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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under §240.14a-12
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No fee required.
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Internet
www.proxyvote.com
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By Phone
1-800-690-6903
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By Mail
Completing, dating, signing, and returning your proxy card
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on November 6, 2024:
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The 2024 Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders
to be held on November 6, 2024: |
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The 2024 Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.
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ITEM 1. Election of Directors
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The Board and the Corporate Governance, Nominations and Sustainability Committee believe that the director nominees possess the necessary qualifications and experiences to provide quality advice and counsel to the Company’s management and effectively oversee the business and the long-term interests of stockholders.
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FOR each
Director Nominee |
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ITEM 2. Advisory Vote to Approve Compensation of our Named Executive Officers
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The Company seeks a non-binding advisory vote to approve the compensation of its Named Executive Officers as described in the Compensation Discussion and Analysis and the Compensation Tables in this Proxy Statement. Although the vote is non-binding, the Board values stockholders’ opinions, and the Compensation Committee will take into account the outcome of the advisory vote when making future executive compensation decisions. This advisory vote will serve as an additional tool to guide the Board and the Compensation Committee in continuing to improve the alignment of the Company’s executive compensation program with the interests of Ethan Allen and its stockholders and is consistent with our commitment to high standards of corporate governance and stockholder engagement.
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FOR
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ITEM 3. Ratify the Appointment of CohnReznick LLP as our Independent Registered Public Accounting Firm
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The Audit Committee and the Board believe that the retention of CohnReznick LLP to serve as the independent registered public accounting firm for the 2025 fiscal year is in the best interests of the Company and its stockholders. Stockholders are being asked to ratify the Audit Committee’s appointment of CohnReznick LLP as its independent registered public accounting firm.
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FOR
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Chairperson
of the Board |
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Lead
Independent Director |
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Audit
Committee |
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Compensation
Committee |
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Corporate Governance,
Nominations & Sustainability Committee |
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| | | | | Committee Members | | | | | | | | | | | | | | | | | | ||
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M. Farooq Kathwari
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✓
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Maria Eugenia Casar
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●
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●
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John J. Dooner, Jr.
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✓
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●
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C
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●
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David M. Sable
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●
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●
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C
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Tara I. Stacom
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●
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●
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Cynthia Ekberg Tsai
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C
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●
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●
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Number of meetings held in Fiscal 2024
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5
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4
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4
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•
M. Farooq Kathwari
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•
John J. Dooner, Jr.
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•
Tara I. Stacom
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•
Maria Eugenia Casar
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•
David M. Sable
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•
Cynthia Ekberg Tsai
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M. Farooq
Kathwari |
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Maria
Eugenia Casar |
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John J.
Dooner, Jr. |
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David M.
Sable |
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Tara I.
Stacom |
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Cynthia
Ekberg Tsai |
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| | | | | Knowledge, Skills and Experience | | | | | | | | | | | | | | | | | | | | | ||
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CEO or Senior Executive Level Experience
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✓
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✓
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✓
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✓
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✓
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✓
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Risk Management
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✓
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✓
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✓
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✓
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✓
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✓
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| | | | |
International Experience
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✓
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✓
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✓
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✓
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✓
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| | | | |
Operating Experience
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✓
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✓
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✓
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✓
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✓
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✓
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Retail and Digital Experience
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✓
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| | | | | | | |
✓
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| | | | |
✓
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| | | | |
Finance Experience
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✓
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✓
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| |
✓
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✓
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✓
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| |
✓
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| | | | |
Real Estate Experience
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✓
|
| | | | | | | | | | |
✓
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| | | | |
Marketing and Brand Building Expertise
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✓
|
| | | | |
✓
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✓
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✓
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| |
✓
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| | ||
| | | | |
Cybersecurity Experience
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✓
|
| | | | | | | |
✓
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| | | | |
✓
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| | | | |
ESG Experience
|
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✓
|
| |
✓
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✓
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✓
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✓
|
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✓
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| | | | | Demographics | | | | | | | | | | | | | | | | | | | | | ||
| | | | | Race/Ethnicity | | | | | | | | | | | | | | | | | | | | | ||
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Caucasian / White
|
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✓
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✓
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✓
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✓
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Hispanic / Latin American
|
| | | | |
✓
|
| | | | | | | | | | | | | | ||
| | | | |
South Asian
|
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✓
|
| | | | | | | | | | | | | | | | | ||
| | | | | Gender | | | | | | | | | | | | | | | | | | | | | ||
| | | | |
Male
|
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✓
|
| | | | |
✓
|
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✓
|
| | | | | | | | ||
| | | | |
Female
|
| | | | |
✓
|
| | | | | | | |
✓
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| |
✓
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| | | | | Board Tenure | | | | | | | | | | | | | | | | | | | | | ||
| | | | |
Years
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36
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2
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13
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3
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9
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3
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M. Farooq KathwariENTREPRENURIAL AND DISCIPLINED LEADER
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Mr. Kathwari is the Chairman, President and Chief Executive Officer of Ethan Allen Interiors Inc. He has been President since 1985 and Chairman and Chief Executive Officer since 1988. He holds a Bachelor of Arts in both English Literature and Political Science from Kashmir University and an MBA in International Marketing from New York University. He is also the recipient of three honorary doctorate degrees.
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Director since: 1985
Age: 80
Board Committees:
•
Chairman of the
Board
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| | | | | Specific Qualifications, Attributes, Skills and Experience: | | ||||||
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Mr. Kathwari serves in numerous capacities at several nonprofit organizations. He is an advisory member of the New York Stock Exchange; a director and former chairman of the National Retail Federation; director emeritus and former chairman and president of the American Home Furnishings Alliance; a member of the Board of Advisors of the International Rescue Committee; Chairman Emeritus of Refugees International; a member of the International Advisory Council of the United States Institute of Peace; a member of the Council on Foreign Relations; an Honorary Trustee on the Hebrew Home Board; a director of the Institute for the Study of Diplomacy at Georgetown University; and a member of the advisory board of the Center for Strategic and International Studies.
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Among his recognitions, Mr. Kathwari is a recipient of the 2018 Ellis Island Medal of Honor, has been inducted into the American Furniture Hall of Fame and recipient of the National Retail Federation Gold Medal. He has been recognized as an Outstanding American by Choice by the U.S. government. He has received the Yale School of Management’s Chief Executive Leadership Institute Lifetime of Leadership Award. He has also been recognized by Worth magazine as one of the 50 Best CEOs in the United States. He is the author of Trailblazer: from the Mountains of Kashmir to the Summit of Global Business and Beyond.
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Mr. Kathwari has extensive knowledge of the history of both the Company and the furniture industry as well as extensive experience in growing and managing a business. Mr. Kathwari possesses insight into retailing, marketing, manufacturing, finance, and strategic planning. In addition, his work with both for-profit and not-for-profit organizations has given him perspectives from other industries, which have proven valuable throughout his service to the Company.
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Maria Eugenia CasarRISK MANAGEMENT, ESG AND HUMAN RESOURCES LEADER
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Ms. Casar currently serves on the Board of Grupo Bimbo and Save the Children Mexico as well as previously served on the Advisory Board of Sigma Alimentos and as a member of the Global Future Council of International Governance and Sustainable Development from 2015 until 2018.
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Independent
Director since: 2022
Age: 65
Board Committees:
•
Audit
•
Corporate
Governance, Nominations and Sustainability
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| | | | | Specific Qualifications, Attributes, Skills and Experience: | | ||||||
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Ms. Casar has held various high level executive positions within the United Nations (“UN”), the government of Mexico and other financial institutions. During her career at the UN, she served as Under-Secretary-General from 2014 to 2016 and as CFO and Controller between 2011 and 2014. Additional roles within the UN included the post of Associate Administrator of the UN Development Programme and Deputy Executive Director of the World Food Programme. Between 2006 and 2009, Ms. Casar worked for the government of Mexico, including senior leadership positions of National Treasurer and Executive Director for the Mexican Agency for International Cooperation. Prior to that, she held leadership roles in prominent organizations, including Banco Nacional de Servicios Financieros (BANSEFI). Ms. Casar is proficient in Spanish, English, French and Italian and holds an MBA and a degree in public accounting, with honors, from the Instituto Tecnológico Autónomo de México (ITAM). Ms. Casar brings to the Board her strategic financial and risk management, key ESG perspective, sound human resources leadership expertise and in-depth knowledge of managing business transformation initiatives.
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John J. Dooner, Jr.SENIOR EXECUTIVE AND STRATEGIC LEADER
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Mr. Dooner founded The Dooner Group, a marketing communication consultancy in 2012, and serves as Chairman Emeritus of McCann Worldgroup, a company he formed in 1997, and of which he had been Chief Executive Officer from its founding until 2011.
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Lead Independent
Director Independent
Director since: 2011
Age: 76
Board Committees:
•
Compensation – Chair
•
Audit
•
Corporate
Governance, Nominations and Sustainability |
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| | | | | Specific Qualifications, Attributes, Skills and Experience: | | ||||||
| | | | |
Under Mr. Dooner’s leadership, McCann grew to be one of the world’s largest marketing communications organizations, with operations in over 125 countries with a client roster that includes preeminent global marketers and many of the world’s most famous brands. Prior to assuming that position, Mr. Dooner was Chief Executive Officer of McCann Erickson Worldwide, a post he assumed in 1992. Mr. Dooner serves on several not-for-profit organizations including as Chairman of St. Thomas University based in Miami, Florida. He is Past Chairman Board of Trustees and Past Brand Platform Chairman of United Way Worldwide based in Washington, DC. In April 2019, Mr. Dooner was inducted into the American Advertising Federation Hall of Fame. In May 2019 he received an honorary doctorate from St. Thomas University. Mr. Dooner brings executive leadership, financial acumen, advertising and branding expertise to the Board.
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| | | | | David M. Sable MARKETING AND DIGITAL LEADER | | ||||||
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Mr. Sable is Vice Chair at Stagwell Global and Co-Founder and Partner of DoAble, a marketing consultancy firm focused on branding, positioning and big ideas. As current Senior Advisor to WPP plc (“WPP”), a multinational communications, advertising, public relations, technology, and commerce holding company, he mentors and consults across the company. Previously he was Chairman of VMLY&R from 2011 to 2019 where he helped them to a top-five global creative firm at Cannes, developed new resources and practices, expanded their global footprint, and created a successful agency that continues to be an industry leader today.
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Independent
Director since: 2021 Age: 71
Board Committees:
•
Corporate
Governance, Nominations and Sustainability – Chair
•
Audit
•
Compensation
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| | | | | Specific Qualifications, Attributes, Skills and Experience: | | ||||||
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Mr. Sable has served as a board member and member of the Audit, Compensation and Nominating Committees of the public company American Eagle Outfitters (NYSE: AEO) since 2013. Mr. Sable previously served at Wunderman, Inc., a leading customer relationship manager and digital unit of WPP, as Vice Chairman and Chief Operating Officer, from August 2000 to February 2011. Mr. Sable was a Founding Partner and served as Executive Vice President and Chief Marketing Officer of Genesis Direct, Inc., a pioneer digital omni-channel retailer, from June 1996 to September 2000. Mr. Sable attended New York University and Hunter College in New York. In 2013, Fast Company named Mr. Sable one of the 10 Most Generous Marketing Geniuses. He currently serves on the Board of Directors of the International Special Olympics, as well as on the Executive Board of UNCF and he was Executive Producer on MTV’s highly acclaimed REBEL MUSIC series. With more than 30 years of experience in digital and marketing communications, Mr. Sable brings to the Board his strategic insight and ability to connect talent across marketing disciplines and geographies. The Board also benefits from his extensive involvement with community programs.
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| | | | | Tara I. Stacom REAL ESTATE, FINANCIAL AND RISK MANAGEMENT LEADER | | ||||||
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Ms. Stacom is an Executive Vice Chairman of Cushman & Wakefield since 2013, a worldwide commercial real estate firm with 50,000 employees. During her 40-year career, Ms. Stacom has been responsible for executing in excess of 60 million square feet and some of the largest and most complex leasing, sales, and corporate finance real estate transactions.
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Independent
Director since: 2015
Age: 66
Board Committees:
•
Audit
•
Corporate
Governance, Nominations and Sustainability
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| | | | | Specific Qualifications, Attributes, Skills and Experience: | | ||||||
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Ms. Stacom earned her Bachelor of Science degree in Finance at Lehigh University where she later served on the Board of Trustees. She is a director of the Realty Foundation of New York and a member of the Real Estate Board of New York having served on numerous committees including Ethics and the Commercial Brokerage Division. In January 2022, she was appointed to the Board of Directors of Inveniam Capital Partners, a privately-held fintech company. Ms. Stacom is a “Director’s Circle Member” of Girls, Inc., a board member of Right to Dream and recipient of Crain’s New York Business 100 Most Influential Women in New York City. She was awarded “Woman of the Year” of the New York Executives in Real Estate (WX), and Real Estate New York and Real Estate Forum’s Women of Influence. She received Northwood University’s Distinguished Women’s Award in recognition of the enormous contribution she has made to communities, businesses, volunteer agencies, and public and private sector services worldwide. Ms. Stacom was honored with the Real Estate Board of New York’s highest achievement, the 2011 Most Ingenious Deal of the Year (First Place Henry Hart Rice Award) for the leasing of One World Trade Center. Ms. Stacom brings extensive knowledge of commercial real estate, risk management and financial analysis to the Board.
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| | | | | Cynthia Ekberg Tsai FINANCIAL, TECHNOLOGY AND BUSINESS DEVELOPMENT LEADER | | ||||||
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Ms. Ekberg Tsai brings more than 40 years of experience in global finance and technology. Ms. Tsai is currently CEO of Healthquest, where she specializes in providing strategic introductions and advice to rising executives. She was the founder of Tana Systems, a global software and IT company and their former CEO until November 2023. Ms. Tsai spent 16 years on Wall Street as a Vice President with Merrill Lynch and Kidder Peabody.
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Independent
Director since: 2021 Age: 68
Board Committees:
•
Audit – Chair
•
Compensation
•
Corporate
Governance, Nominations and Sustainability
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| | | | | Specific Qualifications, Attributes, Skills and Experience: | | ||||||
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Ms. Tsai is the former Founder and CEO of HealthExpo, the largest consumer healthcare event in the U.S., where she grew the enterprise from concept to execution. Previously, Ms. Tsai was a General Partner in MassTech Ventures, a multi-million-dollar equity fund focused on technology development at Massachusetts Institute of Technology. Ms. Tsai was elected in 2024 to the Board of Directors of Solidion Technology, Inc., which develops and manufactures next-generation batteries for energy storage systems and electric vehicles. She also serves as Chairman of the Board on the Montana Bioscience Alliance and is a board member of the Jefferson Foundation Awards, the Prix Galien Foundation, Certus Critical Care Inc., VitaNay Inc. and Titin KM Biomedical. The Harvard Business School Alumni Chapter in New York recognized Ms. Tsai with an Early-Stage Honor Roll Award for Entrepreneurship and in 2004, she also received a “Leading Woman Entrepreneur of the World” Award from the Star Foundation. Ms. Tsai earned a Bachelor of Arts in Psychology from the University of Missouri and brings to the Board her strategic thinking and unique hands-on experience in technology, financial analysis, including investment banking, business development and brand building.
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Name
|
| |
Fees Earned or
Paid in Cash |
| |
Option
Awards (1)(2) |
| |
Total
|
| |||||||||
| | | | | Maria Eugenia Casar | | | | $ | 60,000 | | | | | $ | 24,791 | | | | | $ | 84,791 | | |
| | | | | John J. Dooner, Jr. | | | | $ | 76,000 | | | | | $ | 24,791 | | | | | $ | 100,791 | | |
| | | | | David M. Sable | | | | $ | 68,000 | | | | | $ | 24,791 | | | | | $ | 92,791 | | |
| | | | | Tara I. Stacom | | | | $ | 60,000 | | | | | $ | 24,791 | | | | | $ | 84,791 | | |
| | | | | Cynthia Ekberg Tsai | | | | $ | 76,000 | | | | | $ | 24,791 | | | | | $ | 100,791 | | |
| | | | |
Name of Beneficial Owners
|
| |
Shares Owned
Directly or Indirectly (#) |
| |
Shares Individuals
Have Rights to Acquire within 60 Days (#) |
| |
Total Shares
Benefincially Owned (#) |
| ||||||
| | | | | M. Farooq Kathwari (1) | | | | | 2,565,510 | | | | | | — | | | |
2,565,510
|
|
| | | | | John J. Dooner, Jr. | | | | | 11,100 | | | | | | 33,592 | | | |
44,692
|
|
| | | | | Tara I. Stacom | | | | | 6,300 | | | | | | 30,111 | | | |
36,411
|
|
| | | | | Gina Casar | | | | | — | | | | | | 3,619 | | | |
3,619
|
|
| | | | | David M. Sable | | | | | — | | | | | | 3,619 | | | |
3,619
|
|
| | | | | Cynthia Ekberg Tsai | | | | | — | | | | | | 3,619 | | | |
3,619
|
|
| | | | | Amy Franks | | | | | 3,446 | | | | | | — | | | |
3,446
|
|
| | | | | Matthew J. McNulty | | | | | 3,197 | | | | | | — | | | |
3,197
|
|
| | | | | Rebecca L. Thompson | | | | | 530 | | | | | | — | | | |
530
|
|
| | | | |
All Directors and Executive Officers as a Group (9 persons)
|
| | | | 2,590,083 | | | | | | 74,560 | | | |
2,664,643
|
|
| | | | |
Name of Beneficial Owner
|
| | | | |
Amount and
Nature of Beneficial Ownership |
| |
Common Stock
Percentage Ownership |
| ||||||
| | | | | BlackRock, Inc. | | |
(1)
|
| | | | 4,063,386 | | | | | | 16.0% | | |
| | | | | Dimensional Fund Advisors LP | | |
(2)
|
| | | | 2,062,972 | | | | | | 8.1% | | |
| | | | | First Trust Advisors L.P. | | |
(3)
|
| | | | 1,762,045 | | | | | | 6.9% | | |
| | | | | The Vanguard Group | | |
(4)
|
| | | | 1,615,250 | | | | | | 6.4% | | |
| | | | |
STATEMENT OF OPERATIONS DATA
|
| |||||||||
| | | | |
Fiscal Year Ended June 30,
|
| |
2024
|
| |
2023
|
| |
2022
|
|
| | | | | Net sales | | |
$646,221
|
| |
$791,382
|
| |
$817,762
|
|
| | | | | Gross margin | | |
60.8%
|
| |
60.7%
|
| |
59.3%
|
|
| | | | | Adjusted operating income (1) | | |
$77,914
|
| |
$133,514
|
| |
$134,240
|
|
| | | | | Adjusted net income (1) | | |
$63,758
|
| |
$103,057
|
| |
$100,277
|
|
| | | | | Adjusted diluted EPS (1) | | |
$2.49
|
| |
$4.03
|
| |
$3.93
|
|
| | | | | KEY METRICS | | |
|
| |
|
| |
|
|
| | | | | Adjusted return on equity (1) | | |
13.4%
|
| |
23.5%
|
| |
26.4%
|
|
| | | | | Cash flows from operating activities | | |
$80,195
|
| |
$100,664
|
| |
$69,356
|
|
| | | | | Cash and investments | | |
$195,801
|
| |
$172,707
|
| |
$121,118
|
|
| | | | | Current ratio | | |
2.16
|
| |
2.20
|
| |
1.61
|
|
| | | | | Long-term debt to equity ratio | | |
0.0%
|
| |
0.0%
|
| |
0.0%
|
|
| | | | | Cash dividends paid | | |
$50,269
|
| |
$46,357
|
| |
$48,257
|
|
| | | | | Dividend yield | | |
5.6%
|
| |
5.1%
|
| |
6.3%
|
|
| | | | |
Compensation Risk Considerations
|
| |||
| | | | |
Pay Mix
|
| |
Compensation mix of base salary and short-term and long-term incentives provides compensation opportunities measured by a variety of time horizons to balance our short-term and long-term strategic goals.
|
|
| | | | |
Performance Metrics
|
| |
A variety of distinct performance metrics are used in both the short-term and long-term incentive plans. This multiple-metric approach to performance metrics encourages focus on sustained and holistic overall Company performance.
|
|
| | | | |
Performance Goals
|
| |
Goals are approved by our Compensation Committee and consider historical performance, current strategic initiatives, and the macroeconomic environment. In addition, short-term and long-term incentive compensation programs are designed with payout ranges above and below target levels and within a range that support our pay for performance philosophy.
|
|
| | | | |
Equity Incentives
|
| |
Equity incentive programs and stock ownership guidelines are designed to align management and stockholder interests by providing vehicles for executive officers to accumulate and maintain an ownership position in the Company.
|
|
| | | | |
Stock Ownership Guidelines
|
| |
We have stock ownership guidelines for executive officers and directors, including a one-year security holding period requirement, that are intended to align further the interest of our named executive officers with those of our stockholders. To facilitate an alignment between the interests of the executive officers and directors with those of long-term shareholders, we maintain and enforce minimum share ownership rules. Directors and executive officers should acquire over five years and maintain ownership of an amount of Company stock with a value equal to a multiple of the base salary (three times annual cash compensation for directors, five times salary for the Chief Executive Officer, and two times salary for the other executive officers). Pledged shares are not considered when determining compliance with these guidelines. Unearned performance-based stock awards and unvested stock options are excluded from the determination of an executive officer or director’s level of share ownership.
|
|
| | | | |
Anti-Hedging and Anti-Pledging Policies
|
| |
Directors and executive officers are restricted from engaging in short sales, equity derivatives, and hedging their Company stock, whether or not involving trading on inside information. In addition, the Company prohibits employees and directors from purchasing Company securities on margin or holding Company securities in a margin account.
|
|
| | | | |
Compensation Risk Considerations
|
| |||
| | | | |
Insider Trading Policy
|
| |
We have an Insider Trading Policy that requires our Directors, NEOs and other senior associates to pre-clear transactions in our common stock with the Company’s finance department. Trading is permitted only during specified quarterly Company open trading periods. An executive bears the full responsibility if he or she violates the Company policy by permitting shares to be bought or sold without pre-clearance or when trading is restricted. We believe these policies further align insiders’ interests with those of our stockholders.
|
|
| | | | |
Policy Governing the Recovery of Erroneously Awarded Compensation
|
| |
We have a robust recoupment (or “claw-back”) policy that governs the recovery of erroneously awarded compensation to our executive officers. The policy provides that if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, including the corrections of errors, the Compensation Committee may seek reimbursement of any cash- or equity-based bonus/other incentive compensation (including vested and unvested equity) paid or awarded to the executive officer or effect cancellation of previously-granted equity awards to the extent the compensation was based on erroneous financial data and exceeded what would have been paid to the executive officer under the restatement.
|
|
| | | | |
Fiscal 2024 Peer Group
|
| ||||||
| | | | | Arhaus, Inc. | | | HNI Corporation | | | MillerKnoll, Inc. | |
| | | | | Bassett Furniture Industries, Inc. | | | Hooker Furniture Corporation | | | Sleep Number Corporation | |
| | | | | Flexsteel Industries, Inc. | | | Interface, Inc. | | | Steelcase Inc. | |
| | | | | Green Brick Partners, Inc. | | | Kirkland’s, Inc. | | | The Lovesac Co. | |
| | | | | Haverty Furniture Companies, Inc. | | | La-Z-Boy Incorporated | | | | |
| | | | Element | | |
Key
Characteristics |
| |
Link to
Shareholder Value |
| |
How we
Determine Amount |
| |
Key Fiscal 2024
Decisions |
|
| |
Fixed
|
| |
Base Salary
|
| | Fixed compensation component payable in cash. Reviewed annually and adjusted when appropriate. | | | A means to attract and retain talented executives capable of driving superior performance. | | | Consider individual contributions to business outcomes, the scope and complexity of each role, future potential, market data, and internal pay equity. | | | The Compensation Committee approved base salary increases for select NEOs during fiscal 2024 to remain market competitive. | |
|
Service-Based Restricted Stock Unit Awards
|
| |
Fixed compensation component payable in stock. Reviewed annually and granted when appropriate.
|
| |
A means to retain talented executives capable of driving strong performance.
|
| |
Consider individual contributions to business outcomes, the scope and complexity of each role, future potential, market data, and internal pay equity.
|
| |
The Compensation Committee awarded service-based restricted stock units that vest ratably over three years to NEO’s during fiscal 2024.
|
|
| |
Performance-
Based |
| |
Annual Incentive Program
|
| | Variable compensation component payable in cash based on performance against annually established financial goals. | | | Incentive targets are tied to achievement of key annual financial measures. | | | Incentive award levels are based on the achievement of financial metrics established by the Compensation Committee. The dollar amount of each award level target was based on each NEO’s responsibilities, historical incentive amounts, retention considerations and market data. Net sales and adjusted operating income were used to determine the payout of the awards. | | | For fiscal 2024, the Compensation Committee selected two performance metrics: net sales (weighted 60% of target) and adjusted operating income (weighted 40% of target). The NEOs have the opportunity to earn between 60% (threshold) and 140% (maximum) based on the achievement of such targets. | |
|
Performance-Based Unit Awards (PSUs)
|
| |
PSUs cliff vest after a three-year performance period and payouts are based on Company performance against pre-established financial goals and other performance metrics.
|
| |
PSUs recognize our executive officers for achieving superior long-term relative performance. Financial metrics are based on sales growth and return on equity. An additional TSR performance metric was also used.
|
| |
Grant award levels based on individual contributions to business outcomes, potential future contributions, historical grant amounts, retention considerations and market data. Actual award payout is based on performance against pre-established goals over a three-year performance period.
|
| |
The Compensation Committee approved PSU grants to NEOs during fiscal 2024 with three performance metrics that were based on net sales, return on equity and a TSR performance metric.
|
|
|
|
| |
|
|
| | | | |
Name
|
| |
Fiscal 2024
Salary ($) (1) |
| |
Fiscal 2023
Salary ($) |
| |
% Change
|
|
| | | | | M. Farooq Kathwari | | |
$1,150,050
|
| |
$1,150,050
|
| |
0.0%
|
|
| | | | | Matthew J. McNulty | | |
$410,000
|
| |
$375,000
|
| |
9.3%
|
|
| | | | | Amy Franks | | |
$500,000
|
| |
$410,000
|
| |
22.0%
|
|
| | | | | Rebecca L. Thompson (2) | | |
$350,000
|
| |
$300,000
|
| |
16.7%
|
|
| | | | |
($ in millions)
Performance Level |
| |
Net
Sales $ |
| |
Adjusted
Operating Income $ (1) |
|
| | | | | Maximum | | |
$791.4
|
| |
$133.5
|
|
| | | | | Target | | |
$725.0
|
| |
$85.3
|
|
| | | | | Threshold | | |
$700.0
|
| |
$55.1
|
|
| | | | | Actual | | |
$646.2
|
| |
$77.9
|
|
| | | | | Individual Metric Payout Achieved | | |
0%
|
| |
90%
|
|
| | | | | Individual Metric Weight | | |
60%
|
| |
40%
|
|
| | | | |
Overall Payout (as percent of Target)
|
| | | | |
36%
|
|
| | | | |
Name (1)
|
| |
Target Annual
Incentive ($) |
| |
Target
Incentive (% of base salary) |
| |
Level Achieved
(% of target performance) |
| |
Actual Annual
Incentive Payout ($) |
| |
Incentive
Payout (% of base salary) |
|
| | | | | M. Farooq Kathwari | | |
$1,150,000
|
| |
100%
|
| |
36%
|
| |
$414,000
|
| |
36%
|
|
| | | | | Matthew J. McNulty | | |
$102,500
|
| |
25%
|
| |
36%
|
| |
$36,900
|
| |
9%
|
|
| | | | | Amy Franks | | |
$150,000
|
| |
30%
|
| |
36%
|
| |
$54,000
|
| |
11%
|
|
| | | | |
Payout Metric (Total Weight)
|
| |
Fiscal 2024
Weight (50%) |
| |
Fiscal 2025
Weight (30%) |
| |
Fiscal 2026
Weight (20%) |
|
| | | | |
Sales Growth (40%)
|
| |
20%
|
| |
12%
|
| |
8%
|
|
| |
|
| |
Return on Equity (40%)
|
| |
20%
|
| |
12%
|
| |
8%
|
|
| | | | |
Three-year TSR (20%)
|
| | | | | | | |
20%
|
|
| | | | | | | |
Grant $ Value
|
| |
Units Granted
|
| |
Grant $ Value as a % of
Base Salary |
| |||||||||||||||||||||||||||
| | | | |
Name (1)
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |||||||||
| | | | | M. Farooq Kathwari | | | | $ | 747,489 | | | | | $ | 1,207,516 | | | | | $ | 1,667,487 | | | |
27,103
|
| |
43,783
|
| |
60,461
|
| |
65%
|
| |
105%
|
| |
145%
|
|
| | | | |
Matthew J. McNulty
|
| | | $ | 63,543 | | | | | $ | 102,513 | | | | | $ | 141,456 | | | |
2,304
|
| |
3,717
|
| |
5,129
|
| |
15%
|
| |
25%
|
| |
35%
|
|
| | | | | Amy Franks | | | | $ | 92,999 | | | | | $ | 150,005 | | | | | $ | 206,984 | | | |
3,372
|
| |
5,439
|
| |
7,505
|
| |
19%
|
| |
30%
|
| |
41%
|
|
| | | | |
Fiscal Year 2022 Grant (2022-2024 Performance Period)
|
| ||||||||||||||||||
| | | | | | | |
Target Goals
|
| |
Results
|
| |
Payout as % of Target
|
| |||||||||
| | | | |
($ in millions)
|
| |
Net Sales
|
| |
Return on
Equity |
| |
Net Sales
|
| |
Return on
Equity |
| |
Net Sales
|
| |
Return on
Equity |
|
| | | | | FY 2022 | | |
$712.6
|
| |
18.6%
|
| |
$817.8
|
| |
26.4%
|
| |
125%
|
| |
125%
|
|
| | | | | FY 2023 | | |
$741.1
|
| |
19.5%
|
| |
$791.4
|
| |
23.5%
|
| |
125%
|
| |
125%
|
|
| | | | | FY 2024 | | |
$770.7
|
| |
20.5%
|
| |
$646.2
|
| |
13.4%
|
| |
0%
|
| |
0%
|
|
| | | | |
Name
|
| |
Target
|
| |
Actual Vested (1)
|
| |
% Vested
|
|
| | | | | M. Farooq Kathwari | | |
65,000
|
| |
68,250
|
| |
105%
|
|
| | | | |
Fiscal Year 2023 Grant (2023-2025 Performance Period)
|
| ||||||||||||||||||
| | | | | | | |
Target Goals
|
| |
Results
|
| |
Payout as % of Target
|
| |||||||||
| | | | |
($ in millions)
|
| |
Net Sales
|
| |
Return on
Equity |
| |
Net Sales
|
| |
Return on
Equity |
| |
Net Sales
|
| |
Return on
Equity |
|
| | | | | FY 2023 | | |
$775.0
|
| |
14.4%
|
| |
$791.4
|
| |
23.5%
|
| |
115%
|
| |
129%
|
|
| | | | | FY 2024 | | |
$806.0
|
| |
15.1%
|
| |
$646.2
|
| |
13.4%
|
| |
0%
|
| |
0%
|
|
| | | | | FY 2025 | | |
n/a
|
|
| | | | |
Fiscal Year 2024 Grant (2024-2026 Performance Period)
|
| ||||||||||||||||||
| | | | | | | |
Target Goals
|
| |
Results
|
| |
Payout as % of Target
|
| |||||||||
| | | | |
($ in millions)
|
| |
Net Sales
|
| |
Return on
Equity |
| |
Net Sales
|
| |
Return on
Equity |
| |
Net Sales
|
| |
Return on
Equity |
|
| | | | | FY 2024 | | |
$725.0
|
| |
14.2%
|
| |
$646.2
|
| |
13.4%
|
| |
0%
|
| |
90%
|
|
| | | | | FY 2025 | | |
n/a
|
| |||||||||||||||
| | | | | FY 2026 | | |
n/a
|
|
| | | | |
Name (1)(2)
|
| |
$ Value
|
| |
# of Units
|
|
| | | | | M. Farooq Kathwari | | |
$310,493
|
| |
10,864
|
|
| | | | | Matthew J. McNulty | | |
$81,996
|
| |
2,869
|
|
| | | | | Amy Franks | | |
$100,001
|
| |
3,499
|
|
| |
Name and Principal Position
|
| |
Year
|
| |
Salary
|
| |
Bonus (1)
|
| |
Stock
Awards (2) |
| |
Non-Equity
Incentive Plan Compensation (3) |
| |
Change in
Pension Value and Nonqualified Deferred Compensation Earnings (4) |
| |
All Other
Compensation (5) |
| |
Total
|
| ||||||||||||||||||||||||
| |
M. Farooq Kathwari
Chairman of the Board, President and Chief Executive Officer |
| | | | 2024 | | | | | $ | 1,150,050 | | | | | $ | — | | | | | $ | 1,518,009 (a) | | | | | $ | 414,000 | | | | | $ | — | | | | | $ | 127,409 | | | | | $ | 3,209,468 | | |
| | | 2023 | | | | | | 1,150,050 | | | | | | — | | | | | | 1,518,005 (b) | | | | | | 1,437,272 | | | | | | — | | | | | | 103,971 | | | | | | 4,209,298 | | | ||||
| | | 2022 | | | | | | 1,150,050 | | | | | | — | | | | | | 1,115,010 (c) | | | | | | 1,700,000 | | | | | | — | | | | | | 110,539 | | | | | | 4,075,599 | | | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Matthew J. McNulty
Senior Vice President, Chief Financial Officer and Treasurer |
| | | | 2024 | | | | | $ | 407,027 | | | | | $ | — | | | | | $ | 184,509 (a) | | | | | $ | 36,900 | | | | | $ | — | | | | | $ | 2,577 | | | | | $ | 631,013 | | |
| | | 2023 | | | | | | 375,000 | | | | | | — | | | | | | 86,255 (b) | | | | | | 93,735 | | | | | | — | | | | | | 2,379 | | | | | | 557,369 | | | ||||
| | | 2022 | | | | | | 340,685 | | | | | | 80,000 | | | | | | 56,430 (d) | | | | | | — | | | | | | — | | | | | | 2,203 | | | | | | 479,318 | | | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Amy Franks
Executive Vice President, Retail Division |
| | | | 2024 | | | | | $ | 492,356 | | | | | $ | — | | | | | $ | 250,006 (a) | | | | | $ | 54,000 | | | | | $ | — | | | | | $ | 2,577 | | | | | $ | 798,939 | | |
| | | 2023 | | | | | | 410,100 | | | | | | — | | | | | | 106,631 (b) | | | | | | 164,014 | | | | | | — | | | | | | 2,379 | | | | | | 683,124 | | | ||||
| | | 2022 | | | | | | 355,196 | | | | | | 130,000 | | | | | | 75,240 (d) | | | | | | — | | | | | | — | | | | | | 2,290 | | | | | | 562,726 | | | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Rebecca L. Thompson
Senior Vice President, Merchandising and Product Development |
| | | | 2024 | | | | | $ | 336,849 | | | | | $ | 35,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 2,577 | | | | | $ | 374,426 | | |
| |
Name (5)
|
| |
Grant
Date |
| |
Estimated future payouts
under non-equity incentive plan awards ($) (1) |
| |
Estimated future
stock award units under equity incentive plan awards (#) (2) |
| |
All Other
Stock Awards: Number of Stock Units (#)(3) |
| |
Grant Date
Fair Value of Stock Awards ($) (4) |
| ||||||||||||||||||||||||||||||||||||
|
Threshhold
|
| |
Target
|
| |
Maximum
|
| |
Threshhold
|
| |
Target
|
| |
Maximum
|
| |||||||||||||||||||||||||||||||||||||
| | M. Farooq Kathwari | | |
7/1/2023
|
| | | $ | 747,489 | | | | | $ | 1,207,516 | | | | | $ | 1,667,487 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | M. Farooq Kathwari | | |
8/8/2023
|
| | | | — | | | | | | — | | | | | | — | | | | | | 27,103 | | | | | | 43,783 | | | | | | 60,461 | | | | | | 10,864 | | | | | $ | 1,518,009 | | |
| | Matthew J. McNulty | | |
7/1/2023
|
| | | $ | 63,543 | | | | | $ | 102,513 | | | | | $ | 141,456 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Matthew J. McNulty | | |
8/8/2023
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,304 | | | | | | 3,717 | | | | | | 5,129 | | | | | | 2,869 | | | | | $ | 184,509 | | |
| | Amy Franks | | |
7/1/2023
|
| | | $ | 92,999 | | | | | $ | 150,005 | | | | | $ | 206,984 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Amy Franks | | |
8/8/2023
|
| | | | — | | | | | | — | | | | | | — | | | | | | 3,372 | | | | | | 5,439 | | | | | | 7,505 | | | | | | 3,499 | | | | | $ | 250,006 | | |
| | | | | | | | | | | | | |
Option Awards
|
| |
Stock Awards (1)
|
| ||||||||||||||||||||||||||||||||||||||||||
| | | | |
Name
|
| |
Notes
|
| |
Grant Date
|
| |
Number of
Securities Underlying Unexercised Options: Exercisable |
| |
Number of
Securities Underlying Unexercised Options: Unexercisable |
| |
Option
Exercise Price |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock That Have Not Vested |
| |
Market Value of
Shares or Units of Stock That Have Not Vested |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
| |
Equity
Incentives Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
| ||||||||||||||||||||||||
| | | | | M. Farooq Kathwari | | | |
|
(2)
|
| | |
8/3/2021
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | 68,250 | | | | | $ | 1,903,493 | | | | | | 13,000 | | | | | $ | 362,570 | | |
| | | | | | | | |
|
(4)
|
| | |
8/9/2022
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 10,626 | | | | | $ | 296,359 | | |
| | | | | | | | |
|
(5)
|
| | |
8/9/2022
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 43,658 | | | | | $ | 1,217,622 | | |
| | | | | | | | |
|
(6)
|
| | |
8/8/2023
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 10,864 | | | | | $ | 302,997 | | |
| | | | | | | | |
|
(7)
|
| | |
8/8/2023
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 16,241 | | | | | $ | 452,961 | | |
| | | | | | | | |
|
(8)
|
| | |
1997-2002
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | 126,000 | | | | | $ | 3,514,140 | | | | | | — | | | | | $ | — | | |
| | | | | Matthew J. McNulty | | | |
|
(3)
|
| | |
8/10/2021
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | 1,500 | | | | | $ | 41,835 | | | | | | — | | | | | $ | — | | |
| | | | | | | | |
|
(4)
|
| | |
8/9/2022
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 1,027 | | | | | $ | 28,643 | | |
| | | | | | | | |
|
(5)
|
| | |
8/9/2022
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 2,035 | | | | | $ | 56,756 | | |
| | | | | | | | |
|
(6)
|
| | |
8/8/2023
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 2,869 | | | | | $ | 80,016 | | |
| | | | | | | | |
|
(7)
|
| | |
8/8/2023
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 1,379 | | | | | $ | 38,460 | | |
| | | | | Amy Franks | | | |
|
(3)
|
| | |
8/10/2021
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | 2,000 | | | | | $ | 55,780 | | | | | | — | | | | | $ | — | | |
| | | | | | | | |
|
(4)
|
| | |
8/9/2022
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 1,123 | | | | | $ | 31,320 | | |
| | | | | | | | |
|
(5)
|
| | |
8/9/2022
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 2,669 | | | | | $ | 74,438 | | |
| | | | | | | | |
|
(6)
|
| | |
8/8/2023
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 3,499 | | | | | $ | 97,587 | | |
| | | | | | | | |
|
(7)
|
| | |
8/8/2023
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | — | | | | | $ | — | | | | | | 2,017 | | | | | $ | 56,254 | | |
| | | | |
Rebecca L. Thompson
|
| | |
|
(3)
|
| | |
8/10/2021
|
| | | | — | | | |
—
|
| | | | — | | | | | | — | | | | | | 500 | | | | | $ | 13,945 | | | | | | — | | | | | $ | — | | |
| | | | | | | |
Option Awards
|
| |
Stock Awards
|
| |||||||||
| | | | | | | |
Number of
shares acquired on exercise (#) |
| |
Value
realized on exercise ($) |
| |
Number of
shares acquired on vesting (#) |
| |
Value
realized on vesting ($) |
| |||
| | | | | M. Farooq Kathwari | | |
—
|
| |
—
|
| |
86,563
|
| | | $ | 2,732,977 | | |
| | | | | Matthew J. McNulty | | |
—
|
| |
—
|
| |
1,263
|
| | | $ | 43,241 | | |
| | | | | Amy Franks | | |
—
|
| |
—
|
| |
1,561
|
| | | $ | 53,410 | | |
| | | | | Rebecca L. Thompson | | |
—
|
| |
—
|
| |
250
|
| | | $ | 8,513 | | |