UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
the Securities Exchange Act of 1934 (Amendment No. ββββββ)
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| The EstΓ©e Lauder Companies Inc. 767 Fifth Avenue New York, New York 10153 | β | β | β | β | |
β | William P. Lauder Executive Chairman | β |  | ![[MISSING IMAGE: lg_esteelaudercom-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/lg_esteelaudercom-pn.jpg) | β |
β | β | β | β | SeptemberΒ | β |
Due to ongoing concerns about the COVID-19 pandemic, we are holding the Annual Meeting in a virtual-only meeting format.
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Eastern Time TABLE OF CONTENTS Related Person Transactions Policy and Procedures Proxy Procedure and Expenses of Solicitation Financial Measure Net Sales Net Sales as adjusted(1) Net Sales as adjusted in constant currency(1) Operating Margin Operating Margin as adjusted(1) Diluted EPS Diluted EPS as adjusted(1) Diluted EPS as adjusted in constant currency(1) Return on Invested Capital(2) Cash Flow from Operations Total Stockholder Return ("TSR") TSRΒ β S&PΒ 500 Composite 16-digit control number and follow the instructions to submit a question. Alternatively, to submit a question during the meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/ EL2022 using the 16-digit control number and follow the instructions to submit a question. How do I cast my vote if I am a stockholder of record? During the meeting, you may vote online by following the instructions at www.virtualshareholdermeeting.com/EL2022. βstreet name?β Notice, as applicable. If you do not If you attend the Annual Meeting at www.virtualshareholdermeeting.com/EL2022, you may revoke your proxy and change your vote by voting online during the meeting. What if a quorum is not represented at the Annual Meeting? ItemΒ 1: β β the appointment of NY 10153, ten days prior to the Annual Meeting. If you hold your shares in a bank or brokerage account, you also may have the opportunity to receive copies of these documents electronically. Please check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability of this service. As of the Record Date, ClassΒ I is comprised of five directors, ClassΒ II is comprised of six directors, and ClassΒ III is comprised of six directors. Rose Marie Bravo, a ClassΒ I director, will retire from the Board effective NovemberΒ 17, 2022, and the Board size will be decreased to 16Β members, effective NovemberΒ 17, 2022. The Board believes that the above-mentioned attributes, along with the leadership skills and other experience of its Board members, some of which are described in the biographies below, provide the appropriate perspectives and judgment to guide the As of the Record Date, eight of our directors are women; one of our directors self-identifies as Black or African American; one of our directors self-identifies as Afro-Latino, and three of our directors self-identify as Asian. experience , and Hillman Solutions Corp. The Lauder family has direct and indirect holdings of approximately β As noted above, effective as of NovemberΒ 18, 2022 (the date of our Annual Meeting of Stockholders), Ms.Β Tejada will leave the Audit Committee. Stock PlanΒ Subcommittee). held in a virtual-only meeting format via live webcast. β executive sessions of the Board of Directors our Board of Directors. In forwarded. TABLE OF CONTENTS βAgreements with Aerin β As used in this Proxy Statement, the term The Company is required to pay all expenses (other than underwriting discounts and commissions of the selling stockholders, taxes payable by the selling stockholders, and the fees and expenses of the selling β Under the Creative Consultant Agreement, Aerin Lauder, ELI launched AERIN Beauty in SeptemberΒ 2012 with several products, and additional products have been introduced since then. ELI may launch additional 2022. At JuneΒ 30, 2022, such entities had approximately $915,000 deposited with the Company to cover expenses. The Presiding Director receives an additional annual cash retainer ofβ $30,000, payable quarterly, which may be deferred as explained below. guidelines. The Nominating and ESG Committee has engaged Semler Brossy Consulting Group, LLC (βSemler Brossyβ) to assess trends and developments in director compensation practices and assist the committee in fulfilling its responsibilities regarding compensation of directors for service on the Companyβs Board and its committees. Semler Brossyβs work for the Committee includes a competitive benchmarking of director compensation practices, referencing the same peer group used for the Companyβs executive compensation analysis, as set forth in the Compensation Discussion and Analysis. The Nominating and ESG Committee determined that Semler Brossy is free of conflicts of interest. Name Charlene Barshefsky Rose Marie Bravo Wei Sun Christianson Paul J. Fribourg Mellody Hobson Irvine O. Hockaday,Β Jr. Richard D. Parsons Lynn Forester de Rothschild Barry S. Sternlicht Richard F. Zannino Rose Marie Bravo β β β β β β β Rose Marie Bravo β β β β β β β Name of Beneficial Owner Leonard A. Lauder(3)(4) LAL Family Corporation(3)(5) RonaldΒ S. Lauder(3)(6) WilliamΒ P. Lauder(3)(7) GaryΒ M. Lauder(3)(8) Aerin Lauder(3)(9) Jane Lauder(3)(10) JoelΒ S. Ehrenkranz, as trustee(3)(11) RichardΒ D. Parsons, individually and as trustee(3)(12) CarolΒ S. Boulanger, individually and as trustee(3)(13) Charlene Barshefsky(14) Rose Marie Bravo(15) Wei Sun Christianson(16) PaulΒ J. Fribourg(17) Mellody Hobson(18) IrvineΒ O. Hockaday,Β Jr.(19) Lynn Forester de Rothschild(20) BarryΒ S. Sternlicht(21) RichardΒ F. Zannino(22) Fabrizio Freda(23) John Demsey(24) Cedric ProuvΓ©(25) TraceyΒ T. Travis(26) BlackRock,Β Inc.(27) FMRΒ LLC(28) The Vanguard Group(29) All directors and executive officers as a group (23Β persons)(30) Financial Measure Net Sales Net Sales as adjusted(1) Net Sales as adjusted in constant currency(1) Operating Margin Operating Margin as adjusted(1) Diluted EPS Diluted EPS as adjusted(1) Diluted EPS as adjusted in constant currency(1) Return on Invested Capital(2) Cash Flow from Operations Total Stockholder Return ("TSR") TSRΒ β S&PΒ 500 Composite From time to time, we discuss various topics, including executive compensation, social impact and sustainability, and corporate governance matters, with investors and other stakeholders. Practices: Employment agreements in effect during fiscal Elements of Compensation 80% Corporate Multiplier floor in the plan design) and (ii)Β overall payouts ranging from 114.5% to 135.6% (therefore, no impact from the 50% overall payout floor in the fiscal 2022 plan design). Based on target levels for incentive compensation for fiscal We Align Executive Compensation with Our Business Strategy and Goals. We intend for our annual and long-term incentive plans to cover a portfolio of performance measures that balance growth, profitability, and stockholder return over both an annual and long-term period. We work to establish goals that support the long-term strategy of growing sales at least 1% We assess global macro-economic risks to prudently plan activities in businessΒ units that are currently over-attaining goals and to challenge businessΒ units that are lagging net sales and profit objectives. We carefully plan to drive sustained, profitable sales growth over the long-term horizon. We do this by strategically planning category and subcategory innovation and extending consumer reach by pivoting to channels (e.g., online) to help enable net sales and profit growth. these goals are also intended to help us reduce cost and waste. βElements of Compensationβ above for a chart that shows the design of the fiscal 2022 and fiscal 2023 EAIP and PSU. DECIEM. Corporate Multiplier. Diluted EPS OI Margin Percent Net Sales ROIC(2) Corporate Multiplier Net Sales John Demsey Cedric ProuvΓ© NOP Margin John Demsey Cedric ProuvΓ© Inventory ManagementΒ β Days to Sell John Demsey Cedric ProuvΓ© Inventory ManagementΒ β Days of Supply John Demsey Cedric ProuvΓ© Inventory ManagementΒ β Weighted Forecast Accuracy John Demsey Cedric ProuvΓ© ProductivityΒ β Employee Costs John Demsey Cedric ProuvΓ© ProductivityΒ β Employee Costs as % of Net Sales John Demsey Cedric ProuvΓ© Unit Strategic Objectives Calculation of EAIP Payout Percentage. As noted, the weightings of the various criteria for an executive Global Brands Results Functions Average Business Unit Strategic Objectives Division Net Sales(1) Division NOP Margin(1) Inventory Management Productivity Business Unit PayoutΒ (a) Corporate MultiplierΒ (b) Β EAIP PayoutΒ %Β (a)Β xΒ (b) Subcommittee (or the Committee for non-equity-based compensation), its outside consultant, and management take into account the level of responsibility of the particular executive officer, recent performance and expected future contributions, internal pay equity, and competitive practice. They also consider applicable employment agreements as necessary. PSUs are accompanied by dividend equivalent rights that will be payable in cash at the time of payout of the related shares, and such awards do not have any voting rights with respect to the underlying shares of ClassΒ A Common Stock. PSUs are subject to restrictions on transfer and forfeiture prior to vesting, and upon payout of such awards, shares will be withheld to satisfy statutory tax obligations. Payout of annual PSUs generally assumes continued employment and is subject to acceleration upon the occurrence of certain events as described in βPotential Payments upon Termination of Employment or Change of ControlβββββEvents of Termination under the Employment Agreements and under the Share Incentive Plan.β β For the fiscal 2020 PSUs, Net Sales (CAGR)(1) Diluted EPS (CAGR) ROIC (CAGR) Aggregate Payout Net Sales (CAGR)(1) Diluted EPS (CAGR) ROIC (CAGR)(3) set. 2025, this award will be forfeited. date assuming continued employment and subject to acceleration upon the occurrence of certain events as described in βPotential Payments upon Termination of Employment or Change of ControlβββEvents of Termination under the Employment Agreements and under the Share Incentive Plan.β Stock options do not have dividend equivalent rights or any voting rights with respect to the underlying shares of ClassΒ A Common Stock. The vesting of RSUs is subject to continued employment and subject to acceleration upon the occurrence of certain events as described in βPotential Payments upon Termination of Employment or Change of ControlβββEvents of Termination under the Employment Agreements and under the Share Incentive Plan.β RSUs are subject to restrictions on transfer and forfeiture prior to vesting. Upon payout, shares will be withheld to satisfy statutory tax obligations. longer term. β For fiscal 2022, Mr.Β Option grants. Fiscal Year 2017 2016 2015 Fiscal The intention of these non-annual awards is, in part, to motivate Mr.Β Fredaβs long-term stewardship of the Company and, as reflected below, the structure of these awards in fiscal 2021, fiscal 2018, and fiscal 2016 is such that there is a moderate overlap in the vesting and performance periods between awards. The shares of ClassΒ A Common Stock underlying the MarchΒ 2021 PVU and PSU Grants are not intended to be delivered to Mr.Β Freda until after the end of fiscal 2025, which reflects the Companyβs desire to further align his interests with those of our stockholders over that extended period of time. Between the time that Mr.Β Freda became CEO (JulyΒ 2009) and the end of fiscal 2022 (JuneΒ 30, 2022), (i)Β the Company achieved TSR of 1,702% (the TSR of the S&P 500 Index was 433%); and (ii)Β our market capitalization increased $85Β billion, from $6Β billion to $91Β billion. As referenced below, βPerformance Periodβ is the period of time over which the attainment of one or more Performance Goals will be measured for the purpose of determining any payouts to Mr.Β Freda under the relevant award, and βService Periodβ is the period of time that Mr.Β Freda must be employed by the Company in order to receive any payout under the relevant award. For fiscal These grants reflect the application of an individual performance factor to the target equity opportunity approved for fiscal 2023. These grants reflect the application of an individual performance factor to the target equity opportunity approved for fiscal 2023. fiscal 2023. compensation in fiscal 2022. Our revenues approximate the 2022. the Company in fiscal 2022. β In addition, beginning in fiscal 2023, the employee healthcare coverage provided by the Company for Mr.Β Freda has been expanded to provide full coverage outside the United States, and in connection with this new coverage in fiscal 2023, Mr.Β Freda will no longer receive payment in lieu of a medical reimbursement program. obtain a limited amount of our products for free or at a discount. β In addition, certain executive officers who joined us mid-career, or who forfeited certain retirement benefits from their former employers to join us, have been provided with nonqualified supplemental pension arrangements. 2022.β β Mr.Β Freda deductible. Requirements Under these guidelines, each executive officer is required to An executive officer who commences employment with the Company or who is promoted from within the Company has until the fifth anniversary of the date of employment or effective date of promotion to comply with these guidelines. Pledging Policy Companyβs Executive Stock Ownership Guidelines). William P. Lauder Executive Chairman β Fabrizio Freda(1) President and Chief Executive Officer Tracey T. Travis(2) Executive Vice President and Chief Financial Officer John Demsey(3) Executive Group President Cedric ProuvΓ© Group PresidentΒ β International SeptemberΒ 6, 2016 (fiscal 2017) SeptemberΒ 4, 2015 (fiscal 2016) SeptemberΒ 3, 2014 (fiscal 2015) Fabrizio Freda. Under his employment agreement effective JulyΒ 1, 2011, Mr.Β Freda is an employee-at-will, and he will continue as President and Chief Executive Officer until his retirement or other termination of his employment. The agreement provides that his base salary and bonus opportunities will be set by the Compensation Committee and that his equity grants will be determined by the Subcommittee. In addition to benefits generally available to senior executives (e.g., annual perquisite reimbursement under our Executive Perquisite Plan of up to $20,000, financial counseling services up to $5,000, and participation in the Mr.Β Fredaβs employment agreement requires the Company to make certain post-termination payments and continue certain benefits during the enforced non-compete period in such agreement. Under his employment agreement effective JulyΒ 1, 2010, Mr.Β Demsey was an employee-at-will, and served as Group President until his retirement on MarchΒ 4, 2022. The agreement provided for a base salary and bonus opportunities to be set by the Compensation Committee and for equity grants as determined by the Subcommittee. In addition to the benefits generally available to our senior executives (e.g., annual perquisite reimbursement under our Executive Perquisite Plan up to $15,000, financial counseling services up to $5,000, and participation in our Executive Automobile Program with an automobile having an acquisition value ofβ$50,000), we provided annual premiums for additional executive term life insurance with a face amount of $5Β million for Mr.Β Demsey. We also provided travel expenses for his spouse/companion or domestic partner to accompany him on up to two business-related travel itineraries per fiscal year. See additional information in βCompensation Discussion and AnalysisβββRetirement of Named Executive Officers (John Demsey and Cedric ProuvΓ©)β and βPotential Payments Upon Termination of Employment or Change of ControlβββRetirement of John Demsey.β certain circumstances, for twoΒ years following termination of employment, (c)Β provides that the executive must abide by restrictive covenants regarding non-disclosure of our confidential information, (d)Β provides that the executive may elect to defer all or part of his or her annual incentive bonus compensation in compliance with SectionΒ 409A of the Internal Revenue Code (βSectionΒ 409Aβ), and (e)Β provides that benefits under the agreement may be modified by the Compensation Committee at any time other than in contemplation of a 2022 2022 William P. Lauder β β β β β Fabrizio Freda Tracey T. β Travis β β β β John Demsey Cedric β ProuvΓ© β β 2022 William P. Lauder Fabrizio Freda Tracey T. Travis John Demsey Cedric ProuvΓ© Restoration Plan is payable in accordance with the terms of the plan, and as applicable, in compliance with SectionΒ 409A. Set forth in the table below William P. Lauder RGA Plan Restoration Plan Fabrizio Freda RGA Plan β Restoration Plan β Employment Agreement Tracey T. Travis RGA Plan Restoration Plan John Demsey RGA Plan β Restoration Plan Cedric ProuvΓ© RGA Plan Restoration Plan Nonqualified Deferred Compensation in Fiscal 2022 William P. Lauder Fabrizio Freda Tracey T. Travis John Demsey Cedric ProuvΓ© Also, Mr.Β Freda is not eligible for such payment as explained in βCompensation Discussion and AnalysisβββOther Benefits and PerquisitesβββBenefits.β Additionally, upon retirement, the NEOs, except for Mr.Β Freda and Ms.Β Travis, are entitled to life-time annual supplemental payments in connection with healthcare benefits. (i) the one-year anniversary of the date of death or termination by reason of disability and (ii)Β JuneΒ 30, 2024, and the delivery of shares, if any, would be made shortly thereafter. As reflected in βCompensation Discussion and AnalysisβββAdditional (non-annual) Performance-Based Long-Term Equity Grants to CEO in Fiscal 2016, Fiscal 2018, and Fiscal 2021βββPrice-Vested Units granted in MarchΒ 2021,β each of the three Stock Price Goals has been achieved for the non-annual MarchΒ 2021 PVU. In connection with the non-annual FebruaryΒ 2018 PSU, if Mr.Β Freda dies or becomes disabled, then for each Performance Period that has not yet concluded, he will earn and vest in a proΒ rata portion of such tranche, and the share payment would be made shortly thereafter. For annual PSU grants made in SeptemberΒ 2020 and later, such grants will be paid at target if an executiveβs death occurs prior to the end of the Award Period. If such termination occurs after the end of the Award Period, the PSU will be paid based on actual achievement. For provisions regarding termination of employment upon death with regard to the non-annual PVUs and PSUs granted to Mr.Β Freda, see βCompensation Discussion and AnalysisβββCEO Compensation.β See βCompensation Discussion and AnalysisβββCEO Compensationβ for information about the treatment of Mr.Β Fredaβs additional (non-annual) PVU and PSU grants upon termination of employment. For purposes of the employment agreements, a For information about the treatment of Mr.Β Fredaβs additional (non-annual) PVU and PSU grants upon a Change in Control, see βCompensation Discussion and AnalysisβββCEO Compensation.β abuse that materially affects performance, or conviction of, or entry of a guilty plea or no contest for, a felony. separation from service. 2022. Payments and other benefits for Mr.Β Demsey and Mr.Β ProuvΓ©, who retired on MarchΒ 4, 2022 and JuneΒ 30, 2022, respectively, are discussed above. See βPotential Payments Upon Termination of Employment or Change in ControlβββRetirement of Cedric ProuvΓ©β and βPotential Payments Upon Termination of Employment or Change in ControlβββRetirement of John Demsey.β William P. Lauder Base Salary Bonus Options PSU RSU Continued Health Care Benefits(1) Continued Participation in Pension and Retirement Plans(2) Other Benefits and Perquisites(3) Total Fabrizio Freda Base Salary Bonus Options PSU RSU Continued Health Care Benefits(1) Continued Participation in Pension and Retirement Plans(2) Other Benefits and Perquisites(3) Total Tracey T. Travis Base Salary Bonus Options PSU RSU Continued Health Care Benefits(1) Continued Participation in Pension and Retirement Plans(2) Other Benefits and Perquisites(3) Total John Demsey Base Salary Bonus Options PSU RSU Continued Health Care Benefits(1) Continued Participation in Pension and Retirement Plans(2) Other Benefits and Perquisites(3) Total Cedric ProuvΓ© Base Salary Bonus Options PSU RSU Continued Health Care Benefits(1) Continued Participation in Pension and Retirement Plans(2) Other Benefits and Perquisites(3) Total PwC. SEC. 2020. One or more representatives of PwC is expected to be present at the Annual Meeting of Stockholders, will have an opportunity to make a statement, if any such representative desires to do so, and is expected to be available to respond to appropriate questions. Audit Fees(1) Audit-Related Fees(2) Tax Fees(3) All Other Fees Total services and certain audit services, which services are subsequently reported to and approved by the β The Financial Measure Net Sales as reported Accelerated orders associated with SMI rollout Returns associated with restructuring and other activities Net Sales as adjusted Operating Margin as reported Accelerated orders associated with SMI rollout Goodwill and other intangible asset impairments Changes in fair value of contingent consideration Venezuela remeasurement charges Returns and charges associated with restructuring and other activities Operating Margin as adjusted Diluted EPS as reported Accelerated orders associated with SMI rollout Goodwill and other intangible asset impairments Changes in fair value of contingent consideration China deferred tax asset valuation allowance reversal Venezuela remeasuement charges Returns and charges associated with restructuring and other activities Diluted EPS as adjusted Return on Invested Capital, as reported Return on Invested Capital, as adjusted(2)
767 Fifth Avenue
New York, New York 10153NOTICE OF ANNUAL MEETING OF STOCKHOLDERSDate and Time:Tuesday,14, 2017 at18, 2022βlocal timePlace:βJW Marriott Essex House New YorkGrand Salon160 Central Park SouthNew York, New York 10019Items of Business:1.the fivesix ClassΒ III director nomineesII Director Nominees as directorsDirectors to serve until the 20202025 Annual Meeting of Stockholders;2.Committee'sCommitteeβs appointment of KPMGPricewaterhouseCoopers LLP as independent auditors for the 20182023 fiscal year; and3.compensation; and4.To provide an advisory vote on the frequency of the advisory vote on executive compensation.β Β Β Β β β By Order of the Board of Directors β
β
β
ββ SPENCER G. SMUL
Senior Vice President,
Deputy General Counsel and Secretaryβ
β
β
ββ New York, New York
SeptemberΒ 28, 2017
29, 2022β 20172022 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 14, 2017:18, 2022: The Company'sCompanyβs Proxy Statement for the 20172022 Annual Meeting of Stockholders and the Annual Report to Stockholderson Form 10-K for the fiscal year ended JuneΒ 30, 20172022 with certain exhibits (which constitutes the βAnnual Report to Stockholdersβ) are available atwww.proxyvote.comwww.envisionreports.com/EL..β β β β β 1 β β β β β β β 45β β β β β β β 89β β β β β β β 89β β β β β β β 89β β β β β β β 910β β β β β β β 1113β β β β β β β 1416β β β β β β β 1718β β β β β β β 1718β β Board Committeesβ β β β 1718β β β β β β β 18 β β β β β β β 1920β β β β β β β 1920β β β β β β β 1921β β β β β β β 21 β β β β β β β 23 β β β β β β β 2023β β β β β β β 2023β β β β β β β 2023β β β β β β β 2124β β β β β β β 2225β β β β β β β 2225β β β β β β β 2225β β SectionΒ 16(a) Beneficial Ownership Reporting Complianceβ β β β 2326β β β β β β β 2326β β β β β β β 2831β β β β β β β 3235β β β β β β β 40 β β β β β β β 40 β β β β β β β 5969β β β β β β β 6070β β β β β β β 6373β β β β β β β 6576β β β β β β β 6778β β β β β β β 7081β β β β β β β 7182β β β β β β β 7383β β β β β β β 7384β β β β β β β 93 β β β β β β β 8195β β β β β β β 8296β β β β β β β 8498β β ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION (ItemΒ 4)β β β β 8699β β β β β β β 8699β β β β β β β 87100β β β β β β β A-1 β β PROXY STATEMENT SUMMARY 2017 Annual Meeting of StockholdersDateΒ andΒ Time:Tuesday,Β NovemberΒ 14,Β 2017Β atΒ 10:00Β a.m.Place:JWΒ MarriottΒ EssexΒ HouseΒ NewΒ YorkGrandΒ Salon160Β CentralΒ ParkΒ SouthNewΒ York,Β NewΒ YorkΒ 10019RecordΒ Date:SeptemberΒ 15,Β 2017Items of BusinessBoardRecommendationProxyΒ StatementDisclosureβ βΒ β βΒ β βΒ β β ββ ββββ 1.Election of ClassΒ III DirectorsFOReach director nomineePage 82.Ratification of Appointment of KPMGΒ LLP as Independent AuditorsFORPage 823.Advisory Vote to Approve Executive CompensationFORPage 844.Advisory Vote on the Frequency of the Advisory Vote on Executive CompensationONE YEARPage 85Β Β Β Β Β Β Β Β The following table provides information about the ClassΒ III Director Nominees standing for election to serve until the 2020 Annual Meeting of Stockholders. Information about all the Directors can be found in this Proxy Statement beginning on page 8.NomineeCurrent PositionCommittee Membershipβ βΒ β βΒ ββ ββ ββ Charlene BarshefskySenior International Partner, WilmerHaleNominating and Board Affairs CommitteeWei Sun ChristiansonManaging Director and Co-Chief Executive Officer of Asia Pacific and Chief Executive Officer of China, Morgan StanleyNominating and Board Affairs CommitteeFabrizio FredaPresident and Chief Executive Officer, The EstΓ©e Lauder CompaniesΒ Inc.NoneJane LauderGlobal Brand President, CliniqueNoneLeonard A. LauderChairman Emeritus, The EstΓ©e Lauder CompaniesΒ Inc.NoneΒ Β Β Β Β Β Β Β As explained in the "Compensation Discussion and Analysis," we drive our annual and long-term performance through our executive compensation programs. Annual incentive pay is tied to business objectives that are specific to each individual's responsibilities and encourage collaboration across the organization. Long-term equity incentives are tied to both the Company's share price and financial goals over a period of three or more years. This combination of compensation elements is intended to support and promote strong, balanced, and sustainable corporate performance.Β Β Β Β Β Β Β Β Our fiscal 2017 results reflect our success in pivoting our business to the fastest-growing areas of prestige beauty to align with consumers' changing shopping preferences. With our leading brands, quality innovations, and the acquisitions of Too Faced and BECCA, we attracted new consumers globally. Our business accelerated in our online direct-to-consumer and retailer e-commerce sites, as well as in the travel retail and specialty-multi channels. In addition, we built momentum in key geographies, like China and Italy, aided by enhanced digital and social media communications, and we began to further improve our organizational efficiency and effectiveness through our Leading Beauty Forward initiative. Importantly, we delivered this performance in the face of external global volatility.Fiscal 2017 Change over
Prior Year3-Year
Compound Annual
Growth Rate
(or Basis Point
Improvement)5-Year
Compound Annual
Growth Rate
(or Basis Point
Improvement)β βΒ β βΒ β βΒ β βΒ β β β β β β β β β β Β $11.8Β billion Β 5% Β 2.5% Β 4.0% Β $11.8Β billion Β 5% Β 3.1% Β 4.0% Β $12.0Β billion Β 7% Β N/A Β N/A Β 14.3% Β β Β β240bp Β +80bp Β 15.9% Β +30bp Β β20bp Β +170bp Β $3.35 Β 13% Β 3.1% Β 9.2% Β $3.47 Β 8% Β 5.6% Β 8.9% Β $3.59 Β 11% Β N/A Β N/A Β 18.9% Β β350bp Β β590bp Β β510bp Β $1.8Β billion Β 1% Β 5.5% Β 9.8% Β 7.1% Β β Β 10.4% Β 13.7% Β 17.9% Β β Β 9.6% Β 14.6% (1)All periods have been adjusted to exclude returns and charges associated with restructuring and other activities. Fiscal 2017 has also been adjusted to exclude goodwill and other intangible asset impairments and, for Diluted EPS as adjusted, to exclude the China deferred tax asset valuation allowance reversal. Fiscal 2017 and fiscal 2016 have also been adjusted to exclude the impact of changes in the fair value of contingent consideration. Fiscal 2014 has also been adjusted for a charge to remeasure net monetary assets in Venezuela and for the impact of the accelerated orders associated with the Company's July 2014 implementation of its Strategic Modernization Initiative. Fiscal 2017 Net Sales as adjusted in constant currency excludes the $187Β million negative impact of foreign currency translation. Fiscal 2017 Diluted EPS as adjusted in constant currency excludes the $0.12 impact of foreign currency translation. See AppendixΒ A for reconciliation and other information about these non-GAAP financial measures.(2)Excludes returns and charges associated with restructuring and other activities and the impact of changes in the fair value of contingent consideration in each period, where applicable. Fiscal 2017 also excludes goodwill and other intangible asset impairments. The lower ROIC in fiscal 2017 as compared with prior periods was primarily attributable to the impact of our fiscal 2017acquisitions, higher levels of reported cash and short- and long-term investments from earnings generated by our international operations, and the unfavorable impact of foreign currencies. See AppendixΒ A for information about this non-GAAP financial measure.Β Β Β Β Β Β Β Β In fiscal 2017, we increased the common stock dividend 13%, repurchased 4.7Β million shares for $413Β million, and used $504Β million of cash flow from operations for capital expenditures. Over the five-year period ended JuneΒ 30, 2017, the total market value of the Company increased by 68% or approximately $14.3Β billion. Executive Compensation HighlightsΒ Β Β Β Β Β Β Β The following summarizes key executive compensation decisions that affected compensation in, or relating to, fiscal 2017:β’The Compensation Committee authorized increases in annual compensation for fiscal 2017 for the President and Chief Executive Officer and certain other Named Executive Officers ("NEOs") in recognition of strong and sustained individual and Company performance. On average, fiscal 2017 annual target compensation for the NEOs increased less than 5%.β’The annual stock-based compensation awarded to our NEOs in fiscal 2017 was based on target grant levels and an assessment of each officer's performance and expected future contributions. The current equity mix is weighted equally among performance share units ("PSUs"), stock options, and restricted stock units ("RSUs").β’The base salary for Fabrizio Freda, our President and Chief Executive Officer, remained at $1.9Β million, his bonus opportunity remained at $4.7Β million, and his equity target was increased to $8.5Β million, resulting in target total annual compensation of $15.1Β million for fiscal 2017, an increase of 4% from fiscal 2016. No additional equity grants were made to Mr.Β Freda in fiscal 2017, which accounts for the significant year-over-year declines shown for "Stock Awards" and "Total" in the "Summary Compensation Table."β’In August 2017, the Stock Plan Subcommittee approved the payout for the third (final) tranche of the PSU granted to Mr.Β Freda in September 2012 that was based on Total Stockholder Return ("TSR"). Target payout was set at the 60thΒ percentile, a rigorous objective. The Company's TSR during the performance period relative to that of the S&PΒ 500 Companies was at the 46thΒ percentile. Accordingly, Mr.Β Freda received 30,267 shares under this incentive award.β’Based on the Company's performance over the three-year period ended JuneΒ 30, 2017, the PSUs granted to our executive officers in September 2014 resulted in an aggregate payout of 81.3% of target.β’Our NEOs achieved fiscal 2017 payout percentages under the Executive Annual Incentive Plan ranging from 110% to 131% out of a possible maximum of 150% of target bonus opportunities.Β Β Β Β Β Β Β Β For more complete information about our executive compensation philosophy and approach, please see additional information below in "Executive Compensation" including "Compensation Discussion and Analysis."THE ESTΓE LAUDER COMPANIESΒ INC.767 Fifth AvenueNew York, New York 10153PROXY STATEMENTFOR ANNUAL MEETING OF STOCKHOLDERSTO BE HELD NOVEMBER 14, 2017SeptemberΒ 28, 2017Annual Meeting and votingΒ Β Β Β Β Β Β Β This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of The EstΓ©e Lauder CompaniesΒ Inc. (the "Company," "we," or "us"), a Delaware corporation, to be voted at the Annual Meeting of Stockholders to be held in the Grand Salon at the JW Marriott Essex House New York, 160 Central Park South, New York, New York, 10019 on Tuesday, NovemberΒ 14, 2017, at 10:00Β a.m., local time, and at any adjournment or postponement of the meeting. The approximate date on which this Proxy Statement and form of proxy are first being provided to stockholders, or being made available through the Internet for those stockholders receiving their proxy materials electronically, is SeptemberΒ 28, 2017.Admission29, 2022.β Date and Time: β β Friday, NovemberΒ 18, 2022 10:00Β a.m., Eastern Time β β Place: β β β β Record Date: β β SeptemberΒ 19, 2022 β β β β ITEMS OF BUSINESS β β
RECOMMENDATIONβ β
STATEMENT DISCLOSUREβ β β β Election of ClassΒ II Directors β β β β β Β Β Β β β β β Β Β Β β β β Β Β Β β β β Β Β Β β β β β β Ratification of Appointment of PricewaterhouseCoopers LLP as Independent Auditors β β β β β Β Β Β β β β β Β Β Β β β β Β Β Β β β β Β Β Β β β β β β Advisory Vote to Approve Executive Compensation β β β β β Β Β Β β β β β Β Β Β β β β Β Β Β β β β β meeting will require a ticket.Β Β Β Β Β Β Β Β If you are a stockholder2025 Annual Meeting of recordStockholders, reflecting committee assignments as of the Record Date. Additional information about all the Directors can be found in this Proxy Statement. See βElection of Directors.ββ β Nominee β β Current Position β β Committee Membership β β β β Ronald S. Lauder β β Chairman of Clinique Laboratories LLC β β None β β β β William P. Lauder β β Executive Chairman of The EstΓ©e Lauder Companies Inc. β β Nominating and ESG Committee β β β β Richard D. Parsons β β Senior Advisor to Providence Equity Partners LLC; and Co-founder and Partner of Imagination Capital LLC β β Compensation Committee; and Nominating and ESG Committee β β β β Lynn Forester de Rothschild β β Co-founding partner of Inclusive Capital Partners; and Chair ofΒ E.L. Rothschild LLC β β Nominating and ESG Committee β β β β Jennifer Tejada β β Chief Executive Officer and Chair of the Board, PagerDuty, Inc. β β Audit Committee β β β β Richard F. Zannino β β Managing Director, CCMP Capital Advisors LLC β β Audit Committee (Chair); and Compensation Committee and Stock PlanΒ Subcommittee β β β β β β β β β β β β CEO Annual Compensation
for Fiscal 2022β β β β β β β Payout of Second Tranche of SeptemberΒ 2015 PSU
granted to CEOβ β β β β β β Certification of Performance
Goal for Second (final) Tranche
of FebruaryΒ 2018 PSU
granted to CEOβ β β β β β β NEO Annual Stock-Based Compensation for Fiscal 2022 β β β β β β β Payout of PSUs granted to
NEOs in Fiscal 2020β β β β β β β EAIP Payout for NEOs
for Fiscal 2022β β β β β β β β β
767 Fifth Avenue
New York, New York 10153
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 18, 2022plan to attend, please checkVotingappropriate boxsolicitation of proxies on behalf of the proxy card, or so indicate when you vote by telephone or Internet, and an admission ticket will be mailed to you. Please bring photo identification, as well as your admission ticket, if you attend the meeting. If you are a stockholder whose shares are held through an intermediary, such as a bank or broker, and you plan to attend, please request an admission ticket by writing to the Investor Relations Department atBoard of Directors of The EstΓ©e Lauder Companies Inc. (the βCompany,β βwe,β or βusβ), 767 Fifth Avenue, New York, New York 10153. Evidencea Delaware corporation, to be voted at the Annual Meeting of your ownershipStockholders to be held in a virtual-only meeting format via live webcast on Friday, NovemberΒ 18, 2022, at 10:00Β a.m., Eastern Time, and at any adjournment or postponement of sharesthe meeting.ourClassΒ A Common Stock holding shares at the close of business on SeptemberΒ 15, 201719, 2022 (the "Record Date"βRecord Dateβ), which you may attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/EL2022 and logging in with the 16-digit control number found on your proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials (the βNoticeβ), as applicable. If you do not have your 16-digit control number or are not a stockholder, you will be able to register as a guest to view the live webcast by visiting the website referenced in this paragraph; however, you will not be able to vote or submit questions during the meeting. You may log into www.virtualshareholdermeeting.com/EL2022 beginning at 9:45Β a.m., Eastern Time, on NovemberΒ 18, 2022. The Annual Meeting will begin promptly at 10:00Β a.m., Eastern Time.obtain fromI ask a question during the Annual Meeting?bank, broker, or other intermediary, must accompany your letter.AugustΒ 31, 2017,the Record Date, there were 225,115,277231,546,267 shares of ClassΒ A Common Stock and 143,419,528125,542,029 shares of ClassΒ B Common Stock issued and outstanding."SEC"βSECβ), we have elected to furnish to our stockholders this Proxy Statement and our Fiscal 2017 Annual Report to Stockholders by providing access to these documents on the Internet rather than mailing printed copies. Accordingly, athe Notice of Internet Availability of Proxy Materials (the "Notice") is being mailed to our stockholders of record and beneficial owners (otherβ β β β Company'sCompanyβs transfer agent, Computershare, Inc., or you have a physical stock certificate), you can vote your shares in one of twothe following ways: either by proxy or in person at(i)Β prior to the Annual Meeting. Ifmeeting, you choose to vote by proxy, you may do so by usingcan use the Internet via www.proxyvote.com and follow the instructions; (ii)Β if you received a proxy card, you can return the proxy card via mail in the postage paid envelope provided for that purpose; (iii)Β by telephone; or (iv)Β by following the telephone, orinstructions provided on the Notice, and by requesting a printed copy of our proxy materials and completing and returning by mail the proxy card you receive in response to your request.14, 2017.18, 2022. If you submit a proxy without giving instructions, your shares will be voted as recommended by the Board of Directors."street name"?"street name"βstreet nameβ), you are invited to attendon the Annual Meeting. However, since you are not a stockholderday of record, you may not vote these shares in person at the Annual Meeting, unless you bring with you a legalmay go to www.virtualshareholdermeeting.com/EL2022, and log in by entering the 16-digit control number found on your proxy from the stockholder of record. A legal proxy may be obtained from your broker, bank,card, voting instruction form, or nominee.wishhave your control number, you will be able register as a guest; however, you will not be able to vote in person or submit questions during the meeting.KPMGPricewaterhouseCoopers LLP (ItemΒ 2)."street name"βstreet nameβ holders:You must instruct your broker if you want your shares to be counted in the election of directors at the Annual Meeting (ItemΒ 1), and the advisory vote to approve executive compensation (ItemΒ 3), and the advisory vote on the frequency of the advisory vote on executive compensation (ItemΒ 4). New York Stock Exchange ("NYSE"(βNYSEβ) rules prevent your broker from voting your shares on these matters without your instructions. Please follow the instructions provided by your broker so that your vote can be counted. or by voting in person at the Annual Meeting.. The mailing address of our principal executive offices is 767 Fifth Avenue, New York, New York 10153.β β β β Β Β Β Β Β Β Β Β The following table notes for each proposal: (i)Β the vote required of ClassΒ A Common Stock and ClassΒ B Common Stock (voting together) for approval; (ii)Β whether abstentions count as votes cast; and (iii)Β whether broker discretionary voting is allowed.β β Proposal β β ProposalVote required for approval
(ClassΒ A and ClassΒ B
Common Stock, voting together)
ββ Do abstentions
count asas votes cast?
ββ Is broker
discretionary
voting allowed?β β β β β βΒ β βΒ β β ββ ββ ββ
Election of ClassΒ IIIII
Directors
ββ Plurality of Votes Cast* β β Not Applicable β β No β β β ItemΒ 2:
Ratify approvalappointment of PricewaterhouseCoopers LLPKPMGΒ LLP's appointmentas independent auditorsβ β Majority of Votes Cast β β No β β Yes β β β ItemΒ 3:
Advisory vote to approveapprove Executive Compensation
ββ Majority of Votes Cast** β β No β NoItemΒ 4:Advisory vote on the frequency ofthe advisory vote on ExecutiveCompensationMajority of Votes Cast***β No β Noβnominee'snomineeβs achievement of a plurality.Company'sCompanyβs executive compensation program, value the opinions expressed by stockholders. See "CompensationβCompensation Discussion and AnalysisβββAdvisory Vote on Executive Compensation."***The advisory vote on the frequency of the advisory vote on executive compensation (ItemΒ 4) is not binding on the Company. If none of the choices on the frequency vote receives a majority of the votes cast, the choice that receives the most number of votes will be considered to be the result of this advisory vote.KPMGPricewaterhouseCoopers LLP (ItemΒ 2) and the advisory vote to approve executive compensation (ItemΒ 3), stockholders may vote in favor of the proposal, may vote against the proposal, or may abstain from voting. For the advisory vote on the frequency of the advisory vote on executive compensation (ItemΒ 4), stockholders may vote for one year, two years, three years, or may abstain from voting. Stockholders should specify their choices on the proxy card or pursuant to the instructions thereon for telephone or Internet voting. If no specific choices are indicated, the shares represented by a properly submitted proxy will be voted:2.KPMGPricewaterhouseCoopers LLP as independent auditors; andβ β β β compensation; and4.FOR ONE YEAR on the frequency of the advisory vote on executive compensation.Computershare,Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspectors of election.Β Β Β Β Β Β Β Β Aas ofentitled to vote at the close of business on the Record Datemeeting will be available for examination by any stockholder, for any purpose germane to the Annual Meeting. This list will be available during such meeting and during normal business hours from OctoberΒ 31, 2017 through NovemberΒ 13, 2017,Meeting, by appointment, at the office of Spencer G. Smul, Senior Vice President, Deputy General Counsel and Secretary of the Company, at 767 Fifth Avenue, New York, New York 10153.and FormΒ 10-Kto Stockholders on the Internet?Fiscal 2017 Annual Report to Stockholders are available atwww.envisionreports.com/EL.Β Β Β Β Β Β Β Β These proxy materials are also available, along with theour Annual Report on FormΒ 10-K for the fiscal year ended JuneΒ 30, 2017,2022 with certain exhibits (which constitutes the βAnnual Report to Stockholdersβ) are available for stockholders at www.proxyvote.com."Investors"βInvestorsβ section of our website atwww.elcompanies.comwww.elcompanies.com. Instead of receiving future copies of our Proxy Statement (including Notice of Annual Meeting) and Annual Report to Stockholders by mail, stockholders can access these materials online. Opting to receive your proxy materials online will save us the cost of producing and mailing documents to you; you will be provided with an electronic link to the proxy voting site.site will be provided to you. Stockholders of record can enroll atwww.proxyvote.comwww.computershare.com/investor for online access to future proxy materials.β β β β Β Β Β Β Β Β Β Β Currently,fifteen directors.17Β directors, including Arturo NuΓ±ez, who was elected as a ClassΒ I director effective AprilΒ 25, 2022, and Angela Wei Dong, who was elected as a ClassΒ III director effective JulyΒ 11, 2022. The directors are divided into three classes, each serving for a period of threeΒ years.20172022 Annual Meeting of Stockholders are Charlene Barshefsky, Wei Sun Christianson, Fabrizio Freda, JaneRonald S. Lauder, William P. Lauder, RichardΒ D. Parsons, Lynn Forester de Rothschild, Jennifer Tejada, and LeonardΒ A. Lauder, eachRichard F. Zannino. Each of whomthese directors has been nominated to stand for re-election as a ClassΒ II director at the 20172022 Annual Meeting, to hold office until the 20202025 Annual Meeting and until his or her successor is elected and qualified. In the unanticipated event that one or more of thesethe nominees is unable or declines to serve for any reason, the Board may reduce the number of directors or take action to fill any vacancy.
Director Qualifications. Our Board is comprised of individuals with diverse and complementary business experience, leadership experience, and financial expertise.experience. Many of our directors have leadership experience at major domestic and multinational companies, as well as experience on the boards of other companies and organizations, which provideprovides an understanding of different business processes, challenges, and strategies. Other directors have government, legal, public policy, or media experience that provides insight into issues faced by public companies. The members of the Board are inquisitive and collaborative, challenging yet supportive, and demonstrate maturity and sound judgment in performing their duties.Β Β Β Β Β Β Β Β In addition to their own attributes, skills, and experience, and their significant personal investments in the Company, Lauder Family Members (including related entities) who control the Company have agreed to vote their shares in favor of four individuals as directorsΒ β Jane Lauder, LeonardΒ A. Lauder, RonaldΒ S. Lauder and WilliamΒ P. Lauder. The term "Lauder Family Members" is defined below (see "Certain Relationships and Related TransactionsΒ β Lauder Family Relationships and Compensation").Company'sCompanyβs long-term strategy, monitor progress, and oversee management.group'sgroupβs diversity of experience, represent stockholder interests through the exercise of sound judgment. Such diversity of experience may be enhanced by a mix of different professional and personal backgrounds and experiences. The Company is proud to have a board that is highly diverse Board, including with respect to gender and race.β ![[MISSING IMAGE: tm2029162d38-icon_checkcpn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2029162d38-icon_checkcpn.jpg){kind=icon}
β β The Board recommends a vote FOR each nominee as a director to hold office until the 2020 Annual Meeting. Proxies received by the Board will be so voted unless a contrary choice is specified in the proxy.β βRonald S. Lauderβ β 
FABRIZIO FREDADirectorΒ sinceΒ 2009AgeΒ 60Mr.Β Freda has served as President and Chief Executive Officer of the Company since JulyΒ 2009. From MarchΒ 2008 through JuneΒ 2009, he was President and Chief Operating Officer where he oversaw the Clinique, Bobbi Brown, La Mer, Jo Malone London, Aveda, and Bumble and bumble brands, and the Aramis and Designer Fragrances division. He also was responsible for the Company's International Division, as well as Global Operations, Research and Development, Packaging, Quality Assurance, Merchandise Design, Corporate Store Design, and Retail Store Operations. Prior to joining the Company, Mr.Β Freda served in a number of positions of increasing responsibility at The ProcterΒ & Gamble Company ("P&G"), where he was responsible for various operating, marketing, and key strategic efforts for over 20Β years. FromΒ 2001 throughΒ 2007, Mr.Β Freda was President, Global Snacks, at P&G. He also spent more than a decade in the Health and Beauty Care division at P&G. FromΒ 1986 toΒ 1988, Mr.Β Freda directed marketing and strategic planning for GucciΒ SpA. He is currently a member of the Board of Directors of BlackRock,Β Inc., a global asset management company.Qualifications:β’Global management, marketing, and other business, consumer and luxury brand industry experience as President and Chief Executive Officer of The EstΓ©e Lauder CompaniesΒ Inc.β’Similar experience, including developing and leading global organizations, in leadership positions at P&G and Gucci SpAβ’Experience leading successful, creative organizations with innovation programs based on research and developmentβ’Board experience at BlackRock,Β Inc.β’Experience living and working in several countriesβ’Financial expertise
JANEΒ LAUDERDirectorΒ sinceΒ 2009AgeΒ 44Ms.Β Lauder has served as Global Brand President, Clinique, since AprilΒ 2014. Immediately prior to that, she was Global President, General Manager of the Origins, Ojon, and Darphin brands. From JulyΒ 2008 until JulyΒ 2010, she was Senior Vice President/General Manager of the Origins brand. Ms.Β Lauder began her career with the Company inΒ 1996 at Clinique and served in various positions throughout the Company until JulyΒ 2006, when she became Senior Vice President, Global Marketing for Clinique.Qualifications:β’Management, marketing and other industry experience through leadership roles at The EstΓ©e Lauder CompaniesΒ Inc. since joining inΒ 1996β’Significant stockholder and party to Stockholders' Agreement (solely as trustee of one or more trusts)![[MISSING IMAGE: ph_ronaldslauder-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_ronaldslauder-bw.jpg)
PAULΒ J. FRIBOURGDirectorΒ sinceΒ 2006AgeΒ 63Committees: Audit Committee, Compensation Committee, and Stock Plan SubcommitteeMr.Β Fribourg has been the Chairman and Chief Executive Officer of Continental Grain Company, an international agribusiness and investment company, since JulyΒ 1997. He joined Continental Grain Company inΒ 1976 and worked in various positions there with increasing responsibility in both the United States and Europe. Mr.Β Fribourg is on the boards of directors of Apollo Global Management,Β LLC, Loews Corporation, and Restaurant Brands InternationalΒ Inc. He also serves as a member of Rabobank's International North American Agribusiness Advisory Board, and as a board member and Executive Committee member of Castleton Commodities InternationalΒ LLC. He has been a member of the Council on Foreign Relations sinceΒ 1985.Qualifications:β’Global management, marketing, and other business experience as Chairman and Chief Executive Officer of Continental Grain Companyβ’Board experience at Apollo Global Management,Β LLC, Loews Corporation, and Restaurant Brands InternationalΒ Inc.β’Affiliation with leading business and public policy associations (Council on Foreign Relations)β’Financial expertise
MELLODY HOBSONDirectorΒ sinceΒ 2005AgeΒ 48Committee: Audit CommitteeMs.Β Hobson has been the President of Ariel Investments,Β LLC, a Chicago-based investment management firm and adviser to the mutual funds offered by the Ariel Investment Trust, sinceΒ 2000, and she is also President and Director of its governing member, Ariel Capital Management Holdings,Β Inc. In addition, she serves as President and Chairman of the Board of Trustees of the Ariel Investment Trust, a registered investment company. Ms.Β Hobson is a member of the Board of Directors of Starbucks Corporation. Additionally, within the past five years, she served as a director of DreamWorks Animation SKG,Β Inc. and Groupon,Β Inc. Ms.Β Hobson works with a variety of civic and professional institutions, including serving as Chairman of After School Matters, as a board member of the Chicago Public Education Fund, and as Emeritus Trustee of the Sundance Institute.Qualifications:β’Management and investment experience as President of Ariel Investments,Β LLCβ’Board experience at DreamWorks Animation SKG,Β Inc., Groupon,Β Inc., and Starbucks Corporationβ’Media experience as on-air regular contributor and analyst on finance, the markets, and economic trends for CBS Newsβ’Financial expertise
IRVINEΒ O.Β HOCKADAY,Β JR.DirectorΒ sinceΒ 2001AgeΒ 81Presiding DirectorCommittee: Audit Committee (Chair)Mr.Β Hockaday is the former President and Chief Executive Officer of Hallmark Cards,Β Inc. He retired in DecemberΒ 2001. Prior to joining Hallmark inΒ 1983, he was President and Chief Executive Officer of Kansas City Southern Industries,Β Inc. Mr.Β Hockaday was a member of the Hallmark Board of Directors fromΒ 1978 until JanuaryΒ 2002. He is currently a member of the Board of Directors of Aratana Therapeutics,Β Inc. Additionally, within the past five years, Mr.Β Hockaday served as a director of Crown Media Holdings,Β Inc. and Ford Motor Company.Qualifications:β’Global business experience and consumer brand industry experience as former CEO of Hallmark Cards,Β Inc.β’Board experience at numerous public companies, including Aratana Therapeutics,Β Inc., Crown Media Holdings,Β Inc., Ford Motor Company, and Sprint Nextelβ’Financial expertiseβ’Legal experience
BARRYΒ S.Β STERNLICHTDirectorΒ sinceΒ 2004AgeΒ 56Committee: Nominating and Board Affairs CommitteeMr.Β Sternlicht is Chairman and Chief Executive Officer of Starwood Capital Group, the private investment firm he formed inΒ 1991 that is focused on global real estate, hotel management, oil and gas, energy infrastructure, and securities trading. He also serves as Chairman and CEO of Starwood Property Trust,Β Inc., a commercial mortgage REIT. Mr.Β Sternlicht is a member of the Board of Directors of A.S.Β Roma, Chairman of the Board of BaccaratΒ S.A. and Co-Chairman of the Board of Colony Starwood Homes. Additionally, within the past five years, Mr.Β Sternlicht served as a director of Restoration Hardware Holdings,Β Inc., Riviera Holdings Corporation, and TRI Pointe Group,Β Inc. (formerly TRI Pointe Homes,Β Inc.). FromΒ 1995 through earlyΒ 2005, Mr.Β Sternlicht was Chairman and CEO of Starwood Hotels &Β Resorts Worldwide,Β Inc., a company he founded inΒ 1995. He currently serves as a member of the board of The Robin Hood Foundation, and he is on the board of the Dreamland FilmΒ & Performing Arts Center and the Executive Advisory Board of Americans for the Arts. Mr.Β Sternlicht is a trustee of Brown University and serves on the boards of numerous other civic organizations and charities.Qualifications:β’Global business, investment, real estate, financial, private equity, entrepreneurial, and consumer brand and luxury industry expertise at Starwood Capital Group, as Chairman of Starwood Property Trust,Β Inc., and as founder and former Chief Executive of Starwood HotelsΒ & Resorts Worldwide,Β Inc.β’Board experience at A.S.Β Roma, BaccaratΒ S.A., Colony Starwood Homes, Restoration Hardware Holdings,Β Inc., Starwood Property Trust,Β Inc., and TRI Pointe Group,Β Inc.β’Trustee of Brown Universityβ’Financial expertiseβ β β β β βRichard D. Parsonsβ β 
RICHARDΒ D.Β PARSONS![[MISSING IMAGE: ph_richarddparsons-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_richarddparsons-bw.jpg)
Age 6974
ClassΒ II (Chair) and Board AffairsESG Committeeβ β firm, sinceΒ 2009.firm. Mr. Parsons is a co-founder and partner of Imagination Capital LLC, a venture capital firm. From 1996 until 2012, he was a director of Citigroup Inc. and served as its Chairman from FebruaryΒ 2009 to AprilΒ 2012. From MayΒ 2003 until his retirement in DecemberΒ 2008, Mr.Β Parsons served as Chairman of the Board of Time Warner Inc. From MayΒ 2002 until DecemberΒ 2007, he served as Chief Executive Officer of Time Warner Inc. From JanuaryΒ 2001 until MayΒ 2002, Mr.Β Parsons was Co-Chief Operating Officer of AOL Time Warner. FromΒ 1995 until the merger with America On-LineΒ Inc., he was President of Time WarnerΒ Inc. FromΒ 1990 throughΒ 1994, he was Chairman and Chief Executive Officer of Dime Bancorp,Β Inc. Mr.Β Parsons is currently a member ofon the boards of directors of Group Nine Acquisition Corp., Lazard Ltd., and The Madison Square Garden Company. Among his numerous community activities,Sports Corp. Additionally, within the past fiveΒ years, he isserved as a director of CBS Corporation. Mr.Β Parsons currently serves as Chairman of the Apollo Theatre Foundation and the Jazz Foundation of America.Qualifications:β β The Madison Square Garden Company,Sports Corp., and Time Warner Inc.expertiseexperienceβ 
Β Β Β β β β β β β βLynn Forester de Rothschild
βLYNNΒ FORESTERΒ DEΒ ROTHSCHILDβ β ![[MISSING IMAGE: ph_lynnfderothschild-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_lynnfderothschild-bw.jpg)
Age 6368
ClassΒ IIBoard AffairsESG Committee (Chair)β β worldwide, and sheworldwide. She was the Chief Executive of E.L. Rothschild LLC from 2002 to 2016. Holdings of E.L. RothschildΒ LLC include The Economist Group (UK). Lady de Rothschild has been a director of The Economist Newspaper Limited since OctoberΒ 2002. From 2004 toΒ 2007, she was also Co-Chair of FieldFresh Pvt.Β Ltd., a 50-50 joint venture with Bharti Enterprises, established to develop the agricultural sector in India. FromΒ 1989 to 2002, she was President and Chief Executive Officer of FirstMark Holdings, Inc., which owned various telecommunications companies worldwide. Lady de Rothschild is on the Board of Directors of Nikola Corporation. She serves on the Board and Executive Committee of The Peterson Institute for International Economics. Lady de Rothschild is a trustee of the Rothschild Eranda Foundation and a board member of the International Advisory Board of Columbia University School of Law and the Alzheimer Drug Discovery Foundation.McCain Institute. She is a member of the Council on Foreign Relations (USA), Chatham House (UK), the International Advisory Council of Asia House (UK), the International Institute of Strategic Studies (UK), and the Foreign Policy Association (USA).Qualifications:β β expertiseexpertiseexperienceβ β β β β β βJennifer Tejadaβ β
β![[MISSING IMAGE: ph_jennifertejada-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_jennifertejada-bw.jpg)
Age 51
ClassΒ IIβ β β β β 
β β β β β β Β Β Β RICHARDββ β β β β βRichard F. ZANNINOZanninoββ β ![[MISSING IMAGE: ph_richardzannino-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_richardzannino-bw.jpg)
Age 5863
ClassΒ IISubcommittee
Subcommittee*β β LLC, a position he has held since JulyΒ 2009.LLC. He is a partner on the firm'sfirmβs Investment Committee and co-heads the consumer retail practice. Prior to joining CCMP Capital, Mr.Β Zannino was an independent retail and media advisor from FebruaryΒ 2008 to JuneΒ 2009. He was Chief Executive Officer and a member of the Board of Directors of Dow Jones & Company, Inc. from FebruaryΒ 2006 until his resignation in JanuaryΒ 2008, shortly after its acquisition by NewsΒ Corp.2008. Mr.Β Zannino joined Dow Jones as Executive Vice President and Chief Financial Officer in FebruaryΒ 2001 and was promoted to Chief Operating Officer in JulyΒ 2002. From 1998 to 2001, he was Executive Vice President of Liz Claiborne, Inc., where he oversaw the finance, administration, retail, fragrance, and licensing divisions. From 1993 to 1998, Mr.Β Zannino was with Saks Fifth Avenue, serving as Vice President and Treasurer, Senior Vice President, Finance and Merchandise Planning, and then Executive Vice President and Chief Financial Officer. He is a directoron the boards of directors of IAC/InterActiveCorp, and Ollie'sOllieβs Bargain Outlet Holdings, Inc. Additionally, within the past five years, Mr.Β Zannino served as a director of Francesca's Holdings Corporation., and Hillman Solutions Corp. (formerly The Hillman Companies, Inc.). He currently serves as Vice Chairman of the Board of Trustees of Pace University.Qualifications:β β Francesca'sFrancescaβs Holdings Corporation, IAC/βInterActiveCorp, and Ollie'sOllieβs Bargain Outlet Holdings, Inc.expertiseexperienceβ β β β β β β β β β β β βCharlene Barshefskyβ β β ![[MISSING IMAGE: ph_charlenebarshefsky-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_charlenebarshefsky-bw.jpg)
Age 72
ClassΒ III
Committees:β β β β β β β β β β β β βWei Sun Christiansonβ β β ![[MISSING IMAGE: ph_weisunchristianson-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_weisunchristianson-bw.jpg)
Age 66
ClassΒ IIIβ β β β β β β β β β βAngela Wei Dongβ β β ![[MISSING IMAGE: ph_angelaweidong-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_angelaweidong-bw.jpg)
Age 48
ClassΒ IIIβ β β β β β β β β β β β βFabrizio Fredaβ β β ![[MISSING IMAGE: ph_fabriziofreda-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_fabriziofreda-bw.jpg)
Age 65
ClassΒ IIIβ β β β β β β β β β βJane Lauderβ β β ![[MISSING IMAGE: ph_janelauder-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_janelauder-bw.jpg)
Age 49
ClassΒ IIIβ β β β β β β β β β β β βLeonard A. Lauderβ β β ![[MISSING IMAGE: ph_leonardalauder-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_leonardalauder-bw.jpg)
Age 89
ClassΒ IIIβ β β β β β β β β β βPaul J. Fribourgβ β β ![[MISSING IMAGE: ph_pauljfribourg-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_pauljfribourg-bw.jpg)
Age 68
ClassΒ Iβ β β β β β β β β β β β βJennifer Hymanβ β β ![[MISSING IMAGE: ph_jenniferhyman-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_jenniferhyman-bw.jpg)
Age 42
ClassΒ Iβ β β β β β β β β β βArturo NuΓ±ezβ β β ![[MISSING IMAGE: ph_arturonunez-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_arturonunez-bw.jpg)
Age 55
ClassΒ Iβ β β β β β β β β β β β βBarry S. Sternlichtβ β β ![[MISSING IMAGE: ph_barryssternlicht-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/ph_barryssternlicht-bw.jpg)
Age 61
ClassΒ Iβ β β β β β β β β Β Β Β Β Β Β Β Β Stockholders'Stockholdersβ Agreement and Lauder Family Control. All Lauder Family Members who are party to a stockholders'stockholdersβ agreement with the Company (the "Stockholders' Agreement"βStockholdersβ Agreementβ) have agreed to vote shares beneficially owned by them for Leonard A. Lauder (or for one of his sons), Ronald S. Lauder (or for one of his daughters), and one person, if any, designated by each as a director of the Company. Aerin Lauder and Jane Lauder are parties to the Stockholders'Stockholdersβ Agreement solely as trustees of certain trusts. The term "LauderβLauder Family Members"Membersβ is defined below (see "CertainβCertain Relationships and Related TransactionsβββLauder Family Relationships and Compensation"Compensationβ). Shares subject to the Stockholders'Stockholdersβ Agreement represent approximately 84%83% of the voting power of the Company as of the Record Date. The right of each of Leonard A. Lauder (or his sons) and Ronald S. Lauder (or his daughters) to designate a nominee exists only when he (including his descendants) beneficially owns (other than by reason of the Stockholders'Stockholdersβ Agreement) shares of Common Stock with at least 10% of the total voting power of the Company. Currently, William P. Lauder is the nominee of Leonard A. Lauder, and Jane Lauder is the nominee of Ronald S. Lauder. The right of each of Leonard A. Lauder (or one of his sons) and Ronald S. Lauder (or one of his daughters) to be nominated will exist so long as he (including his descendants) beneficially owns shares of Common Stock with at least 5% of the total voting power of the Company. In the event that Leonard A. Lauder ceases to be a member of the Board of Directors by reason of his death or disability, then his sons, William P. Lauder and Gary M. Lauder, will succeed to his rights to be nominated as a director and to designate one nominee. If either son is unable to serve by reason of his death or disability, the other son will have the right to designate a nominee. Similarly, Aerin Lauder and Jane Lauder, Ronald S. Lauder'sLauderβs daughters, will succeed to their father'sfatherβs rights upon his death or disability. If either daughter is unable to serve by reason of her death or disability, the other daughter will have the right to designate a nominee. In the event none of Leonard A. Lauder and his sons and RonaldΒ S. Lauder and his daughters are able to serve as directors by reason of death or disability, then the rights under the Stockholders'Stockholdersβ Agreement to be a nominee and to designate a nominee will cease. The Stockholders'Stockholdersβ Agreement contains a βsunset provision.β Under this provision, the Stockholdersβ Agreement will terminate upon the occurrence of certain specified events, including the transfer of shares of Common Stock by a party to the Stockholders'Stockholdersβ Agreement that causes all parties thereto immediately after such transaction to own beneficially in the aggregate shares having less than 10% of the total voting power of the Company.87%84% of the voting power of the Company as of the Record Date. The Company is a "controlled company"βcontrolled companyβ under the rules of the New York Stock Exchange (the "NYSE"βNYSEβ) because the Lauder family and their related entities hold more than 50% of the voting power of the outstanding voting stock. As such, the Company may avail itself of exemptions relating to the independence of the Board and certain Board committees. Despite the availability of such exemptions, the Board of Directors has determined that it will have a majority of independent directors and that both the Nominating and Board AffairsESG Committee and the Compensation Committee will have otherwise required provisions in their charters. As permitted by the NYSE rules for "controlledβcontrolled companies,"β our Board does not require that the Nominating and Board AffairsESG Committee and the Compensation Committee be comprised solely of independent directors.
Board Committees. The Board of Directors has established the following standing committeesΒ βcommittees: the Audit Committee,Committee; the Compensation Committee (which includes the Stock PlanΒ Subcommittee),; and the Nominating and Board AffairsESG Committee. Each director on these committees is an independent director except for William P. Lauder, who is a member of the Nominating and ESG Committee, and Richard D. Parsons.Parsons, who is a member of the Nominating and ESG Committee and the Compensation Committee. Each committee reports regularly to the Board and has the authority to engage its own advisors.Table From time to time, the Board considers the composition of ContentsΒ Β Β Β Β Β Β Β The membersour Board committees, and there have been a number of recent changes in our committee composition. Effective NovemberΒ 12, 2021, (i)Β Ms.Β Bravo left the Compensation Committee (and Stock PlanΒ Subcommittee), (ii)Β Mr.Β Zannino joined the Compensation Committee (and Stock PlanΒ Subcommittee), (iii)Β Mr.Β Fribourg became the Chair of the committees are set forth inCompensation Committee, and (iv)Β Ms.Β Christianson became the Chair of the Nominating and ESG Committee. Mr.Β NuΓ±ez joined the Audit Committeeβ β β β table:β β Director β β Audit
Committeeβ β Compensation
Committeeβ β
ESG
Committeeβ β β β Directorβ AuditCommitteeβ CompensationCommitteeβ Nominating andBoard AffairsCommitteeCharlene Barshefskyβ * 
β β β β β β![[MISSING IMAGE: tm2029162d38-icon_memberbw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2029162d38-icon_memberbw.jpg){kind=icon}
β Rose Marie Bravoβ βββ ββββ Wei Sun Christiansonβββ ββ ββPaul J. Fribourgβ β β β β β ββ Mellody Hobsonβ β β Wei Sun Christiansonββββ Irvine O. Hockaday, Jr.*
βββ ββ ββ William P. Lauderβ β β β β ββ Richard D. Parsonsβββ ββ ββ Lynn Forester de Rothschildβββ β β β β Barry S. Sternlicht![[MISSING IMAGE: tm2029162d38-icon_chairbw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2029162d38-icon_chairbw.jpg){kind=icon}
β β β β ββ Angela Wei Dongβ β Richard F. Zanninoβ β β β β β β β β β
ββ β β β β β β β β β β βJennifer Hyman Also member of Stock Plan Subcommitteeββ β = Chairββ β β β β β β *βWilliam P. Lauder Presiding Directorββ β = Memberββ β β β β β β Arturo NuΓ±ez β β β β β β β β β β β β Richard D. Parsons β β β β β β β β β β β Lynn Forester de Rothschild β β β β β β β β β β β β Barry S. Sternlicht β β β β β β β β β β β β Jennifer Tejada β β β β β β β β β β β β β β β β β β β β β Β Β Β ChairΒ Β Β Β Β Β Β Β Β Member"Investors"βInvestorsβ section of the Company'sCompanyβs website,www.elcompanies.comwww.elcompanies.com, under "CorporateβCorporate Governance." Stockholders may also contact Investor Relations at 767 Fifth Avenue, New York, New York 10153 or call 800-308-2334 to obtain a hard copy of these documents without charge.β
Committeeβ β β β β Company'sCompanyβs Internal Control Department;Audit department; reviews audit results; reviews and discusses the Company'sCompanyβs financial statements with management and the independent auditors; reviews and discusses with the Board the Company'sCompanyβs policies for risk assessment and management processes;risk management; and is responsible for our related person transactions policy. The committeeβs scope of oversight responsibilities includes information technology, cybersecurity, taxes, treasury, and legal matters. The committee also meets separately, at least quarterly,periodically with the Chief Financial Officer, the Chief Internal Control Officer,head of internal audit, and representatives of the independent auditors. The Board of Directors has determined that each of the committee membersΒ β Mr.Β Hockaday, β β β β Ms.Β Hobson, and Mr.Β Zannino β qualifies as an "AuditβAudit Committee Financial Expert"Expertβ in accordance with SEC rules.β
Committeeβ β β β β β *Also a member of the Stock PlanΒ Subcommittee β Company'sCompanyβs executive officers and administers the Company'sCompanyβs Executive Annual Incentive Plan. The Stock PlanΒ Subcommittee has authority over all decisions regarding awards to executive officers under the Company'sCompanyβs share incentive plans and authority to administer the Company'sCompanyβs share incentive plans under which executive officers and other employees may receive equity grants. The Company also has an Employee Equity Award Committee, the sole member of which is Mr.Β Freda. TheFreda; the purpose of this committee is to make limited grants of equity awards under the share incentive plan to employees who are not executive officers. During fiscal 2017, this committee did not make any grants.TableAs noted above, effective as of ContentsΒ Β Β Β Β Β Β Β The NominatingNovemberΒ 18, 2022, Ms.Β Tejada will join the Compensation Committee (and the Stock PlanΒ Subcommittee), and Board AffairsMr.Β Zannino will leave the Compensation Committee among other things, recommends nominees for election as members of(and the Board; considers and makes recommendations regarding Board practices and procedures; considers corporate governance issues that arise from time to time and develops appropriate recommendations for the Board regarding such matters; and reviews the compensation for service as a Board member.
Compensation Committee Interlocks and Insider Participation.Β In During fiscal 2017,2022, Ambassador Barshefsky, Ms.Β Bravo, Mr.Β Fribourg, Mr.Β Parsons, and Mr.Β Zannino served on the Compensation Committee. None of these directors is a former or current officer or employee of the Company or any of its subsidiaries. During fiscal 2017,2022, none of our executive officers served as a member of the compensation committee (or other committee performing similar functions) or as a director of any other entity of which an executive officer served on our Board or Compensation Committee. None of the directors who served on our Compensation Committee during fiscal 20172022 has any relationship requiring disclosure under this caption under SEC rules.β
ESG Committeeβ β β β β
Board and Board Committee Meetings; Annual Meeting Attendance; and Executive Sessions. Directors are expected to devote sufficient time to carrying out their duties and responsibilities effectively, and should be committed to serve on the Board for an extended period of time. In furtherance of the Board'sBoardβs role, directors are expected to attend all scheduled Board and Board committee meetings and all meetings of stockholders. In fiscal 2017,2022, the Board of Directors met six times, the Compensation Committee and the Stock Plan Subcommittee each met five times, the Audit Committee met eight times, the Compensation Committee met five times (and the Stock PlanΒ Subcommittee met five times), and the Nominating and Board AffairsESG Committee met threefour times. The total combined attendance for all Board and committee meetings in fiscal 2022 was over 90%95%. No director attended less than 75% of Board and committee meetings except for Mr.Β Parsons who attended approximately 65% of such meetings.in fiscal 2022. The non-employee directors met sixfive times in executive session in fiscal 2017, including at least one meeting at which only independent directors were present.2022. Directors are expected to attend the Annual Meeting of Stockholders. All of the directors who were on the Board attended theour Annual Meeting of Stockholders in NovemberΒ 2016, except one director who2021, which was unable to attend.β β β β Our President and Chief Executive Officer is also a member of our Board of Directors. We alsoIn addition, we have an independent director who serves as our Presiding Director. A majority of our directors are independent. At present, there are 15the directors on our Board; 10Board are independent. As of our Record Date, there are 17 directors areon our Board, comprised of: (i)Β our President and Chief Executive Officer (βCEOβ); (ii)Β 12 non-employee directors 9(11 of whom are independent); and (iii)Β 4 directors are independent, and 4 directorswho are members of the Lauder family. Mr.Β Hockaday, the currentfamily, including our Executive Chairman. The Presiding Director presides at all meetings or executive sessions of non-employee or independent directors. The Board of Directors considers this structure appropriate in view of the Lauder family'sfamilyβs significant investment in the Company. The structure also comports with the Stockholders'Stockholdersβ Agreement among various members of the Lauder family and the Company. See "AdditionalβAdditional Information Regarding the Board of DirectorsβββStockholders'Stockholdersβ Agreement and Lauder Family Control."President and Chief Executive OfficerCEO to set overall vision, strategy, financial objectives, and investment priorities for the business. Mr.Β W. Lauder also continues to provideprovides high-level leadership in areas that are important to the Company, including marketing, trade relations, global communications, social impact and sustainability, and regulatory affairs.we have an independent director who serves as our Presiding Director. The Presiding Director serves a one-year term beginning with the meeting of the Board immediately following the Annual Meeting of Stockholders and is selected from among the independent members of the Board. Mr.Stockholders. Irvine O. Hockaday, Jr. served as the Presiding Director for allinduring fiscal 2017, and2022 until he has beenleft the Board on NovemberΒ 12, 2021. Ambassador Barshefsky was appointed by the Board to serve as the Presiding Director for an additionala one-year term beginning after the 20172021 Annual Meeting (NovemberΒ 12, 2021), and she has served as the Presiding Director for all such executive sessions since that time. Ambassador Barshefsky has been re-appointed by the Board to serve as the Presiding Director for a one-year term beginning after the 2022 Annual Meeting.β β β β β β β β President and Chief Executive OfficerCEO and other members of senior management regarding areas of significant risk to us, including strategic, operational, financial, legal and regulatory, cybersecurity, and reputational risks. However, senior management is responsible for assessing and managing the Company'sCompanyβs various risk exposures on a day-to-day basis. In this regard, various management functions within the Company, such as Legal, Finance, Treasury, Internal Control, GlobalAudit, Information Systems,Technology, Global Supply Chain, Research & Development, and Environmental AffairsEnvironment, Health and Safety, focus on particular risks. Management has a systemic and integrated approach to overall risk management that includes the identification of risks and mitigation plans in the strategic planning process. The Board'sBoardβs role is one of oversight, assessing major risks facing the Company and reviewing options for their mitigation with management. In addition, the Audit Committee reviews and discusses with management our enterprise risk management processes.
Risk in Compensation Programs. The Company has a framework for evaluating incentive plan design features that may encourage or help mitigate risk, such as a mix of compensation elements, metrics, leverage, caps, and time horizons, in order to determine whether the risks arising from our compensation programs (in addition to those applicable only to executive officers) are reasonably likely to have a material adverse effect on the Company. Using this framework in fiscal 2017,2022, we concluded that our compensation programs are not reasonably likely to have a material adverse effect on the Company. The results were reviewed with senior management and the Compensation Committee.
Board Membership Criteria. The Nominating and Board AffairsESG Committee works with the Board on an annual basis to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members. The Committee has engaged a third-party firm to assist with identifying and evaluating potential director candidates. Arturo NuΓ±ez and Angela Wei Dong were each identified as a potential director candidate by such third-party firm. In accordance with the process described below, each candidate was evaluated by the Nominating and ESG Committee, and at the committeeβs recommendation, the Board elected Mr.Β NuΓ±ez to the Board effective AprilΒ 25, 2022 and Ms.Β Dong to the Board effective JulyΒ 11, 2022.today'stodayβs business environment; understanding of the Company'sCompanyβs business on a technical level; and educational and professional background. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best support the success of the business and, based on its diversity of experience, represent stockholder interests through the exercise of sound judgment. In determining whether to recommend a director for re-election, the Nominating and Board AffairsESG Committee also considers the director'sdirectorβs past attendance at meetings and participation in and contributions to the activities of the Board.additional or replacement Board members,a new director candidate, the Nominating and Board AffairsESG Committee will identify one or more director candidates and evaluate each candidate under the criteria described above based on the information it receives with a recommendation or that it otherwiseβ β β β candidate'scandidateβs independence, skills, and qualifications and the criteria described above, the Committee will make recommendations regarding potential director candidates to the Board. The Committee may engage third parties to assist in the search for director candidates or to assist in gathering information regarding a candidate's background and experience. The Committee will evaluate stockholder-recommended candidates in the same manner as other candidates. Candidates may also be designated pursuant to the Stockholders'Stockholdersβ Agreement. See "AdditionalβAdditional Information Regarding the Board of DirectorsβββStockholders'Stockholdersβ Agreement and Lauder Family Control."β
Board Independence Standards for Directors. To be considered "independent"βindependentβ for purposes of membership on the Company'sCompanyβs Board of Directors, the Board must determine that a director has no material relationship with the Company, including any of its subsidiaries, other than as a director. For each director, the Board broadly considers all relevant facts and circumstances. In making its determination, the Board considers the following categories of relationships to be material, thus precluding a determination that a director is "independent:"(ii)(iii)Company'sCompanyβs internal or external auditor, (B)Β the director has an immediate family member who is a current employeepartner of such a firm, (C)Β the director has an immediate family member who is a current employee of such a firm and personally works on the Company'sCompanyβs audit, or (D)Β the director or an immediate family member of the director was within the last threeΒ years a partner or employee of such a firm and personally worked on the Company'sCompanyβs audit within that time.(iv)Company'sCompanyβs present executive officers at the same time serves or served on that company'scompanyβs compensation committee.(v)company'scompanyβs consolidated gross revenues."material"βmaterialβ relationships that would impair a director'sdirectorβs independence:(ii)company'scompanyβs consolidated gross revenues, whichever is greater."immediateβimmediate family member"memberβ includes a director'sdirectorβs spouse, parents, children, siblings, mothersmothers- and fathers-in-law, sonssons- and daughters-in-law, brothersbrothers- and sisters-in-law, and anyone (other than domestic employees) who shares such person'spersonβs home.β β β β including two of the five nominated for election, have been determined by the Board to be "independent"βindependentβ pursuant to NYSE rules and the Company'sCompanyβs Independent Director Standards described above: Charlene Barshefsky, Rose Marie Bravo, Wei Sun Christianson, Angela Wei Dong, Paul J. Fribourg, Mellody Hobson, Irvine O. Hockaday, Jr.,Jennifer Hyman, Arturo NuΓ±ez, Lynn Forester de Rothschild, Barry S. Sternlicht, Jennifer Tejada, and Richard F. Zannino. addition to the foregoing, in order to be considered "independent"βindependentβ under NYSE rules for purposes of serving on the Company'sCompanyβs Audit Committee or Compensation Committee, a director also may not accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the Company, other than as a director, and may not be an "affiliated person"βaffiliated personβ of the Company. Audit Committee members may receive directors'directorsβ fees and fixed payments for prior service with the Company. The Board has determined that each member of the Audit Committee and each independent member of the Compensation Committee meets these additional independence requirements.
Communications with the Board. A stockholder or any other interested party who wishes tomay communicate with the Board, any Committee thereof, the non-management directors as a group, or any individual director, including the Presiding Director, for the executive sessions of the Board, may do so by addressing the correspondence to that individual or group, c/o Sara E. Moss, Executive Vice President andΒ General Counsel, The EstΓ©e Lauder Companies Inc., 767 Fifth Avenue, New York, New York 10153. She,The General Counsel or hera designee will review all such correspondence and forward to determine thatthe intended recipient(s) if the substance of the correspondence relates to the duties and responsibilities of the Board or individual Board member before forwardingdirector; at the correspondencediscretion of the General Counsel or a designee, materials considered to the intended recipient. Spam, junk mail, solicitations, and hostile, threatening, illegal,be inappropriate or similarly unsuitable material willharassing, unsolicited advertisements, or promotional materials may not be forwarded to the intended recipient and, if circumstances warrant, may be forwarded to the Company's security staff. Any communication that is not forwarded may be made available to the intended recipient at his or her request.
Director Nominees Recommended by Stockholders. The Nominating and Board AffairsESG Committee will consider stockholder recommendations of nominees in the same manner as and pursuant to the same criteria by which it considers all other nominees, except for nominations received pursuant to the Stockholders'Stockholdersβ Agreement. Stockholders who wish to suggest qualified candidates should send their written recommendation to the Nominating and Board AffairsESG Committee, c/o Sara E. Moss, Executive Vice President andΒ General Counsel, The EstΓ©e Lauder Companies Inc., 767 Fifth Avenue, New York, New York 10153. The following information must accompany any such recommendation by a stockholder: (i)Β the name and address of the stockholder making the recommendation; (ii)Β the name, address, telephone number, and social security number of the proposed nominee; (iii)Β the class or series and number of shares of the Company that are beneficially owned by the stockholder making the recommendation; (iv)Β a description of all arrangements or understandings between the stockholder and the candidate, and an executed written consent of the proposed nominee to serve as a director of the Company if so elected; (v)Β a copy of the proposed nominee'snomineeβs resume and references; and (vi)Β an analysis of the candidate'scandidateβs qualifications to serve on the Board of Directors and on each of the Board'sBoardβs committees in light of the criteria for Board membership established by the Board. See "BoardβBoard Membership Criteria."β For stockholders intending to nominate an individual for election as a director directly, there are specific procedures set forth in our bylaws. See "StockholderβStockholder Proposals and Director Nominations for the 20182023 Annual Meeting"Meetingβ below.Company'sCompanyβs Corporate Governance Guidelines. The Company also has a Code of Conduct (the "Code"βCodeβ) applicable to all employees, officers, and directors of the Company including the Chief Executive Officer and the Chief Financial Officer. These documents, as well as any waiver of a provision of the Code granted to any senior officer or director or any material amendment to the Code, may be found in the "Investors"βInvestorsβ section of the Company'sCompanyβs website:www.elcompanies.comwww.elcompanies.com under "CorporateβCorporate Governance." Stockholders may also contact Investorββ β β β Relations at 767 Fifth Avenue, New York, New York 10153 or call 800-308-2334 to obtain a hard copy of these documents without charge. SectionΒ 16(a) Beneficial Ownership Reporting ComplianceΒ Β Β Β Β Β Β Β SectionΒ 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and any persons who own more than 10% of the ClassΒ A Common Stock, to file forms reporting their initial beneficial ownership of Common Stock and subsequent changes in that ownership with the SEC and the NYSE. Officers, directors, and greater-than-10% beneficial owners also are required to furnish the Company with copies of all forms they file under SectionΒ 16(a). Based solely upon a review of the copies of the forms furnished to the Company, or a written representation from a reporting person that no FormΒ 5 was required, the Company believes that during the 2017 fiscal year, all SectionΒ 16(a) filing requirements were satisfied."RelatedβRelated Person Transactions Policy"Policyβ) that sets forth procedures for the review, approval, and ratification of transactions involving "RelatedβRelated Persons."β Such persons consist of any director, director nominee, executive officer, any beneficial owner of more than 5% of the Company'sCompanyβs Common Stock, any immediate family member of such persons, and any other person deemed to be a Related Person under the rules of the SEC. Under the Related Person Transactions Policy, a "Transaction"βTransactionβ includes any financial transaction, arrangement, or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements, or relationships where the Company and a Related Person are participants. The Audit Committee is responsible for administering this policy.Person'sPersonβs relationship to the Company; (ii)Β a description of the Transaction, including the material terms, the approximate aggregate value, and the identities of other parties; (iii)Β the benefits of the Transaction to the Company and the Related Person; (iv)Β the availability of other sources of comparable products or services; and (v)Β any other relevant information. If the Audit Committee determines that the Related Person has a direct or indirect material interest in any Transaction, the Transaction shall be disclosed in the Company'sCompanyβs proxy statement. If the Related Person at issue is a director of the Company, or an immediate family member of a director, then such director shall not participate in the assessment or determination of the Transaction being reviewed.and his wife, Jo Carole Lauder, havehas two daughters, Aerin Lauder and Jane Lauder. Aerin Lauder is not an employee of the Company. SheCompany; she is the Style and Image Director for the EstΓ©e Lauder brand (see "AgreementsLauder"Lauderβ below for additional information). Jane Lauder is Global Brand President, Clinique and is a directoran employee of the Company.Β Β Β Β Β Β Β Β For fiscal 2017, the following She is Executive Vice President, Enterprise Marketing and Chief Data Officer, and she is also a member of our Board of Directors.Members received the following amounts from the Company as compensation:Members. Leonard A. Lauder received an aggregate of $1,800,000Lauderβs annual base salary for his services;fiscal 2022 was $1,800,000. Ronald S. Lauderβs annual base salary for fiscal 2022 was $650,000. In addition to his salary, Mr.Β R. Lauder also received $650,000 in salary and a bonus ofβ $415,600; and$470,850 for fiscal 2022. Jane Lauderβs annual base salary for fiscal 2022 was $930,000. In addition to her salary, Ms.Β J. Lauder also received $750,000 in salary, a bonus ofβ $733,350, performance share units$1,122,400, PSUs with a target payout of 4,4711,888 shares of ClassΒ A Common Stock, stock options for 17,8407,302 shares of ClassΒ A Common Stock with an exercise price ofβ $344.06 per share, and restricted stock unitsRSUs for 4,4711,888 shares of ClassΒ A Common Stock.Stock, in each case for fiscal 2022. Each of these Lauder Family Members is entitled to participate in standard benefit plans, such as the Company'sCompanyβs pension and medical plans. For information regarding fiscal 20172022 compensation for William P. Lauder, see "ExecutiveβExecutive Compensation."Β Β Β Β Β Β Β Β For fiscal 2018,βLauder has aLauderβs annual base salary of $1,800,000, andfor fiscal 2023 is $1,800,000. Ronald S. Lauder has aLauderβs annual base salary offor fiscal 2023 is $650,000, and bonus opportunities with a target payout of $350,000. For fiscal 2018, Jane Lauderhe has a base salary of $780,000, a target incentive bonus opportunity ofβ $640,000,$350,000. Jane Lauderβs annual base salary for fiscal 2023 is $970,000. For fiscal 2023, Ms.Β Lauder also has a target incentive bonus opportunity of $870,000 and a target equity opportunity ofβ $1,036,000.$1,775,000. In SeptemberΒ 2017, Jane2022, Ms.Β Lauder was grantedβ β β β $1.27$2.18Β million, comprised of performance share unitsPSUs with a target payout of 3,9352,957 shares of ClassΒ A Common Stock, stock options for 15,6448,997 shares of ClassΒ A Common Stock with an exercise price ofβ $246.15 per share, and restricted stock unitsRSUs for 3,9352,957 shares of ClassΒ A Common Stock, in each case for fiscal 2018.2023. The grants were consistent with those made to employees at herMs.Β Lauderβs level. For information regarding fiscal 20182023 compensation for William P. Lauder, see "CompensationβCompensation Discussion and Analysis."Lauder'sLauder. Leonard A. Lauderβs current employment agreement (the "LAL Agreement"βLAL Agreementβ) provides for his employment as Chairman Emeritus until such time as he resigns, retires, or is terminated. Mr.Β L. Lauder is entitled to participate in standard benefit plans, such as the Company'sCompanyβs pension and medical plans. He is also entitled to participate in the Amended and Restated Fiscal 2002 Share Incentive Plan, but no grants have been made to him under the plan to date. If Mr.Β L. Lauder retires, the Company will continue to provide him with the office he currently occupies (or a comparable office if the Company relocates) and a full-time executive assistant. The Company may terminate Mr.Β L. Lauder'sLauderβs employment at any time if he becomes "permanentlyβpermanently disabled,"β in which event he will be entitled to (i)Β receive his base salary for a period of twoΒ years after termination, (ii)Β receive bonus compensation during such salary continuation period at an annual rate equal to the average of the actual bonuses paid to him prior to such termination under the LAL Agreement (the "LeonardβLeonard Lauder Bonus Compensation"Compensationβ), and (iii)Β participate in the Company'sCompanyβs benefit plans for twoΒ years. In the event of Mr.Β L. Lauder'sLauderβs death during the term of his employment, for a period of one year from the date of Mr.Β L. Lauder'sLauderβs death, his beneficiary or legal representative will be entitled to receive Mr.Β L. Lauder'sLauderβs base salary and the Leonard Lauder Bonus Compensation. Mr.Β L. Lauder may terminate his employment at any time upon sixΒ months'monthsβ written notice to the Company, in which event he will be entitled to receive his base salary and the Leonard Lauder Bonus Compensation for the six-month period following termination. In addition, the Company may terminate Mr.Β L. Lauder'sLauderβs employment for any reason upon 60Β days'daysβ written notice. In the event of termination of his employment by the Company (other than for cause, disability, or death) or a termination by Mr.Β L. Lauder for good reason after a change of control, (a)Β Mr.Β L. Lauder, for a period of threeΒ years from the date of termination, will be entitled to (i)Β receive his base salary in effect at the time of termination, (ii)Β receive the Leonard Lauder Bonus Compensation, (iii)Β participate in the Company'sCompanyβs benefit plans and (b)Β in the case of termination by the Company (other than for cause, disability, or death), Mr.Β L. Lauder will not be subject to the non-competition covenant contained in the LAL Agreement. Upon termination for any reason, any options previously granted to Mr.Β L. Lauder will remain exercisable for the remainder of their respective terms, subject to certain non-competition and good conduct provisions.Table Pursuant to the LAL Agreement, Mr.Β L. Lauder has deferred certain compensation, and his deferred compensation account is credited with interest as of Contentseach JuneΒ 30 during the term of deferral, compounded annually, at an annual rate equal to the annual rate of interest announced by Citibank N.A. in New York, New York as its base rate in effect on such JuneΒ 30, but in no event more than 9%. The LAL Agreement provides the Company with the ability to select the date of payment to Mr.Β L. Lauder of the amounts he deferred prior to DecemberΒ 31, 2004 and the associated earnings thereon (the βPre-409A Balanceβ). In DecemberΒ 2021 (fiscal 2022), the Company selected JulyΒ 2022 (fiscal 2023) for the timing of the deferred compensation payout to Mr.Β L. Lauder of his entire Pre-409A Balance, and such payment was made on AugustΒ 1, 2022 (the first business day following the end of JulyΒ 2022) in the amount ofβ $5,242,452. In accordance with the LAL Agreement, the remainder balance of Mr.Β L. Lauderβs deferred compensation account is payable upon the first to occur ofβ (i)Β his death or (ii)Β the first business day following the expiration of the 6-month period after his separation from service."LauderβLauder Family Members"Membersβ includes only the following persons: (i)Β the estate of Mrs.Β EstΓ©e Lauder; (ii)Β each descendant of Mrs.Β EstΓ©e Lauder (a "Lauder Descendant"βLauder Descendantβ) and their respective estates, guardians, conservators, or committees; (iii)Β each "FamilyβFamily Controlled Entity" (asEntityβ β(as defined below); and (iv)Β the trustees, in their respective capacities as such, of each "FamilyβFamily Controlled Trust" (asTrustβ β(as defined below). The term "FamilyβFamily Controlled Entity"Entityβ means: (i)Β any not-for-profit corporation if at least 80% of its board of directors is composed of Lauder Descendants; (ii)Β any other corporation if at least 80% of the value of its outstanding equity is owned by Lauder Family Members; (iii)Β any partnership if at least 80% of theβ β β β "FamilyβFamily Controlled Trust"Trustβ includes certain trusts existing on NovemberΒ 16, 1995 and trusts the primary beneficiaries of which are Lauder Descendants, spouses of Lauder Descendants, and/or charitable organizations, provided that if the trust is a wholly charitable trust, at least 80% of the trustees of such trust consist of Lauder Descendants.
Registration Rights Agreement. Leonard A. Lauder, Ronald S. Lauder, The EstΓ©e Lauder 1994 Trust, William P. Lauder, Gary M. Lauder, Aerin Lauder, Jane Lauder, certain Family Controlled Entities and other Family Controlled Trusts, Morgan Guaranty Trust Company of New York ("(βMorgan Guaranty"Guarantyβ), and the Company are parties to a Registration Rights Agreement (the "RegistrationβRegistration Rights Agreement"Agreementβ), pursuant to which each of Leonard A. Lauder, Ronald S. Lauder, and Morgan Guaranty havehas three demand registration rights and The EstΓ©e Lauder 1994 Trust has six demand registration rights in respect of shares of ClassΒ A Common Stock (including ClassΒ A Common Stock issued upon conversion of ClassΒ B Common Stock) held by them. Three of the demand rights granted to The EstΓ©e Lauder 1994 Trust may be used only by a pledgee of The EstΓ©e Lauder 1994 Trust'sTrustβs shares of Common Stock. All the parties to the Registration Rights Agreement (other than the Company) also have an unlimited number of piggyback registration rights in respect of their shares. The rights of Morgan Guaranty and any other pledgee of The EstΓ©e Lauder 1994 Trust under the Registration Rights Agreement will be exercisable only in the event of a default under certain loan arrangements. Leonard A. Lauder and Ronald S. Lauder may assign their demand registration rights to Lauder Family Members. The Company is not required to effect more than one registration of ClassΒ A Common Stock in any consecutive twelve-month period. The piggyback registration rights allow the holders to include their shares of ClassΒ A Common Stock in any registration statement filed by the Company, subject to certain limitations.stockholders'stockholdersβ counsel) in connection with any demand registrations, as well as any registrations pursuant to the exercise of piggyback rights. The Company has agreed to indemnify the selling stockholders against certain liabilities, including liabilities arising under the Securities Act of 1933.
Stockholdersβ Agreement.Β Β Β Β Β Β Β Β Stockholders' Agreement. All Lauder Family Members who are party to the Stockholders'Stockholdersβ Agreement have agreed to vote shares beneficially owned by them for Leonard A. Lauder (or for one of his sons), Ronald S. Lauder (or for one of his daughters), and one person, if any, designated by each as a director of the Company. Aerin Lauder and Jane Lauder are parties to the Stockholders'Stockholdersβ Agreement solely as trustees of certain trusts. Shares subject to the Stockholders'Stockholdersβ Agreement represent a substantial majority of the voting power of the Company as of the Record Date. See "AdditionalβAdditional Information Regarding the Board of DirectorsβββStockholders'Stockholdersβ Agreement and Lauder Family Control."Stockholders'Stockholdersβ Agreement may, without restriction under the agreement, sell their shares in a widely distributed underwritten public offering, in sales made in compliance with RuleΒ 144 under the Securities Act of 1933, or to other Lauder Family Members. In addition, each party to theStockholders' Stockholdersβ Agreement may freely donate shares in an amount not to exceed 1% of the outstanding shares of Common Stock in any 90-day period. In the case of other private sales, each stockholder who is a party to the Stockholders'Stockholdersβ Agreement (the "Offering Stockholder"βOffering Stockholderβ) has granted to each other party (the "Offeree"βOffereeβ) a right of first offer to purchase shares of ClassΒ A Common Stock that the Offering Stockholder intends to sell to a person (or group of persons) who is not a Lauder Family Member. Each Offeree has the opportunity to purchase the Offeree'sOffereeβs proΒ rata portion of the shares to be offered by the Offering Stockholder, as well as additional shares not purchased by other Offerees. Any shares not purchased pursuant to the right of first offer may be sold at or above 95% of the price offered to the Offerees. The Stockholders'Stockholdersβ Agreement also includes provisions for bona fide pledges of shares of Common Stock and procedures related to such pledges. The Stockholders'Stockholdersβ Agreement will terminate upon the occurrence of certain specified events, including the transfer of shares of Common Stock by a party to the Stockholders'Stockholdersβ Agreement that causes all parties thereto immediately after such transaction to own beneficially in the aggregate shares having less than 10% of the total voting power of the Company.β β β β
Agreements with Aerin Lauder. Estee Lauder Inc. ("ELI"(βELIβ), a subsidiary of the Company, is party to (i)Β a creative consultant agreement with Aerin Lauder (the "CreativeβCreative Consultant Agreement"Agreementβ) and (ii)Β a brand license agreement with Ms.Β Lauder and Aerin LLC, a limited liability company wholly owned by Ms.Β Lauder (the "License Agreement"βLicense Agreementβ).is a spokespersonas the Style and Image Director for the EstΓ©e Lauder brand, acts as a creative consultant and is a spokesperson for the brand. In her role, she collaborates with the EstΓ©e Lauder Creative Director on creative aspects of the brand as Style and Image Director. The initial term of this agreement expired on JuneΒ 30, 2016,promotes the brand through personal appearances and her social media presence. In fiscal 2021, the agreementCreative Consultant Agreement was amended to extend the term tothrough JuneΒ 30, 2021.2024. For fiscal 2017,2022, Ms.Β Lauder received approximately $581,300$680,000 for her services under the agreement. For fiscal 2018, she2023, Ms.Β Lauder will receive approximately $604,500the same amount ($680,000) for such services. During the term of the Creative Consulting Agreement, theservices, plus any additional amounts per day, if applicable, as described below. The Company has the exclusive right to use Ms.Β Lauder'sLauderβs name and image to marketpromote EstΓ©e Lauder beauty products and related makeup services of the EstΓ©e Lauder brand andduring the term of the Creative Consultant Agreement. Ms.Β Lauder has agreed to no more than 25Β days of personal appearances per year forto promote the brand, the Company, or its subsidiaries, after which ELI is required to pay her an additional amount per day (for fiscal 2017, $25,000; and for fiscal 2018, $26,000)($29,000). No additional amount per day was paid in fiscal 2017. In addition, an2022. An office and access to an assistant are also provided to Ms.Β Lauder in connection with her services."Aerin"βAerinβ trademark and "A"βAβ logo (and related marks) and Ms.Β Lauder'sLauderβs name and image (i)Β exclusively in connection with "CoreβCore Beauty Products" (cosmetics,Productsβ β(cosmetics, fragrances, toiletries, skin care, hair care, value sets, and beauty accessories) and (ii)Β non-exclusively in connection with "Non-CoreβNon-Core Beauty Products" (cosmeticsProductsβ β(cosmetics bags, tote bags, and fragranced candles). The License Agreement covers the name "Aerin"βAerinβ and not the name "Lauder,"βLauder,β for which the Company and its subsidiaries retain sole ownership. The initial license term expired on JuneΒ 30, 2017, at which time the agreement automatically renewed for an additional 5-year period.period through JuneΒ 30, 2022.two additionalthe third 5-year renewal termsterm if ELI does not give notice of non-renewal and net sales hit certain performance targets (or if ELI cures a sales shortfall, in certain circumstances). In fiscal 2017, ELI provided notice that it intended to cure any sales shortfall, in accordance with the License Agreement, and ELI has since made a payment to AerinΒ LLC in the amount of approximately $163,000.Β Β Β Β Β Β Β Β Under the License Agreement, AerinΒ LLC will receive the following royalties: (i)Β for all products other than fragrances, 4% of annual net sales up to $40Β million and 5% of annual net sales in excess thereof; and (ii)Β for fragrances, 5% of annual net sales. For fiscal 2017, AerinΒ LLC was paid approximately $549,000 in royalties. Under the agreement, ELI must spend the following minimum amounts to promote Aerin-branded products: 20% of ELI's net sales of Aerin-branded products eachannual period in the initial term which ended JuneΒ 30, 2017 and 15% of such net sales each annual period (JuneΒ 30Β β JulyΒ 1) thereafter, with such requirement capped each year at 50% of AerinΒ LLC's similar expenditures, either directly or through other licensees, on Aerin-branded products. Both ELI and AerinΒ LLC will distribute Aerin-branded products only through prestige retailers. In addition, in fiscal 2017, in connection with the License Agreement, the Company received approximately $82,000 from AerinΒ LLC for AERIN products provided for sale in Aerin retail locations and on AerinΒ LLC's website.AERIN-brandedAerin-branded products in its reasonable commercial judgment. Under the License Agreement, Ms.Β Lauder has agreed to provide at least ten personal appearances under the License Agreement during each fiscal year, for which she will not be compensated, and which are in addition to those appearances covered by the Creative Consultant Agreement. ELI will be responsible for Ms.Β Lauder'sLauderβs reasonable travel expenses in connection with such appearances. Aerin LLC may terminate the License Agreement if an unaffiliated third party obtains more than 50% of the voting power or equity of ELI. ELI may terminate the License Agreement if control of Aerin LLC (or substantially all of its assets) is transferred to a competitor of ELI or to certain categories of retailers not engaged in prestige distribution. Either side may terminate the License Agreement for an uncured material breach.β β β β makeinvest in the AERIN Beauty business an additional $300,000 each year during the remaining term of the License Agreement for incremental advertising and promotion. Further, the license agreement has a provision concerning a sublicense to a third party to use certain licensed intellectual property solely in connection with amenity-size licensed products. Pursuant to that provision, the Company has agreed to pay Aerin LLC 50% of any royalty obtained from the third party. Such royalty payments totaling $500,000 to Aerin LLC were less than $10,000 in each of fiscal 2017 through and including fiscal 2021 in connection with brand-building activities for AERIN Beauty and the AERIN lifestyle brand, provided that the current AerinΒ LLC management remains in place. The Company has made such payments for fiscal 2017.
Other Arrangements. The Company has subleased certain of its office space in New York to an affiliateaffiliates of Ronald S. Lauder.Lauder and Leonard A. Lauder and receives payments from affiliates of those individuals in connection therewith. As used herein, the βRonald S. Lauder Officeβ refers to one or more affiliates of Ronald S. Lauder that are involved in these office space arrangements, and the βLeonard A. Lauder Officeβ refers to one or more affiliates of Leonard A. Lauder that are involved in these office space arrangements.2017,2022, the rent paid or accrued was approximately $752,000, which equals the Company's lease payments for that space.$971,000. The Company also has agreed to provide such affiliatethe Ronald S. Lauder Office with certain services, such as phone systems, payroll service, and office and administrative services, which are reimbursed at a rate approximating the Company's incremental cost thereof.services. For fiscal 2017, such affiliate paid2022, the Company received approximately $14.5$13.64Β million pursuant to such agreement. The payments received by the Company from the Ronald S. Lauder Office approximated the Companyβs incremental cost of the relevant space and services. At JuneΒ 30, 2017, such affiliate2022, the Ronald S. Lauder Office had deposited with the Company approximately $1.7$1.15Β million to cover expenses.2017, that affiliate and/or family member(s) paid2022, the Company received payments of approximately $7.3$8.4Β million from such affiliate and certain charitable organizations for office space and certain services, such as phone systems, payroll service, and office and administrative services. At JuneΒ 30, 2017, that affiliate and family members had deposited withThe payments received by the Company approximately $418,000 to cover expenses. The payments byfrom the affiliates and family membersLeonard A. Lauder Office approximated the Company'sCompanyβs incremental cost of the relevant space and services.Company'sCompanyβs offices. The Company pays no fee to the owners for displaying such works. Theworks, and the owners of the works pay for their maintenance. In fiscal 2017,2022, the Company paid premiums of less than $10,000 for insurance relating to such works.β β β β
Annual Cash Retainer for Board Service.Β For fiscal 2017, each Each non-employee director receivedreceives an annual cash retainer ofβ $75,000, paid quarterly in advance, which was subject to deferral, as explained below. Effective November 2017, this annual cash retainer will be increased to $100,000, payable quarterly, in advance; such retainer may be deferred, as explained below.Β Β Β Β Β Β Β Β Annual Cash Retainer for Presiding Director.Β Effective November 2017, the Presiding Director will receive an additional annual cash retainer of $30,000, payable annually in advance, which may be deferred as explained below.
Annual Cash Retainer for Committee Service. Each non-employee director who serves on a committee receives an additional annual cash retainer payable quarterly in advance, in the following amounts: $12,000 per year for service on the Audit Committee, $8,000 per year for service on the Compensation Committee (including service on the Stock PlanΒ Subcommittee), and $8,000 per year for service on the Nominating and Board AffairsESG Committee. The Chair of the Audit Committee receives a further annual cash retainer ofββ$25,000. The Chairs of the Compensation Committee and the Nominating and Board AffairsESG Committee receive a further annual cash retainer ofβ $15,000 each. These cashCash retainers for committee service are paid quarterly and may be deferred, as explained below.
Deferral of Annual Cash Retainers. Non-employee directors may elect to defer receipt of all or part of their cash-based compensation. Specifically, pursuant to Deferred Compensation Agreements, they may defer any or all of the above-referenced annual cash retainers into either (i)Β stockΒ units (accompanied by dividend equivalent rights) or (ii)Β an interest-bearing cash account, in each case to be paid out in a lump sum in cash as of the first business day of the calendar year following the date on which the director ceases to be a member of the Board.Β Β Β Β Β Β Β Β Initial Stock Grant.Β On the date of the first annual meeting of stockholders that is more than six months after a non-employee director's initial election to the Board, the director receives a grant of shares of ClassΒ A Common Stock (plus a cash payment in an amount to cover related income taxes), pursuant to the Amended and Restated Non-Employee Director Share Incentive Plan (the "Director Share Plan"). Effective November 2017, the amount of this initial stock grant will be decreased from 4,000 to 2,000 shares of ClassΒ A Common Stock.
Annual Stock Units Retainer for Board Service.Β An In addition to the cash retainers described above, an additional $75,000 is payable to each non-employee director by a grant of stockΒ units (accompanied by dividend equivalent rights) as an annual stock retainer, pursuant to the Amended and Restated Non-Employee Director Share Plan.Incentive Plan (the βDirector Share Planβ). This grant is made on the date of each annual meeting of stockholders. The number of stockΒ units to be awarded is determined by dividing $75,000 by the average closing price of the ClassΒ A Common Stock on the twenty trading days preceding the date of grant. Each stock unit is convertible into one share of ClassΒ A Common Stock, and the ClassΒ A Common Stock represented by the stockΒ units is distributed to the director on or after the first business day of the calendar year following the date on which the director ceases to be a member of the Board.
Annual Stock Options. In addition to the cash and stock portion of the retainer, each non-employee director receives an annual grant of options valued at no more than $100,000 on the date of grant, pursuant to the Director Share Plan. This grant is made on the date of each annual meeting of stockholders. The exercise price of the options is equal to the closing price of the ClassΒ A Common Stock on the date of grant. The options are exercisable beginning one year after the date of grant, provided that the director continues to serve as of such date. The options generally terminate tenΒ years after the date of grant.β β β β Table of Contents
Stock Ownership Requirement. As set forth in the Company'sCompanyβs Corporate Governance Guidelines, the Board believes that in order to align the interests of directors and stockholders, directors should have a significant financial stake in the Company. Specifically, each director should own shares of the Company'sCompanyβs Common Stock with a value equal to or greater than fourfive times the annual cash retainer for Board service. A director is required to comply with these guidelinesservice, no later than threefiveΒ years after his or her initial election to the Board. Applying this guideline, for fiscal 2017, each director wasis required to own shares of the Company'sCompanyβs Common Stock with a value equal to or greater than $300,000$500,000 (i.e. $75,000$100,000 Γ 4)5). AsMr.Β NuΓ±ez, who joined our Board in AprilΒ 2022, and Ms.Β Dong, who joined in JulyΒ 2022, have fiveΒ years to meet this ownership requirement. Otherwise, as of JuneΒ 30, 2022, each of our directors owned shares of the endCompanyβs Common Stock with a value in excess ofβ fiscal 2017, each$500,000.β β What Counts* β β What Does Not Count β β β β ![[MISSING IMAGE: tm2029162d38-icon_checkbw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2029162d38-icon_checkbw.jpg){kind=icon}
β β Common Stock β β ![[MISSING IMAGE: tm2029162d38-icon_xbw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2029162d38-icon_xbw.jpg){kind=icon}
β β Stock Options (vested or unvested) β β β β β β Stock Units (share payout) β β β β β β β β β β β β Stock Units (cash payout) β β β β β β β β wasor the directorβs immediate family or held in compliance with thisentities controlled by the director or the directorβs immediate family members (including trusts for the benefit of the director or immediate family members). However, any shares of Common Stock that are hedged or pledged do not count for purposes of these stock ownership requirement.
Company Products. The Company provides directors with certain Company products from different brands and product categories. The Company believes that providing these products serves a business purpose by expanding the directors'directorsβ knowledge of the Company'sCompanyβs business. The Company also provides each non-employee director with the opportunity to purchase up to $1,280 worth of the Company'sCompanyβs products each calendar year (based on suggested retail prices) at no charge; if a director chooses to take advantage of this opportunity and purchasepurchases more than $640 worth of the Company'sCompanyβs products, the excess is imputed as taxable income to the director. For the year ended JuneΒ 30, 2017,2022, the aggregate incremental cost to the Company for products provided to the directors was substantially less than $10,000 per director. Non-employee directors may also purchase Company products at a price equal to 50% off the suggested retail price, which iswith the same discount made available to officers and other employees of the Company.
Reimbursement of Expenses. Non-employee directors are reimbursed for their reasonable expenses (including costs of travel, food, and lodging) incurred in attending Board, committee, and stockholder meetings. Directors are also reimbursed for any other reasonable expenses relating to their service on the Board, including participating in director continuing education and Company site visits.β β β β β β Name β β
Earned or
Paid in
Cash
($)(1)(2)β β
Awards
($)(3)(4)β β
Awards
($)(5)(6)β β
Incentive Plan
Compensation
($)β β
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(7)β β
Compensation
($)β β
($)β β β β Charlene Barshefsky β β β $ 134,250 β β β β $ 75,000 β β β β $ 99,911 β β β β β β β β β β $ 21,133 β β β β β β β β β β $ 330,294 β β β β β Rose Marie Bravo β β β β 102,000 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 276,911 β β β β β Wei Sun Christianson β β β β 119,250 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 294,161 β β β β β Paul J. Fribourg β β β β 131,250 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 306,161 β β β β β Irvine O. Hockaday, Jr.* β β β β 38,250 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 38,250 β β β β β Jennifer Hyman β β β β 112,000 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 286,911 β β β β β Arturo NuΓ±ez** β β β β 28,000 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 28,000 β β β β β Richard D. Parsons β β β β 116,000 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 290,911 β β β β β Lynn Forester de Rothschild β β β β 108,000 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 282,911 β β β β β Barry S. Sternlicht β β β β 108,000 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 282,911 β β β β β Jennifer Tejada β β β β 112,000 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 286,911 β β β β β Richard F. Zannino β β β β 143,000 β β β β β 75,000 β β β β β 99,911 β β β β β β β β β β β β β β β β β β β β β β β 317,911 β β β ContentsΒ Β Β Β Β Β Β Β TheStockholders. See notes (2)Β and (4)Β below for information about cash and share payouts made to Mr.Β Hockaday following table sets forth compensation information regardinghis departure from the Company's non-employee directorsBoard.2017.β Fees
Earned or
Paid in
Cash
($)(1)β Stock
Awards
($)(2)(3)β Option
Awards
($)(4)(5)β Non-Equity
Incentive Plan
Compensation
($)β Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(6)β All Other
Compensation
($)β Total
($)Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β β β β Β $ 83,000 Β $ 69,676 Β $ 99,994 Β β β Β $ 18,276 Β β β Β $ 270,946 Β Β Β 83,000 Β Β 69,676 Β Β 99,994 Β Β β Β Β β Β Β β Β Β 252,670 Β Β β 83,000 Β β 69,676 Β β 99,994 Β β β Β β β Β β β Β β 252,670 Β Β Β 95,000 Β Β 69,676 Β Β 99,994 Β Β β Β Β β Β Β β Β Β 264,670 Β Β β 87,000 Β β 69,676 Β β 99,994 Β β β Β β β Β β β Β β 256,670 Β Β Β 112,000 Β Β 69,676 Β Β 99,994 Β Β β Β Β β Β Β β Β Β 281,670 Β Β β 106,000 Β β 69,676 Β β 99,994 Β β β Β β β Β β β Β β 275,670 Β Β Β 98,000 Β Β 69,676 Β Β 99,994 Β Β β Β Β β Β Β β Β Β 267,670 Β Β β 83,000 Β β 69,676 Β β 99,994 Β β β Β β β Β β β Β β 252,670 Β Β Β 95,000 Β Β 69,676 Β Β 99,994 Β Β β Β Β β Β Β β Β Β 264,670 Β
βCommittee Service.Presiding Director. Mr.Β Hockaday did not stand for re-election at the 2021 Annual Meeting, and the amount shown in this column for him reflects one quarter of cash retainer payments for his service on the Board.(2)889.18 units for 226.69 shares of ClassΒ A Common Stock for each director) as computed in accordance with FASBFinancial Accounting Standards Board Accounting Standard Codification Topic 718, CompensationβββStock Compensation. The amounts were calculated based on the closing price per share of the ClassΒ A Common Stock on the NYSE on the date of grant (NovemberΒ 11, 2016)Compensation (βFASB ASC TopicΒ 718β).(3)2017,2022, which include dividend equivalents.β β β β Name
ββ
Nameβ β Total Number of Shares of ClassΒ A Common Stock
Underlying Stock Awards Outstanding as of
JuneΒ 30, 2017β 2022β β β β β β Charlene Barshefsky β β β β 19,562 β β β Charlene Barshefskyβ β 16,559β β 13,046ββ 15,884 β β β β Wei Sun Christianson β 6,841ββ β 9,388 β β β β Paul J. Fribourg 8,397 Mellody Hobsonβ 14,952ββ β 11,017 β β β β Irvine O. Hockaday, Jr.(a) β β 20,099ββ β β β β β Jennifer Hyman β β β β 1,551 β β β β β Arturo NuΓ±ez β β β β β β β β β β Richard D. Parsons β 15,539β*ββ 18,494(b) β β β β Lynn Forester de Rothschild β β 16,344ββ 19,336 β β β β Barry S. Sternlicht β 12,131ββ β 14,926 β β β β Jennifer Tejada β β β β 1,551 β β β β β Richard F. Zannino β β 7,645ββ 10,230(c) β β β *5,7155,983 stockΒ units held indirectly by Mr.Β Parsons as a co-trustee of a family trust.(4)4,6971,080 shares of ClassΒ A Common Stock for each director), as computed in accordance with FASB Accounting Standard CodificationASC Topic 718, CompensationΒ β Stock Compensation. Amounts shown disregard estimates718. For a description of forfeitures relatedthe assumptions used to service-based vesting conditions. The fair-market valuescalculate the aggregate grant date fair value of such stock options, atsee Note 18 (βStock Programsβ) to our consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended JuneΒ 30, 2022. An Annual Stock Option grant date (NovemberΒ 11, 2016) were calculated using the Black-Scholes options-pricing model, with the following assumptions: an expected volatility of 26% determined using a combination of both current and historical implied volatilities of the underlying ClassΒ A Common Stock obtained from public data sources; an expected termwas not made in NovemberΒ 2021 (fiscal 2022) to exercise of 9Β years from the date of grant; a risk-free interest rate of 1.57%; and a dividend yield of 1.33%. The value of any options that will ultimately be realized by the director will depend upon the actual performance of the Company's ClassΒ A Common Stock during the term of the option from the date of grant through the date of exercise.Mr.Β Hockaday because he did not stand for re-election in NovemberΒ 2021.(5)2017.2022.β β Name β NameβTotal Number of Shares of ClassΒ A Common Stock
Underlying Stock Options Outstanding as of
JuneΒ 30, 2017β 2022β β β β β β Charlene Barshefsky β β β β 26,592(a) β β β Charlene Barshefskyβ β 56,168*β β 16,856ββ 2,596 β β β β Wei Sun Christianson β 26,168ββ β 31,328 β β β β Paul J. Fribourg 49,496 Mellody Hobsonβ 56,168ββ β 2,596 β β β β Irvine O. Hockaday, Jr. β β 13,043ββ β β β β β Jennifer Hyman β β β β 6,830 β β β β β Arturo NuΓ±ez β β β β β β β β β β Richard D. Parsons β 26,168ββ β 4,501 β β β β Lynn Forester de Rothschild β β 46,168ββ 22,779 β β β β Barry S. Sternlicht β 73,846ββ β 31,328 β β β β Jennifer Tejada β β β β 6,830 β β β β β Richard F. Zannino β β 36,168ββ 26,592(b) β β β *34,57622,091 shares of ClassΒ A Common Stock underlying stock options that are held indirectly by Ambassador Barshefsky through a family trust.(6)CertainSome of the Company'sCompanyβs directors in fiscal 20172022 and priorΒ years deferred their Annual Cash Retainers for Board and Committee service pursuant to applicable deferral agreements. Ambassador Barshefsky defers her compensationAnnual Cash Retainers into an interest-bearing cash account; the interest rate is the Citibank base rate at the last day of the calendar year. The amount shown for Ambassador Barshefsky is the interest that accrued above the applicable federal rate set by the Internal Revenue Service (the "AFR"βAFRβ) in fiscal 2017,2022, using the Citibank base rate and the AFR at DecemberΒ 31, 20162021 as the rates for fiscal 2017. Mr.Β Fribourg, Ms.Β Hobson, Mr.Β Hockaday, Lady de Rothschild, and Mr.Β Sternlicht defer their Annual Cash Retainers for Board and Committee service into stock units; all earnings on the fees deferred by these directors were based on the value of a hypothetical investment in shares of ClassΒ A Common Stock made at the time of the deferral, plus the accrual of dividend equivalents on any dividends paid by the Company on the ClassΒ A Common Stock. As of JuneΒ 30, 2017, the directors held units in respect of the following amounts of shares of ClassΒ A Common Stock: Mr.Β Fribourg, 29,989; Ms.Β Hobson, 35,101; Mr.Β Hockaday, 73,761; Lady de Rothschild, 65,071; and Mr.Β Sternlicht, 36,505.2022.β β β β Company'sCompanyβs ClassΒ A Common Stock and ClassΒ B Common Stock as of AugustΒ 7, 2017 byby: (i)Β each person known by the Company to own beneficially more than 5% of the outstanding shares of either ClassΒ A Common Stock or ClassΒ B Common Stock; (ii)Β each of the Company'sCompanyβs directors or nominees; (iii)Β each of the current or former executive officers whose names appear in the Summary Compensation Table; and (iv)Β all current directors and executive officers as a group. Except as set forth in the notes to the table, such beneficial ownership is as of JulyΒ 31, 2022, and the business or mailing address of each 5% stockholder is 767 Fifth Avenue, New York, New York 10153.As described in the notes to the table, certain named beneficial owners share voting and/or investment power with respect to certain shares of Common Stock. Consequently, such shares are shown as beneficially owned by more than one person.β β β β β
Common Stock(1)β β ClassΒ B
Common Stockβ β
Powerβ β β β β Name of Beneficial Owner β β β β % β β Number β β % β β % β β β β Leonard A. Lauder(3)(4) β β β β 281,638 β β β β β 0.1% β β β β β β β β β β β β β β β β β * β β β β β LAL Family Corporation(3)(5) β β β β β β β β β β β β β β β β 80,437,628 β β β β β 64.1% β β β β β 54.1% β β β β β Ronald S. Lauder(3)(6) β β β β 73,335 β β β β β * β β β β β 4,775,210 β β β β β 3.8% β β β β β 3.2% β β β β β William P. Lauder(3)(7) β β β β 20,433 β β β β β * β β β β β 8,515,960 β β β β β 6.8% β β β β β 5.7% β β β β β Gary M. Lauder(3)(8) β β β β 10,468 β β β β β * β β β β β 45,740 β β β β β * β β β β β * β β β β β Aerin Lauder(3)(9) β β β β 1,692 β β β β β * β β β β β 6,585,594 β β β β β 5.2% β β β β β 4.4% β β β β β Jane Lauder(3)(10) β β β β 149,491 β β β β β 0.1% β β β β β 22,346,614 β β β β β 17.8% β β β β β 15.0% β β β β β Joel S. Ehrenkranz, as trustee(3)(11) β β β β 266,638 β β β β β 0.1% β β β β β β β β β β β β β β β β β * β β β β β β β β β 24,957 β β β β β * β β β β β 7,745,877 β β β β β 6.2% β β β β β 5.2% β β β β β Charlene Barshefsky(13) β β β β 121,902 β β β β β 0.1% β β β β β β β β β β β β β β β β β * β β β β β Rose Marie Bravo(14) β β β β 17,400 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Wei Sun Christianson(15) β β β β 46,358 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Angela Wei Dong(16) β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Paul J. Fribourg(17) β β β β 16,533 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Jennifer Hyman(18) β β β β 9,301 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Arturo NuΓ±ez(19) β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Lynn Forester de Rothschild(20) β β β β 55,760 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Barry S. Sternlicht(21) β β β β 112,156 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Jennifer Tejada(22) β β β β 9,301 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Richard F. Zannino(23) β β β β 35,742 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Fabrizio Freda(24) β β β β 746,838 β β β β β 0.3% β β β β β β β β β β β β β β β β β * β β β β β John Demsey(25) β β β β 57,893 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Jane Hertzmark Hudis(26) β β β β 88,418 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β Cedric ProuvΓ©(27) β β β β 268,842 β β β β β 0.1% β β β β β β β β β β β β β β β β β * β β β β β Tracey T. Travis(28) β β β β 109,064 β β β β β * β β β β β β β β β β β β β β β β β * β β β β β BlackRock, Inc.(29) β β β β 16,953,258 β β β β β 7.3% β β β β β β β β β β β β β β β β β 1.1% β β β β β FMR LLC(30) β β β β 11,382,794 β β β β β 4.9% β β β β β β β β β β β β β β β β β 0.8% β β β β β The Vanguard Group(31) β β β β 17,887,435 β β β β β 7.7% β β β β β β β β β β β β β β β β β 1.2% β β β β β β β β β 2,120,568 β β β β β 0.9% β β β β β 43,383,661 β β β β β 34.6% β β β β β 29.3% β β β Β ClassΒ A
Common Stock(1)Β ClassΒ B
Common StockΒ Voting
Powerβ Β β Number(2) β % β Number β % β % β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β Β Β 1,569,838 Β Β 0.7 % Β β Β Β β Β Β * Β Β Β β Β Β β Β Β 88,859,684 Β Β 61.8 % Β 53.5 % Β Β 73,335 Β Β * Β Β 9,409,895 Β Β 6.5 % Β 5.7 % Β Β 1,519,030 Β Β 0.7 % Β 8,093,904 Β Β 5.6 % Β 5.0 % Β Β 1,151,819 Β Β 0.5 % Β 45,740 Β Β * Β Β * Β Β Β 1,692 Β Β * Β Β 6,585,594 Β Β 4.6 % Β 4.0 % Β Β 175,321 Β Β * Β Β 5,185,594 Β Β 3.6 % Β 3.1 % Β Β 1,559,838 Β Β 0.7 % Β β Β Β β Β Β * Β Β Β 41,452 Β Β * Β Β 30,492,471 Β Β 21.2 % Β 18.4 % Β Β 1,149,351 Β Β 0.5 % Β β Β Β β Β Β * Β Β Β 112,035 Β Β * Β Β β Β Β β Β Β * Β Β Β 33,205 Β Β * Β Β β Β Β β Β Β * Β Β Β 32,312 Β Β * Β Β β Β Β β Β Β * Β Β Β 57,196 Β Β * Β Β β Β Β β Β Β * Β Β Β 225,646 Β Β 0.1 %* Β β Β Β β Β Β * Β Β Β 55,685 Β Β * Β Β β Β Β β Β Β * Β Β Β 61,815 Β Β * Β Β β Β Β β Β Β * Β Β Β 148,262 Β Β * Β Β β Β Β β Β Β * Β Β Β 43,116 Β Β * Β Β β Β Β β Β Β * Β Β Β 1,279,457 Β Β 0.6 % Β β Β Β β Β Β * Β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β 312,402 Β Β 0.1 % Β β Β Β β Β Β * Β Β Β 231,745 Β Β 0.1 % Β β Β Β β Β Β * Β Β Β 13,934,471 Β Β 6.2 % Β β Β Β β Β Β 0.8 % Β Β 23,160,944 Β Β 10.3 % Β β Β Β β Β Β 1.4 % Β Β 14,294,811 Β Β 6.4 % Β β Β Β β Β Β 0.9 % Β Β 6,589,528 Β Β 2.9 % Β 53,181,864 Β Β 37.0 % Β 32.3 %
β β AugustΒ 7, 2017.JulyΒ 31, 2022. On that date, there were 224,216,013231,339,477 shares of ClassΒ A Common Stock and 143,762,288125,542,029 shares of ClassΒ B Common Stock outstanding.*β β β β "CertainβCertain Relationships and Related TransactionsβββLauder Family Relationships and Compensation"Compensationβ).(2)AugustΒ 7, 2017JulyΒ 31, 2022 (i.e. by OctoberΒ 6, 2017)SeptemberΒ 29, 2022), and any exercisable options (including options that will be exercisable as of OctoberΒ 6, 2017)SeptemberΒ 29, 2022), except as set forth in note (25). It does not include Performance Share Units ("PSUs"(βPSUsβ) that were paid out after AugustΒ 7, 2017;JulyΒ 31, 2022; for more information on those awards, see "OutstandingβOutstanding Equity Awards at JuneΒ 30, 2017,"2022,β as well as the Form 4s filed for the Company'sCompanyβs executive officers after the payouts of those PSUs. The stockΒ units included in the table that are beneficially owned by the non-employee directors represent the Annual Stock Units Retainer for Board Service (plus dividend equivalents). SuchΒ units will be settled in shares of ClassΒ A Common Stock. Amounts are rounded to the nearest whole unit.(3)CarolΒ S. Boulanger, as trustee, and LAL Family Partners L.P. ("LALFP"(βLALFPβ) are parties to a Stockholders'Stockholdersβ Agreement pursuant to which each has agreed to vote his or the trust'strustβs or partnership'spartnershipβs shares for the election of Leonard A. Lauder (or one of his sons), Ronald S. Lauder (or one of his daughters), and one person, if any, designated by each as a director of the Company. See note (12) for certain exceptions. Shares underlying stock options and stockΒ units are not subject to the Stockholders'Stockholdersβ Agreement until the stock options are exercised or the stockΒ units are converted. For purposes of the table, shares owned by each such individual are not attributed to the others by reason of such voting arrangement.(4)(a)1,559,838(b)10,000Lauder'sLauderβs spouse with respect to which Mr.Β Lauder may be deemed to have shared voting and investment power.(5)88,859,684the shares of ClassΒ B Common Stock owned directly by LALFP. Both LALFC and LALFP are beneficially owned by the Leonard A. Lauder family.(6)(a)9,403,531BA Common Stock directly, overas a Director of The Ronald S. Lauder Foundation and with respect to which he has (i)Β soleshares voting power for all such shares, (ii)Β soleand investment power for 28,531 shares, and (iii)Β shared investment power for 9,375,000 shares as described below;power;(b)(c)66,971AB Common Stock as a Director of The RonaldΒ S. Lauder Foundation and with respect todirectly, over which he has (i)Β sole voting power for all such shares, voting(ii)Β sole investment power for 400,210 shares, and (iii)Β shared investment power.theThe Ronald S. Lauder Foundation. 7,375,0004,375,000 shares of ClassΒ B Common Stock are pledged by Mr.Β R. Lauder to secure loans under loan facilities with certain banks as to which he has sole voting power and shares investment power with certain pledgees under the loan facilities; and 2,000,000 shares of ClassΒ B Common Stock are pledged to secure his obligations under a prepaid variable forward sale contract to an unaffiliated third-party buyer and with respect to which he has sole voting power and shares investment power with such third-party buyer.facilities.(7)(a)59,939directlyunderlying options; and with respect to which he has sole voting and investment power;(b)8,093,904power;power.(c)1,141,351 shares of ClassΒ A Common Stock as co-trustee of The 1992 GRAT Remainder Trust established by LeonardΒ A. Lauder for the benefit of WilliamΒ P. Lauder and others and with respect to which Mr.Β W. Lauder shares voting power with GaryΒ M. Lauder, as co-trustee, and investment power with GaryΒ M. Lauder and CarolΒ S. Boulanger, as co-trustees; and(d)317,740 shares of ClassΒ A Common Stock underlying options held by Mr.Β W. Lauder.Mr.Β W. Lauder disclaims beneficial ownership of shares held by the trust to the extent he does not have a pecuniary interest in such shares.(8)(a)1,141,351co-trustee of The 1992 GRAT Remainder Trust established by LeonardΒ A. Laudercustodian for the benefit of WilliamΒ P. Lauder and othershis nieces and with respect to which Mr.Β G. Lauder shareshe has sole voting power with WilliamΒ P. Lauder, as co-trustee, and investment power with WilliamΒ P. Lauderpower; and CarolΒ S. Boulanger, as co-trustees; andβ β β β 10,468 shares of ClassΒ A Common Stock and by the trust and the shares held by him as custodian to the extent he does not have a pecuniary interest in such shares.(9)(a)(b)"2008β2008 Descendants Trust"Trustβ) with respect to which she shares voting and investment power with Jane Lauder, as co-trustee.trust.2008 Descendants Trust. Shares held by Ms.Β A. Lauder directly are not subject to the Stockholders'Stockholdersβ Agreement. Richard D. Parsons is trustee of a trust for the benefit of Ms.Β A. Lauder that holds shares of ClassΒ B Common Stock. See note (12).(10)(a)32,729(b)(c)142,592options held by Ms.Β J. Lauder.trust.2008 Descendants Trust. Shares held by Ms.Β J. Lauder directly are not subject to the Stockholders'Stockholdersβ Agreement. RichardΒ D. Parsons is trustee of a trust for the benefit of Ms.Β J. Lauder that holds shares of ClassΒ B Common Stock. See noteΒ (12).(11)Ehrenkranz'sEhrenkranzβs business address is 375 Park Avenue, New York, New York 10152.(12)(a)4,442(b)9,8245,7155,983 shares of ClassΒ A Common Stock underlying stockΒ units held indirectly through a family trust that are payable in shares;(c)21,471(d)11,196,516(e)17,161,020 shares of ClassΒ B Common Stock as trustee of the JaneΒ A. Lauder 2003 Revocable Trust for the benefit of Jane Lauder and with respect to which Mr.Β Parsons has sole voting and investment power; and(f)2,134,93536,961 shares of ClassΒ B Common Stock as trustee of a trust for the benefit of Ronald S. Lauder (the "4202 Trust"β4202 Trustβ) and with respect to which Mr.Β Parsons has sole voting power and sole investment power.Stockholders'Stockholdersβ Agreement; therefore, any shares of ClassΒ A Common Stock and ClassΒ B Common Stock owned by The 4202 Corporation are not subject to that agreement. Mr.Β Parsons disclaims beneficial ownership of the shares held by The 4202 Corporation. Mr.Β Parsons's business address is 9 West 57thΒ Street, SuiteΒ 4700, New York, New York 10019.(13)CarolCharlene Barshefsky as follows:β β β β BoulangerSternlicht as follows:8,000β β β β (b)1,141,351 shares of ClassΒ A Common Stock as co-trustee of The 1992 GRAT Remainder Trust established by LeonardΒ A. Lauder for the benefit of WilliamΒ P. Lauder and others and with respect to which she shares investment power with WilliamΒ P. Lauder and GaryΒ M. Lauder, as co-trustees.Ms.Β Boulanger disclaims beneficial ownership of all shares held by the trust. Ms.Β Boulanger's business address is 1540 Broadway, New York, New York 10036.(14)Includes shares owned beneficially by Charlene Barshefsky as follows:(a)4,000 shares of ClassΒ A Common Stock directly and with respect to which she has sole voting and investment power;(b)40,005 shares of ClassΒ A Common Stock indirectly through a family trust;(c)16,559stock units payable in shares; andoptions.(d)51,471 shares of ClassΒ A Common Stock underlying options, including options that are held indirectly through a family trust.(15)Rose Marie BravoCedric ProuvΓ© as follows:(a)8,000 shares of ClassΒ A Common Stock directly and with respect to which she has sole voting and investment power;(b)13,046 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(c)12,159 shares of ClassΒ A Common Stock underlying options.(16)Includes shares owned beneficially by Wei Sun Christianson as follows:(a)4,000 shares of ClassΒ A Common Stock directly and with respect to which she has sole voting and investment power;(b)6,841 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(c)21,471 shares of ClassΒ A Common Stock underlying options.(17)Includes shares owned beneficially by PaulΒ J. Fribourg as follows:(a)4,000 shares of ClassΒ A Common Stock directly and with respect to which he has sole voting and investment power;(b)8,397 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(c)44,799 shares of ClassΒ A Common Stock underlying options.(18)Includes shares owned beneficially by Mellody Hobson as follows:(a)9,500 shares of ClassΒ A Common Stock directly and with respect to which she has sole voting and investment power;(b)149,723 shares of ClassΒ A Common Stock indirectly in a family member's trust;(c)14,952 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(d)51,471 shares of ClassΒ A Common Stock underlying options.(19)Includes shares owned beneficially by IrvineΒ O. Hockaday,Β Jr. as follows:(a)27,240 shares of ClassΒ A Common Stock directly and with respect to which he has sole voting and investment power;(b)20,099 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(c)8,346 shares of ClassΒ A Common Stock underlying options.(20)Includes shares owned beneficially by Lynn Forester de Rothschild as follows:(a)4,000 shares of ClassΒ A Common Stock directly and with respect to which she has sole voting and investment power;(b)16,344 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(c)41,471 shares of ClassΒ A Common Stock underlying options.(21)Includes shares owned beneficially or deemed to be owned beneficially by BarryΒ S. Sternlicht as follows:(a)30,982 shares of ClassΒ A Common Stock directly and with respect to which he has sole voting and investment power;(b)36,000 shares of ClassΒ A Common Stock indirectly through three family trusts;(c)12,131 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(d)69,149 shares of ClassΒ A Common Stock underlying options.(22)Includes shares owned beneficially by RichardΒ F. Zannino as follows:(a)4,000 shares of ClassΒ A Common Stock directly and with respect to which he has sole voting and investment power;(b)7,645 shares of ClassΒ A Common Stock underlying stock units payable in shares; and(c)31,471 shares of ClassΒ A Common Stock underlying options.(23)Includes shares owned beneficially by Fabrizio Freda as follows:(a)73,174181,288 shares of ClassΒ A Common Stock directly and with respect to which he has sole voting and investment power; and(b)1,206,283options.(24)See "Outstanding Equity Awards at JuneΒ 30, 2017" table for information about JohnΒ Demsey's equity holdingsoptions, including options that became immediately exercisable as of Junehis retirement date (JuneΒ 30, 2017, which include (i)Β approximately 160,000 shares underlying performance share units, (ii)Β more than 158,000 shares underlying stock options, and (iii)Β more than 45,000 shares underlying restricted stock units.2022).(25)Includes shares owned beneficially by Cedric ProuvΓ© as follows:(a)211,475 shares of ClassΒ A Common Stock directly and with respect to which he has sole voting and investment power; and(b)100,927 shares of ClassΒ A Common Stock underlying options.(26)(a)29,467(b)202,278(27)dated JanuaryΒ 23, 2017filed FebruaryΒ 1, 2022 by BlackRock, Inc. ("BlackRock"(βBlackRockβ), 55 East 52nd Street, New York, New York 10055, BlackRock may be deemed to be the beneficial owner of 13,934,47116,953,258 shares of ClassΒ A Common Stock, over which it has (a)Β sole investment power for 13,920,793 shares, (b)Β shared investment power and shared voting power for 13,678all such shares and (c)(b)Β sole voting power for 11,496,35514,309,143 shares, all of which shares are held by certain of its subsidiaries.(28)datedfiled FebruaryΒ 13, 20179, 2022 by FMR LLC ("FMR"(βFMRβ), 245 Summer Street, Boston, Massachusetts 02210, FMR may be deemed to be the beneficial owner of 23,160,94411,382,794 shares of ClassΒ A Common Stock, over which it has (a)Β sole investment power for all such shares and (b)Β sole voting power for 1,767,9432,301,784 shares, all of which shares are held for its own benefit or for the benefitby certain of its clients by its separate accounts, externally managed accounts, registered investment companies, subsidiaries and/or other affiliates.subsidiaries.(29)datedfiled FebruaryΒ 9, 201710, 2022 by The Vanguard Group ("Vanguard"(βVanguardβ), 100 Vanguard Boulevard, Malvern, Pennsylvania 19355, Vanguard may be deemed to be the beneficial owner of 14,294,81117,887,435 shares of ClassΒ A Common Stock, over which it has (a)Β sole investment power for 13,912,37016,928,231 shares, (b)Β shared investment power for 382,441 shares, (c)Β sole voting power for 349,985959,204 shares, and (d)(c)Β shared voting power for 40,354392,464 shares, all of which shares are held by certain of its subsidiaries.(30)(14) throughΒ (26)(28). Includes for executive officers not named in the table:(a)162,671(b)455,006β β β β Β Β Β Β Β Β Β Β We drive our annuallong-term performance through our executive compensation programs. Annual incentive pay is tied to business objectives that are specific to each individual's responsibilities and encourage collaboration acrossEurope, the organization. Long-term equity incentives are tied to both the Company's share price and financial goals overMiddle East & Africa (βEMEAβ) regions, largely reflecting a period of three or more years. As explained below, this combination of compensation elements is intended to support and promote strong, balanced, and sustainable corporate performance.Β Β Β Β Β Β Β Β Our fiscal 2017 results reflect our successrecovery in pivoting our business to the fastest-growing areas of prestige beauty to align with consumers' changing shopping preferences. With our leading brands, quality innovations, and the acquisitions of Too Faced and BECCA, we attracted new consumers globally. Our business accelerated in our online direct-to-consumer and retailer e-commerce sites,brick-and-mortar retail stores, as well as double-digit growth in global online and growth in travel retail. We achieved record revenue and profitability on an adjusted basis for the travel retailyear. Our multiple engines of growth strategy proved invaluable amid pandemic and specialty-multi channels. In addition,macro complexity, affording us the diversification to seize growth of the moment. The Americas and EMEA prospered, Fragrance soared, and Makeup realized the promise of its emerging renaissance. La Mer, MΒ·AΒ·C, and Jo Malone London led the contribution of double-digit organic sales growth by nine brands, impressive on its own and especially so given the significant pressure from COVID-19 in Asia/Pacific at the end of the year. Brick-and-mortar and Online each grew globally, as we built momentumcapitalized on reopening, extended our consumer reach in key geographies, like Chinahigh-growth channels, and Italy, aidedamplified our omni-channel capabilities.enhanced digital and social media communications, and we began to further improve our organizational efficiency and effectiveness through our Leading Beauty Forward initiative. Importantly, we delivered this performance in the face of external global volatility.Fiscal 2017 Change over
Prior Year3-Year
Compound Annual
Growth Rate
(or Basis Point
Improvement)5-Year
Compound Annual
Growth Rate
(or Basis Point
Improvement)β βΒ β βΒ β βΒ β βΒ β β β β β β β β β β Β $11.8Β billion Β 5% Β 2.5% Β 4.0% Β $11.8Β billion Β 5% Β 3.1% Β 4.0% Β $12.0Β billion Β 7% Β N/A Β N/A Β 14.3% Β β Β β240bp Β +80bp Β 15.9% Β +30bp Β β20bp Β +170bp Β $3.35 Β 13% Β 3.1% Β 9.2% Β $3.47 Β 8% Β 5.6% Β 8.9% Β $3.59 Β 11% Β N/A Β N/A Β 18.9% Β β350bp Β β590bp Β β510bp Β $1.8Β billion Β 1% Β 5.5% Β 9.8% Β 7.1% Β β Β 10.4% Β 13.7% Β 17.9% Β β Β 9.6% Β 14.6% (1)All periods have been adjusted to exclude returns and charges associated with restructuringexecutive officers and other activities. Fiscal 2017 hasemployees during the challenges noted above. We strive to operate responsibly and build a sustainable business based on uncompromising ethics, integrity, fairness, inclusion, diversity and equity, and trust, consistent with our Company values. We view human capital management and the strength of our employees as integral to the long-term success and resilience of our business. Our human capital management includes the following strategic areas:been adjustedenhances productivity.exclude goodwillsupport our employeesβ physical, mental, and other intangible asset impairmentsfinancial well-being, which helps us attract, incentivize, and for Diluted EPS as adjusted,retain world-class talent.exclude the China deferred tax asset valuation allowance reversal. Fiscal 2017 and fiscal 2016 have also been adjusted to exclude the impact of changes in the fair value of contingent consideration. Fiscal 2014 has also been adjusted for a charge to remeasure net monetary assets in Venezuela and for the impactvitality of the accelerated orders associated with the Company's July 2014 implementation of its Strategic Modernization Initiative ("SMI"). Fiscal 2017 Net Sales as adjusted in constant currency excludes the $187Β million negative impact of foreign currency translation. Fiscal 2017 Diluted EPS as adjusted in constant currency excludes the $0.12 impact of foreign currency translation. communities where we have a presence.these non-GAAP financial measures.(2)Excludes returns and charges associated with restructuring and other activities and the impact of changes in the fair value of contingent consideration in each period, where applicable. Fiscal 2017 also excludes goodwill and other intangible asset impairments. The lower ROIC in fiscal 2017 as compared with prior periods was primarily attributable to the impact Online sales includes sales of our fiscal 2017 acquisitions, higher levelsproducts from our websites and third party platforms, as well as estimated sales of reported cash and short- and long-term investments from earnings generated by our international operations, and the unfavorable impact of foreign currencies. See AppendixΒ A for information about this non-GAAP financial measure.Β Β Β Β Β Β Β Β In fiscal 2017, we increased the common stock dividend 13%, repurchased 4.7Β million shares for $413Β million, and used $504Β million of cash flow from operations for capital expenditures. Over the five-year period ended JuneΒ 30, 2017, the total market value of the Company increased by 68% or approximately $14.3Β billion.Β Β Β Β Β Β Β Β The following summarizes key executive compensation decisions that affected compensation in, or relating to, fiscal 2017:
retailersβ websites.β’The Compensation Committee (the "Committee") authorized increases in annual compensation for fiscal 2017 for the President and Chief Executive Officer and certain other Named Executive Officers ("NEOs") in recognition of strong and sustained individual and Company performance. On average, fiscal 2017 annual target compensation for the NEOs increased less than 5%.β’The annual stock-based compensation awarded toproducts sold through our NEOs in fiscal 2017 was based on target grant levels and an assessment of each officer's performance and expected future contributions. These awards were granted in September 2016 and are shown in "Grants of Plan-Based Awards in Fiscal 2017." The current equity mix is weighted equally among performance share units ("PSUs"), stock options, and restricted stock units ("RSUs").β’The base salary for Fabrizio Freda, our President and Chief Executive Officer, remained at $1.9Β million, his bonus opportunity remained at $4.7Β million, and his equity target was increased to $8.5Β million, resulting in target total annual compensation of $15.1Β million for fiscal 2017, an increase of 4% from fiscal 2016. No additional equity grants were made to Mr.Β Freda in fiscal 2017, which accounts for the significant year-over-year declines shown for "Stock Awards" and "Total" in the "Summary Compensation Table."β’In August 2017, the Stock Plan Subcommittee approved the payout for the third (final) tranche of the PSU granted to Mr.Β Freda in September 2012 that was based on Total Stockholder Return ("TSR"). Target payout was set at the 60thΒ percentile, a rigorous objective. The Company's TSR during the performance period relative to that of the S&PΒ 500 Companies was at the 46thΒ percentile. Accordingly, Mr.Β Freda received 30,267 shares under this incentive award. See "CEO Compensation" below.β’Based on the Company's performance over the three-year period ended JuneΒ 30, 2017, the PSUs granted to our executive officers in September 2014 resulted in an aggregate payout of 81.3% of target. Actual payouts for the NEOs are described in noteΒ (4) of the "Outstanding Equity Awards at JuneΒ 30, 2017" table.β’Our NEOs achieved fiscal 2017 payout percentages under the Executive Annual Incentive Plan ("EAIP") ranging from 110% to 131% out of a possible maximum of 150% of target bonus opportunities. Actual payouts were determined by applying the payout percentages to the fiscal 2017 target bonus opportunities and are shown in the "Summary Compensation Table."β β β β β β β β β β CEO Annual Compensation
for Fiscal 2022β β β In SeptemberΒ 2021, the Compensation Committee (the βCommitteeβ) increased the base salary rate for Fabrizio Freda, our CEO, to $2.1Β million (from $2.0Β million) and increased Mr.Β Fredaβs bonus opportunity to $5.25Β million (from $5.0Β million). The Stock PlanΒ Subcommittee (the βSubcommitteeβ) increased Mr.Β Fredaβs equity target to $11.86Β million (from $11.13Β million), resulting in target total annual compensation for fiscal 2022 ofβ $19.21Β million. β β β β Payout of Second Tranche of SeptemberΒ 2015 PSU
granted to CEOβ β β On JuneΒ 30, 2022, Mr.Β Freda received payout of the Second Tranche (129,283 shares) of the non-annual performance share unit (βPSUβ) that was granted in SeptemberΒ 2015, as well as a cash payment for dividend equivalents. For additional information, see βAdditional (non-annual) Performance-Based Long-Term Equity Grants to CEO in Fiscal 2016, Fiscal 2018, and Fiscal 2021β and βOption Exercises and Stock Vested in Fiscal 2022.β β β β β Certification of Performance Goal for Second (final) Tranche of FebruaryΒ 2018 PSU
granted to CEOβ β β In AugustΒ 2022, the Subcommittee certified that the performance goal for the second (final) tranche of the non-annual PSU that was granted to Mr.Β Freda in FebruaryΒ 2018 was achieved. Therefore, a total of 195,940 shares of ClassΒ A Common Stock will be delivered to Mr.Β Freda in SeptemberΒ 2024, subject to the awardβs terms and conditions. For additional information, see βAdditional (non-annual) Performance-Based Long-Term Equity Grants to CEO in Fiscal 2016, Fiscal 2018, and Fiscal 2021.β β β β β NEO Annual Stock-Based Compensation for Fiscal 2022 β β β The annual equity mix remained weighted equally among PSUs, stock options, and restricted stockΒ units. The annual stock-based compensation awarded to our Named Executive Officers (the βNEOsβ) in fiscal 2022 was based on target grant levels and an assessment of each officerβs performance and expected future contributions. These awards are shown in βGrants of Plan-Based Awards in Fiscal 2022.β β β β β Payout of PSUs granted to NEOs in Fiscal 2020 β β β Based on the Companyβs performance over the three-year period ended JuneΒ 30, 2022, the PSUs granted in SeptemberΒ 2019 resulted in an aggregate payout of 119.4% of target out of a possible maximum of 150%. Actual payouts of shares of ClassΒ A Common Stock to the NEOs were made in early SeptemberΒ 2022 and are described in note (4)Β ofβ βOutstanding Equity Awards at JuneΒ 30, 2022.β β β β β EAIP Payout for NEOs
for Fiscal 2022β β β Our NEOs achieved fiscal 2022 payoutΒ percentages under the Executive Annual Incentive Plan (βEAIPβ) ranging from 114.5% to 135.6% out of a possible maximum of 165% of target bonus opportunities. Actual payouts were made in mid-SeptemberΒ 2022. Such payouts were determined by applying the payoutΒ percentages to the fiscal 2022 target bonus opportunities and are shown in the βSummary Compensation Table.β For information regarding the fiscal 2022 EAIP design, see βDesign of EAIP and PSU for Fiscal 2022 and Fiscal 2023.β β β β β β β 20162021 Annual Meeting, over 92%approximately 91% of the votes cast in connection with the stockholdersstockholdersβ advisory vote on compensation of the NEOs were cast in favor of the proposal, and weproposal. We have considered this voting result. Asresult, and as explained below, our compensation policies and decisions continue to be focused on sustainable financial performance and aligning the interests of senior management with the interests of stockholders.high quality peopleworld class talent and to motivate them to achieveachievement of both our long-term and short-term goals. We believe that the design and governance of our program supports, and aligns executive officers with, the business strategy and the overall goal to continue sustainable growth of net sales, profitability, and return on invested capital on an annual and long-term basis. Our executive compensation program reflects our successful track record and the control by the Lauder family. Periodically, we review various aspects of our compensation program to ensure that it remains aligned with our business strategy and the above-referenced goals.featuresFeatures of our compensation programs, policies,Compensation Programs, Policies, and practices are as follows:ΓΌAlign pay with performance and the interests of stockholders by linking a significant portion of total compensation to the achievement of Company-wide performance criteria during one- and three-year performance periodsΓΌDeliver approximately one-third of the value of equity awards in PSUs, with failure to achieve the pre-established minimum threshold amount resulting in no payout under the PSUsΓΌConduct an annual evaluation about risk in compensation programs to confirm that our compensation programs are not reasonably likely to have a material adverse effect on the CompanyΓΌMaintain stock ownership guidelines and holding requirements for Executive Officers to further align their interests with those of our stockholdersΓΌRetain a compensation consultant that is free of conflicts of interest, reports directly to the Committee, and performs no other services for the CompanyΓΌDo not reprice or buy out stock optionsΓΌMaintain policies on insider trading and clawbacksβ β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β’executives'executivesβ interests with our long-term and short-term goals and with the interests of our stockholders;β’β’β’Β Β Β Β Β Β Β Β We have been in the beauty business since 1946, and have established a strong record of growth and profitability. For the first 50Β years, we were wholly owned by the Lauder family. Today, the family continues to own a significant portion of our outstanding stock. Our executive compensation program reflects our successful track record and the control by the Lauder family. From time to time, we may discuss various topics, including executive compensation and corporate governance matters, with investors and other stakeholders.Β Β Β Β Β Β Β Β The following table sets forth our executive officers, including each of the Named Executive Officers ("NEOs"), as of JuneΒ 30, 2017.NameTitleNEOβ βΒ β βΒ β βββ ββ John DemseyExecutive Group PresidentΓΌFabrizio FredaPresident and Chief Executive OfficerΓΌCarl HaneyExecutive Vice President,Global Research and Development, Corporate Product Innovation, Package DevelopmentβLeonard A. LauderChairman EmeritusRonald S. LauderChairman of Clinique Laboratories,Β LLCβWilliam P. LauderExecutive ChairmanΓΌSara E. MossExecutive Vice President and General CounselβMichael O'HareExecutive Vice PresidentβGlobal Human ResourcesGregory F. PolcerExecutive Vice PresidentβGlobal Supply ChainβCedric ProuvΓ©Group PresidentβInternationalΓΌTracey T. TravisExecutive Vice President and Chief Financial OfficerΓΌAlexandra C. TrowerExecutive Vice PresidentβGlobal Communications20172022 for our NEOs are described under "EmploymentβEmployment Agreements."β Our standard employment agreements for executive officers cover termination and severance and include non-competition, confidentiality, and related provisions. TheyEach NEOβs employment agreement has a two-year non-compete provision. Such provisions in the employment agreements for certain NEOs expressly provide for post-termination payments and certain continued benefits during the enforced non-compete period. Our standard employment agreements for executive officers do not include specified amounts of salary, bonus opportunities, or equity-based compensation for futureΒ years. For executive officers who are recruited to join the Company, we will specify levels of salary, bonus opportunities, and equity-based compensationβ β β β Subcommittee.Stock PlanΒ Subcommittee (the βSubcommitteeβ). The Subcommittee approves the terms of all equity grants to executive officers under our long-term equity incentive plan (including any equity compensation-related terms of employment agreements for executive officers). The Committee approves all other aspects of executive compensation.Β Β Β Β Β Β Β Β Our2017 consisted2022 and fiscal 2023.![[MISSING IMAGE: tm2222590d1-fc_totalpn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2222590d1-fc_totalpn.jpg)
following:
performance-orientedpredominantly performance-based (i.e., provide a greaterΒ percentage of compensation in the form of variable annual and long-term incentive compensation) and reasonable when compared with the peer group. As shown below, the CEO annual target pay mixβ β β β team orientedteam-oriented approach to managing the business. Total direct compensation and allocations of metrics within the EAIP are determined based on the type and level of responsibility of the particular executive officer, internal pay equity, and competitive considerations.("LTI"(βLTIβ), followed by annual cash incentives, and then by base salary.2017,2022, the mix of pay for executive officersour NEOs is shown below:![[MISSING IMAGE: tm2222590d1-pc_ceoannualpn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2222590d1-pc_ceoannualpn.jpg)
(1)Includes amounts attributable to fiscal 2017 for the RSUs and PSUs granted on SeptemberΒ 24, 2012 and the PSU granted on SeptemberΒ 4, 2015 with a target payout of 387,848 shares; without these grants, Mr.Β Freda's annual target pay mix for fiscal 2017 was 13% base salary, 31% target annual incentive, and 56% target LTI.(2)Reflects average annual target pay mix for Tracey T. Travis, John Demsey, and Cedric ProuvΓ©; does not include target pay mix for WilliamΒ P. Lauder or Ms.Β Travis's additional September 2016 RSU award for 16,766 shares. For fiscal 2017, William P. Lauder had a target pay mix of 23% base salary, 46% target annual incentive, and 31% target LTI.Β Β Β Β Β Β Β Β For fiscal 2017, the average annual target pay mix for the other executive officers except LeonardΒ A. Lauder and Ronald S. Lauder was 24% base salary, 21% target annual incentive, and 55% LTI; such average pay mix does not include any LTI awards in addition to the annual grants. Leonard A. Lauder and Ronald S. Lauder have not received any LTI awards since fiscal 2000. to 2% ahead of global prestige beauty, deriving more than 60% of sales from outside the United States, improving operating margin, achieving competitive levels of return on invested capital, and optimizing inventory.modestcertain perquisites. In certainsome circumstances, we may pay amounts or grant equity to attract executives to work for us or move to particular locations, or we may provide additional incentives for executives to perform or remain with us. This reflects, in part, the global nature of our business and the executives that we seek to attract and retain.β β β β ContentsSalary.Salaryexecutive'sexecutiveβs position, current salary, tenure, and internal pay equity among executives with similar responsibilities, as well as competitiveness of the salary level in the marketplace. The Committee also considers recommendations from the Executive Chairman, the President and Chief Executive Officer,CEO, the Executive Vice PresidentΒ β Global Human Resources,EVP HR, and the Committee's outsideCommitteeβs compensation consultant (Semler Brossy).Consulting Group)regarding the design for the fiscal 2022 EAIP and PSU. They noted that certain ongoing risks and related volatilities concerning the pandemic would continue into fiscal 2022, and they also considered the feedback and concerns received from some institutional investors about the suspension of return on invested capital (βROICβ) as a metric for our fiscal 2021 EAIP and fiscal 2021 PSUs. The Compensation Committee and the Subcommittee decided to reintroduce ROIC for fiscalβ β β β wellcalculated (therefore, no impact from the 80% Corporate Multiplier floor in the plan design) and (ii)Β overall payouts ranging from 114.5% to 135.6% (therefore, no impact from the 50% overall payout floor in the plan design). See βAnnual Incentive Bonusβ below for additional information about the EAIP.impactoverall EAIP payout floor of SectionΒ 162(m)50%. In connection with the Corporate Multiplier, which had an 80% floor for fiscal 2022, the Committee decided to maintain the range of 80%βββ140% for fiscal 2023. This results in a payout range of 0%βββ165% for the fiscal 2023 EAIP. For the fiscal 2023 PSU, the Subcommittee decided to continue the design of the Internal Revenue Code. fiscal 2022 PSU."Tax Compliance Policy" below.β β β β of key importanceimportant in aligning the interests of our executives with our short-term goals and rewarding them for performance. For executive officers, the level of bonus opportunities and performance targets are based on the scope of the executive'sexecutiveβs responsibilities, internal pay equity among executives with similar responsibilities, and competitive considerations. The measures in our annual incentive program are designed to foster interdependence and collaboration among brands, regions, and functions to drive the corporate strategy by ensuring alignment of business unit performance with overall corporate performance. Annual incentives payable to our executive officers, including the NEOs, are limited to a pool set at the beginning of the fiscal year by the Committee (3% of our net operating profit plan in fiscal 2017)2022). Within that limit, the Committee sets annual aggregate bonus opportunities and exercises negative discretion to determine the annual incentives to be paid. For fiscal 2017,2022, the EAIP payout was the product of the target for each executive officer and the EAIP payoutΒ percentage ("(βEAIP Payout %"%β), which is comprised ofβ(a) the Corporate Multiplier and (b)Β the Business Unit Multiplier, as described below. Total fiscal 2022 EAIP payouts were less than the amount of the approved bonus pool.
![[MISSING IMAGE: tm2120704d1-fc_payoutpn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2120704d1-fc_payoutpn.jpg)
officer'sofficerβs target opportunity. ProvidedFor the minimum threshold has been achieved,reasons explained above, the fiscal 2022 EAIP was designed as follows: (i)Β maximum payout of 165% of target, which includes (a)Β Corporate Multiplier maximum of 140% and (b)Β Business Unit Multiplier of 118%; (ii)Β overall payout floor of 50%, such that any performance that yields a payout of below 50% would result in an overall payout of 50%; and (iii)Β Corporate Multiplier floor of 80%, such that any performance that yields a Corporate Multiplier below 80% would result in a Corporate Multiplier of 80%. For fiscal 2022, payouts can rangecould have ranged from 31.25%50% of target up to a maximum of 150%165% of target. Failure to achieve the pre-established minimum threshold level of performance would result in no credit for that particular criteria and, depending upon performance in respect of other criteria, could result in no bonus being paid. Measurement of performance, including establishment of the bonus pool, is subject to certain automatic adjustments, such as changes in accounting principles, goodwill and other intangible asset impairments, the impact of unplanned completed business acquisition activity, restructuring and other activities, discontinued operations, certain non-recurring income/expenses, and the impact on net sales of unplanned changes in foreign currency rates. Such automatic adjustments in(which reflect the impact, where appropriate, of tax, currency and non-controlling interest) for fiscal 2017 include2022 were: the impact of charges associated with restructuring and other activities related to the Company'sCompanyβs Leading Beauty Forward initiatives, the impact of the Too Faced and BECCA acquisitions,Post-COVID Business Acceleration initiatives; goodwill, and other intangible, and long-lived asset impairments, changes in fair valueimpairments; gain on previously held equity method investment, and acquisition-related stock option expense associated with the increased ownership of contingent consideration, and the China deferred tax asset valuation allowance reversal.wereare set by the Committee in consultation with management and the Committee'sCommitteeβs outside consultant during the first quarter of the fiscal year. Target payouts for executive officers are largely based on the prior year's target amount and are reviewed by the Committee annually.Β The Each executive officerβs incentive payment is subject to the Corporate Multiplier. For fiscal 2022, the Corporate Multiplier iswas comprised of four equally weighted, Company-wide performance criteria: (1)Β diluted net earnings per share from continuing operations ("(βDiluted EPS"EPSβ); (2)Β Operating Income Margin Percentage ("(βOI Margin Percent"Percentβ); (3)Β Net Sales; and (4)Β return on invested capital ("ROIC"(βROICβ). ROIC was reintroduced as a performance measure for fiscal 2022, at aβ β β β straightlinestraight-line interpolation with target level of performance as a base. As an example, for Net Sales performance that is between the threshold and the target, for each 1% that performance is below target, the payout will be 31/3% 1/3% below the target payout of 100%. In setting fiscal 2022 targets, we considered the continued effect and uncertainty of the COVID-19 pandemic on our business. The chart below shows the threshold, target, and maximum for each criteria making up the Corporate Multiplier as well as the results for fiscal 2017. Because2022. For fiscal 2022, performance exceeded the maximum leveltarget for Diluted EPS, OI Margin Percent and ROIC, the payout factorperformance was at 120% of target;between target and maximum for Diluted EPS, and performance was between threshold and target for Net Sales, performance was just below target, resulting in a payout of 96%. The Corporate Multiplier wasof 124.3%; therefore 114%. Each executive officer's incentive payment is subject to the Corporate Multiplier.Multiplier floor of 80% in the EAIP design for fiscal 2022 did not impact the fiscal 2022 EAIP payouts.β β β β β β β β Threshold β β Target β β Maximum β β Actual
Performanceβ β β β β β β Fiscal 2022
Targetβ β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β β β Diluted EPS β β $7.03 β β β β 50% β β β β β 50% β β β β β 100% β β β β β 100% β β β β β 103.3% β β β β β 140% β β β β β 103.0% β β β β β 136.2% β β β β β OI Margin Percent β β 19.2% β β β β 50% β β β β β 50% β β β β β 100% β β β β β 100% β β β β β 101.6% β β β β β 140% β β β β β 102.8% β β β β β 140.0% β β β β β Net Sales* β β $18.55 billion β β β β 85% β β β β β 50% β β β β β 100% β β β β β 100% β β β β β 101.3% β β β β β 140% β β β β β 95.8% β β β β β 91.6% β β β β β ROIC β β 18.2% β β β β 50% β β β β β 50% β β β β β 100% β β β β β 100% β β β β β 103.3% β β β β β 140% β β β β β 121.4% β β β β β 140.0% β β β β β Corporate Multiplier β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β Β Β ThresholdΒ TargetΒ MaximumΒ Actual Performance(1)Β Β Β Fiscal
2017
Target% of
TargetPayout
(% of
Oppty)% of
TargetPayout
(% of
Oppty)% of
TargetPayout
(% of
Oppty)% of
TargetPayout
(% of
Oppty)Β β βΒ β βΒ β βΒ β βΒ β βΒ β βΒ β βΒ β βΒ β βΒ β β β β β β β β β β β β β β β β β β β β β β Β $3.43 Β 50% Β 50% Β 100% Β 100% Β 102.3% Β 120% Β 103.7% Β 120.0% Β Β 15.3% Β 50% Β 50% Β 100% Β 100% Β 101.1% Β 120% Β 106.1% Β 120.0% Β Β $11.91Β billion Β 85% Β 50% Β 100% Β 100% Β 100.7% Β 120% Β 97.9% Β 96.0% Β Β 20.5% Β 50% Β 50% Β 100% Β 100% Β 101.5% Β 120% Β 109.3% Β 120.0% Β Β β Β β Β β Β β Β β Β β Β β Β β Β 114.0% Β
*
β(1)"AnnualβAnnual Incentive Bonus."(2)Target ROIC decrease as compared to fiscal 2016 primarily reflects the impact of higher levels of reported cash and short-Β and long-term investments from earnings generated by our international operations.Β The For fiscal 2022, the Business Unit Multiplier works similarly,in a manner similar to the Corporate Multiplier but is based on various combinations of business criteria at the business unit level, including: (1)Β Net Sales; (2)Β Net Operating Margin ("(βNOP Margin"Marginβ); (3)Β inventory management; (4)Β productivity and other cost savings; and (5)(3)Β other divisional goals tied to our long-term strategy ("(βBusiness Unit Strategic Objectives"Objectivesβ). The weighting of the various measures is fixed for each executive officer depending upon position and responsibilities. As with the Corporate Multiplier, targetTarget level performance on all the applicable criteria leads to a Business Unit Multiplier of 100%. If the threshold level of performance is not achieved for any of the applicable criteria, then the Business Unit Multiplier would be zero for those criteria. When performance exceeds the maximum level, the payout factors are at 125%118% of target. In the case where the actual performance was between the target and the maximum, or between the threshold and the target, the payout factor was calculated mathematically using straightlinestraight-line interpolation with target level of performance and associated payout as a base.β β β β the Global Brands results represent the consolidated results of all brands, and the Functions Average is a simple average of the performance against Business Unit Strategic Objectives for the six Corporate Functions (i.e.Β Finance; Human Resources; Legal; Global Communications; Global Researchvarious corporate functions. For Ms.Β Hudis, Mr.Β ProuvΓ©, and Development, Corporate Product Innovation, Package Development; and Global Supply Chain). For Messrs.Mr.Β Demsey, and ProuvΓ©, the threshold, target, and maximum for each criteria making up the Business Unit Multiplier for their respectiveΒ units, as well as the results for fiscal 2017,2022, are shown in the table set forth below.β β β β β β β β Threshold β β Target β β Maximum β β
Performance(1)β β β β β β β
2022
Targetβ β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β β β Division Net Sales β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Jane Hertzmark Hudis β β $11.1βbillionΒ Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 102.7% β β β β β 118% β β β β β 91.7% β β β β β 79.3% β β β β β Cedric ProuvΓ© β β $13.6βbillionΒ Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 102.7% β β β β β 118% β β β β β 94.3% β β β β β 85.8% β β β β β John Demsey β β $5.0βbillionΒ Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 102.7% β β β β β 118% β β β β β 98.7% β β β β β 96.7% β β β β β Division NOP Margin β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Jane Hertzmark Hudis β β 41.0%Β Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 101.1% β β β β β 118% β β β β β 95.9% β β β β β 89.7% β β β β β Cedric ProuvΓ© β β 41.8%Β Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 101.0% β β β β β 118% β β β β β 97.9% β β β β β 94.8% β β β β β John Demsey β β 12.2%Β Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 105.4% β β β β β 118% β β β β β 112.7% β β β β β 118.0% β β β β β Online Sales β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Jane Hertzmark Hudis β β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 103.0% β β β β β 118% β β β β β 89.3% β β β β β 73.3% β β β β β Cedric ProuvΓ© β β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 103.0% β β β β β 118% β β β β β 87.9% β β β β β 69.7% β β β β β John Demsey β β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 103.0% β β β β β 118% β β β β β 86.7% β β β β β 66.9% β β β β β Online NOP Margin β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Jane Hertzmark Hudis β β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 105.0% β β β β β 118% β β β β β 95.7% β β β β β 89.1% β β β β β Cedric ProuvΓ© β β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 105.0% β β β β β 118% β β β β β 98.6% β β β β β 96.5% β β β β β John Demsey β β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 105.0% β β β β β 118% β β β β β 93.2% β β β β β 83.0% β β β β β Total Company Sales β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Jane Hertzmark Hudis β β $18.5βbillionΒ Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 102.7% β β β β β 118% β β β β β 95.7% β β β β β 89.3% β β β β β Cedric ProuvΓ© β β $18.5βbillionΒ Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 102.7% β β β β β 118% β β β β β 95.7% β β β β β 89.3% β β β β β John Demsey β β $18.5βbillionΒ Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 102.7% β β β β β 118% β β β β β 95.7% β β β β β 89.3% β β β β β Total Company NOP Margin β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Jane Hertzmark Hudis β β 19.5%Β Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 103.2% β β β β β 118% β β β β β 104.9% β β β β β 118.0% β β β β β Cedric ProuvΓ© β β 19.5%Β Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 103.2% β β β β β 118% β β β β β 95.7% β β β β β 118.0% β β β β β John Demsey β β 19.5%Β Β Β β β β β 85% β β β β β 62.5% β β β β β 100% β β β β β 100% β β β β β 103.2% β β β β β 118% β β β β β 104.9% β β β β β 118.0% β β β Β Β Β ThresholdΒ TargetΒ MaximumΒ Actual
Performance(1)Β Β Fiscal
2017
Targetβ % of
Targetβ Payout
(% of
Oppty)β % of
Targetβ Payout
(% of
Oppty)β % of
Targetβ Payout
(% of
Oppty)β % of
Targetβ Payout
(% of
Oppty)β βΒ β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β $6.5Β billion Β β 85 % β 62.5 % β 100.0 % β 100.0 % β 100.7 % β 125 % β 95.2 % β 88.0 % Β $7.2Β billion Β β 85 % β 62.5 % β 100.0 % β 100.0 % β 100.7 % β 125 % β 101.6 % β 125.0 % Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 21.8% Β Β 85 % Β 62.5 % Β 100.0 % Β 100.0 % Β 100.7 % Β 125 % Β 93.0 % Β 82.5 % Β 28.5% Β Β 85 % Β 62.5 % Β 100.0 % Β 100.0 % Β 100.5 % Β 125 % Β 102.6 % Β 125.0 % Β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β 202 Β β 85 % β 62.5 % β 100.0 % β 100.0 % β 105.0 % β 125 % β 100.9 % β 104.3 % Β N/A Β β β Β β β Β β β Β β β Β β β Β β β Β β β Β β β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 215 Β Β 85 % Β 62.5 % Β 100.0 % Β 100.0 % Β 105.0 % Β 125 % Β 121.9 % Β 125.0 % Β 117 Β Β 85 % Β 62.5 % Β 100.0 % Β 100.0 % Β 105.0 % Β 125 % Β 86.3 % Β 65.6 % Β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β 62.1% Β β 95 % β 62.5 % β 100.0 % β 100.0 % β 105.0 % β 125 % β 91.3 % β 67.5 % Β 60.2% Β β 95 % β 62.5 % β 100.0 % β 100.0 % β 105.0 % β 125 % β 100.3 % β 101.5 % Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β $473Β million Β Β 90 % Β 62.5 % Β 100.0 % Β 100.0 % Β 103.0 % Β 125 % Β 102.8 % Β 123.1 % Β $674Β million Β Β 90 % Β 62.5 % Β 100.0 % Β 100.0 % Β 103.0 % Β 125 % Β 103.9 % Β 125.0 % Β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β 7.2% Β β 90 % β 62.5 % β 100.0 % β 100.0 % β 105.0 % β 125 % β 96.4 % β 86.6 % Β 9.3% Β β 90 % β 62.5 % β 100.0 % β 100.0 % β 105.0 % β 125 % β 103.4 % β 117.2 %
β(1) all of the income statement measures are calculated at weighted averagebudgeted exchange rates for the measurement period. Measurement of performance, for each of the metrics, is subject to certain automatic adjustments described above in "AnnualβAnnual Incentive Bonus."Demsey,ProuvΓ©, and Mr.Β ProuvΓ©Demsey were each assigned Business Unit Strategic Objectives for fiscal 20172022 that accounted for theΒ percentages of the individual'sindividualβs aggregate bonus opportunity target indicated below.(a)StrategyΒ β Continue cascading the corporate strategy and its key elements throughout the organization. Translate eachβ β β β Unit's strategy into action items and execute against them.(b)Collaboration and Talent DevelopmentΒ β Championing and leading collaborative behavior and the development of talent in the organization, integrating our inclusion and diversity strategy. Align our organizations for speed and efficiency.(c)Key Business Capability Building/Business TransformationΒ β Identifying and taking action on developing capabilities for continuous improvement related to the key operational and financial building blocks that will impact sustainable growth and profitability and the effective use of resources.β β β β β β β β β β β β 2017,2022, the Executive Chairman, the President and Chief Executive Officer,CEO, and the Executive Vice PresidentΒ β Global Human Resources,EVP HR, with appropriate input from other employees, reviewed the actions taken by each Group President andexecutive officers including the Executive Vice President and Chief Financial OfficerNEOs, as applicable, in connection with the Business Unit Strategic Objectives and, based on that assessment, recommended the payoutΒ percentages shown in the table below (with a maximum of 125%118%). The assessment of these achievements and payouts were confirmed by the Committee in its business judgment. Beginning in fiscal 2018, the Committee eliminated the Global Brands Resultsmetric and instead will focus more on global or division Net Sales and NOP Margin depending on the executive. In addition, Inventory Management will be based solely on Days to Sell, and Productivity will be solely based on employee costs as a percent of net sales. Cost savings are covered by the NOP Margin goal.officer'sofficerβs Business Unit Multiplier depend upon the officer'sofficerβs position and responsibilities, as shown in the calculation of the Business Unit Multiplier below. The overall brand and region performance is a consolidationthe performance on the financial criteria discussed above for the relevant brands or geographies.Β Β Β Β Β Β Β Β For each NEO, the calculation of the individual'sFiscal 2022 EAIP Payout %Percentages for fiscal 2017, including both the Business Unit Multiplier (weighted accordingly)NEOsβ β β β β W. P. Lauder &
F. Fredaβ β T.T. Travis β β J. Hertzmark Hudis β β C. ProuvΓ© β β J. Demsey β β β β β β β % of
Targetβ β Actual
payout %β β % of
Targetβ β Actual
payout %β β % of
Targetβ β Actual
payout %β β % of
Targetβ β Actual
payout %β β % of
Targetβ β Actual
payout %β β β β Functions Average β β β β 33.3% β β β β β 115.0% β β β β β 10.0% β β β β β 115.0% β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Business Unit Strategic Objectives β β β β β β β β β β β β β β β β 30.0% β β β β β 118.0% β β β β β 20.0% β β β β β 116.0% β β β β β 20.0% β β β β β 112.0% β β β β β 20.0% β β β β β 100.0% β β β β β Division Net Sales* β β β β 33.4% β β β β β 89.3% β β β β β 30.0% β β β β β 89.3% β β β β β 25.0% β β β β β 79.3% β β β β β 25.0% β β β β β 85.8% β β β β β 25.0% β β β β β 96.7% β β β β β Division NOP Margin* β β β β 33.3% β β β β β 118.0% β β β β β 30.0% β β β β β 118.0% β β β β β 25.0% β β β β β 89.7% β β β β β 25.0% β β β β β 94.8% β β β β β 25.0% β β β β β 118.0% β β β β β Online Sales* β β β β β β β β β β β β β β β β β β β β β β β β β β β β 10.0% β β β β β 73.3% β β β β β 10.0% β β β β β 69.7% β β β β β 10.0% β β β β β 66.9% β β β β β Online NOP Margin* β β β β β β β β β β β β β β β β β β β β β β β β β β β β 10.0% β β β β β 89.1% β β β β β 10.0% β β β β β 96.5% β β β β β 10.0% β β β β β 83.0% β β β β β Total Company Sales* β β β β β β β β β β β β β β β β β β β β β β β β β β β β 5.0% β β β β β 89.3% β β β β β 5.0% β β β β β 89.3% β β β β β 5.0% β β β β β 89.3% β β β β β Total Company NOP Margin* β β β β β β β β β β β β β β β β β β β β β β β β β β β β 5.0% β β β β β 118.0% β β β β β 5.0% β β β β β 118.0% β β β β β 5.0% β β β β β 118.0% β β β β β Business Unit Payout (a) β β β β 100.0% β β β β β 107.4% β β β β β 100.0% β β β β β 109.1% β β β β β 100.0% β β β β β 92.1% β β β β β 100.0% β β β β β 94.5% β β β β β 100.0% β β β β β 99.0% β β β β β Corporate Multiplier (b) β β β β β β β β β β 124.3% β β β β β β β β β β β 124.3% β β β β β β β β β β β 124.3% β β β β β β β β β β β 124.3% β β β β β β β β β β β 124.3% β β β β β EAIP Payout % (a)Β x (b) β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β the Corporate Multiplier, is as follows:Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β W. P. LauderΒ &
F. FredaΒ T.T. TravisΒ J. DemseyΒ C. Prouvé β Β β % of
Targetβ Actual
payout %β % of
Targetβ Actual
payout %β % of
Targetβ Actual
payout %β % of
Targetβ Actual
payout %Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β β 75 % β 94.9 % β 50 % β 94.9 % β 15 % β 94.9 % β 15 % β 94.9 % Β Β Β 25 % Β 113.3 % Β 10 % Β 113.3 % Β 5 % Β 113.3 % Β 5 % Β 113.3 % Β Β β β Β β β Β β 30 % β 121.0 % β 20 % β 107.0 % β 20 % β 121.0 % Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 20 % Β 88.0 % Β 20 % Β 125.0 % Β Β β β Β β β Β β β Β β β Β β 20 % β 82.5 % β 20 % β 125.0 % Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 10 % Β 96.7 % Β 10 % Β 85.0 % Β Β β β Β β β Β β 10 % β 118.1 % β 10 % β 114.9 % β 10 % β 123.4 % Β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β Β 100 % Β 99.5 % Β 100 % Β 106.9 % Β 100 % Β 96.5 % Β 100 % Β 114.9 % Β Β β β Β β 114.0 % β β Β β 114.0 % β β Β β 114.0 % β β Β β 114.0 % Β Β Β Β Β Β 113.4 % Β Β Β Β 121.8 % Β Β Β Β 110.0 % Β Β Β Β 131.0 % Β
β(1)Net SalesDivision NOP Margin are calculated at weighted average exchange rates at the time of measurement. Measurement of performance for each of the metrics is subject to certain automatic adjustments described above in "AnnualβAnnual Incentive Bonus."Β Β Β Β Β Β Β Β For more information about the potential bonus opportunities of our NEOs for fiscal 2017 and the actual payouts made in respect of fiscal 2017 performance, see "Grants of Plan-Based Awards in Fiscal 2017" and "Summary Compensation Table.""ShareβShare Incentive Plan"Planβ) to be of key importance in aligning executives with our long-term goals and rewarding them for performance. The awards also provide an incentive for continued employment with us. The Subcommittee typically makes equity-based compensation awards to our executive officers at its regularly scheduled meeting during the first quarter of each fiscal year. We generally grant certain executive officers a combination of PSUs,β β β β The Subcommittee typically makes equity-based compensation awards to our executive officers at its regularly scheduled meeting during the first quarter of each fiscal year. There is no relationship between the timing of the grants of equity-based awards and our release of material non-public information.20172022 is weighted equally among PSUs (at target), stock options, and RSUsβββββreflecting, in the business judgment of the Subcommittee, a balance among motivating and retaining executive officers, rewarding performance, mitigating risk, and helping executive officers increase their equity ownership to further align their interests with those of our stockholders. Such allocation may change depending upon any supplementaladditional (non-annual) grants made to executive officers.Β Β Β Β Β Β Β Β No specific weightings were used to determine the amounts of the equity-based compensation. The Subcommittee applied an individual performance factor to the target equity opportunity for each executive officer. TheFor fiscal 2022, the performance factors ranged from 115%Β β 130%100% to 125% of target. As with the amount of equity-based compensation granted, the allocation among the equity-based compensation elements are compared with practices of the peer group companies (see "CompensationβCompensation Planning and the Decision Making ProcessβββββPeer Group"Groupβ below) to ensure they are competitive and appropriate. typically represent approximately one-third of the grant date value of the annual equity-based compensation granted to executive officers. PSUs are generally rights to receive shares of our ClassΒ A Common Stock if certain Company-wide performance criteria are achieved during a three-year performance period. PSUs are expressed in terms of opportunities, and each opportunity is based on a particular financial metric that is considered important in achieving our overall long-term financial goals.atafter the end of the performance period. To the extent shares are paid out on a PSU award, the cash amount paid is equal to the dividends declared per share over the performance period times the number of shares paid out. The target amount of a PSU award represents the aggregate payout if the performance of all opportunities equal 100% of the related target performances. AnFor the annual PSU grants in fiscal 2022, an above-target payout can be achieved under a particular opportunity if the performance associated with such opportunity exceeds 100% of the target, up to a maximum of 150%160% of target. For the annual PSU grants in fiscal 2023, which were made in SeptemberΒ 2022, the maximum is 160% of target. Failure to achieve the pre-established minimum threshold amount would result in no payout being made under the opportunity.described abovesuch as changes in "Annual Incentive Bonus."accounting principles, goodwill and other intangible asset impairments, the impact of unplanned completed business acquisition activity, restructuring and other activities, discontinued operations, and certain non-recurring income/expenses. Payout of PSUs is contingent on the Company achievingβ β β β 2017,2022, the payout of the PSUs granted in SeptemberΒ 20162021 is based solely on achievement of the financial measures described below in "Fiscal 2017βFiscal 2022 PSU Grants."20152020 PSU Grants. The PSU targets for the three-year period ended JuneΒ 30, 20172022 were based on compound annual growth rates ("CAGR"(βCAGRβ) in Company-wide Net Sales, Diluted EPS, and ROIC, weighted equally. Each 1%2% increase in performance over the threshold results in a 5%10% increase in associated payout for Net Sales and 31/3%3% increases in associated payouts for Diluted EPS and ROIC up to the target performance levels. Each 1%0.4% increase in performance above target results in 37.9%, 12.1%, and 16.9%10% increases in associated payouts for Net Sales, Diluted EPS, and ROIC, respectively.ROIC. Performance above maximum results in a payout of 150% of target opportunity.thatwhich were paid out after the end of fiscal 2017,in SeptemberΒ 2022 (fiscal 2023), the aggregate payout of the three measures, weighted equally, was 81.3%119.4%. Specifically, ROIC and Diluted EPS achieved payouts of 63.8% and 73.0%, respectively, which was between minimum and threshold, and Net Sales achieved a payout of 107.2%, which was between target and maximum. The table below summarizes the measures and corresponding payouts.β β β β β
2020
through
Fiscal
2022
Targetβ β Threshold β β Target β β Maximum β β
Performance(2)β β β β β β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β β β Net Sales (CAGR)(1) β β β β 7.2% β β β β β 90.0% β β β β β 50.0% β β β β β 100.0% β β β β β 100.0% β β β β β 102.5% β β β β β 150.0% β β β β β 57.5% β β β β β 58.3% β β β β β Diluted EPS (CAGR) β β β β 9.6% β β β β β 85.0% β β β β β 50.0% β β β β β 100.0% β β β β β 100.0% β β β β β 103.9% β β β β β 150.0% β β β β β 116.7% β β β β β 150.0% β β β β β ROIC (CAGR) β β β β 0% β β β β β 85.0% β β β β β 50.0% β β β β β 100.0% β β β β β 100.0% β β β β β 101.9% β β β β β 150.0% β β β β β 103.5% β β β β β 150.0% β β β β β Aggregate Payout β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β β Fiscal
2015
throughThresholdΒ TargetΒ MaximumΒ Actual
Performance(1)Β Β β Fiscal
2017
Targetβ % of
Targetβ Payout
(% of
Oppty)β % of
Targetβ Payout
(% of
Oppty)β % of
Targetβ Payout
(% of
Oppty)β % of
Targetβ Payout
(% of
Oppty)β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β β 6.60 % β 90 % β 50 % β 100 % β 100 % β 101.3 % β 150 % β 100.2 % β 107.2 % Β Β
8.70
%Β
85
%Β
50
%Β
100
%Β
100
%Β
104.1
%Β
150
%Β
91.9
%Β
73.0
%Β
β
β4.10
%
β
85
%
β
50
%
β
100
%
β
100
%
β
103.0
%
β
150
%
β
89.2
%
β
63.8
%Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β
81.3
%
(1)(1)20152020 grants these include(which reflect the impact, where appropriate, of accelerated orders associated with the fiscal 2014 SMI rollout, the Venezuela remeasurement charges,tax, currency and non-controlling interest), these include charges associated with restructuring and other activities related to the Company'sCompanyβs Leading Beauty Forward and Global Technology InfrastructurePost COVID Business Acceleration initiatives, goodwill, and other intangible, and long-lived asset impairments, changes in fair valuegain on previously held equity method investment, DECIEM stock option expense, and incremental net losses associated with the acquisitions of contingent consideration,Dr.Β Jart+ and the China deferred tax asset valuation allowance reversal.DECIEM.20172022 Annual PSU Grants. As explained above, the fiscal 2022 annual PSU grants have three performance measures: Net Sales (weighted at 40%), Diluted EPS (weighted at 40%), and ROIC (weighted at 20%). The maximum payout is 160%. In setting fiscal 2022 annual PSU grant targets, we considered the continued effect and uncertainty of the COVID-19 pandemic on our business. The targets for the PSU opportunities and corresponding payouts for PSUs granted in fiscal 20172022 for the three-year period ending JuneΒ 30, 20192024 are based on CAGR, in Company-wide Net Sales, Diluted EPS, and ROIC, weighted equally, as follows:β β β β β
2022
through
Fiscal
2024
Targetβ β β β Target β β Maximum β β β β β β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β % of
Targetβ β Payout
(% of
Oppty)β β β β Net Sales (CAGR)(1) β β β β 7.6%βββ9.6% β β β β β β 90.0% β β β β β 50.0% β β β β β 100.0% β β β β β β 100.0% β β β β β 107.6% β β β β β 160.0% β β β β β Diluted EPS (CAGR) β β β β 5.9%βββ8.0% β β β β β β 85.0% β β β β β 50.0% β β β β β 100.0% β β β β β β 100.0% β β β β β 115.4% β β β β β 160.0% β β β β β ROIC (CAGR) β β (7.5)% β β β β 85.0% β β β β β 50.0% β β β β β 100.0% β β β β β β 100.0% β β β β β 107.7% β β β β β 160.0% β β β Β β Fiscal
2017
throughThreshold(2)Β TargetΒ MaximumΒ Β β Fiscal
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Targetβ % of
Targetβ Payout
(% of
Oppty)β % of
Targetβ Payout
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Oppty)β % of
Targetβ Payout
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Oppty)β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β Β β 6.80 % β 90 % β 50 % β 100 % β 100 % β 100.9 % β 150 % Β Β
9.20
%Β
85
%Β
50
%Β
100
%Β
100
%Β
101.9
%Β
150
%Β
β
β4.60
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β
85
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β
50
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β
100
%
β
100
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β
101.5
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β
150
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(1)(1)"Annual Incentive Bonus."βPerformance Share Units.β(2)β β β β (3)Target ROIC decrease primarily reflects the impact of higher levels of reported cash and short- and long-term investments from earnings generated by our international operations.Β Β Β Β Β Β Β Β The goals above werethe conditions that existedexist at the startbeginning of fiscal 2017.each grant period. Multiple factors influence the setting of underlying measures including the anticipated Company-specific goals and objectives as well as macroenvironmental influences for the three-year performance period. Each grant period targets are set independent of other outstanding grants. We believe that the targetscomponents underpinning each grant are reasonably aggressive when set were reasonably aggressive.PSU(non-annual) PSUs and other Performance-Based Long-Term Equity Grants. From time to time, the Subcommittee makes grants of additional PSUs and other performance-based long-term awards to executive officers. For information relatingOn SeptemberΒ 2, 2021 (fiscal 2022), the Subcommittee granted Ms.Β Travis an additional (non-annual) PSU award for 14,533 shares, valued at $5.0Β million on the date of grant. This award vests 100% on JuneΒ 30, 2025, assuming continued employment through such date, and generally provides that vesting is contingent on the Company achieving positive Cumulative Operating Income during the performance period (JulyΒ 1, 2021 through JuneΒ 30, 2025). This award is intended to further align Ms.Β Travisβs interests with those of our stockholders, incentivize her to remain with the Company at least through JuneΒ 30, 2025, and motivate her continued stewardship of our business over the longer term. The shares of ClassΒ A Common Stock underlying this award are not intended to be delivered to Ms.Β Travis until SeptemberΒ 2, 2025, subject to the PSU grantedawardβs terms and conditions. If Ms.Β Travis voluntarily resigns or retires prior to Mr.Β Freda in fiscal 2016, as well as the one made to him in fiscal 2013, see "CEO Compensation" below and "Outstanding Equity Awardsat JuneΒ 30, 2017." The additional PSU grant made to John Demsey on JanuaryΒ 28, 2016 (fiscal 2016) is reflected in "Outstanding Equity Awards at JuneΒ 30, 2017."Β Stock Annual stock options typically represent approximately one-third of the grant date value of the annual equity-based compensation granted to executive officers. We believe that stock options are performance-based because the exercise price is equal to the closing price of the underlying ClassΒ A Common Stock on the date the option is granted. Under our Share Incentive Plan, the exercise price of options cannot be lower than suchthe closing price.price of our ClassΒ A Common Stock on the date the option is granted. Despite the value attributed on the date of option grant for accounting purposes, value is realized by the executive officer only to the extent that the stock price exceeds suchthe exercise price during the period in which the executive officer is entitled to exercise the options and he or shethe officer exercises them. Options granted to our executive officers generally become exercisable in three equal installments approximately 16Β months, 28Β months, and 40Β months after the date of grant, and expire tenΒ years from the grant date. typically represent approximately one-third of the grant date value of the annual equity-based compensation granted to executive officers. RSUs are the right to receive shares of our ClassΒ A Common Stock over a period of time. RSUs are granted to executive officers to serve as a retention mechanism and to help them build their equity ownership. RSUs are accompanied by dividend equivalents that are paid in cash;cash at the time an RSU vests, thevests. The cash amount paid to the executive officer is equal to the dividends declared per share between the grant date and the vesting date multiplied by the number of shares paid out. RSUs do not have any voting rights with respect to the underlying shares of ClassΒ A Common Stock. RSUs granted to our executive officers generally vest in three equal installments approximately 14Β months, 26Β months, and 38Β months from the date of grant.makes grants of additional (non-annual) RSUs to executive officers. Such RSUs generally vest in their entirety after an extended vesting period and are forfeited if the executive officer retires before the vesting date. On SeptemberΒ 6, 20162, 2021 (fiscal 2017)2022), the Subcommittee granted Tracey T. Travis,Jane Hertzmark Hudis, Executive ViceGroup President, and Chief Financial Officer, an additional (non-annual) RSU award for 16,76610,173 shares, valued at $1.5$3.5Β million on theβ β β β OctoberΒ 31, 2019,NovemberΒ 1, 2024 assuming Ms.Β Travis'sher continued employment through such date. ItThis award is intended to recognizefurther align Ms.Β Hudisβs interests with those of our stockholders and motivate her continued stewardship and progression of our business over the importance and complexities of her responsibilities and to provide additional incentive for her to remain in her role for the duration of the award.2017.2022. As statednoted above, target award levels and actual grants of equity made to executive officers are determined by taking into account many factors, including an assessment of recent performance and expected future contributions. For the Executive Chairman and the President and Chief Executive Officer,CEO, this determination is made by the Subcommittee; for the remaining executive officers, a recommendation is made by the executive officer'sofficerβs immediate manager, and the actual grant is approved by the Subcommittee. Fiscal 2017 annual equity grants were awarded in September 2016; the resultingThe equity grantΒ percentages awarded to our NEOs in fiscal 2017 were based on target grant levels and an assessment of each officer'sofficerβs performance and expected future contributions. Fiscal 2022 annual equity grants were awarded in SeptemberΒ 2021. See "Grantsalso βGrants of Plan-Based Awards in Fiscal 2017"2022β and "SummaryβSummary Compensation Table."Freda has continuedFredaβs annual base salary rate was increased to demonstrate outstanding performance and leadership as our Chief Executive Officer. Since becoming President and Chief Executive Officer in July 2009, he has led the development and implementation of our long-term strategy. Between that time and JuneΒ 30, 2017, we have (i)Β achieved TSR of 549%, placing us among the top 12% of S&PΒ 500 companies (the TSR of the S&PΒ 500 Index was 212%); and (ii)Β increased our market capitalization by $29Β billion to $35Β billion.Β Β Β Β Β Β Β Β In recognition of Mr.Β Freda's leadership and expected future contributions, as well as our strong multi-year performance, the Committee and the Subcommittee increased Mr.Β Freda's total direct annual compensation for fiscal 2017 by 4.0% to $15.1Β million. Mr.Β Freda's equity target increased to$8.5$2.1Β million (from $7.9$2.0Β million), his base salary remained at $1.9Β million, and his target bonus opportunity remained at $4.7Β million.Β Β Β Β Β Β Β Β In settingwas increased to $5.25Β million (from $5.0Β million), and his annual equity target compensation forwas increased to $11.86Β million (from $11.13Β million). Mr.Β Fredaβs equity grants in fiscal 2017, the Committee2022 were comprised ofβannual PSU, RSU, and Subcommittee also considered additional equity awards that were made to Mr.Β Freda in prior years. This primarily includes the PSU grant made to him in September 2015, which has a target payout of 387,848 shares and was valued at $30Β million. The award is designed to be earned in tranches at the end of June 2018, 2019, and 2020 with no shares being delivered to Mr.Β Freda until the end of June 2021, 2022, and 2023, respectively. This award reflected the Company's strong performance, the importance of ensuring the sustainability of the Company's performance and its longer term success, and the desire to retain Mr.Β Freda and further align his interests with the interests of our stockholders. The Subcommittee also wanted to recognize and provide an incentive for sustainable and effective stewardship of the Company's brands, talent base, and reputation over that extended period of time. Fiscal 2017 was also the final year for the PSU based on TSR that was granted to Mr.Β Freda at the start of fiscal 2013. This resulted in a payout of 30,267 shares of the Company's ClassΒ A Common Stock on AugustΒ 23, 2017. During the five-year performance period, the Company's stock price increased by more than 77%. Under the terms of the grant, the number of shares payable for each tranche depended on the TSR of the ClassΒ A Common Stock on the New York Stock Exchange for the performance period, relative to that of the S&PΒ 500 Companies over the same period. For the five-year performance period ended JuneΒ 30, 2017, the Company's TSR was ranked at the 46thΒ percentile. Given the rigorous performance scale for the award, this TSR rank resulted in a payout of approximately 55.8% of the target. Upon payout of the shares, dividend equivalents in connection with the shares earned by Mr.Β Freda were paid out in cash in the amount of $158,599. See also "Outstanding Equity Awards at JuneΒ 30, 2017."Freda'sFredaβs total compensation, as disclosed in the "SummarySummary Compensation Table," shows significant fluctuations year-over-year due to the value and timing of additional (non-annual) equity awards he has received in the past in addition to his annual equity grants. These fluctuations are attributable to applicable disclosure rules whichthat require that we report the total value of equity grants on the grant date rather than over the life of the award. When the additional (non-annual) equity awards were granted, the Subcommittee considered the impact of those awards on an annualized basis. The table below reflects the amounts shown for Mr.Β Freda for each year in the "Stock Awards"βStock Awardsβ column in the Summary Compensation Table adjusted to (a)Β deduct the aggregate grant date fair value of the additionalMarchΒ 2021 PVU and PSU Grants (in total, $40Β million) from fiscal 2021 and (b)Β instead include the amounts relating to those awards from the year in which they were granted and instead includes the amountsother prior non-annual awards that were expensed for accounting purposes in each fiscal year relating to non-annual awards,shown in the Summary Compensation Table, including the amounts expensed for such awards granted prior to fiscal 20152020 as disclosed in previous proxy statements. As adjusted, the amounts shown for "Stock Awards"Mr.Β Freda for βStock Awardsβ and "Total"βTotalβ in the Summary Compensation Table for Mr.Β Freda would be as follows.follows:β β β β β Stock Awards ($000s) β β Total ($000s) β β β β Fiscal Year β β Annualized
Stock Awardsβ β Grant Date Fair
Value as Reported
in Summary
Compensation
Tableβ β Including
Annualized
Stock Awardsβ β As Reported
in Summary
Compensation
Tableβ β β β 2022 β β β $ 30,002 β β β β $ 14,825 β β β β $ 45,598 β β β β $ 25,480 β β β β β 2021 β β β β 21,220 β β β β β 50,430 β β β β β 36,787 β β β β β 65,997 β β β β β 2020 β β β β 17,931 β β β β β 8,750 β β β β β 27,605 β β β β β 18,424 β β β Β Stock Awards ($000s)Β Total ($000s)Β Β β Annualized
Stock Awards(1)β Grant Date Fair
Value as Reported
in Summary
Compensation
Tableβ Including
Annualized
Stock Awards(1)β As Reported
in Summary
Compensation
TableΒ β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β Β $ 16,752 Β $ 7,349 Β $ 28,386 Β $ 18,983 Β Β Β 16,351 Β Β 36,847 Β Β 27,873 Β Β 48,369 Β Β β 10,874 Β β 6,250 Β β 21,305 Β β 16,681 Β (1)See "Potential Payments upon Termination of Employment or Change of ControlΒ β Events of Termination under the Employment Agreements and under the Share Incentive Plan" for the termination provisions of the annual PSU and RSU grants.20182023 Compensation Decisions for the CEO. For fiscal 2018,2023, Mr.Β Freda'sFredaβs annual base salary remained unchangedremains at $1.9$2.1Β million, his target incentive bonus opportunity washas been increased to $4.9$5.78Β million (from $5.25Β million), and his target equity opportunity washas been increased to $8.88$12.5Β million resulting in a target total compensation increase of 4.0%(from $11.86Β million). In setting Mr.Β Fredaβs compensation for fiscal 2023, the Committee and Subcommittee considered additional equity awards that were made to him in priorΒ years. In SeptemberΒ 2017,2022 (fiscal 2023), we granted Mr.Β Freda annual equity-based compensation with an aggregate value of approximately $11.99$15.63Β million, comprised of PSUs with a target payout of 37,01721,159 shares of ClassΒ A Common Stock, stock options for 135,59764,405 shares of ClassΒ A Common Stock with an exercise price ofββ$107.95$246.15 per share, and RSUs for 37,01721,159 shares of ClassΒ A Common Stock. Theseβ β β β "SummaryβSummary Compensation Table"Tableβ and "GrantsβGrants of Plan-Based Awards"Awardsβ for fiscal 2023.![[MISSING IMAGE: tm2222590d1-tbl_period4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2222590d1-tbl_period4c.jpg)
β β β β β β β β β Service Period β β Performance Period β β Share Payment Date β β β β First Tranche
(129,282 shares)β β JulyΒ 1, 2015βββJuneΒ 30, 2018 β β JulyΒ 1, 2015βββJuneΒ 30, 2018 β β β β β β Second Tranche
(129,283 shares)β β JulyΒ 1, 2015βββJuneΒ 30, 2019 β β JulyΒ 1, 2016βββJuneΒ 30, 2019 β β β β β β Third Tranche
(129,283 shares)β β JulyΒ 1, 2015βββJuneΒ 30, 2020 β β JulyΒ 1, 2017βββJuneΒ 30, 2020 β β β β β β β β β β β β β Service Period β β Performance Period β β
Payment Date*β β β β First Tranche
(97,970 shares)β β JanuaryΒ 1, 2018βββββJuneΒ 30, 2021 β β JulyΒ 1, 2018βββββJuneΒ 30, 2021 β β SeptemberΒ 3, 2024 β β β β Second Tranche
(97,970 shares)β β JanuaryΒ 1, 2018βββββJuneΒ 30, 2022 β β JulyΒ 1, 2018βββββJuneΒ 30, 2022 β β SeptemberΒ 3, 2024 β β β β β β β β β β β β β β β β β β β Number
of
Shares
per
Trancheβ β Stock
Price
Goal
(per
share)β β Service Period β β Performance Period
for Stock Price
Goalβ β Performance Period
for Cumulative
Operating Income
Goalβ β
Delivery Date(4)β β β β First Tranche β β β β 27,457 β β β β $ 323.03(1) β β β MarchΒ 11, 2021βββ
JuneΒ 30, 2024β β MarchΒ 11, 2021βββ
JuneΒ 30, 2024β β JulyΒ 1, 2021βββ
JuneΒ 30, 2025β β SeptemberΒ 2, 2025 β β β β Second Tranche β β β β 28,598 β β β β $ 333.21(2) β β β MarchΒ 11, 2021βββ
JuneΒ 30, 2024β β MarchΒ 11, 2021βββ
JuneΒ 30, 2024β β JulyΒ 1, 2021βββ
JuneΒ 30, 2025β β SeptemberΒ 2, 2025 β β β β Third Tranche β β β β 29,872 β β β β $ 343.61(3) β β β MarchΒ 11, 2021βββ
JuneΒ 30, 2024β β MarchΒ 11, 2021βββ
JuneΒ 30, 2024β β JulyΒ 1, 2021βββ
JuneΒ 30, 2025β β SeptemberΒ 2, 2025 β β β β β β β β Service Period β β Performance Period β β Share
Delivery Date*β β β β MarchΒ 11, 2021βββJuneΒ 30, 2024 β β JulyΒ 1, 2021βββJuneΒ 30, 2025 β β SeptemberΒ 2, 2025 β β β β β β Other NEOsWilliam P. Lauder, Tracey T. Travis, and Jane Hertzmark Hudis2018, there were no changes to2023, Mr.Β Lauder's compensation. HisLauderβs annual base salary is $1.5remains at $1.58Β million, his target incentive bonus opportunity is $3.0has been increased to $3.54Β million (from $3.26Β million), and his target equity opportunity is $2.0Β million.has been increased to $2.9Β million (from $2.74Β million). In SeptemberΒ 2017,2022 (fiscal 2023), we granted himMr.Β Lauder equity-based compensation with an aggregate value of approximately $2.70$3.63Β million, comprised of PSUs with a target payout of 8,3374,909 shares of ClassΒ A Common Stock, stock options for 30,54114,942 shares of ClassΒ A Common Stock with an exercise price ofβ $107.95$246.15 per share, and RSUs for 8,3374,909 shares of ClassΒ A Common Stock.2018,2023, we increased Ms.Β Travis'sTravisβs annual base salary to $980,000,$1.20Β million (from $1.15Β million), her target incentive bonus opportunity to $1.2$1.58Β million (from $1.52Β million), and her target equity opportunity to $3.2$4.94Β million resulting in a target total compensation increase of 4.8%(from $4.61Β million). In SeptemberΒ 2017,2022 (fiscal 2023), we granted herMs.Β Travis annual equity-based compensation with an aggregate value of approximately $4.21$6.08Β million, comprised of PSUs with a target payout of 13,0058,228 shares of ClassΒ A Common Stock, stock options for 47,63825,048 shares of ClassΒ A Common Stock with an exercise price ofββ$107.95$246.15 per share, and RSUs for 13,0058,228 shares of ClassΒ A Common Stock.β β β β 2018,2023, we increased Mr.Β Demsey'sMs.Β Hudisβs annual base salary to $1.16$1.34Β million his(from $1.31Β million), her target incentive bonus opportunity to $3.06$2.07Β million (from $2.00Β million), and hisher target equity opportunity to $4.7$3.74Β million resulting in a target total compensation increase of 1.9%(from $3.46Β million). In SeptemberΒ 2017,2022 (fiscal 2023), we granted himMs.Β Hudis equity-based compensation with an aggregate value of approximately $5.74$4.56Β million, comprised of PSUs with a target payout of 17,7296,172 shares of ClassΒ A Common Stock, stock options for 64,94018,789 shares of ClassΒ A Common Stock with an exercise price ofβ $107.95$246.15 per share, and RSUs for 17,7296,172 shares of ClassΒ A Common Stock.Β Β Β Β Β Β Β Β For fiscal 2018, we increased Mr.Β ProuvΓ©'s base salary These grants reflect the application of an individual performance factor to $1.1Β million, his target incentive bonus opportunity to $2.48Β million, and histhe target equity opportunity to $3.8Β million, resulting in a target total compensation increase of 4.0%. In September 2017, we granted him equity-based compensation with an aggregate value of approximately $4.88Β million, comprised of PSUs with a target payout of 15,076 shares of ClassΒ A Common Stock, stock optionsapproved for 55,229 shares of ClassΒ A Common Stock with an exercise price of $107.95 per share, and RSUs for 15,076 shares of ClassΒ A Common Stock.Decision MakingDecision-Making Processtalent. We believetalent and that we have few direct competitors that are publicly traded in the United States. Therefore, the Committee has selected a mix of primarily consumer products and consumer discretionary companies to ensure the group includes companies of comparable size and business model to us. The Committee refers to the peer group data when considering compensation levels and the allocation of compensation elements for executive officers. The2017 was the same peer group used in fiscal 2016 except that Coty has been added because of its acquisition of certain beauty brands. β’Avon Products β’L Brands β’Clorox β’PepsiCo β’ Colgate-Palmolive β’ ProcterΒ & Gamble β’Coty β’Ralph Lauren β’The Gap β’Revlon β’ International FlavorsΒ & Fragrances β’ Starbucks β’ JohnsonΒ & Johnson β’ TiffanyΒ &Β Co.53rd66thΒ percentile relative to thethis peer group, using each company'scompanyβs most recently completed fiscal year ended on or prior to JuneΒ 30, 2017.β β β β Consulting Group ("Semler Brossy") as its consultant for executive compensation. The Committee determined that Semler Brossy is free of conflicts of interest. The consultant reports directly to the Committee and works with the Committee (and the Subcommittee) and management to, among other things, provide advice regarding compensation structures in general and competitive compensation data. The consultant also reviews information prepared by management for the Committee or Subcommittee. All of the decisions with respect to determining the amount or form of executive compensation under our executive compensation programs are made by the Committee or Subcommittee alone and may reflect factors and considerations other than the information and advice provided by the consultant. As noted in βDirector Compensation,β Semler Brossy provides advice and guidance to the Nominating and ESG Committee regarding non-employee director compensation. No other services were provided by Semler Brossy to the Committee, Subcommittee, or Company.President and Chief Executive Officer,CEO, and the Executive Vice PresidentββofβββGlobal Human Resources (the "EVP HR"β β β β the executive officers'their roles and responsibilities, and the general performance of the Company and the various businessΒ units. TheThese three executive officers providing support take directions from and bring suggestions to the Committee and Subcommittee. They suggest performance measures and targets for each of the executive officers under the EAIP and for PSUs. They also make suggestions regarding terms of employment agreements. The final decisions regarding salaries, bonuses (including measures, targets, and amounts to be paid), equity grants, and other compensation matters related to executive officers are made by the Committee or Subcommittee, as the case may be. The EVP HR and the human resources staff work with the Executive Vice President and General Counsel, the legal staff, the Executive Vice President and Chief Financial Officer, and the finance staff to support the Committee and Subcommittee.Β Β Β Β Β Β Β Β Benefits. We determine benefits for executive officers by the same criteria applicable to the general employee population in the location where the executive officer is situated except as noted below. In general, benefits are designed to provide protection to the executiveexecutives and his or her familytheir families in the event of illness, disability, or death and to provide retirement income. The benefits are important in attracting and retaining employees and to mitigatemitigating distractions that may arise relating to health care, retirement, and similar issues.matters. The NEOs are entitled to the following two Company-paid benefits that are not generally available to the employee population: (a)Β for all the NEOs, supplemental executive life insurance with a face amount ofβ$5Β million ($10Β million for Mr.Β Freda) and (b)Β for the NEOs who were employees prior to JanuaryΒ 1, 2011,Mr.Β Lauder, Mr.Β ProuvΓ©, and Mr.Β Demsey, payment in lieu of a medical reimbursement program that was discontinued as ofsuch date.discontinued. For costs associated with such programs, see noteΒ (8)(11) to the "SummaryβSummary Compensation Table."limitedcertain perquisites to our executive officers. The perquisites includeare comprised ofβ(a) an annual perquisite allowance ofβ$20,000 for the Executive Chairman and the President and Chief Executive OfficerCEO and $15,000 for the other executive officers (other than the Lauders)Leonard A. Lauder and Ronald S. Lauder, who do not receive a perquisite allowance), which allowance can be used for certain specified expenses; (b)Β personal use of a company car (or cash in lieu of a company car); and, in the case of the CEO and the Executive Chairman, use of the Companyβs aircraft for personal travel in the interests of safety and security; (c)Β financial counseling costs up to $5,000 per year;year (other than Leonard A. Lauder and Ronald S. Lauder, who do not receive a financial counseling allowance); and (d)Β spousal or companion travel (with required approval, the executive'sexecutiveβs spouse, companion, or domestic partner may accompany the executive on up to two business trips per fiscal year). On occasion, we will provide expense reimbursements relating to relocations. We believe these perquisites helpIn addition, we make available to attract and retain executive officers and are more cost-effectiveour employees, including the NEOs, the ability to us than providing additional salary to the executive officers."RGA Plan"βRGA Planβ), the related The Estee Lauder Inc. Benefits Restoration Plan (the "Restoration Plan"βRestoration Planβ), and The Estee Lauder Companies 401(k) Savings Plan. Executive officers who have worked for our subsidiaries outside the United States may also be covered under plans covering such employees. As with other benefits, the retirement plans are intended to enable us to attract and retain employees. The plans provide employees, including executive officers, with an opportunity to plan for future financial needs during retirement. For a more detailed discussion on the retirement plans, see "PensionβPension Benefits."β β β β officer'sofficerβs incentive bonus compensation, subject to the requirements of SectionΒ 409A of the Internal Revenue Code ("(βSectionΒ 409A"409Aβ). The ability to defer is provided to participating executive officers as a way to assist them in saving for future financial needs with relatively little cost to us. The amounts deferred are a general obligation of ours, and the cash that is not paid currently may be used by us for our general corporate purposes. For a more detailed discussion ofinformation about deferred compensation, see the "NonqualifiedβNonqualified Deferred Compensation in Fiscal 20172022 and at JuneΒ 30, 2017" table and the accompanying narrative."PotentialβPotential Payments upon Termination of Employment or Change of Control,"β the NEOs'NEOsβ employment agreements (as well as agreements related to equity compensation awards) provide for certain payments and other benefits in the event theirthe officerβs employment is terminated under certain circumstances, such as retirement, disability, death, termination by us without cause, and termination by us for material breach of theirthe officerβs employment arrangement, or termination by the executive officer for "good reason"βgood reasonβ following a "changeβchange of control."family'sfamilyβs ownership of shares with substantial voting power, they have the ability to determine whether our companyCompany will undergo a "changeβchange of control."β In order to protect the interests of the executive officers and to keep them involved and motivated during any process that may result in a "changeβchange of control,"β outstanding annual PSUs contain provisions that accelerate vesting upon a "changeβchange in control."β Unvested RSUs, stock options, and other (non-annual) long-term equity awards including PSUs (i.e.and PVUs (e.g., the PSU and PVU granted to Mr.Β Freda on MarchΒ 11, 2021, the PSU granted toin fiscal 2016 for 387,848 shareson FebruaryΒ 14, 2018, and the PSU granted to Mr.Β DemseyFreda on JanuaryΒ 28, 2016)SeptemberΒ 4, 2015 for 387,848 shares) contain provisions that provide for accelerated vesting, exercisability, or exercisabilitypayment after a "changeβchange of control"controlβ only if we terminate the executive officerofficerβs employment without cause or the executive officer terminates his or her employment for "goodβgood reason."β The executive employment agreements similarly provide such a "double trigger"βdouble triggerβ for other severance benefits.RSUs, and annual PSUsRSUs granted to executive officers who are retirement-eligible contain provisions that allow them to continue to participate in the longer-term success of the business following retirement. For example, to the extent the performance is achieved, a retireeβs annual PSUs will vest in accordance with the original vesting schedule. In addition, stock options become immediately exercisable upon retirement and are exercisable for the remainder of their ten-year terms. In addition, to the extent the performance is achieved, a retiree's annual PSUs will vest in accordance with the original vesting schedule. (which includes individuals who are not executive officers) competes with or otherwise conducts herself or himself in a manner adversely affecting the Company.Compliance PolicyΒ Β Β Β Β Β Β Β We are awareMatters the limitations on deductibility for income tax purposes of certain compensation in excess ofββ$1Β million per year paid to executive officers who are βcovered employeesβ under SectionΒ 162(m) of the PresidentInternal Revenue Code (βSectionΒ 162(m)β). Prior to the Tax Cuts and Chief Executive OfficerJobs Act (the βTCJAβ), performance-based compensation meeting specified requirements was exempt from this deduction limit. As a result of the TCJA, however, effective for the Company in fiscal 2019, compensation in excess ofβ$1Β million paid to our βcovered employeesβ under SectionΒ 162(m) is generally not tax deductible, even if such compensation is performance-based or paid following termination of employment. Under the TCJA, once an executive officer becomes a βcovered employee,β that individual will remain a βcovered employeeβ for all subsequentΒ years. The TCJA includes a transition rule under which compensation that would have been exempt from the deduction limitation priorβ β β β three highest paid officers other thanlimitations imposed by the Chief Financial Officer. While significant portions of the compensation program as it applied to such persons in fiscal 2017 were generally designed to take advantage of exceptions to SectionΒ 162(m), such as the "performance-based" exception for annual bonuses, PSUs, and stock options, certain non-deductible compensation elements, such as the RSUs and the portion of base salaries that exceeded $1Β million, were authorized. We consider tax deductibility to be important but not the sole or primary consideration in setting executive compensation. Accordingly,TCJA, the Committee and Subcommittee have the authority to approve and in specific situations have approved, the payment of compensation that may not be deductible when they believe such payments are in the best interests of stockholders.RequirementAs of JuneΒ 30, 2017, all executive officers, including each of the NEOs, met or exceeded the stock ownership guidelines applicable to them.own shares of the Company's Common Stock or hold unvested RSUs or vested PSUs, in each case in respect of the Company's Common Stock,have equity holdings with a value equal to or greater than thea specified multiple of his or herthe officerβs annual base salary. Any temporary salary set forth below.Executive OfficerMultiple of SalaryExecutive Chairman5President and Chief Executive Officer5Chief Financial Officer3Group Presidents3Other Executive Officers2Β Β Β Β Β Β Β Β For purposes of these guidelines, vested PSUs mean PSUs that are no longer subject to performance condition(s) but the underlying shares of Common Stock have not yet been delivered to the officer. Stock options (vested or unvested) and shares underlying outstanding PSUs still subject to performance condition(s) are not included in the officer's holdings. Shares of the Company's Common Stock held directly by the executive officer or by members of his or her immediate family or in entities controlled by immediate family members (including trusts for the benefit of immediate family members) are included in the officer's holdings. Ifβ β Executive Officer β β Required Multiple
of Salaryβ β β β Executive Chairman β β β β 8 β β β β β President and Chief Executive Officer β β β β 8 β β β β β Chief Financial Officer β β β β 4 β β β β β Group Presidents β β β β 4 β β β β β Other Executive Officers β β β β 3 β β β β β What Counts β β What Does Not Count β β β β β β β β β β Stock Options (vested or unvested) β β β β β β Unvested RSUs β β β β β β β β β β β β β β β β β β he or shesuch officer has until the third anniversary of the effective date of the salary increase to comply with the incremental change in ownership requirements. If an executive officer fails to achieve his or herthe requisite ownership level by the required deadline, then until such time as the ownership guidelinesβ β β β his or herthe officerβs ownership may fall below the required threshold. In such a case, if by the first anniversary of falling below the required threshold, such officer'sofficerβs holdings still do not meet the required threshold, then until such time as the ownership guidelines are achieved, the officer must continue to hold (a)Β at least 50% of the net after-tax shares of Common Stock received due to the vesting of RSUs, PSUs, or any other share unit and (b)Β 50% of the net after-tax shares of any stock option exercise. In addition, in settling bonus payouts under the EAIP for an Executive Officerexecutive officer who continues to be below the guidelines after the required deadline, the Compensation Committee may request that up to 50% of the bonus payout be settled in shares of the Company'sCompanyβs Common Stock or additional RSUs. our employees, including executive officers, and members of our Board of Directors from trading in Company securities while in possession of material, non-public information about the Company. In addition, underUnder this policy, certain individuals are prohibited from trading in Company securities during various times throughout the year known as "blackoutβblackout periods,"β and certain individuals must receive preclearance from the Legal Department before trading in Company securities.Β Β Β Β Β Β Β Β Wepreclearedapproved in advance by our Legal Department. WhileourCommon Stock are the underlying security, (iii)Β Outstanding Equity Grants, and (iv)Β to the extent not covered by the foregoing, any βequity securitiesβ β(as defined in SectionΒ 3(a)(11) of the Securities Exchange Act of 1934, as amended, and RuleΒ 3a-11-1 promulgated thereunder) that are issued by the Company or any subsidiary of the Company.held in brokerage margin accounts can be considered to be "pledged," we do not consider margin accounts to be subject to our preclearance policy. Asoptions, restricted stock unit (RSU) and performance stock unit (PSU) awards under the Companyβs incentive plans).β β β β JuneΒ 30, 2017, none of our executive officers held shares of our stock in margin accounts.Hedgingthe Company (for example, the Companyβs Insider Trading PolicyΒ Β Β Β Β Β Β Β We do not restrict transactions in and the Company's securities involving hedging or the use of derivative securities but require that such transactions be precleared by our Legal Department."clawback."βclawback.β Under the policy, recoupment would apply in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the applicable securities laws. Recoupment would apply to any current or former executive officer who received incentive compensation within the three-year period prior to the restatement, and the amount to be recouped would be the amount in excess of what the executive officer would have been paid under the restatement.Company'sCompanyβs Annual Report on Form 10-K for the year ended JuneΒ 30, 2017.β Compensation Committee β β Stock PlanΒ Subcommittee β Richard D. Parsons (Chair)Rose Marie BravoRose Marie Bravoβ Paul J. Fribourg Paul J. Fribourg (Chair)
Charlene Barshefsky
Richard F. ZanninoD. Parsons
Richard F. Zanninoβ β Charlene Barshefsky
Paul J. Fribourg
Richard F. Zanninoβ β β β β during the past three fiscal years for our βNamed Executive Officers,β consisting of our (a)Β ourΒ Chief Executive Officer, (b)Β our Chief Financial Officer, and (c)Β ourΒ three other most highly compensated executive officers serving at the end of our fiscal year ended JuneΒ 30, 2017 ("2022 (βfiscal 2017"2022β). The, and (d)Β John Demsey, Executive Group President, who retired from the Company on MarchΒ 4, 2022. Our fiscal year ended JuneΒ 30, 20162021 is referred to as "fiscal 2016,"βfiscal 2021,β and theour fiscal year ended JuneΒ 30, 20152020 is referred to as "fiscal 2015."βfiscal 2020.β See "CompensationβCompensation Discussion and Analysis"Analysisβ and other disclosures under "Executive Compensation"βExecutive Compensationβ for a description of the material factors necessary to an understanding of the information disclosed below.β β Name and
Principal Positionβ β Year β β
($)(6)β β
($)β β
Awards
($)(7)β β
Awards
($)(8)β β
Incentive
Plan
Compensation
($)(9)β β
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(10)β β
Compensation
($)(11)β β
($)β β β β
Executive Chairmanβ β β β 2022 β β β β $ 1,575,000 β β β β $ 0 β β β β $ 2,283,182 β β β β $ 1,141,841 β β β β $ 4,348,150 β β β β $ 200,014 β β β β $ 53,809 β β β β $ 9,601,996 β β β β β β 2021 β β β β β 1,250,000 β β β β β 0 β β β β β 2,545,632 β β β β β 1,272,609 β β β β β 4,512,650 β β β β β 376,289 β β β β β 69,480 β β β β β 10,026,660 β β β β β β 2020 β β β β β 1,375,000 β β β β β 0 β β β β β 2,000,086 β β β β β 999,917 β β β β β 1,516,050 β β β β β 1,005,723 β β β β β 61,783 β β β β β 6,958,559 β β β β β
President and Chief Executive Officerβ β β β 2022 β β β β β 2,100,000 β β β β β 0 β β β β β 9,883,468 β β β β β 4,941,572 β β β β β 7,013,150 β β β β β 974,688 β β β β β 567,178 β β β β β 25,480,056 β β β β β β 2021 β β β β β 1,666,667 β β β β β 0 β β β β β 50,429,620 β β β β β 5,215,140 β β β β β 7,278,500 β β β β β 685,266 β β β β β 721,792 β β β β β 65,996,984 β β β β β β 2020 β β β β β 1,833,333 β β β β β 0 β β β β β 8,750,030 β β β β β 4,375,020 β β β β β 2,445,250 β β β β β 773,432 β β β β β 246,862 β β β β β 18,423,928 β β β β β
Executive Vice President and Chief Financial Officerβ β β β 2022 β β β β β 1,150,000 β β β β β 0 β β β β β 14,883,692 β β β β β 1,920,773 β β β β β 2,061,850 β β β β β 84,388 β β β β β 35,927 β β β β β 20,136,630 β β β β β β 2021 β β β β β 990,000 β β β β β 0 β β β β β 3,956,044 β β β β β 1,978,065 β β β β β 2,054,250 β β β β β 93,865 β β β β β 60,274 β β β β β 9,132,498 β β β β β β 2020 β β β β β 1,045,000 β β β β β 0 β β β β β 5,280,101 β β β β β 1,639,995 β β β β β 829,700 β β β β β 172,073 β β β β β 40,015 β β β β β 9,006,884 β β β β β
Executive Group
Presidentβ β β β 2022 β β β β β 1,305,000 β β β β β 0 β β β β β 6,383,345 β β β β β 1,441,848 β β β β β 2,289,400 β β β β β 157,387 β β β β β 68,737 β β β β β 11,645,717 β β β β β
Group President
β Internationalβ β β β 2022 β β β β β 1,183,875 β β β β β 0 β β β β β 3,638,779 β β β β β 1,819,081 β β β β β 3,363,500 β β β β β 197,775 β β β β β 107,898 β β β β β 10,310,908 β β β β β β 2021 β β β β β 1,039,500 β β β β β 0 β β β β β 3,799,040 β β β β β 1,899,615 β β β β β 3,809,850 β β β β β 240,357 β β β β β 77,053 β β β β β 10,865,415 β β β β β β 2020 β β β β β 1,097,250 β β β β β 0 β β β β β 3,509,030 β β β β β 1,754,514 β β β β β 1,780,700 β β β β β 515,024 β β β β β 96,192 β β β β β 8,752,710 β β β β β
Former Executive Group Presidentβ β β β 2022 β β β β β 774,796 β β β β β 0 β β β β β 3,828,012 β β β β β 1,914,012 β β β β β 2,765,550 β β β β β 434,538 β β β β β 649,224 β β β β β 10,366,132 β β β β β β 2021 β β β β β 1,062,000 β β β β β 0 β β β β β 3,496,810 β β β β β 1,748,006 β β β β β 3,057,950 β β β β β 209,100 β β β β β 73,977 β β β β β 9,647,843 β β β β β β 2020 β β β β β 1,121,000 β β β β β 0 β β β β β 3,196,628 β β β β β 1,598,387 β β β β β 709,400 β β β β β 363,695 β β β β β 75,786 β β β β β 7,064,896 β β β β β Fiscal Year β β Stock Awards ($) β β Total ($) β β β β 2022 β β β $ 30,001,803 β β β β $ 45,598,391 β β β β β 2021 β β β β 21,219,580 β β β β β 36,786,944 β β β β β 2020 β β β β 17,930,646 β β β β β 27,604,543 β β β βYearΒ βSalary
($)Β βBonus
($)Β βStock
Awards
($)(4)Β βOption
Awards
($)(5)Β βNon-Equity
Incentive
Plan
Compensation
($)(6)Β βChange in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(7)Β βAll Other
Compensation
($)(8)Β βTotal
($)Β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β β 2017 Β $ 1,500,000 Β $ 0 Β $ 1,733,392 Β $ 866,627 Β $ 3,401,050 Β $ 339,830 Β $ 145,497 Β $ 7,986,396 Β Β β 2016 Β β 1,500,000 Β β 0 Β β 1,733,258 Β β 866,752 Β β 3,470,600 Β β 752,319 Β β 120,208 Β β 8,443,137 Β Β β 2015 Β β 1,500,000 Β β 0 Β β 1,666,692 Β β 833,307 Β β 3,219,100 Β β 380,807 Β β 54,206 Β β 7,654,112 Β Β Β
2017Β Β
1,900,000Β Β
0Β Β
7,349,244Β Β
3,674,773Β Β
5,328,300Β Β
598,833Β Β
132,089Β Β
18,983,239Β Β Β 2016 Β Β 1,900,000 Β Β 0 Β Β 36,846,755 Β Β 3,423,277 Β Β 5,437,250 Β Β 677,622 Β Β 84,497 Β Β 48,369,401 Β Β Β 2015 Β Β 1,800,000 Β Β 0 Β Β 6,249,946 Β Β 3,125,061 Β Β 4,828,650 Β Β 593,427 Β Β 84,063 Β Β 16,681,147 Β Β
β
2017
Β
β
950,000
Β
β
0
Β
β
4,102,736
Β
β
1,301,339
Β
β
1,400,700
Β
β
69,304
Β
β
74,042
Β
β
7,898,121
Β Β β 2016 Β β 900,000 Β β 0 Β β 2,474,736 Β β 1,237,255 Β β 1,235,800 Β β 74,528 Β β 52,369 Β β 5,974,688 Β Β β 2015 Β β 850,000 Β β 0 Β β 2,239,942 Β β 1,120,067 Β β 1,059,450 Β β 59,834 Β β 56,712 Β β 5,386,005 Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β Β
2017Β Β
1,150,000Β Β
0Β Β
3,906,082Β Β
1,952,920Β Β
3,300,800Β Β
307,291Β Β
95,286Β Β
10,712,379Β Β Β 2016 Β Β 1,100,000 Β Β 0 Β Β 9,813,427 Β Β 1,906,634 Β Β 3,763,250 Β Β 436,886 Β Β 66,804 Β Β 17,087,001 Β Β Β 2015 Β Β 1,040,000 Β Β 0 Β Β 3,416,018 Β Β 1,707,975 Β Β 3,284,600 Β Β 301,676 Β Β 66,808 Β Β 9,817,077 Β Β
β
2017
Β
β
1,080,000
Β
β
0
Β
β
2,836,736
Β
β
1,418,270
Β
β
3,143,500
Β
β
220,396
Β
β
120,691
Β
β
8,819,593
Β Β β 2016 Β β 1,050,000 Β β 0 Β β 2,768,976 Β β 1,384,523 Β β 2,999,150 Β β 403,512 Β β 100,750 Β β 8,706,911 Β Β β 2015 Β β 1,030,000 Β β 0 Β β 2,470,614 Β β 1,235,376 Β β 2,580,000 Β β 242,262 Β β 96,977 Β β 7,655,229 Β β β β β (1)"Stock Awards"βStock Awardsβ column in the Summary Compensation Table shows the grant date fair values of all stock awards, which are comprised of annual grants of RSUsPSUs and PSUsRSUs and, where applicable, additional (non-annual) awards such as the PSU granted in fiscal 2016 to Mr.Β Freda. In contrast, the table below reflects the amounts shown for each year in the "Stock Awards" column in the Summary Compensation Table adjusted to deduct the grant date fair value of the additional (non-annual) awards from the year in which they were granted and instead includes the amounts that were expensed for accounting purposes in each fiscal year shown in the Summary Compensation Table relating to non-annual awards, including the amounts expensed for such awards granted prior to fiscal 2015 as disclosed in previous proxy statements. As adjusted, the amounts shown for "Stock Awards" and "Total" in the Summary Compensation Table for Mr.Β Freda would be as follows:YearΒ βStock Awards ($)Β βTotal ($)Β β β β β β β β β 2017 Β $ 16,752,310 Β $ 28,386,305 Β 2016 Β Β 16,350,705 Β Β 27,873,351 Β 2015 Β β 10,873,886 Β β 21,305,087 Β Of the total grant date fair value (approximately $30Β million) for the additional PSU grant on SeptemberΒ 4, 2015 (fiscal 2016), approximately $15Β million was recognized in fiscal 2016 and 2017, and $15Β million is expected to be recognized in fiscal years 2018 to 2020, subject to continued employment. This grant has an aggregate target payout of 387,848 shares of the Company's ClassΒ A Common Stock (in three tranches of approximately 129,283 shares each), generally subject to continued employment through the end of the relative performance periods that end JuneΒ 30, 2018, 2019 and 2020. The award covers a period of about eight years in total and is based on Mr.Β Freda's continued employment and achievement of the performance goals described below, and, if such goals are achieved, the award would be paid out to Mr.Β Freda after years six, seven, and eight. The delayed distribution feature is a key component of the award, intended to both enhance retention and ensure that Mr.Β Freda is further incentivized to drive long-term performance. By separating award vesting from award delivery, we continue to tie a portion of Mr.Β Freda's income to share value, regardless of whether he is still an executive officer at the Company during those later years. See "Compensation Discussion and AnalysisΒ β CEO Compensation" for additional information about this award.(2)Stock awards for Ms.Β Travis in each year reflect annual grants of RSUs and PSUs and also reflect an additional RSU grant on SeptemberΒ 6, 2016 (fiscal 2017) with a grant date fair value of approximately $1.5Β million. See "Compensation Discussion and AnalysisΒ β Elements of CompensationΒ β Long-Term Equity-Based CompensationΒ β Additional RSU Grants" for additional information about this award.(3)Stock awards for Mr.Β Demsey in each year reflect annual grants of RSUs and PSUs and also reflect an additional PSU grant on January 28, 2016 (fiscal 2016) with a grant date fair value of approximately $6.0 million. See "Outstanding Equity Awards at JuneΒ 30, 2017" for additional information about this award.(4)RSUsPSUs, PVUs, and PSUsRSUs granted in the respective fiscal year computed in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 718, CompensationβββStock Compensation ("(βFASB ASC Topic 718"718β). For a description of the assumptions used to calculate the aggregate grant date fair value of Stock Awards, see Note 18 (βStock Programsβ) to our consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended JuneΒ 30, 2022. Amounts shown for each of Mr.Β Freda and Mr.Β Demsey for fiscal 20162021 include an additionalthe MarchΒ 2021 PVU and PSU award discussedGrants referenced in notesnote (1) and (3), respectively.. Amounts shown for Ms.Β Travis for fiscal 20172022 and fiscal 2020 include an additional PSU award and an additional RSU award, discussedrespectively, referenced in note (2). The amount shown for Ms.Β Hudis for fiscal 2022 includes an additional RSU award, referenced in note (3). Amounts shown disregard estimates of forfeitures related to service-based vesting conditions and were calculated generally based on the closing prices of our ClassΒ A Common Stock on the NYSE on the dates of grant.conditions. For annual PSUs, the amount included was calculated based on the probable (i.e. likely) outcome with respect to satisfaction of the performance conditions at the date of grant, which is the target payout, consistent with the recognition criteria in FASB ASC Topic 718 (excluding the effect of estimated forfeitures). The maximum potential values of annual PSUs (assuming the grant date stock price) awarded at the date of grant for fiscal 2017, 2016,2022, fiscal 2021, and 2015, respectively,fiscal 2020 were as follows: for Mr.Β Lauder, $1,300,089, $1,299,944,$1,826,615, $2,227,483, and $1,250,020;$1,500,065, respectively; Mr.Β Freda, $5,511,978, $35,135,077,$7,906,843, $9,125,811, and $4,687,459;$6,562,623, respectively; Ms.Β Travis, $1,952,056, $1,856,091,$3,073,488, $3,461,703, and $1,679,957; Mr.Β Demsey, $2,929,606, $8,860,087, and $2,562,014; and $2,460,111, respectively;β β β β $2,127,597, $2,076,770,$2,911,092, $3,324,325, and $1,852,999. The payout of PSUs to all executives could be as low as zero depending on performance over the relevant period, and the value of any payout will depend on the stock price at the time of payout. For a description of the performance criteria applicable to the PSUs, see "Compensation Discussion and AnalysisΒ β Elements of CompensationΒ β Long-Term Equity-Based CompensationΒ β Performance Share Units." For further information about the above-referenced additional PSU award to Mr.Β Freda in fiscal 2016, see "Compensation Discussion and AnalysisΒ β CEO Compensation." For further information about the above-referenced additional PSU to$2,631,872, respectively; Mr.Β Demsey, in$3,062,478, $3,059,818, and $2,397,471, respectively; and for Ms.Β Hudis, $2,306,578 for fiscal 2016, see "Outstanding Equity Awards at JuneΒ 30, 2017."2022.(5)model based on the following assumptions:βExpected
VolatilityΒ βExpected
TermΒ to
ExerciseΒ βDividend
YieldΒ βRisk-Free
Interest
RateΒ β β β β β β β β β β β β β β Β β 26 % β 9 Β β 1.3 % β 1.6 % Β Β 27 % Β 8 Β Β 1.2 % Β 2.0 % Β β 28 % β 9 Β β 1.1 % β 2.3 % The expected volatility assumption ismodel. For a combination of both current and historical implied volatilitiesdescription of the underlying stock. The implied volatilities were obtained from publicly available data sources.assumptions used to calculate such amounts, see Note 18 (βStock Programsβ) to our consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended JuneΒ 30, 2022. See "GrantsβGrants of Plan-Based Awards in Fiscal 2017"2022β for information about option awards granted in fiscal 20172022 and "OutstandingβOutstanding Equity Awards at JuneΒ 30, 2017"2022β for information with respect to options outstanding at JuneΒ 30, 2017.2022.(6)"GrantsβGrants of Plan-Based Awards in Fiscal 2017"2022β for the potential payouts to which the executive was entitled depending on the outcome of the performance criteria. For a descriptioncriteria in fiscal 2022. See βCompensation Discussion and AnalysisβββDesign of the performance criteria, see "CompensationEAIP and PSU for Fiscal 2022 and Fiscal 2023β and βCompensation Discussion and AnalysisβββElements of CompensationβββAnnual Incentive Bonus."β(7)NEO'sNEOβs accumulated pension benefits under the RGA Plan and the Restoration Plan and any above market portion of interest earned during each fiscal year on deferred compensation balances. Mr.Β Lauder is the only NEO with a deferred compensation balance. The above market portions of interest earned by Mr.Β Lauder during fiscal 2017,2022, fiscal 20162021, and fiscal 20152020 were $72,173, $54,189$86,414, $62,638, and $16,341,$202,787, respectively. See "NonqualifiedβNonqualified Deferred Compensation in Fiscal 20172022 and at JuneΒ 30, 2017"2022β and the related discussion for a description ofinformation about our deferred compensation arrangements applicable to executive officers. For Mr.Β Freda, the amount also represents a supplemental deferral intended to replicate pension benefits foregone at his former employer plus earnings on such deferral. See "PensionβPension Benefits."β
shown in the table below.(8)AmountsInformation about amounts reported for the three fiscalΒ 2017, fiscal 2016, and fiscal 2015years are as follows.β β Name β β Year β β Matching 401(k)
Savings Plan
Contributions
Made on
Behalf
of the
Executivesβ β Company-Paid
Premiums
for
Executive
Life
Insuranceβ β
Medical
Reimbursement
Payment(a)β β
Allowance(b)β β
Counseling(b)β β
Use of
Company
Autos and
Company
Aircraft(c)β β Companion
Travelβ β
Amounts(d)β β
All
Other
Compensationβ β β β William P. Lauder β β β β 2022 β β β β $ 15,211 β β β β $ 18,598 β β β β $ 0 β β β β $ 20,000 β β β β $ 0 β β β β $ 0 β β β β $ 0 β β β β $ 0 β β β β $ 53,809 β β β β β β 2021 β β β β β 14,405 β β β β β 18,598 β β β β β 6,477 β β β β β 20,000 β β β β β 10,000 β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 69,480 β β β β β β 2020 β β β β β 16,710 β β β β β 18,598 β β β β β 6,475 β β β β β 20,000 β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 61,783 β β β β β Fabrizio Freda β β β β 2022 β β β β β 15,197 β β β β β 35,735 β β β β β 0 β β β β β 20,000 β β β β β 5,000 β β β β β 491,246 β β β β β 0 β β β β β 0 β β β β β 567,178 β β β β β β 2021 β β β β β 14,370 β β β β β 35,735 β β β β β 6,475 β β β β β 20,000 β β β β β 5,000 β β β β β 640,212 β β β β β 0 β β β β β 0 β β β β β 721,792 β β β β β β 2020 β β β β β 14,300 β β β β β 35,735 β β β β β 6,475 β β β β β 20,000 β β β β β 5,000 β β β β β 165,353 β β β β β 0 β β β β β 0 β β β β β 246,862 β β β β β Tracey T. Travis β β β β 2022 β β β β β 15,083 β β β β β 7,644 β β β β β β β β β β β 0 β β β β β 0 β β β β β 13,200 β β β β β 0 β β β β β 0 β β β β β 35,927 β β β β β β 2021 β β β β β 14,250 β β β β β 7,644 β β β β β β β β β β β 15,000 β β β β β 10,000 β β β β β 13,200 β β β β β 180 β β β β β 0 β β β β β 60,274 β β β β β β 2020 β β β β β 14,171 β β β β β 7,644 β β β β β β β β β β β 0 β β β β β 5,000 β β β β β 13,200 β β β β β 0 β β β β β 0 β β β β β 40,014 β β β β β Jane Hertzmark Hudis β β β β 2022 β β β β β 15,327 β β β β β 12,225 β β β β β β β β β β β 22,985 β β β β β 5,000 β β β β β 13,200 β β β β β 0 β β β β β 0 β β β β β 68,737 β β β β β Cedric ProuvΓ© β β β β 2022 β β β β β 15,320 β β β β β 44,190 β β β β β 0 β β β β β 30,000 β β β β β 3,500 β β β β β 1,930 β β β β β 6,823 β β β β β 6,135 β β β β β 107,898 β β β β β β 2021 β β β β β 14,269 β β β β β 44,190 β β β β β 7,841 β β β β β 0 β β β β β 3,500 β β β β β 7,125 β β β β β 127 β β β β β 0 β β β β β 77,053 β β β β β β 2020 β β β β β 14,333 β β β β β 44,190 β β β β β 5,976 β β β β β 15,000 β β β β β 3,500 β β β β β 7,125 β β β β β 6,068 β β β β β 0 β β β β β 96,192 β β β β β John Demsey β β β β 2022 β β β β β 12,374 β β β β β 19,285 β β β β β 0 β β β β β 15,000 β β β β β 3,500 β β β β β 8,800 β β β β β 0 β β β β β 590,265 β β β β β 649,224 β β β β β β 2021 β β β β β 14,442 β β β β β 19,285 β β β β β 8,551 β β β β β 15,000 β β β β β 3,500 β β β β β 13,200 β β β β β 0 β β β β β 0 β β β β β 73,977 β β β β β β 2020 β β β β β 16,250 β β β β β 19,285 β β β β β 8,551 β β β β β 15,000 β β β β β 3,500 β β β β β 13,200 β β β β β 0 β β β β β 0 β β β β β 75,786 β β β βYear βMatching
401(k)
Savings Plan
Contributions
MadeΒ onΒ Behalf
of the
ExecutivesβCompany-Paid
Premiums
for
Executive
Life
InsuranceβCompany-Paid
Medical
Reimbursement
PaymentβPerquisite
Allowance(a)βFinancial
Counseling(a)βPersonal
Use of
Company
Autos or
Company
Aircraft(b)βCompanion
TravelβTotalΒ β All
Other
Compensationβ β β β β β β β β β β β β β β β β β β β β WilliamΒ P.Β Lauder β 2017 β β $ 13,775 β β β $ 18,598 β β β $ 6,805 β β β $ 20,000 β β β $ 10,000 β β β $ 53,010 β β β $ 23,309 β β β $ 145,497 β β β β 2016 β β 12,975 β β β 18,598 β β β 7,479 β β β 40,000 β β β β β β β 28,893 β β β 12,263 β β β 120,208 β β β β 2015 β β 13,750 β β β 18,598 β β β 7,479 β β β β β β β 5,000 β β β 9,379 β β β β β β β 54,206 β β
Fabrizio Freda
β
2017
β
β
12,714
β
β
β
35,735
β
β
β
6,805
β
β
β
20,000
β
β
β
5,000
β
β
β
β
β
β
β
51,835
β
β
β
132,089
β
βΒ β 2016 β β 13,250 β β β 35,735 β β β 7,479 β β β 20,000 β β β 5,000 β β β β β β β 3,033 β β β 84,497 β β Β β 2015 β β 14,117 β β β 35,735 β β β 7,479 β β β 17,720 β β β 5,000 β β β β β β β 4,012 β β β 84,063 β β
TraceyΒ T.Β Travis
β
2017
β
β
12,083
β
β
β
7,644
β
β
β
β
β
β
β
15,000
β
β
β
10,000
β
β
β
13,200
β
β
β
16,115
β
β
β
74,042
β
ββ β 2016 β β 11,525 β β β 7,644 β β β β β β β 15,000 β β β 5,000 β β β 13,200 β β β β β β β 52,369 β β β β 2015 β β 15,868 β β β 7,644 β β β β β β β 15,000 β β β 5,000 β β β 13,200 β β β β β β β 56,712 β β
John Demsey
β
2017
β
β
13,034
β
β
β
43,850
β
β
β
6,702
β
β
β
15,000
β
β
β
3,500
β
β
β
13,200
β
β
β
β
β
β
β
95,286
β
βΒ β 2016 β β 13,325 β β β 14,300 β β β 7,479 β β β 15,000 β β β 3,500 β β β 13,200 β β β β β β β 66,804 β β Β β 2015 β β 13,400 β β β 14,300 β β β 7,479 β β β 15,000 β β β 3,500 β β β 13,129 β β β β β β β 66,808 β β
CedricΒ ProuvΓ©
β
2017
β
β
13,063
β
β
β
44,190
β
β
β
6,257
β
β
β
30,000
β
β
β
3,500
β
β
β
6,875
β
β
β
16,806
β
β
β
120,691
β
ββ β 2016 β β 13,125 β β β 44,190 β β β 6,929 β β β 15,000 β β β 3,500 β β β 6,875 β β β 11,131 β β β 100,750 β β β β 2015 β β 12,896 β β β 44,190 β β β 6,929 β β β 15,000 β β β 3,500 β β β 5,233 β β β 9,229 β β β 96,977 β β
Certain amounts do not sum due to rounding(b)Includes β β β β LauderProuvΓ© is a payment made by the Company for fiscal 2017 are comprised of $4,625spousal supplemental medical coverage. The amount shown in this column for use of a company car and $48,385 in connection with the Company's flight safety policy described below. The amounts for Ms.Β Travis, Mr.Β Demsey includes payments and Mr.Β ProuvΓ© for fiscal 2017 arebenefits related to paymentsthe non-compete-related provisions of his employment agreement (including salary continuation ($387,652) and healthcare benefits); customary payment for car usage.accrued and unused vacation days ($115,326); and payment of certain legal fees, retirement transition services and access to administrative support at the Companyβs expense. See βCompensation Discussion and AnalysisβββRetirement of Named Executive Officers (John Demsey and Cedric ProuvΓ©)β for additional information.Company'sCompanyβs flight safety policy provides that our Chairman Emeritus, our Executive Chairman, and our Chief Executive Officer should not fly together for any reason. We allowpay for the travel expenses for non-business trips for one or two of these officers, to use Company-provided aircraft for non-business tripsas the case may be, where it is necessary to comply with the flight safety policy. For fiscal 2022, there was no Company reimbursement to any of the NEOs under the Flight Safety Policy. In addition, we make available to our employees, including the NEOs, the ability to obtain a limited amount of our products for free or at a discount. The incremental cost of the free product program did not exceed $1,000$2,500 in any of the last three fiscalΒ years for any of the NEOs. The sales of products to employees at a discount are profitable for us.NEO'sNEOβs employment agreement are described below:Company'sCompanyβs Executive Automobile Program with an automobile having an acquisition value ofβ$75,000), we pay annual premiums for additional executive term life insurance with a face amount ofβ$10Β million for Mr.Β Freda. We also pay travel expenses for his spousespouse/companion or domestic partner to accompany him on up to two business-related travel itineraries per fiscal year. In addition, Mr.Β Freda is entitled to an annual supplemental deferral computed by taking the difference between $485,000 and the actual vested annual accruals and contributions made to the Company'sCompanyβs qualified and nonqualified pension andβ β β β Β Β Β Β Β Β Β Β John Demsey. Under hisher employment agreement effective JulyΒ 1, 2010, Mr.Β Demsey12, 2018, Ms.Β Hudis is an employee-at-will, and heshe will continue as Executive Group President until hisher retirement or other termination of hisher employment. The agreement generally provides for his base salary and bonus opportunities to be set by the Compensation Committee and that his equity grants will be determined by the Subcommittee. In addition to the benefits generally available to our senior executives (e.g.,Β annual perquisite reimbursement under our Executive Perquisite Plan up to $15,000, financial counseling services up to $5,000, and participation in our Executive Automobile Program with an automobile having an acquisition value of $50,000), we pay annual premiums for additional executive term life insurance with a face amount of $5Β million for Mr.Β Demsey.Β Β Β Β Β Β Β Β Cedric ProuvΓ©.Β Under his employment agreement effective JulyΒ 1, 2011, Mr.Β ProuvΓ© is an employee-at-will, and he will continue as Group President, International until his retirement or other termination of his employment. The agreement provides for his base salary and bonus opportunities to be set by the Compensation Committee and for equity grants as determined by the Subcommittee. In addition to the benefits generally available to our senior executives (e.g., annual perquisite reimbursement under our Executive Perquisite Plan up to $15,000, financial counseling services up to $5,000, and participation in our Executive Automobile Program with an automobile having an acquisition value ofβ $50,000), we pay annual premiums for additional executive term life insurance with a face amount ofβ $5Β million for Ms.Β Hudis. We also pay travel expenses for her spouse/companion or domestic partner to accompany her on up to two business-related travel itineraries per fiscal year.β β β β "PotentialβPotential Payments upon Termination of Employment or Change of Control," (b)β β(b)Β provides that the executive must abide by restrictive covenants relating to non-competition and non-solicitation during employment and, under"ChangeβChange of Control" (asControlβ β(as defined in the agreement) or after a Change of Control, provided that any such modification shall not be effective until at least twoΒ years after such modification is approved by the Compensation Committee.β β β β 201720172022 to each NEO, including bonus opportunities under the EAIP and PSUs, RSUs, and stock optionsequity grants under the Share Incentive Plan. The material terms of the incentive bonus opportunities are described in "CompensationβCompensation Discussion and AnalysisβββElements of CompensationβββAnnual Incentive Bonus,"β and the material terms of the equity awards are described in "CompensationβCompensation Discussion and AnalysisβββElements of CompensationβββLong-Term Equity-Based Compensation"Compensationβ and "CompensationβCompensation Discussion and AnalysisβββCEO Compensation."β See "CompensationβCompensation Discussion and Analysis"Analysisβ and other disclosures under "Executive Compensation"βExecutive Compensationβ for a description of the material factors necessary to an understanding of the information disclosed below.β β β β β β β β β β β β β β
Under Non-Equity Incentive
PlanΒ Awards(1)β β
Under Equity Incentive
PlanΒ Awards(2)β β
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(3)β β
Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)β β Exercise
or Base
Price of
Option
Awards
($/Sh)β β
Fair Value
of Stock
and Option
Awards
($)(5)β β β β Name β β Award
Typeβ β Grant
Dateβ β
($)β β
($)β β
($)β β
(#)β β
(#)β β
(#)β β β William P. Lauder β β EAIP β β β β N/A β β β β $ 1,627,500 β β β β $ 3,255,000 β β β β $ 5,370,750 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β PSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β 1,659 β β β β β 3,318 β β β β β 5,309 β β β β β β β β β β β β β β β β β β β β β β $ 1,141,591 β β β β RSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 3,318 β β β β β β β β β β β β β β β β β 1,141,591 β β β β Options β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 12,834 β β β β $ 344.06 β β β β β 1,141,841 β β β β β Fabrizio Freda β β EAIP β β β β N/A β β β β β 2,625,000 β β β β β 5,250,000 β β β β β 8,662,500 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β PSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β 7,182 β β β β β 14,363 β β β β β 22,981 β β β β β β β β β β β β β β β β β β β β β β β 4,941,734 β β β β RSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 14,363 β β β β β β β β β β β β β β β β β 4,941,734 β β β β Options β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 55,542 β β β β β 344.06 β β β β β 4,941,572 β β β β β Tracey T. Travis β β EAIP β β β β N/A β β β β β 760,000 β β β β β 1,520,000 β β β β β 2,508,000 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β PSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β 2,792 β β β β β 5,583 β β β β β 8,933 β β β β β β β β β β β β β β β β β β β β β β β 4,941,734 β β β β PSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 14,533(6) β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 5,000,224 β β β β RSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 5,583 β β β β β β β β β β β β β β β β β 4,941,734 β β β β Options β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 21,589 β β β β β 344.06 β β β β β 1,920,773 β β β β β Jane Hertzmark Hudis β β EAIP β β β β N/A β β β β β 1,000,000 β β β β β 2,000,000 β β β β β 3,300,000 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β PSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β 2,095 β β β β β 4,190 β β β β β 6,704 β β β β β β β β β β β β β β β β β β β β β β β 1,441,611 β β β β RSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 4,190 β β β β β β β β β β β β β β β β β 1,441,611 β β β β RSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 10,173(7) β β β β β β β β β β β β β β β β β 3,500,122 β β β β Options β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 16,206 β β β β β 344.06 β β β β β 1,441,848 β β β β β Cedric ProuvΓ© β β EAIP β β β β N/A β β β β β 1,430,625 β β β β β 2,861,250 β β β β β 4,721,063 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β PSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β 2,644 β β β β β 5,288 β β β β β 8,461 β β β β β β β β β β β β β β β β β β β β β β β 1,819,389 β β β β RSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 5,288 β β β β β β β β β β β β β β β β β 1,819,389 β β β β Options β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 20,446 β β β β β 344.06 β β β β β 1,819,081 β β β β β John Demsey β β EAIP β β β β N/A β β β β β 1,658,300 β β β β β 3,316,600 β β β β β 5,472,390 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β PSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β 2,782 β β β β β 5,563 β β β β β 8,901 β β β β β β β β β β β β β β β β β β β β β β β 1,914,006 β β β β RSU β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 5,563 β β β β β β β β β β β β β β β β β 1,914,006 β β β β Options β β β β 9/2/2021 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 21,513 β β β β β 344.06 β β β β β 1,914,012 β β β Β Β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β β All
Other
Stockβ All
Other
Optionβ Β Β β Β Β Β Β Β Β β Β Β EstimatedΒ PossibleΒ Payouts
UnderΒ Non-EquityΒ Incentive
PlanΒ Awards(1)Β EstimatedΒ FutureΒ Payouts
UnderΒ EquityΒ Incentive
PlanΒ Awards(2)Β β Awards:
Number
ofΒ Shares
ofΒ Stockβ Awards:
Number of
Securities
Underlyingβ Exercise
orΒ Base
PriceΒ of
Optionβ GrantΒ Date
FairΒ Value
ofΒ Stock
andΒ OptionΒ Award
TypeΒ Grant
DateΒ Threshold
($)Β Target
($)Β Maximum
($)Β Threshold
(#)Β Target
(#)Β Maximum
(#)Β orΒ Units
(#)(3)Β Options
(#)(4)Β Awards
($/Sh)Β Awards
($)(5)Β Β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β WilliamΒ P. Β EAIP Β β N/A Β $ 937,500 Β $ 3,000,000 Β $ 4,500,000 Β β β Β β β Β β β Β β β Β β β Β β β Β β β Β Lauder Β PSU Β β 9/6/16 Β β β Β β β Β β β Β β 4,844 Β β 9,687 Β β 14,531 Β β β Β β β Β β β Β $ 866,696 Β β Β RSU Β β 9/6/16 Β β β Β β β Β β β Β β β Β β β Β β β Β β 9,687 Β β β Β β β Β β 866,696 Β β Β Options Β β 9/6/16 Β β β Β β β Β β β Β β β Β β β Β β β Β β β Β β 35,649 Β $ 89.47 Β β 866,627 Β
Fabrizio
Β
EAIP
Β
Β
N/A
Β
Β
1,468,750
Β
Β
4,700,000
Β
Β
7,050,000
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β Freda Β PSU Β Β 9/6/16 Β Β Β Β Β Β Β Β Β Β Β 20,536 Β Β 41,071 Β Β 61,607 Β Β Β Β Β Β Β Β Β Β Β 3,674,622 Β Β Β RSU Β Β 9/6/16 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 41,071 Β Β Β Β Β Β Β Β 3,674,622 Β Β Β Options Β Β 9/6/16 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 151,163 Β Β 89.47 Β Β 3,674,773 Β
TraceyΒ T.
Β
EAIP
Β
β
N/A
Β
β
359,375
Β
β
1,150,000
Β
β
1,725,000
Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β Travis Β PSU Β β 9/6/16 Β β β Β β β Β β β Β β 7,273 Β β 14,545 Β β 21,818 Β β β Β β β Β β β Β β 1,301,341 Β β Β RSU Β β 9/6/16 Β β β Β β β Β β β Β β β Β β β Β β β Β β 16,766 Β β β Β β β Β β 1,500,054 Β β Β RSU Β β 9/6/16 Β β β Β β β Β β β Β β β Β β β Β β β Β β 14,545 Β β β Β β β Β β 1,301,341 Β β Β Options Β β 9/6/16 Β β β Β β β Β β β Β β β Β β β Β β β Β β β Β β 53,531 Β β 89.47 Β β 1,301,339 Β
John
Β
EAIP
Β
Β
N/A
Β
Β
937,500
Β
Β
3,000,000
Β
Β
4,500,000
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β
Β Demsey Β PSU Β Β 9/6/16 Β Β Β Β Β Β Β Β Β Β Β 10,915 Β Β 21,829 Β Β 32,744 Β Β Β Β Β Β Β Β Β Β Β 1,953,041 Β Β Β RSU Β Β 9/6/16 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 21,829 Β Β Β Β Β Β Β Β 1,953,041 Β Β Β Options Β Β 9/6/16 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 80,334 Β Β 89.47 Β Β 1,952,920 Β
Cedric
Β
EAIP
Β
β
N/A
Β
β
750,000
Β
β
2,400,000
Β
β
3,600,000
Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
οΏ½οΏ½
β
Β
β
β
Β
β
β
Β ProuvΓ© Β PSU Β β 9/6/16 Β β β Β β β Β β β Β β 7,927 Β β 15,853 Β β 23,780 Β β β Β β β Β β β Β β 1,418,368 Β β Β RSU Β β 9/6/16 Β β β Β β β Β β β Β β β Β β β Β β β Β β 15,853 Β β β Β β β Β β 1,418,368 Β β Β Options Β β 9/6/16 Β β β Β β β Β β β Β β β Β β β Β β β Β β β Β β 58,341 Β β 89.47 Β β 1,418,270 Β
(1)(1)20172022 under the EAIP at the "threshold," "target,"threshold, target, and "maximum"maximum levels. Actual payouts for fiscal 20172022 are disclosed in the Summary Compensation Table in the column "Non-EquityβNon-Equity Incentive PlanΒ Compensation."β No future cash payout will be made under these awards. For a discussion of the EAIPand the fiscal 2017 payouts, see "CompensationSee βCompensation Discussion and AnalysisβββElements of CompensationΒ β Annual Incentive Bonus."under the Share Incentive Plan in fiscal 2017.2022. See βCompensation Discussion and AnalysisβββElements of CompensationβββLong-Term Equity-Based CompensationβββPerformance Share Unitsβ and βCompensation Discussion and AnalysisβββDesign of EAIP and PSU for Fiscal 2022 and Fiscal 2023.β In addition, the amounts shown for Ms.Β Travis also represent the SeptemberΒ 2021 additional (non-annual) PSU. See βCompensation Discussion and AnalysisβββAdditional (non-annual) PSUs and other Performance-Based Long-Term Equity Grants.β Future payout of annual PSUs shown in this table is generallyβ β β β compound annual growth rate goals for the three-year period ending JuneΒ 30, 2019;2024; these goals were set in SeptemberΒ 2016.2021. Payout of annual PSUs generally assumes continued employment and is subject to acceleration upon the occurrence of certain events as described in "PotentialβPotential Payments upon Termination of Employment or Change of ControlβββEvents of Termination under the Employment Agreements and under the Share Incentive Plan."β For each executive officer, no payout of these annual PSUs will be made pursuant to the Net Sales, Diluted EPS, or ROIC compound annual growth rate opportunities unless the threshold for such opportunity is achieved, and additional shares shall be paid out if performance exceeds the targeted performance goals. Measurement of performance is subject to certain automatic adjustments. See "Compensation Discussion and AnalysisΒ β Elements of CompensationΒ β Long-Term Equity-Based CompensationΒ β Performance Share Units." The PSUs shown in the table above are subject to restrictions on transfer and forfeiture prior to vesting. Upon payout, shares will be withheld to cover minimum statutory tax obligations. PSUs are accompanied by dividend equivalent rights that will be payable in cash at the time of payout of the related shares. PSUs do not have any voting rights with respect to the shares of ClassΒ A Common Stock underlying the award.(3)under the Share Incentive Plan in fiscal 2017.2022. Annual RSUs granted on SeptemberΒ 6, 2016 generally vest in three equal installments approximately 14Β months, 26Β months, and 38Β months from the date of grant. The RSUs granted toIn addition, the amounts shown for Ms.Β Travis onHudis also represent the SeptemberΒ 6, 2016 for 16,766 shares vests 100% on OctoberΒ 31, 2019.2021 additional (non-annual) RSU. See βCompensation Discussion and AnalysisβββAdditional (non-annual) RSU Grants.β The vesting of RSUs is subject to continued employment and subject to acceleration upon the occurrence of certain events as described in "PotentialβPotential Payments upon Termination of Employment or Change of ControlβββEvents of Termination under the Employment Agreements and under the Share Incentive Plan." RSUs are subject to restrictions on transfer and forfeiture prior to vesting. Upon payout, shares will be withheld to cover minimum statutory tax obligations. RSUs are accompanied by dividend equivalent rights that will be payable in cash at the time of payout of the related shares. RSUs do not have any voting rights with respect to the shares of ClassΒ A Common Stock underlying the award.β See "CompensationβCompensation Discussion and AnalysisβββElements of CompensationβββLong-Term Equity-Based CompensationβββAnnual Restricted Stock Units."β(4)under the Share Incentive Plan in fiscal 2017.2022. The exercise price of the stock options is equal to the closing price of our ClassΒ A Common Stock on the date of grant. The stock options become exercisable in three equal installments approximately 16Β months, 28Β months, and 40Β months after the date of grant, and expire tenΒ years from the grant date assuming continued employment and subject to acceleration upon the occurrence of certain events as described in "PotentialβPotential Payments upon Termination of Employment or Change of ControlβββEvents of Termination under the Employment Agreements and under the Share Incentive Plan." Stock options do not have dividend equivalent rights or any voting rights with respect to the shares of ClassΒ A Common Stock underlying the options.β See "CompensationβCompensation Discussion and AnalysisβββElements of CompensationβββLong-Term Equity-Based CompensationβββAnnual Stock Options."β(5)(4)(7)Β and (5)(8)Β of the Summary Compensation Table. The grant date fair values of PSU awards were calculated assuming the target payout.β β β β 2017stock options, RSUs, and PSUs outstanding equity awards on JuneΒ 30, 20172022 under our plans existing at the time of grant for each NEO.β β β β β β β β β β β β β β Stock Awards β β β β Name β β Grant
Dateβ β
Securities
Underlying
Unexercised
Options
(#)
Exercisableβ β
Securities
Underlying
Unexercised
Options
(#)
Unexercisableβ β
Exercise
Price
($)β β Option
Expiration
Dateβ β β Award
Typeβ β
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)β β
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)β β Award
Typeβ β
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)(4)β β
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(5)β β β β William P. Lauder β β β β 9/4/18 β β β β β 7,053 β β β β β 0 β β β β $ 138.150 β β β β β 9/4/28 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/3/19 β β β β β 6,080 β β β β β 6,080 β β β β β 199.490 β β β β β 9/3/29 β β β β β β RSU β β β β β 1,671 β β β β $ 434,510 β β β β β PSU β β β β β 5,986 β β β β $ 1,556,540 β β β β β β 9/3/20 β β β β β 7,300 β β β β β 14,600 β β β β β 218.060 β β β β β 9/3/30 β β β β β β RSU β β β β β 3,892 β β β β β 1,006,432 β β β β β PSU β β β β β 10,215 β β β β β 2,641,497 β β β β β β 9/2/21 β β β β β 0 β β β β β 12,834 β β β β β 344.060 β β β β β 9/2/31 β β β β β β RSU β β β β β 3,318 β β β β β 858,002 β β β β β PSU β β β β β 5,309 β β β β β 1,361,599 β β β β β Fabrizio Freda β β β β 9/4/15 β β β β β 148,258 β β β β β 0 β β β β β 77.350 β β β β β 9/4/25 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/4/15 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 129,283 β β β β β 34,367,300 β β β β β β 9/6/16 β β β β β 151,163 β β β β β 0 β β β β β 89.470 β β β β β 9/6/26 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/5/17 β β β β β 135,597 β β β β β 0 β β β β β 107.950 β β β β β 9/5/27 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 2/14/18 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 195,940 β β β β β 51,510,667 β β β β β β 9/4/18 β β β β β 92,200 β β β β β 0 β β β β β 138.150 β β β β β 9/4/28 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/3/19 β β β β β 53,204 β β β β β 26,603 β β β β β 199.490 β β β β β 9/3/29 β β β β β β RSU β β β β β 7,311 β β β β β 1,901,079 β β β β β PSU β β β β β 26,186 β β β β β 6,809,146 β β β β β β 9/3/20 β β β β β 29,915 β β β β β 59,831 β β β β β 218.060 β β β β β 9/3/30 β β β β β β RSU β β β β β 15,943 β β β β β 4,122,700 β β β β β PSU β β β β β 41,850 β β β β β 10,821,992 β β β β β β 3/11/21 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 85,927 β β β β β 22,128,780 β β β β β β 3/11/21 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 68,578 β β β β β 17,660,892 β β β β β β 9/2/21 β β β β β 0 β β β β β 55,542 β β β β β 344.060 β β β β β 9/2/31 β β β β β β RSU β β β β β 14,363 β β β β β 3,734,811 β β β β β PSU β β β β β 22,981 β β β β β 5,893,937 β β β β β Tracey T. Travis β β β β 9/4/18 β β β β β 35,696 β β β β β 0 β β β β β 138.150 β β β β β 9/4/28 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/3/19 β β β β β 19,944 β β β β β 9,972 β β β β β 199.490 β β β β β 9/3/29 β β β β β β RSU β β β β β 2,741 β β β β β 712,742 β β β β β PSU β β β β β 9,816 β β β β β 2,552,454 β β β β β β 9/3/19 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 10,026 β β β β β 2,607,061 β β β β β β β β β β β β β β β β β β β β β β β β 9/3/20 β β β β β 11,346 β β β β β 22,694 β β β β β 218.060 β β β β β 9/3/30 β β β β β β RSU β β β β β 6,048 β β β β β 1,563,952 β β β β β PSU β β β β β 15,875 β β β β β 4,105,116 β β β β β β 9/2/21 β β β β β 0 β β β β β 21,589 β β β β β 344.060 β β β β β 9/2/31 β β β β β β RSU β β β β β 5,583 β β β β β 1,443,708 β β β β β PSU β β β β β 8,933 β β β β β 2,291,047 β β β β β β 9/2/21 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 14,533 β β β β β 3,727,279 β β β β β Jane Hertzmark Hudis β β β β 9/5/17 β β β β β 10,535 β β β β β 0 β β β β β 107.950 β β β β β 9/5/27 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/4/18 β β β β β 23,176 β β β β β 0 β β β β β 138.150 β β β β β 9/4/28 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/3/19 β β β β β 14,595 β β β β β 7,298 β β β β β 199.490 β β β β β 9/3/29 β β β β β β RSU β β β β β 2,005 β β β β β 521,360 β β β β β PSU β β β β β 7,182 β β β β β 1,867,535 β β β β β β 9/3/20 β β β β β 8,960 β β β β β 17,924 β β β β β 218.060 β β β β β 9/3/30 β β β β β β RSU β β β β β 4,777 β β β β β 1,235,284 β β β β β PSU β β β β β 12,539 β β β β β 3,242,460 β β β β β β 9/2/21 β β β β β 0 β β β β β 16,206 β β β β β 344.060 β β β β β 9/2/31 β β β β β β RSU β β β β β 4,190 β β β β β 1,074,609 β β β β β PSU β β β β β 6,704 β β β β β 1,719,375 β β β β β β 9/2/21 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 10,173 β β β β β 2,609,069 β β β β β β β β β β β β β β β β β β β β β β β Cedric ProuvΓ© β β β β 9/4/18 β β β β β 13,081 β β β β β 0 β β β β β 138.150 β β β β β 9/4/28 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β 9/3/19 β β β β β 21,337 β β β β β 0 β β β β β 199.490 β β β β β 9/3/29 β β β β β β RSU β β β β β 2,932 β β β β β 762,408 β β β β β PSU β β β β β 10,502 β β β β β 2,730,835 β β β β β β 9/3/20 β β β β β 32,690 β β β β β 0 β β β β β 218.060 β β β β β 9/3/30 β β β β β β RSU β β β β β 5,808 β β β β β 1,501,891 β β β β β PSU β β β β β 15,245 β β β β β 3,942,205 β β β β β β 9/2/21 β β β β β 20,446 β β β β β 0 β β β β β 344.060 β β β β β 9/2/31 β β β β β β RSU β β β β β 5,288 β β β β β 1,356,213 β β β β β PSU β β β β β 8,461 β β β β β 2,169,993 β β β β β John Demsey β β β β 9/3/19 β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β RSU β β β β β 2,671 β β β β β 694,540 β β β β β PSU β β β β β 9,567 β β β β β 2,487,707 β β β β β β 9/3/20 β β β β β 20,054 β β β β β 0 β β β β β 218.060 β β β β β 9/3/30 β β β β β β RSU β β β β β 5,346 β β β β β 1,382,422 β β β β β PSU β β β β β 14,032 β β β β β 3,628,535 β β β β β β 9/2/21 β β β β β 21,513 β β β β β 0 β β β β β 344.060 β β β β β 9/2/31 β β β β β β RSU β β β β β 5,563 β β β β β 1,426,743 β β β β β PSU β β β β β 8,901 β β β β β 2,282,839 β β β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β β Β Β β Option Awards(1) Β Β β Stock Awards β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ βGrant
DateΒ βNumber of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1)Β βNumber of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1)Β βOption
Exercise
Price
($)Β βOption
Expiration
DateΒ β Β Award
TypeΒ βNumber of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)Β βMarket
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)Β βAward
TypeΒ βEquity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)(4)Β βEquity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(5)Β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β β 9/1/10 Β β 124,132 Β β 0 Β β $29.040 Β β 9/1/20 Β β Β β β Β β β Β β β Β β β Β β β Β β β Β Β β 9/1/11 Β β 67,056 Β β 0 Β β 49.085 Β β 9/1/21 Β β Β β β Β β β Β β β Β β β Β β β Β β β Β Β β 9/4/12 Β β 56,561 Β β 0 Β β 59.780 Β β 9/4/22 Β β Β β β Β β β Β β β Β β β Β β β Β β β Β Β β 9/4/13 Β β 34,739 Β β 0 Β β 67.310 Β β 9/4/23 Β β Β β β Β β β Β β β Β β β Β β β Β β β Β Β β 9/3/14 Β β 22,740 Β β 11,370 Β β 76.230 Β β 9/3/24 Β β Β β RSU Β β 3,644 Β $ 361,339 Β β PSU Β β 8,888 Β $ 881,334 Β Β β 9/4/15 Β β 12,512 Β β 25,026 Β β 77.350 Β β 9/4/25 Β β Β β RSU Β β 7,470 Β β 733,554 Β β PSU Β β 16,806 Β β 1,650,349 Β Β β 9/6/16 Β β 0 Β β 35,649 Β β 89.470 Β β 9/6/26 Β β Β β RSU Β β 9,687 Β β 939,639 Β β PSU Β β 14,531 Β β 1,409,507 Β Β Β
9/2/09Β Β
354,610Β Β
0Β Β
17.000Β Β
9/2/19Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 9/1/10 Β Β 248,262 Β Β 0 Β Β 29.040 Β Β 9/1/20 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 9/1/11 Β Β 167,652 Β Β 0 Β Β 49.085 Β Β 9/1/21 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 9/4/12 Β Β 183,822 Β Β 0 Β Β 59.780 Β Β 9/4/22 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 9/24/12 Β Β β Β Β β Β Β β Β Β β Β Β Β Β β Β Β β Β Β β Β Β PSU (6) Β 30,267 Β Β 3,063,626 Β Β Β 9/4/13 Β Β 117,239 Β Β 0 Β Β 67.310 Β Β 9/4/23 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 9/3/14 Β Β 85,279 Β Β 42,640 Β Β 76.230 Β Β 9/3/24 Β Β Β Β RSU Β Β 13,665 Β Β 1,355,021 Β Β PSU Β Β 33,329 Β Β 3,304,904 Β Β Β 9/4/15 Β Β 49,419 Β Β 98,839 Β Β 77.350 Β Β 9/4/25 Β Β Β Β RSU Β Β 29,506 Β Β 2,897,489 Β Β PSU Β Β 66,387 Β Β 6,519,203 Β Β Β 9/4/15 Β Β β Β Β β Β Β β Β Β β Β Β Β Β β Β Β β Β Β β Β Β PSU (7) Β 387,848 Β Β 38,086,674 Β Β Β 9/6/16 Β Β 0 Β Β 151,163 Β Β 89.470 Β Β 9/6/26 Β Β Β Β RSU Β Β 41,071 Β Β 3,983,887 Β Β PSU Β Β 61,607 Β Β 5,975,879 Β Β
β
9/4/12
Β
β
110,862
Β
β
0
Β
β
59.780
Β
β
9/4/22
Β Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
β
βΒ Β β 9/4/13 Β β 42,990 Β β 0 Β β 67.310 Β β 9/4/23 Β β Β β β Β β β Β β β Β β β Β β β Β β β Β Β β 9/3/14 Β β 30,565 Β β 15,283 Β β 76.230 Β β 9/3/24 Β β Β β RSU Β β 4,898 Β β 485,686 Β β PSU Β β 11,945 Β β 1,184,466 Β Β β 9/4/15 Β β 17,861 Β β 35,723 Β β 77.350 Β β 9/4/25 Β β Β β RSU Β β 10,665 Β β 1,047,303 Β β PSU Β β 23,996 Β β 2,356,407 Β Β β 9/6/16 Β β 0 Β β 53,531 Β β 89.470 Β β 9/6/26 Β β Β β RSU Β β 14,545 Β β 1,410,865 Β β PSU Β β 21,818 Β β 2,116,346 Β Β β 9/6/16 Β β β Β β β Β β β Β β β Β β Β β RSU (8) β 16,766 Β β 1,626,302 Β β β Β β β Β β β Β Β Β
9/3/14Β Β
0Β Β
23,305Β Β
76.230Β Β
9/3/24Β Β Β Β
RSUΒ Β
7,469Β Β
740,626Β Β
PSUΒ Β
18,217Β Β
1,806,398Β Β Β 9/4/15 Β Β 0 Β Β 55,050 Β Β 77.350 Β Β 9/4/25 Β Β Β Β RSU Β Β 16,434 Β Β 1,613,819 Β Β PSU Β Β 36,975 Β Β 3,630,945 Β Β Β 1/28/16 Β Β β Β Β β Β Β β Β Β β Β Β Β Β β Β Β β Β Β β Β Β PSU (9) Β 71,694 Β Β 7,018,843 Β Β Β 9/6/16 Β Β 0 Β Β 80,334 Β Β 89.470 Β Β 9/6/26 Β Β Β Β RSU Β Β 21,829 Β Β 2,117,413 Β Β PSU Β Β 32,744 Β Β 3,176,168 Β Β
β
9/4/13
Β
β
47,228
Β
β
0
Β
β
67.310
Β
β
9/4/23
Β Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
β
β
Β
β
βΒ Β β 9/3/14 Β β 33,712 Β β 16,856 Β β 76.230 Β β 9/3/24 Β β Β β RSU Β β 5,402 Β β 535,662 Β β PSU Β β 13,175 Β β 1,306,433 Β Β β 9/4/15 Β β 19,987 Β β 39,975 Β β 77.350 Β β 9/4/25 Β β Β β RSU Β β 11,933 Β β 1,171,821 Β β PSU Β β 26,849 Β β 2,636,572 Β Β β 9/6/16 Β β 0 Β β 58,341 Β β 89.470 Β β 9/6/26 Β β Β β RSU Β β 15,853 Β β 1,537,741 Β β PSU Β β 23,780 Β β 2,306,660 Β
(1)(1)"PotentialβPotential Payments upon Termination of Employment or Change of ControlβββEvents of Termination under the Employment Agreements and under the Share Incentive Plan."β The amounts shown above for outstanding stock options for Mr.Β ProuvΓ© and Mr.Β Demsey reflect that their unvested stock options became immediately exercisable upon their retirement dates (JuneΒ 30, 2022 and MarchΒ 4, 2022, respectively). See βPotential Payments upon Termination of Employment or Change of ControlβββRetirement of Cedric ProuvΓ©β and βPotential Payments upon Termination of Employment or Change of ControlβββRetirement of John Demsey.ββ β β β "PotentialβPotential Payments upon Termination of Employment or Change of ControlβββEvents of Termination under the Employment Agreements and under the Share Incentive Plan."β The SeptemberΒ 3, 2019 non-annual RSU grant to Ms.Β Travis for 10,026 shares is discussed in note (10) below. The SeptemberΒ 2, 2021 non-annual RSU grant to Ms.Β Hudis for 10,173 shares is discussed in note (12) below. Following retirement, the outstanding RSUs for Mr.Β ProuvΓ© and Mr.Β Demsey will continue to vest and be paid in accordance with the vesting schedule for each award. See βPotential Payments upon Termination of Employment or Change of ControlβββRetirement of Cedric ProuvΓ©β and βPotential Payments upon Termination of Employment or Change of ControlβββRetirement of John Demsey.β(3)$95.98$254.67 (which was the closing price of the ClassΒ A Common Stock on JuneΒ 30, 2017, the last trading day of fiscal 2017)2022) and (ii)Β the number of shares of ClassΒ A Common Stock underlying the RSUs, and (b)Β the cash dividend equivalents.equivalents related to such RSUs. As of JuneΒ 30, 2017,2022, the NEOs had earned dividend equivalents on outstanding unvested RSUs with dollar values as follows: Mr.Β Lauder, $38,052;$30,186; Mr.Β Freda, $150,850;$127,537; Ms.Β Travis, $71,189;$102,189; Ms.Β Hudis, $55,326; Mr.Β ProuvΓ©, $48,001; and Mr.Β Demsey, $82,500; and Mr.Β ProuvΓ©, $59,840.$45,286.(4)maximum levelactual payouts in SeptemberΒ 2022 of payout of shares of ClassΒ A Common Stock underlying the outstandingannual PSUs granted on SeptemberΒ 4, 20153, 2019 (fiscal 2016)2020), except for the PSU granted to Mr.Β Freda on that date for 387,848 shares, which is discussed in footnote (7)at an aggregate payout of 119.4%; (b)Β the maximum level of payout for the annual PSUs granted on SeptemberΒ 6, 2016 (fiscal 2017); and (c)Β the actual payouts in September 2017 of the outstanding PSUs granted(i)Β on SeptemberΒ 3, 20142020 (fiscal 2015), at an aggregate payout of 81.3%. The amounts also include accumulated dividend equivalents2021) and (ii)Β on SeptemberΒ 2, 2021 (fiscal 2022); (c)Β the shares referencedunderlying the additional (non-annual) equity awards granted to Mr.Β Freda in clauseΒ (a)(i)Β SeptemberΒ 2015 (fiscal 2016) (third (final) tranche), (ii)Β FebruaryΒ 2018 (fiscal 2018), and clauseΒ (b) above.(iii)Β MarchΒ 2021 (fiscal 2021) (PVUs and PSUs), which are discussed in notes (6), (7), (8), and (9)Β below; and (d)Β the shares underlying the additional (non-annual) equity award granted to Ms.Β Travis in SeptemberΒ 2021 (fiscal 2022), which is discussed in note (11) below. In connection with the sharesSeptemberΒ 2022 PSU payouts referenced in clause (c)(a)Β above, each NEO also received a cash payment in SeptemberΒ 20172022 reflecting dividend equivalents on such shares as follows: Mr.Β Lauder, $28,264;$35,677; Mr.Β Freda, $105,986;$156,069; Ms.Β Travis, $37,985;$58,503; Ms.Β Hudis, $42,805; Mr.Β ProuvΓ©, $62,592; and Mr.Β Demsey, $57,930; and Mr.Β ProuvΓ©, $41,897.$57,019. Payouts under the fiscal 20162021 annual PSUs and the fiscal 20172022 annual PSUs will be made in early fiscal 20192024 and early fiscal 2020,2025, respectively, assuming the performance criteria are achieved. Following retirement, the outstanding PSUs for Mr.Β ProuvΓ© and Mr.Β Demsey will continue to vest and be paid in accordance with the vesting schedule for each award, with payment to be made at the same time such awards are paid to active executives. See βPotential Payments upon Termination of Employment or Change of ControlβββRetirement of Cedric ProuvΓ©β and βPotential Payments upon Termination of Employment or Change of ControlβββRetirement of John Demsey.β(5)$95.98$254.67 (which was the closing price of the ClassΒ A Common Stock on JuneΒ 30, 2017, the last trading day of fiscal 2017)2022) and (ii)Β the number of shares of ClassΒ A Common Stock underlying the PSUs asand PVUs at the levels described below,in notes (4), (6), (7), (8), (9), and (11), and (b)Β the cash dividend equivalents.equivalents related to such PSUs and PVUs. As of JuneΒ 30, 2017,2022, the NEOs had dividend equivalents on outstanding fiscal 2016 PSUs and fiscal 2017 PSUs, and for Mr.Β Freda, the outstanding PSUs awarded on SeptemberΒ 24, 2012, with dollar valuesand PVUs shown in the table, as follows: Mr.Β Lauder, $52,131; Mr.Β Freda, $1,229,840; Ms.Β Travis, $75,525; Mr.Β Demsey, $253,136; and Mr.Β ProuvΓ©, $83,861. Thefollows (these amounts for Mr.Β Freda and Mr.Β Demseydo not include the cash dividend equivalents on the additional PSU awards granted to Mr.Β Freda on SeptemberΒ 24, 2012 and SeptemberΒ 4, 2015, and Mr.Β Demsey on JanuaryΒ 28, 2016, respectively. The final tranche of Mr.Β Freda's outstanding PSUs awarded on SeptemberΒ 24, 2012 vested on JuneΒ 30, 2017 and was paid out on AugustΒ 23, 2017.(6)Represents PSUs with a performance period divided into three tranches, with the first having a three year performance period ended JuneΒ 30, 2015; the second, a four year performance period ended JuneΒ 30, 2016; and the third, a five year performance period ended JuneΒ 30, 2017. The payout of these PSUs was based upon the relative TSR over the relevant performance period as compared to the S&PΒ 500 Companies. For the performance period ended JuneΒ 30, 2017, the Company's TSR was ranked at the 46thΒ percentile, which resultedaddressed in a payout of 30,267 shares of the Company's ClassΒ A Common Stock on AugustΒ 23, 2017. This share amount is 55.8% of the target number of shares. Under the terms of the grant, upon payout of the shares, dividend equivalents in connection with the shares earned by Mr.Β Fredanote (4)Β that were paid out in cash in the amount of $158,599.SeptemberΒ 2022): Mr.Β Lauder, $49,598; Mr.Β Freda, $3,700,725; Ms.Β Travis, $104,466; Ms.Β Hudis, $61,219; Mr.Β ProuvΓ©, $74,987; and Mr.Β Demsey, $71,025.(7)tranches, with thetranches. The first havingtranche had a three yearthree-year performance period endingthat ended JuneΒ 30, 2018; the second had a four yearthree-year performance period endingthat ended JuneΒ 30, 2019; and the third had a five yearthree-year performance period endingthat ended JuneΒ 30, 2020. Payment with respect to a tranche will be made on the third anniversary of the last day of the respective performance period. Accordingly, the payout of the first tranche was made, including payment of dividend equivalents in cash, on JuneΒ 30, 2021. The payout of the second tranche was made, including payment of dividend equivalents in cash, on JuneΒ 30, 2022, which is reflected in βOption Exercises and Stock Vested in Fiscal 2022.β The payout of the third tranche will be made onβ β β β table.(8)Represents RSUs that vest 100% on OctoberΒ 31, 2019. The accumulated dividend equivalents are includedtable as well as in the amount shown in note (3)(5)Β above. For additional information about this award, see βCompensation Discussion and AnalysisβββAdditional (non-annual) Performance-Based Long-Term Equity Grants to CEO in Fiscal 2016, Fiscal 2018, and Fiscal 2021.β(9)PSUs with a performance periodlong-term (non-annual) MarchΒ 2021 PVU award. This award is divided into three tranches each with its own stock price goal, all of which were achieved in fiscal 2022, and all three tranches are subject to the Cumulative Operating Income goal that is measured from JulyΒ 1, 2021 through JuneΒ 30, 2025. Delivery of the shares for each tranche will be made on SeptemberΒ 2, 2025, subject to the terms and conditions of this award. Dividend equivalents will be paid out in cash in connection with the first having a three year performance period ending JanuaryΒ 29, 2018;delivery of any shares. For additional information about this award, including Service Periods and Performance Periods, see βCompensation Discussion and AnalysisβββAdditional (non-annual) Performance-Based Long-Term Equity Grants to CEO in Fiscal 2016, Fiscal 2018, and Fiscal 2021.βsecond, a four year performance period ending JanuaryΒ 29, 2019; andtarget level of payout for the third, a five year performance period endinglong-term (non-annual) MarchΒ 2021 PSU award. This award is subject to the Cumulative Operating Income goal that is measured from JulyΒ 1, 2021 through JuneΒ 29, 2020. Because30, 2025. Delivery of the Company achieved positive Net Earnings for fiscal 2017, the payout of these PSUs is based solely on achievement of certain financial measures. The PSUs are accompanied by dividend equivalent rights thatshares will be payablemade on SeptemberΒ 2, 2025, subject to the terms and conditions of this award. Dividend equivalents will be paid out in cash in connection with the delivery of any shares. For additional information about this award, including Service Period and Performance Period, see βCompensation Discussion and AnalysisβββAdditional (non-annual) Performance-Based Long-Term Equity Grants to CEO in Fiscal 2016, Fiscal 2018, and Fiscal 2021.βsame time asdate of grant, and it is intended to recognize the payment of sharesexpanded responsibilities that Ms.Β Travis has assumed in connection with certain strategic initiatives and to provide additional incentive for her to remain in her role for the duration of the Company's ClassΒ A Common Stock, and suchaward. The accumulated dividend equivalents are included in the dollar amount shown in the table.table as well as in the amount shown in note (3)Β above.β β β β 2017on the vesting ofin connection with stock awards in fiscal 2017.2022.β β β β β Option Awards β β Stock Awards β β β β Name β β
Acquired on
Exercise
(#)β β
on Exercise
($)(1)β β
Acquired on
Vesting
(#)(2)β β
on Vesting
($)(3)β β β β William P. Lauder β β β β 52,430(4) β β β β $ 10,971,917 β β β β β 13,785(5) β β β β $ 4,698,315 β β β β β Fabrizio Freda β β β β 127,919(6) β β β β β 24,048,772 β β β β β 188,867(7) β β β β β 54,681,696(8) β β β β β Tracey T. Travis β β β β 101,169(9) β β β β β 23,989,493 β β β β β 22,916(10) β β β β β 7,814,874 β β β β β Jane Hertzmark Hudis β β β β β β β β β β β β β β β β 30,008(11) β β β β β 10,071,411(12) β β β β β Cedric ProuvΓ© β β β β β β β β β β β β β β β β 24,689(13) β β β β β 8,426,266 β β β β β John Demsey β β β β 42,994(14) β β β β β 5,197,099 β β β β β 24,846(15) β β β β β 8,489,042 β β β Β Option AwardsΒ Stock AwardsΒ βNumber of Shares
Acquired on
Exercise
(#)Β βValue Realized
on Exercise
($)(1)Β βNumber of Shares
Acquired on
Vesting
(#)(2)Β βValue Realized
on Vesting ($)(3)Β β β β β β β β β β β β β β β Β β 777,304 (4) $ 47,983,414 Β β 24,087 (5) $ 2,186,176 Β Β Β 0 Β Β 0 Β Β 167,240 (6) Β 15,738,561 Β Β β 0 Β β 0 Β β 30,906 (7) β 2,802,780 Β Β Β 71,838 (8) Β 1,340,667 Β Β 46,003 (9) Β 4,170,544 Β Β β 82,608 (10) β 2,432,806 Β β 34,085 (11) β 3,090,790 Β
(1)(1)(2)2013,2018, SeptemberΒ 2014,2019, and SeptemberΒ 2015.2020, and (b)Β for Ms.Β Hudis, the non-annual RSU granted to her on SeptemberΒ 4, 2018. Also represents the payout ofβ(a) the annual PSUs granted onto the NEOs in SeptemberΒ 4, 20132018 and (b)Β for Mr.Β Freda, the second of three tranches of the PSUsnon-annual PSU granted to him on SeptemberΒ 24, 2012.4, 2015, which is discussed in the βCompensation Discussion and AnalysisβββAdditional (non-annual) Performance-Based Long-Term Equity Grants to CEO in Fiscal 2016, Fiscal 2018, and Fiscal 2021βββAdditional PSU Grant in SeptemberΒ 2015 (fiscal 2016).β(3)equivalent rights attached toequivalents for the RSUsPSUs and PSUs,RSUs, which were payablepaid in cash at the time of the payoutspayout of the shares.(4)2007,2016, SeptemberΒ 2008,2017, SeptemberΒ 2018, and SeptemberΒ 2009. Mr. Lauder continues to hold the shares acquired upon exercise.2019.(5)6,4257,495 shares withheld from Mr.Β Lauder to satisfy taxes upon RSU vestingsvesting of PSUs and RSUs at a combined value of $559,810; also includes 5,437 shares withheld to satisfy taxes upon PSU vesting at a value of $486,448.approximately $2.52Β million.(6)40,31134,191 shares withheld from Mr.Β Freda to satisfy taxes upon RSU vestingsvesting of annual PSUs and RSUs at a combined value of approximately $11.50Β million. Also includes 68,456 shares withheld from Mr.Β Freda to satisfy taxes upon delivery of the second tranche of shares (129,283) from his SeptemberΒ 4, 2015 (non-annual) PSU at a value of $3,659,845; also includes 51,546approximately $17.43Β million.PSU vestings at a value(i)Β vesting of $4,665,005.annual PSUs and RSUs, and (ii)Β delivery of the second tranche of shares from his SeptemberΒ 4, 2015 (non-annual) PSU.(7)7,91112,177 shares withheld from Ms.Β Travis to satisfy taxes upon vesting of PSUs and RSUs at a combined value of approximately $4.10Β million.β β β β vestingsgranted on SeptemberΒ 4, 2018 at a value of $689,285; also includes 6,437approximately $2.70Β million.PSU(i)Β vesting of annual PSUs and RSUs, and (ii)Β delivery of the non-annual RSU granted on SeptemberΒ 4, 2018.$575,918.approximately $4.42Β million.(8)2013,2018, SeptemberΒ 2014,2019, and SeptemberΒ 2015.2020.(9)12,93814,258 shares withheld from Mr.Β Demsey to satisfy taxes upon RSU vestingsvesting of PSUs and RSUs at a combined value of $1,127,288; also includes 12,743 shares withheld to satisfy taxes upon PSU vesting at a value of $1,140,116.(10)The options exercised by Mr.Β ProuvΓ© were granted in September 2012.(11)Includes 8,758 shares withheld from Mr.Β ProuvΓ© to satisfy taxes upon RSU vestings at a value of $763,085; also includes 8,822 shares withheld to satisfy taxes upon PSU vesting at a value of $789,304.
β"RGA Plan"βRGA Planβ), which is a qualified plan, and The Estee Lauder Inc. Benefits Restoration Plan (the "Restoration Plan"βRestoration Planβ), which is a nonqualified plan. The Restoration Plan provides for pension benefit payments that employees would have received under the RGA Plan if eligible compensation (including deferred salary and bonuses, where the RGA Plan allows) had not been subject to certain compensation limits as dictated by tax laws under ERISA that apply to qualified retirement plans.The aggregate amountUpon retirement, the accumulated benefit under the RGA Plan is payable, at the election of the retiree, as a one-time lump sum under both plans or converted to monthly lifetime paymentspayments. Upon retirement, the accumulated benefit under the RGA Plan.Company'sCompanyβs qualified and nonqualified pension and qualified retirement savings plans on his behalf. Such deferrals are credited with interest as of each JuneΒ 30 during the term of deferral, compounded annually, at an annual rate equal to the annual rate of interest announced by Citibank N.A. in New York, New York as its base rate in effect on such JuneΒ 30, but in no event more than 9%.isare each NEO'sNEOβsΒ years of credited service and the present value of the accumulated benefit under each of the pension plans and executive employment agreements pursuant to which he or shethe officer would be entitled to a retirement benefit, computed in each case as of the same pension plan measurement date used for financial statement reporting purposes with respect to our audited financial statements for the fiscal year ended JuneΒ 30, 2017.βPlan NameΒ βNumber of Years
Credited Service
(#)(1)Β βPresent Value of
Accumulated Benefit
($)Β βPayments During
Last Fiscal Year
($)Β Β β β β β β β β β β β β β Β Β 31 Β $ 528,611 Β $ 0 Β Β Β Β Β Β 4,702,117 Β Β 0 Β Β Β 9 Β β 93,691 Β β 0 Β Β Β β Β β 1,783,113 Β β 0 Β Β Β β Β β 3,314,698 Β β 0 Β Β Β 4 Β Β 34,498 Β Β 0 Β Β Β Β Β Β 181,604 Β Β 0 Β Β Β 26 Β β 455,254 Β β 0 Β Β Β β Β β 3,074,625 Β β 0 Β Β Β 24 Β Β 312,074 Β Β 0 Β Β Β Β Β Β 2,312,715 Β Β 0 Β β β β β β β Name β β PlanΒ Name β β
Credited Service
(#)(1)β β
Accumulated
Benefit
($)β β
Last Fiscal Year
($)β β β β William P. Lauder β β RGA Plan β β β β 36 β β β β $ 688,101 β β β β $ 0 β β β β Restoration Plan β β β β β β β β β β 6,703,306 β β β β β 0 β β β β β Fabrizio Freda β β RGA Plan β β β β 14 β β β β β 183,307 β β β β β 0 β β β β Restoration Plan β β β β β β β β β β 4,009,929 β β β β β 0 β β β β Employment Agreement β β β β β β β β β β 4,761,441 β β β β β 0 β β β β β Tracey T. Travis β β RGA Plan β β β β 9 β β β β β 99,803 β β β β β 0 β β β β Restoration Plan β β β β β β β β β β 684,129 β β β β β 0 β β β β β Jane Hertzmark Hudis β β RGA Plan β β β β 36 β β β β β 705,122 β β β β β 0 β β β β Restoration Plan β β β β β β β β β β 2,000,811 β β β β β 0 β β β β β β β RGA Plan β β β β 29 β β β β β 440,914 β β β β β 0 β β β β Restoration Plan β β β β β β β β β β 3,794,322 β β β β β 0 β β β β β β β RGA Plan β β β β 31 β β β β β 631,597 β β β β β 0 β β β β Restoration Plan β β β β β β β β β β 4,616,515 β β β β β 0 β β β 20172022 and is used to determine the level of annual credits for calendar 2017.2022.(age(i.e. the greater ofβ(i) a participantβs age at JuneΒ 30, 2022 and (ii)Β age 65)., or retirement date, if applicable. The present values for the RGA Plan also reflect the assumption that 85%75% of benefits are payable as a one-time lump sum, and 15%25% are payable as lifetime monthly payments. Amounts calculated under the pension formula based on compensation that exceeds IRS limits will be paid under the Restoration Plan and are included in the present values shown in the table above. The present values for the Restoration Plan also reflect the assumption that 100% of the benefits are payable as a one-time lump sum. The present values of accumulated benefits under the RGA Plan were calculated using a 3.9%4.5% discount rate and, for annuities, the RP-2014SOA PRI-2012 mortality table projected generationally using scale MP-2016,MP-2021, and present values under the Restoration Plans were calculated using a 3.4%4.3% discount rate. These assumptions are consistent with the assumptions used in the calculation of our benefit obligations as of JuneΒ 30, 2017,2022, as disclosed in Note 1415 (Pension, Deferred Compensation and Post-Retirement Benefit Plans) to our audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended JuneΒ 30, 2017.2022.20172022 and at JuneΒ 30, 20172017.2022. Mr.Β Lauder is the only NEO who has deferred a portion of his compensation.βExecutive
Contributions
in Last FY
($)Β βRegistrant
Contributions
in Last FY
($)Β βAggregate
Earnings
in Last FY
($)(1)Β βAggregate
Withdrawals/
Distributions
($)Β βAggregate
Balance at
Last FYE
($)Β Β β β β β β β β β β β β β Β β Β β Β $297,801 Β β Β $7,231,219 (2) Β β Β β Β β Β β Β β Β Β β Β β Β β Β β Β β Β Β β Β β Β β Β β Β β Β Β β Β β Β β Β β Β β Β β β β β β β Name β β
Contributions
in Last FY
($)β β
Contributions
in Last FY
($)β β
Earnings
in Last FY
($)(1)β β
Withdrawals/β
Distributions
($)β β
Balance at
Last FYE
($)β β β β William P. Lauder β β β β β β β β β β β β β β β $ 406,403 β β β β β β β β β β $ 8,962,253(2) β β β β β Fabrizio Freda β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Tracey T. Travis β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Jane Hertzmark Hudis β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Cedric ProuvΓ© β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β John Demsey β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β theirhis employment agreements,agreement, Mr.Β Lauderβs deferred compensation accounts of the NEOs who elect to (or were in the past required to) defer compensation areaccount is credited with interest as of each JuneΒ 30 during the term of deferral, compounded annually, at an annual rate equal to the annual rate of interest announced by Citibank N.A. in New York, New York as its base rate in effect on such JuneΒ 30, but in no event more than 9%. As of JuneΒ 30, 2017,2022, the interest rate used for crediting purposes was 4.25% as compared with 120% of the applicable federal rate of 3.22%4.75%.(2)$1,934,853;$3,330,183; also includes the deferral of 50% of Mr.Β Lauder'sLauderβs fiscal 2003 bonus as reported in the Summary Compensation Tables contained in prior proxy statements in the amount ofβ $763,500 and interest thereon ofβ $638,866.$974,570. Pursuant to Mr.Β Lauderβs employment agreement, the Company had the ability to select the date of payment to Mr.Β Lauder of the amounts he deferred prior to DecemberΒ 31, 2004 and the associated earnings thereon (the βPre-409A Balanceβ). In DecemberΒ 2021 (fiscal 2022), the Company selected JulyΒ 2022 (fiscal 2023) for the timing of the payout to Mr.Β Lauder of his entire Pre-409A Balance, and such payment was made on AugustΒ 1, 2022 (the first business day following the end of July) in the amount ofβ $3,411,670. In accordance with his employment agreement, the remainder balance of Mr.Β Lauderβs deferred compensation account is payable upon the first to occur ofβ (i)Β his death or (ii)Β the first business day following the expiration of the 6-month period after Mr.Β Lauderβs separation from service.his or her employment with the Company under various circumstances described below. Certain employment agreements may also impact the treatment of equity grants upon termination of employment. For purposes of the following descriptions, "Contract Year"βContract Yearβ means the twelve-month period beginning JulyΒ 1 and ending the following JuneΒ 30.β β β β days'daysβ prior written notice, in which event we will have no further obligations after termination other than (i)Β to pay the executive'sexecutiveβs accrued but unpaid salary and bonus compensation, if any, earned but not paid that relates to any Contract Year ended prior to the date of termination.termination, and (ii)Β if applicable, to make certain post termination payments and continue certain benefits in connection with theβ β β β RSUs PSUs and PSUsRSUs are forfeited. For those NEOsexecutives who are retirement eligible, including Mr.Β Lauder, Mr.Β Freda, Ms.Β Travis, and Ms.Β Hudis, if they choose to retire, (i)Β stock options that are not yet exercisable become immediately exercisable and may be exercised until the end of the option term; (ii)Β annual RSUs will continue to vest and be paid in accordance with the vesting schedule for each award; and (iii)Β annual PSUs will continue to vest and be paid as if the executive had been employed throughout the entire award period, with payment to be made at the same time such awards are paid to active executives. Such conditions do not apply to the (i)Β non-annual PSUs granted to (A)Β Mr.Β Freda onin SeptemberΒ 4, 2015, for 387,848 shares,FebruaryΒ 2018, and (B)MarchΒ 2021; (ii)Β non-annual PVUs granted to Mr.Β Demsey on JanuaryΒ 28, 2016. Therefore,Freda in MarchΒ 2021; (iii)Β non-annual RSUs granted to Ms.Β Travis in SeptemberΒ 2019; (iv)Β non-annual PSUs granted to Ms.Β Travis in SeptemberΒ 2021; and (v)Β non-annual RSUs granted to Ms.Β Hudis in SeptemberΒ 2021. For those non-annual equity awards, retirement would result in forfeiture of theseany unearned, unvested awards.tranche, and any earned and vested tranche would be paid in accordance with the award agreement. In order to be retirement eligible, the executive must be at least 55Β years old and have been employed by the Company for at least tenΒ years, or the executive must be at least 65Β years old and have been employed by the Company for at least fiveΒ years. Among our NEOs, Mr.Β Freda,The Share Incentive Plan provides for forfeiture of outstanding awards in the event that after termination of employment, a participant competes with or otherwise conducts herself or himself in a manner adversely affecting the Company. Mr.Β Lauder, Mr.Β Demsey,Freda, Ms.Β Travis, and Mr.Β ProuvΓ©Ms.Β Hudis were retirement eligible as of JuneΒ 30, 2017,2022, and Mr.Β Demsey was retired as of that date. Mr.Β ProuvΓ© was an executive officer as of JuneΒ 30, 2022, and he was retirement eligible when he retired effective as such date. Pursuant to HR policy, retired executives are eligible to receive (i)Β payments for retirement transition services (up to a total ofβ $75,000), and (ii)Β Company products (up to $1,280 per year, based on suggested retail prices) at no cost to the retired executive. In addition, Mr.Β Lauder, Mr.Β ProuvΓ©, and Mr.Β Demsey are entitled to payment in lieu of a medical reimbursement program that was discontinued, and Ms.Β Travis wasand Ms.Β Hudis are not.NEO'sNEOβs employment at any time by reason of a "permanent disability" (asβpermanent disabilityβ β(as defined in the executive'sexecutiveβs employment agreement), in which event the executive will be entitled to receive the following payments: (i)Β any accrued but unpaid salary and other amounts to which the executive otherwise is entitled prior to the date of termination; (ii)Β base salary in effect at the time of termination (less disability payments) for a period of one year from the date of termination; (iii)Β bonus compensation earned but not paid that relates to any Contract Year ended prior to the date of termination; (iv)Β unpaid bonus compensation otherwise payable for the Contract Year in which the disability occurred pro-rated to the date of termination; and (v)Β reimbursement for financial counseling services in the amount ofββ$5,000 for a period of one year from the date of termination.executive'sexecutiveβs permanent disability, the executive will be entitled to continue to participate, to the extent permitted by applicable law and the applicable plan, in our health care, life insurance, and accidental death and dismemberment insurance benefit plans for a period of one year from the date of termination (the "DisabilityβDisability Continuation Period"Periodβ) disregarding any required delay in payments pursuant to SectionΒ 409A of the Internal Revenue Code ("(βSectionΒ 409A"409Aβ). Since continued participation in the 401(k) Savings Plan and the RGA Plan is not permitted under law during the Disability Continuation Period, the executive will be entitled to receive cash payments equivalent in value to the executive'sexecutiveβs continued participation in all qualifiedβ β β β "PensionβPension Replacement Payment"Paymentβ) during the Disability Continuation Period. See "EffectβEffect of Certain Tax Regulations on Payments"Paymentsβ below.executive'sexecutiveβs permanent disability (as determined in the applicable grant agreement), stock options that are not yet exercisable become immediately exercisable and may be exercised until the earlier of one year after the last day of salary continuation or the expiration of the option term, subject to the non-competition and good conduct provisions of the executive'sexecutiveβs employment agreement and the Share Incentive Plan (including the applicable grant agreements). RSUs willRSU grants made prior to SeptemberΒ 2020 (fiscal 2021) generally vest pro-rated for the number of fullΒ months the executive was employed or receiving salary continuation payments during the applicable vesting period and will be paid in accordance with the vesting schedule for each award. The executive will be entitled to a pro-rated payment of PSUs based on actual achievement of PSU opportunities for the number of fullΒ months the executive was employed or receiving salary continuation payments during the award period, with the payment to be made at the same time payments for the award period are paid to active executives. For annual equity grants made in SeptemberΒ 2020 and later, (i)Β RSUs will continue to vest and be paid in accordance with the vesting schedule for each award and (ii)Β PSUs will continue to vest and be paid based on actual achievement of PSU opportunities, with payment to be made at the same time such awards are paid to active executives. If the executive is retirement eligible, the provisions relating to termination upon retirement for annual equity grants will apply in lieu of the provisions relating to "permanentβpermanent disability."officer'sofficerβs death during the term of employment, the executive'sexecutiveβs beneficiary or legal representative will be entitled to receive the payments described in clauses (i)Β through (v)Β in the first paragraph above under βTermination of Employment upon Permanent Disabilityβ as if employment had been terminated by us upon permanent disability.executive'sexecutiveβs death, stock options RSUs, and PSUsRSUs will be treated the same as if employment had been terminated by us upon permanent disability, except that RSUs and PSUs will be paid as soon as practicable after the executive's death andexecutiveβs death. Annual PSUs are pro-rated based on target. Iftarget for grants made prior to SeptemberΒ 2020. For such grants, if the executive is retirement eligible at the time of death, the provisions relating to termination upon retirement will apply in lieu of the provisions relating to death.executive'sexecutiveβs employment for any reason upon 90Β days'daysβ prior written notice. In the event of our termination of the executive'sexecutiveβs employment (other than for cause, permanent disability, or death) or a termination by the executive for an uncured "material breach" (asβmaterial breachβ β(as defined below), theβ β β β executive'sexecutiveβs Pension Replacement Payment during such period. For purposes of the employment agreements, "material breach"βmaterial breachβ is a material reduction in the executive'sexecutiveβs authority, functions, duties, or responsibilities, a material reduction in the executive'sexecutiveβs target compensation (unless such reduction is similar to other officers and/or employees generally), or our failure to pay any award to which the executive is entitled under his or her employment agreement.executive'sexecutiveβs employment by us without "cause" (asβcauseβ β(as defined in the applicable grant agreement), stock options and RSUs will be treated the same as if employment had been terminated by us upon permanent disability. Annual PSUs are forfeited if termination by us without "cause"βcauseβ occurs before the end of the first year of the award period. However, if termination occurs after the end of the first year of the award period, the executive will be entitled to a pro ratapro-rated payout based on actual achievement of annual PSU opportunities for the number of fullΒ months the executive was employed or receiving salary continuation payments during the award period, with the payment to be made at the same time such awards are paid to active executives. If the executive is retirement eligible, the provisions relating to termination upon retirement will apply in lieu of the provisions described in this paragraph."good reason" (asβgood reasonβ β(as defined below) within twoΒ years of a "changeβchange of control" (ascontrolβ β(as defined below) of our Company, the executive is entitled to receive payments and benefits as if employment were terminated by us without cause. For purposes of the employment agreements, "good reason"βgood reasonβ means that the executive is assigned duties that are materially inconsistent with his or her position, the executive'sexecutiveβs position is materially diminished, we breach the compensation arrangements of the employment agreement (and fail to timely cure the breach), the executive is required to relocate to any location more than 50 miles from the location at which the executive performed services prior to the change of control, or we fail to have any successor company assume the executive'sexecutiveβs employment agreement."changeβchange of control"controlβ or "changeβchange in control"controlβ is deemed to have occurred upon any of the following events:"continuing directors" (asβcontinuing directorsβ β(as defined below) cease for any reason to constitute a majority of the board of directors. "Continuing directors"βContinuing directorsβ mean the directors in office on the effective date of the executive officer'sofficerβs employment agreement and any successor to those directors and any additional director who was nominated or selected by a majority of the continuing directors in office at the time of his or her nomination or selection;β’β’β β β β β’SEC'sSECβs proxy rules."changeβchange in control,"β each RSUannual PSU and PSUeach RSU will vest and become payable in shares as soon as practicable, but not later than two weeks after the change in control. If the executive is retirement eligible, the provisions relating to termination upon retirement will apply in lieu of the provisions described in this paragraph. If stock options are assumed by an acquirer, then exercisability will be accelerated after a change in control if the executive is terminated without "cause"βcauseβ or the executive terminates for "goodβgood reason."β Similarly, if RSUs are assumed by the acquirer, vesting will be accelerated after a change in control if the executive is terminated without "cause"βcauseβ or the executive terminates for "goodβgood reason."β Annual PSUs in respect of the performance period that has not ended will become payable after a change in control in shares equal to the greater of the target award or what the payout would be based on performance as if the performance period ended on the date of the change in control."cause" (asβcauseβ β(as defined in the executive's employment agreement), the executive will be entitled to receive accrued but unpaid salary and any benefit under our employee benefit programs and plans as of the date of such termination. In addition, the employment agreements contain certain provisions concerning termination for "cause."βcause.β For purposes of these agreements and the equity grant agreements, "cause"βcauseβ means that the executive has engaged in any of a list of specified activities including, but not limited to, material breach of, or willful refusal to perform duties under, the agreements, failure to follow a material lawful directive of the Chief Executive Officer, Executive Chairman, or the Board of Directors that is within the scope of the executive'sexecutiveβs duties, willful misconduct unrelated to us that could reasonably be anticipated to have a material adverse effect on us, gross negligence that could reasonably be anticipated to have a material adverse effect on us, violation of our Code of Conduct, drug or alcoholstock options, RSUs, and PSUsequity grants are forfeited.executive'sexecutiveβs employment agreement or any vested benefit the executive may have in any of our benefit plans. The agreements also include provisions relating to nondisclosure of our confidential information and non-competition with us.β β β β theirthe respective agreements,agreement, taken together with any amounts or benefits otherwise paid to the executive by us or any of our affiliated companies, are parachute payments subject to excise tax under SectionΒ 4999 of the Internal Revenue Code, the executive may elect to pay the excise tax on such payments or scale back the amounts paid to the executive to the extent necessary (but not below zero) to eliminate the excise tax. NEOs are not entitled to any tax gross-up in the event they are subject to excise taxes payable under SectionΒ 4999 of the Internal Revenue Code in connection with a change in control."specified employee"βspecified employeeβ for purposes of SectionΒ 409A at the time of termination of service. Amounts that otherwise would have been paid during this six-month delay will be paid in a lump sum on the first day after such period expires.that payment.Tablepayments due by reason of Contentseach NEOMr.Β Lauder, Mr.Β Freda, Ms.Β Travis, and Ms.Β Hudis or such officer'sofficerβs estate under the officer'sofficerβs employment agreement or related plans and agreements, including the Share Incentive Plan (including the applicable grant agreements), if employment had been terminated under various circumstances on JuneΒ 30, 2017.2022. For equity awards, we used the closing stock price on JuneΒ 30, 2017.to a NEO can only be determined at the time of the actual termination.β’NEO'sNEOβs employment is terminated. These amounts include accrued but unpaid salary and bonus compensation earned but not paid that relate to any Contract Year ended prior to termination, and in all circumstances but termination for cause, unpaid bonus compensation otherwise payable for the Contract Year in which termination occurred pro-rated to the date of termination.β’20172022 that would have become vested and/or exercisable upon a terminating event are shown at a value using the closing stock price on JuneΒ 30, 20172022 ofβ$95.98.$254.67, including the related cash dividend equivalents. The value of annual PSUs was computed at target in the event of death (unless retirement eligible, in which case the value of such PSUs wasβ β β β β’, including stock options, stock awards, RSUs, and PSUs.. The exercise of stock options after termination of employment and the payment of RSUs, PVUs, or PSUs areis subject to the executive neither competing with, nor taking employment with or rendering service to one of our competitors, nor conducting himself or herself in a manner adversely affecting us.β’β β β β β
($)β β
Termination
($)β β
($)β β
($)β β
without
Cause or by
Executive for
Material
Breach
($)β β
without Cause
or for Good
Reason
After Change
of Control
($)(4)β β β β William P. Lauder β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Base Salary β β β $ 0 β β β β $ 0 β β β β $ 1,575,000 β β β β $ 1,575,000 β β β β $ 3,150,000 β β β β $ 3,150,000 β β β β β Bonus β β β β 0 β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 2,215,200 β β β β β 2,215,200 β β β β β Options β β β β 870,000 β β β β β 870,000 β β β β β 870,000 β β β β β 870,000 β β β β β 870,000 β β β β β 870,000 β β β β β Annual PSUs β β β β 4,002,980 β β β β β 4,002,980 β β β β β 4,002,980 β β β β β 4,002,980 β β β β β 4,002,980 β β β β β 4,002,980 β β β β β RSUs β β β β 2,298,944 β β β β β 2,298,944 β β β β β 2,298,944 β β β β β 2,298,944 β β β β β 2,298,944 β β β β β 2,298,944 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 28,443 β β β β β 56,887 β β β β β 56,887 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 90,009 β β β β β 295,470 β β β β β 295,470 β β β β β β β β β 0 β β β β β 0 β β β β β 5,000 β β β β β 36,798 β β β β β 73,596 β β β β β 93,596 β β β β β Total β β β $ 7,171,924 β β β β $ 7,171,924 β β β β $ 8,751,924 β β β β $ 8,902,174 β β β β $ 12,963,077 β β β β $ 12,983,077 β β β β β Fabrizio Freda β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Base Salary β β β $ 0 β β β β $ 0 β β β β $ 2,100,000 β β β β $ 2,100,000 β β β β $ 4,200,000 β β β β $ 4,200,000 β β β β β Bonus β β β β 0 β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 3,572,913 β β β β β 3,572,913 β β β β β Options β β β β 3,658,366 β β β β β 3,658,366 β β β β β 3,658,366 β β β β β 3,658,366 β β β β β 3,658,366 β β β β β 3,658,366 β β β β β Annual PSUs β β β β 16,715,748 β β β β β 16,715,748 β β β β β 16,715,748 β β β β β 16,715,748 β β β β β 16,715,748 β β β β β 16,715,748 β β β β β Non-annual PSUs β β β β 0 β β β β β 0 β β β β β 12,226,772 β β β β β 12,226,772 β β β β β 17,660,892 β β β β β 17,660,892 β β β β β PVUs β β β β 0 β β β β β 0 β β β β β 22,128,780 β β β β β 22,128,780 β β β β β 22,128,780 β β β β β 22,128,780 β β β β β RSUs β β β β 9,758,591 β β β β β 9,758,591 β β β β β 9,758,591 β β β β β 9,758,591 β β β β β 9,758,591 β β β β β 9,758,591 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 28,443 β β β β β 56,887 β β β β β 56,887 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 485,000 β β β β β 970,106 β β β β β 970,106 β β β β β β β β β 0 β β β β β 0 β β β β β 5,000 β β β β β 53,935 β β β β β 107,870 β β β β β 127,870 β β β β β Total β β β $ 30,132,705 β β β β $ 30,132,705 β β β β $ 66,593,257 β β β β $ 67,155,635 β β β β $ 78,830,153 β β β β $ 78,850,153 β β β β β β β β β β β β β β β β β β β β β β β β β β Β β Retirement
($)β Voluntary
Termination
($)β Death
($)β Disability
($)β Termination
without
Cause or by
Executive for
Material
Breach
($)β Termination
without Cause or
for Good Reason
After Change
of Control
($)(4)Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β $ 0 Β $ 0 Β $ 1,500,000 Β $ 1,500,000 Β $ 3,000,000 Β $ 3,000,000 Β Β β 0 Β β 0 Β β 0 Β β 0 Β β 3,435,825 Β β 3,435,825 Β Β β 922,867 Β β 922,867 Β β 922,867 Β β 922,867 Β β 922,867 Β β 922,867 Β Β β 3,059,856 Β β 3,059,856 Β β 3,059,856 Β β 3,059,856 Β β 3,059,856 Β β 3,059,856 Β Β β 2,034,532 Β β 2,034,532 Β β 2,034,532 Β β 2,034,532 Β β 2,034,532 Β β 2,034,532 Β Β β 0 Β β 0 Β β 0 Β β 29,071 Β β 58,143 Β β 58,143 Β Β β 0 Β β 0 Β β 0 Β β 88,977 Β β 261,717 Β β 261,717 Β Β β 0 Β β 0 Β β 5,000 Β β 36,798 Β β 73,596 Β β 93,596 Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β Β $ 6,017,255 Β $ 6,017,255 Β $ 7,522,255 Β $ 7,672,101 Β $ 12,846,536 Β $ 12,866,536 Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β $ 0 Β $ 0 Β $ 1,900,000 Β $ 1,900,000 Β $ 3,800,000 Β $ 3,800,000 Β Β Β 0 Β Β 0 Β Β 0 Β Β 0 Β Β 5,382,775 Β Β 5,382,775 Β Β Β 3,667,582 Β Β 3,667,582 Β Β 3,667,582 Β Β 3,667,582 Β Β 3,667,582 Β Β 3,667,582 Β Β Β 12,495,082 Β Β 12,495,082 Β Β 41,850,753 Β Β 41,850,753 Β Β 41,850,753 Β Β 50,581,756 Β Β Β 8,236,398 Β Β 8,236,398 Β Β 8,236,398 Β Β 8,236,398 Β Β 8,236,398 Β Β 8,236,398 Β Β Β 0 Β Β 0 Β Β 0 Β Β 29,071 Β Β 58,143 Β Β 58,143 Β Β Β 0 Β Β 0 Β Β 0 Β Β 470,983 Β Β 970,000 Β Β 970,000 Β Β Β 0 Β Β 0 Β Β 5,000 Β Β 53,935 Β Β 107,870 Β Β 127,870 Β β β β β β β β β β β β β β β β β β β β β Β $ 24,399,062 Β $ 24,399,062 Β $ 55,659,733 Β $ 56,208,722 Β $ 64,073,520 Β $ 72,824,523 Β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β $ 0 Β $ 0 Β $ 950,000 Β $ 950,000 Β $ 1,900,000 Β $ 1,900,000 Β Β β 0 Β β 0 Β β 0 Β β 0 Β β 1,318,250 Β β 1,318,250 Β Β β 0 Β β 0 Β β 1,315,846 Β β 1,315,846 Β β 1,315,846 Β β 1,315,846 Β Β β 0 Β β 0 Β β 4,472,753 Β β 4,472,753 Β β 4,472,753 Β β 4,472,753 Β Β β 0 Β β 0 Β β 3,181,106 Β β 3,181,106 Β β 4,250,454 Β β 4,570,156 Β Β β 0 Β β 0 Β β 0 Β β 22,324 Β β 44,648 Β β 44,648 Β Β β 0 Β β 0 Β β 0 Β β 40,957 Β β 105,581 Β β 105,581 Β Β β 0 Β β 0 Β β 5,000 Β β 25,844 Β β 51,687 Β β 71,687 Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β Β $ 0 Β $ 0 Β β $9,924,705 Β $ 10,008,830 Β $ 13,459,220 Β $ 13,798,921 Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β $ 0 Β $ 0 Β $ 1,150,000 Β $ 1,150,000 Β $ 2,300,000 Β $ 2,300,000 Β Β Β 0 Β Β 0 Β Β 0 Β Β 0 Β Β 3,532,025 Β Β 3,532,025 Β Β Β 2,008,830 Β Β 2,008,830 Β Β 2,008,830 Β Β 2,008,830 Β Β 2,008,830 Β Β 2,008,830 Β Β Β 6,807,113 Β Β 6,807,113 Β Β 11,691,058 Β Β 11,691,058 Β Β 11,691,058 Β Β 13,825,956 Β Β Β 4,471,858 Β Β 4,471,858 Β Β 4,471,858 Β Β 4,471,858 Β Β 4,471,858 Β Β 4,471,858 Β Β Β 0 Β Β 0 Β Β 0 Β Β 20,547 Β Β 41,094 Β Β 41,094 Β Β Β 0 Β Β 0 Β Β 0 Β Β 69,527 Β Β 228,904 Β Β 228,904 Β Β Β 0 Β Β 0 Β Β 5,000 Β Β 62,050 Β Β 124,100 Β Β 144,100 Β β β β β β β β β β β β β β β β β β β β β Β $ 13,287,800 Β $ 13,287,800 Β $ 19,326,745 Β $ 19,473,869 Β $ 24,397,868 Β $ 26,552,766 Β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β β Retirement
($)β Voluntary
Termination
($)β Death
($)β Disability
($)β Termination
without
Cause or by
Executive for
Material
Breach
($)β Termination
without Cause or
for Good Reason
After Change
of Control
($)(4)Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β Β β Β Β β Β Β β Β Β β Β Β β Β Β β Β Β Β $ 0 Β $ 0 Β $ 1,080,000 Β $ 1,080,000 Β $ 2,160,000 Β $ 2,160,000 Β Β β 0 Β β 0 Β β 0 Β β 0 Β β 3,071,325 Β β 3,071,325 Β Β β 1,457,440 Β β 1,457,440 Β β 1,457,440 Β β 1,457,440 Β β 1,457,440 Β β 1,457,440 Β Β β 4,943,232 Β β 4,943,232 Β β 4,943,232 Β β 4,943,232 Β β 4,943,232 Β β 4,943,232 Β Β β 3,245,224 Β β 3,245,224 Β β 3,245,224 Β β 3,245,224 Β β 3,245,224 Β β 3,245,224 Β Β β 0 Β β 0 Β β 0 Β β 28,581 Β β 57,162 Β β 57,162 Β Β β 0 Β β 0 Β β 0 Β β 67,084 Β β 210,775 Β β 210,775 Β Β β 0 Β β 0 Β β 5,000 Β β 62,390 Β β 124,780 Β β 144,780 Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β Β $ 9,645,896 Β $ 9,645,896 Β $ 10,730,896 Β $ 10,883,951 Β $ 15,269,939 Β $ 15,289,939 Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β
($)β β
Termination
($)β β
($)β β
($)β β
without
Cause or by
Executive for
Material
Breach
($)β β
without Cause
or for Good
Reason
After Change
of Control
($)(4)β β β β Tracey T. Travis β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Base Salary β β β $ 0 β β β β $ 0 β β β β $ 1,150,000 β β β β $ 1,150,000 β β β β $ 2,300,000 β β β β $ 2,300,000 β β β β β Bonus β β β β 0 β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 1,029,025 β β β β β 1,029,025 β β β β β Options β β β β 1,381,082 β β β β β 1,381,082 β β β β β 1,381,082 β β β β β 1,381,082 β β β β β 1,381,082 β β β β β 1,381,082 β β β β β Annual PSUs β β β β 6,395,918 β β β β β 6,395,918 β β β β β 6,395,918 β β β β β 6,395,918 β β β β β 6,395,918 β β β β β 6,395,918 β β β β β Non-annual PSUs β β β β 0 β β β β β 0 β β β β β 1,863,639 β β β β β 1,863,639 β β β β β 2,795,459 β β β β β 3,727,279 β β β β β RSUs β β β β 3,720,403 β β β β β 3,720,403 β β β β β 3,720,403 β β β β β 3,720,403 β β β β β 3,720,403 β β β β β 3,720,403 β β β β β Non-annual RSUs β β β β 0 β β β β β 0 β β β β β 2,607,061 β β β β β 2,607,061 β β β β β 2,607,061 β β β β β 2,607,061 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 28,347 β β β β β 56,694 β β β β β 56,694 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 58,694 β β β β β 162,172 β β β β β 162,172 β β β β β β β β β 0 β β β β β 0 β β β β β 5,000 β β β β β 25,844 β β β β β 51,687 β β β β β 71,687 β β β β β Total β β β $ 11,497,403 β β β β $ 11,497,403 β β β β $ 17,123,103 β β β β $ 17,230,988 β β β β $ 20,499,501 β β β β $ 21,451,321 β β β β β Jane Hertzmark Hudis β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Base Salary β β β $ 0 β β β β $ 0 β β β β $ 1,305,000 β β β β $ 1,305,000 β β β β $ 2,610,000 β β β β $ 2,610,000 β β β β β Bonus β β β β 0 β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 1,202,075 β β β β β 1,202,075 β β β β β Options β β β β 1,058,901 β β β β β 1,058,901 β β β β β 1,058,901 β β β β β 1,058,901 β β β β β 1,058,901 β β β β β 1,058,901 β β β β β Annual PSUs β β β β 4,961,770 β β β β β 4,961,770 β β β β β 4,961,770 β β β β β 4,961,770 β β β β β 4,961,770 β β β β β 4,961,770 β β β β β Annual RSUs β β β β 2,831,254 β β β β β 2,831,254 β β β β β 2,831,254 β β β β β 2,831,254 β β β β β 2,831,254 β β β β β 2,831,254 β β β β β Non-annual RSUs β β β β 0 β β β β β 0 β β β β β 2,609,069 β β β β β 2,609,069 β β β β β 2,327,008 β β β β β 2,609,069 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 17,598 β β β β β 35,196 β β β β β 35,196 β β β β β β β β β 0 β β β β β 0 β β β β β 0 β β β β β 77,478 β β β β β 221,319 β β β β β 221,319 β β β β β β β β β 0 β β β β β 0 β β β β β 5,000 β β β β β 30,425 β β β β β 60,850 β β β β β 80,850 β β β β β Total β β β $ 8,851,925 β β β β $ 8,851,925 β β β β $ 12,770,994 β β β β $ 12,891,495 β β β β $ 15,308,373 β β β β $ 15,610,434 β β β β β β β β β β β β β β β β β β β β β β β β β β officer'sofficerβs position. Additionally, upon retirement, the NEOs, except for Mr.Β Freda and Ms.Β Travis, are entitled to life-time annual supplemental payments in connection with healthcare benefits (approximately $20,000βββ$25,000 per year).(2) in the table represent the cash equivalent of continued participation in the RGA Plan and the Restoration Plan and maximum match for our 401(k) Savings Plan for one year, in the case of disability, and twoΒ years, in the case of termination without cause, termination for material breach, or termination for good reason.(3)in all events other than termination for cause and death, and reimbursement for financial consulting services in all events other than termination for cause;services; also includes up to $20,000 in legal fees upon termination for good reason after a change of control.(4)grantgrants to Mr.Β Freda on SeptemberΒ 4, 2015 for 387,848 shares,MarchΒ 11, 2021, and the non-annual PSU grant to Mr.Β DemseyMs.Β Travis on JanuaryΒ 28, 2016,SeptemberΒ 2, 2021, in each case made under the Share Incentive Plan, provide for "double trigger"βdouble triggerβ payment events (i.e. payment is triggered as a result of a change of control and the termination of the executive'sexecutiveβs employment other than voluntarily by such person). Based upon the unvested stock options, RSUs, and the two above-referenced PVU and PSUs held by the NEOs as of JuneΒ 30, 2017,2022, if a change of control had occurred on that date, and such NEO'sNEOβs employment had been discontinued other than voluntarily by such person, each would have been entitled to the following amounts: Mr.Β Lauder, $2,957,399;$3,168,944; Mr.Β Freda, $49,990,653$53,206,630 (including $38,086,674$17,660,892 in connection with the PSU grant made on SeptemberΒ 4, 2015 for 387,848 shares); Ms.Β Travis, $5,886,001; Mr.Β Demsey, $13,499,530 (including $7,018,843MarchΒ 11, 2021, and $22,128,780 in connection with the PVU grant made on MarchΒ 11, 2021); Ms.Β Travis, $11,435,824 (including $3,727,279 in connection with the non-annual PSU grant made on JanuaryΒ 28, 2016)SeptemberΒ 2, 2021); and Mr.Β ProuvΓ©, $4,702,664.Ms.Β Hudis, $6,499,224. The change in control provisions for annual PSUs made under the Share Incentive Plan provide for "single trigger"βsingle triggerβ payment events (i.e. payment is triggered as a result of the change of control itself, regardless of the executive'sexecutiveβs continued employment). Based upon theβ β β β "single trigger"βsingle triggerβ held by each of the NEOs as of JuneΒ 30, 2017,2022, if a change of control had occurred on that date, the NEOs would have been entitled to the following amounts: Mr.Β Lauder, $3,059,856;$4,002,980; Mr.Β Freda, $12,495,082;$16,715,748; Ms.Β Travis, $4,472,753; Mr.Β Demsey, $6,807,113;$6,395,918; and Mr.Β ProuvΓ©Ms.Β Hudis, $4,961,770.$4,943,232.the Company uses a fiscal year 12-month average exchange rate to convert the employeeβs total annual compensation for the relevant fiscal year to U.S. dollars.β β β β β β β β "independent directors"βindependent directorsβ as defined by the Board and consistent with the rules of the New York Stock Exchange, has:Company'sCompanyβs audited financial statements for the fiscal year ended JuneΒ 30, 20172022 with management;2.KPMGPricewaterhouseCoopers LLP ("KPMG"(βPwCβ) the matters required to be discussed by applicable requirements including the requirements of the Public Company Accounting Oversight Board ("PCAOB"(the βPCAOBβ) regarding KPMG's communications withand the Audit Committee concerning independence;U.S. Securities and Exchange Commission (the βSECβ); and3.KPMGPwC required by applicable requirements of the PCAOB regarding KPMG'sPwCβs communications with the Audit Committee concerning independence, and has discussed KPMG'sPwCβs independence with representatives of KPMG.20172022 be included in the Company'sCompanyβs Annual Report on Form 10-K for the fiscal year ended JuneΒ 30, 20172022 filed with the Securities and Exchange Commission.Irvine O. Hockaday, Jr. (Chair)Angela Wei Dong*
Paul J. FribourgMellody HobsonJennifer HymanRichard F. ZanninoArturo NuΓ±ez**
Jennifer Tejadaβ β β β ContentsRATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORSAppointment of Independent Auditors
(ItemΒ 2)Company'sCompanyβs independent auditors and to approve the compensation for the independent auditors. The Audit Committee has appointed the firm of KPMGPricewaterhouseCoopers LLP ("KPMG"(βPwCβ), a registered public accounting firm, to serve as independent auditors of the Company for the fiscal year ending JuneΒ 30, 2018,2023, subject to ratification of this appointment by the stockholders of the Company. KPMG was first appointed in April 2002, andPwC has served as the firm has audited the Company's financial statements as of, and for the year ended, JuneΒ 30 of each yearCompanyβs auditor since its initial appointment. KPMG also audited the effectiveness of internal control over financial reporting as of JuneΒ 30, 2017 and provided an opinion thereon.KPMGPwC to be well qualified and believe that the continued retention of KPMGPwC is in the best interest of the Company and its stockholders. The Audit Committee Chair is directly involved in the selection of KPMG'sPwCβs lead engagement partner. The firmPwC has advised the Company that neither it nor any of its members has any direct or material indirect financial interest in the Company.20172022 (fiscal 2022) and 2016,JuneΒ 30, 2021 (fiscal 2021), the Company paid, or will pay, the following fees to KPMG and its affiliatesPwC for services rendered during the year or for the audit in respect of thoseΒ years:β Fee Type β β Fiscal 2022 β β Fiscal 2021 β β β β β (in thousands) β β Audit Fees(1) β β β $ 10,537 β β β β $ 9,879 β β β Audit-Related Fees(2) β β β β 1,157 β β β β β 1,888 β β β Tax Fees(3) β β β β 771 β β β β β 574 β β β All Other Fees β β β β β β β β β β β β β β Total β β β $ 12,465 β β β β $ 12,341 β β βFiscal 2017Β βFiscal 2016Β Β Β (in thousands) Β β β β β β β Β $Β Β 9,560 Β $Β Β 8,857 Β Β 371 Β 241 Β Β 1,958 Β 1,985 Β Β β Β β Β β β β β β β Β $11,889 Β $11,083 Β β β β β β β β β β β β β β β β β β β (1)internationalcertain subsidiaries, comfort letters related to registration statements, and review of the quarterly financial statements for each fiscal year. Fiscal 2017 also includes $506,000 in fees for professional services incurred in early fiscal 2017 in connection with the audit of the effectiveness of internal control over financial reporting for fiscal 2016. Fiscal 2016 also includes fees related to a registration statement consent.(2)audits concerning certain paymentsforeign statutory and/or contractual requirements and other assurance and related services. Fiscal 2021 also includes fees for professional services in connection with due diligence related to a previous acquisitionmergers and other audit-related services.acquisitions.(3)KPMGthe independent auditor and the associated fees are compatible with maintaining auditor independence. The Audit Committee policy concerning approval of audit and non-audit services to be provided by KPMGthe independent auditor requires that all services KPMGthe independent auditor may provide to the Company, including audit services and permitted audit-related and non-audit services, be pre-approved by the Committee.committee. In between Committeecommittee meetings, the Chair of the Audit Committee may approve permitted non-auditCommittee.committee. In addition, for particular permitted services, the Chief Financial Officer may approve the engagement of KPMGthe independent auditor provided such engagements will amount to fees of less than an aggregate ofβ β$50,000 per fiscal quarter and such engagement is reported to the Chair of the Audit Committee and reported to and ratified by the Committeecommittee at its next meeting. All audit and non-audit services described herein were approved pursuant to this policy for fiscal 2017,2022, and noneβ β β β Β Β Β Β Β Β Β Β One or more representatives of KPMG will be present at the Annual Meeting of Stockholders, will have an opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions.the independent auditorsPwC requires the affirmative vote of a majority of the votes cast by the holders of the shares of ClassΒ A Common Stock and ClassΒ B Common Stock of the Company voting in person or by proxy at the Annual Meeting of Stockholders. If the stockholders do not ratify the appointment of KPMG,PwC, the Audit Committee of the Board of Directors will reconsider the appointment.β β β The Board recommends a vote FOR the proposal to ratify the appointment of PricewaterhouseCoopers LLP as independent auditors of the Company for the fiscal year ending JuneΒ 30, 2023. Proxies received by the Board will be so voted unless a contrary choice is specified in the proxy. β β β β β ratify the appointment of KPMG as independent auditors of the Company for the fiscal year ending JuneΒ 30, 2018. Proxies received by the Board will be so voted unless a contrary choice is specified in the proxy.Approve Executive Compensation (ItemΒ 3)"CompensationβCompensation Discussion and Analysis"Analysisβ above, the Board believes that the Company'sCompanyβs compensation program for executive officers is designed to attract and retain high quality peopleworld class talent and to motivate them to achieveachievement of both our long-term and short-term goals. OurWe believe that the design and governance of the Companyβs program supports, and aligns executive officers with, the business strategy and the overall goal is to continue sustainable growth of net sales, profitability, and return on invested capital on an annual and long-term basis."SayβSay on Pay"Payβ resolution, seeks a stockholder advisory vote on the compensation of our Named Executive Officers as disclosed pursuant to ItemΒ 402 of RegulationΒ S-K through the following resolution:Β Β Β Β Β Β Β Β "RESOLVED,Company'sCompanyβs stockholders approve, on an advisory basis, the compensation paid to the Company's named executive officers,Companyβs Named Executive Officers, as disclosed in the Company'sCompanyβs Proxy Statement for the 20172022 Annual Meeting of Stockholders pursuant to ItemΒ 402 of RegulationΒ S-K, including Compensation Discussion and Analysis, compensation tables and narratives."Board recommends a vote FOR the proposed resolution. Proxies received by the Board will be so voted unless a contrary choice is specified in the proxy.ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTEON EXECUTIVE COMPENSATION(ItemΒ 4)Β Β Β Β Β Β Β Β We are seekingCompany currently intends to hold an advisory vote on whether stockholders would prefer an advisory vote onto approve executive compensation (a "Say on Pay") every one, two or three years. Currently, we provide a "Say on Pay" to our stockholders each year. The Board continues to believe that submittingannually, consistent with the advisory vote to stockholders every year is appropriate for our Company and our stockholders. This advisory vote on the frequency of future advisory votes on executive compensation is non-binding on the Board. However, the Board will take into account the outcome of this vote when making a future decision on the frequency of advisory votes on executive compensation.The Board recommends that stockholders select ONE YEAR when voting on the frequency of the advisory vote on executive compensation. Proxies received bystockholders at the Board will be so voted unless a contrary choice is specified in the proxy.β β β The Board recommends a vote FOR the proposed resolution. Proxies received by the Board will be so voted unless a contrary choice is specified in the proxy. β β β β β the Company, its directors, officers, and employees, except: (i)Β as necessary to meet applicable legal requirements and to assert or defend claims for or against the Company; (ii)Β in case of a contested proxy solicitation; (iii)Β in the event that a stockholder makes a written comment on the proxy card or otherwise communicates his/herthe stockholderβs vote to management; or (iv)Β to allow the independent inspectors of election to certify the results of the vote. The Company will retain an independent tabulator to receive and tabulate the proxies and independent inspectors of election to certify the results.20182023 Annual Meeting20182023 Annual Meeting and wishes to have such proposal considered for inclusion in the Company'sCompanyβs proxy materials in reliance on RuleΒ 14a-8 under the Securities Exchange Act of 1934, the proposal must be submitted in writing and received by the Secretary of the Company after the 20172022 Annual Meeting and no later than MayΒ 31, 2018.JuneΒ 1, 2023. Such proposal also must meet the other requirements of the rules of the Securities and Exchange Commission relating to stockholder proposals.Company'sCompanyβs bylaws establish an advance notice procedure with regard to certain matters, including stockholder proposals and nominations of individuals for election to the Board of Directors, outside the process of RuleΒ 14a-8. In general, notice of a stockholder proposal or a director nomination for an annual meeting must be received by the Company not less than 60Β days nor more than 90Β days prior to the first anniversary of the date on which the Company first mailed its proxy materials for the preceding annual meeting of stockholders and must contain specified information and conform to certain requirements, as set forth in the bylaws. To be timely for the 20182023 Annual Meeting, the notice must be received by the Company on any date beginning no earlier than JuneΒ 30, 2018JulyΒ 1, 2023 and ending on JulyΒ 30, 2018.31, 2023. In order to comply with the SECβs universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our Boardβs nominees must provide notice to the Secretary of the Company that sets forth the information required by RuleΒ 14a-19 under the Securities Exchange Act of 1934 no later than SeptemberΒ 19, 2023. If the chairman at any meeting of stockholders determines that a stockholder proposal or director nomination was not made in accordance with the bylaws, the Company may disregard such proposal or nomination. In addition, if a stockholder submits a proposal outside of RuleΒ 14a-8 for the 20182023 Annual Meeting and the proposal fails to comply with the advance notice procedure prescribed by the bylaws, then the Company'sCompanyβs proxy may confer discretionary authority on the persons being appointed as proxies on behalf of the Board of Directors to vote on the proposal.β β β β β Β Β Β β β SPENCER G. SMUL
Senior Vice President,
Deputy General Counsel and Secretary
New York, New York
SeptemberΒ 28, 2017
29, 2022β of the Company for the fiscal year ended JuneΒ 30, 2017, which includes financial statements, is available, together with this Proxy Statement, at www.envisionreports.com/EL.www.proxyvote.com. The Annual Report does not form any part of the material for the solicitations of proxies.β β β β "ProxyβProxy Statement Summary"Summaryβ and in the "CompensationβCompensation Discussion and Analysis,"β the Company presents certain non-GAAP financial information. We use certain non-GAAP financial measures, among other financial measures, to evaluate our operating performance, which represent the manner in which we conduct and view our business. Management believes that excluding certain items that are not comparable from period to period, or do not reflect the Company'sCompanyβs underlying ongoing business, provides transparency for such items and helps investors and others compare and analyze our operating performance from period to period. In the future, we expect to incur charges or adjustments similar in nature to those presented below; however, the impact to the Company'sCompanyβs results in a given period may be highly variable and difficult to predict. Our non-GAAP financial measures may not be comparable to similarly titled measures used by, or determined in a manner consistent with, other companies. While we consider the non-GAAP measures useful in analyzing our results, they are not intended to replace, or act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP.activities, goodwill and other intangible asset impairments,activities; the changes in the fair value of contingent consideration, the China deferred tax asset valuation allowance reversal,consideration; the fiscal 20152022, 2021, 2020 and 2019 goodwill and other intangible asset impairments; the fiscal 2022 and 2021 impact from changes in fair value of acquisition-related stock options (net of the portion attributable to redeemable noncontrolling interest); the fiscal 2021 and 2020 long-lived asset impairments; the fiscal 2021 and 2020 gain on previously held equity method investment (fiscal 2021 is net of the portion attributable to redeemable noncontrolling interest); the fiscal 2019 and 2018 impact of accelerated orders associated withprovisional charges resulting from the SMI rollout,enactment of the Tax Cuts and Jobs Act the (βTCJAβ) on the effective tax rate; the fiscal 2015 Venezuela remeasurement charge2019 gain on liquidation of an investment in a foreign subsidiary, net; and the effects of foreign currency translation. The table below provides reconciliations between these non-GAAP financial measures and the most directly comparable U.S. GAAP measures. Also shown in the table below is information about our adjusted Return on Invested Capital financial measure disclosed in this Proxy Statement. Certain information in the prior-year periods have been restated to conform to current period presentation.β β Financial Metric
($ in millions)β β
2022β β
2021β β
2020β β
2019β β
2018β β β β Net Sales as reported β β β $ 17,737 β β β β $ 16,215 β β β β $ 14,294 β β β β $ 14,863 β β β β $ 13,683 β β β β β Returns associated with restructuring activities β β β β 4 β β β β β 14 β β β β β β β β β β β 3 β β β β β 8 β β β β β Net Sales as adjusted β β β $ 17,741 β β β β $ 16,229 β β β β $ 14,294 β β β β $ 14,866 β β β β $ 13,691 β β β β β As Reported, year-over-year variance β β β β 9% β β β 13% β β (4)% β β 9% β β 16% β β β β β β β β β β β 14% β β (4)% β β 9% β β 16% β β β β β β β β β10% β β β 11% β β (3)% β β 11% β β 13% β β β β β β 8% β β β β β β β β β β β β β β β β βImpact of Acquisitions, Divestitures and Brand Closures, net β β 2% β β β β β β β β β β β β β β β β βImpact of Foreign Currency Translation β β (1)% β β β β β β β β β β β β β β β β βReturns associated with restructuring activities β β Β Β Β Β Β Β ββ β β β β β β β β β β β β β β β β βAs Reported Net Sales growth β β βΒ Β Β β9% β β β β β β β β β β β β β β β β Fiscal
2017β Fiscal
2016β Change
over
Prior
Yearβ Change
over Prior
Year in
Constant
Currency(1)β Fiscal
2014β 3-Year
Compound
Annual
Growth Rate
(or Basis Point
Improvement)β Fiscal
2012β 5-Year
Compound
Annual
Growth Rate
(or Basis Point
Improvement)β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β β β β β β β β β β β β β β β β β β β β β β β β β Β β 11,824 Β β 11,262 Β β 5% Β β 7 % β 10,969 Β β 2.5% Β β 9,714 Β β 4.0 % Β β β Β β β Β β β Β β β Β β (178 ) β β Β β β Β β β Β Β β 2 Β β 1 Β β β Β β β Β β β Β β β Β β 2 Β β β Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ Β β 11,826 Β β 11,263 Β β 5% Β β 7 % β 10,791 Β β 3.1% Β β 9,716 Β β 4.0 % β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β Β 14.3 % Β 14.3 % Β β Β Β Β Β Β 16.7 % Β β240bp Β Β 13.5 % Β +80 bp Β Β β Β Β β Β Β Β Β Β Β Β Β β1.2 % Β Β Β Β β Β Β Β Β Β Β 0.3 % Β β Β Β Β Β Β Β Β Β β Β Β Β Β Β β Β Β Β Β Β Β β0.5 % Β 0.1 % Β Β Β Β Β Β Β β Β Β Β Β Β β Β Β Β Β Β Β β Β Β β Β Β Β Β Β Β Β Β 0.4 % Β Β Β Β β Β Β Β Β Β Β 1.8 % Β 1.2 % Β Β Β Β Β Β Β β Β Β Β Β Β 0.7 % Β Β Β β β β β β β β β β β β β β β β β β β β β β β β β β β Β Β 15.9 % Β 15.6 % Β +30bp Β Β Β Β Β 16.1 % Β β20bp Β Β 14.2 % Β +170 bp β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β β 3.35 Β β 2.96 Β β 13% Β β 17 % β 3.06 Β β 3.1% Β β 2.16 Β β 9.2 % Β β β Β β β Β β β Β β β Β β β0.21 Β β β Β β β Β β β Β Β β 0.06 Β β β Β β β Β β β Β β β Β β β Β β β Β β β Β Β β β0.12 Β β 0.02 Β β β Β β β Β β β Β β β Β β β Β β β Β Β β β0.20 Β β β Β οΏ½οΏ½οΏ½ β Β β β Β β β Β β β Β β β Β β β Β Β β β Β β β Β β β Β β β Β β 0.10 Β β β Β β β Β β β Β Β β 0.38 Β β 0.24 Β β β Β β β Β β β Β β β Β β 0.11 Β β β Β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ β β βΒ Β β 3.47 Β β 3.22 Β β 8% Β β 11 % β 2.95 Β β 5.6% Β β 2.27 Β β 8.9 % β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β Β Β 18.3 Β Β 20.7 Β Β β240bp Β Β Β Β Β 24.8 Β Β β650bp Β Β 23.0 Β Β β470bp Β Β Β 18.9 Β Β 22.4 Β Β β350bp Β Β Β Β Β 24.8 Β Β β590bp Β Β 24.0 Β Β β510bp Β β β β β Certain amounts do not sum due to roundingβ β Financial Metric β β
2022β β
2021β β
2020β β
2019β β
2018β β β β Operating Margin as reported β β β β β β β β β β β β β β β β β β β β β β 15.0% β β β β Goodwill, other intangible and long-lived asset impairments β β β β 1.3% β β β β β 1.2% β β β β β 10.0% β β β β β 0.6% β β β β β βββ β β β β β Changes in fair value of contingent
considerationβ β β β β β β β β β β β β β β β (0.1)% β β β β β (0.2)% β β β (0.3)% β β β β Returns and charges associated with
restructuring activitiesβ β β β 0.8% β β β β β 1.4% β β β β β 0.6% β β β β β 1.6% β β β 1.9% β β β β Changes in fair value of acquisition-related stock
options (less portion attributable to redeemable
noncontrolling interest)β β β β (0.3)% β β β β β 0.2% β β β β β β β β β β β β β β β β β βββ β β β β β Operating Margin as adjusted β β β β β β β β β β β β β β β β β β β β β β 16.6% β β β β β β β β β β β β β β β β β β β β β β β β Financial Metric β β
2022β β
2021β β
2020β β
2019β β
2018β β β β Diluted EPS as reported β β β $ 6.55 β β β β $ 7.79 β β β β $ 1.86 β β β β $ 4.82 β β β β $ 2.95 β β β β β Goodwill, other intangible and long-lived asset impairments β β β β 0.50 β β β β β 0.40 β β β β β 3.31 β β β β β 0.23 β β β β β β β β β β β Transition Tax resulting from the TCJA β β β β β β β β β β β β β β β β β β β β β β (0.03) β β β β β 0.94 β β β β β Remeasurement of U.S. net deferred tax assets resulting from the TCJA β β β β β β β β β β β β β β β β β β β β β β 0.02 β β β β β 0.08 β β β β β Net deferred tax liability related to certain foreign withholding taxes on planned repatriation resulting from the TCJA β β β β β β β β β β β β β β β β β β β β β β 0.02 β β β β β 0.12 β β β β β Changes in fair value of contingent consideration β β β β β β β β β β (0.01) β β β β β (0.04) β β β β β (0.08) β β β (0.09) β β β β Other income, net, primarily the gain on previously held
equity method investmentβ β β β β β β β β β (2.30) β β β β β (1.20) β β β β β β β β β β β β β β β β β Gain on liquidation of an investment in a foreign subsidiary, net β β β β β β β β β β β β β β β β β β β β β β (0.15) β β β β β β β β β β β Returns and charges associated with restructuring activities β β β β 0.31 β β β β β 0.48 β β β β β 0.19 β β β β β 0.51 β β β β β 0.51 β β β β β Change in fair value of acquisition-related stock options (less portion attributable to redeemable noncontrolling interest) β β β β (0.12) β β β β β 0.09 β β β β β β β β β β β β β β β β β β β β β β β Diluted EPS as adjusted β β β $ 7.24 β β β β $ 6.45 β β β β $ 4.12 β β β β $ 5.34 β β β β $ 4.51 β β β β β As Reported, year-over-year variance β β (16)% β β 100+% β β (61)% β β 63% β β (12)% β β β β Adjusted, year-over-year variance β β 12% β β 57% β β (23)% β β 18% β β 30% β β β β β β 12% β β 54% β β (22)% β β 22% β β 24% β β β β Return on Invested Capital, as reported β β 22.2 β β 22.5 β β 17.4 β β 22.6 β β 13.9 β β β β Return on Invested Capital, as adjusted(3) β β 26.6 β β 24.6 β β 18.5 β β 25.7 β β 21.1 β β β β Certain amounts do not sum due to rounding β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β β WeBeginning in fiscal 2022, we calculate constant currency information by translating current yearcurrent-period results using prior year weighted-averagemonthly average foreign currency exchange rates and adjusting for the period-over-period impact of foreign currency cash flow hedging activities. Prior to fiscal 2022, constant currency information was calculated using the prior-year period weighted-average exchange rates.β β β β 20172022, 2021, 2020 and 2019 also excludes the impact of goodwill and other intangible asset impairments. The lower ROIC in fiscal 2017 as compared with prior periods was primarily attributable toFiscal 2022, 2021 and 2020 also excludes long-lived asset impairments and the impact from acquisitions. Fiscal 2019 and 2018 also excludes the impact of our fiscal 2017 acquisitions and the unfavorable impactprovisional adjustments resulting from the enactment of foreign currencies.the TCJA on the effective tax rate.. Electronic Voting Instructions Available 24 hours a day, 7 days a week If you vote your proxy by Internet![[MISSING IMAGE: lg_esteelaudercompany-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/lg_esteelaudercompany-4c.jpg)
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by telephone, you do NOT need to mail back your proxy card. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted byscan the QR Barcode aboveUse the Internet or telephone must be received byto transmit your voting instructions and for electronic delivery of information up until 11:59 p.m., Eastern Standard Time on November 13, 2017. Vote by Internet β’17, 2022. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.During The Meeting - Go to www.envisionreports.com/EL β’ Or scanwww.virtualshareholdermeeting.com/EL2022You may attend the QR code with your smartphone β’ Followmeeting via the steps outlined onInternet and vote during the secure website Vote by telephone β’ Call toll free 1-800-652-VOTE (8683) withinmeeting. Have the USA, US territories and Canada on a touch tone telephone β’ Followinformation that is printed in the instructions providedbox marked by the recorded message Using a black ink pen, markarrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your votes with an X as shownvoting instructions up until 11:59 p.m. Eastern Time on November 17, 2022. Have your proxy card in this example. Please do not write outsidehand when you call and then follow the designated areas. Annual Meeting Proxy Card Signinstructions.VOTE BY MAILMark, sign and Date on Reverse Side q IF YOU HAVE NOT VOTED VIA THE INTERNETdate your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACHBLACK INK AS FOLLOWS:D90411-P80084KEEPTHE BOTTOMTHIS PORTION IN THE ENCLOSED ENVELOPE. qONLYTHE ESTΓE LAUDER COMPANIES INC. The Board of Directors recommends a vote βFORβ"FOR" each nominee in Item 1 βFORβand "FOR" Items 2 and 3, and β1 Yearβ in Item 4. ForAgainst Abstain + Item 1 - Election3.1.Election of five (5)six (6) Class III Directors Item 2 - RatificationII DirectorsNominees:ForWithhold1a.Ronald S. Lauder!!2.Ratification of appointment of KPMG LLPPricewaterhouseCoopersLLP as independent auditors for the 20182023 fiscal year Nominees 01 - Charlene Barshefsky For Withhold Item 3 - Advisoryyear.1b.William P. Lauder!!3.Advisory vote to approve executive compensation 1 Year 2 Years 3 Years Abstain 02 - Wei Sun Christianson Item 4 - Advisory vote on the frequency of the advisory vote on executive compensation 03 - Fabrizio Freda 04 - Jane Lauder 05 - Leonard A. Lauder This proxy, when properly executed,compensation.1c.Richard D. Parsons!!We also will be voted as directed herein. If no direction is given, this proxy will be voted in accordance with the recommendations of the Companyβs Board of Directors and, in the discretion of the proxy holders, upontransact such other business as may properly come beforecomebefore the meeting and any adjournments or any adjournment thereof. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A AND C ON BOTH SIDESpostponements1d.Lynn Forester de Rothschild!!of the meeting.1e.Jennifer Tejada!!1f.Richard F. Zannino!! For Against Abstain! ! !! ! ! Please sign exactly as your name appears hereon, date, and return in the enclosed envelope. If acting as executor, administrator, trustee, guardian, etc., you should so indicate when signing. If the signer is a corporation, please sign the full corporate name by duly authorized officer. If shares are held jointly, each stockholder named should sign.Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date![[MISSING IMAGE: tm2222590d1-px_2pagebw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2222590d1-px_2pagebw.jpg)
. The EstΓ©e Lauder Companies Inc. Annual Meeting of Stockholders November 14, 2017, 10:00 a.m. (local time) JW Marriott Essex House New York Grand Salon 160 Central Park South New York, New York Important notice regardingNotice Regarding the Internet availabilityAvailability of proxy materialsProxy Materials for the Annual Meeting of Stockholders. TheStockholders.The Proxy Statement and the 2017 Annual Report to Stockholderson Form 10-K are available at: www.envisionreports.com/EL q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy + THEat www.proxyvote.com.D90412-P80084ProxyTHE ESTΓE LAUDER COMPANIES INC. CLASSINC.CLASS A COMMON STOCK ANNUALSTOCKANNUAL MEETING OF STOCKHOLDERS THISSTOCKHOLDERSTHIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS TheDIRECTORSThe undersigned, revoking all previous proxies, hereby constitutes and appoints Fabrizio Freda, Sara E. MossDeirdre Stanley and Spencer G. Smul, and each of them, proxies with full power of substitution to vote for the undersigned all shares of Class A Common Stock of The EstΓ©e Lauder Companies Inc. (the βCompanyβ"Company") which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders to be held on November 14, 2017, at the JW Marriott Essex House New York, Grand Salon, 160 Central Park South, New York, New York,18, 2022, held virtually via www.virtualshareholdermeeting.com/EL2022, at 10:00 a.m. (local time)(Eastern Time), and at any adjournment thereof, upon the matters described in the accompanying Proxy Statement and upon any other business that may properly come before the meeting or any adjournment thereof. Said proxies are directed to vote or refrain from voting as checked on the reverse side upon the matters listed on the reverse side, and otherwise indiscretion. Non-Voting Items Changediscretion.This proxy, when properly executed, will be voted as directed herein. If no direction is given, this proxy will be voted in accordance with the recommendations of Address β Please printthe Companyβs Board of Directors and, in the discretion of the proxy holders, upon such other business as may properly come before the meeting or any adjournment thereof.Continued and to be dated and signed on the reverse side.![[MISSING IMAGE: tm2222590d1-px_3pagebw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2222590d1-px_3pagebw.jpg)
new address below. Comments β Please printvoting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on November 17, 2022. Have your comments below.proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.During The Meeting Attendance Mark- Go to www.virtualshareholdermeeting.com/EL2022You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on November 17, 2022. Have your proxy card in hand when you call and then follow the right if you planinstructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to attendVote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:D90413-Z83411KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLYTHE ESTΓE LAUDER COMPANIES INC. The Board of Directors recommends a vote "FOR" each nominee in Item 1 and "FOR" Items 2 and 3.1.Election of six (6) Class II DirectorsNominees:ForWithhold1a.Ronald S. Lauder!!2.Ratification of appointment of PricewaterhouseCoopersLLP as independent auditors for the Annual Meeting. This section must be completed for your2023 fiscal year.1b.William P. Lauder!!3.Advisory vote to be counted. Signapprove executive compensation.1c.Richard D. Parsons!!We also will transact such other business as may properly comebefore the meeting and date below.any adjournments or postponements1d.Lynn Forester de Rothschild!!of the meeting.1e.Jennifer Tejada!!1f.Richard F. Zannino!! For Against Abstain! ! !! ! ! Please sign exactly as your name appears hereon, date, and return in the enclosed envelope. If acting as executor, administrator, trustee, guardian, etc., you should so indicate when signing. If the signer is a corporation, please sign the full corporate name by duly authorized officer. If shares are held jointly, each stockholder named should sign. Signature(s) of Stockholder(s) Title sign.Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date , 2017 + IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A AND C ON BOTH SIDESβ![[MISSING IMAGE: tm2222590d1-px_4pagebw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-103951/tm2222590d1-px_4pagebw.jpg)
. Electronic Voting Instructions Available 24 hours a day, 7 days a week If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted byImportant Notice Regarding the Internet or telephone must be received by 11:59 p.m., Eastern Standard Time, on November 13, 2017. Vote by Internet β’ Go to www.envisionreports.com/EL β’ Or scan the QR code with your smartphone β’ Follow the steps outlined on the secure website Vote by telephone β’ Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada on a touch tone telephone β’ 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. Annual MeetingAvailability of Proxy Card Sign and Date on Reverse Side q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q The Board of Directors recommends a vote βFORβ each nominee in Item 1, βFORβ Items 2 and 3, and β1 Yearβ in Item 4. ForAgainst Abstain + Item 1 - Election of five (5) Class III Directors Item 2 - Ratification of appointment of KPMG LLP as independent auditors for the 2018 fiscal year Nominees 01 - Charlene Barshefsky For Withhold Item 3 - Advisory vote to approve executive compensation 1 Year 2 Years 3 Years Abstain 02 - Wei Sun Christianson Item 4 - Advisory vote on the frequency of the advisory vote on executive compensation 03 - Fabrizio Freda 04 - Jane Lauder 05 - Leonard A. Lauder This proxy, when properly executed, will be voted as directed herein. If no direction is given, this proxy will be voted in accordance with the recommendations of the Companyβs Board of Directors and, in the discretion of the proxy holders, upon such other business as may properly come before the meeting or any adjournment thereof. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A AND C ON BOTH SIDES OF THIS CARD. + 1 U P X 003SSP0056 02O6QD A X IMPORTANT ANNUAL MEETING INFORMATION
. The EstΓ©e Lauder Companies Inc. Annual Meeting of Stockholders November 14, 2017, 10:00 a.m. (local time) JW Marriott Essex House New York Grand Salon 160 Central Park South New York, New York Important notice regarding the Internet availability of proxy materialsMaterials for the Annual Meeting of Stockholders. TheStockholders.The Proxy Statement and the 2017 Annual Report to Stockholderson Form 10-K are available at: www.envisionreports.com/EL q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy + THEat www.proxyvote.com.D90414-Z83411ProxyTHE ESTΓE LAUDER COMPANIES INC. CLASSINC.CLASS B COMMON STOCK ANNUALSTOCKANNUAL MEETING OF STOCKHOLDERS THISSTOCKHOLDERSTHIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS TheDIRECTORSThe undersigned, revoking all previous proxies, hereby constitutes and appoints Fabrizio Freda, Sara E. MossDeirdre Stanley and Spencer G. Smul, and each of them, proxies with full power of substitution to vote for the undersigned all shares of Class B Common Stock of The EstΓ©e Lauder Companies Inc. (the βCompanyβ"Company") which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders to be held on November 14, 2017, at the JW Marriott Essex House New York, Grand Salon, 160 Central Park South, New York, New York,18, 2022, held virtually via www.virtualshareholdermeeting.com/EL2022, at 10:00 a.m. (local time)(Eastern Time), and at any adjournment thereof, upon the matters described in the accompanying Proxy Statement and upon any other business that may properly come before the meeting or any adjournment thereof. Said proxies are directed to vote or refrain from voting as checked on the reverse side upon the matters listed on the reverse side, and otherwise indiscretion. Non-Voting Items Changediscretion.This proxy, when properly executed, will be voted as directed herein. If no direction is given, this proxy will be voted in accordance with the recommendations of Address β Please print your new address below. Comments β Please print your comments below. Meeting Attendance Mark the box toCompanyβs Board of Directors and, in the right if you plan to attenddiscretion of the Annual Meeting. This section must be completed for your voteproxy holders, upon such other business as may properly come before the meeting or any adjournment thereof.Continued and to be counted. Signdated and date below. Please sign exactly as your name appears hereon, date, and return insigned on the enclosed envelope. If acting as executor, administrator, trustee, guardian, etc., you should so indicate when signing. If the signer is a corporation, please sign the full corporate name, by duly authorized officer. If shares are held jointly, each stockholder named should sign. Signature(s) of Stockholder(s) Title Date , 2017 + IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A AND C ON BOTH SIDES OF THIS CARD. C B
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