO | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) |
Mr. Rosenthal | -- | $-- | | 2,525 | $58,706 |
Mr. Bowman | -- | $-- | | 1,100 | $25,575 |
Ms. Pryor | -- | $-- | | 1,400 | $32,550 |
Mr. Briskin | -- | $-- | | 2,288 | $50,222 |
| | | | | | | | | | | | | |
| | | Stock Awards |
NEO | | | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) |
Mr. Longo | | | | 11,666 | $831,203 |
Mr. Volke | | | | 8,000 | $579,600 |
Mr. Briskin | | | | 24,017 | $1,572,733 |
Mr. Quinn | | | | 9,957 | $716,949 |
Mr. Blahnik | | | | 8,276 | $604,473 |
Note: There are no stock options outstanding for any of our NEOs. Columns associated with stock option exercises have been omitted for presentation purposes.
The values shown for restricted stock were calculated by multiplying the number of shares vested by the price of our stock at the end of the business day vested.immediately preceding the vest date. These numbers have not been reduced to reflect shares that were withheld to pay taxes and were not issued to the NEO.
Pension Benefits Table
The Pension Benefits Table is intended to disclose the actuarial present value of each NEO’s accumulated benefit under each pension plan, assuming benefits are paid at normal retirement age based upon current levels of compensation. We do not currently offer a pension benefit plan or defined benefit-type plan arrangement to any of our employees, including our executive officers. Therefore, this table is not included.
HIBBETT® 2022 Proxy Statement - 65 -
Nonqualified Deferred Compensation
The following table discloses the annual contributions made by our NEOs and Company under nonqualified defined contribution plans during the year:
Nonqualified Deferred Compensation in Fiscal Year 2019 2022(1)
NEO | | Executive Contributions in Last Fiscal Year ($) | | Registrant Contributions in Last Fiscal Year ($) | | Aggregate
Earnings in Last Fiscal Year ($) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last Fiscal Year End ($) |
Mr. Rosenthal | | $-- | | $-- | | $(9,354) | | $-- | | $437,682 |
Mr. Bowman | | $-- | | $-- | | $(981) | | $-- | | $44,734 |
Ms. Pryor | | $-- | | $-- | | $(1,690) | | $-- | | $128,165 |
Mr. Briskin | | $-- | | $-- | | $1,155 | | $-- | | $68,518 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NEO | | Executive Contributions in Last Fiscal Year ($) | | Registrant Contributions in Last Fiscal Year ($) | | Aggregate Earnings in Last Fiscal Year ($) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last Fiscal Year End ($) |
| | | | | | | | | | |
| | | | | | | | | | |
Mr. Briskin | | $— | | $— | | $2,803 | | $— | | $101,663 |
| | | | | | | | | | |
| | | | | | | | | | |
(1)Amounts set forth in this table reflect amounts deferred and contributed under the Hibbett, Sports, Inc. Supplemental 401(k) Plan (Supplemental Plan)(the “Supplemental Plan”).
Our Board of Directors adopted the Supplemental Plan for the purpose of supplementing the employer matching contribution and salary deferral opportunity available to highly compensated employees whose ability to receive Company matching contributions and defer salary under our 401(k) Plan has beenwas limited because of certain restrictions applicable to qualified plans. The nonqualified deferred compensation Supplemental Plan allows participants to defer up to 40% of their compensation. Since Fiscal 2016, contributionsContributions to the Supplemental Plan are not subject to matching provisions.
The Supplemental Plan is administered on a calendar year basis. Contributionsprovisions and are held in trust and are invested based on the individual’s investment directive. Nonedirective
The Supplemental Plan has not been offered by the Company since its 401(k) Plan converted to a safe harbor plan in Fiscal 2018. Mr. Briskin is the only NEO who participated in the Supplemental Plan. The Supplemental Plan was no longer being offered when Mr. Longo and Mr. Volke joined the Company.
Potential Payments upon Termination or Change in Control
Certain of our Company’s plans and programs provide for payments in connection with a termination of employment under certain circumstances or change in control. Estimates of the compensation, benefits and vesting of equity grants that may be payable to our NEOs upon termination of employment or change in control are included in the tables below. The information in the tables assumes a termination date of January 29, 2022. In all calculations, the value of equity awards was calculated on non-vested awards (service-based and earned performance-based) using the closing price of our stock on January 29, 2022 of $59.53.
| | | | | | | | | | | | | | | | | | | | |
NEO/Plan Description | Termination without Cause | Termination by Executive for Good Reason | Death | Disability | Retirement | Change in Control |
Mr. Longo | | | | | | |
Employment Agreement(1) | $1,400,000 | $1,400,000 | (4) | (5) | $— | $— |
Longo Severance Agreement(2) | $— | $— | $— | $— | $— | $3,729,002 |
Executive RSU Agreement(3) | $— | $— | $2,827,139 | $2,827,139 | $— | (2) |
Insurance Benefits(4) | $— | $— | $500,000 | $— | $— | $— |
AD&D Benefits(5) | $— | $— | See table in footnote | $— | $— |
| | | | | | |
Mr. Volke | | | | | | |
Severance Agreement(6) | $— | $— | $— | $— | $— | $1,964,418 |
Executive RSU Agreement(3) | $— | $— | $1,046,418 | $1,046,418 | $— | (6) |
Insurance Benefits(4) | $— | $— | $500,000 | $— | $— | $— |
HIBBETT® 2022 Proxy Statement - 66 -
| | | | | | | | | | | | | | | | | | | | |
AD&D Benefits(5) | $— | $— | See table in footnote | $— | $— |
| | | | | | |
Mr. Briskin | | | | | | |
Severance Agreement(6) | $— | $— | $— | $— | $— | $3,052,573 |
Executive RSU Agreement(3) | $— | $— | $2,225,291 | $2,225,291 | $— | (6) |
Insurance Benefits(4) | $— | $— | $500,000 | $— | $— | $— |
AD&D Benefits(5) | $— | $— | See table in footnote | $— | $— |
| | | | | | |
Mr. Quinn | | | | | | |
Severance Agreement(6) | $— | $— | $— | $— | $— | $2,113,616 |
Executive RSU Agreement(3) | $— | $— | $920,096 | $920,096 | $— | (6) |
Standard RSU Agreement(7) | $— | $— | $264,016 | $264,016 | $— | (6) |
Insurance Benefits(4) | $— | $— | $500,000 | $— | $— | $— |
AD&D Benefits(5) | $— | $— | See table in footnote | $— | $— |
| | | | | | |
Mr. Blahnik | | | | | | |
Severance Agreement(6) | $— | $— | $— | $— | $— | $1,866,100 |
Executive RSU Agreement(3) | $— | $— | $920,096 | $920,096 | $— | (6) |
Standard RSU Agreement(7) | $— | $— | $197,997 | $197,997 | $— | (6) |
Insurance Benefits(4) | $— | $— | $500,000 | $— | $— | $— |
AD&D Benefits(5) | $— | $— | See table in footnote | $— | $— |
(1) Under Mr. Longo’s Employment Agreement, in the event of termination of his employment by the Company other than for cause or by Mr. Longo for good reason, he is entitled to his base salary plus his estimated annual target bonus.
If termination is the result of death or disability (as defined in the Employment Agreement), he is also entitled to benefits payable under any benefit plans applicable at his time of termination, such as the acceleration of non-vested equity awards under the Executive RSU Agreement described in footnote 3 below, in addition to life insurance and/or AD&D benefits as described in footnote 4 and footnote 5 below, respectively.
Payments that Mr. Longo has a right to receive under the Employment Agreement would be limited if the total of all payments constituted an “excess parachute payment” as defined in Section 280G of the Internal Revenue Code (the “Code”). Any excess payments would be reduced to the largest amount that would result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code.
(2) Under the Longo Severance Agreement, if Mr. Longo’s employment is terminated by the Company without cause or by the executive for good reason within: (i) two years following a Change in Control; or (ii) within a six-month period prior to a Change in Control (as defined in the Longo Severance Agreement) if Mr. Longo’s termination or resignation is also directly related to or occurs in connection with a Change in Control, the Company shall pay Mr. Longo a severance payment in the amount equal to one and one half (1.5) times the sum of Mr. Longo’s covered salary and covered bonus, less the amount, if any, payable to Mr. Longo as severance compensation under the Employment Agreement. In addition, any unvested equity awards will become fully exercisable, vested and non-forfeitable as defined in the Executive RSU agreement in footnote 3 below.
Covered salary is based on the highest annual rate of base pay paid to Mr. Longo. Covered bonus is based on a five-year average of bonuses paid to Mr. Longo (but in no event is greater than the target bonus for the year in which the termination or resignation takes place). RSUs were valued at the closing stock price on January 29, 2022 multiplied by the number of non-vested shares and do not include unearned PSUs. Mr. Longo had no unvested stock options outstanding on January 29, 2022. As of January 29, 2022, the number of non-vested RSUs considered in the calculation above for Mr. Longo was 47,491.
HIBBETT® 2022 Proxy Statement - 67 -
Under the Longo Severance Agreement, any severance payments shall be paid within thirty (30) days of the executive’s termination date or the Change in Control date, whichever is later.In addition, to the extent the executive has been granted equity compensation under the Company’s equity compensation plans, the executive’s interest in such awards would become fully exercisable, vested, and non-forfeitable as of the Change in Control date, to the extent not already exercisable or vested as of such date.
Payments that Mr. Longo has a right to receive under the Longo Severance Agreement would be limited if the total of all payments constituted an “excess parachute payment” as defined in Section 280G of the Code. Any excess payments would be reduced to the largest amount that would result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code.
(3) The Compensation Committee has adopted an Executive Restricted Stock Unit Award Agreement (the “Executive RSU Agreement”) pursuant to the 2015 Plan. All of Mr. Longo’s, Mr. Volke’s and Mr. Briskin’s equity awards were granted pursuant to the Executive RSU Agreement. Mr. Quinn’s and Mr. Blahnik’s Fiscal 2022 and Fiscal 2021 equity awards were granted pursuant to the Executive RSU Agreement.
Under the provisions of the Executive RSU Agreement, termination by reasons of death, disability, retirement or change in control (all as defined in the Executive RSU Agreement), results in an acceleration of the vesting of non-vested service-based and earned performance-based equity awards. Unearned performance-based equity awards may also accelerate but only upon certification of achievement by the Compensation Committee. As of January 29, 2022, none of our NEOs contributedqualified for any retirement benefits under the Executive RSU Agreement.
RSUs were valued at the closing stock price on January 29, 2022 multiplied by the number of non-vested shares and do not include unearned PSUs. There were no unvested stock options outstanding on January 29, 2022. As of January 29, 2022, the number of non-vested RSUs considered for each NEO in the calculations above was:
| | | | | | | | |
NEO | | Non-Vested RSUs |
Mr. Longo | | 47,491 |
Mr. Volke | | 17,578 |
Mr. Briskin | | 37,381 |
Mr. Quinn | | 12,280 |
Mr. Blahnik | | 12,280 |
The value of accelerated equity awards in the event of a change in control event is reflected in the totals of footnote 2 for Mr. Longo and footnote 6 for Messrs. Volke, Briskin, Quinn and Blahnik. At January 29, 2022, all our NEOs had outstanding performance-based equity awards which are not reflected in this table.
(4) In the event of death, each eligible NEO would be entitled to a life insurance payout of twice their base salary up to a maximum of $500,000 (or $500,000 each).
(5) We carry Accidental Death and Disability Benefits (“AD&D Benefits”) for eligible participants, which includes all our NEOs. AD&D Benefits for qualifying losses (as defined in our policy) in covered accidents or common carrier accidents are outlined below.
HIBBETT® 2022 Proxy Statement - 68 -
| | | | | | | | |
Loss | Covered Accident | Common Carrier Accident |
Loss of life (a) | $500,000 | $1,000,000 |
Loss of one member (hand, foot, or eye) (b) | $250,000 | $500,000 |
Loss of two or more members (b) | $500,000 | $1,000,000 |
Quadriplegia (b) | $500,000 | $1,000,000 |
Paraplegia (b) | $250,000 | $500,000 |
Hemiplegia (b) | $250,000 | $500,000 |
(6) Under the Severance Agreement, if a covered executive’s employment is terminated by the Company without cause or by the executive for good reason within: (i) two years following a Change in Control (as defined in the Severance Agreement); or (ii) within a six-month period prior to a Change in Control if the executive’s termination or resignation is also directly related to or occurs in connection with a Change in Control, the Company shall pay the executive a severance payment in the amount equal to one and one half (1.5) times the sum of the executive’s covered salary and covered bonus. In addition, any unvested equity awards will become fully exercisable, vested and non-forfeitable as defined in the Executive RSU Agreement in footnote 3 above and in the Standard RSU Agreement in footnote 7 below.
Covered salary is based on the highest annual rate of base pay paid to each NEO. Covered bonus is based on a five-year average of bonuses paid to each NEO (but in no event is greater than the target bonus for the year in which the termination or resignation takes place).
RSUs were valued at the closing stock price on January 29, 2022 multiplied by the number of non-vested shares and do not include unearned PSUs. There were no unvested stock options outstanding on January 29, 2022. As of January 29, 2022, the number of non-vested RSUs considered for each NEO in the calculations above was:
| | | | | | | | |
NEO | | Non-Vested RSUs |
Mr. Longo | | 47,491 |
Mr. Volke | | 17,578 |
Mr. Briskin | | 37,381 |
Mr. Quinn | | 22,259 |
Mr. Blahnik | | 21,150 |
Under the Severance Agreement, any severance payments shall be paid within thirty (30) days of the executive’s termination date or the Change in Control date, whichever is later.In addition, to the Supplemental Planextent the executive has been granted equity compensation under the Company’s equity compensation plans, the executive’s interest in calendar year 2018.such awards would become fully exercisable, vested, and non-forfeitable as of the Change in Control date, to the extent not already exercisable or vested as of such date.
Payments that Messrs. Volke, Briskin, Quinn and Blahnik have a right to receive individually under the Severance Agreement would be limited if the total of all payments constituted an “excess parachute payment” as defined in Section 280G of the Code. Any excess payments would be reduced to the largest amount that would result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code.
(7) The Compensation Committee has adopted a Standard Restricted Stock Unit Award Agreement (Standard RSU Agreement) pursuant to the 2015 Plan. All of Mr. Quinn’s and Mr. Blahnik’s equity awards prior to Fiscal 2021 were granted pursuant to the Standard RSU Agreement.
HIBBETT® 2022 Proxy Statement - 69 -
Under the provisions of the Standard RSU Agreement, termination by reasons of death, disability, retirement or change in control (all as defined in the Standard RSU Agreement), results in an acceleration of the vesting of non-vested service-based equity awards. Mr. Quinn and Mr. Blahnik do not qualify for any retirement benefits under the Executive RSU Agreement.
RSUs were valued at the closing stock price on January 29, 2022 multiplied by the number of non-vested shares. There were no unvested stock options outstanding on January 29, 2022. As of January 29, 2022, the number of non-vested RSUs considered for each NEO in the calculations above was:
| | | | | | | | |
NEO | | Non-Vested RSUs |
Mr. Quinn | | 9,979 |
Mr. Blahnik | | 8,870 |
The value of accelerated equity awards in the event of a change in control event is reflected in the totals of footnote 6 for Mr. Quinn and Mr. Blahnik.
Future Planning
On March 22, 2019, we announced the planned retirement of our President and Chief Executive Officer, Jeff Rosenthal. We expect him to remain in his capacity as CEO until a successor is named and to assist in the leadership transition. In addition, on April 5, 2019, Scott Bowman, our Chief Financial Officer, announced his resignation from the Company effective April 26, 2019. The Compensation Committee is focused on a search for our next CEO and CFO and with the assistance of Mr. Rosenthal, working towards a seamless transition of leadership. The Compensation Committee will determine the compensation of the successor CEO and any interim or permanent CFO at the time of the hiring or promotion of such officer.
For Fiscal 2020,2023, the Compensation Committee established short-term (cash) and long-term (equity) incentive target bonuses and performance goals for itsthe NEOs, consistent with pasthistorical practices. The Compensation Committee also elected to increase base pay compensation for three of our NEOs for Fiscal 2020. The Committee elected not to increase the base salary of Mr. Rosenthal or set incentive goals as he announced his planned retirement at the time the Committee was setting Fiscal 2020 compensation. Mr. Bowman’s announced resignation was made after the executive compensation packages had been set.2023. Base salaries for our NEOs for Fiscal 2020 are2023 were effective as of March 17, 2019 and13, 2022.
The components of the compensation package to our current NEOs approved by our Compensation Committee for Fiscal 2022 are as follows:
NEO | Base Pay | Bonus Goal (% of Base Pay) | Equity Goal (% of Base Pay) |
Mr. Rosenthal | $575,000 | None | None |
Mr. Bowman | $385,000 | 75% | 75% |
Ms. Pryor | $405,000 | 75% | 75% |
Mr. Briskin | $330,000 | 75% | 75% |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Total |
| | Target | Target | Target | | Target |
| | Short-Term | Short-Term | Long-Term | | Compensation |
| Base | Incentive | Incentive | Incentive | Total Target | Percent to |
NEO | Salary | Percentage | Dollars | Dollars | Compensation | Base Salary |
Mr. Longo | $850,000 | 100% | $850,000 | $1,200,000 | $2,900,000 | 341% |
Mr. Volke | $385,000 | 70% | $269,500 | $300,000 | $954,500 | 248% |
Mr. Briskin | $485,000 | 85% | $412,250 | $450,000 | $1,347,250 | 278% |
Mr. Quinn | $400,000 | 75% | $300,000 | $350,000 | $1,050,000 | 263% |
Mr. Blahnik | $375,000 | 70% | $262,500 | $300,000 | $937,500 | 250% |
Fiscal 20202023 Short-Term Incentive (Cash Bonus)
Consistent with the bonus structure of Fiscal 2019, theThe Company performance goal for Fiscal 20202023 is based on EBIT.EBIT and consistent with historical practices. The Compensation Committee believes that it wasis in the Company’s and our stockholders’ best interestinterests to base all eligible NEOthe NEO’s cash bonuses on Company performance. The bonus, based on the percentage of EBIT achieved in Fiscal 2020,2023, can range from a payout of 0.0% to 200.0% of the target award.
As described elsewhere in this Proxy Statement, the Bonus Plan, as currently in effect, limits annual cash bonuses issued thereunder to $1.0 million per fiscal year. During Fiscal 2022, Mr. Longo’s bonus was capped at 143% of target due to such limitation in the Bonus Plan. However, as noted in Proposal Number 6, we are asking for stockholder approval to increase the amount of an incentive bonus payable to an eligible executive officer under the
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Bonus Plan from $1.0 million during any fiscal year to an amount not to exceed two times (2x) the Target Incentive Bonus Percentage multiplied by an eligible executive’s Base Salary during any fiscal year. If the Cash Bonus Plan Amendment is approved by our stockholders, we intend to award the remaining $400,000 of bonus to Mr. Longo under the Bonus Plan. If stockholders do not approve the Cash Bonus Plan Amendment, Mr. Longo will not be awarded the bonus under the Bonus Plan that is in excess of the current maximum amount with respect to Fiscal 2022, and he and other executive officers will also be limited to a $1.0 million cash bonus for subsequent years; however, the Compensation Committee retains discretion to consider other forms of awards, as necessary, to remain competitive for talent and reward exceptional performance. See Proposal Number 6 for additional information.
Individual goals are used to evaluate executives annually and are considered in connection with the determination of base salary for each NEO. The performance appraisals for our Executive and the majority of our Senior Vice Presidents are conducted by our CEO and the performance appraisal for our CEO is performed by the Compensation Committee. The Executive Vice President oversees the performance appraisals Senior Vice Presidents that report directly to him. All the performance appraisals are reviewed by the Compensation Committee and considered when determining each NEO’sNEOs compensation package. All incentive bonuses were established under the Bonus Plan.
Fiscal 20202023 Long-Term Incentive (Equity Awards)
For Fiscal 2020,2023, the Compensation Committee awarded a mix of performance-based and service-based restricted stock units. The performance-based units represent 60% of the overall equity award and will cliff vest in three years, if earned. The service-based units represent 40% of the overall equity award and will cliff vest equally overin three years beginning onyears. The Compensation Committee defines the first anniversaryfair value of equity awards to equal the closing price of our stock the business day immediately preceding the date of grant. Each eligible NEO received a total award based on 75.0% of their base salary. The PSU awards were based on 80% of the 30-day trailing average of our stock price as of March 21, 2019. The RSUAll awards were based on the closing price of our stock of $18.04$46.22 on March 21, 2019.29, 2022; the preceding business day of our date of grant of March 30, 2022. The Compensation Committee may exercise negative discretion on all performance-based compensation.awards.
Consistent with Fiscal 2019,historical practices, the Compensation Committee approved a tiered structure for the award of performance-based restricted stock units for Fiscal 2020.2023. The PSU awards are separated into two stand-alone grants, each based on a specific performance target. Half of the award is subject to a ROIC goal forwhich equals the average ROIC over Fiscal 20202023, Fiscal 2024 and if achieved, will cliff vest three years from the date of grant.Fiscal 2025. The remaining half is subject to the achievement of a cumulative EBIT goal for Fiscal 20202023 through Fiscal 2022. If achieved, the awards will cliff vest three years from the date of grant.2025. The achievement or failure to achieve any of the goals does not affect the ability to achieve the other goal. For both awards, the percentage of units that vest depends on the percentage of each goal achieved at the end of the performance period and can range from 0.0% to 200.0% of the target award.
Chief Executive Officer (CEO) Pay Ratio Disclosure
Pursuant to Item 402(u) of Regulation S-K, the SEC requires the Company to disclose annually:
(i) the median of the annual total compensation of all employees of the Company (excluding Mr. Longo);
| (i) | the median of the annual total compensation of all employees of the Company (excluding Mr. Rosenthal, the Company’s chief executive officer); |
(ii) the annual total compensation of Mr. Longo; and(iii) the ratio of Mr. Longo’s annual total compensation to the median annual total compensation of all employees (excluding Mr. Longo).
| (ii) | the annual total compensation of Mr. Rosenthal; and |
| (iii) | the ratio of Mr. Rosenthal’s annual total compensation to the median annual total compensation of all employees (excluding Mr. Rosenthal). |
Based on the methodology and material assumptions described below, we have estimated these amounts for Fiscal 20192022 as follows:
| | | | | | | | |
Median annual total compensation of all employees (excluding Mr. Rosenthal)Longo) | | $5,939 | 5,401 | |
Annual total compensation of Mr. Rosenthal (as reported in the Summary Compensation Table)Longo | | $1,603,575 | 2,712,976 | |
Ratio of Mr. Rosenthal’sLongo’s annual total compensation to median annual total compensation of all other employees | | 270:502:1 |
We identified our median employee from our employee population as of December 19, 20182021 who had compensation in the 12-month period ended December 31, 2018.2021. On that date, we had 9,34210,881 employees, all of whom were
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employed in the United States. Of the 9,34210,881 employees, approximately 66%67% were considered part-time or seasonal employees. To determine our median employee, we chose taxable compensation for federal income tax purposes (W-2 income) using our payroll records for the 12-month period ended December 31, 20182021 as our consistently applied compensation measure (CACM).
We did not include the value of non-taxable Company-provided benefits such as medical and life insurance benefits in the determination of taxable compensation; nor did we annualize the compensation of full-time and part-time permanent employees who were employed on December 19, 20182021 but did not work for us the entire fiscal year.
We sorted our employee population (excluding our CEO)Mr. Longo) using this methodology and selected the employee with the median taxable compensation. Our median employee was a part-time store associateteam member whose total annual compensation for Fiscal 20192022 was $5,939.$5,401.
TheWe believe the pay ratio described above is a reasonable estimate calculated in a manner consistent with SEC rules and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
In addition to the pay ratio required by the SEC’s rules, we are also providing a supplemental pay ratio that excludes all part‑time,part-time, temporary and seasonal employees of the Company from the determination of our median employee and the calculation of the annual total compensation of our median employee. Our large population of part‑time,part-time, temporary and seasonal employees has the effect of lowering the annual total compensation for our median employee. We believe that a pay ratio that uses only full‑timefull-time employees as of December 19, 20182021 (excluding the Chief Executive Officer)Mr. Longo) for purposes of determining our median employee provides a more representative comparison of the Chief Executive Officer’s annual total compensation to the median employee’s annual total compensation.
We identified the median employee for purposes of the supplemental pay ratio using the same methodology as the required pay ratio. Applying this methodology to our full‑timefull-time employees at December 19, 2018,2021, we determined that our median employee in Fiscal 20192022 was a full‑timefull-time store associateteam member with annual total compensation in the amount of $22,016.$22,062. As a result, the ratio of the annual total annual compensation of the Chief Executive Officer for Fiscal 2019, as reported in the Summary Compensation Table,2022 to the median full‑timefull-time employee’s total annual compensation for Fiscal 2019,2022, was estimated to be 73:123:1.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information concerning the beneficial ownership of the Company’s common stock expected as of April 2, 2019,7, 2022, by each person (or group with the meaning of Section 13(d)(3) of the Exchange Act) known by the Company to own beneficially more than five percent of the Company’s common stock.
Name and Address of 5% Beneficial Owners | Amount and Nature of Beneficial Ownership (1) | Percent of Class (2) |
BlackRock, Inc. (3) 55 East 52nd Street New York, NY 10055 | 2,729,250 | 14.9% |
Dimensional Fund Advisors LP (4) Building One 6300 Bee Cave Road Austin, TX 78746 | 1,575,923 | 8.6% |
FMR LLC (5) 245 Summer Street Boston, MA 02210 | 1,325,662 | 7.2% |
The Vanguard Group (6) 100 Vanguard Blvd. Malvern, PA 19355 | 1,203,150 | 6.5% |
Renaissance Technologies Holdings Corporation (7) 800 Third Avenue New York, NY 10022 | 1,184,344 | 6.4% |
D.E. Shaw & Co., L.P. (8) 1166 Avenue of the Americas, 9th Floor New York, NY 10036 | 930,920 | 5.1% |
| | | | | | | | |
Name and Address of Beneficial Owners | Amount and Nature of Beneficial Ownership(1) | Percent of Class(2) |
BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10005 | 2,434,852 | 18.7% |
The Vanguard Group(4) 100 Vanguard Blvd. Malvern, PA 19355 | 1,258,807 | 9.7% |
Dimensional Fund Advisors LP(5) Building One 6300 Bee Cave Road Austin, TX 78746 | 910,966 | 7.0% |
T. Rowe Price Associates, Inc.(6) 100 E. Pratt Street Baltimore, MD 21202 | 767,723 | 5.9% |
LSV Asset Management(7) 155 N. Wacker Drive, Ste 4600 Chicago, IL 60606 | 728,418 | 5.6% |
(1)As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. A person is deemed as of any date to have “beneficial ownership” of any security that such person has a right to acquire within 60 days.days of April 7, 2022. Any such security is deemed to be outstanding for purposes of calculating the ownership percentage of such person but is not deemed to be outstanding for purposes of calculating the ownership percentage of any other person. InformationUnless otherwise noted, information in the table is based on Schedule 13G or 13G/A filings reporting beneficial ownership as of December 31, 2018.2021.
(2)Percent of class is based on 18,384,835an expected 13.0 million shares of Company common stock outstanding at April 2, 2019.7, 2022.
(3)Shares over which BlackRock, Inc., registered investment advisor, has discretionary authority to buy, sell and vote, as reported in its Schedule 13G/A filed with the SEC on January 28, 2019.February 7, 2022.
(4) Shares over which The Vanguard Group, Inc., registered investment advisor, has discretionary authority to buy, sell and vote, as reported in its Schedule 13G/A filed with the SEC on February 10, 2022.
(4)
(5) Shares over which Dimensional Fund Advisors LP, registered investment advisor, has discretionary authority to buy, sell and vote, as reported in its Schedule 13G/A filed with the SEC on February 8, 2019.2022.
(5)(6) Shares over which FMR LLC, registered investment advisor, has discretionary authority to buy, sell and vote, as reported in its Schedule 13G/A filed with the SEC on February 13, 2019.
(6)Shares over which The Vanguard Group,T. Rowe Price Associates, Inc., registered investment advisor, has discretionary authority to buy, sell and vote, as reported in its Schedule 13G/A filed with the SEC on February 12, 2019.14, 2022.
(7)Shares over which Renaissance Technologies Holdings Corporation,LSV Asset Management, registered investment advisor, has discretionary authority to buy, sell and vote, as reported in its Schedule 13G filed with the SEC on February 12, 2019.11, 2022.
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(8)Shares over which D.E. Shaw & Co., L.P., registered investment advisor, has discretionary authority to buy, sell and vote, as reported in its Schedule 13G filed with the SEC on April 1, 2019.
Security Ownership of Directors and Executive Officers
The following table sets forth certain information concerning the beneficial ownership of our common stock expected as of April 2, 2019,7, 2022, by (i) each director or nominee (each of whom is currently a director), (ii) each of our current NEOs and (iii) all current directors and executive officers as a group.
| Number of Shares or Units | |
Beneficial Owner | Common Stock | Stock Equivalent Units | Options Exercisable Within 60 Days | Total Percent of Class |
Jane F. Aggers | 15,892 | 11,714 | 19,073 | * |
Scott J. Bowman | 15,811 | -- | -- | * |
Jared S. Briskin | 4,508 | -- | -- | * |
Anthony F. Crudele | 19,561 | 9,978 | -- | * |
Karen S. Etzkorn | -- | 16,337 | -- | * |
Terrance G. Finley | -- | -- | 76,002 | * |
James A. Hilt | -- | 5,543 | 27,733 | * |
Michael J. Newsome | 40,949 | 18,942 | -- | * |
Ralph T. Parks | 32,780 | -- | 5,000 | * |
Cathy E. Pryor | 12,673 | -- | -- | * |
Jeffry O. Rosenthal | 95,097 | -- | -- | * |
Alton E. Yother | -- | 21,780 | 15,000 | * |
| | | | |
All Directors and Executive Officers as a Group (12 Persons) | 237,271 | 84,294 | 142,808 | 2.5% |
* Less than one percent (1.0%) | | | | |
| | | | | | | | | | | | | | |
| Amount and Nature of Beneficial Ownership(1) | |
Name of Beneficial Owner | Common Stock | Stock Equivalent Units | Options Exercisable Within 60 Days | Total Percent of Class |
Ronald P. Blahnik | 33,206 | — | — | * |
Jared S. Briskin | 39,598 | — | — | * |
Ramesh Chikkala | — | — | — | * |
Anthony F. Crudele | 36,289 | — | — | * |
Karen S. Etzkorn | 2,380 | 9,104 | — | * |
Terrance G. Finley | — | — | 47,362 | * |
Dorlisa K. Flur | 600 | 7,935 | — | * |
James A. Hilt | 2,380 | 5,832 | 24,823 | * |
Linda Hubbard | 1,628 | — | — | * |
Jamere Jackson | — | 6,612 | — | * |
Michael E. Longo | 53,883 | — | — | * |
Lorna E. Nagler | 8,996 | — | — | * |
William G. Quinn | 11,507 | — | — | * |
Robert J. Volke | 5,508 | 8,000 | — | * |
Alton E. Yother | — | 32,607 | — | * |
Other Executive Officers (4 Persons) | 32,544 | — | — | * |
All Directors and Executive Officers as a Group (19 Persons) | 228,519 | 70,090 | 72,185 | 2.9% |
* Less than one percent (1.0%) | | | | |
(1) As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. Total percent of class is based on 18,384,835an expected 13.0 million shares of Company common stock outstanding at April 2, 2019.7, 2022. A person is deemed as of any date to have “beneficial ownership” of any security that such person has a right to acquire within 60 days.days of April 7, 2022 and includes stock equivalent units with vest dates within 60 days of April 7, 2022 and, in the case of our Directors, stock equivalent units that would vest upon their retirement from the Board.
HIBBETT® 2022 Proxy Statement - 74 -
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE,REPORTS, RELATED PERSON TRANSACTIONS AND LEGAL PROCEEDINGS
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors, and certain of our officers, and persons who beneficially own more than 10% of the Company’s common stock to file reports of stock ownership and changes in ownership (Forms 3, 4 and 5) in Hibbett, Sports, Inc. shares with the SEC. Based solely upon a review of copies of Forms 3, 4 and 5 for the fiscal year ended February 2, 2019,January 29, 2022, we believe that all our executive officers, Directors, greater than 10% beneficial owners, and other Section 16 officers complied with all filing requirements on a timely basis.basis, except for the Form 4’s filed by Mr. Briskin on March 11, 2021 and six of our Section 16 officers, which included Messrs. Briskin, Blahnik, Longo and Quinn and David Benck, our SVP and General Counsel, and Benjamin Knighten, our SVP of Store Operations, on April 12, 2021. All were inadvertently filed late due to administrative oversight.
Related Person Transactions
We have written procedures in place to identify material related party transactions, including a quarterly survey of senior management and other key employees. Potential related party transactions and relationships are evaluated quantitatively and qualitatively. Quarterly, as part of our Sarbanes-Oxley compliance, we consider all potential related party transactions and potential conflicts of interest. Information is gathered and maintained by our Vice President and Chief Accounting Officer and is communicated quarterly to the Audit Committee. Annually, a detailed Director and Officer’s (D&O) Questionnaire, is prepared and distributed to all Directors and executive officers. The D&O Questionnaire is certified by the Director or executive officer and reviewed by our General Counsel and/or Company counsel.
As prescribed in their Board-approved charter, the Audit Committee is responsible for reviewing and approving all related party transactions that are required to be disclosed under Item 404 of Regulation S-K. In addition, the Audit Committee and Board review related party transactions to ensure that prescribed levels of materiality are not violated, and independent judgment is not adversely affected.
The Company leases one store under a lease arrangement with Preferred Growth Properties, LLC (formerly AL Florence Realty Holdings 2010, LLC,LLC), a wholly-ownedwholly owned subsidiary of Books-A-Million, Inc., (BAMM) ("BAMM"). One of our Directors, Terrance G. Finley is an executive officer of BAMM. Minimum annual lease payments are $0.1 million, if not in co-tenancy, and the lease termination date is February 2022. In August 2021, the Company exercised an option to extend the term of the lease by five years, with the new term commencing on March 1, 2022 and terminating on February 28, 2027. The minimal annual lease payment of $0.1 million did not change. In Fiscal 2019, Fiscal 2018 and Fiscal 2017,2022, minimum annual lease payments were $0.1 million. Minimum annual lease
The Company honored certain contracts in place for its wholly owned subsidiary, City Gear, LLC, upon acquisition in Fiscal 2019. The following listing represents those contracts of which Michael E. Longo, the Company's President and CEO, has an interest in, either directly or indirectly.
T.I.G. Construction ("TIG")
TIG historically performed the majority of new store and store remodel construction for City Gear and is owned by a close relative of Mr. Longo. In Fiscal 2022, payments remaining under this lease at February 2, 2019to TIG for their services was $6.7 million.
Retail Security Gates, LLC ("RSG")
During the second quarter of Fiscal 2022, a close relative of Mr. Longo purchased a 50% interest in an existing Company vendor, which was reorganized as RSG. We utilize RSG for specially manufactured store front security gates. In Fiscal 2022, payments to RSG for their services were $0.3 million. We believe that
In addition to the termsrelated party interests listed above, Mr. Longo also had a membership interest in two contingent earnouts ("Earnouts") related to the acquisition of this lease are comparableCity Gear based on City Gear’s achievement of certain EBITDA
HIBBETT® 2022 Proxy Statement - 75 -
thresholds for the 52-weeks ended February 1, 2020 and January 30, 2021, respectively. The Earnouts were in addition to the aggregate consideration payable to the sellers of City Gear, LLC in November 2018.
Pursuant to the Membership Interest and Warrant Purchase Agreement dated October 29, 2018 and based on Fiscal 2021 financial results, former members and warrant holders of City Gear were entitled to a payment of $15.0 million in April 2021. Mr. Longo's share of the earnout payment was approximately 22.8% or more favorable than the terms that would have been obtained in an arms-length transaction with an unaffiliated party. The lease was filed as Exhibit 10.1 to our Annual Report on Form 10-K filed with the SEC on March 26, 2012.approximately $3.4 million.
The Board of Directors has determined that the relationshiprelationships described above doesdo not prejudice the independence of Mr. Finley or Mr. Longo as defined by the listing standards of the NASDAQNasdaq Stock Market. The Company did not have any loans or extensions of credit outstanding to any of its Directors or executive officers during Fiscal 2019.2022.
Legal Proceedings
As of the date of this filing, we are not aware of any pending legal proceedings in which any of our executive officers or members of our Board of Directors may have a material interest adverse to the Company.
AUDIT MATTERS
Audit Committee Report
The primary purpose of the Audit Committee is to assist the Board of Directors in its oversight of all material aspects of the accounting and financial reporting processes, internal controls and internal audit function of the Company, including its compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls and disclosure controls and procedures. The Audit Committee appoints and oversees the qualifications of the Company’s independent registered public accounting firm.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited consolidated financial statements, management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the independent registered public accounting firm’s evaluation of the Company’s system of internal control over financial reporting included in the Annual Report on Form 10-K with management and with the independent registered public accounting firm. The independent registered public accounting firm is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the consolidated financial statements. The Audit Committee discussed with KPMGErnst & Young LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board Auditing Standard No. 1301 (Communications with Audit Committees)(the “PCAOB”).
In addition, the Audit Committee has discussed with the independent registered public accounting firm their independence from management and our Company. The Audit Committee has received all written disclosures and letters from KPMGErnst & Young LLP required by the Public Company Accounting Oversight BoardPCAOB and discussed with KPMGErnst & Young LLP their independence. The Audit Committee also considered the compatibility of non-audit services with the independent registered public accounting firm’s independence.
The Audit Committee met with KPMGErnst & Young LLP, with and without management present, to discuss the results of its examinations, its evaluations of our internal controls and the overall quality of our financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board approved, that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019January 29, 2022 for filing with the Securities and Exchange Commission.
Submitted by the members of the Audit Committee of the Company’s Board of Directors:
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Alton EE. Yother, Chair; Jane F. Aggers;
Karen S. Etzkorn; James A Hilt; Ralph T. ParksEtzkorn, Dorlisa K. Flur, Linda Hubbard and Jamere Jackson
The Audit Committee report does not constitute soliciting material and shall not be deemed to be filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates the Audit Committee Report by reference therein.
Change of Independent Public Accounting Firm
The
As previously reported on the Company’s Current Report on Form 8-K, dated July 7, 2020, the Audit Committee ofconducted an evaluation to determine the Company’s Board of Directors is comprised of independent Directorsregistered public accounting firm for the Company’s fiscal year ending January 30, 2021. Several firms were invited to participate in this process, including KPMG LLP (“KPMG”), which served as required by the listing standards ofCompany’s independent registered public accounting firm since 2002.
On July 3, 2020, the NASDAQ Stock Market. The Audit Committee operates pursuantapproved the engagement of E&Y as our independent registered public accounting firm for the fiscal year ending January 30, 2021, and approved the dismissal of KPMG, which dismissal was effective as of July 3, 2020.
The reports of KPMG on the Company’s consolidated financial statements as of February 1, 2020, and the report of KPMG on the effectiveness of internal control over financial reporting as of February 1, 2020 did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles, except that KPMG’s report on the Company’s consolidated financial statements as of and for the year ended February 1, 2020, contained a written Charter adopted byseparate paragraph indicating that as discussed in Note 2 to the Boardconsolidated financial statements, the Company changed its method of Directors and is available at accounting for leases as of February 3, 2019, due to the adoption of Accounting Standards Update 2016-02, Topic 842, Leases.
hibbett.com under “Investor Relations.”
During the fiscal year ended February 1, 2020, and the subsequent interim period through July 3, 2020, there were no (i) disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures which, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference thereto in its report or (ii) “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
Fees Paid to Independent Registered Public Accounting Firm
The following table presents the aggregate fees billed by E&Y and KPMG LLP for professional services rendered in connection with the integrated audit of our annual consolidated financial statements set forth in our Annual ReportReports on Form 10-K for the fiscal years ended February 2, 2019January 29, 2022 and February 3, 2018,January 30, 2021, and the review of our quarterly condensed consolidated financial statements set forth in our Quarterly Reports on Form 10-Q for each of our quarters during the two fiscal years then ended as well as fees paid to KPMG LLP for audit-related work:
| | Fiscal Year | |
| | 2019 | | | 2018 | |
Audit fees | | $ | 1,119,773 | | | $ | 573,000 | |
Audit-related fees | | | 42,000 | | | | 40,000 | |
Tax fees | | | -- | | | | -- | |
All other fees | | | -- | | | | -- | |
Total fees paid to KPMG LLP | | $ | 1,161,773 | | | $ | 613,000 | |
(in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Fiscal 2022 | | Fiscal 2021 |
| | E&Y | KPMG | | E&Y | KPMG |
Audit fees(1) | | $1,397 | $54 | | $851 | $209 |
Audit-related fees(2) | | 39 | | 25 | | | 28 | | 25 | |
Tax fees(3) | | — | | — | | | — | | — | |
All other fees(4) | | 6 | | — | | | 2 | | — | |
Total fees | | $1,442 | $79 | | $881 | $234 |
(1) Audit Fees. Audit fees represent fees and out-of-pocket expenses for professional services provided in connection with the audit of our consolidated financial statements, including audit of the internal control over
HIBBETT® 2022 Proxy Statement - 77 -
financial reporting, the review of our quarterly condensed consolidated financial statements and audit services provided in connection with other statutory or regulatory filings.filings.
(2) Audit-Related Fees. Audit-related fees represent fees for assurance and related services that are traditionally performed by the independent registered public accounting firm, including fees related to employee benefit plan audits.
(3) Tax Fees. Tax fees typically include fees in the areas of tax compliance, tax planning and tax consultation. We do not generally request such services from our independent registered public accounting firm.
(4) All Other Fees. None. Other fees paid to E&Y in Fiscal 2022 consisted of an online subscription service. No other fees were paid to KPMG for the fiscal years ended January 29, 2022 and January 30, 2021.
Policy on Pre-Approval of Audit and Permissible Non-Audit Services
The Audit Committee is responsible for approving services and fees and overseeing the work of the independent registered public accounting firm (Auditors)(the “Auditors”). The Audit Committee has established pre-approval policies and procedures for all audit and permissible non-audit services provided by the Auditors.
Prior to engagement of the Auditors for the next year’s audit, a list of services and related fees expected during that year is presented to the Audit Committee for approval. The Audit Committee pre-approves these services, and the fees are budgeted.services. During the year, circumstances may arise when it may become necessary to engage the Auditors for additional services not contemplated in the original pre-approved budget. In those instances, the Audit Committee requires specific pre-approval before engaging the Auditors. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.
The Audit Committee has determined that the services rendered by our Auditors during our most recent fiscal year are compatible with maintaining their independence. Our Auditors did not perform any services that were not related to audit functions.
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PROPOSAL NUMBER 2
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We seek stockholder input into the selection of the independent registered public accounting firm (Independent Auditors)(the “Independent Auditors”). The firm of KPMG LLP (KPMG)E&Y has been selected by the Audit Committee to be our Independent Auditors for Fiscal 2020.2023.
Although we are not required to seek stockholder approval of this selection, the Board has determined it to be sound corporate governance practice to submit the selection of the Independent Auditors to a non-binding vote of our stockholders. The results of such vote could provide the Audit Committee with useful information about stockholder views on the Audit Committee’s choice of the Independent Auditors. If our stockholders disapprove of the selection of KPMG,E&Y, the Audit Committee will investigate the possible basis for the negative vote and will reconsider the selection of KPMG forE&Y. Even if the fiscalselection of E&Y is ratified, the Audit Committee, in its discretion, may still direct the appointment of a different independent registered public accounting firm at any time during the year ending January 30, 2021, sinceif it would be impracticable to replace our independent auditors so latedetermines that such a change is in our current fiscal year.the best interests of the Company.
Accordingly, we present the following advisory proposal for stockholder approval:
“Resolved, that the stockholders ratify the selection of KPMGE&Y as the Company’s Independent Auditors for Fiscal 2020.2023.”
Representatives of KPMGE&Y are expected to be present at the Annual Meeting to respond to appropriate questions and will have the opportunity to make a statement if they so desire. The Audit Committee selected KPMGE&Y as our Independent Auditors for Fiscal 20202023 at their March 19, 20191, 2022 meeting.
Vote Required
The proposed resolution will be deemed approved at the meeting, so long as a quorum is present, if it receives the affirmative vote of a majority of the shares of our common stock present, in person or by proxy, at the Annual Meeting and entitled to vote. Abstentions shall have the effect of a vote against the proposal. A broker or other nominee may generally vote on routine matters and, therefore, no broker non-votes are expected in connection with this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
THE RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF KPMGERNST & YOUNG LLP
AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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PROPOSAL NUMBER 3
APPROVAL OF EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act of 1934 requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding advisory basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. The Company asks that you cast an advisory vote FOR the compensation of the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K on pages 3840 to 47.71.
The Board of Directors is asking you to cast a non-binding advisory vote on the following resolution:
“RESOLVED, that the stockholders of Hibbett, Sports, Inc. (Company)(the “Company”) approve the compensation of the Company’s executive officers named in the Summary Compensation Table, as disclosed in the Proxy Statement for the 20192022 Annual Meeting of the Company’s stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis, the executive compensation tables and the related footnotes and narrative accompanying the tables).”
The Compensation Discussion and Analysis, beginning on page 25,40, describes the Company’s executive compensation programs and the compensation decisions made by the Compensation Committee and the Board of Directors in Fiscal 20192022 with respect to the Chief Executive Officer and the other officers named in the Summary Compensation Table on page 3855 (referred to as the “Named Executive Officers”). As described in detail in the Compensation Discussion and Analysis and highlighted in the section captioned “Executive Summary,Compensation,” the key principle underlying the Compensation Committee’s compensation philosophy is pay for performance. Of the total compensation awarded to the Company’s Named Executive Officers in Fiscal 2019, approximately 50% is performance-based, with incentive award payouts varying based on the Company’s business performance for both the cash bonus potential and equity award potential.pay-for-performance. We believe basing incentive payments on Company performance goals that are both short-term and long-term, promotes strong and consistent performance year after year.
For this reason, the Board is asking you to support this proposal. Because your vote is advisory, it will not be binding on the Board. However, the Board and the Compensation Committee will review the voting results in their entirety and take them into consideration when making future decisions regarding executive compensation.
Approval
So long as a quorum is present, the affirmative vote of a majority of the shares of our common stock present, in person or by proxy, at the Annual Meeting and entitled to vote is required to approve this non-binding proposal. Abstentions shall have the effect of a vote against the proposal. Although broker non-votes will be treated as present for purposes of determining whether there is a quorum, broker non-votes will not be counted for purposes of determining the number of votes present and entitled to vote with respect to the proposal and will not otherwise affect the outcome of the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION OF
THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DESCRIBED IN THIS PROXY STATEMENT.
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PROPOSAL NUMBER 4
55
APPROVAL OF THE HIBBETT, INC.
AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR EQUITY PLAN
Proposal
On March 2, 2022, the Board approved and adopted, subject to stockholder approval, the Hibbett, Inc. Amended and Restated Non-Employee Director Equity Plan (Director Equity Plan). The Director Equity Plan would amend and restate our existing Hibbett, Inc. 2012 Non-Employee Director Equity Plan (Original Plan) by extending the term of the Original Plan for an additional ten (10) years following the date the Director Equity Plan is approved by our stockholders and by making certain other amendments as described below in “Description of the Material Terms of the Director Equity Plan.” We request and recommend that our stockholders approve the Director Equity Plan.
Rationale for the Director Equity Plan
Our ability to create long-term value for our stockholders continues to depend on our ability to successfully execute our growth strategy, which largely depends on our ability to attract, motivate, and retain highly skilled individuals. Our compensation programs, including our ability to continue issuing equity-based awards to our non-employee Directors, play a key role in attracting, motivating and retaining talent.
We believe that the Company’s equity-based compensation practices, including the Director Equity Plan, reflect the Company’s commitments to pay competitively and to pay responsibly. Equity-based awards support our compensation strategy with respect to non-employee Directors by partially linking compensation with long-term stockholder value creation and motivating non-employee Directors to continue to create long-term stockholder value.
The primary objective of the Director Equity Plan is to permit the continued grant of equity-based awards to our non-employee Directors such that the Company can continue its compensation strategy with respect to non-employee Directors. Through the continued provision of equity-based awards to our non-employee Directors, the Director Equity Plan seeks to advance the interests of the Company and our stockholders by achieving a greater commonality of interests between our stockholders and our non-employee Directors and by enhancing the Company’s ability to retain and attract highly qualified non-employee Directors.
The Original Plan, which our stockholders adopted at the Company’s Annual Meeting of Stockholders on May 24, 2012, expires by its terms on May 24, 2022, the tenth anniversary of its effective date. Therefore, if our stockholders do not approve the Director Equity Plan, the Company will be unable to continue to issue equity-based awards to our non-employee Directors and will likely become reliant on cash awards. An inability to grant equity-based awards to our non-employee Directors would have significant negative consequences to the Company and our stockholders, including the following:
•Inhibit Alignment with our Stockholders. A key element of our compensation strategy for non-employee Directors is to pay a meaningful portion of compensation in the form of equity-based awards, which we believe further aligns the interests of our non-employee Directors and our stockholders and drives long-term value creation for the Company.
•Increased Cash Compensation. In order to attract and retain qualified non-employee Directors, we would likely be compelled to alter our compensation strategy with respect to non-employee Directors by increasing cash-based components of non-employee Director compensation, which would not provide the same benefits as equity-based awards and would limit cash available for other purposes.
If approved by our stockholders, the Director Equity Plan would allow the Company to continue its compensation strategy with respect to non-employee Directors on terms substantially similar to the Original Plan, as
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the material terms of the Director Equity Plan remain largely consistent with the Original Plan. For a description of the material terms of the Director Equity Plan, see “Description of the Material Terms of the Director Equity Plan” below.
Alignment with Sound Corporate Governance and Plan Design Practices
Through the Board’s adoption of the Director Equity Plan, we have sought to continue the objectives of the Original Plan and designed the Director Equity Plan in accordance with currently accepted corporate governance standards for the design and implementation of incentive and related compensation programs. Accordingly, the Director Equity Plan furthers a robust governance structure while further aligning the interests of our stockholders and our non-employee Directors. In particular, the Director Equity Plan contains provisions that the Board believes are consistent with the interests of our stockholders and sound corporate governance principles, including the following selected material features:
•The award of non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units is permitted.
•Stock options and stock appreciation rights cannot be repriced.
•Any material amendment to the Director Equity Plan is subject to approval by our stockholders.
•Shares of our common stock tendered or subject to withholding obligations in connection with an award will not be added back to the total number of shares of our common stock available for issuance under the Director Equity Plan.
•Shares of our common stock that we reacquire on the open market will not be added to the total number of shares of our common stock available for issuance under the Director Equity Plan.
•Awards granted under the Director Equity Plan are generally subject to certain restrictions and other limitations.
•No awards may be granted under the Director Equity Plan on or after May 25, 2032, the tenth anniversary of the effective date of the Director Equity Plan, assuming our stockholders approve the Director Equity Plan.
Description of the Material Terms of the Director Equity Plan
The following is a summary of the material terms of the Director Equity Plan. This description is qualified in its entirety by reference to the complete text of the Director Equity Plan, a copy of which is attached as Appendix B to this Proxy Statement and incorporated into this Proxy Statement by reference.
In addition to the extension of the term of the Original Plan, the Director Equity Plan includes the following proposed changes:
•Valuation. The fair market value of each share of our common stock underlying awards is based on the closing price per share on the first business day immediately preceding the date of grant, such that the value of an award is clearly determinable at the time of grant and not subject to same-day price fluctuations.
•Dividend Equivalent Rights. Award agreements in respect of awards of restricted stock units may provide for the accrual of dividend equivalent rights (whether in cash or additional restricted stock units), provided that any such dividend equivalent rights would only be paid if, when and to the extent the underlying restricted stock units vest.
HIBBETT® 2022 Proxy Statement - 82 -
•Repricing. Certain provisions are revised to more clearly establish that repricing of stock options and stock appreciation rights is prohibited.
Although not all of the proposed changes to the Original Plan are required to be approved by our stockholders, we have included these other amendments in a single amendment and restatement that we are submitting for stockholder approval at the Annual Meeting. If the Director Equity Plan is not approved by our stockholders, the Director Equity Plan will not become effective, the Original Plan will, until May 24, 2022, continue in effect, subject to its terms, conditions and limitations, using the shares of our common stock available for issuance thereunder, and thereafter we will not be able to issue equity-based awards to our non-employee Directors under the Original Plan.
The Director Equity Plan would continue to allow the Board to compensate non-employee Directors with a specified equity value rather than a specified number of securities. Non-employee Directors would be permitted to choose from the forms of equity-based awards that the Board may grant pursuant to the Director Equity Plan in advance of an award. Awards under the Director Equity Plan would be valued on the first business day immediately preceding the date of grant and could not exceed $150,000 for continuing non-employee Directors in any fiscal year; provided that an additional award with a value of up to $150,000 may be granted during a non-employee Director’s first year of service on the Board. Generally, non-employee Directors would also be permitted to defer the receipt of their equity awards under the Director Equity Plan as provided by the Board.
Subject to stockholder approval, the Director Equity Plan amends and restates the Original Plan and authorizes the issuance of an aggregate of 500,000 shares of our common stock for awards made on or after May 25, 2022, the effective date of the Director Equity Plan, assuming our stockholders approve the Director Equity Plan. As of March 31, 2022, approximately 79,000 shares of our common stock remain available for issuance under the Original Plan. For the avoidance of doubt, any shares of our common stock that remain available for grant under the Original Plan prior to the effective date of the Director Equity Plan will not increase the shares of our common stock available for issuance under the Director Equity Plan above 500,000 shares.
We expect that the shares of our common stock available for issuance under the Director Equity Plan, estimated using the current equity value retainers and price of our common stock, will last the full ten (10) years. The annual equity retainer for our non-employee Directors is currently $135,000 for the independent Chairman of the Board, $110,000 for our non-employee Directors (pro-rated for Directors who have not completed one year of service) and $75,000 for newly-appointed non-employee Directors, subject to review and adjustment from time to time by the Board. The number of shares awarded to non-employee Directors may also vary from year to year depending on the price of our common stock at the time grants are made and at the time shares are awarded. We discuss our compensation approach to non-employee Director compensation, including annual retainers, on page 35 of this Proxy Statement under “Compensation of Non-Employee Directors.”
Because the Original Plan expires on May 24, 2022, if our stockholders do not to approve the Director Equity Plan, thereafter we will not be able to issue equity-based awards to our non-employee Directors under the Original Plan. Elimination of equity-based awards to our non-employee Directors would require a corresponding increase in alternative forms of compensation, including cash compensation, which the Board believes would diminish the goal of requiring non-employee Directors to establish and maintain a meaningful equity ownership interest in the Company and aligning the long-term interests of non-employee Directors with those of the Company’s stockholders.
The Director Equity Plan permits the same forms of equity-based awards as the Original Plan, including stock options, stock appreciation rights, restricted stock and restricted stock units. The purpose of the Director Equity Plan is to promote our interests and the interests of our stockholders by attracting and retaining qualified and experienced individuals for service as non-employee Directors, and to motivate those individuals to exercise their best efforts on behalf of the Company.
ADMINISTRATION. The Director Equity Plan is administered by the Board. Subject to the terms and conditions of the Director Equity Plan, the Board is authorized to, among other things:
HIBBETT® 2022 Proxy Statement - 83 -
•determine those non-employee Directors who will be granted awards;
•determine whether, and to what extent, awards may be transferable by non-employee Directors to whom the Board has granted awards;
•determine whether an award is designated as a dollar value or in shares of our common stock;
•determine the amount and type of award to be granted to each non-employee Director;
•determine the terms and conditions of awards granted under the Director Equity Plan; and
•make all other determinations necessary or advisable to administer the Director Equity Plan.
STOCK OPTIONS. The Board may grant options to purchase shares of our common stock available for issuance under the Director Equity Plan. Any such options will be non-qualified stock options (for U.S. federal income tax purposes) and subject to a written award agreement. The purchase price per share of our common stock covered by an option may not be less than the fair market value of a share of our common stock on the first business day immediately preceding the date of the option grant, determined as the reported closing price of a share of our common stock on the Nasdaq Global Select Market on such business day. On March 31, 2022, the reported closing price of a share of our common stock on the Nasdaq Global Select Market was $44.34. If a non-employee Director elects to receive stock options as part of a dollar value award, the number of stock options granted to such non-employee Director will be equal to the designated dollar amount of the award divided by 33% of the fair market value of the underlying shares of our common stock on the first business day immediately preceding the date of grant. Stock options may be exercised only at such times and on such terms and conditions as may be specified by the Board in a non-employee Director’s award agreement. If the related award agreement so provides, a non-employee Director exercising a stock option may pay the purchase price through cash payments, by the delivery of shares of our common stock, by the net exercise of the options exercised or by such other methods of exercise as may be approved by the Board from time to time. Repricing of stock options after the date of grant is not permitted without prior stockholder approval.
STOCK APPRECIATION RIGHTS. The Board may award stock appreciation rights pursuant to the Director Equity Plan, and a non-employee Director may choose to receive stock appreciation rights as part of a dollar value award, alone or in tandem with stock options. The Board may impose such conditions upon the exercise of stock appreciation rights as it deems appropriate. When a stock appreciation right is exercisable, a non-employee Director may surrender all or a portion of his or her unexercised stock appreciation right and receive in exchange an amount equal to the excess of (i) the fair market value on the date of exercise of the common stock covered by the surrendered portion of the stock appreciation right over (ii) the fair market value of the common stock on the first business day immediately preceding the date the stock appreciation right was granted. Payment to the non-employee Director may be made in cash, shares of our common stock or a combination thereof. The Board may limit the amount that can be received when a stock appreciation right is exercised. Repricing of stock appreciation rights after the date of grant is not permitted without prior stockholder approval.
RESTRICTED STOCK. The Board may issue restricted stock pursuant to the Director Equity Plan. Any such issued shares of restricted stock may not be sold, transferred, pledged, or otherwise encumbered or disposed of until the restrictions on such shares specified in the related award agreement have lapsed or have been removed under the provisions of the Director Equity Plan, and if a non-employee Director holding restricted stock does not meet the required service period or does not meet other criteria specified in the related award agreement, such non-employee Director will forfeit any shares of restricted stock on which the restrictions have not lapsed or have not been otherwise removed. The Board establishes as to each share of restricted stock issued under the Director Equity Plan the terms and conditions upon which the restrictions on such shares shall lapse. Such terms and conditions may include, without limitation, the lapsing of such restrictions at the end of a specified period of time, or as a result of the disability, death or retirement of the recipient. A non-employee Director has the right to receive his or her
HIBBETT® 2022 Proxy Statement - 84 -
allocable share of any cash dividends declared and paid in respect of his or her restricted stock, but only if, when and to the extent the restricted stock vests, and may vote his or her shares of restricted stock.
RESTRICTED STOCK UNITS. The Board may award restricted stock units pursuant to the Director Equity Plan. A restricted stock unit represents the right to receive one share of our common stock (or the fair market value thereof) upon the expiration of a restriction period specified by the Board in the related award agreement. The Board may condition the expiration of any such restriction period upon the non-employee Director’s continued service over a period of time or any other criteria as determined by the Board and specified in the related award agreement. During any such restriction period, the non-employee Director will have no rights as a stockholder with respect to the shares of our common stock underlying the restricted stock units. An award agreement granting restricted stock units may provide for the accrual of dividend equivalent rights, whether in cash or additional restricted stock units, provided that any such dividend equivalent rights will be paid to the non-employee Director only if, when and to the extent that the underlying restricted stock units vest.
AWARD LIMITS. Subject to adjustments that the Board may make upon future stock splits, share dividends and certain other transactions:
•The maximum number of shares of our common stock that may be issued in conjunction with awards granted under the Director Equity Plan is 500,000 shares. For the avoidance of doubt, any shares of our common stock that remain available for grant under the Original Plan prior to the effective date of the Director Equity Plan will not increase the shares of our common stock available for issuance under the Director Equity Plan above 500,000 shares.
•The value of awards to continuing non-employee Directors may not exceed $150,000 in any fiscal year.
•During a non-employee Director’s first year of service on the Board, an additional award with a value of up to $150,000 may be made to such non-employee Director.
The Board is empowered to set initial and annual awards at amounts less than the maximum levels described above.
ELIGIBLE DIRECTORS. All nine of our non-employee Directors are eligible to participate in the Director Equity Plan. No awards under the Director Equity Plan may be made to executive officers or other Company employees, even if they also serve on the Board.
OTHER TERMS AND CONDITIONS. Generally, awards may only be transferred upon death, but the Board may provide for broader transferability in the related award agreement. The Board also has the authority to determine the vesting and expiration of the awards.
SHARES TO BE ISSUED UNDER THE PLAN. The maximum number of shares of our common stock that may be issued in conjunction with awards granted under the Director Equity Plan on or after the effective date thereof is 500,000. For the avoidance of doubt, any shares of our common stock that remain available for grant under the Original Plan prior to the effective date of the Director Equity Plan will not increase the shares of our common stock available for issuance under the Director Equity Plan above 500,000 shares. The Board may, however, adjust this maximum amount to account for any future stock split, reverse stock split, stock dividend, combination, or reclassification of common stock or any similar transaction effected for which we do not receive any payment. When an award is forfeited or lapses without the delivery of shares, the shares of our common stock underlying the forfeited or lapsed award will again be available for future awards under the Director Equity Plan. Shares of our common stock tendered in payment for the exercise price or the related withholding obligation will not be available for future awards under the Director Equity Plan. No awards may be made on or after May 25, 2032, the tenth anniversary of the effective date of the Director Equity Plan, assuming our stockholders approve the Director Equity Plan.
HIBBETT® 2022 Proxy Statement - 85 -
The potential dilution from the proposed share authorization under the Director Equity Plan is 3.8%, based on the total number of shares of our common stock outstanding as of March 31, 2022. Our average share usage rate over the three years ended January 29, 2022, calculated as equity-based awards granted under the Original Plan for the relevant year, divided by the weighted average shares of common stock outstanding for that year, was 0.32%.
CHANGE OF CONTROL. In the event of a Change of Control (as defined below) of the Company, the Board has discretion to accelerate the vesting or exercisability of any awards and to cash-out any and all outstanding awards, subject to the Board’s good faith determination and limitations imposed by the Internal Revenue Code of 1986, as amended. The Board also has the right to substitute or assume awards in connection with mergers, reorganizations, or certain other transactions.
For purposes of the Director Equity Plan, a “Change of Control” means: (i) the sale, lease, exchange or other transfer of all or substantially all of the assets of the Company (in one transaction or in a series of related transactions) to a corporation that is not controlled by the Company, (ii) the approval by our stockholders of any plan or proposal for the liquidation or dissolution of the Company, (iii) a successful tender offer for our common stock, after which the bidding party holds more than 50% of our issued and outstanding common stock, or (iv) a merger, consolidation, share exchange, or other transaction to which the Company is a party and pursuant to which the holders of all of the shares of our common stock outstanding prior to such transaction do not hold, directly or indirectly, more than 50% of the outstanding shares of the surviving company after the transaction.
AMENDMENT. Generally, the Board may amend or terminate the Director Equity Plan at any time. We must obtain stockholder approval for any change that would require such approval under the listing standards of the Nasdaq Stock Market and any other legal, regulatory or tax requirement with which the Board must comply. However, no rights under an outstanding award may be impaired by such action without the consent of a non-employee Director holding an affected award.
Text of the Director Equity Plan
The preceding summary of the material terms of the Director Equity Plan is qualified in its entirety by reference to the complete text of the Director Equity Plan, a copy of which is attached as Appendix B to this Proxy Statement and incorporated into this Proxy Statement by reference. This Proxy Statement, as filed with the SEC on April 15, 2022, and our other filings made with the SEC from time to time may be found through our corporate website at www.hibbett.com by clicking “Investor Relations” under the “Corporate” menu selection.
United States Federal Income Tax Consequences of Awards Under the Director Equity Plan
The U.S. federal income tax consequences of participation in the Director Equity Plan we are submitting for approval are complex and subject to change. The following discussion, which has been prepared by our counsel, Bass, Berry & Sims PLC, is only a summary of the general rules applicable to the Director Equity Plan, and not a complete description of the U.S. federal income tax aspects. The summary is based on current provisions of the Internal Revenue Code of 1986, as amended (Code), and does not cover any state or local tax consequences of participation in the Director Equity Plan. Participants should consult their own tax advisors since a taxpayer’s particular situation could result in some variation of the rules described below.
NON-QUALIFIED OPTIONS. The grant of a non-qualified option (NQO) will not result in taxable income to the participant. The participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired over the exercise price for those shares, and the Company will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.
STOCK APPRECIATION RIGHTS. The grant of a stock appreciation right (SAR) will not result in taxable income to the participant. Upon exercise of an SAR, the amount of cash or the fair market value of shares received will be taxable to the participant as ordinary income, and a corresponding deduction will be allowed to the
HIBBETT® 2022 Proxy Statement - 86 -
Company. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.
RESTRICTED STOCK. A participant who has been granted a restricted stock award will not realize taxable income at the time of grant, and the Company will not be entitled to a deduction at that time, assuming that the restrictions constitute a “substantial risk of forfeiture” for U.S. federal income tax purposes. Upon the vesting of shares subject to an award, the holder will realize ordinary income in an amount equal to the then fair market value of those shares (less the amount paid, if any, for such shares), and the Company will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of vesting.
A participant may elect, pursuant to Section 83(b) of the Code, to have the income recognized and measured at the date of grant of restricted stock and to have the applicable capital gain holding period commence as of that date. If a Section 83(b) election is made, the Company will be entitled to a corresponding deduction at the time of grant. Making a Section 83(b) can have adverse tax consequences in some circumstances, and participants should consult with their individual tax advisors prior to making any such election.
RESTRICTED STOCK UNITS. A participant who has been granted restricted stock units will not realize taxable income at the time of grant, and the Company will not be entitled to a deduction at that time. The participant will have compensation income at the time of the shares subject to the restricted stock unit award are made available to the participant in an amount equal to the cash and the then fair market value of the distributed shares, and the Company will have a corresponding deduction.
CODE SECTION 409A. A participant who is offered a choice among the forms of awards offered under the Director Equity Plan may be required to comply with the provisions of Section 409A of the Code. If applicable, Section 409A of the Code requires a participant to make an election prior to the calendar year for which the award is earned regarding: (i) the form of the award selected and (ii) the settlement terms relating to the award.
Benefits to Non-Employee Directors
All 500,000 shares of our common stock that may be issued in conjunction with awards granted under the Director Equity Plan will be allocated to non-employee Directors. No awards under the Director Equity Plan may be made to executive officers or other Company employees, even if they also serve on the Board. Our non-employee Directors are the only participants in the Director Equity Plan and accordingly have a significant interest in the approval of this proposal.
Currently, all of our non-employee Directors participate in the Original Plan and are eligible to participate in the Director Equity Plan should our stockholders approve the Director Equity Plan. Future awards under the Director Equity Plan will be made at the Board’s discretion subject to the terms and conditions of the Director Equity Plan, including limitations on the value of equity-based awards granted to non-employee Directors in any fiscal year. Accordingly, future awards under the Director Equity Plan are not determinable at this time but in no event shall the value of any such future awards exceed $150,000 in any fiscal year for continuing non-employee Directors; provided that a non-employee Director may receive an additional award with a value of up to $150,000 during his or her first year of service on the Board.
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The table below sets forth the value of awards to non-employee Directors under the Original Plan during the most recent fiscal year.
| | | | | | | | | | | | | | | | | | | | | | | |
| 2012 Non-Employee Director Equity Plan |
| Fiscal 2022 Awards |
Non-Employee Director | Stock Options(1) | | Restricted Stock(2) | | SARs(3) | | RSUs(4) |
Jane F. Aggers | $— | | $— | | $— | | $110,000 |
Anthony F. Crudele | $— | | $— | | $— | | $135,000 |
Karen S. Etzkorn | $— | | $— | | $— | | $110,000 |
Terrance G. Finley | $110,000 | | $— | | $— | | $— |
Dorlisa K. Flur | $— | | $— | | $— | | $110,000 |
James A. Hilt | $— | | $— | | $— | | $110,000 |
Linda Hubbard | $— | | $— | | $— | | $75,000 |
Jamere Jackson | $— | | $— | | $— | | $74,945 |
Lorna E. Nagler | $— | | $— | | $— | | $110,000 |
Alton E. Yother | $— | | $— | | $— | | $110,000 |
All Non-Employee Directors as a Group | $110,000 | | $— | | $— | | $944,945 |
(1) Mr. Finley received in Fiscal 2022 4,384 stock options in the corresponding value above.
(2) No non-employee Director chose restricted stock as their form of annual equity award in Fiscal 2022.
(3) The Company does not currently offer SARs as an option for the annual equity award to non-employee Directors.
(4) With the exception of Mr. Finley, all our non-employee Directors chose to receive restricted stock units as their form of equity in Fiscal 2022. Mr. Crudele received 1,776 restricted stock units in the corresponding value above. Ms. Aggers, Ms. Etzkorn, Ms. Flur, Mr. Hilt, Ms. Nagler and Mr. Yother received 1,447 restricted stock units in each case in the corresponding value above. Mr. Jackson received 986 restricted stock units in the corresponding value above. Ms. Hubbard received 790 restricted stock units in the corresponding value above.
See “Compensation of Non-Employee Directors” on page 35 of this Proxy Statement for detailed information on non-employee Director compensation during the most recent fiscal year.
Approval
The Director Equity Plan will be approved, so long as a quorum is present, if it receives the affirmative vote of a majority of the shares of our common stock present, in person or by proxy, at the Annual Meeting and entitled to vote. Abstentions shall be deemed a vote against this proposal. In contrast, broker non-votes are not counted as present and entitled to vote on the proposal for purposes of determining if the proposal receives an affirmative vote of a majority of the shares present and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF
THE HIBBETT, INC. AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR EQUITY PLAN.
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PROPOSAL NUMBER 5
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK
FROM 80,000,000 TO 160,000,000
Proposal
We are currently authorized to issue an aggregate of 81,00,000 shares of capital stock, consisting of 80,000,000 shares of common stock and 1,000,000 million shares of preferred stock, $0.01 par value per share (the preferred stock). The Board of Directors approved, and recommends that our stockholders approve, an amendment to the first paragraph of ARTICLE FOURTH of our Certificate of Incorporation, as amended (the Certificate of Incorporation) to increase the number of authorized shares of common stock from 80,000,000 to 160,000,000 (the Charter Amendment). The authorized preferred stock would remain 1,000,000 shares. The Charter Amendment will increase the aggregate number of shares of all classes of capital stock that the Company may issue to 161,000,000 shares.
Shares that have already been issued are referred to as “issued” or “issued and outstanding.” The difference between the total number of authorized shares and the number of issued shares is the number of shares that we may issue in the future without amending the Certificate of Incorporation. Delaware law and the rules and regulations of the Nasdaq Stock Market may require stockholder approval of issuances of shares of capital stock under certain circumstances.
As of March 31, 2022, our total number of shares of common stock outstanding on a fully diluted basis (including restricted stock awards and assuming that all outstanding stock options were exercised, all restricted stock units were vested, and all performance share units were vested) is 15,963,934 as reflected in the table below:
| | | | | |
| Number of Shares |
Common shares outstanding | 13,013,772 | |
Common shares issuable upon exercise of outstanding options | 152,305 | |
Common shares issuable upon vesting of outstanding RSUs | 592,390 | |
Common shares issuable upon vesting of outstanding PSUs(1) | 72,470 | |
Common shares available for future issuance under equity plans(2) | 2,132,997 | |
Fully Diluted | 15,963,934 | |
(1) Represents target number of PSUs that may be awarded if specified targets and service periods are met. The actual amount awarded may be more or less than this amount.
(2) Assumes that the Amended and Restated Non-Employee Director Equity Plan is approved by our stockholders.
Accordingly, as of March 31, 2022, the total number of shares of common stock that were authorized, but not outstanding or reserved for issuance or held in treasury, was approximately 37.3 million. The Board believes it is in the best interests of the Company and our stockholders to increase our authorized shares of common stock in order to have additional shares available for use as the Board deems appropriate or necessary for future corporate needs.
Description of the Charter Amendment
The proposed amendment to the first paragraph of ARTICLE FOURTH of the Certificate of Incorporation, if approved by stockholders, would replace the first paragraph of such article with the following:
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“FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is 161,000,000 shares, consisting of 160,000,000 shares of Common Stock, par value $0.01 per share (the “Common Stock”), and 1,000,000 shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”).”
Except for the amendment described above, no other changes are being made to the Certificate of Incorporation. The full text of the Certificate of Incorporation, a copy of which is filed as Exhibit 3.1 to our Current Report on Form 8-K, as filed with the SEC on May 31, 2012, as amended by that certain Certificate of Amendment to the Certificate of Incorporation, a copy of which is filed as Exhibit 3.1 to our Current Report on Form 8-K, as filed with the SEC on June 24, 2021, is incorporated into this Proxy Statement by reference.
Rationale for the Charter Amendment
The purpose of the proposal to adopt the Charter Amendment to increase the number of authorized shares of common stock is to provide the Company with greater flexibility in considering and planning for future business and financial needs. We believe that it is advantageous for us to have the ability to act promptly with respect to potential opportunities and that the proposed increase in the number of authorized shares of common stock is desirable in order to have the additional shares available, as needed, for possible financing transactions, future stock splits, strategic transactions or other general corporate purposes that are determined by the Board to be in the best interests of the Company and our stockholders. Having such additional authorized shares of common stock available for issuance in the future would better position us to take timely advantage of market conditions and would enable us to issue shares of common stock or other securities exercisable, exchangeable or convertible into common stock, without the expense and delay of a stockholders’ meeting, except as may be required by applicable law or regulations. The Board will determine the terms of any issuance of the additional shares of common stock.
At present, we have no definitive plans, understandings, agreements or arrangements to issue additional shares of newly authorized common stock for any purpose, other than in the ordinary course of business pursuant to our outstanding equity incentive plans; however, we believe that the adoption of the Charter Amendment will enable us to promptly and appropriately respond to business opportunities, to raise additional equity capital or to declare stock splits and stock dividends. Given the number of shares of common stock currently available for issuance, the Company may not be able to effect these business opportunities without first obtaining stockholder approval for an increase in the number of authorized shares of common stock. The cost, prior notice requirements and delay involved in obtaining stockholder approval at the time that corporate action may become necessary could eliminate the opportunity to effect the action or reduce the expected benefits.
The proposed amendment will not have any immediate effect on the rights of existing stockholders. If the amendment is approved, except as may be required by applicable law or by the rules of Nasdaq Stock Market or of any stock exchange on which our securities may be listed, the additional shares of common stock proposed to be authorized, together with existing authorized and unissued shares of common stock, generally will be available for issuance without any requirement for further stockholder approval. Future issuances of shares of common stock or securities convertible into or exchangeable for common stock could have a dilutive effect on our earnings per share, book value per share and the voting power and interest of current stockholders. The Board has no current plans to do so; however, shares of common stock could be issued in various transactions that would make a change in control of the Company more difficult or costly and, therefore, less likely. Although we could theoretically use the additional shares to make more difficult or to discourage an attempt to acquire control of the Company, the proposed amendment is not the result of any specific effort to obtain control of the Company by a tender offer, proxy contest or otherwise, and we have no present intention to use the increased shares of authorized common stock for anti-takeover purposes.
If the stockholders approve the proposed amendment, it will become effective upon the filing of a certificate of amendment setting forth the terms of the Charter Amendment with the Secretary of State of the State of Delaware. The additional shares of common stock authorized by the proposed Charter Amendment, if and when issued, would have the same rights and privileges as the shares of common stock currently authorized. The common stock has no preemptive rights to purchase common stock or other securities. In addition, our Certificate of Incorporation does not provide dissenters’ or appraisal rights to our stockholders in connection with the proposed
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increase in the number of authorized shares of common stock. The Board reserves the right to abandon or delay the filing of the Charter Amendment even if it is approved by our stockholders.
Approval
Proposal Number 5 will be approved if it receives the affirmative vote from the holders of a majority of our outstanding common stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as votes against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
THE AMENDMENT TO OUR CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM 80,000,000 TO 160,000,000.
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PROPOSAL NUMBER 6
APPROVAL OF AN AMENDMENT TO THE
HIBBETT, INC. 2016 EXECUTIVE OFFICER CASH BONUS PLAN
Proposal
On April 1, 2022, the Board approved and adopted, subject to stockholder approval, an amendment (the “Cash Bonus Plan Amendment”) to the Hibbett, Inc. 2016 Executive Officer Cash Bonus Plan (the “Cash Bonus Plan”). The Cash Bonus Plan Amendment would increase the amount of an incentive bonus payable to an eligible executive officer under the Cash Bonus Plan from $1,000,000 during any fiscal year to an amount not to exceed two times (2x) the Target Incentive Bonus Percentage (as defined below) multiplied by an eligible executive’s Base Salary (as defined below) during any fiscal year. We request and recommend that our stockholders approve the Cash Bonus Plan Amendment. All capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Cash Bonus Plan.
Description of the Cash Bonus Plan Amendment
The proposed Cash Bonus Plan Amendment, if approved by stockholders, would do the following:
Section 1 of the Cash Bonus Plan would be amended to add the following definitions in appropriate alphabetical order and, as applicable, reordering and renumbering the existing defined terms:
“Base Salary” means the aggregate base annualized salary of an Eligible Executive from the Company and all affiliates of the Company at the time the Eligible Executive is eligible to receive an Incentive Bonus for the current fiscal year, exclusive of any commissions or other actual or imputed income from any Company provided benefits or perquisites, but prior to any reductions for salary deferred pursuant to any deferred compensation plan or for contributions to a plan qualifying under Section 401(k) of the Code or contributions to a cafeteria plan under Section 125 of the Code.
“Target Incentive Bonus Percentage” means the fixed target bonus percentage (e.g., as a percent of Base Salary) determined by the Committee for each Eligible Executive.
Section 4(c) of the Cash Bonus Plan would be replaced in its entirety with the following:
“c. The Incentive Bonus payable to an Eligible Executive with respect to any fiscal year shall not exceed two times (2x) the Target Incentive Bonus Percentage multiplied by an Eligible Executive’s Base Salary for such fiscal year; provided, however, that the maximum Incentive Bonus payable to any individual who becomes an Eligible Executive after the end of the 90-day period referred to in subsection (a) of this Section shall be reduced on a pro rata basis for the number of days during the fiscal year that the individual was not designated as an Eligible Executive.”
Except for the amendments described above, no other changes are being made to the Cash Bonus Plan.
The full text of the Cash Bonus Plan, a copy of which is filed as Exhibit 10.10 to our Annual Report on Form 10-K for the fiscal year ended January 29, 2022, as filed with the SEC on March 25, 2022, is incorporated into this Proxy Statement by reference. A description of the material terms of the Cash Bonus Plan (except as modified by the Cash Bonus Plan Amendment described above) is included in our definitive proxy statement for the 2016 annual meeting of stockholders, as filed with the SEC on April 21, 2016, which is incorporated into this Proxy Statement by reference.
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Rationale for the Cash Bonus Plan Amendment
We believe that our future success and our ability to remain competitive are dependent on our continuing efforts to attract, retain and motivate highly qualified personnel. Competition for these people in our industry is intense. The purpose of the Cash Bonus Plan is to enhance the Company’s ability to attract and retain highly qualified executives and to provide additional short-term financial incentives to those executives to promote our Company’s success.
The maximum Incentive Bonus that may be payable to any Eligible Executive under the Cash Bonus Plan is currently $1,000,000. That amount has not been increased since the adoption of the Company’s original executive officer cash bonus plan in 2006 and was not increased when the Cash Bonus Plan was adopted in 2016. Based on our review of market data, we believe that the proposed increase in the maximum Incentive Bonus payable to an Eligible Executive is reasonable and in line with compensation practices at our peer companies. We believe the proposed increase is necessary in order to adequately compensate our executive officers and remain competitive for highly qualified personnel. If stockholders do not approve the Cash Bonus Plan Amendment, the Board will reevaluate the appropriate means to provide short-term annual incentive compensation opportunities to our executive officers.
In addition, for Fiscal 2022, our Chief Executive Officer, Mr. Longo, would have received a cash bonus of $1,400,000 (or 200% of Mr. Longo’s base salary) based on pre-established performance goals for the Company. However, because the Cash Bonus Plan is limited to a $1,000,000 annual Incentive Bonus, Mr. Longo only received $1,000,000 of such award. If the Cash Bonus Plan Amendment is approved by our stockholders, the Company intends to award the remaining $400,000 of Incentive Bonus to Mr. Longo promptly following the effectiveness of such amendment. If stockholders do not approve the Cash Bonus Plan Amendment, Mr. Longo will not be awarded his Incentive Bonus under the Cash Bonus Plan that is in excess of the current maximum amount; however, the Compensation Committee retains discretion to consider other forms of awards, as necessary, to remain competitive for talent and reward exceptional performance.
New Plan Benefits
Except for the amount that will be payable to Mr. Longo as described above, because participants are selected annually for each performance period and because amounts payable under the Cash Bonus Plan are based on performance measures, performance goals, and award formulas established for each performance period, it cannot be determined at this time what amounts, if any, will be received by or allocated to any person or group of persons under the Cash Bonus Plan, as amended by the Cash Bonus Plan Amendment, if approved by the stockholders. If the Cash Bonus Plan, as amended by the Cash Bonus Plan Amendment, had been in effect for Fiscal 2022, the Company expects that, except for Mr. Longo, its award grants for Fiscal 2022 would not have been different from those actually made in that year under the Cash Bonus Plan.
The cash bonus awards earned under the Cash Bonus Plan for Fiscal 2022, Fiscal 2021 and Fiscal 2020 by our named executive officers are set forth under the heading “Non-Equity Incentive Plan Compensation” in the “Summary Compensation Table”on page 55 of this Proxy Statement. Further information regarding awards to, and payout of, performance-based compensation to our named executive officers is set forth under the heading “Annual Cash Compensation—Short-Term Incentive Compensation (Cash Bonus)” on page 46 of this Proxy Statement in the “Compensation Discussion and Analysis.”
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Approval
The Cash Bonus Plan Amendment will be approved, so long as a quorum is present, if it receives the affirmative vote of a majority of the shares of our common stock present, in person or by proxy, at the Annual Meeting and entitled to vote. Abstentions shall be deemed a vote against this proposal. Although broker non-votes will be treated as present for purposes of determining whether there is a quorum, broker non-votes will not be counted for purposes of determining the number of votes present and entitled to vote with respect to the proposal and will not otherwise affect the outcome of the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
THE APPROVAL OF AN AMENDMENT TO THE
HIBBETT, INC. 2016 EXECUTIVE OFFICER CASH BONUS PLAN.
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OTHER BUSINESS
Our Board of Directors knows of no other matters to be brought before the 20192022 Annual Meeting other than as described in this Proxy Statement. However, if any other matters are properly brought before the meeting, the proxies named on the proxy card, or their substitutes, if any, will vote in accordance with their best judgment on such matters.
Submission of Stockholder Proposals for the 20192022 Annual Meeting of Stockholders
How can stockholders submit a proposal for inclusion in our Proxy Statement for the 20192023 Annual Meeting of Stockholders? To be included in our Proxy Statement for the 20202023 Annual Meeting, stockholder proposals must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and be received at our corporate offices no later than December 30, 2019.15, 2022.
How can stockholders submit proposals to be raised at the 20202023 Annual Meeting that will not be included in our Proxy Statement for the 20192022 Annual Meeting? To be raised at the 20202023 Annual Meeting, stockholder proposals must comply with our Bylaws. Our Bylaws provide that written notice of a stockholder proposal (other than a nomination proposal) must be received not less than 120 days, nor more than 150 days before the first anniversary of the date of the Company’s Proxy Statement in connection with the prior Annual Meeting of Stockholders. Since this Proxy Statement is being mailedmade available to you on or about April 23, 2019,15, 2022, stockholder proposals must be received at our principal executive offices between November 25, 201915, 2022 and December 30, 201915, 2022 in order to be raised at our 20202023 Annual Meeting (assuming the date of such meeting does not change by more than 30 days from the anniversary date of this year’s Annual Meeting).
What if the date of the 20202023 Annual Meeting is advanced or delayed by a certain period of time after the anniversary of this year’s Annual Meeting? Under Rule 14a-8 of the Securities Exchange Act of 1934, as amended, if the date of the 20202023 Annual Meeting changes by more than 30 days from the anniversary date of this year’s Annual Meeting, to be included in next year’s Proxy Statement, stockholder proposals must be received by us within a reasonable time before our solicitation is made.
However, under our Bylaws, if the date of the 20202023 Annual Meeting has changed by more than 30 days prior to the anniversary date of this year’s Annual Meeting, stockholder proposals to be brought before the 20202023 Annual Meeting must be delivered not less than 90 days before the date of the 20202023 Annual Meeting.
Does a stockholder proposal require specific information? In accordance with our Bylaws, each written notice related to stockholder proposals must contain a complete list of all matters intended to be brought before the meeting. In addition, a brief description of any proposal, and the complete text of any resolutions to be presented, including the reasons for making a proposal must be contained in the notice. Certain informational requirements regarding proposing stockholders and any beneficial owner on whose behalf a stockholder proposal is made must also be included. Please refer to our Bylaws, which were filed as Exhibit 3.2 to our Current Report on Form 8-K on June 3, 2010,24, 2021, for a more detailed description regarding these procedures.
Can stockholders make nominations for the election of directors? Nominations for the election of directors may be made by any stockholder entitled to vote in the election of directors generally, provided that the notice requirements contained in our Bylaws are met. For the 20202023 Annual Meeting, written notice regarding such nominations must be made at least 120 days in advance of such meeting. Certain informational requirements regarding nominating stockholders and any beneficial owner on whose behalf a nomination is made will apply. Stockholder nominee information must be provided, including, but not limited to, that which would be required by the federal securities laws in connection with the solicitation of proxies and any related party transactions or arrangements occurring within the past three years that each nominee has had or has with the nominating stockholder or any beneficial owner on whose behalf the nomination is made. Please refer to our Bylaws, which were filed as Exhibit 3.2 to our Current Report on Form 8-K on June 3, 2010,24, 2021, for a more detailed list of the requirements related to the submission of stockholder nominations.
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In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules (effective for annual meetings after August 31, 2022), stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 26, 2023.
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