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not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.
At each Board meeting, a member of management presents a summary of all communications received since the last meeting that were not forwarded to our Board or the director or directors to whom they were addressed. A member of management also makes those communications available to our Board upon request.
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our company
our executive officers
OUR COMPANYOur Executive Officers
The following is a list of our executive officers and their respective ages, positions, and brief biographies as of the date of this proxy statement.
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  Tarang Amin Chief Executive Officer and Presidentchief executive officer and president
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Age: 55 57 | | Current Role • Mr. Amin has served as our Chief Executive Officer since January 2014 and as our President since March 2019. |
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  Mandy Fields Rich Baruch senior vice president and chief commercial officer
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Age: 52 | Current Role
• Mr. Baruch has served as our Senior Vice President and Chief CommercialFinancial Officer since February 2014.
Select Prior Experience
• Senior Vice President and Chief Commercial Officer at Schiff Nutrition (until its acquisition, NYSE: SHF) from July 2012 to January 2013 when it was acquired.
• Vice President, Category Advisory Services at Coca-Cola Refreshments, a division of The Coca-Cola Company (NYSE: KO), a leading global beverage company, from December 2010 to June 2012.
• Over 10 years sales leadership experience with The Clorox Company.
Education
• B.A. in English from University of Pennsylvania.
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Age: 41 | |
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 Mandy Fields senior vice president and chief financial officer |
Age: 39 | • Ms. Fields has served as our Senior Vice President and Chief Financial Officer since April 2019. • Chief Financial Officer of BevMo!, a retailer of alcoholic beverages, from June 2016 to March 2019. • Vice President of Finance and Analytics at Albertsons Companies, a grocery company, from 2010July 2015 to June 2016. • B.S. in Finance from Indiana University of Bloomington’s Kelley School of Business. |
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 Josh Franks Senior Vice President, Operationssenior vice president, operations
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Age: 42 44 | | Current Role • Mr. Franks has served as our Senior Vice President, Operations since January 2020. • Senior Vice President, Operations and Supply Chain, at Lyrical Foods (d/b/a Kite-Hill), a plant-based, dairy-free packaged food manufacturer, from July 2018 to December 2019. • Vice President, Operations and Supply Chain, at Raybern Foods, a packaged food manufacturer, from April 2014 to March 2018. • B.S. in Business Administration, Operations Management, and Supply Chain Management from North Carolina State University. |
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 Jennie Laar Senior Vice President and Chief Commercial Officer
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Age: 53 | | Current Role • Ms. Laar has served as our Senior Vice President and Chief Commercial Officer since May 2022. Select Prior Experience • Senior Vice President, Global Wholesale at Forma Brands, a beauty brand incubator, from 2021 to 2022. • Vice President, Global Wholesale at Forma Brands from 2017 to 2021. • Vice President, Sales & Merchandising at Bare Escentuals, a global beauty company, from 2013 to 2017. Education • B.A. in Modern European Studies from Nottingham Trent University. |
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  Kory Marchisotto Senior Vice President and Chief Marketing Officersenior vice president, chief marketing officer
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Age: 44 46 | | Current Role • Ms. Marchisotto has served as our Senior Vice President and Chief Marketing Officer since February 2019. • Senior Vice President, Marketing for bareMinerals, a former brand of Shiseido Americas Corporation (TYO: 4911), a global beauty company, from 2016 to 2018. • Senior Vice President of Marketing, Beauty Prestige Group (from 2015 to 2016) and Vice President of Marketing, Beauty Prestige Group (from 2011 to 2015) at Shiseido Americas Corporation. • Masters of Professional Studies, Cosmetics and Fragrance Marketing and Management from the Fashion Institute of Technology. • B.B.A. in Marketing from Pace University’s Lubin School of Business. |
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 Scott Milsten Senior Vice President, General Counsel, Chief People Officer, and Corp. Sec.
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Age: 52 | |
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 Scott Milsten senior vice president, general counsel, and chief people officer |
Age: 50 | • Mr. Milsten has served as our Senior Vice President, General Counsel, and Corporate Secretary since January 2014 and as our Chief People Officer since August 2016. • Senior Vice President, General Counsel, and Corporate Secretary at Schiff Nutrition (until its acquisition, NYSE: SHF) from July 2011 to January 2013 when it was acquired. • Senior Vice President, General Counsel, and Corporate Secretary of Celera Corporation, a health-care diagnostics company (until its acquisition, NASDAQ: CRA), from August 2009 to June 2011 when it was acquired. • B.A. in English from Duke University. • J.D. from University of Pennsylvania Law School. |
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Our Team, Culture, and Commitments
e.l.f. Beauty is led by its purpose—we stand with every eye, lip, face and paw. We are committed to creating a culture internally—and in the world around us—where all individuals are encouraged to express their truest selves, are empowered to succeed, and where we strive to do the right thing for people, the planet and our furry friends.
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| Encourage Self Expression | | Empower Others | | Embody Our Ethics |
We celebrate diversity and make
the best of beauty accessible. | | We provide equal opportunities for growth and success. | | We do the right thing for all people,
the planet and our furry friends. |
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Encourage Self Expression: Promoting a Culture of Diversity, Equity, and Inclusion
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 | | We are committed to diversity, equity plansand inclusion and believe it is important that our team reflects the diverse consumers we serve. Our commitment to diversity, equity, and inclusion starts at the top with a highly skilled and diverse Board. We are proud to be one of only 26 public companies in the U.S. where members of underrepresented demographic groups represent at least one third of the Board (out of nearly 4,500 public companies). |
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| We’re also proud that our employee base, which is over 75% women, over 40% diverse, and over 65% millennial and Gen Z, is representative of the young, diverse consumers we serve. We are committed to increasing the representation of women and visible minorities in our workforce. |
The following table provides certain statistics of our Board and our team as of March 31, 2022. For information about our Board diversity, age, tenure, and skills, see under the heading “Our Board of Directors—About our Board”.
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| | | board of directors | | | senior leadership (1) | | | all employees (2) | |
Gender | | | | | | | | | | | | |
Female | | | 56% | | | | 43% | | | | 77% | |
Male | | | 44% | | | | 57% | | | | 23% | |
Age | | | | | | | | | | | | |
Millennial and Gen Z | | | — | | | | — | | | | 67% | |
All other | | | 100% | | | | 100% | | | | 33% | |
Race/Ethnicity | | | | | | | | | | | | |
Black or African American | | | 22% | | | | 14% | | | | 6% | |
Hispanic or Latinx | | | — | | | | — | | | | 13% | |
Asian | | | 11% | | | | 29% | | | | 18% | |
Native American | | | — | | | | — | | | | 1% | |
Two or more races | | | — | | | | — | | | | 6% | |
White | | | 67% | | | | 57% | | | | 57% | |
| (1) | stockholdersIncludes all executive officers and our Vice President, General Manager of our China Operations. |
| (2) | auditEmployee demographic figures based on our employees as of March 31, 2022. Race/ethnicity percentages exclude our employees in China. |
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We believe that to drive change, there must be continuous education, learning, and relatedsharing. We are committed to providing diversity, equity, and inclusion programs and initiatives that go beyond what is legally required of our company. We offer Unconscious Bias Training and a Behaviors of Inclusion Course to all of our employees, so that our employees learn the psychology of unconscious bias and its impact at work and practice behaviors of inclusion. We host open forums with our senior leadership to share and encourage uncomfortable conversations. Additionally, we regularly host education events for our employees to lean into cultural moments such as Black History Month; International Women’s Month; Asian American and Pacific Islander Heritage Month; Lesbian, Gay, Bisexual, Transgender and Queer Pride Month; and LatinX Heritage Month.
Empower Others: Supporting the Full Potential of our Employees
Employee Pay and Benefits
Our talented employees are at the core of our business strategy. We place a high priority on attracting, recruiting, developing, and retaining diverse global talent. Our benefits and programs are designed to support the total well-being and promote the full potential of our employees.
With regards to compensation, we take a “one-team” approach. All full-time employees receive a base salary, are bonus eligible under a single bonus plan (which is tied solely to our financial performance and does not include a personal performance component), and receive an equity award in e.l.f. Beauty stock. We believe this approach, which applies across all employee levels and geographies, is unique in the beauty industry and contributes to our success in hiring and retaining top talent and driving business results.
In the U.S., where over 70% of our workforce is located, benefits for our full-time employees include:
financial benefits including competitive compensation as well as retirement savings plans and commuter benefits;
healthcare benefits including flexible spending accounts, disability and life insurance;
family support and flexibility benefits including up to 20 weeks of parental leave for the birth or adoption of a child as well as the placement of a foster child, as well as fertility and adoption support;
wellness and time off programs including flexible time off, an employee assistance program, and access to wellness coaches;
community impact programs including volunteer time off and donation matching programs;
education and career development programs including tuition reimbursement, high performance teamwork coaching, as well as ongoing learning and training opportunities; and
other benefits, such as “Pawternity Leave” for the adoption of a shelter animal
Outside of the U.S., we provide similarly competitive benefit packages to those provided to our U.S. employees that are tailored to market-specific practices.
Employee Satisfaction
We measure our employee satisfaction and identify opportunities for improvement through employee engagement surveys.
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In April 2022, we conducted our annual benchmarked engagement survey of all employees. All employees were offered an opportunity to participate and 81% of our employees submitted a response. The responses returned an overall highly favorable employee engagement score of 89%—15 percentage points above the industry benchmark and one percentage point above our survey the previous year.
The survey was conducted through a platform service delivered by Culture Amp and the responses were analyzed against Culture Amp’s Consumer Goods & Services 2022 Benchmark, which includes survey results from a minimum of 20 companies and 20,000 employees at organizations that are direct-to-consumer and produce and sell various products and services.
The engagement survey results were as follows:
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Beauty | | | consumer
goods and
services 2022
benchmark | | | difference
(percentage
points) | |
Employee Engagement | | | 89% | | | | 74% | | | | +15% | |
Questions that determine employee engagement | | | | | | | | | | | | |
I would recommend my company as a great place to work | | | 95% | | | | 85% | | | | +10% | |
My company motivates me to go beyond what I would in a similar role elsewhere | | | 92% | | | | 73% | | | | +19% | |
I am proud to work for my company | | | 96% | | | | 89% | | | | +7% | |
I rarely think about looking for a job at another company | | | 78% | | | | 56% | | | | +22% | |
I see myself working at my company in two years’ time | | | 85% | | | | 67% | | | | +18% | |
Embody our Ethics: Doing the Right Thing for All People, the Planet, and our Furry Friends
All People
We proudly support human rights and individual expression and freedom. As such, we treat all employees with respect, regardless of age, gender, ethnicity, religion, abilities or sexual orientation. We also expect our suppliers and partners to observe these principles when providing products and services to us.
The Planet
We are committed to minimizing our environmental impact while providing our consumers with premium-quality beauty products.
In FY 2022, we celebrated a significant milestone on our sustainability journey—eliminating approximately one million pounds of packaging waste since the inception of “Project Unicorn”. Project Unicorn was launched in 2019 to elevate e.l.f. Cosmetics’ product assortment, presentation, and navigation on-shelf, and resulted in a significant streamlining in our product packaging footprint. The elimination of packaging waste was achieved by removing secondary cartons, vacuum formed trays and paper insert cards, slimming down secondary packaging, and designing a patented approach to display product on shelf.
Our Furry Friends
We are proud to be a 100% cruelty-free company. We do not conduct or tolerate any tests on animals, nor do we use any ingredients that are tested on animals in any of our products.
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Each of our brands is certified by People for the Ethical Treatment of Animals (PETA) as “Global Animal Test-Free”, a label given to companies and brands who have verified that their facilities and their suppliers do not conduct, commission, pay for, or allow any tests on animals for their ingredients, formulations, or finished products, and refuse to use any animal-derived ingredients such as honey, beeswax, or carmine in their products.
Each of our brands has also been certified by the Leaping Bunny Program, operated by the Coalition for Consumer Information on Cosmetics in the U.S. and Canada. Companies with these certifications must pledge to end animal testing at all stages of product development in addition to recommitting to the program annually and being open to third party transactions
policyaudits.Certain Relationships and procedures
Related Party TransactionsPolicy and Procedures
The Audit Committee has adopted a written policy regarding transactions between the Companye.l.f. Beauty and our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of our common stock, and any affiliates or members of the immediate family of any of the foregoing. We refer to these individuals and entities as “related parties” and these relationships generally as “related party transactions”.
Any request for us to enter into a related party transaction in which the amount involved exceeds $120,000 and a related party would have a direct or indirect interest must first be presented to the Audit Committee for review, consideration, and approval. The Audit Committee reviews all the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related party’s interest in the transaction, and considers any conflicts of interest and corporate opportunity provisions of the Company’sour Code of Business Conduct and Ethics.
related party transactionsRelated Party Transactions during the year
YearThe following is a description of related party transactions entered into during 2019T and FY 20202022 in which the amount involved exceeds $120,000 and a related party would have a direct or indirect interest:
we entered into our standard indemnification agreement with Ms. Marchisotto, Ms. Fields, and Mr. Franks when each joined the Company. Our standard indemnification agreement requires us to, among other things, indemnify our directors and executive officers to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees incurred by such individuals in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer. We have obtained an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under applicable securities laws.
PlansCertain of our executive officers have adopted written plans, known as Rule 10b5-1 plans, in which they have contracted with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the individual when entering into the Rule 10b5-1 plan, without further direction from them. The individual may amend or terminateterminate the Rule 10b5-1 plan in specified circumstances.
corporate governance materials
Corporate Governance MaterialsOur Corporate Governance Guidelines are intended to provide a set of flexible guidelines for the effective functioning of our Board, including director qualifications and responsibilities, management succession and Board committees. Our Corporate Governance Guidelines are reviewed regularly and revised as necessary or appropriate in response to changing
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regulatory requirements, evolving best practices, and other considerations. A copy of our Corporate Governance Guidelines is available on our investor relations website at investor.elfcosmetics.com/investor.elfbeauty.com/corporate-governance/governance-guidelines. | | | | |
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In addition to our Corporate Governance Guidelines, we have adopted a Code of Business Conduct and Ethics for our directors, officers, and employees, including our principal executive officer and principal financial officer, and principal accounting officer. TheOur Code of Business Conduct and Ethics is designed to help directors and employees resolve ethical and compliance issues encountered in the business environment. We will make any legally required disclosures regarding amendments to, or waivers of, our Code of Business Conduct and Ethics on our investor relations website. A copy of our Code of Business Conduct and Ethics is available on our investor relations website at investor.elfbeauty.com/corporate-governance/code-of-business-conduct-ethics.investor.elfcosmetics.com/corporate-governance/code-of-business-conduct-ethics.
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executive compensation
EXECUTIVE COMPENSATION |
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proposalProposal 2: | advisory vote | Advisory Vote to approve compensationApprove Compensation for our named executive officersNamed Executive Officers |
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FOR | | Our Board unanimously recommends a vote “FOR” the approval, on an advisory basis, of the compensation for our named executedexecutive officers.Our Board believes our executive compensation program aligns the interests of our executive officers with the long-term interests of our stockholders and, consistent with our pay-for-performance culture, rewards our executive officers when the Company achieves itswe achieve our short- and long-term strategic and financial goals. |
As an emerging growth company, we are not requiredI Voting On?At the 2020 annual meeting of stockholders, our stockholders expressed a preference to hold anfuture advisory vote to approve(non-binding) votes on the compensation of our named executive officers (commonly referred to as a “say-on-pay vote”). We will not be required to hold a say-on-payon an annual basis. Consistent with that vote, until we cease to be an emerging growth company, which will occur on March 31, 2022 or the earlier date that we meet certain market capitalization, revenue, or debt thresholds.
We are adopting the say-on-pay advisory vote early. Stockholdersstockholders are being asked to indicate their support, on an advisory (non-binding) basis, for the compensation of our named executive officers for 2019T and FY 20202022 as described in this proxy statement by casting a vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the Company’se.l.f. Beauty, Inc.’s named executive officers for 2019T and FY 2020,2022, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, compensation tables, and narrative discussion, is hereby APPROVED.”
This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement.
Because the vote is advisory, it is not binding on our Board or the Company.e.l.f. Beauty. Nevertheless, the views expressed by our stockholders, whether through this vote or otherwise, are important to management and our Board and, accordingly, our Board and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements.
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whatWhat is the required vote?
Required Vote?The compensation of our named executive officers for 2019T and FY 20202022 will be approved, on an advisory basis, by a majority of votes cast (meaning the number of shares voted “For” must exceed the number of shares voted “Against” in order for this proposal to be approved). Abstentions and broker non-votes are not considered votes cast for this proposal and will have no effect on the vote for this proposal.
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proposal 3: | advisory vote on the frequency of the advisory vote on executive compensation |
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1 YEAR
| Our Board unanimously recommends a vote for “1 YEAR”, on an advisory basis, for the frequency of the advisory vote on executive compensation.
Our Board believes an annual say-on-pay vote would enable our stockholders to provide us with input regarding the compensation of our named executive officers on a timely basis.
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what am i voting on?
Stockholders are being asked to vote, on an advisory (non-binding) basis, for how frequently we should seek a say-on-pay vote (commonly referred to as a “say-when-on-pay vote”). As an emerging growth company, as in the case of the say-on-pay vote, we are not required to hold a say-when-on-pay vote. However, as a matter of good governanceCompensation Discussion and in connection with our early adoption of the say-on-pay vote, we are also holding a say-when-on-pay vote.
Stockholders may vote for whether they would prefer a say-on-pay vote every year, every two years, or every three years. Stockholders may also abstain from voting on this proposal. While we will continue to monitor developments in this area, our Board currently plans to seek a say-on-pay vote every year and, as such, is asking our stockholders to vote for a frequency of “1 YEAR”. Our Board and the Compensation Committee believe that holding a say-on-pay vote every year is advisable for a number of reasons, including the following:
it would enable our stockholders to provide us with input regarding the compensation of our named executive officers on a timely basis; and
it is consistent with our goal to seek input from, and engage in discussion with, our stockholders on corporate governance matters and our compensation philosophy, policies, and practices for our executive officers.
Stockholders are not voting to approve or disapprove our Board’s recommendation. Instead, stockholders may vote for their preferred frequency of the say-on-pay vote: “1 year,” “2 years,” “3 years” or “Abstain.”
Because the vote is advisory, it is not binding on our Board or the Company. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and our Board and, accordingly, our Board and the Compensation Committee intend take into account the outcome of this vote in considering the frequency with which the say-on-pay vote will be held in the future.
what is the required vote?
As noted above, stockholders are not voting to approve or disapprove our Board’s recommendation with respect to the frequency with which the say-on-pay vote will be held in the future. With that said, the frequency choice (“1 year,” “2 years,” “3 years”) receiving the most votes will be given due regard by, but will not be binding on, our Board or the Company.
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compensation discussion and analysis
AnalysisThe compensation discussion and analysis (the “CD&A”) provides information with respect to compensation for our named executive officers for:
the transition period from January 1, 2019 to March 31, 2019 (“2019T”), which resulted from the change in late 2018 to the Company’s fiscal year-end from December 31 to March 31; and
for the fiscal year ended March 31, 20202022 (“FY 2020”2022”).
We are not required to include a compensation discussion and analysis in our proxy statement until we cease to be an emerging growth company. This year, however, we have elected to provide additional disclosure beyond what the JOBS Act requires of emerging growth companies.
The CD&A is organized into the following sections:
Named Executive Officers
Our named executive officers for FY 2022 were as follows:
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name | | position |
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Tarang Amin | | Chairman, Chief Executive Officer, President, and Director |
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Mandy Fields | | Senior Vice President and Chief Financial Officer |
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Josh Franks | | Senior Vice President, Operations |
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Kory Marchisotto | | Senior Vice President and Chief Marketing Officer |
Rich Baruch | • | Former Senior Vice President and Chief Commercial Officer(1) |
| (1) | Mr. Baruch departed from the Company effective June 2, 2022. He did not receive any severance benefits in connection with his departure. |
For biographical information regarding our named executive officers, see under the heading “Our Company—Our Executive Officers”.
executive summary
Executive SummaryOur Company and our Brands
e.l.f. Beauty, Inc. (NYSE: ELF) (“e.l.f. Beauty” or “we”) is a multi-brand beauty company
We offer that offers inclusive, accessible,
clean and cruelty-free
cosmetics and skincare products at an extraordinary value.WHO WE ARE. We are bold disruptors with a kind heart. We’re disrupting traditional beauty products. Our uniqueboundaries while leading with empathy, intention and an innate desire to empower people.
OUR MISSION. We build brands that disrupt industry norms, shape culture and connect communities through positivity, inclusivity and accessibility.
OUR PURPOSE. We stand with every eye, lip, face and paw.
We believe our ability to combine cost, quality, and speeddeliver 100% cruelty-free, clean, premium-quality products at accessible prices with broad appeal differentiates us in the beauty industry. ThisWe believe the combination along withof our innovation capabilities, enablesengine, core value proposition, digitally-led strategy, as well as our world-class team’s ability to execute with speed, has positioned us well to deliver prestige quality products at extraordinary prices across color cosmetics and adjacent categories, such as skin care.
Our brands are our namesake e.l.f. Cosmetics brand, which makes the best of beauty accessible to every eye, lip and face by offering high-quality cosmetics and skin care products at an extraordinary value, all formulated 100% vegan and cruelty-free, and our newly acquired W3LL PEOPLE brand,navigate a clean beauty pioneer with 40 EWG VERIFIED™ products.
strong financial results
2019T and FY 2020 was a terrific period for the Company, highlighted by five consecutive quarters of net sales growth.
rapidly changing landscape in beauty. |
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Our family of brands includes e.l.f. Cosmetics, e.l.f. SKIN, Well People and Keys Soulcare. Our brands are available online and across leading beauty, mass-market and clean-beauty specialty retailers. We have strong relationships with our retail partners such as Walmart, Target, Ulta Beauty and other leading retailers that have enabled us to expand distribution both domestically and internationally.
Each of our brands is positioned to touch diverse consumer cohorts at different price points. Each brand has accessible pricing relative to its competitive set and furthers our mission of leading with positivity, inclusivity and accessibility.
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| | Since 2004, e.l.f. Cosmetics has made the best of beauty accessible to every eye, lip and face. e.l.f. makes high-quality, prestige-inspired cosmetics at an extraordinary value and is proud to be 100% vegan, clean and cruelty-free. |
| | Winning in skin the clean + kind way. Ingredient focused skincare for every eye, lip, face and skin concern. e.l.f. SKIN makes innovative formulas at an extraordinary value, always 100% vegan, clean and cruelty-free. |
| | A clean beauty pioneer with 40 EWG VERIFIED™ products, Well People has raised the standard for high-performing, plant-powered and cruelty-free beauty and skincare since 2008. Founded on the principles of being derm-developed, super-clean, and planet minded, Well People is committed to inspiring wellness and mindful living. |
 | | Created by Alicia Keys and inspired by her own skincare journey and love of ancient beauty rituals, Keys Soulcare goes beyond skincare to truly care for the whole self-body, mind, and spirit. With an inclusive point of view, Keys Soulcare brings a new meaning to beauty and honors rituals through its line of dermatologist-developed, clean and cruelty-free offerings. |
Highlights from FY 2022
| | | | | | |
| | | | | | |
$392 million | | $22 million | | $45 million | | $75 million |
Net Sales | | Net Income | | Adjusted Net Income (1) | | Adjusted EBITDA (2) |
+23% | | $0.41 | | +23% | | +22% |
| Growth | | Earnings per share | | Growth | | Growth |
| | | | | | |
| | | | | | |
| | | | | | |
5.9% market share (3) | | +25 basis points | | e.l.f. Cosmetics was the only top five color cosmetics brand to grow sales and market share vs. pre-COVID levels | | #1 favorite teen brand (4) |
| |
| | | | | | |
| (1) | See Annex A for a reconciliation of net income to Adjusted Net Income. |
| (2) | See Annex A for a reconciliation of net income to Adjusted EBITDA. |
| (3) | According to Nielsen xAOC 52 weeks ended March 26, 2022. |
| (4) | According to the Piper Sandler Semi-Annual Taking Stock With Teens® Survey, Spring 2022. |
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| | 43 | | 2022 Proxy Statement |
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
Strong Financial Results in a Dynamic Environment
Our results for the fiscal year ended March 31, 2022 (“FY 2022”) underscore e.l.f.’s core value proposition and deep connection with our consumers, as we strengthened our position in a dynamic environment. We grew net sales 23% in FY 2022, with Q4 marking our thirteenth consecutive quarter of net sales growth. e.l.f. Cosmetics continued to gain market share, with 5.9% of the U.S. mass color cosmetics category, up 25 basis points year-over-year. We were the only top five color cosmetics brand to post growth and gain share relative to pre-pandemic levels, by a wide margin.
Continued Progress Against Strategic Imperatives
In FY 2022, we continued our focus on executing our five strategic imperatives to create long-term value for our stockholders. See under the heading “Introduction—Highlights from FY 2022—Continued Progress on our Five Strategic Imperatives” for additional information.
Executing our Transformation to a Multi-Brand Portfolio
In FY 2022, we continued to progress on our transformation to a multi-brand company with our portfolio of distinct, yet complementary brands. See under the heading “Introduction—Highlights from FY 2022—Executing on our Transformation to a Multi-Brand Portfolio” for additional information.
Furthering our Environmental, Social and Governance Commitment and Initiatives
Consistent with our values and commitments, we took a number of steps in FY 2022 to further our environmental, social and governance (“ESG”) journey. We enhanced our ESG policies and disclosure, achieved new sustainability milestones, committed to 100% clean beauty, achieved recognition for our human capital investments and furthered our understanding of our environmental footprint. See under the heading “Introduction-Highlights from FY 2022—Furthering our Environmental, Social and Governance Commitment and Initiatives” for additional information. Also see under the heading “Our Board of Directors—About our Board” and under the heading “Our Company—Our Team, Culture, and Values” for additional information regarding our Board, our company, and our team as it relates to ESG matters.
FY 2022 Executive Compensation Highlights
| | | | | | | | |
|
No increase in
base salaries or
annual cash
incentive targets. | | Cash incentive
compensation tied
solely to
profitability. | | Majority of
compensation is
variable, at-risk,
and in equity. | | Equity awards split
50% performance
based and 50%
time based | | Performance-
based equity
awards tied to
long-term
financial metrics
with 3 year cliff
vesting. |
|
Our executive compensation program is designed to directly tie the compensation paid to our executive officers to our performance and align the interests of our executive officers with the interests of our stockholders. Accordingly, in FY 2022, we continued to limit the cash component of, and emphasize the equity component of, our named executive officers’ total compensation. In addition, as described in more detail below, we continued to evolve our equity compensation program. In FY 2022, all named executive officers received 50% of their equity awards in the form of performance-based restricted stock units (“PSUs”) tied to our net sales and Adjusted EBITDA performance measured over a three-year period. To maximize retention, these awards have a single, cliff vest following the end of the performance period in 2024 based on our financial performance for the period April 1, 2021–March 31, 2024.
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2022 Proxy Statement | | 44 | |
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
Highlights of our compensation-related decisions in FY 2022 include the following:
| • | | No increases to cash compensation. We maintained the existing base salary and annual cash incentive opportunity levels for each of our named executive officers. In fact, we have never increased the base salaries or annual cash incentive opportunities for our named executive officers, which for Mr. Amin and Mr. Baruch (prior to his departure), remain the same as in their respective new hire offers in 2014 and for Ms. Fields, Ms. Marchisotto, and Mr. Franks remain the same as in their respective new hire offers in 2019 and 2020. |
| • | | Annual cash incentives tied to financial performance. We continued to tie our annual cash incentive compensation solely to our profitability. In addition, despite unanticipated increases in transportation costs and general inflationary pressures, we made no changes to our FY 2022 annual cash incentive compensation plan target following its initial approval by the Compensation Committee in May 2021. |
| • | | Emphasis on equity compensation. We continued to provide the majority of compensation paid to our named executive officers in the form of equity to instill an ownership culture, align the interests of our named executive officers with the interests of our stockholders, and support long-term retention. |
| • | | Increasing the percentage of performance-based equity granted to our named executive officers.Wecontinued our practice of granting PSUs to all named executive officers to closely align their compensation with our strong pay-for-performance culture and focus on the delivery of substantial and sustainable value to stockholders. In FY 2022, we increased the percentage of PSUs to 50% of the target equity compensation level for all named executive officers with the remaining equity compensation being time-based restricted stock units (RSUs) (in comparison, in FY 2021, our named executive officers other than our CEO received a mix of 75% RSUs and 25% PSUs). |
| • | | PSUs tied to 3-Year Financial Performance with Cliff Vesting. The FY 2022 PSUs are tied to attainment of both net sales and Adjusted EBITDA growth targets measured over a three-year performance period ending on March 31, 2024. The FY 2022 performance-based equity awards will vest in a single installment, subject to continued service and solely to the extent earned, upon the Compensation Committee’s certification of our achievement of the targets following the three-year performance period. We believe this three-year cliff vesting helps to retain our named executive officers through the completion of the performance period and incentivize long-term performance. |
The compensation for our named executive officers for FY 2022 is discussed in more detail in the sections of the CD&A that follow.
The Compensation Committee’s Continued Engagement with Stockholders
At the 2021 annual meeting of stockholders, approximately 94% of the votes cast by our stockholders approved, on an advisory basis, the compensation of our named executive officers for FY 2021. We attribute this high approval percentage to, among other things, the continued progression of our compensation practices, our enhanced proxy statement disclosure and our Compensation Committee’s continued engagement with our stockholders regarding our executive compensation programs.
Following a well-received outreach program conducted by our Compensation Committee in FY 2021, the Compensation Committee again conducted outreach in FY 2022 to obtain our stockholders’ insights on our executive compensation program. As part of this outreach, the Compensation Committee contacted our 20 largest non-management stockholders, which collectively represented approximately 69% of our outstanding common stock.
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| | 45 | | 2022 Proxy Statement |
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
A member of the Compensation Committee, our General Counsel and Chief People Officer, our Vice President of Investor Relations, and, for some of the meetings, our Chief Executive Officer or our Chief Financial Officer, attended the meetings with the stockholders who accepted our invitations. Feedback from our stockholders was shared with our Board and the Compensation Committee and considered in our Board’s and the Compensation Committee’s discussions and decision-making.
Below is a summary of the principal feedback regarding our executive compensation program we received from our stockholders during these meetings, principal comments included in analyses by Institutional Shareholder Services and Glass Lewis, and the changes made by the Compensation Committee for our FY 2022 executive compensation program in response to this feedback and analysis. We believe these changes are beneficial to the creation of sustained long-term stockholder value.
| | | | | | | | | | | | | | |
| | | What We Heard | | | | 
| | | | | | What We Did | | |
$283million
FY 2020 net sales
| | Increase the percentage of PSUs granted to named executive officers relative to time-based awards | | | 64%
| | | We increased the mix of PSUs to time-based RSUs to 50/50 for all named executive officers (up from 25% in the case of the named executive officers, other than our CEO). Our CEO already received 50% of his equity compensation in the form of PSUs for FY 2020 gross margin2021 and we continued this for FY 2022. All of our named executive officers now receive 50% of their equity compensation in the form of performance-based awards. | | | $18million
FY 2020 net income
|
| | | $63million
FY 2020 Adjusted EBITDA (2)
|
+6%
incl. e.l.f.
retail stores
| +11%
ex. e.l.f.
retail stores (1)
| | | +300
basis points YoY
| | | $0.35
earnings per share
| | | with~2x
marketing and digital spend
|
| Extend the measurement or performance period for PSUs. | | | | | | | | The FY 2022 PSUs for our named executive officers are tied to attainment of financial targets measured over a three-year performance period ending on March 31, 2024 and vest, subject to continued service and solely to the extent earned, upon the Compensation Committee’s certification of our achievement of the targets following the three-year performance period. | | |
Compensation Philosophy, Objectives, and Design
|
| | | | | | |
| | | | | |
| 4.8Attract and Retain Talent %
market share (3)
| +50
basis points
| e.l.f. Cosmetics grew
the mostmarket share
of the top five
color cosmetics brands
| | #Align with Stockholders4
favorite teen brand (4)
| |
| | Pay-for-Performance |
Attract, motivate, and retain highly talented and experienced executive officers who drive our success. | | Align our executive officers’ incentives with the long-term interests of our stockholders. | | |
Reward our executive officers for their performance and motivate them to achieve our short- and long-term and strategic and financial goals. |
| | |
| | |
(1) | See Annex A for a reconciliation of net sales (including the contribution from e.l.f. retail stores) to net sales (excluding the contribution from e.l.f. retail stores). |
(2) | See Annex A for a reconciliation of net income to Adjusted EBITDA. |
(3) | According to Nielsen xAOC 52 weeks ending March 21, 2020. |
(4) | According to the Piper Sandler 39th Semi-Annual Taking Stock With Teens® Survey, Spring 2020. Up from #6 a year ago. |
We reversed declining sales trends at the end of 2018 and achieved $64 million in net sales in 2019T, which represented 3% year-over-year growth (excluding the contribution from e.l.f. retail stores). Our disciplined execution fueled a 11% year-over-year net sales growth in FY 2020 (excluding the contribution from e.l.f. retail stores) that greatly outpaced the category, which declined in tracked channels in FY 2020 according to Nielsen.
We increased investment againstdesign our strategic imperatives in FY 2020 (including nearly doubling our marketing investment from the prior year) and delivered $17.9 million of net income and $62.6 million of Adjusted EBITDA in FY 2020.
We successfully navigated a 25% tariff being implemented on the majority of our products and increased gross margin in FY 2020 by 300 basis points compared to the prior year.
We reasserted our multiple areas of competitive advantage, which resulted in e.l.f. Cosmetics growing market share by 50 basis points during FY 2020 according to Nielsen. We entered COVID-19 headwinds with strengths relative to the category and expect to continue to take market share.
strengthening corporate governance
We have continued to strengthen our corporate governance. We appointed Beth Pritchard as our Lead Independent Director in February 2019. We also refreshed the membership of our Board committees twice in 2019T and FY 2020, leveraging the experience sets of our directors.
Additionally, although we are an emerging growth company and are not required by applicable rules to hold a “say-on-pay” vote until March 31, 2022 (unless we meet certain thresholds earlier), we have included at the 2020 annual meeting a say-on-pay vote with respect to compensation paid to our named executive officers for 2019T and FY 2020. We are also asking stockholders to vote for holding our say-on-pay vote annually. We value ongoing stockholder input, which an annual say-on-pay vote will enable.
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| | | | | | | | | |
intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
executing on strategic extensions
We completed the acquisition of W3LL PEOPLE in FY 2020, which was strategically important as clean is one of the fastest growing segments within beauty. We also incubated a new brand expected to launch in FY 2021. Both are key milestones as we evolve from a single brand to multi-brand beauty company.
continued progress against strategic imperatives
2019T and FY 2020 compensation highlights
|
| | | | | | |
| | | | | | |
Substantial reduction
in target total direct compensation.
| | No increase in
base salaries or annual cash incentive targets.
| | FY 2020 cash incentive compensation tied solely to profitability.
| | Vast majority of
compensation is variable, at-risk, and in equity.
|
| | | | | | |
Our executive compensation program is designed to directly tie our executive officers’ compensation with the performance of the Company and align the interests of our executive officers with the interests of our stockholders. Highlights of our compensation-related decisions in 2019T and FY 2020 include:
maintaining base salaries and annual cash incentive opportunities for our named executive officers—we have never changed the base salaries or annual cash incentive opportunities for our named executive officers, which for Mr. Amin, Mr. Baruch, and Mr. Milsten remain the same as 2014;
continuing to have our annual cash incentive compensation tied solely to the Company’s profitability;
continuing to provide the majority of our named executive officers’ compensation in the form of equity to instill an ownership culture, align the interests of our named executive officers with the interests of our stockholders, and support long-term retention;
substantially reducing the targeted value of equity awards made in 2019T to our then-serving named executive officers as compared to the targeted value of equity awards made in 2018, includingbased on a 30% reduction for Mr. Amin; and
granting 50% of Mr. Amin’s equity compensation in the form of performance-based restricted stock (with stock price hurdles of 151%, 189%, and 226% of the stock price on grant date)to even more closely align his compensation with the Company’s strong pay-for-performance culture and focus on the delivery of substantial and sustainable value to stockholders.
The compensation for our named executive officers for 2019T and FY 2020 is discussed in more detail in the sections of the CD&A that follow.
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| | | | | | | | | |
intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
named executive officers
Our named executive officers for FY 2020 were as follows:
|
| | | |
name | position |
Tarang Amin | Chairman, Chief Executive Officer, President, and Director |
Rich Baruch | Senior Vice President and Chief Commercial Officer |
Mandy Fields | Senior Vice President and Chief Financial Officer |
Josh Franks | Senior Vice President, Operations |
Scott Milsten | Senior Vice President, General Counsel, Chief People Officer, and Corporate Secretary |
Ms. Fields was appointed our Senior Vice President and Chief Financial Officer effective April 22, 2019. Mr. Franks was appointed our Senior Vice President, Operations effective January 2, 2020.
For biographical information regarding our named executive officers, see under the heading “our company”.compensation philosophy, objectives, and design
We have a pay-for-performance culture. philosophy. We believe our executive officers should be rewarded when the Company achieves itswe achieve our short-term and long-term strategic and financial goals, since these accomplishments reward our stockholders by generating better stock price returns. | | | | |
2022 Proxy Statement | | 46 | |
|
Our executive compensation program is designed to achieve the following objectives:
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| Intro | | Board | | |
attract and retain talentCompany | | align with stockholdersExec. Comp. | | pay-for-performance |
Attract, motivate, and retain highly talented and experienced executive officers who drive our success.Equity Plans | | Align our executive officers’ incentives with the long-term interests of our stockholders.Stockholders | | Reward our executive officers for their performance and motivate them to achieve the Company’s short- and long-term and financial strategic goals. |
| Audit | | Add’l. Info | | Q&A | | Annexes |
We achieve our compensation objectives through an executive compensation program that:
provides a competitive total pay opportunity that enables us to compete effectively for executive talent with large legacy consumer products, retail, and beauty companies, as well as with high growth technology and digital companies in the San Francisco Bay Area;Area and New York City;
emphasizes pay-for-performance by delivering a majority of our executive officers’ paycompensation only upon the achievement of our short-term and long-term strategic and financial goals, which are designed to deliver responsible and sustainable stockholder value growth; and
provides strong alignment with our stockholders, with a significant majority of the target compensation opportunity for our executive officers delivered in the form of equity awards.
The Compensation Committee is also committed to effective compensation governance. Below is a summary of our key compensation governance practices, which are designed to drive performance, mitigate undue risk, and align the interests of our executive officers and other employees with the interests of our stockholders:
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| | 47 | | 2022 Proxy Statement |
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| | | | | | | | | |
intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
Below is a summary of our key compensation governance practices:
|
| | | | | | | | |
| üIntro | | Board | | û | |
| what we doCompany | | Exec. Comp. | | what we don’t do | |
| Equity Plans | | Stockholders | | Audit | | Add’l. Info | | |
| ü | We believe in Q&Apay-for-performance. The majority of our executive officers’ pay is variable and at-risk, with the amount realized dependent upon the achievement of our short-and long-term objectives.
| | | | û | We don’t guarantee annual salary increases or minimum cash bonuses. | |
| | | | | | | |
| | | | | û | We don’t modify our performance targets during the performance period. | |
| | | | | | | | |
| ü | We provide a compensation mix Annexesheavily weighted towards equity to align the interests of our executive officers with the interests of our stockholders.
| | | | û | We don’t have pension plans or executive-only benefit or retirement plans. | |
| | | | | | | |
| | | | | û | We don’t provide excise tax gross ups. | |
| | | | | | | | |
| ü | Our annual cash incentives are based solely on financial performance.
| | | | û | We don’t provide excessive perquisites to our executive officers. | |
| | | | | | | | |
| ü | We engage an independent compensation consultant to advise the Compensation Committee, which is comprised solely of independent and experienced directors.
| | | | | | |
| | | | | | | | |
compensation setting process
rolesCompensation Setting ProcessRoles and responsibilities
ResponsibilitiesThe Compensation Committee has primary responsibility for reviewing and approving our overall compensation program, including reviewing and approving the form and amount of compensation to be paid or awarded to our executive officers, approving employment agreements with our executive officers, and performing a risk assessment of our compensation program in order to strike the appropriate balance of risk and reward without encouraging excessive or inappropriate risks that would have an adverse impact on stockholders. The Compensation Committee, management, and our independent compensation consultants work closely in managing our executive compensation program. A summary of each of their roles and responsibilities (and other relevant information) is summarized below:
|
| | |
role | | responsibilities and other relevant information |
Compensation Committee | • | Reviews and approves individual executive compensation decisions, including compensation for each of our executive officers (including our Chief Executive Officer), and new hire packages and employment agreements for new executive officers. |
| | |
| • | Evaluates and manages our executive compensation philosophy and programs, overseeing decisions regarding specific equity-based compensation plans, programs, and grants. |
| | |
| • | Reviews, at least annually, the selection of companies in our peer group to determine the competitiveness of executive officer and non-employee director compensation programs. |
| | |
|
| | | | | | | | | |
intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
|
| | |
role | responsibilities and other relevant information |
| • | Conducts annual reviews and approves (or, if applicable, makes recommendations to our board of directors regarding the adoption and approval of) our cash-based and equity-based incentive compensation plans and arrangements for our executive officers and non-employee directors. |
| | |
| | |
| Management | | Chief Executive Officer |
| | |
| • | Reviews and makes recommendations regarding the salary, short-term incentive compensation targets, and other compensation for our executive officers (other than himself). |
| | |
| Chief People Officer |
| | |
| • | Assists the Compensation Committee in fulfilling its responsibilities by providing advice on compensation best practices, information regarding attrition and retention at the Company,e.l.f. Beauty, as well as information regarding employee sentiment on such matters and employee engagement. |
Compensation consultants | | |
| | |
Compensation consultants | • | The Compensation Committee has engaged Radford, an independent compensation consulting firm,consultant and a part of the Rewards Solutions practice at Aon plc, to advise the Compensation Committee with respect to our overall executive compensation programs, including, among other matters, market comparisons, long-term incentive programs, targeted mix of compensation components, and characteristics of equity awards. Radford has been engaged by the Compensation Committee every year since our initial public offering in 2016. |
| | | | |
2022 Proxy Statement | | 48 | |
|
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| • | | | | | | | | |
| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
| | |
role | | responsibilities and other relevant information |
| | Radford reports directly to the Compensation Committee and does not provide any non-compensation related services to the Company.e.l.f. Beauty. |
| | |
| • | Based on an assessment of the six independence factors established by the SEC, the Compensation Committee determined that the engagement of Radford does not raise any conflicts of interest or similar concerns. |
| | |
| • | In addition, the Compensation Committee evaluated the independence of its other outside advisers, including outside legal counsel, considering the same independence factors and concluded their work for the Compensation Committee does not raise any conflicts of interest. |
peer group
Peer Group
To assess the competitiveness of our executive compensation program, the Compensation Committee considers the compensation practices of peer companies reasonably similar to the Companye.l.f. Beauty on the basis of, among other things, industry, consumer focus, revenue, market cap, and geography. The Compensation Committee periodically reviews and approves changes to the peer group based on the recommendation of its independent compensation consultant. As part of the Compensation Committee’s periodic review of our compensation peer group, the Compensation Committee, with assistance from Radford, approved the following peer group in December 2018. The Compensation Committee used this peer group infor setting executive compensation for 2019T and FY 2020.
2022: |
| | | | | |
FY 2022 peer group* |
CarParts.com(1) | 43 | 2020Lifetime Brands | | Shake Shack | | Tilly’s |
Chuy’s | | Movado Group | | Shutterstock | | ZAGG |
Clarus | | PetMed Express | | The Habit Restaurants | | |
Duluth | | Planet Fitness | | The Lovesac Company(1) | | |
Etsy | | Ruth’s Hospitality Group | | The Simply Good Foods Company | | |
| (1) | Added to the peer group in FY 2022. |
| * | Stamps.com was removed from the peer group as the company was acquired. Benefitfocus was removed from the peer group as the company fell outside one or more of the approved selection criteria and as a healthcare software company was less comparable from a business perspective. |
Compensation Program Components
| | | | |
| | | | |
| Base Salary | | Annual Cash Incentive | | Long-Term Incentive |
| Cash | | Cash | | Equity |
| Fixed | | Variable/At-risk | | Variable/At-risk |
Provides a stable level of pay to attract and retain talent | | Rewards achievement of our annual financial goals | | Rewards creation of long-term stockholder value |
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| | 49 | | 2022 Proxy Statement |
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
|
| | | |
2019T and FY 2020 peer group |
Benefitfocus | Lifetime Brands | Planet Fitness | The Habit Restaurants |
Chuy’s | Movado Group | Ruth's Hospitality Group | Tilly’s |
Etsy | Natural Health Trends | Shake Shack | WageWorks |
Clarus | Nautilus | Shutterstock | ZAGG |
Duluth | Nutrisystem | Stamps.comIntro | |
compensation program components
We have three primary elements of our compensation plan: base salary, annual cash incentive compensation, and long-term incentive compensation.
|
| Board | | Company | |
compensation type | formExec. Comp. | characteristic | link to strategy |
Base salaryEquity Plans | Cash | FixedStockholders | Provides a fixed level of pay to attract and retain talented executive officers. |
Annual cash incentive | CashAudit | Variable/At-risk | Rewards achievement of the Company’s annual financial goals. |
Long-term incentiveAdd’l. Info | Equity | Variable/At-riskQ&A | Rewards creation of long-term stockholder value. | Annexes |
targeted compensation mix
Targeted Compensation Mix
The targeted mix of our three primary compensation elements
(base salary, annual cash incentive, and the targeted value of long-term incentives)(1) for FY 20202022 for our Chief Executive Officer and our other named executive officers (other than Ms. Fields and Mr. Franks) (2)are as follows:majority of compensation is tied to long-term stockholder value and is variable and at-risk
|
| | |
| | |
| (1) | Comprised of base salary (at the annual rate in effect) for FY 2020,2022, target annual cash incentive for FY 2020,2022, and the targeted value of the equity awards granted to Mr. Amin, Mr. Baruch, and Mr. Milsten in 2019T. |
(2) | Excludes Ms. Fields and Mr. Franks as each commenced employment with the Company in FY 2020 and received new-hire equity awards, which, at the Company and many other companies, tend to be larger than the targeted value of annual equity awards.2022. |
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
base salaries
The Company providesBase Salaries
We provide base salaries as a fixed source of compensation for our executive officers, allowing them a degree of certainty with respect to their day-to-day compensation. The Compensation Committee recognizes the importance of base salaries as an element of compensation that helps to attract and retain highly qualified executive talent. The relative levels of base salary for each executive officer is designed to reflect that executive officer’s scope of responsibility and accountability to us, as well as our desire to maintain relative internal parity among our executive officers. The Compensation Committee reviews the base salaries of our executive officers periodically.
on an annual basis, but has never made an adjustment.FY 2022 Base Salaries
The base salariessalary for Mr. Amin Mr. Baruch, and Mr. Milsten havehas not been increased in over sixeight years and remains the same as the base salary set forth in his new hire offer in 2014. The base salaries for Ms. Fields, Ms. Marchisotto, and Mr. Franks remain the same as the base salaries set forth in their respective new hire offers in 2014. This2019 and 2020. Mr. Baruch’s base salary had also not been increased for over eight years prior to his departure.
The decision to keep base salaries at the same level as provided at the time of hire was made based on our philosophy of delivering the majority of compensation opportunity through long-term equity compensation. The base salaries of Ms. Fields and Mr. Franks were set in connection with their commencement of employment during FY 2020, were based on arms’ length negotiations, and were consistent with the base salariesequity-based compensation designed to deliver value to our executive officers only when our performance creates value for the Company’s other executive officers.our stockholders.
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2022 Proxy Statement | | 50 | |
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
The annual base salaries for FY 20202022 for our named executive officers were as follows:
|
| | | | | |
| FY 2020 annual base salaries |
| | |
| name | base salary (1) |
|
| Tarang Amin | $ | 475,000 |
|
| Rich Baruch | $ | 325,000 |
|
| Mandy Fields | $ | 350,000 |
|
| Josh Franks | $ | 325,000 |
|
| Scott Milsten | $ | 325,000 |
|
| | | | |
| | | | |
| (1) | The base salaries for our named executive officers (other than Ms. Fields and Mr. Franks) for 2019T were, on an annualized basis, the same as their respective base salaries for FY 2020. |
annual cash incentive compensation
The Company provides | | | | |
| FY 2022 Annual Base Salaries | | | |
Name | | base salary | |
Tarang Amin | | $ | 475,000 | |
Mandy Fields | | $ | 350,000 | |
Josh Franks | | $ | 325,000 | |
Kory Marchisotto | | $ | 325,000 | |
Rich Baruch | | $ | 325,000 | |
Annual Cash Incentive Compensation
We provide annual cash incentive compensation to motivate our executive officers to achieve our financial and strategic goals. Annual cash incentive compensation is based on predetermined financial measures that are chosen by the Compensation Committee at the beginning of the fiscal year and that are aligned with the Company’sour annual growth objectives as well as itsour long-term business plan. The financial measure performance goals for our annual cash incentive compensation are designed to be challenging.
We believe that annual cash incentive compensation:
holds our executive officers accountable;
aligns the interests of our executive officers, the Company,e.l.f. Beauty, and our stockholders;
enables us to focus on achieving and exceeding financial goals that drive stockholder value creation;
recognizes and rewards individuals for contributing to our success;
attracts and retains the top talent in the industry; and
recognizes and rewards individuals for contributing to the Company’s success.holds our executive officers accountable.
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
The annual cash incentive payout for each executive officer is determined based on a formula consisting of the executive officer’s base salary, target annual cash incentive opportunity (which is set atas a percentage of base salary by the Compensation Committee early in the applicable fiscal year), and a funding percentage of the annual cash incentive compensation pool based on theour performance by the Company with respect to predetermined financial measures chosen by the Compensation Committee. Individual performance has not been considered when determining annual cash incentive payouts for executive officers as the Company subscribeswe subscribe to a “one team” philosophy where all employees participate equally (subject to variations in target annual cash incentive opportunity) in the Company’sour successes and shortcomings.
The Compensation Committee reviews the target annual cash incentive opportunities of our executive officers on an annual basis.
The formula for determining the annual cash incentive payout for our executive officers is as follows:
|
| | | | | | | | |
| base
salary
| x | target
percentage
| x | funding
percentage
| = | annual cash incentive payout | |
The funding percentage of the annual cash incentive compensation pool is determined based on theour performance by the Company of the predetermined financial measures chosen by the Compensation Committee.
There is a threshold funding percentage of 80% (if the threshold performance goal is achieved) and a maximum funding percentage of 200% (if the maximum performance goal is achieved or exceeded), with funding percentages corresponding on a linear basis to performance between threshold and target levels and performance between target and
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| | 51 | | 2022 Proxy Statement |
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
maximum levels. If the threshold performance is not achieved, the funding percentage is set at 0% and no annual cash incentive compensation is paid.
|
| | | | | | |
| ç | performance by the company of predetermined financial measures | è |
ß below threshold | threshold goal achieved | ßà in between goals | target goal achieved | ßà in between goals | maximum goal achieved | à above maximum |
| | â | corresponds to a funding percentage of: | â | |
| | |
0% no funding | 80% | 81% to 99% on a linear basis | 100% | 101% to 199% on a linear basis | 200% | 200% maximum cap |
| ç | funding percentage of the annual cash incentive compensation pool | è |
The target annual cash incentive opportunity for Mr. Amin has not been increased in over eight years and remains the same as the annual cash incentive opportunity in his new hire offer in 2014. The target annual cash incentive opportunities for Mr. Amin, Mr. Baruch,Ms. Fields, Ms. Marchisotto, and Mr. Milsten have not been increased in over six years andFranks remain the same as the annual cash incentive targets set forthopportunities in their respective new hire offers in 2014.2019 and 2020. Mr. Baruch’s annual cash incentive opportunity had also not been increased for over eight years prior to his departure. Similar to the decision to keep base salaries consistent, no changes were made to the annual cash incentive targetsopportunities for FY 20202022 based on our philosophy of delivering the majority of compensation opportunity through long-term equity compensation. The target annual cash incentive opportunities for Ms. Fields and Mr. Franks were set in connection with their commencement of employment during FY 2020, were based on arms’ length negotiations, and were consistent with the annual cash incentive targets of the Company’s other executive officers.
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
The target annual cash incentive opportunities for FY 20202022 for our named executive officers were as follows:
|
| | | | | | | | |
| FY 2020 target annual cash incentive opportunities |
| | | | |
name | target
(% of salary) |
| | target value (1) |
|
| Tarang Amin | 100 | % | | $ | 475,000 |
|
| Rich Baruch | 40 | % | | $ | 130,000 |
|
| Mandy Fields | 50 | % | | $ | 175,000 |
|
| Josh Franks | 40 | % | | $ | 32,055 |
|
| Scott Milsten | 40 | % | | $ | 130,000 |
|
| | | | | | |
| | | | | | |
| (1) | Mr. Franks’ target value was pro-rated for the actual number of days Mr. Franks was employed in FY 2020. Ms. Fields’ target value was not pro-rated as she commenced employment with the Company in April 2020, the first month of FY 2020. |
2019T cash incentive compensation
The | | | | | | | | |
| FY 2022 Target Annual Cash Incentive Opportunities | |
Name | | target (% of
salary) | | | target value | |
Tarang Amin | | | 100 | % | | $ | 475,000 | |
Mandy Fields | | | 50 | % | | $ | 175,000 | |
Josh Franks | | | 40 | % | | $ | 130,000 | |
Kory Marchisotto | | | 40 | % | | $ | 130,000 | |
Rich Baruch | | | 40 | % | | $ | 130,000 | |
FY 2022 Annual Cash Incentive Compensation Committee decided to award cash incentive payouts for 2019T to provide appropriate retention and incentives in the transition period. The Compensation Committee considered in particular that, absent any short-term incentive compensation opportunity for 2019T, employees would otherwise have to wait 15 months between the 2018
In each year since going public, our annual cash incentive payments that were made in February 2019 and FY 2020 annual cash incentive payments (if any) that would be paid in May 2020. The Compensation Committee did not elect to put in a formal cash incentive compensation program for 2019T as it only consisted of 90 days, and instead decided to evaluate short-termhas been measured by our Adjusted EBITDA performance against pre-established targets. When we have performed well against the targets, our executive officers have been rewarded with annual cash incentive compensation for 2019T on a discretionary basis based on the Company’s overall financial performance during the period.
The Company reversed declining sales trends at the end of 2018 and achieved $64 million in net sales in 2019T, which represented 3% year-over-year growth (excluding the contribution from e.l.f. retail stores). The Company’s net sales out-performance in 2019T was 12% above the consensus estimate of $57 million. The Company also achieved $13 million in Adjusted EBITDA in 2019T, which was 62% above the consensus estimate of $8 million. Based on the out-performance, the Compensation Committee determined that cash incentive compensation payouts at 200% of target (on a pro-rated basis) would have been appropriate.
In order to additionally incentivize performance over the entirety of FY 2020, however, the Compensation Committee decided to create a cash incentive pool equivalentup to 200% of target, (pro-rated for the length of 2019T), half of which would be paid out for 2019T, and the other half of which would only be eligible to be earned based on performance over the entirety of FY 2020 as measuredwhen we have under-performed against the predetermined financial goals applicable to the FY 2020 annual cash incentive plan. As such, our employees (including our executive officers) who were employed during 2019T were awarded cash incentive payouts in an amount equal to 100% of annual cash incentive targets pro-rated for the length of 2019T.
With respect to the remaining cash incentive pool, as an example, if the Company achieved a 90% funding percentage under the FY 2020 annual cash incentive plan, eligible employees would receive an additional payout of 90% of the 2019T cash incentive amount. In arriving at its decision, the Compensation Committee sought to balance fairness to employees (including our executive officers), who under our historic annual cash incentive plans have had the opportunity to earn annual cash incentives up to 200%, with driving financial success over the entirety of FY 2020.
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
The 2019T cash incentive payouts for our named executive officers who were employed during 2019T were as follows:
|
| | | | | | | | | | | | |
| 2019T cash incentive payouts |
| | | | | | |
name | target value (1) |
| | actual payout
(% of target) |
| | actual payout |
|
| Tarang Amin | $ | 117,124 |
| | 100 | % | | $ | 117,124 |
|
| Rich Baruch | $ | 32,055 |
| | 100 | % | | $ | 32,055 |
|
| Scott Milsten | $ | 32,055 |
| | 100 | % | | $ | 32,055 |
|
| | | | | | | | |
| | | | | | | | |
| (1) | Represents 100% of annual cash incentive compensation target, pro-rated for the length of 2019T (which was 90 days). |
FY 2020 annual cash incentive compensation
Consistent with our pay-for-performance culture, the Compensation Committee based FY 2020fiscal year ended December 31, 2018), no annual cash incentive compensation on predeterminedhas been paid. For FY 2022, the Compensation Committee again chose Adjusted EBITDA goals for FY 2020, which were tied to the Company’s Board-approved budget for FY 2020. The Compensation Committee chose Adjusted EBITDAas our annual cash incentive compensation program performance metric because it is a key measure the Company useswe use to understand and evaluate itsour operational performance and because the Compensation Committee believes Adjusted EBITDA is an important driver of the price of the Company’sour common stock, which aligns compensation for our executive compensationofficers with maximization ofmaximizing stockholder value.
The FY 2020Compensation Committee set the Adjusted EBITDA goals for annual cash incentive compensation poolin connection with the Board-approved full year FY 2022 budget, which was self-funded, meaning thatadopted at the Company’sbeginning of the fiscal year. Specifically, the Compensation Committee set the Adjusted EBITDA performancebonus goals in FY 2020 needed to be sufficient to generate profit to payMay 2021 and, once set, the goals were not altered or changed in any way. The Compensation Committee has never altered or changed Adjusted EBITDA goals for annual cash incentive payoutscompensation.
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2022 Proxy Statement | | 52 | |
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
Based on the Company’s expected business momentum in FY 2022, the Adjusted EBITDA threshold, target, and maximum goals for our annual cash incentive program (as presented in the chart below) were all higher than our actual Adjusted EBITDA result of $61.1 million in FY 2021. Given the requirement to deliver absolute year-over-year growth to achieve any payout, combined with the prospect of continued disruptions from COVID-19 in consumer behavior and global supply chain challenges, the Compensation Committee believed that the Adjusted EBITDA goals were challenging and rigorous and were aligned with our objectives for FY 2020 and to generate profit for the Company and its stockholders.
2022. The Adjusted EBITDA goals and the corresponding funding percentages for the FY 20202022 annual cash incentive compensation pool were as follows:
|
| | | | | | | |
Adjusted EBITDA goalsGoals for FY 2020 annual cash incentive compensation |
| | |
| adj. EBITDA (1)
| funding percentage (2)
|
|
threshold | $45.8 million | 80 | % |
target | $49.0 million | 100 | % |
maximum | $52.6 million | 200 | % |
| | | 2022 Annual Cash Incentive Compensation | |
| | | adj. EBITDA (1) | | | funding
percentage (2) | |
Threshold | | $ | 64.4 million | | | | 80% | |
Target | | $ | 68.3 million | | | | 100% | |
Maximum | | $ | 72.8 million | | | | 200% | |
| (1) | After funding of the annual cash incentive compensation pool. See Annex A for a reconciliation of net income to Adjusted EBITDA. |
| (2) | The funding percentages correspond, on a linear basis, to performance between threshold and target levels and performance between target and maximum levels. |
The Compensation Committee deliberately setConsistent with past practice, the FY 2022 annual cash incentive compensation pool was self-funded, meaning that our Adjusted EBITDA threshold, target, and maximum goalsperformance in FY 2022 needed to be sufficient to generate profit to pay the annual cash incentive payouts for FY 2020 lower than actual Adjusted EBITDA result in 20182022 and to accountgenerate profit for the Company’s substantial planned investments in FY 2020 againste.l.f. Beauty and its strategic imperatives and the expectation that it would take time to realize the benefits of these investments in a soft and highly competitive mass color cosmetics category. Most significantly, in connection with the e.l.f. Cosmetics brand recharge, the Company planned to increase its marketing and digital investments to 12-14% of net sales in FY 2020 (up from approximately 7% of net sales in the prior year). The Adjusted EBITDA target goal was set at $49.0 million, above the high-end of the Company’s initial Adjusted EBITDA guidance for FY 2020 (which reflected the assumptions discussed above) of $45-48 million. The Compensation Committee believed that the selected Adjusted EBITDA goals were challenging and rigorous and were aligned with the Company’s growth objectives for FY 2020 as well as its long-term business plan.
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
The Companystockholders.We achieved $62.6$74.7 million in Adjusted EBITDA in FY 2020,2022, after funding of the annual cash incentive compensation pool. This Adjusted EBITDA performance was approximately 19% greater than the maximum performance goal for FY 20202022 and, as such, resulted in an overall funding percentage of 200%. In addition, in connection with the additional cash incentive pool created following the Compensation Committee’s evaluation of 2019T performance as discussed above, the Compensation Committee awarded eligible employees an additional 100% of their actual 2019T cash incentive payouts (equal to 25% of annual cash incentive targets) based on FY 2020 Adjusted EBITDA performance, resulting in eligible employees receiving the equivalent of 200% of annual cash incentive targets for the entire 15-month 2019T and FY 2020 period.
The annual cash incentive payouts for FY 20202022 for our named executive officers were as follows. All dollar amounts are rounded to the nearest whole dollar amount.
|
| | | | | | | | | | | | |
| FY 2020 annual cash incentive payouts—2019T additional pool |
| | | | | | |
name | target value (1) |
| | actual payout (% of target) (1) |
| | actual payout |
|
| Tarang Amin | $ | 117,124 |
| | 100 | % | | $ | 117,124 |
|
| Rich Baruch | $ | 32,055 |
| | 100 | % | | $ | 32,055 |
|
| Scott Milsten | $ | 32,055 |
| | 100 | % | | $ | 32,055 |
|
| | | | | | | | |
| | | | | | | | |
| (1) | Represents the portion for which eligibility was tied to employment in 2019T as discussed above. Percentage is equivalent to 25% of the annual cash incentive target on a pro-rated basis (based on the length of 2019T (90 days)). |
|
| | | | | | | | | | | | |
| FY 2020 annual cash incentive payouts—FY 2020 pool |
| | | | | | | | |
name | target value |
| | actual payout (% of target) |
| | actual payout |
|
| Tarang Amin | $ | 475,000 |
| | 200 | % | | $ | 950,000 |
|
| Rich Baruch | $ | 130,000 |
| | 200 | % | | $ | 260,000 |
|
| Mandy Fields | $ | 175,000 |
| | 200 | % | | $ | 350,000 |
|
| Josh Franks | $ | 32,055 |
| | 200 | % | | $ | 64,110 |
|
| Scott Milsten | $ | 130,000 |
| | 200 | % | | $ | 260,000 |
|
The sum of thefollows: | | | | | | | | | | | | |
FY 2022 Annual Cash Incentive Payouts | |
Name | | target value | | | actual payout
(% of target) | | | actual payout | |
Tarang Amin | | $ | 475,000 | | | | 200% | | | $ | 950,000 | |
Mandy Fields | | $ | 175,000 | | | | 200% | | | $ | 350,000 | |
Josh Franks | | $ | 130,000 | | | | 200% | | | $ | 260,000 | |
Kory Marchisotto | | $ | 130,000 | | | | 200% | | | $ | 260,000 | |
Rich Baruch | | $ | 130,000 | | | | 200% | | | $ | 260,000 | |
The annual cash incentive payouts for FY 2020 (including both the 2019T additional pool and the FY 2020 pool payouts)2022 are reported under the heading “non-equity“non-equity incentive plan comp.” in the
summary compensation tableSummary Compensation Table.The total sumIncrease in Target Annual Cash Incentive Compensation
In FY 2023, the Compensation Committee increased the target bonus opportunity as a percentage of the amounts reportedbase salary under the headings “bonus” and “non-equity incentive plan comp.” in the
summary compensation table for 2019T and FY 2020 represent a payout of 200% ofour annual cash incentive targets for the entirety of 2019T and FY 2020, pro-rated as appropriateprogram from 40% to 50% for each namedof our senior vice presidents (other than Ms. Fields who already had a 50% target). The Compensation Committee made this change following its review of target bonus opportunities provided to executives at our peer group of companies and to help maintain relative internal parity among our executive officer forofficers by bringing the lengthbonus opportunities of employment during that period.all senior vice presidents to 50% of their base salaries. | | | | |
| | 53 | | 2022 Proxy Statement |
long-term incentive compensation
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
Long-Term Incentive Compensation
A core principalprinciple of our executive compensation program is thatto deliver a significant percentage of total compensation awarded to our executive officers be in the form of long-term incentive compensation. ThisThe value realized from this compensation is dependent on theour financial success of the Company and the sustained performance of our common stock over the long-term. This means that our executive officers are rewarded when they produce value for our stockholders. We have designed our long-term incentive compensation to motivate our executive officers to work toward objectives that we believe provide a meaningful return to our stockholders while also serving as an effective recruitment and retention tool.
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
In determining the size of equity awards granted to any executive officer, the Compensation Committee considers a number of reference points, including:
our performance, of the Company, the executive officer’s contributions to that performance, as well as expectations for that executive officer’s future contributions to the Company’sour performance;
the competitive market compensation levels for the executive officer’s position;
the relative mix of cash and equity, and in particular the fact that cash compensation paid to our executive officers is generally low compared to the competitive market; and
internal parity among our executive officers.
Similar to many companies, the targeted value of our new-hire equity awards (the initial equity awards granted to executive officers upon commencement of employment) tends to be larger than the targeted value ofWe grant annual equity awards granted to our executive officers. These larger up-front equity awards are intended to serve as an inducement for an individual to accept the new offer of employment with the Company, to provide the individual with an immediate equity stake in the Company,(RSUs and if applicable, to compensate the individual for forfeited equity awards at his or her previous employer. Our new-hire equity awards for executive officers are comprised of both restricted stock and stock options, which provide value to our executive officers only if the Company’s stock price appreciates.
In order to enhance retention, the Company’s restricted stock and option awards typically vest over a four-year period, subject to continued service to the Company through each vesting date.
While the Company does not have a formal written policy with respect to timing of equity awards, the Company grants annual equity awards (restricted stock awards, performance-based awards, and option awards)PSUs) in a consistent manner to our executive officers. Since 2018,For the Company has consistentlylast three years, we have granted our annual equity awards to our executive officers on June 1, the first day of the month that immediately follows the release of our year-end financial results. The Compensation Committee has determined that this methodology is prudent in that it allows for the market to process all reported public information prior to establishing the value of annual equity awards for our executive officers. Going forward, the Company expectswe expect to continue this timing of annual equity awards to executive officers, with annual equity award grants for the fiscal 2022year ending March 31, 2024 to occur on June 1, 2021.
|
| | | |
annual equity award grant dates |
| | | |
year-end earnings release date | grant date |
February 27, 2018 | March 1, 2018 |
February 26, 2019 | March 1, 2019 |
May 21, 2020 | June 1, 2020 |
2019T and 2023.FY 2020 equity awards
For the calendar 2019 equity award cycle (shown in the 2019T row in the summary compensation table),2022 Equity AwardsBased on feedback from our stockholders, the Compensation Committee decidedexpanded the use and increased the weighting of PSUs in our executive officers’ annual equity grants to incorporate performance-based restricted stock awards (“PSAs”) into Mr. Amin’s equity compensation to even more closely align histheir compensation with the Company’sour strong pay-for-performance culture and focus on the delivery of substantial value to our stockholders.
For FY 2022, the Compensation Committee granted 50% of the equity awards granted to all of our named executive officers in the form of PSUs.The FY 2022 PSUs are tied to our achievement of net sales compound annual growth rate (CAGR) (weighted 60%) and Adjusted EBITDA CAGR (weighted 40%) targets measured over a three-year performance period ending on March 31, 2024, with a potential uplift in the event both goals are achieved at maximum and we achieve an additional target for Adjusted EBITDA margin expansion. The FY 2022 performance-based equity awards will vest in a single installment, subject to continued service and to the extent earned, upon the Compensation Committee’s certification of our achievement following the three-year performance period. We believe this three-year cliff vesting helps to retain our named executive officers through the completion of the performance period and incentivize long-term performance.
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20202022 Proxy Statement | 50 | 54 | |
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introIntro | board | companyBoard | exec. comp. | equity plansCompany | stockholders | auditExec. Comp. | add’l. info | q&aEquity Plans | annexes | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
Each PSU represents the right to receive up to 2 shares of our common stock upon vesting. The number of shares issuable upon vesting of each PSU is determined by our Compensation Committee split Mr. Amin’s equity award (based on total number of restricted shares granted) into two tranches, with 50% in time-based restricted stock awards and 50% in PSAs, which vest 18 months afterfirst assessing the achievement of certain stock price hurdles.
The Compensation Committee decidedeach of our net sales CAGR and Adjusted EBITDA CAGR goals and assigning an achievement factor in accordance with the table below. | | |
Achievement | | Achievement Factor |
Below Target | | 0 |
Target | | 1 |
150% of Target | | 1.25 |
200% of Target | | 1.5 |
250% of Target and higher | | 1.75 |
Each achievement factor is then multiplied by its respective weighting, 60% for net sales CAGR and 40% for Adjusted EBITDA CAGR, and the results are added together to use stock price hurdlesdetermine the number of shares issued per vested PSU. If both achievement factors equal 1.75, meaning both net sales CAGR and Adjusted EBITDA CAGR were achieved at 250% of target or higher, then the number of shares issuable can increase to 2 if a separate target for Adjusted EBITDA margin expansion is achieved. Adjusted EBITDA margin expansion is defined as the performance metricpercentage increase for Mr. Amin’s 2019T PSAs given the challenges of setting long-term performance targets for operational or financial metrics in light of our relatively recent history as a public company and the growing and evolving nature of our business at that time. The Compensation Committee selected stock price hurdles that it believed to be challenging and which would reflect the delivery of significant value to our stockholders.
To ensure that the appreciation was sustained, the Compensation Committee required that the average closing stock price equal or exceed the applicable hurdle for a period of
20 consecutive trading days. Additionally, the
Compensation Committee implemented an additionalCompany’s Adjusted EBITDA divided by net sales.In order to enhance retention, our time-based RSU awards, including for the FY 2022 RSUs, vest in equal annual installments over a four-year period, subject to continued service through each vesting period of 18 months after the applicable stock price hurdle is achieved. During this 18-month vesting period, the value of the 2019T PSAs will continue to fluctuate with the stock price, providing further incentive to sustain stockholder value created upon the achievement of the relevant stock price hurdle.
Below is a summary of Mr. Amin’s 2019T PSAs:
|
| | | | | | |
| Mr. Amin’s 2019T PSAs |
| | | | | | |
| number of PSAs | stock price hurdle (1) | stock price hurdle as a percentage of stock price on the grant date (2) |
| time-based vesting period |
| 80,710 | $12.00 | 151 | % | 18 months after stock hurdle is met |
| 80,710 | $15.00 | 189 | % | 18 months after stock hurdle is met |
| 80,710 | $18.00 | 226 | % | 18 months after stock hurdle is met |
| | | | | | |
| | | | | | |
| (1) | Met if the average closing price per share of the Company’s common stock equals or exceeds the stock price hurdle for a period of 20 trading days. |
| (2) | The closing price of our common stock on March 1, 2019 was $7.95 per share (as reported on the NYSE). |
Due to dilution concerns and the Compensation Committee’s decision to substantially reduce the aggregate targeted value of the equity awards, the Compensation Committee decided to grant only restricted stock awards in 2019T to our executive officers other than our Chief Executive Officer. No equity awards, other than new-hire equity awards for Ms. Fields and Mr. Franks, were granted to our named executive officers in FY 2020.
date.Below is a summary of the equity awards granted to our named executive officers in 2019T and FY 2020:
|
| | | | | | | | | | |
| 2019T and FY 2020 equity awards |
| | | | | | | |
| name | type of award | shares | | grant date fair value (1) |
| | vesting terms |
| Tarang Amin | Annual PSA | 80,710 | | $ | 602,904 |
| | $12 hurdle plus 18 months service-based vesting after hurdle is met |
| | Annual PSA | 80,710 | | $ | 573,041 |
| | $15 hurdle plus 18 months service-based vesting after hurdle is met |
| | Annual PSA | 80,710 | | $ | 549,635 |
| | $18 hurdle plus 18 months service-based vesting after hurdle is met |
| | Annual restricted stock | 242,130 | | $ | 1,924,934 |
| | Four-year service-based vesting |
| Rich Baruch | Annual restricted stock | 93,390 | | $ | 742,451 |
| | Four-year service-based vesting |
| Mandy Fields | New-hire stock option | 83,760 | | $ | 402,643 |
| | Four-year service-based vesting |
| | New-hire restricted stock | 130,930 | | $ | 1,599,965 |
| | Four-year service-based vesting |
| Josh Franks | New-hire stock option | 58,800 | | $ | 349,895 |
| | Four-year service-based vesting |
| | New-hire restricted stock | 63,700 | | $ | 1,000,090 |
| | Four-year service-based vesting |
| Scott Milsten | Annual restricted stock | 138,360 | | $ | 1,099,962 |
| | Four-year service-based vesting |
|
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
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| | | | | | | | | | |
FY 2022 Equity Awards | |
Name | | type of award | | | Target PSUs | | | | grant date
fair value (1) | |
Tarang Amin | |
| PSUs
RSUs |
| |
| 68,910
68,910 |
| | $
$ | 1,899,849
1,899,849 |
|
Mandy Fields | |
| PSUs
RSUs |
| |
| 27,200
27,200 |
| | $
$ | 749,904
749,904 |
|
Josh Franks | |
| PSUs
RSUs |
| |
| 27,200
27,200 |
| | $
$ | 749,904
749,904 |
|
Kory Marchisotto | |
| PSUs
RSUs |
| |
| 27,200
27,200 |
| | $
$ | 749,904
749,904 |
|
Rich Baruch | |
| PSUs
RSUs |
| |
| 27,200
27,200 |
| | $
$ | 749,904
749,904 |
|
| (1) | Represents the grant date fair value of the applicable equity awards granted to the named executive officer, calculated in accordance with FASB ASC Topic 718 for stock-based compensation transactions, disregarding the effects of estimated forfeitures. For a discussion of the valuation of these equity awards, see Notes to Consolidated Financial Statements at Note 14 in the 20202022 Annual Report. These amounts do not reflect the amount the named executive officer has actually realized or will realize from the equity awards upon the vesting thereof or the sale of the shares underlying such equity awards. |
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a three-year performance period. In addition, based on stockholder feedback received by our Compensation Committee during our outreach calls earlier in 2022, we ”.re-introduced
market share gain as a performance metric.
other compensation information
employment agreements
In early 2019, we amended and restated the employment agreements for Mr. Amin, Mr. Baruch, and Mr. Milsten. The termOther Compensation InformationEmployment Agreements
Each of each of the prior employment agreements expired on January 31, 2019.
We entered intoour executive officers has an employment agreement with Ms. Fields upon her hiring and an employment agreement with Mr. Franks upon his hiring.
The employment agreements for our executive officers setwhich sets forth the terms and conditions of employment of that executive officer, including, among other things, base salary, target annual cash incentive compensation opportunity, standard employee benefit plan participation, as well as
non-solicitation and confidentiality covenants.
Each employment agreement provides that the executive officer is an “at-will”“at-will” employee and may be terminated at any time for any reason, subject, in certain cases, to the payment of severance benefits. For a summary of the material terms and conditions of the severance and change in control arrangements in effect as of March 31, 2022 for our named executive officers, see under the heading “Executive Compensation Tables-Potential Payments upon Termination or Change in Control”.
Executive Stock Ownership Policy
Our Board adopted an executive stock ownership policy in FY 2021 for our executive officers to encourage them to have a long-term equity stake in e.l.f. Beauty, align their interests with stockholders, and mitigate potential compensation-related risk. The policy provides that each executive officer must hold a multiple of that executive officer’s annual base salary in our common stock as follows:
| | |
Position | | ownership
requirement
(multiple of
base salary) |
Chief Executive Officer | | 6x |
Other executive officers | | 3x |
Each of our named executive officers has until March 31, 2026 to achieve the minimum ownership requirement. Any new or promoted executive officer has until March 31 of the fiscal year in which the fifth anniversary of that executive officer’s start date or promotion date falls to achieve the minimum ownership requirement.
In the event that an executive officer has not satisfied the minimum ownership requirement by the compliance deadline, all shares acquired pursuant to equity awards granted to that executive officer (net of taxes and exercise costs) must be held by that executive officer until (and so long as) the minimum ownership requirement is satisfied.
In addition to shares held outright, shares underlying vested stock options (net of shares that would need to be withheld to satisfy the exercise price thereof and withholding taxes) are counted towards the minimum ownership requirement.
Compensation Recovery Policy
Our Board adopted a compensation recovery (“clawback”) policy in FY 2021 to maintain a culture of focused, diligent and responsible management that discourages conduct detrimental to our growth.
Our “clawback” policy allows our Board discretion to seek reimbursement with respect to incentive compensation paid or awarded to covered employees, including executive officers and other key employees subjected to the policy by our Board, upon certain events, including a material misstatement of financial calculations or information that would have significantly reduced the amount of incentive compensation or a covered employee’s fraudulent, willful or negligent misconduct that results in material noncompliance with financial reporting rules requiring an accounting restatement.
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
Anti-Hedging/Anti-Pledging Policy
Our Insider Trading Compliance Policy prohibits our employees, executive officers, and directors from engaging in the following transactions:
purchasing our securities on margin or holding our securities in a margin account;
pledging our securities as collateral to secure loans;
engaging in transactions in puts, calls or other derivative securities involving our securities; or
entering into hedging or monetization transactions or similar arrangements (including short sales) with respect to our securities.
Retirement Plans
We maintain a 401(k) retirement savings plan for the benefit of our employees, including our executive officers, who satisfy certain eligibility requirements. Under the 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Internal Revenue Code, on a pre-tax or after-tax (i.e., Roth) basis through contributions to the 401(k) plan. We also generally make matching contributions based on the percentage of each employee’s elective deferrals, subject to a pre-determined maximum. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package. See the “all other compensation” column in the summary compensation tableSummary Compensation Table for information relating to 401(k) plan matching contributions made to our named executive officers in 2019TFY 2022.
Employee Benefits and FY 2020.
employee benefits and perquisites
PerquisitesAll of our full-time employees (including our executive officers) are eligible to participate in our health and welfare plans, including medical, dental and vision benefits, medical flexible spending accounts, short-term and long-term disability insurance and life insurance.
In addition, pursuant to his employment agreement, we offer Mr. Amin reimbursement of up to $20,000 per year for expenses incurred by him in connection with financial planning and tax preparation assistance. Except as noted above with
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
respect to Mr. Amin, we do not provide our executive officers with perquisites or other personal benefits other than those which apply uniformly to all of our employees.
post-employment compensation
Post-Employment Compensation
In hiring our current executive officers, we sought to develop compensation packages that could attract qualified candidates to fill our most critical positions, which required providing some protection in the event of an involuntary termination. In general, our executive officers’ employment agreements define employment as at-will and provide severance benefits upon various terminations. Any payments or benefits upon a termination are subject to a release of claims and compliance with restrictive covenants, and we do not provide Section 280G gross-up payments.
anti-hedging/anti-pledging policy
Our Insider Trading Compliance Policy prohibits our employees, executive officers,Accounting and directors from engaging in the following transactions:
purchasing the Company’s securities on margin or holding the Company’s securities in a margin account;
pledging the Company’s securities as collateral to secure loans;
engaging in transactions in puts, calls or other derivative securities involving the Company’s securities; or
entering into hedging or monetization transactions or similar arrangements (including short sales) with respect to the Company’s securities.
accounting and tax deductibility treatment
Tax Deductibility TreatmentThe accounting impact of our compensation programs and the tax deductibility of our compensation programs (including pursuant to section 162(m) of the Internal Revenue Code (“Section 162(m)”)) are each one of many factors that
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are considered in determining the size and structure of our programs as we strive to make our compensation programs reasonable and in the best interests of our stockholders. Special rules limit the deductibility of compensation paid to our Chief Executive Officer and other “covered employees” as determined under Section 162(m) and applicable guidance. Under Section 162(m), any compensation over $1 million paid to any of the covered employees in any single year is not tax deductible by us. The Compensation Committee is mindful of the benefit to us of the full deductibility of compensation, but the Compensation Committee believes that it should not be constrained by the requirements of Section 162(m) where those requirements would impair flexibility in compensating our executive officers in a manner that can best promote our corporate objectives of attracting and retaining top tier executive talent.
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compensation committee report
Compensation Committee ReportThe Compensation Committee is comprised of independent directors as required by the listing standards of the NYSE and the SEC rules. At the time of approval of this report, the members of the Compensation Committee are Mr. Kirk Perry and Ms. Lauren Cooks Levitan.Mr. Kenny Mitchell. The Compensation Committee operates pursuant to a written charter adopted by the Board.
The Compensation Committee has reviewed and discussed with management the compensation discussion and analysis contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the compensation discussion and analysis be included in this proxy statement and incorporated into the Company’se.l.f. Beauty’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020.
2022.COMPENSATION COMMITTEE
Lauren Cooks Levitan
Kenny Mitchell
The report of the Compensation Committee will not be deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC, nor shall such information be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Companye.l.f. Beauty specifically incorporates it by reference into suchthat filing.
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executive compensation tables
summary compensation table
Executive Compensation TablesSummary Compensation Table
The following table presents information regarding the compensation awarded to, earned by, or paid to, our named executive officers during (i) FY 2020, 2019T, 2018,2022, (ii) FY 2021 and 2017.(iii) FY 2020. All dollar amounts are rounded to the nearest whole dollar amount.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
name and principal position | year | salary (1) |
| bonus (1) |
| stock awards (2) |
| | option awards (2) |
| | non-equity incentive plan comp. (1) |
| all other comp. |
| | total |
|
Tarang Amin Chairman, Chief Executive Officer, and President | 2020 | $ | 475,000 |
| — |
| — |
| | — |
| | $ | 1,067,123 |
| $ | 20,000 |
| (4) | $ | 1,562,123 |
|
| 2019T | $ | 109,615 |
| $ | 117,124 |
| $ | 3,650,514 |
| (3) (5) | — |
| | — |
| — |
| | $ | 3,877,253 |
|
| 2018 | $ | 475,000 |
| — |
| $ | 5,247,021 |
| | $ | 1,750,000 |
| | — |
| $ | 20,000 |
| (4) | $ | 7,492,021 |
|
| 2017 | $ | 475,000 |
| — |
| $ | 7,155,544 |
| | $ | 2,269,160 |
| (6) | $ | 403,750 |
| $ | 20,000 |
| (4) | $ | 10,323,454 |
|
Rich Baruch SVP and Chief Commercial Officer | 2020 | $ | 325,000 |
| — |
| — |
| | — |
| | $ | 292,055 |
| $ | 5,600 |
| (7) | $ | 622,655 |
|
| 2019T | $ | 75,000 |
| $ | 32,055 |
| $ | 742,451 |
| (3) | — |
| | — |
| $ | 1,500 |
| (7) | $ | 818,951 |
|
| 2018 | $ | 325,000 |
| — |
| $ | 674,538 |
| | $ | 220,686 |
| | — |
| $ | 2,000 |
| (7) | $ | 1,254,279 |
|
| 2017 | $ | 325,000 |
| — |
| $ | 1,299,056 |
| | $ | 132,096 |
| (6) | $ | 110,500 |
| $ | 2,625 |
| (7) | $ | 1,869,277 |
|
Mandy Fields SVP and Chief Financial Officer | 2020 | $ | 323,077 |
| — |
| $ | 1,599,965 |
| | $ | 402,643 |
| | $ | 350,000 |
| $ | 5,923 |
| (7) | $ | 2,681,608 |
|
Josh Franks SVP, Operations | 2020 | $ | 71,250 |
| — |
| $ | 1,000,090 |
| | $ | 349,895 |
| | $ | 64,110 |
| $ | 1,250 |
| (7) | $ | 1,486,595 |
|
Scott Milsten SVP, General Counsel, and Chief People Officer | 2020 | $ | 325,000 |
| — |
| — |
| | — |
| | $ | 292,055 |
| $ | 1,750 |
| (7) | $ | 618,805 |
|
| 2019T | $ | 75,000 |
| $ | 32,055 |
| $ | 1,099,962 |
| (3) | — |
| | — |
| $ | 375 |
| (7) | $ | 1,207,392 |
|
| 2018 | $ | 325,000 |
| — |
| $ | 1,499,096 |
| | $ | 500,000 |
| | — |
| $ | 5,500 |
| (7) | $ | 2,329,596 |
|
| 2017 | $ | 325,000 |
| — |
| $ | 1,626,504 |
| | $ | 514,556 |
| (6) | $ | 110,500 |
| $ | 4,000 |
| (7) | $ | 2,580,560 |
|
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| | | | | | | | | | | | | | |
| (1) | Ms. Fields and Mr. Franks commenced employment with the Company in April 2019 and January 2020, respectively. Salary for Ms. Fields and Mr. Franks reflects the actual amount paid in FY 2020. Non-equity incentive plan compensation for Mr. Franks is pro-rated for the actual number of days Mr. Franks was employed in FY 2020. Non-equity incentive plan compensation for Ms. Fields was not pro-rated as she commenced employment with the Company in April 2020, the first month of FY 2020. |
| (2) | Represents the grant date fair value of the applicable equity awards granted to the named executive officer in the year indicated, calculated in accordance with FASB ASC Topic 718 for stock-based compensation transactions, disregarding the effects of estimated forfeitures. The grant date fair value of PSAs that vest based on a market condition is based the probable outcome of such condition based on a Monte Carlo simulation model; no maximum value applies. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability of meeting the stock price hurdles established for the PSAs, including a term of 10 years, a risk-free interest rate of 2.74%, and an expected volatility of our stock price of 53.0%. For a discussion of the valuation of these equity awards, see Notes to Consolidated Financial Statements at Note 14 in the 2020 Annual Report. These amounts do not reflect the amount the named executive officer has actually realized or will realize from the equity awards upon the vesting thereof or the sale of the shares underlying such equity awards |
| (3) | In 2018, the Company changed its fiscal year end from December 31 to March 31 (with FY 2020 running from April 1, 2019 to March 31, 2020 (and 2019T running from January 1, 2019 to March 31, 2019)). Due to SEC rules regarding disclosure of executive compensation, we are required to list Mr. Amin’s, Mr. Baruch’s, and Mr. Milsten’s equity awards granted on March 1, 2019 as compensation for 2019T. |
| (4) | Represents reimbursement of financial planning and tax preparation assistance made pursuant to Mr. Amin’s employment agreement. |
| (5) | 50% of the restricted stock awards (based on total number of shares granted) are PSAs that vest in three equal portions on the date that is 18 months after the date that the average closing per share trading price of the Company’s common stock equals or exceeds $12, $15, and $18 for a period of 20 trading days, subject to Mr. Amin continuing to provide services to the Company through the applicable vesting date. See under the heading “executive compensation—executive compensation table—outstanding equity awards at fiscal year-end” for additional details regarding the vesting of these equity awards. |
| (6) | The stock options vest and become exercisable in three equal tranches on the 30th consecutive trading day that the per share closing price of the Company’s common stock equals or exceeds $29, $33, and $36, subject to the named executive officer continuing to provide services to the Company through the applicable vesting date. See under the heading “executive compensation—executive compensation table—outstanding equity awards at fiscal year-end” for additional details regarding the vesting of these equity awards. |
| (7) | Represents amount of matching contributions made by the Company under its 401(k) plan. |
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name and principal position | | year | | salary | | | bonus | | | stock awards (1) | | | option awards (1) | | | non-equity
incentive
plan comp. | | | all other
comp. | | | total | |
Tarang Amin Chairman, Chief Executive Officer, and President | | 2022 | | $ | 475,000 | | | | — | | | $ | 3,799,697 | (2) | | | — | | | $ | 950,000 | | | $ | 9,500 | (3) | | $ | 5,234,197 | |
| | 2021 | | $ | 475,000 | | | | — | | | $ | 3,999,900 | | | | — | | | $ | 950,000 | | | $ | 24,019 | | | $ | 5,448,919 | |
| | 2020 | | $ | 475,000 | | | | — | | | | — | | | | — | | | $ | 1,067,123 | | | $ | 20,000 | | | $ | 1,562,123 | |
Mandy Fields SVP and Chief Financial Officer | | 2022 | | $ | 350,000 | | | | — | | | $ | 1,499,808 | (2) | | | — | | | $ | 350,000 | | | $ | 7,000 | (3) | | $ | 2,206,808 | |
| | 2021 | | $ | 350,000 | | | | — | | | $ | 1,199,971 | | | | — | | | $ | 350,000 | | | $ | 6,192 | | | $ | 1,906,163 | |
| | 2020 | | $ | 323,077 | | | | — | | | $ | 1,599,965 | | | $ | 402,643 | | | $ | 350,000 | | | $ | 5,923 | | | $ | 2,681,608 | |
Josh Franks SVP, Operations | | 2022 | | $ | 325,000 | | | | — | | | $ | 1,499,808 | (2) | | | — | | | $ | 260,000 | | | $ | 8,000 | (3) | | $ | 2,092,808 | |
| | 2021 | | $ | 325,000 | | | | — | | | $ | 269,675 | | | | — | | | $ | 260,000 | | | $ | 4,250 | | | $ | 858,925 | |
| | 2020 | | $ | 71,250 | | | | — | | | $ | 1,000,090 | | | $ | 350,085 | | | $ | 64,109 | | | $ | 1,250 | | | $ | 1,486,784 | |
Kory Marchisotto SVP and Chief Marketing Officer | | 2022 | | $ | 325,000 | | | | — | | | $ | 1,499,808 | (2) | | | — | | | $ | 260,000 | | | $ | 6,500 | (3) | | $ | 2,091,308 | |
| | 2021 | | $ | 325,000 | | | | — | | | $ | 1,199,971 | | | | — | | | $ | 260,000 | | | $ | 6,450 | | | $ | 1,791,421 | |
| | 2020 | | $ | 325,000 | | | | — | | | | — | | | | — | | | $ | 281,014 | | | $ | 6,500 | | | $ | 612,514 | |
Rich Baruch Former SVP and Chief Commercial Officer | | 2022 | | $ | 325,000 | | | | — | | | $ | 1,499,808 | (2) | | | — | | | $ | 260,000 | | | $ | 6,500 | (3) | | $ | 2,091,308 | |
| | 2021 | | $ | 325,000 | | | | — | | | | 1,374,840 | | | | — | | | $ | 260,000 | | | $ | 6,450 | | | $ | 1,966,290 | |
| | 2020 | | $ | 325,000 | | | | — | | | | — | | | | — | | | $ | 292,055 | | | $ | 5,600 | | | $ | 622,655 | |
| (1) | Represents the grant date fair value of the applicable equity awards granted to the named executive officer in the year indicated, calculated in accordance with FASB ASC Topic 718 for stock-based compensation transactions, disregarding the effects of estimated forfeitures. For a discussion of the valuation of these equity awards, see Notes to Consolidated Financial Statements at Note 14 in the 2022 Annual Report. These amounts do not reflect the amount the named executive officer has actually realized or will realize from the equity awards upon the vesting thereof or the sale of the shares underlying such equity awards. |
| (2) | 50% of the value reported for all named executive officers is attributable to PSUs based on attainment of the performance goals at the target level of performance as of the grant date. Assuming attainment of the performance goals at the maximum level of performance, the value of the PSUs as of the grant date for Mr. Amin is $3,799,697 and for each other named executive officer is $1,499,808. See under the heading “Executive Compensation-Executive Compensation Tables-Grants of Plan-Based Awards” for additional details regarding the vesting of these equity awards. |
| (3) | Represents amount of matching contributions made by e.l.f. Beauty under its 401(k) plan. |
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grantsGrants of plan-based awards
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | estimated future payout under non-equity incentive plan awards (1) | | estimated future payout under equity incentive plan awards (2) | all other stock awards: number of shares of stock or units |
| all other option awards: number of securities underlying options |
| exercise or base price of option awards |
| grant date fair value of stock and option awards (3) |
|
| name | grant date | threshold |
| target |
| maximum |
| | threshold (#) |
| target (#) |
| maximum (#) |
|
| Tarang Amin | — | $ | 473,698 |
| $ | 592,124 |
| $ | 1,067,123 |
| | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | 3/1/2019 (4) | — |
| — |
| — |
| | — |
| 80,710 |
| — |
| — |
| — |
| — |
| $ | 602,904 |
|
| | 3/1/2019 (5) | — |
| — |
| — |
| | — |
| 80,710 |
| — |
| — |
| — |
| — |
| $ | 573,041 |
|
| | 3/1/2019 (6) | — |
| — |
| — |
| | — |
| 80,710 |
| — |
| — |
| — |
| — |
| $ | 549,635 |
|
| | 3/1/2019 (7) | — |
| — |
| — |
| | — |
| — |
| — |
| 242,130 |
| — |
| — |
| $ | 1,924,934 |
|
| Rich Baruch | — | $ | 129,644 |
| $ | 162,055 |
| $ | 292,055 |
| | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | 3/1/2019 (7) | — |
| — |
| — |
| | — |
| — |
| — |
| 93,390 |
| — |
| — |
| $ | 742,451 |
|
| Mandy Fields | — | $ | 140,000 |
| $ | 175,000 |
| $ | 350,000 |
| | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | 4/22/2019 (7) | — |
| — |
| — |
| | — |
| — |
| — |
| — |
| 83,760 |
| $ | 12.22 |
| $ | 402,643 |
|
| | 4/22/2019 (8) | — |
| — |
| — |
| | — |
| — |
| — |
| 130,930 |
| — |
| — |
| $ | 1,599,965 |
|
| Josh Franks | — | $ | 25,644 |
| $ | 32,055 |
| $ | 64,110 |
| | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | 1/2/2020 (7) | — |
| — |
| — |
| | — |
| — |
| — |
| — |
| 58,800 |
| $ | 15.70 |
| $ | 349,895 |
|
| | 1/2/2020 (9) | — |
| — |
| — |
| | — |
| — |
| — |
| 63,700 |
| — |
| — |
| $ | 1,000,090 |
|
| Scott Milsten | — | $ | 129,644 |
| $ | 162,055 |
| $ | 292,055 |
| | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | 3/1/2019 (7) | — |
| — |
| — |
| | — |
| — |
| — |
| 138,360 |
| — |
| — |
| $ | 1,099,962 |
|
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| (1) | Amounts shown in these columns represent the range of possible cash payouts for each named executive officer with respect to annual cash incentive compensation for FY 2020, as determined by the Compensation Committee for FY 2020. For more information, see under the heading “executive compensation—compensation discussion and analysis—compensation program components—annual incentive compensation”. The threshold, target, and maximum for Mr. Franks is pro-rated for the actual number of days Mr. Franks was employed in FY 2020. The threshold, target, and maximum for Ms. Fields was not pro-rated as she commenced employment with the Company in April 2020, the first month of FY 2020. |
| (2) | Represents PSAs granted to Mr. Amin in 2019T, which vest subject to the satisfaction of certain stock price hurdles. No threshold or maximum levels apply. |
| (3) | Represents the grant date fair value of the applicable equity awards granted to the named executive officer in the year indicated, calculated in accordance with FASB ASC Topic 718 for stock-based compensation transactions, disregarding the effects of estimated forfeitures. For a discussion of the valuation of these equity awards, see Notes to Consolidated Financial Statements at Note 14 in the 2020 Annual Report. These amounts do not reflect the amount the named executive officer has actually realized or will realize from the equity awards upon the vesting thereof or the sale of the shares underlying such equity awards |
| (4) | The PSA vests 18 months after the date that the average closing per share trading price of the Company’s common stock equals or exceeds $12 for a period of 20 trading days, subject to continued service through such vesting date. |
| (5) | The PSA vests 18 months after the date that the average closing per share trading price of the Company’s common stock equals or exceeds $15 for a period of 20 trading days, subject to continued service through such vesting date. |
| (6) | The PSA vests 18 months after the date that the average closing per share trading price of the Company’s common stock equals or exceeds $18 for a period of 20 trading days, subject to continued service through such vesting date. |
| (7) | The stock options and restricted stock awards, as applicable, vest in four substantially equal installments on the first four anniversaries of the date of the grant, subject to continued service through the applicable vesting date. |
| (8) | The restricted stock award vests on the first four anniversaries of June 3, 2019, subject to continued service through the applicable vesting date. |
| (9) | The restricted stock award vests on the first four anniversaries of March 1, 2020, subject to continued service through the applicable vesting date. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | estimated future payout under non-
equity incentive plan awards (1) | | | estimated future payout under equity
incentive plan awards (2) | | | all other
stock
awards:
number
of shares
of stock
or units | | | all other
option
awards:
number of
securities
underlying
options | | | exercise
or base
price of
option
awards | | | grant date
fair value of
stock and
option
awards (3) | |
name | | grant date | | | threshold | | | target | | | maximum | | | threshold (#) | | | target (#) | | | maximum (#) | |
Tarang Amin | | | — | | | $ | 380,000 | | | $ | 475,000 | | | $ | 950,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 6/1/2021 | (2) | | | — | | | | — | | | | — | | | | — | | | | 68,910 | | | | 137,820 | | | | — | | | | — | | | | — | | | $ | 1,899,849 | |
| | | 6/1/2021 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 68,910 | | | | — | | | | — | | | $ | 1,899,849 | |
Mandy Fields | | | — | | | $ | 140,000 | | | $ | 175,000 | | | $ | 350,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 6/1/2021 | (2) | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | 54,400 | | | | — | | | | — | | | | — | | | $ | 749,904 | |
| | | 6/1/2021 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | — | | | | — | | | $ | 749,904 | |
Josh Franks | | | — | | | $ | 104,000 | | | $ | 130,000 | | | $ | 260,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 6/1/2021 | (2) | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | 54,400 | | | | — | | | | — | | | | — | | | $ | 749,904 | |
| | | 6/1/2021 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | — | | | | — | | | $ | 749,904 | |
Kory Marchisotto | | | — | | | $ | 104,000 | | | $ | 130,000 | | | $ | 260,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 6/1/2021 | (2) | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | 54,400 | | | | — | | | | — | | | | — | | | $ | 749,904 | |
| | | 6/1/2021 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | — | | | | — | | | $ | 749,904 | |
Rich Baruch | | | — | | | $ | 104,000 | | | $ | 130,000 | | | $ | 260,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 6/1/2021 | (2) | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | 54,400 | | | | — | | | | — | | | | — | | | $ | 749,904 | |
| | | 6/1/2021 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 27,200 | | | | — | | | | — | | | $ | 749,904 | |
| (2) | Represents PSUs, which vest subject to the achievement of net sales CAGR (weighted 60%) and Adjusted EBITDA CAGR (weighted 40%) targets measured over a three-year performance period ending on March 31, 2024, with a potential uplift in the event both goals are achieved at maximum and we achieve an additional target for Adjusted EBITDA margin expansion. The PSUs vest in a single installment, subject to continued service and to the extent earned, upon the Compensation Committee’s certification of our achievement following the three-year performance period. |
| (3) | Represents the grant date fair value of the applicable equity awards granted to the named executive officer in the year indicated, calculated in accordance with FASB ASC Topic 718 for stock-based compensation transactions, disregarding the effects of estimated forfeitures. The PSUs were valued based on attainment of the performance goals at the target level of performance as of the grant date. For a discussion of the valuation of these equity awards, see Notes to Consolidated Financial Statements at Note 14 in the 2022 Annual Report. These amounts do not reflect the amount the named executive officer has actually realized or will realize from the equity awards upon the vesting thereof or the sale of the shares underlying such equity awards. |
| (4) | Represents RSUs, which vest in equal annual installments over a four-year period, subject to continued service through each vesting date. |
|
| | | |
20202022 Proxy Statement | 56 | 60 | |
|
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
introIntro | board | companyBoard | exec. comp. | equity plansCompany | stockholders | auditExec. Comp. | add’l. info | q&aEquity Plans | annexes | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
outstanding equity awardsOutstanding Equity Awards at fiscal year-end
Fiscal Year-EndThe following table presents information regarding outstanding equity awards held by our named executive officers as of March 31, 2020.2022. Dollar amounts, except exercise prices, are rounded to the nearest whole dollar.
|
| | | | | | | | | | | | | | | | | | | | | |
| | | option awards | | stock awards |
| name | grant date | number of securities underlying unexercised options exercisable |
| number of securities underlying unexercised options unexercisable |
| 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 |
| | market value of shares or units that have not vested (1) |
|
| Tarang Amin | 1/31/2014 | 476,888 |
| — |
| — |
| $ | 1.84 |
| 1/31/2024 |
| | — |
| | — |
|
| | 9/21/2016 (2) | 321,027 |
| 107,010 |
| — |
| $ | 17.00 |
| 9/21/2026 |
| | 36,640 |
| | $ | 360,538 |
|
| | 2/14/2017 (3) | — |
| — |
| 213,000 |
| $ | 26.84 |
| 2/14/2027 |
| | — |
| | — |
|
| | 2/14/2017 (2) | — |
| — |
| — |
| — |
| — |
| | 66,650 |
| | $ | 655,836 |
|
| | 3/1/2018 (2) | 126,100 |
| 126,100 |
| — |
| $ | 18.43 |
| 3/1/2028 |
| | 142,350 |
| | $ | 1,400,724 |
|
| | 3/1/2019 (2) | — |
| — |
| — |
| — |
| — |
| | 181,597 |
| | $ | 1,786,914 |
|
| | 3/1/2019 (4) | — |
| — |
| — |
| — |
| — |
| | 242,130 |
| | $ | 2,382,559 |
|
| Rich Baruch | 5/16/2014 | 307,920 |
| — |
| — |
| $ | 1.84 |
| 5/16/2024 |
| | — |
| | — |
|
| | 9/21/2016 (2) | 58,369 |
| 19,457 |
| | $ | 17.00 |
| 9/21/2016 |
| | 6,661 |
| | $ | 65,544 |
|
| | 2/14/2017 (3) | — |
| — |
| 38,700 |
| $ | 26.84 |
| 2/14/2027 |
| | — |
| | — |
|
| | 2/14/2017 (2) | — |
| — |
| — |
| — |
| — |
| | 12,100 |
| | $ | 119,064 |
|
| | 3/1/2018 (2) | 16,200 |
| 16,200 |
| — |
| $ | 18.43 |
| 3/1/2028 |
| | 18,300 |
| | $ | 180,072 |
|
| | 3/1/2019 (2) | — |
| — |
| — |
| — |
| — |
| | 70,042 |
| | $ | 689,213 |
|
| Mandy Fields | 4/22/2019 (2) | — |
| 83,760 |
| — |
| $ | 12.22 |
| 4/22/2029 |
| | — |
| | — |
|
| | 4/22/2019 (2) | — |
| — |
| — |
| — |
| — |
| | 130,930 |
| | $ | 1,288,351 |
|
| Josh Franks | 1/2/2020 (2) | — |
| 58,800 |
| — |
| $ | 15.70 |
| 1/2/2030 |
| | — |
| | — |
|
| | 1/2/2020 (2) | — |
| — |
| — |
| — |
| — |
| | 63,700 |
| | $ | 626,808 |
|
| Scott Milsten | 1/31/2014 | 55,200 |
| — |
| — |
| $ | 1.84 |
| 1/31/2024 |
| | — |
| | — |
|
| | | | 8/12/2015 | 209,939 |
| — |
| — |
| $ | 1.84 |
| 8/12/2025 |
| | — |
| | — |
|
| | | | 9/21/2016 (2) | 72,960 |
| 24,321 |
| — |
| $ | 17.00 |
| 9/21/2026 |
| | 8,327 |
| | $ | 81,938 |
|
| | | | 2/14/2017 (3) | — |
| — |
| 48,300 |
| $ | 26.84 |
| 2/14/2027 |
| | — |
| | — |
|
| | | | 2/14/2017 (2) | — |
| — |
| — |
| — |
| — |
| | 15,150 |
| | $ | 149,076 |
|
| | | | 3/1/2018 (2) | 36,000 |
| 36,000 |
| — |
| $ | 18.43 |
| 3/1/2028 |
| | 40,670 |
| | $ | 400,193 |
|
| | | | 3/1/2019 (2) | — |
| — |
| — |
| — |
| — |
| | 103,770 |
| | $ | 1,021,097 |
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| (1) | Represents the market value of restricted stock and shares underlying RSUs as of March 31, 2020, based on the closing price of our common stock on that date of $9.84 per share (as reported on the NYSE). |
| (2) | Except as otherwise indicated, the stock options, RSUs, and shares of restricted stock, as applicable, vest in four substantially equal installments on the first four anniversaries of the date of the grant, subject to continued service through the applicable vesting date. Ms. Fields’ restricted stock award from April 22, 2019 vests on the first four anniversaries of June 3, 2019. Mr. Franks’ restricted stock award from January 2, 2020 vests on the first four anniversaries of March 1, 2020. |
| (3) | The stock options vest and become exercisable in three equal tranches on the 30th consecutive trading day that the per share closing price of the Company’s common stock equals or exceeds $29, $33, and $36, subject to the named executive officer continuing to provide services to the Company through the applicable vesting date; provided that in the event of a change in control (as defined in the 2016 Equity Incentive Award Plan), if the per share consideration provided to the stockholders of the Company pursuant to such change in control equals or exceeds the applicable share price target for a tranche that has not previously or otherwise vested, then the stock options for that tranche vest in full immediately prior to such change in control, subject to continued service through the closing of the change in control. |
| (4) | The PSAs vest in three equal portions on the date that is 18 months after the date that the average closing per share trading price of the Company’s common stock equals or exceeds $12, $15, and $18 for a period of 20 trading days, subject to Mr. Amin continuing to provide services to the Company through the applicable vesting date; provided that in the event of a change in control (as defined in the 2016 Equity Incentive Award Plan), if the per share consideration provided to the stockholders of the Company pursuant to such change in control equals or exceeds the applicable share price target for a tranche that has not previously or otherwise vested or if the applicable share price target for a tranche has already been achieved, then the PSAs for that tranche vest in full immediately prior to such change in control, subject to continued service by Mr. Amin through the closing of the change in control. The $12 stock price trigger was achieved on May 1, 2019 and the associated tranche will vest on November 1, 2020, subject to continued service by Mr. Amin through such date. The $15 stock price trigger was achieved on July 19, 2019 and the associated tranche will vest on January 19, 2021, subject to continued service by Mr. Amin through such date. The $18 stock price trigger was achieved on February 25, 2020 and the associated tranche will vest on August 25, 2021, subject to continued service by Mr. Amin through such date. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | option awards | | | stock awards | |
name | | grant date | | | number of
securities
underlying
unexercised
options
exercisable | | | number of
securities
underlying
unexercised
options
unexercisable | | | 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 | | | market
value of
shares or
units that
have not
vested (1) | | | equity
incentive
plan
awards:
number of
unearned
shares,
units or
other
rights that
have not
vested | | | equity
incentive
plan
awards:
market or
payout
value of
unearned
shares,
units or
other
right that
have not
vested (1) | |
Tarang Amin | | | 1/31/14 | | | | 476,888 | | | | — | | | | — | | | $ | 1.84 | | | | 1/31/24 | | | | — | | | | — | | | | — | | | | — | |
| | | 9/21/16 | | | | 428,037 | | | | — | | | | — | | | $ | 17.00 | | | | 9/21/26 | | | | — | | | | — | | | | — | | | | — | |
| | | 2/14/2017 | (2) | | | 71,000 | | | | — | | | | 142,000 | | | $ | 26.84 | | | | 2/14/27 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/1/2018 | | | | 252,000 | | | | — | | | | — | | | $ | 18.43 | | | | 3/1/28 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/1/2019 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 60,532 | | | $ | 1,563,542 | | | | — | | | | — | |
| | | 6/1/2020 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 119,400 | | | $ | 3,084,102 | | | | — | | | | — | |
| | | 6/1/2020 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 89,550 | | | $ | 2,313,077 | | | | — | | | | — | |
| | | 6/1/2021 | (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 68,910 | | | $ | 1,779,945 | |
| | | 6/1/2021 | (3) | | | | | | | | | | | | | | | | | | | | | | | 68,910 | | | $ | 1,779,945 | | | | — | | | | — | |
Mandy Fields | | | 4/22/2019 | (3) | | | — | | | | 41,880 | | | | — | | | $ | 12.22 | | | | 4/22/29 | | | | 65,464 | | | $ | 1,690,935 | | | | — | | | | — | |
| | | 6/1/2020 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,910 | | | $ | 462,615 | | | | — | | | | — | |
| | | 6/1/2020 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 40,297 | | | $ | 1,040,872 | | | | — | | | | — | |
| | | 6/1/2021 | (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | |
| | | 6/1/2021 | (3) | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | | | | — | | | | — | |
Josh Franks | | | 1/2/2020 | (3) | | | 29,400 | | | | 29,400 | | | | — | | | $ | 12.22 | | | | 1/2/30 | | | | 31,850 | | | $ | 822,686 | | | | — | | | | — | |
| | | 6/1/2020 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,020 | | | $ | 103,837 | | | | — | | | | — | |
| | | 6/1/2020 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 9,060 | | | $ | 234,020 | | | | — | | | | — | |
| | | 6/1/2021 | (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | |
| | | 6/1/2021 | (3) | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | | | | — | | | | — | |
Kory Marchisotto | | | 3/1/2019 | (3) | | | 57,550 | | | | 28,775 | | | | — | | | $ | 7.95 | | | | 3/1/29 | | | | 31,850 | | | $ | 822,686 | | | | — | | | | — | |
| | | 6/1/2020 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,910 | | | $ | 462,615 | | | | — | | | | — | |
| | | 6/1/2020 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 40,297 | | | $ | 1,040,872 | | | | — | | | | — | |
| | | 6/1/2021 | (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | |
| | | 6/1/2021 | (3) | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | | | | — | | | | — | |
Rich Baruch | | | 5/16/14 | | | | 119,480 | | | | — | | | | — | | | $ | 1.84 | | | | 5/16/24 | | | | — | | | | — | | | | — | | | | — | |
| | | 9/21/16 | | | | 77,826 | | | | — | | | | — | | | $ | 17.00 | | | | 9/21/26 | | | | — | | | | — | | | | — | | | | — | |
| | | 2/14/2017 | (2) | | | 12,900 | | | | — | | | | 25,800 | | | $ | 26.84 | | | | 2/14/27 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/1/2018 | | | | 32,400 | | | | — | | | | — | | | $ | 18.43 | | | | 3/1/28 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/1/2019 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 23,347 | | | $ | 603,053 | | | | — | | | | — | |
| | | 6/1/2020 | (4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 20,520 | | | $ | 530,032 | | | | — | | | | — | |
| | | 6/1/2020 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 46,170 | | | $ | 1,192,571 | | | | — | | | | — | |
| | | 6/1/2021 | (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | |
| | | 6/1/2021 | (3) | | | | | | | | | | | | | | | | | | | | | | | 27,200 | | | $ | 702,576 | | | | — | | | | — | |
| (1) | Represents the market value of stock awards as of March 31, 2022, based on the closing price of our common stock on that date of $25.83 per share (as reported on the NYSE). |
| (2) | The stock options vest and become exercisable in three equal tranches on the 30th consecutive trading day that the per share closing price of our common stock equals or exceeds $29, $33, and $36, subject to the named executive officer’s continued service through the applicable vesting date. In the event of a change in control, if the per share consideration provided to our stockholders pursuant to such change in control equals or exceeds the applicable share price target for a tranche that has not previously |
|
| | | |
| 57 | 202061 | | 2022 Proxy Statement |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
introIntro | board | companyBoard | exec. comp. | equity plansCompany | stockholders | auditExec. Comp. | add’l. info | q&aEquity Plans | annexes | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
stock option exercises | or otherwise vested, then the stock options for that tranche vest in full immediately prior to such change in control, subject to the named executive officer’s continued service through the closing of the change in control. The $29 hurdle was achieved during FY 2022 and as a result one-third of the stock options vested. |
| (3) | Except as otherwise indicated, the stock options, RSUs, and shares of restricted stock, as applicable, vest in four substantially equal installments on the first four anniversaries of the date of the grant, subject to continued service through the applicable vesting date. Ms. Fields’ restricted stock award granted on April 22, 2019 vests on the first four anniversaries of June 3, 2019. |
| (4) | The PSAs vest on June 1, 2022, subject to the named executive officer’s continued service through such vesting date, if e.l.f. Cosmetics’ share of the color cosmetics market as of March 21, 2021 (as reported by Nielsen xAOC) exceeds e.l.f. Cosmetics’ share of the color cosmetics market as of March 21, 2020 (as reported by Nielsen xAOC). The Compensation Committee determined in April 2021 that the market share gain performance goal was achieved. As a result, the PSAs vested on June 1, 2022. |
| (5) | The PSUs vest subject to achievement of net sales CAGR (weighted 60%) and Adjusted EBITDA CAGR (weighted 40%) targets measured over a three-year performance period ending on March 31, 2024, with a potential uplift in the event both goals are achieved at maximum and we achieve an additional target for Adjusted EBITDA margin expansion. The PSUs vest in a single installment, subject to continued service and to the extent earned, upon the Compensation Committee’s certification of our achievement following the three-year performance period. |
Stock Option Exercises and stock vested
Stock VestedThe following table presents information regarding stock options that were exercised and RSUs, and restricted stock, and PSAs that vested with respect to our named executive officers during 2019T and FY 2020.2022. Dollar amounts are rounded to the nearest whole dollar.
|
| | | | | | | | | | | | | | | | |
| | | option awards | | stock awards |
| name | year | number of shares acquired on exercise |
| | value realized on exercise (1) |
| | number of shares acquired on vesting |
| | value realized on vesting (2) |
|
| Tarang Amin | 2020 | — |
| | — |
| | 234,998 |
| | $ | 4,065,093 |
|
| | 2019T | — |
| | — |
| | 137,825 |
| | $ | 1,194,351 |
|
| Rich Baruch | 2020 | 15,000 |
| | $ | 240,510 |
| | 51,260 |
| | $ | 875,227 |
|
| | 2019T | — |
| | — |
| | 21,250 |
| | $ | 186,846 |
|
Mandy Fields (3) | 2020 | — |
| | — |
| | — |
| | — |
|
Josh Franks (3) | 2020 | — |
| | — |
| | — |
| | — |
|
| Scott Milsten | 2020 | — |
| | — |
| | 78,402 |
| | $ | 1,322,787 |
|
| | | | 2019T | — |
| | — |
| | 34,485 |
| | $ | 304,528 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| (1) | The value realized equals the difference between the fair market value of the common stock underlying the stock options on the exercise date and the exercise price of the underlying options multiplied by the number of stock options exercised. |
| (2) | The value realized equals the fair market value of the common stock underlying the RSUs or restricted stock on the vesting date multiplied by the number of RSUs or restricted stock, as applicable, that vested. |
| (3) | Not employed with the Company in 2019T. |
pension benefits
| | | | | | | | | | | | | | | | |
| | | option awards | | | stock awards | |
name | | number of shares
acquired on
exercise | | | value realized on
exercise (1) | | | number of shares
acquired on vesting | | | value realized on
vesting (2) | |
Tarang Amin | | | — | | | | — | | | | 242,267 | | | $ | 6,646,553 | |
Mandy Fields | | | 20,940 | | | $ | 376,711 | | | | 46,166 | | | $ | 1,264,941 | |
Josh Franks | | | — | | | | — | | | | 18,945 | | | $ | 494,286 | |
Kory Marchisotto | | | — | | | | — | | | | 45,283 | | | $ | 1,192,715 | |
Rich Baruch | | | 52,440 | | | $ | 1,530,662 | | | | 47,887 | | | $ | 1,263,375 | |
| (1) | The value realized equals the difference between the fair market value of the common stock underlying the stock options at the time of exercise and the exercise price of the underlying options multiplied by the number of stock options exercised. |
| (2) | The value realized equals the fair market value of the common stock underlying the PSAs, RSUs or restricted stock award on the vesting date multiplied by the number of PSAs, RSUs or shares of restricted stock, as applicable, that vested. |
Pension Benefits
We do not have any defined benefit pension plans for our executive officers.
non-qualified deferred compensation
Non-Qualified Deferred Compensation
We do not offer any non-qualified deferred compensation plans for our executive officers.
potential paymentsPotential Payments upon terminationTermination or changeChange in control
non-changeControlNon-Change in control
ControlEach named executive officer’s employment agreement provides that if his or her employment is terminated (i) by the Companye.l.f. Beauty for reasons other than death, disability or “cause” (as defined in each employment agreement), or (ii) by the named executive officer for “good reason” (as defined in each employment agreement) (a “qualifying non-change in control termination”), then, in addition to any accrued but unpaid base salary and paid time off and such employee benefits, if any, to which the named executive officer or his or her eligible dependents may be entitled under our employee benefit plans or programs, and reimbursement for reasonable business expenses, each as would have been payable through the date of
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termination and any unpaid annual cash incentive earned for a previously completed fiscal year, he or she will be entitled to receive:
an amount equal to his or her base salary (except that Mr. Amin will be entitled to two times his base salary), payable in installments;
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
continued COBRA coverage for the named executive officer and his or her eligible dependents for a period of up to 12 months (except that Mr. Amin who commenced employment prior to our current post-employment benefits practices, is entitled to 18 months; similarly Mr. Baruch and Mr. Milsten will bewas entitled to 18 months); and
pro-rated annual cash incentive payout based on actual performance for the fiscal year in which termination occurs, provided that the named executive officer has been employed with the Company for at least six months of such fiscal year.
In addition, in the event theIf a named executive officer’s employment is terminated due to death or disability, each named executive officer’s employment agreement provides that he or she will be eligible to receive a pro-rated annual cash incentive payout based on actual performance for the fiscal year in which termination occurs.
All such severance payments and benefits are contingent upon each named executive officer’s compliance with certain confidentiality and other provisions as set forth in his or her respective employment agreement, and the execution of a general release of claims in favor of the Company.
changee.l.f. Beauty.Change in control
Control and Subsequent TerminationPursuant to the 2016 Equity Incentive Award Plan, in the event that the successor corporation (or its parents and subsidiaries) in a change in control (as defined in the 2016 Equity Incentive Award Plan) refuses to assume or substitute for any equity awards granted under the 2016 Equity Incentive Award Plan (except for performance awards which vest in accordance with their terms), those equity awards will vest in full immediately prior to the change in control.
Under a resolution adopted by the Compensation Committee in 2016, the equity awards granted to Mr. Amin under our 2016 Equity Incentive Award Plan, unless otherwise determined by the Compensation Committee at the time the applicable equity award is granted, will vest in full immediately prior to a change in control, subject to continued service by Mr. Amin through the closing of the change in control.
With respect to the stock option awards granted to Mr. Amin Mr. Baruch, and Mr. MilstenBaruch on February 14, 2017, in the event of a change in control, if the per share consideration provided to theour stockholders of the Company pursuant to that change in control equals or exceeds the remaining applicable share price target ($29, $33,33 or $36) for a tranche that has not previously or otherwise vested, then that tranche vests in full immediately prior to that change in control, subject to continued service by Mr. Amin, Mr. Baruch, or Mr. Milsten, as applicable, through the closing of that change in control.
Mr. Baruch’s unvested stock option awards forfeited upon his departure.With respect to the FY 2021 PSAs, granted to Mr. Amin on March 1, 2019, in the event of a change in control, if the per share consideration provided to the stockholders of the Company pursuant to such change in control equals or exceeds the applicable share price target ($12, $15, or $18) for a tranche that has not previously or otherwise vested or if the applicable share price target for a tranche has already been achieved, then that tranche vestsawards would vest in full as of immediately prior to such change in control, subject to continued service by Mr. Aminthe named executive officer through the closing of the change in control.control; provided, however, that the FY 2021 PSAs would be forfeited immediately on the date the Compensation Committee determines that the performance goal was not achieved. The $12 stock price hurdleCompensation Committee determined in April 2021 that the performance goal for the FY 2021 PSAs was achieved on May 1, 2019, the $15 stock price hurdle was achieved on July 19, 2019 and the $18 stock price hurdle was achieved on February 25, 2020. As such, these PSAs will vestvested in full immediately prioron June 1, 2022.
With respect to the FY 2022 PSUs, in the event of a change in control subjectprior to continued service bythe end of the performance period, the performance goals will be deemed attained at the greater of target or actual attainment of the goals as of immediately prior the change in control. In the case of Mr. Amin, through the closingPSUs will accelerate in full, and in the case of that change in control.
each other named |
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terminationexecutive officer, the PSUs will accelerate in connection with a changefull if they are not assumed by the successor. If the successor assumes the PSUs, the PSUs will vest on the last day of the performance period subject to the named executive officer’s continued service through such date; provided that in control
estimated potential paymentsEstimated Potential Payments upon terminationTermination or changeChange in control
ControlThe following table sets forth estimates of the benefits that our named executive officers would have received in the event of various termination and change in control events (assuming the termination and the change in control, as applicable, occurred on March 31, 2020)2022). Dollar amounts are rounded to the nearest whole dollar.
|
| | | | | | | | | | | | | | | | | | | | | |
| name | continued base salary |
| | pro-rated annual cash incentive |
| | continued benefits (1) |
| | equity acceleration (2) |
| | total |
|
| Tarang Amin | | | | | | | | |
|
|
| | qualifying non-change in control termination | $ | 950,000 |
| | $ | 1,067,123 |
| | $ | 49,216 |
| | — |
| | $ | 2,066,339 |
|
| | termination due to death or disability | — |
| | $ | 1,067,123 |
| | — |
| | — |
| | $ | 1,067,123 |
|
| | change in control with equity assumption or substitution | — |
| | — |
| | — |
| | $ | 6,586,571 |
| | $ | 6,586,571 |
|
| | change in control without equity assumption or substitution | — |
| | — |
| | — |
| | $ | 6,586,571 |
| | $ | 6,586,571 |
|
| | qualifying change in control termination | $ | 950,000 |
| | $ | 1,067,123 |
| | $ | 49,216 |
| | $ | 6,586,571 |
| | $ | 8,652,910 |
|
| Rich Baruch | | | | | | | | |
|
|
| | qualifying non-change in control termination | $ | 325,000 |
| | $ | 292,055 |
| | $ | 15,824 |
| | — |
| | $ | 632,879 |
|
| | termination due to death or disability | — |
| | $ | 292,055 |
| | — |
| | — |
| | $ | 292,055 |
|
| | change in control with equity assumption or substitution | — |
| | — |
| | — |
| | — |
| | — |
|
| | change in control without equity assumption or substitution | — |
| | — |
| | — |
| | $ | 988,349 |
| | $ | 988,349 |
|
| | qualifying change in control termination | $ | 325,000 |
| | $ | 292,055 |
| | $ | 15,824 |
| | $ | 988,349 |
| | $ | 1,621,228 |
|
| Mandy Fields | | | | | | | | |
|
|
| | qualifying non-change in control termination | $ | 350,000 |
| | $ | 350,000 |
| | $ | 377 |
| | — |
| | $ | 700,377 |
|
| | termination due to death or disability | — |
| | $ | 350,000 |
| | — |
| | — |
| | $ | 350,000 |
|
| | change in control with equity assumption or substitution | — |
| | — |
| | — |
| | — |
| | — |
|
| | change in control without equity assumption or substitution | — |
| | — |
| | — |
| | $ | 1,288,351 |
| | $ | 1,288,351 |
|
| | qualifying change in control termination | $ | 350,000 |
| | $ | 350,000 |
| | $ | 377 |
| | $ | 1,288,351 |
| | $ | 1,988,728 |
|
| Josh Franks | | | | | | | | |
|
|
| | qualifying non-change in control termination | $ | 325,000 |
| | $ | 64,110 |
| | $ | 21,216 |
| | — |
| | $ | 410,326 |
|
| | termination due to death or disability | — |
| | $ | 64,110 |
| | — |
| | — |
| | $ | 64,110 |
|
| | change in control with equity assumption or substitution | — |
| | — |
| | — |
| | — |
| | — |
|
| | change in control without equity assumption or substitution | — |
| | — |
| | — |
| | $ | 626,808 |
| | $ | 626,808 |
|
| | qualifying change in control termination | $ | 325,000 |
| | $ | 64,110 |
| | $ | 21,216 |
| | $ | 626,808 |
| | $ | 1,037,134 |
|
| Scott Milsten | | | | | | | | |
|
|
| | qualifying non-change in control termination | $ | 325,000 |
| | $ | 292,055 |
| | $ | 49,216 |
| | — |
| | $ | 666,271 |
|
| | termination due to death or disability | — |
| | $ | 292,055 |
| | — |
| | — |
| | $ | 292,055 |
|
| | change in control with equity assumption or substitution | — |
| | — |
| | — |
| | — |
| | — |
|
| | change in control without equity assumption or substitution | — |
| | — |
| | — |
| | $ | 1,652,303 |
| | $ | 1,652,303 |
|
| | qualifying change in control termination | $ | 325,000 |
| | $ | 292,055 |
| | $ | 49,216 |
| | $ | 1,652,303 |
| | $ | 2,318,574 |
|
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| (1) | Assumes that the named executive officer elected to receive COBRA premiums for himself or herself and his or her eligible dependents for the applicable post-termination period. Ms. Fields is only enrolled in our dental and vision health insurance plans and not currently enrolled in our medical health insurance plan. |
| | | | | | | | | | | | | | | | | | | | |
name | | continued
base
salary | | | pro—rated
annual
cash
incentive | | | continued
benefits (1) | | | equity acceleration (2) | | | total | |
Tarang Amin | | | | | | | | | | | | | | | | | | | | |
Qualifying non—change in control termination | | $ | 950,000 | | | $ | 950,000 | | | $ | 53,122 | | | | — | | | $ | 1,953,122 | |
Termination due to death or disability | | | — | | | $ | 950,000 | | | | — | | | | — | | | $ | 950,000 | |
Change in control with equity assumption or substitution | | | — | | | | — | | | | — | | | $ | 10,520,611 | | | $ | 10,520,611 | |
Change in control without equity assumption or substitution | | | — | | | | — | | | | — | | | $ | 10,520,611 | | | $ | 10,520,611 | |
Qualifying change in control termination | | $ | 950,000 | | | $ | 950,000 | | | $ | 53,122 | | | $ | 10,520,611 | | | $ | 12,473,733 | |
Mandy Fields | | | | | | | | | | | | | | | | | | | | |
Qualifying non—change in control termination | | $ | 350,000 | | | $ | 350,000 | | | $ | 373 | | | | — | | | $ | 700,373 | |
Termination due to death or disability | | | — | | | $ | 350,000 | | | | — | | | | — | | | $ | 350,000 | |
Change in control with equity assumption or substitution | | | — | | | | — | | | | — | | | | — | | | | — | |
Change in control without equity assumption or substitution | | | — | | | | — | | | | — | | | $ | 5,169,561 | | | $ | 5,169,561 | |
Qualifying change in control termination | | $ | 350,000 | | | $ | 350,000 | | | $ | 373 | | | $ | 5,169,561 | | | $ | 5,869,934 | |
Josh Franks | | | | | | | | | | | | | | | | | | | | |
Qualifying non—change in control termination | | $ | 325,000 | | | $ | 260,000 | | | $ | 22,907 | | | | — | | | $ | 607,907 | |
Termination due to death or disability | | | — | | | $ | 260,000 | | | | — | | | | — | | | $ | 260,000 | |
Change in control with equity assumption or substitution | | | — | | | | — | | | | — | | | | — | | | | — | |
Change in control without equity assumption or substitution | | | — | | | | — | | | | — | | | $ | 2,863,516 | | | $ | 2,863,516 | |
Qualifying change in control termination | | $ | 325,000 | | | $ | 260,000 | | | $ | 22,907 | | | $ | 2,863,516 | | | $ | 3,471,423 | |
Kory Marchisotto | | | | | | | | | | | | | | | | | | | | |
Qualifying non—change in control termination | | $ | 325,000 | | | $ | 260,000 | | | $ | 23,924 | | | | — | | | $ | 608,924 | |
Termination due to death or disability | | | — | | | $ | 260,000 | | | | — | | | | — | | | $ | 260,000 | |
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intro2022 Proxy Statement | board | company64 | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes
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| | | | | | | | | | | | | | | | | | | | |
name | | continued
base
salary | | | pro—rated
annual
cash
incentive | | | continued
benefits (1) | | | equity acceleration (2) | | | total | |
Change in control with equity assumption or substitution | | | — | | | | — | | | | — | | | | — | | | | — | |
Change in control without equity assumption or substitution | | | — | | | | — | | | | — | | | $ | 4,245,821 | | | $ | 4,245,821 | |
Qualifying change in control termination | | $ | 325,000 | | | $ | 260,000 | | | $ | 23,924 | | | $ | 4,245,821 | | | $ | 4,854,745 | |
Rich Baruch(3) | | | | | | | | | | | | | | | | | | | | |
Qualifying non—change in control termination | | $ | 325,000 | | | $ | 260,000 | | | $ | 17,096 | | | | — | | | $ | 602,096 | |
Termination due to death or disability | | | — | | | $ | 260,000 | | | | — | | | | — | | | $ | 260,000 | |
Change in control with equity assumption or substitution | | | — | | | | — | | | | — | | | | — | | | | — | |
Change in control without equity assumption or substitution | | | — | | | | — | | | | — | | | $ | 3,730,808 | | | $ | 3,730,808 | |
Qualifying change in control termination | | $ | 325,000 | | | $ | 260,000 | | | $ | 17,096 | | | $ | 3,730,808 | | | $ | 4,332,904 | |
| (1) | Assumes that the named executive officer elected to receive COBRA premiums for himself or herself and his or her eligible dependents for the applicable post-termination period based on his or her benefit plan participation as of March 31, 2022. As of March 31, 2022, Ms. Fields was only enrolled in our vision health insurance plans and not enrolled in our medical health insurance plan. |
| (2) | Represents (i) for accelerated RSUs, PSAs, and time-vesting restricted stock awards, the market value of time-vesting restricted stock and PSAs and shares underlying RSUs as of March 31, 2020,2022, based on the closing price of our common stock on that date of $9.84$25.83 per share (as reported on the NYSE) and (ii) for accelerated stock options, the positive spread, if any, between the closing price of our common stock on March 31, 20202022 of $9.84$25.83 per share (as reported on the NYSE) and the applicable stock option exercise price. These amounts do not reflect the amount the named executive officer has actually realized or will realize from the equity awards upon the vesting thereof or the sale of the shares underlying such equity awards. |
| (3) | Mr. Baruch departed from the Company effective June 2, 2022. He did not receive any severance benefits in connection with his departure. |
Chief Executive Officer Pay Ratio
Pursuant to Item 402(u) of Regulation S-K and Section 953(b) of the Dodd-Frank Act, presented below is the ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of our median employee (excluding our Chief Executive Officer). The ratio is a reasonable estimate calculated in a manner consistent with SEC requirements. The SEC’s rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below because companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own ratios.
For FY 2022:
the median of the annual total compensation of all employees (other than our Chief Executive Officer) was $123,656;
the annual total compensation of our Chief Executive Officer was $5,234,197; and
based on this information, for FY 2022, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of employees was approximately 42 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
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To identify the median of the annual total compensation of all our employees (and determine the “median employee”) (but not to calculate annual total compensation for purposed of the pay ratio), we used the following methodology and the material assumptions, adjustments, and estimates:
we selected March 31, 2022 (which is a date within the last three months of our last completed fiscal year) (the “median employee determination date”), as the date upon which we would identify the median employee.
as of the median employee determination date, our employee population consisted of 301 individuals (other than our Chief Executive Officer), including our employees located in the U.S. and international locations (including over 70 employees in China). All of these employees were included when identifying our “median employee”.
we used the following compensation measure based on payroll and equity plan records for all active employees as of the median employee determination date:
for permanent, full-time employees (other than hourly employees), we used (i) the employee’s annual base salary for FY 2022 on an annualized basis and as in effect on the median employee determination date, (ii) the employee’s target annual cash incentive amount for FY 2022 (assuming payout at 100% of target), and (iii) the grant date fair value of the employee’s equity awards awarded in FY 2022 (or committed in FY 2022 to award if the employee’s new hire date was after the last equity grant date in FY 2022); and
for hourly and/or temporary employees, we used (i) actual pay for FY 2022, (ii) any bonus paid in FY 2022, and (iii) the grant date fair value of any equity awards granted in FY 2022.
for employees who received compensation denominated in a foreign currency, we converted those amounts to U.S. dollars using the exchange rate as of the median employee determination date.
Our “median employee” (as determined using the methodology and the material assumptions, adjustments, and estimates described above) is an employee located in the U.S.
For purposes of calculating the pay ratio:
| • | | with respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for FY 2022 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K (i.e., on the same basis that we calculated the annual total compensation for our Chief Executive Officer as shown in the Summary Compensation Table); and |
| • | | with respect to the annual total compensation for our Chief Executive Officer, we used the amount reported in the “Total” column for “2022” row in the Summary Compensation Table. |
compensation committee interlocksCompensation Committee Interlocks and insider participation
Insider ParticipationThe individuals who served as members of the Compensation Committee during 2019T and FY 2020 were:
from January 1, 2019 to January 10, 2019, Mr. McGlashan and Mr. Wolford;
from January 10, 2019 to March 13, 2019, Mr. McGlashan (who resigned from our Board on March 13, 2019) and Mr. Perry;
from March 14, 2019 to December 3, 2019, Mr. Ellis (who resigned from our Board on December 3, 2019) and Mr. Perry; and
from December 3, 2019 to March 31, 2020,2022 were Mr. Perry and Ms. Cooks Levitan.
Mr. Mitchell.Each member of the Compensation Committee was determined by our Board to be independent under the applicable rules and regulations of the NYSE relating to compensation committee independence. During 2019T and FY 2020,2022, none of our executive officers served on the compensation committee (or its equivalent) or on the board of directors of another entity where one of our Compensation Committee members was an executive officer.
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introIntro | board | companyBoard | exec. comp. | equity plansCompany | stockholders | auditExec. Comp. | add’l. info | q&aEquity Plans | annexes | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
equity compensation plan information
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information, as of March 31, 2020,2022, with respect to all of the Company’sour equity compensation plans in effect as of March 31, 20202022 (which consist of the 2014 Equity Incentive Plan, the 2016 Equity Incentive Award Plan (as amended), and the 2016 Employee Stock Purchase Plan). No warrants are outstanding under any of the foregoing plans. All of our equity compensation plans that were in effect as of March 31, 20202022 were adopted with the approval of our stockholders.
|
| | | | | | | | | | | |
| plan category | number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | weighted-average exercise price of outstanding options, warrants and rights (b) (1) |
| number of securities remaining available for future issuance under equity compensation plans (c) (2) |
| Equity Compensation Plans Approved by Stockholders | 5,564,253 |
| (3) | $ | 11.16 |
| 9,966,635 |
| (4) (5) |
| Equity Compensation Plans Not Approved by Stockholders | — |
| | — |
| — |
| |
| TOTAL | 5,564,253 |
| (3) | $ | 11.16 |
| 9,966,635 |
| (4) (5) |
| | | | | | | | |
| | | | | | | | |
| (1) | The calculation of the weighted-average exercise price of the outstanding stock options and rights excludes the shares of common stock included in column (a) that are issuable upon the vesting of then-outstanding RSUs and restricted stock awards because RSUs and restricted stock have no exercise price. |
| (2) | Excludes securities reflected in column (a). |
| (3) | Consists of (i) 3,252,485 shares of common stock underlying outstanding options, (ii) 1,124,979 shares of common stock underlying outstanding RSUs, and (iii) 1,128,789 shares of restricted stock awards. |
| (4) | The 2016 Equity Incentive Award Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance pursuant to awards under such plan shall be increased on the first day of each calendar year beginning in 2017 and ending in 2026, equal to the lesser of (i) 4% of the shares of stock outstanding on the last day of the immediately preceding calendar year (starting in calendar year 2021, this reduces to 2% of the shares of stock outstanding on the last day of the immediately preceding calendar year) and (ii) such smaller number of shares of common stock as determined by our Board; provided, however, that no more than 22,627,878 shares of common stock may be issued upon the exercise of incentive stock options. The 2016 Employee Stock Purchase Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance under such plan shall be increased on the first day of each calendar year beginning in 2017 and ending in 2026, equal to the lesser of (i) 1% of the shares of common stock outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by our Board; provided, however, no more than 6,788,363 shares of common stock may be issued under the 2016 Employee Stock Purchase Plan, subject to certain adjustments. |
| (5) | Includes 2,322,861 shares that were available for future issuance as of March 31, 2020 under the 2016 Employee Stock Purchase Plan, which allows eligible employees to purchase shares of common stock with accumulated payroll deductions. The 2016 Employee Stock Purchase Plan, however, has not been implemented. |
| | | | | | | | | | | | | | | |
plan category | | number of securities to
be issued upon
exercise of
outstanding options,
warrants and rights (a) | | weighted-average
exercise price of
outstanding options,
warrants and
rights (b) (1) | | number of securities
remaining available for
future issuance under
equity compensation
plans (c) (2) |
Equity Compensation Plans Approved by Stockholders | | | | 4,104,111 | (3) | | | $ | 12.82 | | | | | 11,645,754 | (4)(5) |
Equity Compensation Plans Not Approved by Stockholders | | | | — | | | | | — | | | | | — | |
TOTAL | | | | 4,104,111 | (3) | | | $ | 12.82 | | | | | 11,645,754 | (4)(5) |
| (1) | The calculation of the weighted-average exercise price of the outstanding stock options and rights excludes the shares of common stock included in column (a) that are issuable upon the vesting of then-outstanding PSUs and RSUs because those types of equity awards have no exercise price. |
| (2) | Excludes securities reflected in column (a). |
| (3) | Consists of (i) 2,547,826 shares of common stock underlying outstanding options, (ii) 1,322,375 shares of common stock underlying outstanding RSUs, and (iii) 233,910 shares of common stock underlying outstanding PSUs (assuming target attainment of performance goals). |
| (4) | The 2016 Equity Incentive Award Plan (as amended) contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance pursuant to awards under such plan shall be increased on the first day of each calendar year ending in 2026, equal to the lesser of (i) 2% of the shares of stock outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by our Board; provided, however, that no more than 22,627,878 shares of common stock may be issued upon the exercise of incentive stock options. The 2016 Employee Stock Purchase Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance under such plan shall be increased on the first day of each calendar year until 2026, equal to the lesser of (i) 1% of the shares of common stock outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by our Board; provided, however, no more than 6,788,363 shares of common stock may be issued under the 2016 Employee Stock Purchase Plan, subject to certain adjustments. |
| (5) | Includes 3,834,628 shares that were available for future issuance as of March 31, 2022 under the 2016 Employee Stock Purchase Plan, which allows eligible employees to purchase shares of common stock with accumulated payroll deductions. The 2016 Employee Stock Purchase Plan, however, has not been implemented. |
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introIntro | board | companyBoard | exec. comp. | equity plansCompany | stockholders | auditExec. Comp. | add’l. info | q&aEquity Plans | annexes | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
our stockholders
beneficial ownershipOUR STOCKHOLDERSBeneficial Ownership of common stock
Common StockThe following table shows certain information regarding the beneficial ownership of the Company’sour common stock as of June 30, 20202022 (except as otherwise noted below) by: (i) each nominee for director; (ii) each of our continuing directors; (iii) each of our named executive officers; (iv) all of our executive officers and directors as a group; and (v) all those known by us to be beneficial owners of more than five percent of our common stock.
Beneficial ownership is determined according to the rules of the SEC and generally means that (i) shares subject to stock options currently exercisable or exercisable within 60 days of the measurement date (regardless of exercise price) and (ii) shares subject to RSUs vesting within 60 days of the measurement date are, in each case, deemed to be outstanding for computing the percentage ownership of the stockholder holding those stock options or RSUs but not for any other stockholder.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o e.l.f. Beauty, Inc., 570 10
th10th Street, Oakland, CA 94607. |
| | | | | | |
| name of beneficial holder | total beneficial ownership (#) |
| total beneficial ownership (%) (1) |
|
| greater than 5% stockholder: | | |
Tarang Amin (2) | 5,888,846 |
| 11.5 | % |
TPG Growth II Advisors, Inc. (3) | 3,676,418 |
| 7.3 | % |
Champlain Investment Partners, LLC (4) | 3,644,615 |
| 7.2 | % |
The Vanguard Group, Inc. (5) | 3,082,137 |
| 6.1 | % |
Marathon Partners Equity Management, LLC (6) | 2,595,200 |
| 5.1 | % |
| named executive officers and directors: | | |
Tarang Amin (2) | 5,888,846 |
| 11.5 | % |
Rich Baruch (7) | 541,100 |
| 1.1 | % |
Mandy Fields (8) | 183,520 |
| * |
|
Josh Franks (9) | 75,780 |
| * |
|
Scott Milsten (10) | 653,010 |
| 1.3 | % |
| Lori Keith | — |
| * |
|
Lauren Cooks Levitan (11) | 66,770 |
| * |
|
Richelle Parham (12) | 22,804 |
| * |
|
Kirk Perry (13) | 54,313 |
| * |
|
Beth Pritchard (14) | 25,194 |
| * |
|
Sabrina Simmons (15) | 57,981 |
| * |
|
Maureen Watson (16) | 57,080 |
| * |
|
Richard Wolford (17) | 71,273 |
| * |
|
executive officers and directors as a group (14) (18) | 7,868,532 |
| 15.0 | % |
| | | |
| | | | | |
| * | Represents ownership of less than 1% of the total outstanding shares of common stock. |
| (1) | Based on 50,439,340 shares of common stock outstanding as of the date indicated above. |
| (2) | Consists of (i) 799,166 shares of common stock (including restricted stock awards) held by Mr. Amin, (ii) 924,015 stock options held by Mr. Amin that are exercisable within 60 days of the date indicated above, (iii) 0 RSUs held by Mr. Amin that will vest within 60 days of the date indicated above, and (iv) 4,165,665 shares of common stock held by various family trusts for which Mr. Amin and his wife serve as co-trustees and over which they each have sole investment and voting power. The figure above does not include PSAs granted on June 1, 2020 that vest based upon performance metrics, which will be reported in connection with achievement. |
| | | | | | | | |
name of beneficial holder | | total beneficial
ownership (#) | | | total
beneficial
ownership
(%) (1) | |
Greater than 5% stockholder: | | | | | | | | |
BlackRock, Inc. (2) | | | 7,219,446 | | | | 13.8% | |
The Vanguard Group, Inc. (3) | | | 5,352,464 | | | | 10.2% | |
Tarang Amin (4) | | | 3,353,905 | | | | 6.3% | |
Champlain Investment Partners, LLC (5) | | | 3,076,950 | | | | 5.9% | |
Victory Capital Management Inc. (6) | | | 2,670,190 | | | | 5.1% | |
Named executive officers and directors: | | | | | | | | |
Tarang Amin (4) | | | 3,353,905 | | | | 6.3% | |
Mandy Fields (7) | | | 80,536 | | | | * | |
Josh Franks (8) | | | 93,959 | | | | * | |
Kory Marchisotto (9) | | | 154,760 | | | | * | |
Rich Baruch (10) | | | 320,112 | | | | * | |
Tiffany Daniele (11) | | | 1,253 | | | | * | |
Lori Keith (12) | | | 13,344 | | | | * | |
Lauren Cooks Levitan (13) | | | 74,406 | | | | * | |
Kenny Mitchell (14) | | | 11,294 | | | | * | |
Kirk Perry (15) | | | 85,017 | | | | * | |
Beth Pritchard (16) | | | 22,953 | | | | * | |
Maureen Watson (17) | | | 44,987 | | | | * | |
Richard Wolford (18) | | | 88,210 | | | | * | |
Executive officers and directors as a group (14) (19) | | | 4,442,175 | | | | 8.2% | |
|
| * | | |
| 63 | 2020 Proxy StatementRepresents ownership of less than 1% of the total outstanding shares of common stock. |
|
| (1) | | | | | | | | | |
intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexesBased on 52,424,282 shares of common stock outstanding as of the date indicated above. |
|
| (2) | | | | | | |
(3) | Based on a Schedule 13G/A filed with the SEC on February 13, 2020January 27, 2022 by TPG Growth II Advisors,BlackRock, Inc. (“TPG Growth”BlackRock”). TPG GrowthBlackRock is the beneficial owner of 3,676,4187,219,446 shares of common stock, has sole voting power over 0 shares of common stock, has shared voting power over 3,676,418 shares of common stock, has sole dispositive power over 0 shares of common stock and has shared dispositive power over 3,676,418 shares of common stock. Based on a Schedule 13G/A filed with the SEC on February 13, 2018 by TPG Growth, David Bonderman, and James G. Coulter, Mr. Bonderman and Mr. Coulter, as the sole shareholders of TPG Growth, may be deemed to beneficially own the shares of common stock beneficially owned by TPG Growth (but Mr. Bonderman and Mr. Coulter disclaim any such beneficial ownership except to the extent of their pecuniary interest therein). The shares of common stock beneficially owned by TPG Growth, Mr. Bonderman, and Mr. Coulter are held directly by TPG elf Holdings, L.P. (of which TPG Growth is the general partner). TPG Growth’s, Mr. Bonderman’s, and Mr. Coulter’s address is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. |
(4) | Based on a Schedule 13G/A filed with the SEC on February 13, 2020 by Champlain Investment Partners, LLC (“Champlain”). Champlain is the beneficial owner of 3,644,615 shares of common stock, has sole voting power over 2,678,3607,176,376 shares of common stock, has shared voting power of 0 shares of common stock, has sole dispositive power over 3,644,6157,219,446 shares of common stock, and has shared dispositive power over 0 shares of common stock. BlackRock’s address is 55 East 52nd Street, New York, NY 10055. |
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| (3) | Based on a Schedule 13G/A filed with the SEC on January 10, 2022 by The Vanguard Group, Inc. (“Vanguard”). Vanguard is the beneficial owner of 5,352,464 shares of common stock, has sole voting power over 0 shares of common stock, has shared voting power of 90,966 shares of common stock, has sole dispositive power over 5,224,980 shares of common stock, and has shared dispositive power over 127,484 shares of common stock. Vanguard’s address is 100 Vanguard Blvd., Malvern, PA 19355. |
| (4) | Consists of (i) 216,034 shares of common stock (including restricted stock awards) held by Mr. Amin, (ii) 1,228,125 stock options held by Mr. Amin that are exercisable within 60 days of the date indicated above, (iii) 0 RSUs held by Mr. Amin that will vest within 60 days of the date indicated above, and (iv) 1,909,746 shares of common stock held by various family trusts for which Mr. Amin and his wife serve as co-trustees and over which they each have sole investment and voting power. |
| (5) | Based on a Schedule 13G/A filed with the SEC on February 11, 2022 by Champlain Investment Partners, LLC (“Champlain”). Champlain is the beneficial owner of 3,076,950 shares of common stock, has sole voting power over 2,397,905 shares of common stock, has shared voting power of 0 shares of common stock, has sole dispositive power over 3,076,950 shares of common stock, and has shared dispositive power over 0 shares of common stock. Champlain’s address is 180 Battery St., Burlington, VermontVT 05401. |
(5)(6) | Based on a Schedule 13G13G/A filed with the SEC on February 11, 20202, 2022 by The Vanguard Group,Victory Capital Management Inc. (“Vanguard”Victory”). VanguardVictory is the beneficial owner of 3,082,1372,670,190 shares of common stock, has sole voting power over 28,8832,670,190 shares of common stock, has shared voting power of 1,8000 shares of common stock, has sole dispositive power over 3,054,4832,670,190 shares of common stock, and has shared dispositive power over 27,6540 shares of common stock. Vanguard’sVictory’s address is 100 Vanguard Blvd.4900 Tiedeman Rd., Malvern, PA 19355.4th Floor, Brooklyn, OH 44144. |
(6) | Based on a Schedule 13D/A filed with the SEC on June 1, 2020 by Marathon Partners L.P. (“Partners Fund”), Marathon Focus Fund L.P. (“Focus Fund”), Marathon Partners LUX Fund, L.P. (“Lux Fund”), Cibelli Research & Management, LLC (“Cibelli Research”), Marathon Partners Equity Management, LLC (“Marathon Partners”), and Mario D. Cibelli (collectively with Partners Fund, Focus Fund, Lux Fund, Cibelli Research and Marathon Partners, “Marathon”). Partners Fund is the beneficial owner of 1,250,000 shares of common stock (which includes 100,000 shares underlying certain call options), has sole voting power over 0 shares of common stock, has shared voting power over 1,250,000 shares of common stock (which includes 100,000 shares underlying certain call options), has sole dispositive power over 0 shares of common stock, and has shared dispositive power over 1,250,000 shares of common stock (which includes 100,000 shares underlying certain call options). Focus Fund is the beneficial owner of 160,000 shares of common stock (which includes 10,000 shares underlying certain call options), has sole voting power over 0 shares of common stock, has shared voting power over 160,000 shares of common stock (which includes 10,000 shares underlying certain call options), has sole dispositive power over 0 shares of common stock, and has shared dispositive power over 160,000 shares of common stock (which includes 10,000 shares underlying certain call options). Lux Fund is the beneficial owner of 1,175,000 shares of common stock (which includes 125,000 shares underlying certain call options), has sole voting power over 0 shares of common stock, has shared voting power over 1,175,000 shares of common stock (which includes 125,000 shares underlying certain call options), has sole dispositive power over 0 shares of common stock, and has shared dispositive power over 1,175,000 shares of common stock (which includes 125,000 shares underlying certain call options). Cibelli Research is the beneficial owner of 1,335,000 shares of common stock (which includes 135,000 shares underlying certain call options), has sole voting power over 0 shares of common stock, has shared voting power over 1,335,000 shares of common stock (which includes 135,000 shares underlying certain call options), has sole dispositive power over 0 shares of common stock, and has shared dispositive power over 1,335,000 shares of common stock (which includes 135,000 shares underlying certain call options). Marathon Partners is the beneficial owner of 2,585,000 shares of common stock (which includes 235,000 shares underlying certain call options), has sole voting power over 0 shares of common stock, has shared voting power over 2,585,000 shares of common stock (which includes 235,000 shares underlying certain call options), has sole dispositive power over 0 shares of common stock, and has shared dispositive power over 2,585,000 shares of common stock (which includes 235,000 shares underlying certain call options). Mr. Cibelli is the beneficial owner of 2,595,200 shares of common stock (which includes 235,000 shares underlying certain call options), has sole voting power over 10,200 shares of common stock, has shared voting power over 2,585,000 shares of common stock (which includes 235,000 shares underlying certain call options), has sole dispositive power over 10,200 shares of common stock, and has shared dispositive power over 2,585,000 shares of common stock (which includes 235,000 shares underlying certain call options). Cibelli Research, as the general partner of each of Focus Fund and Lux Fund, may be deemed the beneficial owner of the shares of common stock owned by each of Focus Fund and Lux Fund. Marathon Partners, as the investment manager of each of Partners Fund, Focus Fund and Lux Fund and the general partner of Partners Fund, may be deemed the beneficial owner of the shares of common stock owned by each of Partners Fund, Focus Fund and Lux Fund. Mr. Cibelli, as the managing member of each of Cibelli Research and Marathon Partners, may be deemed the beneficial owner of the shares of common stock owned by each of Partners Fund, Focus Fund and Lux Fund. Each of Partners Fund, Focus Fund, LUX Fund, Cibelli Research, Marathon Partners, and Mr. Cibelli disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein. Each of Partners Fund’s, Focus Fund’s, Lux Fund’s, Cibelli Research’s, Marathon Partners’, and Mr. Cibelli’s address is One Grand Central Place, 60 East 42nd Street, Suite 2306, New York, New York 10165. |
| (7) | Consists of (i) 179,611 shares of common stock (including restricted stock awards) held by Mr. Baruch, (ii) 361,489 stock options held by Mr. Baruch that are exercisable within 60 days of the date indicated above and (iii) 0 RSUs held by Mr. Baruch that will vest within 60 days of the date indicated above. The figure above does not include PSAs granted on June 1, 2020 that vest based upon performance metrics, which will be reported upon achievement. |
(8) | Consists of (i) 162,58059,596 shares of common stock (including restricted stock awards) held by Ms. Fields, (ii) 20,940 stock options held by Ms. Fields that are exercisable within 60 days of the date indicated above and (iii) 0 RSUs held by Ms. Fields that will vest within 60 days of the date indicated above. The figure above does not include PSAs granted on June 1, 2020 that vest based upon performance metrics, which will be reported in connection with achievement. |
(9)(8) | Consists of (i) 75,78064,559 shares of common stock (including restricted stock awards) held by Mr. Franks, (ii) 029,400 stock options held by Mr. Franks that are exercisable within 60 days of the date indicated above and (iii) 0 RSUs held by Mr. Franks that will vest within 60 days of the date indicated above. The figure above does not include PSAs granted on June 1, 2020 that vest based upon performance metrics, which will be reported in connection with achievement. |
(10)(9) | Consists of (i) 226,54897,210 shares of common stock (including restricted stock awards) held by Mr. Milsten,Ms. Marchisotto, (ii) 374,09957,550 stock options held by Mr. MilstenMs. Marchisotto that are exercisable within 60 days of the date indicated above and (iii) 0 RSUs held by Mr. MilstenMs. Marchisotto that will vest within 60 days of the date indicated above, and (iv) 52,363above. |
| (10) | Consists of (i) 90,406 shares of common stock held by Mr. Baruch, (ii) 229,706 stock options held by Mr. Baruch that are exercisable within 60 days of the Milsten/Conner Trust dated October 17, 2008 for whichdate indicated above and (iii) 0 RSUs held by Mr. Milsten and his wife serve as co-trustees and over which they each have sole investment and voting power. The figure above does not include PSAs granted on June 1, 2020Baruch that will vest based upon performance metrics, which will be reported in connection with achievement.within 60 days of the date indicated above. |
| (11) | Consists of (i) 17,8670 shares of common stock held by Ms. Daniele, (ii) 0 stock options held by Ms. Daniele that are exercisable within 60 days of the date indicated above, and (iii) 1,253 RSUs held by Ms. Daniele that will vest within 60 days of the date indicated above. |
| (12) | Consists of (i) 8,682 shares of common stock held by Ms. Keith, (ii) 0 stock options held by Ms. Keith that are exercisable within 60 days of the date indicated above, and (iii) 4,662 RSUs held by Ms. Keith that will vest within 60 days of the date indicated above. |
| (13) | Consists of (i) 35,244 shares of common stock held by Ms. Cooks Levitan, (ii) 34,500 stock options held by Ms. Cooks Levitan that are exercisable within 60 days of the date indicated above, (6,900 of the stock options are unvested but permit early exercise), and (iii) 14,4034,662 RSUs held by Ms. Cooks Levitan that will vest within 60 days of the date indicated above. |
|
| (14) | | |
2020 Proxy Statement | 64 | |
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
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(12) | Consists of (i) 8,4014,967 shares of common stock held by Ms. Parham,Mr. Mitchell, (ii) 0 stock options held by Ms. ParhamMr. Mitchell that are exercisable within 60 days of the date indicated above, and (iii) 14,4036,327 RSUs held by Ms. ParhamMr. Mitchell that will vest within 60 days of the date indicated above. |
(13)(15) | Consists of (i) 15,09544,024 shares of common stock held by Mr. Perry, (ii) 20,70034,500 stock options held by Mr. Perry that are exercisable within 60 days of the date indicated above, and (iii) 18,5186,493 RSUs held by Mr. Perry that will vest within 60 days of the date indicated above. |
(14)(16) | Consists of (i) 10,79118,291 shares of common stock held by Ms. Pritchard, (ii) 0 stock options held by Ms. Pritchard that are exercisable within 60 days of the date indicated above, and (iii) 14,4034,662 RSUs held by Ms. Pritchard that will vest within 60 days of the date indicated above. |
(15)(17) | Consists of (i) 9,078 shares of common stock held by Ms. Simmons, (ii) 34,500 stock options held by Ms. Simmons that are exercisable within 60 days of the date indicated above (6,900 of the stock options are unvested but permit early exercise), and (iii) 14,403 RSUs held by Ms. Simmons that will vest within 60 days of the date indicated above. |
(16) | Consists of (i) 4,227 shares of common stock held by Ms. Watson, (ii) 34,500 stock options held by Ms. Watson that are exercisable within 60 days of the date indicated above, and (iii) 18,3536,260 RSUs held by Ms. Watson that will vest within 60 days of the date indicated above. |
(17)(18) | Consists of (i) 18,04947,050 shares of common stock held by Mr. Wolford, (ii) 34,500 stock options held by Mr. Wolford that are exercisable within 60 days of the date indicated above, and (iii) 18,7246,660 RSUs held by Mr. Wolford that will vest within 60 days of the date indicated above. |
(18)(19) | Consists of (i) 5,894,5012,612,761 shares of common stock (including restricted stock awards held by our executive officers), (ii)1,860,824 1,788,435 stock options that are exercisable within 60 days of the date indicated above, and (iii) 113,20740,979 RSUs that will vest within 60 days of the date indicated above. The figure above does not include PSAs granted on June 1, 2020 to our executive officers that vest based upon performance metrics, which will be reported upon achievement. |
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| | 69 | | 2022 Proxy Statement |
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| Intro | | Board | | Company | | Exec. Comp. | | Equity Plans | | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
stockholder engagement
The Company isStockholder EngagementWe are committed to acting in the best interests of itsour stockholders and viewsview ongoing dialogue with stockholders as a critical component of the Company’sour corporate governance program. Members of management and our Board actively engage with the Company’sour stockholders through in-person and telephonic meetings throughout the year in order to fully understand their viewpoints concerning the Company,our company, to garner feedback on areas for improvement, and to help our stockholders better understand our performance and long-term strategic plan.
Management provides our Board with regular updates regarding its stockholder outreach efforts as well as feedback received from stockholders, which helps to influence our policies and practices. We believe our regular engagement with stockholders fosters an open exchange of ideas and perspectives for both the Companye.l.f. Beauty and its stockholders.
During FY 2020, the Company2022, we actively engaged with approximately 70% of our top 20 stockholders representing more thanwho collectively hold approximately 50% of the Company’sour outstanding common stock in order to understand their viewpoints concerning a number of topics, including topics relating to the Company’sour strategic direction (such as our key strategic imperatives), the Company’s opportunities for growth, the Company’s capital allocation strategies, the Company’s executive compensation programs and policies, and the Company’s corporate governance profile and policies.
stockholder proposals
See under the heading “Executive Compensation-Compensation Discussion and Analysis-Executive Summary—The Compensation Committee’s Continued Engagement with Stockholders” for information regarding the Compensation Committee’s outreach to obtain our stockholders’ insights on our executive compensation program.Stockholders may communicate with our Board as set forth under the heading “Our Board of Directors-How You can Communicate with our Board” or may otherwise communicate with us by contacting our investor relations department at:
e.l.f. Beauty, Inc.
ATTN: Investor Relations
570 10th Street
Oakland, California 94607
ir@elfbeauty.com
Stockholder Proposals
In the event that a stockholder desires to have a proposal considered for presentation at the 20212023 annual meeting of stockholders and included in the Company’sour proxy statement and form of proxy used in connection with the 20212023 annual meeting of stockholders, the proposal must be forwarded in writing to our Corporate Secretary and it must comply with the requirements of SEC Rule 14a-8.
Under SEC Rule 14a-8, stockholder proposals must be received not less than 120 calendar days prior to the one-year anniversary of the date the proxy statement was released to stockholders in connection with the previous year'syear’s annual meeting, which for the 20212023 annual meeting of stockholders will be March 19, 2021. However, if we hold the 2021 annual meeting of stockholders more than 30 days before, or more than 60 days after, August 27, 2021 (the one-year anniversary of the 2020 annual meeting), we will disclose the deadline by which stockholder proposals to be included in
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intro | board | company | exec. comp. | equity plans | stockholders | audit | add’l. info | q&a | annexes |
our proxy materials must be received under Item 5 of Part II of our earliest possible Quarterly Report on Form 10-Q or, if impracticable, by any other means reasonably determined to inform our stockholders.
15, 2023.If a stockholder, rather than including a proposal in our proxy statement as discussed above, commences his or her own proxy solicitation for the 20212023 annual meeting of stockholders or proposes business for consideration at the 20212023 annual meeting of stockholders, we must receive notice of the proposal between April 29, 202127, 2023 and May 29, 2021.27, 2023. However, if we hold the 20212023 annual meeting of stockholders more than 30 days before, or more than 60 days after, August 27, 202125, 2023 (the one-year anniversary of the 20202022 annual meeting), we must receive notice of the proposal no later than the 90th day prior to the date of the 20212023 annual meeting of stockholders or, if later, the 10th day following the day
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we first publicly disclose the date of the 20212023 annual meeting of stockholders. Any such proposal must comply with the requirements of our bylaws, which contain additional requirements about advance notice of stockholder proposals.
Proposals and notices should be submitted in writing to:
e.l.f. Beauty, Inc.
ATTN: Corporate Secretary
570 10th Street
Oakland, California 94607
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introIntro | board | companyBoard | exec. comp. | equity plansCompany | stockholders | auditExec. Comp. | add’l. info | q&aEquity Plans | annexes | Stockholders | | Audit | | Add’l. Info | | Q&A | | Annexes |
audit matters
AUDIT MATTERS |
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proposal 4:Proposal 3: | ratification | Ratification of the appointmentAppointment of independent registered public accounting firmIndependent Registered Public Accounting Firm |
þ
FOR | | Our Board unanimously recommends a vote “FOR” the appointment of Deloitte as our independent registered public accounting firm for FY 2021.2023.Our Board, based on the Audit Committee’s assessment of Deloitte’s qualifications and performance, believes the appointment of Deloitte for FY 20212023 is in the best interests of the Company’sour stockholders. |
whatWhat am iI voting on?
Stockholders are being asked to ratify the appointment of Deloitte by the Audit Committee as the Company’se.l.f. Beauty’s independent registered public accounting firm for FY 2021.
2023.In making its selection, the Audit Committee annually reviews Deloitte’s independence, periodically considers whether to rotate the independent registered public accounting firm and considers the advisability and potential impact of selecting a different independent registered accounting firm. Additionally, the Audit Committee monitors the rotation of the partners assigned to our audit engagement team in accordance with applicable laws and rules.
Representatives of Deloitte are expected to attend the 20202022 annual meeting. They will have an opportunity to make a statement if they desire and are expected to be available to respond to appropriate questions.
Neither our bylaws nor other governing documents or law require stockholder ratification of the selection of Deloitte as the Company’sour independent registered public accounting firm. However, our Board is submitting the selection of Deloitte as the Company’sour independent registered public accounting firm to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its sole discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Companye.l.f. Beauty and its stockholders.
whatWhat is the required vote?
Required Vote?The appointment will be ratified if a majority of votes cast (meaning the number of shares voted “For” must exceed the number of shares voted “Against” in order for this proposal to be approved). Abstentions and broker non-votes are not considered votes cast for this proposal and will have no effect on the vote for this proposal.
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audit feesAudit Fees and services
ServicesThe following table shows the aggregate fees billed to the Companyus by Deloitte, the Company’sour independent registered public accounting firm, for FY 2020, 2019T,2022 and 2018.FY 2021. All fees described were pre-approved by the Audit Committee.
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| type of fees | FY 2020 |
| | 2019T |
| | 2018 |
|
Audit Fees (1) | $ | 985,000 |
| | $ | 365,300 |
| | $ | 1,023,500 |
|
Audit-Related Fees (2) | — |
| | — |
| | $ | 112,432 |
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Tax Fees (3) | $ | 17,825 |
| | $ | 8,320 |
| | $ | 18,491 |
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| All Other Fees | — |
| | — |
| | — |
|
| TOTAL FEES | $ | 1,002,825 |
| | $ | 373,620 |
| | $ | 1,154,423 |
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| (1) | Includes fees related to financial statement audit, quarterly reviews, registration statements, and China statutory audit. |
| (2) | For 2018, includes fees related to M&A due diligence services. |
| (3) | Includes fees related to general tax consulting, transfer pricing, and uniform capitalization services. |
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type of fees | | FY 2022 | | | FY 2021 | |
Audit Fees (1) | | $ | 1,392,250 | | | $ | 1,559,500 | |
Audit-Related Fees | | | — | | | | — | |
Tax Fees (2) | | $ | 26,250 | | | $ | 20,413 | |
All Other Fees (3) | | $ | 425,000 | | | | — | |
Total | | $ | 1,843,500 | | | $ | 1,579,913 | |
| (1) | Includes fees related to financial statement audit, quarterly reviews, and China statutory audit. |
| (2) | Includes fees related to general tax consulting, transfer pricing, and uniform capitalization services. |
| (3) | Includes fees related to M&A due diligence services. |
pre-approval policyPre-Approval
PolicyThe Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by the Company’sour independent registered public accounting firm. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. Actual amounts billed, to the extent in excess of any estimated amounts, are periodically reviewed and approved by the Audit Committee.
The Audit Committee has determined that the rendering of the services other than audit services by Deloitte is compatible with maintaining the principal accountant’s independence.
audit committee report
Audit Committee ReportThe Audit Committee is comprised of independent directors as required by the listing standards of the NYSE and the SEC rules. At the time of approval of this report, the members of the Audit Committee arewere Ms. Sabrina Simmons,Lauren Cooks Levitan, Ms. Richelle Parham and Mr. Richard Wolford. The Audit Committee operates pursuant to a written charter adopted by the Board.
The role of the Audit Committee is to oversee the Company’se.l.f. Beauty’s financial reporting process on behalf of the Board. Management of the Companye.l.f. Beauty has the primary responsibility for the Company’se.l.f. Beauty’s financial statements as well as the Company’se.l.f. Beauty’s financial reporting process and principles, internal controls, and disclosure controls. The independent auditors are responsible for performing an audit of the Company’se.l.f. Beauty’s financial statements and the effectiveness of the Company’se.l.f. Beauty’s internal controls over financial reporting in accordance with standards established by the Public Company Accounting Oversight Board (the “PCAOB”).
In this context, the Audit Committee has reviewed and discussed the audited financial statements of the Company as of and for the transition period ended March 31, 2019 ande.l.f. Beauty as of and for the fiscal year ended March 31, 20202022 with
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management and the independent auditors. The Audit Committee has discussed with the independent auditors the matters required to be discussed by the PCAOB.
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In addition, the Audit Committee has received the written disclosures and the letter from the independent auditors required by the applicable requirements of the PCAOB and the SEC relating to auditor independence communications, as currently in effect, and it has discussed with the auditors their independence from the Company.e.l.f. Beauty. The Audit Committee has also considered whether the independent auditor’s provision of non-audit services to the Companye.l.f. Beauty is compatible with maintaining the auditor’s independence.
Based on the reports and discussions above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’se.l.f. Beauty’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020.
Sabrina Simmons, Chair
Richelle Parham
ChairLauren Cooks Levitan
The report of the Audit Committee will not be deemed to be “soliciting material” or to otherwise be considered “filed” with the SEC, nor shall such information be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Companye.l.f. Beauty specifically incorporates it by reference into such filing.
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additional information
important information regardingADDITIONAL INFORMATION
Important Information Regarding the virtual meeting
Due to the COVID-19 outbreak and to support the health and well-being of our stockholders, employees, and community, the 2020Virtual MeetingThe 2022 annual meeting will only be conducted virtually online. There is no physical location for the 20202022 annual meeting.
To access the 20202022 annual meeting, please visit
www.meetingcenter.io/285699127 meetnow.global/M9M72JX on August 27, 202025, 2022.The password for the 2020 annual meeting is “ELF2020”.Stockholders of record as of July 6, 20202022 and beneficial owners of the Company’sour common stock as of July 6, 20202022 may attend, participate in, and vote by online ballot at, the 20202022 annual meeting. Instructions for registering for, and participating in, the 20202022 annual meeting are detailed below. Guests and other stockholders may listen to (but not participate in)attend the 20202022 annual meeting by visiting the virtual meeting website and joining as a guest.
stockholdersguest, however, may not have the opportunity to ask questions at the 2022 annual meeting.Stockholders of record
RecordYou are a stockholder of record if your shares were registered directly in your name with the transfer agent for our common stock, Computershare, Inc. (“Computershare”), as of July 6, 2020.2022. Stockholders of record as of July 6, 20202022 do not need to register to participate in or vote by online ballot at the 20202022 annual meeting. Your individual control number, which you will need to participate in or vote by online ballot at the virtual meeting, is included on your proxy card or Notice of Internet Availability of Proxy Materials.
beneficial owners
Beneficial Owners
If your shares were held not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, trustee, or nominee (generally referred to in this proxy statement as a “broker”), as of July 6, 2020,2022, then you are the beneficial owner of shares held in “street name”.
Beneficial owners as of July 6, 20202022 must register in advance (and obtain an individual control number) if they wish to participate in or vote by online ballot at the 20202022 annual meeting.
To register for the 20202022 annual meeting and receive your individual control number, you must first obtain a “legal proxy” from your broker—followbroker-follow the instructions included in the voting instruction form or contact your broker to request a legal proxy.
The voting instruction form you received in connection with the 20202022 annual meeting is not a legal proxy. Please note requesting a legal proxy from your broker will revoke any vote by proxy you might have previously executed, and your shares will only be represented with respect to the proposals if you vote by online ballot at the 20202022 annual meeting.You must submit your legal proxy showing your ownership of the Company’sour common stock as of July 6, 2020,2022, and your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than August 24, 2020.23, 2022. You will receive a confirmation of your registration by email after Computershare receives your registration information.
Requests for registration for the 2022 annual meeting should be directed to Computershare as follows:
| • | | By email. Forward the email from your broker (or attach an image of your legal proxy showing your ownership of our common stock as of July 6, 2022) to legalproxy@computershare.com. Please include your name and email address as well. |
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Requests for registration for the 2020 annual meeting should be directed to | • | | By mail. Send a copy of your legal proxy showing your ownership of our common stock as of July 6, 2022 and your name and email address to: |
Computershare as follows:
By email. Forward the email from your broker (or attach an image of your legal proxy showing your ownership of the Company’s common stock as of July 6, 2020) to legalproxy@computershare.com. Please include your name and email address as well.
By mail. Send a copy of your legal proxy showing your ownership of the Company’s common stock as of July 6, 2020 and your name and email address to:
Computershare
e.l.f. Beauty Legal Proxy
Providence, RI 02940-3001
other businessOther Business for consideration
ConsiderationOur Board does not presently intend to bring any business other than the proposals listed in the Notice of Annual Meeting of Stockholders and this proxy statement before the 20202022 annual meeting, and so far as is known to it, nodoes not know of any other business is to be brought before the 20202022 annual meeting except as listed in the Notice of Annual Meeting of Stockholders and this proxy statement. As toIf any additional business that may properly come before the 20202022 annual meeting, however, it is the intention of each person named as a proxy holder in the proxy card towill vote on those mattersany such business in accordance with his or her best judgment.
no incorporationNo Incorporation by reference
ReferenceIn our filings with the SEC, information is sometimes “incorporated by reference.” This means that we refer you to information previously filed with the SEC that should be considered as part of the particular filing. Website addresses includedAs provided under SEC rules, the Audit Committee Report and the Compensation Committee Report contained in this proxy statement specifically are not incorporated by reference into any other filings with the SEC, are not deemed to be “soliciting material”, and are not deemed “filed” with the SEC, except to the extent that we specifically incorporate any such material by reference into that other filing.
In addition, we have included certain website addresses in this proxy statement. Those website addresses are intended to provide inactive, textual references only and the information on those websites is not part of this proxy statement.
annual report
Annual Report
We encourage our stockholders to read our annual report for the fiscal year ended March 31, 2020FY 2022 (the “2020“2022 Annual Report”) for information regarding our performance in FY 2020.2022. Our 20202022 Annual Report has been made available to our stockholders at
www.edocumentview.com/ELF and posted on our investor relations website at https://investor.elfbeauty.com/stock-and-financial/latest-annual-report-and-proxy-statementinvestor.elfcosmetics.com/stock-and-financial/Annual-Report-and-Proxy-Statement.The CompanyWe will provide, without charge, a copy of our 20202022 Annual Report (including the financial statements and the financial statement schedules but excluding the exhibits) upon the written request of any stockholder. Requests for our 20202022 Annual Report can be made by writing to our investor relations department at:
e.l.f. Beauty, Inc.
ATTN: Investor Relations
570 10th Street
Oakland, California 94607
ir@elfbeauty.com
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ATTN: Investor Relations
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expensesExpenses of solicitation
SolicitationThe proxy is solicited on behalf of our Board, and we are paying for the cost of the proxy solicitation process. Proxies may be solicited by mail, the Internet, telephone, personal contact, email, other electronic channels of communication, or otherwise, and may also be solicited by directors, officers and employees. No additional compensation will be paid to our directors, officers or other employees for soliciting proxies.
We also will request brokers and fiduciaries to forward proxy materials to the beneficial owners of shares of our stock as of the record date and will reimburse them for the cost of forwarding the proxy materials in accordance with customary practice.
We have retainedStockholders Sharing the services of Innisfree M&A Incorporated (“Innisfree”), a professional proxy solicitation firm, to aid in the solicitation of proxies. Innisfree may solicit proxies by mail, the Internet, telephone, personal contact, email, other electronic channels of communication, or otherwise. We expect to pay Innisfree a fee of $20,000 for its solicitation services.
stockholders sharing the same address
Same AddressDue to the small number of stockholders of record and cost to implement, we no longer provide “householding” of our proxy materials. Every stockholder of record, regardless of whether that stockholder of record has the same address and last name of another stockholder of record, will receive a Notice of Internet Availability of Proxy Materials or, if requested, one copy of our proxy materials.
If you are a beneficial owner of shares, and you share an address with other beneficial owners, your broker is permitted to deliver a single copy of our proxy materials to your address, unless you otherwise request separate copies from your broker.
forward-looking statements
Forward-Looking Statements
This proxy statement contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on management'smanagement’s current expectations, estimates, forecasts, projections, beliefs and assumptions and are not guarantees of future performance. Although the Company believeswe believe that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, the risks and uncertainties that are described in our 20202022 Annual Report, as updated from time to time in the Company'sour SEC filings. Potential investors are urged to consider these factors carefully in evaluating the
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forward-looking statements. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company assumeswe assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
note regarding non-GAAP financial measures
Note Regarding Non-GAAP Financial Measures
This proxy statement includes references to non-GAAP measures, including the year over year percentage increase in net sales (excluding the contribution from e.l.f. retail stores)Adjusted Net Income and Adjusted EBITDA. The Company presentsWe present these non-GAAP measures because itsour management uses them as supplemental measures in assessing itsour operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’sour performance. The non-GAAP measures included in this proxy statement are not measurements of financial performance under GAAP and they should not be considered as alternatives to measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company’sour future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company’sour results as reported under GAAP. The Company’sOur definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation. Net sales (excluding the contribution from e.l.f. retail stores) excludes net sales from the Company's 22 e.l.f. retail stores which were closed in February 2019. Adjusted EBITDA excludes costs or gains related to restructuring of operations, stock-based compensation and other non-cash and non-recurring costs.
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Adjusted net income excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt, other non-cash and non-recurring costs, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-cash or non-recurring costs include proxy contest expenses, pre-launch costs to develop our brand, Keys Soulcare, acquisition-related costs for Well People, and costs related to the automation of certain warehouse and distribution activities.
Adjusted EBITDA excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt and other non-cash and non-recurring costs. Such other non-cash or non-recurring costs include proxy contest expenses and other legal settlements, pre-launch costs to develop our brand, Keys Soulcare, acquisition-related costs for Well People, third-party costs related to M&A due diligence, costs related to the automation of certain warehouse and distribution activities, and amortization of internal-use software costs related to cloud applications.
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questions and answers
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whyWhy did iI receive a notice regarding the availability of proxy materials on the internetInternet instead of a full set of proxy materials?
Under SEC rules, we have elected to provide access to our proxy materials over the Internet.
On or about July 17, 2020,13, 2022, we will mail a Notice of Internet Availability of Proxy Materials to our stockholders of record as of July 6, 20202022 directing stockholders to a website where they can access the proxy materials and view instructions on how to vote their shares via the Internet.
If you received the Notice of Internet Availability of Proxy Materials only and would like to receive a paper copy of the proxy materials, please follow the instructions in the Notice of Internet Availability of Proxy Materials to request that a paper copy be mailed to you. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact of the 20202022 annual meeting.
whatWhat are the proxy materials for?
These proxy materials are being made available to you in connection with the solicitation of proxies by our Board for the 20202022 annual meeting to be held virtually on August 27, 202025, 2022 at 8:30 a.m. Pacific time.
whatWhat does it mean if iI receive more than one noticeNotice of internet availabilityInternet Availability of proxy materialsProxy Materials or more than one set of proxy materials?
If you receive more than one Notice of Internet Availability of Proxy Materials or one set of proxy
materials, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions in each Notice of Internet Availability of Proxy
Materials or each set of proxy materials to ensure that all of your shares are voted.
howHow can iI access the proxy materials over the internet?
Internet?The proxy materials are available at
www.edocumentview.com/ELF. whatWhat information is contained in the proxy materials?
The information included in this proxy statement relates to the election of directors and other proposals to be voted upon at the 20202022 annual meeting, the voting process, the compensation of directors and our named executive officers, and certain other required information. The proxy materials also include our 20202022 Annual Report.
isIs there a physical location for the 20202022 annual meeting?
No. The 20202022 annual meeting will only be held virtually online. To access the 20202022 annual meeting, please visit
www.meetingcenter.io/285699127 meetnow.global/M9M72JX on August 27, 202025, 2022.The password for the 2020 annual meeting is “ELF2020”.
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whoWho may attend the 20202022 annual meeting?
All stockholders of record as of July 6, 2020,2022, beneficial owners of shares as of July 6, 2020,2022, holders of valid proxies for those stockholders, and other persons invited by us may attend the 20202022 annual meeting.
You are a stockholder of record if your shares were registered directly in your name with the transfer agent for our common stock, Computershare, as of July 6, 2020.2022.
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If your shares were held not in your name, but rather in an account at a broker, as of July 6, 2020,2022, then you are the beneficial owner of shares held in “street name” and the broker holding your account is considered to be the stockholder of record for purposes of voting at the 20202022 annual meeting.
whatWhat proposals are being voted on at the 20202022 annual meeting?
There are fourthree proposals to be voted on at the 20202022 annual meeting:
whatWhat if another matter (other than the proposals listed in this proxy statement) is properly brought before the 20202022 annual meeting?
Our Board knows of no other matters that will be presented for consideration at the 20202022 annual meeting. If any other matters are properly brought before the 20202022 annual meeting or any postponement or adjournment thereof, it is the intention of each person named as a proxy holder in the proxy card to vote on those matters in accordance with his or her best judgment.
whatWhat happens if a nominee is unable to stand for election?
If a nominee is unable to stand for election, our Board may reduce the number of directors on our Board or it may name a substitute nominee. If a substitute is named, shares represented by properly executed proxies may be voted for the substitute nominee.
howHow does the boardBoard recommend iI vote?
Our Board unanimously recommends that you vote your shares as follows:
“FOR” all of the three Class IIII director nominees named in this proxy statement and listed on the proxy card or voting instruction form (Proposal 1);
“FOR” the approval, on an advisory basis, of the compensation for our named executive officers (Proposal 2);
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“1 YEAR” for the frequency of the advisory vote on the compensation for our named executive officers (Proposal 3); and
“FOR” the ratification of the appointment of Deloitte as our independent registered public accounting firm for FY 20212023 (Proposal 4)3).
YES, YOUR VOTE IS IMPORTANT.
We are required to obtain stockholder approval for the election of Class IIII directors and other important matters. Each share of common stock is entitled to one vote and every share voted has the same weight. In order for the Companye.l.f. Beauty to obtain the necessary stockholder approval of proposals, a “quorum” of stockholders (a majority of the issued and outstanding shares entitled to vote at the meeting) must be represented at the 20202022 annual meeting in person or by proxy.
If a quorum is not obtained, the Companye.l.f. Beauty must postpone the 20202022 annual meeting and solicit additional proxies. This is an expensive and time-consuming process.
Voting by proxy is important for us to obtain a quorum, hold the meeting, and complete the stockholder vote.
how
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You may vote your shares by proxy through the Internet, by proxy by telephone, or by proxy by mail as indicated on the Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form. You may also vote using the online ballot at the 20202022 annual meeting. All shares entitled to vote and represented by properly executed proxies received before the polls are closed at the 20202022 annual meeting, and not revoked or superseded, will be voted at the 20202022 annual meeting in accordance with the instructions indicated on those proxies.
Whether or not you plan to attend the 20202022 annual meeting, we urge you to vote by proxy through the Internet, by proxy by telephone, or using a proxy card or voting instruction form to ensure your vote is counted. You may still attend the 20202022 annual meeting and vote by ballot even if you have already voted by proxy.
Voting procedures based on how your shares are held are described below.
To vote by proxy through the Internet, go to www.envisionreports.com/ELF. You will be asked to provide your individual control number.
| • | | To vote by proxy through the Internet, go to www.envisionreports.com/ELF. You will be asked to provide your individual control number. |
To vote by proxy by telephone, call 1-800-652-VOTE (8683) within the U.S.,United States, U.S. territories, and Canada.
To vote by mail, please request a full set of proxy materials (if you do not already have a full set) and then simply complete, sign, and date the enclosed proxy card and return it promptly in the postage-paid envelope. If we receive your properly executed proxy card before the 20202022 annual meeting, we will vote your shares as directed by your proxy card.
To vote by online ballot at the 20202022 annual meeting, attend the 20202022 annual meeting and vote your shares using the online ballot on the virtual meeting website.
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Beneficial owners of shares
You should have received a voting instruction form containing voting instructions from your broker rather than from us. Follow the detailed instructions in the voting instruction form to ensure that your vote is counted.
�� Tarang Amin
Tiffany Daniele
Lori Keith
Beth Pritchard
Tarang Amin Chairman
Tiffany Daniele
Lori Keith
Beth Pritchard Lead Independent Director
Lauren Cooks Levitan
Kenny Mitchell
Kirk Perry
Maureen Watson
Richard Wolford
