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☑ | Definitive Proxy Statement |
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☐ | Soliciting Material Pursuant to §240.14a-12 |
NU SKIN ENTERPRISES, INC. | ||
(Name of Registrant as Specified In Its Charter) | ||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF NU SKIN ENTERPRISES, INC. |
1. | To elect the |
2. | To hold an advisory vote to approve our executive compensation; |
3. |
To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for |
To transact such other business as may properly come before the Annual Meeting. |
Attending and Voting at the Annual Meeting Due to the COVID-19 To attend the | ||||
Approximately one hour before the Annual Meeting, all those who | ||||
Entrance to the Annual Meeting will open |
By Order of the Board of Directors, | |
STEVEN J. LUND | |
Chairman of the Board | |
Provo, Utah April |
PROXY SUMMARY |
Date: | June |
Time: | 11:00 a.m., Mountain Daylight Time |
Access: | |
Record date: | April |
Proposal | Board Recommendation | More Information | |
1. | Election of the | For each director nominee | Page 3 |
2. | Approval of our executive compensation* | For | Page 47 |
3. | |||
Ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for | For | Page |
Skills and Experience | |||||||||
Other public company board/exec. experience | • | • | • | • | • | • | |||
Corporate finance/transactions | • | • | • | • | • | ||||
International experience/global operations | • | • | • | • | • | • | • | ||
Government relations | • | ||||||||
Regulatory | • | • | |||||||
Risk management | • | • | • | • | |||||
Sales/marketing | • | • | • | • | • | ||||
Online or digital marketing | • | • | • | ||||||
Strategic planning | • | • | • | • | • | • | • | ||
Current Nu Skin Committee Service | |||||||||
Audit Committee | • | • | • | ||||||
Executive Compensation Committee | • | • | • | • | |||||
Nominating and Corp. Governance Committee | • | • | • | • | |||||
Other Characteristics | |||||||||
Independence | • | • | • | • | • | • | • | ||
Gender diversity | • | • | • | ||||||
Racial/ethnic diversity | • | • | |||||||
Age | 60 | 66 | 69 | 67 | 47 | 63 | 76 | 41 | 69 |
Tenure (years) | 0 | 24 | 22 | 25 | 0 | 2 | 13 | 5 | 6 |
Current Directors | Director Nominees | ||
Average Tenure | 13 years | 11 years | |
Average Age | 63 | 62 | |
Independence | |||
Committee Independence | |||
Gender Diversity | |||
Racial/Ethnic Diversity |
Name and Primary Occupation | Tenure | Age* | Independent | Committee Membership** | |||
A | EC | NCG | |||||
Daniel W. Campbell Lead Independent Director Managing General Partner of EsNet, Ltd. | 1997 | 65 | ✔ | ✔ | ✔ | ||
Andrew D. Lipman Partner, Morgan, Lewis & Bockius LLP | 1999 | 68 | ✔ | ✔ | ✔ | ||
Steven J. Lund Executive Chairman of the Board | 1996 | 66 | |||||
Laura Nathanson Retired | 2019 | 62 | ✔ | ✔ | ✔ | ||
Thomas R. Pisano Retired | 2008 | 75 | ✔ | ✔ | ✔ | ||
Zheqing (Simon) Shen Founding Member, ZQ Capital Limited | 2016 | 40 | ✔ | ✔ | |||
Ritch N. Wood CEO, Nu Skin Enterprises, Inc. | 2017 | 54 | |||||
Edwina D. Woodbury President and CEO, The Chapel Hill Press, Inc. | 2015 | 68 | ✔ | ✔ | ✔ |
1 | ||
1 | ||
3 | ||
9 | ||
9 | ||
11 | ||
45 | ||
45 | ||
45 | ||
47 | ||
53 | ||
54 | ||
56 | ||
PROXY STATEMENT |
1. | To elect the |
2. | To hold an advisory vote to approve our executive compensation; |
3. |
To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for |
To transact such other business as may properly come before the Annual Meeting. |
− | Proposal 1. If an incumbent director does not receive the required majority, the director shall resign pursuant to an irrevocable resignation that was required to be tendered prior to his or her nomination and effective upon (i) such person failing to receive the required majority vote and (ii) the Board’s acceptance of such resignation. Within 90 days after the date of the certification of the election results, the Board will determine whether to accept or reject the resignation or whether other action should be taken, and the Board will publicly disclose its decision. |
− | Proposals 2 and |
Emma S. Battle | |
Director nominee |
Emma S. Battle, 60, has served as the President and Chief Executive Officer of Market Vigor, LLC, a business services company focused on strategic consulting and digital and online marketing, since she founded the company in 2003. From 2015 to 2017, Ms. Battle was Vice President of Client Success at Windsor Circle, an e-commerce marketing company. Previously, she served in executive and senior marketing and sales roles at Three Ships Media, Red Hat, Art.com, 1 Sync and Sara Lee Branded Apparel (now known as Hanesbrands Inc.). Ms. Battle has served on the board of directors of Unifi, Inc., a global textile solutions provider listed on the NYSE, since January 2021 and of Bassett Furniture Industries, Inc., a manufacturer and marketer of home furnishings listed on the Nasdaq Global Select Market, since October 2020. From 2019 to 2020, she was on the board of directors of Primo Water Corporation, a provider of drinking water products that was listed on the Nasdaq Global Market until the company was acquired in 2020. Ms. Battle pursues continuing education through online classes and membership in professional organizations like Brentwood Advisory Group, and supports and collaborates with current and aspiring board directors through UNC's Director Diversity Initiative, Onboard NC, Santa Clara University's Black Corporate Board Readiness program and the newly established Take Your Seat initiative. Ms. Battle also devotes time to charitable and civic causes; since 2017 she has served as the President and Chief Executive Officer of Higher Ed Works, a charitable organization that supports public higher education in North Carolina, and she also serves on the boards of FPG Child Development Institute, Southeastern Wind Coalition, and Elon University's School of Business. She received a B.A. degree from Duke University and a M.B.A. degree from Harvard Business School. Ms. Battle is a successful businessperson with an extensive background in digital and online marketing, marketing analytics, and business and marketing strategy, which the Board believes will be valuable as we continue to build our digital business. She also brings to the Board her perspective from working with other large corporations and on other public company boards. In addition, the Board believes that her experience managing and consulting with smaller, entrepreneurial businesses will provide a valuable perspective in managing our business in a manner that is effective for our independent sales force. The Board also values Ms. Battle’s commitment to sustainability and social responsibility, which are two areas of focus for our company and many stockholders. |
Daniel W. Campbell | |
Director since 1997 | Lead Independent Director |
Audit Committee | |
Executive Compensation Committee |
Daniel W. Campbell, 66, has been a Managing General Partner of EsNet, Ltd., a privately held investment company, since 1994. He served on the Utah State Board of Regents for Higher Education from 2010 to 2019, having served as its Vice Chair from 2012 to 2014 and as Chair from 2014 to 2018. From 1992 to 1994, Mr. Campbell was the Senior Vice President and Chief Financial Officer of WordPerfect Corporation, a software company, and prior to that was a partner of Price Waterhouse LLP. He received a B.S. degree from Brigham Young University. Mr. Campbell is a recognized business leader with expertise in the areas of finance, accounting, transactions, corporate governance and management. He has served on the boards of several other private and public companies. In addition, through his experience as a partner of an international accounting firm, and later as Chief Financial Officer of a large technology company, Mr. Campbell has developed deep insight into the management, operations, finances and governance of public companies. |
Andrew D. Lipman | |
Director since 1999 | Executive Compensation Committee |
Nominating and Corporate Governance Committee (Chair) |
Andrew D. Lipman, 69, is a partner and head of the Telecommunications, Media and Technology Group at Morgan, Lewis & Bockius LLP, an international law firm that he joined in 2014. He previously held similar positions with Bingham McCutchen LLP from 2006 to 2014 and Swidler Berlin LLP from 1988 to 2006. From 2000 to 2013, Mr. Lipman served as a member of the board of directors of The Management Network Group, Inc., a telecommunications related consulting firm, and from 2005 to 2013, he served as a member of the board of directors of Sutron Corporation, a provider of hydrological and meteorological monitoring products. He received a B.A. degree from the University of Rochester and a J.D. degree from Stanford Law School. Mr. Lipman is a highly experienced senior lawyer and business advisor with over 40 years of experience dealing with international regulatory, technology and marketing issues in multiple countries. In addition, he has extensive experience in corporate governance and related legal and transactional issues. Mr. Lipman has worked closely with dozens of public companies, including service on the boards of a variety of companies in several industries. His experience also includes managing and implementing strategic initiatives and launching new products and markets globally in competitive industries. |
Steven J. Lund | |
Director since 1996 (includes three-year leave of absence) | Executive Chairman of the Board |
Steven J. Lund, 67, has served as the Chairman of the Board since 2012. Mr. Lund previously served as Vice Chairman of the Board from 2006 to 2012. Mr. Lund served as President, Chief Executive Officer and a director of our company from 1996, when our company went public, until 2003, when he took a three-year leave of absence. Mr. Lund was a founding stockholder of our company. Mr. Lund is a trustee of the Force for Good Foundation, a charitable organization that our company established in 1996 to help encourage and drive the philanthropic efforts of our company, its employees, its sales force and its customers to enrich the lives of others. Mr. Lund worked as an attorney in private practice prior to joining our company as Vice President and General Counsel. He received a B.A. degree from Brigham Young University and a J.D. degree from Brigham Young University’s J. Reuben Clark Law School. Mr. Lund brings to the Board over 35 years of company and industry knowledge and experience as a senior executive, including service as our General Counsel, Executive Vice President, and President and Chief Executive Officer. He played an integral role in managing our growth from start-up through his term as President and Chief Executive Officer. Mr. Lund also served on the Executive Board of the United States Direct Selling Association. A respected leader in his business, religious and civic communities, he currently serves as a general officer of The Church of Jesus Christ of Latter-day Saints and serves on this Church's Board of Education with oversight of its institutions of higher education, including Brigham Young University. He previously served on the Utah State Board of Regents for Higher Education and as Chairman of the Board of Trustees of Utah Valley University. |
Ryan S. Napierski | |
Director nominee |
Ryan S. Napierski, 47, has served as our company’s President since 2017. Previously, he served as President of Global Sales and Operations from 2015 to 2017. Prior to serving in that position, he served as both President of our North Asia region since 2014 and President of Nu Skin Japan since 2010. Mr. Napierski has fulfilled multiple leadership positions for Nu Skin since joining our company in 1995, including Vice President of Business Development for Nu Skin EMEA and General Manager of the United Kingdom. Mr. Napierski has a Bachelor’s degree in business, a Master's degree in business administration from Duke University and a Master's degree in international business from Goethe Universitat in Germany. Mr. Napierski brings to the Board a strong expertise in direct sales, including through digital and social media platforms. With his service as our President, President of Global Sales and Operations, and other management roles in our markets, Mr. Napierski also has a deep understanding of our business globally, including our sales force, products and product development, markets and compensation plans. Mr. Napierski’s leadership has been integral to the success of several of our key initiatives in recent years. Mr. Napierski is also recognized as a leader in the direct selling industry and has served in a variety of industry trade association leadership roles; he currently serves as both Chairman of the United States Direct Selling Association and Chairman of the Advocacy Committee for the World Federation of Direct Selling Associations. |
Laura Nathanson | |
Director since 2019 | Executive Compensation Committee |
Nominating and Corporate Governance Committee |
Thomas R. Pisano | |
Audit Committee | |
Executive Compensation Committee (Chair) |
Thomas R. Pisano, 76, served as Chief Executive Officer and a director of Overseas Military Sales Corp. ("OMSC"), a marketer of motor vehicles, from 2005 until his retirement in 2010. From 1998 to 2004, he served as the Chief Operating Officer and a director of OMSC From 1995 to 1997, he served as Vice President and Head of the International Division for The Topps Company, Inc., a sports publications and confectionery products company. Prior to that, he served in various positions, including Vice President of Global New Business Development, for Avon Products, Inc., a direct seller of personal care products, from 1969 to 1994. He received a B.S. from the Georgia Institute of Technology and a Mr. Pisano is an experienced senior executive who is an expert in the direct selling, personal care, beauty products and other consumer goods industries. During his 25-year career at Avon, |
Zheqing (Simon) Shen | |
Director since 2016 | Nominating and Corporate Governance Committee |
Edwina D. Woodbury | |
Director since 2015 | Audit Committee (Chair) |
Nominating and Corporate Governance Committee |
Edwina D. Woodbury, 69, has been President and Chief Executive Officer of The Chapel Hill Press, Inc., a publishing services company, since 1999. Ms. Woodbury has over 20 years of experience in the direct selling and personal care products industries, having served at Avon Products, Inc. as Chief Financial and Administrative Officer and in other finance and operations positions from 1977 to 1998. From 1998 to 2015, Ms. Woodbury served as a member of the board of directors of RadioShack Corporation, a retail consumer electronics company. In addition, from 2005 to 2010, Ms. Woodbury served as a member of the board of directors of R.H. Donnelley Corporation, a publishing and marketing company, and from 2000 to 2005, she served as a director of Click Commerce, Inc., a research solutions company. Ms. Woodbury also served on the board of directors at the nonprofit Medical Foundation of North Carolina from 2009 to 2018. She received a B.S.B.A from the University of North Carolina. Ms. Woodbury has extensive experience and understanding of our industry. While serving in various roles of increasing responsibility during her 21 years at Avon, |
− | Separate Chairman of the Board and CEO. The positions of Chairman of the Board and CEO are filled by Mr. Lund and Mr. Wood, respectively. |
− | Lead Independent Director. Our independent directors have designated Mr. Campbell as Lead Independent Director. |
− | Limitation on Management Directors. All of our current directors are independent of the company and management except for Mr. Lund, who is one of our company’s founders, and Mr. Wood, our CEO. If elected, Mr. Napierski will not be independent. |
− | Meetings of Independent Directors. All independent directors meet regularly in executive session. Mr. Campbell, the Lead Independent Director, chairs these sessions. |
− | Independent Committees. Only independent directors serve on our Audit, Executive Compensation, and Nominating and Corporate Governance Committees. |
− | Annual Board and Committee Performance Evaluations. The performance of the Board and each Board committee is evaluated at least annually. |
− | Annual Election of Directors. All of our directors are elected annually; we do not have a staggered board. |
− | Majority Voting in Uncontested Director Elections and Resignation Policy. Our Bylaws provide that director nominees must be elected by a majority of the votes cast in uncontested elections. For an incumbent director to be nominated for re-election, she or he must tender an irrevocable resignation that will be effective upon (i) the failure to receive the required vote for director election at the next annual meeting at which they face re-election and (ii) Board acceptance of such resignation. |
− | Equity Retention Requirements. We have equity retention requirements that apply to our directors and executive officers, designed to align directors’ and executive officers’ interests with those of stockholders. For a description of these requirements, see “Executive Compensation: Compensation Discussion and Analysis—Equity Retention Guidelines.” |
− | Hedging Policy. Our directors and employees, including officers, are prohibited from engaging in any hedging transactions with respect to our securities, including through the use of short sales, put options and financial instruments such as prepaid variable forward contracts, equity swaps, collars and exchange funds. This prohibition applies regardless of whether the director’s or employee’s securities were granted as compensation and regardless of whether the director or employee holds the securities directly or indirectly. |
− | Pledging Policy. Our directors and employees, including officers, are prohibited from pledging their securities in our company. |
Daniel W. Campbell | Andrew D. Lipman | Laura Nathanson |
Thomas R. Pisano | Zheqing (Simon) Shen | Edwina D. Woodbury |
Audit Committee | Nominating and Corporate Governance Committee | Executive Compensation Committee | |||||
- | - | - | Compensation practices related risks | ||||
- | Operational risks related to information systems and facilities | - | - | ||||
- | Public disclosure and investor related risks | - | Compliance and regulatory risks | ||||
- |
− | A force for good − Accountable and empowered − Bold innovators − Customer obsessed | − | Direct and decisive | |
− | Exceptional − | |||
Fast speed | ||||
− | One global team |
1. | Support the transformation of our business and culture to align with our business strategies and the Nu Skin Way; |
2. | Leverage global diversity and build inclusion; and |
3. | Simplify the employee experience through global alignment and optimization. |
− | Assess, score and improve the environmental impact score of all of our products by 2023 | ||
− | Change all of our packaging to be recycled, recyclable, reusable, | ||
Planet | − | Reduce waste at our facilities through programs that encourage reducing, reusing and recycling, as well as initiatives to reduce electricity usage | |
People | − | Invest at least 50% of our Force for Good Foundation’s giving in communities and people that are providing essential resources to our planet and its inhabitants |
− | Completing our previously announced goal of assessing, scoring and improving the environmental impact score of our top 20 products, as identified when we set this goal during 2019, saving an estimated 16.5 tons of paper and 21 tons of plastic during 2020; |
− | Offering new bottles for our Nutricentials® line made from 100% post-consumer recycled plastic and tubes made from approximately 34% post-consumer recycled plastic; |
− | Reducing by 70% the packaging materials for our Epoch® Baobab Body Butter by switching the packaging from jars to an environmentally friendly tube; |
− | Winning nine sustainability awards for clean beauty products, sustainable sales leader efforts, and waste and packaging reductions; and |
− | Helping build the Utah Sustainable Business Coalition as a founding member. |
Director | Audit | Executive Compensation | Nominating and Corporate Governance | |
Daniel W. Campbell | ✔ | ✔ | ||
Andrew D. Lipman | ✔ | Chair | ||
Laura Nathanson | ✔ | ✔ | ||
Thomas R. Pisano | ✔ | Chair | ||
Zheqing (Simon) Shen | ✔ | |||
Edwina Woodbury | Chair | ✔ | ||
2019 Meetings | 12 | 9 | 8 |
Director | Audit | Executive Compensation | Nominating and Corporate Governance |
Daniel W. Campbell | ✔ | ✔ | |
Andrew D. Lipman | ✔ | Chair | |
Laura Nathanson | ✔ | ✔ | |
Thomas R. Pisano | ✔ | Chair | |
Zheqing (Simon) Shen | ✔ | ||
Edwina Woodbury | Chair | ✔ | |
2020 Meetings | 15 | 12 | 12 |
− | Selecting our independent auditor; |
− | Overseeing the performance of our internal audit function and independent auditor; |
− | Reviewing the activities and the reports of our independent auditor; |
− | Approving in advance the audit and non-audit services provided by our independent auditor; |
− | Reviewing our quarterly and annual financial statements and our significant accounting policies, practices and procedures; |
− | Reviewing the adequacy of our internal controls and internal auditing methods and procedures; |
− | Overseeing our compliance with legal and regulatory requirements; |
− | Overseeing our risk assessment and risk management programs and plans related to our major financial risk exposures, operational risks related to information systems and facilities, and public disclosure and investor related risks; and |
− | Conferring with the chairs of the Nominating and Corporate Governance Committee and Executive Compensation Committee regarding their respective oversight of our risk assessment and risk management programs and our related guidelines and policies. |
− | Establishing and administering our executive compensation strategy, policies and practices; |
− | Reviewing and approving corporate goals and objectives relevant to the compensation to be paid to our CEO, Executive Chairman of the Board and other executive officers, |
− | Administering our equity incentive plans; |
− | Overseeing our risk assessment and risk management programs and plans related to our compensation practices and human resources; and |
− | Overseeing the reporting of executive compensation information in accordance with applicable rules and regulations. |
− | Making recommendations to the Board of Directors about the size and membership criteria of the Board or any committee thereof; |
− | Identifying and recommending candidates for the Board and committee membership, including evaluating director nominations received from stockholders; |
− | Annually reviewing CEO succession planning as well as succession planning and management development for other executive officer positions; |
− | Leading the process of identifying and screening candidates for a new CEO when necessary, and evaluating the performance of the |
− | Making recommendations to the Board regarding changes in compensation of non-employee directors and overseeing the evaluation of the Board and management; |
− | Developing and recommending to the Board a set of corporate governance guidelines and reviewing such guidelines at least annually; |
− | Overseeing our risk assessment and risk management programs and plans related to our corporate governance risks, operational risks not assigned to the Audit Committee, compliance and regulatory risks, and reputational risks; and |
− | Overseeing our regulatory, legal and compliance obligations in the foreign countries in which we operate, as well as individual compliance programs developed to address specific legal and regulatory issues in the United States and foreign countries. |
− | A current or former officer or employee of our company; |
− | A participant during |
− | An executive officer of another entity at which one of our executive officers served during |
− | Code of Conduct. Our code of conduct applies to all of our employees, officers and directors, including our subsidiaries. Any amendments or waivers (including implicit waivers) regarding the Code of Conduct requiring disclosure under applicable SEC rules or NYSE listing standards will be disclosed in the “Corporate Governance” section of our Investor Relations website at ir.nuskin.com. |
− | Corporate Governance Guidelines. Our corporate governance guidelines govern our company and our Board of Directors on matters of corporate governance, including responsibilities, committees of the Board and their charters, director independence, director qualifications, director compensation and evaluations, director orientation and education, director access to management, director access to outside financial, business and legal advisors and management development and succession planning. |
2020 Program | ||||||
Annual cash retainer Board Committee | $85,000 $10,000 per committee | |||||
Unchanged | ||||||
Additional annual cash retainer for leadership: Lead Independent Director Audit Committee Chair Other committee chairs | $20,000 $15,000 $10,000 | |||||
Meeting fees | ||||||
Unchanged | ||||||
Annual equity | $140,000 value | $150,000 value |
(1) | The Board can approve meeting fees for participation in a special committee or other extraordinary circumstances. |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | ||
Nevin N. Andersen | 52,833 | - | - | 52,833 | ||
Daniel W. Campbell | 141,583 | 136,849 | - | 278,432 | ||
Andrew D. Lipman | 167,083 | 136,849 | 2,135 | 306,067 | ||
Laura Nathanson | 73,250 | 136,849 | - | 210,099 | ||
Neil H. Offen | 55,833 | - | - | 55,833 | ||
Thomas R. Pisano | 150,583 | 136,849 | - | 287,432 | ||
Zheqing (Simon) Shen | 97,750 | 136,849 | - | 234,599 | ||
Edwina D. Woodbury | 150,583 | 136,849 | - | 287,432 | ||
Steven J. Lund | - | - | 627,578 | (2) | 627,578 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) |
Daniel W. Campbell | 125,000 | 135,920 | — | 260,920 |
Andrew D. Lipman | 130,000 | 135,920 | — | 265,920 |
Laura Nathanson | 114,000 | 135,920 | — | 249,920 |
Thomas R. Pisano | 124,000 | 135,920 | — | 259,920 |
Zheqing (Simon) Shen | 96,500 | 135,920 | — | 232,420 |
Edwina D. Woodbury | 129,000 | 135,920 | — | 264,920 |
Steven J. Lund | — | — | 1,160,484(3) | 1,160,484 |
(1) | On June |
Name | Stock Awards | Option Awards | ||
Nevin N. Andersen | - | 20,000 | ||
Daniel W. Campbell | 2,878 | 20,000 | ||
Andrew D. Lipman | 2,878 | 20,000 | ||
Laura Nathanson | 2,878 | - | ||
Neil H. Offen | - | 20,000 | ||
Thomas R. Pisano | 2,878 | 15,000 | ||
Zheqing (Simon) Shen | 2,878 | 5,000 | ||
Edwina D. Woodbury | 2,878 | 5,000 | ||
Steven J. Lund | - | 12,500 |
Name | Stock Awards | Option Awards |
Daniel W. Campbell | 3,612 | 15,000 |
Andrew D. Lipman | 3,612 | 15,000 |
Laura Nathanson | 3,612 | — |
Thomas R. Pisano | 3,612 | 10,000 |
Zheqing (Simon) Shen | 3,612 | 5,000 |
Edwina D. Woodbury | 3,612 | 5,000 |
Steven J. Lund | — | — |
(2) | This column reports our incremental cost for providing perquisites and other personal benefits to those directors whose total was at least $10,000, as well as other forms of compensation. |
(3) | Consists of Mr. Lund’s compensation as an employee of the company for |
Ritch N. Wood | Chief Executive Officer |
Ryan S. Napierski | President |
Mark H. Lawrence | Executive Vice President and Chief Financial Officer |
Joseph Y. Chang | Executive Vice President of Product Development and Chief Scientific Officer |
D. Matthew Dorny | Executive Vice President and General Counsel |
− |
− | Empowering |
− | Digital Platform. We are focused on combining our new social commerce business model with the best of our traditional person-to-person model and expanding it into a socially enabled, digital-first affiliate business. Currently, more than 90% of our revenue flows from online transactions. We are rapidly leveraging technology to scale our business to grow our customers, and our efforts are paying off, as we reached more than 1.5 million active customers in 2020. |
− |
− |
− |
1. | To successfully recruit, motivate and retain experienced and talented executives; and |
2. | To ensure pay for performance through incentives that |
Cash Incentive Bonuses | Long-Term Incentives 47% of Other NEOs' 2020 Target Pay | ||
Annual Incentive | Time-Based Restricted Stock Units (RSUs) 40% weighting | Performance-Based Stock Options 60% weighting | |
Measures one-year financial performance (2020) | Measures four-year stock price performance | Measures one-year financial performance over three years | |
Metric: Adjusted revenue | Metric: Adjusted operating income | Metric: Stock price | Metric: Adjusted EPS |
50% weighting | 50% weighting | ||
Incentivizes business growth | Incentivizes profitability and control of expenses | Aligns management with stockholders’ interests Promotes multi-year retention | Aligns management with stockholders’ interests Provides a balance to the top-line and operating-income metrics in the cash incentive bonus program |
Both metrics are calculated on a constant-currency basis from the prior-year period and are adjusted to eliminate extraneous items such as the impact of accounting changes, losses or gains on settlements of litigation that began prior to | Adjusted EPS is calculated to eliminate extraneous items such as the impact of accounting changes, losses or gains on settlements of litigation that began prior to |
Performance-Based Award | Percent of Target Earned | |
0% | ||
0% | ||
(1) | Contingent on |
(2) | Represents the tranches of the respective three-year awards that were contingent on |
What We Do | What We Don’t Do | |
✔ | Link pay outcomes directly to company and share price performance in support of a pay for performance philosophy | û No evergreen employment agreements û No hedging or pledging of Nu Skin shares û No excessive perquisites û No excise tax gross-ups for NEOs û No payment of current dividends on unvested equity û No repricing of stock options without stockholder approval |
✔ | Utilize multiple, complementary incentive measures in the annual and long-term incentive plans that align with key drivers of stockholder value creation | |
✔ | Utilize double-trigger change in control benefits | |
✔ | Employ a comprehensive clawback policy | |
✔ | Require robust equity retention for directors and executives | |
✔ | Assess compensation risk annually | |
✔ | Engage an independent compensation consultant |
− | Solicit our stockholders’ feedback and better understand their perspectives on executive compensation so that the Committee can take those philosophies into account as it evaluates possible program changes; |
− | Answer any questions that stockholders may have with respect to our existing programs and practices or past decisions; and |
− | Establish a platform for ongoing dialogue with our stockholders. |
− | Successfully recruit, motivate and retain experienced and talented executives; |
− | Provide competitive compensation arrangements that are tied to corporate and individual performance in the short- and long-term; |
− | Align the financial interests of our executives with those of our stockholders; and |
− | Drive superior stockholder value over the long-term. |
Component of Compensation Program | Objective | ||
Base Salary (Fixed Pay) | − | Pay for role | |
− | Aids in recruitment and retention | ||
Cash Incentive Plan (Short-Term Incentive) | − | Pay for performance | |
− | Aligns with annual operating achievement | ||
− | Aids in recruitment and retention | ||
Equity Incentive Plan (Long-Term Incentive) | − | Pay for performance | |
− | Aligns with stock price performance and multi-year operating achievement | ||
− | Aids in recruitment and retention |
− | Current market practices and salary levels; |
− | Each executive officer’s responsibilities, experience in their position and capabilities; |
− | Individual performance and company performance; |
− | The relative role and contribution of each NEO in the company; |
− | Competitive offers made to executive officers and the level of salary that may be required to recruit or retain executive officers; and |
− | The recommendations of the CEO. |
Named Executive Officer | Prior Salary ($) | Adjusted Salary ($) | Increase ($) | Increase (%) | |
Ritch N. Wood | 950,000 | 1,000,000 | 50,000 | 5% | |
Mark H. Lawrence | 450,000 | 500,000 | 50,000 | 11% | |
Ryan S. Napierski | 625,000 | 700,000 | 75,000 | 12% | |
Joseph Y. Chang | 620,000 | 660,000 | 40,000 | 6% | |
D. Matthew Dorny | 475,000 | 510,000 | 35,000 | 7% |
Name | Prior Salary ($) | Adjusted Salary ($) | Increase ($) | Increase (%) | ||||
Ritch N. Wood | 1,000,000 | 1,000,000 | — | — | ||||
Mark H. Lawrence | 500,000 | 525,000 | 25,000 | 5% | ||||
Ryan S. Napierski | 700,000 | 725,000 | 25,000 | 4% | ||||
Joseph Y. Chang | 660,000 | 675,000 | 15,000 | 2% | ||||
D. Matthew Dorny | 510,000 | 510,000 | — | — |
Metric | Weighting | Purpose | How Calculated |
Adjusted revenue | 50% | Incentivizes business growth | Both metrics are calculated on a constant-currency basis from the prior-year period and are adjusted to eliminate extraneous items such as the impact of accounting changes, losses or gains on settlements of litigation that began prior to |
Adjusted operating income | 50% | Incentivizes profitability and control of expenses |
Named Executive Officer | Bonus % | ||
Ritch N. Wood | 110% | ||
Mark H. Lawrence | 75% | ||
Ryan S. Napierski | 100% | ||
Joseph Y. Chang | 75% | ||
D. Matthew Dorny | 75% |
− | If actual results for a particular incentive period equal: |
o | Goal performance levels – The bonus amount will be the participant’s target bonus amount for the incentive period. |
o | Minimum performance levels – The bonus amount will be |
o | Stretch performance levels – The bonus amount will be 200% of the participant’s target bonus amount for the incentive period. |
− | Payouts are interpolated linearly if actual results fall between the minimum and goal measurement points or between the goal and stretch measurement points. |
− | If the minimum adjusted operating income performance level is not met, no bonus is paid regardless of the adjusted revenue performance for that period. |
− | If the minimum adjusted operating income performance level is met but the minimum adjusted revenue performance level is not, |
(dollar amounts in thousands) | |||||||
Metric | 2018 Result | 2019 Targets: $ Value | 2019 Targets: Growth Rates | ||||
Minimum | Target | Stretch | Minimum | Target | Stretch | ||
Adjusted revenue | $2,679,008 | $2,718,000 | $2,826,000 | $2,946,000 | 1.5% | 5.5% | 10.0% |
Adjusted operating income | $311,545 | $320,000 | $341,300 | $360,500 | 2.7% | 9.6% | 15.7% |
(dollar amounts in thousands) | Goal Level | Actual Performance | ||
Adjusted Revenue (50% weight) | ||||
Performance level | $2,826,000 | $2,502,784 | ||
Constant-currency growth over prior-year results | 5.5% | (6.6)% | ||
Percentage of goal performance level achieved | 88.6% | |||
Adjusted Operating Income (50% weight) | ||||
Performance level | $341,300 | $280,562 | ||
Growth over prior-year results | 9.6% | (9.9)% | ||
Percentage of goal performance level achieved | 82.2% | |||
Percentage of Target Bonus Paid | ||||
Adjusted Revenue | 0.0% | |||
Adjusted Operating Income | 0.0% | |||
Total | 0.0% |
(dollar amounts in thousands) | ||||||||
Metric | 2019 Result | 2020 Targets | 2020 Result | % of Goal Level Achieved | % of Target Bonus Paid | |||
Minimum | Goal | Stretch | ||||||
Adjusted revenue (50% weighting) | $2,420,416 | $2,175,000 | $2,420,000 | $2,662,000 | $2,594,120 | 107.2% | 172.0% | |
Adjusted operating income (50% weighting) | $267,426 | $177,000 | $217,000 | $293,000 | $254,436 | 117.3% | 149.3% | |
Aggregate payout percentage, reflecting the weightings noted above: | 160.6% |
− Practices of peer companies − Degree of responsibility for overall corporate performance − Overall compensation levels − Changes in position and/or responsibilities − Individual performance − Company performance − Total stockholder return | − Degree of performance risk in the equity grant program − Potential dilution of our overall equity grants − Accumulated realized and unrealized value of past equity awards − Associated expenses of equity awards − The recommendations of the CEO − Data and context provided by our compensation consultant |
2019 TARGET EQUITY AWARDS | ||||
Percentage Perf.-Based | ||||
Named Executive Officer | Perf.-Based Stock Options (1) | Time- Based RSUs | Number of Awards | Grant Date Fair Value |
Ritch N. Wood | 106,707 | 22,191 | 83% | 61% |
Mark H. Lawrence | 27,439 | 5,707(2) | 83% | 61% |
Ryan S. Napierski | 46,189 | 9,606 | 83% | 61% |
Joseph Y. Chang | 21,646 | 4,502 | 83% | 61% |
D. Matthew Dorny | 21,646 | 4,502 | 83% | 61% |
2020 TARGET EQUITY AWARDS (1) | ||||
Percentage Perf.-Based | ||||
Named Executive Officer | Perf.-Based Stock Options (2) | Time-Based RSUs | Number of Awards | Grant Date Fair Value |
Ritch N. Wood | 244,471 | 45,978 | 84% | 56% |
Mark H. Lawrence | 69,849 | 13,137 | 84% | 56% |
Ryan S. Napierski | 105,821 | 19,902 | 84% | 56% |
Joseph Y. Chang | 49,593 | 9,327 | 84% | 56% |
D. Matthew Dorny | 49,593 | 9,327 | 84% | 56% |
(1) | During 2020, the Board of Directors sought shareholder approval for an amendment to our 2010 Omnibus Incentive Plan to increase the authorized shares under the Plan, among other things. With limited shares available, performance-based stock options were granted as part of our annual grant cycle in February, and time-based restricted stock units were granted after approval of the amended Plan in June. |
(2) | Reflects the number of shares of stock that become eligible for vesting or exercisable if performance is achieved at the goal performance level, the same number used for calculating grant date fair value for purposes of the Summary Compensation Table. |
Minimum Goal ($) | Target Goal ($) | Maximum Goal ($) | Actual ($) | % Vested | |
2017 Award | |||||
➢ 2016 Adjusted EPS: 3.01(1) | |||||
2017 Adjusted EPS Tranche | 3.05 | 3.26 | 3.50 | 3.23(2) | 93% |
2018 Adjusted EPS Tranche | 3.30 | 3.52 | 3.85 | 3.61(3) | 114% |
2019 Adjusted EPS Tranche | 3.56 | 3.80 | 4.15 | 3.10(4) | — |
2018 Award | |||||
➢ 2017 Adjusted EPS: 3.23(2) | |||||
2018 Adjusted EPS Tranche | 3.33 | 3.52 | 3.73 | 3.61(3) | 121% |
2019 Adjusted EPS Tranche | 3.52 | 3.70 | 3.92 | 3.10(4) | — |
2020 Adjusted EPS Tranche | 3.70 | 3.88 | 4.11 | TBD | TBD |
2019 Award | |||||
➢ 2018 Adjusted EPS: 3.61(3) | |||||
2019 Adjusted EPS Tranche | 3.68 | 3.98 | 4.38 | 3.10(4) | — |
2020 Adjusted EPS Tranche | 3.98 | 4.20 | 4.62 | TBD | TBD |
2021 Adjusted EPS Tranche | 4.20 | 4.45 | 4.97 | TBD | TBD |
Minimum Goal ($) | Target Goal ($) | Maximum Goal ($) | Actual ($) | % Vested | |
2018 Award | |||||
➢ 2017 Adjusted EPS: 3.23(1) | |||||
2018 Adjusted EPS Tranche | 3.33 | 3.52 | 3.73 | 3.61(2) | 121% |
2019 Adjusted EPS Tranche | 3.52 | 3.70 | 3.92 | 3.10(3) | — |
2020 Adjusted EPS Tranche | 3.70 | 3.88 | 4.11 | 3.63(3) | — |
2019 Award | |||||
➢ 2018 Adjusted EPS: 3.61(2) | |||||
2019 Adjusted EPS Tranche | 3.68 | 3.98 | 4.38 | 3.10(3) | — |
2020 Adjusted EPS Tranche | 3.98 | 4.20 | 4.62 | 3.63(3) | — |
2021 Adjusted EPS Tranche | 4.20 | 4.45 | 4.97 | TBD | TBD |
2020 Award | |||||
➢ 2019 Adjusted EPS: 3.10(3) | |||||
2020 Adjusted EPS Tranche | 2.00 | 2.50 | 3.60 | 3.63(3) | 200% |
2021 Adjusted EPS Tranche | 2.10 | 2.62 | 3.78 | TBD | TBD |
2022 Adjusted EPS Tranche | 2.21 | 2.75 | 3.97 | TBD | TBD |
(1) |
As compared to our 2017 reported EPS of $2.36, our adjusted EPS reflects an adjustment of $0.87 to reflect the net impact of the 2017 tax reform legislation in the United States. |
As compared to our 2018 reported EPS of $2.16, our adjusted EPS reflects adjustments totaling $1.45 from a charge associated with the conversion of our convertible notes in the first quarter of 2018, adoption of the new revenue standard under U.S. GAAP, the impairment and restructuring charges incurred in the fourth quarter of 2018, and both a gain and a charge associated with the acquisitions in the first quarter of 2018. These adjustments were permitted by the terms of the awards granted in |
No adjustments were made to our 2019 reported EPS of |
−Avon Products, Inc.(1) | − Primerica, Inc. |
− Church & Dwight Co., Inc. | − Revlon, Inc. |
− Edgewell Personal Care Company | − Sally Beauty Holdings, Inc. |
−The Hain Celestial Group, Inc. | − Sensient Technologies Corporation |
−Helen of Troy Limited | − Spectrum Brands Holdings, Inc. |
−Herbalife Nutrition Ltd. | − Tupperware Brands Corporation |
−International Flavors & Fragrances Inc. | − USANA Health Sciences, Inc. |
− Prestige Consumer Healthcare Inc. |
(1) | Acquired by Natura &Co Holding S.A., a Brazilian corporation, in January 2020. |
− | Our compensation programs are market driven and balance short-term incentives with significant long-term equity incentives. |
− | Our global cash incentive compensation is based on revenue and profitability, which are core measures of performance. In addition, substantially all of our revenue is received through cash or credit card payments, as opposed to other credit arrangements, which minimizes risk associated with our revenue-based incentives. Additionally, the Board of Directors and management regularly review the business plans and strategic initiatives, including related risks, proposed to achieve such performance metrics. |
− | A substantial portion of compensation is provided in the form of long-term equity incentives with multi-year vesting. |
− | We do not allow engagement in speculative trading or hedging. Our policies prohibit all of our directors and employees, including executive officers, from holding our stock in margin accounts and from engaging in speculative transactions in our stock, including short sales, options or hedging transactions. Our directors and employees, including executive officers, also are prohibited from pledging their securities in our company. |
Position | Multiple of Base Salary or Annual Retainer | |
CEO | 6.0 | |
Other Executives | 2.5 | |
Non-Employee Directors | 5.0 |
EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS | |
Thomas R. Pisano, Chairman | |
Daniel W. Campbell | |
Andrew D. Lipman | |
Laura Nathanson |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) |
Ritch N. Wood Chief Executive Officer | 2019 | 991,667 | - | 1,322,140 | 2,111,047 | - | 145,526 | 4,570,379 |
2018 | 941,667 | 40,333 | 611,385 | 2,547,233 | 1,794,993 | 129,999 | 6,065,610 | |
2017 | 840,000 | 38,250 | 1,187,424 | 1,580,151 | 525,468 | 129,354 | 4,300,647 | |
Mark H. Lawrence Executive VP and Chief Financial Officer | 2019 | 491,667 | - | 1,992,713 | 542,844 | - | 98,170 | 3,125,393 |
2018 | 445,833 | 19,500 | 171,950 | 716,400 | 637,694 | 73,682 | 2,065,059 | |
2017 | 326,128 | 15,507 | 521,074 | 414,657 | 170,127 | 203,675 | 1,651,168 | |
Ryan S. Napierski President | 2019 | 687,500 | - | 572,325 | 913,788 | - | 122,658 | 2,296,272 |
2018 | 620,833 | 26,792 | 277,046 | 1,154,226 | 1,062,825 | 330,815 | 3,472,537 | |
2017 | 594,318 | 25,750 | 490,048 | 873,291 | 321,223 | 1,069,922 | 3,374,552 | |
Joseph Y. Chang Executive VP of Product Dev. and Chief Scientific Officer | 2019 | 653,333 | - | 268,229 | 428,239 | - | 124,299 | 1,474,100 |
2018 | 616,667 | 26,583 | 135,634 | 565,166 | 878,602 | 108,417 | 2,331,069 | |
2017 | 599,167 | 27,750 | 212,040 | 503,031 | 271,812 | 101,897 | 1,715,697 | |
D. Matthew Dorny Executive VP and General Counsel | 2019 | 504,167 | - | 268,229 | 428,239 | - | 77,063 | 1,277,698 |
2018 | 472,833 | 22,542 | 135,634 | 565,166 | 673,123 | 67,260 | 1,936,558 | |
2017 | 458,333 | 20,000 | 212,040 | 503,031 | 209,295 | 77,340 | 1,480,039 |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) |
Ritch N. Wood Chief Executive Officer | 2020 | 1,000,038 | 850 | 1,642,334 | 2,100,006 | 1,766,600 | 126,730 | 6,636,559 |
2019 | 991,667 | — | 1,322,140 | 2,111,047 | — | 145,526 | 4,570,379 | |
2018 | 941,667 | 40,333 | 611,385 | 2,547,233 | 1,794,993 | 129,999 | 6,065,610 | |
Mark H. Lawrence Executive VP and Chief Financial Officer | 2020 | 520,853 | 850 | 469,254 | 600,003 | 632,363 | 77,136 | 2,300,459 |
2019 | 491,667 | — | 1,992,713 | 542,844 | — | 98,170 | 3,125,393 | |
2018 | 445,833 | 19,500 | 171,950 | 716,400 | 637,694 | 73,682 | 2,065,059 | |
Ryan S. Napierski President | 2020 | 720,861 | 3,350 | 710,899 | 909,002 | 1,164,350 | 104,163 | 3,612,626 |
2019 | 687,500 | — | 572,325 | 913,788 | — | 122,658 | 2,296,272 | |
2018 | 620,833 | 26,792 | 277,046 | 1,154,226 | 1,062,825 | 330,815 | 3,472,537 | |
Joseph Y. Chang Executive VP of Product Dev. and Chief Scientific Officer | 2020 | 672,526 | 850 | 333,160 | 426,004 | 813,038 | 102,386 | 2,347,964 |
2019 | 653,333 | — | 268,229 | 428,239 | — | 124,299 | 1,474,100 | |
2018 | 616,667 | 26,583 | 135,634 | 565,166 | 878,602 | 108,417 | 2,331,069 | |
D. Matthew Dorny Executive VP and General Counsel | 2020 | 510,020 | 850 | 333,160 | 426,004 | 614,295 | 69,451 | 1,953,780 |
2019 | 504,167 | — | 268,229 | 428,239 | — | 77,063 | 1,277,698 | |
2018 | 472,833 | 22,542 | 135,634 | 565,166 | 673,123 | 67,260 | 1,936,558 |
(1) | Messrs. Lawrence, Napierski, |
(2) | The amounts reported in this column |
(3) | The amounts reported in these columns reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718 and, for performance-based awards, are based on the probable outcome of the performance conditions as of the grant date. The amounts do not represent amounts actually received by the NEOs. For this purpose, the estimate of forfeitures is disregarded, and the value of the stock awards is discounted to reflect that no dividends are paid prior to vesting. For information on the valuation assumptions used in calculating these amounts, refer to Note 9 to our financial statements in the Form 10-K filed for the fiscal year ended December 31, |
The aggregate grant date fair value of the 2020 performance-based option awards, assuming achievement of the maximum performance level, would be: Mr. Wood – $4,200,012; Mr. Lawrence – $1,200,006; Mr. Napierski – $1,818,005; Mr. Chang – $852,008; and Mr. Dorny – $852,008. |
(4) | See “Executive Compensation: Compensation Discussion and Analysis—Cash Incentive Bonus” for information regarding the amounts reported in this column. For years in which non-equity incentive bonuses were earned, Messrs. Lawrence, Napierski |
(5) | The following table describes the components of the All Other Compensation column for |
Name | Company Contributions to Deferred Compensation Plan ($) | Company Contributions to 401(k) Retirement Savings Plan ($) | Perquisites and Other Personal Benefits ($)(a) | Other ($)(b) | Total ($) | |
Ritch N. Wood | 100,000 | 11,200 | 28,366 | 5,960 | 145,526 | |
Mark H. Lawrence | 50,000 | 11,200 | 30,765 | 6,205 | 98,170 | |
Ryan S. Napierski | 70,000 | 11,200 | 20,175 | 21,283 | 122,658 | |
Joseph Y. Chang | 66,000 | 11,200 | 28,527 | 18,572 | 124,299 | |
D. Matthew Dorny | 51,000 | 11,200 | 12,088 | 2,775 | 77,063 |
Name | Company Contributions to Deferred Compensation Plan ($) | Company Contributions to 401(k) Retirement Savings Plan ($) | Perquisites and Other Personal Benefits ($)(a) | Other ($)(b) | Total ($) |
Ritch N. Wood | 100,000 | 11,400 | 13,952 | 1,378 | 126,730 |
Mark H. Lawrence | 52,500 | 11,400 | 10,644 | 2,592 | 77,136 |
Ryan S. Napierski | 72,500 | 11,400 | 9,686 | 10,577 | 104,163 |
Joseph Y. Chang | 67,500 | 11,400 | 11,885 | 11,601 | 102,386 |
D. Matthew Dorny | 51,000 | 11,400 | 5,494 | 1,556 | 69,451 |
(a) | This column reports our incremental cost for perquisites and personal benefits provided to the NEOs. In |
(b) | This column includes |
Estimated Future Payouts under non-Equity Incentive Plan Awards | Estimated Future Payouts under Equity Incentive Plan Awards | |||||||||
Name | Grant Date | Threshold ($)(1) | Target ($)(1) | Max ($)(1) | Threshold (#)(2) | Target (#)(2) | Max (#)(2) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Exercise or Base Price of Option Awards ($)(3) | Grant Date Fair Value of Stock and Option Awards ($)(4) |
Ritch N. Wood | ||||||||||
2/15/2019 | 53,354 | 106,707 | 213,414 | 63.09 | 2,111,047 | |||||
2/15/2019 | 22,191 | 1,322,140 | ||||||||
N/A | 275,000 | 1,100,000 | 2,200,000 | |||||||
Mark H. Lawrence | ||||||||||
2/15/2019 | 13,720 | 27,439 | 54,878 | 63.09 | 542,844 | |||||
2/15/2019 | 5,707 | 340,023 | ||||||||
2/15/2019(5) | 27,739 | 1,652,690 | ||||||||
N/A | 93,750 | 375,000 | 750,000 | |||||||
Ryan S. Napierski | ||||||||||
2/15/2019 | 23,095 | 46,189 | 92,378 | 63.09 | 913,788 | |||||
2/15/2019 | 9,606 | 572,325 | ||||||||
N/A | 175,000 | 700,000 | 1,400,000 | |||||||
Joseph Y. Chang | ||||||||||
2/15/2019 | 10,823 | 21,646 | 43,292 | 63.09 | 428,239 | |||||
2/15/2019 | 4,502 | 268,229 | ||||||||
N/A | 123,750 | 495,000 | 990,000 | |||||||
D. Matthew Dorny | ||||||||||
2/15/2019 | 10,823 | 21,646 | 43,292 | 63.09 | 428,239 | |||||
2/15/2019 | 4,502 | 268,229 | ||||||||
N/A | 95,625 | 382,500 | 765,000 |
Estimated Possible Payouts under non-Equity Incentive Plan Awards | Estimated Future Payouts under Equity Incentive Plan Awards | ||||||||||
Name | Grant Date(1) | Date of Executive Compensation Committee Approval | Threshold ($)(2) | Target ($)(2) | Max ($)(2) | Threshold (#)(3) | Target (#)(3) | Max (#)(3) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Exercise or Base Price of Option Awards ($)(4) | Grant Date Fair Value of Stock and Option Awards ($)(5) |
Ritch N. Wood | |||||||||||
2/15/2020 | 2/7/2020 | 122,236 | 244,471 | 488,942 | 30.45 | 2,100,006 | |||||
6/3/2020 | 2/7/2020 | 45,978 | 1,642,334 | ||||||||
N/A | 137,500 | 1,100,000 | 2,200,000 | ||||||||
Mark H. Lawrence | |||||||||||
2/15/2020 | 2/7/2020 | 34,925 | 69,849 | 139,698 | 30.45 | 600,003 | |||||
6/3/2020 | 2/7/2020 | 13,137 | 469,254 | ||||||||
N/A | 49,219 | 393,750 | 787,500 | ||||||||
Ryan S. Napierski | |||||||||||
2/15/2020 | 2/7/2020 | 52,911 | 105,821 | 211,642 | 30.45 | 909,002 | |||||
6/3/2020 | 2/7/2020 | 19,902 | 710,899 | ||||||||
N/A | 90,625 | 725,000 | 1,450,000 | ||||||||
Joseph Y. Chang | |||||||||||
2/15/2020 | 2/7/2020 | 24,797 | 49,593 | 99,186 | 30.45 | 426,004 | |||||
6/3/2020 | 2/7/2020 | 9,327 | 333,160 | ||||||||
N/A | 63,281 | 506,250 | 1,012,500 | ||||||||
D. Matthew Dorny | |||||||||||
2/15/2020 | 2/7/2020 | 24,797 | 49,593 | 99,186 | 30.45 | 426,004 | |||||
6/3/2020 | 2/7/2020 | 9,327 | 333,160 | ||||||||
N/A | 47,813 | 382,500 | 765,000 |
(1) | Equity awards having a grant date of 2/15/2020 and all non-equity incentive plan awards were granted pursuant to our Second Amended and Restated 2010 Omnibus Incentive Plan. Equity awards having a grant date of 6/3/2020 were pursuant to our Third Amended and Restated 2010 Omnibus Incentive Plan, with each grant contingent upon stockholder approval of that Plan. Stockholder approval occurred at our 2020 Annual Meeting of Stockholders on 6/3/2020. |
(2) | The amounts reported in these columns reflect potential payouts |
The awards reported in these columns are performance-based stock options granted under our Second Amended and Restated 2010 Omnibus Incentive Plan. The amounts reported in |
This column shows the exercise price for the stock option awards, which is the closing price of our stock on the grant date or, if the grant date was a weekend or holiday, the last preceding date on which a closing price was reported. |
The amounts reported in this column reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718 and, for performance-based awards, are based on the probable outcome of the performance conditions as of the grant date. For this purpose, the estimate of forfeitures is disregarded, and the value of the stock awards is discounted to reflect that no dividends are paid prior to vesting. For information on the valuation assumptions used in calculating these amounts, refer to Note 9 to our financial statements in the Form 10-K filed for the fiscal year ended December 31, |
− | Time-based equity awards granted to Mr. Chang will fully vest upon certain terminations of employment within six months prior to and in connection with, or within two years following, a change in control; |
− | Mr. Chang will be bound by certain covenants, including non-solicitation, non-competition and non-endorsement, that are in addition to, or supersede, previous key employee covenants; |
− | Mr. Chang will be entitled to certain termination payments, as described in “Executive Compensation Tables and Accompanying Narrative—Potential Payments Upon Termination or Change in Control” below. |
Option Awards | Stock Awards | |||||||
Name and Award Type (1) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#)(2) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(3)(4) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(5) | Market Value of Shares or Units of Stock That Have Not Vested ($)(6) |
Ritch N. Wood | ||||||||
SO | 2/15/2013 | 13,750 | 41.27 | 2/15/2020 | ||||
PSO | 2/15/2013 | 8,750 | 41.27 | 2/15/2020 | ||||
PSO | 7/15/2013 | 18,750 | 77.65 | 7/15/2020 | ||||
SO | 12/9/2013 | 13,750 | 131.52 | 12/9/2020 | ||||
SO | 3/31/2014 | 6,800 | 82.85 | 3/31/2021 | ||||
SO | 12/17/2014 | 6,800 | 39.51 | 12/17/2021 | ||||
SO | 3/10/2015 | 6,800 | 54.97 | 3/10/2022 | ||||
SO | 12/18/2015 | 6,800 | 37.58 | 12/18/2022 | ||||
SO | 3/2/2016 | 102,450 | 34,150 | 30.63 | 3/2/2023 | |||
PSO | 3/2/2016 | 54,525 | 30.63 | 3/2/2023 | ||||
PSO | 3/4/2017 | 58,306 | 14,084 | 50.68 | 3/4/2024 | |||
RSU | 3/4/2017 | 12,600 | 516,348 | |||||
PSO | 3/8/2018 | 41,753 | 34,506 | 71.99 | 3/8/2025 | |||
RSU | 3/8/2018 | 6,666 | 273,173 | |||||
PSO | 2/15/2019 | 53,354 | 63.09 | 2/15/2026 | ||||
RSU | 2/15/2019 | 22,191 | 909,387 | |||||
Mark H. Lawrence | ||||||||
PSO | 3/27/2017 | 14,422 | 3,484 | 54.23 | 3/27/2024 | |||
RSU | 3/27/2017 | 4,100 | 168,018 | |||||
PSO | 3/8/2018 | 11,742 | 9,705 | 71.99 | 3/8/2025 | |||
RSU | 3/8/2018 | 1,875 | 76,838 | |||||
PSO | 2/15/2019 | 13,720 | 63.09 | 2/15/2026 | ||||
RSU | 2/15/2019 | 5,707 | 233,873 | |||||
RSU | 2/15/2019 | 27,739 | 1,136,744 | |||||
Ryan S. Napierski | ||||||||
PSO | 7/15/2013 | 12,500 | 77.65 | 7/15/2020 | ||||
SO | 12/18/2015 | 6,800 | 37.58 | 12/18/2022 | ||||
SO | 12/18/2015 | 50,000 | 37.58 | 12/18/2022 | ||||
SO | 3/2/2016 | 76,850 | 28,950 | 30.63 | 3/2/2023 | |||
PSO | 3/2/2016 | 50,913 | 30.63 | 3/2/2023 | ||||
PSO | 3/4/2017 | 32,224 | 7,784 | 50.68 | 3/4/2024 | |||
RSU | 3/4/2017 | 5,200 | 213,096 | |||||
PSO | 3/8/2018 | 18,919 | 15,636 | 71.99 | 3/8/2025 | |||
RSU | 3/8/2018 | 3,021 | 123,801 | |||||
PSO | 2/15/2019 | 23,095 | 63.09 | 2/15/2026 | ||||
RSU | 2/15/2019 | 9,606 | 393,654 |
Option Awards | Stock Awards | |||||||
Name and Award Type (1) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2)(3) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) |
Ritch N. Wood | ||||||||
SO | 3/31/2014 | 6,800 | 82.85 | 3/31/2021 | ||||
SO | 12/17/2014 | 6,800 | 39.51 | 12/17/2021 | ||||
SO | 3/10/2015 | 6,800 | 54.97 | 3/10/2022 | ||||
SO | 12/18/2015 | 6,800 | 37.58 | 12/18/2022 | ||||
SO | 3/2/2016 | 136,600 | 30.63 | 3/2/2023 | ||||
PSO | 3/2/2016 | 54,525 | 30.63 | 3/2/2023 | ||||
PSO | 3/4/2017 | 58,306 | 50.68 | 3/4/2024 | ||||
RSU | 3/4/2017 | 6,300 | 344,169 | |||||
PSO | 3/8/2018 | 41,753 | 17,253 | 71.99 | 3/8/2025 | |||
RSU | 3/8/2018 | 4,444 | 242,776 | |||||
PSO | 2/15/2019 | 35,571 | 63.09 | 2/15/2026 | ||||
RSU | 2/15/2019 | 16,643 | 909,207 | |||||
PSO | 2/15/2020 | 488,942 | 30.45 | 2/15/2027 | ||||
RSU | 6/3/2020 | 45,978 | 2,511,778 | |||||
Mark H. Lawrence | ||||||||
PSO | 3/27/2017 | 14,422 | 54.23 | 3/27/2024 | ||||
RSU | 3/27/2017 | 2,050 | 111,992 | |||||
PSO | 3/8/2018 | 11,742 | 4,853 | 71.99 | 3/8/2025 | |||
RSU | 3/8/2018 | 1,250 | 68,288 | |||||
PSO | 2/15/2019 | 9,147 | 63.09 | 2/15/2026 | ||||
RSU | 2/15/2019 | 4,280 | 233,816 | |||||
RSU | 2/15/2019 | 18,493 | 1,010,273 | |||||
PSO | 2/15/2020 | 139,698 | 30.45 | 2/15/2027 | ||||
RSU | 6/3/2020 | 13,137 | 717,674 | |||||
Ryan S. Napierski | ||||||||
SO | 12/18/2015 | 6,800 | 37.58 | 12/18/2022 | ||||
SO | 12/18/2015 | 50,000 | 37.58 | 12/18/2022 | ||||
SO | 3/2/2016 | 77,800 | 30.63 | 3/2/2023 | ||||
PSO | 3/2/2016 | 30,913 | 30.63 | 3/2/2023 | ||||
PSO | 3/4/2017 | 32,224 | 50.68 | 3/4/2024 | ||||
RSU | 3/4/2017 | 2,600 | 142,038 | |||||
PSO | 3/8/2018 | 18,919 | 7,818 | 71.99 | 3/8/2025 | |||
RSU | 3/8/2018 | 2,014 | 110,025 | |||||
PSO | 2/15/2019 | 15,398 | 63.09 | 2/15/2026 | ||||
RSU | 2/15/2019 | 7,204 | 393,555 | |||||
PSO | 2/15/2020 | 211,642 | 30.45 | 2/15/2027 | ||||
RSU | 6/3/2020 | 19,902 | 1,087,246 |
Option Awards | Stock Awards | |||||||
Name and Award Type (1) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2)(3) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) |
Joseph Y. Chang | Joseph Y. Chang | Joseph Y. Chang | ||||||||||||||
SO | 3/31/2014 | 6,800 | 82.85 | 3/31/2021 | ||||||||||||
SO | 3/10/2015 | 6,800 | 54.97 | 3/10/2022 | ||||||||||||
SO | 12/18/2015 | 6,800 | 37.58 | 12/18/2022 | ||||||||||||
SO | 2/15/2013 | 5,900 | 41.27 | 2/15/2020 | 3/2/2016 | 90,600 | 30.63 | 3/2/2023 | ||||||||
PSO | 2/15/2013 | 3,750 | 41.27 | 2/15/2020 | 3/2/2016 | 42,485 | 30.63 | 3/2/2023 | ||||||||
PSO | 7/15/2013 | 12,500 | 77.65 | 7/15/2020 | 3/4/2017 | 18,562 | 50.68 | 3/4/2024 | ||||||||
SO | 12/9/2013 | 6,250 | 131.52 | 12/9/2020 | ||||||||||||
RSU | 3/4/2017 | 1,125 | 61,459 | |||||||||||||
PSO | 3/8/2018 | 9,264 | 3,828 | 71.99 | 3/8/2025 | |||||||||||
RSU | 3/8/2018 | 986 | 53,865 | |||||||||||||
PSO | 2/15/2019 | 7,216 | 63.09 | 2/15/2026 | ||||||||||||
RSU | 2/15/2019 | 3,376 | 184,431 | |||||||||||||
PSO | 2/15/2020 | 99,186 | 30.45 | 2/15/2027 | ||||||||||||
RSU | 6/3/2020 | 9,327 | 509,534 | |||||||||||||
D. Matthew Dorny | D. Matthew Dorny | |||||||||||||||
SO | 3/31/2014 | 6,800 | 82.85 | 3/31/2021 | 3/31/2014 | 5,000 | 82.85 | 3/31/2021 | ||||||||
SO | 12/17/2014 | 6,800 | 39.51 | 12/17/2021 | 12/17/2014 | 4,900 | 39.51 | 12/17/2021 | ||||||||
SO | 3/10/2015 | 6,800 | 54.97 | 3/10/2022 | 3/10/2015 | 5,000 | 54.97 | 3/10/2022 | ||||||||
SO | 12/18/2015 | 6,800 | 37.58 | 12/18/2022 | 12/18/2015 | 6,000 | 37.58 | 12/18/2022 | ||||||||
SO | 3/2/2016 | 67,950 | 22,650 | 30.63 | 3/2/2023 | 3/2/2016 | 52,000 | 30.63 | 3/2/2023 | |||||||
PSO | 3/2/2016 | 42,485 | 30.63 | 3/2/2023 | 3/2/2016 | 41,235 | 30.63 | 3/2/2023 | ||||||||
PSO | 3/4/2017 | 18,562 | 4,484 | 50.68 | 3/4/2024 | 3/4/2017 | 18,562 | 50.68 | 3/4/2024 | |||||||
RSU | 3/4/2017 | 2,250 | 92,205 | 3/4/2017 | 1,125 | 61,459 | ||||||||||
PSO | 3/8/2018 | 9,264 | 7,656 | 71.99 | 3/8/2025 | 3/8/2018 | 9,264 | 3,828 | 71.99 | 3/8/2025 | ||||||
RSU | 3/8/2018 | 1,479 | 60,609 | 3/8/2018 | 986 | 53,865 | ||||||||||
PSO | 2/15/2019 | 10,823 | 63.09 | 2/15/2026 | 2/15/2019 | 7,216 | 63.09 | 2/15/2026 | ||||||||
RSU | 2/15/2019 | 4,502 | 184,492 | 2/15/2019 | 3,376 | 184,431 | ||||||||||
D. Matthew Dorny | ||||||||||||||||
SO | 2/15/2013 | 6,250 | 41.27 | 2/15/2020 | ||||||||||||
PSO | 2/15/2013 | 3,750 | 41.27 | 2/15/2020 | ||||||||||||
PSO | 7/15/2013 | 12,500 | 77.65 | 7/15/2020 | ||||||||||||
SO | 12/9/2013 | 6,250 | 131.52 | 12/9/2020 | ||||||||||||
SO | 3/31/2014 | 5,000 | 82.85 | 3/31/2021 | ||||||||||||
SO | 12/17/2014 | 4,900 | 39.51 | 12/17/2021 | ||||||||||||
SO | 3/10/2015 | 5,000 | 54.97 | 3/10/2022 | ||||||||||||
SO | 12/18/2015 | 6,000 | 37.58 | 12/18/2022 | ||||||||||||
SO | 3/2/2016 | 47,950 | 22,650 | 30.63 | 3/2/2023 | |||||||||||
PSO | 3/2/2016 | 41,235 | 30.63 | 3/2/2023 | ||||||||||||
PSO | 3/4/2017 | 18,562 | 4,484 | 50.68 | 3/4/2024 | 2/15/2020 | 99,186 | 30.45 | 2/15/2027 | |||||||
RSU | 3/4/2017 | 2,250 | 92,205 | 6/3/2020 | 9,327 | 509,534 | ||||||||||
PSO | 3/8/2018 | 9,264 | 7,656 | 71.99 | 3/8/2025 | |||||||||||
RSU | 3/8/2018 | 1,479 | 60,609 | |||||||||||||
PSO | 2/15/2019 | 10,823 | 63.09 | 2/15/2026 | ||||||||||||
RSU | 2/15/2019 | 4,502 | 184,492 |
(1) | Award types are as follows: |
SO: Time-Based Stock Options |
PSO: Performance-Based Stock Options |
(2) | |||
Grant Date | Vesting Schedule | ||
3/8/2018 | |||
2/15/2019 | No portion of the first or second tranche vested based on adjusted EPS achieved in 2019 and | ||
2/15/2020 |
In accordance with SEC rules, these columns report the potential number of |
Time-Based Restricted Stock Units |
Grant Date | Vesting Schedule | ||
3/4/2017 | Vest in four equal annual installments, the first of which vested on March 4, 2018. | ||
3/27/2017 | Vest in four equal annual installments, the first of which vested on March 2, 2018. | ||
3/8/2018 | Vest in four equal annual installments, the first of which vested on February 15, 2019. | ||
2/15/2019 | Vest in four equal annual installments, the first of which vested on February 15, 2020, except for Mr. Lawrence’s award of | ||
6/3/2020 | Vest in four equal annual installments, the first of which vested on February 15, 2021. |
The market value of the restricted stock units reported in these columns is based on the closing market price of our stock on December 31, |
Option Awards | Stock Awards | ||||||||
Name | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(3) | |||||
Ritch N. Wood | 31,250 | 405,625 | 8,523 | 516,611 | |||||
Mark H. Lawrence | — | — | 2,675 | 160,914 | |||||
Ryan S. Napierski | — | — | 7,666 | 464,259 | |||||
Joseph Y. Chang | 7,500 | 97,350 | 1,618 | 98,311 | |||||
D. Matthew Dorny | 15,000 | 215,938 | 1,618 | 98,311 |
Option Awards | Stock Awards | |||
Name | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(3) |
Ritch N. Wood | — | — | 14,070 | 397,688 |
Mark H. Lawrence | — | — | 13,348 | 394,762 |
Ryan S. Napierski | 48,000 | 1,046,951 | 6,009 | 170,286 |
Joseph Y. Chang | 6,800 | 72,478 | 2,744 | 78,065 |
D. Matthew Dorny | 18,600 | 382,943 | 2,744 | 78,065 |
(1) |
(2) | Value realized on exercise of stock options is equal to the number of options exercised multiplied by the market value of our common stock at exercise less the exercise price, and is calculated before payment of any applicable withholding taxes and broker commissions. |
(3) | Value realized on vesting of restricted stock units is equal to the number of restricted stock units vested multiplied by the market value of our common stock on the vesting date, and is calculated before payment of any applicable withholding taxes and broker commissions. |
Name of Fund | Rate of Return | Name of Fund | Rate of Return | ||
Great-West Gov’t Money Market - Instl Shares | 0.43% | Neuberger Berman AMT Mid-Cap Intrinsic Value - I Class | 4.37% | ||
American Century VP Inflation Protection - Class I Shares | 0.87% | LVIP SSgA Mid-Cap Index - Standard Class | 6.97% | ||
Vanguard VIF Short-Term Investment-Grade | 0.56% | Great-West T. Rowe Price Mid Cap Growth - Investor Class | 6.52% | ||
LVIP Delaware Bond - Standard Class | 0.11% | Delaware VIP Small Cap Value Series - Standard Class | 8.84% | ||
Putnam VT High Yield - Class IA | 2.73% | DWS VIT Small Cap Index VIP - Class A | 9.84% | ||
Templeton Global Bond VIP - Class 1 | 1.46% | Vanguard VIF Small Company Growth | 10.06% | ||
Great-West Conservative Profile - Investor Class | 2.45% | American Funds Global Growth - Class 2 | 12.69% | ||
Great-West Moderately Conservative Profile - Investor Class | 3.60% | American Funds IS Global Growth and Income - Class 2 | 9.10% | ||
Great-West Moderate Profile - Investor Class | 4.81% | American Funds Global Small Capitalization - Class 2 | 10.52% | ||
Great-West Moderately Aggressive Profile - Investor Class | 5.80% | AB VPS International Value - Class A | 8.63% | ||
Great-West Aggressive Profile - Investor Class | 7.90% | American Funds International - Class 2 | 9.46% | ||
Delaware VIP Value Series - Standard Class | 5.86% | Van Eck VIP Emerging Markets - Initial Class | 9.24% | ||
MFS VIT Value - Initial Class | 7.11% | Vanguard VIF Real Estate Index | 0.59% | ||
Vanguard VIF Equity Index | 9.03% | MFS VIT Utilities Series - Initial Class | 1.68% | ||
Delaware VIP U.S. Growth Series - Standard Class | 5.62% | Nu Skin Enterprises Inc. Restricted Stock Units | -2.71% | ||
Vanguard VIF Growth | 7.67% |
Name of Fund | Rate of Return | Name of Fund | Rate of Return |
Great-West Gov't Money Market - Instl Shares | 0.41% | Neuberger Berman AMT Mid-Cap Intrinsic Value - I Class | -2.62% |
American Century VP Inflation Protection - Class I Shares | 9.81% | LVIP SSgA Mid-Cap Index - Standard Class | 13.19% |
Vanguard VIF Short-Term Investment-Grade | 5.49% | Great-West T. Rowe Price Mid Cap Growth - Investor Class | 24.11% |
LVIP Delaware Bond - Standard Class | 9.87% | Delaware VIP Small Cap Value Series - Standard Class | -1.90% |
Putnam VT High Yield - Class IA | 5.50% | DWS VIT Small Cap Index VIP - Class A | 19.43% |
Templeton Global Bond VIP - Class 1 | -5.07% | Vanguard VIF Small Company Growth | 23.18% |
Great-West Conservative Profile - Investor Class | 8.21% | American Funds Global Growth - Class 2 | 30.47% |
Great-West Moderately Conservative Profile - Investor Class | 9.57% | American Funds IS Global Growth and Income - Class 2 | 8.73% |
Great-West Moderate Profile - Investor Class | 11.25% | American Funds Global Small Capitalization - Class 2 | 29.73% |
Great-West Moderately Aggressive Profile - Investor Class | 11.75% | AB VPS International Value - Class A | 2.47% |
Great-West Aggressive Profile - Investor Class | 11.99% | American Funds International - Class 2 | 13.98% |
Delaware VIP Value Series - Standard Class | 0.41% | Van Eck VIP Emerging Markets - Initial Class | 17.25% |
MFS VIT Value - Initial Class | 3.48% | Vanguard VIF Real Estate Index | -4.85% |
Vanguard VIF Equity Index | 18.20% | MFS VIT Utilities Series - Initial Class | 5.90% |
Vanguard VIF Growth | 43.09% | Nu Skin Enterprises Inc. Restricted Stock Units | 39.04% |
Delaware VIP U.S. Growth Series - Standard Class | 44.13% |
Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(1) | Aggregate Earnings in Last FY ($)(1) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE ($)(1) | |
Ritch N. Wood | — | 100,000 | 226,364 | — | 1,430,148 | |
Mark H. Lawrence | 4,896 | 50,000 | 29,265 | — | 190,971 | |
Ryan S. Napierski | 72,344 | 70,000 | 851,280 | — | 4,185,595 | |
Joseph Y. Chang | 5,167 | 66,000 | 1,493,555 | (200,414) | 8,705,355 | |
D. Matthew Dorny | 146,955 | 51,000 | 161,034 | — | 2,005,225 |
Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(1) | Aggregate Earnings in Last FY ($)(1) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE ($)(1) | |
Ritch N. Wood | — | 100,000 | 214,246 | — | 1,744,394 | |
Mark H. Lawrence | 11,303 | 52,500 | 48,627 | — | 303,401 | |
Ryan S. Napierski | 301,830 | 72,500 | 1,052,084 | — | 5,612,008 | |
Joseph Y. Chang | — | 67,500 | 1,055,902 | — | 9,828,757 | |
D. Matthew Dorny | 450,898 | 51,000 | 112,667 | — | 2,619,790 |
(1) | Executive and registrant contribution amounts are and have been reflected in the |
Name | Voluntary Termination ($) | Involuntary Termination for Cause ($) | Involuntary Termination Not for Cause ($) | Termination (Including Constructive Termination) in Connection with Change of Control ($) | Death ($)(1) | Disability ($) |
Ritch N. Wood | ||||||
Severance(2) | 750,000 | — | 1,500,000 | 4,200,000 | — | 250,000 |
Equity(3) | — | — | — | 2,052,360 | — | — |
Deferred Compensation(4) | 1,430,148 | 1,430,148 | 1,430,148 | 1,430,148 | 4,622,222 | 1,430,148 |
Health Benefits(5) | — | — | 24,597 | 24,597 | — | — |
Total | 2,180,148 | 1,430,148 | 2,954,745 | 7,707,106 | 4,622,222 | 1,680,148 |
Mark H. Lawrence | ||||||
Severance(2) | 375,000 | — | 625,000 | 1,312,500 | — | 125,000 |
Equity(3) | — | — | — | 1,615,473 | — | — |
Deferred Compensation(4) | 46,844 | 46,844 | 46,844 | 46,844 | 190,971 | 190,971 |
Health Benefits(5) | — | — | 24,808 | 24,808 | — | — |
Total | 421,844 | 46,844 | 696,652 | 2,999,624 | 190,971 | 315,971 |
Ryan S. Napierski | ||||||
Severance(2) | 525,000 | — | 875,000 | 2,100,000 | — | 175,000 |
Equity(3) | — | — | — | 1,030,183 | — | — |
Deferred Compensation(4) | 4,185,595 | 4,185,595 | 4,185,595 | 4,185,595 | 6,616,955 | 4,185,595 |
Health Benefits(5) | — | — | 24,348 | 24,348 | — | — |
Total | 4,710,595 | 4,185,595 | 5,084,943 | 7,340,126 | 6,616,955 | 4,360,595 |
Joseph Y. Chang | ||||||
Severance(2) | 1,245,000 | — | 1,575,000 | 2,977,500 | 495,000 | 660,000 |
Equity(3) | — | — | — | 571,734 | — | — |
Deferred Compensation(4) | 8,705,355 | 8,705,355 | 8,705,355 | 8,705,355 | 10,079,221 | 8,705,355 |
Health Benefits(5) | — | — | 15,441 | 15,441 | — | — |
Total | 9,950,355 | 8,705,355 | 10,295,795 | 12,270,029 | 10,574,221 | 9,365,355 |
D. Matthew Dorny | ||||||
Severance(2) | 382,500 | — | 637,500 | 1,338,750 | — | 127,500 |
Equity(3) | — | — | — | 571,734 | — | — |
Deferred Compensation(4) | 2,005,225 | 2,005,225 | 2,005,225 | 2,005,225 | 3,381,277 | 2,005,225 |
Health Benefits(5) | — | — | 24,597 | 24,597 | — | — |
Total | 2,387,725 | 2,005,225 | 2,667,322 | 3,940,306 | 3,381,277 | 2,132,725 |
Name | Voluntary Termination ($) | Involuntary Termination for Cause ($) | Involuntary Termination Not for Cause ($) | Termination (Including Constructive Termination) in Connection with Change of Control ($) | Death ($)(1) | Disability ($) |
Ritch N. Wood | ||||||
Severance(2) | 750,000 | — | 3,266,600 | 5,966,600 | 1,766,600 | 2,016,600 |
Equity(3) | — | — | — | 9,919,239 | — | — |
Deferred Compensation(4) | 1,744,394 | 1,744,394 | 1,744,394 | 1,744,394 | 4,888,953 | 1,744,394 |
Health Benefits(5) | — | — | 26,246 | 26,246 | — | — |
Total | 2,494,394 | 1,744,394 | 5,037,239 | 17,656,478 | 6,655,553 | 3,760,994 |
Mark H. Lawrence | ||||||
Severance(2) | 393,750 | — | 1,288,613 | 2,010,488 | 632,363 | 763,613 |
Equity(3) | — | — | — | 3,830,991 | — | — |
Deferred Compensation(4) | 61,577 | 61,577 | 61,577 | 61,577 | 61,577 | 297,077 |
Health Benefits(5) | — | — | 26,460 | 26,460 | — | — |
Total | 455,327 | 61,577 | 1,376,650 | 5,929,516 | 693,940 | 1,060,690 |
Ryan S. Napierski | ||||||
Severance(2) | 543,750 | — | 2,070,600 | 3,339,350 | 1,164,350 | 1,345,600 |
Equity(3) | — | — | — | 2,585,781 | — | — |
Deferred Compensation(4) | 5,379,138 | 5,379,138 | 5,379,138 | 5,379,138 | 7,754,399 | 5,379,138 |
Health Benefits(5) | — | — | 25,879 | 25,879 | — | — |
Total | 5,922,888 | 5,379,138 | 7,475,618 | 11,330,149 | 8,918,749 | 6,724,738 |
Joseph Y. Chang | ||||||
Severance(2) | 1,368,750 | — | 2,519,288 | 3,447,413 | 813,038 | 981,788 |
Equity(3) | — | — | — | 2,008,448 | — | — |
Deferred Compensation(4) | 9,828,757 | 9,828,757 | 9,828,757 | 9,828,757 | 11,038,198 | 9,828,757 |
Health Benefits(5) | — | — | 16,475 | 16,475 | — | — |
Total | 11,197,507 | 9,828,757 | 12,364,520 | 15,301,092 | 11,851,236 | 10,810,545 |
D. Matthew Dorny | ||||||
Severance(2) | 382,500 | — | 1,251,795 | 1,953,045 | 614,295 | 741,795 |
Equity(3) | — | — | — | 2,008,448 | — | — |
Deferred Compensation(4) | 2,312,642 | 2,312,642 | 2,312,642 | 2,312,642 | 3,670,572 | 2,312,642 |
Health Benefits(5) | — | — | 26,460 | 26,460 | — | — |
Total | 2,695,142 | 2,312,642 | 3,590,897 | 6,300,595 | 4,284,867 | 3,054,437 |
(1) | The amounts reported in this column do not include the proceeds payable on death from term life insurance policies for which we pay the premiums, with coverage, as of December 31, |
(2) | Our Executive Severance Policy applies to all of the |
(3) |
(4) | The amounts reported for deferred compensation, other than for death and disability, reflect only the amounts deferred by the NEOs, the vested portion of amounts contributed by us and earnings on such amounts. We may, at our discretion, accelerate vesting of the unvested amounts contributed by us in the event of a change in control. If we were to accelerate vesting, the total amounts of deferred compensation payable to our NEOs would be as follows: Mr. Wood – |
(5) | Our Executive Severance Policy |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
Equity compensation plans approved by security holders | 3,694,060(1) | $55.38(2) | 2,203,007(3) | 4,099,717(1) | $44.76(2) | 5,817,529(3) |
Equity compensation plans not approved by security holders | — | — | — | |||
Total | 3,694,060 | $55.38 | 2,203,007 | 4,099,717 | $44.76 | 5,817,529 |
(1) | Our program enables us to successfully recruit, motivate and retain experienced and talented executives; |
(2) | We implement a pay-for-performance philosophy through the use of incentives that: |
a. | Are tied to corporate and individual performance; |
b. | Align the financial interests of our executives with those of our stockholders; and |
c. | Drive superior stockholder value. |
− |
− |
ANNUAL EQUITY USAGE | |||||
2017 | 2018 | 2019 | 3-Year Average | ||
Options and performance options | 293,200 | 920,139 | 454,515 | 555,951 | |
RSUs and performance RSUs | 261,404 | 202,653 | 341,878 | 268,645 | |
Gross grants | 554,604 | 1,122,792 | 796,393 | 824,596 | |
Weighted-average shares outstanding | 52,805,678 | 55,170,420 | 55,517,542 | 54,497,880 | |
Gross usage (% of outstanding)(1) | 1.05% | 2.04% | 1.43% | 1.51% |
FULLY-DILUTED OVERHANG CALCULATION | |||
As of Dec. 31, 2019 | As of Dec. 31, 2019, Giving Effect to Additional Share Reserve | ||
Shares outstanding | 55,547,214 | 55,547,214 | |
Potential dilution: | |||
Shares issuable under outstanding equity awards(1) | 3,694,060 | 3,694,060 | |
Shares available for future awards under Second Amended and Restated Plan | 2,203,007 | 2,203,007 | |
Additional share reserve under Third Amended and Restated Plan | 5,896,993 | ||
Fully-diluted shares outstanding | 61,444,281 | 67,341,274 | |
Fully-diluted overhang(2) | 9.6% | 17.5% |
NEW PLAN BENEFITS Third Amended and Restated 2010 Omnibus Incentive Plan | ||
Name and Position | Dollar Value ($)(1) | Number of Units |
Ritch N. Wood Chief Executive Officer | 1,400,000 | 45,978 |
Mark H. Lawrence Executive VP and Chief Financial Officer | 400,000 | 13,137 |
Ryan S. Napierski President | 606,000 | 19,902 |
Joseph Y. Chang Executive VP of Product Dev. and Chief Scientific Officer | 284,000 | 9,327 |
D. Matthew Dorny Executive VP and General Counsel | 284,000 | 9,327 |
Executive Group | 2,974,000 | 97,671 |
Non-Executive Director Group | - | - |
Non-Executive Officer Employee Group | 13,529,056 | 444,425 |
16,503,056 | 542,096 |
HISTORICAL GRANTS TABLE 2010 Omnibus Incentive Plan (including amendments prior to the Plan) | ||
Name and Position | Options Granted (1) | Restricted Stock Units Granted (1) |
Ritch N. Wood(2) Chief Executive Officer | 1,071,096 | 106,480 |
Mark H. Lawrence Executive VP and Chief Financial Officer | 147,302 | 46,146 |
Ryan S. Napierski(2) President | 632,417 | 81,601 |
Joseph Y. Chang(2) Executive VP of Product Dev. and Chief Scientific Officer | 478,007 | 46,632 |
D. Matthew Dorny(2) Executive VP and General Counsel | 467,507 | 37,974 |
All current executive officers as a group (6 persons) | 2,846,329 | 333,833 |
All current non-executive directors as a group (6 persons) | 120,000 | 68,824 |
All current employees (other than executive officers) as a group (293 persons) | 4,603,223 | 1,603,098 |
7,569,552 | 2,005,755 |
Fiscal 2019 ($) | Fiscal 2018 ($) | ||||
Audit Fees(1) | 3,132,000 | 3,058,000 | |||
Audit-Related Fees(2) | 355,000 | 235,000 | |||
Tax Fees(3) | 1,398,000 | 2,032,000 | |||
All Other Fees(4) | 7,000 | 1,000 | |||
Total | 4,892,000 | 5,326,000 |
Fiscal 2020 ($) | Fiscal 2019 ($) | |
Audit Fees(1) | 3,070,000 | 3,132,000 |
Audit-Related Fees(2) | 23,000 | 355,000 |
Tax Fees(3) | 1,577,000 | 1,398,000 |
All Other Fees(4) | 3,000 | 7,000 |
Total | 4,673,000 | 4,892,000 |
(1) | Audit Fees consist of fees billed or expected to be billed for the audit of annual financial statements, review of quarterly financial statements and services normally provided in connection with statutory and regulatory filings or engagements. |
(2) | Audit-Related Fees for |
(3) | Tax Fees for 2020 consist of approximately $1,206,000 in fees for tax compliance work and $371,000 in fees for tax planning work. Tax Fees for 2019 consist of approximately $1,085,000 in fees for tax compliance work and $313,000 in fees for tax planning work. |
(4) | All Other Fees consist of access fees to |
− | The Audit Committee has reviewed and discussed the audited consolidated financial statements and accompanying management’s discussion and analysis of financial condition and results of operations with our management and PwC. This discussion included PwC’s judgments about the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. |
− | The Audit Committee has discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the Securities and Exchange Commission. |
− | PwC also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with PwC the accounting firm’s independence. The Audit Committee also considered whether non-audit services provided by PwC during the last fiscal year were compatible with maintaining the accounting firm’s independence. |
− | Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our Annual Report on Form 10‑K for the year ended December 31, |
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS | |
Edwina D. Woodbury, Chair | |
Daniel W. Campbell | |
Thomas R. Pisano |
− | Eric Lund, the brother of Steve Lund, received approximately |
− | Ryan Wood, the brother of Ritch Wood, received approximately |
− | Cade Napierski, the brother of Ryan Napierski, received approximately |
Directors, Executive Officers, 5% Stockholders | Number of Shares(1) | Percent of Class | Number of Shares(1) | Percent of Class | |
Ritch N. Wood(2) | 457,939 | * | 635,127 | 1.3% | |
Ryan S. Napierski | 324,436 | * | 301,087 | * | |
Joseph Y. Chang(3) | 317,399 | * | 300,334 | * | |
Steven J. Lund(4) | 250,854 | * | 246,328 | * | |
D. Matthew Dorny(5) | 197,670 | * | 189,612 | * | |
Daniel W. Campbell(6) | 92,190 | * | 115,822 | * | |
Andrew D. Lipman | 89,100 | * | 92,747 | * | |
Thomas R. Pisano(7) | 62,356 | * | |||
Mark H. Lawrence | 39,473 | * | 92,426 | * | |
Edwina D. Woodbury(8) | 13,406 | * | |||
Thomas R. Pisano(8) | 65,968 | * | |||
Zheqing (Simon) Shen | 13,375 | * | 16,987 | * | |
Edwina D. Woodbury(9) | 14,518 | * | |||
Laura Nathanson | 2,878 | * | 6,490 | * | |
All directors and executive officers as a group (12 persons) | 1,861,076 | 3.4% | 2,077,445 | 4.0% | |
BlackRock Inc.(9) | 6,686,605 | 12.6% | |||
The Vanguard Group(10) | 5,955,401 | 11.2% | |||
Wellington Management Group LLP(11) | 3,189,564 | 6.0% | |||
Emma S. Battle | — | * | |||
BlackRock Inc.(10) | 5,271,188 | 10.5% | |||
The Vanguard Group(11) | 4,828,238 | 9.6% | |||
Wellington Management Group LLP(12) | 3,174,336 | 6.3% | |||
Renaissance Technologies LLC(13) | 2,723,596 | 5.4% |
* | Less than 1% |
(1) | Includes shares that the above individuals have the right to acquire within 60 days as follows: Mr. Wood – |
(2) | Includes 2,000 shares that Mr. Wood jointly owns with family members. |
(3) | Includes |
(4) | Includes |
(5) | Includes |
(6) | Includes |
(7) | Includes |
(8) | Includes 47,356 shares that Mr. Pisano jointly owns with his spouse. |
In addition to the shares reported in the table above, Ms. Woodbury has elected to defer receipt of an additional |
Entity | Shared Voting Power | Shared Dispositive Power | Aggregate Amount Beneficially Owned | Shared Voting Power | Shared Dispositive Power | Aggregate Amount Beneficially Owned |
Wellington Management Group LLP | 2,922,442 | 3,189,564 | 2,949,765 | 3,174,336 | ||
Wellington Group Holdings LLP | 2,922,442 | 3,189,564 | 2,949,765 | 3,174,336 | ||
Wellington Investment Advisors Holdings LLP | 2,922,442 | 3,189,564 | 2,949,765 | 3,174,336 | ||
Wellington Management Company LLP | 2,825,686 | 2,965,493 | 2,883,774 | 3,037,912 |
(13) | Based on a Schedule 13G filed by Renaissance Technologies LLC and a related entity with the SEC on February 10, 2021 and disclosing ownership information as of November 12, 2020. According to the Schedule 13G, both Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation, as the majority owner of Renaissance Technologies LLC, have sole voting power for 2,720,796 shares and sole dispositive power for 2,723,596 shares. The address of both entities is 800 Third Avenue, New York, New York 10022. |