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SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant
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| Definitive Proxy Statement |
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| Definitive Additional Materials |
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| Soliciting Material Pursuant to §240.14a-12 |
L Brands, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Bath & Body Works, Inc. |
(Name of Registrant as Specified In Its Charter) |
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Annual Meeting of Stockholders
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 19, 2016:12, 2022: The proxy statement and annual report to stockholders are available atwww.proxyvote.com.www.proxyvote.com.
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April 8, 2016
DEAR STOCKHOLDERMarch 31, 2022
DEAR STOCKHOLDER OF BATH & BODY WORKS, INC.:
You are cordially invited to attend our 20162022 annual meeting of stockholders to be held at8:30 a.m., Eastern Time, on May 19, 2016,12, 2022, at our offices located at ThreeSeven Limited Parkway, Columbus,Reynoldsburg, Ohio 43230. 43068. The 2022 annual meeting of stockholders will be our first meeting since we completed the successful separation of L Brands, Inc. into Bath & Body Works, Inc. and Victoria’s Secret & Co. in August 2021.
Our Investor Relations telephone number is (614) 415-7585 should you require assistance in finding the location of the meeting. The formal Notice of Annual Meeting of Stockholders and proxy statement are attached. If you plan to attend, please bring the Admittance Slip located at the back of this booklet and a picture I.D., and review the attendance information provided.
IWe hope that you will be able to attend and participate in the
meeting, at which time I will have the opportunity to review the business and operations of our company.meeting.
The matters to be acted upon by our stockholders are discussed in the Notice of Annual Meeting of Stockholders. It is important that your shares be represented and voted at the meeting. Accordingly, after reading the attached proxy statement,
would youplease kindly sign, date and return the enclosed proxy card or vote by telephone or via the Internet as described on the enclosed proxy card. Your vote is important regardless of the number of shares you own.
Sincerely yours, | | | |
Sincerely yours,
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/s/ Leslie H. Wexner
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Leslie H. Wexner
Sarah E. Nash | | | Andrew M. Meslow |
Chairman of the Board
Executive Chair | | | Chief Executive Officer |
We are continuing to monitor the public health and travel concerns relating to COVID-19 and the related recommendations and protocols issued by federal, state and local governments. In the event that it is not possible or advisable to hold our annual meeting at the time, date and place as originally planned, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication or adjourning or postponing the meeting. Any such change, including details on how to participate in a remote meeting, would be announced in advance via press release, a copy of which would be filed with the Securities and Exchange Commission as additional proxy solicitation materials and posted on our website at http://www.bbwinc.com. Please check this website in advance of the meeting date if you are planning to attend in person.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May
19, 2016April 8, 2016
TO12, 2022
March 31, 2022
TO THE
STOCKHOLDERS STOCKHOLDERS OF L BRANDS, INC. BATH & BODY WORKS, INC.:
We are pleased to invite you to attend our
20162022 annual meeting of stockholders
to:to be held at 8:30 a.m. Eastern Time, on May 12, 2022, at our offices located at Seven Limited Parkway, Reynoldsburg, Ohio 43068. At the 2022 annual meeting of stockholders, you will vote on the following items of business:Elect the threenine nominees proposed by the Board of Directors as directors to serve for a three-year term.
directors.Ratify the appointment of our independent registered public accountants.
Vote on a proposal to amend the Certificate of Incorporation to remove supermajority voting requirements.
Hold an advisory vote to approve named executive officer compensation.
Approve the Bath & Body Works, Inc. Associate Stock Purchase Plan.
Vote on the stockholder proposal on proxy access,to reduce the ownership threshold for calling special meetings of stockholders, if properly presented at the meeting.
Transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on March
24, 201618, 2022 may vote at the meeting.
If you plan to attend, please bring the Admittance Slip located at the back of this booklet and a picture I.D., and review the attendance information provided. Your vote is important. Stockholders of record can give proxies by calling a toll-free telephone number, by using the Internet or by mailing their signed proxy cards. Whether or not you plan to attend the meeting, please vote by telephone or via the Internet or sign, date and return the enclosed proxy card in the envelope provided. Instructions are included on your proxy card. You may change your vote by submitting a later dated proxy (including a proxy via telephone or the Internet) or by attending the meeting and voting in person.
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| | By Order of the Board of Directors, |
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/s/ Leslie H. Wexner
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Leslie H. Wexner
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Chairman of the Board
| | | Michael C. Wu
Chief Legal Officer and Secretary |
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PROXY STATEMENT TABLE OF CONTENTS
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INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
The Board of Directors (the “Board”) is soliciting your proxy to vote at our
20162022 annual meeting of stockholders (or at any adjournment of the meeting). This proxy statement summarizes the information you need to know to vote at the meeting. In this proxy statement, “we,” “our,”
“L Brands”“Bath & Body Works” and the “Company” refer to
L Brands,Bath & Body Works, Inc.
We began mailing this proxy statement and the enclosed proxy card, or the Notice of Internet Availability of Proxy Materials (the “Notice”), on or about April
8, 20161, 2022 to all stockholders entitled to vote. The Company’s
20152021 Annual Report on Form 10-K
(the “2021 10-K”), which includes our financial statements, is being sent with this proxy statement and is available in paper copy by request or in electronic form.
You may request copies of such documents from: Bath & Body Works, Inc., Attention: Investor Relations, Three Limited Parkway, Columbus, Ohio 43230.
Date, Time and Place of Meeting
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Date: |
| May 19, 201612, 2022 |
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Time: |
| 8:30 a.m., Eastern Time |
Place:
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Place:
| | ThreeSeven Limited Parkway, Columbus,Reynoldsburg, Ohio 4323043068 |
Stockholders who plan to attend the meeting in person must bring photo identification and the Admittance Slip located at the back of this booklet.
Although we are hosting an in-person annual meeting, due to the public health impact of the COVID-19 pandemic, and to support the health and well-being of our stockholders, associates and communities, attendees will be expected to comply with important health and safety protocols as recommended by the Centers for Disease Control and Prevention, including: wearing an appropriate face covering at all times while on the meeting premises, hand washing and/or applying hand sanitizer upon arrival and practicing social distancing by maintaining at least a six-feet distance from other attendees.
You should not attend if you feel unwell or if you have been exposed to COVID-19. Any person in attendance who exhibits cold or flu-like symptoms or who has been exposed to COVID-19 may be asked to leave the premises for the protection of the other attendees. We reserve the right to take any additional precautionary measures deemed appropriate in relation to the meeting and access to meeting premises, and may ask attendees to leave the meeting if they are not following our procedures.
Because of necessary security precautions, bags, purses and briefcases may be subject to inspection. To speed the admissions process, stockholders are encouraged to bring only essential items. Cameras, camcorders or videotaping equipment are not allowed.
We are continuing to monitor the public health and travel concerns relating to COVID-19 and the related recommendations and protocols issued by federal, state and local governments. In the event that it is not possible or advisable to hold our annual meeting at the time, date and place as originally planned, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication or adjourning or postponing the meeting. Any such change, including details on how to participate in a remote meeting, would be announced in advance via press release, a copy of which would be filed with the Securities and Exchange Commission (the “Commission”) as additional proxy solicitation materials and posted on our website at http://www.bbwinc.com. Please check this website in advance of the meeting date if you are planning to attend in person.
Stockholders entitled to vote are those who owned Company common stock (which we refer to throughout this proxy statement as “Common Stock”) at the close of business on the record date, March 24, 2016.18, 2022. As of the record date, there were 287,003,940238,489,925 shares of Common Stock outstanding. Each share of Common Stock that you own entitles you to one vote.
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Whether or not you plan to attend the annual meeting, we urge you to vote. Stockholders of record can give proxies by calling a toll-free telephone number, by using the Internet or by mailing their signed proxy cards.
The telephone and Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly. If you are voting by mail, please complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you are voting by telephone or via the Internet, please use the telephone or Internet voting procedures set forth on the enclosed proxy card. Returning the proxy card or voting via telephone or the Internet will not affect your right to attend the meeting and vote.
The enclosed proxy card indicates the number of shares that you own.
Voting instructions are included on your proxy card. If you properly fill in your proxy card and send it to us or vote via telephone or the Internet in time to vote, one of the individuals named on your proxy card (your “proxy”) will vote your shares as you have directed. If you sign the proxy card or vote via telephone or the Internet but do not make specific choices, your proxy will follow the Board’s recommendations and vote your shares in the following manner:
| • | “FOR” the election of the Board’s nine nominees for director (as described on page 5); |
| • | “FOR” the ratification of the appointment of our independent registered public accountants (as described on page 17); |
| • | “FOR” the advisory vote to approve named executive officer compensation (as described on page 18); |
| • | “FOR” approval of the Bath & Body Works, Inc. Associate Stock Purchase Plan (as described on page 19); and |
| • | “AGAINST” the stockholder proposal to reduce the ownership threshold for calling special meetings of stockholders (as described on page 23). |
“FOR” the election of the Board’s three nominees for director (as described on pages 5 and 6);
“FOR” the ratification of the appointment of our independent registered public accountants (as described on page 14);
“FOR” the proposal to amend the Certificate of Incorporation to remove supermajority voting requirements (as described on pages 15 and 16), in recognition of the vote at the Company’s 2015 annual meeting of stockholders on a stockholder proposal addressing the same topic;
“FOR” on the advisory vote to approve named executive officer compensation (as described on pages 17 and 18); and
“AGAINST” the stockholder proposal (as described on pages 19 and 20).
If any other matter is properly presented at the meeting, your proxy will vote in accordance with his or her best judgment. At the time this proxy statement went to press, we knew of no other matters to be acted on at the meeting. See “—Vote Necessary to Approve Proposals” for a discussion of the votes required to approve these items.
Certain stockholders received a Notice containing instructions on how to access this proxy statement and our
2015 Annual Report on Form2021 10-K via the Internet. Those stockholders should refer to the Notice for instructions on how to vote.
You may revoke your proxy by:
submitting a later dated proxy (including a proxy via telephone or the Internet);
notifying our Secretary at our principal executive offices at Three Limited Parkway, Columbus, Ohio 43230, in writing before the meeting that you have revoked your proxy; or
voting in person at the meeting.
If you plan to vote in person, a ballot will be available when you arrive. However, if your shares are held in the name of your broker, bank or other nominee, you must bring an account statement or letter from the nominee indicating that you were the beneficial owner of the shares at the close of business on March
24, 2016,18, 2022, the record date for voting, as well as a proxy, executed in your favor, from the nominee.
Appointing Your Own Proxy
If you want to give your proxy to someone other than the individuals named as proxies on the proxy card, you may cross out the names of those individuals and insert the name of the individual you are authorizing to vote. Either you or that authorized individual must present the proxy card at the meeting.
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A quorum of stockholders is necessary to hold a valid meeting. The presence in person or by proxy at the meeting of holders of shares representing at least one-third of the votes of the Common Stock entitled to vote constitutes a quorum. Abstentions and “broker non-votes” are counted as present for establishing a quorum. A broker non-vote occurs on an item when a broker is not permitted to vote on that item absent instruction from the beneficial owner of the shares and no instruction is given.
Vote Necessary to Approve Proposals
Pursuant to the Company’s Amended and Restated Bylaws (the “Bylaws”), each director will be elected by a majority of the votes cast with respect to such director. A majority of the votes cast means that the number of votes “for” a director’s
election must exceed 50% of the votes cast with respect to that director’s election. Any “against” votes will count as a vote cast, but “abstentions” and broker non-votes will not count as a vote cast with respect to that director’s election. Under Delaware law, if the director is not elected at the annual meeting, the director will continue to serve on the Board as a “holdover director.” As required by the Bylaws, each director has submitted an irrevocable letter of resignation as director that becomes effective if he or she does not receive a majority of votes cast in an election and the Board accepts the resignation. If a director is not elected, the Nominating & Governance Committee will consider the director’s resignation and recommend to the Board whether to accept or reject the resignation. | election must exceed 50% of the votes cast with respect to that director’s election. Any “against” votes will count as a vote cast, but “abstentions” will not count as a vote cast with respect to that director’s election. Under Delaware law, if the director is not elected at the annual meeting, the director will continue to serve on the Board as a “holdover director.” As required by the Company’s Bylaws, each director has submitted an irrevocable letter of resignation as director that becomes effective if he or she does not receive a majority of votes cast in an election and the Board accepts the resignation. If a director is not elected, the Nominating & Governance Committee will consider the director’s resignation and recommend to the Board whether to accept or reject the resignation.
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The ratification of Ernst & Young LLP as our independent registered public accountants requires the affirmative vote of a majority of the votes present in person or by proxy and voting thereon.
The proposal to amend the Certificate of Incorporation to remove supermajority voting requirements requires the affirmative vote of at least 75% of the outstanding shares of the Company entitled to vote at the annual meeting.
The advisory vote to approve named executive officer compensation requires the affirmative vote of a majority of the votes present in person or by proxy and voting thereon. While this vote is required by law, it will neither be binding on the Company or the Board, nor will it create or imply any change in the fiduciary or other duties of, or impose any additional fiduciary or other duties on, the Company or the Board. However, the Human Capital & Compensation Committee (the “HCC Committee”) will take into account the outcome of the vote when considering future executive compensation decisions.
The stockholder proposalPursuant to the Bylaws, the approval of the Bath & Body Works, Inc. Associate Stock Purchase Plan (the “ASPP”) requires the affirmative vote of a majority of the votes present in person or by proxy and voting thereon.
In addition, the vote necessary to approve the ASPP, including the impact of abstentions (as described under “—Impact of Abstentions and Broker Non-Votes,
” is subject to additional New York Stock Exchange (“NYSE”) rules. NYSE rules require a majority of the votes cast “for” approval of the ASPP.
The stockholder proposal requires the affirmative vote of a majority of the votes present in person or in proxy and voting thereon.
Impact of Abstentions and Broker Non-Votes You may “abstain” from voting for any nominee in the election of directors and on the other proposals. Abstentions with respect to the election of directors,
the ratification of Ernst & Young LLP as our independent registered public accountants, the advisory vote to approve named executive officer compensation, the approval of the ASPP and
on the
other proposals, except for thestockholder proposal
to amend the Certificate of Incorporation to remove supermajority voting requirements, will be excluded entirely from the vote and will have no effect.
Abstentions with respect to the proposal to amend the Certificate of Incorporation will have the same effect as a vote “against” the proposal.In addition, under New York Stock Exchange (“NYSE”)NYSE rules, if your broker holds your shares in its name, your broker is permitted to vote your shares on the proposal to ratify Ernst & Young LLP as our independent registered public accountant,accountants, even if it did not receive voting instructions from you. Your broker may not vote your shares on any of the other matters without specific instruction. A “broker non-vote” occurs when a broker submits a proxy but refrains from voting. Shares represented by broker non-votes are counted as present or represented for purposes of determining the presence of a quorum but are not counted as otherwise present or represented.
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Obtaining Additional Copies of the Proxy Materials
We have adopted a procedure called “householding.” Under this procedure, stockholders who share the same last name and reside at the same mailing address will receive one Notice or one set of proxy materials (if they have elected to receive hard copies of the proxy materials), unless one of the stockholders at that address has notified us that they wish to receive individual copies. Stockholders who participate in householding continue to receive separate control numbers for voting. Householding does not in any way affect dividend check mailings.
If you hold Common Stock and currently are subject to householding, but prefer to receive separate copies of proxy materials and other stockholder communications from the Company, or if you are sharing an address with another stockholder and would like to consent to householding, you may revoke or grant your consent to
householding as appropriate at any time by calling toll-free at 1-866-540-7095 or notifying our Secretary at our principal executive offices at Three Limited Parkway, Columbus, Ohio 43230.
A number of brokerages and other institutional holders of record have implemented householding. If you hold your shares beneficially in street name, please contact your broker or other intermediary holder of record to request information about householding.
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PROPOSAL 1: ELECTION OF DIRECTORS
The Board has nominated threenine directors for election at the annual meeting. If you elect the threenine nominees, they will hold office for a three-yearone-year term expiring at the 20192023 annual meeting of stockholders or until their successors have been elected.
Director Succession
The Board believes in the necessity of ongoing Board refreshment, rigorous self-evaluation, diversity and succession planning. We regularly engage with our stockholders and other stakeholders on Board refreshment. The Board has in place a robust process that will allow us to continue to refresh the Board. We want a thoughtful approach to succession planning, and accordingly, the Board seeks to strike a balanced approach that allows the Board to benefit from the right mix of newer directors who bring fresh perspectives and seasoned directors who bring continuity and deep insight into our business and strategies. The Company believes that an effective Board consists of individuals who possess a variety of complementary skills, a range of tenures and a diversity of perspectives. We assess and implement our Board succession plan with this in mind. The Nominating & Governance Committee and the Board consider the performance, contributions, skills and experience of our Board members in the broader context of the Board’s overall composition, with a view toward constituting a Board that has the integrity, judgment, skill set, experience and other characteristics to oversee the broad set of challenges that the Company faces and evaluate management on executing the Company’s business strategy.
Corporate Governance Highlights The Board constantly reviews evolving best practices in corporate governance and stays abreast of developments in the area of corporate governance. We have a policy of robust engagement with stockholders, with continuing outreach to and dialogue with all of our major investors on a range of issues, including corporate governance matters and environmental and social goals and initiatives. Our corporate governance highlights include:
Board Oversight
Oversees the Company’s strategic plans, capital structure, assessment and management of enterprise risk, cybersecurity and data security policies and environmental, social and governance (“ESG”) matters.
Regular reviews of succession plans for the Chief Executive Officer and other senior management positions.
Stockholder Rights and Accountability
All directors are elected annually.
No supermajority voting requirements.
Our Bylaws include proxy access rights, permitting up to 20 stockholders owning 3% or more of the outstanding shares of Common Stock continuously for at least three years to nominate the greater of two directors or up to 20% of our Board and include those nominees in our proxy materials.
Stockholders who own at least 25% of the outstanding shares of Common Stock may call a special meeting of stockholders.
In uncontested director elections, directors are currently servingelected by a majority of votes cast.
No “poison pill” in effect.
Annual Evaluations
Annual Board and committee assessments enhance performance.
Environmental and Social Responsibility
Further reducing our environmental impact through collaboration with suppliers to implement more environmentally friendly strategies related to our supplies and products, including steadily increasing the use of post-consumer recycled (“PCR”) plastic in our project packaging, working closely with our suppliers to increase that amount based on the supply of available PCR material.
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Continuing our
Board.commitment to support programs that focus on underserved and underrepresented communities during 2021 by investing more than $22 million through our foundations, corporate giving and product donations as well as through associate engagement with nonprofit organizations.
An elevated focus on fostering a culture that is inclusive, embraces social change, takes action and is accountable. In 2021, we celebrated cultural milestones and moments in a bigger way both internally and in stores and online. We’ve done that through internal connection points, special product collections and contributions to community partners and look forward to applying our learnings to do so in even more meaningful ways going forward.
Director Qualifications, Skills, Experience and Demographics We believe that our Boarddirectors, as a whole, possessespossess the right diversitymix of qualifications, skills and experience, qualifications and skills to oversee and address the key issues facing our Company. In addition, we believe that each of our directors possesses key attributes that we seek in a director, including strong and effective decision-making, communication and leadership skills. To ensure that the Board, Board committees and individual directors remain effective, the Nominating & Governance Committee oversees the annual evaluation of the Board, each Board committee and each individual director and recommends ways to improve performance. With respectcommitment to Board refreshment the Nominating & Governance Committee is responsible for identifying candidates who are qualified to serve on the Board and, as part of that review process, considersensure this moving forward. Our directors also reflect the diversity of the Company’s workforce, communities it serves, its customers and other key stakeholders.
The table below summarizes the qualifications, skills and experience and expertise of the current directors and areas where new directors might add additional perspectives. In that regard, in the past four years, three new directors have been appointed toour nominees for the Board.
The
considerations of the Nominating & Governance Committee in identifying potential candidates are described in further detail in “—Committees oftable below summarizes certain demographic information related to our nominees for the Board
of Directors—Nominating & Governance Committee.” In addition to periodic Board refreshment, we believe that a variety ofbased on characteristics self-identified by our director
tenures is beneficial to ensure Board quality and continuity of experience, as reflected in the current composition of our Board.nominees.
Set forth below is additional information about the experience and qualifications of each of the nominees for director
as well as each of the current members of the Board, that led
the Nominating & Governance Committee and the Board to conclude
at the time each individual was nominated to serve on the Board, that he or she would provide valuable insight and guidance as a member of the Board.
Your proxy will vote for each of the nominees unless you specify otherwise. If any nominee is unable to serve, your proxy may vote for another nominee proposed by the Board; alternatively, the Board may elect to reduce the size of the Board. We do not know of any nominee of the Board who would be unable to serve as a director if elected.
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The Board recommends a vote FOR the election of all of the following nominees of the Board:
Patricia S. Bellinger | | | Director since 2017 | | | Age 61 |
Executive Committee
Human Capital & Compensation Committee
Nominating & Governance Committee (Chair) |
Ms. Bellinger is the Chief of Staff and
DirectorsNomineesStrategic Advisor to the President of the BoardHarvard University, an institution of higher education. From 2017 to 2018, she was a Senior Fellow at the 2016 Annual Meeting
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Dennis S. Hersch | | Director since 2006 | | Age 69 |
Mr. Hersch is President of N.A. Property, Inc., through which he acts asCenter for Public Leadership at Harvard Kennedy School, a business advisorgraduate and professional school. From 2013 to Mr.2017, she was an Adjunct Lecturer and Mrs. Wexner,the Executive Director at the Center for Public Leadership at the Harvard Kennedy School and has done so since February 2008. He also serves as a trustee of several trusts established by Mr. and Mrs. Wexner. Hefrom 2010 to 2013, she was a Managingthe Executive Director of J.P. Morgan Securities Inc., an investment bank,Executive Education at Harvard Business School, a graduate and professional school. Prior to joining Harvard Business School, Ms. Bellinger was group vice president at British Petroleum, a global energy company, from December 2005 through January 2008,2000 to 2007, where he served as the Global Chairman of its Mergers & Acquisitions Department. Mr. Hersch was a partner of Davis Polk & Wardwell LLP, a New York law firm, from 1978 until December 2005. Mr. Herschshe oversaw leadership development and established and led British Petroleum’s global diversity and inclusion transformation. Ms. Bellinger served as a director of Clearwire Corporation, a telecommunications company, from 2008 until 2013, NBCUniversal Enterprise,Pattern Energy Group Inc., a media relatedpower company, from 2013 until 2014, Sprout Foods, Inc.2018, Paris-based Sodexo S.A., from 2005 until 2018, and as a trustee of uAspire until 2020. She also serves as a director of Paris-based Sonepar and Safran S.A. and the National Board of the Smithsonian Institution. Ms. Bellinger’s nomination is supported by her extensive executive, business and leadership experience and service on several boards of directors.
Alessandro Bogliolo | | | Director since 2022 | | | Age 56 |
Mr. Bogliolo, born in Italy, is the former Chief Executive Officer and director of Tiffany & Co. (“Tiffany”), a producerluxury jewelry and specialty retailer, serving in such role from October 2017 through the acquisition of organic baby food,Tiffany by LVMH Moët Hennessy Louis Vuitton SE (“LVHM”) in January 2021. Prior to joining Tiffany, Mr. Bogliolo served as Chief Executive Officer and director of Diesel SpA, an international fashion brand that is part of the OTB Group, from 2009 until2013 to 2017, and in senior roles with LVMH from 2011 to 2013, including as Chief Operating Officer, North America, for Sephora USA and Executive Vice President and Chief Operating Officer, Bulgari. Mr. Bogliolo’s nomination is supported by his extensive executive, strategic and operational leadership experience, including as Chief Executive Officer of a publicly traded retail brand, his deep knowledge of the retail industry and consumers and his international experience and perspective.
Francis A. Hondal | | | Director since 2021 | | | Age 57 |
Audit Committee
Human Capital & Compensation Committee |
Ms. Hondal is President of Loyalty and Engagement at Mastercard Inc. (“Mastercard”), a global technology company in the payments industry, and has served in this position since 2018. She is also a member of Mastercard’s management committee and leads the development of products that enable consumer experiences through loyalty, rewards and performance-based marketing services for enterprises worldwide. From 2015 to 2018, Ms. Hondal was Executive Vice President of Credit and Loyalty at Mastercard, responsible for growing usage and preference of Mastercard branded products, and from 2011 to 2015 she was Executive Vice President of Products at Mastercard. Ms. Hondal also spent 17 years at the American Express Company in global and regional roles within its consumer services division. Since September 2020, Ms. Hondal has served as a director of PJT PartnersEquitable Holdings, Inc., a financial advisory firm, since 2015. Mr. Hersch’sservice holding company comprised of two principal franchises, Equitable and AllianceBernstein. She is also a board observer for Flybits, a Canadian contextual marketing fintech, and serves on the board of the Florida International University Foundation. Ms. Hondal’s nomination is supported by his legalher extensive consumer marketing, finance and financial expertise,management experience.
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Danielle M. Lee | | | Director since 2021 | | | Age 46 |
Human Capital & Compensation Committee
Nominating & Governance Committee |
Ms. Lee is President, Warner Music Artist and Fan Experiences at Warner Music Group Corp. (“Warner Music Group”), a publicly traded music entertainment company, since June 2021, where she leads an in-house creative agency for the Warner Recorded Music roster as well as
his considerable experiencefor third-party musical artists. Prior to joining Warner Music Group, Ms. Lee was the Chief Fan Officer for the National Basketball Association, Inc. (the “NBA”) from March 2020 through May 2021, where she oversaw brand, creative and multiplatform fan marketing globally and was charged with
corporate governance matters, strategic issueselevating brand perceptions, cultural connection and
corporate transactions. | | | | |
David T. Kollat | | Director since 1976 | | Age 77 |
Dr. Kollat has been Chairman of 22, Inc.fan engagement. Prior to joining the NBA in 2020, Ms. Lee served for four years as Global Vice President, Partner Solutions at Spotify Technology S.A., a management consulting firm, since 1987. He haswhere she was responsible for developing go-to-market strategy and growing global revenue across music, podcasts and high-impact digital experiences. Prior to Spotify, Ms. Lee served as director of Select Comfort Corporation, a designer, manufacturerGlobal Vice President, Commercial Marketing at Vevo LLC. She also spent seven years at AT&T Inc. and retailer of premium beds and bedding accessories, since 1994, and Wolverine World Wide, Inc., a global footwear, athletic apparel and accessories designer, manufacturer and retailer, since 1992. Dr. Kollat also served as directorVice President of Big Lots,Product Marketing and Innovation for AT&T AdWorks after beginning her career at Showtime Networks Inc., a retailer, from 1990 to 2013. In addition to his broad business experience (including service on several boards of directors) and marketing expertise, Dr. Kollat’s Ms. Lee’s nomination is supported by his particularher extensive experience and involvement in the retail, apparelbrand building, product innovation and other related industries, both at the managementstrategic marketing across technology, media and board levels.
entertainment. | | | | |
Leslie H. Wexner | | Director since 1963 | | Age 78 |
Mr. Wexner has been Chief Executive Officer of the Company since he founded the Company in 1963, and Chairman of the Board for 40 years. Mr. Wexner is the husband of Abigail S. Wexner. Mr. Wexner’s nomination is supported by his effective leadership of the Company since its inception.
Directors Whose Terms Continue until the 2017 Annual Meeting
| | | | |
Donna A. James | | Director since 2003 | | Age 58 |
In April 2006, Ms. James established Lardon & Associates LLC, a business and executive advisory services firm, where she is Managing Director. Ms. James served as the President of Nationwide Strategic Investments, a division of Nationwide Mutual Insurance Company, from 2003 through March 2006. Ms. James served as Executive Vice President and Chief Administrative Officer of Nationwide Mutual Insurance Company and Nationwide Financial Services from 2000 until 2003. Ms. James is a director of Time Warner Cable Inc., a provider of video, data and voice services, Marathon Petroleum Corp., a transportation fuels refiner and Boston Scientific Corporation, a developer, manufacturer and marketer of medical devices. Ms. James also served as Chairman of Financial Settlement Services Agency, Inc. from 2005 through 2006, as director of CNO Financial Group, Inc., a holding company for a group of insurance companies, from 2007 to 2011, and as director of Coca-Cola Enterprises Inc., a nonalcoholic beverages company, from 2005 to 2012. She currently serves on the Audit Committee of Marathon Petroleum Corp. and as the Chairperson of the Audit Committee of Time Warner Cable Inc. Ms. James’s nomination was supported by her executive experience, financial expertise, service on several boards of directors and experience with respect to corporate diversity and related issues.
| | | | |
Jeffrey H. Miro | | Director since 2006 | | Age 73 |
Mr. Miro has been a senior partner of the Honigman Miller Schwartz and Cohn LLP law firm since November 2004. He was a partner and Chairman of the law firm of Miro Weiner & Kramer from 1981 until November 2004. He is an Adjunct Professor of Law at The University of Michigan Law School, teaching courses in taxation and corporate governance. Mr. Miro was a director of M/I Homes, Inc., a national home building company, until December 2012, and was a director of Sotheby’s Holdings, Inc., an auctioneer of art, jewelry and collectibles, until May 2006. Mr. Miro’s nomination was supported by his legal expertise, particularly with respect to corporate governance and real estate matters.
| | | | |
Michael G. Morris | | | Director since 2012 | | | Age 6975 |
Audit Committee
Executive Committee
Human Capital & Compensation Committee (Chair) |
Mr. Morris served as the Chairman of the Board of American Electric Power Company, Inc.
(“American Electric Power”), one of the largest electric utilities in the United States, from 2012 to April 2014. From January 2004 until November 2011, Mr. Morris served as the President, Chief Executive Officer and Chairman of American Electric
Power Company, Inc.Power. From 1997 until 2003, he served as the
President, Chairman and Chief Executive Officer of Northeast Utilities, the largest electric utility in New England. Mr. Morris
currently servesserved as a director of Spectra Energy Corp., one of North America’s leading natural gas infrastructure companies,
from 2013 through its acquisition by Enbridge Inc. in 2017. Mr. Morris also served on the board of directors of the general partner of Spectra Energy Partners, LP, a master limited partnership engaged in the transmission, storage and gathering of natural gas, and the transportation and storage of crude oil, from 2017 until its acquisition by Enbridge Inc. in 2018. From 2018 to 2019, Mr. Morris served as a director of PHL Group, Inc., a private provider of energy-focused construction and related services. Mr. Morris served as a director of Alcoa Inc., a producer of aluminum, from 2008 to 2016, until Alcoa Inc.’s separation into two standalone, publicly traded companies, Alcoa Corporation (“Alcoa”) and Arconic Inc., and thereafter as the Chairman of the board of directors of Alcoa, a producer of bauxite, alumina and aluminum, until his retirement from Alcoa’s board in 2021. Mr. Morris currently serves as a director of The Hartford Financial Services Group, Inc., an investment and insurance
company, and Alcoa Inc., a leading producer of aluminum.company. Mr. Morris’s nomination
wasis supported by his broad business experience and management expertise.
Sarah E. Nash | | | Director since 2019 | | | Age 68 |
Raymond Zimmerman | | Director since 1984 | | Age 83Executive Chair
Executive Committee (Chair) |
Mr. Zimmerman is
Ms. Nash has served as Executive Chair of the Company since February 2022 and served as an independent Chair of the Board between May 2020 and February 2022. Effective upon the conclusion of the Company’s 2022 annual meeting of stockholders, Ms. Nash will assume the role of Interim Chief Executive Officer of Service Merchandise LLC,the Company. Ms. Nash is also chair of the board, chief executive officer and majority shareholder of privately held Novagard Solutions, an innovator and manufacturer of silicone sealants and coatings and hybrid and foam solutions for the Building Systems, Electronics, EV and Battery and Industrial and Transportation markets. Ms. Nash spent nearly 30 years in investment banking at JPMorgan Chase & Co. (and predecessor companies), a retail company. Mr. Zimmerman wasfinancial services firm, retiring as Vice Chairman of Global Investment Banking in July 2005. She served on the Boardboard of directors of Knoll, Inc., a designer and Chief Executive Officermanufacturer of 99¢ Stuff, LLClifestyle and workplace furnishing, textiles and fine leathers, from 1999 to 20032006 through its acquisition by Herman Miller, Inc. in 2021 and privately held Irving Oil Company through March 2022. Ms. Nash currently serves on the Chairmanboards of directors of Blackbaud, Inc., a software company providing technology solutions for the not-for-profit industry, and privately held HBD Industries, Inc., a manufacturer and supplier of general
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purpose and application-engineered industrial products. Ms. Nash is Trustee of the
Board and Chief Executive Officer of 99¢ Stuff, Inc. from 2003 to 2008. In January 2007, 99¢ Stuff, Inc. filedNew York-Presbyterian Hospital, a
voluntary petition under Chapter 11 of the United States Bankruptcy Code, and in October 2007, 99¢ Stuff, Inc. emerged from bankruptcy. Mr. Zimmerman’s nomination was supported by his financial expertise and broad business experience, particularly in the retail sector.Directors Whose Terms Continue until the 2018 Annual Meeting
| | | | |
E. Gordon Gee | | Director since 2012 | | Age 72 |
Dr. Gee is currently the President of West Virginia University, a large public research institution. Prior to his current service at West Virginia University, he led several other major universities, including The Ohio State University (2007—2013, 1990—1998), Vanderbilt University (2000—2007), Brown University (1998—2000), the University of Colorado (1985—1990), and West Virginia University (1981—1985). Dr. Gee also currently serves as a directormember of the National 4-H Council. He previouslyBoard of the Smithsonian Institution, a member of the Smithsonian Tropical Research Institute (STRI), Panama and the Chair of the International Advisory Board of the Montreal Museum of Fine Arts. Ms. Nash holds a BA in political science from Vassar College. Ms. Nash’s nomination is supported by her extensive experience in capital markets, strategic transactions, corporate governance and nonprofit organizations.
Juan Rajlin | | | Director since 2022 | | | Age 46 |
Mr. Rajlin, born in Argentina, has served as
a directorthe Treasurer of
the Company from 1992 to 2008, as a director of Hasbro,Alphabet Inc.
(“Alphabet”), a
branded-playmultinational technology company,
and its subsidiary Google LLC (“Google”) since October 2018. In Mr. Rajlin’s role with Alphabet, he oversees over $100 billion of investments, corporate finance policy and financial risk management. He is also a key executive overseeing Google's sustainability strategy and diversity, equity and inclusion work. Prior to joining Alphabet, Mr. Rajlin served as Corporate Treasurer and Chief Risk Officer from
1999 until 2010,February 2013 through September 2017 and as
Chief Financial Officer, Products and Services from October 2017 through September 2018, in each case at Mastercard, and held various roles with increasing levels of responsibility with General Motors Company before joining Mastercard. Mr. Rajlin holds a
director of Bob Evans Farms, Inc.,BS, Economics from Universidad Torcuato Di Tella in Argentina and an
owner and operator of family restaurants,MBA from
2009 until 2014. Dr. Gee’sColumbia University. Mr. Rajlin’s nomination
wasis supported by his extensive
executivefinance and
risk management experience,
as well as his
legal expertiseexperience with consumer-driven technologies and
knowledge of the Company gained throughESG matters and his
prior service as a director.deep international experience and perspective. | | | | |
Stephen D. Steinour | | | Director since 2014 | | | Age 5763 |
Interim Lead Independent Director
Audit Committee (Chair)
Executive Committee |
Mr. Steinour has been the Chairman, President
&and Chief Executive Officer of Huntington Bancshares Incorporated, a regional bank holding company, since 2009. From 2008 to 2009, Mr. Steinour was a Managing Partner in CrossHarbor Capital Partners, LLC, a recognized leading manager of alternative investments. Mr. Steinour was with Citizens Financial Group from 1992 to 2008, where he served in various executive roles, including President from 2005 to 2007 and Chief Executive Officer from 2007 to 2008. Mr. Steinour
currentlyalso serves as a
directorsupervisory board member of
Exelon Corporation,The Clearing House, a
utility services holding company.real-time payments platform. He previously served as a trustee of Liberty Property Trust, a real estate investment trust, from 2010 to
2014.2014, as a director of the Federal Reserve Bank of Cleveland, from 2017 to 2019, and as a director of Exelon Corporation, a utility services holding company, from 2007 to 2020. Mr. Steinour’s nomination
wasis supported by his executive experience, financial expertise and service on several boards of directors.
| | | Director since 2021 | | | Age 50 |
Allan R. Tessler | | Director since 1987 | | Age 79Audit Committee
Nominating & Governance Committee |
Mr. TesslerSymancyk has been Chairman of the Boardserved as President and Chief Executive Officer and a director of International Financial Group, Inc., an international merchant banking firm,PetSmart LLC, a large specialty pet retailer, since 1987 and isJune 2018. From 2015 to June 2018, Mr. Symancyk was the Chairman and Chief Executive Officer of Teton Financial Services,Academy Sports and Outdoors, Inc., a sporting goods and outdoor recreation retailer. Mr. Symancyk has over 25 years of industry experience managing complex retail organizations, including with roles of increasing responsibility with each of Academy Sports + Outdoors, Meijer and Walmart Stores. Mr. Symancyk also served on the board of directors of Chewy, Inc., an online retailer for pet products, supplies and prescriptions, from April 2019 through July 2021, and GameStop Corp., from March 2020 to June 2021. Mr. Symancyk’s nomination is supported by his executive experience, financial services company. He previously servedexpertise, operating experience and deep understanding of the retail industry.
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Leadership Updates
On February 22, 2022, the Company announced that Mr. Meslow will step down as ChairmanChief Executive Officer and as a member of the Board, due to health reasons, effective on May 12, 2022. To facilitate a smooth transition, the Board appointed Ms. Nash to serve as Executive Chair of Epoch Holding Corporation, an investment management company, from 2004 to 2013the Company, effective on February 22, 2022, and as ChairmanInterim Chief Executive Officer of the Board of J Net Enterprises Inc., a technology holding company, from 2000 to 2004.Company, effective upon Mr. Tessler also served as Chairman ofMeslow’s departure. In addition, the Board appointed Mr. Steinour as Interim Lead Independent Director on March 10, 2022. We thank Mr. Meslow for his years of InterWorld Corporation from 2001service to 2004the Company and his willingness to continue in his role as ChairmanChief Executive Officer until May 12, 2022.
The Board is in the process of Checker Holdings Corp. IV from 1997retaining a national search firm to 2009. Mr. Tessler currently serves onconduct a robust search process to identify a permanent Chief Executive Officer. The Board is seeking candidates who will bring strong leadership to the Audit Committee of Imperva, Inc., a provider of cyber security solutions,Company at this unique and as Chairman oftransformational time for our Company. The process will be undertaken in accordance with policies and principles established by the Board of Rocky Mountain Bank, a Wyoming bank. He has served as a director of TD Ameritrade Holding Corporation, a securities brokerage company, since November 2006, and as a director of Steel Partners Holding GP, Inc., a general partner of a global diversified holding company, since 2010. for Chief Executive Officer succession planning.
Mr.
Tessler’s nomination was supported by his broad business experience and financial expertise, together with his involvement in various public policy issues. | | | | |
Abigail S. Wexner | | Director since 1997 | | Age 54 |
Mrs. Wexner is the chairman and CEO of Whitebarn Associates, a private investment company. She serves on the boards of Advanced Drainage Systems, Inc., a manufacturer of high performance thermoplastic corrugated pipe, The Ohio State University, Nationwide Children’s Hospital, the Columbus Downtown Development Corporation, the Columbus Partnership, Pelotonia, The Ohio State University Wexner Medical Center, The Wexner Foundation, The Columbus Jewish Federation and the United States Equestrian Team Foundation. She is founder and chair of the board for The Center for Family Safety and Healing and KidsOhio.org, founding board member and vice chair of the board for KIPP Columbus and a past chair of the Governing Committee of the Columbus Foundation. Mrs. Wexner is the wife of Leslie H. Wexner. Mrs. Wexner’s nomination was supported by her executive and legal experience, as well as her expertise with respect to a wide range of diversity, philanthropic and public policy issues.
Retiring Director
William R. Loomis, Jr. hasSchottenstein informed the Company that he will retire from the Board effective May 19, 2016,12, 2022, at the conclusion of ourthe Company’s 2022 annual meeting.
meeting of stockholders. We would like to thank Mr. Schottenstein for his service and valuable contributions as a director.
Accordingly, the size of the Board will be reduced to nine members immediately following the conclusion of the Company’s 2022 annual meeting of stockholders and, therefore, stockholders may only cast their vote with respect to the nine director nominees described above.
The Board has determined that each of the individuals nominated to serve on the Board
together with William R. Loomis, Jr. and each of the members of the Board who will continue to serve after the 2016 annual meeting of stockholders (except for
Dennis S. Hersch, Abigail S. WexnerSarah E. Nash) and
Leslie H. Wexner), hasMr. Schottenstein have no material relationship with the Company other than in his or her capacity as a director of the Company and that each is “independent” in accordance with applicable NYSE standards.
The Board has also determined that each of Donna A. James and Anne Sheehan, who each resigned from the Board effective on August 2, 2021 to serve on the board of directors of Victoria’s Secret & Co., were “independent” in accordance with applicable NYSE standards during the time they served on the Board in 2021. If all director nominees are elected to serve as our directors, independent directors will constitute
more than two-thirds89% of our Board.
In making these determinations, the Board took into account all factors and circumstances that it considered relevant, including, where applicable, the existence of any employment relationship between the director
(or nominee) or a member of the director’s
(or nominee’s) immediate family and the Company; whether within the past three years the director
(or nominee)or a member of the director’s immediate family has served as an executive officer of the Company; whether the director
(or nominee) or a member of the director’s
(or nominee’s) immediate family has received, during any twelve-month period within the last three years, direct compensation from the Company in excess of
$120,000;$120,000 (other than compensation in respect of such person’s service on the Board); whether the director
(or nominee) or a member of the director’s
(or nominee’s) immediate family has been, within the last three years, a partner or an employee of the Company’s internal or external auditors; and whether the director
(or nominee) or a member of the director’s
(or nominee’s) immediate family is employed by an entity that is engaged in business dealings with the Company. The Board has not adopted categorical standards with respect to director independence. The Board believes that it is more appropriate to make independence determinations on a case-by-case basis in light of all relevant factors.
Board Leadership
StructureMr. Leslie H. Wexner servesStructure; Risk Oversight; Certain Compensation Matters
The Board does not have a policy as Chairmanto whether the roles of Chair of the Board and Chief Executive Officer should be separate or combined. The Board exercises its discretion in combining or separating these positions as it deems appropriate in light of prevailing circumstances.
Ms. Nash served as an independent Chair of our Board from May 2020 until her appointment to the Company.role of Executive Chair on February 22, 2022. Effective May 12, 2022, at the conclusion of our 2022 annual meeting of stockholders, Ms. Nash will assume the role of Interim Chief Executive Officer upon Mr. Wexner isMeslow’s departure due to health reasons until such time that a permanent Chief Executive Officer has been appointed. Accordingly, during this time, the founderleadership structure of the Company will provide for the combination of the roles of Executive Chair and has served as its Chairman and/orInterim Chief Executive Officer for over fifty years. Mr. Wexner (through his personal holdings and associated trusts) is also the Company’s largest stockholder.Officer. The Board believes that Ms. Nash is best situated to serve as both interim Chief Executive Officer and Executive Chair until Mr. Wexner’s experience and expertise inMeslow’s successor is selected because of her familiarity with the Company’s business and operations is unrivaledleadership team, her deep leadership and strategic experience, including her significant role
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in facilitating the Company’s strategic actions that he is uniquely qualifiedultimately led to lead the Company. Accordingly,successful spin-off of Victoria’s Secret & Co. in August 2021 (the “Separation”) and standing up Bath & Body Works as a standalone public company, and the Company believes that Mr. Wexner’s service as both Chairmanefficiency of combining the roles during the Board’s search process for a permanent Chief Executive Officer.
In order to provide the Board
with independent leadership during this period of transition, on March 10, 2022, the Board appointed Mr. Steinour as Interim Lead Independent Director. In addition to chairing all executive sessions of our non-management and
Chief Executive Officer is a significant benefit to the Company and provides more effective leadership than could be achieved in another leadership structure.Allan R. Tessler currently independent directors, Mr. Steinour:
serves as a liaison between our Executive Chair, on the lead independent director. In July 2012, the Board determined that the lead independent director should be appointed solely by theone hand, and our independent directors, as they deem appropriate, and Mr. Tessler was subsequently reappointed ason the lead independent director by them. As lead independent director, Mr. Tessler has the authority to call meetings of the independent directors, at which he serves as the chairman. Mr. Tessler also other;
approves information sent to the Board;
reviews proposed Board including the agenda for Board meetings, and is responsible for approvingmeeting agendas;
approves meeting schedules
in order to assure that there is sufficient time for discussion of all agenda
items.The Company believes thatitems;
has the lead independent director structure, including Mr. Tessler’s service as lead independent director, offers independent oversightauthority to call meetings of the Company’s management to complement the leadershipnon-management and independent directors in his discretion; and
if requested by major stockholders, ensures that
Mr. Wexner provides to the Board as its Chairman.Risk Oversight; Certain Compensation Matters
he is available for consultation and direct communication.
The Board, directly and through the Audit Committee and other committees of the Board, takes an active role in the oversight of the Company’s policies with respect to the assessment and management of enterprise risk. Among other things, the Board has policies in place for identifying the senior executive responsible for key risks as well as the Board committees with oversight responsibility for particular key risks. In a number of cases, oversight is conducted by the full Board.
Among other things, the Company, including the
CompensationHCC Committee,
of the Board, has evaluated the Company’s compensation structure from the perspective of enterprise risk. The Company, including the
CompensationHCC Committee, believes that the Company’s compensation structures are appropriate and do not incentivize inappropriate taking of business risks.
Oversight of Cybersecurity Risk
The Audit Committee has oversight of the Company’s cybersecurity and data security policies. All members of the Audit Committee are independent directors. Members of management of the Company regularly brief the Board on issues relating to information security, fraud, data security and cybersecurity risk and developments, as well as the steps management has taken to monitor and control such exposures.
Review of Strategic Plans
and Capital Structure
The Board regularly reviews the Company’s strategic plans and conductscapital structure with a view toward long-term value creation.
Oversight of Environmental and Social Matters
Bath & Body Works, as a values-based company, recognizes that we have a responsibility to all stakeholders of our business, including associates, customers, stockholders, the communities where we live and work, people across our value chain who contribute to our success and, of course, the planet. To acknowledge this enormous responsibility, in 2021, as part of our ongoing efforts, we established an ESG function to provide direction and help coordinate ESG work throughout the Company. In 2022, we intend to work with internal and external stakeholders to identify any material issues, build an ESG strategy and set organizational priorities and goals that will guide our ESG focus going forward. We look forward to reporting on our strategy and our progress against our goals. While we are building out our strategy, we have continued with our ongoing work in this area. Key areas of focus and highlights include:
Diversity, Equity and Inclusion. Led by our Office of Inclusion, we have a robust enterprise strategy for diversity, equity and inclusion, based on the pillars of recruitment, education and development, engagement and retention, community and business. This includes the recruitment, retention and advancement of diverse talent among our Board, workforce and suppliers, that reflects the customers we serve and our communities. Specifically, we are taking the following steps:
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Senior leaders are engaging in conversations with individual associates and teams to listen and learn. We are committed to providing both large and small, formal and informal forums for associates to be heard.
We have gathered and are sharing resources to provide education, tools and insights for our associates on managing bias and being an ally.
As of January 29, 2022, we had six Inclusion Resource Groups (“IRGs”) designed for associates who identify as, or are allies of, the following groups: Hispanic and Latinx, LGBTQIA+, Black and African American, Asian and Pacific Islander, entry level and junior or early career professionals and women. These IRGs provide opportunities for associates to connect with one another around their shared passion for creating an inclusive workplace for all associates. These IRGs also provide professional development for associates, support the needs of our business, help shape the culture of our Company and encourage engagement and volunteerism in the community.
As noted below, we have increased our investment in organizations that fund the fight against racism and inequality.
As an indication of our efforts in this area, we have scored between 95 and 100 on the Human Rights Campaign’s Corporate Equality Index every year for the past decade, with a perfect score of 100 in each of 2020, 2021 and 2022.
Our EEO-1 data for 2021 and prior years includes data related to associates of Victoria’s Secret & Co., which is now an independent, standalone public company following the Separation in August 2021. We intend to publish our Consolidated EEO-1 Report for 2022 on our website at www.bbwinc.com in the second quarter of 2023, which will be our first Consolidated EEO-1 Report that reflects Bath & Body Works, Inc. as a standalone public company.
Respecting Human Rights and the Planet Throughout Our Supply Chain. We select suppliers based on their ability and commitment to meet our stringent standards related to safety, quality, labor and the environment. The majority of our production comes from the United States and includes many long-term strategic partners. Suppliers are audited for compliance with our supplier code of conduct.
Reducing Our Environmental Impact.
Driving toward sustainable materials. We are working to reduce our environmental impact through the use of more sustainable materials and partnerships with more environmentally responsible suppliers. For example, under the Company’s Forest Products Procurement Policy, we work with our suppliers to source packaging from certified forestry operations to reduce the pressures on endangered forests. Also, we are steadily increasing the use of PCR plastic in our product packaging, working closely with our suppliers to increase that amount based on supply of available PCR material.
Chemicals management in products. We apply a disciplined approach when it comes to ensuring quality and protecting our customers and the environment. Bath & Body Works contracts with manufacturers primarily in North America. Vendors are selected based on their ability and commitment to meet our safety and quality standards, as well as follow our ethical labor and environmental standards. Once contracted, our internal experts work with vendors to certify compliance with our strict quality standards and sourcing policies on an ongoing basis.
Reducing energy consumption, water use and greenhouse gas emissions. We have rolled out numerous energy-efficiency projects, such as having our main office and distribution center each LEED certified, using LED lamps in stores, home offices and distribution centers, and expanding our recycling efforts in our distribution centers and stores. We also are committed to using efficient means of transporting our goods. Since 2006, we have been a partner in the U.S. Environmental Protection Agency’s SmartWay Transport Partnership program, which works with companies to reduce greenhouse gas emissions and air pollution from transportation of goods. And since 2009, we have been a member of the Ceres Business for Innovative Climate and Energy Policy (BICEP), an advocacy coalition of businesses committed to working with policymakers to pass meaningful energy and climate legislation. With respect to water use, we have taken steps to conserve water use in our buildings and in landscaping.
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Supporting Our Communities. In 2021, we invested more than $20.1 million in nonprofit organizations through our foundations and corporate giving, including the National Urban League, Feeding America, YWCA and the Human Rights Campaign. And we contributed $1.9 million worth of products to support our communities, including first responders, healthcare institutions, community action agencies and nonprofits.
Empowering and Joining Our Associates in Funding Research with the Goal of Ending Cancer. In 2021, our foundations and associates continued to support cancer research, contributing more than $1.1 million to Pelotonia where 100% of every participant-raised dollar funds cancer research at The Ohio State University Comprehensive Cancer Center – James Cancer Hospital and Solove Research Institute. Since 2010, our foundations and associates have raised more than $65 million for Pelotonia.
Responding to COVID. Utilizing various COVID-19 safety measures that are designed to align with or exceed guidelines from the Centers for Disease Control and Prevention, we have taken a number of steps to protect our associates and customers, including use of temperature checks and verifications from our associates that they are symptom-free; compensation for our associates who are quarantining due to a positive COVID-19 test; providing face masks to our associates and instituting policies for use of face masks; taking steps to promote social distancing at our stores, home offices, distribution centers and customer care centers; and increasing our cleaning regimen.
Human Capital Management
The Board recognizes that attracting, developing and retaining the best people is crucial to all aspects of the Company’s activities and long-term success and has, with the support of the HCC Committee, oversight of the development and implementation of our human capital management programs, including diversity and inclusion practices and initiatives, recruiting, retention and career development and progression. Among other things, the Board reviews with members of management of the Company issues relating to human capital management such as associate engagement, workforce planning
retreat at least annually.and demographics, diversity and inclusion strategies and our corporate culture.
Succession Planning
The Board has developed policies and principles governing succession planning with respect to the Chief Executive Officer and other senior management.
Information Concerning Board Meeting Attendance
Our Board held
711 meetings in fiscal year
2015.2021. During fiscal year
2015,2021, all of the
then-current directors attended 75% or more of the total number of meetings of the Board and of the committees of the Board on which they served (which were held during the period in which they served).
The Audit Committee
of the Board is instrumental in the Board’s fulfillment of its oversight responsibilities relating to (i) the integrity of the Company’s financial statements
and internal controls, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications, independence and performance of the Company’s independent auditors and (iv) the performance of the Company’s internal audit function. The current members of the Audit Committee are
Ms. JamesMr. Steinour (Chair),
Dr. KollatMs. Hondal and Messrs.
TesslerMorris and
Zimmerman.Symancyk. The Board has determined that each of the Audit Committee members meets the independence, expertise and experience standards established by the NYSE and the
Securities and Exchange Commission
(the “Commission”) for service on the Audit Committee of the Board and
for designationqualifies as an “audit committee financial expert” within the meaning of the regulations promulgated by the Commission.
The Report of the Audit Committee can be found on page
5759 of this proxy statement. The Audit Committee held
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Human Capital & Compensation Committee
The Compensation Committeecurrent members of the HCC Committee are Mr. Morris (Chair), Mses. Bellinger, Hondal and Lee, and Mr. Schottenstein. The Board has determined that each of the current HCC Committee members is “independent” in accordance with applicable NYSE standards and qualifies as a “non-employee director” for purposes of regulations promulgated by the Commission.
The HCC Committee (i)
oversees human capital management of the Company, including the Company’s diversity, equity and inclusion programs, policies and strategies, (ii) oversees the Company’s compensation and benefits philosophy and policies,
generally, (ii)(iii) evaluates the Chief Executive Officer’s
(the “CEO”) performance and
oversees and setsapproves the Chief Executive Officer’s compensation,
for the CEO, (iii)(iv) oversees the evaluation process and compensation structure for other
membersexecutive officers of the
Company, (v) evaluates and recommends for approval by the Board compensation for the Company’s
senior managementdirectors, and
(iv)(vi) fulfills the other responsibilities set forth in its charter. The
current membersHCC Committee may delegate its authority (i) to subcommittees or the Chair of the
CompensationHCC Committee
are Dr. Kollat (Chair)as it deems appropriate and
Messrs. Gee, Miro and Morris. The Board has determined that eachin the best interests of the
current CompensationCompany, provided that periodic reports by the parties receiving any such delegation are made to the full HCC Committee
members is “independent” in accordance with
applicable NYSE standards.The Reportthe terms of the delegation, and (ii) to one or more officers of the Company the authority to make grants and awards of stock rights or options to any individual who is not an executive officer of the Company as the HCC Committee deems appropriate, in the best interests of the Company, and in accordance with the terms of such plans.
The Human Capital & Compensation Committee
Report can be found on page
5242 of this proxy statement. For a discussion of the role of the Company’s executive officers and the HCC Committee’s independent compensation consultant in determining or recommending the amount or form of executive and director compensation, see the section “Compensation Governance” on page 39 of this proxy statement. The
CompensationHCC Committee held
10nine meetings in fiscal year
2015.2021.
Nominating & Governance Committee
The Nominating & Governance Committee actively engages in the ongoing review of the composition of the Board and opportunities for Board refreshment. Based on its review, the Nominating & Governance Committee recommends criteria for the selection of the candidates to the Board and its committees, and identifies and recommends to the Board candidates who are qualified to serve on the Board and its committees. The Nominating & Governance Committee also considers and reviews the qualifications of any individual nominated for election to the Board by stockholders. It also proposesstockholders and is responsible for proposing a slate of candidates for election as directors at each annual meeting of stockholders. The Nominating & Governance Committee also develops and recommends to the Board, and reviews from time to time, a set of corporate governance principles for the Company and monitors compliance with those principles. In addition, the Nominating & Governance Committee oversees the annual evaluation of the Board eachand its committees, and commencing in 2022 is responsible for reviewing the Company’s actions in furtherance of its corporate social responsibility, including ESG and philanthropic initiatives, including the impact of Company procedures and processes on associates, citizens and communities.
The Board
committeeis committed to the ongoing review of Board composition and
each individual director. The current members of the Nominating & Governance Committee are Mr. Tessler (Chair), Ms. James, Dr. Kollat and Mr. Miro.director succession planning. The Board has
determined that eachhad eight new directors since 2019, seven of
whom were independent directors at the
current Nominating & Governance Committee members is “independent” in accordance with applicable NYSE standards.The Nominating & Governance Committee develops and recommendstime of their appointment. If all director nominees are elected to serve as directors at this annual meeting, the average tenure of our Board criteria and procedures for the selection and evaluation ofwill be 3.2 years.
In assessing new individuals to serve as directors and committee
members. It also reviews and periodically makes recommendations to the Board regarding the composition, size, structure, practices, policies and activities of the Board and its committees. In making its assessment and in identifying and evaluating director nominees,members, the Nominating & Governance Committee takes into account the qualifications of existing directors for continuing service or re-nomination, which may be affected by, among other things, the quality of their contributions, their attendance records, changes in their primary employment or other business affiliations, the number of boards of publicly held companies on which they serve or other competing demands on their time and attention. While the Board has not established any specific minimum qualifications for director nominees, as indicated in the Company’s corporate governance principles, the directors and any potential nominees should
be individuals of diverse backgrounds who possess the integrity, judgment, skills, experience and other characteristics that are deemed necessary or desirable for the effective performance of the Board’s oversight function. Certain of the skills, qualifications and particular areas of expertise considered with respect to the members of the Board
at the time each Director was nominated are summarized
on page 6 of this proxy statement and in the director biographies found on pages
57 through
89 of this proxy statement.
AlthoughThe Company’s corporate governance principles provide that the Board will be composed of members of diverse backgrounds and, in January 2022, the Board amended the charter of the Nominating & Governance Committee
to include a commitment to have at least 50% of the Board be diverse and to provide that the initial pool of candidates for any Board vacancy shall consist of at least one woman and one person of color. The Nominating & Governance Committee considers
the diversity
of experience, background and expertise of the current
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directors and areas where new directors might add additional perspectives, as
a factorfactors in the selection of Board
nominees. As discussed on page 6 of this proxy statement, if all nine director nominees
are elected to serve as our directors, four of our directors will be women (including our Executive Chair), four of our directors will be people of color and one of our directors will be a member of the
Committee does notLGBTQIA+ community. In connection with the use
formal quantitative or similar criteria with regardof a third-party search firm to identify external candidates who are qualified to serve as potential successors to the Chief Executive Officer, the Board will instruct such third-party search firm to take into consideration the Company’s commitment to diversity
in its selection process.as defined above.
The Nominating & Governance Committee does not have a formal policy on the consideration of director candidates recommended by stockholders. The Board believes that it is more appropriate to provide the Nominating & Governance Committee flexibility in evaluating stockholder recommendations. In the event that a director nominee is recommended by a stockholder, the Nominating & Governance Committee will give due consideration to the director nominee and will use the same criteria used for evaluating Board director nominees, in addition to considering the information relating to the director nominee provided by the stockholder.
To date,
The Company engaged a search firm to assist the Nominating & Governance Committee in identifying and evaluating potential directors, and the search culminated in, based on the recommendations of the Nominating & Governance Committee, the Board’s appointments of Messrs. Bogliolo and Rajlin as new independent directors effective on March 28, 2022.
The Nominating & Governance Committee also develops and recommends to the Board, and regularly reviews, a set of corporate governance principles for the Company
has not engaged third parties to
identify or evaluate or assist in identifying potential director nominees, although the Company reserves the rightensure they reflect evolving best practices, monitors compliance with those principles and stays abreast of developments in the
futurearea of corporate governance. The Nominating & Governance Committee also reviews and periodically makes recommendations to
retainthe Board regarding the structure, practices, policies and activities of the Board and its committees. Each Board committee’s charter is reviewed at least annually. To ensure that the Board and its committees remain effective, the Nominating & Governance Committee oversees a
third-party search firm, if appropriate.robust annual evaluation of the Board and each of its committee and recommends ways to improve performance. At least annually, each of the Audit Committee, the HCC Committee and the Nominating & Governance Committee evaluates its own performance and reports to the Board on such evaluation. The full Board also engages in self-evaluation at least annually. The current members of the Nominating & Governance Committee are Ms. Bellinger (Chair), Ms. Lee and Messrs. Schottenstein and Symancyk. The Board has determined that each of the current Nominating & Governance Committee members is “independent” in accordance with applicable NYSE standards.
The Nominating & Governance Committee held
3four meetings in fiscal year
2015.2021.
The Executive Committee of the Board may exercise, to the fullest extent permitted by law, all of the powers and authority granted to the Board. Among other things, the Executive Committee may declare dividends, authorize the issuance of stock and authorize the seal of the Company to be affixed to papers that require it. The current members of the Executive Committee are
Messrs. Wexner (Chair) and Tessler.Finance Committee
The Finance Committee of the Board periodically reviews the Company’s financial position and financial arrangements with banks and other financial institutions. The Finance Committee also makes recommendations on financial matters that it believes are necessary, advisable or appropriate. The current members of the Finance Committee are Mr. TesslerMs. Nash (Chair), Mr. Hersch, Dr. Kollat, Mr. Loomis, Mrs. WexnerMs. Bellinger and Mr. Zimmerman. However, Mr. Loomis will not serve on the FinanceMessrs. Morris and Steinour.
The Executive Committee
past May 19, 2016, the date that his retirement becomes effective.Inclusion Committee
The Inclusion Committee of the Board is instrumentalheld one meeting in the Board’s fulfillment of its oversight responsibilities relating to, among other things, (i) the Company’s commitment to diversity and inclusion and (ii) the performance of the Company’s Office of Inclusion. The current members of the Inclusion Committee are Mrs. Wexner (Chair), Dr. Gee and Ms. James.
fiscal year 2021.
Meetings of the Company’s Non-Management Directors
The non-management
directors and the independent directors of the Board meet in
regular executive
session in connection with each regularly scheduled Board meeting. Mr. Tessler servessessions. Ms. Nash previously served as the chair of those meetings
which neitherwhen she was the independent Chair of the Board, but ceased doing so in February 2022 when she was appointed as Executive Chair. Executive sessions of our non-management directors and independent directors will now be led by Mr.
Wexner nor Mrs. Wexner attends.Steinour, our Interim Lead Independent Director. Mr. Meslow and, since her appointment as Executive Chair on February 22, 2022, Ms. Nash, do not attend any meetings of the non-management directors or the independent directors.
Communications with Stockholders
We
The Board believes that it is important to understand stockholder perspectives on the Company and foster long-term relationships with stockholders and, to that end, we have a policy of robust engagement with stockholders, includingwith continuing outreach to and dialogue with all of our major investors on a range of issues, including corporate governance matters.matters and environmental and social goals and initiatives. Such engagements with investors have been
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highly constructive.
For example, based on stockholder feedback, we made a number of changes to our compensation program in the past few years, as discussed in more detail under “Compensation-Related Matters—Compensation Discussion and Analysis.” The Board also provides a process for interested parties to send communications to the full Board,
our Executive Chair, our Interim Lead Independent Director, the
other non-management members of the Board
the lead independent director and the members of the Audit Committee. Any director may be contacted by writing to him or her c/o
L Brands,Bath & Body Works, Inc., Three Limited Parkway, Columbus, Ohio 43230 or emailing at
boardofdirectors@lb.comboardofdirectors@bbw.com. Any stockholder wishing to contact Audit Committee members may send an email to
auditcommittee@lb.comauditcommittee@bbw.com. Communications that are not related to a director’s duties and responsibilities as a Board member, a non-management director or an Audit Committee member may be excluded by the Office of the
General Counsel,Chief Legal Officer, including, without limitation, solicitations and advertisements; junk mail; product-related communications; job referral materials such as resumes; surveys; and any other material that is determined to be illegal or otherwise inappropriate. The directors to whom such information is addressed are informed that the information has been removed and that it will be made available to such directors upon request.
Attendance at Annual Meetings
The Company does not have a formal policy regarding attendance by members of the Board at the Company’s annual meeting of stockholders. However, it encourages directors to attend and historically nearly all have done so. All of the then-current Board members,
other than Mr. Leslie H. Wexner and Ms. Abigail S. Wexner, each of whom retired from the Board effective on May 20, 2021, attended the
20152021 annual
meeting, except for Ms. James and Mr. Morris.meeting. Each director is expected to dedicate sufficient time, energy and attention to ensure the diligent performance of his or her duties, including by attending meetings of the Board and the committees of which he or she is a member.
Code of Conduct, Related Person Transaction Policy and Associated Matters
The Company has a code of conduct that is applicable to all employees of the Company, including the
CEOChief Executive Officer and Chief Financial Officer, and to members of the Board. Any amendments to the code or any waivers from any provisions of the code granted to executive officers or directors will be promptly disclosed to stockholders through posting on the Company’s website at
www.lb.comwww.bbwinc.com.
Under the Company’s Related Person Transaction Policy (the “Policy”), subject to certain exceptions, directors and executive officers of the Company are required to notify the
Secretary of the Company of
the existence orany potential
existence of any financial or commercial transaction, agreement or relationship involving the Company in which a director or executive officer,
or his or her immediate family members
or a 5% beneficial owner of the Common Stock has a direct or indirect material interest. Each such transaction must be approved by the Board or a committee consisting solely of independent directors after consideration of all material facts and circumstances.
On July 14, 2021, the Company entered into a terms agreement (the “Underwriting Agreement”) with Leslie H. Wexner and certain affiliated entities named therein (the “Selling Stockholders”) and J.P. Morgan Securities LLC (the “Underwriter”). Under the terms of the Underwriting Agreement, the Selling Stockholders agreed to sell to the Underwriter 20,041,646 shares (the “Securities”) of Common Stock in a registered public offering (the “Secondary Offering”). The Secondary Offering closed on July 19, 2021. On July 13, 2021, the Company entered into a Stock Repurchase Agreement (the “Stock Repurchase Agreement”) with the Selling Stockholders and Abigail S. Wexner, pursuant to which the Company agreed to repurchase an aggregate of 10,000,000 shares of Common Stock from one of the Selling Stockholders for an aggregate purchase price of $730.1 million (the “Stock Repurchase”). The Company
is engaged in several projects designed to increase our speed and agility in producing products that satisfy our customers. Incompleted the
case of our beauty, personal care and home fragrance businesses, the development of supplier facilities in close proximity to our headquarters and distribution facilities in central Ohio has been an integral part of capturing the many business benefits of speed and agility. The New Albany Company (“NACO”), a business beneficially owned byStock Repurchase on July 19, 2021. Mr. and Mrs. Wexner
is inwere members of the
businessBoard until May 20, 2021, and at the time of
developing real estate, including industrial parks, and has sold land (and may in the future sell land) to certain vendors or third party developers in connection with the continuing development of an industrial park focused on the foregoing
business categories (the “Beauty Park”) in New Albany, Ohio. The Audit Committee monitors such vendor and third party transactions,
on an ongoing basis to assure that they are inMr. Wexner was the
best interestsbeneficial owner of more than 5% of the
Company and its stockholders generally.In light of the Company’s highly favorable experience with vendors at the Beauty Park and our growth plans for the beauty, personal care and home fragrance businesses, the Company believes that certain new facilities required to achieve such projected growth should be located as close as possible to the Beauty Park. The Company identified certain land owned by NACO that, together with certain other adjacent parcels owned by a number of third parties in immediate proximity to the Beauty Park, would be desirable for the Company to acquire for future growth. Because of the Wexners’ interest in NACO, the matter was referred to, and evaluated and negotiated by, the Audit Committee in accordance with the Policy. In 2014, the Audit Committee negotiated the purchase of certain NACO land for approximately $21 million, and the assumption from NACO of contracts to purchase certain adjacent parcels directly from third parties for approximately $7 million, and determined that these transactions were fair to and in the best interests of the Company and its stockholders generally. In 2015, certain additional property immediately adjacent to the foregoing parcels became available, and the Company believed that it would be desirable to acquire such property for future growth. This potential transaction was also referred to the Audit Committee for evaluation and, if appropriate, negotiation. The Audit Committee subsequently negotiated with NACO the purchase of such property for approximately $5.3 million, and an existing building located in New Albany that was historically associated with the Bath & Body Works brand for approximately $250,000, and determined that these transactions were fair to and in the best interests of the Company and its stockholders generally. The determinations made by the Audit Committee in 2014 and 2015 under the Policy with respect to these transactions between the Company and NACO were made in reliance on,
among other things, advice from independent counsel and real estate appraisers and advisors, including opinions received from an independent financial advisor with specialized expertise in commercial real estate that such transactions were fair to the Company from a financial point of view.
Common Stock.
Copies of the Company’s Code of Conduct, Corporate Governance Principles, Policy and Committee Charters
The Company’s code of conduct, corporate governance principles and Policy, as well as the charters of the Audit Committee, CompensationHCC Committee and Nominating & Governance Committee, of the Board, are available on the Company’s website atwww.lb.comwww.bbwinc.com. Stockholders may also request a copy of any such document from: L Brands,Bath & Body Works, Inc., Attention: Investor Relations, Three Limited Parkway, Columbus, Ohio 43230.
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PROPOSAL 2: RATIFICATION OF THE APPOINTMENT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee has appointed Ernst & Young LLP to serve as the Company’s independent registered public accountants for the fiscal year ending January 28, 2017.2023. Ernst & Young LLP has been retained as the Company’s independent registered public accountants continuously since 2003.
The Audit Committee is responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accountants. The Audit Committee is responsible for approving the fees associated with the Company’s retention of Ernst & Young LLP. In accordance with the Commission’s rules, Ernst & Young LLP’s lead engagement partner rotates every five years. The Audit Committee is directly involved in the selection of Ernst & Young LLP’s lead engagement partner. In addition, the Audit Committee evaluates Ernst & Young LLP’s qualifications, performance and independence and presents its conclusions on these matters to the Board on at least an annual basis, and annually considers whether to continue its engagement of Ernst & Young LLP.
The members of the Audit Committee and the Board believe that the continued retention of Ernst & Young LLP to serve as the Company’s independent registered public accountants is in the best interests of the Company and its stockholders. We are asking you to ratify
thisErnst & Young LLP’s appointment, although your ratification is not required. A representative of Ernst & Young LLP will be present at the meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions.
Additional information concerning the Company’s engagement of Ernst & Young LLP is included on
page 58.pages 3 and 60 of this proxy statement.
The Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accountants.
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PROPOSAL 3:
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO REMOVE SUPERMAJORITY VOTING REQUIREMENTSBackground; Governance Considerations
This proposal is being submitted to stockholders following a vote at the Company’s 2015 annual meeting on a stockholder proposal addressing the same topic. While the stockholder proposal last year did not receive sufficient votes to implement the change, it did receive a majority vote. Accordingly, consistent with its strong commitment to the careful consideration of stockholder views and recognizing that there are different perspectives on the issue of supermajority voting requirements, the Board has elected to submit the proposal described below to a stockholder vote.
The Board has evaluated the Company’s voting requirements on numerous occasions to ensure that they are in the best interests of the Company and its stockholders. In this regard, the Board has consistently determined that the retention of a supermajority vote standard for certain extraordinary matters is the best way to ensure that the interests of all stockholders are fully protected. The Board has consistently concluded that extraordinary transactions and fundamental changes to corporate governance should have the support of a broad consensus of the Company’s stockholders rather than just a simple majority, and that supermajority vote requirements protect stockholders against the potentially self-interested actions of short-term investors. The Board has also concluded that the Company’s existing supermajority voting provisions encourage persons or firms making unsolicited takeover proposals to negotiate directly with the Board, which provides the Board with increased leverage in the exercise of its fiduciary duties to negotiate the best possible return for stockholders, and which prevents the use of potentially coercive or abusive takeover tactics.
On the other hand, the Board is aware that certain stockholders and institutions disagree. These entities generally argue that a majority stockholder vote should be sufficient for any corporate action requiring stockholder approval, regardless of the considerations outlined above. This proposal reflects the Board’s determination to respond to, and address, that difference in perspective.
Proposed Amendment
If approved, the proposal would amend the Company’s Restated Certificate of Incorporation (the “Charter”) to provide for the elimination of each voting requirement that calls for a greater than simple majority vote (the “Amendment”).
Under the Company’s existing governance documents, a simple majority vote requirement already applies to most matters submitted for stockholder approval. The Charter provides that a supermajority vote of the stockholders is required to approve actions related to a small number of fundamental matters of corporate structure and governance. These matters are as follows: (i) approval of certain business combinations with an individual, entity or group that collectively owns 20% or more of the Company’s voting securities (an “interested stockholder”); (ii) approval of certain fundamental transactions with any corporation that, together with its affiliates, owns 5% or more of the Company’s voting securities, including mergers or a sale of substantially all of the Company’s assets; (iii) dissolution of the Company; (iv) removal of a director for cause; (v) an alteration, amendment or repeal of the Company’s Bylaws or any amendment to the Charter that contravenes any existing Bylaw of the Company; and (vi) an amendment of certain provisions in the Charter.
If the proposed Amendment is adopted, each of the foregoing supermajority voting requirements would be removed from the Charter. Instead, any matter voted on at any meeting of the stockholders would be decided by either the majority in voting interest of the stockholders voting on such matter or, in the case of certain business combinations with an interested stockholder, a majority of the outstanding shares of the Company excluding (except under certain circumstances) those held by the interested stockholder, unless otherwise provided by law. The default voting requirement in the Company’s Bylaws, contained in Section 1.10(c) therein, states, “At any
meeting of the stockholders all matters, except as otherwise provided in the certificate of incorporation, in these bylaws, or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and voting thereon, a quorum being present.” The Company’s Bylaws do not have any provisions containing supermajority voting requirements.
The text of the proposed Amendment, which would remove Articles EIGHTH and THIRTEENTH and Section 2 of Article FIFTH and Section 1 of Article ELEVENTH of the Charter in their entirety, and modify Articles TENTH and TWELFTH and Section 2 of Article ELEVENTH of the Charter, is attached as Appendix A to this proxy statement.
Required Vote
For the Amendment to become effective, this proposal must receive the affirmative vote of at least 75% of the outstanding shares of the Company entitled to vote at the annual meeting. If the proposal is approved by the required stockholder vote, the Board will take the necessary steps to amend the Charter as set forth in Appendix A. If the Amendment does not receive this level of stockholder approval, the Amendment will not be implemented and the Company’s current voting requirements will remain in place.
Board Recommendation
The Board continues to believe that the retention of the Company’s existing supermajority voting requirements for certain extraordinary matters provides stockholders with very meaningful protections against actions that may not be in their best interests. On the other hand, the Board recognizes that certain stockholders and institutions disagree and also believes that responsiveness to this perspective is an important matter of corporate governance. Accordingly, after careful consideration of the issue in accordance with its fiduciary duties, the Board has determined, in recognition of last year’s vote, to recommend a vote to approve the Amendment.
While the Board believes there is a strong argument to the contrary, the Board has elected to recommend that stockholders vote FOR the proposed Amendment in recognition of the stockholder vote at the Company’s 2015 annual meeting.
PROPOSAL 4: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection
Section 14A of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), requires us to provide an advisory stockholder vote to approve the compensation of the Company’s named executive officers (“NEOs”), as such compensation is disclosed pursuant to the disclosure rules of the Commission. After the Company’s
20112017 annual meeting, the Board determined to hold this advisory “say-on-pay” vote every year. Accordingly, the Company is providing its stockholders with the opportunity to cast an advisory vote on the fiscal
2015year 2021 compensation of our NEOs as disclosed in this proxy statement, including the Compensation Discussion and Analysis (the “CD&A”), the compensation tables and other narrative executive compensation disclosures.
Stockholders are being asked to vote on the following resolution:
“RESOLVED, that the stockholders approve the compensation of the Company’s executive officers named in the
20152021 Summary Compensation Table, as disclosed pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures).”
In fiscal 2015,
Fiscal year 2021 was a year with strong momentum across both our stores and direct channels. Performance was driven by the exceptional efforts of our leadership team who delivered a merchandise assortment that resulted in a positive customer response and an increasingly loyal and growing customer base. This resulted in adjusted operating income that significantly exceeded expectations and goals set at the beginning of each of our seasons justifying above target payouts for our short-term performance-based incentive compensation. A substantial portion of the long-term incentives granted to our NEOs are subject to challenging performance requirements that will only be earned if the Company delivered its fifth straightachieves rigorous growth, profitability and return metrics that provide incentive for a balance of growth and profitability, support the strategic direction of the Company, and alignment with the interests of our stockholders.
Fiscal year
2021 was yet another transformational year for our Company, as we successfully navigated the separation of
best-ever adjusted salesVictoria’s Secret & Co. into a separate, stand-alone business, creating long-term value for our stockholders. This transaction would not have been achievable without the leadership and
earnings, resultingexpertise of our senior leadership team. In 2020, the HCC Committee approved special, one-time cash retention awards to certain executive officers in
order to ensure long-term retention and continuity of key leadership during particularly turbulent times for our business brought on by the onset of the COVID-19 pandemic and uncertainty surrounding the form and timing for separating the Victoria’s Secret business. These awards were a
total shareholder returncritical tool to ensure stability, the long-term health of
19%our business and
an increasethe preservation of stockholder value. In addition, Stuart B. Burgdoerfer, our former Executive Vice President and Chief Financial Officer, indicated his intention to retire in
February 2021 and, at the request of the Board, agreed to continue in the role of Executive Vice President and Chief Financial Officer through the completion of the Separation to serve as the Company executive overseeing and leading the Separation process (including evaluating strategic options for the disposition of the Victoria’s Secret business that would best serve stockholder interests and to ensure the successful completion of the Separation, as well as to minimize distraction for others of our
stock priceleadership team who were performing critical roles for the business). In recognition of
14%. Mr. Burgdoerfer’s continued leadership during this critical time, Mr. Burgdoerfer was provided with certain payments in fiscal year 2021, the terms of which are described in the “Compensation Discussion and Analysis” section beginning on page 26 of this proxy statement. We
believe in paying forremain committed to aligning executive compensation with performance and
making decisions that drive our
compensation program requires superior performance for our NEOs to earn performance-based incentives at target. Base salariesbusiness goals and
targeted long term performance-based equity incentive compensation forserve both the
NEOs increased from fiscal 2014 to 2015, in recognition of their continued success in the difficult challenge of beating our best-ever results. Short term performance-based cash incentive compensation increased in connection with operating income performance that surpassed our stretch goals.NEO base salariesshort- and short term performance-based incentive compensation targets for fiscal 2015 were set in March 2015 based on fiscal 2014 performance and our goals for 2015. With the goal of providing incentives for continued superior performance, the Compensation Committee took the following actions:
Awarded Mr. Wexner performance-based stock awards in January 2016 with a target value of approximately $14.1 million based on the achievement of financial and strategic goals during fiscal 2015 and stock performance that ranks in the top threelong-term interests of our peer companies and exceeds the S&P 500 Index by 22 percentage points.
stockholders.Increased the base salary for each of the NEOs for the first time in at least two years (seven years in the case of Mr. Wexner) based on our growth and accomplishments in the last several fiscal years, including continued record-setting sales and earnings performance in fiscal 2013 and fiscal 2014.
Increased short term performance-based incentive compensation targets for each of the NEOs to incent future performance and further leverage their compensation.
Increased the target value of performance-based Restricted Stock Units (“RSUs”) awarded to NEOs other than Mr. Wexner in April 2015 to recognize our record-setting financial performance in fiscal 2014, provide significant retentive value for these NEOs and incent future performance.
Set short term incentive compensation goals at targets that require continued growth in operating income over record fiscal 2014 results.
Continued the cumulative, long-term, relative performance measure required for NEOs to earn RSUs.
While both total shareholder return and total CEO compensation have increased over the last four years as a result of the Company’s outstanding performance, the Company’s increase in stockholder return, including reinvested dividends, exceeds the rate of increase in total CEO compensation (as disclosed in further detail in the CD&A).
Although the advisory stockholder vote on executive compensation is non-binding, the CompensationHCC Committee has considered and will continue to consider the outcome of the vote and feedback received from stockholders when making future compensation decisions for NEOs. We have a policyIn 2021, 93.3% of robust engagement with stockholders, including continuing outreach to and dialogue with all of our major institutional stockholders. Basedthe shares voting on the strong support from, as well as feedback from our engagement with, major stockholders, we did not make structural changes toproposal voted in favor of our executive compensation program in fiscal 2015. We have made a number of changes to our compensation program in previous years in accordance with our corporate governance principles and/or in response to stockholder and advisory group feedback, including:
program.Eliminating tax gross-ups for NEOs upon a change in control.
Instituting a “no hedging” policy governing stock trading.
Establishing a policy that discourages pledging of Company stock and requires advance approval of our General Counsel.
Establishing a policy prohibiting the future issuance of “single trigger” equity awards.
Establishing a clawback policy.
Establishing stock ownership guidelines set at five times base salary for our CEO, three times base salary for other NEOs and four times the annual stock retainer for Board members.
These changes, along with our continued strong performance, were important factors in achieving 91% stockholder support for our 2015 advisory vote on executive compensation. Given this strong level of support, the Compensation Committee has concluded that a large majority of our stockholders support our existing compensation program.
Please refer to the CD&A for a detailed discussion of the Company’s executive compensation principles and practices and the fiscal 2015year 2021 compensation of our NEOs.
Board Recommendation
We continue to deliver extraordinary returns and are committed to creating long term value for our stockholders. The Company’s fifth straight year of record-setting sales and earnings was led by our NEOs who are incented to perform by our compensation program and its connection to results. In summary, we see
There is alignment between our performance, our stockholders’ interests and our
pay.TheNEOs’ pay; therefore, the Board recommends a vote FOR this proposal.
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PROPOSAL 4: APPROVAL OF THE BATH & BODY WORKS, INC. ASSOCIATE STOCK PURCHASE PLAN
The Board previously approved the Bath & Body Works, Inc. Associate Stock Purchase Plan on March 10, 2022 to be effective May 12, 2022, subject to stockholder approval. If approved, the initial offering period under the ASPP is expected to commence on January 1, 2023. The following is a summary of the material features of the ASPP and its operation. This summary does not purport to be a complete description of all the terms of the ASPP and is qualified in its entirety by reference to the full text of the ASPP, a copy of which is attached as Appendix A to this proxy statement.
Summary of the ASPP
The purpose of the ASPP is to provide eligible employees of the Company and the designated participating companies with an opportunity to acquire an interest in the Company through the purchase of Common Stock at a discount price through payroll deductions. The ASPP has two components: (i) one component that is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code (the “Code”) (such component, the “423 Component”); and (ii) the other component (the “Non-423 Component”) which is not intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. The Non-423 Component authorizes the HCC Committee to grant options to purchase Common Stock pursuant to the rules, procedures, or sub-plans adopted by the HCC Committee from time to time that may be designed to achieve certain tax, securities laws, or other objectives for eligible employees, as determined in the discretion of the HCC Committee.
Eligibility
Generally, all employees of the Company and participating companies designated by the HCC Committee who have completed six months of continuous employment are eligible to participate in the ASPP; provided that employees who own (or are deemed to own as a result of applicable attribution rules) stock constituting 5% or more of the total combined voting power or value of all classes of our stock or any of our subsidiaries are not permitted to participate in the ASPP. The HCC Committee may, in its discretion, exclude the following categories of employees from participation: (i) certain “highly compensated employees” (within the meaning of Section 414(q) of the Code); (ii) employees who customarily work 20 hours or less per week; (iii) employees whose customary employment is for not more than five months in any calendar year; or (iv) employees who have been employed less than two years. In addition, employees who are citizens or residents of a non-U.S. jurisdiction may be excluded from participation in the ASPP or an offering under the ASPP if the participation of such employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the ASPP or an offering to violate Section 423 of the Code. Non-employee directors of the Company are not eligible to participate in the ASPP. In the case of the Non-423 Component, eligible employees may be excluded from participation in the ASPP or an offering if the HCC Committee determines that participation of such eligible employees is not advisable or practicable.
The Board has determined that employees of the following subsidiaries and affiliates of the Company will be eligible to participate in the ASPP: Bath & Body Works Brand Management, Inc.; Bath & Body Works Direct, Inc.; Bath & Body Works, LLC; Bath & Body Works Logistics Services, LLC; beautyAvenues, LLC; L Brands Service Company, LLC; and Retail Store Operations, Inc. The HCC Committee has the discretion to designate the subsidiaries and affiliates of the Company that will be participating companies under ASPP. The HCC Committee also has the discretion to revoke any subsidiary or affiliate designated as a participating company at any time and from time to time.
Administration
The ASPP will be administered by the HCC Committee. Subject to the provisions of the ASPP, the HCC Committee will have full authority and discretion to construe and interpret the ASPP, prescribe, amend, and rescind rules relating to the administration of the ASPP, and take any other actions necessary or desirable for the administration of the ASPP including, without limitation, adopting sub-plans and special rules applicable to participating companies, which sub-plans or special rules may be designed to be a Non-Section 423 Component. The decisions of the HCC Committee are, to the full extent permitted by law, final and binding on all persons.
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Shares Available for Issuance
An aggregate total of 2,400,000 shares of Common Stock will be reserved for issuance under the ASPP, subject to adjustment as provided in the ASPP (as described below). The Common Stock may be newly issued shares, treasury shares, or shares acquired on the open market. If any purchase of shares pursuant to an option under the ASPP is not consummated, the shares not purchased under such option will again be available for issuance under the ASPP. Any or all shares of Common Stock reserved for issuance under the ASPP may be granted under the Section 423 Component.
Enrollment and Participation
An eligible employee may elect to participate in the ASPP by completing an enrollment form before the start of an offering period, which may be written or electronic, and following the electronic or other enrollment procedures established by the HCC Committee. Participation in the ASPP is voluntary. Participating employees may generally contribute up to 10% of their eligible compensation to the ASPP. Eligible compensation for purposes of the ASPP generally means the employee’s base salary or wages before deduction for any salary deferred contributions made by the employee to any tax-qualified retirement plan or non-qualified deferred compensation plan, but excludes cash or equity-based incentive compensation, bonuses, or other similar payments. The HCC Committee may change the definition of eligible compensation on a prospective basis. Contributions are made on an after-tax basis. A participant may not increase or decrease the participant’s rate of payroll deductions for an offering period after such offering period begins. However, a participant may increase or decrease the participant’s rate of payroll deductions for future offering periods by submitting a new enrollment form and following the procedures established by the HCC Committee.
No employee will be granted a right to purchase Common Stock under the ASPP (i) if such employee, immediately after such grant, would own stock constituting 5% or more of the total combined voting power or value of all classes of our stock or any of our subsidiaries or (ii) to the extent that the employee’s rights to purchase stock under our ASPP accrues at a rate which exceeds $25,000 worth of Common Stock (determined by the fair market value of the shares at the time such purchase right is granted) for each calendar year in which the purchase right is outstanding. In addition, no employee will be permitted to purchase during each offering period more than 1,000 shares of Common Stock (or such other maximum number of shares as the HCC Committee may establish from time to time), subject to adjustment pursuant to the terms of the ASPP.
Withdrawal and Termination of Employment
A participant may withdraw from an offering by submitting a revised enrollment form indicating the participant’s election to withdraw at least 30 days before the purchase date. Upon withdrawal, any amounts remaining in the participant’s account which have not been used to purchase shares will be refunded to the participant as soon as administratively practicable. A participant who has withdrawn from an offering period may not participate again in that same offering.
Upon a participant’s termination of employment for any reason or change in status to a non-eligible employee category prior to the purchase date, participation in the ASPP will immediately terminate. If the participant’s termination or change in status occurs at least 30 days before the purchase date, the payroll deductions in the participant’s account will be returned. If the termination or change in status occurs less than 30 days before the purchase date, the participant will not be treated as having withdrawn from the offering and the payroll deductions in the participant’s account will be used to purchase shares of Common Stock on the purchase date, and the participant will withdraw from the next offering.
Offering Period
The ASPP provides for separate offering periods of up to 27 months in duration. The length of each offering period will be determined by the HCC Committee prior to the commencement of such offering period. The HCC Committee shall have, prior to the commencement of a particular offering period, the authority to change the duration, frequency, and start and end dates of the offering periods. Thus, there may be multiple purchase periods in any offering period. The Company may have more than one offering period in effect at any time. It is anticipated that the first offering period and first purchase period will be six months in duration, with new offering periods commencing on or about January 1 and July 1 of each year. If the ASPP is approved by the stockholders, the initial offering period under the ASPP is expected to commence on January 1, 2023.
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Purchase Price and Shares Purchased
On the last trading day (i.e., any day on which the NYSE is open for trading) of each purchase period, the employee will be deemed to have exercised the right to purchase as many shares of Common Stock as the employee’s payroll deduction will allow at the purchase price, subject to the limits set forth in the ASPP. The purchase price for each purchase period will be equal to 85% of the fair market value of our shares of our Common Stock on the last trading day of the applicable purchase period. The fair market value of our shares of Common Stock for purposes of the ASPP is the closing price of the shares on the NYSE on the day in question.
Adjustment Upon Changes in Capitalization; Dissolution or Liquidation; Corporate Transactions
In the event of any change in the structure of the Company affecting our shares of Common Stock, such as a dividend or other distribution (whether in the form of cash, shares, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares of Common Stock or other securities of the Company, or other similar event, the HCC Committee will make, in such manner as it may deem equitable, an appropriate adjustment in the number, class, and purchase price of shares available for purchase under the ASPP, and in the number of shares an employee is entitled to purchase.
In the event of a proposed dissolution or liquidation of the Company, unless otherwise determined by the HCC Committee, the offering period then in effect will be shortened by setting a new exercise date on which the offering period will end immediately before the proposed dissolution or liquidation. Alternatively, the HCC Committee may elect to terminate the current offering period in accordance with the ASPP.
In the event of a merger, consolidation, acquisition of property or stock, separation, reorganization or other similar corporate event, each outstanding right to purchase shares will be assumed or an equivalent right will be substituted by the successor corporation (or a parent or subsidiary of the successor corporation), unless the successor corporation refuses to assume or substitute the right to purchase. If the successor corporation refuses to assume or substitute the right to purchase, the offering period then in effect will be shortened by setting a new exercise date on which the offering period will end. Alternatively, the HCC Committee may elect to terminate the current offering period in accordance with the ASPP.
Transferability
No participant is permitted to assign, transfer, pledge, or otherwise dispose of either the payroll deductions credited to the participant’s account or any rights regarding the exercise right to purchase our shares under the ASPP, other than by will or the laws of descent and distribution.
Amendment and Termination
The HCC Committee may, in its sole discretion, at any time and for any reason, amend, suspend or terminate the ASPP (subject to any applicable stockholder approval requirements). The ASPP will become effective on May 12, 2022 if approved by our stockholders and will continue for a term of 10 years following such effective date, subject to earlier termination at the discretion of the HCC Committee.
Federal Income Tax Consequences
The following is a summary of the general U.S. federal (and not local, state, or foreign) income tax consequences under the 423-Component based on current U.S. federal income tax law. The following discussion does not purport to be complete and does not discuss the tax consequences of a participant’s death or the income tax laws of any state or foreign country in which a participant may reside. The applicable tax law provisions and related regulations concerning these matters are complicated, and their impact in any one case may depend upon the circumstances. Eligible employees should consult their own tax advisors.
The rights of participants to make purchases under the 423-Component are intended to qualify under the provisions of Section 423 of the Code. Assuming such qualification, no income will be taxable to a participant at the time of grant of the right to purchase, or at the time of purchase, of the shares. However, a participant may become liable for tax upon the sale or other disposition of shares purchased under the ASPP, and the tax consequences will generally depend upon the holding period of such shares prior to the sale or other disposition.
If the shares are disposed of (i) more than two years after the date of the beginning of the offering period and (ii) more than one year after the shares are purchased in accordance with the ASPP (the “option holding period”),
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the participant will generally recognize ordinary income upon the sale or other disposition of the shares equal to the difference between the fair market value of the shares on the applicable date of exercise and the option price. Any gain in excess of that amount will be characterized as capital gain. If the shares are disposed of prior to the expiration of the option holding period, the participant will recognize, as ordinary income, the difference between the fair market value of the shares on the applicable date of exercise and the option price. Any gain in excess of that amount will be characterized as capital gain and will qualify for long-term capital gain treatment if the shares have been held for more than one year following the exercise of the right to purchase. If the shares are sold for an amount that is less than their fair market value as of the exercise date, the participant will recognize ordinary income equal to the excess of the fair market value of the shares on the exercise date over the purchase price, and the participant may recognize a capital loss equal to the difference between the sales price and the value of such shares on the exercise date.
The Company will not be entitled to a federal income tax deduction with respect to the grant or exercise of an option unless the participant disposes of the shares acquired thereunder prior to the expiration of the option holding period. In that event, the employer corporation (the Company or a participating company) generally will be entitled to a federal income tax deduction equal to the amount of ordinary income recognized by the participant.
Registration with the SEC
If our stockholders approve the ASPP, we will file a registration statement on a Form S-8 with the Commission, as soon as reasonably practicable after such approval, to register the shares for issuance under the ASPP.
New Plan Benefits
The amounts of future purchases under the ASPP are not determinable because participation is voluntary, participation levels depend on each participant’s elections and the restrictions of Section 423 of the Code and the ASPP, and the per-share purchase price depends on the future value of our shares of Common Stock.
Equity Compensation Plan Information
The following table presents certain information with respect to our equity compensation plans as of January 29, 2022, as required by Item 201(d) of Regulation S-K under the Exchange Act.
Equity compensation plans approved by security holders(1) | | | 5,211,136 | | | $46.15(2) | | | 13,452,369 |
Equity compensation plans not approved by security holders | | | — | | | — | | | — |
Total | | | 5,211,136 | | | $46.15 | | | 13,452,369 |
(1)
| Includes the following plans: the 2020 Stock Option and Performance Incentive Plan; the 2015 Stock Option and Performance Incentive Plan (the “2015 Plan”); and the 2011 Stock Option and Performance Incentive Plan (the “2011 Plan”). There are no shares remaining available for grant under the 2015 Plan or the 2011 Plan. |
(2)
| Does not include outstanding rights to receive Common Stock upon the vesting of restricted stock unit awards or settlement of deferred stock units. |
The Board recommends a vote FOR the approval of the Bath & Body Works, Inc. Associate Stock Purchase Plan.
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PROPOSAL 5: STOCKHOLDER PROPOSAL
ON PROXY ACCESSTO REDUCE THE OWNERSHIP THRESHOLD FOR CALLING SPECIAL MEETINGS OF STOCKHOLDERS
John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach,
CACalifornia 90278, owner of 90 shares of Common Stock, has notified the Company that he intends to submit the following proposal at this year’s
annual meeting:
Proposal
5—5 – Special Shareholder
Proxy AccessRESOLVED: Meeting Improvement
Shareholders ask our board
to take the steps necessary to amend the appropriate company governing documents to give the owners of
directors to adopt, and present for shareholder approval, a
“proxy access” bylaw as follows:Require the Company to include in proxy materials prepared for a shareholder meeting at which directors are to be elected the name, Disclosure and Statement (as defined herein)combined 10% of any person nominated for election to the board by a shareholder or an unrestricted number of shareholders forming a group (the “Nominator”) that meets the criteria established below.
Allow shareholders to vote on such nominee on the Company’s proxy card.
The number of shareholder-nominated candidates appearing in proxy materials should not exceed one quarter of the directors then serving or two, whichever is greater. This bylaw should supplement existing rights under Company bylaws, providing that a Nominator must:
a) have beneficially owned 3% or more of the Company’sour outstanding common stock including recallable loanedthe power to call a special shareholder meeting.
Shareholders need a more reasonable stock
continuouslyownership to call a special shareholder meeting to help make up for
the use of online shareholder meetings that give management more control at
least three years before submitting the nomination;b) give the Company, within the time period identified in its bylaws, written noticea shareholder meeting. The vast majority of 2021 online shareholder meetings dictated that absolutely no shareholders could speak.
Although it now takes a theoretical 25% of all shares to call for a special shareholder meeting, this translates into 32% of the
information required by the bylaws and any Securities and Exchange Commission (SEC) rules about (i) the nominee, including consent to being named in proxy materials and to serving as director if elected; and (ii) the Nominator, including proof it owns the requiredBath & Body Works shares
(the “Disclosure”); andc) certify that (i) it will assume liability stemming from any legal or regulatory violation arising out of the Nominator’s communications with the Company shareholders, including the Disclosure and Statement; (ii) it will comply with all applicable laws and regulations if it uses soliciting material other than the Company’s proxy materials; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business, not to change or influence controltypically vote at the Company.
The Nominator may submit withannual meeting. It would be hopeless to think that the Disclosure a statement not exceeding 500 words in support of the nominee (the “Statement”). The Board should adopt procedures for promptly resolving disputes over whether notice of a nomination was timely, whether the Disclosure and Statement satisfy the bylaw and applicable federal regulations, and the priority given to multiple nominations exceeding the one-quarter limit. No additional restrictionsshares that do not applyhave time to other board nominees should be placed on these nominationsvote at the annual meeting would have the time to take the special procedural steps to call for a special shareholder meeting.
32% of shares could represent the voice of well over 40% of shares when one considers that many shareholders may support the call for a special meeting but do not have the time for the paperwork or
re-nominations.Proxy access would “benefitmake minor, but disqualifying, paperwork errors which are easy to make.
Many companies provide for both the marketsa shareholder right to call a special shareholder meeting and corporate boardrooms,a shareholder right to act by written consent. BBWI shareholders have no right to act by written consent.
Southwest Airlines and Target are companies that do not provide for shareholder written consent and yet provide for 10% of shares to call for a special shareholder meeting.
A reasonable shareholder right to call for a special shareholder meeting in our bylaws will help ensure that management engages with
little cost or disruption,” raising US market capitalizationshareholders in good faith because shareholders will have a viable Plan B by
up to $140 billion. This is according tocalling for a
cost-benefit analysis by the Chartered Financial Analyst Institute,Proxy Access in the United States: Revisiting the Proposed SEC Rule.special shareholder meeting. Our bylaws give no assurance that any shareholder engagement will take place.
Please vote
to enhance shareholder value:yes:
Special Shareholder
Proxy Access—Meeting Improvement – Proposal 5
Our Response—Statement in Opposition to Stockholder Proposal
on Proxy Accessto Reduce the Ownership Threshold for Calling Special Meetings of Stockholders
The Board has carefully considered the above proposal and believes that it is not in the best interests of our stockholders,
and that our existing corporate governance practices, including the existing right of our stockholders to
implement proxy access at this time.call a special meeting, ensure Board and management accountability to our stockholders. Consequently, the Board recommends a vote AGAINST the proposal.
Key Reasons to Vote Against this Proposal
Our stockholders already have a meaningful right to call a special meeting – as few as three Company stockholders could reach our 25% threshold based on our ownership composition as of December 31, 2021.
The Board reviewed10% threshold that is proposed is lower than the majority of S&P 500 companies incorporated in Delaware that offer stockholders the right to call special meetings.
The 10% threshold that is proposed could be reached by as few as one Company stockholder based on our ownership composition as of December 31, 2021, which could lead to abuse or unnecessary disruption.
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Special meetings require substantial expenses and resources that should only be called upon in extraordinary circumstances.
We have strong corporate governance
landscape and believes that while many investors have strong views on proxy access, there is no current consensus on this issue. Some investors oppose proxy access altogether. Among those who favor proxy access, there are different views on the most appropriate way to implementpractices, including proxy access and
these views continuean existing special meeting right, which afford stockholders powerful levers to
evolve, including onhold directors accountable and pursue appropriate
thresholds and procedures around proxy access. In reviewing the proxy access provisions of the companies that have adopted proxy access to date, we have seen different practices emerge. The Board believes that our approach towards proxy access should be developed in a careful and thoughtful fashion that is guided by a review of corporate governance developments and consideration of all potential consequences.In addition, the Board believes that the current proposal contains provisions that are not in line with the adoptions of proxy access to date and raises concerns about whether it properly balances the interests of all stockholders. The proposal does not limit the number of stockholders that can form a group to reach the 3% ownership threshold, while we believe that most companies that have adopted proxy access to date have imposed a limit on the number of stockholders in a group. Further, the proposal lacks basic protective provisions. The proposal does not require that proxy access nominees have no affiliations with a competitor of the Company, nor does the proposal require nominees to be independent or to satisfy legal requirements applicable to directors of the Company.
While we will review whether the implementation of proxy access would further enhance our corporate governance practices, the Board believes that the Company’s existing corporate governance practices allow stockholders to put forward potential director nominees and ensure the responsiveness and accountability of incumbent directors.
There are several avenues for stockholders to put forward potential director nominees. First, stockholders may submit names of potential director nominees directly to the Board for consideration, and the Nominating & Governance Committee will use the same criteria to evaluate such candidates as for other candidates considered by the Board. Second,matters when necessary.
Our stockholders already have the power, subjecta meaningful right to the requirements in the Company’scall a special meeting.
Our Bylaws
to directly nominate and solicit proxies for their own director nominees at annual meetings of stockholders. Third,already provide that any stockholders who
holdtogether own an aggregate of at least 25% of the
voting poweroutstanding shares of
our Common Stock may call a special meeting. This threshold can be achieved by as few as three Company stockholders based on our ownership composition as of December 31, 2021. We believe this 25% threshold is appropriate and aligned with our stockholders’ interests. Our 25% threshold is designed to strike the
outstanding stock of the Companyproper balance between ensuring that stockholders have the
power, subjectability to
the requirements in the Company’s Bylaws, to requestcall a special meeting to
consider stockholder-sponsored actions, including actionsvote on matters that are important to a meaningful percentage of our stockholders that arise between annual meetings, while protecting against the risk that a small minority of stockholders could trigger the significant expense and disruption of a special meeting. A lower threshold could allow stockholders with
respectnarrow or special interests to
directors.Other existing corporate governance practicespursue matters that are not widely viewed as requiring immediate attention or that are being pursued for reasons that may not be in the best interests of the Company promote director accountability and responsivenessor our stockholders generally.
Based on our analysis of S&P 500 companies incorporated in Delaware that allow stockholders to stockholders. In uncontested elections, directors are elected only if they receive acall special meetings, 25% is the most common ownership threshold. Based on our analysis of S&P 500 companies incorporated in Delaware that allow stockholders to call special meetings, we believe that the majority of S&P 500 companies that allow stockholders to call special meetings do not have an ownership threshold as low as 10%. We believe that we are therefore within the votes cast, and incumbent directors are required to offer to resign if they fail to receive suchmainstream of special meeting rights at S&P 500 companies.
At a vote fromlower threshold, special-interest groups or potentially even a single stockholder could abuse the stockholders. Further, stockholders may communicate directly with the Board as described under “Proposal 1: Election of Directors—Communications with Stockholders.” Stockholders also have thestockholder right to submit proposals for considerationcall a special meeting.
Given our heavily institutional stock ownership, the failure by a special meeting proponent to convince holders of at
an annual meeting and for inclusion in the Company’s proxy statement, subject to the rules and regulationsleast 25% of the
Commission.The Board also believesoutstanding shares of our Common Stock to support a special meeting would be a strong indicator that most stockholders do not believe that a special meeting is warranted. Lowering the current procedure, whereby the Nominating & Governance Committee is responsiblethreshold for helping the Board to identify potential nominees whocalling special meetings could allow disruptions by special-interest stockholder groups with agendas that are qualified to serve on the Board, has worked well and continues to work well for our Company. The historical performance of the Company, including its fifth straight year of record-setting adjusted sales and earnings in 2015, led by a Board selected based on the above considerations, demonstrates the effectiveness of the Board’s current director nominee selection process.
Board Recommendation
After careful consideration of this proposal, the Board believes that it is not in the best interests of the Company or of our stockholders generally.
Moreover, in addition to our 25% ownership threshold for special meetings to be called by our stockholders, special meetings of stockholders may be called by the Chair of the Board, the Vice Chair of the Board, if any, or in the case of the death, absence or disability of the Chair of the Board, by certain executive officers of the Company, each of whom has a fiduciary duty under the law to act in the best interests of the Company and itsour stockholders as a whole. The proposal’s 10% ownership threshold would permit a small group of stockholders (or even a single stockholder) who have no duty to act in the best interests of the Company or our stockholders at-large to use the extraordinary measure of a special meeting to serve a potentially narrow self-interest. Such a low threshold gives a small minority of stockholders the unlimited power to call a special meeting and opens the door to potential abuse and waste of corporate resources.
Special meetings require substantial expenses and resources.
Special meetings are generally intended for extraordinary company business, such as when fiduciary or strategic considerations require that the matter be addressed on an expeditious basis that cannot wait until the next annual meeting of stockholders. Given our size and the number of our stockholders, a special stockholder meeting is a significant undertaking that requires substantial company expense and Board and management resources. These expenses and resources are required whether we hold a special meeting in-person or virtually, and we historically have held our stockholder meetings in person.
We must pay to prepare, print and distribute disclosure documents to our stockholders, solicit proxies, hold the meeting and tabulate votes. In addition, the Board and management must divert time and focus from their responsibility of managing the Company on behalf of all stockholders to implementprepare for and conduct the special meeting. Such time and focus are appropriate if a reasonably large representation of our stockholders support holding a special
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meeting. However, a low 10% threshold risks that special meetings will be called for reasons not in the best interests of our stockholders generally, therefore detracting from our Board’s and management’s primary focus of maximizing long-term financial returns for our stockholders and leading and operating our business in the best interests of our stockholders.
Our existing corporate governance practices and policies ensure Board accountability and are responsive to the concerns of our stockholders.
The proposed 10% threshold not only enables a small minority of our ownership to force the Company to take what is an extraordinary action, but such a low threshold is unnecessary in light of our existing corporate governance practices and our demonstrated, ongoing commitment to engagement with our stockholders. As discussed under “PROPOSAL 1: ELECTION OF DIRECTORS—Corporate Governance Highlights” on page 5 of this proxy statement and “PROPOSAL 1: ELECTION OF DIRECTORS—Communications with Stockholders” on page 15 of this proxy statement, our current corporate governance practices reflect the Board’s dedication to being responsive and accountable to our stockholders. Fostering long-term relationships with our stockholders and maintaining their trust is a priority for the Board. Engagement with our stockholders helps the Board gain useful feedback on a wide variety of topics, including corporate governance, as well as executive compensation, ESG matters, business strategy and performance and related matters. In fiscal 2021, we solicited engagement meetings with more than 80 of our stockholders representing more than two-thirds of our shares of Common Stock outstanding as of December 31, 2021, as well as meetings with other key stakeholders. In addition, on July 16, 2021, we hosted a virtual investor meeting in advance of the previously announced separation of Bath and Body Works and Victoria’s Secret so as to engage our stockholders on a matter of importance to them. Members of the executive leadership team of Bath & Body Works attended the meeting and there was a robust question and answer session with our stockholders. Our Senior Vice President, Investor Relations attends every regular Board meeting and provides our Board members with timely feedback received from our stockholders. We believe these meetings strengthen our relationship with our stockholders and reinforce our commitment to incorporate stockholder feedback into various decisions made by the Board and management.
The Board is committed to good corporate governance and regularly reviews our practices, corporate governance developments and stockholder feedback to ensure continued effectiveness. These corporate governance practices include the following:
All of our directors are elected annually.
All of our directors are elected by a majority of votes cast (in uncontested elections).
Our governance documents include no supermajority voting requirements.
Our Bylaws include proxy access rights.
Each of our Board committees (other than our Executive Committee) is composed entirely of independent directors.
We maintain robust stock ownership requirements for our named executive officers and directors.
We maintain an extensive stockholder engagement program.
As mentioned above, our stockholders already have the ability to call a special meeting under our Bylaws.
In light of the strong corporate governance practices and stockholder rights we have in place, including the right for stockholders holding at
this time. We will continueleast 25% of the outstanding shares of our Common Stock to
monitor evolving market practices, so thatcall a special meeting of stockholders, the Board
can make an informed decision as to whether,believes that adoption of this stockholder proposal is unnecessary and
is not in the
proper terms upon which, to implement proxy access.long-term interests of our stockholders.
The Board recommendsRecommends a voteVote AGAINST the stockholder proposal on proxy access.Stockholder Proposal to Reduce the Ownership Threshold for Calling Special Meetings of Stockholders.
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COMPENSATION-RELATED MATTERS
Compensation Discussion and Analysis
Executive Summary
Performance Overview
Fiscal 2015 was another record-setting year.
The transformation of our business, by the sale or spin-off of the Victoria’s Secret business, started in 2020 and culminated in August 2021 with the successful separation of L Brands, Inc. into Bath & Body Works, Inc. and Victoria’s Secret & Co. as separate, standalone public companies. The Separation enables Bath & Body Works to pursue growth strategies best suited to our customer base and strategic objectives, with a goal to return the highest value to our stockholders.
Bath & Body Works is a segment leader focused on home fragrance, body care products, and soaps and sanitizer products. We delivered our fifth straight yearhave a demonstrated record of best-ever adjustedconsistent sales and earnings underoperating income growth, as well as a proven ability to respond quickly to evolving customer tastes with a high-speed sourcing and logistics model. With high global brand awareness and an increasingly loyal and growing customer base, we believe we are well positioned for continued growth in North America, as well as globally.
Our success is built on the leadership of our executive team with significant retail industry experience. For fiscal year 2021, our NEOs are as follows:
Andrew M. Meslow, Chief Executive Officer.
Wendy C. Arlin, Executive Vice President and Chief Financial Officer.
James L. Bersani, President, Real Estate.
Julie B Rosen, President.
Deon N. Riley, Chief Human Resources Officer.
In addition, Stuart B. Burgdoerfer, our former Executive Vice President and Chief Financial Officer, is considered an NEO for fiscal year 2021 under the Commission’s rules. Mr. Burgdoerfer indicated his intention to retire in February 2021 and, at the request of the Board, agreed to continue in the role of Executive Vice President and Chief Financial Officer through the completion of the Separation to serve as the Company executive overseeing and leading the Separation process. From February 2021 through the completion of the Separation, Mr. Burgdoerfer performed critical roles for the Company, including (i) evaluating strategic options for the disposition or separation of the Victoria’s Secret business that would best serve stockholder interests, (ii) together with Sarah E. Nash, the Board Chair, meeting with external advisors and potential acquirers related to the separation of the Victoria’s Secret business, and (iii) leading the Separation team to ensure the successful completion of the Separation while minimizing distraction for other members of our CEO:leadership team who were performing critical roles for the business.
In August 2021, Ms. Arlin was promoted to the position of Executive Vice President and Chief Financial Officer. Prior to that, Mr. Arlin served as the Company’s Corporate Controller, a position she held since joining the Company in 2005.
Fiscal Year 2021 Overview
During fiscal year 2021, our leadership team successfully navigated the challenge of transforming the business during a global pandemic, positioning our brand for success. The leadership team was keenly focused on operating the business in a manner that served the best interests of our stockholders, associates, partners, customers and communities, including:
Establishing Bath & Body Works as a standalone public company while continuing to drive profitable growth, reducing debt leverage and delivering additional value to stockholders through dividends and share repurchases.
Continuing to navigate the pandemic, adapting to changing regulations, pandemic guidance and safety protocols.
Assessing and reacting quickly to a dynamic and challenging economic environment, including inflationary pressures, labor shortages and global supply chain challenges.
Ensuring the retention and leadership stability of our NEOs who are critical to the execution of our business strategy during a period of significant change and uncertainty.
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Operating income increased $239 million
Pay for Performance
As a specialty retailer, we must constantly adapt our business in order to enable growth and create value for our stockholders. Our focus is on speed and agility, in support of deliberate change. Our compensation program reflects this philosophy, increasing compensation when performance is strong and decreasing compensation when performance does not meet our, or 12%our stockholders’, expectations. The HCC Committee oversees our compensation program, ensuring that pay is aligned with performance. We believe the structure of our compensation program fosters a culture of high performance and accountability and promotes long-term sustainable stockholder value creation.
Net sales increased $700 million or 6%
Comparable store sales increased 5%
Fiscal year 2021 was a year with strong momentum across both our stores and direct channels with performance exceeding expectations, as reflected in the short-term cash incentive payments for the year. Performance was driven by the exceptional efforts of our leadership team who delivered a merchandise assortment that resulted in a positive customer response and an increasingly loyal and growing customer base. |
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We achieved the following results during fiscal year 2021: |
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• Earnings per diluted share from continuing operations of $3.94 compared to $3.07 in 2020, and adjusted earnings per diluted share from continuing operations of $4.51 compared to $3.12 in 2020.(1) |
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• Net sales from continuing operations increased $1.448 billion to $7.882 billion, representing 22% growth. |
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• Operating income increased $405 million to $2.009 billion compared to $1.604 billion in 2020; and the operating income rate increased by 60 basis points to 25.5%. |
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• Total stockholder return was 67%.(2) |
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• Continued transformation of our business by completing the Separation and establishing Bath & Body Works as a standalone public company. |
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(1)Adjusted earnings per diluted share1 increased 14% |
Total shareholder return was 19% and our stock price increased 14%
We are committed to returning value to our stockholders through a combination of dividends and share repurchase programs. In fiscal 2015, we increased our regular annual dividend 47% from $1.36 to $2.00 per share, paid a $2.00 per share special dividend and repurchased $483 million in stock. This commitment as well as our confidence in our growth opportunities is further demonstrated by increasing the annual dividend for 2016 20% from $2.00 to $2.40 per share, paying an additional $2.00 per share special dividend and authorizing a new $500 million share repurchase program.
Our ability to deliver strong financial performance and provide extraordinary returns to stockholders is a direct result of focus and disciplined execution in our business by our NEOs and their success is reflected in their compensation for fiscal 2015.
1 | from continuing operations is a non-GAAP supplemental financial measure. The reconciliation of suchthe adjusted measure to the comparable figure determined in accordance with accounting principles generally accepted in the United States (“GAAP”)GAAP measure is included on page 2329 of the 2021 10-K. |
(2) Total stockholder return assumes the reinvestment of dividends and the adjustment of the Company’s 2015 Annual Reportstock prices prior to August 3, 2021 to give effect to the Separation. |
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These results were achieved through the significant efforts and leadership of our NEOs whose compensation is closely linked to the strong performance we achieved in fiscal year 2021. |
Compensation-related Governance Practices
We believe that our corporate governance principles reflect best practices to promote our stockholders’ interests:
What we do: |
| | | |
✔ | | | We align our NEO pay with performance and grant incentive awards based on Form 10-K.actual results and achievements. |
✔ | | | We maintain a clawback policy as described under the heading “—Compensation Governance—Recovery of Compensation.” |
✔ | | | We maintain robust stock ownership guidelines for our NEOs and directors. See below under the heading
“—Executive Compensation Philosophy—Executive and Director Stock Ownership Guidelines.” |
✔ | | | Our equity incentive plan requires a minimum vesting period of at least one year, subject to certain exceptions. |
✔ | | | We use appropriate peer group comparisons when determining compensation. |
✔ | | | We mitigate undue business risk in compensation programs and perform an annual compensation risk assessment. |
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What we don’t do: |
| | | |
✘ | | | No tax gross-ups for NEOs to cover excise taxes under Section 4999 of the Code. |
✘ | | | No hedging and short-selling of Company securities under our Insider Trading Policy. |
✘ | | | No pledging of Company stock without advance approval by our Chief Legal Officer. None of the
Company’s stock held by our NEOs or Board members is pledged. |
✘ | | | No re-pricing of stock options without stockholder approval. |
✘ | | | No single-trigger vesting of non-Board member equity awards upon a change in control. |
✘ | | | No payments of dividends on unearned awards. |
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2015 Compensation Decisions Overview2022 Leadership ChangesNEO
As discussed earlier in this proxy statement, in February 2022, Mr. Meslow announced that he will be stepping down as our Chief Executive Officer and as a member of our Board, effective as of May 12, 2022, due to health reasons. In connection with this announcement, and to facilitate a smooth transition, the Board appointed Ms. Nash to serve as Executive Chair, effective February 22, 2022, and as Interim Chief Executive Officer, effective upon Mr. Meslow’s departure on May 12, 2022.
In recognition of Ms. Nash’s continued leadership as Chair of the Board in facilitating the successful separation of Victoria’s Secret & Co. from the Company in August 2021, and in light of her appointment as Executive Chair and Interim Chief Executive Officer, as well as the critical importance of retaining Ms. Nash for an extended period to support the Company’s continued growth and success after the Separation, on March 10, 2022, the Board approved a one-time award of restricted stock units to Ms. Nash having an aggregate grant date compensation value of $18 million (the “Nash Award”). The Nash Award was granted under the Company’s 2020 Stock Option and Performance Incentive Plan (the “2020 Plan”) and is scheduled to vest in three approximately equal annual installments, subject generally to Ms. Nash’s continued service as a member of the Board through each vesting date. The Nash Award was unanimously approved by the independent members of the Board following the unanimous recommendation of the HCC Committee. In connection with Ms. Nash’s role as Executive Chair and Interim Chief Executive Officer, she may receive other customary compensation arrangements, which may include a base salariessalary and short term performance-basedshort-term incentive compensation targets for fiscal 2015 were setopportunity, and such arrangements will be evaluated and determined in March 2015 based on fiscal 2014 performancedue course.
Ms. Nash has served as a member of the Board since 2019 and
our goals for 2015. Fiscal 2015 compensationas independent Chair of the Board from May 2020 through February 21, 2022. During that time, the Board believes that she has provided unparalleled leadership and support to the Company through a period of significant uncertainty, transition and transformation. The Board believes that Ms. Nash has been, and will continue to be, critical to the Company’s successful transformation during an uncertain and challenging business environment, including in connection with navigating the Company through the COVID-19 global pandemic, leading a Chief Executive Officer transition process in 2020 and providing leadership and direction following the Board’s decision
highlights include:Awarded Mr. Wexner performance-based stock awards in January 2016 with a target value of approximately $14.1 million basedto separate the Bath & Body Works and Victoria’s Secret businesses. Under Ms. Nash’s leadership, the Company’s management team focused on the achievement of financialCompany’s business operations while Ms. Nash and strategic goals during fiscal 2015Mr. Burgdoerfer directed the successful Separation. The Board also believes that Ms. Nash will be instrumental in positioning the Company for long-term future growth and stock performancesuccess as a standalone public company, including as the Company commences another Chief Executive Officer transition with Ms. Nash serving as Interim Chief Executive Officer. The Board further believes that ranks in the top three of our peer companiesNash Award was a prudent action to help ensure Ms. Nash's continued retention and exceedssupport, as well as the S&P 500 Index by 22 percentage points;
Increased the base salary for eachstability of the NEOsCompany's leadership team during this new period of transition for the first time in at least two years (seven years in the caseCompany.
Stockholder Advisory Vote and Stockholder Engagement
At our 2021 annual meeting of Mr. Wexner) based on our growth and accomplishments in the last several fiscal years, including continued record-setting sales and earnings performance in 2013 and 2014;
Increased short term performance-based incentive compensation targets for eachstockholders, 93.3% of the NEOs to incent future performance and further leverage their compensation;
Increased the target value of performance-based RSUs awarded to NEOs other than Mr. Wexner in April 2015 to recognize our record-setting financial performance in fiscal 2014, provide significant retentive value for these NEOs and incent future performance;
Set short term incentive compensation goals at targets that require continued growth in operating income over record fiscal 2014 results; and
Continued the cumulative, long-term, relative performance measure required for NEOs to earn RSUs.
Pay for Performance
Our compensation program requires superior performance for our NEOs to earn performance-based incentives at target. While both total shareholder return and total CEO compensation have increased over the last four years as a result of the Company’s outstanding performance, the Company’s increase in stockholder return, including reinvested dividends, exceeds the rate of increase in total CEO compensation (as disclosed in the 2015 Summary Compensation Table):
Over the last five years (since the beginning of fiscal 2011) our shareholder return was 35% on an annualized basis (352% in the aggregate) while our CEO’s compensation increased 7% on an annualized basis; and
Over the last year, the total shareholder return was 19% while total CEO compensation increased 13%.
Our total shareholder return over the last five years is the best of the companies in our peer group and outperformed the S&P 500 Index by 26 percentage points. The following chart illustrates how the increase in stockholder returns exceeds the rate of increase in total CEO compensation:
The effectiveness of our compensation program at delivering pay for performance is further validated by an analysis conducted by the Compensation Committee’s independent compensation consultant to determine the alignment of pay and performance. The consultant reported to the Compensation Committee that our NEO compensation is aligned with performance and appropriate based on the competitive market, achievement of performance goals and total returns delivered to our stockholders.
Stockholder Advisory Vote
In 2015, 91% of our stockholdersshares voting voted in favor of our executive compensation program. The CompensationHCC Committee carefully considers this advisory vote and other stockholder/advisory groupstockholder feedback and discusses our executive compensation program and the voting results with Willis Towers Watson, the HCC Committee’s independent compensation consultant, including when making compensation decisions for NEOs. BasedWe have a policy of robust engagement with stockholders, with continuing outreach to, and dialogue with, our major investors on the strong supporta range of issues, including executive compensation matters. In fiscal year 2021, we solicited engagement meetings with more than 80 of our stockholders representing more than two-thirds of our shares outstanding as of December 31, 2021, as well as feedback from our engagementmeetings with major stockholders, we did not make structural changes toother key stakeholders. As indicated by the high level of support for our executive compensation program in 2015.
We have implemented2021, the followingfeedback from stockholders in 2021 regarding our executive compensation practicesprogram and compensation decisions made in accordance with our corporate governance principles and/or in response to previously received stockholder2020 indicated understanding and advisory group feedback:
| ü | | No tax gross-ups for NEOs upon a change in control.
|
| ü | | “No hedging” policy governing stock trading.
|
| ü | | Policy that discourages pledging of Company stock and requires advance approval by our General Counsel. None of our NEOs or Board members have pledged Company stock.
|
| ü | | No re-pricing of stock options without stockholder approval.
|
| ü | | Double trigger vesting of equity awards upon a change in control for all equity awards since 2011 (applicable to all unvested awards as of April 1, 2016) plus a policy that prohibits the future issuance of single trigger awards.
|
| ü | | Clawback policy as described under “—Compensation Governance—Recovery of Compensation.”
|
| ü | | Stock ownership guidelines set at five times base salary for our CEO, three times base salary for other NEOs and four times the annual stock retainer for Board members.
|
| ü | | Stock plan that requires a vesting period of at least one year:
|
| ü | | Three year minimum vesting period for RSUs that are based on the passage of time; and
|
| ü | | One year minimum vesting period for stock options and for RSUs that are earned based on performance.
|
| ü | | While these are the minimum requirements under the plan, stock options and performance-based RSUs awarded to our NEOs generally vest over five years.
|
Conclusion
We continue to deliver extraordinary returns and are committed to creating long term valuesupport for our stockholders.compensation design outcomes. The Company’s fifth straight yearHCC Committee, with the assistance of record-setting sales and earnings was led by our NEOs who are incentedWillis Towers Watson, continues to perform byevaluate our compensation program design. We believe that our compensation program reflects the feedback and itsongoing support of our stockholders, and is competitively driven and aligns the interests of our NEOs with our long-term goals and the interests of our stockholders without incenting inappropriate risk taking.
The HCC Committee is committed to continued engagement with our stockholders to understand their viewpoints and to discuss and demonstrate the important connection to results. Our performance in 2015 is reflected in the pay for our NEOs. Base salaries and targeted long term performance-based equity incentive compensation for the NEOs increased from fiscal 2014 to 2015 in recognition of their continued success in the difficult challenge of beating our best-ever results. Short term performance-based cash incentive compensation increased in connection with operating income performance that surpassed our stretch goals. In summary, we see alignment between our performance, our stockholders’ interests and our pay. Accordingly, we recommend stockholders vote FOR the executive compensation program as outlined in Proposal 4.and our business strategy, goals and performance.
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Executive Compensation Philosophy
The
CompensationHCC Committee
has builtoversees an executive compensation program
based on
the following clear
and purposeful guiding principles:
Compensation Component | | Our Principles |
Pay Level | | •
| • | | | Attract and retain superior leaders in thea highly competitive market for talent. |
| | • | |
| | | •
| | Pay competitively and equitably. |
| | • | |
| | | •
| | Recognize depth and scope of accountability and complexity of responsibility. |
| | |
Pay Mix | | •
| • | | | Emphasize performance-contingent, long term andlong-term equity-based compensation over fixed compensation. |
| | |
Pay for Performance | | •
| • | | | Recognize and reward enterprise brand and individual performance. |
| | • | |
| | | •
| | AlignUtilize performance metrics that closely align executives’ interests with stockholders’ interests. |
| | • | |
| | | •
| | Require executivesNEOs to own a significant amount of our Common Stock. |
| | • | |
| | | •
| | Set Spring and Fall goals tothat reflect the seasonal nature of our business and incent goal achievement in each season. |
| | • | |
| | | •
| | Create long-term stockholder value through regular achievement of short-term goals while pursuing our longer-term strategy of growth in North America and internationally and increasing operating margins. strategy. |
| | • | |
| | | •
| | Retain and incent high-performers through long-term equity incentive awards. |
Connecting PerformancePay and PayPerformanceOur challenging
There are two key elements of our executive compensation program design that connect pay to performance. First, our incentive goals require superior performance, including substantial growth in operating income year over yearare designed to challenge our NEOs to achieve a high level of performance to earn incentives at target pay.levels. When our NEOs hitmeet and exceed, or fall short of, these goals, we compensate them accordingly.
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To achieve
Second, to further connect our Chief Executive Officer’s pay
forto performance
and stockholder interests, we employ a pay mix philosophy that places greater emphasis on performance-based
and equityincentive compensation over
base salary. In fact, until fiscal 2015, our CEO had not received an increase innon-performance-based base salary
since 2008.and restricted stock units. The following
charts illustratechart illustrates our pay mix philosophy
which consists ofshowing a
lowerhigher percentage of
base salary compared to performance-based
pay at target for 2015: | | |
 | |  |
To assess whether the Company’sincentive compensation. The percentage of our Chief Executive Officer’s performance-based incentive compensation program delivers pay for performance as designed, the Compensation Committee’s independent compensation consultant, Towers Watson (which merged with Willis Group Holdings in January 2016 and is referred to as Willis Towers Watson hereafter), analyzed our performance-based long term equity and short term cash compensation for our NEOs across four key measures (operating income, earnings per share, total stockholder return and return on invested capital) relative to his total target compensation in fiscal year 2021 (68%) decreased from the percentage in fiscal year 2020 (84%), which was due to the fact that Mr. Meslow received a significant, one-time performance share unit award in fiscal year 2020 in connection with his promotion to Chief Executive Officer. We believe that the mix of performance-based incentive compensation provided to Mr. Meslow in fiscal year 2021 reflects our peer group. The analysis shows that bothnormalized pay mix philosophy and performance are in the top quartile of our peer group.
Basedstrong emphasis on this analysis, Willis Towers Watson and the providing pay-for-performance.
Compensation Committee concluded thatComparison
We review our NEO compensation
is aligned with performance and appropriate based on the competitive market, achievement of performance goals and total returns delivered to our stockholders.Compensation Comparison
We compare our NEO compensation withagainst publicly available data on executive compensation.
We definecompensation, including the executive compensation paid by a group of peer companies, in order to evaluate our compensation competitiveness, establish the appropriate competitive positioning of the levels and mix of our NEO compensation elements and ensure we are properly attracting, retaining and incenting highly talented executives who are critical to executing our strategy and business plan.
The HCC Committee selects our peer group
used for compensation comparisons (the “Compensation Peer Group”) in consultation with
the help of Willis Towers Watson to generally
include:include a balanced mix of the following criteria: Specialty and department store retailers;
Companies with brands that have emotional content;
Businesses that are generally similar to the Company in size and scope (using criteria such as total revenue, market capitalization, global locations,footprint, business and/or merchandise focus; and
focus);Retailers that compete with the Companyus for executive talent.talent; and
Companies with similar talent and business model characteristics.
We
During 2021, the HCC Committee re-evaluated our Compensation Peer Group, applying these criteria to Bath & Body Works as a standalone public company. Following this review, our
peer group annually and removed Ann Inc. in 2015 when it was acquired by Ascena Retail Group. Following our review, our peer group consistsCompensation Peer Group consisted of the following
companies:companies for fiscal year 2021:
| | | | |
Abercrombie & Fitch Co. | | The Gap, | Foot Locker, Inc. | | Ralph Lauren Corporation | Sally Beauty Holdings, Inc. |
American Eagle Outfitters, Inc. | | J. C. Penney Company, | The Gap Inc. | | Starbucks Corporation |
Avon Products, Inc. | | Kohl’s Corporation | | Target Corporation |
Coach, Inc. | | Macy’s, Inc. | | The TJX Companies, Inc. |
DSW, Inc. | | NIKE, Inc. | | Williams-Sonoma, Inc. |
The Estee Lauder Companies Inc. |
Big Lots, Inc. | | Nordstrom, | lululemon athletica inc. | | | Tractor Supply Company |
Burlington Stores, Inc. | | | Newell Brands Inc. | | | Ulta Beauty, Inc. |
Coty Inc. | | | Ralph Lauren Corporation | | | Victoria's Secret & Co. |
Dick's Sporting Goods, Inc. | | | Revlon, Inc. | | | Williams-Sonoma, Inc. |
We do not specifically
benchmarkset our NEOs’ compensation against our
peer group.Compensation Peer Group. Instead, we consider peer
group comparisons
provided by Willis Towers Watson as one of several factors in applying our pay philosophy and setting the pay of our NEOs.
The Compensation Peer Group used for compensation comparisons differs from the peer group used to evaluate performance under performance stock units granted to our NEOs early in fiscal year 2021 (the “Performance Peer Group”). A description of the Performance Peer Group is included under the heading “—Compensation for NEOs—Long-Term Equity Compensation—Performance Stock Units.”
Executive and Director Stock Ownership Guidelines The
CompensationHCC Committee encourages
NEOand mandates Common Stock ownership
by our NEOs through stock ownership guidelines
whichthat promote a
long termlong-term focus
on stock performance, discourage inappropriate risk-taking and
further align the interests of our NEOs with those of our stockholders. Stock ownership guidelines can be met through direct
or beneficial ownership of Common Stock
includingand indirect ownership through both grants of stock-based awards under our stock incentive plans and Common Stock held
under our stock andthrough retirement plans.
Our
CEOChief Executive Officer is required to
achieve and maintain ownership of Common Stock with a value of five times
histhe Chief Executive Officer’s base
salary. As the beneficial owner of 15.98% of Common Stock, Mr. Wexner’s ownership well exceeds this minimum requirement.Other NEOs aresalary, and each other NEO is required to achieve and maintain beneficial ownership of Common Stock with a value of three times his or hersuch NEO’s base salary. Our NEOs are required to achieve these ownership levels within five years of becoming subject to the ownership guidelines. All of theseour NEOs have beneficialare either in compliance with the guidelines or are on track to comply with the guidelines within the required time frame.
During fiscal year 2021, the stock ownership
in excess of this guideline as of the end of fiscal 2015.Membersguidelines applicable to members of our Board mustwere changed from a share-based threshold to more traditional guidelines. Specifically, members of our Board are now required to maintain ownership of at least five times their annual cash retainer within five years of becoming subject to the number of shares of Common Stock received as Board compensation over the previous four years.guidelines. All members of our Board are either in compliance with this policy.
the guidelines or are on track to comply with the guidelines within the required time frame.
Compensation Setting Process
The
CompensationHCC Committee makes all decisions regarding
Chief Executive Officer compensation with advisory input from Willis Towers Watson. Our Chief Executive Officer recommends, and the HCC Committee approves, compensation for
Mr. Wexner.the other NEOs. The
CompensationHCC Committee oversees the evaluation process and compensation structure for
the otherall NEOs and approves all
NEOgrants of stock
awards.awards to our NEOs. In making compensation decisions for our NEOs, the HCC Committee takes into consideration input, recommendations and market-based analyses provided by both management and Willis Towers Watson.
Target compensation for the NEOs is reviewed annually and is designed to reward historical performance, incent future performance and be competitive with the external market for talent.
The following fiscal 2014 accomplishments were considered in setting NEO target compensation for 2015:Increased sales 6% to $11.5 billion driven by a comparable store sales increase of 4%.
Increased earnings per share by 15% to $3.50.
Increased merchandise margin rate.
Improved operating income rate from 16.2% to 17.1% driven by growth in all segments.
Delivered total shareholder return of 69%.
Increased focus on our core categories by exiting most apparel categories at Victoria’s Secret Direct and the make-up business at Victoria’s Secret Stores.
Continued international expansion of our brands.
Returned value to stockholders through a combination of dividends and share repurchase programs.
When setting target compensation for 2015, the Compensation Committee also considered the Company’s future challenges and goals, including expectations of continued growth and improved margins against potential market challenges and continued international expansion efforts.
Compensation Components
The three principal elements of our executive compensation programs are base salary, short termshort-term performance-based cash incentive compensation and long term performance-basedlong-term equity incentive compensation. OtherEach NEO’s base salary is set considering multiple factors described below. For fiscal year 2021, all of our NEOs (other than Mr. Burgdoerfer with respect to our long-term equity incentive compensation program for the reasons discussed below) participated in the same short-term performance-based incentive compensation program and long-term equity incentive compensation program.
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In addition to these three principal elements of compensation,
that may be paid tothe Company provides our NEOs
includehealth and welfare, retirement and other post-employment benefits and
limited perquisites.
Also, during fiscal year 2021, Messrs. Meslow, Bersani and Burgdoerfer and Mses. Arlin and Riley received payment of a portion of special one-time cash retention awards approved by the HCC Committee during fiscal year 2020. These awards were granted during particularly turbulent times for our business brought on by the onset of the COVID-19 pandemic and uncertainty surrounding the form of sale or separation and timing for separating the Victoria’s Secret business, and were designed to ensure long-term engagement and retention of our leadership team during this uncertain and transformative period. Additional information about each compensation component is provided below.
The following factors are considered in determining
any base salary
adjustments:adjustments for our NEOs:Scope and responsibility of the NEO’s position;
Achievement of seasonal and annual business goals;
Level of overall compensation paid by competitors for comparable positions;
Recruitment, retention and development of leadership talent;
andThe Company’s challenging expectations for future growth; and
The appropriate balancing of our NEOs’ base salary against their incentive compensation.
For the first time since 2008, Mr. Wexner received an increase to his
Based on these factors, our NEOs’ base salary. salaries were adjusted during fiscal year 2021 as follows:
Mr. Meslow | | | 1,275,000 | | | 1,350,000 | | | 5.9% |
Ms. Arlin | | | N/A | | | 750,000 | | | N/A |
Mr. Bersani | | | 800,000 | | | 840,000 | | | 5.0% |
Ms. Rosen | | | 850,000 | | | 870,000 | | | 2.4% |
Ms. Riley | | | 750,000 | | | 760,000 | | | 1.3% |
Mr. Burgdoerfer | | | 1,200,000 | | | 1,200,000 | | | 0.0% |
The other NEOs also receivedHCC Committee set Ms. Arlin’s base salary increasesat $750,000 effective upon her promotion announcement to Executive Vice President and Chief Financial Officer in recognitionAugust 2021. Mr. Burgdoerfer did not receive a base salary adjustment in 2021 as a result of their contributionshis announced retirement in February 2021.
Short-Term Performance-Based Incentive Compensation
Short-term performance-based incentive compensation is paid in cash pursuant to the
continued success of the Company. Mr. McGuigan’s increase also reflects his assumption of additional responsibilities and is intended to align his compensation with internal and external positions of similar scope and importance. Mr. Coe’s increase is based on his achievement of business goals for Bath & Body Works, recognizes his successful leadership and is intended to be highly competitive with the external market. | | | | | | | | | | | | |
| | | 2015 Base
Salary ($) | | | 2014 Base
Salary ($) | | | %
Increase | |
Mr. Wexner | | | 2,000,000 | | | | 1,924,000 | | | | 4.0 | % |
Ms. Turney | | | 1,500,000 | | | | 1,442,000 | | | | 4.0 | % |
Mr. McGuigan | | | 1,250,000 | | | | 978,500 | | | | 27.7 | % |
Mr. Coe | | | 1,000,000 | | | | 925,000 | | | | 8.1 | % |
Mr. Burgdoerfer | | | 852,800 | | | | 824,000 | | | | 3.5 | % |
Short Term Performance-Based2015 Cash Incentive Compensation
Performance Plan (the “2015 ICPP”). This programcompensation component focuses on achievement of six-month goals, reflecting the seasonal nature of our business and the fact that achievement of our short term goals season after season creates long term value for our stockholders. Our operations consist of two principal selling seasons: Spring (the first and second quarters) and Fall (the third and fourth quarters). The Fall including theseason, which includes holiday season,sales, is weighted more heavily at 60% because of its importance to our profitability.
Short term performance-based cash incentive compensation targets are set at a percentage The use of base salary withtwo six-month performance periods in our plan design reflects our belief that achievement of our short-term goals season after season creates long-term value for our stockholders.
The pre-established, objective financial goals for fiscal year 2021 were:
For the
amount earned ranging from zero to doubleSpring season, which preceded the
target incentive,completion of the Separation, based on the
extent tooperating income for the Victoria’s Secret and/or Bath & Body Works segments, weighted as applicable as reflected in the table below, which
financial goals are achieved or exceeded.The financial incentive provided byexcluded unallocated corporate overhead costs consistent with the short term performance-based incentive compensation plan is a key component in drivingCompany's historical segment presentation.
Mr. Meslow | | | 87.5% | | | 12.5% |
Ms. Arlin | | | 50% | | | 50% |
Mr. Bersani | | | 50% | | | 50% |
Ms. Rosen | | | 100% | | | — |
Ms. Riley | | | 100% | | | — |
Mr. Burgdoerfer | | | 12.5% | | | 87.5% |
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For the
exceptional performance ofFall season, which followed the
Company and our NEOs to produce record-breaking success year after year. In 2015, target percentages for each of the NEOs were increased to incent future performance and place further emphasisSeparation, based 100% on the
performance-based component of their compensation package: | | | | | | | | |
| | | Fiscal 2015 Target | | | Fiscal 2014 Target | |
Mr. Wexner | | | 220 | % | | | 200 | % |
Ms. Turney | | | 200 | % | | | 190 | % |
Mr. McGuigan | | | 150 | % | | | 140 | % |
Mr. Coe | | | 160 | % | | | 150 | % |
Mr. Burgdoerfer | | | 150 | % | | | 135 | % |
The pre-established objective fiscal 2015 financial goals were based solely onCompany’s adjusted operating income, subject to adjustment for extraordinary items pursuant to the 2015 Incentive Compensation Performance Plan (the “2015 ICPP”) and approved by the Compensation Committee. Operatingexcluding unallocated corporate overhead costs.
The HCC Committee used operating income is used because it is a performance measure over which executives can have significant impact and is also directly linked to the Company’s long-rangelong-term growth plan and to performance that drivesdrive stockholder value. Corporate overhead costs were excluded from the Fall season targets because these costs were historically shared with the Victoria’s Secret business.
The HCC Committee sets the operating income goals at the beginning of each six-month season based on:
An analysis of historical performance;
The overall economic environment including financial results of other comparable businesses; and
Progress toward achieving our strategic plan.
The tables below show the Spring season segment operating income goals and the Fall season adjusted operating income goal for fiscal year 2021 required to earn short-term performance-based incentive compensation at target and actual performance:
Spring Season
Operating Income Goal | | | $425 million | | | $125 million |
Actual Performance | | | $811 million | | | $477 million |
Fall Season
Adjusted Operating Income Goal(1) | | | $1,260 million |
Actual Performance(1) | | | $1,361 million |
(1)
| Adjusted operating income is a non-GAAP financial measure that reflects our operating income excluding certain special items and unallocated corporate overhead costs. Attached as Appendix B is a reconciliation of the Fall 2021 adjusted operating income for purposes of the plan to Fall 2021 operating income for Bath & Body Works, Inc. following the Separation, as well as other important disclosures regarding non-GAAP financial measures. |
Fall season goals were set slightly below prior year actual results to account for inflationary cost increases, including increases in raw material, distribution and labor costs, as well as to provide meaningful incentive against prior year performance that was positively impacted by COVID-19 pandemic stimulus. However, the HCC Committee believes incentive goals for both seasons were still set at challenging and meaningful levels, particularly when considering the difficulty of consistently beating record-setting results year after year. When evaluating operating income goals, the
CompensationHCC Committee compares the
increasechange in operating income relative to the change in the incentive payments to associates
at target.Operating income goals are set atto ascertain the beginningreasonableness of each six-month season based on:
An analysis of historical performance;
Income goals for that brand;
Financial results of other comparable businesses; and
Progress toward achieving our strategic plan.
| | | | | | |
NEO | | | | | | Short Term Performance Incentive Goal Weighting and Metric |
Mr. Wexner
| | }
| | | | 80% weighted average of major brand performance:
55% Victoria’s Secret operating income
|
Mr. Burgdoerfer
| | | | 30% Bath & Body Works operating income
15% Other operating income
|
Mr. McGuigan
| | | | 20% total L Brands operating income
|
Ms. Turney
| | | | 100% Victoria’s Secret operating income
|
Mr. Coe
| | | | 100% Bath & Body Works operating income
|
In fiscal 2015, the Compensation Committee set goals that challenged our NEOs to achieve outstanding performance in an uncertain economic environment and provided incentive to grow sales while maximizing margins and managing expenses. The goals generally require substantial growth in operating income over the record-setting results we achieved in fiscal 2014 and consider the difficulty in beating these best-ever results.
Spring season operating income goals for Victoria’s Secret when compared to actual results for fiscal 2014 are generally flat due to the projected decrease in operating income at Victoria’s Secret Direct resulting from the reduction in focus on the apparel merchandise category.
potential payout.
The table below shows the
operating incomerange of performance goals
required to earn short term performance-based incentive compensation at target and actual performance by season: | | | | | | | | | | | | | | | | |
| | Fiscal 2015 Spring Season | | | Fiscal 2015 Fall Season | |
| | Operating Income
Goal | | | Actual
Performance1 | | | Operating Income
Goal | | | Actual
Performance1 | |
Total L Brands
| | $ | 745 million | | | $ | 775 million | | | $ | 1,325 million | | | $ | 1,417 million | |
Victoria’s Secret
| | | 575 million | | | | 588 million | | | | 745 million | | | | 805 million | |
Bath & Body Works
| | | 205 million | | | | 233 million | | | | 559 million | | | | 603 million | |
Other2
| | | 85 million | | | | 108 million | | | | 182 million | | | | 203 million | |
1 | Actual performance presents operating income on an adjusted basis which removes certain special items (subject to approval by the Compensation Committee) which are not indicative of Company ongoing operations due to their non-recurring and extraordinary nature. The Company uses adjusted financial information as key performance measures of results for purposes of evaluating performance internally, which may not correspond to amounts reported externally.
|
2 | Other includes business unit operating income that is an internal performance measure and does not correspond to amounts reported externally.
|
Performance goals required to earn threshold payout range from approximately 85% to 90%as a percentage of target for threshold and performance goals required to earn maximum payout range from approximately 110% to 120% of target. payout:
Performance below threshold results in no payout and performance between threshold and target and target and maximum is interpolated to determine the payout percentage beginning at 20% atfor threshold performance up to 200% at maximum.maximum performance.
Short-term performance-based incentive compensation targets are set as a percentage of base salary with the amount earned ranging from 0% to 200% of the target incentive, based on the extent to which financial goals are achieved.
The financial incentive provided by the short-term performance-based incentive compensation plan is a key component in driving the exceptional performance of the Company and providing incentive for our NEOs to produce record-breaking success year after year, thereby fueling long-term growth and value creation for our stockholders.
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The table below shows the target percentage of base salary for each NEO during fiscal year 2021:
Mr. Meslow | | | 190% |
Ms. Arlin | | | 90%(1) |
Mr. Bersani | | | 140% |
Ms. Rosen | | | 115% |
Ms. Riley | | | 80% |
Mr. Burgdoerfer | | | 180% |
(1)
| Ms. Arlin’s target percentage of base salary was effective upon her promotion announcement to Executive Vice President and Chief Financial Officer. |
The HCC Committee approved an increase to the short-term incentive target percentage of base salary for Mr. Meslow from 185% for fiscal year 2020 to 190% for fiscal year 2021 to recognize his significant contributions leading our Company through the ongoing challenges brought on by the COVID-19 pandemic and the Separation with extraordinary results.
Payouts for fiscal
2015year 2021 performance are set forth below and in the “Non-Equity Incentive Plan Compensation” column of the
20152021 Summary Compensation
Table.Table below.
Total Fiscal 2015Year 2021 Incentive Payout
Mr. Meslow | | | 2,565,000 | | | 2,052,000 | | | 2,573,208 | | | 4,625,208 | | | 180% |
Ms. Arlin(1) | | | 638,308 | | | 466,615 | | | 677,160 | | | 1,143,775 | | | 179% |
Mr. Bersani | | | 1,176,000 | | | 940,800 | | | 1,179,763 | | | 2,120,563 | | | 180% |
Ms. Rosen | | | 1,000,500 | | | 800,400 | | | 1,003,702 | | | 1,804,102 | | | 180% |
Ms. Riley | | | 608,000 | | | 486,400 | | | 609,946 | | | 1,096,346 | | | 180% |
Mr. Burgdoerfer | | | 2,160,000 | | | 1,728,000 | | | 0(2) | | | 1,728,000 | | | 80% |
(1)
| Ms. Arlin’s payout was pro-rated based on the number of days that her base salary and incentive target percentage were in effect before and after her promotion announcement. |
(2)
| In light of his retirement in August 2021, Mr. Burgdoerfer did not receive a payout for the Fall season. |
Through the exceptional leadership of our NEOs, we achieved record-setting sales results in fiscal year 2021. The results were driven by positive customer response to our merchandise. We experienced growth in net sales for fragrant body care, home fragrance as well as gifting and accessories that more than offset for the expected decline in net sales of soaps and sanitizers. This resulted in adjusted operating income that significantly exceeded expectations and goals set at the beginning of each season justifying above target payouts.
Mr. Burgdoerfer’s fiscal year 2021 target incentive amount was $2,160,000. Mr. Burgdoerfer’s actual fiscal year 2021 payout for the Spring season was $1,728,000; Mr. Burgdoerfer did not receive an incentive payout for the Fall season in light of his retirement in August 2021. In recognition of Mr. Burgdoerfer’s continued service as our Executive Vice President and Chief Financial Officer until August 2021 and his significant leadership and contributions as the Company executive overseeing and leading the Separation process, Mr. Burgdoerfer was provided a special, one-time cash bonus payment of $2,000,000 in August 2021, which payment was conditioned on the actual occurrence of the Separation. The payment of this Separation completion bonus was also subject to Mr. Burgdoerfer’s compliance with applicable restrictive covenants, his execution of a release of claims in favor of the Company (which he was not otherwise contractually committed to provide) and his agreement to cooperate with the Company in connection with certain matters in which he was involved or had knowledge during his employment.
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| | | | | | | | | | | | | | | | | | | | |
| | | Fiscal 2015 Target
Incentive | | | Fiscal 2015
Spring Incentive
Payout | | | Fiscal 2015
Fall Incentive
Payout | | | Total Fiscal 2015
Payout | | | % of Fiscal
2015 Target | |
Mr. Wexner | | $ | 4,400,000 | | | $ | 2,509,760 | | | $ | 4,239,840 | | | $ | 6,749,600 | | | | 153 | % |
Ms. Turney | | | 3,000,000 | | | | 1,417,200 | | | | 3,297,600 | | | | 4,714,800 | | | | 157 | % |
Mr. McGuigan | | | 1,875,000 | | | | 1,069,500 | | | | 1,806,750 | | | | 2,876,250 | | | | 153 | % |
Mr. Coe | | | 1,600,000 | | | | 1,280,000 | | | | 1,920,000 | | | | 3,200,000 | | | | 200 | % |
Mr. Burgdoerfer | | | 1,279,200 | | | | 729,656 | | | | 1,232,637 | | | | 1,962,293 | | | | 153 | % |
Long Term Performance-BasedLong-Term Equity Incentive CompensationStock
During fiscal year 2021, we granted stock awards are made to our NEOs (other than Mr. Burgdoerfer) under the 20152020 Plan, which was approved by our stockholders at our 2020 annual meeting of stockholders.
Performance Stock Options and Units
Performance
Incentive Plan (the “2015 Plan”stock units (“PSUs”)
. Our equity-based long term performance-based incentive program rewards past incent executive performance
and encourages future performance with a challenging performance requirement for our NEOs. In addition, the vesting requirements increase the likelihood that we will be able to retain executives who are critical to our success.Individual performance (including contribution tothrough the achievement of challenging growth and profitability metrics that closely align the long-term interests of our executives with those of our stockholders. For our NEOs’ 2021 PSU awards, the two equally weighted metrics are (i) revenue growth relative to a designated peer group and (ii) cumulative operating income as a percentage of cumulative sales (operating income margin). These metrics were chosen by the HCC Committee because they align with the strategic direction of the Company and provide a balance between growth and profitability metrics. Performance for awards granted in fiscal year 2021 will be evaluated based on performance over a three-year performance period, starting with fiscal year 2021 through the end of fiscal year 2023.
The specific targets are as follows:
Threshold | | | 50% | | | 30th percentile | | | 16% |
Target | | | 100% | | | 50th percentile | | | 20% |
Maximum | | | 150% | | | 90th percentile | | | 24% |
Performance will be evaluated based on a scale, and payout will be interpolated between threshold, target and maximum levels.
The Performance Peer Group used to determine relative revenue growth performance achievement was selected, in consultation with Willis Towers Watson, based on companies that are generally similar to us in size and scope (using criteria such as total revenue, market capitalization, business
goals, execution of retail fundamentals and accomplishment of talent and cultural objectives), competitive practice,and/or merchandise focus). The companies that comprise the
Company’s overall budgetPerformance Peer Group for
equity compensation expense and stockholder dilution, internal equity and retention riskthe 2021 PSUs are
all considered in determining the size of each NEO’s fiscal 2015 equity award.as follows:
Abercrombie & Fitch Co. | | | Hanesbrands Inc. | | | Sally Beauty Holdings Inc. |
American Eagle Outfitters, Inc. | | | lululemon athletica inc. | | | Tapestry, Inc. |
Big Lots, Inc. | | | Michael’s Co. Inc. | | | The Estee Lauder Companies Inc. |
Burlington Stores, Inc. | | | Newell Brands Inc. | | | Tractor Supply Company |
Coty Inc. | | | Nu Skin Enterprises Inc. | | | Ulta Beauty Inc. |
Designer Brands Inc. | | | Ralph Lauren Corporation | | | Williams Sonoma, Inc. |
Foot Locker, Inc. | | | Revlon, Inc. | | | |
Stock options
by their nature are
intended to alignperformance-based, aligning executive interests with stockholder interests by creating a direct link between compensation and stockholder
return, and to foster retention.return. Stock options granted
to each NEOin fiscal year 2021 vest over
fivethree years
in two tranches: 50% two years from the grant date and 50% three years from the grant date, subject
generally to continued
employment.employment through each such date. The exercise price is equal to the
grant date closing price of
our Common
Stock.Performance-Based RSUs
Performance-based RSUsStock on the grant date (subject to equitable adjustment in connection with the Separation as described below under the heading “Grants of Plan-Based Awards for Fiscal Year 2021”).
Restricted Stock Units
Restricted stock units (“RSUs”) are
intended to:Incent achievement of key performance metrics (through the performance requirement);
Align executive rewards with those realized by stockholders (through thegranted to ensure market value of our stock);
Retain superior executive talent (through the time vesting requirements); and
Reward exceptional individual performance (through annual determinationcompetitiveness of the sizeexecutive compensation package and to retain executives over the long-term. In connection with her promotion announcement to Executive Vice President and Chief Financial Officer, Ms. Arlin was granted RSUs as set forth below. In addition, the HCC Committee approved additional RSU awards to each of Mses. Arlin and Riley as set forth below to recognize their critical role and work above and beyond their regular duties in connection with the award).successful Separation. The HCC Committee also approved additional RSU awards for Ms. Rosen in recognition of her role driving the business and delivering on key initiatives, including re-designing and integrating product development into the merchant team and implementing an omni-channel assortment process, positioning the business for success and furthering stockholder
Performance-based RSUs awarded
interests. The RSU awards granted in March 2021 vest over three years in two tranches (50% two years from the grant date and 50% three years from the grant date), and the remaining RSU awards vest over three years in three tranches (30% one year from the grant date, 30% two years from the grant date and 40% three years from the grant date), in each case subject generally to NEOs other than Mr. Wexner in April 2015 recognize record financial performance in fiscal 2014 and provide significant retentive value for NEOs. continued employment through each such date.
Below is a summary of
the performance-based RSU awards andlong-term equity incentive compensation, including PSUs, stock options
and RSUs, awarded
to our NEOs, during fiscal year 2021. In light of his announced retirement in February 2021, Mr. Burgdoerfer did not receive any long-term equity incentive compensation awards in fiscal
2015: | | | | | | | | | | | | |
| | | Value of
Performance-
Based RSU Award | | | Value of Stock
Option Award | | | Total Fiscal
2015 Equity
Award Value | |
Mr. Wexner | | $ | 13,005,048 | | | $ | 3,998,333 | | | $ | 17,003,381 | |
Ms. Turney | | | 5,618,477 | | | | 534,079 | | | | 6,152,556 | |
Mr. McGuigan | | | 4,060,166 | | | | 254,325 | | | | 4,314,491 | |
Mr. Coe | | | 3,178,121 | | | | 203,455 | | | | 3,381,576 | |
Mr. Burgdoerfer | | | 2,710,253 | | | | 173,503 | | | | 2,883,756 | |
Note: Whileyear 2021.
Mr. Meslow | | | 3,396,370 | | | 1,903,973 | | | 2,048,175 | | | 7,348,518 |
Ms. Arlin | | | 0 | | | 0 | | | 1,858,830 | | | 1,858,830 |
Mr. Bersani | | | 485,216 | | | 272,009 | | | 292,610 | | | 1,049,835 |
Ms. Rosen | | | 485,216 | | | 271,987 | | | 684,103 | | | 1,441,306 |
Ms. Riley | | | 412,434 | | | 231,194 | | | 640,221 | | | 1,283,849 |
Mr. Burgdoerfer | | | 0 | | | 0 | | | 0 | | | 0 |
Cash Retention Awards Granted in Fiscal Year 2020
Even without the performance requirement isdisruption caused by the COVID-19 pandemic, we faced significant uncertainty and change that began in 2020 and continued into 2021. Fiscal year 2020 began with an agreement to sell 55% of the equity interests in Victoria’s Secret. When the sale agreement was terminated, our efforts became entirely focused on navigating an extremely challenging business environment created by the pandemic, including retaining the leadership team necessary to navigate the business through the pandemic and execute on our strategic plan to operate Bath & Body Works and Victoria’s Secret as separate businesses.
As previously disclosed in last year’s CD&A, the HCC Committee determined that it was critical to retain Messrs. Meslow, Bersani and Burgdoerfer and Ms. Arlin through an extended period to ensure stability for our Company and our stockholders. In recognition of the fact that the executives’ base salaries had been temporarily reduced by 20% during the temporary closure of our stores in response to COVID-19, their benefits under the Company’s non-qualified deferred compensation plan had been terminated and their annual long-term equity incentive awards for fiscal year 2020 had been eliminated, and due to the uncertain treatment of outstanding stock awards under potential Separation scenarios, the HCC Committee granted special, one-time cash retention awards for Messrs. Meslow and Bersani and Ms. Arlin to ensure long-term retention and continuity of key leadership during particularly turbulent times for our business. The retention payments vested and were paid in three equal installments on January 31, 2021, July 31, 2021 and January 31, 2022.
These one-time cash retention awards were made in light of the turbulent business environment in which we were operating in fiscal year 2020 and were viewed as a critical tool during a period of significant uncertainty to retain our key leaders and to help ensure the successful completion of the Separation, the long-term health of our business and the preservation of stockholder value. In fact, since the time these retention awards were granted to our NEOs in May 2020, our adjusted stock price (i.e., taking into account the effect of the Separation on our stock price) has increased by approximately 539% (from a closing price of $8.78 on May 15, 2020 to a closing price of $56.07 on January 31, 2022, the date the final installment of the awards vested).
Mr. Meslow | | | 2,000,000 | | | 2,000,000 | | | 2,000,000 |
Ms. Arlin | | | 248,000 | | | 248,000 | | | 248,000 |
Mr. Bersani | | | 750,000 | | | 750,000 | | | 750,000 |
Mr. Burgdoerfer was also granted a cash retention award during fiscal year 2020 at the same
time as the
amount and timing of Mr. Wexner’s equity award are determined on a different basis than that of our other NEOs
as described in detail below.In order for performance-based RSUsnoted above, pursuant to be earned, the Company’s cumulative adjusted operating income, as a percentagewhich payments of cumulative sales, must be in the top one-third of the S&P Retailing Index (also determined on a cumulative$1,500,000 vested and adjusted basis) beginning with the fiscal year of the award through the fiscal year immediately preceding each vest date. While operating income is the sole performance metric used for our short term performance-based cash incentive compensation program, the use of operating income as a percentage of sales for our long term performance-based incentive program requires both operating income and sales performance and measures the efficiency of our sales. In addition, the relative metric requires that our performance significantly exceeds that of companies within our industry for the pre-determined performance goal to be achieved. Furthermore, the cumulative performance metric requires sustained performance over the five-year vesting period reflecting long term performance of the Company.
Performance-based RSUs vest over five years, with 20% vestingwere paid on each of January 31, 2021
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and July 31, 2021. In recognition of Mr. Burgdoerfer’s agreement to continue to provide exceptional leadership and critical assistance as our Executive Vice President and Chief Financial Officer and as the secondCompany executive overseeing and third anniversariesleading the Separation process, as well as to assist in transitioning his role as Chief Financial Officer to Ms. Arlin in connection with and following his retirement, the HCC Committee determined that it was appropriate to provide Mr. Burgdoerfer with the final installment of his retention award in the amount of $1,500,000 on January 31, 2022. The payment of the grant date,final installment of this award was also conditioned upon Mr. Burgdoerfer’s compliance with applicable restrictive covenants, his execution of a release of claims in favor of the Company (which he was not otherwise contractually committed to provide) and 30%his agreement to cooperate with the Company in connection with certain matters in which he was involved or had knowledge during his employment.
Payments earned during fiscal year 2021 are disclosed in the 2021 Summary Compensation Table. The final installments of these awards paid on January 31, 2022 will be disclosed in our 2022 Summary Compensation Table for our NEOs for fiscal year 2022.
Under the terms of Ms. Riley’s offer of employment, to ensure her acceptance of our offer and retention through the Separation and uncertain business environment, she will receive cash retention payments, each in the amount of $250,000, within 30 days of each of the
fourthfirst and
fifthsecond anniversaries
in each caseof her hire date, subject to
her continued employment through each such date. The first installment was paid in December 2021 and is disclosed in the
performance measures being satisfied and continued employment. To the extent any tranche of the award that is eligible for performance-based vesting does not vest in any fiscal year, such tranche may vest in future years, subject to satisfaction of the cumulative performance measure. The cumulative performance metric requires any performance shortfall in any period to be made up on a cumulative basis in any subsequent periods for any vesting tranche to be earned. If the cumulative performance metric is not met at the end of the five-year performance period, all unvested performance-based RSUs will be forfeited.Equity awards are effective the later of the date the grant is approved or the date of hire or other relevant effective date.
2021 Summary Compensation Table.
Retirement and Other Post-Employment Benefits Retirement and other post-employment benefits consist of qualified and non-qualified defined contribution retirement plan benefits and termination benefits.
Qualified Defined Contribution Retirement Plan
The qualified plan is available to all
Company associates who meet certain age and service requirements. Associates can contribute up to the amounts allowable under
Section 401 of the
Internal Revenue Code of 1986 (the “Code”).Code. The Company matches associates’ contributions according to a predetermined formula and contributes additional amounts based on a percentage of the associates’ eligible annual compensation and years of service. Associates’ contributions and Company matching contributions to the qualified plan vest immediately. Additional Company contributions and the related investment earnings are subject to vesting based on years of service.
Non-Qualified Defined Contribution
Deferred Compensation and Supplemental Retirement Plan
The non-qualified plan is available to all associates who meet certain age, service, job level and compensation requirements. The non-qualified plan is an unfunded plan which provides benefits beyond the Code limits for qualified defined contribution plans.
The Company
does not set aside assets to fund liabilitiespreviously sponsored a non-qualified supplemental retirement plan (“SRP”). The HCC Committee authorized the termination of the
non-qualified plan. Assets that may be used to satisfy such liabilities are general assets ofSRP on June 27, 2020. In fiscal year 2021, certain retirement contributions were made under the
Company, subjectSRP based on eligible earnings prior to the
claims oftermination date, and all remaining benefits and obligations under the
Company’s creditors.Associates can contribute toSRP were paid out in full in July 2021. In addition, certain other deferred compensation arrangements were simultaneously terminated and liquidated, including any remaining elective deferred stock units and deferral elections under our Stock Award and Deferred Compensation Plan for Non-Associate Directors, as required by the non-qualified plan up to a maximum percentage of eligible compensation. The Company matches associates’ contributions and contributes additional amounts based on a percentage of the associates’ eligible compensation and years of service.
The plan also permits participating associates to defer additional compensation up to a maximum amount which the Company does not match.
Associates’ contributions to the non-qualified plan and the related interest accruals vest immediately. Company contributions and credits to the non-qualified plan and the related interest are subject to vesting based on years of service.
Code.
Termination Benefits: Severance and Change in Control Agreements
We have entered into
agreements with each of our NEOs that provide for “double trigger” severance and change in control
agreements with our NEOs other than Mr. Wexner.payments and benefits. See
“Retirement“—Retirement and Other Post-Employment Benefits—Estimated Post-Employment Payments and Benefits”
below for a description of estimated benefits in certain termination situations, including a change in control.
On February 12, 2016 the Company announced the resignation of Sharen Jester Turney as President and CEO of Victoria’s Secret. Ms. Turney transitioned out of her employment at the end of March 2016 and will be entitled to certain payments and benefits under the terms of her employment agreement as described under “Retirement and Other Post-Employment Benefits—Estimated Post-Employment Payments and Benefits.”Upon a change in control,
equity awards will only vest if the executive’s employment is terminated by the executive for good reason or by the Company other than for cause within 24 months of the change in control.
None of our NEOs is entitled to a tax gross-up uponfor any excise taxes on compensation paid in connection with a change in control. It is
In addition, in connection with his retirement in fiscal year 2021, we entered into a retirement agreement with Mr. Burgdoerfer that memorialized the Company’s policyterms of his retirement and certain aspects of his compensation. For additional details, see “–Mr. Burgdoerfer’s Retirement” below.
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Mr. Burgdoerfer’s Retirement
In February 2021, Mr. Burgdoerfer indicated his intention to retire and, at the request of the Board, agreed to continue to provide support and leadership in his role as Executive Vice President and Chief Financial Officer as well as serving as the Company executive in charge of the Separation process. From February 2021 through the closing of the Separation, Mr. Burgdoerfer performed critical roles for the Company, including (i) evaluating strategic options for the disposition or separation of the Victoria’s Secret business that would best serve stockholder interests, (ii) together with Ms. Nash, meeting with external advisors and potential acquirers related to the separation of the Victoria’s Secret business, and (iii) leading the Separation team to ensure the successful completion of the Separation while minimizing distraction for other members of our leadership team who were performing critical roles for the business. The specific terms of Mr. Burgdoerfer’s retirement were memorialized in an agreement with the Company in August 2021. This agreement provided for, among other things, that Mr. Burgdoerfer would cease to serve as Executive Vice President and Chief Financial Officer on August 2, 2021 and would retire from our Company on August 20, 2021, and also memorialized the terms and conditions relating to certain components of Mr. Burgdoerfer’s compensation, including his Separation completion bonus and the treatment of his outstanding cash retention award. For additional details on these arrangements, see “–Compensation for NEOs–Short-Term Performance-Based Incentive Compensation” and “–Compensation for NEOs–Long-Term Equity Compensation–Cash Retention Awards Granted in Fiscal Year 2020” above. In addition, this agreement also provided that, in the event Mr. Burgdoerfer elected continuation coverage under COBRA, Mr. Burgdoerfer would be entitled to a payment equal to 18-months of COBRA premiums. The treatment of Mr. Burgdoerfer’s outstanding equity incentive awards in connection with his retirement was determined in accordance with the existing terms and conditions set forth in the applicable plan documents and award agreements. The payments memorialized in this agreement were subject to Mr. Burgdoerfer’s (i) continued employment through the retirement date, (ii) compliance with applicable restrictive covenants, (iii) execution of a release of claims in favor of the Company (which he was not
otherwise contractually committed to
enter into any new arrangements providing for changeprovide) and (iv) agreement to cooperate with the Company in
control excise tax gross-up payments.connection with certain matters in which he was involved or had knowledge during his employment.
We provide our NEOs with minimal perquisites that the
CompensationHCC Committee has determined are reasonable and in the best interests of the Company and its stockholders. These perquisites
may include
the reimbursement of financial planning costs of up to $9,500supplemental disability and
for Ms. Turney, payment of life insurance
policy premiums.CEO Compensation
Overview of CEO Pay
Mr. Wexner is a recognized unique talent: an innovator and leader in the retail industry. His long record of success in leadingcoverage provided by the Company is unmatched in scope and duration by any other retailer. In November 2015, Mr. Wexner was recognized by the Harvard Business Review as the best-performing CEO in the world based on total shareholder return during his tenure as our founder and CEO. The Compensation Committee has determined that his extraordinary contributions as the Company’s CEO deserve to be fully reflected in his compensation.
The Company’s performance, including significant increases in sales, operating income and adjusted earnings per share in fiscal 2015 over fiscal 2014, is reflected in Mr. Wexner’s short-term and long-term performance-based incentive compensation for fiscal 2015. The increase year over year from fiscal 2014 to 2015 is linked to an increase to Mr. Wexner’s base salary, an increase to his target short term performance-based incentive compensation, as well as performance that exceeded our stretch goals. The increases to Mr. Wexner’s base salary and target short term performance-based incentive compensation were made by the Compensation Committee in accordance with the Compensation Committee’s belief that Mr. Wexner should be rewarded for his continued ability to drive performance, growth and shareholder returns.
CEO Stock Award Determination Overview
Beginning with fiscal 2010, the Compensation Committee implemented an annual process in which Mr. Wexner’s stock grant would be a “split grant” delivered in two parts—one in the Springassociates at the same time other senior executives receive stock grants,Vice President level and one near the end of the Fall season when Mr. Wexner’s and the Company’s performance can be substantially determined for the fiscal year.
Spring 2015 Award
The value of the Spring stock award is setabove, including our NEOs. Except as noted below the competitive market to provide a baseline award while imposing a performance requirement for the award to be earned. The Compensation Committee granted Mr. Wexner a stock award in Spring 2015 with a reported value of $2.9 million.
Fall 2015 Award
As the fiscal year draws to a close, the Compensation Committee assesses both Mr. Wexner’s and the Company’s performance, and if deemed appropriate, grants Mr. Wexner a performance-based stock award in January. This Fall stock award is intended to recognize financial, strategic and operational performance for the fiscal year and incent future performance.
For fiscal 2015, the Compensation Committee set the Fall stock award value range from zero at minimum, to $7.3 million at target and $17.8 million at maximum.
The range was set in recognition of Mr. Wexner’s standing as a top-performing CEO and in consideration of a benchmark of stock award values for CEOs in our peer group. The Compensation Committee also considered the importance of Mr. Wexner’s experience and leadership to the Company’s outstanding performance, including the delivery of high total shareholder return, which has increased at a much more rapid rate than his compensation.
The top of the range has been strategically positioned so that if all qualitative, objective and financial performance targets for the year are exceeded, and if the Company is among the highest performing of our peer companies, Mr. Wexner’s stock award value would be among the top of our peer group.
Conversely, if performance is below targeted levels, Mr. Wexner’s stock award value would be correspondingly lower or there would be no Fall stock award.
In addition to performance against pre-established financial targets, the Compensation Committee considers factors such as leadership talent development, the identification and development of new business opportunities, and success in fostering a high performance culture, in determining the size of Mr. Wexner’s Fall stock award. Once the size of the grant is determined, the Compensation Committee imposes a performance metric that the Company must achieve over the vesting period in order for Mr. Wexner to vest in the award.
In January 2016, the Compensation Committee granted Mr. Wexner a fiscal 2015 stock award with a reported value of $14.1 million based on the performance of the Company and his role and leadership in its accomplishments for the current fiscal year, including:
| • | | Increasing sales 6%, operating income 12%, adjusted net income1 14% and adjusted earnings per share1 14%;
|
Growth of the business in North America through compelling merchandise assortments, marketing and store and online experiences for our customers;
Management of fundamentals including controlling inventory, expenses and capital with discipline, faster execution and expense leverage;
Expansion of operations outside the United States and Canada including 149 new company-owned and franchised stores;
Accomplishment of talent and cultural objectives;
Optimization of capital structure, allowing the Company to pay cash out to shareholders, while maintaining a strong credit profile among lenders, landlords and suppliers; and
Return of value to stockholders that is the best among our peer companies, including annualized total shareholder returns of 19%, 30% and 35% over one, three and five years, respectively.
Both the Spring and Fall awards are delivered 75% in the form of performance-based RSUs and 25% in the form of stock options. Mr. Wexner’s RSU awards are subject to the same performance and vesting requirement as those of our other NEOs. The performance-based RSUs and stock options vest over five years, with 20% vesting on each of the second and third anniversaries of the grant date, and 30% on each of the fourth and fifth anniversaries. Performance-based RSUs must be earned based on achievement of adjusted operating income, as a percentage of cumulative sales, in the top one-third of the S&P Retailing Index (also determined on a cumulative and adjusted basis).
1 | The reconciliation of such measure to the comparable figure determined in accordance with GAAP is included on page 23 of the Company’s 2015 Annual Report on Form 10-K.
|
CEO Termination Benefits
Due to his unique role as the founder of the Company, Mr. Wexner is not covered by a severance or change in control agreement. However, consistent with the treatment for all stock plan participants under the terms of our 2015 Plan and prior plan, all of Mr. Wexner’s unvested stock options and RSUs will vest upon death. Subject to the achievement of pre-established performance conditions, RSUs will continue to vest upon Mr. Wexner’s total disability. Upon retirement, RSUs will vest pro-rata based on the fraction of whole months worked from the grant date over the full vesting period (i.e., one-fifth will vest if twelve full months are completed from the grant date for a grant that would otherwise vest over five years), subject to achievement of pre-established performance conditions. In the event of a change in control, unvested RSU awards will vest if Mr. Wexner’s employment is terminated other than for cause within 24 months of the change in control.
CEO Perquisites
The Board of Directors has approved a security program (the “Security Program”) that provides security services to Mr. Wexner and his family. The Security Program is required for the benefit of the Company and is appropriate given the risks associated with Mr. Wexner’s position. We periodically hire a third party to review our Security Program to verify that a bona fide business oriented security concern exists and that the Security
Program costs are reasonable and consistent with these concerns. The Security Program requires Mr. Wexner to use corporate provided aircraft, or private aircraft that is in compliance with the Security Program, whether the purpose of the travel is business or personal.
The cost of security services which are not business related have been reimbursed to the Company by Mr. Wexner. In addition,Chief Executive Officer, to the extent that corporate provided aircraft is used by Mr. Wexner or any other NEO for personal purposes, he or she has reimbursedthe NEO must reimburse the Company based on the greater of the amount established by the Internal Revenue Service (“IRS”) as reasonable for personal use or the aggregate incremental cost associated with the personal use of the corporate owned aircraft as determined by an independent, third party aircraft costing service. None of our NEOs other than our Chief Executive Officer used corporate provided aircraft for personal purposes during fiscal year 2021. We also provide relocation benefits, as applicable, pursuant to the Company’s policy applicable to senior executives.
Chief Executive Officer Compensation
Overview of Chief Executive Officer Pay
The HCC Committee determined that Mr. Meslow’s track record of success at Bath & Body Works in navigating the challenges that have faced the business, including the continued navigation of a global pandemic and the integration of previously shared functions into Bath & Body Works as a standalone public company following the Separation, made his leadership critical to the Company during fiscal year 2021. With these considerations in mind, the HCC Committee designed Mr. Meslow’s compensation to provide significant performance incentives, thereby closely aligning his interests with those of our stockholders.
Chief Executive Officer Compensation Elements
Mr. Meslow’s fiscal year 2021 compensation included substantially the same compensation components as the other NEOs. He participated in our short-term performance-based incentive compensation plan, long-term performance-based equity incentive compensation plan, cash retention program and retirement plan described above under the heading “—Compensation for NEOs”.
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Chief Executive Officer Termination Benefits
Mr. Meslow is entitled to severance protections similar to those covering other Company executives. In the event of a termination of his employment by the Company without cause or his resignation for good reason absent a change in control, he is entitled to receive cash severance of two years’ base salary and one year of incentive compensation based on actual results. In the event of a termination of his employment by the Company without cause or his resignation for good reason within two years following a change in control, he is entitled to receive cash severance of two years’ base salary and two years’ incentive compensation (at average historical levels), plus a pro rata payment of any unpaid retention payments. In addition, upon a termination of employment by the Company without cause or a resignation for good reason (whether or not in connection with a change in control), the Company will provide, at its expense, medical and dental benefits for a period of up to 18 months following the termination date. Such payments and benefits are quantified under “–Retirement and Other Post-Employment Benefits–Estimated Post-Employment Payments and Benefits” below. The terms of Mr. Meslow’s upcoming separation from our Company in May 2022 have not been determined as of the filing date of this proxy statement.
Chief Executive Officer Perquisites
The Board has approved the use of corporate provided aircraft for personal purposes by the Company's Chief Executive Officer to ensure his safety and promote the efficient and effective use of his time while travelling. During fiscal year 2021, Mr. Meslow reimbursed the Company for use of corporate provided aircraft for personal purposes based on the IRS’s Standard Industrial Fare Level (“SIFL”) formula. The aggregate incremental cost to the Company of Mr. Meslow’s personal use of Company aircraft after taking into account Mr. Meslow’s reimbursement amounts is disclosed in the All Other Compensation column of the 2021 Summary Compensation Table.
Human Capital & Compensation CommitteeOur executive
The HCC Committee oversees the human capital management of the Company, including its diversity, equity and inclusion programs, policies and strategies, as well as the Company’s compensation
program is overseen by the Compensation Committee. Compensationand benefits philosophy and policies. All HCC Committee members are appointed by our Board and meet
applicable independence and other NYSE requirements.
CompensationHCC Committee members are selected based on their knowledge and experience in
human capital and compensation matters from both their professional experience and their roles on other boards.
As part of its self-evaluation process, the
CompensationHCC Committee considers prevailing best practices and compliance with the highest governance standards. During fiscal
2015,year 2021, the
CompensationHCC Committee also continued to engage with the full Board to maximize its effectiveness. The role of the
CompensationHCC Committee and information about its meetings are set forth in this proxy
statement.statement under the heading “Proposal 1: Election of Directors—Committees of the Board—Human Capital & Compensation Committee.”
The
CompensationHCC Committee participated in the preparation of this CD&A and recommended to the Board that it be included in this proxy statement.
The
CompensationHCC Committee, together with the Company, also evaluates the Company’s compensation structure from the perspective of enterprise risk. The
CompensationCompany’s compensation structure includes risk mitigating factors such as a mix of pay that is balanced between long- and short-term, and fixed and variable payouts under the 2015 Plan, the 2020 Plan and the 2015 ICPP. Based on this evaluation, the HCC Committee believes that the Company’s compensation structures are appropriate and do not
incentivizeincent inappropriate taking of business risks.
The
Compensation Committee’sHCC Committee is governed by a charter
which is available on our website at
www.lb.comwww.bbwinc.com.
Committee Meetings and Delegation Members of Company management, including theour Chief OperatingExecutive Officer and the Chief Financial Officer, attends Compensationattend the HCC Committee meetings along with the Senior Vice President of Total Rewards,our Chief Human Resources Officer, who generally prepares meeting materials, and the CorporateChief Legal Officer and Secretary, who records the minutes of the meeting. Management,Members of Company management, including the CEO, doesChief Executive Officer, do not play a role in recommending CEOChief Executive Officer compensation. The CompensationHCC Committee regularly meets in executive session without management present.
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The
CompensationHCC Committee may delegate its authority to subcommittees or the Chair of the
CompensationHCC Committee. In accordance with its charter, the
CompensationHCC Committee has delegated to our Chief
OperatingHuman Resources Officer
or his designee, the authority to make stock awards
in accordance withunder the
Company’s stock incentive planprovisions of the 2020 Plan with a value up to
$400,000$500,000 in any year to any associate who is not a Section 16 officer of the
Company or a senior leadership team member.Company.
Independent Compensation Consultant As permitted by its charter, the
CompensationHCC Committee retained Willis Towers Watson as its independent executive compensation consultant and has the sole authority to retain and terminate any independent executive compensation consultant.
The
CompensationHCC Committee, considering recommendations from our management team, determines the work to be performed by the consultant. The consultant works with management to gather data required in preparing analyses for
CompensationHCC Committee review. Specifically, the services the consultant provides include:
Assisting in evaluation of, CEOand providing recommendations for, Chief Executive Officer and other NEO compensation;
Informing the CompensationHCC Committee of changing market practices;
Consulting on our executive compensation strategy and program design;
Analyzing alignmentthe competitiveness of pay and performance;
executive pay;Assisting in the selection of our peer group;groups; and
Assisting in the preparation and review of this disclosure.
In addition to the services provided at the request of the HCC Committee, management, with the knowledge of the HCC Committee, has engaged Willis Towers Watson didfor a limited number of additional services, including provision of a call center tracking system for which we pay quarterly software usage fees (provided by a separate division of Willis Towers Watson) and provision of certain compensation survey reports. For fiscal year 2021, the fees for services provided to management were less than $120,000. The HCC Committee has determined that the provision of these limited services by Willis Towers Watson to management is not providematerial and does not impair the independence and objectivity of advice provided to or otherwise raise any conflict of interest for the HCC Committee on executive compensation matters.
The HCC Committee reviews and approves the provision of additional services
by Willis Towers Watson to the Company
exceeding $120,000 during the fiscal year.The Compensation Committeeand evaluates the performance and independence of Willis Towers Watson, specifically considering independence factors identified by the Commission.NYSE listing rules. This evaluation includes a review of written representations from Willis Towers Watson confirming their independence. Based on its evaluation, the CompensationHCC Committee believes that there are no conflicts of interest that could impair Willis Towers Watson’s ability to provide independent, objective advice to the CompensationHCC Committee regarding executive compensation matters.
Tax DeductibilityThe Compensation Committee seeks to structure tax-efficient executive compensation. The 2015 ICPP and the 2015 Plan are intended to qualify short term cash incentive payments and long term equity incentive compensation for tax deductibility under
Section 162(m) of the Code. To maintainCode generally does not allow a tax deduction to public companies for compensation paid to certain executive officers that is more than $1 million during the tax year. Section 162(m) of the Code provided an exemption from this deduction limitation for compensation that qualified as “performance-based compensation.” However, as part of the Tax Cuts and Jobs Act of 2017, this exemption was repealed, effective for taxable years beginning after December 31, 2017, subject to transition relief for certain arrangements in place as of November 2, 2017. The Company intends to administer grandfathered compensation in accordance with the transition relief to the extent reasonably practicable. Going forward, non-grandfathered annual compensation in excess of $1 million for our covered senior executives will generally not be deductible. The HCC Committee continues to have the flexibility to pay non-deductible compensation if it believes it is in structuring executive compensation, the Compensation Committee has not adopted a policy requiring all compensation to be tax deductible.best interests of the Company.
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Under the 2015 ICPP,
and the 2015 Plan
and the
Compensation2020 Plan, the HCC Committee has the power and authority to recover previously awarded bonuses or equity-based compensation or profits if (i) required by applicable law with respect to a participant, (ii) a participant engaged in fraudulent conduct or activities (or had knowledge of such conduct or activities) relating to the Company or (iii) a participant should have had knowledge of such conduct or activities based on his or her position, duties or responsibilities.
To assess the reasonableness of the compensation of our NEOs, the CompensationHCC Committee annually reviews a three-year history of all of the components of the NEOs’ compensation, including salary, short termshort-term incentive compensation, realized and unrealized gains on stock options, PSUs and RSUs, the cost to the Company of all perquisites, benefits earned and accrued under the Company’s non-qualified deferred compensation plan and supplemental executive retirement plan, and potential payouts under several potential severance and change-in-control scenarios. Based on this review, the CompensationHCC Committee concluded that our NEOs’ compensation components individually and in aggregate are reasonable, encourage retention, incent performance and are in the best interests of the Company and its stockholders.
Conclusion |
| | | |
We are committed to aligning our executive compensation with our Company’s performance. In connection with the Company’s strong performance in fiscal year 2021, our NEOs earned above-target short-term performance incentive payments according to the payout formulas established at the beginning of each six month performance period. Substantially all of the long-term equity incentive is subject to challenging performance requirements that will only be earned if the Company achieves rigorous growth and profitability metrics that provide incentive for a balance of growth and profitability, support the strategic direction of the Company, and are aligned with the interests of our stockholders. |
| | | |
As disclosed in last year’s CD&A, in fiscal year 2020, special one-time cash retention awards were granted to certain of our NEOs in light of the turbulent business environment in which we were operating and were viewed as a critical tool during a period of significant uncertainty to retain our key leaders and to help ensure the successful completion of the Separation, the long-term health of our business and the preservation of stockholder value. |
| | | |
In summary, there is alignment between our performance, our stockholders’ interests and our NEOs’ pay. Accordingly, we recommend stockholders vote FOR our executive compensation program as outlined in “Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation.” |
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Conclusion
In summary, fiscal 2015 was another yearHUMAN CAPITAL & COMPENSATION COMMITTEE REPORT The HCC Committee of record-setting performancethe Board is composed of five directors who are independent, as defined under the NYSE listing standards. Additionally, each member of the HCC Committee is a “non-employee director” within the meaning of Section 16b-3 under the Securities Exchange Act of 1934. The HCC Committee reviews the CD&A on behalf of the Board.
The HCC Committee has reviewed and
returnsdiscussed the CD&A with management, and based on the review and discussions, the HCC Committee recommended to
stockholdersthe Board that
outpaced our peersthe CD&A be included in the 2021 10-K and the
general market. Our ability to deliver strong financial performance and provide extraordinary returns to stockholders is a direct result of focused and disciplined execution by our NEOs. Their success is reflected in their compensation for fiscal 2015 demonstrating our commitment to delivering pay for performance.The effectiveness of our compensation program at providing pay for performance over time is further validated by our financial performance over the last five years relative to the increase in CEO pay. Since 2010, the average annual increase in adjusted sales, operating income, earnings per share and total shareholder return exceeds the average increase in CEO compensation over the same time period. Our compensation program is aligned with our performance over time, providing incentives that are in the best interest of our stockholders.
Based on the above, we recommend stockholders vote FOR the executive compensation program.
Company’s 2022 proxy statement.
| | | Human Capital & Compensation Committee |
| | | |
| | | Michal G. Morris, Chair |
| | | Patricia S. Bellinger |
| | | Francis A. Hondal |
| | | Danielle M. Lee |
| | | Robert H. Schottenstein |
2015TABLE OF CONTENTS
2021 Summary Compensation Table
The following table sets forth information concerning total compensation earned by or paid to our
CEO,Chief Executive Officer, our Chief Financial Officer,
and our three other most highly compensated NEOs
and our former Executive Vice President and Chief Financial Officer during
the fiscal year
ended January 30, 2016. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary
($) | | | Bonus
($)(1) | | | Stock
Awards
($)(2)(3) | | | Option
Awards
($)(2)(3) | | | Non-Equity
Incentive
Plan
Compen-
sation ($)(4) | | | Change
in
Pension
Value
and
Non-
qualified
Deferred
Compen-
sation
Earnings
($)(5) | | | All Other
Compen-
sation
($)(6) | | | Total ($)
(1)(2)(3)
(4)(5)(6) | |
Leslie H. Wexner | | | 2015 | | | $ | 1,985,385 | | | $ | 0 | | | $ | 13,005,048 | | | $ | 3,998,333 | | | $ | 6,749,600 | | | $ | 498,794 | | | $ | 930,940 | | | $ | 27,168,100 | |
Chairman of the Board, CEO | | | 2014 | | | | 1,924,000 | | | | 0 | | | | 11,174,435 | | | | 3,410,577 | | | | 6,342,273 | | | | 448,922 | | | | 793,829 | | | | 24,094,036 | |
| | | 2013 | | | | 1,924,000 | | | | 0 | | | | 7,509,032 | | | | 2,256,513 | | | | 2,839,670 | | | | 410,405 | | | | 936,302 | | | | 15,875,922 | |
| | | | | | | | | |
Sharen J. Turney | | | 2015 | | | | 1,488,846 | | | | 0 | | | | 5,618,477 | | | | 534,079 | | | | 4,714,800 | | | | 305,512 | | | | 670,568 | | | | 13,332,282 | |
CEO/President, Victoria’s Secret | | | 2014 | | | | 1,442,000 | | | | 0 | | | | 3,397,860 | | | | 675,438 | | | | 4,636,838 | | | | 267,668 | | | | 493,062 | | | | 10,912,866 | |
| | | 2013 | | | | 1,433,923 | | | | 0 | | | | 3,342,816 | | | | 775,527 | | | | 1,427,580 | | | | 235,835 | | | | 578,653 | | | | 7,794,334 | |
| | | | | | | | | |
Charles C. McGuigan | | | 2015 | | | | 1,197,788 | | | | 0 | | | | 4,060,166 | | | | 254,325 | | | | 2,876,250 | | | | 79,210 | | | | 391,404 | | | | 8,859,143 | |
Chief Operating Officer, CEO/President, Mast Global | | | 2014 | | | | 978,500 | | | | 0 | | | | 2,259,482 | | | | 261,901 | | | | 2,257,869 | | | | 66,695 | | | | 315,018 | | | | 6,139,465 | |
| | | 2013 | | | | 973,019 | | | | 0 | | | | 3,055,714 | | | | 300,715 | | | | 988,128 | | | | 57,036 | | | | 385,589 | | | | 5,760,201 | |
| | | | | | | | | |
Nicholas Coe | | | 2015 | | | | 985,577 | | | | 0 | | | | 3,178,121 | | | | 203,455 | | | | 3,200,000 | | | | 19,137 | | | | 346,684 | | | | 7,932,974 | |
CEO/President, Bath & Body Works | | | 2014 | | | | 925,000 | | | | 0 | | | | 2,075,856 | | | | 247,587 | | | | 2,373,735 | | | | 10,815 | | | | 274,511 | | | | 5,907,504 | |
| | | 2013 | | | | 905,769 | | | | 0 | | | | 5,309,728 | | | | 284,272 | | | | 1,230,639 | | | | 4,111 | | | | 227,160 | | | | 7,961,679 | |
| | | | | | | | | |
Stuart B. Burgdoerfer | | | 2015 | | | | 847,262 | | | | 0 | | | | 2,710,253 | | | | 173,503 | | | | 1,962,293 | | | | 49,375 | | | | 309,802 | | | | 6,052,487 | |
Executive Vice President, Chief Financial Officer | | | 2014 | | | | 824,000 | | | | 0 | | | | 1,849,186 | | | | 220,550 | | | | 1,833,458 | | | | 40,300 | | | | 262,535 | | | | 5,030,029 | |
| | | 2013 | | | | 819,385 | | | | 0 | | | | 1,091,541 | | | | 253,235 | | | | 800,104 | | | | 33,226 | | | | 295,408 | | | | 3,292,899 | |
Andrew M. Meslow
Chief Executive Officer
| | | 2021 | | | 1,335,577 | | | 4,000,000 | | | 5,444,545 | | | 1,903,973 | | | 4,625,208 | | | 80,547 | | | 278,777 | | | 17,668,627 |
| | 2020 | | | 1,183,462 | | | 0 | | | 12,330,555 | | | 0 | | | 4,489,428 | | | 146,274 | | | 345,220 | | | 18,494,939 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Wendy C. Arlin
Executive Vice President,
Chief Financial Officer
| | | 2021 | | | 712,884 | | | 496,000 | | | 1,858,830 | | | 0 | | | 1,143,775 | | | 20,777 | | | 56,044 | | | 4,288,310 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
James L. Bersani
President, Real Estate
| | | 2021 | | | 832,308 | | | 1,500,000 | | | 777,826 | | | 272,009 | | | 2,120,563 | | | 107,035 | | | 80,509 | | | 5,690,250 |
| | 2020 | | | 763,077 | | | 250,000 | | | 0 | | | 0 | | | 1,594,880 | | | 197,626 | | | 191,420 | | | 2,997,003 |
| | 2019 | | | 794,231 | | | 0 | | | 1,120,586 | | | 211,995 | | | 770,784 | | | 180,374 | | | 233,514 | | | 3,311,484 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Julie B Rosen
President
| | | 2021 | | | 866,153 | | | 0 | | | 1,169,319 | | | 271,987 | | | 1,804,102 | | | 0 | | | 21,018 | | | 4,132,579 |
| | 2020 | | | 277,885 | | | 1,000,000 | | | 849,986 | | | 0 | | | 805,632 | | | 0 | | | 870 | | | 2,934,373 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deon N. Riley
Chief Human Resources Officer
| | | 2021 | | | 758,077 | | | 1,750,000 | | | 1,052,655 | | | 231,194 | | | 1,096,346 | | | 0 | | | 41,189 | | | 4,929,461 |
| | 2020 | | | 54,808 | | | 0 | | | 749,996 | | | 0 | | | 720,000 | | | 0 | | | 209 | | | 1,525,013 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stuart B. Burgdoerfer(7)
Former Chief Financial
Officer
| | | 2021 | | | 786,923 | | | 5,000,000 | | | 0 | | | 0 | | | 1,728,000 | | | 54,723 | | | 92,781 | | | 7,662,427 |
| | 2020 | | | 1,068,462 | | | 0 | | | 0 | | | 0 | | | 3,009,636 | | | 100,128 | | | 241,317 | | | 4,419,543 |
| | 2019 | | | 900,000 | | | 0 | | | 1,260,644 | | | 238,495 | | | 1,114,884 | | | 89,235 | | | 303,913 | | | 3,907,171 |
(1)
| Performance-basedBonuses paid to Messrs. Meslow, Burgdoerfer and Bersani and Ms. Arlin represent the payment in fiscal year 2021 of the first two installments of special one-time cash retention awards approved by the HCC Committee during fiscal year 2020 to ensure long-term retention during particularly turbulent times for our business. The bonus amount reported for Ms. Riley includes $1,500,000 paid as a hiring incentive compensation bonuses are disclosed in this tableconnection with her employment offer and a cash retention bonus of $250,000. Ms. Riley’s hiring incentive bonus is required to be reimbursed in full if Ms. Riley voluntarily resigns for any reason or is involuntarily terminated for Cause (as defined below under the Non-Equity Incentive Plan Compensation column. Noneheading “—Retirement and Other Post-Employment Benefits—Estimated Post-Employment Payments and Benefits—Termination Provisions—Definitions of Cause and Good Reason”) before the second anniversary of her hire date. In addition, this column also reflects a one-time cash bonus of $2,000,000 paid to Mr. Burgdoerfer during fiscal year 2021 in recognition of his significant leadership and contributions as our NEOs received a nonperformance-based award in fiscal 2015.
Executive Vice President and Chief Financial Officer and the Company executive overseeing and leading the successful completion of the Separation, which such payment was conditioned on the actual occurrence of the Separation. |
(2)
| The value of stock and option awards reflects the aggregate grant date fair value, excluding estimated forfeitures, computed in accordance with Accounting Standards Codification (“ASC”) Topic 718 Compensation—Stock Compensation, for each award. Stock options are valued using the Black-Scholes option pricing model. See Note 18 to the Company’s financial statements filed in the Company’s 2015 Annual Report on Form 10-K for the related assumptions for stock options granted during fiscal 2015, 2014 and 2013 and for a discussion of our assumptions in determining the aggregateThe grant date fair value of these awards. Awards vestthe PSUs granted to the NEOs during fiscal year 2021 was calculated based on the probable outcome of the performance conditions as of the grant date, consistent with the estimate of aggregate compensation cost to be recognized over timethe service period determined as of the grant date under ASC Subtopic 718-10, excluding the effect of estimated forfeitures. The grant date value of the PSUs granted to the NEOs in fiscal year 2021 assuming the maximum level of performance conditions will be achieved is $5,094,556 for Mr. Meslow, $727,824 for Mr. Bersani, $727,824 for Ms. Rosen and therefore, are not realizable on an annual basis, nor is the ultimate value determinable without reference to future performance. $618,650 for Ms. Riley. |
See Note 19 to the Company’s financial statements filed in the 2021 10-K for the related assumptions for stock awards and stock options granted during fiscal year 2021 and for a discussion of our assumptions in determining the aggregate grant date fair value of these awards.
(3)
| Stock and option awards were granted to each NEO under the Company’s 2011 Stock Option2015 Plan and Performance Incentive Plan (the “2011 Plan”) and the 20152020 Plan. Awards are long termlong-term compensation and generally vest over three to five years and are not realizable on an annual basis. See discussion under the heading “—Compensation Discussion and Analysis—Executive Compensation Philosophy—Long-Term Equity Compensation” for additional detail. |
(4)
| Represents the aggregate of the non-equity performance-based incentive compensation for the applicable fiscal Spring and Fall selling seasons. Incentive compensation targets are set based on a percentage of base salary and are paid seasonally based on the achievement of adjusted operating income results. The following table illustratesSee discussion under the amount of the compensation which is paid in cashheading “—Compensation Discussion and voluntarily deferred: Analysis—Executive Compensation Philosophy—Short -Term Performance-Based Incentive Compensation” for additional detail. |
| | | | | | | | | | | | |
| | | Paid in
Cash
($) | | | Deferred
Cash
($) | | | Total
($) | |
Mr. Wexner | | $ | 6,547,112 | | | $ | 202,488 | | | $ | 6,749,600 | |
Ms. Turney | | | 4,571,510 | | | | 143,290 | | | | 4,714,800 | |
Mr. McGuigan | | | 2,790,701 | | | | 85,549 | | | | 2,876,250 | |
Mr. Coe | | | 3,101,412 | | | | 98,588 | | | | 3,200,000 | |
Mr. Burgdoerfer | | | 1,898,854 | | | | 63,439 | | | | 1,962,293 | |
(5)
| The Company does not sponsor a defined benefit retirement plan (tax-qualified or non-qualified). The Company’s non-qualified deferred compensation plan was terminated in fiscal year 2020 and balances were distributed in July 2021. For fiscal 2015, the amounts shown represent the amount by whichyear 2021, earnings accrued at an annual effective rate of 3.34% on each NEO’s non-qualified plan balance up to the distribution date. Amounts disclosed represent earnings that exceed earnings calculated at a rate equal to 120% of the applicable federal long term rate. long-term rate at the time the rate was set in October 2020. |
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(6)
| The following table details all other compensation paid to each NEO during our last fiscal year: year 2021: |
| | | | | | | | | | | | | | | | | | | | |
| | | Financial
planning
services
provided
to
executive
($) | | | Life
insurance
premiums
and
related tax
paid on
executive’s
behalf
($) | | | Cash
payout of
fractional
shares due
to special
dividend
stock
award
adjustment
($) | | | Company
contributions to
the executive’s
qualified and
non-qualified
retirement plan
account
($) | | | Total
($) | |
Mr. Wexner | | $ | 0 | | | $ | 0 | | | $ | 805 | | | $ | 930,135 | | | $ | 930,940 | |
Ms. Turney | | | 9,500 | | | | 14,919 | | | | 607 | | | | 645,542 | | | | 670,568 | |
Mr. McGuigan | | | 3,410 | | | | 0 | | | | 718 | | | | 387,276 | | | | 391,404 | |
Mr. Coe | | | 0 | | | | 0 | | | | 380 | | | | 346,304 | | | | 346,684 | |
Mr. Burgdoerfer | | | 9,500 | | | | 0 | | | | 391 | | | | 299,911 | | | | 309,802 | |
Mr. Meslow | | | 546 | | | 153,499 | | | 0 | | | 124,732 | | | 278,777 |
Ms. Arlin | | | 630 | | | 55,414 | | | 0 | | | 0 | | | 56,044 |
Mr. Bersani | | | 974 | | | 79,535 | | | 0 | | | 0 | | | 80,509 |
Ms. Rosen | | | 731 | | | 0 | | | 20,287 | | | 0 | | | 21,018 |
Ms. Riley | | | 638 | | | 0 | | | 40,551 | | | 0 | | | 41,189 |
Mr. Burgdoerfer | | | 0 | | | 92,781 | | | 0 | | | 0 | | | 92,781 |
(a)
| As part of Ms. Rosen’s and Ms. Riley’s relocation packages to Columbus, Ohio, Ms. Rosen received $10,987 of relocation assistance with an additional $9,300 of related tax assistance in connection therewith and Ms. Riley received $21,962 of relocation assistance with an additional $18,589 of related tax assistance in connection therewith. |
(b)
| The amount reflects the aggregate incremental cost to the Company of Mr. Meslow’s personal use of the Company aircraft after taking into account Mr. Meslow’s reimbursement of amounts based on the IRS’s SIFL formula. The Company calculates the aggregate incremental cost to the Company based on an hourly charge for use of Company aircraft that includes variable charges such as fuel, salaries of flight personnel, landing and parking fees and variable maintenance as well as certain fixed fees associated with operating the Company’s aircraft. |
(7)
| Mr. Burgdoerfer ceased to serve as Executive Vice President and Chief Financial Officer on August 2, 2021 and retired from our Company on August 20, 2021. |
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Grants of Plan-Based Awards for Fiscal
2015Year 2021
The following table provides information relating to plan-based awards and opportunities granted to the NEOs during
the fiscal year
ended January 30, 2016. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Grant
Date | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1) | | | Estimated Future Payouts
Under Equity Incentive Plan
Awards(2) | | All
Other
Stock
Awards:
Number
of
Shares of
Stock
or Units
(#)(3) | | | All
Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4) | | | Exercise
or Base
Price of
Option
Awards
($/Sh) | | | Grant
Date Fair
Value of
Stock and
Option
Awards
($)(5) | |
| | | Threshold
($) | | | Target
($) | | | Maximum
($) | | | Threshold
(#) | | Target
(#) | | | Maximum
(#) | | | | |
Leslie H. Wexner | | | 4/2/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,693 | | | $ | 93.41 | | | $ | 691,912 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 25,693 | | | | | | | | | | | | | | | | | | 2,179,280 | |
| | | 1/27/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 127,700 | | | | 93.97 | | | | 3,306,421 | |
| | | 1/27/2016 | | | | | | | | | | | | | | | | | | 127,700 | | | | | | | | | | | | | | | | | | 10,825,768 | |
| | | | | | $ | 880,000 | | | $ | 4,400,000 | | | $ | 8,800,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
Sharen J. Turney | | | 4/2/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 42,153 | | | | 93.41 | | | | 534,079 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 24,087 | | | | | | | | | | | | | | | | | | 2,043,059 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 42,153 | | | | | | | | | | | | | | | | | | 3,575,417 | |
| | | | | | | 600,000 | | | | 3,000,000 | | | | 6,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
Charles C. McGuigan | | | 3/9/2015 | | | | | | | | | | | | | | | | | | | | | | | | 1,032 | | | | | | | | | | | | 87,452 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,073 | | | | 93.41 | | | | 254,325 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 26,764 | | | | | | | | | | | | | | | | | | 2,270,122 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 20,073 | | | | | | | | | | | | | | | | | | 1,702,592 | |
| | | | | | | 375,000 | | | | 1,875,000 | | | | 3,750,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
Nicholas Coe | | | 4/2/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,058 | | | | 93.41 | | | | 203,455 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 21,411 | | | | | | | | | | | | | | | | | | 1,816,081 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 16,058 | | | | | | | | | | | | | | | | | | 1,362,040 | |
| | | | | | | 320,000 | | | | 1,600,000 | | | | 3,200,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
Stuart B. Burgdoerfer | | | 4/2/2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,694 | | | | 93.41 | | | | 173,503 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 18,259 | | | | | | | | | | | | | | | | | | 1,548,728 | |
| | | 4/2/2015 | | | | | | | | | | | | | | | | | | 13,694 | | | | | | | | | | | | | | | | | | 1,161,525 | |
| | | | | | | 255,840 | | | | 1,279,200 | | | | 2,558,400 | | | | | | | | | | | | | | | | | | | | | | | | | |
Mr. Meslow | | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | | | | 86,348 | | | $48.64 | | | 1,903,973 |
| | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | 43,174 | | | | | | | | | 2,048,175 |
| | | 3/16/2021 | | | | | | | | | | | | 35,979 | | | 71,957 | | | 107,936 | | | | | | | | | | | | 3,396,370 |
| | | | | | 513,000 | | | 2,565,000 | | | 5,130,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ms. Arlin | | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | 15,419 | | | | | | | | | 731,477 |
| | | 5/19/2021 | | | | | | | | | | | | | | | | | | | | | 13,806 | | | | | | | | | 735,860 |
| | | 8/18/2021 | | | | | | | | | | | | | | | | | | | | | 6,729 | | | | | | | | | 391,493 |
| | | | | | 127,662 | | | 638,308 | | | 1,276,616 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mr. Bersani | | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | | | | 12,336 | | | $48.64 | | | 272,009 |
| | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | 6,168 | | | | | | | | | 292,610 |
| | | 3/16/2021 | | | | | | | | | | | | 5,140 | | | 10,280 | | | 15,420 | | | | | | | | | | | | 485,216 |
| | | | | | 235,200 | | | 1,176,000 | | | 2,352,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ms. Rosen | | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | | | | 12,335 | | | $48.64 | | | 271,987 |
| | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | 6,168 | | | | | | | | | 292,610 |
| | | 3/16/2021 | | | | | | | | | | | | 5,140 | | | 10,280 | | | 15,420 | | | | | | | | | | | | 485,216 |
| | | 8/18/2021 | | | | | | | | | | | | | | | | | | | | | 6,729 | | | | | | | | | 391,493 |
| | | | | | 200,100 | | | 1,000,500 | | | 2,001,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ms. Riley | | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | | | | 10,485 | | | $48.64 | | | 231,194 |
| | | 3/16/2021 | | | | | | | | | | | | | | | | | | | | | 5,243 | | | | | | | | | 248,728 |
| | | 3/16/2021 | | | | | | | | | | | | 4,369 | | | 8,738 | | | 13,107 | | | | | | | | | | | | 412,434 |
| | | 8/18/2021 | | | | | | | | | | | | | | | | | | | | | 6,729 | | | | | | | | | 391,493 |
| | | | | | 121,600 | | | 608,000 | | | 1,216,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mr. Burgdoerfer(6) | | | | | | 432,000 | | | 2,160,000 | | | 4,320,000 | | | | | | | | | | | | | | | | | | | | | |
(1)
| Non-Equity Incentive Plan Awards represent the Threshold, Target and Maximum opportunities under the 2015 ICPP for the 2015fiscal year 2021 Spring and Fall seasons. The actual amount earned for fiscal year 2021 under this plan is disclosed in the 20152021 Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column. |
(2)
| Equity Incentive Plan Awards representwere granted pursuant to the Target payment2020 Plan. Grant dates were established on the date the grants were approved by the HCC Committee. Awards granted to Messrs. Meslow and Bersani and Mses. Rosen and Riley vest on the third anniversary of performance-based RSUs for fiscal 2015. No amount is disclosed for Threshold and Maximum sincethe grant date, subject to continued employment through such date, with the number of performance-based RSUs earned does not fluctuateshares to be awarded determined based on performance. Units are earned at target, or not at all. the Company’s achievement of (i) revenue growth during the three year performance period relative to the Performance Peer Group and (ii) cumulative operating income as a percentage of cumulative sales, in each case as set forth under the heading “—Compensation Discussion and Analysis—Compensation for NEOs—Long-Term Equity Compensation.” |
Stock Awards granted on April 2, 2015 are subject to the Company’s achievement of operating income as a percentage of sales ranking in the top one third of the S&P Retailing Index in each of fiscal 2015, 2016, 2017, 2018 and 2019, determined on a cumulative basis. Stock Awards granted to Mr. Wexner on January 27, 2016 are subject to the Company’s achievement of operating income as a percentage of sales ranking in the top one third of the S&P Retailing Index in each of fiscal 2016, 2017, 2018, 2019 and 2020, determined on a cumulative basis. If the performance condition is met, the RSUs will vest 20% on the second and third anniversaries of the grant date and 30% on the fourth and fifth anniversaries of the grant date, subject to continued employment.
(3)
| All Other Stock Awards were granted pursuant to the Company’s amended2020 Plan. Grant dates were established on the date the grants were approved by the HCC Committee. Awards granted on March 16, 2021 vest 50% on the second and restated 2011 Plan50% on the third anniversaries of the grant date, subject to continued employment through each such date. Awards granted on May 19, 2021 and 2015 Plan. August 18, 2021 vest 30% on each of the first and second anniversaries of the grant date, and 40% on the third anniversary of the grant date, subject to continued employment through each such date. |
The Stock Award granted on March 9, 2015 to Mr. McGuigan was made in connection with his election to receive a portion of his cash-based incentive compensation bonus in shares of Common Stock. This award was made based on the Fall 2014 bonus paid on March 9, 2015. This award vests 100% three years from the grant date, dependent on Mr. McGuigan retaining the stock paid in lieu of cash. This program was eliminated in 2015.
In each case, the vesting of these awards is subject to continued employment.
Dividends are not paid or accrued on stock awards or stock units until such shares vest.
(4)
| Option Awardsawards were granted pursuant to the Company’s amended and restated 2011 Plan and 20152020 Plan. Option grant dates were established on the date the grants were approved by the CompensationHCC Committee and the exercise price is the closing price of Common Stock on the grant date (subject to equitable adjustment under the Employee Matters Agreement as described above). Option awards vest 50% on the second and 50% on the third anniversaries of the grant date, subject to continued employment through each such date. |
Option Awards vest 20% on the second and third anniversaries of the grant date and 30% on the fourth and fifth anniversaries of the grant date.
In each case, the vesting of these awards is subject to continued employment.
(5)
| The value of stock and option awards reflects the grant date fair value under ASC Topic 718 Compensation—Stock Compensation for each award. Options are valued using the Black-Scholes option pricing model with the following weighted average assumptions as set forth in the Company’s financial statements filed in the Company’s 2015 Annual Report on Form 10-K:assumptions: dividend yield of 2.7%1.0%, volatility of 26%59%, risk free interest rate of 1.1%0.8% and expected life of 4.54.7 years. RSUs and PSUs are valued based on the fair market value of a share of Common Stock on the date of grant, adjusted for anticipated dividend yields. |
(6)
| In light of his announced retirement in February 2021, Mr. Burgdoerfer did not receive any long-term incentive compensation awards in fiscal year 2021. |
TABLE OF CONTENTS
Outstanding Equity Awards at Fiscal Year-End for
Fiscal 20152021
The following table provides information relating to outstanding equity awards granted to the NEOs as of
the fiscal year
end,ended January
30, 2016. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Restricted Stock Awards | |
Name | | Grant
Date | | | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Grant
Date | | | Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(24) | | | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) | | | Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(26) | |
Leslie H. Wexner | | | 3/31/2006 | | | | 113,998 | | | | 0 | | | | 0 | | | | 17.70 | | | | 3/31/2016 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/30/2007 | | | | 147,163 | | | | 0 | | | | 0 | | | | 18.86 | | | | 3/30/2017 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2008 | | | | 233,214 | | | | 0 | | | | 0 | | | | 12.37 | | | | 3/31/2018 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2009 | | | | 375,334 | | | | 0 | | | | 0 | | | | 6.30 | | | | 3/31/2019 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2010 | | | | 124,575 | | | | 0 | | | | 0 | | | | 18.53 | | | | 3/31/2020 | | | | | | | | | | | | | | | | | | | | | |
| | | 1/27/2011 | | | | 297,896 | | | | 0 | | | | 0 | | | | 24.22 | | | | 1/27/2021 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2011 | | | | 85,264 | | | | 0 | | | | 0 | | | | 27.08 | | | | 3/31/2021 | | | | | | | | | | | | | | | | | | | | | |
| | | 1/26/2012 | | | | 138,031 | | | | 59,158 | (1) | | | 0 | | | | 36.59 | | | | 1/26/2022 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/30/2012 | | | | 21,693 | | | | 32,545 | (2) | | | 0 | | | | 42.57 | | | | 3/30/2022 | | | | | | | | | | | | | | | | | | | | | |
| | | 1/31/2013 | | | | 31,535 | | | | 126,146 | (3) | | | 0 | | | | 46.14 | | | | 1/31/2023 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/29/2013 | | | | 10,760 | | | | 43,046 | (4) | | | 0 | | | | 42.91 | | | | 3/29/2023 | | | | | | | | | | | | | | | | | | | | | |
| | | 1/30/2014 | | | | 24,241 | | | | 96,969 | (5) | | | 0 | | | | 50.60 | | | | 1/30/2024 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2014 | | | | 0 | | | | 41,563 | (6) | | | 0 | | | | 55.55 | | | | 3/31/2024 | | | | | | | | | | | | | | | | | | | | | |
| | | 1/28/2015 | | | | 0 | | | | 121,549 | (7) | | | 0 | | | | 83.10 | | | | 1/28/2025 | | | | | | | | | | | | | | | | | | | | | |
| | | 4/2/2015 | | | | 0 | | | | 25,693 | (8) | | | 0 | | | | 93.41 | | | | 4/2/2025 | | | | | | | | | | | | | | | | | | | | | |
| | | 1/27/2016 | | | | 0 | | | | 127,700 | (9) | | | 0 | | | | 93.97 | | | | 1/27/2026 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1/26/2012 | | | | 0 | | | | 0 | | | | 118,315 | (10) | | | 11,375,987 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 32,545 | (11) | | | 3,129,202 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1/31/2013 | | | | 0 | | | | 0 | | | | 126,146 | (12) | | | 12,128,938 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/29/2013 | | | | 0 | | | | 0 | | | | 43,046 | (13) | | | 4,138,873 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1/30/2014 | | | | 0 | | | | 0 | | | | 121,210 | (14) | | | 11,654,342 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 41,563 | (15) | | | 3,996,282 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1/28/2015 | | | | 0 | | | | 0 | | | | 121,549 | (16) | | | 11,686,936 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 25,693 | (17) | | | 2,470,382 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1/27/2016 | | | | 0 | | | | 0 | | | | 127,700 | (18) | | | 12,278,355 | |
Sharen J. Turney | | | 3/31/2009 | | | | 3 | | | | 0 | | | | 0 | | | | 6.30 | | | | 3/31/2019 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2010 | | | | 5,392 | | | | 0 | | | | 0 | | | | 18.53 | | | | 3/31/2020 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2011 | | | | 7,380 | | | | 37,811 | (19) | | | 0 | | | | 27.08 | | | | 3/31/2021 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/30/2012 | | | | 0 | | | | 51,800 | (2) | | | 0 | | | | 42.57 | | | | 3/30/2022 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/29/2013 | | | | 0 | | | | 70,573 | (4) | | | 0 | | | | 42.91 | | | | 3/29/2023 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2014 | | | | 0 | | | | 68,143 | (6) | | | 0 | | | | 55.55 | | | | 3/31/2024 | | | | | | | | | | | | | | | | | | | | | |
| | | 4/2/2015 | | | | 0 | | | | 42,153 | (8) | | | 0 | | | | 93.41 | | | | 4/2/2025 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2011 | | | | 37,810 | (20) | | | 3,635,432 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 51,802 | (11) | | | 4,980,762 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 253,724 | (11) | | | 24,395,563 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/29/2013 | | | | 0 | | | | 0 | | | | 70,573 | (13) | | | 6,785,594 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 68,143 | (15) | | | 6,551,949 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 42,153 | (17) | | | 4,053,011 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 24,087 | (17) | | | 2,315,965 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Restricted Stock Awards | |
Name | | Grant
Date | | | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Grant
Date | | | Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(24) | | | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) | | | Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(26) | |
Charles C. McGuigan | | | 3/31/2011 | | | | 0 | | | | 22,440 | (19) | | | 0 | | | | 27.08 | | | | 3/31/2021 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/30/2012 | | | | 0 | | | | 20,087 | (2) | | | 0 | | | | 42.57 | | | | 3/30/2022 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/29/2013 | | | | 0 | | | | 27,365 | (4) | | | 0 | | | | 42.91 | | | | 3/29/2023 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2014 | | | | 0 | | | | 26,422 | (6) | | | 0 | | | | 55.55 | | | | 3/31/2024 | | | | | | | | | | | | | | | | | | | | | |
| | | 4/2/2015 | | | | 0 | | | | 20,073 | (8) | | | 0 | | | | 93.41 | | | | 4/2/2025 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2011 | | | | 22,437 | (20) | | | 2,157,318 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 20,086 | (11) | | | 1,931,269 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 46,869 | (11) | | | 4,506,454 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/29/2013 | | | | 0 | | | | 0 | | | | 27,365 | (13) | | | 2,631,145 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/29/2013 | | | | 0 | | | | 0 | | | | 36,486 | (13) | | | 3,508,129 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 8/30/2013 | | | | 609 | (21) | | | 58,555 | | | | 0 | | | | 0 | �� |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/10/2014 | | | | 463 | (22) | | | 44,517 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 26,422 | (15) | | | 2,540,475 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 17,615 | (15) | | | 1,693,682 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 8/29/2014 | | | | 680 | (23) | | | 65,382 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/9/2015 | | | | 1,032 | (24) | | | 99,227 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 20,073 | (17) | | | 1,930,019 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 26,764 | (17) | | | 2,573,359 | |
Nicholas Coe | | | 3/30/2012 | | | | 5,809 | | | | 8,724 | (2) | | | 0 | | | | 42.57 | | | | 3/30/2022 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/29/2013 | | | | 6,466 | | | | 25,868 | (4) | | | 0 | | | | 42.91 | | | | 3/29/2023 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2014 | | | | 0 | | | | 24,977 | (6) | | | 0 | | | | 55.55 | | | | 3/31/2024 | | | | | | | | | | | | | | | | | | | | | |
| | | 4/2/2015 | | | | 0 | | | | 16,058 | (8) | | | 0 | | | | 93.41 | | | | 4/2/2025 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 7/4/2011 | | | | 9,109 | (25) | | | 875,830 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 8,722 | (11) | | | 838,620 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 23,257 | (11) | | | 2,236,161 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/29/2013 | | | | 0 | | | | 0 | | | | 25,869 | (13) | | | 2,487,304 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/29/2013 | | | | 0 | | | | 0 | | | | 86,228 | (13) | | | 8,290,822 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 24,978 | (15) | | | 2,401,635 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 16,652 | (15) | | | 1,601,090 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 16,058 | (17) | | | 1,543,977 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 21,411 | (17) | | | 2,058,668 | |
Stuart B. Burgdoerfer | | | 3/31/2011 | | | | 0 | | | | 12,468 | (19) | | | 0 | | | | 27.08 | | | | 3/31/2021 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/30/2012 | | | | 0 | | | | 16,914 | (2) | | | 0 | | | | 42.57 | | | | 3/30/2022 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/29/2013 | | | | 0 | | | | 23,045 | (4) | | | 0 | | | | 42.91 | | | | 3/29/2023 | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2014 | | | | 0 | | | | 22,250 | (6) | | | 0 | | | | 55.55 | | | | 3/31/2024 | | | | | | | | | | | | | | | | | | | | | |
| | | 4/2/2015 | | | | 0 | | | | 13,694 | (8) | | | 0 | | | | 93.41 | | | | 4/2/2025 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2011 | | | | 12,464 | (20) | | | 1,198,414 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 16,915 | (11) | | | 1,626,377 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/30/2012 | | | | 0 | | | | 0 | | | | 31,011 | (11) | | | 2,981,708 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/29/2013 | | | | 0 | | | | 0 | | | | 23,046 | (13) | | | 2,215,873 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 22,250 | (15) | | | 2,139,338 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3/31/2014 | | | | 0 | | | | 0 | | | | 14,834 | (15) | | | 1,426,289 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 13,694 | (17) | | | 1,316,678 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 4/2/2015 | | | | 0 | | | | 0 | | | | 18,259 | (17) | | | 1,755,603 | |
29, 2022. Pursuant to the terms of the Employee Matters Agreement, each stock option, RSU and PSU held by our associates (including our NEOs) was equitably adjusted upon the occurrence of the Separation. The amounts included in the table below for our NEOs reflect these equitable adjustments.Mr. Meslow | | | 3/29/2013 | | | 8,310 | | | 0 | | | 0 | | | 33.80 | | | 3/29/2023 | | | | | | | | | | | | | | | |
| | | 3/31/2014 | | | 8,820 | | | 0 | | | 0 | | | 43.75 | | | 3/31/2024 | | | 3/31/2017 | | | 13,765(5) | | | 752,257 | | | 0 | | | 0 |
| | | 4/2/2015 | | | 7,133 | | | 0 | | | 0 | | | 73.58 | | | 4/2/2025 | | | 3/28/2019 | | | 75,669(6) | | | 4,135,311 | | | 0 | | | 0 |
| | | 3/31/2016 | | | 10,583 | | | 0 | | | 0 | | | 70.87 | | | 3/31/2026 | | | 2/20/2020 | | | 79,362(7) | | | 4,337,133 | | | 0 | | | 0 |
| | | 3/31/2017 | | | 10,703 | | | 4,589(1) | | | 0 | | | 38.01 | | | 3/31/2027 | | | 5/14/2020 | | | | | | 0 | | | 1,858,650(15) | | | 101,575,223 |
| | | 3/21/2018 | | | 18,910 | | | 0 | | | 0 | | | 31.81 | | | 3/21/2028 | | | 3/16/2021 | | | 43,174(8) | | | 2,359,459 | | | 107,936(16) | | | 5,898,702 |
| | | 3/28/2019 | | | 28,272 | | | 14,136(2) | | | 0 | | | 22.55 | | | 3/28/2029 | | | | | | | | | | | | | | | |
| | | 3/16/2021 | | | 0 | | | 86,348(3) | | | 0 | | | 48.64 | | | 3/16/2031 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ms. Arlin | | | 3/29/2013 | | | 1,625 | | | 0 | | | 0 | | | 33.80 | | | 3/29/2023 | | | 3/31/2017 | | | 8,442(5) | | | 461,355 | | | 0 | | | 0 |
| | | 3/31/2014 | | | 2,855 | | | 0 | | | 0 | | | 43.75 | | | 3/31/2024 | | | 3/28/2019 | | | 33,262(6) | | | 1,817,768 | | | 0 | | | 0 |
| | | 5/7/2014 | | | 570 | | | 0 | | | 0 | | | 41.15 | | | 5/7/2024 | | | 3/16/2021 | | | 15,419(8) | | | 842,648 | | | 0 | | | 0 |
| | | 4/2/2015 | | | 3,057 | | | 0 | | | 0 | | | 73.58 | | | 4/2/2025 | | | 5/19/2021 | | | 13,806(9) | | | 754,498 | | | 0 | | | 0 |
| | | 3/31/2016 | | | 5,292 | | | 0 | | | 0 | | | 70.87 | | | 3/31/2026 | | | 8/18/2021 | | | 6,729(10) | | | 367,740 | | | 0 | | | 0 |
| | | 3/31/2017 | | | 4,834 | | | 2,072(1) | | | | | | 38.01 | | | 3/31/2027 | | | | | | | | | | | | | | | |
| | | 3/21/2018 | | | 13,964 | | | 0 | | | 0 | | | 31.81 | | | 3/21/2028 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mr. Bersani | | | 4/2/2015 | | | 7,133 | | | 0 | | | 0 | | | 73.58 | | | 4/2/2025 | | | 3/31/2017 | | | 13,316(5) | | | 727,719 | | | 0 | | | 0 |
| | | 3/31/2016 | | | 10,583 | | | 0 | | | 0 | | | 70.87 | | | 3/31/2026 | | | 3/21/2018 | | | 9,984(11) | | | 545,626 | | | 0 | | | 0 |
| | | 3/31/2017 | | | 10,359 | | | 4,440(1) | | | 0 | | | 38.01 | | | 3/31/2027 | | | 4/25/2018 | | | 34,256(12) | | | 1,872,090 | | | 0 | | | 0 |
| | | 3/21/2018 | | | 7,262 | | | 10,891(4) | | | 0 | | | 31.81 | | | 3/21/2028 | | | 3/28/2019 | | | 13,010(6) | | | 710,997 | | | 53,219(17) | | | 2,908,418 |
| | | 3/28/2019 | | | 28,383 | | | 14,191(2) | | | 0 | | | 22.55 | | | 3/28/2029 | | | 3/16/2021 | | | 6,168(8) | | | 337,081 | | | 15,420(16) | | | 842,703 |
| | | 3/16/2021 | | | 0 | | | 12,336(3) | | | 0 | | | 48.64 | | | 3/16/2031 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ms. Rosen | | | 3/16/2021 | | | 0 | | | 12,335(3) | | | 0 | | | 48.64 | | | 3/16/2031 | | | 9/28/2020 | | | 33,404(13) | | | 1,825,529 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | 3/16/2021 | | | 6,168(8) | | | 337,081 | | | 15,420(16) | | | 842,703 |
| | | | | | | | | | | | | | | | | | | | | 8/18/2021 | | | 6,729(10) | | | 367,740 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ms. Riley | | | 3/16/2021 | | | 0 | | | 10,485(3) | | | 0 | | | 48.64 | | | 3/16/2031 | | | 12/29/2020 | | | 12,361(14) | | | 675,529 | | | 0 | | | 0 |
| | | | | | | | | | | | | | | | | | | | | 3/16/2021 | | | 5,243(8) | | | 286,530 | | | 13,107(16) | | | 716,298 |
| | | | | | | | | | | | | | | | | | | | | 8/18/2021 | | | 6,729(10) | | | 367,740 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mr. Burgdoerfer(21) | | | 4/2/2015 | | | 17,385 | | | 0 | | | 0 | | | 73.58 | | | 8/20/2022 | | | 3/31/2017 | | | 0 | | | 0 | | | 8,661(18) | | | 473,324 |
| | | 3/31/2016 | | | 10,583 | | | 0 | | | 0 | | | 70.87 | | | 8/20/2022 | | | 3/21/2018 | | | 0 | | | 0 | | | 5,814(19) | | | 317,735 |
| | | | | | | | | | | | | | | | | | | | | 4/25/2018 | | | 0 | | | 0 | | | 13,759(20) | | | 751,929 |
| | | | | | | | | | | | | | | | | | | | | 3/28/2019 | | | 0 | | | 0 | | | 46,566(17) | | | 2,544,832 |
(1)
| Options vest 100%vested on January 26, 2017. March 31, 2022. |
(2)
| Options vested on March 28, 2022. |
(3)
| Options vest 50% on March 30, 201616, 2023 and 50% on March 30, 2017.16, 2024. |
(3) | Options vest 25% on January 31, 2016, 37.5% on January 31, 2017 and 37.5% on January 31, 2018.
|
(4)
| Options vest 25%vested 50% on March 29, 2016, 37.5%21, 2022 and vest 50% on March 29, 2017 and 37.5% on March 29, 2018. 21, 2023. |
(5)
| Options vest 25% on January 30, 2017, 37.5% on January 30, 2018 and 37.5% on January 30, 2019.
|
(6) | Options vest 20%Shares vested 100% on March 31, 2016, 20%2022.
|
TABLE OF CONTENTS
(6)
| Shares vested 100% on March 31, 2017,28, 2022. |
(7)
| Shares vest 100% on February 20, 2023. |
(8)
| Shares vest 50% on March 16, 2023 and 50% on March 16, 2024. |
(9)
| Shares vest 30% on May 19, 2022, 30% on May 19, 2023 and 40% on May 19, 2024. |
(10)
| Shares vest 30% on August 18, 2022, 30% on August 18, 2023 and 40% on August 18, 2024. |
(11)
| Shares vested 45% on March 31, 201821, 2022 and vest 55% on March 21, 2023. |
(12)
| Shares vest 47% on April 25, 2022 and 53% on April 25, 2023. |
(13)
| Shares vest 100% on September 28, 2023. |
(14)
| Shares vest 100% on December 29, 2022. |
(15)
| Subject to achievement of performance conditions assumed at maximum payout, shares vest 40% on May 14, 2023, 30% on May 14, 2024 and 30% on March 31, 2019.May 14, 2025. |
(7)(16)
| OptionsSubject to achievement of performance conditions assumed at maximum payout, 100% of these shares vest 20% on January 28, 2017, 20% on January 28, 2018, 30% on January 28, 2019 and 30% on January 28, 2020.
March 16, 2024. |
(8)(17)
| Options vest 20% on April 2, 2017, 20% on April 2, 2018, 30% on April 2, 2019 and 30% on April 2, 2020.
|
(9) | Options vest 20% on January 27, 2018, 20% on January 27, 2019, 30% on January 27, 2020 and 30% on January 27, 2021.
|
(10) | 50%Subject to achievement of performance conditions assumed at maximum payout, shares vested on January 26, 2016, subjectMarch 28, 2022.
|
(18)
| Subject to achievement of a performance condition. Remainingcondition, shares vestvested on January 26, 2017, also subjectMarch 31, 2022. |
(19)
| Subject to achievement of a performance condition.condition, shares vested on March 21, 2022. |
(11)(20)
| Subject to achievement of a performance condition, shares vest 50% on March 30, 2016 and 50% on March 30, 2017. |
(12) | Subject to achievement of a performance condition, shares vest 25% on January 31, 2016, 37.5% on January 31, 2017 and 37.5% on January 31, 2018.
|
(13) | Subject to achievement of a performance condition, shares vest 25% on March 29, 2016, 37.5% on March 29, 2017 and 37.5% on March 29, 2018.
|
(14) | 20% vested on January 30, 2016, subject to achievement of a performance condition. Remaining shares vest 20% on January 30, 2017, 30% on January 30, 2018 and 30% on January 30, 2019, also subject to achievement of a performance condition.
|
(15) | Subject to achievement of a performance condition, shares vest 20% on March 31, 2016, 20% on March 31, 2017, 30% on March 31, 2018 and 30% on March 31, 2019.
|
(16) | Subject to achievement of a performance condition, shares vest 20% on January 28, 2017, 20% on January 28, 2018, 30% on January 28, 2019 and 30% on January 28, 2020.
|
(17) | Subject to achievement of a performance condition, shares vest 20% on April 2, 2017, 20% on April 2, 2018, 30% on April 2, 2019 and 30% on April 2, 2020.
25, 2022. |
(18) | Subject to achievement of a performance condition, shares vest 20% on January 27, 2018, 20% on January 27, 2019, 30% on January 27, 2020 and 30% on January 27, 2021.
|
(19) | Options vest 100% on March 31, 2016.
|
(20) | Shares vest 100% on March 31, 2016.
|
(21)
| Shares vest 100% on August 30, 2016.
|
(22) | Shares vest 100% on March 10, 2017.
|
(23) | Shares vest 100% on August 29, 2017.
|
(24) | Shares vest 100% on March 9, 2018.
|
(25) | Shares vest 100% on July 4, 2016.
|
(26) | Market valueOutstanding stock awards held by Mr. Burgdoerfer at the time of his retirement were treated in accordance with the existing terms of the 2015 Plan and the 2020 Plan and the applicable award agreements thereunder, as follows: (i) stock options that were vested at the time of his retirement will remain exercisable for one year following his retirement date and unvested stock options were forfeited; (ii) unvested RSUs were forfeited; and (iii) unvested PSUs were pro-rated based on the $96.15 fair market valuenumber of a share of Common Stock onmonths from the last trading daygrant date to Mr. Burgdoerfer’s retirement date, subject to actual performance achievement at the end of the fiscal year (January 29, 2016).
performance period. |
TABLE OF CONTENTS
Option Exercises and Stock Vested Information for Fiscal
2015Year 2021
The following table provides information relating to
Option Awardsoption awards exercised and RSU
Awardsand PSUs awards vested during
the fiscal year
ended January 30, 2016. | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Restricted Stock Awards | |
Name | | Number of
Shares
Acquired on
Exercise (#) | | | Value
Realized on
Exercise ($)(1) | | | Number of
Shares
Acquired on
Vesting (#) | | | Value
Realized on
Vesting ($)(2) | |
Leslie H. Wexner | | | 0 | | | $ | 0 | | | | 181,946 | | | $ | 16,609,564 | |
Sharen J. Turney | | | 107,801 | | | | 6,507,999 | | | | 433,657 | | | | 40,221,597 | |
Charles C. McGuigan | | | 35,967 | | | | 2,189,285 | | | | 62,118 | | | | 5,640,529 | |
Nicholas Coe | | | 0 | | | | 0 | | | | 47,791 | | | | 4,217,749 | |
Stuart B. Burgdoerfer | | | 37,801 | | | | 2,023,187 | | | | 34,199 | | | | 3,103,125 | |
Mr. Meslow | | | 0 | | | 0 | | | 53,082 | | | 3,238,394 |
Ms. Arlin | | | 3,000 | | | 91,980 | | | 21,081 | | | 1,285,236 |
Mr. Bersani | | | 32,177 | | | 612,136 | | | 37,517 | | | 2,456,863 |
Ms. Rosen | | | 0 | | | 0 | | | 0 | | | 0 |
Ms. Riley | | | 0 | | | 0 | | | 12,362 | | | 859,159 |
Mr. Burgdoerfer | | | 129,751 | | | 2,995,881 | | | 41,894 | | | 2,850,475 |
(1)
| Option Award Value Realized is calculated based on the difference between (a) the sale price and the option exercise price for shares that were sold upon exercise and (b) the closing price on the day prior to the date of exercise and the option exercise price for shares that were held upon exercise. price. |
(2)
| Restricted Stock Award Value Realized is calculated based on the closing stock price on the date the RSUs or PSUs vested.
|
TABLE OF CONTENTS
Retirement and Other Post-Employment Benefits
Non-qualified Deferred Compensation for Fiscal
2015Year 2021(1) | | | | | | | | | | | | | | | | | | | | |
Name | | Executive
Contributions
in Last Fiscal
Year ($)(2) | | | Registrant
Contributions
in Last Fiscal
Year ($)(3) | | | Aggregate
Earnings in
Last Fiscal
Year ($)(4) | | | Aggregate
Withdrawals/
Distributions
($)(5) | | | Aggregate
Balance at
Last Fiscal
Year End
($)(6) | |
Leslie H. Wexner | | $ | 257,846 | | | $ | 914,015 | | | $ | 1,364,202 | | | $ | 0 | | | $ | 26,707,109 | |
Sharen J. Turney | | | 474,607 | | | | 618,822 | | | | 1,162,088 | | | | 0 | | | | 24,629,989 | |
Charles C. McGuigan | | | 106,120 | | | | 360,556 | | | | 216,640 | | | | 0 | | | | 4,354,411 | |
Nicholas Coe | | | 109,794 | | | | 323,614 | | | | 52,340 | | | | 0 | | | | 1,181,160 | |
Stuart B. Burgdoerfer | | | 77,195 | | | | 273,191 | | | | 135,041 | | | | 0 | | | | 2,731,212 | |
Mr. Meslow | | | 0 | | | 124,607 | | | 134,512 | | | 7,998,943 | | | 0 |
Ms. Arlin | | | 0 | | | 26,522 | | | 40,704 | | | 4,926,508 | | | 0 |
Mr. Bersani | | | 0 | | | 50,643 | | | 180,054 | | | 11,210,207 | | | 0 |
Ms. Rosen | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 |
Ms. Riley | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 |
Mr. Burgdoerfer | | | 0 | | | 63,889 | | | 91,386 | | | 5,426,804 | | | 0 |
(1)
| Amounts disclosed includeOn June 27, 2020 (the “Termination Date”), the HCC Committee authorized the termination of the Company’s non-qualified cash deferrals, Company matching contributions,supplemental retirement creditsplan (the “SRP”) and earningscertain other deferred compensation arrangements. In accordance with applicable rules under the Company’s Supplemental Retirement Plan (a non-qualified defined contribution plan) and stock deferrals and related reinvested dividend earnings underCode, balances were distributed approximately one year following the Company’s amended and restated 1993 Stock Option and Performance Incentive Plan (the “1993 Plan”), 2011 Plan and 2015 Plan. Executive Contributions and related matching Registrant Contributions represent 2015 calendar year deferrals and matches on incentive compensation payments earned based on performance for the Fall 2014 season, which was paid in March 2015, and for the Spring 2015 season, which was paid in August 2015.
Termination Date. |
(2)
| All of the contributions are reported in the 2015 Summary Compensation Table under the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns.
|
(3) | Reflects the Company’s 200% match of associate contributions of up to 3% of base salary and bonus above the IRS qualified plan maximum compensation limit and the Company’spro-rata retirement contribution in March 2021 of 6% for less than five years of service or 8% for five or more years of service of compensation above the IRS qualified plan maximum compensation limit. Associates become fully vested in these contributions after six years of service.limit on eligible compensation prior to the Termination Date. These contributions are also included under the “All Other Compensation” column of the 20152021 Summary Compensation Table. |
(4)(3)
| Non-qualified deferred cash compensation balances earn a fixed rate of interest determined prior to the beginning of each year. The portion of the earnings on deferred cash compensation that exceeds 120% of the applicable federal long term rate in the amount of $498,794, $305,512, $79,210, $19,137 and $49,375 for Mr. Wexner, Ms. Turney and Messrs. McGuigan, Coe and Burgdoerfer, respectively, is disclosed in the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the 2015 Summary Compensation Table. |
Amount includes
The portion of the earnings on deferred cash compensation that exceeds 120% of the applicable federal long-term rate in the amount of $80,547, $20,777, $107,035 and $54,723 for Mr. Meslow, Ms. Arlin, Mr. Bersani, Mr. Burgdoerfer, respectively, is disclosed in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column of the 2021 Summary Compensation Table.
Amounts include dividends earned on deferred stock and RSU balances in the amount of
$326,511$6,007 for Ms.
Turney.Arlin and $1,305 for Mr. Bersani. Dividends
arewere reinvested into additional stock units based on the closing market price of Common Stock on the dividend payment
date.date prior to the Termination Date. (5)(4)
| Participants may elect to receive the funds in a lump sum or in up to ten annual installments following termination of employment, but generally may not make withdrawals during their employment. Deferrals under the Supplemental Retirement Plan, the 1993 Plan, the 2011 Plan and the 2015 Plan are unfunded.
|
(6) | Balance distributed includes the value of deferred stock and RSUs at calendar year-end inunits on the amountdistribution date with a value of $8,097,122$2,865,250 for Ms. Turney.Arlin and $622,668 for Mr. Bersani. Value is calculated based on a stock price of $96.15$71.38 per share of Common Stock on January 29, 2016. July 8, 2021. |
Estimated Post-Employment Payments and Benefits
We have entered into certain agreements with our
current NEOs that will require us to provide compensation in the event of
a terminationcertain terminations of employment, including a termination following a change in control of our Company.
Mr. Wexner is not covered by such an agreement but is entitled to certain termination compensation under theterms of our benefit and stock plans. In connection with her resignation, Ms. Turney will be entitled to severance payments and benefits under the terms of her employment agreement.
The following tables set forth the expected benefits to be received by each of the otherour current NEOs in the event of his termination resulting from various scenarios, assuming a termination date of January 30, 201629, 2022 and a stock price of $96.15,$54.65, the closing price of our Common Stock on January 29, 2016.28, 2022 (the last trading day during fiscal year 2021). Each scenario relates to the single termination event described and amounts are not cumulative in situations where multiple scenarios may apply.
TABLE OF CONTENTS
Assumptions and explanations of the numbers set forth in the tables below are set forth in additional text following the tables.(1) In addition, and as previously disclosed in the Estimated Post-Employment Payments and Benefits table included in our 2021 annual proxy statement, as a result of an inadvertent administrative error, we reported the estimated value of the pro rata vesting of Mr. Burgdoerfer’s then-outstanding and unvested restricted stock units and performance stock units in connection with an assumed retirement date of January 30, 2021 as $306,352. However, assuming Mr. Burgdoerfer had retired as of January 30, 2021, the estimated value of the pro rata vesting of such then-outstanding awards would have been $2,922,770 (based on the pre-Separation L Brands, Inc. stock price of $40.76 as of January 29, 2021).
Mr. Meslow
Base Salary(1) | | | $1,350,000 | | | $2,700,000 | | | $2,700,000 | | | $0 | | | $0 | | | $0 |
Bonus(2) | | | 0 | | | 2,565,000 | | | 9,114,636 | | | 0 | | | 0 | | | 0 |
Cash Retention(3) | | | 0 | | | 0 | | | 1,990,431 | | | 0 | | | 0 | | | 0 |
Gain of Accelerated Stock Options(4) | | | 0 | | | 0 | | | 1,049,082 | | | 1,049,082 | | | 1,049,082 | | | 0 |
Value of Pro-Rated or Accelerated RSUs/PSUs(4) | | | 0 | | | 31,623,441 | | | 83,233,426 | | | 83,233,426 | | | 83,233,426 | | | 0 |
Total Benefits and Perquisites(5) | | | 38,610 | | | 48,655 | | | 48,655 | | | 2,018,520 | | | 586,043 | | | 0 |
Total | | | $1,388,610 | | | $36,937,096 | | | $98,136,230 | | | $86,301,028 | | | $84,868,551 | | | $0 |
Ms. Arlin
Base Salary(1) | | | $0 | | | $1,500,000 | | | $1,500,000 | | | $0 | | | $0 | | | $0 |
Bonus(2) | | | 0 | | | 675,000 | | | 1,850,079 | | | 0 | | | 0 | | | 0 |
Cash Retention | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 |
Gain of Accelerated Stock Options(4) | | | 0 | | | 0 | | | 34,475 | | | 34,475 | | | 34,475 | | | 0 |
Value of Pro-Rated or Accelerated RSUs/PSUs(4) | | | 0 | | | 2,554,068 | | | 4,244,010 | | | 4,244,010 | | | 4,244,010 | | | 0 |
Total Benefits and Perquisites(5) | | | 18,520 | | | 59,478 | | | 59,478 | | | 1,518,520 | | | 436,140 | | | 0 |
Total | | | $18,520 | | | $4,788,546 | | | $7,688,042 | | | $5,797,005 | | | $4,714,625 | | | $0 |
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Leslie H. Wexner
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Involuntary w/out Cause or
Voluntary w/Good Reason | | | Involuntary
w/out Cause
following
Change in
Control
($) | | | Death
($) | | | Disability
($) | | | Voluntary
Resignation/
Retirement
($) | |
| | | w/out
Release
($) | | | & Signed
Release
($) | | | | | |
Base Salary | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Bonus(2) | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Gain of Accelerated Stock Options(3) | | | 0 | | | | 0 | | | | 21,907,813 | | | | 21,907,813 | | | | 21,907,813 | | | | 0 | |
Value of Pro-rated or Accelerated RSUs(3) | | | 0 | | | | 25,973,673 | | | | 72,859,297 | | | | 72,859,297 | | | | 72,859,297 | | | | 25,973,673 | |
Benefits and Perquisites(4) | | | 355,370 | | | | 355,370 | | | | 355,370 | | | | 2,355,370 | | | | 1,080,370 | | | | 355,370 | |
Tax Gross-Up | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 355,370 | | | $ | 26,329,043 | | | $ | 95,122,480 | | | $ | 97,122,480 | | | $ | 95,847,480 | | | $ | 26,329,043 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Sharen J. Turney
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Involuntary w/out Cause or
Voluntary w/Good Reason | | | Involuntary
w/out Cause
following
Change in
Control
($) | | | Death
($) | | | Disability
($) | | | Voluntary
Resignation/
Retirement
($) | |
| |
| w/out
Release
($) |
| |
| & Signed
Release
($) |
| | | | |
Base Salary | | $ | 1,500,000 | | | $ | 3,000,000 | | | $ | 3,000,000 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Bonus(2) | | | 0 | | | | 3,000,000 | | | | 9,351,638 | | | | 0 | | | | 0 | | | | 0 | |
Gain of Accelerated Stock Options(3) | | | 0 | | | | 0 | | | | 12,026,986 | | | | 12,026,986 | | | | 12,026,986 | | | | 0 | |
Value of Pro-rated or Accelerated RSUs(3) | | | 0 | | | | 27,340,541 | | | | 52,718,276 | | | | 52,718,276 | | | | 52,718,276 | | | | 27,340,541 | |
Benefits and Perquisites(4) | | | 295,427 | | | | 302,218 | | | | 302,218 | | | | 5,274,760 | | | | 1,785,242 | | | | 281,846 | |
Tax Gross-Up | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,795,427 | | | $ | 33,642,759 | | | $ | 77,399,118 | | | $ | 70,020,022 | | | $ | 66,530,504 | | | $ | 27,622,387 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Charles C. McGuigan
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Involuntary w/out Cause or
Voluntary w/Good Reason | | | Involuntary
w/out Cause
following
Change in
Control
($) | | | Death
($) | | | Disability
($) | | | Voluntary
Resignation/
Retirement
($) | |
| | | w/out
Release
($) | | | & Signed
Release
($) | | | | | |
Base Salary | | $ | 1,250,000 | | | $ | 2,500,000 | | | $ | 2,500,000 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Bonus(2) | | | 0 | | | | 1,875,000 | | | | 5,134,119 | | | | 0 | | | | 0 | | | | 0 | |
Gain of Accelerated Stock Options(3) | | | 0 | | | | 0 | | | | 5,211,063 | | | | 5,211,063 | | | | 5,211,063 | | | | 0 | |
Value of Pro-rated or Accelerated RSUs(3) | | | 0 | | | | 10,836,393 | | | | 23,739,531 | | | | 23,739,531 | | | | 23,739,531 | | | | 10,836,393 | |
Benefits and Perquisites(4) | | | 162,930 | | | | 168,150 | | | | 168,150 | | | | 3,402,492 | | | | 782,602 | | | | 152,492 | |
Tax Gross-Up | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,412,930 | | | $ | 15,379,543 | | | $ | 36,752,863 | | | $ | 32,353,086 | | | $ | 29,733,196 | | | $ | 10,988,885 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Nicholas Coe
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Involuntary w/out Cause or
Voluntary w/Good Reason | | | Involuntary
w/out Cause
following
Change in
Control
($) | | | Death
($) | | | Disability
($) | | | Voluntary
Resignation/
Retirement
($)(5) | |
| | | w/out
Release
($) | | | & Signed
Release
($) | | | | | |
Base Salary | | $ | 1,000,000 | | | $ | 2,000,000 | | | $ | 2,000,000 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Bonus(2) | | | 0 | | | | 1,600,000 | | | | 5,573,735 | | | | 0 | | | | 0 | | | | 0 | |
Gain of Accelerated Stock Options(3) | | | 0 | | | | 0 | | | | 2,902,821 | | | | 2,902,821 | | | | 2,902,821 | | | | 0 | |
Value of Pro-rated or Accelerated RSUs(3) | | | 0 | | | | 9,344,434 | | | | 22,334,107 | | | | 22,334,107 | | | | 22,334,107 | | | | 0 | |
Benefits and Perquisites(4) | | | 169,144 | | | | 174,364 | | | | 174,364 | | | | 2,341,116 | | | | 908,726 | | | | 0 | |
Tax Gross-Up | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,169,144 | | | $ | 13,118,798 | | | $ | 32,985,027 | | | $ | 27,578,044 | | | $ | 26,145,654 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Stuart B. Burgdoerfer
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Involuntary w/out Cause or
Voluntary w/Good Reason | | | Involuntary
w/out Cause
following
Change in
Control
($) | | | Death
($) | | | Disability
($) | | | Voluntary
Resignation/
Retirement
($)(5) | |
| | | w/out
Release
($) | | | & Signed
Release
($) | | | | | |
Base Salary | | $ | 852,800 | | | $ | 1,705,600 | | | $ | 1,705,600 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Bonus(2) | | | 0 | | | | 1,279,200 | | | | 3,795,750 | | | | 0 | | | | 0 | | | | 0 | |
Gain of Accelerated Stock Options(3) | | | 0 | | | | 0 | | | | 3,935,376 | | | | 3,935,376 | | | | 3,935,376 | | | | 0 | |
Value of Pro-rated or Accelerated RSUs(3) | | | 0 | | | | 6,539,546 | | | | 14,660,279 | | | | 14,660,279 | | | | 14,660,279 | | | | 0 | |
Benefits and Perquisites(4) | | | 115,928 | | | | 122,626 | | | | 122,626 | | | | 1,808,130 | | | | 544,080 | | | | 0 | |
Tax Gross-Up | | | N/A | �� | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 968,728 | | | $ | 9,646,972 | | | $ | 24,219,631 | | | $ | 20,403,785 | | | $ | 19,139,735 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Mr. Bersani
Base Salary(1) | | | $0 | | | $1,680,000 | | | $1,680,000 | | | $0 | | | $0 | | | $0 |
Bonus(2) | | | 0 | | | 1,176,000 | | | 3,715,443 | | | 0 | | | 0 | | | 0 |
Cash Retention | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 |
Gain of Accelerated Stock Options(4) | | | 0 | | | 0 | | | 852,277 | | | 852,277 | | | 852,277 | | | 0 |
Value of Pro-Rated or Accelerated RSUs/PSUs(4) | | | 0 | | | 4,693,943 | | | 6,694,242 | | | 6,694,242 | | | 6,694,242 | | | 1,987,293 |
Total Benefits and Perquisites(5) | | | 18,520 | | | 41,157 | | | 41,157 | | | 2,018,520 | | | 457,293 | | | 18,520 |
Total | | | $18,520 | | | $7,591,100 | | | $12,983,119 | | | $9,565,039 | | | $8,003,812 | | | $2,005,813 |
Ms. Rosen
Base Salary(1) | | | $0 | | | $1,740,000 | | | $1,740,000 | | | $0 | | | $0 | | | $0 |
Bonus(2) | | | 0 | | | 1,000,500 | | | 2,609,733 | | | 0 | | | 0 | | | 0 |
Cash Retention | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 |
Gain of Accelerated Stock Options(4) | | | 0 | | | 0 | | | 74,132 | | | 74,132 | | | 74,132 | | | 0 |
Value of Pro-Rated or Accelerated RSUs/PSUs(4) | | | 0 | | | 1,112,128 | | | 3,092,152 | | | 3,092,152 | | | 3,092,152 | | | 0 |
Total Benefits and Perquisites(5) | | | 13,890 | | | 43,698 | | | 43,698 | | | 1,753,890 | | | 461,358 | | | 0 |
Total | | | $13,890 | | | $3,896,326 | | | $7,559,715 | | | $4,920,174 | | | $3,627,642 | | | $0 |
Ms. Riley
Base Salary(1) | | | $0 | | | $1,520,000 | | | $1,520,000 | | | $0 | | | $0 | | | $0 |
Bonus(2) | | | 0 | | | 608,000 | | | 1,816,346 | | | 0 | | | 0 | | | 0 |
Cash Retention | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 |
Gain of Accelerated Stock Options(4) | | | 0 | | | 0 | | | 63,014 | | | 63,014 | | | 63,014 | | | 0 |
Value of Pro-Rated or Accelerated RSUs/PSUs(4) | | | 0 | | | 319,593 | | | 1,807,330 | | | 1,807,330 | | | 1,807,330 | | | 0 |
Total Benefits and Perquisites(5) | | | 13,890 | | | 53,264 | | | 53,264 | | | 1,533,890 | | | 433,812 | | | 0 |
Total | | | $13,890 | | | $2,500,857 | | | $5,259,954 | | | $3,404,234 | | | $2,304,156 | | | $0 |
(1)
| AssumesIn the event of a termination date of January 30, 2016.
the NEO’s employment by the Company other than for “Cause” or, in the case of Mr. Meslow and Mses. Arlin, Rosen and Riley, by the NEO for “Good Reason”, other than during the 24-month period following a “Change in Control”, the NEO |
TABLE OF CONTENTS
will receive continued payment of base salary for 24 months following the termination date in accordance with the Company’s normal payroll practices. If such termination occurs within the 24-month period following a Change in Control, the NEO will receive a lump sum payment equal to 2x his or her annual base salary. The foregoing payments are subject to such NEO’s execution and non-revocation of a release of claims. If such release of claims is not provided by Mr. Meslow, then these payments for Mr. Meslow will be 12 months or 1x annual base salary, as applicable.
(2)
| Bonus amounts assumed at target. Under “Involuntary w/out CauseIn the event of a termination of the NEO’s employment by the Company other than for “Cause” or, Voluntary w/Goodin the case of Mr. Meslow and Mses. Arlin, Rosen and Riley, by the NEO for “Good Reason” termination scenarios, actual, other than during the 24-month period following a “Change in Control”, the NEO will receive bonus payments would be equal tobased on the bonus paymentamounts the NEO would have received if he or sheunder the 2015 ICPP had the NEO remained employed withby the Company for a one-year period of one year afterfollowing the NEO’s termination date of January 30, 2016. Under an “Involuntary w/out Causedate. If such termination occurs within the 24-month period following a Change in Control” termination scenario, bonus payments for Ms. Turney and Messrs. McGuigan, Coe and BurgdoerferControl, the NEO will bereceive a lump sum amount equal to the sum of the last four seasonal bonus payments received.
received under the 2015 ICPP, plus a pro rata amount for the season in which the termination occurs (based on an average of the prior four payments received). For purposes of these tables, bonus amounts are assumed at target levels. |
(3)
| Reflects a pro-rated portion of the third installment of Mr. Meslow’s cash retention award, based on the period May 14, 2020 to January 29, 2022. |
(4)
| Reflects the value of the “double-trigger” acceleration of unvested stock options, RSUs and stock options that, subjectPSUs in the event of a termination of the NEO’s employment by the Company without Cause or by the NEO for Good Reason within 24 months following a Change in Control, or due to achievement of pre-established performance conditions, would become vested based on the $96.15 fair market value ofNEO’s death or Disability, assuming a price per share of Common Stock onof $54.65. In the last trading dayevent of a termination of the fiscal year (January 29, 2016).NEO’s employment by the Company without Cause or, in the case of Mr. Meslow and Mses. Arlin, Rosen and Riley, by the NEO for Good Reason absent a Change in Control, unvested stock options, RSUs and PSUs will accelerate on a pro-rated basis. For purposes of these tables, PSUs are assumed achieved at target levels. |
(4)(5)
| EstimatesReflects estimates for benefits and perquisites includepayable to the NEOs upon a termination of employment, which includes the pro rata value of retirement plan contributions on earnings accrued up to the termination date and the continuation of medical, dental and other insurance benefits.benefits for a period of up to 18 months (in the case of Messrs. Meslow and Bersani and Ms. Rosen) and up to 24 months (in the case of Mses. Arlin and Riley), both absent and following a Change in Control. Under the “Death” and “Disability” scenarios, includes proceeds from life and disability insurance policies and the value of unvested retirement plan balances that would become vested.
|
(5)(6)
| Messrs. CoeGenerally, in the event of an NEO’s death, subject to the achievement of any underlying performance conditions, any time-vesting conditions are deemed satisfied. RSUs and Burgdoerfer havePSUs awarded to our other NEOs continue to be subject to continued vesting based on performance (except for RSUs granted to Mr. Bersani in March and April of 2018, which are not met the age and/or service requirementsubject to qualify for pro rata RSU vesting and retirement plan contributions under the retirement provisions of the 2011 Plan, the 2015 Plan and the qualified and non-qualified retirement plans.
performance conditions). |
Assumptions and Explanations of Numbers in Tables
The
CompensationHCC Committee retains discretion to provide, and in the past has provided, additional benefits to NEOs upon termination or resignation if it determines the circumstances so warrant.
The tables do not include the payment of the aggregate balance of the NEO’s non-qualified deferred compensation that is disclosed in the Non-qualified Deferred Compensation for Fiscal 2015 table above.
Confidentiality, Non-Competition and Non-Solicitation Agreements
As a condition to each NEO’s entitlement to receive certain severance payments and equity vesting acceleration upon certain termination scenarios, the NEO is required to execute a release of claims against us and shall be bound by the terms of certain restrictive covenants, including non-competition and non-solicitation agreements which prohibit the NEO from soliciting or diverting any current or potential employee, customer, or supplier or competing with any of our businesses in which he or she has been employed for a period of one year from the date of termination.
Termination Provisions—Definitions of Cause and Good Reason
The
employment agreements for
allour NEOs
other than Mr. Wexner, who does not have an employment agreement, contain customary definitions of cause and good reason. “Cause” generally means that
the NEO (1)
for Mr. Meslow, he willfully failed to perform
his duties with the Company, or for our other NEOs, he or she was grossly negligent in the performance of his or her duties with the Company
(other(in each case, other than a failure resulting from
the NEO’shis or her incapacity due to physical or mental illness); (2)
the NEO has
pleadpled “guilty” or “no contest” to or has been convicted of an act which is defined as a felony under federal or state law; or (3)
the NEO engaged in
willful misconduct in bad faith
(or, in Mr. Meslow’s case “willful misconduct”) which could reasonably be expected to materially harm the Company’s business or its reputation.
“Good
In addition, Mr. Meslow and Mses. Arlin, Riley and Rosen have the right to resign for “Good Reason” in case of certain events. “Good Reason” generally means (1) for Mr. Meslow, the failure to continue byas Chief Executive Officer of the NEOCompany (or, in the event of a change in control, the resulting ultimate parent company) and, for Mses. Arlin, Riley and Rosen, her failure to continue in a capacity originally contemplated in the NEO’s employment agreement; (2) for Mses. Arlin, Riley and Rosen, the assignment to the NEO of any duties materially inconsistent with the NEO’sher position, duties, authority, responsibilities or reporting requirements, as set out in hisand also, for Mr. Meslow, the assignment to another person of duties that would typically be performed by the Chief Executive Officer; (3) for Mr. Meslow, a material reduction of or her employment agreement; (3) a reduction in or a material delay in payment of the NEO’shis total cash compensation and benefits from those required to be provided;provided, or a breach by the Company of his employment agreement or any RSU award agreement or other equity
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agreement; (4) the requirement that,
the NEOfor Mr. Meslow, he be based outside of the United States
other(other than for travel that is reasonably required to carry out
his duties), or for Mses. Arlin, Riley and Rosen, her mandatory relocation from the
NEO’s duties;Columbus, Ohio area; or (5) the failure by the Company to obtain the assumption in writing of its obligation to perform the
employment agreement by a successor.
Payments Upon a Termination in Connection with a Change in Control
A
Change“Change in
ControlControl” of the Company will
generally be deemed to have occurred upon the first
to occur of any of the following
events:events to occur:(a)
| a) | any person, together with all affiliates, becomes a beneficial owner of securities representing 33% or more of the combined voting power of the voting stock then outstanding; |
(b)
| b) | during any period of 24 consecutive months, individuals who at the beginning of such period constitute the Board (and any new director, whose election by the Board or nomination for election by the stockholders of the Company was approved by a vote of at least two-thirds of the directors then in office who either were directors at the beginning of the period or whose election or nomination for election was so approved) cease for any reason to constitute a majority of directors then constituting the Board; |
(c)
| c) | a reorganization, merger or consolidation of the Company is consummated, unless more than 50% of the outstanding shares of Common Stock resulting from such reorganization, merger or consolidation are beneficially owned by individuals and entities who beneficially owned Common Stockthe voting stock outstanding just prior to such reorganization, merger or consolidation; or |
(d)
| d) | the consummation of a complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company. |
Participants in the 2015 Plan and the 2020 Plan receive accelerated vesting of equity awards upon a Change in Control in the event of the participant’s termination of employment (other than for Cause) within 24 months of the Change in Control (“double trigger” vesting).
In the event of a termination following a Change in Control, none of our NEOs
isare entitled to reimbursement or gross-up for any excise taxes that may be imposed under Section 280G of the Code.
Fiscal
2015Year 2021 Director Compensation
The following table sets forth compensation earned by the individuals who served as directors of the Company during fiscal
2015(1)year 2021(1).
| | | | | | | | | | | | |
Name | | Fees Earned or
Paid in Cash
($)(2) | | | Stock
Awards
($)(3) | | | Total ($) | |
E. Gordon Gee | | $ | 121,900 | | | $ | 121,900 | | | $ | 243,800 | |
Dennis S. Hersch | | | 121,900 | | | | 121,900 | | | | 243,800 | |
Donna A. James | | | 164,400 | | | | 144,412 | | | | 308,812 | |
David T. Kollat | | | 171,900 | | | | 156,929 | | | | 328,829 | |
William R. Loomis, Jr. | | | 121,900 | | | | 121,900 | | | | 243,800 | |
Jeffrey H. Miro | | | 134,400 | | | | 134,417 | | | | 268,817 | |
Michael G. Morris | | | 124,400 | | | | 124,422 | | | | 248,822 | |
Stephen Steinour | | | 111,900 | | | | 111,905 | | | | 223,805 | |
Allan R. Tessler | | | 194,400 | | | | 169,446 | | | | 363,846 | |
Abigail S. Wexner | | | 141,900 | | | | 131,988 | | | | 273,888 | |
Raymond Zimmerman | | | 134,400 | | | | 134,417 | | | | 268,817 | |
Patricia S. Bellinger | | | 146,900 | | | 134,405 | | | 281,305 |
Francis A. Hondal(6) | | | 110,874 | | | 131,971 | | | 242,845 |
Donna A. James(5) | | | 67,200 | | | 134,405 | | | 201,605 |
Danielle M. Lee(6) | | | 109,624 | | | 131,971 | | | 241,595 |
Michael G. Morris | | | 161,900 | | | 146,953 | | | 308,853 |
Sarah E. Nash | | | 350,000 | | | 350,048 | | | 700,048 |
Robert H. Schottenstein | | | 134,400 | | | 134,405 | | | 268,805 |
Anne Sheehan(5) | | | 73,450 | | | 146,953 | | | 220,403 |
Stephen D. Steinour | | | 154,400 | | | 134,405 | | | 288,805 |
J.K. Symancyk(6) | | | 89,641 | | | 111,961 | | | 201,602 |
Abigail S. Wexner(4) | | | 33,816 | | | 0 | | | 33,816 |
Leslie H. Wexner(4) | | | 33,816 | | | 0 | | | 33,816 |
(1)
| Directors who are also associatesMr. Meslow did not receive no additional compensation for theirhis service as directors.a member of the Board. Our current Board’s compensation plan does not provide for stock option awards, non-equity incentive plan compensation, pension or non-qualified deferred compensation. At the end of four years of membership on the Board, each member must maintain ownership of Common Stock equal to the amount of Common Stock received as director compensation over the four-year period.
|
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(2)
| Directors receive(other than Ms. Nash) received an annual cash retainer of $111,900; directors receivereceived an additional annual cash retainer of $12,500 for membership on the Audit and CompensationHCC Committees and Special Committee on Stockholder Litigation and $10,000 for all other committee memberships; the Audit Committee Chair receivesand Special Committee on Stockholder Litigation Chairs received an additional $20,000; the CompensationHCC Committee Chair and the Nominating & Governance Committee Chair each receivesreceived an additional $15,000; and other committee chairs receiveChairs received an additional $10,000; and the lead independent director receivesBoard Chair received an additionalannual cash retainer of $15,000. $350,000. |
(3)
| Directors receive(other than Ms. Nash) received an annual stock retainer worthof $111,900; directors receivereceived an additional annual stock grant worthof $12,500 for membership on the Audit and CompensationHCC Committees and worthof $10,000 for other committee memberships; and the lead independent director receivesBoard Chair received an additionalannual stock retainer of $15,000.$350,000. Stock retainers were granted under the 2011 Plan.2020 Plan and were fully vested on the grant date. The number of shares issued iswas calculated based on the fair market value of Common Stock on the date the shares were issued. The value of stock awards reflects the aggregate grant date fair value, excluding estimated forfeitures, computed in accordance with ASC Topic 718 Compensation—Stock Compensation, for each award. See Note 1819 to the Company’s financial statements filed in the Company’s 2015 Annual Report on Form2021 10-K for a discussion of our assumptions in determining the aggregate grant date fair value of these awards. |
Equity Compensation Plan Information
The following table summarizes share
(4)
| Effective May 20, 2021, Ms. Wexner and Mr. Wexner retired from the Board. Cash payments were pro-rated based on the number of days of Board service. |
(5)
| In connection with the Separation, Mses. James’ and Sheehan’s Board service ended. Cash payments were pro-rated based on the number of days of Board service. |
(6)
| Mses. Hondal and Lee were appointed to the Board effective March 16, 2021, and Mr. Symancyk was appointed to the Board effective May 20, 2021. Cash and stock payments were pro-rated based on the number of days of Board service, as applicable. |
Following the HCC Committee’s review of competitive practices for Board of Director compensation prepared by Willis Towers Watson for fiscal year 2022, the Board approved changes to Board compensation as follows: increase annual stock retainer to $150,000, reduce annual cash retainer to $100,000, increase HCC Committee and exercise price information aboutAudit Committee Chair fees to $25,000 and Nominating & Governance Committee and Executive Committee Chair fees to $20,000, pay Committee and Chair fees 100% in cash and adjust Board Chair compensation to $500,000 annually, paid 50% in cash and 50% in stock. See also “Compensation Discussion and Analysis–2022 Leadership Changes” regarding additional compensation matters regarding Ms. Nash.
Members of the Board are also subject to the Company’s equitystock ownership guidelines, as described under “Compensation Discussion and Analysis—Executive Compensation Philosophy—Executive and Director Stock Ownership Guidelines.”
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2021 PAY RATIO DISCLOSURE Pay Ratio
In accordance with the requirements of Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K (which we collectively refer to as the “Pay Ratio Rule”), we are providing the following estimated information for fiscal year 2021:
the median of the annual total compensation plansof all our employees (except our Chief Executive Officer) was $10,632;
the annual total compensation of our Chief Executive Officer was $17,668,627; and
the ratio of these two amounts is 1,662 to 1. We believe that this ratio is calculated in a manner consistent with the requirements of the Pay Ratio Rule.
Methodology for Identifying Our “Median Employee”
Identifying and Adjusting Our Employee Population
To identify the median of the annual total compensation of all of our employees (other than our Chief Executive Officer), we identified our total employee population as of January
30, 2016. | | | | | | | | | | | | |
Plan category | | (a) Number of
securities to be issued
upon exercise of
outstanding options,
warrants and rights | | | (b) Weighted-average
exercise price of
outstanding options,
warrants and rights | | | (c) Number of securities
remaining available for
future issuance under
equity compensation
plan (excluding
securities reflected in
column (a)) | |
Equity compensation plans approved by security holders(1) | | | 11,989,870 | | | $ | 42.40 | (2) | | | 16,690,069 | |
Equity compensation plans not approved by security holders | | | 0 | | | | 0 | | | | 0 | |
Total | | | 11,989,870 | | | $ | 42.40 | | | | 16,690,069 | |
(1) | Includes the 2015 Plan, 2011 Plan and the 1993 Plan (2009 Restatement). There are no shares remaining available for grant under the 1993 Plan (2009 Restatement).
|
(2) | Does not include outstanding rights to receive Common Stock upon the vesting of RSU awards or settlement of deferred stock units.
|
COMPENSATION COMMITTEE REPORT
29, 2022, the last day of our fiscal year. Our employee population consisted of full-time, part-time, seasonal and temporary employees globally.
Determining Our Median Employee
To identify our median employee, we calculated the cash compensation paid during the fiscal year for the employee population, annualizing the cash compensation of any permanent employee who joined the Company during the fiscal year. We identified the median compensation amount using this compensation measure which was consistently applied to all our employees in the calculation. We then selected a reasonably representative employee with total compensation equal to the median compensation amount as our “median employee.”
Using the methodologies described above, we determined that our median employee was a part-time, hourly employee. The Compensation Committeetotal compensation of the Board is composedmedian employee was $10,632.
Determination of four directors who are independent, as defined underAnnual Total Compensation of Our Median Employee and Our Chief Executive Officer
Once we identified our median employee, we then calculated such employee’s annual total compensation for 2021 using the NYSE listing standards. Additionally, each membersame methodology we used for purposes of determining the annual compensation of our NEOs for 2021.
Our Chief Executive Officer’s annual total compensation for 2021 for purposes of the
Compensation CommitteePay Ratio Rule is
an “outside director” within the meaning of Section 162(m) of the Code and a “non-employee director” with the meaning of Section 16b-3 under the Securities Exchange Act of 1934. The Compensation Committee reviews the CD&A on behalf of the Board.The Compensation Committee has reviewed and discussed the CD&A with management, and based on the review and discussions, the Compensation Committee recommendedequal to the Board that the CD&A be includedamount reported in the Company’s annual report on Form 10-K“Total” column in the 2021 Summary Compensation Table.
The Commission’s rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and apply various assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. Our median employee worked approximately 16 hours per week during fiscal year ended January 30, 20162021. If the total compensation per hour earned by the median employee was extrapolated to full-time employment, median compensation would be approximately $26,200 and the Company’s proxy statement.ratio would be 674 to 1.
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Compensation Committee
David T. Kollat, Chair
E. Gordon Gee
Jeffrey H. Miro
Michael G. Morris
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table shows certain information about the securities ownership of all directors
(and nominees) of the Company, the executive officers of the Company named in the
“20152021 Summary Compensation
Table”Table above and all directors and executive officers of the Company as a group.
Name of Beneficial Owner
| | | Number of Shares of Common
Stock Beneficially
Owned(a) Owned(a)(b) | | | Percent of Class | |
Wendy C. Arlin | | | 98,548(c) | | | * |
Patricia S. Bellinger | | | 30,050 | | | * |
James L. Bersani | | | 185,905(c) | | | * |
Alessandro Bogliolo | | | 0 | | | * |
Stuart B. Burgdoerfer | | 63,925(c) | 27,968(c) | | * | * |
Nicholas Coe
Francis A. Hondal | | 28,268(c) | 2,063 | | * | * |
E. Gordon Gee
Danielle M. Lee | | 8,285(d) | 2,063 | | * | * |
Dennis S. Hersch
Andrew M. Meslow | | 10,322,318(d)(f) | 276,392(c)(d) | | 3.57 | % * |
Donna A. James
| | 42,551(d) | | | * | |
David T. Kollat
| | 117,349 | | | * | |
William R. Loomis, Jr.
| | 97,209(d) | | | * | |
Charles C. McGuigan
| | 44,403(c)(h) | | | * | |
Jeffrey H. Miro
| | 102,117(d) | | | * | |
Michael G. Morris | | 14,395(d) | 72,756 | | * | * |
Sarah E. Nash | | | 20,640 | | | * |
Juan Rajlin | | | 0 | | | * |
Deon N. Riley | | | 7,064 | | | * |
Julie B. Rosen | | | 0 | | | * |
Robert H. Schottenstein | | | 28,480(e) | | | * |
Stephen D. Steinour | | 11,058(d) | 58,052(f) | | * | * |
Allan R. Tessler
J.K. Symancyk | | 82,186 | 1,731 | | * | * |
Sharen J. Turney
| | 539,643(c)(e) | | | * | |
Abigail S. Wexner
| | 12,904,920(g) | | | 4.46 | % |
Leslie H. Wexner
| | 46,259,019(c)(h)(i) | | | 15.98 | % |
Raymond Zimmerman
| | 124,643(d)(j) | | | * | |
All directors and executive officers as a group | | 47,607,228(c)-(j) | 871,153(c)-(f) | | 16.45 | % * |
(a)
| Unless otherwise indicated, each named person has voting and investment power over the listed shares and such voting and investment power is exercised solely by the named person or shared with a spouse. None of the listed shares have been pledged as security or otherwise deposited as collateral. |
(b)
| Reflects beneficial ownership of shares of Common Stock, and shares outstanding, as of January 30, 2016. 29, 2022. |
(c)
| Includes the following number of shares issuable within 60 days of January 30, 2016,29, 2022, upon the exercise or vesting of outstanding stock awards: Ms. Arlin, 65,459; Mr. Bersani, 100,905; Mr. Burgdoerfer, 14,219;27,968; Mr. Coe, 23,102; Mr. McGuigan, 16,884; Ms. Turney, 43,543; Mr. Wexner, 1,662,275;Meslow, 182,536; and all directors and executive officers as a group, 1,760,023. 425,778. |
(d)
| Includes 4,134 shares held in the following number of deferred stock units creditedBath & Body Works, Inc. 401(k) Savings and Retirement Plan over which Mr. Meslow has investment power but does not have voting power except to directors’ accounts under the 2003 Stock Award and Deferred Compensationextent permitted by the Retirement Plan for Non-Associate Directors that could be convertible into Common Stock within 60 days after terminationCommittee from the Board: Dr. Gee, 7,329; Mr. Hersch, 71,177; Ms. James, 30,188; Mr. Loomis, 86,945; Mr. Miro, 81,578; Mr. Morris, 4,285; Mr. Steinour, 1,058; Mr. Zimmerman, 91,285; and all directors as a group, 373,845. Mr. Morris has electedtime to receive pay-out of his deferred stock units over three years, and his total represents 1/3 of the units which he would be owed upon his termination from the Board. Mr. Steinour has elected to receive pay-out of his deferred stock units over five years, and his total represents 1/5 of the units which he would be owed upon his termination from the Board. time. |
(e)
| Includes the following number of deferred stock units credited to executives’ accounts under the Company’s Supplemental Retirement Plan that could be convertible into Common Stock within 60 days after termination of employment with the Company: Ms. Turney, 84,213. |
(f) | Includes 1,257,2552,000 shares held by The Linden Eastthe Irving Schottenstein Marital Trust 2, for which Mr. Schottenstein is co-trustee and has sole voting and investment power. Mr. Schottenstein has a financial interest in 500 of the foregoing shares.
|
(f)
| Includes 9,900 shares held in the Patricia M. Steinour Legacy Trust, for which Mr. Hersch is trustee and sharesSteinour has shared voting and investment power, with Mr. Wexner and Mrs. Wexner, and 8,992,8869,900 shares held by The Linden Westin the Stephen D. Steinour Dynasty Trust, for which Mr. Hersch is trustee and sharesSteinour has shared voting and investment power with Mr. Wexner. |
(g) | Excludes 33,354,099power. Includes 12,925 shares beneficially owned by Mr. Wexner as to which Mrs. Wexner disclaims beneficial ownership. Includes 1,257,255 shares held by The Linden East Trust, as to which Mrs. Wexner shares voting and investment power with Mr. Hersch; 1,441,741 shares held by The Wexner Family Charitable Fund; and 191,515 shares held by The Beech Trust, in each case, as to which Mrs. Wexner shares voting and investment power with Mr. Wexner. Includes 10,014,409 shares directly owned by Mrs. Wexner.
|
(h) | Includes the following number of shares held in the Savings and Retirement Plan (as of January 30, 2016), over which Messrs. McGuigan and Wexner have investment but not voting power: Mr. McGuigan, 4,265; and Mr. Wexner, 1,851,959.
|
(i) | Includes 1,257,255 shares held by The Linden East Trust, 8,992,886 shares held by The Linden West Trust, 1,441,741 shares held by The Wexner Family Charitable Fund; and 191,515 shares held by The Beech Trust. Mr. Wexner shares voting and investment power with Mrs. Wexner with respect to shares held by The Linden East Trust, The Wexner Family Charitable Fund and The Beech Trust, and shares voting and investment power with Mr. Hersch with respect to shares held by The Linden East Trust and The Linden West Trust. Includes 4,892,608 shares held by the Wexner Personal Holdings Corporation, of which Mr. Wexner is the sole stockholder, director and officer. Includes 10,014,409 shares directly owned by Mrs. Wexner,Steinour’s spouse, as to which Mr. WexnerSteinour may be deemed to share voting and investment power. Includes 15,954,371 shares directly owned by Mr. Wexner.
|
(j) | Includes 2,888 shares which are Mr. Zimmerman’s pro rata share of 8,664 shares owned by a corporation of which Mr. Zimmerman is president and a 33% stockholder.
|
TABLE OF CONTENTS
DELINQUENT SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
The Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, must file reports of ownership and changes in ownership of the Company’s equity securities with the Commission. Copies of those reports must also be furnished to the Company. Based solely on a review of the copies of reports furnished to the Company and written representations of the Company’s executive officers and directors that no other reports were required, we believe that during fiscal 20152021 our executive officers, directors and greater than 10% beneficial owners complied with these filing requirements.requirements, except as follows:
On September 24, 2021, Ms. Nash filed a late Form 4 that reported the vesting of one tranche of Ms. Nash’s restricted stock unit award that occurred on August 20, 2021, which was late due to an inadvertent administrative error made by the Company. In addition, the number of such restricted stock units that vested in respect of such tranche on August 20, 2021 was misreported due to an inadvertent administrative error by the Company and was corrected on a Form 4 amendment filed on February 8, 2022.
On February 14, 2022, Mr. Steinour filed a late Form 5 that reported gifts of shares from Mr. Steinour to his spouse that occurred on each of March 6, 2018 and May 14, 2020, which gifts were not timely reported due to an inadvertent administrative error made by the Company.
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SHARE OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth the names of all persons who, as of the dates indicated below, were known by the Company to be the beneficial owners (as defined in the rules of the Commission) of more than 5% of the shares of Common Stock.
| | | | | | | | |
Name and Address of Beneficial Owner | | Amount
Beneficially
Owned | | | Percent
of
Class | |
Leslie H. Wexner(1) | | | 46,259,019 | | | | 15.98 | % |
Three Limited Parkway | | | | | | | | |
P.O. Box 16000 | | | | | | | | |
Columbus, OH 43216 | | | | | | | | |
| | |
PRIMECAP Management Company(2) | | | 19,232,221 | | | | 6.64 | % |
225 South Lake Ave., #400 | | | | | | | | |
Pasadena, CA 91101 | | | | | | | | |
| | |
FMR LLC(3) | | | 15,448,861 | | | | 5.34 | % |
245 Summer Street | | | | | | | | |
Boston, MA 02210 | | | | | | | | |
| | |
The Vanguard Group(4) | | | 14,739,270 | | | | 5.09 | % |
100 Vanguard Blvd. | | | | | | | | |
Malvern, PA 19355 | | | | | | | | |
The Vanguard Group(1)
100 Vanguard Blvd.
Malvern, PA 19355
| | | 28,496,965 | | | 11.06% |
| | | | | | |
Lone Pine Capital LLC, David F. Craver, Brian F. Doherty,
Kelly A. Granat, Stephen F. Mandel, Jr. and Kerry A. Tyler(2)
Two Greenwich Plaza
Greenwich, CT 06830
| | | 24,300,268 | | | 9.4% |
| | | | | | |
BlackRock, Inc.(3)
55 East 52nd Street
New York, NY 10055
| | | 17,861,118 | | | 6.9% |
| | | | | | |
Egerton Capital (UK) LLP(4)
5 Stratton Street London,
W1J 8LA, United Kingdom
| | | 13,671,287 | | | 5.3% |
(1)
| As of January 30, 2016. For a description of Mr. Wexner’s beneficial ownership, see “Security Ownership of Directors and Management” on pages 53 and 54.
|
(2) | As of December 31, 2015,2021, based solely on information set forth in the Schedule 13G/A filed February 12, 20169, 2022 by PRIMECAP Management Company. PRIMECAP Management Company hasThe Vanguard Group, The Vanguard Group reported having shared voting power over 440,105 shares, sole dispositive power over 19,232,22127,426,897 shares and sole voting power over 4,411,542 shares. |
(3) | Based solely on information set forth in the Schedule 13G filed February 12, 2016 by FMR LLC. FMR LLC has soleshared dispositive power over 15,448,861 shares and sole voting power over 665,299 shares and Abigail P. Johnson has sole dispositive power over 15,448,8611,070,068 shares. Abigail P. Johnson is a Director, the Vice Chairman, the Chief Executive Officer and the President of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC.
|
(4)(2)
| As of December 31, 2015,2021, based solely on information set forth in the Schedule 13G/A filed February 10, 201614, 2022 by The Vanguard Group. The Vanguard GroupLone Pine Capital LLC, David F. Craver, Brian F. Doherty, Kelly A. Granat, Stephen F. Mandel, Jr. and Kerry A. Tyler (each, a “Lone Pine Reporting Person”), each Lone Pine Reporting Person has shared voting and shared dispositive power over 24,300,268 shares. |
(3)
| As of December 31, 2021, based solely on information set forth in the Schedule 13G filed February 7, 2022 by BlackRock, Inc., BlackRock, Inc. reported having sole voting power over 15,872,809 shares and sole dispositive power over 14,245,471 shares and17,861,118 shares. |
(4)
| As of December 31, 2021, based solely on information set forth in the Schedule 13G/A filed February 9, 2022 by Egerton Capital (UK) LLP, Egerton Capital (UK) LLP reported having sole voting power over 469,120 shares, and has sharedsole dispositive power over 493,799 shares and shared voting power over 25,40013,671,287 shares. |
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REPORT OF THE AUDIT COMMITTEE
As provided in our written charter, the Audit Committee is instrumental in the Board’s fulfillment of its oversight responsibilities relating to (i) the integrity of the Company’s financial statements
and internal controls, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications, independence and performance of the Company’s independent auditors and (iv) the performance of the Company’s internal audit function.
We have the sole authority to appoint, compensate, retain, oversee and terminate the Company’s independent auditors. We pre-approve the audit services and non-audit services to be provided by the Company’s independent auditors. In addition, we evaluate the independent auditors’ qualifications, performance and independence and present our conclusions with respect to the independent auditors to the full Board on at least an annual basis.It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditors. Furthermore, while we are responsible for reviewing the Company’s policies and practices with respect to risk assessment and management, it is the responsibility of the
CEOChief Executive Officer and senior management to determine the appropriate level of the Company’s exposure to risk.
We have reviewed and discussed
L Brands’the Company’s audited financial statements as of and for the year ended January
30, 201629, 2022 and met with both management and
ourthe Company’s independent auditors to discuss the financial statements. Management has represented to us that the financial statements were prepared in accordance with generally accepted accounting principles. We have reviewed with the internal auditors and independent auditors the overall scope and plans for their respective audits. We also met with the internal auditors and independent auditors, with and without management present, to discuss the results of their examinations and their evaluations of the Company’s internal controls.
We have also discussed with the independent auditors
allthe matters required to be discussed
with audit committees underby the applicable
auditingrequirements of the Public Company Accounting Oversight Board (the “PCAOB”) and
regulatory standards.the Commission. The Company’s independent auditors also provided to us the written disclosures and the letter required by applicable requirements of the
Public Company Accounting Oversight BoardPCAOB regarding the independent auditor’s communications with the audit committee concerning independence, and we discussed with the independent auditors their independence from the Company. We considered whether the provision of non-audit services by the independent auditors to the Company is compatible with maintaining their independence.
Based on the reviews and discussions summarized in this Report, and subject to the limitations on our role and responsibilities, certain of which are referred to above and in the Audit Committee charter, we recommended to the Board that
L Brands’the Company’s audited financial statements be included in our
annual report on Form2021 10-K
for the year ended January 30, 2016 for filing with the Commission.
We have appointed Ernst & Young LLP as
L Brands’the Company’s independent registered public accountants.
Stephen D. Steinour, Chair
Francis A. James, ChairHondal
Michael G. Morris
J.K. Symancyk
TABLE OF CONTENTS
David T. Kollat
Allan R. Tessler
Raymond Zimmerman
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
During our
20152021 fiscal year, Ernst & Young LLP served as the Company’s independent registered public accountants and in that capacity rendered an opinion on our consolidated financial statements as of and for the fiscal year ended January
30, 2016.29, 2022. The Audit Committee
annually reviews the selection of independent registered public accountants and has selected Ernst & Young LLP as the Company’s independent registered public accountants for the current fiscal year.
The aggregate audit fees payable to Ernst
& Young&Young LLP for
the fiscal years
ended 20152021 and
20142020 were approximately
$4,243,000$6,364,000 and
$4,072,700,$6,790,000, respectively. These amounts include fees for professional services rendered by Ernst & Young LLP in connection with the audit of our consolidated financial statements and reviews of our unaudited consolidated interim financial statements, as well as fees for services that generally only the independent auditor can reasonably be expected to provide, including comfort letters and consultation regarding financial accounting and/or reporting standards. These amounts also include fees for services rendered in connection with the audit of our internal control over financial reporting,
and fees for services rendered in connection with statutory audits of our international subsidiaries’ financial
statements.Audit Relatedstatements and fees for audit services in connection with the Separation.
The aggregate fees for assurance and related services rendered by Ernst & Young LLP that were reasonably related to the audit of our consolidated financial statements for
the fiscal years
ended 20152021 and
20142020 were approximately
$258,000$227,000 and
$155,000,$367,000, respectively. The fees under this category are for assurance and related services that are traditionally performed by the independent auditor and include audits of employee benefit plans, agreed upon procedures and other attest
engagements.engagements not required by statute or regulation.
The aggregate fees for tax services rendered by Ernst & Young LLP for
the fiscal years
ended 20152021 and
20142020 were approximately
$110,000$327,000 and
$130,000,$151,000, respectively. Tax fees include tax compliance and advisory services.
All Other Fees
The aggregate
No fees for
all other services
rendered bywere paid to Ernst & Young LLP for
the fiscal years
ended 20152021 and
2014 were approximately $369,000 and $0, respectively. The fees under this category that were paid in the fiscal year ended 2015 were for compliance-related advisory services.2020.
Pre-approval Policies and Procedures
The
Our Audit Committee pre-approves allis required to pre-approve the audit and non-audit services to be providedperformed by Ernst & Young LLP in a given fiscal year.order to ensure that these services do not impair Ernst & Young LLP's independence from us. We maintain an auditor independence policy that, among other things, mandates that our Audit Committee annually pre-approves all audit and permitted non-audit services expected to be performed each year by Ernst & Young LLP and the related fees. This policy also mandates that we may not enter into engagements with Ernst & Young LLP for other permissible non-audit services without the express pre-approval of the Audit Committee. In accordance with this policy, the Audit Committee pre-approved all services performed by Ernst & Young LLP in 2021 and 2020.
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The Board knows of no other matters to be brought before the annual meeting. However, if other matters should come before the meeting, each of the persons named as a proxy intends to vote in accordance with his or her judgment on such matters.
STOCKHOLDER PROPOSALS FOR NEXT YEAR
Stockholder Proposals Pursuant to Rule 14a-8
Proposals submitted for inclusion in the proxy statement for
the 2017our 2023 annual meeting
of stockholders must be received by the Secretary of the Company at our principal executive offices on or before December
9, 2016.2, 2022.
Stockholder Director Nominations for Inclusion in 2022 Proxy Statement
Written notice of stockholder nominations of persons for election as a director at our 2023 annual meeting of stockholders that are to be included in our proxy statement for the 2023 annual meeting of stockholders pursuant to the proxy access provisions in Section 2.05 of our Bylaws must be received by the Secretary of the Company at our principal executive offices no earlier than November 2, 2022 and no later than December 2, 2022. The notice must contain the information required by our Bylaws.
Other Stockholder Proposals
If a stockholder intends to present a proposal or nominate a person for election as a director at the
20172023 annual meeting other than as described above, the stockholder must comply with the requirements set forth in
Section 2.04 of our Bylaws. The Bylaws require, among other things, that the Secretary receive written notice of the intent to present a proposal or nomination no earlier than February
18, 201711, 2023 and no later than March
20, 2017.13, 2023. The notice must contain the information required by
theour Bylaws.
We are soliciting
this proxy on behalfproxies primarily by the use of
our Board and will bear the
solicitation expenses. Our directors or employeesmail. However, we may
also solicit proxies by telephone,
facsimileemail and personal solicitation, in addition to the use of the mail.
To the extent our directors or associates participate in this solicitation, they will not receive compensation for their participation, other than their normal compensation. D.F. King & Co. Inc. assists us with the solicitation for a fee of $12,500 plus reasonable out-of-pocket expenses. We will, upon request, reimburse banks, brokerage houses and other institutions, nominees and fiduciaries for their expenses in forwarding proxy materials to beneficial owners.
We bear all costs associated with this proxy solicitation.
|
| | By Order of the Board of Directors, |
| | | |
/s/ Leslie H. Wexner
| | | |
Leslie H. Wexner
| | | |
Chairman of the Board
| | | Sarah E. Nash
Executive Chair |
AppendixTABLE OF CONTENTS
Proposed Bath & Body Works, Inc. Associate Stock Purchase Plan
BATH & BODY WORKS, INC.
ASSOCIATE STOCK PURCHASE PLAN
Section 1. Purpose.L BRANDS, INC. This Bath & Body Works, Inc. Associate Stock Purchase Plan (the “
PlanPROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO REMOVE SUPERMAJORITY VOTING REQUIREMENTS
Articles EIGHTH”) is intended to provide employees of the Company and THIRTEENTH andits Participating Companies with an opportunity to acquire a proprietary interest in the Company through the purchase of Shares. The Plan has two components: (a) one component (the “423 Component”) is intended to qualify as an “employee stock purchase plan” under Section 2423 of Article FIFTH and Section 1 of Article ELEVENTH are hereby removed in their entirety,the Code, and the remaining articlesPlan will be interpreted in a manner that is consistent with that intent, and (b) the other component (the “Non-423 Component”), which is not intended to qualify as an “employee stock purchase plan” under Section 423 of the Charter are hereby renumbered accordingly. Articles EIGHTH and THIRTEENTH and Section 2Code, authorizes the grant of Article FIFTH and Section 1 of Article ELEVENTH, which are hereby repealed, are shown below:
FIFTH. Section 2.Amendment of Bylawsoptions to purchase Shares pursuant to rules, procedures or sub-plans adopted by the Stockholders. The bylaws shall notCommittee that may be made, repealed, altered, amendeddesigned to achieve certain tax, securities laws or rescinded byother objectives for Eligible Employees, as determined in the stockholdersdiscretion of the Corporation except byCommittee. Except as otherwise provided herein, the vote of the holders of not less than 75 percent of the outstanding shares of the Corporation entitled to vote thereon. Any amendment to the Certificate of Incorporation which shall contravene any bylaw in existence on the record date of the stockholders meeting at which such amendment is toNon-423 Component will operate and be voted upon by the stockholders shall require the vote of the holders of not less than 75 percent of the outstanding shares entitled to vote thereon.
EIGHTH. The affirmative vote of the holders of not less than 75 percent of the outstanding shares of the Corporation entitled to vote thereon shall be required for the approval of any proposal that (1) the Corporation merge or consolidate with any other corporation or any affiliate of such other corporation if such other corporation and its affiliates singly oradministered in the aggregate are directly or indirectlysame manner as the beneficial owners of more than five percent of the outstanding shares of423 Component.
Section 2. Definitions.
(a) “Affiliate” means any class of stock of the Corporation entitled to vote in the election of directors (such other corporation and any affiliate thereof being herein referred to as a “Related Corporation”), or (2) the Corporation sell, lease or exchange all or substantially all of its assets or business to or with such Related Corporation, or (3) the Corporation issue or deliver any stock or other securities of its issue in exchange or payment for any properties or assets of any such Related Corporation or securities issued by any such Related Corporation or in a merger of any affiliate of the Corporation with or into any such Related Corporation, or (4) the Corporation dissolve, and to effect such transaction the approval of stockholders of the Corporation is required by law or by any agreement between the Corporation and any national securities exchange; provided, however,entity that, the foregoing clauses (1), (2), (3) and (4) shall not apply (i) to any such merger, consolidation, sale, lease, or exchange, or issuance or delivery of assets or other securities which was approved by resolution of the Board of Directors of the Corporation prior to the acquisition of the beneficial ownership of more than five percent of the outstanding Common Stock by the Related Corporation, (ii) to any such transaction solely between the Corporation and another corporation 50 percent or more of the voting power of which is owned by the Corporation provided that the Certificate of Incorporation of the surviving corporation contains provisions substantially similar to those provided in Articles FIFTH, SIXTH, Section 1, SEVENTH, EIGHTH, NINTH, TENTH, and ELEVENTH, (iii) to any transaction between this Corporation and either (a) any stockholder who owned in excess of 10 percent of the Common Stock of the Corporation immediately after the merger of Limited Interim Ohio, Inc., an Ohio corporation, into The Limited Stores, Inc. an Ohio corporation or (b) any affiliate from time to time organized, established, or incorporated of a stockholder referred to in (iii) (a) above. For the purposes hereof, an “affiliate” is any person (including a corporation, partnership, association, trust, business entity, estate or individual) who directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified; “control”Company.
(b) “ASPP Share Account” means an account into which Shares purchased with accumulated payroll deductions at the end of an Offering Period are deposited on behalf of a Participant.
(c) “Board” means the possession, directly or indirectly,Board of Directors of the powerCompany.
(d) “Code” means the Internal Revenue Code of 1986, as amended from time to direct or causetime, and the directionrules, regulations and guidance thereunder. Any reference to a provision in the Code shall include any successor provision thereto.
(e) “Committee” means the Human Capital and Compensation Committee of the managementBoard, unless another committee is designated by the Board. If there is no Human Capital and policiesCompensation Committee of a person, whether through the ownership of voting securities, by contract, or otherwise; and in computing the percentage of outstanding Common Stock beneficially owned by any person, the shares outstandingBoard and the shares ownedBoard does not designate another committee, references herein to the “Committee” shall be determinedrefer to the Board.
(f) “Company”means Bath & Body Works, Inc., a Delaware corporation, and any successor corporation.
(g) “Compensation” means the base salary and wages paid to an Eligible Employee by the Company or a Participating Company as compensation for services to the Company or Participating Company, before deduction for any salary deferral contributions made by the Eligible Employee to any tax-qualified or nonqualified deferred compensation plan, but excluding cash or equity-based incentive compensation, bonuses, or other similar payments. The Committee may change the definition of Compensation on a prospective basis.
(h) “Corporate Transaction” means a merger, consolidation, acquisition of property or stock, separation, reorganization or other corporate event described in Section 424 of the Code.
(i) “Designated Broker” means the financial services firm or other agent designated by the Company to maintain ASPP Share Accounts on behalf of Participants who have purchased Shares under the Plan.
(j) “Effective Date” means May 12, 2022, subject to approval by the Board and the stockholders of the Company in accordance with Section 19(k).
(k) “Eligible Employee” means an Employee who has completed (or who has been credited with) at least six (6) months of continuous employment service with the Company or any of the Participating Companies as of the record date fixedapplicable Offering Date (or such other period of employment as determined by the Committee in accordance with Treasury Regulation Section 1.423-2(e); provided, however, that the Committee retains discretion to determine which Eligible Employees may participate in the Plan or any Offering pursuant to and consistent with Treasury Regulation Sections 1.423-2(e) and (f). Notwithstanding the foregoing, the Committee (i) may exclude from participation in the Plan or any Offering any Employees who are “highly
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compensated employees” or a sub-set of such “highly compensated employees” (within the meaning of Section 414(q) of the Code) or who otherwise may be excluded from participation pursuant to Treasury Regulation Section 1.423-2(e) and (ii) may exclude any Employees located outside of the United States to the extent permitted under Section 423 of the Code.
(l) “Employee” means any person who renders services to the Company or a Participating Company as an employee (whether on a full-time or part-time basis) pursuant to an employment relationship with such employer. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on military leave, sick leave, parental leave or other leave of absence approved by the Company or a Participating Company that meets the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not provided by statute or contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three-month period, or such other period specified in Treasury Regulation Section 1.421-1(h)(2).
(m) “Enrollment Form” means a written agreement (which may be in an electronic or other form specified by the Committee) pursuant to which an Eligible Employee may elect to enroll in the Plan, to authorize a new level of payroll deductions, or to stop payroll deductions and withdraw from an Offering.
(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto.
(o) “Fair Market Value” means, as of any date, the closing price of a Share on the Trading Day immediately preceding the date of determination (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred), on the principal stock market or exchange on which Shares are quoted or traded, or if Shares are not so quoted or traded, the fair market value of a Share as determined by the Committee, which such determination shall be conclusive and binding on all persons.
(p) “Initial Offering Period” means the Offering Period commencing on January 1, 2023 and ending on June 30, 2023, unless otherwise determined by the Committee (or its delegate).
(q) “Offering” means the grant of options to purchase Shares under the 423 Component or the Non-423 Component, as applicable, to Eligible Employees under terms approved by the Committee.
(r) “Offering Date” means, with respect to each Offering Period, the first Trading Day of such Offering Period as designated by the Committee.
(s) “Offering Period” means the period described in Section 5.
(t) “Offering Period Limit” has the meaning set forth in Section 7.
(u) “Participant” means an Eligible Employee who is actively participating in the Plan.
(v) “Participating Companies” means the Subsidiaries and Affiliates that have been designated by the Committee as eligible to participate in the Plan, and such other Subsidiaries and Affiliates that may be designated by the Committee from time to time in its sole discretion. For purposes of the 423 Component, only the Company and its Subsidiaries may be Participating Companies; provided, however, that at any given time, a Subsidiary that is a Participating Company under the 423 Component will not be a Participating Company under the Non-423 Component. The Committee may designate any Subsidiary or Affiliate as a Participating Company, or revoke any such designation, at any time and from time to time, either before or after the Plan is approved by the stockholders entitledof the Company.
(w) “Plan” means this Bath & Body Works, Inc. Associate Stock Purchase Plan, as set forth herein, and as amended from time to votetime.
(x) “Purchase Date” means one or express consentmore dates during an Offering Period, as established by the Committee, on which options granted under the Plan will be exercised and purchases of Shares will be carried out in accordance with the terms of the applicable Offering; provided that, unless otherwise determined by the Committee, each Offering Period will have one Purchase Date on the last Trading Day of such Offering Period.
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(y) “Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair Market Value of a Share on the Purchase Date; provided that the Purchase Price per Share will in no event be less than the par value of the Shares.
(z) “Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Securities Act includes any successor provision thereto.
(aa) “Share” means a share of the Company’s common stock, $0.50 par value.
(bb) “Subsidiary” means any corporation, domestic or foreign, in an unbroken chain of corporations beginning with the Company of which at the time of the granting of an option pursuant to Section 7, not less than 50% of the total combined voting power of all classes of stock are held by the Company or a Subsidiary, whether or not such corporation exists now or is hereafter organized or acquired by the Company or a Subsidiary; provided, however, that a limited liability company or partnership may be treated as a Subsidiary to the extent either (a) such entity is treated as a disregarded entity under Treasury Regulation Section 301.7701-3(a) by reason of the Company or any other Subsidiary that is a corporation being the sole owner of such entity, or (b) such entity elects to be classified as a corporation under Treasury Regulation Section 301.7701-3(a) and such entity would otherwise qualify as a Subsidiary.
(cc) “Trading Day” means any day on which the national stock exchange upon which the Shares are listed is open for trading.
(dd) “Treasury Regulations” means the Treasury regulations promulgated under the Code. Any reference to a provision in a Treasury regulation includes any successor provision thereto.
Section 3. Administration.
(a) Administration of Plan. The Plan shall be administered by the Committee which shall have the authority to construe and interpret the Plan, prescribe, amend and rescind rules relating to the Plan’s administration and take any other actions necessary or desirable for the administration of the Plan including, without limitation, adopting sub-plans and special rules applicable to particular Participating Companies or locations, which sub-plans or special rules may be designed to be outside the scope of Section 423 of the Code or under the Non-423 Component. The Committee may correct any defect or supply any omission or reconcile any inconsistency or ambiguity in the Plan. The decisions of the Committee shall be final and binding on all persons. All expenses of administering the Plan shall be borne by the Company. Notwithstanding anything in the Plan to the contrary and without limiting the generality of the foregoing, the Committee shall have the authority to change the minimum and maximum amounts of Compensation for payroll deductions pursuant to Section 6(a), the frequency with which a Participant may elect to change the Participant’s rate of payroll deductions pursuant to Section 6(b), the dates by which a Participant is required to submit an Enrollment Form pursuant to Section 6(b) and Section 10(a), the effective date of a Participant’s withdrawal due to termination or transfer of employment or change in status pursuant to Section 11, and the withholding procedures pursuant to Section 19(m).
(b) Delegation of Authority. To the extent permitted by applicable law, including under Section 157(c) of the Delaware General Corporation Law, the Committee may delegate to (i) one or more officers of the Company some or all of its authority under the Plan and (ii) one or more committees of the Board some or all of its authority under the Plan.
Section 4. Eligibility.
(a) Eligibility Generally. In order to participate in an Offering, an Eligible Employee must deliver a completed Enrollment Form to the Company at least five (5) business days prior to the Offering Date (unless a different time is set by the Company for all Eligible Employees with respect to such proposal. The stockholder vote,Offering) and must elect the Eligible Employee’s payroll deduction rate as described in Section 6.
(b) Limitations on Eligibility. Notwithstanding any provision of the Plan to the contrary, no Eligible Employee shall be granted an option under the 423 Component if (i) immediately after the grant of the option, such Eligible Employee (or any required for mergers, consolidations, sales, leases,other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own stock of the Company or exchangeshold outstanding options to purchase stock of assetsthe Company possessing 5% or issuances more of the total combined voting power or value of all classes
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of stock of the Company or other securities not expressly providedany Subsidiary or (ii) such option would permit such Eligible Employee’s rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its Subsidiaries to accrue at a rate that exceeds $25,000 of the Fair Market Value of such stock (determined at the time the option is granted) for each calendar year in this Article,which such option is outstanding at any time, in accordance with the provisions of Section 423(b)(8) of the Code.
Section 5. Offering Periods. Following the completion of the Initial Offering Period, the Plan shall be implemented by subsequent Offering Periods, each of which shall be approximately six (6) months in duration, with new Offering Periods commencing on or about January 1 and July 1 of each year. The Committee shall have, prior to the commencement of a particular Offering Period, the authority to change the duration, frequency, start and end dates of Offering Periods (subject to a maximum Offering Period of twenty-seven (27) months).
Section 6. Participation.
(a) Enrollment; Payroll Deductions. An Eligible Employee may elect to participate in the Plan by properly completing an Enrollment Form, which may be electronic, and submitting it to the Company, in accordance with the enrollment procedures established by the Committee. Participation in the Plan is entirely voluntary. By submitting an Enrollment Form, the Eligible Employee authorizes payroll deductions from the Eligible Employee’s paycheck in an amount equal to a whole percentage (of at least one percent (1%) but no greater than ten percent (10%)) of the Eligible Employee’s Compensation on each payday occurring during an Offering Period. Payroll deductions shall commence as soon as administratively practicable following the Offering Date and end on the latest practicable payroll date on or before the Purchase Date. The Company shall maintain records of all payroll deductions but shall have no obligation to pay interest on payroll deductions or to hold such
amounts in a trust or in any segregated account, except as may be required by applicable law.
ELEVENTH. Unless expressly permitted by the Committee, a Participant may not make any separate contributions or payments to the Plan. For the avoidance of doubt, all payroll deductions during an Offering Period that are made under the Plan from a Participant’s Compensation shall be made on an after-tax basis. If payroll deductions during an Offering Period for purposes of the Plan are prohibited or otherwise problematic under applicable law (as determined by the Committee in its discretion), the Committee may permit Participants to contribute to the Plan by such other means as determined by the Committee. Any reference to “payroll deductions” in this Section 1.Amendment6(a) (or in any other section of Certain Articlesthe Plan) will similarly cover contributions by other means made pursuant to this Section 6(a).
(b) Election Changes. During an Offering Period, a Participant may not increase or decrease the Participant’s rate of payroll deductions applicable to such Offering Period. A Participant may increase or decrease the Participant’s rate of payroll deductions for future Offering Periods by submitting a new Enrollment Form authorizing the new rate of payroll deductions at least fifteen (15) days before the start of the next Offering Period.
(c) Automatic Re-enrollment. The provisionsdeduction rate selected in the Enrollment Form shall remain in effect for subsequent Offering Periods unless the Participant (i) submits a new Enrollment Form authorizing a new level of payroll deductions in accordance with Section 6(b), (ii) withdraws from the Plan in accordance with Section 10, or (iii) terminates employment or otherwise becomes ineligible to participate in the Plan.
Section 7. Grant of Option. On each Offering Date, each Participant in the applicable Offering Period shall be granted an option to purchase, on the Purchase Date, a number of Shares determined by dividing the Participant’s accumulated payroll deductions in respect of such Offering Period by the applicable Purchase Price; provided, that the maximum number of Shares that may be purchased by a Participant during an Offering Period shall not exceed 1,000 Shares or such other maximum number of Shares as the Committee may establish from time to time before an Offering Period begins, subject to adjustment in accordance with Section 18 and the limitations set forth in this Article ELEVENTHSection 4 and in Article FIFTH (dealingSection 13 of the Plan (the “Offering Period Limit”).
Section 8. Exercise of Option/Purchase of Shares.
(a) A Participant’s option to purchase Shares will be exercised automatically on the Purchase Date of each Offering Period. The Participant’s accumulated payroll deductions will be used to purchase the maximum number of whole Shares that can be purchased with the amendmentamounts in the Participant’s notional account, subject to the Offering Period Limit. During a Participant’s lifetime, the Participant’s option to purchase Shares under the Plan is exercisable only by the Participant.
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(b) No fractional Shares may be purchased, but contributions unused in an applicable Offering Period due to being less than the Purchase Price of bylaws), SIXTH, a whole Share (and thereby representing a fractional Share) will be carried forward to the next Offering Period, subject to earlier withdrawal by the Participant in accordance with Section 1 (dealing10 or termination of employment or change in employment status in accordance with Section 11.
Section 9. Transfer of Shares. As soon as administratively practicable after each Purchase Date, the Company will arrange for the delivery to each Participant of the Shares purchased upon exercise of the Participant’s option. Unless otherwise determined by the Committee, the Committee will require that the Shares be deposited directly into an ASPP Share Account established in the name of the Participant with a Designated Broker and may require that the Shares be retained with the classified Board), SEVENTH (dealingDesignated Broker for a specified period of time. Participants will not have any voting, dividend or other rights of a stockholder with respect to the prohibition against stockholder action without meetings), EIGHTH (dealing withShares subject to any option granted under the 75 percent votePlan until such Shares have been delivered pursuant to this Section 9.
Section 10. Withdrawal.
(a) Withdrawal Procedure. A Participant may withdraw from an Offering by submitting to the Company a revised Enrollment Form indicating the Participant’s election to withdraw at least thirty (30) days before the Purchase Date. The accumulated payroll deductions held on behalf of stockholders required for certain reorganizations), NINTH (dealing with certain mattersa Participant in the Participant’s notional account (that have not been used to purchase Shares) shall be considered bypaid to the Board in evaluating certain offers), and TENTH (dealing with the removal of any director) may not be amended, altered, changed, or repealed in any respect unless such repeal or amendment is approved by the affirmative voteParticipant as soon as administratively practicable following receipt of the holdersParticipant’s Enrollment Form indicating the Participant’s election to withdraw and the Participant’s option shall be automatically terminated. If a Participant withdraws from an Offering Period, no payroll deductions will be made during any succeeding Offering Period, unless the Participant re-enrolls in accordance with Section 6(a) of the Plan.
(b) Effect on Succeeding Offering Periods. A Participant’s election to withdraw from an Offering Period will not have any effect upon the Participant’s eligibility to participate in succeeding Offering Periods that commence following the completion of the Offering Period from which the Participant withdraws.
Section 11. Termination of Employment; Change in Employment Status. Notwithstanding Section 10, upon termination of a Participant’s employment for any reason prior to the Purchase Date, including death, disability or retirement, or a change in the Participant’s employment status following which the Participant is no longer an Eligible Employee, (a) if such termination occurs at least thirty (30) days before the Purchase Date, the Participant will be deemed to have withdrawn from the applicable Offering in accordance with Section 10 and the payroll deductions in the Participant’s notional account (that have not been used to purchase Shares) shall be returned as soon as administratively practicable to the Participant, or in the case of the Participant’s death, to the person(s) entitled to such amounts by will or the laws of descent and distribution, and the Participant’s option shall be automatically terminated, and (b) if such termination occurs within less than 75 percent of the outstanding shares of the Corporation entitled to vote thereon.THIRTEENTH. The provisions set forth in Article TWELFTH and in this Article THIRTEENTH may not be amended, altered, changed or repealed in any respect unless such action is approved by the affirmative vote of the holders of not less than 75 percent of the outstanding shares of Voting Stock (as defined in Article TWELFTH) of the Corporation at a meeting of the stockholders duly called for the consideration of such amendment, alteration, change or repeal; provided, however, that if there is an Interested Person (as defined in Article TWELFTH), such action must also be approved by the affirmative vote of the holders of not less than 75 percent of the outstanding shares of Voting Stock held by the stockholders other than the Interested Person.
Articles TENTH and TWELFTH, and Section 2 of Article ELEVENTH are hereby amended as shown below (with deletions highlighted in strike-through text and additions highlighted in underlined text):
TENTH. Any director may be removed at any annual or special stockholders’ meeting upon theaffirmative vote of the holdersof a majority in voting interest of the stockholders present in person or by proxy and voting thereon, a quorum being present of not less than 75 percent of the outstanding shares of voting stock of the Corporation at that time entitled to vote thereon; provided, however, that such director may be removed only for cause and shall receive a copy of the charges against him, delivered to him personally or by mail at his last known address at least 10thirty (30) days prior to the datePurchase Date, the Participant will not be treated as having withdrawn from such applicable Offering and the accumulated payroll deductions in the Participant’s notional account will be used to purchase Shares on the applicable Purchase Date, and the Participant will thereafter be deemed to have withdrawn from the next subsequent Offering in accordance with Section 10 immediately prior to the commencement of such applicable Offering Period. Unless otherwise determined by the Committee, a Participant whose employment transfers or whose employment terminates with an immediate rehire (with no break in service) by or between the Company or any Participating Company will not be treated as having terminated employment for purposes of participating in the Plan or an Offering; provided, however, if such transfer or employment termination and rehire results in the transfer of the stockholders’ meeting;Participant’s participation in an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s option will be qualified under the 423 Component only to the extent that such option and exercise complies with Section 423 of the Code. If such transfer or employment termination and rehire results in the transfer of the Participant’s participation in an Offering under the Non-423 Component to an Offering under the 423 Component, the Participant’s option and the exercise of such option will remain non-qualified under the Non-423 Component.
Section 12. No Interest. No interest shall accrue on or be payable with respect to the payroll deductions of a Participant in the Plan, except as may be required by applicable law.
Section 13. Shares Reserved for Plan.
Number of Shares. The maximum number of Shares available for issuance under the Plan shall not exceed in the aggregate 2,400,000 Shares, subject to adjustment as provided further,in Section 18. The Shares may be newly
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issued Shares, treasury Shares or Shares acquired on the open market. If any purchase of Shares pursuant to an option under the Plan is not consummated, the Shares not purchased under such option will again become available for issuance under the Plan. Any or all Shares reserved under this Section 13(a) may be granted under the 423 Component.
(a) Over-subscribed Offerings. If the Committee determines that, directors whoon a particular Purchase Date, the number of Shares with respect to which options are to be exercised exceeds either the number of Shares then available under the Plan, the Company shall have been electedmake a pro rata allocation of the Shares remaining available for purchase in as uniform a manner as practicable and as the Committee determines to be equitable. No option granted under the Plan shall permit a Participant to purchase Shares which, if added together with the total number of Shares purchased by all other Participants in such Offering, would exceed the total number of Shares remaining available under the Plan.
Section 14. Transferability. No payroll deductions credited to a Participant, nor any rights with respect to the exercise of an option or any rights to receive Shares hereunder may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws of descent and distribution, or as provided in Section 17) by the holdersParticipant. Any attempt to assign, transfer, pledge or otherwise dispose of a seriessuch rights or class of Preferred Stock, voting separately as a class,amounts shall be removed only pursuantwithout effect.
Section 15. Application of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose to the provisions establishingextent permitted by applicable law, and the rights of such series or class to elect such directors.TWELFTH. Section 1.Vote Required for Certain Business Combinations. The affirmative vote of the holders of not less than75 percent a majority of the outstanding shares of “Voting Stock” (as hereinafter defined) held by stockholders other than an “Interested Person” (as hereinafter defined) shall be required for the approval or authorization of any “Business Combination” (as hereinafter defined) of the Corporation with any Interested Person; provided, however, that the75 percent exclusion of “Interested Persons” from this voting requirementCompany shall not be applicable if:required to segregate such payroll deductions or contributions.
(a)
Section 16. Statements. Statements will be made available (in such form as determined by the “Continuing Directors” (as hereinafter defined)Committee, including in electronic form) to Participants at least annually which shall set forth the contributions made by the Participant to the Plan, the Purchase Price of any Shares purchased with accumulated funds, the number of Shares purchased, and any payroll deduction amounts remaining in the Participant’s notional account.
Section 17. Designation of Beneficiary. If permitted by the Committee, a Participant may file, on forms supplied by the Committee, a written designation of beneficiary who, in the event of the Corporation by at least a two-thirds vote (i) have expressly approved in advanceParticipant’s death, is to receive any Shares from the acquisition of the outstanding shares of Voting Stock that caused such Interested Person to become an Interested Person,Participant’s ASPP Share Account or (ii) have expressly approved such Business Combination either in advance of or subsequent to such Interested Person’s having become an Interested Person; or(b) the cash or fair market value (as determined by at least two-thirds of the Continuing Directors) of the property, securities or “Other Consideration to be Received” (as hereinafter defined) per share by holders of Voting Stock of the Corporationany payroll deduction amounts remaining in the Business Combination is not less thanParticipant’s notional account.
Section 18. Adjustments Upon Changes in Capitalization; Dissolution or Liquidation; Corporate Transactions.
(a) Adjustments. In the
“Fair Price” (as hereinafter defined) paid by the Interested Person in acquiringevent that any
of its holdings of the Corporation’s Voting Stock.Section 2.Definitions. Certain words and terms as used in this Article TWELFTH shall have the meanings given to them by the definitions and descriptions in this Section.
2.1.Business Combination. The term “Business Combination” shall mean (a) any merger or consolidation of the Corporation or a subsidiary of the Corporation with or into an Interested Person, (b) any sale, lease, exchange, transferdividend or other disposition, including without limitation, a mortgage or any other
security device,distribution (whether in the form of all or any “Substantial Part” (as hereinafter defined) of the assets either of the Corporation (including without limitation, any voting securities of a subsidiary) or of a subsidiary of the Corporation to an Interested Person, (c) any merger or consolidation of an Interested Person with or into the Corporation or a subsidiary of the Corporation, (d) any sale, lease, exchange, transfercash, Shares, or other disposition, including without limitation, a mortgageproperty), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or other security device,exchange of allShares or any Substantial Part of the assets of an Interested Person to the Corporation or a subsidiary of the Corporation, (e) the issuance or transfer by the Corporation or any subsidiary of anyother securities of the CorporationCompany, or a subsidiaryother change in the Company’s structure affecting the Shares occurs, then in order to prevent dilution or enlargement of the Corporationbenefits or potential benefits intended to an Interested Person, (f) any reclassificationbe made available under the Plan, the Committee will, in such manner as it deems equitable, adjust the number of securities, recapitalizationShares and class of Shares that may be delivered under the Plan, the Purchase Price per Share and the number of Shares covered by each outstanding option under the Plan, and the numerical limits of Section 7 and Section 13.
(b) Dissolution or other comparable transaction involvingLiquidation. Unless otherwise determined by the
Corporation that would haveCommittee, in the
effectevent of
increasing the Voting power of any Interested Person with respect to Voting Stocka proposed dissolution or liquidation of the
Corporation,Company, any Offering Period then in progress will be shortened by setting a new Purchase Date and
(g) any agreement, contractthe Offering Period will end immediately prior to the proposed dissolution or
other arrangement providing for any of the transactions described in this definition of Business Combination.2.2.Interested Person.liquidation. The term “Interested Person” shall mean and include any individual, corporation, partnership or other person or entity which, together with its “Affiliates” and “Associates” (as defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934 as in effect atnew Purchase Date will be before the date of the adoptionCompany’s proposed dissolution or liquidation. Before the new Purchase Date, the Committee will provide each Participant with written notice, which may be electronic, of this Article TWELFTHthe new Purchase Date and that the Participant’s option will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering in accordance with Section 10 (or deemed to have withdrawn in accordance with Section 11).
(c) Corporate Transaction. In the event of a Corporate Transaction, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a parent or Subsidiary of such successor corporation. If the successor corporation refuses to assume or substitute the option, the Offering Period with respect to which the option relates will be shortened by setting a new Purchase Date on which the Offering Period will end. The new Purchase Date will occur before the date of the Corporate Transaction. Prior to the new Purchase Date, the Committee will provide each Participant with written notice, which may be
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electronic, of the new Purchase Date and that the Participant’s option will be exercised automatically on such date, unless before such date, the Participant has withdrawn (or, pursuant to Section 11, been deemed to have withdrawn) from the Offering in accordance with Section 10. Notwithstanding the foregoing, in the event of a Corporate Transaction, the Committee may also elect to terminate all outstanding Offering Periods in accordance with Section 19(i).
Section 19. General Provisions.
(a) Equal Rights and Privileges under the 423 Component. Notwithstanding any provision of the Plan to the contrary and in accordance with Section 423 of the Code, all Eligible Employees who are granted options under the 423 Component shall have the same rights and privileges.
(b) No Right to Continued Service. Neither the Plan nor any compensation paid hereunder will confer on any Participant the right to continue as an Employee or in any other capacity.
(c) Rights as Stockholder. A Participant will become a stockholder with respect to the Shares that are purchased pursuant to options granted under the Plan when the Shares are transferred to the Participant or, if applicable, to the Participant’s ASPP Share Account. A Participant will have no rights as a stockholder with respect to Shares for which an election to participate in an Offering Period has been made until such Participant becomes a stockholder as provided herein.
(d) Successors and Assigns. The Plan shall be binding on the Company and its successors and assigns.
(e) Entire Plan. This Plan constitutes the entire plan with respect to the subject matter hereof and supersedes all prior plans with respect to the subject matter hereof.
(f) Compliance with Law. The obligations of the Company with respect to payments under the Plan are subject to compliance with all applicable laws and regulations. Shares shall not be issued with respect to an option granted under the Plan unless the exercise of such option and the issuance and delivery of the Shares pursuant thereto shall comply with all applicable provisions of law, including, without limitation, the Securities Act, the Exchange Act, and the requirements of any stock exchange upon which the Shares may then be listed.
(g) Disqualifying Dispositions Under the 423 Component. Each Participant shall give the Company prompt written notice of any disposition or other transfer of Shares acquired pursuant to the exercise of an option acquired under the 423 Component, if such disposition or transfer is made within two years after the Offering Date or within one year after the Purchase Date.
(h) Term of Plan. The Plan shall become effective on the Effective Date and, unless terminated earlier pursuant to Section 19(i), shall have a term of ten years.
(i) Amendment or Termination. The Committee may, in its sole discretion, amend, suspend or terminate the Plan at any time and for any reason. If the Plan is terminated, the Committee may elect to terminate all outstanding Offering Periods either immediately or once Shares have been purchased on the next Purchase Date or permit Offering Periods to expire in accordance with their terms (and subject to any adjustment in accordance with Section 18). If any Offering Period is terminated before its scheduled expiration, all amounts that have not been used to purchase Shares will be returned to Participants (without interest, except as otherwise required by law) as soon as administratively practicable.
(j) Applicable Law. The laws of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of the Plan, without regard to such state’s conflict of law rules.
(k) Stockholder Approval. The Plan will be subject to approval by the stockholders of the Corporation), “Beneficially Owns” (as defined in Rule 13d-3Company within twelve (12) months before or after the date the Plan is adopted by the Board.
(l) Section 423 Component Tax Treatment. The 423 Component is intended to qualify as an “employee stock purchase plan” under Section 423 of the
General RulesCode, and
Regulations under the Securities Exchange Act of 1934 as in effect at the dateany provision of the
adoption of this Article TWELFTH by the stockholdersPlan that is inconsistent with Section 423 of the
Corporation) in the aggregate 20 percent or moreCode shall be reformed to comply with Section 423 of the
outstanding Voting Stock of the Corporation, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. Without limitation, any share of Voting Stock of the Corporation that any Interested Person has the right to acquire at any time (notwithstanding that Rule 13d-3 deems such shares to be beneficially owned only if such right may be exercised within 60 days) pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed to be Beneficially Owned by the Interested Person and to be outstanding for purposes of this definition. An Interested Person shall be deemed to have acquired a share of the Voting Stock of the Corporation at the time when such Interested Person became the Beneficial Owner thereof.Code. With respect to the
shares owned by Affiliates, Associates or other persons whose ownership is attributed to an Interested Person under the foregoing definition of Interested Person, if the price paid by such Interested Person for such shares is not determinable by two-thirds of the Continuing Directors, the price so paid shall be deemed423 Component, all options are intended to be
treated as “statutory stock options” within the
highermeaning of
(a)Treasury Regulation §1.409A-1(b)(5)(ii), and the
price paid uponPlan and the
acquisition thereof by the Affiliate, Associate or other person or (b) the market price of the shares in question at the time when the Interested Person became the Beneficial Owner thereof.2.3Voting Stock. The term “Voting Stock” shall mean all of the outstanding shares of Common Stock of the Corporationoptions will be interpreted and any outstanding shares of Preferred Stock entitled to vote on each matter on which the holders of record of Common Stock shall be entitled to vote, and each reference to a proportion of shares of Voting Stock shall refer to such proportion of the votes entitled to be cast by such shares.
2.4Continuing Director. The term “Continuing Director” shall mean a Director who was a member of the Board of Directors of the Corporation immediately prioradministered accordingly. Notwithstanding anything to the time that the Interested Person involved in a Business Combination became an Interested Person, or a Director who was elected or appointed to fill a vacancy after the date the Interested Person became an Interested Person by a majority of the then-current Continuing Directors.
2.5Fair Price. The term “Fair Price” shall mean the following: If there is only one class of capital stock of the Corporation issued and outstanding, the Fair Price shall mean the highest price that can be determined by a majority of the Continuing Directors to have been paid at any time by the Interested Person for any share or shares of that class of capital stock. If there is more than one class of capital stock of the Corporation issued and outstanding, the Fair Price shall mean with respect to each class and series of capital stock of the Corporation, the amount determined by a majority of the Continuing Directors to be the highest per share price equivalent of the highest price that can be determined to have been paid at any time by the Interested Person for any share or shares of any class or series of capital stock of the Corporation. In determining the Fair Price, all purchases by the Interested Person shall be taken into account regardless of whether the shares were purchased before or after the Interested Person became an Interested Person. Also,
the Fair Price shall include any brokerage commissions, transfer taxes and soliciting dealers’ fees paid by the Interested Person with respect to the shares of capital stock of the Corporation acquired by the Interested Person. In the case of any Business Combination with an Interested Person, a majority of the Continuing Directors shall determine the Fair Price for each class and series of the capital stock of the Corporation. The Fair Price shall also include interest compounded annually from the date an Interested Person became an Interested Person through the date the Business Combination is consummated at the publicly announced base rate of interest of Morgan Guaranty Trust Company of New York less the aggregate amount of any cash dividends paid, and the fair market value of any dividends paid in other than cash, on each share of capital stockcontrary in the same time period, in an amount up to but not exceeding the amount of interest so payable per share of capital stock.
2.6.Substantial Part. The term “Substantial Part” shall mean more than 20 percent of the fair market value as determined by two-thirds of the Continuing Directors of the total consolidated assets of the Corporation and its subsidiaries taken as a whole as of the end of its most recent fiscal year ended prior to the time the determination is being made.
2.7.Other Consideration to be Received. The term “Other Consideration to be Received” shall include, without limitation, Common Stock or other capital stock of the Corporation retained by its existing stockholders other than Interested Persons or other parties to such Business Combination in the event of a Business Combination in which the Corporation is the surviving corporation.
Section 3.Determinations by the Continuing Directors. In making any determinations, the Continuing Directors may engage such persons, including investment banking firms and the independent accountants who have reported on the most recent financial statements of the Corporation, and utilize employees and agents of the Corporation, who will, in the judgment of the Continuing Directors, be of assistance to the Continuing Directors. Any determinations made by the Continuing Directors, acting in good faith on the basis of such information and assistance as was then reasonably available for such purposes, shall be conclusive and binding upon the Corporation and its stockholders, including any Interested Person.
ELEVENTH.Section 2.Amendments Generally. Subject to the provisions of Section 1 of this Article ELEVENTH, tThe Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.
ADMITTANCE SLIP
2016 ANNUAL MEETING OF STOCKHOLDERS
Date, Time and Place of Meeting:
| | |
Date:
| | Thursday, May 19, 2016 |
| |
Time:
| | 8:30 a.m., Eastern Time |
| |
Place:
| | Three Limited Parkway |
| | Columbus, Ohio 43230 |
Attending the Meeting:
Stockholders who plan to attend the meeting in person must bring this admittance slip and a photo identification to gain access. Because of necessary security precautions, bags, purses and briefcases may be subject to inspection. To speed the admissions process, stockholders are encouraged to bring only essential items. Cameras, camcorders or videotaping equipment are not allowed. Photographs or videos taken byPlan, neither the Company atnor the meeting may be used by the Company. By attending, you waive any claim or rights to these photographs.
For more information about attending the annual meeting, please visit the website atwww.lb.com or contact Investor Relations at (614) 415-7585.
| | |
L BRANDS, INC.
ATTENTION: INVESTOR RELATIONS
P.O. BOX 16000
THREE LIMITED PARKWAY
COLUMBUS, OH 43230
| | VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.
Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
TABLE OF CONTENTS
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The Board of Directors recommends you vote FOR |
the following: | | | | | | |
| | | |
1. Election of Directors
| | For | | Against | | Abstain |
| | | |
Nominees
| | | | | | |
| | | |
01 Dennis S. Hersch
| | ¨ | | ¨ | | ¨ |
| | | |
02 David T. Kollat
| | ¨ | | ¨ | | ¨ |
| | | |
03 Leslie H. Wexner
| | ¨ | | ¨ | | ¨ |
|
The Board of Directors recommends you vote FOR |
the following proposals: |
| | | |
2. Ratification of the appointment of
| | For | | Against | | Abstain |
independent registered public
| | | | | | |
accountants
| | ¨ | | ¨ | | ¨ |
| | | |
3. Proposal to amend the certificate of
| | | | | | |
incorporation to remove supermajority
| | | | | | |
voting requirements
| | ¨ | | ¨ | | ¨ |
| | | |
4. Advisory vote to approve named
| | | | | | |
executive officer compensation
| | ¨ | | ¨ | | ¨ |
| | | |
For address change/comments, mark here.
(see reverse for instructions)
| | ¨ | | | | |
| | | | |
| | | | Yes | | No | | |
| | | |
Please indicate if you plan to attend this meeting | | ¨ | | ¨ | | |
| | | | | | |
|
The Board of Directors recommends you vote AGAINST |
the following proposal: | | | | | | |
| | For | | Against | | Abstain |
| | | |
5. Stockholder proposal on proxy access
| | ¨ | | ¨ | | ¨ |
| | | |
Note:Such other business as may | | | | | | |
properly come before the
| | | | | | |
meeting or any
| | | | | | |
adjournment thereof.
| | | | | | |
| | |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
| | |
| | |
Signature [PLEASE SIGN WITHIN BOX] | | Date |
| | |
Signature [Joint Owners]
| | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The COMBINED Annual Report
& Proxy Statement is/are available atwww.proxyvote.com.
This Proxy is SolicitedCommittee, nor any person acting on behalf of the BoardCompany or the Committee, will be liable to any Participant or other person by reason of Directorsany acceleration of income, any additional tax, or any other tax or liability asserted by reason of the failure of the Plan or any option to be exempt from or satisfy the requirements of Section 423 or 409A of the Code.
(m) Withholding. To the extent required by applicable Federal, state, local or foreign law, a Participant must make arrangements satisfactory to the Company for the
Annual Meetingpayment of
Stockholderson May 19, 2016 8:30 AM
The undersigned hereby appoints Leslie H. Wexner and Stuart B. Burgdoerfer, and each of them, proxies,any withholding or similar tax obligations that arise in connection with full power of substitution,the Plan. At any time, the Company or any Subsidiary or Affiliate may, but will not be obligated to, votewithhold from a Participant’s compensation the amount necessary for the undersigned all sharesCompany or any Subsidiary or Affiliate to meet applicable withholding obligations, including any withholding required to make available to the Company or any Subsidiary or Affiliate any tax deductions or benefits attributable to the sale or early disposition of Common StockShares by such Participant. In addition, the Company or any Subsidiary or Affiliate may, but will not be obligated to, withhold from the proceeds of L Brands, Inc.the sale of Shares or any other method of withholding that the Company or any Subsidiary or Affiliate deems appropriate to the extent permitted by, where applicable, Treasury Regulation Section 1.423-2(f). The Company will not be required to issue any Shares under the Plan until such obligations are satisfied.
(n) Severability. If any provision of the Plan shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, and the Plan shall be construed as if such invalid or unenforceable provision were omitted.
(o) Headings. The headings of sections herein are included solely for convenience and shall not affect the meaning of any of the provisions of the Plan.
TABLE OF CONTENTS
Non-GAAP Financial Measure
As used in this proxy statement, adjusted operating income for the Fall 2021 season (i.e., the third and fourth quarters of fiscal year 2021) means the operating income of the Company excluding certain special items and unallocated corporate overhead costs. The HCC Committee used adjusted operating income because it is a performance measure over which the undersigned would be entitledCompany’s executives can have significant impact and is also directly linked to vote if personally present at the Annual MeetingCompany’s long-term growth plan and performance that drive stockholder value. The special item was excluded because it is not indicative of Stockholdersour ongoing operations due to be held on May 19, 2016 at 8:30 a.m., Eastern Time,its size and at any adjournments thereof, uponnature. Corporate overhead costs were excluded because these costs were shared with the matters described Victoria’s Secret business prior to the Separation. Our definition of adjusted operating income may differ from similarly titled measures used by other companies. The table below reconciles the adjusted operating income of the Company for the Fall 2021 season to the Company’s operating income, the most comparable GAAP financial measure.
Reconciliation of Reported Operating Income to Adjusted Operating Incomefor Purposes of Plan (in the accompanying Proxy Statement and upon any other business that may properly come before the meeting or any adjournments thereof.SAID PROXIES ARE DIRECTED TO VOTE AS MARKED ON THE REVERSE SIDE AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THIS MEETING OR ANY ADJOURNMENTS THEREOF.
Address change/comments:
millions) Reported Operating Income | | | $1,288 |
Plus: Write-off of Inventory due to Tornado(1) | | | 9 |
Plus: Unallocated Corporate Overhead Costs(2) | | | 64 |
|
Adjusted Operating Income for Purposes of Plan | | | $ 1,361 |
(1)
| In the fourth quarter of 2021, we recognized a pre-tax loss of $9 million related to the write-off of inventory that was destroyed by a tornado at a vendor's facility. |
(2)
| Unallocated Corporate Overhead Costs include infrastructure and governance functions and other non-recurring items that are deemed to be corporate in nature. |
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)TABLE OF CONTENTS
(Continued and to be signedTABLE OF CONTENTS
on reverse side)
