Compensation Discussion and Analysis Listed below are several terms that we frequently use in discussing our executive compensation program: Frequently Used Terms | | | AIP | | Annual Incentive Plan | Committee (or Compensation Committee) | | Compensation Committee of the Board of Directors | EPS XA | | Diluted earnings per share from continuing operations, excluding actions and the tax effect on actions and excluding certain unusual or nonrecurring items and as adjusted to exclude the impact of businesses held for sale | LTIP | | Long-Term Incentive Program | Net organic sales | | Net sales excluding those derived from businesses acquired within the previous 12 months of a reporting date and as adjusted for businesses held for sale | Operating Income XA | | Operating income, excluding certain unusual or nonrecurring items and as adjusted to exclude the impact of businesses held for sale | PSA | | Performance Share Award | RSU | | Restricted Stock Unit | SERP | | Supplemental Employee Retirement Plan |
Compensation Highlights Business Strategies and Priorities
Hanesbrands makes everyday apparel that is known and loved by consumers around the world for comfort, style, quality, innovation and value. Among the Company’s iconic brands are Hanes, the leading basic apparel brand in the United States; Champion, an innovator at the intersection of lifestyle and athletic apparel; and Bonds, which is setting new standards for design and sustainability. We employ over 59,000 associates in 33 countries and have built a strong reputation for workplace quality and ethical business practices. The Company, a long-time leader in sustainability, launched aggressive 2025/2030 goals to improve the lives of people, protect the planet and produce sustainable products. Hanesbrands is building on its unmatched strengths to unlock its Full Potential and deliver long-term growth that benefits all of its stakeholders. In 2021, we announced our Full Potential plan – a socially responsible leading marketerthree-year growth plan designed to unlock the enormous opportunities of everyday basicHanesbrands, building on our iconic brands, world-class supply chain, deep consumer loyalty, broad channel distribution and global footprint. The Full Potential plan consists of four growth pillars: grow global Champion; re-ignite innerwear growth; drive consumer-centricity; and activewear apparel infocus the Americas, Europe, Australia and Asia/Pacific under some of the world’s strongest apparel brands, includingHanes, Champion, Bonds, Maidenform, DIM, Bali, Playtex, Bras N Things, Nur Die/Nur Der, Alternative, L’eggs, JMS/Just My Size, Lovable, Wonderbra, BerleiandGear for Sports.portfolio. We have already made significant strides towards achieving these goals, as evidenced by the decision to sell our European Innerwear and U.S. Sheer Hosiery businesses; improvements in core e-commerce capabilities; a long history30% reduction in SKUs; and our broad-based cost reduction program. We are also embarking on a number of initiatives designed to: enhance our global design and innovation product excellencecapabilities to meet the needs of both current and brand recognition,new consumer segments; segment our supply chain to address the unique needs of each of our brands and we take great prideincrease speed-to-market; simplify our process and organization to make decisions faster; and modernize our technology and invest in our reputation for ethical business practicespeople and the success of our Hanes for Good corporate responsibility program for communitynext-generation talent to accelerate results and environmental improvement.deliver sustainable, profitable growth. We operate in the global innerwear and global activewear apparel categories. These are stable, heavily branded categories where we have a strong consumer franchise based on a global portfolio of industry-leading brands that we have built over multiple decades, through hundreds of millions of direct interactions with consumers. Since our 2006 spinoff, we have refined and strengthened our business model by implementing various strategies based on our underlying operating philosophy of Sell More, Spend Less and Generate Cash. These strategies include: recapitalizing our supply chain; integrating our operations; reinvesting in our brands; leading the introduction of meaningful innovation to our categories; broadening our distribution to include all channels of trade; divesting out of commodity products; and expanding both our international presence and our portfolio of leading brands through strategic acquisitions.
Over this time we have used strategic acquisitions to create a more diversified business with multiple paths to deliver consistent organic revenue growth, and we have continued to leverage our company-owned supply chain, our operational discipline and our global scale to generate higher levels of profitability and greater cash flow. Since 2007, we have increased revenue by over $2.5 billion, improved adjusted operating margin by approximately 450 basis points and generated over $3.9 billion of free cash flow.2Since 2007, we have also returned $2.15 billion to stockholders through dividends and share repurchases.
In 2019, consistent with our strategy, we plan to continue to drive organic growth. With the strong cash flow generation of our business, we are focused on maximizing long-term stockholder returns by applying a disciplined, return-centric approach to capital allocation. Short term, this includes debt prepayment, reinvesting in our business and supporting our dividend. Longer term, and when we are within our targeted leverage range of two to three times net debt to adjusted EBITDA, we plan to again incorporate share repurchases and strategic acquisitions.
We believe our formula of strong brands, stable categories, scale leverage and disciplined capital allocation positions us to deliver strong returns for the next decade.
2018Fiscal 2021 Performance Highlights
During 2018, we continued to deliver on our key strategic priorities in a challenging and highly competitive global environment. Key financial and strategic highlights included:(2)
| ● | NetWe exited 2021 with a stronger business and financial foundation, as well as a more attractive long-term growth profile relative to our pre-pandemic position. Hanesbrands delivered meaningful growth above pre-pandemic levels with full-year 2021 net sales growth of five percent,13% above 2019, adjusted operating profit 14% higher than 2019 and adjusted earnings per share 26% above 2019. The balance sheet also strengthened with organic sales growth of more than two percent - our first full year of organic sales growth since 2014;leverage declining to 2.7 times on a net debt-to-adjusted EBITDA basis. | ● | Operating cash flow of $643 million, which allowed us to significantly reduce our leverage; | ● | GlobalWe raised our 2024 Full Potential financial targets as a result of increased consumer demand for our brands globally, the traction of our Full Potential growth strategy and the proven ability of our global team to execute and consistently deliver results, particularly in one of the most challenging macro environments in decades. The Company increased its 2024 revenue target to approximately $8 billion, which includes an increase in global Champion revenue growth (excluding the mass channel) of over 40%brand sales to approximately $3.2 billion; an increase in constant currency; and | ● | The acquisition of Bras N Things, a leading intimate apparel retailer and e-commerce business in Australia, New Zealand and South Africa. |
2 | Adjustedadjusted operating margin to approximately 14.4%; and an increase in cumulative three-year free cash flow areto approximately $1.6 billion. | | ● | We also increased capital returns to shareholders. In addition to our regular quarterly cash dividend, we announced a new a three-year $600 million share repurchase program. Based on our Full Potential plan targets, we expect to repurchase shares quarterly, beginning with the first quarter of 2022. |
(2) | For reconciliations of select GAAP and non-GAAP financial measures. For a reconciliation to GAAP operating margin and cash flow from operations,measures, see Appendix A. Unless otherwise noted, all 2019 comparisons are rebased to exclude the exited C9 Champion mass program and the DKNY intimate apparel license; see Appendix A. | | |
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| ● | Global Champion brand sales increased 25% and 20% compared to fourth-quarter and full-year 2019, respectively. The continued growth above pre-pandemic levels is driven by strong consumer demand across channels in the U.S., continued growth in Europe, the Americas and Australia as well as the ramp-up of partners in China. | | ● | U.S. Innerwear sales increased 19% and 21% compared to the fourth-quarter and full-year 2019, respectively. For the full-year 2021, Innerwear’s market share increased approximately 150 basis points over 2019 with increased share positions in Men’s, Women’s, Kids and Socks. | | ● | We continued the execution of our Full Potential growth plan, including investment in our iconic brands and the simplification of our business portfolio. As compared to 2019, global media and marketing investment increased nearly $30 million for the quarter and $70 million for the full-year, helping drive higher point-of-sale trends and increased market share. The Company made the decision to sell its European Innerwear and U.S. Sheer Hosiery businesses, milestones in our initiative to focus our portfolio on areas with the greatest potential for growth and returns. |
Executive Compensation Philosophy and Framework
At Hanesbrands, we emphasize a “pay-for-performance” culture, linking a substantial percentage of an executive’s compensation to our performance and stockholders’ value growth. Specifically: | ● | We provide annual incentives designed to reward our executive officers for the attainment of short-term goals, and long-term incentives designed to reward increasing stockholder value over the short, medium and long term. | | ● | Performance-based and at-risk compensation represents nearly 75%89% of our named executive officers’Chief Executive Officer’s total target direct compensation.compensation, reflecting the position’s highest level of accountability and responsibility for results. | | ● | Performance-based and at-risk compensation represents 74% of the average total target direct compensation for our other named executive officers, as further described in this Compensation Discussion and Analysis. | | ● | In keeping with our pay-for-performance philosophy,culture, we expect our executive officers to deliver overall results that exceed performance targets to receive above median market compensation. Below target performance is expected to result in below median market compensation. | | ● | Our compensation program is designed to reward exceptional and sustained performance. By combining a three-year vesting period for most equity awards with policies prohibiting hedging or pledging of suchour shares, a substantial portion of the value of our executives’ compensation package is tied to changes in our stock price, and therefore is at-risk, for a significant period of time. In addition, we have implemented a three-year performance period for all performance-based long term incentive awards, beginning in 2022. The Compensation Committee believes this design provides an effective way to link executive compensation to long-term stockholder returns. | | ● | EquityOutstanding equity awards granted after January 1, 2019 are subject to “double-trigger” accelerated vesting in connection with a change in control, under which the vesting of awards will accelerate only if there is a qualifying termination of employment within two years after the change in control or if the surviving entity does not provide qualifying replacement awards. | | ● | Our Clawback Policy permits us to recoup cash- and equity-based incentive compensation payments in the event we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. Additionally, the terms of both our cash- and equity-based incentive compensation plans permit the recovery of incentive awards if a participant violates our Global Code of Conduct or engages in other activities harmful to the interests of the Company. |
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Elements of 2018Fiscal 2021 Compensation
Our named executive officers’ total direct compensation for 2018fiscal 2021 consisted principally of the following elements: Compensation Element | | Key Features | | Objectives | Base Salary | | | ●Fixed compensation component ●Reflects the individual responsibilities, performance and experience of each named executive officer | | | ●Provides a foundation of cash compensation for the fulfillment of fundamental job responsibilities | | | Annual Incentive Plan (“AIP”) Awards | | ●Performance-based cash compensation ●Payout determined based on Company performance against pre-established metricstargets | | ●Motivates performance by linking compensation to the achievement of key annual objectives | | Long-Term |
Long-TermIncentive
IncentiveProgram
Program (“LTIP”) Awards | | ●Performance-based and at-risk, time-vested compensation ●Performance Share Awards (“PSAs”) (50% of LTIP opportunity) | | ●Vesting on the third anniversary of the grant date ●Number of shares received ranges from 0% to 200% of the number of units granted based on 2018 Company performance against pre-established metrics
●Restricted Stock Unit Awards (“RSUs”) (50% of LTIP opportunity)
●Ratable vesting over a three-year service period
| | ●Encourages behavior that enhances the long-term growth, profitability and financial success of the Company, aligns executives’ interests with our stockholders and supports retention objectives
| | | | | ●Vesting on the third anniversary of the grant date ●Number of shares received ranges from 0% to 200% of the number of units granted based on fiscal 2021 Company performance against pre-established targets | | | | ●Restricted Stock Unit Awards (“RSUs”) (50% of LTIP opportunity) | | | | | ●Ratable vesting over a three-year service period | | |
In addition to the above, we provide health, welfare and retirement plans that promote employee wellness and support employees in attaining financial security. We also provide severance benefits under limited circumstances. These severance benefits, which provide our named executive officers with income protection in the event employment is terminated without cause or terminated in certain situations following a change in control, support our executive retention goals and encourage our named executive officers’ independence and objectivity in considering potential change in control transactions. See “Post-Employment Compensation” on page 4249 for additional details.
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2018Fiscal 2021 Compensation Mix
The mix of compensation elements that we offer is intended to further our goals of: | ● | achieving key annual results and strategic long-term business objectives; | | ● | using an appropriate mix of cash and equity; | | ● | emphasizing a “pay-for-performance” culture; | | ● | effectively managing the cost of pay programs; and | | ● | providing a balanced total compensation program to help ensure senior management is not encouraged to take unnecessary and excessive risks that may harm the Company. |
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Our emphasis on performance-based and at-risk pay is reflected in the following chart, which illustrates the average 2018fiscal 2021 total target direct compensation mix for our Chief Executive Officer and the average fiscal 2021 target direct compensation mix for our other named executive officers (“NEOs”). 2018Fiscal 2021 Total Target Direct Compensation | | | | | Performance-Based and At-Risk Compensation: 89% | Performance-Based and At-Risk Compensation: 74% | Compensation: 87.8% | Compensation: 74.4% | | |
The percentage of our Chief Executive Officer’s performance-based and at-risk compensation is the highest of our named executive officers, reflecting the position’s highest level of responsibility and accountability for results. Performance-based and at-risk compensation comprises nearly 75%74% of all of our named executive officers’the average total target direct compensation.compensation of our other named executive officers. Because the value of such compensation depends on Hanesbrands’ achievement of key annual results and strategic long-term business objectives and/or is tied to changes in our stock price, the compensation actually received by our named executive officers’ actual compensationofficers could be materially higher or lower than targeted levels. The chart below sets forth the percentage of the CEO’s fiscal 2021 total direct compensation allocable to each compensation element (base salary, AIP, LTIP) assuming threshold, target, and maximum levels of performance with respect to his AIP and LTIP awards. CEO Potential Compensation Scenarios (Percentage of Total Compensation) | | | |
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2018Fiscal 2021 Performance Criteria Metrics
The CompensationCommittee decided to move away from a single set of performance metrics for the 2021 AIP and LTIP awards and instead establish a separate set of metrics for each program to support our growth pillars and better align the Company’s compensation programs with current market practice. In establishing the AIP performance targets for 2021, the Committee considered the continuing operating and economic uncertainty resulting from the COVID-19 pandemic and the resulting difficulty in forecasting operating plans for the full 2021 fiscal year and decided to again split the annual performance period into two six-month periods, first and second quarter 2021 performance (“First Half 2021”) and third and fourth quarter 2021 performance (“Second Half 2021”), with the achievement percentage for First Half 2021 and Second Half 2021 weighted equally in determining the overall achievement percentage for the performance period. The Committee chose to use net sales growth, organic sales, growth, diluted earnings per shareoperating income (excluding actions) and net inventory as the performance metrics for both First Half 2021 and Second Half 2021 because the Committee believes these metrics are aligned with areas of strategic focus, key drivers of long-term sustainable stockholder value creation and fundamental elements of consistent, stable growth. Due to the continuing economic and operational uncertainty resulting from continuing operations, excluding actions (“EPS-XA”) growth, andthe COVID-19 pandemic that make it difficult to forecast operating plans accurately over an extended period of time, the Committee decided to continue using a one-year performance period for the 2021 LTIP awards, combined with a three-year vesting period. However, the Company has since implemented a three-year performance period for all performance-based long term incentive awards, beginning in 2022. The Committee selected cash flow from operations and earnings per share (excluding actions) as the performance criteriametrics for the 2021 LTIP because the Committee believes these metrics have the ability to align the performance of our named executive officers’ 2018 performance-based pay opportunities,officers with stockholder value by incorporating aspects of growth, profitability and capital efficiency. In addition, the Committee believes strong cash flow from operations has the ability to enhance stockholder value in numerous ways, including strategic investment, dividends and stock repurchases. The metrics for 2021 performance compensation were as follows:
2018 Results
follows for the AIP and LTIP. The metrics for the AIP were the same for both the First Half and the Second Half.
(1)Annual Incentive Plan (AIP) Metrics | Organic sales are net sales excluding those derived from businesses acquired within the previous 12 months of a reporting date. For a reconciliation to GAAP net sales, see Appendix A. | | (2) | EPS-XA is a non-GAAP financial measure which is used as a performance measure in our executive compensation programs. EPS-XA is defined as diluted earnings per share from continuing operations (“EPS”), excluding actions and the tax effect on actions. We have chosen to provide this non-GAAP financial measure to investors to enable additional analyses of past, present and future performance and as a supplemental means of evaluating company operations absent the effect of tax reform, acquisition-related expenses and other actions. For a reconciliation to GAAP EPS, see Appendix A. | |
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(3) | U.S. tax reform, which resulted in a higher corporate tax rate beginning in 2018, affects the year-over-year comparisons for EPS-XA. Hanesbrands’ 2017 EPS-XA, normalized for a roughly 16% tax rate, would have been $1.68, or $0.25 lower than the reported $1.93. Because the exact impact of U.S. tax reform on the Company was unknown when the EPS-XA metric was established in December 2017, the Compensation Committee determined to measure 2018 EPS-XA growth for performance-based compensation purposes based on the tax-adjusted 2017 EPS-XA of $1.68. For a reconciliation to GAAP EPS, see Appendix A. |
As a result of our 2018 performance, each of our named executive officers earned, in the aggregate, 78.98% of the target amounts for their performance-based pay opportunities.
Long-Term Incentive Plan (LTIP) Metrics | | |
Fiscal 2021 Executive Compensation Best Practices in Executive Compensation
Hanesbrands’ executive compensation practices include a number of features we believe reflect responsible compensation and governance practices and promote the interests of stockholders. | | | | | | | | | | | | Our practices include: ●• Performance-based pay- ApproximatelyOn average, approximately half of our named executive officers’ total target direct compensation is performance-based and must be earned every year based on objective performance criteria and metrics.
●Challenging performance metrics - The Compensation Committee sets growth performance metrics that require consistent year over year improvement in performance rather than performance based on negotiated targets relative to the Company’s annual operating plan or public guidance.
●• Significant vesting periods- Equity awards made to our executive officers generally fully vest over a period of not less than three years, and in most cases no portion of the award may vest in less than 12 months.
●• Robust stock ownership guidelines- Our Chief Executive Officer’s stock ownership guideline is six times his base salary, and the ownership guideline for our other named executive officers (other than Mr. Lewis, who served as Chief Financial Officer in an interim capacity) is two or three times his or her base salary. Until the guideline is met, an executive is required to retain 50% of any shares received (on a net after-tax basis) under our stock-based compensation plans.
●• Clawback policy- We have adopted aOur clawback policy that allows us to recover cashcash- and equity-based incentive compensation in the event we are required to prepare an accounting restatement due to material noncompliance with any financial requirement under the securities laws. Additionally, the terms of our incentive compensation plans permit the recovery of both cash- and equity-based incentive awards if a participant violates our Global Code of Conduct or engages in other activities harmful to the interests of the Company.
●• Prohibition on hedging and pledging- Our insider trading policy prohibits all of our directors, officers and employees from pledging our securities or engaging in “short sales” or “sales against the box” or trading in puts, calls, warrants or other derivative instruments on our securities.
●• Engagement of an independent compensation consultant- Our Compensation Committee engages an independent compensation consultant, who provides no other services to us, to advise on executive and non-employee director compensation matters. The independent compensation consultant reports to the Compensation Committee, who has the exclusive authority to retain or terminate the consultant.
| | Our practices exclude: ●• Repricing or replacing of underwater stock options or stock appreciation rights without stockholder approval
●• Providing excessive perquisites to executives
●• Employment agreements for our named executive officers
●• Gross-up payments to cover personal income taxes (other than due on relocation reimbursements as provided under a broad-based program) or excise taxes that pertain to executive or severance benefits (other than pursuant to change in control agreements entered into prior to December 1, 2010)
●• Single-trigger change in control severance payments
●• Automatic accelerationvesting of equity vestingawards upon a change in control (for awards granted after January 1, 2019)
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Overview This Compensation Discussion and Analysis provides information about our compensation objectives and principles for our Chief Executive Officer, each individual who served as our Chief Financial Officer (including as Interim Chief Financial Officer) during fiscal 2021, and our fourthree other most highly compensated executive officers for 2018fiscal 2021 (collectively, our “named executive officers”), which includes one highly compensated executive officer voluntarily disclosed to aid in the comparability of information year over year.. Our named executive officers for our 20182021 fiscal year were: Gerald W. Evans, Jr. | Stephen B. Bratspies | Chief Executive Officer | Barry A. Hytinen | Michael P. Dastugue | Chief Financial Officer | M. Scott Lewis | Chief Accounting Officer and Former Interim Chief Financial Officer | Joseph W. Cavaliere | Group President, Global Innerwear | Jonathan Ram | | Group President, Global Activewear | W. Howard Upchurch | | Group President, Innerwear Americas | Joia M. Johnson | | Chief Administrative Officer, General Counsel and Corporate Secretary | Michael E. Faircloth | | Group President, Global Supply Chain, Information Technology and E-Commerce |
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Our Compensation Discussion and Analysis also contains details about how and why significant compensation decisions were made and places in context the information contained in the tables that follow this discussion. Listed below are several terms that we frequently use in discussing our executive compensation program:
Frequently Used Terms | | | | AIP | | Annual Incentive Plan | EPS-XA | | Diluted earnings per share from continuing operations, excluding actions | LTIP | | Long-Term Incentive Program | PSA | | Performance Share Award | RSU | | Restricted Stock Unit | SERP | | Supplemental Employee Retirement Plan |
How We Make Executive Compensation Decisions
The Compensation Committee, advised by its independent compensation consultant, is responsible for overseeing and approving the executive compensation program for the Company’s executive officers, including our named executive officers. Pursuant to its charter, the Compensation Committee may delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees. However, the Compensation Committee made no such delegation in 2018.fiscal 2021. Frederic W. Cook & Co., or “FW Cook,” serves as the Compensation Committee’s executive compensation consultant. FW Cook reports directly to the Compensation Committee, and the Committee has the sole authority to terminate or replace FW Cook at any time. FW Cook assists in the development of compensation programs for our executive officers and our non-employee directors by providing compensation information from our peer group companies (which are described in “How the Compensation Committee uses Peer Groups” on page 36)42), relevant market trend data, information on current issues in the regulatory and economic environment, recommendations for program design and best practices and corporate governance guidance. The Compensation Committee realizes that it is essential to receive objective advice from its compensation advisors. Prior to the retention of a compensation consultant or any other external advisor, and from time to time as the Compensation Committee deems appropriate, the Compensation Committee assesses the independence of the advisor from management, taking into consideration all factors relevant to the advisor’s independence, including the factors specified in NYSE listing standards. The Compensation Committee has assessed the independence of FW Cook based on these criteria and concluded that FW Cook’s work for the committeeCommittee does not raise any conflict of interest. At the direction of the Compensation Committee, our management has workedworks with FW Cook to prepare information about the compensation competitiveness of our executive officers. Our Chief Executive Officer uses this information to make recommendations to the Compensation Committee regarding compensation of these officers, other than himself, and FW Cook provides guidance to the Compensation Committee about those recommendations. FW Cook also makes independent recommendations to the Compensation Committee regarding the compensation of our Chief Executive Officer without the involvement of management. The Compensation Committee uses this information and considers these recommendations in making decisions about executive compensation for all of our executive officers. All decisions regarding compensation of executive officers (other than our Chief Executive Officer) are made solely by the Compensation Committee. The Chief Executive Officer’s compensation is approved by the independent members of the Board of Directors, after reviewing the Compensation Committee’s recommendation. The Compensation Committee does not generally make regular annual adjustments in pay. Instead, the Compensation Committee uses judgment when making compensation decisions and reviews executive pay from a holistic perspective, including reference to compensation peer group pay practices and norms, general industry pay levels as gathered from publicly-available survey sources, individual performance, experience, strategic importance of the position to Hanesbrands and internal equity considerations.HANESBRANDS INC. | 41
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In making compensation decisions, the Compensation Committee: | | | | | | | | | | | | Determines the competitive market for total target direct compensation for each named executive officer | | | | Evaluates the allocation among the various elements of compensation, including base salary, AIP and LTIP compensation | | | | Determines the appropriate balance of at-risk, time-based and performance-based equity compensation within each named executive officer’s LTIP opportunity | |
How the Compensation Committee uses Peer Groups
To determine what constitutes a “competitive” compensation package, the Compensation Committee generally considers total target direct compensation, as well as the allocation among the various elements of compensation, at our peer group companies. Because of significant differences in thecompanies, as well as general industry pay practices of our peer group companies, the Compensationlevels as gathered from publicly-available survey sources. The Committee does not view this market data as a prescriptive determinant of individual compensation. Rather, it is used by the Compensation Committee as a general guide in its decisions on the amount and mix of total target direct compensation. Ultimately, named executive officer compensation is based on the Compensation Committee’s judgment, taking into account factors described elsewhere in this Compensation Discussion and Analysis that are particular to Hanesbrands and our named executive officers, including, most importantly, actual performance. The CompensationThe Committee, with assistance from FW Cook, establishes the Company’s peer group that is used for market comparison purposes.purposes.
We seek to identify peer group companies:
| We seek to identify peer group companies: that have comparable business models and strategy; | | with whom we compete for talent, capital and customers; and | | that are of a similar size and complexity. |
In selecting new peer companies and evaluating the continued inclusion of current peers, the Compensation Committee also considers companies:
| | | | | | | | | | In selecting new peer companies and evaluating the continued inclusion of current peers, the Compensation Committee also considers companies: | In apparel and/or other general consumer product (non-durable goods) industries | | With multiple distribution channels, such as wholesale, retail and e-commerce | | Of a similar revenue size, market capitalization and margins | | That consider usto be a peer for compensation purposes, plus the peer companiesidentified by our apparel peer companies | | Used by us for financial comparison purposes | | Used in Proxyproxy advisory firm peer groups for purposes of the chief executive officer pay-for-performancepay-for- performance test |
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In light of these parameters, for fiscal 2021 the Compensation Committee decided to retainmodify the same peer group used for purposes of determining compensation forby replacing Hasbro, Inc. with Under Armour, Inc. In removing Hasbro, Inc., the prior year, as such companies continued to have goodCommittee noted its size, its performance in recent years and the fact that it is not a direct business competitor of the Company. The Committee decided that Under Armour Inc.’s industry and business characteristics provided better overall alignment with the Compensation Committee’s peer group selection criteria. TheThus, the peer group used by the Compensation Committee for purposes of determining 2018fiscal 2021 compensation consisted of the following 17 companies: | 2018Fiscal 2021 Peer Group
| | | | | | Apparel Companies | | Consumer Products Companies | | | American Eagle Outfitters, Inc. | | The Clorox Company | | | Carter’s, Inc. | | Fortune Brands Home & Security, Inc.
| The Hershey Company | | Foot Locker, Inc. | | Hasbro,Newell Brands Inc.
| | | Gildan Activewear, Inc. | | The Hershey Company
| | | L Brands, Inc. | | Mattel, Inc.
| | | PVH Corp. | | Newell Brands Inc.
| | | Ralph Lauren Corporation | | Stanley Black & Decker, Inc. | L Brands, Inc. | | | lululemon athletica inc. | | | Levi Strauss & Co. | | | PVH Corp. | | | Ralph Lauren Corporation | | | Tapestry, Inc. (previously known as Coach Inc.) | | | | | The Gap, Inc. | | | | Under Armour, Inc. | | | V.F. Corporation | | | |
Elements of 2018Fiscal 2021 Executive Compensation Total Target Direct Compensation Using the methodology discussed under “How We Make Executive Compensation Decisions” on page 41, the Committee determined the total target direct compensation levels of our named executive officers for fiscal 2021, as well as the relative mix of base salary, AIP opportunity and LTIP opportunity for those executives. Following a market review of pay practices at our peer group companies and considering changes to the scope of certain officers’ individual responsibilities, the Committee approved the following increases to the total target direct compensation levels for our named executive officers: | • | Mr. Bratspies’ total target direct compensation for fiscal 2021 was increased by approximately 3.2%. His base salary and target AIP opportunity remained unchanged ($1,100,000 and 150% of base salary (or $1,650,000), respectively), and his target LTIP opportunity was increased from $6,750,000 to $7,050,000. | | • | Mr. Lewis’ total target direct compensation for fiscal 2021 was increased by approximately 7.0%. His base salary and target AIP opportunity remained unchanged ($375,000 and 45% of base salary (or $168,750), respectively), and his target LTIP opportunity was increased from $175,000 to $225,000. In addition, the Committee determined that Mr. Lewis was eligible to receive a quarterly fee of $175,000, as well as a proportionate increase in his annual incentive opportunity, during the period in which he served as interim Chief Financial Officer (which remained unchanged from fiscal 2020). | | • | Mr. Ram’s total target direct compensation for fiscal 2021 was increased by approximately 24.9% due to substantial movement in the market value of equivalent positions at our peer companies. His base salary was increased from $575,000 to $650,000, his target AIP opportunity was maintained at 75% of base salary (but increased from $431,250 to $478,125 as a result of his base salary increase), and his target LTIP opportunity was increased from $1,114,000 to $1,520,000. | | • | Mr. Faircloth’s total target direct compensation for fiscal 2021 was increased by approximately 1.4%. His base salary was increased from $610,000 to $630,000, his target AIP opportunity was maintained at 75% of base salary (but increased from $457,500 to $470,000 as a result of his base salary increase), and his target LTIP opportunity remained unchanged ($1,282,000). |
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In connection with Mr. Cavaliere’s appointment as Group President, Global Innerwear effective February 8, 2021, the Committee approved the following compensation for Mr. Cavaliere: an annual base salary of $700,000, a target AIP opportunity equal to 100% of base salary (or $700,000), and a target LTIP opportunity of $1,520,000. In connection with Mr. Dastugue’s appointment as Chief Financial Officer effective May 1, 2021, the Committee approved the following compensation for Mr. Dastugue: an annual base salary of $750,000, a target AIP opportunity equal to 100% of base salary (or $750,000), and a target LTIP opportunity of $1,520,000. The following supplemental table shows base salary, AIP and LTIP compensation at the target level for each of our named executive officers for 2019, 20182022, 2021 and 20172020 as approved by our Compensation Committee. This table presents information that is supplemental to, and should not be considered a substitute for, the information contained in the Summary Compensation Table that appears under “Summary Compensation Table” on page 47.53 . This supplemental table is not required by SEC rules. However, we have chosenchose to include it to provide investors with information on the total target direct compensation levels of our named executive officers and the allocation among the various elements of compensation for the two most recent years reflected in our Summary Compensation Table and for the current year. No information is provided for Mr.Messrs. Dastugue, Cavaliere or Ram for 2017fiscal 2020 because heeach first became a named executive officer in fiscal 2021. For a discussion of 2022 compensation information reflected in the second quarter of 2018. In December 2017, using the methodology discussed under “How We Make Executivefollowing supplemental table, see “2022 Compensation Decisions” on page 35, the Compensation Committee determined the total target direct compensation levels of our named executive officers for 2018, as well as the relative mix of base salary, AIP opportunity and LTIP opportunity for those executives.51.
| | | | Annual Compensation at Target | | | Long-Term Compensation at Target | | | | | Name | | Year | | Base Salary/% of Value of Total Target Direct Compensation | | | Value at Target of AIP Compensation/% of Value of Total Target Direct Compensation | | | Value at Target of LTIP Compensation/% of Value of Total Target Direct Compensation | | | Value of Total Target Direct Compensation | | Stephen B. Bratspies(1) | | | 2022 | | $ | 1,250,000 | | | 11.4 | % | | $ | 2,000,000 | | | 18.2 | % | | $ | 7,750,000 | | | 70.5 | % | | $ | 11,000,000 | | | | | 2021 | | | 1,100,000 | | | 11.2 | | | | 1,650,000 | | | 16.8 | | | | 7,050,000 | | | 72.0 | | | | 9,800,000 | | | | | 2020 | | | 1,100,000 | | | 11.6 | | | | 1,650,000 | | | 17.4 | | | | 6,750,000 | | | 71.1 | | | | 9,500,000 | | Michael P. Dastugue(1) | | | 2022 | | | 750,000 | | | 21.4 | | | | 750,000 | | | 21.4 | | | | 2,000,000 | | | 57.1 | | | | 3,500,000 | | | | | 2021 | | | 750,000 | | | 24.8 | | | | 750,000 | | | 24.8 | | | | 1,520,000 | | | 50.3 | | | | 3,020,000 | | M. Scott Lewis(2) | | | 2022 | | | 386,000 | | | 43.6 | | | | 174,000 | | | 19.7 | | | | 325,000 | | | 36.7 | | | | 885,000 | | | | | 2021 | | | 375,000 | | | 48.8 | | | | 168,750 | | | 22.0 | | | | 225,000 | | | 29.2 | | | | 768,750 | | | | | 2020 | | | 375,000 | | | 52.2 | | | | 168,750 | | | 23.5 | | | | 175,000 | | | 24.3 | | | | 718,750 | | Joseph W. Cavaliere(1) | | | 2022 | | | 750,000 | | | 23.4 | | | | 750,000 | | | 23.4 | | | | 1,700,000 | | | 53.1 | | | | 3,200,000 | | | | | 2021 | | | 700,000 | | | 24.0 | | | | 700,000 | | | 24.0 | | | | 1,520,000 | | | 52.0 | | | | 2,920,000 | | Jonathan Ram | | | 2022 | | | 650,000 | | | 22.4 | | | | 488,000 | | | 16.8 | | | | 1,762,000 | | | 60.8 | | | | 2,900,000 | | | | | 2021 | | | 650,000 | | | 24.5 | | | | 478,125 | | | 18.3 | | | | 1,520,000 | | | 57.2 | | | | 2,648,125 | | Michael E. Faircloth | | | 2022 | | | 630,000 | | | 25.4 | | | | 473,000 | | | 19.0 | | | | 1,382,000 | | | 55.6 | | | | 2,485,000 | | | | | 2021 | | | 630,000 | | | 26.4 | | | | 470,000 | | | 19.8 | | | | 1,282,000 | | | 53.8 | | | | 2,382,000 | | | | | 2020 | | | 610,000 | | | 26.0 | | | | 457,500 | | | 19.5 | | | | 1,282,000 | | | 54.6 | | | | 2,349,500 | |
When setting Mr. Evans’ total target direct compensation level for 2018, the Compensation Committee considered the total compensation opportunity for chief executive officers at our peer group companies, as well as our operating performance and returns to stockholders. Based on those factors, the Compensation Committee increased Mr. Evans’ total target direct compensation for 2018 by approximately 6%. No changes were made to his base salary or target AIP opportunity, but his target LTIP opportunity was increased from $5,725,000 to $6,250,000.
Following a market review of pay practices at our peer group companies and considering changes to the scope of certain officers’ individual responsibilities, the Compensation Committee approved the following increases to the total target direct compensation levels for our other named executive officers:
●(1) | Mr. Upchurch’sThe total target direct compensation figures in the chart above Mr. Bratspies for 2018 was increased by approximately 5%. No changes2020, and Messrs Dastugue and Cavaliere for 2021, are based on annualized targets. The actual amounts were made to his base salary or target AIP opportunity, but his target LTIP opportunity was increased from $1,202,000 to $1,302,000.prorated for 2020 and 2021, respectively, based on date of hire. | ●(2) | Ms. Johnson’s total target directFor comparability purposes, the amounts set forth in the table above do not reflect Mr. Lewis’ additional compensation for 2018 was increased by approximately 5%. No changes were made to her base salary orserving as Interim Chief Financial Officer during 2020 and 2021 because we don’t view such additional amounts as a part of his normal target AIP opportunity, but her target LTIP opportunity was increased from $1,082,000 to $1,182,000. | ● | total direct compensation. For his service as Interim Chief Financial Officer in 2021, Mr. Faircloth’s total target direct compensation for 2018 was increased by approximately 7%. His base salary was increased from $540,000 to $560,000,Lewis earned an additional $350,000 in quarterly fees and his target AIP opportunity was proportionally increased from $405,000 to $420,000 and his target LTIP opportunity was increased from $1,105,000 to $1,205,000.$326,250. |
No changes were made to Mr. Hytinen’s total target direct compensation for 2018.44 |
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In May 2018, in connection with Mr. Ram’s appointment as Group President, Global Activewear, the Compensation Committee considered the total target direct compensation opportunity for similarly situated executives at our peer group companies, as well as Mr. Ram’s breadth of experienceMetrics and skills. Based on those factors, the Compensation Committee determined to set Mr. Ram’s base salary at $500,000, his target AIP opportunity at $375,000 and his target LTIP opportunity at $1,000,000. In addition, the Compensation Committee approved the payment to Mr. Ram of: (i) a transition equity award consisting of restricted stock units having an aggregate value as of the grant date of approximately $1,500,000, which will vest 33%, 33% and 34%, respectively, on the first, second and third anniversaries of the grant date; and (ii) a transition cash bonus of $250,000 that must be repaid in the event Mr. Ram voluntarily terminates his employment with Hanesbrands prior to the second anniversary of his employment start date.
Our Compensation Committee typically approves, at its December meeting, LTIP awards that are intended to serve as equity incentive compensation for the following fiscal year. On December 11, 2018, the Compensation Committee approved the 2019 LTIP awards. The PSAs and RSUs that comprise the 2019 LTIP awards were granted to the named executive officers on that date. The supplemental table below includes the target value of the 2019 LTIP awards in the row for fiscal year 2019, as this corresponds to the analysis undertaken by the Compensation Committee in determining total target direct compensation. Under SEC rules, however, we are required to include the grant date fair value of equity awards in the fiscal year in which the award is granted. Therefore, in the Summary Compensation Table on page 47, the grant date fair value for the 2019 LTIP awards is included in the stock awards column for fiscal year 2018.
For a discussion of 2019 compensation information reflected in the supplemental table below, see “2019 Compensation Decisions” on page 43.
| | | | Annual Compensation at Target | | Long-Term Compensation at Target | | | Name | | Year | | Base Salary/% of Value of Total Target Direct Compensation | | Value at Target of AIP Compensation/% of Value of Total Target Direct Compensation | | Value at Target of LTIP Compensation/% of Value of Total Target Direct Compensation | | Value of Total Target Direct Compensation | Gerald W. Evans, Jr. | | 2019 | | $ | 1,100,000 | | 12.2 | % | | $ | 1,650,000 | | 18.3 | % | | $ | 6,250,000 | | 69.4 | % | | $ | 9,000,000 | | | 2018 | | | 1,100,000 | | 12.2 | | | | 1,650,000 | | 18.3 | | | | 6,250,000 | | 69.4 | | | | 9,000,000 | | | 2017 | | | 1,100,000 | | 13.0 | | | | 1,650,000 | | 19.5 | | | | 5,725,000 | | 67.6 | | | | 8,475,000 | Barry A. Hytinen | | 2019 | | | 675,000 | | 24.6 | | | | 573,750 | | 20.9 | | | | 1,500,000 | | 54.6 | | | | 2,748,750 | | | 2018 | | | 600,000 | | 26.0 | | | | 510,000 | | 22.1 | | | | 1,200,000 | | 51.9 | | | | 2,310,000 | | | 2017 | | | 600,000 | | 26.0 | | | | 510,000 | | 22.1 | | | | 1,200,000 | | 51.9 | | | | 2,310,000 | Jonathan Ram | | 2019 | | | 525,000 | | 26.0 | | | | 393,750 | | 19.5 | | | | 1,100,000 | | 54.5 | | | | 2,018,750 | | | 2018 | | | 500,000 | | 26.7 | | | | 375,000 | | 20.0 | | | | 1,000,000 | | 53.3 | | | | 1,875,000 | | | 2017 | | | — | | — | | | | — | | — | | | | — | | — | | | | — | W. Howard Upchurch | | 2019 | | | 570,000 | | 24.8 | | | | 427,500 | | 18.6 | | | | 1,302,000 | | 56.6 | | | | 2,299,500 | | | 2018 | | | 570,000 | | 24.8 | | | | 427,500 | | 18.6 | | | | 1,302,000 | | 56.6 | | | | 2,299,500 | | | 2017 | | | 570,000 | | 25.9 | | | | 427,500 | | 19.4 | | | | 1,202,000 | | 54.6 | | | | 2,199,500 | Joia M. Johnson | | 2019 | | | 550,000 | | 25.0 | | | | 467,500 | | 21.3 | | | | 1,182,000 | | 53.7 | | | | 2,199,500 | | | 2018 | | | 550,000 | | 25.0 | | | | 467,500 | | 21.3 | | | | 1,182,000 | | 53.7 | | | | 2,199,500 | | | 2017 | | | 550,000 | | 26.2 | | | | 467,500 | | 22.3 | | | | 1,082,000 | | 51.5 | | | | 2,099,500 | Michael E. Faircloth | | 2019 | | | 560,000 | | 25.6 | | | | 420,000 | | 19.2 | | | | 1,205,000 | | 55.1 | | | | 2,185,000 | | | 2018 | | | 560,000 | | 25.6 | | | | 420,000 | | 19.2 | | | | 1,205,000 | | 55.1 | | | | 2,185,000 | | | 2017 | | | 540,000 | | 26.3 | | | | 405,000 | | 19.8 | | | | 1,105,000 | | 53.9 | | | | 2,050,000 |
Criteria and MetricsTargets for our Compensation Program
A significant portion of the compensation that our named executive officers may earn is subject to the achievement of Company-wide performance metrics. We believe that the performance of our named executive officers is best viewed through their contributions to long-term stockholder value as reflected by achievement of annual performance metrics that our Compensation Committee believes to be drivers of our strategic business plans and stockholder returns. We use quantifiable performance criteriametrics that are easily calculated and easily understood and that reinforce teamwork and internal alignment.
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For 2018,fiscal 2021, the elements of our executive compensation program subject to the achievement of performance metrics consisted of: ● | • | the AIP; and | ● | • | the PSA portion of LTIP compensation. |
Percentage Payout of Target Incentive Compensation | | | | |
ExecutiveGenerally, executive officers can earn incentive compensation equal to 10%25% of their targeted amount for performance at the threshold level, 100% of their targeted amount for performance at the target level and 200% of their targeted amount for performance at or above the maximum level. No incentive compensation is payable if performance is below the threshold level, and incentive compensation is capped at 200% of the target amount. Incentive compensation is payable on a straight line basis for performance between the threshold level and the target level, as well as between the target level and the maximum level.
In keeping with our pay for performance philosophy,culture, we expect our named executive officers to deliver overall results that exceed the target level of performance in order to receive above median market compensation. Performance below the target level of performance is expected to result in below median market compensation. |
CEO Potential Compensation Scenarios
(Comparison (Comparison to Peer Group) | | | | |
The amounts earned by our named executive officers under the performance-based elements of our compensation program are based solely on our performance against pre-established criteria and metrics. The Compensation Committee selects criteria and metrics that have generally remained constant from year to year and that it considers to be key performance drivers that are important to our stockholders and aligned with our long-term business strategy, supplementing those criteria and metrics from time to time as the Compensation Committee deems necessary.
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The Compensation Committee sets growth performance metrics that require consistent year over year improvement in performance rather than performance based on negotiated targets relative to the Company’s annual operating plan or public guidance. The Committee believes that this approach to establishing performance metrics has been a significant factor in Hanesbrands’ success over the past decade. De-linking performance metrics from public guidance reduces incentive-related risk by focusing our executives on long-term value creation rather than on short-term compensation maximization.
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The performance criteria and metrics approved by the Compensation Committee for 2018 were as follows:
2018 Performance Criteria and Metrics
Criteria | | Weighting | | Threshold | | Target | | Maximum | | FY2018 Results | Net Sales(growth compared to prior year) | | 10% | | 0% | | 3% | | 6% | | 5.1% | Organic Sales(growth compared to prior year)(1) | | 10% | | 0% | | 1% | | 2% | | 2.4% | EPS-XA, as adjusted(growth compared to prior year)(2)(3) | | 40% | | 0% | | 8% | | 16% | | 1.8% | Cash Flow from Operations | | 40% | | $500 million | | $700 million | | $900 million | | $643.4 million |
(1) | Organic sales are net sales excluding those derived from businesses acquired within the previous 12 months of a reporting date. For a reconciliation to GAAP net sales, see Appendix A. | (2) | EPS-XA is a non-GAAP financial measure which is used as a performance measure in our executive compensation programs. EPS-XA is defined as diluted earnings per share from continuing operations (“EPS”), excluding actions and the tax effect on actions. We have chosen to provide this non-GAAP financial measure to investors to enable additional analyses of past, present and future performance and as a supplemental means of evaluating company operations absent the effect of tax reform, acquisition-related expenses and other actions. For a reconciliation to GAAP EPS, see Appendix A. | (3) | U.S. tax reform, which resulted in a higher corporate tax rate beginning in 2018, affects the year-over-year comparisons for EPS-XA. Hanesbrands’ 2017 EPS-XA, normalized for a roughly 16% tax rate, would have been $1.68, or $0.25 lower than the reported $1.93. Because the exact impact of U.S. tax reform on the Company was unknown when the EPS-XA metric was established in December 2017, the Compensation Committee determined to measure 2018 EPS-XA growth for performance-based compensation purposes based on the tax-adjusted 2017 EPS-XA of $1.68. For a reconciliation to GAAP EPS, see Appendix A. |
As a result of our 2018 performance, each of our named executive officers earned, in the aggregate, 78.98% of the target amounts for their performance-based pay opportunities.
Base Salary
We pay base salary to attract talented executives and to provide a fixed base of cash compensation for fulfillmentfulfilment of fundamental job responsibilities. The base salaries for our named executive officers are determined based on their experience and the scope of their responsibilities, both on an individual basis and in relation to the experience and scope of responsibilities of other executives. The Compensation Committee also considers the practices of the companies in our peer group in setting our named executive officers’ base salary. These factors result in different compensation levels among the named executive officers. Base salaries are adjusted periodically (but generally not every year) as part of the Compensation Committee’s annual review of total target direct compensation to reflect individual responsibilities, performance and experience, as well as market compensation levels. Annual Incentive Plan (AIP)
The AIP is designed to motivate performance by linking a portion of our named executive officers’ compensation to the achievement of key annual results. As discussed in “Criteria and Metrics for our Compensation Program”“Fiscal 2021 Performance Metrics” on page 3839, the performance criteriametrics for the AIP for 2018fiscal 2021 were net sales growth, organic sales growth, EPS-XA growth(weighted at 40%), operating income-XA (weighted at 40%), and cash flow from operations. As a resultnet inventory (weighted at 20%). Consistent with the approach taken in 2020 after considering the impact of the COVID-19 pandemic on the Company’s operations, the Committee split the annual performance period into two six-month periods: (1) first and second quarter fiscal 2021 performance and (2) third and fourth quarter fiscal 2021 performance. On January 25, 2021, Committee established performance targets under the AIP for the first two quarters of 2021 (“First Half”). The targets for the First Half were set in consideration of our 2018operating plan and the expected economic environment in the upcoming year. The threshold, target, and maximum performance levels for each of our named executive officers earned AIP payments at 78.98% of their target amounts.metric, as well as the performance results for such metrics during the First Half are set forth below: First Half Targets – Weighted 50% Metric | | Weighting | | Threshold (25% Payout) | | Target (100% Payout) | | Maximum (200% Payout) | | First Half FY2021 Results | | Metric Achievement (% of Target) | | Weighted Metric Achievement (% of Target) | Net Organic Sales ($MM)* | | 40% | | $2,726 | | $2,870 | | $3,013 | | $3,234 | | 200% | | 80% | Operating Income-XA ($MM)* | | 40% | | $337 | | $375 | | $412 | | $447 | | 200% | | 80% | Net Inventory ($MM)* | | 20% | | $1,777 | | $1,677 | | $1,577 | | $1,490 | | 200% | | 40% | | | | | | | First Half - Total Weighted Achievement (% of Target) | | 200% |
40 * | Threshold, target, and maximum goals and achievement results for these metrics reflect adjustments to eliminate the impact of businesses held for sale during the fiscal year in accordance with the design approved by the Committee in January 2021. |
On May 17, 2021, the Committee established the following performance targets under the AIP for the second two quarters of 2021 (the “Second Half”). The Second Half targets were set in alignment with the updated operating plan and in consideration of the economic recovery shown during the First Half. The threshold, target, and maximum performance levels for each metric, as well as the performance results for such metrics during the Second Half are set forth below: Second Half Targets – Weighted 50% Metric | | Weighting | | Threshold (25% Payout) | | Target (100% Payout) | | Maximum (200% Payout) | | Second Half FY2021 Results | | Metric Achievement (% of Target) | | Weighted Metric Achievement (% of Target) | Net Organic Sales ($MM)* | | 40% | | $3,218 | | $3,387 | | $3,557 | | $3,511 | | 173% | | 69% | Operating Income XA ($MM)* | | 40% | | $420 | | $466 | | $513 | | $486 | | 143% | | 57% | Net Inventory ($MM)* | | 20% | | $1,454 | | $1,354 | | $1,254 | | $1,584 | | 0% | | 0% | | | | | | Second Half - Total Weighted Achievement (% of Target) | | 126% |
* | Threshold, target, and maximum goals and achievement results for these metrics reflect adjustments to eliminate the impact of businesses held for sale during the fiscal year in accordance with the design approved by the Committee in January 2021. |
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Based on the performance results for the First Half and the Second Half set forth above, the fiscal 2021 overall performance achievement as a percentage of target was 163.09%. The threshold, target, maximum and actual payout levels for each named executive officer under the AIP are set forth below: Name | | Threshold | | Target | | Maximum | | Actual | Stephen B. Bratspies | | $412,500 | | $1,650,000 | | $3,300,000 | | $2,691,130 | Michael P. Dastugue (1) | | $125,000 | | $500,000 | | $1,000,000 | | $815,494 | M. Scott Lewis (2) | | $81,563 | | $326,250 | | $652,500 | | $532,110 | Joseph W. Cavaliere (1) | | $155,930 | | $623,719 | | $1,247,438 | | $1,017,278 | Jonathan Ram | | $119,531 | | $478,125 | | $956,250 | | $779,816 | Michael E. Faircloth | | $117,500 | | $470,000 | | $940,000 | | $766,564 |
(1) | The amounts for Mr. Dastugue and Mr. Cavaliere are prorated based on their hire dates. | (2) | Mr. Lewis received additional cash compensation of $175,000 per quarter in connection with his service as Interim CFO, which amounts were included with base salary in calculating Mr. Lewis’ 2021 AIP payout opportunities. |
Long-Term Incentive Program (LTIP)
The Compensation Committee currently uses equity grants as the primary means of providing long-term incentives to our named executive officers. These LTIP awards are designed to encourage behaviors that drive the long-term growth, profitability and financial success of the Company, align executives’ interests with our stockholders and support retention objectives. As discussed in “Criteria and Metrics for our Compensation Program” on page 38, the performance criteria for the PSAs included in the LTIP awards for 2018 were net sales growth, organic sales growth, EPS-XA growth and cash flow from operations. For 2018,fiscal 2021, two types of LTIP grants were awarded to our named executive officers: ● | PSAs;• | Performance Share Awards (PSAs); and | ● | • | time-vested RSUs.Restricted Stock Unit Awards (RSUs). |
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For 2018,fiscal 2021, 50% of the targeted value of the LTIP opportunity consisted of PSAs and 50% of the targeted value consisted of RSUs.*The terms of these awards are described below:
* | The actual value realized by our named executive officers as result of their 2018 PSA and RSUfiscal 2021 LTIP grants will depend on our stock price on the respective vesting date of each award. |
The performance metrics for the PSA portion of the fiscal 2021 LTIP awards were cash flow from operations and EPS-XA. The threshold, target, and maximum performance levels for each metric, as well as the performance results for such metrics during the 2021 fiscal year are set forth below. The target for the cash flow from operations metric was established as a range in order to address uncertainty and volatility in the environment at the time the goal was established. Metric | | Weighting | | Threshold (25% Payout) | | Target (100% Payout) | | Maximum (200% Payout) | | FY2021 Results | | Metric Achievement (% of Target) | | Weighted Metric Achievement (% of Target) | Cash Flow from Operations ($MM) | | 50% | | $250 | | $400-450 | | $600 | | $623 | | 200% | | 100% | EPS-XA ($MM)* | | 50% | | $1.37 | | $1.52 | | $1.67 | | $1.84 | | 200% | | 100% | | | | | | Total Weighted Achievement (% of Target) | | 200% |
** | Awards grantedThreshold, target, and maximum goals and achievement results for this metric reflects adjustments to executives who retire prior toeliminate the vesting date and who are age 50 or older and have at least 10 yearsimpact of service will continue to vestbusinesses held for sale during the fiscal year in accordance with the vesting schedule, provideddesign approved by the executive enters into a written release of claims against the Company and complies with certain restrictive covenants.Committee in January 2021. |
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Our Compensation Committee typically approves, at its December meeting, LTIP awards that are intended to serve as equity incentive compensation for the following fiscal year. On December 12, 2017, the Compensation Committee approved the 2018 LTIP awards, and the PSAs and RSUs that comprise the 2018 LTIP awards were granted to the named executive officers on such date. Pursuant to SEC rules we are required to include the grant date fair value of equity awards in the fiscal year in which the award is granted. Therefore, in the Summary Compensation Table on page 47, the grant date fair value for the 2018 LTIP awards is included in the stock awards column for fiscal year 2017.
The Compensation Committee believes that setting performance criteria and metrics annually for performance-based equity awards, with a three-year vesting period, is the most effective approach for our LTIP. As a large multinational apparel company, Hanesbrands’ operating results can be significantly impacted by changing macroeconomic and regional economic factors. These economic factors, as well as the rapidly evolving retail industry, make it difficult to forecast operating plans accurately over an extended period of time. By combining a three-year vesting period for LTIP awards with policies prohibiting hedging or pledging of such shares, the value of our executives’ LTIP awards are tied to changes in our stock price, and therefore at-risk, for a significant period of time. The Compensation Committee believes this design provides an effective way to link executive compensation to long-term stockholder returns.
Post-Employment Compensation
Our named executive officers are eligible to receive post-employment compensation pursuant to the Hanesbrands Inc. Pension Plan (the “Pension Plan”) andand/or our defined contribution retirement program, which consists of the Hanesbrands Inc. Retirement Savings Plan (the “401(k) Plan”) and the Hanesbrands Inc. Supplemental Employee Retirement Plan (the “SERP”), and pursuant to Severance/Change in Control Agreements, or “Severance Agreements.Agreements,” or (in the case of Mr. Lewis) the Hanesbrands Inc. Salaried Employee Severance Pay Plan. Each of these arrangements is discussed below. Pension Plan
The Pension Plan is a defined benefit pension plan under which benefits have been frozen since December 31, 2005, intended(intended to be qualified under Section 401(a) of the Internal Revenue Code, thatCode) under which benefits have been frozen since December 31, 2005. The Pension Plan provides the benefits that had accrued for any of our U.S.-based employees including our named executive officers, as of December 31, 2005 under a plan maintained by our former parent company prior to our becoming an independent public company. Mr. Faircloth is the only named executive officer currently participating in the Pension Plan. Because the Pension Plan is frozen, no additional employees became participants in the Pension Plan after December 31, 2005, and existing participants in the Pension Plan do not accrue any additional benefits after December 31, 2005. Defined Contribution Retirement Program Plans Our defined contribution retirement program for U.S.-based employees consists of the 401(k) Plan and the SERP. Under the 401(k) Plan, our named executive officers and generally all full-time domestic exempt and non-exempt U.S.-based salaried employees may contribute a portion of their compensation to the plan on a pre-tax basis and receive a matching employer contribution of up to a possible maximum of 4% of their eligible compensation not in excess of certain dollar limits mandated by the Internal Revenue Code. In addition, we may make a discretionary employer contribution to exempt and non-exempt salaried employees of up to an additional 4% of their eligible compensation. The SERP is a nonqualified supplemental retirement plan that provides two types of benefits: | ● | First, theThe “Defined Contribution Component” of the SERP provides for employer matching and discretionary contributions to U.S.-based employees whose compensation exceeds a threshold set by the Internal Revenue Code. Although, as described above, the 401(k) Plan provides for employer contributions to our named executive officers at the same percentage of their eligible compensation as provided for all employees who participate in the 401(k) Plan, compensation and benefit limitations imposed on the 401(k) Plan by the Internal Revenue Code generally prevent us from making the entire amount of the employer matching and discretionary contributions contemplated by the 401(k) Plan with respect to any employee whose compensation exceeds a threshold set by Internal Revenue Code provisions, which was $275,000$290,000 for 2018.2021. The SERP provides to those employees whose compensation exceeds this threshold, including our named executive officers, benefits that would be earned under the 401(k) Plan but for these limitations. We distribute the accrued vested portion of the Defined Contribution Component of the SERP directly to participants in cash on an annual basis. Any unvested portions of the Defined Contribution Component are credited to the participant’s SERP account and distributed to the participant upon vesting. Each of our named executive officers receive benefits under this portion of the SERP. | | ● | Second, theThe “Defined Benefit Component” of the SERP provides benefits consisting of those supplemental retirement benefits that had been accrued as of December 31, 2005 under a plan maintained by our former parent company prior to our becoming an independent public company. |
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Severance Agreements Arrangements We have entered into Severance Agreements with alleach of our named executive officers.officers, other than Mr. Lewis. Severance Agreements help us attract and retain key talent and also provide important protections to us by discouraging our key executives from competing with us or soliciting our customers or employees for a specified period of time following termination. The Severance Agreements provide our named executive officers with benefits upon the involuntary termination of their employment other than for wrongful behavior or misconduct. The Severance Agreements also contain change in control benefits for these officers to help keep them focused on their work responsibilities during the uncertainty that accompanies a potential change in control and provide benefits for a period of time after a change in control transaction. We believe the levels of benefits offered by the Severance Agreements are appropriate and competitive. Compensation that could potentially be paid to our named executive officers pursuant to the Severance Agreements is described under “Potential Payments upon Termination or Change in Control” on page 55.60. Each agreement continues
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in effect unless we give at least 18 months’ prior written notice that the agreement will not be renewed. In addition, if a change in control occurs during the term of the agreement, the agreement will automatically continue for two years after the end of the month in which the change in control occurs. We have not entered in a Severance Agreement with Mr. Lewis, as we generally only enter into such agreements with certain members of our senior leadership team. Instead, Mr. Lewis participates in the Hanesbrands Inc. Salaried Employee Severance Pay Plan. Pursuant to the Hanesbrands Inc. Salaried Employee Severance Pay Plan, if Mr. Lewis is terminated for any reason other than for cause (as defined in the Plan), he is entitled to receive a severance benefits in an amount equal to four weeks of base salary for each year of service, with a minimum severance period of 26 weeks and a maximum severance period of 52 weeks. Benefit Plans and Arrangements
Our named executive officers are eligible to participate in certain of our other employee benefits plans and arrangements. These consist of the Hanesbrands Inc. Executive Deferred Compensation Plan (the “Executive Deferred Compensation Plan”), the Hanesbrands Inc. Executive Life Insurance Plan (the “Life Insurance Plan”), and the Hanesbrands Inc. Executive Disability Plan (the “Disability Plan”). In general, these benefits are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death and to enable executives to save for future financial needs in a tax efficient manner. Under the Executive Deferred Compensation Plan, a group of approximately 235240 U.S.-based employees, generally at the director level and above, including our named executive officers, may defer receipt of cash and equity compensation. This benefit offers tax advantages to eligible employees, permitting them to defer payment of their compensation and defer taxation on that compensation until a future date. The amount of compensation that may be deferred is determined in accordance with the Executive Deferred Compensation Plan based on elections by each participant. Amounts deferred under the Executive Deferred Compensation Plan may, at the election of the executive, (i) earn a fixed rate of interest, which was 2.62%0.62% for 2018;2021; (ii) be deemed to be invested in a stock equivalent account (the “HBI Stock Fund”) and earn a return based on the total shareholder return of Hanesbrands’ stock; or (iii) be deemed to be invested in one of a number of other investment funds designated by us from time to time. The amount payable to participants will be payable either on the withdrawal date elected by the participant or upon the occurrence of certain events as provided under the Executive Deferred Compensation Plan. A participant may designate one or more beneficiaries to receive any portion of the obligations payable in the event of death; however, neither participants nor their beneficiaries may transfer any right or interest in the Executive Deferred Compensation Plan. The Life Insurance Plan provides life insurance benefits to a group of approximately 7580 U.S.-based employees, generally at the level of vice president or above, including our named executive officers, who contribute materially to our continued growth, development and future business success. The Life Insurance Plan, which includes both a death benefit and a cash value, provides life insurance coverage during active employment in an amount equal to three times annual base salary, and, depending on the performance of investments in the plan, may offer continuing coverage following retirement. The Life Insurance Plan also provides executives with the opportunity to make voluntary, after-tax contributions that may be allocated by the executive into a range of investment options. The Disability Plan provides long-term disability benefits for a group of approximately 7580 U.S.-based employees, generally at the level of vice president and above, including our named executive officers. If an eligible employee becomes totally disabled, the program will provide a monthly disability benefit equal to 1/12 of the sum of (i) 75% of the employee’s annual base salary up to an amount not in excess of $500,000 and (ii) 50% of the three-year average of the employee’s annual short-term incentive payments up to an amount not in excess of $250,000. The maximum monthly disability benefit is $41,667 and is reduced by any disability benefits that an employee is entitled to receive under Social Security, workers’ compensation, a state compulsory disability law or another plan of Hanesbrands providing benefits for disability.
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2022 Compensation Decisions
In December 2018, using Using the methodology discussed under “How We Make Executive Compensation Decisions” on page 35,41, in December 2021, the Compensation Committee (and, with respect to Mr. Bratspies’ compensation, the full Board of Directors (excluding Mr. Bratspies)) determined the total target direct compensation levels of our executive officers for 2019,2022, as well as the relative mix of base salary, AIP opportunity and LTIP opportunity for those executives.
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When setting Mr. Evans’ total target direct Material increases to the fiscal 2022 compensation leveltargets for 2019, the Compensation Committee considered the total compensation opportunity for chiefour named executive officers at our peer group companies, as well as our operating performance and returns(set forth below) from their fiscal 2021 compensation targets were generally intended to stockholders. Based on those factors,more closely align with the Compensation Committee determined recommend no changes to Mr. Evans’ total target direct compensationmarket for 2019.
Following a market review of pay practices at our peer group companies and considering changes toequivalent positions. Those amounts approved for 2022 for the scope of certain officers’ individual responsibilities,named executive officers are set forth below (with the Compensationbase salary increases taking effect March 1, 2022):
Named Executive Officer | | 2022 Base Salary ($) | | 2022 AIP Target ($) | | 2022 LTIP Target ($) | | 2022 Total Target Direct Compensation ($) | Stephen B. Bratspies | | $ 1,250,000 | | $ 2,000,000 (160% of base salary | | $ 7,750,000 | | $ 11,000,000 | Michael P. Dastugue | | 750,000 | | 750,000 (100% of base salary) | | 2,000,000 | | 3,500,000 | M. Scott Lewis | | 386,000 | | 174,000 (45% of base salary) | | 325,000 | | 885,000 | Joseph W. Cavaliere | | 750,000 | | 750,000 (100% of base salary) | | 1,700,000 | | 3,200,000 | Jonathan Ram | | 650,000 | | 488,000 (75% of base salary) | | 1,762,000 | | 2,900,000 | Michael E. Faircloth | | 630,000 | | 473,000 (75% of base salary) | | 1,382,000 | | 2,485,000 |
On January 24, 2022, the Committee approved the following increases to the total target direct compensation levels for certain of our other named executive officers: ● | Mr. Hytinen’s total target direct compensation for 2019 was increased by approximately 19%. His base salary was increased from $600,000 to $675,000, his target AIP opportunity was increased from $510,000 to $573,750, and his target LTIP opportunity was increased from $1,200,000 to $1,500,000. | ● | Mr. Ram’s total target direct compensation for 2019 was increased by approximately 8%. His base salary was increased from $500,000 to $525,000, his target AIP opportunity was increased from $375,000 to $393,750, and his target LTIP opportunity was increased from $1,000,000 to $1,100,000. |
No changes were made to the 2019 total target direct compensation levels for Mr. Upchurch, Ms. Johnson or Mr. Faircloth.
With respect to the named executive officers’ 2019 LTIP opportunity, the Compensation Committee again determined that 50% of the LTIP opportunity will consist of PSAs and 50% of the LTIP opportunity will consist of RSUs.
* | Awards granted to executives who retire prior to the vesting date and who are age 50 or older and have at least 10 years of service will continue to vest in accordance with the vesting schedule, provided the executive enters into a written release of claims against the Company and complies with certain restrictive covenants. |
The Compensation Committee determined to continue the overall structure of thefiscal 2022 AIP and LTIP for 2019. The PSAs and RSUs for 2019 were granted on December 11, 2018. As a result, these awards are reflected in the Grants of Plan-Based Awards table on page 49 and the full grant date value of these awards is included for 2018 in the Summary Compensation Table on page 47, even though the Compensation Committee views these as 2019 LTIP awards.
The Compensationfiscal 2022 AIP performance metrics for our named executive officers, as approved by the Committee, consist of net organic sales (weighted 40%), operating income (excluding actions) (weighted 40%) and net inventory (weighted 20%). The Committee also approved performance criteriaa new diversity, equity and metricsinclusion modifier (+/- 5%) for 2019 that will be usedthe AIP related to determine the amounts earned byrepresentation of People of Color (including Black, Hispanic, Asian, Pacific Islander, Native American, Alaskan native and Hawaiian native associates) within our composition of the U.S. workforce at the senior manager level and above. Awards to our named executive officers under their performance-based pay opportunities. Our named executive officers can earn performance-based compensation equal to 25%our fiscal 2022 LTIP program, as approved by the Committee, once again consist of theirboth RSUs and PSAs, each targeted amount for performance at the threshold level, 100% of their targeted amount for performance at the target level and 200% of their targeted amount for performance at or above the maximum level. No performance-based compensation is payable if performance is below the threshold level, and incentive compensation is capped at 200%50% of the target amount. Performance-based compensation is payabletotal LTIP opportunity. The RSUs generally vest 33%, 33% and 34% on a straight-line basis for performance between the threshold levelfirst, second and the target level, as well as between the target level and the maximum level.
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The Compensation Committee again selected performance criteria and metrics that are key driversthird anniversaries of the Company’s long-term business strategygrant date, respectively. The PSAs are once again subject to a three-year (rather than one-year) performance period, and that require consistent year over year improvement in Company performance rather than performance based on negotiated targets relative to the Company’s annual operating plan or public guidance. The performance criteria and metrics for 2019 are as follows:
Criteria | | Weighting | | Threshold | | Target | | Maximum | Net Sales(growth compared to prior year) | | 10% | | 0% | | 1% | | 2% | Organic sales(growth compared to prior year)* | | 10% | | 0% | | 1% | | 2% | EPS-XA(growth compared to prior year) | | 40% | | 0% | | 3% | | 6% | Cash flow from operations | | 40% | | $500 million | | $700 million | | $900 million |
* | Organic sales are net sales excluding those derived from businesses acquired within the previous 12 months of a reporting date. |
In establishing the performance metrics for 2019, the Compensation Committee consideredPSAs include earnings per share (excluding actions) growth (weighted 50%) and cash flow from operations (weighted 50%). The PSAs will vest (subject to achievement of the Company’s short-term priorityapplicable performance goals) on the last business day of debt reduction over strategic acquisitionsFebruary 2025.
The performance metrics for our 2022 AIP and 2022 LTIP were generally tied to key points in our Full Potential plan. We expect to provide additional detail regarding the 2022 AIP and LTIP awards, and other choices of capital allocation, as well as general retail conditions, and decided to: (i) lower the net sales growth target from the 2018 target of 3%decisions with respect to 1%, consistent with the organic sales growth target, and (ii) reduce the EPS-XA growth target from the 2018 target of 8% to 3%.our 2022 executive compensation program, in future executive compensation disclosures. Additional Information Consideration of Prior Stockholder Advisory Vote on Executive Compensation
At our 20182021 Annual Meeting of Stockholders, our stockholders had the opportunity to cast an advisory “say on pay” vote on our executive compensation. Our stockholders approved the compensation of our named executive officers as disclosed in the Proxy Statement for that meeting with over 90%94% support. Our Board of Directors, and the Compensation Committee in particular, consideredGiven this strong level of support, as well as the executiveCommittee did not make any changes to our compensation programspolicies or practices that were specifically driven by the result of our peer group of companies, our past operating performance and planned strategic initiatives, in making the determination that the fundamental characteristics of our executive compensation program should continue this year.“say on pay” vote. No Tax Gross-Ups
We do not increase payments to any executive officer to cover non business-related personal income taxes, other than the personal income taxes due on relocation reimbursements, which is provided under a broad-based program. Beginning December 1, 2010, we eliminated excise tax gross-ups with respect to new or amended Severance Agreements.
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Clawbacks and Recoupment
The Compensation Committee has adopted a clawback policy in order to further align the interests of employees with the interests of our stockholders and strengthen the link between total compensation and the Company’s performance. Under this policy, in the event we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws, we may, in the discretion of the Compensation Committee (as it applies to current or former executive officers) or the Chief Executive Officer (as it applies to any other employee), seek to recover, from any employee who received cash-based orcash-or equity-based incentive compensation during the three-year period preceding the date on which we are required to prepare an accounting restatement, the amount by which such person’s cash-basedcash- or equity-based incentive compensation for the relevant period exceeded the lower payment that would have been made based on the restated financial results. Additionally, the documents governing both our cash-based AIP and our equity-based LTIP provide that if an employee violates our Global Code of Conduct or engages in certain activities that are harmful to the interests of the Company, we may recover any incentive compensation paid to that person within the 12-month period immediately preceding such wrongful conduct. Stock Ownership and Retention Guidelines
We believe that our executives should have a significant ownership position in Hanesbrands. To promote such equity ownership and further align the economic interests of our executives with our stockholders, we have adopted stock ownership guidelines for our key executives, including our named executive officers. Our Chief Executive Officer (Mr. Bratspies) is required to own Hanesbrands stock valued at six times his annual base salary; all other named executive officers are generally required to own Hanesbrands stock valued at two times (in the case of Mr. Faircloth and Mr. Ram) or three times (in the case of Mr. Cavaliere and Mr. Dastugue) his or her base salary. Mr. Lewis, who is serving as Chief Financial Officer in an interim capacity, is required to own Hanesbrands stock equal to his base salary. Until the requirements of the stock ownership guidelines are met, an executive is required to retain 50% of any shares received (on a net after-tax basis) under our stock-based compensation plans. Our named executive officers and other key executives have a substantial portion of their incentive compensation paid in the form of our common stock. In addition to shares directly held by a key executive, unvested RSUs, shares held for such
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executive in the 401(k) Plan, the Executive Deferred Compensation Plan and the SERP, including hypothetical share equivalents held in the latter two plans, are counted for purposes of determining whether the ownership requirements are met. All of our named executive officers are in compliance with these stock ownership and retention guidelines. Prohibitions on Pledging, Hedging and Other Derivative Transactions
Under our insider trading policy, directors and executive officers, including our named executive officers, are required to clear in advance all transactions in our securities with Hanesbrands’ law department. Further, no director, executive officer or other employee is permitted to (i) pledge or margin our securities as collateral for a loan obligation, (ii) engage in “short sales” or “sales against the box” or trade in puts, calls or other options on our securities or (iii) purchase any financial instrument or contract that is designed to hedge or offset any risk of decrease in the market value of our securities. These provisions are part of our overall program to prevent any of our directors, officers or employees from trading on material non-public information. Compensation Risk Assessment
The Compensation Committee, in consultation with FW Cook, annually reviews our current compensation policies and practices and believes that, in light of their overall structure, the risks arising from such compensation policies and practices are not reasonably likely to have a material adverse effect on us. Some of the key factors supporting the Compensation Committee’s conclusion include: (i) a reasonable degree of balance with respect to the mix of cash and equity compensation and short-term and longer-term performance focus; (ii) the use of multiple performance criteriametrics in our AIP and LTIP awards; (iii) multiple year vesting for equity awards; (iv) robust executive and non-employee director stock ownership guidelines; (v) an insider trading policy that includes prohibitions on hedging and pledging of our stock; and (vi) an incentive compensation clawback policy.
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Tax Treatment of Certain Compensation
Previously, Section 162(m) of the Internal Revenue Code limited the tax deductibility of certain compensation paid to our Chief Executive Officer and our three other named executive officers, other than our Chief Financial Officer, with the highest total compensation. That provision disallowed the deductibility of certain compensation in excess of $1 million per year unless it was considered performance-based compensation under the Internal Revenue Code. As a result, we historically adopted policies and practices that were intended to qualify certain awards as performance-based compensation under Section 162(m) and qualify for the maximum possible tax deduction. On December 22, 2017, the U.S. federal government enacted the Tax Cuts and Jobs Act, which substantially modified the Internal Revenue Code and, among other things, eliminated the performance-based compensation exception under Section 162(m). As a result, we are no longer able to deduct any compensation amounts over $1 million paid to our Chief Executive Officer and certain current or former named executive officers unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
In making decisions about executive compensation, we continue to consider the impact of other regulatory provisions, including the provisions of Section 409A of the Internal Revenue Code regarding non-qualified deferred compensation and the “golden parachute” provisions of Section 280G of the Internal Revenue Code. We also consider how various elements of compensation will impact our financial results. In this regard, we consider the impact of applicable stock compensation accounting rules, which determine how we recognize the cost of employee services received in exchange for awards of equity instruments.
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Executive Compensation Summary of Compensation
The following table sets forth a summary of compensation earned by or paid to our named executive officers for our 2018, 20172021, 2020 and 20162019 fiscal years, as applicable. Fiscal 2021 Summary Compensation Table Name and Principal Position | | Year | | Salary ($) (1) | | Bonus ($) (2) | | Stock Awards ($) (3) | | Non-Equity Incentive Plan Compensation ($) (1) (4) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (5) | | All Other Compensation ($) (6) | | Total Compensation ($) | Gerald W. Evans, Jr. Chief Executive Officer | | 2018 | | $ 1,100,000 | | — | | $ 6,249,987 | | $ 1,303,170 | | $ — | | $ 179,551 | | $ 8,832,708 | | 2017 | | 1,100,000 | | — | | 6,250,014 | | 1,889,250 | | 164,848 | | 177,874 | | 9,581,985 | | 2016 | | 912,500 | | — | | 6,543,769 | | 1,394,190 | | 132,718 | | 206,366 | | 9,189,543 | Barry A. Hytinen Chief Financial Officer | | 2018 | | 600,000 | | — | | 1,499,993 | | 402,798 | | — | | 178,645 | | 2,681,436 | | 2017 | | 127,693 | | 250,000 | | 2,200,017 | | 124,277 | | — | | 44,058 | | 2,746,045 | Jonathan Ram Group President, Global Activewear | | 2018 | | 316,668 | | 250,000 | | 2,599,983 | | 187,578 | | — | | 60,093 | | 3,414,321 | W. Howard Upchurch Group President, Innerwear Americas | | 2018 | | 570,000 | | — | | 1,302,000 | | 337,640 | | — | | 50,317 | | 2,259,956 | | 2017 | | 570,000 | | — | | 1,302,001 | | 489,488 | | 51,457 | | 65,043 | | 2,477,988 | | 2016 | | 525,000 | | — | | 1,201,980 | | 592,531 | | 29,398 | | 103,155 | | 2,452,064 | Joia M. Johnson Chief Administrative Officer, General Counsel and Corporate Secretary | | 2018 | | 550,000 | | — | | 1,182,008 | | 369,232 | | — | | 55,116 | | 2,156,356 | | 2017 | | 550,000 | | — | | 1,181,999 | | 535,288 | | — | | 67,358 | | 2,334,644 | | 2016 | | 515,000 | | — | | 1,082,012 | | 581,245 | | — | | 278,966 | | 2,457,223 | Michael E. Faircloth Group President, Global Supply Chain, Information Technology and E-Commerce | | 2018 | | 560,000 | | — | | 1,205,012 | | 331,716 | | — | | 51,270 | | 2,147,998 | | 2017 | | 540,000 | | | | 1,205,002 | | 463,725 | | 22,927 | | 60,987 | | 2,292,641 | | 2016 | | 510,000 | | — | | 1,105,012 | | 507,884 | | 13,083 | | 85,673 | | 2,221,651 |
Name and Principal Position | | Fiscal Year | | Salary ($)(1) | | Bonus ($)(2) | | Stock Awards ($)(3) | | | Option Awards ($)(3) | | | Non-Equity Incentive Plan Compensation ($)(1)(5) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(7) | | All Other Compensation ($)(8) | | Total ($) | Stephen B. Bratspies | | 2021 | | $ | 1,100,000 | | $ | — | | $ | 7,049,994 | | | $ | — | | | $ | 2,691,130 | | | $ | — | | $ | 190,125 | | $ | 11,031,249 | Chief Executive Officer | | 2020 | | | 458,333 | | | — | | | 2,812,505 | | | | 655,689 | | | | 803,150 | | | | — | | | 99,388 | | | 4,829,065 | Michael P. Dastugue | | 2021 | | | 500,000 | | | — | | | 1,013,319 | | | | — | | | | 815,494 | | | | — | | | 70,463 | | | 2,399,276 | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | M. Scott Lewis | | 2021 | | | 375,000 | | | 350,000 | | | 225,000 | | | | | | | | 532,110 | (6) | | | — | | | 90,820 | | | 1,572,930 | Chief Accounting Officer | | 2020 | | | 361,790 | | | 700,000 | | | 175,001 | | | | — | | | | 439,009 | (6) | | | — | | | 40,564 | | | 1,716,363 | and Former Interim Chief | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Joseph W. Cavaliere | | 2021 | | | 623,719 | | | — | | | 1,519,996 | | | | — | | | | 1,017,278 | | | | — | | | 264,618 | | | 3,425,611 | Group President, Global | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Innerwear | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jonathan Ram | | 2021 | | | 637,500 | | | — | | | 1,520,000 | | | | — | | | | 779,816 | | | | — | | | 89,418 | | | 3,026,734 | Group President, Global | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Activewear | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael E. Faircloth | | 2021 | | | 626,667 | | | — | | | 1,282,004 | | | | | | | | 766,564 | | | | — | | | 75,519 | | | 2,750,754 | Group President, | | 2020 | | | 588,511 | | | — | | | 1,282,009 | | | | — | | | | 415,187 | | | | 31,843 | | | 75,202 | | | 2,392,753 | Global Operations | | 2019 | | | 560,000 | | | — | | | — | (4) | | | — | | | | 587,664 | | | | 41,052 | | | 56,227 | | | 1,244,943 |
(1) | The amounts shown include deferrals to the 401(k) Plan and the Executive Deferred Compensation Plan. | (2) | InThe bonus amounts listed in this column for Mr. Lewis in each of fiscal year 2021 and 2020 represent an additional quarterly fee of $175,000 payable to him in connection with his appointmentservice as Interim Chief Financial Officer, Mr. Hytinen received a transition cash bonus of $250,000 that must be repaid in the event Mr. Hytinen voluntarily terminates his employment with Hanesbrands prior to the second anniversary of his employment start date. In connection with his appointment as Group President, Global Activewear, Mr. Ram received a transition cash bonus of $250,000 that must be repaid in the event Mr. Ram voluntarily terminates his employment with Hanesbrands prior to the second anniversary of his employment start date.Officer. | | |
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(3) | The amounts shown reflect the aggregate grant date fair value of awards during the year shown, computed in accordance with Topic 718 of the FASB Accounting Standards Codification. The assumptions we used in valuing these awards are described in Note 6, “Stock-Based Compensation,” to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2018.January 1, 2022. These amounts do not correspond to the actual value that may be recognized by the officer. Additional information regarding outstanding awards, including exercise prices and expiration dates, can be found in the “Outstanding Equity Awards”Awards at Fiscal 2021 Year End” table on page 50.56. The amounts shown under “Stock Awards” include: (i) grants of restricted stock units (“RSUs”) and (ii) performance share awards (“PSAs”), as shown below: |
| | Year | | Grant Date Fair Value of PSAs | | Grant Date Fair Value of RSUs | | Total Grant Date Fair Value of Stock Awards | Gerald W. Evans, Jr. | | 2018 | | $ 3,124,993 | | $ 3,124,993 | | $ 6,249,987 | | 2017 | | 3,125,007 | | 3,125,007 | | 6,250,014 | | 2016 | | 2,862,511 | | 3,681,258 | | 6,543,769 | Barry A. Hytinen | | 2018 | | 749,997 | | 749,997 | | 1,499,993 | | 2017 | | 600,008 | | 1,600,009 | | 2,200,017 | Jonathan Ram | | 2018 | | 549,995 | | 2,049,989 | | 2,599,983 | W. Howard Upchurch | | 2018 | | 651,000 | | 651,000 | | 1,302,000 | | 2017 | | 651,000 | | 651,000 | | 1,302,001 | | 2016 | | 600,990 | | 600,990 | | 1,201,980 | Joia M. Johnson | | 2018 | | 591,004 | | 591,004 | | 1,182,008 | | 2017 | | 591,000 | | 591,000 | | 1,181,999 | | 2016 | | 541,006 | | 541,006 | | 1,082,012 | Michael E. Faircloth | | 2018 | | 602,506 | | 602,506 | | 1,205,012 | | 2017 | | 602,501 | | 602,501 | | 1,205,002 | | 2016 | | 552,506 | | 552,506 | | 1,105,012 |
| | Fiscal Year | | | Grant Date Fair Value of PSAs ($) | | | Grant Date Fair Value of RSUs ($) | | | Total Grant Date Fair Value of Stock Awards ($) | | Stephen B. Bratspies | | | 2021 | | | $ | 3,525,000 | | | $ | 3,524,995 | | | $ | 7,049,994 | | | | | 2020 | | | | 1,406,253 | | | | 1,406,253 | | | | 2,812,505 | | Michael P. Dastugue | | | 2021 | | | | 506,659 | | | | 506,659 | | | | 1,013,319 | | M. Scott Lewis | | | 2021 | | | | 112,501 | | | | 112,499 | | | | 225,000 | | | | | 2020 | | | | 87,500 | | | | 87,500 | | | | 175,001 | | Joseph W. Cavaliere | | | 2021 | | | | 760,004 | | | | 759,993 | | | | 1,519,996 | | Jonathan Ram | | | 2021 | | | | 760,004 | | | | 759,996 | | | | 1,520,000 | | Michael E. Faircloth | | | 2021 | | | | 641,001 | | | | 641,003 | | | | 1,282,004 | | | | | 2020 | | | | 641,005 | | | | 641,005 | | | | 1,282,009 | | | | | 2019 | | | | — | | | | — | | | | — | |
| As noted below, no PSAs or RSUs were granted to our named executive officers during our 2019 fiscal year and no PSA or RSU awards are shown for 2019 in the Summary Compensation Table. | | The amounts shown above for PSAs represent the grant date value based on the probable outcome of the performance conditions. The value of such awards at the grant date assuming that the maximum level of performance conditions was achieved was as follows: for Mr. Evans: $5,725,022Bratspies: $7,049,999 in 2016, $6,250,0142021 and $2,812,505 in 2017 and $6,249,987 in 2018;2020; for Mr. Hytinen: $1,200,016Dastugue: $1,013,319 in 20172021; for Mr. Lewis: $225,002 in 2021 and $1,499,993$175,001 in 2018;2020; for Mr. Cavaliere: $1,520,007 in 2021; for Mr. Ram: $1,099,989$1,520,007 in 2018; for Mr. Upchurch: $1,201,980 in 2016, $1,302,001 in 2017 and $1,302,000 in 2018; for Ms. Johnson: $1,082,012 in 2016, $1,181,999 in 2017 and $1,182,008 in 2018;2021; and for Mr. Faircloth: $1,105,012$1,282,003 in 2016, $1,205,0022021 and $1,282,009 in 2017 and $1,205,012 in 2018.2020. | | The amount shown under “Option Awards” includes an inducement equity grant for Mr. Bratspies consisting of three tranches of stock options: (1) options to purchase 83,333 shares with a per share exercise price equal to 100% of the closing price of Hanesbrands’ common stock on the grant date ($14.32) that vested on the first anniversary of the grant date; (2) options to purchase 83,333 shares with a per share exercise price equal to 120% of the closing price of Hanesbrands’ common stock on the grant date ($17.18) that vest on the second anniversary of the grant date; and (3) options to purchase 83,334 shares with a per share exercise price equal to 140% of the closing price of Hanesbrands’ common stock on the grant date ($20.05) that vest on the third anniversary of the grant date. | (4) | In December 2019, the Compensation Committee decided to begin approving LTIP awards in January of each year so that the Committee can have the benefit of greater visibility to the financial results for the prior year and the operating plan for the upcoming year when making such decisions. In January 2020, the Compensation Committee approved the 2020 LTIP awards. Therefore, no LTIP awards were granted to our named executive officers during our 2019 fiscal year and no stock awards are shown for Mr. Faircloth in 2019 in the Summary Compensation Table above. | (5) | The amount shown reflects the amount earned for such year under the AIP, which amount was paid after the end of such year. | (5)(6) | Mr. Lewis received additional cash compensation of $175,000 per quarter in which he served as Interim CFO, which amounts were included with base salary in calculating Mr. Lewis’ 2020 and 2021 AIP awards. | (7) | Neither the Executive Deferred Compensation Plan nor the SERP provide for “above-market” or preferential earnings as defined in applicable SEC rules. Increases in pension values are determined for the periods presented; because the defined benefit arrangements are frozen, the amounts shown in this column represent solely the increase in the actuarial value of pension benefits previously accrued as of December 31, 2005. The amount reported for Mr. Faircloth in 2021 is $0 due to the fact that the present value of his accumulated benefits under the Pension Plan decreased by $7,010 in 2021. | (6)(8) | For theour 2021 fiscal year, ended December 29, 2018, the amounts shown in the “All Other Compensation” column include the following: (i) relocation expenses ($77,590 for Mr. Bratspies and $140,815 for Mr. Cavaliere); (ii) life insurance policy premiums ($49,38662,063 for Mr. Evans, $14,644Dastugue, $6,295 for Mr. Hytinen, $21,241Lewis, $79,167 for Mr. Ram, $7,937Cavaliere, $26,150 for Mr. Upchurch, $11,705 for Ms. JohnsonRam and $10,321 for Mr. Faircloth); (ii)(iii) long-term disability insurance policy premiums ($10,505 for Mr. Evans, $5,730 for Mr. Hytinen andBratspies, $4,775 for Mr. Ram)Dastugue, $3,581 for Mr. Lewis, $5,957 for Mr. Cavaliere, $6,088 for Mr. Ram and $5,985 for Mr. Faircloth); (iii)(iv) accidental death and dismemberment insurance policy premiums ($90 for each of Mr. Evans, Mr. Hytinen and Mr. Ram); (iv) our contributions pursuant to the defined contribution retirement program, which consists of the qualified 401(k)Plan ($11,000 for each of the officers, other than Mr. Ram) and the nonqualified SERP ($108,570144 for Mr. Evans, $17,971Bratspies, $90 for Mr. Hytinen, $11,667Dastugue, $149 for Mr. Lewis, $90 for Mr. Cavaliere, $162 for Mr. Ram $31,380 for Mr. Upchurch, $32,411 for Ms. Johnson and $29,949$144 for Mr. Faircloth); (v) relocation expenses ($115,281 for Mr. Hytinen and $15,000 for Mr. Ram); and (vi) reimbursement of taxes owed with respect to relocation benefits ($13,92916,593 for Mr. HytinenBratspies and $7,320$13,641 for Mr. Ram)Cavaliere); and (vi) our contributions pursuant to defined contribution retirement programs, which consists of the qualified 401(k) plan ($17,300 for each of Mr. Bratspies, Lewis, Ram and Faircloth and $11,600 for Mr. Cavaliere) and the nonqualified SERP ($67,993 for Mr. Bratspies, $8,400 for Mr. Dastugue, $67,225 for Mr. Lewis, $13,349 for Mr. Cavaliere, $45,968 for Mr. Ram and $47,898 for Mr. Faircloth). |
Table of Contents | Compensation Discussion and Analysis |
Grants of Plan-Based Awards
The following table sets forth a summary of grants of plan-based awards to our named executive officers during our 20182021 fiscal year. Grants of Plan-Based Awards in 2018Fiscal 2021 | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under Equity Incentive Plan Awards | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | Grant Date Fair Value of Stock and Option Awards ($) (1) | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | | Gerald W. Evans, Jr. | | 1/30/2018 | (2) | | $ | 165,000 | | $ | 1,650,000 | | $ | 3,300,000 | | — | | — | | — | | — | | $ — | | | 12/11/2018 | (3) | | | — | | | — | | | — | | 21,001 | | 210,013 | | 420,026 | | — | | 3,124,993 | (4) | | 12/11/2018 | (5) | | | — | | | — | | | — | | — | | — | | — | | 210,013 | | 3,124,993 | | Barry A. Hytinen | | 1/30/2018 | (2) | | | 51,000 | | | 510,000 | | | 1,020,000 | | — | | — | | — | | — | | — | | | 12/11/2018 | (3) | | | — | | | — | | | — | | 5,040 | | 50,403 | | 100,806 | | — | | 749,997 | (4) | | 12/11/2018 | (5) | | | — | | | — | | | — | | — | | — | | — | | 50,403 | | 749,997 | | Jonathan Ram | | 5/15/2018 | (2) | | | 23,750 | | | 237,501 | | | 475,001 | | — | | — | | — | | — | | — | | | 7/24/2018 | (6) | | | — | | | — | | | — | | — | | — | | — | | 69,156 | | 1,499,994 | | | 12/11/2018 | (3) | | | — | | | — | | | — | | 3,696 | | 36,962 | | 73,924 | | — | | 549,995 | (4) | | 12/11/2018 | (5) | | | — | | | — | | | — | | — | | — | | — | | 36,962 | | 549,995 | | W. Howard Upchurch | | 1/30/2018 | (2) | | | 42,750 | | | 427,500 | | | 855,000 | | — | | — | | — | | — | | — | | | 12/11/2018 | (3) | | | — | | | — | | | — | | 4,375 | | 43,750 | | 87,500 | | — | | 651,000 | (4) | | 12/11/2018 | (5) | | | — | | | — | | | — | | — | | — | | — | | 43,750 | | 651,000 | | Joia M. Johnson | | 1/30/2018 | (2) | | | 46,750 | | | 467,500 | | | 935,000 | | — | | — | | — | | — | | — | | | 12/11/2018 | (3) | | | — | | | — | | | — | | 3,972 | | 39,718 | | 79,436 | | — | | 591,004 | (4) | | 12/11/2018 | (5) | | | — | | | — | | | — | | — | | — | | — | | 39,718 | | 591,004 | | Michael E. Faircloth | | 1/30/2018 | (2) | | | 42,000 | | | 420,000 | | | 840,000 | | — | | — | | — | | — | | — | | | 12/11/2018 | (3) | | | — | | | — | | | — | | 4,049 | | 40,491 | | 80,982 | | — | | 602,506 | (4) | | 12/11/2018 | (5) | | | — | | | — | | | — | | — | | — | | — | | 40,491 | | 602,506 | |
| | | | | | | | | | All Other Stock | | All Other Option Awards: | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | Awards: Number | | Number of Securities | | Exercise or Base Price | | Grant Date Fair Value of Stock | Name | | Grant Date | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | | of Shares of Stock or Units | | Underlying Options (#) | | of Option Awards ($/Sh) | | and Option Awards ($) (1) | Stephen B. Bratspies | | 1/25/2021 (2) | | | $ 412,500 | | | $ | 1,650,000 | | | $ | 3,300,000 | | | | — | | | | — | | | | — | | | | — | | | — | | $ | — | | $ | — | | | | 2/11/2021 (3) | | | — | | | | — | | | | — | | | | 47,713 | | | | 190,850 | | | | 381,700 | | | | — | | | — | | | — | | | 3,525,000 | (4) | | | 1/25/2021 (5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 227,419 | | | — | | | — | | | 3,524,995 | | Michael P. Dastugue | | 5/3/2021 (2) | | | 125,000 | | | | 500,000 | | | | 1,000,000 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | — | | | | 5/3/2021 (3) | | | — | | | | — | | | | — | | | | 5,950 | | | | 23,798 | | | | 47,596 | | | | — | | | — | | | — | | | 506,659 | (4) | | | 5/3/2021 (5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 23,798 | | | — | | | — | | | 506,659 | | M. Scott Lewis | | 1/25/2021 (2) | | | 81,563 | | | | 326,250 | | | | 652,500 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | — | | | | 2/11/2021 (3) | | | — | | | | — | | | | — | | | | 1,523 | | | | 6,091 | | | | 12,182 | | | | — | | | — | | | — | | | 112,501 | (4) | | | 1/25/2021 (5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,258 | | | — | | | — | | | 112,499 | | Joseph W. Cavaliere | | 2/8/2021 (2) | | | 155,930 | | | | 623,719 | | | | 1,247,438 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | — | | | | 2/11/2021 (3) | | | — | | | | — | | | | — | | | | 10,287 | | | | 41,148 | | | | 82,296 | | | | — | | | — | | | — | | | 760,004 | (4) | | | 2/8/2021 (5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 47,559 | | | — | | | — | | | 759,993 | | Jonathan Ram | | 1/25/2021 (2) | | | 119,531 | | | | 478,125 | | | | 956,250 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | — | | | | 2/11/2021 (3) | | | — | | | | — | | | | — | | | | 10,287 | | | | 41,148 | | | | 82,296 | | | | — | | | — | | | — | | | 760,004 | (4) | | | 1/25/2021 (5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 49,032 | | | — | | | — | | | 759,996 | | Michael E. Faircloth | | 1/25/2021 (2) | | | 117,500 | | | | 470,000 | | | | 940,000 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | — | | | | 2/11/2021 (3) | | | — | | | | — | | | | — | | | | 8,676 | | | | 34,705 | | | | 69,410 | | | | — | | | — | | | — | | | 641,001 | (4) | | | 1/25/2021 (5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 41,355 | | | — | | | — | | | 641,003 | |
(1) | The amounts shown in the “Grant Date Fair Value” column reflect the aggregate grant date fair value of the awards, computed in accordance with Topic 718 of the FASB Accounting Standards Codification. | (2) | This award is the AIP award for the 20182021 fiscal year. See “Annual Incentive Plan (AIP)” on page 4046 for a discussion of the amounts paid under the AIP for the 20182021 fiscal year. | (3) | This award is the portion of the LTIP award for 2019fiscal 2021 that consists of the PSA. ThisIf earned, the award willwould vest on the third anniversary of the grant date, and the number of shares of common stock that willwould vest will rangewould have ranged from 0% to 200% of the number of shares granted based on our achievement of pre-established performance metrics for our 20192021 fiscal year. Once vested, this award will be paid in shares of our common stock distributed to participants following the vesting date. See “2019 Compensation Decisions”“Long-Term Incentive Program (LTIP)” on page 4347 for a discussion of these awards. | (4) | Represents the grant date fair value of the portion of the LTIP award for 2019fiscal 2021 that consists of the PSA, assuming achievement at the target level. level (representing the probable outcome of the applicable performance conditions at the grant date). | (5) | This award represents the portion of the LTIP award for 2019fiscal 2021 that consists of restricted stock units.RSUs. The restricted stock unitsRSUs generally vest 33%, 33% and 34% on the first anniversary, the second anniversary and the third anniversary, respectively, of the date of grant. See “2019 Compensation Decisions”“Long-Term Incentive Program (LTIP)” on page 4347 for a discussion of these awards. | (6) | This award represents a transition equity award in the form of restricted stock units granted in connection with Mr. Ram’s appointment as Group President, Global Activewear effective May 15, 2018. The restricted stock units vest 33%, 33% and 34% on the first anniversary, the second anniversary and the third anniversary, respectively, of the date of grant.
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Table of Contents Compensation Discussion and Analysis | |
Outstanding Equity Awards
The following table sets forth certain information with respect to outstanding equity awards at the end of our 20182021 fiscal year for each of our named executive officers. Outstanding Equity Awards at Fiscal 2018 Year-End2021 Year End | | | | Option Awards | | Stock Awards | Name | | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) (1) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) | Gerald W. Evans, Jr. | | (3) | | — | | — | | $ — | | — | | — | | $ — | | 210,013 | (4) | | $ | 2,560,058 | (5) | | | (6) | | — | | — | | — | | — | | 210,013 | | 2,560,058 | | — | | | | — | | | | (7) | | — | | — | | — | | — | | 117,811 | | 1,436,116 | | — | | | | — | | | | (8) | | — | | — | | — | | — | | 99,941 | | 1,218,281 | | — | | | | — | | | | (9) | | — | | — | | — | | — | | 10,364 | | 126,337 | | — | | | | — | | | | (10) | | — | | — | | — | | — | | 142,503 | | 1,737,112 | | — | | | | — | | | | (11) | | — | | — | | — | | — | | 42,317 | | 515,844 | | — | | | | — | | | | (12) | | 78,800 | | — | | 6.79 | | 12/6/2020 | | — | | — | | — | | | | — | | | | (13) | | 162,712 | | — | | 6.09 | | 12/8/2019 | | — | | — | | — | | | | — | | Barry A. Hytinen | | (3) | | — | | — | | — | | — | | — | | — | | 50,403 | (4) | | | 614,413 | (5) | | | (6) | | — | | — | | — | | — | | 50,403 | | 614,413 | | — | | | | — | | | | (7) | | — | | — | | — | | — | | 22,620 | | 275,738 | | — | | | | — | | | | (8) | | — | | — | | — | | — | | 19,189 | | 233,914 | | — | | | | — | | | | (14) | | — | | — | | — | | — | | 29,036 | | 353,949 | | — | | | | — | | Jonathan Ram | | (3) | | — | | — | | — | | — | | — | | — | | 36,962 | (4) | | | 450,567 | (5) | | | (6) | | — | | — | | — | | — | | 36,962 | | 450,657 | | — | | | | — | | | | (15) | | — | | — | | — | | — | | 69,156 | | 843,012 | | — | | | | — | | W. Howard Upchurch | | (3) | | — | | — | | — | | — | | — | | — | | 43,750 | (4) | | | 533,313 | (5) | | (6) | | — | | — | | — | | — | | 43,750 | | 533,313 | | — | | | | — | | | | (7) | | — | | — | | — | | — | | 24,542 | | 299,167 | | — | | | | — | | | | (8) | | — | | — | | — | | — | | 20,820 | | 253,796 | | — | | | | — | | | | (10) | | — | | — | | — | | — | | 29,919 | | 364,713 | | — | | | | — | | | | (11) | | — | | — | | — | | — | | 8,886 | | 108,320 | | — | | | | — | | | | (12) | | 36,036 | | — | | 6.79 | | 12/6/2020 | | — | | — | | — | | | | — | | | | (13) | | 69,152 | | — | | 6.09 | | 12/8/2019 | | — | | — | | — | | | | — | | Joia M. Johnson | | (3) | | — | | — | | — | | — | | — | | — | | 39,718 | (4) | | | 484,162 | (5) | | | (6) | | — | | — | | — | | — | | 39,718 | | 484,162 | | — | | | | — | | | | (7) | | — | | — | | — | | — | | 22,280 | | 271,593 | | — | | | | — | | | | (8) | | — | | — | | — | | — | | 18,901 | | 230,403 | | — | | | | — | | | | (10) | | — | | — | | — | | — | | 26,933 | | 328,313 | | — | | | | — | | | | (11) | | — | | — | | — | | — | | 7,998 | | 97,496 | | — | | | | — | |
Table of Contents
| Compensation Discussion and Analysis |
| | Option Awards | | Stock Awards | | | | Option Awards | | | Stock Awards | | Name | | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) (1) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Michael E. Faircloth | | (3) | | — | | — | | $ — | | — | | — | | $ — | | 40,491 | (4) | | $ | 493,585 | (5) | | Stephen B. Bratspies | | | (2) | | | — | | | | — | | | $ | — | | | | — | | | | 381,700 | | | $ | 6,382,024 | | | | — | | | | — | | | | (6) | | — | | — | | — | | — | | 40,491 | | 493,585 | | — | | | — | | | (3) | | | — | | | | — | | | | — | | | | — | | | | 227,419 | | | | 3,802,446 | | | | — | | | | — | | | | (7) | | — | | — | | — | | — | | 22,714 | | 276,884 | | — | | | — | | | (4) | | | — | | | | — | | | | — | | | | — | | | | 65,796 | | | | 1,100,109 | | | | — | | | | — | | | | (8) | | — | | — | | — | | — | | 19,269 | | 234,889 | | — | | | — | | | (5) | | | 83,333 | | | | — | | | | 14.32 | | | | 8/3/2030 | | | | — | | | | — | | | | — | | | | — | | | | (10) | | — | | — | | — | | — | | 27,505 | | 335,286 | | — | | | — | | | (6) | | | — | | | | 83,333 | | | | 17.18 | | | | 8/3/2030 | | | | — | | | | — | | | | — | | | | — | | | | (11) | | — | | — | | — | | — | | 8,168 | | 99,568 | | — | | | — | | | (7) | | | — | | | | 83,334 | | | | 20.05 | | | | 8/3/2030 | | | | — | | | | — | | | | — | | | | — | | Michael P. Dastugue | | | (2) | | | — | | | | — | | | | — | | | | — | | | | 47,596 | | | | 795,805 | | | | — | | | | — | | | | (12) | | 6,132 | | — | | 6.79 | | 12/6/2020 | | — | | — | | — | | | — | | | (3) | | | — | | | | — | | | | — | | | | — | | | | 23,798 | | | | 397,903 | | | | — | | | | — | | M. Scott Lewis | | | (2) | | | — | | | | — | | | | — | | | | — | | | | 12,182 | | | | 203,683 | | | | — | | | | — | | | | | (3) | | | — | | | | — | | | | — | | | | — | | | | 7,258 | | | | 121,354 | | | | — | | | | — | | | | | (4) | | | — | | | | — | | | | — | | | | — | | | | 4,120 | | | | 68,886 | | | | — | | | | — | | Joseph W. Cavaliere | | | (2) | | | — | | | | — | | | | — | | | | — | | | | 82,296 | | | | 1,375,989 | | | | — | | | | — | | | | | (3) | | | — | | | | — | | | | — | | | | — | | | | 47,559 | | | | 795,186 | | | | — | | | | — | | Jonathan Ram | | | (2) | | | — | | | | — | | | | — | | | | — | | | | 82,296 | | | | 1,375,989 | | | | — | | | | — | | | | | (3) | | | — | | | | — | | | | — | | | | — | | | | 49,032 | | | | 819,815 | | | | — | | | | — | | | | | (4) | | | — | | | | — | | | | — | | | | — | | | | 26,226 | | | | 438,499 | | | | — | | | | — | | Michael E. Faircloth | | | (2) | | | — | | | | — | | | | — | | | | — | | | | 69,410 | | | | 1,160,535 | | | | — | | | | — | | | | | (3) | | | — | | | | — | | | | — | | | | — | | | | 41,355 | | | | 691,456 | | | | — | | | | — | | | | | (4) | | | — | | | | — | | | | — | | | | — | | | | 30,181 | | | | 504,626 | | | | — | | | | — | |
(1) | The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant, as adjusted to reflect our four-for-one stock split on March 3, 2015.
| (2) | Calculated by multiplying $12.19,$16.72, the closing market price of our common stock on December 28, 2018,31, 2021, by the number of restricted stock units or performance shares which have not vested. | (3)(2) | This award was granted on DecemberFebruary 11, 20182021 and is the portion of the 2019performance shares awarded under the 2021 LTIP award that consists ofwas earned based on performance shares.in fiscal 2021. This award will generally vest on the third anniversary of the grant date, and the number of shares of common stock that will vest will range from 0% to 200% of the number of units granted based on the Company’s achievement of certain performance targets for its 2019 fiscal year discussed on page 45. date. | (4)(3) | Represents the number of shares of our common stock that can be issued on the vesting date, based on the Company’s achievement of certain performance metrics for its 2019 fiscal year discussed on page 45, assuming achievement of the target level of performance. The ranges of shares that can be issued at the vesting date, based on actual performance, is from 0 shares to 420,026 shares for Mr. Evans, 100,806 shares for Mr. Hytinen, 73,924 shares for Mr. Ram, 87,500 shares for Mr. Upchurch, 79,436 shares for Ms. Johnson and 80,982 shares for Mr. Faircloth.
| (5) | Calculated by multiplying $12.19, the closing market price of our common stock on December 28, 2018, by the number of performance shares granted, assuming achievement at the target level of performance. The market value of the shares of our common stock that can be issued on the vesting date, based on the Company’s achievement of certain performance targets for its 2019 fiscal year discussed on page 45, ranges from $0 (if the minimum number of shares, 0 shares, were to be received) to $5,120,117 for Mr. Evans, $1,228,825 for Mr. Hytinen, $901,134 for Mr. Ram, $1,066,625 for Mr. Upchurch, $968,325 for Ms. Johnson and $987,171 for Mr. Faircloth (if the maximum number of shares were to be received).
| (6) | This award was granted on December 11, 2018January 25, 2021 and is the portion of the 20192021 LTIP award that consists of restricted stock units. The restricted stock units vest 33%, 33% and 34% on the first anniversary, the second anniversary and the third anniversary, respectively, of the date of grant. grant date. | (7)(4) | This award was granted on December 12, 2017January 28, 2020 and is the portion of the 2018 LTIP award that consists of performance shares. This award will vest on the third anniversary of the grant date. | (8) | This award was granted on December 12, 2017 and is the portion of the 20182020 LTIP award that consists of restricted stock units. The restricted stock units vest 33%, 33% and 34% on the first anniversary, the second anniversary and the third anniversary, respectively, of the date of grant. grant date. | (9)(5) | This award wasThese stock options were granted on June 10, 2016. The restricted stock units vest 33%, 33%August 3, 2020 and 34%vested 100% on the first anniversary of the grant date. (6) These stock options were granted on August 3, 2020 and vest 100% on the second anniversary and the third anniversary, respectively, of the date of grant.
| (10) | This award wasgrant date. (7) These stock options were granted on December 13, 2016August 3, 2020 and is the portion of the 2017 LTIP award that consists of performance shares. This award will vest 100% on the third anniversary of the grant date.
| (11) | This award was granted on December 13, 2016 and is the portion of the 2017 LTIP award that consists of restricted stock units. The restricted stock units vest 33%, 33% and 34% on the first anniversary, the second anniversary and the third anniversary, respectively, of the date of grant.
| (12) | These stock options were granted on December 6, 2010, have fully vested and expire on the tenth anniversary of the date of grant.
| (13) | These stock options were granted on December 8, 2009, have fully vested and expire on the tenth anniversary of the date of grant.
| (14) | This award was granted on October 24, 2017. The restricted stock units vest 33%, 33% and 34% on the first anniversary, the second anniversary and the third anniversary, respectively, of the date of grant.
| (15) | This award was granted on July 24, 2018. The restricted stock units vest 33%, 33% and 34% on the first anniversary, the second anniversary and the third anniversary, respectively, of the date of grant.
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Option Exercises and Stock Vested
The following table sets forth certain information with respect to options exercised and stock awards vested during our 20182021 fiscal year with respect to the named executive officers. Option Exercises and Stock Vested in 2018Fiscal 2021 | | Option Awards | | Stock Awards | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized Upon Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | Gerald W. Evans, Jr. | | 436,364 | | $ | 6,387,452 | | 166,365 | | $ | 2,497,124 | Barry A. Hytinen | | — | | | — | | 23,752 | | | 377,082 | Jonathan Ram | | — | | | — | | — | | | — | W. Howard Upchurch | | 105,456 | | | 1,806,989 | | 43,798 | | | 648,355 | Joia M. Johnson | | — | | | — | | 42,939 | | | 636,862 | Michael E. Faircloth | | — | | | — | | 41,533 | | | 615,253 |
| | Option Awards | | | Stock Awards | Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | Stephen B. Bratspies | | | — | | | | — | | | | 32,406 | | | | $605,344 | | Michael P. Dastugue | | | — | | | | — | | | | — | | | | — | | M. Scott Lewis | | | — | | | | — | | | | 10,795 | | | | 185,090 | | Joseph W. Cavaliere | | | — | | | | — | | | | — | | | | — | | Jonathan Ram | | | — | | | | — | | | | 100,716 | | | | 1,751,316 | | Michael E. Faircloth | | | — | | | | — | | | | 85,287 | | | | 1,464,827 | |
Pension Benefits
Certain of Only one our named executive officers, participateMr. Faircloth, participates in the Pension Plan and the SERP.Plan. The Pension Plan is a frozen, defined benefit pension plan, intended to be qualified under Section 401(a) of the Internal Revenue Code, that provides the benefits that had accrued for our U.S.-based employees, including certain of our named executive officers, as of December 31, 2005 under a plan maintained by our former parent company prior to our becoming an independent public company. A participant’s total benefit payable pursuant to the Pension Plan consists of two parts: a pension benefit and a retirement benefit. Different optional forms of payment are available for each benefit. The Defined Benefit Component of the SERP is an unfunded deferred compensation plan that, in part, will provide the nonqualified supplemental pension benefits that had accrued for certain of our employees, including certain of our named executive officers, under a plan maintained by our former parent company. Normal retirement age is age 65 for purposes of both the Pension Plan and the Defined Benefit Component of the SERP. The normal form of benefits under the Pension Plan is a life annuity for single participants and a qualified joint and survivor annuity for married participants. The normal form of benefits under the SERP is a lump sum. Other than Mr. Evans, none of our named executive officers is currently eligible for early retirement under the Pension Plan or the SERP.Plan. With respect to the Defined Benefit Component of the SERP and the pension benefit under the Pension Plan, participants who have attained at least age 55 and completed at least 10 years of service are eligible for unreduced benefits at age 62; participants who choose to commence benefits between ages 55 and 61 are eligible for proportionally reduced benefits based on actuarial tables. With respect to the retirement benefit under the Pension Plan, participants who have attained at least age 55 and completed at least 10 years of service are eligible for unreduced benefits at age 65; participants who choose to commence benefits between ages 55 and 64 are eligible for proportionally reduced benefits based on actuarial tables. The onlyNone of our named executive officers to have any portion of their Pension Plan benefit determined under the retirement benefit are Mr. Evans and Mr. Upchurch. At the end of 2008, we provided all active participants in the SERP with an election to receive the accrued Defined Benefit Component of their SERP benefit in the form of a lump sum payment in 2009 or 2010. We offered this election as part of the required changes mandated by Section 409A, and eligible participants could make this election in addition to or instead of any election with respect to the Defined Contribution Component of the SERP. The value of the lump sum payment with respect to the Defined Benefit Component of the SERP was calculated based on the participant’s age 65 SERP Defined Benefit Component benefit and an interest rate of 5.25%. The lump sum amounts do not include the value of any early retirement subsidies and accordingly may be significantly less valuable than the amount the participant could have received if the participant had beenis currently eligible for early retirement (at least age 55 with 10 yearsunder the Pension Plan. The normal form of service) whenbenefits under the participant’s employment with us terminates. Any SERP participant who elected to receive this lump sum payment will not be entitled to any additional payments with respect to the Defined Benefit Component of the SERP. Mr. UpchurchPension Plan is a life annuity for single participants and Mr. Faircloth elected to receive a lump sum payment in 2009; none of the other executive officers elected to receive a lump sum payment from the Defined Benefit Component of the SERP.qualified joint and survivor annuity for married participants.
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The following table sets forth certain information with respect to the value of pension benefits accumulated by our named executive officers at the end of 2018.fiscal 2021. Pension Benefits — 2018Fiscal 2021 Name | | Plan Name | | Number of Years Credited Service (#) | | Present Value of Accumulated Benefit ($) (1) | | Payments During Last Fiscal Year ($) | Gerald W. Evans, Jr. | | Pension Plan | | 22.50 | | $ 626,309 | | $ — | | SERP | | 22.50 | | 1,205,902 | | — | Barry A. Hytinen (2) | | — | | — | | — | | — | Jonathan Ram (2) | | — | | — | | — | | — | W. Howard Upchurch | | Pension Plan | | 18.33 | | 332,742 | | — | Joia M. Johnson (2) | | — | | — | | — | | — | Michael E. Faircloth | | Pension Plan | | 8.58 | | 143,919 | | — |
Name | | Plan Name | | | Number of Years Credited Service (#) (1) | | | Present Value of Accumulated Benefit ($) (2) | | | Payments During Last Fiscal Year ($) | | Stephen B. Bratspies | | — | | | | — | | | | — | | | | — | | Michael P. Dastugue | | — | | | | — | | | | — | | | | — | | M. Scott Lewis | | — | | | | — | | | | — | | | | — | | Joseph W. Cavaliere | | — | | | | — | | | | — | | | | — | | Jonathan Ram | | — | | | | — | | | | — | | | | — | | Michael E. Faircloth | | Pension Plan | | | | 8.5833 | | | | 209,804 | | | | — | |
(1) | Note that the Pension Plan was frozen at the end of 2005, so any years of service after such date were not credited. Only Mr. Faircloth was eligible to accrue benefits under Pension Plan prior to December 2005. | (2) | Present values for the Pension Plan are computed as of December 29, 2018,January 2, 2022, using a discount rate of 4.42%2.91% and a healthy mortality table (the RP-2014 Employee and Healthy Annuitant Table Projected GenerationallySOA Pri-2012 mortality study projected generationally from 2012 with SOA Scale MP-2018)MP-2020). For the pension benefit, we assume 40%45% of males elect a single life annuity and 60%55% select a 50% joint and survivor annuity, and that 65%70% of females elect a single life annuity and 35%30% select a 50% joint and survivor annuity. For the retirement benefit, we assume that 60%50% of males elect a six-yearseven-year certain only annuity, 16%22.5% select a single life annuity and 24%27.5% select a 50% joint and survivor annuity, and that 60%50% of females elect a six-yearseven-year certain only annuity, 26%35% select a single life annuity and 14%15% select a 50% joint and survivor annuity. When calculating the six-yearseven-year certain only annuity, a 3.40%1.9% interest rate and the mortality prescribed under Revenue Ruling 2001-62 is assumed for converting the single life annuity benefit to an actuarial equivalent six-yearseven-year certain only annuity. If a participant has both a pension benefit and a retirement benefit, the payment form assumption is applied to each benefit amount separately, in all cases assuming the participant commences each portion of the benefit at the earliest unreduced age. Benefits under the Defined Benefit Component of the SERP are payable as a lump sum, which lump sum has been computed using the SERP’s interest rate of 4.00% (120% of the November 30-year Treasury rate for each year, rounded to the nearest 1/4%) and the mortality prescribed under Revenue Ruling 2001-62. Present values as of December 29, 2018 of the SERP lump sum are determined using a discount rate of 4.26%. For both the Pension Plan and the SERP, weWe also used the following assumptions: (i) the portion of the benefit that is payable as an unreduced benefit at age 62, the earliest unreduced commencement age under the Pension Plan for the pension benefit and the SERP, was valued at age 62 assuming the officer continues to work until that age in order to become eligible for unreduced benefits, (ii) the portion of the benefit that is payable as an unreduced benefit at age 65, the earliest unreduced commencement age under the Pension Plan for the retirement benefit, was valued at age 65 assuming the officer survives until that age in order to become eligible to receive the retirement benefit unreduced and (iii) the values of the benefits have been discounted assuming the officer continues to live until the assumed benefit commencement age (no mortality discount has been applied). All of the foregoing assumptions, except for the assumption that the officer lives and works until retirement, which we have used in light of SEC rules, are the same as those we use for financial reporting purposes under generally accepted accounting principles. | (2) | Mr. Hytinen, Mr. Ram and Ms. Johnson do not have any pension benefits because they were not eligible to accrue benefits prior to December 31, 2005.
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Nonqualified Deferred Compensation
The following table sets forth certain information with respect to contributions to and withdrawals from two nonqualified deferred compensation plans by our named executive officers during our 20182021 fiscal year, and the aggregate balance at fiscal year-end. These nonqualified deferred compensation plans are the Executive Deferred Compensation Plan and the SERP. Nonqualified Deferred Compensation — 2018Fiscal 2021 Name | | Plan | | Executive Contributions in Last FY ($) | | Registrant Contributions in Last FY ($) | | Aggregate Earnings in Last FY ($) (1) | | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($) | Gerald W. Evans, Jr. | | Executive Deferred | | $ — | | $ — | | $ — | | | $ — | | $ — | | | Compensation Plan | | | | | | | | | | | | | | SERP | | — | | — | | — | | | — | | — | Barry A. Hytinen | | Executive Deferred | | — | | — | | — | | | — | | — | | | Compensation Plan | | | | | | | | | | | | | | SERP | | — | | 22,279 | | (1,323 | ) | | — | | 20,956 | Jonathan Ram | | Executive Deferred | | — | | — | | — | | | — | | — | | | Compensation Plan | | | | | | | | | | | | | | SERP | | — | | 11,667 | | — | | | — | | 11,667 | W. Howard Upchurch | | Executive Deferred | | — | | — | | — | | | — | | — | | | Compensation Plan | | | | | | | | | | | | | | SERP | | — | | — | | — | | | — | | — | Joia M. Johnson | | Executive Deferred | | — | | — | | — | | | — | | — | | | Compensation Plan | | | | | | | | | | | | | | SERP | | — | | — | | — | | | — | | — | Michael E. Faircloth | | Executive Deferred | | — | | — | | — | | | — | | — | | | Compensation Plan | | | | | | | | | | | | | | SERP | | — | | — | | — | | | — | | — |
Name | | Plan | | Executive Contributions in Last FY ($) | | | Registrant Contributions in Last FY ($) | | | Aggregate Earnings in Last FY ($) (1) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at Last FYE ($) | | Stephen B. Bratspies | | Executive Deferred Compensation Plan | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | SERP | | | — | | | | 67,993 | (2) | | | (1,797) | | | | 693 | | | | 72,435 | (3) | Michael P. Dastugue | | Executive Deferred Compensation Plan | | | — | | | | — | | | | — | | | | — | | | | — | | | | SERP | | | — | | | | 8,400 | (2) | | | — | | | | — | | | | 8,400 | (3) | M. Scott Lewis | | Executive Deferred Compensation Plan | | | — | | | | — | | | | — | | | | — | | | | — | | | | SERP | | | — | | | | 67,225 | (2) | | | — | | | | 12,793 | | | | 62,960 | (3) | Joseph W. Cavaliere | | Executive Deferred Compensation Plan | | | — | | | | — | | | | — | | | | — | | | | — | | | | SERP | | | — | | | | 13,349 | (2) | | | — | | | | — | | | | 13,349 | (3) | Jonathan Ram | | Executive Deferred Compensation Plan | | | — | | | | — | | | | — | | | | — | | | | — | | | | SERP | | | — | | | | 45,968 | (2) | | | 333 | | | | 46,065 | | | | 40,266 | (3) | Michael E. Faircloth | | Executive Deferred Compensation Plan | | | — | | | | — | | | | — | | | | — | | | | — | | | | SERP | | | — | | | | 47,898 | (2) | | | — | | | | 53,471 | | | | 30,074 | (3) |
(1) | No portion of these earnings were included in the Summary Compensation Table because neither the Executive Deferred Compensation Plan nor the SERP provides for “above-market” or preferential earnings as defined in applicable SEC rules. | (2) | This amount represents Company contributions to the SERP during 2021 and is also included in the “All Other Compensation” column of the Summary Compensation Table on page 53. | (3) | This amount represents the SERP balance as of January 2, 2022, after taking into account the distributions, described in the preceding footnote, made with respect to the named executive officer’s account in 2021. Although amounts in this column were reported as compensation for 2021 in the Summary Compensation Table on page 53, no amounts in this column were reported as compensation for prior fiscal years in our summary compensation tables, other than $6,239 for Mr. Bratspies. |
Under the Executive Deferred Compensation Plan, a group of approximately 240 U.S.-based employees, generally at the director level and above, including our named executive officers, may defer receipt of cash and equity compensation. This benefit offers tax advantages to eligible employees, permitting them to defer payment of their compensation and defer taxation on that compensation until a future date. The amount payable to participants will be payable either on the withdrawal date elected by the participant or upon the occurrence of certain events as provided under the Executive Deferred Compensation Plan. A participant may designate one or more beneficiaries to receive any portion of the obligations payable in the event of death; however, neither participants nor their beneficiaries may transfer any right or interest in the Executive Deferred Compensation Plan. The SERP is a nonqualified supplemental retirement plan that provides two types of benefits: (1) a “Defined Contribution Component” and (2) a “Defined Benefit Component.” The Defined Contribution Component of the SERP provides for employer matching and discretionary contributions to U.S.-based employees whose compensation exceeds a threshold set by the Internal Revenue Code. We distribute the accrued vested portion of the Defined Contribution Component of the SERP directly to participants in cash on an annual basis. Any unvested portions of the Defined Contribution Component are credited to the participant’s SERP account and distributed to the participant upon vesting. Each of our named executive officers receive benefits under this portion of the SERP. The “Defined Benefit Component” of the SERP provides benefits consisting of those supplemental retirement benefits that had been accrued as of December 31, 2005 under a plan maintained by our former parent company prior to our becoming an independent public company. None of our executive officers has an unpaid benefit under this portion of the SERP. For more detailed information regarding these plans, see “Defined Contribution Plans” and “Benefit Plans and Arrangements” on pages 49 and 50, respectively.
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Potential Payments upon Termination or Change in Control
The termination benefits provided to our named executive officers, upon their voluntary termination of employment due to resignation or retirement, or termination due to death or total and permanent disability, do not discriminate in scope, terms or operation in favor of these officers compared to the benefits offered to all salaried employees. The following describes the potential payments to these officers upon an involuntary severance or a termination of employment in connection with a change in control. The information presented in this section is computed assuming that the triggering event took place on December 28, 2018,31, 2021, the last business day of our 20182021 fiscal year, and that the value of a share of our common stock is $12.19,$16.72, the closing price per share of our common stock on December 28, 2018.31, 2021. Termination or Change in Control Payments | | | | Voluntary Termination | | Involuntary Termination | | | | | Resignation (1) | | Retirement (1) | | For Cause (1) | | Not For Cause | | Change in Control | Gerald W. Evans, Jr. | | Severance | | $ — | | $ — | | $ — | | $ 2,200,000 | (2) | | $ 8,250,000 | (3) | | | LTIP | | — | | — | | — | | — | | | 10,153,807 | (4) | | | Benefits and perquisites | | — | | — | | — | | 108,729 | (5) | | 607,936 | (6) | | | Tax gross-up/reduction | | — | | — | | — | | — | | | — | (7) | | | Total | | — | | — | | — | | 2,308,729 | | | 19,011,743 | | Barry A. Hytinen | | Severance | | — | | — | | — | | 600,000 | (2) | | 2,200,000 | (3) | | | LTIP | | — | | — | | — | | — | | | 2,092,426 | (4) | | | Benefits and perquisites | | — | | — | | — | | 21,144 | (5) | | 159,270 | (6) | | | Tax gross-up/reduction | | — | | — | | — | | — | | | — | (7) | | | Total | | — | | — | | — | | 621,144 | | | 4,471,696 | | Jonathan Ram | | Severance | | — | | — | | — | | 500,000 | (2) | | 1,750,000 | (3) | | | LTIP | | — | | — | | — | | — | | | 1,744,145 | (4) | | | Benefits and perquisites | | — | | — | | — | | 27,741 | (5) | | 125,984 | (6) | | | Tax gross-up/reduction | | — | | — | | — | | — | | | — | (7) | | | Total | | — | | — | | — | | 527,741 | | | 3,620,130 | | W. Howard Upchurch | | Severance | | — | | — | | — | | 1,140,000 | (2) | | 2,218,346 | (3) | | | LTIP | | — | | — | | — | | — | | | 2,092,621 | (4) | | | Benefits and perquisites | | — | | — | | — | | 22,930 | (5) | | 128,285 | (6) | | | Tax gross-up/reduction | | — | | — | | — | | — | | | — | (7) | | | Total | | — | | — | | — | | 1,162,930 | | | 4,439,251 | | Joia M. Johnson | | Severance | | — | | — | | — | | 1,008,333 | (2) | | 2,194,555 | (3) | | | LTIP | | — | | — | | — | | — | | | 1,896,130 | (4) | | | Benefits and perquisites | | — | | — | | — | | 18,205 | (5) | | 140,693 | (6) | | | Tax gross-up/reduction | | — | | — | | — | | — | | | — | (7) | | | Total | | — | | — | | — | | 1,026,538 | | | 4,231,378 | | Michael E. Faircloth | | Severance | | — | | — | | — | | 1,120,000 | (2) | | 2,011,099 | (3) | | | LTIP | | — | | — | | — | | — | | | 1,933,797 | (4) | | | Benefits and perquisites | | — | | — | | — | | 27,864 | (5) | | 152,650 | (6) | | | Tax gross-up/reduction | | — | | — | | — | | — | | | — | (7) | | | Total | | — | | — | | — | | 1,147,864 | | | 4,097,546 | |
| | | | Voluntary Termination (1) | | | Involuntary Termination (1) | | | | | Retirement (2) | | | Death/Disability | | | Not For Cause | | | Change in Control | Stephen B. Bratspies | | Severance | | | — | | | | | | | | 1,100,000 | (3) | | 8,250,000 | (4) | | | LTIP (5) | | | — | | | | 11,284,579 | | | | — | | | 11,284,579 | | | | Benefits and perquisites | | | — | | | | | | | | 6,500 (6) | | | 378,675 | | | | Total | | | — | | | | 11,284,579 | | | | 1,106,500 | | | 19,913,254 | | Michael P. Dastugue | | Severance | | | — | | | | | | | | 750,000 | (3) | | 3,000,000 | (4) | | | LTIP (5) | | | — | | | | 1,193,708 | | | | — | | | 1,193,708 | | | | Benefits and perquisites | | | — | | | | | | | | 56,150 | | | 238,191 | | | | Total | | | — | | | | 1,193,708 | | | | 806,150 | | | 4,431,899 | | M. Scott Lewis | | Severance | | | — | | | | | | | | 375,000 | (3) | | 375,000 | (4) | | | LTIP (5) | | | 393,923 | | | | 393,923 | | | | — | | | 393,923 | | | | Benefits and perquisites | | | — | | | | | | | | 12,795 | (6) | | 12,795 | | | | Total | | | 393,923 | | | | 393,923 | | | | 387,795 | | | 781,718 | | Joseph W. Cavaliere | | Severance | | | — | | | | | | | | 700,000 | (3) | | 2,800,000 | (4) | | | LTIP (5) | | | — | | | | 2,171,176 | | | | — | | | 2,171,176 | | | | Benefits and perquisites | | | — | | | | | | | | 54,000 | (6) | | 217,558 | | | | Total | | | — | | | | 2,171,176 | | | | 754,000 | | | 5,188,733 | | Jonathan Ram | | Severance | | | — | | | | | | | | 650,000 | (3) | | 2,275,000 | (4) | | | LTIP (5) | | | — | | | | 2,634,303 | | | | — | | | 2,634,303 | | | | Benefits and perquisites | | | — | | | | | | | | 32,650 | (6) | | 193,329 | | | | Total | | | — | | | | 2,634,303 | | | | 682,650 | | | 5,102,632 | | Michael E. Faircloth | | Severance | | | — | | | | | | | | 1,260,000 | (3) | | 2,205,000 | (4) | | | LTIP (5) | | | 2,356,617 | | | | 2,356,617 | | | | — | | | 2,356,617 | | | | Benefits and perquisites | | | — | | | | | | | | 27,864 | (6) | | 152,268 | | | | Total | | | 2,356,617 | | | | 2,356,617 | | | | 1,287,864 | | | 4,713,885 | |
(1) | A named executive officer who is terminated by us for cause, or who voluntarily resigns (other than at our request) or retires,, will receive no severance benefit. | (2) | IfUnder the terms of all outstanding stock awards granted to employees prior to January 1, 2020, including those granted to our named executive officers, if the employee ceases active employment with us on or after attaining age 50 or older and completing at least 10 years of service, the outstanding stock award will continue to vest in accordance with the vesting schedule set forth in the applicable award agreement, so long as the employee has entered into a written release of claims against us and complies with restrictive covenants relating to non-competition, non-solicitation, confidentiality and non-disparagement through the vesting period. For stock awards granted after January 1, 2020, if an employee who ceases active employment with us on or after attaining age 50 or older and completing at least 10 years of service (i) provides us with a least six months’ prior written notice of his or her intended retirement date, (ii) remains actively employed during such notice period, (iii) completes certain transition duties and responsibilities and (iv) enters into a written release of claims against us, all restrictions on the outstanding equity awards requiring continued employment through a vesting date will lapse upon the employee’s retirement and the award will be paid to the employee not later than two and one-half months following the end of the calendar year in which he or she retires. The employee is required to cooperate with us regarding matters arising out of his or her employment and continue to comply with restrictive covenants relating to non-competition, non-solicitation, confidentiality and non-disparagement through the third anniversary of the grant date of the award. Mr. Lewis and Mr. Faircloth have attained age 50 or older and have completed at least 10 years of service. |
Table of Contents | Compensation Discussion and Analysis |
(3) | For named executive officers with a Severance Agreement (each named executive officer other than Mr. Lewis), if the employment of athe named executive officer is terminated by us for any reason other than for cause (as defined in the Severance Agreements), or if such an officer terminates his or her employment at our request, we will pay that officer benefits for a period of 12 to 24 months depending on his or her position and combined continuous length of service with us and with our former parent company. The monthly severance benefit that we would pay to each such officer is based on the officer’s base salary (and, in limited cases, AIP amounts), divided by 12. To receive these payments, the named executive officer must sign an agreement that prohibits, among other things, the officer from working for our competitors, soliciting business from our customers, attempting to hire our employees and disclosing our confidential information. The named executive officer also must agree to release any claims against us. Payments terminate if the terminated named executive officer becomes employed by one of our competitors. The terminated named executive officer also would receive a pro-rated payment under any incentive plans applicable to the fiscal year in which the termination occurs based on actual full fiscal year performance. We have not estimated a value for these incentive plan payments because the named executive officer would be entitled to such payments if employed by us on the last day of our fiscal year, regardless of whether termination occurred. Pursuant to the Hanesbrands Inc. Salaried Employee Severance Pay Plan, if Mr. Lewis is terminated for any reason other than for cause (as defined in the Plan), he is entitled to receive a severance benefits in an amount equal to four weeks of base salary for each year of service, with a minimum severance period of 26 weeks and a maximum severance period of 52 weeks. |
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Compensation Discussion and Analysis | |
(3) | IncludesFor named executive officers with a Severance Agreement, amounts shown in the “Change in Control” column in the table above include both involuntary Company-initiated terminations of employment and terminations by the named executive officer due to “good reason” as defined in the officer’s Severance Agreement. No severance payments would be made under the Severance Agreement upon a change in control if the named executive officer continues to be employed by us. The named executive officer receives a lump sum payment equal to two times (or three times in the case of Mr. Evans)Bratspies) his or her cash compensation, consisting of base salary, the greater of his or her current target or average actual AIP amounts over the prior three years and the matching contribution to the defined contribution plan in which the named executive officer is participating (the amount of the contribution to the defined contribution plan is reflected in “Benefits and perquisites”). To receive these payments, the named executive officer must sign an agreement that prohibits, among other things, the officer from working for our competitors, soliciting business from our customers, attempting to hire our employees and disclosing our confidential information. The named executive officer also must agree to release any claims against us. Payments terminate if the terminated named executive officer becomes employed by one of our competitors. Because we have not entered in to a Severance Agreement with Mr. Lewis, he receives no incremental benefits beyond those described in footnote 3 in the event of a change in control. | (4)(5) | Under the terms of allAll outstanding stock awards granted to employees prior to January 1, 2019, including those granted to our named executive officers, if the employee ceases active employment with us on or after attaining age 50 or older and completing at least 10 years of service, the outstanding stock award will continue to vest in accordance with the vesting schedule set forth in the applicable award agreement, so long as the employee has entered into a written release of claims against us and complies with restrictive covenants relating to non-competition, non-solicitation, confidentiality and non-disparagement through the vesting period. In the event of retirement of any our named executive officers, other than Mr. Hytinen and Mr. Ram, the executive’s stock awards would continue to vest in accordance with the vesting schedule set forth in the applicable award agreement. Outstanding stock awards granted prior to January 1, 2019 fully vest upon a change in control regardless of whether a termination of employment occurs. For stock awards granted after January 1, 2019, vesting of awards will accelerate only if there is a qualifying termination within two years after the change in control or if the surviving entity does not provide qualifying replacement awards. In addition, outstanding stock awards will fully vest upon the death or permanent disability of the participant. RSUs and PSAs are valued based upon the number of unvested units multiplied by the closing price of our common stock on December 28, 2018. 31, 2021. | (5)(6) | Reflects executive life insurancehealth and welfare benefits continuation ($102,22949,650 for Mr. Evans, $14,644Dastugue, $6,295 for Mr. Hytinen, $21,241Lewis, $47,500 for Mr. Cavaliere, $26,150 for Mr. Ram $16,430 for Mr. Upchurch, $11,705 for Ms. Johnson and $21,364 for Mr. Faircloth) and outplacement services ($6,500 for each of the officers). The terminated named executive officer’s eligibility to participate in our medical and dental plans would continue for the same number of months for which he or she is receiving severance payments. However, these continued welfare benefits are available to all salaried employees and do not discriminate in scope, terms or operation in favor of our named executive officers compared to the involuntary termination benefits offered to all salaried employees. The terminated named executive officer’s participation in all other benefit plans would cease as of the date of termination of employment. officers). | (6)(7) | Reflects health and welfare benefits continuation ($242,72676,498 for Mr. Evans, $74,038Bratspies, $163,291 for Mr. Hytinen, $107,818Dastugue, $24,202 for Mr. Lewis, $141,709 for Mr. Cavaliere, $96,955 for Mr. Ram $37,026 for Mr. Upchurch, $47,370 for Ms. Johnson and $64,252$62,153 for Mr. Faircloth) for three years with respect to Mr. Evans,Bratspies, one year with respect to Mr. Lewis and two years with respect to Mr. Hytinen, Mr. Ram, Mr. Upchurch, Ms. Johnson and Mr. Faircloth,the remaining named executive officers; scheduled company matching contributions to our defined contribution plans calculated based on current base salary and target AIP amounts ($358,71076,126 for Mr. Evans, $57,942Bratspies, $30,000 for Mr. Hytinen, $0Dastugue, $28,000 for Mr. Cavaliere, $41,655 for Mr. Ram $84,759and $41,807 for Mr. Upchurch, $86,823 for Ms. Johnson and $81,898 for Mr. Faircloth),; outplacement services ($6,500 for each of theour named executive officers); and accelerated vesting of SERP benefits ($20,79067,299 for Mr. HytinenBratspies, $8,400 for Mr. Dastugue, $13,349 for Mr. Cavaliere, and $11,667$6,565 for Mr. Ram). In computing the value of continued participation in our medical, dental and executive insurance plans, we have assumed that the current cost to us of providing these plans will increase annually at a rate of 7%. | (7) | In the event that any payments made in connection with a change in control would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, we will make tax equalization payments for Mr. Upchurch and Ms. Johnson with respect to the officer’s compensation for all federal, state and local income and excise taxes, and any penalties and interest, but only if the total payments made in connection with a change in control exceed 330% of such officer’s “base amount” (as determined under Section 280G(b) of the Internal Revenue Code and which consists of the average total taxable compensation we paid to the named executive officer for the five calendar years ending prior to the change in control). Otherwise, the payments made to such officer in connection with a change in control that are classified as parachute payments will be reduced so that the value of the total payments to such officer is one dollar ($1) less than the maximum amount such officer may receive without becoming subject to the tax imposed by Section 4999 of the Internal Revenue Code. Beginning in 2011, we eliminated excise tax gross-ups with respect to new or amended severance or change in control agreements, and as a result no such provision is contained in the Severance Agreements for Mr. Evans, Mr. Hytinen, Mr. Ram or Mr. Faircloth.
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Table of Contents Overview Hanesbrands is a large multinational apparel company, manufacturing and marketing innerwear and activewear primarily in the Americas, Europe, Australia and Asia/Pacific. We conduct our business globally and have nearly 68,000over 59,000 employees, over 88% of whom (approximately 60,000)52,000) are located outside the United States. Over 78%83% of our workforce (approximately 53,00049,000 employees) is employed in our large-scale supply chain facilities located primarily in Central America, the Caribbean Basin and Asia. Our various compensation programs include the payment of market-based wages and the provision of competitive employee benefits. The programs vary from region to region and among our various consolidated subsidiaries in each region, from country to country. The vast majority of our employees (approximately 77%84%) are compensated on an hourly basis. Methodology Securities and Exchange Commission rules allow us to identify our median employee once every three years unless, during our last completed fiscal year, there has been a change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change in our pay ratio disclosure. Accordingly, because there have been no such changes in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change in our pay ratio disclosure, our 2018 Chief Executive Officer (“CEO”) pay ratio is calculated utilizing the same median employee identified in 2017. In determining that it was still appropriate to utilize our 2017 median employee for this disclosure for the 2018 fiscal year, we considered the minimal changes to our global employee population and compensation programs during 2018, as well as the absence of a material change in that employee’s job description or compensation during 2018.
To identify our global median employee, in 2017, we utilized the following methodology: ● | We determined that, as of October 31, 20172021 (the “Determination Date”), our employee population consisted of approximately 67,20056,000 individuals (excluding Gerald W. Evans, Jr.,Stephen B. Bratspies, our CEO, but including full-time, part-time, seasonal and temporary employees) working at Hanesbrands and its consolidated subsidiaries. Given the sizevariety of actions taken around the world in response to the COVID-19 global pandemic, including temporary retail store, office and compositionfacility closures, furloughs and reduced hours, we collected and analyzed payroll data for our entire employee population as of our workforce, we elected to use stratified statistical samplingthe Determination Date in order to identify the global median employee. | ● | In order to consistently measure the compensation of theour employees inother than our sample,CEO, we utilized total cash compensation (including regular pay, overtime, bonuses, incentives, allowances and paid time off, but excluding amounts set aside on behalf of the employee, such as retirement contributions, pension, provident fund or superannuation) for the 10-month period ending October 31, 2017.2021. Pay was annualized on a 10-month basis for permanent employees included in the sample who were hired in 20172021 but did not work for us or our consolidated subsidiaries for the entire 10-month period. | ● | For purposes of this analysis, we converted all cash compensation paid in foreign currency to U.S. dollars using the applicable exchange rate on December 31, 2017.2021. We did not make any cost-of-living adjustments in identifying the global median employee. |
Calculation Our global median employee identified on the Determination Date is an equipmenta dry cleaning operator located in one of our supply chain facilities in Honduras,the Dominican Republic, whose 20182021 total cash compensation was $5,880.$6,179. We identified and calculated the elements of that employee’s compensation for 20182021 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $6,348. The difference between the median employee’s cash compensation and the median employee’s annual total compensation represents the estimated value of the employee’s life insurance benefits, transportation benefits and meal subsidies.$7,055. The annual total compensation of Mr. Evans,Bratspies, our CEO, for the 20182021 fiscal year was $8,832,708,$11,031,249, which is the amount reported for 20182021 in the “Total Compensation” column of our Summary Compensation Table provided on page 47.53. Based on this information, for the 20182021 fiscal year, the ratio of the annual total compensation of our CEO to the median annual total compensation of all employees other than the CEO was 1,3921,564 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized above.
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Table of Contents Share Ownership of Major Stockholders, Management and Directors The following table sets forth information, as of February 19, 2019,15, 2022, regarding beneficial ownership by (i) each person who is known by us to beneficially own more than 5% of our common stock, (ii) each director, director nominee and named executive officer and (iii) all of our directors, director nominees and executive officers as a group. The address of each director and executive officer shown in the table below is c/o Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North Carolina 27105. On February 19, 201915, 2022 there were 361,470,810348,649,757 shares of our common stock outstanding. | | Amount and Nature of Beneficial Ownership | | Other (1) | Name and Address of Beneficial Owner | | Beneficial Ownership of Our Common Stock (2) | | Percentage of Class | | Restricted Stock Units | | Stock Equivalent Units in SERP and Deferred Compensation Plans | | Total | Vanguard Group, Inc.(3) | | 39,311,498 | | 10.88 | % | | — | | — | | 39,311,488 | BlackRock, Inc.(4) | | 24,750,735 | | 6.85 | | | — | | — | | 24,750,735 | State Street Corporation(5) | | 19,490,049 | | 5.39 | | | — | | — | | 19,490,049 | Massachusetts Financial Services Company(6) | | 18,786,344 | | 5.20 | | | — | | — | | 18,786,344 | Gerald W. Evans, Jr.(7) | | 1,269,199 | | * | | | 622,949 | | — | | 1,892,148 | Richard A. Noll | | 993,437 | | * | | | 46,367 | | 227,826 | | 1,267,630 | W. Howard Upchurch | | 428,609 | | * | | | 127,917 | | — | | 556,526 | Joia M. Johnson(8) | | 387,299 | | * | | | 115,830 | | — | | 503,129 | Michael E. Faircloth | | 167,032 | | * | | | 118,147 | | — | | 285,179 | Ronald L. Nelson(9) | | 155,012 | | * | | | 9,409 | | 145,521 | | 309,942 | Jessica T. Mathews(10) | | 133,180 | | * | | | 9,409 | | 33,740 | | 176,329 | Barry A. Hytinen | | 45,064 | | * | | | 121,248 | | 236 | | 166,548 | David V. Singer | | 35,263 | | * | | | 9,409 | | — | | 44,672 | Ann E. Ziegler(11) | | 34,217 | | * | | | 9,409 | | 105,601 | | 149,227 | James C. Johnson(12) | | 24,913 | | * | | | 9,409 | | 130,151 | | 164,473 | Franck J. Moison | | 16,463 | | * | | | 9,409 | | — | | 25,872 | Robert F. Moran | | 9,060 | | * | | | 9,409 | | 24,956 | | 43,425 | Bobby J. Griffin | | — | | * | | | 9,409 | | 257,330 | | 266,739 | Jonathan Ram | | — | | * | | | 106,118 | | — | | 106,118 | Geralyn R. Breig | | — | | * | | | 12,636 | | — | | 12,636 | All directors, director nominees and executive | | 3,746,552 | | 1.04 | | | | | | | | officers as a group (18 persons)(7) (13) | | | | | | | | | | | |
| Amount and Nature of Beneficial Ownership | | Other (1) | Name and Address of Beneficial Owner | Beneficial Ownership of Our Common Stock | Percentage of Class | | Restricted Stock Units | Stock Equivalent Units in SERP and Deferred Compensation Plans | Total | BlackRock, Inc. (2) | 36,584,207 | 10.49% | | — | — | 36,584,207 | Vanguard Group, Inc. (3) | 34,184,652 | 9.80% | | — | — | 34,184,652 | Diamond Hill Capital Management, Inc. (4) | 21,912,308 | 6.28% | | — | — | 21,912,308 | Michael E. Faircloth | 283,845 | * | | 154,853 | — | 438,698 | Ronald L. Nelson (5) | 241,238 | * | | 9,515 | 194,089 | 444,842 | Stephen B. Bratspies | 142,795 | * | | 837,743 | 473 | 981,011 | Jonathan Ram | 110,016 | * | | 182,539 | 640 | 293,195 | Joseph W. Cavaliere | 41,930 | * | | 166,340 | — | 208,270 | James C. Johnson (6) | 40,714 | * | | 9,515 | 148,515 | 198,744 | M. Scott Lewis (4) | 38,627 | * | | 29,111 | — | 67,738 | Robert F. Moran | 34,024 | * | | 19,118 | 23,014 | 76,156 | Franck J. Moison | 33,202 | * | | 9,515 | — | 42,717 | Ann E. Ziegler (7) | 30,261 | * | | 9,515 | 118,602 | 158,378 | Cheryl K. Beebe | 11,250 | * | | 9,515 | 9,603 | 30,368 | Bobby J. Griffin | — | * | | 9,515 | 342,338 | 351,853 | Michael P. Dastugue | — | * | | 132,781 | — | 132,781 | Geralyn R. Breig | — | * | | 9,515 | 34,212 | 43,727 | William S. Simon | — | * | | 14,099 | — | 14,099 | All directors, director nominees and executive officers as a group (18 persons) (4) (8) | 1,023,152 | * | | | | |
| | | * | | Less than 1%. | (1) | | While the amounts in the “Other” column for restricted stock units and stock equivalent units in our SERP and deferred compensation plans do not represent a right of the holder to receive our common stock within 60 days, these amounts are being disclosed because we believe they further our goal of aligning senior management and stockholder interests. The value of the restricted stock units fluctuates based on changes in Hanesbrands’ stock price. Similarly, the value of stock equivalent units held in the SERP, the Executive Deferred Compensation Plan and the Director Deferred Compensation Plan fluctuates based on changes in Hanesbrands’ stock price. | (2) | Beneficial ownership is determined under the rules and regulations of the SEC, which provide that a person is deemed to beneficially own all shares of common stock that such person has the right to acquire within 60 days. Although shares that a person has the right to acquire within 60 days are counted for the purposes of determining that individual’s beneficial ownership, such shares generally are not deemed to be outstanding for the purpose of computing the beneficial ownership of any other person. Share numbers in this column include shares of common stock subject to options exercisable within 60 days of February 19, 2019 as follows: |
| Name | | Number of Options | | Richard A. Noll | | 276,276 | | Gerald W. Evans, Jr. | | 241,512 | | W. Howard Upchurch | | 105,188 | | Ann E. Ziegler | | 22,572 | | Michael E. Faircloth | | 6,132 | | All directors, director nominees and executive officers as a group (18 persons) | | 651,680 |
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(3) | Information in this table and footnote regarding this beneficial owner is based on Amendment No. 69 to Schedule 13G filed February 11, 2019 by The Vanguard Group, Inc. (“Vanguard”) with the SEC. Vanguard may be deemed to beneficially own 39,311,498 shares of our common stock. Vanguard’s beneficial ownership includes (i) 340,352 shares of our common stock beneficially owned through Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard and an investment manager of collective trust accounts and (ii) 285,312 shares of our common stock beneficially owned through Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard and an investment manager of Australian investment offerings. Vanguard’s address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. | (4) | Information in this table and footnote regarding this beneficial owner is based on Amendment No. 7 to Schedule 13G filed February 4, 2019January 29, 2021 by BlackRock, Inc. (“BlackRock”) with the SEC. BlackRock, in its capacity as a parent holding company, may be deemed to beneficially own 24,750,73536,584,207 shares of our common stock which are held of record by certain of its subsidiaries. BlackRock’s address is 55 East 52nd Street, New York, New York 10055. | (5)(3) | | Information in this table and footnote regarding this beneficial owner is based on Amendment No. 9 to Schedule 13G filed February 14, 201910, 2021, by State Street CorporationThe Vanguard Group, Inc. (“State Street”Vanguard”) with the SEC. Certain direct and indirect subsidiaries of State StreetVanguard may be deemed to beneficially own 19,490,04934,184,652 shares of our common stock. State Street’sVanguard’s address is One Lincoln Street, Boston, Massachusetts 02111.100 Vanguard Blvd., Malvern, Pennsylvania 19355. | (6)(4) | | Information in this table and footnote regarding this beneficial owner is based on Amendment No. 1 to Schedule 13G, as amended, filed February 13, 20199, 2022 by Massachusetts Financial Services CompanyDiamond Hill Capital Management, Inc. (“MFS”Diamond Hill”) with the SEC. MFSDiamond Hill may be deemed to beneficially own 18,786,34421,912,308 shares of our common stock. MFS’Diamond Hill’s address is 111 Huntington Avenue, Boston, Massachusetts 02199.325 John H. McConnell Blvd., Suite 200, Columbus, OH 43215. | (7)(5) | Includes ownership through interests in the 401(k) Plan. | (8) | Includes 387,299 shares of common stock held by a trust. | (9) | Includes 5,000 shares of common stock held by a trust of which Mr. Nelson’s wife is the trustee. Mr. Nelson disclaims beneficial ownership of the trust. | (10)(6) | Includes 2,096 shares of common stock held by a trust and 800 shares of common stock held by Ms. Mathews’ spouse. | (11) | Includes 7,600 shares of common stock held by a trust. | (12) | Includes 24,913 shares of common stock held by a trust. | (13)(7) | | Includes David22,912 shares of common stock held by a trust. | (8) | | Includes: Greg L. Bortolussi, our President and Managing Director, Hanes Australasia, and M. Scott Lewis,Hall, our Chief AccountingConsumer Officer; Kristin L. Oliver, our Chief Human Resources Officer; and Tracy M. Preston, our General Counsel, Corporate Secretary and Chief Compliance Officer. |
HANESBRANDS INC. | 63 Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers, certain of our other officers and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership of these securities with the SEC. Directors, officers and greater than 10% beneficial owners are required by applicable regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on review of the copies of such reports furnished to us and written representations that no other reports were required, during our 2018 fiscal year, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were fulfilled.
Table of Contents | Questions and Answers About the Annual Meeting and Voting |
Questions and Answers About the Annual Meeting and VotingWill I receive a printed copy of this Proxy Statement?
You will not receive a printed copy of this Proxy Statement or our Annual Report on Form 10-K in the mail unless you request a printed copy. As permitted by the SEC, we are delivering our Proxy Statement and Annual Report via the Internet. On March 11, 2019,14, 2022, we mailed to our stockholders a notice of annual meeting and Internet availability of proxy materials containing instructions on how to access our Proxy Statement and Annual Report and authorize a proxy to vote their shares. If you wish to request a printed copy of this Proxy Statement and our Annual Report, you should follow the instructions included in the notice of annual meeting and Internet availability of proxy materials. The notice of annual meeting and Internet availability of proxy materials is not a proxy card or ballot. Who is entitled to vote at the Annual Meeting?
If you were a stockholder of Hanesbrands at the close of business on February 19, 201915, 2022 (the “Record Date”), you are entitled to notice of, and to vote at, the Annual Meeting. Each share of Hanesbrands common stock outstanding at the close of business on the Record Date has one vote on each matter that is properly submitted to a vote at the Annual Meeting, including shares: ● | | held directly in your name as the stockholder of record; or | ● | | held for you in an account with a broker, bank or other nominee. |
Shares held in an account with a broker, bank or other nominee may include shares: ● | | represented by your interest in the HBI Stock Fund in the 401(k) Plan; or | ● | | credited to your account in the Hanesbrands Inc. Employee Stock Purchase Plan of 2006. |
On the Record Date, there were 361,470,810348,649,757 shares of Hanesbrands common stock outstanding and entitled to vote at the Annual Meeting. Common stock is the only outstanding class of voting securities of Hanesbrands. Who may attend the Annual Meeting?
Only In order to allow for greater participation by all of our stockholders, who owned sharesregardless of Hanesbrandstheir geographic location, the Annual Meeting will be held in a virtual only meeting format. Stockholders will not be able to physically attend the Annual Meeting. If you are a registered stockholder or beneficial owner of our common stock as ofat the close of business on February 15, 2022, you may attend the Record Datevirtual Annual Meeting by visiting www.virtualshareholdermeeting.com/HBI2022. You will need the 16-digit control number found on your Notice of Internet Availability, your proxy card or on the instructions that accompany your proxy materials to participate in the Annual Meeting and vote your shares electronically. If your shares are held in the name of a bank, broker or other holder of record, you should follow the instructions provided by your bank, broker or other holder of record to be able to participate in the meeting. You may log into www.virtualshareholdermeeting.com/HBI2021 beginning at 8:45 a.m. Eastern time on April 26, 2022. The Annual Meeting will begin promptly at 9:00 a.m. Eastern time on April 26, 2022. If you experience any technical difficulties during the meeting, a toll free number will be entitled to attendavailable on our virtual shareholder meeting site for assistance. This year’s stockholders question and answer session will include questions submitted in advance of the Annual Meeting. An admission ticket (or other proofMeeting and questions submitted live during the virtual meeting. You may submit a question in advance of stock ownership) and some form of government-issued photo identification (such as a valid driver’s license or passport) willthe meeting at www.proxyvote.com after logging in with your control number. Questions may be required for admission tosubmitted during the Annual Meeting.Meeting through www.virtualshareholdermeeting.com/HBI2022. ● | If your shares of Hanesbrands common stock are registered in your name and you requested and received your proxy materials by mail, an admission ticket is attached to your proxy card. Your admission ticket will serve as verification of your ownership. | ● | If your shares of Hanesbrands common stock are registered in your name and you received your proxy materials electronically, your notice of annual meeting and Internet availability of proxy materials will serve as your admission ticket and as verification of your ownership. | ● | If your shares of Hanesbrands common stock are held in a bank or brokerage account or by another nominee and you wish to attend the Annual Meeting and vote your shares in person, contact your bank, broker or other nominee to obtain a written legal proxy in order to vote your shares at the Annual Meeting. If you do not obtain a legal proxy from your bank, broker or other nominee, you will not be entitled to vote your shares of Hanesbrands common stock in person at the Annual Meeting, but you may still attend the Annual Meeting if you bring a recent bank or brokerage statement or similar evidence of ownership showing that you owned the shares on the Record Date. |
No cameras, recording devices or large packages will be permitted in the meeting room. Bags will be subject to a search.64 |
Table of Contents | Questions and Answers About the Annual Meeting and Voting |
How many shares of Hanesbrands common stock must be present to hold the Annual Meeting?
The presence, in person or by proxy, of stockholders entitled to cast a majority of all the votes entitled to be cast at the Annual Meeting constitutes a quorum for the transaction of business. Your shares of Hanesbrands common stock are counted as present at the Annual Meeting if: | ● | you are present in person at the Annual Meeting and your shares are registered in your name or you have a proxy from your bank, broker or other nominee to vote your shares; or | | ● | you have properly executed and submitted a proxy card, or authorized a proxy over the telephone or the Internet, prior to the Annual Meeting. |
Abstentions and broker non-votes are counted for purposes of determining whether a quorum is present at the Annual Meeting. If a quorum is not present when the Annual Meeting is convened, the Annual Meeting may be adjourned by the chairman of the meeting. What are broker non-votes?
If you have shares of Hanesbrands common stock that are held by a broker, you may give the broker voting instructions, and the broker must vote as you direct. If you do not give the broker any instructions, the broker may vote at its discretion on all routine matters (such as the ratification of our independent registered public accounting firm). For non-routine matters (such as the election of directors and the advisory vote regarding executive compensation) however, the broker may not vote using its discretion. A broker’s failure to vote on a matter under these circumstances is referred to as a broker non-vote. How many votes are required to approve each proposal? | ● | The election of directors will be determined by a majority of the votes cast at the Annual Meeting. Accordingly, each of the nineten nominees for director will be elected if he or she receives a majority of the votes cast in person or represented by proxy, with respect to that director. A majority of the votes cast means that the number of shares voted FOR a director must exceed the number of shares voted AGAINST that director. Abstentions and broker non-votes, if any, are not treated as votes cast, and therefore will have no effect on the proposal to elect directors. Additionally, pursuant to our Corporate Governance Guidelines, if in an uncontested election for director a nominee for director does not receive the affirmative vote of a majority of the total votes cast for and against such nominee, the nominee will offer, following certification of the election results, to submit his or her resignation to the Board for consideration. Stockholders cannot cumulate votes in the election of directors. | | ● | The ratification of the appointment of PricewaterhouseCoopers as Hanesbrands’ independent registered public accounting firm for our 20192022 fiscal year requires approval by a majority of the votes cast in favorat the Annual Meeting. Accordingly, the number of shares voted FOR the proposal tomust exceed the votes cast againstnumber of shares voted AGAINST the proposal. Abstentions are not treated as votes cast, and therefore will have no effect on the proposal. | | ● | The approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement requires approval by a majority of the votes cast in favorat the Annual Meeting. Accordingly, the number of shares voted FOR the proposal tomust exceed the votes cast againstnumber of shares voted AGAINST the proposal. Abstentions and broker non-votes are not treated as votes cast, and therefore will have no effect on the proposal. |
How do I vote?
You may vote in person atyour shares during the Annual Meeting at www.virtualshareholdermeeting.com/HBI2022 or you may authorize a proxy to vote on your behalf. There are three ways to authorize a proxy: Internet:By accessing the Internet atwww.proxyvote.comand following the instructions on the proxy card or in the notice of annual meeting and Internet availability of proxy materials. Telephone:By calling toll-free 1-800-690-6903 and following the instructions on the proxy card or in the notice of annual meeting and Internet availability of proxy materials. Mail:If you requested and received your proxy materials by mail, by signing, dating and mailing the enclosed proxy card. If you authorize a proxy to vote your shares over the Internet or by telephone, you shouldHANESBRANDS INC.notreturn your proxy card. The notice of annual meeting and Internet availability of proxy materials isnota proxy card or ballot. | 65
Table of Contents Questions and Answers About the Annual Meeting and Voting | |
If you authorize a proxy to vote your shares over the Internet or by telephone, you should not return your proxy card. The notice of annual meeting and Internet availability of proxy materials is not a proxy card or ballot. Each share of Hanesbrands common stock represented by a proxy properly authorized over the Internet or by telephone or by a properly completed written proxy will be voted at the Annual Meeting in accordance with the stockholder’s instructions specified in the proxy, unless such proxy has been revoked. If no instructions are specified, such shares will be votedFORthe election of each of the nominees for director,FORratification of the appointment of PricewaterhouseCoopers as Hanesbrands’ independent registered public accounting firm for our 20192022 fiscal year,FORapproval of named executive officer compensation and in the discretion of the proxy holder on any other business that may properly come before the Annual Meeting. If you participate in the 401(k) Plan and have contributions invested in the HBI Stock Fund in the 401(k) Plan as of the close of business on the Record Date, you will receive a proxy card (or a notice of annual meeting and Internet availability of proxy materials containing instructions on how to authorize a proxy to vote your shares), which will serve as voting instructions for the trustee of the 401(k) Plan. You must return your proxy card to Broadridge Financial Solutions, Inc. (“Broadridge”) or authorize a proxy to vote your shares over the Internet or by telephone on or prior to April 18, 2019.21, 2022. If you have not authorized a proxy to vote your shares over the Internet or by telephone or if your proxy card is not received by Broadridge by that date, or if you sign and return your proxy card without instructions marked in the boxes, the trustee of the 401(k) Plan will vote shares attributable to your investment in the HBI Stock Fund in the 401(k) Plan in the same proportion as other shares held in the HBI Stock Fund for which the trustee received timely instructions. If no participants vote their shares, then the trustee will not vote any of the shares in the 401(k) Plan. How can I revoke a previously submitted proxy?
You may revoke (cancel) a proxy at any time before the Annual Meeting by (i) giving written notice of revocation to the Corporate Secretary of Hanesbrands with a date later than the date of the previously submitted proxy, (ii) properly authorizing a new proxy with a later date by mail, Internet or telephone or (iii) attending the Annual Meeting and voting in person.at www.virtualshareholdermeeting.com/HBI2022. Attendance at the Annual Meeting will not, by itself, constitute revocation of a proxy. Any notice of revocation should be sent to: Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North Carolina 27105, Attention: Corporate Secretary. What does it mean if I receive more than one notice of annual meeting and Internet availability of proxy materials?
If you receive more than one notice of annual meeting and Internet availability of proxy materials, it means your shares of Hanesbrands common stock are not all registered in the same way (for example, some are registered in your name and others are registered jointly with your spouse) or are in more than one account. In order to ensure that you vote all of the shares that you are entitled to vote, you should authorize a proxy to vote utilizing all proxy cards or Internet or telephone proxy authorizations to which you are provided access. How is the vote tabulated?
Hanesbrands has a policy that all proxies, ballots and votes tabulated at a meeting of stockholders are confidential, and the votes will not be revealed to any Hanesbrands employee or anyone else, other than to the non-employee tabulator of votes or an independent election inspector, except (i) as necessary to meet applicable legal requirements or (ii) in the event a proxy solicitation in opposition to the election of the Board or in opposition to any other proposal to be voted on is filed with the SEC. Broadridge will tabulate votes for the Annual Meeting and will provide an independent election inspector for the Annual Meeting. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23, 201926, 2022The notice of annual meeting, Proxy Statement and Annual Report on Form 10-K for the fiscal year ended December 29, 2018January 1, 2022 are available at: www.proxyvote.com.
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Table of Contents Other Information About Hanesbrands We will provide without charge to each person solicited pursuant to this Proxy Statement, upon the written request of any such person, a copy of our Annual Report on Form 10-K for the fiscal year ended December 29, 2018,January 1, 2022, including the financial statements and the financial statement schedules required to be filed with the SEC, or any exhibit to that Annual Report on Form 10-K. Requests should be in writing and directed to Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North Carolina 27105, Attention: Corporate Secretary.By referring to our website,www.Hanes.com/investors,we do not incorporate our website or its contents into this Proxy Statement. Matters Raised at the Annual Meeting not Included in this Proxy Statement We do not know of any matters to be acted upon at the Annual Meeting other than those discussed in this Proxy Statement. If any other matter is properly presented at the Annual Meeting, proxy holders will vote on the matter in their discretion. Solicitation Costs We will pay the cost of soliciting proxies by use of this Proxy Statement for the Annual Meeting, including the cost of mailing. The solicitationCompany is being mademaking this solicitation by mail and may also be made byuse telephone or in person contacts, using the services of a number of regular employees of Hanesbrands at nominal cost. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for expenses incurred in sending proxy materials to beneficial owners of shares of Hanesbrands common stock. We have engaged D.F. King & Co., Inc. to solicit proxies and to assist with the distribution of proxy materials for a fee of $8,000 plus reasonable out-of-pocket expenses. Householding Stockholders residing in the same household who hold their stock through a bank or broker may receive only one notice of annual meeting and Internet availability of proxy materials (or Proxy Statement, for those who receive a printed copy of the Proxy Statement) in accordance with a notice sent earlier by their bank or broker. This practice of sending only one copy of proxy materials is called “householding,” and saves us money in printing and distribution costs. This practice will continue unless instructions to the contrary are received by your bank or broker from one or more of the stockholders within the household. If you hold your shares in “street name” and reside in a household that received only one copy of the proxy materials, you can request to receive a separate copy in the future by following the instructions sent by your bank or broker. If your household is receiving multiple copies of the proxy materials, you may request that only a single set of materials be sent by following the instructions sent by your bank or broker or by contacting us in writing at Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North Carolina 27105, Attention: Corporate Secretary, or by telephone at 336-519-8080. We will also promptly deliver a separate copy of one notice of annual meeting and Internet availability of proxy materials (or Proxy Statement, as applicable) to any stockholder residing at an address to which only one copy was delivered. Requests for additional copies should be directed to us in writing or by telephone using the contact information listed above.
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Table of Contents Stockholder Proposals and Director Nominations for Next Annual Meeting If you want to make a proposal for consideration at next year’s annual meetingAnnual Meeting and have it included in our proxy materials, Hanesbrands must receive your proposal no later thanNovember 14, 2022, which is the 120th day prior to the anniversary of the date of these proxy materials, November 12, 2019,this Proxy Statement, and the proposal must comply with the rules of the SEC. If you want to make a proposal or nominate a director for consideration at next year’s annual meetingAnnual Meeting without having the proposal included in our proxy materials, you must comply with the then current advance notice provisions and other requirements set forth in our bylaws, which are filed with the SEC. Under our current bylaws, a stockholder may nominate a director or submit a proposal for consideration at an annual meetingAnnual Meeting by giving adequate notice to our Corporate Secretary. To be adequate, that notice must contain information specified in our bylaws and be received by us not earlier than the 150th day nor later than 5:00 p.m., Eastern time, on the 120th day prior to the first anniversary of the date of the Proxy Statement for the preceding year’s annual meeting.Annual Meeting. If, however, the date of the annual meetingAnnual Meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting,Annual Meeting, notice by the stockholder to be timely must be so delivered not earlier than the 150th day prior to the date of such annual meetingAnnual Meeting and not later than 5:00 p.m., Eastern time, on the later of the 120th day prior to the date of such annual meetingAnnual Meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. Therefore, Hanesbrands must receive your nomination or proposal on or after October 13, 201915, 2022 and prior to 5:00 p.m., Eastern time, on November 12, 201914, 2022 unless the date of the annual meetingAnnual Meeting is advanced or delayed by more than 30 days from the anniversary date of the 20192022 Annual Meeting. If Hanesbrands does not receive your proposal or nomination by the appropriate deadline, then it may not be brought before the 20202023 Annual Meeting of Stockholders even if it meets the other proposal or nomination requirements. The fact that we may not insist upon compliance with these requirements should not be construed as a waiver of our right to do so at any time in the future. In addition to satisfying the requirements under our bylaws, if a you intend to comply with the SEC's universal proxy rules and to solicit proxies in support of director nominees other than the Company's nominees, you must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to us at our principal executive offices no later than 60 calendar days prior to the one-year anniversary date of the Annual Meeting (for the 2023 Annual Meeting of Stockholders, no later than February 25, 2023). If the date of the 2023 Annual Meeting of Stockholders is changed by more than 30 calendar days from such anniversary date, however, then you must provide notice by the later of 60 calendar days prior to the date of the 2023 Annual Meeting of Stockholders and the 10th calendar day following the date on which public announcement of the date of the 2023 Annual Meeting of Stockholders is first made. You should address your proposals or nominations to Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North Carolina 27105, Attention: Corporate Secretary. By Order of the Board of Directors HANESBRANDS INC.
Joia
Tracy M. Johnson
Chief Administrative Officer, Preston General Counsel, and Corporate Secretary & Chief Compliance Officer March 11, 201914, 2022 68 |
Table of Contents Appendix A Table 1 Hanesbrands Inc. Condensed Consolidated Statements of Income (in thousands, except per share data) (Unaudited) | | Quarters Ended | | | | | | Years Ended | | | | | | | January 1, 2022 | | | January 2, 2021 | | | % Change | | | January 1, 2022 | | | January 2, 2021 | | | % Change | | Net sales | | $ | 1,752,349 | | | $ | 1,689,145 | | | | 3.7 | % | | $ | 6,801,240 | | | $ | 6,127,161 | | | | 11.0 | % | Cost of sales | | | 1,084,621 | | | | 1,589,946 | | | | | | | | 4,149,541 | | | | 4,524,461 | | | | | | Gross profit | | | 667,728 | | | | 99,199 | | | | 573.1 | % | | | 2,651,699 | | | | 1,602,700 | | | | 65.5 | % | As a % of net sales | | | 38.1 | % | | | 5.9 | % | | | | | | | 39.0 | % | | | 26.2 | % | | | | | Selling, general and administrative expenses | | | 512,162 | | | | 495,706 | | | | | | | | 1,853,971 | | | | 1,560,034 | | | | | | As a % of net sales | | | 29.2 | % | | | 29.3 | % | | | | | | | 27.3 | % | | | 25.5 | % | | | | | Operating profit (loss) | | | 155,566 | | | | (396,507 | ) | | | (139.2 | )% | | | 797,728 | | | | 42,666 | | | | 1,769.7 | % | As a % of net sales | | | 8.9 | % | | | (23.5 | )% | | | | | | | 11.7 | % | | | 0.7 | % | | | | | Other expenses | | | 47,359 | | | | 5,003 | | | | | | | | 53,586 | | | | 20,655 | | | | | | Interest expense, net | | | 35,307 | | | | 43,636 | | | | | | | | 163,067 | | | | 164,238 | | | | | | Income (loss) from continuing operations before income tax expense | | | 72,900 | | | | (445,146 | ) | | | | | | | 581,075 | | | | (142,227 | ) | | | | | Income tax expense (benefit) | | | 4,946 | | | | (152,948 | ) | | | | | | | 60,107 | | | | (109,940 | ) | | | | | Income (loss) from continuing operations | | | 67,954 | | | | (292,198 | ) | | | (123.3 | )% | | | 520,968 | | | | (32,287 | ) | | | (1,713.6 | )% | Loss from discontinued operations, net of tax | | | (7,921 | ) | | | (39,966 | ) | | | | | | | (443,744 | ) | | | (43,292 | ) | | | | | Net income (loss) | | $ | 60,033 | | | $ | (332,164 | ) | | | | | | $ | 77,224 | | | $ | (75,579 | ) | | | | | Earnings (loss) per share - basic: | | | | | | | | | | | | | | | | | | | | | | | | | Continuing operations | | $ | 0.19 | | | $ | (0.83 | ) | | | | | | $ | 1.48 | | | $ | (0.09 | ) | | | | | Discontinued operations | | | (0.02 | ) | | | (0.11 | ) | | | | | | | (1.26 | ) | | | (0.12 | ) | | | | | Net income (loss) | | $ | 0.17 | | | $ | (0.95 | ) | | | | | | $ | 0.22 | | | $ | (0.21 | ) | | | | | Earnings (loss) per share - diluted: | | | | | | | | | | | | | | | | | | | | | | | | | Continuing operations | | $ | 0.19 | | | $ | (0.83 | ) | | | | | | $ | 1.48 | | | $ | (0.09 | ) | | | | | Discontinued operations | | | (0.02 | ) | | | (0.11 | ) | | | | | | | (1.26 | ) | | | (0.12 | ) | | | | | Net income (loss) | | $ | 0.17 | | | $ | (0.95 | ) | | | | | | $ | 0.22 | | | $ | (0.21 | ) | | | | | Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | Basic | | | 351,052 | | | | 350,807 | | | | | | | | 351,028 | | | | 352,766 | | | | | | Diluted | | | 352,323 | | | | 350,807 | | | | | | | | 352,078 | | | | 352,766 | | | | | |
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Table of Contents Table 2-A Hanesbrands Inc. Supplemental Financial Information Impact of Foreign Currency (in thousands, except per share data) (Unaudited) | | Quarter Ended January 1, 2022 | | | | | | | | | | | | | As Reported | | | Impact from Foreign Currency (1) | | | Constant Currency | | | Quarter Ended January 2, 2021 | | | % Change, As Reported | | | % Change, Constant Currency | | As reported under GAAP: | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 1,752,349 | | | $ | (9,455 | ) | | $ | 1,761,804 | | | $ | 1,689,145 | | | | 3.7 | % | | | 4.3 | % | Gross profit | | | 667,728 | | | | (4,573 | ) | | | 672,301 | | | | 99,199 | | | | 573.1 | | | | 577.7 | | Operating profit (loss) | | | 155,566 | | | | (1,343 | ) | | | 156,909 | | | | (396,507 | ) | | | (139.2 | ) | | | (139.6 | ) | Diluted earnings (loss) per share from continuing operations | | $ | 0.19 | | | $ | 0.00 | | | $ | 0.20 | | | $ | (0.83 | ) | | | (122.9 | )% | | | (124.1 | )% | As adjusted: (2) | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 1,752,349 | | | $ | (9,455 | ) | | $ | 1,761,804 | | | $ | 1,689,145 | | | | 3.7 | % | | | 4.3 | % | Gross profit | | | 673,227 | | | | (4,573 | ) | | | 677,800 | | | | 681,989 | | | | (1.3 | ) | | | (0.6 | ) | Operating profit | | | 220,123 | | | | (1,343 | ) | | | 221,466 | | | | 228,829 | | | | (3.8 | ) | | | (3.2 | ) | Diluted earnings per share from continuing operations | | $ | 0.44 | | | $ | 0.00 | | | $ | 0.45 | | | $ | 0.42 | | | | 4.8 | % | | | 7.1 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended January 1, 2022 | | | | | | | | | | | | | | | | | As Reported | | | | Impact from Foreign Currency (1) | | | | Constant Currency | | | | Year Ended January 2, 2021 | | | | % Change, As Reported | | | | % Change, Constant Currency | | As reported under GAAP: | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 6,801,240 | | | $ | 92,762 | | | $ | 6,708,478 | | | $ | 6,127,161 | | | | 11.0 | % | | | 9.5 | % | Gross profit | | | 2,651,699 | | | | 51,011 | | | | 2,600,688 | | | | 1,602,700 | | | | 65.5 | | | | 62.3 | | Operating profit | | | 797,728 | | | | 15,885 | | | | 781,843 | | | | 42,666 | | | | 1,769.7 | | | | 1,732.5 | | Diluted earnings (loss) per share from continuing operations | | $ | 1.48 | | | $ | 0.04 | | | $ | 1.44 | | | $ | (0.09 | ) | | | (1,744.4 | )% | | | (1,700.0 | )% | As adjusted: (2) | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 6,801,240 | | | $ | 92,762 | | | $ | 6,708,478 | | | $ | 6,127,161 | | | | 11.0 | % | | | 9.5 | % | Gross profit | | | 2,661,797 | | | | 51,011 | | | | 2,610,786 | | | | 2,273,318 | | | | 17.1 | | | | 14.8 | | Operating profit | | | 929,438 | | | | 15,885 | | | | 913,553 | | | | 776,862 | | | | 19.6 | | | | 17.6 | | Diluted earnings per share from continuing operations | | $ | 1.83 | | | $ | 0.04 | | | $ | 1.79 | | | $ | 1.40 | | | | 30.7 | % | | | 27.9 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results. | (2) | Results for the quarters and years ended January 1, 2022 and January 2, 2021 reflect adjustments for restructuring and other action-related charges. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Tables 6-A through 6-E |
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Table of Contents HANESBRANDSINC. Table 2-B
Hanesbrands Inc. Supplemental Financial Information
Reconciliation Impact of SelectGAAP Measuresto Non-GAAP Measures Foreign Currency (Amountsinthousands,except per-shareamounts) per share data) (Unaudited) | | 2007 | | | 2008 | | | 2009 | | | 2010 | | | 2011 | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | Net cash from operating | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | activities | | $ 359,040 | | | $ 177,397 | | | $ 414,504 | | | $ 133,054 | | | $ 173,478 | | | $ 553,607 | | | $ 591,281 | | | $ 508,090 | | | $ 227,007 | | | $ 605,607 | | | $ 655,718 | | | $ 643,402 | | Capital Expenditures | | (91,626 | ) | | (186,957 | ) | | (126,825 | ) | | (106,240 | ) | | (90,099 | ) | | (40,994 | ) | | (43,627 | ) | | (64,311 | ) | | (99,375 | ) | | (83,399 | ) | | (87,008 | ) | | (86,293 | ) | Free Cash Flow | | $ 267,414 | | | $ (9,560 | ) | | $ 287,679 | | | $ 26,814 | | | $ 83,379 | | | $ 512,613 | | | $ 547,654 | | | $ 443,779 | | | $ 127,632 | | | $ 522,208 | | | $ 568,710 | | | $ 557,109 | |
| | Quarter Ended January 1, 2022 | | | | | | | | | | | | | As Reported | | | Impact from Foreign Currency (1) | | | Constant Currency | | | Quarter Ended December 28, 2019 | | | % Change, As Reported | | | % Change, Constant Currency | | As reported under GAAP: | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 1,752,349 | | | $ | 13,004 | | | $ | 1,739,345 | | | $ | 1,610,012 | | | | 8.8 | % | | | 8.0 | % | Gross profit | | | 667,728 | | | | 8,052 | | | | 659,676 | | | | 633,129 | | | | 5.5 | | | | 4.2 | | Operating profit | | | 155,566 | | | | 3,001 | | | | 152,565 | | | | 230,006 | | | | (32.4 | ) | | | (33.7 | ) | Diluted earnings per share from continuing operations | | $ | 0.19 | | | $ | 0.01 | | | $ | 0.18 | | | $ | 0.43 | | | | (55.8 | )% | | | (58.1 | )% | As adjusted: (2) | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 1,752,349 | | | $ | 13,004 | | | $ | 1,739,345 | | | $ | 1,522,077 | | | | 15.1 | % | | | 14.3 | % | Gross profit | | | 673,227 | | | | 8,052 | | | | 665,175 | | | | 620,853 | | | | 8.4 | | | | 7.1 | | Operating profit | | | 220,123 | | | | 3,001 | | | | 217,122 | | | | 227,866 | | | | (3.4 | ) | | | (4.7 | ) | Diluted earnings per share from continuing operations | | $ | 0.44 | | | $ | 0.01 | | | $ | 0.43 | | | $ | 0.39 | | | | 12.8 | % | | | 10.3 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended January 1, 2022 | | | | | | | | | | | | | | | | | As Reported | | | | Impact from Foreign Currency (1) | | | | Constant Currency | | | | Year Ended December 28, 2019 | | | | % Change, As Reported | | | | % Change, Constant Currency | | As reported under GAAP: | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 6,801,240 | | | $ | 77,897 | | | $ | 6,723,343 | | | $ | 6,425,716 | | | | 5.8 | % | | | 4.6 | % | Gross profit | | | 2,651,699 | | | | 44,020 | | | | 2,607,679 | | | | 2,428,702 | | | | 9.2 | | | | 7.4 | | Operating profit | | | 797,728 | | | | 13,800 | | | | 783,928 | | | | 850,685 | | | | (6.2 | ) | | | (7.8 | ) | Diluted earnings per share from continuing operations | | $ | 1.48 | | | $ | 0.04 | | | $ | 1.44 | | | $ | 1.57 | | | | (5.7 | )% | | | (8.3 | )% | As adjusted: (2) | | | | | | | | | | | | | | | | | | | | | | | | | Net sales | | $ | 6,801,240 | | | $ | 77,897 | | | $ | 6,723,343 | | | $ | 6,006,269 | | | | 13.2 | % | | | 11.9 | % | Gross profit | | | 2,661,797 | | | | 44,020 | | | | 2,617,777 | | | | 2,354,289 | | | | 13.1 | | | | 11.2 | | Operating profit | | | 929,438 | | | | 13,800 | | | | 915,638 | | | | 818,341 | | | | 13.6 | | | | 11.9 | | Diluted earnings per share from continuing operations | | $ | 1.83 | | | $ | 0.03 | | | $ | 1.80 | | | $ | 1.45 | | | | 26.2 | % | | | 24.1 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Effect of the change in foreign currency exchange rates year-over-year. Calculated by applying prior period exchange rates to the current year financial results. | (2) | Results for the quarters and years ended January 1, 2022 and December 28, 2019 reflect adjustments for restructuring and other action-related charges. Results for the quarter and year ended December 28, 2019 also reflect adjustments for the exited C9 Champion mass program and DKNY intimate apparel license. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Tables 6-A through 6-E. |
HANESBRANDS INC. | 71
Table of Contents Table 3-A Hanesbrands Inc. Supplemental Financial Information By Business Segment (in thousands) (Unaudited) | | Quarters Ended | | | | | | Years Ended | | | | | | | January 1, 2022 | | | January 2, 2021 | | | % Change | | | January 1, 2022 | | | January 2, 2021 | | | % Change | | Segment net sales: | | | | | | | | | | | | | | | | | | | | | | | | | Innerwear (1) | | $ | 666,086 | | | $ | 668,193 | | | | (0.3 | )% | | $ | 2,719,788 | | | $ | 2,978,009 | | | | (8.7 | )% | Activewear | | | 448,948 | | | | 403,113 | | | | 11.4 | | | | 1,679,639 | | | | 1,184,413 | | | | 41.8 | | International (2) | | | 544,582 | | | | 525,714 | | | | 3.6 | | | | 2,066,249 | | | | 1,711,432 | | | | 20.7 | | Other | | | 92,733 | | | | 92,125 | | | | 0.7 | | | | 335,564 | | | | 253,307 | | | | 32.5 | | Total net sales | | $ | 1,752,349 | | | $ | 1,689,145 | | | | 3.7 | % | | $ | 6,801,240 | | | $ | 6,127,161 | | | | 11.0 | % | Segment operating profit: | | | | | | | | | | | | | | | | | | | | | | | | | Innerwear | | $ | 112,615 | | | $ | 160,848 | | | | (30.0 | )% | | $ | 573,852 | | | $ | 718,923 | | | | (20.2 | )% | Activewear | | | 58,587 | | | | 35,718 | | | | 64.0 | | | | 236,400 | | | | 67,643 | | | | 249.5 | | International | | | 103,866 | | | | 92,782 | | | | 11.9 | | | | 339,317 | | | | 249,718 | | | | 35.9 | | Other | | | 8,528 | | | | 2,123 | | | | 301.7 | | | | 30,922 | | | | (10,140 | ) | | | (405.0 | ) | General corporate expenses/other | | | (63,473 | ) | | | (62,642 | ) | | | 1.3 | | | | (251,053 | ) | | | (249,282 | ) | | | 0.7 | | Total operating profit before restructuring and other action-related charges | | | 220,123 | | | | 228,829 | | | | (3.8 | ) | | | 929,438 | | | | 776,862 | | | | 19.6 | | Restructuring and other action-related charges | | | (64,557 | ) | | | (625,336 | ) | | | (89.7 | ) | | | (131,710 | ) | | | (734,196 | ) | | | (82.1 | ) | Total operating profit (loss) | | $ | 155,566 | | | $ | (396,507 | ) | | | (139.2 | )% | | $ | 797,728 | | | $ | 42,666 | | | | 1,769.7 | % | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | The Innerwear segment includes $22 million and $801 million of net sales of PPE in the quarter and year ended January 2, 2021, respectively. | (2) | The International segment includes $6 million and $19 million of net sales of PPE in the quarter and year ended January 2, 2021, respectively. | | |
| | Quarters Ended | | | | | | Years Ended | | | | | | | January 1, 2022 | | | January 2, 2021 | | | Basis Points Change | | | January 1, 2022 | | | January 2, 2021 | | | Basis Points Change | | Segment operating margin: | | | | | | | | | | | | | | | | | | | | | | | | | Innerwear | | | 16.9 | % | | | 24.1 | % | | | (717 | ) | | | 21.1 | % | | | 24.1 | % | | | (304 | ) | Activewear | | | 13.0 | | | | 8.9 | | | | 419 | | | | 14.1 | | | | 5.7 | | | | 836 | | International | | | 19.1 | | | | 17.6 | | | | 142 | | | | 16.4 | | | | 14.6 | | | | 183 | | Other | | | 9.2 | | | | 2.3 | | | | 689 | | | | 9.2 | | | | (4.0 | ) | | | 1,322 | | General corporate expenses/other | | | (3.6 | ) | | | (3.7 | ) | | | 9 | | | | (3.7 | ) | | | (4.1 | ) | | | 38 | | Total operating margin before restructuring and other action-related charges | | | 12.6 | | | | 13.5 | | | | (99 | ) | | | 13.7 | | | | 12.7 | | | | 99 | | Restructuring and other action-related charges | | | (3.7 | ) | | | (37.0 | ) | | | 3,334 | | | | (1.9 | ) | | | (12.0 | ) | | | 1,005 | | Total operating margin | | | 8.9 | % | | | (23.5 | )% | | | 3,235 | | | | 11.7 | % | | | 0.7 | % | | | 1,103 | |
72 |
Table of Contents | | 2007 | | 2008 | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 | | 2015 | | 2016 | | 2017 | | 2018 | | Net Sales | | $ | 4,294,197 | | $ | 4,048,497 | | $ | 3,746,201 | | $ | 4,145,012 | | $ | 4,434,291 | | $ | 4,525,721 | | $ | 4,627,802 | | $ | 5,324,746 | | $ | 5,731,549 | | $ | 6,028,199 | | $ | 6,471,410 | | $ | 6,803,955 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit, under | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GAAP* | | $ | 360,072 | | $ | 280,345 | | $ | 284,177 | | $ | 397,720 | | $ | 458,192 | | $ | 458,226 | | $ | 529,895 | | $ | 572,289 | | $ | 604,812 | | $ | 790,051 | | $ | 744,350 | | $ | 867,951 | | Acquisition, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | integration and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | other action-related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | charges included in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | gross profit | | | 36,912 | | | 42,558 | | | 12,776 | | | — | | | — | | | — | | | 16,221 | | | 73,126 | | | 62,859 | | | 39,379 | | | 54,970 | | | 38,355 | | Acquisition, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | integration and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | other action-related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | charges included in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SG&A | | | (5,036 | ) | | (14 | ) | | 5,916 | | | — | | | — | | | — | | | 64,569 | | | 125,807 | | | 203,201 | | | 99,140 | | | 108,082 | | | 41,843 | | Contingent | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | consideration | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | related to Champion | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Europe | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 27,852 | | | — | | Gain on curtailment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | of postretirement | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | benefits | | | (32,144 | ) | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Restructuring | | | 43,731 | | | 50,263 | | | 53,888 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Operating profit, as | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | adjusted**** | | $ | 403,535 | | $ | 373,152 | | $ | 356,757 | | $ | 397,720 | | $ | 458,192 | | $ | 458,226 | | $ | 610,685 | | $ | 771,222 | | $ | 870,872 | | $ | 928,570 | | $ | 935,254 | | $ | 948,149 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating Margin, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | under GAAP* | | | 8.4 | % | | 6.9 | % | | 7.6 | % | | 9.6 | % | | 10.3 | % | | 10.1 | % | | 11.5 | % | | 10.7 | % | | 10.6 | % | | 13.1 | % | | 11.5 | % | | 12.8 | % | Action and other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | related charges | | | 1.0 | % | | 2.3 | % | | 1.9 | % | | — | | | — | | | — | | | 1.7 | % | | 3.7 | % | | 4.6 | % | | 2.3 | % | | 2.9 | % | | 1.2 | % | Operating margin, as | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | adjusted | | | 9.4 | % | | 9.2 | % | | 9.5 | % | | 9.6 | % | | 10.3 | % | | 10.1 | % | | 13.2 | % | | 14.5 | % | | 15.2 | % | | 15.4 | % | | 14.5 | % | | 13.9 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income from | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | continuing | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | operations, under | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GAAP | | $ | 111,737 | | $ | 107,122 | | $ | 42,813 | | $ | 192,612 | | $ | 242,569 | | $ | 232,443 | | $ | 330,494 | | $ | 404,519 | | $ | 428,855 | | $ | 536,927 | | $ | 63,991 | | $ | 553,084 | | Acquisition, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | integration and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | other action-related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | charges included in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | gross profit | | | 36,912 | | | 42,558 | | | 12,776 | | | — | | | — | | | — | | | 16,221 | | | 73,126 | | | 62,859 | | | 39,379 | | | 54,970 | | | 38,355 | | Acquisition, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | integration and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | other action-related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | charges included in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SG&A | | | (5,036 | ) | | (14 | ) | | 5,916 | | | — | | | — | | | — | | | 64,569 | | | 125,807 | | | 203,201 | | | 99,140 | | | 108,082 | | | 41,843 | |
Table 3-B Hanesbrands Inc. Supplemental Financial Information By Business Segment (in thousands) (Unaudited) | | Quarters Ended | | | | | | Years Ended | | | | | | | January 1, 2022 | | | December 28, 2019 Rebased (1) | | | % Change | | | January 1, 2022 | | | December 28, 2019 Rebased (1) | | | % Change | | Segment net sales: | | | | | | | | | | | | | | | | | | | | | | | | | Innerwear | | $ | 666,086 | | | $ | 558,302 | | | | 19.3 | % | | $ | 2,719,788 | | | $ | 2,244,478 | | | | 21.2 | % | Activewear | | | 448,948 | | | | 376,363 | | | | 19.3 | | | | 1,679,639 | | | | 1,493,411 | | | | 12.5 | | International | | | 544,582 | | | | 495,798 | | | | 9.8 | | | | 2,066,249 | | | | 1,930,828 | | | | 7.0 | | Other | | | 92,733 | | | | 91,614 | | | | 1.2 | | | | 335,564 | | | | 337,552 | | | | (0.6 | ) | Total net sales | | $ | 1,752,349 | | | $ | 1,522,077 | | | | 15.1 | % | | $ | 6,801,240 | | | $ | 6,006,269 | | | | 13.2 | % | Segment operating profit: | | | | | | | | | | | | | | | | | | | | | | | | | Innerwear | | $ | 112,615 | | | $ | 137,945 | | | | (18.4 | )% | | $ | 573,852 | | | $ | 505,839 | | | | 13.4 | % | Activewear | | | 58,587 | | | | 52,849 | | | | 10.9 | | | | 236,400 | | | | 196,612 | | | | 20.2 | | International | | | 103,866 | | | | 85,148 | | | | 22.0 | | | | 339,317 | | | | 331,322 | | | | 2.4 | | Other | | | 8,528 | | | | 10,112 | | | | (15.7 | ) | | | 30,922 | | | | 33,439 | | | | (7.5 | ) | General corporate expenses/other | | | (63,473 | ) | | | (58,188 | ) | | | 9.1 | | | | (251,053 | ) | | | (248,871 | ) | | | 0.9 | | Total operating profit before restructuring and other action-related charges | | | 220,123 | | | | 227,866 | | | | (3.4 | ) | | | 929,438 | | | | 818,341 | | | | 13.6 | | Restructuring and other action-related charges | | | (64,557 | ) | | | (19,067 | ) | | | 238.6 | | | | (131,710 | ) | | | (62,515 | ) | | | 110.7 | | Total operating profit | | $ | 155,566 | | | $ | 208,799 | | | | (25.5 | )% | | $ | 797,728 | | | $ | 755,826 | | | | 5.5 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Quarters Ended | | | | | | | | Years Ended | | | | | | | | | January 1, 2022 | | | | December 28, 2019 Rebased (1) | | | | Basis Points Change | | | | January 1, 2022 | | | | December 28, 2019 Rebased (1) | | | | Basis Points Change | | Segment operating margin: | | | | | | | | | | | | | | | | | | | | | | | | | Innerwear | | | 16.9 | % | | | 24.7 | % | | | (780 | ) | | | 21.1 | % | | | 22.5 | % | | | (144 | ) | Activewear | | | 13.0 | | | | 14.0 | | | | (99 | ) | | | 14.1 | | | | 13.2 | | | | 91 | | International | | | 19.1 | | | | 17.2 | | | | 190 | | | | 16.4 | | | | 17.2 | | | | (74 | ) | Other | | | 9.2 | | | | 11.0 | | | | (184 | ) | | | 9.2 | | | | 9.9 | | | | (69 | ) | General corporate expenses/other | | | (3.6 | ) | | | (3.8 | ) | | | 20 | | | | (3.7 | ) | | | (4.1 | ) | | | 45 | | Total operating margin before restructuring and other action-related charges | | | 12.6 | | | | 15.0 | | | | (241 | ) | | | 13.7 | | | | 13.6 | | | | 4 | | Restructuring and other action-related charges | | | (3.7 | ) | | | (1.3 | ) | | | (243 | ) | | | (1.9 | ) | | | (1.0 | ) | | | (90 | ) | Total operating margin | | | 8.9 | % | | | 13.7 | % | | | (484 | ) | | | 11.7 | % | | | 12.6 | % | | | (85 | ) | | | | | | | | | | | | | | | | | | | | | | | | | |
66 (1) | Results for the quarter and year ended December 28, 2019 reflect adjustments for the exited C9 Champion mass program and DKNY intimate apparel license. See “Reconciliation of Select GAAP Measures to Non-GAAP Measures” in Tables 6-A through 6-E. |
HANESBRANDS INC.| 73
Table of Contents Table 4 Hanesbrands Inc. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) | | January 1, 2022 | | | January 2, 2021 | | Assets | | | | | | | | | Cash and cash equivalents | | $ | 536,277 | | | $ | 900,615 | | Trade accounts receivable, net | | | 894,151 | | | | 768,221 | | Inventories | | | 1,584,015 | | | | 1,367,758 | | Other current assets | | | 186,503 | | | | 158,700 | | Current assets held for sale | | | 327,157 | | | | 234,086 | | Total current assets | | | 3,528,103 | | | | 3,429,380 | | Property, net | | | 441,401 | | | | 477,821 | | Right-of-use assets | | | 363,854 | | | | 432,631 | | Trademarks and other identifiable intangibles, net | | | 1,220,170 | | | | 1,293,847 | | Goodwill | | | 1,133,095 | | | | 1,158,938 | | Deferred tax assets | | | 327,804 | | | | 367,976 | | Other noncurrent assets | | | 57,009 | | | | 64,773 | | Noncurrent assets held for sale | | | — | | | | 494,501 | | Total assets | | $ | 7,071,436 | | | $ | 7,719,867 | | Liabilities | | | | | | | | | Accounts payable | | $ | 1,214,847 | | | $ | 891,868 | | Accrued liabilities | | | 660,778 | | | | 609,864 | | Lease liabilities | | | 109,526 | | | | 136,510 | | Current portion of long-term debt | | | 25,000 | | | | 263,936 | | Current liabilities held for sale | | | 316,902 | | | | 222,183 | | Total current liabilities | | | 2,327,053 | | | | 2,124,361 | | Long-term debt | | | 3,326,091 | | | | 3,739,434 | | Lease liabilities - noncurrent | | | 281,852 | | | | 331,577 | | Pension and postretirement benefits | | | 248,518 | | | | 381,457 | | Other noncurrent liabilities | | | 185,429 | | | | 216,091 | | Noncurrent liabilities held for sale | | | — | | | | 112,989 | | Total liabilities | | | 6,368,943 | | | | 6,905,909 | | Stockholders’ equity | | | | | | | | | Preferred stock | | | — | | | | — | | Common stock | | | 3,499 | | | | 3,488 | | Additional paid-in capital | | | 315,337 | | | | 307,883 | | Retained earnings | | | 935,260 | | | | 1,069,546 | | Accumulated other comprehensive loss | | | (551,603 | ) | | | (566,959 | ) | Total stockholders’ equity | | | 702,493 | | | | 813,958 | | Total liabilities and stockholders’ equity | | $ | 7,071,436 | | | $ | 7,719,867 | |
74 |
Table of Contents | | 2007 | | 2008 | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 | | 2015 | | 2016 | | 2017 | | 2018 | | Contingent | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | consideration related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | to Champion Europe | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 27,852 | | | — | | Gain on curtailment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | of postretirement | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | benefits | | | (32,144 | ) | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Restructuring | | | 43,731 | | | 50,263 | | | 53,888 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Debt refinance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | charge included in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | other expenses | | | 5,235 | | | (634 | ) | | 49,301 | | | — | | | — | | | 33,906 | | | — | | | — | | | — | | | 47,291 | | | — | | | — | | Other non- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | operating charges in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | other expenses | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,000 | | | (36 | ) | Tax reform, related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | charged, tax effect | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | on actions included | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | in tax expense | | | (15,340 | ) | | (20,278 | ) | | (14,626 | ) | | — | | | — | | | (3,932 | ) | | (13,331 | ) | | (25,862 | ) | | (25,276 | ) | | (11,148 | ) | | 452,778 | | | (11,624 | ) | Net income from | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | continuing | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | operations, as | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | adjusted | | $ | 145,095 | | $ | 179,017 | | $ | 150,068 | | $ | 192,612 | | $ | 242,569 | | $ | 262,417 | | $ | 397,953 | | $ | 577,590 | | $ | 669,639 | | $ | 711,589 | | $ | 714,673 | | $ | 621,622 | | Adjustment to | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | reflect 16% tax rate | | | | | | | | | | | | | | | | | | | | | 2,383 | | $ | (19,914 | ) | $ | (48,095 | ) | $ | (75,701 | ) | $ | (94,186 | ) | | | | Net income from | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | continuing | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | operations, as | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | adjusted to reflect | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16% tax rate | | | | | | | | | | | | | | | | | | | | $ | 400,336 | | $ | 557,676 | | $ | 621,544 | | $ | 635,888 | | $ | 620,487 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Diluted earnings per | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | share, under GAAP | | $ | 0.29 | | $ | 0.28 | | $ | 0.11 | | $ | 0.49 | | $ | 0.61 | | $ | 0.58 | | $ | 0.81 | | $ | 0.99 | | $ | 1.06 | | $ | 1.40 | | $ | 0.17 | | $ | 1.52 | | Action and other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | related charges | | | 0.09 | | | 0.19 | | | 0.28 | | | — | | | — | | | 0.07 | | | 0.17 | | | 0.42 | | | 0.60 | | | 0.45 | | | 1.74 | | | 0.19 | | Diluted earnings per | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | share, as adjusted*** | | $ | 0.37 | | $ | 0.47 | | $ | 0.39 | | $ | 0.49 | | $ | 0.61 | | $ | 0.65 | | $ | 0.98 | | $ | 1.42 | | $ | 1.66 | | $ | 1.85 | | $ | 1.93 | | $ | 1.71 | | Adjustment to | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | reflect 16% tax rate | | | | | | | | | | | | | | | | | | | | | 0.01 | | | (0.05 | ) | | (0.12 | ) | | (0.20 | ) | | (0.25 | ) | | | | Diluted earnings per | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | share, as adjusted to | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | reflect 16% tax rate | | | | | | | | | | | | | | | | | | | | $ | 0.98 | | $ | 1.37 | | $ | 1.54 | | $ | 1.65 | | $ | 1.68 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Diluted weighted | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | average shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | outstanding** | | | 386,964 | | | 380,656 | | | 382,672 | | | 391,096 | | | 397,004 | | | 401,076 | | | 407,292 | | | 408,044 | | | 403,659 | | | 384,566 | | | 369,426 | | | 364,505 | |
Table 5 Hanesbrands Inc. Condensed Consolidated Statements of Cash Flows(1) (in thousands) (Unaudited) | | Quarters Ended | | Years Ended | | | January 1, 2022 | | | January 2, 2021 | | | January 1, 2022 | | | January 2, 2021 | | Operating Activities: | | | | | | | | | | | | | | | | | Net income (loss) | | $ | 60,033 | | | $ | (332,164 | ) | | $ | 77,224 | | | $ | (75,579 | ) | Adjustments to reconcile net income (loss) to net cash from operating activities: | | | | | | | | | | | | | | | | | Depreciation | | | 18,486 | | | | 28,083 | | | | 81,669 | | | | 95,759 | | Amortization of acquisition intangibles | | | 4,694 | | | | 6,215 | | | | 20,390 | | | | 24,718 | | Other amortization | | | 3,529 | | | | 3,878 | | | | 12,139 | | | | 11,969 | | Inventory write-down charges | | | — | | | | 584,671 | | | | — | | | | 584,671 | | Impairment of intangible assets and goodwill | | | — | | | | 25,173 | | | | 163,047 | | | | 45,492 | | Loss on classification of assets held for sale | | | 45,617 | | | | — | | | | 312,359 | | | | — | | Loss on extinguishment of debt | | | 43,739 | | | | — | | | | 43,739 | | | | — | | Amortization of debt issuance costs | | | 2,055 | | | | 3,262 | | | | 12,305 | | | | 11,565 | | Stock compensation expense | | | 6,494 | | | | 5,168 | | | | 16,630 | | | | 18,969 | | Deferred taxes | | | 11,550 | | | | (168,068 | ) | | | 3,934 | | | | (161,215 | ) | Other | | | 2,324 | | | | 3,497 | | | | (2,084 | ) | | | 8,501 | | Changes in assets and liabilities: | | | | | | | | | | | | | | | | | Accounts receivable | | | 20,752 | | | | 168,934 | | | | (181,173 | ) | | | (6,945 | ) | Inventories | | | (990 | ) | | | 123,310 | | | | (293,455 | ) | | | (136,057 | ) | Other assets | | | (47,678 | ) | | | 42,215 | | | | (40,636 | ) | | | (1,144 | ) | Accounts payable | | | (22,281 | ) | | | (222,207 | ) | | | 368,753 | | | | (32,641 | ) | Accrued pension and postretirement benefits | | | (300 | ) | | | 133 | | | | (40,768 | ) | | | (18,832 | ) | Accrued liabilities and other | | | (51,991 | ) | | | (54,853 | ) | | | 69,336 | | | | 79,238 | | Net cash from operating activities | | | 96,033 | | | | 217,247 | | | | 623,409 | | | | 448,469 | | Investing activities: | | | | | | | | | | | | | | | | | Capital expenditures | | | (13,952 | ) | | | (4,702 | ) | | | (69,272 | ) | | | (53,735 | ) | Proceeds from sales of assets | | | 330 | | | | 340 | | | | 2,809 | | | | 671 | | Other | | | 5,571 | | | | 4,364 | | | | 14,008 | | | | 11,982 | | Net cash from investing activities | | | (8,051 | ) | | | 2 | | | | (52,455 | ) | | | (41,082 | ) | Financing Activities: | | | | | | | | | | | | | | | | | Borrowings on Term Loan Facilities | | | 1,000,000 | | | | — | | | | 1,000,000 | | | | — | | Repayments on Term Loan Facilities | | | (609,375 | ) | | | — | | | | (925,000 | ) | | | — | | Borrowings on Accounts Receivable Securitization Facility | | | — | | | | — | | | | — | | | | 227,061 | | Repayments on Accounts Receivable Securitization Facility | | | — | | | | — | | | | — | | | | (227,061 | ) | Borrowings on Revolving Loan Facilities | | | — | | | | — | | | | — | | | | 1,638,000 | | Repayments on Revolving Loan Facilities | | | — | | | | — | | | | — | | | | (1,756,189 | ) | Borrowings on Senior Notes | | | — | | | | — | | | | — | | | | 700,000 | | Repayments on Senior Notes | | | (700,000 | ) | | | — | | | | (700,000 | ) | | | — | | Borrowings on International Debt | | | — | | | | — | | | | — | | | | 31,222 | | Repayments on International Debt | | | — | | | | — | | | | — | | | | (36,383 | ) | Borrowings on notes payable | | | 39,890 | | | | 68,124 | | | | 149,287 | | | | 234,682 | | Repayments on notes payable | | | (40,142 | ) | | | (72,900 | ) | | | (149,739 | ) | | | (239,008 | ) | Share repurchases | | | — | | | | — | | | | — | | | | (200,269 | ) | Cash dividends paid | | | (52,385 | ) | | | (52,253 | ) | | | (209,484 | ) | | | (210,385 | ) | Payments to amend and refinance credit facilities | | | (42,661 | ) | | | (80 | ) | | | (43,186 | ) | | | (15,018 | ) | Other | | | (7,423 | ) | | | (4,163 | ) | | | (9,898 | ) | | | (4,483 | ) | Net cash from financing activities | | | (412,096 | ) | | | (61,272 | ) | | | (888,020 | ) | | | 142,169 | | Effect of changes in foreign exchange rates on cash | | | (5,701 | ) | | | 22,072 | | | | (32,908 | ) | | | 31,124 | |
HANESBRANDS INC. | 75
Table of Contents *Appendix A | Historical GAAP operating profit has been restated to reflect the 2018 adoption of new FASB accounting rules |
| | | | | | | | | Quarters Ended | | Years Ended | | | January 1, 2022 | | | January 2, 2021 | | | January 1, 2022 | | | January 2, 2021 | | | | | | | | | | | | | | | | | | | Change in cash, cash equivalents and restricted cash | | | (329,815 | ) | | | 178,049 | | | | (349,974 | ) | | | 580,680 | | Cash, cash equivalents and restricted cash at beginning of period | | | 890,444 | | | | 732,554 | | | | 910,603 | | | | 329,923 | | Cash, cash equivalents and restricted cash at end of period | | | 560,629 | | | | 910,603 | | | | 560,629 | | | | 910,603 | | Less restricted cash at end of period | | | — | | | | 1,166 | | | | — | | | | 1,166 | | Cash and cash equivalents at end of period | | $ | 560,629 | | | $ | 909,437 | | | $ | 560,629 | | | $ | 909,437 | | Balances included in the Condensed Consolidated Balance Sheets: | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 536,277 | | | $ | 900,615 | | | $ | 536,277 | | | $ | 900,615 | | Cash and cash equivalents included in current assets held for sale | | | 24,352 | | | | 8,822 | | | | 24,352 | | | | 8,822 | | Cash and cash equivalents at end of period | | $ | 560,629 | | | $ | 909,437 | | | $ | 560,629 | | | $ | 909,437 | |
(1) | The cash flows related to discontinued operations have not been segregated and remain included in the classificationmajor classes of pension cost. | ** | Diluted weighted average share outstanding has been recast for 4 for 1 stock split effective on March 4, 2015. | *** | Adjusted EPS is defined as diluted EPS fromassets and liabilities. Accordingly, the Condensed Consolidated Statements of Cash Flows include the results of continuing operations excluding actions and the tax effect on actions. | **** | Adjusted operating profit is defined as operating profit excluding actions.discontinued operations. |
76 |
Table of Contents HANESBRANDS INC. Table 6-A
Hanesbrands Inc. Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures (Dollars in thousands)
(Unaudited)thousands, except per share data) The following table presents(Unaudited)
| | Quarter Ended January 1, 2022 | | | | Gross Profit | | | Selling, General and Administrative Expenses | | | Operating Profit | | | Other Expenses | | | Income From Continuing Operations Before Income Tax Expense | | | Income Tax Expense | | | Income From Continuing Operations | | | Diluted Earnings Per Share From Continuing Operations (1) | | As reported | | $ | 667,728 | | | $ | (512,162 | ) | | $ | 155,566 | | | $ | (47,359 | ) | | $ | 72,900 | | | $ | (4,946 | ) | | $ | 67,954 | | | $ | 0.19 | | As a percentage of net sales | | | 38.1 | % | | | 29.2 | % | | | 8.9 | % | | | | | | | | | | | | | | | | | | | | | Restructuring and other action-related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Full Potential Plan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Professional services | | | — | | | | 7,824 | | | | 7,824 | | | | — | | | | 7,824 | | | | — | | | | 7,824 | | | | 0.02 | | Loss on classification of assets held for sale | | | — | | | | 38,364 | | | | 38,364 | | | | — | | | | 38,364 | | | | — | | | | 38,364 | | | | 0.11 | | Operating model | | | 2,397 | | | | 3,194 | | | | 5,591 | | | | — | | | | 5,591 | | | | — | | | | 5,591 | | | | 0.02 | | Supply chain segmentation | | | 3,102 | | | | — | | | | 3,102 | | | | — | | | | 3,102 | | | | — | | | | 3,102 | | | | 0.01 | | Technology | | | — | | | | 2,212 | | | | 2,212 | | | | — | | | | 2,212 | | | | — | | | | 2,212 | | | | 0.01 | | Other | | | — | | | | 7,464 | | | | 7,464 | | | | — | | | | 7,464 | | | | — | | | | 7,464 | | | | 0.02 | | Early extinguishment and refinancing of debt | | | — | | | | — | | | | — | | | | 45,699 | | | | 45,699 | | | | — | | | | 45,699 | | | | 0.13 | | Discrete tax benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | (8,050 | ) | | | (8,050 | ) | | | (0.02 | ) | Tax effect on actions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (14,477 | ) | | | (14,477 | ) | | | (0.04 | ) | Total restructuring and other action-related charges | | | 5,499 | | | | 59,058 | | | | 64,557 | | | | 45,699 | | | | 110,256 | | | | (22,527 | ) | | | 87,729 | | | | 0.25 | | As adjusted | | $ | 673,227 | | | $ | (453,104 | ) | | $ | 220,123 | | | $ | (1,660 | ) | | $ | 183,156 | | | $ | (27,473 | ) | | $ | 155,683 | | | $ | 0.44 | | As a percentage of net sales | | | 38.4 | % | | | 25.9 | % | | | 12.6 | % | | | | | | | | | | | | | | | | | | | | |
HANESBRANDS INC. | 77
Table of Contents | | Year Ended January 1, 2022 | | | Gross Profit | | | Selling, General and Administrative Expenses | | | Operating Profit | | | Other Expenses | | | Income From Continuing Operations Before Income Tax Expense | | | Income Tax Expense | | | Income From Continuing Operations | | | Diluted Earnings Per Share From Continuing Operations (1) | | As reported | | $ | 2,651,699 | | | $ | (1,853,971 | ) | | $ | 797,728 | | | $ | (53,586 | ) | | $ | 581,075 | | | $ | (60,107 | ) | | $ | 520,968 | | | $ | 1.48 | | As a percentage of net sales | | | 39.0 | % | | | 27.3 | % | | | 11.7 | % | | | | | | | | | | | | | | | | | | | | | Restructuring and other action- related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Full Potential Plan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Professional services | | | — | | | | 44,617 | | | | 44,617 | | | | — | | | | 44,617 | | | | — | | | | 44,617 | | | | 0.13 | | Loss on classification of assets held for sale | | | — | | | | 38,364 | | | | 38,364 | | | | — | | | | 38,364 | | | | — | | | | 38,364 | | | | 0.11 | | Operating model | | | 2,397 | | | | 20,794 | | | | 23,191 | | | | — | | | | 23,191 | | | | — | | | | 23,191 | | | | 0.07 | | Impairment of intangible assets | | | — | | | | 7,302 | | | | 7,302 | | | | — | | | | 7,302 | | | | — | | | | 7,302 | | | | 0.02 | | Supply chain segmentation | | | 7,815 | | | | (2,396 | ) | | | 5,419 | | | | — | | | | 5,419 | | | | — | | | | 5,419 | | | | 0.02 | | Technology | | | — | | | | 4,617 | | | | 4,617 | | | | — | | | | 4,617 | | | | — | | | | 4,617 | | | | 0.01 | | Other | | | (114 | ) | | | 8,314 | | | | 8,200 | | | | — | | | | 8,200 | | | | — | | | | 8,200 | | | | 0.02 | | Early extinguishment and refinancing of debt | | | — | | | | — | | | | — | | | | 45,699 | | | | 45,699 | | | | — | | | | 45,699 | | | | 0.13 | | Discrete tax benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | (27,147 | ) | | | (27,147 | ) | | | (0.08 | ) | Tax effect on actions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (26,518 | ) | | | (26,518 | ) | | | (0.08 | ) | Total restructuring and other action-related charges | | | 10,098 | | | | 121,612 | | | | 131,710 | | | | 45,699 | | | | 177,409 | | | | (53,665 | ) | | | 123,744 | | | | 0.35 | | As adjusted | | $ | 2,661,797 | | | $ | (1,732,359 | ) | | $ | 929,438 | | | $ | (7,887 | ) | | $ | 758,484 | | | $ | (113,772 | ) | | $ | 644,712 | | | $ | 1.83 | | As a percentage of net sales | | | 39.1 | % | | | 25.5 | % | | | 13.7 | % | | | | | | | | | | | | | | | | | | | | |
| | (1) | Amounts may not be additive due to rounding. |
Including the unfavorable foreign currency impact of $7 million, global Champion sales excluding C9 Champion increased approximately 10% in the fourth quarter of 2021 compared to the fourth quarter of 2020. On a reconciliationconstant currency basis, global Champion sales excluding C9 Champion increased approximately 12% in the fourth quarter of total reported2021 compared to the fourth quarter of 2020. Including the favorable foreign currency impact of $3 million, global Champion sales excluding C9 Champion increased approximately 25% in the fourth quarter of 2021 compared to the fourth quarter of 2019. On a constant currency basis, global Champion sales excluding C9 Champion increased approximately 25% in the fourth quarter of 2021 compared to the fourth quarter of 2019. 78 |
Table of Contents Table 6-B Hanesbrands Inc. Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures (in thousands, except per share data) (Unaudited) | | Quarter Ended January 2, 2021 | | | | Gross Profit | | | Selling, General and Administrative Expenses | | | Operating Profit (Loss) | | | Income (Loss) From Continuing Operations Before Income Tax Expense | | | Income Tax Benefit (Expense) | | | Income (Loss) From Continuing Operations | | | Diluted Earnings (Loss) Per Share From Continuing Operations (1) | | As reported | | $ | 99,199 | | | $ | (495,706 | ) | | $ | (396,507 | ) | | $ | (445,146 | ) | | $ | 152,948 | | | $ | (292,198 | ) | | $ | (0.83 | ) | As a percentage of net sales | | | 5.9 | % | | | 29.3 | % | | | (23.5 | )% | | | | | | | | | | | | | | | | | Restructuring and other action-related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Supply chain actions | | | 836 | | | | — | | | | 836 | | | | 836 | | | | — | | | | 836 | | | | 0.00 | | Other | | | (63 | ) | | | 515 | | | | 452 | | | | 452 | | | | — | | | | 452 | | | | 0.00 | | COVID-19 related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Goodwill | | | — | | | | 25,173 | | | | 25,173 | | | | 25,173 | | | | — | | | | 25,173 | | | | 0.07 | | Full Potential Plan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Inventory SKU rationalization | | | 192,704 | | | | — | | | | 192,704 | | | | 192,704 | | | | — | | | | 192,704 | | | | 0.55 | | PPE inventory write-off | | | 362,913 | | | | — | | | | 362,913 | | | | 362,913 | | | | — | | | | 362,913 | | | | 1.03 | | PPE vendor commitments | | | 26,400 | | | | — | | | | 26,400 | | | | 26,400 | | | | — | | | | 26,400 | | | | 0.08 | | Write-off of acquisition tax asset | | | — | | | | 16,858 | | | | 16,858 | | | | 16,858 | | | | — | | | | 16,858 | | | | 0.05 | | Discrete tax benefits | | | — | | | | — | | | | — | | | | — | | | | (66,515 | ) | | | (66,515 | ) | | | (0.19 | ) | Tax effect on actions | | | — | | | | — | | | | — | | | | — | | | | (118,133 | ) | | | (118,133 | ) | | | (0.34 | ) | Total restructuring and other action-related charges | | | 582,790 | | | | 42,546 | | | | 625,336 | | | | 625,336 | | | | (184,648 | ) | | | 440,688 | | | | 1.25 | | As adjusted | | $ | 681,989 | | | $ | (453,160 | ) | | $ | 228,829 | | | $ | 180,190 | | | $ | (31,700 | ) | | $ | 148,490 | | | $ | 0.42 | | As a percentage of net sales | | | 40.4 | % | | | 26.8 | % | | | 13.5 | % | | | | | | | | | | | | | | | | |
HANESBRANDS INC. | 79
Table of Contents | | Year Ended January 2, 2021 | | | | Gross Profit | | | Selling, General and Administrative Expenses | | | Operating Profit | | | Income (Loss) From Continuing Operations Before Income Tax Expense | | | Income Tax Benefit (Expense) | | | Income (Loss) From Continuing Operations | | | Diluted Earnings (Loss) Per Share From Continuing Operations (1) | | As reported | | $ | 1,602,700 | | | $ | (1,560,034 | ) | | $ | 42,666 | | | $ | (142,227 | ) | | $ | 109,940 | | | $ | (32,287 | ) | | $ | (0.09 | ) | As a percentage of net sales | | | 26.2 | % | | | 25.5 | % | | | 0.7 | % | | | | | | | | | | | | | | | | | Restructuring and other action- related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Supply chain actions | | | 19,636 | | | | — | | | | 19,636 | | | | 19,636 | | | | — | | | | 19,636 | | | | 0.06 | | Program exit costs | | | 9,387 | | | | 467 | | | | 9,854 | | | | 9,854 | | | | — | | | | 9,854 | | | | 0.03 | | Other | | | (440 | ) | | | 8,203 | | | | 7,763 | | | | 7,763 | | | | — | | | | 7,763 | | | | 0.02 | | COVID-19 related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Supply chain re-startup | | | 45,149 | | | | 3,459 | | | | 48,608 | | | | 48,608 | | | | — | | | | 48,608 | | | | 0.14 | | Bad debt | | | — | | | | 9,418 | | | | 9,418 | | | | 9,418 | | | | — | | | | 9,418 | | | | 0.03 | | Inventory | | | 14,869 | | | | — | | | | 14,869 | | | | 14,869 | | | | — | | | | 14,869 | | | | 0.04 | | Goodwill | | | — | | | | 25,173 | | | | 25,173 | | | | 25,173 | | | | — | | | | 25,173 | | | | 0.07 | | Full Potential Plan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Inventory SKU rationalization | | | 192,704 | | | | — | | | | 192,704 | | | | 192,704 | | | | — | | | | 192,704 | | | | 0.55 | | PPE inventory write-off | | | 362,913 | | | | — | | | | 362,913 | | | | 362,913 | | | | — | | | | 362,913 | | | | 1.03 | | PPE vendor commitments | | | 26,400 | | | | — | | | | 26,400 | | | | 26,400 | | | | — | | | | 26,400 | | | | 0.07 | | Write-off of acquisition tax asset | | | — | | | | 16,858 | | | | 16,858 | | | | 16,858 | | | | — | | | | 16,858 | | | | 0.05 | | Discrete tax benefits | | | — | | | | — | | | | — | | | | — | | | | (69,628 | ) | | | (69,628 | ) | | | (0.20 | ) | Tax effect on actions | | | — | | | | — | | | | — | | | | — | | | | (135,714 | ) | | | (135,714 | ) | | | (0.38 | ) | Total restructuring and other action-related charges | | | 670,618 | | | | 63,578 | | | | 734,196 | | | | 734,196 | | | | (205,342 | ) | | | 528,854 | | | | 1.50 | | As adjusted | | $ | 2,273,318 | | | $ | (1,496,456 | ) | | $ | 776,862 | | | $ | 591,969 | | | $ | (95,402 | ) | | $ | 496,567 | | | $ | 1.40 | | As a percentage of net sales | | | 37.1 | % | | | 24.4 | % | | | 12.7 | % | | | | | | | | | | | | | | | | |
| | (1) | Amounts may not be additive due to rounding. |
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Table of Contents Table 6-C Hanesbrands Inc. Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures (in thousands, except per share data) (Unaudited) | | Quarter Ended December 28, 2019 | | | | Net Sales | | | Gross Profit | | | Selling, General and Administrative Expenses | | | Operating Profit | | | Income From Continuing Operations Before Income Tax Expense | | | Income Tax Expense | | | Income From Continuing Operations | | | Diluted Earnings Per Share From Continuing Operations (1) | | As reported | | $ | 1,610,012 | | | $ | 633,129 | | | $ | (403,123 | ) | | $ | 230,006 | | | $ | 182,142 | | | $ | (23,528 | ) | | $ | 158,614 | | | $ | 0.43 | | Less exited | | | (87,935 | ) | | | (30,514 | ) | | | 9,307 | | | | (21,207 | ) | | | (21,207 | ) | | | 1,241 | | | | (19,966 | ) | | | (0.05 | ) | programs (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As rebased | | | 1,522,077 | | | | 602,615 | | | | (393,816 | ) | | | 208,799 | | | | 160,935 | | | | (22,287 | ) | | | 138,648 | | | | 0.38 | | As a percentage of net sales | | | | | | | 39.6 | % | | | 25.9 | % | | | 13.7 | % | | | | | | | | | | | | | | | | | Restructuring and other action-related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Supply chain actions | | | — | | | | 13,622 | | | | — | | | | 13,622 | | | | 13,622 | | | | — | | | | 13,622 | | | | 0.04 | | Program exit costs | | | — | | | | 4,616 | | | | — | | | | 4,616 | | | | 4,616 | | | | — | | | | 4,616 | | | | 0.01 | | Other | | | — | | | | — | | | | 829 | | | | 829 | | | | 829 | | | | — | | | | 829 | | | | 0.00 | | Tax effect on actions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (16,032 | ) | | | (16,032 | ) | | | (0.04 | ) | Total restructuring and other action-related charges | | | — | | | | 18,238 | | | | 829 | | | | 19,067 | | | | 19,067 | | | | (16,032 | ) | | | 3,035 | | | | 0.01 | | As adjusted | | $ | 1,522,077 | | | $ | 620,853 | | | $ | (392,987 | ) | | $ | 227,866 | | | $ | 180,002 | | | $ | (38,319 | ) | | $ | 141,683 | | | $ | 0.39 | |
HANESBRANDS INC. | 81
Table of Contents Table 6-C Hanesbrands Inc. Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures (in thousands, except per share data) (Unaudited) | | Quarter Ended December 28, 2019 | | | Net Sales | | | Gross Profit | | | Selling, General and Administrative Expenses | | | Operating Profit | | | Income From Continuing Operations Before Income Tax Expense | | | Income Tax Expense | | | Income From Continuing Operations | | | Diluted Earnings Per Share From Continuing Operations (1) | | As a percentage of net sales | | | | | | | 40.8 | % | | | 25.8 | % | | | 15.0 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended Dec 28, 2019 | | | Net Sales | | | Gross Profit | | | Selling, General and Administrative Expenses | | | Operating Profit | | | Income From Continuing Operations Before Income Tax Expense | | | Income Tax Expense | | | Income From Continuing Operations | | | Diluted Earnings Per Share From Continuing Operations (1) | | As reported | | $ | 6,425,716 | | | $ | 2,428,702 | | | $ | (1,578,017 | ) | | $ | 850,685 | | | $ | 643,560 | | | $ | (70,236 | ) | | $ | 573,324 | | | $ | 1.57 | | Less exited programs (2) | | | (419,447 | ) | | | (131,861 | ) | | | 37,002 | | | | (94,859 | ) | | | (94,859 | ) | | | 11,629 | | | | (83,230 | ) | | | (0.23 | ) | As rebased | | | 6,006,269 | | | | 2,296,841 | | | | (1,541,015 | ) | | | 755,826 | | | | 548,701 | | | | (58,607 | ) | | | 490,094 | | | | 1.34 | | As a percentage of net sales | | | | | | | 38.2 | % | | | 25.7 | % | | | 12.6 | % | | | | | | | | | | | | | | | | | Restructuring and other action-related charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Supply chain actions | | | — | | | | 52,832 | | | | — | | | | 52,832 | | | | 52,832 | | | | — | | | | 52,832 | | | | 0.14 | | Program exit costs | | | — | | | | 4,616 | | | | — | | | | 4,616 | | | | 4,616 | | | | — | | | | 4,616 | | | | 0.01 | | Other | | | — | | | | — | | | | 5,067 | | | | 5,067 | | | | 5,067 | | | | — | | | | 5,067 | | | | 0.01 | | Tax effect on actions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (22,159 | ) | | | (22,159 | ) | | | (0.06 | ) | Total restructuring and other action-related charges | | | — | | | | 57,448 | | | | 5,067 | | | | 62,515 | | | | 62,515 | | | | (22,159 | ) | | | 40,356 | | | | 0.11 | | As adjusted | | $ | 6,006,269 | | | $ | 2,354,289 | | | $ | (1,535,948 | ) | | $ | 818,341 | | | $ | 611,216 | | | $ | (80,766 | ) | | $ | 530,450 | | | $ | 1.45 | | As a percentage of net sales | | | | | | | 39.2 | % | | | 25.6 | % | | | 13.6 | % | | | | | | | | | | | | | | | | |
| | (1) | Amounts may not be additive due to rounding. | (2) | Includes the results for the exited C9 Champion mass program and the DKNY intimate apparel license. |
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Table of Contents Table 6-D Hanesbrands Inc. Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures (in thousands, except per share data) (Unaudited) | | Quarter Ended December 28, 2019 | | | As Reported | | | Less: Exited Programs (1) | | | Adjusted for Exited Programs | | | Less: Restructuring and other action-related charges | | | Rebased | | Segment net sales: | | | | | | | | | | | | | | | | | | | | | Innerwear | | $ | 569,630 | | | $ | 11,328 | | | $ | 558,302 | | | $ | — | | | $ | 558,302 | | Activewear | | | 452,970 | | | | 76,607 | | | | 376,363 | | | | — | | | | 376,363 | | International | | | 495,798 | | | | — | | | | 495,798 | | | | — | | | | 495,798 | | Other | | | 91,614 | | | | — | | | | 91,614 | | | | — | | | | 91,614 | | Total net sales | | $ | 1,610,012 | | | $ | 87,935 | | | $ | 1,522,077 | | | $ | — | | | $ | 1,522,077 | | Segment operating profit: | | | | | | | | | | | | | | | | | | | | | Innerwear | | $ | 140,368 | | | $ | 2,423 | | | $ | 137,945 | | | $ | — | | | $ | 137,945 | | Activewear | | | 71,633 | | | | 18,784 | | | | 52,849 | | | | — | | | | 52,849 | | International | | | 85,148 | | | | — | | | | 85,148 | | | | — | | | | 85,148 | | Other | | | 10,112 | | | | — | | | | 10,112 | | | | — | | | | 10,112 | | General corporate expenses/other | | | (58,188 | ) | | | — | | | | (58,188 | ) | | | — | | | | (58,188 | ) | Restructuring and other action-related charges | | | (19,067 | ) | | | — | | | | (19,067 | ) | | | (19,067 | ) | | | — | | Total operating profit | | $ | 230,006 | | | $ | 21,207 | | | $ | 208,799 | | | $ | (19,067 | ) | | $ | 227,866 | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 28, 2019 | | | | As Reported | | | Less: Exited Programs (1) | | | Adjusted for Exited Programs | | | Less: Restructuring and other action-related charges | | | Rebased | | Segment net sales: | | | | | | | | | | | | | | | | | | | | | Innerwear | | $ | 2,302,632 | | | $ | 58,154 | | | $ | 2,244,478 | | | $ | — | | | $ | 2,244,478 | | Activewear | | | 1,854,704 | | | | 361,293 | | | | 1,493,411 | | | | — | | | | 1,493,411 | | International | | | 1,930,828 | | | | — | | | | 1,930,828 | | | | — | | | | 1,930,828 | | Other | | | 337,552 | | | | — | | | | 337,552 | | | | — | | | | 337,552 | | Total net sales | | $ | 6,425,716 | | | $ | 419,447 | | | $ | 6,006,269 | | | $ | — | | | $ | 6,006,269 | | Segment operating profit: | | | | | | | | | | | | | | | | | | | | | Innerwear | | $ | 515,991 | | | $ | 10,152 | | | $ | 505,839 | | | $ | — | | | $ | 505,839 | | Activewear | | | 281,319 | | | | 84,707 | | | | 196,612 | | | | — | | | | 196,612 | | International | | | 331,322 | | | | — | | | | 331,322 | | | | — | | | | 331,322 | | Other | | | 33,439 | | | | — | | | | 33,439 | | | | — | | | | 33,439 | | General corporate expenses/other | | | (248,871 | ) | | | — | | | | (248,871 | ) | | | — | | | | (248,871 | ) | Restructuring and other action-related charges | | | (62,515 | ) | | | — | | | | (62,515 | ) | | | (62,515 | ) | | | — | | Total operating profit | | $ | 850,685 | | | $ | 94,859 | | | $ | 755,826 | | | $ | (62,515 | ) | | $ | 818,341 | |
| | (1) | Includes the results for the exited C9 Champion mass program and the DKNY intimate apparel license. |
HANESBRANDS INC. | 83
Table of Contents Table 6-E Hanesbrands Inc. Supplemental Financial Information Reconciliation of Select GAAP Measures to Non-GAAP Measures (in thousands, except per share data) (Unaudited) | | Last Twelve Months | | | | January 1, 2022 | | | January 2, 2021 | | EBITDA (1): | | | | | | | | | Income (loss) from continuing operations | | $ | 520,968 | | | $ | (32,287 | ) | Interest expense, net | | | 163,067 | | | | 164,238 | | Income tax expense (benefit) | | | 60,107 | | | | (109,940 | ) | Depreciation and amortization | | | 110,130 | | | | 114,967 | | Total EBITDA | | | 854,272 | | | | 136,978 | | Total restructuring and other action-related charges (excluding tax effect on actions) | | | 177,409 | | | | 734,196 | | Stock compensation expense | | | 16,405 | | | | 18,507 | | Total EBITDA, as adjusted | | $ | 1,048,086 | | | $ | 889,681 | | Net debt: | | | | | | | | | Debt (current and long-term debt) | | $ | 3,351,091 | | | $ | 4,003,370 | | (Less) Cash and cash equivalents | | | (536,277 | ) | | | (900,615 | ) | Net debt | | $ | 2,814,814 | | | $ | 3,102,755 | | Net debt/EBITDA, as adjusted | | | 2.7 | | | | 3.5 | |
| | (1) | Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure. | | |
| | Quarters Ended | | | Years Ended | | | | January 1, 2022 | | | January 2, 2021 | | | January 1, 2022 | | | January 2, 2021 | | Free cash flow (1): | | | | | | | | | | | | | | | | | Net cash from operating activities | | $ | 96,033 | | | $ | 217,247 | | | $ | 623,409 | | | $ | 448,469 | | Capital expenditures | | | (13,952 | ) | | | (4,702 | ) | | | (69,272 | ) | | | (53,735 | ) | Free cash flow | | $ | 82,081 | | | $ | 212,545 | | | $ | 554,137 | | | $ | 394,734 | |
| | (1) | Free cash flow includes the results from continuing and discontinued operations. |
Table 7 Hanesbrands Inc. Supplemental Financial Information Reconciliation of GAAP Outlook to Adjusted Outlook (in thousands, except per share data) (Unaudited) | Quarter Ended | | Year Ended | | April 2, 2022 | | December 31, 2022 | Operating profit outlook, as calculated under GAAP | $120,000 to $150,000 | | $780,000 to $850,000 | Restructuring and other action-related charges | $15,000 | | $60,000 | Operating profit outlook, as adjusted | $135,000 to $165,000 | | $840,000 to $910,000 | Diluted earnings per share from continuing operations, as calculated under GAAP (1) | $0.20 to $0.27 | | $1.50 to $1.67 | Restructuring and other action-related charges | $0.04 | | $0.14 | Diluted earnings per share from continuing operations, as adjusted | $0.24 to $0.31 | | $1.64 to $1.81 |
| | (1) | The company expects approximately 353 million diluted weighted average shares outstanding for both the quarter ended April 2, 2022 and the year ended December 31, 2022. |
Hanesbrands is unable to reconcile projections of financial performance beyond 2022 without unreasonable efforts, because the Company cannot predict, with a reasonable degree of certainty, the type and extent of certain items that would be expected to impact these figures in 2023 and beyond, such as net sales, to organic net sales for the year ended December 29, 2018operating profit, tax rates and a comparison to prior year:action related charges. | | Year Ended December 29, 2018 | | | Reported Net Sales | | Acquisitions(1) | | Organic Net Sales | | % Change | Net Sales | | $ | 6,803,955 | | $ | 176,587 | | $ | 6,627,368 | | 2.4 | % |
(1) | Net Sales derived from businesses acquired within the last 12 months. |
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Table of Contents
1000 EAST HANES MILL ROAD WINSTON-SALEM, NC 27105
AUTHORIZE YOUR PROXY BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April 18, 201921, 2022 for shares held in a Plan. 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/HBI2022 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. AUTHORIZE YOUR PROXY BY PHONE - 1-800-690-6903
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Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Hanesbrands Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONSIf you would like to reduce the costs incurred by Hanesbrands Inc. in mailing proxy materials, you can consent to receiving all future meeting notices, 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.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | | E56497-P17209 | D69034-P67627 | KEEP THIS PORTION FOR YOUR RECORDS | | | | | DETACH AND RETURN THIS PORTION ONLY | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. HANESBRANDS INC. | Vote on Directors
| | The Board of Directors recommends that you vote FOR each of the following nominees:
| | 1. | | Election of Directors
| | | | | | | | | | Nominees:
| | For | | Against | | Abstain | | | | 1a. | | Geralyn R. Breig
| | ☐ | | ☐ | | ☐ | | | | 1b. | | Gerald W. Evans, Jr.
| | ☐ | | ☐ | | ☐ | | | | 1c. | | Bobby J. Griffin
| | ☐ | | ☐ | | ☐ | | | | 1d. | | James C. Johnson
| | ☐ | | ☐ | | ☐ | | | | 1e. | | Franck J. Moison
| | ☐ | | ☐ | | ☐ | | | | 1f. | | Robert F. Moran
| | ☐ | | ☐ | | ☐ | | | | 1g. | | Ronald L. Nelson
| | ☐ | | ☐ | | ☐ | | | | 1h. | | David V. Singer
| | ☐ | | ☐ | | ☐ | | | | 1i. | | Ann E. Ziegler
| | ☐ | | ☐ | | ☐ |
Vote on Proposals
| | | | | | | | | | | | | | The Board of Directors recommends that you vote FOR the following proposals:
| | For | | Against | | Abstain | | | | | | | | 2. | | To ratify the appointment of PricewaterhouseCoopers LLP as Hanesbrands' independent registered public accounting firm for Hanesbrands' 2019 fiscal year
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | 3. | 1. | To approve, on an advisory basis, executive compensation as described in the proxy statement for the Annual Meeting Election of Directors | | ☐ | | ☐ | | ☐ | | | | | For | | Against | | Abstain | | | Nominees: | | | | | | | | | | | | | | | | | | | 1a. | Cheryl K. Beebe | | o | | o | | o | | | | | | | | | | | | | 1b. | Stephen B. Bratspies | | o | | o | | o | | | | | | | | | | | | | 1c. | Geralyn R. Breig | | o | | o | | o | | | | | | | | | | | | | 1d. | Bobby J. Griffin | | o | | o | | o | | | | | | | | | | | | | 1e. | James C. Johnson | | o | | o | | o | | | | | | | | | | | | | 1f. | Franck J. Moison | | o | | o | | o | | | | | | | | | | | | | 1g. | Robert F. Moran | | o | | o | | o | | | | | | | | | | | | | 1h. | Ronald L. Nelson | | o | | o | | o | | | | | | | | | | | | | 1i. | William S. Simon | | o | | o | | o | | | | | | | | | | | | | 1j. | Ann E. Ziegler | | o | | o | | o | | | |
| | | | | | | | | | | | | | | | | | | | | | | | Vote on Proposals | | | | | | | | | | | | | | The Board of Directors recommends that you vote FOR the following proposals: | | For | | Against | | Abstain | | | | | | | | | 2. | To ratify the appointment of PricewaterhouseCoopers LLP as Hanesbrands’ independent registered public accounting firm for Hanesbrands’ 2022 fiscal year | | o | | o | | o | | | | | | | | | 3. | To approve, on an advisory basis, named executive officer compensation as described in the proxy statement for the Annual Meeting | | o | | o | | o | | | | | | | | | | | | | | | | | | | For address changes and/or comments, please check this box and write them on the back where indicated.
| | | | | | ☐ | Please indicate if you plan to attend this meeting. | | ☐ | | ☐ | | | | | Yes | | No | | |
| Please sign exactly as name appears on the records of Hanesbrands Inc. and date. If the shares are held jointly, each holder should sign. When signing as an attorney, executor, administrator, trustee, guardian, officer of a corporation or other entity or in another representative capacity, please give the full title under signature(s).
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2019
2022 Annual Meeting of Stockholders
2:15 p.m.9:00 a.m., Eastern time, April 23, 201926, 2022 Hanesbrands Inc. 1000 E. Hanes Mill Rd. Winston-Salem, NC 27105 Please present this admission ticket and some form of government-issued photo identification (such as a valid driver's license or passport) in order to gain admittance to the meeting. This ticket admits only the stockholder listed on the reverse side and is not transferable. No cameras, recording devices or large packages will be permitted in the meeting room. Bags will be subject to a search.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS The Annual Meeting of Stockholders of Hanesbrands Inc. ("Hanesbrands"(“Hanesbrands”) will be held on Tuesday, April 23, 201926, 2022 at 2:15 p.m.9:00 a.m., Eastern time, virtually at Hanesbrands Inc., 1000 E. Hanes Mill Road, Winston-Salem, North Carolina 27105.www.virtualshareholdermeeting.com/HBI2022. Stockholders of record at the close of business on February 19, 201915, 2022 are entitled to notice of and to vote at the meeting. Stockholders will (1) elect nineten directors, (2) consider and vote on a proposal to ratify the appointment of PricewaterhouseCoopers LLP as Hanesbrands'Hanesbrands’ independent registered public accounting firm for its 20192022 fiscal year, (3) consider and vote on a proposal to approve, on an advisory basis, named executive officer compensation as described in the proxy statement for the Annual Meeting and (4) transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The notice and proxy statement and annual report are available at www.proxyvote.com. | | Δ | ∆ DETACH PROXY CARD HERE Δ | ∆ | E56498-P17209D69035-P67627 |
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, APRIL 23, 201926, 2022 The undersigned holder of common stock of Hanesbrands Inc., a Maryland corporation ("Hanesbrands"(“Hanesbrands”), hereby appoints Gerald W. Evans, Jr.Stephen B. Bratspies and JoiaTracy M. Johnson,Preston, or either of them, as proxies for the undersigned, with full power of substitution in eacheither of them, to attend the Annual Meeting of Stockholders of Hanesbrands Inc. to be heldvirtually at Hanesbrands Inc., 1000 E. Hanes Mill Road, Winston-Salem, North Carolina 27105,www.virtualshareholdermeeting.com/HBI2022, on April 23, 2019,26, 2022, at 2:15 p.m.9:00 a.m., Eastern time, and any postponement or adjournment thereof, to cast on behalf of the undersigned all votes that the undersigned is entitled to cast at such meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned hereby acknowledges receipt of the notice of the Annual Meeting of Stockholders and of the accompanying proxy statement, the terms of each of which are incorporated by reference, and revokes any proxy heretofore given with respect to such meeting.The votes entitled to be cast by the undersigned will be cast as instructed. If this proxy is executed, but no instruction is given, the votes entitled to be cast by the undersigned will be cast FOR each of the nominees for director, FOR proposal 2 and FOR proposal 3, all of which are set forth on the reverse side hereof. The votes entitled to be cast by the undersigned will be cast in the discretion of the proxy holder on any other matter that may properly come before the meeting and any adjournment or postponement thereof. The Board of Directors recommends a vote FOR each nominee for director, FOR proposal 2 and FOR proposal 3. Address Changes/Comments: | | | |
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
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