UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant    

Filed by a Party other than the Registrant    

Check the appropriate box:

 

  Preliminary Proxy Statement    Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement    
  Definitive Additional Materials    
  Soliciting Material Under Rule 14a-12    

PriceSmart, Inc.

 

(Name of Registrant as Specified In Its Charter)

 

  

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

    No fee required.

    Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1.    Title of each class of securities to which transaction applies:

 

 

2.    Aggregate number of securities to which transaction applies:

 

 

 

 3.

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

4.    Proposed maximum aggregate value of transaction:

 

 

5.    Total fee paid:

 

 

    Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1.    Amount Previously Paid:

 

 

2.    Form, Schedule or Registration Statement No.:

 

 

3.    Filing Party:

 

 

4.    Date Filed:

 

 


 

LOGO

2019 PROXY STATEMENTLOGO

 

 

PROXY STATEMENT F0R 2022

ANNUAL MEETING OF SHAREHOLDERSSTOCKHOLDERS

The Annual Meeting of Shareholders will be held at

PRICESMART, INC.

9740 Scranton Road

San Diego, California 92121

 

 


PRICESMART, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT

 

TO THE STOCKHOLDERS OF PRICESMART, INC.:

Notice is hereby given that the Annual Meeting (the “Annual Meeting”) of the Stockholders of PriceSmart, Inc. (the “Company”), will be held at 10:008:30 a.m. P.S.T. on Thursday, February 6, 2020 at3, 2022. As a result of the Company’s corporate headquarters, 9740 Scranton Road, San Diego, California, 92121public health and travel risks and concerns due to the COVID-19 pandemic, the Annual Meeting will be held via live audio webcast on the internet. You will be able to participate, vote and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/PSMT2022. You will not be able to attend the Annual Meeting physically. The Annual Meeting will be held for the following purposes:

 

1.

To elect directors for the ensuing year, to serve until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified. The Board of Directors of the Company has nominated and recommends for election as directors the following nineten persons:

 

Sherry S. Bahrambeygui

   Beatriz V. Infante Gary Malino  David PriceEdgar Zurcher

Jeffrey Fisher

   Leon C. Janks Robert E. Price

Gordon H. Hanson

   Mitchell G. LynnPatricia Márquez Edgar Zurcher  David R. Snyder

 

2.

To approve, on an advisory basis, the compensation of the Company’s executive officers for fiscal year 2019;2021;

 

3.

To ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 31, 2020;2022; and

 

4.

To transact such other business as may be properly brought before the Annual Meeting or any adjournment thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. The Board of Directors has fixed the close of business on December 9, 20196, 2021 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. A list of such stockholders shall be open to the examination of any stockholder at the Annual Meeting and for a period of ten days prior to the date of the Annual Meeting at the Company’s corporate headquarters, 9740 Scranton Road, San Diego, California 92121. During the Annual Meeting, any stockholder attending the Annual Meeting may access a list of the stockholders entitled to vote at the Annual Meeting at www.virtualshareholdermeeting.com/PSMT2022.

Accompanying this Notice is a Proxy. WHETHER OR NOT YOU EXPECT TO BE ATATTEND THE ANNUAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY, OR YOU MAY VOTE YOUR SHARES BY TELEPHONE OR OVER THE INTERNET, AS DESCRIBED IN THE ENCLOSED PROXY. If you plan to attend the Annual Meeting and wish to vote your shares personally, you may do so at any time before the Proxy is voted.

All stockholders are cordially invited to attend the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

 

LOGO

Francisco J. Velasco

Secretary

San Diego, California

December 20, 201917, 2021


Table of Contents

LOGO

Page

Proposal 1 Election of Directors

2

Information Regarding the Board of Directors

7

Audit Committee Report

9

Securities Ownership of Certain Beneficial Owners and Management

10

Executive Officers of the Company

12

Executive and Director Compensation

15

Equity Compensation Plan Information

39

Certain Transactions

40

Proposal 2 Approval of the Compensation of the Named Executive Officers

41

Proposal 3 Ratification of Selection of Independent Registered Public Accounting Firm

42

General

44


PRICESMART, INC.

9740 Scranton Road

San Diego, California 92121

PROXY STATEMENT

for

ANNUAL MEETING OF STOCKHOLDERS

February 6, 20203, 2022

The Board of Directors of PriceSmart, Inc., a Delaware corporation (the “Company”), is soliciting the enclosed Proxy for use at the Annual Meeting of Stockholders of the Company to be held on February 6, 20203, 2022 (the “Annual Meeting”), and at any adjournments thereof. The Annual Meeting will be a virtual meeting via live audio webcast on the internet. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/PSMT2022 and entering the 16-digit control number included in the Notice of Internet Availability or proxy card that you receive. For further information about the Annual Meeting, please see “Important Information about the Annual Meeting and Voting” beginning on page 3.

This Proxy Statement will be first sent to stockholders on or about December 20, 2019.17, 2021. You can submit your Proxy by mail or you may provide voting instructions for your shares by telephone or via the Internet.internet. Instructions for voting by telephone, by using the Internetinternet or by mail are described on the enclosed Proxy. If you plan to attend the virtual Annual Meeting and wish to vote your shares personally, you may do so. Unless contrary instructions are indicated on the Proxy, all shares represented by valid Proxies received pursuant to this solicitation (and not revoked before they are voted) will be voted for the election of the Board of Directors’ nominees for directors, or for a substitute or substitutes selected by the Board of Directors in the event a nominee or nominees are unable to serve or decline to do so; for the approval, on an advisory basis, of the compensation of the Company’s executive officers for fiscal year 2019;2021; and for the ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 31, 2020.2022. As to any other business whichthat may properly come before the Annual Meeting and be submitted to a vote of the stockholders, Proxies received by the Board of Directors will be voted in accordance with the best judgment of the holders thereof.

A Proxy may be revoked by written notice to the Secretary of the Company at any time prior to the Annual Meeting by executing a later Proxy or by attending the virtual Annual Meeting and voting in person.at the meeting.

The Company will bear the cost of solicitation of Proxies. In addition to the use of mails, Proxies may be solicited by personal interview, telephone, facsimile ore-mail, by officers, directors and other employees of the Company. The Company also will request persons, firms and corporations holding shares in their names, or in the names of their nominees, which are beneficially owned by others, to send, or cause to be sent, Proxyproxy material to, and obtain Proxies from, such beneficial owners and will reimburse such holders for their reasonable expenses in so doing.

The Company’s mailing address is 9740 Scranton Road, San Diego, California 92121.

Voting

Stockholders of record at the close of business on December 9, 20196, 2021 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournments thereof.

As of December 9, 2019, 30,612,5116, 2021, 30,862,489 shares of the Company’s common stock, $0.0001 par value per share (“Common Stock”), were outstanding, representing the only voting securities of the Company. Each share of Common Stock is entitled to one vote.

Votes cast by Proxy or in person at the Annual Meeting will be counted by the person appointed by the Company to act as Inspector of Election for the Annual Meeting. The Inspector of Election will treat shares represented by Proxies that reflect abstentions or include “brokernon-votes” as shares that are present and entitled to vote for purposes of determining the presence of a quorum.

Because directors are elected by a plurality of the votes of the shares present in person or represented by Proxy at the Annual Meeting and entitled to vote on the election of directors, the nineten director nominees who receive the greatest number of votes cast will be elected directors.

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement1


Thenon-binding advisory vote on executive compensation and the ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 31, 20202022 require the affirmative vote of a majority of the aggregate votes present, in person or by proxy, and entitled to vote at the Annual Meeting.

Abstentions and brokernon-votes (and are not includedshares represented by proxies reflecting broker non-votes) will have the same effect as votes cast and will not affect the outcome ofa negative vote for any proposal requiring a majority of the proposals.aggregate votes present, in person or by proxy, and entitled to vote at the Annual Meeting. Brokernon-votes occur when a person holding shares in street name, such as through a brokerage firm, does not provide instructions as to how to vote those shares and the broker does not then vote those shares on the stockholder’s behalf.

2PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Important Information about the Annual Meeting and Voting

LOGO

Why Is the Company Soliciting My Proxy?

The Board of Directors is soliciting your proxy to vote at the Annual Meeting to be held at 8:30 a.m. P.S.T. on Thursday, February 3, 2022. The Annual Meeting will be held via live audio webcast on the internet. You will be able to participate, vote and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/PSMT2022. You will not be able to attend the Annual Meeting physically. This Proxy Statement, along with the accompanying Notice of Annual Meeting of Stockholders, summarizes the purposes of the meeting and the information you need to know to vote at the Annual Meeting.

We have made available to you on the internet or have sent you this Proxy Statement, the Notice of Annual Meeting of Stockholders, the Proxy and a copy of our Annual Report on Form 10-K for the fiscal year ended August 31, 2021 because you owned shares of PriceSmart, Inc. Common Stock on the Record Date. This Proxy Statement will be first sent to stockholders on or about December 17, 2021.

Why are you holding a Virtual Annual Meeting?

Due to the continuing public health impact of COVID-19 and to support the health and well-being of our stockholders, the Annual Meeting will be held in a virtual meeting format only.

How Do I Vote?

Whether you plan to attend the Annual Meeting or not, we urge you to vote by proxy. If you vote by proxy, the individuals named on the Proxy, or your “proxies,” will vote your shares in the manner you indicate. For example, you may specify whether your shares: should be voted for or withheld for each nominee for director; should be voted for, against or abstained with respect to the approval, on an advisory basis, of compensation of the Company’s named executive officers; and should be voted for, against or abstained with respect to the ratification of the appointment of the Company’s independent registered public accountant, as disclosed in this Proxy Statement. Voting by proxy will not affect your right to attend the Annual Meeting. If your shares are registered directly in your name through our transfer agent, or you have stock certificates registered in your name, you may submit a proxy to vote:

By internet or by telephone. Follow the instructions attached to the Proxy to submit a proxy to vote by internet or telephone.

By mail. If you received one or more Proxies by mail, you can vote by mail by completing, signing, dating and returning the enclosed Proxy in the enclosed postage prepaid envelope. Your Proxy will be voted in accordance with your instructions. If you sign the Proxy but do not specify how you want your shares voted, they will be voted as recommended by our Board of Directors.

At the meeting. You may vote your shares electronically through the portal at the Annual Meeting (if you satisfy the admission requirements, as described below). Even if you plan to attend the Annual Meeting virtually, we encourage you to vote in advance by telephone, through the internet or by mail so that your vote will be counted in the event you later decide not to attend.

The Annual Meeting will be a virtual meeting of stockholders conducted via a live audio webcast that provides stockholders the same rights and opportunities to participate as they would have at an in-person meeting. We believe that a Annual Meeting will provide expanded stockholder access and participation and improved communications. You will be able to vote your shares electronically at the Annual Meeting. To attend and submit your questions during the Annual Meeting, please visit www.virtualshareholdermeeting.com/PSMT2022. To participate and vote during the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability or on your Proxy. Beneficial stockholders who do not have a control number may gain access to and vote at the meeting by logging in to their broker, brokerage firm, bank or other nominee’s website and selecting the stockholder communications mailbox to access the meeting; instructions should also be

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 13


Important Information About the Annual Meeting and Voting

(continued)

LOGO

provided on the voting instruction card provided by your broker, bank, or other nominee. If you encounter any difficulties accessing the Annual Meeting during check-in or the meeting, please call the technical support number that will be posted on the virtual stockholder meeting log-in page.

What happens if there are technical difficulties during the Annual Meeting?

We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting, voting at the Annual Meeting or submitting questions at the Annual Meeting. If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual stockholder meeting log-in page.

Is Voting Confidential?

We will keep all the Proxies, ballots and voting tabulations private. We only let our Inspector of Election and our Secretary examine these documents. Management will not know how you voted on a specific proposal unless it is necessary to meet legal requirements. We will, however, forward to management any written comments you make on the Proxy or otherwise provide.

Attending the Annual Meeting

This year, the Annual Meeting will be held in a virtual meeting format only. To attend the Annual Meeting, go to www.virtualshareholdermeeting.com/PSMT2022 shortly before the meeting time, and follow the instructions for downloading the webcast. You need not attend the Annual Meeting in order to vote.

4PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Proposal 1Election of Directors

 

LOGO

 

Based on the recommendation of the Nominating/Corporate Governance Committee, the Board of Directors of the Company has nominated and recommends for election as directors the nineten persons named herein to serve until the next Annual Meeting of Stockholders and until their respective successors shall have been duly elected and qualified. In accordance with the Company’s Second Amended and Restated Bylaws, the size of the Board will be reduced from eleven to nine members immediately prior to the Annual Meeting pursuant to a resolution adopted by the Board. Following the Annual Meeting, there will be no vacancies on the Board. All of the nominees are presently directors of the Company. Each of the nominees has consented to serving as a nominee and being named as a nominee in this Proxy Statement and to serving as a director if elected. Directors are elected by a plurality of the votes of the shares present in person or represented by Proxy at the Annual Meeting and entitled to vote on the election of directors. The enclosed Proxy will be voted in favor of the persons nominated unless otherwise indicated. If any of the nominees should be unable to serve or should decline to do so, the discretionary authority provided in the Proxy will be exercised by the proxy holders to vote the shares represented by the Proxies for one or more substitute nominees selected by the present Board of Directors. The Board of Directors does not believe at this time that any substitute nominee or nominees will be required.

Nominations Process

Identification and Evaluation of Nominees for Directors

The Nominating/Corporate Governance Committee identifies nominees for director by first evaluating the current members of our Board of Directors willing to continue in service. Current members with qualifications and skills that are consistent with the Nominating/Corporate Governance Committee’s criteria for board service, as set forth in the section below entitled “Director Qualifications,” and who are willing to continue in service are considered forre-nomination, balancing the value of continuity of service by existing members of our Board of Directors with that of obtaining a new perspective.

If any member of the Board of Directors does not wish to continue in service or if the Board of Directors decides not tore-nominate a member forre-election, the Nominating/Corporate Governance Committee identifies the desired skills and experience of a new nominee in light of the criteria set forth below in “Director Qualifications.” The Nominating/Corporate Governance Committee generally consults with other members of the Board of Directors and may seek input from management, independent counsel, industry experts or advisors that the Nominating/Corporate Governance Committee believes to be desirable and appropriate. The Nominating/Corporate Governance Committee reviews the qualifications, experience and background of any candidates who are identified. Final candidates are interviewed by the members of the Nominating/Corporate Governance Committee. In making its determinations, the Nominating/Corporate Governance Committee evaluates each individual in the context of the Board of Directors as a whole, with the objective of assembling a group that can best perpetuate the success of the Company and represent stockholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, the Nominating/Corporate Governance Committee makes its recommendation to the Board of Directors.

Pursuant to the Nominating/Corporate Governance Committee Charter, stockholders of the Company who have held shares of the Company’s Common Stock for at least one year and who hold a minimum of 1% of the Company’s outstanding shares of Common Stock may suggest a candidate for director by writing to the Secretary of the Company. In order to be considered, the recommendation for a candidate must include the following written information: (1) a detailed resume of the recommended candidate; (2) an explanation of the reasons why the stockholder believes the recommended candidate is qualified for service on the Board of Directors; (3) such other information that would be required by the rules of the SEC to be included in a proxy statement; (4) the written consent of the recommended candidate; (5) a description of any arrangements or undertakings between the stockholder and the recommended candidate regarding the nomination; and (6) proof of the recommending stockholder’s stock holdings in the Company. In addition, we may require any candidate to furnish such other information as may reasonably be required by the Company to determine the eligibility of such candidate to serve as an independent director in accordance with the Company’s corporate governance guidelines or that could be material to a reasonable stockholder’s

2PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Proposal 1  Election of Directors (continued)

LOGO

understanding of the independence or lack of independence of such candidate. In order to give the Nominating/Corporate Governance Committee sufficient time to evaluate a recommended candidate and/or include the candidate in the Company’s

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement5


Proposal 1   Election of Directors (continued)

LOGO

proxy statement for the annual meeting to be held in 2021,2023, the recommendation should be received by the Secretary of the Company at the Company’s principal executive offices no later than August 22, 2020.19, 2022. In the event that the Company receives director candidate recommendations from stockholders, those recommendations are evaluated in the same manner that potential nominees suggested by Board members, management or other parties are evaluated. The Company does not intend to treat stockholder recommendations in any manner different from other recommendations.

Director Qualifications

In evaluating director nominees, the Nominating/Corporate Governance Committee considers, among other things, the following factors:

 

  

personal and professional integrity, ethics and values;

 

  

experience in corporate management, such as serving as an officer or former officer of a publicly held company, and a general understanding of marketing, finance and other elements relevant to the success of a publicly traded company in today’s business environment;

 

  

experience in the Company’s industry and with relevant social policy concerns;

 

  

experience as a board member of another publicly held company;

 

  

academic or professional expertise in one or more aspects of the Company’s current or planned operations; and

 

  

practical and mature business judgment, including ability to make independent analytical inquiries.

While the Company does not have a specific policy regarding board diversity, in connection with its evaluation of director nominees, the Nominating/Corporate Governance Committee also considers diversity of expertise and experience in substantive matters pertaining to our business relative to other members of the Board of Directors. The Nominating/Corporate Governance Committee also considers diversity of background (including diversity of gender, race and ethnicity) and life experience. The Board of Directors and Nominating/Corporate Governance Committee are committed to actively seeking highly qualified women and individuals from minority groups to include in the pool from which new candidates are selected. The Nominating/Corporate Governance Committee’s objective is to assemble a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience.

The Board of Directors does not believe that directors should expect to be re-nominated annually. In determining whether to recommend a director for re-election, the Nominating/Corporate Governance Committee considers the director’s participation in and contributions to the activities of the Board of Directors, the results of the most recent Board evaluation, and meeting attendance.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the Nominating/Corporate Governance Committee may also consider such other facts as it may deem are in the best interests of the Company and its stockholders. The Nominating/Corporate Governance Committee also believes it is appropriate for at least one, and, preferably, several, members of the Board of Directors to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and that a majority of the members of the Board of Directors be independent as required under the Nasdaq Stock Market listing standards applicable to the Company. The Nominating/Corporate Governance Committee also believes it is appropriate for the Company’s chief executive officer to serve as a member of the Board of Directors. Directors’ performance and qualifications are reviewed annually by the Nominating/Corporate Governance Committee.

A copy of the Nominating/Corporate Governance Committee Charter is available on the Company’s website atwww.pricesmart.com.

6PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Proposal 1   Election of Directors (continued)

LOGO

Independent Directors

The Company’s Board of Directors has determined that the following nominees for director are “independent” under the Nasdaq Stock Market listing standards applicable to the Company: Jeffrey Fisher, Gordon Hanson, Beatriz Infante, Leon Janks, Mitchell Lynn, Gary Malino,Patricia Márquez, Robert Price, David R. Snyder and Edgar Zurcher.

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement3


Proposal 1  Election of Directors (continued)

LOGO

Information Regarding Nominees

The table below indicates the name, current position with the Company and age as of November 30, 20192021 of each nominee for director.

 

Name

Position

Age

Robert E. Price

Chairman

 

 

Position

79

Age

 

Robert E. Price

Sherry S. Bahrambeygui

 

Executive Chairman

77

Sherry S. Bahrambeygui

Chief Executive Officer and Director

 

57

Jeffrey Fisher

Director

 

 

63

55

 

Gordon H. Hanson

Leon C. Janks

Director

 

 

Lead Director57

 

Beatriz V. Infante

Director

 

 

67

70

 

Leon C. Janks

Jeffrey Fisher

Director

 

 

72

Patricia Márquez

Director

 

 

56

61

 

David R. Snyder

Gordon H. Hanson

Director

 

 

72

Edgar Zurcher

Director

 

 

70

55

 

David Price

Beatriz V. Infante

Director Nominee

 

 

Director

32

65

Mitchell G. Lynn

Director

71

Gary Malino

Director

62

Edgar Zurcher

Director

68

 

Robert E. Price has been Executive Chairman of the Board of Directors of the Company since October 2018. At the 2020 Annual Meeting, he will cease to serve as Executive Chairman but, ifre-elected to the Board, will continue to serve as Chairman, the position he has held since the Company’sits spin-off from Price Enterprises, Inc. in 1997. He served as Executive Chairman from October 2018 to February 2020. Mr. Price also served as Chief Executive Officer and President of the Company at various times during the Company’s history, most recently as Chief Executive Officer from April 2006 until July 2010. Mr. Price was a founder of The Price Company, which operated the Price Club, and served as its Chief Executive Officer and a member of its board of directors from the time of The Price Company’s founding in 1976 until The Price Company’s merger with Costco Wholesale Corp. in 1993. Mr. Price was Chairman of the Board of Price/Costco, Inc. from October 1993 until December 1994 and Chairman of Price Enterprises from July 1994 until September 1997. Mr. Price currently serves as a Manager of The Price Group, LLC and as President of Price Philanthropies Foundation and Price Charities. Price Philanthropies is a private family foundation that supports charitable activities in the Company’s markets and San Diego, California. Mr. Price is also President of the Aaron Price Fellows Foundation, the sponsor of the Aaron Price Fellows Program. Mr. Price’s 40 year44 years of experience in the warehouse club merchandising business as well as his extensive knowledge of the Company’s business, history and culture, support the Board of Directors’ conclusion that he should serve as a director of the Company.

Sherry S. Bahrambeygui has served as Chief Executive Officer since January 2019 after servingand previously served as interim Chief Executive Officer from November 2018 to January 2019. She alsoMs. Bahrambeygui has been a director of the Company since November 2011. She2011 and served as Vice ChairChairman of the Board from October 2016 to October 2017. Ms. Bahrambeygui previouslyPrior to becoming Chief Executive Officer, she served as Senior Executivethe President and Managing Member of Thethe Price Group, LLC, an investment management firm from September 20062007 to January 2019. Additionally,2018. Before joining the Price Group, Ms. Bahrambeygui servedhad a 15-year legal career as Executive Vice President, Secretarya litigator specializing in the health care, life sciences, consumer & retail, and Vice Chairman of the Boards of Price Charities, Price Philanthropies Foundation and the Aaron Price Fellows Foundation, and as the Chief Executive Officer of PS Ivanhoe, LLC, a commercial real estate investment company. Ms. Bahrambeyguiindustries. She was a licensed stockbroker and a partner in multiple law firms, including athe founding partner of the law firm of Hosey & Bahrambeygui, LLP. She practiced law with an emphasis on complexLLP, a leading boutique civil litigation practice, from 1999 to 2007. In addition to her board service at the Company, Ms. Bahrambeygui has significant experience in corporate governance as a board member, trustee and attorney for numerous public, private and non-profit companies and boards. Ms. Bahrambeygui’s extensive international business, governance and

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement7


Proposal 1   Election of Directors (continued)

LOGO

leadership experience, strategic decision-making, and corporate matters and also in the areas of employment and compensation. Ms. Bahrambeygui’s service as Chief Executive Officer, her thorough understanding of the business and operations ofability to lead the Company as well as having effectively assisted the Company on complex business matters,through digital transformation and e-commerce expansion contribute to the Board of Directors’ conclusion that she should serve as a director of the Company.

Leon C. Janks has served as a director of the Company since July 1997. He served as Vice Chair of the Board from October 2017 to October 2018 and as Lead Director since October 2018. At the 2020 Annual Meeting, he will cease to serve as Lead Director but, ifre-elected to the Board, will continue to serve as a director. Mr. Janks served as a director of Price Enterprises from March 1995 until July 1997. He has been a partner in the accounting firm of Green, Hasson & Janks LLP in Los Angeles,

4PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Proposal 1  Election of Directors (continued)

LOGO

California since 1980 and serves as its Managing Partner Emeritus. Mr. Janks has extensive experience in domestic and international business, serving a wide variety of clients in diverse businesses. Mr. Janks is a certified public accountant. Mr. Janks’ experience, his significant accounting, financial and tax expertise which qualify him as an audit committee financial expert and his many years of service to the Company as a member of the Board of Directors contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Jeffrey Fisherhas been a director of the Company since November 2019. Since 2011, Mr. Fisher has served as the Chief Financial Officer of The Price Group, LLC, a private investment and management company, and Price Philanthropies Foundation, a privatenon-profit organization. He also has been a director of Price Philanthropies Foundation since May 2019. Since 2004, Mr. Fisher has also served as the Chief Financial Officer of PS Ivanhoe, LLC, a real estate holding company. He is also Chief Financial Officer of Aaron Price Fellows Foundation, La Jolla Fay, LLC, IvanFay, LLC, and RARSD, LLC. From January 2004 through December 2004, Mr. Fisher served as Chief Financial Officer of Price Legacy Corporation, a publicly traded Real Estate Investment Trust with approximately $1.2 billion in real estate assets. From October 2000 until joining Price Legacy, Mr. Fisher served as Chief Financial Officer of National Retail Partners, LLC, a private real estate company which owned and operated approximately $2.0 billion in real estate assets. From August 1993 to September 2000, Mr. Fisher served in various financial capacities of Burnham Pacific Properties, Inc., a publicly traded Real Estate Investment Trust. Prior to joining Burnham Pacific Properties, Mr. Fisher was a senior manager at Deloitte & Touche LLP, having started with them in 1983. Mr. Fisher is a certified public accountant. Mr. Fisher brings over 3638 years of finance, accounting and investment experience, with an emphasis on real estate finance, and specific experience with public companies. Mr. Fisher’s extensive experience with finance and real estate matters, his experience as an executive of publicly traded companies and his accounting background contributed to the Board of Directors’ conclusion that he should serve as a director of the Company.

Gordon H. Hanson has been a director of the Company since April 2014. Mr. Hanson will becomehas been a tenured member of the faculty at the Harvard Kennedy School of Harvard University insince January 2020. From 2001 through 2019, he was a tenured member of the economics faculty at the University of California, San Diego. From 1998 to 2001, he was a tenured member of management faculty at the University of Michigan, and from 1992 to 1998, he was on the economics faculty of the University of Texas. From 2009 until 2014, he served as a director of the Washington Office on Latin America, anon-profit organization working to promote civic advancement in the region, chairing their development committee. Mr. Hanson’s extensive background in the analysis of the economies of Latin America, including over 25 years of experience in consulting for international financial organizations, contribute to the Board of Directors’ conclusion that he should serve as director of the Company.

Beatriz V. Infantehas been a director of the Company since January 2018. Since 2009, Ms. Infante has served as Chief Executive Officer of BusinessExcelleration LLC, a business consultancy specializing in corporate transformation and renewal, and since 2008 has been a limited partner in Tandem Capital, a Silicon Valley venture capital firm.renewal. From 2010 until its acquisition by Infor in 2011, Ms. Infante was the Chief Executive Officer and a director of ENXSUITE Corporation, from 2006 until its acquisition by Voxeo Corporation in 2008 she was the Chief Executive Officer and a director of VoiceObjects Inc., and from April 2000 until October 2003 she was Chief Executive Officer and President of Aspect Communications Corporation and was additionally named Chairman in February 2001. Since May 2014, she has served on the board of directors and as a member of the audit committee of Liquidity Services Inc., an online marketplace for retail goods and capital assets, and has additionally servedcurrently serves as chair of the compensation committee since November 2015.and member of the audit committee. Since October 2017, she has served as director and member of the compensation and audit committees of Ribbon Communications, a cloud communications company formed from the merger of Sonus Networks and Genband.Genband, and more recently the acquisition of ECI, and is currently chair of the compensation committee and member of its audit and technology committees. From January 2010 until October 2017, she served as director and member of the compensation committee of Sonus Networks, and additionally became chair of the compensation committee in June 2017. Ms. Infante also served on the board of directors and as a member of the Nominatingnominating and Corporate Governancecorporate governance committee of Ultratech, Inc. from July 2016 until its acquisition by Veeco in May 2017. From May 2012 until its acquisition by Broadcom in May 2015, she served on the board of directors and as a member of the compensation committee of Emulex Corporation, and additionally became chair of the Nominatingits nominating and Corporate Governance Committeecorporate governance committee in February 2014. From 1994 to 2019, she served on

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement5


Proposal 1  Election of Directors (continued)

LOGO

the Advisory Committee to the Princeton University School of Engineering and Applied Science. Ms. Infante has also served as a director of a number of privately held companies, and currently serves on the board of directors or advisory boards of private companies in the areas of cloud infrastructure, cybersecurity, intelligent automation and bank fraud detection. Additionally, Ms. Infante is a National Association of Corporate Directors Board Leadership Fellow, and in 2016 was named to the 2016 “NACD Directorship 100,” which honors the most influential boardroom leaders each year. Ms. Infante holds a bachelor of science and engineering degree

8PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Proposal 1   Election of Directors (continued)

LOGO

in electrical engineering and computer science from Princeton University and holds a master of science degree in engineering science from California Institute of Technology. Ms. Infante’s executive leadership experience, including from her service as a chief executive officer of various companies, along with extensive operational expertise and experience in digital transformation, engineering, sales and marketing, contribute to the Board of Directors’ conclusion that she should serve as a director of the Company.

Mitchell G. LynnLeon C. Janks has beenserved as a director of the Company since November 2011 and will becomeJuly 1997. He served as Vice Chair of the Board at the 2020 Annual Meeting if he isre-electedfrom October 2017 to the Board. Mr. Lynn served in several senior executive positionsOctober 2018 and as the President andLead Director from October 2018 to February 2020. Mr. Janks served as a director of The Price Company prior to its merger in 1993 with Costco, Inc., andEnterprises from 1993March 1995 until 1994, he served as an executive officer, director and member of the Executive Committee of Price/Costco. Mr. Lynn also wasJuly 1997. He has been a member of The Price Group, LLC from 2005 to 2008. Mr. Lynn is a founding and continuing director of Bodega Latina Corporation, dba El Super and Fiesta Mart, a 120+ store warehouse-style grocery retailer that targets the Hispanic marketpartner in the southwestern United States.accounting firm of Green, Hasson & Janks LLP in Los Angeles, California since 1980 and serves as its Managing Partner Emeritus. Mr. Lynn is a founding and continuing director of Origin International Inc., which is focused on recycling, redistributing and servicing waste oils. Mr. Lynn is also the founder and a partner of CRI 2000, LP, dba Combined Resources International, and Lightspeed Outdoors, LP, dba Lightspeed, which designs, develops and manufactures consumer products under various brand names forJanks has extensive experience in domestic and international wholesale distribution, primarily through warehouse clubs and online platforms.business, serving a wide variety of clients in diverse businesses. Mr. Lynn also is a founder and a partner of ECR4Kids LP dba ECR4Kids, which designs, manufactures, imports and sells educational/classroom products to wholesale dealers and online platforms. Mr. LynnJanks is a certified public accountant (inactive)accountant. Mr. Janks’ experience, his significant accounting, financial and a licensed real estate broker in California. Mr. Lynn’s extensive prior experience in both the warehouse club business and general retailingtax expertise which qualify him as an audit committee financial expert and his significant knowledge relatingmany years of service to financial mattersthe Company as a member of the Board of Directors contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Gary MalinoPatricia Márquez has beenserved as a director of the Company since April 2016. Mr. Malino is a former senior executiveFebruary 2021. Since 2014, Dr. Márquez has served as Dean of Realty Income Corporation, a real estate investment trust (REIT) listedthe Joan B. Kroc School of Peace Studies at the University of San Diego (“USD”), and in July 2020 she started her dual role as Associate Provost for Academic Planning and Innovation and Dean of the Joan B. Kroc School of Peace Studies. Dr. Márquez joined the USD School of Business in 2007 teaching courses in “Business and Society,” “Global Social Entrepreneurship,” and “Business and Social Innovation.” Her research has focused on the New York Stock Exchange. Mr. Malino joined Realty Income Corporation in 1985intersection of business and was the Chief Financial Officer from 1994 until 2001 when he was promoted to President and Chief Operating Officer, the position he held until his retirement in 2014.social value creation, with an emphasis on poverty alleviation through market mechanisms. Prior to joining Realty Income, Mr. MalinoUSD, Dr. Márquez was a managerprofessor and dean at IESA, a School of Business in Caracas, Venezuela from 2003 to 2005. Dr. Márquez has a bachelor of arts from Bowdoin College, and received her master of arts and doctor of philosophy in socio-cultural anthropology from the University of California, Berkeley. Dr. Márquez’s executive leadership, research and academic experience and recognized expertise in environmental and social responsibility matters contribute to the Board of Directors’ conclusion that she should serve as a director of the Company.

David R. Snyder has served as a director of the Company since February 2021. Mr. Snyder has served as a senior counsel at Pillsbury Winthrop Shaw Pittman LLP since 2018 and previously served as a partner from 1993 until 2017 in the firm’s Corporate and Securities practice. During 25 years as a partner, Mr. Snyder also served as Pillsbury’s executive vice-chair for two years and on the firm’s managing board for 15 years. Mr. Snyder has been a Los Angeles-basedpracticing attorney for over 30 years, focusing on corporate finance and has significant experience representing public accounting firm (1981-1985) and assistant controller with McMillin Development Company,companies. Mr. Snyder presently serves on the board of directors of Orphagen Pharmaceuticals, Inc. He also serves as an advisory board member to Atticus, Inc. Mr. Snyder holds a real estate development company (1979-1981). Mr. Malino is a certified public accountant (inactive)law degree from Cornell University and a licensed real estate brokerbachelor of arts from Michigan State University. Mr. Snyder’s background in California. Mr. Malino’s extensive experience as a prior executive of a publicly traded company, his accounting backgroundlegal matters and his extensivesignificant experience with finance and real estate matters contributedpublic companies contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Edgar Zurcherhas been a director of the Company since October 2009 and also served as a director of the Company from November 2000 to February 2008. Mr. Zurcher has been a partner in the law firm Zurcher, Odio & Raven in Costa Rica since 1980, which the Company uses as counsel for certain legal matters. Mr. Zurcher is also President of PLP, S.A., as well as a director of Payless ShoeSource Holdings, Ltd. (“Payless Shoes”). PLP, S.A. owns 40% of Payless Shoes. Additionally, Mr. Zurcher is a director of Molinos de Costa Rica Pasta and Roma S.A. dba Roma Prince S.A. and is a director of Promerica Financial Corporation, S.A. Mr. Zurcher’s background in legal matters and his significant experience in Central America business and legal affairs contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

David Price has served as PriceSmart’s Vice President – Omnichannel Initiatives & Social and Environmental Responsibility since September 2020 and co-manages the Company’s Environmental and Social Responsibility strategy. Prior to his current role, Mr. Price was employed by the Company in various positions related to the development of the Company’s digital strategy

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement9


Proposal 1   Election of Directors (continued)

LOGO

and initiatives since July 2017, most recently as Director of Ecommerce from August 2018 until August 2020. Before joining PriceSmart, Mr. Price was a graduate student at the University of California San Diego School of Global Policy and Strategy and a member of the faculty and field instructor for the National Outdoor Leadership School leading extended wilderness expeditions in Alaska and Baja California, Mexico. In addition to his role at PriceSmart, Mr. Price is Chairman of the Board of the Wildcoast Foundation, a binational nonprofit that works on coastal conservation efforts and natural solutions to climate change in Mexico and in California. Mr. Price also serves on the board of the Aaron Price Fellows Foundation and serves on the Director’s and Advisory Councils of the Scripps Institution of Oceanography and Outdoor Outreach. Mr. Price received his Master’s in International Affairs from the University of California San Diego School of Global Policy and Strategy and his Bachelor of Science in Public Policy and Management from the University of Southern California. The Board of Directors recognizes the importance of maintaining a strong connection to the legacy of our founders Sol Price and Robert Price as the company evolves, and the Board appreciates how meaningful that legacy is to our in-country employees. Mr. Price also has been a leader in our ecommerce transformation and our environmental and social responsibility initiatives, and the Board believes including him on the Board of Directors will demonstrate to our stakeholders the significance of these matters to the Board of Directors and our company. For these reasons, the Board has concluded that Mr. Price should serve as a director of the Company.

Recommendation of the Board of Directors

The Board of Directors recommends that stockholders vote FOR the slate of nominees set forth above. Proxies solicited by the Board of Directors will be so voted unless stockholders specify otherwise on the accompanying Proxy.

 

610 PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement


Information Regarding the Board of Directors

 

LOGO

 

Board Meetings

The Company’s Board of Directors held foureight meetings during fiscal year 2019.2021. No nominee for director who served as a director during the past year attended fewer than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings of committees of the Board of Directors on which he or she served.

Board Leadership Structure

The positions of Chairman of the Board of Directors and Chief Executive Officer are separate. Mr. Robert Price serves as Executive Chairman of the Board of Directors and Ms. Bahrambeygui serves as Chief Executive Officer. At the 2020 Annual Meeting, Mr. Price will cease to serve as Executive Chairman but, ifre-elected to the Board, will continue to serve as Chairman. The Board of Directors believes that the current leadership of the Board of Directors by the Company’s Chairman enhances the effectiveness of its oversight of management and provides a perspective that is separate and distinct from that of management.

Role of the Board of Directors in Risk Oversight

The Board of Directors oversees the Company’s risk management processes, either as a whole or through its committees. Committees of the Board of Directors review with management and the Company’s internal audit department the Company’s major risk exposures, their potential impact on the Company’s business and the steps the Company takes to manage such risk exposures. The Board of Directors’ risk oversight process includes receiving reports from committees of the Board of Directors and members of senior management.

Committees of the Board

Audit Committee. The Audit Committee, which currently consists of Mr. Janks, Ms. Infante and Mr. MalinoSnyder, held seven meetings during fiscal year 2019.2021. The Audit Committee oversees the Company’s accounting and financial reporting processes and the audits of its consolidated financial statements. The Committee reviews the annual audits conducted by the Company’s independent public accountants, reviews and evaluates internal accounting controls, is responsible for the selection of the Company’s independent public accountants, and conducts such reviews and examinations as it deems necessary with respect to the practices and policies of, and the relationship between, the Company and its independent public accountants. All committee members satisfy the Nasdaq Stock Market’s standards for “independence,” including applicable audit committee independence requirements, and the Board of Directors has determined that Mr. Janks qualifies as an “audit committee financial expert” within the meaning of the applicable SEC rules and regulations. The Audit Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

Compensation and Human Capital Committee. The Compensation and Human Capital Committee, which currently consists of Ms. Infante, Mr. Fisher, Mr. Janks and Mr. Malino,Snyder held nineten meetings during fiscal year 2019.2021. Each of the current members of the Compensation Committee satisfies the Nasdaq Stock Market’s standards for “independence,” including applicable compensation committee independence requirements. The Compensation Committee oversees the compensation philosophy for the Company and reviews and approves the compensation program for the Company’s executive officers. The Committee is authorized to evaluate and determine the compensation of the Company’s Chief Executive Officer and reviews and approves compensation for all other executive officers. The Committee also administers, interprets and makes grants under the Company’s equity incentive award plans. The Compensation Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee, which currently consists of Mr. Janks, Mr. Hanson and Mr.Mitchell G. Lynn, a current director not up for re-election at the Annual Meeting, held two meetings during fiscal year 2019.2021. The Nominating/Corporate Governance Committee considers the slate of nominees to be presented for reelection at annual meetings of stockholders. The Nominating/Corporate Governance Committee also may evaluate and recommend candidates to add expertise and fill vacancies on the

Board of Directors, which vacancies may be created by the

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 711


Information Regarding the Board of Directors (continued)

 

LOGO

 

Board of Directors, which vacancies may be created by the departure of any directors or the expansion of the number of members of the Board of Directors. The Nominating/Corporate Governance Committee approved the nomination of the candidates reflected in Proposal 1. The Nominating/Corporate Governance Committee also assists the Board of Directors as needed in establishing corporate governance guidelines and other policies and procedures pertaining to corporate governance matters. The Nominating/Corporate Governance Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

Executive Committee. The Executive Committee, which currently consists of Mr. Robert Price, Ms. Bahrambeygui, Mr. Janks and Ms. Bahrambeygui,Mr. Lynn, a current director not up for re-election at the Annual Meeting, held one meetingtwo meetings during fiscal year 2019.2021. The Executive Committee has all powers and rights necessary to exercise the full authority of the Board of Directors in the management of the business and affairs of the Company, except as provided in the Delaware General Corporation Law or the Bylaws of the Company.

Finance Committee. The Finance Committee, which currently consists of Mr. Janks, Ms. Bahrambeygui, Mr. Fisher Mr. Hanson, Mr. Malino and Mr. Price,Lynn, a current director not up for re-election at the Annual Meeting, held fournine meetings during fiscal year 2019.2021. The Finance Committee reviews and makes recommendations with respect to (1) annual budgets, (2) investments, (3) financing arrangements and (4) the creation, incurrence, assumption or guaranty by the Company of any indebtedness, obligation or liability, except, in each case, for any such transactions entered into in the ordinary course of business of the Company.

Real Estate Committee.The Real Estate Committee, which currently consists of Mr. Robert Price, Ms. Bahrambeygui, Mr. Fisher, Mr. Lynn, a current director not up for re-election at the Annual Meeting, and Mr. Zurcher, held sixeight meetings during fiscal year 2019.2021. The Real Estate Committee reviews and approves the material terms of real estate-related transactions entered into by the Company, consistent with the applicable annual budget of the Company previously approved by the Board of Directors.

Digital Transformation Committee. The Digital Transformation Committee, which currently consists of Ms. Infante, Mr. Price, Ms. Bahrambeygui, Mr. Hanson and Mr. Janks, and Gonzalo Barrutieta, a current director not up forre-election at the 2020 Annual Meeting, held fivefour meetings during fiscal year 2019.2021. The Digital Transformation Committee is charged with oversight of the Company’s omni-channel development and digital transformation to enhance membership and stockholder value.

Environmental and Social Responsibility Committee. The Environmental and Social Responsibility Committee, which currently consists of Dr. Márquez, Mr. Fisher, Mr. Hanson, Mr. Robert Price and Mr. Zurcher, held three meetings during fiscal year 2021. The Environmental and Social Responsibility Committee assists the Board in discharging its oversight responsibility related to environmental and social responsibility (“ESR”) matters, such as climate change impacts, energy and natural resources conservation, environmental and supply chain sustainability, human rights, employee health, safety and well-being, diversity and inclusion, public policy engagement, political contributions, corporate charitable and philanthropic activities and other ESR issues that are relevant and material to the Company and provides guidance to the Board and other Board committees on these matters.

Policy Governing Stockholder Communications with the Board of Directors

The Board of Directors welcomes communications from stockholders of the Company. Any stockholder who wishes to communicate with the Board of Directors or one or more members of the Board of Directors should do so in writing in care of the General Counsel of the Company, at the principal office of the Company, 9740 Scranton Road, San Diego, California 92121. The General Counsel is directed to forward each communication to the director or directors of the Company for whom it is intended.

12PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Information Regarding the Board of Directors (continued)

LOGO

Policy Governing Director Attendance at Annual Meetings of Stockholders

The Company encourages, but does not require, the members of its Board of Directors to attend the annual meeting of stockholders.Annual Meeting. All tenseven members then-serving on the Board of Directors and nominated for re-election attended the Annual Meeting of Stockholders held on January 30, 2019.February 4, 2021.

Environmental and Social Responsibility Highlights

At PriceSmart, doing business the right way is at the core of everything we do. Our values require us to conduct our business with integrity, respect and passion. Our sense of accountability and our drive for continuous improvement defines us as a company that offers a good return to investors while conducting business responsibly, satisfying the needs of our members and supporting the communities we serve.

For us, doing business the right way means offering our members a valuable experience with quality merchandise and services at affordable prices, providing our employees with good working conditions, maintaining high standards of safety and cleanliness at our clubs, treating our suppliers as partners, conducting ourselves in a socially responsible manner, respecting the environment, and complying with local laws in all of the countries in which we operate. Our commitment to our local communities includes acting as a leader with respect to important issues such as diversity, equity and inclusion, human rights, environmental sustainability, and our employees’ well-being.

In 2021, PriceSmart marked its 25th anniversary. Twenty-five years in, we remain committed to supporting the communities in the countries in which we operate through our regular course of business as well as through our external partnerships, including our partnership with Price Philanthropies Foundation’s Aprender y Crecer program, a program that receives significant funding through PriceSmart member donations at the point of sale in support of public education in the Company’s Spanish speaking markets. In addition, during fiscal year 2021, we donated food baskets and supplies to vulnerable populations impacted by the COVID-19 pandemic and natural disasters in the regions where we operate.

Governance

Environmental and Social Respoinsibility (ESR) Leadership. As a way of solidifying our commitment to corporate responsibility, we have formalized an ESR department. This team is responsible for guiding, measuring and communicating this fundamental aspect of PriceSmart’s corporate culture and strategy into all aspects of our business. Furthermore, our Board of Directors now includes an Environmental and Social Responsibility Committee.

Anti-Bribery and Corruption. In the operation of our business, we aim to perform at the highest standards of ethical behavior and business conduct and to be part of an honest and productive economic system. We have established and implemented anti-bribery and corruption practices that seek to minimize, or eliminate, any act of corruption while conducting business on behalf of the Company.

Sustainability

Farmer’s Selection. We launched our Farmer’s Selection program in Panama in 2018 to eliminate intermediaries in sourcing of fresh produce. Under the program, we buy fresh fruits and produce directly from farmers who make deliveries to our produce distribution centers. From there, we supply products to our warehouse clubs. We believe this model reduces prices, improves the lives of local, small and medium-sized farmers and allows us to obtain better, fresher and safer products for our Members. The program has been so successful that in just a few years, we expanded from Panama to Colombia, Costa Rica and the Dominican Republic, and we have plans for near term expansion to Guatemala and Trinidad.

Local Purchasing and Merchandising. Approximately 50% of our sales come from merchandise sourced in or near the local markets where we have warehouse clubs. Procurement of local merchandise not only provides for a greater selection of high quality goods at favorable prices, it also offers us a means of investing in, and contributing to, our local communities and economies.

 

8PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement13


Information Regarding the Board of Directors (continued)

LOGO

Sustainable Fisheries. In 2019 PriceSmart and Price Philanthropies Foundation partnered with the Center for Marine Biodiversity and Conservation at the world renowned Scripps Institution of Oceanography at the University of California, San Diego to undertake an assessment of seafood sourcing for our Costa Rica warehouse clubs. In 2021, PriceSmart and Price Philanthropies renewed and expanded this partnership. The expansion aims at assessing the remainder of the Company’s seafood supply chain and identify ways for science and industry to work together towards sustainability and conservation goals.

Environmental Impact

Facilities. We design and construct our buildings in compliance with both local and international regulations and with an aim to be at the forefront of sustainability. We seek to mitigate our environmental impact and build efficient facilities. For example, we have installed solar arrays in 44 of our warehouse clubs, we employ LED lighting throughout all of our buildings, and we use waste heat from our refrigeration systems to produce all of our hot water needs and dehumidification of our facilities.

Water Consumption and Discharge. We carefully manage both our consumption of water and the discharge of wastewater. We have installed low flow plumbing fixtures, sensor activated automatic faucets and variable speed domestic water pumping stations to optimize the amount of water that is required at any one time. We manage our wastewater with regulated and environmentally approved wastewater treatment plants in those clubs that do not have access to public treatment works. Thirty-nine clubs have wastewater treatment plants installed.

Product Quality and Supply Chain Transparency

Food Safety. We are committed to developing and selling safe foods that meet the highest international quality standards for our members. We have implemented programs based on an international recognized standard called SQF (Safe Quality Food) Retail Standard 8.1.

Supply Chain. To better assure the quality of what PriceSmart offers, we undertake regular visits and reviews of our manufacturers, producers and packagers to verify that they apply Best Manufacturing Practices and observe social responsibility rules in their facilities. We encourage all our suppliers to adopt ethical and sustainable practices.

Human Capital

As of August 31, 2021, we had approximately 10,400 employees. Approximately 94% of our employees were employed outside of the United States, and about 1,600 employees were represented by labor unions.

Diversity, Equity and Inclusion

Fundamental to our mission is the ability to attract, retain, and develop a diverse workforce representative of the countries in which we operate. We are proud to hire from the local communities where we operate, which then enhances our understanding of the legislation and operating environment of each country so we can better serve our Members. We provide our employees with competitive wages above minimum wage in each region, as well as comprehensive benefit programs, which generally include life and health insurance and post-employment savings plans. We also seek to identify opportunities to support local businesses and communities, with the goal of improving the quality of life in the countries where we operate.

Talent Development

We believe our investment in the education, training and development of our employees contributes to the overall success of our business. We believe a focus on talent development leads to long-serving, loyal employees, which improves efficiencies in operations, thus resulting in higher quality service to our Members. We provide learning opportunities for our employees through

14 PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement


Audit Committee ReportInformation Regarding the Board of Directors (continued)

 

LOGO

 

various training courses including instructor-led internal and external programs. We also seek to promote from within, allowing us to develop the leadership strengths of our employees to provide a better overall customer experience for our Members.

Health and Safety

The COVID-19 pandemic has brought unprecedented challenges to our business, communities, Members and employees. We prioritize the safety and well-being of our employees and Members by following applicable local and national government regulations, as well as referencing for our purposes international guidelines, at each of our warehouse clubs, offices, and distribution center locations. We implemented enhanced cleaning and sanitizing protocols and provided personal protective equipment to our employees. We engage in responsible procedures, such as contact tracing, preventative quarantining and continued paid leave. We educate our employees on safety, reinforce best practices of good hygiene, and encourage our employees to receive vaccinations as they become available and in cases where possible, we have directly purchased and provided vaccines to our employees at no cost. We have built reserve teams of employees who do not overlap with each other so that they may step in as needed allowing those who are sick to take time off. We also provide employee transportation and meals in order to offer them a safe and reliable means to work. Many of our corporate offices are open in a limited capacity, and the majority of our corporate employees have shifted, temporarily, to working remotely. We offer resources for employees working remotely, which are targeted at optimizing remote work environments and managing COVID-19 related challenges. The resources we offer include office ergonomics consulting and support for mental and emotional health and well-being.

Audit Committee Report

The Audit Committee oversees the Company’s financial accounting and reporting process and the audits of the financial statements of the Company. All committee members satisfy the definition of independent director set forth in Rule 5605(a)(2) and Rule 5605(c)(2) of the Nasdaq Stock Market’s listing standards. The Audit Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

In fulfilling its oversight responsibilities, the committee reviewed and discussed with management the audited financial statements in the Company’s Annual Report on Form10-K for the year ended August 31, 2019,2021, including a discussion of the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The Company’s independent registered public accounting firm, Ernst & Young LLP (“EY”), is responsible for expressing an opinion on the conformity of its audited financial statements with generally accepted accounting principles. EY met with the committee and expressed its judgment as to the quality, not just the acceptability, of the Company’s accounting principles and discussed with the committee other matters as required under generally accepted auditing standards, including those matters required to be discussed by Public Company Accounting Oversight Board Statement on Auditing Standards No. 16Communications with Audit Committees. In addition, EY discussed the accountants’ independence from the Company and from the Company’s management and delivered to the committee those matters to be set forth in written disclosures as required by applicable requirements of the Public Company Accounting Oversight Board regarding independent registered public accounting firm’s communications with the Audit Committee concerning independence.

The committee discussed with the Company’s independent registered public accounting firm the overall scope and plan of their audit. The committee meets with the independent registered public accounting firm, with and without our management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form10-K for the year ended August 31, 20192021 for filing with the SEC.

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement15


Information Regarding the Board of Directors (continued)

LOGO

This report of the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.

Leon C. Janks

Beatriz V. Infante

Gary Malino

David R. Snyder

 

16PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement9


Securities Ownership of Certain Beneficial Owners and Management

 

LOGO

 

The following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock as of November 30, 20192021 by (1) each of its directors and nominees for director, (2) each of its Named Executive Officers, (3) each person or group known by it to own beneficially more than 5% of the Common Stock and (4) all directors and executive officers as a group.

 

Name and Address(1)

 

  

 

 

 

 

Number of Shares of
Common Stock
Beneficially Owned
(2)

 

 

 
 
 

 

  

 

 

 

 

Percentage of Shares
of Common Stock
Beneficially Owned

 

 

 
 
 

 

 

Robert E. Price(3)(4)

 

  

 

 

 

 

7,386,740

 

 

 

 

  

 

 

 

 

24.1%

 

 

 

 

 

Sherry S. Bahrambeygui(5)

 

  

 

 

 

 

256,897

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Gonzalo Barrutieta

 

  

 

 

 

 

11,016

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Jeffrey Fisher(6)

 

  

 

 

 

 

47,000

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Gordon H. Hanson

 

  

 

 

 

 

72

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Beatriz V. Infante

 

  

 

 

 

 

2,243

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Leon C. Janks

 

  

 

 

 

 

27,306

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Mitchell G. Lynn(7)

 

  

 

 

 

 

6,638

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Gary Malino

 

  

 

 

 

 

2,951

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Pierre Mignault

 

  

 

 

 

 

4,096

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Edgar A. Zurcher

 

  

 

 

 

 

6,016

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

José Luis Laparte

 

  

 

 

 

 

1,000

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Maarten O. Jager(8)

 

  

 

 

 

 

31,113

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

William J. Naylon(9)

 

  

 

 

 

 

34,484

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

Francisco Velasco(10)

 

  

 

 

 

 

15,740

 

 

 

 

  

 

 

 

 

*

 

 

 

 

 

All executive officers and directors as a group (22 persons)

 

  

 

 

 

 

8,075,258

 

 

 

 

  

 

 

 

 

26.4

 

 

 

 

 

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

 

  

 

 

 

3,351,586

 

 

  

 

 

 

10.9

 

 

 

EdgePoint Investment Group Inc.(11)

150 Bloor Street West, Suite 500

Toronto, Ontario M5S 2X9 Canada

 

  

 

 

 

3,274,465

 

 

  

 

 

 

10.7

 

 

 

Kayne Anderson Rudnick Investment Management LLP(12)

1800 Avenue of the Stars, Second Floor

Los Angeles, CA 90067

 

  

 

 

 

3,584,527

 

 

  

 

 

 

11.7

 

 

 

The Vanguard Group(13)

100 Vanguard Blvd.

Malvern, PA 19355

 

  

 

 

 

2,297,277

 

 

  

 

 

 

7.5

 

 

  

Name and Address(1)

   

Number of Shares of
Common Stock
Beneficially Owned
(2)
 
 
 
   

Percentage of Shares
of Common Stock
Beneficially Owned
 
 
 

Robert E. Price(3)(4)

   5,932,040    19.2 

Sherry S. Bahrambeygui(5)

   222,928    * 

Jeffrey Fisher(6)

   31,599    * 

Gordon H. Hanson

   2,866    * 

Beatriz V. Infante

   3,742    * 

Leon C. Janks

   27,602    * 

Mitchell Lynn(7)

   7,933    * 

Patricia Márquez

   0    * 

David R. Snyder(8)

   1,000    * 

Edgar A. Zurcher

   8,810    * 

David Price(9)

   38,805    * 

Michael L. McCleary(10)

   15,920    * 

William J. Naylon(11)

   34,629    * 

Francisco Velasco(12)

   24,083    * 

John Hildebrandt(13)

   15,760    * 

All executive officers and directors as a group (22 persons)

   6,465,037    20.9 

BlackRock, Inc.(14)

55 East 52nd Street

New York, NY 10055

   3,712,250    12.0 

EdgePoint Investment Group Inc.(15)

150 Bloor Street West, Suite 500

Toronto, Ontario M5S 2X9, Canada

   3,848,999    12.5 

Kayne Anderson Rudnick Investment Management LLC(16)

1800 Avenue of the Stars, Second Floor

Los Angeles, CA 90067

   3,240,013    10.5 

The Vanguard Group(17)

100 Vanguard Blvd.

Malvern, PA 19355

   2,209,861    7.2 

 

*

Less than 1%.

(1) 

Except as indicated, the address of each person named in the table is c/o PriceSmart, Inc., 9740 Scranton Road, San Diego, California 92121.

(2) 

Beneficial ownership of directors, executive officers and 5% or more stockholders includes shares of restricted stock subject to vesting, regardless of vesting date, and shares issuable upon vesting of restricted stock units and performance stock units that vest within 60 days after the date of this table. Except as indicated in the footnotes to this table and pursuant to applicable community

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement17


Securities Ownership of Certain Beneficial Owners and Management (continued)

LOGO

property laws, the persons named in the table have sole voting and dispositive power with respect to all shares of stock beneficially owned by them.

10PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Securities Ownership of Certain Beneficial Owners and Management (continued)

LOGO

(3) 

Mr. Price is manager of The Price Group, LLC (“The Price Group”). As such, for purposes of this table, he is deemed to beneficially own 150,511 shares of Common Stock held by The Price Group. Mr. Price is manager of RARSD, LLC (“RARSD”). As such, for purposes of this table, he is deemed to beneficially own 8,314 shares of Common Stock held by RARSD. Mr. Price has shared voting and dispositive power with respect to, and disclaims beneficial ownership of, the shares held by The Price Group and RARSD. In addition, Mr. Price is Chairman of the Board and President of Price Charities and a director of Price Philanthropies Foundation. As such, for purposes of this table, he is deemed to beneficially own 2,594,421 shares of Common Stock held by Price Charities and 1,784,0343,645,055 shares of Common Stock held by Price Philanthropies Foundation. Mr. Price has shared voting and dispositive power with respect to, and disclaims beneficial ownership of, the shares held by Price Charities and Price Philanthropies Foundation. If the percentages of shares of Common Stock beneficially owned by Mr. Price were calculated without regard to the shares held by The Price Group, Price CharitiesPhilanthropies Foundation and the Price Family Charitable Fund,RARSD, he would own 9.3%6.9% of the Common Stock.

(4) 

Includes 1,326,557872,511 shares of Common Stock held by the Robert & Allison Price Charitable Remainder Trust, of which Mr. Price is a trustee, 1,447,3321,180,078 shares of Common Stock held by the Robert and Allison Price Trust, of which Mr. Price is a trustee, 38,805 shares of Common Stock held by trusts for the benefit of Mr. Price’s son, of which Mr. Price is a trustee, and 45,000 shares of Common Stock held by family trusts, of which Allison Price, Mr. Price’s wife, is the sole trustee.

(5) 

Includes 40,248 shares owned by trusts for the benefit of Mr. Price’s children and nephew, of which Ms. Bahrambeygui is a trustee, 69,72843,728 shares owned by the Hosey Family Trust, of which Ms. Bahrambeygui is a trustee and 2,000 shares owned by Ms. Bahrambeygui’s children. Includes 72,27881,726 shares of restricted Common Stock that are subject to vesting restrictions.

(6) 

Includes 47,00029,900 shares held by the Fisher Family Trust.

(7) 

Includes 4,6505,945 shares held by the Lynn Family Trust.

(8) 

Includes 25,5071,000 shares of restricted Common Stock that are subject to vesting restrictions.held by the Snyder Family Trust.

(9) 

Includes 20,57538,805 shares of restricted Common Stock that are subject to vesting restrictions.held by the David Price Trust.

(10) 

Includes 10,1489,068 shares of restricted Common Stock that are subject to vesting restrictions.

(11) 

Includes 1,750,48211,670 shares held by EdgePoint Global Portfolio, for which EdgePoint Investment Group Inc. acts as investment manager.of restricted Common Stock that are subject to vesting restrictions.

(12) 

Includes 2,119,9809,618 shares beneficially owned by Virtus Investment Advisors, Inc., which includes 1,595,000 shares beneficially owned by Virtus Equity Trust, on behalf of Virtus KAR Small Cap Growth Fund: Delaware.restricted Common Stock that are subject to vesting restrictions.

(13) 

Includes 43,8715,813 shares held by Vanguard Fiduciary Trust Companyof restricted Common Stock that are subject to vesting restrictions.

(14)

In its Schedule 13G filed on January 26, 2021, BlackRock, Inc. stated that it beneficially owned the number of shares of Common Stock reported in the table as of December 31, 2020, had sole voting power over 3,642,978 of the reported shares, shared voting power over none of the reported shares and 4,562sole dispositive power over all of the reported shares.

(15)

In its Schedule 13G filed on February 9, 2021, EdgePoint Investment Group, Inc. stated that it beneficially owned the number of shares held by Vanguard Investments Australia, Ltd., both of which are whollyCommon Stock reported in the table as of December 31, 2020, had sole voting and dispositive power over 2,796,586 the reported shares, and sole voting power and shared dispositive power over 1,052,413 of the reported shares.

(16)

In its Schedule 13G filed on February 10, 2021, Kayne Anderson Rudnick Investment Management, LLC stated that it beneficially owned subsidiariesthe number of shares of Common Stock reported in the table as of December 31, 2020, had sole voting and dispositive power over 1,899,026 the reported shares, and shared voting power and shared dispositive power over 1,340,987 of the reported shares.

(17)

In its Schedule 13G filed on February 8, 2021, The Vanguard Group Inc.stated that it beneficially owned the number of shares of Common Stock reported in the table as of December 31, 2020, had sole voting power over none of the reported shares, shared voting power over 24,257 of the reported shares, sole dispositive power over 2,168,268 of the reported shares and shared dispositive power over 41,593 of the reported shares.

 

18PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement11


Executive Officers of the Company

 

LOGO

 

The executive officers of the Company and their ages as of December 20, 2019November 30, 2021 are as follows:

 

Name

 

Position

 

 

Age

 

Sherry S. Bahrambeygui

 

Chief Executive Officer and Director

57

Michael L. McCleary

 

55

Michael McCleary

Executive Vice President & Chief Financial Officer

 

Senior Vice President & Interim Chief Financial Officer

56 

54

William J. Naylon

 

Executive Vice President and Chief Operating Officer

59

Francisco Velasco

 

57

Francisco Velasco

Executive Vice President, General Counsel, Chief Ethics & Compliance Officer and Secretary

50

Ana Luisa Bianchi

 

Executive Vice President — Chief Merchandising Officer

48

54

Ana Luisa Bianchi

Juan Ignacio Biehl

 

Executive Vice President—President — Digital Experience and Chief MerchandisingTechnology Officer

56

Rodrigo Calvo

 

Executive Vice President — Real Estate

52

50

Rodrigo Calvo

Frank Diaz

 

Executive Vice President—Real EstatePresident — Logistics and Distribution

53

Brud E. Drachman

 

Executive Vice President — Environmental Responsibility, Construction and Facilities

48

67

Frank Diaz

John D. Hildebrandt

 

Executive Vice President—Logistics and DistributionPresident — Operations

63

Nicolas Maslowski

 

Executive Vice President — Member Experience and Strategic Analytics

51

42

Brud E. Drachman

Laura Santana

 

Executive Vice President—Construction and FacilitiesPresident — Information Technology

53

Jesus Von Chong

 

65

John D. Hildebrandt

Executive Vice President — Local/Regional Merchandising

 

Executive Vice President—Operations

55 

61

Laura Santana

Executive Vice President—Information Technology

51

Jesus Von Chong

Executive Vice President—Local/Regional Buying—Central America/Caribbean/Columbia

53

Sherry S. Bahrambeygui has served as Chief Executive Officer since January 2019 after servingand previously served as interim Chief Executive Officer from November 2018 to January 2019. She alsoMs. Bahrambeygui has been a director of the Company since November 2011. She2011 and served as Vice ChairChairman of the Board from October 2016 to October 2017. Ms. Bahrambeygui previouslyPrior to becoming Chief Executive Officer, she served as Senior Executivethe President and Managing Member of Thethe Price Group, LLC, an investment management firm from September 20062007 to January 2019. Additionally,2018. Before joining the Price Group, Ms. Bahrambeygui had a 15-year legal career as a litigator specializing in the health care, life sciences, consumer & retail, and real estate industries. She was the founding partner of Hosey & Bahrambeygui, LLP, a leading boutique civil litigation practice, from 1999 to 2007. In addition to her board service at the Company, Ms. Bahrambeygui has significant experience in corporate governance as a board member, trustee and attorney for numerous public, private and non-profit companies and boards.

Michael L. McCleary has served as Executive Vice President Secretary and Vice Chairman of the Boards of Price Charities, Price Philanthropies Foundation and the Aaron Price Fellows Foundation, and as the Chief ExecutiveFinancial Officer of PS Ivanhoe, LLC, a commercial real estate investment company. Ms. Bahrambeygui was a licensed stockbroker and a partner in multiple law firms, including a founding partner of the law firm of Hosey & Bahrambeygui, LLP. She practiced law with an emphasis on complex international business and corporate matters and also in the areas of employment and compensation. Ms. Bahrambeygui’s service as Chief Executive Officer, her thorough understanding of the business and operations of the Company, as well as having effectively assisted the Company on complex business matters, contribute to the Board of Directors’ conclusion that she should serve as a director of the Company.

Michael McCleary has servedsince April 2020, after serving as Senior Vice President and Interim Chief Financial Officer sincefrom December 2019.2019 to March 2020. He joined the Company as Vice President and Corporate Controller in 2003 and was subsequently promoted to Senior Vice President and Corporate Controller. Mr. McCleary has over 30 years of international finance, tax and accounting experience. Mr. McCleary is a certified public accountant and has a bachelor of arts degree in business economics from the University of California, Santa Barbara. Prior to joining PriceSmart, Mr. McCleary worked for 14 years in various international companies based in Madrid, Spain.

William J. Naylon has been Executive Vice President and Chief Operating Officer of the Company since January 2002. Mr. Naylon served as Executive Vice President—Merchandising of the Company from July 2001 until January 2002 and as Senior Vice President of the Company from March 1998 until July 2001. From September 1995 through February 1998, Mr. Naylon was Managing Director for the Company’s licensee warehouse club operation in Indonesia. Prior to joining the Company, Mr. Naylon was a General Manager for Price/Costco and served in various management roles for The Price Company.

Francisco Velasco has been Executive Vice President, General Counsel and Secretary of the Company since July 2016 and Chief Ethics & Compliance Officer since October 2016. From March 2009 to June 2016, Mr. Velasco served as Division Counsel

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement19


Executive Officers of the Company (continued)

LOGO

Latin America for AbbVie Inc., a publicly traded global biopharmaceutical company. Previously, he heldin-house legal roles at Abbott Laboratories, Hanes Brands Inc. and Sara Lee Corporation, and he began his career in private practice specializing in the Latin America region. Mr. Velasco attended law school in Mexico, has a Masters of Law degree from Georgetown University and has an MBA degree from Duke University.

12PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive Officers of the Company (continued)

LOGO

Ana Luisa Bianchi has been Executive Vice President—President — Chief Merchandising Officer since August 2018 and was Senior Vice President—Merchandising—President — Merchandising — Latin America Local from October 2016 through July 2018. From 2010 to October 2016, Ms. Bianchi was Vice President—President — Merchandising, overseeing the local side of the Colombia business. Ms. Bianchi previously served as regional buyer for the Central America operations from 2007 to 2010. From 2005 to 2007, Ms. Bianchi was local buyer for the Guatemala operations. In 2004, Ms. Bianchi was a consultant to PriceSmart’s St. Thomas operations. In 2003, Ms. Bianchi served as Merchandising Director for U.S. food purchases. From 1999 to 2003, Ms. Bianchi served as the food and candy buyer in the Miami corporate office. Ms. Bianchi joined PriceSmart in 1998 as a local buyer for the Guatemala operations. Ms. Bianchi has a law degree in Guatemala from Universidad Rafael Landívar.

Juan Ignacio Biehl has been Executive Vice President — Digital Experience and Chief Technology Officer since September 2020. Mr. Biehl joined PriceSmart in March 2018 as part of the acquisition of Aeropost, Inc. He joined as the Chief Technology Officer of Aeropost, a position he held since February 2013, and was promoted to Senior Vice President of Digital Experience of the Company in 2019. Over the preceding 25 years, Mr. Biehl has been an entrepreneur in the technology sector working in diverse areas of information systems with companies such as Apple, Inter@america and Naysat.

Rodrigo Calvo has been Executive Vice President—President — Real Estate since June 2015 and served as Senior Vice President of Real Estate from February 2009 after joining PriceSmart in October 2004 as Director of Real Estate. Before coming to the Company, he led Grupo Promerica’s real estate development division. Before that, he worked for McDonald’s Corporation’s real estate area and for CSU (now Walmart Central America) in special projects. This combined background allowed him to develop a deep understanding of the commercial real estate field in Central America and the Dominican Republic. He holds a bachelorsbachelor of science degree in civil engineering from the University of Costa Rica and an MBA from INCAE Business School.

Frank Diaz has been Executive Vice President—President — Logistics and Distribution since November 2015. Mr. Diaz previously served as Senior Vice President of Distribution and Logistics from February 2010 until November 2015. He joined PriceSmart in September 2008 as Vice President of Logistics. Prior to joining the Company, Mr. Diaz worked more than 20 years in progressively responsible positions in the areas of operations, strategic planning and commercial development withtop-tier logistics companies including UPS, FedEx and CS Integrated LLC. With DHL, Mr. Diaz was head of transformational programs involving international tradelane development and improved customer experience. Mr. Diaz has a bachelorsbachelor of science degree in industrial engineering from the New Jersey Institute of Technology and a logistics management certification from the Georgia Institute of Technology.

Brud E. Drachman has been Executive Vice President—President — Environmental Responsibility, Construction and Facilities since August 2013, was2019, served as Executive Vice President—President — Construction Management of the Company from November 2005 until July 2013, served as Executive Vice President—President — Real Estate and Construction of the Company from February 2005 through October 2005 and as Executive Vice President—President — Construction and Private Label Merchandising from November 2004 until January 2005. Mr. Drachman served as Executive Vice President—President — Real Estate and Construction of the Company from November 2002 until October 2004 and served as Senior Vice President—RealPresident —Real Estate and Construction of the Company from August 1998 to October 2002. Mr. Drachman previously served as Vice President—President — Real Estate and Construction at Price Enterprises from August 1994 to August 1997. Prior to joining Price Enterprises in 1994, Mr. Drachman served as Project Manager at The Price Company beginning in 1987.

John D. Hildebrandt has been Executive Vice President—President — Operations of the Company since February 2010. Mr. Hildebrandt served as Executive Vice President—President — Central America and Trinidad Operations from March 2009 through January 2010, as

20PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive Officers of the Company (continued)

LOGO

Executive Vice President—President — Central America Operations from August 2003 until February 2009, as Executive Vice President—President — Caribbean and Asia Operations from July 2001 until July 2003 and as Senior Vice President of the Company from September 2000 until July 2001. Mr. Hildebrandt previously served as Vice President of the Company from September 1998 until August 2000, overseeing operations in Central America. Mr. Hildebrandt served as the Company’s Country Manager in the Philippines and Panama from August 1997 until August 1998, and as Price Enterprises’ Country Manager in the Philippines and Panama from 1996 until the Company was spun off from Price Enterprises in August 1997. Prior to joining Price Enterprises as Country Manager in 1996, Mr. Hildebrandt was a Senior Operations Manager of Price/Costco from 1994 through 1996, and served in various management roles for The Price Company beginning in 1979.

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement13


Nicolas E. Maslowski has been Executive OfficersVice President — Member Experience and Strategic Analytics since September 2021. Prior to that, Mr. Maslowski served as Senior Vice President — Member Experience from March 2019 to September 2021. Mr. Maslowski joined PriceSmart in March 2018 as part of the Company (continued)

LOGO

acquisition of Aeropost, Inc. He served as the Chief Revenue Officer and Chief Marketing Officer of Aeropost, positions he held since January 2017 and April 2015 respectively. He holds a degree in engineering from Universidad Metropolitana and an MBA from Harvard Business School.

Laura Santana has been Executive Vice President—President — Information Technology since March 2017. Ms. Santana has served in progressively responsible positions relating to the Company’s IT systems since joining the Company in 1995. Ms. Santana previously worked at The Price Company from 1987 to 1995 in operations and information technology. Ms. Santana is a graduate of the University of San Diego.

Jesus Von Chonghas been Executive Vice President—President — Local/Regional Buying—Central America/Caribbean/ColumbiaMerchandising since August 2018. He previously served as Executive Vice President—President — Chief Merchandising Officer from September 2016 through July 2018 and was Executive Vice President—President — Foods Merchandising from November 2015 through August 2016. Mr. Von Chong served as Senior Vice President of Merchandising for Central America beginning in 2003, added Colombia to his responsibilities in March 2011 and the Caribbean Region in April 2015. He served as a Regional Merchandising Director for Panama, Costa Rica and Dominican Republic from 2000 to 2003. He was first employed by the Company as a buyer in the Company’s operations in Panama in 1996. Mr. Von Chong progressed to head Buyer in 1998, Warehouse Manager for Via Brasil Operations in 1999 and to Panama’s Country Manager in 2000.

 

14PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement21


Executive and Director Compensation

 

LOGO

 

Compensation Discussion and Analysis

The Compensation and Human Capital Committee of our Board of Directors, comprisedwhich we refer herein to as our Compensation Committee, consisting entirely of independent directors, administers the Company’s executive compensation program. The role of the Compensation Committee is to oversee compensation and benefit plans and policies, administer stock plans, and review and approve annually all compensation decisions relating to all executive officers. The Compensation Committee is authorized to retain the services of one or more executive compensation advisors, in its discretion, in order to assist with the establishment and review of our compensation programs and related policies. The Committee has engaged an independent national compensation consulting firm to provide executive compensation advisory services, help evaluate our compensation philosophy and objectives and provide guidance in administering our compensation program.

Fiscal Year 20192021 Company Initiatives

OurDuring fiscal year 2021, our Chief Executive Officer, Sherry Bahrambeygui, took over leadership offocused the Company in November 2018, first on a transitional basis and then on a permanent basis in January 2019. She is driving strategic investmentspursuing three principal paths to strengthen our core business and to build and incorporate into the core business an omni-channel platform, diversify our club base with smaller format clubs, and enhance and streamline our sourcing and inventory models. Underpinning these investments, Ms. Bahrambeygui and the PriceSmart leadership team havere-committed to the “Six Rights of Merchandising,” with the objective of enhancing technological tools and capabilities available today to increase efficiencies and fully support the guiding principles in our current business and our business going forward.growth:

 

  

The Right Merchandise:basic, seasonal,Obtain additional real estate for new warehouse clubs and exciting new itemsdistribution facilities and maximize the uses of existing real estate;

 

  

The Right Time:merchandise must be “fresh”Enhance the benefits of membership by providing valuable products and in tune with current seasonsservices at low costs; and trends

 

  

The Right Place:flow and position merchandise to maximizeGenerate incremental sales through PriceSmart.com.

The Right Condition: sell only first quality merchandise

The Right Quantity:purchase merchandise in quantities that allow for efficient handling and lowest acquisition cost

The Right Price:price merchandise as low as possible to provide consistently low prices every day

The Company is endeavoringReal Estate Initiatives. We currently operate in 13 countries/territories, with the largest in terms of population and gross domestic product being Colombia. During fiscal year 2021, we engaged in construction and other pre-opening activities with respect to create a more nimble, competitivethree warehouse clubs we expect to open in fiscal year 2022. We continued to evaluate opportunities for new warehouse clubs in Colombia, the Northern Triangle area of Central America and customizable platform from which it can respondJamaica as well as future expansion into new markets in South America. We also continued to pursue opportunities to increase our control of aspects of the fast-changing retail environmentssupply chain and invest in areas where we operate. Our members expectcan reduce costs and pass the savings on to our Members. In furtherance of this objective, we continued to identify and secure strategic locations in our markets to distribute product more efficiently and support delivery of e-commerce orders. We believe we can leverage local and regional distribution facilities to reduce the inventory we keep on hand at our warehouse clubs, allowing us to use a greater portion of our buildings for retail sales and services.

Enhance Benefits of Membership. During fiscal year 2021, we leveraged our sourcing expertise and buying power to identify and acquire exceptional products we could provide to Members at great values. We continued to expand our private label products to include more categories in cases where we can reduce costs while maintaining quality. We broadened the services we provide at our warehouse clubs, particularly those focused on Member well-being, such as pharmacy, optical and audiology. And we continued to develop technology that provides Members with greater convenience and options for their shopping experience.

Use PriceSmart.com to Generate Incremental Sales. We endeavor to provide our Members a low-cost, seamless and tailored buying experience through both our physical and digital channels. We are testing new initiatives to addressbelieve that strengthening our members’ expectations for merchandise and services and through smaller store formats in Veraguas, Panama and Santo Domingo, Dominican Republic, which we anticipate will resonateconnection with our membersMembers helps us make more effective business decisions. During fiscal year 2021, we continued to enhance our omni-channel capabilities, including ongoing development of PriceSmart.com and facilitate growthour mobile shopping app for Members to use on hand-held devices. We also expanded our Click & Go curbside and delivery service, with delivery now available in previously underserved geographies.all markets. The Company also now provides online visibility of inventory, online payment platforms, and the ability to sign up and renew memberships online in every one of our markets. We are also analyzingapply data analytics to our member data to better inform decisions related to buying, services and inventory flow.flow and create better predictability of our business. We believe our investments in technology will help us increase both online sales and incremental sales in our warehouse clubs.

We believe that these initiatives, combined with our adherence to the fundamentals of our business, the Six Rights of Merchandising (Right Merchandise, Right Time, Right Place, Right Condition, Right Quantity and Right Price), contributed to our

22PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

positive results during fiscal year 2021. In addition, we believe that by continuing to prioritize and protect the wellbeing and safety of our employees and Members, we have further strengthened our standing in our markets despite the challenges we continue to experience as a result of the pandemic.

Financial Highlights

The Company performed well in fiscal year 2021 . . .

8.7%

increase in total revenues

5.8%

increase in comparable net merchandise sales

29%

increase in operating income

$3.18

earnings per diluted share

18.2%

increase in total gross margins

16.0%

merchandise gross margin
percentage

1.67 million

membership accounts,

an all-time high

$56.0 million

in membership income

89.6%

trailing 12 months renewal rate,

an all-time high

Compensation Philosophy

Three fundamental philosophies form the basis of pay at PriceSmart:

First, we believe that employees should be paid fairly and competitively, as Sol Price said: “pay good wages and provide good benefits, including health insurance to employees.”

Second, we believe that all jobs should be rewarded based on both personal achievements within PriceSmart and overall company success, also considering function and level. Every employee plays a critical role in the overall success of PriceSmart.

Third, we are especially mindful that there are entry level and lower compensated employees that must be prioritized to ensure that their compensation allows for a reasonable standard of living.

We believe total compensation should include a collection of competitive plans and policies designed to reward employees for their contributions to PriceSmart’s success, including:

Competitive base salary;

Bonus opportunity;

Equity program;

Healthcare, vision, dental, life insurance and protection against temporary loss of income;

Retirement plans;

Career advancement and development; and

Work-balance programs — including vacation time, personal time off, flex time.

Our objective is to find, develop and retain talented and engaged employees who are valued for their unique contributions to the Company and who also strengthen the team. Through our compensation plans, we strive to motivate employees to perform to the best of their competencies, abilities and skill sets. In order to retain key talent and reward high performance within our organization, we are developing a methodology to evaluate employees consistently across geographies and define job profiles within our global compensation structure, thereby setting a framework for promotion, succession planning and development.

The Compensation Committee believes that the Company’s compensation program must be:

1.

Fair — a compensation package that is applied consistently across the organization and is cost effective. The fairness applies to everyone on equal terms, regardless of gender, age, background, national origin, sexual orientation, sexual identity and race;

2.

Flexible — a comprehensive approach designed to meet our business objectives and market demands;

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement23


Executive and Director Compensation (continued)

LOGO

3.

Competitive — offering a total compensation package that is equitable and based on strong labor market positioning;

4.

Performance based — sharing success through pay programs tied to personal, team (where applicable) and company performance; and

5.

Understood — clearly communicated to explain the value and to motivate.

Beginning in fiscal year 2017, the Compensation Committee, which, at the time, was led by our current Chief Executive Officer, Sherry Bahrambeygui, began a review of the Company’s compensation practices. This review focused, in particular, on the extent to which executive compensation should include performance incentives. Following this analysis, the Compensation Committee, with the input of the compensation consultant, determined that the Company’s compensation philosophy should encompass the following core values:

1.

Fair—a compensation package that is applied consistently across the organization, regardless of gender, age, background, national origin, sexual orientation, sexual identity and race;

2.

Flexible—a comprehensive approach designed to meet our business objectives and market demands;

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement15


Executive and Director Compensation (continued)

LOGO

3.

Competitive—compensation should be equitable and take into account competitive conditions;

4.

Performance based—sharing success through pay programs tied to personal & team metrics, where applicable, and Company performance; and

5.

Understood—clearly communicated to explain the value and to motivate.

As a result of the review of compensation practices continued under the current Chair of the Compensation Committee, Beatriz Infante, and the establishment ofconsistent with the core values set forth above, the Compensation Committee is modifyingmodified the Company’s pay philosophy and compensation practices to incorporate performance-driven incentives for the Chief Executive Officer and throughout the Company. To ensure retention of top talent as the compensation practices evolve, the Committee determined that it was in the best interests of stockholders to begin the transition with the Chief Executive Officer’s compensation to lead by example for the executive team and to stage the changes to the compensation programs over a multi-year period.

From fiscal year 2016 to fiscal year 2018, our executive compensation was comprisedconsisted primarily of base salary and restricted stock awards with time-based vesting. Beginning in late fiscal year 2018 and early fiscal year 2019, the Company introduced performance stock units with vesting tied to achievement of revenueAdjusted Sales or operating incomeAdjusted Operating Income targets. In fiscal year 2019, the Compensation Committee reintroduced performance-based cash bonuses in connection with the hiring of Sherry Bahrambeygui first as interim Chief Executive Officer, and later as permanent Chief Executive Officer. TheIn fiscal year 2020, the Compensation Committee intendsdetermined to incorporate annual cash bonuses as well as long-term performance-based equity into its executive compensation program for executives going forward, in addition to the practice updated in fiscal year 2018 of smaller annual grants of time-based equity with multi-year vesting. The Company’s Chief Executive Officer and Compensation Committee believe that creation of stockholder value requires accountability for the achievement of specific company objectives, both short-term and long term, and that performance-based cultures are correlated with increased stockholder value. Accordingly, the Chief Executive Officer and the Compensation Committee are seekinghave sought to gradually increase the portion of compensation that is performance-based to provide incentives for achievement of annual objectives. The Company’s Chief Executive Officer and Compensation Committee also believe that direct linkages of executive pay with the Company’s stock price performance encourages and rewards an owner-operator mindset among the Company’s executives and incentivizes executives to take actions that generate long-term sustainable benefits to the Company, which are aligned with stockholders’ interests.

The charts below chart comparesshow the components of target compensation for our Chief Executive Officer for fiscal year 2018 to the components of target compensationand for our Named Executive Officers other than the Chief Executive Officer for fiscal year 2020. Fiscal year 2019 is not shown because it was a transition year in which our former Chief Executive Officer served for a portion of the year and our current Chief Executive Officer served for a portion of the year in an interim role and a portion of the year in a permanent role.

LOGO

2021.

 

16LOGOLOGO

24 PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement


Executive and Director Compensation (continued)

 

LOGO

 

The below chart comparesamounts reflected in these charts show the componentsaggregate grant-date values of RSA awards and PSU awards at target compensation for our Named Executive Officers other than our Chief Executive Officer for fiscal year 2019performance. However, such awards are subject to three-year time vesting (in addition to performance vesting in the case of PSUs) and are subject to forfeiture if the executive’s employment terminates prior to the componentsend of the vesting period. As a result, an executive’s actual compensation experience for a given year will not match the allocation percentages set forth above even if the Company and the executive perform at target compensationlevels for our Named Executive Officers other than our Chief Executive Officer for fiscal year 2020.

LOGOsuch year.

Purposes and Structure of the Executive Compensation Program

The objectives of the Company’s executive compensation program are to:

 

  

Attract, motivate and retain superior talent;

 

  

Encourage and reward high performance, collaboration and accountability; and

 

  

Align executive pay opportunities with Company performance and stockholder returns.

To achieve these objectives, the Compensation Committee evaluates the appropriate mix of cash and stock-based compensation and the appropriate weighting of performance-based and fixed compensation. In determining specific amounts and components of compensation, the Compensation Committee considers each officer’s role, position, performance, level of responsibility, skills and experience, and prior compensation awards, as well as market data, as more fully described below under “Elements of Compensation.”

The following table sets forth executive compensation and governance policies and practices we have implemented to advance the objectives of our executive compensation program and to align our practices and policies with industry best practices.

 

Practice

 

 

PriceSmart Policy

Alignment of Compensation and Stockholder Returns

 

 

A material proportion of the total target compensation opportunity of our Named Executive Officers is long-term equity incentive awards.

Stock Ownership Requirements

 

 

All of our executive officers and outside directors are subject to stock ownership requirements.

Clawback Policy

Extended Vesting for Performance Stock Units

 PSUs vest over three years with a one-year performance period.

Clawback Policy

 

All of our executive officers are subject to a compensation clawback policy.

Independent Compensation Consultant

 

 

The Compensation Committee engages an independent compensation consultant that reviews and advises the Compensation Committee on executive compensation. The consultant performs services solely for the Compensation Committee.

Anti-Hedging and Pledging Policy

 

 

We do not allow executive officers or directors to enter into any hedging or pledging transactions relating to our common shares.

No Excise TaxGross-Ups

 

 

We do not pay excise tax gross ups under our employment agreements in the event of a change in control.

No Pension Plans or SERPs

We do not sponsor any qualified or non-qualified defined benefit plans or supplemental executive retirement plans (SERPs) for our executive officers.

No Guaranteed Bonuses or Salary Increases

We do not guarantee salary increases or provide guaranteed bonuses to any of our executive officers.

No Evergreen Provision in 2013 Equity Incentive Plan

The 2013 Equity Incentive Plan does not provide for automatic share additions during its term.

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 1725


Executive and Director Compensation (continued)

 

LOGO

 

Compensation Determination Process

The Compensation Committee reviews the compensation for our Chief Executive Officer and makes a recommendation to the full Board, which has ultimate authority for approval of such compensation. The Compensation Committee reviews and approves all compensation for our executive officers. In the case of the Chief Executive Officer, the Compensation Committee makes such approval after consulting with the Company’s Chairman of the Board. Each year the Compensation Committee relies on multiple data points to assess the competitiveness of our executive compensation program and the individual compensation of our executives. Information the Compensation Committee uses to perform this analysis includes:

 

  

The Company’s performance against its financial and operational goals;

 

  

The mix of short-term and long-term compensation in the form of cash and equity-based compensation achieved in the prior year;

 

  

A review of information on the competitive market, with input from the Compensation Committee’s independent consultant;

 

  

The anticipated level of complexity and responsibility assigned to the executives given the Company’s strategic objectives; and

 

  

The expense to the Company of the proposed compensation for the following fiscal year relative to the Company’s budget.budget; and

The dilution to stockholders from equity awards.

Use of Independent Compensation Consultant

In fiscal year 2019,2021, the Compensation Committee retained Semler Brossythe Rewards Solutions practice at Aon plc as its independent executive compensation consultant. The consultant has no other business relationship with the Company and receives no payments from us other than the fees for services to the Compensation Committee. The consultant reports directly to the Compensation Committee, and the Compensation Committee may replace the consultant or hire additional consultants at any time.

During fiscal year 2019,2021, the scope of the compensation consultant’s engagement included:

 

  

Conducting a review of competitive market information for our executive officers, including our Chief Executive Officer, for use in determining fiscal year 20192021 compensation levels;

 

  

Reviewing and commenting, as requested by the Compensation Committee, on our executive compensation programs and opportunities;

 

  

Advising the Compensation Committee regarding the selection of the executive pay peer group discussed below under the heading “—Peer Group”;

 

  

Providing recommendations on instituting a long-term performance-based compensation structure in response to stockholder input and participating inAdvising the design and implementation of newCompensation Committee regarding performance-based components of our compensation program; and

 

  

Reviewing and commenting on the Compensation Committee’s report for the proxy statement.

Semler BrossyAon made recommendations regarding compensation for our Chief Executive Officer and also made recommendations with respect to our other Named Executive Officers. After gathering this input and receiving these recommendations, the Compensation Committee determined the compensation of our Named Executive Officers in executive session.

18PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive and Director Compensation (continued)

LOGO

Officers.

The Compensation Committee believes that long-term compensation plays an important role in encouraging positive results through collaboration, aligning the compensation of the senior management team to stockholder returns and in retaining key executives. In particular, the Compensation Committee believes that the Chief Executive Officer’s compensation should be more heavily weighted towards long-term incentives as compared to other members of senior management given her greater ability to affect the results of the Company and the importance of retaining her services.

Comparison of Short-Term

26PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation and Long-Term, Equity-Based Compensation

The charts below show the percentage breakdown of short-term compensation (comprised of salary, bonus, dividends paid on restricted stock, 401(k) contribution by the Company and miscellaneous perquisites) and long-term, equity-based compensation (comprised of the dollar value of restricted stock awards and performance stock units that vested during the fiscal year based on the market value on the vesting date) for fiscal year 2019 for our Chief Executive Officer and for the other Named Executive Officers.(continued)

 

LOGO

LOGO

Elements of Compensation

In fiscal year 2019, theThe compensation of our Named Executive Officers wasis comprised of base salaries, cash bonuses and long-term, equity-based incentives in the form of restricted stock awards and performance stock units.    In addition, our Chief Executive Officer’s compensation included cash bonuses based upon achievement of individual performance targets.

Base Salary. Base salaries for the Named Executive Officers were initially established either when they were hired into the position from outside the Company or as they were promoted to increasing levels of responsibility within the Company. Base salaries for the Named Executive Officers are generally established based on the scope of their responsibilities, level of experience and individual performance, taking into account both external competitiveness and internal equity considerations. While the goal for the base salary component is to compensate executives at a level that is competitive with the salaries of executives in comparable positions among our peer group, the Compensation Committee does not attemptuse a formulaic approach to set base salaries at a certain target percentile within the peer group. Instead, the Compensation Committee considers external market information only to confirm that its base salary determinations based on the other factors described above are competitive.

The Compensation Committee annually evaluates the base salary levels of the Named Executive Officers to ensure that there is consistency within the Company based upon scope of responsibility and also to ensure that the base salaries are appropriate relative to the peer companies listed below. In establishing changes to base salaries, the Compensation Committee may consider the overall financial condition of the Company but does not make changes to executive salaries based on the achievement of any particular financial criteria.

The following table shows base salaries for our Named Executive Officers for fiscal years 2020 and 2021 and the percent increase year-over-year.

Named Executive Officer

  Fiscal Year
2020 Base
Salary
   Fiscal Year
2021 Base
Salary
   Percent
Increase
 

Sherry Bahrambeygui

  $1,000,000   $1,200,000    20.0% 

Michael L. McCleary

   500,000    566,500    13.3 

William Naylon

   600,000    625,000    4.2 

Francisco Velasco

   550,000    566,500    3.0 

John Hildebrandt

   474,000    525,000    10.8 

Annual Cash Incentive Awards. Each of our Named Executive Officers participates in our annual cash incentive award program. The amount of the annual cash incentive award earned by Named Executive Officers is based on corporate performance and achievement of a pre-determined and measurable set of individual performance objectives established at the beginning of the performance period. No annual cash incentive award based on corporate performance is earned if the Company does not meet the threshold performance goal.

Fiscal 2021 Target Bonuses

At the beginning of fiscal year 2021, the Compensation Committee set the target bonus amounts for fiscal year 2021 for each of our Named Executive Officers set forth in the following table.

Named Executive Officer

  Target Bonus 

Sherry Bahrambeygui

  $1,800,000 

Michael L. McCleary

   141,625 

William Naylon

   156,250 

Francisco Velasco

   141,625 

John Hildebrandt

   131,250 

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 1927


Executive and Director Compensation (continued)

LOGO

Fiscal 2021 Performance Measures

At the time of the budgeting process for fiscal year 2021, the pandemic and the severity of its impact on commercial, economic and social activities was difficult to project. PriceSmart generates sales in multiple countries in emerging markets, with each country responding to the threat of COVID-19 in different ways. As a result, the Company experienced significant closures and restrictions beyond those we saw in the United States. Further, at the time of the budgeting process, there was no vaccine readily available. Therefore, our ability to forecast the Company’s performance for over a year into the future was impossible. As a result, the Company created its budget based on the information available at the time, with the expectation and hope that conditions would improve in our markets during the second half of the fiscal year.

At the beginning of fiscal year 2021, the Company bifurcated its annual incentive awards into two components. The first component, covering corporate performance up to target, used growth in Adjusted Sales (in U.S.$ or on a constant currency basis) and achievement of specified levels of Adjusted Operating Income as a Percentage of Adjusted Sales as alternative corporate performance measures, with payments being based on the greater achievement under the two measures. The Compensation Committee selected growth in Adjusted Sales and achievement of specified levels of Adjusted Operating Income as a Percentage of Adjusted Sales as alternative performance measures for the annual cash incentive awards up to target levels for fiscal 2021 because they believed they represent key indicators of the strength of our operating results and incentivized the participants in our annual cash incentive award program to achieve strong revenue and earnings growth. The second component covered corporate over-achievement. In light of the impact of COVID uncertainties on the budgeting process, the Compensation Committee and the Board worked together to develop the incentives for over-achievement, with the intention that such incentives be payable only if the Company substantially over-achieved its budget. They determined that if the Company did not exceed budget by at least $11 million in Adjusted Operating Income, the CEO and other executives would not be eligible for any overachievement bonus or award. Further, the Compensation Committee and the Board decided that the over-achievement incentive should be based on a single, more stringent metric than the bonus plan for achievement up to target performance. For over-achievement, the Compensation Committee and the Board determined that incentive awards should be derived solely from an allocation of Adjusted Operating Income between the executives and the Company (for the benefit of the Company’s stockholders) so that the relative interests of the executives and the stockholders would be readily apparent. Accordingly, the Compensation Committee and the Board determined that the Chief Executive Officer and certain other executives should share an over-achievement pool in an amount equal to 15% of Adjusted Operating Income above the threshold level of $125.1 million.

For Ms. Bahrambeygui, 50% of her annual cash incentive award was determined based on achievement in growth of Adjusted Sales or achievement of specified levels of Adjusted Operating Income as a Percentage of Adjusted Sales, in the case of payments up to 100% of target, and achievement of Adjusted Operating Income above a threshold level, in the case of over-achievement annual cash incentive award opportunity, and 50% based on key performance indicators approved by the Compensation Committee. For our other executives, 80% of their annual cash incentive awards were determined based on achievement in growth of Adjusted Sales or achievement of specified levels of Adjusted Operating Income as a Percentage of Adjusted Sales, in the case of payments up to 100% of target, and achievement of Adjusted Operating Income above a threshold level, in the case of over-achievement annual cash incentive award opportunity, and 20% based on key performance indicators set by the Chief Executive Officer and approved by the Compensation Committee.

28PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

 

LOGO

 

The tables set forth below show payout levels as a percentage of target annual cash incentive award based on minimum and target levels for growth in Adjusted Sales (in U.S.$ or on a constant currency basis) and minimum and target levels for achievement in Adjusted Operating Income as a Percentage of Adjusted Sales.

   GROWTH IN ADJUSTED SALES
Over FY20
  --OR--   ADJUSTED
OPERATING INCOME
AS A PERCENTAGE
OF

FY21 ADJUSTED
SALES
 
   in Constant
Currency
   in US $$         
     
   Growth   Payout   Growth   Payout      % of
Adjusted
Sales
   Payout 

Min

   1.50%    50%    1.55%    50%        3.06%    50% 

Target

   3.10%    100%    3.10%    100%        3.36%    100% 

In the case of over-achievement incentives, the Compensation Committee and the Board reviewed peer company incentive awards above target to determine the appropriate allocation of the over-achievement pool. Based on that review, and for sake of simplicity, the Committee determined that of the amount earned in over-achievement incentives, 40% should be awarded to the Chief Executive Officer and 60% should be awarded to the executives. The over-achievement incentives were payable partially in cash and partially in additional equity awards in the form of performance stock units, or PSUs, with no cap on over-achievement cash payouts and additional PSUs. The group of other executives is comprised of our Executive Vice Presidents, one Senior Vice President (who has since been promoted to Executive Vice President) and the President of our former Aeropost subsidiary. We refer to this group of executives as our “Action Task Force” or “ATF Team.” The over-achievement pool payable to the ATF Team is allocated between cash and additional PSUs in the same proportions as the ATF Team’s aggregate target annual cash incentive awards and the aggregate initial grant date value of their PSU awards represent as a percentage of their total cash annual incentive awards and PSUs. Additional cash incentive awards are then allocated to individual members of the ATF Team in proportion to their respective target annual cash incentive awards, and additional PSUs are allocated in proportion to their respective initial PSU awards. Likewise, the CEO’s over-achievement cash and PSUs are allocated in proportion to her target annual cash incentive award and the aggregate initial grant date value of her PSUs.

“Adjusted Sales” are measured as total revenues less revenues generated by the legacy businesses of our former Aeropost subsidiary, and “Adjusted Operating Income” is measured as reported Operating income excluding revenues and expenses associated with the legacy businesses of our former Aeropost subsidiary, excluding an FX liquidity premium added to the price of goods and services sold in Trinidad to mitigate risk related to the illiquidity of the Trinidad dollar, and, for purposes of determining Adjusted Operating Income above a specified threshold, including expenses associated with annual cash incentive awards and performance stock units, or PSUs, up to target amounts but excluding expenses associated with annual cash incentive awards and incremental PSUs payable with respect to achievement of such Adjusted Operating Income above such threshold. In the case of metrics based on growth in Adjusted Sales, if Adjusted Sales measured in U.S. dollars did not meet minimum or target growth percentages, executives could still achieve the same percentage payouts if sales on a constant-currency basis achieved those minimum or target growth percentages. There is no metric based on Adjusted Operating Income as a Percentage of Adjusted Sales or Adjusted Operating Income above a threshold level on a constant-currency basis. As used here, the term “constant-currency basis” refers to the calculation of revenues excluding the impact of foreign currency exchange rate fluctuations. We believe this measure provides a valuable means of evaluating period-to-period Adjusted Sales growth before the impact of foreign currency exchange issues that are outside our executive officers’ control.

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement29


Executive and Director Compensation (continued)

LOGO

In our audited financial statements for the year ended August 31, 2021, Total revenues is the most directly comparable GAAP financial measure to Adjusted Sales and Adjusted Sales determined on a constant-currency basis, and Operating income is the most directly comparable GAAP financial measure to Adjusted Operating Income. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure is contained in Appendix A.

Fiscal 2021 Annual Cash Incentive Awards

To calculate the amount of the annual cash incentive awards earned under the 2021 annual cash incentive award plan up to target levels, if any, we first calculated Adjusted Sales and Adjusted Operating Income. We then determined the highest payout level achieved under growth in Adjusted Sales or Adjusted Operating Income as a Percentage of Adjusted Sales. For fiscal year 2021, we achieved growth in Adjusted Sales of 8.57% and achieved Adjusted Operating Income as a Percentage of Adjusted Sales of 4.25%, both of which were greater than the performance levels required for payment of 100% of the portion of each executive officer’s annual cash incentive award based on corporate performance, which was 80% of target for our executive officers other than Ms. Bahrambeygui and 50% of target for Ms. Bahrambeygui.

In the case of annual cash incentive award opportunities above target levels, the Chief Executive Officer and certain other executives shared an over-achievement pool in an amount equal to 15% of Adjusted Operating Income above the threshold of $125.1 million. Adjusted Operating Income for fiscal year 2021 was $151.7 million, resulting in a pool of $4.0 million, payable in part in cash and in part in additional performance stock units. We then distributed the pool to the Chief Executive Officer and members of the ATF Team in cash and performance stock units based on the allocation formulas described above.

For fiscal year 2021, the Compensation Committee established individual performance metrics for the CEO and approved individual performance metrics for the other Named Executive Officers did not receive salary increases in fiscal year 2019. The Company’s Chief Executive Officer advisedthat were recommended by the Compensation Committee that, in consideration of the challenges facing the Company, she and the Executive Vice Presidents were willing to forgo a cost of living increase to ensure that lower-level employees were able to receive a cost of living increase.

Bonus. In connection with engaging Ms. Bahrambeygui to serve as the Company’s interim and later permanent Chief Executive Officer, the Compensation Committee included a cash bonus component for her compensation to lead the way to a more performance-based culture.CEO. The Compensation Committee has approvedthen confirmed achievement of each of the individual performance goals for each Named Executive Officer against the specific, measurable targets established for each goal. The Compensation Committee determined a weighted average achievement level for each Named Executive Officer up to 100% and multiplied the portion of such Named Executive Officer’s target bonus plan for all executivesbased on achievement of individual performance metrics (50% in the case of the CEO and 20% in the case of the other Named Executive Officers) by such percentage to determine the amount to be paid.

The following table sets forth for fiscal year 2020.2021 the target bonus amount, the annual cash incentive award based on Company performance and the annual cash incentive award based on individual performance earned by each Named Executive Officer:

Named Executive Officer

  Target Annual
Cash Incentive
Award
   Company
Performance up
to Target
   Individual
Performance
   Cash Portion of
Company
Over-
Achievement
   Total Annual
Cash Incentive
Award
 

Sherry Bahrambeygui

  $1,800,000   $900,000   $900,000    $892,603    $2,692,603 

Michael L. McCleary

   141,625    113,300    28,325    151,075    292,700 

William Naylon

   156,250    125,000    31,250    166,676    322,926 

Francisco Velasco

   141,625    113,300    28,325    151,075    292,700 

John Hildebrandt

   131,250    105,000    26,250    140,008    271,258 

Long-Term Incentive Compensation and Performance-based Equity Compensation. We believe that long-term incentives for higher-level executives are consistent with the values and culture of the Company and therefore should be an integral and heavily weighted part of the overall executive compensation program. Direct linkages of executive pay with the Company’s stock price performance encourages and rewards an owner-operator mindset among the Company’s executives and incentivizes executives to take actions that generate long-term sustainable benefits to the Company.

30PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

PriceSmart uses restricted stock and performance stock units as long-term incentive vehicles because:

 

  

restricted stock and the related vesting period help attract and retain executives;

 

  

the value received by the recipient of an award of restricted stock or performance stock units is enhanced as our stock price increases; therefore, restricted stock and performance stock units promote teamwork and collaboration and enhance the executives’ incentives to increase the stock price consistent with stockholders’ interests; and

 

  

restricted stock and performance stock units help to provide a balance to the overall executive compensation program as restricted stock rewards executives for increases in stockholder value over the longer term.

PriceSmart historically has awarded restricted stock with time-based vesting to its Named Executive Officers, but the Compensation Committee determined that performance-based equity is an important tool alongside grants of restricted stock with time-based vesting. The Compensation Committee believes that these two equity instruments—instruments – performance stock units and restricted stock—stock — will work together to provide the Company’s executives a competitive pay opportunity that focuses executives on maximizing stockholder value over the long term.

In fiscal year 2017, the Compensation Committee decided that the Company should make smaller annual grants of restricted stock vesting over a period of three years instead of the larger, periodic grants vesting over five or more years the Compensation Committee had previously made. In moving to annual awards, the Compensation Committee noted that moving to smaller, but more frequent, awards would give the Compensation Committee greater flexibility to adjust awards to take into account:

 

  

an individual’s value to the Company, including any extraordinary skills or characteristics which might warrant special consideration;

 

  

changes in external benchmarks;

 

  

changes in internal benchmarks, addressing morale and fairness issues;

 

  

an individual’s trend in compensation relative to changes in the financial performance of the Company; and

 

  

fiscal responsibility and appropriateness given the short- and long-term performance of the Company.

The Compensation Committee also noted that annual awards would allow the Company to have better fiscal control of the compensation program; would more easily allow for the implementation ofpay-for-performance metrics; and would help prevent hardship or windfall scenarios in the future.

20PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive and Director Compensation (continued)

LOGO

In determining the number of shares of restricted stock and performance stock units to be granted to our Named Executive Officers, the Compensation Committee takes into account the individual’s position, scope of responsibility, ability to affect profits and stockholder value, and the value of restricted stock in relation to other elements of the individual executive’s total compensation and market competitive data. All awards of restricted stock and performance stock units to our executive officers are made by the Compensation Committee.

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement31


Executive and Director Compensation (continued)

LOGO

Fiscal Year 2021 Restricted Stock and Performance Stock Unit Awards

In October 2020 (fiscal year 2021), the Compensation Committee made grants of restricted stock and performance stock units, or PSUs, to the Named Executive Officers. The grants to these Named Executive Officers were comprised of approximately 2/3 restricted stock and 1/3 PSUs with a three-year vesting schedule and the same performance criteria described above. For our Named Executive Officers for fiscal year 2021, the number of shares underlying restricted stock awards and PSU awards at target levels are set forth below.

Named Executive Officer

  Restricted Stock
Awards
   PSUs at Target 

Sherry Bahrambeygui

   34,415    17,208 

Michael L. McCleary

   2,411    1,206 

William Naylon

   5,450    2,725 

Francisco Velasco

   4,167    2,084 

John Hildebrandt

   2,166    1,083 

For fiscal year 2021, the Compensation Committee used the same corporate performance criteria for PSUs at target levels for all executive officers as it did for cash bonuses for executive officers—minimum and target levels for growth in Adjusted Sales (in U.S.$ or on a constant currency basis) and minimum and target levels for achievement in Adjusted Operating Income as a Percentage of Adjusted Sales. In the case of opportunities for PSU achievement above target levels, as noted above, the Chief Executive Officer and certain other executives share an over-achievement pool in an amount equal to 15% of Adjusted Operating Income above the threshold level of $125.1 million, payable partially in cash and partially in additional PSUs.

In the case of opportunities for PSU achievement above target levels, as noted above, the executives earned an over-achievement pool of $4.0 million. This pool was allocated between cash awards and additional PSUs and allocated among the Chief Executive Officer and members of the ATF Team based on the allocation formulas described above. We then compared the dollar value of the portion of the over-achievement pool allocated to additional PSUs with the dollar value of PSUs earned at target to determine the over-achievement percentage. We then multiplied the number of shares covered by a PSU award by such percentage to determine the adjusted number of shares underlying each PSU award. There is no cap (other than limits on awards under the Company’s Amended and Restated 2013 Equity Incentive Award Plan) on over-achievement PSUs. Following satisfaction of performance targets, PSUs effectively become time-vested RSUs that vest over a three-year period from the date of the award.

For our Named Executive Officers for fiscal year 2021, the number of shares underlying PSUs at target performance plus the number of shares earned based on over-achievement performance are set forth below.

Named Executive Officer

  Target PSUs   Performance up
to Target
   Over-Achievement
PSU shares
   Total PSUs 

Sherry Bahrambeygui

   17,208    17,208    10,327    27,535 

Michael L. McCleary

   1,206    1,206    949    2,155 

William Naylon

   2,725    2,725    2,145    4,870 

Francisco Velasco

   2,084    2,084    1,640    3,724 

John Hildebrandt

   1,083    1,083    852    1,935 

Our Named Executive Officers recognize taxable income from restricted stock and performance stock units when and as shares vest. On each vesting date, the Company repurchases a portion of the shares vesting on such vesting date from the participant to cover the tax obligations triggered by the vesting. The Company repurchases the shares at their fair market value on the date

32PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

of vesting and pays this amount directly to the taxing authorities. The Company generally receives a corresponding tax deduction for compensation expense in the year of vesting, subject to limits on the deductibility of compensation in excess of $1.0 million paid to certain executives under Internal Revenue Code Section 162(m). The amount included in the participant’s wages upon such vesting, and, subject to Section 162(m), the amount we may deduct, is equal to the fair market value of a share of Common Stock on the date the shares vest, multiplied by the number of shares vesting.

Other Benefits. PriceSmart’s Named Executive Officers are eligible to participate in all of our employee benefit plans, such as our 401(k) plan and our medical, dental, vision, long and short-term disability and life insurance plans, in each case on the same basis as other employees. We provided our former Chief Executive Officer and President a housing allowance and travel benefits in accordance with his employment agreement, and we reimbursed moving expenses and provided atwo-year housing allowance of $60,000 per yearalso provide LifeLock identity theft protection services for our Chief Financial Offer.executive officers. The Compensation Committee believes that these perquisites are no greater than competitors’ practices.

Fiscal Year 2019 Compensation of Chief Executive Officer

Salary. The Compensation Committee set Ms. Bahrambeygui’s base salary as interim Chief Executive Officer at the outset of that engagement in November 2018 and set her base salary as permanent Chief Executive Officer when she assumed that role on January 30, 2019.

Bonus. Ms. Bahrambeygui’s target bonus for her service as interim Chief Executive Officer was $437,500. The performance criteria set by the Compensation Committee for her interim CEO service consisted of individual objectives with associated target key results relating to strategic plan and process, operating process, organizational process, compensation practices and management development. At the conclusion of her interim service, the Compensation Committee determined that Ms. Bahrambeygui achieved the stated objectives and key results required for achievement of the bonus, and additionally recognized Ms. Bahrambeygui’s extraordinary efforts and devotion of time during her service as interim Chief Executive Officer. The Committee thus approved the payment of the $437,500 bonus.

Ms. Bahrambeygui’s target bonus for her service as Chief Executive Officer for the remaining portion of fiscal year 2019 was $291,800 (which amount represents a pro rata portion of a $500,000 target bonus for the year), consisting of a 50% company financial results component and 50% individual performance objectives. The measurement criteria for the individual objectives and key results were set by the Compensation Committee and were determinable, measurable, and quantifiable operational targets in the following key areas:

Strengthen the Buying organization, a key component of our business

Improve the Member experience and enhance the Membership organization

Improve inventory to better deliver on the Six Rights

Create digital leverage

For fiscal year 2019, upon setting the criteria for the bonus in February, the Compensation Committee concluded that a half year did not provide sufficient time for a new Chief Executive Officer to have a significant impact on the Company’s financial metrics.

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement21


Executive and Director Compensation (continued)

LOGO

Therefore, the Compensation Committee guaranteed the financial portion of this bonus for fiscal year 2019. In October 2019, the Compensation Committee reviewed Ms. Bahrambeygui’s performance relative to her individual objectives and key results and determined that she achieved all of her targets. Accordingly, Ms. Bahrambeygui earned her full target bonus of $291,800.

The Compensation Committee has approved a bonus plan for all executives for fiscal year 2020.

Equity Incentive Awards. The Compensation Committee made grants of performance stock units and restricted stock to Ms. Bahrambeygui in November 2018 (fiscal year 2019) and February 2019 (fiscal year 2019). The grants to Ms. Bahrambeygui in November 2018 were comprised of 2/3 restricted stock and 1/3 performance stock units with the same performance criteria as the other executive officer grants and aone-year vesting schedule. Ms. Bahrambeygui’s February 2019 awards are comprised entirely of restricted stock with time-based vesting because the Compensation Committee determined that it was too late in the fiscal year for Ms. Bahrambeygui to be reasonably expected to materially impact financial metrics such as revenues and operating income for the fiscal year.

Fiscal Year 2019 Compensation of Other Named Executive Officers

Salary. The Named Executive Officers did not receive salary increases in fiscal year 2019. The Company’s Chief Executive Officer advised the Compensation Committee that, in consideration of the challenges facing the Company, she and the Executive Vice Presidents were willing to forgo a cost of living increase to ensure that lower-level employees were able to receive a cost of living increase.

Bonus. Our Named Executive Officers other than our Chief Executive Officer were not eligible for cash bonuses in fiscal year 2019.

Equity Incentive Awards. The Compensation Committee made grants of performance stock units and restricted stock to our Named Executive Officers other than our Chief Executive Officer in October 2018 (fiscal year 2019). The performance criteria for the PSUs would be satisfied for all shares underlying the award upon a 3% increase in revenues or operating income in fiscal year 2019 compared to fiscal year 2018 determined on a GAAP basis and would be satisfied for 50% of the shares upon a 3% increase in revenues in fiscal year 2019 compared to fiscal year 2018 determined on a constant currency basis. As used here, the term “constant currency basis” refers to the calculation of revenues excluding the impact of foreign currency exchange rate fluctuations. We believe this measure provides a valuable means of evaluatingperiod-to-period revenue growth before the impact of foreign currency exchange issues that are outside our executive officers’ control. After the end of fiscal year 2019, the Compensation Committee determined that the Company had not achieved the GAAP-based targets but had exceeded 3% growth in revenues measured on a constant-currency basis. Accordingly, the executive officers earned 50% of the PSUs granted, subject to multi-year vesting.

Following satisfaction of performance targets, in whole or in part, the portion of the PSU for which the performance target has been achieved vests in three annual installments in October 2019, October 2020 and October 2021, subject to the recipient’s continued employment through those vesting dates. To the extent performance-vesting and time-vesting requirements are met, PSUs are settled and paid in shares of common stock (net of shares withheld for taxes). PSUs have dividend equivalents, but payment of such amounts will be subject to satisfaction of the performance criteria.

Peer Group

The Compensation Committee establishes individual executive compensation at levels the Compensation Committee believes are comparable with those of executives in other companies of similar size and stage of development operating in retail industries, taking into account our own strategic goals and our relative performance. Management utilized Equilar Inc.’s Executive Insight research database, a resource for referencing executive compensation and analyzing executive pay trends

22PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive and Directorthe Aon TCM (Total Compensation (continued)

LOGO

based on information Equilar gathers from proxy statements and reports filed withMeasurement) Survey, the Securities and Exchange Commission,Mercer Benchmark Database and additional competitive information provided by our compensation consultant.

PriceSmart is the largest operator of membership warehouse clubs in Latin America and the Caribbean. We are incorporated and headquartered in the U.S., but the large majority of our retail and operational footprint is international. The Company operates in 13 different countries and territories, each with unique characteristics and a variety of currencies, and tax and legal regimes, and sometimes in challenging geopolitical markets. We seek to maximize the value of PriceSmart membership to members by operating alow-margin model focused on providing the best possible value on high-volume products, which are tailored to a large and exclusively international member base. This requires our management team to focus on purchasing, supply chain and other operational efficiencies.

There are few publicly traded companies in the U.S. that have a similar profile to PriceSmart’s in terms of operating model, customer focus and geographic footprint. The complexities of our business show up in our daily operations in navigating different local and international laws, local customs and preferences, political changes and foreign currency conversions. We are not like many traditional retailers, which is evidenced to a degree by the fact that only one public company in the U.S.—BJ’s Wholesale Club—Club – names PriceSmart as a peer company in its proxy. The other most directly comparable company to PriceSmart is Costco Wholesale Corporation, whose size relative to PriceSmart’s makes comparisons impractical for executive compensation purposes.

In developing a peer group for executive pay purposes, we started with a premise that a diverse set ofUS-based retailers and grocers would be most reflective—reflective — though not fully reflective—reflective — of our Company’s business focus and managerial complexity, as well as the market within which we compete for executive-level talent. In April 2019,July 2020, the Compensation Committee, with advice from its independent executive compensation consultant, approved an executive pay peer group made up of the 21US-based retailers and grocers listed below. The Company will use thisused the peer group to monitor competitive pay levels for executives and as a reference when evaluating our effectiveness and appropriatenessevaluate fiscal year 2021 compensation decisions. Although each of our executive compensation programs and practices. However,the peer companies features at least one aspect of the Company’s business, the Compensation Committee noted that no single company identified as a peer has all of the key characteristics of PriceSmart, but each has some of the attributes.international operations, both brick and mortar and ecommerce sales, and a low-margin model focused on sourcing and selling products in high volumes. As a result, the Compensation Committee will monitor and adjust this peer group from time to time to ensure continuing relevance with our company size, the complexities associated with our international footprint, our mix of brick and mortar and ecommerce sales, our business strategy and our executive talent needs.

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement33


Executive and Director Compensation (continued)

LOGO

The executive pay peer group consists of the following companies:

 

Abercrombie and Fitch

  

Fossil

Five Below
  

Sprouts Farmers Market

Big Lots

  

Fossil

StitchFix
BJ’s Wholesale ClubFresh Del Monte Produce

  

StitchFix

The Andersons

BJ’s Wholesale Club

Burlington Stores
  

Guess?

  

The Andersons

Chefs’ Warehouse

Burlington Stores

Chewy
  

Ingles Market

  

The Chefs’ Warehouse

ULTA

Dillard’s

  

Mercado Libre

  

ULTA

Village Super Market

Designer Brands f/k/a DSW

  

Neiman Marcus Group

Revlon
  

Village Super Market

Five Below

Smart and Final Stores

Weis Markets

These companies were identified based on the following criteria:

 

  

Consumer staples and consumer durables. The Compensation Committee assigned priority to companies in the consumer staples and consumer durables sectors.

Comparable scale by revenue to PriceSmartand market capitalization.At.At the time the Compensation Committee established the peer group, the 21 companies reported annual revenue ranging roughly from 0.4x0.3x to 2.5x3.0x PriceSmart’s fiscal year 2018trailing twelve months revenue as of $3.2 billion.July 2020 of $3.3 billion and had market capitalizations of 0.3 to 3.0x PriceSmart’s 30-day average market capitalization of $1.8 billion as of July 3, 2020.

Comparable companies used by proxy advisors. In identifying the peer group, the Compensation Committee took note of the criteria proxy advisors will apply when determining their “Say on Pay” recommendations.

Sustainable growth. The Compensation Committee assigned priority to comparable companies that demonstrated opportunities for sustained growth in revenue and profitability without over- or under-extending.

 

  

Significant international presence.The peer group shows a preference for retailers and grocers with a strong international presence to reflect the complexities that PriceSmart faces in its international operations. PriceSmart’s international orientation is among the highest of its peer group at 100% of sales from outside the U.S.

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement23


Executive and Director Compensation (continued)

LOGO

 

  

Comparability to PriceSmart’s membership-based, club model.The Compensation Committee assigned priority to potential peers that have membership-based or loyalty-type programs. Consideration is also given to operating margins and the intensiveness of supply chain and logistics, more broadly.

 

  

Comparability in store format.Companies with larger store formats were prioritized over those retailers with more, but smaller, store formats.

ForThis peer group for fiscal year 2018,2021 compensation decisions is the same as the group the Compensation Committee compared our Named Executive Officers’used for fiscal year 2020 compensation to compensation of executives at public companies Institutional Shareholder Servicesdecisions, except that Neiman Marcus Group and Smart & Final Stores, which were included in its most recent benchmarking analysisthe peer group for PriceSmart. For fiscal year 2018, ISS used a peer group comprised of the 16 public2020 compensation decisions, are no longer included because they ceased to be SEC reporting companies in 2019. Based on the same SIC code as PriceSmart, with revenues between $1.6 billion and $8 billion and employees between 1,500 and 40,000. The Compensation Committee adopted the same group, except that it excluded Sears Hometown & Outlet Stores, Inc. becauserecommendation of its then-recent bankruptcy filing. Upon further consideration in April 2019,Aon, the Compensation Committee determined that theadded Chewy and Revlon to its peer group identified aboveto replace the two companies that dropped out. These companies were selected because they were deemed to be the “best fit” in terms of financial profile and business/product focus.

Aon also provided to the Compensation Committee published survey data capturing public cash and equity compensation data. Survey data is collected from the Aon TCM (Total Compensation Measurement) Survey with the following data cuts — consumer staples and durables companies with between $1 billion and $10 billion in annual revenues and market capitalizations between $600 million and $5.3 billion.

To determine market-competitive executive pay levels, Aon weighted named peer proxy data at 50% and broad survey data at 50% to create a more appropriatecompetitive market composite.

34PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and relevant comparison than the ISS peer group because most of the companies in the ISS peer group did not have an international component and none featured a membership format.Director Compensation (continued)

LOGO

For fiscal year 2019,2021, as a part of its compensation program review process, the Compensation Committee assessed base salary, target annual cash incentive opportunity, target total cash compensation, annual long-term incentive delivery, retention analysis and the total target pay opportunitiesCompany’s current aggregate equity usage compared to peer group and mix of compensation elements—overall and by pay element—for those serving as Named Executive Officers at the beginning of the year against general industry compensation data provided by Semler Brossy.survey data. The Compensation Committee noted substantial variation between the compensation levels and pay mix of similarly situated executives, particularly when evaluating the competitiveness of the Company’s long-term incentive awards. After evaluating PriceSmart’s target pay opportunities against these external benchmarks, the Compensation Committee determined that target pay opportunitiessalaries are competitive at market median (with some individual variation), annual cash incentive opportunity significantly lags the market for ourthe Named Executive Officers were, in aggregateother than the CEO (whose annual cash incentive opportunity falls between the 50th and generally on an individual basis, below75th percentiles), long-term incentives are at the low end of the competitive midpoints.market and total direct compensation (i.e., cash plus equity) is at the low end of the competitive market.

Additionally,The Compensation Committee believes that where it is reasonable and practical, the competitiveness of the Company’s executive compensation should be determined by comparing total remuneration to average performance at approximately the 50th percentile of a peer group and general market survey. However, the Compensation Committee evaluated Ms. Bahrambeygui’s target pay opportunity againstrecognizes that it is in PriceSmart’s interest to recognize the setcomplexities of companies identified as the Company’s peer groupretail global market, and accordingly, our compensation needs to reflect the need to attract and retain superior talent to address the complexities of our markets. Further, to the extent individual and company performance exceeds expectations, compensation should follow. For example, if top quartile performance is achieved, compensation should likewise be in its Proxy Statement for 2019 Annual Meeting of Stockholders upon her appointment as interim Chief Executive Officer and against thego-forward peer group described above upon her appointment as Chief Executive Officer. The evaluation process that the Compensation Committee took upon the appointment of Ms. Bahrambeygui as interim Chief Executive Officer and as Chief Executive Officer is similar to that used for other Named Executive Officers. Ms. Bahrambeygui’s target pay opportunity for fiscal year 2019 was less than the median for the 21 peer companies listed above.

Based on the objectives outlined above, the Compensation Committee strives to set target total compensation opportunity levels and the individual components of compensation to be competitive with the market in which we compete for executive talent. The Compensation Committee does not, however, target any specific percentile of market compensation levels.top quartile.

Compensation data for the peer group of companies isand survey data are among only onetwo of the many factors the Compensation Committee considers in setting compensation for PriceSmart’s Named Executive Officers, and actual compensation may vary based on the Compensation Committee’s review of other considerations, including the Company’s and the individual Named Executive Officer’s performance and the value of the executive’s leadership and other skills to the Company.

In connection with setting compensation levels for fiscal year 2022, the Compensation Committee noted the increasing complexity of the Company’s business as it moves toward an omni-channel model and the resulting need to retain and attract senior executives with digital technology expertise or that otherwise have the necessary skills and experience to fuel the Company’s growth. Accordingly, for fiscal year 2022, the Compensation Committee has increased salaries, annual cash incentive opportunities and long-term incentives for executives, where appropriate, to bring them in line with the 50th percentile for total compensation for executives as shown in the peer group data and the general market survey.

Severance and Change in Control Payments

We have entered into agreements and maintain plans that require us to make payments and/or provide benefits to our Named Executive Officers under specified circumstances in the event of a termination of their employment without cause, resignation for “good reason” or a change in control. We provide for certain severance benefits inour providing notice of our intent not to renew the event that a Named Executive Officer’s employment is involuntarily terminated.agreement at the end of then-current term. Such severance benefits are designed to alleviate the financial impact of an involuntary termination through salary continuation and are intended to provide for a stable work environment. We believe that reasonable severance benefits for our

24PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive and Director Compensation (continued)

LOGO

Named Executive Officers are important because it may be difficult for our executive officers to find comparable employment within a short period of time following certain qualifying terminations. In addition to normal severance, we

We also provide for accelerated vesting of the time-based component of all equity awards for all employees in the event of a change in control as a means of reinforcing and encouraging the continued attention and dedication of our employees to their duties of employment without personal distraction or conflict of interest in circumstances which could arise from the occurrence of a change in control. We believe that the interests of stockholders will be best served if the interests of our senior management are aligned with them, and providing thesechange-in-control benefits should eliminate, or at least reduce, the reluctance of senior management to pursue potential change in control transactions that may be in the best interests of stockholders.

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement35


Executive and Director Compensation (continued)

LOGO

The Company provides severance continuity andchange-in-control benefits because they are essential to help us fulfill our objectives of attracting and retaining key managerial talent. These agreements are intended to be competitive with those of similarly sized companies in our industry and company size and to attract and retain highly qualified individuals. While these arrangements form an integral part of the total compensation provided to these individuals and are considered by the Compensation Committee when determining executive officer compensation, the decision to offer these benefits did not influence the Compensation Committee’s determinations concerning other direct compensation or benefit levels.

Say-on-Pay Feedback from Stockholders

At our 20192021 Annual Meeting of Stockholders, we sought an advisory vote from our stockholders regarding our executive compensation program and received a 98.4%91.2% favorable vote supporting the program, excluding abstentions and brokernon-votes. For fiscal year 2019,2021, the Compensation Committee considered the results of the advisory vote as part of its annual review of the compensation provided to our Named Executive Officers and other executives. The Compensation Committee will continue to consider the outcome of oursay-on-pay votes when making future compensation decisions for the Company’s executive officers.

Stock Ownership Guidelines and Hedging and Pledging Prohibition

To further align executive and stockholder interests, we have adopted stock ownership guidelines for our executives andnon-employee directors. The guidelines require our Chief Executive Officer to hold Common Stock with a value of at least five times his or her base salary and our other executive officers to hold Common Stock with a value of at least one times their respective base salaries. The guideline fornon-employee directors is onethree times their annual cash compensation.compensation (excluding additional fees, if any, payable for service on any Board committee). Until such time as an executive ornon-employee director satisfies the minimum ownership requirement set forth herein, such executive ornon-employee directors is required to hold 50% of the equity awards (net of amounts required to satisfy any applicable tax obligations arising in connection with the exercise or vesting of any equity award) granted by the Company on or after the date such executive ornon-employee director becomes subject to these guidelines. guidelines (“Covered Equity Awards”). All in-the-money vested stock options, unvested time-based restricted stock, unvested time-based restricted stock units, and performance awards for which performance criteria have been met but that remain subject to time-based vesting shall satisfy the stock ownership guidelines without reduction for any portion of an award that may be subject to forfeiture to satisfy tax withholding that may be triggered upon vesting. The guidelines do not restrict an executive or non-employee director’s sale of shares that he or she held prior to becoming subject to these guidelines or that the executive or non-employee director acquired in any manner other than through Covered Equity Awards; provided that an executive or non-employee director may, at his or her sole option, elect to have the Company take into account shares that he or she held prior to becoming subject to the guidelines or that he or she acquired in any manner other than through Covered Equity Awards.

After an executive ornon-employee director satisfies the minimum ownership requirement as of a measurement date, he or she will be deemed to be in compliance with the stock ownership guidelines notwithstanding subsequent changes in the value of his or her stock ownership, so long asshares. If an executive or non-employee director sells or otherwise disposes of any shares or receives an increase in compensation, his or her compliance will be re-evaluated at the end of the fiscal year. In addition, for purposes of determining the number of shares deemed held does not decrease (as countedthat may be sold in a fiscal year, an executive’s or non-employee director’s shares will be valued at the greater of the closing price on the last trading day of the last fiscal year and the closing price on the trading day prior to a proposed sale. If he or she has fallen under the required ownership level as of the end of the fiscal year, he or she can only sell 50% of any Covered Equity Awards (net of amounts required to satisfy any applicable tax obligations arising in connection with the exercise or vesting of any equity award) that vest once he or she has fallen under the required ownership level unless (i) he or she held shares prior to becoming subject to these guidelines or he or she acquired shares in any manner other than pursuant to Covered Equity Awards and (ii) he or she elects to have such shares included in the compliance calculation to permit greater sales of Covered Equity Awards. Notwithstanding the foregoing, valuation methodology). regardless of the state of their compliance with the applicable minimum ownership requirement, executives and non-employee directors may immediately sell shares (i) acquired upon the exercise of

36PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

stock options for the limited purposes of paying the exercise price of the stock option, and (ii) to satisfy any applicable tax obligations arising in connection with the exercise or vesting of any equity award.

The Compensation Committee has the discretion to waive compliance with these guidelines on a case-by-case basis for any executive officer, and the Board of Directors has the discretion to waive compliance with these guidelines on a case-by-case basis for any non-employee director, who, due to his or her particular financial circumstances or other special circumstances, would incur a hardship by complying with these guidelines.

In addition to the minimum stock ownership requirements, we do not allow our executive officers ornon-employee directors to enter into any hedging, pledging or monetization transactions involving our Common Stock.

Recoupment Policy

We adopted a Compensation Recoupment Policy effective as of September 19, 2017. The recoupment (or “clawback”) policy provides the Compensation Committee with broad discretion to recoup certain incentive awards made to the Company’s executive officers when it determines that (1) an executive engaged in serious misconduct or failed to supervise a subordinate employee who engaged in serious misconduct which the executive knew, or was reckless in not knowing, was occurring, and (2) such misconduct resulted in a material violation of law or a written Company policy that caused significant financial or

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement25


Executive and Director Compensation (continued)

LOGO

reputational harm to the Company. This clawback policy is broader than current and expected regulatory requirements. The policy can be found on the Corporate Governance section of our website.

Compensation Committee Report

We have reviewed and discussed with management the Compensation Discussion and Analysis required to be included in this Proxy Statement. Based on the reviews and discussions referred to above, we recommend to the Board of Directors that the Compensation Discussion and Analysis referred to above be included in our Proxy Statement.

The foregoing has been furnished by the Compensation Committee.

Beatriz Infante

Jeffrey Fisher

Leon C. Janks

Gary Malino

David R. Snyder

 

26PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement37


Executive and Director Compensation (continued)

 

LOGO

 

Executive Compensation

Summary of Compensation

The following table sets forth the compensation for fiscal year 20192021 by any person who served as our Chief Executive Officer or Chief Financial Officer during the fiscal year and the three other most highly compensated executive officers who were serving as executive officers at August 31, 2019.2021. These persons are referred to as the Company’s “Named Executive Officers” elsewhere in this Proxy Statement.

 

       

Name and Principal  Position

 

   

 

Fiscal Year

 

 

 

  

 

Salary
($)

 


 

 

   

 

Bonus
($)

 


 

 

  

 

Stock
Awards
($)
(1)

 



 

 

   


 

Non-Equity
Incentive Plan
Compensation
($)

 




 

 

   

 

All Other
Compensation
($)

 



 

 

   

 

Total ($)

 

 

 

Sherry Bahrambeygui

            

—Chief Executive Officer and President(2)

 

 

  
  

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

$755,208

 

 

 

 

  

 

 

 

 

$729,300

 

 

 

 

 

 

 

 

 

$4,428,493(3)

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

$ 68,195(4)

 

 

 

 

  

 

 

 

 

$5,981,196

 

 

 

 

José Luis Laparte

            

—Former Chief Executive Officer and President(5)

 

 

  
  

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

256,101

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

646,608(6)

 

 

 

 

  

 

 

 

 

902,709

 

 

 

 

  

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

762,654

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

117,614(6)

 

 

 

 

  

 

 

 

 

880,268

 

 

 

 

  

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

745,925

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

130,390(6)

 

 

 

 

  

 

 

 

 

876,315

 

 

 

 

Maarten O. Jager

            

—Executive Vice President and Chief Financial Officer

 

 

  
  

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

600,000

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

395,442

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

174,641(7)

 

 

 

 

  

 

 

 

 

1,170,083

 

 

 

 

  

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

186,538

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

2,462,887

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

124,189(7)

 

 

 

 

  

 

 

 

 

2,773,614

 

 

 

 

William J. Naylon

            

—Executive Vice President and Chief Operating Officer

 

 

  
  

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

591,259

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

611,312

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

28,813(8)

 

 

 

 

  

 

 

 

 

1,231,384

 

 

 

 

  

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

543,526

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

35,277(8)

 

 

 

 

  

 

 

 

 

578,803

 

 

 

 

  

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

531,603

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

38,243(8)

 

 

 

 

  

 

 

 

 

569,846

 

 

 

 

Francisco Velasco

            

—Executive Vice President, Secretary and General Counsel

 

 

  
  

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

550,000

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

101,445

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

16,395(9)

 

 

 

 

  

 

 

 

 

667,840

 

 

 

 

  

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

427,579

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

422,369

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

16,422(9)

 

 

 

 

  

 

 

 

 

866,370

 

 

 

 

  

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

418,201

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

237,091(9)

 

 

 

 

  

 

 

 

 

655,292

 

 

 

 

John Hildebrandt

            

—Executive Vice President

 

 

  
  

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

465,698

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

101,765

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

18,883(10)

 

 

 

 

  

 

 

 

 

586,346

 

 

 

 

  

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

421,418

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

20,947(10)

 

 

 

 

  

 

 

 

 

442,365

 

 

 

 

  

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

411,835

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

23,623(10)

 

 

 

 

  

 

 

 

 

435,458

 

 

 

 

       

Name and Principal Position

  Fiscal Year    

Salary

($)

 

 

   

Bonus

($)

 

 

  

Stock

Awards

($)(1)

 

 

 

  

Non-Equity

Incentive Plan

Compensation

($)

 

 

 

 

   

All Other

Compensation

($)

 

 

 

   Total ($) 

Sherry Bahrambeygui

           

—Chief Executive Officer and President(2)

 

  
  2021    $1,200,000    $ —     $3,576,958   $2,692,603    $80,552(4)    $7,550,113 
  2020    925,000    500,000   3,718,415   1,032,500    70,161(4)    6,246,076 
  2019    755,208    729,300   4,428,493(3)   —      68,195(4)    5,981,196 

Michael L. McCleary

 

  

—Executive Vice President And Chief Financial Officer(5)

 

  
  2021    566,500    —     250,622   292,700    27,949(6)    1,137,771 
  2020    371,754    150,000   804,235   106,500    25,705(6)    1,458,194 

William J. Naylon

 

  

—Executive Vice President and Chief Operating Officer

 

  
  2021    625,000    —     566,446   322,926    26,539(7)    1,540,911 
  2020    577,500    —     881,882   127,800    28,573(7)    1,615,755 
  2019    591,259    —     611,312   —      28,813(7)    1,231,384 

Francisco Velasco

 

  

—Executive Vice President, Secretary and General Counsel

 

  
  2021    566,500    —     433,132   292,700    25,858(8)    1,318,190 
  2020    529,375    —     711,430   117,150    23,086(8)    1,381,041 
  2019    550,000    —     101,445   —      16,395(8)    667,840 

John Hildebrandt

 

  

—Executive Vice President

 

  
  2021    525,000    —     225,123   271,258    25,372(9)    1,046,753 
  2020    456,225    —     517,336   100,962    21,370(9)    1,095,893 
  2019    465,698    —     101,765   —      18,883(9)    586,346 
(1) 

Represents the aggregate grant date fair value of the restricted stock awards and performance stock units granted to the Named Executive Officers in the relevant fiscal year in accordance with FASB Accounting Standards Codification ASC 718, “Share-Based Payment” (“ASC 718”). For information regarding assumptions made in connection with this valuation, please see Note 7 Stock Based Compensation to the consolidated financial statements included in the Company’s Annual Report on Form10-K for the year ended August 31, 2019,2021, filed with the SEC on October 29, 2019. Restricted stock awards and restricted stock units have not been granted on an annual basis.21, 2021.

(2) 

Ms. Bahrambeygui was appointed interim Chief Executive Officer effective November 16, 2018 and became Chief Executive Officer on January 30, 2019.

(3) 

Excludes $1,549,676 in grant value of stock awards forfeited by Ms. Bahrambeygui in connection with her moving from interim to permanent Chief Executive Officer. In February 2019, Ms. Bahrambeygui and the Compensation Committee agreed to terminate continued vesting of the stock awards made to her in connection with her becoming interim Chief Executive Officer and replace such

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement27


Executive and Director Compensation (continued)

LOGO

awards with new awards appropriate for her becoming permanent CEO. As a result, Ms. Bahrambeygui vested in only the pro rata portion of the awards made to her as interim Chief Executive Officer associated with the period during which she served in that role.

(4) 

RepresentsFor fiscal year 2021, includes dividend payments of $58,024 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $17,400. For fiscal year 2020, represents dividend payments of $53,061 on unvested restricted stock awards

38PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

and 401(k) contributions made by the Company totaling $17,100. For fiscal year 2019, represents dividend payments of $29,035 on unvested restricted stock awards, 401(k) contributions made by the Company totaling $11,200 and a transition payment of $27,960.

(5) 

Mr. Laparte resigned asMcCleary was appointed interim Chief ExecutiveFinancial Officer effective December 10, 2019 and President and as a directorbecame Chief Financial Officer effective November 16, 2018.April 1, 2020.

(6) 

For fiscal year 2019, represents housing allowance2021, includes dividend payments totaling $50,004,of $8,668 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $4,558, vacation payout of $79,843 and severance of $512,203.$17,380. For fiscal year 2018,2020, represents dividend payments of $52,123$5,556 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $11,000, housing allowance payments totaling $50,004 and $4,487 for the cost of airline tickets for Mr. Laparte and his family and the related taxgross-up. For fiscal year 2017, represents dividend payments of $60,942 on unvested restricted stock awards, 401(k) contributions made by the Company totaling $10,800, housing allowance payments totaling $50,004 and $8,644 for the cost of airline tickets for Mr. Laparte and his family and the related taxgross-up.$20,149.

(7) 

For fiscal year 2019, represents2021, includes dividend payments of $13,084$13,573 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $16,700, a housing allowance of $60,000 on a grossed up basis and a tax gross up payment of $84,857 related to reimbursement of relocation expenses.$12,642. For fiscal year 2018,2020, represents dividend payments of $15,673 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $4,400. Also includes, a housing allowance of $20,000 on a grossed up basis and reimbursement of relocation expenses of $99,789.

(8)

$12,900. For fiscal year 2019, represents dividend payments of $17,613 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $11,200. $12,900.

(8)

For fiscal year 2018, represents2021, includes dividend payments of $24,277$8,894 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $11,000.$16,321. For fiscal year 2017,2020, represents dividend payments of $27,443$7,561 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $10,800.

(9)

$15,525. For fiscal year 2019, represents dividend payments of $5,195 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $11,200.

(9)

For fiscal year 2018, represents2021, includes dividend payments of $5,422$6,873 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $11,000.$18,275. For fiscal year 2017,2020, represents dividend payments of $6,196$7,995 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $10,800. For fiscal year 2017, also includes reimbursed costs, on a grossed up basis, of $43,964 for moving expenses and temporary housing during the moving process, and an additional payment of $176,131 to Mr. Velasco to offset the cost of financing his San Diego residence.

(10)

$13,375. For fiscal year 2019, represents dividend payments of $7,683 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $11,200. For fiscal year 2018, represents dividend payments of $9,947 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $11,000. For fiscal year 2017, represents dividend payments of $12,823 on unvested restricted stock awards and 401(k) contributions made by the Company totaling $10,800.

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement39


Executive and Director Compensation (continued)

LOGO

Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended August 31, 20192021 to the Named Executive Officers.

 

     

 

Estimated Payouts under

Equity Incentive Plan Awards

 

  

All Other
Stock Awards:

Number of
Shares

 

    
   Name

 

 

Grant Date

 

  

Threshold (#)

 

  

Target (#)

 

  

Maximum (#)

 

  

Grant Date Fair Value
Stock and Option  ($)(1)

 

 

 

  Sherry Bahrambeygui

 

 

 

 

 

 

11/16/2018(2)

 

 

 

 

 

 

 

 

 

1,004

 

 

 

 

 

 

 

 

 

2,007

 

 

(4) 

 

 

 

 

 

 

2,007

 

 

(4) 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

$132,281

 

 

(4) 

 

 

 

 

 

 

11/16/2018(3)

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

4,074

 

 

(5) 

 

 

 

 

 

 

266,738

 

 

(5) 

 

 

 

 

 

 

03/06/2019(3)

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

63,130

 

 

 

 

 

 

 

 

 

4,027,694

 

 

 

 

 

  José Luis Laparte

 

  

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

  Maarten O. Jager

 

 

 

 

 

 

10/23/2018(2)

 

 

 

 

 

 

 

 

 

1,371

 

 

 

 

 

 

 

 

 

2,741

 

 

 

 

 

 

 

 

 

2,741

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

219,636

 

 

 

 

 

 

 

 

 

10/23/2018(3)

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

2,194

 

 

 

 

 

 

 

 

 

175,805

 

 

 

 

 

  William J. Naylon

 

 

 

 

 

 

10/23/2018(2)

 

 

 

 

 

 

 

 

 

1,789

 

 

 

 

 

 

 

 

 

3,578

 

 

 

 

 

 

 

 

 

3,578

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

286,705

 

 

 

 

 

 

 

 

 

10/23/2018(3)

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

4,051

 

 

 

 

 

 

 

 

 

324,607

 

 

 

 

 

  Francisco Velasco

 

 

 

 

 

 

10/23/2018(2)

 

 

 

 

 

 

 

 

 

445

 

 

 

 

 

 

 

 

 

889

 

 

 

 

 

 

 

 

 

889

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

71,236

 

 

 

 

 

 

 

 

 

10/23/2018(3)

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

377

 

 

 

 

 

 

 

 

 

30,209

 

 

 

 

 

  John Hildebrandt

 

 

 

 

 

 

10/23/2018(2)

 

 

 

 

 

 

 

 

 

198

 

 

 

 

 

 

 

 

 

396

 

 

 

 

 

 

 

 

 

396

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

31,731

 

 

 

 

 

 

 

 

 

10/23/2018(3)

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

—  

 

 

 

 

 

 

 

 

 

874

 

 

 

 

 

 

 

 

 

70,034

 

 

 

 

28PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive and Director Compensation (continued)

LOGO

    

Estimated Future Payouts under

Non-Equity Incentive Plan Awards(1)

  

Estimated Future Payouts under

Equity Incentive Plan Awards

  

All Other
Stock Awards:

Number of
Shares

  

Grant Date Fair
Value Stock and
Option ($)(3)

 
  Name Grant
Date
 Threshold
($)
  Target
($)
  Maximum
($)
  Threshold
(#)
  Target
(#)
  Maximum
(#)(2)
 
  Sherry Bahrambeygui

 

       
   $900,000   $1,800,000   N/A      
   N/A   540,722   N/A      
 10/12/2020(4)   —     —��    8,604   17,208   N/A   —     $1,192,342 
 10/12/2020(5)   —     —     —     —     —     34,415   2,384,615 
  Michael L. McCleary

 

       
   $70,813   $141,625   N/A      
   N/A   91,508   N/A      
 10/12/2020(4)   —     —     603   1,206   N/A   —     83,564 
 10/12/2020(5)   —     —     —     —     —     2,411   167,058 
  William J. Naylon

 

       
   $78,125   $156,250   N/A      
   N/A   100,958   N/A      
 10/12/2020(4)   —     —     1,363   2,725   
N/A
 
  —     188,815 
 10/12/2020(5)   —     —     —     —     —     5,450   377,631 
  Francisco Velasco

 

       
   $70,813   $141,625   N/A      
   N/A   91,508   N/A      
 10/12/2020(4)   —     —     1,042   2,084   
N/A
 
  —     144,400 
 10/12/2020(5)   —     —     —     —     —     4,167   288,731 
  John Hildebrandt

 

       
   $65,625   $131,250   N/A      
   N/A   84,804   N/A      
 10/12/2020(4)   —     —     542   1,083   
N/A
 
  —     75,041 
 10/12/2020(5)   —     —     —     —     —     2,166   150,082 
(1)

The amounts in the columns under “Estimated Future Payouts under Non-Equity Incentive Plan Awards” represent (i) our named executive officers’ threshold and target annual cash incentive awards for fiscal 2021 for individual performance and corporate performance up to target pursuant to the 2021 bonus plan and (ii) an estimate of the amounts the named executive officers would receive for fiscal 2021 for corporate over-achievement performance. In accordance with Instruction 2 to Item 402(d) of Regulation S-K, the estimated amounts are the amounts the named executive officers would receive under the 2021 bonus plan for corporate over-achievement assuming the previous fiscal year’s performance. The annual cash incentive awards are further described in the “Elements of Compensation” section of the “Compensation Discussion and Analysis.” In fiscal year 2021, the Company achieved growth in Adjusted Sales of 8.57%, resulting in satisfaction of the performance criteria at the 100% level for purposes of determining annual cash incentive awards for corporate performance up to target. In the case of annual cash incentive award opportunities based on corporate performance above target, the Chief Executive Officer and certain other executives shared an over-achievement pool in an amount equal to 15% of Adjusted Operating Income above the threshold of $125.1 million. Adjusted Operating Income for fiscal year 2021 was $151.7 million, resulting in a pool of $4.0 million, payable approximately 60% in cash and 40% in additional performance stock units.

(2)

See Note 1. Performance stock unit awards were subject to upward adjustment if the Company achieved Adjusted Operating Income above the threshold of $125.1 million

(3) 

Represents the aggregate grant date fair value of the restricted stock awards and performance stock units granted to the Named Executive Officers in the relevant fiscal year in accordance with FASB Accounting Standards Codification ASC 718, “Share-Based Payment” (“ASC 718”). For information regarding assumptions made in connection with this valuation, please see Note 7 Stock-Based Compensation to the consolidated financial statements included in the Company’s Annual Report on Form10-K for the year ended August 31, 2019,2021, filed with the SEC on October 29, 2019.21, 2021.

40PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

(2)(4) 

Award of performance stock units subject to vesting upon the Company’s achievement of revenue or operating income targets specified by the Compensation Committee for fiscal year 2019. If2021. In fiscal year 2021, the performance targets are notCompany achieved but would have been achieved on a constant-currency basis,growth in Adjusted Sales of 8.57%, resulting in satisfaction of the performance criteria will be deemed met with respect to halfat the 100% level. In the case of the shares covered by an award. In fiscal year 2019, the Company achieved the performance criteria on a constant-currency basis only; thus, only 50% of the awards granted were earned and will vest in accordance with the NEO’s vesting schedule.

(3)

Award of restricted stock with time-based vesting.

(4)

Excludes 7,759 performance stock units having a grant date fair value of $511,396 that were awarded to Ms. Bahrambeygui as interim Chief Executive Officer that were canceled atunit opportunities based on corporate performance above target, the end of her service in that role. In February 2019, Ms. Bahrambeygui and the Compensation Committee agreed to terminate continued vesting of the stock awards made to her in connection with her becoming interim Chief Executive Officer and replace such awards with new awards appropriatecertain other executives shared an over-achievement pool in an amount equal to 15% of Adjusted Operating Income above the threshold of $125.1 million. Adjusted Operating Income for her becoming permanent CEO.fiscal year 2021 was $151.7 million, resulting in a pool of $4.0 million, payable approximately 60% in cash and 40% in additional performance stock units.

(5) 

Excludes 15,753Award of restricted stock units having a grant date fair value of $1,038,280 that were awardedsubject to Ms. Bahrambeygui as interim Chief Executive Officer that were canceled at the end of her service in that role. In February 2019, Ms. Bahrambeygui and the Compensation Committee agreed to terminate continued vesting of the stock awards made to her in connection with her becoming interim Chief Executive Officer and replace such awards with new awards appropriate for her becoming permanent CEO.vesting.

Employment Contracts

On January 30, 2019, the Board of Directors of the Company appointed Sherry S.Ms. Bahrambeygui as the Company’s Chief Executive Officer. Ms. Bahrambeygui had held that position in an interim role since November 16, 2018. On March 4, 2019, the Company and Ms. Bahrambeygui entered into a new Employment Agreement, which superseded the Employment Agreement between the Company and Ms. Bahrambeygui dated November 20, 2018 relating to Officer

Ms. Bahrambeygui’s service as interim Chief Executive Officer. In October 2019, the Compensation Committee corrected the vesting schedule for the bridge grant of restricted stock described below and increased her target annual bonus for fiscal year 2020 to 100% of her base salary.

The new Employment Agreement provides for a term expiring each August 31, 2020, which will be automatically renewed annually for additionalone-year terms, unless either the Company or Ms. Bahrambeygui provides at least 60 days’ notice that the Company or Ms. Bahrambeygui, as the case may be, wishes to terminate the agreement. The Company may terminate Ms. Bahrambeygui’s employment with cause upon immediate notice or without cause upon 30 days’ prior written notice, or immediately upon Ms. Bahrambeygui’s death or disability. Ms. Bahrambeygui may terminate her employment without “good reason” on 60 days’ prior written notice or with “good reason” upon 30 days’ notice and opportunity for the Company to cure the conditions providing “good reason.”

The Employment Agreement specifies a base salary of $1,000,000 per year, which may be increased, but not decreased, at the Company’s discretion. Ms. Bahrambeygui also received a $27,960one-time payment relating to transition of her compensation from interim to permanent status. The Employment Agreement states that Ms. Bahrambeygui is eligible to participate in the Company’s bonus plan and to receive all other benefits offered to senior executives of the Company under the Company’s benefit practices and plans. As amended, theThe Employment Agreement specifies that for the 2019 fiscal year, Ms. Bahrambeygui iswas eligible to receive a target bonus of $291,800 (which iswas pro-rated based on service for the period commencing January 30, 2019 and ending August 31, 2019), and for the 2020 fiscal year, Ms. Bahrambeygui iswas eligible to receive a target bonus of $1,000,000.

In addition, the Employment Agreement provides that, except as specified below for the 2019 and 2020 fiscal years, Ms. Bahrambeygui will be eligible to receive for each fiscal year ending during the term an annual long-term incentive equity award. The anticipated value of each award will be $2,500,000, with the number of shares subject to the award calculated based on the average closing price per share for the30-day trading period prior to the date of grant. Each award is anticipated to vest approximately: (i) 1/3 based on achievement of performance metrics, such performance metrics to be substantially similar to those applicable to other executive officers; and (ii) 2/3 based on service, such service-based vesting to be substantially similar to the vesting terms applicable to other executive officers. The actual value of the award for any fiscal year and the actual vesting

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement29


Executive and Director Compensation (continued)

LOGO

terms for each such award, however, will be determined by the Compensation Committee of the Company’s Board of Directors in its sole discretion, acting in good faith, with consideration of all applicable facts and circumstances existing at that time.

Pursuant to the Employment Agreement, as amended, Ms. Bahrambeygui received a “bridge grant” of restricted stock of the Company with an aggregate value of $2,500,000 based on the average closing price per share for the30-day trading period prior to the grant date. This award will vest, subject to Ms. Bahrambeygui’s continued employment through each applicable vesting date, in accordance with the following schedule: (A) 30% on August 29, 2019; (B) 45% on August 29, 2020; and (C) 25% on August 29, 2021.

Ms. Bahrambeygui also received an “annual grant” of restricted stock of the Company with an aggregate value of $1,458,900 based on the average closing price per share for the30-day trading period prior to the date of grant. This award vests, subject to Ms. Bahrambeygui’s continued employment through each applicable vesting date, in accordance with the following schedule: (A) 50% on August 29, 2019; (B) 25% on August 29, 2020; and (C) 25% on August 29, 2021.

Ms. Bahrambeygui will be entitled to receive in fiscal year 2020 a grant of restricted stock and performance stock units of the Company with an aggregate value of $2,500,000 based on the average closing price per share for the30-day trading period prior to the grant date. This award will be made, subject to the Compensation Committee’s approval, concurrently with fiscal year 2020 grants to the Company’s executives, but in no event later than April 3, 2020. In considering this award, the Compensation Committee is required to take into account the facts that such award has been agreed in principle following good faith negotiations between Ms. Bahrambeygui and the Company and that Ms. Bahrambeygui entered into the Employment Agreement in reliance of the Compensation Committee’s stated intention to make this award at the time and on the terms contemplated thereby. The 2020 award will vest: (i) 1/3 based on achievement of performance metrics, such performance metrics to be substantially similar to those applicable to other executive officers; and (ii) 2/3 based on service, such service-based vesting to be substantially similar to the vesting terms applicable to the other executive officers.

In connection with Ms. Bahrambeygui’s service as interim Chief Executive Officer, Ms. Bahrambeygui was previously granted awards of restricted stock and performance stock units in the Company. In the case of the Prior Grant of performance stock units, a pro rata portion of the service component of vesting applicable to such performance stock units will be deemed satisfied such that, subject to the Compensation Committee’s determination that the performance criteria for such performance stock units have been satisfied, 2,007 shares subject to such performance stock units will vest upon the Compensation Committee’s making such determination. In the case of the Prior Grant of restricted stock, 4,074 shares will vest as of date of the new Employment Agreement. All other vesting under the Prior Grants ceased effective as of January 29, 2019.

Upon termination of Ms. Bahrambeygui’s employment with the Company for any reason, she will be entitled to receive any earned but unpaid base salary, unpaid expense reimbursements and any vested benefits she may have under any employee benefit plan of the Company.

In the event that the Company terminates Ms. Bahrambeygui’s employment without “cause” or upon her death or “disability,” Ms. Bahrambeygui terminates her employment for “good reason” or the Company elects to cause thenon-renewal of the Employment Agreement such that it expires at the end of its then-current term, Ms. Bahrambeygui also will be entitled to:

 

  

payment of an amount equal to one times base salary, payable over 24 months in conformity with the Company’s normal payroll period (less any earned income or disability payments received during such period, in the case of a termination upon her disability),

 

  

continued contribution of the premium cost for Ms. Bahrambeygui’s and her eligible dependents’ participation in the Company’s group health plan for 12 months,

 

PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement41


Executive and Director Compensation (continued)

LOGO

  

payment of any earned but unpaid bonus for the year prior to termination and a pro rata bonus for the year of termination (payable when all other bonuses are paid).

30PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive and Director Compensation (continued)

LOGO

In the event Ms. Bahrambeygui resigns her employment with the Company without “good reason” but provides at least 60 days’ notice of her resignation, she also will be entitled to receive payment of any accrued but any unpaid bonus for the year prior to termination (payable when all other bonuses are paid).

The foregoing severance benefits are the exclusive benefits that would be payable to Ms. Bahrambeygui under her Employment Agreement by reason of her termination. Payment of the severance benefits is conditioned on Ms. Bahrambeygui’s continued compliance with her obligations with respect to confidentiality,non-solicitation of employees andnon-interference with the Company’s customers and contracts and Ms. Bahrambeygui (or her estate) executing and delivering to the Company a full release of all claims in a form reasonably acceptable to the Company.

Other Executive Officers

The Company also has entered into employment agreements with each of its other executive officers that automatically renew each year unless either the Company or the executive provides at least 60 days’ notice that the Company or executive, as the case may be, wishes to terminate the agreement. Each employment agreement specifies the base salary in effect at the time the agreement was entered into and provides that the amount may be increased, but not decreased, at the Company’s discretion.

The employment agreements state that the executive is eligible to participate in the Company’s bonus plan in effect at the time and to receive all other benefits offered to senior executives of the Company under the Company’s benefit practices and plans. The Company discontinued its annual bonus plan in fiscal year 2016, so there was no payment required to be made thereunder during fiscal year 2017, fiscal year 2018 or fiscal year 2019.

In addition to termination at the end of the term if one party elects to terminate the agreement, the executive may terminate his or her employment on 60 days’ prior written notice. The Company may terminate the executive’s employment with cause upon immediate notice or without cause upon 30 days’ prior written notice. In the event that (i) the Company terminates an executive’s employment without “cause”; (ii) upon termination due to an executive’s “disability”; (iii) the executive terminates his or her employment for “good reason”; or (iv) the Company elects to cause thenon-renewal of the employment agreement such that it expires at the end of its then-current term, subject to the executive providing a release to the Company, the executive will be entitled to:

 

  

payment of an amount equal to one times base salary then in effect, payable in 24 equal installments over a period of 12 months,

 

  

continued contribution of the premium cost for the executive’s and his eligible dependents’ participation in the Company’s group health plan for 12 months,

 

  

payment of any accrued but any unpaid bonus for year prior to termination and a pro rata bonus earned for the year of termination (payable when all other bonuses are paid).

Upon an executive’s death, the executive’s estate will be entitled to receive continued contribution of the premium cost for executive’s eligible dependents’ participation in the Company’s group health plan for 12 months and payment of any accrued but any unpaid bonus for any year prior to termination and a pro rata bonus for the year of termination (payable when all other bonuses are paid).

The employment agreements also contain confidentiality provisions, restrictions on solicitation of employees and interference with the Company’s customers and contracts, and other terms and conditions customary to executive employment agreements.

42PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

Equity Incentive Plans

Prior to January 22, 2013, the Company had three active Equity Incentive Plans. On January 22, 2013, the Company adopted the 2013 Equity Incentive Award Plan and agreed not to issue any additional awards under prior plans.

PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement31


Executive and Director Compensation (continued)

LOGO

2001 Equity Participation Plan

The 2001 Equity Participation Plan of PriceSmart, Inc. (the “2001 Plan”) had a total of 6,7892,263 shares outstanding as of November 30, 2019,2021, all of which are subject to outstanding and unvested restricted stock units.

The 2001 Plan provides that in the event of a “Change in Control” or a “Corporate Transaction,” each as defined in the 2001 Plan, each outstanding award shall, immediately prior to the effective date of the Change in Control or Corporate Transaction, automatically become fully vested, exercisable or payable, as applicable, for all of the shares of Common Stock at the time subject to such award and, as applicable, may be exercised for any or all of those shares as fully vested shares of Common Stock.

2002 Equity Participation Plan

The 2002 Equity Participation Plan of PriceSmart, Inc. (the “2002 Plan”) has a total of 53,70114,714 shares outstanding as of November 30, 2019,2021, all of which are subject to outstanding and unvested restricted stock awards.

The 2002 Plan provides that in the event of a “Change in Control” or a “Corporate Transaction,” each as defined in the 2002 Plan, each outstanding award shall, immediately prior to the effective date of the Change in Control or Corporate Transaction, automatically become fully vested, exercisable or payable, as applicable, for all of the shares of Common Stock at the time subject to such award and, as applicable, may be exercised for any or all of those shares as fully vested shares of Common Stock.

2013 Equity Incentive Award Plan

TheUnder the 2013 Equity Incentive Award Plan of PriceSmart, Inc., as amended (the “2013 Plan”), as of November 30, 2021, there were 250,992 shares of Common Stock subject to outstanding unvested restricted stock awards, 90,919 shares subject to outstanding restricted stock units, and 80,670 shares subject to outstanding performance stock units, and 587,436 shares of Common Stock were available for future grants.

The 2013 Plan provides that the Compensation Committee of the Board of Directors or a subcommittee thereof may grant or issue incentive stock options,non-qualified stock options, stock purchase rights, stock appreciation rights, restricted stock, deferred stock, dividend equivalents, performance awards, stock payments and other stock related benefits, or any combination thereof.

The 2013 Plan provides for awards covering up to (1) 600,000 shares of Common Stock plus (2) the number of shares that remained available for issuance under the 1998 Equity Participation Plan of PriceSmart, Inc., the 2001 Plan and the 2002 Plan (collectively, the “Prior Plans”) as of January 22, 2013. The number of shares reserved for issuance under the 2013 Plan increases during the term of the 2013 Plan by the number of shares relating to awards outstanding under the 2013 Plan or any of the Prior Plans that expire, or are forfeited, terminated, cancelled or repurchased, or are settled in cash in lieu of shares; however, in no event will more than an aggregate of 816,265 shares of our Common Stock be issued under the 2013 Plan. As of November 30, 2019, the 2013 Plan provided for the issuance of up to 755,775 shares (including shares originally authorized for issuance under the Prior Plans), with 386,985 shares subject to outstanding and unvested restricted stock awards, restricted stock units and performance stock units and 368,790 shares remaining available for future grants.

The 2013 Plan provides that in the event of a “Change in Control” or a “Corporate Transaction,” each as defined in the 2013 Plan, each outstanding award shall, immediately prior to the effective date of the Change in Control or Corporate Transaction, automatically become fully vested, exercisable or payable, as applicable, for all of the shares of Common Stock at the time subject to such award and, as applicable, may be exercised for any or all of those shares as fully vested shares of Common Stock, subject to prior achievement of vesting criteria in the case of performance stock units. In addition to the foregoing, pursuant to a September 2019 amendment to the 2013 Plan, in the event of termination of a plan participant’s service as a result of death or “disability,” any equity awards granted to such participant will, to the extent then unvested, automatically become fully vested, exercisable or payable, as applicable, for all of the shares of Common Stock at the time subject to such award and, as applicable, may be exercised for any or all of those shares as fully vested shares of Common Stock, subject to prior achievement of vesting criteria in the case of performance stock units.

 

32PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement43


Executive and Director Compensation (continued)

 

LOGO

 

The Retirement Plan of PriceSmart, Inc.

In 1998, the Company established a retirement plan. The retirement plan is designed to be a “qualified” plan under applicable provisions of the Internal Revenue Code of 1986, as amended, covering all employees, as defined in the retirement plan. Each year, participants may contribute up to 100% per pay period of theirpre-tax annual compensation (as defined in the retirement plan) up to the maximum allowable by the Internal Revenue Code of 1986, as amended. Participants also may contribute amounts representing distributions from other qualified plans. Effective January 1, 2011, the Plan was amended to replace the Company match with a discretionary contribution of 4% of the employee’s eligible compensation up to the IRS maximum allowed to all employees regardless of their own salary deferrals. Effective January 1, 2016, the Company began providing up to a 2% matching contribution tonon-officer employees who contribute at least 1% of their eligible pay, and during fiscal year 2019 expanded the 2% matching contribution to officers who contribute at least 1% of their eligible pay. Although the Company has not expressed any intent to do so, the Company has the right under the retirement plan to discontinue its contributions at any time and to terminate the retirement plan, subject to the provisions of Employee Retirement Income Security Act of 1974, as amended. All participants in the retirement plan are immediately vested in their accounts and earnings thereon.

44PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information with respect to outstanding equity awards at August 31, 20192021 with respect to the Named Executive Officers.

 

   Name

 

  Grant Date

 

   Number of
Shares of Stock
That Have Not
Vested (#)(1)

 

   Market Value of
Shares of Stock
That Have Not
Vested ($)(2)

 

   Equity Incentive
Plan Awards:
Number of
Unearned Shares
or Other Rights  That
Have Not Vested
(#)(3)

 

   

 

Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares or
Other Rights
That Have Not
Vested ($)(2)

 

 
  Sherry Bahrambeygui

 

               
    11/16/2018    —     $            —      2,007(4)   $121,283 
    03/06/2019    43,525    2,630,216    —      —   
  José Luis Laparte

 

               
         —      —      —      —   
  Maarten Jager

 

               
    04/24/2018    9,427    569,674    —      —   
    07/17/2018    —      —      4,714(5)    284,867 
    10/23/2018    2,194    132,583    2,741(6)    165,639 
  William J. Naylon

 

               
    01/25/2012    9,051    546,952    —      —   
    11/03/2015    6,030    364,393    —      —   
    10/23/2018    1,482    89,557    3,578(7)    216,219 
  Francisco Velasco

 

               
    07/14/2016    2,213    133,732    —      —   
    04/04/2018    1,746    105,511    —      —   
    07/17/2018    —      —      1,746(8)    105,511 
    10/23/2018    —      —      889(9)    53,722 
  John Hildebrandt

 

               
    01/25/2012    5,658    341,913    —      —   
    11/03/2015    2,222    134,275    —      —   
    10/23/2018    507    30,638    396(8)    23,930 

Name

 Grant
Date
  



Number of

Shares of Stock
That Have Not
Vested (#)(1)

 

 
 
 

  


Market Value
of Shares of
Stock That Have
Not Vested ($)(2)
 
 
 
 
  




Equity Incentive Plan
Awards: Number of
Unearned
Shares or Other
Rights That Have
Not Vested (#)(3)
 
 

 
 
 
  




Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares or
Other Rights That
Have Not Vested ($)(2)
 
 
 
 
 
 

Sherry Bahrambeygui

 

    9/27/2019  8,937  $756,160   —    $—   
    9/27/2019  —     —     8,938   756,244 
    7/29/2020  5,040   426,434   —     —   
  10/12/2020  20,384   1,724,690   —     —   
  10/12/2020  —     —     17,208   1,455,696 

Michael L. McCleary

 

    1/25/2012  905   76,572   —     —   
    2/24/2017  117   9,899   —     —   
      3/6/2020  553   46,789   —     —   
      4/1/2020  1,684   142,483   —     —   
      4/1/2020  —     —     1,684   142,483 
    7/20/2020  2,520   213,217   —     —   
  10/12/2020  1,591   134,615   —     —   
  10/12/2020  —     —     1,206   102,040 

William J. Naylon

 

    1/25/2012  3,017   255,268   —     —   
  10/23/2018  —     —     1,234   104,409 
    9/27/2019  2,967   251,038   —     —   
    9/27/2019  —     —     2,968   251,122 
    7/20/2020  2,520   213,217   —     —   
  10/12/2020  3,463   293,004   —     —   
  10/12/2020  —     —     2,725   230,562 

Francisco Velasco

 

  10/23/2018  —     —     506   42,813 
    9/27/2019  1,573   133,092   —     —   
    9/27/2019  —     —     1,872   158,390 
    7/20/2020  2,520   213,217   —     —   
  10/12/2020  2,805   237,331   —     —   
  10/12/2020  —     —     2,084   176,327 

John Hildebrandt

 

    1/25/2012  1,866   159,574   —     —   
    9/27/2019  1,363   115,323   —     —   
    9/27/2019  —     —     1,363   115,323 
    7/20/2020  2,520   213,217   —     —   
  10/12/2020  1,225   103,647   —     —   
  10/12/2020  —     —     1,083   91,633 

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 3345


Executive and Director Compensation (continued)

 

LOGO

 

(1)

Each restricted stock award is subject to certain accelerated vesting upon a change in control, as described under “—Equity Incentive Plans” above. The vesting schedule of shares of restricted stock with service-based vesting requirements, are presented in the table below.

 

   Vesting Date

 

  Sherry
Bahrambeygui

 

   Maarten O.
Jager

 

   William J.
Naylon

 

   Francisco
Velasco

 

   John
Hildebrandt

 

 

 

  October 16, 2019

 

  

 

 

 

 

3,986

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

  January 24, 2020

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

3,017

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

1,886

 

 

 

 

 

  April 4, 2020

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

873

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

  April 24, 2020

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

6,285

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

  August 29, 2020

 

  

 

 

 

 

23,756

 

 

 

 

  

 

 

 

 

1,097

 

 

 

 

  

 

 

 

 

6,277

 

 

 

 

  

 

 

 

 

2,213

 

 

 

 

  

 

 

 

 

2,407

 

 

 

 

 

  January 24, 2021

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

3,017

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

1,886

 

 

 

 

 

  April 4, 2021

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

873

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

  April 24, 2021

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

3,142

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

 

  August 29, 2021

 

  

 

 

 

 

15,783

 

 

 

 

  

 

 

 

 

1,097

 

 

 

 

  

 

 

 

 

1,235

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

322

 

 

 

 

 

  January 24, 2022

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

3,017

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

1,886

 

 

 

 

Vesting Date

   Sherry Bahrambeygui    Michael L. McCleary    William J. Naylon    Francisco Velasco    John Hildebrandt 

October 20, 2021

   5,040    2,520    2,520    2,520    2,520 

January 24, 2022

   —      1,022    3,017    —      1,886 

August 29, 2022

   20,409    2,515    3,713    2,962    1,363 

January 24, 2023

   —      553    —      — ��    —   

August 29, 2023

   8,912    760    2,717    1,416    1,225 

October 26, 2021

   11,485    1,252    3,712    2,272    1,151 

October 26, 2022

   10,205    1,258    1,857    1,482    682 

October 26, 2023

   4,456    380    1,358    708    613 

 

(2) 

The market value is computed by multiplying the closing market price of the Company’s Common Stock ($60.43)84.61) on August 30, 201931, 2021 by the number of shares subject to stock award.

(3) 

Awards of performance stock units.

(4)

Based on actual performance relative to target, 50% of the shares vested on October 26, 2019 and the remainder will be forfeited.

(5)

Based on actual performance relative to target, 50% of the shares will vest in accordance with the vesting schedule and the remainder will be forfeited. The achieved shares vested or will vest 67% on October 26, 2019 and 33% on October 26, 2020.

(6)

Based on actual performance relative to target, 50% of the shares will vest in accordance with the vesting schedule and the remainder will be forfeited. The achieved shares vested or will vest 20% on October 26, 2019, 20% on October 26, 2020 and 60% on October 26, 2021.

(7)

Based on actual performance relative to target, 50% of the shares will vest in accordance with the vesting schedule and the remainder will be forfeited. The achieved shares vested or will vest 30% on October 26, 2019, 35% on October 26, 2020 and 35% on October 26, 2021.

(8)

Based on actual performance relative to target, 50% of the shares will vest in accordance with the vesting schedule and the remainder will be forfeited. The achieved shares vested or will vest in equal portions on October 26, 2019 and October 26, 2020.

(9)

Based on actual performance relative to target, 50% of the shares will vest in accordance with the vesting schedule and the remainder will be forfeited. The achieved shares vested or will vest 11% on October 26, 2019, 32% on October 26, 2020 and 57% on October 26, 2021.

Restricted Stock Vested

The following table sets forth certain information with respect to the vesting of shares of restricted stock during the fiscal year ended August 31, 20192021 with respect to the Named Executive Officers.

 

   

 

Stock Awards

 

 
  
   Name

 

  Number of Shares
Acquired on Vesting

 

   Value Realized
on Vesting(1)

 

 
  Sherry Bahrambeygui   23,679    $1,435,060 
  José Luis Laparte   50,000    2,955,000 
  Maarten O. Jager   14,141    826,117 
  William J. Naylon   11,616    715,249 
  Francsico Velasco   4,334    260,844 
  John Hildebrandt   4,475    280,156 

   Stock Awards 
  

Name

   
Number of Shares
Acquired on Vesting
 
 
   
Value Realized  on
Vesting(1)
 
 

Sherry Bahrambeygui

   48,530   $4,115,712 

Michael L. McCleary

   7,063    613,853 

William J. Naylon

   9,823    877,041 

Francisco Velasco

   5,448    467,141 

John Hildebrandt

   4,611    419,844 
 (1) 

The value realized upon vesting of a stock award is calculated based on the number of shares vesting multiplied by the fair market value per share of the Common Stock on the vesting date.

 

Pension Benefits

Other than the Company’s retirement plan, which is described above, the Company does not have any plan that provides for payments or other benefits at, following, or in connection with, retirement for our Named Executive Officers.

34PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Executive and Director Compensation (continued)

LOGO

Nonqualified Deferred Compensation

The Company does not have any plan that provides for deferred compensation.

46PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Executive and Director Compensation (continued)

LOGO

Severance and Change in Control Payments

The following table summarizes the potential payments to each Named Executive Officer in two different potential scenarios: (1) a termination of the Named Executive Officer without cause and (2) a change in control without a termination of employment. The table assumes that the termination of employment or change in control occurred on August 31, 2019,2021, the last business day of our last completed fiscal year. For purposes of estimating the value of accelerated vesting of equity awards to be received in the event of a change in control, the Company has assumed a price per share of ourits Common Stock of $60.43,$84.61, which represents the closing market price of ourits Common Stock as reported on the Nasdaq Global Select Market on August 31, 20192021 (the last trading day of fiscal year 2019)2021).

 

   Name

 

  Severance upon
Termination
without Cause
($)(1)

 

   

 

Acceleration of
Options and
Restricted Stock
upon Change
in Control($)(2)

 

 

  Sherry Bahrambeygui

  

$

1,291,800

 

  

$

2,751,499

(3) 

  José Luis Laparte

  

 

N/A

 

  

 

N/A

 

  Maarten O. Jager

  

 

600,000

 

  

 

1,152,763

(4) 

  William J. Naylon

  

 

600,000

 

  

 

1,217,121

(5) 

  Francisco Velasco

  

 

550,000

 

  

 

398,475

(6) 

  John Hildebrandt

  

 

474,000

 

  

 

530,757

(7) 

Name

   


Severance upon
Termination
without
Cause  ($)(1)
 
 
 
 
   



Acceleration of
Restricted Stock
and PSUs

upon Change in
Control ($)(2)

 
 
 

 
 

Sherry Bahrambeygui

  $3,892,603   $5,119,497(3) 

Michael L. McCleary

   859,200    868,099(4) 

William J. Naylon

   947,926    1,598,621(5) 

Francisco Velasco

   859,200    961,170(6) 

John Hildebrandt

   796,258    798,718(7) 
 (1)

Under the Named Executive Officer’s employment agreement, in the event of his or her termination other than for cause, death or disability, he or she will be entitled to payment of an amount equal to one times base salary then in effect, payable in 24 equal installments over a period of 12 months, plus in the case of Ms. Bahrambeygui, a bonus for the fiscal year of the Company in which the termination occurs, prorated for the portion of such fiscal year that he or she is employed by the Company. The amount of the bonus, prior to proration, shall be contingent on attainment of the relevant annual bonus plan performance goals for the year.

 
 (2)

Under the terms of our equity incentive award plans, vesting of all restricted stock awards, restricted stock units and performance stock units for which at least one of the performance criteria have been met will accelerate upon a change in control.

 
 (3)

Includes 2,00726,146 performance stock units, valued for purposes of this table at $121,283,$2,212,213, the vesting of which will accelerate upon a change in control only if one of the performance criteria has been met prior to the change in control.

 
 (4)

Includes 7,4452,890 performance stock units, valued for purposes of this table at $450,506,$244,523, the vesting of which will accelerate upon a change in control only if one of the performance criteria has been met prior to the change in control.

 
 (5)

Includes 3,5786,927 performance stock units, valued for purposes of this table at $216,219,$586,093, the vesting of which will accelerate upon a change in control only if one of the performance criteria has been met prior to the change in control.

 
 (6)

Includes 2,6354,462 performance stock units, valued for purposes of this table at $159,233,$377,530, the vesting of which will accelerate upon a change in control only if one of the performance criteria has been met prior to the change in control.

 
 (7)

Includes 3962,446 performance stock units, valued for purposes of this table at $530,757,$206,956, the vesting of which will accelerate upon a change in control only if one of the performance criteria has been met prior to the change in control.

 

Director Compensation

Eachnon-employee director receives an annual retainer for serving on the Board of Directors.

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 3547


Executive and Director Compensation (continued)

 

LOGO

 

Director Compensation

Eachnon-employee director other than Mr. Price receives an annual retainer of $36,000$45,000 per year for serving on the Board of Directors. Additionally,non-employee directors who serve on, but doMr. Price does not chair, committees other than the Audit Committee receive an additional $5,000 per year per committee, andnon-employee directors, who serve on, but do not chair, the Audit Committee receive an additional $15,000 per year. Committee chairpersons receive additional annual retainerscompensation for service as follows: the chairpersonChairman of the Compensation Committee receives anBoard or as a member of any committee. Mr. Lynn received additional annual retainercompensation of $15,000, the chairperson$35,000 for service as Vice Chairman of the Digital Transformation Committee receives anBoard. The table set forth below describes additional annual retainercompensation paid to directors for service as chairmen or members of $25,000, the chairperson of the Finance Committee receives an additional annual retainer of $20,000, the chairperson of the Nominating/Corporate Governance Committee receives an additional annual retainer of $15,000, and the chairperson of the Audit Committee receives an additional annual retainer of $45,000. These annual retainers are paid on a quarterly basis. Ms. Infante receives an additional retainer of $25,000 in recognition of her devotion of significant additional time to supporting the Board of Directors and management on technology matters.committees.

Committee

   Chair    Member 

Audit

  $45,000   $15,000 

Compensation

   25,000    10,000 

Nominating/Corporate Governance

   15,000    5,000 

Finance

   25,000    10,000 

Real Estate

   N/A    5,000 

Executive

   N/A    5,000 

Digital Transformation

   50,000    5,000 

Environmental and Social Responsibility

   15,000    5,000 

Effective January 30, 2019,February 4, 2021, the Board of Directors granted to eachnon-employee director other than Mr. Price an award of restricted stock units under the 2013 Plan, with dividend equivalents thereon, covering a number of shares having a value equal to $80,000 minus the value of RSUs vesting during theone-year vesting period of the new grants (based on the value at the time such awards were granted).$120,000. To determine the number of shares covered by the new grants, the Board of Directors divided the dollar value of the award to be granted by the30-trading-day average of the Company’s stock price prior to the grants. These awards will vest in full on January 31, 2020 or the date of the Company’s next annual meeting of stockholders, whichever is sooner,2022, subject to thenon-employee director’s continued service on the Board of Directors on such vesting date. The vesting of all restricted stock units accelerates automatically upon a change in control.

Directors also receive reimbursement for travel expenses incurred in connection with their duties as directors.

The following table sets forth a summary of the compensation we paid or that was earned by ournon-employee directors in the fiscal year ended August 31, 2019.2021.

 

   Name

 

  

 

Fees Earned
or Paid in
Cash
($)

 

   Stock
Awards
($)(1)(2)

 

   All Other
Compensation

 

($)(3)

   Total
($)

 

 

  Gonzalo Barrutieta

  

$

  41,000

 

  

$

81,663

 

  

$

   907

 

  

 

$123,570

 

  Sherry Bahrambeygui(4)

  

 

33,363

 

  

 

—  

 

  

 

—  

 

  

 

33,363

 

  Gordon Hanson

  

 

44,111

 

  

 

81,663

 

  

 

907

 

  

 

126,681

 

  Beatriz V. Infante

  

 

97,438

 

  

 

81,663

 

  

 

907

 

  

 

180,008

 

  Leon C. Janks

  

 

124,355

 

  

 

81,663

 

  

 

907

 

  

 

206,925

 

  Mitchell G. Lynn

  

 

46,000

 

  

 

81,663

 

  

 

907

 

  

 

128,570

 

  Gary Malino

  

 

59,417

 

  

 

81,663

 

  

 

1,048

 

  

 

142,128

 

  Pierre Mignault

  

 

36,000

 

  

 

81,663

 

  

 

907

 

  

 

118,570

 

  Robert Price(5)

  

 

—  

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

  Edgar Zurcher

  

 

38,083

 

  

 

81,663

 

  

 

907

 

  

 

120,653

 

Name

   

Fees Earned
or Paid
in Cash
 

 
   
Stock
Awards(1)(2)
 
 
   
All Other
Compensation(3)
 
 
   Total 

Jeffrey Fisher

  $81,083   $124,584   $454   $206,121 

Gordon Hanson

   69,556    124,584    907    195,048 

Beatriz V. Infante

   168,750    124,584    907    294,242 

Leon C. Janks

   187,500    124,584    907    312,992 

Mitchell G. Lynn

   131,500    124,584    907    256,992 

Patricia Márquez

   24,333    124,584    907    149,825 

Robert Price(4)

   —      —      —      —   

David R. Snyder

   28,389    124,584    907    153,881 

Edgar Zurcher

   64,448    124,584    907    189,940 
 (1) 

Represents the aggregate grant date fair value of the restricted stock unit award granted to the director on January 30, 2019February 4, 2021 calculated in accordance with ASC 718.

 
 (2)

The aggregate number of restricted stock unit awards outstanding at the end of fiscal year 20192021 for each of the directors was as follows:

Gonzalo Barrutieta, 1,295; Jeffrey Fisher 1,296; Gordon Hanson, 1,295;1,296; Beatriz V. Infante, 1,295;1,296; Leon C. Janks, 1,295;1,296; Mitchell G. Lynn, 1,295; Gary Malino, 1,295; Pierre Mignault, 1,2951,296; Patricia Márquez, David R. Snyder and Edgar Zurcher, 1,295.1,296.

 
 (3) 

Represents the amount paid to the director pursuant to dividend equivalents on such director’s unvested restricted stock units plus, in the case of Mr. Mignault, the amount of consulting fees paid to Mr. Mignault as a sourcing agent.units.

 
 (4)

The Company discontinued payment of director fees to Ms. Bahrambeygui upon her becoming permanent Chief Executive Officer in January 2019.

(5) 

Effective May 1, 2012, Mr. Price declined further compensation for his services as a director.

 

 

3648 PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement


Executive and Director Compensation (continued)

 

LOGO

 

Risk Assessment

Management assessed the Company’s compensation program for the purpose of reviewing and considering any risks presented by the Company’s compensation policies and practices that are likely to have a material adverse effect on the Company.

As part of that assessment, management reviewed the primary elements of our compensation program, including base salary, annual cash incentive awards and long-term equity compensation. Management’s risk assessment included a review of the overall design of each primary element of our compensation program and an analysis of the various design features, controls and approval rights in place with respect to compensation paid to management and other employees that mitigate potential risks to the Company.

Management also noted that we have adopted stock ownership guidelines for our executives andnon-employee directors. Management believes the adoption of such guidelines further aligns the interests of our Chief Executive Officer, our other executive officers and our Board of Directors with those of our stockholders. Management also noted that the adoption of the Company’s Compensation Recoupment Policy provides the Compensation Committee with broad discretion to recoup certain incentive awards made to the Company’s executive officers in instances of material violations of law or a written Company policy by an executive officer or by a subordinate employee if the executive failed to supervise the subordinate, if the misconduct caused significant financial or reputational harm to the Company.

Following the assessment, management determined that the Company’s compensation policies and practices did not create risks that were reasonably likely to have a material adverse effect on the Company and reported the results of the assessment to the Compensation Committee.

Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the median annual total compensation of all our employees and the annual total compensation of Jose Luis Laparte, our former Chief Executive Officer, and President, and Sherry Bahrambeygui, in her roles as interim and permanent Chief Executive Officer.Bahrambeygui. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K.

For fiscal year 2019,2021, our last completed fiscal year:

 

  

the median of the annual total compensation of all employees of our Company (other than our former Chief Executive Officer and President and our current Chief Executive Officer) was $9,924;$8,261; and

 

  

the sum of the annual total compensation of our former Chief Executive Officer and President and our current Chief Executive Officer, as reported in the Summary Compensation Table set forth above, was $6,883,905.$7,550,113.

Based on this information, for fiscal year 2019,2021, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees is estimated to be 694914 to 1.

To identify the median of the annual total compensation of all our employees and determine the annual total compensation of our median employee and the annual total compensation of our Chief Executive Officer, we took the following steps:

 

1.

We identified the median employee using our employee population on August 31, 2018,2021, the last day of fiscal year 2018.2021. This population consisted of full-time employees and part-time employees.

 

2.

To identify the “median employee” from our employee population, we first determined the amount of each employee’s gross earnings (i.e., sum of base pay, cash bonus and equity compensation) as reflected in our payroll records for fiscal year 2018.2021. We then identified our median employee from our employee population using this compensation measure, which was consistently applied to all our employees included in the calculation.

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 3749


Executive and Director Compensation (continued)

 

LOGO

 

3.

Our median employee is a full-time merchandise stockercashier in one of our TrinidadCosta Rica warehouse clubs. We are required to identify the median employee only once every three years and calculate total compensation for that employee each year. For purposes of this year’s calculation, we usedidentified a new employee based on the fiscal 2019 compensation earned by the median2021 employee we identified for fiscal year 2018 because there has been no change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our pay ratio disclosure.population.

 

4.

We combined all of the elements of our median employee’s compensation for fiscal year 2019,2021, calculated in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K, resulting in annual total compensation of $9,924.$8,261.

 

5.

With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the “Total” column of our Summary Compensation Table for fiscal year 20192021 for our former Chief Executive Officer and President and our current Chief Executive Officer combined.Officer.

 

3850 PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement


Equity Compensation Plan Information

 

LOGO

 

The following table sets forth the number and weighted-average exercise price of securities to be issued upon exercise or vesting of outstanding options, restricted stock units, warrants and rights, and the number of securities remaining available for future issuance under all of our equity compensation plans, at August 31, 2019.2021. For more information regarding the Company’s equity compensation plans, please see “Compensation Discussion and Analysis—Equity Incentive Plans” above.

 

   

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)








 

 

 

 

Equity compensation plans approved by security holders

 

            

Options

 

 

—  

 

 

 

N/A

 

 

 

—  

(1) 

Restricted stock, RSUs and PSUs

 

 

140,956

 

 

 

N/A

 

 

 

368,790

 

Equity compensation plans not approved by security holders

 

 

—  

 

 

 

—  

 

 

 

—  

 

 

 

 

   

 

 

 

Total

 

 

140,956

 

     

 

368,790

 

   

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)








 

 

 

Equity compensation plans approved by security holders

            

Options

  —     N/A   —  (1) 

Restricted stock, RSUs and PSUs

  375,622   N/A   705,924 

Equity compensation plans not approved by security holders

  —     —     —   
 

 

 

   

 

 

 

Total

  375,622   N/A   705,924 
(1) 

Although the Company does not currently award options, the shares available for future issuance under the Company’s 2013 Equity Incentive Award Plan could be awarded as options, restricted stock, restricted stock units or other forms of equity incentive awards specified in the plan.

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 3951


Certain Transactions

 

LOGO

 

Review and Approval of Related-Party Transactions

As set forth in the Audit Committee charter, the members of the Audit Committee, all of whom are independent directors, review and approve related-party transactions for which such approval is required under applicable law, including Securities and Exchange Commission and Nasdaq rules. In the course of its review and approval or ratification of a disclosable related-party transaction, the Audit Committee may consider:

 

  

the nature of the related person’s interest in the transaction;

 

  

the material terms of the transaction, including, without limitation, the amount and type of transaction;

 

  

the importance of the transaction to the related person;

 

  

the importance of the transaction to the Company;

 

  

whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the Company; and

 

  

any other matters the Audit Committee deems appropriate.

Related Party Transactions

Relationships with Edgar Zurcher:Zurcher. EdgarMr. Zurcher, is a directormember of the Company. Mr. ZurcherCompany’s Board of Directors, is also a director of a company that owns 40% of Payless ShoeSource Holdings, Ltd., which rents retail space from the Company. The Company recorded approximately $1.6$1.4 million in rental income for this space during thefiscal year ended August 31, 2019.2021. Additionally, Mr. Zurcher is a director of Molinos de Costa Rica S.A. The Company paid approximately $741,000$1.1 million for products purchased from this entity during thefiscal year ended August 31, 2019. Also, Mr. Zurcher is a director of Roma Prince S.A. PriceSmart purchased products from this entity for approximately $1.0 million for the year ended August 31, 2019.2021.

Relationships with Price Family Charitable Organizations:Philanthropies. During thefiscal year ended August 31, 2019,2021, the Company sold approximately $527,000$1.6 million of supplies to Price Philanthropies Foundation. Robert Price, Chairman of the Company’s Board of Directors, is the Chairman of the Board and President of Price Philanthropies Foundation, and Jeffrey Fisher, a director of the Company since November 2019, is the Chief Financial Officer and a director of Price Philanthropies Foundation. Sherry S. Bahrambeygui, oura director and the Chief Executive Officer and director, servedof the Company, serves as Executive Vice President Secretary and Vice Chairman of the Board of the Price Philanthropies Foundation until January 2019.Foundation. Jeffrey R. Fisher, a director of the Company, serves as the Chief Financial Officer and as a director of the Board of the Price Philanthropies Foundation.

Relationships with Mitchell G. Lynn. Mr. Lynn, a member of the Company’s Board of Directors, is a founder and a limited partner of CRI 2000, LP, dba Combined Resources International (“CRI|). CRI designs and imports consumer products for wholesale distribution, primarily through warehouse clubs. The Company purchased approximately $176,000 of merchandise from CRI during fiscal year 2021.

 

4052 PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement


Proposal 2Approval of the Compensation of the Named Executive Officers

 

LOGO

 

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,2011, or the Dodd-Frank Act, the Company’s stockholders are entitled to vote at the Annual Meeting to provide advisory approval of the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission. Pursuant to the Dodd-Frank Act, the stockholder vote on executive compensation is an advisory vote only, and it is not binding on the Company or our Board of Directors.

Although the vote isnon-binding, our Compensation Committee and Board of Directors appreciate the opinions of the stockholders and will consider the outcome of the vote when making future compensation decisions. As described more fully in the Compensation Discussion and Analysis section of this Proxy Statement, the Company’s executive compensation program is designed to attract, retain and motivate individuals with superior ability, experience and leadership capability to deliver on our annual and long-term business objectives necessary to achieve growth in stockholder value. We urge stockholders to read the Compensation Discussion and Analysis section of this Proxy Statement, which describes in detail how our executive compensation policies and procedures operate and are intended to operate in the future. The Compensation Committee and the Board of Directors believe that our executive compensation program fulfills these goals and is reasonable, competitive and aligned with our performance and the performance of our executives.

We are asking our stockholders to indicate their support for our named executive officer compensation as described in this Proxy Statement. This proposal, commonly known as a“say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask that our stockholders vote “FOR”“For” the following resolution:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 20202022 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

Recommendation of the Board of Directors

The Board of Directors recommends that stockholders vote FOR the approval of the compensation of the named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission. Proxies solicited by the Board of Directors will be so voted unless stockholders specify otherwise on the accompanying Proxy.

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 4153


Proposal 3Ratification of Selection of Independent Registered Public Accounting Firm

 

LOGO

 

Subject to ratification by the shareholdersstockholders at the Annual Meeting, the Board, upon recommendation of the Audit Committee, has selected Ernst & Young LLP (“EY”) to audit the consolidated financial statements of the Company and its subsidiaries for the fiscal year ending August 31, 2020.2022. EY has issued its reports, included in the Company’s Form10-K, on the audited consolidated financial statements of the Company and internal control over financial reporting for the fiscal year ended August 31, 2019.2021. EY has served the Company as independent auditors since the Company’sspin-off from Price Enterprises, Inc. in 1997. Representatives of EY are expected to be present at the Annual Meeting, will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions.

Stockholders are not required to ratify the appointment of EY as our independent registered public accounting firm. However, we are submitting the appointment of EY to the stockholders for ratification as a matter of good corporate practice. If you fail to ratify the appointment, the Board of Directors and the Audit Committee will reconsider whether or not to retain EY. Even if the appointment is ratified, the Board of Directors and the Audit Committee in their discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders.

Independent Registered Public Accounting Firm

The Audit Committee of the Company’s Board of Directors has selected EY to serve as the Company’s independent registered public accounting firm for the 20202021 fiscal year, subject to the Company and EY agreeing on a mutually acceptable engagement letter. Representatives of EY are expected to be present at the Annual Meeting. Such representatives will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Audit andnon-audit fees.The aggregate fees billed to the Company by EY, the Company’s independent registered public accounting firm, for the indicated services for each of the last two fiscal years were as follows (in thousands):

 

  
   2019   2018 

Audit Fees(1)

 $2,203  $2,400 

Audit-Related Fees(2)

  —     15 

Tax Fees(3)

  32   38 

All Other Fees

  11   8 
 

 

 

  

 

 

 
     

 

 

 

 

Total

 

 

 

$

 

 

2,246

 

 

 

 

 

 

$

 

 

2,461

 

 

 

 

  
  

 

2021

 

 

 

2020

 

Audit Fees(1)

 

$

1,915

 

 

$

1,913

 

Audit-Related Fees

 

 

—  

 

 

 

—  

 

Tax Fees(2)

 

 

80

 

 

 

274

 

All Other Fees(3)

 

 

9

 

 

 

4

 

 

 

 

  

 

 

 
     

 

 

 

Total

 

$

2,004

 

 

$

2,191

 

 (1)

Audit Fees consist of fees for professional services performed by EY for the audit of the Company’s annual financial statements and review of quarterly financial statements.

 
 (2)

Audit-Related Fees consist of fees for assurance and related services performed by EY that are reasonably related to the performance of the audit or review of the Company’s financial statements.

(3)

Tax Fees consist of fees for professional services performed by EY with respect to tax compliance, tax advice and tax planning.

 

(3)
42

All Other Fees consist of license fees for a software tool provided by EY.

 PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


Proposal 3  Ratification of Selection of Independent Registered Public Accounting Firm (continued)

LOGO

Audit Committee Policy RegardingPre-Approval of Audit and PermissibleNon-Audit Services of Our Independent Registered Public Accounting Firm

Our Audit Committee has established a policy that generally requires that all audit and permissiblenon-audit services provided by the Company’s independent registered public accounting firm bepre-approved by the Audit Committee. These services may include audit services, audit-related services, tax services and other services. From the time that thepre-approval requirements became effective, all permissiblenon-audit services provided by the Company’s independent registered public accounting firm have beenpre-approved by the Company’s Audit Committee. Our Audit Committee has considered whether the provision of services under the heading “All Other Fees” is compatible with maintaining the accountants’ independence and determined that it is consistent with such independence.

54PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


Proposal 3   Ratification of Selection of Independent Registered Public Accounting Firm (continued)

LOGO

Recommendation of the Board of Directors

The Board of Directors recommends a vote FOR the ratification of the selection of EY as our independent registered public accounting firm. Proxies solicited by the Board of Directors will be so voted unless stockholders specify otherwise on the accompanying Proxy.

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 4355


General

 

LOGO

 

Delinquent Section 16 Filings

Under Section 16(a) of the Exchange Act, directors, officers and beneficial owners of 10% or more of the Company’s Common Stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of the Common Stock. Based solely on our review of such forms received by the Company and the written representations of the reporting persons, the Company has determined that no reporting persons known to the Company were delinquent with respect to their reporting obligations as set forth in Section 16(a) of the Exchange Act, except that each of our directors during fiscal year 2019 other than Mr. Price did not timely report on Form 4 one award of restricted stock units; each of our executive officers other than Mr. Laparte, Mr. Von Chong and Ms. Santana did not timely report on Form 4 one award of restricted stock; Ms. Bahrambeygui did not timely report on Form 4 one distribution to her of shares by an entity; Mr. Price did not timely report on Form 4 two transfers of shares between entities affiliated with him; and the Price Philanthropies Foundation did not timely report on Form 3 its becoming the beneficial owner of 10% or more of our common stock. All of these forms were subsequently filed.Act.    

Stockholder Proposals

In order to be included in our proxy statement and form of proxy relating to our Annual Meeting of Stockholders to be held in 2021,2023, proposals of stockholders intended to be presented at that meeting must be received by us no later than August 24, 2020,19, 2022, which is 120 days prior to the first anniversary of the mailing date of this Proxy Statement. These proposals must comply with the requirements as to form and substance established by the Securities and Exchange Commission for such proposals in order to be included in the proxy statement. Under our Second Amended and Restated Bylaws, a stockholder who wishes to make a proposal at the 20212023 Annual Meeting without including the proposal in our proxy statement and form of proxy relating to that meeting must notify us no earlier than October 9, 20206, 2022 and no later than November 8, 20205, 2022 unless the date of the 20212023 annual meeting of stockholders is more than 30 days before or more than 60 days after theone-year anniversary of the 20202022 annual meeting. If the stockholder fails to give notice by this date, then the persons named as proxies in the proxies solicited by the board of directors for the 20212023 Annual Meeting may exercise discretionary voting power regarding any such proposal.

Annual Report

The Annual Report of the Company for the fiscal year ended August 31, 20192021 will be mailed to stockholders of record on or about December 20, 2019.17, 2021. The Annual Report does not constitute, and should not be considered, a part of this Proxy solicitation material.

If any person who was a beneficial owner of Common Stock of the Company on the record date for the Annual Meeting of Stockholders desires additional information, a copy of the Company’s Annual Report on Form10-K will be furnished without charge upon receipt of a written request identifying the person so requesting a report as a stockholder of the Company at such date. Requests should be directed to PriceSmart, Inc., 9740 Scranton Road, San Diego, California 92121, Attention: Secretary.

Householding of Proxy Materials

If you share an address with another stockholder, you may receive only one set of proxy materials unless you have provided contrary instructions. The rules promulgated by the SEC permit companies, brokers, banks or other intermediaries to deliver a single copy of a proxy statement and annual report to households at which two or more stockholders reside. This practice, known as “house holding,” is designed to reduce duplicate mailings, save significant printing and postage costs, and conserve natural resources. Stockholders will receive only one copy of our proxy statement and annual report if they share an address with another stockholder, have been previously notified of house holding by their broker, bank or other intermediary, and have consented to house holding, either affirmatively or implicitly by not objecting to house holding. If you would like to opt out of this practice for future mailings, and receive separate annual reports and proxy statements for each stockholder sharing the same

44PriceSmart, Inc.Notice of Annual Meeting of Shareowners and 2019 Proxy Statement


General (continued)

LOGO

address, please contact your broker, bank or other intermediary. You may also obtain a separate annual report or proxy statement without charge by sending a written request to PriceSmart, Inc., 9740 Scranton Road, San Diego, California 92121, Attention: Secretary or call Investor Relations at(858) 404-8800.404-8826. We will promptly send additional copies of the annual report or proxy statement upon receipt of such request. Stockholders sharing an address that are receiving multiple copies of the annual

56PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


General (continued)

LOGO

report or proxy statement can request delivery of a single copy of the annual report or proxy statement by contacting their broker, bank or other intermediary, sending a written request to the Company at the address above or calling Investor Relations at the telephone number above.

Other Matters

The Board of Directors does not know of any matter to be presented at the Annual Meeting which is not listed on the Notice of Annual Meeting and discussed above. If other matters should properly come before the meeting, however, the persons named in the accompanying Proxy will vote all Proxies in accordance with their best judgment.

ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN

THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.

 

By Order of the Board of Directors

LOGO

Francisco J. Velasco

Secretary

Dated: December 20, 2019

17, 2021

 

PriceSmart, Inc.Notice of 2022 Annual Meeting of ShareownersStockholders and 2019 Proxy Statement 4557


Appendix A

 

LOGO

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

LOGOThe Compensation Committee selected growth in Adjusted Sales and achievement of specified levels of Adjusted Operating Income as a Percentage of Adjusted Sales as alternative performance measures for the annual cash incentive awards up to target levels for fiscal 2021 because they believe they represent key indicators of the strength of our operating results and incentivizes the participants in our annual cash incentive award program to achieve strong revenue and earnings growth. Executives’ payouts up to 100% of target amounts are based on the highest achievement under either growth in Adjusted Sales or Adjusted Operating Income as a Percentage of Adjusted Sales, not both. The Chief Executive Officer and certain other executives also share an over-achievement pool in an amount equal to 15% of Adjusted Operating Income above the threshold level of $125.1 million. This threshold represents an amount equal to $11.0 million over target Adjusted Operating Income. “Adjusted Sales” are measured as total revenues less revenues generated by the legacy businesses of our Aeropost subsidiary, and “Adjusted Operating Income” is measured as reported Operating income excluding revenues and expenses associated with the legacy businesses of our Aeropost subsidiary and, for purposes of determining Adjusted Operating Income above a specified threshold, includes expenses associated with annual cash incentive awards and performance stock units, or PSUs, up to target amounts but excludes expenses associated with annual cash incentive awards and incremental PSUs payable with respect to achievement of such Adjusted Operating Income above such threshold.

In our audited financial statements for the year ended August 31, 2021, Total revenues is the most directly comparable GAAP financial measure to Adjusted Sales, and Operating income is the most directly comparable GAAP financial measure to Adjusted Operating Income. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth below. Adjusted Sales and Adjusted Operating Income should not be considered as substitutes for total revenues and operating income as determined in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies.

NON-GAAP RECONCILIATION — ADJUSTED SALES

(Unaudited; USD in Thousands)

   

12 Months Ended

 
  
    Aug. 31, 2021   Aug. 31, 2020 

Total revenues

  

$

3,619,871

 

  

$

3,329,188

 

Adjustments:

          

Aeropost non-merchandise revenue

  

 

(46,874)

 

  

 

(38,271)

 

Adjusted Sales

  

 

3,572,996

 

  

 

3,290,917

 

Growth $

  

 

282,079

 

     

Growth%

  

 

8.57%

 

     

NON-GAAP RECONCILIATION — ADJUSTED OPERATING INCOME

(Unaudited; USD in Thousands)

   

12 Months Ended

 
  
    Aug. 31, 2021   Aug. 31, 2020 

Operating income

  

$

158,020

 

  

$

122,468

 

Adjustments:

          

Aeropost operating loss

  

 

6,212

 

  

 

14,854

 

FX liquidity premium (1)

  

 

(15,760)

 

  

 

N/A

 

 

    LOGO

PRICESMART,  INCPriceSmart, Inc.

9740  SCRANTON  ROAD

SAN  DIEGO,  CA  92121-1745

Notice of 2022 Annual Meeting of Stockholders and Proxy Statement
 A-1


Appendix A (continued)

LOGO

   

12 Months Ended

 
  
    Aug. 31, 2021   Aug. 31, 2020 

Earned over-achievement bonus expense

  

 

3,206

 

  

 

216

 

Severance

  

 

N/A

 

  

 

3,671

 

Adjusted Operating Income

  

 

151,678

 

  

 

141,209

 

Adjusted Operating Income as a Percentage of Adjusted Sales

  

 

4.25%

 

  

 

4.29%

 

(1)

VOTE BY INTERNET - www.proxyvote.com

UseIn order to responsibly manage the Internetilliquidity situation in Trinidad, management added an FX liquidity premium to transmit your voting instructionsthe price of goods and services sold in Trinidad which was not budgeted. This amount was included in GAAP operating income and has been deducted for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.incentive compensation over-achievement calculation purposes.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

A-2
 PriceSmart, Inc. Notice of 2022 Annual Meeting of Stockholders and Proxy Statement


LOGO

SCAN TO VIEW MATERIALS & VOTE w PRICESMART, INC. 9740 SCRANTON ROAD VOTE BY INTERNET SAN DIEGO, CA 92121-1745 Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Go to www.virtualshareholdermeeting.com/PSMT2022 You 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. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D63937-P63315 KEEP THIS PORTION FOR YOUR RECORDS — — — — — — — — — — — — — — — —  — — — — —  — — — — —  — — — — — — — — —  —  — — — — — — — — —  — — — — — — — — —  — — — — — — —DETACH AND RETURN THIS PORTION ONLY                  

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY PRICESMART, INC. For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark “For All Except” and write the The Board of Directors recommends you vote FOR number(s) of the nominee(s) on the line below. the following: 1. Election of Directors ! ! ! Nominees: 01) Sherry S. Bahrambeygui 06) Patricia Márquez 02) Jeffrey Fisher 07) David Price 03) Gordon H. Hanson 08) Robert E. Price 04) Beatriz V. Infante 09) David R. Snyder 05) Leon C. Janks 10) Edgar Zurcher The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. To approve, on an advisory basis, the compensation of the Company’s executive officers for fiscal year 2021. ! ! ! 3. To ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 31, 2022. ! ! ! NOTE: The proxies of the undersigned may vote according to their discretion on any other matter that may properly come before the meeting. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

For

All

Withhold
All
For All
Except
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
The Board of Directors recommends you vote FOR the following:
1.Election of Directors

Nominees

 01 Sherry S. Bahrambeygui 02 Jeffrey Fisher 03 Gordon H. Hanson 04 Beatriz V. Infante 05 Leon C. Janks 
 06 Mitchell G. Lynn 07 Gary Malino 08 Robert E. Price 09 Edgar Zurcher   

The Board of Directors recommends you vote FOR the following proposals:

ForAgainstAbstain

2.

To approve, by non-binding vote, executive compensation.

3.

Ratification of Ernst & Young LLP as Independent Accountants.

NOTE: The proxies of the undersigned may vote according to their discretion on any other matter that may properly come before the meeting.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date


LOGO

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D63938-P63315 PRICESMART, INC. Annual Meeting of Stockholders February 3, 2022 8:30 AM Pacific Time This proxy is solicited by the Board of Directors The undersigned stockholder(s) of PriceSmart, Inc., a Delaware corporation (the “Company”), hereby appoints Sherry S. Bahrambeygui and Michael L. McCleary, and each of them, as proxies for the undersigned, with full power of substitution in each of them, to attend the Annual Meeting of the Stockholders of the Company to be held on Thursday, February 3, 2022 at 8:30 AM Pacific Time via live audio webcast at www.virtualshareholdermeeting.com/PSMT2022, and any adjournment or postponement thereof, to cast, on behalf of the undersigned, all votes that the undersigned is entitled to cast at such meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and revokes any proxy heretofore given with respect to such meeting. This Proxy is solicited on behalf of the Board of Directors of the Company. The votes entitled to be cast by the undersigned will be cast as instructed on the reverse side. If this Proxy is executed, but no instruction is given, the votes entitled to be cast by the undersigned will be cast “FOR” the nominees for directors listed in Proposal 1, “FOR” Proposal 2 and “FOR” Proposal 3. Continued and to be signed on reverse side

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice & Proxy Statement & Annual Report are available atwww.proxyvote.com.

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — ——

LOGO

PRICESMART, INC

Annual Meeting of Stockholders

February 6, 2020 10:00 AM

This proxy is solicited by the Board of Directors

The undersigned stockholder of PriceSmart, Inc., a Delaware corporation (the “Company”), hereby appoints Sherry S. Bahrambeygui and Francisco Velasco, and each of them, as proxies for the undersigned, with full power of substitution in each of them, to attend the Annual Meeting of the Stockholders of the Company to be held on Thursday, February 6, 2020 at 10 a.m. Pacific Time, and any adjournment or postponement thereof, to cast, on behalf of the undersigned, all votes that the undersigned is entitled to cast at such meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and revokes any proxy heretofore given with respect to such meeting.

This Proxy is solicited on behalf of the Board of Directors of the Company. The votes entitled to be cast by the undersigned will be cast as instructed on the reverse side. If this Proxy is executed, but no instruction is given, the votes entitled to be cast by the undersigned will be cast “FOR” the nominees for directors listed in Proposal 1, “FOR” Proposal 2 and “FOR” Proposal 3.

Continued and to be signed on reverse side