Hamilton Princess, 76 Pitts Bay Road, Hamilton, HM 08, BermudaPlace: Virtual meeting to be heldvia live audio webcast at www.virtualshareholdermeeting.com/SIG2020
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
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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 | |
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Election of Directors (See page 10) |
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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.
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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 |
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Corporate Governance (See page15) |
Our corporate governance policies reflectreflects best practicepractices
All Directors are elected annually.
The Chairman of the Board is an independent Director.
All Directors are independent with the exception of the Chief Executive Officer (“CEO”).
Independent Chairman of the Board approves Board meeting agendas and effective Board operation.
The Company has a separate Chairman and CEO.
The Company has majority voting for Director elections.
The Board has been significantly refreshed with recent additions of two highly experienced Directors.
Board Diversity Policy has been adopted.
Over 50% of the Board is comprised of women.
Executive sessions of independent Directors are held at each regularly scheduled Board meeting.
Company policy prohibits pledging and hedging of Company shares by Directors and employees (Team Members).
Executive officer and Director Share Ownership Policies have been adopted.
The Board regularly participates in CEO succession planning.
Annual Board, Committee and Director evaluations are conducted, including an external Board evaluation in Fiscal 2018.
Director Tenure Policy is in place.
Director skills matrix is reviewed and approved by the Board each year.
Each Director who was in office at the time attended at least 75% of Board and committee meetings during Fiscal 2018.
Each Director who was in office at the time attended the 2017 Annual Meeting of Shareholders.
The Board oversees corporate social responsibility.
The Board oversees risk management. |
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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 |
VOTING MATTERS AND BOARD RECOMMENDATIONS |
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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 |
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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 |
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Executive Compensation (See page 27) |
EXECUTIVE COMPENSATION PROGRAMS ALIGNED WITH PERFORMANCE
ExecutiveOur executive compensation programs areprogram is designed to attract, motivate, reward and retain talent and align the interests of executives with Shareholdersshareholders by paying for performance
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:
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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:
Substantial majority of long-term and short-term awards are performance-based.Cash payments and equity awards following change of control require a qualified termination to vest or be paid, unless awards are not assumed or replaced.
Clawback Policy is in place.
Share ownership guidelines are in place for named executive officers (“NEOs”) and independent Directors.
Compensation Committee engages an independent compensation consultant.
Only limited perquisites are offered to executives.
No excise tax or income tax gross-ups are provided.
The Company did not meet the performance goals it set for Fiscal 2018, so no payments were made under the Company’s annual incentive plan. In addition, performance-based restricted share units granted in Fiscal 2016 did not vest because the applicable performance criteria were not satisfied.
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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 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.
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?
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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.
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?
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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.
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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.
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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) |
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.
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.
Ownership of the Company
SHAREHOLDERS WHO BENEFICIALLY OWN AT LEAST FIVE PERCENT OF THE COMMON SHARESShareholders Who Beneficially Own At Least Five Percent of the Common Shares
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.
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Name and address of beneficial owner | Amount and nature of beneficial ownership | Percent of class |
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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 | 6,838,063(1)
| 11.3 | % |
Capital Research Global Investors
333 South Hope Street, 55th Floor
Los Angeles, CA 90071
| 6,178,2337,239,263 (2)
| 10.212.2 |
| % |
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, PA 19355, USA | 5,972,2245,864,547 (3)
| 9.8611.2 |
| % |
BlackRock Inc.
55 East 52nd Street
New York, NY 10055,Causeway Capital Management LLC 11111 Santa Monica Blvd, 15th Floor Los Angeles, CA 90025, USA
| 3,501,8993,840,304 (4)
| 5.87.3 |
| % |
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.
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(1) | Based upon a Schedule 13D13G/A filed on October 13, 2016,February 4,2020, BlackRock Inc. reported beneficial ownership of 8,380,484 Common Shares as follows: sole voting power over 8,167,547 Common Shares and sole dispositive power over 8,380,484 shares. |
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(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 6,658,0597,239,263 Common Shares. The Schedule 13D reports 625,000 Series A Convertible PreferencePreferred Shares, par value $0.01 per share, which as of the date of the Schedule 13D were convertible into 6,658,0597,239,263 Common Shares of the Company. Since the filing of the 13D, the conversion rate has changed, and the 625,000 Series A Convertible PreferencePreferred Shares are now convertible into 6,838,063 shares.7,643,562 Common Shares. |
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(2) (3) | Based upon a Schedule 13G/A filed on February 14, 2018, Capital Research Global Investors reported beneficial ownership of 6,178,233 shares as follows: sole voting power over 6,178,233 shares and sole dispositive power over 6,178,233 shares. |
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(3)
| Based upon a Schedule 13G/A filed on February 8, 2018,12, 2020, The Vanguard Group, Inc. (“Vanguard”) reported beneficial ownership of 5,972,224 shares5,864,547 Common Shares as follows: sole voting power over 71,825 shares,50,476 Common Shares, shared voting power over 13,240 shares,14,240 Common Shares, sole dispositive power over 5,892,601 shares5,806,813 Common Shares and shared dispositive power over 79,623 shares.57,734 Common Shares. Vanguard reported that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 65,856 shares43,494 Common Shares as a result of its serving as investment manager of collective trust accounts, and that Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 19,209 shares21,222 Common Shares as a result of its serving as investment manager of Australian investment offerings. |
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(4) | Based upon a Schedule 13G/A filed on January 30, 2018, BlackRock Inc.February 14, 2020, Causeway Capital Management LLC reported beneficial ownership of 3,501,899 shares3,840,304 Common Shares as follows: sole voting power over 3,107,116 shares2,059,184 Common Shares and sole dispositive power over 3,501,899 shares.3,840,304 Common Shares. |
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(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. |
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(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. |
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(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. |
Ownership of the Company (continued)
OWNERSHIP BY DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERSby Directors and Executive Officers
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.
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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 |
|
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| | | | | | |
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 |
|
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(1) | No sharesCommon Shares are pledged as security. All sharesCommon Shares are owned directly with the exception of Oded Edelman, a non-NEO executive officer, who holds 90,398 shares indirectly through Oeysan LTD, a wholly-owned company.entity. |
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(2) | Shares issuable upon the exercise of vested stock options and/or settlement of restricted stock units. |
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(3)
| All holdings represent less than 1% of the Common Shares issued and outstanding. No Series A Convertible PreferencePreferred Shares are held.held by our Directors or NEOs. |
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(5) | (6)
| Green Equity InvestorsGEI 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”) are the direct owners of 625,000 Series A Convertible PreferencePreferred Shares that are convertible into 6,838,063 7,643,562Common Shares. Mr. Sokoloff and Mr. Seiffer directly (whether through ownership or position) or indirectly through one or more intermediaries, may be deemed to be thean indirect beneficial owner of the shares owned by GEI VI, GEI Side VI, Associates VI-A and Associates VI-B. Mr. Sokoloff disclaimsand Mr. Seifferdisclaim beneficial ownership of the shares except to the extent of histheir pecuniary interest therein. |
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(8) (7) | Former Director and executive officer.officer |
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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company’s Directors, executive officers and persons who beneficially own more than 10% of a registered class of the Company’s equity securities to file with the SEC reports of ownership and changes in ownership. Executive officers, Directors and such security holders are required by SEC regulation to furnish the Company with copies of all such forms which they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and information provided by the reporting persons, all of its Directors and executive officers filed the required reports on a timely basis during Fiscal 2018.
Proposals for the Annual Meeting of Shareholders
Proposal 1: Election of Eleven Directors
(Item 1 on the Proxy Card)
Shareholders will be asked to consider eleven nominees for election to the Board to serve until the next Annual Meeting of Shareholders or until their successors are duly elected. Each current |
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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.
Mr. Walls has not been nominated for re-election as a Director at this Annual Meeting consistent with the Director Tenure Policy that Directors are expected to retire from the Board at the annual meeting following the earlier of his or her fifteenth anniversary of service on the Board or 75th birthday. The Board had recently reduced the size of the Board from thirteen to twelve following the passing of Mr. Stack, and following Mr. Walls' retirement at this Annual Meeting, the Board size will be reduced to eleven.
NOMINEES FOR DIRECTORSNominees
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.
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H. TODD STITZER*STITZER | Private Directorships:Directorship: | Former Directorships:Directorship: |
Age: 6668 Director Since: January 2012 | • Massachusetts Mutual Life Insurance Company | • Diageo plc (June 2013) |
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.
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VIRGINIA C. DROSOS | Public Directorships:Directorship: | Former Directorships:Directorship: |
Age: 5557 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.
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R. MARK GRAF*GRAF | Former Directorships:Directorship: | |
Age: 5355 Director Since: July 2017 | • BNC Bancorp (2010-2011) | |
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.
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HELEN MCCLUSKEY*MCCLUSKEY | Public Directorships: | Former Directorships: |
Age: 6365 Director Since: August 2013 | • Dean Foods Company • Abercrombie & Fitch Co.
| • Avon Products, Inc. | • PVH Corporation (June 2014) • The Warnaco Group, Inc. (February 2013) |
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.
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SHARON L. MCCOLLAM*MCCOLLAM | Public Directorships: | Private Directorships: |
Age: 5557 Director Since: March 2018 | • Stitch Fix, Inc. • Advance Auto Parts, Inc. • Chewy, Inc.
| • PetSmart (Argos Holdings)International Walls, Inc. (f/k/a Art.com, Inc.) • Hallmark Cards, Inc. • Art.comGetYourGuide AG |
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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MARIANNE MILLER PARRS* | Public Directorships: | |
Age: 74
Director Since: October 2008
| • Stanley Black & Decker, Inc.
• CIT Group Inc.
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Marianne Miller Parrs is a Director of Stanley Black & Decker, Inc. (previously The Stanley Works Inc.) and CIT Group Inc. She retired in 2007 as Executive Vice President and Chief Financial Officer of International Paper Company, having joined in 1974 as a Pension Trust Investment Manager and holding a number of positions before first being appointed Senior Vice President and Chief Financial Officer in 1995. She held this position until 1999 when she was appointed Executive Vice President with responsibility for Information Technology, Global Sourcing, Global Supply Chain and Investor Relations. She held this role for six years and she was also reappointed Chief Financial Officer in 2005. Previously Ms. Parrs was a Security Analyst at a number of firms including Merrill Lynch. The Board considered it necessary to recruit to the Board a Director with substantial US financial reporting experience. The Board has concluded that Ms. Parrs should continue to serve on the Board for these reasons.
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THOMAS PLASKETT* | Private Directorships: | Former Directorships: |
Age: 74
Director Since: October 2008
| • ESL Technologies, Inc.
• ThermoTek, Inc.
| • Alcon Laboratories, Inc. (May 2011)
• RadioShack Corporation (November 2013)
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Thomas Plaskett has been Chairman of Fox Run Capital Associates, a private consulting firm focusing on financial advisory and corporate governance services for emerging companies, since 1991. From 1999 until 2000 he served as the Chairman, President and Chief Executive Officer of Probex Corp., an energy technology company. He also served as Vice Chairman of Legend Airlines from 1997 until 2001. Mr. Plaskett served as Interim President, Chief Executive Officer, and Acting Chief Financial Officer of Greyhound Lines for two years before becoming Chairman from 1995 until 1999, when the company was sold. Previously, he was Chairman, President and Chief Executive Officer of Pan Am Corporation from 1988 until 1991. Prior to that, Mr. Plaskett was President and Chief Executive Officer of Continental Airlines from 1986 to 1987. Mr. Plaskett also held several senior management positions at American Airlines Group, Inc. and AMR Company between 1974 and 1986. Mr. Plaskett served as a Director of Alcon Laboratories Inc. and RadioShack Corporation until May 2011 and November 2013, respectively. Mr. Plaskett joined the Board as his considerable general management skills were considered to be an enhancement to the overall efficiency and effectiveness of the Board. The Board has concluded that Mr. Plaskett should continue to serve on the Board for these reasons.
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NANCY A. REARDON*REARDON | Public Directorships:Directorship: | Private Directorships:Directorship: |
Age: 6567 Director Since: March 2018 | • Big Lots, Inc.
| • Kids II, Inc.
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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.
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JONATHAN SOKOLOFF*SEIFFER | Public Directorships:Directorship: | Former Directorships:Directorship: |
Age: 6048 Director Since: October 2016June 2019 | • Container Store Group,BJ’s Wholesale Club Holdings, Inc. • Shake Shack Inc.
| • Whole Foods Market, Inc. | • Rite Aid Corporation (May 2011) |
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.
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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.
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BRIAN TILZER* | | |
Age: 47
Director Since: February 2017
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Brian Tilzer currently serves as Chief Digital Officer at CVS Health Corporation and has more than 20 years of experience in strategic business development, operations and information technology, with a deep concentration in corporate and e-commerce strategy. Prior to joining CVS Health, Mr. Tilzer was the Senior Vice President of Global e-Commerce with Staples, where he developed and led several multi-channel digital innovation strategies. Mr. Tilzer holds a BA from Tufts University, an MBA from The Wharton School, and is a member of the Mass Technology Leadership Council, a leading technology association and the premier network for technology executives, entrepreneurs, investors and policy leaders. Mr. Tilzer has expertise in information technology, omni-channel, e-commerce, and strategic planning and analysis. The Board has concluded that Mr. Tilzer should continue to serve on the Board for these reasons.
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EUGENIA ULASEWICZ*ULASEWICZ | Public Directorships: | Former Directorship: |
Age: 6466 Director Since: September 2013 | • Bunzl plcVince Holding Corp. • Hudson Ltd. • Vince Holding Corp.ASOS plc | • Bunzl plc
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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.
SUMMARY OF DIRECTOR QUALIFICATIONS AND EXPERIENCE12
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:
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| H. Todd Stitzer | Virginia C. Drosos | R. Mark Graf | Zackery Hicks | Helen McCluskey | Sharon L. McCollam | Marianne Parrs | Thomas Plaskett | Nancy A. Reardon | Jonathan SokoloffSeiffer | Brian Tilzer | Eugenia Ulasewicz |
Leadership | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü |
Financial & Accounting Literacy | ü | ü | ü | ü | ü | ü | ü | | ü | ü | |
Capital Allocation | ü | ü | ü | ü | ü | ü | ü | | ü | | ü |
Strategic Planning & Analysis | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü | ü |
Business Development, Mergers & Acquisitions | ü | 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 | | | ü |
Information Technology Security | & Cybersecurity | | | | ü | | ü | | | ü | |
Digital, Multi-Channel & Social Media | ü | ü | | | ü | | | | | ü | |
Technology & Innovation | | 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 | | ü | |
Law & Governance | ü | | | | | ü | ü | | | ü | | |
Governmental & Geopolitical Public Affairs | ü | | ü | | | | | ü | | | |
Communication | ü | ü | ü | ü | | ü | ü | | | ü |
Real Estate | | | ü | | | ü | | | | ü |
Real EstateBusiness Transformation | | 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:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES NAMED ABOVE.
Proposal 2: Appointment of Independent Auditor (Item 2 on the Proxy Card)
Proposal 2 is to appoint KPMG LLP (“KPMG”) as independent auditorIn addition to the Company until the endskills and qualifications listed above under “Director Qualifications and Experience”, board diversity is one of the next Annual Meetingkey attributes the Nominations and Corporate Governance Committee considers in identifying potential candidates for the Board, including diversity in terms of Shareholdersbusiness experience, functional skills, age, gender, ethnicity and national origin. Our Director nominees are comprised of nominees ranging from the ages of 48 to authorize the Audit Committee68, including five incumbent nominees (50%) who are women. In addition, as of the Board to determine its compensation.
The Audit Committee is responsible for the recommendation, compensation, retention and oversight of the independent auditor. This Committee 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 2019. 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.
A representative of KPMG will attend the 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.
FEES AND SERVICES OF KPMG
The Audit Committee has adopted a policy requiring advance approval of the Company’s independent registered public accounting firm’s fees and services by the Audit Committee. In Fiscal 2018, 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: (i) bookkeeping, (ii) systems design and implementation, (iii) appraisals or valuations, (iv) actuarial services, (v) internal audit, (vi) management or human resources services, (vii) investment advice or investment banking, (viii) legal services and (ix) expert services unrelated to the audit. All fees paid by the Company to KPMG for Fiscal 2018 and Fiscal 2017 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 2018 and Fiscal 2017 for their respective audits of the Company’s consolidated financial statements and the effectiveness of internal control over financial reporting for Fiscal 2018 and Fiscal 2017, and for their respective reviews of the Company’s unaudited condensed consolidated interim financial statements. This table also reflects fees for other services rendered by KPMG during Fiscal 2018 and Fiscal 2017.
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| Fiscal 2018 (millions) |
| Fiscal 2017 (millions) |
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Audit Fees | $ | 5.5 |
| $ | 4.4 |
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Audit-Related Fees(1) | $ | 0.5 |
| $ | 0.1 |
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Tax Fees(2) | $ | 0.4 |
| $ | 0.5 |
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All Other Fees | $ | 0.1 |
| $ | — |
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Total Fees | $ | 6.5 |
| $ | 5.0 |
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(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. |
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(2)
| Tax fees consisted principally of professional services rendered for tax compliance and advisory services. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THIS PROPOSAL.
Proposal 3: Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s Named Executive Officers as Disclosed in the Proxy Statement(Item 3 on the Proxy Card)
Shareholders are being asked to vote, on a non-binding advisory basis, on the compensation of the Company’s NEOs, as disclosed pursuant to the compensation disclosure rules of the SEC, including the CDA, the Fiscal 2018 Summary Compensation Table and related tables and narrative discussion contained in this Proxy Statement.
EXPLANATION
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”), Signet is providing Shareholders with the opportunity to cast a vote, on a non-binding advisory basis, on the compensation of the Company’s NEOs as disclosed pursuant to the compensation disclosure rules of the SEC as set forth in this Proxy Statement (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 attract, motivate and retain 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 Signet’s executive compensation philosophy, fully support the Company’s goals and provide an appropriate balance between risk and incentives. This past year was a difficult one for the Company, and management’s execution on the Company’s operating framework fell substantially short of expectations. As a result, no payments were made under the Company’s annual incentive plan. In addition, performance-based restricted share units granted in Fiscal 2016 did not vest because the applicable performance criteria were not satisfied. Shareholders are urged to read the CDA sectiondate 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 of Shareholders:
“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, Shareholders’ 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 PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.
Proposal 4: Approvalaverage tenure of the Signet Jewelers Limited 2018 Omnibus Incentive Plan, IncludingDirector nominees is 4.25 years, with six Directors added within the Authorization of the Issuance of Additional Shares Thereunder (Item 4 on the Proxy Card)past four years.
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:
EXPLANATION
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.
Reservation of Shares
Subject to adjustments as described below, the maximum aggregate number of Common Shares that may be issued pursuant to awards granted under the 2018 Plan will be 3,575,000, and the maximum number of Common Shares available for granting incentive stock options under the 2018 Plan will be 3,575,000. Any Common Shares delivered under the 2018 Plan will consist of authorized and unissued shares, or treasury shares. Common Shares available under Signet’s 2009 Omnibus Incentive Plan will not be available for future grants upon Shareholder approval of the 2018 Plan, and will not be transferred to the 2018 Plan.
The Compensation Committee and the Board of Directors consideredRecommends a number of factors in approving the proposed
number of authorized Common Shares under the Plan, including our historical burn rate, the number of Common Shares remaining available under the current plan for future awards, the number of issued and outstanding Common Shares already granted, and dilution resulting from the proposed increase in authorized Common Shares.
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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% |
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(1)
| Reflects total gross number of Common Shares subject to equity awards granted during the fiscal year, and does not reflect subsequent forfeitures or cancellations. |
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(2)
| Net burn rate is calculated by dividing the total number of Common Shares subject to equity awards granted during the fiscal year by the total weighted-average number of Common Shares issued and outstanding during the period, and does not reflect subsequent forfeitures or cancellations. |
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(3)
| Dilution is calculated by dividing the sum of (a) the number of Common Shares subject to equity awards outstanding at the end of the fiscal years, plus (b) the number of Common Shares available for future grants, by the fully diluted number of Common Shares issued and outstanding at the end of the fiscal year. |
The Company expects dilution as of April 16, 2018 would be 7.05% on a fully diluted basis, based on including the additional 3,575,000 million Common Shares that would be available for issuance under the 2018 Plan upon its approval by Shareholders and excluding the Common Shares available under the 2009 Omnibus Incentive Plan. The Compensation Committee feels the expected potential dilution that will result from the Common Share request is reasonable for a company of Signet’s size in its industry.
In the event of any corporate event or transaction involving the Company, a subsidiary and/or an affiliate, such as a merger, amalgamation, consolidation, reorganization, recapitalization, reclassification, separation, share dividend, extraordinary cash dividend, share split, reverse share split, split up, spin-off, combination of Shares, exchange of Shares, dividend in kind, or other like change in capital structure, appropriate and equitable adjustments will be made to (i) the maximum number and kind of Common Shares, units or other securities or property available for grant under the 2018 Plan, (ii) the number and kind of Common Shares, units or other rights subject to then outstanding awards, (iii) the option price, grant price or purchase price for each share, unit or other rights subject to outstanding awards, (iv) other value determinations applicable to the 2018 Plan or outstanding awards and (v) other termsVote “For” Each of the awards that are affected by the event.Nominees Named Above.
Share Replenishment
Any Common Shares delivered to the Company as part or full satisfaction of the purchase price of an option or stock appreciation right, or to satisfy the withholding obligation with respect to an option or stock appreciation right, will not be available for future awards under the 2018 Plan (such that, with respect to a stock appreciation right that is settled in Common Shares, the gross number of Common Shares pursuant to such award shall not be available for future awards). Any Common Shares delivered to the Company as part or full satisfaction of the purchase price of an award, other than an option or stock appreciation right, or to satisfy the withholding obligation with respect to an award, other than an option or stock appreciation right, will be available for future awards under the 2018 Plan. In the event that any outstanding award expires, is forfeited, canceled or otherwise terminated without the issuance of Common Shares or is otherwise settled for cash, the Common Shares retained by the Company will be available for future awards under the 2018 Plan. If the Plan Administrator (defined below) authorizes the assumption under the 2018 Plan, in connection with any merger, amalgamation, consolidation, acquisition of property or stock, or reorganization, of awards granted under another plan, such assumption will not reduce the maximum number of Common Shares available for issuance under the 2018 Plan. In the event that any outstanding award under the 2009 Signet Jewelers Limited Omnibus Incentive Plan expires, is forfeited, cancelled or otherwise terminated without the issuance of Common Shares or is otherwise settled for cash, the Common Shares retained by the Company will be available for future awards under the 2018 Plan.
Administration
The 2018 Plan will be administered by the Compensation Committee or subcommittee thereof, such other committee of the Board or the Board as a whole (the “Plan Administrator”). Subject to the limitations set forth in the 2018 Plan, the Plan Administrator has the authority to, among other things, determine the persons to whom awards are to be granted, prescribe the restrictions, terms and conditions of all awards, interpret the 2018 Plan and terms of awards, adopt rules for the administration, interpretation and application of the 2018 Plan, make all determinations with respect to a participant’s service and the termination of such service for purposes of any award, correct any defects or omissions or reconcile any ambiguities or inconsistencies in the 2018 Plan or any award, accelerate the vesting or exercisability of any award and adopt such procedures, modifications or subplans as are necessary. The Plan Administrator will have the right to delegate in writing to one or more officers of the Company or a subsidiary the authority to grant and determine the terms and conditions of awards, other than with respect to awards granted to any member of the Board or any eligible participant who is subject to Rule 16b-3 under the Exchange Act.
Eligibility
Awards under the 2018 Plan may be granted to any employees, non-employee directors, consultants or other personal service providers of the Company or any of its subsidiaries. As of April 16, 2018, approximately 160 employees and 11 non-employee directors would be eligible to participate in the 2018 Plan.
Minimum Vesting
The vesting period for all awards (or any portion of an award), other than cash awards, granted under the 2018 Plan will be at least one year; provided that up to 5% of Common Shares that may be issued pursuant to awards granted under the 2018 Plan may be granted without regard to any minimum vesting period.
Stock Options Awards
Options granted under the 2018 Plan may be issued as either incentive stock options, within the meaning of Section 422 of the Code, or as nonqualified stock options. The option price of an option will be not less than the fair market value of a Common Share on the date of the grant of the option, or such higher amount determined by the Plan Administrator. The Plan Administrator will determine the vesting and/or exercisability requirements and the term of exercise of each option, including the effect of termination of service of a participant or a change of control. The vesting requirements may be based on the continued employment or service of the participant for a specified time period or on the attainment of specified performance goals established by the Plan Administrator, subject to the minimum vesting provisions described above. The maximum term of an option will be ten years from the date of grant. Dividends shall not be paid with respect to Common Shares subject to an option and dividend equivalents may not be granted with respect to Common Shares subject to an option.
To exercise an option, the participant must pay the aggregate option price in full, at the election of the participant (i) in cash or its equivalent or, (ii) to the extent permitted by the Plan Administrator, in Common Shares having a fair market value equal to the aggregate option price of the Common Shares being purchased and satisfying other requirements that may be imposed by the Plan Administrator, (iii) partly in cash and, to the extent permitted by the Plan Administrator, partly
in Common Shares (as described in (ii) above), (iv) to the extent permitted by the Plan Administrator, by reducing the number of Common Shares otherwise deliverable upon the exercise of the option, or (v) if there is a public market for the Common Shares and subject to requirements that may be imposed by the Plan Administrator, through the delivery of irrevocable instructions to a broker to sell Common Shares obtained upon the exercise of the option and to deliver to the Company an amount out of the proceeds equal to the aggregate option price for the Common Shares being purchased. The Plan Administrator may establish any other method of payment that it determines is consistent with applicable law and the purpose of the 2018 Plan. Without the prior approval of the Company’s shareholders, the 2018 Plan prohibits the cancellation of underwater options in exchange for cash or another award (other than in connection with a change of control of the Company) or the “repricing” of options.
Stock Appreciation Rights
A stock appreciation right may be granted either in tandem with an option or without a related option. A stock appreciation right entitles the participant upon exercise to receive a payment equal to the excess of (a) the fair market value of a specified number of Common Shares on the date of exercise over (b) the grant price of the right. The grant price of the right will be determined by the Plan Administrator on the date of grant, but will not be less than the fair market value of a Common Share on the date of grant. This payment may be in cash, Common Shares, other property or any combination thereof, as determined by the Plan Administrator. The Plan Administrator will determine the vesting requirements and the term of exercise of each stock appreciation right, including the effect of termination of service of a participant or a change of control. The vesting requirements may be based on the continued employment or service of the participant for a specified time period or on the attainment of specified business performance goals established by the Plan Administrator, subject to the minimum vesting provisions described above. The maximum term of a stock appreciation right will be ten years. Without the prior approval of the Company’s shareholders, the 2018 Plan prohibits the cancellation of underwater stock appreciation rights in exchange for cash or another award (other than in connection with a change of control of the Company) or the “repricing” of stock appreciation rights. Dividends shall not be paid with respect to a stock appreciation right and dividend equivalents may not be granted with respect to a stock appreciation right.
Restricted Share Awards
An award of restricted shares is a grant by the Plan Administrator of a specified number of Common Shares that may be forfeited if specified events occur. The Plan Administrator will establish in each award agreement the period(s) of restriction and the specified events that may result in forfeiture, including the participant’s termination and the participant’s failure to attain specified performance goals, subject to the minimum vesting provisions described above. The Plan Administrator will establish in each award agreement whether or not a restricted share holder will have the right to vote the Common Shares during the restriction period and the right to receive dividends during the restriction period. If a restricted share holder has the right to receive dividends, these dividends will be subject to the same vesting terms as the related restricted shares.
Restricted Share Units
Restricted Share Units (“RSUs”) provide the participant the right to receive Common Shares or cash, or a combination thereof, at a specified date in the future. Any cash payment will be based on the fair market value of a Common Share on the payment date. RSUs may be subject to vesting requirements, restrictions and conditions to payment. Such requirements may be based on the continued service of the participant for a specified time period, the attainment of specified performance goals established by the Plan Administrator, and/or such other terms and conditions as approved by the Plan Administrator, subject to the minimum vesting provisions described above. An RSU award will become payable to a participant at the time or times determined by the Plan Administrator and set forth in the award agreement, which may be upon or following the vesting of the award. RSUs are payable in cash or in Common Shares or in a combination of both. Dividend equivalent rights may be granted with respect to Common Shares subject to RSUs; provided that any dividend equivalent rights that are granted will be subject to the same vesting terms that apply to the underlying RSUs. RSU holders will not have any rights as a shareholder with respect to Common Shares subject to RSUs until such times as Common Shares are delivered to the participant.
Other Share-Based Awards
Other share-based awards are awards of Common Shares and awards that are valued in whole or in part by reference to the fair market value of Common Shares, including phantom awards. The Plan Administrator will determine the form and conditions of other share-based awards, including the right to receive one or more Common Shares (or the equivalent cash value of such shares) upon completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives, subject to the minimum vesting provisions described above. Dividend or dividend equivalent rights may be granted with respect to Common Shares subject to other share-based awards; provided that
any dividend or dividend equivalent rights that are granted will be subject to the same vesting terms that apply to the underlying other-share based awards.
Cash Awards
A cash award is denominated in a cash amount (rather than in Common Shares) and payment may be based on the attainment of specified levels of performance goals, continued service or such other conditions as determined by the Plan Administrator.
Change of Control
Upon the occurrence of a “change of control” (as defined in the 2018 Plan), unless otherwise specifically prohibited under applicable laws or by the applicable rules and regulations of any governing governmental agencies or national securities exchanges, or unless otherwise provided in the applicable award agreement, the Plan Administrator is authorized to make adjustments in the terms and conditions of outstanding awards, including without limitation the following: (i) continuation or assumption of such outstanding awards by the Company or by the surviving company or corporation or its parent; (ii) substitution by the surviving company or corporation or its parent of awards with substantially the same terms as such outstanding awards; (iii) accelerated exercisability, vesting and/or lapse of restrictions; and (iv) upon written notice, provide that any outstanding awards must be exercised, to the extent then exercisable, during a reasonable period of time immediately prior to the scheduled consummation of the event, or such other period as determined by the Plan Administrator (contingent upon the consummation of the event), and at the end of such period, such awards will terminate to the extent not so exercised within the relevant period; and (v) cancellation of all or any portion of outstanding awards for fair value, as determined in the sole discretion of the Plan Administrator and which may be zero.
Forfeiture Events
The Plan Administrator may specify in an award agreement that an award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, including termination of service for “cause” (as defined in the 2018 Plan), violation of material Company policies or breach of noncompetition, nonsolicitation, confidentiality or other restrictive covenants that may apply to the participant.
Participants may be subject to the Company’s compensation recovery policy, “clawback” or similar policy, as may be in effect from time to time and/or any compensation recovery, “clawback” or similar policy made applicable by law including the Dodd-Frank Act.
Awards to Non-U.S. Employees or Directors
To comply with the laws in countries other than the United States in which the Company or any of its subsidiaries or affiliates operates or has employees or directors, the Plan Administrator, in its sole discretion, has the power and authority to (a) determine which subsidiaries or affiliates will be covered by the 2018 Plan; (b) determine which eligible persons outside the United States are eligible to participate in the 2018 Plan; (c) modify the terms and conditions of any award granted to eligible persons outside the United States to comply with applicable foreign laws, (d) take any action, before or after an award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals and (e) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable.
The Company will adopt an addendum to the 2018 Plan applicable to participants who are residents of Israel, which may include terms that vary from the terms described in this summary.
Duration, Amendment, Modification, Suspension and Termination
The term of the 2018 Plan is ten years from the date it is adopted by the Board. The Plan Administrator may amend, alter, suspend, discontinue or terminate the 2018 Plan or any portion thereof or any award thereunder at any time, provided that no such action will be made without the written consent of the participant if such action would materially diminish the rights of any participant under any award granted under the 2018 Plan. The Plan Administrator may seek the approval of any such action by the Company’s shareholders if approval is necessary to comply with any tax or regulatory requirement applicable to the 2018 Plan or such action requires shareholder approval under applicable stock exchange requirements. Notwithstanding the foregoing, the Plan Administrator may amend the 2018 Plan or any award thereunder without participant consent to the extent it deems necessary to comply with applicable laws.
U.S. Federal Income Tax Consequences Relating to the 2018 Plan
The following is a summary of certain material U.S. federal income tax consequences in effect today applicable to awards under the 2018 Plan. State, local and foreign tax treatment, which is not discussed below, may differ from federal income tax treatment. This summary is general in nature, and it may not apply to a participant’s particular situation.
Stock Options
Non-Qualified Stock Options: The grant of a nonqualified stock option will not result in federal income tax liability at the time of grant. The participant will recognize ordinary income in the year in which the stock option is exercised in an amount equal to the excess of (a) the fair market value of the Common Shares on the exercise date over (b) the exercise price paid for those Common Shares. A corresponding tax deduction is generally available to the Company. Upon a subsequent sale or exchange of the Common Shares, any gain or loss recognized in the sale or exchange is treated as a capital gain or loss (long-term or short-term depending on the applicable holding period) for which the Company is not entitled to a deduction.
Incentive Stock Options: Generally, the participant will not recognize any taxable income at the time the incentive stock option is granted or exercised. The participant will recognize income in the year in which the Common Shares purchased upon exercise of the incentive stock options are sold. With certain exceptions, a disposition of Common Shares purchased under an incentive stock option within two years from the date of grant or within one year after exercise results in ordinary income to the participant (and generally a corresponding tax deduction to the Company) equal to the value of the Common Shares at the time of exercise less the exercise price. Any additional gain recognized in the disposition is treated as a capital gain for which the Company is not entitled to a deduction. If the sale proceeds from such disposition are less than the fair market value of the Common Shares on the date of exercise, any ordinary income recognized is limited to the gain (if any) realized on the sale. If the participant does not dispose of the Common Shares until after the expiration of these one- and two-year holding periods, any gain or loss recognized upon a subsequent sale is treated as a long-term capital gain or loss for which the Company is not entitled to a deduction.
Share Appreciation Rights
The grant of a share appreciation right will not result in federal income tax liability at the time of grant. The participant will recognize ordinary income in the year in which the share appreciation right is exercised in an amount equal to the value received upon exercise. A corresponding tax deduction is generally available to the Company.
Restricted Shares
Unless a participant makes a timely election under Section 83(b) of the Internal Revenue (as described below), a recipient will recognize ordinary income in an amount equal to the excess of the fair market value of the restricted shares on the date of vesting of the Common Shares over the purchase price, if any, paid for the Common Shares. Any further gain or loss from the subsequent sale of such Common Shares will constitute capital gain or loss (long-term or short-term depending on the applicable holding period). If the participant makes a timely election under Section 83(b) at the time of grant, then such recipient is taxed at ordinary income rates on the excess of the fair market value of the restricted shares on the date of grant over the purchase price, if any, paid for the Common Shares, and any further gain or loss on the subsequent sale of the Common Shares constitutes a capital gain or loss (long-term or short-term depending on the applicable holding period). The Company will generally be entitled to a tax deduction at the time the recipient recognizes ordinary income.
Restricted Share Units
The grant of restricted share units will not result in federal income tax liability at the time of grant. The participant will recognize ordinary income in the year the restricted share units are settled by delivery of Common Shares equal to the fair market value of such shares. Upon a subsequent sale or exchange of the Common Shares, any gain or loss recognized in the sale or exchange is treated as a capital gain or loss (long-term or short-term depending on the applicable holding period) for which the Company is not entitled to a deduction.
Dividend Equivalents
Participants will recognize ordinary income for the amount of any dividend equivalent paid to the participant.
Share Awards
If the share award is fully vested at grant, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the Common Shares delivered to the participant over the purchase price (if any) paid for such shares. If the share award is not fully vested at grant please see the section titled “Restricted Shares” above. Upon a subsequent sale or exchange of the Common Shares, any gain or loss recognized in the sale or exchange is treated as
a capital gain or loss (long-term or short-term depending on the applicable holding period) for which the Company is not entitled to a deduction.
Cash Awards
Participants will recognize ordinary income for the amount of the award when the cash award is paid to the participant.
All grants made under the 2018 Plan are designed and intended to either be exempt from or comply with Section 409A of the Internal Revenue Code. If an award is treated as “nonqualified deferred compensation” and the award does not comply with or is not exempt from Section 409A of the Internal Revenue Code, Section 409A may impose additional taxes, interest and penalties on the participant.
New Plan Benefits
The number of awards that will be received by or allocated to employees, non-employee directors, consultants or other personal service providers under the 2018 Plan is discretionary and undeterminable at this time. Information regarding recent practices with respect to annual incentive awards and share-based compensation under existing plans is presented in “Executive Compensation” below.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THIS PROPOSAL.
Proposal 5: Approval of the Signet Jewelers Limited Sharesave Scheme, Includingthe Authorization of the Issuance of Additional Shares Thereunder (Item 5 on the Proxy Card)
The existing Signet Jewelers Limited Sharesave Scheme is set to expire in the upcoming year, and therefore Shareholders are being asked to approve a new Sharesave Scheme (the “UK Scheme”), which was recommended by the Compensation Committee for approval and approved by the Board on March 1, 2018, subject to Shareholder approval.
EXPLANATION
Reservation of Shares
The following summary of the UK Scheme is qualified in its entirety by reference to the full text of the UK Scheme which is set forth in Appendix B. Capitalized terms used in this Proposal 5 which are not otherwise defined are defined in the UK Scheme.
The maximum aggregate number of Common Shares that may be purchased under the UK Scheme (including any “sub-plan”) is 1,000,000. This represents less than 2% of the total number of the Company’s Common Shares issued and outstanding and less than 2% of the voting power of the Common Shares as of April 16, 2018. In establishing the number of Common Shares that may be purchased under the UK Scheme, the Board of Directors considered the potential dilutive impact to shareholders, the projected participation rate over the term of the UK Scheme and equity plan guidelines established by certain proxy advisory firms.
Description of the UK Scheme
The purpose of the UK Scheme is to provide employees of the Company (and any of its nominated subsidiaries) (each of the Company and any such subsidiaries, a “Constituent Company”) with an opportunity to purchase Common Shares of the Company using accumulated savings from payroll deductions. The UK Scheme provides for the grant of Options, and is conditioned upon the employee’s entry into a linked savings arrangement pursuant to which a specified amount is deducted from the employee’s monthly earnings via payroll as savings for the Exercise Price. At the end of the relevant savings period, the employee’s savings may be used to exercise the Option and acquire the relevant number of shares underlying such Option. The UK Scheme thus aims to attract, retain and incentivize employees, offering them a direct interest in the Company’s success. The UK Scheme is intended to meet the requirements of Schedule 3 of the UK Income Tax (Earnings and Pensions) Act 2003 (“Schedule 3”).
Pursuant to the rules of the UK Scheme, Irish-resident employees are able to participate in a “sub-plan,” the rules of which are substantially similar to those of the UK Scheme.
A total of 811 employees in the UK, and 10 employees in Ireland, currently participate in similar schemes operated by the Company or one or more of its subsidiaries.
Eligibility
The UK Scheme is a type of “all-employee” scheme, meaning that, to satisfy the requirements of Schedule 3, all eligible UK-resident employees and full-time directors must be invited to participate. The UK Scheme rules broadly define an “Eligible Employee” as:
any employee of a Constituent Company; or
any director of a Constituent Company who works more than 25 hours per week
and who, in either case, satisfies the minimum qualifying service requirement (which may not exceed five years), as notified by the Board.
As of April 16, 2018, approximately 3,640 employees of Constituent Companies, including four directors of Constituent Companies, would be eligible to participate in the UK Scheme.
Administration
If the Board announces an intention to issue invitations to participate in the UK Scheme, invitations must be issued to all Eligible Employees. Eligible Employees may then apply for the grant of an Option and the entry into a linked savings arrangement for a term of either three or five years.
Eligible Employees must confirm the relevant monthly savings contribution to be deducted via payroll, the minimum amount of which must be between £5 and £10 (or such other minimum amount specified by Her Majesty’s Revenue & Customs (“HMRC”)). HMRC also imposes a limit on the maximum monthly savings contribution to be made by any employee, which is currently set at £500.
Any application from an Eligible Employee is deemed to be for the grant of an Option over the maximum whole number of Company shares that may be acquired at the Exercise Price set out in the invitation out of the expected repayment from the savings arrangements. Although the Board has discretion to determine the Exercise Price, it may not be less than the higher of (i) 80% of the Market Value of the Company shares and (ii) in the case of any Option to be satisfied by the issue of new Company shares, the nominal value of such shares. At the end of the relevant savings period, participants may (subject to the other terms of the UK Scheme) withdraw their savings and apply them to the exercise of their Options. In the event that applications from Eligible Employees would result in the number of Company shares under Option exceeding any specified limit, the UK Scheme includes a procedure for “scaling down” such applications.
Savings arrangements entered into as of a certain date may be eligible for a tax-free “bonus,” which is set with reference to the time at which the savings arrangement is entered into. At present, the HMRC bonus rate is zero.
Options may not be granted more than ten years after the date of the UK Scheme’s approval by shareholders. They are personal to the Eligible Employees to whom they are granted and are not generally transferable or exercisable by anyone other than the Eligible Employee during the Eligible Employee’s lifetime.
Exercise of Options
Options may not generally be exercised before the relevant Bonus Date, which is broadly a period of three or five years (as applicable) following the commencement of the savings arrangements. Options must generally be exercised, in whole or in part, within six months of the Bonus Date and, if not so exercised, will lapse immediately.
In accordance with the UK Scheme rules, early exercise of Options may be permitted in certain circumstances, including the death of the participant prior to the Bonus Date, the termination of the participant’s employment as the result of injury or disability, redundancy, retirement or a transfer of the relevant employer company or relevant part of the business to a person outside the Company or upon the happening of certain corporate events (including a change of control following a general offer to acquire the Company).
Any exercise of Options must be funded exclusively through the linked savings arrangement.
Lapse of Options
Generally, but subject to certain exceptions set out in the UK Scheme rules, Options will lapse on the earliest of:
the expiration of six months after the Bonus Date;
the participant ceasing to be employed by any member, unless such termination is the result of injury or disability, redundancy, retirement or a transfer of the relevant employer company or relevant part of the business to a person outside the Company, or in circumstances where the Option was granted to the participant more than three years prior to such termination, in which case the participant will generally be entitled to exercise his or her Option for a period of six months following the termination;
the expiration of twelve months following the participant’s death, if he or she dies before the Bonus Date, or the expiration of twelve months following the Bonus Date, if the participant dies during the period of six months after the Bonus Date;
the date of any resolution or court order for the compulsory winding-up of the Company;
the date on which the participant becomes bankrupt;
the date on which the participant gives, or is deemed to give, notice that he or she intends to discontinue the monthly savings contributions or the date on which an application is made for the repayment of the aggregate monthly savings contributions; and
the date on which the participant purports to transfer his or her Option.
The UK Scheme rules also make specific provision for the exercise (see above - Exercise of Options), lapse and, in some cases, exchange of Options upon the happening of certain corporate events (including a change of control following a general offer to acquire the Company).
UK Tax Consequences for Participants
The following is a summary of the general UK tax treatment which would be expected to apply in relation to Options granted to UK Scheme participants who are solely resident in the UK for UK tax purposes, and assuming that the UK Scheme satisfies, and continues to satisfy, the relevant Schedule 3 criteria for SAYE (Sharesave) option schemes. The following comments are based on UK laws currently in effect, which remain subject to change.
The grant of an Option should not give rise to any UK tax liability. The exercise of an Option should also not give rise to any UK income tax liability if the date of exercise is at least three years after the grant date. This treatment should also apply where a participant exercises his or her Option within three years of the grant date as a result of death or termination of employment due to injury or disability, redundancy, retirement, TUPE transfer or the participant’s employer company ceasing to be associated with the Company. In the case of certain corporate events, the exercise of Options within three years after the grant date may also be exempt from UK income tax provided the exercise is in accordance with the specific requirements of the applicable legislation (namely, Schedule 3).
If a liability to UK income tax should arise, the participant would be liable to pay tax on the difference between the market value of the Company shares acquired (pursuant to the exercise of the Option) and the Exercise Price.
On any subsequent sale of the underlying Company shares, UK capital gains tax may be payable on the difference between the sale price received by the participant and the Exercise Price.
Irish Tax Consequences for Participants
The following is a summary of the general Irish tax treatment which would be expected to apply in relation to Options granted to UK Scheme participants who are solely resident in Ireland for Irish tax purposes. The following comments are based on Irish laws currently in effect, which remain subject to change.
Provided that the Options are not capable of being exercised after the expiration of seven years from the date of grant, the grant of an Option should not give rise to any Irish tax liability. Irish income tax will arise on the exercise, assignment or release of the Options. In the case of exercise, income tax is chargeable on the difference (the “spread”) between the Exercise Price (plus the price, if any, paid for grant of the Option) and the market value of the shares at the date of exercise of the option.
The “spread” is treated as a benefit which is part of the employee’s employment income taxable under Schedule E of the Irish income tax code. The current income tax rates are the standard rate of 20% and a higher rate of 40% (the marginal rate). Tax on the “spread” will be charged at the marginal rate unless the individual UK Scheme participant applies in writing to the Revenue Commissioners to be taxed at the standard rate of 20%, and the Revenue Commissioners are satisfied that the individual is likely to be chargeable at the standard rate only for the year of assessment. PRSI (currently at 4%) and USC (up to 8%) will also apply.
Income tax is payable within 30 days of the exercise of the right to acquire shares and is outside the PAYE collection system. Accordingly, it is the responsibility of each UK Scheme participant to make the relevant payment of tax and file a return (Form RTSO1) containing details of the amount of the gain (i.e. the spread between the Option Price and the market value of the shares at the date of exercise of the Options). If tax is not paid by the due date, interest at a rate of 0.0219% per day or part of a day is payable from the date payment is due until payment is made.
On any subsequent sale of the underlying Common Shares, Irish capital gains tax (currently at 33%) may be payable on the difference between the sale price received by the participant and the Exercise Price.
New Plan Benefits
Benefits and purchases of the Common Shares under the UK Scheme depends on choices made by employees and the fair market value of the Common Shares on dates in the future. As a result, it is not possible to determine with any certainty the benefits that will be received by eligible executive officers and other employees in the future under the UK Scheme.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THIS PROPOSAL.
Proposal 6: Approval of the Signet Jewelers Limited Employee Share Purchase Plan for U.S. Employees, Includingthe Authorization of the Issuance of Additional Shares Thereunder (Item 6 on the Proxy Card)
The existing Signet Jewelers Limited U.S. Employee Stock Savings Plan is set to expire in the upcoming year, and therefore Shareholders are being asked to approve the Signet Jewelers Limited Employee Share Purchase Plan for U.S. Employees (the “ESPP”), which was recommended by the Compensation Committee for approval and approved by the Board on March 1, 2018, subject to Shareholder approval.
EXPLANATION
The ESPP enables eligible employees of the Company and certain of its subsidiaries to use payroll deductions to purchase Common Shares and thereby acquire an ownership interest in the Company. The ESPP is intended to qualify as an “employee stock purchase plan” meeting the requirements of Section 423 of the United States Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).
The following summary of the ESPP is qualified in its entirety by reference to the full text of the ESPP which is set forth in Appendix C.
Reservation of Shares
The maximum aggregate number of Common Shares that may be purchased under the ESPP is 1,250,000. This represents approximately 2% of the total number of the Company’s Common Shares issued and outstanding and approximately 2% of the voting power of the Common Shares as of April 16, 2018. In establishing the number of Common Shares that may be purchased under the ESPP, the Board of Directors considered the potential dilutive impact to shareholders, the projected participation rate over the term of the ESPP and equity plan guidelines established by certain proxy advisory firms.
Administration
The ESPP is administered by the Compensation Committee or subcommittee thereof, such other committee of the Board of Directors or the Board of Directors as a whole, in each case as determined by the Board of Directors (the “Committee”). The Committee has the authority to construe and interpret the ESPP; to prescribe, amend and rescind rules relating to the ESPPs’ administration; and to take any other actions necessary or desirable for the administration of the ESPP including, without limitation, delegating authority to a third party stock plan administrator for administrative purposes or adopting sub-plans applicable to particular subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Internal Revenue Code. The Committee may correct any defect or supply any omission or reconcile any inconsistency or ambiguity in the ESPP. The decisions of the Committee are final and binding.
Shares Subject to the ESPP
In the event of any corporate event or transaction involving the Company, a subsidiary and/or an affiliate such as a merger, amalgamation, consolidation, reorganization, recapitalization, reclassification, separation, share dividend, extraordinary dividend, share split, reverse share split, split up, spin-off, combination of Common Shares, exchange of Common Shares, dividend in kind, or other like change in capital structure (other than normal cash dividends to shareholders of the Company), in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the ESPP, the Committee will adjust, in a manner it considers appropriate or equitable, the number and kind of shares that may be granted or delivered under the ESPP, the purchase price per share, the number of Common Shares covered by each outstanding option under the ESPP and other share-related calculations.
Eligibility
Participation in the ESPP is limited to employees of the Company and any of its participating subsidiaries who have been continuously employed by the Company or a participating subsidiary for at least six (6) months as of September 1st prior to the beginning of an offering period. The Committee has the discretion to exclude highly compensated employees (within the meaning of Section 414(q) of the Internal Revenue Code) from participation in the ESPP. Under the ESPP, participating subsidiaries include any subsidiary (within the meaning of Section 424(f) of the Internal Revenue Code) of the Company that has been designated by the Committee as eligible to participate in the ESPP.
As of April 16, 2018, approximately 29,190 employees would be eligible to participate in the ESPP, including approximately eight executive officers.
Offering Periods
The ESPP allows eligible employees to purchase Common Shares for twelve-month offering periods, commencing on the first business day of the second payroll period in the month of October of each year. The Committee may change the commencement date, the ending date and the duration of the offering periods (subject to a maximum offering period of 27 months). If the ESPP is not approved by shareholders at the Annual Meeting, the ESPP will be terminated and any accumulated payroll deductions (if any) will be returned to the applicable participants, and no shares will be sold under the ESPP.
Method of Participation
Common Shares will be purchased under the ESPP on the last trading day of each offering period (a “purchase date”) using accumulated payroll deductions, unless the Committee provides otherwise with respect to the employees of a participating subsidiary in a manner consistent with Section 423 of the Internal Revenue Code. In order to participate in the ESPP, an eligible employee must complete and submit to the Company an enrollment election including a payroll deduction authorization in accordance with procedures prescribed by the Committee. Participation in the ESPP is entirely voluntary.
Participation will be effective as of the first day of an offering period. Participants may elect payroll deductions in an amount equal to at least $10.00, but not more than $913.46 of the participant’s total eligible compensation per payroll period within an offering period, up to a maximum of $23,750 per offering period. Eligible compensation includes base salary, wages, overtime and cash incentive compensation. During an offering period, a participant may not change the rate of his or her payroll deductions applicable to that offering period. A participant may decrease (including canceling) or increase his or her rate of payroll deductions for future offering periods by submitting a new enrollment election authorizing the new rate of payroll deductions during the next enrollment period. The deduction rate selected by the participant will remain in effect for subsequent offering periods unless the participant submits a new enrollment election, withdraws from the ESPP or terminates employment or otherwise becomes ineligible to participate in the ESPP.
Grant and Exercise of Option to Purchase
On the first trading day of each offering period, each participant in that offering period will be granted an option to purchase, on the purchase date, a number of Common Shares determined by dividing the participant’s accumulated payroll deductions by the applicable purchase price.
The number of Common Shares which a participant may purchase may be reduced if the offering is over-subscribed or if the total number of Common Shares purchased by all participants in such offering would exceed the total number of Common Shares remaining available under the ESPP. If the Committee determines that, on a particular purchase date, the number of Common Shares with respect to which options are to be exercised exceeds the number of Common Shares then available under the ESPP, the Company shall make a pro rata allocation of the Common Shares remaining available for purchase in as uniform a manner as practicable and as the Committee determines to be equitable.
In addition, no participant will be granted an option under the ESPP if (i) immediately after the grant of the option, such employee (or any other person whose shares would be attributed to such employee pursuant to Section 424(d) of the Internal Revenue Code) would own shares of the Company and/or hold outstanding options to purchase shares, in the aggregate, possessing 5% or more of the total combined voting power or value of all classes of shares of the Company or any subsidiary or (ii) such option would permit his or her rights to purchase shares under all employee share purchase plans (as described in Section 423 of the Internal Revenue Code) of the Company and its subsidiaries to accrue at a rate that exceeds $25,000 of the fair market value of such shares (determined at the time the option is granted) for each calendar year in which such option is outstanding at any time.
Purchase Price
The purchase price per share of the Common Shares applicable to purchases during each offering period under the ESPP will be ninety-five percent (95%) of the fair market value per share on the purchase date, provided that in no event shall it be less than par value.
Withdrawal
A participant may withdraw from any offering by submitting to the Company a revised enrollment election indicating his or her election to withdraw at least 14 days before the end of the offering period. Accumulated payroll deductions held on behalf of the withdrawing participant that have not been used to purchase Common Shares shall be paid to the participant promptly following receipt of the enrollment election indicating his or her election to withdraw and the participant’s option shall be
automatically terminated. If a participant withdraws from an offering period, no payroll deductions will be made during any succeeding offering period, unless the participant re-enrolls.
Termination of Eligibility
Upon the termination of a participant’s employment with the Company or a subsidiary, or in the event the participant otherwise ceases to qualify as an eligible employee, the participant will be deemed to have withdrawn from the ESPP and any accumulated payroll deductions that have not been used to purchase Common Shares shall be returned to the participant and the participant’s option shall be automatically terminated.
Shareholder Rights
No participant will have any shareholder rights with respect to the Common Shares covered by his or her option until the shares purchased on the participant’s behalf are actually transferred to the participant’s account.
Transferability
Payroll deductions credited to a participant, rights with respect to the exercise of an option, or any rights to receive Common Shares under the ESPP may not be assigned, transferred, pledged or otherwise disposed of in any way by the participant, other than by will, the laws of descent and distribution and in accordance with a designation of a beneficiary provided by the participant prior to the participant’s death.
Amendment and Termination of the ESPP
The Committee may, in its sole discretion, amend, suspend or terminate the ESPP at any time and for any reason. If the ESPP is terminated, the Committee may elect to terminate all outstanding offering periods either immediately or once Common Shares have been purchased on the next purchase date (which may, in the discretion of the Committee, be accelerated). If the ESPP is terminated, immediately following the termination of the offering period or the final purchase date, as applicable, all amounts that have not been used to purchase Common Shares will be returned to participants.
Effective Date
The ESPP became effective upon adoption by the Board of Directors on March 1, 2018, subject to shareholder approval at the first annual meeting following adoption by the Board.
Change of Control
In the event of a “change of control” as defined in the ESPP, the Committee shall have the power and discretion to (i) continue the offering period in effect on the date of such change of control, (ii) shorten the offering period then in progress by setting a new purchase date which shall be before the date of the Company’s proposed change of control, (iii) substitute Common Shares available under the ESPP with common stock of the surviving company or its parent, or (iv) terminate the ESPP and return any payroll deductions that have not been used to purchase Common Shares to the participants.
U.S. Federal Income Tax Consequences Relating to the ESPP
The following is a summary of certain material U.S. federal income tax consequences in effect today associated with the grant and exercise of purchase rights under the ESPP under current federal tax laws and certain other tax considerations associated with purchase rights under the ESPP. The summary does not address tax rates or non-U.S., state or local tax consequences, nor does it address employment tax or other federal tax consequences except as noted.
The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. In general, an employee will not recognize U.S. taxable income until the sale or other disposition of Common Shares purchased under the ESPP (the “ESPP Shares”). Upon such sale or disposition, the employee will generally be subject to tax in an amount that depends on the employee’s holding period with respect to the ESPP Shares.
If the ESPP Shares are sold or disposed of more than one year from the date of purchase and more than two years after the first day of the offering period in which they were purchased, or upon the employee’s death while owning the ESPP Shares, the employee will recognize ordinary income in an amount generally equal to the lesser of: (i) an amount equal to the excess of the fair market value of the ESPP Shares on the first day of the offering period over the purchase price, and (ii) the excess of the sale price of the ESPP Shares over the purchase price. Any additional gain will be treated as long-term capital gain. If the ESPP Shares held for the periods described above are sold and the sale price is less than the purchase price, then the employee will recognize a long-term capital loss in an amount equal to the excess of the purchase price over the sale price of the ESPP Shares.
If the ESPP Shares are sold or otherwise disposed of before the expiration of the holding periods described above, other than following the employee’s death while owning the ESPP Shares, the employee generally will recognize as ordinary income an amount equal to the excess of the fair market value of the ESPP Shares on the date the ESPP Shares were purchased over the sale price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on the employee’s holding period with respect to the ESPP Shares.
The Company is not entitled to a U.S. corporate income tax deduction for amounts taxed as ordinary income or capital gain to an employee except to the extent of ordinary income recognized upon a sale or disposition of ESPP Shares prior to the expiration of the holding periods described above.
New Plan Benefits
Benefits and purchases of the Common Shares under the ESPP depends on elections made by employees and the fair market value of the Common Shares on dates in the future. As a result, it is not possible to determine the benefits that will be received by eligible executive officers and other employees in the future under the ESPP.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THIS PROPOSAL.
Equity Compensation Plan Information
The following table sets forth certain information, as of February 3, 2018, concerning Common Shares authorized for issuance under all of the Company’s equity compensation plans.
|
| | | | | | | |
| 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 |
|
| |
(1)
| Shares indicated include vesting of all future performance conditions being achieved at maximum levels. |
| |
(2)
| Calculated at an exchange rate of £1:$1.41. |
| |
(3)
| The shares remaining available in column (c) are from the 2009 Omnibus Incentive Plan. |
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.
SEPARATE AND INDEPENDENT CHAIRMANSeparate and Independent Chairman
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.
Thetime and established the following division of responsibilities between the Chairman and the CEO has been specifically determined by the Board.CEO:
CHAIRMAN
In summary, theThe Chairman is responsible for:
effectiveEffectively running of the Board, including working with the Nominationan ongoing evaluation of its performance and Corporate Governance Committee to evaluate the performancethat of the Board, its committees and individual Directors and the Board’s compliance with corporate governance requirements and best practices;
consultingConsulting with and advising executive management about planned presentations to the Board, involving but not limited to, topics of longer termlonger-term strategy, medium-term plans, annual budgeting or, at histhe Chairman’s discretion, any other significant matters;
consultingConsulting with and advising the CEO on contemplated executive management personnel selections, organizational alignment and responsibilities, and compensation recommendations;
keepingKeeping the other independent Directors appropriately informed of developments within the business and Shareholders’shareholders’ attitudes toward the Company; and
safeguardingSafeguarding Signet’s reputation and representing it both internally and externally.
CHIEF EXECUTIVE OFFICER
In summary, theThe CEO is responsible for:
providingProviding the executive leadership of the business;
developingDeveloping and presenting to the Board strategy, medium-term plans and annual budgets, and within this framework, the performance of the business;
complyingComplying with legal and corporate governance requirements, together with the social, ethical and environmental principles of Signet; and
makingMaking recommendations on the appointment and compensation of senior executive officers, and management development and succession planning.
EXECUTIVE SESSIONS OF INDEPENDENT DIRECTORSExecutive Sessions of Independent Directors
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.
INDEPENDENT DIRECTORS CONSTITUTE A MAJORITY OF THE BOARDBoard
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.
BOARD DIVERSITY POLICYBoard Diversity Policy
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
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.
DIRECTOR TENURE POLICYDirector Tenure Policy
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.
BOARD EVALUATIONBoard Evaluation
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.
DIRECTOR ATTENDANCE AT THE ANNUAL MEETING OF SHAREHOLDERSDirector Attendance at the Annual Meeting of Shareholders
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.
MEETINGS AND ATTENDANCE DURING FISCAL 2018Meetings and Attendance DuringFiscal 2020
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.
COMMUNICATION WITH DIRECTORSCommunication with Directors and Director Nominations
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.
TRANSACTIONS WITH RELATED PERSONSA shareholder who wishes to recommend an individual to the Nomination and Corporate Governance Committee for its consideration as a nominee for election to the Board may do so in writing also to the Corporate Secretary, c/o Signet Jewelers, 375 Ghent Road, Akron, Ohio, 44333 U.S.A. The Nomination and Corporate Governance Committee will evaluate shareholder recommendations for candidates to the Board in the same manner as candidates suggested by other Directors or search firms.
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
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
31The Company acquired R2Net Inc., the parent company of online diamond and bridal jewelry retailer, James Allen, in 2017. Roy Brinker, the brother-in-law of Oded Edelman, our Chief Digital Innovation Advisor and President - JamesAllen.com, owns D&L Trading Limited, which provided services to Segoma Ltd., a subsidiary of R2Net Inc., including management of Segoma’s photography center in Hong Kong and rough diamond distribution services to the Company’s polishing factories. In Fiscal 2020, the Company paid approximately $404,362 to D&L Trading Limited.
Family Relationships
CORPORATE SOCIAL RESPONSIBILITYRoie Edelman, the brother of Oded Edelman, serves as the Chief Diamond Officer of R2Net Israel Ltd., a subsidiary of R2Net Inc. In Fiscal 2020, Mr. R. Edelman’s total compensation was $220,000.
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 Company lives its mission every day through the jewelry it sells as it helps customers Celebrate Life and Express Love® and firmly believes that CSR makes the business stronger and more sustainable over the long-term. To emphasize the importance of CSR, Signet has included highlights of its CSR goals and achievements in its Annual Report on Form 10-K.Report. More details can also be found in Signet’s 20172019 CSR Report,Update, which will be made available at http://www.signetjewelers.com/corporate-responsibility/CSR-Report-2017.
RISK MANAGEMENT AND ROLE OF THE BOARD IN RISK OVERSIGHTwww.corporatereport.com/signet/2019/csr/.
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.
The Risk Committee, which is chaired by the CLTO, has a written charter approved by the Board; its members include the CEO, Chief Financial Officer, President & Chief Customer Officer, Chief Human Resources Officer, Chief Information Officer, Chief Communications Officer, Chief Digital Innovation Advisor, General Counsel & Executive Vice President Compliance, Risk & Loss Prevention, UK Executive Director, UK Finance Director, Senior Director Enterprise Risk Management & SOX, Manager Enterprise Risk Management & SOX, and UK Manager of Internal Audit & SOX.
The Risk Committee meets at least two times a year and reviews Signet’s risk management processes, consolidated principal risks identified by the Company, and emerging issues and new regulations. The CLTO and ChairRole of the Audit Committee meet periodically to discuss key matters arising from Signet’s risk management process and as appropriate, theBoard in Risk Committee submits reports to the Board. The Risk Committee has a written charter and requires participation by executive management teams. A U.K. sub-committee has also been established, chaired by the President & Chief Customer Officer. The Senior Director Enterprise Risk Management & SOX attends all sub-committee meetings to provide a consistent approach and additional review.Oversight
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.
COMPENSATION POLICIES AND RISK TAKINGThe identification of major business risks is carried out in conjunction with operational management, and the Board provides oversight regarding the steps taken to monitor and mitigate risks. The CLSO coordinates the collection of risk management information and is responsible for assessing the Company’s day-to-day risk management processes and internal control structure, seeking to ensure
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
program, and it regularly benchmarks executive compensation against a carefully constructed and regularly reviewed peer group.
CORPORATE GOVERNANCE GUIDELINES AND CODE OF CONDUCT AND ETHICSCorporate 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.
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| | | | |
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 | ● | | | |
Marianne Miller Parrs | C | | | ● |
Thomas Plaskett | | C | ● | |
Nancy A. Reardon |
| ●C | | |
Jonathan SokoloffSeiffer(1) | | ● | ● | |
Brian Tilzer | | | ● | ● |
Eugenia Ulasewicz | | ● | | C |
Russell Walls(1)
| ● | | | |
(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.
AUDIT COMMITTEEAudit Committee
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.
Allmatters, and all of the members of the Audit Committee have significant financial experience as a result of senior executive positions held in other companies. The Audit Committee met ten times in Fiscal 2018.
The Board has determined that all members of the Audit Committee are financially literate, and that each of Ms. Parrs and Ms. McCollam is an “audit committee financial expert” within the meaning of SEC regulations.
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:
reviewingReviewing the Company’s financial statements, related audit findings and earnings releases and accounting principles and policies;
recommendingRecommending for appointment or termination by Shareholders ofshareholders the Company’s independent registered public accounting firm;firm and providing oversight of such firm; reviewing the quality-control procedures, independence, performance and performancecompensation of such firm; and evaluating itsfirm, as well as the proposed audit scope and fee arrangements;of the audit;
approvingApproving in advance all audit and non-audit services to be rendered by the independent registered public accounting firm;
providingProviding oversight of the Company’s systems of internal control over financial reporting, disclosure controls and procedures and risk management;
reviewingReviewing the effectiveness of the Company’s internal auditors and Disclosure Control Committee;
establishingOverseeing procedures for complaints regarding accounting, internal accounting controls, auditing or other matters;
Overseeing the Company’s cybersecurity protocols; and
reviewingReviewing and approving related person transactions.transactions in accordance with the Company’s Related Party Transaction Policy.
COMPENSATION COMMITTEEThe Audit Committee receives regular updates on internal audit activity throughout the year and reviews reports submitted to the Company by the Company’s independent registered public accounting firm, as well as annual management assurance updates submitted to the Audit Committee by the Risk Committee. The Audit Committee maintains direct communication with representatives of the independent registered public accounting firm, who ordinarily attend meetings by invitation (except in relation to the firm’s and its representatives’ own appointment and assessment of independence). The Chairman, CEO, Chief Financial Officer and others also attend meetings of the Audit Committee by invitation, and the Audit Committee meets at least once a year with both the independent registered public accounting firm and internal auditors without executive management present.
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:
approvingApproving the overall compensation philosophy;
approvingApproving annual and long-term performance targets for executive officers;
inIn consultation with the Chairman, evaluating the performance of the CEO and, in consultation with the CEO, evaluating the performance of the other executive officers reporting to the CEO against corporate goals and objectives, and determining the total compensation earned by each person;
recommendingRecommending to the Board for approval all termination protectionseverance and other agreements other agreementswith executives and material employee benefit plans, including retirement and incentive compensation plans;
approvingApproving any share-based compensation awarded to employees of the Company; and
appointing,Appointing, compensating and assessing the work of any compensation consultant, independent legal counsel or other advisor retained by the Compensation Committee.
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.
The Compensation Committee met seven times in Fiscal 2018.
The Compensation Committee has retained the services of an independent compensation consultant, Meridian Compensation Partners (“Meridian”). to advise on compensation matters in Fiscal 2020. Meridian providesprovided services to the Compensation Committee in connection with its review of executive and independent Director compensation practices, including the competitiveness of executive and Director pay levels, executive incentive design issues, market trends in executive and Director compensation and technical considerations. Meridian’s services to the Company arewere limited to advising the Compensation Committee on executive and Director compensation; Meridian doeshas done no other work for the Company. The Compensation Committee reviews and evaluates the independence of its consultant each year and has the final authority to hire and terminate the consultant. In considering Meridian’s independence, numerous factors were reviewed relating to Meridian and the individuals employed by Meridian who provided services to the Company, including those factors required to be considered pursuant to SEC and NYSE rules. Based on a review of these factors, the Compensation Committee has determined that Meridian is independent and that its engagement hasdid not raisedraise any conflict of interest. After an extensive RFP process that was initiated after the Compensation Committee’s August 2018 meeting, the Committee retained Semler Brossy ("Semler") to replace Meridian as its independent compensation consultant, effective in June 2019, to advise on compensation matters going forward. The Compensation Committee also considered the independence factors listed above with respect to Semler and has determined that Semler is independent and that its engagement does not raise any conflict of interest.
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.
NOMINATION AND CORPORATE GOVERNANCE COMMITTEEoverall corporate governance.
The Nomination and Corporate Governance Committee’s responsibilities include:
assistingAssisting the Board in the selection and nomination of Directors and senior management;Directors;
reviewingReviewing the composition and balance of the Board and its Committees,
CEO, Chairman and Board succession planning, as well as Board and senior management succession;oversight of succession planning for other executive officers;
coordinatingCoordinating and overseeing the annual evaluation of the Board and its committees and management;Committees; and
assistingAssisting the Board in the consideration and development of appropriate corporate governance guidelines and other matters of corporate governance.
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.
A Shareholder who wishes to recommend an individual to the Nomination and Corporate Governance Committee for its consideration as a nominee for election to the Board may do so in writing to the Chief Governance Officer & Corporate Secretary, c/o Signet Group Services Limited, Imperial Place 3, Maxwell Road, Borehamwood, Hertfordshire, WD6 1JN, United Kingdom. The Nomination and Corporate Governance Committee will evaluate Shareholder recommendations for candidates to the Board in the same manner as candidates suggested by other Directors or search firms.
As more fully described in the Company’s Bye-laws, a Shareholder desiring to propose a person for election as a Director must include in a 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.
The Nomination and Corporate Governance Committee met sixfour times in Fiscal 2018.2020.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEECorporate Social Responsibility Committee
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:
definingDefining the Company’s corporate and social obligations as a responsible citizen and overseeing conduct in the context of those obligations and overseeing the creation of appropriate policies and supporting measures;
monitoring
Monitoring the Company’s engagement with external stakeholders and other interested parties;parties regarding CSR initiatives and programs;
monitoringMonitoring the Company’s overall approach to corporate responsibility and ensuring it is in linealignment with the overall business strategy;
ensuring thatOverseeing the Company hasimplementation and effectiveness of appropriate policies and systems in place relating to community relations, human rights and responsible supply chain management;
monitoringMonitoring the implementation of appropriate policies and initiatives with respect to energy management, climate change, carbon footprint, waste management and sustainable sourcing; and
monitoringMonitoring community support programs and ensuring appropriate corporate giving policies are adopted.adopted;
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)
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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.
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| Fiscal 2020 (millions) |
| Fiscal 2019 (millions) |
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Audit Fees | $ | 4.1 |
| $ | 4.0 |
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Audit-Related Fees(1) | $ | — |
| $ | 0.1 |
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Tax Fees(2) | $ | 0.2 |
| $ | 0.3 |
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All Other Fees | $ | — |
| $ | — |
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Total Fees | $ | 4.3 |
| $ | 4.4 |
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(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. |
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(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.
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:
theThe quality and efficiency of KPMG’s historical and recent performance on the Company’s audit;
KPMG’s capability and expertise;
theThe quality and candor of communications and discussions with KPMG;
theThe ability of KPMG to remain independent;
externalExternal data relating to audit quality and performance (including recent PCAOB reports on KPMG and its peer firms);
and theThe appropriateness of fees charged; and
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
Marianne Miller ParrsSharon L. McCollam (Chair)
R. Mark Graf
Helen McCluskey
Russell Walls
THE INFORMATION CONTAINED IN THE FOREGOING REPORT SHALL NOT BE DEEMED TO BE “SOLICITING MATERIAL” OR TO BE “FILED” WITH THE SEC, NOR SHALL THE INFORMATION BE INCORPORATED BY REFERENCE INTO ANY FUTURE FILING UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES IT BY REFERENCE IN A FILING.
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.
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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 |
(1) Mr. Becker and Mr. Murray are leaving the Company effective May 5, 2018; Mr. Jenkins is leaving the Company effective June 30, 2018.
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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.”
Michele Santana, 47,Joan M. Hilson, 60, joined Signet in March 2019 and became Chief Financial Officer in April 2019. Ms. Hilson brings over 30 years of Signetexperience in August 2014, having previously been Senior Vice Presidentretail corporate finance leadership positions, with extensive experience in business planning, merchandise planning, inventory management, and Financial Controller since October 2010. Prior tocost optimization. Before joining Signet, Ms. SantanaHilson was DirectorEVP, Chief Financial and Operating Officer of Internal AuditDavid’s Bridal, Inc. from March 2014 to February 2019. Prior to that she was the Chief Financial Officer of American Eagle Outfitters and held several roles within Limited Brands, including Chief Financial Officer of the Victoria’s Secret stores division. Earlier in her career, Ms. Hilson also worked at Cliffs Natural ResourcesSterling Jewelers Inc. and also held key leadership positions at KPMG LLP. Ms. Santana is a certified public accountant.Coopers & Lybrand.
Steven Becker, 61, joined the Sterling Jewelers Division in 2005 as Senior Vice President, Human Resources and was promoted to Chief Human Resources Officer for Signet in May 2014. Prior to joining Signet, Mr. Becker held other senior Human Resources positions, most recently at OfficeMax.
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.
Sebastian Hobbs, 48,Mary Elizabeth Finn, 59, was promoted to President &became Chief CustomerPeople Officer in May 2018. From January 2017 having previously been Managing Director, UK Division since July 2013.to May 2018 Ms. Finn served as Chair of Finn Advisory Services, LLC, a consulting firm which she founded. Previously, Ms. Finn was Chief Human Resources Officer of Nielsen from 2013 to 2016 and provided human resources leadership during two major successful transitions: the company’s initial public offering and chief executive officer succession. Prior to this, Mr. Hobbs was Commercial Director, UK DivisionNielsen, she spent 26 years at General Electric and has significant experience empowering employees during business transformation, developing leaders, providing effective training and development opportunities and building diverse, inclusive, and successful teams throughout her career.
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.
Mark Jenkins, 60, has been Corporate Secretary since 2004 and Chief Governance Officer since December 2014. He was Chief Legal Officer from September 2012 until December 2014. Previously, he was Director and Company Secretary at COLT Telecom Group plc and Group Company Secretary at Peek plc.17 years before that. He is a barrister.member of the Purdue University Advisory Council and a board member for Healing the Culture, a non-profit organization.
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.
George Murray, 62,Jamie L. Singleton, 58, became Chief Retail Insights & Strategy OfficerSignet’s President of Kay, Zales and Peoples in JanuaryMarch 2019, following her service as Executive Vice President of Zales and Peoples Jewelers from June 2017 havingto March 2019. Ms. Singleton previously been Chief Merchandising & Marketing Officer since July 2015 and President, Zale Division between July 2014 and July 2015. Prior to this, Mr. Murray served as Senior Vice President, General Manager of Marketing, AdvertisingPiercing Pagoda for Zale Corp., and Public Relations forlater Signet, from April 2012 to June 2017, where she achieved significant revenue and profit growth by stabilizing the Sterling Jewelers Divisionbanner. Signet completed the acquisition of Zale Corp. in May 2014. Prior to joining Zale Corp. she was a Senior Vice President at CPI and held a number of managementDavid’s Bridal Group after having served in various senior merchandising, sourcing and product development positions since joining the Sterling Jewelers Division in 1992.at other retail companies.
Carol Schumacher, 61,Rebecca S. Wooters, 49, joinedbecame Signet’s Chief Digital Officer in April 2020. She has over 25 years of experience across digital strategy and transformation, customer experience, operations, market and product development. Prior to joining Signet, in February 2018she spent over 12 years with Citi, most recently as Chief Communications Officer. Her priorCustomer Experience Officer and Head of Digital Experience for Citi’s Card division since November 2013 and the Global Consumer Bank since April 2018, where she was responsible for customer experience includes corporate officer positionsand the evolution of digital servicing, digital channels, and the emerging space of voice, bot and digital messaging. Prior to Citi, Ms. Wooters served in communications, investor relationsinnovation, strategic and corporate affairs with Walmart, Home Depotmarketing roles of increasing responsibility at Experian Decision Analytics, from 2005 to 2008, and Intercontinental Exchange.MBNA, from 1994 to 2009.
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)
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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.
Executive Compensation
Table of Contents
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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.
EXECUTIVE TRANSITIONS
On July 13, 2017, Mark Light retired from the Board and his position as CEO, effective as of July 31, 2017. The Board appointed Virginia C. Drosos, a member of the Board, as the CEO effective August 1, 2017. Oded Edelman became Chief Digital Innovation Advisor of the Company upon the completion of Signet’s acquisition of R2Net Inc. on September 12, 2017.
Our NEOs for Fiscal 2018 included:
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NEO | Position |
Virginia C. Drosos | Chief Executive Officer |
Michele SantanaJoan M. Hilson | Chief Financial Officer |
Oded EdelmanJ. Lynn Dennison | President of JamesAllen.com and Chief Digital Innovation Advisor
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George Murray | Chief Retail InsightsLegal & Strategy Officer and Corporate Secretary
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Mary Elizabeth Finn | Chief People Officer |
Jamie L. Singleton | President - Kay, Zales and Peoples |
Michele Santana | Former Chief Financial Officer(1) |
Sebastian Hobbs | President & Chief Customer Officer
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Mark Light | Former Chief Executive Officer |
(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.
EXECUTIVE SUMMARY
The Compensation Committee considers Signet’s business results, among other factors, when evaluatinghas taken certain measures to mitigate the executive compensation program and incentive payouts. Signet’s performance results are summarized below andfinancial impact of the pandemic on the following pages.
The Company’s performance directly impactedCompany. While the Company has not reduced the compensation paidearned by the NEOs during Fiscal 2020, which is the subject of this CDA and the Executive Compensation Tables, since such compensation was earned prior to the NEOs in Fiscal 2018. The past year in the retail industry saw considerable pressure driven by macroeconomic factors and changing dynamics in consumer discretionary spending. In addition, as previously disclosed, the Company experienced execution issues with the dispositionCOVID-19 pandemic, it has deferred payout of the first phase of its credit program and other operational issues. The Company did not meet the performance goals it set, and no payments were made under the Company’s annual incentive plan. In addition, performance-based restricted share units granted in Fiscal 2016 did not vest because the applicable performance criteria were not satisfied. More information with respect to recent performance and these elements of Signet’s compensation program is provided below.
Fiscal 2020 Short Term Incentive Plan bonus and has taken measures to adjust Fiscal 2021 compensation as described under “Modifications to Compensation Programs in Response to the COVID-19 Pandemic” included in this CDA.
Compensation Philosophy
COMPENSATION PHILOSOPHY
Signet’sOur executive compensation philosophy is to provide an attractive, competitive and market-based total compensation program tied to performance and aligned with our shareholders and our endeavor to drive long-term growth and value creation. Our objective is designed to attract,recruit, retain, incentivize and retainreward the quality of executive talent neededofficers necessary to achieve the Company’s business vision:deliver sustained high performance to be the world’s premier jeweler by relentlessly connecting with customers, earning their trust with every interaction everywhere.
Signet must employ, motivateour shareholders and retain superior management to accomplish corporate goals. Therefore, total compensation is targeted at approximately the median of a custom group of comparator companies. Those companies have been chosen to reflect various attributes similar to Signet and also because they may attempt to attract Signet executives if compensation is not competitive. Executives are paid in a range around the median that is dependent upon, among other things, the executive’s experience, internal equity considerations and proven ability to consistently deliver superior performance.
The total aggregate compensation at target performance for the NEOs in Fiscal 2018 fell below the comparator company median.
The principles underlying Signet’scustomers. Our executive compensation decisionspractices reinforce our goals and expectations to reward the significant contributions that our executives are as follows:making in our transformational Path to Brilliance journey using the following compensation principles.
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1.Principle | The compensation program must align theDesign |
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 those of Shareholders. This is achieved by delivering ashareholders. | A significant portion of total compensation for executives as incentives dependent on factors that should reflect long-term growth in Shareholder value. |
| is delivered through equity-based compensation. |
2.Deliver a majority of NEO compensation that is at risk based on performance. | WithShort Term Incentive Plan (“STIP”) and Long Term Incentive Plan (“LTIP”) awards are variable and at-risk and tied to performance of the exception of new-hire awards that might include guaranteed amounts, the only element of guaranteed pay is base salary.Company. The percentage of at-risk compensation increases in line with the responsibility, experience and experiencedirect influence over the Company’s performance. The only element of each executive. |
| fixed pay is base salary. |
3. | Elements of compensation that are at risk should rewardReward annual and multi-year exceptional performance. |
performance through performance-based compensation elements. | Executives participate in both STIP (annual) and LTIP (three-year) incentives with robust performance goals. |
4.Align NEO incentives with key organizational goals and metrics. | Compensation shouldThe STIP and LTIP include a retention componentperformance goals tied to encourage high performing executives to remain withtop and bottom line growth, as well as the Company. |
| efficient use of capital. |
5. | The compensation program should be constructed so that the NEOs understand and are motivated to achieve the performance required to receive various levels of payments. |
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6. | The compensation program should encourageRequire all executive officers to build a substantial holding of the Company’s shares. | All NEOs are subject to share ownership guidelines. |
CONSIDERATION OF “SAY-ON-PAY” VOTE
In June 2017, the Company’s Say-on-Pay proposal passed with 98.1% of the Shareholder advisory votes in favor of the Company’s executive compensation program. Compensation Overview, Objectives and Key Features
The Compensation Committee concludedhas established an executive compensation program that Shareholders were supportivecontains the following key components:
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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.
TARGET NEO PAY MIXfinancial performance.
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
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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)
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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:
ROLE OF THE COMPENSATION COMMITTEE
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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
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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
of the organization, and other conditions throughout Signet. The Compensation Committee also ensures that Signet’sour executive compensation program remains competitive, as discussed above.
ROLE OF COMPENSATION CONSULTANTS
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.
ROLE OF EXECUTIVESRole of Executives
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.
COMPETITIVE BENCHMARKING ANALYSISCompetitive Benchmarking Analysis
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;
Headquarters in North America and traded on a North American stock exchange; and
Median salesRevenue approximating those of Signet’s; and
RevenueSignet’s, generally ranging from half to twice the Company’s revenue.
TheFor Fiscal 20182020, the Committee approved the group consistedconsisting of the following 1516 companies, which are the same companies used for Fiscal 2017:2019:
|
| | | |
Abercrombie & Fitch Co. | L Brands,Foot Locker, Inc. | TapestryPVH Corp. | Ulta Beauty Inc. |
American Eagle Outfitters, Inc. | Michael Kors Holdings Ltd.Hudson’s Bay Company | Tiffany & Co. |
Dick’s Sporting Goods Inc.
| Nordstrom Inc.Ralph Lauren Corporation | Urban Outfitters Inc. |
Foot Locker,Capri Holdings Limited | L Brands, Inc. | PVH Corp.Tapestry Inc. | V.F. Corporation |
Hudson’s Bay Company Dick’s Sporting Goods Inc. | Ralph Lauren CorporationNordstrom Inc. | 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.
DETERMINING EXECUTIVE COMPENSATION
The Compensation Committee’s objective is to deliver and maintain competitive executive compensation in accordance with its compensation principles.
The Compensation Committee believes that the greater the responsibility and direct influence over the Company’s performance an executive officer has, the more his or her total compensation should be weighted toward incentive payments. The Compensation
Committee considers the annual compensation benchmarking data described earlier, along with other factors such as an executive officer’s leveltenure, criticality of experience,the role, performance and other components of the Company’s desire to retain the executive, the availabilitycompensation philosophy.
Elements of replacement personnel, as well as the individual’s responsibilities and actual performance when setting target compensation levels.NEO Compensation
The Compensation Committee also 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.
At the beginning of each fiscal year, the CEO recommends total compensation levels (including salary, target bonus and target long-term incentive value) for the NEOs, other than for herself. The Compensation Committee considers these recommendations and determines final compensation levels for the NEOs as well as the CEO based on the factors described above.
COMPENSATION OVERVIEW, OBJECTIVES AND KEY FEATURES
The Compensation Committee has established an executive compensation program that contains the following key components:
|
| | |
Component | Objective | Key Features |
Base salary | Provide a fixed level of pay that is not at risk and reflects individual experience and ongoing contribution and performance. | Designed to retain key executive officers by being competitive but is not considered to be the primary means of incentivizing or recognizing performance. |
Annual bonus | Motivate and reward achievement of annual financial results against established annual goals of the Company. | Cash payments are dependent on the degree of achievement against annual performance targets. This element is payable just after the end of the fiscal year in which it was earned. |
Long-term incentives (time-based restricted shares and performance-based restricted share units) | Align management with long-term Shareholder interests; retain executive officers; motivate and reward achievement of sustainable earnings growth and returns. | 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. |
An additional component of the compensation program is the benefits package, which includes a deferred compensation plan, retirement benefits and health and life insurance. The objective of the benefit package is to retain executive officers over the course of their careers.
ELEMENTS OF NEO COMPENSATION
(a) Base Salary
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.
BaseThe maximum amount of base salaries of the NEOs during Fiscal 20182020 and Fiscal 20172019 are listed in the table below. None of the NEOs who were employed by the Company in Fiscal 20172019 received an increase in base salary for Fiscal 2018, with the exception of Mr. Hobbs, who2020, except for Jamie Singleton, whose salary was promotedincreased in March 2019 to his current position of President & Chief Customer Officer in January 2017.reflect increased responsibilities.
| | NEO | Fiscal 2018 Salary(1) |
| Fiscal 2017 Salary |
| Fiscal 2020 Salary(1) |
| Fiscal 2019 Salary |
|
Virginia C. Drosos(2) | $ | 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.
(2) Ms. Drosos was appointed CEO in August 2017, and Mr. Edelman was appointed Chief Digital Innovation Advisor in September 2017.
(3) Mr. Hobbs’ Fiscal 2017 salary was paid in pounds. The amount reported above is calculated at an exchange rate of £1:$1.26, the exchange rate asIn light of the last business daycurrent economic situation as a result of the COVID-19 pandemic, the Company has taken action to reduce salaries of members of senior management during Fiscal 2017.2021, as more fully described under “Modifications to Compensation Programs in Response to the COVID-19 Pandemic” included in this CDA.
(b) Annual Bonus (STIP)under the Short-Term Incentive Plan (“STIP”)
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
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
In setting the performance criteria forSimilar to Fiscal 2018,2019, the Compensation Committee agreeddetermined that the corporate-wide Fiscal 2020 STIP performance targets would be based solely on adjusted operating income (“Adjusted STIP Operating Income”) to focus on driving profit. In prior years, the Company had focused on both Adjusted STIP Operating Income(60% weighting) and comparable store sales. The Compensation Committee decided to shift the focus to Adjusted STIP Operating Income exclusively for Fiscal 2018 given the financial challenges faced by the Company as well as the industry as a whole.Same Store Sales (40% weighting). The Committee will resumebelieves that using comparable store sales in Fiscal 2019, as will be discussed further in next year’s proxy. Adjustedthese measures drives both top and bottom line growth, consistent with the Company’s Path to Brilliance plan. STIP Operating Income is a non-GAAP measure, calculated as operating income, adjusted to reflect results at constant currency and for the impact of (i) noncash goodwill and intangible impairment charges, (ii) restructuring charges and (iii) charges related to shareholder settlement. For all NEOs, other than Ms. Singleton, the acquisitionSTIP performance targets are based 100% on the achievement of R2Net Inc.corporate-wide performance targets, as noted above. As a divisional president, Ms. Singleton’s STIP award opportunity is based 50% on the corporate-wide performance targets noted above and 50% on banner specific performance targets for Kay and Zales/Peoples, using the dispositionsame weighting between STIP Operating Income and Same Store Sales for each banner. The Committee incorporated the banner-specific metrics into Ms. Singleton’s STIP award opportunity to incentive sales growth and profitability at the banners and harmonize such banners’ financial goals with those of the first phase of the Company’s credit program.Signet as a whole.
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 | % | |
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.
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.
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.