Professional ExperiencePROFESSIONAL EXPERIENCE
Foot Locker, Inc. ● Chairman, since May 2016
| ► | Chairman, since May 2016 |
●
| ► | President and Chief Executive Officer, since December 2014 |
OTHER BOARD SERVICE | ► | Director and member of the Audit and Compensation committees, H&R Block, Inc., since September 2015 |
| ► | Director, Maidenform Brands, Inc., January 2013 to October 2013 |
| ► | Member, University of Wisconsin—Eau Claire National Leadership Council |
Director QualificationsREASONS FOR NOMINATION
Mr. Johnson has extensive experience as a retail company chief executive, including 2425 years at the Company. He serves as our Chairman, President and Chief Executive Officer. Mr. Johnson has led almost all of the Company’s major businesses in the United States, International, and Direct-to-Customer, and has extensive knowledge of all facets of the Company’s business. He hasbusiness, and played an integral role in developing and executing the Company’s strategic plans. Other Directorships| COMMITTEE | RELEVANT SKILLS |  |  |
 | DONA D. YOUNG | | | Lead Independent Director | | Age: 68 | Director since: 2001 Mr. Johnson has been a director of H&R Block Inc. since September 2015, serving on its Audit and Compensation committees, and was previously a director of Maidenform Brands, Inc. from January 2013 to October 2013. Mr. Johnson is also a director of the Retail Industry Leaders Association and the Footwear Distributors and Retailers of America and serves on the University of Wisconsin—Eau Claire National Leadership Council.
|
Dona D. Young | | |  | | | Lead Independent Director | Committees: | Age:67 | A G E | Director since:2001 | | | Skills and Qualifications: | |  | | |
Professional ExperiencePROFESSIONAL EXPERIENCE
Independent consultant (specializing in corporate social responsibility, corporate governance,executive and CEO coaching and counseling)board consultant The Phoenix Companies, Inc. (an insurance(insurance and asset management company) ●
| ► | Chairman, President and Chief Executive Officer, April 2003 to April 2009 |
OTHER BOARD SERVICE | ► | Chairman of the Supervisory Board Risk Committee and member of the Supervisory Board Nomination and Governance Committee, Aegon N.V. (insurance, pension, and asset management company) |
| ► | Vice Chair of Audit Committee and member of the Nominating and Governance, and Compensation and Workforce committees, USAA (United Services Automobile Association) |
| ► | Director, member of the Compensation Committee, and Chair of the Nominating and Governance Committee, NACD |
| ► | Board Member, Spahn & Rose Lumber Co. |
| ► | Director and member of the Audit and Governance committees, Save the Children Association and Save the Children International (non-profit organizations) |
| ► | Director and member of the Audit Committee, Save the Children U.S. |
| ► | Trustee, Saint James School in Saint James, Maryland |
Director QualificationsREASONS FOR NOMINATION
Mrs.Ms. Young has significant governance, legal, and financial experience. Her prior service as General Counsel, and later Chief Executive Officer, of The Phoenix Companies, Inc. exposed her to a number of areas, including mergers and acquisitions, risk management, and financial reporting. Mrs. Young’s leadership skillsexperience given her prior service as a public company General Counsel, and broad corporate governancelater CEO, which are relevant in her role as Lead Independent Director. The education and experience concerningMs. Young acquired through her board composition and succession planningservice at Save the Children are useful in her serviceoversight of the Company’s human rights efforts. In addition, she was named by the Financial Times’ Outstanding Directors Exchange as Lead Independent Director and a member of bothits Outstanding Directors class of 2021, the Governance Committee and the Audit Committee. Mrs. Young was named to the National Association of Corporate Directors (“NACD”)NACD Directorship 100 for 2015, and she has been ana NACD Board Leadership Fellow since 2013. Mrs. YoungShe is NACD Directorship Certified™, completed the NACD Cyber-Risk Oversight Program, and earned a CERT Certificate in Cybersecurity Oversight conferred by Carnegie Mellon University. SheUniversity, and was also a 2012 Advanced Leadership Fellow at Harvard University.
| COMMITTEES | RELEVANT SKILLS | | A E R |  |
 18 | Foot Locker, Inc. | |
Other DirectorshipsPROPOSAL 1: ELECTION OF DIRECTORS
 | VIRGINIA C. DROSOS | | | Independent Director | | Age: 59 | Director since: 2022 | | |
PROFESSIONAL EXPERIENCE Mrs. Young serves asSignet 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 member of the Supervisory Board, Risk Committee Chair, and a member of the Nominating and Governance Committee and Audit Committee of Aegon N.V. (multinational life insurance, pension, and asset management company). Shespecialty retailer, she is a directorvisionary and membertransformational 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 Audit Committee, Nominating and Governance Committee, and Compensation and Workforce CommitteeCEO of USAA, a director, member of the Compensation Committee, and Chair of the Nominating and Governance Committee of the NACD, an advisory board member of Spahn & Rose Lumber Co., and a director and member of the Audit Committee and Nominating and Governance Committee of Save the Children International, and Save the Children Association, as wellpublic company, providing her with relevant expertise as a member of the Audit Committee of Save the Children U.S. (each a non-profit organization). She is also a trustee of Saint James School in Saint James, Maryland.and Finance Committee. |
 | COMMITTEES | RELEVANT SKILLS | | A F |  |
 | ALAN D. FELDMAN | | | Independent Director | | Age: 70 | Director since: 2005 Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management A Audit C Compensati on F Finance G Governance E Executive Committe e Chair
 10
| Foot Locker, Inc. | |
Proposal 1: Election of Directors
Alan D. Feldman | | |  | | | Independent Director | Committees: | Age: 69 | C F | Director since: 2005 | | | Skills and Qualifications: | |  | | | |
Professional ExperiencePROFESSIONAL EXPERIENCE
Midas, Inc. (automotive repair and maintenance services)service provider) ● Chairman, President and Chief Executive Officer, May 2006 to April 2012
| ► | 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 Qualifications
| ► | Director, GNC Holdings, Inc., June 2013 to June 2020 |
Mr. Feldman is a recognized business leader with a broad base of experience in franchised retail operations, brand management, and customer relations. He previously served as Chairman, President and Chief Executive Officer of Midas, Inc. Mr. Feldman previously served as an executive of PepsiCo, Inc., Pizza Hut, Inc., and McDonald’s Corporation. Mr. Feldman’s leadership skills, retail knowledge, financial expertise, and executive experience provide particularly useful background for his service as a member of the Finance and Strategic Planning Committee (the “Finance Committee”) and the Compensation and Management Resources Committee (the “Compensation Committee”).
| ► | Director, Foundation Board, University of Illinois Foundation, since September 2012 |
Other DirectorshipsREASONS FOR NOMINATION
Mr. Feldman has been a director of John Bean Technologies Corporation since July 2008,extensive chief executive, financial, and he has servedfranchised retail experience as the Chairformer CEO of a public company specializing in retail franchises, providing him with relevant expertise as a member of the Foundation Board of the University of Illinois since September 2012. Mr. Feldman was a director of GNC Holdings, Inc. from June 2013 to June 2020.Human Capital Committee and Finance Committee. | COMMITTEES | RELEVANT SKILLS | | F H |  |
| 2022 PROXY STATEMENT |  19 |
PROPOSAL 1: ELECTION OF DIRECTORS  | GUILLERMO G. MARMOL | | | Independent Director | | Age: 69 | Director since: 2011 |
Guillermo G. Marmol | | |  | | | Independent Director | Committees: | Age: 68 |  C E | Director since: 2011 | | | Skills and Qualifications: | |  | | | |
Professional ExperiencePROFESSIONAL EXPERIENCE
Marmol & Associates (consulting firm that provides advisory services and investment capital to early stageearly-stage technology companies) ●
| ► | President, since March 2007 and from 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 |
Director QualificationsREASONS 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. Through his long tenureMr. Marmol also has extensive executive, financial, strategic analysis, and business process experience as a management consultant focusing on strategic analysisat Marmol & Associates and business processes, as well as his prior roles as Division Vice PresidentMcKinsey & Company and a former senior executive officer of Luminant Worldwide Corporation, Electronic Data Systems Corporation, (global technology services company) from June 2003 to February 2007 and Director and Chief Executive Officer of Luminant WorldwidePerot Systems Corporation, (internet professional services company) from July 1998 to October 2000, he brings valuable knowledge andproviding him with relevant expertise to his service on the Board, as Audit Committee Chair, and as a member onof the Compensation Committee. Other Directorships
Mr. Marmol is a directorHuman Capital Committee and Audit Committee member of Morae Global Corporation. He is Chair of the Board of Trustees of the Center for a Free Cuba. Mr. Marmol was a director of Vitamin Shoppe, Inc. from February 2016 to December 2019.Chair.
| COMMITTEES | RELEVANT SKILLS | 
|  |
 | DARLENE NICOSIA | | | Independent Director | | Age: 54 | Director since: 2020 
Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management A Audit C Compensati on F Finance G Governance E Executive Committe e Chair
| 2021 Proxy Statement |  11
|
Proposal 1: Election of Directors
Matthew M. McKenna
 | Independent Director | Committees: | Age:70 | A E | Director since:2006 | | | Skills and Qualifications: | |  | | | | Professional Experience | Director Qualifications | | | | Open Prairie Rural Opportunities Fund, L.P. (private equity fund)
● General Partner, since April 2018
Georgetown University’s McDonough School of Business
● Executive in Residence, since February 2017
U.S. Secretary of Agriculture
● Senior Advisor, July 2013 to January 2017
Fordham University School of Law
● Adjunct Professor
| Mr. McKenna has extensive financial, tax, and legal expertise, having served as a partner at an international law firm in New York City, Senior Vice President of Finance of PepsiCo, Inc. from August 2001 to December 2007, and a general partner of a private equity fund, which is useful for his service as Finance Committee Chair and as a member of the Audit Committee. The Board has determined that Mr. McKenna qualifies as an “audit committee financial expert,” as defined by the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, Mr. McKenna has government experience, as he previously served as Senior Advisor to the U.S. Secretary of Agriculture. He also brings the perspective of the non-profit sector from his previous positions as President and Chief Executive Officer of Keep America Beautiful, Inc. from January 2008 to June 2013 and Chairman of Ignatian Volunteer Corps., as well as his current positions as Executive in Residence of Georgetown University and adjunct professor at Fordham University.
|
Other DirectorshipsPROFESSIONAL EXPERIENCE
Mr. McKenna serves as a director and member of the Audit Committee of Green Dot Bioplastics LLC (bioscience social enterprise and full-service bioplastics company), and a director of Anacostia Impact Fund.
|
Darlene Nicosia
 | Independent Director | Committees: | Age:53 | A C | Director since:2020 | | | Skills and Qualifications: | |  | | | | Professional Experience | Director Qualifications | | | The Coca-Cola Company (non-alcoholic beverage(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 |
● President, Canada and Northeast U.S., North America Operating Unit, since January 2021 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 |
● President of the Canada Business Unit, January 2019 to January 2021 REASONS FOR NOMINATION
● Vice President, Commercial Product Supply, May 2016 to January 2019
● Vice President and Chief Procurement Officer, March 2015 to May 2016
| 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. Currently Ms. Nicosia serves as President, Canada and Northeast U.S., North America Operating Unit for The Coca-Cola Company, where she is responsible for building some of the world’s biggest brands in partnership with retailers and suppliers. Ms. Nicosia brings deep knowledge of global supply chain management, having served as Vice President, Global Product Supply, and Chief Procurement Officer at The Coca-Cola Company, and previous supply chain experience at both Kraft Heinz Company, and PepsiCo, Inc. Throughout her career, Ms. Nicosia has led sustainability initiatives navigatingand navigated complex regulatory environments and shifting consumer preferences. Her extensive understanding of general management, supply chain, marketing operations, customer and commercial,third-party risk management, and business transformation is an asset to our Board.Board, particularly our Audit Committee and Human Capital Committee. | COMMITTEES | RELEVANT SKILLS | | A H |  |
20 | Foot Locker, Inc. | |
Other DirectorshipsPROPOSAL 1: ELECTION OF DIRECTORS
Ms. Nicosia is a member of the Advisory Board of the Georgia Institute of Technology, Scheller College of Business, a member of the Canadian Beverage Association, and a member of the Food, Health and Consumer Products of Canada Association.
 | STEVEN OAKLAND |
 | | Independent Director | | Age: 61 | Director since: 2014 Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management A Audit C Compensati on F Finance G Governance E Executive Committe e Chair
12
| Foot Locker, Inc. | |
Proposal 1: Election of Directors
Steven Oakland
 | Independent Director | Committees: | Age:60 | F E | Director since:2014 | | | Skills and Qualifications: | |  | | | | Professional Experience | Director Qualifications | | | | |
PROFESSIONAL EXPERIENCE TreeHouse Foods, Inc. (manufacturer of packaged foods and beverages) ● Chief Executive Officer and President, since March 2018
| ► | 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
| ► | 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 strength instrengths around business development, mergers and acquisitions, risk management, strategic planning, customer engagement, marketing, brand-building, and strategic planning.brand building. Mr. Oakland is actively involved in management resources issuesgovernance and governancefinancial matters as the chief executive officersitting CEO of a public company, providing him with relevant expertise as a member of the Responsibility Committee and Finance Committee and Governance Committee Chair. Mr. Oakland also has risk management, business development, and mergers and acquisitions experience. Other Directorships| COMMITTEES | RELEVANT SKILLS | 
|  |
 | ULICE PAYNE, JR. | | | Independent Director | | Age: 66 | Director since: 2016 Mr. Oakland serves on the boards of TreeHouse Foods, Inc., MTD Products, Inc., and Foster Farms.
|
Ulice Payne, Jr.
 | Independent Director | Committees: | Age:65 | AG | Director since:2016 | | | Skills and Qualifications: | |  | | | | Professional Experience | Director Qualifications | | | |
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, since May 2004 |
OTHER BOARD SERVICE | ► | Director and member of the Audit and Governance and Sustainability committees, ManpowerGroup, Inc. |
| ► | Director and member of the Finance Committee and Compensation Committee Chair, WEC Energy Group, Inc. |
| ► | Director, Wisconsin Conservatory of Music |
| ► | Director, The Northwestern Mutual Life Insurance Company, January 2005 to May 2018 |
REASONS FOR NOMINATION Mr. Payne brings to our Board significant managerial,governance, operational, financial, public service, trade compliance, and globalinternational 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. As Foot Locker is a global company, the Board also benefits from his broad experience in, and knowledge of, international business and global trade compliance. In addition, Mr. Payne’s past and presentextensive experience on the boards of several public corporations includes serviceprovides him with relevant expertise as a member of either the Audit or Finance committee at each of these companies, which is beneficial to the Board. Other Directorships
Mr. Payne serves as a director and member of the Audit Committee and Nominating and GovernanceResponsibility Committee of ManpowerGroup, Inc., a director and member of the Finance Committee and Compensation Committee Chair of WEC Energy Group, Inc., and he also sits on the board of the Wisconsin Conservatory of Music. He previously served as a director of The Northwestern Mutual Life Insurance Company from January 2005 to May 2018.
|
|
Chair. | COMMITTEES | RELEVANT SKILLS | 
|  |
| 2022 PROXY STATEMENT | 21 |
Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management A Audit C Compensati on F Finance G Governance E Executive Committe e Chair
| 2021 Proxy Statement | 13PROPOSAL 1: ELECTION OF DIRECTORS
 | KIMBERLY UNDERHILL |
| | Independent Director | | Age: 57 | Director since: 2016 Proposal 1: Election of Directors
Kimberly Underhill
 | Independent Director | Committees: | Age: 56 |  GE | Director since:2016 | | | Skills and Qualifications: | |  | | | | Professional Experience | Director Qualifications | | | | |
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, since May 2018 to September 2021 |
| ► | Global President of Kimberly-Clark Professional, April 2014 to May 2018 |
OTHER BOARD SERVICE | ► | Advisory board member, Rawhide Youth Services |
| ► | Director, Board of Trustees, ThedaCare |
| ► | Co-Chair and Leadership Giving Chair, United Way Fox Cities Campaign |
| ► | Director and Compensation Committee Chair, Network of Executive Women, until 2021 |
| ► | Director, Kimberly-Clark de Mexico, S.A.B. de C.V., until September 2021 |
| ► | Director, Food Industry Association, until 2021 |
● Global President of Kimberly-Clark Professional, April 2014 to May 2018REASONS 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 strengthstrengths in marketing, brand-building,brand building, strategic planning, and international business, and business development. Additionally,She is NACD Directorship CertifiedTM. Ms. Underhill is actively involved inUnderhill’s management resources issuesexperience from her prior service as a senior executive of a public company which providesis relevant expertise to both our CompensationHuman Capital Committee, of which she is Chair, and GovernanceResponsibility Committee, of which she is a member. Through her senior executive position at Kimberly-Clark, Ms. Underhill also has significant international and business development experience. Other Directorships
| COMMITTEES | RELEVANT SKILLS | Ms. Underhill is a director of Kimberly-Clark de Mexico, S.A.B. de C.V., a director and Compensation Committee Chair of the Network of Executive Women (women’s leadership organization serving retail and consumer goods industries), a director and member of the Compensation Committee of ThedaCare Board of Trustees, and a director of the Food Marketing Institute.
|  |
 | TRISTAN WALKER | | | Independent Director | | Age: 37 | Director since: 2020 Tristan Walker
 | Independent Director | Committees: | Age: 36 | FG | Director since:2020 | | | Skills and Qualifications: | |  | | | | Professional Experience | Director Qualifications | | | | |
PROFESSIONAL EXPERIENCE Walker & Company Brands Inc. (manufacturer of health and beauty products for peoplepersons of color), a subsidiary of the Procter & Gamble Company ●
| ► | Founder and Chief Executive Officer, since April 2013 |
Heirloom Management Company, LLC (micro venture capital fund) | ► | Managing Member, since March 2022 |
OTHER BOARD SERVICE | ► | Director, Shake Shack, Inc. |
Mr. Walker is the Founder and Chief Executive Officer of Walker & Company Brands. Prior to his founding Walker & Company Brands, Mr. Walker was an Entrepreneur in Residence at Andreessen Horowitz (venture capital firm) from June 2012 to April 2013 and oversaw strategic partnerships and monetization as Director of Business Development at Foursquare from August 2009 to June 2012.
| ► | 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 makesbenefits our Board, and his financial and ESG experience as a great addition to our Board.CEO provides him with relevant expertise as a member of the Finance Committee and Responsibility Committee. | COMMITTEES | RELEVANT SKILLS | | F R |  |
22 | Foot Locker, Inc. | |
PROPOSAL 1: ELECTION OF DIRECTORS Other DirectorshipsDIRECTOR NOMINEES’ SKILLSET MATRIX
We believe that the director nominees possess the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business and Board experience, and viewpoints. We have refreshed our Board over the past five years, as five highly-qualified directors were added to the Board and, as of the Annual Meeting, five directors 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 oversight. 
24 | Foot Locker, Inc. | |
 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. There are currently 11 directors on our Board. Mr. Walker serves asMcKenna 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 effective at such time. DIRECTORS’ INDEPENDENCE A director is not considered independent under NYSE rules if they have a material relationship with the Company that would impair their 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 available at investors.footlocker-inc.com/cgg. The Board has determined that the following categories of relationships are immaterial for purposes of determining whether a director of Shake Shack, Inc. and a trustee of Children’s Healthcare of Atlanta. He co-founded and served as Chairman ofis independent under the Board of CODE2040 until January 2020, which matches high-performing Black and Latino software engineering students and graduates with technology firms and start-ups. |
NYSE listing standards:  | Categorical Relationship | Description Chief Executive Broad-Based Business Digital and Channel Connectivity Public Service Information Security International Retail, Brand Marketing, and Social Media Strategic Investments Strategic Planning and Analysis Supply Chain Technology and Systems Youth Culture / Target Market Accounting or Financial Business Development / Mergers and Acquisitions Environmental, Social, and Governance Risk Management A Audit C Compensati on F Finance G Governance E Executive Committe e Chair
14
| Foot Locker, Inc. | |
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| 2021 Proxy Statement | 15
| | 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 ![[GRAPHIC]](https://files.docoh.com/DEF 14A/0001539497-21-000440/n2494img16-17.jpg)
16 Proposal 1: Election of Directors Johnson Young Feldman Marmol McKenna Nicosia Oakland Payne Underhill Walker Summary of Director Qualifications and Experience and Demographic Background We believe that our slate of director nominees possesses the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business and Board experience, and viewpoints. We have refreshed our Board over the past five years, as four highlyqualified directors were added to the Board and, as of the 2021 Annual Meeting, four directors will have retired during that time period. Knowledge, Skills, and Experience Leadership Chief Executive experience is important because directors who have served as CEOs of public or substantial privatelyheld or non-profit companies have experience working, communicating, and engaging with a variety of important stakeholder groups, including shareholders, bondholders, and investment analysts Strategy Broad-Based Business expertise provides a depth of experience to leverage in evaluating issues, and making business judgments Digital and Channel Connectivity experience is important to the Company as we build a more powerful digital experience for our customers Public Service experience is relevant to the Company as it is affected by government actions Information Security experience is relevant given the importance of protecting both the Company’s and our customers’ information International experience is important in understanding and reviewing our business and strategy outside of the United States, particularly in Europe and Asia Retail, Brand Marketing, and Social Media experience gives directors an understanding of assessing, developing, and implementing our marketing and customer engagement strategies Strategic Investments experience is important in evaluating our financial statements and investment strategy Strategic Planning and Analysis experience provides a practical understanding of assessing, developing, and implementing the metrics of our long-term financial objectives and strategic priorities Supply Chain experience is important to understand the omni-channel commerce distribution model with multiple fulfilment points to serve the customer Technology and Systems experience is important given the importance of technology to the retail marketplace, our internal operations, and our customer engagement initiatives Youth Culture / Target Market experience is important to understand our business and strategy as our brands keenly focus on their target customers, particularly youth culture
2021 Proxy Statement 17 Proposal 1: Election of Directors Johnson Young Feldman Marmol McKenna Nicosia Oakland Payne Underhill Walker 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. Governance Accounting or Financial expertise 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 Acquisitions experience is important because it helps in assessing potential growth opportunities Environmental, Social, and Governance experience is important because it supports our goals of strong Board and management accountability, transparency, and protection of shareholder interests, including corporate social responsibility Risk Management experience is helpful to the Board’s role in overseeing strategic, financial, and execution risks and exposures; any major litigation and other matters that may present material risk to our operations, plans, prospects, or reputation (including those related to human capital management, supply chain, and environmental sustainability); significant acquisitions and divestitures; and senior management succession planning Demographic Background Board Tenure (Year Joined) ’14 ’01 ’05 ’11 ’06 ’20 ’14 ’16 ’16 ’20 Year 7 20 16 10 15 1 7 5 5 1 Gender Male Female Age (at April 9, 2021) Years old 63 67 69 68 70 53 60 65 56 36 Race/Ethnicity African American/Black Hispanic Caucasian/White Number of Other Public Company Boards 1 1 1 – – – 1 2 – 1
Corporate Governance
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. There are currently 11 directors on our Board. Maxine Clark will be retiring when her term expires at the conclusion of the 2021 Annual Meeting, and the Board has fixed the number of directors at 10 effective at such time.
Directors’ Independence
A director is not considered independent under New York Stock Exchange (“NYSE”) rules if they have a material relationship with the Company that would impair their 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 our corporate website at footlocker.com/corp.
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 does business, provided that the aggregate amount involved in a fiscal year does not exceed the greaterand any of $1 millionthese related persons or 2% of either that entity’s ortheir immediate family members are participants. We also make inquiries within the Company’s annual consolidated gross revenue. | | | Relationships with Not-for-Profit Entities | | A directorrecords for information on any of these kinds of transactions. Once we gather the information, we then review all relationships and any family member may be a director or employee (other than an executive officer or the equivalent)transactions of a not-for-profit organization towhich we are aware in which the Company (includingand any of our directors, executive officers, their immediate family members, or 5% shareholders are participants to determine, based on the Foot Locker Foundation) makes contributions, provided thatfacts and circumstances, whether the aggregate amountrelated persons have a direct or indirect material interest. Our General Counsel’s office coordinates the related person transaction review process. The Responsibility 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 Responsibility Committee considers such 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 contributionswritten 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 any fiscal year do not exceed2021. | 2022PROXY STATEMENT | 25 |
GOVERNANCE The Board, upon the greater of $1 million or 2%recommendation of the not-for-profit entity’s total annual receipts. | |
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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-percent shareholders are participants to determine, based on the facts and circumstances, whether the related persons have a direct or indirect material interest. The General Counsel’s office coordinates the related person transaction review process. The Governance 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 Governance Committee considers such 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 2020.
18
| Foot Locker, Inc. | |
Corporate Governance
The Board, upon the recommendation of the 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:
  |  |  |  |  | DONA D. YOUNG Maxine Clark Age72 Director since 2013 Alan D. Feldman Age 69 Director since 2005 Guillermo G. Marmol Age68 Director since 2011 Matthew M. McKenna Age70 Director since 2006 Darlene Nicosia Age53 Director since 2020 Steven Oakland Age60 Director since 2014 Age 65 Director since 2016 Ulice Payne, Jr. Kimberly Underhill Age56 Director since 2016 Tristan Walker Age36 Director since 2020 Age67 Director since 2001 Dona D. Young
 | In making its independence determination, the Board reviewed recommendations of the Governance Committee and considered Mrs. Young and Mr. Payne’sAge: 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 |
 |  |  |  |  | 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 |
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 its longer-tenured directors have important experience, bring diverse perspectives, and provide tangible value to the Board and the Company. The Board has also determined that their length of tenure has allowed these relationships meetdirectors to accumulate valuable knowledge and experience based upon their history with the categorical standard for RelationshipsCompany. This knowledge and experience improves the ability of the Board to provide constructive guidance and informed oversight to management. Furthermore, in the Board’s opinion, the 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 Company in any area. The Board benefits from the contributions of its experienced directors who have developed insight into the Company 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 tenure should be balanced with Other Business Entitiesnew 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 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 CEO have been held by Mr. Johnson, with Ms. Young serving as Lead Independent Director. The Board has utilized various leadership structures since 2010, as shown below: 
The Board believes that, based on the Company’s current facts and circumstances, its Board leadership structure is appropriate. | 2022PROXY STATEMENT | 27 |
GOVERNANCE LEAD INDEPENDENT DIRECTOR The Board believes that, because the positions of Chairman and CEO are immaterial with respect to determining independence. |
Board Independence 10 Directors All Directors are independent, except the CEO
The Board has determined that all members of the Audit Committee, the Compensation Committee, the Finance Committee, and the Governance Committee are independent as defined under the NYSE listing standards and the director independence standards adopted by the Board.
Board Leadership Structure
Our Board evaluates, from time to time as appropriate, whether the same person should serve as Chairman and Chief Executive Officer, 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 Officer have been held by Mr. Johnson, with Mrs. Young serving as Lead Independent Director. The Board has utilized various leadership structures since 2010, as shown below:
January 2010 Positions combined, with a Lead Independent Director December 2014 Positions separated, with the former Chairman and Chief Executive Ocer serving as Executive Chairman, and a Lead Independent Director May 2015 Positions separated, with an independent director serving as Non-Executive Chairman May 2016 Positions combined, with a Lead Independent Director
The Board believes that, based on the Company’s current facts and circumstances, its Board leadership structure is appropriate.
| 2021 Proxy Statement | 19
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Corporate Governance
Lead Independent Director
The Board believes that, particularly because the positions of Chairman and Chief Executive Officer are held by the same person, the appointment of a lead independent 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;
| ► | presiding at executive sessions of the independent directors, and Board meetings at which the Chairman is absent; |
attending meetings of each of the Board committees;
| ► | attending meetings of each of the Board committees; |
encouraging and facilitating active participation by, and communication among, all directors;
| ► | encouraging and facilitating active participation by, and communication among, all directors; |
serving as the liaison between the independent directors and the Chairman;
| ► | 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;
| ► | 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; |
having the authority to call meetings of the independent directors;
| ► | possessing the authority to call meetings of the independent directors; |
leading the Board’s annual performance evaluation of the Chief Executive Officer;
| ► | leading the Board’s annual CEO performance evaluation; |
advising the Chairman and the committee chairs in fulfilling their designated roles and responsibilities; and
| ► | 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.
| ► | performing such other functions as the Board or other directors may request. |
The Board periodically considers the rotation of the Lead Independent Director, taking into account experience, continuity of leadership, and the best interests of the Company. Mrs. Young currently serves as the Lead Independent Director. The Board believes that Mrs. Young is well suited to serve as Lead Independent Director, given her business, financial, and governance background, as well as her experience serving on our Board.
| | | Note from Our Lead Independent Director, | | | | Foot Locker, Inc. is resilient. The Company’s success in addressing the extraordinary challenges during 2020—COVID-19 and social unrest—are testaments to this resiliency. Management taking into account experience, continuity of leadership, and the best interests of the Company.Ms. Young currently serves as the Lead Independent Director. The Board were testedbelieves that Ms. Young is well suited to serve as Lead Independent Director, given her governance, business, and financial background. The Board also recognizes that it benefits from Ms. Young’s tenure as an experienced director who has developed insight into the Company over the course of her service on the Board, which improves her ability to provide constructive, independent, and informed guidance and oversight to management. NOTE FROM OUR LEAD INDEPENDENT DIRECTOR 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 multiple ways during 20202021. 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 their discipline, breadth, diversity, and partnership proved to be important assets. | | | | 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 successfully 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 challenges presented during 2020: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 |
28 | Foot Locker, Inc. | |
GOVERNANCE DIRECTOR ON-BOARDING We have a two-phase on-boarding program for new directors that is intended to educate a new director on the Company and the Board’s practices: 
DIRECTOR CONTINUING EDUCATION Director education is an ongoing process, which begins when a director joins our Board. We host quarterly Board and committee presentations and separate education sessions to keep directors appropriately apprised of key developments concerning the following topics so they can effectively carry out their oversight responsibilities: 
We also encourage all directors to attend other continuing education programs to maintain their expertise and share 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: 
| 2022PROXY STATEMENT | 29 |
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 any change to their principal employment. If requested by the Responsibility Committee Chair, after consultation with the other members of the Responsibility Committee, the director is required to submit a letter of resignation to the Responsibility Committee Chair, for the Responsibility Committee to consider. The Corporate Governance Guidelines also require that directors retire from the Board at the annual meeting following the director’s 72nd birthday. CORPORATE GOVERNANCE GUIDELINES The Corporate Governance Guidelines assist the Board in the exercise of its governance responsibilities and serve as a framework within which the Board may conduct its business, including the 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 periodically reviews the guidelines and revises them, as appropriate. The Corporate Governance Guidelines are available at investors.footlocker-inc.com/cgg
| . StewardshipBOARD ATTENDANCE
The Board held 11 meetings during 2021. Each director attended at least 95% of the aggregate of all Board and committee meetings for the committees on which they served during 2021. The Board holds regularly-scheduled executive sessions of independent directors in conjunction with each Board meeting. Ms. Young, as Lead Independent Director, presides at these executive sessions. Directors are expected to attend annual meetings. The annual meeting is typically scheduled on the same day as a quarterly Board meeting. In 2021, all of the directors attended the annual meeting, which was held virtually given the health and safety concerns surrounding the COVID-19 pandemic. RETENTION 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, which the Company has partially outsourced to an independent public accounting firm. Similarly, the consultant retained by the Human Capital Committee to assist in evaluating senior executive compensation reports directly to that committee. 30 | Foot Locker, Inc. | |
GOVERNANCE BOARD EVALUATIONS The Board and its committees engage in a robust Board and committee assessment process every year, and a 360-degree peer and self-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, as described in the table below. The Board last conducted a 360-degree peer and 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. | |
| 2022PROXY STATEMENT | 31 |
GOVERNANCE STOCK OWNERSHIP GUIDELINES The Company’s Stock Ownership Guidelines align 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 Company’s non-employee directors, executive officers, corporate officers, and certain other executives. The participants 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: | Position | Multiple | | | | Non-Employee Director | 4x | Annual Retainer Fee (both Cash and Equity) |  | | Chief Executive Officer | 6x | Annual Base Salary Rate |  | | Chief Operating Officer | 4x | Annual Base Salary Rate |  | | Executive Vice President | 3x | Annual Base Salary Rate |  | Senior Vice President
Senior Vice President and General Manager | 2x | Annual Base Salary Rate |  | Corporate Vice President
Vice President and General Manager
Select Vice Presidents | 0.5x | Annual Base Salary Rate |  |
For purposes of calculating beneficial ownership, (i) Common Stock, RSUs, and DSUs count towards ownership, (ii) PSUs and ESPP shares count once earned and purchased, respectively, and (iii) stock options and shares held through Challenges. the 401(k) Plan are disregarded. Executives and Non-Employee Directors are required to achieve their Stock Ownership Guideline within five years of their hiring or promotion effective date that caused such employee to be covered by these guidelines, and their election to the Board, respectively. In the event of any increase in the required ownership level, either as a result of an increase in the remuneration paid or the multiple, the target date for compliance with such increased ownership guideline is five years after the effective date of such increase. In the event any person subject to these guidelines fails to be in compliance by the applicable compliance date, they are required to hold the net shares obtained through all future stock option exercises and RSU vestings, after withholding for the payment of applicable taxes, until such 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 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 the holding requirements. The Responsibility Committee will consider a Non-Employee Director’s failure to comply with these guidelines when considering that director for re-election to the Board. The Company measures compliance at the end of each fiscal year, with the compliance determination at that point in time 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 end of the 2021 fiscal year. POLITICAL 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 certain 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. 32 | Foot Locker, Inc. | |
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 or footwear industries or the business community generally, as applicable: | ► | U.S. Chamber of Commerce |
Mr. Johnson is a director of FDRA and Chairman of RILA. Notwithstanding 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. For 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, andas the social unrest during 2020. The Board didn’t skip a beat as itsBoard’s focus quickly pivoted toward protecting the communities we serve, keeping our team members safe, and maintaining financial stability for our shareholders. We also onboarded two new 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 duringwith opportunities to see strategy execution first hand. | 2022PROXY STATEMENT | 33 |
GOVERNANCE HUMAN CAPITAL MANAGEMENT AND SUCCESSION PLANNING OVERSIGHT The Board believes that the pandemic, whose skills and experiences provedstrength of the Company’s workforce is one of the significant contributors to be highly relevant and contributory during 2020. This underscores our long-term focus on continuous Board refreshment and ensuringsuccess as a global brand that leads with purpose. One of the primary responsibilities of the Board is fit for its purpose given our strategic direction. Also, becauseto ensure that the positions of ChairmanCompany has a high-performing CEO and Chief Executive Officer are combined, the role of the Lead Independent Director is critical. As Lead Independent Director, Imanagement team. To meet regularly with the Chief Executive Officer and members of his leadership team, visit stores and facilities to the extent possible given health and safety protocols in light of COVID-19, and participate in selected Company events. The committee chairs also regularly engage with management regarding the work of their committees. | | | | | • | Shareholder Engagement. As a Board, one of our priorities is listening to, and considering the views of, our shareholders. We accomplish this through a robust outreach and engagement program, which was particularly important during 2020. These meetings provide an important platform to receive feedback from investors. This engagement program promotes transparency betweenthat goal, the Board, the Human Capital Committee, the Responsibility Committee, and our shareholdersmanagement share responsibility for management development and helps build informed and productive relationships. As Lead Independent Director, I participate in these meetings on behalf of the Board and share the feedback gained from these meetings with the full Board and the Governance Committee, as well as compensation-specific feedback with the Compensation Committee. As a result of the feedback, enhancements have been made to this Proxy Statement to further improve transparency. 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 Shareholder Engagement investors.footlocker-inc.com/aron page 27. | 34 | Foot Locker, Inc. | | | |
| Corporate Social Responsibility. ESG OVERSIGHT
The Board is actively engaged in the oversight of the Company’s global CSR programESG program. In exercising its authority, the Board recognizes that the long-term interests of our shareholders are best advanced when considering other stakeholders and this message is a key topic during each shareholder engagement meeting.interested parties, including customers, team members, business partners, and the communities we serve. The GovernanceResponsibility Committee oversees our global CSRESG program, and the Board receives updates from the GovernanceResponsibility Committee Chair throughout the year. TheIn addition, each of the Audit Committee, Finance Committee, and the CompensationHuman Capital Committee also consider the relevanthave certain ESG oversight responsibilities ofrelevant to their respective committees in the context of the CSR program. Our commitment to CSR is fundamental to our business and corporate philosophy and serves as the foundation of our long-term success. The Board lives these values and leads by example. For example, in 2020, my fellow directors participated in fireside chats and other meetings with our team members to share their personal experiences and thoughts on leading with purpose during times of change. These important discussions have created opportunities to listen, learn, and address issues of equity, diversity and inclusion, and breaking down barriers within the workplace and the communities we serve, which were on display in 2020. For additional information regarding our global CSR program and Board oversight, see Corporate Social Responsibility beginning on page 29, and our Impact Report on our corporate website at footlocker.com/corp. | | | | | The Board is impressed with how the Company navigated this extraordinary year to overcome the many obstacles 2020 threw its way. This success was because of the dedication and expertise of its people. I would, therefore, like to say a big “thank you” on behalf of the Board to the Company’s entire team across all functions, all banners and geographies. The Board looks forward to working with management in the year ahead as we continue to work through the disruption and implications presented by this global pandemic to help them meet their targets and achieve the Company’s purpose to inspire and empower youth culture. | committees. | “Foot Locker, Inc.’s success in addressing the extraordinary challenges during 2020—COVID-19 and social unrest—are testaments to the Company’s resiliency.”
DONA D. YOUNG
Lead Independent Director
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| Foot Locker, Inc. | |
Corporate Governance
Director On-Boarding
We have an 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 a director’s service, the newly-elected director meets with the Company’s Chief Executive Officer, Chief Financial Officer, Chief Human Resources Officer, General Counsel, and other members of senior management, to review the Company’s business operations, financial matters, strategy, investor relations, risk management, corporate governance, composition of the Board and its committees, succession and development plans, and global CSR program. Additionally, they visit our stores near 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 Independent Director and with the committee chairs for an immersion into the work of the committees. As part of the on-boarding process, we assign a Board mentor to each new director in addition to the Lead Independent Director making herself available to new directors as part of the on-boarding process.
The second phase of the on-boarding program commences approximately 18 months after a director joins the Board and is specifically tailored to the individual director, taking into consideration their experience as a director of other public companies, the committees of our Board on which they serve, 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 Independent Director continue throughout the on-boarding program.
Director Continuing Education
Director education is an ongoing process, which begins when a director joins our Board. We host quarterly Board and Committee presentations and education sessions to inform and keep directors appropriately apprised of key developments concerning the following topics so that they can effectively carry out their oversight responsibilities:
Retail Board Audit Compensation Finance Governance
We also encourage all directors to attend other continuing education programs to maintain their expertise and provide feedback to the other directors on these programs. We reimburse directors for reasonable expenses incurred in attending continuing education programs. In 2020, our directors attended a variety of virtual 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:
Accounting and Finance Audit Brand Marketing Compensation COVID-19 Response and the Future of Work Cybersecurity and Data Digital ESG Governance International Labor and Employment Lead Director Role Mergers and Acquisitions Public Company Reporting Retail Disruption Risk Management Social Media Strategy Supply Chain Technology and Systems
| 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:
Corporate Governance
Mandatory Resignation or Retirement
The Board has established a policy whereby a non-employee director is required to advise the Governance Committee Chair of any change to their principal employment. If requested by the Chair, after consultation with the members of the Committee, the director will submit a letter of resignation to the Committee Chair, and the Committee would then meet to consider whether to accept or reject the resignation.
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 Guidelines
The Board has responsibility for establishing broad corporate policies, reviewing significant developments affecting the Company, overseeing the business strategy, and monitoring the general performance of the Company.
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 our corporate website at footlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.
Board Attendance
The Board held 14 meetings during 2020. All of our directors attended at least 96% of the aggregate of all Board and committee meetings for the committees on which they served in 2020.
The Board holds regularly scheduled executive sessions of independent directors in conjunction with each Board meeting. Mrs. Young, as Lead Independent Director, presides at these executive sessions.
Directors are expected to attend annual meetings of shareholders. The annual meeting is normally scheduled on the same day as a quarterly Board meeting. In 2020, all of the directors attended the annual meeting, which was held virtually given the health and safety concerns surrounding the COVID-19 pandemic.
Retention 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, which the Company has partially outsourced. Similarly, the consultant retained by the Compensation Committee to assist in evaluating senior executive compensation reports directly to that committee.
Board Evaluations
Each year, the Board and its committees engage in a robust evaluation process consistent with the Board’s goal of continuous improvement. The Governance Committee oversees the evaluation process and reviews the procedures, which may vary from year to year, in advance of each year’s evaluation. The process is 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, the Board conducts a 360-degree peer evaluation approximately every three years, with the next process launching in 2021. This process is facilitated by an independent third party. Each director completes an evaluation and individual interview with the third party. The Lead Independent Director receives a summary of each director’s evaluation and meets separately with each director to discuss the results of the individual evaluations, and the Governance Committee Chair receives a summary of the Lead Independent Director’s evaluation and meets with the Lead Independent Director to discuss the results of her evaluation.
22
| Foot Locker, Inc. | |
Corporate Governance
Stock Ownership Guidelines
The Board has adopted Stock Ownership Guidelines applicable to the Board, the Chief Executive Officer, and other covered executives. The Guidelines are as follows:
Covered Position | | Stock Ownership Guidelines | Non-employee Director | | 4x | Annual Retainer Fee
(both Cash and Equity) |  | Chief Executive Officer | | 6x | Annual Base Salary Rate |  | Executive Vice President | | 3x | Annual Base Salary Rate |  | Senior Vice President; Senior Vice President and General Manager | | 2x | Annual Base Salary Rate |  | Corporate Vice President; Vice President and General Manager | | 0.5x | Annual Base Salary Rate |  |
Shares of unvested restricted stock units (“RSUs”), and deferred stock units (“DSUs”) are counted towards ownership for purposes of the Stock Ownership Guidelines. Performance RSUs (“PSUs”) are counted once earned. Stock options and shares held through the Foot Locker 401(k) Plan are disregarded in calculating ownership.
Directors, the Chief Executive Officer, and other covered executives are required to be in compliance within five years of becoming subject to these guidelines. In the event of any increase in the required ownership level, whether as a result of an increase in the annual retainer fee or base salary or an increase in the required ownership multiple, the target date for compliance with the increased ownership guideline is five years after the effective date of such increase.
All directors, the Chief Executive Officer, and other covered executives who were required to be in compliance with the guidelines as of the end of the 2020 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 with the guidelines as of the end of the prior fiscal year, they must hold the net shares obtained through future stock option exercises and RSU vestings, after payment of applicable taxes, until again regaining compliance with the guidelines. 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 this holding requirement. For non-employee directors, the Governance Committee will consider a director’s failure to comply with the Stock Ownership Guidelines when considering that director for reelection.
| |  | POLITICAL CONTRIBUTIONS | | | 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 several trade associations which, as part of their overall activities, may engage in advocacy activities with regard to issues important to the retail industry or the business community generally. | |
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Corporate Governance
Our Board’s Oversight of Our Business
Oversight of the Company’s business strategy and strategic planning 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, non-financial measures, including sustainability goals, are discussed regularly by the Board and Board 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, and the social unrest during 2020, 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. See 2020 Year in Focus beginning on page 42 for a discussion of the Board’s efforts during the ongoing COVID-19 pandemic, as well as the social unrest during 2020.
While the Board and its committees oversee strategic planning, management is charged with developing and executing the business strategy. To monitor performance against the Company’s strategic goals, the Board receives regular updates and actively engages in dialogue with management. These boardroom discussions are enhanced with “hands-on” experiences, such as store and facility visits, which provide directors an opportunity to see strategy execution first hand.
Human Capital Management 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. The Board made human capital management a priority though its Compensation Committee, which oversees the Company’s strategies and initiatives on diversity and inclusion, employee well-being, compensation and benefits program, and engagement. For additional information on the Company’s human capital management strategies and initiatives, see our 2020 Annual Report on Form 10-K.
Corporate Social Responsibility Oversight
The Board is actively engaged in the oversight of the Company’s global CSR 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 in which we operate. The Governance Committee oversees our global CSR program, and the Board receives updates from the Governance Committee Chair throughout the year. The Audit Committee and the Compensation Committee also consider the relevant oversight responsibilities of their respective committees in the context of the CSR program.
| | | Inspired by engagement with shareholders, the Company published its inaugural Impact Report covering two fiscal years (2019-20). The Impact Report provides details on our global CSR program, consistent with SASB and TCFD reporting standards. Our global CSR program is focused on: |  |  | 1 Leveraging the Power of Our People and Communities 2Strengthening the Sustainability of Our Supply Chain 3 Managing and Reducing Our Environmental Impacts 4 Operating Ethically and Transparently
| | For additional information regarding our global CSR program and Board oversight, see Corporate Social Responsibility beginning on page 29, and our Impact Report on our corporate website at footlocker.com/corp | 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. | | | | |
24The Company has adopted the following policy statements related to its global ESG program:
| Foot Locker, Inc. | |
| 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. Oversight for some of these risks is assigned to the committees—largely the Audit 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 Board. In addition, the Audit Committee receives regular briefings from our Chief Information Security Officer, Chief Financial Officer, Chief Accounting Officer, General Counsel, Vice President of 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 Board at the next Board meeting following each Audit Committee meeting. The Human Capital Committee considers risk in relation to the Company’s compensation policies and practices. The Human 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 risk oversight process is appropriate in light of the Company’s business, size, and active senior management participation, including by the CEO, in managing risk and holding regular discussions on risk with the Audit Committee, the Human Capital Committee, and the Board. CYBERSECURITY Global Environmental and Climate Change Statement
The Company has adopted a Global Environmental and Climate Change Statement that sets out certain sustainability and environmental commitments and priorities, including reducing greenhouse gases that may have an adverse effect on Climate Change. The Statement also sets forth certain responsibilities of its suppliers. The Statement is available on the corporate governance section of our corporate website at footlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.
Global Human Rights Statement
The Company has adopted a Global Human Rights Statement that 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. The Statement also sets forth certain responsibilities of its suppliers. The Statement is available on the corporate governance section of our corporate website at footlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.
Global Occupational Health and Safety Statement
The Company has adopted a Global Occupational Health and Safety Statement that 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. The Statement also sets forth certain responsibilities of its suppliers. The Statement is available on the corporate governance section of our corporate website at footlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.
Risk Oversight
The Board has oversight responsibilities regarding risks that could affect the Company. Oversight for some of these risks is assigned to the committees—largely the Audit 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 Security Officer, Chief Financial Officer, Chief Accounting Officer, General Counsel, Vice President of 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 committee meeting.
The Compensation Committee considers risk in relation to the Company’s compensation policies and practices. The Compensation 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 is appropriate in light of the Company’s business, size, and active senior management participation, including by the Chief Executive Officer, in managing risk and holding regular discussions on risk with the Audit Committee, the Compensation Committee, and the Board.
| | |  | CYBERSECURITY | | | | We are subject to technology risks, including failures, security breaches, and cybersecurity risks, that 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 | 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. | | |
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Corporate GovernancePRIVACY
 | PRIVACY | | | 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. Similarly, our privacy statements and practices in the United States were updated in response to the California Consumer Privacy Act (CCPA),CCPA, which came into force in January 2020. 36 | Foot Locker, Inc. | |
GOVERNANCE CODE OF BUSINESS CONDUCT The Company has adopted a Code of Business Conduct applicable to directors, officers, and all other team members. The Company periodically reviews the Code of Business Conduct and revises it, as appropriate. Any waivers of the Code of Business Conduct for directors and officers must be approved by the Audit Committee. The Code of Business Conduct is available at investors.footlocker-inc.com/cobc, and all current waivers for directors and officers are available at investors.footlocker-inc.com/cobcwaivers. GLOBAL SOURCING GUIDELINES Without 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 we believe should be universal, notwithstanding more relaxed standards (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 same 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 documentation necessary to demonstrate compliance. Our Global Sourcing Guidelines provide the following: Code of Business Conduct
The Company has adopted a Code of Business Conduct for directors, officers, and other 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 our corporate website at footlocker.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 and any waivers of the Code of Business Conduct for directors and executive officers on the corporate governance section of our corporate website at footlocker.com/corp| 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 at investors.footlocker-inc.com/gsg. Global Sourcing Guidelines
The Company has adopted Global Sourcing Guidelines that set out standards applicable to the production of all products sold in our stores. The Company periodically reviews the guidelines and revises them, as appropriate. The Global Sourcing Guidelines are available on the corporate governance section of our corporate website at footlocker.com/corp. 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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| Foot Locker, Inc. | |
Corporate Governance
Shareholder Engagement
Our
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SHAREHOLDER ENGAGEMENT WHY WE ENGAGE The Board’s relationship with our 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 also closely monitor policy statements and areas of focus for shareholders. These engagement efforts allow the Board to better understand the Company’s shareholders’ priorities and perspectives and provide the Board with useful input concerning the Company’s compensation, corporate governance, and ESG practices. The Board is an important part of our success and we have a long tradition of engaging with our shareholders and obtaining their perspectives. The Board believes that it is important to foster long-term relationships with shareholders and understand shareholder perspectives. We value an open dialogue with our shareholders, and we believe that regular communication is a critical part of our long-term success. Through these activities, we discuss and receive input, provide additional information, and address questions on our corporate governance, our executive compensation programs, and other topics of interest to our shareholders, such as our global CSR program. We also closely monitor policy statements and areas of focus for shareholders. These engagement efforts allow us to better understand our shareholders’ priorities and perspectives and provide us with useful input concerning our compensation and corporate governance practices. We are committed to:
Accountability. Drive and support leading corporate governance and board practices to ensure oversight, accountability, and good decision making.
| ► | Accountability. Drive and support leading corporate governance and board practices. |
Transparency. Maintain high levels of transparency on a range of financial, governance, and CSR issues to build trust and sustain two-way dialogue that supports our business success.
| ► | 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 stakeholder groups in dialogue on a range of topics to identify emerging trends and issues to inform our thinking and approach.
| ► | 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. As we continued our shareholder engagement program again in 2020, beginning in the fall, our Lead Independent Director and General Counsel met individually with shareholders representing approximately 20% of our total shares outstanding, as well as proxy advisory firms, and discussed topics such as our board refreshment and composition, our board evaluation process, our boardroom and company culture, our executive compensation programs, and our global CSR program. The Lead Independent Director shared the feedback gained from these meetings with the full Board and the Governance Committee, as well as compensation-specific feedback with the Compensation Committee. We actively engage with our shareholders on a year-round basis.
We have been responsive to shareholder feedback. In recent years, we have taken a number of actions to strengthen our governance and global CSR program and enhance the disclosure of our practices. For example, the Board voluntarily adopted proxy access, amended our By-Laws to implement a majority voting standard in uncontested director elections, and added a director skill-set matrix to this Proxy Statement to describe each director’s qualifications. The Company also enhanced its CSR disclosure by preparing an Impact Report and publishing it on our corporate website at footlocker.com/corp. These examples evidence our continued commitment to remain responsive on a variety of shareholder concerns. Please continue to share your thoughts or concerns at any time. The Board has established a process to facilitate communication by shareholders with the Board, described below.
![[GRAPHIC]](https://files.docoh.com/DEF 14A/0001539497-21-000440/n381625_img070.jpg)
Summer • Board reviews the voting results of the Company’s annual shareholders’ meeting. • Board reviews governance trends and key topics from the proxy season and peer company practices. Fall • We contact shareholders and proxy advisors to engage in conversations and listen to their concerns and other feedback on our governance and compensation practices. • Our Lead Independent Director shares engagement feedback with the Board. Winter • The Board uses the feedback from our engagement meetings in its review of governance and compensation practices for the coming year. • We begin drafting the Proxy Statement and consider disclosure improvements based on the engagement feedback. Spring • We file our Proxy Statement and contact shareholders to answer any questions on the items being voted on at the annual meeting. • We hold our annual meeting. Annual Meeting
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Corporate Governance
Communications with the Board
Shareholders and other interested parties who wish to communicate directly with the independent directors of the Board should send a letter to the Board, c/o Secretary, Foot Locker, Inc., 330 West 34th Street, New York, New York 10001.
The Secretary will promptly send a copy of the communication to the Lead Independent Director, who may direct the Secretary to send a copy of the communication to the other independent directors and may determine whether a meeting of the independent directors should be called to review the communication.
A copy of the Procedures for Communications with the Board is available on the corporate governance section of our corporate website at footlocker.com/corp. You may obtain a printed copy of the procedures by writing to the Secretary at the Company’s headquarters.
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 their resignation for consideration by the Governance Committee. The Governance Committee will make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The director who tenders his or her resignation will not participate in the Committee’s or the Board’s decision. In determining its recommendation to the Board, the Governance Committee will consider all factors that it deems relevant. Following such determination, the Company will promptly publicly disclose the Board’s decision, including, if applicable, the reasons for rejecting the tendered resignation.
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, par value $0.01 per share (“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.
Rights Plan
In December 2020, the Board adopted a short-term shareholder rights plan intended to protect the interests of all of the Company’s shareholders by reducing the likelihood that any person would gain control of the Company through open market accumulation or other tactics without appropriately compensating the Company’s shareholders for such control. The rights plan provides that the rights will only become exercisable if a person acquires beneficial ownership of 20% or more of the Common Stock. Under the terms of the rights agreement, the rights expire on December 7, 2021.
28WHO WE ENGAGE
| Foot Locker, Inc. | |
Corporate Social Responsibility
Our commitment to Corporate Social Responsibility—built on a strong foundation of transparency, governance, and ethics—creates value for Foot Locker, Inc. and our stakeholders. Our stakeholders increasingly want to know that the company they are buying from, investing in, working for, or doing business with, is not only delivering strong financial returns, but also acting responsibly. They look to companies like ours to be good corporate citizens that value their team members, give back to the communities they serve in meaningful ways, and actively address the environmental impact of their operations.
The way in which we achieve our purposeis just as important as the outcome itself–which is why, over the past three years, we have been on a purposeful journey to improve the environmental and social impacts of our business, measure the impact we are making, and communicate with our stakeholders.
Our global CSR program is focused on the following four pillars:
1 Leveraging the Power of Our People and Communities 2Strengthening the Sustainability of Our Supply Chain 3 Managing and Reducing Our Environmental Impacts 4 Operating Ethically and Transparently
CSR is not a separate mandate for Foot Locker, Inc.; it is embedded in our ability to achieve our strategic imperatives.
Our global CSR program is part of the fabric of who we are and reflects our core values.
Integrity | Leadership | Excellence | Service | Team Work | Innovation | Community | | | | | | | | Act honestly,
ethically,During the 2021–22 season, our Lead Independent Director, General Counsel, and
honorably. | Respect, inspire,
develop and
empower. | Strive to be the
best in everything
we do. | Satisfy head of our
customers every
time. | Collaborate, trust,
support, commit. | Be a student global ESG leadership team will have met individually with shareholders representing approximately 30% of
the business to
initiate and foster
new ideas. | Embrace diversity;
act responsibly
for our customers,
associates, investors
and communities.
|
Working collaboratively with our vendor partners, we look to integrate sustainability into our everyday actions.
Helping to fight climate change and reduce our carbon footprint
The Governance Committee oversees our global CSR program and the Board receives updates from the Governance Committee Chair throughout the year.total shares outstanding, as well as proxy advisory firms.
| 2021 Proxy Statement | 29TOPICS OF ENGAGEMENT
|
Corporate Social Responsibility
We have been recognized for our global CSR program: 2018 Winner of NACD NXT Recognition Award for Board Diversity 2018 Ranked No. 4 Forbes’ 50 Most Engaged Customer List 2019 Top 50 Top-Rated Workplace 2019 2018 2017 2016 Fortune Magazine 100 Best Workplaces for Diversity 2019 2018 2017 Named Best Workplaces for Diversity 2019 2018 2017 Named Best Workplaces in Retail 2019 2018 2017 Named Best Workplaces in New York 2020 Named Best Workplaces in Chicago
These six key elements
guide our CSR program:
PERFORMANCE IMPROVEMENT IDENTIFY PRIORITY ESG ISSUES STRATEGIC ALIGNMENT BOARD OVERSIGHT POLICIES AND INITIATIVES METRICS AND GOALS CSR PROGRAM
We recognize that this is a journey. We view reporting as an ongoing process and expect our public disclosures to continue to evolve. We are fully committed to building on our progress and strengthening our vision for a more sustainable world. This year, we arrived at an important milestone in our journey as we published our inaugural Impact Report covering two fiscal years (2019-20), which provides details on our global CSR program, consistent with the SASB and TCFD reporting standards, including our priority initiatives during this period and our performance on key ESG topics. To learn more about our global CSR program, please see our Impact Report on our corporate website at footlocker.com/corp.
30
| Foot Locker, Inc. | |
Our Purpose To inspire and empower YOUTH CULTURE Our Mission To fuel a shared passion for self-expression Our Vision To create unrivaled experiences for our consumers Our Position To be at the heart of the sport and sneaker communities 2021 Proxy Statement 31
Board of Directors
The Board has delegated certain duties to 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 Board has adopted charters for each of the Audit Committee, the Compensation Committee, the Finance Committee, and the Governance Committee. Copies of the charters for these committees are available on the corporate governance section of our corporate website at footlocker.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 assignments on a staggered basis is desirable and provides an opportunity to foster diverse perspective and develop breadth of knowledge within the Board. In May 2020, Mr. Oakland rotated off the Compensation Committee to the Finance Committee, Mr. Marmol rotated off the Finance Committee to the Compensation Committee, and Ms. Underhill rotated off the Finance Committee to the Governance Committee.
| ► | 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 shares the feedback gained from our shareholder engagement meetings with the Board and the Responsibility Committee, as well as compensation-specific feedback with the 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 disclosure. For example, the Board voluntarily adopted proxy access, amended our By-Laws to implement a majority voting standard in uncontested director elections, and added the Director Nominees’ Skillset Matrix to this Proxy Statement to describe each director’s qualifications. The Company also enhanced its ESG disclosure by publishing an Impact Report, which is presented consistent with the SASB 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 variety of shareholder concerns. Please continue to share your thoughts or concerns at any time. The Board has established a process to facilitate shareholder communications with the Board, described below. 38 | Foot Locker, Inc. | |
GOVERNANCE COMMUNICATIONS WITH THE BOARD Shareholders and other interested parties who wish to communicate directly with the independent directors of the Board should send a letter to the Board. The Procedures for Communications with the Board are 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 our Secretary to send a copy of the communication to the other independent directors and may determine whether a meeting of the independent directors should be called to review the communication. 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 their resignation for consideration by the Responsibility Committee. The Responsibility Committee will make a recommendation to the Board whether to accept or reject the resignation, or take other action. The director who tenders their resignation will not participate in the Responsibility Committee or Board’s decision. In determining its recommendation to the Board, the Responsibility Committee will consider all factors that it deems relevant. Following such determination, the Company will promptly publicly disclose the Board’s decision, including, if applicable, the reasons for rejecting the tendered resignation. PROXY ACCESS Under our proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning at least 3% of the 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. 
| 2022 Proxy Statement | 39 |
Our 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 Company’s purpose to inspire and empower youth culture.culture. |
The key oversight responsibilities of the committees, the current committee memberships, and the number of meetings held during 2020 are as follows:
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. 32The Board has adopted charters for each of the Audit Committee (investors.footlocker-inc.com/audit), Finance Committee (investors. footlocker-inc.com/finance), Human Capital Committee (investors.footlocker-inc.com/comp), and Responsibility Committee (investors.footlocker-inc.com/gov).
As a general principle, the Board believes that the periodic rotation of committee and committee chair assignments on a staggered basis provides opportunities to foster diverse perspectives, develops further the depth and breadth of knowledge within the Board, and prepares the Board for future director succession. In May 2021, Mr. McKenna rotated off as Chair of the Finance Committee, and was replaced by Mr. Oakland, and Mr. Oakland rotated off as Chair of the Responsibility Committee, and was replaced by Mr. Payne. In February 2022, Ms. Drosos was added to the Audit and Finance Committees. 
40 | Foot Locker, Inc. | |
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| The key oversight responsibilities of the committees, the current committee memberships, and the number of meetings held during 2021 are as follows: |
 | AUDIT | 2021 Proxy Statement | 33GUILLERMO G.
MARMOLChair
| Other Members:
Drosos, McKenna, Nicosia,
Payne, and Young | 9 meetings in 2021 |
| | | | | | | | |
KEY OVERSIGHT RESPONSIBILITIES
AUDIT Chair Guillermo G. Marmol Other Memb ers McKenna, Nicosia, Payne, Young 9 meetings in 2020 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 Code of Business Conduct • establishes procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, and auditing matters This committee consists of five 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 Audit Committee Report appears on page 85. COMPENSATION Chair Kimberly Underhill Other Members Clark, Feldman, Marmol, Nicosia 6 meetings in 2020 Key Oversight Responsibilities • determines the compensation of the Chief Executive Officer • reviews and approves all compensation for the Company’s executive management group, which consists of the executive officers and corporate officers • responsible for decisions regarding equity compensation for other team members • assesses risk in relation to the Company’s compensation policies and practices • administers the Company’s various compensation plans, including the incentive plans, the equity-based compensation plans, and the 2013 Foot Locker Employees Stock Purchase Plan (the “ESPP”) (committee members are ineligible to participate in these compensation plans, except the Company’s 2007 Stock Incentive Plan (the “Stock Incentive Plan”)) • 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 This committee consists of five independent directors, as independence is defined under the NYSE rules applicable to compensation committee members. See the Compensation Discussion and Analysis beginning on page 41 for a discussion of the Compensation Committee’s procedures for determining compensation, and the Compensation Committee Report on page 60. Committees of the Board 34 Board of Directors
| ► | appoints the independent auditors |
FINANCE Chair Matthew M. McKenna Other Members Clark, Feldman, Oakland, Walker 5 meetings in 2020 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, 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 Approval process • reviews reports from the Retirement Plan Committee regarding the asset allocation and investment performance of the Company’s North America pension funds GOVERNANCE Chair Steven Oakland Other Members Payne, Underhill, Walker, Young 4 meetings in 2020 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 Chief Executive Officer and the Lead Independent Director, makes recommendations to the Board annually regarding committee members and committee chair assignments • oversees the annual self-assessment process for the Board and committees • reviews trends and governance with regard to nonemployee directors’ compensation • oversees global CSR program and public reporting Shareholders who wish to recommend candidates for Board membership may contact the Governance Committee in the manner described on page 28 under Communications with the Board. Shareholder nominations must be made according to the procedures required under, and within the timeframe described in, the By-Laws and under Deadlines and Procedures for Nominations and Shareholder Proposals on page 88. Shareholder-recommended candidates and shareholder nominees whose nominations comply with these procedures will be evaluated by the Governance Committee in the same manner as the Company’s nominees. EXECUTIVE Chair Richard A. Johnson Other Members Marmol, McKenna, Oakland, Underhill, Young 3 meetings in 2020 Key Oversight Responsibilities • shares all of the powers of the Board during intervals between Board meetings, except for certain matters reserved to the Board 2021 Proxy Statement 35 Board of Directors
| ► | approves the independent auditors’ compensation |
| ► | assists the Board in fulfilling its oversight responsibilities in the following areas: |
![[GRAPHIC]](https://files.docoh.com/DEF 14A/0001539497-21-000440/n2494img34-35.jpg)
| ► | 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 |
| ► | the qualifications, independence, and performance of the independent auditors |
| ► | the qualifications, performance, and compensation of the internal auditors |
| ► | reviews and monitors compliance with the Code of Business Conduct |
| ► | establishes procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting and audit controls, and auditing matters |
Board of Directors
Director Compensation
This discussion relates to the compensation we pay to non-employee directors. We do not pay additional compensation for service on the Board or any committee to any director 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:
| ► | 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. 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. SeeAudit Committee Report Benchmarking Approach appears on page 57 for more information on our peer group.101. | | | |  | EXECUTIVE RICHARD A.
JOHNSONChair | Other Members:
Marmol, Oakland, Payne,
Underhill, and Young | No meetings in 2021 | | | | | | | | | Pay Evaluation Perspective | When assessing the competitive position of our outside directors’ compensation program, the primary focus is on total targeted compensation opportunity. |
KEY OVERSIGHT RESPONSIBILITY | ► | shares all of the powers of the Board during intervals between Board meetings, except for certain matters reserved to the Board | Pay Mix |
| | | |  | FINANCE STEVEN
OAKLANDChair | Other Members:
Drosos, Feldman, McKenna,
and Walker | 5 meetings in 2021 | | | | | | | | |
Our outside directors’ compensation programKEY 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 budget for, and policies related to, capital |
| ► | 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 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
UNDERHILLChair | Other Members:
Feldman, Marmol, and Nicosia
| 4 meetings in 2021 | | | | | | | | |
KEY OVERSIGHT RESPONSIBILITIES | ► | determines the CEO’s compensation |
| ► | 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 |
This committee consists of a balance of cash and equity, with an emphasis on equity over cash. four independent directors, as independence is defined under the NYSE rules applicable to compensation committee members. See the CD&AComponents of Director Compensation Program beginning on page 3750 for further information.a discussion of the Human Capital Committee’s procedures for determining compensation, and the Human Capital Committee Report on page 69. | | | |  | RESPONSIBILITY ULICE
PAYNE, JR.Chair | Other Members:
Oakland, Underhill, Walker,
and Young | 4 meetings in 2021 | | | | | | | | | Differentiation | |
The outsideKEY 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 CEO and Lead Independent Director, makes recommendations to the Board annually regarding both committee and committee chair assignments |
| ► | reviews trends and governance with regard to nonemployee directors’ compensation |
| ► | oversees the Company’s ESG initiatives and reviews and considers related public reporting, including the Company’s annual Impact Report, and the role of ESG in the 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 under Deadlines 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. 42 | Foot Locker, Inc. | |
BOARD OF DIRECTORS DIRECTOR COMPENSATION This discussion relates to the compensation provideswe pay to non-employee directors. We do not pay additional compensation to any director for leadership positionsservice on the Board including non-executive chair, lead independent director, andor any committee chair roles. Seewho is also a Company employee. KEY PRINCIPLES OF DIRECTOR COMPENSATION PROGRAMComponents of Director Compensation Programbeginning on page 37 The Company compensates its non-employee directors for further information. | 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 Guidelinesbeginning on page 23. | Deferral Opportunities | Outside directors are provided with the opportunity to defer compensation by making additional investments in our Common Stock on an elective basis. See Deferral Opportunities on page 37 for further information. | Total Compensation Limits | Meaningful limits on outside directors’ compensation have been established to ensure consistency with sound governance practices. See Components of Director Compensation Programbeginning on page 37 for further information. | Regular Review | The Governance 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,their service according to the Board. 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 65 for more information on our peer group. | | 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 equity, with an emphasis on equity over cash. See Components of Director Compensation Program on page 44 for further information. | | Differentiation | The outside directors’ compensation provides additional compensation for leadership positions on the Board, including lead independent director and committee chair roles. See Components of Director Compensation Program on page 44 for further information. | | 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 form of DSUs or to have these amounts placed in an interest account. Directors may also elect to receive all or a portion of the stock component of their annual retainer fee in the form of DSUs. Beginning in 2022, directors may also elect to receive all or a portion of their RSU awards in the form of DSUs. | | 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 Board. The Human Capital Committee conducts regular reviews of our outside directors’ compensation program and makes recommendations to the Board regarding the amount and form of directors’ compensation each year. |
| 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: 36
| Foot Locker, Inc.| Fee | Amount | Form of Payment | | Annual Retainer | $150,000 | | | Committee Chair Retainer | | | | 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) |
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 Independent 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 team member for service on the Board or any committee.
Below is a summary of the fees paid to the non-employee directors in 2020:
| (1) | Directors may defer all or a portion of the fee in the form of DSUs or have these amounts placed in an Interest Account. |
| (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 and committee meetings, other meetings with management, and continuing education programs, including transportation, hotel accommodations, and meals. |
| (4) | Beginning in 2022, directors may defer all or a portion of the RSU awards in the form of DSUs. |
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. Fee | | Amount | Annual Retainer* | | $150,000 payable 50% in cashFor all compensation periods through and 50% in Common Stock. We calculateincluding fiscal 2021, six of our 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 numbercurrent directors have elected to place any amount of shares paid to the directors for their annual retainer by dividing their retainer fee by the closing price of a share of Common Stock on the last business day preceding the July stock payment date. | Committee Chair | | $25,000: | | Audit Committee Chair | Retainers* | | $25,000: | | Compensation Committee Chair | | | $15,000: | | Finance Committee Chair | | | $15,000: | | Governance Committee Chair | | | The committee chair retainers are paid in the same form as the annual retainer. | Lead Independent
Director Retainer* | | $50,000 payable in cash. | Meeting Fees* | | $2,000, payable in cash, for attendance at each Board and Committee meeting. | RSUs | | RSUs valued at $70,007 awarded to continuing directors following the 2020 Annual Meeting. In May 2020, each director receivedfees into an award of 2,472 RSUs. The number of RSUs granted was calculated by dividing $70,000 by the closing price of a share of Common Stock on the grant date ($28.32). The RSUs will vest in May 2021, one year following the grant date, provided that the director continues to serve on the Board through the vesting date. Each RSU represents the right to receive one share of Common Stock on the vesting date. No dividends are paid or accrued on the RSU awards. |
interest account. * | DueGOVERNANCE The Human Capital Committee and Responsibility Committee jointly oversee our non-employee director compensation program, conduct annual reviews, and make recommendations for adjustments, as appropriate, to the business disruption caused by COVID-19,Board. The Responsibility Committee reviews trends and governance with regard to non-employee directors’ compensation. Following consultation with the Board suspendedResponsibility Committee, the cash elements of their director compensation from May 3, 2020 through August 31, 2020. This reduced compensation was not made up when it was reinstated in September 2020. |
Non-employee directors’ compensation, inclusive of cash and equity, is capped at $600,000 per fiscal year for each non-employee director. 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 are eligible to receive the same discount on purchases of merchandise from our stores, catalogs, and websites that is available to team members.
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 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. For all compensation periods through and including 2020, three of our current directors, and Ms. Turpin, who retired in May 2020, 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.
Governance
The Governance Committee and Compensation Committee jointly oversee our non-employee director compensation program, and conduct annual reviews and make recommendations for adjustments, as appropriate, to the Board. The Governance Committee reviews trends and governance with regard to non-employee directors’ compensation. Following consultation with the Governance Committee, the CompensationHuman Capital Committee reviews non-employee directors’ compensation and makes recommendations to the Board concerning the form and amount of non-employee directors’ compensation.
| In connection with the review conducted in fiscal year 2021, Proxy Statement | 37
|
Board of Directors
In connection with the review conducted in fiscal year 2020, the outside consultant on director compensation retained by the Compensation Committee 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. No changes were made to the non-employee director compensation program as a result of the review conducted in 2020 because the program was competitive with the Company’s peer group median and non-employee director compensation was not expected to increase in the near term given the impact of the COVID-19 pandemic on business results.the outside compensation consultant 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. Following this review, no changes were made to the non-employee director compensation program in 2021 because the program was competitive with the Company’s peer group median. Other aspects of the program, including the mix of cash and equity, were found to be aligned with industry norms and best practices.
Fiscal 2020 Director Compensation
The amounts paid to each non-employee director for fiscal 2020, including amounts deferred under the Stock Incentive Plan, and the RSUs granted to each director are reported in the tables below:
| (a) | | (b) | | (c) | | (d) | | Name | | Fees Earned
or Paid in
Cash* ($) | | Stock Awards
($)(1) | | Total
($) | | Clark | | 90,250 | | 145,007 | | 235,257 | | Feldman | | 90,250 | | 165,672 | | 255,922 | | Marmol | | 109,645 | | 157,487 | | 267,132 | | McKenna | | 109,891 | | 152,501 | | 262,392 | | Nicosia | | 92,020 | | 138,737 | | 230,757 | | Oakland | | 103,875 | | 154,514 | | 258,389 | | Payne | | 94,250 | | 145,007 | | 239,257 | | Turpin(2) | | 28,520 | | 49,999 | | 78,519 | | Underhill | | 103,645 | | 157,487 | | 261,132 | | Walker | | 84,020 | | 138,737 | | 222,757 | | Young | | 121,000 | | 211,940 | | 332,940 |
44 | Foot Locker, Inc. | |
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 director are reported in the tables below: (a)
Name | (b)
Fees Earned
or Paid in
Cash
($) | (c)
Stock
Awards
($)(1) | (d)
Total
($) | | 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 |
* | Due to the business disruption caused by COVID-19, the Board suspended the cash elements of their director compensation from May 3, 2020 through August 31, 2020. This reduced compensation was not made up when it was reinstated in September 2020. |
Notes to Director Compensation Table
| (1) | Column (c) reflects the following three items: |
| (A) | the grant date fair value determined in accordance with FASB ASC 718 for the portion of a director’s annual retainer fees (including committee chair retainer fees) for fiscal year 2020 paid in shares of Common Stock (including any portions deferred in the form of DSUs under the Stock Incentive Plan) ($29.16 per share representing the closing price of a share of Common Stock on June 30, 2020) | (A) | the grant date fair value determined in accordance with FASB ASC 718 for the portion of a director’s annual retainer fees (including committee chair retainer fees) for fiscal year 2021 paid in shares of Common Stock (including any portions deferred in the form of DSUs under the Stock Incentive Plan) ($61.63 per share representing the closing price of a share of Common Stock on June 30, 2021). Such shares of Common Stock are fully vested on grant, regardless of whether deferred into DSUs. |
| (B) | the grant date fair value determined in accordance with FASB ASC 718 for RSUs granted in fiscal year 2020 ($28.32 per share representing the closing price of a share of Common Stock on the grant date). The RSUs will vest in May 2021. | (B) | the grant date fair value determined in accordance with FASB ASC 718 for RSUs granted in fiscal year 2021 ($61.67 per share representing the closing price of a share of Common Stock on the grant date). In May 2021, each director received an award of 1,136 RSUs. The number of RSUs granted was calculated by dividing $70,000 by the closing price of a share of Common Stock on the grant date. The RSUs will vest in May 2022, provided the director continues to serve on the Board through the vesting date. Each RSU represents the right to receive one share of Common Stock on the vesting date. No dividends are paid or accrued on the RSU awards. The amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. |
| (C) | 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 Walker, and Mses. Nicosia and Young ($58.98 per share for DSUs granted on April 30, 2021, $57.06 per share for DSUs granted on July 30, 2021, $47.67 per share for DSUs granted on October 29, 2021, and $44.43 per share for DSUs granted on January 28, 2022, representing the closing price of a share of Common Stock on the quarterly payment date). Such additional DSUs are fully vested on grant. |
| 2022PROXY STATEMENT | 45 |
BOARD OF DIRECTORS The following table sets forth the grant date fair value determinedof the above stock awards granted to our directors in accordance with FASB ASC 718, for dividend equivalents paid on DSUs and credited in the form of additional DSUs, made to Messrs. Feldman and Oakland and Mmes. Turpin and Young ($23.83 per share for DSUs granted on May 1, 2020, $36.88 per share for DSUs granted on October 30, 2020, and $43.82 per share for DSUs granted on January 29, 2021, representing the closing price of a share of stock on the quarterly payment date). Such additional DSUs are fully vested on grant. |
The following table sets forth the grant date fair value of the above stock awards granted to our directors in fiscal year 2020:
| Name | | Stock Fees
($) | | RSUs
($) | | DSUs
($) | | Total
($) | | Clark | | 75,000 | | 70,007 | | — | | 145,007 | | Feldman | | 75,000 | | 70,007 | | 20,665 | | 165,672 | | Marmol | | 87,480 | | 70,007 | | — | | 157,487 | | McKenna | | 82,494 | | 70,007 | | — | | 152,501 | | Nicosia | | 68,730 | | 70,007 | | — | | 138,737 | | Oakland | | 82,500 | | 70,007 | | 2,007 | | 154,514 | | Payne | | 75,000 | | 70,007 | | — | | 145,007 | | Turpin(2) | | 31,230 | | — | | 18,769 | | 49,999 | | Underhill | | 87,480 | | 70,007 | | — | | 157,487 | | Walker | | 68,730 | | 70,007 | | — | | 138,737 | | Young | | 93,750 | | 70,007 | | 48,183 | | 211,940 |
fiscal year 2021: 38
| Foot Locker, Inc. | |
Board of Directors
For additional information on the valuation assumptions, refer to Note 20 to the Company’s financial statements in our 2020 Annual Report on Form 10-K.
As of the end of fiscal year 2020, the number of RSUs and DSUs held by our directors was as follows:
| | | Stock Fees | RSUs | DSUs | Total | | Name | | RSUs
(#) | | DSUs
(#) | ($) | | Clark | | 2,472 | | — | | | Clark(2) | | 31,246 | — | 31,246 | | Feldman | | 2,472 | | 30,000 | 74,942 | 70,057 | 30,202 | 175,201 | | Marmol | | 2,472 | | — | 87,453 | 70,057 | — | 157,510 | | McKenna | | 2,472 | | — | 78,085 | 70,057 | — | 148,142 | | Nicosia | | 2,472 | | — | 74,942 | 70,057 | 18,750 | 163,878 | | Oakland | | 2,472 | | 4,529 | 82,500 | 70,057 | 5,636 | 158,193 | | Payne | | 2,472 | | — | 79,637 | 70,057 | 1,039 | 150,733 | | Turpin(2) | | — | | 17,475* | | | Underhill | | 2,472 | | — | 87,453 | 70,057 | — | 157,510 | | Walker | | 2,472 | | — | 75,000 | 70,057 | 978 | 146,035 | | Young | | 2,472 | | 71,794 | 131,250 | 70,057 | 74,071 | 275,378 |
(2) | Ms. TurpinClark served as a director of the Company during 20202021 until her retirement from the Board in May 2020. In connection with her retirement, Ms. Turpin received payment of 30,235 DSUs2021.For additional information on June 1, 2020the valuation assumptions, refer to Note 21 to the Company’s financial statements in our Annual Report, which is available at investors. footlocker-inc.com/ar. As of the 47,710end of fiscal year 2021, the number of RSUs and DSUs she held by our directors were as follows: | | 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 |
46 | Foot Locker, Inc. | |
BOARD OF DIRECTORS 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. 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. | 2022PROXY STATEMENT | 47 |
In accordance with the requirements of Section 14A of the Exchange Act and the related SEC rules, our shareholders have the opportunity to cast an annual non-binding, advisory vote to approve the compensation of our NEOs, as disclosed beginning on page 50 (a “Say-on-Pay” vote). We currently hold our “Say-on-Pay” vote every year. As described in connectiondetail in the CD&A beginning on page 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 executives with her prior elections.the interests of our shareholders. The higher an executive’s position, the greater percentage of their compensation is tied to performance. “Say-on-Pay” received nearly 96% support at last year’s annual meeting. The Human 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 70, in determining whether to vote in favor of this proposal. Shareholders are being asked to approve the following 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 Annual Meeting pursuant to the SEC’s compensation disclosure rules, including the CD&A, the 2021 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. | 2022PROXY STATEMENT | 49 |
COMPENSATION DISCUSSION AND ANALYSIS This CD&A describes our compensation philosophy and objectives, provides context for compensation decisions for our NEOs, and describes how our 2021 compensation is linked to performance against the goals that were established for the Annual Incentive Plan and LTI. For 2021, our NEOs were as follows:  |  |  |  |  | | | | | | | RICHARD A. | ANDREW E. | FRANKLIN R. | W. SCOTT | ANDREW I. | | JOHNSON | PAGE(1) | BRACKEN(2) | MARTIN(3) | GRAY | | | | | | | Chairman, | 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 | | | | Officer | |
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.
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), Continental Casualty Company (CNA), Freedom Specialty Insurance Co. (Nationwide), Arch Insurance Co., Argonaut Insurance Co. (ARGO RE), Beazley Insurance Company, Inc., QBE Insurance Corporation, Berkley Insurance Co., Chubb Bermuda Ins Ltd. (Chubb), Markel American Insurance Company, National Union (AIG) and Endurance American Insurance Co. (Sampo International). 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 its covered subsidiaries. The policies were written for a term of 12 months, from October 12, 2020 until October
| (1) | Mr. Page joined the Company as Executive Vice President and Chief Financial Officer on April 12, 2021. The total annual premium for these policies, including fees and taxes, is $1,496,256. Directors and officers of the Company, as well as all other team members 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., Continental Casualty Company (CNA), Beazley Insurance Company, Inc., ACE American Insurance Co. (Chubb), and Endurance American Insurance Co. (Sampo International) which have a total premium, including fees and taxes, of $406,000 for the 12-month period ending October 12, 2021. | 2021 Proxy Statement | 39
|
Proposal 2: Advisory Approval of Executive Compensation
| (2) | Mr. Bracken served as Executive Vice President and Chief Executive Officer—North America until November 15, 2021, and was promoted to Executive Vice President and Chief Operating Officer, effective November 16, 2021. |
The Board is asking our shareholders to approve, on a non-binding, advisory basis, the compensation of our NEOs, as described beginning on page 41. 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 under the CD&A beginning on page 41, 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 NEOs with the interests of our shareholders. The more senior an executive’s position, the greater portion of their compensation is tied to performance.
At the 2020 Annual Meeting, nearly 95% of the votes cast on the advisory vote to approve the compensation of our NEOs were voted in favor of the proposal. The Compensation Committee believes this affirms our shareholders’ support for the Company’s approach to executive compensation. We believe you should read the CD&A and the compensation tables beginning on page 41 in determining whether to approve this proposal.
The Board recommends approval of the following resolution:
“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 2021 Annual Meeting pursuant to the SEC’s compensation disclosure rules, including the CD&A, the 2020 Summary Compensation Table, and the other related tables and disclosures.”
The Board recommends a vote FOR Proposal 2.
40
| Foot Locker, Inc. | |
Executive Compensation
Compensation Discussion and Analysis
This CD&A describes our compensation philosophy and objectives, provides context for compensation decisions for our NEOs, and describes how our 2020 compensation is linked to performance against the goals that were established for the annual and long-term incentive compensation programs. For 2020, our NEOs were as follows:
Johnson Chairman, President and Chief Executive Officer Lauren B. Peters* Executive Vice President and Chief Financial Officer Executive Vice President and CEO—EMEA Vijay Talwar W. Scott Martin Executive Vice President and CEO—Asia Pacific and Chief Strategy and Development Officer Executive Vice President and
* | On November 30, 2020, Ms. Peters announced her intention to retire as Executive Vice President and Chief Financial Officer. Ms. Peters will continue to serve as Chief Financial Officer until her successor assumes the role, and she will remain an employee of the Company until her expected retirement on May 1, 2021.| (3) | W. Scott Martin served as Executive Vice President and Chief Executive Officer—Asia Pacific and Chief Strategy and Development Officer until November 15, 2021, President—Asia Pacific from November 16, 2021 through March 17, 2022, and Executive Vice President, Chief Strategy and Corporate Development Officer, effective March 18, 2022. |
We made several strategic organizational changes in 2020 designed to foster greater agility and speed-to-act as the Company continues to advance its key strategic imperatives. Mr. Gray assumed the new role of Executive Vice President and Chief Commercial Officer, effective July 22, 2020, to lead the Company’s efforts to elevate the customer experience across the globe, including product, brand, digital, customer connectivity, global market planning, and store development (he previously served as Vice President and Chief Merchandising Officer). Mr. Martin assumed the role of Executive Vice President and Chief Executive Officer—Asia Pacific, effective July 22, 2020, in addition to his responsibilities as Chief Strategy and Development Officer, in light of Lewis Kimble’s retirement. Stephen D. Jacobs, also an NEO, served as Executive Vice President and Chief Executive Officer—North America until July 22, 2020, and departed from the Company on August 31, 2020. Franklin R. Bracken assumed the role of Executive Vice President and Chief Executive Officer—North America in light of Mr. Jacobs’s departure.
Table of Contents
42 | 2020 Year in Focus | 42 | Leading Through Challenges | 43 | 2020 Performance Highlights | 46 | Say-on-Pay Shareholder Vote | | | | LAUREN B. PETERS(4) | | VIJAY TALWAR(5) | | | | | Former Executive Vice President and | | Former Executive Vice President and | | Chief Financial Officer | | Chief Executive Officer─EMEA | | | | 46 | Compensation Program Design and Structure |
| (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. | 46 | Components of Executive Compensation Program |
| (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. | 47 | Base Salary | 48 | Annual Incentive Plan | 50 | LTI Program | 53 | Stock Options and RSUs | 53 | AFG | 55 | Retirement Plan and Excess Cash Balance Plan | 55 | 401(k) Plan and Excess Savings Plan | 55 | Supplemental Executive Retirement Plan | 55 | International Assignment Compensation | 55 | Perquisites | 55 | Employment Agreements |
56
50 | Foot Locker, Inc. | | 58 | Additional Information | 58 | Key Compensation Governance Policies | 59 | Compensation Plans and Risk | 60 | Delegation of Authority | 60 | Accounting and Tax Considerations of Executive Compensation |
|
| 2021 Proxy Statement | |
Executive Compensation
2020 Year in Focus
2020 started with great promise—a strong global economic outlook and the expectation of delivering continued progress against our strategic imperatives. Then COVID-19 emerged. Within weeks of the new fiscal year, the global pandemic began to impact our business, first in Asia Pacific and with our supply chain and then, by late February, in EMEA. In mid-March, we began temporarily closing all of our brick-and-mortar stores across all of our brands around the globe in response to government restrictions and the concern for the health and safety of our team members and customers. At that time, it was uncertain how long our stores would remain closed and, virtually overnight, we transitioned from a predominantly brick-and-mortar to a completely digital business. Management also had a new challenge in managing a completely remote workforce with many unknowns ahead.
After an extended period of store closures with a phased reopening beginning in late April, as the economies around the globe began a slow reopening process, a social justice challenge arose at the end of May. Some of the social unrest that ensued led to the damage of some of our stores. The social unrest struck at the hearts and souls of our customers and our team members. This movement became a rallying cry for the Company and, in June, we announced our LEED initiative, the Company’s commitment to invest $200 million over five years towards enhancing the lives of our team members and our customers in the Black community through economic development and education.
Leading Through Challenges
Recognizing the unprecedented business disruption caused by COVID-19 and social unrest during 2020, management and the Compensation Committee remained focused on our three primary stakeholder groups:
Shareholders Community Team Members
Early on, the Compensation Committee recognized that the events unfolding during 2020 were unpredictable and reacted quickly based on the information it had available at the time. Beginning with the Committee’s meeting in March, it decided that, due to the uncertainty ahead, it was prudent to postpone setting targets for the Annual Incentive Plan and the Long-Term Incentive Plan (“LTIP”) rather than resetting targets in flight. The Committee, recognizing that circumstances were fluid, held an increased number of meetings during 2020, allowing it to react thoughtfully and appropriately to events as they were transpiring in the business. In mid-April, at one of two special Committee meetings, management recommended, and the Committee approved, a variety of actions to address the sudden reduction in sales, resulting in large part from the ongoing government restrictions leading to store closures, including reducing executive salaries beginning in May as follows:
Chief Executive Officer salary reduction of 40%;
Executive Vice Presidents and Senior Vice Presidents salary reduction of 20%; and,
Corporate Vice Presidents and General Manager-level roles salary reduction of 10%.
Additionally, except for promotions, no one in senior management received a merit or cost of living increase for 2020. Other team members did receive merit increases, albeit effective in August instead of the typical May annual cadence. The Board also suspended the cash elements of non-employee director compensation beginning in May. These reduced salaries and director compensation were not made up when prior compensation levels were later reinstated in September.
The Company also deferred 2019 bonus payments indefinitely. 2019 bonuses were paid later in July for all Corporate Vice Presidents and General Manager-level roles, and in August for the Chief Executive Officer and all Executive Vice Presidents and Senior Vice Presidents.
By May, certain parts of the world began to slowly reopen their economies. At the Compensation Committee meeting in May, management began the discussion about setting an Annual Incentive Plan for 2020, with the goals of stabilizing the business and positioning it to emerge in a position of strength in 2021. With these goals in mind, management recommended using sales as a financial metric in 2020, instead of profit. The Compensation Committee met with Management, the Company’s compensation consultant, and the Compensation 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
42FISCAL 2021 HIGHLIGHTS
| Foot Locker, Inc. | |
Executive Compensation
FINANCIAL PERFORMANCE 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: 
compensation program, and the pay-for-performance correlation in the program and the changes to the program recommended by the management and the consultants. Sales were viewed as the best financial metric to ensure we ended 2020 with a fresh inventory position. This cadence aligned with revenue increases tied to the reopening of our stores and the acceleration of digital sales. We believe this decision benefited our team members, the communities we serve, and our shareholders because it focused the Company on reopening stores, putting our team members back to work, and driving sales.
Customer focus also remained a key component of the Annual Incentive Plan with Net Promoter Score (“NPS”) confirmed as the metric to evaluate the customer experience. This benefitted the communities we serve because NPS allowed us to keep our finger on the pulse of our customers and to focus on the overall customer experience. After carefully reviewing these changes, in June, the Committee approved the 2020 Annual Incentive Plan with sales and NPS goals. We believe the 2020 Annual Incentive Plan reinforced our focus on sales and the customer experience, which was appropriate for this unprecedented year.
In November, following management’s strategic review sessions and preparation of preliminary financial plans, the Committee approved the 2020-21 LTIP performance targets based on Net Income and Return on Invested Capital (“ROIC”), which reflect the same metrics historically used in the LTIP.
2020 Performance Highlights
Management proactively addressed the many challenges of 2020 with resolve and agility, while learning how to thrive in the new environment. Management put the safety of our customers and team members first by following guidelines from local, state, and federal governments and agencies, ensuring the safety of our customers and team members around the globe.
Despite the unprecedented business disruption caused by COVID-19, particularly given the store closures during the first quarter, we drove strong sales volume in 2020 once stores were reopened during the second quarter. Highlights include the following:
Sales of $7.5 billion $2.3 billion of liquidity (including $1.7 billion of cash and cash equivalents, the strongest financial position in our history) $3.08 per share earned net income ($2.81 per share on non-GAAP* basis) 63.5% growth in digital business to over $2 billion, representing 28% of sales Over $1 billion net cash provided by operating activities ($903 million free cash flow on non-GAAP* basis) $159 million invested in our business to drive future growth through our capital program $110 million returned to shareholders between share repurchase program and dividends
* | (1)A reconciliation to GAAP is provided beginning on page 1921 of our 2020 Annual Report, on Form 10-K. |
| 2021 Proxy Statement | which is available at 43investors.footlocker-inc.com/ar |
Executive Compensation
In addition, below are some highlights of the actions we took in 2020 to serve our three primary stakeholder groups.
• | Safety: Many of our stores are locatedOur 2021 compensation program, as outlined in communities that were disproportionately impacted by both COVID-19 and social unrest. As we began our reopening plans, itdetail in the following pages, was critical to ensure not only a safe shopping experience, but also one with continued alignmenttied to ourPurpose. We launched updated global customer experience selling behaviors. This strategy proved successful as our customer sentiment data reflects that more than 85% of our customers rated us a 5 out of 5 in their overall satisfaction with our ability to create a safe environment in which to shop. |
• | Digital Transformation: Prior to COVID-19, we knew our customer was evolving quickly and that digital connectivity was driving change, but the pandemic accelerated the rate of that change as customers shifted their buying patterns online. This is where the technology investments we made over the last several years truly paid off. We processed significantly higher digital order volumes while maintaining smooth and engaging shopping experiences across all our digital platforms and rewarding our customers through our new, but rapidly growing loyalty program, FLX. Our digital |
business had an exceptional year, generating sales growth of 63.5% to over $2 billion, and representing a record 28% of our total sales. In the coming year, we will continue to invest our capital in digital and data analytics to drive long-term performance.
• | Enhancing the Customer Experience: BOSS (buy on-line ship from store) and BOPIS (buy online pick up in store) efforts accelerated throughout the year. As we managed through local restrictions, the team developed a game plan that allowed us to ship BOSS orders from most stores, for most of the year. We had 700 doors with dedicated BOPIS pick-up areas for the holidays, and we tested a drive through pick-up option. |
• | Community-based Power Stores: While we reduced capital expenditures during the year to focus on cash preservation, we continued to invest in community-based Power Stores in Compton, California; Singapore; Vancouver, Canada; and other cities to better serve the communities where we do business. |
• | Corporate Social Responsibility: The events of 2020 elevated our CSR ambitions. During 2020, we committed $200 million over five years to support our Black workforce and communities through our LEED initiative. We also recently published our inaugural Impact Report to provide our stakeholders with details on our global CSR strategy and program, including our priority initiatives. We are fully committed to building on our progress and strengthening our vision for a more sustainable world. To learn more about our CSR program, please see the Fiscal Years 2019-20 Impact Report on our corporate website at footlocker.com/corp. |
• | Leveraging the Power of Our People: Looking at 2020 through the lens of our four strategic imperatives, the one imperative that proved truly exemplary despite the difficult backdrop was Leveraging the Power of Our People. Our corporate team members quickly adjusted to function at a high level in the new work-from-home environment. Our supply chain and call center teams maintained a strong focus to meet our customers’ needs. Our store teams adeptly tackled the huge lift of closing and reopening our large store fleet retrofitted for PPE and social distancing protocols |
while maintaining focus on the customer experience. We demonstrated what can be achieved in the face of adversity when our people—around the world and across the entire organization—unite together.
• | Workforce Retention: Management—guided by our company values—continued to pay team members for six weeks after we closed our stores until we made the difficult decision to implement an employee furlough program (or its equivalent under applicable local law) that applied to a majority of the Company’s store team members in the United States and Canada, and certain of its store team members in Australia and supply chain team members in the United States. We continued to pay our store team members for this extended period of time because we believed it was the right thing to do and would enhance the retention of our top talent. The Company began bringing back furloughed team members when operations could safely and responsibly resume in accordance with national, state, and local guidance related to the then-evolving COVID-19 pandemic. Furloughed team members continued to receive health and other benefits in accordance with the terms of the respective plans, |
44
| Foot Locker, Inc. | |
Executive Compensation
and, subject to local regulations, were also eligible for unemployment benefits. Since then, 100% of our furloughed team members have had the opportunity to return to work.
• | Recognition: The Committee also approved retention and recognition RSU grants for team members below the senior management level for added employment retention or to those who demonstrated extraordinary leadership during 2020. |
• | Flexibility and Empathy: Continuing to keep the workforce engaged and productive while working remotely, and for many having to balance home office needs, home schooling, job loss, and caring for family members, required leaders to be even more flexible and empathic with their teams. We |
implemented a number of wellbeing actions to provide team members with much-needed services, such as counseling; healthy living resources; referrals for child/elder care resources; financial wellbeing resources; emotional health resources; virtual physical therapy; a companywide paid day off for reflection; listening sessions for team members; a paid community service day; and a series of learning sessions to address current needs and topics.
• | Workforce Engagement Success: We conducted an engagement survey in late 2020 in which 85% of our global workforce (store and non-store team members) participated. Despite the challenges our team members faced personally and professionally, 80% of participants rated their experience at the Company favorably, a 5% increase over the prior year. |
• | Positive Business Results: Once economies started to reopen in the second quarter, we experienced significant growth, quarter over quarter, in sales. Despite the ongoing pandemic and the social unrest, second quarter sales and comparable-store sales increased 17.1% and 18.6%, respectively, and third quarter sales and comparable-store sales increased by 9% and 7.7%, respectively. Also, the profitability we generated in the third and fourth quarters was significantly higher than what we expected in June. These results speak to the resiliency of our business. Additionally, our inventories are well-positioned, setting the Company up to operate from a greater position of strength in 2021. |
• | Stock Performance:Despite this backdrop, our shareholders saw a significant increase in their investments over the 2020 fiscal year. Our stock started fiscal 2020 at $37.97 per share and closed at $43.82 per share at the end of the fiscal year, representing a 13.4% gain in one fiscal year, and our stock price has continued to climb. |
• | Cash Preservation:The Company temporarily reduced capital expenditures, suspended its quarterly dividend program, and suspended its share repurchase program to increase its cash position and provide additional flexibility during the year. The Board reinstated the quarterly dividend to shareholders at its meeting in August and the Company began opportunistically but cautiously repurchasing shares later in the year. |
• | Liquidity: Our balance sheet strength remains our foundation. Our quick and diligent efforts to preserve cash provided adequate liquidity to successfully navigate the most challenging period of the year. As a result, we were able to quickly borrow $330 million under our revolving credit facility, which we fully repaid shortly thereafter. In July, we also amended our credit facility and increased it to $600 million with a 5-year maturity to provide even greater flexibility. We exited fiscal 2020 with nearly $1.7 billion in cash and minimal debt—positioning the Company for further investments in the business to fuel growth and protect against any continued uncertainty. |
Our performance in 2020 aligned with our targeted focus on key stakeholder groups and the Company’s longer term business strategy, resulting in strong sales volume in 2020 particularly given the business disruption caused by COVID-19. Our 2020 compensation program, as outlined in detail in the following pages, tied to these key objectives, demonstrating our strong connection between pay and performance.
| 2021 Proxy Statement | 45
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Executive Compensation
Say-on-Pay Shareholder VoteLEADERSHIP APPOINTMENTS
95% Support
| AtAs 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 2020 Annual Meeting, nearly 95%long-term global growth and power our omni-channel ecosystem. The addition of shareholders votinga Chief Operating Officer creates a more streamlined and agile organizational structure that builds on the advisory votesuccess of our geo-focused growth strategy. Both of these organizational enhancements underscore our focus on executiveenhancing 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 supportedpackage that reflects the executivecompetition 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 program.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 Compensation Committee considered the resultsRSU award vests one third on each of the 2020first 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 SAY-ON-PAY SHAREHOLDER VOTE  | 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 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 achievement of metrics driving 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 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%). | | | | |
52 | Foot Locker, Inc. | |
EXECUTIVE COMPENSATION Recent Annual Incentive Plan and LTI payouts underscore our pay-for-performance culture: | ANNUAL INCENTIVE PLAN | PSU AWARDS | | |  |  |
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. |
| 2022PROXY STATEMENT | 53 |
EXECUTIVE COMPENSATION 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 variable based on performance. | CEO’s 2021 TARGET COMPENSATION | | AVERAGE OF REMAINING NEOs’ 2021 TARGET COMPENSATION | | | |  | |  | | | | | ANNUAL INCENTIVE PLAN PERFORMANCE METRICS | | LTI PERFORMANCE METRICS | | | |  | |  |
COMPONENTS OF EXECUTIVE COMPENSATION PROGRAM The key components of our executive compensation program are described in reviewing the program for 2021. In light of this support, the Compensation Committee decided to retain the general program design, subject to certain modifications described above because of the COVID-19 pandemic. 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. See page 27 for more details on our shareholder engagement program. |
Compensation Program Design and Structurefollowing table:
Components of Executive Compensation Program
One goal of the Compensation Committee is to align the compensation program with our business strategy and our shareholders’ interests. In order to achieve these objectives, our executive compensation program includes a mix of annual and long-term compensation, as well as a mix of cash and equity compensation. The centerpiece of our program is our pay-for-performance philosophy that aligns pay outcomes to the achievement of our annual operating plan and long-term strategy, and thus creation of shareholder value. This is especially true at senior levels of the Company where most of the compensation of our NEOs is tied to Company operating performance, as well as the performance of our stock. As shown in the charts below, for 2020, 88% of the CEO’s target compensation mix, and 70%, on average, of the other NEOs’ target compensation mix, was provided in the form of performance-based compensation.
CEO’s 2020 TARGET
54 | Foot Locker, Inc. | |
EXECUTIVE COMPENSATION MIX Long-Term Incentive Performance-Based Compensation Salary Annual Incentive 12% 24% 64% 88% AVERAGE OF OTHER NEO’s 2020 TARGET COMPENSATION MIX Long-Term Incentive Performance-Based Compensation Salary Annual Incentive 30% 22% 70% 48% 46
| Foot Locker, Inc. | |
Executive Compensation
The key components of our executive compensation program are described in the following chart:
Compensation Component Description and Purpose ANNUAL Base Salary Supports the objective of attracting and retaining talented executives with annual fixed compensation. Provides executives with market-competitive fixed compensation appropriate to their position, experience, and responsibilities. Performance-Based Compensation Annual Incentive Plan Links annual cash compensation to attainment of short-term performance goals based on sales and NPS. LONG-TERM Long-Term Incentive Program: Comprised of the performance-based LTIP, stock options, time-based RSUs, and the one-time Accelerate Future Growth (“AFG”) award. These long-term incentives and awards, which are linked to multi-year performance goals and the Company’s stock price, provide an incentive to work towards achievement of long-term strategic objectives. Long-term incentives support executive retention. LTIP Links compensation to attainment of long-term performance goals and service requirement, supporting executive retention. Earned awards are payable in equity based on two-year performance goals for net income (70%) and ROIC (30%), with an additional one-year vesting period for earned awards. Stock Options Provides the opportunity to purchase stock at the exercise price over a ten-year period from the grant date, subject to applicable vesting and exercisability conditions. Links realized compensation over long-term appreciation in stock price and represent value to executives only if the stock price increases. RSUs Aligns time-based RSUs with executives’ and shareholders’ interests with value that fluctuates based on stock price performance. RSUs support executive retention. AFG Award Incentivizes accelerated growth over a three-year period (2018-20) with this one-time AFG award made in 2018 to build on our strength and grow our business in a disruptive retail environment. This award is 100% performance based for the CEO and 75% performance based for the other NEOs. OTHER Retirement Benefits Provides pension and retirement savings benefits, which align with the objective of attracting and retaining talented executives. Perquisites Offers reasonable perquisites similar to our peer companies, which also aid in attracting and retaining talented executives.
Base Salary
Due to the business impact of COVID-19, the Company implemented a variety of actions to address the sudden reduction in sales, including reducing executive salaries from May 3, 2020 through August 31, 2020 as follows:
Chief Executive Officer salary reduction of 40%;
Executive Vice Presidents and Senior Vice Presidents salary reduction of 20%; and
Corporate Vice Presidents and General Manager-level roles salary reduction of 10%.
These reduced salaries were not made up when they were reinstated in September 2020. As part of its annual review of compensation, the Compensation Committee did not approve any merit or cost of living base salary increases for the NEOs in 2020, reflecting the Committee’s desire to promote accountability given the business impact of the widespread COVID-19 pandemic. However, the Committee approved an increase in Messrs. Martin and Gray’s annual base salaries, effective July 22, 2020, in connection with their promotions.
| Name | 2019 Base Salary Rate ($) | 2020 Base Salary Rate ($) | Base Salary Rate Increase (%) | | Johnson | 1,150,000 | 1,150,000 | — | | Peters | 700,000 | 700,000 | — | | Talwar | 650,000 | 650,000 | — | | Martin | 550,000 | 600,000 | 9.0 | | Gray | 450,000 | 600,000 | 33.3 |
| 2021 Proxy Statement | 47
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Executive Compensation
Annual Incentive PlanBASE SALARY
As part of its annual review of compensation, the Human Capital Committee approved base salary increases effective May 1, 2021, for Messrs. Bracken, Martin, Gray, and Talwar, as shown below, based on each NEO’s performance and a position-oriented analysis of market salaries. Beginning in fiscal 2021, individual performance goals are aligned around the Company’s four strategic imperatives: 
The Company strives for DIBs to be ingrained in our culture to ensure the Company is a world-class organization according to our customers, community leadership, and team members. To achieve this goal, all team members, including the NEOs, need to play a key role in our DIBs strategy, which is centered on five strategic pillars: 
Within the Leverage the Power of Our People performance objective, all team members are measured against a DIBs goal: 
| 2022 Proxy Statement | 55 |
EXECUTIVE COMPENSATION | | Year-End 2020 | Year-End 2021 | Base Salary | | | Base Salary Rate | Base Salary Rate | Rate Increase | | Name | ($) | ($) | (%) | | 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 |
| (1) | Mr. Bracken received an increase in his annual base salary to $615,000, effective May 2021, based on his performance and a position-oriented analysis of market salary. Mr. Bracken was promoted to Executive Vice President and Chief Operating Officer in November 2021 and received a salary increase to $800,000. |
ANNUAL INCENTIVE PLAN 
Consistent with our pay-for-performance culture, the Human Capital Committee established rigorous Adjusted Pre-Tax Income and NPS targets for 2021. The targets the Human Capital Committee established were based on the Company achieving Adjusted Pre-Tax Income of $668.4 million (which accounts for 80% of the payout), and a certain NPS score (which accounts for 20% of the payout), each as illustrated below. We havedrove strong Adjusted Pre-Tax Income 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 historyreturn 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 setting veryCOVID-19 on our results ($85 million). 56 | Foot Locker, Inc. | |
EXECUTIVE COMPENSATION FINANCIAL 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 executive, Mr. Martin’s annual incentive awards were based on the Company’s Adjusted Pre-Tax Income (weighted 20%), division profit (weighted 60%), and division 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, EMEA, and Asia Pacific divisions: 
| (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. |
| (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 Adjusted Pre-Tax Income targets for the North America, EMEA, or Asia 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. Our objective is to set challenging performance goals. Incentive payouts are earned only when we achieve or exceed our goals. |
Consistent with our pay-for-performance culture, the Compensation Committee established rigorous sales and NPS targets for 2020 to further incentivize the execution of our customer experience initiatives. The targets the Compensation Committee established were based on the Company achieving sales of $6,523 million (which accounts for 80% of the payout) and NPS (which accounts for 20% of the payout). We drove strong sales in 2020, particularly given the business disruption caused by COVID-19. As a result, Mr. Johnson and Ms. Peters earned annual incentive payouts of 167.3% of their respective target awards for 2020.
Weighting Performance Metric Threshold Target Maximum Payout as a Percentage of Target (%) 80% Financial Performance (in millions) Sales $5,870 $6,523 $7,175 $7,769 200 20% Net Promoter Score Store Post-Purchase, Digital Post.Purchase, and Post-Fulfillment Promoters 70-80% 90-100% Detractors Passives -100-60% 36.7% 36.7 Total Annual Incentive Payout 167.3
The Compensation Committee established sales as one of the performance targets in connection with the Annual Incentive Plan in 2020. In 2020, we temporarily closed all of our brick-and-mortar stores across all of our brands around the globe in response to government restrictions and the concern for the health and safety of our team members and customers. Also, during the year, we temporarily closed certain stores related to social unrest. The Annual Incentive Plan sales metric is calculated on an internal basis of reporting and, therefore, does not include adjustments necessary for presentation in accordance with GAAP, including determining sales using actual foreign exchange rates and revenue associated with shipping and handling activities ($82 million). Annual Incentive Plan sales also provide for the adjustment of sales from stores closed in connection with the COVID-19 pandemic and the social unrest ($303 million) from such performance target to annualize sales based on sales for the time such stores were open because the Compensation Committee considers this to be unusual and non-recurring.
Financial Performance
SALES
The Compensation Committee did not establish Annual Incentive Plan targets until June. Once the targets were established, no changes were made to the in-flight performance cycle. In June, the Compensation Committee established the 2020 sales target of $6,523 million based upon the business plan and budget reviewed each year by our Finance Committee and approved by the Board. This occurred after the Company experienced the confluence of a 43% decline in sales during the first quarter of 2020 due to widespread store closings, the ramp up of our digital capabilities, and the impact of social unrest, and also began to understand the expected recovery. Our strong Annual Incentive Plan sales in 2020 ($7,769 million) allowed us to refresh our inventory and return to profitability in the third quarter of 2020 and position us for strong results in 2021.
As a division executive, Mr. Talwar’s annual incentive award was based on Company sales (weighted 20%), division sales (weighted 60%), and division NPS (weighted 20%). Mr. Talwar earned an annual incentive payout of 160.0% of his target award.
During 2020, Mr. Gray served as Vice President and Chief Merchandising Officer until July 22, 2020, and then as Executive Vice President and Chief Commercial Officer, so his annual incentive award was prorated between corporate and division results and individual performance. Mr. Gray earned an annual incentive payout of 175.4% of his target award.
goals throughout the Company. We believe that achieving these challenging performance goals for these divisions is demanding. 48
| Foot Locker, Inc. | |
Executive Compensation
During 2020, Mr. Martin served as Senior Vice President and Chief Strategy and Development Officer until July 22, 2020, and then as Executive Vice President and Chief Executive Officer—Asia Pacific and Chief Strategy and Development Officer, so his annual incentive award was prorated between corporate and division performance. Mr. Martin earned an annual incentive payout of 138.0% of his target award.
Mr. Jacobs’s employment with the Company terminated prior to the end of 2020; he was, therefore, ineligible to receive an annual incentive payout.
In 2020, the North America, EMEA, and Asia Pacific divisions comprised the store and direct-to-customer operations of the following banners, respectively:
For competitive reasons, we do not disclose the sales targets for the North America, EMEA, or Asia 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. Our objective is to set challenging performance goals for our executives throughout the Company. We believe that achieving these challenging performance goals for these divisions is demanding.
NPS
The Compensation
NPS The Human Capital Committee established NPS targets for the 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. 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 Detractors from the percentage of Promoters yields the NPS, which can range from a low of -100% (if every customer is a Detractor) to a high of 100% (if every customer is a Promoter). The Compensation Committee established three touchpoints for measuring NPS by each geographic region, each of which is assessed as a stand-alone performance to allow for balanced focus on each area of opportunity to improve an “omni-” customer experience: Store Post-Purchase, Digital Post-Purchase, and Post-Fulfillment. The survey responses are aggregated by region (North America, EMEA, and Asia Pacific) and are scored individually by touchpoint. Each customer touchpoint has its own threshold, target, and maximum, but they ultimately roll up into one payout percentage. The evaluation of full-year NPS utilizes the Company’s global performance management rating scale, in which performance can range from 25% to 200% based on the relative achievement of the metrics. Due to the business impact of COVID-19, largely driven by carrier delays and significantly increased volumes at our Customer Care Centers, NPS results were negatively impacted. As described above, payout percentages associated with ratings for the metrics were averaged and resulted in an overall corporate payout percentage of 36.7%.
| 2021 Proxy Statement | 49
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Executive Compensation
Additional Information
The annual incentive plan for the NEOs makes incentive payments based upon the Company or relevant division’s results, without individual performance adjustments. However, executives who receive a “not meeting performance” rating in their annual performance review are ineligible to receive an annual incentive payment. All annual incentive targets and calculations are based on the results of continuing operations through the end of the 2020 fiscal year.
The payment of performance-based annual cash bonuses is calculated as a percentage of the base salary rate of the executive 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 $6 million.
Bonus payouts are calculated on the basis of straight-line interpolation between the threshold (90%), target (100%), and maximum (110%) points. If the Company does not achieve threshold performance, then no annual bonus is earned or paid.
| | Target as a
Percentage of
Base Salary Rate
(%) | Actual 2020
Payout
as a Percentage
of Target
(%) | Actual 2020
Payout
($) | | Johnson | 200 | 167.3 | 3,847,900 | | Peters | 75 | 167.3 | 878,325 | | Talwar | 75 | 160.0 | 780,000 | | Martin | 65* | 167.3 | 280,974 | | | 75* | 112.5 | 268,424 | | Gray | 55** | 184.5 | 214,519 | | | 75** | 167.3 | 399,176 |
| * | 65% target award through July 22, 2020; 75% target award in connection with Mr. Martin’s promotion. |
| ** | 55% target award through July 22, 2020; 75% target award in connection with Mr. Gray’s promotion.| ► | Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. |
All participants, including the NEOs, are required to be employed on the payment date to receive payment.
| ► | Detractors (score 0-6) are unhappy customers who can damage the brand and impede growth through negative word-of-mouth. |
Subtracting the percentage of Detractors from the percentage of Promoters yields the NPS, which can range from a low of -100% (if every customer is a Detractor) to a high of 100% (if every customer is a Promoter). The Human Capital Committee established three touchpoints for measuring NPS by each geographic region, each of which is assessed as a stand-alone performance to allow for balanced focus on each area of opportunity to improve an “omni-” customer experience: Store Post-Purchase, Digital Post-Purchase, and Post-Fulfillment. The survey responses are aggregated by region (North America, EMEA, and Asia Pacific) and are scored individually by touchpoint. Each customer touchpoint has its own threshold, target, and maximum, but they ultimately roll up into one payout percentage. The evaluation of full-year NPS utilizes the Company’s global performance management rating scale, in which performance can range from 25% to 200% based on the relative achievement of the metrics. 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
| 2022 Proxy Statement | 57 |
EXECUTIVE COMPENSATION ESG NPS is an ESG metric because it measures customer satisfaction and brand 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 our 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 more details on our shareholder engagement program. To learn more about our global ESG program, see ESG on page 96, and our Impact Report, which is presented consistent with SASB and TCFD reporting standards and is available at investors.footlocker-inc.com/impactreport. ADDITIONAL INFORMATION The Annual Incentive Plan for the NEOs makes incentive payments based upon the Company or relevant division’s results, without individual performance adjustments. However, executives who receive a “not meeting expectations” rating in their annual performance review are ineligible to receive an annual incentive payment. All annual incentive targets and calculations are based on the results of continuing operations through the end of the 2021 fiscal year. Annual Incentive Plan awards are calculated based on a percentage of the executive’s base salary rate 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 $6 million. Annual incentive payouts are calculated on the basis of straight-line interpolation between the threshold (90%), target (100%), and maximum (110%) points. | | Target as a | Actual 2021 Payout | | | | Percentage of | as a Percentage of | Actual | | | Base Salary Rate | Target | 2021 Payout | | Name | (%) | (%) | ($) | | 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. |
All participants, including the NEOs, are required to be employed on the payment date to receive payment of the annual incentive. Prior 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. Annual Incentive payments are formula-driven based upon Company performance, and our 2020 program for the NEOs does not provide for discretionary adjustments based upon individual performance. The Compensation Committee did not exercise discretion in the amounts payable to the NEOs or any other executive officers under this incentive program.
LTI Program58 Consistent with our pay-for-performance culture, the Compensation Committee established rigorous Adjusted Net Income and ROIC targets at the beginning of 2019 for the 2019-20 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 $580 million (which accounts for 70% of the payout) and ROIC of 13.3% (which accounts for 30% of the payout). The Company achieved two-year average annual net income of $413 million and ROIC of 10.7% for this performance period. As a result, no payout was earned for this performance period and the awards were forfeited in 2020 without payment.
| Foot Locker, Inc. | |
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| Foot Locker, Inc. | |
Executive Compensation
LTIP
The LTIP is designed to reward executives for achieving multi-year performance targets. The LTIP is formula-driven, with targets established by the Compensation Committee based upon financial targets included in the business plan reviewed each year by our Finance Committee and approved by the Board. The LTIP pays out based upon the Company’s results, without individual performance adjustments. Key design features of the LTIP are:
EXECUTIVE COMPENSATION 100% Equity | 100% of earned payouts ofAnnual incentive payments are formula-driven based upon Company performance, and our 2021 program for the LTIP award are made in equityNEOs does not provide for discretionary adjustments based upon individual performance. The Human Capital Committee did not exercise discretion in the formamounts payable to the NEOs or any other executive officers under this incentive program. LTI AWARDS 
Our LTI awards include a combination of PSUs payablePSU awards and other long-term equity awards granted annually under the Stock Incentive Plan in the form of stock options and RSUs. Beginning in 2021, our LTI awards are awarded as 60% PSUs, 20% stock options, and 20% RSUs. PSU AWARDS The PSU awards are designed to reward executives for allachieving multi-year performance targets. The PSU awards are formula-driven, with targets established by the Human Capital Committee based upon financial targets included in the business plan reviewed each year by our Finance Committee and approved by the Board. The actual number of PSUs awarded will be based upon the Company’s performance results, without individual performance adjustments. Key design features of the NEOs. | Two-Year Performance
Period and Additional
One-Year Vesting Period | The performance period is two years; however, while shares earned are calculated following the end of the two-year performance period, settlement of shares require continued employment and are subject to forfeiture, as well as stock price fluctuations, for another year—that is, settlement of shares does not occur until the end of a three-year period. | Net Income and
ROIC Targets | The performance targets are based on Adjusted NetPSU awards are:| Feature | Description | | 100% Equity | 100% of earned payouts are made in equity in the form of PSUs payable under the Stock Incentive Plan for all of the NEOs. | Settlement at End of
Three-Year Period | Earned payouts are calculated following the end of a two-year performance period, but settlement requires continued employment and is subject to forfeiture and stock price fluctuations, for one more year. | Two-Year Average
After-Tax Income and
ROIC Targets | The performance targets are based on Two-Year Average After-Tax Income (70%) and ROIC (30%) that are contained in the business and financial plan reviewed by the Finance Committee and approved by the Board for the performance period. | Net |
PSU AWARDS (2020-21) Consistent with our pay-for-performance culture, the Human Capital Committee established Two-Year Average After-Tax Income and
ROIC Targetstargets 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 $547.3 million and ROIC of 13.1% for this performance period. As a result, a 200% payout was earned for this performance period. The targets, along with the adjusted actual performance for the period, and the calculation of ROIC are shown in the table below: 
| 2022 Proxy Statement | 59 |
| Mr. Page was appointed in 2021, and Messrs. Bracken, Gray, and Martin were promoted, in 2020, so their payouts were prorated for the 2020-21 performance period. Due to Ms. Peters’s retirement in 2021, she earned the pro rata portion of her PSUs due for the 2020-21 performance period based on actual performance, which will be paid at the same time as the payouts to the other NEOs in 2023. Mr. Talwar forfeited these PSUs in connection with the termination of his employment. The Human Capital Committee establishes certain performance targets in connection with determining the Company’s PSU payouts. The PSU payouts provide for the exclusion of certain items from such performance targets that the Human Capital Committee considers to be unusual or non-recurring. These items, if they occur, are based on Adjusted Net Income (70%) and ROIC (30%) that are containedexcluded when calculating the PSU payouts, however, such unusual or non-recurring items may not be material for purposes of the non-GAAP measures presented in the businessAnnual Report. In addition, certain items may not be adjusted for purposes of the PSU payouts, as they do not exceed a pre-established adjustment threshold, although they are adjusted for financial reporting purposes in the Annual Report consistent with past practices. Two-Year Average After-Tax Income Calculation for 2020-21 PSU Payouts. Please note the following reconciliation: | | | 2021 | | | 2020 | | | Average | | | | | ($ 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 | |
| (1) | See pages 21 through 22 of our Annual Report for a description of this item. |
| (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. |
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 financial plan reviewed by the Finance Committee and approved by the Board 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, period.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. | 2022 PROXY STATEMENT | 61 | |
Target Awards are
a Percentage of
Base Salary RateEXECUTIVE COMPENSATION
| The target awards are expressed as a percentage of initial base salary—that is, the base salary paid to the executive following any salary adjustments that may take place on May 1 of the first year of the performance period, adjusted only for promotion-related salary increases. |
The target LTIPPSU awards for the 2020-21 performance period for the NEOs are listed in the following table:
Name | Target Award as
a Percentage of
Base Salary Rate
(%) | Johnson | 325 | Peters | 100 | Talwar | 75 | Martin | 75 | Gray | 75 |
LTIP (2019-20)
The targets, along with the adjusted actual performance for the period, and the calculation of ROIC are shown in the table below:
Weighting Performance Metric Threshold Target Maximum Payout as a Percentage of Target (%) 70% Average Annual Adjusted Net Income (in millions) $493 $580 $696 $413 0 30% Two-Year Average ROIC 11.7% 13.3% 15.4% 10.7% 0 Total LTIP Payout 0
The Compensation Committee establishes certain performance targets in connection with the Company’s long-term incentive program. The long-term incentive program provides for the exclusion of certain items from such performance targets that the Compensation Committee considers to be unusual or non-recurring. These items, if they occur, are excluded when calculating the long-term incentive program results, however such unusual or non-recurring items may not be material for purposes of the non-GAAP measures presented in the 2020 Annual Report on Form 10-K. In addition, certain items may not be adjusted for purposes of the long-term incentive program, as they do not exceed a pre-established adjustment threshold, although they are adjusted for financial reporting purposes in the 2020 Annual Report on Form 10-K consistent with past practices.
| 2021 Proxy Statement | 51
|
Executive Compensation
Average Annual Adjusted Net Income Calculation for LTIP. Please note the following reconciliation:
| | | 2020 | | 2019 | | Average | | | After-tax income: | | ($ in millions) | | | | | | Net income | | $ | 323 | | $ | 491 | | | | | | After-tax adjustments excluded from GAAP: | | | | | | | | | | | | Impairment and other charges, net of income tax benefit of $24 and $16 million, respectively(1) | | | 93 | | | 49 | | | | | | Other income, net(1) | | | (140 | ) | | (4 | ) | | | | | U.S. tax reform(1) | | | 25 | | | 2 | | | | | | Tax expense (benefit) related to tax law rate changes(1) | | | (5 | ) | | (2 | ) | | | | | Income tax valuation allowances(1) | | | — | | | 2 | | | | | | Adjusted net income (non-GAAP) | | $ | 296 | | $ | 538 | | | | | | Disregarded items for the LTIP | | | | | | | | | | | | U.S. tax reform | | | — | | | (2 | ) | | | | | Tax expense (benefit) related to tax law rate changes | | | — | | | 2 | | | | | | Income tax valuation allowances | | | — | | | (2 | ) | | | | | Disregarded items for the LTIP, not part of non-GAAP adjustments(2) | | | (2 | ) | | (5 | ) | | | | | Adjusted net income (LTIP) | | $ | 294 | | $ | 531 | | $ | 413 | |
| (1) | See page 20 of our 2020 Annual Report on Form 10-K for a description of this item. |
| (2) | The LTIP provides for the exclusion of certain items that the Compensation Committee considers unusual or non-recurring. The disregarded items permitted under the LTIP include adjustments relating to unplanned matters, certain litigation charges, and the excess tax benefits or deficiencies arising from stock option exercises. |
ROIC Calculation for LTIP. Return on Invested Capital, or ROIC, is a non-GAAP financial measure. Please note the following reconciliation:
| | | 2020 | | 2019 | | Average | | | | | ($ in millions) | | | | | | Pre-tax income: | | | | | | | | Income before income taxes | | $ | 494 | | $ | 672 | | | | | | Pre-tax adjustments excluded from GAAP: | | | | | | | | | | | | Impairment and other charges(1) | | | 117 | | | 65 | | | | | | Other income, net(1) | | | (190 | ) | | (4 | ) | | | | | Adjusted income before income taxes (non-GAAP) | | $ | 421 | | $ | 733 | | | | | | Disregarded items for the LTIP, not part of non-GAAP adjustments(2) | | | 2 | | | (4 | ) | | | | | Interest income, net | | | (7 | ) | | 11 | | | | | | Adjusted EBIT (LTIP) | | $ | 430 | | $ | 718 | | | | | | + Interest component of straight-line rent expense(1) | | | 158 | | | 173 | | | | | | Adjusted net operating profit | | | 588 | | | 891 | | | | | | - Adjusted income tax expense(1) | | | (168 | ) | | (240 | ) | | | | | = Adjusted return after taxes | | $ | 420 | | $ | 651 | | $ | 536 | | | Average total assets(3) | | $ | 6,816 | | $ | 5,205 | | | | | | - Average cash and cash equivalents | | | (1,294 | ) | | (899 | ) | | | | | - Average non-interest-bearing current liabilities | | | (819 | ) | | (720 | ) | | | | | - Average merchandise inventories | | | (1,066 | ) | | (1,239 | ) | | | | | + Average estimated asset base of capitalized operating leases(4) | | | — | | | 1,442 | | | | | | + 13-month average merchandise inventories | | | 1,243 | | | 1,361 | | | | | | = Average invested capital | | $ | 4,880 | | $ | 5,150 | | $ | 5,015 | | | ROIC% | | | 8.6 | % | | 12.6 | % | | 10.7 | % |
| (1) | See page 21 of our 2020 Annual Report on Form 10-K for a description of these items. |
| (2) | The LTIP provides for the exclusion of certain items that the Compensation Committee considers unusual or non-recurring. The disregarded items permitted under the LTIP include adjustments related to unplanned matters, certain litigation charges, and the excess tax benefits or deficiencies arising from stock option exercises. |
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| Foot Locker, Inc. | |
Executive Compensation
| (3) | Represents average total assets for 2020 and 2019 of $7,043 million and $6,589 million, respectively. |
| (4) | For 2019, the determination of the capitalized operating leases and the adjustments to income were calculated on a lease-by-lease basis and represented the best estimate of the asset base that would be recorded for operating leases as if they had been classified as capital or as if the property were purchased. No such adjustments are required for 2020. See page 21 of our 2020 Annual Report on Form 10-K for a detailed discussion. |
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.
LTIP payments are formula-driven based upon Company performance, and our 2020 program for the NEOs does not provide for discretionary adjustments based upon individual performance. The Compensation Committee did not exercise discretion in the amounts payable to the NEOs or any other executive officers under this incentive program.
LTIP (2020-21)
In 2020, the Compensation Committee established LTIP performance targets for the 2020-21 performance period, which are also based on two-year average annual Adjusted Net Income (70%) and ROIC (30%). For competitive reasons, since this performance period is still ongoing, we have not disclosed the targets established for the period. The Compensation Committee will determine whether payouts have been earned following the end of the Company’s 2021 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 2020-21 performance period, payment will be made to participating executives in 2023, following the completion of a one-year vesting period.
Stock Options and RSUs
The Compensation Committee granted time-based equity awards to the NEOs in 2020, 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 deciding to grant these awards and determining the value of the awards, the Compensation Committee considered each executive’s performance, position, and career potential and the competitive market for equivalent talent. See the Grants of Plan-Based Awards Table beginning on page 66 for additional information on awards granted in 2020.
The values shown in the Grants of Plan-Based Awards Table for the stock option grants in 2020 are based on a Black-Scholes value of $5.03 per share 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. Time-based RSUs cliff vest generally after a period of three years. The Compensation Committee does not normally consider an executive’s gains from prior stock awards in granting new awards. The Compensation Committee determines the number of options granted based on a fixed value, using the Black-Scholes value on the grant date.
AFG
In 2018, the Compensation Committee, after considering the significant disruption occurring in the retail industry and the strategic work that would be necessary by the executives to accelerate the Company’s long-term growth, made one-time additional long-term incentive awards, or AFG awards, to the NEOs and other senior executives. The AFG is designed to reward executives for achieving multi-year performance targets.
The AFG is formula-driven, with targets established by the Compensation Committee based upon financial targets included in the 2018-19 financial plan and the forecast reviewed by our Finance Committee and approved by the Board. The percentage of achievement of the performance goals at the end of the performance period was applied to the target number of PSUs granted to the executive to determine the actual number of PSUs that were earned. The AFG is based upon the Company’s results, without individual performance adjustments. Key design features of the AFG are:
Performance-Based | For Mr. Johnson, 100% of the AFG award is PSUs; for the other NEOs, 75% of the AFG award is PSUs and 25% is time-based RSUs. | Three-Year
Performance Period | The performance period is three years, and settlement of shares requires continued employment until shares are earned following the end of the three-year performance period and are subject to forfeiture. | Total Revenue Growth,
Digital Revenue Growth,
and EBIT Margin Targets | The performance targets are based on Total Revenue Growth (⅓), Digital Revenue Growth (⅓), and EBIT Margin (⅓) that are contained in the business and financial plan reviewed by the Finance Committee and approved by the Board for the performance period. |
| 2021 Proxy Statement | 53
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Executive Compensation
The target AFG awards and actual payouts for the NEOs are listed in the following table:
| | Target Performance-Based Component
(#) | Actual Performance-Based Component
(#) | | Johnson | 108,862 | 72,611 | | Peters | 16,330 | 10,892 | | Talwar | 12,247 | 8,169 | | Martin | 8,165 | 5,446 | | Gray | 2,450 | 1,634 |
Consistent with our pay-for-performance culture, the Compensation Committee established rigorous Total Revenue Growth, Digital Revenue Growth, and EBIT Margin targets at the beginning of 2018 for the 2018-20 performance period and set a “performance floor” for each performance measure. The targets the Compensation Committee established were based on the Company achieving three-year Total Revenue Growth of $766 million, or 10% (which accounts for ⅓ of the payout), Digital Revenue Growth of $212 million, or 20% (which accounts for ⅓ of the payout), and average EBIT Margin of 9.5% (which accounts for ⅓ of the payout). For the performance period, the Company experienced total revenue decline of $108 million, digital revenue growth of $1,035 million, and average EBIT margin of 7.8%, which resulted in earned AFG payouts of 66.7% of their respective target awards. For Mr. Johnson, 100% of the AFG award is PSUs; for the other NEOs, 75% of the AFG award is PSUs and 25% is time-based RSUs, and the PSUs were settled in 2021. The percentage of achievement of the performance goals at the end of the performance period was applied to the target number of PSUs granted to the executive to determine the actual number of PSUs earned. The targets, along with the adjusted actual performance for the period, are shown in the table below:
Weighting Performance Metric Threshold Target Maximum Payout as a Percentage of Target (%) 1 — 3 Total Revenue Growth (in millions) $479 6.25% $766 10% $1,149 15% -$108 -1.4% 0 1 — 3 Digital Revenue Growth (in millions) $132 12.5% $212 20% $318 30% $1,035 97.6% 200 1 — 3 EBIT Margin (in millions) 9.2% 9.5% 9.7% 7.8% 0 Total AFG Payout 66.7
| Name | Target Award as a
Percentage of Base Salary Rate
(%) | | Johnson | 325 | | Page(1) | 90 | | Bracken(2) | 30 | 54
| Foot Locker, Inc. | | 75 | | Martin | 75 | | Gray(3) | 50 | | 75 | | Peters(4) | 100 | | Talwar(5) | 75 |
| (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 2020-21 performance period. |
| (2) | 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. |
Executive Compensation| (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. |
PSU AWARDS (2021-22) In 2021, the Human Capital Committee established PSU performance targets for the 2021-22 performance period, which are also based on Two-Year Average After-Tax Income (70%) and ROIC (30%). For competitive reasons, since this performance period is still 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 2022 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 2021-22 performance period, payment will be made to participating executives in 2024, following the completion of a one-year vesting period. The target PSU values for the NEOs for the 2021-22 performance period if the performance goals are achieved are listed in the following table: Retirement Plan and Excess Cash Balance Plan
The NEOs participate in the Retirement Plan and the Excess Cash Balance Plan. These plans, as well as the method of calculating benefits payable under these plans, are described beginning on page 75.
401(k) Plan and Excess Savings Plan
The NEOs participate in the 401(k) Plan and the Excess Savings Plan. These plans, as well as the method of calculating contributions under these plans, are described on page 77.
Supplemental Executive Retirement Plan
The Company maintains a Supplemental Executive Retirement Plan (“SERP”) for certain senior officers of the Company and other key employees, including the NEOs who met the eligibility requirements prior to the plan being frozen for new participants (including rehires) after December 31, 2018. See page 76 for additional information regarding the SERP.
International Assignment Compensation
We provide team members on long-term international assignments with additional benefits and allowances that are designed to minimize any financial detriment or gain to the team member from an international assignment. None of the NEOs, other than Messrs. Talwar and Gray, received any compensation under the International Assignment Policy (“IAP”) during 2020.
Perquisites
We provide the NEOs with certain perquisites, which the Compensation Committee believes to be reasonable and consistent with its overall objective of attracting and retaining talented executives. The Company provides the NEOs with an automobile reimbursement, medical expense reimbursement, supplemental long-term disability insurance, and financial planning. In addition, the Company reimburses Mr. Johnson for reasonable expenses of using car service for transportation in the New York metropolitan area. 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. We do not provide a gross-up to executives for the income tax liability they incur due to their receipt of these perquisites.
Employment Agreements
As more fully described on pages 64 through 65, we have employment agreements with each of our NEOs, except Mr. Gray. Other than the agreement with Mr. Johnson as CEO, the agreements are substantially in the same form.
| 2021 Proxy Statement | 55
| Name | PSU Values at Target
($) | | Johnson | 4,830,000 | | Page(1) | 499,519 | | Bracken | 597,620 | | Martin and Gray | 584,250 | | Talwar(2) | 606,173 |
| (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. |
Executive Compensation
Procedures for Determining Compensation
Setting Compensation, Establishing Goals, and Evaluating Performance
As reflected in the following timeline, the Compensation Committee oversees a rigorous and comprehensive compensation approval, goal setting, and performance review process:
| | Annual Review and Approvals (Typically January - April) | • The Compensation Committee reviews any feedback from shareholder engagement meetings regarding the compensation program.
| (2) | Mr. Talwar forfeited these PSUs in connection with the termination of his employment. |
• STOCK OPTIONS AND RSUs
At its February meeting,The Human Capital Committee granted equity awards to the CompensationNEOs in 2021, splitting the total value of the award between stock options and RSUs in order to enhance the retentive value of the LTI awards. In deciding to grant these awards and determining the value of the awards, the Human Capital Committee discusses further refined planningconsidered each executive’s performance, position, and preliminary recommendations for the following fiscal year’s compensation program.
• At its March meeting, final recommendations are presented,career potential and the Compensation Committee approvescompetitive market for equivalent talent. See the executive compensation design, components, and equityGrants of Plan-Based Awards in Fiscal 2021 beginning on page 74 for additional information on awards for each executive. The Compensation Committee meets privately withgranted in the independent consultant to review and approve the CEO’s compensation.
• Due to the business impact of COVID-19, in 2020, the Compensation Committee established the annual bonus performance goals at its June meeting, and the applicable LTIP goals at its November meeting, to consider adjustments for stores that were closed in accordance with direction from national, state, and local governments.
| | | | |  | | | | | | | | | | | | Compensation Planning
(May - November) | • During its meetings over this period, the Compensation Committee has preliminary discussions with management and the Committee’s compensation consultant regarding the compensation program design for the following year, including reviewing compensation trends, peer group composition, a competitive analysis of individual executives’ compensation relative to market, preliminary pay recommendations and performance evaluations, and the current incentive payout forecast. The Compensation Committee provides feedback and direction regarding the program design for the nextCompany’s 2021 fiscal year.
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• EXECUTIVE COMPENSATION
The Compensationvalues shown in the 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 Human Capital Committee meets privatelydoes not normally consider an executive’s gains from prior stock awards in granting new 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 Human 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 value of the 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 independent consultantCompany’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. | | | | 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 Plan. These plans, as well as the method of calculating benefits payable under these plans, are described beginning on page 88. 401(k) PLAN AND EXCESS SAVINGS PLAN Messrs. Johnson, Bracken, Martin, and Gray participate in the 401(k) Plan and the Excess Savings Plan. These plans, as well as the method of calculating contributions under these plans, are described on page 90. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN The Company maintains a SERP for certain senior officers of the Company and other key employees, including the NEOs who met the eligibility requirements prior to the plan being frozen for new participants (including rehires) after December 31, 2018. See page 90 for additional information regarding the CEO’s compensation.SERP. INTERNATIONAL ASSIGNMENT COMPENSATION We provide team members on long-term international assignments with additional benefits and allowances that are designed to minimize any financial detriment or gain to the team member from an international assignment. Except for Expatriate Tax Payments, none of the NEOs, other than Mr. Talwar, received any compensation under the IAP during 2021. | 2022 PROXY STATEMENT | 63 |
EXECUTIVE COMPENSATION PERQUISITES We provide the NEOs with certain perquisites, which the Human Capital Committee believes to be reasonable and consistent with its overall objective of attracting and retaining talented executives in a competitive labor market. The Company provides the NEOs with an automobile reimbursement, medical expense reimbursement, supplemental long-term disability insurance, and financial planning. In addition, the Company reimburses Mr. Johnson for reasonable car service expenses for transportation in the New York metropolitan 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 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. EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS As more fully described on pages 72 through 73, we have employment agreements with each of our NEOs, except Messrs. Page, Bracken, and Gray. Other than the agreement with Mr. Johnson, the agreements are substantially in the same form. PROCEDURES FOR DETERMINING COMPENSATION SETTING COMPENSATION, ESTABLISHING GOALS, AND EVALUATING PERFORMANCE As reflected in the following timeline, the Human Capital Committee oversees a rigorous and comprehensive compensation approval, goal setting, and performance review process: Year-Round: | ► | The Human Capital Committee meets at other times throughout the year with management and privately with the independent consultant to review performance against the established performance goals, discuss developments and emerging trends, and review specific executive compensation and management resources issues. The Human Capital Committee is also responsible each year for reviewing the compensation paid to non-employee directors and making recommendations to the Board regarding the directors’ compensation program. |
64 | Foot Locker, Inc. | |
EXECUTIVE COMPENSATION BENCHMARKING 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 (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, including apparel retail; apparel, accessories, and luxury goods; footwear; home furnishing retail; internet and direct marketing retail; and specialty stores. 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. The Human Capital Committee determined that the following companies, which comprised the peer group for 2021 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. | | | | | | | | | Additional Reviews
(During Year) | • |
One goal of the Human Capital Committee is to provide competitive total compensation opportunities for the NEOs that vary with Company performance. The CompensationHuman Capital Committee meetsuses 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 other times during the year with management and privatelymedian of comparable positions at peer companies, consistent with the independent consultantCompany’s revenue in relation to review performance against the established performance goals, discuss developments and emerging trends, and review specific issues related to executive compensation or other issues related to management resources.peer companies. The Compensation Committee also has responsibility for annually reviewing the compensation paid to non-employee directors and making recommendations to the full Board regarding the directors’ compensation program. | | | | | | | | |
Each year, in advance of making compensation decisions for the upcoming 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 reviewed by the Finance Committee and approved by the Board. The Compensation Committee meets with management, the Company’s compensation consultant, and the Compensation 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.
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| Foot Locker, Inc. | |
Executive Compensation
After the financial results for the prior year have been finalized and audited, the Compensation Committee meets to review and approve Annual Incentive Plan and LTIP payments for the prior year and to review and approve compensation arrangements, including 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 Incentive 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, such as the business disruption caused by COVID-19, the Compensation Committee generally 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.
Benchmarking 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 (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–apparel retail; apparel, accessories, and luxury goods; footwear; home furnishing retail; internet and direct marketing retail; and specialty stores. 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.
The Compensation Committee determined that the following companies, which comprised the peer group for 2020 compensation 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.
American Eagle Outfitters, Inc.
Dick’s Sporting Goods, Inc.
Hanesbrands Inc.
PVH Corp.
Sally Beauty Holdings, Inc.
Tapestry, Inc.
Ulta Beauty, Inc.
Wayfair Inc.
| Bed Bath & Beyond Inc.
Expedia, Inc.
L Brands, Inc.
Qurate Retail, Inc.
Signet Jewelers Ltd.
Tiffany & Co.
Under Armour, Inc.
Williams Sonoma, Inc.
| Burlington Stores, Inc.
The Gap, Inc.
The Michaels Companies, Inc.
Ralph Lauren Corporation
Skechers USA, Inc.
Tractor Supply Company
Urban Outfitters, Inc.
|
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 CompensationHuman Capital Committee also considers other factors, including performance, responsibility, experience, tenure, internal equity, and market positioning, when determining compensation.
During 2020, the Compensation Committee reviewed the peer group and determined that no changes to the peer group were appropriate for 2021 compensation decisions.
| 2022 Proxy Statement | 65 |
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 was refreshed, as provided below, to reflect a larger and more diverse group of peers: Use of Compensation Consultants
The Compensation Committee has retained Compensation Advisory Partners (“CAP”), a nationally-recognized compensation consultant that is independent and performs no work for management, as its advisor. CAP reports directly to the Compensation Committee, meets with the Compensation Committee privately without management present, and regularly communicates privately with the Compensation Committee Chair. CAP also meets with the Governance Committee regarding non-employee directors’ compensation and reports on related governance and trends. The Compensation 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 Compensation 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
 | DELETIONS | ► | Expedia Group, Inc. | ► | Tiffany & Co. | ► | Wayfair Inc. | | ► | The Michaels Companies, 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. | | | | ► | Dick’s Sporting Goods Inc. | ► | Sally Beauty Holdings, Inc. | | | | | | | | | |
USE OF COMPENSATION CONSULTANTS | The Human Capital Committee has retained CAP, a nationally-recognized compensation consultant that is independent and performs no work for management, as its advisor. CAP reports directly to the Human 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 Responsibility Committee regarding non-employee directors’ compensation and reports on related governance and trends. The Human 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 Human Capital Committee considers CAP’s report on the program. In 2021, Proxy Statement | 57MANAGEMENT INVOLVEMENT IN DEVELOPING THE COMPENSATION PROGRAM
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Executive Compensation
the CEO’s compensation. In addition, each year CAP reviews and makes recommendations regarding the compensation program for non-employee directors, and the Compensation Committee considers the consultant’s report on the program. In 2020, 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 Program
Management is involved in various aspects of developing the executive compensation program. Our Chief Human Resources Officer, Vice President-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 Chief Human Resources Officer reviews these proposals with the Compensation Committee Chair, and may make changes to the recommendations based upon her input, before the recommendations are presented to the Compensation Committee for review. As part of her responsibilities, the Lead Independent Director also attends all Compensation Committee meetings and advises the Compensation Committee Chair in fulfilling her designated role and responsibilities. Our General Counsel also attends meetings of the Compensation
Management is involved in various aspects of developing the executive compensation program. Our Chief Human Resources Officer, Vice President-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 Chief Human Resources Officer reviews these proposals with the Human Capital Committee Chair, and may make changes to the recommendations based upon her input, before the recommendations are presented to the Human 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 General Counsel also attends meetings of the Human Capital Committee and participates in some of these discussions and preparations. Additional Information
Key Compensation Governance Policies
WHAT WE DO % Align executive pay closely with Company’s performance and strategy % Set rigorous and objective performance goals % Maintain a clawback policy % Impose and monitor meaningful stock ownership guidelines % Require a one-year time-based vesting period for earned LTIP payouts following attainment of performance goals % Include double-trigger change in control provisions in employment agreements and equity awards % Mitigate undue risk in compensation programs % Provide reasonable perquisites % Retain independent compensation consultant to advise the Compensation Committee % Hold annual “Say-on-Pay” advisory vote % Conduct shareholder outreach to regularly obtain feedback on compensation and other topics WHAT WE DO NOT DO × No tax gross-up for any compensation, benefit, perquisite, or change in control payments (other than the IAP and relocation program that is available to all employees) × No changes to in-flight performance cycles × No hedging or pledging of the Company’s stock × No repricing of stock options without shareholder approval × No stock options granted below fair market value × No dividends or dividend equivalents on RSUs or PSUs × No excessive severance benefits
Clawback Policy
We have adopted a clawback policy that provides for the recovery of incentive compensation paid in cash or equity if the Compensation Committee determines that the 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 Code of Business Conduct or other policies. The Compensation Committee is closely monitoring the proposed SEC rules regarding recoupment of incentive-based compensation and will amend the policy if necessary when the final rules are adopted.
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EXECUTIVE COMPENSATION 58ADDITIONAL INFORMATION
| Foot Locker, Inc.
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Executive CompensationKEY COMPENSATION GOVERNANCE POLICIES
Stock Ownership Guidelines
We have meaningful stock ownership guidelines for our senior executives. At the end of 2020, all of the NEOs met or exceeded their applicable ownership guidelines. These guidelines are described on page 23.
Compensation Plans 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 Incentive Plan, LTIP elements, and AFG awards of the program are paid based upon performance as compared to the Company’s annual, two-year, and three-year financial plans, respectively, which are prepared each year by management, reviewed by the Finance Committee, and approved by the Board. No incentive awards are earned or paid unless the applicable performance goals are achieved. We believe that, on balance, the plans are 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 compensation for the NEOs is designed with a similar goal in mind. We believe that our equity grants are reasonable in relation to overall compensation. Stock options normally vest ratably over a three-year period and have a 10-year term, and time-based 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 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 continue
| WHAT WE DO |  | | WHAT WE DO NOT DO |  |  Align executive pay closely with Company’s performance and strategy
Set rigorous and objective performance goals Maintain a clawback policy Impose and monitor meaningful stock ownership guidelines Require a one-year time-based vesting period for earned PSU payouts following attainment of performance goals Include double-trigger change in control provisions in employment agreements and equity awards Mitigate undue risk in compensation programs Retain independent compensation consultant to advise the Human Capital Committee Hold annual “Say-on-Pay” advisory vote Conduct shareholder engagement outreach to regularly obtain feedback on compensation and other topics | |  No changes to in-flight performance cycles
No tax gross-up for any compensation, benefit, perquisite, or change in control payments (other than the IAP and relocation program that is available to all employees) No hedging or pledging of the Company’s stock No repricing of stock options without shareholder approval No stock options granted below fair market value No dividends or dividend equivalents on RSUs or PSUs No excessive severance benefits |
CLAWBACK POLICY We have adopted a clawback policy that provides for the recovery of incentive compensation paid in cash or equity if the Human Capital Committee determines that the 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 Code of Business Conduct or other policies. The Human Capital Committee is closely monitoring the proposed SEC rules regarding recoupment of incentive-based compensation, and will amend our policy as necessary. STOCK OWNERSHIP GUIDELINES We have meaningful stock ownership guidelines for our senior executives. At the end of 2021, all of the NEOs met or exceeded their applicable ownership guidelines. These guidelines are described on page 32. COMPENSATION 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 Annual Incentive Plan and PSU 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 management, reviewed by the Finance Committee, and approved by 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 LTI awards for the NEOs are designed with a similar goal in mind. We believe that our LTI 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. 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 continues to have the value of the stock portion of their 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. 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.
| 2022 Proxy Statement | 67 |
EXECUTIVE COMPENSATION Factor
| Description | ROIC as LTIP Measurement | As a retail company,In addition, there are certain other factors related to our compensation programs for the NEOs that we believe help reduce the likelihood that one of the potential risks we have is that managementour compensation programs 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, designedencourage our LTIP for senior management, including the NEOs,executives to take into account ROICundue risk, as well as net income in determining whether an annual incentive payout will be paid. | 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 payout. This helps prevent an individual executive from taking any action inconsistent with the business plan or otherwise exposing the Company to undue risk. | Incentive Targets | Annual Incentive Plan targets are based on the financial plan that is reviewed by the Finance Committee and approved by the Board. | Incentive Payments Proportional to Base Salary Rate | We believe that our annual incentive payouts are not outsized in relation to base salary rate. Mr. Johnson, as CEO, has the opportunity to earn at target 200% of his base salary rate in annual incentive payouts and 325% of his base salary rate in LTIP. Comparable percentages for the other NEOs are currently 75% for annual incentive payouts and 75% to 100% for the LTIP. | Annual Incentive Payout Caps | Annual incentive payouts to executives are capped and do not include excessive leverage. | Mix of Componentsdescribed below.| 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 PSU awards for senior management, including the NEOs, to take into account ROIC as well as Two-Year Average After-Tax Income in determining whether a PSU award payout will be paid. | | 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 payout. This helps prevent an individual executive from taking any action inconsistent with the business plan or otherwise exposing the Company to undue risk. | | Incentive Targets | | Annual Incentive Plan targets are based on the financial plan that is reviewed by the Finance Committee and approved by the Board. | | Annual Incentive Payout Caps | | Annual incentive payouts to executives are capped and do not include excessive leverage. | | 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. |
DELEGATION OF AUTHORITY The Human Capital Committee currently has delegated authority to its Chair to approve, between committee meetings, 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, 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 twice during 2021. The Human Capital Committee has not delegated authority to management to make stock option, RSU, or other equity-based awards. ACCOUNTING 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 Human Capital Committee’s allocation of compensation among the different components. The Human Capital Committee believes that in certain instances it is in the best interests of the Company and our shareholders 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 preliminary PSU payout would be adjusted by a TSR modifier, to represent the Company’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 TSR below the 30th percentile to 125% for TSR above the 80th percentile. The TSR modifier is designed to enhance the alignment of internal incentive plan payouts with changes in external shareholder value. Additionally, recognizing the Company’s change in vendor mix and expected substantial investments in the business, the Human Capital Committee reduced 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 PSU 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 future. 68 | Foot Locker, Inc. | |
EXECUTIVE COMPENSATION HUMAN CAPITAL COMMITTEE REPORT The Human 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 HUMAN CAPITAL COMMITTEE  |  |  |  | | | | | | KIMBERLY | ALAN D. | GUILLERMO G. | DARLENE | | UNDERHILL | FELDMAN | MARMOL | NICOSIA | | | | | | Chair | Member | Member | Member |
| HUMAN CAPITAL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Ms. Underhill, Mr. Feldman, Mr. Marmol, and Ms. Nicosia served on the Human Capital Committee during 2021. In addition, Ms. Clark served on the Human Capital Committee during 2021 Proxy Statement | 59
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Executive Compensation
COMPENSATION 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, are not reasonably likely to result in a material adverse effect on the Company. As part of this review, the independent compensation consultant to the Human 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 team members through the manager level, store managers, and store team members, and reviewed the features we have built into the compensation programs to discourage excessive risk taking by 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. Delegation of Authority
The Compensation Committee currently has delegated authority to its Chair to approve, between committee meetings, time-based 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, 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 twice during 2020. The Compensation Committee has not delegated authority to management to make stock option, RSU, or other equity-based awards.
Accounting and Tax Considerations of Executive Compensation
While we review both the accounting and tax effects of various components of compensation, these effects are not a significant factor in the Compensation Committee’s allocation of compensation among the different components. The Compensation Committee believes that in certain instances it is in the best interests of the Company and our shareholders to have the flexibility to pay compensation that is not tax deductible so that we may provide compensation consistent with our program and objectives.
Compensation Committee Report | 2022 Proxy Statement | 69 The Compensation 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 Committee
Underhill Chair Maxine Clark Member Alan D. Feldman Member Guillermo G. Marmol Member Darlene Nicosia Member
Compensation Committee Interlocks and Insider Participation
Ms. Clark, Mr. Feldman, Mr. Marmol, Ms. Nicosia, and Ms. Underhill served on the Compensation Committee during 2020. In addition, Ms. Turpin served on the Committee during 2020 prior to her retirement in May 2020. 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 Risk
The Company has completed a risk-related review and assessment of our compensation program and concluded that our executive compensation is not reasonably likely to result in a material adverse effect on the Company. As part of this review, the independent compensation consultant to the Compensation 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 team members through the manager level, store managers, and store team members, and reviewed the features we have built into the compensation programs to discourage excessive risk taking by 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.
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| 2021 Proxy Statement | 61
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10,055 21,233 34,186 123,142 66,856 — — 231,294 Martin 25,582 — 7,758 — 5,230 — — 25,859 — — — — — 64,429 Gray 5,552 — 599 — 641 — 12,406 9,975 34,461 16,000 122,782 — — 167,955 Jacobs(F) 29,323 — 2,443 279,800 — — — — — — — 35,000 1,750,000 2,096,566(A) The amounts shown under Medical Expense Reimbursement reflect amounts reimbursed in 2020, which may also include reimbursements of amounts submitted in 2020 for expenses incurred in 2019. (B) The amounts shown under Financial Planning reflect the total amounts paid, including fees. (C) The amounts shown under 401(k) Match and Excess Savings Plan reflect the Company’s matching contributions under the Foot Locker 401(k) Plan and Excess Savings Plan made to the NEO’s accounts. (D) For Messrs. Talwar and Gray, the amounts shown under Relocation reflect continuing expatriate relocation expenses for 2020 in connection with their relocations for roles as Executive Vice President and Chief Executive Officer—EMEA in Vianen, The Netherlands in 2019, and Vice President and General Manager of U.S. Foot Locker and Lady Foot Locker in New York, New York in 2016, respectively. The amounts shown under Relocation reflect amounts reimbursed in 2020, which may also include reimbursements of amounts submitted in 2020 for expenses incurred in 2019.2021 Proxy Statement
Executive Compensation | Executive Compensation |
Summary Compensation Table
| (a) | (b) | | (c) | | (d) | (e) | (f) | (g) | (h) | (i) | | | | | | | | | | | | | | | | | Salary | | Stock
Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value
and Non-Qualified Deferred Compensation Earnings | All Other Compensation | Total | | Name and Principal Position | Year | | ($)(1) | | ($)(2)(3) | ($)(2) | ($)(4) | ($)(5) | ($)(6) | ($) | | Richard A. Johnson | 2020 | | 996,667 | | 4,937,518 | 1,200,002 | 3,847,900 | 880,582 | 78,651 | 11,941,320 | | Chairman, President and | 2019 | | 1,137,500 | | 4,937,521 | 1,200,004 | 1,378,650 | 521,588 | 46,942 | 9,222,205 | | Chief Executive Officer | 2018 | | 1,100,000 | | 8,875,069 | 1,124,999 | 1,859,000 | 380,307 | 307,799 | 13,647,174 | | Lauren B. Peters | 2020 | | 653,333 | | 673,111 | 250,002 | 878,325 | 384,221 | 81,301 | 2,920,293 | | Executive Vice President and | 2019 | | 693,750 | | 950,053 | 250,006 | 315,309 | 298,364 | 18,455 | 2,525,937 | | Chief Financial Officer | 2018 | | 675,000 | | 1,925,101 | 250,001 | 427,781 | 182,072 | 13,404 | 3,473,359 | | Vijay Talwar | 2020 | | 606,667 | | 737,544 | 250,002 | 780,000 | 170,661 | 231,294 | 2,776,168 | Executive Vice President and
Chief Executive Officer—EMEA | 2019 | | 650,000 | | 737,575 | 250,006 | — | 68,966 | 9,914 | 1,647,495 | | | | | | | | | | | | | | W. Scott Martin | 2020 | | 538,659 | | 641,277 | 200,000 | 549,398 | 133,364 | 64,429 | 2,127,127 | | Executive Vice President, Chief Executive | 2019 | | 518,750 | | 612,563 | 200,015 | 204,336 | 63,354 | 24,622 | 1,560,286 | | Officer—Asia Pacific and Chief Strategy and Development Officer | 2018 | | 425,000 | | 958,228 | 112,509 | 233,431 | 62,179 | 23,980 | 1,753,148 | | Andrew I. Gray | 2020 | | 512,663 | | 419,349 | 75,002 | 613,695 | 60,216 | 167,955 | 1,848,880 | Executive Vice President and
Chief Commercial Officer | | | | | | | | | | | | Stephen D. Jacobs(7) | 2020 | | 452,083 | | 375,019 | 375,000 | — | — | 2,096,566 | 3,298,668 | | Former Executive Vice President and | 2019 | | 868,750 | | 1,250,058 | 375,009 | 520,381 | 369,531 | 31,584 | 3,415,313 | | Chief Executive Officer—North America | 2018 | | 850,000 | | 2,600,048 | 250,001 | 1,336,200 | 246,502 | 23,980 | 5,306,731 |
Notes to Summary Compensation Table
| (1) | The amounts in columns (c) and (f) reflect the annual base salaries and non-equity incentive plan compensation, respectively, earned by our NEOs for the designated years. For 2020, these combined amounts represented the following percentages of the NEOs’ total compensation: Mr. Johnson (40.6%), Ms. Peters (52.4%), Mr. Talwar (49.9%), Mr. Martin (51.2%), Mr. Gray (60.9%), and Mr. Jacobs (13.7%). Information on the NEOs’ employment agreements appears beginning on page 64. |
| (2) | The amounts reflected in columns (d) and (e) reflect the stock and option awards granted in the designated years. The amounts represent the aggregate grant date fair value of the awards granted in each respective year calculated in accordance with stock-based compensation accounting rules. A discussion of the assumptions used in computing the award values may be found in Note 20 to our financial statements in our 2020 Annual Report on Form 10-K. As provided under the SEC’s rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. See theGrants of Plan-Based Awards Tablebeginning on page 66 for additional information on awards granted in 2020. The amounts shown in the table do not necessarily reflect the actual value that may be recognized by the NEOs.| EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
| (3) | The amounts in column (d) include the grant date fair value of PSUsSUMMARY COMPENSATION TABLE | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Name and Principal Position | Year | Salary
($)(1) | Bonus
($)(2) | Stock
Awards
($)(3)(4) | Option Awards
($)(3) | 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) |
| (1) | The amounts in columns (c) and (g) reflect the annual base salaries and non-equity incentive plan compensation, respectively, earned by our NEOs for the designated years. For 2021, these combined amounts represented the following percentages of the NEOs’ total compensation: Mr. Johnson (36.8%), Mr. Page (33.2%), Mr. Bracken (46.5%), Mr. Martin (50.8%), Mr. Gray (50.4%), Ms. Peters (71.2%), and Mr. Talwar (14.9%). Information on the NEOs’ employment agreements, as applicable, appears beginning on page 72. |
| (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 columns (e) and (f) reflect the stock and option awards granted in the designated years. The amounts represent the aggregate grant date fair value of the awards granted in each respective year computed in accordance with stock-based compensation accounting rules. A discussion of the assumptions used in computing the award values may be found in Note 21 to our financial statements in our Annual Report, which is available at investors.footlocker-inc.com/ar. As provided under the SEC’s rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. See the Grants of Plan-Based Awards in Fiscal 2021 beginning on page 74 for additional information on awards granted in 2021. The amounts shown in the table do not necessarily reflect the actual value that may be recognized by the NEOs. |
| (4) | The amounts in column (e) include the grant date fair value of PSU awards granted for the 2021-22, 2020-21, and 2019-20 long-term performance measurement periods, of 2020-21, 2019-20, 2018-19, and 2018-20, valued at grant date based upon the probable outcome of meeting the performance conditions, which is based on the target performance level. The amounts are consistent with the estimates of the aggregate compensation cost to be recognized over the service period determined at the grant date under stock-based compensation accounting rules, and exclude the effect of estimated forfeitures. Assuming the maximum performance level, the grant date fair value of the PSU awards granted for the 2021-22 long-term performance period would be $9,660,040 for Mr. Johnson; $999,044 for Mr. Page; $1,195,289 for Mr. Bracken; $1,168,537 for Mr. Martin; $1,168,537 for Mr. Gray; and $1,212,390 for Mr. Talwar. This column also includes RSU awards, where applicable. See the Grants of Plan-Based Awards in Fiscal 2021 beginning on page 74 for additional information on the awards granted in 2021. |
| (5) | The amounts in column (g) reflect the cash incentive bonuses earned under the Annual Incentive Plan for the designated years, which amounts are paid to the NEO in the following year (subject to the NEO’s employment on such payment date). |
| (6) | The amounts in column (h) represent the annual change in pension value for the designated years. See pages 87 through 88 for more information on fiscal 2021 pension benefits. |
| (7) | The amounts in column (i) represent perquisites and other compensation attributable to the NEOs for 2021, valued at the incremental cost to the Company of providing them, which represents the actual cost, as reflected in the table below. |
| Name | Auto
Allow.
($) | 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 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. |
| (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 Excess Cash Plan, 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 defined in the trust 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 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 entitled to substantially the same benefits, and subject 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 these arrangements are described below. | 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. |
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EXECUTIVE COMPENSATION | (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. |
Messrs. Johnson, Page, Bracken, Gray, and Martin are entitled to participate in all 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 and financial planning expenses, and any other plans subsequently offered to our senior executives. The executives’ agreements and offer letters, as applicable, include definitions of certain terms such as “Cause” (i.e., dismissal) by the company under certain circumstances, “Good Reason” (i.e., resignation under certain circumstances), “Change in Control” (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. | 2022 Proxy Statement | 73 |
| EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2021 The following table shows the awards made to the NEOs in 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 |
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| 2022 Proxy Statement | 75 |
EXECUTIVE COMPENSATION | (1) | Annual Incentive Awards |
The amounts in columns (c), (d), and (e) reflect the payment levels at threshold, target, and maximum performance for the 2021 fiscal year under the Annual Incentive Plan and reflect the potential amounts to be paid at the end of the period if the applicable performance goals are achieved. The estimated annual incentive payouts are based on a percentage of the NEO’s base salary rate, as shown in the table below: | | 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 |
| (A) | 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. |
Although 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 completion of the plan year. For Mr. Page, provided the performance goals for the 2020-21 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 PSUs that would be paid out at threshold, target, and maximum performance if the applicable performance goals are achieved for the 2020-21 performance period. The threshold, target, and maximum number of PSUs for Mr. Page 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, 2021 for Mr. Page was $59.73. Similarly, the grant date fair value of the PSUs are based on the closing stock price on the associated grant date. The actual number of PSUs paid out will be based on the Company’s performance compared to targets. The value of the PSUs received by Mr. Page will depend upon the Company’s stock price on the payment date in 2023. No dividends are paid or accrued in connection with the PSUs. The aggregate payout in stock at threshold, target, and maximum performance for Mr. Page is based on a percentage of his base salary rate in the second year of the performance period. The PSU award values for the 2020-21 performance period for Mr. Page at threshold, target, and maximum performance are listed in the following table: | | Threshold | Target | Maximum | | Name | ($) | ($) | ($) | | 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. |
For each of the NEOs, 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 PSUs that would be paid out at threshold, target, and maximum performance if the applicable 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 $59.73. Similarly, the grant date fair value of the PSUs are based on the closing stock price on the associated grant date. The actual number of PSUs paid out will be based on the Company’s performance compared to targets. The value of the PSUs received by an NEO will depend upon the Company’s stock price on the payment date in 2024. No dividends are paid or accrued in connection with the PSUs. The aggregate payout in stock at threshold, target, and maximum performance for each of the NEOs is based on a percentage of their base salary rate in the first year of the performance period. The PSU award values for the 2021-22 performance period for the NEOs at threshold, target, and maximum performance are listed in the following table: | | Threshold | Target | Maximum | | Name | ($) | ($) | ($) | | 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 |
| (A) | Mr. Page joined the Company as Executive Vice President and Chief Financial Officer in April 2021. His PSU award was prorated for the 2021-22 performance period. |
| (B) | Mr. Talwar forfeited this PSU award in connection with the termination of his employment. |
76 | Foot Locker, Inc. | |
EXECUTIVE COMPENSATION The amounts in column (j) reflect the number of stock options awarded 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 NEO retires, becomes disabled, or dies while employed by the Company or one of its subsidiaries, all unexercised options that are then exercisable and 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 2021 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 schedules for the stock options granted to the NEOs in 2021 are as follows: | | | 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 in column (i) reflect the number of RSUs awarded for the 2021 fiscal year under the Stock Incentive Plan. The awards will vest according to the schedules below, provided that the NEO remains employed by the Company through the vesting date. No dividends are paid or accrued for RSU awards. | | Shares | | | Name | Grant Date | (#) | Vest Date | | Johnson | 03/24/21 | 30,032 | 03/24/24 | | Page | 04/12/21 | 4,185 | 04/12/22 | | 04/12/21 | 4,186 | 04/12/23 | | 04/12/21 | 4,186 | 04/12/24 | | 04/13/21 | 3,168 | 04/13/24 | | Bracken | 03/24/21 | 3,716 | 03/24/24 | | 11/16/21 | 10,661 | 11/16/24 | | Martin | 03/24/21 | 3,633 | 03/24/24 | | 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. |
The amounts in column (l) reflect the aggregate grant date fair values of the RSU, PSU, and stock option awards granted in 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 Annual Report, which is available at investors.footlocker-inc.com/ar. For the RSUs, the fair values 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 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 PSUs that would be received at that level by the closing price 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,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 excludecorresponding grant dates, are shown in the effect of estimated forfeitures. table below. | | | | | | | | 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 PSUs granted for the long-term performance measurement period of 2020-21 would be $7,475,016$445,537 for Mr. Page, and for the long-term performance period of 2021-22, would be $9,660,000 for Mr. Johnson; $1,400,020 for Ms. Peters; $975,007$999,037 for Mr. Talwar; $882,441Page; $1,195,240 for Mr. Martin;Bracken; $1,168,500 for Mr. Martin, $1,168,500 for Mr. Gray, and $794,357$1,212,346 forMr. Gray. This column also includes time-based RSU awards, where applicable. See theGrants of Plan-Based Awards Tablebeginning on page 66 for additional information on the awards granted in 2020. |
Talwar. | (4) | The amounts in column (f) reflect the cash incentive bonuses earned under the Annual Incentive Plan for the designated years, which amounts are paid to the NEO in the following year (subject to the NEO’s employment on such payment date). The table below reflects the cash amounts paid to the NEOs in each designated year. |
| | Paid in 2018 | | Paid in 2019 | | Paid in 2020 | | To Be Paid in 2021 | Name | Annual Incentive Plan
Cash Payment for 2017
($) | | Annual Incentive Plan Cash
Payment for 2018
($) | | Annual Incentive Plan Cash
Payment for 2019
($) | | Annual Incentive Plan
Cash Payment for 2020
($) | | Johnson | — | | 1,859,000 | | 1,378,650 | | 3,847,900 | | Peters | — | | 427,781 | | 315,309 | | 878,325 | | Talwar | N/A | | N/A | | — | | 780,000 | | Martin | — | | 233,431 | | 204,336 | | 549,398 | | Gray | N/A | | N/A | | N/A | | 613,695 | | Jacobs | — | | 1,336,200 | | 520,381 | | N/A |
| (5) | The amounts in column (g) represent the annual change in pension value during each of our last three fiscal years. See page 74 for more information on 2020 pension benefits. | 2022 Proxy Statement | 77 |
| (6) | The amounts in column (h) represent perquisites and other compensation attributable to the NEOs for 2020, valued at the incremental cost to the Company of providing them, which represents the actual cost, as reflected in the table below. |
| | Auto. Allow. | Car Service Reimb. | Med. Expense Reimb. | Accrual for Post-Ret. Med. | Supp. LTD Ins. Prem. | Univ. Life Ins. Prem. | Financial Planning | 401(k)
Match
and Excess Savings Plan | Relo. | Foreign Earnings | Expatriate Tax Payments | Vacation Payout | Accrued Severance Benefits | Total | | Name | ($) | ($) | ($)(A) | ($) | ($) | ($) | ($)(B) | ($)(C) | ($)(D) | ($)(E) | ($)(E) | ($) | ($) | ($) | | Johnson | 14,309 | 3,518 | 8,292 | 22,640 | 6,696 | 4,221 | 9,000 | 9,975 | — | — | — | — | — | 78,651 | | Peters | 9,997 | — | 2,695 | 56,632 | — | 2,002 | — | 9,975 | — | — | — | — | — | 81,301 | | Talwar | — | — | 2,213 | — | 4,881 | 2,914 | 10,055 | 21,233 | 34,186 | 123,142 | 66,856 | — | — | 231,294 | | Martin | 25,582 | — | 7,758 | — | 5,230 | — | — | 25,859 | — | — | — | — | — | 64,429 | | Gray | 5,552 | — | 599 | — | 641 | — | 12,406 | 9,975 | 34,461 | 16,000 | 122,782 | — | — | 167,955 | | Jacobs(F) | 29,323 | — | 2,443 | 279,800 | — | — | — | — | — | — | — | 35,000 | 1,750,000 | 2,096,566 |
| (A) | The amounts shown under Medical Expense Reimbursement reflect amounts reimbursed in 2020, which may also include reimbursements of amounts submitted in 2020 for expenses incurred in 2019.| EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
| (B) | OUTSTANDING EQUITY AWARDS AT FISCAL 2021 YEAR-END The amounts shown under Financial Planning reflectfollowing table shows the total amounts paid, including fees.number of outstanding stock options, both vested and unvested, the number of unvested shares of RSUs, and the number of PSUs, both earned but unvested and unearned, held by the NEOs at the end of the 2021 fiscal year: | | | | | Option Awards | | | | | | | | Stock Awards | | | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable(1)
(#) | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable(1)
(#) | | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned Options
(#) | | Option
Exercise
Price
($) | | 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 |
78 | Foot Locker, Inc. | 2022 Proxy Statement | 79 |
| (C) | The amounts shown under 401(k) Match and Excess Savings Plan reflect the Company’s matching contributions under the Foot Locker 401(k) Plan and Excess Savings Plan made to the NEO’s accounts.| EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
| (D) | For Messrs. Talwar and Gray, the amounts shown under Relocation reflect continuing expatriate relocation expenses for 2020 in connection with their relocations for roles as Executive Vice President and Chief Executive Officer—EMEA in Vianen, The Netherlands in 2019, and Vice President and General Manager of U.S. Foot Locker and Lady Foot Locker in New York, New York in 2016, respectively. The amounts shown under Relocation reflect amounts reimbursed in 2020, which may also include reimbursements of amounts submitted in 2020 for expenses incurred in 2019. |
| | | | | 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 |
62
80 | Foot Locker, Inc. | 2022 Proxy Statement | 81 | Foot Locker, Inc. | |
| 2021 Proxy Statement | 63
|
Executive Compensation
| (E) | For Messrs. Talwar and Gray, the amounts shown under Foreign Earnings and Expatriate Tax Payments reflect expatriate compensation for 2020 in connection with their roles as Executive Vice President and Chief Executive Officer—EMEA in Vianen, The Netherlands, and Executive Vice President and Chief Commercial Officer in New York, New York, respectively. Under Foreign Earnings, the amounts shown include expatriate benefits and allowances for certain goods and services differential, housing, education, automobile costs, and tax preparation assistance in connection with their international assignments. Messrs. Talwar and Gray 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 amounts shown include tax equalization payments, and U.S. and foreign tax payments net of hypothetical tax deductions, in connection with their international assignments. These payments were made under the IAP and are designed to facilitate these assignments by holding these team members responsible for the tax liabilities they would have incurred had they remained in their home countries. |
| (F) | The amounts shown for Mr. Jacobs include the perquisites attributable to him for 2020 prior to the termination of his employment. Additional information on termination payments for Mr. Jacobs is provided beginning on page 78 underPotential Payments Upon Termination or Change in Control.| EXECUTIVE COMPENSATION | EXECUTIVE COMPENSATION |
| (7) | Mr. Jacobs ceased to serve as Executive Vice President and Chief Executive Officer—North America effective July 22, 2020, and departed from the Company effective August 31, 2020, under circumstances the Compensation Committee determined constituted a termination without cause under the Company’s employment agreement with Mr. Jacobs thereby requiring the Company to pay Mr. Jacobs 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 Balance Plan, 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 defined in the trust 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 Agreements
We have employment agreements with each of the NEOs, other than Messrs. Gray and Jacobs, and we describe the material terms of each of these agreements below. Information on estimated potential payments and benefits upon termination of the agreements is described underPotential Payments Upon Termination or Change in Controlbeginning on page 78.
Johnson
Position. We have an employment agreement with Mr. Johnson in connection with his position as Chief Executive Officer.
Term. The term of this agreement ends on January 31, 2022. 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 Salary 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 2020 base salary rate was $1,150,000. As Chief Executive Officer, for 2020, Mr. Johnson’s annual bonus at target under the Annual Incentive Plan was 200% of his base salary, and his annual bonus at target under the LTIP was 325% of his base salary at the start of the performance period.
Benefit Plans and Perquisites. Mr. Johnson is entitled to participate in all incentive and equity plans offered to senior executives, as well as benefits, including retirement plans, company-paid life insurance, long-term disability coverage, and reimbursement for certain medical, transportation, and financial planning expenses, and any other plans subsequently offered to our senior executives.
Non-Compete Provision. Mr. Johnson’s agreement provides that he may not compete with the Company or solicit our team members for two years following the termination of his employment agreement.
Certain Defined Terms. Mr. Johnson’s agreement includes definitions of certain terms such as “Cause” (i.e., dismissal), “Good Reason” (i.e., resignation), “Change in Control” (e.g., the acquisition of 35% or more of the Company’s outstanding stock), and “Disability.”
| | | | | Option Awards | | | | | | | | Stock Awards | | | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | Name | |
Number of
Securities
Underlying
Unexercised
Options
Exercisable(1)
(#) | |
Number of
Securities
Underlying
Unexercised
Options
Unexercisable(1)
(#) | |
Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned Options
(#) | |
Option
Exercise
Price
($) | |
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 | | – | | – | | – | | – |
64
82 | Foot Locker, Inc. | 2022 Proxy Statement | 83 | Foot Locker, Inc. | |
Executive Compensation
Peters, Talwar, and Martin
Position/Term/Base Salary. We have substantially identical employment agreements with these executives in their current positions, as follows:
| Base
Term Salary Rate | Name Position | End Date | ($) | Peters Executive Vice President and Chief Financial Officer | 1/31/2022 | 700,000 | Talwar Executive Vice President and Chief Executive Officer—EMEA | 1/31/2022 | 650,000 | Martin Executive Vice President, Chief Executive Officer—Asia Pacific and Chief Strategy and Development Officer | 1/31/2022 | 600,000 |
The terms of the agreements will automatically be extended for another year unless notice of non-renewal is given by the October 31 prior to the then-current expiration of the term. We pay these executives annual base salaries at rates not less than their salaries at the start of their agreements. The executives’ base salary rates for 2020 are shown in the table above.
Benefit Plans and Perquisites. These executives are entitled to participate in all incentive and equity plans offered to senior executives in effect at the start of their agreements, as well as benefits, including retirement plans, company-paid life insurance, long-term disability coverage, and reimbursement for certain medical and financial planning expenses, and any other plans subsequently offered to our senior executives.
Non-Compete Provision. The executives’ agreements provide that they may not compete with the Company or solicit our team members for two years following the termination of their employment agreements.
Certain Defined Terms. The executives’ agreements include definitions of certain terms such as “Cause” (i.e., dismissal), “Good Reason” (i.e., resignation), “Change in Control” (e.g., the acquisition of 35% or more of the Company’s outstanding stock), and “Disability.”
Gray
Position/Base Salary. While we do not have an employment agreement with Mr. Gray, he is entitled to substantially the same benefits, and subject to substantially the same provisions, as Ms. Peters and Messrs. Talwar and Martin under his offer letter, as follows:
Name | Position | Base
Salary Rate
($) | Gray | Executive Vice President and Chief Commercial Officer | 600,000 |
Benefit Plans and Perquisites. Mr. Gray is entitled to participate in all incentive and equity plans offered to senior executives, as well as benefits, including retirement plans, company-paid life insurance, long-term disability coverage, and reimbursement for certain medical and financial planning expenses, and any other plans subsequently offered to our senior executives.
Non-Compete Provision. Mr. Gray may not compete with the Company or solicit our team members for two years following the termination of his employment.
Certain Defined Terms. Mr. Gray’s offer letter includes definitions of certain terms such as “Cause” (i.e., dismissal), “Good Reason” (i.e., resignation), “Change in Control” (e.g., the acquisition of 35% or more of the Company’s outstanding stock), and “Disability.”
Jacobs
Position/Term/Base Salary. We had an employment agreement with Mr. Jacobs as Executive Vice President and Chief Executive Officer—North America substantially in the same form as the agreements described above for Ms. Peters and Messrs. Talwar and Martin. Mr. Jacobs ceased to serve as Executive Vice President and Chief Executive Officer—North America effective July 22, 2020, and departed from the Company effective August 31, 2020, under circumstances the Compensation Committee determined constituted a termination without cause, at which time his employment agreement terminated. Certain obligations under this agreement continue post-termination, such as Mr. Jacobs’s non-competition obligation.
Name | Position | Term
End Date | Base
Salary Rate
($) | Jacobs | Former Executive Vice President and Chief Executive Officer—North America | 8/31/2021 | 875,000 |
| 2021 Proxy Statement | |
Executive Compensationexecutive compensation
Grants of Plan-Based Awards Table
The following table shows the awards made to the NEOs in 2020 under the Annual Incentive Plan and the LTIP, as well as the RSU and stock option awards under the Stock Incentive Plan:
| | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | (k) | | (l) | | Name | | Grant Date | | Threshold ($) | | 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
($/Sh) | | Grant Date Fair Value of Stock and Option Awards
($)(5) | | Johnson | | 06/13/20(1) | | 498,334 | | 1,993,334 | | 3,986,668 | | | | | | | | | | | | | | | | | 11/17/20(2) | | | | | | | | 23,348 | | 93,391 | | 186,782 | | | | | | | | 3,737,508 | | | 03/25/20(3) | | | | | | | | | | | | | | | | 238,746 | | 21.60 | | 1,200,002 | | | 03/25/20(4) | | | | | | | | | | | | | | 55,556 | | | | | | 1,200,010 | | Peters | | 06/13/20(1) | | 122,500 | | 490,000 | | 980,000 | | | | | | | | | | | | | | | | | 11/17/20(2) | | | | | | | | 4,373 | | 17,492 | | 34,983 | | | | | | | | 700,030 | | | 03/25/20(3) | | | | | | | | | | | | | | | | 49,739 | | 21.60 | | 250,002 | | | 03/25/20(4) | | | | | | | | | | | | | | 11,575 | | | | | | 250,020 | | Talwar | | 06/13/20(1) | | 113,750 | | 455,000 | | 910,001 | | | | | | | | | | | | | | | | | 11/17/20(2) | | | | | | | | 3,046 | | 12,182 | | 24,363 | | | | | | | | 487,524 | | | 03/25/20(3) | | | | | | | | | | | | | | | | 49,739 | | 21.60 | | 250,002 | | | 03/25/20(4) | | | | | | | | | | | | | | 11,575 | | | | | | 250,020 | | Martin | | 06/13/20(1) | | 100,999 | | 403,994 | | 807,989 | | | | | | | | | | | | | | | | | 11/17/20(2) | | | | | | | | 2,757 | | 11,026 | | 22,050 | | | | | | | | 441,261 | | | 03/25/20(3) | | | | | | | | | | | | | | | | 39,791 | | 21.60 | | 200,001 | | | 03/25/20(4) | | | | | | | | | | | | | | 9,260 | | | | | | 200,016 | | Gray | | 06/13/20(1) | | 96,124 | | 384,497 | | 768,995 | | | | | | | | | | | | | | | | | 11/17/20(2) | | | | | | | | 2,482 | | 9,925 | | 19,849 | | | | | | | | 397,199 | | | 03/25/20(3) | | | | | | | | | | | | | | | | 14,922 | | 21.60 | | 75,002 | | | 03/25/20(4) | | | | | | | | | | | | | | 3,473 | | | | | | 75,017 | | Jacobs | | 03/25/20(3) | | | | | | | | | | | | | | | | 74,608 | | 21.60 | | 375,000 | | | 03/25/20(4) | | | | | | | | | | | | | | 17,362 | | | | | | 375,019 |
| (1) | Annual Incentive Awards | (1) | The Vesting Schedules for the options shown in columns (b) and (c) are as follows: |
Amounts shown reflect the payment levels at threshold, target, and maximum performance for the 2020 fiscal year under the Annual Incentive Plan and reflect the potential amounts that would be paid at the end of the period if the applicable performance goals were achieved. The estimated annual incentive payouts are based on a percentage of the executive’s base salary rate, as shown in the table below:
| Name | Threshold
(%) | Target
(%) | Maximum
(%) | | Johnson | 50 | 200 | 400 | | Peters, Talwar, Martin, and Gray | 18.75 | 75 | 150 | | Jacobs | 25 | 100 | 200 |
Although Mr. Jacobs participated in the Annual Incentive Plan in 2020, he was not eligible to receive a payment under the plan because his employment terminated prior to the completion of the plan year.
The annual incentive payouts actually made to the NEOs for 2020 are shown in Note 4 to the Summary Compensation Table on page 62.
66
| 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 | | Johnson | 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 | | 1,156,126 | | | Foot Locker, Inc. | |
Executive Compensation
| (2) | LTIP Awards| Page | 8,333 | 04/13/2021 | 04/13/2022 | 04/13/2023 | 04/13/2024 | |
Provided the performance goals for the 2020-21 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 PSUs, and (b) the payout would be subject to a time-based, one-year vesting period following the end of the performance measurement period before payout to the executives. Columns (f), (g), and (h) show the number of PSUs that would be paid out at threshold, target, and maximum performance if the applicable performance goals are achieved for the 2020-21 performance measurement period.
The threshold, target, and maximum number of PSUs 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 November 17, 2020 for each of the NEOs was $40.02. Similarly, the grant date fair value of the PSU awards are based on the closing stock price on this grant date. The actual number of PSUs paid out will be based on the Company’s performance compared to targets. The value of the PSUs received by an NEO will depend upon the Company’s stock price on the payment date in 2023. No dividends are paid or accrued for the PSUs.
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 NEO at threshold, target, and maximum performance is shown in the table below.
| Name | Threshold
(%) | Target
(%) | Maximum
(%) | | Johnson | 81.25 | 325 | 650 | | Peters and Jacobs | 25 | 100 | 200 | | Talwar, Martin, and Gray | 18.75 | 75 | 150 |
Mr. Jacobs’s employment terminated prior to the Company granting LTIP awards in connection with the 2020-21 performance measurement period. No amounts would be paid to the NEOs under the LTIP awards unless the performance goals for the performance measurement period are achieved.
| (3) | Stock Option Grants | 8,333 | | | | | |
The amounts in column (j) reflect the number of stock options granted in 2020 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 executive retires, becomes disabled, or dies while employed by the Company or one of its subsidiaries, all unexercised options that are then exercisable and 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 2020 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 schedule for options granted to the executives in 2020 is as follows:
| Name | Grant Date | Shares (#) | Vest Date: Shares (#) | Vest Date: Shares
(#) | Vest Date: Shares (#) | | Johnson | 03/25/20 | 238,746 | 03/25/21: | 79,582 | 03/25/22: | 79,582 | 03/25/23: | 79,582 | | Peters and Talwar | 03/25/20 | 49,739 | 03/25/21: | 16,579 | 03/25/22: | 16,580 | 03/25/23: | 16,580 | | Martin | 03/25/20 | 39,791 | 03/25/21: | 13,263 | 03/25/22: | 13,264 | 03/25/23: | 13,264 | | Gray | 03/25/20 | 14,922 | 03/25/21: | 4,974 | 03/25/22: | 4,974 | 03/25/23: | 4,974 | | Jacobs | 03/25/20 | 74,608 | 03/25/21: | 24,869 | 03/25/22: | * | 03/25/23: | * |
| * | Unvested portion of option grant cancelled upon termination of employment. | | Bracken | 934 | 03/26/2014 | 03/26/2015 | 03/26/2016 | 03/26/2017 | | 1,250 | 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 | | 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 | | | | |
The amounts shown in the table below represent the number of RSUs awarded under the Stock Incentive Plan on the grant date. The award will vest according to the schedule below, provided that the executive remains employed by the Company through the vesting date. No dividends are paid or accrued for RSU awards.
84 Name | Grant Date | Shares
(#) | Vest Date | Johnson | 03/25/20 | 55,556 | 03/25/23 | Peters and Talwar | 03/25/20 | 11,575 | 03/25/23 | Martin | 03/25/20 | 9,260 | 03/25/23 | Gray | 03/25/20 | 3,473 | 03/25/23 | Jacobs | 03/25/20 | 17,362* | 03/25/23 | Foot Locker, Inc. | |
| * | Mr. Jacobs forfeited 14,827 of these RSUs in connection with the termination of his employment. The remaining 2,535 RSUs were accelerated. |
| 2021 Proxy Statement | 67
|
Executive Compensation
The amounts shown in column (l) reflect the aggregate grant date fair values of the RSU, PSU, and stock option awards granted in 2020, calculated in accordance with stock-basedexecutive compensation accounting rules. A discussion of the assumptions used in computing the award values are found in Note 20 to our financial statements in our 2020 Annual Report on Form 10-K. For option awards, the values are calculated by multiplying the Black-Scholes value by the number of options granted. For RSUs, the fair values 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 PSUs in connection with the 2020-21 performance period, 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 PSUs that would be received at that level by the closing price 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. All of these values are shown in the table below.
| Name | LTIP PSU Awards
Granted on
November 17, 2020
($) | Black-Scholes
Value for Stock Options Granted on March 25, 2020
($) | Time-Based
RSU Awards Granted on
March 25, 2020
($) | | Johnson | 40.02 | 5.03 | 21.60 | | Peters, Talwar, Martin, and Gray | 40.02 | 5.03 | 21.60 | | Jacobs | — | 5.03 | 21.60 |
Assuming the maximum performance level, the grant date fair value of the PSUs granted for the long-term performance measurement period of 2020-21 would be $7,475,016 for Mr. Johnson; $1,400,020 for Ms. Peters; $975,007 for Mr. Talwar; $882,441 for Mr. Martin; and $794,357 for Mr. Gray.
Outstanding Equity Awards at Fiscal Year-End
The following table shows the number of outstanding stock options, both vested and unvested, the number of unvested shares of RSUs, and the number of PSUs, both earned but unvested and unearned, held by the NEOs at the end of the 2020 fiscal year:
| | | | | Option Awards | | | | | | | | Stock Awards | | | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | Name | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1) | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1) | | Equity
Incentive
Plan Awards: Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | Option
Exercise
Price
($) | | 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 | | — | | — | | — | | — | | | | 60,728 | | 30,365 | | — | | 44.78 | | 03/28/2028 | | — | | — | | — | | — | | | | 23,276 | | 46,553 | | — | | 58.94 | | 03/27/2029 | | — | | — | | — | | — | | | | — | | 238,746 | | — | | 21.60 | | 03/25/2030 | | — | | — | | — | | — | | | | — | | — | | — | | — | | — | | 20,360 | | 892,175 | | — | | — | | | | — | | — | | — | | — | | — | | 25,123 | | 1,100,890 | | — | | — | | | | — | | — | | — | | — | | — | | 55,556 | | 2,434,464 | | — | | — | | | | — | | — | | — | | — | | — | | 62,824 | | 2,752,948 | | — | | — | | | | — | | — | | — | | — | | — | | — | | — | | 15,853 | | 694,678 | | | | — | | — | | — | | — | | — | | — | | — | | 23,348 | | 1,023,109 | | | | — | | — | | — | | — | | — | | — | | — | | 27,216 | | 1,192,605 |
68
| 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 | * | | 194,553 | | | Foot Locker, Inc. | |
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) | | Peters | | 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 | | — | | — | | — | | — | | | 28,510 | | — | | — | | 63.79 | | 03/23/2026 | | — | | — | | — | | — | | | 32,093 | | — | | — | | 72.83 | | 03/22/2027 | | — | | — | | — | | — | | | 13,495 | | 6,748 | | — | | 44.78 | | 03/28/2028 | | — | | — | | — | | — | | | 4,849 | | 9,699 | | — | | 58.94 | | 03/27/2029 | | — | | — | | — | | — | | | — | | 49,739 | | — | | 21.60 | | 03/25/2030 | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | 4,242 | | 185,884 | | — | | — | | | — | | — | | — | | — | | — | | 5,444 | | 238,556 | | — | | — | | | — | | — | | — | | — | | — | | 5,583 | | 244,647 | | — | | — | | | — | | — | | — | | — | | — | | 11,575 | | 507,217 | | — | | — | | | — | | — | | — | | — | | — | | 15,421 | | 675,749 | | — | | — | | | — | | — | | — | | — | | — | | — | | — | | 2,970 | | 130,145 | | | — | | — | | — | | — | | — | | — | | — | | 4,083 | | 178,917 | | | — | | — | | — | | — | | — | | — | | — | | 4,373 | | 191,625 | | Talwar | | 18,166 | | — | | — | | 67.07 | | 09/23/2026 | | — | | — | | — | | — | | | 19,256 | | — | | — | | 72.83 | | 03/22/2027 | | — | | — | | — | | — | | | 8,097 | | 4,049 | | — | | 44.78 | | 03/28/2028 | | — | | — | | — | | — | | | 4,849 | | 9,699 | | — | | 58.94 | | 03/27/2029 | | — | | — | | — | | — | | | — | | 49,739 | | — | | 21.60 | | 03/25/2030 | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | 3,350 | | 146,797 | | — | | — | | | — | | — | | — | | — | | — | | 4,083 | | 178,917 | | — | | — | | | — | | — | | — | | — | | — | | 4,242 | | 185,884 | | — | | — | | | — | | — | | — | | — | | — | | 9,338 | | 409,191 | | — | | — | | | — | | — | | — | | — | | — | | 11,575 | | 507,217 | | — | | — | | | — | | — | | — | | — | | — | | — | | — | | 2,068 | | 90,620 | | | — | | — | | — | | — | | — | | — | | — | | 3,046 | | 133,476 | | | — | | — | | — | | — | | — | | — | | — | | 3,062 | | 134,177 | | Martin | | 17,442 | | — | | — | | 55.02 | | 06/13/2026 | | — | | — | | — | | — | | | 14,442 | | — | | — | | 72.83 | | 03/22/2027 | | — | | — | | — | | — | | | 6,073 | | 3,037 | | — | | 44.78 | | 03/28/2028 | | — | | — | | — | | — | | | 3,879 | | 7,760 | | — | | 58.94 | | 03/27/2029 | | — | | — | | — | | — | | | — | | 39,791 | | — | | 21.60 | | 03/25/2030 | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | 2,513 | | 110,120 | | — | | — | | | — | | — | | — | | — | | — | | 2,722 | | 119,278 | | — | | — | | | — | | — | | — | | — | | — | | 3,394 | | 148,725 | | — | | — | | | — | | — | | — | | — | | — | | 7,282 | | 319,097 | | — | | — | | | — | | — | | — | | — | | — | | 9,260 | | 405,773 | | — | | — | | | — | | — | | — | | — | | — | | 14,344 | | 628,554 | | — | | — | | | — | | — | | — | | — | | — | | — | | — | | 1,750 | | 76,685 | | | — | | — | | — | | — | | — | | — | | — | | 2,042 | | 89,480 | | | — | | — | | — | | — | | — | | — | | — | | 2,757 | | 120,812 |
| 2021 Proxy Statement | 69
| | Talwar | 18,166 | 09/23/2016 | 09/23/2017 | 09/23/2018 | 09/23/2019 |
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 | | — | | — | | — | | — | | | 4,048 | | 2,025 | | — | | 44.78 | | 03/28/2028 | | — | | — | | — | | — | | | 1,455 | | 2,910 | | — | | 58.94 | | 03/27/2029 | | — | | — | | — | | — | | | — | | 14,922 | | — | | 21.60 | | 03/25/2030 | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | 817 | | 35,801 | | — | | — | | | — | | — | | — | | — | | — | | 1,273 | | 55,783 | | — | | — | | | — | | — | | — | | — | | — | | 1,675 | | 73,399 | | — | | — | | | — | | — | | — | | — | | — | | 3,473 | | 152,187 | | — | | — | | | — | | — | | — | | — | | — | | 4,570 | | 200,257 | | — | | — | | | — | | — | | — | | — | | — | | — | | — | | 613 | | 26,862 | | | — | | — | | — | | — | | — | | — | | — | | 955 | | 41,848 | | | — | | — | | — | | — | | — | | — | | — | | 2,482 | | 108,761 | | 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 | | — | | — | | — | | — | | | 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 | | — | | — | | — | | — | | | 24,869 | | — | | — | | 21.60 | | 03/25/2030 | | — | | — | | — | | — |
Notes to Table on Outstanding Equity Awards at Fiscal Year-End
| (1) | The Vesting Schedules for the options shown in columns (b) and (c) are as follows: | | 19,256 | 03/22/2017 | 03/22/2018 | 03/22/2019 | 03/22/2020 |
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
| Johnson | 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 | 1,076,155 | 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 | * | * | | 72,345 | | | | | |
70
| Foot Locker, Inc. | |
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 | 44,000 | 03/21/2012 | 03/21/2013 | 03/21/2014 | 03/21/2015 | 42,000 | 03/28/2013 | 03/28/2014 | 03/28/2015 | 03/28/2016 | 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 | 49,739 | 03/25/2020 | 03/25/2021 | 03/25/2022 | 03/25/2023 | 297,133 | | | | | Talwar | 18,166 | 09/23/2016 | 09/23/2017 | 09/23/2018 | 09/23/2019 | 19,256 | 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 | 14,548 | 03/27/2019 | 03/27/2020 | 03/27/2021 | 03/27/2022 | 49,739 | 03/25/2020 | 03/25/2021 | 03/25/2022 | 03/25/2023 | 113,855 | | | | | 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 | 92,424 | | | | | 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 | 67,621 | | | | | Jacobs | 8,000 | 03/28/2013 | 03/28/2014 | 03/28/2015 | 03/28/2016 | 12,667 | 03/26/2014 | 03/26/2015 | 03/26/2016 | 03/26/2017 | 13,600 | 12/01/2014 | 12/01/2015 | 12/01/2016 | 12/01/2017 | 21,000 | 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 | * | 24,869 | 03/25/2020 | 03/25/2021 | * | * | 175,530 | | | | |
| * | Unvested portion of stock option grant | * | Unvested portion of stock option award cancelled upon termination of employment. |
| 2022 Proxy Statement | 85 |
| 2021 Proxy Statement | 71executive compensation
| (2) | The vesting dates for the RSU awards shown in column (g) and the PSUs shown in column (i) are set forth in the table below. The PSUs shown in column (i) consist of (a) PSUs granted in 2020 for the 2020-21 performance period; and (b) PSUs granted in 2021 that will be earned only if the threshold performance goals for the 2021-22 performance period are achieved (and, if earned, will vest in 2024). |
Executive Compensation| Name | Grant Date | Type of Award | Shares (#) | (2) | The vesting dates for the RSU awards shown in column (g) and the PSU awards shown in column (i) are set forth in the table below. The PSU awards shown in column (i) consist of (a) PSUs granted in 2018 for the 2018-20 performance period under the AFG; (b) PSUs granted in 2019 that were not earned following the end of the 2020 fiscal year because threshold performance for the 2019-20 performance measurement period was not achieved (and therefore were subsequently forfeited); and (c) PSUs granted in 2020 that will be earned only if the threshold performance goals for the 2020-21 performance measurement period are achieved (and, if earned, will vest in 2023). |
Name | Grant Date | Type of Award | RSUs/PSUs
(#) | Vesting Date | Johnson | 03/28/2018 | RSU | 25,123 | 03/28/2021 | 03/28/2018 | PSU | 62,824 | 03/28/2021 | 04/12/2018 | PSU | 27,216 | 03/24/2021 | 03/27/2019 | RSU | 20,360 | 03/27/2022 | 03/27/2019 | PSU | 15,853 | 03/27/2022(A) | 03/25/2020 | RSU | 55,556 | 03/25/2023 | 11/17/2020 | PSU | 23,348 | 03/25/2023(B) | Peters | 03/28/2018 | RSU | 5,583 | 03/28/2021 | 03/28/2018 | PSU | 15,421 | 03/28/2021 | 04/12/2018 | RSU | 5,444 | 03/24/2021 | 04/12/2018 | PSU | 4,083 | 03/24/2021 | 03/27/2019 | RSU | 4,242 | 03/27/2022 | 03/27/2019 | PSU | 2,970 | 03/27/2022(A) | 03/25/2020 | RSU | 11,575 | 03/25/2023 | 11/17/2020 | PSU | 4,373 | 03/25/2023(B) | Talwar | 03/28/2018 | RSU | 3,350 | 03/28/2021 | 03/28/2018 | PSU | 9,338 | 03/28/2021 | 04/12/2018 | RSU | 4,083 | 03/24/2021 | 04/12/2018 | PSU | 3,062 | 03/24/2021 | 03/27/2019 | RSU | 4,242 | 03/27/2022 | 03/27/2019 | PSU | 2,068 | 03/27/2022(A) | 03/25/2020 | RSU | 11,575 | 03/25/2023 | 11/17/2020 | PSU | 3,046 | 03/25/2023(B) | Martin | 09/28/2017 | RSU | 14,344 | 09/28/2021 | 03/28/2018 | RSU | 2,513 | 03/28/2021 | 03/28/2018 | PSU | 7,282 | 03/28/2021 | 04/12/2018 | RSU | 2,722 | 03/24/2021 | 04/12/2018 | PSU | 2,042 | 03/24/2021 | 03/27/2019 | RSU | 3,394 | 03/27/2022 | 03/27/2019 | PSU | 1,750 | 03/27/2022(A) | 03/25/2020 | RSU | 9,260 | 03/25/2023 | 11/17/2020 | PSU | 2,757 | 03/25/2023(B) | Gray | 03/28/2018 | RSU | 1,675 | 03/28/2021 | 03/28/2018 | PSU | 4,570 | 03/28/2021 | 04/12/2018 | RSU | 817 | 03/24/2021 | 04/12/2018 | PSU | 613 | 03/24/2021 | 03/27/2019 | RSU | 1,273 | 03/27/2022 | 03/27/2019 | PSU | 955 | 03/27/2022(A) | 03/25/2020 | RSU | 3,473 | 03/25/2023 | 11/17/2020 | PSU | 2,482 | 03/25/2023(B) | Vesting Date |
| (A) | Forfeited on March 24, 2021, upon the threshold performance for the 2019-20 performance measurement period not being achieved. | | Johnson | 03/27/2019 | RSU | 20,360 | 03/27/2022 |
| (B) | Will be earned only if the threshold performance goals for the 2020-21 performance measurement period are achieved. | | 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* |
72
| Foot Locker, Inc. | | * | 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. |
Executive Compensation
| (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 number of unvested RSUs and PSUs, as applicable, by the closing price of $43.82 on January 29, 2021 which was the last business day of the 2020 fiscal year. The values shown in column (j) for the PSUs are based on: |
the number of PSUs earned for the 2018-19 performance period under the LTIP, which will vest in March 2021;
the number of PSUs at threshold performance for the 2018-20 performance period under the AFG, which, if earned, will vest in March 2021;
the number of PSUs at threshold performance for the 2019-20 performance period under the LTIP (which were subsequently forfeited following the end of the 2020 fiscal year because threshold performance for the 2019-20 performance measurement period was not achieved); | ► | the number of PSUs at maximum performance for the 2020-21 long-term performance period, which will vest in March 2023; and the number of PSUs that may be earned at threshold performance for the 2020-21 long-term performance period under the LTIP, which, if earned, will vest in March 2023.
Option Exercises and Stock Vested
The following table provides information on the stock options exercised by the NEOs during 2020 and RSU awards that vested during the year:
| | | Options Awards | | Stock Awards | | (a) | | (b) | | (c) | | (d) | | (e) | | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting
(#) | | Value Realized on Vesting
($) | | Johnson | | 80,000 | | 1,731,044 | | — | | — | | Peters | | 40,000 | | 810,512 | | 9,406 | | 171,377 | | Martin | | — | | — | | 14,343 | | 464,570 | | Jacobs | | — | | — | | 21,858 | | 520,564 |
| 2021 Proxy Statement | 73
|
Executive Compensation
| ► | the number of PSUs that may be earned at maximum performance for the 2021-22 long-term performance period, which, if earned, will vest in March 2024. |
Pension Benefits86 | Foot Locker, Inc. | |
executive compensation OPTION EXERCISES AND STOCK VESTED IN FISCAL 2021 The following table provides information on the stock options exercised by, and RSU awards vested for, the NEOs during 2021: | | Options Awards | | Stock Awards | | (a) | (b) | | (c) | | (d) | (e) | | Name | Number of Shares
Acquired on Exercise
(#) | | Value Realized on
Exercise
($) | Number of Shares
Acquired on Vesting
(#) | Value Realized on
Vesting
($) | | Johnson | – | | – | 25,123 | 1,405,632 | | Bracken | – | | – | 1,934 | 106,295 | | Martin | – | | – | 19,579 | 993,831 | | Gray | – | | – | 2,492 | 131,515 | | Peters | 86,000 | (1) | 2,728,426 | 18,236 | 1,029,409 | | Talwar | 3,500 | | 148,474 | 7,433 | 406,323 |
| (1) | Represents shares acquired upon the exercise of stock options by Ms. Peters after her retirement in 2021. |
PENSION BENEFITS IN FISCAL 2021 The table below provides the present value of the accumulated benefit payable to each of the NEOs and the years of service credited to each of them under the Retirement Plan, the Excess Cash Balance Plan, and the SERP determined using interest rate and mortality rate assumptions consistent with those used in our 2020 financial statements. With regard to Mr. Jacobs, the SERP amount reflects his account balance on August 31, 2020 with no interest or pay credit for 2020. | (a) | | (b) | (c) | (d) | (e) | | | | | Number of Years
Credited Service | Present Value of
Accumulated Benefit | Payments During
Last Fiscal Year | | Name | Plan Name | | (#)(1) | ($)(1) | ($) | | Johnson | Retirement Plan | | 22 | 266,019 | — | | | Excess Cash Balance Plan | 22 | 1,136,828 | | | | SERP | | 18 | 3,326,595 | | | | | | | 4,729,442 | | | Peters | Retirement Plan | | 22 | 299,185 | — | | | Excess Cash Balance Plan | 22 | 574,683 | | | | SERP | | 19 | 1,885,039 | | | | | | | 2,758,907 | | | Talwar | Retirement Plan | | 3 | 18,657 | — | | | Excess Cash Balance Plan | 3 | 35,297 | | | | SERP | | 5 | 322,393 | | | | | | | 376,347 | | | Martin | Retirement Plan | | 3 | 18,701 | — | | | Excess Cash Balance Plan | 3 | 20,645 | | | | SERP | | 5 | 270,117 | | | | | | | 309,463 | | | Gray | Retirement Plan | | 2(2) | 47,738 | — | | | Excess Cash Balance Plan | 2(2) | 36,054 | | | | SERP | | — | — | | | | | | | 83,792 | | | Jacobs | Retirement Plan | | 21 | — | 206,320 | | | Excess Cash Balance Plan | 21 | 493,289 | | | | SERP | | 11 | 1,380,016 | | | | | | | 1,873,305 | 206,320 |
Notes to Pension Benefits Table
| (1) | In general, the present value of the accumulated benefits wasbenefit payable to each of the NEOs and the years of service credited to each of them under the Retirement Plan, the Excess Cash Plan, and the SERP, as applicable, determined using the same measurement date (January 30, 2021)interest rate and mortality rate assumptions used for financial reporting purposes. The following key assumptions wereconsistent with those used in calculating the values in the table above:our 2021 financial statements.| (a) | (b) | (c) | (d) | (e) | | Name | Plan Name | Number
of Years
Credited
Service
(#)(1) | Present
Value of
Accumulated
Benefit
($)(1) | Payments
During Last
Fiscal Year
($) | | Johnson | Retirement Plan | 23 | 286,813 | – | | | Excess Cash Plan | 23 | 1,416,715 | – | | | SERP | 19 | 4,063,958 | – | | | | | 5,767,486 | – | | Bracken | Retirement Plan | 9 | 80,850 | – | | | Excess Cash Plan | 9 | 57,121 | – | | | | | 137,971 | – | | Martin | Retirement Plan | 4 | 17,857 | – | | | Excess Cash Plan | 4 | 19,175 | – | | | SERP | 6 | 434,349 | – | | | | | 471,381 | – |
| 2022 Proxy Statement | 87 |
executive compensation | (a) | (b) | (c) | (d) | (e) | | Name | Plan Name | Number
of Years
Credited
Service
(#)(1) | Present
Value of
Accumulated
Benefit
($)(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 (January 29, 2022) and assumptions used for financial reporting purposes. The following key assumptions were used in calculating the values: |
ASC 715 discount rate of 2.5% for the Retirement Plan and ASC 715 discount rate of 1.8% for the Excess Cash Balance Plan and the SERP;
| ► | ASC 715 discount rate of 3.2% for the Retirement Plan and ASC 715 discount rate of 2.7% for the Excess Cash Plan and the SERP; |
Retirement age is assumed to be 65 for the Retirement Plan and the Excess Cash Balance Plan; for the SERP, retirement age is assumed to be when age plus years of service equals 65 for participants in the plan on May 26, 2011 and, for participants in the SERP after such date, when the participant reaches age 55 with 10 years of service;
| ► | For the Retirement Plan and the Excess Cash Plan, retirement age is assumed to be 65; for the SERP, retirement age is assumed to be when age plus years of service equals 65 for participants in the plan on May 26, 2011 and, for participants in the SERP after such date, when the participant reaches age 55 with 10 years of service; |
Form of payment for the Retirement Plan and the Excess Cash Balance Plan is a lump sum and form of payment for the SERP is 12 quarterly installments; and
| ► | 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 installments; and |
Mr. Jacobs’s SERP amount reflects no credited service for fiscal year 2020.
| (2) | While Mr. Gray has participated in the Retirement Plan and the Excess Cash Balance Plan for 2 years, his crediting rate was based on his 18 | ► | 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. |
The years of service for the SERP reflect the number of years that the NEO has been approved by the Compensation
| (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 NEO has been approved by the Human Capital Committee as a participant in that plan. DEFINED BENEFIT RETIREMENT PLANS 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 team members of the Company and substantially all of its U.S. subsidiaries who were at least 21 years old with one year of service before the Retirement 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. The 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 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 based 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: 88 | Foot Locker, Inc. | |
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 |
All existing balances in 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 (available to married participants) or a life annuity. The participant may elect, upon retirement, to waive the annuity form of benefit and receive benefits under the plan 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. All 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 Excess Cash 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 they 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. The 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. 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 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 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. Mr. Johnson is the only 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. | 2022 Proxy Statement | 89 |
74
| Foot Locker, Inc. | |
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 team members of the Company and substantially all of its U.S. subsidiaries who were at least 21 years old with one year of service before the Retirement 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, long-term incentives, stock options, and stock 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.
The 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 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 based 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 | All W-2 Compensation (%) | + | 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, all existing balances in 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 (available to married participants) or a life annuity. The participant may elect, upon retirement, to waive the annuity form of benefit and receive benefits under the plan 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.
All 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 the NEOs, are participants in the Retirement Plan.
Foot Locker Excess Cash Balance Plan
The Internal Revenue Code (“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 under a qualified retirement plan, such as the Retirement Plan. Accordingly, 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 the Excess Plan. The Excess 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 they would otherwise be entitled under the Retirement Plan. The Excess Cash Balance Plan takes into account only base salary and Annual Incentive Plan awards in determining pension benefits. Therefore, long-term incentives, stock options, and stock awards have no effect on the calculation of benefits or payments under this plan.
| 2021 Proxy Statement | |
Executive Compensation
The Excess Cash Balance 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 based upon a percentage of the participant’s W-2 Compensation, as defined in the Retirement Plan. After this three-year transition period,executive 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 Balance 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 Plan as age 55 with at least 5 years of vesting service. Mr. Johnson and Ms. Peters are the only NEOs currently eligible for early retirement under these plans.
Foot Locker 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 is an unfunded and non-qualified benefit plan that provides for payment by the Company of supplemental retirement, death, and disability benefits. The NEOs (except Mr. Gray) and five other current executives participate in the SERP.
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 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 team members. The terminated executive would be required to pay the insurance premium applicable to actively employed senior executives, including any increases in the premiums, and the Company would pay the difference between the actual premium rate and the active team member rate.
Participants in the SERP prior to May 26, 2011, including Mr. Johnson and Ms. Peters, 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 Messrs. Talwar and 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 shall continue 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 2020, of the NEOs, only Mr. Johnson and Ms. Peters were vested in the SERP. Mr. Jacobs was vested at the time of the termination of his employment.
The Compensation 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, long-term incentives, stock options, and stock awards have no effect on the calculation of benefits or payments under this plan. 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. Based upon the Company’s performance in 2020, a credit of 10.7% of each participant’s respective 2020 base salary was made to the SERP. As of the end of 2020, the account balances of the NEOs ranged from $255,294 for Mr. Martin to $3,408,801 for Mr. Johnson.
76
| Foot Locker, Inc. | |
Executive Compensation
401(k) Plan
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 to 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. All of the NEOs participate in the 401(k) Plan. As of January 1, 2020, 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 $19,500. Prior to January 1, 2020, the Company matched 25% of employees’ pre-tax contributions on up to the first 4% of the employees’ compensation (subject to certain limitations). Beginning January 1, 2020, the Company matches 100% of employees’ pre-tax contributions on up to the first 1% of the employees’ compensation (subject to certain IRC limitations), and 50% of the next 5%, subject to a maximum match of 3.5% if the participant contributes at least 6% to the plan. The matching contribution is made in cash. Prior to January 1, 2020, such matching contributions vested incrementally over the first five years of participation. Effective January 1, 2020, matching contributions vest over two years. See Note 6 to theSummary Compensation Tablebeginning on page 63 for the amount of the Company match for each of the NEOs.
Nonqualified Deferred Compensation
The table below provides the amount of contributions and earnings during the last fiscal year to each of the NEOs under the Excess Savings Plan, as well as aggregate withdrawals and distributions and aggregate year-end balances.
| (a) | (b) | (c) | (d) | (e) | (f) | | | Executive Contributions | Registrant Contributions | Aggregate | Aggregate | Aggregate | Name | During Last Fiscal Year ($) | During Last Fiscal Year ($)(1) | Earnings During Last Fiscal Year ($)(2) | Withdrawals/ Distributions ($) | Balance at Last Fiscal Year End ($) | | Talwar | — | 11,258 | 15 | — | 11,273 | | Martin | — | 15,884 | 21 | — | 15,905 |
Notes to Nonqualified Deferred Compensation Table
| (1)SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
| AllThe Company maintains a SERP for certain senior officers of the amounts shownCompany 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 is an unfunded and non-qualified benefit plan that provides for payment by the Company of supplemental retirement, death, and disability benefits. Messrs. Johnson and Martin, as well as five other current executives, participate in this column (c) are reported as compensationthe SERP. 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 officers in fiscal year 2020continuation of medical and dental insurance benefits if an executive meets the applicable age and service requirements when the 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 team members. The terminated executive would be required to pay the insurance premium applicable to actively-employed senior executives, including any increases in the “All Other Compensation” columnpremiums, and the Company would pay the difference between the actual premium rate and the active team 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 Summary Compensation Table. |
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. | (2) | The amounts showHuman 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 this column (d) arerelation to the target, but may not reportedbe 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.401(k) PLAN 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 $20,500 effective January 1, 2022). The Company matches 100% of employees’ pre-tax contributions on up to the first 1% of the employees’ compensation (subject to certain IRC limitations), and 50% of the next 5%, subject to a maximum match of 3.5% if the participant contributes at least 6% to the plan. The matching contribution is made in cash and vests over two years. See Note 7 to the Summary Compensation Table becausebeginning on page 70 for the amount of the Company’s match under the 401(k) and Excess Savings Plans to the NEOs’ accounts. 90 | Foot Locker, Inc. | |
executive compensation NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2021 The table below provides the amount of contributions and earnings are not preferential. |
during the last fiscal year to each of the NEOs under the Excess Savings Plan, as well as aggregate withdrawals and distributions and aggregate year-end balances.| (a) | (b) | (c) | (d) | (e) | (f) | | Name | Executive
Contributions
During Last
Fiscal Year
($) | 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 |
Foot Locker 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 6 to the Summary Compensation Tablebeginning on page 63 for the amount of the Company contribution for each of the NEOs. 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 2020, | (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 in the event of death, no later than December 31 of the year following the year in which the participant’s death occurs). | 2021 Proxy Statement | 77
|
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. Except for Mr. Jacobs, the information in the tables assumes a termination date of January 30, 2021, using the closing stock price on January 29, 2021 of $43.82 per share. For Mr. Jacobs, the information in the tables reflect his termination date of August 31, 2020, using the closing stock price of $30.33 per share, and reports actual amounts.
| Termination Event | Severance ($) | Time-Based
RSUs, PSUs, and Options ($) | SERP ($)(1) | Excess Cash Balance Plan ($)(2) | Excess Saving Plan ($)(3) | Health Benefits ($)(4) | Life
Insurance ($)(5) | | Johnson | | | | | | | | | By Company w/o Cause | 6,154,900(6) | 14,874,413(7) | 284,067 | 1,050,097 | — | 730,031 | — | | By Executive For Good Reason | 6,154,900(6) | 14,874,413(7) | 284,067 | 1,050,097 | — | 730,031 | — | | Resignation | — | — | 284,067 | 1,050,097 | — | 730,031 | — | | Change in Control(8) | 6,907,000(9) | 19,301,942(10) | 284,067 | 1,050,097 | — | 730,031 | — | | Disability | — | 15,765,318(11) | 3,408,801 | 1,050,097 | — | 730,031 | — | | Death | — | 15,765,318(11) | 3,408,801 | 1,050,097 | — | — | 1,150,000 | | Retirement | — | 8,851,968(12) | 284,067 | 1,050,097 | — | 730,031 | — | | Cause | — | — | — | 1,050,097 | — | — | — | | Peters | | | | | | | | | By Company w/o Cause | 1,050,000(13) | — | 160,969 | 462,230 | — | 915,721 | — | | By Executive for Good Reason | 1,050,000(13) | 368,385(14) | 160,969 | 462,230 | — | 915,721 | — | | Resignation | — | — | 160,969 | 462,230 | — | 915,721 | — | | Change in Control(8) | 2,450,000(9) | 4,056,083(10) | 160,969 | 462,230 | — | 915,721 | — | | Disability | — | 3,319,268(11) | 1,931,622 | 462,230 | — | 915,721 | — | | Death | — | 3,319,268(11) | 1,931,622 | 462,230 | — | — | 700,000 | | Retirement | — | 2,144,717(12) | 160,969 | 462,230 | — | 915,721 | — | | Cause | — | — | — | 462,230 | — | — | — | | Talwar | | | | | | | | | By Company w/o Cause | 975,000(13) | — | — | 18,823 | 11,258 | — | — | | By Executive for Good Reason | 975,000(13) | 368,385(14) | — | 18,823 | 11,258 | — | — | | Resignation | — | — | — | 18,823 | 11,258 | — | — | | Change in Control(8) | 2,275,000(9) | 3,336,778(10) | — | 18,823 | 11,258 | — | — | | Disability | — | 2,559,963(11) | 304,701 | 18,823 | 11,258 | — | — | | Death | — | 2,559,963(11) | 304,701 | 18,823 | 11,258 | — | 650,000 | | Retirement | — | 1,612,348(12) | — | 18,823 | 11,258 | — | | | Cause | — | — | — | 18,823 | 11,258 | — | — | | Martin | | | | | | | | | By Company w/o Cause | 900,000(13) | — | — | 13,073 | 15,884 | — | — | | By Executive for Good Reason | 900,000(13) | 294,704(11) | — | 13,073 | 15,884 | — | — | | Resignation | — | — | — | 13,073 | 15,884 | — | — | | Change in Control(8) | 2,100,000(9) | 2,586,519(10) | — | 13,073 | 15,884 | — | — | | Disability | — | 1,997,067(11) | 255,294 | 13,073 | 15,884 | — | — | | Death | — | 1,997,067(11) | 255,294 | 13,073 | 15,884 | — | 600,000 | | Retirement | — | 1,279,997(12) | — | 13,073 | 15,884 | — | — | | Cause | — | — | — | 13,073 | 15,884 | — | — |
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| Foot Locker, Inc. | |
Executive Compensation
| Termination Event | Sevenced ($) | Time Based RSU,PSU,
and Options
($) | SERP ($)(1) | Excess Cash Balance Plan ($)(2) | Excess Saving Plan ($)(3) | Health Benefits ($)(4) | Life Insurance ($)(5) | | Gray | | | | | | | | | By Company w/o Cause | 900,000(13) | — | — | 15,085 | — | — | — | | By Executive for Good Reason | 900,000(13) | 110,522(14) | — | 15,085 | — | — | — | | Resignation | — | — | — | 15,085 | — | — | — | | Change in Control(8) | 2,100,000(9) | 1,173,809(10) | — | 15,085 | — | — | — | | Disability | — | 952,765(11) | — | 15,085 | — | — | — | | Death | — | 952,765(11) | — | 15,085 | — | — | 600,000 | | Retirement | — | 709,432(12) | — | 15,085 | — | — | — | | Cause | — | — | — | 15,085 | — | — | — | | Jacobs(15) | | | | | | | | | Actual Payments | 1,780,000(16) | 1,112,418(17) | 1,414,119 | 494,769 | — | 1,292,471 | — |
| (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 executive’s termination date, and the remaining payments made quarterly during the remainder of the three-year period. Upon termination due to disability or death, payments would be made in a lump sum following the disability or death. Mr. Jacobs has begun receiving his severance benefits and payments under the SERP, and the amount reported in this column reflects the total actual amount that he is expected to receive under the SERP (other than health benefits reported in the “Health Benefits” column). |
| (2) | Benefit payable as of January 30, 2021 in a lump sum under the Excess Cash Balance Plan six months following the NEO’s termination date. No information is provided with respect to the benefit under the Retirement Plan because that plan is available generally to all salaried team members (except as described in Foot Locker Retirement Plan on page 75) and does not discriminate in terms of scope, terms, or operation in favor of the executive officers. With respect to Mr. Jacobs, payment owed under the Excess Cash Balance Plan has been completed and no further benefit is due to him under this program. |
| (3) | Benefit payable as of January 30, 2021 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),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). | 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. Except for Mr. Talwar and Ms. Peters, the information in the tables assumes a termination date of January 29, 2022, using the closing stock price on January 28, 2022 of $44.43 per share. For Mr. Talwar, and Ms. Peters the information in the tables reflect his termination date of December 16, 2021, and her retirement date of May 1, 2021, respectively, and reports actual amounts. | Termination Event | Severance
($) | | RSUs, PSUs,
and Stock
Options
($) | | SERP
($)(1) | Excess Cash
Balance Plan
($)(2) | Excess
Saving Plan
($)(3) | Health
Benefits
($)(4) | Life
Insurance ($)(5) | | Johnson | | | | | | | | | By Company w/o Cause | 6,476,900 | (6) | 13,933,921 | (7) | 351,207 | 1,375,698 | – | 649,715 | – | | By Executive For Good Reason | 6,476,900 | (6) | 13,933,921 | (7) | 351,207 | 1,375,698 | – | 649,715 | – | | Resignation | – | | – | | 351,207 | 1,375,698 | – | 649,715 | – | | Change in Control(8) | 6,907,000 | (9) | 18,641,191 | (10) | 351,207 | 1,375,698 | – | 649,715 | – | | Disability | – | | 16,824,334 | (11) | 4,214,478 | 1,375,698 | – | 649,715 | – | | Death | – | | 16,824,334 | (11) | 4,214,478 | 1,375,698 | – | – | 1,150,000 | | Retirement | – | | 14,879,144 | (12) | 351,207 | 1,375,698 | – | 649,715 | – | | Cause | – | | – | | – | 1,375,698 | – | – | – | | 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 | 1,200,000 | (13) | – | | – | 34,515 | 44,466 | – | – | | By Executive for Good Reason | 1,200,000 | (13) | 113,556 | (14) | – | 34,515 | 44,466 | – | – | | Resignation | – | | – | | – | 34,515 | 44,466 | – | – | | 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 | – | | 2,406,156 | (11) | 436,414 | 13,857 | 46,653 | – | – | | Death | – | | 2,406,156 | (11) | 436,414 | 13,857 | 46,653 | – | 615,000 | | Retirement | – | | 1,978,472 | (12) | – | 13,857 | 46,653 | – | – | | Cause | – | | – | | – | 13,857 | 46,653 | – | – |
92 | Foot Locker, Inc. | |
EXECUTIVE 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 NEO’s termination date, and the remaining payments made quarterly during the remainder of the three-year period. Upon termination due to disability or death, payments would be made in a lump sum following the disability or death. Mr. Talwar was not vested, and forfeited his benefit, upon his termination. Ms. Peters has begun receiving payments under the SERP, and the amounts reported in this column reflect the total actual amounts that she is expected to receive under the SERP (other than health benefits reported in the “Health Benefits” column). |
| (2) | Benefit payable as of January 29, 2022 in a lump sum under the Excess Cash Balance Plan six months following the NEO’s termination date. No information is provided with respect to the benefit under the Retirement Plan because that plan is available generally to all salaried team members (except as described in Retirement Plan beginning on page 88) and does not discriminate in terms of scope, terms, or operation in favor of the executive officers. Mr. Talwar will receive his benefit six months following his termination date. With respect to Ms. Peters, payment owed under the Excess Cash Balance Plan has been completed and no further benefit is due to her under this program. |
| (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. |
| (4) | 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 NEO, would be substantially the same for active team members. The benefit amount assumes the NEO does not qualify for disability benefits or other benefits under Medicare. |
| (5) | Senior executive life insurance is payable following death in a lump sum to the NEO’s beneficiary. |
| (6) | 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 ($2,300,000). Annual Bonus for Year of Termination. For the fiscal year in which termination occurs, payment of the Annual Incentive Plan payouts that would have otherwise been earned if such termination had not occurred, prorated as of the Termination Date, to be paid at the NEO’s beneficiary. |
| (6) | This severance amount includessame time as other annual bonuses for 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 ($2,300,000)fiscal year in which the termination occurs ($4,169,900).
Annual Bonus for Year of Termination. For the fiscal year in which termination occurs, payment of the Annual Incentive Plan payouts that would have otherwise been earned if such termination had not occurred, prorated 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 ($3,847,900).
Outplacement. The approximate cost of one year of outplacement services ($7,000). | (7) | Pro Rata Payment of any Unearned PSUs. Pursuant to Mr. Johnson’s employment agreement, with respect to any non-completed performance period during which termination occurs, payment of any PSU awards that would have otherwise been earned if such termination had not occurred, as prorated through the termination date. The amount shown includes the sum of the value of the PSUs that the NEO would have been entitled to receive based on the prorated target level achievement of the performance goals for the 2021-22 performance measurement period (45,048 PSUs). The PSUs would become immediately vested and payable. The PSUs were valued at $44.43 per share. |
Payment of any Unearned LTIP.Earned and Unvested PSUs and Vesting of Stock Options. Pursuant to Mr. Johnson’s employment agreement, with respect to any non-completedcompleted performance period during which termination occurs, payment of any LTIP awardsPSU award that would have otherwise beenis earned if such termination had not occurred,and unvested as prorated throughof the termination date. The amount shown includes the sum of the value of the(A) PSUs that the NEO would have been entitled to receive under the LTIP based on the (i) prorated targetactual level achievement of the performance goals for the 2020-21 performance measurement period (46,696 PSUs). The PSUs would become immediately vested and payable. The PSUs were valued at $43.82 per share. |
Payment of any Earned and Unvested LTIP and AFG Awards 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 LTIP or AFG award that is earned and unvested as of the termination date. The amount shown includes the (A) LTIP based on the (i) prorated actual level achievement of the performance goals for the 2019-20 performance measurement period (0(186,782 PSUs), and (ii) actual level achievement of the performance goals for the 2018-19 performance measurement period (62,824 PSUs), (B) AFG based on the target level achievement of the performance goals for the 2018- 20 performance measurement period (108,862 PSUs), and (C) intrinsic value on January 30, 2021 of 315,664 stock options that would vest.
| (8) | This covers termination by the Company without Cause or by the NEO for Good Reason during the two-year period following a Change in Control (each as defined in the NEO employment agreement). If the payments or benefits received by the NEO following a Change in Control are subject to the excise tax under Section 4999 of the IRC, thenperformance goals for the Company would automatically reduce the NEO payments2019-20 performance measurement period (0 PSUs), and benefits to an amount equal to $1 less than the amount(B) intrinsic value on January 29, 2022 of 262,412 stock options that would subject the NEO to the excise tax, as long as the reduced amount would result in a greater benefit to the executive compared to the unreduced amount on a net after-tax basis. |
vest. | (9) | The severance amount equals two times the sum of the NEO annual salary plus Annual Incentive Plan payout at target under the Annual Incentive Plan or other annual incentive plan applicable to the NEO. | (8) | This covers termination by the Company without Cause or by the NEO for Good Reason during the two-year period following a Change in Control (each as defined in the NEO’s employment agreement). If the payments or benefits received by the NEO following a Change in Control are subject to the excise tax under Section 4999 of the IRC, then the Company would automatically reduce the NEO payments and benefits to an amount equal to $1 less than the amount that would subject the NEO to the excise tax, as long as the reduced amount would result in a greater benefit to the NEO compared to the unreduced amount on a net after-tax basis. |
| (9) | The severance amount equals two times the sum of the NEO’s annual salary plus Annual Incentive Plan payout at target. With respect to Mr. Johnson, it also includes the approximate cost of one year of outplacement services ($7,000). |
| 2021 Proxy Statement | 79
|
Executive Compensation
| (10) | The amount shown represents the sum of the (A) value of the time-based RSUs that would vest, (B) value of the PSUs that the NEO would have been entitled to receive under the LTIP based on the (i) prorated target level achievement of the performance goals for the 2020-21 performance measurement period, (ii) actual level achievement of the performance goals for the 2019-20 performance measurement period, and (iii) actual level achievement of the performance goals for the 2018-19 performance measurement period, (C) value of the PSUs that the NEO would have been entitled to receive under the AFG based on the target level achievement of the performance goals for the 2018-20 performance measurement period, and (D) intrinsic value on January 30, 2021 of the stock options that would vest. The RSUs would become immediately vested and payable. The time-based RSUs and PSUs were valued at $43.82 | (10) | The amount shown represents the sum of the (A) value of the RSUs that would vest, (B) value of the PSUs that the NEO would have been entitled to receive based on the (i) prorated target level achievement of the performance goals for the 2021-22 performance measurement period, (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 RSUs would become immediately vested and payable. The RSUs and PSUs were valued at $44.43 per share. |
| | Time-Based RSUs (#) | LTIP PSUs (#) | AFG PSUs (#) | Stock Options (#) | | Johnson | 101,039 | 109,520 | 108,862 | 315,664 | | Peters | 26,844 | 24,167 | 16,330 | 66,186 | | Talwar | 23,250 | 15,429 | 12,247 | 63,487 | | Martin | 17,889 | 12,795 | 8,165 | 50,588 | | Gray | 7,238 | 9,533 | 2,450 | 19,857 |
| (11) | The amount shown represents the sum of the (A) value of the time-based RSUs, some or all of which may be accelerated by the Compensation Committee, (B) value of the PSUs that the executive would have been entitled to receive under the LTIP based on the (i) target level achievement of the performance goals for the 2020-21 performance period, prorated to the termination date, (ii) actual level achievement of the performance goals for the 2019-20 performance measurement period, and (iii) actual level achievement of the performance goals for the 2018-19 performance measurement period, (C) value of the PSUs that the executive would have been entitled to receive under the AFG based on the target level achievement of the performance goals for the 2018-20 performance period, and (D) intrinsic value on January 30, 2021 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 for this performance period in 2022. The time-based RSUs and PSUs were valued at $43.82 per share. The actual value of the time-based RSUs to the executive would depend upon the Company’s stock price on the payout date in 2023. | 2022 Proxy Statement | 93 |
EXECUTIVE COMPENSATION | | 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 |
| | Time-Based RSUs (#) | LTIP PSUs (#) | AFG PSUs (#) | Stock Options (#) | | Johnson | 101,039 | 109,520 | 108,862 | 133,223 | | Peters | 26,844 | 24,167 | 16,330 | 28,176 | | Talwar | 23,250 | 15,429 | 12,247 | 25,477 | | Martin | 17,889 | 12,795 | 8,165 | 20,180 | | Gray | 7,238 | 9,533 | 2,450 | 8,454 |
| (12) | The amount shown represents the sum of the (A) value of the time-based RSUs, some or all of which may be accelerated by the Compensation Committee, prorated based on days employed between the grant date and termination date, (B) value of the PSUs that the executive would have been entitled to receive under the LTIP based on the (i) target level achievement of the performance goals for the 2020-21 performance period, prorated to the termination date, (ii) actual level achievement of the performance goals for the 2019-20 performance measurement period, and(iii) actual level achievement of the performance goals for the 2018-19 performance measurement period, and (C) intrinsic value on January 30, 2021 of the stock options that would vest. The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan in 2023. The PSUs were valued at $43.82 per share. The actual value of the PSUs to the executive would depend upon the Company’s stock price on the payout date in 2023. | (11) | 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, (B) value of the PSUs that the executive 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 RSUs and PSUs were valued at $44.43 per share. The actual value of the RSUs and PSUs to the NEO would depend upon the Company’s stock price on the payout date. |
| | 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 |
| | Time-Based RSUs (#) | LTIP PSUs (#) | Stock Options (#) | | Johnson | 52,134 | 109,520 | 133,223 | | Peters | 16,370 | 24,167 | 28,176 | | Talwar | 12,959 | 15,429 | 25,477 | | Martin | 9,690 | 12,795 | 20,180 | | Gray | 4,135 | 9,533 | 8,454 |
| (13) | The severance amount equals one-and-a-half times the executive’s | (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 NEO’s annual salary, payable in lump sum within 10 days of the six-month anniversary of the termination date. |
| (14) | The amount shown represents the intrinsic value on January 30, 2021 of the stock options that would vest. |
| Stock Options
(#)
| Peters | 28,176 | Talwar | 25,477 | Martin | 20,180 | Gray | 8,454 |
80
| Foot Locker, Inc. | |
Executive Compensation
| (15) | Mr. Jacobs ceased to serve as Executive Vice President and Chief Executive Officer—North America effective July 22, 2020, and departed from the Company effective August 31, 2020, at which time his employment agreement terminated. The Compensation Committee determined that Mr. Jacobs’s departure constituted a termination without cause under the terms of his employment agreement and the Company benefit plans, and accordingly, certain amounts were required to be paid to Mr. Jacobs under his employment agreement and the Company benefit plans. |
| (16) | This severance amount consists of the following items provided for under Mr. Jacobs’s separation agreement, which reflect required payments owed under Mr. Jacobs’s employment agreement on a termination without cause, which the Compensation Committee determined was appropriate based on the circumstances of Mr. Jacobs’s departure: |
One-and-a-half times Mr. Jacobs’s annual salary. Severance payment under Mr. Jacobs’s employment agreement has been completed.
Non-Compete Payments. Mr. Jacobs has begun receiving a monthly payment, equal to 25% of his final base salary, to not compete for two years following the date of termination. This payment may be discontinued earlier than the scheduled two-year anniversary if either, (a) Mr. Jacobs engages in full-time employment that, in the Company’s opinion, does not violate the non-competition provision of the applicable Employment Agreement, or (b) Mr. Jacobs is found to have violated the non-competition provision. The amount reported in this column reflects the maximum potential payment in respect of the non-compete.
Vacation Payout. During the pay period following his termination date, Mr. Jacobs was paid the dollar amount equivalent of his unused vacation accrued up until his termination date.
| (17) | In accordance with the treatment of Mr. Jacobs’s departure as a termination without cause, the amount shown includes the sum of the (A) value of the accelerated time-based RSUs (10,100), (B) LTIP based on the actual level achievement of the performance goals for the 2018-19 performance measurement period (19,419 PSUs), and (C) intrinsic value on August 31, 2020 of 38,891 stock options that have vested. The time-based RSUs and PSUs were valued using the closing stock price on August 31, 2020 ($30.33 per share). Mr. Jacobs forfeited all of his unvested RSUs on his termination date. |
| (14) | The amount shown represents the intrinsic value on January 29, 2022 of the stock options that would vest. |
| Stock Options
(#) | | Page | 2,777 | | Bracken | 9,727 | | Martin | 20,368 | | Gray | 9,653 |
| (15) | Mr. Talwar ceased to serve as Executive Vice President and Chief Executive Officer—EMEA effective November 17, 2021, and departed from the Company, on December 16, 2021, at which time his employment agreement terminated. The Human Capital Committee determined that Mr. Talwar’s departure constituted a termination without cause under the terms of his employment agreement and the Company benefit plans, and accordingly, certain amounts were required to be paid to Mr. Talwar under his employment agreement and the Company benefit plans. |
| (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: |
94 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). |
CEO 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 team 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 2021 compensation is approximately 1,191:1. It is no longer appropriate for us to use the median team member we identified as of December 31, 2020 for purposes of this year’s Proxy Statement | 81
|
Executive Compensation
CEO 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 team 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 2020 compensation is approximately 1,304:1.
It is no longer appropriate for us to use the median team member we identified as of December 31, 2019 as the median team member because of a change in the original median team member’s circumstances that we reasonably believe would result in a significant change in our pay ratio disclosure, so we have identified another team member whose compensation is substantially similar to the original median team member based on the original median team member’s circumstances that we reasonably believe would result in a significant change in our pay ratio disclosure. Accordingly, we have identified another team member utilizing the same compensation measure used to select the original median team member. We identified our median team member and calculated our CEO pay ratio as follows:
We identified the median team member using our team member population (excluding team members in three countries, as further described below) as of the final day of our payroll year, December 31, 2020.
| ► | 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 consistently applied compensation measure (“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 offer short-term incentive awards or widely distribute equity or other long-term incentive 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 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.
| ► | 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. |
We excluded certain team members under the de minimis exception permitted under the SEC rules. In total, our workforce consisted of 52,635 global full-time, part-time, temporary, and seasonal team members located across 27 countries. As part of our methodology, and in compliance with the pay ratio rule, we excluded all team members in three countries, totaling 95 team members (less than 1% of our total workforce). Team members in the following countries were excluded: Hungary (16 team members), Greece (32 team members), and Poland (47 team members). As a result, our pay ratio includes 52,540 of our 52,635 team members.
After identifying the median team member, we calculated this team member’s total annual compensation in the same manner as the Chief Executive Officer’s compensation, which is described in the Summary Compensation Table beginning on page 62.
We are a global retailer and approximately 70% of our team members are part-time team members. Our median team member is a part-time support specialist who worked an average of 13 hours per week in one of our call centers in Oshkosh, Wisconsin, and whose annual compensation was $9,161 in fiscal year 2020. Our Chief Executive Officer’s compensation during the same time period was $11,950,057, including $8,737 for a health care benefit under a plan that is available generally to all salaried team members, which is not required to be reported as compensation for our Chief Executive Officer in the Summary Compensation Table, beginning on page 62, under the SEC rules. | ► | 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 67% of our team members are part-time team members. Our median team member is a part-time sales associate who worked an average of 17 hours per week in one of our stores in Fresno, California, and whose annual compensation was $12,135 in fiscal year 2021. Our CEO’s compensation during the same time period was $14,458,325. | 2022 Proxy Statement | 95 | Foot Locker, Inc. | |
Management 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 their operations. For these reasons, ESG is embedded in how we manage our business. 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. We also, recognize, however, that this is a journey. We view public reporting as an ongoing process and expect our disclosures to continue 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. 
Proposal 3: Ratification of the Appointment of Our Independent Registered Public Accounting Firm
96 | Foot Locker, Inc. | |
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. 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.
The Audit Committee ensures the regular rotation of the lead audit partner, as required by law. The Audit Committee is also involved in reviewing, evaluating, and selecting the new lead audit partner, based on their qualifications, when the previous lead audit partner is required to rotate off the audit engagement. In evaluating and selecting a 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 Committee Chair and the Lead Independent Director, interview the candidates. The Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer also interview the candidates. The Committee Chair and proposed lead audit partner meet in executive session. The Committee Chair 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 2021 fiscal year. We are asking shareholders at this meeting to ratify this appointment of KPMG LLP for 2021.
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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. The Audit Committee ensures the regular rotation of the lead audit partner, as required by law. The Audit Committee is also involved in reviewing, evaluating, and selecting the new lead audit partner, based on their qualifications, when the previous lead audit partner is required to rotate off the audit engagement. In evaluating and selecting a 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 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 and proposed lead audit partner meet in executive session. The Audit Committee Chair then recommends his selection to the Audit Committee for its consideration and approval. The Audit Committee has appointed KPMG LLP as our independent registered public accounting firm for the 2022 fiscal year. We are asking shareholders at this meeting to ratify this appointment of KPMG LLP for 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 2021 Annual Meeting and will have an opportunity to make a statement and respond to appropriate questions. 
The Board recommends a vote FOR Proposal 3.
| 2022 Proxy Statement | 99 |
| 2021 Proxy Statement | 83PROPOSAL 4: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Proposal 3: Ratification of the Appointment of Our Independent Registered Public Accounting Firm
Audit and Non-Audit Fees
AUDIT 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 2019 and 2020, as well as the fees billed for other services KPMG LLP provided during these two fiscal years: | Category | 2019 ($) | 2020 ($) | | Audit Fees(1) | 4,776,000 | 4,056,000 | | Audit-Related Fees(2) | 844,000 | 324,000 | | Tax Fees(3) | 273,000 | 304,000 | | Total | 5,893,000 | 4,684,000 |
Notes to Audit and Non-Audit Fees Table
| (1) | Audit fees consisted of professional services provided in connection with the audit of ourthe Company’s annual financial statements reviews of financial statements included in our Quarterly Reports on Form 10-Q,for 2020 and 2021, as well as the fees billed for other services KPMG LLP provided during these two fiscal years:| Category | 2020
($) | 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, and the Foot Locker Foundation, and due diligence related to certain acquisitions. |
| (3) | Tax fees consisted of corporate income tax compliance assistance and tax compliance related to certain acquisitions. |
AUDIT 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. The Audit Committee has delegated this authority to the Audit Committee Chair to approve fees between meetings, and then the fees are reviewed with the Audit Committee at a subsequent meeting. Management reviews 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, with the Audit Committee at regularly-scheduled meetings. 100 | Foot Locker, Inc. | |
PROPOSAL 4: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AUDIT COMMITTEE REPORT In accordance with the charter adopted by the Board, the Audit Committee assists the Board in fulfilling its oversight responsibilities of the Company’s accounting policies and practices, as well as due diligence relatedfinancial 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 controls over financial reporting. The Audit Committee consists of six 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 2021. At its meetings during 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 Annual Report. The Audit Committee regularly meets privately with KPMG LLP, the internal auditors, and the Vice President of Internal Audit during the year. The Audit Committee reviewed and discussed with management and KPMG LLP the audited financial statements for the 2021 fiscal year, which ended January 29, 2022. The Audit Committee also discussed with KPMG LLP the matters required to certain investments. |
| (3) | Tax fees consisted principally of assistance with matters related to tax compliance. |
Audit 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, the Audit Committee has delegated this authority to the Audit Committee Chair. In practice, these fees are normally approved by the Audit Committee Chair and 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, including services for our subsidiaries and affiliates, since the Audit Committee’s last meeting.
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| Foot Locker, Inc. | |
Proposal 3: Ratification of the Appointment of Our Independent Registered Public Accounting Firm
Audit Committee Report
In accordance with the charter adopted by the Board, the Audit Committee assists the Board in fulfilling its oversight responsibilities of the Company’s accounting policies and practices, as 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 control over financial reporting.
The Audit Committee consists of five 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 2020. At its meetings during 2020, 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 2020 Annual Report on Form 10-K. The Audit Committee regularly meets privately with KPMG LLP, the internal auditors, and the Vice President of Internal Controls during the year.
The Audit Committee reviewed and discussed with management and KPMG LLP the audited financial statements for the 2020 fiscal year, which ended January 30, 2021. The Audit Committee also discussed with KPMG LLP the matters required to be discussed by applicable Public Company Accounting Oversight Board (the “PCAOB”)be discussed by applicable 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;
| ► | historical and recent performance of the current independent audit firm; |
an analysis of known significant legal or regulatory proceedings related to the firm;
| ► | an analysis of known significant legal or regulatory proceedings related to the firm; |
external data on audit quality and performance, including PCAOB reports;
| ► | external data on audit quality and performance, including PCAOB reports; |
industry experience;
audit fee revenues;
firm capabilities and audit approach; and
| ► | firm capabilities and audit approach; and |
the independence, tenure, and partner rotation of the audit firm.
| ► | 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 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 Annual Report. 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 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 2020 Annual Report on Form 10-K.
Members of the Audit Committee 
Marmol Chair Matthew M. McKenna Member Darlene Nicosia Member Member Ulice Payne, Jr. Member Dona D. Young
 |  |  |  |  |  | | | | | | | | GUILLERMO G. | VIRGINIA C. | MATTHEW M. | DARLENE | ULICE | DONA D. | | MARMOL | DROSOS | MCKENNA | NICOSIA | PAYNE, JR. | YOUNG | | | | | | | | Chair | Member | Member | Member | Member | Member |
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Beneficial Ownership of the Company’s Stock
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 22, 2021, 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 22, 2021the Record Date by the exercise of stock options. Mr. Johnson beneficially owned 1.3%1.5% of the total number of outstanding shares of Common Stock as of March 22, 2021.the Record Date. No other director or NEO beneficially owned 1% or more of the total number of outstanding shares as of March 22, 2021.the Record Date. Each person has sole voting and investment power for the number of shares shown, except as otherwise noted below: | Name | Common Stock Beneficially Owned Excluding Stock Options
(#)(a) | Stock Options Exercisable Within 60 Days After 3/22/21 (#) | DSUs, RSUs, and PSUs
(#)(b) | Total (#) | Common Stock
Beneficially Owned
Excluding Stock
Options
(#)(1) | Stock Options
Exercisable Within
60 Days After
3/21/22
(#) | DSUs, RSUs,
and PSUs
(#)(2) | Total
(#) | | Clark | 20,238 | — | 2,472 | 22,710 | | | Bracken | | 4,022 | 36,599 | 19,123 | 59,744 | | Drosos | | – | – | – | | Feldman | 72,586 | — | 32,472 | 105,058 | 76,274 | – | 31,739 | 108,013 | | Gray | 1,002 | 56,218 | 11,808 | 69,028 | 7,626 | 65,871 | 13,710 | 87,207 | | Jacobs | 68,471(c) | 175,530 | — | 244,001 | | | Johnson | 259,234 | 893,714 | 163,863 | 1,316,811 | 344,206 | 974,230 | 105,948 | 1,424,384 | | Marmol | 40,517 | — | 2,472 | 42,989 | 44,408 | – | 1,136 | 45,544 | | Martin | 9,470 | 62,016 | 39,515 | 111,001 | 28,271 | 82,384 | 19,841 | 130,496 | | McKenna | 18,483 | — | 2,472 | 20,955 | 12,008 | – | 1,136 | 13,144 | | Nicosia | 2,357 | — | 2,472 | 4,829 | 6,045 | – | 1,569 | 7,614 | | Oakland | 15,511 | — | 7,001 | 22,512 | 17,983 | – | 7,117 | 25,100 | | Page | | – | 2,777 | 15,725 | 18,502 | | Payne | 10,825 | — | 2,472 | 13,297 | 13,297 | – | 2,450 | 15,747 | | Peters | 128,022 | 259,123 | 42,265 | 429,410 | 145,601(3) | 194,553 | 37,048 | 377,202 | | Talwar | 3,083 | 75,845 | 32,588 | 111,516 | 17,263(3) | – | 7,433 | 24,696 | | Underhill | 11,552 | — | 2,472 | 14,024 | 15,443 | – | 1,136 | 16,579 | | Walker | 2,357 | — | 2,472 | 4,829 | 4,829 | – | 2,373 | 7,202 | | Young | 47,043 | — | 74,266 | 121,309 | 49,515 | – | 76,659 | 126,174 | | All 23 directors and executive officers as a group, | 815,209 | 1,807,316 | 511,524 | 3,134,049(d) | | | including the NEOs | | | | | All 25 directors and executive officers as a group, including the NEOs | | 927,220 | 1,640,476 | 402,301 | 2,969,997(4) |
| (a)(1) | This column includes shares held in the Company’s 401(k) Plan. |
| (b)(2) | This column includes the (i)(a) DSUs credited to the accounts of the directors who elected to defer all or part of their annual retainer fee, (ii)(b) executives’ unvested time-based RSUs, and (iii)(c) earned but unvested PSUs. The DSUs, RSUs, and PSUs do not have current voting or investment power. |
| (c)(3) | This information is based on the last beneficial ownership reportreports filed on behalf of Ms. Peters and Mr. JacobsTalwar with the SEC on March 27, 2020,30, 2021 and May 17, 2021, respectively, and also includes 10,100 time-based7,209 RSUs that were accelerated in connection with Mr. Jacobs’sMs. Peters’s departure. |
| (d)(4) | This number represents approximately 3.0%3.1% of the shares of Common Stock outstanding at the close of business on March 22, 2021.the Record Date. |
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| 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, 20202021 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
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 | 12,930,344(a) | 12.4(a) | The Vanguard Group, Inc. 100 Vanguard Boulevard
Malvern, Pennsylvania 19355
| 9,194,28711,309,861(b) | 8.8211.27(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 | 8,748,526(c)
| 8.4(c) | FMR LLC 245 Summer Street
Boston, Massachusetts 02210
| 7,679,6868,622,922(d) | 7.3698.591(d) | 245 Summer Street | | | | Boston, Massachusetts 02210 | | | | Boston Partners | 5,474,042(e) | 5.45(e) | | One Beacon Street, 30th Floor | | | | Boston, Massachusetts 02108 | 5,294,765(e) | 5.08(e) |
| (a) | Reflects shares beneficially owned as of December 31, 2020July 14, 2021 according to Amendment No. 2 to Schedule 13GForm 4 filed with the SEC. As reported in this schedule,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 12,930,34412,750,317 shares and shared dispositive power with respect to 12,930,34412,750,317 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, 20202021 according to Amendment No. 1012 to Schedule 13G filed with the SEC. As reported in this schedule, The Vanguard Group, an investment adviser, holds shared voting power with respect to 70,72356,593 shares, sole dispositive power with respect to 9,037,63411,180,393 shares, and shared dispositive power with respect to 156,653129,468 shares. |
| (c) | Reflects shares beneficially owned as of December 31, 20202021 according to Amendment No. 1213 to Schedule 13G filed with the SEC. As reported in this schedule, BlackRock, Inc., a parent holding company, holds sole voting power with respect to 8,388,5857,434,875 shares and sole dispositive power with respect to 8,748,5267,742,626 shares. |
| (d) | Reflects shares beneficially owned as of December 31, 20202021 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 andTrust 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”Co. LLC”), a wholly-owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. FMR CoCo. 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 31, 202030, 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 4,079,6284,089,913 shares, shared voting power with respect to 9,6249,361 shares, and sole dispositive power with respect to 5,294,7655,474,042 shares. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires that our directors, executive officers, and persons who own more than 10% of the 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 2020 fiscal year, we believe that during the 2020 fiscal year, the persons subject to Section 16(a) reporting complied with all applicable SEC filing requirements, except that five Forms 4 disclosing RSU and options awards, PSUs earned for the 2018-19 long-term performance measurement periods, and ESPP purchases, as applicable, for each of Giovanna Cipriano, Senior Vice President and Chief Accounting Officer; Sheilagh M. Clarke, Senior Vice President, General Counsel and Secretary; Todd Greener, Senior Vice President–Global Supply Chain and Logistics; Elizabeth Norberg, Senior Vice President and Chief Human Resources Officer; and John A. Maurer, Vice President, Treasurer, were reported late on March 30, 2020, due to delays caused by technical difficulties as a result of the COVID-19 pandemic.
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Deadlines and Procedures for Nominations and Shareholder Proposals
Proposals for Inclusion in Our 2022 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 2022 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 10, 2021 in order to be considered for inclusion in the 2022 proxy statement.
Nominations and
Shareholder Proposals | Procedure | 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. | December 9, 2022 | 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. |
Director Nominations for Inclusion in Our 2022 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 2022 Annual Meeting at our corporate headquarters at 330 West 34th Street, New York, New York 10001 no earlier than November 10, 2021 and no later than December 10, 2021. You should carefully review the requirements specified in the Company’s By-Laws, which are available on the corporate governance section of our corporate website at footlocker.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 2022 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 2022 Annual Meeting, we must receive this notice no earlier than January 19, 2022 and no later than February 18, 2022, assuming that our 2022 Annual Meeting is held on schedule. However, if we hold the 2022 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 at footlocker.com/corp or from the Secretary.
By Order of the Board of Directors SHEILAGH M. CLARKE Senior
Executive Vice President, General Counsel and Secretary
April 9, 20218, 2022
88104
| Foot Locker, Inc. | |
Questions and Answers about the 2021 Annual Meeting and Voting
Q: HOW MAY I OBTAIN AN ADDITIONAL COPY OF THE 2020 ANNUAL REPORT ON FORM 10-K?
| A:Q: | You may obtain an additional copy of our 2020What constitutes a quorum for the Annual Report on Form 10-K without charge by writing to our Investor Relations Department at Foot Locker, Inc., 330 West 34th Street, New York, New York 10001. It is also available free of charge on our corporate website at footlocker.com/corp.Meeting? |
Q: WHAT CONSTITUTES A QUORUM FOR THE 2021 ANNUAL MEETING?
| A: | We will have a quorum and be able to conduct the business of the 2021 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 2021 ANNUAL MEETING?
| Q: | Who may vote at the Annual Meeting? |
| A: | Only shareholders of record on the books of the Company as of March 22, 2021the Record Date are entitled to vote at the 2021 Annual Meeting, and any adjournments or postponements of the meeting, on the items of business described in this Proxy Statement. There were 103,278,20196,089,997 shares of Common Stock outstanding as of March 22, 2021.the Record Date. Each share of Common Stock is entitled to one vote. |
Q: CAN I VOTE SHARES HELD IN EMPLOYEE PLANS?
| Q: | Can I vote shares held in employee plans? |
| A: | If you hold shares of the Common Stock through the Foot Locker 401(k) Plan or the Foot Locker Puerto Rico 1165(e) Plan, your proxy card includes the number of shares allocated to your plan account. Your proxy card will serve as a voting instruction cardVIF 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 16, 2021.15, 2022. |
Q: COULD MATTERS BE VOTED ON AT THE 2021 ANNUAL MEETING OTHER THAN THE PROPOSALS ON PAGE 6?
| 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 2021 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?
| 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 2.3. 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 23 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 3.4. |
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 Foot Locker 401(k) Plan or Foot Locker Puerto Rico 1165(e) Plan, no votes will be cast on your behalf on any of the proposals if you do not cast your vote. | 2021 Proxy Statement Q: | 89How will the votes be counted?
|
Questions and Answers about the 2021 Annual Meeting and Voting
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?
| 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 the Secretary at the Company’s corporate headquarters,
| ► | sending a written notice to our Secretary at our Corporate Headquarters, |
delivering a valid proxy card with a later date,
| ► | delivering a valid proxy card with a later date, |
providing a later-dated vote by telephone, internet, or app, or
| ► | providing a later-dated vote by telephone, scanning, internet, or app, or |
voting at the 2021 Annual Meeting.
Q: WILL MY VOTE BE CONFIDENTIAL?
| ► | voting at the Annual Meeting. |
| A:Q: | Yes, we maintainHow do I attend the confidentiality of our shareholders’ votes. All proxy cards, electronic voting, voting instruction forms and voting tabulations identifying shareholders are kept confidential from the Company, except:Annual Meeting? |
as necessary to satisfy any applicable legal requirements,
when a shareholder requests disclosure or writes a comment on a proxy card,
in a contested proxy solicitation, and
to allow independent inspectors of election to tabulate and certify the vote.
Q: HOW DO I ATTEND THE 2021 ANNUAL MEETING?
| A: | We are pleased to welcome shareholders to the 2021 Annual Meeting. Due to the COVID-19 pandemic, the 2021The 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 2021 Annual Meeting, you will need to log-in to virtualshareholdermeeting.com/FL2021FL2022 using the 16-digit control number found on your Notice, proxy card, voting instruction form,VIF, or email previously sent to shareholders entitled to vote at the 2021 Annual Meeting. Even if you plan on attending the 2021 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 2021 Annual Meeting. In the event a virtual-only meeting is not permitted under New York law, we will notify shareholders in advance of the physical location of the meeting by issuing a press release, which will be available on our corporate website at footlocker.com/corp and proxyvote.com, and filing it as additional proxy material with the SEC.
Q: WILL THERE BE A QUESTION AND ANSWER SESSION AT THE 2021 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 2021 Annual Meeting by logging in with the 16-digit control number at virtualshareholdermeeting.com/FL2021. 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 2021 Annual Meeting.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.corp 90
| Foot Locker, Inc. | |
Questions and Answers about the 2021 Annual Meeting and Voting
Q: WHO PAYS THE COST OF THIS PROXY SOLICITATION?.
| A:Q: | WeWill 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?
| 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 2021 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 9, 2021,8, 2022, we started mailing a Notice to most of our shareholders in the United States. The Notice contains instructions on how to access our 2021 Proxy Statement and 2020 Annual Report on Form 10-K 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 2020 Annual Report on Form 10-K on or about April 9, 2021. Q: WHAT IS “HOUSEHOLDING” AND HOW DOES IT AFFECT ME?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/voting instruction formsVIFs to vote their shares. Shareholders who receive the Foot Locker Notice will receiveget instructions on submitting their proxy cards/voting instruction formVIF 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., by calling (866) 540-7095 or by writing to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717. 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 | 2021 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
sclarke@footlocker.com Investor Relations
ir@footlocker.com or mail to our Corporate Headquarters,
attention to the applicable contact Corporate Headquarters Foot Locker, Inc.
330 West 34th Street
New York, New York 10001
212-720-3700 | To Request Copies of the Internet Notice or Proxy Materials Broadridge Financial Solutions, Inc.
(Tabulator/Inspector of Election)
proxyvote.com
sendmaterial@proxyvote.com 800-579-1639 To Change Your Householding Election Broadridge Financial Solutions, Inc.
Householding Department
51 Mercedes Way
Edgewood, New York 11717 For Questions or Assistance Voting Innisfree M&A Incorporated
(Proxy Solicitor) Shareholders in the United States and Canada: 877-750-2689 Shareholders in all other locations: 412-232-3651
Banks and brokers: 212-750-5833 |
| 2022 Proxy Statement | 91107
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Economic Development Stronger together “We stand resolute in our commitment to fight racial inequality and injustice. This commitment extends beyond words. It is part of our culture and the way we operate as an inclusive and diverse organization. We recognize that Black Culture plays a pivotal role in shaping Sneaker Culture—the foundation of our business at Foot Locker. We believe we have an obligation to add our voice and actions to drive meaningful and lasting change across our company and within the communities we serve.” Richard A. Johnson, Chairman and Chief Executive Officer Economic Development initiatives target by 2025 Education Education initiatives target by 2025
footlocker.com/corp
330 WEST 34TH STREET
NEW YORK, NYNEW YORK 10001 |  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/FL2021FL2022 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, NYNew York 11717. |
| | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | | | | | D37967-P52340-Z79424D67373-P64618 | 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. | | | | | | | | | A | Proposals - The Board of Directors recommends a vote FOR EACH NOMINEE each of the nominees, FOR Proposal 2, 1 Year for Director in Proposal 1.3, and FOR Proposal 4. | | | | | | | | | | | 1. | Election ofElect Ten Directors to the Board to Serve for One-Year Terms. | | | | | | | | | | | Nominees: | For | Against | Abstain | | | | | | | | | | 1a. | Alan D. FeldmanVirginia C. Drosos | ☐ | ☐ | ☐ | | | | | | | | | | 1b. | Richard A. JohnsonAlan D. Feldman | ☐ | ☐ | ☐ | | | | | | | | | | 1c. | Guillermo G. MarmolRichard A. Johnson | ☐ | ☐ | ☐ | | | | | | | | | | 1d. | Matthew M. McKennaGuillermo G. Marmol | ☐ | ☐ | ☐ | | | | | | | | | | 1e. | Darlene Nicosia | ☐ | ☐ | ☐ | | | | | | | | | | 1f. | Steven Oakland | ☐ | ☐ | ☐ | | | | | | | | | | 1g. | Ulice Payne, Jr. | ☐ | ☐ | ☐ | | | | | | | | | | 1h. | Kimberly Underhill | ☐ | ☐ | ☐ | | | | | | | | | | 1i. | Tristan Walker | ☐ | ☐ | ☐ | | | | | | | | | | 1j. | Dona D. Young | ☐ | ☐ | ☐ |
| | | | | | | The Board of Directors recommends a vote FOR Proposals 2 and 3. | | For | Against | Abstain | | | | | | | | 2. | Vote, on an Advisory Approval ofBasis, to Approve the Company’sCompany's Named Executive Officers' Compensation. | ☐ | ☐ | ☐ | | | | | | | | | | 1 Year | 2 Years | 3 Years | Abstain | | | | | | | | 3. | Ratification ofVote, on an Advisory Basis, on whether the Shareholder Vote to Approve the Company's Named Executive Officers' Compensation Should Occur Every 1, 2, or 3 Years. | | | | | | | | | | | | | For | Against | Abstain | | | | | | | | 4. | Ratify the Appointment of KPMG LLP as the Company's Independent Registered Public Accounting Firm.Firm for the 2022 Fiscal Year. | ☐ | ☐ | ☐ | | | | | | | | | 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 at www.proxyvote.com. D37968-P52340-Z79424D67374-P64618
| | | | | | | | | | | | | | | | | | | | FOOT LOCKER, INC. Annual Meeting of Shareholders
May 19, 202118, 2022 at 9:00 A.M. Eastern Daylight Time | | | | This proxy is solicited by the Board of Directors of Foot Locker, Inc. | | | | | | | | | | | | Andrew E. Page, Sheilagh M. Clarke, and John A. Maurer, or eitherany of them, botheach with the power of substitution, are hereby authorized to vote the shares of the undersigned at the Annual Meeting of Shareholders of Foot Locker, Inc., to be held on May 19, 2021,18, 2022, at 9:00 A.M., local time, virtually at www.virtualshareholdermeeting.com/FL2021,FL2022, and at any adjournment or postponement thereof, upon the matters set forth in Foot Locker, Inc.'s Proxy Statement and upon such other matters as may properly come before the Annual Meeting, voting as specified on the reverse side of this card with respect to the matters set forth in the Proxy Statement, and voting in the discretion of the above-named persons on such other matters as may properly come before the Annual Meeting. | | | | | | | | | | | | 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 DIRECTORS’DIRECTORS' RECOMMENDATIONS. | | | | | | | | 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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