UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant ý☑ Filed by a Party other than the Registrant ¨☐
Check the appropriate box:
|
| | | | | | | | | | | | | |
¨☐ | | Preliminary Proxy Statement |
¨☐ | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
ý☑ | | Definitive Proxy Statement |
¨☐ | | Definitive Additional Materials |
¨☐ | | Soliciting Material Pursuant to §240.14a-12 |
lululemon athletica inc. |
(Name of Registrant as Specified In Its Charter) |
|
lululemon athletica inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| | | | | | | | | | | | | | |
| Payment of Filing Fee (Check the appropriate box): |
ý☑ | | No fee required |
¨☐ | | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| | (1(1) | ) | | Title of each class of securities to which transaction applies: |
| | (2(2) | ) | | Aggregate number of securities to which transaction applies: |
| | (3(3) | ) | | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| | (4(4) | ) | | Proposed maximum aggregate value of transaction: |
| | (5(5) | ) | | Total fee paid: |
¨☐ | | Fee paid previously with preliminary materials. |
¨☐ | | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| | (1(1) | ) | | Amount Previously Paid: |
| | (2(2) | ) | | Form, Schedule or Registration Statement No.: |
| | (3(3) | ) | | Filing Party: |
| | (4(4) | ) | | Date Filed: |
TABLE OF CONTENTS
TO OUR STOCKHOLDERS:SHAREHOLDERS:
We are pleased to invite you to attend the annual meeting of stockholdersshareholders of lululemon athletica inc. on Thursday,Wednesday, June 2, 2016,9, 2021, beginning at 1:8:00 p.m.a.m., Pacific Time. This year'sThe annual meeting will be a completely virtual meeting of stockholders,shareholders, which will be conducted solely via live webcast. You will be able to attend the annual meeting of stockholdersshareholders online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/LULU2016.lulu2021. You also will be able to vote your shares electronically at the annual meeting.
We are excited to continue to embrace the latest technology to provide expanded access, improved communication, and cost savings for our stockholdersshareholders and the company. We believe hosting a virtual meeting willhelps enable increased stockholdergreater shareholder attendance at the annual meeting by allowing shareholders that might not otherwise be able to travel to a physical meeting to attend online and participationparticipate from any location around the world.
Details regarding how to attend the meeting online and the business to be conducted at the annual meeting are more fully described in the accompanying Notice of Annual Meetingnotice and Proxy Statement.proxy statement.
This year we are again providing access to our proxy materials over the Internet under the U.S. Securities and Exchange Commission's "notice and access" rules. As a result, we are mailingsending to many of our stockholdersshareholders a notice instead of a paper copy of this proxy statement and our 2015 Annual Report.2020 annual report. The notice contains instructions on how to access those documents over the Internet. The notice also contains instructions on how each of those stockholdersshareholders can receive a paper copy of our proxy materials, including this proxy statement, our 2015 Annual Report,2020 annual report, and a form of proxy card or voting instruction card. All stockholdersshareholders who do not receive a notice, including stockholdersshareholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically. Continuing to employ this distribution process will conserve natural resources and reduce the costs of printing and distributing our proxy materials.
Your vote is important. Regardless of whether you plan to participate in the annual meeting online, we hope you will vote as soon as possible. You may vote by proxy over the Internet, telephone or, if you received paper copies of the proxy materials by mail, you may also vote by mail by following the instructions on the proxy card or voting instruction card. Voting over the Internet, telephone, or by writtenpaper proxy, or voting instruction card will ensure your representation at the annual meeting regardless of whether you attend the virtual meeting.
Thank you for your ongoing support of, and continued interest in, lululemon.
Sincerely,
|
| |
/s/ Laurent PotdevinCalvin McDonald |
Laurent PotdevinCalvin McDonald |
| Chief Executive Officer |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS
To Be Held June 2, 2016
Notice is hereby given thatYou are invited to attend the 20162021 annual meeting of the stockholdersshareholders of lululemon athletica inc., a Delaware corporation, will be held on corporation.
Date
June 2, 2016, beginning9, 2021 at 1:8:00 p.m.a.m., Pacific Time via live(Online check-in will begin at 7:30 a.m., Pacific Time)
Virtual Meeting
Live webcast at www.virtualshareholdermeeting.com/LULU2016, for the following purposes:lulu2021.
1. To elect three Class III directors to hold office for a three-year term and until their respective successors are elected and qualified.
2. To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending January 29, 2017.Proposals
3. To transact such other business as may properly come before the meeting. | | | | | | | | | | | | | | |
| Proposal | Board recommends you vote: |
| Proposal No. 1 | To elect three Class II directors to hold a three-year term and to elect oneClass Idirector to hold office for a 2-year term, until each director's respective successors are elected and qualified | Forü |
| Proposal No. 2 | To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending January 30, 2022 | Forü |
| Proposal No. 3 | To approve, on an advisory basis, the compensation of our named executive officers | Forü |
| Other | To transact on other business that may come before, or if properly presented at the meeting | |
Our board of directors recommends that you
Shareholder vote "FOR":
Proposal No. 1 (the election to our board of directors of the three nominees named in this proxy statement); and
Proposal No. 2 (the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending January 29, 2017).
Other Information
At the 2011 annual meeting of stockholders, our stockholders had the opportunity, on a non-binding advisory basis, to inform us on how often stockholders wish to include a "say-on-pay" proposal in our proxy statement. The voting results showed significant support by stockholders for a "say-on-pay" vote every three years. Accordingly, we held a stockholder advisory vote on executive compensation at our 2014 annual meeting of stockholders. Our next "say-on-pay" vote will be held at our 2017 annual meeting of stockholders.
StockholdersShareholders of record at the close of business on April 13, 20162021, are entitled to notice of and to vote at the annual meeting and any adjournment or postponement thereof. In accordance with our bylaws, aA list of those stockholdersshareholders entitled to vote at the annual meeting will be available for examination by any stockholder,shareholder for any purpose relatinggermane to the meeting for a period of ten days prior to the meeting at our principal offices. If you would like to schedule an appointment to examine the office of the Corporate Secretary, lululemon athletica inc., 1818 Cornwall Avenue, Vancouver, British Columbia, beginning April 22, 2016.shareholder list during this period, please email our company secretary at investors@lululemon.com. The shareholder list will also be available atto shareholders of record during the annual meeting.meeting on the virtual meeting website.
Online Access to Proxy
We are pleased to continue using the U.S. Securities and Exchange Commission's "Notice"notice and Access"access" delivery model allowing companies to furnish proxy materials to their stockholdersshareholders over the Internet. We believe that this delivery process will expedite stockholders'shareholders' receipt of proxy materials and lower the costs and reduce the environmental impact of the annual meeting. On or about April 22, 2016,27, 2021, we intend to mailsend to our stockholdersshareholders a Notice of Internet Availability of Proxy Materials, containing instructions on how to access our proxy statement and Annual Report to Stockholders for the fiscal year ended January 31, 2016,2020 annual report, on how to vote online, and on how to access the virtual annual meeting.meeting and the shareholder list. This notice also provides instructions on how to receive a paper copy of the proxy materials by mail.
Technical Help
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page.
All stockholders are invited to attend the annual meeting. The annual meeting will begin promptly at 1:00 p.m., Pacific Time. Online check-in will begin at 12:30 p.m., Pacific Time, and you should allow ample time for the online check-in procedures. Whether or not you plan to attend the annual meeting, please vote your shares via the Internet or telephone, as described in the accompanying materials, as soon as possible to assureensure that your shares are represented at the meeting, or, if you elect to receive a paper copy of the proxy card by mail, you may mark, sign and date the proxy card and return it in the enclosed postage-paid envelope. If you attend the virtual meeting you will, of course, have the right to revoke the proxy and vote your shares electronically at the meeting. | | | | | |
| |
| |
| By order of the board of directors, |
| |
| /s/ Laurent PotdevinCalvin McDonald |
| Laurent PotdevinCalvin McDonald |
| Chief Executive Officer |
Vancouver, British Columbia
April 15, 201627, 2021
LULULEMON ATHLETICA INC.
PROXY STATEMENT
20162021 ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS
THURSDAY,WEDNESDAY, JUNE 2, 20169, 2021
GENERAL INFORMATION
This proxy statement is being provided to solicit proxies on behalf of the board of directors of lululemon athletica inc. for use at the annual meeting of stockholdersshareholders to be held on Thursday,Wednesday, June 2, 2016,9, 2021, at 1:8:00 p.m.a.m., Pacific Time.
Our principal offices are located at 1818 Cornwall Avenue, Vancouver, British Columbia V6J 1C7.
Virtual Annual Meeting
We are pleased to inform you that this year's meeting will again be a completely virtual meeting, which will be conducted solely via live webcast. You will be able to attend the annual meeting online, vote your shares electronically, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/LULU2016.lulu2021. We expect to first make this proxy statement available, together with our Annual Report for the fiscal year ended January 31, 2016,2020 annual report, to stockholders on approximately April 22, 2016.
Our principal offices are located at 1818 Cornwall Avenue, Vancouver, British Columbia V6J 1C7.
Internet Availability of Annual Meeting Materials
Under rules adopted by the U.S. Securities and Exchange Commission, or SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials, to our stockholders of record. All stockholders will have the ability to access the proxy materials on the website referred to in the notice or to request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the notice. You will not receive a printed copy of the proxy materials unless you request one in the manner set forth in the notice. This permits us to conserve natural resources and reduces our printing costs, while giving stockholders a convenient and efficient way to access our proxy materials and vote their shares.
We intend to mail the noticeshareholders on or about April 22, 201627, 2021.
Our board of directors considers the appropriate format for our annual meeting of shareholders on an annual basis. Similar to all stockholderslast year, we have again taken into account the ongoing impact of record entitledCOVID-19, which has heightened public health and travel concerns for in-person annual meetings. Accordingly, we are pleased to continue to embrace the latest technology to provide expanded access, improved communication, and cost savings for our shareholders and lululemon. Our virtual format allows shareholders to submit questions and comments and to vote during the meeting. We believe the virtual meeting format allows our shareholders to engage with us no matter where they live in the world, and is accessible and available on any internet-connected device, be it a phone, a tablet, or a computer. We believe the benefits of a virtual meeting allow our shareholders to have robust engagement with lululemon, and is in the best interests of our shareholders at the annual meeting.this time.
Who May Vote
Only persons who are holders of record of our common stock and holders of record ofor our special votingvoting stock at the close of business on April 13, 2016,2021, which is the record date, will be entitled to notice of and to vote at the annual meeting. On the record date, 127,520,121 sharesdate, 125,127,575 shares of common stock and 9,803,819 shares 5,203,012 shares of special voting stock were issued and outstanding. EachEach share of common stock is entitled to one vote at the annual meeting and each share of special voting stock is entitled to one vote at the annual meeting. Holders of common stock and special voting stock will vote together as a single class on all matters that come before the annual meeting; accordingly,meeting. Accordingly, throughout this proxy statement we refer generally to our outstanding common stock and special voting stock together as our "common stock."
What Constitutes a Quorum
StockholdersShareholders may not take action at the annual meeting unless there is a quorum present at the meeting. StockholdersShareholders participating in the virtual meeting are considered to be attending the meeting "in person." The presence, in person or by proxy, of a majority of the outstanding shares of common stock entitled to vote as of the close of business on the record date constitutes a quorum. Abstentions and broker non-votes will count toward establishingeach be counted as present for the purposes of determining the presence of a quorum. Broker non-votes occur when brokers holding shares in street name for beneficial owners do not receive instructions from the beneficial owners about how to vote the shares. An abstention occurs when a stockholdershareholder withholds such stockholder'sshareholder's vote by checking the "abstain" box on the proxy card, or similarly elects to abstain via the Internet or telephone voting. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on routine matters, including the ratification of the appointment of an independent registered accounting firm.
Vote Required
Proposal No. 1: A nominee for director will be elected to the board if the votes cast for the nominee's election exceed the votes cast against that nominee's election.election at the meeting. Abstentions and broker non-votes will have no effect on the outcome of the election and we do not have cumulative voting in the election of directors.
Proposal No. 2: The ratification of the appointmentselection of our independent registered public accounting firm requires the affirmative vote of a majority ofwill be ratified if the votes cast for this proposal exceed the votes cast against this proposal at the annual meeting or represented by proxymeeting. Abstentions and entitled to vote.broker non-votes will have no effect on the outcome of this proposal.
Proposal No. 3: The compensation of our named executive officers will be approved, on an advisory basis, if the votes cast for this proposal exceed the votes cast against this proposal at the meeting. Abstentions and broker non-votes will have no effect on the outcome of this proposal.
Voting Process
Shares that are properly voted or for which proxy cards are properly executed and returned will be voted at the annual meeting in accordance with the directions given or, ingiven. In the absence of directions, these shares will be voted "FOR" the election of the director nominees named in this proxy statement, and "FOR" Proposals No. 12 and 2.No. 3.
We do not expect any other matters to be brought before the annual meeting. If, however, other matters are properly presented, the persons named as proxies will vote in accordance with their discretion with respect to those matters.
The manner in which your shares may be voted depends on how your shares are held. If you are the record holder of your shares, meaning you appear as the holder of your shares on the records of our stock transfer agent, you may vote those shares via the Internet or telephone, or, if you request a printed copy of the proxy materials, via a proxy card for voting those shares included with the printed proxy materials. If you own shares in street name, meaning you are a beneficial owner with your shares held through a bank or brokerage firm, you may instead receive a notice with instructions on how to access proxy materials as well as how you may instruct your bank or brokerage firm how to vote your shares.
Voting on the Internet
| | | | | | | | | | | |
| Voting on the Internet | You can vote your shares via the Internet by following the instructions in the notice. The Internet voting procedures are designed to authenticate your identity and to allow you to vote your shares and confirm your voting instructions have been properly recorded. If you vote via the Internet, you do not need to complete and mail a proxy card. We encourage you to vote your shares via the Internet in advance of the annual meeting even if you plan to attend the virtual annual meeting.Voting by Mail
You can vote your shares by mail by requesting a printed copy of the proxy materials sent to your address. When you receive the proxy materials, you may fill out the proxy card enclosed therein and return it per the instructions on the card. By signing and returning the proxy card according to the instructions provided, you are enabling the individuals named on the proxy card, known as "proxies," to vote your shares at the annual meeting in the manner you indicate. If you request a printed copy of the proxy materials, we encourage you to sign and return the proxy card even if you plan to attend the annual meeting.
Voting by Telephone
You may be able to vote by telephone. If so, instructions in the notice. The Internet voting procedures are designed to authenticate your identity and to allow you to vote your shares and confirm your voting instructions have been properly recorded. If you vote via the Internet, you do not need to complete and mail a proxy card. We encourage you to vote your shares via the Internet in advance of the annual meeting even if you plan to attend the annual meeting.
|
| Voting by Mail | You can vote your shares by mail by requesting a printed copy of the proxy materials sent to your address. When you receive the proxy materials, you may fill out the proxy card enclosed therein and return it per the instructions on the card. By signing and returning the proxy card according to the instructions provided, you are enabling the individuals named on the proxy card, known as "proxies," to vote your shares at the annual meeting in the manner you indicate. If you request a printed copy of the proxy materials, we encourage you to sign and return the proxy card even if you plan to attend the annual meeting. |
| Voting by Telephone | You can vote your shares by telephone. Instructions are included with your notice. If you vote by telephone, you do not need to complete and mail your proxy card. |
Attendance and Voting at the Annual Meeting
Most of our stockholdersshareholders hold their shares through a broker, trustee or other nominee rather than directly in their own name. There are some distinctions between shares held of record and those owned beneficially. If your shares are registered directly in your name with our transfer agent, you are considered, with respect to those shares, the "stockholder"shareholder of record." As the stockholdershareholder of record, you have the right to attend the meeting, grant your voting proxy directly to lululemon or to a third party, or to vote your shares during the meeting. If your shares are held in a brokerage account, by a trustee or by another nominee (that is, in "street name"), you are considered the "beneficial owner" of those shares. As the beneficial owner of those shares, you have the right to direct your broker, trustee or nominee how to vote, or to vote your shares during the annual meeting.
Revocation
If you are the record holder of your shares, you may revoke a previously granted proxy at any time before the annual meeting by delivering to the Corporate Secretarycompany secretary of lululemon athletica inc. a written notice of revocation or a duly executed proxy bearing a later date or by voting your shares electronically at the annual meeting. Any stockholdershareholder owning shares in street name may change or revoke previously given voting instructions by contacting the bank or brokerage firm holding the shares. Simply attending the annual meeting does not revoke your proxy. Your last vote, prior to or at the annual meeting, is the vote that will be counted.
Householding
The SEC permits companies to send a single notice, and for those stockholdersshareholders that elect to receive a paper copy of proxy materials in the mail, one copy of this proxy statement, together with our 2015 Annual Report,2020 annual report, to any household at which two or more stockholdersshareholders reside, unless contrary instructions have been received, but only if we provide advance notice and follow certain procedures. In such cases, each stockholdershareholder continues to receive a separate notice, and for those stockholdersshareholders that elect to receive a paper copy of proxy materials in the mail, one copy of our 2015 Annual Report2020 annual report and this proxy statement. This householding process
reduces the volume of duplicate information and reduces printing and mailing expenses. We have not instituted householding for stockholdersshareholders of record; however, certain brokerage firms may have instituted householding for beneficial owners of our common stock
held through brokerage firms. If your family has multiple accounts holding our common stock, you may have already received a householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of the notice, our 20152020 annual report and this proxy statement. The broker will arrange for delivery of a separate copy of the notice, and, if so requested, a separate copy of these proxy materials promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.
Solicitation of Proxies
We pay the cost of soliciting proxies for the annual meeting. We solicit by mail, telephone, personal contact and electronic means and arrangements are made with brokerage houses and other custodians, nominees and fiduciaries to send notices, and if requested, other proxy materials, to beneficial owners. Upon request, we will reimburse them for their reasonable expenses. In addition, our directors, officers and employees may solicit proxies, either personally or by telephone, facsimile, mail, email or written orother methods of electronic mail. Stockholderscommunication. Shareholders are requested to return their proxies without delay.
YEAR IN REVIEW
COVID-19 Fiscal 2020 was a difficult year. We faced a rapidly changing global landscape, and we faced it united, with resilience and resolve. As we temporarily closed stores around the world, we continued to support our people, and implemented programs to support and keep them safe:
•Global Pay Protectionprovided pay and job protection for our employees during temporary store closures. As we re-opened, we kept our pay guarantee in place should a store need to close again for any reason. We now have a minimum pay guarantee policy by role.
•We Stand Together Fundwas created to support our employees facing significant financial hardship with relief grants. To establish the fund, our senior leadership team contributed 20% of their salaries and members of our board of directors contributed 100% of their cash retainers for a period of three months. The fund allows for employee donations and we plan to continue to offer the program on an enduring basis to support employees both during COVID-19 and beyond.
•Ambassador Relief Fundwas an extension of our support to our collective community where we provided $4.5 million to assist ambassador-run fitness studios with basic operating costs.
•Enhanced mental health support and toolswere implemented, including a wide range of resiliency and connection sessions specifically created to support our people and collective during the pandemic.
As we continue to navigate the COVID-19 pandemic, we continue to prioritize the safety of our people and our guests. We are closely monitoring the situation in every market and community we serve. We will temporarily close stores and restrict operations as necessary based upon information from governmental and health officials.
Inclusion, Diversity, Equity and Action (IDEA) The Black Lives Matter movement acted as a powerful catalyst within our organization in fiscal 2020. After many real and impactful conversations with our underrepresented employees and our greater community, we heard that we need to evolve within our own walls to support meaningful, lasting change in the world. We added "Inclusion" as one of our core values, and established IDEA Advisory and Steering Committees, led by our chief executive officer. We hired our global head of IDEA and built a team to work to meet our commitments. We invested $5 million in 2020, and plan to continue investing in 2021 to fund our global IDEA activities. These funds can further support the career progress of our diverse talent and increase access to internal opportunities and professional development.
MIRROR In June 2020, we announced the acquisition of MIRROR, a leading, in-home fitness company. This marked our first acquisition and is a compelling addition to our omni guest experiences growth pillar. We are excited to bolster our digital sweatlife offerings and bring immersive and personalized in-home sweat and mindfulness solutions to our guests.
Senior Leadership Team As we continue to expand globally, André Maestrini joined our team as our executive vice president, international to lead our operations in Asia Pacific, China, and Europe, Middle East and Africa (EMEA). Additionally, we promoted Meghan Frank to be the first woman to hold the chief financial officer position at lululemon. In another milestone, Celeste Burgoyne's role evolved to become our first executive to serve at the president level as she leads the Americas and global guest innovations team.
Stores As our international growth continued in fiscal 2020, we celebrated our 100th store opening in our Asia Pacific region in fiscal 2020 and have continued to build our international footprint opening even more locations globally. We opened our largest store in Asia to date, in Tokyo, Japan. We continued to open more pop-up store locations (over 100 seasonal stores) to support our guests during the holiday season. During the year, we opened 30 net new company-operated stores, including 18 stores in Asia Pacific, nine stores in North America, and three stores in Europe.
Financial Highlights Fiscal 2020 was a year in which we had to adapt our priorities, and evolve our strategies, to navigate the challenges of the COVID-19 pandemic, global climate crisis, and systemic inequities in our society. We established cross functional teams across the business to ensure we could continue to serve our guests where, when, and how they wanted to shop. As we reported in our Annual Report for fiscal 2020, from 2020 compared to 2019:
•Net revenue increased 11% to $4.4 billion.
•Company-operated stores net revenue decreased 34% to $1.7 billion.
•Direct to consumer net revenue increased 101% to $2.3 billion.
•Gross profit increased 11% to $2.5 billion.
•Gross margin increased 10 basis points to 56.0%.
•Income from operations decreased 8% to $820.0 million.
As we continue to navigate the global pandemic, we remain committed to our Power of Three growth plan and the targets contemplated by this plan which include a doubling of our men's business, a doubling of our e-commerce business, and a quadrupling of our international business by 2023 from levels realized in 2018. Our three strategic pillars of the plan are:
•Product Innovation: Our product assortment was met with strong guest response throughout 2020. We continued to leverage our Science of Feel development platform, and introduced more inclusive sizing into our core women's styles in 2020 with additional styles to be added in 2021.
•Omni-Guest Experience: The COVID-19 pandemic impacted the way guests interacted with our brand in 2020 as store traffic declined. This was offset by significant strength in our e-commerce business as we invested in IT infrastructure, fulfillment capacity and increased the number of educators assisting guests in our Guest Education Center. Revenue in our e-commerce channel increased 101% in 2020.
•Market Expansion: We continued to grow our presence both in North America and in our international markets. Our expanded seasonal store strategy allowed us to better cater to our guests in select markets, while also helping introduce new guests to our brand. For 2020, our business in North America increased 8%, while total growth in our international markets was 31%.
In this year of uncertainty, we made the decision to cap our annual bonus payouts for fiscal 2020 at 100% of target (as opposed to our typical maximum of 200% of target). Additionally, we aligned our bonus goals to our financial results in the second half of the year to position bonus goals with our financial recovery. Our priorities, as described above, were to fund our global pay protection program, as well as other initiatives focused on our collective, including our We Stand Together Fund and Ambassador Relief Fund. We ended our year in a strong financial position, which exceeded our bonus targets established for the second half of the year. Therefore, our fiscal 2020 bonus goals were achieved at 100% of target.
IMPACT AGENDA
Our purpose is to elevate the world by unleashing the full potential within every one of us.The Impact Agenda is our stake in the ground toward an equitable, sustainable future. Our strategy is organized into three interconnected pillars, each with a vision for success, goals and commitments, and strategies.
BE HUMAN
Inclusion, Diversity, Equity, and Action (IDEA)
We continually endeavor to create an environment that is equitable, inclusive, and fosters personal growth.
Diversity and inclusion are key components of our culture and are fundamental to achieving our strategic priorities and future vision. The diversity of our teams and working in an inclusive culture enables increased employee engagement, better decision making, greater adaptability, creativity, and a deeper understanding of the communities we serve. We are proud that as of January 31, 2021, approximately 55% of our board of directors, 65% of our senior executive leadership team, and 50% of all vice presidents and above are women, while approximately 75% of our overall workforce are women(1).
We maintain 100% gender pay equity within our entire global employee population, meaning equal pay for equal work across genders. We have achieved pay equity across all areas of diversity in the United States and are seeking, to the extent permitted under local law and regulation, to collect the data necessary to confirm complete pay equity globally.
We offer all employees IDEA education, training, support, and guided conversations on a variety of topics, including anti-racism, anti-discrimination, and inclusive leadership behaviors, in a variety of forums. We aim to foster a culture of inclusion by making IDEA part of our everyday conversation, and frequently review our policies, programs, and practices to identify ways to be more inclusive and equitable.
Supporting our employees through whole-person opportunities
We believe that each of our approximately 25,000people are key to the success of our business. We strive to foster a distinctive culture rooted in our core values that attracts and retains passionate and motivated employees who are driven to achieve personal and professional goals. We believe our people succeed because we create an environment that fosters growth and is diverse and equitable.
We assess our performance and identify opportunities for improvement through an annual employee engagement survey. In 2020 our survey participation rate was more than 90% and our employee engagement score was in the top 10% of retailers(2). Our engagement score tells us whether our employees believe lululemon is a great place to work, whether they believe they are able to use their strengths at work, if they are motivated, and whether they would recommend lululemon as a great place to work.
We understand that health and wealth programs need to offer choice at all stages of life. Our current offerings to support whole-person opportunities include, among other things:
•Competitive compensation which rewards exceptional performance;
•A parenthood program which is a gender-neutral benefit that provides all eligible employees up to six months of paid leave;
•An employee assistance program which provides free, confidential, support to all our employees and their families in a variety of areas from mental well-being to financial services to advice for new parents;
•Personal resilience tools and mental health sessions to employees, ambassadors, and suppliers;
•Reimbursement programs which reward physical activity; and
•A Fund your Future program for eligible employees which offers partial contribution matches to a pension plan and employee share purchase plan.
________
(1)While we track male and female genders, we acknowledge this is not fully encompassing of all gender identities.
(2)Based on an industry benchmark provided by the third party that administers this survey to our employees.
Supporting the wellbeing of the people who make our products in our supply chain
We partner with our suppliers to work towards creating safe, healthy, and equitable environments that support the wellbeing of all the people who make our products. Our Vendor Code of Ethics is the foundation of our supplier partnerships. It adheres to international standards for working conditions, workers’ rights, and environmental protection, and its implementation focuses on prevention, monitoring, and improvement. Beyond labor compliance, we are committed to supporting worker wellbeing, building
on years of partnerships with our suppliers around workplace practices and community support initiatives.
We recently developed and implemented our Foreign Migrant Worker Standard, which outlines our expectations with respect to foreign migrant workers. This program, which has successfully been executed in Taiwan, has benefited approximately 2,700 migrant workers by reducing worker-paid fees. Based on lessons learned from this program, we are now expanding beyond Taiwan so that we can continue to support our foreign migrant workers globally.
BE WELL
Everyone has the right to be well. Yet globally, more people are facing stress and anxiety in their everyday lives, exacerbated by COVID-19, social injustice, and environmental anxiety. At lululemon, we are committed to wellbeing for all. When we all have the tools, resources, and agency to be well, we can realize our full potential and contribute to a healthier future. As a brand rooted in movement, mindfulness, and connection, we know these practices have the power to support mental, physical, and social wellbeing. To support the critical need for wellbeing, we are providing access to tools for at least 10 million people globally, including our guests, suppliers, and members of our communities. Areas of focus for us include:
Establish a Centre for Social Impact In 2021, we plan to establish a lululemon centre of excellence for social impact that will help unify and amplify existing programs such as Here to Be and innovate new programs to advance equity in wellbeing in our communities.
Here to Beis our flagship social impact program. Launched in 2016, Here to Be committed $25 million over five years to partner with nonprofit organizations that create equitable access to yoga, running, and meditation. This year, in response to a growing need for wellbeing, we took action to scale Here to Be and deepen its impact. We evolved its mission with a clear focus on equity. We expanded partnerships to include organizations that advocate for social justice. The program provides support that includes funding, connection to tools and resources, and amplification across our platforms. Through partnerships in regions where we operate, we plan to scale our reach and impact.
Peace on Purpose was created in partnership with the United Nations (UN) Foundation, to provide mindfulness tools to UN humanitarian workers. Working on the front lines of global crises and natural disasters, UN staff report high rates of burnout, stress, compassion fatigue, and mental health stigmas in their work. Peace on Purpose is an evidence-based and trauma-informed program that equips UN workers with mindfulness resources to support their mental, physical, and emotional wellbeing. To date, Peace on Purpose has reached humanitarian employees in 11 countries through in-person workshops and in 87 countries through digital workshops. In 2020, we launched mindfulness tools in partnership with Insight Timer, a global meditation app.
BE PLANET
We envision a future where we thrive within the limits of our one planet. That is why we act to avoid environmental harm and contribute to restoring a healthy planet. At lululemon, we create products and experiences that reflect the values of our guests and our aspirations for a healthier world. We will work to be part of a circular ecosystem, based on principles of designing out waste and pollution, keeping products and materials in use, regenerating natural systems, and using clean renewable energy. Underlying is the imperative to act on climate change, and we have set ambitious, science-based carbon targets that are linked to our Be Planet goals. By transforming our materials and products, guest experience models, and supply chains and by partnering with our collective, suppliers, and industry stakeholders, we take responsibility to help evolve our industry toward a more sustainable future. Our focus areas are as follows:
Innovate Sustainable Materials Our intent is to design our products for long-lasting performance, beauty, and sustainability. We are working to adopt better fibres, evolve manufacturing processes, innovate net new materials, and engage in industry collaborations to help evolve collective solutions. We assess impacts using the Sustainable Apparel Coalition Higg Materials Sustainability Index (Higg MSI) and select life-cycle analysis methodologies. A key goal is for all our materials to come from traceable sources.
Create circularity through new guest models We are in the early stages of a transformation toward a circular ecosystem. Circularity inspires a whole new way of creating and accessing products – away from a linear approach and toward a creative and regenerative model that engages guests and keeps products in use as long as possible.
Act on climate change and renewable energy In 2019, we created science-based targets approved by the Science Based Targets initiative. We are implementing strategies to invest in the transition to renewable energy, drive carbon reduction and energy efficiency across our value chain, and collaborate across industries for progress.
Use less water and better chemistry Creating, processing, and dyeing materials requires clean water. As part of the solution, we are assessing water limits in our supply chain and have initiated projects with our suppliers to manufacture products in ways that are radically more water-efficient. We plan to continue to elevate chemicals management and promote the use of better chemistries to achieve the highest product performance, protect people and the environment, and comply with regulation and industry standards.
Make waste obsolete The apparel industry has opportunities to reduce waste across our value chain, including in manufacturing, in stores and distribution centres, and in our shipping and product packaging.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
We have a classified board of directors currently consistingwith a total of 12eleven directors, including four Class I directors, four Class II directors, and four three Class III directors who will serve until the annual meetings of stockholdersshareholders to be held in 2017, 20182023, 2021 and 2016, respectively, and until their respective successors are duly elected and qualified or until their earlier resignation or removal. Effective2022, respectively. One of our current Class II directors, Tricia Glynn, will not stand for re-election at the annual meeting.Accordingly, effective as of the 20162021 annual meeting, our board of directors will consist of 11ten directors, including four Class I directors, fourthree Class II directors, and three Class III directors.
At each annual meetingDirector Nominees for Election at the 2021 Annual Meeting of stockholders,Shareholders
New and re-nominated directors are elected for a term of three years to succeed those directors whose terms expire atevaluated by the annual meeting dates.The term of the Class III directors will expire on the date of the upcoming annual meetingcorporate responsibility, sustainability and three people are to be elected to serve as Class III directorsgovernance committee of our board of directors at the annual meeting. Based on allusing information available toabout the Nominating and Governance Committee of our board of directors and relevant considerations, including the guidelines,candidate, criteria and procedures for identifying and evaluating candidates for election to the board of directors set forthincluded in our "Guidelines"guidelines for Evaluating Director Candidates",evaluating director candidates."
As the Nominating and Governance Committee selected Robert Bensoussan, Kathryn Henry, and Jon McNeill, each of whomterm for ourClass II directors is a current Class III director, asexpiring at the candidates who, in2021 annual meeting, the view of the Nominating and Governance Committee, are most suited for membership on our board of directors at this time. Accordingly, the Nominating and Governance Committee recommended Mr. Bensoussan, Ms. Henry, and Mr. McNeill as nominees for election as Class III directors. Our board considered the recommendation of the Nominating and Governance Committee, as well as all information available to it and other relevant considerations, andcommittee has nominated the individuals noted below for election by the stockholders as Class III directors Mr. Bensoussan, Ms. Henry, and Mr. McNeill.re-election. If elected, Mr. Bensoussan, Ms. Henry, and Mr. McNeillthe directors will serve as Class III directorsfor a three-year term until our 2024 annual meeting, of stockholders in 2019 and until their successors are duly elected and qualified, or until their earlier resignation or removal.
On November 18, 2020, our board of directors appointed Kourtney Gibson as our newest director, and determined our shareholders should have the opportunity to vote on the nomination as a continuing Class I director at this annual meeting. If elected, Ms. Gibson will serve until our 2023 annual meeting, and until her successor is duly elected and qualified or until her earlier resignation or removal.
| | | | | | | | | | | | | | |
| Name | | Age(1) | | Director Since |
| Class II directors (whose terms would expire at the 2024 annual meeting) | | |
| Calvin McDonald | | 49 | | 2018 |
| Martha Morfitt | | 63 | | 2008 |
| Emily White | | 42 | | 2011 |
| Class I director (whose term would expire at the 2023 annual meeting) | | |
| Kourtney Gibson | | 40 | | 2020 |
(1) Age as of April 1, 2021.
Please see the "Director Biographies" in the corporate governance section for each director's full biography.
Our board of directors has no reason to believe that any of the nominees listed above will be unable to serve as a director. If, however, any nominee becomes unavailable, the proxies will have discretionary authority to vote for a substitute nominee. There are no family relationships among any of the directors or executive officers.
Unless authority to do so is withheld, the persons named as proxies will vote "FOR" the election of the nominees listed above.
The following table sets forth the name, age, and principal occupation of each director and director nominee, and the period during which each has served as a director of lululemon. Thomas G. Stemberg, who served as a director since 2005, passed away in October 2015.
|
| | | | | | |
| Name |
| Age |
| Occupation |
| Director Since |
| Class I directors whose terms expire at the 2017 annual meeting |
|
|
| Michael Casey |
| 70 |
| Retired Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Starbucks Corporation |
| 2007 |
| RoAnn Costin |
| 63 |
| President of Wilderness Point Investments |
| 2007 |
| David M. Mussafer | | 52 | | Managing Partner of Advent International Corporation | | 2014 |
| Laurent Potdevin |
| 48 |
| Chief Executive Officer of lululemon |
| 2014 |
| | | | | | | |
| Class II directors whose terms expire at the 2018 annual meeting |
|
|
| Steven J. Collins | | 46 | | Managing Director of Advent International Corporation | | 2014 |
| Martha A.M. Morfitt |
| 58 |
| Principal of River Rock Partners Inc. |
| 2008 |
| Rhoda M. Pitcher |
| 61 |
| Managing Partner of Rhoda M Pitcher Inc. |
| 2005 |
| Emily White |
| 37 |
| Founder and Chief Executive Officer of Mave, Inc. |
| 2011 |
| | | | | | | |
| Class III directors whose terms expire and who are nominees for election at the 2016 annual meeting |
|
|
| Robert Bensoussan |
| 57 |
| Director of Sirius Equity LLP |
| 2013 |
| Kathryn Henry |
| 50 |
| Strategic Consultant |
| 2016 |
| Jon McNeill | | 48 | | President, Global Sales, Delivery and Service of Tesla Motors, Inc. | | 2016 |
| | | | | | | |
| Class III director whose term expires at the 2016 annual meeting | | |
| William H. Glenn |
| 59 |
| President and Chief Executive Officer of American Express Global Business Travel |
| 2012 |
Director Nominees
Background information on each of Robert Bensoussan, Kathryn Henry, and Jon McNeill, our three Class III nominees, appears under "Corporate Governance — Our Board of Directors".
Vote Required and Board Recommendation
If a quorum is present, and voting, a nominee for director will be elected to the board of directors if the votes cast for the nominee's election exceed the votes cast against that nominee's election. If an incumbent director fails to receive the required vote for re-election, then, within 90 days following certification of the stockholdershareholder vote by the inspector of elections, the board of directors will act to determine whether to accept the director's resignation. Abstentions and broker non-votes will have no effect on the outcome of the election. Broker non-votes occur when a person holding shares in street name, such as through a brokerage firm, does not provide instructions as to how to vote those shares and the broker does not then vote those shares on the stockholder's behalf.
Our board of directors unanimously recommends a vote "FOR""FOR" the election of the three Class III directorII nominees and the one Class I nominee named above.
CORPORATE GOVERNANCE
Our Board of Directors
The following is brief descriptiontable states the name, age, and principal occupation of each nominee who is currently a member of the board of directors and each director of lululemon whose term of office will continue after the annual meeting:
Class III Director Nominees for Election at the 2016 Annual Meeting of Stockholders
Robert Bensoussan has been a member of our board ofcurrent directors since January 2013. Since 2008, Mr. Bensoussan has been a Director(including the nominees to be elected at this meeting), and the majority owner of Sirius Equity LLP, a UK company that invests in retail and brands based in the UK and Europe. From 2008 to 2012, Mr. Bensoussan served as Executive Chairman and CEO of LK Bennett, a UK fashion retailer, and has acted as non-Executive Chairman since 2012, and he has served as non-Executive Chairman of feelunique.com (UK) since December 2012. From 2001 to 2007, Mr. Bensoussan was CEO of Jimmy Choo Ltd, a privately held UK luxury shoe wholesaler and retailer and was also a member of the Board of Jimmy Choo Ltd from 2001 to 2011. Mr. Bensoussan serves on the boards of directors of Inter Parfums Inc., a publicly-traded manufacturer of fragrances and fragrance-related products, Celio International (Belgium), a retailer of men's clothing, Zen Cars (Belgium), an electric car rental company, and Aurenis (France) a part-works publisher. Our board of directors selected Mr. Bensoussan to serve as director because he has extensive executive management and director experience in the apparel, accessories and fragrances industry. Our board of directors believes his experience as chief executive officer and director of international branded luxury goods operations provides unique insight and vision to our board of directors.
Kathryn Henry has been a member of our board of directors since January 2016. Since 2015, Ms. Henryperiod during which each has served as a strategic consultant for retail and technology companies, in addition to venture capital, investment and consulting firms seeking executive level guidance.director of lululemon.
| | | | | | | | | | | | | | | | | | | | |
| Name | | Age(1) | | Occupation | | Director Since |
| Class I directors (whose terms expires at the 2023 annual meeting) | | |
| Michael Casey | | 75 | | Retired Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Starbucks Corporation | | 2007 |
| Glenn Murphy | | 59 | | Founder and Chief Executive Officer of FIS Holdings | | 2017 |
| David Mussafer | | 57 | | Chairman and Managing Partner of Advent International Corporation | | 2014 |
| Class I director (who is a nominee to continue as a Class I director at the 2021 annual meeting) |
| Kourtney Gibson | | 40 | | President of Loop Capital Markets | | 2020 |
| Class II directors (whose terms expire and who are nominees for election at the 2021 annual meeting) | | |
| Calvin McDonald | | 49 | | Chief Executive Officer of lululemon athletica inc. | | 2018 |
| Martha Morfitt | | 63 | | Principal of River Rock Partners Inc. | | 2008 |
| Emily White | | 42 | | President of Anthos Capital | | 2011 |
| Class III directors (whose terms expire at the 2022 annual meeting) | | |
| Kathryn Henry | | 55 | | Strategic Advisor and Independent Consultant | | 2016 |
| Jon McNeill | | 53 | | Chief Executive Officer of DVx Ventures | | 2016 |
| Stephanie Ferris | | 47 | | Former Chief Operating Officer of Fidelity National Information Services, Inc. (FIS) | | 2019 |
| Class II director (whose term expires at the 2021 annual meeting) | | |
| Tricia Glynn | | 40 | | Managing Director of Advent International Corporation | | 2017 |
| | | | | | |
(1)Ms. Henry previously served Age as Chief Information Officer, Logistics & Distribution at lululemon from 2010 to 2014. In her role, Ms. Henry oversaw all global information and technology operations for the company. Prior to joining lululemon in 2010, Ms. Henry worked at Gap, Inc., where she served as Vice President and Chief Information Officer of International IT and Gap North America and was responsible for the systems support of key international growth initiatives. Ms. Henry was designated for appointment to our board of directors by Dennis J. Wilson in accordance with the terms of a support agreement between lululemon athletica, Mr. Wilson and certain entities affiliated with Advent International. Our board of directors believes that her strategic IT and retail experience as well as her experience with lululemon will provide valuable insight to our board of directors.April 1, 2021.
Jon McNeill
has been a member
Table of our board of directors since April 2016. Mr. McNeill has served as President, Global Sales, Delivery and Service of Tesla Motors, Inc., overseeing customer-facing operations, since September 2015. Prior to joining Tesla Motors, Inc., he was the CEO of Enservio, Inc., a software company, from 2006 until 2015, and founder of multiple technology and retail companies including TruMotion, Sterling, First Notice Systems, and Trek Bicycle Stores, Inc. Mr. McNeill began his career at Bain & Company. He is a graduate of Northwestern University. Our board of directors believes his executive experience and innovative and entrepreneurial attributes will provide valuable insight to our board of directors and is aligned with our unique culture.Contents
Class I Directors Continuing in Office until the 2017 Annual Meeting of Stockholders
Director Biographies
Michael Caseyhas been a member of our board of directors since October 2007 and began servingserved as Co-Chairmanco-chair of the Board inboard of directors from September 2014 to April 2017 and as chair of the board of directors from May 2014 to September 2014. He retired from Starbucks Corporation in October 2007, where he had served as Senior Vice Presidentsenior vice president and CFOchief financial officer from August 1995 to September 1997, and Executive Vice President, CFOexecutive vice president, chief financial officer and Chief Administrative Officerchief administrative officer from September 1997 to October 2007. Subsequent to retirement he served as a Senior Advisorsenior advisor to Starbucks Corporation from October 2007 to May 2008 and from November 2008 to January 2015. Prior to joining Starbucks, Mr. Casey was Executive Vice Presidentexecutive vice president and CFOchief financial officer for Family Restaurant,Restaurants, Inc. and Presidentpresident and CEOchief executive officer of El Torito Restaurants, Inc. He was also a member of the board of directors of The Nasdaq OMX Group, Inc. from January 2001 to May 2012. Mr. Casey graduated from Harvard College with an A.B. degree in Economics, cum laude, and Harvard Business School with an MBA degree.
Skills & Experience
•Our board of directors selected Mr. Casey to serve as director because he has extensive experience in corporate finance and accounting, managing retail-focused industry operations, strategic planning, and public company corporate governance. Our board of directors believes his service on executive, audit and compensation committees of other companies allows him to provide significant insight to our board of directors.
RoAnn CostinGlenn Murphy has been a member of our board of directors since March 2007. Ms. CostinApril 2017 and has served as non-executive chair of the Presidentboard of Wilderness Point Investments,directors since August 2018. He served as executive chair of the board of directors from February to August of 2018. He served as co-chair of the board of directors from April 2017 to November 2017 and as non-executive chair of the board of directors from November 2017 to February 2018. Mr. Murphy is an industry executive with more than 25 years of retail experience. He has successfully led diverse retail businesses and brands in the areas of food, health & beauty, apparel and books. He is the founder and CEO of FIS Holdings, a financialhigh-impact consumer-focused investment firm since 2005. From 1992deploying a combination of operating guidance and capital flexibility. He is also CEO and chairman of KKR Acquisition Holdings I, a blank cheque company targeting the consumer sector. Prior to FIS Holdings, Mr. Murphy served as chairman and chief executive officer at The Gap, Inc. from 2007 until 2005, Ms. Costin2014. Prior to that, Mr. Murphy served as the Presidentchairman and chief executive officer of Reservoir Capital Management,Shoppers Drug Mart Corporation from 2001 to 2007. Prior to leading Shoppers Drug Mart, he served as the chief executive officer and president for the Retail Division of Chapters Inc., an investment advisory firm. She co-founded Paola Quadretti Worldwide, Mr. Murphy started his career at Loblaws where he spent 14 years. He holds a women's made-to-measure clothing company and served on the boards of OLLY Shoes, a retailer of children's shoes and accessories, Alvin Valley Holdings, Inc., a retailer of designer women's clothing, and Toys R' Us. Ms. Costin received a B.A. in Government from Harvard University and an M.B.A.BA Degree from the Stanford University Graduate School of Business. Western Ontario.
Skills & Experience
•Our board of directors selected Ms. CostinMr. Murphy to serve as a director because she hasthey believe his extensive retail experience in corporate finance andas a leading strategic planning. Our board of directors believes her extensive management experience with respectoperator will provide valuable insight to both public and private companies allows her to provide our board of directors with significant insight on the retail industry.directors.
David M. Mussafer is lead director and has been a member of our board of directors since September 2014 and serves2014. Mr. Mussafer also served as co-Chairmana director of the Board.lululemon from 2005 until 2010. Mr. Mussafer is currently a Managing Partner atchairman and managing partner of Advent International Corporation ("Advent") and is responsible for Advent's North American private equity operations.which he joined in 1990. Prior to Advent, Mr. Mussafer joined Adventworked at Chemical Bank and Adler & Shaykin in 1990, has been a principal of the firm since 1993, and is a member of Advent's executive committee and board of directors.New York. Mr. Mussafer ishas led or co-led more than 25 buyout investments at Advent across a memberrange of the board of Five Below,industries. Mr. Mussafer’s current directorships also include Aimbridge Hospitality, First Watch Restaurants, Olaplex Inc., a publicly-traded specialty retailer of pre-teen and teen merchandise; Vantiv, Inc., a publicly-traded payment processing and technology solutions provider and several private companies.Thrasio. Mr. Mussafer holds a BSM, cum laude, from Tulane University and an MBA from the Wharton School of the University of Pennsylvania. Mr. Mussafer was appointed to the board of directors in connection with a support agreement which gives Advent a continuing right to nominate two designees to the board of directors and the opportunity to have one of its designees serve as a co-Chairman of the Board.
Skills & Experience
•Our board of directors believes hisMr. Mussafer's extensive experience enables him to provide valuable insights to the board of directors regarding board processes and operations as well as the relationship between the board of directors and stockholders.shareholders.
Laurent PotdevinKourtney Gibson was appointed as our Chief Executive Officer and a member of our board of directors in December 2013, and has served in those roles since January 2014. Mr. Potdevin previously worked at Toms Shoes, a socially-conscious shoe company, where he served as President from May 2011 to December 2013. From 1995 to 2010, he worked at Burton Snowboards, the world's largest and premier snowboarding company, serving in various capacities including as President and CEO from 2005 to 2010. Prior to joining Burton Snowboards, Mr. Potdevin worked at Louis Vuitton and LVMH. Mr. Potdevin received degrees from Ecole Superieure des Sciences Economiques et Commerciales, in France, and the Engineering School, Ecole Polytechnique Federale de Lausanne, in Switzerland. Our board of directors selected Mr. Potdevin because of his extensive experience at premium, technical athletic apparel and lifestyle-centric retail companies, and deep understanding of the importance of top-quality technical design, retail marketing strategies, and the power of building a strong brand.
Class II Directors Continuing in Office until the 2018 Annual Meeting of Stockholders
Steven J. Collins has been a member of our board of directors since September 2014. Mr. CollinsNovember 2020. Ms. Gibson is a Managing Directorpresident of Loop Capital Markets, an investment banking and brokerage firm, where she started as an intern 20 years ago. She is on the board of MarketAxess Holdings Inc. She also sits on the board of trustees at Advent International. Mr. Collins joined Advent in 1995the University of Miami and rejoined after graduate school in 2000. Mr. CollinsViterbo University as well as serves on the boards of the Dibia Dream Foundation and Chicago Scholars Foundation. Ms. Gibson is a member of the boardEconomic Club of directorsChicago and the Treasury Market Practices Group sponsored by the Federal Reserve Bank of Bojangles', Party City and Kirkland's, all of which are publicly traded, and Charlotte Russe, a privately-owned retailer of women's apparel. He was a member of the board of directors of Five Below Inc., a publicly-traded specialty retailer from 2010 until March 2015. Mr. CollinsNew York. Ms. Gibson received a BS from the Wharton School of the University of Pennsylvania and an MBA from Harvardthe Kellogg School of Business. Mr. Collins was appointed to the board of directors in connection with a support agreement which gives Advent a continuing right to nominate two designees to the board of directors and the opportunity to have one of its designees serve as a co-Chairman of the Board. Management at Northwestern University.
Skills & Experience
•Our board of directors believes hisselected Ms. Gibson to serve as a director because they believe her accomplishments as a business and finance leader provides experience enables him to provide valuable insights toin identifying opportunities for growing global consumer brands.
Calvin McDonald's biographical summary is included in the board of directors regarding management, accounting and financial matters as well as the relationship between the board of directors and stockholders."Executive Officers" section.
Martha A.M. (Marti) Morfitt has been a member of our board of directors since December 2008. She has served as a principal of River Rock Partners, Inc., a business and cultural transformation consulting firm, since 2008. Ms. Morfitt served as the CEOchief executive officer of Airborne, Inc. from October 2009 to March 2012. She served as the Presidentpresident and CEOchief executive officer of CNS, Inc., a manufacturer and marketer of consumer healthcare products, from 2001 through March 2007. From 1998 to 2001, she was Chief Operating Officerchief operating officer of CNS, Inc. Ms. Morfitt currently serves on the board of directors of Graco, Inc., a publicly-traded fluid handling systems and components company. She served on the board of directors of Mercer International Inc. from 2017 to 2020. She also served on the board of directors of Life Time Fitness, Inc., a publicly traded operator of fitness and athletic centers from 2008 to 2015. She received her HBA from the Richard Ivey School of Business at the University of Western Ontario, and an MBA from the Schulich School of Business at York University.
Skills & Experience
•Our board of directors selected Ms. Morfitt to serve as director because she has extensive public board experience and years of leading and managing branded consumer business operations and strategic planning.
Rhoda M. Pitcher has been a member of our board of directors since December 2005. Since 1996 she has served as Managing Partner of Rhoda M Pitcher Inc., a management consulting firm providing services in organizational strategy and the building of executive capability to Fortune 500 corporations, institutions, start-ups and non-profits. From 1978 to 1997, Ms. Pitcher co-founded, built and sold two international consulting firms. Ms. Pitcher holds a Master's degree in Organization Development from University Associates. Our board of directors selected Ms. Pitcher to serve as director because she has extensive experience in management consulting, culture development and strategic planning. Our board of directors believes her considerable knowledge of our business gained from more than 10 years as a director of lululemon makes her well suited to provide advice with respect to our strategic plans, culture and marketing programs.
Emily White has been a member of our board of directors since November 2011. She is the founder and CEOhas served as President of Anthos Capital, a mobile services start-up, Mave, Inc. SheLos Angeles-based investment firm since 2018. Prior to Anthos, Ms. White was the Chief Operating Officer ofchief operating officer at Snapchat, Inc., a photo messaging application from January 2014 to March of 2015. Prior to joining Snapchat, Ms. White washeld several leadership roles at Facebook Inc., a social networking company, from 2010 to 2013 where she held several key roles including Director of Local Business Operations, Director of Mobile Business Operations and DirectorHead of Business Operations at Instagram. From 2001 to 2010, Ms. White worked at Google where she ran North American Online Sales and Operations, Asia Pacific & Latin America business and the Emerging Business channel. She currently servesMs. White is also a board member and advisor to Graco, Inc. and is on the board of directors for Northern Start Investment Corp IV, a special purpose acquisition company, Railsbank, Olaplex, Inc. and Guayaki.
She has also served on the boards of the National Center for Women in IT,I.T., a non-profit coalition working to increase the participation of girls and women in computing and IT.technology, X-Prize, a non-profit focused on creating breakthroughs that pull the future forward. She received a BA in Art History from Vanderbilt University.
Skills & Experience
•Our board of directors selected Ms. White to serve as a director because of her extensive experience with social networking and technology companies, her understanding of the demographics in which our principal customers reside and the diversity in background and experience she provides to our board of directors.
Kathryn Henry has been a member of our board of directors since January 2016. Ms. Henry previously served as chief information officer, logistics & distribution at lululemon from 2010 to 2014 where she oversaw all global information and technology operations for the company. Since 2015, Ms. Henry has served as a strategic consultant for retail and technology companies, in addition to venture capital, investment and consulting firms seeking executive level guidance. Prior to joining lululemon in 2010, Ms. Henry worked at Gap, Inc., where she served as vice president and chief information officer of international IT and Gap North America and was responsible for the systems support of key international growth initiatives. Previously, she was vice president of Dockers Business Divestiture and vice president of global IT strategy & development at Levi Strauss & Co. Ms. Henry was selected as a Global CIO Top 25 Breakaway Leader in 2013, and was a member of the National Retail Federation CIO council during her tenure with lululemon.
Skills & Experience
• Our board of directors believes Ms. Henry's strategic IT and retail experience as well as her experience with lululemon provides valuable insight to our board of directors.
Jon McNeill has been a member of our board of directors since April 2016. Since January 2020, Mr. McNeill has served as chief executive officer of DVx Ventures. He previously served as chief operating officer of Lyft, Inc. from March 2018 to July 2019. From September 2015 to February 2018, he served as president, global sales, delivery and service of Tesla Inc., overseeing customer-facing operations. Prior to joining Tesla, Inc., he was the chief executive officer of Enservio, Inc., a software company, from 2006 until 2015, and founder of multiple technology and retail companies including TruMotion, Sterling, First Notice Systems, and Trek Bicycle Stores, Inc. Mr. McNeill began his career at Bain & Company. He is a graduate of Northwestern University.
Skills & Experience
•Our board of directors selected Mr. McNeill because they believe his executive experience and innovative and entrepreneurial attributes provide valuable insight and are aligned with our unique culture.
Stephanie Ferris has been a member of our board of directors since July 2019. From 2019 to 2020, Ms. Ferris was the chief operating officer of Fidelity National Information Services, Inc. From 2018 to 2019, she was the chief financial officer of Worldpay, Inc., a
payments technology company. Prior to becoming chief financial officer of Worldpay, Inc, in 2018, Ms. Ferris was the chief financial officer of Vantiv, Inc., a predecessor to Worldpay, since 2016 and its deputy chief financial officer since 2015. Ms. Ferris served in several capacities at Vantiv from 2010 to 2015. Earlier in her career, Ms. Ferris was employed in various positions of increasing responsibility of Fifth Third Bancorp, and began her career in public accounting at PricewaterhouseCoopers. Ms. Ferris is a Certified Public Accountant and a graduate of Miami University in Oxford, Ohio.
Skills & Experience
•Our board of directors selected Ms. Ferris to serve as a director given her broad experience and background in technology and finance.
Tricia Glynn has been a member of our board of directors since August 2017. Ms. Glynn has worked at Advent International since 2016 as a managing director focusing on buyouts and growth equity investments in the retail, consumer and leisure sector. Prior to Advent, Ms. Glynn spent 15 years investing across both Bain Capital Private Equity and the Private Equity Group of Goldman, Sachs & Co. She has closed transactions across the retail, healthcare, business services, real estate and media sectors, as well as internationally. From 2012 to 2018, Ms. Glynn served on the board of Burlington Stores Inc., a publicly traded department store retailer; and she is currently on the board of First Watch Restaurants Inc. and Olaplex, Inc. Ms. Glynn earned an A.B. in Biochemical Sciences cum laude from Harvard College and an MBA, with high distinction, as a Baker Scholar from Harvard Business School.
Skills & Experience
• Our board of directors believes Ms. Glynn's experience advising and investing in retail and consumer companies enables her to provide valuable and current insights to the board of directors.
Skills Matrix
Our directors have a diverse set of skills we believe are necessary to create an effective board. Listed below are qualifications and experiences we consider important to oversee the management of our business.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Director Qualifications & Experience |
Casey |
Ferris |
Gibson |
Glynn |
Henry |
McNeill |
Morfitt |
Murphy |
Mussafer |
White |
| Senior Leadership | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü |
| International Markets | ü | ü | | | | ü | ü | ü | ü | |
| Finance/Accounting | ü | ü | ü | ü | | ü | ü | ü | ü | ü |
| Public Company Board Service | ü | ü | | ü | ü | ü | ü | ü | ü | ü |
| Retail Industry | ü | | ü | ü | ü | ü | ü | ü | ü | |
| Digital/Technology | | ü | | | ü | ü | | | | ü |
| Strategy | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü |
| HR & Talent | | | | | | | ü | ü | | ü |
Environmental, Social & Governance (ESG) | ü | | | | ü | ü | ü | ü | | |
Independence of the Board
PursuantThe U.S. federal securities laws pertaining to corporate governance of publicly-traded companies and the Nasdaq listing standards require the board of directors to make an evaluation and determination as to the listing standardsindependence of The Nasdaq Stock Market, or Nasdaq, a majoritymembers of the board of directors in accordance with the standards provided in U.S. federal law and the Nasdaq listing standards. The board of directors has reviewed the general definitions and criteria for determining the independence of directors, information provided by each director, other relevant facts and circumstances bearing on each director's ability to exercise independent judgment in carrying out the responsibilities of a director, any arrangements or understandings between any director and another person under which that director was selected as a director, and the recommendations of the corporate responsibility, sustainability and governance committee regarding the independence of our current directors. Based on this review, our board of directors has determined that the following current members of our board of directors must qualifyare "independent" for the purposes of the Nasdaq listing standards as "independent" within the meaning of Nasdaq Rule 5605, as affirmatively determined by our board of directors. they relate to directors:
| | | | | | | | |
| Michael Casey | Tricia Glynn | Martha Morfitt |
| Stephanie Ferris | Kathryn Henry | David Mussafer |
| Kourtney Gibson | Jon McNeill | Emily White |
Our board of directors consults with our outside legal counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding the definition of "independent," including those set forth in the Nasdaq listing standards in effect at the time of the determination.
Consistent with these considerations, after review of all relevant transactions or relationships between each director and director nominee, or any of his or her family members, and lululemon, our senior management and our independent auditors, our board of directors has affirmatively determined that the following 10 directors and director nominees are independent directors within the meaning of the applicable Nasdaq listing standards: Robert Bensoussan, Michael Casey, Steven J. Collins, RoAnn Costin, William H. Glenn, Jon McNeill, Martha A.M. Morfitt, David M. Mussafer, Rhoda M. Pitcher, and Emily White. In making this determination,Calvin McDonald, our board of directors found that none of these directors and director nominees had a material or other disqualifying relationship with the company. Laurent Potdevin, our Chief Executive Officer,chief executive officer, is not an independent director by virtue of his current employment with lululemon, and Kathryn Henrythat Glenn Murphy, our non-executive chair of the board of directors (and former executive chair), is not an independent director by virtue of her past employment with lululemon.his service as executive chair of the board of directors for part of 2018.
Executive Sessions
Non-management directors generally meet in an executive session without management present each time our board of directors holds its regularly scheduled meetings.
Committees and Meeting Attendance
Our board of directors has three standing committees, including an Audit Committee, a Compensation Committee,audit; people, culture and a Nominatingcompensation; and Governance Committee.corporate responsibility, sustainability and governance committees. Each of these committees operates under a written charter adopted by our board of directors. Copies of these charters are available on our website at www.lululemon.com.
Our board of directors held fiveeleven meetings of the full board of directors during fiscal 2015.2020. Each of the standing committees of our board of directors held the number of meetings indicated in the table below. During fiscal 2015,2020, each of our directors attended at least 75% of the total number of meetings of our board of directors and all of the committees of our board of directors on which such director served during that period, except for Mr. Mussafer who was unable to attend two meetings of the Nominating and Governance Committee.period. Directors are encouraged to attend our annual meetings of stockholders.shareholders. All of our directors attended the 20152020 annual meeting of stockholders.shareholders.
The following table sets forthshows the three standing committees of our board of directors, the members of each committee during fiscal 20152020 and the number of meetings held by each committee:
|
| | | | | | |
| Name of Director |
| Audit |
| Compensation |
| Nominating and Governance |
| Robert Bensoussan | | Member | | | | Member |
| Michael Casey | | Member | | Chair | | |
| Steven J. Collins | | | | Member | | |
| RoAnn Costin | | | | | | Member |
| William H. Glenn | | Member | | | | Member |
Kathryn Henry(1) | | | | | | |
| Martha A.M. Morfitt | | Chair | | Member | | |
| David M. Mussafer | | | | | | Member |
| Rhoda M. Pitcher | | | | Member | | Chair |
Thomas G. Stemberg(2) | | | | | | |
| Emily White | | | | Member | | |
| Number of meetings in fiscal 2015 | | 5 | | 8 | | 5 |
| | | | | | | | | | | | | | | | | | | | |
| Name of Director | | Audit | | People, culture and compensation | | Corporate responsibility, sustainability and governance |
| Michael Casey | | Member | | Member | | |
| Stephanie Ferris | | Member | | | | |
| Kourtney Gibson | | Member | | | | |
| Tricia Glynn | | | | | | Member |
| Kathryn Henry | | Member | | Member | | |
| Jon McNeill | | | | | | Member |
| Martha Morfitt | | Chair | | Member | | |
| David Mussafer | | | | | | Chair |
| Emily White | | | | Chair | | |
| Number of meetings in fiscal 2020 | | 6 | | 7 | | 4 |
_________
| |
(1)
| Ms. Henry was appointed as a director in January 2016. |
| |
(2)
| Mr. Stemberg passed away in October 2015. |
Audit Committee
The Audit Committeeaudit committee is appointed by our board of directors to assist it in fulfilling its financial oversight responsibilities by overseeing the accounting and financial reporting processes of lululemon and the audits of our financial statements.statements as well as overseeing our risk assessment and risk management policies, procedures and practices. The Audit Committee'saudit committee's primary duties and responsibilities include:
•Appointing and retaining our independent registered public accounting firm, approving all audit, review, and other services to be provided by our independent registered public accounting firm and determining the compensation to be paid for suchthose services;
•Overseeing the integrity of our financial reporting process and systems of internal controls regarding accounting and finance;
•Overseeing the qualifications, independence, and performance of our independent registered public accounting firm;
•Overseeing lululemon'sour financial risk assessment and risk management policies, procedures, and practices;
•Overseeing our enterprise risk assessment and management policies, procedures and practices (including regarding those risks related to information security, cyber security, and data protection);
•Reviewing and, if appropriate, approving any related party transactions;
•Reviewing lululemon's Codeour code of Business Conductbusiness conduct and Ethicsethics applicable to all directors, officers, and employees, and monitoring and approving any modifications or waivers of suchthe code;
•Providing a means for processing complaints and anonymous submissions by employees of concerns regarding accounting or auditing matters; and
•Monitoring compliance with legal and regulatory requirements.
The current members of the Audit Committeeaudit committee are Robert Bensoussan,Martha Morfitt (chair), Michael Casey, William H. Glenn,Stephanie Ferris, Kourtney Gibson and Martha A.M. Morfitt (Chairperson).Kathryn Henry. Our board of directors has determined that each of the members of the Audit Committeeaudit committee is "independent" for purposes of the Nasdaq listing requirements as they apply to audit committee members and that Mr. Casey, Mr. Glenn,Ms. Morfitt, Ms. Ferris and Ms. MorfittGibson qualify as "audit committee financial experts" under the rules of the SEC.SEC as they apply to audit committee members.
People, Culture and Compensation Committee
The Compensation Committee has been delegated authoritypeople, culture and compensation committee is appointed by our board of directors to overseeassist it in fulfilling its oversight responsibility by overseeing all significant aspects of lululemon'sour compensation policies and programs, including:
•Reviewing and approving the compensation and annual performance objectives and goals of all of our executive officers;
•Reviewing, approving, and administering incentive-based and equity-based compensation plans in which our executive officers participate;
•Evaluating risks created by our compensation policies and practices and considering any reasonably likely effect of such risks;
•Reviewing reporting on succession planning, talent management, and policies and practices with respect to diversity and inclusion;
•Reviewing and recommending to our board of directors new executive compensation programs; and
•Reviewing and recommending to our board of directors proposed changes in director compensation.
Additional information concerning the people, culture and compensation committee's processes and procedures for the consideration and determination of executive and director compensation (including the role of its independent compensation consultant, Willis Towers Watson) can be found in the Compensation Discussion and Analysis section of this proxy statement under the captions "People, Culture and Compensation Committee Duties and Responsibilities," "Role of the Independent Compensation Consultant," and "Role of Executive Officers in Executive Compensation."
The current members of the Compensation Committeethis committee are Emily White (chair), Kathryn Henry, Martha Morfitt, and Michael Casey (Chairperson), Steven J. Collins, Martha A.M. Morfitt, Rhoda M. Pitcher, and Emily White.Casey. Our board of directors has determined that each of the members of the Compensation Committeethis committee is "independent" for purposes of the Nasdaq listing standards.standards as they apply to board committees performing the compensation function.
Nominating
Corporate Responsibility, Sustainability and Governance Committee
The Nominatingcorporate responsibility, sustainability and Governance Committeegovernance committee is appointed by our board of directors and is responsible for matters relating to theto:
•The corporate governance of our company as well as identifyingcompany;
•Identifying individuals qualified to become members of our board of directors or any of its committees, recommendingcommittees;
•Recommending nominees for election as directors at each stockholdershareholder meeting at which directors are to be elected, and recommendingelected;
•Recommending candidates to fill any vacancies on our board of directors or any of its committees.committees; and
•Reviewing and evaluating the company's programs, policies, practices and reporting relating to corporate responsibility and sustainability, including social and environmental issues and impacts to support the sustainable growth of the company's businesses.
In 2020, our board of directors expanded the purview of the nominating and governance committee to include oversight responsibility on corporate responsibility and sustainability and changed the committee’s name to the corporate, responsibility, sustainability and governance committee. The current members of the Nominating and Governance Committeethis committee are Robert Bensoussan, RoAnn Costin, William H. Glenn, David Mussafer (chair), Tricia Glynn, and Rhoda M. Pitcher (Chairperson).Jon McNeill. Our board of directors has determined that each of the members of the Nominating and Governance Committeethis committee is "independent" for purposes of the Nasdaq listing standards.standards as they apply to board committees performing the nominating function.
Director Nominations
The Nominatingcorporate responsibility, sustainability and Governance Committeegovernance committee considers recommendations for nominees from directors, officers, employees, stockholders,shareholders, and others based upon each candidate's qualifications, including whether a candidate possesses any of the specific qualities and skills desirable in members of our board of directors. Nominees for our board of directors must beare expected to:
•Be committed to enhancing long-term stockholder value and possessshareholder value;
•Possess a high level of personal and professional ethics, sound business judgment, appropriate experience and achievements, personal character, and integrity. Members of our board of directors are expected to understandintegrity;
•Understand our business and the industry in which we operate, regularlyoperate;
•Regularly attend meetings of our board of directors and committee meetings, participatemeetings;
•Participate in meetings and decision makingdecision-making processes in an objective and constructive manner,manner; and be
•Be available to advise our officers and management.
Evaluations of candidates generally involve a review of background materials, internal discussions, and interviews with selected candidates, as appropriate. Upon selection of a qualified candidate, the Nominatingcorporate responsibility, sustainability and Governance Committeegovernance
committee recommends the candidate to our board of directors. The Nominating and Governance Committeecommittee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees.
We are committed to a merit-based system for composition of our board of directors, which includes multiple perspectives and views. The Nominatingcorporate responsibility, sustainability and Governance Committee doesgovernance committee considers individuals on the basis of their integrity, experience, achievements, judgment, personal character, and capacity to make independent analytical inquiries, ability and willingness to devote adequate time to director duties, and likelihood that they will be able to serve as a director for a sustained period. While we do not have a formal policy regarding the consideration of diversity in identifying nominees for directors. Oncedirectors, we value the Nominatingbenefits that a diversity of business experience, geography, age, gender identity, race and Governance Committee has confirmed that an individual meets the general qualifications for a director, and has further determined that such individual is appropriately qualifiedethnicity can bring to serve on our board of directors,directors. We believe diversity on the Nominating and Governance Committee then considers the extent to which the membership of the candidate on our board of directors would promote a diversitypromotes the inclusion of different perspectives backgrounds and experiences amongideas and ensures that we have the directors, including expertiseopportunity to leverage all available talent and experience in a diversity of substantive matters pertaining to our business. However, ourmakes prudent business sense. Our board of directors does not believebelieves fostering a diverse board of directors also makes for better corporate governance and will seek to maintain a board of directors comprised of talented and dedicated directors with a diverse mix of expertise, experience, skills and backgrounds that reflect the subjective and varyingdiverse nature of this nomination process lends itself to a formal policy or fixed rules with respect to the diversity of our board of directors.business environment.
The Nominatingcorporate responsibility, sustainability and Governance Committeegovernance committee will consider director candidates recommended by stockholders.shareholders. The Nominating and Governance Committeecommittee will evaluate director candidates in light of several factors, including the general criteria set forthoutlined above. StockholdersShareholders who wish to recommend individuals for consideration by the Nominating and Governance Committeecommittee to become nominees for election to our board of directors at an annual meeting of stockholdersshareholders must do so in accordance with the procedures set forthprocess outlined in "Stockholder"Shareholder Proposals to be Presented at the 20172022 Annual Meeting of Stockholders"Shareholders" section of this proxy statement and in compliance with our bylaws. Each submission must set forth:include: the name and address of the stockholdershareholder on whose behalf the submission is made; the number of our shares that are owned beneficially by such stockholderthat shareholder as of the date of the submission and the time period for which suchthose shares have been held; the derivative securities interests owned beneficially by such stockholderthat shareholder as of the date of the submission; a statement from the record holder of the shares and derivative securities interests verifying the holdings; the full name of the proposed candidate; a description of the proposed candidate's business experience for at least the previous five years; complete biographical information for the proposed candidate; a description of the proposed candidate's qualifications as a director; and any other information described in our bylaws and in our "Guidelines for Evaluating Director Candidates",Candidates," which is available on our website at www.lululemon.com.
Board Structure
We have a classified board structure where board members are elected to three-year terms, such that generally every year only one-third of the directors are considered for election or re-election. We have had this board structure continuously since lululemon
became a publicly traded company in 2007. Our board of directors believes that the classified board structure has served lululemon and our stockholdersshareholders well and continues to benefit our stockholders.
Our board of directors and its current governance structure has overseen a sustained period of strong performance. Our commitment to the value and reputation of the lululemon athletica and ivivva athletica brands, the concentrated efforts of our board of directors, and the constant focus on our mission and core values have produced strong financial performance over time.shareholders. We believe that continuity in membership of our board of directors has assisted in consistent application of our heritagepractice of combining performance and styleleadership to achieve our goals.
Our board of directors also believes that a classified board structure provides valuable stability and continuity of leadership for lululemon which is important to long-term stockholdershareholder value. With three-year terms, directors develop a deeper understanding of our business, values, competitive environment, and strategic goals. Experienced directors are better positioned to provide effective oversight and advice consistent with the long-term best interest of stockholders.shareholders. It also enhances the board's ability to make fundamental decisions that are best for lululemon and its shareholders, such as decisions on strategic transactions, significant capital commitments, and careful deployment of financial and other resources. Electing directors to three-year terms also enhances the independence of non-employee directors. It permits them to act independently and on behalf of all shareholders without worrying whether they will be re-nominated by the other members of the board each year. The longer term reduces the influence of special interest groups or significant stockholdersshareholders who may have agendas contrary to the majority of stockholdersshareholders and lululemon's own long-term goals.
Our stockholders have repeatedly and consistently registered their approval of the The board of directors inbelieves the last three elections. Similarly, at our 2014 annual meeting, stockholders expressed substantial support for the compensation of our named executive officers (including our chief executive officer, chief financial officer and each of our next three most highly compensated executive officers), with approximately 99% of the votes castfreedom to focus on the proposal voting for approval.long-term interests of lululemon, instead of short-term results and the re-nomination process, leads to greater independence and better governance.
In addition, our board of directors intends thatbelieves the classified board structure can be a safeguard against a purchaser gaining control of lululemon without paying fair value. Because only approximately one-third of the directors are elected at any annual meeting, a majority of the board of directors cannot be replaced at a single annual meeting. A classified board does not preclude a change in control of lululemon. It can, however, provide the board of directors more time and flexibility to evaluate the adequacy and fairness of proposed offers, to implement the optimal method of enhancing stockholdershareholder value, to protect stockholdersshareholders against abusive tactics during a takeover process, and to negotiate the best terms for all stockholders,shareholders, without the threat of imminent removal of a majority of board members. Our board of directors believes that without a classified board structure, the board of directors' powerits ability to deal with proposals it believes are unfair to lululemon's stockholdersshareholders or inadequate would be significantly reduced.
Although our board of directors believes a classified board structure is best for lululemon and our shareholders at this time, our board of directors also believes board composition needs to be very responsive to the changing needs of lululemon, however rapid or long-term. Our board of directors evaluates and refreshes itself on a regular basis in an effort to ensure there is proper board
composition to meet the current and long-term business needs of lululemon. The average length of service on our board of directors by our current board members is approximately six years. Our board of directors believes its approach toward board turnover has achieved the right balance between the need for continuity and the need for fresh perspectives on the board and continues to place lululemon's best interests and needs above any individual agenda.
Board Leadership Structure
Our board of directors believes that one of its most important functions is to protect stockholders'shareholders' interests through independent oversight of management, including the Chief Executive Officer.chief executive officer. However, our board of directors does not believe that effective management oversight necessarily mandates a particular management structure, such as a separation of the role and identities of the Chairmanchair of the Boardboard of directors and Chief Executive Officer.chief executive officer. Our board of directors considers it important to retain flexibility to exercise its judgment as to the most appropriate management structure for lululemon, based on the particular circumstances facing lululemon from time to time.
Currently, the positions of Co-Chairmenchair of the Boardboard of directors and Chief Executive Officerchief executive officer are held by separate persons because our board of directors has determined that this structure aids in the oversight of management and iswas in the best interests of our company and our stockholdersshareholders at this point in time. Michael Casey and David M. Mussafer currently serve as Co-Chairmen of the Board.
Board Nomination Rightsand Committee Evaluations
Under the terms and subject to certain conditions of a support agreement with the company, Dennis J. Wilson and Advent International Corporation, Advent has a continuing right to nominate (i) two designees to theThe board of directors for so long as Advent beneficially owns at least 10.0% of our voting securities or (ii) one designee toand each committee perform annual self-evaluations under the board of directors for so long as Advent beneficially owns at least 6.75% (but less than 10.0%) of our voting securities. Further, for so long as Advent beneficially owns at least 6.75% of our voting securities, one of its nominees will have the opportunity to serve as a Co-Chairmanguidance of the Boardcorporate responsibility, sustainability and at least one of its nominees will have the opportunity to joingovernance committee. In connection with these evaluations, each of the committeesdirectors is requested to provide their assessment of the effectiveness of the board of directors (subject to independence and other applicable requirements). Mr. Mussafer and Mr. Collins were appointedthe committees on which they serve to the board of directors,corporate responsibility, sustainability and Mr. Mussafer was appointed as Co-Chairman of the Board, in connection with Advent's nomination rights.governance committee. Generally, these annual evaluations include peer evaluations.
In addition, under the terms and subject to certain conditions of the support agreement, Mr. Wilson has a continuing right to nominate one designee to the board of directors for so long as he beneficially owns at least 8.0% of our voting securities. Ms. Henry was appointed to the board of directors in connection with Mr. Wilson's nomination rights.
Communications with Directors
StockholdersShareholders may communicate with members of our board of directors by transmitting correspondence by mail facsimile or email, addressed as follows:
Corporate Secretary
c/o lululemon athletica inc.
1818 Cornwall Avenue
Vancouver, British Columbia
Canada V6J 1C7
Facsimile: (604) 874-6124
Email: investors@lululemon.com
The Corporate Secretarycompany secretary will, as they deem appropriate, forward communication to our board of directors or to any individual director, directors, or committee of our board of directors to whom the communication is directed.
Code of Business Conduct and Ethics
We have adopted a Codecode of Business Conductbusiness conduct and Ethicsethics that applies to all of the officers, directors and employees of lululemon and our subsidiaries. The most current version is available on our website at www.lululemon.com. If we make any substantive amendments to the code or grant any waiver from a provision of the code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website, as well as via any other means required by Nasdaq rules or applicable law.
2014 "Say-on-Pay"Say-on-Pay Advisory Vote on Executive Compensation
We provided stockholdersshareholders a "say-on-pay" advisory vote on the compensation of our named executive compensationofficers at our 20142020 annual meeting. At that meeting, under Section 14A of the Securities Exchange Act of 1934, as amended. At our 2014 annual meeting, stockholdersshareholders expressed substantial support for the compensation of our named executive officers (which term includes(who generally include our chief executive officer, chief financial officer and each of our next three most highly compensated executive officers during a particular fiscal year), with approximately 99%97% of the votes cast on the proposal voting for approval of the "say-on-pay" advisory vote on executive compensation. Based upon the 2011 "say-on-frequency" advisory vote in which a majoritycompensation of our voting stockholders approved an advisory vote on "say-on-pay" every three years, our next "say-on-pay" advisory vote onnamed executive compensation will be held at our 2017 annual meeting of stockholders.officers.
The Compensation Committeepeople, culture and compensation committee considered the results of the 2014 "say-on-pay"2020 advisory votes following the 2014 annual meeting.say-on-pay vote when evaluating our compensation principles, design, and practices. The Compensation Committeecommittee also considered many other factors in evaluating our executive compensation programs as discussed in the Compensation Discussioncompensation discussion and Analysis, including the Compensation Committee's assessment of the interaction of our compensation programs with our corporate business objectives, evaluations of our programs by the Compensation Committee's independent consultant and a review of market practices for a comparative group of peers.analysis. While each of these factors bore weight on the Compensation Committee'scommittee's decisions regarding the compensation arrangements of our named executive officers, the Compensation Committeecommittee did not make any changes to our executive compensation policies and practices as a direct result of the 2014 "say-on-pay"2020 advisory say-on-pay vote.
Advisory Vote on the Frequency of Say-on-Pay Votes
We provided shareholders an opportunity to cast an advisory vote on how often we should include an advisory say-on-pay proposal in our proxy materials for future shareholder meetings at our 2017 annual meeting. Shareholders had the opportunity to recommend holding the advisory say-on-pay vote every year, every two years or every three years. At our 2017 annual meeting, shareholders holding a majority of the shares voting on this proposal preferred that we hold the advisory say-on-pay vote every year.
After considering the results of the 2017 advisory vote on the frequency of the say-on-pay votes and other factors it deemed relevant, the people, culture and compensation committee believed this outcome conveyed our shareholders' support for holding an advisory vote on say-on-pay every year. Accordingly, we are providing shareholders a say-on-pay advisory vote at this year's annual meeting.
The Dodd-Frank Act requires us to hold this advisory vote on the frequency of the advisory say-on-pay vote at least once every six years. Accordingly, our next advisory vote on how often we should include an advisory say-on-pay proposal in our proxy materials is expected to be at the 2023 annual meeting.
Risk Oversight
In its governance role, and particularly in exercising its duty of care and diligence, our board of directors is responsible for ensuring that appropriateoverseeing and assessing risk management policies and procedures are in placedesigned to protect the company's assets and business. While our board of directors has the ultimate oversight responsibility for the risk management process, our board of directors has delegated to the Audit Committeeaudit committee the initial responsibility of overseeing the company's risk assessment and risk management. In fulfilling its delegated responsibility, the Audit Committeeaudit committee has directed management to ensure that an approach to risk management is implemented as a part of the day-to-day operations of lululemon, and to design internal control systems with a view to identifying and managing material risks.
On a periodic basis, (not less than quarterly), the Audit Committeeaudit committee reviews and discusses with the appropriate members of our Chief Financial Officer, our Vice President, Corporate Controller,finance team and our internal auditors the company's significant financial risk exposures and the steps that management has taken to monitor, control, and report suchthose risks. In addition, the Audit Committeeaudit committee regularly evaluates the company's policies, procedures, and practices with respect to enterprise risk assessment and risk management (including those risks related to information security, cyber security, and data protection), including discussions with management about material risk exposures and the steps being taken to monitor, control, and report suchthose risks. The Audit Committeeaudit committee reports its activities to the full board of directors on a regular basis (not less than annually) and in that regard makes such recommendations to our board of directors with respect to risk assessment and management as it may deem necessary or appropriate.
On a periodic basis, (not less than annually), the Compensation Committeepeople, culture and compensation committee reviews the various design elements of our compensation policies and practices to determine whether any of their aspects encourage excessive or inappropriate risk-taking by our executive officers. The Compensation Committeepeople, culture and compensation committee reports its activities in this regard to the full board of directors and makes such recommendations to our board of directors with respect to our compensation policies and practices as it may deem necessary or appropriate.
Anti-Hedging Policy
Our insider trading policy prohibits our directors, officers and other employees from speculating in our stock, including trading in options, warrants, puts and calls, or similar derivative securities, selling lululemon stock short and participating in hedging transactions. Our policy also prohibits our directors, officers and certain other employees from pledging lululemon stock as collateral for a loan.
Compensation Committee Interlocks and Insider Participation
The fiveThree of the current members of the Compensation Committee,people, culture and compensation committee, Emily White (chair), Martha Morfitt, and Michael Casey, (Chairperson), Steven J. Collins, Martha A.M. Morfitt, Rhoda M. Pitcher, and Emily White, have never served as one of our officers or employees. Kathryn Henry was previously our chief information officer, logistics & distribution and last served as an executive in 2014. None of our executive officers currently serve,serves, or in fiscal 20152020 served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve on our board of directors or Compensation Committee.people, culture and compensation committee.
Director and Officer Stock Ownership Guidelines
In June 2008, we adopted our director and officer stock ownership guidelines due to our belief that our non-employee directors and certain |
| | |
Position | | Minimum Ownership Guidelines
(Dollar Value of Shares)
|
Non-employee directors | | 5 x Annual Cash Retainer Compensation |
Chief Executive Officer | | 5 x Base Salary |
Other executive officers reporting to Chief Executive Officer | | 3 x Base Salary |
Our non-employee directors are encouraged to comply with the guidelines within five years after their date of appointment or election.ContentsThe executive officers subject to the stock ownership guideline are required to retain 75% of the net shares of common stock acquired upon the vesting or exercise of any new incentive equity awards, after deducting the number of shares of common stock that would be needed to pay applicable taxes and/or exercise price, until the applicable stock ownership guideline is met. The executive officers subject to these stock ownership guidelines were required to comply with these stock ownership guidelines and stock retention policy by February 1, 2016.
Executive Officers
Our executive officers and their agesare as follows:
| | | | | | | | | | | | | | | | | | | | |
| Name | | Age(1) | | Position | | Officer Since |
| Calvin McDonald | | 49 | | Chief Executive Officer | | 2018 |
| Meghan Frank | | 44 | | Chief Financial Officer | | 2020 |
| Celeste Burgoyne | | 47 | | President, Americas & Global Guest Innovations | | 2016 |
| Michelle (Sun) Choe | | 52 | | Chief Product Officer | | 2018 |
| Nicole (Nikki) Neuberger | | 39 | | Chief Brand Officer | | 2020 |
| André Maestrini | | 57 | | Executive Vice President, International | | 2021 |
(1)Age as of April 22, 2016 were as follows:
|
| | | | | | |
| Name | | Age | | Position | | Officer Since |
| Laurent Potdevin | | 48 | | Chief Executive Officer | | 2014 |
| Stuart Haselden | | 46 | | Chief Financial Officer and Executive Vice President, Operations | | 2015 |
| Miguel Almeida | | 39 | | Executive Vice President, Digital | | 2015 |
| Lee Holman | | 44 | | Executive Vice President, Creative Director | | 2015 |
| Scott Stump | | 49 | | Executive Vice President, Community and Brand | | 2014 |
Laurent Potdevin's biographical summary is included under "Corporate Governance — Our Board of Directors".1, 2021
Stuart Haselden
Calvin McDonaldwas appointed chief executive officer of lululemon and a member of our board of directors in August 2018. Prior to joining lululemon, Mr. McDonald served for five years as president and chief executive officer of Sephora Americas, a division of the LVMH group of luxury brands. Prior to joining Sephora in 2013, Mr. McDonald spent two years as president and chief executive officer of Sears Canada. Prior to his tenure at Sears Canada, Mr. McDonald spent 17 years at Loblaw Companies Limited, a grocery and pharmacy leader in Canada. Mr. McDonald received an MBA from the University of Toronto, and Bachelor of Science degree from the University of Western Ontario.
Meghan Frank has served as our Chief Financial Officerchief financial officer since February 2015November 2020. She joined lululemon in 2016 as the senior vice president, financial planning and also becameanalysis, and is now responsible for leading finance, tax, treasury, investor relations, asset protection, facilities, operations excellence, and strategy functions. Ms. Frank has over 20 years of experience within the retail industry, previously holding senior positions at Ross Stores and J. Crew. She earned her Bachelor of Arts degree from Colgate University.
Celeste Burgoyne was appointed as our Executive Vice President, Operationspresident, Americas and global guest innovation in October 2015. Mr. Haselden's career spans 15 years of executive leadership at global apparel retailers, including J. Crew Group, Inc.2020. Since joining lululemon in 2006, her role has expanded to oversee all channel and Saks Incorporated. Most recently, Mr. Haselden served as Chief Financial Officer and Executive Vice President of J. Crew since May 15, 2012 and also served as its Principal Accounting Officer. From 2009 to 2012, Mr. Haselden served as J. Crew's Senior Vice President of Finance and Treasurer, and served as Vice President of Financial Planning & Analysis from 2006 to 2009. Before joining J. Crew, Mr. Haselden served as the Vice President of Strategic Planning for Saks Incorporated where he held a variety of positions from 1999 to 2005. Mr. Haselden also serves on the advisory boardcustomer-facing aspects of the School of Human Sciences at Auburn University.
Miguel Almeida has served as our Executive Vice President, Digital since July 2015. Mr. Almeida's career spans over 15 years of operationalNorth American business, including stores and senior leadership with a keen focus on digital strategies. Most recently, he was the Group VP, Digital Commerce and Mobile solutions for Walgreens where he wase-commerce. She is also responsible for omni-channel initiatives, mobile solutions,leading and online-to-consumer
commerce across a variety of digital brands.incubating guest innovations for lululemon globally. Prior to joining Walgreens, Miguellululemon, Ms. Burgoyne held senior roles invarious leadership positions during her ten years at Abercrombie & Fitch. Ms. Burgoyne holds a B.A. from the online groupsUniversity of Apple and Dell where he drove global online expansion for both companies. Previously, he was a strategy consultant with The Boston Consulting Group where he worked across multiple countries in Europe and South America mainly in high technology, telecom, ecommerce, marketing and retail. Mr. Almeida received a licentiate degree in business administration from Universidade Catolica Portuguesa in Lisbon and holds an MBA from Harvard Business School.San Diego.
Lee HolmanMichelle (Sun) Choe has served as our Executive Vice President, Creative Directorchief product officer since October 2015. He was previously our Senior Vice President, Women's. Mr. HolmanSeptember 2018, where she leads the merchandising and design teams for the company. She joined lululemon in 20142016 as senior vice president, merchandising and has been instrumental in elevating merchandising capabilities, partnering with 20 years of design leadership and leadership experience, including senior positions at Nike, where heinnovation to deliver the lululemon vision to guests through best in class product assortments. Prior to joining lululemon, Ms. Choe served as Creative Directorchief global product merchant at Marc Jacobs and worked in multi-channel merchandising at brands including West Elm, Madewell, Urban Outfitters, Levi's and The Gap. Ms. Choe received her B.A. from the University of Nike Sportswear and most recently as Vice President of Global Apparel, Innovation and Equipment Design Men's & Women's. Prior to Nike, Lee was Creative Director for high profile brands such as Burberry, and spent several years at Abercrombie & Fitch, Levi Strauss & Co, and Paul Smith. Mr. Holman obtained his MA Fashion Design from Central Saint Martins.Maryland College Park.
Scott (Duke) StumpNicole (Nikki) Neuburger has served as our Executive Vice President, Communitychief brand officer since January 2020 with the responsibility to drive our global brand and Brandstorytelling initiatives and lead marketing, creative, communications, events, store design, sustainable business and impact functions. Prior to joining lululemon, Ms. Neuburger was the global head of marketing at Uber Eats where she led the introduction and expansion of the brand. She also built a 14-year career at Nike where she most recently served as the global vice president of Nike Running. Ms. Neuburger received her Bachelor of Science in Business Administration from Oregon State University.
André Maestrini has served as our executive vice president, international since November 2014.January 2021, leading our international expansion in China, Asia Pacific and EMEA regions. Prior to joining lululemon, Mr. Stump wasMaestrini spent 14 years at adidas in various senior roles and across several of the Principal and Chief Architect at the Northstar Manifesto, which emphasized the role thatcompany’s global offices. He has a business conscience can play in propelling brands further on the road todemonstrated record of growth and sustainability, whereunlocking opportunities by leveraging the brand and categories across multiple channels, and most recently, he had been since 2008. Heoversaw a multi-billion dollar business as the senior vice president, global general manager, sports business units, running, training, football, basketball & heartbeat sports. At adidas, he also successfully grew the business in China and served as general manager of the SVP Culture, Creativebusiness units in France and Brand Innovation at Easton Sports from January 2011 to April 2014.Latin America. Prior to 2008,adidas, Mr. Stump workedMaestrini held marketing roles at Seventh Generation as the Chief Marketing OfficerThe Coca-Cola Company, Danone, and spent over 15 years at NikeKraft Jacobs Suchard. He received a master’s degree in various rolesmarketing from ESSEC Business School in brand, product and sales.Paris, France.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committeeaudit committee of our board of directors has selected PricewaterhouseCoopers LLP,, or PwC,, as our independent registered public accounting firm to audit the consolidated financial statements of lululemon for the fiscal year ending January 29, 2017. 30, 2022. PwC has acted in such capacity since its appointment in fiscal 2006. A representative of PwC is expected to be present at the annual meeting, with the opportunity to make a statement if the representative desires to do so and is expected to be available to respond to appropriate questions.
StockholderShareholder ratification of the selection of PwC as our independent registered public accounting firm is not required by our bylaws or otherwise. However, the board of directors is submitting the selection of PwC to the stockholdersshareholders for ratification as a matter of good corporate governance practice. If the stockholdersshareholders fail to ratify the selection, the Audit Committeeaudit committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committeeaudit committee at its discretion may direct the selection of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of lululemon and our stockholders.shareholders.
Fees for Professional Services
The following table sets forthshows the aggregate fees billed or expected to be billed to lululemon for the fiscal years ended January 31, 20162020 and February 1, 2015fiscal 2019 by PwC:
| |
|
| Fiscal 2015 |
| Fiscal 2014 | | | Fiscal 2020 | | Fiscal 2019 |
Audit Fees(1) |
| $ | 773,161 |
|
| $ | 750,262 |
| Audit Fees(1) | | $ | 1,164,616 | | | $ | 1,031,603 | |
Audit-Related Fees(2) |
| $ | — |
|
| $ | — |
| Audit-Related Fees(2) | | 116,347 | | | 101,464 | |
Tax Fees(3) |
| $ | — |
|
| $ | 9,900 |
| Tax Fees(3) | | — | | | — | |
All Other Fees(4) |
| $ | — |
|
| $ | — |
| All Other Fees(4) | | 15,208 | | | — | |
__________
| |
(1)(1)Audit fees consist of fees for professional services rendered for the audit of our consolidated annual financial statements and review of the interim consolidated financial statements included in our quarterly reports and services that are normally provided by PwC in connection with statutory and regulatory filings or engagements, including consent procedures in connection with public filings. (2)Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under audit fees. (3)Tax fees consist of fees for professional services rendered for tax compliance, tax advice and tax planning (domestic and international). These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning. (4)All other fees consist of fees for products and services other than the services reported above. | Audit Fees consist of fees for professional services rendered for the audit of our consolidated annual financial statements and review of the interim consolidated financial statements included in our quarterly reports and services that are normally provided by PwC in connection with statutory and regulatory filings or engagements, including consent procedures in connection with public filings. |
| |
(2)
| Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit Fees". |
| |
(3)
| Tax Fees consist of fees for professional services rendered for tax compliance, tax advice and tax planning (domestic and international). These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning. |
| |
(4)
| All Other Fees consist of fees for products and services other than the services reported above. |
The Audit Committee'saudit committee's policy is to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services, and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to the Audit Committeeaudit committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval. The Chairperson of the Audit Committeeaudit committee chair is also authorized, pursuant to delegated authority, to pre-approve additional services on a case-by-case basis, and such approvals are communicated to the full Audit Committeeaudit committee at its next meeting.
None of the services related to Audit-Related Fees, Tax Fees,audit-related fees, tax fees, or All Other Feesall other fees described above were approved by the Audit Committeeaudit committee pursuant to the waiver of pre-approval provisions set forth inunder applicable rules of the SEC.
Vote Required and Board Recommendation
ApprovalIf a quorum is present, the selection of this proposal requires the affirmative vote of a majority ofour independent registered public accounting firm will be ratified if the votes cast affirmatively or negatively onfor this proposal exceed the votes cast against this proposal at the annual meeting, as well as the presence of a quorum representing a majority of all outstanding shares of our common stock, either in person or by proxy.meeting. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will not have anyno effect on the outcome of thethis proposal.
Our board of directors unanimously recommends a vote "FOR""FOR" the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending January 29, 2017.30, 2022.
REPORT OF THE AUDIT COMMITTEE
The Audit Committeeaudit committee oversees lululemon's financial reporting process on behalf of our board of directors. Management has the primary responsibility for the financial statements and the reporting process, including internal control systems. Our independent registered public accounting firm PricewaterhouseCoopers LLP, is responsible for expressing an opinion as to the conformity of our audited financial statements with generally accepted accounting principles. The Audit Committeeaudit committee also evaluates lululemon's policies, procedures and practices with respect to enterprise risk assessment and risk management (including those risks related to information security, cyber security, and data protection), including discussions with management about material risk exposures and steps being taken to monitor, control, and report such risks.
The Audit Committeeaudit committee consists of fourfive directors, each of whom, in the judgment of our board of directors, is an "independent director" for purposes of the Nasdaq listing standards.standards as they apply to audit committee members. The Audit Committeeaudit committee acts pursuant to a written charter that has been adopted by our board of directors. A copy of this charter is available on our website at www.lululemon.com.
The Audit Committeeaudit committee has reviewed and discussed the audited financial statements with management. The Audit Committeeaudit committee has discussed and reviewed with our independent registered public accounting firm all matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board, ("PCAOB") Auditing Standard No. 16, Communication with Audit Committees.or PCAOB, and the Securities and Exchange Commission. The Audit Committeeaudit committee has met with PricewaterhouseCoopers LLP,our independent registered public accounting firm, with and without management present, to discuss the overall scope of PricewaterhouseCoopers LLP'sits audit, the results of its examinations, and the overall quality of lululemon's financial reporting.
The Audit Committeeaudit committee has received from our independent registered public accounting firm a formal written statement describing all relationships between the firm and lululemon that might bear on the auditors' independence, as required by the applicable requirements of the PCOAB,PCAOB, and has discussed with the auditors any relationships that may impact their objectivity and independence and satisfied itself as to the auditors' independence.
Based on the review and discussions referred to above, the Audit Committeeaudit committee recommended to our board of directors that lululemon's audited financial statements be included in lululemon's Annual Report on Form 10-K for the fiscal year ended January 31, 2016.2021.
| | | | | |
| AUDIT COMMITTEE |
| |
| AUDIT COMMITTEEMartha Morfitt (chair) |
| |
| Martha A.M. Morfitt (Chairperson) |
| Robert Bensoussan |
| Michael Casey |
| William H. GlennStephanie Ferris |
| Kourtney Gibson |
| Kathryn Henry |
PROPOSAL NO. 3
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The compensation discussion and analysis section highlights how our design and practices reflect our compensation philosophy. The people, culture and compensation committee and our board of directors believe our executive programs align with our business strategy and the interests of our shareholders, while continuing to attract and motivate key executives. A significant portion of the total incentive compensation for each of our executives is directly related to our financial performance results and other performance factors to measure our progress against strategic plans.
We are required to submit a proposal to shareholders for a (non-binding) advisory vote to approve the compensation of our named executive officers under Section 14A of the Securities Exchange Act of 1934. This proposal, commonly known as a "say-on-pay" proposal, gives our shareholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the compensation principles, policies and practices described in this proxy statement. Accordingly, the following resolution is submitted for shareholder vote at the annual meeting:
•The compensation of the named executive officers, as disclosed in this proxy statement (including the compensation discussion and analysis, the compensation tables, and the narrative disclosure that accompanies the compensation tables), is hereby approved.
Vote Required and Board Recommendation
If a quorum is present, the compensation of our named executive officers will be approved, on an advisory basis, if the votes cast for this proposal exceed the votes cast against this proposal. Abstentions and broker non-votes will have no effect on the outcome of this proposal.
Our board of directors unanimously recommends a vote "FOR" the approval, on an advisory basis, of the compensation of our named executive officers.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Philosophy and Objectives
The Compensation Committee has adopted a compensation philosophy forfollowing section describes our executive compensation program for fiscal 2020 (and certain elements of fiscal 2021) for our "named executive officers" as outlined in the table below. The intent is to provide shareholders with a discussion of our compensation policies and practices, and related corporate governance. This way, shareholders can take confidence in our approach to executive compensation, including how our programs are linked to financial performance and contribute to lululemon's culture.
| | | | | |
| 2020 Named Executive Officers | Title |
| Calvin McDonald | Chief Executive Officer |
| Meghan Frank | Chief Financial Officer |
| Celeste Burgoyne | President, Americas and Global Guest Innovation |
| Michelle (Sun) Choe | Chief Product Officer |
| Nicole (Nikki) Neuburger | Chief Brand Officer |
Patrick J. Guido(1) | Former Chief Financial Officer |
(1) Mr. Guido resigned from his position as Chief Financial Officer, effective May 8, 2020.
Compensation Philosophy
We are committed to a compensation strategy that hassupports our values and rewards exceptional performance. Our executive compensation policies are based on the following goals:principles that compensation should be reflective of our financial performance (pay-for-performance), aligned with shareholders and significantly tied to value creation through equity-based long-term incentives.
In Practice
The people, culture and compensation committee seeks to set total compensation at competitive levels to attract, motivate, and retain highly qualified executives who contribute to lululemon's success and motivatealigns with our entrepreneurial culture. In assessing overall compensation, the committee generally considers the factors outlined in the chart below. As a company based in Canada which recruits our executives globally, we have developed certain compensation practices to remain competitive. Our executive talent necessary to driveofficers are paid in U.S. dollars and are offered select tax and relocation assistance.
Compensation Design Our 2020 executive compensation program consisted of five elements:
Our compensation program mix is heavily performance-based as 86% of our chief executive officer's annual target compensation, and an average of 71% of the other named executive officers' annual target compensation, is contingent upon the achievement of lululemon's high performance retail business modelobjectives and/or share price performance.
People, Culture and contribute to our company's success;
focus on pay-for-performance by linking a significant portion of executive pay to the achievement of short-term and long-term business objectives;
align the interests of executives and stockholders by delivering a significant component of executive pay through performance based equity compensation and through our executive share ownership guidelines; and
provide total compensation near the market median for achieving business goals with the ability for actual pay to reach the 75th percentile or above for substantially exceeding goals.
Role of the Compensation Committee in Executive CompensationDuties and Responsibilities
The Compensation Committeepeople, culture and compensation committee evaluates the pay of our executive officers with the goal of setting compensation opportunities at levels they believe are comparable with executives in otherpeer companies operating in the retail apparel and other related industries that are generally of similar industry, size and scope of operations. The Compensation Committeecommittee is responsible forfor:
•Goals and objectives: establishing target compensation opportunities, for our executive officers,and reviewing and approving our goals and objectives relating to the compensation of our executive officers, evaluating the performance of our executive officers in light of such goals and objectives, and determiningthat will determine the actual compensation levels, perquisites and other benefits offor our executive officers based on this evaluation. The Compensation Committee is also charged with reviewing and officers.
•Programs: recommending to our board of directors new or potential changes in executive compensation programs,design, policies and practices, and evaluating our compensation policies and practices to determine whetherif they are properly coordinated and achieving their intended purposes,purposes.
•Risks: reviewing the various design elements of our compensation programs to determine whetherif there are any of their aspects which encourage excessive or inappropriate risk-taking and by our executive officers.
•Administration: establishing and periodically reviewing policies for the administration of our executive compensation programs.
•Talent: managing executive officer talent and succession planning.
In connection with setting the appropriate levels of compensation for our executive officers, the Compensation Committee basescommittee may base its decisions on decision on:
•Individual performance: the general business and industry knowledge of the members of the Compensation Committee, the performance evaluations,evaluation, experience, responsibilities and potential of each individual, the recommendations of the Chief Executive Officerindividual.
•Evaluation: chief executive officer evaluation with respect to the other executive officers, and the advice of its independent compensation consultant, as well as information provided to the Compensation Committee with respect to the compensation ofofficers.
•Peers: similarly situated executives at other comparable companies, while also taking into account ourcompanies.
•Company Performance: the company's absolute and relative performance and achievement of strategic and financial goals.
•Independent Compensation Consultant: the advice of consultants for external expertise.
Role of the Independent Compensation Consultant
The Compensation Committeepeople, culture and compensation committee has engaged Frederic W. Cook & Co., or FWC,Willis Towers Watson (WTW) as its independent consultant for executive officer and director compensation consultant. FWCmatters. WTW reports directly to the Compensation Committeecommittee, and provides review of certain materials, attends Compensation Committee meetings as requested. Under the terms of its engagement, FWC is responsible for reviewing Compensation Committee agendas and supporting materials in advance of each meeting, providingrequested, provides market data and recommendations, regarding the compensation of the executive officers, advisingadvises on evolving trends and best practices in executive compensation and committee governance, assisting in the review and evaluation of our compensationevaluates policies and practices, and reviewingreviews the compensation discussion and analysis disclosure in our Compensation Discussionproxy statement.
During fiscal 2020, management engaged WTW for consulting services regarding survey data services, and Analysis. FWC also provides independent advice tointernational compensation plans and policies. The WTW team management engaged was separate from the Compensation Committee on director compensation. FWC does not provide,team the people, culture, and is prohibited from providing, othercompensation committee engaged. The fees for those services to lululemonwere less than the $120,000 disclosure threshold.
SEC Independence
The people, culture and our management team. The Compensation Committeecompensation committee reviewed its relationship with FWC, considered FWC's independence and the existence of potential conflicts of interest, and determinedWTW to determine that the engagement of FWC did not raise any conflict of interest. In reaching this conclusion,Factors considered included the Compensation Committee considered various factors, including the six factors set forth in the SEC and Nasdaq rules regarding compensation committee advisor independence.independence, which include (1) other services provided by the advisor's firm, (2) fees as a percentage of firm revenue, (3) any policies and procedures maintained by the advisory firm to prevent or mitigate potential conflicts of interest, (4) any business or personal relationship of the compensation advisor with a member of the compensation committee, (5) any company stock owned by the compensation advisor, and (6) any business or personal relationship of the compensation advisor or the firm employing the advisor with an executive officer of lululemon.
Role of Executive Officers in Executive Compensation
Our non-employee directors underset the direction of the Co-Chairmen of the Board, meet with our Chief Executive Officer at the beginning of the year to agree upon his performance objectives for the year. At the end of the year, the non-employee directors meet with the Chief Executive Officer to assess his performance taking into account his achievement of those objectives, contribution to the company's performance, ethics and integrity, and other leadership accomplishments. This evaluation is shared with the Chief
Executive Officer by the Co-Chairmen of the Board and is used by the Compensation Committee in setting the Chief Executive Officer'schief executive officer's compensation for the following year.
For the other executive officers, the Compensation Committee receives performance assessments and compensation recommendations from the Chief Executive Officer and also exercises its judgmentyear based in part on the directors' interactions with the executive officers. As with the Chief Executive Officer, an executive officer'sboard-wide performance assessment, is based on his or herwhich takes into account achievement of objectives, established between the executive officer and the Chief Executive Officer, contribution to the company'sour financial performance, ethics and integrity, and other leadership attributes and accomplishments.
Elements of Compensation
OurFor the other executive officers, the chief executive officer provides a performance assessment and compensation consistsrecommendation to the people, culture and compensation committee. The executive officers' achievement of objectives, contributions to financial performance, ethics and integrity and other leadership attributes and accomplishments are also further evaluated by the committee. Our senior vice president, people and culture supports the process and recommendations.
Peer Group
The people, culture and compensation committee reviews the peer group annually to ensure our executive compensation remains competitive against the most relevant external comparator companies (i.e., peers). In selecting peers, the committee aims to identify companies with characteristics similar to ours, taking into consideration our vision to be the experiential brand that ignites a community of people through sweat, grow and connect across all channels, as well our power of three growth strategy. We look at
comparably sized companies (based on revenue, operating income, and market capitalization, among others). Other key elements we look at include:
In 2020, we used the following components:
peer group to benchmark against executive pay and practices. |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Component2020 Peer Group: | | | | | | | | |
| American Eagle Outfitters | | Columbia Sportswear Company | | Land's End | | Tiffany & Co. | | VF Corp. |
| Burberry Group plc | | Deckers Outdoor | | PVH Corp. | | Ulta Beauty | | |
| Capri Holdings Limited | | Gildan Activewear | | Recreational Equipment, Inc. | | Under Armour, Inc. | | |
| Chipotle Mexican Grill | | L Brands | | Tapestry, Inc. | | Urban Outfitters | | |
Following a review with the support of WTW, the people, culture and compensation committee approved an updated peer group for 2021. While no singular company, or set of companies, have characteristics identical to lululemon, we worked to identify several companies which we believe have aspects similar to lululemon. The change to our peer group includes new peers that we believe more closely align with our high growth and strong consumer brand, while still remaining heavily weighted towards retailers.
Among our updated peer group, lululemon ranks slightly below median on revenue, and well above the 75th percentile on operating income, market capitalization, and total shareholder return over the last five years.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 Peer Group: | | | | | | | | |
| Burberry Group plc | | Deckers Outdoor | | Restoration Hardware | | Twitter, Inc. | | Urban Outfitters |
| Capri Holdings Limited | | Gildan Activewear | | Ross Stores, Inc. | | Uber Technologies, Inc. | | VF Corp. |
| Chipotle Mexican Grill | | PVH Corp. | | Square, Inc. | | Ulta Beauty | | Wayfair Inc. |
| Columbia Sportswear Company | | Recreational Equipment, Inc. | | Tiffany & Co. | | Under Armour, Inc. | | |
Elements of Compensation
The elements of total direct compensation we offer are linked to our business strategies and pay-for-performance philosophy, as outlined below. We aim to offer competitive compensation with our total compensation packages targeted between market median and the 75th percentile. We also offer limited other perquisites and standard retirement and benefit plans.
| | | | | | | | | | | | | | | | | | | | |
| Element | | Purpose | | How it Works | | Link to Business Strategies |
| Base Salary | | Provides base level of earnings throughout the year; considers a number of factors including responsibilities, industry experience, external market, and historical performance. | | Payable bi-weekly in arrears subject to deductions required by law or authorized by the executive. | | Competitive base salaries support in attracting and retaining executive talent. Base salaries are generally targeted near the market median of base salaries of similarly situated executives at peer group companies. |
| Annual Cash Incentive | | Rewards the achievement of annual financial operational and strategic goals, as well as individual annual performance objectives.goals. | | Generally awarded in the form of performance-based cash awards and are payable based on the achievement of corporate performance goals established by the Compensation Committee.people, culture and compensation committee. | | Performance metrics and incentive targets are set at the beginning of the fiscal year and align with our financial goals. Performance metrics typically include operating income and net revenue.
|
| Long-term Incentive Awards | | Rewards the achievement of our long-term performance goals and aligns the incentives of our executives with the interests of our stockholders.shareholders. | | Generally awarded in three equity vehicles: (1) stock options (2) PSU awards and (3) RSU awards. | | Metrics for PSU awards generally are set at the formbeginning of optionsthe fiscal year and are designed to purchase sharesalign with the delivery of goals we believe drive long-term shareholder performance. The ultimate value received by the executive officers is linked to the performance of our common stock, performance-based restricted stock unit awards whichshare price. PSUs generally do not vest on the achievement of performance goals established by the Compensation Committee, and restricted stock unit awards. |
Other Benefits (e.g., health benefits, life insurance) | | Supports the health and wellbeing of our executives. | | Executives participate in the same benefit program as other employees with coverage including health, dental, short and long term disability, and life and accidental death and dismemberment insurance.until 3 years after grant. |
Our compensation policies and practices with respect to each of these elements, including the basis for the compensation awarded to our executive officers, are discussed below. In addition, while each element of compensation described below is considered separately, the Compensation Committee takes into account the full compensation opportunity for each executive officer in determining his or her total compensation.
Peer Group
At least annually, the Compensation Committee, with the assistance of FWC, conducts a review of the peer group used for executive compensation comparisons to ensure all peer companies remain appropriate for comparison purposes. In selecting peer companies, the Compensation Committee aims to identify companies with characteristics similar to ours: are in the retail apparel industry or another related industry, have a strong consumer brand, are highly profitable and fast growing, and are of a comparable size (based on revenue, operating income and market capitalization). Based on these criteria, the Compensation Committee utilized the following 18 peer companies for 2015 pay decisions:
|
| | | | | | | | |
2015 Peer Group: | | | | | | | | |
Aeropostale | | Chipotle Mexican Grill | | Fossil | | Michael Kors Holdings | | Under Armour |
American Eagle Outfitters | | Coach | | Gildan Outdoor | | Netflix | | Urban Outfitters |
Buckle | | Crocs | | Joseph A. Bank | | Panera Bread | | |
Burberry | | Decker's Outdoor | | Kate Spade | | PVH | | |
Following a review conducted in June 2015, the Compensation Committee modified the peer group to remove Joseph A. Bank and added Finish Line and Lands' End to the 2016 peer group.
Base Salary
The base salary established for each of our executive officers is intended to reflect eachthat individual's responsibilities, scope, experience, historical performance, length of service, and other discretionary factors deemed relevant by the Compensation Committee.people, culture and compensation committee. Base salary is also designed to provide our executive officers with a base level of earnings during the course of the fiscal year that is not contingent on short-term
variations in our operating performance. In order to attract and retain qualified executives, base salaries are generally targeted nearreviewed at least annually by the market median of base salaries of similarly situated executives at the peer group companies. Base salaries for an executive officercommittee and may vary above or below median based on his or her performance, industry experience, and length of service.
be adjusted from time to time. In considering whether to adjust base salary, from year to year, the Compensation Committee considerspeople, culture and compensation committee may consider the following:
our•our corporate performance and the individual performance of the executive officer;
•the relative value of the executive officer's position within the organization;
•any new responsibilities delegated to the executive officer during the year;
•any contractual agreements with the executive officer; and
•the competitive marketplace for executive talent, including a review of base salaries for comparable positions at other similarly situated companies.talent.
With these principles in mind, base salaries are reviewed at least annually by the Compensation Committee and our board of directors, and may be adjusted from time to time based on the results of this review. To support this review, FWC prepares a report for the Compensation Committee annually that contains an assessment of our executive officers' compensation, including base salary, annual cash incentives, and equity-based incentives, relative to comparable positions at the peer group companies and to survey data as a secondary point of reference.
The market for our senior executive talent is global and highly competitive, with the majoritymany of our current executives being recruited from U.S.-based retailers.companies. To provide a more relevant and consistent comparison to the competitive salaries provided to comparable executives within our peer group, which are denominated in U.S. dollars, the salaries of our executive officers are denominated and paid in U.S. dollars.
Following its annual review of target compensation levels of the executive officers, and taking into consideration the unprecedented business environment as impacted by the outbreak of the COVID-19 coronavirus disease, the people, culture and compensation committee approved making no increases to named executive officer base salaries for fiscal 2020. Additionally, our senior leadership team, including our named executive officers, reduced their base salaries by 20% for three months in fiscal 2020. The cost savings were used to help establish a fund to aid employees affected by the COVID-19 crisis who were facing hardship in their lives.
Annual Cash Incentives
Our board of directors has the authority to awardDesign
The annual cash performance bonuses awarded to our executive officers. The annual performance bonusesofficers are intended to compensate our executive officersthem for achieving financial operational and strategic goals and for achieving individual annual performance objectives.goals. These annual bonus amounts are intended to reward both overall company and individual performance during the year and, as such, can be highly variable from year to year. Cash bonuses are designed to reward annual performance against key short-termannual performance metrics, as opposed todistinct from our equity grants which are designed to reward the achievement of our long-term performance goals. We believe establishing cash bonus opportunities is an important factor in both attracting and retaining the services of qualified and highly skilled executives, and in motivating our executives to achieve our annual objectives.
The Compensation Committee setspeople, culture and compensation committee will set the components of our annual cash performance bonus, including the following:
• target annual cash bonus levels for each of our executive officers as a percentage of his or her base salary. The payment of these cash bonuses is based on specified corporate and individual performance goals established by the Compensation Committee. Actual payouts of these cash bonuses may vary from 0% of the target bonus level for performance below a threshold determined by the Compensation Committee at the beginning of the fiscal year to 200% of the target bonus level for achieving or exceeding the maximum performance level determined by the Compensation Committee at the beginning of the fiscal year. The table below sets forth the annual target bonus levels, as a percentage of each executive officer's base salary, set by the Compensation Committee for fiscal 2015 for each of our executive officers included in the summary compensation table in this proxy statement, to whom we refer as "named executive officers":salary;
|
| | |
Executive | | 2015 Target Bonus as a Percentage of Base Salary |
Laurent Potdevin | | 150% |
Stuart Haselden | | 75% |
Scott Stump | | 75% |
Miguel Almeida | | 75% |
Lee Holman | | 75% |
Tara Poseley | | 75% |
The annual cash bonuses paid to our executive officers for fiscal 2015 were paid under an executive bonus plan adopted by our board of directors in March 2011, which was approved by our stockholders at our 2011 annual meeting. Annual cash bonuses for our executive officers will no longer be paid under •the executive bonus plan starting in fiscal 2016. Instead, these cash bonuses will be paid pursuant to performance-based cash awards under our 2014 Equity Incentive Plan, which was approved by our stockholders at our 2014 annual meeting. The executive bonus plan was designed for our executive officers at the level of executive vice president and above, as well as other senior officers designated by the Compensation Committee or our board of directors. The performance-based
cash awards under the 2014 Equity Incentive Plan are awarded to our executive officers at the level of executive vice president and above. Both the executive bonus plan and the performance-based cash awards have been designed to achieve maximum tax deductibility for executive bonuses under Section 162(m) of the Code.
Under the design of the annual cash bonuses for our executive officers, no payouts are provided to executives unless the company achieves a performance goal determined by the Compensation Committee at the beginning of the fiscal year. For fiscal 2015, the performance goal was based on operating income. The annual cash bonuses are funded at maximum if the performance goal is achieved and the Compensation Committee may use negative discretion to reduce payouts from the maximum level.
During the first quarter of each fiscal year, the Compensation Committee approves the company financial performance measures for the annual cash bonus awards and a range of potential payouts resulting from the achievement of each financial performance goal. The Compensation Committee also approves awards;
•the relative weighting of each specific financial performance measure. measure; and
•range of potential payouts usually during the first quarter of each fiscal year
The Compensation Committee, with the assistance of management and its independent advisor, undertook a detailed review of the incentive compensation programs of the company to ensure that they were appropriately aligned with the company's strategic direction. As a result of that review, the Compensation Committee determined that for fiscal 2015, thetarget annual cash bonus awards would be based entirely on the achievementlevels for each of company's performance goals.
The Compensation Committee determined thatour named executive officer for fiscal 2015,2020 are shown in the contribution to the amount of the executive bonus payout based on the achievement of separate components of the company's financial performance goals would be weighted 60% on operating income, 20% on revenue, and 20% on gross margin. The maximum payout opportunity would vary by metric such that the maximum opportunity for the achievement of revenue and gross margin measures would be 125% of target, and the maximum for the achievement of the operating income measure would be 250% of target. The formula provided for a maximum potential payout of 200% of an executive's target bonus level and was intended to focus the executive team on the achievement of these three key financial goals, which emphasizes delivering quality earnings.table below:
| | | | | | | | | | | | | | |
| Named Executive Officer | | Role | | Fiscal 2020 Target Bonus
(as a % of Base Salary) |
| Calvin McDonald | | Chief Executive Officer | | 150% |
| Meghan Frank | | Chief Financial Officer | | 75% |
| Celeste Burgoyne | | President, Americas and Global Guest Innovation | | 90% |
| Michelle Sun Choe | | Chief Product Officer | | 90% |
| Nicole (Nikki) Neuburger | | Chief Brand Officer | | 75% |
| Patrick J. Guido | | Former Chief Financial Officer | | 75% |
Payout
Following the completion of theeach fiscal year, the Compensation Committeepeople, culture and compensation committee reviews our performance relative to the achievement of ourthe company's performance goals established at the beginning of the preceding fiscal year, and each executive's individual performance and contribution to achieving those goals, in order to determine the amount of bonus if any, payable to our executive officers. In making itsthis determination, the Compensation Committeecommittee may make adjustments that will be applied in calculating whether the financial performance goals have been met to the company and individual performance results to take into account anyfactor out extraordinary, unusual, or nonrecurring items occurring afternon-recurring items. The people, culture and compensation committee may use discretion in determining the establishmentamount of the performance goal. The Compensation Committee may reduce but not increase the amount earned bybonus payable to an executive officer according to the plan.officer. Generally, executive officers must remain employed by us on the bonus payment date to be eligible for payment, unless the employment termination is a result of death or disability.
In March 2016,
Fiscal 2020
For fiscal 2020, as in previous years, the Compensation Committeepeople, culture and compensation committee determined that the minimum level of annual cash bonus awards would be based entirely on operating income and net revenue. Due to the impact of $343,400,000 neededthe COVID-19 pandemic on our business operations, we updated our bonus structure to fundbe based on financial performance measures for the executive bonuses had been achieved. The Compensation Committee also reviewed actual performance against the company's financial goals set at the startsecond half of the year only. Additionally, our payout range was modified to be between 0% of the target bonus for performance below threshold, to 100% of the target bonus for achieving or exceeding the maximum performance level. This was a change from our typical 200% maximum. We chose to do this to help fund our global pay protection program, which provided pay and determined that no adjustmentsjob protection to our global employee population while our stores were deemed necessarytemporarily closed due to the results for annual incentive purposes.pandemic, as well as other initiatives focused on our collective, including our We Stand Together Fund and Ambassador Relief Fund.
As outlined below, the Compensation Committee thenThe people, culture and compensation committee determined that the company's financial performancefiscal 2020 financial goals, based on the second half of the year, had been achievedexceeded so that on a weighted basis the bonus payout was calculated as 69.6%100% of target as outlined in the table below.
|
| | | | | | |
| | | Company Results (100% of total bonus) |
| | | Operating Income (60% Weight; 250% Maximum Payout) | | Revenue (20% Weight; 125% Maximum Payout) | | Gross Margin (20% Weight; 125% Maximum Payout) |
| Threshold | | $343,400,000 | | $1,880,800,000 | | 48.5% |
| Target | | $386,700,000 | | $2,043,800,000 | | 49.7% |
| Maximum | | $456,400,000 | | $2,089,800,000 | | 50.0% |
| Actual 2015 Result | | $369,076,000 | | $2,060,523,000 | | 48.4% |
| Executive Bonus Result | | 79.6% | | 109.1% | | —% |
bonus level. The actual bonuses paid to the namesnamed executive officers for fiscal 20152020 performance represented 69.6%100% of their target award opportunitiesbonus levels, and are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. Named executive officers who joinedsummary compensation table.
1 Payout maximum for fiscal 2020 is 100%. Bonuses are based on annual salaries without taking into account the company during fiscal 2015 received a prorated portion of their bonus opportunity based upon the portion of the fiscal year they were employed, as per our standard policy and practice.3-month salary reduction.Equity-Based CompensationLong-Term Incentive Awards
Equity awards are an important component of our executive compensation program and weprogram. We believe providing a significant portion of our executive officers' total compensation opportunity in equity-based compensation helps drive the achievement of our long-term performance goals and alignaligns the incentives of our executives with the interests of our stockholders. Additionally, we believe equity-basedshareholders. Equity-based awards enable us to attract, motivate, retain and adequatelycompetitively compensate executive talent.
Stock options, PSUs, and RSUs were granted to certain executives and employees (other than the named executive officers) throughout fiscal 2020. Information on long-term awards to the named executive officers can be found in the "2020 Grants of Plan-Based Awards" table.
The Compensation Committeepeople, culture and compensation committee evaluates our equity-based compensation programs annually and considers the following:
•alignment to company goals;
•the impact our program design has on the performance and retention of our executives and employees;
•alignment to the interest of our shareholders;
•market trends in long-term incentive grants;
•the accounting treatment of such awards;
•simplicity of compensation; and
•comparison to our peer group.
The people, culture and compensation committee determines the size, terms, and conditions of performance-based restricted stock unitequity awards stock option grants, and restricted stock unit awards to our executive officers in accordance with the terms of the applicableour current equity incentive plan. The Compensation Committeecommittee determined that the 2015annual fiscal 2020 target equity mix for our named executive officers would consist of 50% performance-based restricted stock units, 30%the following:
Each executive officer (with the exception of the chief executive officer) is provided with annual awards of PSUs, stock options, and 20% restricted stock units. The equity mix is designed to emphasize our pay for performance philosophy and the achievement of long-term financial growth objectives.
Generally, each executive officer is provided with an annual performance-based restricted stock unit award, a stock option grant, and a restricted stock unit awardRSUs based on his or hertheir position with us and his or her relevant prior performance. The Compensation Committeecommittee establishes a targetthe annual equity award value for each executive officer (other than the chief executive officer) based upon the recommendations of the chief executive officer, individual performance, the annual review of his or hertheir compensation relative to the peer group companies, with a secondary checkcomparison against compensation survey data and an assessment of company-wide equity usage.
The Chief Executive Officer provides a recommendation to the Compensation Committee for the equitychief executive officer receives an annual award grant values for the other executive officersof PSUs and stock options based upon similar assessment, and recommendation of the review of each officer's performance.committee.
Performance-Based Restricted Stock Unit Awards.
PSU Awards
•Each performance-based restricted stock unitPSU award represents a right to receive one share of our common stock on a specified settlement date, if the performance-based restricted stock unit vestsgenerally three years from date of grant.
•Vesting will occur as a result of our attainment of acertain performance goalgoals during the performance period, as well asand continued employment.
•Each performance-based restricted stock unitPSU award specifies the threshold, target and maximum number of performance-based restricted stock units that will vest at certain performance levels.
•The range of performance-based restricted stock unitsPSUs that can be earned under the 2015fiscal 2020 awards rangesrange from 0% of target for performance below threshold to 200% of target for performance at or above maximum.
Stock Options
•Stock option awards generally have seven-year terms and vest in four equal installments beginning on the first anniversary of the date of grant to encourage retention and to compensate our executive officers for their contributions over the long-term.
•Stock options only have value to the executive officers to the extent that, on the date they are exercised, the company's share price is higher than the exercise price. We grant stock options with an exercise price equal to the closing price of our common stock as reported on Nasdaq on the date of grant.
RSU Awards
•Each RSU represents a right to receive one share of our common stock on a specified settlement date, if the time vesting requirement has been met.
•RSUs generally vest in three equal annual installments beginning on the first anniversary of the date of grant to encourage executive retention while maintaining direct shareholder alignment.
Settlement of 2018 PSU Awards (2018-2020 Performance Cycle)
The performance period and vesting period for our performance-based restricted stock unitPSU awards consistsgenerally consist of three fiscal years. For example, performance-based restricted stock units granted in fiscal 2015 will vest on the third anniversary of the grant date in early fiscal 2018, depending on the company's achievement of the performance goals established by the Compensation Committee for the fiscal 2015 through fiscal 2017 performance period.
During the first quarter of the fiscal year, the Compensation CommitteeThe people, culture and compensation committee establishes the minimum, target and maximum performance and payout levels during the first quarter of the performance period. Three year operating income compound annual growth rate, or CAGR, was selected as the performance metric for the performance-based restricted stock unit2018 PSU awards.
Generally, at the end of each performance period, the people, culture and compensation committee reviews the results of the company's performance relative to the performance goals and determines the payout of the awards. For the performance-based restricted stock units granted2018 through 2020 performance period, the CAGR is based on the operating income for fiscal 2017 of $503.2M, with a threshold CAGR of 5%, target CAGR of 10%, and maximum CAGR of 15%. Our annual operating income for fiscal 2020 was $819,986,000, meaning a 17.7% CAGR, and resulting in each of fiscal 2013 and 2014 the performance measure used to determinea payout of 200% of the awards is three-year cumulative operating income. Fortarget PSUs award granted, as shown in the performance-based restricted stock unitschart below. No adjustments relating to COVID-19 were made.
The PSUs granted in fiscal 2015,2019 and fiscal 2020 also use an operating income CAGR over a three-year performance period.
The people, culture and compensation committee has the performance measuresdiscretion to make adjustments that will be usedapplied in calculating whether the performance goals have been met to determine payout of the awards are three-year cumulative operating income and three-year cumulative net revenue. For purposes of the awards, performance measures may be adjusted by the Compensation Committee as it deems appropriate to excludefactor out the effect (whether positive or negative) of any change in accounting standards or any extraordinary, unusual, or nonrecurring item occurring after the grant of an award. Each such adjustment, if any, shall be made solely for theThe purpose of providingthis kind of adjustment would be to provide a consistent basis from period to period for the calculation of performance measures in order to prevent the dilution or enlargement of the participant's rights with respect to an award. The Compensation Committee believes the performance-based restricted stock unitpeople, culture and compensation committee seeks to establish PSU goals that have been established require a significant level of growth in order to receive target or any,(or any) payout and that they align the executives' interests with both the achievement of the company'sour long-term strategic plan and the performance of the company's stock price.
At the end of the performance period, the Compensation Committee reviews the results of the company's performance relative to the goals and determines the payout of the awards. For the performance-based restricted stock units awards granted in 2013 that covered the fiscal 2013 through 2015 performance period, our cumulative operating income resulted in a payout of 0% of the target performance-based restricted stock unit awards granted as outlined below. |
| | | | | | |
2013 Award (2013-2015 Performance Cycle) 3-Year Cumulative Operating Income Goals | | Actual 2013-2015 Cumulative Operating Income Performance |
| Threshold | | Target | | Maximum | |
| $1,505,494,000 | | $1,771,169,000 | | $2,036,845,000 | | $1,136,467,000 |
Stock Options. Stock option grants generally have seven-year terms and vest in four equal installments beginning on the first anniversary of the date of grant to encourage executive retention and to compensate our executive officers for their contribution over the long-term. Stock options only have value to the executive officers to the extent that, on the date they are exercised, the company's
share price is higher than the exercise price. The stock options are granted with an exercise price equal to the closing priceinterests of our common stock as reported on the Nasdaq on the date of grant.shareholders.
Restricted Stock Unit Awards. Each restricted stock unit represents a right to receive one share of our common stock on a specified settlement date, if the time vesting requirement has been met. Restricted stock unit awards generally vest in three equal installments beginning on the first anniversary of the date of grant to encourage executive retention while maintaining direct shareholder alignment and to compensate our executive officers for their contribution over the long-term.
Other Features of the Executive Compensation Program
Stock Ownership Guidelines
We believe our executive officers should have a meaningful ownership stake in lululemon to underscore the alignment of executive officer and stockholdershareholder interests and to encourage a long-term perspective. Accordingly, our NominatingThe corporate responsibility, sustainability and Governance Committeegovernance committee adopted formal stock ownership guidelines for our executive officers as follows:
|
| | | | | | | |
| Position | | Minimum Ownership Guidelines
(Dollar Value of Shares) |
| Chief Executive Officer | | 5 x5x Base Salary |
| Other Section 16 executive officers reporting to the Chief Executive Officer | | 3 x3x Base Salary |
Our executive officers are required to retain 75% of the net shares of Common Stock acquiredour common stock they acquire upon the vesting or exercise of any newequity incentive equity awards granted in fiscal 2016 onward, after deducting the number of shares of Common Stockour common stock that would be needed to pay applicable taxes and/orand exercise price, until they meet the applicable stock ownership guideline is met.guideline. The people, culture and compensation committee annually reviews the status of compliance with the stock ownership guidelines.
Clawback Policy.
In September 2015, the Compensation Committee approved a revised Table of ContentsClawback Policy
The people, culture and compensation committee has adopted an incentive compensation recoupment policy, which applies to all incentive-based compensation paid or awarded to an executive officer on or after the date the policy was adopted.September 2015. Under the policy, in the eventif we determine that we must prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the U.S. federal securities laws, we will seek to recover, at the discretion of the Compensation Committeepeople, culture and compensation committee after it has reviewed the facts and circumstances that led to the requirement for the restatement and the costs and benefits of seeking recovery, the amount of erroneously awarded incentive-based compensation received by an executive officer during the three-year period immediately preceding the date on which we are required to prepare the restatement.
Other Benefits
Other Benefits.Based on our pay-for-performance philosophy, our executive compensation program includes limited perquisites and other benefits as outlined below: benefits. As a Canadian based company which frequently hires executives from the United States, we provide limited tax and relocation assistance we believe enables us to remain competitive from a global talent perspective.
|
| | | | | | | | | | | | | |
| Benefits | | Employee Eligibility | | Executive Officer Eligibility |
| Medical/Dental/Vision Plans | | ü | | ü |
| Life and Disability Insurance | | ü | | ü |
| Change in Control and Severance Plan | | ü |
Employee Stock Purchase Plan | | Not offered |
Deferred Compensation Plan | | Not offered |
Supplemental Executive Retirement Plan | | Not offered |
Employee Stock Ownership Plan | | Not offered |
Defined Benefit Pension Plan | | Not offeredü |
| 401(k) Plan (or other defined contribution group savings program) | | ü | | ü |
| Employee Stock Purchase Plan | | ü | | Not offered |
|
| | | | | | | | | | | | | |
| Perquisites | | Employee Eligibility | | Executive Officer Eligibility |
| Employee Discount | | ü | | ü |
Tax PreparationSupport | | ü | | ü |
Relocation Assistance (temporary(i.e., temporary housing, moving expenses, tax equalization)expenses) | | ü | | ü |
| Supplemental Life Insurance | | ü | | ü |
| Parental Leave Policy | | ü | | ü |
| Fitness Benefit | | ü | | ü |
Executive Medical | | Not offered |
Financial Counseling | | Not offered |
Automobile | | Not offered |
Personal Use of Company Aircraft | | Not offered |
Security Services | | Not offered |
The cost of providing these benefits and perquisites to the named executive officers is included in the amounts shown in the "All Other Compensation" column of the Summary Compensation Tablesummary compensation table and detailed in the footnotes to suchthe table. We believe the executive benefits we provide are reasonable and generally consistent with benefits offered by companies with which we compete for executive talent,in our industry and therefore offeringpeer group. Offering these benefits serves the objective of attracting and retaining top executive talent.
Specifically, under certain circumstances, we provide relocation benefits to executive officers who relocate for work on our behalf. We believe this helps us recruit talented and experienced executives. Mr. Potdevin, Mr. Haselden, Mr. Stump, Mr. Almeida, Mr. Holman, and Ms. Poseley relocated to Canada from the United States to work for us. These executive officers each received tax preparation assistance, reimbursement of moving expenses, and reimbursement of temporary housing expenses. Mr. Potdevin also received a tax equalization payment equal to the difference between his total tax paid or payable for 2014 and the tax that would have been paid or payable if he had been employed exclusively in the U.S. in 2014. He will receive a similar equalization payment equal to 70% of the difference for 2015.
Employment Agreements and Severance Arrangements
We have entered into employment agreements with our named executive officers thatwhich allow us to terminate their employment with us at any time, with or without cause. These agreements provide them with severance benefits under certain severance rights.circumstances, including if we terminate their employment without cause. These agreements were made in order to attract and retain the services of these particular executives. The agreements were the result of negotiations between the parties, which we believe resulted in employment and severance terms and conditions that are commercially competitive and typical of the terms and conditions afforded to similarly situated executives in other companies of similar size and stage of business life cycle operating in the retail apparel industry.
In each case, any severance payments are contingent on the occurrence of certain termination (or constructive termination) events and are subject to the executive's compliance with the surviving terms of the employment agreement and theother terms, ofwhich may include a non-compete, non-solicitation and non-disparagement agreement, as well as the executive's release of any employment-related claims he or shethe executive may have against us. These severance arrangements are intended to provide the executiveseach executive with a sense of security in making the commitment to dedicate his or herthe executive's professional career to our success. These severance rights do not differ based on whether or not we experience a change in control. The specific terms of these arrangements with respect to our named executive officers are discussed in detail under the heading "Agreements with Named Executive Officers".
Risk Considerations in Determining Compensation
The Compensation Committeepeople, culture and compensation committee annually reviews the various design elements of our compensation program to determine whether any of its aspectsit believes our compensation policies and practices encourage excessive or inappropriate risk-taking.risk-taking by our executive officers. Following the risk evaluation in March 2021, the Compensation Committeecommittee concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company.lululemon.
Tax Considerations in Determining Compensation
We consider the tax treatment of various forms of compensation and the potential for excise taxes to be imposed on our executive officers which might have the effect of hindering the purpose of their compensation. While we do not design our compensation programs solely for tax purposes,purposes, we do design our plans to be tax efficient for the company where possible and where the design does not add a layer ofunnecessary complexity to the plans or their administration. This requires us to consider several provisions of the Internal Revenue Code. While we endeavor to use tax-efficient compensation structures when feasible, the Compensation Committeecompensation committee has the discretion to deliver non-deductible forms of compensation.
Compensation Changes for Fiscal 20162021
Following its annual reviewFiscal 2020 was an unprecedented year as we navigated the impact of the targetCOVID-19 pandemic. The people, culture and compensation levelscommittee approved making no increases to named executive officer compensation in fiscal 2020. Additionally, each of our named executive officers, along with the rest of the executive officers andsenior leadership team, reduced their base salaries by 20% for three months to help establish the Chief Executive Officer's assessment of each officer's performanceWe Stand Together hardship fund to support employees affected by the COVID-19 crisis.
For fiscal 2021, after taking into account company and individual contributions,performance, as well as market data and historical pay increases, the Compensation Committeepeople, culture and compensation committee approved increases to the base salaries, target bonuses, and annual equity grants of Mr. Haselden, Mr. Stump, Mr. Almeida,some of our named executive officers. Consistent with our compensation philosophy, the adjustments are predominantly focused on long-term incentives to reinforce our pay-for-performance philosophy and Mr. Holman. Following its annual review of the target compensation of the Chief Executive Officer and an assessment of his performance, the Compensation Committee approved an increase in Mr. Potdevin's base salary designed to align his compensation closer to the median of the company's peer group and to recognize his significant contributions and leadership.with shareholder interests. The table below sets forth the base salaryshows these components of pay set by the Compensation Committeecompensation committee for fiscal 2016 and fiscal 20152021:
| | | | | | | | | | | | | | |
| Name | Title | Fiscal 2021 Base Salary
($) | Fiscal 2021 Target Annual Bonus
(%) | Fiscal 2021 Annual Equity
($) |
| Calvin McDonald | Chief Executive Officer | $1,250,000 | 160% | $8,000,000 |
| Meghan Frank | Chief Financial Officer | $550,000 | 75% | $1,000,000 |
| Celeste Burgoyne | President, Americas and Global Guest Innovation | $700,000 | 90% | $2,500,000 |
| Michelle Choe | Chief Product Officer | $700,000 | 90% | $2,500,000 |
| Nicole Neuburger | Chief Brand Officer | $600,000 | 75% | $1,000,000 |
Compensation Program Design for each of our current executive officers:Fiscal 2021
|
| | | | |
Name | | Fiscal 2016 Base Salary | | Fiscal 2015 Base Salary |
Laurent Potdevin | | USD$1,025,000 | | USD$1,000,000 |
Stuart Haselden | | USD$645,000 | | USD$575,000 |
Scott Stump | | USD$570,000 | | USD$550,000 |
Miguel Almeida | | USD$570,000 | | USD$550,000 |
Lee Holman(1)
| | USD$550,000 | | USD$500,000 |
_________
| |
(1)
| Mr. Holman's base salary for fiscal 2015 represents his base salary as of October 26, 2015, the effective date of him beginning service in the role of Executive Vice President, Creative Director. |
During fiscal 2015,2020, the Compensation Committee,people, culture and compensation committee, with the assistance of management and its independent advisor,compensation consultant, reviewed our incentive compensation programs to evaluate whetherensure they were appropriately aligned with our strategic direction. As a result of that review, the Compensation Committeegoals and growth plans. The committee determined that for fiscal 2016 the2021, our performance-based cash awards for executive officers would revert back to their fiscal 2019 payout structure (ranging from 0-200% of target). They will continue to be based entirely on our achievement of financial performance goals, and weighted 60%50% on operating income 20%and 50% on revenue, and 20% on gross margin. For fiscal 2016, the overall weighted average maximum bonus opportunity will remain at 200% of target, but the maximum payout opportunity for the achievement of revenue and gross margin measures will shiftnet revenue. The committee continues to 150% of target (up from 125% in fiscal 2015), and the maximum for operating income measure will shift to 233% of target (down from 250% in fiscal 2015). The Compensation Committee believesbelieve this formula will continue to focusstructure focuses the executive team on our critical financial goals. For fiscal 2022, we are considering the achievementaddition of these three key financial goals, with an emphasis on delivering quality earnings.environmental, social, governance, or ESG, component to our bonus plan given the importance of this to lululemon.
In addition, the Compensation Committeecommittee determined that vesting of performance-based restricted stock units willthe fiscal 2021 equity mix for the chief executive officer would continue to be based on both earnings and revenue and weighted 70% on operating income and 30% on revenue. Starting with awards made in fiscal 2016, the calculation of the number of shares of common stock that would be payable on the settlement date has been modified such that one third of the total number of shares that would be payable is to be based on the achievement of performance measures in each of the three separate fiscal years included in the performance period. The targets for all three fiscal years of the performance period are determined at the time of grant. The vesting of performance-based restricted stock units continues to be at the end of three years.
Beginning in fiscal 2016, the Chief Executive Officer's equity-based compensation will consist of 50% PSUs and 50% stock options. For other executive officers, the equity mix would continue to consist of 50% PSUs, 30% stock options, and 50% performance-based restricted stock units, and will not include restricted stock units like the other executive officers.
The Compensation Committee also determined that beginning in fiscal 2016, annual stock option awards would be granted once per year, rather than our historical practice of granting half the annual stock option awards in March and the rest in September.
20% RSUs.
People, Culture and Compensation Committee Report
We, the Compensation CommitteeThe people, culture and compensation committee of the board of directors of lululemon athletica inc., have has reviewed and discussed the Compensation Discussioncompensation discussion and Analysisanalysis contained in this proxy statement with management. Based on this review and discussion, we havethe people, culture and compensation committee recommended to the board of directors that the Compensation Discussioncompensation discussion and Analysisanalysis be included in this proxy statement and in lululemon's Annual Report on Form 10-K for the fiscal year ended January 31, 2016.statement.
| | | | | |
| PEOPLE, CULTURE AND COMPENSATION COMMITTEE |
| |
| COMPENSATION COMMITTEEEmily White (chair) |
| Martha Morfitt |
| Michael Casey (Chairperson) |
| Steven J. Collins |
| Martha A.M. Morfitt |
| Rhoda M. Pitcher |
| Emily WhiteKathryn Henry |
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table sets forth summaryshows information concerningdetailing the compensation of each person who served as our principal executive officer or our principal financial officer during fiscal 2020 and our three other most highly compensated executive officers during fiscal 2015, and one former executive officer who would have been included among our three other most highly compensated executive officers had she continued to serve as an executive officer through January 31, 2016. We2020. Collectively, we refer to these persons as our "named executive officers."
The dollar amounts shown are in U.S. dollars. The amounts originally in Canadian dollars were converted to U.S. dollars for this table using the average of the average exchange rates for each fiscal month during the applicable fiscal year. Applying this formula to fiscal 2015, 2014,2020, fiscal 2019 and 2013,fiscal 2018, CDN$1.00 was equal to USD$0.773,0.748, USD$0.898,0.755 and USD$0.963,0.769 respectively.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | | Fiscal Year | | Salary
($)(1) | | Bonus
($) | | Stock Awards
($)(2) | | Option Awards
($)(3) | | Non-Equity Incentive Plan Compensation
($)(4) | | All Other Compensation
($)(5) | | Total
($) |
Laurent Potdevin,
Chief Executive Officer(6) | | 2015 | | 986,540 |
| | — |
| | 2,099,973 |
| | 900,127 |
| | 1,029,948 |
| | 207,714 |
| | 5,224,302 |
|
| | | 2014 | | 846,869 |
| | — |
| | 1,619,982 |
| | 1,081,097 |
| | 520,808 |
| | 38,019 |
| | 4,106,775 |
|
| | | 2013 | | 17,308 |
| | 1,850,000 |
| | 2,000,041 |
| | — |
| | — |
| | — |
| | 3,867,349 |
|
Stuart Haselden,
Chief Financial Officer and Executive Vice President, Operations(7) | | 2015 | | 571,581 |
| | 500,000 |
| | 1,045,981 |
| | 734,103 |
| | 299,295 |
| | 99,476 |
| | 3,250,436 |
|
| | | 2014 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | | 2013 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Scott Stump,
Executive Vice President,
Community and Brand(8) |
| 2015 |
| 533,195 |
| | — |
| | 545,998 |
| | 234,028 |
| | 279,217 |
| | — |
| | 1,592,438 |
|
| |
| 2014 |
| 68,856 |
| | 372,000 |
| | 477,989 |
| | 52,048 |
| | — |
| | — |
| | 970,893 |
|
| | | 2013 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Miguel Almeida,
Executive Vice President,
Digital(9) |
| 2015 |
| 306,735 |
| | 450,000 |
| | 845,939 |
| | 234,033 |
| | 160,116 |
| | 19,033 |
| | 2,015,856 |
|
| |
| 2014 |
| — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| |
| 2013 |
| — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Lee Holman,
Executive Vice President,
Creative Director (10) | | 2015 | | 443,397 |
| | — |
| | 258,176 |
| | 110,651 |
| | 178,186 |
| | — |
| | 990,410 |
|
| | | 2014 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | | 2013 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Tara Poseley,
Former Chief Product
Officer(11) | | 2015 | | 620,753 |
| | — |
| | 655,237 |
| | 280,859 |
| | 325,032 |
| | 14,187 |
| | 1,896,068 |
|
| | | 2014 | | 521,948 |
| | — |
| | 1,294,801 |
| | 343,555 |
| | 153,170 |
| | 89,124 |
| | 2,402,598 |
|
| | | 2013 | | 126,923 |
| | 300,000 |
| | 483,877 |
| | 501,025 |
| | — |
| | — |
| | 1,411,825 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | | Fiscal Year | | Salary
($)(1) | | Bonus
($) | | Stock Awards
($)(2) | | Option Awards
($)(3) | | Non-Equity Incentive Plan Compensation
($)(4) | | All Other Compensation ($)(5) | | Total
($) |
Calvin McDonald,
Chief Executive Officer(6) | | 2020 | | 1,182,692 | | | — | | | 2,999,912 | | | 3,000,024 | | | 1,875,000 | | | 1,532,478 | | | 10,590,106 | |
| | 2019 | | 1,250,000 | | | — | | | 2,999,971 | | | 2,995,896 | | | 3,750,000 | | | 294,077 | | | 11,289,944 | |
| | 2018 | | 576,923 | | | 600,000 | | | 10,999,885 | | | 3,003,247 | | | 1,698,113 | | | 152,090 | | | 17,030,258 | |
Meghan Frank, Chief Financial Officer(7) | | 2020 | | 469,231 | | | — | | | 693,002 | | | 136,415 | | | 351,923 | | | 10,721 | | | 1,661,292 | |
Celeste Burgoyne, President, Americas and Global Guest Innovation | | 2020 | | 638,654 | | | — | | | 1,050,139 | | | 450,024 | | | 607,500 | | | — | | | 2,746,317 | |
| | 2019 | | 666,538 | | | — | | | 1,050,141 | | | 1,448,023 | | | 1,199,769 | | | — | | | 4,364,471 | |
| | 2018 | | 625,165 | | | 254,827 | | | 1,059,934 | | | 240,267 | | | 920,054 | | | — | | | 3,100,247 | |
Michelle Choe, Chief Product Officer | | 2020 | | 638,654 | | | — | | | 1,050,139 | | | 450,024 | | | 607,500 | | | 166,936 | | | 2,913,253 | |
| | 2019 | | 666,538 | | | — | | | 1,050,141 | | | 1,448,023 | | | 1,199,769 | | | 49,874 | | | 4,414,345 | |
| | 2018 | | 615,604 | | | 250,000 | | | 989,839 | | | 210,229 | | | 905,984 | | | 1,695 | | | 2,973,351 | |
Nicole Neuburger, Chief Brand Officer(8) | | 2020 | | 544,038 | | | 333,333 | | | 350,109 | | | 150,027 | | | 431,250 | | | 54,770 | | | 1,863,527 | |
Patrick J. Guido, Former Chief Financial Officer(9) | | 2020 | | 129,341 | | | — | | | 524,975 | | | 224,983 | | | — | | | 26,049 | | | 905,348 | |
| | 2019 | | 532,692 | | | — | | | 712,380 | | | 786,438 | | | 799,038 | | | 19,553 | | | 2,850,101 | |
| | 2018 | | 400,000 | | | 296,743 | | | 369,093 | | | 115,514 | | | 588,679 | | | 116,621 | | | 1,886,650 | |
_________
| |
(1)
| The dollar amounts shown are in U.S. dollars. The named executive officers were paid in Canadian dollars until March 22, 2015, after which time they were paid in U.S. dollars. |
| |
(2)
| This column reflects the grant date fair value of performance-based restricted stock units, restricted stock units, and restricted shares granted. See the "Grants of Plan-Based Awards Table" for information on performance-based restricted stock units and restricted stock units granted to our named executive officers in fiscal 2015.(1)Fiscal 2020 and 2019 were both 52 week years, while fiscal 2018 was a 53 week year. The named executive officers salaries' were reduced by 20% for three months during fiscal 2020. (2)This column reflects the grant date fair value of PSUs and RSUs granted. See the "Grants of Plan-Based Awards Table" for information on PSUs and RSUs granted to our named executive officers in fiscal 2020. These amounts reflect the grant date fair value of the awards at target, and do not correspond to the actual value that will be realized by the executive officer. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2016 for a discussion of all assumptions made by us in determining the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718 values of our equity awards. |
| |
(3)
| This column reflects the grant date fair value of stock options granted. See the "Grants of Plan-Based Awards Table" for information on stock options granted to our named executive officers in fiscal 2015. These amounts reflect the grant date fair value of the awards, and do not correspond to the actual value that will be realized by the executive officer. See the notes to |
our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 20162021 for a discussion of all assumptions made by us in determining the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718 values of our equity awards.
(3)This column reflects the grant date fair value of stock options granted. See the "Grants of Plan-Based Awards Table" for information on stock options granted to our named executive officers in fiscal 2020. These amounts reflect the grant date fair value of the awards, and do not correspond to the actual value that will be realized by the executive officer. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 for a discussion of all assumptions made by us in determining the FASB ASC Topic 718 values of our equity awards.
| |
(4)(4)Non-equity incentive plan compensation includes the annual performance-based cash awards paid in accordance with our 2014 equity incentive plan and are reported for the fiscal year in which the relevant performance measures are satisfied rather than when awarded or paid. | Non-Equity Incentive Plan Compensation includes the annual cash incentive paid in early fiscal 2016 under the executive bonus plan for fiscal 2015. |
| |
(5)
| For fiscal 2015, all other compensation consists of (a) residency and moving related expenses and personal tax preparation fees paid on behalf of Mr. Potdevin, Ms. Haselden, Mr. Almeida, and Ms. Poseley, of $90,563, $99,476, $19,033, and $14,187 respectively, and (b) a gross-up for tax equalization purposes paid to Mr. Potdevin of $117,151. The aggregate of all perquisites and other personal benefits for each of the other respective named executive officers was less than $10,000. For fiscal 2014, all other compensation consists of (a) residency and moving related expenses and personal tax preparation fees paid on behalf of Mr. Potdevin and Ms. Poseley of $35,264 and $81,297, respectively, and (b) a gross-up for tax purposes paid to Mr. Potdevin and Ms. Poseley of $2,755 and $7,827, respectively. For 2013, the aggregate of all perquisites and other personal benefits for each respective named executive officer was less than $10,000. |
| |
(6)
| Mr. Potdevin commenced employment as our Chief Executive Officers in January 2014 and received a signing bonus of $200,000 and a retention bonus of $1,650,000 in fiscal 2013. |
| |
(7)
| Mr. Haselden commenced employment as our Chief Financial Officer in February 2015 and received a retention bonus of $500,000 in fiscal 2015. He received a stock option grant with a grant date fair value of $500,075 in fiscal 2015 in connection with the expansion of his role as a result of organizational changes to include certain operational aspects. |
| |
(8)
| Mr. Stump commenced employment as our Executive Vice President, Community and Brand in November 2014 and received a retention bonus of $372,000 in fiscal 2014. |
| |
(9)
| Mr. Almeida commenced employment as our Executive Vice President, Digital in July 2015 and received a retention bonus of $450,000 in fiscal 2015. Mr. Almeida will reimburse us for the retention bonus in the event he voluntarily resigns his position as Executive Vice President, Digital or is terminated with cause within 12 months from his start date. |
| |
(10)
| Mr. Holman previously worked for lululemon in a non-executive capacity until October 2015, when he began serving as our Executive Vice President, Creative Director. The amounts reported as compensation earned by Mr. Holman during fiscal 2015 include the amounts earned by him in his previous capacity. |
| |
(11)
| Ms. Poseley commenced employment as our Chief Product Officer in November 2013 and received a retention bonus of $300,000 in fiscal 2013. Ms. Poseley's employment was terminated in October 2015. She provided transition consulting services through the end of March 2016. |
(5)The following table provides additional information of all other compensation:
2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fiscal Year | | Relocation Costs and Personal Tax Preparation Fees
($) | | Tax Equalization Payments, Including Gross-Ups
($) | | Company Match of 401(k) / RRSP
($) | | Other | | Total All Other Compensation
($) |
| Calvin McDonald | | 2020 | | 1,300,289 | | | 225,581 | | | 6,608 | | | — | | | 1,532,478 | |
| | 2019 | | 269,817 | | | 18,745 | | | 5,515 | | | — | | | 294,077 | |
| | 2018 | | 75,240 | | | 71,081 | | | 5,769 | | | — | | | 152,090 | |
| Meghan Frank | | 2020 | | — | | | — | | | 10,721 | | | — | | | 10,721 | |
| Celeste Burgoyne | | 2020(A) | | — | | | — | | | — | | | — | | | — | |
| | 2019(A) | | — | | | — | | | — | | | — | | | — | |
| | 2018(A) | | — | | | — | | | — | | | — | | | — | |
| Michelle Choe | | 2020 | | 6,022 | | | 159,414 | | | — | | | 1,500 | | | 166,936 | |
| | 2019 | | 2,499 | | | 47,375 | | | — | | | — | | | 49,874 | |
| | 2018(A) | | — | | | 1,695 | | | — | | | — | | | 1,695 | |
| Nicole Neuburger | | 2020 | | 50,145 | | | 4,625 | | | — | | | — | | | 54,770 | |
| Patrick J. Guido | | 2020 | | 3,179 | | | 3,179 | | | — | | | 19,691 | | | 26,049 | |
| | 2019 | | 17,349 | | | 2,205 | | | — | | | — | | | 19,553 | |
| | 2018 | | 116,621 | | | — | | | — | | | — | | | 116,621 | |
(A)The aggregate of all perquisites and other personal benefits was less than $10,000. Ms. Choe received tax gross-ups under $10,000 in fiscal 2018, which have been included in the table above.
(6)Mr. McDonald commenced employment as our chief executive officer in August 2018. We agreed to provide Mr. McDonald home sale assistance and home-loss buyout protection as part of his relocation services. A third party relocation company was engaged to manage the buyout process whereby the relocation company purchased the home from Mr. McDonald at its appraised market value. The relocation company was responsible for carrying and maintaining the home until it was sold and we agreed to pay a fee and reimburse the relocation company for these costs, as well as any deficiency if the home was sold for less than the purchase price. The home was sold in fiscal 2020, and the total costs we paid to the relocation company in fiscal 2020 for the final sale of the home and carrying costs was $1,291,032.
(7)Ms. Frank was appointed as our chief financial officer effective November 23, 2020. In fiscal 2020, Ms. Frank was granted a one-time RSU award with a target value of $200,000, which vests in installments of 0%, 50%, and 50% on the three anniversary dates following the grant date, subject to continued employment. She was also granted a one-time RSU award with a target value of $175,000 which vests in installments of 33%, 33%, and 34% on the three anniversary dates following the grant date, subject to continued employment.
(8)Ms. Neuburger commenced employment as our chief brand officer in January 2020. She was granted a one-time retention award of $500,000, subject to remaining employed with lululemon for a period of 18 months. This award has been included in the table above, prorated for the amount earned in the fiscal year.
(9)Mr. Guido resigned from his position as chief financial officer, effective, May 8, 2020. Under the terms of his employment agreement, he received no severance compensation or equity upon his departure. Mr. Guido forfeited his unvested equity awards when he left the company.
2020 Grants of Plan-Based Awards
The following table sets forthshows each plan-based award made to a named executive officer in fiscal 2015. 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under Equity Incentive Plan Awards | | All Other Stock Awards: Number of Shares of Stock
(#) | | All Other Option Awards: Number of Securities Underlying Options (#)(3) | | Exercise or Base Price of Option Awards
($/Share) | | Grant Date Fair Value of Stock and Option Awards ($)(4) |
| Name | | Type of Award | | Grant Date | | Threshold ($)(1) | | Target ($)(1) | | Maximum ($)(1) | | Threshold (#)(2) | | Target (#)(2) | | Maximum (#)(2) | | | | |
| Calvin McDonald | | Stock Option | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 52,431 | | | 188.84 | | | 3,000,024 | |
| | Performance-Based Restricted Stock Unit | | 03/27/2020 | | — | | | — | | | — | | | 7,943 | | | 15,886 | | | 31,772 | | | — | | | — | | | — | | | 2,999,912 | |
| | Performance-Based Cash Award(5) | | 03/27/2020 | | 468,750 | | | 937,500 | | | 1,875,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Meghan Frank | | Restricted Stock Unit(7) | | 02/13/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 788 | | | | | | | 200,042 | |
| | Stock Option | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,704 | | | 188.84 | | | 97,500 | |
| | Performance-Based Restricted Stock Unit | | 03/27/2020 | | — | | | — | | | — | | | 431 | | | 861 | | | 1,722 | | | — | | | — | | | — | | | 162,591 | |
| | Restricted Stock Unit(6) | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 344 | | | — | | | — | | | 64,961 | |
| | Restricted Stock Unit(8) | | 06/12/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 590 | | | — | | | — | | | 174,852 | |
| | Stock Option(9) | | 12/11/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 373 | | | 188.84 | | | 38,915 | |
| | Performance-Based Restricted Stock Unit(9) | | 12/11/2020 | | — | | | — | | | — | | | 94 | | | 188 | | | 376 | | | — | | | — | | | — | | | 64,732 | |
| | Restricted Stock Unit(6)(9) | | 12/11/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 75 | | | — | | | — | | | 25,824 | |
| | Performance-Based Cash Award(5) | | 03/27/2020 | | 87,981 | | | 175,962 | | | 351,923 | | | — | | | — | | | — | | | | | — | | | — | | | — | |
| Celeste Burgoyne | | Stock Option | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,865 | | | 188.84 | | | 450,024 | |
| | Performance-Based Restricted Stock Unit | | 03/27/2020 | | — | | | — | | | — | | | 1,986 | | | 3,972 | | | 7,944 | | | — | | | — | | | — | | | 750,072 | |
| | Restricted Stock Unit(6) | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 1,589 | | | — | | | — | | | 300,067 | |
| | Performance-Based Cash Award(5) | | 03/27/2020 | | 151,875 | | | 303,750 | | | 607,500 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Michelle Choe | | Stock Option | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,865 | | | 188.84 | | | 450,024 | |
| | Performance-Based Restricted Stock Unit | | 03/27/2020 | | — | | | — | | | — | | | 1,986 | | | 3,972 | | | 7,944 | | | — | | | — | | | — | | | 750,072 | |
| | Restricted Stock Unit(6) | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 1,589 | | | — | | | — | | | 300,067 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | 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 (#) | | All Other Option Awards: Number of Securities Underlying Options
(#)(3) | | Exercise or Base Price of Option Awards ($/Share) | | Grant Date Fair Value of Stock and Option Awards ($)(4) |
| Name | | Type of Award | | Grant Date | | Threshold ($)(1) | | Target
($)(1) | | Maximum
($)(1) | | Threshold
(#)(2) | | Target
(#)(2) | | Maximum
(#)(2) | | | | |
| Laurent Potdevin | | Stock Option | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 20,178 |
| | 64.83 |
| | 450,067 |
|
| | | Stock Option | | 09/14/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 24,319 |
| | 53.79 |
| | 450,060 |
|
| | | Performance-Based Restricted Stock Unit | | 03/30/2015 | | — |
| | — |
| | — |
| | 11,569 |
| | 23,137 |
| | 46,274 |
| | — |
| | — |
| | — |
| | 1,499,972 |
|
| | | Restricted Stock Unit(5) | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 9,255 |
| | — |
| | — |
| | 600,002 |
|
| | | Annual Cash Incentive Plan | | 03/19/2015 | | 739,905 |
| | 1,479,810 |
| | 2,959,620 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Stuart Haselden | | Stock Option | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 5,246 |
| | 64.83 |
| | 117,011 |
|
| | | Stock Option | | 09/14/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,323 |
| | 53.79 |
| | 117,017 |
|
| | | Stock Option (6) | | 10/26/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 30,093 |
| | 48.30 |
| | 500,075 |
|
| | | Performance-Based Restricted Stock Unit | | 03/30/2015 | | — |
| | — |
| | — |
| | 3,008 |
| | 6,016 |
| | 12,032 |
| | — |
| | — |
| | — |
| | 390,017 |
|
| | | Restricted Stock Unit(5,7) | | 02/02/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 7,631 |
| | — |
| | — |
| | 499,983 |
|
| | | Restricted Stock Unit(5) | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,406 |
| | — |
| | — |
| | 155,981 |
|
| | | Annual Cash Incentive Plan | | 03/19/2015 | | 214,343 |
| | 428,686 |
| | 857,372 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Scott Stump | | Stock Option | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 5,246 |
| | 64.83 |
| | 117,011 |
|
| | | Stock Option | | 09/14/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,323 |
| | 53.79 |
| | 117,017 |
|
| | | Performance-Based Restricted Stock Unit | | 03/30/2015 | | — |
| | — |
| | — |
| | 3,008 |
| | 6,016 |
| | 12,032 |
| | — |
| | — |
| | — |
| | 390,017 |
|
| | | Restricted Stock Unit(5) | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,406 |
| | — |
| | — |
| | 155,981 |
|
| | | Annual Cash Incentive Plan | | 03/19/2015 | | 199,948 |
| | 399,896 |
| | 799,793 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Miguel Almeida | | Stock Option | | 09/14/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 12,646 |
| | 53.79 |
| | 234,033 |
|
| | | Performance-Based Restricted Stock Unit | | 09/14/2015 | | — |
| | — |
| | — |
| | 3,625 |
| | 7,250 |
| | 14,500 |
| | — |
| | — |
| | — |
| | 389,978 |
|
| | | Restricted Stock Unit(5,8) | | 07/13/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4,679 |
| | — |
| | — |
| | 299,971 |
|
| | | Restricted Stock Unit(5) | | 09/14/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,900 |
| | — |
| | — |
| | 155,991 |
|
| | | Annual Cash Incentive Plan | | 03/19/2015 | | 115,026 |
| | 230,051 |
| | 460,103 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Lee Holman | | Stock Option | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,186 |
| | 64.83 |
| | 48,758 |
|
| | | Stock Option | | 09/14/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,635 |
| | 53.79 |
| | 48,765 |
|
| | | Stock Option (9) | | 10/26/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 790 |
| | 48.30 |
| | 13,128 |
|
| | | Performance-Based Restricted Stock Unit (11) | | 03/30/2015 | | — |
| | — |
| | — |
| | 1,254 |
| | 2,507 |
| | 5,014 |
| | — |
| | — |
| | — |
| | 162,529 |
|
| | | Performance-Based Restricted Stock Unit (9) | | 10/26/2015 | | — |
| | — |
| | — |
| | 227 |
| | 453 |
| | 906 |
| | — |
| | — |
| | — |
| | 21,880 |
|
| | | | | | | | | 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 (#) | | All Other Option Awards: Number of Securities Underlying Options
(#)(3) | | Exercise or Base Price of Option Awards ($/Share) | | Grant Date Fair Value of Stock and Option Awards ($)(4) | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under Equity Incentive Plan Awards | | All Other Stock Awards: Number of Shares of Stock
(#) | | All Other Option Awards: Number of Securities Underlying Options (#)(3) | | Exercise or Base Price of Option Awards
($/Share) | | Grant Date Fair Value of Stock and Option Awards ($)(4) |
| Name | | Type of Award | | Grant Date | | Threshold ($)(1) | | Target
($)(1) | | Maximum
($)(1) | | Threshold
(#)(2) | | Target
(#)(2) | | Maximum
(#)(2) | | Name | | Type of Award | | Grant Date | | Threshold ($)(1) | | Target ($)(1) | | Maximum ($)(1) | | Threshold (#)(2) | | Target (#)(2) | | Maximum (#)(2) | |
| | | Restricted Stock Unit(5) | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,003 |
| | — |
| | — |
| | 65,024 |
| | | Performance-Based Cash Award(5) | | 03/27/2020 | | 151,875 | | | 303,750 | | | 607,500 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Nicole Neuburger | | Nicole Neuburger | | Stock Option | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,622 | | | 188.84 | | | 150,027 | |
| | | Restricted Stock Unit(5,9) | | 10/26/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 181 |
| | — |
| | — |
| | 8,742 |
| | | Performance-Based Restricted Stock Unit | | 03/27/2020 | | — | | | — | | | — | | | 662 | | | 1,324 | | | 2,648 | | | — | | | — | | | — | | | 250,024 | |
| | | Annual Cash Incentive Plan | | 03/19/2015 | | 127,674 |
| | 255,348 |
| | 510,697 |
| | — |
| | — |
| | — |
| | | | — |
| | — |
| | | | | Restricted Stock Unit(6) | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 530 | | | — | | | — | | | 100,085 | |
| Tara Poseley | | Stock Option | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,296 |
| | 64.83 |
| | 140,431 |
| |
| | | | Performance-Based Cash Award(5) | | 03/27/2020 | | 107,813 | | | 215,625 | | | 431,250 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Patrick Guido(10) | | Patrick Guido(10) | | Stock Option | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,932 | | | 188.84 | | | 224,983 | |
| | | Stock Option | | 09/14/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 7,588 |
| | 53.79 |
| | 140,427 |
| | | Performance-Based Restricted Stock Unit | | 03/27/2020 | | — | | | — | | | — | | | 993 | | | 1,986 | | | 3,972 | | | — | | | — | | | — | | | 375,036 | |
| | | Performance-Based Restricted Stock Unit | | 03/30/2015 | | — |
| | — |
| | — |
| | 3,610 |
| | 7,219 |
| | 14,438 |
| | — |
| | — |
| | — |
| | 468,008 |
| | | Restricted Stock Unit(6) | | 03/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 794 | | | — | | | — | | | 149,939 | |
| | | Restricted Stock Unit(5) | | 03/30/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,888 |
| | — |
| | — |
| | 187,229 |
| | | Performance-Based Cash Award(5) | | 03/27/2020 | | 100,313 | | | 200,625 | | | 401,250 | | | — | | | — | | | — | | | — | | | — | | | |
| | | Annual Cash Incentive Plan | | 03/19/2015 | | 232,782 |
| | 465,564 |
| | 931,129 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| |
__________
| |
(1)(1)Payout maximum for fiscal 2020 is 100% of target. Annual bonuses are based on annual salaries without taking into account the 3 month salary reduction. (2)The PSUs vest based on achievement of performance goals over a three-year performance period. (3)The stock options vest in 25% installments on the four anniversary dates following the grant date. (4)This column reflects the grant date fair value in U.S. dollars of the award granted at target in accordance with FASB ASC Topic 718. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 for a discussion of all assumptions made by us in determining the FASB ASC Topic 718 values of our equity awards. (5)Each of the performance-based cash awards shown in the table was granted under our current 2014 equity incentive plan, which provides flexibility to grant cash incentive awards, as well as equity awards. The material terms of the 2020 performance-based cash awards are described under "Executive Compensation - Compensation Discussion and Analysis" in the section entitled "Annual Cash Incentives." (6)The RSUs vest in installments of 33%, 33% and 34% on the three anniversary dates following the grant date, subject to continued employment. (7)Ms. Frank was granted a one-time RSU with a target value of $200,000. The RSUs will vest in installments of 0%, 50% and 50% on the three anniversary dates following the grant date, subject to continued employment. (8)Ms. Frank was granted a one-time RSU with a target value of $175,000. The RSUs will vest in installments of 33%, 33% and 34% on the three anniversary dates following the grant date, subject to continued employment. (9)Ms. Frank commenced her position as chief financial officer in November 2021, and received additional equity grants for her promotion. (10)Mr. Guido resigned from his position as chief financial officer, effective May 8, 2021. All unvested PSUs, RSUs and his performance-based cash award were forfeited at that time. All unvested options were also forfeited at that time, and Mr. Guido had 90 days after his termination date to exercise his vested options.
| The dollar amounts shown are in U.S. dollars. The amounts originally in Canadian dollars were converted using the average of the average exchange rates for each fiscal month during fiscal 2015. Applying this formula to fiscal 2015, CDN$1.00 was equal to USD$0.773. |
| |
(2)
| The performance-based restricted stock units vest based on achievement of performance goals over a three-year performance period. |
| |
(3)
| The stock options vest in 25% installments on the four anniversary dates following the grant date. |
| |
(4)
| This column reflects the grant date fair value in U.S. dollars of the award granted at target in accordance with FASB ASC Topic 718. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2016 for a discussion of all assumptions made by us in determining the FASB ASC Topic 718 values of our equity awards. |
| |
(5)
| The restricted stock units vest in installments of 33%, 33%, and 34% on the three anniversary dates following the grant date. |
| |
(6)
| Mr. Haselden received a one-time grant of stock options in connection with the expansion of his role as a result of organizational changes to include certain operational aspects. |
| |
(7)
| Mr. Haselden received a one-time grant of restricted share units effective as of his employment start date. |
| |
(8)
| Mr. Almeida received a one-time grant of restricted share units effective as of his employment start date. |
| |
(9)
| In conjunction with his promotion, Mr. Holman received a pro-rated grant of stock options, performance-based restricted share unit awards, and restricted share unit awards. |
2015 Outstanding Equity Awards at 2020 Fiscal Year End
The following tables set forth unexercisedshow information regarding the outstanding equity awards held by each of the named executive officers on January 31, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Outstanding Stock Option Awards |
| Name | | Grant Date(1) | | Number of Securities Underlying Unexercised Options
(#)
Exercisable | | Number of Securities Underlying Unexercised Options
(#)
Unexercisable | | Option Exercise Price
($) | | Option Expiration Date |
| Calvin McDonald | | 08/20/2018 | | 35,178 | | | 35,177 | | | 136.67 | | | 08/20/2025 |
| | 03/28/2019 | | 13,989 | | | 41,968 | | | 167.54 | | | 03/28/2026 |
| | 03/27/2020 | | — | | | 52,431 | | | 188.84 | | | 03/27/2027 |
| Meghan Frank | | 02/16/2017 | | — | | | 94 | | | 65.97 | | | 02/16/2024 |
| | 03/31/2017 | | — | | | 1,459 | | | 51.87 | | | 03/31/2024 |
| | 03/28/2018 | | — | | | 2,181 | | | 85.96 | | | 03/28/2025 |
| | 03/28/2019 | | — | | | 1,364 | | | 167.54 | | | 03/28/2026 |
| | 03/28/2019 | | — | | | 1,399 | | | 167.54 | | | 03/28/2026 |
| | 03/27/2020 | | — | | | 1,704 | | | 188.84 | | | 03/27/2027 |
| | 12/11/2020 | | — | | | 373 | | | 344.32 | | | 12/11/2027 |
| Celeste Burgoyne | | 12/09/2016 | | 62 | | | — | | | 69.30 | | | 12/09/2023 |
| | 03/31/2017 | | 7,409 | | | 2,470 | | | 51.87 | | | 03/31/2024 |
| | 06/13/2017 | | — | | | 421 | | | 52.39 | | | 06/13/2024 |
| | 03/28/2018 | | 4,475 | | | 4,474 | | | 85.96 | | | 03/28/2025 |
| | 03/28/2019 | | 2,099 | | | 6,295 | | | 167.54 | | | 03/28/2026 |
| | 03/28/2019 | | 4,663 | | | 13,989 | | | 167.54 | | | 03/28/2026 |
| | 03/27/2020 | | — | | | 7,865 | | | 188.84 | | | 03/27/2027 |
| Michelle Choe | | 12/09/2016 | | 180 | | | — | | | 69.30 | | | 12/09/2023 |
| | 03/31/2017 | | — | | | 1,459 | | | 51.87 | | | 03/31/2024 |
| | 03/28/2018 | | — | | | 2,796 | | | 85.96 | | | 03/28/2025 |
| | 09/20/2018 | | 309 | | | 616 | | | 155.97 | | | 09/20/2025 |
| | 03/28/2019 | | 2,099 | | | 6,295 | | | 167.54 | | | 03/28/2026 |
| | 03/28/2019 | | 4,663 | | | 13,989 | | | 167.54 | | | 03/28/2026 |
| | 03/27/2020 | | — | | | 7,865 | | | 188.84 | | | 03/27/2027 |
| Nicole Neuburger | | 01/31/2020 | | — | | | 75 | | | 239.39 | | | 01/31/2027 |
| | 03/27/2020 | | — | | | 2,622 | | | 188.84 | | | 03/27/2027 |
Patrick Guido(2) | | — | | | — | | | — | | | — | | | — | |
_________
(1)The stock options vest in 25% installments on the four anniversary dates following the grant date.
(2)Mr. Guido resigned from his position as chief financial officer, effective May 8, 2020. All unvested options were forfeited at that time, and equity incentive plan awards that have not yethe has 90 days after his termination date to exercise his vested for each named executive officer outstanding asoptions.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Outstanding Stock Awards |
| | | | Time-Based Vesting Awards | | Performance-Based Vesting Awards |
| Name | | Grant Date | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)(3) | | Market Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(4) |
| Calvin McDonald | | 08/20/2018 | | 14,926 | | | 4,905,878 | | | 21,951 | | | 7,214,855 | |
| | 03/28/2019 | | — | | | — | | | 17,906 | | | 5,885,344 | |
| | 03/27/2020 | | — | | | — | | | 15,886 | | | 5,221,410 | |
| Meghan Frank | | 02/20/2018 | | 1,477 | | | 485,460 | | | — | | | — | |
| | 03/28/2018 | | 395 | | | 129,829 | | | 2,908 | | | 955,801 | |
| | 03/28/2019 | | 400 | | | 131,472 | | | 1,492 | | | 490,391 | |
| | 03/27/2020 | | 794 | | | 260,972 | | | 1,986 | | | 652,758 | |
| | 02/14/2018 | | 1,020 | | | 335,254 | | | — | | | — | |
| | 03/28/2018 | | 308 | | | 101,233 | | | 2,268 | | | 745,446 | |
| | 3/28/2019(5) | | 597 | | | 196,222 | | | 970 | | | 318,820 | |
| | 03/28/2019 | | 260 | | | 85,457 | | | — | | | — | |
| | 2/13/2020(6) | | 788 | | | 259,000 | | | — | | | — | |
| | 03/27/2020 | | 344 | | | 113,066 | | | 861 | | | 282,993 | |
| | 6/12/2020(7) | | 590 | | | 193,921 | | | — | | | — | |
| | 12/11/2020 | | 75 | | | 24,651 | | | 188 | | | 61,792 | |
| Celeste Burgoyne | | 02/14/2018 | | 2,093 | | | 687,927 | | | — | | | — | |
| | 03/28/2018 | | 633 | | | 208,054 | | | 4,653 | | | 1,529,348 | |
| | 03/28/2019 | | 1,200 | | | 394,416 | | | 4,477 | | | 1,471,500 | |
| | 03/27/2020 | | 1,589 | | | 522,273 | | | 3,972 | | | 1,305,517 | |
| Michelle Choe | | 02/14/2018 | | 2,093 | | | 687,927 | | | — | | | — | |
| | 03/28/2018 | | 395 | | | 129,829 | | | 2,908 | | | 955,801 | |
| | 09/20/2018 | | 87 | | | 28,595 | | | 641 | | | 210,684 | |
| | 03/28/2019 | | 1,200 | | | 394,416 | | | 4,477 | | | 1,471,500 | |
| | 03/27/2020 | | 1,589 | | | 522,273 | | | 3,972 | | | 1,305,517 | |
| Nicole Neuburger | | 01/31/2020 | | 2,089 | | | 686,613 | | | 40 | | | 13,147 | |
| | 01/31/2020 | | 16 | | | 5,259 | | | — | | | — | |
| | 03/27/2020 | | 530 | | | 174,200 | | | 1,324 | | | 435,172 | |
Patrick J. Guido(8) | | — | | | — | | | — | | | — | | | — | |
_________
(1)The RSUs vest in installments of 33%, 33% and 34% on the three anniversary dates following the grant date, subject to continued employment.
(2)The market value of the restricted share awards and RSUs is based on $328.68 per share, the closing sale price on January 29, 2021, the last trading day of our 2020 fiscal year ended year.
(3)The PSUs vest based on a three-year performance period.
(4)The aggregate dollar value of the PSUs is shown at target payout value based on $328.68 per share, the fair market value on January 31, 201629, 2021, the last trading day of our 2020 fiscal year.
(5).Ms. Frank was granted a one-time RSU with a target value of $100,000. The RSUs will vest in installments of 0%, 50% and 50% on the three anniversary dates following the grant date, subject to continued employment.
(6)Ms. Frank was granted a one-time RSU with a target value of $200,000. The RSUs will vest in installments of 0%, 50% and 50% on the three anniversary dates following the grant date, subject to continued employment.
(7)Ms. Frank was granted a one-time RSU with a target value of $175,000. The RSUs will vest in installments of 33%, 33% and 34% on the three anniversary dates following the grant date, subject to continued employment.
|
| | | | | | | | | | | | | |
| | | Outstanding Option Awards |
| Name |
| Grant Date(1) |
| Number of Securities Underlying Unexercised Options
(#)
Exercisable |
| Number of Securities Underlying Unexercised Options
(#)
Unexercisable |
| Option Exercise Price
($) |
| Option Expiration Date |
| Laurent Potdevin | | 03/31/2014 | | 6,995 |
| | 20,984 |
| | 52.59 |
| | 03/31/2021 |
| | | 09/15/2014 | | 8,322 |
| | 24,967 |
| | 44.20 |
| | 09/15/2021 |
| | | 03/30/2015 | | — |
| | 20,178 |
| | 64.83 |
| | 03/30/2022 |
| | | 09/14/2015 | | — |
| | 24,319 |
| | 53.79 |
| | 09/14/2022 |
| Stuart Haselden | | 03/30/2015 | | — |
| | 5,246 |
| | 64.83 |
| | 03/30/2022 |
| | | 09/14/2015 | | — |
| | 6,323 |
| | 53.79 |
| | 09/14/2022 |
| | | 10/26/2015 | | — |
| | 30,093 |
| | 48.30 |
| | 10/26/2022 |
| Scott Stump |
| 12/15/2014 |
| 658 |
|
| 1,972 |
|
| 53.87 |
|
| 12/15/2021 |
| | | 03/30/2015 | | — |
| | 5,246 |
| | 64.83 |
| | 03/30/2022 |
| | | 09/14/2015 | | — |
| | 6,323 |
| | 53.79 |
| | 09/14/2022 |
| Miguel Almeida | | 09/14/2015 | | — |
| | 12,646 |
| | 53.79 |
| | 09/14/2022 |
| Lee Holman | | 12/15/2014 | | 506 |
| | 1,517 |
| | 53.87 |
| | 12/15/2021 |
| | | 03/30/2015 | | — |
| | 2,186 |
| | 64.83 |
| | 03/30/2022 |
| | | 09/14/2015 | | — |
| | 2,635 |
| | 53.79 |
| | 09/14/2022 |
| | | 10/26/2015 | | — |
| | 790 |
| | 48.30 |
| | 10/26/2022 |
| Tara Poseley |
| 12/16/2013 |
| 8,785 |
|
| 8,785 |
|
| 57.88 |
|
| 12/16/2020 |
| | | 03/31/2014 | | 2,223 |
| | 6,668 |
| | 52.59 |
| | 03/31/2021 |
| | | 09/15/2014 | | 2,645 |
| | 7,934 |
| | 44.20 |
| | 09/15/2021 |
| | | 03/30/2015 | | — |
| | 6,296 |
| | 64.83 |
| | 03/30/2022 |
| | | 09/14/2015 | | — |
| | 7,588 |
| | 53.79 |
| | 09/14/2022 |
_________
| |
(1)
| The stock options vest in 25% installments on the four anniversary dates following the grant date. |
(8)Mr. Guido resigned from his position as chief financial officer, effective on May 8, 2020. All unvested PSUs and RSUs were forfeited at that time.
|
| | | | | | | | | | | | | | |
| | | Outstanding Stock Awards |
| | | | | Time-Based Vesting Awards | | Performance-Based Vesting Awards |
| Name | | Grant Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)(2) | | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(3) |
| Laurent Potdevin | | 01/20/2014 | | 14,039(4) |
| | 871,401 |
| | — |
| | — |
|
| | | 03/31/2014 | | — |
| | — |
| | 30,804 |
| | 1,912,004 |
|
| | | 03/30/2015 | | — |
| | — |
| | 23,137 |
| | 1,436,114 |
|
| | | 03/30/2015 | | 9,255(5) |
| | 574,458 |
| | — |
| | — |
|
| Stuart Haselden | | 02/02/2015 | | 7,631(5) |
| | 473,656 |
| | — |
| | — |
|
| | | 03/30/2015 | | — |
| | — |
| | 6,016 |
| | 373,413 |
|
| | | 03/30/2015 | | 2,406(5) |
| | 149,340 |
| | — |
| | — |
|
| Scott Stump | | 12/15/2014 | | — |
| | — |
| | 1,448 |
| | 89,877 |
|
| | | 12/15/2014 | | 4,975(5) |
| | 308,798 |
| | — |
| | — |
|
| | | 03/30/2015 | | — |
| | — |
| | 6,016 |
| | 373,413 |
|
| | | 03/30/2015 | | 2,406(5) |
| | 149,340 |
| | — |
| | — |
|
| Miguel Almeida | | 07/13/2015 | | 4,679(5) |
| | 290,426 |
| | — |
| | — |
|
| | | 09/14/2015 | | — |
| | — |
| | 7,250 |
| | 450,008 |
|
| | | 09/14/2015 | | 2,900(5) |
| | 180,003 |
| | — |
| | — |
|
| Lee Holman | | 12/15/2014 | | — |
| | — |
| | 1,114 |
| | 69,146 |
|
| | | 12/15/2014 | | 622(5) |
| | 38,608 |
| | — |
| | — |
|
| | | 03/30/2015 | | — |
| | — |
| | 2,507 |
| | 155,609 |
|
| | | 03/30/2015 | | 1,003(5) |
| | 62,256 |
| | — |
| | — |
|
| | | 10/26/2015 | | — |
| | — |
| | 453 |
| | 28,118 |
|
| | | 10/26/2015 | | 181(5) |
| | 11,235 |
| | — |
| | — |
|
| Tara Poseley | | 12/16/2013 | | — |
| | — |
| | 8,360 |
| | 518,905 |
|
| | | 03/31/2014 | | — |
| | — |
| | 9,789 |
| | 607,603 |
|
| | | 09/15/2014 | | 13,235(6) |
| | 821,496 |
| | — |
| | — |
|
| | | 03/30/2015 | | — |
| | — |
| | 7,219 |
| | 448,083 |
|
| | | 03/30/2015 | | 2,888(5) |
| | 179,258 |
| | — |
| | — |
|
_________
| |
(1)
| The market value of the restricted share awards and restricted stock units is based on $62.07 per share, the fair market value on January 29, 2016, the last trading day of our 2015 fiscal year. |
| |
(2)
| The performance-based restricted stock units vest based on a three-year performance period. |
| |
(3)
| The aggregate dollar value of the performance-based restricted stock units is shown at target payout value based on $62.07 per share, the fair market value on January 29, 2016, the last trading day of our 2015 fiscal year. |
| |
(4)
| The restricted shares vest in 1/3 installments on the three anniversary dates following the grant date. |
| |
(5)
| The restricted stock units vest in installments of 33%, 33%, and 34% on the three anniversary dates following the grant date. |
| |
(6)
| The restricted stock units vest in installments of 25%, 25%, and 50% on the three anniversary dates following the grant date. |
20152020 Option Exercises and Stock Vested
The following table provides information regarding stock options exercised by our named executive officers during fiscal 20152020 and the performance-based restricted stock units, restricted stock units,PSUs and restricted sharesRSUs that vested and the value realized upon vesting by our named executive officers during fiscal 2015.2020. Stock option award value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate market value of the shares of common stock acquired on the date of exercise. Stock award value realized is calculated by multiplying the number of shares shown in the table by the closing price of our stock on the date the stock awards vested.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Option Awards | | Stock Awards |
| Name | | Grant Date | | Number of Shares Acquired on Exercise
(#) | | Value Realized on Exercise
($) | | Number of Shares Acquired on Vesting (#)(1) | | Value Realized on Vesting
($) |
| Calvin McDonald | | 08/20/2018 | | — | | | — | | | 20,490 | | | 3,883,880 | |
| | 08/20/2018 | | — | | | — | | | 14,488 | | | 5,308,693 | |
| Meghan Frank | | 02/16/2017 | | 95 | | | 23,183 | | | — | | | — | |
| | 02/16/2017 | | — | | | — | | | 515 | | | 133,503 | |
| | 02/16/2017 | | — | | | | | 28 | | | 7,258 | |
| | 03/31/2017 | | 1,460 | | | 376,870 | | | | | — | |
| | 03/31/2017 | | — | | | — | | | 5,849 | | | 1,108,678 | |
| | 03/31/2017 | | — | | | — | | | 426 | | | 80,748 | |
| | 02/14/2018 | | — | | | — | | | 991 | | | 252,120 | |
| | 03/28/2018 | | 1,090 | | | 244,204 | | | | | — | |
| | 03/28/2018 | | — | | | — | | | 300 | | | 58,182 | |
| | 03/28/2019 | | 455 | | | 64,819 | | | | | — | |
| | 03/28/2019 | | 466 | | | 66,386 | | | | | — | |
| | 03/28/2019 | | — | | | — | | | 128 | | | 24,824 | |
| Celeste Burgoyne | | 03/30/2015 | | 282 | | | 69,797 | | | — | | | — | |
| | 06/11/2015 | | 86 | | | 21,174 | | | — | | | — | |
| | 09/14/2015 | | 659 | | | 165,478 | | | — | | | — | |
| | 04/01/2016 | | 2,612 | | | 616,364 | | | — | | | — | |
| | 12/09/2016 | | 187 | | | 44,005 | | | — | | | — | |
| | 03/31/2017 | | — | | | — | | | 9,899 | | | 1,876,355 | |
| | 03/31/2017 | | — | | | — | | | 721 | | | 136,666 | |
| | 06/13/2017 | | 1,265 | | | 318,281 | | | — | | | — | |
| | 06/13/2017 | | — | | | — | | | 1,690 | | | 320,340 | |
| | 06/13/2017 | | — | | | — | | | 123 | | | 37,275 | |
| | 02/14/2018 | | — | | | — | | | 2,032 | | | 516,961 | |
| | 03/28/2018 | | — | | | — | | | 614 | | | 119,079 | |
| | 03/28/2019 | | — | | | — | | | 591 | | | 114,619 | |
| Michelle Choe | | 12/09/2016 | | 179 | | | 43,470 | | | — | | | — | |
| | 03/31/2017 | | 1,460 | | | 380,009 | | | — | | | — | |
| | 03/31/2017 | | — | | | — | | | 5,849 | | | 1,108,678 | |
| | 03/31/2017 | | — | | | — | | | 426 | | | 80,748 | |
| | 02/14/2018 | | — | | | — | | | 2,032 | | | 516,961 | |
| | 03/28/2018 | | 2,797 | | | 632,653 | | | — | | | — | |
| | 03/28/2018 | | — | | | — | | | 384 | | | 74,473 | |
| | 09/20/2018 | | 308 | | | 48,103 | | | | | — | |
| | 09/20/2018 | | — | | | — | | | 85 | | | 25,123 | |
| | 03/28/2019 | | — | | | — | | | 591 | | | 114,619 | |
|
| | | | | | | | | | | | | | | |
| | | | | Option Awards | | Stock Awards |
| Name | | Grant Date | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#)(1) | | Value Realized on Vesting ($) |
| Laurent Potdevin | | 01/20/2014 |
| | — |
| | — |
| | 14,038 |
| | 785,426 |
|
| Stuart Haselden | | — |
| | — |
| | — |
| | — |
| | — |
|
| Scott Stump | | 12/15/2014 |
| | — |
| | — |
| | 2,450 |
| | 120,687 |
|
| Miguel Almeida | | — |
| | — |
| | — |
| | — |
| | — |
|
| Lee Holman | | 12/15/2014 |
| | — |
| | — |
| | 306 |
| | 15,074 |
|
| Tara Poseley | | 09/15/2014 |
| | — |
| | — |
| | 4,412 |
| | 235,468 |
|
_________
| |
(1)
| This represents the total number of shares acquired on the vesting of the stock awards. The shares were issued to the officers on a net basis as we withheld shares to cover taxes. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Option Awards | | Stock Awards |
| Name | | Grant Date | | Number of Shares Acquired on Exercise
(#) | | Value Realized on Exercise
($) | | Number of Shares Acquired on Vesting (#)(1) | | Value Realized on Vesting
($) |
| Nikki Neuburger | | — | | | — | | | — | | | — | | | — | |
Patrick J. Guido(2) | | 06/06/2018 | | 745 | | 138,676 | | | — | | | — | |
| | 03/28/2019 | | 2,623 | | | 373,965 | | | — | | | — | |
| | 03/28/2019 | | 1,049 | | | 149,556 | | | — | | | — | |
| | 03/28/2019 | | — | | | — | | | 295 | | | 57,212 | |
Agreements with Named Executive Officers_________
Laurent Potdevin
On December 1, 2013, we entered into an Executive Employment Agreement with our current Chief Executive Officer, Laurent Potdevin. Under(1)The shares shown in this column represent the termstotal number of his employment agreement, Mr. Potdevin received an initial annual base salary of $900,000 which was subsequently adjusted to $1,025,000 for fiscal 2016. Under the terms of his employment agreement, Mr. Potdevin is eligible to receive an annual target performance bonus of 150% of his base salary for the applicable fiscal year, if specified financial performance and individual performance goals are met for that year. Pursuant to the terms of his employment agreement, we granted Mr. Potdevin 42,115 restricted shares which vest in 1/3 installmentsacquired on the three anniversary dates followingvesting of the grant datestock awards. However, we generally issue shares after deducting the number of January 20, 2014. Mr. Potdevin also received a signing bonus of $200,000 and a retention bonus of $1,650,000 as part of his employment agreement.
Mr. Potdevin agreed to serve as a director of lululemon and its affiliates, and will not be entitled to additional compensation for these positions. Upon the termination of his employment agreement for any reason, Mr. Potdevin has agreed to resign from all these director positions. Mr. Potdevin has further agreed that, while he is still employed by us, he will not serve as a director of more than two entities that are unrelated to lululemon, and has agreed to obtain the advance consentshares of our board of directors priorcommon stock that would be needed to commencing any such service for an unrelated entity.pay applicable taxes.
We will reimburse (2)Mr. Potdevin for all reasonable out-of-pocket business-related expenses and he is entitled to participate in the employee benefit and fringe benefit arrangements generally available to our senior executive employees. We also agreed to reimburse Mr. Potdevin forGuido resigned from his reasonable moving and relocation expenses incurred and to remit up to 45.8% of the tax due to the Canada Revenue Agency (or comparable U.S. Agency)position as chief financial officer, effective on the relocation benefits on behalf of Mr. Potdevin, which amount shall itself be grossed-up to account for any taxes associated with the grossed up amount. We also agreed to assist Mr. Potdevin with his tax filings in Canada and the United States for the 2014 and 2015 tax filing years. With respect to the tax years ending December 31, 2014 and 2015, respectively, we agreed to tax equalize the payments for Mr. Potdevin's base salary and bonus, according to the terms set out in his employment agreement.
Mr. Potdevin's employment may be terminated by Mr. Potdevin or by us at any time, with or without cause. In the event Mr. Potdevin voluntarily resigns or we terminate his employment for cause, he will receive only his accrued base salary then in effect and benefits earned and payable as of the date of termination. In the event we terminate Mr. Potdevin without cause or for good reason, and subject to his compliance with the surviving terms of his employment agreement and his release of all employment-related claims he may have against us, he will be entitled to (i) 18 months of base salary, (ii) acceleration of vesting of allMay 8, 2020. All unvested performance-based restricted stock units held by Mr. Potdevin on a pro rata basis, and (iii) acceleration of vesting of allrestricted stock options held by Mr. Potdevin to the extent such stockunits were forfeited at that time. All unvested options were scheduled to vest on the next annual vesting date.
For purposes ofalso forfeited at that time, and Mr. Potdevin's employment agreement with us, termination "for cause" includes any of the following conduct by, or authorized or permitted by, Mr. Potdevin:
violation of any contractual or common law duty to the company;
conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, or any felony or crime of moral turpitude;
acts or omissions constituting gross negligence, recklessness or willful misconduct with respect to Mr. Potdevin's obligations under his employment agreement or otherwise relating to the business of company;
material breach of his employment agreement; or
failure to relocate his primary residence to the Vancouver, British Columbia, area within 120Guido had 90 days after a Canadian work permit and all other necessary authorizations and approvalshis termination date to work in Canada are granted.exercise his vested options.
In the event of any of the foregoing, Mr. Potdevin will have 15 days from receipt of written notice from us to cure the issue, if curable, which notice shall specifically identify the applicable cause and how it shall be cured, and failure to timely effect such cure shall entitle us to terminate Mr. Potdevin's employment for cause.
Stuart Haselden
On January 2, 2015, we entered into an Executive Employment Agreement with our current Chief Financial Officer and Executive Vice President, Operations, Stuart Haselden. Mr. Haselden commenced serving as our Chief Financial Officer on February 2, 2015. Under the terms of his employment agreement, Mr. Haselden received an initial annual base salary of CDN$575,000 and he is eligible to receive an annual target performance bonus of 75% of his base salary for the applicable fiscal year, if specified financial performance and individual performance goals are met for that year. Mr. Haselden's annual base salary was subsequently adjusted to USD$575,000 for fiscal 2015, and then adjusted to USD$625,000 in October 2015 in connection with the expansion of his role to include certain operational aspects. Mr. Haselden's annual base salary was subsequently adjusted to USD$645,000 for fiscal 2016. Mr. Haselden received a retention bonus of $500,000 as part of his employment agreement. In addition, Mr. Haselden received a one-time
grant of a number of restricted share units equal to $500,000, effective as of his employment start date, which will vest with respect to 1/3 of the shares per year for three years on each anniversary of his employment start date if he continues to be employed by us on such vesting date.
Mr. Haselden will be eligible for annual equity awards as determined by the Compensation Committee. In addition, we will reimburse Mr. Haselden for all reasonable out-of-pocket expenses properly incurred in the course of his employment and he is entitled to participate in the applicable employee benefit plans as are in effect from time to time.
We agreed to provide Mr. Haselden relocation services through a third party vendor in accordance with our standard executive relocation policy. If Mr. Haselden voluntarily resigns or we terminate his employment for cause, we are entitled to deduct the pro-rata amount of relocation fees we paid in connection with his relocation from any final payments owed to Mr. Haselden.
Mr. Haselden's employment may be terminated by him or by us at any time, with or without cause. In the event Mr. Haselden voluntarily resigns or we terminate his employment for cause, he will receive only his base salary then in effect and benefits earned and payable as of the date of termination. In the event we terminate Mr. Haselden's employment without cause or he terminates his employment for good reason, in addition to the amounts described above Mr. Haselden will be entitled to severance equal to
15 months of his then-current base salary, subject to his compliance with the surviving terms of the employment agreement and a non-compete, non-solicitation and non-disparagement agreement and his release of all employment-related claims he may have against us.
Scott Stump
On November 4, 2014, we entered into an Executive Employment Agreement with our current Executive Vice President, Community and Brand, Scott Stump. Mr. Stump commenced serving in this capacity on November 24, 2014. Under the terms of his employment agreement, Mr. Stump received an initial annual base salary of CDN$550,000 and he is eligible to receive an annual target performance bonus of 75% of his base salary for the applicable fiscal year, if specified financial performance and individual performance goals are met for that year. Mr. Stump's annual base salary was subsequently adjusted to USD$570,000 for fiscal 2016. Mr. Stump received a retention bonus of CDN$400,000 as part of his employment agreement. In addition, Mr. Stump received a one-time grant of a number of restricted share units equal to $400,000, effective as of his employment start date, which award will vest with respect to 1/3 of the shares per year for three years on each anniversary of his employment start date if he continues to be employed by us on such vesting date.
Mr. Stump will be eligible for annual equity awards as determined by the Compensation Committee. In addition, we will reimburse Mr. Stump for all reasonable out-of-pocket expenses properly incurred in the course of his employment and he is entitled to participate in the applicable employee benefit plans as are in effect from time to time.
We agreed to provide Mr. Stump relocation services through a third party vendor in accordance with our standard executive relocation policy. If Mr. Stump voluntarily resigns or we terminate his employment for cause, we are entitled to deduct the pro-rata amount of relocation fees we paid in connection with his relocation from any final payments owed to Mr. Stump.
Mr. Stump's employment may be terminated by him or by us at any time, with or without cause. In the event Mr. Stump voluntarily resigns or we terminate his employment for cause, he will receive only his base salary then in effect and benefits earned and payable as of the date of termination. In the event we terminate Mr. Stump's employment without cause or he terminates his employment for good reason, in addition to the amounts described above Mr. Stump will be entitled to severance equal to 15
months of his then-current base salary, subject to his compliance with the surviving terms of the employment agreement and a non-compete, non-solicitation and non-disparagement agreement and his release of all employment-related claims he may have against us.
Miguel Almeida
On June 4, 2015, we entered into an Executive Employment Agreement with our current Executive Vice President, Digital, Miguel Almeida. Under the terms of his employment agreement, Mr. Almeida received an initial annual base salary of $550,000 and he is eligible to receive an annual target performance bonus of 75% of his base salary for the applicable fiscal year, if specified financial performance and individual performance goals are met for that year. Mr. Almeida's annual base salary was subsequently adjusted to $570,000 for fiscal 2016. Mr. Almeida received a retention bonus of $450,000, for which he agreed to reimburse us in the event he voluntarily resigns or his employment is terminated for cause within 12 months from his employment start date. In addition, Mr. Almeida received a one-time grant of a number of restricted share units equal to $300,000, effective as of his employment start date, which award will vest with respect to 1/3 of the shares per year for three years on each anniversary of his employment start date if he continues to be employed by us on such vesting date.
Mr. Almeida will be eligible for annual equity awards as determined by the Compensation Committee. In addition, we will reimburse Mr. Almeida for all reasonable out-of-pocket expenses properly incurred in the course of his employment and he is entitled to participate in the applicable employee benefit plans as are in effect from time to time.
We agreed to provide Mr. Almeida relocation services through a third party vendor in accordance with our standard executive relocation policy. If Mr. Almeida voluntarily resigns or we terminate his employment for cause, we are entitled to deduct the pro-rata amount of relocation fees we paid in connection with his relocation from any final payments owed to Mr. Almeida.
Mr. Almeida's employment may be terminated by him or by us at any time, with or without cause. In the event Mr. Almeida voluntarily resigns or we terminate his employment for cause, he will receive only his base salary then in effect and benefits earned and payable as of the date of termination. In the event we terminate Mr. Almeida's employment without cause, in addition to the amounts described above Mr. Almeida will be entitled to severance equal to 15 months of his then-current base salary, subject to his compliance with the surviving terms of the employment agreement and a non-compete, non-solicitation and non-disparagement agreement and his release of all employment-related claims he may have against us.
Lee Holman
On October 26, 2015, we entered into an Executive Employment Agreement with our current Executive Vice President, Creative Director, Lee Holman. Under the terms of his employment agreement, Mr. Holman received an annual base salary of $500,000 and he is eligible to receive an annual target performance bonus of 75% of his base salary for the applicable fiscal year, if specified financial performance and individual performance goals are met for that year. Mr. Holman's annual base salary was subsequently adjusted to $550,000 for fiscal 2016.
Mr. Holman will be eligible for annual equity awards as determined by the Compensation Committee. In addition, we will reimburse Mr. Holman for all reasonable out-of-pocket expenses properly incurred in the course of his employment and he is entitled to participate in the applicable employee benefit plans as are in effect from time to time.
Mr. Holman's employment may be terminated by him or by us at any time, with or without cause. In the event Mr. Holman voluntarily resigns or we terminate his employment for cause, he will receive only his base salary then in effect and benefits earned and payable as of the date of termination. In the event we terminate Mr. Holman's employment without cause, in addition to the amounts described above Mr. Holman will be entitled to severance equal to 15 months of his then-current base salary, subject to his compliance with the surviving terms of the employment agreement and a non-compete, non-solicitation and non-disparagement agreement and his release of all employment-related claims he may have against us.
Potential Post-Employment Payments for Executive Officers
We do not have a pre-defined involuntary termination severance plan or policy for employees, including our named executive officers. Our practice in an involuntary termination situation for a named executive officer may include the following non-equity benefits:
•post-employment severance benefits between 0 to 18 months, as detailed under "Potential Payments upon Termination of Employment and Change in Control";
•salary continuation dependent on the business reason for the termination;
•lump-sum payment based on job level and years of service with lululemon;
•paid health care coverage and Consolidated Omnibus Budget Reconciliation Act, or COBRA, payments for a limited time; and
•outplacement services.
Treatment of Equity Awards Upon Termination of Employment and Change in Control
The following table summarizes the terms that our current equity incentive plan and standard form of award agreements establish for how stock options, performance-based restricted stock units, restricted shares,PSUS, and restricted stock unitsRSUs would be treated generally in the event of termination of employment for cause, retirement, death, disability, and other termination, and upon a change in control. As discussed abovecontrol under "Agreements with Named Executive Officers", theour 2014 equity incentive plan and our current standard form of award agreements. The provisions of individual employment agreements may also establish how stock options, performance-based restricted stock units,PSUs, restricted shares and restricted stock unitsRSUs would be treated in the event of termination or upon a change in control.
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination Scenario | | Stock Options | | Performance-Based Restricted Stock Units (PSUs)PSU | | Restricted Shares Awards (RSAs) | | Restricted Stock Units (RSUs)RSU |
| Cause | | All options immediately expire. | | All PSUs are immediately forfeited. | | All unvested shares of restricted stock are immediately forfeited. | | All RSUs are immediately forfeited. |
|
Retirement(1) | | | | | | | | |
Termination Scenario | | Stock Options | | Performance-Based Restricted Stock Units (PSUs) | | Restricted Shares | | Restricted Stock Units (RSUs) |
Retirement (meaning an individual's termination of service (other than for cause) after the earlier of his or her completion of 25 years of service or the date on which he or she reaches at least the age of 55 and has completed at least 10 years of service) | | Stock options granted before September 2012 may be exercised within 90 days, to the extent they were exercisable at the time of termination.
All unvested stock options granted in September 2012 or later will continue to vest for twelve12 months following the date of termination and may be exercised within the earlier of three years from the date of termination or the regular expiry date. | | PSUs granted before September 2012 are immediately forfeited.
For PSUs granted in September 2012 or later, onOn the PSU vesting date, the number of PSUs that vest is equal to the number of PSUs that would have become vested if no termination had occurred, multiplied by a percentage equal to the number of full monthsdays of suchthe participant's service during the performance period to the total number of full monthsdays contained in the performance period. | | All unvested shares of restricted stock are immediately forfeited. | | All unvested RSUs are immediately forfeited. |
| Death | | StockAll unvested options granted before September 2012 may be exercised within 12 months, to the extent they were exercisable at the time of death.
Stock options granted in September 2012 or later fully vest upon death and may be exercised within the earlier of 12 months or the regular expiry date.
| | For PSUs granted before September 2012, on the PSU vesting date, the number100% of PSUs that vest is equal to the number of PSUs that would have become vested if no termination of service had occurred.
For PSUs granted in September 2012 or later, the target number of PSUs grantedbecome fully vest and payout at targetvested as soon as practicable.
of the date of death. | | All unvested shares of restricted stock become fully vested. | | All unvested RSUs become fully vested. |
| Disability | | All options may be exercised within 12 months to the extent they were exercisable at the time of termination. | | On the PSU vesting date, a number of PSUs become fully vested equal to the number of PSUs that would have become vested if no termination had occurred. | | All unvested shares of restricted stock become fully vested. | | All unvested RSUs become fully vested. |
|
| | | | | | | | |
Termination Scenario | | Stock Options | | Performance-Based Restricted Stock Units (PSUs) | | Restricted Shares | | Restricted Stock Units (RSUs) |
| Other Termination | | All options may be exercised within 90 days to the extent they were exercisable at the time of termination.
All unvested options are immediately forfeited. | | In the event of the participant's voluntary termination, all PSUs are immediately forfeited.
In the event of termination without cause formore than 12 months before the end of the performance period, all PSUs granted before September 2012,are immediately forfeited.
In the event of termination without cause within 12 months of the end of the performance period, on the PSU vesting date the number of PSUs that become fully vested is equal to the number of PSUs that would have become vested if no termination had occurred, multiplied by a percentage equal to the number of full monthsdays of suchthe participant's service during the performance period to the total number of full monthsdays contained in the performance period.
In the event of termination without cause more than 12 months before the end of the performance period, all PSUs granted from September 2012 onward are immediately forfeited.
In the event of termination without cause within 12 months of the end of the performance period for PSUs granted from September 2012 onward, on the PSU vesting date the number of PSUs that become fully vested is equal to the number of PSUs that would have become vested if no termination had occurred, multiplied by a percentage equal to the number of full months of such participant's service during the performance period to the total number of full months contained in the performance period. | | All unvested shares of restricted stock are immediately forfeited. | | All unvested RSUs are immediately forfeited.forfeited (except in the case of some supplemental RSU awards, which vest upon termination without cause). |
| Change in Control | | Board has discretion to determine effect of change in control. | | If not assumed or substituted for, 100% of the target number of PSUs become fully vested as of the date of the change in control.
If the participant's service is terminated without cause or for good reason within two years following change in control, 100% of the target number of PSUs become fully vested as of the date of such termination. | | Board has discretion to determine effect of change in control on unvested shares of restricted stock. | | If not assumed or substituted for, 100% of the RSUs become fully vested as of the date of the change in control.
If the participant's service is terminated without cause or for good reason within two years following change in control, 100% of the RSUs become fully vested as of the date of such termination. |
_________
(1)Retirement means an individual's termination of service (other than for cause) after the earlier of the individual's completion of 25 years of service or the date on which the individual reaches at least the age of 55 and has completed at least ten years of service.
Potential Payments upon Termination of Employment and Change in Control
The following table sets forth the payments and the intrinsic value of accelerated equity awards that would be due toWe have an employment agreement with each of our named executive officers, uponwhich provides that the terminationnamed executive officer's employment may be terminated by the executive or by us at any time, with or without cause.
•If the executive voluntarily resigns or we terminate the executive's employment for cause, the executive will receive only accrued base salary then in effect and benefits earned and payable as of histhe date of termination.
•If we terminate the executive's employment without cause, and subject to the executive's compliance with the surviving terms of the executive's employment agreement and the release of all employment-related claims, each named executive officer will be entitled to the amounts shown in the table below.
•These employment agreements do not provide for any payments or her employment and upontax gross-up payments triggered by a change in control. Except in the case of Ms. Poseley, our former Chief Product Officer, who was terminated without cause and who ceased being an employee as of March 31, 2016, the amounts provided in the table below assume that each termination was effective as of January 31, 2016 (the last day of our fiscal year) and are merely illustrative of the impact of hypothetical events, based on the terms of arrangements then in effect. The amounts to be payable upon an actual termination of employment can only be determined at the time of such event, based on the facts and circumstances then prevailing. Our named executive officers are not entitled to any payments following a change in control under the terms of their employment agreements.
Under the terms of our current 2014 Equity Incentive Plan,equity incentive plan, the board of directors may take a number of actions with respect to outstanding equity awards in connection with a change in control, including the acceleration of the unvested portion of equity awards or the cancellation of such outstanding awards in exchange for substitute awards. For
The following table shows the purposepayments and the intrinsic value of accelerated equity awards that would be due to each of our named executive officers upon the table below, excepttermination of employment for various reasons, including termination in connection with a change in control.
Except in the case of Ms. Poseley, we have assumedMr. Guido (who resigned effective May 8, 2020), the amounts provided in the table below assume that each termination was effective as of January 31, 2021 (the last day of our fiscal year) and are merely illustrative of hypothetical events, based on the terms of arrangements that is in effect. The amounts to be payable upon an actual termination of employment can only be determined at the time of such event, based on the facts and circumstances then prevailing. In the case of Mr. Guido, no amounts were paid in connection with the termination of servicehis employment.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Termination Scenario | | Severance ($)(1) | | Intrinsic Value of Accelerated Equity Awards ($)(2)(3) | | Total ($) |
| Calvin McDonald | | Cause | | — | | | — | | | — | |
| | Death | | — | | | 44,076,497 | | | 44,076,497 | |
| | Disability | | — | | | 25,969,132 | | | 25,969,132 | |
| | Change in Control(4) | | 1,875,000 (5) | | 44,076,497 | | | 45,951,497 | |
| | Involuntary (without cause)(8) | | 1,875,000 (5) | | 9,956,499 | | | 11,831,499 | |
| | Voluntary | | — | | | — | | | — | |
| Meghan Frank | | Cause | | — | | | — | | | — | |
| | Death | | — | | | 3,164,912 | | | 3,164,912 | |
| | Disability | | — | | | 2,539,986 | | | 2,539,986 | |
| | Change in Control(4) | | 687,500 (6) | | 3,509,697 | | | 4,197,197 | |
| | Involuntary (without cause)(8) | | 687,500 (6) | | 1,028,716 | | | 1,716,216 | |
| | Voluntary | | — | | | — | | | — | |
| Celeste Burgoyne | | Cause | | — | | | — | | | — | |
| | Death | | — | | | 12,373,409 | | | 12,373,409 | |
| | Disability | | — | | | 6,119,036 | | | 6,119,036 | |
| | Change in Control(4) | | 843,750 (6) | | 12,373,409 | | | 13,217,159 | |
| | Involuntary (without cause)(8) | | 843,750 (6) | | 2,798,428 | | | 3,642,178 | |
| | Voluntary | | — | | | — | | | — | |
| Michelle Choe | | Cause | | — | | | — | | | — | |
| | Death | | — | | | 10,164,006 | | | 10,164,006 | |
| | Disability | | — | | | 6,149,807 | | | 6,149,807 | |
| | Change in Control(4) | | 843,750 (6) | | 10,164,006 | | | 10,739,006 | |
| | Involuntary (without cause)(8) | | 843,750 (6) | | 2,006,933 | | | 2,581,933 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Termination Scenario | | Severance ($)(1) | | Intrinsic Value of Accelerated Equity Awards ($)(2)(3) | | Total ($) |
| | Voluntary | | — | | | — | | | — | |
| Nikki Neuburger | | Cause | | — | | | — | | | — | |
| | Death | | — | | | 2,583,020 | | | 2,583,020 | |
| | Disability | | — | | | 2,211,359 | | | 2,211,359 | |
| | Change in Control(4) | | 575,000(7) | | 2,583,020 | | | 3,158,020 | |
| | Involuntary (without cause)(8) | | 575,000(7) | | — | | | 575,000 | |
| | Voluntary | | — | | | — | | | — | |
Patrick Guido(9) | | Voluntary | | — | | | — | | | — | |
_________
(1)The dollar amounts shown are in U.S. dollars.
(2)Amounts related to the death, disability, involuntary termination in connection with a change in control, and involuntary termination without cause are based on the intrinsic value of unvested equity awards that would have become vested upon the triggering event on January 31, 2021 based on the fair market value of the stock on such date.
(3)The share-based compensation expense recorded for accounting purposes may differ from the intrinsic value as disclosed in this column.
(4)Amounts shown assume the involuntary termination of the executive would be involuntarily terminatedofficer's employment without cause in addition to the election of the board of directors would elect to accelerate the unvested portion of the outstanding stock options and restricted shares, and 100% vesting of restricted stock units and 100% of the target number of PSUs in connection with a change in control.
(5)Amounts payable in equal installments on the company's normal paydays over a 18-month period and will be forfeited if the executive fails to comply with certain restrictive covenants, including non-competition, non-solicitation and non-disparagement agreements.
(6)Amounts payable in equal installments on the company's normal paydays over a 15-month period and will be forfeited if the executive fails to comply with certain restrictive covenants, including non-competition, non-solicitation and non-disparagement agreements.
(7)Amounts payable in equal installments on the company's normal paydays over a 15-month period and will be forfeited if the executive fails to comply with certain restrictive covenants, including non-competition, non-solicitation and non-disparagement agreements.
(8)Also includes termination of the executive officer's employment by the executive officer for "constructive dismissal," which is not specifically defined in the executive's employment agreement.
(9)Mr. Guido voluntarily resigned from his position as chief financial officer, effective on May 8, 2020. He did not receive any severance payments, and all unvested equity awards were forfeited in connection with the termination of his employment.
CEO Pay Ratio
would become fully vested. In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule that requires companies to disclose the ratio of chief executive officer compensation to that of the median employee. This section discloses the ratio of the annual total compensation of our principal executive officer to that of our median employee and how that ratio was derived.
CEO Compensation
Mr. McDonald, our chief executive officer, had a total annual compensation of $10,590,106 in fiscal 2020, as reflected in the summary compensation table.
Our agreementsMedian Employee
We are a global company operating in four main markets: the Americas, EMEA, Asia Pacific and China. In fiscal 2020, we employed approximately 25,000 employees, with a majority of these executives do not contain tax gross-up provisions. In the caseemployees being in part-time retail positions.
Our median employee had an annual total compensation of Ms. Poseley, the amounts provided$14,842 in fiscal 2020. As illustrated in the table below, reflect the actual amounts paid upon terminationestimated median employee of her employmentlululemon for fiscal 2020 was a Key Leader, one of our names for our store associates, that worked on a part-time hourly basis during the fiscal year. The median employee earned an average hourly rate of approximately $16.31 USD, inclusive of salary and non-equity incentive plan compensation.
We are proud of our store compensation programs which are grounded in our pay-for-performance philosophy and believe they are a key component in attracting and retaining the best talent. As we put our people first during the COVID-19 pandemic, we continued to pay our employees through our global pay and job protection during store closures. This impacted the median employee’s wages in fiscal 2020 as this employee’s wages during the job protection period was based on an average number of March 31, 2016.hours worked.
2020 Pay Ratio
The estimated ratio of Mr. McDonald's total annualized compensation was approximately 714 times that of our median employee in fiscal 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | | Salary(1) | | Bonus | | Stock Awards(2) | | Option Awards(3) | | Non-Equity Incentive Plan Compensation(4) | | All Other Compensation | | Total |
Calvin McDonald,
Chief Executive Officer | | $1,182,692 | | — | | $2,999,912 | | $3,000,024 | | $1,875,000 | | $1,532,478 | | $10,590,106 |
Educator,
Median Employee | | $13,742 | | — | | — | | — | | $1,100 | | — | | $14,842 |
| Pay Ratio | | | | | | | | | | | | | | 714 |
_________
(1)Salary is comprised of base salary pay, overtime pay, double-time pay, statutory holiday pay, and vacation pay earned.
(2)This column reflects the grant date fair value of performance-based restricted stock units granted.
(3)This column reflects the grant date fair value of stock options granted.
(4)Non-equity incentive plan compensation includes monthly, quarterly, and annual performance-based cash awards.
|
| | | | | | | | | | | |
| Name | | Termination Scenario | | Severance ($)(1) | | Intrinsic Value of Accelerated Equity Awards ($)(2)(3) | | Total ($) |
| Laurent Potdevin | | Cause | | — |
| | — |
| | — |
|
| | | Death | | — |
| | 5,640,426 |
| | 5,640,426 |
|
| | | Disability | | — |
| | 4,793,976 |
| | 4,793,976 |
|
| | | Change in Control(4) | | 1,500,000 (5) |
| | 3,357,863 |
| | 4,857,863 |
|
| | | Involuntary (without cause)(6) | | 1,500,000 (5) |
| | 2,018,761 |
| | 3,518,761 |
|
| | | Voluntary | | — |
| | — |
| | — |
|
| Stuart Haselden | | Cause | | — |
| | — |
| | — |
|
| | | Death | | — |
| | 1,463,145 |
| | 1,463,145 |
|
| | | Disability | | — |
| | 996,410 |
| | 996,410 |
|
| | | Change in Control(4) | | 781,250 (7) |
| | 1,463,145 |
| | 2,244,395 |
|
| | | Involuntary (without cause)(6) | | 781,250 (7) |
| | — |
| | 781,250 |
|
| | | Voluntary | | — |
| | — |
| | — |
|
| Scott Stump | | Cause | | — |
| | — |
| | — |
|
| | | Death | | — |
| | 989,954 |
| | 989,954 |
|
| | | Disability | | — |
| | 921,429 |
| | 921,429 |
|
| | | Change in Control(4) | | 687,500 (7) |
| | 989,954 |
| | 1,677,454 |
|
| | | Involuntary (without cause)(6) | | 687,500 (7) |
| | — |
| | 687,500 |
|
| | | Voluntary | | — |
| | — |
| | — |
|
| Miguel Almeida | | Cause | | — |
| | — |
| | — |
|
| | | Death | | — |
| | 1,025,145 |
| | 1,025,145 |
|
| | | Disability | | — |
| | 920,436 |
| | 920,436 |
|
| | | Change in Control(4) | | 687,500 (7) |
| | 1,025,145 |
| | 1,712,645 |
|
| | | Involuntary (without cause)(8) | | 687,500 (7) |
| | — |
| | 687,500 |
|
| | | Voluntary | | — |
| | — |
| | — |
|
| Lee Holman | | Cause | | — |
| | — |
| | — |
|
| | | Death | | — |
| | 410,107 |
| | 410,107 |
|
| | | Disability | | — |
| | 364,972 |
| | 364,972 |
|
| | | Change in Control(4) | | 625,000 (7) |
| | 410,107 |
| | 1,035,107 |
|
| | | Involuntary (without cause)(8) | | 625,000 (7) |
| | — |
| | 625,000 |
|
| | | Voluntary | | — |
| | — |
| | — |
|
| Tara Poseley | | Involuntary (without cause)(9) | | 615,833 |
| | 438,825 |
| | 1,054,658 |
|
_________ For the purposes of the chief executive officer pay ratio determination, we have used a consistently applied compensation measure to identify the median employee in fiscal 2020. The below table summarizes our methodology and key assumptions in setting our consistently applied compensation measure.
| | | | | | | | |
(1)
Item | | Company Practice |
| Date Selection | | The dollarlast day of the 2020 fiscal year, January 31, 2021, was used for the calculation. |
| Annualized Earnings | | Permanent part-time and full-time employees with partial year earnings were annualized to full year earnings for the fiscal year, assuming consistent earnings. Annualized earnings include salary earned, bonus earned, and actual equity granted value. This does not apply to seasonal or temporary employees. |
| Employee Workforce Definition | | Generally, employees who worked any portion of the fiscal year and who were active earners were included. The jurisdictions included in the analysis were Australia, Canada, China, the United Kingdom, and the United States of America. |
| De-Minimus Rule | | Employee groups in certain non-U.S. jurisdictions were excluded as the aggregate total of these employees amounts less than 5% of our total employee workforce. The jurisdictions excluded were Denmark, France, Germany, Ireland, Japan, Malaysia, the Netherlands, New Zealand, Norway, Singapore, South Korea, Sweden, and Switzerland. The total number of employees excluded from the analysis was approximately 800 based on a total workforce of approximately 25,000. |
| Exchange Rates | | All figures shown are in U.S. dollars. The amounts originally in Canadiannon-U.S. dollars were converted to U.S. dollars using the average of the average exchange rates for each fiscal month during the fiscal 2015. Applying this formula to fiscal 2015, CDN$1.00 was equal to USD$0.773.year. |
| |
(2)
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee's annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies - including companies in our peer group - may not be comparable to the pay ratio reported above. Other companies may have different employment and compensation practices, different geographic breadth, perform different types of work, and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. This information is being provided for compliance purposes. Neither the people, culture and compensation committee nor management of the company used the pay ratio measure in making compensation decisions.
| Amounts related to the death, disability, involuntary termination in connection with a change in control and involuntary termination without cause are based on the intrinsic value of unvested equity awards that would have become vested upon the triggering event on January 31, 2016 based on the fair market value of the stock on such date. |
| |
(3)
| The share-based compensation expense recorded for accounting purposes may differ from the intrinsic value as disclosed in this column. |
| |
(4)
| Amounts would become payable upon a "double trigger" involving the involuntary termination of the executive officer's employment without cause following a change in control. |
| |
(5)
| Amounts payable in equal installments on the company's normal paydays over an 18-month period and will be forfeited if the executive fails to comply with certain restrictive covenants, including non-competition, non-solicitation and non-disparagement agreements. |
| |
(6)
| Also includes termination of the executive officer's employment by the executive officer for "good reason," which includes in connection with (a) any material adverse change in the executive's title or diminution of the executive's responsibilities, (b) a reduction in the executive's base salary or target bonus; or (c) our breach of any of the other material terms of the executive's employment agreement. |
| |
(7)
| Amounts payable in equal installments on the company's normal paydays over a 15-month period and will be forfeited if the executive fails to comply with certain restrictive covenants, including non-competition, non-solicitation, and non-disparagement agreements. |
| |
(8)
| Also includes termination of the executive officer's employment by the executive officer for "constructive dismissal," which is not specifically defined in the executive's employment agreement. |
| |
(9)
| Ms. Poseley's employment was terminated without cause in October 2015. However, Ms. Poseley continued to provide consulting services until the end of March 2016 and she received compensation for her consulting services in an amount equal to her base salary and her equity-based compensation continued vesting until the end of March 2016. The severance amount in the table is equal to Ms. Poseley's base salary for a 10-month period, which will be payable from April 2016 to January 2017 in equal installments on the company's normal paydays, as well as reimbursement of relocation costs, outplacement services, and tax services. Ms. Poseley's severance payments will be forfeited if she fails to comply with certain restrictive covenants, including non-competition, non-solicitation and non-disparagement agreements. |
DIRECTOR COMPENSATION
General Description of DirectorDirection Compensation Philosophy
Each ofOur people, culture and compensation committee considers the specific duties and responsibilities for our non-employee directors receivesdirector compensation program. We believe a combined offering of both cash and equity grants will attract and retain qualified candidates, and aligns our director’s interest with our shareholders. In setting our director compensation, the people, culture, and compensation committee annually reviews our pay to ensure we remain competitive, and consults with its independent compensation advisor, Willis Towers Watson, for serving on our board of directors. Annual cash compensation is comprised ofrecommendations and market practice.
Director Compensation Structure
Service Fee
The service fees for fiscal 2020 was an annual cash retainer, and fees for each meeting attended based on the following schedule:
| | | | | | | | |
| Retainers | | |
| All non-employee directors | | $ | 85,000 | |
| Additional Retainers | | |
| Chair | | 135,000 | |
| Lead Director | | 50,000 | |
| Audit Committee Chair | | 20,000 | |
| People, Culture and Compensation Committee Chair | | 15,000 | |
| Corporate Responsibility, Sustainability and Governance Committee Chair | | 10,000 | |
| Audit Committee Member | | 10,000 | |
| People, Culture and Compensation Committee Member | | 7,500 | |
| Corporate Responsibility, Sustainability and Governance Committee Member | | 5,000 | |
|
| | | | |
| Meeting Attendance | | |
| In-person Board Meeting | | $ | 1,500 |
|
| Telephonic Board Meeting | | 1,000 |
|
| Committee Meeting | | 1,000 |
|
| Retainers | | |
| All non-employee directors | | 60,000 |
|
| Additional Retainers | | |
| Co-Chairmen | | 125,000 |
|
| Audit Committee Chair | | 20,000 |
|
| Compensation Committee Chair | | 15,000 |
|
| Nominating and Governance Committee Chair | | 10,000 |
|
In additionresponse to the amounts set forthchanging business environment as impacted by the outbreak of the COVID-19 pandemic, members of our board of directors chose to not receive their cash retainer for three months in fiscal 2020. The cost savings were used to help establish the table above,We Stand Together fund to aid employees facing COVID-19 related hardships.
Equity Grant
In addition, each non-employee director annually is entitled to equity compensation consisting ofreceives an annual grant of a restricted stock awardawards under our current 2014 Equity Incentive Plan.equity incentive plan. These annual awards are generally granted after the annual meeting of shareholders each year if the director continues to be a member of our board of directors.
Non-employee directors who join our board of directors other than in connection with an annual meeting generally receive these awards on a pro-rata basis. For fiscal 2015 each non-employee director was granted a2020, directors who served on the board of directors for the full fiscal year received an award of restricted stock award having a fair value at the time of grant equal to $125,000,approximately $130,000, subject to one-yearone year vesting. Equity grants for non-employee directors who joined our
Fiscal 2021 Director Compensation Structure Changes
For fiscal 2021, the board of directors during fiscal 2015 were made on a pro-rata basis.
For fiscal 2016, eachreviewed our non-employee director is entitledcompensation program and recommended no changes.
Director Stock Ownership Guidelines
The corporate responsibility, sustainability and governance committee has adopted stock ownership guidelines for our directors as follows:
| | | | | | | | |
| Position | | Minimum Ownership Guidelines
(Dollar Value of Shares) |
| Non-employee director | | 5 x Annual Cash Retainer Compensation |
Our non-employee directors are encouraged to a restrictedcomply with the stock award having a fair value atownership guidelines within five years after their date of appointment or election to the time of grant equal to $125,000, subject to one-year vesting. These annual non-employee director grants will be made at the conclusion of the 2016 annual meeting of stockholders if the director is then a member of our board of directors.
Fiscal 2020 Director Compensation
The following table sets forthshows the amount of compensation we paid to each of our non-employee directors for fiscal 20152020 for serving on our board of directors:
|
| | | | | | | | | |
| Name | | Fees Earned or Paid in Cash
($) | | Stock Awards
($)(1) | | Total
($) |
| Robert Bensoussan |
| 72,500 |
| | 125,257 |
| | 197,757 |
|
| Michael Casey |
| 191,750 |
| | 125,257 |
| | 317,007 |
|
| Steven J. Collins | | 76,000 |
| | 125,710 |
| | 201,710 |
|
| RoAnn Costin |
| 74,000 |
| | 125,257 |
| | 199,257 |
|
| William H. Glenn |
| 71,000 |
| | 125,257 |
| | 196,257 |
|
Kathryn Henry(2) | | — |
| | — |
| | — |
|
| Martha A.M. Morfitt |
| 92,000 |
| | 125,257 |
| | 217,257 |
|
| David M. Mussafer | | 183,500 |
| | 125,710 |
| | 309,210 |
|
| Rhoda M. Pitcher |
| 92,000 |
| | 125,257 |
| | 217,257 |
|
Thomas G. Stemberg(3) |
| 97,334 |
| | 168,206 |
| | 265,540 |
|
| Emily White |
| 74,000 |
| | 125,257 |
| | 199,257 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash(2) ($) | | Stock Awards
($)(1) | | Option Awards ($)(1) | | Total
($) |
| Michael Casey | | 88,125 | | | 128,290 | | | — | | | 216,415 | |
| Stephanie Ferris | | 71,250 | | | 124,934 | | | — | | | 196,184 | |
Kourtney Gibson(3) | | 3,036 | | | 26,861 | | | — | | | 29,897 | |
| Tricia Glynn | | 67,500 | | | 128,290 | | | — | | | 195,790 | |
| Kathryn Henry | | 71,250 | | | 128,290 | | | — | | | 199,540 | |
| Jon McNeill | | 67,500 | | | 128,290 | | | — | | | 195,790 | |
| Martha Morfitt | | 96,875 | | | 128,290 | | | — | | | 225,165 | |
Glenn Murphy(4) | | 165,000 | | | 128,290 | | | 168,945 | | | 462,235 | |
| David Mussafer | | 115,000 | | | 128,290 | | | — | | | 243,290 | |
| Emily White | | 73,125 | | | 128,290 | | | — | | | 201,415 | |
_________
| |
(1)(1)The amounts in this column represent the expense we recognized in fiscal 2020 in accordance with FASB ASC Topic 718. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 for a discussion of all assumptions made by us in determining the FASB ASC Topic 718 values of our equity awards. | The amounts in this column represent the expense we recognized in fiscal 2015 in accordance with FASB ASC Topic 718. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2016 for a discussion of all assumptions made by us in determining the FASB ASC Topic 718 values of our equity awards. |
| |
(2)
| Ms. Henry was appointed as a director in January 2016 and was granted a pro-rated restricted stock award in February 2016. |
| |
(3)
| Mr. Stemberg passed away in October 2015 and the Compensation Committee approved the accelerated vesting of his fiscal 2015 restricted stock award. |
(2)The board of directors forwent 3 months of their cash retainer to help establish the We Stand Together Fund for employees facing COVID-19 related hardships.
(3)Ms. Gibson joined the board of directors effective November 18, 2020.
(4)Mr. Murphy received option awards in fiscal 2018 for his role as executive chair of the board of directors. The option expense continues to be recognized in fiscal 2020 as it vests over a three-year period.
The following table summarizes non-employee director restricted stock awards granted in fiscal 2015:
|
| | | | | | |
| Name |
| Securities Underlying Restricted Stock Awards Granted During Fiscal 2015 (#) |
| Grant Date Fair Value of Securities Underlying Restricted Stock Awards Granted During Fiscal 2015(1) ($) |
| Robert Bensoussan |
| 1,892 |
|
| 125,004 |
|
| Michael Casey |
| 1,892 |
|
| 125,004 |
|
| Steven J. Collins | | 1,892 |
| | 125,004 |
|
| RoAnn Costin |
| 1,892 |
| | 125,004 |
|
| William H. Glenn |
| 1,892 |
| | 125,004 |
|
Kathryn Henry(2) | | — |
| | — |
|
| Martha A.M. Morfitt |
| 1,892 |
| | 125,004 |
|
| David M. Mussafer | | 1,892 |
| | 125,004 |
|
| Rhoda M. Pitcher |
| 1,892 |
| | 125,004 |
|
| Thomas G. Stemberg |
| 1,892 |
|
| 125,004 |
|
| Emily White |
| 1,892 |
|
| 125,004 |
|
_________
| |
(1)
| The amounts in this column represent the grant date fair value of the restricted stock awards granted in fiscal 2015 in accordance with FASB ASC Topic 718. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2016 for a discussion of all assumptions made by us in determining the FASB ASC Topic 718 values of our equity awards. |
| |
(2)
| Ms. Henry was appointed as a director in January 2016 and was granted a pro-rated restricted stock award in February 2016. |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Related Person Transactions for Fiscal 2015
Other than the compensation agreements and other arrangements which are described under "Compensation Discussion and Analysis" and the transactions described below, since February 1, 2015, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities or any member of the immediate family of the foregoing persons had or will have a direct or indirect material interest. We believe that we have executed all of the transactions set forth below on terms no less favorable to us than we could have obtained from unaffiliated third parties.
Anoosha Foroughi, our Design Director of Color, Print and Pattern who commenced employment with us in August 2015, is in a common-law relationship with Mr. Holman, our Executive Vice President, Creative Director. The total amount paid to Ms. Foroughi during fiscal 2015, including the annual cash incentive paid in early fiscal 2016 under the bonus plan for fiscal 2015 and the grant date fair value of equity awards, was $139,703. The amounts originally in Canadian dollars were converted to U.S. dollars using the average of the average exchange rates for each fiscal month during fiscal 2015, with CDN$1.00 equal to USD$0.773.
0823038 BC Ltd., a company indirectly owned by Dennis Wilson, who is a beneficial owner of more than 5% of
our total outstanding shares, owns the land and building in which our Victoria, British Columbia store is located. We currently lease the space for our Victoria store from 0823038 BC Ltd. at a monthly rent of CDN$9,021. The total monthly payments due under the lease from February 1, 2016 (the first day of our 2016 fiscal year) through the end of the current lease term are approximately CDN$153,354. We have agreed to a renewal of this lease for a five year term, commencing July 1, 2017.
We entered a Materials License Agreement and an Independent Contractor Agreement, which commenced on February 1, 2011, with the Conrad Group, Inc., a company owned by Susanne Conrad, Mr. Wilson's sister-in-law. Under these two agreements, the Conrad Group, Inc. provides certain personal and professional development coaching to our employees, and grants us a license to use certain associated training materials. We made payments totaling $353,803 to the Conrad Group during fiscal 2015 pursuant to these two agreements.
Procedures for Approval of Related Person Transactions
In April 2007, weOur board of directors has adopted a written statementpolicy for approval of policy with respect to related party transactions which is administered bybetween lululemon and our Audit Committee. Under our current related party transaction policy, a "Related Party Transaction" is any transaction, arrangement or relationship between us or any of our subsidiaries and a Related Person not including any transactions involving less than $120,000 when aggregated with all similar transactions for any calendar year, or transactions that have received pre-approval of our Audit Committee. A "Related Person" is any of our executive officers, directors or director nominees, any stockholderexecutive officers, shareholders beneficially owning in excess ofmore than 5% of our stock, or securities exchangeable for our stock, anyand each of their respective immediate family member of any of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is an executive officer, a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest in such entity.
Pursuant to our related party transaction policy, a Related Party Transaction may only be consummated or may only continue if:
Our Audit Committee approves or ratifies such transaction in accordance with the terms of the policy; or
the Chairperson of our Audit Committee pre-approves or ratifies such transaction andmembers, where the amount involved in the transaction exceeds $120,000 in a single fiscal year and the party to the transaction has or will have a direct or indirect material interest. The policy provides that the audit committee reviews each transaction and determines whether or not to approve or ratify the transaction.
In determining whether to approve or ratify transactions subject to the policy, the audit committee considers, among other factors it deems appropriate, the related person's interest in the transaction and whether the transaction is on terms no less favorable to lululemon than $500,000, providedterms that for the Related Party Transaction to continue it must be approved by our Audit Committee at its next regularly scheduled meeting.could have been reached with an unrelated third party.
If advance approval of a Related Party Transaction is not feasible, then that Related Party Transaction will beThe audit committee has considered and adopted the following standing pre-approvals under the policy for transactions with related persons:
•Employment as an executive officer of lululemon, if our Audit Committee determines itthe related compensation is either required to be appropriate, ratified, at its next regularly scheduled meeting. If we decidereported in our proxy statement or is approved (or recommended for approval) by the people, culture and compensation committee;
•Any compensation paid to proceed with a Related Party Transaction without advance approval, thendirector if the termscompensation is required to be reported in our proxy statement;
•Any transaction where the related person's interest arises solely from the ownership of such Related Party Transaction must permit termination by us without further material obligation inour stock and all holders of our common stock received the event our Audit Committee ratification is not forthcoming at our Audit Committee's next regularly scheduled meeting.same benefit on a pro-rata basis; and
•Any transaction involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.
Transactions with Related Persons though not classified as Related Party Transactions byfor Fiscal 2020
Dennis J. Wilson, who is a beneficial owner of more than 5% of our related party transaction policy and thus not subject to its review and approval requirements, may still need to be disclosed if required bytotal outstanding shares, has informed us that he controls the applicable securities laws, rules and regulations.
company from which we lease our Victoria, British Columbia store. We currently lease the space at a monthly rent of CDN$9,583. The total monthly payments due under the lease from February 1, 2021 (the first day of our 2021 fiscal year) through the end of the current lease term are approximately CDN$159,883.
PRINCIPAL STOCKHOLDERSSHAREHOLDERS AND STOCK OWNERSHIP BY MANAGEMENT
The following table sets forth information concerning the "beneficial ownership"ownership" of our common stock as of April 1, 20162021 by (i)(1) those persons who we know to beneficially own more than 5% of our outstanding common stock, (ii)(2) our directors, (iii)(3) the "named executive officers" listed in the Summary Compensation Table above,summary compensation table, and (iv)(4) all of our current directors and executive officers as a group. "Beneficial ownership" is a concept that takes into account shares that may be acquired within 60 days of April 1, 20162021 (such as by exercising vested stock options) and shares as to which the named person has or shares voting or investment power.
|
| | | | | | |
Beneficial Owner(1) | | Number of Shares Beneficially Owned (#) | | Percent |
Dennis J. Wilson(2) | | 20,109,131 |
| | 14.6 | % |
| 21 Water Street, Suite 600 | | | | |
| Vancouver, B.C. | | | | |
| V6B 1A1 | | | | |
Advent International Corporation(3) | | 20,105,279 |
| | 14.6 | % |
| 75 State Street | | | | |
| Boston, MA 02109 | | | | |
FMR LLC(4) | | 19,606,598 |
| | 14.3 | % |
| 245 Summer Street | | | | |
| Boston, MA 02210 | | | | |
Capital Research Global Investors(5) | | 13,851,700 |
| | 10.1 | % |
| 333 South Hope Street | | | | |
| Los Angeles, CA 90071 | | | | |
Manning & Napier Advisors, LLC(6) | | 9,258,486 |
| | 6.7 | % |
| 290 Woodcliff Drive | | | | |
| Fairport, NY 14450 | | | | |
The Vanguard Group, Inc.(7) | | 6,833,485 |
| | 5.0 | % |
| 100 Vanguard Blvd. | | | | |
| Malvern, PA 19355 | | | | |
Lone Pine Capital LLC(8) | | 6,446,607 |
| | 4.7 | % |
| Two Greenwich Plaza | | | | |
| Greenwich, CT 06830 | | | | |
Laurent Potdevin(9) | | 60,591 |
| | * |
|
| Robert Bensoussan | | 7,451 |
| | * |
|
Michael Casey(10) | | 50,717 |
| | * |
|
Steven J. Collins(11) | | 13,758 |
| | * |
|
RoAnn Costin(12) | | 58,201 |
| | * |
|
| William H. Glenn | | 7,741 |
| | * |
|
Kathryn Henry(13) | | 722 |
| | * |
|
| Martha A.M. Morfitt | | 84,339 |
| | * |
|
David M. Mussafer(14) | | 50,072 |
| | * |
|
Rhoda M. Pitcher(15) | | 23,968 |
| | * |
|
Emily White(16) | | 10,426 |
| | * |
|
Stuart Haselden(17) | | 4,648 |
| | * |
|
| Miguel Almeida | | — |
| | — |
|
Lee Holman(18) | | 1,689 |
| | * |
|
Scott Stump(19) | | 5,238 |
| | * |
|
Directors and executive officers as a group (15 persons)(9)-(19) | | 379,561 |
| | * |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Beneficial Owner(1) | | Number of Shares of Common Stock Owned | | Right to Acquire(2) | | Number of Shares Beneficially Owned(3) | | Percent(4) |
FMR LLC(5) | | 18,768,379 | | | — | | | 18,768,379 | | | 14.4 | % |
| 245 Summer Street | | | | | | | | |
| Boston, MA 02210 | | | | | | | | |
Dennis J. Wilson(6) | | 10,955,225 | | | — | | | 10,955,225 | | | 8.4 | % |
| 21 Water Street, Suite 600 | | | | | | | | |
| Vancouver, BC V6B 1A1 | | | | | | | | |
The Vanguard Group, Inc.(7) | | 8,719,422 | | | — | | | 8,719,422 | | | 6.7 | % |
| 100 Vanguard Blvd. | | | | | | | | |
| Malvern, PA 19355 | | | | | | | | |
T. Rowe Price Associates, Inc.(8) | | 7,981,172 | | | — | | | 7,981,172 | | | 6.1 | % |
| 100 E. Pratt Street | | | | | | | | |
| Baltimore, MD 21202 | | | | | | | | |
BlackRock, Inc.(9) | | 7,784,479 | | | — | | | 7,784,479 | | | 6.0 | % |
| 55 East 52nd Street | | | | | | | | |
| New York, NY 10055 | | | | | | | | |
Prudential Financial, Inc.(10) | | 7,447,626 | | | — | | | 7,447,626 | | | 5.7 | % |
| 751 Broad Street | | | | | | | | |
| Newark, NJ 07102 | | | | | | | | |
Jennison Associates LLC(11) | | 7,092,102 | | | — | | | 7,092,102 | | | 5.4 | % |
| 466 Lexington Avenue | | | | | | | | |
| New York, NY 10017 | | | | | | | | |
| Michael Casey | | 57,097 | | | — | | | 57,097 | | | * |
| Stephanie Ferris | | 1,011 | | | — | | | 1,011 | | | * |
| Kourtney Gibson | | 218 | | | — | | | 218 | | | * |
| Tricia Glynn | | 2,787 | | | — | | | 2,787 | | | * |
| Kathryn Henry | | 4,852 | | | — | | | 4,852 | | | * |
| Jon McNeill | | 6,539 | | | — | | | 6,539 | | | * |
| Martha Morfitt | | 85,354 | | | — | | | 85,354 | | | * |
| Glenn Murphy | | 102,506 | | | 19,420 | | | 121,926 | | | * |
| David Mussafer | | 19,386 | | | — | | | 19,386 | | | * |
Emily White(12) | | 16,806 | | | — | | | 16,806 | | | * |
| Calvin McDonald | | 39,469 | | | 76,265 | | | 115,734 | | | * |
| Meghan Frank | | 3,377 | | | 3,992 | | | 7,369 | | | * |
| Celeste Burgoyne | | 6,111 | | | 32,142 | | | 38,253 | | | * |
| Michelle Choe | | 7,700 | | | 18,835 | | | 26,535 | | | * |
| Nicole Neuburger | | 437 | | | 675 | | | 1,112 | | | * |
Patrick J. Guido(13) | | — | | | — | | | — | | | * |
| Directors and executive officers as a group (15 persons) | | 353,650 | | | 151,329 | | | 504,979 | | | * |
_________
* Less than 1%.
| |
(1)Unless otherwise indicated, the address of the beneficial owner is c/o lululemon athletica inc., 1818 Cornwall Avenue, Vancouver, British Columbia V6J 1C7. (2)Represents shares of our common stock issuable upon exercise of options that have vested within 60 days. (3)(1) | Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is c/o lululemon athletica inc., at 1818 Cornwall Avenue, Vancouver, British Columbia V6J 1C7. Percentages are calculated on the basis of 137,380,580 shares of our common stock outstanding as of April 1, 2016, provided that any additional shares of our common stock that a stockholder has the right to acquire within 60 days of April 1, 2016 were deemed to be outstanding for purposes of calculating the stockholder's percentage beneficial ownership. |
| |
(2)
| Based on a Schedule 13G/A filed by Mr. Wilson with the SEC on February 9, 2016. Includes 9,415,677 shares of our common stock issuable upon the exchange of exchangeable shares of Lulu Canadian Holding, Inc. held by Mr. Wilson; 268,984 shares of our common stock issuable upon the exchange of exchangeable shares of Lulu Canadian Holding, Inc. held by Mr. Wilson's wife; 10,328,858 shares of our common stock held by LIPO Investments (USA), Inc., an entity which Mr. Wilson controls; 91,760 shares of our common stock issuable upon the exchange of exchangeable shares of Lulu Canadian Holding, Inc. held by Five Boys Investments ULC, an entity which Mr. Wilson controls; and 3,852 shares of our common stock held by Mr. Wilson. Lulu Canadian Holding, Inc. is our indirect wholly owned subsidiary. Exchangeable shares of Lulu Canadian Holding, Inc. may be exchanged on a one-for-one basis for shares of our common stock. |
| |
(3)
| Based on a Schedule 13D/A filed by Advent International Corporation with the SEC on October 22, 2014. Includes 21,412 shares of our common stock held by Advent Partners GPE VII-A Limited Partnership, 51,550 shares of our common stock held by Advent Partners GPE VII‑A Cayman Limited Partnership, 212,613 shares of our common stock held by Advent Partners GPE VII‑B Cayman Limited Partnership, 12,304 shares of our common stock held by Advent Partners GPE VII 2014 Limited Partnership, 34,983 shares of our common stock held by Advent Partners GPE VII 2014 Cayman Limited Partnership, 33,877 shares of our common stock held by Advent Partners GPE VII‑A 2014 Limited Partnership, 24,669 shares of our common stock held by Advent Partners GPE VII‑A 2014 Cayman Limited Partnership, 8,947 shares of our common stock held by Advent Partners GPE VII Limited Partnership, and 194,921 shares of our common stock held by Advent Partners GPE VII Cayman Limited Partnership, for each of which Advent International GPE VII, LLC ("AIGPE VII LLC") is the general partner, for which in turn Advent International Corporation ("AIC") is the manager; and 19,510,003 shares of our common stock held by Advent Puma Acquisition Limited ("APAL"). APAL is jointly owned by (a) Advent International GPE VII‑A Limited Partnership (which indirectly beneficially owns 2,345,401 shares of our common stock as an owner of APAL), Advent International GPE VII‑E Limited Partnership (which indirectly beneficially owns 4,145,147 shares of our common stock as an owner of APAL), and Advent International GPE VII‑H Limited Partnership (which indirectly beneficially owns 319,513 shares of our common stock as an owner of APAL), for each of which GPE VII GP Limited Partnership is the general partner, for which in turn AIGPE VII LLC is the general partner, for which in turn AIC is the manager; and by (b) Advent International GPE VII Limited Partnership (which indirectly beneficially owns 2,534,069 shares of our common stock as an owner of APAL), Advent International GPE VII‑B Limited Partnership (which indirectly beneficially owns 5,752,805 shares of our common stock as an owner of APAL), Advent International GPE VII‑C Limited Partnership (which indirectly beneficially owns 1,828,736 shares of our common stock as an owner of APAL), Advent International GPE VII‑D Limited Partnership (which indirectly beneficially owns 1,516,702 shares of our common stock as an owner of APAL), Advent International GPE VII‑F Limited Partnership (which indirectly beneficially owns 533,815 shares of our common stock as an owner of APAL), and Advent International GPE VII‑G Limited Partnership (which indirectly beneficially owns 533,815 shares of our common stock as an owner of APAL), for each of which GPE VII GP (Delaware) Limited Partnership is the general partner, for which in turn AIGPE VII LLC is the general partner, for which in turn AIC is the manager. AIC is managed by a board of directors composed of more than three members. |
| |
(4)
| Based on a Schedule 13G/A filed by FMR LLC with the SEC on February 12, 2016. Fidelity Management & Research Company, a wholly-owned subsidiary of FMR LLC, Fidelity Growth Company Fund, and Abigail P. Johnson may each be deemed to beneficially own the shares held by FMR LLC. |
| |
(5)
| Based on a Schedule 13G/A filed by Capital Research Global Investors with the SEC on February 16, 2016. |
| |
(6)
| Based on a Schedule 13G/A filed by Manning & Napier Advisors, LLC with the SEC on January 12, 2016. |
| |
(7)
| Based on a Schedule 13G filed by The Vanguard Group, Inc. with the SEC on February 10, 2016. |
| |
(8)
| Based on a Schedule 13G filed by Lone Pine Capital LLC and Stephen F. Mandel, Jr., with the SEC on January 25, 2016. |
| |
(9)
| Includes 27,357 shares of our common stock issuable upon exercise of options held by Mr. Potdevin that may be exercised within 60 days of April 1, 2016. |
| |
(10)
| Includes 42,106 shares of our common stock issuable upon exercise of options held by Mr. Casey that may be exercised within 60 days of April 1, 2016. |
| |
(11)
| Includes 4,013 shares held directly by Mr. Collins and 9,745 shares indirectly beneficially owned as a limited partner of Advent Partners GPE VII-B Cayman Limited Partnership and Advent Partners GPE VII 2014 Limited Partnership, which, in turn, each indirectly beneficially own shares through Advent Puma Acquisition Limited. |
| |
(12)
| Includes 27,204 shares of our common stock issuable upon exercise of options held by Ms. Costin that may be exercised within 60 days of April 1, 2016. |
| |
(13)
| Ms. Henry joined our board of directors on January 29, 2016. |
| |
(14)
| Includes 14,013 shares held directly by Mr. Mussafer and 36,059 shares indirectly beneficially owned as a limited partner of Advent Partners GPE VII-B Cayman Limited Partnership which, in turn, indirectly beneficially owns the shares through Advent Puma Acquisition Limited. |
| |
(15)
| Includes 3,808 shares of our common stock issuable upon exercise of options held by Ms. Pitcher that may be exercised within 60 days of April 1, 2016. |
| |
(16)
| Includes 1,214 shares of our common stock issuable upon exercise of options held by Ms. White that may be exercised within 60 days of April 1, 2016. |
| |
(17)
| Includes 1,312 shares of our common stock issuable upon exercise of options held by Mr. Haselden that may be exercised within 60 days of April 1, 2016. |
| |
(18)
| Includes 1,053 shares of our common stock issuable upon exercise of options held by Mr. Holman that may be exercised within 60 days of April 1, 2016. |
| |
(19)
| Includes 1,970 shares of our common stock issuable upon exercise of options held by Mr. Stump that may be exercised within 60 days of April 1, 2016. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who beneficially own more than 10% of our Common Stock to file initial reports of beneficial ownership and reports of changes in beneficial ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by such person.
Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater-than-10% stockholders were complied with for fiscal 2015, except that Steven J. Collins filed a late report in June 2015 with respect to all shares of our common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. The number of shares beneficially owned represents common shares held as of April 1, 2020, and shares of our common stock issuable upon exercise of options or restricted stock units that have vested or will vest within 60 days.
(4)Percentages are calculated on the basis of 130,531,547 shares of our common stock and special voting stock outstanding as of April 1, 2021, except that any additional shares of our common stock that a restricted share award.person has the right to acquire within 60 days of April 1, 2021 were deemed to be outstanding for purposes of calculating that person's beneficial ownership.
(5)Based on a Schedule 13G/A filed by FMR LLC with the SEC on February 28, 2021 (6)Based on Schedule 13D/A filed by Mr. Wilson with the SEC on October 9, 2020.
(7)Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 10, 2021.
(8)Based on a Schedule 13G/A filed by T. Rowe Price Associates, Inc., with the SEC on February 16, 2021.
(9)Based on a Schedule 13G filed by BlackRock, Inc. with the SEC on January 29, 2021.
(10)Based on a Schedule 13G filed by Prudential Financial, Inc. with the SEC on February 9, 2021.
(11)Based on a Schedule 13G filed by Jennison Associates LLC with the SEC on February 10, 2020.
(12)Includes 11,101 shares of common stock held by The Kelly-White Living Trust.
(13)Mr. Guido is our former chief operating officer, who resigned on May 8, 2020. We have no information regarding Mr. Guido's holdings of our company. April 1, 2020.
TRANSACTION OF OTHER BUSINESS
At the date of this proxy statement, the board of directors knows of no other business that will be conducted at the 20162021 annual meeting other than as described in this proxy statement. If any other matter or matters are properly brought before the meeting or any adjournment or postponement of the meeting, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their best judgment.
STOCKHOLDER
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT THE 20172022 ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS
StockholderShareholder proposals to be included in our proxy statement for our 20172022 annual meeting must be received by the Corporate Secretary of lululemoncompany secretary no later than December 26, 2016.31, 2021. Notices must be delivered to the Corporate Secretarycompany secretary at our executive offices at 1818 Cornwall Avenue, Vancouver, British Columbia, V6J 1C7. If we change the date of the 20172022 annual meeting by more than 30 days from June 2, 2017,9, 2022, then the deadline will be the later of the 90th day prior to the 20172022 annual meeting or the 10th day following the day on which we first publicly announce the date of the 20172022 annual meeting.
StockholdersShareholders wishing to submit a proposal (including a nomination for election as a director) for consideration at the 20172022 annual meeting must do so in accordance with the terms of the advance notice provisions in our bylaws. These advance notice provisions require that, among other things, the stockholdershareholder give written notice to the Corporate Secretarycompany secretary of lululemon no later than the 120th day prior to the first anniversary of the date on which we first mailed this proxy statement. For the 20172022 annual meeting, a stockholder'sshareholder's notice of a proposal will be considered timely if received no later than December 26, 2016.31, 2021. Notices must be delivered to the Corporate Secretarycompany secretary at our executive offices at 1818 Cornwall Avenue, Vancouver, British Columbia, V6J 1C7. If we change the date of the 20172022 annual meeting by more than 30 days from June 2, 2017,9, 2022, then the deadline will be the later of the 90th day prior to the 20172022 annual meeting or the 10th day following the day on which we first publicly announce the date of the 20172022 annual meeting.
ANNUAL REPORT AND FORM 10-K
A copy of our combined annual report to stockholdersshareholders and Annual Report on Form 10-K for the fiscal year ended January 31, 20162021 will be mailed with this proxy statement to those stockholdersshareholders that elect to receive a paper copy of the proxy materials. For those stockholdersshareholders that receive the notice, this proxy statement and our 2015 annual2020 Annual report are available at www.proxyvote.com.
| | |
|
|
| By order of the board of directors, |
|
/s/ Laurent PotdevinCalvin McDonald |
Laurent PotdevinCalvin McDonald |
| Chief Executive Officer |
April 15, 201627, 2021
Whether or not you plan to attend the annual meeting, please vote your shares via the Internet or telephone, as described in the accompanying materials, as soonsoon as possible to assureensure that your shares are represented at the meeting, or, if you elect to receive a paper copy of the proxy card by mail, you may mark, sign and date the proxy card and return it in the enclosed postage-paid envelope. If you attend the virtual meeting you will, of course, have the right to revoke the proxy and vote your shares electronically at the meeting.
