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| o | Fee computed on table below per Exchange Act Rules 14a-6(i) | ||
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| 4) Date Filed: | |||
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NOTICE OF ANNUAL MEETING OF GAP INC. SHAREHOLDERS
DATE AND TIME |
10:00 a.m., San Francisco Time | |
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ITEMS OF BUSINESS | • Elect • Ratify the selection of Deloitte & Touche LLP as our independent registered public accounting • Hold an advisory vote to approve the • Transact such other business as may properly come before the meeting. | |
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INTERNET AVAILABILITY | In accordance with U.S. Securities and Exchange Commission rules, we are using the Internet as our primary means of furnishing our proxy materials to most of our shareholders. Rather than sending those shareholders a paper copy of our proxy materials, we are sending them a notice with instructions for accessing the materials and voting via the Internet. We believe this method of distribution makes the proxy distribution process more are available at: www.gapinc.com (follow the Investors, | |
PROXY VOTING | Whether or not you plan to attend the Annual Meeting, please vote as soon as possible. | |
| You are entitled to attend the Annual Meeting, | |
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By Order of the Board of Directors, | ||
PLACE
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RECORD DATE You must have been a shareholder of record at the close of business on March 23, 2020 to vote at the Annual Meeting. | ||
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Julie Gruber Corporate Secretary April | ||
PROXY SUMMARY
References in this Proxy Statement to “Gap Inc.,” “the Company,” “we,” “us,” and “our” refer to The Gap, Inc.
These proxy materials are being delivered in connection with the solicitation of proxies by the Board of Directors of The Gap, Inc. for use at our Annual Meeting of Shareholders to be held via the Internet through a virtual web conference at www.virtualshareholdermeeting.com/GAP2020 on May 17, 2017,19, 2020, at 10:00 a.m., San Francisco Time, at Gap Inc. Headquarters, Two Folsom Street, San Francisco, California 94105 and at any adjournment or postponement thereof (the “Annual“2020 Annual Meeting”).
On or about April 4, 2017,7, 2020, we commenced distribution of this Proxy Statement and the form of proxy to our shareholders entitled to vote at the Annual Meeting.
Agenda
AGENDA | VOTING SHARES | ||||||
| Items of Business | Management Recommendation |
| Page No. | The holders of common stock at the close of business on March 23, 2020 (the “Record Date”) are entitled to one vote per share on each matter voted upon at the Annual Meeting or any adjournment or postponement thereof. As of the Record Date, there were 372,639,457 shares of common stock outstanding. | |||
The Board recommends you vote | Page | You may vote your shares by: | |||||
The Board recommends you vote | Page 20 |  |
2020 Annual Meeting: www.proxyvote.com By Internet during the 2020 Annual Meeting: www.virtualshareholdermeeting.com/GAP2020 | ||||
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The Board recommends you vote | Page 23 | ||||||
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Voting Shares
The holders of common stock at the close of business on March 20, 2017 (the “Record Date”) are entitled to one vote per share on each matter voted upon at the Annual Meeting or any adjournment or postponement thereof. As of the Record Date, there were 400,220,798 shares of common stock outstanding.
You may vote your shares by:
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TABLE OF CONTENTS
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Questions and Answers about the Annual Meeting and Voting | |||||
PROPOSALS REQUIRING
NOMINEES FOR ELECTION AS DIRECTORS
Election Process
Directors will be elected at the Annual Meeting to serve until the next Annual Meeting and until their successors are elected. The Governance and Sustainability Committee of the Board of Directors has nominated the persons whose names are set forth below, all of whom are current directors.
Director Nominations
The Board of Directors has no reason to believe that any of the nominees will be unable to serve. However, if any nominee should for any reason be unavailable to serve, the Board of Directors may reduce the number of directors fixedfixed in accordance with our Bylaws, or the proxies may be voted for the election of such other person to the officeoffice of director as the Board of Directors may recommend in place of the nominee. Set forth below is certain information concerning the nominees, including age, experience, qualificationsqualifications and principal occupation during at least the last fivefive years, based on data furnished by each nominee.
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF EACH OF THE FOLLOWING NOMINEES. |
| Amy Bohutinsky | ||
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Director since 2018 Committee Membership: Audit & Finance | Venture Partner of TCV, a venture firm, since July 2019. Chief Operating Officer of Zillow Group, Inc., an online real estate database company, from 2015 to 2019. Chief Marketing Officer, Zillow Group, Inc., from 2011 to 2015. Director of Zillow Group, Inc. As an experienced leader and brand builder, Ms. Bohutinsky brings extensive strategic and operational expertise in multi-brand strategy, marketing, investor relations, communications, digital, consumer products, facilities, and human resources and talent management. |
| John J. Fisher | ||
 | Age: 58 Director since
| Executive Vice Chairman of Mr. Fisher brings extensive financial acumen, as well as executive leadership and risk management experience. In addition, he possesses deep retail industry and consumer product expertise having managed investments in a vast array of consumer goods and services companies. |
| Robert J. Fisher | ||
 | Age: 65 Director since 1990 Committee Membership: Governance & Sustainability (Chair) | Interim President and Chief Executive Mr. Fisher has |
| William S. Fisher | ||
 | Age: 62 Director since Committee Membership: None | Founder and Chief Executive Mr. Fisher brings extensive global retail and business experience to the Board as a result of his many years serving in a variety of high-level positions across Gap Inc. | |
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| Tracy Gardner | ||
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Director since Committee Membership: Compensation & Management Development (Chair); Governance & Sustainability | Principal of Tracy Gardner Consultancy, since 2010. Chief Executive With over 30 years of experience, |
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| Isabella D. Goren | ||
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Director since Committee Membership: Audit & Finance | Chief Financial Ms. Goren has broad experience in a number of key corporate functions, including |
| Bob L. Martin | ||
 | Age: 71 Director since Committee Membership: None | Chairman of the Board of Gap Inc. and an advisor to our new Chief Executive Officer, a non-executive employee role, since March 2020; Lead Independent Director of Gap Inc. from 2003 to Mr. Martin | |
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| Amy Miles | ||
 | Age: 53 Director since 2020 Committee Membership: None | Former Chairman and Chief Executive Officer of Regal Entertainment Group, a global theater chain, from 2015 to 2018. Chief Executive Officer, Regal Entertainment Group from 2009 to 2015. Executive Vice President, Chief Financial Officer and Treasurer, Regal Entertainment Group from 2002 to 2009. Director of Norfolk Southern Corporation. As a former Chairman, Chief Executive Officer and Chief Financial Officer, Ms. Miles has extensive finance, accounting, and management experience. In addition, she brings expertise in information technology, marketing, and strategic planning. |
| Jorge P. Montoya | ||
 | Age: 73 Director since Committee Membership: Compensation & Management Development | President, Global Snacks & Beverages, and President, Latin America, of The
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| Chris O'Neill | ||
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Director since Committee Membership: Compensation & Management Development | Partner, Portag3 Ventures, the venture capital arm of Sagard Holdings, since February 2020. Chairman, President and Chief Executive
Mr. O’Neill's experience as a |
| Mayo A. Shattuck III | ||
 | Age: 65 Director since Committee Membership: Audit & Finance (Chair); Governance & Sustainability | Non-Executive Chairman of Exelon Corporation, an energy company, since 2013. Executive Chairman of Exelon Corporation
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| Elizabeth A. Smith | ||
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Director since
| Former Chairman and Chief Executive As a former Chairman and Chief Executive Officer, Ms. |
| Sonia Syngal | ||
 | Age: 50 Director since 2020 Committee Membership: None | President and Chief Executive Officer of As a result of her service as President and Chief Executive Officer of Old Navy, as well as her service in other senior positions at Gap Inc., Ms. Syngal has extensive experience as a leader in the global |
John J. Fisher, Robert J. Fisher, and William S. Fisher are brothers. Information concerning our executive officersofficers who are not also directors is set forth in our Annual Report on Form 10-K for the fiscalfiscal year ended January 28, 2017.
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Director Independence
The Board of Directors has determined that the following directors are independent under the New York Stock Exchange (“NYSE”) rules and have no direct or indirect material relationships with the Company:
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| Isabella D. Goren | Mayo A. Shattuck III |
John J. Fisher | Amy Miles | Elizabeth Smith |
| Robert J. Fisher | Jorge P. Montoya | |
| William S. Fisher |
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†Mr. Goldner served until the 2019 Annual Meeting.
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Corporate Governance
CORPORATE GOVERNANCE
GUIDELINESCorporate Governance Guidelines
We have adopted Corporate Governance Guidelines that outline, among other matters, the role and functions of the Board, the responsibilities of the various Board committees, and the procedures for
reporting concerns to the Board. Our Corporate Governance Guidelines are available at www.gapinc.com (follow the Investors, Governance, Guidelines links).
Additional Corporate Governance Information
 | Our Corporate Governance Guidelines are available at www.gapinc.com (follow the Investors, Governance, Corporate Governance Guidelines links). |
Governance and Corporate Compliance sections of www.gapinc.com (follow the Investors link). Those sections include:
COBC Hotline (866) GAP-CODE or online at speakup.gapinc.com. Callers from outside North America must dial their country’s AT&T Direct Access Code, which can be found at
speakup.gapinc.com. CodeCOBC Hotline calls are answered by a live operator from24 hours a day/7 days a week by an outside company, and are free confidentialand confidential and may be made anonymously. Accounting, auditing, and other significantsignificant concerns are referredescalated by the Global Integrity departmentteam, as appropriate, including to the Audit and Finance Committee.
Risk Oversight
Board Oversight of Risk
BOARD OVERSIGHT OF RISK
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While the Board of Directors has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk management. In particular, the Audit and Finance Committee focuses on financialfinancial and compliance risks, and oversees the data privacy and cybersecurity programs, and the Compensation and Management Development Committee sets employee incentives with the goal of encouraging an appropriate level of risk-taking, consistent with the Company’s business strategies.
Compensation Risk Assessment
COMPENSATION RISK ASSESSMENT
Management’s assessment was also presented to the Company’s Chief Compliance OfficerOfficer and the Chair of the Board’s Compensation and Management Development Committee. As a result of management’s review, the Company determined that any risks arising from its compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
Communication with Directors
Interested parties can send direct communications to our Board of Directors (through our Chairman and Corporate Secretary) by email to: board@gap.com.
Code of Business Conduct
| Interested parties can send direct communications to our Board of Directors (through our Chairman and Corporate Secretary) by email to: board@gap.com. |
Business Conduct is available at www.gapinc.com (follow the Investors, Corporate Compliance, Code of Business Conduct links).
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| OurCode of Business Conductis available at www.gapinc.com (follow the Investors, Corporate Compliance, Code of Business Conduct links). |
Policies and Procedures with Respect to Related Party Transactions
The Board is committed to upholding the highest legal and ethical conduct in fulfillingfulfilling its responsibilities and recognizes that related party transactions can present a heightened risk of potential or actual conflictsconflicts of interest. The Compensation and Management Development Committee’s charter requires that the members of that Committee, all of whom are independent directors, approve all of the Company’s executive compensation policies and programs and all compensation awarded to executive officers.officers. The Audit and Finance Committee’s charter requires that the members of the Audit and Finance Committee, all of whom are independent directors, review and approve transactions with the Company involving management and/or members of the Board of Directors that are not otherwise subject to the approval of the Compensation and Management Development Committee and would require disclosure under SEC rules. In the event a transaction involves a committee member, that member will recuse him or herself from the approval of the transaction.
In addition, the Audit and Finance Committee oversees the Company’s Corporate Compliance Program, which includes procedures for the (i) receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and (ii) confidential,confidential, anonymous submission by employees and others of concerns regarding questionable accounting or auditing matters and other matters under the Company’s Code of Business Conduct.
Our AmendedSee "Policies and Restated Bylaws provide that ourProcedures with Respect to Related Party Transactions", above, for a description of the Company's policies and procedures for the review and approval of Related Party Transactions. The transactions described above were approved by the Audit and Finance Committee.
We believe in the importance of independent oversight. We ensure that this oversight is truly independent and effective through a variety of means, including:
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Governance and Sustainability Committee
The Board’s Governance and Sustainability Committee is composed solely of independent directors, as defined under NYSE rules.
This Committee assists the Board of Directors in fulfillingfulfilling its oversight responsibilities relating to the Company’s corporate governance matters, including the development of corporate governance guidelines, periodicannual evaluation of the Board, its committees and individual directors, identificationidentification and selection of director nominees, oversight of the Company’s programs, policies and practices relating to social and environmental issues, impacts and strategies, and such other duties as directed by the Board of Directors.
The Committee’s charter is available at www.gapinc.com (follow the Investors, Governance, Board of Directors, Board Committees links).
Nomination of Directors
| The Committee’s charter is available at www.gapinc.com (follow the Investors, Governance, Governance and Sustainability Committee Charter links). |
NOMINATION OF DIRECTORS
The Committee may also engageidentifies desired attributes and experience—classifying those that are prioritized and mandatory versus those that are ideal but not mandatory—and engages third-party search firms as independent consultants to identify potential director nominees based on identifiedthese criteria and a needs assessment. The Committee, in collaboration with the consultant, may develop targeted search specifications. These consultants have also assisted the Committee in identifying a diverse pool of qualifiedqualified candidates and in evaluating and pursuing individual candidates at the direction of the Committee.
procedure may be obtained at www.gapinc.com (follow the Investors, Governance links) or to any shareholder on request by writing to our Corporate Secretary at the above address.
Qualifications and Diversity of Board Members
| A copy of the full text of the Bylaw provisions relating to our advance notice procedure may be obtained at www.gapinc.com (follow the Investors, Governance links) or by any shareholder on request by writing to our Corporate Secretary at the above address. |
QUALIFICATIONS AND DIVERSITY OF BOARD MEMBERS
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having one or more of these core competencies, director nominees are identifiedidentified and considered based on the basis of knowledge, experience, integrity, leadership, reputation, background, qualifications,viewpoint, qualifications, gender, race/ethnicity, personal characteristics, and ability to understand the Company’s business.business, as well as their integrity, inclination to engage and intellectual approach. The Board believes that varying tenures and backgrounds create a balance between directors with a deeper knowledge of the Company's business, operations and history, and directors who bring new and fresh perspectives, and that this overall tenure, professional, personal, gender, and racial/ethnic diversity is important to the effectiveness of the Board’s oversight of the Company. Accordingly, diversity is a factor that is considered in the identificationidentification and recommendation of potential director candidates. In this regard, of the tenthirteen nominees for director, threesix are femalewomen and two are ethnically diverse. In addition, all director nominees are pre-screened to ensure that each candidate has qualificationsqualifications and experience that complement the overall core competencies of the Board. The screening process also includes conducting a background evaluation and an independence determination. The Board believes that its criteria for selecting board nominees are effective in promoting overall diversity.
Evaluation of Directors
The Governance and Sustainability Committee is responsible for overseeing a formal evaluation process to assess the composition and performance of the Board, each committee, and each individual director on an annual basis. The assessment is conducted to identify opportunities for improvement and skill set needs, as well as to ensure that the Board, committees, and individual members have the appropriate blend of diverse experiences and backgrounds, and are effective and productive. As part of the process, each member completes a survey, or participates in an interview or other method the Committee utilizes to seek feedback. While results are aggregated and summarized for discussion purposes, individual responses are not attributed to any individual and are kept confidentialconfidential to ensure honest and candid feedback is received. The Committee discusses opportunities and makes recommendations for improvement as appropriate to the full Board, which implements agreed upon improvements. The Committee Chair also meets privately with individual Board members to provide feedback specificspecific to each director received during the evaluation process. A director will not be nominated for reelection unless it is affirmativelyaffirmatively determined that he or she is substantially contributing to the overall effectiveness of the Board.
Sustainability
SUSTAINABILITY
please see our website and most recent Sustainability Report available at www.gapinc.com (follow the Sustainability link).
Audit and Finance Committee
| For more information regarding our commitment to sustainability, please see our website and most recent Sustainability Report available at www.gapinc.com (follow the Sustainability link). |
This Committee assists the Board of Directors in fulfillingfulfilling its oversight responsibilities relating to the integrity of our financialfinancial statements, adequacy of internal controls, compliance with legal and regulatory requirements, the qualifications and independence of the registered public accounting firm’s qualifications, independencefirm and the performance of its audits, the performance of the Internal Audit function, the effectiveness of the corporate compliance program, financefinance matters, and such other duties as directed by the Board of Directors. In addition, the Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm.
The Committee’s charter is available at www.gapinc.com (follow the Investors, Governance, Board of Directors, Board Committees links).
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| The Committee’s charter is available at www.gapinc.com (follow the Investors, Governance, Audit and Finance Committee Charter links). |
AUDIT COMMITTEE FINANCIAL EXPERT
Audit Committee Financial Expert
Our Board of Directors has determined that the Audit and Finance Committee has two members who are “audit committee financialfinancial experts” as determined under Regulation S-K Item 407(d)(5) of the Securities Exchange Act of 1934: Mr. Shattuck and Ms. Goren, both of whom are independent directors as determined under applicable NYSE listing standards.directors. See Mr. Shattuck'sShattuck’s and Ms. Goren'sGoren’s biographies on pages 2-3in "Nominees for Election as Directors" for information regarding their relevant experience.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
This Committee assists the Board of Directors in fulfillingfulfilling its oversight responsibilities relating to executive officerofficer and director compensation, succession planning for senior management, development and retention of senior management, and such other duties as directed by the Board of Directors. The
Committee’s charter is available at www.gapinc.com (follow the Investors, Governance, Board of Directors, Board Committees links).
| The Committee’s charter is available at www.gapinc.com (follow the Investors, Governance, Compensation and Management Development Committee Charter links). |
Compensation Committee InterlocksCOMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2016, Mr. De SoleMs. Reese (who is not standing for reelection), Mr. Goldner, Mr. Martin, and Ms. Tsang served on the Compensation and Management Development Committee of the Board of Directors. No member of the Committee was at any time during fiscal 2019 or at any other time an officer or employee of the Company, and no member of the Committee had any relationship requiring disclosure under Item 404 of Regulation S-K. During fiscal 2016,fiscal 2019, none of our executive officersofficers served on the board of directors or compensation committee of any company where one of that company’s executive officersofficers served as one of our directors.
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BOARD MEETINGS
Board Meetings
The Board met sixnine times during fiscal 2016.fiscal 2019. The following table lists the current members of each of the committees and the number of committee meetings held during fiscal 2016:
Name | Audit & | Compensation & | Governance & |
Domenico De Sole (not standing for reelection) |
| X |
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Robert J. Fisher |
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| Chair |
William S. Fisher |
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Tracy Gardner |
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Brian Goldner |
| X |
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Isabella D. Goren | X |
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Bob L. Martin |
| Chair | X |
Jorge P. Montoya | X |
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Arthur Peck |
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Mayo A. Shattuck III | Chair |
| X |
Katherine Tsang |
| X |
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Number of Meetings | 8 | 8 | 4 |
| Name | Audit & Finance | Compensation & Management Development | Governance & Sustainability |
| Amy Bohutinsky | ● | ||
| John J. Fisher | |||
Robert J. Fisher(1) | Chair | ||
| William S. Fisher | |||
Tracy Gardner(2) | Chair | ● | |
| Isabella D. Goren | ● | ||
| Amy Miles | |||
Bob L. Martin(3) | |||
| Jorge P. Montoya | ● | ||
| Chris O'Neill | ● | ||
Lexi Reese (not standing for reelection) | ● | ||
| Mayo A. Shattuck III | Chair | ● | |
| Elizabeth Smith | |||
| Sonia Syngal | |||
| Number of Meetings | 8 | 10 | 13 |
(1) | Mr. Fisher stepped down from his position as a member and Chair of the Governance & Sustainability Committee while serving as Interim President and CEO of the Company from November 2019 to March 2020. |
(2) | Ms. Gardner was appointed to the Governance & Sustainability Committee in November 2019. Ms. Gardner served on the Audit & Finance Committee until March 2020. Also in March 2020, Ms. Gardner was appointed to the Compensation & Management Development Committee and to serve as its Chair. |
(3) | Mr. Martin was appointed as the Chair of the Governance & Sustainability Committee in November 2019. Mr. Martin served as the Chair of both the Compensation & Management Development Committee and the Governance & Sustainability Committee until he stepped down from each committee in March 2020 in connection with his service as an advisor to our new CEO, a non-executive employee role. |
The non-management directors are typically scheduled to meet without the presence of management during each regularly scheduled Board meeting. Our Chairman, Robert Fisher, isAs no Lead Independent Director has currently been designated, the independent directors designate at each meeting an independent director responsible for organizing, managing and presiding over the non-management and independent director sessions of the Board, and reporting on outcomes of thesuch sessions to the CEO, as appropriate.
ATTENDANCE OF DIRECTORS AT ANNUAL MEETINGS OF SHAREHOLDERS
STOCK OWNERSHIP GUIDELINES FOR DIRECTORS
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for executives, described on page 32. in "Executive Compensation and Related Information—Compensation Discussion and Analysis—Stock Ownership Requirements for Executive Officers / Hedging and Pledging Prohibitions".
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Compensation of Directors
COMPENSATION OF DIRECTORS
Retainer and Meeting Fees
The table below shows the annual retainer, attendance fees, and committee chair retainer we paid to our non-employee directors in fiscal 2016,fiscal 2019, as well as the amounts payable for fiscal 2017:
Fiscal Year 2016 and 2017 Director Cash Compensation | |||||||
| 2016 | 2017 | |||||
Annual Retainer | $ | 75,000 | $ | 80,000 | |||
Annual Retainer for Committee Members |
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| Audit and Finance Committee | 0 | 16,000 | ||||
| Compensation and Management Development Committee | 0 | 12,000 | ||||
| Governance and Sustainability Committee | 0 | 8,000 | ||||
Additional Annual Retainer for Committee Chairs |
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| Audit and Finance Committee | 20,000 | 20,000 | ||||
| Compensation and Management Development Committee | 20,000 | 20,000 | ||||
| Governance and Sustainability Committee | 15,000 | 15,000 | ||||
Additional Annual Retainer for Chairman of the Board | 200,000 | 200,000 | |||||
Fee per regularly scheduled Committee Meeting | 2,000 | 0 | |||||
| 2019 | 2020 | |||||
| Annual Retainer | $ | 80,000 | $ | 80,000 | ||
| Annual Retainer for Committee Members | ||||||
| Audit and Finance Committee | 16,000 | 16,000 | ||||
| Compensation and Management Development Committee | 12,000 | 12,000 | ||||
| Governance and Sustainability Committee | 8,000 | 10,000 | ||||
| Additional Annual Retainer for Committee Chairs | ||||||
| Audit and Finance Committee | 20,000 | 25,000 | ||||
| Compensation and Management Development Committee | 20,000 | 20,000 | ||||
| Governance and Sustainability Committee | 15,000 | 15,000 | ||||
Additional Annual Retainer for Chairman of the Board(2) | 200,000 | 200,000 | ||||
Additional Annual Retainer for Lead Independent Director(3) | 40,000 | 40,000 | ||||
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(2) | Applicable to Mr. Fisher's service during fiscal years 2019 and 2020 when he served as Chairman of the |
(3) | Applicable to Mr. Martin's service from November 2019 to March 2020 when he served as Lead Independent Director. |
Employee directors (including Mr. Martin and Ms. Syngal) are not eligible for the annual retainer or attendance fees and are not eligible to serve on committees.
Equity Compensation
BeginningIn connection with Mr. Martin's service as Chairman of the Board and as an advisor to our new CEO, a non-executive employee role, he will be eligible to earn an annual base salary of $750,000 and an annual target bonus of 100% of base salary, based on the same metrics as our CEO, which will be prorated to his start date with a payout that can range from 0% to 200%. Mr. Martin also received a grant of time-based restricted stock units with a grant value of approximately $1,000,000, which will vest one year following the date of grant. Mr. Martin has agreed to hold and not sell or transfer any shares issued to him following the vesting of such restricted stock units for two years following the vesting date, except in 2017,the event he no longer provides services to the Company in any capacity (whether as an employee, director or consultant). The time-based vesting condition will accelerate if Mr. Martin is involuntarily terminated by the Company for reasons other than cause, death or disability. Mr. Martin is not entitled to any compensation under our non-employee director compensation program while he serves as an advisor to our CEO.
The annual stock units granted to continuing non-employee directors following the Company’s annual shareholders’ meeting, as well as the initial grant made to any non-employee director who is firstfirst elected to the Board at the Company’s annual shareholders’ meeting, are granted on June 30 of each year; provided, however, that if the Company’s annual shareholders’ meeting takes place after June 30, then the related stock unit grants will be granted on the firstfirst business day following that meeting. All initial stock units to new non-employee directors who are appointed other than at the annual shareholders’ meeting are granted on the date of appointment. The number of stock units is rounded down to the nearest whole share. These stock units are fully-vested but are subject to a three-year deferral period. During the deferral period,
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the stock units earn dividend equivalents which are reinvested in additional units annually. Following the deferral period, shares in an amount equal in value to the stock units, including units acquired through dividend equivalent reinvestment, will be issued to each non-employee director unless a further deferral election has been made; provided, however, that shares and accumulated dividend equivalents will be issued immediately upon ceasing to be a director of the Company.
Expense Reimbursement and Other Benefits
We also pay for or reimburse directors for approved educational seminars and for travel expenses related to attending Board, committee, and approved Company business meetings. Additionally, we provide non-employee directors access to officeoffice space and administrative support for Company business from time to time.
Directors and their spouses are eligible to receive discounts on our merchandise on terms similar to the Gap Inc. corporate employee merchandise discount policy.
We established The Gap, Inc. Deferred Compensation Plan (“DCP”) whereby highly compensated employees, including executive officers,officers and non-employee directors, may elect to defer receipt of certain eligible income. The DCP allows eligible employees to defer a percentage of their salary and bonus on a pre-tax basis, and allows non-employee directors to defer their retainers and meeting fees. The deferred amounts are indexed to reflectreflect the performance of the participant’s choice of approved investment funds. Non-employee director deferrals are not matched, and above-market or preferential interest rate options are not available on deferred compensation.
Directors are eligible to participate in our Gift Match Program available to all employees, under which we match contributions to eligible nonprofitnonprofit organizations, up to certain annual limits. In fiscal 2016,calendar year 2019, the annual limit for non-employee directors was $15,000 under the Gift Match Program. Art Peck, our former CEO, had an annual matching limit of $100,000.
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DIRECTOR COMPENSATION SUMMARY
Director Compensation Summary
The following table sets forth certain information regarding the compensation of our directors who served in fiscal 2016,fiscal 2019, which ended January 28, 2017.
Name (1) | Fees | Stock | Option | Change in | All Other | Total | ||||||||||||
Domenico De Sole | 83,000 | 139,988 | 0 | 0 | 17,044 | 240,032 | ||||||||||||
Robert J. Fisher | 298,000 | 139,988 | 0 | 0 | 15,261 | 453,249 | ||||||||||||
William S. Fisher | 75,000 | 139,988 | 0 | 0 | 15,261 | 230,249 | ||||||||||||
Tracy Gardner | 75,000 | 88,975 | 0 | 0 | 336 | 164,311 | ||||||||||||
Brian Goldner | 41,500 | 139,994 | 0 | 0 | 0 | 181,494 | ||||||||||||
Isabella D. Goren | 91,000 | 139,988 | 0 | 0 | 15,533 | 246,521 | ||||||||||||
Bob L. Martin | 115,000 | 139,988 | 0 | 0 | 10,261 | 265,249 | ||||||||||||
Jorge P. Montoya | 101,000 | 139,988 | 0 | 0 | 15,145 | 256,133 | ||||||||||||
Mayo A. Shattuck III | 119,000 | 139,988 | 0 | 0 | 8,376 | 267,364 | ||||||||||||
Katherine Tsang | 97,000 | 139,988 | 0 | 0 | 168 | 237,156 | ||||||||||||
Padmasree Warrior | 39,500 | 0 | 0 | 0 | 0 | 39,500 | ||||||||||||
Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(4) | Total ($) | ||||||
| Amy Bohutinsky | 92,000 | 105,628 | — | — | 1,570 | 199,198 | ||||||
| John J. Fisher | 80,000 | 105,628 | — | — | — | 185,628 | ||||||
| William S. Fisher | 80,000 | 159,987 | — | — | 15,000 | 254,987 | ||||||
| Tracy Gardner | 96,000 | 159,987 | — | — | — | 255,987 | ||||||
Brian Goldner(5) | 46,000 | — | — | — | — | 46,000 | ||||||
| Isabella D. Goren | 96,000 | 159,987 | — | — | 10,000 | 265,987 | ||||||
| Bob L. Martin | 133,750 | 159,987 | — | — | 12,500 | 306,237 | ||||||
| Jorge P. Montoya | 103,000 | 159,987 | — | — | 10,870 | 273,857 | ||||||
| Chris O’Neill | 92,000 | 159,987 | — | — | 880 | 252,867 | ||||||
| Lexi Reese | 89,000 | 105,628 | — | — | 2,500 | 197,128 | ||||||
| Mayo A. Shattuck III | 124,000 | 159,987 | — | — | 15,000 | 298,987 | ||||||
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(1) |
is reported in the 2019 Summary Compensation Table and related executive compensation tables. Mr. Peck was compensated as our CEO and received no additional compensation as a director. Mr. Peck’s compensation is reported in the 2019 Summary Compensation Table and related executive compensation |
(2) | This column |
(3) | No stock options were granted to our directors in |
(4) | Amounts in this column |
(5) | Mr. Goldner did not stand for reelection on |
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PROPOSAL NO. 2 — Ratification of Selection ofIndependent Registered Public Accounting Firm
The Audit and Finance Committee of the Board of Directors has selected Deloitte & Touche LLP as our independent registered public accounting firmfirm for the fiscalfiscal year ending February 3, 2018.January 30, 2021. Deloitte & Touche LLP (or its predecessor firm)firm) has been retained as our independent registered public accounting firmfirm since 1976. If shareholders fail to ratify the selection of Deloitte & Touche LLP, the Audit and Finance Committee will reconsider the selection. If the selection of Deloitte & Touche LLP is approved, the Audit and Finance Committee, in its discretion, may still direct the appointment of a different independent auditing firmfirm at any time and without shareholder approval if the Audit and Finance Committee believes that such a change would be in the best interests of the Company and our shareholders.
| THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “ INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. |
Representatives of Deloitte & Touche LLP are expected to be present, available to make statements, and available to respond to appropriate shareholder questions at the 2020 Annual Meeting.
The following table sets forth the aggregate fees paid and accrued by us for audit and other services for the fiscalfiscal years ended January 28, 2017February 1, 2020 and January 30, 2016February 2, 2019 that were provided by our principal accounting firm,firm, Deloitte & Touche LLP, the member firmsfirms of Deloitte Touche Tohmatsu Limited, and their respective affiliatesaffiliates (collectively “Deloitte & Touche”).
Fiscal Year 2016 and 2015 Accounting Fees | ||||||
Fees (see notes below) | Fiscal Year 2016 | Fiscal Year 2015 | ||||
Audit Fees | $ | 4,793,300 | $ | 4,792,223 | ||
Audit-Related Fees | 209,079 | 233,401 | ||||
Tax Fees | 111,271 | 106,617 | ||||
All Other Fees | 6,886 | 4,500 | ||||
Total | $ | 5,120,536 | $ | 5,136,741 | ||
“Audit Fees” consists of fees for professional services rendered in connection with the integrated audit of our consolidated annual financial statements and internal controls over financial reporting, the review of our interim condensed consolidated financial statements included in quarterly reports, and the audits in connection with statutory and regulatory filings or engagements. “Audit-Related Fees” consists primarily of fees for professional services rendered in connection with the audit of our employee benefit plans, audit procedures required by store leases and capital verification reports. In fiscal year 2019, includes approximately $1.8 million of fees related to the separation of Old Navy, which, in January 2020, we announced we would no longer pursue. “Tax Fees” consists of fees billed for professional services rendered for tax compliance and tax advice. These services include assistance regarding federal, state and international tax compliance, and competent authority proceedings. “All Other Fees” consists of Deloitte subscription fees and fees for non-audit services related to product sourcing consulting.
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The Audit and Finance Committee approves the terms, including compensation, of the engagement of our independent registered public accounting firmfirm on an annual basis, and has a policy requiring pre-approval of all services performed by the firm.firm. This policy requires that all services performed by Deloitte & Touche, whether audit or non-audit services, must be pre-approved by the Audit and Finance Committee or a designated member of the Audit and Finance Committee, with any such services reported to the entire Audit and Finance Committee at the next scheduled meeting.
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Rotation
Rotation
The Audit and Finance Committee periodically reviews and evaluates the performance of Deloitte & Touche’s lead audit partner, oversees the required five-yearfive-year rotation of the lead audit partner responsible for our audit and, through the Committee’s Chair as representative of the Audit and Finance Committee, reviews and considers the selection of the lead audit partner. In addition, the Audit and Finance Committee periodically considers whether there should be a rotation of the independent registered public accounting firm.firm. At this time, the Audit and Finance Committee and the Board believe that the continued retention of Deloitte & Touche to serve as our independent registered public accounting firmfirm is in the best interests of the Company and our shareholders.
The Audit and Finance Committee assists the Board of Directors in fulfillingfulfilling its oversight responsibilities relating to the integrity of our financialthe Company’s financial statements, the adequacy of internal controls, compliance with legal and regulatory requirements, the qualifications and independence of the independent registered public accounting firm qualifications, independencefirm and the performance of its audits, the performance of the Internal Audit function, the effectiveness of the corporate compliance program, financefinance matters, and such other duties as directed by the Board of Directors. The Committee
operates under a written charter (available at www.gapinc.com, follow the Investors, Governance, Board of Directors, Board CommitteesAudit and Finance Committee Charter links) adopted by the Board of Directors. The Committee is composed exclusively of directors who are independent under New York Stock Exchange listing standards and Securities and Exchange Commission rules.
The Committee has reviewed and discussed the audited financialfinancial statements of the Company for the fiscalfiscal year ended January 28, 2017February 1, 2020 with the Company’s management. In addition, the Committee has discussed with Deloitte & Touche LLP, the Company’s independent registered public accounting firm,firm, the matters required to be discussed by the applicable Public Company Accounting Oversight Board and Securities and Exchange Commission requirements.
The Committee also has received the communications, including written disclosures and the letter from Deloitte & Touche LLP, required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Committee concerning independence, and the Committee has discussed the independence of Deloitte & Touche LLP with that firm.
Based on the Committee’s review and discussions noted above, the Committee recommended to the Board of Directors that the Company’s audited financialfinancial statements be included in the Company’s Annual Report on Form 10-K for the fiscalfiscal year ended January 28, 2017February 1, 2020 for filingfiling with the Securities and Exchange Commission.
Mayo A. Shattuck III (Chair)
Notwithstanding anything to the contrary in any of the Company’s previous or future filingsfilings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this Proxy Statement or future filingsfilings with the Securities and Exchange Commission, in whole or in part, this report shall not be deemed to be incorporated by reference into any such filing.
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PROPOSAL NO. 3 — Advisory Vote on the Frequency of the Advisory Vote on the Overall Compensation of The Gap, Inc.’s Named Executive Officers
Pursuant to Section 95114A of the Dodd-Frank Wall Street Reform and Consumer Protection Act, at least once every six years, the Company is required to submit for shareholder vote a non-binding resolution to determine whether the advisory vote on the compensation of the Company’s named executive officers should occur every one, two, or three years. When the Company last submitted this non-binding resolution for shareholder vote at the Annual Meeting of Shareholders in 2011, it recommended that shareholders vote to approve, on an advisory basis, to hold an advisory vote on the overall compensation of the Company’s named executive officers on an annual basis, which shareholders overwhelmingly supported.
The Board of Directors believes that submitting the advisory vote on executive compensation to shareholders on an annual basis continues to be the most appropriate option for the Company and its shareholders at this time.
The proxy card provides shareholders with four choices (every one, two, or three years, or abstain).
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PROPOSAL NO. 4 — Advisory Vote on the Overall Compensation ofThe Gap, Inc.’s Named Executive Officers
Pursuant to Section 951 of the Dodd-Frank Wall Street Reform and Consumer ProtectionSecurities Exchange Act, the Company is providing shareholders with an annual advisory (non-binding) vote on the overall compensation of our named executive officers.officers. Accordingly, the following resolution will be submitted for a shareholder vote at the 20172020 Annual Meeting:
“RESOLVED, that the shareholders of The Gap, Inc. (the ”Company“) approve, on an advisory basis, the overall compensation of the Company’s named executive officers,officers, as described in the Compensation Discussion and Analysis section, the accompanying compensation tables, and the related narrative disclosure pursuant to Item 402 of Regulation S-K, set forth in the Proxy Statement for this Annual Meeting.”
The Board and the Compensation and Management Development Committee, which is comprised entirely of independent directors, will consider the outcome of the shareholders’ non-binding advisory vote when making future executive compensation decisions to the extent they can determine the cause or causes of any significant positive or negative voting results.
As described in detail under the section entitled “Compensation“Compensation Discussion and Analysis,” our executive compensation program is designed to provide the level of compensation necessary to attract and retain talented and experienced executives, and to motivate them to achieve short-term and long-term goals, thereby enhancing shareholder value and creating a successful company. We are committed to tie pay to performance. Reflecting this commitment, dueperformance and continue to the fact that the Company did not meet its performance objectives in 2016, in most cases, certain compensation components to our named executive officers paid out below established targets, as further described on page 21 of the following Compensation Discussion and Analysis. Overall, we believe our executive compensation program meets each of our compensation objectives.
We were pleased to have received over 97%approximately 57% of all votes cast in support of the overall compensation of our executives at our 20162019 Annual Meeting of Shareholders. This was a departure from prior years, where support ranged from 97% to over 99%. Given the lower vote in support of the overall compensation of our executives at our 2019 Annual Meeting of Shareholders, we broadened our shareholder outreach during fiscal 2019 and conducted outreach to shareholders representing approximately 45% of our total shares outstanding, which does not include approximately 43% of the outstanding shares that are owned by members of the Fisher family.
Shareholders are encouraged to read the “Compensation“Compensation Discussion and Analysis”Analysis” section of this Proxy Statement, the accompanying compensation tables, and the related narrative disclosures, which more thoroughly discuss how our compensation policies and procedures implement our compensation philosophy.
| THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO APPROVE, ON AN ADVISORY BASIS, THE OVERALL COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS BY VOTING |
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EXECUTIVE COMPENSATION
Back to ContentsAND RELATED INFORMATION
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Discussion and Analysis
Introduction
In this Compensation Discussion and Analysis, we discuss the following:
Executive Summary | page |
Compensation Objectives | page |
Elements of Compensation | page |
Other Compensation Actions | page 36 |
| Compensation Analysis Framework | page |
EXECUTIVE SUMMARY
Fiscal 2016 was a year in which we accelerated our transformation efforts to bring our customers the world's best clothing through creativity and innovation. At a glance:
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Interim President & Chief Executive Gap Inc. | Teri List-Stoll, Executive Vice President & Chief Financial | Executive Vice President, Global General Counsel & Chief Compliance Officer, Gap Inc. | Sonia Syngal, President & Chief Old Navy | |||||
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LISTENING TO OUR SHAREHOLDERS
Listening to Our Shareholders
Our Committee is comprised solely of experienced independent directors and has established effective means for communicating with shareholders. The Committee is very interested in the ideas and concerns of our shareholders regarding executive compensation and considers the Say-on-Pay vote when assessing our compensation practices. Our shareholders also have the opportunity for shareholders to cast a non-binding advisory vote on executive compensation at our Annual Meeting.
The Committee is very interested in theMeeting ("Say-on-Pay vote"). In addition, on an annual basis, we conduct outreach to some of our largest shareholders as another means to hear about ideas and any concerns from our shareholders.
| What We Heard | Changes Made in Response | ||
One-Time Time-Based Restricted Stock Unit Grant Ø Concerns with the one-time time-based restricted stock units granted to Mr. Peck. In June 2018, as the Company was in a critical phase within its transformation, the Committee, in consultation with the Board of Directors, determined it was crucial to retain Mr. Peck as well as increase his ownership stake in the Company to create further alignment with shareholder interests. In light of this, we granted restricted stock units to Mr. Peck covering 345,303 shares. The stock units would have cliff vested 100% after 3 years and he must have held the net shares issued upon vesting for an additional year. | ü | For fiscal 2020, the Company has made long-term incentive design changes, moving to a value-based approach with a set equity mix, ensuring that a majority of long-term incentives granted to all Executives will be performance-based. We also note that all of Mr. Peck’s 345,303 shares under his June 2018 grant were forfeited in connection with his termination. | |
Performance Metrics Ø Concerns that the performance stock and bonus plan are both predicated on annually set earnings goals. | ü | The current Long-Term Growth program (LGP) is based on two performance metrics: (i) average attainment of separate annual earnings goals that are established each year over three years, measured at the division level for those with division responsibilities and the corporate level for those with Company- wide responsibilities, and (ii) attainment of a three-year cumulative Company earnings goal set at the beginning of the same three-year period. For fiscal 2020, performance stock awards to Executives are expected to be based on: (i) attainment of a multi-year cumulative earnings goal, measured at the company level, and (ii) a multi-year relative total shareholder return modifier. Accordingly, the stock awards will no longer be based on annual earnings goals. | |
Our CEO’sIn November 2019, Mr. Peck was terminated from the position of President & CEO. As a result of Mr. Peck’s termination, the restricted stock units granted to him in 2018 covering 345,303 shares were canceled. In addition, his fiscal 2017-2019, fiscal 2018-2020 and fiscal 2019-2021 LGP shares were canceled and his fiscal 2019 bonus was not earned. Mr. Peck received separation benefits based on his termination without cause, as required under his Post-Termination Benefits Agreement, which is further described in "2019 Potential Payments Upon Termination".
| 15% | 84% | 1 | % | ||
| Salary | Long-Term Incentives | All Other Compensation | |||
The chart below shows the proportion of each component ofactual compensation received by our CEO’s fiscal 2016former CEO from 2017 to 2019, and demonstrates that his realized pay was significantly lower than his reported pay for all years during this period because his compensation was at risk.
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Compensation Governance
Overall, we believe that our fiscal 2019 executive compensation program met each of our compensation objectives and continues to demonstrate our strong commitment to pay for performance. The table below highlights key compensation practices – both the practices we believe support strong governance principles and the practices we have not implemented because we do not believe they would serve our shareholders’ long-term interests.
What we do | What we don’t do | |||
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We tie pay to performance. Our ongoing compensation programs are heavily weighted toward performance with limited perquisites. | û | No Long-Term Employment Agreements with Guarantees
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| ü | Tally Sheets We review tally sheets, which are intended to summarize key elements of total compensation and potential wealth accumulation, for our Executives prior to making annual compensation decisions. | û | No Golden Parachute Tax Gross-Ups
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| ü | Recoupment Policy We have an incentive compensation recoupment (“clawback”) policy covering our Executives. | û | No Repricing or Cash-out of Underwater Options
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| ü | Culture of Ownership We have executive stock ownership requirements
| û | No SERP or Executive Pension Plan We do not have a supplemental executive retirement plan (“SERP”) or executive pension plan. | |
| ü | No Hedging We prohibit Executives from engaging in any hedging or publicly-traded derivative transactions in Company stock. | û | No Change in Control Severance Arrangements or Single Trigger
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| ü | No Pledging We prohibit Executives from pledging Company stock as collateral for a loan or for any other purpose.
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We do not have incentive compensation arrangements for Executives that create potential material risk for the Company, based on a risk assessment conducted by the Company.
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| ü | Independent Compensation Consultant The Committee uses an independent compensation consulting firm, Frederic W. Cook & Co., Inc. The firm does not provide any other services to the Company. | û | No Dividends on Unearned PerformanceAwards We do not pay dividends on unearned performance awards. | |
| ü | Maximum Award Amounts The Committee establishes caps on incentive payouts with an appropriate balance between long-term and short-term objectives. | |||
Compensation Objectives
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• Support a performance-oriented culture; • Support our business strategy by motivating and rewarding achievement of short and long-term objectives, as well as individual contributions; • Attract and retain executive talent; • Link executive rewards to shareholder returns; and • Promote a culture of executive stock ownership. |
Our program rewards executives for the achievement of corporate and divisional financialfinancial and non-financialnon-financial objectives, for their individual contributions to these results, and for optimizing long-term returns to shareholders. The majority of each executive’s total compensation opportunity is weighted toward incentive compensation tied to the financialfinancial performance of the Company and aligned withto the long-term return to our shareholders. When we do not achieve targeted performance levels and/or our stock price does not appreciate, compensation that can be realized by our executives is substantially reduced. When we exceed targeted performance levels and/or our stock price appreciates, compensation that can be realized by our executives is substantially increased. We believe that this is the most effective means of aligning executive pay with our shareholders’ interests.
Elements of Compensation
The main componentselements of our fiscal 2019 executive compensation program are:
We have chosen these elements because we believe each supports achievement of one or more of our compensation objectives, and that together they have been and will continue to be effective in this regard. We also provide our Executives with benefits and limited perquisites that are available to a broader group of employees or that are intended to maximize productivity.
The use and weight of each compensation element is based on the judgment of the Committee regarding the importance of each compensation objective in supporting our business and talent strategies, as well as the structure of these elements for executives at other companies. Base salary, benefitsbenefits and perquisites represent less than half of each Executive’s potential compensation at target performance levels, to emphasize the importance of performance-based compensation.
Base Salary
BASE SALARY
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connection with promotions or other changes in responsibilities. The table below summarizes base salaries during fiscal 2016,fiscal 2019, and changes that occurred during the year.
Name | Base Salary | Base Salary | Comments | ||||
Arthur Peck | $ | 1,300,000 | $ | 1,335,000 | Salary was increased in March 2016 as part of the annual review by an amount slightly below the budgeted percentage increase for U.S. employees. | ||
Teri List-Stoll | N/A | $ | 875,000 | Ms. List-Stoll joined the Company in January 2017 as Executive Vice President & Chief Financial Officer. | |||
Sebastian DiGrande | N/A | $ | 730,000 | Mr. DiGrande joined the Company in May 2016 as Executive Vice President, Strategy & Chief Customer Officer. | |||
Jeff Kirwan | $ | 850,000 | $ | 900,000 | Salary was increased in March 2016 as part of the annual review to position Mr. Kirwan appropriately relative to other executives. | ||
Sonia Syngal | $ | 750,000 | $ | 875,000 | Salary was increased in April 2016 following Ms. Syngal’s appointment as Global President, Old Navy. | ||
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Sabrina Simmons | $ | 875,000 | $ | 875,000 | Ms. Simmons ceased to be Executive Vice President & Chief Financial Officer in January 2017. | ||
Annual Cash Incentive Bonus
| Name | Base Salary on 2/2/2019 | Base Salary on 2/1/2020 | Comments | |||||
| Robert Fisher | N/A | $ | — | Following Mr. Peck’s termination, Mr. Fisher stepped in to serve as Interim President & CEO, but did not receive compensation for this interim role. Mr. Fisher’s compensation as Chairman of the Board is further described in "Proposal No. 1 — Election of Directors—Compensation of Directors". | ||||
| Teri List-Stoll | $ | 925,000 | $ | 925,000 | Following Mr. Peck’s termination Ms. List-Stoll continued to lead Finance, IT and Real Estate and assumed interim leadership for the Separation Project Management Office and Global Supply Chain, while we conducted a search for the successor of Mr. Peck. During the duration of this interim assignment, given her broadened scope of responsibility, Ms. List-Stoll received a salary supplement of $20,000 per month starting in November 2019, which is paid quarterly starting February 2020 and is further described below in "Other Compensation Actions". | |||
| Mark Breitbard | $ | 950,000 | $ | 950,000 | Following Mr. Peck’s termination, Mr. Breitbard assumed interim leadership for all brands, excluding Old Navy, and the customer teams, while we conducted a search for the successor to Mr. Peck. During the duration of this interim assignment, given his broadened scope of responsibility, Mr. Breitbard received a salary supplement of $25,000 per month starting in November 2019, which is paid quarterly starting February 2020 and is further described below in "Other Compensation Actions". | |||
| Julie Gruber | $ | 680,000 | $ | 700,000 | Salary was increased in November 2019 in light of expanded responsibilities and to improve competitiveness. Following Mr. Peck’s termination, Ms. Gruber continued to lead Legal, Compliance, Government Affairs and Corporate Administration and assumed interim leadership for Human Resources, Communications, Loss Prevention, Foundation and Sustainability, while we conducted a search for the successor of Mr. Peck. During the duration of this interim assignment, given her broadened scope of responsibility, Ms. Gruber received a salary supplement of $20,000 per month starting in November 2019, which is paid quarterly starting February 2020 and is further described below in "Other Compensation Actions". | |||
| Sonia Syngal | $ | 1,100,000 | $ | 1,100,000 | ||||
| Former Executives | ||||||||
| Art Peck | $ | 1,550,000 | N/A | Mr. Peck was terminated in November 2019 and did not receive a pay increase during fiscal 2019. | ||||
| Neil Fiske | $ | 950,000 | N/A | Mr. Fiske was terminated in January 2020 and did not receive a pay increase during fiscal 2019. | ||||
We have anFor fiscal 2019, consistent with our philosophy of aligning Executive pay to performance, no annual cash incentive bonus programbonuses were paid for Executives to motivate and reward achievement of financial and individual objectives and to provide a competitive total compensation opportunity. Mr. Peck’s annual incentive bonus was based exclusively on earnings and net sales performance (weighted 75% and 25%, respectively) given his role as CEO and direct accountability for operating results. For Executives other than Mr. Peck, the annual incentive bonus was based on two components:
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In setting the fiscal 2016fiscal 2019 annual bonus structure, the Committee considered our business and talent priorities, andas well as the factors described below under “Compensation Analysis Framework.”Framework”. We determined that there was a need to incent achievement of objectives related to our performance culture and corporate objectives, in addition to our financial objectives, to successfully position the Company for long-term success. To support this goal, the Committee approved the annual cash incentive structure, which emphasizes financial results for the fiscal year and comprised 70% of the total opportunity, and accomplishments related to our performance culture and corporate objectives, which comprised 30% of the total opportunity. The table below describes the target annual bonus and potential payout range for each Executive. Ms. List-Stoll received a $400,000 sign-on
| 1. | Financial Performance Component. 70% of the total opportunity was based on the financial performance of the Company or a division of the Company; of this, 100% was based on earnings, given the importance of accountability for operating results, except for the Old Navy division, for which 75% was based on earnings and 25% on net sales, to drive top-line focus. |
| 2. | Performance Culture/Corporate Objectives Component. 30% of the total opportunity was based on demonstration of performance behaviors and achievement of corporate objectives. Gap Inc. earnings threshold must be met in order for this component to fund. |
| Name | Target Percentage of Base Salary | Potential Payout Range as a Percentage of Target | |||
| Teri List-Stoll | 100 | % | 0 – 200% | ||
| Mark Breitbard | 125 | % | 0 – 200% | ||
| Julie Gruber | 80 | % | 0 – 200% | ||
| Sonia Syngal | 125 | % | 0 – 200% | ||
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Financial Performance Component
Bonus payments based on financial performance are generally made under the Executive Management Incentive Compensation Award Plan, (“which has been approved by our shareholders. For fiscal 2019, the Committee set a minimum performance goal that needed to be achieved before payment of any bonus. Satisfaction of this goal established the maximum bonus that could be paid to each Executive MICAP”).(equal to the maximum set forth in the table above), subject to downward adjustment by the Committee based on achievement of the financial and performance culture/corporate objective goals and other factors determined by the Committee in its sole discretion. For fiscal 2019, this goal was positive net income, as adjusted for changes in accounting principles, acquisitions and dispositions, employee termination benefits, termination of real estate leases, legal claims, and certain business interruptions, as applicable. The Committee approvesdetermined that this minimum performance goal for fiscal 2019 had been achieved. The Committee then used negative discretion to determine the actual payout to each Executive based on performance against the financial goals as described below, as well as a qualitative assessment of individual performance.
Bonuses for fiscal 2016 financialfiscal 2019 financial performance were based solely on earnings (weightedbefore interest and taxes (“earnings”) for each Executive, except Ms. Syngal. For Ms. Syngal earnings were weighted 75%), and net sales (weightedwere weighted 25%) goals.. Earnings andand/or net sales were used to measure both Company andor division performance, depending on the Executive's scope of responsibility, in both cases subject to potential adjustment for certain pre-established items that are unusual in nature or infrequently occur. TheAn earnings measure was selected for fiscal 2016 andeither the sole measure or weighted
The following table shows fiscal 2016fiscal 2019 earnings goals and, in the case of Ms. Syngal, her net sales goals, expressed as a percentage of fiscal 2015fiscal 2018 actual results. Goals for fiscal 2016fiscal 2019 were set at realistic levels given our expected performance at the time they were established and were intended to provide a meaningful incentive for Executives to improve performance. Also shown are the actual weighted percentages achieved expressed, as a percentage of fiscal 2015fiscal 2018 actual results after adjustments made primarily to exclude goodwill impairmentall costs directly associated with the separation, any restructuring costs and restructuring charges,to normalize actuals against goals based on significant operating decisions, such as the acquisition of Janie and Jack and changes to accounting or allocation methodologies. No additional adjustments to the results were made other than neutralization of foreign exchange rate fluctuations.
| Name | Company / Division | 2019 Earnings / Net Sales Goals as a Percentage of Fiscal 2018 Actual Earnings / Net Sales | Actual Fiscal 2019 Percentage Achieved After Adjustments | ||||||||||||
| Threshold | Target | Maximum | Earnings | Net Sales | |||||||||||
| Teri List-Stoll | Gap Inc. | 85.5 | % | 101.4% | 104.9 | % | 78.4 | % | N/A | ||||||
| Mark Breitbard | Banana Republic | 87 | % | 102.4% | 106.5 | % | 77.8 | % | N/A | ||||||
| Julie Gruber | Gap Inc. | 85.5 | % | 101.4% | 104.9 | % | 78.4 | % | N/A | ||||||
| Sonia Syngal | Old Navy | 84.7% / 105.3% | 99.7% / 107.3% | 102.7% / 109.3% | 81.0 | % | 102.0 | % | |||||||
(1) | Gap Inc. and Banana Republic’s financial component is comprised of 100% earnings and Old Navy’s financial component is comprised of 75% earnings and 25% revenue. |
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Backweighted percentage achieved expressed as a percentage of 2018 actual results after adjustments to Contents
reduction.exclude all costs directly associated with the separation, any restructuring costs and to normalize actuals against goals based on significant operating decisions such as the acquisition of Janie and Jack and changes to accounting or allocation methodologies. No other adjustments to the results were made other than neutralization of foreign exchange rate fluctuations. Ms. Simmons, who leftfluctuations.
| Company | 2019 Earnings as a Percentage of Fiscal 2018 Actual Earnings | Actual Fiscal 2019 Percentage Achieved After Adjustments | ||||||||||
| Threshold | Target | Maximum | Earnings | |||||||||
| Gap Inc. | 85.5 | % | 101.4 | % | 104.9 | % | 78.4 | % | ||||
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Name | Company / | Threshold | Target Range | Maximum | Earnings | Net Sales |
Arthur Peck | Gap Inc. | 87.9% / 101.1% | 104.0-110.8% / | 115.1% / 104.4% | 96.4% | 98.8% |
Sebastian DiGrande | Gap Inc. | 87.9% / 101.1% | 104.0-110.8% / | 115.1% / 104.4% | 96.4% | 98.8% |
Jeff Kirwan | Gap Global | 101.8% / 98.1% | 127.4-132.6% / | 139.2% / 101.8% | 90.5% | 95.4% |
Sonia Syngal (1) | Gap Inc. | 87.9% / 101.1% | 104.0-110.8% / | 115.1% / 104.4% | 96.4% | 98.8% |
Old Navy | 91.6% / 102.3% | 107.8-112.8% / | 116.2% / 106.4% | 114.9% | 102.6% | |
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Individual Objectives Component
Executives other thanCommittee decides whether any adjustment is warranted for the CEO were eligible to receive bonuses based on individual performance and organizational objectives. At the beginning of the year, 32 objectives were established for Gap Inc. with shared accountability by Executives. These objectives consisted of initiatives centered on three key themes: (i) product, which included objectives on product design, production and distribution; (ii) customer experience, which included objectives for driving increased traffic and mobile advancements; and (iii) talent, which included objectives on talent acquisition and management.
For Executives other than Mr. Peck, the extent to which these objectives were met, partially met, or exceeded was assessed qualitatively by Mr. Peck after the end of the fiscal year.in a private session. In this regard, while certain of the objectives had quantitative components, there was no formulaic link between the extent to which a particular objective was satisfied and the ultimate payout that an Executive received. The CEO also had the discretion to consider some goals more heavily than others. In addition, in judgingassessing each Executive’s individual performance, the CEO took into account any additional initiatives andoutside those described above, challenges that the Executive faced over the course of the year, as well as earningsand financial performance are considered in determining a recommended payout. Payout amounts were then recommended to the Committee for consideration and approval.
Actual Bonuses
For fiscal 2016,fiscal 2019, performance against earnings andand/or net sales goals applicable to each Executive was below target levels for all Executives, except Ms. Syngal. The following table describes the calculation of the actual bonus for fiscal 2016 for each eligible Executive. In order to recruit him from his prior employer, Mr. DiGrande was paid a $1,000,000 signing bonus and his annual bonus for fiscal 2016 was guaranteed to be at least the target amount, prorated for time he was in the role during the fiscal year. Ms. SimmonsExecutives. Based on performance against financial goals, no Executive received a retention payment with repayment provisions in February 2015, of which a portionpayout. Mr. Peck, who was earned in 2016. For additional details regarding Ms. Simmons' retention payment, please see our 2016 Proxy Statement. Ms. Simmons, who leftterminated from the Company in February 2017,November 2019, and Mr. Fiske, who was terminated from the Company in January 2020, were not eligible to receive a payout and hashave been excluded from the table below.
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Name | Base | x | Target | x | ( | Actual | x | Weight | + | Actual | x | Weight ) | = | Actual |
Art Peck | $1,330,288 | x | 175% | x | ( | 39% | x | 100% | + | N/A | x | N/A ) | = | $917,511 |
Sebastian DiGrande (2) | $503,379 | x | 80% | x | ( | N/A | x | 75% | + | N/A | x | 25% ) | = | $402,703 |
Jeff Kirwan | $893,269 | x | 100% | x | ( | 0% | x | 75% | + | 60% | x | 25% ) | = | $133,990 |
Sonia Syngal (3) | $849,931 | x | 80% / 100% | x | ( | 39% / 124% | x | 75% | + | 150% | x | 25% ) | = | $992,501 |
| Name | Base Salary(1) | x | Target Percentage of Base Salary | x | ( | Actual Percentage Achieved: Financial Performance Component | x | Weight | + | Actual Percentage Achieved: Performance Culture/Business Objectives Component | x | Weight | ) | = | Funded Bonus | + | Individual Adjustment | = | Actual Bonus | |||||||||||||
| Teri List-Stoll | $ | 925,000 | x | 100 | % | x | ( | — | % | x | 70 | % | + | — | % | x | 30 | % | ) | = | $ | — | + | $ | — | = | $ | — | ||||
| Mark Breitbard | $ | 950,000 | x | 125 | % | x | ( | — | % | x | 70 | % | + | — | % | x | 30 | % | ) | = | $ | — | + | $ | — | = | $ | — | ||||
| Julie Gruber | $ | 684,944 | x | 80 | % | x | ( | — | % | x | 70 | % | + | — | % | x | 30 | % | ) | = | $ | — | + | $ | — | = | $ | — | ||||
| Sonia Syngal | $ | 1,100,000 | x | 125 | % | x | ( | — | % | x | 70 | % | + | — | % | x | 30 | % | ) | = | $ | — | + | $ | — | = | $ | — | ||||
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Long-Term Incentives
Stock-based long-term incentives align executive compensation and shareholder returns by linking a significant portion of total compensation to the performance of our stock.returns. Unlike some of the members of our peer group, we do not have a pension plan, and we rely on long-term incentives to provide a substantial percentage of each Executive’s potential retirement savings. Long-term incentives have typically consisted of stock options, stock units or performance shares. We have a mix of different grant types for executives to balance performance focus and potential compensation-related risk, but at least half of our regular annual grant value is intended to be in the form of performance shares for performance-based long-term pay delivery and shareholder value alignment.
In determining the fiscal 2019 long-term incentive structure and award amounts, the Committee considered the factors described below under “Compensation Analysis Framework,” including a review of market data for comparable positions and each individual’s accumulated vested and unvested awards, the current and potential realizable value over time using stock appreciation assumptions, vesting schedules, comparison of individual awards between Executives and in relation to other compensation elements, shareholder dilution and accounting expense.
We believe stock options focus Executives on managing the Company from the long-term perspective of an owner. Stock options provide value to the recipient only if the price of our stock increases. Because of this inherent linkage to increased shareholder returns, we believe stock options are an important component of executive long-term incentive compensation. However, we believe that this component as a percentage of total long-term incentive grant value should typically be weighted at less than 50% to balance performance focus and potential compensation-related risk, so that the majority of long-term incentive value at grant is placed on full-value awards, including those subject to achievement of performance goals. Award amounts for Executives were increased in fiscal 2016 in order to promote retention in a difficult retail industry environment and to further incentivize Executives. Ms. Syngal was granted additional stock options in April 2016 in connection with her appointment as Global President, Old Navy. Mr. DiGrande and Ms. List-Stoll received an initial stock option grant covering 325,000 shares and 200,000 shares, respectively, to induce them to join the Company. The options vest based on continued service at a rate of 25% annually beginning one year from the grant date. Awards were differentiated based
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on the Executive’s role in the organization and competitive practice. All stock options granted to employeesExecutives during fiscal 2016fiscal 2019 had an exercise price equal to 100% of the closing price of our stock on the date of grant or, for premium options, 110% of the closing price of our stock on the date of grant. The stock option grants received by our Executives are described in more detail in the"2019 Grants of Plan-Based Awards table on page 41.
Stock options typically vest based on continued service at a rate of 25% annually beginning one year from the grant date, which we have determined helps meet our retention objectives. We have also used other vesting schedules to align with timing of compensation being forfeited at a prior employer for new hires or to align with critical retention periods. Stock options are typically granted with a maximum term of ten years, and vested options are normally exercisable for three months following employment termination. Vesting is generally accelerated upon death, disability or retirement if the stock options are held for at least one year.
Stock Units and Performance Shares
A portion of long-term incentives is delivered in units representing full-value shares of our stock to drive performance, promote retention and foster a long-term ownership perspective. Unlike stock options, full-value share awards, in combination with stock ownership requirements, subject Executives to the same downside risk experienced by shareholders but still encourage retention if our stock price does not appreciate, and help to focus Executives on sustaining the value of the Company. In general, we believe the grant or vesting of a significantsignificant percentage of full-value shares for Executives should be based on performance against annual or long-term objectives unless they are made to offset compensation from prior employment in the case of new hires. However, to balance our performance, retention, and ownership objectives, in the past we have granted stock units or other full-value shares that vest only for continued service with the Company, and we may do so in the future. Mr. DiGrande and Ms. List-Stoll each received an initial stock unit grant covering 100,000 shares to induce them to join the Company. The stock units vest based on continued service at a rate of 25% annually beginning one year from the grant date. The stock unit grants received by our Executives are described in more detail in the"2019 Grants of Plan-Based Awards table on page 41.
Stock units that are granted to Executives other than the CEO have in most cases beenare normally scheduled to vest over three or four years, butalthough the schedule may differ based on critical retention or performance periods, or the vesting of compensation being forfeited at a prior employer for new hires. Executives generally must be employed on the vesting date or awards are forfeited. Vesting is generally accelerated upon death, disability or retirement if the awards are held for at least one year and any performance conditions have been previously satisfied.satisfied. Additional circumstances under which vesting of long-term incentives may be accelerated isare described on pages 47-49 of this Proxy Statement.
LGP (Long-Term Growth Program)
Executives arewere eligible to participate in the LGP, which iswas intended to promote sustained improvement in financialfinancial performance and long-term value creation for shareholders, while taking into accountrecognizing the inherent difficultydifficulty in setting long-term performance goals in the volatile retail industry. Mr. DiGrande joined the Company in May 2016 as Executive Vice President, Strategy and Chief Customer Officer and received a prorated LGP grant for fiscal 2016. Ms. Syngal was appointed as Global President, Old Navy in April 2016 and received additional LGP shares in order to bring her total grant to the Global President level. Ms. List-Stoll joined the Company in January 2017 as Executive Vice President and Chief Financial Officer and did not receive a LGP grant for fiscal 2016. The key features of the program are described below:
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The table below describes the potential payout range as a percentage of the target award for the fiscal 2016-2018fiscal 2019-2021 performance period. The target number of shares was determined using our closing stock price on the date of grant and a percentage of base salary. Targets were increased for fiscal 2016 to further incentivize Executives to improve performance and for retention after considering relevant factors described below under “Compensation Analysis Framework”. The performance share grants represent only an opportunity to earn actual shares
Fiscal 2016 Award Potential Payout | |||||||
Name | Target Percentage | Target | Potential | ||||
Arthur Peck | 500 | % | 221,172 | 0 – 300% | |||
Sebastian DiGrande | 120 | % | 21,769 | 0 – 300% | |||
Jeff Kirwan | 180 | % | 53,677 | 0 – 300% | |||
Sonia Syngal | 180 | % | 52,186 | 0 – 300% | |||
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Sabrina Simmons | 180 | % | 52,186 | 0 – 300% | |||
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| Name | Fiscal 2019 Award Potential Payout | |||||
| Target Percentage of Base Salary | Target Number of Performance Shares | Potential Payout Range as Percentage of Target Shares | ||||
| Teri List-Stoll | 180 | % | 65,140 | 0 – 300% | ||
| Mark Breitbard | 275 | % | 102,210 | 0 – 300% | ||
| Julie Gruber | 120 | % | 31,924 | 0 – 300% | ||
| Sonia Syngal | 275 | % | 118,348 | 0 – 300% | ||
| Former Executives | ||||||
| Art Peck | 550 | % | 333,528 | 0 – 300% | ||
| Neil Fiske | 275 | % | 102,210 | 0 – 300% | ||
The following table describes the actual achievement levels and actual shares for the LGP awards for the completed fiscal 2014-2016fiscal 2017-2019 performance period for each eligible Executive.
Fiscal 2014 Award Achievement | ||||||||
Name | Target | Year 1, Year 2, & Year 3 | Three | Actual | Actual | Actual | ||
Arthur Peck | 33,767 | 59% | 0% | 76% | 45% | 20% | 36% | 12,201 |
Sonia Syngal | 14,218 | 64% | 0% | 191% | 85% | 20% | 68% | 9,669 |
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Sabrina Simmons | 29,324 | 64% | 0% | 76% | 47% | 20% | 38% | 11,005 |
| Name | Fiscal 2017 Award Achievement | ||||||||||||||||||||||
| Target Shares | Year 1, Year 2, & Year 3 (2017-2019) Actual Percentage Achieved | Three Year Average | Actual Cumulative Company Earnings Goal Modifier | Actual Percentage Achieved(1) | Actual Shares(1) | ||||||||||||||||||
| Teri List-Stoll | 66,907 | 188 | % | — | % | 0 | % | 63 | % | -20 | % | 50 | % | 33,472 | |||||||||
| Mark Breitbard | 83,759 | — | % | 97 | % | 0 | % | 32 | % | -20 | % | 26 | % | 21,724 | |||||||||
| Julie Gruber | 30,586 | 188 | % | — | % | 0 | % | 63 | % | -20 | % | 50 | % | 15,301 | |||||||||
| Sonia Syngal | 110,981 | 240 | % | — | % | 0 | % | 80 | % | -20 | % | 64 | % | 71,141 | |||||||||
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The table below describes, for each eligible Executive, the actual percentage achievement levels for the completed fiscalfiscal years under the LGP awards for the fiscal 2015-2017fiscal 2018-2020 and fiscal 2016-2018fiscal 2019-2021 performance periods. Final achievement and actual shares for theseThese outstanding awards are still subject to the remaining performance periods and the cumulative Company earnings goal over the same three-year performance period.
| Fiscal 2015 Award | Fiscal 2016 Award | |||
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Name | Target | Actual | Actual | Target | Actual |
Arthur Peck | 141,749 | 0% | 76% | 221,172 | 76% |
Sebastian DiGrande | N/A | N/A | N/A | 21,769 | 76% |
Jeff Kirwan | 30,894 | 0% | 0% | 53,677 | 0% |
Sonia Syngal | 18,173 | 0% | 191% | 52,186 | 191% |
Benefits Mr. Peck, who was terminated from the Company in November 2019, and Perquisites
| Name | Fiscal 2018 Award Achievement | Fiscal 2019 Award Achievement | ||||||||||||
| Target Shares | Year 1 (2018) Actual Percentage Achieved | Year 2 (2019) Actual Percentage Achieved | Target Shares | Year 1 (2019) Actual Percentage Achieved | ||||||||||
| Teri List-Stoll | 51,659 | 0 | % | 0 | % | 65,140 | 0 | % | ||||||
| Mark Breitbard | 81,058 | 0 | % | 0 | % | 102,210 | 0 | % | ||||||
| Julie Gruber | 25,318 | 0 | % | 0 | % | 31,924 | 0 | % | ||||||
| Sonia Syngal | 93,856 | 0 | % | 0 | % | 118,348 | 0 | % | ||||||
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Various agreements, as described in more detail beginning on page 47, provide for severance benefits in the event of a termination of employment. These benefits were selected in light of competitive conditions and customary practices at the time of their implementation.
The value of the benefitsbenefits and perquisites received by our Executives are described in more detail in the footnotes to the 2019 Summary Compensation Table beginning on page 40.
Stock Ownership Requirements for Executive OfficersSTOCK OWNERSHIP REQUIREMENTS FOR EXECUTIVE OFFICERS / Hedging and Pledging Prohibitions
We have minimum stock ownership requirements for certain executive positions to more closely link executive and shareholder interests, to balance potential rewards and risks, and to encourage a long-term perspective in managing the Company. Each executive has fivefive years from the date of his or her appointment to reach the requirement.
As of January 28, 2017,February 1, 2020, all Executives had either met the shares requirement in the table below or had remaining time to do so.
Requirements | ||
President & CEO, | 300,000 | |
| 75,000 | |
Corporate Executive Vice President | 40,000 | |
Executives not meeting the requirement must retain 50% of their after-tax shares acquired through stock compensation programs until the requirement is reached.
For purposes of determining stock ownership levels, in addition to shares held directly, certain forms of equity interests in the Company count towards the stock ownership requirement, including non-performance-based stock units (vested or unvested) and shares held within our 401(k) Plan.. A complete description of the requirements, including a complete list of accepted forms of ownership, is located at
www.gapinc.com (follow the Investors, Governance, Executive Stock Ownership links).
Our insider trading policy applicable to executives prohibits speculation in our stock, including short sales, hedging or publicly-traded option transactions. We also prohibit executives from pledging Company stock as collateral for a loan or for any other purpose.
Our hedging policy is described in more detail in "Proposal No. 1 — Election of Directors—Corporate Governance—Stock Ownership Guidelines for Directors".Termination Payments
Various agreements, as described in more detail beginning on page 47,in "2019 Potential Payments Upon Termination", provide for severance benefitsbenefits in the event of a termination of employment. These benefitsbenefits were selected in light ofconsidering competitive conditions and customary practices at the time of their implementation. We have no severance arrangements specificspecific to a change in control.
Compensation Analysis Framework
COMPENSATION ANALYSIS FRAMEWORK
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the dollar value of each compensation component, including accumulated vested and unvested long-term incentive gains and potential gains using stock price assumptions, vesting schedules for long-term incentive awards, accumulated deferred compensation and potential severance benefits.
The Committee also uses a summary of compensation data covering other companies to support its analysis. The Committee selected a broad spectrum of retail and consumer products companies for purposes of comparing market compensation levels (the “peer group”) because we have both recruited from and lost executive talent to these industries in the past, and to ensure appropriate scope and complexity relative to the Company. In order to create a balance between Gap Inc.’s retail peers and other industry peers, two peer groups were used in 2019. The primary peer group was comprised with a retail industry focus and the secondary peer group contains a broader set of consumer-oriented companies. Because the size of the Gap Inc. peer group companies varies considerably, regression analysis is used where appropriate to adjust the compensation data for differences in CompanyGap Inc. and division revenues.
The peer group isgroups are reviewed by the Committee each year. The peer groupgroups used in 2016 was2019 were comprised of the companies listed below and reflects changes from the prior year (removal of J.C. Penney and Sears Holdings and addition of Under Armour and V.F. Corporation) to better align with Gap Inc.’s talent market and global presence.
Best Buy
| Nordstrom | Tapestry, Inc. |
| Costco Wholesale | PVH Corporation | Target |
| eBay Inc. | Ralph Lauren | The TJX Companies, Inc. |
| L Brands Inc. | Ross Stores | V.F. Corporation |
| Levi Strauss | McDonald’s Corporation | Williams-Sonoma, Inc. |
| Nike | Starbucks | |
| Colgate-Palmolive Company | General Mills, Inc. | Qurate Retail Group, Inc. |
| Coty Inc. | Kimberly-Clark | The Estee Lauder Companies,
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| Discovery, Inc. |
| The Kraft Heinz Company |
| Dr. Pepper Snapple Group, Inc. | Mondelez International, Inc. | Whirlpool Corporation |
| Expedia Group, Inc. | Newell Brands,
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The majority of the peer group provides compensation data through surveys conducted by Willis Towers Watson, an international consulting company. The surveys provide levels of base salary, annual incentives, and long-term incentive grant values in a summarized form, and we believe that this data provides a reasonable indicator of total compensation values for the peer group. This data is supplemented by information obtained through proxy statement disclosures and other public sources. The Committee uses the peer group data along with the tally sheet data as a frame of reference to inform compensation decisions, but compensation is not set to meet specificspecific benchmarks or percentiles.
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As described below, the Committee also considers management’s recommendations and advice from the Committee’s independent compensation consultant when appropriate. The Committee periodically reviews the accounting and tax implications of each compensation element, and shareholder dilution in the case of equity awards.
Role ofROLE OF THE CEO AND COMPENSATION CONSULTANT
The CEO evaluates each Executive using relevant factors described above under “Compensation Analysis Framework” and makes recommendations to the Committee about the structure of the compensation program and individual arrangements. The CEO is generally present at Committee meetings when compensation, other than histhe CEO's own, is considered and approved. However, approval rests solely with the Committee.
The Committee has engaged Frederic W. Cook & Co. as its independent compensation consultant to advise the Committee periodically on the compensation program structure and individual compensation arrangements. The consultant was selected by the Committee and does not provide any other services to the Company. In addition, we have conducted a review of the Committee’s relationship with its compensation consultant, and have identifiedidentified no conflictsconflicts of interest. From time to time, the consultant attends Committee meetings, presents briefingsbriefings on general and retail-industry compensation trends and developments, and is also available to the Committee outside of meetings as necessary. The consultant reports directly to the Committee, although the consultant meets with management from time to time to obtain information necessary to advise the Committee.
Accounting and Tax Considerations
Accounting, tax and related financialfinancial implications to the Company and Executives are considered during the analysis of our compensation and benefitsbenefits program and individual elements. Overall, the Committee seeks to balance attainment of our compensation objectives with the need to maximize current tax deductibility of compensation that may impact earnings and other measures of importance to shareholders. The Committee determined that the accounting and tax impacts described below were reasonable in light of our objectives.
In general, base salary, annual cash incentive bonus payments, and the costs related to benefitsbenefits and perquisites are generally recognized as compensation expense at the time they are earned or provided. Share-based compensation expense is recognized in our consolidated statements of income for stock options, stock units, and performance shares.
Subject to the exceptions and limits below, we generally deduct for federal income tax purposes all payments of compensation and other benefitsbenefits to Executives. We do not deduct deferred compensation until the year that the deferred compensation is paid to an Executive.
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individual objectives component enactment of the annual incentive bonus is qualitative in nature2017 Tax Cuts and is subject to the deduction limits of Section 162(m). In addition, stock units, other than performance shares, that have vesting based only on continued service are also subject to the deduction limits of Section 162(m). Because of the fact-based nature ofJobs Act, however, the performance-based compensation exception andexemption has been eliminated, except with respect to certain grandfathered arrangements. While the limited amountCommittee considers the deductibility of guidance, there is no guarantee thatcompensation as one factor in determining executive compensation, the Compensation Committee retains the discretion to award compensation that is intendednot deductible as the Committee believes that it is in the best interests of our shareholders to comply withmaintain flexibility in our approach to executive compensation in order to structure a program that we consider to be the performance-based compensation exception under Section 162(m) willmost effective in fact so qualify.
Section 4999 and Section 280G of the Internal Revenue Code provide that executives could be subject to additional taxes if they receive payments or benefitsbenefits that exceed certain limits in connection with a change in control of the Company and that the Company could lose an income tax deduction for such payments. We have not provided any Executive with tax gross-ups or other reimbursement for tax amounts the Executive might be required to pay under Section 4999.
RecoveryRECOVERY AND ADJUSTMENTS TO AWARDS
Subject to the approval of the Board, we will require reimbursement and/or cancellation of any bonus or otherequity incentive compensation including stock-based compensation,when the executive officer is terminated for cause or where all of the following factors are present: (i)(a) the award was predicated upon the achievement of certain financialfinancial results that were subsequently the subject of a restatement, (ii)(b) in the Board’s view, the Executiveexecutive officer engaged in fraud or intentional misconduct that was a substantial contributing cause to the need for the restatement, and (iii)(c) a lower award would have been made to the Executiveexecutive officer based upon the restated financialfinancial results. In each such instance, wethe Company will seek to recover the individual Executive’sexecutive officer’s entire annual bonus or award for the relevant period, plus a reasonable rate of interest. The Board is monitoring this policy to ensure that it is consistent with applicable laws, including any requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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Compensation Committee Report
COMPENSATION COMMITTEE REPORT
The Compensation and Management Development Committee (the “Committee”) has reviewed and discussed this Compensation Discussion and Analysis with management. Based on the review and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in our annual report on Form 10-K for the fiscalfiscal year ended January 28, 2017February 1, 2020 and the Proxy Statement for the 20172020 Annual Meeting of Shareholders.
Bob L. Martin (Chair)
Brian GoldnerDomenico De SoleKatherine Tsang
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Lexi Reese
2019 Summary Compensation Table
The following table shows compensation information for fiscal 2016,fiscal 2019, which ended January 28, 2017,February 1, 2020, for each person who served as our CEO, CFO,principal executive or financial officer, the three other most highly compensated executive officersofficers at fiscalfiscal year-end and another officerone additional executive officer who served aswould have been among the Company's principal financial officer during the fiscal year, regardless of compensation, as required under SEC rules (“namedtop three had he been an executive officers”officer at fiscal year-end (the “named executive officers”). The table also shows compensation information for fiscal 2015fiscal 2018 and fiscal 2014,fiscal 2017, which ended January 30, 2016February 2, 2019 and January 31, 2015,February 3, 2018, respectively, for those named executive officersofficers who were also were named executive officersofficers in either of those years.
Name and Principal Position (1) | Fiscal | Salary | Bonus | Stock Awards | Option | Non-Equity | Change in | All Other | Total | |||||||||||||||||||
Arthur Peck | 2016 | 1,330,288 | 0 | 3,637,795 | 2,932,000 | 917,511 | 0 | 88,572 | 8,906,166 | |||||||||||||||||||
| CEO | 2015 | 1,300,000 | 0 | 2,733,227 | 2,079,960 | 0 | 0 | 27,611 | 6,140,798 | ||||||||||||||||||
| 2014 | 943,269 | 0 | 1,397,332 | 656,576 | 419,411 | 0 | 93,424 | 3,510,012 | |||||||||||||||||||
Teri List-Stoll | 2016 | 30,288 | 0 | 2,192,680 | 1,076,000 | 0 | 0 | 22,874 | 3,321,842 | |||||||||||||||||||
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Sebastian DiGrande | 2016 | 505,385 | 342,466 | 1,725,887 | 1,147,445 | 402,703 | 0 | 29,400 | 4,153,286 | |||||||||||||||||||
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Jeff Kirwan | 2016 | 893,269 | 0 | 771,499 | 1,319,400 | 133,990 | 0 | 65,394 | 3,183,552 | |||||||||||||||||||
| Global President, Gap | 2015 | 850,000 | 0 | 3,642,268 | 555,728 | 127,500 | 0 | 1,061,541 | 6,237,037 | ||||||||||||||||||
Sonia Syngal | 2016 | 850,000 | 0 | 729,630 | 1,081,720 | 992,501 | 0 | 70,603 | 3,724,454 | |||||||||||||||||||
| Global President, Old Navy | 2015 | 750,000 | 0 | 3,378,237 | 243,131 | 90,000 | 0 | 67,541 | 4,528,909 | ||||||||||||||||||
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Sabrina Simmons | 2016 | 875,000 | 500,000 | 1,048,174 | 1,319,400 | 0 | 0 | 67,195 | 3,809,769 | |||||||||||||||||||
| Former EVP and CFO | 2015 | 868,269 | 0 | 4,156,533 | 625,194 | 130,241 | 0 | 64,810 | 5,845,047 | ||||||||||||||||||
| 2014 | 825,000 | 0 | 2,258,223 | 738,648 | 457,385 | 0 | 63,651 | 4,342,907 | |||||||||||||||||||
Name and Principal Position in 2019(1) | Fiscal Year | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4)(5) | Option Awards ($)(5)(6) | Non-Equity Incentive Plan Compensation ($)(7) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(8) | All Other Compensation ($)(9) | Total ($) | ||||||||
Robert Fisher Interim President and CEO, Gap Inc. | 2019 | 297,250 | — | 159,987 | — | — | — | 15,000 | 472,237 | ||||||||
Teri List-Stoll EVP and CFO, Gap Inc. | 2019 | 985,000 | — | 922,337 | 637,153 | — | — | 68,490 | 2,612,980 | ||||||||
| 2018 | 918,269 | 200,000 | 4,619,311 | 1,095,318 | 192,932 | — | 472,764 | 7,498,594 | |||||||||
| 2017 | 891,827 | 200,000 | 647,204 | — | 1,476,896 | — | 329,997 | 3,545,924 | |||||||||
Mark Breitbard President and CEO, Banana Republic | 2019 | 1,025,000 | 500,000 | 1,775,905 | 1,583,042 | — | — | 71,155 | 4,955,102 | ||||||||
| 2018 | 950,000 | 500,000 | 1,221,947 | 1,408,266 | 655,639 | — | 68,688 | 4,804,540 | |||||||||
| 2017 | 730,769 | — | 4,361,174 | 1,549,290 | 669,769 | — | 29,178 | 7,340,180 | |||||||||
Julie Gruber EVP, Global General Counsel and Chief Compliance Officer, Gap Inc. | 2019 | 744,231 | — | 1,583,106 | 318,577 | — | — | 57,348 | 2,703,262 | ||||||||
Sonia Syngal President and CEO, Old Navy | 2019 | 1,100,000 | — | 2,036,465 | 1,556,932 | — | — | 72,565 | 4,765,962 | ||||||||
| 2018 | 1,079,808 | — | 1,931,049 | 1,408,266 | 65,909 | — | 68,708 | 4,553,740 | |||||||||
| 2017 | 958,173 | — | 1,779,318 | 1,091,820 | 2,175,093 | — | 76,032 | 6,080,436 | |||||||||
Art Peck Former President and CEO, Gap Inc. | 2019 | 1,365,192 | 4,609,096 | 2,896,150 | — | — | 52,147 | 8,922,585 | |||||||||
| 2018 | 1,526,442 | — | 15,135,207 | 3,911,850 | — | — | 220,440 | 20,793,939 | |||||||||
| 2017 | 1,396,058 | — | 6,762,235 | 3,275,460 | 4,045,859 | — | 107,574 | 15,587,186 | |||||||||
Neil Fiske Former President and CEO, Gap | 2019 | 913,462 | 400,000 | 786,382 | 1,042,614 | — | 365,748 | 3,508,206 | |||||||||
| 2018 | 595,577 | — | 4,443,018 | 1,952,675 | 743,819 | — | 289,856 | 8,024,945 | |||||||||
| |
(1) | In November 2019, Mr. Fisher became our Interim President and CEO and Mr. Peck |
(2) | The amounts in this column for |
37
| |
(3) | The |
(4) | This column |
| |
|
| LGP 3 (FY 2014 Grant) | LGP 4 (FY 2015 Grant) | LGP 5 (FY 2016 Grant) | Grant Date Fair | Total Reported in |
Arthur Peck | 324,369 | 1,319,192 | 1,994,234 | 0 | 3,637,795 |
Teri List-Stoll | 0 | 0 | 0 | 2,192,680 | 2,192,680 |
Sebastian DiGrande | 0 | 0 | 110,727 | 1,615,160 | 1,725,887 |
Jeff Kirwan | 0 | 287,520 | 483,979 | 0 | 771,499 |
Sonia Syngal | 136,578 | 169,111 | 423,941 | 0 | 729,630 |
Sabrina Simmons (a) | 281,687 | 295,952 | 470,535 | 0 | 1,048,174 |
| LGP 3 (FY 2017 Grant) Year 3 Target Shares Grant Date Fair Value ($) | LGP 4 (FY 2018 Grant) Year 2 Target Shares Grant Date Fair Value ($) | LGP 5 (FY 2019 Grant) Year 1 Target Shares Grant Date Fair Value ($) | Grant Date Fair Value of Non-LGP Stock Awards ($) | Total Reported in Stock Awards Column (Rounded to the nearest dollar) ($) | ||||||
| Teri List-Stoll | 356,386 | 259,146 | 306,805 | — | 922,337 | |||||
| Mark Breitbard | 446,146 | 406,636 | 481,409 | 441,714 | 1,775,905 | |||||
| Julie Gruber | 162,916 | 127,007 | 150,357 | 1,142,826 | 1,583,106 | |||||
| Sonia Syngal | 591,148 | 470,839 | 557,414 | 417,064 | 2,036,465 | |||||
| Art Peck | 1,711,250 | 1,326,929 | 1,570,917 | — | 4,609,096 | |||||
| Neil Fiske | N/A | 304,973 | 481,409 | — | 786,382 | |||||
| Maximum Shares Total Grant Date Fair Value ($) | ||||||
| LGP 3 (FY 2017 Cycle) | LGP 4 (FY 2018 Cycle) | LGP 5 (FY 2019 Cycle) | ||||
| Teri List-Stoll | 4,528,266 | 2,680,586 | 2,761,285 | |||
| Mark Breitbard | 5,668,809 | 4,206,100 | 4,332,682 | |||
| Julie Gruber | 2,070,060 | 1,313,751 | 1,353,258 | |||
| Sonia Syngal | 7,511,194 | 4,870,188 | 5,016,772 | |||
| Art Peck | 21,742,944 | 13,725,164 | 14,138,252 | |||
| Neil Fiske | N/A | 3,154,549 | 4,332,682 | |||
(5) |
|
|
38
|
|
|
|
|
|
|
|
|
|
LGP 3 | Maximum Shares |
| LGP 4 | Maximum Shares |
| LGP 5 | Maximum Shares |
Art Peck | 3,614,420 |
| Art Peck | 13,320,154 |
| Art Peck | 17,948,108 |
Teri List-Stoll | n/a |
| Teri List-Stoll | n/a |
| Teri List-Stoll | n/a |
Sebastian DiGrande | n/a |
| Sebastian DiGrande | n/a |
| Sebastian DiGrande | 996,585 |
Jeff Kirwan | n/a |
| Jeff Kirwan | 2,903,109 |
| Jeff Kirwan | 4,355,889 |
Sonia Syngal | 1,521,895 |
| Sonia Syngal | 1,707,717 |
| Sonia Syngal | 3,815,550 |
Sabrina Simmons (a) | 3,138,841 |
| Sabrina Simmons (a) | 2,988,434 |
| Sabrina Simmons (a) | 4,234,894 |
|
| |
| Please refer to Note 11, “Share-Based Compensation,” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K | |
(6) | This column |
(7) | The amounts in this column |
(8) | No above-market or preferential interest rate options are available under our deferred compensation programs. Please refer to the |
(9) | The amounts shown in the All Other Compensation column are detailed in the following table. |
39
Name | Fiscal | Personal | Financial | Tax | Deferred | 401(k) | Disability | Life | Relocation | Gift | Other | Total ($) | ||||||||||||||||||||||||
Arthur Peck | 2016 | 19,523 | 14,838 | 0 | 42,477 | 10,703 | 524 | 507 | 0 | 0 | 0 | 88,572 | ||||||||||||||||||||||||
| 2015 | 0 | 14,800 | 0 | 0 | 11,261 | 650 | 900 | 0 | 0 | 0 | 27,611 | ||||||||||||||||||||||||
| 2014 | 0 | 14,800 | 0 | 27,139 | 11,813 | 624 | 1,128 | 0 | 10,000 | 27,920 | 93,424 | ||||||||||||||||||||||||
Teri List-Stoll | 2016 | 0 | 0 | 0 | 0 | 0 | 16 | 48 | 22,810 | 0 | 0 | 22,874 | ||||||||||||||||||||||||
Sebastian DiGrande | 2016 | 0 | 9,182 | 0 | 7,485 | 11,678 | 548 | 507 | 0 | 0 | 0 | 29,400 | ||||||||||||||||||||||||
Jeff Kirwan | 2016 | 0 | 14,838 | 0 | 24,938 | 10,342 | 527 | 507 | 14,242 | 0 | 0 | 65,394 | ||||||||||||||||||||||||
| 2015 | 0 | 14,800 | 777,099 | 23,400 | 9,881 | 647 | 900 | 234,814 | 0 | 0 | 1,061,541 | ||||||||||||||||||||||||
Sonia Syngal | 2016 | 0 | 18,341 | 0 | 22,919 | 8,553 | 489 | 648 | 15,703 | 3,950 | 0 | 70,603 | ||||||||||||||||||||||||
| 2015 | 0 | 10,627 | 0 | 18,823 | 8,774 | 650 | 900 | 23,272 | 4,495 | 0 | 67,541 | ||||||||||||||||||||||||
Sabrina Simmons | 2016 | 0 | 14,838 | 0 | 24,400 | 11,785 | 524 | 648 | 0 | 15,000 | 0 | 67,195 | ||||||||||||||||||||||||
| 2015 | 0 | 14,800 | 0 | 23,938 | 9,529 | 643 | 900 | 0 | 15,000 | 0 | 64,810 | ||||||||||||||||||||||||
| 2014 | 0 | 14,800 | 0 | 22,600 | 10,387 | 736 | 1,128 | 0 | 14,000 | 0 | 63,651 | ||||||||||||||||||||||||
| Name | Fiscal Year | Personal Use of Airplane ($)(a) | Financial Counseling ($)(b) | Tax Payments ($)(c) | Deferred Compensation Plan Match ($)(d) | 401 (k) Plan Match ($)(e) | Disability Plan ($)(f) | Life Insurance ($)(g) | Relocation ($)(h) | Gift Matching ($)(i) | Other ($)(j) | Total ($) | |||||||||||
| Robert Fisher | 2019 | — | — | — | — | — | — | — | — | 15,000 | — | 15,000 | |||||||||||
| Teri List-Stoll | 2019 | — | 15,300 | — | 25,800 | 11,228 | 586 | 576 | — | 15,000 | — | 68,490 | |||||||||||
| 2018 | — | 15,300 | 37,805 | 25,500 | 11,587 | 415 | 576 | 366,581 | 15,000 | — | 472,764 | ||||||||||||
| 2017 | — | 12,892 | 87,616 | 22,402 | 12,888 | 415 | 576 | 178,208 | 15,000 | — | 329,997 | ||||||||||||
| Mark Breitbard | 2019 | — | 16,964 | — | 26,800 | 11,229 | 586 | 576 | — | 15,000 | — | 71,155 | |||||||||||
| 2018 | — | 14,526 | — | 27,000 | 11,171 | 415 | 576 | — | 15,000 | — | 68,688 | ||||||||||||
| 2017 | — | — | — | — | 13,435 | 311 | 432 | — | 15,000 | — | 29,178 | ||||||||||||
| Julie Gruber | 2019 | — | 15,300 | — | 16,077 | 11,255 | 586 | 576 | — | 13,554 | — | 57,348 | |||||||||||
| Sonia Syngal | 2019 | — | 15,300 | — | 32,800 | 8,123 | 586 | 576 | 180 | 15,000 | — | 72,565 | |||||||||||
| 2018 | — | 15,300 | — | 31,500 | 8,420 | 415 | 576 | 1,847 | 10,650 | — | 68,708 | ||||||||||||
| 2017 | — | 15,300 | — | 26,508 | 7,975 | 415 | 576 | 11,558 | 13,700 | — | 76,032 | ||||||||||||
| Art Peck | 2019 | 29,277 | 15,300 | — | 6,622 | 468 | 480 | — | — | — | 52,147 | ||||||||||||
| 2018 | 137,182 | 15,300 | — | 49,250 | 11,717 | 415 | 576 | — | 6,000 | — | 220,440 | ||||||||||||
| 2017 | 36,734 | 15,300 | — | 43,831 | 10,718 | 415 | 576 | — | — | — | 107,574 | ||||||||||||
| Neil Fiske | 2019 | — | 15,300 | 78,377 | 26,800 | 14,079 | 586 | 576 | 230,030 | — | — | 365,748 | |||||||||||
| 2018 | — | 9,557 | 116,249 | — | — | 242 | 336 | 163,472 | — | — | 289,856 | ||||||||||||
(a) |
| The Compensation and Management Development Committee determined that it was appropriate to provide Mr. Peck, prior to his termination as President & CEO, use of a Company airplane for limited personal use (not to exceed $150,000 per |
(b) |
| We provide certain executive |
(c) |
| For Ms. List-Stoll, these amounts reflect tax reimbursements in connection with her relocation to San Francisco when she joined the Company in January 2017. For Mr. |
(d) |
| These amounts |
(e) |
| These amounts |
(f) |
| These amounts |
(g) |
| These amounts |
(h) |
| For Ms. List-Stoll, the amounts reflect costs in connection with her relocation to San Francisco when she joined the Company in January 2017. For Mr. |
(i) |
| These amounts |
(j) |
|
|
receive preferred airline status. |
40
2019 Grants of Plan-Based Awards
The following table shows all plan-based awards granted to the named executive officersofficers during fiscal 2016,fiscal 2019, which ended on January 28, 2017.February 1, 2020. The option awards and the unvested portion of the stock awards identifiedidentified in the table below are also reported in the 2019 Outstanding Equity Awards at Fiscal Year-End table.
Name | Grant | Approval | Estimated Future Payouts | Estimated Future Payouts | All Other | All Other | Exercise | Grant Date | ||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||
Arthur Peck | 3/14/16 | 3/14/16 |
|
|
|
|
|
|
| 500,000 | 30.18 | 2,932,000 | ||||||||||||||||||||||||
|
|
|
|
|
| 5,065 | 11,255 | 33,767 |
|
|
| 324,369 | ||||||||||||||||||||||||
|
|
|
|
|
| 21,262 | 47,249 | 141,749 |
|
|
| 1,319,192 | ||||||||||||||||||||||||
|
|
|
|
|
| 33,175 | 73,724 | 221,172 |
|
|
| 1,994,234 | ||||||||||||||||||||||||
| N/A |
|
| 2,328,005 | 4,656,010 |
|
|
|
|
|
|
| ||||||||||||||||||||||||
Teri List-Stoll | 1/17/17 | 11/09/16 |
|
|
|
|
|
|
| 200,000 | 24.15 | 1,076,000 | ||||||||||||||||||||||||
| 1/17/17 | 11/09/16 |
|
|
|
|
|
| 100,000 |
|
| 2,192,680 | ||||||||||||||||||||||||
Sebastian DiGrande | 5/23/16 | 4/18/16 |
|
|
|
|
|
|
| 325,000 | 18.41 | 1,147,445 | ||||||||||||||||||||||||
| 5/23/16 | 4/18/16 |
|
|
|
|
|
| 100,000 |
|
| 1,615,160 | ||||||||||||||||||||||||
| 5/23/16 | 4/18/16 |
|
|
| 3,265 | 7,256 | 21,769 |
|
|
| 110,727 | ||||||||||||||||||||||||
| N/A |
|
| 402,703 | 805,407 |
|
|
|
|
|
|
| ||||||||||||||||||||||||
Jeff Kirwan | 3/14/16 | 3/14/16 |
|
|
|
|
|
|
| 225,000 | 30.18 | 1,319,400 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 4,634 | 10,298 | 30,894 |
|
|
| 287,520 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 8,051 | 17,892 | 53,677 |
|
|
| 483,979 | ||||||||||||||||||||||||
| N/A |
| 223,317 | 893,269 | 1,786,538 |
|
|
|
|
|
|
| ||||||||||||||||||||||||
Sonia Syngal | 3/14/16 | 3/14/16 |
|
|
|
|
|
|
| 125,000 | 30.18 | 733,000 | ||||||||||||||||||||||||
| 4/13/16 | 3/31/16 |
|
|
|
|
|
|
| 75,000 | 23.93 | 348,720 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 2,132 | 4,739 | 14,218 |
|
|
| 136,578 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 2,725 | 6,057 | 18,173 |
|
|
| 169,111 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 4,473 | 9,940 | 29,821 |
|
|
| 268,877 | ||||||||||||||||||||||||
| 4/13/16 | 3/31/16 |
|
|
| 3,354 | 7,455 | 22,365 |
|
|
| 155,064 | ||||||||||||||||||||||||
| N/A |
| 204,962 | 819,849 | 1,639,698 |
|
|
|
|
|
|
| ||||||||||||||||||||||||
Former Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Sabrina Simmons | 3/14/16 | 3/14/16 |
|
|
|
|
|
|
| 225,000 | 30.18 | 1,319,400 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 4,398 | 9,774 | 29,324 |
|
|
| 281,687 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 4,770 | 10,600 | 31,802 |
|
|
| 295,952 | ||||||||||||||||||||||||
| 3/14/16 | 3/14/16 |
|
|
| 7,827 | 17,395 | 52,186 |
|
|
| 470,535 | ||||||||||||||||||||||||
41
| Name | Grant Date | Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards ($)(3) | |||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||
| Robert Fisher | 06/30/19 | 06/30/19 | — | — | — | — | — | — | 8,903 | — | — | 159,987 | |||||||||||
| Teri List- Stoll | 03/18/19 | 03/18/19 | — | — | — | — | — | — | — | 110,000 | 25.56 | 637,153 | |||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 10,036 | 22,302 | 66,907 | — | — | — | 356,386 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 7,748 | 17,219 | 51,659 | — | — | — | 259,146 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 9,771 | 21,713 | 65,140 | — | — | — | 306,805 | ||||||||||||
| N/A | 231,250 | 925,000 | 1,850,000 | — | — | — | — | — | — | — | |||||||||||||
| Mark Breitbard | 03/18/19 | 03/18/19 | — | — | — | — | — | — | — | 180,000 | 25.56 | 1,042,614 | |||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 12,563 | 27,919 | 83,759 | — | — | — | 446,146 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 12,158 | 27,019 | 81,058 | — | — | — | 406,636 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 15,331 | 34,070 | 102,210 | — | — | — | 481,409 | ||||||||||||
| 12/20/19 | 12/20/19 | — | — | — | — | — | — | — | 140,000 | 19.35 | 540,428 | ||||||||||||
| 12/20/19 | 12/20/19 | — | — | — | — | — | — | 29,000 | — | — | 441,714 | ||||||||||||
| N/A | 296,875 | 1,187,500 | 2,375,000 | — | — | — | — | — | — | — | |||||||||||||
| Julie Gruber | 03/18/19 | 03/18/19 | — | — | — | — | — | — | — | 55,000 | 25.56 | 318,577 | |||||||||||
| 03/18/19 | 03/18/19 | — | — | — | — | — | — | 30,000 | — | — | 696,945 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 4,587 | 10,195 | 30,586 | — | — | — | 162,916 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 3,797 | 8,439 | 25,318 | — | — | — | 127,007 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 4,788 | 10,641 | 31,924 | — | — | — | 150,357 | ||||||||||||
| 08/13/19 | 08/13/19 | — | — | — | — | — | — | 28,600 | — | — | 445,881 | ||||||||||||
| N/A | 136,989 | 547,956 | 1,095,912 | — | — | — | — | — | — | — | |||||||||||||
| Sonia Syngal | 03/18/19 | 03/18/19 | — | — | — | — | — | — | — | 180,000 | 25.56 | 1,042,614 | |||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 16,647 | 36,993 | 110,981 | — | — | — | 591,148 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 14,078 | 31,285 | 93,856 | — | — | — | 470,839 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 17,752 | 39,449 | 118,348 | — | — | — | 557,414 | ||||||||||||
| 11/13/19 | 11/13/19 | — | — | — | — | — | — | — | 140,000 | 18.41 | 514,318 | ||||||||||||
| 11/13/19 | 11/13/19 | — | — | — | — | — | — | 29,000 | — | — | 417,064 | ||||||||||||
| N/A | 687,500 | 2,750,000 | 5,500,000 | — | — | — | — | — | — | — | |||||||||||||
| Art Peck | 03/18/19 | 03/18/19 | — | — | — | — | — | — | — | 500,000 | 25.56 | 2,896,150 | |||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 48,189 | 107,087 | 321,261 | — | — | — | 1,711,250 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 39,675 | 88,168 | 264,505 | — | — | — | 1,326,928 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 50,029 | 111,176 | 333,528 | — | — | — | 1,570,917 | ||||||||||||
| N/A | 678,125 | 2,712,500 | 5,425,000 | — | — | — | — | — | — | — | |||||||||||||
| Neil Fiske | 03/18/19 | 03/18/19 | — | — | — | — | — | — | — | 180,000 | 25.56 | 1,042,614 | |||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 9,118 | 20,264 | 60,793 | — | — | — | 304,973 | ||||||||||||
| 03/18/19 | 03/18/19 | — | — | — | 15,331 | 34,070 | 102,210 | — | — | — | 481,409 | ||||||||||||
| N/A | 296,875 | 1,187,500 | 2,375,000 | — | — | — | — | — | — | — | |||||||||||||
| |
(1) | The amounts shown in these columns |
(2) | The amounts shown in these columns for each of the named executive |
(3) |
|
| The value of a stock award or option award is based on the fair value as of the grant date of such award determined pursuant to FASB ASC 718. Please refer to Note 11, “Share-Based Compensation,” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K |
42
2019 Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding equity awards held by the named executive officersofficers at the end of fiscal 2016,fiscal 2019, which ended on January 28, 2017.
| Option Awards | Stock Awards | |||||||||||||||||||||||||
Name | Number of | Number of | Equity | Option | Option | Number of | Market | Equity | Equity | ||||||||||||||||||
Arthur Peck | 25,000 |
|
| 23.07 | 3/15/2020 |
|
|
|
| ||||||||||||||||||
| 50,000 |
|
| 21.79 | 3/14/2021 |
|
|
|
| ||||||||||||||||||
| 75,000 |
|
| 25.09 | 3/12/2022 |
|
|
|
| ||||||||||||||||||
| 60,000 | 20,000 (a | ) |
| 36.45 | 3/18/2023 |
|
|
|
| |||||||||||||||||
| 40,000 | 40,000 (b | ) |
| 42.20 | 3/17/2024 |
|
|
|
| |||||||||||||||||
| 75,000 | 225,000 (c | ) |
| 41.19 | 2/2/2025 |
|
|
|
| |||||||||||||||||
|
| 500,000 (d | ) |
| 30.18 | 3/14/2026 |
|
|
|
| |||||||||||||||||
|
|
|
|
|
|
|
| 12,201 (a | ) | 275,499 | |||||||||||||||||
|
|
|
|
|
|
|
| 74,960 (b | ) | 1,692,597 | |||||||||||||||||
|
|
|
|
|
|
|
| 183,312 (c | ) | 4,139,185 | |||||||||||||||||
Teri List-Stoll |
| 200,000 (e | ) |
| 24.15 | 1/17/2017 |
|
|
|
| |||||||||||||||||
|
|
|
|
|
| 100,000 (a | ) | 2,258,000 |
|
| |||||||||||||||||
Sebastian DiGrande |
| 325,000 (f | ) |
| 18.41 | 5/23/2026 |
|
|
|
| |||||||||||||||||
|
|
|
|
|
| 100,000 (b | ) | 2,258,000 |
|
| |||||||||||||||||
|
|
|
|
|
|
|
| 18,042 (c | ) | 407,388 | |||||||||||||||||
Jeff Kirwan | 6,430 |
|
| 25.09 | 3/12/2022 |
|
|
|
| ||||||||||||||||||
| 10,000 | 5,000 (g | ) |
| 36.45 | 3/18/2023 |
|
|
|
| |||||||||||||||||
| 12,500 | 12,500 (h | ) |
| 42.20 | 3/17/2024 |
|
|
|
| |||||||||||||||||
| 20,000 | 60,000 (i | ) |
| 41.27 | 3/16/2025 |
|
|
|
| |||||||||||||||||
|
| 125,000 (j | ) |
| 30.18 | 3/14/2026 |
|
|
|
| |||||||||||||||||
|
| 100,000 (k | ) |
| 30.18 | 3/14/2026 |
|
|
|
| |||||||||||||||||
|
|
|
|
|
| 4,176 (c | ) | 94,294 |
|
| |||||||||||||||||
|
|
|
|
|
| 75,000 (d | ) | 1,693,500 |
|
| |||||||||||||||||
|
|
|
|
|
| 8,461 (e | ) | 191,049 |
|
| |||||||||||||||||
|
|
|
|
|
|
|
| 4,634 (b | ) | 104,636 | |||||||||||||||||
|
|
|
|
|
|
|
| 16,103 (c | ) | 363,606 | |||||||||||||||||
Sonia Syngal | 3,750 |
|
| 25.09 | 3/12/2022 |
|
|
|
| ||||||||||||||||||
| 7,500 | 2,500 (l | ) |
| 36.45 | 3/18/2023 |
|
|
|
| |||||||||||||||||
| 15,000 | 15,000 (m | ) |
| 42.20 | 3/17/2024 |
|
|
|
| |||||||||||||||||
| 8,750 | 26,250 (n | ) |
| 41.27 | 3/16/2025 |
|
|
|
| |||||||||||||||||
|
| 75,000 (o | ) |
| 30.18 | 3/14/2026 |
|
|
|
| |||||||||||||||||
|
| 50,000 (p | ) |
| 30.18 | 3/14/2026 |
|
|
|
| |||||||||||||||||
|
| 75,000 (q | ) |
| 23.93 | 4/13/2026 |
|
|
|
| |||||||||||||||||
|
|
|
|
|
| 1,998 (f | ) | 45,115 |
|
| |||||||||||||||||
|
|
|
|
|
| 75,000 (g | ) | 1,693,500 |
|
| |||||||||||||||||
|
|
|
|
|
|
|
| 9,669 (a | ) | 218,326 | |||||||||||||||||
|
|
|
|
|
|
|
| 24,019 (b | ) | 542,349 | |||||||||||||||||
|
|
|
|
|
|
|
| 24,716 (c | ) | 558,087 | |||||||||||||||||
|
|
|
|
|
|
|
| 46,333 (c | ) | 1,046,199 | |||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) | |||||||||||||
| Robert Fisher | — | — | — | — | — | — | — | — | — | |||||||||||||
| Teri List-Stoll | 150,000 | 50,000 | (a) | — | 24.15 | 1/17/2027 | 33,472 | (a) | 582,748 | 6,887 | (a) | 119,903 | ||||||||||
| 35,000 | 105,000 | (b) | — | 32.23 | 3/19/2028 | 25,000 | (b) | 435,250 | 23,884 | (b) | 415,820 | |||||||||||
| — | 110,000 | (c) | — | 25.56 | 3/18/2029 | 125,000 | (c) | 2,176,250 | — | — | ||||||||||||
| Mark Breitbard | 150,000 | 150,000 | (d) | — | 25.90 | 5/1/2027 | 21,724 | (a) | 378,215 | 31,831 | (a) | 554,178 | ||||||||||
| 45,000 | 135,000 | (e) | — | 32.23 | 3/19/2028 | 29,000 | (d) | 504,890 | 37,476 | (b) | 652,457 | |||||||||||
| — | 180,000 | (f) | — | 25.56 | 3/18/2029 | 75,000 | (e) | 1,305,750 | — | — | ||||||||||||
| — | 140,000 | (g) | — | 19.35 | 12/20/2029 | — | — | |||||||||||||||
| Julie Gruber | 6,000 | — | — | 23.07 | 3/15/2020 | 15,301 | (a) | 266,390 | 3,375 | (a) | 58,759 | |||||||||||
| 6,000 | — | — | 21.79 | 3/14/2021 | 30,000 | (f) | 522,300 | 11,705 | (b) | 203,784 | ||||||||||||
| 5,000 | — | — | 25.09 | 3/12/2022 | 28,600 | (g) | 497,926 | — | — | |||||||||||||
| 3,750 | — | — | 36.45 | 3/18/2023 | — | — | — | — | ||||||||||||||
| 3,100 | — | — | 42.20 | 3/17/2024 | — | — | — | — | ||||||||||||||
| 10,200 | — | — | 41.27 | 3/16/2025 | — | — | — | — | ||||||||||||||
| 75,000 | 25,000 | (h) | — | 30.18 | 3/14/2026 | — | — | — | — | |||||||||||||
| 30,000 | 30,000 | (i) | — | 23.54 | 3/13/2027 | — | — | — | — | |||||||||||||
| 13,750 | 41,250 | (j) | — | 32.23 | 3/19/2028 | — | — | — | — | |||||||||||||
| — | 55,000 | (k) | — | 25.56 | 3/18/2029 | — | — | — | — | |||||||||||||
| Sonia Syngal | 3,750 | — | — | 25.09 | 3/12/2022 | 71,141 | (a) | 1,238,565 | 12,514 | (a) | 217,869 | |||||||||||
| 10,000 | — | — | 36.45 | 3/18/2023 | 29,000 | (h) | 504,890 | 43,394 | (b) | 755,490 | ||||||||||||
| 30,000 | — | — | 42.20 | 3/17/2024 | — | — | — | — | ||||||||||||||
| 35,000 | — | — | 41.27 | 3/16/2025 | — | — | — | — | ||||||||||||||
| 93,750 | 31,250 | (l) | — | 30.18 | 3/14/2026 | — | — | — | — | |||||||||||||
| 56,250 | 18,750 | (m) | — | 23.93 | 4/13/2026 | — | — | — | — | |||||||||||||
| 100,000 | 100,000 | (n) | — | 23.54 | 3/13/2027 | — | — | — | — | |||||||||||||
| 45,000 | 135,000 | (o) | — | 32.23 | 3/19/2028 | — | — | — | — | |||||||||||||
| — | 180,000 | (p) | — | 25.56 | 3/18/2029 | — | — | — | — | |||||||||||||
| — | 140,000 | (q) | — | 18.41 | 11/13/2029 | — | — | — | — | |||||||||||||
43
| Option Awards | Stock Awards | |||||||||||||||||||||||||
Name | Number of | Number of | Equity | Option | Option | Number of | Market | Equity | Equity | ||||||||||||||||||
Former Executive |
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Sabrina Simmons | 25,000 |
|
| 25.09 | 3/12/2022 |
|
|
|
| ||||||||||||||||||
| 45,000 | 22,500 (r | ) |
| 36.45 | 3/18/2023 |
|
|
|
| |||||||||||||||||
| 45,000 | 45,000 (s | ) |
| 42.20 | 3/17/2024 |
|
|
|
| |||||||||||||||||
| 22,500 | 67,500 (t | ) |
| 41.27 | 3/16/2025 |
|
|
|
| |||||||||||||||||
|
| 125,000 (u | ) |
| 30.18 | 3/14/2026 |
|
|
|
| |||||||||||||||||
|
| 100,000 (v | ) |
| 30.18 | 3/14/2026 |
|
|
|
| |||||||||||||||||
|
|
|
|
|
| 12,500 (h | ) | 282,250 |
|
| |||||||||||||||||
|
|
|
|
|
| 75,000 (i | ) | 1,693,500 |
|
| |||||||||||||||||
|
|
|
|
|
|
|
| 11,005 (a | ) | 248,493 | |||||||||||||||||
|
|
|
|
|
|
|
| 16,817 (b | ) | 379,728 | |||||||||||||||||
|
|
|
|
|
|
|
| 43,252 (c | ) | 976,630 | |||||||||||||||||
44
| Option Awards | Stock Awards | ||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) | ||||||||||||
| Art Peck | 25,000 | — | — | 23.07 | 3/15/2020 | — | — | — | — | ||||||||||||
| 50,000 | — | — | 21.79 | 11/15/2020 | — | — | — | — | |||||||||||||
| 75,000 | — | — | 25.09 | 11/15/2020 | — | — | — | — | |||||||||||||
| 80,000 | — | — | 36.45 | 11/15/2020 | — | — | — | — | |||||||||||||
| 80,000 | — | — | 42.20 | 11/15/2020 | — | — | — | — | |||||||||||||
| 300,000 | — | — | 41.19 | 11/15/2020 | — | — | — | — | |||||||||||||
| 500,000 | — | — | 30.18 | 11/15/2020 | — | — | — | — | |||||||||||||
| 600,000 | — | — | 23.54 | 11/15/2020 | — | — | — | — | |||||||||||||
| 500,000 | — | — | 32.23 | 11/15/2020 | — | — | — | — | |||||||||||||
| Neil Fiske | 62,500 | — | — | 33.08 | 4/17/2020 | — | — | — | — | ||||||||||||
| ||
(1) | The following footnotes set forth the vest dates for the outstanding option awards (vesting generally depends upon continued employment): |
(a) |
|
|
|
| |
|
| |
|
| |
| Options vest 50,000 on 1/17/ |
(b) |
| Options vest |
(c) |
| Options vest |
(d) |
| Options vest |
(e) |
| Options vest |
(f) |
| Options vest |
(g) | Options vest 35,000 on 12/20/2020, 35,000 on 12/20/2021, 35,000 on 12/20/2022 and 35,000 on 12/20/2023. |
| Options vest 25,000 on 3/14/ |
(i) | Options vest 15,000 on 3/ |
(j) | Options vest 13,750 on 3/19/2020, 13,750 on 3/19/2021, and |
(k) | Options vest 13,750 on 3/18/2020, 13,750 on 3/18/2021, 13,750 on 3/18/2022 and 13,750 on 3/18/2023. |
(l) | Options vest 31.250 on 3/14/2020. |
(m) |
|
|
|
| |
|
| |
|
| |
|
| |
| Options vest 18,750 on 4/13/ |
(n) |
| Options vest |
(o) |
| Options vest |
(p) |
| Options vest
|
| Options vest 35,000 on 11/13/2020, 35,000 on 11/13/2021, 35,000 on 11/13/2022 and 35,000 on 11/13/2023. |
(2) | The following footnotes set forth the vest dates for the outstanding stock awards (vesting generally depends upon continued employment): |
(a) | Represents the number of shares earned under the Company’s Long-Term Growth Program (described in "Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives—LGP (Long-Term Growth Program)") with respect to year 1 (fiscal 2017), year 2 (fiscal 2018) and year 3 (fiscal 2019) of a three-year performance period (“LGP 3”). Half of the award earned vested on the date the Company’s Compensation and Management Development Committee certified attainment (March 16, 2020), and the remainder will vest on the anniversary of such certification date, contingent on continued service with the Company. |
|
|
(c) |
|
| ||
(d) |
| Award vests |
(e) |
|
|
|
| |
|
| |
|
| |
|
| |
| Award vests 37,500 on |
(f) |
|
| |
| Award vests 14,300 on 8/13/2021 and 14,300 on 8/13/2022. |
(h) | Award vests 14,500 on 11/13/2021 and 14,500 on 11/13/2022. |
(3) | Represents the number of stock awards multiplied by the closing price of our common stock as of |
(4) | (a) | |
| ||
(b) |
|
(5) | Represents the number of stock awards multiplied by the closing price of our common stock as of |
45
2019 Option Exercises and Stock Vested
The following table shows all stock options exercised and the value realized upon exercise, and all stock awards vested and the value realized upon vesting, by the named executive officersofficers during fiscal 2016,fiscal 2019, which ended on January 28, 2017.
| Option Awards | Stock Awards(1) | ||||||||||
Name | Number of | Value | Number of | Value | ||||||||
Art Peck | 0 | 0 | 56,315 | 1,681,726 | ||||||||
Teri List-Stoll | 0 | 0 | 0 | 0 | ||||||||
Sebastian DiGrande | 0 | 0 | 0 | 0 | ||||||||
Jeff Kirwan | 3,750 | 13,278 | 13,061 | 394,878 | ||||||||
Sonia Syngal | 0 | 0 | 12,974 | 366,471 | ||||||||
Former Executive Officer |
|
|
|
| ||||||||
Sabrina Simmons | 0 | 0 | 52,296 | 1,548,245 | ||||||||
| Option Awards | Stock Awards(1) | |||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
| Robert Fisher | — | — | 8,903 | (2) | 159,987 | |||||
| Teri List-Stoll | — | — | 25,000 | 463,250 | ||||||
| Mark Breitbard | — | — | 37,500 | 964,875 | ||||||
| Julie Gruber | — | — | 18,043 | 460,779 | ||||||
| Sonia Syngal | — | — | 40,427 | 1,034,776 | ||||||
| Art Peck | — | — | 127,692 | 3,270,790 | ||||||
| Neil Fiske | — | — | 32,500 | 588,250 | ||||||
| |
(1) | The amounts |
(2) | These shares have not been issued to Mr. Fisher. They represent the stock units earned by Mr. Fisher as a non-employee director, which are subject to a three-year deferral period. Following the deferral period, shares in an amount equal in value to the stock units, including units acquired through dividend equivalent reinvestment, will be issued to Mr. Fisher unless a further deferral election has been made; provided, however, that shares and accumulated dividend equivalents will be issued immediately upon the resignation or retirement of Mr. Fisher as a non-employee director. |
Nonqualified2019 Nonqualified Deferred Compensation
The table below provides information on the nonqualifiednonqualified deferred compensation activity for the named executive officersofficers in fiscal 2016,fiscal 2019, which ended on January 28, 2017.
Name | Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||
Arthur Peck | 53,185 | 42,477 | 823,615 | 0 | 5,296,738 | ||||||||||
Teri List-Stoll | 0 | 0 | 0 | 0 | 0 | ||||||||||
Sebastian DiGrande | 15,723 | 7,485 | 1,067 | 0 | 24,275 | ||||||||||
Jeff Kirwan | 150,058 | 24,938 | 359,322 | (513,444 | ) | 944,696 | |||||||||
Sonia Syngal | 29,701 | 22,919 | 37,121 | 0 | 258,043 | ||||||||||
Former Executive Officer |
|
|
|
|
| ||||||||||
Sabrina Simmons | 32,308 | 24,400 | 20,110 | 0 | 415,107 | ||||||||||
| Name | Plan | Executive Contribution in Fiscal 2019 ($)(2) | Registrant Contributions in Fiscal 2019 ($)(3) | Aggregate Earnings in Fiscal 2019 ($)(4) | Aggregate Withdrawals/ Distributions in Fiscal 2019 ($) | Aggregate Balance at Fiscal 2019 Year-End ($)(5) | |||||
Robert Fisher(1) | 2016 Equity Incentive Plan | 159,987 | — | (4,986 | ) | — | 155,001 | ||||
| Deferred Compensation Plan | — | — | 14,387 | — | 14,387 | ||||||
| Teri List-Stoll | Deferred Compensation Plan | 83,728 | 25,800 | 38,933 | — | 148,461 | |||||
| Mark Breitbard | Deferred Compensation Plan | 37,269 | 26,800 | 9,716 | — | 73,785 | |||||
| Julie Gruber | Deferred Compensation Plan | 85,219 | 16,077 | 53,798 | — | 155,094 | |||||
| Sonia Syngal | Deferred Compensation Plan | 44,000 | 32,800 | 83,273 | — | 160,073 | |||||
| Art Peck | Deferred Compensation Plan | 51,269 | — | 1,732,621 | — | 1,783,890 | |||||
| Neil Fiske | Deferred Compensation Plan | 27,404 | 26,800 | 1,973 | — | 56,177 | |||||
| Includes Mr. Fisher’s fully vested deferred stock units that he was granted in connection with serving on the Board of Directors. |
| These amounts are included in the “Salary” column of the 2019 Summary Compensation Table. |
| Footnote 9 to the 2019 Summary Compensation Table shows matching contributions under the Company’s Deferred Compensation Plan (“DCP”) for base salary deferrals representing the excess of the participant’s base pay over the current IRS |
| These amounts include earnings and |
| A portion of these amounts were previously reported as deferred compensation in the |
46
2019 CEO Pay Ratio
To identify the median employee and determine the annual total compensation of the median employee, we used the following methodology:
| 1. | As of February 1, 2020, our employee population, prior to excluding any non-U.S. employees, consisted of approximately 129,017 employees. As permitted by the SEC rules, we excluded 6,109 employees from the following countries: Bangladesh 28, Cambodia 13, El Salvador 1, France 646, Guatemala 7, India 863, Indonesia 19, Ireland 120, Italy 324, Mexico 1,170, Pakistan 4, Singapore 1, Sri Lanka 9, Turkey 11, United Kingdom 2,772, and Vietnam 121. In the aggregate, the total number of excluded employees equaled 4.74% of the total employee population, resulting in a total U.S. and non-U.S. employee population of approximately 122,908 that was used for our calculation. |
| 2. | For the non-excluded employees, we used total gross earnings paid, obtained from local payroll data, for the fiscal year ending February 1, 2020 as a consistently applied measure to determine our "median employee". Because there was more than one "median employee" based on total gross earnings paid, we selected an individual we determined to be reasonably representative of our median employee and who did not have any unusual or nonstandard compensation items. |
| 3. | We calculated the total compensation elements for the former CEO, interim CEO and median employee for fiscal 2019 in accordance with the requirements of Item 402(c)(2)(x) of SEC Regulation S-K. For the purposes of this disclosure, we applied a Japanese Yen (“JPY”) to U.S. dollars exchange rate using the monthly average rates of exchange that approximate those in effect during the period in which the compensation elements were paid in Japanese currency. |
Post-Termination Benefits
The Company entered into agreements with Ms. Simmons in 2012, withList-Stoll, Mr. Kirwan in 2014, and with Mr. DiGrande,Breitbard, Ms. List-Stoll andGruber, Ms. Syngal and Mr. Peck in 2016,2017, and Mr. Fiske in 2018, which provide eligibility for post-termination benefitsbenefits in the case of involuntary termination without cause. The agreement with Ms. Simmons was amended in 2014 to extend the term of eligibility for post-termination benefits. The Company has not entered into such an employment agreement with Mr. Peck on October 3, 2014 that provides for substantially the same post-termination benefits as those of the other executive officers, with the exception of his term of eligibility for such benefits.
These agreements in total provide that, if the executive is involuntarily terminated without cause (as specifiedspecified in each respective agreement) prior to February 13, 2018, or February 13,July 1, 2020, for Mr. Peck, the executive is eligible to receive (in exchange for a release of claims):
i. |
| The executive’s then-current salary for eighteen months (the “post-termination period”). Post-termination period payments will cease if the executive accepts other employment or has a professional relationship with another company primarily engaged in the apparel design or apparel retail business or any retailer with apparel sales in excess of $500 million annually, or if the executive breaches his or her obligations to the Company (e.g., duty to protect |
ii. |
| Should the executive elect to continue health coverage through COBRA, reimbursement for a portion of the COBRA premium during the period in which the executive is receiving payments under paragraph (i) above. |
iii. |
| During the period in which the executive is receiving payments under paragraph (i) above, reimbursement for his or her costs to maintain the |
iv. |
| A prorated bonus for the fiscal year in |
v. |
| Accelerated vesting (but not settlement) of restricted stock units and performance shares or units that remain subject only to time vesting conditions that are scheduled to vest prior to April 1 following the |
For Ms. Simmons, the table below shows the amounts that she is eligible to receive under the agreement described above as a result of her termination of employment with the Company. For all other executives, theThe following table shows the amounts that each executive would have been eligible to receive under the agreements described above assuming that they had been terminated without cause on January 28, 2017,February 1, 2020, the last day of our 2016 fiscal2019 fiscal year.
47
| Potential Post-Termination Payment Eligibility | ||||||||||||||||||
Description | Mr. Peck | Ms. List-Stoll | Mr. DiGrande | Mr. Kirwan | Ms. Syngal | Ms. Simmons | |||||||||||||
Cash Payments related to salary (1) | $ | 2,002,500 | $ | 1,312,500 | $ | 1,095,000 | $ | 1,350,000 | $ | 1,312,500 | $ | 1,312,500 | |||||||
Cash Payments related to bonus (2) | 917,511 | 0 | 402,703 | 133,990 | 992,501 | 0 | |||||||||||||
Health Benefits | 2,003 | 1,629 | 2,003 | 2,003 | 2,003 | 1,980 | |||||||||||||
Financial Counseling | 22,950 | 29,650 | 26,240 | 22,950 | 22,950 | 22,950 | |||||||||||||
Stock Award Vesting Acceleration | 297,604 | 0 | 0 | 1,036,557 | 1,023,100 | 1,485,764 | |||||||||||||
Total | 3,242,568 | 1,343,779 | 1,525,946 | 2,545,500 | 3,353,054 | 2,823,194 | |||||||||||||
| Potential Post-Termination Payment Eligibility | |||||||||||||||
| Description | Mr. Fisher(3) | Ms. List-Stoll | Mr. Breitbard | Ms. Gruber | Ms. Syngal | ||||||||||
| Cash Payments | |||||||||||||||
related to salary(1) | $— | $1,387,500 | $1,425,000 | $1,050,000 | $1,650,000 | ||||||||||
| Cash Payments | |||||||||||||||
| related to bonus | — | — | — | — | — | ||||||||||
| Health Benefits | — | 20,830 | 30,423 | 30,398 | 30,423 | ||||||||||
| Financial Counseling | — | 22,950 | 24,614 | 22,950 | 22,950 | ||||||||||
| Stock Award Vesting | |||||||||||||||
| Acceleration | 382,987 | 1,379,499 | 189,107 | 273,233 | 1,141,330 | ||||||||||
| Total | 382,987 | 2,810,779 | 1,669,144 | 1,376,581 | 2,844,703 | ||||||||||
| |
(1) | Payments represent salary continuation for 18 months. The amounts do not include the deferred compensation these executives would also be entitled to receive upon termination, as described above in |
(2) | These shares represent the stock units earned by Mr. Fisher as a non-employee director, which are subject to a three-year deferral period. Following the deferral period, shares in an amount equal in value to the stock units, including units acquired through dividend equivalent reinvestment, will be issued to Mr. Fisher unless a further deferral election has been made; provided, however, that shares and accumulated dividend equivalents will be issued immediately upon the resignation or retirement of Mr. Fisher as a non-employee director. |
| 2019 Post-Termination Payments | ||||||
| Description | Mr. Peck | Mr. Fiske | ||||
Cash Payments related to salary(1) | $2,325,000 | $1,425,000 | ||||
Cash Payments related to bonus(2) | — | — | ||||
| Health Benefits | 21,851 | 28,474 | ||||
| Financial Counseling | 22,950 | 22,950 | ||||
Stock Award Vesting Acceleration(3) | 1,380,491 | — | ||||
| Total | 3,750,292 | 1,476,424 | ||||
(1) | Payments represent |
(2) | Neither Mr. Peck nor Mr. Fiske were eligible for a fiscal 2019 bonus. |
(3) | Represents the number of restricted stock units Mr. Peck received multiplied by |
Acceleration of Equity Upon Change in Control
Under the 2016 Long-Term Incentive Plan, (the “Plan”), in the event of a change in control, any acquiror may assume or substitute outstanding awards with substantially equivalent awards of the acquiror's stock. Except as set forth in an award agreement, outstanding awards which are neither assumed nor substituted by the acquiror in the change in control become fully vested immediately prior to the change in control. The table below shows the value of all unvested options and unvested stock awards that would have become vested in the event of a change in control on January 28, 2017,February 1, 2020, the last day of our 2016 fiscal2019 fiscal year, in the event that awards were not assumed or substituted as described above.
Description | Mr. Peck | Ms. List-Stoll | Mr. DiGrande | Mr. Kirwan | Ms. Syngal | Ms. Simmons | ||||||||||||
Stock Option Vesting Acceleration (1) | 0 | 0 | 1,355,250 | 0 | 0 | 0 | ||||||||||||
Stock Award Vesting Acceleration (2) | 9,117,081 | 2,258,000 | 2,749,544 | 3,888,457 | 3,670,447 | 4,766,864 | ||||||||||||
Total | 9,117,081 | 2,258,000 | 4,104,794 | 3,888,457 | 3,670,447 | 4,766,864 | ||||||||||||
| Description | Mr. Fisher(3) | Ms. List-Stoll | Mr. Breitbard | Ms. Gruber | Ms. Syngal | ||||||||||
| Stock Option Vesting | |||||||||||||||
Acceleration(1) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
| Stock Award Vesting | |||||||||||||||
Acceleration(2) | 382,987 | 5,227,718 | 5,379,551 | 2,423,246 | 5,959,983 | ||||||||||
| Total | 382,987 | 5,227,718 | 5,379,551 | 2,423,246 | 5,959,983 | ||||||||||
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(3) | These shares represent the stock units earned by Mr. Fisher as a non-employee director, which are subject to a three-year deferral period. Following the deferral period, shares in an amount equal in value to the stock units, including units acquired through dividend equivalent reinvestment, will be issued to Mr. Fisher unless a further deferral election has been made; provided, however, that shares and accumulated dividend equivalents will be issued immediately upon the resignation or retirement of Mr. Fisher as a non-employee director. |
Death, Disability or Retirement
Each of our named executive officersofficers, other than Mr. Fisher, is generally entitled to the following additional death, disability or retirement benefits:
i. |
| Executive supplemental long-term disability insurance, which increases income replacement to 50% of base salary up to a maximum payment of $25,000 per month. |
ii. |
| Life insurance, provided to employees at the Director level and above, which provides coverage of three times base salary up to a maximum of $2 million. |
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iii. |
| Upon retirement, our standard forms of stock option and stock award agreements provide for accelerated vesting of any unvested shares under awards that have been outstanding for at least a year and, for performance shares, for which the performance period has been completed. For these purposes, “Retirement” means Employee’s Termination of Service for any reason (other than due to Employee’s misconduct as determined by the Company in its sole discretion) after Employee has attained age 60 and completed at least |
iv. |
| Upon death (and, in the case of stock options, termination on account of disability), our standard forms of stock option and stock award agreements provide for accelerated vesting of any unvested shares under awards that have been outstanding for at least a year and, for performance shares, for which the performance period has been completed. The table below shows the value of all unvested options and unvested stock awards that would have become vested in the event of the named executive’s death (and, in the case of stock options, termination on account of disability) on |
Description | Mr. Peck | Ms. List-Stoll | Mr. DiGrande | Mr. Kirwan | Ms. Syngal | Ms. Simmons | ||||||||||||
Stock Option Vesting Acceleration (1) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Stock Award Vesting Acceleration (2) | 435,365 | 0 | 0 | 1,978,843 | 1,979,024 | 2,456,772 | ||||||||||||
Total | 435,365 | 0 | 0 | 1,978,843 | 1,979,024 | 2,456,772 | ||||||||||||
| Description | Mr. Fisher(3) | Ms. List-Stoll | Mr. Breitbard | Ms. Gruber | Ms. Syngal | ||||||||||
| Stock Option Vesting | |||||||||||||||
Acceleration(1) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
| Stock Award Vesting | |||||||||||||||
Acceleration(2) | 382,987 | 3,194,248 | $ | 1,683,965 | $ | 928,728 | $ | 1,760,612 | |||||||
| Total | 382,987 | 3,194,248 | 1,683,965 | 928,728 | 1,760,612 | ||||||||||
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(1) |
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(3) | These shares represent the stock units earned by Mr. Fisher as a non-employee director, which are subject to a three-year deferral period. Following the deferral period, shares in an amount equal in value to the stock units, including units acquired through dividend equivalent reinvestment, will be issued to Mr. Fisher unless a further deferral election has been made; provided, however, that shares and accumulated dividend equivalents will be issued immediately upon the resignation or retirement of Mr. Fisher as a non-employee director. |
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Equity Compensation Plan Information
The following table provides information as of January 28, 2017February 1, 2020 about shares of our common stock which may be issued upon the exercise of options, warrants and rights granted to employees, consultants or members of our Board of Directors under all of our equity compensation plans, including the 2016 Long-Term Incentive Plan and the Employee Stock Purchase Plan.
Equity Plan Summary | |||||||||
| Column (A) | Column (B) | Column (C) | ||||||
Plan Category | Number of | Weighted-Average | Number of Securities | ||||||
Equity Compensation Plans Approved by Security Holders (1) | 13,549,210 | (2) | 32.05 | 36,730,578 | (3) | ||||
Equity Compensation Plan Not Approved by Security Holders | 0 | 0 | 8,225 | ||||||
Total | 13,549,210 | 32.05 | 36,738,803 | ||||||
| Equity Plan Summary | |||||||||
| Column (A) | Column (B) | Column (C) | |||||||
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (#) (Excluding Securities Reflected in Column (A)) | ||||||
| Equity Compensation Plans | |||||||||
| Approved by Security | |||||||||
Holders(1) | 21,330,373 | (2) | $28.26 | 53,804,195 | (3) | ||||
| Equity Compensation Plan | |||||||||
| Not Approved by Security | |||||||||
| Holders | — | — | — | ||||||
| Total | 21,330,373 | $28.26 | 53,804,195 | ||||||
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(1) | These plans consist of our 2016 Long-Term Incentive Plan (the “2016 Plan”) and Employee Stock Purchase Plan (the “ESPP”). |
(2) | This number excludes |
(3) | This number includes |
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PROPOSAL NO. 5 — Approval of the Amendment and Restatementof The Gap, Inc. Employee Stock Purchase Plan
Purpose of the Amendment and Restatement
Our shareholders are being asked to vote on a proposal to approve the amendment and restatement of our Employee Stock Purchase Plan (the “ESPP”). Our ESPP provides our eligible employees and those of our participating subsidiaries with the opportunity to designate in advance of specified purchase periods a percentage of compensation to be withheld from their pay and applied toward the purchase of discounted shares of our common stock. As such, the ESPP serves as a valuable means for our Company to attract and retain talented employees. In addition, our Board of Directors believes that it is in our best interests to provide our employees with the opportunity to acquire an ownership interest in our Company through their participation in the ESPP, and thereby more closely align their interests with those of the shareholders.
The principal purpose of the amendment and restatement of the ESPP is to approve an 8,000,000 share increase to the number of shares of common stock available for issuance under the plan. As of March 1, 2017, the Company had approximately 933,691 shares of its common stock remaining available for issuance under the ESPP. Based on the Company’s current ESPP usage rate, the Company expects to deplete that remaining share reserve in late 2017.
The Board of Directors has determined that the number of shares issuable under the ESPP should be increased by 8,000,000 shares, subject to approval of our shareholders at the 2017 Annual Meeting. Based on the Plan’s past participation rate, the Company believes that the 8,000,000 additional authorized shares will be sufficient to operate the ESPP for approximately five additional years.
The secondary purpose of the amendment and restatement of the ESPP is to approve the following technical changes to the plan: (i) revise the definition of “compensation” eligible to be contributed to the plan to exclude “commissions”, in order to equalize contributions to the plan across all our brands, (ii) formalize within the plan document our administrative requirement that no more than 6,250 shares of our common stock be purchasable by any one participant on any quarterly purchase date, (iii) provide specific authority under the plan for us to authorize one or more offerings under the ESPP that are not designed to comply with the requirements of Internal Revenue Code Section 423, but with the requirements of the foreign jurisdictions in which those offerings are conducted, and (iv) modify the adjustment provision contained within the plan.
Our Board approved the amended and restated ESPP on February 22, 2017, subject to shareholder approval at the Annual Meeting.
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Summary Description of the Amended and Restated Plan
The principal terms and provisions of the ESPP are summarized below. The summary, however, is not intended to be a complete description of all the terms of the ESPP and is qualified in its entirety by reference to the complete text of the plan document, a copy of which is attached as Appendix A to this Proxy Statement and incorporated herein by reference.
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Purpose
The purpose of the ESPP is to provide our eligible employees with the opportunity to purchase discounted shares of our common stock through payroll deductions. The Purchase Plan is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code (the “Code”). The ESPP was originally established effective as of December 1, 1994. It was amended and restated effective as of January 29, 2002, was further amended and restated, effective December 1, 2006, and was further amended, effective as of June 2, 2008. The ESPP was last approved by our shareholders at our 2008 Annual Meeting.
Securities Subject to the ESPP
The number of shares of our common stock reserved for issuance under the ESPP will be limited to 40,500,000 shares, assuming shareholder approval of this Proposal 5. The ESPP does not contain an evergreen provision, pursuant to which the share pool would be automatically increased each year based upon a specified formula. As of March 1, 2017, 18,712,622 shares had been issued under the plan, and, assuming shareholder approval of this Proposal 5, 8,933,691 shares remain available for future issuance under the plan. The shares issuable under the ESPP may be made available from authorized but unissued shares of our common stock or from shares of common stock repurchased by us, including shares repurchased on the open market. On March 1, 2017, the closing price of our common stock was $24.33.
Should any change be made to our outstanding common stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding common stock as a class without our receipt of consideration, should the value of the outstanding shares of our common stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any merger, consolidation or other reorganization, then equitable adjustments will be made by the plan administrator to (i) the maximum number and/or class of securities issuable under the ESPP, (ii) the maximum number and/or class of securities purchasable per participant on any one purchase date or in any calendar year, and (iii) the number and class of securities and the purchase price per share in effect under each outstanding purchase right. The adjustments will be made in such manner as the plan administrator deems appropriate and such adjustments shall be final, binding and conclusive.
Offering Periods
Shares of our common stock will be offered for purchase under the ESPP through a series of successive quarterly purchase periods, commencing on the first business day in June, September, December and March. From time to time, the Company may change the length or commencement date of the purchase periods (but in no event may any purchase period exceed 27 months).
The terms and conditions of each purchase period may vary, and two or more periods may run concurrently under the ESPP, each with its own terms and conditions.
The plan administrator may authorize one or more offerings under the ESPP that are not designed to comply with the requirements of Code Section 423, but with the requirements of the foreign jurisdictions in which those offerings are conducted.
Eligibility to Participate
In general, any individual who is in the employ of any of our participating parent or subsidiary corporations is eligible to participate in the ESPP. However, any employee whose customary employment is for not more than five months in any calendar year or who would own stock and/or hold outstanding options to purchase stock representing five percent or more of our voting stock or the voting stock of any of
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our subsidiaries is not eligible to participate in the Plan. As of March 1, 2017, 109,861 employees, including 9 executive officers, were eligible to participate in the ESPP.
Participation in the ESPP terminates when a participating employee’s employment with the Company ceases for any reason, the employee withdraws from the ESPP, or the ESPP is terminated or amended such that the employee no longer is eligible to participate. Any payroll deductions which the participating employee may have made for the purchase period in which such cessation of employment or loss of eligibility occurs will be refunded and will not be applied to the purchase of our common stock.
Enrollment and Contributions
Eligible employees voluntarily elect whether or not to enroll in the ESPP prior to the commencement of the applicable purchase period. Employees who have enrolled in the ESPP in previous purchase periods will continue to participate in future purchase periods. However, an employee may cancel his or her participation at any time (subject to certain administrative requirements).
Employees contribute to the ESPP through after-tax payroll deductions. Participating employees generally may contribute up to 15% of their eligible compensation to the ESPP. For purposes of the ESPP, eligible compensation means a participant’s gross salary, wages and overtime pay, but does not include bonuses or commissions. From time to time, the Company may establish a lower maximum permitted contribution percentage.
After the purchase period begins, employees may not change their current contribution percentage, and any requested change will be effective for the next purchase period. An employee, however, may withdraw from the ESPP at any time.
Purchase of Shares/Special Limitations
On the last business day of each quarterly purchase period, each participating employee’s payroll deductions are used to purchase shares of our common stock on the employee’s behalf. The purchase price of the shares will be equal to 85% the fair market value of our common stock on the last day of the applicable purchase period. The fair market value of our stock, for purposes of the ESPP, is the closing price of our common stock on the New York Stock Exchange Composite Transactions Index on the day in question.
No employee may purchase under the ESPP more than 25,000 shares of our common stock in any one calendar year or more than 6,250 shares of our common stock on any one quarterly purchase date. In addition, no employee may purchase more than $25,000 worth of our common stock (based on the fair market value on the start date of the applicable purchase period in which the shares are purchased) in any one calendar year.
No participating employee will have any stockholder rights with respect to the shares covered by his or her purchase rights until the shares are actually purchased on his or her behalf and the participating employee has become a holder of record of the purchased shares. No adjustment will be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase. No purchase rights will be assignable or transferable by a participating employee, and the purchase rights will be exercisable only by the participating employee.
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New Plan Benefits
No purchase rights will be granted on the basis of the increase to the share reserve of the ESPP unless our stockholders approve the amended and restated ESPP at the 2017 Annual Meeting.
Plan Benefits
The following table sets forth, for each of the individuals and groups indicated, the total number of shares of our common stock that were purchased under the ESPP during the period beginning in June 2008 and ending on February 28, 2017.1
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1Represents ESPP shares acquired since June 2008, when the ESPP was last amended and approved by shareholders.
Administration, Amendment and Termination
Subject to the terms of the ESPP, the Company has all discretion and authority necessary to supervise and control the operation and administration of the ESPP, including the power to interpret and determine any question arising in connection with the ESPP. The Company may delegate one or more of its duties in the administration of the ESPP to any one of its employees or to any other person. The Board of Directors, in its sole discretion, may amend or terminate the ESPP at any time and for any reason, including approving amendments that could increase the cost of the ESPP or alter the allocation of benefits among the participants. In no event, however, may our Board of Directors effect any of the following amendments or revisions to the ESPP without the approval of our stockholders: (i) increase the number of shares of our common stock issuable under the ESPP, except for permissible adjustments described above in the event of certain changes in our capitalization or (ii) modify the eligibility requirements for participation in the ESPP.
Federal Income Tax Consequences
The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended. The U.S. federal income tax consequences of the purchase of shares of common stock under a plan which so qualifies are as follows:
An employee will have no taxable income when the shares of common stock are purchased for him or her under the ESPP. The employee generally will be taxed when he or she sells or otherwise disposes of the stock (such sales or dispositions are collectively referred to below as sales).
The employee’s income tax treatment depends on whether shares are sold within 24 months after the first day of the three-month purchase period in which the shares were purchased (the “24-month holding period”).
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For a sale after the 24-month holding period, an employee will have ordinary income equal to the lesser of: (i) 15% of the fair market value of the shares on the first day of the purchase period; or (ii) the amount by which the fair market value of the stock at the time of sale exceeds the purchase price. Any additional gain from a sale after the 24-month holding period will be taxed as a long-term capital gain. Any loss will be taxed as a long-term capital loss.
If shares are sold before the end of the 24-month holding period, the entire amount of the discount received from the stock’s market price when the shares were purchased will be taxed as ordinary income. Any additional gain or any loss, measured by the difference between the sales proceeds and the fair market value of the stock when the shares were purchased, will be taxed as a long-term or short-term capital gain or loss, depending on whether the employee has held the shares for more than one year at the time of sale. The holding period for determining whether the gain or loss is short-term or long-term begins on the day after the stock is purchased through the ESPP.
We will be entitled to deduct, for U.S. federal income tax purposes, an amount equal to the ordinary income that an employee recognizes when he or she sells stock purchased under the ESPP within the 24-month holding period. We will not be entitled to such a deduction with respect to any shares that are sold after the 24-month holding period.
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PROPOSAL NO. 6 — Shareholder Proposal
The National Center for Public Policy Research, 20 F Street, NW, Suite 700, Washington, DC 20001, who held more than $2,000 of shares of common stock on December 5, 2016, intends to submit the following proposal to shareholders for approval at the 2017 Annual Meeting of Shareholders.
The Board opposes the adoption of this proposal and asks shareholders to review the Position of the Board of Directors (Opposition Statement), which follows the proposal.
The proposal and the proponent's supporting statement are reproduced below without alteration (italics added):
Human Rights Review – High-Risk Region
Whereas, the Securities and Exchange Commission has consistently recognized that human rights constitute a significant policy issue.
Company operations in high-risk regions with poor human rights records risk damage to Gap’s reputation and shareholder value.
Gap has a presence in areas such as Qatar, Saudi Arabia and the United Arab Emirates – all nations that have questionable human rights records as it relates to women’s rights and gay rights.
The company’s operations in high-risk regions may worsen certain human rights abuses in those areas.
Resolved: The proponent requests the board of directors review the company’s guidelines for selecting countries / regions for its operations and issue a report, at reasonable expense excluding any proprietary information, to shareholders by December 2017. The report should identify Gap’s criteria for investing in, operating in and withdrawing from high-risk regions.
Supporting Statement: If the company chooses, the review may consider developing guidelines on investing or withdrawing from areas where the government has engaged in systematic human rights violations.
In its review and report, the company might also consider a congruency analysis between its stated corporate values and company operations in certain regions, which raises an issue of misalignment with those corporate values, and stating the justification for such exceptions.
For example, the company worked to defeat religious freedom efforts in Indiana and Arkansas by mischaracterizing those efforts as “legalized discrimination” and claiming that “[t]hese new laws and legislation, that allow people and businesses to deny service to people based on their sexual orientation, turn back the clock on equality and foster a culture of intolerance.”
Yet, the company maintains operations in high-risk regions where homosexual acts are criminalized.
The proponent believes that Gap’s record to date demonstrates a gap between its statements and its actions. The requested report would play a role in illuminating and addressing the factors accounting for this gap.
POSITION OF THE BOARD OF DIRECTORS (OPPOSITION STATEMENT)
The Board of Directors has considered this proposal and believes that its adoption at this time is not in the best interests of the Company or our shareholders.
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The requested report wastefully duplicates current efforts. The Board believes that providing the requested report wastefully duplicates existing policies and current public disclosures—without
improving shareholder value. Our website (www.gapincsustainability.com) shares our sustainability strategy which includes improving factory working conditions, promoting equal pay for women and increasing minimum wage, and the Company’s P.A.C.E. (Personal Advancement & Career Enhancement) program to provide women with skills and confidence to advance their lives. As part of our sustainability and business practices, the Company already reviews guidelines for selecting countries or regions for its operations including evaluating criteria for investing in, operating in, and withdrawing from certain areas. The proposal’s separate review is unnecessary and our website discloses our sustainability achievements and efforts.
We are dedicated to supporting human rights in all aspects of our business. Gap Inc. has a strong track record of supporting human rights. The Company received the 2016 Catalyst Award in recognition of our culture of equality, inclusion, and opportunity. We were selected for our leadership on equal pay for women, our strong representation of women at all levels, and our dedication to advancing women. We support the principles articulated in the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and the International Labor Organization’s (ILO’s) Declaration on Fundamental Principles and Rights at Work. We expect our business partners, including suppliers, to adopt and adhere to similar values. We implement our human rights commitment through our Code of Vendor Conduct and enforce the Code through our assessment, remediation, capability building, and worker engagement programs at supplier facilities. For example, more than 45,000 women in 12 countries have participated in P.A.C.E. since it was launched in 2007, and we announced our commitment to expand P.A.C.E. to reach one million women and girls around the world by 2020. We also partner with our peers in collaborative initiatives such as the Alliance for Bangladesh Worker Safety, the Ethical Trading Initiative, the ILO’s Better Work Program, the Sustainable Apparel Coalition, the Zero Discharge of Hazardous Chemicals Initiative, and the UN Global Compact.
Our ongoing work is to embed human rights considerations in all relevant business decisions. This commitment applies globally to our own operations, our products and services, and our business relationships. The Company will continue to look for ways to promote and advance human rights within its sphere of influence.
We believe human rights are protected and enhanced through local engagement. We do not believe exiting certain regions protects or enhances human rights. On the contrary, local engagement protects and improves human rights. We recognize our responsibility to engage with our local business partners to address and remedy adverse impacts and seek to build their capacity to respect human rights through training and engagement.
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BENEFICIAL OWNERSHIP
The following table sets forth certain information as of March 20, 201723, 2020 to indicate beneficialbeneficial ownership of our common stock by (i) each person known by us to be the beneficialbeneficial owner of more than 5% of the outstanding shares of our common stock, (ii) each director and nominee and each executive officerofficer and former executive officerofficer named in the “Summary“2019 Summary Compensation Table”Table” of this Proxy Statement, and (iii) all of our directors and executive officersofficers as a group. Unless otherwise indicated, beneficialbeneficial ownership is direct and the person indicated has sole voting and investment power. BeneficialBeneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended.
| Shares Beneficially Owned |
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Name of Beneficial Owner | Common | Awards | Total | % of | ||||||||
Directors and Named Executive Officers |
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Domenico De Sole (1) | 21,212 | 14,018 | 35,230 |
| * | |||||||
Sebastian DiGrande | 0 | 0 | 0 | 0 | % | |||||||
Robert J. Fisher (4) | 47,803,664 | 14,018 | 47,817,682 | 11.9 | % | |||||||
William S. Fisher (5) | 63,993,807 | 14,018 | 64,007,825 | 16.0 | % | |||||||
Tracy Gardner | 0 | 9,616 | 9,616 |
| * | |||||||
Brian Goldner | 0 | 5,602 | 5,602 |
| * | |||||||
Isabella D. Goren | 7,875 | 14,018 | 21,893 |
| * | |||||||
Jeff Kirwan | 34,548 | 136,430 | 170,978 |
| * | |||||||
Teri List-Stoll | 0 | 0 | 0 | 0 | % | |||||||
Bob L. Martin | 42,432 | 14,018 | 56,450 |
| * | |||||||
Jorge P. Montoya | 28,024 | 14,018 | 42,042 |
| * | |||||||
Arthur Peck | 164,066 | 565,000 | 729,066 |
| * | |||||||
Mayo A. Shattuck III | 86,144 | 22,696 | 108,840 |
| * | |||||||
Sonia Syngal | 41,591 | 103,750 | 145,341 |
| * | |||||||
Katherine Tsang | 17,880 | 14,018 | 31,898 |
| * | |||||||
All directors and executive officers, as a group (18 persons) (6) | 108,495,929 | 1,156,933 | 109,651,953 | 27.3 | % | |||||||
Former Executive Officers |
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Sabrina Simmons (7) | 0 | 137,500 | 137,500 |
| * | |||||||
Certain Other Beneficial Holders |
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Doris F. Fisher (8) | 28,787,331 | 0 | 28,787,331 | 7.2 | % | |||||||
John J. Fisher (9) | 61,920,552 | 0 | 61,920,552 | 15.5 | % | |||||||
Blackrock, Inc. (10) | 22,396,705 | 0 | 22,396,705 | 5.6 | % | |||||||
The Vanguard Group (11) | 21,223,832 | 0 | 21,223,832 | 5.3 | % | |||||||
| Shares Beneficially Owned | ||||||||
| Name of Beneficial Owner | Common Stock | Awards Vesting Within 60 Days(1) | Total | % of Class(2) | ||||
| Directors and Named Executive Officers | ||||||||
| Amy Bohutinsky | — | 12,081 | 12,081 | * | ||||
| Mark Breitbard | 48,565 | 397,500 | 446,065 | * | ||||
John J. Fisher(3) | 65,086,872 | 12,081 | 65,098,953 | 17.5 | % | |||
Robert J. Fisher(4) | 46,385,596 | 21,998 | 46,407,594 | 12.5 | % | |||
William S. Fisher(5) | 55,752,385 | 21,998 | 55,774,383 | 15.0 | % | |||
Neil Fiske(6) | — | 62,500 | 62,500 | * | ||||
| Tracy Gardner | 10,537 | 21,998 | 32,535 | * | ||||
| Isabella D. Goren | 23,171 | 21,998 | 45,169 | * | ||||
| Julie Gruber | 40,876 | 214,300 | 255,176 | * | ||||
| Teri List-Stoll | 97,014 | 247,500 | 344,514 | * | ||||
| Bob L. Martin | 51,700 | 21,998 | 73,698 | * | ||||
Amy Miles(7) | — | 27,164 | 27,164 | * | ||||
| Jorge P. Montoya | 39,881 | 21,998 | 61,879 | * | ||||
| Chris O'Neill | — | 16,443 | 16,443 | * | ||||
Art Peck(8) | 295,856 | 2,262,818 | 2,558,674 | * | ||||
Lexi Reese(9) | — | 12,081 | 12,081 | * | ||||
| Mayo A. Shattuck III | 101,440 | 31,801 | 133,241 | * | ||||
Elizabeth Smith(7) | — | 27,164 | 27,164 | * | ||||
| Sonia Syngal | 93,915 | 563,750 | 657,665 | * | ||||
All directors and executive officers, as a group (20 persons)(10) | 167,688,224 | 1,791,883 | 169,480,107 | 45.3 | % | |||
| Certain Other Beneficial Holders | ||||||||
BlackRock, Inc.(11) | 22,096,661 | — | 22,096,661 | 5.9 | % | |||
Dodge & Cox(12) | 28,449,226 | — | 28,449,226 | 7.6 | % | |||
Doris F. Fisher(13) | 22,738,787 | — | 22,738,787 | 6.1 | % | |||
The Vanguard Group(14) | 28,394,429 | — | 28,394,429 | 7.6 | % | |||
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| “*” indicates ownership of less than 1% of the outstanding shares of our common stock. |
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| Includes (a) |
| Includes (a) |
(5) | Includes (a) 21,998 shares to be issued upon settlement of stock units (and related dividend equivalent rights) which are subject to a three-year deferral period but would be issued immediately upon his resignation or retirement over which he has sole dispositive and voting power, (b) 11,740,444 shares beneficially owned as trustee of |
(6) | Mr. Fiske was no longer an executive officer as of January 2020. |
| Ms. Miles and Ms. Smith were appointed to the Board of Directors effective April 1, 2020. Their share ownership includes the outstanding stock units earned but unpaid to non-employee directors that they each received on April 1, 2020. |
(8) | Mr. Peck was no longer an executive officer as of November 2019. |
(9) | Ms. Reese is not standing for reelection to the Board of Directors. |
(10) | Reflects the information above for our current directors and named executive officers as well as information regarding our unnamed executive |
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| The Schedule 13G filed with the SEC by Dodge & Cox on February 13, 2020 indicates that, as of December 31, 2019, Dodge & Cox has sole power to direct the voting of 27,057,436 shares and sole power to direct the disposition of 28,449,226 shares. The address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, CA 94104. |
(13) | Includes 12,000,000 shares beneficially owned as trustee of trusts for which Doris F. |
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Note Regarding Various Fisher Family Holdings
SEC rules require reporting of beneficialbeneficial ownership of certain shares by multiple parties where voting and/or dispositive power over those shares is shared by those multiple parties. As a result, the following shares are listed multiple times in the table above.
The shares described in footnotes (4)(3), (5)(4) and (9)(5) above for which voting and investment power is shared by Messrs. John J. Fisher, Robert J. Fisher, and/or William S. Fisher, and John J. Fisher actually represent an aggregate of 13,133,97014,285,773 shares, rather than 26,267,94028,571,546 shares, as a result of that shared voting and investment power.
In addition, the shares described in footnotes (4)(3), (5)(4) and (9)(5) above for which sole dispositive power is held by one person and pursuant to irrevocable proxies, sole voting power is held by a different person actually represent an aggregate of 14,618,27814,636,866 shares, rather than 29,236,55629,273,732 shares.
For purposes of the above table, removing the shares counted multiple times (described above) results in an aggregate total beneficial ownership of 36.5%37.1% of the outstanding shares by Messrs. John J. Fisher, Robert J. Fisher, and William S. Fisher.
The aggregate total beneficial ownership of Mrs. Doris F. Fisher and Messrs. John J. Fisher, Robert J. Fisher, and William S. Fisher, including charitable entities for which one or more of the Fishers is 43.7%a trustee, is 43.2% of the outstanding shares. Mrs. Doris F. Fisher, and Messrs. John J. Fisher, Robert J. Fisher, and William S. Fisher each disclaim beneficialbeneficial ownership over shares owned by other members of the Fisher family, except as specificallyspecifically disclosed in the footnotes above.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) ofOTHER INFORMATION
Securities and Exchange Commission regulations require us to identify in this Proxy Statement anyone who filed a required report late during the most recent fiscal year. The Company notes that due to a third-party administrative error, a sale by Mr. De Sole of the Company’s common stock on November 19, 2012 was never reported on a Form 4. Mr. De Sole reported this transaction on Form 5 on March 9, 2017. This transaction did not result in any liability under Section 16(b) of the Exchange Act. Based on our review of forms we received, or written representations from reporting persons stating that they were not required to file these forms, we believe that during fiscal 2016 all other Section 16(a) filing requirements were satisfied on a timely basis or previously disclosed.
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QUESTIONS AND ANSWERS ABOUTTHE ANNUAL MEETING AND VOTING
Who are the proxyholders and how were they selected?
The proxyholders are Arthur Peck,Sonia Syngal, Julie Gruber and Teri List-Stoll,Katrina O'Connell, who were selected by our Board of Directors and are officersofficers of the Company. The proxyholders will vote all proxies, or record an abstention, in accordance with the directions on the proxy. If no contrary direction is given, the shares will be voted as recommended by our Board of Directors.
How much did this proxy solicitation cost and who pays for it?
The Company will pay all expenses in connection with the solicitation of the proxies relating to this Proxy Statement, including the charges of brokerage houses and other custodians, nominees or fiduciariesfiduciaries for forwarding documents to security owners. In addition to solicitation by mail, certain of our officers,officers, directors and employees (who will receive no extra compensation for their services) may solicit proxies by email, by telephone, by fax or in person. We have also retained the services of D.F. King & Co. to solicit the proxies of certain shareholders for the Annual Meeting and provide other consultation services. The cost of D.F. King’s services is estimated to be $8,000, plus reimbursement of out-of-pocket expenses.
How can I electronically access the proxy materials?
We are using the Internet as our primary means of furnishing our proxy materials to most of our shareholders. Rather than sending those shareholders a paper copy of our proxy materials, we are sending a Notice of Internet Availability of Proxy Materials. That Notice contains instructions for accessing the materials and voting via the Internet. The Notice also contains information on how to request a paper copy of the proxy materials by mail. We believe this method of distribution makes the proxy distribution process more efficient,efficient, less costly and limits our impact on the environment. This Proxy Statement and our 2016
2019 Annual Report to Shareholders are available at: www.gapinc.com (follow the Investors, Financial Information, Annual Reports &and Proxy links).
Can I receive proxy materials for future annual meetings by email rather than receiving a paper copy of the Notice?
If you are a Shareholder of Record or a BeneficialBeneficial Owner, you may elect to receive the Notice or
other future proxy materials by email by logging into www.proxyvote.com. If you are a BeneficialBeneficial Owner, you can also contact your broker directly to opt for email delivery of proxy materials. If you choose to receive proxy materials by email, next year you will receive an email with instructions on how to view those materials and vote before the next annual meeting. Your choice to obtain documents by email will remain in effect until you notify us otherwise. Delivering future notices by email will help us further reduce the cost and environmental impact of our shareholder meetings.
Under SEC rules, a single package of Notices may be sent to any household at which two or more shareholders reside if they appear to be members of the same family, unless contrary instructions have been received. Each shareholder continues to receive a separate Notice within the package. This procedure, referred to as householding, reduces the volume of duplicate materials shareholders receive and reduces mailing expenses. Shareholders may revoke their consent to future householding mailings or enroll in householding by contacting Broadridge toll free at 1-866-540-7095, or by writing to Broadridge,
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Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Shareholders who wish to receive a separate set of proxy materials should contact Broadridge at the same phone number or mailing address.
What is the difference between a shareholder of record and a beneficialbeneficial owner of shares?
Shareholder Ofof Record
If your shares are registered directly in your name with the Company’s transfer agent, Wells Fargo Bank, N.A.,Equiniti Trust Company, you are considered the shareholder of record with respect to those shares.
BeneficialBeneficial Owner
If your shares are held in an account at a brokerage firm,firm, bank, broker-dealer, or other similar organization, then you are the beneficialbeneficial owner of shares held in “street name.”name”. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficialbeneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. Please note that the organization is not allowed to vote your shares on most matters without your instructions, so it is important for you to provide direction to the organization on how to vote.
May I attendWhat is the date, time and place of the Annual Meeting?
All shareholders as of the close of business on the Record Date, or holders of a valid proxy forWe will hold the Annual Meeting are entitledon May 19, 2020 at 10:00 a.m. San Francisco Time, via the Internet at www.virtualshareholdermeeting.com/GAP2020.
How can I listen to the live webcast of the meeting?
We plan to offer an audio webcast of the2020 Annual Meeting at www.gapinc.com. If you choose to
listen to the webcast, go to our website atwill also be archived on www.gapinc.com (follow the Investors, Financial News and Events, Webcasts links) shortly before the start of the meeting and follow the instructions provided. Please note that this webcast will be “listen only.” If you would like to vote, ask questions, or otherwise interact with the meeting participants, you will need to attend the meeting in person.. The webcast will be recorded and
available for replay on www.gapinc.com for at least 30 days following the Annual Meeting.
How do I submit a question at the Annual Meeting?
Proxy instructions, ballots and voting tabulations that identify individual shareholders are handled in a manner that protects the voting privacy of our shareholders. Your vote will not be disclosed to anyone, except:
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We retain an independent tabulator and inspector of election to receive and tabulate the proxies and to certify the voting results.
What happens if I do not give specificspecific voting instructions?
Shareholder Ofof Record
If you are a shareholder of record and you sign, date and return a proxy card but do not specify how to vote, your shares will be voted in accordance with the recommendations of the Board of Directors on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion regarding any other matters properly presented for a vote at the Annual Meeting or any adjournments or postponements thereof.
BeneficialBeneficial Owner
If you are a beneficialbeneficial owner and hold your shares through a broker, bank, or other similar organization, and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or other nominee will determine if it has the discretionary authority to vote on a particular matter. Brokers and other nominees have the discretion to vote on routine matters such as Proposal 2 (ratification(ratification of the selection of independent registered public accounting firm)firm), but do not have the discretion to vote on non-routine matters such as Proposal 1 (election of directors), and Proposal 3 (advisory vote on frequency of advisory vote on executive compensation), Proposal 4 (advisory vote on executive compensation), Proposal 5 (approval of the Amendment and Restatement of The Gap, Inc. Employee Stock Purchase Plan), and Proposal 6 (shareholder proposal). Therefore, your shares will not be voted on non-routine matters without your voting instructions.
The holders of a majority of the outstanding shares of our common stock must be present in person or by proxy, willto constitute a quorum for the transaction of business at the Annual Meeting. Your shares are counted as present at the Annual Meeting if you properly submit your proxy prior to the Annual Meeting or vote via the Internet while virtually attending the Annual Meeting. The independent inspector(s) of election appointed for the Annual Meeting will determine whether or not a quorum is present and will tabulate votes cast by proxy or in personvia the Internet at the Annual Meeting.
Abstentions are included in the determination of shares present for quorum purposes. Because abstentions represent shares entitled to vote, the effect of an abstention will generally be the same as a vote against a proposal. However, abstentions will have no effect on the election of directorsdirectors.
| IF YOU ARE A SHAREHOLDER OF RECORD: | IF YOU ARE A BENEFICIAL HOLDER OF SHARES HELD IN "STREET NAME": | |||
By Internet Prior to the 2020 Annual Meeting* | www.proxyvote.com | www.proxyvote.com | ||
By Internet During the 2020 Annual Meeting* | www.virtualshareholdermeeting.com/GAP2020 | www.virtualshareholdermeeting.com/GAP2020 | ||
| By Telephone* | 1-800-690-6903 | Follow the voting instructions you receive from your brokerage firm, bank, broker dealer or other intermediary. | ||
| 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 | Follow the voting instructions you receive from your brokerage firm, bank, broker dealer or other intermediary. | ||
| * | While we and Broadridge do not charge any fees for voting by Internet or telephone, there may be related costs from other parties, such as usage charges from Internet access providers and telephone companies, for which you are responsible. |
Broker non-votes occur when nominees, such as brokers and banks holding shares on behalf of the beneficialbeneficial owners, are prohibited from exercising discretionary voting authority for beneficialbeneficial owners who have not provided voting instructions. Brokers and other nominees may vote without instruction only on “routine” proposals. On “non-routine” proposals, nominees cannot vote without instructions from the beneficialbeneficial owner, resulting in so-called “broker non-votes.”non-votes”. The proposal to ratify Deloitte & Touche LLP as the Company’s independent registered public accounting firmfirm is the only routine proposal on the agenda for our Annual Meeting. The other fivetwo proposals on the agenda are non-routine. If you hold your shares with a broker or other nominee, they will not be voted on non-routine proposals unless you give voting instructions.
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So long as the broker has discretion to vote on at least one proposal, broker non-votes are counted in determining a quorum but are not counted for purposes of determiningProposals 1 and 3, and will therefore have no effect on the numberoutcome of shares present in person or represented by proxy on a voting matter.
Election Ofof Directors
Election of directors by shareholders will be determined by a majority of the votes cast with respect to each director in personby proxy or by proxy,via the Internet at the Annual Meeting. Pursuant to the Company’s Bylaws, a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director. Votes cast shall include votes “for” and “against” a nominee, and exclude “abstentions” and “broker non-votes” with respect to that nominee’s election. Under our Corporate Governance Guidelines, at any meeting of shareholders where nominees are subject to an uncontested election (the number of nominees is equal to the number of seats), any nominee for director who receives a greater number of votes “against” his or her election than votes “for” such election, shall submit to the Corporate Secretary of the Company a letter offering his or her resignation, subject to the Board of Directors’ acceptance. The Governance and Sustainability Committee will consider the offer of resignation and will recommend to the Board the action to be taken. The Board of Directors will act promptly with respect to each such letter of resignation and will promptly notify the director concerned of its decision. The Board of Directors’ decision will be disclosed publicly.
Other Proposals
With respect to the vote on the frequency of the advisory vote on the overall compensation of the Company's named executive officers, if none of the frequency options receives a majority of the votes cast, the option receiving the greatest number of votes will be considered the frequency recommended by the Company's shareholders.
The other fourtwo matters on the agenda for shareholder approval at the Annual Meeting will be decided by the affirmativeaffirmative vote of a majority of the shares counted as present in person or by proxy, at the Annual Meeting and entitled to vote on the subject matter. Please noteNote that Proposal 2 (ratification(ratification of the selection of independent registered public accounting firm),firm) and Proposal 3 (advisory vote on frequency of advisory vote on executive compensation), Proposal 4 (advisory vote on executive compensation) and Proposal 6 (shareholder proposal) are advisory only and will not be binding on the Company, the Board or any committee of the Board. The results of the votes on these proposals will be taken into consideration by the Company, the Board or the appropriate committee of the Board, as applicable, when making future decisions regarding these matters.
How will any other items be voted upon at the Annual Meeting?
If any other matter not mentioned in this Proxy Statement is properly brought before the meeting, including without limitation (i) matters about which the proponent failed to notify us on or before February 16, 201721, 2020 (ii) shareholder proposals omitted from this Proxy Statement and the form of proxy pursuant to the proxy rules of the SEC, and (iii) matters incidental to the conduct of the meeting, the proxyholders will vote upon such matters in accordance with their best judgment pursuant to the discretionary authority granted by the proxy. As of the date of the printing of this Proxy Statement, our management is not aware, nor has it been notified,notified, of any other matters that may be presented for consideration at the meeting.
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May I change my vote?
You may revoke your proxy at any time before its exercise by writing to our Corporate Secretary at our principal executive officesoffices as follows:
Corporate Secretary
You may also revoke your proxy by timely delivery of a properly executed, later-dated proxy (including a telephone or Internet vote) or by voting in person atvia the Internet while virtually attending the Annual Meeting.
If a shareholder would like us to consider including a proposal in our Proxy Statement and form of proxy for our Annual Meeting in 2018,2021, the Company’s Corporate Secretary must receive it no later than December 5, 2017.8, 2020. Proposals must be addressed to our Corporate Secretary at Gap Inc., Two Folsom Street, San Francisco, California 94105.
Our Amended and Restated Bylaws provide that in order for a shareholder to bring business before our Annual Meeting in 20182021 (other than a proposal submitted for inclusion in the Company’s proxy materials), the shareholder must give written notice to our Corporate Secretary by no later than the close of business (San Francisco Time) on February 16, 2018,18, 2021, and no earlier than January 17, 201819, 2021 (i.e., not less than 90 days nor more than 120 days prior to the firstfirst anniversary of the date of our 20172020 Annual Meeting). The notice must contain information required by our Bylaws, including a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the Annual Meeting, the name and address of the shareholder proposing the business, the number of shares of the Company’s stock beneficiallybeneficially owned by the shareholder, any material interest of the shareholder in the business proposed, any interests held by the shareholder in derivative securities of the Company or arrangements with persons holding derivative securities of the Company, and other information required to be provided by the shareholder pursuant to the proxy rules of the SEC. If a shareholder fails to submit the notice by February 16, 2018,18, 2021, then the proposed business would not be considered at our Annual Meeting in 20182021 due to the shareholder’s failure to comply with our Bylaws. Additionally, in accordance with Rule 14a-4(c)14a-4 (c)(1) of the Securities Exchange Act of 1934, as amended, management proxyholders intend to use their discretionary voting authority with respect to any shareholder proposal raised at our Annual Meeting in 20182021 as to which the proponent fails to notify us on or before February 16, 2018. Notifications18, 2021. Notifications must be addressed to our Corporate Secretary at Gap Inc., Two Folsom Street, San Francisco, California 94105. A copy of the full text of the Bylaw provisions relating to our advance notice procedure may be obtained by writing to our
Corporate Secretary at that address or at www.gapinc.com (follow the Investors, Governance links).
By Order of the Board of Directors,
Julie Gruber
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APPENDIX A
THE GAP, INC. EMPLOYEE STOCK PURCHASE PLAN(As Amended and Restated Effective as of May 17, 2017)
1. Purpose of the Plan
The Company originally established The Gap, Inc. Employee Stock Purchase Plan, effective as of December 1, 1994, in order to provide eligible employees ofIn this proxy statement, the Company and its participating Subsidiaries with the opportunity to purchase Common Stock through payroll deductions. The Plan was amended and restated effective as of May 17, 2017, subject to shareholder approval at the Company’s 2017 Annual Meeting of Shareholders. The Plan is intended to qualify as an employee stock purchase plan under Section 423(b) of the Code.
2. Definitions
2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a specific Section of the 1934 Act shall include such Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.
2.2 “Board” means the Board of Directors of the Company.
2.3 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific Section of the Code shall include such Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.
2.4 “Common Stock” means the common stock of the Company.
2.5 “Company” means The Gap, Inc., a Delaware corporation.
2.6 “Compensation” means a Participant’s gross salary, wages and overtime pay, but shall not include bonuses or commissions.
2.7 “Eligible Employee” means every Employee of an Employer, except any Employee who, immediately after the grant of a purchase right under the Plan, would own stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary of the Company (including stock attributed to such Employee pursuant to Section 424(d) of the Code).
2.8 “Employee” means an individual who is a common-law employee of any Employer. Notwithstanding the preceding sentence, the term “Employee” shall not include any Non-Employee, regardless of any subsequent reclassification of any such Non-Employee as an employee of an Employer by any government agency, court, or other third party,has disclosed information which shall not have a retroactive effect for purposes of the Plan, except to the extent required in order to maintain the qualified status of the Plan under Section 423 of the Code.
2.9 “Employer” or “Employers” means any one or all of the Company and those Subsidiaries which, with the consent of the Board, have adopted the Plan.
2.10 “Enrollment Date” means each March 1, June 1, September 1, and December 1, and such other dates determined by the Plan Administrator (in its discretion) from time to time.
2.11 “Non-Employee” means an individual who is classified by any Employer (a) as a “seasonal employee” (i.e., an employee whose customary employment is for not more than five months in any calendar year) or (b) as an independent contractor or any other non-employee classification that does not receive any compensation through the payroll of Gap, Inc. or any Subsidiary.
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2.12 “Participant” means an Eligible Employee who (a) has become a Participant in the Plan pursuant to Section 4.1 and (b) has not ceased to be a Participant pursuant to Section 7 or Section 8.
2.13 “Payroll Deduction Account” means an account maintained by the Plan Administrator for each Participant to which shall be credited all payroll deductions and from which shall be deducted amounts charged for the purchase of shares of Common Stock hereunder and withdrawals.
2.14 “Plan” means The Gap, Inc. Employee Stock Purchase Plan, as amended and restated as set forth in this instrument and as hereafter amended from time to time.
2.15 “Plan Administrator” means the Company.
2.16 “Purchase Date” means the last business day of May, August, November and February, or such other specific business days as may be established by the Plan Administrator from time to time, on which shares shall be purchased for Participants hereunder.
2.17 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting purchase rights under the Plan, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
3. Shares Subject to the Plan
3.1 Number Available. 40,500,000 shares of Common Stock are available for issuance pursuant to the Plan. Shares sold under the Plan may be newly issued shares or treasury shares.
3.2 Adjustments. If any change is made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Company’s receipt of consideration, or should the value of the outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any merger, consolidation or other reorganization, then equitable adjustments shall be made by the Board to (i) the maximum number and class of securities issuable under the Plan, (ii) the maximum number and class of securities purchasable per Participant on any one Purchase Date or in any calendar year, and (iii) the number and class of securities and the price per share in effect under each outstanding purchase right. The adjustments shall be made in such manner as the Board deems appropriate and such adjustments shall be final, binding and conclusive.
4. Enrollment
4.1 Participation. Each Eligible Employee may elect to become a Participant by enrolling in the Plan as of any Enrollment Date. Each such election shall be made at such time, and in such manner, as the Plan Administrator shall determine from time to time. A Participant who enrolls as of an Enrollment Date shall be automatically re-enrolled in the Plan on each subsequent Enrollment Date until the Participant withdraws pursuant to Section 7 or otherwise ceases to be a Participant pursuant to Section 8.
4.2 Payroll Withholding. Each Participant must elect to make Plan contributions via payroll withholding from his or her Compensation at a rate equal to any whole percentage from 1% to 15%, or such lesser percentage that the Plan Administrator may establish from time to time. A Participant may elect to increase or decrease his or her rate of payroll withholding (effective as of any Enrollment Date), or may stop his or her payroll withholding entirely. Each election under this Section shall be made at such time, and in such manner, as the Plan Administrator shall determine from time to time. Any Participant who is automatically re-enrolled in the Plan will be deemed to have elected to continue his or her contributions at the percentage last elected by the Participant.
5. Right to Purchase Shares of Common Stock
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5.1 Purchase Right. Each Participant enrolling or re-enrolling in the Plan on an Enrollment Date shall have the right to purchase shares of Common Stock on the next following Purchase Date.
5.2 Number of Shares Available for Purchase. Each Participant shall have the right to purchase as many full and fractional shares of Common Stock as may be purchased with the amounts credited to his or her Payroll Deduction Account as of the applicable Purchase Date. Notwithstanding the preceding, no Participant shall have the right to purchase shares under the Plan, or under any other similar employee stock purchase plan of the Employers, having a fair market value in excess of $25,000 (with fair market value to be measured at the applicable Enrollment Dates of such shares) in any calendar year during which such Participant is enrolled in the Plan at any time. Furthermore, in no event shall a Participant have the right to purchase in excess of 6,250 shares of Common Stock on any Purchase Date or in excess of 25,000 shares of Common Stock in any calendar year.
5.3 Other Terms and Conditions. Each purchase right shall be subject to the following additional terms and conditions:
(a) payment for shares purchased shall be made only through payroll withholding under Section 4.2;
(b) purchase of shares will be accomplished only in accordance with Section 6.1;
(c) the price per share to be purchased will be determined as provided in Section 6.1; and
(d) the purchase right in all respects shall be subject to such other terms and conditions (applied on a uniform and nondiscriminatory basis) as the Plan Administrator shall determine from time to time in its discretion.
6. Purchase of Shares
6.1 Purchases. On each Purchase Date, the funds then credited to each Participant’s Payroll Deduction Account shall be used to purchase whole shares of Common Stock, or fractional shares of Common Stock at the Plan Administrator’s discretion. To the extent that fractional shares are not purchased, any cash remaining after whole shares of Common Stock have been purchased shall be carried forward in the Participant’s Payroll Deduction Account for the purchase of shares on the next Purchase Date. However, any funds remaining in a Participant’s Payroll Deduction Account after whole shares of Common Stock have been purchased by reason of the limitation on the maximum number of shares purchasable per Participant on the Purchase Date or in any calendar year shall be refunded to the Participant (without interest) as soon as administratively practicable following the applicable Purchase Date. The price of the shares purchased under the Plan shall be 85% of the closing price of Common Stock on the applicable Purchase Date on the New York Stock Exchange Composite Transactions Index.
6.2 Crediting of Shares. Shares purchased on any Purchase Date shall be delivered to a broker designated by the Plan Administrator to hold shares for the benefit of the Participants. As determined by the Plan Administrator from time to time, such shares shall be delivered as physical certificates or by means of a book entry system. Although the Participant may direct the broker to sell such shares at any time (subject to applicable securities laws), the shares may not be transferred to another broker (other than the one designated from time to time by the Plan Administrator) or to any other person (including the Participant) until 24 months after the Enrollment Date immediately preceding the Purchase Date of the shares.
6.3 Exhaustion of Shares. If at any time the shares available under the Plan are over-enrolled, enrollments shall be reduced proportionately to eliminate the over-enrollment. Any funds that cannot be applied to the purchase of shares due to over-enrollment shall be refunded to the Participants (without interest).
7. Withdrawal
A Participant may withdraw from the Plan at any time, by notifying the Plan Administrator in accordance with such procedures and within such time periods as the Plan Administrator shall determine.
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Upon a Participant’s withdrawal, the Participant’s payroll contributions shall cease. All amounts then credited to the Participant’s Payroll Deduction Account shall be used to purchase shares in accordance with Section 6.1 at the next following Purchase Date or, at the election of the Participant and only in accordance with such procedures and within such time periods as the Plan Administrator shall determine, be distributed to him or her (without interest) as soon as administratively feasible thereafter.
8. Cessation of Participation
A Participant shall cease to be a Participant immediately upon the proper good faith notification to the Plan Administrator of the cessation of his or her status as an Eligible Employee (for example, because of his or her termination of employment from all Employers for any reason). As soon as practicable after such cessation, the Participant’s payroll contributions shall cease and all amounts then credited to the Participant’s Payroll Deduction Account shall be distributed to him or her (without interest).
9. Administration
9.1 Plan Administrator. The Plan Administrator shall have the authority to control and manage the operation and administration of the Plan.
9.2 Powers of Plan Administrator. The Plan Administrator shall have all powers and discretion necessary or appropriate to supervise the administration of the Plan and to control its operation in accordance with its terms, including, but not by way of limitation, the following discretionary powers:
(a) To interpret and determine the meaning and validity of the provisions of the Plan and to determine any question arising under, or in connection with, the administration, operation or validity of the Plan;
(b) To determine any and all considerations affecting the eligibility of any employee to become a Participant or to remain a Participant in the Plan;
(c) To cause an account or accounts to be maintained for each Participant;
(d) To determine the time or times when, and the number of shares for which, purchase rights shall be granted;
(e) To establish and revise an accounting method or formula for the Plan;
(f) To designate a broker to receive shares purchased under the Plan and to determine the manner and form in which shares are to be delivered to the designated broker;
(g) To determine the status and rights of Participants;
(h) To employ such brokers, counsel, agents and advisers, and to obtain such broker, legal, clerical and other services, as it may deem necessary or appropriate in carrying out the provisions of the Plan;
(i) To establish, from time to time, rules for the administration of the Plan;
(j) To adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by employees who are foreign nationals or employed outside of the United States;
(k) To delegate to any person the authority to perform for and on behalf of the Plan Administrator one or more of the functions of the Plan Administrator under the Plan; and
(l) To authorize one or more offerings under the Plan that are not designed to comply with the requirements of Code Section 423, but with the requirements of the foreign jurisdictions in which those offerings are conducted. Any such offerings shall be separate from any offerings designed to comply with the Code Section 423 requirements, but may be conducted concurrently with those offerings.
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9.3 Decisions of Plan Administrator. All actions, interpretations, and decisions of the Plan Administrator shall be conclusive and binding on all persons, and shall be given the maximum possible deference allowed by law.
9.4 Administrative Expenses. All expenses incurred in the administration of the Plan by the Plan Administrator, or otherwise, including legal fees and expenses, shall be paid and borne by the Employers; except that any stamp duties or transfer taxes applicable to a Participant’s purchase of shares may be charged to the Participant’s Payroll Deduction Account. Any brokerage fees for the purchase of shares by a Participant shall be paid by the Company, but brokerage fees for the resale of shares by a Participant shall be borne by the Participant.
10. Amendment, Termination and Duration
10.1 Amendment, Suspension, or Termination. The Board, in its sole discretion, may amend or terminate the Plan, or any part thereof, at any time and for any reason, by action of the Board, the Compensation and Management Development Committee of the Board, or a duly authorized officer of the Company.
If the Plan is terminated, the Board, in its discretion, may elect to terminate all outstanding purchase rights either immediately or upon completion of the purchase of shares on the next Purchase Date. If the purchase rights are terminated before the applicable Purchase Date, all amounts then credited to Participants’ Payroll Deduction Accounts which have not been used to purchase shares shall be returned to the Participants (without interest) as soon as administratively practicable.
10.2 Duration of the Plan. Subject to Section 10.1 (regarding the Board’s right to amend or terminate the Plan), the Plan shall remain in effect indefinitely.
11. General Provisions
11.1 Participation by Subsidiaries. One or more Subsidiaries of the Company may become Employers by adopting the Plan and obtaining approval for such adoption from the Board. By adopting the Plan, a Subsidiary shall be deemed to agree to all of its terms, including (but not limited to) the provisions granting exclusive authority (a) to the Board to amend the Plan, and (b) to the Plan Administrator to administer and interpret the Plan. Any Employer may terminate its participation in the Plan at any time. The liabilities incurred under the Plan to the Participants employed by each Employer shall be solely the liabilities of that Employer, and no other Employer shall be liable for benefits accrued by a Participant during any period when he or she was not employed by such Employer.
11.2 Inalienability. In no event may either a Participant, a former Participant or his or her beneficiary, spouse or estate sell, transfer, anticipate, assign, hypothecate, or otherwise dispose of any right or interest under the Plan; and such rights and interests shall not at any time be subject to the claims of creditors nor be liable to attachment, execution or other legal process. Accordingly, for example, a Participant’s interest in the Plan is not transferable pursuant to a domestic relations order. The preceding shall not affect the Participant’s right to direct the sale or transfer of shares that have been delivered to the broker designated by the Plan Administrator under Section 6.2 (subject to the provisions of the Plan).
11.3 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
11.4 Requirements of Law. The granting of purchase rights and the issuance of shares shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or securities exchanges as the Plan Administrator may determine are necessary or appropriate.
11.5 No Enlargement of Employment Rights. Neither the establishment or maintenance of the Plan, the granting of purchase rights, the purchase of shares, nor any action of any Employer or the Plan Administrator, shall be held or construed to confer upon any individual any right to be continued as an
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employee of the Employer nor, upon dismissal, any right or interest in any specific assets of the Employers other than as provided in the Plan. Each Employer expressly reserves the right to discharge any employee at any time, with or without cause.
11.6 Apportionment of Cost and Duties. All acts required of the Employers under the Plan may be performed by the Company for itself and its Subsidiaries, and the costs of the Plan may be equitably apportioned by the Plan Administrator among the Company and the other Employers. Whenever an Employer is permitted or required under the terms of the Plan to do or perform any act, matter or thing, it shall be done and performed by any officer or employee of the Employers who is thereunto duly authorized by the Employers.
11.7 Construction and Applicable Law. The Plan is intended to qualify as an “employee stock purchase plan”considered forward-looking within the meaning of Section 423the U.S. federal securities laws. Forward-looking statements may appear throughout this proxy statement, including in the Compensation Discussion and Analysis. In some cases, you can identify these forward-looking statements by the use of terms such as "believe," "will," "expect," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "would," and "continue to," or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to statements regarding our response to the COVID-19 pandemic, the potential impact of the Code. Any provisionCOVID-19 pandemic, our current business initiatives and strategy, and our longer-term objectives. For information regarding risks and uncertainties associated with our business and a discussion of some of the Plan which is inconsistent with Section 423factors that may cause actual results to differ materially from the results expressed or implied by such forward-looking statements, please refer to our SEC filings, including the "Risk Factors," and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" sections of our Annual Report on Form 10-K for the Code shall without further act or amendment by thefiscal year ended February 1, 2020. The Company or the Board be reformedundertakes no obligation to comply with the requirements of Section 423. The provisions of the Plan shall be construed, administered and enforcedupdate information in accordance with such Section and with the laws of the State of California (excluding California’s conflict of laws provisions).
11.8 Captions. The captions contained in the Plan are inserted only as a matter of convenience, and in no way define, limit, enlarge or describe the scope or intent of the Plan nor in any way shall affect the construction of any provision of the Plan.
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GAP INC. ATTN: MARIE MA TWO FOLSOM STREET SAN FRANCISCO, CA 94105 |
Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day 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/GAP2020 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed |
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 | |
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 | |
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. | |
VOTE BY INTERNET -www.proxyvote.comUse 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.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf 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 - 1-800-690-6903Use 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 MAILMark, 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: | ||
| D05205-P33539 | KEEP THIS PORTION FOR YOUR RECORDS | |
| DETACH AND RETURN THIS PORTION ONLY | ||
GAP INC.
| THE GAP, INC. | ||||||||||||||||||||||||
| The Board of Directors recommends you vote "FOR" Item 1. | ||||||||||||||||||||||||
| 1. Election of Directors | For | Against | Abstain | |||||||||||||||||||||
| Nominees: | ||||||||||||||||||||||||
| 1a. Amy Bohutinsky | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1b. John J. Fisher | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1c. Robert J. Fisher | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1l. Elizabeth A. Smith | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1d. William S. Fisher | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1m. Sonia Syngal | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1e. Tracy Gardner | ☐ | ☐ | ☐ | |||||||||||||||||||||
| The Board of Directors recommends you vote "FOR" Items 2 and 3. | For | Against | Abstain | |||||||||||||||||||||
| 1f. Isabella D. Goren | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 2. Ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending on January 30, 2021. | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1g. Bob L. Martin | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1h. Amy Miles | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1i. Jorge P. Montoya | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 3. Approval, on an advisory basis, of the overall compensation of the named executive officers. | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1j. Chris O'Neill | ☐ | ☐ | ||||||||||||||||||||||
| 1k. Mayo A. Shattuck III | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 4. Transact such other business as may properly come before the meeting. | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1l. Elizabeth A. Smith | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 1m. Sonia Syngal | ☐ | ☐ | ☐ | |||||||||||||||||||||
| 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. | ||||||||||||||||||||||||
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| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | ||||||||||||||
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| D05205-P33539 |
THE GAP, INC. Annual Meeting of Shareholders May 19, 2020 10:00 a.m. This proxy is solicited by the Board of Directors |
The undersigned hereby appoint(s) Sonia Syngal, Julie Gruber and Katrina O'Connell, or any of them, each with full power of substitution, as proxies to vote, in accordance with the instructions, as designated on the reverse side of this proxy, all of the shares of common stock of THE GAP, INC. that the undersigned is/are entitled to vote at the Annual Meeting of Shareholders to be held at 10:00 a.m. San Francisco Time on May 19, 2020, virtually at www.virtualshareholdermeeting.com/GAP2020, and any adjournment or postponement thereof. The proxies are authorized in their discretion to vote upon such other business as may properly come before the meeting. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. |
| Continued and to be signed on reverse side |
GAP INC.Annual Meeting of ShareholdersMay 17, 2017 10:00 AMThis proxy is solicited by the Board of Directors
The undersigned hereby appoint(s) Arthur Peck, Julie Gruber and Teri List-Stoll, or any of them, each with full power of substitution, as proxies to vote, in accordance with the instructions, as designated on the reverse side of this proxy, all of the shares of common stock of GAP, INC. that the undersigned is/are entitled to vote at the Annual Meeting of Shareholders to be held at 10:00 AM local time on May 17, 2017 at GAP, INC. Headquarters, Two Folsom Street, San Francisco, CA 94105, and any adjournment or postponement thereof. The proxies are authorized in their discretion to vote upon such other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations.
Continued and to be signed on reverse side