UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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| ¨ | Preliminary Proxy Statement |
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| ý | Definitive Proxy Statement |
| ¨ | Definitive Additional Materials |
| ¨ | Soliciting Material Pursuant to §240.14a-12 |
SIGNET JEWELERS LIMITED
(Name of Registrant as Specified In Its Charter)
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| Clarendon House | May 1, 2020 |
| 2 Church Street | |
| Hamilton HM11, Bermuda | |
DEAR FELLOW SHAREHOLDERS
Due to the developing public health impact of the coronavirus outbreak (“COVID-19”), and to support the health and well-being of our directors, employees, shareholders and other stakeholders, the meeting will be held in a virtual meeting format only via live audio webcast at www.virtualshareholdermeeting.com/SIG2020. You will not be able to attend this meeting in person. If you plan to attend the meeting virtually, please review the instructions for attendance included in the “Shareholder Q&A” section of the accompanying proxy statement.
Signet Jewelers is the world’s largest retailer of diamond jewelry with market-leadingjewelry. It has a strong store banners, including Kay Jewelers, Zales, Jared The Galleria Of Jewelry, Piercing Pagoda, H.Samuel, Ernest Jones, Peoples Jewellers, and JamesAllen.com. We have an incredible foundation as a leading retail brand and the market share leader inpresence across North America and the U.K. inUnited Kingdom and a large and growing category. We operate manyOmniChannel business. The pace at which the jewelry industry is changing has reinforced our need to transform as a company. Signet’s fiscal year ended February 1, 2020 (“Fiscal 2020”) was the second year of the most trusted and recognized banners in jewelry, including those with strong appeala multi-year plan entitled “Path to millennial consumers, and we enjoy a competitive advantage in our real estate footprint. We believe Signet has significant opportunityBrilliance” to gain share in a highly-fragmented market through sharper marketing, product and service innovation, a superior OmniChannel experience, and leveraging our scale as the world’s largest jewelry retailer.
Signet delivered results ahead of expectations for Fiscal 2020, finishing the year strongly with its best overall holiday performance in four years. Our team delivered fourth quarter same store sales growth of 2.3% and full year same stores sales growth of 0.6%. This improvement also included double digit increases in e-commerce sales, and positive North America same-store sales growth that accelerated to 2.9% during the critical fourth quarter holiday season and continued through the Valentine’s Day season.
Signet ended Fiscal 2020 with a significantly stronger balance sheet and lower long-term debt thanks to strong free cash flow generation, largely a result of the execution of our Path to Brilliance plan. The Board believes the financial results for Fiscal 2020 demonstrate that the Path to Brilliance strategy is not only working, but has also given our Company a stronger foundation, new innovation capabilities, a leading jewelry e-commerce experience, and a culture of agility, efficiency, and resilience.
We are now entering year three of our Path to Brilliance transformation plan. We do so with the right leadership to navigate the changing retail environment. Your Board, along with Gina hasand her leadership team, see this as a strong track recordtime to not only manage effectively through the challenges caused by COVID-19 but to acutely focus investments and innovative actions to build Signet’s future. In Fiscal 2020, Signet invested in a dynamic platform for Jared and Kay to drive increased digital traffic and improve conversion that was designed to enable better customer experience through faster speeds and high-quality imagery. In addition, the Company made investments in flexible fulfillment and new product delivery models, on-line jewelry customization tools, enhanced mobile experience, and continued greater personalization of transformationalcontent and product offering utilizing behavioral data management and machine learning that we believe will drive a better customer experience. This is also expected to enable and enhance digital marketing return on investments through greater visibility of a customer's multi-touch journey.
After having served since October 2016, Jonathan Sokoloff will be stepping off our Board at the Meeting, as he was not re-nominated by Leonard Green & Partners as part of a planned transition. Signet and our Board would like to thank Mr. Sokoloff for his commitment to Signet and providing the Board with significant expertise in finance and retail business leadership proven successduring his tenure on the Board. Following Mr. Sokoloff’s departure, our Board size will be reduced from 11 members to 10.
Consistent with best governance practices, all Board members are elected annually. This year, the Board is asking shareholders to consider the re-election of 10 nominees to serve. The nominees for re-election provide diverse expertise to both guide us through our transformation and address the immediate challenges faced by the Company as a result of the COVID-19 pandemic. In particular, the Board includes members with decades of experience in brand buildingstrategic corporate transformation, operations, digital marketing, technology and category transformation,innovation, supply chain management, human resources, and broad financial expertise, including two former chief financial officers. More information about the Board nominees can be found in the accompanying proxy statement starting on page 10.
Now, more than ever, companies have a dedicationresponsibility to deep Customer insightsdeliver purposeful achievements and innovation,commitments that create shared value with shareholders, employees, customers and other stakeholders as well as strengthen the resilience of business and society in confronting global challenges. In the coming year, the Board will be working with our management team to evaluate and modernize our corporate purpose and refresh the areas that demonstrate corporate social responsibility. We will be focused on assessing environmental, social and governance (ESG) areas that are most material to our shareholders, referencing standards such as those established by the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and the United Nations Global Compact.
While we have and expect to continue to have significant negative impacts on our results of operations, financial condition and liquidity as a relentless focus on strategic imperatives to drive near-term improvement and lasting competitive advantage. Our management team’s priority, with full supportresult of the COVID-19 pandemic, our Board is to position the Company for sustainable profitable growth.
believes Signet’s Path to Brilliance transformation isplan has put the company in a three-year journey, which we believe will leadposition of strength to sustainable market leading growth. Fiscal 2019 is focused on laying a strong foundationconfront the challenges of changeCOVID-19 and emerge from the pandemic with renewed purpose to drive gradual and continuous improvementsucceed over the coming years. Thelong term. We are incredibly grateful to all our team members for their continued commitment to each other, our customers, our shareholders, and our company.
We encourage you to review our Annual Report to Shareholders and specifically the shareholder letter from Gina and myself, as well as our 2019 CSR Update, to understand how Signet Board is confident that this is the right path forwarddelivering progress on its transformation strategy, building a resilient and is committed to ensuring the success of this transformation plan.
Thank you for your support of knowledge from more than three decades in human resources, leading successful cultural development and transformation, most recently as the Chief Human Resources and Communications Officer at Campbell Soup Company.our company. We are very excited about the fresh perspectives these two additions will have on our Board and our Company’s ongoing focus on fundamental transformation.
Sincerely,
H. Todd Stitzer
Chairman
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: Friday, June 12, 2020
Place: Virtual meeting via live audio webcast at www.virtualshareholdermeeting.com/SIG2020
Notice is hereby given that the 20182020 Annual Meeting of Shareholders (“Meeting”) of Signet Jewelers Limited (the “Company” or “Signet”) to be held on Friday, June 12, 2020 at 11:00 am, Eastern Time. The Meeting will be held at Hamilton Princess, 76 Pitts Bay Road, Hamilton, HM 08, Bermuda, on Friday, June 15, 2018 at 11:00 a.m. Atlantic Time,entirely online live via audio webcast due to considerthe public health impact of the coronavirus outbreak (COVID-19) and to support the health and well-being of our directors, employees, shareholders and other stakeholders. If you are a Signet shareholder of record, you will be able to attend and participate in the Annual Meeting online by visiting www.virtualshareholdermeeting.com/SIG2020.
At the Meeting, the following items of business:business shall be considered:
| 1. | Election of |
| 2. | Appointment of KPMG LLP as independent auditor of the Company, to hold office from the conclusion of this Meeting until the conclusion of the next |
| 3. | Approval, on a non-binding advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Proxy Statement (the “Say-on-Pay” vote). |
| 4. | Approval of an amendment to the Signet Jewelers Limited 2018 Omnibus Incentive Plan, including to increase the |
Each of the proposals to be presented at the Meeting will be voted upon by a poll. In addition, wethe Company will consider the transaction of any other business properly brought at the Meeting or any adjournment or postponement thereof.
The Board has fixed the close of business on Monday,Friday, April 16, 2018,17, 2020, as the record date for the Meeting. All Shareholdersof the Company’s shareholders of record at the close of business on that date are entitled to notice of, and to be presentparticipate and vote at, the Meeting and at any adjournment and continuation thereof.
Attendance at the Meeting will be limited to Shareholdersshareholders of record, beneficial owners with evidence of ownership, corporate representatives of Shareholders,shareholders, proxies and guests invited by management. Any person claiming tomanagement who have a 16-digit control number, which shall be an authorized corporate representative of a Shareholder must, upon request, produce written evidence of such authorization.on the notice, proxy card or instructions that accompanied the proxy materials.
The Meeting will be conducted pursuant to the Company’s Bye-laws and rules of order prescribed by the Chairman of the Meeting.
By Order of the Board,
Chief GovernanceLegal & Strategy Officer &and Corporate Secretary
May 1, 20182020
Important notice regarding the availability of proxy materials for the Annual Meeting of Shareholders to be held on June 15, 2018.12, 2020. The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders, Proxy Statement, Proxy Card and the Annual Report to Shareholders are available at www.signetjewelers.com/shareholders.shareholders.
WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL MEETING OF SHAREHOLDERS IN PERSON AND REGARDLESS OF THE NUMBER OF SHARES YOU OWN, PLEASE REGISTER YOUR VOTE BY APPOINTING A PROXY ELECTRONICALLY BY INTERNET OR FOR U.S. SHAREHOLDERS, BY TELEPHONE IN ACCORDANCE WITH THE INSTRUCTIONS ON THE PROXY CARD, OR, ALTERNATIVELY, MARK, SIGN AND DATE THE PROXY CARD IN ACCORDANCE WITH THE INSTRUCTIONS THEREON AND MAIL IT PROMPTLY TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED. YOU MAY ELCTRONICALLY VOTE IN PERSONLIVE IF YOU ATTEND THE VIRTUAL ANNUAL MEETING OF SHAREHOLDERS. YOUR PROXY IS REVOCABLE AT ANY TIME BY SENDING WRITTEN NOTICE OF REVOCATION OR BY SUBMISSION OF A PROPERLY EXECUTED PROXY BEARING A LATER DATE TO THE TRANSFER AGENTBROADRIDGE BY THE DEADLINE OF 12:01AM ATLANTIC01 AM, EASTERN TIME (4:01AM(5:01 AM, BRITISH SUMMER TIME) ON JUNE 15, 2018 (11:01PM EASTERN DAYLIGHT TIME ON JUNE 14, 2018)12, 2020 OR BY VOTING IN PERSONELECTRONICALLY AT THE VIRTUAL MEETING.
Table of Contents
| Shareholder Q&A | |
| Ownership of the Company | |
| Shareholders Who Beneficially Own At Least Five Percent of the Common Shares | |
| Ownership by Directors | |
| Transactions with Related Parties | |
| Risk Management and Role of the Board in Risk Oversight | |
| Corporate Governance Guidelines and Code of Conduct and Ethics | |
| Board Committees | |
| PROPOSAL 2: Appointment of Independent Auditor | |
| Executive Officers of the Company | |
| PROPOSAL 3: Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s Named Executive Officers | |
| Compensation Discussion and Analysis | |
| Introduction | |
| Executive Summary | |
| Our Commitment to Pay for Performance | |
| How Executive Compensation is Determined | |
| Competitive Benchmarking Analysis | |
| Elements of NEO Compensation | |
| Other Compensation Policies and Practices | |
| Deductibility of Executive Compensation | |
| Modification to Compensation Programs in Response to the COVID-19 Pandemic | |
| Compensation Committee Report | |
| Executive Compensation Tables | |
| Summary Compensation Table | |
| Grants of Plan-Based Awards | |
| Outstanding Equity Awards at Fiscal Year End 2020 | |
| Option Exercises and Shares Vested | |
| Non-Qualified Deferred Compensation | |
| NEO Agreements | |
| Termination Payments | |
| CEO Pay Ratio | |
| Equity Compensation Plan Information | |
| PROPOSAL 4: Approval of an Amendment to the Signet Jewelers Limited 2018 Omnibus Incentive Plan, | |
| Other Business | |
| Appendix A - Amended and Restated Signet Jewelers Limited | |
Proxy Statement Summary
Highlights of certain information in this Proxy Statement are provided below. As it is only a summary, please refer to the complete Proxy Statement and 20182020 Annual Report to Shareholders before you vote.
Date and Time:
June 15, 2018,12, 2020, 11:00 a.m. Atlanticam, Eastern Time
Date proxy materials are first made available to Shareholders:
May 1, 20182020
Record Date:
April 16, 201817, 2020
Electronic voting:
voting prior to the Annual Meeting: Place your vote by visiting www.signetjewelers.com/shareholders.
Voting Matters and Board Recommendations
| Proposal | Board’s Recommendation | Page | |
| 1. | Election of Directors | FOR all Director Nominees | |
| 2. | Appointment of KPMG LLP as Independent Auditor to the Company until the conclusion of the next annual meeting of shareholders and authorization of the Audit Committee to determine its compensation. | FOR | |
| 3. | Approval, on a non-binding advisory basis, of the compensation of the Company’s named executive officers (the “Say-on-Pay” vote) | FOR | |
| 4. | Approval of an amendment to the Signet Jewelers Limited 2018 Omnibus Incentive Plan, including to increase the number of shares available for issuance thereunder. | FOR | |
Election of Directors (See page 10) |
| Nominees | Director Since | Independent | Board Overview |
| H. Todd Stitzer | 2012 | Yes | Chairman: H. Todd Stitzer Director Terms: 1 Year Required Vote: Majority of the votes cast FOR each Director nominee Board Meetings in Fiscal 2020: 11 Standing Board Committee Meetings in Fiscal 2020: • Audit Committee - 10 • Compensation Committee - 5 • Nomination & Corporate Governance Committee - 4 • Corporate Social Responsibility Committee - 5 Director Attendance: Averaged 97%, and no Director attended less than 75% of the meetings of the Board and those Committees on which the Director served. |
| Virginia C. Drosos | 2013 | No | |
| R. Mark Graf | 2018 | Yes | |
| Zackery Hicks | 2019 | Yes | |
| Sharon L. McCollam | 2018 | Yes | |
| Helen McCluskey | 2014 | Yes | |
| Nancy A. Reardon | 2018 | Yes | |
| Jonathan Seiffer | 2019 | Yes | |
| Brian Tilzer | 2017 | Yes | |
| Eugenia Ulasewicz | 2014 | Yes | |
Corporate Governance (See page15) |
Our corporate governance policies reflectreflects best practicepractices
| Board Accountability | • All Directors are elected annually • The Company has majority voting for Director elections |
| Leadership Structure and Succession Planning | • The roles of the Chairman and Chief Executive Officer (“CEO”) are separate to provide clear division of responsibilities between leadership of the Board and the principal executive responsible for the Company’s operations • The Board regularly participates in CEO succession planning and maintains a formal CEO succession plan • A formal emergency succession plan for the Chairman has been adopted |
| Director Independence | • The Chairman of the Board is independent and approves Board meeting agendas and oversees effective Board operation • All four standing Board Committees, including Audit, Compensation, Nomination & Corporate Governance and Corporate Social Responsibility, are fully comprised of independent Directors • All Directors are independent with the exception of the CEO |
| Board Diversity | • The Board maintains a Diversity Policy • 50% of the Board nominees are women, and all four Board Committees are chaired by women • The Board is comprised of Directors ranging in ages from 48 to 68 years |
| Board Refreshment | • A Director Tenure Policy is in place, with average tenure of Board nominees at approximately 4.3 years, including six directors added within the last four years |
| Board Evaluation and Effectiveness | • Annual Board, Committee and Director evaluations are conducted, including periodic external Board evaluations • A Director skills matrix is reviewed and approved by the Board each year |
| Shareholder Alignment | • Company policy prohibits pledging and hedging of Company shares by Directors and employees • Executive officer and Director Share Ownership Policies have been adopted |
| Director Access and Engagement | • Executive sessions of independent Directors are held at each regularly scheduled Board meeting • All Directors continuing in office at the time are required to attend the annual meeting of shareholders, and all Directors then in office attended the 2019 Annual Meeting of Shareholders • Shareholders have the ability to engage with Directors through the procedures set forth on page 16 of this Proxy Statement |
| Corporate Citizenship | • The Board oversees corporate social responsibility (CSR) and maintains a standalone CSR Committee • The Company publishes a CSR Report disclosing the Company’s CSR goals and achievements |
| Risk Oversight | • The Board oversees risk management |
| Proposal | Board’s Recommendation | Page | |
| 1. | Election of Eleven Director Nominees | FOR all Director Nominees | 10 |
| 2. | Appointment of KPMG LLP as Independent Auditor to the Company until the conclusion of the next Annual Meeting of Shareholders | FOR | 14 |
| 3. | Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s Named Executive Officers (the Say-on-Pay vote) | FOR | 15 |
| 4. | Approval of the Signet Jewelers Limited 2018 Omnibus Incentive Plan, including the authorization of the issuance of additional shares thereunder | FOR | 16 |
| 5. | Approval of the Signet Jewelers Limited Sharesave Scheme, including the authorization of the issuance of additional shares thereunder | FOR | 22 |
| 6. | Approval of the Signet Jewelers Limited Employee Share Purchase Plan for U.S. Employees, including the authorization of the issuance of additional shares thereunder | FOR | 25 |
Executive Compensation (See page 27) |
Signet’s compensation philosophy is to provide market-competitive programs,an attractive, competitive, and market-based total compensation program tied to performance and aligned with pay directly linked to the achievement of short-our shareholders and long-term business resultsgrowth and value creation. Our executive compensation practices reinforce our goals and expectations to reward the significant contributions that deliver against the Company’s strategy.our executives are making to our transformational Path to Brilliance journey.
Key components of our Fiscal 2020executive compensation program
The Compensation Committee reviews program components, targets and payouts on an annual basis to assess the strength of pay-for-performance alignment. Performance is evaluated against short-term goals that support the Company’s long-term business strategy and long-term goals that measure the creation of long-term Shareholdershareholder value. The Compensation Committee has established an executive compensation program that contains the following key components:
| Component | Objective | Performance Linkage |
| Base salary | Provide a fixed level of pay that is not at risk and reflects individual experience and ongoing contribution and performance. | Amounts and merit increases tied to individual performance, while factoring in competitive market benchmarks. |
| Annual bonus (Short Term Incentive Plan or “STIP”) | Motivate and reward achievement of annual financial results against established annual goals of the Company. | Cash awards dependent on the degree of achievement against annual performance targets that align with our transformational Path to Brilliance plan and focused on profitable growth. |
| Long-term incentives (performance-based restricted share units and time-based restricted shares or restricted share units) | Align management with long-term shareholder interests; retain executive officers; motivate and reward achievement of sustainable earnings growth and returns over time. | Performance-based restricted share units (65% of overall award granted) require achievement of Company financial goals over a three-year performance period, and time-based restricted share awards (35% of overall awards granted) require continued service. |
Executive compensation programs incorporate strong governance features
In designing and administering the Company’s compensation program, the Compensation Committee assessesperiodically reviews, benchmarks and has sought to align the payprogram with best practices and performance alignment of incentive plans.principles, such as:
• Pay that is strongly-linked to performance • Independent director oversight of compensation and benefit programs • Rigorous stock ownership requirements • Strong risk mitigation including balanced performance metrics and claw back provisions • Vesting of performance-based equity awards require meeting established goals and vest over multiple years • Specified maximum payout caps on all variable compensation | • Double-trigger vesting for severance and change-in-control benefits and LTIP awards • Independent compensation consultant • Limited use of perquisites • No excise tax gross-up in connection with a change in control • No dividend equivalents paid on unvested performance share units • No hedging transactions, short sales or pledging of Company stock • No resetting of performance targets |
The Company received strong Shareholdershareholder support for the executive compensation program in place during the fiscal year ended January 28, 2017February 2, 2019 (“Fiscal 2017”2019”), with 98.1%85.1% of votes cast approving the advisory Say-on-Pay resolution in June 2017.2019. As in prior years, the Committee considered this input from Shareholdersshareholders as well as input from other stakeholders as part of its annual review of the executive compensation program. Following this review and basedBased on the Committee’s assessment of the program, the Compensation Committee continued to apply the same principles in determining the amounts and types of executive compensation for Fiscal 2018.2020. In addition, the Company expanded its investor outreach program to better understand its largest investors viewpoints on the Company’s executive compensation program and to include director involvement in such outreach.
Please see the Compensation Discussion and Analysis (“CDA”) section of this Proxy Statement for a detailed description of executive compensation.
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| Signet Jewelers Limited | May 1, 2020 |
| Clarendon House | |
| 2 Church Street | |
| Hamilton HM11, Bermuda | |
Proxy Statement
Solicitation of Proxies
The proxy or proxies accompanying this proxy statement and relating to shares of Class A Common Stock, par value $0.18 per share (the “Common Shares”) and the Series A Convertible Preference Shares, par value $0.01 per share (the “Preferred Shares”), are solicited on behalf of the Board of Directors of Signet Jewelers Limited, a Bermuda corporation, for exercise at the annual meeting of shareholders to be held on Friday, June 12, 2020 at 11:00 am, Eastern Time (the “Annual Meeting” or “Meeting”). Due to the developing public health impact of the coronavirus outbreak (COVID-19), and to support the health and well-being of our directors, employees, shareholders and other stakeholders, the meeting will be held in a virtual meeting format only via live audio webcast at www.virtualshareholdermeeting.com/SIG2020. You will not be able to attend the Meeting in person. If you plan to attend the Meeting virtually, please review the instructions for attendance included in the “Shareholder Q&A” section below.
This proxy statement and related form of proxy are being made first available to shareholders on or about May 1, 2020.
Unless otherwise specifically stated or the context otherwise requires, all references in this proxy statement to the “Company,” “Signet,” “we,” “our,” “us” and similar terms refer to Signet Jewelers Limited and its subsidiaries.
Shareholder Q&A
When and where can I find the Proxy Statement and Internet Notice?
The Signet Proxy Statement and Internet Notice were filed with the SEC and published on the Company’s website, www.signetjewelers.com/shareholders, on May 1, 2020. The Internet Notice will be emailed or mailed to shareholders on or around May 1, 2020. The Signet Annual Report on Form 10-K for Fiscal 2020 was filed with the SEC on March 26, 2020 and is published on the Company’s website. Hard copies of Signet’s proxy materials will be mailed to those shareholders who have requested them on or around May 1, 2020.
What is included in Signet’s proxy materials?
Signet’s proxy materials include the Proxy Statement and Annual Report to Shareholders for Fiscal 2020. In accordance with SEC rules, Signet emails or mails many shareholders the Internet Notice informing them of the availability of proxy materials on the Signet website. The Internet Notice, when mailed to shareholders, also incorporates Signet’s Proxy Voting Instructions that may be returned by mail, as set forth in “How do I vote?” below.
How do I register my email address for email delivery of the proxy materials?
You can register your email address for email delivery of proxy materials in any one of the following ways:
Internet: www.proxyvote.com
Telephone: 1-800-579-1639
Email: sendmaterial@proxyvote.com
If requesting proxy materials by email, please send a blank email and include in the subject line the information that is printed in the box marked by an arrow that was included on the Internet Notice. Please make your request on or before May 29, 2020 to facilitate timely delivery.
Signet encourages shareholders to take advantage of the availability of proxy materials on the Company’s website or www.proxyvote.com and register for email delivery. This allows the Company to significantly reduce its printing and postage costs while ensuring timely delivery to shareholders and supporting the Company’s commitment to environmental stewardship.
What will I receive if I register for email delivery?
Shareholders registered for email delivery of Signet proxy materials will receive an email on or around May 1, 2020. The email will contain a link to proxy materials available on the Signet website and details on how to vote.
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How do I request a hard copy of the Company’s proxy materials?
Instructions for requesting a hard copy of Signet’s proxy materials can be found on the Internet Notice and on the Company’s website: www.signetjewelers.com/shareholders. You can also request a hard copy using the same contact details provided under “How do I register my email address for email delivery of proxy materials?” above.
Who is entitled to vote at the Annual Meeting?
You are entitled to vote at the Annual Meeting, and any postponement(s) or adjournment(s) thereof, if you owned Common Shares or Preferred Shares as of the close of business on April 17, 2020, the record date for the Meeting. On the record date there were 52,342,518 Common Shares issued and outstanding, excluding treasury shares, and 625,000 Preferred Shares issued and outstanding. Each issued and outstanding Common Share is entitled to one vote on each matter at the Meeting. The holders of the Preferred Shares are entitled to a number of votes equal to the largest number of Common Shares into which all Preferred Shares held by such holders could then be converted. As of the record date, up to 7,643,562 Common Shares were issuable to the holders upon conversion.
What is the difference between a shareholder of record and a beneficial owner of shares held in street name?
| Shareholder of record | Beneficial owner of shares held in street name |
| If your shares were registered directly in your name with one of Signet’s registrars (American Stock Transfer & Trust Company for U.S. Shareholders, and Link Asset Services for U.K. and other non-U.S. Shareholders) on the record date, you are considered the shareholder of record for those shares. | If your shares were registered with a broker, bank or other nominee on the record date, you are considered a beneficial owner of shares held in street name. |
| Signet’s Internet Notice or hard copy proxy materials will be provided directly to you. | Signet’s Internet Notice or hard copy proxy materials will be forwarded to you by that entity, which is considered the shareholder of record for those shares. Your broker, bank or other nominee will send you details on how to vote your shares, and you must follow their instructions to vote. |
How can I attend the virtual Annual Meeting?
The Company has elected to hold the Annual Meeting virtually and be conducted exclusively by a live audio webcast.
If you are a shareholder of record as of the close of business on April 17, 2020, the record date for the Annual Meeting, you will be able to virtually attend the Annual Meeting, vote your shares and submit questions online during the meeting by visiting www.virtualshareholdermeeting.com/SIG2020. You will need to enter the 16-digit control number included on your notice, on your proxy card or on the instructions that accompanied your proxy materials.
If you are a beneficial owner holding your shares in street name as of the close of business on April 17, 2020, you may gain access to the meeting by following the instructions in the voting instruction card provided by your broker, bank or other nominee. You may not vote your shares electronically at the Annual Meeting unless you receive a valid proxy from your brokerage firm, bank, broker dealer or other nominee holder.
The online meeting will begin promptly at 11:00 a.m., Eastern time. We encourage you to access the meeting prior to the start time, and you should allow approximately 15 minutes for the online check-in procedures.
If you wish to submit a question for the Annual Meeting, you may do so in advance at www.virtualshareholdermeeting.com/SIG2020, or you may type it into the dialog box provided at any point during the virtual meeting (until the floor is closed to questions).
What can I do if I need technical assistance during the Annual Meeting?
If you encounter any difficulties accessing the virtual Annual Meeting webcast please call the technical support number that will be posted on the Annual Meeting website log-in page.
Why is the Company holding a virtual Annual Meeting?
In light of the public health impact of the coronavirus outbreak (COVID-19), and in an effort to maintain a safe environment for our shareholders, directors, employees and other stakeholders who wish to attend the Annual Meeting, the Company has determined that holding a virtual meeting is in the best interests of the Company.
When is broker discretionary voting permitted and what is the effect of broker non-votes?
In accordance with NYSE rules, in circumstances where a broker, bank or other nominee does not receive specific voting instructions from the beneficial owner of the relevant shares, the broker may use his discretion to vote those shares on certain routine matters on the beneficial owner’s behalf. At the Annual Meeting, broker discretionary voting is only permitted with respect to Proposal 2: Appointment of KPMG as Independent Auditor.
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A “broker non-vote” occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because it does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner.
What is a proxy and how does proxy voting work?
A proxy is your legal designation of another person (or persons) to attend and vote your shares at an Annual Meeting on your behalf. The person you so designate is known as your proxy.
You can direct your proxy to vote your shares FOR or AGAINST, or to ABSTAIN from voting with respect to each matter to be voted on at the Annual Meeting. A proxy must vote your shares at the Meeting in accordance with your instructions.
The Board has designated H. Todd Stitzer and J. Lynn Dennison, or either of them (each with full power of substitution) as proxies available to shareholders to have their shares voted at the Annual Meeting in accordance with your instructions.
If you appoint a proxy, you may still attend and vote electronically at the Annual Meeting. If you vote at the Meeting, you will have effectively revoked any previously appointed proxies.
What happens if I appoint more than one proxy?
If you authorize your shares to be voted under more than one form of proxy, each proxy must authorize the exercise of rights attaching to different shares held by you. In circumstances where the Company’s registrars receive two or more valid proxy forms in respect of the same share(s) and the same meeting, the form dated last will be treated as replacing and revoking the other(s).
If you appoint a proxy designated by the Board but do not provide voting instructions, the shares represented by your proxy will be voted in accordance with the recommendation of the Board.
If you submit voting instructions but do not name a proxy, the Chairman of the Meeting will be appointed as your proxy.
What proposals are being voted on at the Annual Meeting, what vote is required to approve each proposal and what is the effect of abstentions and broker non-votes?
| Proposal | Board’s Recommendation | Vote Required to Approve | Effect of Abstentions | Effect of Broker Non-Votes |
| 1. Election of Directors | FOR each Director nominee | Majority of the votes cast FOR each Director nominee | No effect - not counted as votes cast | No effect -not counted as votes cast |
2. Appointment of KPMG as Independent Auditor and authorization of the Audit Committee to determine its compensation. | FOR | Majority of the votes cast FOR | No effect - not counted as votes cast | Not applicable -broker discretionary voting is permitted |
3. Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s Named Executive Officers (the “Say-on-Pay” vote) | FOR | Majority of the votes cast FOR (advisory only) | No effect - not counted as votes cast | No effect - not counted as votes cast |
| 4. Approval of an amendment to the Signet Jewelers Limited 2018 Omnibus Incentive Plan, including to increase the number of shares available for issuance thereunder. | FOR | Majority of the votes cast FOR | No effect - not counted as votes cast | No effect - not counted as votes cast |
How do I vote?
If you are unable to attend and vote electronically at the Annual Meeting, details of how you can appoint a proxy to vote on your behalf at the Meeting, and any postponement(s) or adjournment(s) thereof, can be found in the table below.
| Method | Details | Additional Notes |
| By Internet: | www.proxyvote.com | Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. You may access the voting site directly, or through the Company’s website at www.signetjewelers.com/shareholders. |
| By telephone: | 1-800-690-6903 | Use any touch-tone telephone to transmit your voting instructions. Have your proxy card in hand when you call and then follow the instructions. |
| By mail: | Mark, sign and date your proxy card and return it in the postage-paid envelope Broadridge Financial Solutions, Inc. (“Broadridge”) has provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | Your Proxy Voting Instructions must be signed to be valid. If signed under a power of attorney or other authority, a copy of this authority must be sent to Broadridge with your Proxy Voting Instructions. |
| Deadline for receipt by Broadridge: | 11:59 p.m., Eastern Time on June 11, 2020 (4:59 a.m. British Summer Time) | |
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Submitting proxy instructions will not prevent a shareholder from virtually attending the Annual Meeting.
Can I change my proxy appointment and/or voting instructions?
You can change your proxy appointment and/or voting instructions before the deadline of 11:59 p.m., Eastern Time (4:59 a.m. British Summer Time) on June 11, 2020 by re-submitting your vote as detailed in “How do I vote?” above.
In circumstances where two or more valid forms in respect of the same share(s) and the same meeting are received, the form dated last will be treated as replacing and revoking the other(s).
You may also attend the Annual Meeting virtually and change your vote by voting electronically at the Meeting.
If you are a beneficial owner of shares held in street name and you vote by proxy, you may change your vote by submitting new instructions to your broker, bank or other nominee in accordance with that entity’s procedure.
Can I revoke the appointment of my proxy without appointing another?
If you are a shareholder of record, you can revoke the appointment of your proxy at any time before your shares are voted by submitting a written notice of revocation to Broadridge. Contact details can be found in the table under the heading “How do I vote?” above.
You can also revoke the appointment of your proxy by virtually attending the Annual Meeting and voting. By voting at the Meeting, you will have effectively revoked any previously appointed proxies.
Beneficial owners of shares held in street name must follow the instructions of their broker, bank or other nominee to revoke their voting instructions.
Will my shares be voted if I do nothing?
If you are a shareholder of record and do not appoint a proxy, submit voting instructions or attend the Annual Meeting to vote electronically, your shares will not be voted.
If you are a beneficial owner of shares held in street name, your broker, bank or other nominee may use their discretion to vote your shares with respect to Proposal 2: Appointment of KPMG as Independent Auditor.
What constitutes a quorum in order to transact business at the Annual Meeting?
The presence at the start of the Annual Meeting, virtually or by proxy, of two holders of Common Shares will constitute a quorum for the transaction of business. Abstentions and “broker non-votes” are treated as present, and are therefore counted in determining the existence of a quorum. The Corporate Secretary will determine whether or not a quorum is present at the Meeting.
How will voting be conducted at the Annual Meeting?
Voting at the Annual Meeting will be conducted by way of a poll. A representative from Broadridge will be in attendance at the Meeting to explain the voting procedure, conduct the poll, count votes and certify the results. As each proposal is introduced to the Meeting, shareholders will be given the opportunity to ask questions.
When and where can I find the final results of the Annual Meeting?
Final voting results will be available on Signet’s website and filed with the SEC as soon as practicable after the conclusion of the Meeting. The results will confirm the number of votes cast for and against each proposal, as well as abstentions and broker non-votes (where applicable).
What happens if additional matters are presented at the Annual Meeting?
Our management team is not aware of any matters other than those discussed in this Proxy Statement that will be presented to the Annual Meeting.
If other matters are properly presented at the Meeting, your shares will be voted in accordance with the recommendation of the Board if:
you appointed a proxy designated by the Board; or
the Chairman of the Meeting was appointed as your proxy because you submitted voting instructions (for other proposals) but did not name a proxy.
How do I submit a shareholder proposal for the Company’s 2021 Annual Meeting of Shareholders?
Shareholder proposals submitted pursuant to Rule 14a-8 of the Securities Exchange Act of 1934 (the “Exchange Act”) will be considered for inclusion in the Company’s 2020 Proxy Statement and proxy card if received in writing by the Corporate Secretary on or before December 31, 2020. Notice of the proposal must comply with SEC rules, Bye-law 26 of the Company’s Bye-laws and be a proper subject for shareholder action under Bermuda law.
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Shareholders who intend to submit nominations to the Board of Directors or present other proposals for consideration at our 2021 annual meeting (other than proposals submitted in accordance with Rule 14a-8 for inclusion in our proxy materials) must comply with all provisions of our Bye-laws with respect to such nominations and proposals and provide timely written notice thereof. To be timely for our 2021 annual meeting, notice must be delivered to our Corporate Secretary at our principal executive offices no earlier than February 12, 2021, and no later than March 14, 2021. However, in the event that our 2021 annual meeting is to be held on a date that is not within 30 calendar days before or after June 12, 2021, to be timely, notice must be so delivered not later than the tenth calendar date following the earlier of the date on which notice of the annual meeting was given to the shareholders or the date on which public announcement of the date of the 2021 annual meeting is first made. The additional procedures detailed in Bye-law 26 and 40 must also be followed, as applicable.
Under Bermuda law, shareholders holding not less than five percent of the total voting rights or 100 or more shareholders together may require the Company to give notice to its shareholders of a proposal intended to be submitted at an annual meeting of shareholders. Generally, notice of such a proposal must be received not less than six weeks before the date of the meeting and must otherwise comply with the requirements of Bermuda law.
The Company’s Bye-laws can be found on Signet’s website at www.signetjewelers.com/investors/corporate-governance.
Shareholder proposals should be sent to the Company at 375 Ghent Road, Akron, Ohio 44333, U.S.A., addressed for the attention of the Corporate Secretary.
Why has my household only received a single copy of the Internet Notice?
Shareholders who share a single address will receive a single Internet Notice (or a single set of proxy materials if a hard copy has been requested) unless contrary instructions have previously been received by the Company. This practice, known as “householding,” is permitted under Exchange Act rules and allows the Company to significantly reduce its printing and postage costs and environmental impact. Copies of the Internet Notice and proxy materials can be found on Signet’s website: www.signetjewelers.com/shareholders, and the Company will promptly deliver, upon written or oral request, a separate copy of the Internet Notice and/or a full set of proxy materials to any shareholder residing at an address to which only one copy was mailed. Please address any such request to the Corporate Secretary at 375 Ghent Road, Akron, Ohio, 44333 U.S.A. or 330-668-5000.
If you would like to receive a single copy in the future rather than multiple copies, please contact the Company in the same way. Copies will be sent promptly and without charge.
Beneficial owners who would like to change the number of copies received should contact their broker, bank or other nominee to request the change.
Who bears the cost of proxy solicitation?
The Company bears the cost of soliciting proxies which may occur by internet, mail and/or telephone. The Company will also request that banks, brokers, custodian nominees and fiduciaries supply proxy materials to beneficial owners of the Company’s Common Shares of whom they have knowledge and reimburse them for their expenses in so doing. Certain Directors, officers and employees of the Company may solicit proxies personally or by mail, email, telephone or fax without additional compensation.
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Ownership of the Company
The table below shows all persons who were known to the Company to be beneficial owners (determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))Act) of more than five percent of the Common Shares as of April 16, 2018.17, 2020. The table is based upon reports filed with the United States Securities and Exchange Commission (the “SEC”).SEC. Copies of these reports are publicly available from the SEC on its website, www.sec.gov.
Name and address of beneficial owner | Amount and nature of beneficial ownership | Percent of class | ||
BlackRock Inc. 55 East 52nd Street New York, NY 10055, USA | 8,380,484(1) | 16.0 | % | |
Leonard Green 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025, USA | ||||
| % | ||||
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, PA 19355, USA | % | |||
11111 Santa Monica Blvd, 15th Floor Los Angeles, CA 90025, USA | % | |||
Dimensional Fund Advisors LP Building One 6300 Bee Cave Road Austin, TX 78746, USA | 3,004,989 (5) | 5.7 | % | |
Susquehanna Securities, LLC 401 E. City Avenue, Suite 220 Bala Cynwyd, PA 19004 | 2,697,820 (6) | 5.1 | % | |
D. E. Shaw & Company, L.P. 1166 Avenue of the Americas, 9thFloor New York, NY 10036 | 2,661,969 (7) | 5.1 | % | |
None of the Company’s Common Shares entitle the holder to any preferential voting rights.
(1) | Based upon a Schedule |
| (2) | Based upon a Schedule 13D/A filed on June 14, 2019, Green Equity Investors VI,L.P. (“GEI VI”), Green Equity Investors Side VI, L.P. (“GEI Side VI”), LGP Associates VI-A LLC (“Associates VI-A”) and LGP Associates VI-B LLC (“Associates VI-B”), GEI Capital VI, LLC, Green VI Holdings, LLC, Leonard Green & Partners, L.P., LGP Management Inc., Peridot Coinvest Manager LLC, and Jonathan D. Sokoloff (collectively, “Leonard Green”) jointly reported shared voting and shared dispositive power of |
| Based upon a Schedule 13G/A filed on February |
(4) | Based upon a Schedule 13G/A filed on |
| (5) | Based upon a Schedule 13G/A filed on February 12, 2020, Dimensional Fund Advisors LP reported beneficial ownership of 3,004,989 Common Shares as follows: sole voting power over 2,898,855 Common Shares and sole dispositive power over 3,004,989 Common Shares. |
| (6) | Based upon a Schedule 13G filed on February 10, 2020, Susquehanna Securities, LLC (“SSL”), Susquehanna Investment Group (“SIG”), G1 Execution Services, LLC (“G1”), Susquehanna Fundamental Investments, LLC (“SFI”), as a group, reported beneficial ownership of 2,697,820 Common Shares as follows: shared voting and shared dispositive power over 2,697,820 Common Shares; sole voting and dispositive power over 2,649,290 Common Shares held by SSL; sole voting and dispositive power over 32,005 Common Shares held by SIG; sole voting power and dispositive power over 10,025 Common Shares held by G1; and sole voting and dispositive power over 6,500 Common Shares held by SFI. The address of the principal business office of G1 is 175 W. Jackson Blvd., Suite 1700, Chicago, IL 60604. |
| (7) | Based upon a Schedule 13G filed on April 27, 2020, D. E. Shaw & Company, L.P. and David E. Shaw (collectively, “D.E. Shaw”) jointly reported beneficial ownership of 2,661,969 Common Shares as follows: shared voting power over 2,608,869 Common Shares and shared dispositive power over 2,661,969 Common Shares. D.E. Shaw reported that the 2,661,969 Common Shares beneficially owned are composed of 1,246,011 shares in the name of D. E. Shaw Valence Portfolios, L.L.C., 246,579 shares in the name of D. E. Shaw Oculus Portfolios, L.L.C., 18 shares in the name of D. E. Shaw Asymptote Portfolios, L.L.C., and 1,169,361 shares under the management of D. E. Shaw Investment Management, L.L.C. |
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Ownership of the Company (continued)
The table below shows the number of Common Shares of the Company beneficially owned (determined in accordance with Rule 13d-3 of the Exchange Act) as of April 16, 201817, 2020 by each current Director, each executive officer named in the Summary Compensation Table and all of the Company’s current executive officers and Directors as a group.
| Name | Common Shares(1) | Shares that may be acquired upon exercise of options within 60 days(2) | Total(3) | |||
H. Todd Stitzer(4) | 21,985 | — | 21,985 | |||
Virginia C. Drosos(4)(5) | 120,832 | — | 120,832 | |||
R. Mark Graf(4) | 2,258 | — | 2,258 | |||
Helen McCluskey(4) | 8,455 | — | 8,455 | |||
Sharon L. McCollam(4) | — | — | — | |||
Marianne Miller Parrs(4) | 21,785 | — | 21,785 | |||
Thomas Plaskett(4) | 18,665 | — | 18,665 | |||
Nancy A. Reardon(4) | — | — | — | |||
Jonathan Sokoloff(4)(6) | 3,548 | — | 3,548 | |||
Brian Tilzer(4) | 3,105 | — | 3,105 | |||
Eugenia Ulasewicz(4) | 7,599 | — | 7,599 | |||
Russell Walls(4) | 5,438 | — | 5,438 | |||
Oded Edelman(7) | 130,319 | — | 130,319 | |||
Sebastian Hobbs(7) | 11,968 | — | 11,968 | |||
George Murray(7) | 16,572 | — | 16,572 | |||
Michele Santana(7) | 19,853 | — | 19,853 | |||
Mark Light(8) | 79,445 | — | 79,445 | |||
| All Executive Officers and Directors as a group (22 persons) | 513,021 | — | 513,021 | |||
| Name | Common Shares(1) | Shares that may be acquired upon exercise of options within 60 days | Total(2) | |||
H. Todd Stitzer(3) | 48,870 | — | 48,870 | |||
Virginia C. Drosos(3)(4) | 232,181 | — | 232,181 | |||
R. Mark Graf(3) | 12,216 | — | 12,216 | |||
Zackery Hicks(3) | 9,159 | — | 9,159 | |||
Helen McCluskey(3) | 18,413 | — | 18,413 | |||
Sharon L. McCollam(3) | 10,718 | — | 10,718 | |||
Nancy A. Reardon(3) | 10,718 | — | 10,718 | |||
Jonathan Seiffer(3)(5) | 7,444 | — | 7,444 | |||
Jonathan Sokoloff(3)(5) | 13,506 | — | 13,506 | |||
Brian Tilzer(3) | 13,063 | — | 13,063 | |||
Eugenia Ulasewicz(3) | 17,557 | — | 17,557 | |||
J. Lynn Dennison(6) | 24,271 | — | 24,271 | |||
Mary Elizabeth Finn(6) | 12,114 | — | 12,114 | |||
Joan M. Hilson(6) | 32,186 | — | 32,186 | |||
Jamie L. Singleton(6) | 15,132 | — | 15,132 | |||
Michele Santana(7) | 18,000 | — | 18,000 | |||
All Current Executive Officers and Directors as a group (18 persons) | 669,578 | — | 669,578 | |||
(1) | No |
(2) |
| All holdings represent less than 1% of the Common Shares issued and outstanding. No |
| Director |
| CEO |
| (5) |
| Executive officer |
| Former |
See CDA“CDA” and Director Compensation“Director Compensation” below for a discussion of the Company’s Share Ownership Policies applicable to executive officers and Directors, respectively.
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Proposal 1: Election of Eleven Directors
(Item 1 on the Proxy Card)
| We are asking shareholders to consider ten nominees for election to the Board to serve until the next annual meeting of shareholders or until their successors are duly elected. Each Director standing for election has the endorsement of the Board and the Nomination and Corporate Governance Committee. The Director nominees bring a variety of backgrounds, skills and experiences that contribute to a well-rounded Board to effectively guide the Company’s Path to Brilliance transformation strategy and oversee operations in a rapidly changing retail environment. Following the Meeting, and effective upon the election of all Directors, the Board size will be reduced to ten. Proxies may not be voted for a greater number of persons than the number of nominees named. |
Director standing for election has the endorsement of the Board and the Nomination and Corporate Governance Committee. The Board nominees bring a variety of backgrounds, skills and experiences that contribute to a well-rounded Board to effectively guide the Company’s Path to Brilliance transformation strategy and oversee operations in a rapidly changing retail environment. In addition, the Board has been significantly refreshed with recent additions of two highly experienced Directors: Sharon L. McCollam and Nancy A. Reardon.
Below is biographical information of each nominee for Director of the Company. An asterisk indicates an independent Director who satisfiesAll Directors, other than Ms. Drosos, the definitions of independence and hasCEO, have been affirmatively determined by the Board as beingto be independent in accordance with the New York Stock Exchange (“NYSE”) Listing Standards.
| H. TODD | Private | Former |
Age: Director Since: January 2012 | • Massachusetts Mutual Life Insurance Company | • Diageo plc |
Principal Occupation and Experience
H. Todd Stitzer has been Chairman of the Board of Signet since June 2012. Mr. Stitzer is the Lead Director of privately held Massachusetts Mutual Life Insurance Company and a member of the advisory board of Hamlin Capital Management, a privately held investment advisory firm. Prior to this,Previously, Mr. Stitzer was, until its acquisition by Kraft, Inc. in 2010, the Chief Executive Officer of Cadbury plc (previously Cadbury Schweppes plc). Having joined that companyCadbury in 1983 as Assistant General Counsel for North America, he later moved into strategic planning, marketing and sales roles. Mr. Stitzer becameroles becoming CEO of Cadbury plc’s wholly-owned subsidiary, Dr Pepper/7 Up Inc., in 1997 and then of Cadbury plc in 2003.1997. Mr. Stitzer practiced as an attorney with Lord, Day & Lord, was a directorserved on the board of publicly helddirectors of Diageo plc betweenfrom 2004 and Junethrough 2013 and was a member ofon the advisory committeeAdvisory Committee to the boardBoard of Virgin Group Holdings Ltd betweenfrom 2010 through 2014. Mr. Stitzer holds a bachelor’s degree from Harvard University and 2014. It wasa J.D. from Columbia Law School.
Director Qualification and Key Skills and Attributes
Mr. Stitzer has extensive global experience in senior legal, marketing, sales, strategy development and leadership roles. His executive leadership, strategic transformation experience, legal and commercial expertise make him well suited to serve on the basis of his proven leadership skills and ability to Chair the Board thatBoard. For these reasons, the Board concluded that Mr. Stitzer should continue to serve on the Board.
| VIRGINIA C. DROSOS | Public | Former |
Age: Director Since: July 2012 | • American Financial Group, Inc. | • Assurex Health |
Principal Occupation and Experience
Virginia “Gina” C. Drosos was appointed Chief Executive Officer of the Company on August 1, 2017. Prior to joining Signet, Ms. Drosos was most recentlyserved as President and CEO and a director of Assurex Health since Augustfrom 2013 to 2017, where she built Assurex into one of the most successful and fastest growing personalized medicine companies and executed the strategic sale of of the company to Myriad Genetics, Inc. in 2016. Previously, she is currently a Directorserved in roles of American Financial Group Inc. Prior to this, Ms. Drosos was Group President ofincreasing responsibility during her 25 year career at the Procter & Gamble Company until September 2012. During her 25-year career at Procter & Gamble, Ms. Drosos held positions of increasing responsibility. In her role2012, including service as Group President, Ms. Drososwhere she had responsibility for a $6 billion business unit’s operations, profit and loss, strategy, innovation and long-term business development. Ms. Drosos currently serves on the board of directors of American Financial Group Inc., a publicly traded insurance holding company, since 2013. Ms. Drosos also serves as a director of Akron Children’s Hospital, a pediatric acute care hospital in north-east Ohio, since April 2019. Ms. Drosos holds a BBA from the University of Georgia - Terry College of Business and an MBA from the Wharton School.
Director Qualification and Key Skills and Attributes
With her broad background in strategic, business and financial planning and operations, Ms. Drosos brings valuable skills and insights to the Company. She has proven leadership skills and expertise in strategy, branding, marketing, global operations and business expansions into new product lines, retail channels and geographies. Ms. Drosos is a visionary and transformational leader with an entrepreneurial mindset and proven track record of growing and scaling global businesses through strategy and innovation. The Board has concluded that Ms. Drosos should continue to serve on the Board for these reasons.
| R. MARK | Former | |
Age: Director Since: July 2017 | • BNC Bancorp | |
Principal Occupation and Experience
R. Mark Graf has beenserved as Chief Financial Officer of Discover Financial Services, since 2011. Previously,a publicly traded financial services company, from April 2011 to September 2019, including service as the company’s Chief Accounting Officer from April 2011 to December 2012. Prior to joining Discover, he served as an Investment Advisor at Aquiline Capital Partners from 2008 to 2010 and a Partner at Barrett Ellman Stoddard Capital Partners from 2006 to 2008. Mr. Graf also served in various roles at Fifth Third Bancorp from 2001 to 2006 and AmSouth Bancorporation from 1994 to 2001. Mr. Graf previously served as a directoron the board of thedirectors of BNC Bancorp, board of directorsformerly a publicly traded bank holding company, from 2010 to 2011. Mr. Graf was asked to joinholds a bachelor’s degree in Economics from the Board so that it might benefit from hisWharton School.
Director Qualifications and Key Skills and Attributes
Mr. Graf’s extensive capital analysis, consumer credit and financial management skills.expertise, as well as his risk management and real estate skills bring valuable experience and insight to the Board. The Board has concluded that Mr. Graf should continue to serve on the Board for these reasons.
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| ZACKERY HICKS | ||
Age: 56 Director Since: October 2018 | ||
Principal Occupation and Experience
Zackery Hicks serves as Executive Vice President and Chief Digital Officer of Toyota Motors North America, Inc., a subsidiary of Toyota Motor Corporation, a multinational automotive manufacturer, since April 2018, and has held roles of increasing responsibility with Toyota since 1996. In his role as Chief Digital Officer, Mr. Hicks leads Toyota’s Digital Transformation and Mobility efforts which includes the strategy, development and operations of all systems and technology for the company’s North American operations and its connected car ecosystem. He is also the CEO and President of Toyota Connected North America which is driving the transformation of Toyota from an automobile company to a mobility company through the use of connected intelligence services. Mr. Hicks earned a bachelor’s degree in business management from Pepperdine University and an MBA from the University of California at Irvine.
Director Qualifications and Key Skills and Attributes
Mr. Hicks has successfully delivered large-scale innovation and efficiency across business operations through advanced technology and data science. He also brings diversity of industry experience and a start-up mindset to complement Signet’s Board. The Board has concluded that Mr. Hicks should continue to serve on the Board for these reasons.
| HELEN | Public Directorships: | Former Directorships: | |
Age: Director Since: August 2013 | • Dean Foods Company • Abercrombie & Fitch Co. | • Avon Products, Inc. | • PVH Corporation • The Warnaco Group, Inc. |
Principal Occupation and Experience
Helen McCluskey was appointedserved as a Director of Dean Foods Company in November 2015 and Avon Products Inc. in July 2014. Prior to this, she was President and CEOChief Executive Officer and a member of the board of directors of The Warnaco Group, Inc. from 2012 until its 2013 acquisition by PVH Corporation. Ms. McCluskeyCorporation, when she retired and became an independent director of PVH until 2014. She joined Warnaco as Group President, Intimate Apparel in 2004, and her responsibilities continued to increase, becoming Chief Operating Officer in 2010 andbefore becoming President and Chief Executive Officer in 2012.Officer. Prior to joining Warnaco, Ms. McCluskey held various positions of increasing responsibility with Firestone Tire & Rubber Company (1977-1983),Liz Claiborne Inc. from 2001 to 2004, Playtex Apparel, Inc (1983-2001)from 1983 to 2001 (which was acquired by Sara Lee Corporation in 1991) and Liz Claiborne Inc. (now FifthFirestone Tire & Pacific Companies Inc.) (2001-2004).Rubber Company from 1977 to1983. Ms. McCluskey currently serves on the board of directors of two additional publicly traded companies, including Dean Foods Company, a food and beverage company, since November 2015, and Abercrombie & Fitch Co., a clothing retailer, since February 2019. She previously served as an Independent on the board of directors of Avon Products Inc., a publicly traded international social selling beauty company, from July 2014 to January 2020.
Director of PVH Corporation until June 2014, which position she assumed following the merger with Warnaco in February 2013. Qualifications and Key Skills and Attributes
With Ms. McCluskey’s broad background in strategy, business planning, operations, branding, merchandising and operations,marketing, she brings valuable skills and insight to the Company. Her leadership experience at a publicly traded company provides valuable corporate leadership and management insight to our Board. The Board has concluded that Ms. McCluskey should continue to serve on the Board for these reasons.
| SHARON L. | Public Directorships: | Private Directorships: |
Age: Director Since: March 2018 | • Stitch Fix, Inc. • Advance Auto Parts, Inc. • Chewy, Inc. | • • Hallmark Cards, Inc. • |
Principal Occupation and Experience
Sharon L. McCollam served as the Chief Financial Officer and Chief Administrative Officer of Best Buy Co., Inc., a multinational consumer electronics retailer, from December 2012 until her retirement in June 2016. She continued to serve as an advisor to Best Buy until January 2017. Prior to Best Buy, Ms. McCollam served in roles of increasing responsibility at Williams-Sonoma Inc. from 2000 to 2012, including service as Executive Vice President, Chief Operating and Chief Financial Officer and Executive Vice President of Williams-Sonoma Inc. Ms. McCollam also served as Chief Financial Officer of Dole Fresh Vegetables, Inc. from 19962006 to 2000.2012. She is a member of the Boardboard of Directorsdirectors and audit committees for three additional publicly traded companies including Stitch Fix, Inc., an online personal styling service and retailer, since November 2016, Advance Auto Parts, Inc., an automotive parts provider, since February 2019 and Chewy, Inc., an online retailer of pet products, since June 2019. She previously served on the board of directors for Whole Foods Market, a public company. Ms. McCollampublicly traded grocery company, from May 2017 until its acquisition by Amazon in August 2017. She also serves on the boards of three privately held companies, including International Walls, Inc. (f/k/a Art.com, Inc.) since August 2012, Hallmark Cards, Inc. since December 2016 and GetYourGuide AG since October 2019. She holds a B.S. in Accounting from the University of Central Oklahoma and is also a St. Jude Children’s Research Hospital/ALSAC Board member. Certified Public Accountant.
Director Qualifications and Key Skills and Attributes
Ms. McCollam has significant experience with major public companies in C-suite positions and haswas been recognized as the co-pilot of a foremost omni-channel turnaround in the retail sector. Thesector while at Best Buy. She brings significant expertise in retail, finance, supply chain management, customer care, real estate, enterprise shared services and store development to our Board. For these reasons, the Board has concluded that Ms. McCollam should continue to serve on the Board for these reasons.Board.
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| NANCY A. | Public | Private |
Age: Director Since: March 2018 | • Big Lots, Inc. | • Kids II, Inc. |
Principal Occupation and Experience
Nancy A. Reardon served as Chief Human Resources and Communications Officer of Campbell Soup Company from 2004 until her retirement in April 2012. Previously, she was Executive Vice President, Human Resources of Comcast Corporation from 2002 to 2004. PriorHer prior human resources leadership positions also include Borden Capital Management Partners, Duracell, Inc., American Express Company, Avon Products, Inc., and General Electric. Ms. Reardon is a Board membercurrently serves on the board of directors of Big Lots, Inc., a public company.publicly traded discount retailer, since 2015. In 2009, Ms. Reardon was named a Fellow of the National Academy of Human Resources. She holds a B.S. in Psychology from Union College and an M.S. in Social Psychology from Syracuse University.
Director Qualifications and Key Skills and Attributes
Ms. Reardon is widely viewed as a leading human resources and communications executive, has significant public company experience, and has played key roles shaping strategic and operating plans, as well as helping transform corporate culture. The Board has concluded that Ms. Reardon should continue to serve on the Board for these reasons.
| JONATHAN | Public | Former | |
Age: Director Since: | • | • Whole Foods Market, Inc. | |
Principal Occupation and Experience
Jonathan SokoloffSeiffer was appointed to the Board on October 5, 2016. Mr. Sokoloff currently serves as a ManagingSenior Partner with Leonard Green & Partners, L.P. ("(“Leonard Green"Green”), a private equity firm which is one of Signet'sSignet’s significant shareholders, which he joined in 1990.1994. Before joining Leonard Green, he wasworked in corporate finance at Donaldson, Lufkin & Jenrette, a Managing Director in Investment Banking at Drexel Burnham Lambert.U.S. investment bank. Mr. SokoloffSeiffer currently serves on the boardsboard of the following public companies: Container Storedirectors of Authentic Brands Group, Inc., Shake Shack Inc.,a privately held global brand development, marketing, and Whole Foods Market, Inc.entertainment company, since 2010, and BJ’s Wholesale Club, a publicly traded warehouse club operator, since 2011. Previously, Mr. SokoloffSeiffer served on the board of Rite Aid Corporationdirectors of Whole Foods Market, Inc. from December 2008 until May 2011.August 2017. Mr. SokoloffSeiffer earned a Bachelor of Applied Sciences in Systems Engineering and a B.S. in Economics from the University of Pennsylvania.
Director Qualifications and Key Skills and Attributes
Mr. Seiffer was nominated for service as a Director by Leonard Green (as described under “Director Qualifications and Experience” below) and brings particular knowledge and experience in finance, and broad-based experience in the
leadership of retail businesses and companies undergoing transformations. He also offers the board practicesBoard a valuable investor perspective, by virtue of other major corporations tohis service as a Senior Partner of a significant shareholder of the Board.Company. The Board has concluded that Mr. SokoloffSeiffer should serve on the Board for these reasons.
| BRIAN TILZER | ||
Age: 49 Director Since: February 2017 | ||
Principal Occupation and Experience
Brian Tilzer has served as Chief Digital and Technology Officer at Best Buy, a multinational consumer electronics retailer, since May 2018. Previously, he was Chief Digital Officer at CVS Health Corporation, from 2013 until 2018, where he scaled an enterprise-wide digital program to over 50 million active users. Prior to CVS Health, Mr. Tilzer was the Senior Vice President of Global eCommerce at Staples, where he developed and led several multi-channel digital innovation strategies. Mr. Tilzer holds a bachelor’s degree from Tufts University and an MBA from the Wharton School.
Director Qualifications and Key Skills and Attributes
Mr. Tilzer has more than 25 years of experience in information technology, strategic business development, digital transformation, planning and analysis and operations with a deep concentration in corporate, omni-channel and eCommerce strategy. The Board has concluded that Mr. Tilzer should continue to serve on the Board for these reasons.
| EUGENIA | Public Directorships: | Former Directorship: |
Age: Director Since: September 2013 | • • Hudson Ltd. • | • Bunzl plc |
Principal Occupation and Experience
Eugenia Ulasewicz is a Director of Bunzl plc, Hudson Ltd. and Vince Holding Corp. She wasserved as the President of Burberry Group plc’s American division, responsible for the US, Canada, Latin America, Central and South America, until her retirement in March 2013. Ms. Ulasewicz joined Burberry in 1998 and became a member of its executive committee in 2006. Ms. Ulasewicz hasPrior to joining Burberry, she held positions of increasing responsibility with Saks, Inc. from 1993 to 1998, Galeries Lafayette from 1991 to 1993 and Bloomingdales, a division of Macy’s, Inc. (formerly Federated Department Stores, Inc.) (1975-1991)from 1975 to 1991. She currently serves on the board of directors of Vince Holding Corp., Galeries Lafayette (1991-1993)global luxury apparel and Saks, Inc. (1993-1998).accessories, since April 2014, Hudson Ltd., a travel experience company, since February 2018, and ASOS pic, a global online fashion retailer, since April 16, 2020. Previously, she served as a director of Bunzl plc, an international distribution company, from April 2011 to April 2020. She hasis a Board Leadership Fellow of the National Association of Corporate Directors. Ms. Ulasewicz holds a B.S. from the University of Massachusetts and a Doctor of Laws from the College of Mount Saint Vincent.
Director Qualifications and Key Skills and Attributes
Ms. Ulasewicz’s extensive experience serving on the boards of global public companies and her expertise in retail, branding, marketing, omni-channel, global operations and general management that provides valuable skills and insights to the Company. The Board has concluded that Ms. Ulasewicz should continue to serve on the Board for these reasons.
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Director Qualifications and Experience
Our Nomination and Corporate Governance Committee performs an annual assessment of the skills and the experience needed to maintain a well-rounded, diverse and effective Board and summarizes such assessment in a tabular matrix. The Committee uses the matrix to assess the current composition of the Board and to identify desired qualifications and experience for potential nominees. When identifying nominees for the Board, the Committee conducts a targeted effort to identify and recruit individuals who have the qualifications and experience identified through this process. The following table provides a summary of each Director nominee’s specific skills, knowledge and experience. Individuals may possess other valuable skills, knowledge and experience even though they are not indicated below:
| H. Todd Stitzer | Virginia C. Drosos | R. Mark Graf | Zackery Hicks | Helen McCluskey | Sharon L. McCollam | Nancy A. Reardon | Jonathan | Brian Tilzer | Eugenia Ulasewicz | ||||
| Leadership | ü | ü | ü | ü | ü | ü | ü | ü | ü | ||||
| Financial & Accounting Literacy | ü | ü | ü | ü | ü | ü | ü | ||||||
| Capital Allocation | ü | ü | ü | ü | ü | ü | ü | ||||||
| Strategic Planning & Analysis | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||
| Business Development, Mergers & Acquisitions | ü | ü | ü | ü | ü | ü | ü | ü | ü | ||||
| Operations, Procurement & Supply Chain Management | ü | ü | ü | ü | ü | ü | ü | ü | |||||
| Human Resources & Talent Development | ü | ü | ü | ü | ü | ü | ü | ü | |||||
| Brand Management, Marketing, Merchandising & Product Development | ü | ü | ü | ü | ü | ü | |||||||
| Retail Industry | ü | ü | ü | ü | ü | ü | ü | ü | |||||
| International Business | ü | ü | ü | ü | ü | ü | ü | ü | |||||
| Information Technology | & Cybersecurity | ü | ü | ü | |||||||||
| Digital, Multi-Channel & Social Media | ü | ü | ü | ||||||||||
| ü | ü | ü | |||||||||||
| Technology & Innovation | ü | ü | ü | ü | ü | ü | |||||||
| Risk Oversight & Management | ü | ü | ü | ü | ü | ||||||||
| Ethics, Corporate Social Responsibility, Environment & Sustainability | ü | ü | ü | ü | ü | ü | ü | ||||||
| Law & Governance | ü | ü | ü | ||||||||||
| Governmental & Geopolitical Public Affairs | ü | ü | ü | ||||||||||
| Communication | ü | ü | ü | ü | ü | ü | ü | ||||||
| Real Estate | ü | ü | ü | ||||||||||
| ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||
The Board and Nomination and Corporate Governance Committee believe that all Director nominees are highly qualified and should be re-electedelected at the 2018 Annual Meeting of Shareholders.Meeting. As the table and Directors’ biographies above show, the Directors have significant experience and expertise that qualify them to serve on the Board and collectively contribute to the effectiveness of the Board.
In addition, pursuant to a shareholder agreement by and between the Company and affiliates of Leonard Green, one of the Company’s significant shareholders, Leonard Green has a right to designate one individual to be nominated by the Company for election to the Board. On August 24, 2016, the Company entered into an investment agreement and the shareholders’ agreement (the “LGP Agreements”) with Green Equity Investors VI, L.P. and Green Equity Investors Side VI, L.P. (the “Investors”), both affiliates of Leonard Green, relating to the issuance and sale to the Investors of the outstanding Preferred Shares. The terms of the Preferred Shares provide that the holders of the Preferred Shares, voting separately as a class, have the right to elect one member of the Board. Pursuant to the LGP Agreements, Leonard Green also has the right to appoint one non-voting observer to attend all Board meetings. Mr. Seiffer was designated as a Director nominee for election at the Annual Meeting in accordance with the LGP Agreements. For last year’s annual meeting of shareholders, the Company permitted Leonard Green to nominate two designees, Mr. Sokoloff and Mr. Seiffer, to facilitate Mr. Seiffer’s transition to the Board. Leonard Green did not re-nominate Mr. Sokoloff for election at the Annual Meeting as part of a planned transition.
Board Diversity, Independence and Tenure
The Company’s Corporate Governance guidelinesGuidelines and NYSE listing standards require that independent Directors constitute a majority of the Board. In addition, Signet’s Director Tenure Policy requires each independent Director to retire following the earlier of his or her (i) 15th anniversary of service or (ii) 75th birthday. The following summarizes the independence, gender diversity and tenure of Director nominees:
Fiscal 2018 (millions) | Fiscal 2017 (millions) | |||||
| Audit Fees | $ | 5.5 | $ | 4.4 | ||
Audit-Related Fees(1) | $ | 0.5 | $ | 0.1 | ||
Tax Fees(2) | $ | 0.4 | $ | 0.5 | ||
| All Other Fees | $ | 0.1 | $ | — | ||
| Total Fees | $ | 6.5 | $ | 5.0 | ||
The Signet Jewelers Limited 2009 Omnibus Incentive Plan is set to expire infollowing charts summarize the upcoming year,independence, tenure and therefore Shareholders are being asked to approve the Signet Jewelers Limited 2018 Omnibus Incentive Plan (the “2018 Plan”), which was recommended by the Compensation Committee for approvalgender and approved by the Board on March 1, 2018, subject to Shareholder approval.age diversity of our Director nominees:
The following summary of certain features of the 2018 Plan is not a complete description of all of the provisions of the 2018 Plan, and is qualified in its entirety by reference to the full text of the 2018 Plan, which is attached hereto as Appendix A.
| Key Equity Metrics | Fiscal 2018 | Fiscal 2017 | Fiscal 2016 | 3-Year Average |
Common Shares subject to awards granted during year (1) | 0.9 million | 0.3 million | 0.2 million | 0.5 million |
Net burn rate during year (2) | 1.43% | 0.40% | 0.25% | 0.69% |
Dilution at end of year (3) | 7.21% | 6.44% | 5.59% | 6.41% |
Equity Compensation Plan Information | |||||||
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) (a) | Weighted-average exercise price of outstanding options, warrants and rights(2) (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)3 | ||||
| Equity compensation plans approved by security holders | 983,962 | $ | 18.35 | 3,672,968 | |||
| Equity compensation plans not approved by security holders | — | $ | — | — | |||
| Total | 983,962 | $ | 18.35 | 3,672,968 | |||
Board of Directors and Corporate Governance
Role of the Board
The Board’s prime objective is the sustainable enhancement of business performance and Shareholdershareholder value. It is responsible for determining all major policies, ensuring that effective strategies and management are in place, assessing Signet’s performance and that of its senior management, reviewing the systems of internal control and providing oversight of policies relating to corporate social responsibility and other matters.
The Company has a Chairman of the Board who is separate from its CEO and whom the Board has determined to be independent under NYSE Listing Standards. The Board considers it to be important for its effectiveness and efficiency to maintain a clear division of responsibilities between the Director responsible for leadership of the Board and the principal executive responsible for the Company’s day-to-day operations ofimportant to the Company’s business; therefore theBoard’s effectiveness and efficiency. The Board has therefore determined that separating the roles of Chairman and CEO is in the best interests of the Company and its Shareholdersshareholders at the present time.
Independent Directors meet regularly in executive session without management participation. The Chairman presides at those meetings. In addition, at least once each year, the independent
Independent Directors excluding the Chairman, meet separately in executive session to consider the Chairman’s performance. The ChairmanConstitute a Majority of the Nomination and Corporate Governance Committee presides at those meetings.
The Board currently comprisesincludes one executive Director and eleventen independent Directors, including the Chairman. The Board has affirmatively determined that each of the following Directors currently serving on the Board is “independent” under NYSE Listing Standards: H. Todd Stitzer, R. Mark Graf, Zackery Hicks, Helen McCluskey, Sharon L. McCollam, Marianne Miller Parrs, Thomas Plaskett, Nancy A. Reardon, Jonathan Seiffer, Jonathan Sokoloff, Brian Tilzer, and Eugenia Ulasewicz and Russell Walls. Mr. Walls has not been nominated for re-election as a Director at this Annual Meeting consistent with the Director Tenure Policy.Ulasewicz. In determining “independence” the Board considers any commercial, consulting, legal,
accounting, charitable or any other business or non-business relationships that a Director or his or her immediate family may have with the Company. No such relationship exists for any of the independent Directors.
The Board Diversity Policy provides that in reviewing and assessing Board composition, the Nomination and Corporate Governance Committee will consider diversity of skills, industrialindustry experience, background, ethnicity, gender and other qualities in order to maintain an appropriate range and balance of skills, experience and background on the Board. The Board and Nomination and Corporate Governance Committee will monitorare committed to including qualified, diverse candidates in prospective director candidate pools. The Nomination and reviewCorporate Governance Committee monitors and reviews the Board Diversity Policy and its effectiveness on an
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annual basis and reportreports to the Board with respect to any proposed amendments. The Board Diversity Policy is available on request from the Chief Governance Officer & Corporate Secretary and may be downloaded from www.signetjewelers.com.at www.signetjewelers.com/investors/corporate-governance.
The Board adoptedmaintains a Director Tenure Policy, pursuant to which each independent Director must not stand for re-election to the Board at the next Annual Meetingannual meeting of Shareholdersshareholders following the earlier of his or her: (i) fifteenth(1) 15th anniversary of service on the Board, or (ii) seventy-fifth(2) 75th birthday, unless the Board in its absolute discretion determines that it is in the best interests of the Company and its Shareholdersshareholders to nominate the Director for election to serve for an additional period of time. The Director Tenure Policy is available on request from the Chief Governance Officer & Corporate Secretary and may be downloaded from www.signetjewelers.com.at www.signetjewelers.com/investors/corporate-governance.
The Corporate Governance Guidelines provide that the Directors will conduct an annual evaluation of the workings and efficiency of the Board, its committees and individual Directors to ensure that each Director continues to contribute effectively and demonstrates commitment to his or her responsibilities as a Director, and to help assess the future development needs of the Board and the Directors. As part of the annual Board evaluation, the Chairman of the BoardNomination and Corporate Governance Committee will consider the balance of skills, experience, independence and knowledge of the Board, while ensuringand seek diverse representation as described in the Board Diversity Policy. In Fiscal 2018,2020, the Board engaged an independent third-party governance expert as part ofoutside counsel to facilitate its annual Board evaluation process. The independent third partyCounsel interviewed each Director and then summarized and presented to the Board the feedback from these interviews. This review helped shape the focus of the Board’s work for Fiscal 20192020 and beyond.
All Directors are required to attend the Annual Meetingannual meeting of Shareholders.shareholders. The Board schedules a Board meeting on the date of the Annual Meetingannual meeting of Shareholdersshareholders to facilitate attendance at the Annual Meetingannual meeting of Shareholdersshareholders by Directors. All Directors who were in officeserving at the time attended the Annual Meetingannual meeting of Shareholdersshareholders held in June 2017.2019.
In Fiscal 2018,2020, the Board met seventeeneleven times (including meetings by telephone). All incumbent Directors attended at least 75% of the aggregate number of meetings of the Board and those Board committees on which they served during their period of service in Fiscal 2018.2020.
The Board welcomes feedback from Shareholdersshareholders and other interested parties. Any Shareholdershareholder or member of the public who wishes to send communications to the Board, the Chairman or any other individual Director may do so in writing, addressed to Mark Jenkins, Chief Governance Officer &Lynn Dennison, Corporate Secretary, c/o Signet Group Services Limited, Imperial Place 3, MaxwellJewelers, 375 Ghent Road, Borehamwood, Hertfordshire, WD6 1JN, United Kingdom.Akron, Ohio, 44333 U.S.A. All such communications will be reviewed promptly by the Chief Governance Officer & Corporate Secretary and, where considered appropriate, sent to the Director(s) or one or more Committee ChairChair(s) with a copy to the Chairman.
As more fully described in the Company’s Bye-laws and under “Shareholder Q&A”, a shareholder desiring to nominate a person for election as a Director at the Annual Meeting must provide notice by the deadlines established in the Bye-Laws and include in such written notice all of the information required to be disclosed in solicitations of proxies for the election of Directors, or as otherwise required pursuant to Regulation 14A under the Exchange Act. This includes the person’s written consent to being named in the Proxy Statement as a nominee and serving as a Director if elected, the name and address of the proposing shareholder and the number of shares of the Company beneficially owned by such shareholder.
Transactions with Related Parties
The Board has adopted writtena Related Party Transaction Policy setting forth the Company’s policies and procedures for the review, approval or ratification of transactions in which the Company participates and in which any Director, executive officer, Director nominee, five percent beneficial owner of the Company’s voting securities, or immediate family member of such officer, Director, Director nominee or security holder (each, a “Related Person”), has a direct or indirect material interest. The Company’s Corporate Secretary and legal department review any identified transactions. If it is determined, based on the facts and circumstances, that the Director
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or executive officer has a direct or indirect material interest in a transaction, the Corporate Secretary brings the matter to the attention of the Audit Committee for further review. In determining whether to approve or ratify any such transaction, the Board, on the recommendation of the Nomination and Corporate Governance Committee and/or the Audit Committee, (depending on the nature of the transaction), would consider whether, based on the specific facts and circumstances of the transaction, such a transaction would be in the best interests of the Company. Any transaction considered to jeopardize the independence of a Director or be contrary to law or regulation orwould be prohibited. In addition, situations that potentially create or give the appearance of a conflict of interest (also requiredare to be avoided pursuant to the Code of Ethics for Senior Officers and the Code of Conduct) would be prohibited.Conduct. Directors and executive officers annually complete, sign and submit a Directors’ and Officers’ Questionnaire that is designed to identify Related Person transactions and both actual and potential conflicts of interest. The Company also makes appropriate inquiries as to the nature and extent of business it conducts with other companies for whom any of these Related Persons also serve as a director or executive officer.
Since the beginning of Fiscal 2018,2020, the Company has not participated in any transaction, orand there is no currently proposed transaction, in which a Related Person had or will have a direct or indirect material interest.interest, other than as described below.
Transaction with D&L Trading Limited
Family Relationships
Corporate Social Responsibility
Corporate Social Responsibility (“CSR”) is a core component of Signet’s culture and focuses onsupports our business strategy for long-term growth. This involves the integration of human capital management, purposeful stakeholder outreach, and financial and operational resource stewardship. The Company works closely with employees, suppliers, governments, communities and civil society to create value through initiatives across four strategic pillars where the Company believes it can have the most impact: key CSR areas:
People,
Responsible Sourcing,
Environmental Stewardship, and
Charitable Giving. Signet’s efforts around
CSR are about doing the right thing for all of the Company’s stakeholders—Customers, Team Members, Shareholders, Governments, Civil Society, Suppliers and the Communitiesis reflected in which it does business. These efforts are a part of Signet’s Core Values of People First, Lead Bravely, Own It, CUSTOMERS! and the Company strives to put these Values into action because all its stakeholdersStraight Talk. Stakeholders increasingly expect Signet to support thatan environment where all Team Membersteam members are engaged and motivated, ensure the integrity of its supply chain, minimize its environmental impact and make a positiveengage in its communities through financial contributions and visible impact as a good corporate citizen.volunteerism, and our CSR goals address these matters and other challenges we may face.
The identificationCorporate Social Responsibility Committee has oversight of major business risks is carried out in conjunction with operational management and appropriate steps are taken to monitor and mitigate risks. The Chief Legal & Transformation Officer (“CLTO”) coordinatessets the collection of risk management information and is responsiblestrategic direction for assessing the Company’s day-to-day risk management processes and internal control structure, ensuring such processes satisfy the applicable standardsCSR matters at both business function and corporate levels. The findings are reported to the Audit Committee.Signet.
Risk Management & SOX, Manager Enterprise Risk Management & SOX, and UK Manager of Internal Audit & SOX.
In its role in providing oversight of risk management, the Board annually agrees on the prioritized risks impacting the Company and the Board’s associated responsibilities, andresponsibilities. The Board reviews themsuch risks on a quarterly basis; periodically invites business heads to present to the Board their prioritized risks impacting the Company and strategies for risk mitigation; and reviews Signet’s internal controls and risk governance framework and developments thereof.framework. In addition, on a periodic basis, the Board reviews risk and internal audit updates provided by the Chair of the Audit Committee, and on a quarterly basis, it reviews and discusses reports provided by the CLTOChief Legal & Strategy Officer (“CLSO”) and Risk Committee on functional risk management activity.
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such processes satisfy the applicable standards at both business function and corporate levels. The findings are reported to the Audit Committee.
The Audit Committee and the full Board receive regular updates from management on information technology security, internal and external security reviews, data privacy and security programs, risk assessments, breach preparedness and response plans in overseeing the Company’s cybersecurity protocols. The Audit Committee regularly engages with management to monitor the risks related to this complex and evolving area.
The Risk Committee, which is chaired by the CLSO, has a written charter approved by the Board, and its members include the CEO, Chief Financial Officer, Chief Supply Chain Officer, Chief Information Officer, Chief Marketing Officer and Executive Vice President - Jared , Chief People Officer, Chief Information Security Officer, Chief Communications Officer, Chief Digital Innovation Officer and President - James Allen, Executive Vice President Global Store Operations, President - Kay, Zales and Peoples, Senior Vice President Piercing Pagoda, Managing Director - U.K., Vice President Compliance, Vice President Internal Audit, Senior Director Enterprise Risk Management.
The Risk Committee operates under a written charter and meets quarterly to review Signet’s risk management processes, consolidated principal risks identified by the Company and emerging issues and new regulations. The CLSO and Chair of the Audit Committee meet periodically to discuss key matters arising from Signet’s risk management process, and the Risk Committee submits a risk review update to the Board on a quarterly basis and a risk management assurance update to the Audit Committee on an annual basis. A U.K. sub-committee has also been established, chaired by the Managing Director - U.K. The Senior Director Enterprise Risk Management attends all sub-committee meetings to provide a consistent approach and additional review.
Compensation Policies and Risk Taking
The Compensation Committee has evaluated the Company’s policies and practices of compensating its employees and has determined that they are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee has reached this conclusion based in part on a review conducted by its independent consultant that analyzed the Company’s compensation policies and practices for all employees, including executive officers. The Compensation Committee noted several aspects of the compensation programs that reduce the likelihood of excessive risk-taking:
Compensation for the executive officers is a mix of fixed and variable awards, with share-based compensation that vests in accordance with both time- and performance-based criteria;
The executive officer annual incentive program is predominantly based on operating income held at constant currency,and comparable store sales, which the Committee believes isare closely tied to the creation of long-term shareholder value. Performance targets for executive officers, which are reviewed and approved by the Compensation Committee, are set in advance, and above-target payouts are reviewed to ensure a reasonable sharing of value created between management and Shareholders.shareholders. Financial performance is audited by the Company’s external auditors before amounts are paid out under the annual incentive program;
Short-term and long-term incentive programs use multiple performance metrics, including annual incentives focused on operating income and same store sales and performance-based restricted share units using three-year cumulative adjusted operating income and return on invested capital;
Equity compensation is a combination of annually granted time-based restricted shares that generally vest ratably over three years and performance-based restricted share units that vest over three-year overlapping vesting periods. This approach addresses longer “tail” risks as participants remain exposed to the risks associated with their decisions through their ongoing unvested awards;
Long-term incentives are awarded in the form of whole share awards (instead of options), driving long-term share value creation, rather than potentially rewarding share price volatility;
The Company maintains conservative equity utilization under share-based incentive plans;
The CEO and other executive officers, including all NEOs, are subject to share ownership requirements;
The Company prohibits hedging, of, andpledging or speculation in,of Company shares by employees and Directors;
The Company has a clawback policy that applies to all employees who receive incentive awards and to all short- and long-term incentives.incentives in the event of an overpayment. Certain repayment obligations may be triggered if there is a material restatement of the financial statements. Similarly, in the interest of fairness, should a restatement result in an under paymentunderpayment of incentive compensation, the Company will make up any difference; and
The Compensation Committee is comprised entirely of independent Directors and has engaged an independent consultant to review the risks associated with its compensation programs; itprograms. It reviews the payouts under the annual and long-term incentive
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program, and it regularly benchmarks executive compensation against a carefully constructed and regularly reviewed peer group.
Corporate Governance Guidelines and Code of Conduct and Ethics
The Company strives to:
Act in accordance with the laws and customs of each country in which it operates;
Adopt proper standards of business practice and procedure;
Operate with integrity; and
Observe and respect the culture of each country in which it operates.
To that end, the Company has adopted corporate governance guidelinesCorporate Governance Guidelines that address a number of corporate governance matters in accordance with NYSE listing rules. These guidelines may be downloaded from www.signetjewelers.com/guidelines. The Company strives to: act in accordance with the lawsrules and customs of each country in which it operates; adopt proper standards of business practice and procedure; operate with integrity; and observe and respect the culture of each country in which it operates. To that end, the Company has adopted a statement of social, ethical and environmental principles and supporting policies applicable to all officers and employees. In addition, the Company has a policy on business integrity, as well as more detailed guidance and regulations as part of its staff orientation, training and operational procedures. These policies include the Code of Conduct, which is applicable to all Directors, officers and employees as required by NYSE listing rules, and the Code of Ethics for Senior Officers, which applies to the Chairman, CEO, Directors and other senior officers. Copies of the Corporate Governance Guidelines and these codes are available on request from the Chief Governance Officer & Corporate Secretary and may be downloaded from at www.signetjewelers.com/ethics. ethics.
The Company intends to satisfy theany disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Ethics for Senior Officers for the Company’s principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions by posting such information on its website.
Board Committees
Certain matters are delegated to Board Committees, each with a written charter detailing its purpose, procedures, responsibilities and powers.Committees. The principal committees are:are the Audit Committee, Compensation Committee, Nomination and Corporate Governance Committee, and the Corporate Social Responsibility Committee. The composition of each Board Committee is set out below. The Chief Governance Officer & Corporate Secretary acts as Secretary to each Committee.
Each Board Committee acts in accordance with a written charter detailing its charter,purpose, procedures, responsibilities and powers, as adopted by the Board, which is reviewed annually. Copies of the charters are available on request from the Chief Governance Officer & Corporate Secretary and may be downloaded from www.signetjewelers.com.under “Investors - Governance Documents” at www.signetjewelers.com/investors/corporate-governance.
The composition of each principal Board Committee is detailed below.below, with Committee Chairs designated with a “C”. All members are independent under the NYSE Listing Standards.
| Independent Director | Audit Committee | Compensation Committee | Nomination & Corporate Governance Committee | Corporate Social Responsibility Committee |
| H. Todd Stitzer | ||||
| R. Mark Graf | ● | ● | ||
| Zackery Hicks | ● | |||
| Helen McCluskey | ● | C | ||
| Sharon L. McCollam | ||||
| C | ||||
| Nancy A. Reardon | ||||
Jonathan | ● | ● | ||
| Brian Tilzer | ● | ● | ||
| Eugenia Ulasewicz | ● | C | ||
(1) Mr. Walls has not been nominated for re-electionMarianne Parrs served as a Director at this Annual Meeting consistent withmember of the Director Tenure Policy.Audit and Corporate Social Responsibility Committees, and Thomas Plaskett served as a member of the Compensation and Nomination & Corporate Governance Committees until each retired from the Board in June 2019. Mr. Sokoloff served as a member of the Compensation and Nomination & Corporate Governance Committees, until he was replaced as a member of such committees by Mr. Seiffer upon his election to the Board in June 2019.
The primary function of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities with respect to the Company’s financial matters.
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Ms. McCollam serves on the audit committees of three additional publicly traded companies. The Board of Directors has determined that Ms. McCollam’s simultaneous service on more than three public company audit committees does not impair her ability to effectively serve on the Company’s Audit Committee due to, among other factors, her background as both a Certified Public Accountant and as the former Chief Financial Officer of Best Buy Co., Inc.
The Audit Committee’s responsibilities include:
Overseeing the Company’s cybersecurity protocols; and
The Audit Committee met ten times in Fiscal 2020.
Compensation Committee
The primary function of the Compensation Committee is to set compensation policies for senior executives and ensure that they are fairly rewarded, taking into account the interests of shareholders and the financial health of the Company, as well as ensure the Company’s compensation policies remain competitive.
The Compensation Committee’s responsibilities include:
The Compensation Committee has delegated authority to the CEO to grant share-based awards under the Omnibus Incentive Plan to non-executive officers and others who do not report to the CEO subject to certain parameters and with a total annual grant value not to exceed $2 million.
The compensation of the independent Directors is determined by the full Board on the basis of recommendations made by the Compensation Committee after consultation with the Chairman, CEONomination and Corporate Governance Committee and the Compensation Committee’s independent compensation consultant. Such recommendations are made after consideration of, among other factors, external comparisons, time commitments and the responsibilities of the independent Directors.
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The Compensation Committee met seven times in Fiscal 2018.
The Compensation Committee met five times in Fiscal 2020.
For additional information regarding the operation of the Compensation Committee, including the role of consultants and management in the process of determining the amount and form of executive compensation, see CDA below.
Nomination and Corporate Governance Committee
The Compensationprimary function of the Nomination and Corporate Governance Committee delegates authorityis to a sub-committee, consistingnominate Directors and provide oversight with respect to Board composition, implementation of any two independent Directors, that has authority between Compensation Committee meetings to (i) approve benefitsthe Company’s Corporate Governance Guidelines and perquisites for non-NEOs, (ii) review and approve any modification to any non-equity based incentive compensation plan for non-NEOs, (iii) review and approve employment, benefit and severance agreements for non-NEOs, and (iv) determine and approve the compensation levels for non-NEOs.
The Nomination and Corporate Governance Committee’s responsibilities include:
CEO, Chairman and Board succession planning, as well as Board and senior management succession;oversight of succession planning for other executive officers;
The Nomination and Corporate Governance Committee uses the services ofmay engage external recruitment agencies to identify suitable candidates for senior executive poststo serve as CEO and for all Board appointments, with interviews carried out in accordance with a formal process.
In evaluating candidates, the criteria that the Nomination and Corporate Governance Committee generally views as relevant and is likely to consider include experience particularly(particularly experience that is specifically relevant to the business or reflects an area of expertise,expertise) and background or diversity that the Committee feels is either missing or particularly important to the Board’s effectiveness and efficiency. The candidate must possess the highest level of personal and professional ethics and integrity and be prepared to consistently commit the time and effort necessary to fulfill the duties and responsibilities of the position. The Board Diversity Policy provides that, in reviewing and assessing Board composition, the Committee will consider diversity of skills, industry experience, background, ethnicity, gender and other qualities in order to maintain an appropriate range and balance of skills, experience and background on the Board. In Fiscal 2018,The Company is authorized to engage and has in the Companypast engaged third-party director search firms.
When the role of the Chairman or any matter relating to succession of the role is discussed, the Chairman may be consulted, but the responsibility for preparing a job specification and making any recommendation to the Board rests with the Nomination and Corporate Governance Committee.
The Nomination and Corporate Governance Committee met sixfour times in Fiscal 2018.2020.
The primary function of the Corporate Social Responsibility Committee is to set guidance and direction with respect to policies and progress on social, ethical, environmental and community issues pertaining to the Company’s business.
The Corporate Social Responsibility Committee’s responsibilities include:
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Monitoring the Company’s engagement with external stakeholders and other interested parties;parties regarding CSR initiatives and programs;
Overseeing and monitoring the Company’s culture to create a diverse and productive workplace; and
Reviewing the Company’s annual Corporate Social Responsibility Report.
In carrying out its responsibilities, the Corporate Social Responsibility Committee works to identify and monitor external developments likely to have a significant influence on the Company’s conduct as a good corporate citizen, as well as review metrics set in relation to the Company’s four Corporate Social Responsibility Pillars of People, Responsible Sourcing, Environmental Stewardship and Charitable Giving. The Corporate Social Responsibility Committee is authorized to engage independent advisers in carrying out its responsibilities.
The Corporate Social Responsibility Committee met threefour times in Fiscal 2018.2020.
Proposal 2: Appointment of Independent Auditor and Authorization of the Audit Committee to Determine its Compensation
(Item 2 on the Proxy Card)
Proposal 2 is to appoint KPMG LLP (“KPMG”) as independent auditor to the Company until the end of the next annual meeting of shareholders and authorize the Audit Committee of the Board to determine its compensation. The Audit Committee is responsible for the recommendation, compensation, retention and oversight of the independent auditor and has recommended KPMG, the U.S. member firm of KPMG International, as the independent registered public accounting firm to audit the Company’s financial statements and effectiveness of internal control over financial reporting of the Company until the end of the Company’s annual meeting of shareholders in 2021. While shareholders are required to appoint the independent auditor pursuant to Bermuda law, the Audit Committee is responsible for recommending which independent auditor should be appointed. In recommending KPMG, the Audit Committee has considered, among other things, whether the non-audit services provided by KPMG were compatible with maintaining KPMG’s independence from the Company and has determined that such services do not impair KPMG’s independence. The Audit Committee considered whether there should be a rotation of the independent auditor, and the members of the Audit Committee currently believe that the continued retention of KPMG to serve as the Company’s independent auditor is in the best interests of the Company and its shareholders. |
Fees and Services of KPMG
The Audit Committee has adopted a policy requiring its advance approval of the Company’s independent registered public accounting firm’s fees and services. In Fiscal 2020, all KPMG services and fees were reviewed and pre-approved by the Audit Committee (or Chair of the Audit Committee for non-audit work up to $250,000). This policy also prohibits the Company’s independent registered public accounting firm from performing certain non-audit services for the Company including: (1) bookkeeping, (2) systems design and implementation, (3) appraisals or valuations, (4) actuarial services, (5) internal audit, (6) management or human resources services, (7) investment advice or investment banking, (8) legal services and (9) expert services unrelated to the audit. All fees paid by the Company to KPMG for Fiscal 2020 and Fiscal 2019 as shown in the table below were approved by the Audit Committee pursuant to this policy.
The following table presents fees for professional audit services provided by KPMG for Fiscal 2020 and Fiscal 2019 for their respective audits of the Company’s consolidated financial statements and the effectiveness of internal control over financial reporting for Fiscal 2020 and Fiscal 2019, reviews of the Company’s unaudited condensed consolidated interim financial statements and other services rendered by KPMG during Fiscal 2020 and Fiscal 2019.
Fiscal 2020 (millions) | Fiscal 2019 (millions) | |||||
| Audit Fees | $ | 4.1 | $ | 4.0 | ||
Audit-Related Fees(1) | $ | — | $ | 0.1 | ||
Tax Fees(2) | $ | 0.2 | $ | 0.3 | ||
| All Other Fees | $ | — | $ | — | ||
| Total Fees | $ | 4.3 | $ | 4.4 | ||
(1) | Audit-related fees consisted principally of assurance-related services that are reasonably related to the performance of the audit or review of financial statements. |
(2) | Tax fees consisted principally of professional services rendered for tax compliance and advisory services. |
A representative of KPMG will attend the 2020 Annual Meeting of Shareholders to respond to appropriate questions raised by shareholders and will be afforded the opportunity to make a statement at the Meeting, if he or she desires to do so.
The Board of Directors Recommends a Vote “For” this Proposal.
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Report of the Audit Committee
The Company’s Annual Report on Form 10-K includes the audited consolidated balance sheets of the Company and its subsidiaries as of February 3, 20181, 2020 (“Fiscal 2018”2020”) and January 28, 2017February 2, 2019 (“Fiscal 2017”2019”), and the related audited consolidated income statements, statements of comprehensive income, statements of cash flow,flows, and statements of shareholders’ equity, for each of Fiscal 2018,2020, Fiscal 2017,2019, and the fiscal year ended January 30, 2016February 3, 2018 (“Fiscal 2016”2018”). TheThese balance sheets and statements (the “Audited Financial Statements”) were audited and are the subject of reports by the Company’s independent registered public accounting firm, KPMG LLP (“KPMG”).KPMG. The Audited Financial Statements are available at www.signetjewelers.com.www.signetjewelers.com/investors/financial-reports.
The Audit Committee reviewed and discussed the Audited Financial Statements with management and otherwise fulfilled the responsibilities set forth in its charter. An evaluation of the effectiveness of the Company’s internal control over financial reporting was discussed by the Audit Committee with management and KPMG.
The Audit Committee also discussed applicable matters under Public Company Accounting Oversight Board (“PCAOB”) standards with KPMG, including the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, adopted by the PCAOB.KPMG. The required written disclosures and letter regarding KPMG communications with the Audit Committee and independence were received by the Audit Committee, and independence was discussed with KPMG.
Based upon the review and discussions referred to above, the Audit Committee recommended to the Company’s Board that the Audited Financial Statements be included in the Company’s Annual Report onFiscal 2020 Form 10-K for Fiscal 2018.10-K.
The Audit Committee annually reviews the independence and performance of KPMG, including its lead audit partner and engagement team, in connection with the Committee’s responsibility for the appointment and oversight of the Company’s independent public accountants and determines whether to re-engage KPMG or consider other audit firms. In doing so, the Committee considers, among other things, such factors as:
KPMG’s capability and expertise;
KPMG’s tenure as the Company’s independent public accountants and their familiarity with ourits operations, businesses, accounting policies and practices, and internal control over financial reporting.
In accordance with the SEC’s rules and KPMG'sKPMG’s policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide services to the Company. For lead partners, the maximum number of consecutive years of service in that capacity is five years. Accordingly, theThe process for selection of the Company’s lead partner involves meetings between the members of the Audit Committee and the candidate for the role, as well as a discussion by the full Audit Committee and with management.
Based on the foregoing considerations, the Audit Committee believes that the continued retention of KPMG to serve as the Company’s independent public accountants is in the best interests of the Company and its Shareholders.shareholders.
MEMBERS OF THE AUDIT COMMITTEE
R. Mark Graf
Helen McCluskey
Executive Officers of the Company
The names and ages of and positions held by the executive officers of the Company are:are presented in the following list.
| Executive Officer | Age | Position | Year Joined Signet |
| Virginia C. Drosos | 55 | Chief Executive Officer | 2017 |
| Michele Santana | 47 | Chief Financial Officer | 2010 |
Steven Becker(1) | 61 | Chief Human Resources Officer | 2005 |
| Lynn Dennison | 54 | Chief Legal & Transformation Officer | 2011 |
| Oded Edelman | 51 | President of JamesAllen.com and Chief Digital Innovation Advisor | 2017 |
| Sebastian Hobbs | 48 | President & Chief Customer Officer | 2011 |
Mark Jenkins(1) | 60 | Chief Governance Officer & Corporate Secretary | 2004 |
| Howard Melnick | 56 | Chief Information Officer | 2017 |
George Murray(1) | 62 | Chief Retail Insights & Strategy Officer | 1992 |
| Carol Schumacher | 61 | Chief Communications Officer | 2018 |
| Executive Officer | Age | Position |
| Virginia C. Drosos | 57 | Chief Executive Officer |
| Joan M. Hilson | 60 | Chief Financial Officer |
| J. Lynn Dennison | 56 | Chief Legal & Strategy Officer and Corporate Secretary |
| Oded Edelman | 53 | Chief Digital Innovation Advisor and President - JamesAllen.com |
| Mary Elizabeth Finn | 59 | Chief People Officer |
| Stephen E. Lovejoy | 54 | Chief Supply Chain Officer |
| Howard A. Melnick | 58 | Chief Information Officer |
| Jamie L. Singleton | 58 | President - Kay, Zales and Peoples |
| Rebecca S. Wooters | 49 | Chief Digital Officer |
Virginia C. Drosos, 5557—see biographical information in section “Proposal 1: Election of Directors - Virginia C. Drosos” of this Proxy Statement.Drosos.”
J. Lynn Dennison, 54,56, was appointed Chief Legal & TransformationStrategy Officer in February 2018.August 2019 and Corporate Secretary in January 2019. Ms. Dennison joined the Sterling Jewelers DivisionCompany in January 2011 as Senior Vice President, Legal, Compliance and Risk Management, and was promoted to Signet Chief Legal, Risk & Corporate Affairs Officer in December 2014.2014 and Chief Legal & Transformation Officer in February 2018. During her tenure at Signet, she has led numerous functional groups, including Real Estate and Store Planning, Indirect Sourcing and Internal Audit. Prior to joining Signet, Ms. Dennison held other senior legal positions, most recently at Tecumseh Products Company.
Oded Edelman, 51,53, became Chief Digital Innovation Advisor in September 2017.2017 and has served as President of JamesAllen.com since 2007. Mr. Edelman has beenserved as the Chief Executive Officer of R2Net Inc., the parent company of online diamond and bridal jewelry retailer, James Allen, since he founded it in 2007. He also serves as the President of JamesAllen.com. Signet completed the acquisition of R2Net Inc. on September 12, 2017. Mr. Edelman has decades of experience in the diamond industry.
Stephen E. Lovejoy, 54, joined Signet as the Company’s new Chief Supply Chain Officer in June 2018. Steve most recently served as Chief Operating Officer for Glanbia PLC fromJanuary 2016 to May 2018. Prior to Glanbia, he served as Senior Vice President Global Supply Chain at Starbucks Coffee Company from March 2011. Prior2010 to joining Signet, Mr. Hobbs held other senior retail positions, most recentlyDecember 2015; as Group Commercial DirectorVice President, Global Supply Chain for Method Home Products from July 2009 to February 2010; and as Vice President, Product Supply International at Blacks Leisure Group plc. Mr. Hobbs is also a Director of JewelersThe Clorox Company for Children.
Howard A. Melnick, 56,58, became Chief Information Officer (CIO) in February 2018, following his service in this position as interim CIO.Chief Information Officer since November 2017. Prior to Signet, Mr. Melnick was CIOChief Information Officer at Ralph Lauren. PreviousLauren from 2008 to 2017.Mr. Melnick previously held technology leadership positions were at Marriott International and Pepsi-Cola International. He is also a Certified Public Accountant.
Proposal 3: Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s Named Executive Officers
(Item 3 on the Proxy Card)
| The Board recognizes the interest shareholders have in the compensation of executives. In recognition of that interest and as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), we are asking shareholders to cast a vote, on a non-binding advisory basis, on the compensation of the Company’s NEOs as disclosed in this Proxy Statement in accordance with Section 14A of the Exchange Act (also referred to as “Say-on-Pay”). |
As described in the CDA, Signet’s compensation philosophy is to deliver competitive total compensation for achieving annual and long-term financial goals that will recruit, retain, incentivize and reward leaders who will drive the creation of shareholder value. Total compensation is targeted at approximately the median of a custom group of comparator companies.
The Compensation Committee believes that the Company’s executive compensation programs, executive officer pay levels and individual pay actions approved for executive officers, including NEOs, directly align with the Company’s executive compensation philosophy, fully support the Company’s goals and provide an appropriate balance between risk and incentives. Shareholders are urged to read the CDA section of this Proxy Statement, which discusses in greater detail how compensation policies and procedures implement Signet’s executive compensation philosophy, as well as the compensation tables and narrative discussion.
Shareholders are asked to indicate their support for the Company’s NEO compensation as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, shareholders are asked to vote FOR the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to Signet’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.”
Shareholders should note that the vote is advisory and not binding on the Company and its Board or Compensation Committee. The Board and Compensation Committee value the opinion of shareholders, and to the extent there is any significant vote against the NEO compensation as disclosed in the Proxy Statement, shareholder concerns will be considered and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
The Board of Directors Recommends that Shareholders Vote “For” The Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s NEOs as Disclosed in this Proxy Statement.
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Executive Compensation
Table of Contents
| COMPENSATION DISCUSSION AND ANALYSIS | |
| Introduction | |
| Executive Summary | |
| Our Commitment to Pay for Performance | |
| How Executive Compensation is Determined | |
| Competitive Benchmarking Analysis | |
| Elements of NEO Compensation | |
| Other Policies and Practices | |
| Deductibility of Executive Compensation | |
| Modifications to Compensation Programs in Response to the COVID-19 Pandemic | |
| COMPENSATION COMMITTEE REPORT | |
| EXECUTIVE COMPENSATION TABLES | |
| Summary Compensation Table | |
| Grants of Plan-Based Awards | |
| Outstanding Equity Awards | |
| Option Exercises and Shares Vested | |
| Non-Qualified Deferred Compensation | |
| NEO AGREEMENTS | |
| Termination Agreements | |
| Separation Agreement | |
| TERMINATION PAYMENTS | |
| CEO PAY RATIO | |
Compensation Discussion and Analysis
Introduction
This CDACompensation Discussion and Analysis section (“CDA”) describes the objectivesmaterial components of our executive compensation program for our named executive officers (each, an “NEO”, and collectively, the role“NEOs”), whose compensation is set forth in the Executive Compensation Tables contained in this Proxy Statement. We also provide an overview of the Compensation Committeeour executive compensation philosophy and discusses the philosophyobjectives upon which the Compensation Committee (the “Committee”) bases its decisions in its endeavors to meet these objectives. The CDA also describes the Company’sIn addition, we explain our executive compensation policies and the material elements of compensation awarded to, earned by or paid to the following NEOs.
| NEO | Position |
| Virginia C. Drosos | Chief Executive Officer |
| Chief Financial Officer | |
| Mary Elizabeth Finn | Chief People Officer |
| Jamie L. Singleton | President - Kay, Zales and Peoples |
| Michele Santana | Former Chief Financial Officer(1) |
(1)George Murray will be leaving Ms. Santana’s service as Chief Financial Officer ceased on April 3, 2019, but she remained employed as an advisor through April 30, 2019.
Unless otherwise noted, references to the “CFO” or “Chief Financial Officer” in this CDA refer to Ms. Hilson.
In light of the impact the COVID-19 pandemic has had on the global economy and retail industry and Company in particular, the Company effective May 5, 2018.
Compensation Philosophy
| Attract and retain high caliber executives. | Executive officers have base salaries and benefits that are market competitive and incentivize retention. In addition, executive long-term incentives include a portion of time-based equity that vests over three years. |
| Align interests of senior management with | A significant portion of total compensation for executives |
| is delivered through equity-based compensation. | |
| fixed pay is base salary. | |
| performance through performance-based compensation elements. | Executives participate in both STIP (annual) and LTIP (three-year) incentives with robust performance goals. |
| efficient use of capital. | |
| All NEOs are subject to share ownership guidelines. |
The Compensation Committee concludedhas established an executive compensation program that Shareholders were supportivecontains the following key components:
| Component | Objective | Key Features and Alignment |
| Base salary | Provide a fixed level of pay that is not at risk and reflects individual experience and ongoing contribution and performance. | Designed to be competitive and retain key executive officers and allow us to attract and retain high caliber executive officers to lead our strategic plan. |
| Annual bonus (STIP) | Motivate and reward achievement of annual financial results against established annual goals of the Company. | Cash awards dependent on the degree of achievement against annual performance targets that align with our strategic plan and focused on profitable growth. |
| Long-term incentives (performance-based restricted share units and time-based restricted shares or restricted share units) | Align management with long-term shareholder interests; retain executive officers; motivate and reward achievement of sustainable earnings growth and returns over time. | Time-based restricted share awards vest upon the continuance of service; performance-based restricted share units require achievement of Company financial goals over a three-year performance period and require continued service. |
In addition, executives receive a benefits package, which includes our deferred compensation plan, 401(k) Plan, health and life insurance and reimbursement of relocation expenses. The objective of the Company’sbenefits package is to retain executive officers over the course of their careers.
Total Direct Compensation
The Committee strives to achieve an appropriate mix between the various elements of our compensation program to meet our compensation objectives. A significant portion of executive compensation designis intended to be variable and philosophy. The Compensation Committee will continuetied to consider Say-on-Pay results in the design of the Company’s compensation program.
The following charts illustrate the total target direct compensation mix for the Company’s current CEO and other NEOs (on average targetand excluding the compensation mix for other current NEOs, but does not reflect actual compensation mix for Fiscal 2018, as discussed below.of our former executive, Ms. Santana, and discretionary special awards and sign-on bonuses). As these charts show, the Company aligns pay levels for its NEOs with the Company’s performance. Approximatelyapproximately 85% of the CEO’s total target compensation, and approximately 67% of the average target total compensation of other NEOs, is variable and based on performance and/or aligned with Shareholdershareholder interests over the short-term or long-term.
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Summary of Target and Realized Compensation of our Chief Executive Officer in Fiscal 2020
In Fiscal 2020, the Compensation Committee did not increase the target compensation of our CEO. The following tables set forth a comparison between Fiscal 2019 and Fiscal 2020 total target compensation, as well as the realized compensation amount during Fiscal 2020.
Target Compensation
| Compensation Component | FY 19 Target | FY 20 Target | % Increase Year-Over-Year |
| Base Salary | $1,500,000 | $1,500,000 | 0% |
| Annual STIP Bonus | $2,250,000 | $2,250,000 | 0% |
| Total Annual Cash | $3,750,000 | $3,750,000 | 0% |
| Restricted Shares Granted | $2,100,000 | $2,100,000 | 0% |
| Performance Based RSUs Granted | $3,900,000 | $3,900,000 | 0% |
| Total Long-Term | $6,000,000 | $6,000,000 | 0% |
| Total Target Compensation | $9,750,000 | $9,750,000 | 0% |
Fiscal 2020 Realized Compensation (STIP and LTIP)
| Compensation Component | Vesting Period | Target Compensation Value | Amount Earned | |
| $ Value | % of Target | |||
| Annual STIP Bonus | FY 20 | $2,250,000 | $2,853,000 | 126.8% |
| Restricted Share Vesting | FY 18-20 | $2,100,000 | $939,459(1) | 44.7% |
| Performance Based RSU Vesting | FY 18-20 | $3,900,000 | $0 | 0% |
| Total | $8,250,000 | $3,792,459 | 46.0% | |
(1) Value based on the closing price of the Company’s common shares on January 31, 2020, the last trading day of Fiscal 2020 ($24.31).
Commitment to Sound Compensation Practices and Governance
In designing and administering the Company’s compensation program, the Compensation Committee periodically reviews, benchmarks and has sought to align the program with best practices and principles, such as:
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• Pay that is strongly linked to performance • Independent director oversight of compensation and benefit programs • Rigorous stock ownership requirements • Strong risk mitigation, including balanced performance metrics • Claw back policy in place • Independent compensation consultant engaged • Vesting of performance-based equity awards require meeting established goals and vest over multiple years | • Specified maximum payout caps on all variable compensation • Double-trigger vesting for severance and change-in-control benefits and LTIP awards • Limited use of perquisites • No excise tax gross-ups in connection with a change in control • No dividend equivalents paid on unvested performance share units • No hedging transactions, short sales or pledging of Company stock • No resetting of performance targets |
Consideration of “Say-on-Pay” Vote and Investor Outreach
In June 2019, our Say-on-Pay proposal passed with 85.1% of the shareholder advisory votes cast in favor of the Company’s executive compensation program. The Compensation Committee concluded that shareholders were supportive of the Company’s executive compensation philosophy and design. The Compensation Committee will continue to consider Say-on-Pay results in the design of the Company’s compensation program.
In Fiscal 2020, we expanded our investor outreach program by including our Board in reaching out to our four largest investors, representing over 40% of shares outstanding. Although only one investor accepted our invitation, we will continue our investor outreach efforts to assure alignment of our compensation practices with shareholder interests. The Company’s outreach efforts are intended to better understand our shareholders’ viewpoints on our executive compensation program.
Our Commitment to Pay for Performance
Our strong commitment to pay-for-performance is demonstrated by the link between actual performance and incentive payouts, both short- and long-term. The Compensation Committee sets short- and long-term performance goals at challenging levels to incentivize outstanding achievement by our executive officers. As disclosed above, 63% of our CEO’s and an average of 52% of our other NEOs’ direct compensation opportunities are based on performance. As reported in the Annual Report on Form 10-K and in other public disclosures, we made meaningful progress against the goals of the Path to Brilliance transformation plan during Fiscal 2020, and fourth quarterresults exceeded expectations, which impacted full year results. This strong performance during Fiscal 2020 resulted in a payout under our STIP, but such performance did not, when combined with Fiscal 2018 and 2019 performance, result in a performance-based restricted stock unit (“PSU”) payout under the LTIP.
The STIP aligns short-term cash incentives with the level of individual performance and contributions to the Company’s overall performance. For NEOs at the corporate level (all NEOs other than Ms. Singleton, who is at the divisional leadership level), 100% of the STIP award opportunity is based on the achievement of corporate-wide performance goals (60% on Adjusted Operating Income of Signet and 40% on Same Store Sales), while divisional leaderships’ STIP award opportunity is based equally on the achievement of the corporate-wide performance goals referenced above and banner specific performance goals (60% on Adjusted Operating Income and 40% on Same Store Sales for each applicable banner). Payouts of the STIP range from 0% to 200% of target based on the level of performance achievement during the applicable fiscal year.
PSUs granted under the LTIP align long-term incentives with corporate-wide performance over a three-year period for all participants. Payout of PSUs under the LTIP is based on the achievement of metrics established at the beginning of each three-year cycle (80% on Cumulative Consolidated Operating Income and 20% on Return on Invested Capital). Payouts may range from 0% to 200% of target, based on the level of performance achievement during the applicable three-year performance period, with a payout of 25% of target at threshold performance.
More information with respect to actual performance and resulting payouts under the STIP and LTIP, along with other elements of our executive compensation program, is provided below.
How Executive Compensation Is Determined
Role of the Compensation Committee
The Compensation Committee sets the compensation for the Company’s NEOs to motivate them to achieve Signet’sour business objectives and ensure that they are fairlyappropriately rewarded for their individual contributions to the Company’sour performance. In doing so, the Compensation Committee considers the interests of Shareholders,shareholders, the financial and commercial health of the business, compensation parameters for all levels
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of the organization, and other conditions throughout Signet. The Compensation Committee also ensures that Signet’sour executive compensation program remains competitive, as discussed above.
The Compensation Committee’s objective is to deliver and maintain competitive executive compensation in accordance with our compensation principles. In doing so, the Committee:
Annually reviews and approves executive officer incentive programs, goals and objectives to align with our Company’s performance targets and business strategies;
Evaluates each executive officer’s responsibilities and actual performance in light of our Company’s performance goals and business strategies;
Evaluates the competitiveness of each executive officer’s compensation package against our peer group, along with other factors such as an executive officer’s level of experience, the Company’s desire to retain the executive and the availability of replacement personnel;
Reviews tally sheets covering all elements of compensation, including benefits, perquisites and potential payments upon termination or change of control, to understand how each element of compensation relates to other elements and to the compensation package as a whole; and
Approves and recommends to the full Board any changes to the total compensation package of each executive officer, including but not limited to, base salary, annual and long-term incentive award opportunities, payouts and retention programs.
Following this analysis, the Committee regularly uses externalsubmits its executive compensation recommendations to the independent advice. Meridian performsmembers of our Board of Directors for final approval.
The Committee’s charter, which more fully sets out its duties and responsibilities, as well as other matters, can be found on our website at www.signetjewelers.com/investors/corporate-governance. In addition, please see the description of the Committee included under “Compensation Committee” within the “Board of Directors and Corporate Governance” section of this Proxy Statement.
Role of Compensation Consultants
Our independent compensation consultant, Semler Brossy, is retained by the Compensation Committee to provide the following services on behalffor the benefit of the Compensation Committee:
Competitive market pay analysis for the CEO, other executive positionsofficers and non-employee Directors;
Market trends in CEO, other executive officer and non-employee Director compensation;
Pay-for-performance analysis and review of risk in the Company’s pay programs;
Ongoing support with regard to the latest relevant regulatory, governance, technical and/orand financial considerations impacting executive compensation and benefit programs;
Assistance with the design of executive compensation or benefit programs, as needed;
Annual review of the compensation benchmarking peer group; and
Other items as determined appropriate by the Chair of the Compensation Committee.
In June 2019, the Committee engaged Semler Brossy to replace Meridian as the Company’s independent compensation consultant after a comprehensive RFP process. For more information on the Committee’s independent compensation consultant, Meridian, see the disclosure under “Compensation Committee” within the “Board of Directors and Corporate Governance” section “Role of the Board - Compensation Committee.”this Proxy Statement.
The CEO providesreviews with the Compensation Committee with a performance assessment for each of the other NEOs and, makes recommendations forat the beginning of each fiscal year, recommends their target compensation levels, including salaries and target bonus levels,STIP and equity awards.LTIP incentive levels. The Compensation Committee usesfactors in these assessments and recommendations, along with other information, to determine final NEO compensation. The Chief Financial Officer
and Chief Human ResourcesPeople Officer regularly attend Compensation Committee meetings at theupon request of the Committee, but are not present for the executive sessions or for any discussion of their own compensation.
When analyzing the market data provided by Meridian,our compensation consultant, the Compensation Committee focuses on a peer group of companies for benchmarking purposes where possible. The Compensation Committee annually reviews the composition of the peer group to assess its continued appropriateness. The Fiscal 20182020 peer group companies had the following characteristics:
International retail operations;
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Headquarters in North America and traded on a North American stock exchange; and
| Abercrombie & Fitch Co. | Ulta Beauty Inc. | ||
| American Eagle Outfitters, Inc. | |||
| Urban Outfitters Inc. | |||
| L Brands, Inc. | V.F. Corporation | ||
| Tiffany & Co. | Williams-Sonoma, Inc. | ||
The charttable below shows a statistical comparison of revenues and market capitalization between the total revenues (in millions)Company and the peer group as of the end of Fiscal 2017 for all peers.2020.
| Measure | Signet | Peer Minimum | Peer Maximum | Peer Median | Peer Average | ||||||||||
| Revenue (in billions) | $ | 6.1 | $ | 3.6 | $ | 15.5 | $ | 6.7 | $ | 7.7 | |||||
| Market Capitalization (in billions) | $ | 1.3 | $ | 1 | $ | 33.1 | $ | 5.6 | $ | 7.8 | |||||
This peer group was the primary source of market data for the purposes of executive compensation benchmarking but was supplemented by Equilar survey data covering a broader group of retail companies with similar revenues for select executives (e.g., Ms. Dennison and Ms. Finn). Management did not have any input into the companies included in the peer group.
In the aggregate, target total compensation for the NEOs in Fiscal 2020 was in line with the exceptionpeer group median. The Committee generally targets median pay positioning for its executives, but individuals may vary based on a variety of the Chief Digital Innovation Advisor, whose compensation was determined through contract negotiations when he joined the Company during Fiscal 2018 with the acquisition of R2Net Inc.
Elements of replacement personnel, as well as the individual’s responsibilities and actual performance when setting target compensation levels.NEO Compensation
Each NEO receives a fixed level of base salary as compensation for services rendered during the fiscal year. Base salaries are monitored to support the executive compensation program’s objectives of attracting and retaining management.
| NEO | Fiscal 2018 Salary(1) | Fiscal 2017 Salary | Fiscal 2020 Salary(1) | Fiscal 2019 Salary | ||||||||
Virginia C. Drosos | $ | 1,500,000 | $ | — | $ | 1,500,000 | $ | 1,500,000 | ||||
| Joan M. Hilson | $ | 700,000 | $ | — | ||||||||
| J. Lynn Dennison | $ | 650,000 | $ | 650,000 | ||||||||
| Mary Elizabeth Finn | $ | 515,000 | $ | 515,000 | ||||||||
| Jamie L. Singleton | $ | 550,000 | $ | 500,000 | ||||||||
| Michele Santana | $ | 700,000 | $ | 700,000 | $ | 700,000 | $ | 700,000 | ||||
Oded Edelman(2) | $ | 525,000 | $ | — | ||||||||
| George Murray | $ | 700,000 | $ | 700,000 | ||||||||
Sebastian Hobbs(3) | $ | 700,000 | $ | 504,000 | ||||||||
(1) Amounts shown are annualized for each NEO. The actual salary received by each NEO during Fiscal 20182020 is set forth in the Summary Compensation Table. Mr. Light's base salary was $1,250,00 for both Fiscal 2018 and Fiscal 2017.
Annual bonus performance targets and actual bonuses paid in light of the Company’s performance are reviewed and approved by the Compensation Committee each year.
This incentive program focuses management on achieving annual performance objectives. The annual bonus is based on a pre-determined formula based on Company-wide performance.corporate-wide performance for our corporate-level NEOs and both corporate-wide and banner-specific performance for our NEO in a divisional leadership role, Ms. Singleton. In determining the performance target at the start of each
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year, the Compensation Committee considers the Company’s current business plans and relevant market data, including the relative positioning of the Company’s performance in its sector, as well as its current business plans.sector. There is a maximum bonus payout level set each year on such awards, which is twice
the target level. The Committee also sets a threshold performance level, below which no payments are made. This incentive program focuses management on achieving each year’s financial objectives.
Annual Bonus Fiscal 20182020
As of the end of Fiscal 2018,2020, target and potential maximum bonuses as a percentage of salary were as set out below. These bonus targets are the same as Fiscal 20172019 for those NEOs employed by the Company in Fiscal 2017.both periods.
| NEO | Position | Target Bonus as a Percentage of Base Salary (1) | Maximum Bonus as a Percentage of Base Salary(1) | Target STIP Bonus as a Percentage of Base Salary | Maximum STIP Bonus as a Percentage of Base Salary | |||||
| Virginia C. Drosos | Chief Executive Officer | 150 | % | 300 | % | 150 | % | 300 | % | |
| Joan M. Hilson | 75 | % | 150 | % | ||||||
| J. Lynn Dennison | 75 | % | 150 | % | ||||||
| Mary Elizabeth Finn | 75 | % | 150 | % | ||||||
| Jamie L. Singleton | 75 | % | 150 | % | ||||||
| Michele Santana | Chief Financial Officer | 75 | % | 150 | % | 75 | % | 150 | % | |
Oded Edelman(2) | President of JamesAllen.com and Chief Digital Innovation Advisor | 75 | % | 150 | % | |||||
| George Murray | Chief Retail Insights & Strategy Officer | 75 | % | 150 | % | |||||
| Sebastian Hobbs | President & Chief Customer Officer | 75 | % | 150 | % | |||||
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The weighting, threshold (the level atabove which bonus will start to accrue), target, band, maximum and actual numbers for the corporate-wide performance metrics for the Fiscal 20182020 STIP were as follows:
| Corporate-Wide Performance Metrics | Weighting | Threshold | Target | Max | Actual Achieved | % of Target | ||||||
| STIP Operating Income (in millions) | 60 | % | $280 | $300 | $340 | $318.3 | 137 | % | ||||
| Same store sales | 40 | % | (0.5 | )% | 0.5 | % | 1.5 | % | 0.6 | % | 110 | % |
The banner specific performance metrics for Kay and Zales/Peoples, applicable to Ms. Singleton, for the Fiscal 2020 STIP were set at challenging levels to incentivize outstanding contributions by each respective banner to Signet’s overall performance. The Kay and Zales/Peoples banners met and exceeded target performance for STIP Operating Income, respectively, yet fell short of threshold on Same Store Sales, resulting in payouts on Ms. Singleton’s banner-specific portion of the STIP at 60.0% of target for Kay and 79.4% of target for Zales/Peoples, for an aggregate banner-specific payout at 69.7% of target.
After reviewing the actual performance achieved against the criteria set at the beginning of Fiscal 2018,2020, the Committee approved the performance noted above as part of the Fiscal 20182020 year-end process resulting in noannual bonus payments.
| NEO | Total Bonus Earned for Fiscal 2020 | |||
| Virginia C. Drosos | ||||
| Joan M. Hilson | ||||
| $ | ||||
| Mary Elizabeth Finn | $ | |||
| Jamie L. Singleton | $ | |||
| Michele Santana | $ | |||
In furtherance of the acquisition,Company’s efforts to mitigate the Committee approvedfinancial impact on the performance noted above as partCompany of the Fiscal 2018 year-end process resultingCOVID-19 pandemic, payment of the STIP awards have been deferred as described under “Modifications to Compensation Programs in Response to the actual bonus payment to Mr. Edelman of $11,732, which reflects a payout of 7.5% of his target bonus, prorated to reflect the 145-day period since the Company acquired R2Net Inc. on September 12, 2017.COVID-19 Pandemic” included in this CDA.
The Compensation Committee believes that long-term share-based incentives are appropriate and necessaryimportant to properly focus the executive officers on long-term results, retain key executive officers and align their interests with those of Shareholders.shareholders.
Long-Term Incentive Grants in Fiscal 20182020
The Fiscal 20182020 equity grant under the Signet Jewelers Limited 2018 Omnibus Incentive Plan (the “Omnibus Plan”) included performance-based restricted share units at 65% and time-based restricted shares at 35% of the overall award granted.granted, the same as in Fiscal 2019.
Generally, long-term incentive grants are made at the same time as the annual compensation reviews. The value delivered through long-term incentives is determined holistically in the context of total compensation levels. This process, as described above, considers benchmarking data, retention needs, level of responsibility and individual performance. The number of time-based restricted shares and performance-based restricted share units granted to NEOs in Fiscal 20182020 was based upon an award methodology using a share price calculated by averaging the closing price of a Common Share on the NYSE for the 20 trading days commencing on March 10, 2017, the day after the Fiscal 2017 results announcement. The grant date for time-based restricted shares was April 7, 2017, andbefore the grant date for performance-based restricted share unitsof April 25, 2019, which was April 27, 2017.$25.18. The number of time-based restricted shares and performance-based restricted share units granted to each NEO in Fiscal 20182020 using this award methodology is set forth in the “Grants of Plan-Based Awards” table and discussed in more detail below.
Performance-Based Restricted Share Units
The Committee determined that the performance-based restricted share unit targets for the Fiscal 20182020 grant would cover a three-year performance period, and that awards would be weighted 80% on cumulative consolidated operating income (“LTIP Operating Income”) and 20% on return on invested capital (“LTIP ROIC”) instead of return on capital employed, which was used in Fiscal 2019.
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LTIP Operating Income, a non-GAAP measure, is the reported operating income for the Company, excluding the impact of items the Company normalizes for public reporting and adjusted to reflect results at constant currency. LTIP ROIC is a non-GAAP measure calculated as being the annual consolidated operating profit in respect of the applicable fiscal year divided by the two-point, average year-end invested capital balance in respect of the applicable fiscal year, using a constant currency exchange rate, per the Company’s consolidated balance sheet. LTIP ROIC replaced LTIP return on capital employed in Fiscal 2019, as it is more commonly used to evaluate profitability in the U.S., is relatively common among our peers and is aligned with our strategic pillar of efficiency and agility as we seek to employ mindful use of capital. These measures were also chosen because the Compensation Committee believes that they are the appropriate combination of growth and return to drive long-term shareholder value. NEOs can earn 0% or between 25% to 200% of target, based on the level of performance achievement during the applicable three-year performance period, subject to continued service with the Company during such period.
For grants made in Fiscal 2020, consistent with past practice, the three-year cumulative performance target is based upon the Company’s consolidated financial projections for Fiscal 2020 to Fiscal 2022, adjusted to exclude the impact of any material transactions or events involving the Company or its subsidiaries that were not anticipated at the time the performance target was set subject to approval by the Committee.
The second goal for the Fiscal 2020 grant is achievement of LTIP ROIC over the performance period. LTIP ROIC uses LTIP Operating Income divided by total assets less current liabilities (excluding current debt). Achievement of any LTIP ROIC payout over the three-year cumulative performance period will require significant Company performance.
The level of achievement for three-year cumulative LTIP Operating Income and LTIP ROIC will pay out at 25% (minimum) upon achievement at threshold levels of target performance and 200% (maximum) upon achievement at the maximum target levels of performance.
The target LTIP awards are based on a flat amount for Ms. Drosos and a percentage of base salaries for all other NEOs as set forth in the table below. Ms. Santana was not entitled to an LTIP grant in Fiscal 2020.
| NEO | Target LTIP Bonus |
| Virginia C. Drosos | $6,000,000 |
| Joan M. Hilson | 150% of Base Salary |
| J. Lynn Dennison | 110% of Base Salary |
| Mary Elizabeth Finn | 110% of Base Salary |
| Jamie L. Singleton | 110% of Base Salary |
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Fiscal 2020 - Fiscal 2022 LTIP Payout Schedule
| Performance Measure | Weighting | Threshold (Pays 25% of Target Award) | Target (Pays 100% of Target Award) | Maximum (Pays 200% of Target Award) |
3-Year Cumulative LTIP Operating Income (as a % of Budgeted Target) | 80% | 93.3% of Target | 100% of Target | 113.3% of Target |
| LTIP ROIC | 20% | 93.3% of Target | 100% of Target | 113.3% of Target |
The performance targets and actual performance as measured against the targets will be disclosed at the end of the three-year performance period.
Determinations Related to Vesting of Previously Granted Performance-Based LTIP Awards
In March 2020, the Committee certified performance for the three-year performance-based restricted share unit awards granted in Fiscal 2018, covering the performance period of Fiscal 2018 through Fiscal 2020. These awards were weighted 80% on adjusted consolidated operating income (“Adjusted LTIP Operating Income”) and 20% on return on capital employed (“LTIP ROCE”). Adjusted LTIP Operating Income is a non-GAAP measure, calculated as operating income,was further adjusted to reflect results at constant currency. LTIP ROCE is a non-GAAP measure calculated as being the adjusted LTIP Operating Income divided by the single point, year-end capital employed balance, using a constant currency exchange rate, per the Company’s consolidated balance sheet. These measures were chosen because the Compensation Committee believes that the appropriate combination of growth and return drive long-term shareholder value. NEOs can earn between 0% and 200% of their share award depending on performance results over the three-year period, subject to continued service with the Company during such period.
Performance targets and actual performance as measured against the target will be disclosed at the end of the three-year performance period.
target.
| Performance Target | Weighting | Threshold (Pays 25% of Target Award) | Target (Pays 100% of Target Award) | Maximum (Pays 200% of Target Award) | Actual | Share Award Vesting (as a Percentage of Target Award) | |||||||||
| Adjusted LTIP Operating Income (in millions) | 80% | $ | 1,488 | $ | 1,576 | $ | 1,706 | $ | 1,173 | 0 | % | ||||
| LTIP ROCE | 20% | 24.8% | 26.3% | 28.4% | 17.42% | 0 | % | ||||||||
Time-Based Restricted Shares
One-third of the time-based restricted shares granted in Fiscal 20182020 will vest on each of the first, second and third anniversary of the grant date subject to continued service with the Company.
Time-based restricted share awards wereare granted under an award pool formula established by the Compensation Committee based on Company performance in the prior fiscal year. This award pool formula was intended to comply with the qualified performance-based compensation requirements under section 162(m) of the Internal Revenue Code. For time-based restricted share awards granted in Fiscal 2018,2020, the pool was based on attaining an adjusted operating income performance hurdle for Fiscal 2017.2019. The actual share awards granted from the pool were determined using the process described above under “Long-Term Incentive Grants in Fiscal 2018.2020.”
Special Awards
From time to time, upon approval of the Committee, the Company may make special awards in the form of a cash bonus or restricted share units to provide sign-on bonuses, retention incentives, or to recognize significant efforts, accomplishments or leadership transitions.
In connection with the hiring of Ms. Finn, the Compensation Committee approved a sign-on bonus in the amount of $150,000, half of which was paid in Fiscal 2019 and half after the anniversary date of her hiring,hire.
In light of Ms. DrososSingleton’s strong performance in her expanded leadership role and transformational contributions to the Board agreed that she would receiveKay and Zales banners and Company as a whole, the Committee awarded her an additional cash bonus of $50,000 for Fiscal 2020.
In addition, on August 14, 2019, in order to ensure continuity and recognize her efforts and role in the Company’s Path to Brilliance journey, the Compensation Committee granted a special retention award of time-vested restricted share units to Ms. Dennison, whose skills and capabilities are critical with respect to the strategic priorities of the Company, including leading the effort to resolve outstanding litigation in a timely and satisfactory manner. The one-time grant of 81,900 restrictedRSUs was calculated based on a $700,000 grant value using the fair market value of the Company’s Common Shares 50% of which would vest on February 4, 2018, with the balance vesting on February 3, 2019, subject to Ms. Drosos’s continued employment (“One-Time Award”). This grant was made to compensate Ms. Drosos for compensation that she would forfeit by leaving her previous employer and to secure her employment. This grant was made on August 1, 2017.
Threshold (Pays 0% of Target) | Target (Pays 100% of Target) | Maximum (Pays 200% of Target) | Actual | Share Award Vesting (as a Percentage of Target) | ||||||
| LTIP ROCE | 22.2 | % | 24.1 | % | 25.3 | % | 21 | % | — | % |
The Company provides retirement and deferred compensation benefits to NEOs and employees, both as a retention mechanism and to provide a degree of financial security post retirement.
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In the U.S., there are two defined contribution savings vehicles. The primary retirement vehicle is the Company-sponsored Signet Jewelers 401(k) Retirement Savings Plan (the “401(k) Plan”), which is a qualified plan under federal guidelines.
Currently the Company matches 50% of an employee’s elective salary deferral up to a maximum of 6% of the employee’s eligible compensation in order to be market competitive. The annual elective salary deferral for each employee is subject to certain maximum statutory limitations.
Under federal guidelines, the 401(k) Plan contributions by senior management may be reduced based on the participation levels of lower-paid employees. Therefore, a supplemental plan, the Deferred Compensation Plan (the “DCP”), an unfunded, non-qualified plan under Federal guidelines, was established for senior management to assist with pre-tax retirement savings in addition to the 401(k) Plan. Under the DCP, an employee is permitted to defer up to 75% of their base salary and bonus. The Company provides a discretionary 50% matching contribution under the DCP for each participant’s annual deferral, up to 8% of the participant’s annual eligible compensation. Effective January 1, 2020, the Company matching formula changed from 10% to 8% of the participant’s annual eligible compensation. Although the DCP also permits additional employer discretionary contributions, the Company did not make any additional discretionary contributioncontributions in Fiscal 2018.2020.
The NEOs other than Mr. Light and Mr. Edelman, are eligible for benefits provided viaunder the 401(k) Plan and the DCP.
NEOs receive a limited number of perquisites and supplemental benefits.benefits, which are primarily related to relocation expense reimbursement. The Company covers the cost of physical examinations for executivesthe CEO to facilitate and encourage executivesher to maintain their health.her health and well-being. Relocation benefits are provided, including reimbursement for a spouse'sspouse’s travel expenses where the spouse has not also relocated, where applicable, and small retirement gifts may be given on occasion.In addition, in limited circumstances, where it is appropriate that spouses attend business related functions, Signet reimburses NEOs for the travel expenses of spouses. The Company does not provide any tax gross-up payments for any perquisites other than for relocation benefitspayments where applicable.
The Compensation Committee has adopted a clawback policy that provides that in the event of a material restatement of the Company’s financial results, the Compensation Committee will recalculate incentive compensation based on the restated results. In the event of an overpayment, the Company may seek to recover the difference. Similarly, in the interest of fairness, should a restatement result in an under payment of incentive compensation, the Company will make up any difference.
It is the Company’s policy that executive officers build a holding of Common Shares. The guidelines for these holdings for the NEOs and other executive officers are currently as follows:
Five times annual base salary—salary: CEO
Three times annual base salary—salary: Chief Financial Officer, Chief Retail Insights & Strategy Officer, and President & Chief Customer Officer; and
All executives are expected to build their holding within five years from atheir appointment as an executive officer or other specified date. All executives are required to hold 50% of net after-tax shares received upon vesting or payout until these requirements are met. Once achieved, the holding is to be maintained while the individual remains an officer of the Company. Currently, all NEOs are in compliance with the Share Ownership Policy.
It is the Company’s policy to strictly prohibit all types of hedging orand monetization transactions that would allow an officer, Director or employee who is a security holder to engage in transactions that would separate the risks and rewards of ownership of Company securities from actual ownership of those securities. In addition, the Company strictly prohibits any pledging or holding of Company shares in a margin account by any officer, Director or employee of the Company.
Health & Welfare
NEOs participate in various health and welfare programs, as well as life insurance and long-term disability plans, which are generally available to other executive officers of the Company.
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Termination Protection Agreements with NEOs
Each NEO, other than Ms. Santana, has a termination protection agreement with the Company setting forth the terms of the NEO’s employment with the Company. The principal terms of the termination protection agreements are described under the “NEO Agreements” section of this Proxy Statement.
Separation Agreements
The principal terms of the separation agreement with Ms. Santana are described under the “NEO Agreements” section of this Proxy Statement. Among other terms, the separation agreement provides for the continuation of base salary through April 30, 2020 (the “Termination Date”), an annual bonus for Fiscal 2020 under the STIP based on actual performance of the Company, pro-rated vesting of the time-based restricted shares granted in Fiscal 2018 and Fiscal 2019, pro-rated performance-based restricted share units granted in Fiscal 2018 and Fiscal 2019 based on actual performance of the Company and payable at the end of each performance cycle, payment of COBRA premiums and certain other expenses. The pro-rated amounts referenced above are based on the time of grant through Ms. Santana’s termination date.
Termination for Cause and Violation of Non-Compete and Non-Solicitation Covenants
Performance-based restricted share units and time-based restricted shares will not vest if termination for cause occurs before the conclusion of the performance or vesting period. All NEO termination protection agreements contain a non-competition covenant that has a 12-month post-employment term, as well as a non-solicitation covenant that has a post-employment term between 12 months and two years. The separation agreement with Ms. Santana provides for a two-year non-competition and non-solicitation period post-employment. Violation of the non-compete or non-solicitation covenants will result in cessation of severance payments, potential litigation and the Company’s ability to seek injunctive relief and damages. For more information concerning the NEO termination protection agreements and separation agreement, see “NEO Agreements” below.
Deductibility of Executive Compensation
In general, Section 162(m) of the Internal Revenue Code
The Tax Cuts and Jobs Act includes a transition rule under which the changes to Section 162(m) described above will not apply to compensation payable pursuant to a written binding contract that was in effect on November 2, 2017 and is not materially modified after that date. To the extent applicable to ourthe Company’s existing contracts and awards, the Compensation Committee may avail itself of this transition rule. However, because of uncertainties as to the application and interpretation of the transition rule, no assurances can be given at this time that our existing contracts and awards, even if in place on November 2, 2017, will meet the requirements of the transition rule. Although the Compensation Committee has designed the executive compensation program with tax considerations in mind, the Compensation Committee retains the flexibility to authorize compensation that may not be deductible if the Committee believes doing so is in the best interests of the Company.
Modifications to Compensation Programs in Response to the COVID-19 Pandemic
The COVID-19 pandemic has had a significant impact on the global economy and retail industry and Company in particular. The Company has taken numerous actions to mitigate the financial impact of the pandemic on the Company, which includes modifications to the compensation program. While the Company did not reduce the compensation earned by the NEOs during Fiscal 2020, since such compensation was earned prior to the COVID-19 pandemic, it has made the following modifications to the compensation program going forward. In making these modifications, the Company balanced the drive to reduce expenses and preserve liquidity, with its desire to appropriately incentivize and retain its members of senior leadership as they continue manage the Company’s performance during this unprecedented time.
Base Salary
As part of the Company’s expense-reduction measures, in March 2020, the Company implemented temporary base salary reductions for members of senior leadership. Half of the salary reduction amount will be awarded in the Common Shares (in lieu of cash), with this temporary arrangement in place until such time as the Company determines reinstatement is appropriate. The base salary reductions are in the amount of 50% for Ms. Drosos, Ms. Hilson, Ms. Singleton and Mr. Oded Edelman, and 35% for all other senior
STIP
In order to preserve liquidity during the temporary closure of the Company’s stores, the Compensation Committee approved a deferral of the payout of Fiscal 2020 STIP awards earned by members of senior leadership from April 2020 to June 2020.
In addition, the Compensation Committee approved a bifurcation of the Fiscal 2021 STIP award opportunity into two equally-weighted, seasonal performance periods. The first half of the Fiscal 2021 STIP award opportunity will be based on liquidity goals critical to weathering the disruption created by the COVID-19 pandemic. The structure of the second half of the Fiscal 2021 STIP award will be determined mid-year once the impact of the COVID-19 pandemic on the Company is more fully understood and is expected, at this time, to be based on our Fiscal 2020 metrics of adjusted operating income and same store sales.
LTIP
In light of the uncertainty created by the COVID-19 pandemic, the Compensation Committee approved two actions with respect to Fiscal 2021 long-term incentive awards. First, the Compensation Committee approved a re-balancing of the PSUs and time-vested restricted stock awards from 65% PSUs and 35% time-vested restricted stock to an equal amount of each component. In addition, the Committee approved a delay of the Fiscal 2021-2023 PSU awards from April 2020 to Fall 2020 so that the impact of the COVID-19 pandemic is more fully understood before long-term performance metrics and targets are established. The portion of the LTIP award delivered in time-vested restricted share units will continue to be made in April 2020 as is our typical practice.
DCP and 401(k) Matching Program
In furtherance of the Company’s expense reduction efforts, the Company temporarily ceased the Company matching program with respect to the DCP and 401(k) Plan.
The Company will continue to evaluate its executive compensation program to align and incentivize its associates and members of senior leadership with the Company’s short and long-term goals. In doing so, the Company will account for the developing impact of COVID-19 in reviewing and determining the Fiscal 2021 STIP and LTIP design, performance metrics and award opportunities.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis section of this Proxy Statement.Statement required by Item 402(b) of Regulation S-K. Based on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement.
Members of the Compensation Committee:
Jonathan SokoloffSeiffer
Eugenia Ulasewicz
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Executive Compensation Tables
Summary Compensation Table
The following table sets forth the compensation during Fiscal 2018,2020, Fiscal 20172019 and Fiscal 2016,2018, as appropriate, paid to or earned by NEOs.
| NEO & Position | Fiscal Year | Salary(1) | Bonus(2) | Stock Awards(3) | Non-Equity Incentive Plan Compensation | All Other Compensation(4) | Total | ||||||||||||
| Virginia C. Drosos | 2018 | $ | 773,077 | $ | 1,500,000 | $ | 10,828,081 | $ | — | $ | 453,534 | $ | 13,554,692 | ||||||
| CEO | |||||||||||||||||||
| Michele Santana | 2018 | $ | 713,462 | $ | — | $ | 1,127,926 | $ | — | $ | 48,199 | $ | 1,889,587 | ||||||
| Chief Financial Officer | 2017 | $ | 690,000 | $ | — | $ | 1,103,387 | $ | — | $ | 76,711 | $ | 1,870,098 | ||||||
| 2016 | $ | 619,615 | $ | 50,000 | $ | 987,318 | $ | 612,752 | $ | 70,473 | $ | 2,340,158 | |||||||
| Oded Edelman | 2018 | $ | 210,455 | $ | — | $ | 2,600,810 | $ | 11,732 | $ | 46,994 | $ | 2,869,991 | ||||||
| President of JamesAllen.com and | |||||||||||||||||||
| Chief Digital Innovation Advisor | |||||||||||||||||||
| George Murray | 2018 | $ | 713,462 | $ | — | $ | 789,539 | $ | — | $ | 58,730 | $ | 1,561,731 | ||||||
| Chief Retail Insights & Strategy Officer | 2017 | $ | 687,385 | $ | — | $ | 772,491 | $ | — | $ | 73,973 | $ | 1,533,849 | ||||||
| 2016 | $ | 615,231 | $ | 50,000 | $ | 592,337 | $ | 562,579 | $ | 75,660 | $ | 1,895,807 | |||||||
| Sebastian Hobbs | 2018 | $ | 676,560 | $ | — | $ | 789,539 | $ | — | $ | 98,360 | $ | 1,564,459 | ||||||
| President & Chief Customer Officer | |||||||||||||||||||
| Mark Light | 2018 | $ | 629,808 | $ | — | $ | 4,700,249 | $ | — | $ | 692,693 | $ | 6,022,750 | ||||||
| Former CEO | 2017 | $ | 1,226,923 | $ | — | $ | 4,598,190 | $ | — | $ | 184,050 | $ | 6,009,163 | ||||||
| 2016 | $ | 1,092,308 | $ | 50,000 | $ | 3,950,084 | $ | 2,170,084 | $ | 138,109 | $ | 7,400,585 | |||||||
| NEO & Position | Fiscal Year | Salary(1) | Bonus(2) | Stock Awards(3) | Non-Equity Incentive Plan Compensation(4) | All Other Compensation(5) | Total | ||||||||||||
| Virginia C. Drosos | 2020 | $ | 1,500,000 | $ | — | $ | 4,720,479 | $ | 2,853,000 | $ | 148,791 | $ | 9,222,270 | ||||||
| Chief Executive Officer | 2019 | $ | 1,500,000 | $ | — | $ | 5,919,666 | $ | 1,316,250 | $ | 160,387 | $ | 8,896,303 | ||||||
| 2018 | $ | 773,077 | $ | 1,500,000 | $ | 10,828,081 | $ | — | $ | 453,534 | $ | 13,554,692 | |||||||
| Joan M. Hilson | 2020 | $ | 605,769 | $ | — | $ | 1,080,829 | $ | 665,700 | $ | 43,009 | $ | 2,395,307 | ||||||
| Chief Financial Officer | |||||||||||||||||||
| J. Lynn Dennison | 2020 | $ | 650,000 | $ | — | $ | 1,124,486 | $ | 618,150 | $ | 30,054 | $ | 2,422,690 | ||||||
| Chief Legal & Strategy Officer | 2019 | $ | 641,538 | $ | — | $ | 705,341 | $ | 281,882 | $ | 41,502 | $ | 1,670,263 | ||||||
| Mary Elizabeth Finn | 2020 | $ | 515,000 | $ | 132,392 | $ | 445,651 | $ | 489,765 | $ | 112,304 | $ | 1,695,112 | ||||||
| Chief People Officer | 2019 | $ | 344,654 | $ | — | $ | 721,833 | $ | 225,956 | $ | 203,641 | $ | 1,496,084 | ||||||
| Jamie L. Singleton | 2020 | $ | 545,192 | $ | 50,000 | $ | 475,985 | $ | 405,281 | $ | 33,414 | $ | 1,509,872 | ||||||
| President - Kay, Zales and Peoples | |||||||||||||||||||
| Michele Santana | 2020 | $ | 180,385 | $ | 150,000 | $ | — | $ | 665,700 | $ | 567,523 | $ | 1,563,608 | ||||||
Former Chief Financial Officer (6) | 2019 | $ | 700,000 | $ | — | $ | 1,183,885 | $ | 307,125 | $ | 46,692 | $ | 2,237,702 | ||||||
| 2018 | $ | 713,462 | $ | — | $ | 1,127,926 | $ | — | $ | 48,199 | $ | 1,889,587 | |||||||
| The amounts reflected in the table above for Fiscal |
(2) | The amounts in the table above for Fiscal 2020 reflect the payout of a retention payment for Ms. Santana from the notice date of her termination through April 30, 2019; a sign-on bonus for Ms. Finn; and a special award granted to Ms. Singleton. |
| (3) | In accordance with FASB ASC Topic 718, the amounts calculated are based on the aggregate grant date fair value of the restricted shares and restricted share units (in the column entitled “Stock Awards”) in the year of grant based upon target value of performance conditions. For information on the valuation assumptions, refer to note |
(4) | The amounts in the table above reflect actual STIP awards earned. See “CDA - Elements of NEO Compensation - Annual Bonus under the Short-Term Incentive Plan (“STIP”).” |
| (5) | The following table provides the incremental Fiscal |
| NEO | 401(k) Matching Contribution | DCP Matching Contribution | Health Care Reimbursements Related to Physical Exam | Life and Disability Insurance Premiums | Salary continuation | Board of Directors fees(1) | Perquisites(2) | Total | ||||||||||||||||
| Virginia C. Drosos | $ | — | $ | 28,846 | $ | — | $ | 2,249 | $ | — | $ | 214,450 | $ | 207,989 | $ | 453,534 | ||||||||
| Michele Santana | $ | 9,423 | $ | 36,346 | $ | — | $ | 2,430 | $ | — | $ | — | $ | — | $ | 48,199 | ||||||||
| Oded Edelman | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 46,994 | $ | 46,994 | ||||||||
| George Murray | $ | 9,423 | $ | 36,346 | $ | 2,269 | $ | 10,692 | $ | — | $ | — | $ | — | $ | 58,730 | ||||||||
| Sebastian Hobbs | $ | 9,031 | $ | 26,923 | $ | — | $ | 2,283 | $ | — | $ | — | $ | 60,123 | $ | 98,360 | ||||||||
| Mark Light | $ | 6,298 | $ | 33,894 | $ | — | $ | 3,453 | $ | 649,048 | $ | — | $ | — | $ | 692,693 | ||||||||
| NEO | 401(k) Matching Contribution | DCP Matching Contribution | Health Care Reimbursements Related to Physical Exam | Life and Disability Insurance Premiums | Perquisites(a) | Severance Payments(b) | Total | ||||||||||||||
| Virginia C. Drosos | $ | — | $ | 139,659 | $ | 1,650 | $ | 7,482 | $ | — | $ | — | $ | 148,791 | |||||||
| Joan M. Hilson | $ | — | $ | — | $ | — | $ | 9,047 | $ | 33,962 | $ | — | $ | 43,009 | |||||||
| J. Lynn Dennison | $ | 9,510 | $ | 14,094 | $ | — | $ | 6,450 | $ | — | $ | — | $ | 30,054 | |||||||
| Mary Elizabeth Finn | $ | 1,783 | $ | 36,652 | $ | — | $ | 5,369 | $ | 68,500 | $ | — | $ | 112,304 | |||||||
| Jamie L. Singleton | $ | 9,642 | $ | 18,394 | $ | — | $ | 5,378 | $ | — | $ | — | $ | 33,414 | |||||||
| Michele Santana | $ | 7,110 | $ | 24,375 | $ | — | $ | 561 | $ | — | $ | 535,477 | $ | 567,523 | |||||||
| Amount reported for Ms. |
| (6) | Ms. Santana’s service as |
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The table below provides the potential value of Fiscal 20182020 performance-based restricted share units at target (as included in the amounts reported in the Summary Compensation Table above) and maximum level of performance.
| NEO | Potential Value at Target Level | Potential Value at Maximum Level | ||||
| Virginia C. Drosos | $ | 3,688,547 | $ | 7,377,094 | ||
| Michele Santana | $ | 709,846 | $ | 1,419,692 | ||
| Oded Edelman | $ | — | $ | — | ||
| George Murray | $ | 496,843 | $ | 993,686 | ||
| Sebastian Hobbs | $ | 496,843 | $ | 993,686 | ||
| Mark Light | $ | 2,957,568 | $ | 5,915,136 | ||
| NEO | Potential Value at Target Level | Potential Value at Maximum Level | ||||
| Virginia C. Drosos | $ | 2,871,568 | $ | 5,743,136 | ||
| Joan M. Hilson | $ | 502,527 | $ | 1,005,054 | ||
| J. Lynn Dennison | $ | 342,193 | $ | 684,386 | ||
| Mary Elizabeth Finn | $ | 271,129 | $ | 542,258 | ||
| Jamie L. Singleton | $ | 289,558 | $ | 579,116 | ||
Michele Santana(a) | $ | — | $ | — | ||
| (a) | As a result of Ms. Santana’s separation, no performance-based restricted shares units were granted to her during Fiscal 2020. |
Grants of Plan-Based Awards
Set forth below is information concerning grants of plan-based awards made during Fiscal 2018.2020.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(6) | Estimated Future Payouts Under Equity Incentive Plan Awards(7) | All other Stock Awards: Number of Shares or Units | Grant Date Fair Value of Stock and Option Award(8) | |||||||||||||||||||
| NEO | Grant Date | Threshold | Target | Max | Threshold | Target | Max | |||||||||||||||
| Virginia C. Drosos | (1) | $ | 675,000 | $ | 2,250,000 | $ | 4,500,000 | |||||||||||||||
| (2) | August 1, 2017 | 15,971 | 63,882 | 127,764 | $ | 3,688,547 | ||||||||||||||||
| (3) | August 1, 2017 | 34,398 | $ | 2,111,693 | ||||||||||||||||||
| (4) | August 1, 2017 | 81,900 | $ | 5,027,841 | ||||||||||||||||||
| Michele Santana | (1) | $ | 157,500 | $ | 525,000 | $ | 1,050,000 | |||||||||||||||
| (2) | April 27, 2017 | 2,849 | 11,394 | 22,788 | $ | 709,846 | ||||||||||||||||
| (3) | April 7, 2017 | 6,132 | $ | 418,080 | ||||||||||||||||||
| Oded Edelman | (1) | $ | — | $ | 154,953 | $ | 309,906 | |||||||||||||||
| (5) | November 18, 2017 | 33,962 | $ | 2,600,810 | ||||||||||||||||||
| George Murray | (1) | $ | 157,500 | $ | 525,000 | $ | 1,050,000 | |||||||||||||||
| (2) | April 27, 2017 | 1,994 | 7,975 | 15,950 | $ | 496,843 | ||||||||||||||||
| (3) | April 7, 2017 | 4,293 | $ | 292,697 | ||||||||||||||||||
| Sebastian Hobbs | (1) | $ | 157,500 | $ | 525,000 | $ | 1,050,000 | |||||||||||||||
| (2) | April 27, 2017 | 1,994 | 7,975 | 15,950 | $ | 496,843 | ||||||||||||||||
| (3) | April 7, 2017 | 4,293 | $ | 292,697 | ||||||||||||||||||
| Mark Light | (1) | $ | 562,500 | $ | 1,875,000 | $ | 3,750,000 | |||||||||||||||
| (2) | April 27, 2017 | 11,868 | 47,473 | 94,946 | $ | 2,957,568 | ||||||||||||||||
| (3) | April 7, 2017 | 25,560 | $ | 1,742,681 | ||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(5) | Estimated Future Payouts Under Equity Incentive Plan Awards(6) | All other Stock Awards: Number of Shares or Units | Grant Date Fair Value of Stock and Option Award(7) | |||||||||||||||
| NEO | Grant Date | Target | Max | Threshold | Target | Max | ||||||||||||
| Virginia C. Drosos | (1) | $ | 2,250,000 | $ | 4,500,000 | |||||||||||||
| (2) | April 25, 2019 | 38,721 | 154,885 | 309,770 | 2,871,568 | |||||||||||||
| (3) | April 25, 2019 | 83,397 | 1,848,911 | |||||||||||||||
| Joan M. Hilson | (1) | $ | 525,000 | $ | 1,050,000 | |||||||||||||
| (2) | April 25, 2019 | 6,776 | 27,105 | 54,210 | 502,527 | |||||||||||||
| (3) | March 18, 2019 | 11,035 | 254,798 | |||||||||||||||
| (3) | April 25, 2019 | 14,592 | 323,505 | |||||||||||||||
| J. Lynn Dennison | (1) | $ | 487,500 | $ | 975,000 | |||||||||||||
| (2) | April 25, 2019 | 4,614 | 18,457 | 36,914 | 342,193 | |||||||||||||
| (3) | April 25, 2019 | 9,936 | 220,281 | |||||||||||||||
| (4) | August 14, 2019 | 55,866 | 502,794 | |||||||||||||||
| Mary Elizabeth Finn | (1) | $ | 386,250 | $ | 772,500 | |||||||||||||
| (2) | April 25, 2019 | 3,656 | 14,624 | 29,248 | 271,129 | |||||||||||||
| (3) | April 25, 2019 | 7,872 | 174,522 | |||||||||||||||
| Jamie L. Singleton | (1) | $ | 412,500 | $ | 825,000 | |||||||||||||
| (2) | April 25, 2019 | 3,905 | 15,618 | 31,236 | 289,558 | |||||||||||||
| (3) | April 25, 2019 | 8,409 | 186,428 | |||||||||||||||
| Michele Santana | 525,000 | $ | 1,050,000 | |||||||||||||||
(1) | Represents bonus opportunities under the Company’s annual bonus plan for Fiscal |
(2) | Represents performance-based restricted share units granted under the Omnibus Plan. Under the terms of these awards, the restricted share units will vest at the end of the third fiscal year following the grant dates subject to achievement of performance goals and continued service. Vesting may be prorated upon certain terminations of employment or change of control events. Under the terms of these awards, the restricted share units will be forfeited in the event the Company fails to achieve minimum cumulative |
(3) | Represents time-based restricted share awards granted under the Omnibus Plan. One third of these time-based restricted shares will vest on each of the first, second and third anniversary of the grant date subject to continued service. Vesting may be prorated upon certain terminations of employment or change of control events. Time-based restricted shares accrue dividends while restricted, which are paid if and when the awards vest. |
(4) | Represents a special |
(5) |
| Payouts of non-equity incentive plan awards may range from $0 to the maximum as described above. Below threshold level, nothing is paid to the NEOs; performance must meet or exceed threshold level to earn any bonus payment, which is paid on a linear basis from |
| Payouts of equity incentive plan awards may range from |
| Represents the grant date fair value of each equity-based award as determined in accordance with FASB ASC Topic 718. The actual value received by the NEOs with respect to these awards may range from $0 to an amount greater than the reported amount, depending on the Company’s actual financial performance and share value when the shares are received. |
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Outstanding Equity Awards at Fiscal Year End 2018
2020
| Stock Awards | |||||||||||||
| NEO | 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(2) | Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not vested(1)(2) | |||||||||
| Virginia C. Drosos | |||||||||||||
| 34,398 | (3) | $ | 1,767,025 | 127,764 | (5) | $ | 6,563,237 | ||||||
| 81,900 | (4) | $ | 4,207,203 | ||||||||||
| Michele Santana | 3,652 | (6) | $ | 187,603 | 7,304 | (9) | $ | 375,206 | |||||
| 2,402 | (7) | $ | 123,391 | 13,388 | (10) | $ | 687,742 | ||||||
| 6,132 | (8) | $ | 315,001 | 22,788 | (5) | $ | 1,170,620 | ||||||
| Oded Edelman | 33,962 | (11) | $ | 1,744,628 | |||||||||
| George Murray | 2,191 | (6) | $ | 112,552 | 4,382 | (9) | $ | 225,103 | |||||
| 1,682 | (7) | $ | 86,404 | 9,372 | (10) | $ | 481,440 | ||||||
| 4,293 | (8) | $ | 220,531 | 15,950 | (5) | $ | 819,352 | ||||||
| Sebastian Hobbs | 1,494 | (6) | $ | 76,747 | 2,988 | (9) | $ | 153,494 | |||||
| 1,268 | (7) | $ | 65,137 | 7,076 | (10) | $ | 363,494 | ||||||
| 4,293 | (8) | $ | 220,531 | 15,950 | (5) | $ | 819,352 | ||||||
| Mark Light | 24,246 | (9) | $ | 1,245,517 | |||||||||
| 27,792 | (10) | $ | 1,427,675 | ||||||||||
| 15,826 | (5) | $ | 812,982 | ||||||||||
| Stock Awards | |||||||||||||
| NEO | 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 rights that have not vested(1) | |||||||||
| Virginia C. Drosos | 11,466 | (2) | $ | 278,738 | 15,970 | (5) | $ | 388,231 | |||||
| 36,734 | (3) | $ | 893,004 | 25,583 | (6) | $ | 621,923 | ||||||
| 83,397 | (4) | $ | 2,027,381 | 309,770 | (7) | $ | 7,530,509 | ||||||
| Joan M. Hilson | 11,035 | (8) | $ | 268,261 | 54,210 | (7) | $ | 1,317,845 | |||||
| 14,592 | (4) | $ | 354,732 | ||||||||||
| J. Lynn Dennison | 1,115 | (9) | $ | 27,106 | 1,553 | (5) | $ | 37,753 | |||||
| 4,376 | (3) | $ | 106,381 | 3,048 | (6) | $ | 74,097 | ||||||
| 9,936 | (4) | $ | 241,544 | 36,914 | (7) | $ | 897,379 | ||||||
| 55,866 | (10) | $ | 1,358,102 | ||||||||||
| Mary Elizabeth Finn | 3,147 | (11) | $ | 76,504 | 2,191 | (6) | $ | 53,263 | |||||
| 7,872 | (4) | $ | 191,368 | 29,248 | (7) | $ | 711,019 | ||||||
| Jamie L. Singleton | 445 | (9) | $ | 10,818 | 621 | (5) | $ | 15,097 | |||||
| 2,158 | (3) | $ | 52,461 | 1,503 | (6) | $ | 36,538 | ||||||
| 5,000 | (12) | $ | 121,550 | 31,236 | (7) | $ | 759,347 | ||||||
| 8,409 | (4) | $ | 204,423 | ||||||||||
| Michele Santana | 2,133 | (5)(13) | $ | 51,853 | |||||||||
| 2,118 | (6)(13) | $ | 51,489 | ||||||||||
(1) | Calculated using the closing market price of the Company’s Common Shares on February |
(2) |
| The grant date for this award was August 1, 2017. One third of this grant vests on each of the first, second and third anniversary of the grant date. As of February 1, 2020, the awards outstanding represent the amounts eligible for vesting on the third anniversary of the grant date. |
| The grant date for this award was April 25, |
| (4) | The grant date for this award was April 25, 2019. One third of this grant vests on each of the first, second and third anniversaries of the grant date. |
| (5) | This award vested on February 1, 2020 and lapsed as a result of performance below the 3-year cumulative threshold as determined by the Compensation Committee. Amount reported reflects payout at threshold, which is 25% of target, as a result of performance trending below threshold through the previous fiscal year. |
| (6) | The Compensation Committee will determine whether this grant will vest within 70 days following January 30, 2021. Amount reported reflects payout at threshold, which is 25% of target, as a result of performance trending below threshold through the previous fiscal year. |
| (7) |
| (8) | The grant date for this award was March 18, 2019. One third of this grant vests on each of the first, second and third anniversaries of the date of grant. |
| (9) | The grant date for this award was April 7, 2017. One third of this grant vests on each of the first, second and third anniversary of the grant date. As of February 1, 2020, the awards outstanding represent the amounts eligible for vesting on the third anniversary of the grant date. |
(10) |
| The grant date for this award was |
| (11) | The grant date for this award was June 15, 2018. One third of this grant vests on each of the first, second and third anniversary of the grant date. As of February 1, 2020, the awards outstanding represent the amounts eligible for vesting on the second and third anniversaries of the grant date. |
| (12) | The grant date for this award of restricted share units was September 4, 2018. 1,000 shares of this award vest on the first anniversary of the grant date, |
| (13) | Represents the prorated number of shares Ms. Santana is eligible to |
Option Exercises and Shares Vested
The table below shows the number and value of share options exercised and shares vested (or settled) for the NEOs in Fiscal 2018.2020.
Stock Awards | |||||
| NEO | Number of shares acquired on vesting | Value realized on vesting(1) | |||
| Virginia C. Drosos | — | $ | — | ||
| Michele Santana | 4,080 | $ | 266,661 | ||
| Oded Edelman | — | $ | — | ||
| George Murray | 4,134 | $ | 271,811 | ||
| Sebastian Hobbs | 3,382 | $ | 224,528 | ||
| Mark Light | 36,093 | $ | 2,301,337 | ||
| Stock Awards | |||||
| NEO | Number of shares acquired on vesting | Value realized on vesting(1) | |||
| Virginia C. Drosos | 70,773 | $ | 1,736,195 | ||
| Joan M. Hilson | — | $ | — | ||
| J. Lynn Dennison | 3,870 | $ | 98,427 | ||
| Mary Elizabeth Finn | 1,573 | $ | 31,067 | ||
| Jamie L. Singleton | 2,785 | $ | 56,129 | ||
| Michele Santana | 7,127 | $ | 181,957 | ||
(1) Represents the value realized upon vesting of shares, based on the market value of the shares on the vesting date.date and the dividends accrued thereon.
The Company maintains thea Deferred Compensation Plan (the “DCP”), which is an unfunded, non-qualified plan under Federal guidelines, established for senior management to assist with pre-tax retirement savings in addition to the 401(k) Plan. The Company provides a discretionary 50% matching contribution under the DCP for each participant’s annual deferral, up to 10% of the participant’s annual eligible compensation. Although the DCP also permits additional employer discretionary contributions, the Company did not make any additional discretionary contribution in Fiscal 2018.2020.
| NEO | Executive contributions in last fiscal year(1) | Registrant contribution in last fiscal year(2) | Aggregate earnings in last fiscal year(3) | Aggregate withdrawals/ distributions in last fiscal year(4) | Aggregate balance at last fiscal year end(5) | |||||||||||
| Virginia C. Drosos | $ | 57,692 | $ | 28,846 | $ | 810 | $ | (12 | ) | $ | 87,336 | |||||
| Michele Santana | $ | 72,692 | $ | 36,346 | $ | 29,723 | $ | (275,075 | ) | $ | 1,122,528 | |||||
| Oded Edelman | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||
| George Murray | $ | 72,692 | $ | 36,346 | $ | 34,947 | $ | (204,662 | ) | $ | 1,255,495 | |||||
| Sebastian Hobbs | $ | 53,846 | $ | 26,923 | $ | 1,444 | $ | (25 | ) | $ | 82,188 | |||||
| Mark Light | $ | 67,789 | $ | 33,894 | $ | 49,503 | $ | (2,040,438 | ) | $ | — | |||||
| NEO | Executive contributions in last fiscal year(1) | Registrant contribution in last fiscal year(2) | Aggregate earnings in last fiscal year(3) | Aggregate withdrawals/ distributions in last fiscal year(4) | Aggregate balance at last fiscal year end(5) | |||||||||||
| Virginia C. Drosos | $ | 279,318 | $ | 139,659 | $ | 27,009 | $ | (6,125 | ) | $ | 987,861 | |||||
| Joan M. Hilson | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||
| J. Lynn Dennison | $ | 211,411 | $ | 14,094 | $ | 69,366 | $ | (261,307 | ) | $ | 2,586,216 | |||||
| Mary Elizabeth Finn | $ | 73,303 | $ | 36,652 | $ | (782 | ) | $ | (708 | ) | $ | 156,668 | ||||
| Jamie L. Singleton | $ | 36,787 | $ | 18,394 | $ | 4,825 | $ | (746 | ) | $ | 175,884 | |||||
| Michele Santana | $ | 171,601 | $ | 24,375 | $ | 29,192 | $ | (1,429,607 | ) | $ | — | |||||
(1) | All NEO contributions are reflected in their “Salary” or “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table. |
(2) | All registrant contributions reflect the Company match of executive contributions. These contributions are reported in the “All Other Compensation” column of the Summary Compensation Table. |
(3) | Aggregate earnings represent interest credited to each executive’s account based on the crediting rate of interest declared for the year. For Fiscal |
(4) | In Fiscal |
(5) | The aggregate balance reported as of February |
| NEO | Aggregate balance reported in current and prior Summary Compensation Table | ||
| Virginia C. Drosos | $ | 86,538 | |
| Michele Santana | $ | 1,034,621 | |
| Oded Edelman | $ | — | |
| George Murray | $ | 888,044 | |
| Sebastian Hobbs | $ | 80,769 | |
| Mark Light | $ | — | |
| NEO | Aggregate balance reported in Summary Compensation Table in prior years | ||
| Virginia C. Drosos | $ | 536,538 | |
| Joan M. Hilson | $ | — | |
| J. Lynn Dennison | $ | 453,231 | |
| Mary Elizabeth Finn | $ | 47,808 | |
| Jamie L. Singleton | $ | — | |
| Michele Santana | $ | — | |
NEO Agreements
This section summarizes the details of theeach NEO’s termination protection agreements for each NEO,agreement, other than Mr. LightMs. Santana, and Mr. Murray, as well as the terms of Mr. Edelman’s employment agreement. Information concerning the separation agreements entered intoagreement with Mr. Light and Mr. Murray is also shared below. For each NEO, theMs. Santana. The actual salary paid during Fiscal 20182020 to each NEO is set forth in the Summary Compensation Table, and thetheir current annual salary and maximum and target bonus opportunities are described in the CDA.
Each of the NEOs, other than Mr. Edelman, has entered intoMs. Santana, are party to a termination protection agreement with a U.S. subsidiary of the Company that governs terminations of employment and certain material terms of such NEO’s employment. The termination protection agreements with Mr. Light and Mr. Murray are no longer in effect.
Ms. Drosos’s termination protection agreement has an initial term of three years, effective from August 1, 2017, and thereafter shall automatically renew for one-year periods, unless either party provides notice of non-renewal at least six months prior to the end of the then currentthen-current term. Ms. Drosos’s employment shall continue until terminated by the Company at any time, by Ms. Drosos with at least 90 days’ notice, by either party upon notice of non-renewal of the agreement as described above, or upon Ms. Drosos’s death or termination for “cause,” which terminations may be effective immediately.
Ms. Drosos is entitled to the following severance payments, subject to the execution and non-revocation of a release of claims, (a) if she is terminated by the Company without “cause” or (b) in the event the Company elects not to renew the termination protection agreement at the end of any term:
one and one-half times (1.5x) the sum of base salary and target annual bonus, payable in a lump sum;
a lump sum amount equal to the annual bonus Ms. Drosos would have otherwise received for the fiscal year in which such termination occurs, based on actual performance and pro-rated for the number of days employed during such fiscal year;
awards granted pursuant to the LTIP, shall be paid in accordance with the terms of the LTIP and applicable award agreement, as discussed in the section “Termination Payments - Change of Control” included in this Proxy Statement; and
if Ms. Drosos elects coverage under COBRA, a cash payment equal to the employer contribution to the premium payment for actively employed senior executives, payable monthly for eighteen months or until such earlier termination of COBRA coverage.
Other NEO Termination Protection Agreements
Pursuant to the termination protection agreements with our other NEOs, other than Ms. Santana, each NEO’s employment will continue until the agreement is terminated by the Company at any time by notifying the NEO in writing or by the NEO at any time upon at least 360 days’ advance written notice (90 days for Ms. Hilson), other than upon the NEO’s death or upon a termination for “cause,” which terminations may be effective immediately.
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The termination protection agreements provide for compensation, including, (i) an annual base salary, (ii) target and maximum annual bonus, (iii) eligibility to be considered annually for a long-term incentive plan payment, as determined in the sole discretion of the Compensation Committee and (iv) participation in benefit plans made available to senior executives of the Company.
The NEOs are each entitled to severance payments, subject to the execution and non-revocation of a release of claims, if the NEO is (i) terminated by the Company without “cause” or (ii) if the NEO resigns for “good reason” within one year following a “change of control” (as these terms are defined in the termination protection agreements). In the event of any such termination, the NEO will be entitled to:
continued payment of base salary for twelve months following the date of termination;
a lump sum amount equal to the annual bonus the NEO would have otherwise received for the fiscal year in which such termination occurs, based on actual performance;
in respect of each then-ongoing award under the Company’s LTIP as of the date of termination, (a) with respect to awards that vest in whole or in part based on performance, at the end of each completed performance cycle for each such award, vesting calculated based on actual performance during the full performance cycle, prorated based on the number of calendar days that have elapsed since the beginning of the applicable performance cycle through the date of termination, payable in accordance with the LTIP and (b) with respect to awards that vest solely based on provision of services, vesting calculated based on the award the executive otherwise would have received for the vesting cycle, prorated based on the number of calendar days that have elapsed since the beginning of the applicable vesting cycle through the date of termination, payable in accordance with the LTIP; and
if the NEO elects coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), a cash payment equal to the employer contribution to the premium payment for actively employed senior executives, payable monthly for twelve months or until such earlier termination of COBRA coverage.
Terms common to the CEO and other NEO Termination Protection Agreements
If an NEO’s employment is terminated by reason of death, such NEO’s estate shall be entitled to:
continued payment of base salary for six months following the date of death;
a lump sum amount equal to the annual bonus the NEO would have otherwise received for the fiscal year in which such termination occurs based on actual performance and prorated for the number of calendar days employed during such fiscal year; and
in respect of each then-ongoing performance cycle under the LTIP as of the date of termination, (a) with respect to awards that vest in whole or in part based on performance, vesting based on target performance for the performance cycle and prorated for the number of calendar days employed during the performance cycle and (b) with respect to awards that vest solely based on the provision of services, vesting shall be pro-rated based on the number of calendar days employed during the vesting cycle.
If an NEO’s employment is terminated by reason of disability, such NEO shall be entitled to the annual bonus the NEO would have otherwise received for the fiscal year in which such termination occurs based on actual performance and prorated for the number of calendar days employed during such fiscal year, and LTIP awards will be paid in accordance with the terms of the applicable award agreement, as discussed in the section "Termination Payments - Change of Control" included in this Proxy Statement.
Upon any termination of an NEO’s employment, the NEO will be entitled to accrued and unpaid benefits or obligations.
During employment and for a specified period thereafter, each NEO will be subject to confidentiality, non-solicitation and non-competition restrictions. Ms. Hilson, Ms. Finn and Ms. Singleton are also subject to a non-disparagement and non-defamation restrictions in their agreements. In addition, the NEOs are required to meet certain share ownership levels, as set by the Board from time to time. The Company has agreed to provide the NEOs with coverage under a directors and officers liability insurance policy, at a level no less than that maintained for substantially all of the executive officers of the Company and the members of the Company’s Board.
Separation Agreement
Michele Santana Separation Agreement
On August 28, 2018, Sterling Jewelers Inc. (“Sterling”), a subsidiary of Signet, entered into a separation agreement with Ms. Santana (the “Separation Agreement”) in connection with her separation from service as Chief Financial Officer of Signet. On March 13, 2019, Sterling entered into a side letter to the Separation Agreement with Ms. Santana (the “Side Letter”). Pursuant to the Separation
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Agreement and the Side Letter, Ms. Santana served as Chief Financial Officer of Signet through April 3, 2019, the date Signet filed its most recent Form 10-K, and then became a senior advisor until April 30, 2019 (the “Termination Date”). As of the Termination Date, Ms. Santana became entitled to receive, in addition to any accrued but unpaid benefits or obligations:
continued payment of base salary through April 30, 2020;
an annual bonus for Fiscal 2020 based on actual performance for the full fiscal year;
with respect to the time-based restricted stock awards granted on April 7, 2017, and April 25, 2018, pro rata vesting based on the number of calendar days that have elapsed since the beginning of the applicable vesting cycle through April 30, 2019;
with respect to the performance-based restricted stock unit awards granted on April 27, 2017, and April 25, 2018, at the end of each completed performance cycle for each such award, vesting calculated based on actual performance during the full performance cycle, prorated based on the number of calendar days that have elapsed since the beginning of the applicable performance cycle through April 30, 2019;
if Ms. Santana elects coverage under COBRA, a cash payment equal to the employer contribution to the premium payment for actively employed senior executives, payable monthly through April 30, 2020;
a lump sum payment of up to $60,000 for reasonable outplacement services and affiliated job search expenses, for a period of up to one (1) year following the Termination Date;
a lump sum payment of up to $10,000 for legal fees incurred in connection with the Separation Agreement;
retention of her Company-provided iPhone; and
an appreciation gift per Company policy.
Pursuant to the Side Letter, from the Termination Date through June 30, 2019 (the “Consulting Period”), Ms. Santana agreed to provide consulting services to Signet on an as-needed basis, as reasonably requested by Signet. Signet agreed to pay Ms. Santana a fee of $125,000 in the aggregate during the Consulting Period, which were paid in two equal installments with the first installment paid on May 31, 2019 and the second installment paid at the end of the Consulting Period, which was subject to Ms. Santana’s execution of a release of claims against Signet, its affiliates and related parties.
For a period of 24 months after the Termination Date, Ms. Santana will be subject to non-competition and non-solicitation restrictions, in exchange for one yearwhich she will be entitled to receive a lump sum payment of $150,000 within 30 days following the termination dateend of the Consulting Period (subject to the release noted above) and perpetual$150,000 at the end of the 24-month period. Mrs. Santana will also be subject to ongoing confidentiality restrictions, cooperation requirements and non-disparagement restrictions. Signet has also agreed to instruct its named executive officers, the successor Chief Financial Officer and the Board not to disparage Ms. Santana. The Separation Agreement contains other customary provisions.
All severance payments and benefits (other than any payments accrued prior to termination) were conditioned on Ms. Santana’s (a) execution of a release of claims against Signet, its affiliates and related parties, (b) full and continued cooperation in good faith with Signet, its subsidiaries and affiliates in connection with certain matters relating to Signet, its subsidiaries and affiliates, and (c) continued compliance with the restrictive covenants discussed above.
Ms. Santana is required to comply with written Company policies, including any policies relating to the clawback of compensation.
Termination Payments
Each of the currently-employed NEOs is party to a termination protection agreement (described in the prior section) or other arrangement with the Company that may entitle him or her to payments or benefits in the event of:
Under the Omnibus Plan and award agreements, in the event of a corporate event or transaction involving the Company, a subsidiary and/or an affiliate, equity awards will be adjusted in such manner as the Compensation Committee shall determine. Under the terms of the Omnibus Plan, if a change of control occurs, unless otherwise prohibited by applicable law, or unless the Compensation Committee determines otherwise in an award agreement, the Committee may (but is not required to) make adjustments in the terms of outstanding awards, such as: (i) continuation or assumption by the surviving company or its parent; (ii) substitution by the surviving company or its parent of awards with substantially the same terms; (iii) accelerated exercisability, vesting and/or lapse of restrictions immediately prior to the occurrence of such event; (iv) upon written notice, provision for mandatory exercise of any outstanding awards, to the extent then exercisable, during a certain period (contingent on the consummation of the change of control) at the end of which the awards terminate; and (v) cancellation of all or any portion for fair value (as determined by the Compensation Committee). While it is the Compensation Committee’s intention in the event of a change of control to make adjustments in the terms of outstanding awards in accordance with (i) and (ii) above, as the Compensation Committee is unable to predict the exact circumstance of any change of control, it is considered prudent to reserve to itself the discretion of considering alternatives (iii), (iv) and (v) if the circumstances warrant it. .
Based on award agreements for outstanding awards, if the awards are not assumed or substituted upon a change of control, restricted shares will fully vest and performance units will vest on a prorated basis, based on the number of calendar days that have elapsed during the performance period through the change of control and based on actual performance to the time of the change of control compared to pro-rated performance targets; and iftargets. If awards are assumed upon a change of control, the restricted shares will continue to vest in accordance with their existing vesting schedule and performance units will be converted to time-based vesting units with a value equal to the value of the units that would have vested at the time of the change of control if the awards were not assumed or substituted, and such remaining award shall be subject to time-based vesting for the original performance period. Following the change of control, such modified awards will be subject to full vesting upon a termination without cause within one year, and pro rata vesting upon a termination due to death, disability or retirement.
The duration of certain non-competition covenants could be amended with consent following termination of employmentvalues shown in the eventtable below assume the assumption or substitution of the awards upon a change ofin control.
If any of the NEOs had died or become disabled during Fiscal 2018,2020, a pro rata portion of the unvested performance-based restricted share units and time-based restricted shares would have vested early, based on target performance for the performance-based restricted share units. For death and disability, pro rata awards are subject to prior completion of one year of service from the date of grant and calculated based on calendar days of service.service (the NEOs are exempt from this one-year vesting requirement in the event of death per the terms of their termination protection agreements). The value of early vesting due to death and disability is shown in the Termination Payments table above.below. See the discussion of Agreements with NEOs above for additional information concerning death and disability benefits available to the NEOs.
If any of the NEOs had retired during Fiscal 2018,2020 and had been of retirement age (which is 65 for all NEOs except Mr. Edelman, whose retirement age is 60)NEOs), a pro rata portion of the time-based restricted shares would vest on the retirement date, and a pro-rated portion of the performance-based restricted share units would be eligible to vest at the end of the applicable performance period based on actual performance. Pro rata awards are subject to prior completion of one year of service from the date of grant and are calculated based on calendar days of service. None of the NEOs were of retirement age as of the last day of Fiscal 2018.2020.
The below estimated values have been calculated on the basis that the NEO’s employment had been terminated as of February 2, 2018,January 31, 2020, the last business day of Fiscal 2018,2020, using aan NYSE closing market price as of that date ($51.37)24.31).
| NEO | Involuntary termination without cause(1)(2)(3) | Death(4) | Disability(4) | Voluntary termination with good reason within one year following a change of control(1)(2) | Involuntary termination without cause following a change of control(1)(2)(5) | Involuntary termination without cause (1)(2)(3) | Death (4) | Disability (4) | Voluntary termination with good reason within one year following a change of control (1)(2) | Involuntary termination without cause following a change of control(1)(2)(5) | ||||||||||||||||||||||
| Virginia C. Drosos | ||||||||||||||||||||||||||||||||
| Cash severance: | Cash severance: | |||||||||||||||||||||||||||||||
| Base salary | $ | 1,500,000 | $ | 750,000 | $ | — | $ | 2,250,000 | $ | 2,250,000 | Base salary | $ | 1,500,000 | $ | 750,000 | $ | — | $ | 2,250,000 | $ | 2,250,000 | |||||||||||
| Bonus | $ | 3,750,000 | $ | 1,500,000 | $ | 1,500,000 | $ | 4,875,000 | $ | 4,875,000 | Bonus | $ | 5,103,000 | $ | 2,853,000 | $ | 2,853,000 | $ | 6,228,000 | $ | 6,228,000 | |||||||||||
| Total cash severance | $ | 5,250,000 | $ | 2,250,000 | $ | 1,500,000 | $ | 7,125,000 | $ | 7,125,000 | Total cash severance | $ | 6,603,000 | $ | 3,603,000 | $ | 2,853,000 | $ | 8,478,000 | $ | 8,478,000 | |||||||||||
| Long term incentives: | Long term incentives: | |||||||||||||||||||||||||||||||
Accelerated vesting of performance-based restricted share units (6) | $ | 667,810 | $ | 667,810 | $ | — | $ | 667,810 | $ | 667,810 | Accelerated vesting of performance-based restricted share units (6) | $ | 2,913,594 | $ | 4,466,566 | $ | 1,658,509 | $ | 2,913,594 | $ | 2,913,594 | |||||||||||
Accelerated vesting of time-based restricted shares (7) | $ | 4,507,081 | $ | 1,720,096 | $ | — | $ | 4,507,081 | $ | 5,974,228 | Accelerated vesting of time-based restricted shares (7) | $ | 1,007,603 | $ | 1,007,603 | $ | 485,483 | $ | 1,007,603 | $ | 3,199,123 | |||||||||||
| Total value of long term incentives | $ | 5,174,891 | $ | 2,387,906 | $ | — | $ | 5,174,891 | $ | 6,642,038 | Total value of long term incentives | $ | 3,921,197 | $ | 5,474,169 | $ | 2,143,992 | $ | 3,921,197 | $ | 6,112,717 | |||||||||||
| Benefits and perquisites | $ | 18,993 | $ | — | $ | — | $ | 28,490 | $ | 28,490 | Benefits and perquisites | $ | 20,263 | $ | — | $ | — | $ | 30,395 | $ | 30,395 | |||||||||||
| Total | $ | 10,443,884 | $ | 4,637,906 | $ | 1,500,000 | $ | 12,328,381 | $ | 13,795,528 | Total | $ | 10,544,460 | $ | 9,077,169 | $ | 4,996,992 | $ | 12,429,592 | $ | 14,621,112 | |||||||||||
| Michele Santana | ||||||||||||||||||||||||||||||||
| Joan M. Hilson | ||||||||||||||||||||||||||||||||
| Cash severance: | Cash severance: | |||||||||||||||||||||||||||||||
| Base salary | $ | 700,000 | $ | 350,000 | $ | — | $ | 700,000 | $ | 700,000 | Base salary | $ | 700,000 | $ | 350,000 | $ | — | $ | 700,000 | $ | 700,000 | |||||||||||
| Bonus | $ | — | $ | — | $ | — | $ | — | $ | — | Bonus | $ | 665,700 | $ | 665,700 | $ | 665,700 | $ | 665,700 | $ | 665,700 | |||||||||||
| Total cash severance | $ | 700,000 | $ | 350,000 | $ | — | $ | 700,000 | $ | 700,000 | Total cash severance | $ | 1,365,700 | $ | 1,015,700 | $ | 665,700 | $ | 1,365,700 | $ | 1,365,700 | |||||||||||
| Long term incentives: | Long term incentives: | |||||||||||||||||||||||||||||||
Accelerated vesting of performance-based restricted share units (6) | $ | 383,749 | $ | 571,352 | $ | 407,929 | $ | 383,749 | $ | 805,636 | Accelerated vesting of performance-based restricted share units (6) | $ | 219,641 | $ | 219,641 | $ | — | $ | 219,641 | $ | 219,641 | |||||||||||
Accelerated vesting of time-based restricted shares (7) | $ | 308,198 | $ | 308,198 | $ | 221,400 | $ | 308,198 | $ | 625,995 | Accelerated vesting of time-based restricted shares (7) | $ | 169,752 | $ | 169,752 | $ | — | $ | 169,752 | $ | 622,993 | |||||||||||
| Total value of long term incentives | $ | 691,947 | $ | 879,550 | $ | 629,329 | $ | 691,947 | $ | 1,431,631 | Total value of long term incentives | $ | 389,393 | $ | 389,393 | $ | — | $ | 389,393 | $ | 842,634 | |||||||||||
| Benefits and perquisites | $ | 18,993 | $ | — | $ | — | $ | 18,993 | $ | 18,993 | Benefits and perquisites | $ | 20,263 | $ | — | $ | — | $ | 20,263 | $ | 20,263 | |||||||||||
| Total | $ | 1,410,940 | $ | 1,229,550 | $ | 629,329 | $ | 1,410,940 | $ | 2,150,624 | Total | $ | 1,775,356 | $ | 1,405,093 | $ | 665,700 | $ | 1,775,356 | $ | 2,228,597 | |||||||||||
| J. Lynn Dennison | ||||||||||||||||||||||||||||||||
| Cash severance: | ||||||||||||||||||||||||||||||||
| Base salary | $ | 650,000 | $ | 325,000 | $ | — | $ | 650,000 | $ | 650,000 | ||||||||||||||||||||||
| Bonus | $ | 618,150 | $ | 618,150 | $ | 618,150 | $ | 618,150 | $ | 618,150 | ||||||||||||||||||||||
| Total cash severance | $ | 1,268,150 | $ | 943,150 | $ | 618,150 | $ | 1,268,150 | $ | 1,268,150 | ||||||||||||||||||||||
| Long term incentives: | ||||||||||||||||||||||||||||||||
Accelerated vesting of performance-based restricted share units (6) | $ | 347,204 | $ | 498,266 | $ | 197,640 | $ | 347,204 | $ | 347,204 | ||||||||||||||||||||||
Accelerated vesting of time-based restricted shares (7) | $ | 435,096 | $ | 435,096 | $ | 54,760 | $ | 435,096 | $ | 1,733,133 | ||||||||||||||||||||||
| Total value of long term incentives | $ | 782,300 | $ | 933,362 | $ | 252,400 | $ | 782,300 | $ | 2,080,337 | ||||||||||||||||||||||
| Benefits and perquisites | $ | 20,263 | $ | — | $ | — | $ | 20,263 | $ | 20,263 | ||||||||||||||||||||||
| Total | $ | 2,070,713 | $ | 1,876,512 | $ | 870,550 | $ | 2,070,713 | $ | 3,368,750 | ||||||||||||||||||||||
