UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant☐
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☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
FOOT LOCKER, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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TO INSPIRE AND EMPOWER 2022 PROXY STATEMENT
FOOT LOCKER, INC. ENHANCED ITS POSITIONING IN NORTH AMERICA WITH ACQUISITION OF WSS, AND ACCELERATED ASIA-PACIFIC EXPANSION WITH ACQUISITION OF ATMOS
is an athletically-inspired retailer focused on the large and rapidly growing Hispanic consumer demographic, operating a fleet of off-mall stores in key markets across California, Texas, Arizona, and Nevada. WSS’s community-driven business benefits from deep relationships with customers– with approximately 80% of its sales coming from customers who are members of its loyalty program. Foot Locker, Inc. benefits from WSS’s differentiated market position and complementary customer base and real estate portfolio. WSS’s assortment of classic styles further diversifies Foot Locker, Inc.’s product mix, enabling the Company to serve a broader range of consumer needs across price points.
is a culturally-connected brand featuring premium sneakers and apparel, an exclusive in-house label, collaborative relationships with leading vendors in the sneaker ecosystem, experiential stores, and a robust omni-channel platform. This acquisition accelerates Foot Locker, Inc.’s global reach with a highly-strategic foothold in Japan, extends the Company’s premium and top-tier offerings, and increases its digital penetration.
330 West 34th Street
New York, New York 10001
April 12, 2019
Dear Fellow Shareholders:
Last year, I highlighted how our customers’ rapidly-changing preferences and shopping behaviors–fueled by access to information, influences, and ideas from around the world–were challenging for our Company and the broader retail industry. This year, I am pleased to report that, by focusing on our commitment to elevate the customer experience across each of our channels and leveraging our strategic brand partnerships, we continued to differentiate our business and build positive momentum through each quarter of 2018. In 2019, we will continue to build on our strengths and seize opportunities to evolve our business by developing our internal assets and expanding into new markets.
Everything we do starts with the customer. Our new strategic framework is built on knowing, engaging, and serving our customers–wherever and however they want to interact with us–in store or online. By executing against this framework, we believe we will have the focus and tools to achieve our four key strategic imperatives:
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FORWARD-LOOKING STATEMENTS | iii | ||
NOTICE OF ANNUAL MEETING | 1 | ||
MESSAGE FROM OUR CHAIRMAN AND CEO | 3 | ||
ABOUT FOOT LOCKER, INC. | 5 | ||
Inspire and Empower Youth Culture | 5 | ||
Our Strategic Imperatives | 5 | ||
Our ESG Program | 6 | ||
Our Climate Stewardship | 6 | ||
Our Fiscal 2021 Highlights | 7 | ||
Emerging Stronger from the COVID-19 Pandemic | 7 | ||
Learn More About Our Company | 7 | ||
VOTING ROADMAP | 8 | ||
RECOGNITION | 13 | ||
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Director Qualifications |
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Director Nominees at a Glance |
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Director Nominees’ Skillset Matrix |
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Welcome to the Foot Locker, Inc. 2019 Annual Meeting of Shareholders
We continuously look for new and better ways to foster a diverse and inclusive work environment, engage our surrounding communities, improve employee safety, and minimize our environmental impact, all while creating value for our shareholders.
The Notice of 2019 Annual Meeting of Shareholders and Proxy Statement contain details of the business to be conducted at the 2019 Annual Meeting.
Your vote is very important to us, so regardless of whether you attend the meeting, please vote your shares.
This is an exciting time for Foot Locker, Inc. We are proud of what we accomplished in 2018, but we are just getting started on our new journey toinspire and empower youth culture. By focusing on our strategic imperatives, leveraging our global presence, and putting the customer at the center of everything we do, we believe we will build upon last year’s momentum and deliver against our updated long-term goals. I look forward to sharing our success with each of you at the 2019 Annual Meeting.
Sincerely,
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Compensation Discussion and
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330 West 34th Street
New York, New York 10001
2022PROXY STATEMENT | ![]()
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| Foot Locker Puerto Rico 1165(e) Plan, as amended and restated |
401(k) Plan | Foot Locker 401(k) Plan, as amended and restated |
Annual Incentive Plan | Foot Locker Executive Incentive Cash Compensation Plan |
Annual Meeting | 2022 Annual Meeting of Shareholders |
Annual Report | Annual Report on Form 10-K for the year ended January 29, 2022 |
Board | Board of Directors |
CACM | Consistently Applied Compensation Measure |
CAP | Compensation Advisory Partners |
CCPA | California Consumer Privacy Act |
CD&A | Compensation Discussion and Analysis |
Common Stock | Foot Locker’s Common Stock, par value $0.01 per share |
Company/Foot Locker | Foot Locker, Inc. |
Corporate Headquarters | 330 West New York, New York 10001 |
DIBs | Diversity, Inclusion, and Belonging |
DSU | Deferred Stock Unit (an accounting equivalent of one share of Common Stock) |
DTC | Direct-to-Customer |
EDT | Eastern Daylight Time |
ERG | Employee Resource Group |
ERISA | Employee Retirement Income Security Act of 1974, as amended |
ESG | Environmental, Social, and Governance |
ESPP | 2013 Foot Locker Employees Stock Purchase Plan |
Excess Cash Plan | Foot Locker Excess Cash Balance Plan |
Excess Savings Plan | Foot Locker Excess Savings Plan |
Exchange Act | Securities Exchange Act of 1934, as amended |
FASB | Financial Accounting Standards Board |
FDRA | Footwear Distributors and Retailers of America |
Finance Committee | Finance and Investment Oversight Committee |
GAAP | U.S. Generally Accepted Accounting Principles |
GDPR | EU General Data Protection Regulation |
GHG | Greenhouse Gas |
Human Capital Committee | Human Capital and Compensation Committee |
IAP | International Assignment Policy |
Interest Account | a hypothetical investment account bearing interest at the rate of 120% of the applicable federal long-term rate, compounded annually, and set as of the first day of each plan year |
IRC | Internal Revenue Code of 1986, as amended |
LEED | Leading in Education and Economic Development |
LTI | Foot Locker Long-Term Incentive Program |
NACD | National Association of Corporate Directors |
NEO | Named Executive Officer |
Notice | Notice of Internet Availability of Proxy Materials |
NPS | Net Promoter Score |
NYSE | New York Stock Exchange |
PCAOB | Public Company Accounting Oversight Board |
PSU | Performance Stock Unit |
Record Date | March 21, 2022 |
Responsibility Committee | Nominating and Corporate Responsibility Committee |
Retirement Plan | Foot Locker Retirement Plan, as amended and restated |
RILA | Retail Industry Leaders Association |
ROIC | Return on Invested Capital |
RSU | Restricted Stock Unit (time-based) |
SASB | Sustainability Accounting Standards Board |
SEC | U.S. Securities and Exchange Commission |
SERP | Foot Locker Supplemental Executive Retirement Plan, as amended and restated |
Stock Incentive Plan | Foot Locker 2007 Stock Incentive Plan, as amended and restated |
TCFD | Task Force on Climate-related Financial Disclosures |
TSR | Total Shareholder Return |
VIF | Voting Instruction Form |
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| Foot Locker, Inc. |
This Proxy Statement contains forward-looking statements within the meaning of the U.S. securities laws. Other than statements of historical facts, all statements that address activities, events, or developments that the Company anticipates will or may occur in the future, including, but not limited to, future merchandise and vendor mix, real estate opportunities, acquisitions, strategic partnerships, capital expenditures, dividend payments, share repurchases, strategic plans, financial objectives, growth of the Company’s business and operations, and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors, which are detailed in the Company’s filings with the SEC.
These forward-looking statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. For additional discussion on risks and uncertainties that may affect forward-looking statements, see “Risk Factors” disclosed in the Annual Report and subsequent filings with the SEC. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise. Website references throughout this Proxy Statement are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this Proxy Statement.
2022PROXY STATEMENT | ![]() iii |
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![]() | DATE AND TIME May 18, 2022 at 9:00 a.m. EDT | ![]() | VIRTUAL MEETING SITE virtualshareholdermeeting.com/FL2022 | ![]() | RECORD DATE Shareholders of record as of March |
Items of Business
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Transact such other business as may properly come before the meeting and at any adjournment or postponement of the meeting
Proxy Voting
You may vote using any of the following methods:
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All shares that have been properly voted and not revoked will be voted at the Annual Meeting. If you sign and return a proxy card but do not give voting instructions, the shares represented by that proxy card will be voted as recommended by the Board.
Your vote is very important to us. Please exercisevote your right to vote.shares.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 22, 2019ITEMS OF BUSINESS
The Company’s Proxy Statement and 2018 Annual Report on Form 10-K are available atmaterials.proxyvote.com/344849.
April 12, 2019
Sheilagh M. Clarke
Senior Vice President,
General Counsel and Secretary
Proxies are being solicited by the Board of Directors of Foot Locker, Inc. (NYSE: FL) (“Foot Locker,” the “Company,” “we,” “our,” or “us”) to be voted at our 2019 Annual Meeting. As this is a summary of our Proxy Statement, please refer to the complete Proxy Statement for more complete information.
2019 Annual Meeting of Shareholders
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On or about April 12, 2019, we started mailing a Notice Regarding the Internet Availability of Proxy Materials to our shareholders.
Director Nominees
Ten directors are standing for election at the 2019 Annual Meeting for one-year terms. The table below provides summary information about each of the nominees for director. See pages 6 through 12 for additional information about each nominee and pages 25 through 27 for additional information about the Committees of the Board.
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Proxy Statement Summary
Board Snapshot
Attendance
Over97%Attendance of Directorsat Board and Committee Meetings in 2018
Independence
9out of10directors are independent
All directors are independent, except the CEO
Diversity
Our directors represent a range of backgrounds and experience. The majority are women or ethnically diverse. Our Nominating and Corporate Governance Committee (the “Nominating and Governance Committee”) is focused on ensuring continued diversity on the Board—in terms of gender, age, ethnicity, skills, business experience, service on our Board and the boards of other organizations, and viewpoints—during refreshment activities by requiring that candidate pools include diverse individuals meeting the recruitment criteria.
Tenure
Directors with varied tenure contribute to a range of perspectives and ensure we transition knowledge and experience from longer-serving members to those newer to our Board. We have a good mix of new and longer-serving directors.
Refreshment
3 New Directors Added Over Past Five Years
3 Directors Retired Over Past Five Years
Age
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Proxy Statement Summary
Environmental, Social, and Governance Highlights
The Company and the Board are focused on corporate social responsibility. We continuously look for new and better ways to foster a diverse and inclusive work environment, engage our surrounding communities, improve employee safety, and minimize our environmental impact, all while creating value for our shareholders. Below are some recent highlights of our diversity and sustainability initiatives.
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Transact such other business as may properly come before the Annual Meeting and at any adjournment or postponement of the meeting | ||||||||||
2022PROXY STATEMENT | ![]() 1 |
NOTICE OF ANNUAL MEETING
PROXY VOTING
You may vote using any of the following methods:
TELEPHONE | ![]() | |
SCANNING | You may scan the QR Code provided to you to vote your shares through the internet with your mobile device. Internet voting is available 24 hours per day and will be accessible until 11:59 p.m. EDT on May 17, 2022. You will be able to confirm that the system has properly recorded your vote. If you scan your QR code to vote, you do NOT need to return a proxy card or VIF. | |
AT THE | You may vote at the virtual Annual Meeting using the 16-digit control number included on your Notice, proxy card, and VIF that accompanied your proxy materials. | |
INTERNET | ||
| If you received printed copies of | |
APP | You may vote your shares by using the ProxyVote app. Download the app from the App Store or Google Play, scan or enter your control number, and | |
* U.S. workforce represents 74%
Important Notice Regarding the Availability of global workforce.Proxy Materials for the Annual Meeting to be Held on May 18, 2022
The Company’s Proxy Statement and Annual Report are available at materials.proxyvote.com/344849.
April 8, 2022
SHEILAGH M. CLARKE
Executive Vice President, General Counsel and Secretary
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Proxy Statement Summary
Recognition
For additional information, seeEnvironmental, Social, and Governance Highlightsbeginning on page 20.
Fiscal 2018 Results
We built positive momentum and improved our financial results in 2018. Highlights include the following:
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| Foot Locker, Inc. |
DEAR FELLOW SHAREHOLDERS:
Despite the many challenges we confronted and are continuing to experience—including impacts related to the COVID-19 pandemic, supply chain disruption, inflationary pressures, and an evolving geopolitical environment—we delivered record performance in 2021, which reflects the ongoing momentum we have built in our business. I believe the strategic decisions we have made throughout this period have put the Company in a position of strength to confront certain headwinds in the marketplace, including accelerated strategic shifts to DTC by our vendors, and succeed over the long term by creating shareholder value. Let me share with you a few recent highlights:
► | Merchandise and Vendor Diversification. Our journey to diversify our mix of business and expand our reach as a house of brands is ongoing. We made significant progress diversifying our brands, categories, and channels in 2021. We also expanded our customer base across demographics and high-growth geographies with the acquisitions of WSS and atmos. We made investments in our omni-channel platform to advance our DTC offense and expanded our private label merchandise offerings. We will accelerate these initiatives and others in 2022 as a part of our long-term strategy to strengthen our position at the intersection of youth culture, sports and lifestyle, and the sneaker community. |
► | Investments in Growth. We added two high-growth companies–WSS and atmos–to the Foot Locker, Inc. family in 2021, each with its own differentiated strengths. These strategic acquisitions expand our customer base and geographic reach, strengthen our store footprint, and further diversify our product mix across consumers and price points. WSS, which we expect to double to approximately $1 billion of sales by 2024, gives us a strong off-mall presence in fast-growing markets with a full family offering and a special connection to the Hispanic community. atmos, which we expect to grow by 30% to approximately $300 million of sales over the next three years, provides us with a foothold in Japan and a key launching point into the rest of Asia with a digitally-led business model that combines premium product and creative collaborations to create excitement around the banner. |
► | Climate Stewardship. Management and the Board have established ESG as a priority for the Company. We are committed to helping our planet remain a sustainable home for current and future generations. Unabated climate change presents risks for our business, industry, and society, but through climate stewardship, we may unlock opportunities to innovate and strengthen our relationships with our customers and the communities we serve. We recently announced our ambition to achieve net zero GHG emissions by 2050 or sooner, in alignment with climate scientists’ recommendations to transition toward a net zero state and avoid the worst impacts of climate change. We have also committed to setting a science-based target in line with the criteria established by the Science Based Target initiative (SBTi) and report our progress against certain metrics regarding our GHG emissions annually in our Impact Report, which is available at investors.footlocker-inc.com/impactreport, and is aligned with the reporting disclosure guidance of the SASB industry standards and the TCFD recommendations. This announcement marks an important milestone in our ESG journey. As the Company looks to fiscal 2022 and beyond, we are committed to building on this progress and strengthening our vision for a more sustainable world. To learn more about our efforts to power a more sustainable future, see ESG on page 96, and our Global Environmental and Climate Change Statement, which is available at investors.footlocker-inc.com/climate. |
► | Human Rights. Our human capital is our most important asset. Protecting our team members, our customers, and the communities we serve is one of the most pressing challenges we face. We are proud to create jobs and secure livelihoods for our team members, provide products and engagement for our customers, support community development, and provide tax revenue for governments around the world to invest in the well-being of their |
“
We know that our customer demands choice across a variety of brands and categories, so we continue to work to broaden our selection, including leaning into brands where we are under-penetrated, introducing new brand partners, and developing our own private labels.”
people. Specifically, we have policies in place to ensure that we and our partners maintain work environments that respect and support human rights for everyone in our value chain around the world. This is a public good for all stakeholders. For additional information regarding our human rights efforts, see ESG on page 96, our Impact Report, which is available at investors.footlocker-inc.com/impactreport, our Global Human Rights Statement, which is available at investors.footlocker-inc.com/ humanrights, and our Global Sourcing Guidelines, which are available at investors.footlocker-inc.com/gsg.
► | Organizational Enhancements. In November 2021, we made certain organizational enhancements, including elevating Frank Bracken to the new role of Executive Vice President and Chief Operating Officer. The addition of a Chief Operating Officer creates a more streamlined and agile organizational structure that builds on the success of our geo-focused growth strategy. We believe we will be in a stronger position to address new and emerging opportunities and to grow our connectivity with our consumers and the communities we serve. In March 2022, we recruited Samantha Lomow from outside the Company as our first President, Global Brands, reporting to Frank, to oversee our global brand portfolio and operating divisions across North America, EMEA, and APAC. Also, as part of a planned succession strategy, in April 2021, we recruited Andrew Page from outside the Company as Executive Vice President and Chief Financial Officer, succeeding Lauren Peters, who retired from the Company. Each of these organizational enhancements underscores our focus on aligning our team to drive productivity while we continue to pursue our global growth agenda. |
► | Board Refreshment. I want to thank Matt McKenna who will be retiring from the Board at the Annual Meeting after serving for 16 years. Matt’s extensive financial experience has been an invaluable source of insights, and I can say on behalf of the Board and myself that he will be truly missed. I also welcome Gina Drosos who joined our Board in February. Gina is a dynamic and transformative leader with an impressive background and track record. She embodies what we seek from our directors–an agile mindset, proven leadership, and innovative thinking. |
In addition to this Proxy Statement, I encourage you to review our Annual Report, which is available at investors.footlocker-inc.com/ar.
The Notice and this Proxy Statement each contains details of the business to be conducted at the Annual Meeting. Your vote is very important to us, so please vote your shares.
I am incredibly grateful to our team members, Board, customers, vendor partners, and shareholders.
Thank you for your support of our Company. I ask that you carefully consider the information in this Proxy Statement related to the proposals.
Sincerely,
RICHARD A. JOHNSON
Chairman and Chief Executive Officer
Learn more about the Board’s highlights from 2021 from our Lead Independent Director on page 28
INSPIRE AND EMPOWER YOUTH CULTURE
Foot Locker, Inc. (NYSE: FL) leads the celebration of sneaker and youth culture around the globe through a portfolio of brands, including Foot Locker, Kids Foot Locker, Champs Sports, Eastbay, atmos, WSS, Footaction, and Sidestep, including 2,858 operated stores, as well as websites and mobile apps, in 28 countries across North America, Europe, Asia, Australia, and New Zealand, in addition to 142 franchised stores in the Middle East and Asia.
We have established strategic imperatives for sustained performance centered around our customers:
2022PROXY STATEMENT | ![]() 5 |
ABOUT FOOT LOCKER, INC.
T
hereManagement and the Board understand that how we achieve our purpose is just as important as what results we achieve. We have long established ESG as a priority for the Company and are continuing to improve the environmental and social impacts of our business, measure the impacts we are making, and communicate with and drive accountability to our stakeholders. Our global ESG program is focused on four pillars:
To learn more about our global ESG program, see ESG on page 96, and our Impact Report, which is presented consistent with the SASB reporting standards and TCFD reporting framework and is available at investors.footlocker-inc.com/impactreport.
The Company recently announced its ambition to achieve net zero GHG emissions by 2050 or sooner.
For additional information regarding the Company’s efforts to power a more sustainable future, see ESG on page 96, the Company’s Impact Report, which is aligned with the reporting disclosure guidance of the SASB industry standards and the TCFD recommendations and is available at investors.footlocker-inc.com/impactreport, and the Company’s Global Environmental and Climate Change Statement, which is available at investors.footlocker-inc.com/climate.
![]() 6 | Foot Locker, Inc. |
ABOUT FOOT LOCKER, INC.
Despite the many challenges we confronted and are continuing to experience—including the COVID-19 pandemic, supply chain disruption, inflationary pressures, and an evolving geopolitical environment—we delivered record performance in 2021, which reflects the ongoing momentum we have built in our business. Highlights include the following:
(1) | A reconciliation to GAAP is provided beginning on page 21 of our Annual Report, which is available at investors.footlocker-inc.com/ar. |
COVID-19 PANDEMIC
We recognize the human tragedy of the COVID-19 pandemic. Our foremost priority during the pandemic has been the health, safety, and security of our team members, our customers, and the communities we serve. Our approach is grounded in our Company’s purpose.
You can learn more about the Company by visiting footlocker.com/corp. We also encourage you to read our Annual Report, which is available at investors.footlocker-inc.com/ar.
2022PROXY STATEMENT | ![]() 7 |
DEMOGRAPHICS
TENURE
► | 7 years (Median) |
► | Directors with varied tenure contribute to a range of perspectives and ensure we transition knowledge and experience from longer-serving members to those newer to our Board. We have a good mix of new and longer-tenured directors. |
AGE
► | 63 years (Median) |
DIVERSITY
► | Our director nominees represent a diverse range of backgrounds—in terms of gender, age, ethnicity, skills, and business and board experience—with an equally diverse range of perspectives. What we share is a common desire to support and oversee management in achieving the Company’s purpose to inspire and empower youth culture. |
► | 70% of the director nominees are women or persons of color. |
► | 60% of our committees are chaired by women or persons of color. |
► | Our Responsibility Committee is focused on ensuring continued diversity on the Board during refreshment activities by requiring that candidate pools include diverse individuals meeting the relevant recruitment criteria. |
SKILLS AND EXPERIENCES
We believe that our slate of director nominees possesses the appropriate mix of diversity in terms of skills, business and Board experience, and viewpoints.
![]() 8 | Foot Locker, Inc. |
VOTING ROADMAP
PAY-FOR-PERFORMANCE
The centerpiece of our compensation program is our pay-for-performance philosophy that aligns compensation payouts with the achievements of our annual operating plan and long-term strategy, and consequently shareholder value. This is showcased at senior levels of the Company—particularly the CEO—for which most compensation is tied to the Company’s operating and stock performance, as described below.
Factor | Description | |
Performance-Based | A significant proportion of the CEO’s compensation is performance-based. | |
Challenging Goals | Recent Annual Incentive Plan and LTI payouts underscore our pay-for-performance culture. For example, only twice in the past five years has the Annual Incentive Plan paid out greater than target and three of the past five PSU awards were not earned and paid out at 0%. | |
Formulaic | Our Annual Incentive Plan and LTI payouts are formulaically determined based on performance against challenging financial and operating goals. | |
Lower Realized Pay | The CEO’s five-year realized pay is expected to be lower than his five-year target compensation. | |
Peer Benchmarked | We utilize an objective set of criteria to determine peer companies and position CEO pay at the peer group median. | |
Reasonable | 2021 compensation for newly-appointed and outgoing executives was reasonable. | |
Responsive to Say-on-Pay Vote | Our Say-on-Pay support has been strong in recent years. | |
Compensation Mix | Beginning with LTI awards granted in 2021, we adopted a consistent mix of PSU awards (60%), stock option awards (20%), and RSU awards (20%). |
Recent Annual Incentive Plan and LTI payouts underscore our pay-for-performance culture:
ANNUAL INCENTIVE PLAN | PSU AWARDS |
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2022PROXY STATEMENT | ![]() 9 |
VOTING ROADMAP
TARGET COMPENSATION VS. REALIZED PAY(1)
Our executives’ realized pay over the past five years further reinforces our pay-for-performance philosophy. Failure to achieve the challenging threshold performance goals set for our Annual Incentive Plan awards and PSU awards results in no payout earned. Also, a decrease in the Company’s stock price results in a decrease in the value of previously-awarded stock option awards—potentially to $0—and no dilution to shareholders, as well as a decrease in the value of previously-awarded RSU awards. When our stock price increases and generates positive returns for our shareholders, the increase impacts an executive’s realized pay during the present fiscal year and for prior fiscal years during which the executive received equity awards that are held or still subject to vesting. Accordingly, a significant portion of our NEOs’ compensation is closely linked to the performance of our stock over time, motivating our executives to generate positive returns for shareholders.
The following chart demonstrates the relationship between the target and realized values of our CEO’s compensation for the past five years:
(1) | For each year, these amounts reflect the CEO’s base salary paid, Annual Incentive Plan payouts paid, values of PSU awards earned, stock option award tranches vesting during the year, and RSU awards vesting during the year. For 2020, the CEO’s realized pay includes the value of a one-time Accelerate Future Growth award earned. |
COMPENSATION MIX
The Human Capital Committee seeks to align the compensation program with both our business strategy and our shareholders’ interests. In order to achieve these objectives, our executive compensation program includes both a mix of annual and long-term, as well as cash and equity, compensation. As shown in the charts below, for 2021, 90% of the CEO’s target compensation mix, and 72%, on average, of the remaining NEOs’ target compensation mix, was performance based.
CEO’s 2021 TARGET COMPENSATION | AVERAGE OF REMAINING NEOs’ 2021 |
TARGET COMPENSATION | |
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ANNUAL INCENTIVE PLAN | LTI PERFORMANCE METRICS |
PERFORMANCE METRICS | |
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![]() 10 | Foot Locker, Inc. |
VOTING ROADMAP
On or about April 8, 2022, we started mailing a Notice to our shareholders.
Proxies are being solicited by the Board to be voted at our Annual Meeting.
2022PROXY STATEMENT | ![]() 11 |
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There are currently 1011 directors on our Board. TheMr. McKenna will be retiring when his term expires at the conclusion of the Annual Meeting, and the Board has fixed the number of directors at 10.10 effective at such time. All current directors other than Mr. McKenna are standing for election for a one-year term at this meeting.
We have refreshed our Board over the past five years, as threefive highly-qualified directors were added to the Board and, threeas of the Annual Meeting, five directors retired.will have retired during that time period. We believe that the Board possesses the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business and Board experience, service on ourand viewpoints.
Our Responsibility Committee is charged with recommending director candidates to fill current and anticipated Board vacancies. The Responsibility Committee identifies and evaluates potential candidates from recommendations from the Company’s directors, management, shareholders, and other outside sources, including professional search firms. In evaluating proposed candidates, the Responsibility Committee may review their résumés, obtain references, and conduct personal interviews. The Responsibility Committee considers, among other factors, the Board’s current and future needs for specific skills and the boardscandidate’s experience, leadership qualities, integrity, diversity, ability to exercise judgment, independence, and ability to make the appropriate time commitment to the Board. The Responsibility Committee strives to ensure the Board has a rich mix of relevant skills, diversity, and experiences to address the Company’s needs.
In 2021, the Responsibility Committee conducted a search to identify and recruit an independent director candidate based on specific criteria it previously established, including CEO experience in the specialty retail sector and expertise requirements under the NYSE rules to serve as an audit committee member. The Responsibility Committee reviewed its findings with the Board. In conducting its search, the Responsibility Committee collected names of potential candidates from the Company’s directors and engaged a third-party search firm to identify and recruit qualified candidates. After reviewing the qualifications of the potential pool of candidates and narrowing the field to a few candidates, the Lead Independent Director and Responsibility Committee Chair each interviewed the candidates, the Chairman reviewed the finalists, and the full Board met the finalist. Based on the Responsibility Committee’s review, the candidates’ résumés, and the other organizations,directors’ and viewpoints.Board’s interviews with the candidates, the Responsibility Committee recommended and the Board approved the election of Virginia C. Drosos, who was identified by the third-party search firm.
Maxine Clark,Virginia C. Drosos, Alan D. Feldman, Richard A. Johnson, Guillermo G. Marmol, Matthew M. McKenna,Darlene Nicosia, Steven Oakland, Ulice Payne, Jr., Cheryl Nido Turpin, Kimberly Underhill, Tristan Walker, and Dona D. Young will be considered for election as directors to serve for one-year terms expiring at the 20202023 Annual Meeting. Each nominee has been nominated by the Board for election and has consented to serve. If, prior to the 2019 Annual Meeting, any nominee is unable to serve, then the persons designated as proxies for this meeting (Sheilagh(Andrew E. Page, Sheilagh M. Clarke, and John A. Maurer, and Lauren B. Peters)Maurer) will have full discretion to vote for another person to serve as a director in place of that nominee, or the Board may reduce the size of the Board.its size.
Director QualificationsDIRECTOR QUALIFICATIONS
The Nominating and GovernanceResponsibility Committee reviewed and updatedevaluated the skills, experience, and qualifications catalogued under the Director Nominees’ Skillset Matrix on pages 23 through 24, and demonstrated by the director skill-set matrixnominees, in light of the Company’s long-term strategic plan and evaluated the directors’ skills, experience, and qualifications under the updated matrix, which is shown beginning on page 11.plan.
The Board, acting through the Nominating and GovernanceResponsibility Committee, considers its members, including those directors being nominated for reelection to the Board at the 2019 Annual Meeting, to be highly qualified for service on the Board due to a variety of factors reflected in each director’s education, areas of expertise, and experience serving on theother organizations’ boards of directors of other organizations during the past five years. Generally, the Board seeks individuals with broad-based experience and the background, judgment, independence, and integrity to represent the shareholders in overseeing the Company’s management in their operation of the business. Within this framework, specific items relevant to the Board’s determination for each director are listed in each director’s biographical information beginning on page 6.18. The ages shown are as of April 12, 2019.8, 2022. There are no family relationships among our directors or executive officers.
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Proposal 1: Election OF Directors DIRECTOR NOMINEES AT A GLANCE Ten directors are standing for election at the Annual Meeting for one-year terms. Matthew M. McKenna will be retiring from the Board when his term expires at the conclusion of the Annual Meeting. The table below provides summary information about each of the nominees for director. See pages 18 through 22 for additional information about each nominee and pages 41 through 42 for additional information about the committees. TENURE 7 Median 3 0-2 years 4 3-8 years 3 >9 years Directors with varied tenure contribute to a range of perspectives and ensure we transition knowledge and experience from longer-serving members to those newer to our Board. We have a good mix of new and longer-tenured directors. AGE 63 Median 4 37-59 5 60-69 1 _70 ATTENDANCE 99% Over 99% aggregate attendance of directors at Board and committee meetings in 2021 Alan D. Feldman F H Independent Retired Chairman, President and Chief Executive Officer of Midas, Inc. Age: 70 Director Since: 2005 Other Public Company Board: John Bean Technologies Corporation Virginia C. Drosos A F Independent Chief Executive Officer of Signet Jewelers Limited Age: 59 Director Since: 2022 Other Public Company Board: Signet Jewelers Limited Darlene Nicosia A H Independent President, Canada and Northeast U.S., North America Operating Unit of The Coca-Cola Company Age: 54 Director Since: 2020 Richard A. Johnson E Chairman, President and Chief Executive Officer of Foot Locker, Inc. Age: 64 Director Since: 2014 Other Public Company Board: H&R Block Inc. Guillermo G. Marmol A E H Independent President of Marmol & Associates Age: 69 Director Since: 2011 16INDEPENDENCE director nominees are independent. All director nominees are independent, except the CEO.
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Proposal 1: Election OF Directors COMMITTEES A Audit E Executive F Finance H Human Capital R Responsibility Committee Chair DIVERSITY Our director nominees represent a diverse range of backgrounds—in terms of gender, age, ethnicity, skills, and business and board experience—with an equally diverse range of perspectives. What we share is a common desire to support management in achieving the Company’s purpose to inspire and empower youth culture. 70% of the director nominees are women or persons of color 60% of committees are chaired by women or persons of color Hispanic/ Latinx African American/ Black Women 0 6 2 4 Our Responsibility Committee is focused on ensuring continued diversity on the Board during refreshment activities by requiring that candidate pools include diverse individuals meeting the recruitment criteria. Kimberly Underhill E H R Independent Senior Advisor of Boston Consulting Group Age: 57 Director Since: 2016 Tristan Walker F R Independent Founder and Chief Executive Officer of Walker & Company Brands Inc. Managing Member of Heirloom Management Company, LLC Age: 37 Director Since: 2020 Other Public Company Board: Shake Shack Inc. Ulice Payne, Jr. A E R Independent President of Cyber-Athletix, LLC President and Managing Member of Addison-Clifton, LLC Age: 66 Director Since: 2016 Other Public Company Boards: ManpowerGroup Inc. WEC Energy Group, Inc. REFRESHMENT Over past years new directors added and, as of 2022 Annual Meeting, directors will have retired Foot Locker, Inc. Policy: Retirement Age 72 Steven Oakland E F R Independent Chief Executive Officer and President of TreeHouse Foods, Inc. Age: 61 Director Since: 2014 Other Public Company Board: TreeHouse Foods, Inc. Dona D. Young A E R Lead Independent Director Independent executive and board consultant Retired Chairman, President and Chief Executive Officer of The Phoenix Companies, Inc. Age: 68 Director Since: 2001 Other Public Company Board: Aegon N.V. 2022 PROXY STATEMENT 17
ProposalPROPOSAL 1: Election of DirectorsELECTION OF DIRECTORS
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![]() | Chairman Chief Executive | |
Age: 64 | ||
Director since: 2014
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PROFESSIONAL EXPERIENCE
Foot Locker, Inc.
► | Chairman, since May 2016 |
► | President and Chief Executive Officer, since December |
OTHER BOARD SERVICE
► | Director and |
► | Director, Maidenform Brands, Inc. |
Chairman, |
► | Director, FDRA |
► | Member, University of Wisconsin—Eau Claire National Leadership |
REASONS FOR NOMINATION
Mr. Johnson has extensive experience as a retail company chief executive, including 25 years at the Company. He has led almost all of the Company’s major businesses in the United States, International, and Direct-to-Customer, has extensive knowledge of all facets of the Company’s business, and played an integral role in developing and executing the Company’s strategic plans.
RELEVANT SKILLS | |
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![]() | DONA D. YOUNG | |
![]() | Lead Independent Director | |
Age: 68 | ||
Director since:
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PROFESSIONAL EXPERIENCE
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Independent executive and board consultant
The Phoenix Companies, Inc. (insurance and asset management company)
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Proposal 1: Election of Directors
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OTHER BOARD SERVICE
► | Chairman of the |
► | Vice Chair of Audit |
► | ||
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► | Board Member, Spahn & Rose Lumber Co. |
► | Director and |
► | Director and member of the Audit Committee, Save the Children U.S. |
► | Trustee, Saint James School in Saint James, Maryland |
REASONS FOR NOMINATION
Ms. Young has significant governance, legal, mergers and acquisitions, risk management, and financial experience given her prior service as a public company General Counsel, and later CEO, which are relevant in her role as Lead Independent Director. The education and experience Ms. Young acquired through her board service at Save the Children are useful in her oversight of the Company’s human rights efforts. In addition, she was named by the Financial Times’ Outstanding Directors Exchange as a member of its Outstanding Directors class of 2021, the NACD Directorship 100 for 2015, and a NACD Board Leadership Fellow since 2013. She is NACD Directorship Certified™, completed the NACD Cyber-Risk Oversight Program, earned a CERT Certificate in Cybersecurity Oversight conferred by Carnegie Mellon University, and was a 2012 Advanced Leadership Fellow at Harvard University.
COMMITTEES | RELEVANT SKILLS |
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![]() 18 | Foot Locker, Inc. |
PROPOSAL 1: ELECTION OF DIRECTORS
![]() | VIRGINIA C. DROSOS |
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Age: 59 | |
Director since: 2022 | |
PROFESSIONAL EXPERIENCE
Signet Jewelers Limited (specialty jewelry retailer)
![]() | ► | Chief Executive Officer, since August 2017 |
Assurex Health, Inc. (personalized medicine company)
► | President and Chief Executive Officer, August 2013 to July 2017 |
OTHER BOARD SERVICE
► | Director, Signet Jewelers Limited, since 2012 |
► | Director, Akron Children’s Hospital, since April 2019 |
► | Director, American Financial Group, Inc., 2013 to December 2021 |
► | Director, Assurex Health, Inc., August 2013 to July 2017 |
REASONS FOR NOMINATION
Ms. Drosos brings valuable skills and insights to the Board, including proven expertise in strategy, branding, marketing, digital commerce, and global operations. She has proven retail expertise in mergers and acquisitions and business expansions into new product lines, retail channels, and geographies. Ms. Drosos is the sitting CEO of a specialty retailer, she is a visionary and transformational leader with an entrepreneurial mindset, and she has a proven track record of growing and scaling global businesses through deep consumer understanding, product and experience innovation, and heightened employee engagement. Further, Ms. Drosos is actively involved in financial planning issues as the CEO of a public company, providing her with relevant expertise as a member of the Audit Committee and Finance Committee.
COMMITTEES | RELEVANT SKILLS |
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![]() | ALAN D. FELDMAN |
Independent Director | |
Age: 70 | |
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PROFESSIONAL EXPERIENCE
Midas, Inc. (automotive repair and maintenance service provider)
► | Chairman, President and Chief Executive Officer, May 2006 to April 2012 |
► | President and Chief Executive Officer, January 2003 to April 2006 |
OTHER BOARD SERVICE
► | Director, John Bean Technologies Corporation, since July 2008 |
► | Director, GNC Holdings, Inc., June 2013 to June 2020 |
► | Director, Foundation Board, University of Illinois Foundation, since September 2012 |
REASONS FOR NOMINATION
Mr. Feldman has extensive chief executive, financial, and franchised retail experience as the former CEO of a public company specializing in retail franchises, providing him with relevant expertise as a member of the Human Capital Committee and Finance Committee.
COMMITTEES | RELEVANT SKILLS |
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2022 PROXY STATEMENT | ![]() 19 |
PROPOSAL 1: ELECTION OF DIRECTORS
![]() | GUILLERMO G. MARMOL |
Independent Director | |
Age: 69 | |
Director since: 2011 | |
PROFESSIONAL EXPERIENCE
Marmol & Associates (consulting firm that provides advisory services and investment capital to early-stage technology companies)
► | President, since March 2007 and October 2000 to May 2003 |
OTHER BOARD SERVICE
► | Non-executive Chief Executive Officer, Viron Therapeutics Holdings Inc., since 2021 |
► | Director and Audit Committee member, Morae Global Corporation, until August 2021 |
► | Director, Vitamin Shoppe, Inc., February 2016 to December 2019 |
► | Chair of the Board of Trustees, Center for a Free Cuba |
REASONS FOR NOMINATION
Mr. Marmol has a significant background in information technology and systems, which is highly important to the Company as we continue to invest in our technology and systems and build a more powerful digital business to connect with our customers. Mr. Marmol also has extensive executive, financial, strategic analysis, and business process experience as a management consultant at Marmol & Associates and McKinsey & Company and a former senior executive officer of Luminant Worldwide Corporation, Electronic Data Systems Corporation, and Perot Systems Corporation, providing him with relevant expertise as a member of the Human Capital Committee and Audit Committee Chair.
COMMITTEES | RELEVANT SKILLS |
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![]() | DARLENE NICOSIA |
Independent Director | |
Age: 54 | |
Director since: 2020 | |
PROFESSIONAL EXPERIENCE
The Coca-Cola Company (beverage company)
► | President, Canada and Northeast U.S., North America Operating Unit, since January 2021 |
► | President of the Canada Business Unit, January 2019 to January 2021 |
► | Vice President, Commercial Product Supply, May 2016 to January 2019 |
OTHER BOARD SERVICE
► | Advisory Board Member, Georgia Institute of Technology, Scheller College of Business |
► | Chair of the Board, Canadian Beverage Association |
► | Member, Food, Health, and Consumer Products of Canada Association |
REASONS FOR NOMINATION
Ms. Nicosia brings to our Board a broad-based global business background, particularly brand-building and global supply chain management, gained through her experience in the consumer products industry. Throughout her career, Ms. Nicosia has led sustainability initiatives and navigated complex regulatory environments and shifting consumer preferences. Her extensive understanding of supply chain, marketing operations, third-party risk management, and business transformation is an asset to our Board, particularly our Audit Committee and Human Capital Committee.
COMMITTEES | RELEVANT SKILLS |
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![]() 20 | Foot Locker, Inc. |
ProposalPROPOSAL 1: Election of DirectorsELECTION OF DIRECTORS
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![]() | Independent Director | |
Age: 61 | ||
Director since:
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PROFESSIONAL EXPERIENCE
TreeHouse Foods, Inc. (manufacturer of packaged foods and beverages)
► | Chief Executive Officer and President, since March 2018 |
The J.M. Smucker Company (manufacturer of packaged foods and beverages)
► | Vice Chair and President, U.S. Food and Beverage, May 2016 to March 2018 |
► | President, Coffee and Foodservice, April 2015 to April 2016 |
OTHER BOARD SERVICE
► | Director, TreeHouse Foods, Inc. |
► | Director and member of Compensation committee, Foster Farms |
► | Director, Food Industry Association |
► | Director, MTD Products, Inc., until December 2021 |
REASONS FOR NOMINATION
Mr. Oakland brings to our Board a broad-based business background and extensive experience in domestic and international consumer products operations, with particular strengths around business development, mergers and acquisitions, risk management, strategic planning, customer engagement, marketing, and brand building. Mr. Oakland is actively involved in governance and financial matters as the sitting CEO of a public company, providing him with relevant expertise as a member of the Responsibility Committee and Finance Committee Chair.
COMMITTEES | RELEVANT SKILLS |
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![]() | ULICE PAYNE, JR. |
Age: 66 | |
Director since: 2016 | |
PROFESSIONAL EXPERIENCE
Cyber-Athletix, LLC (esports healthcare company)
► | President, since March 2021 |
Addison-Clifton, LLC (global trade compliance advisory services provider)
► | President and Managing Member, |
OTHER BOARD SERVICE
► | Director and |
► | Director and member of |
► | Director, Wisconsin Conservatory of |
► | Director, The Northwestern Mutual Life Insurance Company, |
REASONS FOR NOMINATION
Mr. Payne brings to our Board significant governance, operational, financial, public service, trade compliance, and international experience as a result of the many senior positions he has held, including as President and Managing Member of Addison-Clifton, LLC since May 2004, President and Chief Executive Officer of the Milwaukee Brewers Baseball Club from September 2002 to December 2003, Managing Partner of Foley & Lardner, LLP from 2001 to 2002, Partner of Foley & Lardner, LLP from February 1998 to September 2002, and the Wisconsin Commissioner of Securities from February 1985 to December 1987. Mr. Payne’s extensive experience provides him with relevant expertise as a member of the Audit Committee and Responsibility Committee Chair.
RELEVANT SKILLS | ||
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ProposalPROPOSAL 1: Election of DirectorsELECTION OF DIRECTORS
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![]() | Independent Director | |
Age: 57 | ||
Director since:
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PROFESSIONAL EXPERIENCE
Boston Consulting Group (management consulting firm)
► | Senior Advisor, since November 2021 |
Kimberly-Clark Corporation (manufacturer of branded personal care, consumer tissue, and professional healthcare products)
► | President, North America Consumer, |
► | Global President of Kimberly-Clark Professional, |
OTHER BOARD SERVICE
► | Advisory board member, |
► | Director, Board of |
► | Co-Chair and Leadership Giving Chair, United Way Fox Cities Campaign |
► | Director and Compensation Committee Chair, Network of Executive Women, |
► | Director, Kimberly-Clark de Mexico, S.A.B. de C.V., until September 2021 |
► | Director, Food Industry Association, until 2021 |
REASONS FOR NOMINATION
Ms. Underhill brings to our Board a broad-based business background and extensive experience in domestic and international consumer products operations, with particular strengths in marketing, brand building, strategic planning, international business, and business development. She is NACD Directorship CertifiedTM. Ms. Underhill’s management resources experience from her prior service as a senior executive of a public company is relevant to both our Human Capital Committee, of which she is Chair, and Responsibility Committee, of which she is a member.
RELEVANT SKILLS | |
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![]() | TRISTAN WALKER | |
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Age: 37 | ||
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PROFESSIONAL EXPERIENCE
Walker & Company Brands Inc. (manufacturer of health and beauty products for persons of color), a subsidiary of the Procter & Gamble Company
► | Founder and Chief Executive Officer, |
Heirloom Management Company, LLC (micro venture capital fund)
![]() | Managing Member, since March 2022 |
OTHER BOARD SERVICE
![]() | ► | Director, Shake Shack, Inc. |
► | Trustee, Children’s Healthcare of Atlanta |
► | Chairman, CODE2040 (non-profit organization that matches high-performing Black and Latino software engineering students and graduates with technology firms and start-ups), until January 2020 |
REASONS FOR NOMINATION
Mr. Walker’s brand marketing and technology experience are deeply connected to the mission of designing solutions for consumers while bridging the gap between technology product innovation and youth culture. Mr. Walker understands how to utilize innovation and technology to drive change and deliver growth. His work at the intersection of technology and the consumer experience benefits our Board, and his financial and ESG experience as a CEO provides him with relevant expertise as a member of the Finance Committee and Responsibility Committee.
COMMITTEES | RELEVANT SKILLS |
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ProposalPROPOSAL 1: Election of DirectorsELECTION OF DIRECTORS
Summary of Director Qualifications and Experience and Demographic MatrixDIRECTOR NOMINEES’ SKILLSET MATRIX
We believe that our slate ofthe director nominees possessespossess the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business experience, service on ourand Board and the boards of other organizations,experience, and viewpoints. We have refreshed our Board over the past five years, as threefive highly-qualified directors were added to the Board and, threeas of the Annual Meeting, five directors retired. will have retired during that time period.
2022PROXY STATEMENT | ![]() 23 |
PROPOSAL 1: ELECTION OF DIRECTORS
Each director is individually qualified to make unique and substantial contributions. Collectively, our directors’ diverse viewpoints and independent-mindedness enhance the quality and effectiveness of Board deliberations and decision making. This blend of qualifications, attributes, and tenure results in highly effective leadership and is summarized below.highly-effective oversight.
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Foot Locker, Inc. |
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Proposal 1: Election of Directors
Knowledge, Skills, and Experience | Clark | Feldman | Johnson | Marmol | McKenna | Oakland | Payne | Turpin | Underhill | Young | |
![]() | Technology and Systemsexperience is important given the importance of technology to the retail marketplace, our internal operations, and our customer engagement initiatives | ● | ● | ||||||||
![]() | Youth Culture/Target Marketexperience is important to understand our business and strategy as our brands keenly focus on their target customers, particularly youth culture | ● | ● | ● | ● | ||||||
Governance | |||||||||||
![]() | Accounting or Financialexpertise gained from experience as a CEO, audit professional, or finance executive is important because it assists our directors in understanding and overseeing our financial reporting and internal controls | ● | ● | ● | ● | ● | ● | ● | ● | ||
![]() | Business Development / Mergers and Acquisitionsexperience is important because it helps in assessing potential growth opportunities | ● | ● | ● | ● | ● | ● | ● | ● | ● | |
![]() | Environmental, Social, and Governanceexperience is important because it supports our goals of strong Board and management accountability, transparency, and protection of shareholder interests | ● | ● | ● | ● | ● | ● | ● | |||
![]() | Risk Managementexperience is helpful to the Board’s role in overseeing the risks facing the Company | ● | ● | ● | ● | ● | ● | ||||
Demographic Background | |||||||||||
Board Tenure (Year Joined) | 2013 | 2005 | 2014 | 2011 | 2006 | 2014 | 2016 | 2001 | 2016 | 2001 | |
Years | 6 | 14 | 5 | 8 | 13 | 5 | 3 | 18 | 3 | 18 | |
Gender | ● | ● | ● | ● | ● | ● | |||||
Male | ● | ● | ● | ● | |||||||
Female | |||||||||||
Age (at April 12, 2019) | |||||||||||
Years old | 70 | 67 | 61 | 66 | 68 | 58 | 63 | 71 | 54 | 65 | |
Race/Ethnicity | |||||||||||
African American | ● | ||||||||||
Hispanic | ● | ||||||||||
White | ● | ● | ● | ● | ● | ● | ● | ● | |||
Number of Other Public Company Boards | 1 | 2 | 1 | 1 | — | 1 | 2 | — | — | 1 |
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The Board is committed to good corporate governance and has adopted Corporate Governance Guidelines and other policies and practices to guide the Board and senior management.OUR BOARD OF DIRECTORS
Our By-Laws provide for a Board consisting of between 7 and 13 directors. The exact number of directors is determined from time to time by the entire Board. TheThere are currently 11 directors on our Board. Mr. McKenna will be retiring when his term expires at the conclusion of the Annual Meeting, and the Board has fixed the number of directors at 10 and there are currently 10 directors on our Board.effective at such time.
Directors’ IndependenceDIRECTORS’ INDEPENDENCE
A director is not considered independent under New York Stock Exchange (“NYSE”)NYSE rules if he or she hasthey have a material relationship with the Company that would impair his or hertheir independence. In addition to the independence criteria established by the NYSE, the Board has adopted categorical standards to assist it in making its independence determinations regarding individual directors. These categorical standards are contained in the Corporate Governance Guidelines, which are posted on the Company’s corporate websiteavailable atfootlocker.com/corpinvestors.footlocker-inc.com/cgg.
The Board has determined that the following categories of relationships are immaterial for purposes of determining whether a director is independent under the NYSE listing standards:
Categorical Relationship | Description |
Investment Relationships with the Company | A director and any family member may own equities or other securities of the Company. |
Relationships with Other Business Entities | A director and any family member may be a director, employee (other than an executive officer), or beneficial owner of less than 10% of the shares of a business entity with which the Company does business, provided that the aggregate amount involved in a fiscal year does not exceed the greater of $1 million or 2% of either that entity’s or the Company’s annual consolidated gross revenue. |
Relationships with Not-for-Profit Entities | A director and any family member may be a director or employee (other than an executive officer or the equivalent) of a not-for-profit organization to which the Company (including the Foot Locker Foundation) makes contributions, provided that the aggregate amount of the Company’s contributions in any fiscal year do not exceed the greater of $1 million or 2% of the not-for-profit entity’s total annual receipts. |
We individually inquire of each of our directors and executive officers about any transactions in which the Company and any of these related persons or their immediate family members are participants. We also make inquiries within the Company’s records for information on any of these kinds of transactions. Once we gather the information, we then review all relationships and transactions of which we are aware in which the Company and any of our directors, executive officers, their immediate family members, or five-percent5% shareholders are participants to determine, based on the facts and circumstances, whether the related persons have a direct or indirect material interest. TheOur General Counsel’s office coordinates the related person transaction review process. The Nominating and GovernanceResponsibility Committee reviews any reported transactions involving directors and their immediate family members in making its recommendation to the Board on the independence of the directors. In approving, ratifying, or rejecting a related person transaction, the Nominating and GovernanceResponsibility Committee considers such
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Corporate Governance
information as it deems important to determine whether the transaction is on reasonable and competitive terms and is fair to the Company. The Company’s written policies and procedures for related person transactions are included within both the Corporate Governance Guidelines and the Code of Business Conduct. There were no related person transactions in 2018.2021.
2022PROXY STATEMENT | ![]() 25 |
GOVERNANCE
The Board, upon the recommendation of the Nominating and GovernanceResponsibility Committee, has determined that the following directors are independent under the NYSE rules because they have no material relationship with the Company that would impair their independence:
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DONA D. YOUNG Age: 68 Director since: 2001 Lead Independent Director | VIRGINIA C. DROSOS Age: 59 Director since: 2022 | ALAN D. FELDMAN Age: 70 Director since: 2005 | GUILLERMO G. MARMOL Age: 69 Director since: 2011 | MATTHEW M. MCKENNA Age: 71 Director since: 2006 |
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DARLENE NICOSIA Age: 54 Director since: 2020 | STEVEN OAKLAND Age: 61 Director since: 2014 | ULICE PAYNE, JR. Age: 66 Director since: 2016 | KIMBERLY UNDERHILL Age: 57 Director since: 2016 | TRISTAN WALKER Age: 37 Director since: 2020 |
Jarobin Gilbert, Jr. served as a director of the Company during 2018 until his retirement from the Board in May 2018. The Board determined that Mr. Gilbert was independent under NYSE rules through the end of his term as a director because he had no material relationship with the Company that would impair his independence.
In making its independence determination, the Board reviewed recommendations of the Nominating and Governance Committee and considered Dona D. Young and Ulice Payne, Jr.’s
directors are independent. All directors are independent, except the CEO. | Maxine Clark served as a director of the Company during 2021 until her retirement from the Board in May 2021. The Board determined that Ms. Clark was independent under NYSE rules through the end of her term as a director because she had no material relationship with the Company that would impair her independence. In making its independence determination, the Board reviewed recommendations of the Responsibility Committee and considered Mr. Payne and Ms. Young’s relationships as directors of companies with which we do business. The Board has determined that these relationships meet the categorical standard for Relationships with Other Business Entities and are immaterial with respect to determining independence. The Board has determined that all members of the Audit Committee, the Finance Committee, the Human Capital Committee, and the Responsibility Committee are independent as defined under the NYSE listing standards and the director independence standards adopted by the Board. |
![]() 26 | Foot Locker, Inc. |
GOVERNANCE
BOARD TENURE AND TERM LIMITS
The Company is focused on having a well-constructed and high-performing Board. To that end, the Responsibility Committee selects director nominees who think and act independently and can clearly and effectively communicate their convictions. The Board does not believe long tenure alone presumptively renders a director to not be independent. Conversely, the Board recognizes the contributions experienced directors add to the Board. The Board has determined that these relationships meetits longer-tenured directors have important experience, bring diverse perspectives, and provide tangible value to the categorical standard for Relationships with Other Business EntitiesBoard and are immaterial with respect to determining independence.
the Company. The Board has also determined that all memberstheir length of tenure has allowed these directors to accumulate valuable knowledge and experience based upon their history with the Company. This knowledge and experience improves the ability of the Audit Committee,Board to provide constructive guidance and informed oversight to management. Furthermore, in the Compensation Committee,Board’s opinion, the Finance Committee,length of tenure of its members has not in any way impaired the willingness of any director to question and confront any issue or exercise independent and impartial oversight of the Nominating and Governance Committee are independent as defined underCompany in any area. The Board benefits from the NYSE listing standards andcontributions of its experienced directors who have developed insight into the director independence standards adopted byCompany over the course of their service on the Board.
The Responsibility Committee has specifically considered the feedback of some shareholders as well as the discussions of some commentators that suggest lengthy Board Leadership Structuretenure should be balanced with new perspectives. Specific to the Company, the Responsibility Committee has structured the Board such that there are directors of varying tenures, with new directors and perspectives joining the Board over time while retaining the institutional memory of longer-tenured directors. Longer-tenured directors, balanced with newer directors, enhance the Board’s oversight capabilities. The Board believes it is important to balance refreshment with the need to retain directors who have developed, over time, significant insight into the Company and its operations and who continue to make valuable contributions to the Company that benefit our shareholders. The Board believes that it has an appropriate mix of longer-tenured directors and newer directors, which provides an appropriate and dynamic balance.
Furthermore, the Board has not adopted formal director term limits, in part, because the imposition of director term limits on a board implicitly discounts the value of experience and continuity among directors and runs the risk of excluding experienced and potentially valuable directors as a result of an arbitrary determination. In addition, imposing this restriction means the Board would lose the contributions of longer-tenured directors who have developed a deeper knowledge and understanding of the Company over time. The Board does not believe that long tenure impairs a director’s ability to act independently of management.
BOARD LEADERSHIP STRUCTURE
Our Board evaluates, from time to time as appropriate, whether the same person should serve as Chairman and Chief Executive Officer,CEO, or whether the positions should be held by different persons, in light of all relevant facts and circumstances and what it considers to be in the best interests of the Company and our shareholders. Since May 2016, the positions of Chairman and Chief Executive OfficerCEO have been held by Richard A.Mr. Johnson, with Dona D.Ms. Young serving as independent Lead Independent Director. The Board has utilized various leadership structures since 2010, as shown below:
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Lead Director
The Board believes that, particularlybased on the Company’s current facts and circumstances, its Board leadership structure is appropriate.
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GOVERNANCE
LEAD INDEPENDENT DIRECTOR
The Board believes that, because the positions of Chairman and Chief Executive OfficerCEO are held by the same person, the appointment of ancombined, a lead independent lead director is appropriate.
The Lead Independent Director’s responsibilities include:
► | presiding at executive sessions of the independent directors, and Board meetings at which the Chairman is absent; |
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| attending meetings of each of the Board committees; |
► | encouraging and facilitating active participation by, and communication among, all directors; |
► | serving as the liaison between the independent directors and the Chairman; |
► | approving Board meeting agendas and schedules after conferring with the Chairman and other members of the Board, as appropriate, and adding agenda items in her discretion; |
► | possessing the authority to call meetings of the independent directors; |
► | leading the Board’s annual CEO performance evaluation; |
Corporate Governance
► | advising the Chairman and the committee chairs in fulfilling their designated roles and responsibilities; and |
► | performing such other functions as the Board or other directors may request. |
The Board periodically considers the periodic rotation of the Lead Independent Director, from time to time, taking into account experience, continuity of leadership, and the best interests of the Company.
Dona D.Ms. Young currently serves as the Lead Independent Director. The Board believes that Mrs.Ms. Young is well suited to serve as Lead Independent Director, given her governance, business, and financial and governance background,background. The Board also recognizes that it benefits from Ms. Young’s tenure as well asan experienced director who has developed insight into the Company over the course of her more than eighteen years of service on our Board.the Board, which improves her ability to provide constructive, independent, and informed guidance and oversight to management.
NOTE FROM OUR LEAD INDEPENDENT DIRECTOR
Director On-BoardingDespite the many challenges we confronted and Educationare continuing to experience—including impacts related to the COVID-19 pandemic, supply chain disruption, inflationary pressures, and an evolving geopolitical environment—we delivered record performance in 2021. While it is important to celebrate this achievement, the Board, like management, never rests because we recognize certain headwinds in the marketplace. Our Board is engaged in confronting these challenges and believes that our strategic plan puts the Company in a position of strength. On behalf of the Board, I am pleased to share with you some highlights of the governance work we have done to navigate these challenges and make strategic choices to create long-term, consistent shareholder value:
► | Long-Term Strategy Oversight. The Board has overseen the long-term strategy initiatives implemented in 2021 to diversify our brands, categories, and channels, as well as expand our demographic and geographic customer base with the acquisitions of WSS and atmos. As the business and industry continue to evolve, the Board remains engaged and committed to accelerating certain initiatives in 2022 as a part of our long-term strategy to address the accelerated strategic shift to DTC by our vendors while also returning capital to shareholders, including further diversification of our merchandise and vendor mix, accelerating our off-mall pivot and key growth banner rollout, enhancing omni-channel evolution efforts, and implementing a new cost savings program. |
► | Board Refreshment. Ongoing Board refreshment is critical to ensure we have the right mix of skills, diversity, and expertise to support the Company’s progress. We recently strengthened our Board with the election of Gina Drosos in February 2022 in anticipation of Matt McKenna’s retirement from the Board in May 2022. Gina brings significant financial, industry, and operational experience from her current role as a sitting CEO of a speciality retailer. |
► | Succession Planning. The Board believes that a high-performing management team is critical to our success as a global brand that leads with purpose. To ensure we have the appropriate succession plan in place, the full Board is engaged in a long-term process with management to maximize the pool of emerging diverse talent who possess the skills, experiences, and attributes required to be effective leaders in light of the Company’s global business strategies, opportunities, and challenges. For additional information, see Human Capital Management and Succession Planning Oversight on page 34. |
► | Shareholder Engagement. Our Board serves at the pleasure of you, our shareholders. Therefore, as a Board, one of our highest priorities is hearing from you, our shareholders, who have entrusted us with this responsibility. For the past five years, I have led, on behalf of our Board, a structured and governance-focused shareholder engagement program designed to accomplish this by facilitating transparency and creating a platform to receive shareholder feedback to share with the Board. For additional information, see Shareholder Engagement on page 38. |
► | ESG. ESG is embedded in our ability to achieve our strategic imperatives. The Board has worked with management in its oversight capacity to support the integration of its ESG efforts into its over-arching growth strategy, as illustrated in our Impact Report. For example, we believe DIBs is a strategic business driver. Management and the Board have been tested in multiple ways throughout the pandemic and our diversity has proven to be an important asset, which has led us to make better strategic decisions. For additional information regarding our global ESG program and Board oversight, see ESG on page 96, ESG Oversight on page 35, and our Impact Report, which is available at investors.footlocker-inc.com/impactreport. |
The Board is incredibly grateful to all our stakeholders for their continued commitment to supporting the Company.
![]() | “While the Board knows that it is important to celebrate the Company’s record performance in 2021, the Board, like management, never rests because we recognize certain headwinds in the marketplace and our oversight responsibility to make the strategic decisions necessary to create long-term, consistent value for you, our shareholders.” DONA D. YOUNG Lead Independent Director |
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GOVERNANCE
DIRECTOR ON-BOARDING
We have ana two-phase on-boarding program for new directors that is intended to educate a new director on the Company and the Board’s practices. During the first year of the director’s service, the newly-electedpractices:
DIRECTOR CONTINUING EDUCATION
Director education is an ongoing process, which begins when a director meets with the Company’s Chief Executive Officer, Chief Financial Officer, Chief Human Resources Officer, General Counsel and Secretary, and other members of senior management, to review the Company’s business operations, financial matters, strategy, investor relations, risk management, corporate governance, composition of thejoins our Board. We host quarterly Board and its committees,committee presentations and succession and development plans. Additionally, he or she visits our stores nearseparate education sessions to keep directors appropriately apprised of key developments concerning the Company’s New York headquarters, and elsewhere, with senior management for an introduction to store operations. During this first year, new directors periodically meet with the Lead Director and with the committee chairs for an immersion into the work of the committees.following topics so they can effectively carry out their oversight responsibilities:
The second phase of the on-boarding program commences approximately 18 months after the director joins the Board and is specifically tailored to the individual director, taking into consideration his or her experience as a director of other public companies, the committees of our Board on which he or she serves, and areas of our business and strategy that the director would like to explore more thoroughly with management. For example, during this second phase of the program, directors participate in enhanced discussions in the areas of customer data, retail accounting and operations, and risk management, and meet with key talent. Regular check-ins with the Lead Director continue throughout the on-boarding program.
We also provide the Board with educational training, using both internal and external resources, in connection with each quarterly Board meeting and provide outside speakers on relevant topics during Board dinners. We encourage all directors to attend other continuing education programs to maintain their expertise and provide feedback toshare takeaways with the other directors on these programs. We reimburse directors for reasonable expenses incurred in attending continuing education programs. Our directors have attended a variety of continuing education programs, conferences, and events hosted by universities, trade groups, law firms, accounting firms, and other advisory service firms on a variety of topics, including the following:
Mandatory Resignation or Retirement
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GOVERNANCE
MANDATORY RESIGNATION OR RETIREMENT
The Board has established a policy whereby a non-employee director is required to advise the Responsibility Committee Chair of the Nominating and Governance Committee of any change to his or hertheir principal employment. If requested by the Responsibility Committee Chair, after consultation with the other members of the Responsibility Committee, the director willis required to submit a letter of resignation to the Responsibility Committee Chair, offor the Responsibility Committee and the Committee would then meet to consider whether to accept or reject the resignation.consider.
The Corporate Governance Guidelines also require that directors retire from the Board at the annual meeting of shareholders following the director’s 72nd birthday.
Corporate Governance GuidelinesCORPORATE GOVERNANCE GUIDELINES
The Corporate Governance Guidelines assist the Board has responsibility for establishing broad corporate policies, reviewing significant developments affectingin the Company, overseeingexercise of its governance responsibilities and serve as a framework within which the Board may conduct its business, strategy, and monitoringincluding the general performance of the Company.following duties:
► Director Responsibilities | ► Director Independence | ► Director Qualifications |
► Board Leadership | ► Board Committees | ► Director Retirement Policy |
► Change in Director’s Principal Employment | ► Director Resignation Policy | ► Setting Board Meeting Agendas |
► Media and Stakeholder Engagement | ► Board Access to Management and Independent Advisors | ► Director Compensation |
► Stock Ownership Guidelines | ► Director On-Boarding | ► Director Continuing Education |
► Human Capital Management and Succession Planning Oversight | ► CEO and Board Evaluations | ► Policy on Outside Directorships |
The Board has adopted Corporate Governance Guidelines.
The Board periodically reviews the guidelines and revises them, as appropriate. The Corporate Governance Guidelines are available on the corporate governance section of the Company’s corporate website atfootlocker.com/corpinvestors.footlocker-inc.com/cgg. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.
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Corporate Governance
Board AttendanceBOARD ATTENDANCE
The Board held six11 meetings during 2018. All of our directors2021. Each director attended at least 75%95% of the aggregate of the meetings of theall Board and ofcommittee meetings for the committees on which they served in 2018.during 2021.
The Board holds regularly scheduledregularly-scheduled executive sessions of non-managementindependent directors in conjunction with each Board meeting. Dona D.Ms. Young, as Lead Independent Director, presides at these executive sessions.
Directors are expected to attend annual meetings of shareholders.meetings. The annual meeting is normallytypically scheduled on the same day as a quarterly Board meeting. In 2018,2021, all of the directors attended the annual meeting.meeting, which was held virtually given the health and safety concerns surrounding the COVID-19 pandemic.
Retention of Outside AdvisorsRETENTION OF OUTSIDE ADVISORS
The Board and all of its committees have authority to retain outside advisors and consultants that they consider necessary or appropriate in carrying out their respective responsibilities. The independent accountants are retained by, and report directly to, the Audit Committee. In addition, the Audit Committee is responsible for overseeing the qualifications, performance, and compensation of the internal auditors, to which the Company has partially outsourced in part.to an independent public accounting firm. Similarly, the consultant retained by the CompensationHuman Capital Committee to assist in the evaluation ofevaluating senior executive compensation reports directly to that committee.
Board Evaluations
Each year, the
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GOVERNANCE
BOARD EVALUATIONS
The Board and its committees engage in a robust evaluationBoard and committee assessment process consistent with the Board’s goal of continuous improvement. The Nominatingevery year, and Governance Committee oversees the evaluation processa 360-degree peer and reviews the procedures, which may vary from year to year, in advance of each year’s evaluation. The process isself-assessment facilitated by an independent third party approximately every three years, both designed to elicit candid feedback regarding the areas in which the Board and its committees could improve, their effectiveness and utilizes surveys, individual interviews, and action planning.
In addition,as described in 2018, the table below. The Board enhanced its evaluation process and undertooklast conducted a 360-degree peer evaluation process facilitated by an independent third party. Each director completed an evaluation and individual interview with the third party. The Chair of the Nominating and Governance Committee and the Lead Director each received copies of the completed evaluations. The Lead Director met separately with each director, and the Chair of the Nominating and Governance Committee met with the Lead Director, to discuss the results of the individual evaluations. The Board plans to conduct peer evaluations approximately every two to three years.self-assessment in 2021.
Action Item | Board and Committee Assessment | 360-Degree Peer and Self-Assessment | |
Cadence | Annual | Triennial | |
Assessments | Each director completes a separate detailed assessment to evaluate the Board and each committee on which they serve. Topics covered include, among others: ► Board and committee structure, size, composition, skills, diversity, and succession planning. ► The effectiveness of the Board, committees, and committee chairs. ► Board strategy and operational oversight. ► Board culture and dynamics, including the effectiveness of discussion and debate at Board and committee meetings. ► The quality of Board and committee agendas, meeting length, and presentations. ► The appropriateness of Board and committee priorities. ► Board interactions with management, including the quality of meeting materials and the information provided to the Board and committees. | Each independent director completes a detailed peer and self-assessment. Topics covered include, among others, whether each director: ► Demonstrates commitment to the Company’s core values. ► Participates actively and constructively in, and is well-prepared for, Board and committee meetings. ► Exercises independent judgment when considering issues before the Board and committees. ► Seeks opportunities to proactively strengthen their understanding of their role as a director and are open to ongoing training and constructive feedback. ► Brings functional expertise to the Board to augment management’s thinking and development. ► Seeks opportunities to better understand the Company’s business and issues that are important to shareholders and offers innovative solutions to these challenges. | |
Reporting | The results of the assessments are processed as follows: ► The General Counsel reviews and summarizes the responses from each director’s assessment for the Lead Independent Director and each of the committee chairs. ► Each director participates in a confidential, open-ended, one-on-one interview facilitated by the Lead Independent Director to discuss the results of the assessments regarding Board and committee performance, and solicit input on the performance and effectiveness of the Board and the committees (except the Lead Independent Director, who meets with the Responsibility Committee Chair). ► Each committee chair meets separately with each of its members to discuss the results of that committee’s assessment. | The results of the peer and self-evaluations are processed as follows: ► An independent third party tabulates the results of the evaluation and prepares individual, confidential reports reflecting the directors’ peer and self-evaluation findings and recommendations. ► The reports are provided to the Lead Independent Director, except the report on the Lead Independent Director, which is provided to the Responsibility Committee Chair. ► The Lead Independent Director briefs the CEO on the results. ► Confidential, open-ended, one-on-one interviews are facilitated by the Lead Independent Director and, for the Lead Independent Director, by the Responsibility Committee Chair. | |
Action Planning | These evaluations have consistently found that the Board and its committees are operating effectively. This evaluation process has led to various refinements designed to increase Board effectiveness over the past few years, including: ► Adding additional responsibilities for the Responsibility Committee, including overseeing the Company’s ESG efforts. ► Ensuring that Board and committee agendas are appropriately focused on strategic priorities. ► Increasing focus on continuous Board succession planning and refreshment. ► Continuing to prioritize diversity when seeking new Board candidates. ► Enhancing Board evaluation process with a 360-degree peer and self-assessment facilitated by an independent third party. | These evaluations have consistently identified development opportunities for each director. They have also found that each director: ► Demonstrates a commitment to the Company’s core values. ► Participates actively and constructively in, and is well-prepared for, Board and committee meetings. ► Exercises independent judgment when considering issues before the Board and committees. ► Seeks opportunities to proactively strengthen their understanding of their role as a director and is open to ongoing training and constructive feedback. ► Brings functional expertise to the Board to augment management’s thinking and development. ► Seeks opportunities to better understand the Company’s business and issues that are important to shareholders and offers innovative solutions to these challenges. |
Stock Ownership Guidelines
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GOVERNANCE
STOCK OWNERSHIP GUIDELINES
The Board has adoptedCompany’s Stock Ownership Guidelines applicablealign the interests of non-employee directors and executives with the interests of shareholders, and promote the Company’s commitment to sound corporate governance. These guidelines apply to the Board, the Chief Executive Officer,Company’s non-employee directors, executive officers, corporate officers, and certain other covered executives. The Guidelinesparticipants are expected to achieve and maintain beneficial ownership of Common Stock having a value equal to at least the multiple indicated in the table below of the remuneration payable to them from time to time. The individual guidelines established for each participant are as follows:
4x |
(both Cash and Equity)
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Chief Executive Officer | 6x | Annual Base Salary
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Chief Operating Officer | 4x | Annual Base Salary Rate | ![]() |
Executive Vice President | 3x | Annual Base Salary Rate | ![]() ![]() |
Senior Vice | 2x | Annual Base Salary
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Corporate Vice | 0.5x | Annual Base Salary
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Corporate Governance
SharesFor purposes of unvested restricted stock, unvested restricted stock units (“RSUs”),calculating beneficial ownership, (i) Common Stock, RSUs, and deferred stock units (“DSUs”) are countedDSUs count towards ownership, for purposes of the Stock Ownership Guidelines. Performance-based RSUs (“PBRSUs”) are counted(ii) PSUs and ESPP shares count once earned. Stockearned and purchased, respectively, and (iii) stock options and shares held through the Foot Locker 401(k) Plan are disregarded in calculating ownership.disregarded.
Directors, the Chief Executive Officer,Executives and other covered executivesNon-Employee Directors are required to be in complianceachieve their Stock Ownership Guideline within five years of becoming subjecttheir hiring or promotion effective date that caused such employee to be covered by these guidelines.guidelines, and their election to the Board, respectively. In the event of any increase in the required ownership level, whethereither as a result of an increase in the annual retainer feeremuneration paid or base salary or an increase in the required ownership multiple, the target date for compliance with thesuch increased ownership guideline would beis five years after the effective date of such increase.
All executives and directors who were requiredIn the event any person subject to be in compliance with thethese guidelines as of the end of the 2018 fiscal year are in compliance. The Company measures compliance with the guidelines at the end of the prior fiscal year based on the market value of the Company’s stock at that time.
If a director, the Chief Executive Officer, or other covered executive fails to be in compliance withby the guidelines as of the end of the prior fiscal year, he or she mustapplicable compliance date, they are required to hold the net shares obtained through all future stock option exercises and restricted stock and RSU vestings, after withholding for the payment of applicable taxes, until again regaining compliance with the guidelines. Insuch person is in compliance; provided, however, that in order to take into consideration fluctuations in the Company’s stock price, any person who has been in compliance with the guidelines as of the end of at least one of the two preceding fiscal years and who has not subsequently sold shares will not be subject to thisthe holding requirement. For non-employee directors, the Nominating and Governancerequirements.
The Responsibility Committee will consider a director’sNon-Employee Director’s failure to comply with the Stock Ownership Guidelinesthese guidelines when considering that director for reelection.re-election to the Board.
The non-employee directors receive one-halfCompany measures compliance at the end of their annual retainer fees, including committee chair retainer fees,each fiscal year, with the compliance determination at that point in sharestime applying for the entire ensuing fiscal year, regardless of fluctuations in the Company’s stock price.
All director nominees, the CEO, and all other executives subject to these guidelines were in compliance as of the Company’s common stock, par value $0.01 per share (“Common Stock”), withend of the balance payable in cash. Directors may elect to receive up to 100% of their annual retainer fees in stock.2021 fiscal year.
Political ContributionsPOLITICAL CONTRIBUTIONS AND PUBLIC ADVOCACY
Our Code of Business Conduct prohibits making contributions on behalf of the Company to political parties, political action committees, political candidates, or holders of public office.
The Company is a member of severalcertain trade associations, which support their member companies by offering educational forums, public policy advocacy, networking, and advancement of issues important to the retail and footwear industries, as well as the business community generally. Given the diversity of interests, viewpoints, and broad membership represented by these trade associations, the positions they take may not always reflect the Company’s positions. Also, we monitor the use of membership dues paid to trade associations for consistency with the Company’s values and business objectives.
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GOVERNANCE
The Company is a member of, and has paid membership fees to, the following organizations which, as part of their overall activities, may engage in advocacy activities with regard to issues important to the retail industryor footwear industries or the business community generally.generally, as applicable:
► | FDRA |
► | RILA |
► | U.S. Chamber of Commerce |
Mr. Johnson is a director of FDRA and Chairman of RILA.
Our Board’s Oversight of Our BusinessNotwithstanding these policies, we believe that our stakeholders look to us for leadership and to have a voice that is aligned with their values. As a purpose-driven organization, we have an obligation to add our voice and actions to drive meaningful and lasting change within our Company and the communities we serve.
RiskFor additional information regarding our Board’s political and public advocacy oversight, see Political and Public Advocacy Oversight on page 36.
OUR BOARD’S OVERSIGHT OF OUR BUSINESS
Oversight of the Company’s business strategy is a key responsibility of the Board, including work embedded in the Board committees. The Board believes that overseeing and monitoring strategy is a continuous process and takes a multilayered approach in exercising its duties. The Board’s oversight and management’s execution of business strategy are viewed with a long-term mindset and a focus on assessing both opportunities for, and potential risks to, the Company. In addition to financial and operational performance, other measures, including ESG goals, are discussed regularly by the Board and its committees.
The Board believes deeply that it must be fit for its purpose and provide strategic value to the Company. This dynamic has been highlighted during the COVID-19 pandemic, as the Board’s focus quickly pivoted toward protecting the communities we serve, keeping our team members safe, and maintaining financial stability for our shareholders.
While the Board and its committees oversee strategic planning, management is charged with developing and executing the business strategy. Management is completely transparent with the Board. To monitor the performance of the Company’s strategic goals, the Board maintains an open dialogue with, has regular access to, and receives ongoing updates from, management. For example, our Lead Independent Director has monthly calls with management, and each of the committee chairs regularly engages with their respective management liaisons. These discussions are enhanced with “hands-on” experiences, such as store and facility visits, to provide directors with opportunities to see strategy execution first hand.
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GOVERNANCE
HUMAN CAPITAL MANAGEMENT AND SUCCESSION PLANNING OVERSIGHT
The Board believes that the strength of the Company’s workforce is one of the significant contributors to our success as a global brand that leads with purpose. One of the primary responsibilities of the Board is to ensure that the Company has a high-performing CEO and management team. To meet that goal, the Board, the Human Capital Committee, the Responsibility Committee, and management share responsibility for management development and succession planning:
Responsible Party | Oversight Area |
Board | Oversight of these topics as part of its overall oversight role, including regular reviews of management development and succession planning to maximize the pool of emerging diverse talent who can assume top management positions without undue interruption. |
In assessing possible CEO and other senior leadership candidates, our independent directors identify the skills, experiences, and attributes they believe are required to be an effective leader in light of the Company’s global business strategies, opportunities, and challenges. This process is designed to prepare the Company for both expected successions, such as those arising from anticipated retirements, as well as those occurring when executives leave unexpectedly, or due to death, disability, or other unforeseen events. Each director has complete and open access to any member of management. Members of management, including those several levels below senior management, are invited regularly to make presentations at Board and committee meetings and meet with directors in informal settings to allow the directors to form a more complete understanding of the executives’ skills and character. We maintain updated emergency succession plans for the CEO and other executive committee members. Succession reviews for key executive roles consist of an assessment of internal candidates as well as external talent identified by executive search firms. | |
Human Capital Committee | As described in its charter, primary responsibility for organizational talent and development and management succession planning, including regular reviews of executive performance, potential, and succession planning with a deeper focus than the full Board review, emphasizing career development of promising management talent. The Board made human capital management a priority through its Human Capital Committee, which oversees the Company’s strategies and initiatives on diversity and inclusion, employee well-being, compensation and benefits program, and engagement. |
Responsibility Committee | As described in its charter, primary responsibility for reviewing and making recommendations regarding the governance and process around CEO succession planning. The Board made ESG a priority through its Responsibility Committee, which oversees the Company’s ESG efforts, including diversity and inclusion and the LEED initiative, which serve as talent recruitment tools. |
Management | Collaboration of the Chief Human Resources Officer and senior Human Resources leaders with functional leaders across the Company in developing and implementing programs to attract, assess, and develop management-level talent for possible future senior leadership positions. |
For additional information on the Company’s human capital management strategies and initiatives, see our Annual Report, which is available at investors.footlocker-inc.com/ar.
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GOVERNANCE
ESG OVERSIGHT
The Board is actively engaged in the oversight of the Company’s global ESG program. In exercising its authority, the Board recognizes that the long-term interests of our shareholders are best advanced when considering other stakeholders and interested parties, including customers, team members, business partners, and the communities we serve. The Responsibility Committee oversees our global ESG program, and the Board receives updates from the Responsibility Committee Chair throughout the year. In addition, each of the Audit Committee, Finance Committee, and Human Capital Committee have certain ESG oversight responsibilities relevant to their respective committees.
Inspired by engagement with our shareholders, the Company has begun publishing an annual Impact Report. The Impact Report provides details on our global ESG program, consistent with the SASB reporting standards and TCFD reporting framework. Our global ESG program is focused on: | |
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For additional information regarding our global ESG program and Board oversight, see ESG on page 96, ESG Oversight on page 35, and our Impact Report, which is available at investors.footlocker-inc.com/impactreport. | |
The Company has adopted the following policy statements related to its global ESG program:
Policy Statement | Purpose |
Global Environmental and Climate Change Statement | Sets out certain sustainability and environmental commitments and priorities, including reducing GHG emissions that have an adverse effect on climate change, and certain responsibilities of its suppliers. This policy statement is available at investors.footlocker-inc.com/climate. |
Global Human Rights Statement | Sets out certain commitments, including maintaining a work environment that respects and supports the provision of basic human rights to all of its team members around the world, regardless of the country in which they work, to the full extent permitted by law, and certain responsibilities of its suppliers. This policy statement is available at investors.footlocker-inc.com/humanrights. |
Global Occupational Health and Safety Statement | Sets out certain commitments, including operating in a safe and responsible manner to protect the health and safety of its team members, partners, and customers, and certain responsibilities of its suppliers. This policy statement is available at investors.footlocker-inc.com/safety. |
Global Water Stewardship Statement | Sets out certain commitments, including operating in a safe and responsible manner to protect against water risks and seeking to promote the human right to water and sanitation, and certain responsibilities of its suppliers. This policy statement is available at investors.footlocker-inc.com/water. |
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GOVERNANCE
POLITICAL AND PUBLIC ADVOCACY OVERSIGHT
Our Board has political and public advocacy oversight responsibility, including ensuring that management’s political and lobbying expenditures are aligned with the Company’s strategy. The Board has adopted policies and procedures to oversee political and lobbying expenditures. As part of its ESG oversight responsibility, the Responsibility Committee reviews annually the Board’s policies and procedures regarding politics and public advocacy and that the Company’s publicly-stated positions are aligned with its related activities and spending. For additional information regarding our policies concerning political contributions and public advocacy, see Political Contributions and Public Advocacy beginning on page 32.
RISK OVERSIGHT
The Board has oversight responsibilities regarding risks that could affect the Company. This oversightOversight for some of these risks is conducted primarily throughassigned to the committees—largely the Audit Committee.Committee—based on the individual risk.
The Audit Committee has established procedures for reviewing the Company’s risks. These procedures include regular risk monitoring by management to update current risks and identify potential new and emerging risks, quarterly risk reviews by management with the Audit Committee, and an annual risk report to the full Board. In addition, the Audit Committee receives regular briefings from our Chief Information and Customer ConnectivitySecurity Officer, Chief Financial Officer, Chief Accounting Officer, General Counsel, headVice President of our internal audit function,Internal Audit, and outside experts on cybersecurity risks and cyber risk oversight. During these meetings, the Audit Committee and management discuss these risks, risk management activities and efforts, best practices, lessons learned from incidents at other companies, the effectiveness of our security measures, and other related matters. The Audit Committee Chair reports on the committee’s meetings, considerations, and actions to the full Board at the next Board meeting following each committeeAudit Committee meeting.
The CompensationHuman Capital Committee considers risk in relation to the Company’s compensation policies and practices. The CompensationHuman Capital Committee’s independent compensation consultant provides an annual report to the committee on risk relative to the Company’s compensation programs.
The Company believes that this process for risk oversight process is appropriate in light of the Company’s business, size, and active senior management participation, including by the Chief Executive Officer,CEO, in managing risk and holding regular discussions on risk with the Audit Committee, the CompensationHuman Capital Committee, and the Board.
CYBERSECURITY
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Corporate Governance
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We are subject to technology risks, including failures, security breaches, and cybersecurity risks, whichthat could harm our business, damage our reputation, and increase our costs in an effort to protect against such risks. Our cybersecurity program includes the following elements:
Element | Strategy |
Technology | We employ a layered “defense, detect, and respond” strategy. |
Benchmarking and External Engagement | We benchmark our security practices against other organizations and are active in the information security community. |
Third-Party Assessments | We engage a range of outside experts to regularly assess our organizational security programs, processes, and capabilities. |
Internal Assessments | We regularly test and improve our information systems through security risk and compliance review, user access campaigns, and other strategies. |
PRIVACY
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Our Privacy PolicyPolicies and Privacy StatementStatements govern our treatment of customer data. Our policies provide explanations of the types of customer personal information we collect, how we use and share that information, and the measures we take to protect the security of that information. Our policies provide multiple points of contact through which our customers may initiate inquiries, requests, and raise concerns to us regarding our collection, sharing, and use of their personal data. Our privacy policies and practices in the European Union were updated in 2018 in response to the EU Global Data Protection Regulation (GDPR)GDPR requirements. OurSimilarly, our privacy statements and practices in the United States are currently being reviewedwere updated in response to the requirements of the California Consumer Privacy Act (CCPA),CCPA, which is scheduled to comecame into force in January 2020.
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Code of Business Conduct
GOVERNANCE
CODE OF BUSINESS CONDUCT
The Company has adopted a Code of Business Conduct forapplicable to directors, officers, and all other employees, including its Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer.team members. The Company periodically reviews the Code of Business Conduct and revises it, as appropriate. A copy of the Code of Business Conduct is available on the corporate governance section of the Company’s corporate website atfootlocker.com/corp. You may obtain a printed copy of the Code of Business Conduct by writing to the Secretary at the Company’s headquarters.
Any waivers of the Code of Business Conduct for directors and executive officers must be approved by the Audit Committee. The Company promptly discloses amendments to the Code of Business Conduct is available at investors.footlocker-inc.com/cobc, and anyall current waivers of the Code of Business Conduct for directors and executive officers on the corporate governance section of the Company’s corporate websiteare available atinvestors.footlocker-inc.com/cobcwaiversfootlocker.com/corp.
Global Sourcing GuidelinesGLOBAL SOURCING GUIDELINES
The Company has adoptedWithout a sound commitment to human rights and implementation through due diligence, jobs can be precarious, compensation can be below a living wage, and individuals can be subjected to modern day slavery, among a range of other potential impacts. Therefore, as part of our ESG program, we have policies, processes, and practices in place to systematize our human rights approach and how we respond to serious allegations. This is a public good for all stakeholders.
Our Global Sourcing Guidelines require all of our suppliers to respect certain employment standards that set outwe believe should be universal, notwithstanding more relaxed standards applicable(if any) imposed by law. In the selection of our suppliers, we work hard to choose reputable business partners who are committed to our ethical standards and business practices. The Global Sourcing Guidelines are distributed annually to each of our suppliers and each supplier agrees that, by accepting orders from us, it will abide by and implement its terms and require the productionsame from each of its subcontractors. Each of our suppliers acknowledges that its failure to honor these guidelines will compel us to reevaluate, and possibly terminate, our business relationship with them. The Global Sourcing Guidelines are an integral part of our purchase agreements with suppliers, and to assure conformity with the Global Sourcing Guidelines, we reserve the right to make periodic, unannounced inspections of their facilities, and suppliers agree to maintain and provide upon request all products sold in our stores. documentation necessary to demonstrate compliance.
Our Global Sourcing Guidelines provide the following:
Standard | Policy |
Employment | We will only do business with suppliers whose workers are, in all cases, present voluntarily, compensated fairly, allowed the right of free association, and who are not put at risk of physical harm, discriminated against, or exploited in any way. For additional information regarding our commitment to human rights, see our Global Human Rights Statement available at investors.footlocker-inc.com/humanrights. |
Child Labor | Child labor is not permissible. |
Forced Labor | Forced labor, whether in the form of prison labor, involuntary or slave labor (including human trafficking), indentured labor, bonded labor, or otherwise is not permissible. Employment must always be on a voluntary basis. |
Wages and Benefits | We will only deal with suppliers who compensate their employees fairly by providing wages, overtime premiums, and benefits that, at the very least, comply with legally-mandated minimum standards. |
Working Hours | We will only deal with suppliers who maintain reasonable work hours, not exceeding prevailing local standards, or any maximum prescribed by applicable laws. |
Health and Safety | We will only deal with suppliers who provide their employees with a safe and healthy work environment, designed to prevent accidents and injury to health arising out of or occurring in the course of work. At a minimum, we require that suppliers comply with all applicable, legally-mandated standards for workplace health and safety. For additional information regarding our commitment to health and safety, see our Global Occupational Health and Safety Statement available at investors.footlocker-inc.com/safety. |
Nondiscrimination | We believe that employment should be based on ability and not on belief or any other personal characteristics. We will only deal with suppliers who do not practice discrimination in employment, including in hiring, salary, benefits, advancement, discipline, termination, retirement, or in other aspects of employment on the basis of race, color, nationality, ethnic origin, gender, religion, age, sexual orientation, disability, or similar factors. |
Harassment and Abuse | We expect all employees to be treated with respect and dignity. We will not deal with suppliers whose employees are subjected to physical, sexual, psychological, or verbal harassment or abuse. |
Freedom of Association | We expect all of our suppliers to grant their employees the right to choose to affiliate with legally-sanctioned organizations or associations without interference. |
Subcontracting | Our suppliers may not utilize subcontractors to manufacture our products without our prior written approval and only after the subcontractor has agreed to comply with the Global Sourcing Guidelines. |
The Company periodically reviews the guidelines and revises them, as appropriate. The Global Sourcing Guidelines are available on the corporate governance section of the Company’s corporate website atfootlocker.com/corpinvestors.footlocker-inc.com/gsg. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.
Succession Planning
The Board engages in an effective planning process to identify, evaluate, and select potential successors to the Chief Executive Officer and other members of senior management. The Chief Executive Officer reviews senior management succession planning with the Board. Each director has complete and open access to any member of management. Members of management, including those several levels below senior management, are invited regularly to make presentations at Board and committee meetings and meet with directors in informal settings to allow the directors to form a more complete understanding of the executives’ skills and character.
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Corporate GovernanceGOVERNANCE
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Shareholder Engagement and VotingWHY WE ENGAGE
The Board’s relationship with shareholders is an important part of the Company’s success. The Board believes it is important to foster long-term relationships with shareholders and understand their perspectives. The Board has a long tradition of engaging with shareholders. The Board values an open dialogue with shareholders, and the Board believes that regular communication is a critical part of the Company’s long-term success. Through these activities, the Board discusses the Company’s corporate governance, executive compensation programs, ESG, and other topics of interest to shareholders. We value ouralso closely monitor policy statements and areas of focus for shareholders. These engagement efforts allow the Board to better understand the Company’s shareholders’ viewspriorities and insights, which is why last year we extended our proactive shareholder engagement programperspectives and provide the Board with a specific focus onuseful input concerning the Company’s compensation, corporate governance, and compensation. ESG practices.
The Board is committed to:
► | Accountability. Drive and support leading corporate governance and board practices. |
► | Transparency. Maintain high levels of transparency on a range of financial, governance, and ESG issues to build trust and sustain two-way dialogue. |
► | Engagement. Proactively engage with shareholders and proxy advisory firms on a range of topics to identify emerging trends and issues to inform the Board’s thinking and approach. |
This shareholder engagement program complements the ongoing dialogue throughout the year among our shareholders and our Chief Executive Officer, Chief Financial Officer, and Investor Relations team on our financial and strategic performance. Our engagement program is designed to reach out to our shareholders and hear their perspectives about issues that are important to them, both generally and with regard to the Company, and gather feedback. We believe that this engagement program promotes transparency between the Board and our shareholders and builds informed and productive relationships.
Beginning inWHO WE ENGAGE
During the fall of 2018,2021–22 season, our Lead Independent Director, General Counsel, and a memberthe head of managementour global ESG leadership team will have met individually with sevenshareholders representing approximately 30% of our larger shareholders,total shares outstanding, as well as proxy advisory firms, and discussed topics such as board refreshment and composition, the board evaluation process, boardroom and company culture, executive compensation, and environmental, social, and governance topics. firms.
TOPICS OF ENGAGEMENT
► | Board Refreshment and Composition | ► | Human Capital Management |
► | Board Evaluation Process | ► | Executive Compensation Programs |
► | Boardroom and Company Culture | ► | ESG |
HOW WE HAVE BEEN RESPONSIVE TO ENGAGEMENT
The Lead Independent Director sharedshares the feedback gained from theseour shareholder engagement meetings with the full Board and the Nominating and GovernanceResponsibility Committee, as well as compensation-specific feedback with the Compensation Committee,Human Capital Committee. In recent years, we have taken a number of actions based on shareholder feedback to strengthen our governance practices, global ESG program, and asdisclosure. For example, the Board voluntarily adopted proxy access, amended our By-Laws to implement a result ofmajority voting standard in uncontested director elections, and added the feedback, enhancements have been madeDirector Nominees’ Skillset Matrix to this proxy statementProxy Statement to further improve transparency. As reflected indescribe each director’s qualifications. The Company also enhanced its ESG disclosure by publishing an Impact Report, which is presented consistent with the following engagement cycle, the Company overseesSASB reporting standards and TCFD reporting framework and is available at investors.footlocker-inc.com/impactreport. These examples evidence our continued commitment to remain responsive on a rigorous and comprehensivevariety of shareholder engagement process:
concerns. Please continue to share your thoughts or concerns at any time. The Board has established a process to facilitate communication by shareholdersshareholder communications with the Board, described below.
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GOVERNANCE
Communications with the BoardCOMMUNICATIONS WITH THE BOARD
Shareholders and other interested parties who wish to communicate directly with the non-managementindependent directors of the CompanyBoard should send a letter to the Board. The Procedures for Communications with the Board of Directors, c/o Secretary, Foot Locker, Inc., 330 West 34th Street, New York, New York 10001.
Theare available at investors.footlocker-inc.com/boardcomms. Our Secretary will promptly send a copy of the communication to the Lead Independent Director, who may direct theour Secretary to send a copy of the communication to the other non-managementindependent directors and may determine whether a meeting of the non-managementindependent directors should be called to review the communication.
A copy of the Procedures for Communications with the Board of Directors is available on the corporate governance section of the Company’s corporate website atfootlocker.com/corpMAJORITY VOTING IN THE ELECTION OF DIRECTORS. You may obtain a printed copy of the procedures by writing to the Secretary at the Company’s headquarters.
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Corporate Governance
Majority Voting in the Election of Directors
Directors must be elected by a majority of the votes cast in elections for which the number of nominees for election does not exceed the number of directors to be elected. A plurality vote standard applies to contested elections where the number of nominees exceeds the number of directors to be elected. Our Corporate Governance Guidelines provide that any incumbent director who does not receive a majority of the votes cast in an uncontested election is required to tender his or hertheir resignation for consideration by the Nominating and GovernanceResponsibility Committee. The Nominating and GovernanceResponsibility Committee will make a recommendation to the Board whether to accept or reject the resignation, or whethertake other action should be taken.action. The director who tenders his or hertheir resignation will not participate in the Committee’sResponsibility Committee or the Board’s decision. In determining its recommendation to the Board, the Nominating and GovernanceResponsibility Committee will consider all factors that it deems relevant. Following such determination, the Company will promptly publicly disclose publicly the Board’s decision, including, if applicable, the reasons for rejecting the tendered resignation.
Under our proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning at least 3% of the Company’s outstanding Common Stock continuously for at least three years as of the date of the notice of nomination, may nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board, whichever is greater (subject to certain limitations set forth in the By-Laws), provided that the shareholder(s) and nominee(s) satisfy the requirements specified in the By-Laws.
Environmental, Social, and Governance Highlights
Foot Locker recognizes the importance of environmental, social, and governance (ESG) issues to shareholders and formed a global cross-functional team, including Legal, Human Resources, Supply Chain, Sourcing, and Real Estate/Construction, among other functions, to monitor our ESG efforts. The Board oversees our ESG program and receives regular updates from management.
Foot Locker’s ESG priorities are centered onOpportunity;Community;Worker Dignity; andSustainability.
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We aim to create opportunities for all of our employees.
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Corporate Governance
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Corporate Governance
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Corporate Governance
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Corporate Governance
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CommitteesOur Board consists of individuals from a diverse range of backgrounds—in terms of gender, age, ethnicity, skills, and business and Board experience—with an equally diverse range of perspectives. What our Board shares is a common desire to support and oversee management in achieving the BoardCompany’s purpose to inspire and empower youth culture.
The Board has delegated certain duties to its committees, which assist the Board in carrying out its responsibilities. There are five standing committees of the Board. Each independent director serves on at least two committees. The key oversight responsibilities of the committees, the current committee memberships, and the number of meetings held during 2018 are described below.
The Board has adopted charters for each of the Audit Committee the Compensation Committee, the(investors.footlocker-inc.com/audit), Finance Committee (investors. footlocker-inc.com/finance), Human Capital Committee (investors.footlocker-inc.com/comp), and the Nominating and Governance Committee. Copies of the charters for these committees are available on the corporate governance section of the Company’s corporate website atResponsibility Committee (investors.footlocker-inc.com/govfootlocker.com/corp). You may also obtain printed copies of these charters by writing to the Secretary at the Company’s headquarters.
As a general principle, the Board believes that the periodic rotation of committee and committee chair assignments on a staggered basis is desirable and provides an opportunityopportunities to foster diverse perspectiveperspectives, develops further the depth and develop breadth of knowledge within the Board.Board, and prepares the Board for future director succession. In 2018,May 2021, Mr. FeldmanMcKenna rotated off as Chair of the CompensationFinance Committee, remainingand was replaced by Mr. Oakland, and Mr. Oakland rotated off as a memberChair of the Responsibility Committee, and was replaced by Mr. Payne. In February 2022, Ms. Underhill took onDrosos was added to the role of Committee Chair.Audit and Finance Committees.
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BOARD OF DIRECTORS |
COMMITTEES |
The key oversight responsibilities of the committees, the current committee memberships, and the number of meetings held during 2021 are as follows: |
![]() | AUDIT GUILLERMO G. | Other Members: | 9 meetings in 2021 |
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KEY OVERSIGHT RESPONSIBILITIES
●► appoints the independent auditors ●► approves the independent auditors’ compensation ●► assists the Board in fulfilling its oversight responsibilities in the following areas: ○► accounting policies and practices ○► the integrity of the Company’s financial statements ○► compliance with legal and regulatory requirements ○► the Company’s risk assessment and risk management policies ○► cybersecurity ○
► | the qualifications, independence, and performance of the independent auditors |
○► the qualifications, performance, and compensation of the internal auditors ○► reviews and monitors compliance with the Company’s Code of Business Conduct● ► establishes procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting and audit controls, and auditing matters ► reviews and discusses risk assessments from management with respect to ESG-related risks, and relevant ESG metrics and attestations associated with these metrics
This committee consists of six independent directors, as independence is defined under the SEC and NYSE rules applicable to audit committee members. All of the members meet the expertise requirements under the NYSE rules. The Board has determined that Mr. McKenna qualifies as an “audit committee financial expert,” as defined by the rules under the Exchange Act, through his relevant experience as a former senior financial executive of a large multinational corporation. The Board believes that there are other directors who would also qualify for this designation and the Board will designate a new “audit committee financial expert” upon Mr. McKenna’s retirement.
The Audit Committee Reportappears on page 101.
This committee consists of four independent directors, as independence is defined under the U.S. Securities and Exchange Commission (the “SEC”) and NYSE rules applicable to audit committee members. All of the members meet the expertise requirements under the NYSE rules. The Board has determined that Mr. McKenna qualifies as an “audit committee financial expert,” as defined by the rules under the Exchange Act, through his relevant experience as a former senior financial executive of a large multinational corporation.
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RICHARD A. | Other Members: | No meetings in 2021
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KEY OVERSIGHT RESPONSIBILITY
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Board of Directors
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| Other Members: | 5 meetings in 2021 |
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KEY OVERSIGHT RESPONSIBILITIES
●► reviews the Company’s financial plans and objectives ●► reviews and makes recommendations to the Board regarding the Company’s annual operating budget and two-year plans ● ► reviews the Company’s allocation of capital, annual capital budget for, and policies related to, capital and other expenditures●► reviews and makes recommendations to the Board regarding the Company’s uses of cash, including capital expenditures, stock and bond repurchases, and dividend payments ●► reviews and makes recommendations to the Board regarding the Company’s cash requirements and sources of cash, including debt or equity issuances, revolving credit facilities, or other debt instruments or facilities ●
► | reviews the Company’s insurance and self-insurance reserves |
●► reviews the Company’s derivatives policy and its use of derivatives ●► reviews and makes recommendations to the Board regarding proposed mergers, combinations, acquisitions, offers to purchase the Company’s shares or significant assets, divestitures, and strategic investments ●► reviews the Company’s Corporate Development Approvalcorporate development approval process●► reviews reports from the Company’s Retirement Plan Committee regarding the asset allocation and investment performance of the Company’s North America pension funds
2022 PROXY STATEMENT | ![]() 41 |
BOARD OF DIRECTORS
![]() | HUMAN CAPITAL KIMBERLY | Other Members: | 4 meetings in 2021 |
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KEY OVERSIGHT RESPONSIBILITIES
► | determines the CEO’s compensation |
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| reviews and approves the executive officers’ and corporate officers’ compensation |
► | approves team members’ equity compensation |
► | assesses risk in relation to the Company’s compensation policies and practices |
► | administers the Company’s compensation plans |
► | reviews and makes recommendations to the Board concerning executive development and succession |
► | reviews non-employee directors’ compensation and makes recommendations to the Board concerning the form and amount of non-employee directors’ compensation |
BoardThis committee consists of Directorsfour independent directors, as independence is defined under the NYSE rules applicable to compensation committee members.
See the CD&A beginning on page 50 for a discussion of the Human Capital Committee’s procedures for determining compensation, and the Human Capital Committee Report on page 69.
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ULICE | Other Members: |
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KEY OVERSIGHT RESPONSIBILITIES
● ► oversees corporate governance matters affecting the Company, including developing and recommending criteria and policies relating to director service and tenure ● ► establishes criteria for Board candidates ● ► retains a third-party search firm from time to time to identify potential director candidates ●► selects new director nominees to recommend to the Board ●► considers the re-nomination of existing directors after it conducts an annual review of each director’s qualifications, experience, and independence ●
► | reviews membership on the Board committees and, after consultation with the |
● oversees the annual self-assessment process for the Board and committees
●► reviews trends and governance with regard to non-employee directors'nonemployee directors’ compensationShareholders who wish to recommend candidates for Board membership may contact► oversees the NominatingCompany’s ESG initiatives and Governance Committeereviews and considers related public reporting, including the Company’s annual Impact Report, and the role of ESG in the manner described on page 19 underCommunications with the Board.Company’s strategy
Shareholders who wish to recommend candidates for Board membership may contact the Responsibility Committee in the manner described under Communications with the Board on page 39. Shareholder nominations must be made according to the procedures required under, and within the timeframe described in, the By-Laws and underDeadlines and Procedures for Nominations and Shareholder Proposals for the 2023 Annual Meeting on page 104. Shareholder-recommended candidates and shareholder nominees whose nominations comply with these procedures will be evaluated by the Responsibility Committee in the same manner as the Company’s nominees.
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BOARD OF DIRECTORS
This discussion relates to the compensation we pay to non-employee directors. We do not pay additional compensation to any director for service on the Board or any committee who is also a Company employee.
KEY PRINCIPLES OF DIRECTOR COMPENSATION PROGRAM
The Company compensates its non-employee directors for their service according to the following principles:
Category | Description |
Pay Position | The targeted pay position for our outside directors’ compensation program is the median of the retail and general industry market reference points. |
Peer Groups | When establishing reference points for market comparisons of our outside directors’ compensation program, we consider the retail peer group used for our executive compensation purposes and general industry data for similarly-sized companies. See Benchmarking Approach on page |
Pay Evaluation Perspective | When assessing the competitive position of our outside directors’ compensation program, the primary focus is on total targeted compensation opportunity. |
Pay Mix | Our outside directors’ compensation program consists of a balance of cash and |
Differentiation | The outside directors’ compensation provides additional compensation for leadership positions on the |
Stock Ownership | Significant stock ownership guidelines established for outside directors encourage better alignment with shareholders’ interests, with compliance measured at least annually, as described further in Stock Ownership Guidelines beginning on page 32. |
Deferral Opportunities | Non-employee directors may elect to receive all or a portion of the cash component of their annual retainer fee, including committee chair retainers, in the |
Total Compensation Limits | Meaningful limits on outside directors’ compensation have been established to ensure consistency with sound governance practices. See Components of Director Compensation Program on page 44 for further information. |
Regular Review | The Responsibility Committee conducts regular reviews of governance practices and trends in directors’ compensation to ensure consistency of our program with sound governance practices and makes recommendations, as appropriate, to the |
2022PROXY STATEMENT | ![]() 43 |
BOARD OF DIRECTORS
COMPONENTS OF DIRECTOR COMPENSATION PROGRAM
The Company’s non-employee directors were paid in the following fees in 2021:
| Form of Payment | |
Annual Retainer | $150,000 | |
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Audit Committee | $25,000 | 50% cash(1) and 50% Common Stock(2) |
Finance Committee | $15,000 | |
Human Capital Committee | $25,000 | |
Responsibility Committee | $15,000 | |
Lead Independent Director Retainer | $50,000 | Cash |
Meeting Fee(3) | $2,000 per Board and committee meeting | |
RSU Award | $70,057 | RSUs(4) |
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(2) | Directors may defer all or a portion of the fee in the form of DSUs. |
(3) | The Company also reimburses reasonable expenses incurred in attending Board |
(4) | Beginning in 2022, directors may defer all or a portion of the |
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Each non-employee director’s compensation, inclusive of cash and equity, is capped at $600,000 per fiscal year. Directors are eligible to receive the same discount on purchases of merchandise from our stores, catalogs, and websites that is available to team members.
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BoardFor all compensation periods through and including fiscal 2021, six of Directorsour current directors have previously elected to defer all or a portion of one or more of their annual retainers into DSUs, and none of the current directors have elected to place any amount of their annual retainer fees into an interest account.
Director CompensationGOVERNANCE
The Nominating and GovernanceHuman Capital Committee and CompensationResponsibility Committee jointly oversee our non-employee director compensation program, and conduct annual reviews, and make recommendations for adjustments, as appropriate, to the Board. The CompensationResponsibility Committee reviews trends and governance with regard to non-employee directors’ compensation. Following consultation with the Responsibility Committee, the Human Capital Committee reviews non-employee directors’ compensation and makes recommendations to the Board concerning the form and amount of non-employee directors’ compensation. The Nominating and Governance Committee reviews trends and governance with regard to non-employee directors’ compensation.
Our non-employee directors are paid an annual retainer fee and meeting fees for attendance at each Board and committee meeting. The Lead Director and the committee chairs are each paid additional retainer fees for service in these capacities. Our non-employee directors’ compensation program consists of a balance of cash and equity, with an emphasis on equity over cash.
In connection with the review conducted in fiscal year 2018,2021, the independent outside consultant on director compensation retained by the Compensation Committeeconsultant assessed the compensation paid to our non-employee directors against non-employee director compensation trends and data from our company peer group, including overall trends and governance principles, market competitiveness of our program, and the mix of cash and equity provided under our program. After consultation with the independent outside consultant, the Nominating and Governance Committee and Compensation Committee foundFollowing this review, no changes were made to the non-employee director compensation program to be appropriate, and no changes toin 2021 because the compensation program were recommended or implemented in 2018, aswas competitive with the compensation approximates theCompany’s peer group median and the pay mix is aligned with peer and broad market practice.
In February 2019, on the recommendationmedian. Other aspects of the Nominating and Governance Committee,program, including the Board placed a cap of $600,000 on non-employee directors’ compensation, inclusivemix of cash and equity, forwere found to be aligned with industry norms and best practices.
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BOARD OF DIRECTORS
FISCAL 2021 DIRECTOR COMPENSATION
The amounts paid to each non-employee director for fiscal 2021, including amounts deferred under the Stock Incentive Plan, and the RSUs granted to each fiscal year.director are reported in the tables below:
Key Principles of Director Compensation Program
(a)
| (b) Fees Earned or Paid in Cash ($) | (c) | (d)
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Clark(2) | 41,004 | 31,246 | 72,250 |
Feldman | 111,058 | 175,201 | 286,259 |
Marmol | 131,547 | 157,510 | 289,057 |
McKenna | 124,165 | 148,142 | 272,307 |
Nicosia | 112,808 | 163,878 | 276,686 |
Oakland | 118,500 | 158,193 | 276,693 |
Payne | 124,262 | 150,733 | 274,995 |
Underhill | 121,547 | 157,510 | 279,057 |
Walker | 111,000 | 146,035 | 257,035 |
Young | 100,250 | 275,378 | 375,628 |
(1) |
Common Stock |
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Board of Directors
Components of Director Compensation Program
Our non-employee directors are paid an annual retainer fee and meeting fees for attendance at each Board and committee meeting. The Lead Director and the committee chairs are each paid additional retainer fees for service in these capacities. We do not pay additional compensation to any director who is also a Company employee for service on the Board or any committee. None of the current independent directors is entitled to receive any retirement benefits.
Below is a summary of the fees paid to the non-employee directors in 2018:
Deferral Election
Non-employee directors may elect to receive all or a portion of the cash component of their annual retainer fee, including committee chair retainers, in the form of DSUs or to have these amounts placed in an interest account. Directors may also elect to receive all or part of the stock component of their annual retainer fee in the form of DSUs. A DSU is an accounting equivalent of one share of Common Stock. The interest account is a hypothetical investment account bearing interest at the rate of 120% of the applicable federal long-term rate, compounded annually, and set as of the first day of each plan year. None of the current directors have elected to place any amount of their annual retainer fee in an interest account.
Directors’ Retirement Plan
The Directors’ Retirement Plan was frozen as of December 31, 1995. No current directors are eligible to participate in this plan. Currently, two former directors participate in the plan. The retirement benefit under this plan is $24,000 per year, payable quarterly for the lesser of 10 years after the director leaves the Board or until the director’s death.
Miscellaneous
We reimburse non-employee directors for reasonable expenses incurred in attending Board and committee meetings, other meetings with management, and continuing education programs, including their transportation, hotel accommodations, and meals. Directors and their immediate families are eligible to receive the same discount on purchases of merchandise from our stores, catalogs, and websites that is available to employees.
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Board of Directors
Fiscal 2018 Director Compensation
The amounts paid to each non-employee director for fiscal 2018, including amounts deferred under the Company’s Stock Incentive Plan, and the RSUs granted to each director are reported in the tables below:
Director Compensation
(a) | (b) | (c) | (d) | (e) | ||||
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | ||||
M. Clark | 112,028 | 139,994 | — | 252,022 | ||||
A. Feldman | 121,425 | 190,831 | — | 312,256 | ||||
J. Gilbert, Jr.(2) | 39,384 | 29,115 | 18,000 | (3) | 86,499 | |||
G. Marmol | 130,550 | 152,472 | — | 283,022 | ||||
M. McKenna | 125,552 | 147,470 | — | 273,022 | ||||
S. Oakland | 111,552 | 149,616 | — | 261,168 | ||||
U. Payne, Jr. | 104,028 | 139,994 | — | 244,022 | ||||
C. Turpin | 104,028 | 201,456 | — | 305,484 | ||||
K. Underhill | 115,153 | 139,994 | — | 255,147 | ||||
D. Young | 120,417 | 263,200 | — | 383,617 |
Notes to Director Compensation Table
the grant date fair value, determined in accordance with FASB ASC 718, for dividend equivalents paid on DSUs and credited in the form of additional DSUs, made to Messrs. Feldman, Oakland, Payne, and |
2022PROXY STATEMENT | ![]() 45 |
BOARD OF DIRECTORS
The following table sets forth the grant date fair value of the above stock awards granted to our directors in fiscal year 2018:2021:
Name | Stock Fees (including DSUs) ($) | RSUs ($) | Dividend Equivalents ($) | Total ($) | ||||
M. Clark | 69,972 | 70,022 | — | 139,994 | ||||
A. Feldman | 82,450 | 70,022 | 38,359 | 190,831 | ||||
J. Gilbert, Jr. | 29,115 | — | — | 29,115 | ||||
G. Marmol | 82,450 | 70,022 | — | 152,472 | ||||
M. McKenna | 77,448 | 70,022 | — | 147,470 | ||||
S. Oakland | 77,448 | 70,022 | 2,146 | 149,616 | ||||
U. Payne, Jr. | 69,972 | 70,022 | — | 139,994 | ||||
C. Turpin | 69,972 | 70,022 | 61,462 | 201,456 | ||||
K. Underhill | 69,972 | 70,022 | — | 139,994 | ||||
D. Young | 106,000 | 70,022 | 87,178 | 263,200 |
Stock Fees | RSUs | DSUs | Total | |
Name | ($) | ($) | ($) | ($) |
Clark(2) | 31,246 | — | — | 31,246 |
Feldman | 74,942 | 70,057 | 30,202 | 175,201 |
Marmol | 87,453 | 70,057 | — | 157,510 |
McKenna | 78,085 | 70,057 | — | 148,142 |
Nicosia | 74,942 | 70,057 | 18,750 | 163,878 |
Oakland | 82,500 | 70,057 | 5,636 | 158,193 |
Payne | 79,637 | 70,057 | 1,039 | 150,733 |
Underhill | 87,453 | 70,057 | — | 157,510 |
Walker | 75,000 | 70,057 | 978 | 146,035 |
Young | 131,250 | 70,057 | 74,071 | 275,378 |
(2) Ms. Clark served as a director during 2021 until her retirement from the Board in May 2021.
For additional information on the valuation assumptions, refer to Note 21 to the Company’s financial statements in our 2018 Annual Report, on Form 10-K.
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Board of Directors
As of the end of fiscal year 2018,2021, the number of RSUs and DSUs held by our directors waswere as follows:
Name | RSUs Outstanding on 02/02/19 (#) | DSUs Outstanding on 02/02/19 (#) | ||
M. Clark | 1,555 | — | ||
A. Feldman | 1,555 | 28,279 | ||
G. Marmol | 1,555 | — | ||
M. McKenna | 1,555 | — | ||
S. Oakland | 1,555 | 1,582 | ||
U. Payne, Jr. | 1,555 | — | ||
C. Turpin | 1,555 | 45,310 | ||
K. Underhill | 1,555 | — | ||
D. Young | 1,555 | 64,779 |
RSUs | DSUs | |
Name | (#) | (#) |
Feldman | 1,136 | 30,603 |
Marmol, McKenna, and Underhill | 1,136 | — |
Nicosia | 1,136 | 433 |
Oakland | 1,136 | 5,981 |
Payne | 1,136 | 1,314 |
Walker | 1,136 | 1,237 |
Young | 1,136 | 75,523 |
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Directors and Officers Indemnification and InsuranceBOARD OF DIRECTORS
We have purchased directors and officers liability and corporation reimbursement insurance from a group of insurers comprising ACE American Insurance Co. (Chubb), Zurich American Insurance Co., North American Specialty Insurance Co. (SwissRe), St. Paul Mercury Insurance Company (Travelers), Freedom Specialty Insurance Co. (Nationwide), Berkley Insurance Co., Argonaut Insurance Co., Beazley Insurance Company, Inc., XL Catlin Bermuda Ltd., National Union (AIG), and Endurance American Insurance Co. These policies insure the Company and all of its wholly-owned subsidiaries. They also insure all of the directors and officers of the Company and the covered subsidiaries. The policies were written for a term of 12 months, from October 12, 2018 until October 12, 2019. The total annual premium for these policies, including fees and taxes, is $914,448. Directors and officers of the Company, as well as all other employees with fiduciary responsibilities under the Employee Retirement Income Security Act of 1974, as amended, are insured under policies issued by a group of insurers comprising Zurich American Insurance Co., Travelers Casualty, Surety Company of America, and ACE American Insurance Co. (Chubb), which have a total premium, including fees and taxes, of $330,250 for the 12-month period ending October 12, 2019.DIRECTORS AND OFFICERS INDEMNIFICATION AND INSURANCE
The Company has entered into indemnification agreements with its directors and officers, as approved by shareholders at the 1987 Annual Meeting.annual meeting.
We have purchased directors and officers liability and corporation reimbursement insurance from the following group of insurers:
► ACE American Insurance Co. (Chubb) ► American International Group (AIG) ► Arch Insurance Co. ► Argonaut Insurance Co. (Argo RE) ► Beazley Insurance Co. ► Berkley Insurance Co. (W.R. Berkley) | ► Chubb Bermuda Insurance Ltd. (Chubb) ► Continental Casualty Co. (CNA) ► Endurance American Insurance Co. (Sompo International) ► Freedom Specialty Insurance Co. (Nationwide) | ► Hartford Accident & Indemnity (The Hartford) ► Markel Insurance Co. ► North American Specialty Insurance Co. (Swiss Re) ► Zurich American Insurance Company |
These policies insure all of the directors and officers of the Company and its covered subsidiaries, as well as the Company and all of its wholly-owned subsidiaries. The policies were written for a 12-month term, expiring October 12, 2022. The total annual premium for these policies, including fees and taxes, is $1,553,815.
Directors and officers of the Company, as well as all other team members with fiduciary responsibilities under ERISA, are insured under policies issued by the following group of insurers:
► ACE American Insurance Co. (Chubb) ► Continental asualty Co. (CNA) | ► Endurance American Insurance Co. (Sompo International) | ► Hudson Insurance Co. (Euclid) ► Zurich American Insurance Co. |
The policies were written for a 12-month term, expiring October 12, 2022. The total annual premium for these policies, including fees and taxes, is $251,168.
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The Board is asking
In accordance with the requirements of Section 14A of the Exchange Act and the related SEC rules, our shareholders have the opportunity to approve, on acast an annual non-binding, advisory basis,vote to approve the compensation of our NEOs, as described in this Proxy Statementdisclosed beginning on pages 33 through 67.page 50 (a “Say-on-Pay” vote). We currently hold our “Say-on-Pay” vote every year. Shareholders have an opportunity to cast an advisory vote on the frequency of Say-on-Pay votes at least every six years. The next advisory vote on the frequency of the Say-on-Pay vote is expected to occur at the 2022 Annual Meeting.
As described in detail underin the CD&A beginning on page 33,50, our compensation program is designed to attract, motivate, and retain talented executives responsible for leading our strategic priorities and, in turn, deliver value to our shareholders. Our executive compensation program ties pay closely to performance. A significant portion of the compensation provided to the NEOs is based upon the Company’s performance or the performance of our share price, and we believe this compensation structure closely aligns the interests of our NEOsexecutives with the interests of our shareholders. The more seniorhigher an executive’s position, the greater portionpercentage of his or hertheir compensation that is tied to performance.
At the 2018 Annual Meeting, almost 95% of the votes cast on the advisory vote to approve the compensation of our NEOs were voted in favor of the proposal.“Say-on-Pay” received nearly 96% support at last year’s annual meeting. The CompensationHuman Capital Committee believes this affirms our shareholders’ support for the Company’s approach to executive compensation. We also have discussions with many of our shareholders on an ongoing basis regarding various corporate governance topics, including executive compensation, and take into account the views of shareholders regarding the design and effectiveness of our executive compensation program. We believe you should read the CD&A, beginning on page 50, and the compensation tables beginning on page 3370, in determining whether to approvevote in favor of this proposal.
The Board recommends approval ofShareholders are being asked to approve the following resolution:resolution at the Annual Meeting:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of our NEOs, as disclosed in the Company’s Proxy Statement for the 2019 Annual Meeting pursuant to the SEC’s compensation disclosure rules, including the CD&A, the 20182021 Summary Compensation Table, and the other related tables and disclosures.”
As an advisory vote, this proposal is not binding on the Company, the Human Capital Committee, or the Board. However, the Human Capital Committee and the Board value the opinions expressed by shareholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions regarding our NEOs.
✔The Board recommends a voteFORProposal 2.
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COMPENSATION DISCUSSION AND ANALYSIS
Compensation Discussion and Analysis
This Compensation Discussion and Analysis, or CD&A describes our compensation philosophy and objectives, and provides context for compensation decisions for our NEOs, and discussesdescribes how our 20182021 compensation is linked to performance against the goals that were established for the annualAnnual Incentive Plan and long-term incentive compensation programs. LTI.
For 2018,2021, our NEOs were as follows:
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RICHARD A. | ANDREW E. | FRANKLIN R. | W. SCOTT | ANDREW I. | ||
JOHNSON | PAGE(1) | BRACKEN(2) | MARTIN(3) | GRAY | ||
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Executive Vice | Executive Vice | Executive Vice | Executive | |||
President and | President and | President and | President, | Vice President | ||
Chief Executive | Chief Financial | Chief Operating | Chief Strategy | and Chief | ||
Officer | Officer | Officer | and Corporate | Commercial | ||
Development | Officer | |||||
(1) | Mr. Page joined the Company as Executive Vice President and Chief Financial Officer |
Mr. |
(3) | W. Scott Martin served as Executive Vice President and Chief Executive |
Table of Contents
LAUREN B. PETERS(4) | VIJAY TALWAR(5) | |
Former Executive Vice President and | Former Executive Vice President and | |
Chief Financial Officer | Chief Executive Officer─EMEA | |
(4) | Ms. Peters served as Executive Vice President and Chief Financial Officer until April 12, 2021, and retired from the Company on May 1, 2021. |
(5) | Mr. Talwar served as Executive Vice President and Chief Executive Officer—EMEA until November 17, 2021, and departed from the Company on December 16, 2021. |
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Executive CompensationEXECUTIVE COMPENSATION
Executive SummaryFISCAL 2021 HIGHLIGHTS
Despite the many challenges we confronted and are continuing to experience—including the COVID-19 pandemic, supply chain disruption, inflationary pressures, and an evolving geopolitical environment—we delivered record performance in 2021, which reflects the ongoing momentum we have built in our business. Highlights include the following:
(1) A reconciliation to GAAP is provided beginning on page 21 of our Annual Report, which is available at investors.footlocker-inc.com/ar.
Our Compensation Committee, comprised of five independent directors, oversees the executive compensation program. We design our executive2021 compensation program, to attract, motivate, and retain talented executives responsible for leadingas outlined in detail in the Company’s short- and long-term strategic priorities and, in turn, deliver valuefollowing pages, was tied to our shareholders. key objectives, demonstrating our strong connection between pay and performance.
As part of a planned succession strategy, in 2021, we recruited Mr. Page from outside the Company to serve as Executive Vice President and Chief Financial Officer, replacing Ms. Peters, who retired from the Company. Also, in 2021, we made certain organizational enhancements, including elevating Mr. Bracken to the new role of Executive Vice President and Chief Operating Officer, to advance our long-term global growth and power our omni-channel ecosystem. The addition of a Chief Operating Officer creates a more streamlined and agile organizational structure that builds on the success of our geo-focused growth strategy. Both of these organizational enhancements underscore our focus on enhancing our finance and operations teams to drive organizational productivity.
CHIEF FINANCIAL OFFICER
In connection with Mr. Page’s employment, the Human Capital Committee approved a compensation package that reflects the competition for talented senior finance executives, particularly in retail companies. The Human Capital Committee set his annual base salary at $615,000. Mr. Page was (1) granted a sign-on equity award in the form of RSUs having a value on the grant date of $750,000, and (2) granted a sign-on cash payment in the amount of $500,000 (repayable if termination occurs within two years of hire). The sign-on awards were intended to replace certain stock-based awards and other compensation that Mr. Page forfeited from prior employment in connection with his recruitment to the Company. Mr. Page is also eligible to receive Annual Incentive Plan (prorated) and LTI awards (prorated) at target of 75% and 150%, respectively, of base salary. The RSU award vests one third on each of the first three anniversaries of grant subject to continued employment with the Company through the vesting dates. Mr. Page also participated in our regular annual LTI grants commensurate with his job level.
CHIEF OPERATING OFFICER
In connection with Mr. Bracken’s promotion, the Human Capital Committee approved a compensation package that reflects the increased responsibilities of his new role as well as the competition for talented senior operating executives, particularly in our industry. The Human Capital Committee set his annual base salary at $800,000 effective November 2021. Mr. Bracken was (1) granted an equity award in the form of RSUs having a value on the grant date of $600,000, and (2) eligible to receive Annual Incentive Plan (prorated) and LTI awards at target of 100% and 200%, respectively, of base salary and prorated between these targets. The RSU award vests in full on the third anniversary of grant subject to continued employment with the Company through the vesting date.
2022PROXY STATEMENT | ![]() 51 |
EXECUTIVE COMPENSATION
![]() | At our 2021 annual meeting, nearly 96% of shares voted on the advisory vote on executive compensation supported the executive compensation program. The Human Capital Committee considered the results of the 2021 Say-on-Pay vote and our shareholders’ support of our executive compensation program in reviewing the program for 2022. See page 38 for more details on our shareholder engagement program. In light of this support, the Human Capital Committee decided to retain the general program design. Beginning in 2021, the Human Capital Committee adopted a consistent mix of LTI awards. In the future, the Human Capital Committee will continue to assess the executive compensation program against changing business conditions and shareholder feedback. Our Say-on-Pay vote is currently held every year, consistent with the preference expressed by a majority of our shareholders. |
COMPENSATION PROGRAM DESIGN AND STRUCTURE
The centerpiece of our compensation program is our pay-for-performance philosophy that aligns pay outcomes tocompensation payouts with the achievementachievements of our annual operating plan and long-term strategy, and the creation ofconsequently shareholder value. This is especially trueshowcased at senior levels of the Company where a significant portion ofCompany—particularly the CEO—for which most compensation is tied to Company performance. As shown in the charts below, 92%achievement of metrics driving the CEO’s target compensation mixCompany’s operating and 80%, on average, of the other NEOs’ target compensation mix for the compensation program represented performance-based compensation for 2018.stock performance, as described below.
CEO’s 2018 Target Compensation Mix
Average of Other NEOs’ 2018 Target Compensation Mix
Our Key Compensation Governance Policies
What We Do
Factor |
What We Do Not Do
Performance-Based | A significant proportion of the CEO’s compensation is performance-based. | |
Challenging Goals | Recent Annual Incentive Plan and PSU payouts underscore our pay-for-performance culture. For example, only twice in the past five years has the Annual Incentive Plan paid out greater than target and three of the past five PSU awards were not earned and paid out at 0%. | |
Formulaic | Our Annual Incentive Plan and PSU payouts are formulaically determined based on performance against challenging financial and operating goals. | |
Lower Realized Pay | The CEO’s five-year realized pay is expected to be lower than his five-year target compensation. | |
Peer Benchmarked | We utilize an objective set of criteria to determine peer companies and position CEO pay at the peer group median. | |
Reasonable | 2021 compensation for newly-appointed and outgoing executives was determined to be reasonable. | |
Responsive to Say-on-Pay Vote | Our Say-on-Pay support has been strong in recent years. | |
Compensation Mix | Beginning with LTI awards granted in 2021, we adopted a consistent mix of PSU awards (60%), stock option awards (20%), and RSU awards (20%). | |
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| Foot Locker, Inc. |
Executive CompensationEXECUTIVE COMPENSATION
We built positive momentumRecent Annual Incentive Plan and improvedLTI payouts underscore our financial results in 2018. Highlights include the following:
Impact of Company Performance on Annual and Long-Term Incentive Pay
Foot Locker strives to be a consistently high-performing company, with a history of setting very challenging performance goals.Only when we achieve or exceed our goals are incentive payouts earned.
Our most-recently completed performance periods illustrate our commitment to pay for performance. Overall, our 2018 fiscal year was very strong, and we were highly profitable; however, we fell short of our plan in certain areas of the business. As a result, Mr. Johnson, Ms. Peters, and Mr. Verma earned annual incentive payouts of 84.5% of their respective target awards for 2018.
Annual Bonus Plan for Corporate Executivespay-for-performance culture:
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TARGET COMPENSATION VS. REALIZED PAY(1)
Our executives’ realized pay over the past five years further evidences our pay-for-performance philosophy. Failure to achieve the challenging threshold performance goals set for our Annual Incentive Plan awards and PSU awards results in no payout earned. Also, a decrease in the Company’s stock price results in a decrease in the value of previously-awarded stock option awards—potentially to $0— and no dilution to shareholders, as well as a decrease in the value of previously-awarded RSU awards. When our stock price increases and generates positive returns for our shareholders, the increase impacts an executive’s realized pay during the present fiscal year and for prior fiscal years during which the executive received equity awards that are held or remain subject to vesting requirements. Accordingly, a significant portion of our NEOs’ compensation is closely linked to the performance of our stock over time, motivating our executives to generate positive returns for shareholders and aligning interests.
The following chart demonstrates the relationship between the target and realized values of our CEO’s compensation for the past five years:
(1) | For each year, these amounts reflect the CEO’s base salary paid, Annual Incentive Plan payouts paid, values of PSU awards earned, stock option award tranches vesting during the year, and RSU awards vesting during the year. For 2020, the CEO’s realized pay includes the value of a one-time Accelerate Future Growth award earned. |
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Executive Compensation
As division executives, Mr. Jacobs’s and Mr. Kimble’s annual incentive awards were based on their respective division’s omni-channel profit (weighted 80%) and customer connected scorecard (weighted 20%). Mr. Jacobs earned an annual incentive payout of 157.2% of his target award. Mr. Kimble did not earn a payout for 2018.
LTIP
For the two-year 2017-18 performance period under the LTIP, no payouts were earned by any of the NEOs because our performance over this two-year period did not meet the rigorous goals we established for the period.
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See pages 38 through 42 for more details on these incentive programs and performance goals.
At our 2018 Annual Meeting, almost 95% of shareholders voting on the advisory vote on executive compensation supported the executive compensation program. The Compensation Committee considered the results of the 2018 Say-on-Pay vote and our shareholders’ strong support of our executive compensation program in reviewing the program for 2019. In light of this support, the Compensation Committee decided to retain the general program design, but added new customer connected objectives to the annual incentive plan, reflecting the Company’s customer-centric priorities, and granted a new long-term incentive intended to accelerate growth and better enable the Company to compete in a rapidly changing retail landscape. In the future, the Compensation Committee will continue to assess the executive compensation program against changing business conditions and shareholder feedback. Our Say-on-Pay vote is currently held on an annual basis, consistent with the preference expressed by a majority of our shareholders.
2018 Compensation Design ChangesEXECUTIVE COMPENSATION
During the Compensation Committee’s 2018 compensation planning cycle, the Committee considered the Company’sstrategic initiatives and long-term goals, recognizing the significant disruption that was occurring in the retail industry, and discussed the actions and results that were critical to incentivize through the executive compensation program. As a result, the 2018 incentive compensation design represents a portfolio approach that is intended to motivate the right behaviors and reward achievement of our short- and long-term business results. In addition to providing incentives through the core annual cash incentive plan and LTIP, the Committee determined that an additional long-term incentive award distinctly focused on accelerating the Company’s growth, both organic and inorganic, in this disruptive environment was appropriate and in the best interests of the Company and our shareholders.
Our executive compensation program uses distinct metrics and varying time periods, which the Committee believes provide the appropriate incentives while also managing risk. The changes to the short- and long-term incentives for the NEOs, which are described below, are designed to incentivize the execution of the Company’s customer connected strategy, to accelerate our long-term growth, and to further align our executives’ and shareholders’ interests.
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Executive CompensationCOMPENSATION MIX
The CompensationHuman Capital Committee made compensation decisions for our NEOs in 2018, including setting and approving incentive compensation performance goals. In making its decisions, the Committee considered (i) the significant disruption occurring in the retail industry, (ii) each executive’s compensation components in light of his or her position and responsibilities, (iii) internal peer pay comparisons, (iv) relevant market data for comparable positions and, where applicable, year-over-year changes in market data, and (v) retention and succession planning.
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Executive Compensation
Compensation Program Design and Structure
Components of Executive Compensation Program
Another goal of the Compensation Committee isseeks to align the compensation program with both our business strategy and our shareholders’ interests. In order to achieve these objectives, our executive compensation program includes both a mix of annual and long-term, compensation, as well as a mix of cash and equity, compensation. As shown in the charts below, for 2021, 90% of the CEO’s target compensation mix, and 72%, on average, of the remaining NEOs’ target compensation mix, was variable based on performance.
CEO’s 2021 TARGET COMPENSATION | AVERAGE OF REMAINING NEOs’ 2021 TARGET COMPENSATION | |
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ANNUAL INCENTIVE PLAN PERFORMANCE METRICS | LTI PERFORMANCE METRICS | |
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COMPONENTS OF EXECUTIVE COMPENSATION PROGRAM
The key components of our executive compensation program are described in the following chart:table:
![]() 54 | Foot Locker, Inc. |
EXECUTIVE COMPENSATION
As part of its annual review of compensation, the Human Capital Committee approved base salary increases effective May 1, 2021, for Messrs. Bracken, Martin, Gray, and Talwar, as shown below, based on each NEO’s performance and a position-oriented analysis of market salaries.
Beginning in fiscal 2021, individual performance goals are aligned around the Company’s four strategic imperatives:
The Company strives for DIBs to be ingrained in our culture to ensure the Company is a world-class organization according to our customers, community leadership, and team members. To achieve this goal, all team members, including the NEOs, need to play a key role in our DIBs strategy, which is centered on five strategic pillars:
Within the Leverage the Power of Our People performance objective, all team members are measured against a DIBs goal:
2022 Proxy Statement | ![]() 55 |
EXECUTIVE COMPENSATION
Year-End 2020 | Year-End 2021 | Base Salary | |
Base Salary Rate | Base Salary Rate | Rate Increase | |
Name | ($) | ($) | (%) |
Bracken(1) | 575,000 | 800,000(1) | 39.1 |
Martin and Gray | 600,000 | 615,000 | 2.5 |
Talwar | 650,000 | 665,000 | 2.3 |
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Base SalariesANNUAL INCENTIVE PLAN
The Compensation Committee did not approve any base salary increases for the NEOs for 2018, given the Committee’s desire to provide accountability for the Company’s below-threshold performance in 2017.
In 2018,Consistent with our pay-for-performance culture, the CompensationHuman Capital Committee consideredestablished rigorous Adjusted Pre-Tax Income and NPS targets for 2021. The targets the Company’s strategic initiatives relating to customer engagement and creating desired experiences in an environment where customers have many shopping choices. Given this, theHuman Capital Committee incorporated “customer connected” objectives into the annual incentive plan to further incentivize execution of our customer-centric initiatives, in addition to the financial metrics that have historically been utilized for this performance-based plan. The financial targets are weighted 80%, and the customer connected objectives are weighted 20%.
The financial targets established by the Compensation Committee under the annual incentive plan are based upon the business plan and budget reviewed and approved each year by our Finance Committee and the Board. The financial targets applicable to Mr. Johnson, Ms. Peters, and Mr. Verma were based on the Company achieving Adjusted Pre-Tax Income of $766.8$668.4 million (which accounts for 2018, in line with80% of the Company’s financial planpayout), and strategic objectives and reflects an increasea certain NPS score (which accounts for 20% of 2.2% compared to 2017 results. Actualthe payout), each as illustrated below. We drove strong Adjusted Pre-Tax Income totaled $754.1 million for 2018.in 2021, particularly given the COVID-19 pandemic and supply chain challenges.
The Human Capital Committee established Adjusted Pre-Tax Income as one of the performance targets in connection with the Annual Incentive Plan in 2021. This was a return to our long-standing practice after the disruptions caused by COVID-19 pandemic and social unrest in 2020, which had resulted in store closures. In 2020, sales had been established as a performance metric under the Annual Incentive Plan to allow for measurement based on when stores were open. The Annual Incentive Plan Adjusted Pre-Tax Income metric is calculated by deducting the following items from our non-GAAP income: the income related to completed acquisitions ($18 million), the income associated with minority investments ($69 million), and the effect of COVID-19 on our results ($85 million).
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| Foot Locker, |
EXECUTIVE COMPENSATION
Executive CompensationFINANCIAL PERFORMANCE
ADJUSTED PRE-TAX INCOME
The Human Capital Committee established the 2021 Adjusted Pre-Tax Income target of $668.4 million based upon the business plan and budget reviewed each year by our Finance Committee and approved by the Board. Messrs. Johnson, Page, and Gray earned annual incentive payouts of 181.3% of their respective target awards based on strong performance against the goal. Mr. Page was appointed in 2021, so his payout was prorated for the 2021 performance period.
As a division executives, the 2018executive, Mr. Martin’s annual incentive targets for Mr. Jacobs and Mr. Kimbleawards were based on the Company’s Adjusted Pre-Tax Income (weighted 20%), division omni-channel profit targets(weighted 60%), and customer connected objectivesdivision NPS (weighted 20%). Mr. Martin earned an annual incentive payout of 186.7% of his target award based on strong performance against these goals.
During 2021, Mr. Bracken served as Executive Vice President and Chief Executive Officer—North America until November 15, 2021, and then as Executive Vice President and Chief Operating Officer, so his annual incentive award was prorated between division and corporate performance. Mr. Bracken earned annual incentive payouts of 178.7% and 181.3% of his prorated target awards for his division and corporate roles, respectively.
Ms. Peters and Mr. Talwar’s employment with the Company terminated prior to the end of 2021; they were, therefore, ineligible to receive annual incentive payouts.
In 2021, the Company’s Adjusted Pre-Tax Income was based on the following banners for each of the North America, divisionEMEA, and the International division, respectively, which include both store and direct-to-customer operations for these regions.Asia Pacific divisions:
In 2018, the North America division comprised the store and direct-to-customer operations of
(1) | For 2021, atmos was excluded from the Company’s Adjusted Pre-Tax Income because this banner was acquired in November 2021 and was, therefore, not included in the Company’s targets at the time they were set by the Human Capital Committee. |
In 2018, the International division included the store and direct-to-customer operations of
(2) | For 2021, WSS was excluded from the Company’s Adjusted Pre-Tax Income because this banner was acquired in September 2021 and was, therefore, not included in the Company’s targets at the time they were set by the Human Capital Committee. |
For competitive reasons, we do not disclose the profitAdjusted Pre-Tax Income targets for the North America, EMEA, or InternationalAsia Pacific divisions, as we do not publicly disclose results of these divisions on a separate basis, and we consider it competitively harmful to make that information public. Consistent with ourOur objective of settingis to set challenging performance goals for executives throughout the Company, weCompany. We believe that the achievement of theachieving these challenging performance goals for these divisions was demanding in light of there being a zero bonus payout for one of the divisions despite being profitable in 2018.is demanding.
NPS
The Human Capital Committee established the customer connected objectivesNPS targets for the NEOs based on:NEOs. NPS is a metric used to measure customer experience and predict future business growth. NPS is calculated using the answers to questions posed to customers scored on a 0-10 scale. Respondents are grouped as follows:
► | Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth. |
Knowing our Customers- Increasing
► | Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. |
► | Detractors (score 0-6) are unhappy customers who can damage the brand and impede growth through negative word-of-mouth. |
Subtracting the percentage of identified customers through in-store, digital and app touch-points for North America and International, and
Engaging and Servicing Our Customers- Improving overallDetractors from the percentage of Promoters yields the NPS, which can range from a low of -100% (if every customer satisfaction favorability percentage measured by results on purchaser surveys comparedis a Detractor) to the prior year.
Along with these objectives, thea high of 100% (if every customer is a Promoter). The Human Capital Committee established “enablers”three touchpoints for measuring progress based on:
Organizational Enrollment- Focusing all employees throughout the organizationNPS by each geographic region, each of which is assessed as a stand-alone performance to allow for balanced focus on the importanceeach area of customer-leading metricsopportunity to our go-forward strategyimprove an “omni-” customer experience: Store Post-Purchase, Digital Post-Purchase, and communicating scorecard progress;
Brand Satisfaction- Establishing a methodologyPost-Fulfillment. The survey responses are aggregated by region (North America, EMEA, and trackingAsia Pacific) and are scored individually by touchpoint. Each customer satisfaction both in-storetouchpoint has its own threshold, target, and on-line; and
Digital Enhancements- Implementing the new point-of-sale system in our global store fleet and achieving 2018 milestones in our efforts to enhance our digital capabilities.
maximum, but they ultimately roll up into one payout percentage. The evaluation of full-year customer connected objectivesNPS utilizes the Company’s global performance management rating scale, andin which performance can range from 25% -to 200% based on the relative achievement of the metricsmetrics.
2022 Proxy Statement | ![]() 57 |
EXECUTIVE COMPENSATION
ESG
NPS is an ESG metric because it measures customer satisfaction and enablers. As described above, payout percentages associatedbrand perception, which are dependent on factors that include ESG. Key features of NPS are:
Feature | Description |
Linked to ESG Program | “Leveraging the Power of Our People and Communities” is one of the four pillars of our global ESG program focused on ensuring that our customers enjoy world-class engagement and an environment that encourages the pursuit of excellence every day in our purpose to inspire and empower youth culture. |
Reputational | NPS measures customer satisfaction and brand perception, which are influenced by customers’ sentiments concerning the Company’s ESG program. |
Long Term | NPS measures loyal enthusiasts who will keep buying and refer others, fueling long-term and sustainable future growth. Strong ESG principles and performance are necessary for the Company’s success over the long term, including attracting and retaining customers. |
Quantifiable | NPS is calculated using a 0-10 scale used to measure customer experience and predict future business growth. |
No Discretion | NPS is formula-driven based upon Company performance and does not provide for discretionary adjustments. |
During our engagement sessions with ratingsour shareholders, they have shared with us that they also believe NPS is a good measure of the performance of our ESG program. See page 38 for the metricsmore details on our shareholder engagement program.
To learn more about our global ESG program, see ESG on page 96, and enablers were averagedour Impact Report, which is presented consistent with SASB and resulted in an overall corporate payout percentage of 72.1%TCFD reporting standards and is available at investors.footlocker-inc.com/impactreport.
ADDITIONAL INFORMATION
The annual incentive planAnnual Incentive Plan for the NEOs makes bonusincentive payments based upon the Company or relevant division’s results, without individual performance adjustments. ExecutivesHowever, executives who receive a “not meeting performance”expectations” rating in their annual performance review are ineligible to receive an annual bonusincentive payment. All bonusannual incentive targets and calculations are based on the results of continuing operations through the end of the 20182021 fiscal year.
The payment of performance-based annual cash bonuses isAnnual Incentive Plan awards are calculated asbased on a percentage of actualthe executive’s base salary earned by the executiverate during the year. The maximum payout under this plan is 200% of target, with a maximum payout in any year for any participant capped at $6 million.
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Executive Compensation
The 2018 annualAnnual incentive target awards for the NEOs approved by the Compensation Committee are shown in the table below.
Name | 2017 Annual Target Award | 2018 Annual Target Award | ||
R. Johnson | 150% | 200% | ||
L. Peters | 75% | 75% | ||
S. Jacobs | 100% | 100% | ||
L. Kimble | 75% | 75% | ||
P. Verma | 75% | 75% |
Bonus payouts are calculated on the basis of straight-line interpolation between the threshold (90%), target (100%), and maximum (110%) points. If the Company does not achieve threshold performance, then no annual bonus is earned or paid.
Target as a Percentage of Base Salary | Actual 2018 Payout Percentage as a Percent of Target | Actual 2018 Payout ($) | ||||
R. Johnson | 200% | 84.5% | 1,859,000 | |||
L. Peters | 75% | 84.5% | 427,781 | |||
S. Jacobs | 100% | 157.2% | 1,336,200 | |||
L. Kimble | 75% | – | — | |||
P. Verma | 75% | 84.5% | 348,562 |
Target as a | Actual 2021 Payout | ||
Percentage of | as a Percentage of | Actual | |
Base Salary Rate | Target | 2021 Payout | |
Name | (%) | (%) | ($) |
Johnson | 200 | 181.3 | 4,169,900 |
Page(1) | 75 | 181.3 | 675,870 |
Bracken(2) | 75 | 178.7 | 637,298 |
100 | 181.3 | 305,975 | |
Martin | 75 | 186.7 | 856,032 |
Gray | 75 | 181.3 | 831,273 |
(1) | Mr. Page joined the Company as Executive Vice President and Chief Financial Officer in April 2021. His target Annual Incentive Award was prorated for the 2021 performance period. |
(2) | Mr. Bracken, served as Executive Vice President and Chief Executive Officer–North America until November 2021. His target award was set at 75% of his base salary rate at that time. Mr. Bracken was promoted to Executive Vice President and Chief Operating Officer in November 2021. His target award was set at 100% of his base salary rate at that time. His target Annual Incentive Award was prorated for the 2021 performance period between these targets. |
See page 35 forAll participants, including the targets, along withNEOs, are required to be employed on the adjusted actual performance forpayment date to receive payment of the period.annual incentive.
AFG AwardPrior to the Human Capital Committee determining whether the Annual Incentive Plan targets have been achieved, the Company’s independent registered public accounting firm, at the request, and for the restricted use, of the Human Capital Committee, reviews the Annual Incentive Plan calculations to ensure that the payout is calculated in accordance with the plan.
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In determining to grant this award and the behavior to be incentivized by it, the Committee first considered the existing executive incentive programs, including the annual cash incentive awards which are based on a combination of pre-tax income (or division omni-channel profit) and customer-centric objectives, and the long-term performance-based equity awards with metrics tied to a combination of average two-year net income and ROIC. Given the desire to accelerate the pace by which the Company drives growth, both organically and inorganically, the Committee believed that it was important to provide additional incentive directly focused on profitable top-line growth, which would complement the other incentive programs during this dynamic period.
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EXECUTIVE COMPENSATION
Annual incentive payments are formula-driven based upon Company performance, and our 2021 program for the NEOs does not provide for discretionary adjustments based upon individual performance. The Human Capital Committee did not exercise discretion in the amounts payable to the NEOs or any other executive officers under this incentive program.
Executive CompensationLTI AWARDS
For Mr. Johnson, 100% of the award is in the form of PBRSUs, and he would earn a payout following the end of the performance period only if the performance goals are achieved. For each of the other NEOs, 75% of the award is in the form of PBRSUs and 25% is in the form of time-based RSUs, payable following the end of the performance period, subject to the achievement of the performance goals with regard to the PBRSUs.
Target Value of Performance-Based Component ($) | Target Value of Time-Based Payout Component ($) | Total Target Value ($) | ||||
R. Johnson | 5,000,000 | – | 5,000,000 | |||
L. Peters | 750,000 | 250,000 | 1,000,000 | |||
S. Jacobs | 1,125,000 | 375,000 | 1,500,000 | |||
L. Kimble | 750,000 | 250,000 | 1,000,000 | |||
P. Verma | 562,500 | 187,500 | 750,000 |
The percentage of achievement of the performance goals at the end of the performance period will be applied to the target number of PBRSUs granted to each of the executives to determine the actual number of PBRSUs that may be earned. The percentage of the target number of PBRSUs that may be earned at threshold is 25% and at maximum is 200% for each executive. If the threshold performance goals are not met, no PBRSUs will be earned or paid out to any executive.
As the AFG performance period is on-going, we have not disclosed the actual targets because we believe it would be competitively harmful to do so. At the end of the performance period-in 2021-the Committee will determine whether the performance goals have been achieved, and we will provide specific disclosure regarding the targets, performance results relative to those targets, and the earned payouts, if any, for the completed performance period. For the time-based component of the AFG applicable to the NEOs other than Mr. Johnson, the RSUs will vest in March 2021, subject to continuous employment by the executives.
Our long-term incentive program includes the performance-based LTIPLTI awards include a combination of PSU awards and other long-term equity awards granted annually under the Stock Incentive Plan in the form of stock options time-based restricted stock, and RSUs. Performance-based LTIPBeginning in 2021, our LTI awards are awarded as 60% PSUs, 20% stock options, and time-based RSUs are granted annually. Time-vested restricted stock or special RSU awards normally are granted only in special circumstances, such as promotions, recruitment, or retention.20% RSUs.
LTIP
PSU AWARDS
The LTIP isPSU awards are designed to reward executives for achieving multi-year performance targets. The LTIP isPSU awards are formula-driven, with targets established by the CompensationHuman Capital Committee based upon financial targets included in the business plan reviewed and approved each year by our Finance Committee and approved by the Board. The LTIP pays outactual number of PSUs awarded will be based upon the Company’s performance results, without individual performance adjustments. Key design features of the LTIPPSU awards are:
100% Equity | 100% of |
After-Tax Income and ROIC Targets | The performance targets are based on |
PSU AWARDS (2020-21)
Consistent with our pay-for-performance culture, the Human Capital Committee established Two-Year Average After-Tax Income and ROIC targets in 2020 for the 2020-21 performance period that were rigorous and appropriate in light of the Company’s prior performance, and set a “performance floor” for each performance measure. The targets the Human Capital Committee established were based on the Company achieving Two-Year Average After-Tax Income of $342.9 million (which accounts for 70% of the payout) and ROIC of 9.6% (which accounts for 30% of the payout). The Company achieved Two-Year Average After-Tax Income of $547.3 million and ROIC of 13.1% for this performance period. As a result, a 200% payout was earned for this performance period.
The targets, along with the adjusted actual performance for the period, and the calculation of ROIC are shown in the table below:
2022 Proxy Statement | ![]() 59 |
EXECUTIVE COMPENSATION
Mr. Page was appointed in 2021, and Messrs. Bracken, Gray, and Martin were promoted, in 2020, so their payouts were prorated for the 2020-21 performance period. Due to Ms. Peters’s retirement in 2021, she earned the pro rata portion of her PSUs due for the 2020-21 performance period based on actual performance, which will be paid at the same time as the payouts to the other NEOs in 2023.
Mr. Talwar forfeited these PSUs in connection with the termination of his employment.
The Human Capital Committee establishes certain performance targets in connection with determining the Company’s PSU payouts. The PSU payouts provide for the exclusion of certain items from such performance targets that the Human Capital Committee considers to be unusual or non-recurring. These items, if they occur, are excluded when calculating the PSU payouts, however, such unusual or non-recurring items may not be material for purposes of the non-GAAP measures presented in the Annual Report. In addition, certain items may not be adjusted for purposes of the PSU payouts, as they do not exceed a pre-established adjustment threshold, although they are adjusted for financial reporting purposes in the Annual Report consistent with past practices.
Two-Year Average After-Tax Income Calculation for 2020-21 PSU Payouts. Please note the following reconciliation:
2021 | 2020 | Average | ||||||||||
($ in millions) | ||||||||||||
After-tax income: | ||||||||||||
Net income attributable to Foot Locker, Inc. | $ | 893 | $ | 323 | ||||||||
After-tax adjustments excluded from GAAP: | ||||||||||||
Impairment and other charges, net of income tax benefit of $42 million and $24 million, respectively(1) | 130 | 93 | ||||||||||
Other income, net of income tax expense of $80 million and $50 million, respectively(1) | (226 | ) | (140 | ) | ||||||||
Tax charge related to revaluation of certain intellectual property rights(1) | 11 | 25 | ||||||||||
Tax expense related to tax law rate changes(1) | (1 | ) | (5 | ) | ||||||||
Two-Year Average After-Tax Income (non-GAAP) | $ | 807 | $ | 296 | ||||||||
Disregarded items for the PSU awards, not part of non-GAAP adjustments(2) | (5 | ) | (2 | ) | ||||||||
Two-Year Average After-Tax Income (PSU payouts) | $ | 802 | $ | 294 | $ | 548 |
See pages 21 through 22 of our Annual Report for a |
(2) | The |
![]() 60 | Foot Locker, Inc. |
EXECUTIVE COMPENSATION
ROIC Calculation for 2020-21 PSU Payouts.Please note the following reconciliation:
2021 | 2020 | Average | ||||||||||
($ in millions) | ||||||||||||
Pre-tax income: | ||||||||||||
Income before income taxes | $ | 1,240 | $ | 494 | ||||||||
Pre-tax adjustments excluded from GAAP: | ||||||||||||
Impairment and other charges(1) | 172 | 117 | ||||||||||
Other income, net(1) | (306 | ) | (190 | ) | ||||||||
Adjusted income before income taxes (non-GAAP) | $ | 1,106 | $ | 421 | ||||||||
Disregarded items for the PSU awards, not part of non-GAAP adjustments(2) | (3 | ) | (2 | ) | ||||||||
Interest expense, net | (14 | ) | (7 | ) | ||||||||
Adjusted EBIT (PSU awards) | $ | 1,117 | $ | 426 | ||||||||
+ Interest component of straight-line rent expense(1) | 144 | 158 | ||||||||||
Adjusted net operating profit | 1,261 | 584 | ||||||||||
- Adjusted income tax expense(1) | (342 | ) | (168 | ) | ||||||||
+ Net loss attributable to noncontrolling interests | 1 | — | ||||||||||
= Adjusted return after taxes | $ | 920 | $ | 416 | $ | 668 | ||||||
Average total assets | $ | 7,589 | $ | 6,816 | ||||||||
- Average cash and cash equivalents | (1,242 | ) | (1,294 | ) | ||||||||
- Average non-interest-bearing current liabilities | (1,060 | ) | (819 | ) | ||||||||
- Average merchandise inventories | (1,095 | ) | (1,066 | ) | ||||||||
+ 13-month average merchandise inventories | 1,116 | 1,243 | ||||||||||
= Average invested capital | $ | 5,308 | $ | 4,880 | $ | 5,094 | ||||||
ROIC % (PSU payouts) | 17.3 | % | 8.5 | % | 13.1 | % |
(1) | See pages 21 through 23 of our Annual Report for a description of these items. |
(2) | The PSU awards provide for the exclusion of certain items that the Human Capital Committee considers unusual or non-recurring. The disregarded items permitted under the PSU awards include adjustments relating to the income associated with completed acquisitions, the profit or loss from minority investments, the effect of COVID-19 on our results, and excess tax benefits. |
Prior to the Human Capital Committee determining whether the PSU performance targets have been achieved, the Company’s independent registered public accounting firm, at the request, and for the restricted use, of the Human Capital Committee, reviews the PSU calculations to ensure that the payout is calculated in accordance with the plan.
The PSU payouts are formula-driven based upon Company performance, and our 2021 program for the NEOs does not provide for discretionary adjustments based upon individual performance. The Human Capital Committee did not exercise discretion in the amounts payable to the NEOs or any other executive officers under this incentive program.
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Executive CompensationEXECUTIVE COMPENSATION
The target PSU awards for the 2020-21 performance period for the NEOs are listed in the following table:
Name | Target Award as a Base Salary Rate (%) | |
325 | ||
Page(1) | 90 | |
Bracken(2) | 30 | |
75 | ||
Gray(3) | 50 | |
75 |
(1) |
Mr. Bracken served as Senior Vice President and General Manager, Foot Locker, Lady Foot Locker, and Kids Foot Locker until July 2020. His target award was set at 30% of his base salary rate at that time. Mr. Bracken was promoted to Executive Vice President and Chief Executive Officer—North America in July 2020. His target award was set at 75% of his base salary rate at that time. His target PSU award was prorated for the 2020 performance period. |
(3) | Mr. Gray served as Vice President and Chief Merchandising Officer—North America until July 2020. His target award was set at 50% of his base salary rate at that time. Mr. Gray was promoted to Executive Vice President and Chief Commercial Officer in July 2020. His target award was set at 75% of his base salary rate at that time. His target PSU award was prorated for the 2020 performance period. |
(4) | Due to Ms. Peters’s retirement in 2021, she earned the pro rata portion of her PSUs due for the 2020-21 performance period, based on actual performance, which will be paid at the same time as the payouts to the other NEOs in 2023. |
(5) | Mr. Talwar forfeited these PSUs in connection with the termination of his employment. |
Determination of Payout for 2017-18 LTIP Awards.PSU AWARDS (2021-22) Consistent with our high-performance culture,
In 2021, the CompensationHuman Capital Committee established rigorous net income and ROIC targets at the beginning of 2017 for the 2017-18 performance period and set a “performance floor” for each performance measure. The targets the Compensation Committee established were based on the Company achieving two-year average annual net income of $727.2 million (which accounts for 70% of the payout) and ROIC of 15.5% (which accounts for 30% of the payout). The Company achieved two-year average annual net income of $541.6 million and ROIC of 11.9% for this performance period, which were below the threshold performance floor. As a result, no payouts were earned for this performance period. See page 36 for the targets, along with the adjusted actual performance for the period.
Determination of Performance Targets for 2018-19 LTIP Awards.In 2018, the Compensation Committee established LTIPPSU performance targets for the 2018-192021-22 performance period, which are also based on two-year average annual net incomeTwo-Year Average After-Tax Income (70%) and ROIC (30%). For competitive reasons, since this performance period is still on-going,ongoing, we have not disclosed the targets established for the period. The Human Capital Committee will determine whether payouts have been earned following the end of the Company’s 20192022 fiscal year, and we will provide specific information on the targets and results after the completion of the performance period. If awards are earned for the current 2018-192021-22 performance period, payment will be made to participating executives in 2021,2024, following the completion of a one-year time-based vesting period.
ROIC CalculationThe target PSU values for LTIP.Return on Invested Capital, or ROIC, is a non-GAAP financial measure. For purposes of calculating this long-term incentive, we define ROIC as follows:the NEOs for the 2021-22 performance period if the performance goals are achieved are listed in the following table:
Name | ($) | |||
4,830,000 | ||||
499,519 | ||||
597,620 | ||||
584,250 | ||||
(1) | Mr. Page joined the Company as Executive Vice President and Chief Financial Officer in April 2021. His target PSU award | was prorated for the 2021-22 performance period. |
his employment. |
Certain items used in the calculation of ROIC for bonus purposes, such as the implied interest portion of operating lease payments, certain unusual or non-recurring items, average estimated asset base of capitalized operating leases, and 13-month average inventory, while calculated from our financial records, cannot be calculated from our audited financial statements. Prior to the Compensation Committee determining whether bonus targets have been achieved, the Company’s independent registered public accounting firm, at the request and for the restricted use of the Compensation Committee, reviews the bonus calculations to ensure that the payout is calculated in accordance with the plan. There is a calculation of basic ROIC, which is not precisely the same as the calculation used for incentive compensation purposes because of the exclusion of certain items (see page 49 for a discussion of disregarded items, and a reconciliation to GAAP on pages 16 through 19, of our 2018 Annual Report on Form 10-K).
STOCK OPTIONS AND RSUs
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Executive Compensation
Stock Options and RSUs
The CompensationHuman Capital Committee granted equity awards to the NEOs in 2018,2021, splitting the total value of the award between stock options and time-based RSUs in order to enhance the retentive value of the LTI awards. In prior years the annual equity award was made in the form of stock options only. In deciding to grant these awards and determining the value of the awards, the CompensationHuman Capital Committee considered each executive’s performance, position, and career potential and the competitive market for equivalent talent. For Mr. Johnson,See the approximate grant date valueGrants of hisPlan-Based Awards in Fiscal 2021 beginning on page 74 for additional information on awards was equivalent to 200% of his base salary. These awards aregranted in the Company’s 2021 fiscal year.
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EXECUTIVE COMPENSATION
The values shown in the chart below.Grants of Plan-Based Awards in Fiscal 2021 for the stock option grants in 2021 are based on the applicable Black-Scholes value on the grant date. The amounts shown in the table do not necessarily reflect the actual value that may be realized by the NEOs. The option exercise price is equal to the closing price of the Common Stock on the grant date. Stock options normally vest at the rate of one-third of the total grant per year over the first three years of the ten-year option term, subject to continuous service through each vesting date and accelerated vesting in certain limited circumstances. RSUs cliff vest generally after a period of three years based on continued employment. The CompensationHuman Capital Committee does not normally consider an executive’s gains from prior stock awards in granting new awards.awards as compensation in the current year. The Human Capital Committee determines the number of options granted based on a fixed value, using the Black-Scholes value on the grant date.
SPECIAL RSU AWARDS
The values shown belowHuman Capital Committee granted special RSU awards in 2021 to Mr. Page at sign-on, as discussed above, in order to replace compensation Mr. Page forfeited when he was recruited by us, and to Mr. Bracken in connection with his promotion to Executive Vice President and Chief Operating Officer, and to Messrs. Martin and Gray for retention purposes. In deciding to grant these awards and determining the stock option grants are based on a Black-Scholes value of $12.35the awards, the Human Capital Committee considered each executive’s position, including those with expanded scope and responsibilities, and the Company’s recruiting needs. Messrs. Martin and Gray received special one-time RSU awards for retention purposes. In approving such one-time awards, the Human Capital Committee considered the need to ensure management stability and continuity, as well as labor market conditions and competition for top talent in the current environment and during the COVID-19 pandemic. The Human Capital Committee also viewed the one-time awards as necessary in connection with the Company’s succession planning for key roles. The Human Capital Committee determined that the one-time awards were in the best interests of the Company and its shareholders. For Mr. Page, the RSUs will vest on each of the first three anniversaries of the grant date (a long-term incentive similar to the Company’s annual grant of RSUs), subject to his continued employment through each such anniversary date. All of the special awards for Messrs. Bracken, Martin, and Gray will vest on the third anniversary of the grant date, subject to continued employment through the vesting date. All of these values, and corresponding grant dates, are shown in the table below.
Name | Stock Options (#) | Grant Date Fair Value ($) | RSUs (#) | Grant Date Fair Value ($) | ||||
R. Johnson | 91,093 | 1,124,999 | 25,123 | 1,125,008 | ||||
L. Peters | 20,243 | 250,001 | 5,583 | 250,007 | ||||
S. Jacobs | 20,243 | 250,001 | 5,583 | 250,007 | ||||
L. Kimble | 18,219 | 225,005 | 5,025 | 225,020 | ||||
P. Verma | 12,146 | 150,003 | 3,350 | 150,013 |
RSUs | RSUs | Grant Date | |||||||||||
04/12/21 | 11/16/21 | Fair Value | |||||||||||
Name | (#) | (#) | ($) | ||||||||||
Page | 12,557 | — | 750,030 | ||||||||||
Bracken | — | 10,661 | 600,001 | ||||||||||
Martin | — | 3,554 | 200,019 | ||||||||||
Gray | — | 5,331 | 300,029 |
RETIREMENT PLAN AND EXCESS CASH PLAN
The NEOs, other than Mr. Page, because the plans were frozen for new participants as of December 31, 2019, and Ms. Peters and Mr. Talwar, who have departed the organization, participate in the Retirement Plan and the Excess Cash Balance Plan
All U.S.-based associates and expatriate U.S. employees of the Company who meet the eligibility requirements are participants in the Foot Locker Retirement Plan (the “Retirement Plan”). The Retirement Plan andPlan. These plans, as well as the method of calculating benefits payable under itthese plans, are described beginning on page 63. All of the NEOs are participants in the Retirement Plan. The Internal Revenue Code (“IRC”) limits the amount of compensation that may be taken into consideration in determining an individual’s retirement benefits. Therefore, those participants in the Retirement Plan whose compensation exceeds the IRC limit are also participants in the Excess Cash Balance Plan, described on page 63, which provides a benefit equal to the difference between the amount a participant receives from the Retirement Plan and the amount the participant would have received were it not for the IRC limits. The Retirement Plan and Excess Cash Balance Plan take into account only base salary and annual bonus in determining pension benefits. Therefore, long-term incentives, stock options, and stock awards have no effect on the calculation of benefits or payments under these plans.88.
401(k) PlanPLAN AND EXCESS SAVINGS PLAN
The Company has a 401(k) Plan that is available to employees whose primary place of employment is in the United States, as well as to expatriate U.S. employees. Eligible associates may contribute to the 401(k) Plan following 28 days of employmentMessrs. Johnson, Bracken, Martin, and are eligible for Company matching contributions upon completion of one year of service consisting of at least 1,000 hours. All of the NEOsGray participate in the 401(k) Plan other than Mr. Kimble. Asand the Excess Savings Plan. These plans, as well as the method of January 1, 2019, the 401(k) Plan allows eligible employees to contribute up to 40% of their compensationcalculating contributions under these plans, are described on a pre-tax basis, subject to a maximum of $19,000. The Company matches 25% of employees’ pre-tax contributions on up to the first 4% of the employees’ compensation (subject to certain limitations). The matching contribution is made in cash. Matching contributions are vested incrementally over the first five years of participation. See Note 6 to the Summary Compensation Table on pages 53 through 54 for the amount of the Company match for each of the NEOs.page 90.
Supplemental Executive Retirement PlanSUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company maintains a Supplemental Executive Retirement Plan (the “SERP”), described on page 64,SERP for certain senior officers of the Company and other key employees, including the NEOs. The SERP is an unfunded plan that sets an annual target for each participant consisting of a percentage of base salary and annual bonus based onNEOs who met the Company’s performance against target. This is the same target as set under the Annual Bonus Plan. Contributions range from 4% to 12% of salary and annual bonus, depending on the Company’s performance against an established target, with an 8% contribution made for target performance. The Compensation Committee establishes the SERP target each year, and it is normally the same as the performance target under
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Executive Compensation
the annual bonus plan. In addition, performance-based participant accounts accrue interest at the rate of 6% annually. The SERP also provides for the continuation of medical and dental insurance benefits following retirement to vested participants who were participants in the SERPeligibility requirements prior to the start of the 2014 fiscal year when this benefit was closed toplan being frozen for new participants.
Based upon the Company’s performance in 2018, a credit of 7.3% of 2018 base salary was made to the SERPparticipants (including rehires) after December 31, 2018. See page 90 for each of the NEOs. Credits to the SERP are based only on base salary and annual bonus, if paid; therefore, long-term incentives, stock options, and stock awards have no effect on the calculation of benefits or payments under this plan. As of the end of 2018, the account balances of the NEOs ranged from $178,053 for Mr. Verma to $2,449,041 for Mr. Johnson. Under the terms of the SERP, executives are vested in their account balances based upon a combination of age and service. As of the end of 2018, all of the NEOs, other than Mr. Verma who has not yet met the age and service requirements, were vested inadditional information regarding the SERP.
International Assignment CompensationINTERNATIONAL ASSIGNMENT COMPENSATION
We provide employeesteam members on long-term international assignments such as Mr. Kimble, with additional benefits and allowances that are designed to minimize any financial detriment or gain to the employeeteam member from an international assignment. ForExcept for Expatriate Tax Payments, none of the NEOs, other than Mr. Kimble, who wasTalwar, received any compensation under the only NEO who was an expatriate employee in 2018, we provided benefits and allowances for certain goods and services differential, housing, automobile costs, and tax preparation assistance.IAP during 2021.
2022 PROXY STATEMENT | ![]() 63 |
EXECUTIVE COMPENSATION
We provide the NEOs with certain perquisites, which the CompensationHuman Capital Committee believes to be reasonable and consistent with its overall objective of attracting and retaining talented executives.executives in a competitive labor market. The Company provides the NEOs with an automobile allowance, financial planning,reimbursement, medical expense allowance,reimbursement, supplemental long-term disability insurance, and life insurance.financial planning. In addition, the Company reimburses Mr. Johnson for reasonable expenses of using car service expenses for transportation in the New York metropolitan area.area for increased personal security and efficiency. We also provide for continuation of medical and dental insurance benefits following retirement to participants who vested in the SERP prior to the start of the 2014 fiscal year when the benefit became closed to new participants.February 2, 2014. We do not provide a gross-up to executives for the income tax liability they incur due to their receipt of these perquisites.
Executive Employment AgreementsEMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
As more fully described on pages 5472 through 55,73, we have employment agreements with each of our NEOs.NEOs, except Messrs. Page, Bracken, and Gray. Other than the agreement with Mr. Johnson, as CEO, the agreements are substantially in the same form.
Our employment agreements with the NEOs provide for severance payments to the executive if we terminate the executive’s employment without cause or if the executive terminates his or her employment for good reason. These payments to the NEOs, calculated as if termination of employment occurred at the end of our last fiscal year, are set out in the tables on pages 65 through 67.
The NEOs would receive an enhanced severance payment if the executive’s employment is terminated without cause or if the executive terminates employment for good reason within two years following a change in control. For an executive to receive the enhanced severance payment, two events must occur: first, employment must be terminated for one of the specified reasons, and second, this termination must occur within two years following a change in control. We believe that these provisions, which we have had in place for a number of years, provide appropriate protection to our executives, comparable to that available at other public companies, and, with regard to the enhanced severance following a change in control, protect us from losing key executives during a period when a change in control may be threatened or pending. None of the NEOs is entitled to a gross-up payment for any excise taxes that may become payable in connection with a change in control.
All of the NEOs have agreed in their employment contracts not to compete with the Company for two years following their termination of employment and not to hire Company employees during that same period. This restriction does not apply following a change in control.
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Executive CompensationPROCEDURES FOR DETERMINING COMPENSATION
Procedures for Determining Compensation
Setting Compensation, Establishing Goals, and Evaluating PerformanceSETTING COMPENSATION, ESTABLISHING GOALS, AND EVALUATING PERFORMANCE
As reflected in the following timeline, the CompensationHuman Capital Committee oversees a rigorous and comprehensive compensation approval, goal setting, and performance review process:
Year-Round:
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Each year, in advance of making compensation decisions for the forthcoming year, the Compensation Committee meets with management and reviews the Company’s overall executive compensation program in light of the Company’s long-term strategy and financial objectives approved by the Finance Committee and the Board. The Committee meets with management, the Company’s compensation consultant, and the Committee’s independent compensation consultant to review the executive compensation environment, including recent developments and trends in executive compensation relative to the Company’s executive compensation program, and a historical view of the pay-for-performance correlation in the program and any changes to the program being recommended by management or either of the consultants.
After the financial results for the prior year have been finalized and audited, the Compensation Committee meets to review and approve bonus and incentive compensation payments for the prior year and to review and approve compensation arrangements—base salaries, stock awards, and incentive plan targets—for the upcoming year. The Compensation Committee meets privately with its independent compensation consultant for the purpose of establishing the compensation of the CEO, including establishing target awards under the Annual Bonus Plan and the LTIP, and making stock awards to him under the Stock Incentive Plan. Except in the case of promotions or other unusual circumstances, the Compensation Committee considers granting stock awards only at this meeting, which is normally held within a few weeks following the issuance of the Company’s full-year earnings release for the prior year.EXECUTIVE COMPENSATION
Benchmarking ApproachBENCHMARKING APPROACH
We have established benchmarks for compensation, including cash and equity, for each NEO. These benchmarks are reviewed annually and are based upon compensation for comparable positions in a peer group consisting of publicly-traded athletic footwear and apparel retailers and other specialty retail companies having revenues of approximately one-third to two and one-half times the Company’s revenue. We also use the peer group data to assess the competitiveness of total direct compensation awarded to our senior executives and as a data point in designing compensation plans, benefits, and perquisites.
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Executive Compensation
The Compensation Committee determined that the following companies, which comprised the peer group for 2018 compensations decisions, was the appropriate peer group for executive compensation purposes based upon the nature of their businesses, revenues, and the pool from which they recruit their executives.
Peer Group for 2018 Compensation Decisions
One goal of the Compensation Committee is to provide competitive total compensation opportunities for the NEOs that vary with Company performance. The Compensation Committee uses the peer group benchmark information as a reference point in evaluating executive compensation, assessing the competitiveness of total direct compensation awarded to our senior executives, and designing compensation plans, benefits, and perquisites; it does not, however, attempt to match the compensation of each executive position in the Company precisely with that of an equivalent position in the peer group. In general, the Compensation Committee looks to position an executive’s total compensation at the median of comparable positions at peer companies, consistent with the Company’s revenue in relation to peer companies. The Compensation Committee also considers other factors, including performance, responsibility, experience, tenure, internal equity, and market positioning, when determining compensation.
Changes to Peer Group for 2019 Compensation Planning
During 2018, the Committee reviewed the peer group in light of merger and acquisition activity affecting certain peer companies, as well as the standing of certain peer companies in terms of revenues and market capitalization relative to the peer group criteria and determined that a refresh of the peer group based on a revised set of criteria was appropriate. For 2019 compensation decisions, the peer group criteria is as follows: (i) companies having revenues of approximately 0.5 to 2 times the Company’s revenue and market capitalization of approximately 0.25 to 4 times the Company’s market capitalization; and (ii) select sub-industries within the consumer discretionary sector most comparable to the Company’s business-apparelbusiness, including apparel retail; apparel, accessories, and luxury goods; footwear; home furnishing retail; internet and direct marketing retail; and specialty stores. Based onWe also use the updated criteria,peer group data to assess the competitiveness of total direct compensation awarded to our senior executives and as a data point in designing compensation plans, benefits, and perquisites.
The Human Capital Committee determined that the following companies, which comprised the peer group for 20192021 compensation decisions, were appropriate for executive compensation purposes based upon the nature of their businesses, revenues, and the pool from which they recruit their executives.
PEER GROUP FOR 2021 COMPENSATION DECISIONS | ► | American Eagle Outfitters, Inc. | ► | Hanesbrands Inc. | ► | Tapestry, Inc. |
► | Bath and Body Works, Inc. | ► | The Michaels Companies, Inc. | ► | Tiffany & Co. | |
f/k/a L Brands, Inc. | ► | PVH Corp. | ► | Tractor Supply Company | ||
► | Bed Bath & Beyond Inc. | ► | Qurate Retail, Inc. | ► | Ulta Beauty, Inc. | |
► | Burlington Stores, Inc. | ► | Ralph Lauren Corporation | ► | Under Armour, Inc. | |
► | Dick’s Sporting Goods, Inc. | ► | Sally Beauty Holdings, Inc. | ► | Urban Outfitters, Inc. | |
► | Expedia Group, Inc. | ► | Signet Jewelers Limited | ► | Wayfair Inc. | |
► | The Gap, Inc. | ► | Skechers USA, Inc. | ► | Williams Sonoma, Inc. |
One goal of the Human Capital Committee is to provide competitive total compensation opportunities for the NEOs that vary with Company performance. The Human Capital Committee uses the peer group benchmark information as a reference point in evaluating executive compensation, assessing the competitiveness of total direct compensation awarded to our senior executives, and designing compensation plans, benefits, and perquisites. It does not, however, attempt to match the compensation of each executive position in the Company precisely with that of an equivalent position in the peer group. In general, the Human Capital Committee looks to position an executive’s total compensation at the median of comparable positions at peer companies, consistent with the Company’s revenue in relation to peer companies. The Human Capital Committee also considers other factors, including performance, responsibility, experience, tenure, internal equity, and market positioning, when determining compensation.
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EXECUTIVE COMPENSATION
During 2018, the Human Capital Committee developed the criteria for determining the Company’s peer group. At that time, the Human Capital Committee endeavored to refresh the peer group every three years, with annual adjustments limited to merger and acquisition activity or going private transactions. To that goal, in 2021, the Human Capital Committee reviewed the criteria established in 2018 and determined that it was still appropriate. Based on this criteria and the companies’ 2021 revenues and market capitalizations, the peer group for 2022 compensation planning which is shownwas refreshed, as provided below, reflectsto reflect a larger and more diverse group of peers:
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Tiffany & Co. | ► | Wayfair Inc. | ||||
► | ||||||
![]() | ADDITIONS | ► | Academy Sports and | ► | Levi Strauss & Co. | ► | Petco Health and Wellness |
Outdoors, Inc. | ► | The ODP Corporation | Company, Inc. | ||||
► | Capri Holdings Limited |
PEER GROUP FOR 2022 COMPENSATION DECISIONS | ► | Academy Sports and | ► | The Gap Inc. | ► | Signet Jewelers Limited |
Outdoors, Inc. | ► | Hanesbrands, Inc. | ► | Skechers USA, Inc. | ||
► | American Eagle | ► | Levi Strauss & Co. | ► | Tapestry, Inc. | |
Outfitters, Inc. | ► | The ODP Corporation | ► | Tractor Supply Co. | ||
► | Bath and Body Works, | ► | Petco Health and | ► | Ulta Beauty, Inc. | |
Inc. f/k/a L Brands, Inc. | Wellness Company, Inc. | ► | Under Armour, Inc. | |||
► | Bed Bath & Beyond, Inc. | ► | PVH Corp. | ► | Urban Outfitters, Inc. | |
► | Burlington Stores, Inc. | ► | Qurate Retail, Inc. | ► | Williams Sonoma, Inc. | |
► | Capri Holdings Limited | ► | Ralph Lauren Corp. | |||
► | ► | |||||
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Executive Compensation
Use of Compensation ConsultantsUSE OF COMPENSATION CONSULTANTS
The CompensationHuman Capital Committee has retained as its advisorCAP, a nationally-recognized executive compensation consultant Compensation Advisory Partners (“CAP”), that is independent and performs no work for management.management, as its advisor. CAP reports directly to the CompensationHuman Capital Committee, meets with the Human Capital Committee privately without management present, and regularly communicates privately with the Human Capital Committee Chair. CAP also meets with the Nominating and GovernanceResponsibility Committee regarding non-employee directors’ compensation and reports on related governance and trends. The CompensationHuman Capital Committee has assessed the independence of CAP based on standards promulgated by the SEC and concluded that no conflict of interest exists that would prevent it from serving as an independent consultant to the Human Capital Committee. Each year, CAP reviews a report on risk in relation to the Company’s compensation policies and practices, provides a pay-for-performance analysis of our executive compensation program, and reviews the CEO’s compensation. In addition, each year CAP reviews and makes recommendations regarding the compensation program for non-employee directors, and the CompensationHuman Capital Committee considers the consultant’sCAP’s report on the program. Management utilizesIn 2021, management utilized the services of ClearBridge Compensation Group, a nationally-recognized compensation consultant, to provide advice on the executive compensation program and plan design.
Management Involvement in Developing the Compensation ProgramMANAGEMENT INVOLVEMENT IN DEVELOPING THE COMPENSATION PROGRAM
Management is involved in various aspects of developing the executive compensation program. Our Senior Vice President and Chief Human Resources Officer, Vice President—Global TotalPresident-Total Rewards, and staff in the Human Resources Department work with our CEO to develop compensation recommendations for all corporate and executive officers other than the CEO. The CEO or the Senior Vice President and Chief Human Resources Officer reviews these proposals with the CompensationHuman Capital Committee Chair, and may make changes to the recommendations based upon her input, before the recommendations are presented to the CompensationHuman Capital Committee for review. As part of her responsibilities, the Lead Independent Director also attends all Human Capital Committee meetings and advises the Human Capital Committee Chair in fulfilling her designated role and responsibilities. Our Senior Vice President and General Counsel also attends meetings of the CompensationHuman Capital Committee and participates in some of these discussions and preparations.
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EXECUTIVE COMPENSATION
Additional InformationADDITIONAL INFORMATION
Key Compensation Governance PoliciesKEY COMPENSATION GOVERNANCE POLICIES
Independent Compensation Consultant
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With regard to executive and director compensation matters, our Compensation Committee directly retains, and is advised by, an independent compensation consultant who performs no other work for the Company.
Clawback Policy
CLAWBACK POLICY
We have adopted a clawback policy that provides for the recovery of incentive compensation—compensation paid in cash or equity—equity if the CompensationHuman Capital Committee determines that an executivethe participant (1) engaged in fraud or gross misconduct which results in an accounting adjustment, whether or not the adjustment results in a restatement of our financial statements, or (2) committed a significant legal or compliance violation of the Company’s policies or Code of Business Conduct.Conduct or other policies. The CompensationHuman Capital Committee is closely monitoring the proposed SEC rules regarding recoupment of incentive-based compensation, and will amend theour policy if necessary when the final rules are adopted.as necessary.
Stock Ownership Guidelines
STOCK OWNERSHIP GUIDELINES
We have meaningful stock ownership guidelines for our senior executives. These are set at six times annual base salary for the CEO, three times annual base salary for executive vice presidents, two times annual base salary for senior vice presidents, and a multiple of annual base salary for other covered executives. If an executive has not met the ownership requirements following a five-year phase-in period, the executive is required to hold 100% of net shares acquired from the vesting of restricted stock or RSUs or the exercise of stock options until they comply with the stock ownership guidelines. At the end of 2018,2021, all of the NEOs met or exceeded their applicable ownership guidelines.
No Tax Gross-Ups
We do not provide a tax gross-up with regard to any compensation, benefit, or perquisite paid by the Company, other than our international assignment policy (“IAP”) or relocation program that is applicable to all employees. We also do not provide tax gross-ups for any amount paid to an executive upon termination of employment or in connection with a change in control.
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Executive Compensation
Anti-Hedging Policy
We do not permit our executives to take short positions in our shares or to hedge their economic interest in their shares.
No Stock Option Repricing
Our Stock Incentive Plan does not permit the repricing of stock options without shareholder approval. These guidelines are described on page 32.
Compensation Plans and RiskCOMPENSATION PROGRAM AND RISK
We believe that our compensation program encourages our NEOs to take action to improve the Company’s performance without encouraging them to take undue risk. The performance-based annual cash incentiveAnnual Incentive Plan and LTIP elements of the programPSU awards are paid based upon performance as compared to the Company’s annual and two-year financial plans, respectively, which are prepared each year by the Company’s management, and reviewed and approved by the Finance Committee, and the Board. The AFG awards are based on the approved 2018-19 financial plan and 2020 forecast reviewed by the Finance Committee and the Board. No incentive awards are earned or paid unless the applicable performance goals are achieved. We believe that, on balance, the plans are rigorous, but reasonably achievable under normal business conditions. This encourages our executives to manage the business well without pressuring them to take undue risks in order to obtain a payout.
Our equity-based compensationLTI awards for the NEOs isare designed with a similar goal in mind. We believe that our equity grantsLTI awards are reasonable in relation to overall compensation. Stock options normally vest ratably over a three-year period and have a 10-year term, and RSUs cliff vest generally after a period of three years, thereby each reducing the risk that an executive will take short-term action to inflate the price of the Company’s stock for a brief period.
LTIP PSU payouts are calculated at the conclusion of a two-year performance period, but are not actually paid to the participant until after an additional year of vesting has been satisfied. In addition to serving as a retention vehicle, this also requires that the executive continuecontinues to have the value of the stock portion of his or hertheir award at risk and dependent on fluctuations in stock price, for an additional year. It also allows a year to pass in which any issues concerning the Company’s operating or financial performance may come to light before payments are made.
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EXECUTIVE COMPENSATION
In addition, there are certain other factors related to our compensation programs for the NEOs that we believe help reduce the likelihood that our compensation programs will encourage our executives to take undue risk, as described below. See page 50 for a discussion of compensation and risk in our compensation plans more generally, and the procedures we followed to evaluate risk.
Factor | Description | |
ROIC as PSU Award Measurement | As a retail company, we believe that one of the potential risks we have is that management will attempt to achieve profit targets without taking into account the capital used, particularly working capital invested in inventory and operating leases. We have, therefore, designed our | |
No Bonus Payments to Executives with Poor Performance Ratings | We have designed our plans so that executives who receive a “Not Meeting Performance” rating under the Company’s annual performance appraisal process are not eligible to receive an annual | |
Incentive Targets | ||
Annual Incentive Payout Caps | ||
Mix of Components | We use a mix of annual and long-term incentive components, as well as a mix between the use of cash and equity. |
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Executive Compensation
Delegation of AuthorityDELEGATION OF AUTHORITY
The CompensationHuman Capital Committee currently has delegated authority to its Chair to approve, between committee meetings, time-vested RSU awards up to 7,500 RSUs per individual award and stock option awards up to 25,000 shares per individual award, in both cases only to executives who are not corporate or executive officers of the Company, division chief executive officers, or general managers. It is expected that the Chair would use this authority to approve awards made during the course of the year in connection with promotions, new hires, or special retention purposes. Options are priced at fair market value on the date the Chair signs the approval, which is the grant date for awards made under this delegation authority. Similarly, the value of RSU awards is based on the fair market value on the date the Chair signs the approval. The Chair used this authority three times in 2018, approving stock options and time-based RSU awards.twice during 2021. The CompensationHuman Capital Committee has not delegated authority to management to make stock option, restricted stock, RSU, or other equity-based awards.
Items Disregarded for Bonus Calculations
Annual Bonus and LTIP payments are formula-driven based upon Company performance, and our 2018 program for the NEOs does not provide for discretionary adjustments based upon individual performance. The Compensation Committee may, however, in its sole discretion, determine to eliminate or reduce the amounts payable under these incentive programs, but has no discretion to increase Annual Bonus or LTIP payments. When establishing the targets, the Compensation Committee normally specifies certain items that it considers to be unusual or non-recurring, and these events, if they occur, are excluded when calculating payments. All of the references in this CD&A to target and actual performance levels refer to amounts after taking these adjustments into consideration.
Accounting and Tax Considerations of Executive CompensationACCOUNTING AND TAX CONSIDERATIONS
While we review both the accounting and tax effects of various components of compensation, these effects are not a significant factor in the CompensationHuman Capital Committee’s allocation of compensation among the different components. With respect to awards made before the 2017 tax reform legislation, it was the Committee’s intent that compensation paid to executive officers should generally be deductible for U.S. tax purposes, and, consistent with this intent, the Committee structured our bonus, long-term incentive, and stock option programs so that payments made under them generally qualified for the performance-based exception of Section 162(m) of the IRC (“Section 162(m)”). However, theThe Human Capital Committee believes that in certain instances it is in the Company’sbest interests of the Company and our shareholders’ best interestsshareholders to have the flexibility to pay compensation that is not tax deductible so that we may provide compensation consistent with our program and objectives.
2022 COMPENSATION PROGRAM DESIGN CHANGES
In March 2022, the Human Capital Committee established the performance goals under the Annual Incentive Plan for the 2022 fiscal year and PSU awards for the performance period beginning in 2022. Under the Annual Incentive Plan, the goals are based (a) 80% on Adjusted Pre-Tax Income, and (b) 20% on NPS. Under the PSU awards, the preliminary goals are based (a) 70% on Two-Year Average After-Tax Income, and (b) 30% on Two-Year Average ROIC. The 2017 U.S. Tax Reform Legislation amended Section 162(m)preliminary PSU payout would be adjusted by a TSR modifier, to eliminaterepresent the “performance-based compensation” exception effectiveCompany’s TSR percent rank over a three-year performance period commencing at the beginning of the 2022 fiscal year relative to the companies in the S&P 1500 Specialty Retail Index, such that it is multiplied by between 75% for tax years beginning after December 31, 2017, subjectTSR below the 30th percentile to a transition rule allowing companies125% for TSR above the 80th percentile. The TSR modifier is designed to deduct compensation payable pursuant to a written binding contractenhance the alignment of internal incentive plan payouts with changes in effect on November 2, 2017 and not materially modified after that date. Notwithstandingexternal shareholder value. Additionally, recognizing the Company’s change in vendor mix and expected substantial investments in the tax law,business, the Human Capital Committee is committedreduced the maximum payouts to 150% of target from 200% in prior years for participants under the Annual Incentive Plan and PSU awards (notwithstanding the TSR modifier), respectively, to ensure alignment between management’s payouts and shareholders’ expectations if the target goals are exceeded. The Human Capital Committee believes that the introduction of a TSR modifier to the principles of linking executive pay closely toPSU awards and a reduction in the maximum payouts under the Annual Incentive Plan and PSU awards are appropriate in a year in which all parties–management and shareholders–are making important investments in our Company’s strategy and performance, establishing challenging and measurable performance goals, and providing payout limits under annual and long-term incentive plans. Further, the Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.future.
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Executive CompensationEXECUTIVE COMPENSATION
Compensation Committee ReportHUMAN CAPITAL COMMITTEE REPORT
The CompensationHuman Capital Committee has reviewed and discussed the CD&A with management and, based on that review and discussion, has recommended to the Board that the CD&A be included in this Proxy Statement.
Members of the Compensation CommitteeMEMBERS OF THE HUMAN CAPITAL COMMITTEE
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ALAN D. | GUILLERMO G. | DARLENE | ||
UNDERHILL | FELDMAN | MARMOL | NICOSIA | |
Chair |
Compensation Committee Interlocks and Insider ParticipationHUMAN CAPITAL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Maxine Clark, Alan D.Ms. Underhill, Mr. Feldman, Steven Oakland, Cheryl Nido Turpin,Mr. Marmol, and Kimberly UnderhillMs. Nicosia served on the CompensationHuman Capital Committee during 2018.2021. In addition, Ms. Clark served on the Human Capital Committee during 2021 prior to her retirement in May 2021. None of the committee members was an officer or employee of the Company or any of its subsidiaries, and there were no interlocks with other companies within the meaning of the SEC’s proxy rules.
Compensation and RiskCOMPENSATION AND RISK
The Company has completed a risk-related review and assessment of our compensation program and concluded that our compensation policies and practices, including executive compensation, isare not reasonably likely to result in a material adverse effect on the Company. As part of this review, the independent compensation consultant to the CompensationHuman Capital Committee reviewed risk in relation to the Company’s compensation policies and practices with the Company’s human resources executives directly involved in compensation matters. The consultant reviewed the compensation policies and practices in effect for corporate and division employeesteam members through the manager level, store managers, and store associates,team members, and reviewed the features we have built into the compensation programs to discourage excessive risk taking by employees,team members, including a balance between different elements of compensation, differing time periods for different elements, consistent Company-wide programs, plan performance targets based on the corporate budgeting process, and stock ownership guidelines for senior management.guidelines.
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(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||
Salary | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change inPension Value and Non-Qualified Deferred CompensationEarnings | All Other Compensation | Total | ||||
Name and Principal Position | Year | ($)(1) | ($)(2)(3) | ($)(2) | ($)(4) | ($)(5) | ($)(6) | ($) | ||
Richard A. Johnson | 2018 | 1,100,000 | 8,875,069 | 1,124,999 | 1,859,000 | 380,307 | 62,601 | 13,401,976 | ||
Chairman, President and | 2017 | 1,100,000 | 2,750,061 | 2,200,005 | — | 294,161 | 48,995 | 6,393,222 | ||
ChiefExecutive Officer | 2016 | 1,087,500 | 2,062,522 | 2,200,016 | 2,599,932 | 403,443 | 572,455 | 8,925,868 | ||
Lauren B. Peters | 2018 | 675,000 | 1,925,101 | 250,001 | 427,781 | 182,072 | 13,404 | 3,473,359 | ||
ExecutiveVice President and | 2017 | 675,000 | 506,314 | 500,009 | — | 174,281 | 7,646 | 1,863,250 | ||
Chief Financial Officer | 2016 | 657,500 | 1,579,759 | 450,010 | 714,088 | 205,626 | 84,011 | 3,690,994 | ||
Stephen D.“Jake” Jacobs | 2018 | 850,000 | 2,600,048 | 250,001 | 1,336,200 | 246,502 | 23,980 | 5,306,731 | ||
ExecutiveVice President and | 2017 | 850,000 | 637,554 | 500,009 | — | 179,511 | 32,924 | 2,199,998 | ||
ChiefExecutive Officer—North America | 2016 | 844,445 | 2,654,792 | 450,010 | 952,238 | 222,934 | 117,513 | 5,241,932 | ||
LewisP.Kimble | 2018 | 650,000 | 1,712,620 | 225,005 | — | 247,830 | 1,314,603 | 4,150,058 | ||
ExecutiveVice President and | 2017 | 650,000 | 365,679 | 450,013 | — | 263,152 | 386,641 | 2,115,485 | ||
ChiefExecutive Officer—AsiaPacific | 2016 | 642,460 | 1,365,680 | 450,010 | 635,262 | 326,186 | 235,970 | 3,655,568 | ||
PawanVerma | 2018 | 550,000 | 1,312,563 | 150,003 | 348,562 | 90,599 | 42,514 | 2,494,241 | ||
ExecutiveVicePresident and | 2017 | 493,333 | 1,785,721 | 225,006 | — | 49,737 | 43,855 | 2,597,652 | ||
ChiefInformationandCustomer Connectivity Officer | 2016 | 461,250 | 261,603 | 225,005 | 360,252 | 70,795 | 239,928 | 1,618,833 |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3)(4) | Option Awards | Non-Equity Incentive Plan Compensation ($)(1)(5) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(6) | All Other Compensation ($)(7) | Total ($) |
Richard A. Johnson Chairman, President and Chief Executive Officer | 2021 | 1,150,000 | — | 6,440,063 | 1,610,012 | 4,169,900 | 1,038,044 | 50,306 | 14,458,325 |
2020 | 996,667 | — | 4,937,518 | 1,200,002 | 3,847,900 | 880,582 | 78,651 | 11,941,320 | |
2019 | 1,137,500 | — | 4,937,521 | 1,200,004 | 1,378,650 | 521,588 | 46,942 | 9,222,205 | |
Andrew E. Page Executive Vice President and Chief Financial Officer | 2021 | 496,193 | 500,000 | 1,656,881 | 184,503 | 675,870 | — | 21,048 | 3,534,495 |
Franklin R. Bracken Executive Vice President and Chief Operating Officer | 2021 | 643,542 | — | 1,396,860 | 199,212 | 943,273 | — | 231,301 | 3,414,188 |
W. Scott Martin Executive Vice President, Chief Strategy and Corporate Development Officer | 2021 | 611,250 | — | 979,079 | 199,212 | 856,032 | 161,918 | 79,963 | 2,887,454 |
2020 | 538,659 | — | 641,277 | 200,000 | 549,398 | 133,364 | 64,429 | 2,127,127 | |
2019 | 518,750 | — | 612,563 | 200,015 | 204,336 | 63,354 | 24,622 | 1,623,640(8) | |
Andrew I. Gray Executive Vice President and Chief Commercial Officer | 2021 | 611,250 | — | 1,079,089 | 194,763 | 831,273 | 81,944 | 62,034 | 2,860,353 |
2020 | 512,663 | — | 419,349 | 75,002 | 613,695 | 60,216 | 202,416(8) | 1,883,341(8) | |
Lauren B. Peters(9) Former Executive Vice President and Chief Financial Officer | 2021 | 175,000 | — | — | — | — | — | 70,762 | 245,762 |
2020 | 653,333 | — | 673,111 | 250,002 | 878,325 | 384,221 | 81,301 | 2,920,293 | |
2019 | 693,750 | — | 950,053 | 250,006 | 315,309 | 298,364 | 18,455 | 2,525,937 | |
Vijay Talwar(10) Former Executive Vice President and Chief Executive Officer—EMEA | 2021 | 576,920 | — | 808,332 | 202,071 | — | — | 2,296,335 | 3,883,658 |
2020 | 606,667 | — | 737,544 | 250,002 | 780,000 | 170,661 | 265,480(8) | 2,810,354(8) | |
2019 | 650,000 | — | 737,575 | 250,006 | — | 68,966 | 790,303(8) | 2,496,850(8) |
Notes to Summary Compensation Table
(1) | The amounts in columns (c) and |
(2) | The amount in column (d) reflects the sign-on bonus that Mr. Page received in connection with the commencement of his employment in April 2021. |
(3) | The amounts reflected in |
The amounts in |
I—Cash Incentive Payouts for 2018
Payout in 2019 | Payout in 2020 | |||
LTIP 2017-18 | ||||
Performance Period | Total | |||
Annual Bonus Plan | (Cash Payout Earned— | As Shown in Summary | ||
Cash Payment for 2018 | Payable in 2020) | Compensation Table | ||
Name | ($) | ($) | ($) | |
R. Johnson | 1,859,000 | N/A | 1,859,000 | |
L. Peters | 427,781 | — | 427,781 | |
S. Jacobs | 1,336,200 | — | 1,336,200 | |
L. Kimble | — | — | — | |
P. Verma | 348,562 | — | 348,562 |
II—Cash Incentive Payouts for 2016
Payout in 2017 | Payout in 2018 | |||
LTIP 2015-16 | ||||
Performance Period | Total | |||
Annual Bonus Plan | (Cash Payout Earned— | As Shown in Summary | ||
Cash Payment for 2016 | Paid in 2018) | Compensation Table | ||
Name | ($) | ($) | ($) | |
R. Johnson | 1,301,738 | 1,298,194 | 2,599,932 | |
L. Peters | 393,514 | 320,574 | 714,088 | |
S. Jacobs | 521,867 | 430,371 | 952,238 | |
L. Kimble | 318,018 | 317,244 | 635,262 | |
P. Verma | 184,039 | 176,213 | 360,252 |
(5) | The amounts in |
(6) | The amounts in |
(7) | The amounts in column (i) represent perquisites and other compensation attributable to the |
Name | Auto Allow. ($) | Car Service Reimb. ($) | Med. Expense Reimb. ($)(A) | Accrual for Post-Ret. Med. ($) | Supp. LTD Ins. Prem. ($) | Univ. Life Ins. Prem. ($) | Financial Planning ($)(B) | Match Under 401(k) and Excess Savings Plans ($)(C) | Relo. ($)(D) | Foreign Earnings ($)(E) | Expatriate Tax Payments ($)(E) | Vacation Payout ($) | Accrued Severance Benefits ($) | Total ($) |
Johnson | 12,679 | 1,154 | 7,670 | — | 5,666 | 3,987 | 9,000 | 10,150 | — | — | — | — | — | 50,306 |
Page | 12,442 | — | 5,000 | — | 1,309 | 2,297 | — | — | — | — | — | — | — | 21,048 |
Bracken | 23,291 | — | 3,687 | — | 4,130 | 1,929 | 10,455 | 42,476 | 145,333 | — | — | — | — | 231,301 |
Martin | 21,329 | — | — | — | 4,426 | — | 13,629 | 40,579 | — | — | — | — | — | 79,963 |
Gray | 18,304 | — | 4,588 | — | 3,527 | 1,898 | 8,775 | 10,150 | — | — | 14,792 | — | — | 62,034 |
Peters(F) | — | — | 1,755 | 56,979 | — | 1,878 | — | 10,150 | — | — | — | — | — | 70,762 |
Talwar(F) | — | — | 7,335 | — | 4,130 | 2,845 | 10,455 | 10,150 | 177,685 | 113,900 | 269,777 | 2,558 | 1,697,500 | 2,296,335 |
![]() | (A) | The amounts shown reflect amounts reimbursed in 2021, which may also include reimbursements of amounts submitted in 2021 for expenses incurred in 2020. |
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Executive CompensationEXECUTIVE COMPENSATION
(B) | The amounts shown reflect the total amounts paid, including fees. |
(C) | The amounts shown reflect the Company’s matching contributions under our defined contribution plans, the 401(k) Plan and Excess Savings Plan, made to the NEO’s accounts. |
(D) | For Mr. Bracken, the amount shown reflects expenses in connection with his relocation to the Company’s office in Bradenton, Florida, and for Mr. Talwar, the amount shown reflects expenses in connection with his relocation to the United States upon the termination of his employment. |
(E) | For Mr. Gray, the amount shown reflects tax equalization payments, and U.S. and foreign tax payments net of hypothetical tax deductions, in connection with his international assignment for 2020 that were paid in 2021, and for Mr. Talwar, the amounts shown reflect expatriate compensation in connection with his role as Executive Vice President and Chief Executive Officer—EMEA in Vianen, The Netherlands. Under Foreign Earnings, the amount shown includes expatriate benefits and allowances for certain goods and services differential, housing, automobile costs, and tax preparation assistance in connection with his international assignment. Mr. Talwar received the majority of these benefits under the IAP, which applies to employees on international assignment and is designed to minimize any financial detriment or gain to the employee on assignment. Under Expatriate Tax Payments, the amount shown includes tax equalization payments, and U.S. and foreign tax payments net of hypothetical tax deductions, in connection with his international assignment. These payments were made under the IAP and are designed to facilitate this assignment by holding the team member responsible for the tax liabilities he would have incurred had he remained in his home country. |
(F) | The amounts shown reflect perquisites attributable prior to Ms. Peters and Mr. Talwar’s termination of employment. Additional information on Ms. Peters and Mr. Talwar’s termination payments is provided beginning on page 92 under Potential Payments Upon Termination or Change in Control. |
(8) | The amounts in columns (i) and (j) are updated from the disclosure found in our 2021 Proxy Statement to include (x) the Total for Mr. Martin for 2019, and the All Other Compensation and Total for Mr. Gray for 2020, to include the Change in Pension Value and Non-Qualified Deferred Compensation Earnings, and Relocation, respectively, which values were correctly included in the Summary Compensation Table and footnote 6 thereto; and (y) the All Other Compensation and Total for Mr. Talwar for 2019 and 2020 to include additional relocation expenses of $34,186, and financial planning, relocation, foreign earnings, and expatriate tax payments of $780,389, respectively, which were updated after the filing of our 2021 Proxy Statement. Note that, although Mr. Talwar was not a NEO in 2019, the Company disclosed his 2019 compensation in the Summary Compensation Table when he first became an NEO in 2020. |
(9) | Ms. Peters ceased to serve as Executive Vice President and Chief Financial Officer effective April 12, 2021, and departed from the Company effective May 1, 2021. |
Car | Med. | Supp. | Expatriate | |||||||
Auto. | Service | Univ. Life | Expense | LTD Ins. | Financial | 401(k) | Foreign | Tax | ||
Allow. | Reimb. | Ins. Prem. | Reimb. | Prem. | Planning | Match | Earnings | Payments | Total | |
Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
R. Johnson | 4,845 | 28,872 | 4,927 | 6,933 | 3,662 | 10,612 | 2,750 | – | — | 62,601 |
L. Peters | 3,963 | – | 2,763 | 3,928 | – | – | 2,750 | – | — | 13,404 |
S. Jacobs | 15,975 | – | – | 5,255 | – | – | 2,750 | – | — | 23,980 |
L. Kimble | – | – | 3,581 | 766 | – | – | – | 14,243 | 1,296,013 | 1,314,603 |
P. Verma | 18,161 | – | 2,870 | 4,778 | 3,314 | 13,391 | – | – | — | 42,514 |
(10) | Mr. Talwar ceased to serve as Executive Vice President and Chief Executive Officer—EMEA effective November 17, 2021, and departed from the Company effective December 16, 2021, under circumstances the Human Capital Committee determined constituted a termination without cause under the Company’s employment agreement with Mr. Talwar, thereby requiring the Company to pay Mr. Talwar severance benefits according to the terms of his employment agreement. |
The Company has established a trust for certain benefit plans, arrangements, and agreements, including the SERP, the Foot Locker Excess Cash BalancePlan, the Excess Savings Plan, the executive employment agreements, and other benefit plans, agreements, or arrangements that may be covered at a later date (collectively, the “Benefit Obligations”). Upon the occurrence of a Potential Change in Control of the Company as(as defined in the trust agreement,agreement), the Company is required to fund the trust with an amount sufficient to pay the total amount of the Benefit Obligations. Following the occurrence, and during the pendency, of a Potential Change in Control, the trustee would be required to make payments of Benefit Obligations to the extent these payments are not made by the Company.
Employment AgreementsEMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
We have employment agreements with Messrs. Johnson and Martin, and while we do not have employment agreements with Messrs. Page, Bracken, and Gray, they are each ofentitled to substantially the NEOs,same benefits, and we describesubject to substantially the same provisions, as Mr. Martin. We had employment agreements with Ms. Peters and Mr. Talwar substantially in the same form as Mr. Martin prior to their departure from the Company. The material terms of each of these agreementsarrangements are described below. Information on estimated potential payments and benefits upon termination of the agreements is described under
Name | Term End Date | Base Salary Rate(1) ($) | Two-Year Non-Compete and Non-Solicitation |
Johnson | 01/31/24(2) | $1,150,000(3) | ![]() |
Page | N/A | 615,000 | ![]() |
Bracken | N/A | 800,000(4) | ![]() |
Martin | 01/31/23(2) | 615,000 | ![]() |
Gray | N/A | 615,000 | ![]() |
Peters(5) | 05/01/21 | 700,000 | ![]() |
Talwar(6) | 12/16/21 | 665,000 | ![]() |
(1) | These base salary rates are as of January 29, 2022 for each of the NEOs, except for Ms. Peters and Mr. Talwar, which are as of their respective termination dates. |
(2) | Mr. Johnson’s employment agreement is automatically extended for another year unless notice of non-renewal is given one year prior to the then-current expiration of the term. Mr. Martin’s employment agreement is automatically extended for another year unless notice of non-renewal is given three months prior to the then-current expiration of the term. |
(3) | During the term of the agreement, the Company will pay Mr. Johnson an annual base salary of not less than $1,000,000. See Notes 1 and 2 to the Grants of Plan-Based Awards in Fiscal 2021 beginning on page 74 for the 2021 payment levels at threshold, target, and maximum performance for the Annual Incentive Plan and PSU awards for Mr. Johnson. The payment levels are based on a percentage of Mr. Johnson’s base salary rate. |
![]() 72 | Foot Locker, Inc. |
Potential Payments Upon Termination or Change in Controlbeginning on page 65.EXECUTIVE COMPENSATION
Richard A. Johnson
(4) | Mr. Bracken served as Executive Vice President and Chief Executive Officer—North America until November 2021. His base salary rate was $615,000 at that time until he was promoted to Executive Vice President and Chief Operating Officer in November 2021. |
(5) | Ms. Peters ceased to serve as Executive Vice President and Chief Financial Officer effective April 12, 2021, and departed from the Company effective May 1, 2021, at which time her employment agreement terminated. Certain obligations under her employment agreement continue post-termination, such as Ms. Peters’s non-competition obligation. |
(6) | Mr. Talwar ceased to serve as Executive Vice President and Chief Executive Officer—EMEA effective November 17, 2021, and departed from the Company effective December 16, 2021 under circumstances the Human Capital Committee determined constituted a termination without cause, at which time his employment agreement terminated. Certain obligations under his employment agreement continue post-termination, such as Mr. Talwar’s non-competition obligation. |
Position.We have an employment agreement with Mr.Messrs. Johnson, in connection with his position as Chief Executive Officer.
Term.The term of this agreement ends on January 31, 2021. The agreement contains an “evergreen” renewal provision that provides for additional one-year renewals of the employment term, unless either party gives notice of non-renewal one year prior to the end of the then-current term.
Base SalaryPage, Bracken, Gray, and Bonus.During the term of the agreement, the Company shall pay Mr. Johnson an annual base salary of not less than $1,000,000. Mr. Johnson’s 2018 base salary rate was $1,100,000. As Chief Executive Officer, for 2018, Mr. Johnson’s annual bonus at target under the Annual Bonus Plan was 200% of his base salary, and his annual bonus at target under the LTIP was 250% of his base salary at the start of the performance period.
Benefit Plans and Perquisites.Mr. Johnson isMartin are entitled to participate in all bonus, incentive and equity plans offered to senior executives in effect at the start of their agreements and offer letters, as applicable, as well as benefits, including retirement plans, company-paid life insurance, long-term disability coverage, and reimbursement for certain medical transportation, and financial planning expenses.
Non-Compete Provision.Mr. Johnson’s agreement provides that he may not compete with the Company or solicit our employees for two years following the termination of his employment agreement.
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Executive Compensation
Certain Defined Terms. Mr. Johnson’s agreement includes definitions of certain terms such as “Cause” (i.e., for Mr. Johnson’s dismissal), “Good Reason” (i.e., for Mr. Johnson’s resignation), and “Change in Control” (which includes, among other things, the acquisition of 35% or more of the Company’s outstanding stock).
Other NEOs
Position/Term/Base Salary.We have substantially identical employment agreements with these executives in their current positions, as follows:
The terms of the agreements will automatically be extended for another year unless notice of non-renewal is given by the October 31 prior to the then-current expiration of the term. We pay these executives annual base salaries at rates not less than their salaries at the start of their agreements. The executives’ base salaries for 2018 are shown in the table above.
Benefit Plans and Perquisites. These executives are entitled to participate in all benefit plans and arrangements in effect at the start of the agreement, including retirement plans, Annual Bonus Plan, LTIP, medical, dental, and disability plans,expenses, and any other plans subsequently offered to our senior executives.
Non-Compete Provision.The executives’ agreements provide that they may not compete with the Company or solicit our employees for two years following the termination of their employment agreements.
Certain Defined Terms. The executives’ agreementsand offer letters, as applicable, include definitions of certain terms such as “Cause” (i.e., fordismissal) by the executive’s dismissal),company under certain circumstances, “Good Reason” (i.e., for the executive’s resignation)resignation under certain circumstances), “Change in Control” (which includes, among other things,(e.g., the acquisition of 35% or more of the Company’s outstanding stock), and “Disability.”
Information on estimated potential payments and benefits upon termination of the NEOs’ employment or upon a change in control is described under Potential Payments Upon Termination or Change in Control beginning on page 92.
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EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
Executive Compensation
Grants of Plan-Based Awards TableGRANTS OF PLAN-BASED AWARDS IN FISCAL 2021
The following table shows the awards made to the NEOs in 2018 under the Annual Bonus Plan and the LTIP, as well as the AFG awards and RSU and stock option awards under the Stock Incentive Plan:2021:
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Name | Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | ||||||||||||
Johnson | Annual Incentive | 03/24/21(1) | 575,000 | 2,300,000 | 4,600,000 | |||||||||||||||||||
PSU | 03/24/21(2) | 22,524 | 90,096 | 180,191 | 4,830,047 | |||||||||||||||||||
Stock Option | 03/24/21(3) | 79,971 | 53.61 | 1,609,816 | ||||||||||||||||||||
RSU | 03/24/21(4) | 30,032 | 1,610,016 | |||||||||||||||||||||
Page | Annual Incentive | 04/12/21(1) | 93,198 | 372,791 | 745,582 | |||||||||||||||||||
PSU | 04/12/21(2) | 933 | 3,730 | 7,460 | 222,793 | |||||||||||||||||||
PSU | 04/12/21(2) | 2,091 | 8,363 | 16,726 | 499,522 | |||||||||||||||||||
Stock Option | 04/13/21(3) | 8,333 | 58.25 | 184,493 | ||||||||||||||||||||
RSU | 04/12/21(4) | 12,557 | 750,030 | |||||||||||||||||||||
RSU | 04/13/21(4) | 3,168 | 184,536 | |||||||||||||||||||||
Bracken | Annual Incentive | 03/24/21(1) | 131,349 | 525,398 | 1,050,795 | |||||||||||||||||||
PSU | 03/24/21(2) | 2,787 | 11,148 | 22,296 | 597,643 | |||||||||||||||||||
Stock Option | 03/24/21(3) | 9,895 | 53.61 | 199,186 | ||||||||||||||||||||
RSU | 03/24/21(4) | 3,716 | 199,215 | |||||||||||||||||||||
RSU | 11/16/21(4) | 10,661 | 600,001 | |||||||||||||||||||||
Martin | Annual Incentive | 03/24/21(1) | 114,627 | 458,507 | 917,014 | |||||||||||||||||||
PSU | 03/24/21(2) | 2,725 | 10,899 | 21,797 | 584,295 | |||||||||||||||||||
Stock Option | 03/24/21(3) | 9,674 | 53.61 | 194,738 | ||||||||||||||||||||
RSU | 03/24/21(4) | 3,633 | 194,765 | |||||||||||||||||||||
RSU | 11/16/21(4) | 3,554 | 200,019 | |||||||||||||||||||||
Gray | Annual Incentive | 03/24/21(1) | 114,627 | 458,507 | 917,014 | |||||||||||||||||||
PSU | 03/24/21(2) | 2,725 | 10,899 | 21,797 | 584,295 | |||||||||||||||||||
Stock Option | 03/24/21(3) | 9,674 | 53.61 | 194,738 | ||||||||||||||||||||
RSU | 03/24/21(4) | 3,633 | 194,765 | |||||||||||||||||||||
RSU | 11/16/21(4) | 5,331 | 300,029 | |||||||||||||||||||||
Talwar | PSU | 03/24/21(2) | 2,827 | 11,308 | 22,615 | 606,222 | ||||||||||||||||||
Stock Option | 03/24/21(3) | 10,037 | 53.61 | 202,045 | ||||||||||||||||||||
RSU | 03/24/21(4) | 3,770 | 202,110 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ( j) | (k) | (l) | |
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(6) | |
R. Johnson | 03/28/18(1) | 550,000 | 2,200,000 | 4,400,000 | ||||||||
03/28/18(2) | 15,353 | 61,412 | 122,823 | 2,750,029 | ||||||||
04/12/18(3) | 27,216 | 108,862 | 217,723 | 5,000,032 | ||||||||
03/28/18(4) | 91,093 | 44.78 | 1,124,999 | |||||||||
03/28/18(5) | 25,123 | 1,125,008 | ||||||||||
L. Peters | 03/28/18(1) | 126,563 | 506,250 | 1,012,500 | ||||||||
03/28/18(2) | 3,769 | 15,074 | 30,148 | 675,014 | ||||||||
04/12/18(3) | 4,083 | 16,330 | 32,659 | 750,037 | ||||||||
04/12/18(3) | 5,444 | 250,043 | ||||||||||
03/28/18(4) | 20,243 | 44.78 | 250,001 | |||||||||
03/28/18(5) | 5,583 | 250,007 | ||||||||||
S. Jacobs | 03/28/18(1) | 212,500 | 850,000 | 1,700,000 | ||||||||
03/28/18(2) | 4,746 | 18,982 | 37,964 | 850,014 | ||||||||
04/12/18(3) | 6,124 | 24,494 | 48,988 | 1,125,009 | ||||||||
04/12/18(3) | 8,165 | 375,018 | ||||||||||
03/28/18(4) | 20,243 | 44.78 | 250,001 | |||||||||
03/28/18(5) | 5,583 | 250,007 | ||||||||||
L. Kimble | 03/28/18(1) | 121,875 | 487,500 | 975,000 | ||||||||
03/28/18(2) | 2,722 | 10,887 | 21,774 | 487,520 | ||||||||
04/12/18(3) | 4,083 | 16,330 | 32,659 | 750,037 | ||||||||
04/12/18(3) | 5,444 | 250,043 | ||||||||||
03/28/18(4) | 18,219 | 44.78 | 225,005 | |||||||||
03/28/18(5) | 5,025 | 225,020 | ||||||||||
P. Verma | 03/28/18(1) | 68,750 | 275,000 | 481,250 | ||||||||
03/28/18(2) | 2,303 | 9,212 | 18,424 | 412,513 | ||||||||
04/12/18(3) | 3,062 | 12,247 | 24,494 | 562,505 | ||||||||
04/12/18(3) | 4,083 | 187,532 | ||||||||||
03/28/18(4) | 12,146 | 44.78 | 150,003 | |||||||||
03/28/18(5) | 3,350 | 150,013 |
![]() 74 | Foot Locker, Inc. |
2022 Proxy Statement | ![]() 75 |
Notes to Grants of Plan-Based Awards TableEXECUTIVE COMPENSATION
(1) | Annual Incentive Awards |
Amounts shownThe amounts in columns (c), (d), and (e) reflect the payment levels at threshold, target, and maximum performance for the 20182021 fiscal year under the Annual BonusIncentive Plan and reflect the potential amounts that wouldto be paid at the end of the period if the applicable performance goals wereare achieved. The estimated bonusannual incentive payouts are based on a percentage of the executive’sNEO’s base salary rate, as shown in the table below:
Name | Threshold | Target | Maximum |
R. Johnson | 50% | 200% | 400% |
L. Peters, L. Kimble and P. Verma | 18.75% | 75% | 150% |
S. Jacobs | 25% | 100% | 200% |
Threshold | Target | Maximum | |
Name | (%) | (%) | (%) |
Johnson | 50 | 200 | 400 |
Page(A), Martin, and Gray | 18.75 | 75 | 150 |
Bracken(B) | 18.75 | 75 | 150 |
25 | 100 | 200 |
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| Mr. Page joined the Company as Executive Vice President and Chief Financial Officer in April 2021. His target Annual Incentive Award was prorated for the 2021 performance period. |
(B) | Mr. Bracken served as Executive Vice President and Chief Executive Officer–North America until November 2021. His target award was set at 75% of his base salary rate at that time. Mr. Bracken was promoted to Executive Vice President and Chief Operating Officer in November 2021. His target award was set at 100% of his base salary rate at that time. His target Annual Incentive Award was prorated for the 2021 performance period. |
Executive Compensation
The annual bonus payments actually madeAlthough Ms. Peters and Mr. Talwar participated in the Annual Incentive Plan in 2021, they were not eligible to receive a payment under the plan because their employment terminated prior to the NEOs for 2018 are shown in Note 4 tocompletion of the Summary Compensation Table on page 53.plan year.
(2) |
ProvidedFor Mr. Page, provided the performance goals for the 2018-192020-21 long-term performance measurement period are achieved, the payout structure of the executives’ awards is as follows: (a) 100% of the award would be payable in RSUs, and (b) the payoutPSUs would be subject to a time-based, one-year vesting period following the end of the performance measurement period before payout to the executives.period. Columns (f), (g), and (h) showreflect the number of RSUsPSUs that would be paid out at threshold, target, and maximum performance if the applicable performance goals are achieved for the 2018-192020-21 performance measurement period.
The threshold, target, and maximum number of RSUs for each executive was calculated on the grant date on the basis of that day’s closing stock price of a share of Common Stock. The closing price on the grant date of March 28, 2018 for each of the NEOs was $44.78. Similarly, the grant date fair value of the RSU awards are based on the closing stock price on this grant date. The actual number of RSUs paid out will be based on the Company’s performance compared to targets. The value of the RSUs received by an executive will depend upon the Company’s stock price on the payment date in 2021. No dividends are paid or accrued for the RSUs.
The aggregate payout in stock at threshold, target, and maximum performance for each of the NEOs is based on a percentage of the executive’s base salary in the first year of the performance period, adjusted for promotion-related salary increases. The percent of base salary for each executive at threshold, target, and maximum performance is shown in the table below:
Name | Threshold | Target | Maximum |
R. Johnson | 62.5% | 250% | 500% |
L. Peters and S. Jacobs | 25% | 100% | 200% |
L. Kimble and P. Verma | 18.75% | 75% | 150% |
No amounts would be paid to the executives under the LTIP awards unless the performance goals for the performance measurement period are achieved.
The AFG Award is a special long-term incentive equity award covering a three-year performance period—2018-20. The payout structure of the executives’ awards is as follows: (a)PSUs for Mr. Johnson, 100% of the award is in the form of PBRSUs, and he would earn a payout following the end of the performance period only if the performance goals are achieved, and (b) for the other NEOs, 75% of the award is in the form of PBRSUs and 25% is in the form of time-based RSUs, payable following the end of the performance period, subject to the achievement of the performance goals with regard to the PBRSUs.
The threshold, target, and maximum number of RSUs for each executive wasPage were calculated on the grant date on the basis of that day’s closing stock price of a share of Common Stock. The closing price on the grant date of April 12, 20182021 for each of the NEOsMr. Page was $45.93.$59.73. Similarly, the grant date fair value of the RSU awardsPSUs are based on the closing stock price on thisthe associated grant date. The actual number of RSUsPSUs paid out will be based on the Company’s performance compared to targets. The value of the RSUsPSUs received by an executiveMr. Page will depend upon the Company’s stock price on the payment date in 2021.2023. No dividends are paid or accrued forin connection with the RSUs.
PSUs. The percentage of achievement of the performance goals at the end of the performance period will be applied to the target number of PBRSUs granted to each of the executives to determine the actual number of PBRSUs that may be earned. If the threshold performance goals are not met, no PBRSUs will be earned or paid out to any executive.
The amounts shownaggregate payout in the table below reflect the estimated payment levelsstock at threshold, target, and maximum performance for Mr. Page is based on a percentage of his base salary rate in the 2018-20second year of the performance measurement period. The PSU award values for the 2020-21 performance period for Mr. Page at threshold, target, and maximum performance are listed in the following table:
Threshold | Target | Maximum | |
Name | ($) | ($) | ($) |
R. Johnson | 1,250,000 | 5,000,000 | 10,000,000 |
L. Peters and L. Kimble | 187,500 | 750,000 | 1,500,000 |
S. Jacobs | 281,250 | 1,125,000 | 2,250,000 |
P. Verma | 140,625 | 562,500 | 1,125,000 |
Threshold | Target | Maximum | |
Name | ($) | ($) | ($) |
Page(A) | 55,692 | 222,769 | 445,537 |
(A) | Mr. Page joined the Company as Executive Vice President and Chief Financial Officer in April 2021. His PSU award was prorated for the 2020-21 performance period. |
The amounts shown inFor each of the table representsNEOs, provided the performance goals for the 2021-22 long-term performance period are achieved, the payout of the PSUs would be subject to a time-based, one-year vesting period following the end of the performance period. Columns (f), (g), and (h) reflect the number of time-based RSUs awarded underPSUs that would be paid out at threshold, target, and maximum performance if the Stock Incentive Planapplicable performance goals are achieved for the 2021-22 performance period. The threshold, target, and maximum number of PSUs for each NEO were calculated on the grant date on the basis of that day’s closing stock price of a share of Common Stock. The closing price on the grant date of March 24, 2021 for each of the NEOs other than Mr. Page was $53.61, and the closing price on the grant date of April 12, 2021 for Mr. Page was $59.73. Similarly, the grant date fair value of the PSUs are based on the closing stock price on the associated grant date. The awardactual number of PSUs paid out will vest accordingbe based on the Company’s performance compared to targets. The value of the schedule below, provided thatPSUs received by an NEO will depend upon the executive remains employed byCompany’s stock price on the Company through the vesting date.payment date in 2024. No dividends are paid or accrued in connection with the PSUs. The aggregate payout in stock at threshold, target, and maximum performance for RSU awards.each of the NEOs is based on a percentage of their base salary rate in the first year of the performance period. The PSU award values for the 2021-22 performance period for the NEOs at threshold, target, and maximum performance are listed in the following table:
Threshold | Target | Maximum | |
Name | ($) | ($) | ($) |
Johnson | 1,207,500 | 4,830,000 | 9,660,000 |
Page(A) | 124,880 | 499,519 | 999,037 |
Bracken | 149,405 | 597,620 | 1,195,240 |
Martin and Gray | 146,063 | 584,250 | 1,168,500 |
Talwar(B) | 151,543 | 606,173 | 1,212,346 |
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![]() 76 | Foot Locker, Inc. |
Executive CompensationEXECUTIVE COMPENSATION
Stock Option |
The amounts in column (j) reflect the number of stock options granted in 2018awarded for the 2021 fiscal year under the Stock Incentive Plan. The exercise price reflected in column (k) is equal to the closing price of a share of Common Stock on the grant date. In general, no portion of any stock option may be exercised until the first anniversary of its grant date. Vested options may be exercised for ten years following the grant date, unless the option is cancelled or exercised sooner. If the executiveNEO retires, becomes disabled, or dies while employed by the Company or one of its subsidiaries, all unexercised options that are then exercisable plusand those options that would have become exercisable on the next anniversary of the grant date will remain (or become) exercisable as of that date. Options granted in 20182021 will become exercisable upon a participant’s termination of employment on or within 24 months following a Change in Control. In general, options may remain exercisable for up to three years following a participant’s retirement or termination due to disability, and for up to one year for any other termination of employment for reasons other than cause.
The vesting scheduleschedules for the stock options granted to the executivesNEOs in 2018 is2021 are as follows:
Shares | Vest Date: Shares | Vest Date: Shares | Vest Date: Shares | |||||
Name | Grant Date | (#) | (#) | (#) | (#) | |||
R. Johnson | 03/28/18 | 91,093 | 03/28/19: | 30,364 | 03/28/20: | 30,364 | 03/28/21: | 30,365 |
L. Peters and S. Jacobs | 03/28/18 | 20,243 | 03/28/19: | 6,747 | 03/28/20: | 6,748 | 03/28/21: | 6,748 |
L. Kimble | 03/28/18 | 18,219 | 03/28/19: | 6,073 | 03/28/20: | 6,073 | 03/28/21: | 6,073 |
P. Verma | 03/28/18 | 12,146 | 03/28/19: | 4,048 | 03/28/20: | 4,049 | 03/28/21: | 4,049 |
Shares | Vest Date: Shares | Vest Date: Shares | Vest Date: Shares | |||||
Name | Grant Date | (#) | (#) | (#) | (#) | |||
Johnson | 03/24/21 | 79,971 | 03/24/22: | 26,657 | 03/24/23: | 26,657 | 03/24/24: | 26,657 |
Page | 04/13/21 | 8,333 | 04/13/22: | 2,777 | 04/13/23: | 2,778 | 04/13/24: | 2,778 |
Bracken | 03/24/21 | 9,895 | 03/24/22: | 3,298 | 03/24/23: | 3,298 | 03/24/24: | 3,299 |
Martin and Gray | 03/24/21 | 9,674 | 03/24/22: | 3,224 | 03/24/23: | 3,225 | 03/24/24: | 3,225 |
Talwar | 03/24/21 | 10,037 | 03/24/22: | * | 03/24/23: | * | 03/24/24: | * |
* | Unvested portion of stock option award cancelled upon termination of employment. |
The amounts shown in the table representcolumn (i) reflect the number of RSUs awarded for the 2021 fiscal year under the Stock Incentive Plan on the grant date.Plan. The awardawards will vest according to the scheduleschedules below, provided that the executiveNEO remains employed by the Company through the vesting date. No dividends are paid or accrued for RSU awards.
Shares | |||
Name | Grant Date | (#) | Vest Date |
03/ | 03/ | ||
04/12/21 | 4,186 | 04/12/23 | |
04/12/21 | 4,186 | 04/12/24 | |
04/13/21 | 3,168 | 04/13/24 | |
03/ | 03/ | ||
11/16/21 | 10,661 | 11/16/24 | |
03/ | 03/ | ||
11/16/21 | 3,554 | 11/16/24 | |
Gray | 03/24/21 | 3,633 | 03/24/24 |
11/16/21 | 5,331 | 11/16/24 | |
Talwar | 03/24/21 | 3,770* | 03/24/24 |
* | Mr. Talwar forfeited these RSU awards in connection with the termination of his employment. |
Grant Date Fair Value |
The amounts shown in column (l) reflect the aggregate grant date fair valuevalues of the RSU, PSU, and stock option awards granted in 2018,2021, calculated in accordance with stock-based compensation accounting rules. A discussion of the assumptions used in computing the award values are found in Note 21 to our financial statements in our 2018 Annual Report, on Form 10-K.which is available at investors.footlocker-inc.com/ar. For option awards, the value is calculated by multiplying the Black-Scholes value by the number of options granted. For RSUs, the fair value isvalues are calculated by multiplying the closing price of our Common Stock on the NYSE on the award date by the number of RSUs granted. For the PBRSUs and the performance-based portion of the AFG Awards granted under the Stock Incentive Plan, in connection with the 2018-19 and the 2018-20 performance periods, respectively,PSUs, the fair value is calculated based upon the probable outcome of meeting the performance conditions at the target performance level and multiplying the number of unitsPSUs that would be received at that level by the closing price of a share of our Common Stock on the grant date. This is consistent with the estimate of the aggregate compensation cost to be recognized over the service period determined at the grant date under stock-based compensation accounting rules. For the stock options, the values are calculated by multiplying the Black-Scholes value by the number of stock options awarded. All of these values, and corresponding grant dates, are shown in the table below.
AFG | |||||
Black-Scholes | LTIP | Time-Based | AFG PBRSU | Time-Based | |
Value for Stock | PBRSU Awards | RSU Awards | Awards | RSU Awards | |
Options Granted on | Granted on | Granted on | Granted on | Granted on | |
March 28, 2018 | March 28, 2018 | March 28, 2018 | April 12, 2018 | April 12, 2018 | |
Name | ($) | ($) | ($) | ($) | ($) |
R. Johnson | 12.35 | 44.78 | 44.78 | 45.93 | — |
L. Peters | 12.35 | 44.78 | 44.78 | 45.93 | 45.93 |
S. Jacobs | 12.35 | 44.78 | 44.78 | 45.93 | 45.93 |
L. Kimble | 12.35 | 44.78 | 44.78 | 45.93 | 45.93 |
P. Verma | 12.35 | 44.78 | 44.78 | 45.93 | 45.93 |
Stock | Stock | |||||||
RSUs | RSUs | RSUs | RSUs | PSUs | PSUs | Options | Options | |
03/24/21 | 04/12/21 | 04/13/21 | 11/16/21 | 03/24/21 | 04/12/21 | 03/24/21 | 04/13/21 | |
Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
Johnson and Talwar | 53.61 | – | – | – | 53.61 | – | 20.13 | – |
Page | – | 59.73 | 58.25 | – | – | 59.73 | – | 22.14 |
Bracken, Martin, and Gray | 53.61 | – | – | 56.28 | 53.61 | – | 20.13 | – |
Assuming the maximum performance level, the grant date fair value of the PBRSUsPSUs granted for the long-term performance measurement period of 2018-192020-21 would be $5,500,014$445,537 for Mr. Page, and for the long-term performance period of 2021-22, would be $9,660,000 for Mr. Johnson; $1,350,027 for Ms. Peters; $1,700,028$999,037 for Mr. Jacobs; $975,040Page; $1,195,240 for Mr. Kimble; and $825,027Bracken; $1,168,500 for Mr. Verma. Assuming the maximum performance level, the grant date fair value of the performance-based AFG awards would be $10,000,017Martin, $1,168,500 for Mr. Johnson; $1,500,028 for Ms. Peters; $2,250,019Gray, and $1,212,346 for Mr. Jacobs; $1,500,028 for Mr. Kimble; and $1,125,009 for Mr. Verma.Talwar.
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Executive Compensation
EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
Outstanding Equity Awards at Fiscal Year-EndOUTSTANDING EQUITY AWARDS AT FISCAL 2021 YEAR-END
The following table shows the number of outstanding stock options, both vested and unvested, and the number of unvested shares of restricted stockRSUs, and RSUsthe number of PSUs, both earned but unvested and unearned, held by the NEOs at the end of the 20182021 fiscal year:
Option Awards | Stock Awards | |||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ( j) | |
Equity | Equity | Equity | ||||||||
Incentive | Incentive | Incentive Plan | ||||||||
Plan Awards: | Market | Plan Awards: | Awards: Market | |||||||
Number of | Number of | Number of | Number | Value of | Number of | or Payout Value | ||||
Securities | Securities | Securities | of Shares | Shares or | Unearned | of Unearned | ||||
Underlying | Underlying | Underlying | or Units | Units of | Shares, Units | Shares, Units | ||||
Unexercised | Unexercised | Unexercised | Option | of Stock | Stock | or Other Rights | or Other Rights | |||
Options | Options | Unearned | Exercise | Option | That Have | That Have | That Have Not | That Have Not | ||
(#) | (#) | Options | Price | Expiration | Not Vested | Not Vested | Vested | Vested | ||
Name | Exercisable(1) | Unexercisable(1) | (#) | ($) | Date | (#)(2) | ($)(3) | (#)(2) | ($)(3) | |
R. Johnson | 80,000 | — | — | 15.10 | 03/23/2020 | — | — | — | — | |
80,000 | — | — | 18.84 | 03/23/2021 | — | — | — | — | ||
49,000 | — | — | 30.92 | 03/21/2022 | — | — | — | — | ||
47,000 | — | — | 34.24 | 03/28/2023 | — | — | — | — | ||
37,000 | — | — | 45.08 | 03/26/2024 | — | — | — | — | ||
55,000 | — | — | 56.35 | 12/01/2024 | — | — | — | — | ||
207,900 | — | — | 62.11 | 03/25/2025 | — | — | — | — | ||
92,920 | 46,460 | — | 63.79 | 03/23/2026 | — | — | — | — | ||
47,069 | 94,138 | — | 72.83 | 03/22/2027 | — | — | — | — | ||
— | 91,093 | — | 44.78 | 03/28/2028 | — | — | — | — | ||
— | — | — | — | — | 25,123 | 1,383,272 | — | — | ||
— | — | — | — | — | — | — | 9,440 | 519,766 | ||
— | — | — | — | — | — | — | 15,353 | 845,336 | ||
— | — | — | — | — | — | — | 27,216 | 1,498,513 | ||
L. Peters | 40,000 | — | — | 24.75 | 05/26/2021 | — | — | — | — | |
44,000 | — | — | 30.92 | 03/21/2022 | — | — | — | — | ||
42,000 | — | — | 34.24 | 03/28/2023 | — | — | — | — | ||
34,000 | — | — | 45.08 | 03/26/2024 | — | — | — | — | ||
32,000 | — | — | 62.11 | 03/25/2025 | — | — | — | — | ||
19,006 | 9,504 | — | 63.79 | 03/23/2026 | — | — | — | — | ||
10,697 | 21,396 | — | 72.83 | 03/22/2027 | — | — | — | — | ||
— | 20,243 | — | 44.78 | 03/28/2028 | — | — | — | — | ||
— | — | — | — | — | 18,812 | 1,035,789 | — | — | ||
— | — | — | — | — | 5,583 | 307,400 | — | — | ||
— | — | — | — | — | 5,444 | 299,747 | — | — | ||
— | — | — | — | — | — | — | 1,738 | 95,694 | ||
— | — | — | — | — | — | — | 3,769 | 207,521 | ||
— | — | — | — | — | — | — | 4,083 | 224,810 | ||
S. Jacobs | 8,000 | — | — | 34.24 | 03/28/2023 | — | — | — | — | |
12,667 | — | — | 45.08 | 03/26/2024 | — | — | — | — | ||
13,600 | — | — | 56.35 | 12/01/2024 | — | — | — | — | ||
21,000 | — | — | 62.11 | 03/25/2025 | — | — | — | — | ||
19,006 | 9,504 | — | 63.79 | 03/23/2026 | — | — | — | — | ||
10,697 | 21,396 | — | 72.83 | 03/22/2027 | — | — | — | — | ||
— | 20,243 | — | 44.78 | 03/28/2028 | — | — | — | — | ||
— | — | — | — | — | 23,515 | 1,294,736 | — | — | ||
— | — | — | — | — | 5,583 | 307,400 | — | — | ||
— | — | — | — | — | 8,165 | 449,565 | — | — | ||
— | — | — | — | — | — | — | 2,189 | 120,526 | ||
— | — | — | — | — | — | — | 4,746 | 261,315 | ||
— | — | — | — | — | — | — | 6,124 | 337,187 | ||
L. Kimble | 19,000 | — | — | 45.08 | 03/26/2024 | — | — | — | — | |
21,000 | — | — | 62.11 | 03/25/2025 | — | — | — | — | ||
19,006 | 9,504 | — | 63.79 | 03/23/2026 | — | — | — | — | ||
9,628 | 19,256 | — | 72.83 | 03/22/2027 | — | — | — | — | ||
— | 18,219 | — | 44.78 | 03/28/2028 | — | — | — | — | ||
— | — | — | — | — | 15,677 | 863,176 | — | — | ||
— | — | — | — | — | 5,025 | 276,677 | — | — | ||
— | — | — | — | — | 5,444 | 299,747 | — | — | ||
— | — | — | — | — | — | — | 1,256 | 69,155 | ||
— | — | — | — | — | — | — | 2,722 | 149,873 | ||
— | — | — | — | — | — | — | 4,083 | 224,810 | ||
P. Verma | 11,346 | — | — | 73.21 | 08/10/2025 | — | — | — | — | |
9,503 | 4,752 | — | 63.79 | 03/23/2026 | — | — | — | — | ||
4,814 | 9,628 | — | 72.83 | 03/22/2027 | — | — | — | — | ||
— | 12,146 | — | 44.78 | 03/28/2028 | — | — | — | — | ||
— | — | — | — | — | 43,030 | 2,369,232 | — | — | ||
— | — | — | — | — | 3,350 | 184,451 | — | — | ||
— | — | — | — | — | 4,083 | 224,810 | — | — | ||
— | — | — | — | — | — | — | 2,303 | 126,803 | ||
— | — | — | — | — | — | — | 898 | 49,444 | ||
— | — | — | — | — | — | — | 113 | 6,222 | ||
— | — | — | — | — | — | — | 57 | 3,138 | ||
— | — | — | — | — | — | — | 3,062 | 168,594 |
Option Awards | Stock Awards | |||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | |||||||||
Johnson | 49,000 | – | – | 30.92 | 03/21/2022 | – | – | – | – | |||||||||
47,000 | – | – | 34.24 | 03/28/2023 | – | – | – | – | ||||||||||
37,000 | – | – | 45.08 | 03/26/2024 | – | – | – | – | ||||||||||
55,000 | – | – | 56.35 | 12/01/2024 | – | – | – | – | ||||||||||
207,900 | – | – | 62.11 | 03/25/2025 | – | – | – | – | ||||||||||
139,380 | – | – | 63.79 | 03/23/2026 | – | – | – | – | ||||||||||
141,207 | – | – | 72.83 | 03/22/2027 | – | – | – | – | ||||||||||
91,093 | – | – | 44.78 | 03/28/2028 | – | – | – | – | ||||||||||
46,552 | 23,277 | – | 58.94 | 03/27/2029 | – | – | – | – | ||||||||||
79,582 | 159,164 | – | 21.60 | 03/25/2030 | – | – | – | – | ||||||||||
– | 79,971 | – | 53.61 | 03/24/2031 | – | – | – | – | ||||||||||
– | – | – | – | – | 20,360 | 904,595 | – | – | ||||||||||
– | – | – | – | – | 30,032 | 1,334,322 | – | – | ||||||||||
– | – | – | – | – | 55,556 | 2,468,353 | – | – | ||||||||||
– | – | – | – | – | – | – | 180,191 | 8,005,886 | ||||||||||
– | – | – | – | – | – | – | 186,782 | 8,298,724 | ||||||||||
Page | – | 8,333 | – | 58.25 | 04/13/2031 | – | – | – | – | |||||||||
– | – | – | – | – | 3,168 | 140,754 | – | – | ||||||||||
– | – | – | – | – | 12,557 | 557,908 | – | – | ||||||||||
– | – | – | – | – | – | – | 7,460 | 331,448 | ||||||||||
– | – | – | – | – | – | – | 16,726 | 743,136 |
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Executive Compensation
EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
Option Awards | Stock Awards | |||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | |||||||||
Bracken | 934 | – | – | 45.08 | 03/26/2024 | – | – | – | – | |||||||||
1,250 | – | – | 62.11 | 03/25/2025 | – | – | – | – | ||||||||||
6,336 | – | – | 63.79 | 03/23/2026 | – | – | – | – | ||||||||||
6,419 | – | – | 72.83 | 03/22/2027 | – | – | – | – | ||||||||||
4,049 | – | – | 44.78 | 03/28/2028 | – | – | – | – | ||||||||||
2,910 | 1,455 | – | 58.94 | 03/27/2029 | – | – | – | – | ||||||||||
4,974 | 9,948 | – | 21.60 | 03/25/2030 | – | – | – | – | ||||||||||
– | 9,895 | – | 53.61 | 03/24/2031 | – | – | – | – | ||||||||||
– | – | – | – | – | 1,273 | 56,559 | – | – | ||||||||||
– | – | – | – | – | 3,473 | 154,305 | – | – | ||||||||||
– | – | – | – | – | 3,716 | 165,102 | – | – | ||||||||||
– | – | – | – | – | 10,661 | 473,668 | – | – | ||||||||||
– | – | – | – | – | – | – | 17,987 | 799,162 | ||||||||||
– | – | – | – | – | – | – | 22,296 | 990,611 | ||||||||||
Martin | 17,442 | – | – | 55.02 | 06/13/2026 | – | – | – | – | |||||||||
14,442 | – | – | 72.83 | 03/22/2027 | – | – | – | – | ||||||||||
9,110 | – | – | 44.78 | 03/28/2028 | – | – | – | – | ||||||||||
7,759 | 3,880 | – | 58.94 | 03/27/2029 | – | – | – | – | ||||||||||
13,263 | 26,528 | – | 21.60 | 03/25/2030 | – | – | – | – | ||||||||||
– | 9,674 | – | 53.61 | 03/24/2031 | – | – | – | – | ||||||||||
– | – | – | – | – | 3,394 | 150,795 | – | – | ||||||||||
– | – | – | – | – | 3,554 | 157,904 | – | – | ||||||||||
– | – | – | – | – | 3,633 | 161,414 | – | – | ||||||||||
– | – | – | – | – | 9,260 | 411,422 | – | – | ||||||||||
– | – | – | – | – | – | – | 21,797 | 968,441 | ||||||||||
– | – | – | – | – | – | – | 22,050 | 979,682 |
Notes to Table on Outstanding Equity Awards at Fiscal Year-End
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EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
Option Awards | Stock Awards | |||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | |||||||||
Gray | 1,400 | – | – | 45.08 | 03/26/2024 | – | – | – | – | |||||||||
2,500 | – | – | 62.11 | 03/25/2025 | – | – | – | – | ||||||||||
6,336 | – | – | 63.79 | 03/23/2026 | – | – | – | – | ||||||||||
6,419 | – | – | 72.83 | 03/22/2027 | – | – | – | – | ||||||||||
25,606 | – | – | 34.75 | 10/02/2027 | – | – | – | – | ||||||||||
6,073 | – | – | 44.78 | 03/28/2028 | – | – | – | – | ||||||||||
2,910 | 1,455 | – | 58.94 | 03/27/2029 | – | – | – | – | ||||||||||
4,974 | 9,948 | – | 21.60 | 03/25/2030 | – | – | – | – | ||||||||||
– | 9,674 | – | 53.61 | 03/24/2031 | – | – | – | – | ||||||||||
– | – | – | – | – | 1,273 | 56,559 | – | – | ||||||||||
– | – | – | – | – | 3,473 | 154,305 | – | – | ||||||||||
– | – | – | – | – | 3,633 | 161,414 | – | – | ||||||||||
– | – | – | – | – | 5,331 | 236,856 | – | – | ||||||||||
– | – | – | – | – | – | – | 19,849 | 881,891 | ||||||||||
– | – | – | – | – | – | – | 21,797 | 968,441 | ||||||||||
Peters | 34,000 | – | – | 45.08 | 03/26/2024 | – | – | – | – | |||||||||
32,000 | – | – | 62.11 | 03/25/2025 | – | – | – | – | ||||||||||
28,510 | – | – | 63.79 | 03/23/2026 | – | – | – | – | ||||||||||
32,093 | – | – | 72.83 | 03/22/2027 | – | – | – | – | ||||||||||
20,243 | – | – | 44.78 | 03/28/2028 | – | – | – | – | ||||||||||
14,548 | – | – | 58.94 | 03/27/2029 | – | – | – | – | ||||||||||
33,159 | – | – | 21.60 | 03/25/2030 | – | – | – | – | ||||||||||
– | – | – | – | – | – | – | 21,817 | 969,329 | ||||||||||
Talwar | 18,166 | – | – | 67.07 | 09/23/2026 | – | – | – | – | |||||||||
19,256 | – | – | 72.83 | 03/22/2027 | – | – | – | – | ||||||||||
12,146 | – | – | 44.78 | 03/28/2028 | – | – | – | – | ||||||||||
9,698 | – | – | 58.94 | 03/27/2029 | – | – | – | – | ||||||||||
13,079 | – | – | 21.60 | 03/25/2030 | – | – | – | – |
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executive compensation
(1) | TheVesting Schedules for the options shown in columns (b) and (c) are as follows: |
Name | Total Securities Underlying Unexercised Options (#) | Grant Date | Vesting Date for ⅓ of Total Grant | Vesting Date for ⅓ of Total Grant | Vesting Date for ⅓ of Total Grant | ||
49,000 | 03/21/2012 | 03/21/2013 | 03/21/2014 | 03/21/2015 | |||
47,000 | 03/28/2013 | 03/28/2014 | 03/28/2015 | 03/28/2016 | |||
37,000 | 03/26/2014 | 03/26/2015 | 03/26/2016 | 03/26/2017 | |||
55,000 | 12/01/2014 | 12/01/2015 | 12/01/2016 | 12/01/2017 | |||
207,900 | 03/25/2015 | 03/25/2016 | 03/25/2017 | 03/25/2018 | |||
139,380 | 03/23/2016 | 03/23/2017 | 03/23/2018 | 03/23/2019 | |||
141,207 | 03/22/2017 | 03/22/2018 | 03/22/2019 | 03/22/2020 | |||
91,093 | 03/28/2018 | 03/28/2019 | 03/28/2020 | 03/28/2021 | |||
69,829 | 03/27/2019 | 03/27/2020 | 03/27/2021 | 03/27/2022 | |||
238,746 | 03/25/2020 | 03/25/2021 | 03/25/2022 | 03/25/2023 | |||
79,971 | 03/24/2021 | 03/24/2022 | 03/24/2023 | 03/24/2024 | |||
Bracken | 934 | 03/ | 03/ | 03/26/2016 | 03/26/2017 | ||
03/ | 03/ | 03/25/2017 | 03/25/2018 | ||||
6,336 | 03/23/2016 | 03/23/2017 | 03/23/2018 | 03/23/2019 | |||
6,419 | 03/22/2017 | 03/22/2018 | 03/22/2019 | 03/22/2020 | |||
4,049 | 03/28/2018 | 03/28/2019 | 03/28/2020 | 03/28/2021 | |||
4,365 | 03/27/2019 | 03/27/2020 | 03/27/2021 | 03/27/2022 | |||
14,922 | 03/25/2020 | 03/25/2021 | 03/25/2022 | 03/25/2023 | |||
9,895 | 03/24/2021 | 03/24/2022 | 03/24/2023 | 03/24/2024 | |||
48,170 | |||||||
Gray | 1,400 | 03/26/2014 | 03/26/2015 | 03/26/2016 | 03/26/2017 | ||
2,500 | 03/25/2015 | 03/25/2016 | 03/25/2017 | 03/25/2018 | |||
6,336 | 03/23/2016 | 03/23/2017 | 03/23/2018 | 03/23/2019 | |||
6,419 | 03/22/2017 | 03/22/2018 | 03/22/2019 | 03/22/2020 | |||
25,606 | 10/02/2017 | 10/02/2018 | 10/02/2019 | 10/02/2020 | |||
6,073 | 03/28/2018 | 03/28/2019 | 03/28/2020 | 03/28/2021 | |||
4,365 | 03/27/2019 | 03/27/2020 | 03/27/2021 | 03/27/2022 | |||
14,922 | 03/25/2020 | 03/25/2021 | 03/25/2022 | 03/25/2023 | |||
9,674 | 03/24/2021 | 03/24/2022 | 03/24/2023 | 03/24/2024 | |||
77,295 | |||||||
Martin | 17,442 | 06/13/2016 | 06/13/2017 | 06/13/2018 | 06/13/2019 | ||
14,442 | 03/22/2017 | 03/22/2018 | 03/22/2019 | 03/22/2020 | |||
9,110 | 03/28/2018 | 03/28/2019 | 03/28/2020 | 03/28/2021 | |||
11,639 | 03/27/2019 | 03/27/2020 | 03/27/2021 | 03/27/2022 | |||
39,791 | 03/25/2020 | 03/25/2021 | 03/25/2022 | 03/25/2023 | |||
9,674 | 03/24/2021 | 03/24/2022 | 03/24/2023 | 03/24/2024 | |||
102,098 |
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executive compensation
Name | Total Securities Underlying Unexercised Options (#) | Grant Date | Vesting Date for ⅓ of Total Grant | Vesting Date for ⅓ of Total Grant | Vesting Date for ⅓ of Total Grant |
Peters | 34,000 | 03/26/2014 | 03/26/2015 | 03/26/2016 | 03/26/2017 |
32,000 | 03/25/2015 | 03/25/2016 | 03/25/2017 | 03/25/2018 | |
28,510 | 03/23/2016 | 03/23/2017 | 03/23/2018 | 03/23/2019 | |
32,093 | 03/22/2017 | 03/22/2018 | 03/22/2019 | 03/22/2020 | |
20,243 | 03/28/2018 | 03/28/2019 | 03/28/2020 | 03/28/2021 | |
14,548 | 03/27/2019 | 03/27/2020 | 03/27/2021 | 03/27/2022 | |
33,159 | 03/25/2020 | 03/25/2021 | 03/25/2022 | * | |
03/22/2017 | 03/22/2018 | 03/22/2019 | 03/22/2020 | ||
12,146 | 03/28/2018 | 03/28/2019 | 03/28/2020 | 03/28/2021 | |
9,698 | 03/27/2019 | 03/27/2020 | 03/27/2021 | * | |
13,079 | 03/25/2020 | 03/25/2021 | * | * | |
* | Unvested portion of stock option award cancelled upon termination of employment. |
2022 Proxy Statement | ![]() 85 |
executive compensation
(2) | The vesting dates for the RSU awards shown in |
Name | Grant Date | Type of Award | Shares (#) | Vesting Date |
Johnson | 03/27/2019 | RSU | 20,360 | 03/27/2022 |
03/25/2020 | RSU | 55,556 | 03/25/2023 | |
11/17/2020 | PSU | 186,782 | 03/25/2023 | |
03/24/2021 | RSU | 30,032 | 03/24/2024 | |
03/24/2021 | PSU | 180,191 | 03/24/2024 | |
Page | 04/12/2021 | RSU | 4,185 | 04/12/2022 |
04/12/2021 | RSU | 4,186 | 04/12/2023 | |
04/12/2021 | RSU | 4,186 | 04/12/2024 | |
04/12/2021 | PSU | 7,460 | 03/25/2023 | |
04/12/2021 | PSU | 16,726 | 03/24/2024 | |
04/13/2021 | RSU | 3,168 | 04/13/2024 | |
Bracken | 03/27/2019 | RSU | 1,273 | 03/27/2022 |
03/25/2020 | RSU | 3,473 | 03/25/2023 | |
11/17/2020 | PSU | 17,987 | 03/25/2023 | |
03/24/2021 | RSU | 3,716 | 03/24/2024 | |
11/16/2021 | RSU | 10,661 | 11/16/2024 | |
03/24/2021 | PSU | 22,296 | 03/24/2024 | |
Martin | 03/27/2019 | RSU | 3,394 | 03/27/2022 |
03/25/2020 | RSU | 9,260 | 03/25/2023 | |
11/17/2020 | PSU | 22,050 | 03/25/2023 | |
03/24/2021 | RSU | 3,633 | 03/24/2024 | |
03/24/2021 | PSU | 21,797 | 03/24/2024 | |
11/16/2021 | RSU | 3,554 | 11/16/2024 | |
Gray | 03/27/2019 | RSU | 1,273 | 03/27/2022 |
03/25/2020 | RSU | 3,473 | 03/25/2023 | |
11/17/2020 | PSU | 19,849 | 03/25/2023 | |
03/24/2021 | RSU | 3,633 | 03/24/2024 | |
03/24/2021 | PSU | 21,797 | 03/24/2024 | |
11/16/2021 | RSU | 5,331 | 11/16/2024 | |
Peters | 11/17/2020 | PSU | 21,817 | 03/25/2023* |
* | Due to Ms. Peters’s retirement in 2021, she earned the pro rata portion of her PSU award for the 2020-21 performance period, as shown in the table, which will be paid to her at the same time as the payouts to the other NEOs in 2023. |
(3) | Values in columns (h) and (j) calculated by multiplying the number of unvested RSUs and PSUs, as applicable, by the closing price of $44.43 on January 28, 2022, which was the last business day of the 2021 fiscal year. The values shown in column (j) for the PSUs are based on: |
► | the number of PSUs at maximum performance for the 2020-21 long-term performance period, which will vest in March 2023; and |
► | the number of PSUs that may be earned at maximum performance for the 2021-22 long-term performance period, which, if earned, will vest in March 2024. |
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| Foot Locker, Inc. |
Executive Compensation
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Executive Compensation
Option Exercises and Stock Vested
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2021
The following table provides information on the stock options exercised by, and RSU awards vested for, the NEOs during 2018 and restricted stock and RSU awards that vested during the year:2021:
Options Awards | Stock Awards | Options Awards | Stock Awards | ||||||||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | |||
Number of Shares | Number of Shares | ||||||||||
Acquired on | Value Realized | Acquired on | Value Realized | ||||||||
Exercise | on Exercise | Vesting | on Vesting | ||||||||
Name | (#) | ($) | (#) | ($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||
L. Peters | 25,000 | 1,048,000 | — | ||||||||
P. Verma | — | 6,830 | 327,635 | ||||||||
Johnson | – | – | 25,123 | 1,405,632 | |||||||
Bracken | – | – | 1,934 | 106,295 | |||||||
Martin | – | – | 19,579 | 993,831 | |||||||
Gray | – | – | 2,492 | 131,515 | |||||||
Peters | 86,000 | (1) | 2,728,426 | 18,236 | 1,029,409 | ||||||
Talwar | 3,500 | 148,474 | 7,433 | 406,323 |
(1) | Represents shares acquired upon the exercise of stock options by Ms. Peters after her retirement in 2021. |
PENSION BENEFITS IN FISCAL 2021
The following table below provides the present value of the accumulated benefit payable to each of the NEOs and the years of service credited to each of them under the Retirement Plan, the Foot Locker Excess Cash Balance Plan, (the “Excess Plan”), and the SERP, as applicable, determined using interest rate and mortality rate assumptions consistent with those used in our 20182021 financial statements:statements.
(a) | (b) | (c) | (d) | (e) |
Number of Years | Present Value of | Payments During | ||
Credited Service | Accumulated Benefit | Last Fiscal Year | ||
Name | Plan Name | (#)(1) | ($)(1) | ($) |
R. Johnson | Retirement Plan | 20 | 211,688 | — |
Excess Plan | 20 | 787,763 | ||
SERP | 16 | 2,327,821 | ||
3,327,272 | ||||
L. Peters | Retirement Plan | 20 | 225,859 | — |
Excess Plan | 20 | 402,107 | ||
SERP | 17 | 1,448,356 | ||
2,076,322 | ||||
S. Jacobs | Retirement Plan | 19 | 194,499 | — |
Excess Plan | 19 | 404,670 | ||
SERP | 10 | 1,203,269 | ||
1,802,438 | ||||
L. Kimble | Retirement Plan | 39 | 778,509 | — |
Excess Plan | 39 | 851,214 | ||
SERP | 9 | 752,411 | ||
2,382,134 | ||||
P. Verma | Retirement Plan | 2 | 16,530 | — |
Excess Plan | 2 | 24,613 | ||
SERP | 4 | 219,638 | ||
260,781 |
(a) | (b) | (c) | (d) | (e) |
Name | Plan Name | Number of Years Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(1) | Payments During Last Fiscal Year ($) |
Johnson | Retirement Plan | 23 | 286,813 | – |
Excess Cash Plan | 23 | 1,416,715 | – | |
SERP | 19 | 4,063,958 | – | |
5,767,486 | – | |||
Bracken | Retirement Plan | 9 | 80,850 | – |
Excess Cash Plan | 9 | 57,121 | – | |
137,971 | – | |||
Martin | Retirement Plan | 4 | 17,857 | – |
Excess Cash Plan | 4 | 19,175 | – | |
SERP | 6 | 434,349 | – | |
471,381 | – |
Notes to Pension Benefits Table
2022 Proxy Statement | ![]() 87 |
executive compensation
(a) | (b) | (c) | (d) | (e) |
Name | Plan Name | Number of Years Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(1) | Payments During Last Fiscal Year ($) |
Gray | Retirement Plan | 3(2) | 62,420 | – |
Excess Cash Plan | 3(2) | 103,316 | – | |
165,736 | – | |||
Peters | Retirement Plan | 23 | 315,370 | – |
Excess Cash Plan | 23 | – | 532,023 | |
SERP | 19 | 1,505,384 | 375,637 | |
1,820,754 | 907,660 | |||
Talwar | Retirement Plan | 3 | 17,306 | – |
Excess Cash Plan | 3 | 20,177 | – | |
SERP | 5(3) | – | – | |
37,483 | – |
(1) | In general, the present value of accumulated benefits was determined using the same measurement date |
ASC 715 discount rate of |
Form of payment for the Retirement Plan and the Excess Cash Plan is a lump sum and form of payment for the SERP is 12 quarterly |
► | Ms. Peters’s SERP amount, and Mr. Talwar’s Retirement Plan, Excess Cash Plan, and SERP amounts, reflect no credited service for fiscal year 2021. |
(2) | While Mr. Gray has participated in the Retirement Plan and the Excess Cash Plan for 3 years, his crediting rate was based on his 19 years of service in accordance with the plan. |
(3) | The total benefit payable to Mr. Talwar under the SERP was forfeited when his employment was terminated. |
The years of service for the SERP reflect the number of years that the executiveNEO has been approved by the CompensationHuman Capital Committee as a participant in that plan.
DEFINED BENEFIT RETIREMENT PLANS
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Executive Compensation
Defined Benefit Retirement Plans
Foot Locker Retirement Plan
The Retirement Plan is a defined benefit plan with a cash balance formula wherein each participant has an account for record keeping purposes only, which covers eligible employeesteam members of the Company and substantially all of its U.S. subsidiaries. All qualified employeessubsidiaries who arewere at least 21 years old with one year of service are covered underbefore the Retirement Plan. Plan was frozen on December 31, 2019. The Retirement Plan takes into account only base salary and Annual Incentive Plan awards in determining pension benefits. Therefore, LTI Awards have no effect on the calculation of benefits or payments under this plan.
Plan participants become fully vested in their benefits under this plan generally upon completion of three years of service or upon reaching normal retirement age (age 65) while actively employed.
UnderThe Retirement Plan was frozen as of December 31, 2019, for new participants (including rehires), and for benefit accruals for participants with fewer than 11 years of benefit service.
Participants with 11 or more years of benefit service as of December 31, 2019 will continue to earn credits annually for a three-year transition period ending December 31, 2022 under the cash balance formula each participant has an account, for record keeping purposes only, to which credits are allocated annually based upon a percentage of the participant’s W-2 Compensation, as defined in the Retirement Plan. After this three-year transition period, compensation credits will no longer accrue. This percentage is determined bybased on the participant’s years of service with the Company as of the beginning of each calendar year. The following table shows the percentages of employees’ compensation used to determine credits for each of the years of service indicated:
Years of Service | Percent of All W-2 Compensation (%) | + | Percent of W-2 Compensation Over $22,000 (%) |
< 6 | 1.10 | 0.55 | |
6-10 | 1.50 | 0.75 | |
11-15 | 2.00 | 1.00 | |
16-20 | 2.70 | 1.35 | |
21-25 | 3.70 | 1.85 | |
26-30 | 4.90 | 2.45 | |
31-35 | 6.60 | 3.30 | |
> 35 | 8.90 | 4.45 |
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executive compensation
Years of Service | Percent of All W-2 Compensation (%) | + | Percent of W-2 Compensation Over $22,000 (%) |
< 6 | 1.10 | 0.55 | |
6–10 | 1.50 | 0.75 | |
11–15 | 2.00 | 1.00 | |
16–20 | 2.70 | 1.35 | |
21–25 | 3.70 | 1.85 | |
26–30 | 4.90 | 2.45 | |
31–35 | 6.60 | 3.30 | |
> 35 | 8.90 | 4.45 |
In addition, allAll existing balances in the participants’ accounts as of December 31, 2019 earn interest at the fixed rate of 6%, which is credited annually.
At retirement or other termination of employment, an amount equal to the vested balance then credited to the account under the Retirement Plan is payable to the participant in the form of a qualified joint and survivor annuity (if the participant is married)(available to married participants) or a life annuity (if the participant is unmarried).annuity. The participant may elect, upon retirement, to waive the annuity form of benefit and receive benefits under the plan upon retirement in an optional annuity form or an immediate or deferred lump sum, or, upon other termination of employment, in a lump sum. Additional optional forms of payment are available to participants who were participating in the Retirement Plan as of December 31, 1995.
Foot Locker Excess Cash Balance PlanAll U.S.-based team members and expatriate U.S. team members who met the eligibility requirements prior to the plan being frozen on December 31, 2019, including Messrs. Johnson, Bracken, Martin, and Gray, are participants in the Retirement Plan. Ms. Peters and Mr. Talwar were active participants prior to their termination of employment.
EXCESS CASH PLAN
The IRC limits annual retirement benefits that may be paid to, and the compensation that may be taken into account in calculating benefits for, any person covered under a qualified retirement plan, such as the Retirement Plan. Accordingly, the Company has adopted the Excess Cash Plan for any person covered by the Retirement Plan whose annual retirement benefit, calculated in accordance with the terms of the Retirement Plan, exceeds the limitations of the IRC, the Company has adopted theIRC. The Excess Plan. The ExcessCash Plan is an unfunded, non-qualified benefit plan, under which the individual is paid the difference between the IRC limitations and the retirement benefit to which he or shethey would otherwise be entitled under the Retirement Plan. The Excess Cash Plan takes into account only base salary and Annual Incentive Plan awards in determining pension benefits. Therefore, LTI Awards have no effect on the calculation of benefits or payments under this plan.
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Executive CompensationThe Excess Cash Plan was frozen as of December 31, 2019 for new participants (including rehires), and for benefit accruals for participants with fewer than 11 years of benefit service.
EarlyParticipants with 11 or more years of benefit service as of December 31, 2019 will continue to earn credits annually for a three-year transition period ending December 31, 2022 under the cash balance formula based upon a percentage of the participant’s W-2 Compensation, as defined in the Retirement EligibilityPlan. After this three-year transition period, compensation credits will no longer accrue. This percentage is determined based on the participant’s years of service with the Company as of the beginning of each calendar year. The table above shows the percentages used to determine credits for each of the years of service in the Excess Cash Plan.
EARLY RETIREMENT ELIGIBILITY
The Retirement Plan provides for a reduced benefit payment to a participant who retires after reaching early retirement age but prior to normal retirement age. Early retirement age is defined under the Retirement Plan and the Excess Cash Plan as age 55 with at least 5 years of vesting service. All ofMr. Johnson is the NEOs other than Mr. Verma areonly NEO currently eligible for early retirement under these plans. Ms. Peters was eligible for early retirement under these plans and elected early retirement in 2021.
Foot Locker Supplemental Executive Retirement Plan
2022 Proxy Statement | ![]() 89 |
executive compensation
In addition,SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company maintains a SERP for certain senior officers of the Company and other key employees who met the eligibility requirements prior to the plan being frozen for new participants (including rehires) after December 31, 2018. The SERP which is an unfunded and non-qualified benefit plan that provides for payment by the Company of supplemental retirement, death, and disability benefits to certain executive officersbenefits. Messrs. Johnson and certainMartin, as well as five other key employees of the Company and its subsidiaries who participate in this plan. The Compensation Committee sets an annual targeted incentive award under the SERP for each participant consisting of a percentage of salary and bonus based on the Company’s performance against the target. Achievement of the target causes an 8% credit to a participant’s account for that year. The applicable percentage for the year increases or decreases proportionately to the percentage of the Company’s performance in relation to the target, but may not be less than 4% or more than 12% in any year. Participants’ accounts accrue simple interest at the rate of 6% annually.
The NEOs and six other executive officers currentlycurrent executives, participate in the SERP. Participants in the SERP prior to May 26, 2011 are eligible to receive a benefit only if their age plus years of service at retirement equals at least 65. For persons who become participants in the SERP on or after this date, they would be eligible to receive a benefit only if they are at least age 55 at retirement with 10 years of service. Other than Mr. Verma, each of the NEOs participated in the SERP on May 26, 2011 and has age plus years of service totaling at least 65. Mr. Verma became a participant in the SERP upon his employment commencement date in August 2015 and he is not currently vested in the plan.
If a participant’s employment terminates due to death or disability, the participant (or the participant’s estate) would be entitled to payment of the participant’s SERP balance. A participant’s SERP benefit is paid in 12 quarterly installments following retirement, with the first two quarters payable no earlier than six months following retirement. Upon death or disability, a participant’s SERP benefit is paid in a lump sum. For participants in the plan prior to February 2, 2014, the SERP provides for the continuation of medical and dental insurance benefits if an executive meets the applicable age and service requirements when the participants’participant’s employment terminates. The benefits would be substantially the same as those benefits to which senior executives are entitled under the Company’s medical and dental plans for active employees.team members. The terminated executive would be required to pay the insurance premium applicable to actively employedactively-employed senior executives, including any increases in the premiums, and the Company would pay the difference between the actual premium rate and the active employeeteam member rate.
Participants in the SERP prior to May 26, 2011, including Mr. Johnson, are eligible to receive a benefit only if their age plus years of service at retirement equals at least 65. For persons who became participants in the SERP on or after this date, including Mr. Martin, they are eligible to receive a benefit only if they are at least age 55 at retirement with 10 years of service. The SERP was frozen for new participants (including rehires) after December 31, 2018, and for new benefit awards for plan years after December 31, 2022 (however, interest credit for participants continues to accrue). Under the terms of the SERP, executives are vested in their account balances based upon a combination of age and service. As of the end of 2021, of the NEOs, only Mr. Johnson was vested under the SERP. Ms. Peters was vested at the time of the termination of her employment.
The Human Capital Committee sets an annual targeted incentive award under the SERP for each participant consisting of a percentage of salary and Annual Incentive Plan awards (if paid) based on the Company’s performance against the target; therefore, LTI Awards have no effect on the calculation of benefits or payments under this plan. Achievement of the target causes a credit equal to 8% of covered compensation to a participant’s account for that year. The applicable percentage for the year increases or decreases proportionately to the percentage of the Company’s performance in relation to the target, but may not be less than 4% or more than 12% in any year. Participants’ accounts accrue simple interest at the rate of 6% annually. Based upon the Company’s performance in 2021, a credit of 11.3% of each participant’s respective 2021 base salary was made to the SERP. As of the end of 2021, Mr. Johnson and Mr. Martin’s account balances were $4,214,478 and $436,414, respectively.
The Company has a 401(k) Plan that is available to team members whose primary place of employment is in the United States, as well as expatriate U.S. team members. Eligible team members may contribute to the 401(k) Plan following 28 days of employment and are eligible for Company matching contributions upon completion of one year of service consisting of at least 1,000 hours. Messrs. Johnson, Bracken, Martin, and Gray participate in the 401(k) Plan and the Excess Savings Plan. As of January 1, 2021, the 401(k) Plan allows eligible team members to contribute up to 40% of their compensation on a pre-tax basis, subject to a maximum of $19,500 (which was increased to $20,500 effective January 1, 2022). The Company matches 100% of employees’ pre-tax contributions on up to the first 1% of the employees’ compensation (subject to certain IRC limitations), and 50% of the next 5%, subject to a maximum match of 3.5% if the participant contributes at least 6% to the plan. The matching contribution is made in cash and vests over two years. See Note 7 to the Summary Compensation Table beginning on page 70 for the amount of the Company’s match under the 401(k) and Excess Savings Plans to the NEOs’ accounts.
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Executive Compensationexecutive compensation
Potential Payments Upon TerminationNONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2021
The table below provides the amount of contributions and earnings during the last fiscal year to each of the NEOs under the Excess Savings Plan, as well as aggregate withdrawals and distributions and aggregate year-end balances.
(a) | (b) | (c) | (d) | (e) | (f) |
Name | Executive Contributions During Last Fiscal Year ($) | Registrant Contributions During Last Fiscal Year ($)(1) | Aggregate Earnings During Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) |
Bracken | – | 32,325 | 257 | – | 44,466 |
Martin | – | 30,428 | 319 | – | 46,653 |
Talwar | – | – | 185 | – | 11,458 |
(1) | The amounts shown in column (c) are reported as compensation for the officers in fiscal year 2021 in the “All Other Compensation” column of the Summary Compensation Table. |
(2) | The amounts shown in column (d) are not reported in the Summary Compensation Table because the earnings are not preferential. |
EXCESS SAVINGS PLAN
Participants in our 401(k) Plan for whom contributions are limited by Section 401(a)(17) of the IRC participate in the Excess Savings Plan, which is an unfunded, non-qualified benefit plan. See Note 7 to the Summary Compensation Table beginning on page 70 for the amount of the Company’s match under the 401(k) and Excess Savings Plans to the NEOs’ accounts. The Excess Savings Plan does not permit employees to elect to defer any compensation, but instead solely provides for the crediting of Company matching contributions. In fiscal year 2021, we made a matching contribution to each participant’s bookkeeping account under the Excess Savings Plan at the same rate of contribution as our 401(k) Plan. Company matching contributions vest to the same extent that the participant’s employer matching contributions vest under the 401(k) Plan. Each participant’s account is credited with simple interest per annum at a rate of 120% of the annually compounded long-term applicable federal rate as reported as of December of the prior year. Following a termination of employment, distributions of a participant’s vested account balance will be made in a lump sum on the first payroll date of the month that occurs thirty days after the termination date (or such later date as may be required by Section 409A of the IRC, or Change in Controlthe event of death, no later than December 31 of the year following the year in which the participant’s death occurs).
2022 Proxy Statement | ![]() 91 |
EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The NEOs’ employment agreements and certain of the plans and programs that the NEOs participate in require the Company to pay compensation to the NEOs if their employment terminates under certain circumstances. Estimates of the compensation, benefits, and vesting of equity grants that may be payable to the NEOs upon termination of employment or change in control, including amounts already vested, are included in the tables below. These estimates reflect that no LTIP payouts were earnedExcept for Mr. Talwar and Ms. Peters, the 2016-17 or 2017-18 performance measurement periods. The information in the tables assumes a termination date of February 2, 2019. AtJanuary 29, 2022, using the close of trading on February 2, 2019, ourclosing stock price was $55.06on January 28, 2022 of $44.43 per share. For Mr. Talwar, and Ms. Peters the information in the tables reflect his termination date of December 16, 2021, and her retirement date of May 1, 2021, respectively, and reports actual amounts.
Payments | |||||||||||||||||||||||||||||
Time-Based RSUs, | Excess Cash | ||||||||||||||||||||||||||||
PBRSUs, and | Balance | Health | Life | ||||||||||||||||||||||||||
Severance | Options | SERP | Plan | Benefits | Insurance | Total | |||||||||||||||||||||||
Termination Event | ($) | ($) | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($) | Severance ($) | RSUs, PSUs, and Stock Options ($) | SERP ($)(1) | Excess Cash Balance Plan ($)(2) | Excess Saving Plan ($)(3) | Health Benefits ($)(4) | Life Insurance ($)(5) | |||||||||||||||
R. Johnson | |||||||||||||||||||||||||||||
Johnson | |||||||||||||||||||||||||||||
By Company w/o Cause | 4,084,000 | (5) | 4,625,125 | (6) | 2,449,041 | 726,666 | 721,705 | — | 12,606,537 | 6,476,900 | (6) | 13,933,921 | (7) | 351,207 | 1,375,698 | – | 649,715 | – | |||||||||||
By Executive For Good Reason | 4,084,000 | (5) | 4,625,125 | (6) | 2,449,041 | 726,666 | 721,705 | — | 12,606,537 | 6,476,900 | (6) | 13,933,921 | (7) | 351,207 | 1,375,698 | – | 649,715 | – | |||||||||||
Resignation | — | — | 2,449,041 | 726,666 | 721,705 | — | 3,897,412 | – | – | 351,207 | 1,375,698 | – | 649,715 | – | |||||||||||||||
Change in Control(7) | 6,625,000 | (8) | 6,008,398 | (9) | 2,449,041 | 726,666 | 721,705 | — | 16,530,810 | ||||||||||||||||||||
Change in Control(8) | 6,907,000 | (9) | 18,641,191 | (10) | 351,207 | 1,375,698 | – | 649,715 | – | ||||||||||||||||||||
Disability | — | 5,384,104 | (10) | 2,449,041 | 726,666 | 721,705 | — | 9,281,516 | – | 16,824,334 | (11) | 4,214,478 | 1,375,698 | – | 649,715 | – | |||||||||||||
Death | — | 5,384,104 | (10) | 2,449,041 | 726,666 | — | 1,100,000 | 9,659,811 | – | 16,824,334 | (11) | 4,214,478 | 1,375,698 | – | 1,150,000 | ||||||||||||||
Retirement | — | 2,002,814 | (11) | 2,449,041 | 726,666 | 721,705 | — | 5,900,226 | – | 14,879,144 | (12) | 351,207 | 1,375,698 | – | 649,715 | – | |||||||||||||
Cause | — | — | — | 726,666 | — | — | 726,666 | – | – | – | 1,375,698 | – | |||||||||||||||||
L. Peters | |||||||||||||||||||||||||||||
Page | |||||||||||||||||||||||||||||
By Company w/o Cause | 922,500 | (13) | – | – | |||||||||||||||||||||||||
By Executive for Good Reason | 922,500 | (13) | – | – | |||||||||||||||||||||||||
Change in Control(8) | 2,152,500 | (9) | 1,215,894 | (10) | – | ||||||||||||||||||||||||
Disability | – | 1,215,894 | (11) | – | |||||||||||||||||||||||||
Death | – | 1,215,894 | (11) | – | 615,000 | ||||||||||||||||||||||||
Retirement | – | 703,882 | (12) | – | |||||||||||||||||||||||||
Bracken | |||||||||||||||||||||||||||||
By Company w/o Cause | 1,012,500 | (12) | — | 1,523,777 | 345,211 | 874,219 | — | 3,755,707 | 1,200,000 | (13) | – | – | 34,515 | 44,466 | – | ||||||||||||||
By Executive for Good Reason | 1,012,500 | (12) | 69,359 | (13) | 1,523,777 | 345,211 | 874,219 | — | 3,825,066 | 1,200,000 | (13) | 113,556 | (14) | – | 34,515 | 44,466 | – | ||||||||||||
Resignation | — | — | 1,523,777 | 345,211 | 874,219 | — | 2,743,207 | – | – | – | 34,515 | 44,466 | – | ||||||||||||||||
Change in Control(7) | 1,856,250 | (8) | 2,565,768 | (9) | 1,523,777 | 345,211 | 874,219 | — | 7,165,225 | ||||||||||||||||||||
Change in Control(8) | 3,200,000 | (9) | 2,123,563 | (10) | – | 34,515 | 44,466 | – | |||||||||||||||||||||
Disability | – | 2,010,007 | (11) | – | 34,515 | 44,466 | – | ||||||||||||||||||||||
Death | – | 2,010,007 | (11) | – | 34,515 | 44,466 | – | 800,000 | |||||||||||||||||||||
Retirement | – | 1,388,742 | (12) | – | 34,515 | 44,466 | – | ||||||||||||||||||||||
Martin | |||||||||||||||||||||||||||||
By Company w/o Cause | 922,500 | (13) | – | – | 13,857 | 46,653 | – | ||||||||||||||||||||||
By Executive for Good Reason | 922,500 | (13) | 302,817 | (14) | – | 13,857 | 46,653 | – | |||||||||||||||||||||
Resignation | – | – | 13,857 | 46,653 | – | ||||||||||||||||||||||||
Change in Control(8) | 2,152,500 | (9) | 2,708,973 | (10) | – | 13,857 | 46,653 | – | |||||||||||||||||||||
Disability | — | 2,427,029 | (10) | 1,523,777 | 345,211 | 874,219 | — | 5,170,236 | – | 2,406,156 | (11) | 436,414 | 13,857 | 46,653 | – | ||||||||||||||
Death | — | 2,427,029 | (10) | 1,523,777 | 345,211 | — | 675,000 | 4,971,017 | – | 2,406,156 | (11) | 436,414 | 13,857 | 46,653 | – | 615,000 | |||||||||||||
Retirement | — | 484,346 | (11) | 1,523,777 | 345,211 | 874,219 | — | 3,227,553 | – | 1,978,472 | (12) | – | 13,857 | 46,653 | – | ||||||||||||||
Cause | — | — | — | 345,211 | — | — | 345,211 | – | – | – | 13,857 | 46,653 | – | ||||||||||||||||
S. Jacobs | |||||||||||||||||||||||||||||
By Company w/o Cause | 1,275,000 | (12) | — | 1,265,928 | 335,514 | 1,038,844 | — | 3,915,286 | |||||||||||||||||||||
By Executive for Good Reason | 1,275,000 | (12) | 69,359 | (13) | 1,265,928 | 335,514 | 1,038,844 | — | 3,984,645 | ||||||||||||||||||||
Resignation | — | — | 1,265,928 | 335,514 | 1,038,844 | — | 2,640,286 | ||||||||||||||||||||||
Change in Control(7) | 2,337,500 | (8) | 3,231,938 | (9) | 1,265,928 | 335,514 | 1,038,844 | — | 8,209,724 | ||||||||||||||||||||
Disability | — | 3,093,199 | (10) | 1,265,928 | 335,514 | 1,038,844 | — | 5,733,485 | |||||||||||||||||||||
Death | — | 3,093,199 | (10) | 1,265,928 | 335,514 | — | 850,000 | 5,544,641 | |||||||||||||||||||||
Retirement | — | 591,934 | (11) | 1,265,928 | 335,514 | 1,038,844 | 3,232,220 | ||||||||||||||||||||||
Cause | — | — | — | 335,514 | — | — | 335,514 | ||||||||||||||||||||||
L. Kimble(14) | |||||||||||||||||||||||||||||
By Company w/o Cause | 975,000 | (12) | — | 791,591 | 782,368 | 721,705 | — | 3,270,664 | |||||||||||||||||||||
By Executive for Good Reason | 975,000 | (12) | 62,430 | (13) | 791,591 | 782,368 | 721,705 | — | 3,333,094 | ||||||||||||||||||||
Resignation | — | — | 791,591 | 782,368 | 721,705 | — | 2,295,664 | ||||||||||||||||||||||
Change in Control(7) | 1,787,500 | (8) | 2,226,356 | (9) | 791,591 | 782,368 | 721,705 | — | 6,309,520 | ||||||||||||||||||||
Disability | — | 2,101,495 | (10) | 791,591 | 782,368 | 721,705 | — | 4,397,159 | |||||||||||||||||||||
Death | — | 2,101,495 | (10) | 791,591 | 782,368 | — | 650,000 | 4,325,454 | |||||||||||||||||||||
Retirement | — | 362,150 | (11) | 791,591 | 782,368 | 721,705 | — | 2,657,814 | |||||||||||||||||||||
Cause | — | — | — | 782,368 | — | — | 782,368 | ||||||||||||||||||||||
P. Verma | |||||||||||||||||||||||||||||
By Company w/o Cause | 825,000 | (12) | — | 178,053 | 15,427 | — | — | 1,018,480 | |||||||||||||||||||||
By Executive for Good Reason | 825,000 | (12) | 41,613 | (13) | 178,053 | 15,427 | — | — | 1,060,093 | ||||||||||||||||||||
Resignation | — | — | 178,053 | 15,427 | — | — | 193,480 | ||||||||||||||||||||||
Change in Control(7) | 1,512,500 | (8) | 3,381,770 | (9) | 178,053 | 15,427 | — | — | 5,087,750 | ||||||||||||||||||||
Disability | — | 3,298,523 | (10) | 178,053 | 15,427 | — | — | 3,492,003 | |||||||||||||||||||||
Death | — | 3,298,523 | (10) | 178,053 | 15,427 | — | 550,000 | 4,042,003 | |||||||||||||||||||||
Cause | — | — | — | 15,427 | — | — | 15,427 |
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Executive CompensationEXECUTIVE COMPENSATION
Termination Event | Severance ($) | RSUs, PSUs, and Stock Options ($) | SERP ($)(1) | Excess Cash Balance Plan ($)(2) | Excess Saving Plan ($)(3) | Health Benefits ($)(4) | Life Insurance ($)(5) | ||
Gray | |||||||||
By Company w/o Cause | 922,500 | (13) | – | – | 53,994 | – | – | – | |
By Executive for Good Reason | 922,500 | (13) | 113,556 | (14) | – | 53,994 | – | – | – |
Resignation | – | – | – | 53,994 | – | – | – | ||
Change in Control(8) | 2,152,500 | (9) | 1,960,260 | (10) | – | 53,994 | – | – | – |
Disability | – | 1,846,704 | (11) | – | 53,994 | – | – | – | |
Death | – | 1,846,704 | (11) | – | 53,994 | – | – | 615,000 | |
Retirement | – | 1,448,656 | (12) | – | 53,994 | – | – | – | |
Cause | – | – | – | 53,994 | – | – | – | ||
Talwar(15) | |||||||||
Actual Payments | 1,000,058 | (16) | – | – | 20,449 | 11,564 | – | – | |
Peters | |||||||||
Actual Payments | – | 2,014,433 | (17) | 1,556,210 | – | – | 972,700 | – |
(1) | This amount is the total benefit payable under the SERP (other than health benefits reported in the “Health Benefits” column). Upon termination other than due to disability or death, the payments would be made quarterly over a three-year period with the first two quarterly payments made on the first day of the calendar quarter that occurs six months following the |
(2) | Benefit payable as of |
(3) | Benefit payable as of January 29, 2022 in a lump sum under the Excess Savings Plan on the first payroll date of the month that occurs thirty days after the termination date (or such later date as may be required by Section 409A of the IRC), or in the event of death, no later than December 31 of the year following the year in which the participant’s death occurs. No information is provided with respect to the benefit under the 401(k) Plan because that plan is available generally to all salaried team members and does not discriminate in terms of scope, terms, or operation in favor of the executive officers. |
The amount shown represents the actuarial present value of all future expected post-termination medical and dental insurance benefits under the SERP and the employment agreements. The benefits provided, and premiums (including any subsequent increases) required to be paid by the |
Senior executive life insurance is payable following death in a lump sum to the |
This severance amount includes the following items provided for under Mr. Johnson’s employment agreement: |
Salary continuation for 24 months.Payment of the first twelve months of salary continuation would be made in a lump sum within 10 days following the six-month anniversary of termination, and the remaining payments would then be made on a monthly basis beginning on the twelve-month anniversary of termination ($2,200,000)2,300,000).
Annual Bonus for Year of Termination.For the fiscal year in which termination occurs, payment of the annual bonusAnnual Incentive Plan payouts that would have otherwise been earned if such termination had not occurred, pro ratedprorated as of the Termination Date, to be paid at the same time as other annual bonuses for the fiscal year in which the termination occurs ($1,859,000)4,169,900).
Outplacement.The approximate cost of one year of outplacement services ($25,000)7,000).
Pro Rata Payment of any Unearned |
Payment of any Earned and Unvested LTIP AwardPSUs and Vesting of Stock Options.Pursuant to Mr. Johnson’s employment agreement, with respect to any completed performance period during which termination occurs, payment of any LTIPPSU award that is earned and unvested as of the termination date. The amount shown includes the (A) PSUs based on the (i) prorated actual level achievement of the performance goals for the 2020-21 performance measurement period (186,782 PSUs), and (ii) actual level achievement of the performance goals for the 2019-20 performance measurement period (0 PSUs), and (B) intrinsic value on February 2, 2019January 29, 2022 of 231,691262,412 stock options that would vest.
This covers termination by the Company without Cause or by the |
The severance amount equals two times the sum of the |
LTIP | AFG | |||
Time-Based RSUs | PBRSUs | PBRSUs | Stock Options | |
(#) | (#) | (#) | (#) | |
R. Johnson | 25,123 | 30,706 | 36,288 | 231,691 |
L. Peters | 29,839 | 7,537 | 5,444 | 51,143 |
S. Jacobs | 37,263 | 9,491 | 8,165 | 51,143 |
L. Kimble | 26,146 | 5,444 | 5,444 | 46,979 |
P. Verma | 50,463 | 4,606 | 4,083 | 26,526 |
(10) | The amount shown represents the sum of the (A) value of the |
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Executive CompensationEXECUTIVE COMPENSATION
the stock options that would vest. The PBRSUs would be paid out at the same time as the payouts are made to the other participants in the plan for this performance period in 2021. The time-based RSUs and PBRSUs were valued at $55.06. The actual value of the time-based RSUs to the executive would depend upon the Company’s stock price on the payout date in 2021.
LTIP | AFG | |||
Time-Based RSUs | PBRSUs | PBRSUs | Stock Options | |
(#) | (#) | (#) | (#) | |
R. Johnson | 25,123 | 30,706 | 36,288 | 123,893 |
L. Peters | 29,839 | 7,537 | 5,444 | 26,947 |
S. Jacobs | 37,263 | 9,491 | 8,165 | 26,947 |
L. Kimble | 26,146 | 5,444 | 5,444 | 25,204 |
P. Verma | 50,463 | 4,606 | 4,083 | 13,614 |
RSUs (#) | PSUs (#) | Stock Options (#) | |
Johnson | 105,948 | 231,830 | 262,412 |
Page | 15,725 | 11,642 | 8,333 |
Bracken | 19,123 | 23,561 | 21,298 |
Martin | 19,841 | 27,500 | 40,082 |
Gray | 13,710 | 25,299 | 21,077 |
(11) | The amount shown represents the sum of the (A) value of the |
LTIP | ||
PBRSUs | Stock Options | |
(#) | (#) | |
R. Johnson | 30,706 | 123,893 |
L. Peters | 7,537 | 26,947 |
S. Jacobs | 9,491 | 26,947 |
L. Kimble | 5,444 | 25,204 |
P. Verma | 4,606 | 13,614 |
RSUs (#) | PSUs (#) | Stock Options (#) | |
Johnson | 105,948 | 231,830 | 129,516 |
Page | 15,725 | 11,642 | 2,777 |
Bracken | 19,123 | 23,561 | 9,727 |
Martin | 19,841 | 27,500 | 20,368 |
Gray | 13,710 | 25,299 | 9,653 |
(12) | The amount shown represents the sum of the (A) value of the RSUs, some or all of which may be accelerated by the Human Capital Committee, prorated based on days employed between the grant date and termination date, (B) value of the PSUs that the NEO would have been entitled to receive based on the (i) target level achievement of the performance goals for the 2021-22 performance period, prorated to the termination date, (ii) actual level achievement of the performance goals for the 2020-21 performance measurement period, and (iii) actual level achievement of the performance goals for the 2019-20 performance measurement period, and (C) intrinsic value on January 29, 2022 of the stock options that would vest. The PSUs would be paid out at the same time as the payouts are made to the other participants in the plan. The PSUs were valued at $44.43 per share. The actual value of the PSUs to the NEO would depend upon the Company’s stock price on the payout date. |
RSUs (#) | PSUs (#) | Stock Options (#) | |
Johnson | 62,167 | 231,830 | 129,516 |
Page | 4,201 | 11,642 | 2,777 |
Bracken | 5,140 | 23,561 | 9,727 |
Martin | 10,215 | 27,500 | 20,368 |
Gray | 4,751 | 25,299 | 9,653 |
(13) | The severance amount equals one-and-a-half times the |
The amount shown represents the intrinsic value on |
Stock Options | |
(#) | |
Mr. |
(16) | This severance amount consists of the following items provided for under Mr. Talwar’s separation agreement, which reflect required payments owed under Mr. Talwar’s employment agreement on a termination without cause, which the Human Capital Committee determined was appropriate based on the circumstances of Mr. Talwar’s departure: |
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EXECUTIVE COMPENSATION
One-and-a-half times Mr. Talwar’s annual salary. Severance payment under Mr. Talwar’s employment agreement will be processed six months after his termination date of December 16, 2021.
Vacation Payout. During the pay period following his termination date, Mr. Talwar was paid the dollar amount equivalent of his unused vacation accrued up until his termination date.
(17) | In accordance with the treatment of Ms. Peters’s departure as a retirement, the amount shown includes the sum of the (A) value of the accelerated RSUs (7,209), (B) PSUs based on the actual level achievement of the performance goals for the 2020-21 performance measurement period (21,817 PSUs), and (C) intrinsic value on April 30, 2021 of 21,429 stock options that were vested. The RSUs and PSUs were valued using the closing stock price on April 30, 2021 ($58.98 per share). |
PAY RATIO
The following information is a reasonable good faith estimate calculated in a manner consistent with the SEC pay ratio rules and methods for disclosure. The SEC rules do not specify a single methodology for identification of the median employeeteam member or calculation of the CEO pay ratio, and other companies may use different assumptions, adjustments, exclusions, or estimates in calculating their CEO pay ratio. Accordingly, CEO pay ratio disclosures may involve a degree of imprecision and may be inconsistent in methodology among different companies. Therefore, the CEO pay ratio disclosed by other companies may not be comparable to the Company’s CEO pay ratio as disclosed below. Using the methodology described below, our CEO pay ratio based on fiscal year 20182021 compensation is approximately 1,627:1,191:1.
To calculate our CEO pay ratio,It is no longer appropriate for us to use the median team member we used the same median employee identified as of December 31, 2017. We2020 for purposes of this year’s Proxy Statement because of a change in the original median team member’s circumstances that we reasonably believe there have been no changes in our employee population or our compensation arrangements in 2018 that would result in a significant change in our pay ratio disclosure ordisclosure. Accordingly, we have identified another team member utilizing the same compensation measure used to select the original median team member. We identified our median employee.team member and calculated our CEO pay ratio as follows:
► | We identified the median team member using our team member population as of the final day of our payroll year, December 31, 2021. |
► | We utilized a CACM across our global team member population to calculate the median team member compensation. For our CACM, we used base salary derived from our payroll records. Our team members receive a base salary, calculated on an hourly, weekly, monthly, or annual basis. As a result, base salary provides an accurate depiction of earnings for the purpose of identifying our median team member. Because we do not widely offer Annual Incentive Plan awards or LTI awards to our team members, such awards were excluded from our CACM. Given our workforce and the high turnover rates inherent in the retail industry, our methodology included annualizing the compensation for all permanent team members (full-time and part-time) who did not work a full calendar year to properly reflect their compensation levels. For non-salaried team members, references to “base salary” refer to the product of their hourly wage rate, including commissions, as applicable, and the average weekly hours they worked. We did not perform any full-time equivalency adjustments or annualize the compensation for temporary or seasonal positions. We did not make any other assumptions, adjustments, exclusions, or estimates with respect to base salary. We also did not make any cost-of-living adjustments or use any statistical sampling. |
► | After identifying the median team member, we calculated this team member’s annual total compensation in the same manner as the CEO’s compensation, which is described in the Summary Compensation Table beginning on page 70. |
We are a global retailer and approximately 70%67% of our employeesteam members are part-time employees.team members. Our median employeeteam member is a part-time sales associate who worked an average of 1617 hours per week in one of our stores in Hawaii,Fresno, California, and whose annual compensation was $8,241$12,135 in fiscal year 2018.2021. Our Chief Executive Officer’sCEO’s compensation during the same time period was $13,411,422, including $9,446 for a health care benefit under a plan that is available generally to all salaried employees, which is not required to be reported as compensation for our Chief Executive Officer in the Summary Compensation Table, as disclosed on pages 52 through 54, under the SEC rules. See pages 20 through 24 for additional employee data.$14,458,325.
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The following table provides informationManagement and the Board understand that how we achieve our purpose is just as important as the results. Stakeholders understandably want to know that the company they are buying from, investing in, working for, or doing business with, is acting responsibly by valuing their team members, giving back to the communities they serve, and actively addressing the environmental impact of February 2, 2019 for compensation plans under which equity securities may be issued:their operations. For these reasons, ESG is embedded in how we manage our business.
(a) | (b) | (c) | |||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) | Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) (#) | ||||
Equity Compensation Plans Approved | 2,861,447 | 52.34 | 11,237,742 | (1)(2) | |||
by Security Holders | |||||||
Equity Compensation Plans Not Approved | – | – | – | ||||
by Security Holders | |||||||
Total | 2,861,447 | 52.34 | 11,237,742 |
We have long established ESG as a priority for the Company and are continuing to drive accountability to stakeholders, improve the environmental and social impacts of our business, measure the impact we are making, and communicate with our stakeholders.
NotesWe also, recognize, however, that this is a journey. We view public reporting as an ongoing process and expect our disclosures to Equity Compensation Plan Tablecontinue to evolve over time. We are fully committed to building on our progress over time and strengthening our vision for a more sustainable world. For additional information regarding our effort to power a more sustainable future, see our Impact Report, which is presented consistent with the SASB reporting standards and TCFD reporting framework and is available at investors.footlocker-inc. com/impactreport.
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As described in Proposal 2 above, in accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our shareholders have the opportunity to cast a nonbinding, advisory vote to approve the compensation of our NEOs. This Proposal 3 affords shareholders the opportunity to cast an advisory vote on how often we should include a Say-on-Pay proposal in our proxy materials for future annual meetings or any special meeting for which we must include executive compensation information in the proxy statement for that meeting (a “Say-on-Pay Frequency Proposal”). Under this Proposal 3, shareholders may vote to have the Say-on-Pay vote every 1 year, 2 years, or 3 years.
Our shareholders voted on a similar proposal in 2016 with the majority voting to hold the Say-on-Pay vote every 1 year. We continue to believe that Say-on-Pay votes should be conducted every 1 year so that our shareholders may annually express their views on our executive compensation program.
As an advisory vote, this proposal is not binding on the Company, the Board, or the Human Capital Committee. However, the Human Capital Committee and the Board value the opinions expressed by shareholders in their votes on this proposal and will consider the outcome of the vote when making future decisions regarding the frequency of conducting a Say-on-Pay vote.
It is expected that the next vote on a Say-on-Pay Frequency Proposal will occur at the 2028 annual meeting.
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The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. The Audit Committee conducts an annual evaluation of the independent registered public accounting firm’s qualifications, performance, and independence. The Audit Committee exercises sole authority to approve all audit engagement fees. In addition to ensuring
The Audit Committee ensures the regular rotation of the lead audit partner, as required by law, thelaw. The Audit Committee is also involved in reviewing, evaluating, and selecting the selection of, and reviews and evaluates, the lead audit partner.
The Audit Committee engages in an evaluation of thenew lead audit partner, and his or her qualifications.based on their qualifications, when the previous lead audit partner is required to rotate off the audit engagement. In evaluating and selecting the Company’sa lead audit partner, the Audit Committee provides selection criteria to KPMG LLP to which KPMG LLP responds with a roster of qualified candidates. Two members of the Audit Committee, along with the Audit Committee Chair of the Committee and the Lead Independent Director, interview the candidates. The Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer also interview the candidates. The Audit Committee Chair of the Committee and proposed lead audit partner meet in executive session. The Audit Committee Chair of the Committee then recommends his selection to the full Audit Committee for its consideration and approval.
The Audit Committee has appointed KPMG LLP as our independent registered public accounting firm for the 20192022 fiscal year. We are asking shareholders at this meeting to ratify this appointment of KPMG LLP for 2019.2022. KPMG LLP has served as our independent registered public accounting firm since 1995. The Audit Committee and the Board believe that the continued retention of KPMG LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders. Although ratification is not required by our By-Laws or otherwise, the Board is submitting the appointment of KPMG LLP to our shareholders for ratification because we value our shareholders’ views regarding this appointment and because we view it as a good corporate governance practice. In the event that shareholders fail to ratify this appointment, it will be considered a recommendation to the Board and the Audit Committee to consider selecting a different firm. Even if the appointment is ratified, the Audit Committee may in its discretion select 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 the Company and its shareholders.
Representatives of KPMG LLP will be present at the 2019 Annual Meeting and will have an opportunity to make a statement and respond to appropriate questions.
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✔ PROPOSAL 4: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Board recommends a voteFOR Proposal 3.
Audit and Non-Audit FeesAUDIT AND NON-AUDIT FEES
The following table shows the fees we paid to KPMG LLP for the audit of the Company’s annual financial statements for 20172020 and 2018,2021, as well as the fees billed for other services KPMG LLP provided during these two fiscal years:
Category | 2017 ($) | 2018 ($) | ||
Audit Fees(1) | 3,438,000 | 4,378,000 | ||
Audit-Related Fees(2) | 287,000 | 245,000 | ||
Tax Fees(3) | 322,000 | 294,000 | ||
All Other Fees | – | – | ||
Total | 4,047,000 | 4,917,000 |
Notes to Audit and Non-Audit Fees Table
Category | 2020 ($) | 2021 ($) |
Audit Fees(1) | 4,056,000 | 5,397,000 |
Audit-Related Fees(2) | 324,000 | 3,061,000 |
Tax Fees(3) | 304,000 | 515,000 |
Total | 4,684,000 | 8,973,000 |
(1) | Audit fees consisted of professional services provided in connection with the audit of our annual financial statements, reviews of financial statements included in our Quarterly Reports on Form 10-Q, as well as work generally only the independent auditor can reasonably be expected to provide, such as statutory audits. |
(2) | Audit-related fees consisted principally of audits of financial statements of certain employee benefit plans, |
(3) | Tax fees consisted |
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Proposal 3: Ratification of the Appointment of our Independent Registered Public Accounting Firm
Audit Committee Preapproval Policies and ProceduresAUDIT COMMITTEE PREAPPROVAL POLICIES AND PROCEDURES
The Audit Committee has a policy that all audit and non-audit services to be provided by our independent accountants, including services for our subsidiaries and affiliates, are to be approved in advance by the Audit Committee, regardless of the estimated cost for providing such services. Between meetings of the Audit Committee, theThe Audit Committee has delegated this authority to the Audit Committee Chair. In practice, theseChair to approve fees are normally approved bybetween meetings, and then the Audit Committee Chair andfees are reviewed with the Audit Committee at a subsequent meeting. Management reviews with the Audit Committee at regularly scheduled meetings the total amount and nature of the audit and non-audit services provided by the independent accountants since its prior meeting, including services for our subsidiaries and affiliates, sincewith the Audit Committee’s last meeting.Committee at regularly-scheduled meetings.
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PROPOSAL 4: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit Committee ReportAUDIT COMMITTEE REPORT
In accordance with the charter adopted by the Board, the Audit Committee assists the Board in fulfilling its oversight responsibilities in the areas of the Company’s accounting policies and practices, andas well as financial reporting. The Audit Committee is responsible for the appointment, compensation, and oversight of the independent registered public accounting firm. The Company’s management is responsible for preparing our financial statements and establishing and maintaining adequate internal controlcontrols over financial reporting.
The Audit Committee consists of foursix independent directors named below, as independence is defined under the NYSE rules. All of the Audit Committee members meet the expertise requirements under the NYSE rules.
The Audit Committee held nine meetings in 2018.2021. At its meetings during 2018,2021, the Audit Committee discussed with management, the Company’s independent registered public accounting firm (KPMG LLP), and the Company’s internal auditors the assessment of the Company’s internal control over financial reporting. The Audit Committee also discussed with KPMG LLP its attestation report and opinion on the Company’s internal control over financial reporting contained in the 2018 Annual Report on Form 10-K.Report. The Audit Committee regularly meets privately with KPMG LLP, the internal auditors, and the DirectorVice President of Internal ControlsAudit during the year.
The Audit Committee reviewed and discussed with management and KPMG LLP the audited financial statements for the 20182021 fiscal year, which ended February 2, 2019.January 29, 2022. The Audit Committee also discussed with KPMG LLP the matters required to be discussed by applicable Public Company Accounting Oversight Board (the “PCAOB”)PCAOB and SEC standards. The Audit Committee, both with and without management present, discussed and reviewed the results of KPMG LLP’s examination of the financial statements and the overall quality of the Company’s financial reporting.
The Audit Committee engages in an annual evaluation of the independent registered public accounting firm’s qualifications. In evaluating and selecting the Company’s independent registered public accounting firm, the Audit Committee considered, among other things:
historical and recent performance of the current independent audit firm; |
an analysis of known significant legal or regulatory proceedings related to the firm; |
external data on audit quality and performance, including PCAOB reports; |
industry experience; |
audit fee revenues; |
firm capabilities and audit approach; and |
the independence, tenure, and partner rotation of the audit firm. |
The Audit Committee also considers the advisability and potential impact of selecting a different independent registered public accounting firm. The Audit Committee obtained from KPMG LLP the written disclosures and the letter required by applicable PCAOB requirements regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with KPMG LLP its independence and any relationships that may affect its objectivity. The Audit Committee also considered whether the non-audit services provided to the Company by KPMG LLP to the Company are compatible with maintaining KPMG LLP’s independence. The Audit Committee has satisfied itself that KPMG LLP is independent.
As a result of this evaluation, the Audit Committee approved the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 1, 2020,January 29, 2022, subject to shareholder ratification.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the 2018 Annual Report on Form 10-K.Report.
Members of the Audit Committee
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![]() | VIRGINIA C. | MATTHEW M. | DARLENE | ULICE | DONA D. |
DROSOS | MCKENNA | NICOSIA | PAYNE, JR. | YOUNG | |
Member | Member | Member | Member | Member |
![]() | 2022 Proxy Statement | ![]()
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Directors and Executive OfficersDIRECTORS AND EXECUTIVE OFFICERS
The table below shows the number of shares of Common Stock reported to us as beneficially owned by each of our directors and NEOs, as of March 25, 2019, and by all directors, NEOs, and other executive officers as a group, as of that date,the Record Date, including shares of Common Stock that they have a right to acquire within 60 days after March 25, 2019the Record Date by the exercise of stock options.
Mr. Johnson beneficially owned 1.5% of the total number of outstanding shares of Common Stock as of the Record Date. No other director or NEO beneficially owned 1% or more of the total number of outstanding shares as of March 25, 2019.the Record Date. Each person has sole voting and investment power for the number of shares shown, unlessexcept as otherwise noted.noted below:
Name | Common Stock Beneficially Owned Excluding Stock Options (#)(a) | Stock Options Exercisable Within 60 Days After 3/25/19 (#) | RSUs and DSUs (#)(b) | Total (#) | |||||
Maxine Clark | 13,150 | — | 1,555 | 14,705 | |||||
Alan D. Feldman | 65,498 | — | 29,834 | 95,332 | |||||
Stephen D. “Jake” Jacobs | 77,449 | 111,919 | — | 189,368 | |||||
Richard A. Johnson | 294,589 | 739,782 | — | 1,034,371 | |||||
Lewis P. Kimble | 39,834 | 93,839 | — | 133,673 | |||||
Guillermo G. Marmol | 32,702 | — | 1,555 | 34,257 | |||||
Matthew M. McKenna | 30,459 | — | 1,555 | 32,014 | |||||
Steven Oakland | 10,816 | — | 3,137 | 13,953 | |||||
Ulice Payne, Jr. | 1,329 | — | 1,555 | 2,884 | |||||
Lauren B. Peters | 143,527 | 248,652 | — | 392,179 | |||||
Cheryl Nido Turpin | 47,941 | — | 46,865 | 94,806 | |||||
Kimberly Underhill | 1,329 | — | 1,555 | 2,884 | |||||
Pawan Verma | 66,189 | 39,277 | — | 105,466 | |||||
Dona D. Young | 42,527 | — | 66,334 | 108,861 | |||||
All 21 directors and executive officers as a group, | 1,036,412 | 1,471,168 | 153,945 | 2,661,525 | (c) | ||||
including the NEOs |
Name | Common Stock Beneficially Owned Excluding Stock Options (#)(1) | Stock Options Exercisable Within 60 Days After 3/21/22 (#) | DSUs, RSUs, and PSUs (#)(2) | Total (#) |
Bracken | 4,022 | 36,599 | 19,123 | 59,744 |
Drosos | – | – | – | – |
Feldman | 76,274 | – | 31,739 | 108,013 |
Gray | 7,626 | 65,871 | 13,710 | 87,207 |
Johnson | 344,206 | 974,230 | 105,948 | 1,424,384 |
Marmol | 44,408 | – | 1,136 | 45,544 |
Martin | 28,271 | 82,384 | 19,841 | 130,496 |
McKenna | 12,008 | – | 1,136 | 13,144 |
Nicosia | 6,045 | – | 1,569 | 7,614 |
Oakland | 17,983 | – | 7,117 | 25,100 |
Page | – | 2,777 | 15,725 | 18,502 |
Payne | 13,297 | – | 2,450 | 15,747 |
Peters | 145,601(3) | 194,553 | 37,048 | 377,202 |
Talwar | 17,263(3) | – | 7,433 | 24,696 |
Underhill | 15,443 | – | 1,136 | 16,579 |
Walker | 4,829 | – | 2,373 | 7,202 |
Young | 49,515 | – | 76,659 | 126,174 |
All 25 directors and executive officers as a group, including the NEOs | 927,220 | 1,640,476 | 402,301 | 2,969,997(4) |
This column includes shares held in the Company’s 401(k) |
This column includes the |
This information is based on the last beneficial ownership reports filed on behalf of Ms. Peters and Mr. Talwar with the SEC on March 30, 2021 and May 17, 2021, respectively, and also includes 7,209 RSUs that were accelerated in connection with Ms. Peters’s departure. |
(4) | This number represents approximately |
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![]() 102 | Foot Locker, Inc. |
Beneficial Ownership of the Company’s StockShare ownership
Persons Owning More Than Five-Percent of the Company’s Common StockPRINCIPAL SHAREHOLDERS
The table below provides information on shareholders who beneficially owned more than 5% of our Common Stock as of December 31, 20182021 according to reports filed with the SEC. To the best of our knowledge, there are no other shareholders who beneficially own more than 5% of a class of the Company’s voting securities.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (#) | Percent of Class | ||||
The Vanguard Group, Inc. | 12,206,275 | (a) | 10.81% | (a) | ||
100 Vanguard Boulevard | ||||||
Malvern, Pennsylvania 19355 | ||||||
AQR Capital Management, LLC and | 7,055,107 | (b) | 6.25% | (b) | ||
AQR Capital Management Holdings, LLC | ||||||
Two Greenwich Plaza | ||||||
Greenwich, Connecticut 06830 | ||||||
BlackRock, Inc. | 7,046,767 | (c) | 6.2% | (c) | ||
55 East 52nd Street | ||||||
New York, New York 10055 |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (#) | Percent of Class (%) |
Vesa Equity Investment S.à r.l., EP Investment S.à r.l., and Daniel Křetínský | 12,750,317(a) | 12.9(a) |
39 Avenue John F. Kennedy | ||
L-1855 Luxembourg, Luxembourg | ||
The Vanguard Group, Inc. | 11,309,861(b) | 11.27(b) |
100 Vanguard Boulevard | ||
Malvern, Pennsylvania 19355 | ||
BlackRock, Inc. | 7,742,626(c) | 7.7(c) |
55 East 52nd Street | ||
New York, New York 10055 | ||
FMR LLC | 8,622,922(d) | 8.591(d) |
245 Summer Street | ||
Boston, Massachusetts 02210 | ||
Boston Partners | 5,474,042(e) | 5.45(e) |
One Beacon Street, 30th Floor | ||
Boston, Massachusetts 02108 |
(a) | Reflects shares beneficially owned as of July 14, 2021 according to Form 4 filed with the SEC. As reported in this Form 4, Vesa Equity Investment S.à r.l. is the record holder of the reported shares of Common Stock. The principal shareholder of Vesa Equity Investment S.à r.l. is EP Investment S.à r.l., the ultimate beneficial owner of which is Daniel Křetínský. Each of Mr. Křetínský and EP Investment S.à r.l. may be deemed to hold shared voting power with respect to 12,750,317 shares and shared dispositive power with respect to 12,750,317 shares, and to be an indirect beneficial owner of the shares owned by Vesa Equity Investment S.à r.l. |
(b) | Reflects shares beneficially owned as of December 31, |
Reflects shares beneficially owned as of December 31, |
(d) | Reflects shares beneficially owned as of December 31, 2021 according to Amendment No. 1 to Schedule 13G filed with the SEC. As reported in this schedule, FMR LLC holds sole voting power with respect to 1,024,117 shares. Each of Crosby Advisors LLC, FIAM LLC, Fidelity Institutional Asset Management Trust Company, Fidelity Management & Research Company LLC, Fidelity Management Trust Company, and Strategic Advisers LLC beneficially own shares. Abigail P. Johnson is a Director, the Chairman, and the Chief Executive Officer of FMR LLC. Neither FMR LLC nor Ms. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company LLC (“FMR Co. LLC”), a wholly-owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. FMR Co. LLC carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. |
(e) | Reflects shares beneficially owned as of December 30, 2021 according to Amendment No. 1 to Schedule 13G filed with the SEC. As reported in this schedule, Boston Partners, an investment adviser, holds sole voting power with respect to 4,089,913 shares, shared voting power with respect to 9,361 shares, and sole dispositive power with respect to 5,474,042 shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our directors, executive officers, and persons who own more than 10% of the Company’s Common Stock file reports of ownership and changes in ownership of the Company’s Common Stock with the SEC. Based solely on our review of copies of such forms furnished to the Company and written representations that no other reports were required during the 2018 fiscal year, we believe that during the 2018 fiscal year, the persons subject to Section 16(a) reporting complied with all applicable SEC filing requirements, except as previously disclosed in the 2018 Proxy Statement.
![]() | 2022 Proxy Statement | ![]()
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Proposals for Inclusion in our 2020 Proxy Materials
Under SEC Rule 14a-8, if a shareholder would like us to include a proposal in our proxy statement and form of proxy for the 2020 Annual Meeting, our Secretary must receive the proposal at our corporate headquarters at 330 West 34th Street, New York, New York 10001 no later than December 14, 2019 in order to be considered for inclusion in the 2020 proxy statement.
Director Nominations for Inclusion in our 2020 Proxy Materials (Proxy Access)
Under our proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning at least 3% of the Company’s outstanding Common Stock continuously for at least three years as of the date of the notice of nomination, may nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board, whichever is greater (subject to certain limitations set forth in the By-Laws), provided that the shareholder(s) and nominee(s) satisfy the requirements specified in the By-Laws. Our Secretary must receive the notice of a proxy access nomination for the 2020 Annual Meeting at our corporate headquarters at 330 West 34th Street, New York, New York 10001 no earlier than November 14, 2019 and no later than December 14, 2019. You should carefully review the requirements specified in the Company’s By-Laws, which are available on the corporate governance section of the Company’s corporate website atfootlocker.com/corp. You may also obtain a printed copy of the By-Laws by writing to the Secretary at the Company’s headquarters.
Other Proposals or Nominations for the 2020 Annual Meeting
For any shareholder proposal that is not submitted under SEC Rule 14a-8, and any nomination of directors not submitted pursuant to our proxy access by-law provision, our By-Laws describe the procedures that must be followed. Under these procedures, we must receive notice of a shareholder’s intention to introduce a nomination or proposed item of business for an annual meeting not less than 90 days nor more than 120 days before the first anniversary of the prior year’s annual meeting. For the 2020 Annual Meeting, we must receive this notice no earlier than January 23, 2020 and no later than February 22, 2020, assuming that our 2020 Annual Meeting is held on schedule. However, if we hold the 2020 annual meeting on a date that is not within 25 days before or after the first anniversary of the prior year’s Annual Meeting, then we must receive the notice no later than ten days after the earlier of the date we first provide notice of the meeting to shareholders or announce it publicly. Proposals for nomination for directors and other items of business should be addressed to the Secretary, 330 West 34th Street, New York, New York 10001 and must contain the information specified in the Company’s By-Laws, which are available on the corporate governance section of our corporate website atfootlocker.com/corp or from the Secretary.
Nominations and Shareholder Proposals | Deadline | |
Proposals for Inclusion in Our 2023 Proxy Materials | Under SEC Rule 14a-8, if a shareholder would like us to include a proposal in our Proxy Statement and form of proxy for the 2023 annual meeting, our Secretary must receive the proposal at our Corporate Headquarters in order to be considered for inclusion in the 2023 proxy statement. | ![]()
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Director Nominations for Inclusion in Our 2023 Proxy Materials (Proxy Access) | Under our proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning at least 3% of the outstanding Common Stock continuously for at least three years as of the date of the notice of nomination, may nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board, whichever is greater (subject to certain limitations set forth in the By-Laws), provided that the shareholder(s) and nominee(s) satisfy the requirements specified in the By-Laws. Notices of proxy access nomination for the 2023 annual meeting should be addressed to our Secretary at our Corporate Headquarters. You should carefully review the requirements specified in the By-Laws, which are available at investors.footlocker-inc.com/by-laws. | No earlier than November 9, 2022 and no later than December 9, 2022 |
Other Proposals or Nominations for the 2023 Annual Meeting | For any shareholder proposal that is not submitted under SEC Rule 14a-8, and any nomination of directors not submitted pursuant to our proxy access by-law provision, our By-Laws describe the procedures that must be followed. Proposals for nomination for directors and other items of business should be addressed to our Secretary at our Corporate Headquarters and must contain the information specified in the By-Laws, which are available at investors.footlocker-inc. com/by-laws. | No earlier than January 18, 2023 and no later than February 17, 2023. However, if we hold the 2023 annual meeting on a date that is not within 25 days before or after the first anniversary of the prior year’s annual meeting, then we must receive the notice no later than ten days after the earlier of the date we first provide notice of the meeting to shareholders or announce it publicly. |
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Questions and Answers about this Annual Meeting and Voting
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Questions and Answers about this Annual Meeting and Voting
Directions
By subway
Take any of these subway lines: the A, B, C, D, E, F, M, N, Q, R, or W, or the Number 1, 2, or 3 trains to 34th Street. The A, C, E, 1, 2, and 3 trains stop at 34th Street-Penn Station. The B, D, F, M, N, Q, R, and W trains stop at 34th Street-Herald Square. NYC33 is on the north side of 33rd Street between 6th Avenue and 7th Avenue.
By car
NYC33 is on the north side of 33rd Street between 6th Avenue and 7th Avenue.
By Order of the Board of Directors
SheilaghSHEILAGH M. ClarkeCLARKE
Senior
Executive Vice President,
General Counsel and Secretary
April 8, 2022
April 12, 2019
![]() ![]()
| Foot Locker, |
Q: | What constitutes a quorum for the Annual Meeting? |
A: | We will have a quorum and be able to conduct the business of the Annual Meeting if the holders of a majority of the shares outstanding and entitled to vote are present at the meeting, either in person or by proxy. We will count abstentions and broker non-votes, if any, as present and entitled to vote in determining whether we have a quorum. |
Q: | Who may vote at the Annual Meeting? |
A: | Only shareholders of record on the books of the Company as of the Record Date are entitled to vote at the Annual Meeting, and any adjournments or postponements of the meeting, on the items of business described in this Proxy Statement. There were 96,089,997 shares of Common Stock outstanding as of the Record Date. Each share of Common Stock is entitled to one vote. |
Q: | Can I vote shares held in employee plans? |
A: | If you hold shares of Common Stock through the 401(k) Plan or the 1165(e) Plan, your proxy card includes the number of shares allocated to your plan account. Your proxy card will serve as a VIF for these shares for the plan trustee to vote the shares. The trustee will vote only those shares for which voting instructions have been given. To allow sufficient time for voting by the trustees of these plans, your voting instructions must be received by 11:59 p.m. EDT on May 15, 2022. |
Q: | Could matters be voted on at the Annual Meeting other than the proposals on page 1? |
A: | We do not know of any other business that will be presented at the Annual Meeting. If any other matters are properly brought before the meeting for consideration, then the persons named as proxies will have the discretion to vote on those matters for you using their best judgment. |
Q: | What happens if I do not vote my shares? |
A: | This depends on how you hold your shares and the type of proposal. If you hold your shares in “street name,” such as through a bank or brokerage account, it is important that you cast your vote if you want it to count for Proposals 1, 2, and 3. If you do not instruct your bank or broker regarding how to vote your shares, no votes will be cast on your behalf on Proposals 1, 2, and 3 because the broker does not have discretionary authority to vote. This is called a “broker non-vote.” Your bank or broker will have discretion to vote any uninstructed shares on Proposal 4. |
If you are a “shareholder of record,” meaning your stock ownership is reflected directly on the books and records of the Company’s transfer agent, or if you hold your shares through the 401(k) Plan or 1165(e) Plan, no votes will be cast on your behalf on any of the proposals if you do not cast your vote.
Q: | How will the votes be counted? |
A: | Votes will be counted and certified by an independent inspector of election. |
If you abstain from voting or there is a broker non-vote on any matter, your abstention or broker non-vote will not affect the outcome of such vote because abstentions and broker non-votes are not considered to be votes cast.
Q: | Can I change my mind after voting my shares? |
A: | Yes, you may revoke your proxy at any time before it is used by: |
► | sending a written notice to our Secretary at our Corporate Headquarters, |
► | delivering a valid proxy card with a later date, |
► | providing a later-dated vote by telephone, scanning, internet, or app, or |
► | voting at the Annual Meeting. |
Q: | How do I attend the Annual Meeting? |
A: | We are pleased to welcome shareholders to the Annual Meeting. The Annual Meeting will be held in a virtual format only to provide a safe experience for our shareholders and team members. All shareholders will be afforded the same rights they would have had at a physical meeting. |
2022 Proxy Statement | ![]() 105 |
Frequently Asked Questions
The live audio webcast of the meeting will begin promptly at 9:00 a.m. EDT. Online access to the audio webcast will open shortly prior to the start of the meeting to allow time for you to log-in and test your device’s audio system. We encourage you to access the meeting in advance of the designated start time. A support line will be available on the meeting website shortly prior to, and during, the meeting to assist shareholders with any technical difficulties they may have accessing or hearing the meeting.
To be admitted to the Annual Meeting, you will need to log-in to virtualshareholdermeeting.com/FL2022 using the 16-digit control number found on your Notice, proxy card, VIF, or email previously sent to shareholders entitled to vote at the Annual Meeting.
Even if you plan on attending the Annual Meeting, we encourage you to vote your shares in advance using one of the methods described in this Proxy Statement to ensure that your vote will be represented at the Annual Meeting.
Q: | Will there be a question and answer session at the Annual Meeting? |
A: | Shareholders may submit a question in advance of the meeting by emailing the Company at ir@footlocker.com. Live questions may be submitted online shortly prior to, and during, the Annual Meeting by logging in with the 16-digit control number at virtualshareholdermeeting.com/FL2022. We will answer questions during the meeting that are pertinent to the Company as time permits and in accordance with our rules of conduct for the Annual Meeting, which will be available on the virtual meeting website. Questions and answers may be grouped by topic and substantially similar questions may be grouped and answered once. |
Answers to any pertinent questions that are not addressed during the meeting may be published following the meeting on our corporate website at footlocker.com/corp.
Q: | Will the Annual Meeting be available for replay? |
A: | A replay of the Annual Meeting will be made publicly available approximately 24 hours after the Annual Meeting at virtualshareholdermeeting.com/FL2022. The replay will be available for one year. |
Q: | Who pays the cost of this proxy solicitation? |
A: | The Company will pay for the cost of the solicitation of proxies, including the preparation, printing, and mailing of the proxy materials. |
Proxies may be solicited, without additional compensation, by our directors, officers, or team members by mail, telephone, facsimile, in person, or otherwise. We will request banks, brokers, and other custodians, nominees, and fiduciaries to deliver proxy materials to the beneficial owners of the Common Stock and obtain their voting instructions, and we will reimburse those firms for their expenses under both SEC and NYSE rules. In addition, we have retained Innisfree M&A Incorporated to assist us in the solicitation of proxies for a fee of $15,000 plus out-of-pocket expenses.
Q: | Why did I receive a notice but no proxy materials? |
A: | We are furnishing proxy materials to our shareholders primarily over the internet under the SEC’s notice and access rules instead of mailing full sets of the printed materials. We believe that this procedure reduces costs, provides greater flexibility to our shareholders, and decreases the environmental impact of our Annual Meeting. For additional information regarding our commitment to the environment, see our Global Environmental and Climate Change Statement available at investors.footlocker-inc.com/climate. On or about April 8, 2022, we started mailing a Notice to most of our shareholders in the United States. The Notice contains instructions on how to access our Proxy Statement and Annual Report on the internet and vote online. If you received a Notice, you will not receive paper copies of the proxy materials, unless you request them. If you received a Notice and would like to receive paper copies of the proxy materials, please follow the instructions on the Notice for requesting the materials, and we will promptly mail the materials to you. |
We are mailing to shareholders, or making available to shareholders via the internet, this Proxy Statement, form of proxy card, and our Annual Report on or about April 8, 2022.
Q: | What is “householding” and how does it affect me? |
A: | The Company has adopted the “householding” procedure approved by the SEC, which allows us to deliver one set of documents to a household of shareholders instead of delivering a set to each shareholder in a household, unless we have been instructed otherwise. This procedure is more environmentally friendly and cost-effective because it reduces the number of copies to be printed and mailed. Shareholders who receive proxy materials in paper form will continue to receive separate proxy cards/VIFs to vote their shares. Shareholders who receive the Notice will get instructions on submitting their proxy cards/VIF via the internet. |
If you would like to change your householding election, request that a single copy of the proxy materials be sent to your address, or request a separate copy of the proxy materials, please contact Broadridge Financial Solutions, Inc. using their contact information provided under Helpful Resources on page 107. We will promptly deliver the proxy materials to you upon receipt of your request. If you hold your shares in street name, please contact your bank, broker, or other record holder to request information about householding.
![]() 106 | Foot Locker, Inc. |
Annual Meeting | virtualshareholdermeeting.com/FL2022 |
Board of Directors | |
Board | investors.footlocker-inc.com/board |
Committees | investors.footlocker-inc.com/bcommittees |
Committee Charters | |
Audit Committee | investors.footlocker-inc.com/audit |
Finance Committee | investors.footlocker-inc.com/finance |
Human Capital Committee | investors.footlocker-inc.com/comp |
Responsibility Committee | investors.footlocker-inc.com/gov |
ESG | |
Impact Report | investors.footlocker-inc.com/impactreport |
Financial Reporting | |
Annual Report | investors.footlocker-inc.com/ar |
Foot Locker, Inc. | |
Corporate Website | footlocker.com/corp |
Leadership Team | investors.footlocker-inc.com/management |
Investor Relations | investors.footlocker-inc.com/ir |
Governance Documents | |
Anti-Corruption Policy | investors.footlocker-inc.com/acp |
By-Laws | investors.footlocker-inc.com/by-laws |
Certificate of Incorporation | investors.footlocker-inc.com/coi |
Code of Business Conduct | investors.footlocker-inc.com/cobc |
Code of Business Conduct Waivers | investors.footlocker-inc.com/cobcwaivers |
Conflict Minerals Policy | investors.footlocker-inc.com/conflictminerals |
Corporate Governance Guidelines | investors.footlocker-inc.com/cgg |
Global Environmental and Climate Change Statement | investors.footlocker-inc.com/climate |
Global Human Rights Statement | investors.footlocker-inc.com/humanrights |
Global Occupational Health and Safety Statement | investors.footlocker-inc.com/safety |
Global Sourcing Guidelines | investors.footlocker-inc.com/gsg |
Global Water Stewardship Statement | investors.footlocker-inc.com/water |
Procedures for Communications with the Board | investors.footlocker-inc.com/boardcomms |
Contacts | |
To Request Copies of our Annual Report, Committee Charters, or Governance Documents Company Contacts Board or General Counsel and Secretary Investor Relations or mail to our Corporate Headquarters, Corporate Headquarters Foot Locker, Inc. | To Request Copies of the Internet Notice or Proxy Materials Broadridge Financial Solutions, Inc. 800-579-1639 To Change Your Householding Election Broadridge Financial Solutions, Inc. For Questions or Assistance Voting Innisfree M&A Incorporated Shareholders in the United States and Canada: 877-750-2689 Shareholders in all other locations: 412-232-3651 |
2022 Proxy Statement | ![]() 107 |
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Y O U R V O T E I S V E R Y I M P O R T A N TP L E A S E V O T E Y O U R P R O X Y
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330 WEST 34TH STREET NEW YORK, | ![]()
VOTE BY INTERNET Before The Meeting- Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/FL2022 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
KEEP THIS PORTION FOR YOUR RECORDS | ||
DETACH AND RETURN THIS PORTION ONLY | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
FOOT LOCKER, INC. | |||||||
Proposals - The Board of Directors recommends a vote FOR | |||||||
1. | | ||||||
Nominees: | For | Against | |||||
1a. | ![]() | ![]() | ![]() | ||||
1b. | Alan D. Feldman | ![]() | ![]() | ![]() | |||
1c. | Richard A. Johnson | ![]() | ![]() | ![]() | |||
1d. | Guillermo G. Marmol | ![]() | ![]() | ![]() | |||
1e. | ![]() | ![]() | ![]() | ||||
1f. | Steven Oakland | ![]() | ![]() | ![]() | |||
1g. | Ulice Payne, Jr. | ![]() | ![]() | ![]() | |||
1h. | ![]() | ![]() | ![]() | ||||
1i. | ![]() | ![]() | ![]() | ||||
1j. | Dona D. Young | ![]() | ![]() | ![]() |
For | Against | Abstain | |||
2. | Vote, on an Advisory | ![]() | ![]() | ![]() | |
1 Year | 2 Years | 3 Years | Abstain | ||
3. | ![]() | ![]() | ![]() | ![]() | |
For | Against | Abstain | |||
4. | Ratify the Appointment of KPMG LLP as the Company's Independent Registered Public Accounting | ![]() | ![]() | ![]() | |
NOTE:Such other business as may properly come before the meeting or any adjournment thereof. | |||||
Please indicate if you plan to attend this meeting. | ![]() | ![]() | |||
Yes | No |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Signature [PLEASE SIGN WITHIN BOX] | Date |
Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report with Form 10-K are available atwww.proxyvote.com.
E65655-P16270-Z73729
D67374-P64618
FOOT LOCKER, INC. Annual Meeting of Shareholders | ||||||||
This proxy is solicited by the Board of Directors of Foot Locker, Inc. | ||||||||
Andrew E. Page, Sheilagh M. Clarke, and John A. Maurer, | ||||||||
IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE. THE PERSONS NAMED ABOVE AS PROXIES CANNOT VOTE THE SHARES UNLESS YOU SIGN AND RETURN THIS CARD OR VOTE BY TELEPHONE OR INTERNET. YOU MAY SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF | ||||||||
EMPLOYEE PLANS | ||||||||
IF YOU ARE A PARTICIPANT IN THE FOOT LOCKER 401(k) PLAN OR THE FOOT LOCKER PUERTO RICO 1165(e) PLAN, BY SIGNING AND RETURNING THIS PROXY CARD (OR VOTING BY TELEPHONE OR INTERNET), YOU WILL AUTHORIZE THE PLAN TRUSTEES TO VOTE THOSE SHARES ALLOCATED TO YOUR ACCOUNT AS YOU HAVE DIRECTED. | ||||||||
Continued and to be signed on reverse side | ||||||||
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