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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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| Wolverine World Wide, Inc. | ||||
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Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.NE
Rockford, Michigan 49351
March 28, 201726, 2020
Dear Fellow Shareholders,
Thank you for your investment in Wolverine Worldwide. We made significant progress in 2019 on our strategic and financial objectives, including:
In addition to overseeing the Company's execution on our Global Growth Agenda and other key initiatives during 2019, the Board focused on other matters critical to the Company's long-term success. These included Board and management succession planning, cybersecurity protection, and brand development, which we describe in greater detail in this Proxy Statement.
During 2020, our team remains focused on global growth opportunities for our portfolio of leading performance and lifestyle brands, especially in direct-to-consumer and key international channels. We plan to further invest in a variety of initiatives to drive revenue growth and earnings leverage, and the Board will lead the Company with a view toward continued success in 2020 and beyond. We hope to receive your support at this year's annual meeting on April 30, 2020, and encourage you to join me, our Board of Directors, members of Wolverine Worldwide's senior management team, and your fellow shareholders at Wolverine Worldwide's 2017 Annual Meeting of Shareholders on Thursday, May 4, 2017, at 10:00 a.m. EDT, at the Company's headquarters in Rockford, Michigan. The attachedProxy Statement andNotice of 2017 Annual Meeting of Shareholders provide you with information regarding the business to be conducted. There are a number of proposals for you to consider. Your vote is important, so please be sure to do so – whethereither online, by phone, or by mail with the enclosed proxy or voting instruction card.mail.
Sincerely,
2016 was a year of great progress for our Company, with our Board of DirectorsBlake W. Krueger
Chairman, Chief Executive Officer and senior management team focused on addressing the dynamic and fast-changing consumer marketplace through a prioritization on innovation and growth, omnichannel transformation, and operational excellence. We opened a new design and innovation center, reorganized our European, Canadian, Apparel and Accessories, and Direct-to-Consumer businesses, and restructured our credit facility, while delivering nearly $300 million in operating cash flow, reducing year-end inventories by 25%, and, most importantly, delivering 32.9% in total shareholder return, performance at the 91st percentile of our peer group. Our strong performance has continued into 2017, with 14.0% year-to-date total shareholder return through the March 13, 2017 record date for this year's annual meeting.President
In addition, since our last annual meeting, the Compensation Committee engaged a new independent executive compensation consultant, and members of our Board of Directors and senior management team redoubled efforts to speak with shareholders to better understand your perspectives on important governance and compensation matters. Of primary importance this past year, following the disappointing results of our 2016 say-on-pay vote, was discussing our executive compensation program with shareholders and determining how to best demonstrate responsiveness to your concerns. We reached out to shareholders holding nearly two-thirds of our outstanding shares and held meetings, most of them in person, with more than half of these shareholders, including each shareholder who accepted our invitation. Joseph Gromek, the Chair of our Compensation Committee, led these meetings, which focused not only on our executive compensation program, but also on the Company's governance protocols and publicly-announced strategic initiatives. The details of this outreach effort and the changes made by the Compensation Committee in response to shareholder feedback are discussed throughout this Proxy Statement and within the Compensation Discussion and Analysis, but, in summary, we:
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We greatly value the conversation we have had with our shareholders. We appreciate that this is an ongoing dialogue and look forward to continuing the conversation before, at, and after our 2017 Annual Meeting.
Sincerely,
David T. KollatLead Independent Director
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NOTICE OF 20172020 ANNUAL MEETING OF SHAREHOLDERS
10:00 a.m., May 4, 2017 EDT, April 30, 2020
Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.NE
Rockford, MichiganMI 49351
March 28, 201726, 2020
To ourOur Shareholders:
We invite you to attend Wolverine Worldwide'sthe 2020 Annual Meeting of Shareholders (the "Annual Meeting") of Wolverine World Wide, Inc. (the "Company", "Wolverine Worldwide" or "Wolverine") at the Company's headquartersoffices located at 9341 Courtland Drive, N.E.,NE, Rockford, MichiganMI 49351, on Thursday, May 4, 2017,April 30, 2020, at 10:00 a.m. EDT.* At the annual meeting, theAnnual Meeting, shareholders will vote on the following items:
Shareholders of record asat the close of business on March 13, 201718, 2020 can vote at the meetingAnnual Meeting and any adjournment of the meeting.Annual Meeting.
This Notice of 20172020 Annual Meeting of Shareholders, Proxy Statement, proxy or voting instruction card and Annual Report for our fiscal year ended December 31, 201628, 2019 are being mailed or made available to shareholders starting on or about March 28, 2017.26, 2020.
Whether or not you plan to attend, you can ensure that your shares are represented at the meeting by promptly voting and submitting your proxy by telephone or through the internet, or by completing, signing, dating and returning your proxy card in the enclosed envelope.
By Order of the Board of Directors,
Brendan M. GibbonsKyle L. HansonSenior Vice President, General CounselSecretary
Important Notice Regarding the Availability of Proxy Statement Materials for the Annual Meeting of Shareholders to be held on May 4, 2017.April 30, 2020.
Wolverine's Proxy Statement for the 20172020 Annual Meeting of Shareholders and the Annual Report to Shareholders for the fiscal year ended December 31, 2016,28, 2019, are available atat:www.wolverineworldwide.com/2017annualmeeting2020annualmeeting.
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Wolverine World Wide, Inc. ("Wolverine Worldwide" or the "Company") is furnishing this proxy statement and enclosed proxy card in connection with the solicitation of proxies by its Board of Directors to be used at the Annual Meeting of Shareholders of the Company occurring on May 4, 2017 at the Company's corporate headquarters in Rockford, Michigan (the "Annual Meeting"). Distribution of this proxy statement and enclosed proxy card to shareholders is scheduled to begin on or about March 28, 2017.
You can ensure that your shares are voted at the Annual Meeting by submitting your instructions by telephone or through the Internet, or by completing, signing, dating, and returning your proxy form in the enclosed envelope. Submitting your instructions or proxy by any of these methods will not affect your right to attend and vote at the Annual Meeting. The Company encourages shareholders to submit proxies in advance. A shareholder who gives a proxy may revoke it at any time before it is exercised by voting in person at the Annual Meeting, by delivering a subsequent proxy, or by notifying the inspectors of election in writing of such revocation. In order to vote any shares at the Annual Meeting that are held for you in a brokerage, bank, or other institutional account, you must obtain a proxy from that entity and bring it with you to hand in with your ballot.
References to "2016" or "fiscal 2016" in this proxy statement are to the Company's fiscal year ended December 31, 2016, unless otherwise noted in the text. References to "2017" or "fiscal 2017" in this proxy statement are to the Company's fiscal year ending December 30, 2017, unless otherwise noted in the text.
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2017 PROXY STATEMENT
Table of Contents |
Letter to Shareholders | 1 | |
Notice of | ||
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Proxy Statement Summary | ||
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Matters to be Voted Upon | 5 | |
Election of Directors for Terms Expiring in | ||
Board Highlights | ||
Board is Composed of Directors with the Right Mix of Skills and Experiences | ||
Shareholder Engagement | 7 | |
Corporate Governance Highlights | ||
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Corporate Governance | ||
Board of Directors | ||
Board Composition | ||
Director Nominations | ||
Board Self-Assessment | ||
Risk Oversight | ||
Code of Business Conduct and Accounting and Finance Code of Ethics | ||
Shareholder Communications Policy | ||
Proposal 1 – Election of Directors for Terms Expiring in | ||
Director Nominees with Proposed Terms Expiring in 2023 | 13 | |
Directors with Terms Expiring in | ||
Directors with Terms Expiring in | ||
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Board Leadership | ||
Director Independence | ||
Board Committees, Meetings and Meeting Attendance | ||
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Non-Employee Director Compensation in Fiscal Year | ||
Non-Employee Director Stock Ownership Guidelines | ||
Securities Ownership of Officers and Directors and Certain Beneficial Owners | ||
Five Percent Shareholders | ||
Stock Ownership by Management and Others | ||
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Compensation Discussion and Analysis | ||
Summary | ||
Compensation Philosophy and Objectives | ||
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Compensation Decisions in Context: Key | ||
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Pay at Risk | 33 | |
Long-Term Incentive Program Mix | ||
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Compensation Best Practices | ||
Compensation Discussion and Analysis | ||
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Setting Targets | ||
Base Salary | ||
Annual Bonus | ||
Performance Bonus | ||
Individual Performance Bonus | ||
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Long-Term Incentive Compensation | ||
2017-2019 Performance | ||
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Benefits | ||
Retirement, Deferred Compensation and Welfare Plans | ||
Perquisites | ||
Post-Employment Compensation | ||
Say-On-Pay Advisory Vote | 44 | |
Compensation Setting Process | ||
Setting Targets | ||
Competitive Philosophy and Competitive Market Data | ||
Peer Group | ||
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CEO Role | ||
Compensation Consultant Role | ||
Other Compensation Policies and Practices | ||
NEO Stock Ownership Guidelines | ||
Stock Hedging and Pledging Policies | ||
Clawback Policy | ||
Impact of Accounting and Tax Treatments on Compensation | ||
Compensation Committee Report | ||
Summary Compensation Table | ||
Grants of Plan-Based Awards in Fiscal Year | ||
Outstanding Equity Awards at | ||
Option Exercises and Stock Vested in Fiscal Year | ||
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2017 PROXY STATEMENT
Pension Plans and | ||
Qualified Pension | ||
Supplemental Executive Retirement Plan | ||
Pension Benefits in Fiscal Year | ||
Non-Qualified Deferred Compensation | 60 | |
Nonqualified Deferred Compensation | ||
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Potential Payments Upon Termination or Change in Control | ||
Benefits Triggered by Termination for Cause or Voluntary Termination | ||
Benefits Triggered by Termination Other Than for Cause or for Good Reason | ||
Benefits Triggered Upon a Change in Control | ||
Benefits Triggered by Retirement, Death or Permanent Disability | ||
Description of Restrictive Covenants that Apply During and After Termination of Employment | ||
Estimated Payments on Termination or Change in Control | ||
CEO Pay Ratio | 66 | |
Proposal 2 – Advisory Resolution | ||
Proposal 3 | ||
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Audit Committee Report | ||
Independent Registered Public Accounting Firm | ||
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Related Party Matters | ||
Certain Relationships and Related Transactions | ||
Related Person Transactions Policy | ||
Additional Information | ||
Shareholders List | ||
Director and Officer Indemnification | ||
Delinquent Section 16(a) | ||
Shareholder Proposals for Inclusion in Next Year's Proxy Statement | ||
Other Shareholder Proposals for Presentation at Next Year's Annual Meeting | ||
Voting Securities | ||
Conduct of Business | ||
Vote Required for Election and Approval | ||
Voting Results of the Annual Meeting | ||
Attending the Annual Meeting | ||
Manner for Voting Proxies | ||
Revocation of Proxies | ||
Solicitation of Proxies | ||
Delivery of Documents to Shareholders Sharing an Address | ||
Access to Proxy Statement and Annual Report | ||
Appendix A – | ||
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This summary highlights key information that can be found in greater detail elsewhere in this Proxy Statement. This summary does not contain all of the information that shareholders should consider, and shareholders should read the entire Proxy Statement before voting.
Wolverine Worldwide organized its portfolio of brands into two key operating groups for fiscal 2019 as illustrated below:
SUMMARY OF SHAREHOLDER VOTINGStrategic Focus — Global Growth Agenda
2019 was another successful year for the Company with further progress against ourGlobal Growth Agenda. This agenda is our roadmap for growth and is focused on developing an innovative and fasterProduct Creation Engine, implementing a modern, consumer-drivenDigital-Direct Offense, and accelerating our growth inInternational markets. Focused efforts and investments behind these pillars helped build momentum and allowed us to deliver top-line growth as we worked to fulfill our vision to"Build a family of the most admired performance and lifestyle brands on earth."
We maintained our level of operating investment in 2019 to drive organic growth and build an innovative and fasterProduct Creation Engine, the first element of our Global Growth Agenda. In 2019, we recruited a Chief Merchant Officer to supplement the efforts of our brands, accelerate innovation and elevate our product creation process. We are excited by the 2020 pipeline of on-trend and innovative product offerings across the brand portfolio and the powerful marketing stories that have been developed to support them.
We also made significant investments during 2019 to advance ourDigital-Direct Offense, the second element of ourGlobal Growth Agenda. For us, this means leveraging our commercial platforms and optimizing demand creation investments across all channels of distribution, especially owned eCommerce, which grew over 20%, delivered 260 basis points of operating margin expansion, and increased customer retention by over 30%. Our owned eCommerce channel has averaged approximately 20% growth over the past three years and is expected to continue as our highest growth channel over the near term. Digital growth within our U.S. wholesale channel was also strong.
The third pillar of ourGlobal Growth Agenda is focused onInternational Expansion. We have a long track record of driving brand success and growth on a global basis through a variety of business models. In 2019, we executed a joint venture with Xtep to position the Merrell and Saucony brands for accelerated growth. We also acquired a key Saucony distributor and are using that talent to build a global design hub for the brand's successful Originals lifestyle business. We expect our international business to be a key source of growth over the next several years as we continue to gain more direct engagement with consumers in strategic markets.
The continued success associated with the execution of ourGlobal Growth Agenda is very encouraging. The team has achieved success and momentum over the last two years that will be leveraged to accelerate future growth.
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2020 PROXY STATEMENT | | | | 4 |
Shareholders are being asked to vote on the following matters at the 20172020 Annual Meeting of Shareholders:
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| PROPOSAL | BOARD VOTE RECOMMENDATION | PAGE REFERENCE | PROPOSAL | BOARD VOTE RECOMMENDATION | PAGE REFERENCE | | ||||||||||||||
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| 1. | Election of Directors for Terms Expiring in 2020 | FOR each Nominee | 18 | |||||||||||||||||
| | | | | | | | | | | | 1. | Election of Directors for Terms Expiring in 2023 | FOR each Nominee | 12 | | |||||
| 2. | Advisory Resolution Approving NEO Compensation | FOR | 78 | |||||||||||||||||
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| 3. | Frequency of Future Advisory Votes on Executive Officers Compensation to be Every Year | EVERY ONE YEAR | 79 | |||||||||||||||||
| | | | | | | | | | | | 2. | Advisory Resolution Approving NEO Compensation | FOR | 67 | | |||||
| 4. | Ratification of Ernst & Young LLP as Auditor for Fiscal Year 2017 | FOR | 80 | |||||||||||||||||
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| 5. | Approval of the Amended & Restated Executive Short-Term Incentive Plan (Annual Bonus Plan) | FOR | 87 | |||||||||||||||||
| | | | | | | | | | | | 3. | Ratification of Ernst & Young LLP as Auditor for Fiscal Year 2020 | FOR | 68 | | |||||
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PROPOSAL 1 – ELECTION OF DIRECTORS FOR TERMS EXPIRING IN 20202023
The Company's Board consists of 1110 directors. The Company's By-Laws establish three classes of directors with each class being as nearly equal in number as possible and serving three-year terms.
The Board has nominated four directors for election at the Annual Meeting, as outlined in the table below. Each director nominee has been nominated to serve for a three-year term expiring at the annual meeting of shareholders to be held in 2020.2023.The Board recommends that shareholders vote "FOR" each of the nominees named below.
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| Age | Director Since | Independent | Other Public Directorships | Committees | Proposed Term Expiration | |||||||||||
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| William K. Gerber Managing Director, Cabrillo Point Capital | 63 | 2008 | ✓ | AK Steel Holding Corporation | Audit (Chair) Compensation | 2020 | ||||||||||
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| Blake W. Krueger Chairman, CEO & President of Wolverine World Wide, Inc. | 63 | 2006 | None | None | 2020 | |||||||||||
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| Nicholas T. Long Retired CEO of MillerCoors LLC | 58 | 2011 | ✓ | None | Compensation Governance | 2020 | ||||||||||
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| Michael A. Volkema Chairman of Herman Miller, Inc. | 61 | 2005 | ✓ | Herman Miller, Inc. | Audit Governance (Chair) | 2020 | ||||||||||
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| | | Age | Director Since | Independent | Other Public Directorships | Committees | Proposed Term Expiration | | ||||||||
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| | William K. Gerber Managing Partner, Cabrillo Point Capital, LLC; Retired Executive Vice President and Chief Financial Officer of Kelly Services, Inc. | 66 | 2008 | ✓ | Cleveland-Cliffs, Inc. | Audit Compensation | 2023 | | ||||||||
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| | Blake W. Krueger Chairman, CEO and President of Wolverine World Wide, Inc. | 66 | 2006 | | None | None | 2023 | | ||||||||
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| | Nicholas T. Long Managing Partner, Bridger Growth Partners, LLC; Retired CEO of MillerCoors LLC | 61 | 2011 | ✓ | Amcor Limited | Compensation (Chair) Governance | 2023 | | ||||||||
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| | Michael A. Volkema Chairman of Herman Miller, Inc. | 64 | 2005 | ✓ | Herman Miller, Inc. | Audit Governance (Chair) | 2023 | | ||||||||
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The following pie charts illustrate key characteristics of the Company's Board:
Board is Composed of Directors with the Right Mix of Skills and Experiences
The following chart lists the important experiences and attributes that the Company's Directors possess:
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Corporate Governance Highlights
Wolverine Worldwide is committed to a governance structure that provides strong shareholder rights and meaningful accountability:
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PROPOSAL 2 – ADVISORY VOTE TO APPROVE NEO COMPENSATIONShareholder Engagement
For a more detailed discussionAs part of compensation matters, please reference the CD&A beginning on page 39. While the outcome of this proposal is non-binding, the Board and Compensation Committee will consider the outcome of the vote when making future compensation decisions.The Board recommends that shareholders vote "FOR" the advisory vote to approve named executive officer compensation.
Wolverine Worldwide has a portfolio of brands organized into four key operating groups as illustrated below:
In 2016,its ongoing shareholder engagement efforts, the Company launched the WOLVERINE WAY FORWARD, an enterprise-wide initiative to transform the Companyreached out in light of the fast-changing retail environment. The WOLVERINE WAY FORWARD includes the following key components:
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Key 2016 Accomplishments and Financial Highlights
Key 2016 financial highlights and accomplishments against the Company's strategic priorities are below.
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The Company's Board and management team were disappointed with the results of the 2016 say-on-pay vote, which failed to receive majority shareholder support. In response, the Compensation Committee and full Board undertook a thorough review of the Company's compensation program in order to determine how best to respond to shareholders. Since the 2016 annual meeting, the Company's Compensation Committee Chair has reached out to shareholders representing nearly two-thirds60% of its outstanding shares and has held or expects to hold telephonic meetings with more than half of theseall shareholders mostly in person. The Company met with every shareholder who accepted its invitation to engage, and the Company's Compensation Committee Chairman, Joseph Gromek, led eachinvitation (representing about 21% of the meetings. After aggregating all shareholder feedback and sharing it with the full Board, the Compensation Committee made significant changes to the executive compensation program. The feedback received and the changes made in response are discussed in greater detail in the CD&A Summary beginningoutstanding shares). Discussions focused on page 39. Some highlights are summarized below:
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Compensation Philosophy – Pay at Risk
The Company's compensation philosophy is to align the interests of NEOs and shareholders by placing a significant portion of the compensation awarded to its NEOs generally, and the CEO in particular, at-risk (performance shares and annual bonus) and variable (restricted stock and, prior to 2017, stock options). The Compensation Committee believes this incentivizes superior business, stock price andCompany strategy, financial performance, governance and aligns the interests of executives with those of shareholders.
The below graphic illustrates the percentage of at-risk and variable target compensation for the CEO and the average of the other NEOs:
CEO 2016 vs. 2017 Target Total Compensation
Note: 2017 CEO equity grants were reduced by $500,000 compared to 2016 to respond to shareholders concerns regarding our 2016 say-on-pay vote. This one-time reduction is not reflected in the graphic above.
Other NEO 2016 vs. 2017 Target Total Compensation (Average)
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The below graphic illustrates the CEO's actual annual performance bonus compared to his target opportunity over the last three years and demonstrates the Company's pay-for-performance compensation philosophy in action – there is a clear link between Company TSR performance and annual bonus achievement over these periods. The CEO's target annual bonus opportunity has not increased over the past three years and was not increased in 2017.
CEO 3-Year Target & Actual Bonus(in $000s)
Compensation Best PracticesCorporate Governance Highlights
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2017 PROXY STATEMENT
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Wolverine Worldwide is committed to the highest level of corporatea governance structure that provides strong shareholder rights and the Board has adopted its Corporate Governance Guidelines to strengthen management accountability and promote long-term shareholder interests. These governance practices include:meaningful accountability.
✓ Highly independent Board ✓ Lead Independent Director with clearly defined role ✓ Majority voting with director resignation policy ✓ No supermajority vote requirements ✓ Shareholder right to act by written consent | ✓ Annual Board and Committee self-evaluations ✓ Robust Board and executive succession planning, including annual written director nominee evaluations ✓ Long-standing commitment toward diversity ✓ Director onboarding orientation program ✓ Active shareholder engagement practices |
The meeting is scheduled to take place at the Company's Corporate offices at 9341 Courtland Drive, N.E., Rockford, MI 49351, on April 30, 2020, at 10:00 a.m. EDT. The Company is actively monitoring the public health and travel concerns relating to the coronavirus (COVID-19) and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the Annual Meeting in person, the Company will announce alternative arrangements for the meeting, which may include a change in venue or holding the meeting solely by means of remote communication (i.e., a virtual meeting). Please monitor the Company's website where Annual Meeting materials are posted (www.wolverineworldwide.com/2020annualmeeting) for updated information. If you plan to attend the meeting, please check the website regularly prior to the meeting date. As always, the Company encourages you to vote your shares before the Annual Meeting.
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2020 PROXY STATEMENT | | | | 7 |
Corporate Governance |
Wolverine Worldwide is committed to the highest level of corporate governance, and the Board has adopted Corporate Governance Guidelines to strengthen management accountability and promote long-term shareholder interests.
The shareholders elect directors to serve on the Company's Board of Directors (the "Board of Directors" or "Board"). The Board oversees the management of the business by the Chief Executive Officer ("CEO") and senior management. In addition to its general oversight function, the Board's additional responsibilities include, but are not limited to, the following:
The following charts illustrate Key Board characteristics:
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2017 PROXY STATEMENT
The Board prides itself on its ability to recruit and retain directors who have high personal and professional integrity and have demonstrated exceptional ability and judgment to effectively serve shareholders' long-term interests. These skills and attributes also link with the Company's most important strategic objectives, such as eCommerce and digital growth, brand building, operational excellence and supply chain management, and international growth. The Board also values diversity, as evidenced by the current makeup of the Board. The Board believes that its directors, including the nominees for election as directors at the Annual Meeting, have these characteristics and valuable skills that provide the Company with the variety and depth of knowledge, judgment and strategic vision necessary to provide effective oversight of the Company. This includes the Company's newest director, David W. McCreight, who was appointed to the Board in May 2019.
To help accomplish this,the right mix of experience and expertise, and to assist in succession planning, the Board, at the recommendation of the Governance Committee, has identified specified skills and attributes it desires its members to possess. The below graphic lists these skills and attributes and indicates which of the directors possess each. As shown, these skills and attributes are well represented within the Board.
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The Governance Committee reviews with the Board on an annual basis the appropriate skills and characteristics desired of Board members in the context of the current make-upmakeup of the Board. The Board, with the assistance of the Governance Committee, annually assesses the current composition of the Board across many dimensions. As set forth in the Company's Corporate Governance Guidelines, which are posted on its website, this assessment addresses the above-referred skills and attributes set forth in the table above and the individual performance, experience, age and skills of each director.
The Board's Governance Committee serves as its nominating committee. The Governance Committee, in anticipation of upcoming director elections and other potential or expected Board vacancies, evaluates qualified individuals and recommends candidates to the Board. The Governance Committee may retain a search firm or other external parties to assist it in identifying candidates, and the Governance Committee has the sole authority to select such a firm, approve the search firm's fees and retention terms, and to terminate the firm if necessary.
The Governance Committee considers candidates suggested by directors, senior management or shareholders. Shareholders may recommend individuals as potential director candidates by communicating with the Governance Committee through one of the Board communication mechanisms described under the heading "Shareholder Communications Policy." Shareholders that wish to nominate a director candidate must comply with the procedures set forth in the Company's By-Laws, which are posted on its website. Ultimately, upon the recommendation of the Governance Committee, the Board selects the director nominees for election at each annual meeting. In selecting director nominees, the Board considers candidates'each candidate's performance as a director (which is assessed through an anonymous written peer evaluation), personal and professional integrity, ability and judgment, and likelihood to be effective, in conjunction with the other nominees and directors, in serving the long-term interests of the shareholders. The Governance Committee also considers candidates' relative skills, attributes, background and characteristics;characteristics as well as independence under applicable New York Stock Exchange ("NYSE") listing standards and the Company's Director Independence Standards;Standards, potential to contribute to the composition and culture of the Board;Board, and ability and willingness to actively participate in the Board and committee meetings and to otherwise devote sufficient time to Board duties.
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2017 PROXY STATEMENT
As part of an annual self-assessment, each director evaluates the performance of the Board and any committee on which he or she serves across a number of dimensions. Mr.Dr. Kollat, as the Lead Independent Director, workingworks with the Governance Committee reviewsto review the Board self-assessment with directors following the end of each fiscal year and conductsto conduct individual director interviews at the end of each year. Committee Chairpersons review the committee self-assessments with their respective committee members and discuss them with the Board.
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2020 PROXY STATEMENT | | | | 9 |
In addition, the Governance Committee, working with the Lead Independent Director, develops and implements guidelines for evaluating all directors standing for nomination and re-election.re-election and oversees the evaluation of such nominees.
The Corporate Governance Guidelines (including the Director Independence Standards), the Charter for each Board standing committee (Audit, Compensation and Governance), the Company's Certificate of Incorporation, By-Laws, Code of Business Conduct, and its Accounting and Finance Code of Ethics all are available on the Wolverine Worldwide website at:http://www.wolverineworldwide.com/investor-relations/corporate-governance/
The Board and applicable committees annually review these and other key governance documents.
The Board oversees the Company's risk management and mitigation activities with a focus on the most significant risks facing the Company, including strategic, operational, financial, environmental, cybersecurity, and legal compliance risks. This oversight is conducted through presentations by and discussions with the CEO, Chief Financial Officer ("CFO"), General Counsel or Associate General Counsel, Chief Information Officer, brand and department leaders and other members of management. The Vice PresidentAssociate General Counsel and Director of Internal Audit and Risk Compliance coordinatescoordinate management's day-to-day risk management and mitigation efforts, and the Director of Internal Audit reports directly to the Audit Committee.
The Vice PresidentAssociate General Counsel and Director of Internal Audit and Risk Compliance reviewsreview with the Audit Committee periodically,regularly, and with the full Board annually,periodically, management's relatedrisk assessment and mitigation strategies. In addition to the above processes, the Board has delegated risk management and mitigation oversight responsibilities to its standing committees, which meet regularly to review and discuss specific risk topics that align with their core responsibilities.
The Company reviewed its compensation policies and practices to assess whether they are reasonably likely to have a material adverse effect on the Company. As part of this review, the Company compiled information about the Company's incentive plans, including reviewing the Company's compensation philosophy, evaluating key incentive plan design features and reviewing historic payout levels and pay mix. With assistance from Company management and its independent compensation consultant, the Compensation Committee reviewed the executive compensation program, and managers from the Company's human resources and legal departments reviewed the non-executive compensation programs.
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CODE OF BUSINESS CONDUCT AND ACCOUNTING AND FINANCE CODE OF ETHICS
The Board has adopted a Code of Business Conduct for the Company's directors, officers and employees. The Board also has adopted an Accounting and Finance Code of Ethics ("Accounting and Finance Code") that focuses on the financial reporting process and applies to the Company's CEO, CFO and Corporate Controller.
The Company discloses amendments to or waivers from its Code of Business Conduct affecting directors or executive officers and amendments to or waivers from its Accounting and Finance Code on its website at:www.wolverineworldwide.com/investor-relations/corporate-governance/
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SHAREHOLDER COMMUNICATIONS POLICY
Shareholders and other interested parties may send correspondence to the Board, the non-employee directors as a group, a specific Board committee or an individual director (including the Lead Director) in the manner described below.
The General Counsel or Associate General Counsel will provide a summary and copies of all correspondence (other than solicitations for services, products or publications) as applicable at each regularly scheduled Board meeting.
Communications may be sent via email through various links on our website atat:www.wolverineworldwide.com/investor-relations/corporate-governance/
or by regular mail c/o Senior Vice President, General Counsel, and Secretary, Wolverine World Wide, Inc., 9341 Courtland Drive, N.E., Rockford, MichiganMI 49351.
The General Counsel or Associate General Counsel will alert individual directors if an item warrants a prompt response from the individual director prior to the next regularly scheduled meeting. Items warranting a prompt response, but not addressed to a specific director, will be routed to the applicable committee Chairperson.
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2017 PROXY STATEMENT
The Company's Board consists of 11ten directors. The Company's By-Laws establish three classes of directors, with each class being as nearly equal in number as possible and serving three-year terms. At each annual meeting, the term of one class expires. The Board has nominated four directors for election at the Annual Meeting: William K. Gerber, Blake W. Krueger, Nicholas T. Long and Michael A. Volkema. Each director has been nominated to serve for a three-year term expiring at the annual meeting of shareholders to be held in 20202023 or until hishis/her successor, if any, has been elected and is qualified.
Messrs. Gerber, Long and VolkemaAll director nominees other than Mr. Krueger are independent directors, as determined by the Board under the applicable NYSE listing standards and the Company's Director Independence Standards. Each director nominee currently serves on the Board. The shareholders most recently elected Messrs. Gerber, Krueger, Long and Volkema at the Company's 2014 annual meeting by affirmative vote of at least 98% of shares voted.2017 Annual Meeting.
The Company is not aware of any nominee who will be unable or unwilling to serve as a director. However, if a nominee is unable to serve or is otherwise unavailable for election, the incumbent directors may or may not select a substitute nominee. If the directors select a substitute nominee, the proxy holder will vote the shares represented by all valid proxies for the substitute nominee (unless other instructions are given).
The biographies of the four nominees and the other directors of the Company are below, along with a discussion of the experience and skills of each director.
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WILLIAM K. GERBER | ||||||
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BLAKE W. KRUEGER | ||||||
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NICHOLAS T. LONG | ||||||
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MICHAEL A. VOLKEMA | ||||||
| | Select Business Experience: | | Board Committees: | | Other Public Directorships: |
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Experience and Skills: | ||||||
BOARD RECOMMENDATION
The Board recommends that you vote "FOR" the election of the above nominees for proposed terms expiring in 2020.2023.
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Directors with Terms |
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ROXANE DIVOL | ||||||
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BRENDA J. LAUDERBACK | ||||||
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DAVID W. MCCREIGHT | ||||||
| | Select Business Experience: | | Board Committees: | | Other Public Directorships: |
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2017
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2020 PROXY STATEMENT | | | | 19 |
Directors with Terms |
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JEFFREY M. BOROMISA | ||||||
| | Select Business Experience: | | Board Committees: | | Other Public Directorships: |
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GINA R. BOSWELL | ||||||
| | Select Business Experience: | | Board Committees: | | Other Public Directorships: |
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DAVID T. KOLLAT | ||||||
| | Select Business Experience: | | Board | | Other Public Directorships: |
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The Company's CEO currently also serves asCorporate Governance Guidelines give the Chairman ofBoard the Board. Since 1993,flexibility to determine the best leadership structure for the Company has had a lead independent director who functions in many ways similar to an independent Chairman. This long-established structure providesbased upon the Board with independent oversight ofCompany's evolving needs and opportunities. The Governance Committee periodically reviews the CEO's leadership. On an annual basis, the independent directors consider the appropriateBoard's leadership structure, including whether to separate the roles of Chairman and CEO, based upon the Board and Company's then-current circumstances. Thecircumstances, and recommends changes to the Board as appropriate. Currently, the Company's CEO also serves as the Chairman of the Board. In addition, since 1993, the independent directors have annually elected a Lead Independent Director who performs a role in many ways similar to an independent Chairman. The Board continues to believe that its currentthis leadership structure is appropriatein the best interests of the Company and its shareholders at this time and setbecause it provides the Board with effective independent oversight of management. Specifically, the Lead Independent Director has the following enumurated responsibilities for the lead independent director:enumerated responsibilities:
The Board annually assesses the independence of all directors. To qualify as "independent," the Board must affirmatively determine that the director is independent under the Company's Director Independence Standards, which are modeled after the listing standards of the NYSE. Under NYSE listing standards, the Board has determined that 109 of the Company's 1110 directors are independent. Only Mr. Krueger, the Company's CEO, is not independent. All of the Board's committees are comprised entirely of independent directors. The independent directors generally meet in executive session at each regularly scheduled meeting.
The Director Independence Standards define an "Independent Director" as a director who the Board determines otherwise has no material relationship with the Company (either directly or as a partner, stockholdershareholder or officer of an organization that has a relationship with the Company), and who:
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BOARD COMMITTEES, MEETINGS AND MEETING ATTENDANCE
The Board has three standing committees: Audit, Compensation and Governance. Each committee meets periodically throughout the year and reports its recommendations to the Board. The Company expects directors to attend every meeting of the Board and the committees on which they serve and to attend the annual meeting of shareholders. In 2016,2019, all directors then serving on the Board attended the 20162019 Annual Meeting of Shareholders, and all directors attended at least 75% of the meetings of the Board (6(8 meetings in 2016)2019) and the committees on which they served. All directors are typically invited to and attend all committee meetings.
Each committee annually evaluates its performance to determine its effectiveness. The Board has determined that all committee members are "independent" as defined by NYSE listing standards. Furthermore, each Audit Committee member satisfies the NYSE "financial literacy" requirement. In addition, the Board has determined that Mr. Boromisa and Mr. Gerber are "audit committee financial experts" under Securities and Exchange Commission ("SEC") rules. Each committee's charter, with a complete list of the duties and responsibilities, is available on the Company's website athttp://www.wolverineworldwide.com/investor-relations/corporate-governance/.
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Non-Employee Director Compensation |
The Company's non-employee director compensation philosophy is to pay compensation that is competitive with the compensation paid by companies of similar size, in similar industries and with whom Wolverine Worldwide competes for director candidates. The Governance Committee, with input from management and from the Compensation Committee's independent compensation consultant, reviewed director compensation and compared it to market data, including a comparison to director compensation for the Company's Peer Group, as defined on page 56,45, and to that of companies in the 2014-2015 National Association of Corporatebroader industry market surveys (FW Cook 2017 Director Compensation Report.Report and NACD 2017-2018 Director Compensation Report). Based on this review, non-employee director compensation for 2016 did not change from 2015 levels. fiscal year 2019 was updated as follows compared to fiscal year 2018 compensation.
These changes were implemented to keep Wolverine director compensation near the median of its peer group.
The following table provides information concerningregarding the compensation of the Company's non-employee directors for fiscal year 2016.2019. Mr. Krueger receives compensation for his services as the Company's CEO and President, but does not receive any additional compensation for his service as a director or chairman.
Fees Paid in Cash | | | Cash Amounts Voluntarily Deferred | | | Cash Amounts Deferred Through Annual Equity Retainers | | Fees Earned or Paid in Cash1 | | Option Awards2 | | Total | Fees Paid in Cash | | | Cash Amounts Voluntarily Deferred | | | Fees Earned or Paid in Cash1 | | Restricted Stock Unit Awards2 | | Totals | |||||||||||||||||||||||||
Boromisa | $97,000 | + | - | + | $70,000 | = | $167,000 | + | $50,002 | = | $217,002 | - | + | $114,500 | = | $114,500 | + | $135,011 | = | $249,511 | ||||||||||||||||||||||||||||
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Boswell | $82,000 | + | - | + | $70,000 | = | $152,000 | + | $50,002 | = | $202,002 | $99,000 | + | - | = | $99,000 | + | $135,011 | = | $234,011 | ||||||||||||||||||||||||||||
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Divol | $21,250 | + | $63,750 | + | $70,000 | = | $155,000 | + | $50,002 | = | $205,002 | $102,000 | + | - | = | $102,000 | + | $135,011 | = | $237,011 | ||||||||||||||||||||||||||||
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Gerber | $117,000 | + | - | + | $70,000 | = | $187,000 | + | $50,002 | = | $237,002 | $119,500 | + | - | = | $119,500 | + | $135,011 | = | $254,511 | ||||||||||||||||||||||||||||
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Gromek | - | + | $109,000 | + | $70,000 | = | $179,000 | + | $50,002 | = | $229,002 | - | + | $51,185 | = | $51,185 | + | - | = | $51,185 | ||||||||||||||||||||||||||||
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Kollat | $130,000 | + | - | + | $92,000 | = | $222,000 | + | $63,002 | = | $285,002 | $135,000 | + | - | = | $135,000 | + | $170,014 | = | $305,014 | ||||||||||||||||||||||||||||
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Lauderback | $78,375 | + | $26,125 | + | $70,000 | = | $174,500 | + | $50,002 | = | $224,502 | $76,500 | + | $25,500 | = | $102,000 | + | $135,011 | = | $237,011 | ||||||||||||||||||||||||||||
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Long | $94,000 | + | - | + | $70,000 | = | $164,000 | + | $50,002 | = | $214,002 | $122,315 | + | - | = | $122,315 | + | $135,011 | = | $257,326 | ||||||||||||||||||||||||||||
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O'Donovan | $70,000 | + | - | + | $70,000 | = | $140,000 | + | $50,002 | = | $190,002 | |||||||||||||||||||||||||||||||||||||
McCreight | $49,863 | + | - | = | $49,863 | + | $135,020 | = | $184,883 | |||||||||||||||||||||||||||||||||||||||
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Volkema | - | + | $104,500 | + | $70,000 | = | $174,500 | + | $50,002 | = | $224,502 | - | + | $119,500 | = | $119,500 | + | $135,011 | = | $254,511 | ||||||||||||||||||||||||||||
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Name | Option Awards Outstanding at December 31, 2016 (#) | Name | Option Awards Outstanding at December 31, 2016 (#) | |||||
Boromisa | 75,191 | Kollat | 85,129 | |||||
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Boswell | 35,644 | Lauderback | 65,321 | |||||
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Divol | 30,911 | Long | 51,551 | |||||
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Gerber | 62,773 | O'Donovan | 69,083 | |||||
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Gromek | 81,701 | Volkema | 46,235 | |||||
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Name | Option Awards Outstanding at December 28, 2019 (#) | Restricted Stock Units held at December 28, 2019 (#) | ||||
Boromisa | 61,994 | 8,085 | ||||
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Boswell | 44,735 | 3,645 | ||||
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Divol | 40,002 | 3,645 | ||||
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Gerber | 55,326 | 3,645 | ||||
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Gromek | 61,994 | - | ||||
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Kollat | 74,296 | 10,226 | ||||
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Lauderback | 55,326 | 3,645 | ||||
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Long | 60,642 | 8,085 | ||||
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McCreight | - | 3,781 | ||||
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Volkema | 55,326 | 8,085 | ||||
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Includes 4,440, 5,636, 4,440 and 4,440 fully vested restricted stock units held by each of Mr. Boromisa, Dr. Kollat, Mr. Long and Mr. Volkema, respectively, that were deferred and will be settled on such date as elected by the director.
2017 PROXY STATEMENT
The following table shows the non-employee director compensation program for 2016:fiscal year 2019:
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| Audit Committee Chairperson Annual Fee | | | $25,000 | | | |||||||
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| Compensation Committee Annual Fee | | | $12,000 | | | |||||||
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| Governance Committee Annual Fee | | | $12,000 | | | |||||||
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| Governance Committee Chairperson Annual Fee | | | $ | | | |||||||
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| Lead Director Annual Fee | | | In lieu of the standard Annual Director Fee, the Lead Director was paid a Cash Retainer of $135,000. | | In lieu of the standard | $170,000. | | |||||
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The Company also:
Director Deferred Compensation Plan. The Company's Amended and Restated Outside Directors' Deferred Compensation Plan (the "Deferred"Director Deferred Compensation Plan") is a supplemental nonqualified deferred compensation plan for non-employee directors. A separate non-employee director deferred compensation plan applies to benefits accrued under that plan before January 1, 2005. The Director Deferred Compensation Plan
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permits all non-employee directors to voluntarily defer, at their option, 25%, 50%, 75% or 100% of their director fees. The Company establishes a book account for each non-employee director and credits the director's account with the annual equity retainer amount as described above and with a number of stock units equal to the amounts voluntarily deferred, each divided by the closing market price of common stock on the payment/deferral date. The Company also credits director accounts with dividend equivalents on amounts previously deferred in the form of additional stock units. The amounts credited to director accounts are treated as if invested in Wolverine Worldwide common stock. The number of stock units held in director accounts is set forth under the "Stock Ownership By Management and Others" table below.
Upon a director's termination of service, or such later date as a director selects, the Company distributeswill distribute the stock units in the director's book account in shares of Wolverine Worldwide common stock in either a single, lump-sumlump sum distribution or annual installment distributions over a
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period of up to 20 years (10 years under the plan for benefits accrued before January 1, 2005). The Company converts each stock unit to one share of Wolverine Worldwide common stock.
Upon a "change in control," the Company distributeswill distribute to the director, in a single, lump-sumlump sum distribution, Wolverine Worldwide common stock in a number of shares equal to the stock units credited to a director's book account. The Deferred Compensation Plan defines "change in control" as any of the following:
Deferred Compensation Plan. For a description of the non-qualified Deferred Compensation Plan under which directors may also defer cash fees, please see the "Non-Qualified Deferred Compensation" section on page 60.
NON-EMPLOYEE DIRECTOR STOCK OWNERSHIP GUIDELINES
Each non-employee director must attain (and maintain) a minimum stock ownership level (including owned shares, the in-the-money value of stock options, and stock units under the Directors' Deferred Compensation Plan) equal to six times the non-employee director annual cash retainer prior to being able to gift or sell any Company stock. During 2016,2019, all non-employee directors were in compliance with these guidelines.
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Securities Ownership of Officers and Directors and Certain Beneficial Owners |
The following table sets forth information about those holders known by Wolverine Worldwide to be the beneficial owners of more than five percent of Wolverine Worldwide's outstanding shares of common stock as of March 13, 2017:18, 2020:
Amount and Nature of Beneficial Ownership of Common Stock | Amount and Nature of Beneficial Ownership of Common Stock | Amount and Nature of Beneficial Ownership of Common Stock | ||||||||||||||||||||||
Name and Address of Beneficial Owner | Sole Voting Power | Sole Investment Power | Shared Voting Power | Shared Investment Power | Total Beneficial Ownership | Percent of Class4 | | Sole Voting Power | | Sole Investment Power | | Shared Voting Power | | Shared Investment Power | | Total Beneficial Ownership | | Percent of Class3 | ||||||
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BlackRock, Inc.1 | 11,417,003 | 11,646,668 | - | - | 11,646,668 | 12.0% | | 12,504,053 | | 12,737,540 | | - | | - | | 12,737,540 | | 15.7% | ||||||
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Janus Capital Management LLC2 | 7,094,347 | 7,094,347 | 26,059 | 26,059 | 7,120,406 | 7.3% | ||||||||||||||||||
The Vanguard Group2 | | 121,949 | | 8,075,497 | | 14,538 | | 125,360 | | 8,200,857 | | 10.1% | ||||||||||||
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The Vanguard Group3 | 128,438 | 7,959,136 | 11,475 | 134,678 | 8,093,814 | 8.3% | ||||||||||||||||||
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STOCK OWNERSHIP BY MANAGEMENT AND OTHERS
The following table sets forth the number of shares of common stock beneficially owned as of March 13, 2017,18, 2020, by each of the Company's directors and named executive officers and all of the Company's directors and executive officers as a group:
| Amount and Nature of Beneficial Ownership of Common Stock1 | ||||||||||||||||||||||||||
| Deferred Stock Units, Sole Voting and/or Investment Power2,3 | Shared Voting or Investment Power4 | Stock Options5 | Total Beneficial Ownership | Percent of Class6 | |||||||||||||||||||||
Jeffrey M. Boromisa | 58,901 | 27,972 | 69,083 | 155,956 | * | |||||||||||||||||||||
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Gina R. Boswell | 9,481 | - | 35,644 | 45,125 | * | |||||||||||||||||||||
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Roxane Divol | 13,350 | - | 30,911 | 44,261 | * | |||||||||||||||||||||
| | | | | | | | | | | | | | | Jeffrey M. Boromisa | | 65,504 | | 54,152 | | 55,326 | | 174,982 | | * | | |
William K. Gerber | 38,061 | - | 58,773 | 96,834 | * | |||||||||||||||||||||
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Joseph R. Gromek | 104,443 | - | 81,701 | 186,144 | * | |||||||||||||||||||||
| | | | | | | | | | | | | | Gina R. Boswell | | 16,217 | | - | | 44,735 | | 60,952 | | * | | ||
Michael Jeppesen | 161,448 | - | 105,112 | 266,560 | * | |||||||||||||||||||||
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David T. Kollat | 300,776 | - | 79,021 | 379,797 | * | |||||||||||||||||||||
| | | | | | | | | | | | | | | Roxane Divol | | 22,241 | | - | | 40,002 | | 62,243 | | * | | |
Blake W. Krueger | 1,363,761 | 50,000 | 971,345 | 2,385,106 | 2.44% | |||||||||||||||||||||
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Brenda J. Lauderback | 58,996 | - | 59,213 | 118,209 | * | |||||||||||||||||||||
| | | | | | | | | | | | | | | William K. Gerber | | 44,383 | | - | | 55,326 | | 99,709 | | * | | |
Nicholas T. Long | 16,678 | - | 51,551 | 68,229 | * | |||||||||||||||||||||
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Timothy J. O'Donovan | 617,431 | - | 69,083 | 686,514 | * | |||||||||||||||||||||
| | | | | | | | | | | | | | Michael Jeppesen | | 26,693 | | - | | 51,988 | | 78,681 | | * | | ||
Michael D. Stornant | 153,917 | - | 140,364 | 294,281 | * | |||||||||||||||||||||
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Michael A. Volkema | 58,417 | - | 46,235 | 104,652 | * | |||||||||||||||||||||
| | | | | | | | | | | | | | | David T. Kollat | | 305,859 | | - | | 67,628 | | 373,487 | | * | | |
Richard J. Woodworth | 126,907 | - | 58,279 | 185,186 | * | |||||||||||||||||||||
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James D. Zwiers | 163,732 | 161,003 | 259,041 | 583,776 | * | |||||||||||||||||||||
| | | | | | | | | | | | | | | Blake W. Krueger | | 806,531 | | 50,000 | | 1,072,126 | | 1,928,657 | | 2.35% | | |
All directors and executive officers as a group (15 people) | 3,246,299 | 238,975 | 2,115,356 | 5,600,630 | 5.65% | |||||||||||||||||||||
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| | Brenda J. Lauderback | | 69,259 | | - | | 55,326 | | 124,585 | | * | | ||||||||||||||
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| | Nicholas T. Long | | 19,201 | | - | | 60,642 | | 79,843 | | * | | ||||||||||||||
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| | David W. McCreight | | - | | - | | - | | - | | | |||||||||||||||
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| | Todd W. Spaletto | | 63,903 | | - | | - | | 63,903 | | * | | ||||||||||||||
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| | Michael D. Stornant | | 161,805 | | - | | 145,842 | | 307,647 | | * | | ||||||||||||||
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| | Michael A. Volkema | | 65,136 | | - | | 55,326 | | 120,462 | | * | | ||||||||||||||
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| | James D. Zwiers | | 96,534 | | 176,158 | | 230,588 | | 503,280 | | * | | ||||||||||||||
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| | All directors and executive officers as a group (16 people) | | 1,808,025 | | 280,310 | | 1,964,460 | | 4,052,795 | | 4.88% | | ||||||||||||||
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2020 PROXY STATEMENT | | | | 30 |
| | | | Restricted Units | Performance Units | | | Restricted Units | Performance Units | |||||||
| | Krueger | | 69,196 | | 159,926 | | Boromisa | | 8,085 | * | - | | |||
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| | Jeppesen | | 13,100 | | 19,649 | | Boswell | | 3,645 | | - | | |||
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| | Stornant | | 15,570 | | 23,355 | | Divol | | 3,645 | | - | | |||
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| | Woodworth | | 14,643 | | 21,965 | | Gerber | | 3,645 | | - | | |||
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| | Zwiers | | 15,548 | | 23,321 | | Jeppesen | | 27,460 | | 44,234 | | |||
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| | Kollat | | 10,226 | * | - | | |||||||||
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| | Krueger | | 145,954 | | 366,115 | | |||||||||
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| | Lauderback | | 3,645 | | - | | |||||||||
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| | Long | | 8,085 | * | - | | |||||||||
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| | McCreight | | 3,781 | | - | | |||||||||
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| | Spaletto | | 28,468 | | 45,495 | | |||||||||
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| | Stornant | | 32,683 | | 52,729 | | |||||||||
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| | Volkema | | 8,085 | * | - | | |||||||||
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| | Zwiers | | 30,362 | | 48,310 | | |||||||||
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2017 PROXY STATEMENT
A LETTER FROM OUR COMPENSATION COMMITTEE
Dear Shareholders,
As members of the Wolverine Worldwide Compensation Committee, two of our most important responsibilities are to ensure that our executive compensation program pays for performance and aligns with the interests of our shareholders. The disappointing outcome of our 2016 say-on-pay vote was a signal by our shareholders that you took issue with some aspects of our executive compensation program, and we were determined to understand your perspectives on this program and committed to making constructive changes in response.
To accomplish this, the Committee launched a direct shareholder engagement initiative and retained a new independent executive compensation consultant to help us assess our current plans and programs. Since the Company's 2016 annual meeting, we have reached out to shareholders representing nearly two-thirds of our outstanding shares and had conversations with more than half of these shareholders – meeting with every shareholder who accepted our invitation. Our Committee Chairman Joseph Gromek led this effort and was present for all of the conversations we had with our investors. The purpose of these meetings was twofold – to gain a better understanding of the specific shareholder concerns with our executive compensation program and to also get feedback on a number of changes to the program that the Committee was considering.
After aggregating the shareholder feedback, sharing it with the full Board and deliberating as a Committee, we made significant changes to our executive compensation program and took targeted actions to reduce the CEO's 2016 and 2017 compensation. These changes reflect the thoughtful and constructive insights we received from our shareholders and are summarized below:
We have listened to shareholder concerns and have taken significant steps to address them and improve the Company's overall compensation program. We are committed to the ongoing evaluation and improvement of our executive compensation program to further enhance alignment with the interests of our shareholders. We welcome the opportunity to engage and encourage you to reach out with any questions or concerns related to our program. Correspondence can be addressed to the Compensation Committee care of the Corporate Secretary, as set forth on page 17 of this proxy statement.
Sincerely,
The Wolverine Worldwide Compensation CommitteeJoseph R. Gromek (Chairman), Jeffrey M. Boromisa, William K. Gerber, Nicholas T. Long
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2017 PROXY STATEMENT
Compensation Discussion |
| The Company's Compensation Discussion and Analysis ("CD&A") provides an overview and analysis of the executive compensation program for the Company's named executive officers ("NEOs"). For | ||
Blake W. Krueger | Chairman, Chief Executive Officer and President | |
Michael Jeppesen | President, | |
Todd W. Spaletto | President, Wolverine Michigan Group | |
Michael D. Stornant | Senior Vice President, Chief Financial Officer and Treasurer | |
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James D. Zwiers | ||
Compensation Philosophy and ObjectivesCOMPENSATION PHILOSOPHY AND OBJECTIVES
The Company's compensation philosophy is to provide executives with a competitive compensation package that is heavily weighted towards at-riskperformance-based (performance sharesunits and annual bonus)bonus opportunity) and variable (restricted stock and, prior to 2017, stock options)units) compensation in order to encourage superior business stock price and financial performance over the short and longer term and, by linking compensation with stock price performance, to closely align the interests of the Company's NEOs with those of its shareholders.shareholders without encouraging excessive risk-taking. The Compensation Committee (the "Committee") oversees the Company's executive compensation program.
The executive compensation program has four primary objectives:
Shareholder OutreachCompensation Decisions in Context: Key 2019 Accomplishments and Financial Highlights
The Company's say-on-pay proposal received insufficient support at2019 was a successful year for the 2016 annual meeting. Since that meeting,Company. Key financial highlights for the Company reached outin 2019 included the following:
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Below is a list of the key themes heard during Mr. Gromek's conversations with shareholders and the Committee's actions in response, with additional details provided below the chart:
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Near the end of 2016, Wolverine Worldwide announced a holistic, enterprise-wide business initiative designed to transform the Company to compete and win in the fast-changing global consumer retail environment — the WOLVERINE WAY FORWARD. It includes four critical components:
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Compensation Decisions in Context: Key 2016 Accomplishments and Financial Highlights
The Company performed well in 2016, despite broad-based slowing of consumer demand, destabilizing geopolitical events, the continued strengthening of the U.S. dollar, over-stored U.S. retail sector, and other macroeconomic factors that combined to create a volatile consumer retail environment around the world and a challenging year for companies in the retail, footwear, apparel and consumer soft goods industries, as well as companies with significant international footprints. Notwithstanding this, however, the Company finished 2016 with significant accomplishments against its strategic priorities outlined above.
Despite a solid year in the face of macroeconomic and industry headwinds, NEO compensation was below target on a number of measures and the Compensation Committee took additional actions, including:
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Year-Over-Year Change in CEO Pay
The graphic below presents the year-over-year change in the CEO's pay as disclosed in the Summary Compensation Table (SCT) on page 60, without impact of change in pension value. As shown, the year-over-year change in CEO's pay decreased from 2015 to 2016 by $2,342,955 or 23%.
Total CEO Pay*
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The below graphic shows the CEO's actual annual bonus compared to his target opportunity over the last three years and demonstrates a clear link between Company TSR performance and annual bonus achievement over these periods:
CEO 3-Year Target & Actual Bonus(in $000s)
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20162019 Compensation Program Overview
The Company's executive compensation program consists of base salary, annual bonus opportunity, long-term incentive compensation, and benefits. A breakdown of base salary, annual performance bonus, and long-term incentive compensation is illustrated below:
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Long-Term Incentive Program Mix
Based on shareholder feedback during the Committee's outreach, the Committee decided to modify the mix of vehicles used for long-term incentive compensation in 2017 and going forward. Beginning in 2017, the long-term incentive program does not utilize stock options and reflects a mix of 70% performance share units and 30% time-vested restricted share units for the CEO. For other NEOs, the 2017 mix changed to 60% performance share units and 40% time-vested restricted share units. This change is intended to strengthen the Company's pay-for-performance philosophy, create stronger alignment with shareholders and simplify the compensation program.
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Under the Company's compensation program, a significant portion of the compensation awarded to the NEOs generally, and to the CEO in particular, is at-riskat risk (contingent upon the attainment of various pre-established short and long-term financial goals) and variable (contingent on the performance of the Company's stock price). NEO compensation that is significantly at-riskat risk and variable incentivizes superior business stock price and financial performance and, by linking compensation with stock price performance, aligns the interests of executives with those of shareholders.
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2020 PROXY STATEMENT | | | | 33 |
The following graphic showsillustrates the percentage of at-risk and variable2019 NEO target compensation of the CEO and the average of the other NEOs:that is at risk:
CEO 2016 vs. 20172019 Target Total Compensation
Note: 2017 CEO equity grants were reduced by $500,000 compared to 2016 to respond to shareholder concerns regarding our 2016 say-on-pay vote. This one-time reduction is not reflected in the graphic above.
Other NEO 2016 vs. 20172019 Average Target Total Compensation
Long-Term Incentive Program Mix
The long-term incentive program is heavily weighted to at-risk compensation, with a mix of 70% performance stock units and 30% time vested restricted stock units for the CEO. For other NEOs, the 2019 mix was 60% performance stock units and 40% time vested restricted stock units.
| What we do | What we do not do | |
✓ Vast majority of pay is ✓ Stringent share ownership requirements (6x base salary for CEO) ✓ Broad-based clawback policy ✓ Significant vesting horizon for equity grants ✓
✓ Independent Compensation Committee Consultant ✓ Review executive compensation program to ensure it doesn't promote excessive risk taking ✓ Proactively engage with top shareholders on compensation and governance issues ✓ Conduct annual say-on-pay votes ✓ Balance short-term and long-term incentives | ✗ No dividends or dividend equivalents on unearned performance ✗ No repricing or replacing of underwater stock options ✗ No overlapping metrics ✗ No excessive or unnecessary perquisites ✗ No hedging, pledging, or short sales of Company stock ✗ No excise tax gross-ups in change-in-control agreements for new officers (hired after 2008) |
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2017 PROXY STATEMENT
COMPENSATION DISCUSSION AND ANALYSIS IN DETAILCompensation Discussion and Analysis
2016 Compensation Program Overview2019 COMPENSATION PROGRAM OVERVIEW
Each February, the Committee recommends (and the independent directors approve) target compensation for the CEO for the upcoming year after considering the latest available information, including the Company's TSR and other business and financial performance, information provided by the Company'sCommittee's compensation consultant regarding executive compensation trends and compensation paid to other chief executive officers of companies in the comparativecompensation peer group (described below), and information provided by management on recent Company performance and the Company's future business and financial outlook. The Committee's goal is to set the CEO's compensation in-linein line with the anticipated market median compensation for that year.
Given the significant weight the Company's executive compensation program places on at-riskat risk and variable compensation, the compensation realized by the CEO and NEOs can be significantly affected, both positively and negatively, by performance against the various operational and financial performance metrics pre-established by the Committee and by the performance of the Company's stock price.stock. The Board and Committee believe such a compensation program aligns the interests of the CEO and other NEOs with the interests of the shareholders.
The Company's executive compensation program consists of four primary elements: base salary, annual bonus opportunity, long-term incentive compensation and benefits. These elements are described in greater detail below.
As part of approving an NEO's base salary, the Committee considers a variety of factors including individual responsibilities, experience, skills, and potential to affect Wolverine Worldwide's overall performance, as well as market surveys and peer group information. The Committee considers these compensation factors subjectively, and no single factor or combination of factors was determinative in setting base salaries for any NEO.NEO for fiscal year 2019.
Based on the above factors, the Committee approved the 20162019 base salaries for the NEOs as noted in the following table. The Committee held CEO salary flat in 2019 for the thirdfifth year in a row (andand held it flat again in 2017). Mr. Jeppesen's increase reflects,2020. The 2-5% base salary increases for Messrs. Jeppesen, Spaletto, Stornant and Zwiers in part,2019 were based on their performance evaluations as well as consideration of peer group and broad-based industry compensation data, as described in detail below. Like the fact that he took on significant additional responsibility as President ofCEO salary, the Wolverine Heritage GroupCommittee held these base salaries flat in 2016. Mr. Woodworth's increase reflects, in part, his promotion from a brand president to a brand group president in 2016.2020.
Name | 2016 Base Salary | 2015 Base Salary | 2019 Base Salary | 2018 Base Salary | ||||
Krueger | $1,150,000 | $1,150,000 | | $1,150,000 | | $1,150,000 | ||
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Jeppesen | $575,000 | $530,000 | | $625,000 | | $607,000 | ||
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Spaletto | | $630,000 | | $600,000 | ||||
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Stornant | $550,000 | $520,000 | | $630,000 | | $600,000 | ||
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Woodworth | $550,000 | $488,632 | ||||||
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Zwiers | $645,000 | $628,000 | | $685,000 | | $670,000 | ||
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2017 PROXY STATEMENT
In 2016,2019, each NEO had the opportunity to earn annual cash incentive compensation ("annual bonus"), consisting of two parts, a performance bonus and an individual performance bonus:bonus, and further subject to a modifier:
| Key Factors | ||||
| Performance Bonus | • Based on performance measured against Company and/or business unit performance criteria established at the beginning of • Payout determined by comparing performance against four performance levels set for each pre-set criterion: threshold, | • Revenue • Adjusted pretax earnings | ||
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| Individual Performance Bonus | • Measured against individual performance criteria • Each NEO's payout was determined by comparing individual performance against specific individual criteria set at the beginning of • Payouts can range from 0% to 200% depending on the NEO's performance against individual performance objectives | • Vary by each NEO | ||
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| Modifier | • Total payout based on the above two components adjusted up or down by up to 25% based on year-end backlog | • +/– 25% year-end backlog modifier | ||
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A percentage of each NEO's 20162019 base salary was set as the annual bonus target percentage (the "Target Bonus Percentage"). The Target Bonus Percentage represents the percentage of each NEO's base salary that could be earned as annual incentive compensation at a "target" performance level (100% payout) for each of the performance bonus and individual performance bonus. Generally, the Committee sets higher Target Bonus Percentages for individuals with greater influence on business strategy, profit or sales. This puts a larger percentage of an NEO's total potential cash compensation "at-risk,"at risk, in line with the NEO's ability to influence these factors. For 2019, the NEOs had the following Target Bonus Percentages: Mr. Krueger 140%, Mr. Jeppesen 55%, and Mr. Stornant 60%, Mr. Spaletto 55%, and Mr. Zwiers 55%.
The Committee selected fiscal year 20162019 revenue and adjusted pretax earnings as metrics for the annualperformance bonus because it believes a strong correlation exists between performance on these financial measures and increases in shareholder value. The Committee also continued to include a year-end backlog modifier for 2019 to more directly align with the Company's focus on go-forward revenue growth.
Messrs. Krueger and Stornant had significant influence on the Company's overall business performance and, accordingly, their respective performance bonus opportunity (85% of their total annual bonus opportunity) is based on the Company performance criteria only. Messrs. Jeppesen, WoodworthSpaletto and Zwiers were directly responsible for specific business units and exert a significant influence on those business units in particular, in addition to influencing Company performance. Accordingly, for each of these NEOs, a largerlarge percentage of their overall annual bonus opportunity was based on business unit performance, with a smaller percentage based on the Company's performance, as reflected in the table on page 51.40.
As shown in the table below, the Committee also set four performance levels for each criterion: threshold (25% payout)payout for pretax; 50% for revenue), target (100% payout), goal (150% payout) and stretch (200% payout). The Committee set the revenue and pretax earnings goals for these performance levels following a review of the Company's operating plan, historical performance, and industry and macroeconomic conditions. The performance targets though lower than 2015 targets, were set aggressively, in lightincluding setting the revenue performance at target (100%) at the high end of the difficult industry and macroeconomic conditions discussed in the "Compensation Decisions in Context: Key 2016 Accomplishments and Financial Highlights" section, as evidenced by only a 68%Company's initial 2019 guidance. Performance targets required for 100% payout on both revenue and pretax earnings were set above 2018 performance that met the Company's original revenue guidance for the year.targets and 2018 actual results.
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2020 PROXY STATEMENT | | | | 36 |
| Company Performance Level | in millions | in millions | ||||||||
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| (% of Target Payout)1 | Revenue2,3 | Pretax Earnings2,3 | Revenue2 | Adjusted Pretax Earnings2,3 | ||||||
| Threshold (25%) | $2,344 | $164.1 | ||||||||
| Threshold (25% for pretax; 50% for revenue) | | $2,250 | | $247.0 | | |||||
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| Target (100%) | $2,608 | $193.6 | | $2,330 | | $277.0 | | |||
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| Goal (150%) | $2,701 | $209.4 | | $2,390 | | $295.0 | | |||
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| Stretch (200%) | $2,796 | $225.7 | | $2,445 | | $312.0 | | |||
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2017 PROXY STATEMENT
For each business unit, the Committee sets the revenue and adjusted pretax earnings goals at substantially similar levels of difficulty as the goals for the Company and with a similar degree of difficulty as in prior years. The below table shows historical weighted performance levels achieved by the business units using these performance criteria for the years for which a meaningful comparison can be made.
| Historical Group Performance1 | Historical Group Performance1 | |||||||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||
| Sourcing/Owned Manufacturing/Leathers | Between target and goal | Between goal and stretch | Between target and goal | Between target and goal | Between threshold and target | |||||||||||||||
| Wolverine Michigan Group | Below threshold | Between threshold and target | Between target and goal | Below threshold | Below threshold | |||||||||||||||
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| Wolverine Boston Group | Between threshold and target | Below threshold | Below threshold | Between threshold and target | N/A | |||||||||||||||
| Sourcing / Leathers / Distribution | Between threshold and target | Between threshold and target | Between target and goal | Between target and goal | Between goal and stretch | |||||||||||||||
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| Wolverine Heritage Group | Between threshold and target | Below threshold | Between target and goal | Between threshold and target | Below threshold | |||||||||||||||
| International Group | Between threshold and target | Between target and goal | Between target and goal | Between target and goal | Between target and goal | |||||||||||||||
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| Wolverine Outdoor & Lifestyle Group | Between threshold and target | Between target and goal | Between target and goal | Between target and goal | Below threshold | |||||||||||||||
| eCommerce | Between target and goal | Between threshold and target | Between target and goal | Between threshold and target | N/A | |||||||||||||||
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| Stores | Below threshold | Between threshold and target | Between threshold and target | N/A | N/A | |||||||||||||||
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In February 2017,2020, the Committee certified actual 20162019 performance compared to the performance levels for the Company and business unit criteria. The Company's fiscal year 20162019 revenue was approximately $2.495$2.274 billion, which was between threshold and target level. The Company's adjusted pretax earnings for fiscal year 20162019 were $181.0$238.8 million, which was between threshold and target level.below threshold. The weighted average results for the applicable performance criterion are shown in the below table:
| Overall Weighted Payout by Group | ||||
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| International Group | Between Threshold and Target | 58% | ||
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| eCommerce | Between Target and Goal | 107% | ||
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| Stores | Below Overall Threshold | 44% | ||
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2020 PROXY STATEMENT | | | | 37 |
For 2016,2019, the Company paid the NEOs the following amounts relating to the performance bonus.
| Name | Performance Bonus Opportunity (as a % of an NEO's Target Percentage) | Performance Bonus Percentage Earned1 | Performance Bonus Paid1,2 | Performance Bonus (as a % of Total Annual Bonus Opportunity)1 | Performance Bonus Opportunity (as a % of an NEO's Target Percentage)1 | Performance Bonus Percentage Earned1,2,3 | Performance Bonus Paid1,2,3 | |||||||||
| Krueger | 0 - 200% | 68% | $831,376 | 85% | 0 - 200% | 29% | $399,055 | |||||||||
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| Jeppesen | 0 - 200% | 88% | $229,888 | 85% | 0 - 200% | 62% | $181,385 | |||||||||
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| Spaletto | 85% | 0 - 200% | 10% | $30,034 | ||||||||||||
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| Stornant | 0 - 200% | 68% | $173,299 | 85% | 0 - 200% | 29% | $92,833 | |||||||||
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| Woodworth | 0 - 200% | 53% | $123,655 | |||||||||||||
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| Zwiers | 0 - 200% | 57% | $172,529 | 85% | 0 - 200% | 55% | $174,419 | |||||||||
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At the same time Target Bonus Percentages are set, the CEO approves measurable personal objectives for each NEO's individual bonus, other than for himself. The CEO submits, and the Committee reviews and approves, with such changes as it considers appropriate, the CEO's personal objectives. Such measurable personal objectives may include goals such as executing strategies supporting the Company's vision, developing employees, growing new business initiatives and driving operational excellence. Performance is evaluated by the CEO (or, in the case of the CEO, by the Committee and the other independent
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2017 PROXY STATEMENT
directors) based on qualitative and quantitative factors. Summaries of the specific personal objectives for each NEO are outlined in the table below:below, along with unweighted performance levels achieved on each measure in parenthesis:
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Each personal objective is given a rating from "does not achieve" to "far exceeds,"exceptional," with weighted performance ratings and payouts consistent with the following table:
| Personal Objectives Rating | |||||||
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| Achieves Some But Not All | | | 50% | | | ||
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| Does Not Achieve | | | 0% | | | ||
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2020 PROXY STATEMENT | | | | 38 |
The CEO recommended, and the Committee approved, the 20162019 cumulative weighted personal objectives scores and payout levels for each of the NEOs other than himself. The Committee and the other independent directors of the Board met with the CEO at the end of the year to evaluate his performance against his personal objectives. The Committee determined the cumulative weighted personal objectives score for the CEO and recommended to the independent directors of the Board the CEO's payout level. The individual bonus payout for each NEO other than the CEO, as shown in the accompanying table, was determined by multiplying the bonus percentage achieved by 15% (representing the percentage of the individual bonus to the total annual bonus opportunity) of the Target Bonus Percentage. The Committee used negative discretion to reduce the CEO's individual performance bonus to $0 in response to shareholder feedback received in its engagement efforts.
Name | 2016 Individual Bonus Opportunity (as a % of an NEO's Target Percentage) | Personal Objectives Rating | 2016 Individual Bonus Percentage Achieved | 2016 Individual Bonus Paid | Individual Performance Bonus (as a % of Total Annual Bonus Opportunity) | 2019 Individual Bonus Opportunity (as a % of an NEO's Target Percentage) | 2019 Individual Bonus Percentage Achieved | 2019 Individual Bonus Paid | | ||||||||||
Krueger | 0 - 200% | Achieves most but not all | 65% | $0 | | 15% | | 0 - 200% | | 67% | | $161,201 | | | |||||
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Jeppesen | 0 - 200% | Achieves | 100% | $46,129 | | 15% | | 0 - 200% | | 125% | | $64,096 | | | |||||
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Spaletto | | 15% | | 0 - 200% | | 80% | | $41,199 | | | |||||||||
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Stornant | 0 - 200% | Achieves most but not all | 65% | $29,215 | | 15% | | 0 - 200% | | 85% | | $47,754 | | | |||||
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Woodworth | 0 - 200% | Achieves | 100% | $41,161 | |||||||||||||||
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Zwiers | 0 - 200% | Achieves most but not all | 65% | $34,430 | | 15% | | 0 - 200% | | 85% | | $47,833 | | | |||||
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Backlog Modifier
The Committee maintained a backlog modifier for 2019 to continue to align with the Company's focus on revenue growth. The Committee set the following backlog modifier for 2019.
Company and Brand/Group Backlog1,2 | ||
Exceeded Backlog Growth Target | | +2x |
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Achieved Backlog Growth Target | | No Adjustment |
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Did Not Achieve Backlog Growth Target | | –2x |
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At the Company and Brand/Group levels, a 2x modification was applied to each percentage increase (positive modification) or decrease (negative modification) above or below a threshold increase level, capped at +/– 25%, based on average backlog at the end of the last three weeks of the 2019 fiscal year compared to the same periods during the 2018 fiscal year. The backlog modifier reduced overall payouts by 25%, and the resulting reductions in overall payouts are reflected in the table below in the "Backlog Multiplier" column.
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2017 PROXY STATEMENT
Consistent with the 2015 bonus opportunity, eachEach NEO's total annual bonus opportunity for 20162019 ranged from 0% to 200% of the Target Bonus Percentage.Percentage before applying the backlog modifier. The accompanying table shows the total aggregate annual incentive compensation payout earned by each NEO for 2016,2019, as well as the portion of that aggregate number that is attributable to the performance bonus and individual bonus.performance bonus and the effect of the backlog modifier.
| | Annual Bonus Compensation Component as a Percentage of Target Bonus Performance | ||||||||||||||||||||||||||||||||||||||||||
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| | Performance Bonus Percentage By Company or Business unit as a Percentage of Target Bonus Percentage | ||||||||||||||||||||||||||||||||||||||||||
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| | 2016 Target Percentage | | Total Individual Performance Bonus as a Percentage of Target Percentage | | Company1 | | Wolverine Outdoor & Lifestyle Group2 | | Wolverine Boston Group3 | | Wolverine Heritage Group | | Sourcing4 | | Owned Manufacturing4 | | Leathers4 | | 2016 Performance Bonus | | 2016 Individual Performance Bonus | | Total 2016 Actual Annual Bonus Compensation | | % of 2016 Actual Incentive Target | | |||||||||||||||||
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Krueger | 125 | % | | 15 | % | | 85 | % | | | | | | | | | | | | | $ | 831,376 | $ | 0 | $ | 831,376 | 58 | % | |||||||||||||||
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Jeppesen5 | 55 | % | | 15 | % | | 40 | % | | | | | | 10 | % | | 20 | % | | 10 | % | | 5% | $ | 229,888 | $ | 46,129 | $ | 276,017 | 90 | % | ||||||||||||
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Stornant | 50 | % | | 15 | % | | 85 | % | | | | | | | | | | | | | $ | 173,299 | $ | 29,215 | $ | 202,514 | 68 | % | |||||||||||||||
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Woodworth | 40 | % | | 15 | % | | 30 | % | | | | 55 | % | | | | | | | | | $ | 123,655 | $ | 41,161 | $ | 164,816 | 60 | % | ||||||||||||||
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Zwiers | 55 | % | | 15 | % | | 30 | % | | 55 | % | | | | | | | | | | | $ | 172,529 | $ | 34,430 | $ | 206,959 | 59 | % | ||||||||||||||
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Based on feedback from shareholders andOverall NEO annual bonus paid out below target levels, including for the CEO, in a year when the Company's TSR performance was at the 62nd percentile of its peer group. Further, the following graph shows the CEO's target bonus opportunity compared to create even strongerhis actual bonus earned over the last three years, which demonstrates the Company's pay for performance philosophy in action. There is clear directional alignment between NEO compensationthe Company's TSR performance and the Company's strategic objectives, the Committee added adjusted operating margin to the 2017CEO's annual bonus plan as a modifier to adjust, up or down,achievement over this period, during which the calculated payments generated usingCompany's TSR performance was at the following metrics:80th percentile of its current peer group.
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2017 PROXY STATEMENT
Long-Term Incentive CompensationLONG-TERM INCENTIVE COMPENSATION
In 2016,2019, each NEO had the opportunity to earn long-term incentive compensation reflected ascomprised of a mix of performance sharesshare units and time-based stock options and restricted stock unit awards.
| Key Factors | Performance Share Metrics1 | |||
| Performance | • Performance • Awards balance focus on | • Fully diluted adjusted EPS (65%) • Adjusted Business Value Added ("BVA")2 (35%) | ||
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| Time-Based Stock Unit Awards | • Encourages employee retention and rewards increases in stock price | |||
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The Committee believes EPS is a key metric that plays an important role in driving shareholder value and that it further aligns the interests of the NEOs with other shareholders. The Committee believes that BVA is useful for determining incentive compensation because it ties the income statement (profit delivery) to the balance sheet (effective asset utilization) and does not focus on one to the exclusion of the other. The Committee further believes that focusing NEOs' interests on increasing BVA aligns their interests more closely with shareholder interests. The use of both EPS and BVA balances the NEOs' focus on near-termnear term profitability with longer-termlonger term shareholder value; these measures received positive shareholder feedback during the Committee's shareholder outreach.value. The Committee weighted EPS 65% and BVA 35% when determining the overall performance level. For the 2019-2021 performance period, the
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2020 PROXY STATEMENT | | | | 41 |
Committee included a relative TSR modifier that provides a 25% positive adjustment to total payout for TSR performance in the top quartile of the Company's peer group and a 25% negative adjustment to total payout for performance in the bottom quartile of the peer group.
The Committee has chosen to provide long-term incentives in these forms because they incentivize and motivate different behaviors. Performance sharesshare units reward the achievement of key business criteria. Time-based stock options encourage employee retention and only reward employees if the stock price appreciates after the grant. Time-based restricted stock encouragesunits encourage employee retention by providing some level of value to executives who remain employed during the vesting period. RestrictedThe use of restricted stock units also supports an ownership culture and thereby encourages executives to take actions that are best for the Company's long-term success. Both forms of long-term incentive compensation reward increased Company stock price.
2017-2019 Performance SharesStock Units
The following table lists the performance levels set by the Committee for performance sharestock unit awards granted for the 2014-20162017-2019 performance period, (and, for Mr. Krueger, a 2015-2016 performance period) the vesting of which occurred on February 8, 20175, 2020 following the Committee's certification of 2014-20162017-2019 financial results. The performance share grant to Mr. Krueger for the 2015-2016 performance period was subject to EPS and BVA performance targets set at levels consistent with the EPS and BVA levels that remained outstanding under his original performance share grant for the 2014-2016 period, as well as an additional requirement that the Company's aggregate 2015 and 2016 revenue exceed $5.1 billion.
Performance level | Cumulative EPS for the 2014-2016 period1 | Cumulative BVA for the 2014-2016 period1 (in millions) | ||||||
Performance Level | Cumulative EPS for the 2017-2019 period1 | Cumulative BVA for the 2017-2019 period1 (in millions) | ||||||
Threshold (50%) | $4.61 | $343.8 | $4.63 | $336.3 | ||||
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Target (100%) | $5.13 | $381.4 | $5.02 | $370.1 | ||||
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Goal (150%) | $5.67 | $407.2 | $5.41 | $403.9 | ||||
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Stretch (200%) | $6.12 | $449.4 | $5.80 | $440.9 | ||||
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2017 PROXY STATEMENT
In February 2017,2020, the Committee evaluated the Company's performance for the 2014-20162017-2019 performance period (and, in addition, for Mr. Krueger,against the 2015-2016 performance period) against these criteria set forth in the table above and certified that the Company's performance on both the EPS criteria and on the BVA criteria fell between threshold and targetwas above the stretch performance levels for both periods (and, for Mr. Krueger, that the Company's aggregate 2015-2016 revenue exceeded $5.1 billion).level. The Committee weighted the EPS attainment ($4.96; 84%5.84; 200% of target performance) at 65% and the BVA attainment ($361.3468.5 million; 73%200% of target performance) at 35%, resulting in a weighted average performance of 80%200%. During the 2017-2019 performance period, the Company's TSR performance was at the 69th percentile of its peer group so no TSR adjustment was made.
The vesting offollowing table lists the number of shares is shownstock units that vested for each NEO inunder the accompanying table.2017-2019 performance stock unit grant. In calculating the number of sharesstock units that vest, the Company uses the stock price on the date of the grant, which results in the NEOs bearing the risk of stock price performance during the performance period.
The following table lists the number of shares that vested for each NEO under the 2014-2016 performance share grant (and also, for Mr. Krueger, with respect to his 2015-2016 award):
Name | | (#) | ||
Krueger | ||||
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Jeppesen | ||||
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Spaletto | 40,088 | |||
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Stornant | ||||
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Zwiers | ||||
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20162019 Performance ShareStock Unit Awards
In the beginning of 2016,2019, the Committee evaluated each NEO's long-term incentive target payout opportunity expressed as a percentage of base salary that would apply todollar amount at target grant value for the grant of performance shares for the 2016-2018 period. Determining that these opportunities remained set at appropriate levels, the Committee made no changes to the 2016-2018 target percentage from those in effect for the 2015-2017 performance period. The number of performance shares granted to the NEOs for the 2016-2018 performance period is set forth in the "Grants of Plan-Based Awards" table below and approximates the estimated maximum bonus payout the NEO could earn for the2019-2021 period. Like performance shares granted for the 2015-20172018-2020 performance period, performance sharesunits are eligible to vest based on achievement of adjusted constant-currency EPS goals (weighted 65%) and adjusted constant-currency BVA goals (weighted 35%). An NEO may earn none, some, all, or alla multiple of the performance sharesunits granted, depending on Company performance against the EPS and BVA targets and base salary and target bonus percentagetargets over the three-year performance period. For the 2019-2021 performance period, the Committee included a relative TSR modifier that provides a 25% positive adjustment for TSR
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2020 PROXY STATEMENT | | | | 42 |
performance in the top quartile of the Company's peer group and a 25% negative adjustment for performance in the bottom quartile of the peer group.
Name | | 2016-2018 Target Percentage | 2015-2017 Target Percentage | | |||||||
Krueger | | | 200% | | | | 200% | | | ||
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Jeppesen | | | 55% | | | | 55% | | | ||
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Stornant | | | 55% | | | | 55% | | | ||
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Woodworth | | | 55% | | | | 55% | | | ||
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Zwiers | | | 55% | | | | 55% | | | ||
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Name | | 2019-2021 Target1 | ||
Krueger | | $4,042,500 | | |
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Jeppesen | | $488,400 | | |
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Spaletto | | $502,320 | | |
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Stornant | | $579,120 | | |
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Zwiers | | $533,400 | | |
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The Company accrues, but does not pay, any dividends on any performance sharesunits during the performance period. Once the Committee certifies the Company's performance compared to the pre-determined performance criteria, the restrictions on some, all, none, or nonemultiple of the performance sharesshare units awarded to each NEO will lapse at that time,vest, and the NEO will receive accrued dividends only on the shares actually earned.
The Committee goes through a rigorous process in setting three-year EPS and BVA performance targets, including a careful review of the Company's prior year business and financial performance, current year operating plan and future expectations. To achieve target level EPS and BVA for the 2016-2018 performance period, the Company would needrequire upper- to achieve compounded annual EPS and BVA growth over the
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2017 PROXY STATEMENT
most recently completed fiscal year's actual results in the mid- and low-singlemid-single digit range, respectively, with double-digit compounded annual growth requiredpercentages, respectively, over the performance period based on both EPS and BVA to achieve stretch2018 actual performance.
Stock Option Grants and Restricted Stock Unit Awards
The accompanying table reflects the grant-dategrant date value of the regular, annual service-based restricted stock award and stock option grantunit awards granted to each NEO. Except for Messrs. Stornant and Woodworth, who both received promotions between the time of the 2015 and 2016 grants, the value of awards was the same as in 2015.
Name | | Time-vested Restricted Stock | Time-vested Stock Options | |
Krueger | | $2,085,000 | | $1,390,000 |
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Jeppesen | | $255,000 | | $170,000 |
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Stornant | | $348,000 | | $232,000 |
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Woodworth | | $316,200 | | $210,800 |
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Zwiers | | $316,200 | | $210,800 |
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Name | | 2019 Time-vested Restricted Stock Units | | |||
Krueger | | | $1,732,529 | | | |
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Jeppesen | | | $325,613 | | | |
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Spaletto | | | $334,907 | | | |
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Stornant | | | $386,113 | | | |
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Zwiers | | | $355,619 | | | |
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A stock option's exercise price is set at the closing market price of the Company's common stock on the grant date. The Committee generally grants annual equity awards at its regularly scheduled February meeting, and the independent directors of the Board approve equity grants to the CEO generally on the same day that the Committee meets. Stock option grantsRestricted stock units awarded vest in equal annual installments over three years. The restrictions20% on restricted stock awards typically lapse 25%the first and second anniversaries of the grant and 30% on the third and fourth anniversaries of grant and 50% on the fifth anniversary.
Approximately 60% of the combined value of the regular annual restricted stock and stock option grant awarded to each NEO in 2016 was in the form of restricted stock and 40% was in the form of stock options. These were the same approximate percentages as in 2015 and in each of the past five years.
In addition to the annual equity grants described above, Messrs. Stornant, Jeppesen, and Zwiers each received a retention grant of 20,000 shares of restricted stock and Mr. Woodworth received a retention grant of 5,000 shares of restricted stock. The retention grants were made, in part, to maintain stability within senior management in light of recent turnover. Mr. Jeppesen also received a grant of 10,000 shares for assuming additional responsibilities as President of the Wolverine Heritage Group, in addition to his continuing as President of the Global Operations Group. Restrictions on these shares lapse 25% on the third and fourth anniversary of grant and 50% on the fifth anniversary.
2017 Long-Term Incentive Plan Update
Based on feedback from shareholders and to create even greater alignment with shareholders, the Compensation Committee decided to add a three-year relative Total Shareholder Return ("TSR") modifier to the 2017-2019 performance unit grant. TSR will be benchmarked relative to the Russell 3000 Consumer Discretionary Index. The number of shares that vest, if any, will be increased by 25% for top-quartile TSR performance and will decrease by 25% for bottom-quartile relative TSR performance.
The Committee stopped granting options beginning with 2017 long-term incentive compensation. The Committee also shifted NEO long-term incentive compensation to a much heavier weighting on performance units (70% for the CEO and 60% for other NEOs), the Company's most at-risk pay element, and adjusted the vesting schedule of restricted stock units to four years (options had previously vested over three years and restricted stock over five years). The Committee also implemented a "double-trigger" equity vesting for all 2017 equity grants.anniversaries.
Retirement, Deferred CompensatonCompensation and Welfare Plans
The NEOs participate in Wolverine Worldwide's medical and dental plans and receive life and disability insurance. In 2016,2019, Messrs. Krueger, Jeppesen, Stornant, and Zwiers also participated in the Wolverine Worldwide Employees' Pension Plan (a defined benefit plan) and the
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2017 PROXY STATEMENT
Wolverine World Wide, Inc. 409A Supplemental Executive Retirement Plan (an unfunded, non-qualified plan). For a description of the benefits under Wolverine Worldwide's retirement plans, see "Pension Plans and 20162019 Pension Benefits" below.
All of full-timefull time employees of the Company in the United States, including the NEOs, are also eligible to participate in one of Wolverine's 401(k) Plans (the "401(k) Plan"). Pursuant to the 401(k) Plan, employees, including the NEOs, may elect to defer a portion of their salary and receive a Company match on eligible deferrals of up to 3% of salary for 2016 (4.5%2019 (5.5% for those who do not participate in the Pension Plan), subject to limits set forth in the Internal Revenue Code of 1986, as amended. In 2016, the Company adopted the Wolverine Worldwide Executive Deferred Compensation Plan (the "Deferred Compensation Plan"). This plan allows directors, executives and other eligible senior
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2020 PROXY STATEMENT | | | | 43 |
employees of the Company to elect to defer a portion of their eligible compensation. Wolverine Worldwide may, but need not, credit a participant with an additional discretionary Company contributions. Nocontribution. In 2019, the Company made a discretionary voluntary contribution to the Deferred Compensation Plan on behalf of Mr. Spaletto, taking into account internal equity considerations given that he is not a participant in the Company's Employees' Pension Plan or Supplemental Executive Retirement Plan. The Company did not make any discretionary contributions were madeon behalf of any other NEO in 2016.2019. The Company adopted the Deferred Compensation Plan as a retention and recruitment tool to facilitate retirement savings and provide financial flexibility for key employees, and because many of the companies with which we competeit competes for executive talent provide similar plans to their key employees. For a description of the benefits under the Deferred Compensation Plan, see "Nonqualified"Non-qualified Deferred Compensation"Compensation" below.
The Company provides limited perquisites to NEOs. The Company feels the perquisites that are provided round out a competitive total compensation package for each NEO. For details on perquisites, see footnote 65 to the "Summary"Summary Compensation Table"Table" on pages 60-61.page 49.
Post-Employment CompensationPOST-EMPLOYMENT COMPENSATION
Each NEO is party to an Executive Severance Agreement that provides for certain payments and benefits upon termination of employment after a change in control of Wolverine Worldwide. The Board believes Executive Severance Agreements will promotemotivate management to actively pursue a business transaction that is in the best interests of the shareholders, even if it could ultimately result in his or her job elimination, and promotesalso will promote management stability during the transition period accompanying a change in control. Each NEO is eligible to receive compensation if his employment is terminated within two years (Messrs. Jeppesen, Spaletto, Stornant Woodworth and Zwiers) or three years (Mr. Krueger) following a change in control of Wolverine Worldwide. Even following a change in control, an NEO does not receive payment under the Executive Severance Agreement if his employment terminates:
NEOs may also be eligible under Wolverine Worldwide's retirement plans or equity plans to receive certain payments and benefits upon termination of employment or in connection with a change in control. The Committee believes that accelerated vesting upon a changecontrol as described in control is appropriatethe "Potential Payments Upon Termination or Change in some circumstances because, by protecting a significant componentControl" section of the NEO's total compensation, the acceleration of equity vesting (1) mitigates potential conflicts of interest that might arise between the NEOs and the shareholders, and (2) serves as a substantial incentive for those NEOs to obtain the highest possible value for the shareholders if the Company becomes an acquisition target. The Committee also retains the discretion to modify the accelerated vesting.this Proxy Statement.
Mr. Krueger is also party to a 20072008 Separation Agreement under which he receives certain payments and benefits if the Company terminates his employment, even if not following a change in control, other than for "cause" or if he terminates his employment for "good reason." The Committee determined upon appointing Mr. Krueger as CEO that, given the Company's strategic initiatives the Board had asked him to lead, it was appropriate for the Company to enter into a separation arrangement. You will find
The Company includes accelerated retirement vesting provisions for equity awards, provided certain conditions are met, and for the payout of a prorated annual bonus for a qualifying retirement more than six months into the fiscal year. Details on these provisions and information on benefits payable to Mr. Krueger under his Separation Agreement and to each other NEO andof the specific elements comprising the payments and benefitsNEOs under the Separation Agreement, Executive Severance Agreements, andas well as information on the other retirement and equity plans of Wolverine Worldwide, are included in the "Potential Payments Upon Termination or Change in Control" section of this proxy statement.Proxy Statement.
We asked shareholders to vote on a "say-on-pay" advisory vote on our executive compensation in 2019. Shareholders expressed substantial support for the compensation of our named executive officers, with approximately 98% of the votes cast for the say-on-pay advisory vote. The Committee carefully evaluated the results of the 2019 advisory vote. The Committee also considers many other factors in evaluating our executive compensation programs as discussed in this Compensation Discussion and Analysis, including the Committee's assessment of total shareholder return, the interaction of our compensation programs with our corporate business objectives, evaluations of our programs by external consultants, and review of peer group and survey data, each of which is evaluated in the context of the Committee's fiduciary duty to act as the directors determine to be in shareholders' best interests. While each factor bore on the Committee's decisions regarding our named executive officers' compensation, the Committee made no changes to our executive compensation program and policies directly as a result of the 2019 say-on-pay advisory vote.
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2017 PROXY STATEMENT
The Committee goes through a rigorous process in setting performance targets, including a careful review of the Company's prior year business and financial performance, current year operating plan, and future expectations. The Committee engages with management in this process over several months leading up to setting final annual bonus and three-year performance targets in February. The rigor of this process is demonstrated by the below-target annual bonus payout for 2016, a year in which the Company met its original revenue and adjusted earnings per share guidance and delivered TSR of 32.9%, putting it in the top decile of its peer group.
Competitive Philosophy and Competitive Market Data
When making compensation recommendations and decisions, the Committee considers the CEO's assessment of the performance of each NEO, other than himself; the performance of the individual and the individual's respective business unit or function; the scope of the individual's responsibilities, years of experience with the Company (or in similar positions with other companies), skills and knowledge; market compensation data; market and economic conditions; Company performance; retention considerations; and Wolverine Worldwide's compensation philosophy (collectively, the "compensation factors"). The Committee considers these compensation factors both subjectively and objectively, and no single factor or combination of factors is determinative. With respect to CEO compensation, the Committee seeks to set compensation in line with the anticipated market median for a given year.
The Compensation Committee terminated its engagement with Willis Towers Watson in 2016, at which time it selected and engaged another independent compensation consultant, Frederic W. Cook & Co. ("FW Cook"), to provide services beginning in September 2016. The Committee uses market surveys and Peer Group (as defined below) information provided by its compensation consultant as market reference points. The Committee also considers information the Company learns through recruiting NEOs and the experience levels and responsibilities of NEOs prior to joining the Company as reference points in setting NEO compensation.
As part of its competitive data review in connection with determining 20162019 compensation, the Committee considered information presented by Willis Towers Watsonits consultant Frederic W. Cook & Co. ("FW Cook") based on publicly-disclosed Peer Group information and on threetwo published compensation surveys: (1) 20152018 Willis Towers Watson Data Services(WTW) CDB Executive Compensation Survey Report on Top Management Compensation – RetailReport; and Wholesale Trade Industry Cut, (2) 2015 Towers Watson Compensation Database Executive Database – Retail/Wholesale Executive Database, and (3) 20152018 US MBD Mercer Benchmark Database Executive – General, Retail Industry Cut.Survey.
The Committee, with input from Willis Towers Watson (the Committee's former independent compensation consultant), establishedBelow is the following peer group for useused in setting 2016 NEOlate 2018 and early 2019 in connection with 2019 compensation (the "Peer Group").decisions. In determining the Peer Group, the Committee considersconsidered each potential peer company's industry, channels of distribution, revenue and market capitalization. The Company also considersconsidered the typicality of a company's pay practices, excluding companies whose chief executive may not receive market compensation because of a founder relationship, family ownership position, or other similar relationships.
The following companies comprised the 2016 Peer Group, which is consistent with the 2015 peer group:
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| Chico's FAS, Inc. | Foot Locker, Inc. | The Children's Place, Inc. | |||||||
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| American Eagle Outfitters Inc. | Deckers Outdoor Corporation | G-III Apparel Group, Ltd. | Skechers USA, Inc. | |||||||
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| Designer Brands, Inc. | Genesco Inc. | Tapestry, Inc. | |||||||
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| Guess?, Inc. | |||||||||
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2017 PROXY STATEMENT
In 2017, as part of its annual compensation review and in response to some shareholder concerns, the Committee evaluated each peer company and decided to adopt a new peer group for 2017 and going forward. The changes to the group ultimately create greater alignment of Company revenues with those of the peer group median through the removal of several larger companies. The following adjustments to the peer group were made for 2017 and going forward:
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Within the framework of the Company's executive compensation program, the CEO recommends the level of base salary, annual bonus, long-term incentive compensation, equity awards and other compensation components for his direct reports, including the other NEOs. The CEO bases his recommendation upon his assessment of the compensation factors applicable to each NEO. The CEO considers these compensation factors both objectively and subjectively, and no single factor is determinative. The Committee discusses these recommendations with the CEO prior to setting the compensation for each NEO, other than the CEO. The Committee, however, ultimately determines all compensation for NEOs other than the CEO, whose compensation is determined by the independent directors as a whole.
FW Cook was first engaged as the Committee's independent compensation consultant in September 2016 and reports directly to the Committee (as Willis Towers Watson previously did).Committee. The Committee determines the scope of engagement and may replace the consultant or hire additional consultants at any time. The Committee has evaluated Willis Towers Watson's and FW Cook's independence under the rules established by the NYSE and has determined that both firms areFW Cook is "independent" as
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2020 PROXY STATEMENT | | | | 45 |
defined by NYSE rules. In addition, the Committee has evaluated whether the engagement of either firmFW Cook raised any conflicts of interest and has determined that no such conflicts of interest exist.
At the Committee's invitation, a representative of FW Cook generally attends all Committee meetings and also communicates with the Committee Chair and management regularly between meetings. However, the Committee makes all decisions regarding NEO compensation. FW Cook provides various executive compensation services to the Committee pursuant to a consulting agreement with the Committee. Generally, these services include advising the Committee on the principal aspects of the Company's executive compensation program, evolving industry practices, and providing market information and analysis regarding the competitiveness of the Company's program design.
During 2016,2019, FW Cook performed the following specific services:
The Company did not pay FW Cook any fees for services other than compensation consulting but did pay such fees to Willis Towers Watson, its former consultant. The total fees the Company paid to Willis Towers WatsonFW Cook for executive compensation services to the Committee in
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Table 2019 were $74,000, less than 1% of Contents
2017 PROXY STATEMENT
2016 were $369,261. Towers Watson also was engaged by Wolverine Worldwide in 2016FW Cook's total consulting income during the same period. The Company did not pay or incur any other fees to perform actuarial services, pension plan consulting and risk and financial services that are not part of the executive and non-employee director compensation services provided to the Committee. These services were performed on an interim and annual basis for financial reporting purposes. The total annual expense for this work was approximately $296,454. The total fees the Company paid to Willis Towers Watson were $665,715. Willis Towers Watson's revenue for its 2016 fiscal year was $7.9 billion.or with FW Cook.
Other Compensation Policies and PracticesOTHER COMPENSATION POLICIES AND PRACTICES
NEO Stock Ownership Guidelines
Each NEO, as well as each non-employee director, must attain (and maintain) a minimum stock ownership level (including owned shares, a certain level of performance shares or units and restricted shares or units, and the in-the-money value of vested stock options) prior to being able to gift or sell any Company stock. During 2016,2019, each NEO was in compliancecomplied with the requirements of these guidelines.
Covered Positions | Guideline | |
CEO | | 6x Annual |
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Other NEOs | | 2x Annual |
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| | 6x Annual Cash Retainer |
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Stock Hedging and Pledging Policies
Under the Company's Insider Trading Policy, all directors, officers and other employees are prohibited from engaging in any hedging transactions involving Company securities beneficially owned by them. The Company also considers it inappropriate for any such person to engage in speculative transactions in the Company's securities, including short sales, publicly traded options, margin accounts and pledges and standing and limit orders. Also, all directors, officers and other employees are prohibited from pledging Company securities as collateral for a loan.
The Company has adopted a clawback policy which empowers the Board or a committee of the Board to seek recovery of specified incentive compensation received by executive officers under specific circumstances where there is a material restatement of the Company's financial results that would have led to a lower level of incentive compensation payout.
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2020 PROXY STATEMENT | | | | 46 |
Impact of Accounting and Tax Treatments on Compensation
The Tax Cuts and Jobs Act on December 22, 2017 eliminated the Section 162(m) ofperformance-based compensation exemption, so the Internal Revenue Code provides that publicly held companies maygrants and awards made in 2019 are not deduct compensation paideligible for such exemption. Even prior to the CEO and the three next most highly-paid executive officers (other than the CFO) in excess of $1,000,000 annually, with certain exceptions for qualified "performance-based" compensation. Wolverine Worldwide has designed its Annual Bonus Plan and stock incentive plans to permit the grant or payment of certain awards that are intended to qualify as "performance-based" compensation for purposes of Section 162(m). The Company is asking its shareholders to approve the material terms of the Amended and Restated Executive Short-Term Incentive Plan, consistent with the requirementselimination of the performance-based compensation exemption, under Section 162(m). Wolverine Worldwide however, doesdid not require all of its compensation programs, including programs under the plans listed above, to be fully deductiblefit the performance-based compensation exemption under Section 162(m) because Wolverine Worldwideit believes it is important to preserve flexibility in administering compensation programs in a manner designed to promote varying corporate goals. Wolverine Worldwide has and in the future may continue to pay compensation that does not qualifyis limited in whole or in part as performance-based compensation.to tax deductibility.
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2017 PROXY STATEMENT
Compensation Committee Report |
The Committee has reviewed and discussed with management the information provided under the heading "Compensation Discussion and Analysis." Based on this review and discussion, the Committee recommended to the Board of Directors that the Company include the Compensation Discussion and Analysis section in this proxy statementProxy Statement and incorporate it by reference into the Company's Annual Report on Form 10-K.
Respectfully submitted,
Joseph R. Gromek (Chairperson),Nicholas T. Long (Chair)
Jeffrey M. Boromisa
Gina R. Boswell
William K. GerberNicholas T. Long
Compensation Committee Interlocks and Insider Participation. During fiscal year 2016,2019, none of the members of the Compensation Committee was an officer or employee of the Company, was a former officer of the Company, nor had a relationship with the Company requiring disclosure as a related party transaction under Item 404 of Regulation S-K of the Securities Act of 1933. None of the Company's executive officers served on the compensation committee or board of directors of another entity whose executive officer(s) served as a director on the Company's Board or on the Compensation Committee.
See the"Compensation Discussion and Analysis" section for more information regarding the Compensation Committee's processes and procedures.
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2017 PROXY STATEMENT
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| Name and Principal Position | Year | | Salary1 | | Bonus | | Stock Awards2 | | Option Awards3 | | Non-Equity Incentive Plan Compensation4 | | Change in Pension Value and Nonqualified Deferred Compensation Earnings5 | | All Other Compensation6 | | Total | | Total (excluding pension) | | |||||||||||||
| | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| Blake W. Krueger | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chairman, CEO | 2016 | $1,150,000 | - | $4,385,006 | $1,389,999 | $831,376 | $2,391,996 | $34,958 | $10,183,335 | $7,791,339 | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| and President | 2015 | $1,150,000 | - | $6,992,678 | $1,392,843 | $525,254 | $24,899 | $32,928 | $10,118,602 | $10,093,703 | |||||||||||||||||||||||
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| 2014 | $1,183,654 | $440,249 | $4,383,045 | $1,394,846 | $1,631,132 | $5,499,286 | $18,847 | $14,551,059 | $9,051,773 | ||||||||||||||||||||||||
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| Michael Jeppesen | |||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| President, Heritage | 2016 | $559,135 | - | $1,150,937 | $170,001 | $276,017 | $364,635 | $27,636 | $2,548,361 | $2,183,726 | |||||||||||||||||||||||
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| Group and Global | 2015 | $526,539 | - | $576,588 | $170,352 | $430,029 | $114,395 | $22,057 | $1,839,960 | $1,725,565 | |||||||||||||||||||||||
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| Operations Group | |||||||||||||||||||||||||||||||||
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| Michael D. Stornant | |||||||||||||||||||||||||||||||||
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| Senior Vice President, | 2016 | $544,808 | - | $1,011,716 | $232,000 | $202,514 | $553,651 | $29,248 | $2,573,937 | $2,020,286 | |||||||||||||||||||||||
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| CFO, Treasurer and | 2015 | $403,538 | $266,649 | $630,606 | $159,033 | $93,533 | $412,331 | $26,710 | $1,992,400 | $1,580,069 | |||||||||||||||||||||||
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| Chief Accounting Officer | |||||||||||||||||||||||||||||||||
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| Richard J. Woodworth | |||||||||||||||||||||||||||||||||
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| President, Wolverine | 2016 | $548,820 | - | $732,269 | $210,801 | $164,816 | $13,889 | $39,952 | $1,710,547 | $1,696,658 | |||||||||||||||||||||||
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| Boston Group | |||||||||||||||||||||||||||||||||
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| James D. Zwiers | |||||||||||||||||||||||||||||||||
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| Executive Vice | 2016 | $642,058 | - | $1,037,522 | $210,801 | $206,959 | $734,223 | $37,331 | $2,868,894 | $2,134,671 | |||||||||||||||||||||||
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| President (President, | 2015 | $624,539 | - | $697,004 | $211,232 | $390,773 | $17,604 | $33,897 | $1,975,049 | $1,957,445 | |||||||||||||||||||||||
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| Wolverine Outdoor & | 2014 | $627,577 | - | $803,213 | $210,567 | $478,608 | $795,787 | $17,856 | $2,933,608 | $2,137,821 | |||||||||||||||||||||||
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| Lifestyle Group for 2016) | |||||||||||||||||||||||||||||||||
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Name | | Service-based Restricted Stock Value | | Performance Share Value | | Total | ||||
Krueger | $2,084,998 | $2,300,008 | $4,385,006 | |||||||
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Jeppesen | $814,397 | $336,540 | $1,150,937 | |||||||
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Stornant | $678,198 | $333,519 | $1,011,716 | |||||||
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Woodworth | $398,750 | $333,519 | $732,269 | |||||||
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Zwiers | $646,400 | $391,122 | $1,037,522 | |||||||
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Summary Compensation Table |
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Name | Service-based Restricted Stock Unit Value | Performance Unit Value | Total | |||||
Krueger | | $1,732,529 | | $4,605,665 | | $6,338,194 | ||
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Jeppesen | | $325,613 | | $528,267 | | $853,880 | ||
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Spaletto | | $334,907 | | $543,327 | | $878,234 | ||
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Stornant | | $386,113 | | $626,383 | | $1,012,496 | ||
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Zwiers | | $355,619 | | $576,949 | | $932,568 | ||
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2020 PROXY STATEMENT | | | | 49 |
2017 PROXY STATEMENT
Name | | 401(k) Match | | Tax and Estate Planning | | Health �� | | Life Insurance Premiums | | Car Allowance | 401(k) Match | Tax and Estate Planning | Health | Life Insurance Premiums | Deferred Compensation Plan Contribution | |||||||||||
Krueger | $7,950 | $7,560 | $15,533 | $3,915 | - | | $8,400 | | $8,285 | | $18,039 | | $1,523 | | $0 | |||||||||||
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Jeppesen | $7,950 | - | $18,898 | $788 | - | | $8,400 | | $0 | | $20,130 | | $711 | | $0 | |||||||||||
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Spaletto | | $15,400 | | $8,285 | | $21,326 | | $714 | | $21,872 | ||||||||||||||||
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Stornant | $7,950 | - | $18,268 | $3,030 | - | | $8,400 | | $0 | | $19,526 | | $3,030 | | $0 | |||||||||||
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Woodworth | $11,925 | $6,201 | $14,051 | $775 | $7,000 | |||||||||||||||||||||
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Zwiers | $7,950 | $7,560 | $18,898 | $2,924 | - | | $8,400 | | $8,285 | | $20,130 | | $3,022 | | $0 | |||||||||||
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2017 PROXY STATEMENT
The following table provides information concerning each grant of an award made to the NEOs in fiscal year 2016:2019:
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 | | Estimated Future Payouts Under Equity Incentive Plan Awards2 | | | | | ||||||||||||||||||||||||||||||||
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| Name | Award Type | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | All Other Stock Awards: Number of Shares of Stock or Units3 (#) | | All Other Option Awards: Number of Securities Underlying Options4 (#) | | Exercise or Base Price of Option Awards5 ($/Share) | | Grant Date Fair Value of Stock and Option Awards6 ($) | ||||||||||||||||
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| Krueger | Annual Bonus | $718,750 | $1,437,500 | $2,875,000 | |||||||||||||||||||||||||||||||||||
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| FY16-FY18 Performance Shares | 02/10/16 | 69,655 | 139,310 | 320,701 | $2,300,008 | ||||||||||||||||||||||||||||||||||
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| Stock Options | 02/10/16 | 425,076 | $16.51 | $1,389,999 | |||||||||||||||||||||||||||||||||||
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| Restricted Stock | 02/10/16 | 126,287 | $2,084,998 | ||||||||||||||||||||||||||||||||||||
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| Jeppesen | Annual Bonus | $153,762 | $307,524 | $615,048 | |||||||||||||||||||||||||||||||||||
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| FY16-FY18 Performance Shares | 02/10/16 | 10,192 | 20,384 | 42,563 | $336,540 | ||||||||||||||||||||||||||||||||||
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| Stock Options | 02/10/16 | 51,988 | $16.51 | $170,001 | |||||||||||||||||||||||||||||||||||
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| Restricted Stock | 02/10/16 | 35,445 | $585,197 | ||||||||||||||||||||||||||||||||||||
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| Restricted Stock | 07/13/16 | 10,000 | $229,200 | ||||||||||||||||||||||||||||||||||||
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| Stornant | Annual Bonus | $149,822 | $299,644 | $599,289 | |||||||||||||||||||||||||||||||||||
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| FY16-FY18 Performance Shares | 02/10/16 | 10,101 | 20,201 | 42,179 | $333,519 | ||||||||||||||||||||||||||||||||||
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| Stock Options | 02/10/16 | 70,948 | $16.51 | $232,000 | |||||||||||||||||||||||||||||||||||
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| Restricted Stock | 02/10/16 | 41,078 | $678,198 | ||||||||||||||||||||||||||||||||||||
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| Woodworth | Annual Bonus | $137,205 | $274,410 | $548,820 | |||||||||||||||||||||||||||||||||||
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| FY16-FY18 Performance Shares | 02/10/16 | 10,101 | 20,201 | 42,179 | $333,519 | ||||||||||||||||||||||||||||||||||
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| Stock Options | 02/10/16 | 64,465 | $16.51 | $210,801 | |||||||||||||||||||||||||||||||||||
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| Restricted Stock | 02/10/16 | 24,152 | $398,750 | ||||||||||||||||||||||||||||||||||||
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| Zwiers | Annual Bonus | $176,566 | $353,132 | $706,263 | |||||||||||||||||||||||||||||||||||
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| FY16-FY18 Performance Shares | 02/10/16 | 11,845 | 23,690 | 49,465 | $391,122 | ||||||||||||||||||||||||||||||||||
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| Stock Options | 02/10/16 | 64,465 | $16.51 | $210,801 | |||||||||||||||||||||||||||||||||||
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| Restricted Stock | 02/10/16 | �� | 39,152 | $646,400 | |||||||||||||||||||||||||||||||||||
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2017 PROXY STATEMENT
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2017 PROXY STATEMENT
The following table provides information concerning options and stock awards that have not vested for each NEO outstanding as of December 31, 2016:28, 2019:
| | Option Awards | | Stock Awards | ||||||||||||||||||||
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Name | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Unexercisable1 (#) | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested2 (#) | Market Value of Shares or Units of Stock That Have Not Vested3 ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested4 (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested3 ($) | ||||||||||
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Krueger | |||||||||||||||||||||||
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| Various | 355,923 | $7,812,510 | |||||||||||||||||||||
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| Various | 195,505 | $4,291,335 | |||||||||||||||||||||
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| 2/10/10 | 44,266 | - | $12.50 | 2/10/20 | |||||||||||||||||||
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| 2/9/11 | 98,000 | - | $18.25 | 2/8/21 | |||||||||||||||||||
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| 2/8/12 | 114,000 | - | $19.92 | 2/7/22 | |||||||||||||||||||
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| 2/6/13 | 200,778 | - | $21.48 | 2/5/23 | |||||||||||||||||||
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| 2/11/14 | 150,189 | 75,095 | $27.13 | 2/10/24 | |||||||||||||||||||
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| 2/11/15 | 73,663 | 147,325 | $28.00 | 2/10/25 | |||||||||||||||||||
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| 2/10/16 | - | 425,076 | $16.51 | 2/9/26 | |||||||||||||||||||
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Jeppesen | |||||||||||||||||||||||
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| Various | 93,592 | $2,054,344 | |||||||||||||||||||||
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| Various | 28,147 | $617,827 | |||||||||||||||||||||
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| 2/8/12 | 22,400 | - | $19.92 | 2/7/22 | |||||||||||||||||||
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| 2/6/13 | 25,240 | - | $21.48 | 2/5/23 | |||||||||||||||||||
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| 2/11/14 | 14,749 | 7,374 | $27.13 | 2/10/24 | |||||||||||||||||||
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| 2/11/15 | 9,010 | 18,018 | $28.00 | 2/10/25 | |||||||||||||||||||
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| 2/10/16 | - | 51,988 | $16.51 | 2/9/26 | |||||||||||||||||||
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2017 PROXY STATEMENT
| | Option Awards | | Stock Awards | ||||||||||||||||||||
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Name | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Unexercisable1 (#) | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested2 (#) | Market Value of Shares or Units of Stock That Have Not Vested3 ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested4 (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other rights That Have Not Vested3 ($) | ||||||||||
| | | | | | | | | | | | | ||||||||||||
Stornant | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| Various | 59,764 | $1,311,820 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| Various | 21,099 | $463,123 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/6/08 | 7,800 | - | $12.53 | 2/5/18 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 4/16/08 | 2,600 | - | $13.85 | 4/15/18 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/10/09 | 27,000 | - | $8.56 | 2/9/19 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/10/10 | 16,800 | - | $12.50 | 2/10/20 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/9/11 | 12,300 | - | $18.25 | 2/8/21 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/8/12 | 12,640 | - | $19.92 | 2/7/22 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/6/13 | 13,590 | - | $21.48 | 2/5/23 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/11/14 | 7,941 | 3,971 | $27.13 | 2/10/24 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/11/15 | 3,922 | 7,843 | $28.00 | 2/10/25 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 6/12/15 | 4,229 | 8,458 | $29.31 | 6/11/25 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/10/16 | - | 70,948 | $16.51 | 2/9/26 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Woodworth | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| Various | 50,143 | $1,100,639 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| Various | 26,924 | $590,982 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/6/13 | 17,030 | - | $21.48 | 2/5/23 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/11/14 | 7,945 | 3,972 | $27.13 | 2/10/24 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/11/15 | 3,922 | 7,843 | $28.00 | 2/10/25 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/10/16 | - | 64,465 | $16.51 | 2/9/26 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Zwiers | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| Various | 89,188 | $1,957,677 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| Various | 31,573 | $693,027 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/10/09 | 38,000 | - | $8.56 | 2/9/19 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 4/22/09 | 4,000 | - | $10.90 | 4/21/19 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/10/10 | 40,600 | - | $12.50 | 2/10/20 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/9/11 | 28,200 | - | $18.25 | 2/8/21 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/8/12 | 31,600 | - | $19.92 | 2/7/22 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/6/13 | 38,800 | - | $21.48 | 2/5/23 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/11/14 | 22,673 | 11,336 | $27.13 | 2/10/24 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/11/15 | 11,172 | 22,342 | $28.00 | 2/10/25 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| 2/10/16 | - | 64,465 | $16.51 | 2/9/26 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
 | ||
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| | | | |
| | | | |
2017 PROXY STATEMENT
Named | Vesting Date | Number of Shares to Vest | | |||||||||
Krueger | | | | | | | | |||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | |||||||||||
| | | | 31,572 | | | |||||||
| | | | | | | | ||||||
| | | | | | 37,233 | | | |||||
| | | | | | | | ||||||
| | | | | | 16,319 | | | |||||
| | | | | | | | ||||||
| | | 02/06/21 | | | | 9,954 | | | ||||
| | | | | | | | ||||||
| | | 02/08/21 | | | | 20,759 | | | ||||
| | | | | | | | ||||||
| | | 02/10/21 | | | | 63,144 | | | ||||
| | | | | | | | ||||||
| | | 02/06/22 | | | | 14,931 | | | ||||
| | | | | | | | ||||||
| | | 02/07/22 | | | | 16,319 | | | ||||
| | | | | | | | ||||||
| | | 02/06/23 | | | | 14,931 | | | ||||
| | | | | | | | ||||||
Jeppesen | | | | | | | | |||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | |||||||||||
| | | | 8,861 | | | |||||||
| | | | | | | | ||||||
| | | | | | 4,554 | | | |||||
| | | | | | | | ||||||
| | | | | | 2,500 | | | |||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | 3,067 | | | |||||
| | | | | | | | ||||||
| | | 02/08/21 | | | | 3,930 | | | ||||
| | | | | | | | ||||||
| | | 02/10/21 | | | | 17,723 | | | ||||
| | | | | | | | ||||||
| | | 07/13/21 | | | | 5,000 | | | ||||
| | | | | | | | ||||||
| | | 02/06/22 | | | | 2,806 | | | ||||
| | | | | | | | ||||||
| | | 02/07/22 | | | | 3,067 | | | ||||
| | | | | | | | ||||||
| | | 02/06/23 | | | | 2,807 | | | ||||
| | | | | | | | ||||||
Spaletto | | | | | | | | |||||
| | | | | | | | ||||||
| | | 02/06/20 | | | | 1,924 | | | ||||
| | | | | | | | ||||||
| | | 02/07/20 | | | | 2,103 | | | ||||
| | | | | | | | ||||||
| | | 02/20/20 | | | | 4,266 | | | ||||
| | | | | | | | ||||||
| | | 02/06/21 | | | | 1,924 | | | ||||
| | | | | | | | ||||||
| | | 02/07/21 | | | | 3,154 | | | ||||
| | | | | | | | ||||||
| | | 02/20/21 | | | | 4,267 | | | ||||
| | | | | | | | ||||||
| | | 02/06/22 | | | | 2,886 | | | ||||
| | | | | | | | ||||||
| | | 02/07/22 | | | | 3,155 | | | ||||
| | | | | | | | ||||||
| | | 02/06/23 | | | | 2,887 | | | ||||
| | | | | | | | ||||||
| | | | |
| | | | |
| | | | |
2017 PROXY STATEMENT
Named | Vesting Date | Number of Shares to Vest | | |||||||||
Stornant | | | | | | | | |||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | | | | | | ||||||
| | | |||||||||||
| | | | 10,270 | | | |||||||
| | | | | | | | ||||||
| | | | | | 1,983 | | | |||||
| | | | | | | | ||||||
| | | | | | 2,138 | | | |||||
| | | | | | | | ||||||
| | | | | | 2,218 | | | |||||
| | | | | | | | ||||||
| | | 02/07/21 | | | | 3,692 | | | ||||
| | | | | | | | ||||||
| | | 02/08/21 | | | | 4,671 | | | ||||
| | | | | | | | ||||||
| | | 02/10/21 | | | | 20,539 | | | ||||
| | | | | | | | ||||||
| | | 02/06/22 | | | | 3,328 | | | ||||
| | | | | | | | ||||||
| | | 02/07/22 | | | | 3,693 | | | ||||
| | | | | | | | ||||||
| | | 02/06/23 | | | | 3,328 | | | ||||
| | | | | | | | ||||||
| | | | | | | | |||||
| | | | | | | | ||||||
| | | | | | | | ||||||
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| | | | |
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2017 PROXY STATEMENT
Option Exercises and Stock |
| | Option Awards | | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of Shares Acquired on Exercise (#) | | Value Realized On Exercise1 ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized On Vesting2 ($) | Number of Shares Acquired on Exercise (#) | Value Realized On Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized On Vesting1 ($) | |||||||||||||
Krueger | 7,984 | $93,173 | 178,310 | $2,949,463 | - | - | 361,780 | $12,679,520 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Jeppesen | - | - | 20,725 | $342,951 | - | - | 68,167 | $2,287,263 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Spaletto | - | - | 33,027 | $1,153,980 | ||||||||||||||||||||
| | | | | | | | | | | | ||||||||||||||
Stornant | 6,000 | $57,660 | 13,238 | $219,502 | - | - | 55,601 | $1,932,795 | ||||||||||||||||
| | | | | | | | | | | | | | | |||||||||||
Woodworth | - | - | 21,143 | $389,541 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Zwiers | 24,584 | $289,373 | 36,803 | $609,091 | - | - | 63,606 | $2,227,373 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | |
| | | | |
| | | | |
2017 PROXY STATEMENT
Pension Plans and |
Wolverine Worldwide maintains the following defined benefit retirement plans covering Messrs. Krueger, Jeppesen, Stornant, and Zwiers: (1) the Wolverine Worldwide Employees' Pension Plan ("Pension Plan"), which is a funded and tax-qualified defined benefit plan under the Internal Revenue Code that covers eligible employees, and (2) the Wolverine World Wide, Inc. 409A Supplemental Executive Retirement Plan ("SERP"), which is an unfunded, non-qualified plan that covers individuals recommended by the CEO and approved by the Compensation Committee. Mr. WoodworthSpaletto does not participate in these plans, but has "frozen" benefits under the Stride Rite Corporation Retirement Income Plan ("SR Plan").plans.
Participants vest in the Pension Plan after five years of qualifying service. Subject to the limitations imposed by the Internal Revenue Code, the Pension Plan generally pays a monthly benefit in an amount equal to a percentage of the participant's final average monthly earnings multiplied by his or her number of years of service. For purposes of this benefits formula, the Pension Plan caps years of service at 25 (30 for non-SERP participants), and the percentages of final average monthly earnings are 2.4% for Mr. Krueger and 2.0% for Messrs. Jeppesen, Stornant, and Zwiers. "Earnings" as used in this Pension Plan formula generally includes base salary and annual bonus, less Social Security allowance, and for 20162019 was capped at $265,000,$280,000, the IRS limit applicable to tax-qualifiedtax qualified plans.
Upon retirement, a participant may elect to receive the benefit in the form of a life annuity, 5-5 or 10-year certain annuities, or joint and 50%, joint and 75%, or joint and 100% survivor annuities. The payments are actuarially adjusted based on the participant's election. Any election, other than an election to receive life annuity benefits, reduces the monthly benefit payable. The "normal" age at which benefits may be drawn under the plan is 65. Mr.Messrs. Krueger, is currently the only NEOStornant and Zwiers are eligible to begin drawing early retirement benefits under the Pension Plan.Plan, as described in the "Benefits Triggered By Retirement, Death or Permanent Disability" section of this Proxy Statement.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Messrs. Krueger, Jeppesen, Stornant, and Zwiers participate in the SERP, which provides retirement benefits above amounts available under the Company's tax-qualifiedtax qualified Pension Plan. The SERP benefit generally equals the difference between the participant's retirement benefit under the Pension Plan and the benefits the participant would have received if there were no IRS-imposedIRS imposed cap on earnings when calculating the Pension Plan benefit. The SERP caps years of service at 25 in calculating a participant's benefit. The SERP also allows a retired participant who has five years of service to draw earlier (beginning at age 55) and on different terms than under the Pension Plan. A participant's earnings percentage multiplier is the same under the SERP as it is under the Pension Plan (2.4% for Mr. Krueger and 2.0% for Messrs. Jeppesen, Stornant, and Zwiers). The Compensation Committee may grant additional deemed years of service under the SERP to a participant, subject to the cap of 25 years. The full benefit of any additional years of deemed service is paid under the SERP. Mr. Krueger reached the 25-year cap in 2012.
If a retired participant draws the SERP benefit prior to age 65, the reduction factor is 0.333% for each month prior to age 60, and 0.1666% for each month between age 60 and age 65. As of the end of fiscal year 2016,2019, Mr. Krueger was the only NEO eligible to retire and begin drawing early benefits under the SERP.
SERP benefits are paid monthly, and the SERP has a lump sum payment option in the event of death or termination of employment after a change in control. The SERP also includes a disability benefit and a death benefit payable to the participant's designated beneficiary if the participant dies before retiring. The SERP provides for lump sum payments equal to 125% of the net present value of accrued benefits without regard to any reduction for early payment to participants who resign for good reason or are terminated by Wolverine other than for
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2017 PROXY STATEMENT
cause or due to death or disability within two years (Messrs. Jeppesen, Stornant, and Zwiers) or three years (Mr. Krueger) after a change in control.
The SERP also contains non-competition, confidentiality and employee non-solicitation provisions in favor of Wolverine Worldwide. Under the SERP non-competition provisions, a participant is not entitled to any benefit payment if the participant enters into certain relationships with a competing business prior to the date on which such benefit payment is due. If the participant's employment is terminated for serious
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2020 PROXY STATEMENT | | | | 58 |
misconduct, or if Wolverine Worldwide cannot collect under an insurance policy purchased to fund SERP benefits for certain reasons, the Company may terminate a participant's benefits under the SERP. Wolverine Worldwide may terminate the SERP or stop further accrual of SERP benefits for a participating NEO at any time, but termination will not affect previously accrued benefits.
PENSION BENEFITS IN FISCAL YEAR 20162019
The following table provides for each NEO certain information concerning each plan that provides for payments or other benefits at, following, or in connection with retirement:
Name | Plan Name | | Number of Years Credited Service (#) | Present Value of Accumulated Benefit1 ($) | Payments During Last Fiscal Year ($) | ||||||||||||||||
| Plan Name | Number of Years During Credited Service Benefit1 (#) | Present Value of Last Fiscal Year ($) | Payments Accumulated ($) | ||||||||||||||||||
Krueger | SERP | 25 | $16,623,170 | 2 | - | SERP | 25 | $19,585,1102 | - | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| Pension | 21 | $1,641,573 | - | Pension | 24 | $2,415,065 | - | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
Jeppesen | SERP | 5 | $531,397 | - | SERP | 8 | $1,364,725 | - | |||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| Pension | 5 | $257,172 | - | Pension | 8 | $568,073 | - | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||
Stornant | SERP | 20 | $575,663 | - | |||||||||||||||||
Spaletto3 | SERP | - | - | - | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| Pension | 20 | $762,681 | - | Pension | - | - | - | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
Woodworth3 | SERP | - | - | - | |||||||||||||||||
| | | | | | | | | | | | |||||||||||
| Pension | - | - | - | ||||||||||||||||||
Stornant | SERP | 23 | $2,928,696 | - | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| SR Plan | 3 | $111,435 | - | 23 | $1,198,296 | - | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | ||
Zwiers | SERP | 19 | $1,887,768 | - | SERP | 22 | $3,271,709 | - | |||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| Pension | 19 | $671,085 | - | Pension | 22 | $1,066,499 | - | ||||||||||||||
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2017 PROXY STATEMENT
Wolverine Worldwide maintains a Deferred Compensation Plan. This unfunded and non-qualified plan allows executives and other eligible senior employees of the Company to elect to defer all or a portion of their base salary, cash bonus, or other performance-based cash compensation. Wolverine Worldwide may, but need not, credit a participant's account under the plan with an additional discretionary Company contributions, which may be subject to a vesting schedule and which would vest in full on a change in control. Amounts deferred pursuant to the Deferred Compensation Plan may be invested, at the direction of the participant, in an investment fund, index, or other investment vehicle, as designated by the Compensation Committee to be available under the plan, and earnings, if any, are credited to the participant's account.
Accounts are paid out upon the earliest to occur of (i) a qualifying separation from service, (ii) a change in control (as such term is defined in the plan)Deferred Compensation Plan), and (iii) a termination of the Deferred Compensation Plan. Payment must generally be made, or installment payments must begin (as elected by the participant at the time of deferral), within 60 days of the event triggering payment.
Mr. Stornant is the only NEO who has elected to defer amounts under the Deferred Compensation Plan. Wolverine Worldwide did not make anymade a discretionary Company contributionscontribution on behalf of Mr. Stornant or any other NEO during 2016.Spaletto for 2019, as reflected below.
NONQUALIFIED DEFERRED COMPENSATION
Name | Executive Contributions in ($) | Registrant Contributions in ($) | Aggregate Earnings in ($) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||
| - | $ | - | - | - | |||||||
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Stornant | - | - | $ | - | $ | |||||||
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2017 PROXY STATEMENT
Potential Payments Upon Termination or Change in Control |
Wolverine Worldwide has entered into an Executive Severance Agreement with each NEO that provides certain rights, including the right to receive payments in the event of a termination of employment following a change in control. The Company also has entered into an agreement with Mr. Krueger regarding certain termination benefits in the event of termination of his employment under certain other circumstances described below.
BENEFITS TRIGGERED BY TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION
An NEO is not entitled to receive any additional forms of severance payments or benefits upon termination of employment for Cause or upon the NEO's voluntary decision, other than for Good Reason, to terminate his employment.employment, as discussed in further detail below.
BENEFITS TRIGGERED BY TERMINATION OTHER THAN FOR CAUSE OR FOR GOOD REASON
Mr. Krueger entered into a Separation Agreement on March 13, 2008, which states that upon termination of his employment by Wolverine Worldwide without Cause, or termination by Mr. Krueger with Good Reason, as such terms are defined in Mr. Krueger's Separation Agreement, Wolverine Worldwide will pay Mr. Krueger the following payments in exchange for a general release of claims in favor of Wolverine Worldwide: (1) continued base salary for 18 months (reduced by payments he receives if he is employed by a Competing Business, as defined in Mr. Krueger's Separation Agreement); (2) the pro-ratapro rata portion of the annual incentive bonus and the 3-yearthree year bonus for all uncompleted performance periods based on actual corporate performance for the applicable performance periods; (3) the pro-ratapro rata portion of the annual individual performance bonus relating to personal performance objectives; and (4) retiree medical benefits for Mr. Krueger, his spouse and dependents for a period starting on the day after the termination date and ending on the last day of the 18th month following the month in which the termination date falls.
"Cause" generally is defined in Mr. Krueger's Separation Agreement to mean: (1) any act or omission knowingly undertaken or omitted with the intent of causing material damage to Wolverine Worldwide; (2) any intentional act involving fraud, misappropriation or embezzlement, that causes material damage to Wolverine Worldwide; (3) repeated willful failure to substantially perform any of his significant duties as reasonably directed by the Board of Directors of Wolverine Worldwide; (4) a conviction (including any plea of guilty or nolo contendere) of any criminal act that (a) results in the executive serving prison time and not being able to perform the normal duties of his position for more than thirty (30) days; or (b) causes material damage to Wolverine Worldwide; or (5) chronic or habitual use or consumption of drugs or alcohol that causes material damage to Wolverine Worldwide.
"Good Reason" generally is defined in Mr. Krueger's Separation Agreement to mean: (1) a material reduction in base compensation, including a reduction in base salary or opportunities under Wolverine Worldwide's bonus plans or equity plans (other than those implemented for the executive team as a whole); (2) a material reduction in authority, duties, or responsibilities; (3) a requirement to report to a Company officer or employee instead of reporting directly to the Board of Directors; or (4) certain relocations, other than those related to a change in the location of Wolverine Worldwide's headquarters affecting a majority of the executive team.
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2017 PROXY STATEMENT
BENEFITS TRIGGERED UPON A CHANGE IN CONTROL
Benefits Upon Termination Following a Change in Control. Under the Executive Severance Agreements entered into with the NEOs, payments and benefits are triggered when employment is terminated without "Cause" or when an executive terminates employment for "Good
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2020 PROXY STATEMENT | | | | 61 |
"Good Reason" within two years (Messrs. Jeppesen, Spaletto, Stornant, Woodworth and Zwiers) or three years (Mr. Krueger) following a change in control of Wolverine Worldwide.
Upon such a qualifying termination, Wolverine Worldwide will pay the lump sum severance payment under the Executive Severance Agreement composed of the following: (1) unpaid base salary and bonus payments that had been earned; (2) in lieu of a bonus payment under the Annual Bonus Plan, an amount equal to the quotient of the number of days the NEO was employed by Wolverine Worldwide, or any successor company in the year of termination, divided by the number of days in the year, multiplied by 100% of the greater of either (a) the bonus awarded to the NEO under the annual bonus plan for the preceding year and (b) the average paid to the NEO over the preceding two-yeartwo year period under the annual bonus plan; (3) in lieu of payments under the various three-yearthree year performance periods that remain open on the date of termination, if any, an amount equal to the bonus the NEO would have received based on actual and assumed performance measures, multiplied by the quotient of the number of days the NEO participated in the performance period prior to the termination, divided by the total number of days in the performance period (in determining the earnings per share or other performance measures that can be determined annually for any year subsequent to the year of termination, performance will equal the level required to attain the maximum goal under the three-yearthree year plan for that year); (4) either two (Messrs. Jeppesen, Spaletto, Stornant, Woodworth and Zwiers) or three (Mr. Krueger) times the sum of (a) the NEO's highest annual base salary during the 12-month12 month period prior to termination and (b) the greater of (i) the average amount earned by the NEO during the previous two years under the annual bonus plan and (ii) the amount earned during the previous year under the Annual Bonus Plan; (5) 100% of the positive spread for any stock options held by the NEO on the date of termination, whether or not vested; (6) in the case of Messrs. Krueger, and Zwiers, an excise tax gross-upgross up adjustment (note: the agreements with Messrs. Jeppesen, StornantSpaletto, and WoodworthStornant were entered into after 2008, and that the Committee determined to not provide such gross-upsgross ups after that date); and (7) in the case of Messrs. Jeppesen, Stornant, and Zwiers, the present value of an additional three years of deemed service under the Pension Plan and SERP. Upon a termination of employment following a change of control, Wolverine Worldwide or any successor company will maintain for a period of six months to one year the NEO's benefits under the then-currentthen current benefit plans, programs or arrangements that the NEO was entitled to participate in immediately prior to the termination date. In addition, Wolverine Worldwide or any successor company will provide outplacement services through the last day of the second calendar year following the calendar year of termination.
"Change in Control" under the Executive Severance Agreements generally means certain changes in composition of the Board of Directors, certain acquisitions of 20% or more of Wolverine Worldwide's common stock or combined outstanding voting power of Wolverine World Wide, Inc., and other specified reorganizations, mergers, consolidations, liquidations, dissolutions or distributions of substantial assets (unless such transactions result in the creation of an entity in which at least 50% of the common stock and combined voting power is owned by the owners of record prior to the transaction, no single shareholder owns more than 20% of the combined voting power and a majority of the board remains unchanged).
"Cause" is defined under the Executive Severance Agreements to generally mean the willful and continued failure to substantially perform duties or willfully engaging in gross misconduct that is injurious to the Company.
"Good Reason" is defined under the Executive Severance Agreements to generally mean: (1) any materially adverse change in position, duties, responsibilities or title, or any removal, involuntary termination or failure to re-elect an officer; (2) a reduction in annual base salary; (3) any relocation or requirement to substantially increase business travel; (4) the failure to continue providing any executive incentive plans or bonus plans; (5) the failure to continue any employee benefit plan or compensation plan unless a comparable plan is available; (6) the failure to pay any salary, bonus, deferred compensation or other compensation; (7) the failure to obtain an assumption agreement from any successor; (8) any purported termination of the employment which is not effected in a manner prescribed by the Executive Severance Agreement; or (9) any other material breach by Wolverine Worldwide or any successor company of its obligations under the Executive Severance Agreement.
Benefits Upon a Change in Control Only. UponFor 2017 and future years, the Company adopted double-trigger vesting, meaning that equity vesting only accelerates upon a qualifying termination of employment after a change in control. For grants prior to 2017, upon a change in control of Wolverine Worldwide, absent a determination by the Compensation Committee to the contrary, all of each NEO's outstanding stock options become immediately exercisable in full and will remain exercisable
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2017 PROXY STATEMENT
during their remaining term, regardless of whether the NEO remains an employee of Wolverine Worldwide, or any successor company. The Committee may determine that one or all of the NEOs shall receive cash in an amount equal to the positive spread amount.amount associated with these options. In addition, upon a change in control of Wolverine Worldwide, all other outstanding equity incentive awards of the NEOs that were granted prior to 2017, including shares of restricted stock, become immediately and fully vested and non-forfeitable. To the extent that the Company has made discretionary contributions under the
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2020 PROXY STATEMENT | | | | 62 |
Deferred Compensation Plan that are subject to a vesting schedule, any unvested portion of these contributions will vest on a change in control. Change in control for this purpose generally means certain changes in the composition of the Board of Directors, certain acquisitions of 20% of Wolverine Worldwide's common stock (50% in the case of the Deferred Compensation Plan) and other specified reorganizations, mergers, consolidations, liquidations, dissolutions or dispositions of substantial assets. Equity awards granted to the NEOs in 2017 no longer have single trigger acceleration upon a change in control.
Excise Tax Gross-Up.Gross Up. The Compensation Committee previously determined that Wolverine Worldwide would not provide excise tax gross-upgross up payments in employment agreements entered into after 2008. Messrs. Krueger and Zwiers are the only NEOs who have excise tax gross-upgross up protection in their agreements.
BENEFITS TRIGGERED BY RETIREMENT, DEATH OR PERMANENT DISABILITY
Pension Plan. In the event of death before retirement, the Pension Plan provides the surviving spouse of a vested participant a death benefit equal to the qualified pre-retirement survivor annuity as defined in the Internal Revenue Code (generally 50% of the participant's accrued normal retirement benefit). This benefit is paid annually to the surviving spouse beginning when the participant would have turned 60 and continues for the life of the surviving spouse. For participants with at least three years of service as of December 31, 2003, and who have at least 10 years of service and are employed by the Company at the time of death, the amount of the survivor benefit under the Pension Plan is calculated as though the participant had continued as an employee of the Company until age 65 at the compensation level as of the date of death and the benefit begins upon the date of death, unreduced for early commencement. The survivor benefit for participants who meet all the criteria set forth in the preceding sentence, but who die when they are not employed by the Company, are entitled to a joint and survivor benefit commencing upon the date of death, unreduced for early commencement.
SERP. If a SERP participant dies before beginning to receive benefits under the SERP, the Company must, based on the participant's election, pay the beneficiary either a monthly annuity or a lump sum death benefit equal to the present value of the benefit computed as if the participant had retired on the date of death, had begun receiving benefits at age 55, and had continued to receive benefits for the remainder of the participant's life expectancy. If the participant dies after beginning to receive benefit payments, benefits cease unless the participant was receiving benefits in the form of one of the joint and survivor annuity optional elections under the plan or had elected benefits in a form that provides for a continuation of benefits.
If a participant becomes disabled (as defined)defined in the SERP), the SERP provides a disability benefit equal to 60% of the normal retirement accrued benefit based upon years of service up to the date that the participant became disabled through the date the participant reaches age 65 (at which point, the participant would begin drawing full SERP benefits) or is no longer disabled.
Annual Bonus Plan. Upon termination of employment at least six months after the beginning of a fiscal year due to death, disability, or early or normal retirement, an NEO is entitled to receive a pro rata portion of any annual bonus award earned under the Annual Bonus Plan based on the NEO's service during such fiscal year and actual performance under the Annual Bonus Plan. The annual bonus is payable at the same time and in the same manner as awards are paid to other NEOs for the fiscal year.
Stock Incentive Plans. Upon death, disability, or voluntary termination of employment after attaining age 62 or age 5059 with seventen years of service with the Company (50 years of age and seven years of service or age 62 for grants prior to 2016), subject to certain conditions, the restrictions applicable to each NEO's shares of restricted stock terminate automatically and stock options vest in full if held(prorated for more than one year or, if employed for less than one year after the grant, on a percentage basis based on months employed after the grant divided by 12.grants prior to 2016). Upon death, disability or voluntary termination of employment after attaining age 62 or age 5059 with seventen years of service with the Company (50 years of age and seven years of service or age 62 for grants prior to 2016), subject to certain conditions, the restrictions on performancetime-vested shares lapse on a prorated basis, based on months employed in the performance period and actual Company performance during the performance period. Any prorated award is payable at the time awards are paid to other NEOs. At fiscal year-end, Mr. Krueger was the only NEO eligible for early
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2017 PROXY STATEMENT
vesting as a result of age or service with the Company. On February 10, 2016, for equity grants occurring on or after that date, the Compensation Committee determined to change the age and years of service requirements for retirement vesting eligibility from the attainment age of 62 or age 50 with seven years of service to the attainment of age 59 with ten years of service and determined to fully accelerate all stock options and service-based restricted shares rather than providing prorated acceleration for such awards held for less than one year.units vest.
Deferred Compensation Plan. Upon death, disability, or other qualifying separation from service, including retirement, all in accordance with Section 409A of the Internal Revenue Code, all amounts deferred by the NEOs under the Deferred Compensation Plan, including any vested amounts credited to the NEOs pursuant to a discretionary Company contribution, shall generally be paid, or commence payment, within 60 days of the termination in accordance with the schedule elected by the NEO at the time of deferral.
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2020 PROXY STATEMENT | | | | 63 |
DESCRIPTION OF RESTRICTIVE COVENANTS THAT APPLY DURING AND AFTER TERMINATION OF EMPLOYMENT
The SERP contains non-competition, confidentiality, and employee non-solicitation provisions in favor of Wolverine Worldwide. Under the non-competition provisions of the SERP, the participant will not be entitled to any benefit payment if, prior to the date on which such benefit payment is due, the participant enters into certain relationships with a competing business.
ESTIMATED PAYMENTS ON TERMINATION OR CHANGE IN CONTROL
The following table summarizes the potential payments and benefits payable to each NEO upon a change in control or termination of employment following each of the triggering events set forth in the table. As required, the amounts in the table assume that the termination of employment or change in control of Wolverine Worldwide took place on the Company's last day of fiscal 2016,year 2019, which was December 31, 2016.28, 2019. The amounts set out below are in addition to benefits that are generally available to the Company's employees such as distributions under the Company's 401(k) savings plan, disability or life insurance benefits and accrued vacation. Due to the many factors that affect the nature and amount of any benefits provided upon the termination events discussed below, any actual amounts paid or distributed to NEOs may be different. Factors that may affect these amounts include timing during the year of the occurrence of the event, Wolverine Worldwide's stock price and the NEO's age and years of service.
The value of the accelerated vesting of unvested equity-based compensation awards was computed using the closing market price ($21.95)33.74) of Wolverine Worldwide's common stock on December 30, 2016,27, 2019, the last business day in fiscal 2016.year 2019. The value for unvested restricted stock is computed by multiplying $21.95$33.74 by the number of shares of the NEO's restricted stock that would vest as a result of an event. The value of stock options that would vest as a result of an event equals the difference between the exercise price of each option and $21.95.
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2017 PROXY STATEMENT
Each of the hypothetical events described in the following table (the highlighted blue headings in the left-hand column) is calculated and reported as a discrete event. For example, the amounts disclosed under the "Change in Control Only" heading are not cumulative with the amounts disclosed under the "Change in Control/Termination" heading.
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2020 PROXY STATEMENT | | | | 64 |
| Termination Event and Payments/Benefits | | | Krueger | | | Jeppesen | | | Stornant | | | Woodworth | | | Zwiers | ||||||||||||||
Termination by Company for Cause or Voluntary Termination (other than for Good Reason or due to Retirement) | |||||||||||||||||||||||||||||
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| Termination by Company Other Than for Cause or by Executive for Good Reason | | $6,525,616 | 1 | ||||||||||||||||||||||||||
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| | Change in Control/Termination | ||||||||||||||||||||||||||||
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Executive Severance Agreement2 | $19,303,052 | $3,945,927 | 13 | $5,163,360 | 13 | $1,659,209 | 13 | $8,457,889 | |||||||||||||||||||||
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Benefits under Executive Severance Agreement3 | $60,714 | $56,429 | $56,492 | $59,921 | $58,555 | ||||||||||||||||||||||||
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Stock Incentive Plans4 | $10,124,923 | $2,337,159 | $1,697,777 | $1,451,328 | $2,308,366 | ||||||||||||||||||||||||
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Lump sum payment under the SERP5 | $22,759,627 | $1,039,773 | $1,252,332 | - | $4,026,587 | ||||||||||||||||||||||||
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TOTAL | $52,248,316 | $7,379,288 | $8,169,961 | $3,170,458 | $14,851,397 | ||||||||||||||||||||||||
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| | Death | ||||||||||||||||||||||||||||
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SERP6 | $18,368,498 | $931,794 | $968,779 | - | $2,929,220 | ||||||||||||||||||||||||
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Pension Plan7 | $989,778 | $145,716 | $1,098,705 | $44,996 | $1,103,900 | ||||||||||||||||||||||||
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Stock Incentive Plans4 | $10,124,923 | $2,337,159 | $1,697,777 | $1,451,328 | $2,308,366 | ||||||||||||||||||||||||
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Earned Incentive Compensation8 | $4,542,471 | $786,218 | $611,570 | $652,848 | $779,278 | ||||||||||||||||||||||||
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| | Disability | ||||||||||||||||||||||||||||
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SERP9 | $18,452,334 | $711,761 | $1,030,857 | - | $3,658,941 | ||||||||||||||||||||||||
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Stock Incentive Plans4 | $10,124,923 | $2,337,159 | $1,697,777 | $1,451,328 | $2,308,366 | ||||||||||||||||||||||||
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Earned Incentive Compensation8 | $4,542,471 | $786,218 | $611,570 | $652,848 | $779,278 | ||||||||||||||||||||||||
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| | Retirement | ||||||||||||||||||||||||||||
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SERP10 | $18,452,334 | $708,950 | $890,446 | - | $2,572,657 | ||||||||||||||||||||||||
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Pension Plan10 | $1,813,070 | $305,484 | $833,788 | $95,557 | $730,091 | ||||||||||||||||||||||||
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Stock Incentive Plans4,11 | $10,124,923 | - | $410,158 | - | - | ||||||||||||||||||||||||
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Earned Incentive Compensation8,11 | $4,542,471 | - | $274,998 | - | - | ||||||||||||||||||||||||
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| | Change in Control Only | ||||||||||||||||||||||||||||
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Stock Incentive Plans12 | $10,124,923 | $2,337,159 | $1,697,777 | $1,451,328 | $2,308,366 | ||||||||||||||||||||||||
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2017 PROXY STATEMENT
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2020 PROXY STATEMENT | | | | 65 |
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Blake Krueger, the Company's Chief Executive Severance Agreements with Messrs. Jeppesen, Stornant and Woodworth do not include excise tax gross-up adjustments. UnderOfficer.
For 2019, our last completed fiscal year, the provisionsannual total compensation of their Agreements, if payments to Messrs. Jeppesen, Stornant or Woodworth under the Agreement would trigger applicationemployee of an excise tax, the Company would reduceidentified at median was $65,890 and the payment to an amount that avoids applicationannual total compensation of the excise tax or pay the full amount, whichever resultsCEO, as reported in the greater after-tax amountSummary Compensation Table above, was $9,427,274.
Based on this information, the 2019 ratio of the annual total compensation of Mr. Krueger to the executive.median of the annual total compensation of all employees was estimated to be 144 to 1.
The methodology and the material assumptions, adjustments, and estimates that we used to identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our "median employee" and our CEO, are described below.
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2017 PROXY STATEMENT
The Company is asking its shareholders to indicate their support for Wolverine Worldwide's NEO compensation, as described in this Proxy Statement. This proposal, commonly known as a "say-on-pay" proposal, gives the Company's shareholders the opportunity to express their view on compensation for the Company's NEOs. The say-on-pay vote is advisory and, therefore, not binding on the Company, the Compensation Committee or the Board. Even though non-binding, the Board and Compensation Committee value the opinions of Wolverine Worldwide's shareholders and will review and consider the voting results when making future decisions regarding the Company's executive compensation program.
At the 2017 annual meeting of shareholders, the Company also held an advisory vote on the frequency of future say-on-pay votes. Our shareholders voted in favor of an annual say-on-pay vote and the Company has elected to follow such recommendation. As such, unless the Company modifies its policies on the frequency of say-on-pay votes, it is expected that the next say-on-pay vote will occur at the 2021 annual meeting of shareholders. Further, in accordance with Rule 14a-21(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shareholders will be asked to vote again on how frequently the Company should hold future say-on-pay votes at the Company's 2023 annual meeting of shareholders.
The Company encourages shareholders to read the "Compensation"Compensation Discussion and Analysis"Analysis" ("CD&A") section of this proxy statementProxy Statement beginning on page 39.32. As described in the CD&A section, the Compensation Committee has structured the executive compensation program to achieve the following key objectives:
The executive compensation program is designed to achieve these objectives, in part, by:
The Company encourages shareholders to read the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 60-77,49-66, which provide detailed information on the compensation of the Company's NEOs.
The Compensation Committee and the Board of Directors believe the Company's compensation program and its policies and procedures articulated in the CD&A section are effective in aligning the interests of the Company's NEOs with the interests of shareholders, promoting the achievement of the Company's near and long termlong-term objectives, and increasing shareholder value.
In accordance with the rules under Section 14A of the Securities Exchange Act, of 1934, as amended (the "Exchange Act"), and as a matter of good corporate governance, the Company asks shareholders to approve the following advisory resolution at the 20172020 Annual Meeting of Shareholders:
RESOLVED, that the shareholders of Wolverine World Wide, Inc. (the "Company") approve, on an advisory basis, the compensation of the Company's named executive officers disclosed in the Compensation Discussion and Analysis section, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company's 20172020 Annual Meeting of Shareholders.
Board RecommendationBOARD RECOMMENDATION
The Board recommends that you vote "FOR" approval of the advisory resolution to approve executive compensation.
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2017 PROXY STATEMENT
Pursuant to Section 14A of the Exchange Act, the Company is asking its shareholders to vote on whether future advisory votes on executive compensation of the nature reflected in Proposal 2 above should occur every year, every two years or every three years. You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, three years or abstain from voting when you vote. Shareholders are not voting to approve or disapprove the Board's recommendation. This advisory vote on the frequency of future advisory votes on executive compensation is non-binding on the Board of Directors. The Board may decide that it is in the best interests of the Company's shareholders and the Company to hold an advisory vote on executive compensation on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation programs.
BOARD RECOMMENDATION
The Board recommends that you vote for conducting future advisory votes on executive compensation "EVERY ONE YEAR."
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2017 PROXY STATEMENT
Ernst & Young LLP ("Ernst & Young") was the Company's independent registered public accounting firm for the fiscal year ended December 31, 2016.28, 2019. The Audit Committee has reappointed Ernst & Young as the Company's independent registered public accounting firm for the current fiscal year. As a matter of good corporate governance, the Audit Committee has determined to submit its appointment of Ernst & Young to the Company's shareholders for ratification. If this appointment is not ratified by the holders of a majority of shares cast affirmatively or negatively on the matter, the Audit Committee will review its future selection of an independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm any time during the year if it determines that such a change would be in the best interests of the Company and the Company's shareholders.
The Audit Committee reviewed Ernst & Young's performance prior to appointing it as the Company's independent registered public accounting firm, and considered:
Representatives of Ernst & Young are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions from shareholders.
Board RecommendationBOARD RECOMMENDATION
The Board recommends that you vote "FOR" ratification of the Audit Committee's selection of the firm of Ernst & Young LLP as the Company's independent registered public accounting firm for fiscal year 2017.2020.
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2017 PROXY STATEMENT
Audit Committee Report |
The Audit Committee of the Board of Directors consists of five directors who are independent under the Company's Director Independence Standards, the NYSE listed company standards, and applicable SEC standards. The Audit Committee represents and assists the Board in fulfilling its oversight responsibility regarding the Company's financial statements and the financial reporting process, the internal control over financial reporting, the performance of the internal audit function and the independent registered public accounting firm, the qualifications and independence of the independent registered public accounting firm, the annual independent audit of Wolverine Worldwide's financial statements and internal control over financial reporting, and compliance with legal and regulatory requirements. The Audit Committee is directly responsible for appointing, retaining, compensating, overseeing, evaluating and terminating (if appropriate) Wolverine Worldwide's independent registered public accounting firm. Wolverine Worldwide's management has primary responsibility for the financial statements and the financial reporting process, including the application of accounting and financial principles, the preparation, presentation and integrity of the financial statements, and the systems of internal controls and other procedures designed to promote compliance with accounting standards and applicable laws and regulations. Wolverine Worldwide's independent registered public accounting firm is responsible for expressing an opinion on the conformity of Wolverine Worldwide's financial statements with generally accepted accounting principles and for auditing the effectiveness of Wolverine Worldwide's internal control over financial reporting.
The Audit Committee has taken steps to provide assurances regarding Audit Committee composition and procedures, the independence of Wolverine Worldwide's independent registered public accounting firm and the integrity of Wolverine Worldwide's financial statements and disclosures. These steps include: (i) reviewing the Audit Committee Charter; (ii) reviewing with legal counsel and the independent registered public accounting firm the Accounting and Finance Code of Ethics; (iii) maintaining financial, accounting and business ethics complaint procedures to allow employees, shareholders and the public to report concerns regarding Wolverine Worldwide's financial statements, internal controls and disclosures; and (iv) reviewing procedures for the Audit Committee to pre-approve all audit and non-audit services provided by Wolverine Worldwide's independent registered public accounting firm.
As part of its supervisory duties, the Audit Committee has reviewed Wolverine Worldwide's audited financial statements for the fiscal year ended December 31, 2016,28, 2019, and has discussed those financial statements with Wolverine Worldwide's management and internal financial staff, and the internal auditors and independent registered public accounting firm with and without management present. The Audit Committee has also reviewed and discussed the following with Wolverine Worldwide's management and the financial staff, and with the internal auditors and independent registered public accounting firm with and without management present:
The Audit Committee has discussed with Wolverine Worldwide's independent registered public accounting firm the results of its examinations and its judgments concerning the quality, as well as the acceptability, of Wolverine Worldwide's accounting principles and such other matters that it is required to discuss with the independent registered public accounting firm under applicable rules, regulations or generally accepted auditing standards, including the matters required to be discussed by the applicable rulesrequirements of the Public Company Accounting Oversight Board ("PCAOB").PCAOB and the SEC. In addition, the Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence rules and has discussed their independence from Wolverine Worldwide and Wolverine Worldwide's management with them, including a consideration of the compatibility of non-audit services with
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2017 PROXY STATEMENT
their independence, the scope of the audit and the scope of all fees paid to the independent registered public accounting firm during the year. After, and in reliance upon the
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2020 PROXY STATEMENT | | | | 69 |
reviews and discussions described above, the Audit Committee recommended that the audited financial statements for the fiscal year ended December 31, 2016,28, 2019, be included in Wolverine Worldwide's Annual Report on Form 10-K for the year then ended to be filed with the SEC.
Respectfully submitted,
Jeffrey M. Boromisa (Chair)
Roxane Divol
William K. Gerber (Chairperson)Jeffrey M. BoromisaRoxane Divol
Brenda J. Lauderback
Michael A. Volkema
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2017 PROXY STATEMENT
Independent Registered Public |
The Company's Audit Committee has adopted a policy under which the Audit Committee must approve all audit and non-audit services provided by the Company's independent registered public accounting firm, Ernst & Young LLP, and which prohibits Ernst & Young LLP from providing any non-audit services that are prohibited by the SEC or the PCAOB. The Company's Audit Committee provides categorical pre-approval for routine and recurring services, with specific service descriptions and budgets. All audit services, internal control-relatedcontrol related services, and other services not within the specifically pre-approved service descriptions and budgets require engagement-specificengagement specific pre-approval. With certain exceptions (such as pre-approval of audit services), the Audit Committee may delegate engagement-specificengagement specific pre-approval to one or more Audit Committee members, and has so delegated in certain instances to the Audit Committee Chairperson. Management must communicate to the Audit Committee at its next regularly scheduled meeting any services approved by an Audit Committee member. Wolverine Worldwide's Audit Committee pre-approved all fees paid to Ernst & Young LLP for services performed in 20162019 and 2015.2018. The aggregate fees billed by Ernst & Young LLP for audit and non-audit services were:
| | 2016 | | 2015 | | 2019 | | 2018 | |||||||
Audit Fees1 | $ | 1,843,600 | $ | 1,607,400 | $ | 1,821,800 | $ | 1,886,000 | ||||||
Audit Related Fees | - | - | - | - | ||||||||||
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Total Audit and Audit Related | $ | 1,843,600 | $ | 1,607,400 | ||||||||||
Tax Fees | ||||||||||||||
Total Audit & Audit Related Fees | $ | 1,821,800 | $ | 1,886,000 | ||||||||||
Tax Fees2 | ||||||||||||||
Tax Compliance | $ | 1,141,800 | $ | 777,600 | $ | 904,300 | $ | 1,289,300 | ||||||
Tax Planning & Advisory | $ | 370,000 | $ | 100,250 | $ | 487,900 | $ | 190,000 | ||||||
Tax Planning & Advisory Other | - | - | - | - | ||||||||||
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Total Tax Fees | $ | 1,511,800 | $ | 877,850 | $ | 1,392,200 | $ | 1,479,300 | ||||||
All Other Fees | - | - | - | - | ||||||||||
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Total Fees | $ | 3,355,400 | $ | 2,485,250 | ||||||||||
TOTAL FEES | $ | 3,214,000 | $ | 3,365,300 | ||||||||||
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Wolverine Worldwide's Audit Committee has adopted a policy restricting the Company's hiring of current or former partners or employees of the independent registered public accounting firm retained by the Company.
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2017 PROXY STATEMENT
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To provide incentives and rewards for achievement of annual corporate and business unit goals, on March 13, 2017, the Board of Directors adopted, subject to shareholder approval, the Amended and Restated Executive Short-Term Incentive Plan (Annual Bonus Plan) (the "Restated Annual Bonus Plan"). The Restated Annual Bonus Plan would amend and restate the existing Amended and Restated Executive Short-Term Incentive Plan (Annual Bonus Plan), which was most recently approved by shareholders at the 2012 Annual Meeting of Shareholders (the "2012 Annual Plan").
The Restated Annual Bonus Plan differs from the 2012 Annual Plan in three main ways: (a) it would extend the term of the 2012 Annual Plan to the first meeting of shareholders in 2022; (b) it would update the performance criteria that the Compensation Committee may select for the purpose of setting and determining annual bonuses, and (c) it would make clarifying and other minor changes. The term of the 2012 Annual Plan expires at this year's Annual Meeting of Shareholders unless shareholders approve the extension of the 2012 Annual Plan by approving the Restated Annual Bonus Plan at the 2017 Annual Meeting of Shareholders.
The Restated Annual Bonus Plan is designed to provide executive officers, senior corporate and divisional officers and other key employees of the Company or its subsidiaries with the opportunity for bonuses based on the performance of the Company or any business unit or units to which the employee is assigned, as applicable. The Restated Annual Bonus Plan is intended to allow the Company to grant awards designed to qualify as performance-based compensation under Section 162(m) of the Code, as amended, and will be interpreted and administered to achieve that purpose, however, there can be no guarantee that amounts payable under the Restated Annual Bonus Plan will be treated as qualified performance-based compensation under Section 162(m). The Company intends to continue its established practice of paying annual incentive bonuses to officers and key management employees based on individual performance goals. Participants in the Restated Annual Bonus Plan may also receive cash or other bonuses from the Company under other bonus programs, which may or may not qualify for deductibility under Section 162(m) of the Code. No payment under any such other arrangement may be contingent upon failure to satisfy the criteria for payment of an incentive bonus under the Restated Annual Bonus Plan.
The Board believes it is in the best interests of the Company and its shareholders to provide for a shareholder-approved plan under which annual bonuses paid to its executive officers can qualify for deductibility for federal income tax purposes. Accordingly, the Company has structured the Restated Annual Bonus Plan in a manner such that payments under it can satisfy the requirements for "performance-based" compensation within the meaning of Section 162(m) of the Code. The Company may also grant annual bonuses under the Restated Annual Plan that are not intended to meet the requirements for "performance-based" compensation within the meaning of Section 162(m). Notwithstanding the fact that the Restated Annual Bonus Plan has been structured to enable the Company to pay bonuses that are intended to constitute "performance-based" compensation, there is no guarantee that amounts payable under the Restated Annual Bonus Plan will qualify as such and, as described in the Compensation Discussion & Analysis section of this proxy statement, the Compensation Committee may, and has, awarded compensation that does not qualify as performance-based compensation.
In general, Section 162(m) places a limit on the deductibility for federal income tax purposes of the compensation paid to the NEOs set forth in the Summary Compensation Table, other than the Chief Financial Officer, who were employed by the Company on the last day of its taxable year. Under Section 162(m), compensation paid to such persons in excess of $1 million in a taxable year is not generally deductible. However, compensation that qualifies as "performance-based" as determined under Section 162(m) does not count against the $1,000,000 limitation.
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2017 PROXY STATEMENT
One of the requirements of "performance-based" compensation for purposes of Section 162(m) is that the material terms of the performance goal under which compensation may be paid be disclosed to and approved by the Company's shareholders at least once every five years. For purposes of Section 162(m), the material terms include: (a) the employees eligible to receive compensation; (b) a description of the business criteria on which the performance goal is based; and (c) the maximum amount of compensation that can be paid to an employee under the performance goal. Each of these aspects of the Restated Annual Bonus Plan is discussed below, and shareholder approval of the Restated Annual Bonus Plan is intended to constitute approval of each of these aspects of the Restated Annual Bonus Plan for purposes of the approval requirements of Section 162(m) of the Code.
The following is a summary of the principal features of the Restated Annual Bonus Plan and is qualified in its entirety by reference to the terms of the Restated Annual Bonus Plan set forth in Appendix A to this Proxy Statement. The Restated Annual Bonus Plan is effective as of March 13, 2017, contingent upon shareholder approval.
The Restated Annual Bonus Plan is administered by the Compensation Committee of the Board of Directors (the "Compensation Committee") or such other committee as the Board designates. The Compensation Committee currently consists of four independent members, all of whom are "non-employee directors" as defined in Rule 16b-3 issued under the Exchange Act and "outside directors" as defined in the regulations issued under Section 162(m) of the Code. Except as limited by the Restated Annual Bonus Plan, the Compensation Committee has all of the express and implied powers and duties set forth in the Restated Annual Bonus Plan and has full authority and discretion to interpret the Restated Annual Bonus Plan and to make all other determinations considered necessary or advisable for the administration of the Restated Annual Bonus Plan. The Compensation Committee can adopt such other rules, policies and forms for the administration, interpretation and implementation of the Restated Annual Bonus Plan as it considers advisable. All determinations, interpretations and selections made by the Compensation Committee regarding the Restated Annual Bonus Plan are final and conclusive. The Compensation Committee may delegate certain administrative functions to individuals designated by the committee.
For each fiscal year or part thereof (in the case of an individual who only becomes eligible to participate after the beginning of the fiscal year), the Compensation Committee selects the executive officers (currently eight persons), senior corporate and divisional officers and other key employees (currently approximately 833 persons in the aggregate) who would be participants for the year. The Compensation Committee may limit the number of executive officers and senior corporate and divisional officers and other key employees who would be participants for a fiscal year or part thereof. Selection as a participant for a fiscal year or part thereof by the Compensation Committee is limited to that fiscal year or part thereof. An individual is a participant for a fiscal year or part thereof only if designated as a participant by the Compensation Committee for such fiscal year or part thereof. The amount of bonus any individual receives under the Restated Annual Bonus Plan depends upon corporate and/or business unit performance for each fiscal year and is not presently determinable for the Company's 2017 fiscal year. The benefits set forth in the table below were paid under the 2012 Annual Plan with respect to fiscal 2016:
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The Compensation Committee establishes performance goals for each participant in the manner and within the time limits specified in the plan. A target bonus goal is established by the Compensation Committee, expressed as a percentage of the participant's base salary or a
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2017 PROXY STATEMENT
specified dollar amount. The Compensation Committee then establishes incentive bonus levels, expressed as a percentage of the target bonus, which is paid to the participant at specified levels of performance by the Company, a business unit, subsidiary, division, or profit center, as applicable. The term incentive bonus, as used in the Restated Annual Bonus Plan, means an annual bonus awarded and paid to a participant for services to the Company during a fiscal year or part thereof that is based upon achievement of pre-established objectives. The Compensation Committee also establishes any specific conditions under which an incentive bonus could be reduced or forfeited (but not increased).
Under the Restated Annual Bonus Plan, performance is determined by reference to one or more of the following objectively determinable factors, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit, subsidiary, division, or profit center, either individually, alternatively or in any combination, on an absolute basis or relative to a pre-established target, to previous years' results or to a designated comparison group, as selected by the Compensation Committee: (i) net earnings or earnings per share (including earnings before interest, taxes, depreciation and/or amortization); (ii) income, net income or operating income; (iii) revenues; (iv) net sales; (v) return on sales; (vi) return on equity; (vii) return on capital (including return on total capital or return on invested capital); (viii) return on assets or net assets; (ix) earnings per share; (x) economic or business value added measurements; (xi) return on invested capital; (xii) return on operating revenue; (xiii) cash flow (before or after dividends); (xiv) stock price; (xv) total shareholder return; (xvi) market capitalization; (xvii) economic value added; (xviii) debt leverage (debt to capital); (xix) operating profit or net operating profit; (xx) operating margin or profit margin; (xxi) cash from operations; (xxii) market share; (xxiii) product development, release schedules lead times, delivery or quality; (xxiv) new product innovation; (xxv) cost or expense control; (xxvi) customer acquisition or retention; (xxvii) customer service; or (xxviii) customer satisfaction.
To the extent consistent with Section 162(m) of the Code, the administrator (i) will appropriately adjust any evaluation of performance under qualifying performance criteria to eliminate the effects of charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or related to the disposal of a segment of a business or related to a change in accounting principle, all as determined in accordance with standards established by applicable accounting provisions, as well as the cumulative effect of accounting changes, in each case as determined in accordance with generally accepted accounting principles or identified in the Company's financial statements or notes to the financial statements, and (ii) may appropriately adjust any evaluation of performance under qualifying performance criteria to exclude any of the following events that occurs during a performance period: (a) asset write-downs, (b) litigation, claims, judgments or settlements, (c) the effect of changes in tax law or other such laws or provisions affecting reported results, (d) corporate stock and asset acquisitions and dispositions, and (e) accruals of any amounts for payment under the Restated Annual Bonus Plan or any other compensation arrangement maintained by the Company.
The incentive bonus for each eligible participant for a fiscal year is determined on the basis of the target bonus and performance criteria established by the Compensation Committee for the fiscal year or part thereof, as applicable. The Compensation Committee determines, and certifies in writing prior to payment of the incentive bonus, that performance for the fiscal year or part thereof, as applicable, satisfied the criteria established by the Compensation Committee. The incentive bonus for any participant for a fiscal year may not, in any event, exceed $4,000,000. The incentive bonus of each participant is paid as soon as feasible following the final determination and certification by the Compensation Committee of the amount payable, but not later than the fifteenth day of the third month following the end of the performance period to which it relates.
In the event of a termination of employment prior to the end of a fiscal year, the incentive bonus otherwise payable to a participant for the fiscal year is adjusted as follows. If a participant ceases to be a participant before the end of any fiscal year and more than six months after the beginning of such fiscal year because of death, or normal or early retirement under the Company's retirement plan, as then in effect, or total disability under the Company's long-term disability plan, an award is paid to the participant or the participant's beneficiary after the end of such fiscal year prorated as follows: the award, if any, for such fiscal year is equal to 100% of the incentive bonus that the participant would have received if the participant had been a participant during the entire fiscal year, multiplied by the ratio of the participant's full months as a participant during that fiscal year to the 12 months in that fiscal year. If an employee ceases to be a participant during any fiscal year, or prior to actual receipt of the award for a previous fiscal year, because of the participant's termination of employment for any reason other than as described above, the participant is not entitled to any award for such fiscal year.
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2017 PROXY STATEMENT
The Board of Directors may terminate the Restated Annual Bonus Plan at any time or may from time to time amend the Restated Annual Bonus Plan as it considers proper and in the best interests of the Company.
If the Restated Annual Bonus Plan is approved by the Company's shareholders, the Restated Annual Bonus Plan would terminate as of the date of the first meeting of shareholders occurring in the fifth year following approval (that is, 2022) or any subsequent re-approval. If the Restated Annual Bonus Plan terminates due to lack of approval by the shareholders, no incentive bonus would be awarded under the plan for the fiscal year in which the Restated Annual Bonus Plan terminates.
VOTE REQUIRED AND BOARD RECOMMENDATION
Approval of the Amended and Restated Executive Short-Term Incentive Plan (Annual Bonus Plan) requires the favorable vote of a majority of shares cast affirmatively or negatively on the matter for approval.
BOARD RECOMMENDATION
The Board of Directors recommends that you vote FOR approval of the Restated Executive Short-Term Incentive Plan (Annual Bonus Plan).
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2017 PROXY STATEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 2, 2016,December 30, 2018, the Company has not engaged in any "related person" transactions with its directors, executive officers or holders of 5% or more of Company voting securities, affiliates or any member of the immediate family of the foregoing persons.
RELATED PERSON TRANSACTIONS POLICY
Wolverine Worldwide's Board adopted written policies and procedures regarding related person transactions. They require the Governance Committee to review and either approve or disapprove the Company entering into any Interested Transactions (defined below). If advance approval is not feasible, then the Governance Committee must review and ratify the Interested Transaction at its next meeting.
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| Interested Transaction | Any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which: | |||
(1) | the aggregate amount involved is or is expected to exceed $120,000 since the beginning of Wolverine Worldwide's last completed fiscal year; | |||
| (2) | Wolverine Worldwide is a participant; and | |||
| (3) | any Related Person (defined below) has or will have a direct or indirect interest. | |||
An Interested Transaction does not include: | ||||
(1) | any employment compensation paid to an executive officer of the Company if the Compensation Committee approved or recommended to the Board of Directors for approval of such compensation; | |||
| (2) | any compensation paid to a director for service as a director of the Company; | |||
| (3) | any transaction in which a Related Person has an indirect interest solely as a result of being (i) a director or, together with all other Related Persons, as defined below, a less than 10% beneficial owner of an equity interest in another entity, or both, or (ii) a limited partner in a partnership in which the Related Person, together with all other Related Persons, has an interest of less than 10%; | |||
| (4) | any transaction in which the Related Person's interest arises solely from the ownership of the Company's common stock and all holders of the Company's common stock received the same benefit on a pro rata basis (e.g., a dividend) | |||
| (5) | any transaction with another publicly traded company where the Related Person's interest arises solely from the ownership of more than 5% of the Company's common stock and the ownership of a non-controlling interest in the other publicly traded company. | |||
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| Related Person | Any: | |||
(a) | person who is or was at any point during the last fiscal year for which Wolverine Worldwide filed an Annual Report on Form 10-K and | |||
| (b) | beneficial owner of greater than five percent of Wolverine Worldwide's common stock; or | |||
| (c) | immediate family | |||
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The Governance Committee considers whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third-partythird party under the same or similar circumstances, the extent of the Related Person's interest in the transaction, and other factors that it deems relevant. No director participates in any discussion or approval of an Interested Transaction for which he or she is a Related Person, except to provide information to the Governance Committee.
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2017 PROXY STATEMENT
Additional Information |
A list of shareholders entitled to vote at the meeting will be available for review by Wolverine Worldwide shareholders at the office of Secretary, Wolverine World Wide, Inc., 9341 Courtland Drive, N.E., Rockford, Michigan 49351, during ordinary business hours for the 10-day period before the meeting.
DIRECTOR AND OFFICER INDEMNIFICATION
The Company indemnifies its directors and NEOs to the fullest extent permitted by law so that they will be free from undue concern about personal liability in connection with their service to the Company.
DELINQUENT SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE16(a) REPORTS
Section 16(a) of the Exchange Act requires the Company's directors and NEOs, and persons who beneficially own more than 10% of the outstanding shares of the Company's common stock, to file reports of ownership and changes in ownership of shares of common stock with the SEC. Directors, NEOs and greater than 10% beneficial owners are required by SEC regulations to furnish Wolverine Worldwide with copies of all Section 16(a) reports they file. Based on its review of the copies of such reports received by it, or written representations from certain reporting persons, that no reports on Form 5 were required for those persons for fiscal year 2016, the Company believes that during fiscal year 2016,2019, its officers and directors filed the required reports under Section 16(a) on a timely basis, except as follows: (i)for one report related to an awardtransaction for each of restricted stock, an award of performance stock,Messrs. Boromisa, Gerber, Gromek, Jeppesen, Kollat, Krueger, Long, Spaletto and an issuance of stock options, which vestsVolkema and Mses. Boswell, Divol, Klimek and Lauderback, in three installments, to Amy Klimek on July 13, 2016 and (ii) one report related to an award of restricted stock to Michael Jeppesen on July 13, 2016; both reports were filed on July 20, 2016each case, due to an inadvertent delay by the Company.administrative error.
SHAREHOLDER PROPOSALS FOR INCLUSION IN NEXT YEAR'S PROXY STATEMENT
Pursuant to SEC Rule 14a-8, some shareholder proposals may be eligible for inclusion in Wolverine Worldwide's 2018 proxy statement2021 Proxy Statement and proxy card. Any such shareholder proposals must be submitted in writing to the Secretary of Wolverine Worldwide no later than the close of business on November 28, 2017.26, 2020. You should address all shareholder proposals to the attention of Secretary, Wolverine World Wide, Inc., 9341 Courtland Drive, N.E., Rockford, Michigan 49351.
OTHER SHAREHOLDER PROPOSALS FOR PRESENTATION AT NEXT YEAR'S ANNUAL MEETING
The Company's By-Laws require that any shareholder proposal that is not submitted for inclusion in next year's proxy statementProxy Statement under SEC Rule 14a-8, but is instead sought to be presented directly at the 20182021 Annual Meeting of Shareholders, must be received at the Company's principal executive offices by the close of business not less than 90 days nor more than 120 days prior to the first anniversary of the 20172020 Annual Meeting. As a result, proposals, including director nominations, submitted pursuant to these provisions of the By-lawsBy-Laws must be received between January 4, 2018,December 31, 2020, and the close of business on February 3, 2018.January 30, 2021. You should address a proposal to Secretary, Wolverine World Wide, Inc., 9341 Courtland Drive N.E., Rockford, Michigan 49351, and include the information and comply with the requirements set forth in those By-laws,By-Laws, which the Company has posted on its website. SEC rules permit management to vote proxies in its discretion in certain cases if the shareholder does not comply with this deadline, and in certain other cases notwithstanding the shareholder's compliance with this deadline.
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2017 PROXY STATEMENT
Shareholders of record at the close of business on March 13, 2017,18, 2020, are eligible to vote at the Annual Meeting. The Company's voting securities consist of its $1.00 par value common stock, and there were 96,954,35781,069,852 shares outstanding and entitled to vote on the record date. Each share outstanding on the record date will be entitled to one vote on each director nominee and one vote on each other matter. Treasury shares are not voted. Individual votes of shareholders are kept private, except as appropriate to meet legal requirements. Access to proxies and
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2020 PROXY STATEMENT | | | | 73 |
other individual shareholder voting records is limited to the independent inspectors of election and certain employees of the Company and its agents who acknowledge their responsibility to comply with this policy of confidentiality.
A majority of the outstanding shares of common stock as of the record date must be present at the Annual Meeting in order to hold the Annual Meeting and conduct business. This is called a "quorum." Your shares are counted as present at the meeting if you are present at the Annual Meeting and vote in person, a proxy card has been properly submitted by you or on your behalf, or you have submitted your proxy by telephone or by Internet,internet, or by completing, signing, dating and returning your proxy form in the enclosed envelope. Both abstentions and broker non-votes (defined below in "Vote Required for Election and Approval") are counted as present for the purpose of determining the presence of a quorum.
VOTE REQUIRED FOR ELECTION AND APPROVAL
For Proposal 1, Election of Directors for Terms Expiring in 2020,2023, directors are elected by a majority of votes cast unless the election is contested, in which case directors are elected by a plurality of votes cast. A majority of votes cast means that the number of shares voted "for" a Director nominee exceeds the number of votes cast "against" the Director nominee. If an incumbent director in an uncontested election does not receive a majority of votes cast for his or her election, under the Company's Corporate Governance Guidelines, the director is required to submit a letter of resignation to the Board for consideration by the Governance Committee. The Governance Committee will then make a recommendation to the Board as to whether to accept or reject the tendered resignation. The Governance Committee and the Board, in making their decisions, may implement any procedures they deem appropriate and may consider any factor or other information that they deem relevant. The Board will then act on the tendered resignation, taking into account the Governance Committee's recommendation, and will publicly disclose its decision regarding the resignation within 90 days after the results of the election are certified. A director whose resignation is under consideration shall abstain from participating in any recommendation or decision regarding that resignation. If the resignation is not accepted, the director will continue to serve until the next annual meeting of shareholders at which such director faces re-election and until such director's successor is elected and qualified.
Proposal 2, Advisory Vote Toto Approve Executive Compensation, is a non-binding, advisory vote. Therefore, there is no required vote that would constitute approval. The Company values the opinions expressed by its shareholders in this advisory vote, and the Board and Compensation Committee will consider the outcome of these votes when designing compensation programs and making future compensation decisions for the Company's named executive officers.
Proposal 3, Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation, is a non-binding advisory vote. Therefore, there is no required vote that would constitute approval. The Company values the opinions expressed by its shareholders in this advisory vote, and the Board and Compensation Committee will consider the outcome of these votes when determining the frequency of future advisory votes on executive compensation.
Proposal 4, Ratification of Appointment of Independent Registered Public Accounting Firm, requires the affirmative vote of a majority of shares cast affirmatively or negatively on the matter for approval.
Proposal 5, Approval of Amended and Restated Executive Short-Term Incentive Plan (Annual Bonus Plan) requires the affirmative vote of a majority of shares cast affirmatively or negatively on the matter for approval.
With respect to Proposals 1, 2, 3, 4 and 5, abstentionsAbstentions and broker non-votes, if any, will have will have no effect.effect on the outcome of the election of directors. Generally, broker non-votes occur when shares held by a broker in "street name" for a beneficial owner are not voted with respect to a particular proposal because (1) the
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2017 PROXY STATEMENT
broker has not received voting instructions from the beneficial owner, and (2) the broker lacks discretionary voting power to vote those shares. Brokers do not have discretionary authority with respect to any of the proposals except for Proposal 4.(3). Abstentions are not counted as affirmative votes on a matter.
VOTING RESULTS OF THE ANNUAL MEETING
The Company will announce preliminary voting results at the Annual Meeting and publish final results in a Form 8-K within four business days following the Annual Meeting. If final results are not known within four business days of the Annual Meeting, then the Company will file a Current Report on Form 8-K with the preliminary results and file an amended Current Report on Form 8-K within four business days of the availability of the final results.
You may vote shares held directly in your name as the shareholder of record in person at the Annual Meeting. If you choose to vote in person, please bring the enclosed proxy card and proof of identification. Even if you plan to attend the Annual Meeting in person, Wolverine Worldwide recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the Annual Meeting. You may vote shares held in "street name" through a brokerage account or by a bank or other nominee in person
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2020 PROXY STATEMENT | | | | 74 |
if you obtain a proxy from the record holder giving you the right to vote the shares. Each shareholder may appoint only one proxy holder or representative to attend the meeting on his or her behalf.
The shares represented by all valid proxies received by telephone, by Internetinternet or by mail will be voted in the manner specified. Where the shareholder has not indicated a specific choice, the shares represented by all valid proxies received will be voted in accordance with the Board's recommendations as follows: (1) for each of the nominees for directors named earlier in this proxy statement,Proxy Statement, (2) for approval of the advisory resolution to approve executive compensation, and (3) for every one year frequency of advisory votes on executive compensation, (4) for ratification of the appointment of the independent registered public accounting firm and (5) for approval of the Amended and Restated Executive Short-Term Incentive Plan (Annual Bonus Plan).firm. The Board has not received timely notice of any other matter that may come before the Annual Meeting. However, should any matter not described above be properly presented at the Annual Meeting, the persons named in the proxy form will vote in accordance with their judgment, as permitted.
A shareholder who gives a proxy may revoke it at any time before it is exercised by voting in person at the Annual Meeting, by delivering a subsequent proxy or by notifying the inspectors of election in writing of such revocation. If your Wolverine Worldwide shares are held for you in a brokerage, bank or other institutional account, you must obtain a proxy from that entity and bring it with you to hand in with your ballot, in order to be able to vote your shares at the Annual Meeting.
The Company will pay the expenses of solicitation of proxies for the Annual Meeting. Solicitations may be made in person or by telephone, by officers and employees of the Company, or by nominees or other fiduciaries who may mail materials to or otherwise communicate with the beneficial owners of shares held by the nominees or other fiduciaries. These individuals will not be paid any additional compensation for any such solicitation. Upon request, the Company will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding material to beneficial owners of the Company's common stock. The Company has engaged Georgeson Inc. at an estimated cost of $9,500, plus expenses and disbursements, to assist in solicitation of proxies.
DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS
If you are the beneficial owner, but not the record holder, of shares of Wolverine Worldwide stock, your broker, bank or other nominee may only deliver one copy of this proxy statementProxy Statement and the Company's 20162019 Annual Report to multiple shareholders who share an address, unless that nominee has received contrary instructions from one or more of the shareholders. The Company will deliver promptly, upon written or
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2017 PROXY STATEMENT
oral request, a separate copy of this proxy statementProxy Statement and its 20162019 Annual Report to a shareholder at a shared address to which a single copy of the documents was delivered. A shareholder who wishes to receive a separate copy of the proxy statementProxy Statement and annual report, now or in the future, or shareholders who share an address and receive multiple copies of the proxy statementProxy Statement and annual report but would like to receive a single copy, should submit this request by writing to Investor Relations, Wolverine World Wide, Inc., 9341 Courtland Drive N.E., Rockford, Michigan 49351, or by calling (616) 866-5500 and asking for Investor Relations. Beneficial owners sharing an address who are receiving multiple copies of proxy materials and who wish to receive a single copy of such materials in the future should make a request directly to their broker, bank or other nominee.
ACCESS TO PROXY STATEMENT AND ANNUAL REPORT
Distribution of this Proxy Statement and enclosed proxy card to shareholders is scheduled to begin on or about March 26, 2020. Wolverine Worldwide's financial statements for the fiscal year ended December 31, 2016,28, 2019, are included in the Company's 20162019 Annual Report, which the Company is providing to shareholders at the same time as this proxy statement.Proxy Statement. Wolverine Worldwide's Proxy Statement for the 2020 Annual Meeting and the Annual Report to Shareholders for the fiscal year ended December 31, 2016,28, 2019, are available atwww.wolverineworldwide.com/2017annualmeeting2020annualmeeting. If you have not received or do not have access to the 20162019 Annual Report, write toto: Wolverine World Wide, Inc., 9341 Courtland Drive N.E., Rockford, Michigan 49351, Attn: Investor Relations or call (616) 866-5500 and ask for Investor Relations, and the Company will send a copy to you without charge.
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APPENDIX A
APPENDIX A |
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APPENDIX A
WOLVERINE WORLD WIDE, INC.AMENDED AND RESTATED EXECUTIVESHORT-TERM INCENTIVE PLAN (ANNUAL BONUS PLAN)
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APPENDIX A
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APPENDIX A
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APPENDIX A
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APPENDIX A
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APPENDIX A
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APPENDIX B
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APPENDIX B
This Proxy Statementdocument contains "forward-looking statements," which are statements relating to future, not past, events. In this context, forward-looking statements often address the Company'smanagement's current beliefs, assumptions, expectations, estimates and projections about future business and financial performance, national, regional or global political, economic and market conditions, and the Company itself. Such statements often contain words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "should," "will," variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Uncertainties that could cause the Company's performance to differ materially from what is expressed in forward-looking statements include, but are not limited to, the following:
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APPENDIX BA
These or other uncertainties could cause a material difference between an actual outcome and a forward-looking statement. The uncertainties included here are not exhaustive.exhaustive and are described in more detail in Part I, Item 1A: "Risk Factors" of the Company's Annual Report on Form 10-K. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company does not undertake an obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
NON-GAAP RECONCILIATION TABLETABLES
The following tables contain information regarding the non-GAAP adjustments used by the Company in the presentation of its financial results:
2019 FULL-YEAR RECONCILIATION TABLES
RECONCILIATION OF REPORTED REVENUE
TO ADJUSTED REVENUE ON A CONSTANT CURRENCY BASIS*
(Unaudited)
(In millions)
| | GAAP Basis 2019 | Foreign Exchange Impact | Constant Currency Basis 2019 | GAAP Basis 2018 | Constant Currency Growth (Decline) | Reported Growth (Decline) | | ||||||||||||||||||||||||
REVENUE | | | | | | | | | | | | | | | | | | | | ||||||||||||
Wolverine Michigan Group | | | $ | 1,299.7 | | | | $ | 11.3 | | | | $ | 1,311.0 | | | | $ | 1,272.2 | | | | 3.0 | % | | | 2.2 | % | | ||
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Wolverine Boston Group | | | 910.9 | | | | 5.2 | | | | 916.1 | | | | 895.5 | | | | 2.3 | | | | 1.7 | | | ||||||
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Other | | | 63.1 | | | | 0.2 | | | | 63.3 | | | | 71.5 | | | | (11.5 | ) | | | (11.7 | ) | | ||||||
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Total | | | $ | 2,273.7 | | | | $ | 16.7 | | | | $ | 2,290.4 | | | | $ | 2,239.2 | | | | 2.3 | % | | | 1.5 | % | | ||
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2020 PROXY STATEMENT | | | | A-3 |
APPENDIX A
RECONCILIATION OF REPORTED DILUTED EPS
TO ADJUSTED
DILUTED EPS ON A CONSTANT CURRENCY BASISEPS*
(Unaudited)
| | GAAP Basis EPS | | Adjustments1 | | As Adjusted EPS | | Foreign Exchange Impact | | As Adjusted EPS On a Constant Currency Basis | | GAAP Basis | Adjustments(1) | As Adjusted | | ||||||||||||||||||
Fiscal 2016 | $ | 0.89 | $ | 0.47 | $ | 1.36 | $ | 0.16 | $ | 1.52 | ||||||||||||||||||||||
EPS — Fiscal 2019 | | | $ | 1.44 | | | | $ | 0.81 | | | | $ | 2.25 | | | ||||||||||||||||
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Fiscal 2015 | $ | 1.20 | $ | 0.25 | $ | 1.45 | ||||||||||||||||||||||||||
EPS — Fiscal 2018 | | | $ | 2.05 | | | | $ | 0.12 | | | | $ | 2.17 | | | ||||||||||||||||
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To supplement the consolidated condensed financial statements presented in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company describes what certain financial measures would have been if restructuringenvironmental and impairment costs, organizational transformationother related costs and debt extinguishmentenvironmental cost recoveries, business development related costs, reorganization costs, the impact of tax reform updates and a foreign currency remeasurement gain that is not expected to reoccur were excluded. The Company believes these non-GAAP measures provide useful information to both management and investors to increase comparability to the prior period by adjusting for certain items that may not be indicative of core operating measures and to better identify trends in our business. The adjusted financial results are used by management to, and allow investors to, evaluate the operating performance of the Company on a comparable basis. The Company evaluates results of operations on both a reported and a constant currency basis.
The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. The Company believes providing constant currency information provides valuable supplemental information regarding results of operations, consistent with how the Company evaluates performance. The Company calculates constant currency by converting the current-period local currency financial results using the prior period exchange rates and comparing these adjusted amounts to our current period reported results.
Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitution for, financial information prepared in accordance with GAAP. A reconciliation of all non-GAAP measures included in this Proxy Statement, to the most directly comparable GAAP measures are found in the financial tables above.
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. Electronic Voting Instructions Available 24 hours aVOTE 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 7 days a week! Instead of mailingbefore the cut-off date or meeting date. Have your proxy card in hand when you may choose one ofaccess the web site and follow the instructions to obtain your records and to create an electronic voting methods outlined belowinstruction form. WOLVERINE WORLD WIDE, INC. 9341 COURTLAND DRIVE, N.E. ROCKFORD, MI 49351 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 proxy. VALIDATION DETAILS ARE LOCATEDvoting 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 THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Daylight Time, on May 3, 2017. Vote by Internet • Go to www.investorvote.com/WWW • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF YOU HAVE NOT VOTED VIA THE INTERNETBLUE OR TELEPHONE, FOLD ALONG THE PERFORATION,BLACK INK AS FOLLOWS: D07042-Z76873 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THE BOTTOMTHIS PORTION IN THE ENCLOSED ENVELOPE. q A Proposals —ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. WOLVERINE WORLD WIDE, INC. The Board of Directors recommendsrecommend a vote FOR all the nominees listed and FOR Proposals 2 4 and 5, and 1 Yr on Proposal 3. +For Against Abstain 1. Election of Directors: ! ! ! ! ! ! ! ! ! ! ! ! 1a. William K. Gerber 1b. Blake W. Krueger 1c. Nicholas T. Long 1d. Michael A. Volkema For Against Abstain For Against Abstain For Against Abstain 01 - William K. Gerber 02 - Blake W. Krueger 03 - Nicholas T. Long 04 - Michael A. Volkema 3 Yrs2 Yrs1 Yr Abstain For Against Abstain 3. Advisory vote on the frequency of future advisory votes on compensation of the Company’s named executive officers.! ! ! ! ! ! 2. An advisory resolution approving compensation for the Company’sCompany's named executive officers. ForAgainst Abstain 4.3. Proposal to ratify the appointment of Ernst & Young LLP as the Company’sCompany's independent registered public accounting firm for fiscal year 2017. 5. Proposal to approve2020. ! For address changes and/or comments, please check this box and write them on the Amended and Restated Executive Short-Term Incentive Plan (Annual Bonus Plan). B Non-Voting Items Change of Address — Please print new address below. C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Belowback where indicated. IMPORTANT - Please sign exactly as your name(s) appearsappear(s) on this Proxy. When signing on behalf of a corporation, partnership, estate or trust, indicate title or capacity of person signing. If shares are held jointly, each holder must sign. Signature [PLEASE SIGN WITHIN BOX] Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. + 1 U P X 02JY3C Annual Meeting Proxy Card X IMPORTANT ANNUAL MEETING INFORMATION(Joint Owners) Date
. WOLVERINE WORLD WIDE, INC. 9341 Courtland Drive, N.E. Rockford, Michigan 49351 Wolverine World Wide, Inc. will be holding its Annual Meeting of StockholdersShareholders on May 4, 2017.April 30, 2020, at its offices located at 9341 Courtland Drive, N.E. Rockford, MI 49351. The enclosed Notice of 20172020 Annual Meeting of StockholdersShareholders provides information regarding the matters that are expected to be voted on at the meeting. Your vote is important to us. Even if you plan to attend the meeting, please read the enclosed materials and vote through the Internet,internet, by telephone or by mailing the Proxy Card below. Wolverine is actively monitoring the public health and travel concerns relating to the coronavirus (COVID-19) and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the Annual Meeting in person, Wolverine will announce alternative arrangements for the meeting, which may include a change in venue or holding the meeting solely by means of remote communication (i.e., a virtual meeting). Please monitor Wolverine’s website where Annual Meeting materials are posted (www.wolverineworldwide.com/2020annualmeeting) for updated information. If you plan to attend the meeting, please check the website regularly prior to the meeting date. As always, Wolverine encourages you to vote these shares before the Annual Meeting. Telephone and Internet Voting.Voting On the reverse side of this card are instructions on how to vote through the Internetinternet or by telephone. Please consider voting through one of these methods. Your vote is recorded as if you mailed in your Proxy.Proxy Card. Thank you in advance for your participation in our 20172020 Annual Meeting. Wolverine World Wide, Inc. qImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement, Annual Report and Form 10-K are available at www.proxyvote.com. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy —D07043-Z76873 WOLVERINE WORLD WIDE, INC. Annual Meeting of Shareholders April 30, 2020 10:00 AM This proxy is solicited on behalf ofby the Board of Directors The undersigned stockholdershareholder hereby appoints Blake W. Krueger and Brendan M. Gibbons,Kyle L. Hanson, and each of them, each with full power of substitution, as proxies to represent the undersigned stockholdershareholder and to vote all shares of Common Stock of Wolverine World Wide, Inc. that the stockholdershareholder would be entitled to vote on all matters that properly come before the Annual Meeting of StockholdersShareholders to be held at the Company’s headquartersCompany's offices located at 9341 Courtland Drive, N.E., Rockford, Michigan,MI 49351, on Thursday, May 4, 2017,April 30, 2020, at 1010:00 a.m. Eastern Daylight Time, and any adjournment of that meeting. If this Proxy is properly executed, the shares represented by this Proxy will be voted as specified. If this Proxy is properly executed but no specification is made, the shares represented by this Proxy will be voted for the election of all nominees named on this Proxy as directors and for approval of Proposals 2 4 and 5, and 1 Yr on Proposal 3. The shares represented by this Proxy will be voted in the discretion of the proxies on any other matters that may properly come before the meeting. PLEASE DO NOT VOTE BY MORE THAN ONE METHOD. THE LAST VOTE RECEIVED WILL BE THE OFFICIAL VOTE. DO NOT RETURN THIS PROXY IF YOU ARE VOTING BY THE INTERNET OR BY TELEPHONE. (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) (CONTINUED AND TO BE SIGNED ON REVERSE SIDE.) Address Changes/Comments:
