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Narrative
Disclosuredisclosure to
Director Compensation Tabledirector compensation table
Pursuant to our
Non-Employee Director Compensation Policy,non-employee director compensation policy, each non-employee
Directordirector will receive a cash retainer for service on the
Board of Directorsboard and for service on each committee on which the
Directordirector is a member in the following amounts:
| | | | Annual Retainerretainer
($) |
Board of Directors: | |
Non-Executive Chair | $ | 150,000 | |
All Non-Employee Directorsnon-employee directors | | | 95,000 | |
Additional retainer for Lead Directorlead director | | 30,000 | 50,000 |
Audit Committee:committee | | | |
| Chair | | | 30,000 | |
Members (other than the Chair)chair) | | | 12,500 | |
Compensation Committee:committee | | | |
| Chair | | | 25,000 | |
Members (other than the Chair)chair) | | | 10,000 | |
Nominating and Corporate Governance Committee:corporate governance committee | | | |
| Chair | | | 18,000 | |
Members (other than the Chair)chair) | | | 8,000 | |
The annual retainers are earned on a quarterly basis based on a calendar quarter and are paid by the
Companycompany in arrears not later than the fifteenth day following the end of each calendar quarter. In the event a
Non-Employee Directornon-employee director does not serve as a
Directordirector or in the applicable committee or board positions for an entire calendar quarter, such
Directordirector will receive a
proratedpro-rated portion of the applicable retainers otherwise payable to such
Directordirector for such calendar quarter. We also reimburse our
Non-Employee Directornon-employee director for any travel or other business expenses related to their service as a
Director.director.
In addition to the annual cash retainers, each
Non-Employee Directornon-employee director receives an annual restricted stock unit grant with a fair market value on the date of grant of $150,000 per year, which is made pursuant to the BJ’s Wholesale Club Holdings, Inc. 2018 Incentive Award Plan (the “2018 Plan”). The annual equity award will be granted on the date of the
Annual Meetingannual meeting of
Shareholdersshareholders or on the date of such
Director’sdirector’s election or appointment to the
Board of Directors,board, which awards will also be prorated if a
Directordirector is elected or appointed as of a date other than the date of the
Annual Meetingannual meeting of
Shareholders. Each Director may elect to defer the annual restricted stock unit grant, subject to compliance with Section 409A of the Code, and the Board of Directors may determine, in its sole discretion, that such annual equity grant be in the form of deferred stock or in shares of common stock with equivalent value on the date of grant.shareholders. Each equity award will vest and become exercisable on the earlier of (i) the day immediately preceding the date
Annual Meeting of
Shareholdersthe first annual meeting of shareholders following the date of grant and (ii) the first anniversary of the date of grant, subject to the
Directordirector continuing in service on the
Board of Directorsboard through the applicable vesting date. No portion of an annual equity award that is unvested or
unexerciseableunexercisable at the time of a
Director’sdirector’s termination of service on the
Board of Directorsboard will become vested and exercisable thereafter. In the event a
Directordirector is terminated upon or within 12 months following a change in control, as defined in the 2018 Plan, such
Director’sdirector’s outstanding equity awards will accelerate and vest in full.
Director
Stock Ownership Guidelinesstock ownership guidelines
The
Boardboard adopted the
Director Stock Ownership Guidelines,director stock ownership guidelines, pursuant to which
Non-Employee Directorsnon-employee directors are required to own equity in the
Companycompany at least equal to five times their retainer within five years of their election or appointment. Please see the disclosure under
"Executive“Executive Compensation—Director and Executive Stock Ownership
Guidelines"Guidelines” for more information.
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Proposal No. 2
Approval, on an Advisory
(Non-Binding) Basis,advisory
(non-binding) basis, of the
Compensation
compensation of Our
Named Executive Officers
our
named executive officers | | | As required by Section 14A(a)(1) of the Exchange Act, the below resolution enables our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers (“NEOs”) as disclosed in this Proxy Statement. This proposal (the "Say-on-Pay Vote"“Say-on-Pay Vote”), and commonly known as a "say-on-pay"“say-on-pay” proposal, gives our shareholders the opportunity to express their views on our NEOs'NEOs’ compensation. The Say-on-Pay Vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. We submit the compensation of our NEOs to our shareholders for a non-bindingnon- binding advisory vote on an annual basis. Based on the non-binding advisory vote regarding the frequency of future |
| executive compensation advisory votes conducted at the 2020 Annual Meeting of Shareholders, the next vote on the non-binding advisory frequency of such non-binding advisory votes will occur no later than our 2025 Annual Meeting of Shareholders. |
 | | | The Boardboard unanimously recommends that you vote “FOR” this advisory proposal. |
|
We encourage our shareholders to review the
"Executive Compensation"“Executive Compensation” section of this Proxy Statement for more information. As an advisory approval, this proposal is not binding upon us or the
Board of Directors.board. However, the
Compensation Committee,compensation committee, which is responsible for the design and administration of our executive compensation program, values the opinions of our shareholders expressed through your vote on this proposal. The
Boardboard and
Compensation Committeethe compensation committee will consider the outcome of this vote in making future compensation decisions for our named executive officers. Accordingly, we ask our shareholders to vote
"FOR"“FOR” the following resolution at the Annual Meeting:
"
“RESOLVED, that the shareholders of BJ’s Wholesale Club Holdings, Inc. approve, on an advisory basis, the fiscal year
20212023 compensation of BJ’s Wholesale Club Holdings, Inc.’s named executive officers as described in the Compensation Discussion and Analysis and disclosed in the Summary Compensation Table and related compensation tables and narrative disclosure set forth in BJ’s Wholesale Club Holdings, Inc.’s Proxy Statement for the
20222024 Annual Meeting of Shareholders.
"”
Board
Recommendationrecommendation
The
Board of Directorsboard unanimously recommends you vote
FOR the resolution to approve, on an advisory (non-binding) basis, the compensation of our NEOs, as
discloseddescribed in the Compensation Discussion and Analysis
and disclosed in the
accompanyingSummary Compensation Table and related compensation tables and
related narrative disclosure
ofset forth in this Proxy Statement.
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Compensation Discussion and Analysis
This section
(“Compensation Discussion and Analysis”) discusses the philosophy and material components of our executive compensation program for our named executive officers and the objectives driving the associated practices and decisions.
Our executive compensation program is designed to be flexible and complementary and to collectively serve the principles and objectives of our compensation and benefits programs, including to reflect shareholder values, enhance the link between executive pay and company performance, respond to changing market practices and retain effective leaders who have a significant understanding of our business.
Named
Executive Officersexecutive officers
Our NEOs for fiscal year
20212023 were:
| | | | |
 |  |  |  |  |
Bob Eddy
President and
Chief Executive Officer
| Laura Felice
Executive Vice President,
Chief Financial Officer
| Paul Cichocki
Executive Vice President,
Chief Commercial Officer
| Jeff Desroches
Executive Vice President,
Chief Operations Officer
| Bill Werner
Executive Vice President,
Strategy and Development
|
This discussion
Executive compensation philosophy and
analysis also covers compensation and benefits for fiscal year 2021 for Mr. Lee Delaney, who served as our President and Chief Executive Officer until his unexpected passing in April 2021. See “—Compensation Discussion and Analysis—Compensation of Mr. Delaney” for more information regarding Mr. Delaney’s fiscal year 2021 compensation. For all other sections included under “Executive Compensation”, Mr. Delaney is also included as an NEO.Executive Compensation Philosophy and Objectives
objectives
Our executive team is critical to our success and to building value for our shareholders. The principles and objectives of our executive compensation program are to:
ATTRACT
, engage and retain the best executives, with experience and managerial talent, enabling us to be an employer of choice in a highly competitive and dynamic industry
ALIGN
compensation with our corporate strategies, business and financial objectives and the long-term interests of our shareholders
MOTIVATE
and reward executives whose knowledge, skills and performance ensure our continued success
ENSURE
that our total compensation is fair, reasonable and competitiveTABLE OF CONTENTS
Elements of
Compensationcompensation
The principal components of our executive compensation program are designed to fulfill one or more of the principles and objectives described above. Compensation of our NEOs includes each of the following key elements:
 | | | Base Salarysalary
| Fixed
Short-Term
Cash
| | Fixed
short-term
cash
| | | Provides market-competitive fixed cash compensation reflecting role, responsibility and experience.
Represents 12% of CEO target compensation and 20% - 25% of other NEO target compensation. |
| | | |
 | Annual Incentive Plan Awardsawards(1)
| Variable
Mid-Term
Cash
| | Variable
mid-term
cash
| | | Earned based on achievement of a pre-established Companypre-established company financial metric (Adjusted
EBITDA)metrics (adjusted EBITDA and comparable club sales). Designed to align pay to both individual
and Companycompany performance for the fiscal year.
Represents 18% of CEO target compensation and 18% - 21% of other NEO target compensation. |
 | Long-Term Incentive Awards*
| Variable
Long-Term
Equity
| Long-term incentive awards(2)
| | | Variable
long-term
equity
| | | Designed to drive Companycompany performance; align interests with shareholders; and encourage long- termlong-term retention of executives.
Represents 70% of CEO target compensation and 55% - 60% of other NEO target compensation |
*Annual performance share unit awards represent 50% of long-term incentive awards, vest over a three-year period and are earned based on the achievement of cumulative adjusted EPS growth compared to goals established by the Compensation Committee. The shares earned pursuant to these awards, if any, will cliff vest as of the end of the performance period, based on continued employment through such date. Annual restricted stock awards represent the remaining 50% of long-term incentive awards and vest ratably over a three-year grant period.
(1)
| 70% of award achievement is based on adjusted EBITDA goal and 30% of award achievement is based on comparable club sales goal. |
(2)
| Annual performance share unit awards represent 50% of long-term incentive awards, vest over a three-year period and are earned based on the achievement of cumulative adjusted EPS growth compared to goals established by the compensation committee. The shares earned pursuant to these awards, if any, will cliff vest as of the end of the performance period, based on continued employment through such date. Annual restricted stock awards represent the remaining 50% of long-term incentive awards and vest ratably over a three-year grant period. |
We view each component of our executive compensation program as related, but distinct, and we also regularly reassess the total compensation of our executive officers to ensure that our overall compensation objectives are met. In addition, we have determined the appropriate level for each compensation component, which is based on our understanding of the competitive market based on the experience of
the members of the
Compensation Committee,compensation committee, advice and information provided by Exequity
(as defined and described below in “Engagement of compensation consultant”), our recruiting and retention goals, our view of internal equity and consistency, the length of service of our executive officers, our and each executive officer’s overall performance, and other considerations the
Compensation Committeecompensation committee considers relevant. Our executive compensation program is designed to be flexible and complementary and to collectively serve all of the executive compensation principles and objectives described above.
We offer cash compensation, in the form of base salaries, annual
Companycompany performance-based
bonusesincentives and, as circumstances warrant, discretionary individual performance-based
bonuses,incentives, that we believe appropriately rewards our executive officers for their contributions to our business. When making awards, the
Compensation Committeecompensation committee considers the
Company’scompany’s financial and operational performance. A key component of our executive compensation program is long-term incentive awards, which are comprised of performance-based and time-based awards as noted above. We emphasize the use of long-term equity awards to incentivize our executive officers to focus on the growth of our overall enterprise value and, correspondingly, the creation of value for our shareholders. Except as described below, we have not adopted any formal or informal policy or guidelines for allocating compensation between currently paid and long-term compensation, between cash and non-cash compensation, or among different forms of non-cash compensation.
Each of the primary elements of our executive compensation program is discussed in more detail below.
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Key
Compensation Practicescompensation practices
The following table highlights key features of our executive compensation program that demonstrate the
Company’scompany’s ongoing commitment to promoting shareholder interests through sound compensation governance practices.
| | | | WHAT WE DO | | | | | | WHAT WE DON'T DO |
 | | | Align the interests of our NEOs with those of our long-term investors by awarding a meaningful percentage of total compensation in the form of equity |  | | | | | Do not allow hedging or pledging of Companycompany securities |
| | | |
| Grant annual cash incentive compensation opportunities based on pre-established Companycompany goals | | | | | | Do not provide for "single trigger"“single trigger” payment of cash severance or acceleration of time-based equity upon a change in control |
| | | |
| Have robust equity ownership guidelines for our Directorsdirectors and executive officers (for our CEO, 5x base salary) | | | | | | Do not provide for Section 280G excise tax gross-up payments |
| | | |
| Have a clawback policy that allows for the recovery of previously paid incentive compensation in the event of a financial restatement | | | | | | Do not encourage unnecessary or excessive risk-taking as a result of our compensation policies |
| | | |
| Engage an independent compensation consultant to advise the Compensation Committeecompensation committee | | | | | | Do not allow for repricing of stock options without shareholder approval |
Roles of the Compensation Committee, Chief Executive Officercompensation committee, chief executive officer and Managementmanagement in Compensation Decisions
compensation decisions
Role of the
Compensation Committeecompensation committee
The
Compensation Committeecompensation committee oversees key aspects of the
Company’scompany’s executive compensation programs, including, base salaries, annual incentive and long-term incentive awards, and perquisites or other benefits for the
Company’scompany’s executive officers, including our NEOs. The
Compensation Committeecompensation committee approves performance goals for awards granted under our incentive compensation programs. In making its decisions the
Compensation Committeecompensation committee considers a variety of factors, including, but not limited to:
| | |
| • | our view of the strategic importance of the position; |
our view of the strategic importance of the position;
our evaluation of the competitive market based on the experience of the members of the Compensation Committeecompensation committee with other companies and market information we may receive from executive search firms retained by us;
our financial condition and available resources;
the length of service of an individual; and
the compensation levels of our other executive officers, each as of the time of the applicable compensation decision.
Role of the
Chief Executive Officerchief executive officer and
Managementmanagement
The
Chief Executive Officerchief executive officer and management team manage the compensation programs based on the
Compensation Committee’scompensation committee’s decisions and directives. The
Chief Executive Officerchief executive officer makes recommendations to the
Compensation Committeecompensation committee regarding compensation of executive officers other than himself.
Engagement of
Compensation Consultantcompensation consultant
The
Compensation Committeecompensation committee is authorized to retain the services of one or more executive compensation advisors, in its discretion, to assist with the establishment and review of our compensation programs and related policies. In accordance with its authority to retain consultants and advisors described above, the
Compensation Committeecompensation committee continued to engage the services of Exequity, LLP
("Exequity"(“Exequity”), a national compensation consulting firm, as its compensation consultant to provide executive compensation advisory services, help evaluate our compensation philosophy and objectives and provide guidance in administering our compensation program and policies.
All services related to executive compensation provided by Exequity during fiscal year
20212023 were conducted under the direction or authority of the
Compensation Committee,compensation committee, and all work performed by Exequity was pre-approved by the
Compensation Committee.compensation committee. Neither Exequity nor any of its affiliates maintains any other direct or indirect business relationships with us or any of our subsidiaries. Additionally, during fiscal year
2021,2023, Exequity did not provide any services to us unrelated to executive and
Directordirector compensation.
The Compensation Committeecompensation committee evaluates Exequity's independence on an annual basis and has evaluated whether any work provided by Exequity raised any conflict of interest under applicable SEC or NYSE rules for services performed during fiscal year 20212023 and determined that it did not.
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Key
Fiscal Year 2021 Compensation Decisionsfiscal year 2023 compensation decisions
The
Compensation Committeecompensation committee generally approves annual compensation levels for NEOs in the first quarter of each fiscal year, though it may make adjustments to compensation at other times of the year. When determining base salaries, annual
bonuses,incentives, long-term incentive awards, and other forms of compensation, the
Compensation Committeecompensation committee takes into consideration a variety of information, including, but not limited to, data generated from the compensation practices of its peer group companies, internal equity, an executive’s experience, knowledge of our business and the retail industry, scope of responsibility, corporate performance and individual performance. In particular, the
Compensation Committeecompensation committee made the following key compensation decisions for fiscal year
2021:2023:Increased each NEO'sincreased base salary for all NEOs as further described in "Base Salary"“Base salary” below;
Increased each NEO’sincreased target annual cash incentive award opportunities under our incentive plan;
Awarded promotional awards to Messrs. Eddy, Cichocki, and Werner and Ms. FeliceAnnual Incentive Plan for certain NEOs in accordance with base salary adjustments and/or increased target payout percentage for his or her fiscal year 2023 award, as further described in "—Promotion Awards"“Annual Incentive Plan Awards” below; and
Awarded equity inincreased annual long-term incentive awards (in the form of restricted stock in amounts consistent with fiscal year 2020awards and performance share units tied to a three-year cumulative adjusted EPS goal for fiscal year 2021performance-based stock units) as further described in "—Long-Term Incentive Awards" below.“Long-term incentive awards” below; and
determined that our NEOs earned 200% of their respective target performance share unit awards granted in fiscal year 2020, which represented 50% of their long-term incentive compensation awards for that year, and were earned on March 31, 2023, for the three-year performance period from February 2, 2020 to January 28, 2023.
Assessing
Competitive Practice Through Peer Group Comparisonscompetitive practice through peer group comparisons
To gain a general understanding of our current compensation practices, the
Compensation Committeecompensation committee reviews the compensation of executives serving in similar positions at peer group companies. The external market data reviewed for fiscal year
20212023 was provided by Exequity.
In reviewing and developing the peer group companies for fiscal year 2021,2023, the Compensation Committeecompensation committee considered, at the recommendation of Exequity, industry, annual revenue, market capitalization, enterprise value, EBITDA and gross margin, among other factors for each company. With respect to its executive compensation program, the Companycompany is reasonably positioned near the median of the peer group companies based on annual revenuemarket capitalization and market capitalization.enterprise value. The peer group companies, along with other market data, used for benchmarking our executive compensation program for fiscal year 2021 was the same as the peer group companies for fiscal year 2020. The Compensation Committeecommittee reviews and develops the peer group companies annually with input from Exequity. In its 20212022 review of the peer group for setting 2022fiscal year 2023 compensation, the Compensation Committeecompensation committee removed The Michaels Companies, Inc in connection with it being acquired by ApolloBed Bath & Beyond, Inc. and added Albertsons Companies, Inc. and Petco Health and Wellness Company,Ross Stores, Inc. to the peer group as identified and recommended by Exequity.
Exequity based on the factors set forth above.Fiscal year 2023 executive compensation peer group companies(2)
Fiscal Year 2021 Executive Compensation Peer Group CompaniesCompany name | | | GICS industry |
Company NameAlbertsons Companies, Inc. | GICS Industry | | Food Retail |
Bed Bath & Beyond, Inc.(1) | | | Home Furnishing Retail |
| Big Lots, Inc. | | | General Merchandise Stores |
| Burlington Stores, Inc. | | | Apparel Retail |
| Dick's Sporting Goods, Inc. | | | Specialty Stores |
| Dollar General Corporation | | | General Merchandise Stores |
| Dollar Tree, Inc. | | | General Merchandise Stores |
| Foot Locker, Inc. | | | Apparel Retail |
| Kohl's Corporation | | | Department Stores |
The Michaels Companies,Petco Health and Wellness Company, Inc. | | | Specialty Stores |
| Sprouts Farmers Market, Inc. | | | Food Retail |
| Target Corporation | | | General Merchandise Stores |
| The TJX Companies, Inc. | | | Apparel Retail |
| Williams-Sonoma, Inc. | | | Home Furnishing Retail |
(1)
| On June 15, 2023, BJ’s approved removal of Bed, Bath & Beyond, Inc. as a peer group company for future compensation determinations after it filed for Chapter 11 bankruptcy protection. |
(2)
| On June 15, 2023, BJ’s approved the addition of Ross Stores, Inc. as a peer group company for future compensation determinations. |
In fiscal year 2021,2023, the Compensation Committeecompensation committee considered the pay practices and compensation levels of executives serving in similar positions at the peer group companies when it determined the base salary adjustments, the promotional awards, the change in the target payout levels under our Annual Incentive Plan and the size and mix of equity awards granted to our NEOs, each as described below.
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We believe it is important to provide a competitive fixed level of pay to attract and retain experienced and successful executives. Annual base salaries compensate our NEOs for fulfilling the requirements of their respective positions and provide them with a level of cash income predictability and stability with respect to a portion of their total compensation.
The following table sets forth fiscal year
20212023 and fiscal year
20202022 annual base salaries for our NEOs:
| Named Executive Officer | | Fiscal Year 2021 Base Salary(1) | | Fiscal Year 2020 Base Salary(2) | | Percentage Change |
| Bob Eddy | | $ | 1,200,000 | | | | $ 800,000 | | | 50 | % |
| Laura Felice | | 600,000 | | | 400,000 | | | 50 | |
| Paul Cichocki | | 850,000 | | | 750,000 | | | 13 | |
| Jeff Desroches | | 600,000 | | | 550,000 | | | 9 | |
| Bill Werner | | 530,000 | | | 385,000 | | | 38 | |
| Named executive officer | | | Fiscal year 2023
base salary
($)(1) | | | Fiscal year 2022
base salary
($)(2) | | | Percentage (%)
change |
| Bob Eddy | | | 1,350,000 | | | 1,200,000 | | | 12.5 |
| Laura Felice | | | 750,000 | | | 675,000 | | | 11.1 |
| Paul Cichocki | | | 900,000 | | | 850,000 | | | 5.9 |
| Jeff Desroches | | | 650,000 | | | 625,000 | | | 4.0 |
| Bill Werner | | | 575,000 | | | 539,044 | | | 6.7 |
| (1) | Base salaries for Messrs. Eddy, Cichocki, and Werner and Ms. Felice were effective April 19, 2021 in connection with their respective appointments to their current roles and have been annualized based on such increased amounts. Mr. Desroches base salary was effective April 1, 2021 and has been annualized based on such increased amount. |
(2)
| Base salaries were effective as of April 1, 20202, 2023 for fiscal year 20202023 and have been annualized based on such amounts. |
(2)
| Base salaries were effective April 3, 2022 for fiscal year 2022 and have been annualized based on such amounts. |
The base salaries of our executive officers, including our NEOs, are reviewed periodically by the
Compensation Committeecompensation committee and our
Chief Executive Officerchief executive officer (except with respect to his own base salary), and adjustments are made as deemed appropriate. In determining the amount of base salary that each NEO receives, we consider the executive’s current compensation, tenure, any change in the executive’s position or responsibilities and the complexity and scope of the executive’s position and responsibilities as compared to those of other executives within the
Companycompany and in similar positions at the peer group companies.
The increases to the base salaries of our NEOs for fiscal year 20212023 were designed to maintain or establish, as applicable, each NEO’s base salary near the median of his or her counterparty within the peer group companies and were based on the Compensation Committee’scompensation committee’s review of the benchmarking data for the peer group companies provided by Exequity. The additional increases in Messrs. Eddy’s, Cichocki’s and Werner’s and Ms. Felice’s base salaries were made based on a review of competitive market data for their respective positions and to reflect their promotions and their responsibilities in their respective new roles.
Annual Incentive Plan
Awardsawards
Our Annual Incentive Plan, which became effective on January 29, 2017 (the "Annual“Annual Incentive Plan"Plan”), is designed to reward participants, including our NEOs, for their contributions to the Companycompany based on the achievement of a pre-established company financial metric, Adjusted EBITDA. We use Adjustedmetrics, adjusted EBITDA which we define as income from continuing operations before interest expense, net, provision (benefit) for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including: compensatory payments related to options; stock-based compensation expense; pre-opening expenses; management fees; non-cash rent; strategic consulting; costs related to our IPO and the registered offerings by selling shareholders;comparable club closing and impairment charges; reduction in force severance; gas profit outside of a specific collar and other adjustments as determined by the Compensation Committee, to set our performance target under the Annual Incentive Plan because we believe it is a key financial metric measuring the progress of our operational strategy.sales. As each NEO’s performance contributes to this metric,these metrics, we believe it providesthey provide a fair and objective basis on which to evaluate each NEO’s performance and to determine each NEO’s annual cash incentive award under the Annual Incentive Plan.
Financial
performance metric
(weighting) | | | Definition | | | Rationale for selection |
Adjusted EBITDA
70% | | | Income from continuing operations before interest expense, net, provision for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including stock-based compensation expense; acquisition and integration costs; home office transition costs; restructuring and other adjustments, pre-opening expense, non-cash rent expense and specified litigation expense; and, for purposes of setting our performance target under the Annual Incentive Plan, excluding gas profit outside of a specific collar and other adjustments as determined by the compensation committee. | | | • Creates a strong focus on our overall profit goal and underlying drivers of revenue growth, cost control, cash generation and ultimately total shareholder return.
• Directly measures the progress we are making on our strategic growth initiatives. |
Comparable club sales
30% | | | Comparable club sales, also known as same-store sales, includes all clubs that were open for at least 13 months at the beginning of the period and were in operation during the entirety of both periods being compared, including relocated clubs and expansions. | | | • Key valuation driver in the retail industry.
• Key financial metric in measuring the company’s performance and demonstrates the effectiveness of our core business activities. |
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The
Compensation Committeecompensation committee assigns our NEOs an annual cash incentive target opportunity expressed as a percentage of base salary. For fiscal 2023, these formula-driven cash payouts could have ranged from zero, if company performance fell below minimum thresholds, to 100% of annual incentive opportunity, if the targets were met, and up to a maximum of 200% of the target annual incentive opportunity if performance exceeded target. Our Annual Incentive Plan provides the compensation committee with the authority to reduce the amount of annual cash incentive award paid to a participant, or some or all participants, if the compensation committee determines that such reduction is appropriate. The compensation committee established minimum, target
range and maximum levels of performance for the
Adjustedadjusted EBITDA
goaland comparable club sales goals shortly after the beginning of fiscal year
2021,2023, based on an assessment of the operating landscape for fiscal year
2021,2023, which may result in variations in these established levels from year to year.
Overall, the goals for Adjusted EBITDA for fiscal year 2021 were largely consistent with the prior year, however, slight increases were made to the goals for Adjusted EBITDA for fiscal year 2021 and the Adjusted EBITDA goal for target was changed from a discrete target to a range due to the novel coronavirus (COVID-19) pandemic and goal-setting challenges it has resulted in for compensation. Pursuant to these levels of performance, each NEO could earn 0%, 100% or 200%, respectively, of his or her target annual cash incentive award.Additionally, the Compensation Committee established an aggregate target amount of the bonus pool for fiscal year 2021 for purposes of determining the impact on each NEO’s cash incentive award of Adjusted EBITDA for fiscal year 2021 being greater than or less than the target performance level (the "Target Bonus Pool"). To the extent Adjusted EBITDA for fiscal year 2021 exceeded the target performance level, then the amount of the actual bonus pool would equal the sum of (i) the Target Bonus Pool and (ii) one-third of the amount by which Adjusted EBITDA for fiscal year 2021 (without taking into account the reduction to Adjusted EBITDA resulting from cash incentive awards above the target awards amounts) exceeded the target performance level. If Adjusted EBITDA for fiscal year 2021 was less than the target performance level, then the amount of the actual bonus pool would be calculated by subtracting (i) an amount equal to one-half of the amount by which the target performance level fell short of the Adjusted EBITDA for fiscal year 2021 (without taking into account the impact to Adjusted EBITDA resulting from cash incentive awards below the target awards amounts) from (ii) the Target Bonus Pool. The amount of each NEO’s annual cash incentive award, as a percentage of the target set for each NEO, is equal to the size of such actual bonus pool as a percentage of the Target Bonus Pool (up to a maximum of 200%).
The table below illustrates the relationship between
Adjustedactual adjusted EBITDA
and comparable club sales performance for fiscal year
2021,2023 as compared to performance targets, the percentage of performance targets earned and the resulting aggregate cash incentive
awards as a percentage of target performance and the size of the bonus pool,award attainment determined with interpolation applying for amounts between
levels, as well as actual performance for fiscal year 2021, the percentage of target earned and the actual bonus pool.| | Adjusted
EBITDA | Payout | Bonus Pool |
| (dollars in millions) | | | |
| Minimum | $ | 666 | 0 | % | $ | 0 |
| Target (Low) | 702 | 100 | | 35 |
| Target (High) | 722 | 100 | | 35 |
| Maximum | 794 | 200 | | 71 |
| Actual | 880 | 200 | | 71 |
The Compensation Committee determined that Adjusted EBITDA for fiscal year 2021 was greater than the maximum performance level, which resulted in an achievement level of 200%. Additionally, the total bonus pool was correspondingly increased by 1/3 the amount by which Adjusted EBITDA for fiscal year 2021 exceeded the target performance level.
levels.
| (dollars in millions) | | | Adjusted
EBITDA
($)(1) | | | Comparable
club sales
($) | | | Payout
(%) |
| Minimum | | | | | | 1,058 | | | | | | 15,036 | | | | | | 0 | | | |
| Target | | | | | | 1,102 | | | | | | 15,996 | | | | | | 100 | | | |
| Maximum | | | | | | 1,191 | | | | | | 16,636 | | | | | | 200 | | | |
| Actual | | | | | | 1,088(2) | | | | | | 15,457 | | | | | | 60 | | | |
| Achievement (%) | | | | | | 67 | | | | | | 44 | | | | | | | | | |
(1)
| The compensation committee determined that adjusted EBITDA for fiscal year 2023 was $1.088B and the comparable club sales was $15.457B which resulted in an achievement level of 60% for total AIP payout. The weighting of the adjusted EBITDA and comparable club sales goals is 70% and 30%, respectively. The total cash incentive award amounts were paid at lower than target payout amounts due to adjusted EBITDA and comparable club sales for fiscal year 2023 being achieved between the minimum and target performance levels. |
(2)
| Additionally, adjusted EBITDA did not include gas profit outside of a specific collar, and such amounts were therefore excluded from the calculation of the achievement level. |
Each NEO's target annual cash incentive award opportunity is expressed as a percentage of his or her base salary in effect at fiscal year-end and is based on peer group benchmark data and the scope of responsibility and impact the executive has on the
Company'scompany's overall results.
In fiscal year 2021,The compensation committee maintained the
Compensation Committee maintained each NEO's target payout percentage
of Messrs. Eddy and Mr. Cichocki for
his or hertheir respective fiscal year
2021 award,2023 awards, consistent with
their target payout percentages for fiscal year
2020, with2022. The compensation committee increased the
exception of Mr. Eddy's target payout percentage
which was increased to 150% of his base salary from 110% of his base salary and each of Ms.
Felice’sFelice and
Mr. Werner’sMessrs. Desroches and Werner for their respective fiscal year 2023 awards as detailed below. The target payout percentage
which was increased to 70% of their respective base salary from 60% of their respective base salary.Given the base salary increases as well as the increase to the size of the total bonus pool, however, each NEO's target annual cash incentive award opportunity increased. These increases, as well as the increase in Messrs. Eddy's and Werner’s and Ms. Felice’s target payout percentages, were intended to more closely align each NEO'sNEOs potential annual total cash compensation more closely with the median of the annual total cash compensation paid to executives with similar roles and responsibilities at the peer group companies.
companies and were based on the compensation committee’s review of the benchmarking data for the peer group companies provided by Exequity.
Further, given the base salary increases for each of our NEOs in fiscal year 2023, each NEO's target annual cash incentive award opportunity increased for fiscal year 2023.
The following table sets forth fiscal year
20212023 target
bonusesincentives for each of our NEOs as a percentage of base salary, the percentage of target
bonusincentive earned for each NEO as a percentage of base salary and the cash incentive award amounts that were paid to each NEO for fiscal year
20212023 based on the achievement of the
Adjusted EBITDA goalgoals described above.
| Named Executive Officer | Annual Incentive Plan Target Bonus (1) | Annual Incentive
Plan Target Bonus | Earned | Cash Incentive
Award Amount (2) |
| Bob Eddy (3) | 150 | % | | $ | 1,800,000 | | 300 | % | | | $ 3,600,000 | |
| Laura Felice (4) | 70 | | | 420,000 | | 140 | | | 840,000 | |
| Paul Cichocki (5) | 100 | | | 850,000 | | 200 | | | 1,700,000 | |
| Jeff Desroches | 70 | | | 420,000 | | 140 | | | 840,000 | |
| Bill Werner(6) | 70 | | | 371,000 | | 140 | | | 742,000 | |
| Named executive officer | | | Annual Incentive Plan
target incentive
percentage
(%)(1) | | | Annual Incentive
Plan target
incentive
($)(2) | | | Percentage earned
(%) | | | Cash incentive
award
amount
($)(3) |
| Bob Eddy | | | 150 | | | 2,025,000 | | | 60 | | | 1,215,000 |
| Laura Felice | | | 85 | | | 637,500 | | | 60 | | | 382,500 |
| Paul Cichocki | | | 100 | | | 900,000 | | | 60 | | | 540,000 |
| Jeff Desroches | | | 75 | | | 487,500 | | | 60 | | | 292,500 |
| Bill Werner | | | 75 | | | 431,250 | | | 60 | | | 258,750 |
(1)
| Fiscal year 20212023 was 5253 weeks long. Each executive’s target bonusincentive was a percentage of their base salary as of January 29, 2022.February 3, 2024. |
(2)
| Calculated as Annual Incentive Plan target incentive percentage multiplied by the NEO’s annual salary. |
(3)
| Cash incentive award amounts earned for fiscal year 20212023 were paid in March 2022. |
(3) | Mr. Eddy was appointed as the Company’s President and Chief Executive Officer effective April 19, 2021. |
(4) | Ms. Felice was appointed as the Company’s Executive Vice President, Chief Financial Officer effective April 19, 2021. |
(5) | Mr. Cichocki was appointed as the Company’s Executive Vice President, Chief Commercial Officer effective April 19, 2021. |
(6) | Mr. Werner was appointed as the Company’s Executive Vice President, Strategy and Development effective April 19, 2021.2024. |
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Long-Term Incentive Awards
Long-term incentive awards
For fiscal year
2021,2023, each of our NEOs received long-term incentive awards comprised of performance share units and restricted stock awards. We designed these awards primarily to motivate, reward and retain our executive officers in a manner that best aligns their interests with the interests of our shareholders. Our executive officers earn performance share units based on the achievement of pre-defined cumulative adjusted EPS goals over a three-year performance period, determined by the
Compensation Committee,compensation committee, and we believe these types of awards provide a direct line of sight for the NEOs between our financial performance and their long-term incentive rewards. Furthermore, the restricted stock component of our long-term incentive awards closely
alignaligns the incentives provided by these awards with the interests of our shareholders as our executive officers benefit from restricted stock awards when the market price of our common stock increases and all changes to the value of stock, whether positive or negative, directly correspond to those experienced by our shareholders. Therefore, we believe that restricted stock awards and performance share units provide meaningful incentives to our executive officers to achieve increases in the value of our stock over time and are an effective tool for meeting our compensation goals of increasing long-term shareholder value by tying the value of the awards to our future performance and by aligning executive officer compensation with the interests of our shareholders.
Historically, when determining the amount and terms of equity compensation awards, we considered, among other things, market information provided by Exequity, individual performance history, job scope, function, title, outstanding and unvested equity awards and comparable awards granted to other executives at similar levels at the peer group companies. The
Compensation Committeecompensation committee has also drawn upon the experience of its members in making such determinations.
Based on these considerations, the Compensation Committeecompensation committee determined not to increase the long-term incentive award amounts for the NEOs for fiscal year 2021. 2023 in order to remain competitively positioned with their respective counterparties within the peer group companies and was based on the compensation committee’s review of the benchmarking data for the peer group companies provided by Exequity.
Target Long-Term Incentive Values
| Name | | | 2023
($) | | | 2022
($) | | | Change
(%) |
| Bob Eddy | | | 8,000,000 | | | 7,000,000 | | | 14.3 |
| Laura Felice | | | 1,700,000 | | | 1,500,000 | | | 13.3 |
| Paul Cichocki | | | 2,700,000 | | | 2,500,000 | | | 8.0 |
| Jeff Desroches | | | 1,500,000 | | | 1,400,000 | | | 7.1 |
| Bill Werner | | | 1,300,000 | | | 1,100,000 | | | 18.2 |
The following table sets forth the types of awards we granted, weighting (based on target value) allocated to each type of award for each of our NEOs and vesting terms of our long-term incentive compensation for fiscal year
2021:2023:Award Typetype for NEOs | Weighting | | Weighting | | | Vesting Termsterms |
| Performance share units | | | 50% | | | Earned based on the achievement of cumulative adjusted EPS growth compared to goals established by the Compensation Committeecompensation committee and vest over the three-year performance period ending on February 3, 2024.January 31, 2026. The shares earned, if any, will cliff vest as of the end of the performance period, based on continued employment through such date. |
| Restricted stock | | | 50% | | | Vest in three equal annual installments commencing on April 1, 2022,2024, subject to continued employment through such dates. |
In connection with the transition from non-qualified stock options to performance
Performance share
units in fiscal year 2020, the Compensation Committee determined, after consideration of retention factors associated with the equity scheduled to vest each year given the new delayed vesting period associated with the performance shares units as opposed to the annual vesting associated with the non-qualified stock options, to grant cash transitionunit awards
equivalent to 25% of the annual long-term incentive award grant, with one-third of the cash transition award vesting after one year and the remaining two-thirds of the award vesting the year thereafter. The first cash transition awards were paid in fiscal year 2021.Performance Share Unit Awards
We granted performance share unit awards to our NEOs in fiscal year 20212023 for 50% of their long-term incentive compensation awards. The performance share unit awards may be earned by our NEOs based on cumulative adjusted EPS growth achieved over a three-year performance period from January 30, 202129, 2023 to February 3, 2024.January 31, 2026. Cumulative adjusted EPS means the sum of the earnings per share, determined by the Compensation Committeecompensation committee in its sole discretion in accordance with generally accepted accounting practices in the United States, for each of the three fiscal years in the applicable performance period, adjusted to account for: (i) unusual or one-time items of expense or income, including without limitation, asset impairment charges, charges associated with closing or relocating of a club, charges related to debt refinancing or other capital market transactions; (ii) income or expense related to discontinued operations; (iii) restructuring charges including severance charges related to the restructuring and any other non-recurring or out of period charge as approved by the compensation committee and the tax impact of the foregoing adjustments on net income; (iv) the effects of acquisitions, divestitures, stock split-ups, stock dividends or distributions, recapitalizations, warrants or rights issuances or combinations, exchanges or reclassifications with respect to any outstanding class or series of our common stock; (v) a corporate transaction, such as any merger of the Companycompany with another corporation, any consolidation of the Companycompany and another corporation into another corporation, any separation of the Companycompany or its business units; or (vi) any reorganization of
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us, or any partial or complete liquidation or sale of all or substantially all of our assets. We use cumulative adjusted EPS to set our performance target under the performance share unit awards because we believe (a) it aligns closely with overall shareholder value and indicates our ability to create the same and (b) it is a metric commonly used by companies in our peer group and in the general industry. As each NEO’s performance contributes to this metric, we believe it provides a fair and objective basis on which to evaluate each NEO’s performance and to determine each NEO’s performance share unit award.
The number of units that will be earned, as a percentage of the
of the target number of units granted,
will beis based on threshold, target
range and maximum levels of performance established by the compensation committee shortly after the beginning of fiscal year
2021,2023, based on their assessment of the
Companycompany outlook, which may result in variations in these established levels from year to year.
AsFor fiscal year 2023, consistent with
our Annual Incentive Plan,prior years, the adjusted EPS
target performance
level was changed from a discrete target to a target range due tolevels were increased based on growth expectations for the
novel coronavirus (COVID-19) pandemic and the goal-setting challenges it has resulted in for compensation.business. If our cumulative adjusted EPS does not equal or exceed the threshold level established, then our NEOs will not be entitled to earn any shares pursuant to these performance share units. To the extent our performance falls between two of the established levels of performance, the percentage earned will be determined based on straight-line interpolation between the percentages that would have been earned for the established levels of performance. Pursuant to these levels of performance, each NEO could earn
50%, 100% orbetween 0% and 200%, respectively, of his or her target performance share units. The shares earned, if any, will cliff vest as of the end of the three-year performance period based on continued employment through such date.
The table below illustrates the relationship between level of achievement and the performance share unit awards earned as a percentage of target performance, with interpolation applying for amounts between levels.
| | Fiscal Year 2021 Target Amounts |
| Name | Grant Date Fair
Value | | (Units) (1) |
| Bob Eddy | $ | 1,399,997 | | | 31,496 | |
| Laura Felice (2) | 187,490 | | | 4,218 | |
| Paul Cichocki | 1,124,985 | | | 25,309 | |
| Jeff Desroches | 699,998 | | | 15,748 | |
| Bill Werner (2) | 187,490 | | | 4,218 | |
| | | Fiscal year 2023 target amounts |
| Name | | | Grant date
fair value
($) | | | Units
(#)(1) |
| Bob Eddy | | | 3,999,989 | | | 52,583 |
| Laura Felice | | | 849,930 | | | 11,173 |
| Paul Cichocki | | | 1,349,938 | | | 17,746 |
| Jeff Desroches | | | 749,974 | | | 9,859 |
| Bill Werner | | | 649,942 | | | 8,544 |
(1)
| The target number of units granted to each of our NEOs was determined based on the target dollar value divided by the estimated grant date fair value per unit which was determined by using the fair market value of our common stock on March 31, 2023, the preceding trading day before the grant date (Saturday, April 1, 2023), which was $44.45. |
(2) | Ms. Felice’s and Mr. Werner’s long-term incentive award amounts for fiscal year 2021 consisted of a 25% weighting of performance share unit awards for fiscal year 2021.$76.07. |
Status of Performance Share Unit Awards
We granted annual performance-based restricted share unit awards (“PSU Awards”) to our NEOs in fiscal year 2020, with performance criteria relating to cumulative adjusted EPS growth during the performance period compared to goals established by the compensation committee for the performance period. During fiscal year 2021, we also granted one-time performance-based restricted share unit awards to Messrs. Eddy, Cichocki and Werner and Ms. Felice in connection with their promotions (each, a “PSU Promotion Award”), with the same performance criteria as the PSU Awards for the applicable performance period. See “—Outstanding equity awards at fiscal 2023 year-end” for additional discussion of the outstanding PSU Awards and PSU Promotion Awards.
The table below provides a summary of the 2020 PSU awards paid out in fiscal year 2023 which were paid out at 200% of Target Earned:
| Name | | | PSU target shares | | | PSU vested shares |
| Bob Eddy | | | 55,843 | | | 111,686 |
| Laura Felice | | | — | | | — |
| Paul Cichocki | | | 44,874 | | | 89,748 |
| Jeff Descroches | | | 27,921 | | | 55,842 |
| Bill Werner | | | — | | | — |
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Restricted
Stock Awardsstock awards
We also granted restricted stock awards to our NEOs for fiscal year
2021.2023. These awards comprise 50% of their long-term incentive compensation awards and vest in three equal annual installments commencing on April 1,
2022,2024, subject to continued employment through such dates. The following table sets forth the restricted stock awards granted to each of our NEOs for fiscal year
2021.| | | Fiscal Year 2021 Restricted Stock Awards |
| Name | | Grant Date Fair Value | | Share (#) |
| Bob Eddy | | $ | 1,399,997 | | | 31,496 | |
| Laura Felice (1) | | 562,470 | | | 12,654 | |
| Paul Cichocki | | 1,124,985 | | | 25,309 | |
| Jeff Desroches | | 699,999 | | | 15,748 | |
| Bill Werner (1) | | 562,470 | | | 12,654 | |
2023.(1) | Ms. Felice’s and Mr. Werner’s long-term incentive award amounts for fiscal | | Fiscal year 2021 consisted of a 75% weighting of2023 restricted stock awards.awards |
Promotion Awards
In connection with the promotions of Mr. Eddy, Ms. Felice, Mr. Cichocki and Mr. Werner, each of which were effective April 19, 2021, the Compensation Committee approved awards of performance-based restricted stock units (each a “PSU Promotion Award”) and awards of restricted stock (“Restricted Stock Promotion Awards”) pursuant to the 2018 Plan.
PSU Promotion Awards
The PSU Promotion Awards are subject to the same performance-based vesting hurdles as the performance share units granted to NEOs for fiscal year 2021, which are based on achievement of cumulative adjusted EPS growth during fiscal years 2021, 2022 and 2023, subject to continued employment through such dates. The number of restricted stock units that may be earned pursuant to the PSU Promotion Award range from 50%-200% of the target amount based on the same performance levels as the performance share units granted to NEOs for fiscal year 2021. None of the performance share units will be earned if the minimum performance-based vesting hurdle is not achieved. See “—Performance Share Unit Awards” above for additional information.
The table below illustrates the relationship between level of achievement and the PSU Promotion Award earned as a percentage of target performance, with interpolation applying for amounts between levels.
| | | PSU Promotion Award Target Amounts |
| Name | | Value | | Units(1) |
| Bob Eddy(2) | | $ | 6,599,967 | | | 149,863 | |
| Laura Felice | | 224,957 | | | 5,108 | |
| Paul Cichocki | | 124,986 | | | 2,838 | |
| Bill Werner | | 174,971 | | | 3,973 | |
(1)Name | The target number of units granted to each of our NEOs set forth in the above table was determined based on the target dollar value divided by the estimated grant | | Grant date fair value per unit, which was determined using the fair market value of the Company’s common stock on the grant date, which was $44.04. |
(2)
($) | Represents a promotion award of $1,600,000 and a separate Chief Executive Officer award of $5,000,000. | | Share
(#)(1) |
Restricted Stock Promotion Awards
The Restricted Stock Promotion Awards vest in three equal annual installments commencing on April 1, 2022, subject to continued employment through such dates. The following table sets forth the Restricted Stock Promotion Awards granted to each of the NEOs set forth therein.
| | | Fiscal Year 2020 Restricted Stock Awards |
| Name | | Value | | Shares(1) |
| Bob Eddy | | $ | 1,599,973 | | | 36,330 | |
| Laura Felice | | 224,956 | | | 5,108 | |
| Paul Cichocki | | 124,985 | | | 2,838 | |
| Bill Werner | | 174,971 | | | 3,973 | |
| Bob Eddy | | | 3,999,989 | | | 52,583 |
| Laura Felice | | | 849,930 | | | 11,173 |
| Paul Cichocki | | | 1,349,938 | | | 17,746 |
| Jeff Desroches | | | 749,974 | | | 9,859 |
| Bill Werner | | | 649,942 | | | 8,544 |
(1)
| The target number of shares granted to each of our NEOs set forth in the above table was determined based on the target dollar value divided by the estimated grant date fair value per share which was determined by using the fair market value of the Company’sour common stock on March 31, 2023, the preceding trading day before the grant date (Saturday, April 1, 2023), which was $44.04.$76.07. |
Cash transition awards
In connection with Mr. Werner’s leadership with the strategic evaluation of the Company’s co-branded credit card program (“Co-Brand Initiative”), he received a grant oftransition from non-qualified stock options to performance share units in fiscal year 2020, the compensation committee determined, after considering retention factors associated with a target fair market valuethe equity scheduled to vest each year given the new delayed vesting period associated with the performance shares units as opposed to the annual vesting associated with the non-qualified stock options, to grant cash transition awards equivalent to 25% of $1,199,954 (the “Performance Award”) as well as a restricted stockthe annual long-term incentive award of 5,174 shares, with a fair market value of $299,988 on the grant date (the “RSA”)for fiscal year 2020 (and for Ms. Felice and Mr. Werner, for fiscal year 2021), with one-third of the RSA scheduled to vest on each September 25, 2022, 2023cash transition award vesting after one year and 2024, subject to continued employment with us through such dates. 50%the remaining two-thirds of the Performance Award may vest on each of September 2025 or September 2026, subject to Mr. Werner’s continued service throughaward vesting the end ofyear thereafter. The following table sets forth the applicable performance periodcash transition awards paid in fiscal years 2023, 2022 and 2021.
| Named executive officer | | | Fiscal Year 2023
transition award ($)(1) | | | Fiscal year 2022
transition award ($)(2) | | | Fiscal year 2021
transition award ($)(3) |
| Bob Eddy | | | — | | | 933,333 | | | 466,667 |
| Laura Felice | | | 125,000 | | | 62,500 | | | — |
| Paul Cichocki | | | — | | | — | | | — |
| Jeff Desroches | | | — | | | 466,667 | | | 233,333 |
| Bill Werner | | | 125,000 | | | 62,500 | | | — |
(1)
| The cash transition awards for fiscal year 2023 were paid on April 7, 2023. |
(2)
| The cash transition awards for fiscal year 2022 were paid on April 1, 2022. |
(3)
| The cash transition awards for fiscal year 2021 were paid on April 1, 2021. |
All cash transition awards have been paid and no further cash transition awards are outstanding. At this time, the
co-brand spend during such performance period (“the “Performance Target”). The Compensation Committee shall determine the achievement of the performance goals within the 90-day period following the end of the performance period (such date, the “Determination Date”). If the Performance Target isCompany does not
achieved, 50% of the applicable tranche of the Performance Award may vest if the co-brand spend during the applicable performance period is at least 90% of the Performance Target (the “Floor”) and up to 200% of the shares subject to the Performance Award may vest upon the achievement of 110% of the Performance Target during the applicable performance year (the “Maximum”). Achievement of co-brand spend between the Floor, Performance Target and Maximum levels are determined by linear interpolation, provided that if co-brand spend is less than the Floor, no shares under the applicable Performance Award tranche shall vest. The number of shares subject to the RSA were determined by dividing $299,988 by the per share closing price of the common stock on the grant date.anticipate granting new cash transition awards.
Other
Compensation Componentscompensation components
We have established a 401(k) retirement savings plan for our employees, including our NEOs, who satisfy certain eligibility requirements. Under the 401(k) plan, eligible employees may elect to reduce their current compensation by up to the prescribed annual limit and contribute these amounts to the 401(k) plan. This plan provides for
Companycompany matching contributions of 50% of the first 6% of an employee’s covered compensation.
Executive Retirement Plan
We maintain and Non-Qualified Deferred Compensation Plan
Executive Retirement Plan
Until April 2023, we maintained an executive retirement plan (the “Executive Retirement Plan”) in which a select group of our management and highly compensated employees arewere eligible to participate. Participants arewere selected by the Compensation Committeecompensation committee and arewere entitled to company contributions within 60 days of fiscal year end under the plan (the “Annual Retirement Contribution”) if they arewere actively employed by the Companycompany on the last day of a plan year or if they arewere terminated prior to the end
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of the plan year due to (i) retirement on or after the attainment of age 55 or (ii) disability. Each year the
Company makescompany made an Annual Retirement Contribution to each participant under this plan with at least four years of credited service in an amount equal to at least 3% of the participant’s after-tax base salary earned for such year.
ForDuring fiscal year
2021,2023, we made a contribution of 5% of each NEO’s base salary, consistent with prior years. Annual Retirement Contributions to participants with at least four years of service
arewere considered taxable income to the participants, and we
makemade an additional tax gross-up contribution to each of these participants each year. For participants with less than four years of service by the end of the applicable plan year, the participant
will accrueaccrued the right to an Annual Retirement Contribution each year, and, subject to continued employment, in the plan year in which the participant
iswas first credited with four years of service, the
Company will makecompany made an aggregate retirement contribution on behalf of the participant equal to the amount of the Annual Retirement Contribution for the applicable plan year and the previous three plan years (along with a tax gross-up contribution). Notwithstanding the foregoing, we
have elected to make Annual Retirement Contributions on behalf of Mr. Cichocki though he
hashad not yet achieved four years of credited service. If the employment of Mr. Cichocki is terminated prior to achieving four years of credited service, he will forfeit any
Companycompany contributions made under the plan. Tax gross up payments will be made to Mr. Cichocki when he achieves four years of credited service. Upon a change of control, each participant with less than four years of credited service will become fully vested in any benefit accrued under the plan, and each participant will receive an Annual Retirement Contribution for the year in which the change of control occurs.
Participants generally
maycould elect to invest their balance under the Executive Retirement Plan in a variety of different tax-deferred investment vehicles. However, the
Company selectscompany selected the investments with respect to Annual Retirement Contributions made on behalf of Mr. Cichocki since he
hashad not yet achieved four years of credited service.
Non-Qualified Deferred Compensation Plan
In November 2023, the compensation committee adopted the BJ’s Wholesale Club, Inc. Non-Qualified Deferred Compensation Plan (the “Executive NQDC Plan”) effective on January 1, 2024.
Pursuant to the Executive NQDC Plan, a select group of management or highly compensated employees of the Company (“participants”), including the company’s NEOs, are eligible to participate by making an annual irrevocable election to defer up to fifty percent (50%) of the participant's annual base salary, as well as up to one hundred percent (100%) of any annual cash incentive award. A participant will be 100% vested at all times in their elective deferral account within the Executive NQDC Plan. Deferred amounts are held for each participant in separate individual accounts in an irrevocable rabbi trust. The accounts are credited with earnings or losses based on the rate of return of notional investment options designated by the trustee of the rabbi trust and selected by the participant, which he or she may change at any time.
In addition, the company may elect, during any single plan year, to provide a discretionary contribution to the Executive NQDC Plan to a select management participant on such participant's behalf. Select eligible management participants include the company’s NEOs.
No discretionary contribution under the Executive NQDC Plan was made by the company to our executives for fiscal year 2023.
The benefits under the Executive NQDC Plan will be paid to the participant, or in the event of death, to the participant’s beneficiary, following the earliest of the participant’s separation from service, death, disability, or the specified time elected by the participant, either in installments or in a lump sum payment in accordance with the terms of the Executive NQDC Plan and provisions established by the company. If a participant dies before receiving the full value of the deferral account balances, the designated beneficiary would receive a lump sum of the remaining balance.
Employee
Benefitsbenefits and
Perquisitesperquisites
We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices in the competitive market.
Additional benefits received by our employees, including our NEOs, include medical and dental benefits, flexible spending accounts, short-term and long-term disability insurance and accidental death and dismemberment insurance. We also provide basic life insurance coverage to our employees, as well as executive life insurance to certain key executives, including our NEOs. We reimburse certain financial counseling and estate planning expenses for certain executives, including our NEOs. We believe providing such perquisites enables us to provide a competitive package that allows us to attract and retain top talent.
In addition, Mr. Eddy is provided an allowance to use Companycompany aircraft for personal use. We have a written policy that sets forth guidelines and procedures regarding personal use of Companycompany aircraft. Mr. Eddy (and immediate family members traveling with him) may use our Companycompany aircraft for up to $200,000 per calendar year of personal flight time. We do not reimburse for taxes relating to any imputed income for his personal travel and the personal travel of his family members when they are accompanying him. For fiscal year 2021,2023, the aggregate incremental cost of Mr. Eddy’s personal use of Companycompany aircraft was $48,151.$148,973. Such aggregate incremental cost of the personal use of our Companycompany aircraft reflects the marginal incremental private plane charter costs to the Companycompany and excludes any fixed contract costs.
We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices in the competitive market.
We do not view perquisites, other than the use of Companycompany aircraft as discussed above, or other personal benefits as a significant component of our executive compensation program. We view the personal use of a Companycompany aircraft to be a significant benefit that
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assists us in attracting and retaining top talent while allowing our executives to serve the
Companycompany without personal travel related distractions. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual executive officer in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment, motivation or retention purposes. All future practices with respect to perquisites or other personal benefits for our NEOs will be approved and subject to periodic review by the
Compensation Committeecompensation committee and we do not expect such perquisites to become a significant component of our compensation program.
Severance and
Changechange in
Control Benefitscontrol benefits
We have entered into employment agreements with each of our NEOs and believe that it is in the best interests of our shareholders to extend the severance benefits set forth therein to our executives to reinforce and encourage retention and focus on shareholder value creation without distraction. In determining the appropriate severance entitlements to provide our NEOs,
we looked tothe compensation committee reviewed general market trends in consultation with our compensation
consultant.consultant, Exequity. The material elements of these employment agreements are summarized below under “—
Fiscal Year 2021 Compensation for Chief Executive Officer” and “—Employment Agreements and Potential Payments Upon Termination or Change in Control.”
Executive
Stock Ownership Guidelinesstock ownership guidelines
In order to complement our compensation programs and further align the interests of our NEOs with those of our shareholders, our
Board of Directorsboard adopted
Executive Stock Ownership Guidelinesexecutive stock ownership guidelines pursuant to which (i) our
Chief Executive Officerchief executive officer is required to own equity in the
Companycompany equal to at least five times his annual base salary, (ii) each
Executive Vice Presidentexecutive vice president is required to own equity in the
Companycompany equal to at least three times his or her annual base salary and (iii) each
Senior Vice Presidentsenior vice president is required to own equity in the
Companycompany equal to at least one times his or her annual base salary. Please see the disclosure under “—Director and Executive Stock Ownership Guidelines” for more information.
Additional
InformationAnti-Hedginginformation
Anti-hedging and
Anti-Pledging Policyanti-pledging policy
None of our NEOs has engaged in any hedging transactions with respect to our common stock or pledged any of his or her shares of common stock in the
Company.company. Additionally, our
Board of Directorsboard adopted an
insider trading complianceanti-hedging and anti-pledging policy, which applies to all of our
Directors,directors, officers and certain designated employees. The policy prohibits our
Directors,directors, officers and certain designated employees from engaging in hedging or monetization transactions, such as zero-cost collars and forward sale contracts, short sales and transactions in publicly traded options, such as puts, calls and other derivatives involving our equity securities and also prohibits the pledging of the
Company’scompany’s securities as collateral to secure loans.
Clawback
PolicyWe havepolicy
In fiscal year 2023, the company amended and restated its previously adopted
a clawback policy
in accordance with the SEC’s rules and NYSE’s listing rules. The amended and restated clawback policy provides that
allowsin the
Companyevent the company is required to
recoupprepare a material financial restatement, the company shall reasonably promptly recover the amount of cash and equity incentive compensation
paid to, earnedreceived by
or granted to our executive officers during the three completed fiscal years preceding the publication of a
material financial restatement of the
Company’scompany’s financial statements
if the financial results that
are the subject of a restatement had been materially misstated due to an act of embezzlement, fraud, intentional misconduct or breach of fiduciary duty by any of our executive officers. In such circumstances, the Company may recoupexceeds the amount
of cash and equity incentive compensation that
was paid, earned or granted as a result of the incorrectly reported financial results of the Company that were the subject of the restatement thatotherwise would
not have been
paid, earned or granted, as applicable, ifreceived by the executive officer had such compensation been determined based on the
financial results of the Company set forth or reflectedrestated amounts in the
Company’smaterial financial restatement, computed without regard to any taxes paid. Our amended and restated
financial statements. Our clawback policy applies to all incentive compensation approved or awarded on or after
March 3, 2020.Modification of Equity Award Agreements
In April 2021, following the unexpected passing of Mr. Delaney, the Company reviewed its policy for the treatment of outstanding equity upon termination by reason of death or disability. In connection with this review, the Compensation Committee considered, in consultation with Exequity, data regarding prevalent market practices, including through a review of its peer group’s practices, and determined that the Company’s then current treatment of equity upon death or disability was less favorable than typical market practices. Accordingly, the Compensation Committee determined to modify Mr. Delaney’s awards, and to amend all other outstanding equity award agreements, to provide for, upon termination due to death or disability, as applicable: (i) full vesting of all time-based awards, including restricted stock awards and stock options, (ii) pro-rata vesting of all performance-based awards, including performance share units, based on actual performance as of the end of the applicable performance period, pro-rated based on the period of employment during the applicable performance period, and (iii) the extension of the post-termination exercise window for vested stock options from 90 days to three years. For Mr. Delaney’s estate, these modifications were subject to execution of a release of claims in favor of the Company. In adjusting the treatment of outstanding equity upon termination by reason of death or disability, and modifying Mr. Delaney’s awards, the Compensation Committee intended to position the Company competitively with the market in order to better attract and retain equity-eligible employees and executives as well as to provide a post-termination exercise window that is sufficient to allow for the settlement of outstanding options prior to any court proceedings that may be required with respect to the award recipient’s estate.
Compensation of Mr. Delaney
Mr. Delaney’s annual base salary during fiscal year 2021 was $1,230,000 and his target annual cash incentive award was $1,845,000, which was structured in the same manner as the target annual cash incentive awards for our NEOs. In addition, prior to his passing, Mr. Delaney received long-term incentive awards with a target value of $7,125,000, which were comprised of performance share units (with respect to 50% of the target value) and restricted stock (with respect to 50% of the target value) structured in the same manner as the awards received by our NEOs. Mr. Delaney’s base salary, target annual cash incentive award and target long-term incentive awards for fiscal year 2021 were determined based on the same considerations as those for the same type of compensation received by our NEOs for fiscal year 2021. Mr. Delaney’s salary earned through April 8, 2021 was paid to his estate. Mr. Delaney was not eligible to receive his full annual cash incentive award as his employment with the Company ceased during 2021. Mr. Delaney received a pro-rated annual cash incentive award through April 8, 2021.
In connection with Mr. Delaney’s passing, the Compensation Committee approved the modifications to his outstanding equity awards as described above under “—Compensation Discussion and Analysis—Modification of Equity Award Agreements,” which resulted in the accelerated vesting of 202,731 shares of restricted stock and 74,060 stock options with a weighted average exercise price of $20.89 that had been previously granted. As a result of these modifications, his estate also retained the right to earn up to 135,257 performance share unit awards that were originally granted in fiscal year 2020, and 4,921 performance share unit awards that were originally granted in fiscal year 2021, each of which represent a pro rata portion of the performance share unit awards originally granted prorated based on that portion of the performance period for each award during which Mr. Delaney was employed by us. No changes were made to the performance-based vesting criteria of these awards and, as a result, the percentage of the pro rata portion of these performance share units that will be earned, if any, will be determined in the same manner and using the same performance criteria as were originally established for the performance share units. These modifications resulted in an aggregate increase in the incremental fair value of those awards for accounting purposes of approximately $17,500,000.
Tax and Accounting Considerations
accounting considerations
Section 162(m) of the Internal Revenue Code
Generally, Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), disallows a tax deduction to any publicly-heldpublicly held corporation for any individual remuneration in excess of $1 million paid in any taxable year to certain “covered employees.” We expect to be eligible for transition relief from
Our compensation committee believes that our shareholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expense. Therefore, the
Section 162(m) deduction limitation that should generally extend until our 2022 Annual Meeting of Shareholders.To the extent that this transition relief expires or is otherwise unavailable, we expect that the Compensation Committee will consider the potential future effects of Section 162(m) on the deductibility of executive compensation paid to our NEOs. As such, in approving the amount and form of compensation for our NEOs in the future, the Compensation Committee will consider all elements of the cost to us of providing such compensation, including the potential impact of Section 162(m). In appropriate circumstances, however, the Compensation Committeecommittee may implement programs that recognize a full range of criteria important to our success and to ensure that our executive officers are compensated in a manner consistent with our best interests and those of our shareholders, even where the compensation paid under such programs may not be deductible under Section 162(m) of the Internal Revenue Code.
Section 280G of the Internal Revenue Code
Section 280G of the Internal Revenue Code of 1986 (the “Internal Revenue Code”) disallows a tax deduction with respect to excess parachute payments to certain executives of companies which undergo a change in control. In addition, Section 4999 of the Internal Revenue Code imposes a 20% penalty on the individual receiving the excess payment. Parachute payments are compensation that is linked to or triggered by a change in control and may include, but are not limited to, bonusincentive payments, severance payments,
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certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans including stock options and other equity-based compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Section 280G based on the executive’s prior compensation. In approving the compensation arrangements for our NEOs in the future, the
Compensation Committeecompensation committee will consider all elements of the cost to the
Companycompany of providing such compensation, including the potential impact of Section 280G. However, the
Compensation Committeecompensation committee may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility under Section 280G and the imposition of excise taxes under Section 4999 when it believes that such arrangements are appropriate to attract and retain executive talent.
Section 409A of the Internal Revenue Code
Section 409A of the Internal Revenue Code requires that “non-qualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and other service providers to accelerated income tax liabilities, penalty taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees and other service providers, including our NEOs, so that they are either exempt from, or satisfy the requirements of, Section 409A.
Accounting for
Stock-Based Compensationstock-based compensation
We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, for our stock-based compensation awards. ASC Topic 718 requires companies to calculate the grant date “fair value” of their stock-based awards using a variety of assumptions. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. Grants of
stock options, restricted stock, restricted stock
units, performance share units and other equity-based awards under our equity incentive award plans will be accounted for under ASC Topic 718. The
Compensation Committeecompensation committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
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Summary Compensation Table
The table below
(“Summary Compensation Table”) sets forth the compensation earned by or paid to our NEOs for fiscal year
2021,2023, fiscal year
20202022 and fiscal year
20192021 presented in accordance with SEC rules.
Ms. Felice and Mr. Werner
werewas not
NEOsan NEO in fiscal year
2019 and fiscal year 2020. Messrs. Cichocki and Desroches were not NEOs in fiscal year 2019.| Fiscal Year | Salary (1) | Bonus | Stock Awards (2) | Option Awards (2) | Non-Equity Incentive Plan Compensation (3) | All Other Compensation (4) | Total |
Bob Eddy (5) President and Chief Executive Officer |
| 2021 | $ | 1,116,355 | $ | 466,667(6) | $ | 10,999,934 | $ | —
| $ | 3,600,000 | $ | 157,590 | $ | 16,340,546 |
| 2020 | 796,154 | —
| 2,799,968 | —
| 1,760,000 | 113,031 | 5,469,153 |
| 2019 | 767,308 | —
| 3,599,963 | 637,074 | 592,875 | 124,714 | 5,721,934 |
Laura Felice (7) Executive Vice President, Chief Financial Officer |
| 2021 | $ | 550,780 | $ | —
| $ | 1,199,873 | $ | —
| $ | 840,000 | $ | 43,275 | $ | 2,633,928 |
| 2020 | —
| —
| —
| —
| —
| —
| —
|
| 2019 | —
| —
| —
| —
| —
| —
| —
|
Paul Cichocki (8) Executive Vice President, Chief Commercial Officer |
| 2021 | $ | 829,816 | $ | —
| $ | 2,499,941 | $ | —
| $ | 1,700,000 | $ | 7,825 | $ | 5,037,582 |
| 2020 | 628,847 | 400,000(9) | 3,749,971 | 1,105,700 | 1,256,869 | 2,576 | 7,143,963 |
| 2019 | —
| —
| —
| —
| —
| —
| —
|
Jeff Desroches Executive Vice President, Chief Operations Officer |
| 2021 | $ | 591,357 | $ | 233,333(6) | $ | 1,399,997 | $ | —
| $ | 840,000 | $ | 78,084 | $ | 3,142,771 |
| 2020 | 546,154 | —
| 1,399,959 | —
| 770,000 | 78,573 | 2,794,686 |
| 2019 | —
| —
| —
| —
| —
| —
| —
|
Bill Werner Executive Vice President, Strategy & Development |
| 2021 | $ | 500,484 | $ | —
| $ | 2,599,845 | $ | —
| $ | 742,000 | $ | 69,267 | $ | 3,911,596 |
| 2020 | —
| —
| —
| —
| —
| —
| —
|
| 2019 | —
| —
| —
| —
| —
| —
| —
|
Lee Delaney Former President, Chief Executive Officer |
| 2021 | $ | 231,346(10) | $ | —
| $ | 21,275,695(11) | $ | —
| $ | —
| $ | 118,979 | $ | 21,626,020 |
| 2020 | 1,200,000 | —
| 10,999,950 | —
| 3,600,000 | 357,300 | 16,157,250 |
| 2019 | 834,615 | —
| 2,249,992 | 682,582 | 717,188 | 13,156 | 4,497,533 |
| Fiscal year | | | Salary
($)(1) | | | Bonus
($) | | | Stock
Awards
($)(2) | | | Non-equity
incentive plan
compensation
($)(3) | | | All other
Compensation
($)(4) | | | Total
($) |
Bob Eddy(5)
President and Chief Executive Officer |
| 2023 | | | 1,350,005 | | | — | | | 7,999,978 | | | 1,215,000 | | | 293,569 | | | 10,858,552 |
| 2022 | | | 1,200,014 | | | 933,333(7) | | | 6,999,976 | | | 2,844,001 | | | 271,840 | | | 12,249,164 |
| 2021 | | | 1,116,355 | | | 466,667(8) | | | 10,999,934 | | | 3,600,000 | | | 157,590 | | | 16,340,546 |
Laura Felice(10)
Executive Vice President, Chief Financial Officer |
| 2023 | | | 751,448 | | | 125,000(9) | | | 1,699,860 | | | 382,500 | | | 76,769 | | | 3,035,577 |
| 2022 | | | 660,582 | | | 62,500(6) | | | 1,499,898 | | | 746,550 | | | 62,216 | | | 3,031,746 |
| 2021 | | | 550,780 | | | — | | | 1,199,873 | | | 840,000 | | | 43,275 | | | 2,633,928 |
Paul Cichocki(11)
Executive Vice President, Chief Commercial Officer |
| 2023 | | | 908,670 | | | — | | | 2,699,876 | | | 540,000 | | | 24,183 | | | 4,172,729 |
| 2022 | | | 850,013 | | | — | | | 2,499,875 | | | 1,343,001 | | | 13,669 | | | 4,706,558 |
| 2021 | | | 829,816 | | | — | | | 2,499,941 | | | 1,700,000 | | | 7,825 | | | 5,037,582 |
Jeff Desroches
Executive Vice President, Chief Operations Officer |
| 2023 | | | 658,176 | | | — | | | 1,499,948 | | | 292,500 | | | 91,004 | | | 2,541,628 |
| 2022 | | | 620,211 | | | 466,667(7) | | | 1,399,941 | | | 691,250 | | | 90,675 | | | 3,268,744 |
| 2021 | | | 591,357 | | | 233,333(8) | | | 1,399,997 | | | 840,000 | | | 78,084 | | | 3,142,771 |
Bill Werner(12)
Executive Vice President, Strategy and Development |
| 2023 | | | 579,850 | | | 125,000(9) | | | 1,299,884 | | | 258,750 | | | 73,963 | | | 2,337,447 |
| 2022 | | | 534,007 | | | 62,500(6) | | | 1,099,934 | | | 596,183 | | | 74,802 | | | 2,367,426 |
| 2021 | | | 500,484 | | | — | | | 2,599,845 | | | 742,000 | | | 69,267 | | | 3,911,596 |
(1)
| This amount reflects salary earned during the fiscal year, including any salary adjustments made during the fiscal year. Fiscal year 2023 was 53 weeks long. |
(2)
| Amounts set forth in the Stock Awards and Option Awards columnsawards column represent the aggregate grant date fair value of awards granted in the respective fiscal year computed in accordance with ASC Topic 718. Please see “—Compensation Discussion and Analysis—Tax and Accounting Considerations—Accounting for Stock-Based Compensation” for further information regarding the calculation of these awards. The assumptions made calculating the grant date fair value of the option awards granted in each respective year are found in Note 9 (Stock Incentive Plans) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended January 29, 2022. The grant date fair value of the restricted stock awards granted during each respective year was calculated as the closing price per share of our common stock on the NYSE on the applicable date of grant multiplied by the number of shares granted. The grant date fair value of PSUs is reported based on the probable outcome of the performance conditions (target) on the grant date. Assuming performance at the maximum (200%) payout level, the value of PSUs granted in fiscal 2021year 2023 was: Mr. Eddy, $15,999,927;$7,999,978; Ms. Felice, $824,893;$1,699,860; Mr. Cichocki, $2,499,941;$2,699,876; Mr. Desroches, $1,399,997;$1,499,948; and Mr. Werner, $3,124,830; and Mr. Delaney $437,477.$1,299,884. The value of the options, restricted stock awards and performance stock units granted to our NEOs for fiscal year 20212023 is reflected in the Fiscal Year 20212023 Grants of Plan-Based Awardsplan-based awards table below. |
(3)
| Amounts reported reflect annual cash incentive awards earned by our NEO’sNEOs pursuant to our Annual Incentive Plan related to the respective year’s performance, which was paid in March of the following year. Please see “—Compensation Discussion and Analysis—Annual Incentive Plan Awards” for further information regarding the Annual Incentive Plan and our annual cash incentive awards. |
(4)
| All Other Compensationother compensation for fiscal year 20212023 has been further explained in the table below. |
(5)
| During fiscal year 2020, Mr. Eddy served as our Executive Vice President, Chief Financialexecutive vice president, chief financial officer and Administrative Officeradministrative officer and as our principal financial officer. He was appointed as Presidentpresident and Chief Executive Officerchief executive officer on April 19, 2021. |
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(6)
| This amount reflects a cash transition award granted in fiscal year 2021.2021 and paid in fiscal year 2022. Please see ““—“—Compensation Discussion and Analysis—Long-TermAnalysis – Long Term Incentive Awards” for further information regarding cash transition awards. |
(7)
| This amount reflects a cash transition award granted in fiscal year 2020 and paid in fiscal year 2022. Please see “—Compensation Discussion and Analysis – Long Term Incentive Awards” for further information regarding cash transition awards. |
(8)
| This amount reflects a cash transition award granted in fiscal year 2020 and paid in fiscal year 2021. Please see “—Compensation Discussion and Analysis – Long Term Incentive Awards” for further information regarding cash transition awards. |
(9)
| This amount reflects a cash transition award granted in fiscal year 2021 and paid in fiscal year 2023. Please see “—Compensation Discussion and Analysis – Long Term Incentive Awards” for further information regarding cash transition awards. |
(10)
| Ms. Felice was appointed as Executive Vice President, Chief Financial Officerexecutive vice president, chief financial officer on April 19,18, 2021 and as our principal financial officer. |
(8)(11)
| Mr. Cichocki was appointed as the Company’s Executive Vice President, Membership, Analyticsexecutive vice president, membership, analytics and Business Transformationbusiness transformation effective April 1, 2020. On April 19,18, 2021, he was appointed as the Company’s Executive Vice President, Chief Commercial Officer.executive vice president, chief commercial officer. |
(9)(12)
| This amount reflects a one-time sign on cash bonus paid to Mr. Cichocki as set forth in his employment agreement. |
(10) | Represents base salary earned as PresidentWerner was appointed executive vice president, strategy and Chief Executive Officer prior to Mr. Delaney’s passingdevelopment on April 8,18, 2021. |
(11) | In connection with Mr. Delaney’s passing, the Compensation Committee approved the modification of his outstanding equity awards as described under “—Compensation Discussion and Analysis—Modification of Equity Award Agreements and “—Compensation Discussion and Analysis—Compensation of Mr. Delaney.” Accordingly, the amounts set forth in the Stock Awards column for 2021 for Mr. Delaney include approximately $17,500,000, representing the incremental fair value (calculated pursuant to FASB ASC Topic 718) relating to the modification of these awards. The assumptions made in calculating the grant date fair value of the modification of these equity awards are found in Note [10] (Stock Incentive Plan) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended January 29, 2022. The grant date fair value attributable to the modification of the performance share unit awards is reported based on the probable outcome of the performance conditions on the date of the modification. Assuming performance at the maximum, the grant date fair value attributable to the modification of these awards would have been approximately $12,200,000. |
All Other Compensationother compensation for Fiscal Year 2021
| Name | Executive Retirement Plan Company Contributions (1) | Tax Gross Ups (2) | Employer 401(k) Matching Contributions (3) | Financial Planning | Executive Life Insurance Contributions | Other (4) | Total |
| Bob Eddy | $ | 41,237 | $ | 30,480 | $ | 4,506 | $ | —
| $ | 7,323 | $ | 74,044 | $ | 157,590 |
| Laura Felice | 18,557 | 13,716 | 8,239 | —
| 975 | 1,788 | 43,275 |
| Paul Cichocki | —
| —
| —
| —
| 3,531 | 4,295 | 7,826 |
| Jeff Desroches | 28,351 | 20,955 | 5,666 | —
| 4,738 | 18,375 | 78,085 |
| Bill Werner | 19,845 | 14,668 | 8,004 | —
| 2,263 | 24,486 | 69,266 |
| Lee Delaney | 61,856 | 45,720 | 8,481 | —
| 1,327 | 1,596 | 118,980 |
| Name | | | Executive
Retirement
Plan
company
contributions
($)(1) | | | Tax
gross
ups
($)(2) | | | Employer
401(k)
matching
contributions
($)(3) | | | Executive life
insurance
contributions
($) | | | Other
($)(4) | | | Total
($) |
| Bob Eddy | | | 61,856 | | | 53,762 | | | 9,900 | | | 10,093 | | | 157,958 | | | 293,569 |
| Laura Felice | | | 34,794 | | | 30,241 | | | 9,900 | | | 1,834 | | | — | | | 76,769 |
| Paul Cichocki | | | — | | | — | | | 9,900(5) | | | 5,298 | | | 8,985 | | | 24,183 |
| Jeff Desroches | | | 32,217 | | | 28,002 | | | 9,900 | | | 5,216 | | | 15,669 | | | 91,004 |
| Bill Werner | | | 27,786 | | | 24,150 | | | 9,900 | | | 3,145 | | | 8,982 | | | 73,963 |
(1)
| We contributecontributed to the Executive Retirement Plan for certain of our NEOs. This amount reflects the Companycompany contribution to the Executive Retirement Plan. Under the Executive Retirement Plan, we fundfunded annual retirement contributions of a certain percentage of the designated participant's base salary in contribution accounts, in which participants become vested after four fiscal years of service. As noted previously, the Executive Retirement Plan was terminated in April 2023. |
(2)
| Amounts reflect tax gross-ups provided under our Executive Retirement Plan. |
(3)
| Our 401(k) plan provides for Companycompany matching contributions of 50% of the first 6% of an employee’s covered compensation. Company matching contributions vest ratably over an employee’s first four years of employment. |
(4)
| Amounts include use of a private plane (for Mr. Eddy in the amount of $48,151)$148,973), car allowance (for Messrs. Eddy,Mr. Desroches and Werner in the amount of $15,374 each)$15,669), tax preparation services, installation, service and monitoring costs of security alarms,financial planning services, estate planning services, and other immaterial miscellaneous income. Though we do not considerA family member of an NEO may, on occasion, accompany an NEO on a private plane being used for business travel; there is no aggregate incremental cost associated with such family member travel. |
(5)
| Amount reflects full employer 401(k) contribution, of which $7,425 was vested in fiscal year 2023. The remainder will vest after Mr. Cichocki completes four years of credited service. If the security costsemployment of Mr. Cichocki is terminated prior to be personal benefits since these costs arise fromachieving four years of credited service, he will forfeit any unvested employer contributions made under the nature of the employee’s employment by the Company, the disclosure regulations require certain security costs to be reported as personal benefits.plan. |
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Grants of
Plan-Based Awards in Fiscal Year 2021plan-based awards for fiscal year 2023
The following table sets forth information regarding grants of plan-based awards made to our NEOs during fiscal year
2021:
| Name | Grant Date | Estimated Possible Payouts Under Non-equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards (2) |
| Threshold | Target | Maximum | Threshold | Target | Maximum |
| Bob Eddy (4) | | $ | —
| $ | 1,800,000 | $ | 3,600,000 | —
| —
| —
| —
| —
| $ | —
| $ | —
|
| | 4/01/2021 | —
| —
| —
| —
| —
| —
| 31,496 (3) | —
| —
| 1,399,997 |
| | 4/01/2021 | —
| —
| —
| 15,748 | 31,496 | 62,992 (7) | —
| —
| —
| 1,399,997 |
| | 4/20/2021 | —
| —
| —
| —
| —
| —
| 36,330 (5) | —
| —
| 1,599,973 |
| | 4/20/2021 | —
| —
| —
| 18,165 | 36,330 | 72,660 (8) | —
| —
| —
| 1,599,973 |
| | 4/20/2021 | —
| —
| —
| 56,767 | 113,533 | 227,066 (9) | —
| —
| —
| 4,999,993 |
| Laura Felice (4) | | —
| 420,000 | 840,000 | —
| —
| —
| —
| —
| —
| —
|
| | 4/01/2021 | —
| —
| —
| —
| —
| —
| 12,654 (3) | —
| —
| 562,470 |
| | 4/01/2021 | —
| —
| —
| 2,109 | 4,218 | 8,436 (7) | —
| —
| —
| 187,490 |
| | 4/20/2021 | —
| — | —
| —
| —
| —
| 5,108 (5) | —
| —
| 224,956 |
| | 4/20/2021 | —
| —
| —
| 2,554 | 5,108 | 10,216 (8) | —
| —
| —
| 224,956 |
| Paul Cichocki (4) | | —
| 850,000 | 1,700,000 | —
| —
| —
| —
| —
| —
| —
|
| | 4/01/2021 | —
| —
| —
| —
| —
| —
| 25,309 (3) | —
| —
| 1,124,985 |
| | 4/01/2021 | —
| —
| —
| 12,655 | 25,309 | 50,618 (7) | —
| —
| —
| 1,124,985 |
| | 4/20/2021 | —
| —
| —
| —
| —
| —
| 2,838 (5) | —
| —
| 124,986 |
| | 4/20/2021 | —
| —
| —
| 1,419 | 2,838 | 5,676 (8) | —
| —
| —
| 124,986 |
| Jeff Desroches | | —
| 420,000 | 840,000 | —
| —
| —
| —
| —
| —
| —
|
| | 4/01/2021 | —
| —
| —
| —
| —
| —
| 15,748 (3) | —
| —
| 699,999 |
| | 4/01/2021 | —
| — | —
| 7,874 | 15,748 | 31,496 (7) | —
| —
| —
| 699,999 |
| Bill Werner (4) | | —
| 371,000 | 742,000 | —
| —
| —
| —
| —
| —
| —
|
| | 4/01/2021 | —
| —
| —
| —
| —
| —
| 12,654 (3) | —
| —
| 562,470 |
| | 4/01/2021 | —
| —
| —
| 2,109 | 4,218 | 8,436 (7) | —
| —
| —
| 187,490 |
| | 4/20/2021 | —
| —
| —
| —
| —
| —
| 3,973 (5) | —
| —
| 174,971 |
| | 4/20/2021 | —
| —
| —
| 1,987 | 3,973 | 7,946 (8) | —
| —
| —
| 174,971 |
| | 9/27/2021 | —
| —
| —
| —
| —
| —
| 5,174 (6) | —
| —
| 299,989 |
| | 9/27/2021 | —
| —
| —
| 10,348 | 20,696 | 41,392 (10) | —
| —
| —
| 1,199,954 |
| Lee Delaney | | —
| 344,670 | 689,340 | —
| —
| —
| —
| —
| —
| —
|
| | 4/01/2021 | —
| —
| —
| —
| —
| —
| 80,146 (3) | —
| —
| 3,562,490 |
| | 4/01/2021 | —
| —
| —
| 2,461 | 4,921 | 9,842 (7) | —
| —
| —
| 218,738 |
| Name | | | Grant
date | | | Estimated future
payouts under
non-equity incentive
plan awards(1) | | | Estimated future
payouts under equity
incentive
plan awards | | | All other
stock
awards:
number of
shares of
stock or
units(3)
(#) | | | Grant date
fair value of
stock and
options
awards(2) |
| | | | | | | | | | | | | | | | | | |
| | Threshold
($) | | | Target
($) | | | Maximum
($) | | | Threshold
(#) | | | Target(4)
(#) | | | Maximum
(#) | |
| Bob Eddy | | | | | | — | | | 2,025,000 | | | 4,050,000 | | | — | | | — | | | — | | | — | | | — |
| | | | 4/1/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 52,583 | | | 3,999,989 |
| | | 4/1/2023 | | | — | | | — | | | — | | | 0 | | | 52,583 | | | 105,166 | | | — | | | 3,999,989 |
| Laura Felice | | | | | | — | | | 637,500 | | | 1,275,000 | | | — | | | — | | | — | | | — | | | — |
| | | 4/1/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 11,173 | | | 849,930 |
| | | | 4/1/2023 | | | — | | | — | | | — | | | 0 | | | 11,173 | | | 22,346 | | | — | | | 849,930 |
| Paul Cichocki | | | | | | — | | | 900,000 | | | 1,800,000 | | | — | | | — | | | — | | | — | | | — |
| | | | 4/1/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 17,746 | | | 1,349,938 |
| | | 4/1/2023 | | | — | | | — | | | — | | | 0 | | | 17,746 | | | 35,492 | | | — | | | 1,349,938 |
| Jeff Desroches | | | | | | — | | | 487,500 | | | 975,000 | | | — | | | — | | | — | | | — | | | — |
| | | 4/1/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 9,859 | | | 749,974 |
| | | | 4/1/2023 | | | — | | | — | | | — | | | 0 | | | 9,859 | | | 19,718 | | | — | | | 749,974 |
| Bill Werner | | | | | | — | | | 431,250 | | | 862,500 | | | — | | | — | | | — | | | — | | | — |
| | | | 4/1/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 8,544 | | | 649,942 |
| | | 4/1/2023 | | | — | | | — | | | — | | | 0 | | | 8,544 | | | 17,088 | | | — | | | 649,942 |
(1)
| Reflects the possible payouts of annual cash incentive compensation pursuant to the Annual Incentive Plan. The actual amounts that were paid are set forth in the "Non-Equity Incentive Plan Compensation"“Non-equity incentive plan compensation” column of the Summary Compensation Table above. See also, "—“—Compensation Discussion and Analysis—Annual Incentive Plan Awards"Awards”. |
(2)
| Amounts represent the grant date fair value of each award granted in fiscal year 20212023 computed in accordance with ASC Topic 718. Please see "—“—Compensation Discussion and Analysis—Tax and Accounting Considerations—Accounting for Stock-Based Compensation"Compensation” for further information regarding the calculation of these awards. |
(3)
| Represents shares of restricted stock granted as incentive compensation for fiscal year 2021.2023. The shares granted to the NEOs are subject to vesting in equal installments on each of April 1, 2022, 20232024, 2025 and 2024,2026, subject to continued employment through such dates. |
| (4) | On April 19, 2021, Mr. Eddy was appointed as the Company’s President and Chief Executive Officer of the Company; Ms. Felice was appointed as the Company’s Executive Vice President, Chief Financial Officer, Mr. Cichocki was appointed as the Company’s Executive Vice President, Chief Commercial Officer and Mr. Werner was appointed as the Company’s Executive Vice President, Strategy and Development. |
(5) | Represents shares of restricted stock granted in connection with the April 19, 2021 promotions of Mr. Eddy, Ms. Felice and Mes0srs. Cichocki, and Werner. |
(6) | Represents shares of restricted stock granted to Mr. Werner for his leadership on the Company’s Co-Brand Initiative. |
(7)
| Represents performance share units granted as incentive compensation for fiscal year 2021.2023. The performance share units granted to the NEOs are earned based on performance-based vesting hurdles, which are based on the achievement of cumulative adjusted EPS growth during fiscal years 2021, 20222023, 2024 and 2023,2025, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. |
(8)
| Represents performance share units granted in connection with the April 19, 2021 promotions of Mr. Eddy, Ms. Felice and Messrs. Cichocki and Werner. The performance share units granted are earned based on performance-based vesting hurdles, which are based on the achievement of cumulative adjusted EPS growth during fiscal years 2021, 2022 and 2023, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. |
(9) | Mr. Eddy received a second performance share unit grant in connection with his April 19, 2021 promotion to President and Chief Executive Officer. The performance share units granted are earned based on performance-based vesting hurdles, which are based on the achievement of cumulative adjusted EPS growth during fiscal years 2021, 2022 and 2023, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. |
(10) | Represents performance share units granted to Mr. Werner in connection with his leadership on the Company’s Co-Brand Initiative. Please see the “Promotion Awards” section above for further information regarding this award. |
Narrative Disclosuredisclosure to Summary Compensation Table and Grantsgrants of Plan-Based Awards Table
plan-based awards table
Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and
Fiscal Year 2021 Grantsgrants of
Plan-Based Awardsplan-based awards table
for fiscal year 2023 was paid or awarded, are described above under
"—“—Compensation Discussion and Analysis.
"”
In fiscal year
2021,2023, we granted restricted stock awards and performance share unit awards to each of our NEOs.
Additional awards of restricted stock and performance share units were granted to Mr. Eddy, Ms. Felice and Messrs. Cichocki and Werner in connection with their respective promotions on April 19, 2021. Mr. Werner also received an additional grant of performance share units for his leadership on the Company’s Co-Brand Initiative. All awards were granted pursuant to the 2018 Plan, as described
above in the
Fiscal Year 2021 Grantsgrants of
Plan-Based Awards table.plan-based awards table for fiscal year 2023. The vesting of each award is subject to acceleration and post-termination exercisability in connection with the death or disability of the NEO as
described above under “—Compensation Discussion and Analysis—Modification of Equity Award Agreements,” as well as certain termination triggering events described below under
“—“—Employment Agreements and Potential Payments Upon Termination or Change in Control.” To the extent we pay dividends in the future, dividends otherwise payable with respect to unvested shares of restricted stock will be retained by us and will only be paid if and when the underlying shares of restricted stock vest.
The terms of the employment agreements that we have entered into with our NEOs are described below under
“—“—Employment Agreements and Potential Payments Upon Termination or Change in Control.”
32
TABLE OF CONTENTS
Outstanding
Equity Awardsequity awards at
Fiscal Year-Endfiscal 2023 year-end
The following table sets forth certain information with respect to outstanding equity incentive plan awards held by our NEOs as of
January 29, 2022:
| Name | Options Awards | Stock Awards |
Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested (1) | Number of Unearned Shares, Units or Other Rights That Have Not Vested | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (1) |
| Bob Eddy | 525,000 | —
| $ | 17.00 | 6/27/2028 | 25,372 (5) | $ | 1,469,799 | 111,686 (12) | $3,234,984 |
| 50,742 | 25,372 (2) | 27.59 | 4/01/2029 | 27,891(6) | 1,615,725 | 31,496 (13) | 1,824,563 |
—
| —
| —
| —
| 37,229 (8) | 2,156,675 | 36,330 (14) | 2,104,596 |
—
| —
| —
| —
| 31,496 (9) | 1,824,563 | 113,533 (14) | 6,576,966 |
—
| —
| —
| —
| 36,330 (10) | 2,104,596 | —
| —
|
| Laura Felice | 39,141 | —
| 7.00 | 12/08/2026 | 6,797 (5) | 393,750 | 4,218 (13) | 244,348 |
| 70,315 | —
| 17.00 | 6/27/2028 | 14,958 (8) | 866,516 | 5,108 (15) | 295,906 |
| 13,590 | 6,797 (2) | 27.59 | 4/01/2029 | 12,654 (9) | 733,046 | —
| —
|
| 7,479 | 14,958 (3) | 25.07 | 4/01/2030 | 5,108 (10) | 295,906 | —
| —
|
| Paul Cichocki | 89,748 | 89,749 (4) | 25.07 | 4/01/2030 | 29,916 (7) | 1,733,033 | 89,748 (12) | 2,599,550 |
—
| —
| —
| —
| 29,916 (8) | 1,733,033 | 25,309 (13) | 1,466,150 |
—
| —
| —
| —
| 25,309 (9) | 1,466,150 | 2,838 (15) | 164,405 |
—
| —
| —
| —
| 2,838 (10) | 164,405 | —
| —
|
| | 103,250 | —
| 17.00 | 6/27/2028 | 12,687 (5) | 734,957 | 155,842 (12) | 1,617,463 |
| Jeff Desroches | 25,370 | 12,687 (2) | 27.59 | 4/01/2029 | 18,614 (8) | 1,078,309 | 15,748 (13) | 912,281 |
| | —
| —
| —
| —
| 15,748 (9) | 912,281 | —
| —
|
| Bill Werner | 70,315 | —
| 17.00 | 6/27/2028 | 6,797 (5) | 393,750 | 4,218 (13) | 244,348 |
| 13,590 | 6,797 (2) | 27.59 | 4/01/2029 | 14,958 (8) | 866,516 | 3,973 (15) | 230,155 |
| 7,479 | 14,958 (3) | 25.07 | 4/01/2030 | 12,654 (9) | 733,046 | 20,696 (16) | 1,198,919 |
—
| —
| —
| —
| 3,973 (10) | 230,155 | —
| —
|
—
| —
| —
| —
| 5,174 (11) | 299,729 | —
| —
|
| Lee Delaney | —
| —
| —
| —
| —
| —
| 87,984(17) | 5,091,699 |
—
| —
| —
| —
| —
| —
| 47,273(17) | 2,738,525 |
—
| —
| —
| —
| —
| —
| 4,921(17) | 285,074 |
February 3, 2024:
| | | Options awards | | | Stock awards |
| Name | | | Number of
securities
underlying
unexercised
options (#)
exercisable | | | Option
exercise
price
($) | | | Option
expiration
date | | | Number
of
shares or
units of
stock that
have not
vested (#) | | | Market
value of
shares or
units of
stock that
have not
vested #(1) | | | Equity
incentive
plan awards:
number of
unearned
shares,
units or
other
rights that
have not
vested (#) | | | Equity
incentive
plan awards:
market or
payout value
of unearned
shares,
units
or other
rights that
have not
vested
($)(1) |
| Bob Eddy | | | 525,000 | | | 17.00 | | | 6/27/2028 | | | 10,500(2) | | | 677,355 | | | 62,992(6) | | | 4,063,614 |
| | 76,114 | | | 27.59 | | | 4/1/2029 | | | 12,110(3) | | | 781,216 | | | 72,660(7) | | | 4,687,297 |
| | — | | | — | | | — | | | 34,502(4) | | | 2,225,724 | | | 227,066(8) | | | 14,648,028 |
| | — | | | — | | | — | | | 52,583(5) | | | 3,392,129 | | | 103,504(10) | | | 6,677,043 |
| | — | | | — | | | — | | | | | | — | | | 52,583(11) | | | 3,392,129 |
| Laura Felice | | | 19,141 | | | 7.00 | | | 12/8/2026 | | | 4,218(2) | | | 272,103 | | | 8,436(6) | | | 544,206 |
| | 70,315 | | | 17.00 | | | 6/27/2028 | | | 1,704(3) | | | 109,925 | | | 10,216(9) | | | 659,034 |
| | 20,387 | | | 27.59 | | | 4/1/2029 | | | 7,393(4) | | | 476,922 | | | 22,178(10) | | | 1,430,703 |
| | 22,437 | | | 25.07 | | | 4/1/2030 | | | 11,173(5) | | | 720,770 | | | 11,173(11) | | | 720,770 |
| Paul Cichocki | | | 179,497 | | | 25.07 | | | 4/1/2030 | | | 8,437(2) | | | 544,271 | | | 50,618(6) | | | 3,265,367 |
| | — | | | — | | | — | | | 946(3) | | | 61,026 | | | 5,676(9) | | | 366,159 |
| | — | | | — | | | — | | | 12,322(4) | | | 794,892 | | | 36,964(10) | | | 2,384,548 |
| | — | | | — | | | — | | | 17,746(5) | | | 1,144,794 | | | 17,746(11) | | | 1,144,794 |
| | | 103,250 | | | 17.00 | | | 6/27/2028 | | | 5,250(2) | | | 338,678 | | | 31,496(6) | | | 2,031,807 |
| Jeff Desroches | |
| | 38,057 | | | 27.59 | | | 4/1/2029 | | | 6,900(4) | | | 445,119 | | | 20,700(10) | | | 1,335,357 |
| | — | | | — | | | — | | | 9,859(5) | | | 636,004 | | | 9,859(11) | | | 636,004 |
| Bill Werner | | | 70,315 | | | 17.00 | | | 6/27/2028 | | | 4,218(2) | | | 272,103 | | | 8,436(6) | | | 544,206 |
| | 20,387 | | | 27.59 | | | 4/1/2029 | | | 1,325(3) | | | 85,476 | | | 7,946(9) | | | 512,596 |
| | 22,437 | | | 25.07 | | | 4/1/2030 | | | 5,422(4) | | | 349,773 | | | 16,264(10) | | | 1,049,191 |
| | — | | | — | | | — | | | 8,544(5) | | | 551,173 | | | 8,544(11) | | | 551,173 |
| | — | | | — | | | — | | | 1,726(12) | | | 111,344 | | | 20,696(13) | | | 1,335,099 |
(1)
| Market values reflect the closing price of our common stock on the NYSE on January 28, 2022February 2, 2024 (the last business day of fiscal year 2021)2023), which was $57.93.$64.51. |
| (2) | Represents unexercisable portion of option awards granted for fiscal year 2019, with one-third having vested and become exercisable on each of April 1, 2020 and 2021 and one-third scheduled to vest and become exercisable on April 1, 2022, subject to continued employment with us through such dates. |
(3) | Represents unexercisable portion of option awards granted for fiscal year 2020, with one-third having vested and become exercisable on April 1, 2021 and one-third scheduled to vest and become exercisable on each of April 1, 2022 and 2023, subject to continued employment with us through such dates. |
(4) | Represents unvested portion of options granted in connection with Mr. Cichocki’s commencement of employment with one-half having vested and become exercisable on April 1, 2021 and one-half scheduled to vest and become exercisable on April 1, 2022, subjected to continued employment with us through such dates. |
(5) | Represents unvested portion of restricted stock awards granted for fiscal year 2019, with one-third having vested on each of April 1, 2020 and 2021 and one-third scheduled to vest on April 1, 2022, subject to continued employment with us through such dates. |
(6) | Represents unvested portion of restricted stock awards granted for as a retention bonus, with one-half having vested on September 16, 2021 and one-half scheduled to vest on September 16, 2022, subject to continued employment with us through such dates. |
(7) | Represents unvested portion of restricted stock award granted in connection with Mr. Cichocki’s commencement of employment with one-half having vested on April 1, 2021 and one-half scheduled to vest on April 1, 2022, subject to continued employment with us through such dates. |
(8) | Represents unvested portion of restricted stock awards granted for fiscal year 2020, with one-third having vested on April 1, 2021 and one-third scheduled to vest on each of April 1, 2022 and 2023, subject to continued employment with us through such dates. |
(9)
| Represents unvested portion of restricted stock awards granted for fiscal year 2021, with one-third scheduled to vesthaving vested on each of April 1, 2022 and 2023 and one-third scheduled to vest on April 1, 2024, subject to continued employment with us through such dates. |
(10)(3)
| Represents unvested portion of restricted stock awards granted in connection with promotions for Mr. Eddy to president and chief executive officer; Ms. Felice to executive vice president, chief financial officer; Mr. Cichocki to executive vice president, chief commercial officer; and Mr. Werner to executive vice president, strategy and development, with one-third having vested on each of April 1, 2022 and 2023 and one-third scheduled to vest on April 1, 2024, subject to continued employment with us through such dates. |
(4)
| Represents unvested portion of restricted stock award granted in connectionfor fiscal year 2022, with promotionsone-third having vested on April 1, 2023 and one-third scheduled to vest on each of April 1, 2024 and 2025, subject to continued employment with us through such dates. |
(5)
| Represents unvested portion of restricted stock award granted for Mr. Eddy to President and Chief Executive Officer; Ms. Felice to Executive Vice President, Chief Financial Officer; Mr. Cichocki to Executive Vice President, Chief Commercial Officer; and Mr. Werner to Executive Vice President, Strategy and Development,fiscal year 2023, with one-third scheduled to vest on each of April 1, 2022, 20232024, 2025 and 2024,2026, subject to continued employment with us through such dates. |
(11) | Represents unexercisable portion of option awards granted for fiscal year 2019, with one-third having vested and become exercisable on each of April 1, 2020 and 2021 and one-third scheduled to vest and become exercisable on April 1, 2022, subject to continued employment with us through such dates. |
(12) | Represents performance share units granted in fiscal year 2020, which provided our NEOs the ability to earn and receive shares of common stock equal to between 50% and 200% of the number of performance share units subject to the award after the end of the three-year performance period that began on February 2, 2020 to January 28, 2023, based on the achievement of cumulative adjusted EPS growth over such performance period, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. Assuming our relative performance for the three-year performance period through the end of fiscal year 2021, these awards would have been earned at a level of maximum performance. In accordance with SEC rules, these awards are reflected in the table as maximum performance (i.e., 200% of the target amount). |
(13)(6)
| Represents performance share units granted in fiscal year 2021, which provided our NEOs the ability to earn and receive shares of common stock equal to between 50% and 200% of the number of performance share units subject to the award after the end of the three-year performance period that began on January 30, 2021 to February 3, 2024, based on the achievement of cumulative adjusted EPS growth over such performance period, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. Assuming our relative performance for the three-year performance period through the end of fiscal year 2021,2023, these awards would have been earned at a level of maximum performance.performance, i.e., 200% of the target amount. In accordance with SEC rules, these awards are reflected in the table as maximum performance (i.e., 200% of the target amount). |
TABLE OF CONTENTS
(7)
| Represents performance share units granted to Mr. Eddy in connection with his promotion to Presidentpresident and Chief Executive Officerchief executive officer of the Company, effective April 19,company, which provided Mr. Eddy with the ability to earn and receive shares of common stock equal to between 50% and 200% of the number of performance share units subject to the award after the end of the three-year performance period that began on January 30, 2021 to February 3, 2024, based on the achievement of cumulative adjusted EPS growth over such performance period, with the shares earned, if any. Assuming our relative performance for the three-year performance period through the end of fiscal year 2023, these awards would have been earned at a level of maximum performance, i.e., 200% of the target amount. In accordance with SEC rules, these awards are reflected in the table as maximum performance (i.e., 200% of the target amount). |
(8)
| Represents performance share units granted to Mr. Eddy in connection with his promotion to president and chief executive officer of the company, which provided Mr. Eddy with the ability to earn and receive shares of common stock equal to between 50% and 200% of the number of performance share units subject to the award after the end of the three-year performance period that began on January 30, 2021 to February 3, 2024, based on the achievement of cumulative adjusted EPS growth over such performance period, with the shares earned, if any, also subject to vesting based on continued employment, with one-third of the number of performance share units earned based on the achievement of the performance-basedperformance based vesting hurdles vesting at the end of the fiscal yearsyear ending in 2024, 2025in2024, one-third vesting at the first anniversary of the grant date, and 2026,one-third vesting on the second anniversary of the grant date, subject to continued employment through such dates. Assuming our relative performance for the three-year performance period through the end of fiscal year 2021,2023, these awards would have been earned at a level of maximum performance.performance, i.e., 200% of the target amount. In accordance with SEC rules, these awards are reflected in the table as maximum performance (i.e., 200% of the target amount). |
(15)(9)
| Represents performance share units granted in fiscal year 2021 in connection with promotions for Ms. Felice to Executive Vice President, Chief Financial Officer;executive vice president, chief financial officer; Mr. Cichocki to Executive Vice President, Chief Commercial Officer;executive vice president, chief commercial officer; and Mr. Werner to Executive Vice President, Strategyexecutive vice president, strategy and Development,development, which provided them the ability to earn and receive shares of common stock equal to between 50% and 200% of the number of performance share units subject to the award after the end of the three-year performance period that began on January 30, 2021 to February 3, 2024 based on the achievement of cumulative adjusted EPS growth over such performance period, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. Assuming our relative performance for the three-year performance period through the end of fiscal year 2021,2023, these awards would have been earned at a level of maximum performance.performance, i.e., 200% of the target amount. In accordance with SEC rules, these awards are reflected in the table as maximum performance (i.e., 200% of the target amount). |
(16)(10)
| Represents performance share units granted in fiscal year 2022, which provided our NEOs the ability to earn and receive shares of common stock equal to between 0% and 200% of the number of performance share units subject to the award after the end of the three-year performance period that began on January 30, 2022 to February 1, 2025 achievement of cumulative adjusted EPS growth over such performance period, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. Assuming our relative performance for the three-year performance period through the end of fiscal year 2022, these awards would have been earned at a level of between target and maximum performance, i.e., greater than 100%, but less than 200% of the target amount. In accordance with SEC rules, these awards are reflected in the table as maximum performance (i.e., 200% of the target amount). |
(11)
| Represents performance share units granted in fiscal year 2023, which provided our NEOs the ability to earn and receive shares of common stock equal to between 0% and 200% of the number of performance share units subject to the award after the end of the three-year performance period that began on January 29, 2023 to January 31, 2026 achievement of cumulative adjusted EPS growth over such performance period, with the shares earned, if any, also subject to vesting based on continued employment through the end of such three-year performance period. Assuming our relative performance for the three-year performance period through the end of fiscal year 2023, these awards would have been earned at a level of between threshold and target performance, i.e., greater than 0%, but less than 100% of the target amount. In accordance with SEC rules, these awards are reflected in the table as target performance (i.e., 100% of the target amount). |
(12)
| Represents a restricted stock award granted in fiscal year 2021 in connection with Mr. Werner’s leadership with the strategic evaluation of the company’s co-branded credit card program, with one-third having vested each on September 27, 2022 and September 27, 2023 and one-third scheduled to vest on September 27, 2024, subject to continued employment with us through such dates. |
(13)
| Represents performance share units granted in fiscal year 2021 in connection with Mr. Werner’s leadership with the strategic evaluation of the company’s co-branded credit card program. 50% of the performance share units may vest on each of September 27, 2025 or September 27, 2026, subject to continued employment through the Company’s Co-Brand Initiative. Please see “Promotion Awards” section above forend of the applicable performance conditions of this award. |
(17) | Awards granted to Mr. Delaney on March 12, 2020 and April 1, 2020 are currently projected to vest at 200%period and the third award granted on April 1, 2021co-brand spend during such performance period (the “performance target”). The compensation committee will determine the achievement of the performance goals within the ninety-day period following the end of the performance period. If the performance target is projectednot achieved, 50% of the applicable tranche of the performance share units may vest if the co-brand spend during the applicable performance period is at least 90% of the performance target (the “floor”) and up to 200% of the shares subject to the performance share units may vest atupon achievement of 100% of the original award amounts, respectively, butperformance target during the amountapplicable performance year (the “maximum”). Achievement of co-brand spend between the floor, performance target and maximum levels are determined by linear interpolation, provided that if co-brand spend is less than the floor, no shares under the applicable performance share unit tranche will vest. These awards are currently expensed at target and are being awards was pro-rated based on Mr. Delaney’s time of service over eachreflected in the table at target performance (i.e. 100% of the three-year periods.target amount). |
Fiscal Year 2021 TABLE OF CONTENTS
Option
Exercisesexercises and
Stock Vestedstock vested for fiscal year 2023
The following table sets forth the aggregate number of options to purchase shares of our common stock exercised by our NEOs in fiscal year
20212023 and the aggregate number of shares of restricted stock
and performance share units that vested in fiscal year
2021.2023. The value realized on exercise of options is the product of (1) fair market value of a share of our common stock on the date of exercise minus the exercise price, multiplied by (2) the number of shares of common stock underlying the exercised options. The value realized on vesting of stock awards is the product of (i) the closing price of our common stock on the NYSE on the vesting date (or, if there were no reported sales on such date, the most recent previous date on which sales were reported), multiplied by (ii) the number of shares vesting.
| | Option Awards | Stock Awards |
| Name | Number of Shares Acquired on Exercise (1) | Value Realized on Exercise | Number of Shares Acquired on Vesting (1) | Value Realized on Vesting |
Bob Eddy | —
| $ | —
| 101,044 | $4,965,017 |
| Laura Felice | —
| —
| 25,992 | 1,183,702 |
| Paul Cichocki | —
| —
| 44,874 | 1,994,649 |
| Jeff Desroches | 28,000 | 1,032,836 | 46,492 | 2,125,859 |
| Bill Werner | 25,830 | 1,280,590 | 25,992 | 1,183,702 |
| Lee Delaney | 904,929 | 37,656,090 | 269,802 | 12,144,747 |
| | | Option awards | | | Stock awards |
| Name | | | Number of
shares acquired
on exercise (#) | | | Value realized
on exercise
($) | | | Number of
shares acquired
on vesting
(#)(1) | | | Value realized
on vesting
($) |
| Bob Eddy | | | — | | | — | | | 170,159 | | | 12,943,995 |
| Laura Felice | | | 20,000 | | | 1,271,295 | | | 17,095 | | | 1,300,417 |
| Paul Cichocki | | | — | | | — | | | 120,248 | | | 9,147,265 |
| Jeff Desroches | | | — | | | — | | | 73,848 | | | 5,617,617 |
| Bill Werner | | | — | | | — | | | 17,455 | | | 1,322,440 |
(1)
| Includes shares withheld to pay taxes on the restricted stock award.awards and performance share units, if any. |
34Non-qualified Deferred Compensation
The following table provides information regarding our Executive NQDC Plan for fiscal year 2023:| Name | | | Executive
Contributions
in Last Fiscal
Year
($) | | | Company
Contributions in
Last Fiscal Year
($) | | | Aggregate
Earnings
in Last
Fiscal Year
($) | | | Aggregate
Withdrawals/
Distributions
($) | | | Aggregate Balance
at Last Fiscal Year
End
($)(1) |
| Bob Eddy | | | — | | | — | | | — | | | — | | | — |
| Laura Felice | | | — | | | — | | | — | | | — | | | — |
| Paul Cichocki | | | — | | | — | | | — | | | — | | | — |
| Jeff Desroches | | | 1,125 | | | — | | | 20 | | | — | | | 1,145 |
| Bill Werner | | | — | | | — | | | — | | | — | | | — |
(1)
| The balances, if any, shown represent compensation already reported in the “Summary Compensation Table” in the proxy statement for fiscal year 2023. |
Under the Executive NQDC Plan, only Mr. Desroches elected to defer a portion of his base salary for fiscal year 2023. For additional information regarding the deferred compensation plans included in the above table, please refer to the “—Executive Retirement Plan and Non-Qualified Deferred Compensation Plan” section, above.
Employment
Agreementsagreements and
Potential Payments Upon Terminationpotential payments upon termination or
Changechange in
Controlcontrol
The following section describes the employment agreements that we have, or had, as applicable with our NEOs as well as other severance or change in control arrangements or policies, including applicable terms of equity awards. The
Company,company, in its discretion, may also decide to provide payments or benefits that are not specifically required to these agreements, arrangements or policies in connection with any particular termination or change in control.
NEO
Employment Agreementsemployment agreements
BJ’s Wholesale Club, Inc. has entered into employment agreements with each of Mr. Eddy, dated as of January 30, 2011; Ms. Felice, dated May 10, 2021, Mr. Cichocki, dated as of January 30, 2020; Mr. Desroches, dated as of April 18, 2018; and Mr. Werner dated as of May 10, 2021. The initial term of Mr. Eddy’s employment agreement was for a period of five years, ending on January 30, 2016, after which he was to remain employed by the Companycompany subject to the termination provisions of his agreement; none of Ms. Felice’s
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or Messrs. Cichocki’s,
Desroches’sDesroches’ or Werner’s employment agreements specified a term of employment. Mr. Eddy is subject to a 24-month post termination non-competition covenant, a 24-month post-termination non-solicitation covenant, and a perpetual confidentiality covenant. Ms. Felice and Messrs. Cichocki, Desroches and Werner are each subject to a 12-month post termination non-competition covenant, a 24-month post-termination non-solicitation covenant, and a perpetual confidentiality covenant.
Pursuant to each employment agreement (except for Mr. Eddy), the
Companycompany has certain obligations that become due in the event of termination. If any of Ms. Felice and Messrs. Cichocki, Desroches and Werner are terminated by the
Companycompany without cause (as defined in the applicable employment agreement), then, subject to the executive entering into a binding and irrevocable release of claims and the executive’s continued compliance with the applicable post-termination non-competition, non-solicitation and confidentiality provisions, each executive is entitled to receive (i) a continuation of his base salary for a period of 24 months after termination, (ii) an amount equal to the difference between the executive’s actual COBRA premium costs and the amount the executive would have paid had he continued coverage as an employee under the
Company’scompany’s applicable health plans for up to 24 months, subject to earlier termination in specified instances and payable over such period, (iii) a pro rata portion of any amounts the executive would have been entitled to receive under the
Company’scompany’s Annual Incentive Plan had she or he remained employed by the
Companycompany until the end of the fiscal year during which termination occurred, payable in lump sum and (iv) any other payments or benefits arising from the executive’s participation in other
Companycompany plans to the extent such plans provide for post-termination employment benefits.
Upon a termination due to death or disability, in addition to the accrued amounts, subject to the execution of a release of claims, each of the executives is eligible to receive (i) the annual cash
bonusincentive the executive would have been entitled to receive had he remained employed until the end of the fiscal year (prorated for the period of active employment during the fiscal year), and (ii) any other payments or benefits arising from the executive’s participation in other
Companycompany plans to the extent such plans provide for post-termination employment benefits.
On May 10, 2021, the
Companycompany entered into an employment agreement with Mr. Eddy, in connection with his promotion to the office of
Presidentpresident and
Chief Executive Officerchief executive officer of the
Company,company, effective April 19, 2021, which superseded his previous employment agreement described above.
Pursuant toIn fiscal year 2023, the
terms ofcompensation committee approved an increase in Mr. Eddy’s
current employment agreement, he is entitled to an annual base salary
offrom $1.2
million to $1.35 million. Additionally, the compensation committee approved a fiscal year
20212023 target annual cash incentive award opportunity equal to 150% of his annual base salary, and annual long-term incentive awards in the amount of
$6.0$8.0 million, consisting of 50% performance-based restricted stock units and 50% restricted stock, for a target total direct compensation for fiscal year
20212023 equal to
$9.0$11.375 million.
In connection with Mr. Eddy’s
promotion, the compensation committee also approved an award of performance-based restricted stock units to Mr. Eddy pursuant to the 2018 Plan for a number of restricted stock units, at target, equal to $5.0 million divided by the fair market value of the Company’s common stock on the grant date. See “—Compensation Discussion and Analysis for a description of this award. The current employment agreement also provides that on or after April 19, 2021, to the extent Mr. Eddy’s employment is terminated without cause (as defined in such employment agreement), he is entitled to receive, in addition to any accrued amounts, subject to his entering into a binding and irrevocable release of claims and his continue compliance with the applicable post-termination non-competition, non-solicitation and confidentiality provisions, (i) an amount equal to the sum of (a) his base salary for a period of 12 months after termination and (b) his target annual cash
bonus,incentive, payable in substantially equal installments in such manner and at such times as Mr. Eddy’s base salary was being paid immediately prior to such termination (or if such termination occurs upon or following the occurrence of a change in control, such amount will be paid in a single lump sum); (ii) an amount equal to the difference between Mr. Eddy’s actual COBRA premium costs and the amount he would have paid had he continued coverage as an employee under the
Company’scompany’s applicable health plans for up to 12 months, subject to earlier termination in specified instances, (iii) if such termination had occurred on or after July 1
st of a fiscal year, a pro rata portion of the annual cash
bonusincentive to which Mr. Eddy would have been entitled had he remained employed by the
Companycompany until the end of the fiscal year, (iv) full accelerated vesting of any stock awards or stock options that are unvested and held by him as of the termination date and (v) any other payments or benefits arising from Mr. Eddy’s participation in other
Companycompany plans to the extent such plans provide for post-termination employment benefits. The employment agreement also includes provisions regarding termination due to death or disability that are the same as those contained in Mr. Eddy’s prior employment agreement.
Equity Awards
awards
Generally, the terms of our 2018 Plan and the applicable award agreements entered into with our NEOs provide that, as of the date of an NEO’s termination of employment, unvested options and restricted stock will automatically be forfeited, cancelled or repurchased, as applicable.
In the event of a change in control, as defined in the 2018 Plan, any outstanding awards granted under the 2018 Plan (other than those subject to performance-based vesting) will continue in effect or be assumed or substituted by the successor of the Company or the Company, if the surviving entity, unless the Compensation Committee elects to (i) terminate such awards in exchange for cash, rights or property, or (ii) cause such awards to become fully exercisable and no longer subject to any forfeiture restrictions prior to the consummation of a change in control. Any awards subject to performance-based vesting terms will be treated as provided in the applicable award agreement or as determined by the Compensation Committee (or its successor) within its sole discretion. However,
if the applicable NEO’s employment is terminated without cause (as such term is defined in the sole discretion of the Compensation Committee or set forth in the applicable award agreement) upon or within the 24 month period following a change in control, then the vesting of any awards that were continued, assumed or substituted will accelerate and the NEO will become fully vested in such awards. In the event of termination of employment with us, vested stock options granted under our 2018 Plan that would otherwise remain exercisable generally cease to be exercisable three months or 90 days after termination of employment. In the event of termination of employment with us, vested stock options under the 2011 Plan that would otherwise remain exercisable generally cease to be exercisable 90 days after termination of employment or, in the event of a termination due to death or disability, one year after termination of employment. All unexercised stock options are immediately forfeited in the event of a termination of employment for cause.In April 2021, following the unexpected passing of Mr. Delaney, the Company reviewed its policy for the treatment of outstanding equity upon termination by reason of death. In connection with this review, the Compensation Committee considered, in consultation with Exequity, data regarding prevalent market practices, including through a review of its peer group’s practices, and determined that the Company’s then current treatment of equity upon death or disability was less favorable than typical market practices. Accordingly, the Compensation Committee determined to modify Mr. Delaney’s awards, and to amend all other outstanding equity award agreements towith our NEOs provide for, upon termination due to death or disability, as applicable: (i) full vesting of all time-based awards, including restricted stock awards and stock options, (ii) pro-rata vesting of all performance-based awards, including performance share units, based on actual performance as of the end of the applicable performance period, pro-rated based on the period of employment during the applicable performance period, and (iii) the extension of the post-termination exercise window for vested stock options from 90 days to three years. For Mr. Delaney’s estate, these modifications wereAdditionally, in the event of a change in control, as defined in the 2018 Plan, any outstanding awards granted under the 2018 Plan (other than those subject to executionperformance-based vesting) will continue in effect or be assumed or substituted by the successor of the company or the company, if the surviving entity, unless the compensation committee elects to (i) terminate such awards in exchange for cash, rights or property, or (ii) cause such awards to become fully exercisable and no longer subject to any forfeiture restrictions prior to the consummation of a release of claimschange in favorcontrol. Any awards subject to performance-based vesting terms will be treated as provided in the applicable award agreement or as determined by the compensation committee (or its successor) within its sole discretion. However, if the applicable NEO’s employment is terminated without cause (as such term is defined in the sole discretion of the Company. See “[—Compensation Discussioncompensation committee or set forth in the applicable award agreement) upon or within the 24 month period following a change in control, then the vesting of any awards that were continued, assumed or substituted will accelerate and Analysis—Modificationthe NEO will become fully vested in such
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awards. In the event of
Equity Award Agreements]termination of employment with us, vested stock options granted under our 2018 Plan that would otherwise remain exercisable generally cease to be exercisable three months or 90 days after termination of employment, except in connection with a termination due to death or disability as discussed above. In the event of termination of employment with us, vested stock options under the 2011 Plan that would otherwise remain exercisable generally cease to be exercisable 90 days after termination of employment or, in the event of a termination due to death or disability, one year after termination of employment. All unexercised stock options are immediately forfeited in the event of a termination of employment for
more detail regarding these modifications.”cause.
Pursuant to the terms of the Annual Incentive Plan, if a participant’s employment is terminated during a fiscal year due to death, retirement on or after age 65 or retirement on or after age 55 with a minimum of ten years of service, then the participant is entitled to a pro rata portion of the annual cash
bonusincentive to which the participant would have been entitled for that fiscal year under the Annual Incentive Plan had the participant remained employed by the
Companycompany until the end of the fiscal year.
Summary of Potential Payments Uponpotential payments upon a Terminationtermination or Changechange in Control
control
The following table summarizes the payments that would be made to our NEOs upon the occurrence of a qualifying termination of employment or change in control, assuming that each NEO’s termination of employment with the
Companycompany or a change in control occurred on
January 29, 2022.February 3, 2024. Amounts shown do not include (i) accrued but unpaid salary through the date of termination, and (ii) other benefits earned or accrued by the NEO during his or her employment that are available to all salaried employees. Each of the payments below are subject to the NEOs compliance with certain restrictive covenants including, but not limited, to non-solicits and non-competes as provided in their respective employment agreements.
| Name | Benefit | Termination Without Cause or for Good Reason, as applicable | Termination Due to Death or Disability (9) | Change in Control | Qualifying Termination Without Cause or for Good Reason, as applicable, in Connection With a Change in Control |
| Bob Eddy | Severance Benefit (1) | $ | 3,000,000 | $ | — | $ | — | $ | 3,000,000 |
| Continuation of Health Benefits (2) | 40,777 | — | — | 40,777 |
| Value of Accelerated Stock Awards (3) | 9,941,148 | — | — | 9,941,148 |
| Value of Accelerated Performance Stock Unit Awards (4) | — | — | 5,635,405 | — |
| Annual Bonus (5) | — | — | — | — |
| Other (8) | — | — | — | — |
| Laura Felice | Severance Benefit (6) | 1,200,000 | — | — | 1,200,000 |
| Continuation of Health Benefits (7) | 40,777 | — | — | 40,777 |
| Value of Accelerated Stock Awards (3) | — | — | — | 2,986,961 |
| Value of Accelerated Performance Stock Unit Awards (4) | — | — | 178,938 | — |
| Annual Bonus (5) | — | — | — | — |
| Other (8) | — | — | — | — |
| Paul Cichocki | Severance Benefit (6) | 1,700,000 | — | — | 1,700,000 |
| Continuation of Health Benefits (7) | 40,664 | — | — | 40,664 |
| Value of Accelerated Stock Awards (3) | — | — | — | 8,045,776 |
| Value of Accelerated Performance Stock Unit Awards (4) | — | — | 2,272,296 | — |
| Annual Bonus (5) | — | — | — | — |
| Other (8) | — | — | 56,831 | — |
| Jeff Desroches | Severance Benefit (6) | 1,200,000 | — | — | 1,200,000 |
| Continuation of Health Benefits (7) | 40,664 | — | — | 40,664 |
| Value of Accelerated Stock Awards (3) | — | — | — | 3,110,472 |
| Value of Accelerated Performance Stock Unit Awards (4) | — | — | 1,379,972 | — |
| Annual Bonus (5) | — | — | — | — |
| Other (8) | — | — | — | — |
| Bill Werner | Severance Benefit (6) | 1,060,000 | — | — | 1,060,000 |
| Continuation of Health Benefits (7) | 40,777 | — | — | 40,777 |
| Value of Accelerated Stock Awards (3) | — | — | — | 3,220,940 |
| Value of Accelerated Performance Stock Unit Awards (4) | — | — | 44,590 | — |
| Annual Bonus (5) | — | — | — | — |
| Other (8) | — | — | — | — |
| Name | | | Benefit | | | Termination without
cause or for good
reason, as
applicable
($) | | | Termination due
to death or
disability
($)(1)(2) | | | Change in
control
($) | | | Qualifying termination
without cause or for
good reason, as
applicable, in connection
with a change in control
($) |
| Bob Eddy | | | Severance benefit(3) | | | 3,375,000 | | | — | | | — | | | 3,375,000 |
| | Continuation of health benefits(4) | | | 23,077 | | | 23,077 | | | — | | | 23,077 |
| | Value of accelerated stock awards(5) | | | 7,076,424 | | | 7,076,424 | | | — | | | 7,076,424 |
| | Value of accelerated performance stock unit awards | | | — | | | 24,836,519 | | | 13,490,187(6) | | | 13,490,187 |
| | Annual incentive(7) | | | — | | | — | | | — | | | — |
| | Other(8) | | | — | | | — | | | — | | | — |
| Laura Felice | | | Severance benefit(9) | | | 1,500,000 | | | — | | | — | | | 1,500,000 |
| | Continuation of health benefits(10) | | | 23,077 | | | 23,077 | | | — | | | 23,077 |
| | Value of accelerated stock awards(5) | | | — | | | 1,579,721 | | | — | | | 1,579,721 |
| | Value of accelerated performance stock unit awards | | | — | | | 2,189,074 | | | 1,322,922(6) | | | 1,322,922 |
| | Annual incentive(7) | | | — | | | — | | | — | | | — |
| | Other(8) | | | — | | | — | | | — | | | — |
| Paul Cichocki | | | Severance benefit(9) | | | 1,800,000 | | | — | | | — | | | 1,800,000 |
| | Continuation of health benefits(10) | | | 20,795 | | | 20,795 | | | — | | | 20,795 |
| | Value of accelerated stock awards(5) | | | — | | | 2,544,984 | | | — | | | 2,544,984 |
| | Value of accelerated performance stock unit awards | | | — | | | 5,260,710 | | | 2,998,912(6) | | | 2,998,912 |
| | Annual incentive(7) | | | — | | | — | | | — | | | — |
| | Other(8) | | | — | | | 4,763 | | | 180,000 | | | — |
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| Name | | | Benefit | | | Termination without
cause or for good
reason, as
applicable
($) | | | Termination due
to death or
disability
($)(1)(2) | | | Change in
control
($) | | | Qualifying termination
without cause or for
good reason, as
applicable, in connection
with a change in control
($) |
| Jeff Desroches | | | Severance benefit(9) | | | 1,300,000 | | | — | | | — | | | 1,300,000 |
| | Continuation of health benefits(10) | | | 20,795 | | | 20,795 | | | — | | | 20,795 |
| | Value of accelerated stock awards(5) | | | — | | | 1,419,801 | | | — | | | 1,419,801 |
| | Value of accelerated performance stock unit awards | | | — | | | 2,942,906 | | | 1,676,758(6) | | | 1,676,758 |
| | Annual incentive(7) | | | — | | | — | | | — | | | — |
| | Other(8) | | | — | | | — | | | — | | | — |
| Bill Werner | | | Severance benefit(9) | | | 1,150,000 | | | — | | | — | | | 1,150,000 |
| | Continuation of health benefits(10) | | | 23,077 | | | 23,077 | | | — | | | 23,077 |
| | Value of accelerated stock awards(5) | | | — | | | 1,369,870 | | | — | | | 1,369,870 |
| | Value of accelerated performance stock unit awards | | | — | | | 2,491,835 | | | 1,771,499(6) | | | 1,771,499 |
| | Annual incentive(7) | | | — | | | — | | | — | | | — |
| | Other(8) | | | — | | | — | | | — | | | — |
(1)
| As set forth above under “—Equity Awards”, subsequent to January 30, 2021, the compensation committee determined to modify all applicable award agreements entered into with our NEOs to address the treatment of such awards upon the death of the NEO. |
(2)
| For valuation purposes, we have assumed the closing price of our common stock on the NYSE on February 2, 2024 (the last trading day prior to February 3, 2024) of $64.51, and that the 2021 PSUs would be earned at 200% of target, the 2022 PSUs would be earned at a level between target and 200% of target, and the 2023 PSUs would be earned at a level below target. A pro rata portion of the PSUs shall vest based on the total number of PSUs multiplied by a fraction, the numerator of which shall be the number of calendar days from the first day of the performance period to the date of such termination due to death or disability and the denominator of which shall be the total number of days in the performance period. |
(3)
| Such amount includes 12 months’ base salary and the executive’s target annual cash bonus,incentive, payable in substantially equal installments for 12 months after termination and in a single lump sum in respect of a qualifying termination occurring on or following a change in control. This amount is also payable upon Mr. Eddy’s resignation for good reason as defined in Mr. Eddy'sEddy’s employment agreement. |
(2)(4)
| Such amount includes the difference between the executive’s actual COBRA premium costs and the amount the executive would have paid had he continued coverage as an employee under the Company’scompany’s applicable health plans for 12 months. This amount is also payable upon a termination by Mr. Eddy for good reason as defined in Mr. Eddy'sEddy’s employment agreement. |
(3)(5)
| Includes options and shares of restricted stock. The value of unvested options was calculated by multiplying the number of shares underlying unvested options by $57.93, the closing price of our common stock on the NYSE on January 28, 2022 (the last trading day prior to January 29, 2022), and then deducting the aggregate exercise price for the options. The value of unvested shares of restricted stock was calculated by multiplying the number of shares of unvested restricted stock by $57.93.$64.51, the closing price of our common stock on the NYSE on February 2, 2024 (the last trading day prior to February 3, 2024). |
(4)(6)
| Includes performance stock units (“PSUs”). Performance Conditioncondition will be deemed achieved at Target,target, irrespective of actual achievement of the Performance Condition,performance condition, and a pro rata portion of the PSUs shall vest based on the total number of PSUs multiplied by a fraction, the numerator of which shall be the number of calendar days from the first day of the Performance Periodperformance period to the date of such Changechange in Controlcontrol and the denominator of which shall be the total number of days in the Performance Period.performance period. The value was calculated by multiplying the number of pro-rate shares of stock by $57.93,$64.51, the closing price of our common stock on the NYSE on January 28, 2022February 2, 2024 (the last trading day prior to January 29, 2022)February 3, 2024). |
(5)(7)
| No amounts are shown because the executives already were fully vested in their annual cash bonusesincentives on January 29, 2022. |
(6) | Such amount includes 24 months’ base salary, payable in substantially equal installments for 24 months after termination. |
(7) | Such amount includes the difference between the executive’s actual COBRA premium costs and the amount the executive would have paid had he continued coverage as an employee under the Company’s applicable health plans for twenty-four months.February 3, 2024. |
(8)
| For Mr. Cichocki (i) the amount in the column relating to a change in control represents the value of all unvested amounts previously contributed under the Executive Retirement Plan, all of which would vest upon a change in control, plus the tax gross-up payment that would be made upon vesting and (ii) the amount in the column relating to termination due to death or disability represents the value all unvested balances in Mr. Cichocki’s account under the Company’scompany’s 401(k) plan that would vest in such event. Generally, under the Company’scompany’s 401(k) plan, participants vest in amounts attributable to the Company’scompany’s matching contributions based on their years of service with the Company,company, with 25% vesting for each year of service and participants with four or more years of service being fully vested. Participants not otherwise fully vested, will fully vest upon a termination due to death or disability or if they remain employed by the Companycompany at the time they reach age of 65. |
(9)
| As set forth above under “—Equity Awards”, subsequent to January 30, 2021, the Compensation Committee determined to modify all applicable award agreements entered into with our NEOs to address the treatment of such awards upon the death of the NEO.Such amount includes 24 months’ base salary, payable in substantially equal installments for 24 months after termination. |
In connection with Mr. Delaney’s passing,(10)
| Such amount includes the difference between the executive’s actual COBRA premium costs and the amount the executive would have paid had he continued coverage as an employee under the company’s applicable health plans for twenty-four months. |
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Compensation
Committee approved the modifications to his outstanding equity awards as described above under “—Compensation Discussionrisk assessment and Analysis—Modification of Equity Award Agreements,” which resulted in the accelerated vesting of 202,731 shares of restricted stock and 74,060 stock options with a weighted average exercise price of $20.89 that had been previously granted. As a result of these modifications, his estate also retained the right to earn up to 135,257 performance share unit awards that were originally granted in fiscal year 2020 and 4,921 performance share unit awards that were originally granted in fiscal year 2021, which represent a pro rata portion of the performance share unit awards originally granted prorated based on that portion of the performance period for each award during which Mr. Delaney was employed by us. No changes were made to the performance-based vesting criteria of these awards and, as a result, the percentage of the pro rata portion of these performance share units that will be earned, if any, will be determined in the same manner and using the same performance criteria as were originally established for the performance share units. Based on a closing price of $57.93, which was the closing price of our common stock on the NYSE on January 28, 2022: (i) the value of the shares of restricted stock that vested upon Mr. Delaney’s passing was approximately $11,700,000, (ii) the value of the stock options that vested upon Mr. Delaney’s passing was approximately $2,700,000, calculated by multiplying the number of shares underlying such stock options by such closing price and then deducting the aggregate exercise price for the stock options and [(iii) the value of the maximum number of performance share units that could be earned by Mr. Delaney’s estate was approximately $15,700,000. See “—Compensation Discussion and Analysis—Modification of Equity Award Agreements and “—Compensation Discussion and Analysis—Compensation of Mr. Delaney.”Compensation Risk Assessment and Management
management
We monitor our compensation policies and practices for our employees to determine whether they encourage unnecessary or excessive risk-taking. Due to the greater emphasis placed on incentive compensation at higher levels of our organization, and the fact that these individuals are more likely to make decisions that impact corporate performance and could have a material adverse effect on us, our review focuses primarily on our executive compensation policies and practices. We believe that the risks arising from our policies and practices for compensating employees are not reasonably likely to have a material adverse effect on us primarily because of the following reasons:
| • | Vesting conditions. Vesting schedules for restricted stock, performance share units and non-qualified stock options cause management to have a significant amount of unvested awards at any given time; |
| • | Balanced incentives. Our executive compensation program has a meaningful focus on long-term equity compensation with fixed and variable features; |
| • | Multiple performance objectives. Short-term or annual incentive compensation opportunities are capped and therefore do not incentivize employees to maximize short-term performance at the expense of long-term performance and annual cash incentive compensation is based on pre-established company financial metrics; |
| • | Recoupment protocols. We have a clawback policy that will allow us to recoup incentive compensation in the event of a restatement or material miscalculation that resulted from fraud or other intentional misconduct by one of our executive officers; |
| • | Competitive alignment. Our compensation levels and opportunities are in line with appropriate competitive practice; |
| • | Equity ownership requirements. Our executives and directors are expected to maintain an ownership interest in the company, which an alignment of their interests with those of our shareholders; and |
| • | Incentive plan caps. Executive incentive plans are capped at 200% of target. |
Vesting Conditions. Vesting schedules for restricted stock, performance share units and non-qualified stock options cause management to have a significant amount of unvested awards at any given time;
Balanced Incentives. Our executive compensation program has a meaningful focus on long-term equity compensation with fixed and variable features;
Multiple Performance Objectives. Short-term or annual incentive compensation opportunities are capped and therefore do not incentivize employees to maximize short-term performance at the expense of long-term performance and annual cash incentive compensation is based on pre-established Company financial metrics;
Recoupment Protocols. We have a clawback policy that will allow us to recoup incentive compensation in the event of a restatement or material miscalculation that resulted from fraud or other intentional misconduct by one of our executive officers;
Competitive Alignment. Our compensation levels and opportunities are in line with appropriate competitive practice; and
Equity Ownership Requirements. Our executives and Directors are expected to maintain an ownership interest in the Company, which an alignment of their interests with those of our shareholders.
Director and Executive Stock Ownership Guidelines
executive stock ownership guidelines
In order to complement our compensation programs and further align the interests of our NEOs with those of our shareholders, our
Board of Directorsboard adopted
Director Stock Ownership Guidelinesdirector stock ownership guidelines and
Executive Stock Ownership Guidelinesexecutive stock ownership guidelines pursuant to which the following persons are expected to own equity in the
Companycompany with the following aggregate market values:
| Position | | | Stock Ownership Guidelinesownership guidelines |
Chief Executive Officerexecutive officer | | | 5x annual base salary |
Executive Vice Presidentvice president | | | 3x annual base salary |
Senior Vice Presidentvice president | | | 1x annual base salary |
Non-Employee DirectorNon-employee director | | | 5x annual cash retainer, excluding committee retainers or retainers paid for service as Lead Director lead director |
Our non-employee
Directorsdirectors and our executive officers are expected to attain compliance with these ownership guidelines by the fifth anniversary of our IPO, if serving as a
Non-Employee Directornon-employee director or executive officer at the time of our IPO, or by the fifth anniversary of their appointment or election, in the case of a non-employee
Director,director, or their hire or promotion date, in the case of an executive officer. Thereafter,
Non-Employee Directorsnon-employee directors and executive officers are required to certify as to his or her compliance with these ownership guidelines at least once each year.
2021TABLE OF CONTENTS
2023 CEO
Pay Ratiopay ratio
As required by Item 402(u) of Regulation S-K, the
Companycompany is disclosing the following information about the relationship of the annual total compensation of our CEO and the median of the annual total compensation of our employees (other than the CEO) for fiscal year
2021:2023:The total annual compensation of our CEO was $16,340,549,$10,858,552 as disclosed in the "SummarySummary Compensation Table".Table.
The annual total compensation of our median employee was $19,021.$25,708.
The ratio of the total annual compensation of our CEO to the annual total compensation of our median employee was 859422 to 1.
We identified the median employee for
the fiscal year
20212023 pay ratio using the following methodology and material assumptions. To identify the median of the total annual compensation of our active employees as of
January 29, 2022,February 3, 2024, we used total wages from our payroll records for the period from January
30, 202129, 2023 (the first day of fiscal year
2021)2023) through
January 29, 2022February 3, 2024 (the last day of fiscal year
2021)2023); we included any full-time, part-time, temporary or seasonal employees, but excluded our CEO; and we did not annualize compensation for any full-time or part-time permanent employees who were employed
by the company on January
30, 202129, 2023 but did not work for us the entire year or make any full-time equivalent adjustments for part-time employees. We consistently applied this compensation measure and methodology to all of our employees included in the calculation.
2
We determined the annual total compensation for fiscal year
20212023 of our median employee (who was calculated to be a part-time employee) in the same manner that we determine the total compensation of our named executive officers for purposes of the Summary Compensation Table.
This information is being provided for compliance purposes. The ratio presented herein is a reasonable estimate and may not be comparable to the pay ratio presented by other companies. Neither the Compensation Committeecompensation committee nor management of the Companycompany used the pay ratio measure in making compensation decisions.
2
| The calculation of the annual total compensation of our median employee for fiscal years prior to 2023 was corrected to include annual incentive amounts in the year incentives are earned instead of the year incentives are paid. |
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Pay versus performance
The information below presents the relationship between the compensation of the company’s named executive officer and certain performance measures in accordance with Item 402(v) of Regulation S-K (“Pay Versus Performance Table”). For a discussion of the company’s compensation programs and pay for performance philosophy, please refer to the section captioned “Compensation Discussion and Analysis,” above.
Pay Versus Performance Table
The information below presents the relationship between compensation actually paid (“CAP”) of the company’s NEOs and certain performance measures in accordance with Item 402(v) of Regulation S-K.
Year
(a) | Summary
Compensation
Table total for
first Principal
Executive
Officer
(“PEO”)1
(b) | Compensation
actually
paid to first
PEO2
(c) | Summary
Compensation
Table total for
second
PEO1
(b) | Compensation
actually paid
to second
PEO2
(c) | Average
Summary
Compensation
Table total for
non-PEO
NEOs1
(d) | Average
compensation
actually paid
to Non-PEO
NEOs2
(e) | Value of initial fixed $100
investment based on: | Net
income
(millions)
(h) | Adjusted
EBITDA
(millions)4
(i) |
Total
shareholder
return
(f) | Peer group
total
shareholder
return3
(g) |
| 2023 | | | $ 10,858,552 | | | $ 6,059,860 | | | — | | | — | | | $3,021,845 | | | $2,293,990 | | | $314.38 | | | $174.15 | | | $524 | | | $ 1,088 |
| 2022 | | | 12,249,164 | | | 23,888,302 | | | — | | | — | | | 3,548,597 | | | 6,422,497 | | | 339.68 | | | 124.00 | | | 513 | | | 914 |
| 2021 | | | 16,340,546 | | | 37,445,973 | | | $21,626,020 | | | $15,984,701 | | | 3,681,469 | | | 7,736,013 | | | 282.32 | | | 149.73 | | | 427 | | | 880 |
| 2020 | | | | | | | | | 16,157,250 | | | 20,079,361 | | | 4,171,404 | | | 10,557,454 | | | 205.03 | | | 141.39 | | | 421 | | | 857 |
(1)
| For 2023 and 2022, the PEO is Mr. Eddy. For 2021, the first PEO is Mr. Eddy, who was appointed as president and chief executive officer on April 19, 2021. The second PEO is Mr. Delaney, who served as our PEO in 2020 and 2021 until he passed away unexpectedly on April 8, 2021. Our non-PEO NEOs for the covered years are as follows: |
| Bob Eddy | | | Laura Felice | | | Laura Felice | | | Laura Felice |
| Paul Cichocki | | | Paul Cichocki | | | Paul Cichocki | | | Paul Cichocki |
| Jeff Desroches | | | Jeff Desroches | | | Jeff Desroches | | | Jeff Desroches |
| Scott Kessler | | | Bill Werner | | | Scott Kessler | | | Bill Werner |
| Chris Baldwin | | | | | | | | | |
In 2020, Mr. Eddy served as our executive vice president, chief financial and administrative officer.
(2)
| The following adjustments relating to equity awards were made to total compensation for each year to determine CAP as computed in accordance with Item 402(v) of Regulation S-K: |
| Year | | | Summary Compensation
Table total | | | Total equity award
adjustments | | | Compensation
actually paid |
| First PEO (Mr. Eddy) |
| 2023 | | | $10,858,552 | | | ($4,798,692) | | | $6,059,860 |
| Non-PEO NEOs |
| 2023 | | | $3,021,845 | | | ($727,855) | | | $2,293,990 |
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The total equity award adjustments for each applicable fiscal year are detailed below:
| Year | | | Value of equity
awards disclosed
in the Summary Compensation
Table | | | Year end fair value
of equity
awards
granted in the year
and unvested | | | Year-over-year
change in fair
value of
outstanding
and unvested
equity
awards | | | Fair value as of
vesting date of
equity awards
granted and
vested in year | | | Year-over-year
change in fair value of
equity awards
granted in
prior years
that vested in the
applicable year | | | Fair value at the end of the prior year of equity
awards that failed to meet vesting
conditions in the year | | | Total equity
award
adjustments |
| First PEO (Mr. Eddy) |
| 2023 | | | ($7,999,978) | | | $5,868,410 | | | ($3,751,037) | | | $0 | | | $1,083,913 | | | $0 | | | ($4,798,692) |
| Non-PEO NEOs |
| 2023 | | | ($1,799,892) | | | $1,320,310 | | | ($628,820) | | | $0 | | | $380,546 | | | $0 | | | ($727,855) |
The valuation methodologies used to calculate fair values for each measurement date do not materially differ from those used at the time of grant of each respective award.
(3)
| Represents total shareholder return for the S&P 500 Retail Index. |
(4)
| Represents Adjusted EBITDA, which is defined in the Compensation Discussion and Analysis section of this Proxy Statement. |
Relationship between compensation actually paid and financial performance
In accordance with Item 402(v) of Regulation S-K, the following graphs illustrate the relationship between the amounts disclosed in the Pay Versus Performance Table, above, as CAP to Total Shareholder Return, Peer Group Total Shareholder Return, GAAP Net Income and Adjusted EBITDA.
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Tabular list of performance measures
The following table lists the financial performance measures that the company considers to be the most important financial performance measures used by the company to link compensation actually paid to its NEOs for the most recently completed fiscal year to performance of the company.
| Adjusted EBITDA |
| Comparable club sales |
| Adjusted EPS |
TABLE OF CONTENTS
Compensation
Committee Interlockscommittee interlocks and
Insider Participationinsider participation
During fiscal year
2021,2023, the members of the
Compensation Committeecompensation committee (or other committee performing equivalent functions) were
Tom Kingsbury,Darryl Brown, Steve Ortega, Ken Parent and
Judy Werthauser.Chris Peterson.
During fiscal year
2021,2023, none of our executive officers served as a member of the
Board of Directorsboard or
Compensation Committeecompensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on the
Board of Directorsboard or
Compensation Committee.39compensation committee.
Compensation Committee Report
committee report
The
Compensation Committeecompensation committee has discussed and reviewed the prior Compensation Discussion and Analysis with management. Based upon this review and discussion, the
Compensation Committeecompensation committee recommended to the
Boardboard that the Compensation Discussion and Analysis be included in this Proxy Statement.
Submitted by the Compensation Committee of the Board of Directors:
Judy Werthauser (Chair)
Tom Kingsbury
Ken Parent (Chair)
Darryl Brown
40Steve Ortega
Chris Peterson
TABLE OF CONTENTS
Ratification of Appointmentappointment of Independent Registered
Public Accounting Firm
independent registered
public accounting firm
| | | The Audit Committeeaudit committee appoints our independent registered public accounting firm. In this regard, the Audit Committeeaudit committee evaluates the qualifications, performance and independence of our independent registered public accounting firm and determines whether to re-engage our current firm. As part of its evaluation, the Audit Committeeaudit committee considers, among other factors, the quality and efficiency of the services provided by the firm, including the performance, technical expertise, industry knowledge and experience of the Lead Audit Partnerlead audit partner and the audit team assigned to our account, the overall strength and reputation of the firm, the firm’s global capabilities relative to our business and the firm’s knowledge of our operations. PricewaterhouseCoopers LLP has served as our independent registered public accounting firm since 1996. Neither the accounting firm nor any of its members has any |
direct or indirect financial interest in or any connection with us in any capacity other than as our auditors and providing audit and permissible non-audit related services. Upon consideration of these and other factors, the Audit Committeeaudit committee has appointed PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for fiscal year 2022.
2024. |
 | | | The Boardboard unanimously recommends that you vote “FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm. |
Although ratification is not required by our
Bylawsbylaws or otherwise, the
Boardboard is submitting the appointment of PricewaterhouseCoopers LLP to our shareholders for ratification because we value our shareholders’ views on the
Company’scompany’s independent registered public accounting firm and it is a good corporate governance practice. If our shareholders do not ratify the appointment, the
Audit Committeeaudit committee will take that act into consideration, together with such other factors it deems relevant, in determining its next appointment of independent auditors. Even if the appointment is ratified, the
Audit Committee,audit committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the
Companycompany and its shareholders. Representatives of PricewaterhouseCoopers LLP are expected to attend the Annual Meeting and to have an opportunity to make a statement if they so desire and be available to respond to appropriate questions from shareholders.
Board
Recommendationrecommendation
The
Board of Directorsboard unanimously recommends you vote
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year
2022.TABLE OF CONTENTS
Audit,
Audit-Related, Taxaudit-related, tax and
All Other Feesall other fees
The table below sets forth the aggregate fees billed to BJ’s for services related to fiscal year
20212023 and fiscal year
2020,2022, respectively, by PricewaterhouseCoopers LLP, our independent registered public accounting firm.
| | Fiscal Year 2021 | Fiscal Year 2020 |
| Audit fees (1) | $ | 3,056,541 | $ | 2,841,722 |
| Audit-related fees (2) | 660,000 | — |
| Tax fees (3) | 180,456 | 197,993 |
| All other fees (4) | 2,900 | 2,756 |
| Total fees | $ | 3,899,897 | $ | 3,127,047 |
| | | Fiscal year 2023
($) | | | Fiscal year 2022
($) |
Audit fees(1) | | | 3,378,587 | | | 3,300,238 |
Audit-related fees(2) | | | 75,174 | | | — |
Tax fees(3) | | | 172,843 | | | 213,801 |
All other fees(4) | | | 2,125 | | | 3,081 |
| Total fees | | | 3,628,729 | | | 3,517,120 |
(1)
| Audit fees consisted of fees billed for professional services rendered for the audit of our consolidated annual financial statements, audit of the effectiveness of internal controls over financial reporting and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements. |
(2)
| Audit-Related FeesAudit-related fees consisted of fees billed for assuranceenvironmental, social and related services, such as due diligence for the anticipated Burris Logistics acquisition, that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit Fees".governance-related services. |
(3)
| Tax fees consisted of fees billed for professional services rendered for tax compliance, tax advice and tax planning. These services include assistance regarding federal and state tax compliance, tax planning and compliance work. |
(4)
| All other fees related to licenses for accounting research software. |
Pre-Approval PoliciesPre-approval policies and
Proceduresprocedures
The formal written charter for our
Audit Committeeaudit committee requires that the
Audit Committeeaudit committee pre-approve all audit services to be provided to us, whether provided by our principal auditor or other firms, and all other services (review, attest and non-audit) to be provided to us by our independent registered public accounting firm, other than de minimis non-audit services approved in accordance with applicable SEC rules.
The
Audit Committeeaudit committee has adopted a pre-approval policy that sets forth the procedures and conditions pursuant to which audit and non-audit services proposed to be performed by our independent registered public accounting firm may be pre-approved. This pre-approval policy generally provides that the
Audit Committeeaudit committee will not engage an independent registered public accounting firm to render any audit, audit-related, tax or permissible non-audit service unless the service is either (i) explicitly approved by the
Audit Committeeaudit committee or (ii) entered into pursuant to the pre-approval policies and procedures described in the pre-approval policy. Unless a type of service to be provided by our independent registered public accounting firm has received this latter general pre-approval under the pre-approval policy, it requires specific pre-approval by the
Audit Committee.audit committee.
On an annual basis, the
Audit Committeeaudit committee reviews and generally pre-approves the services (and related fee levels or budgeted amounts) that may be provided by the
Company’scompany’s independent registered public accounting firm without first obtaining specific pre-approval from the
Audit Committee.audit committee. The
Audit Committeeaudit committee may revise the list of general pre-approved services from time to time, based on subsequent determinations. Any member of the
Audit Committeeaudit committee to whom the committee delegates authority to make pre-approval decisions must report any such pre-approval decisions to the
Audit Committeeaudit committee at its next scheduled meeting. If circumstances arise where it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval categories or above the pre-approved amounts, the
Audit Committeeaudit committee requires pre-approval for such additional services or such additional amounts.
The services provided to us by PricewaterhouseCoopers LLP in fiscal year
20212023 and fiscal year
20202022 were provided in accordance with our pre-approval policies and procedures, as applicable.
TABLE OF CONTENTS
Audit
Committee Reportcommittee report
The
Audit Committeeaudit committee operates pursuant to a charter which is reviewed periodically by the
Audit Committee.audit committee. Additionally, a brief description of the primary responsibilities of the
Audit Committeeaudit committee is included in this Proxy Statement under the discussion of
"Corporate“Corporate Governance—Audit Committee.
"” Under the
Audit Committeeaudit committee charter, management is responsible for the preparation, presentation and integrity of the
Company’scompany’s financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States.
In the performance of its oversight function, the Audit Committeeaudit committee reviewed and discussed with management the Company’scompany’s audited financial statements for fiscal year 2021.2023. The Audit Committeeaudit committee also discussed with the Company’scompany’s independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the "PCAOB"“PCAOB”) and the SEC. In addition, the audit committee received and reviewed the written disclosures and the letters from the Company’scompany’s independent registered public accounting firm required by applicable requirements of the PCAOB, regarding such independent registered public accounting firm’s communications with the Audit Committeeaudit committee concerning independence and discussed with the Company’s independent registered public accounting firm their independence from the Company.
company.
Based upon the review and discussions described in the preceding paragraph, the
Audit Committeeaudit committee recommended to the
Boardboard that the
Company’scompany’s audited financial statements be included in its Annual Report on Form 10-K for fiscal year
20212023 filed with the SEC.
Submitted by the Audit Committee of the Board of Directors:
Steve Ortega
Marie Robinson
Rob Steele
43
TABLE OF CONTENTSProposal No. 4 Approval of an Amendment
to our Charter to Eliminate
Supermajority Vote
Requirements
| |
Certain provisions of our Charter require the affirmative vote of holders of at least 66 2/3% of the voting power of our outstanding shares of stock entitled to vote with respect to such provisions to approve (i) amendments to our Charter and our Bylaws and (ii) the removal of directors from office (together, the “supermajority voting requirements”), each of which is discussed further below. We are seeking shareholder approval of an amendment to our Charter to eliminate these supermajority voting requirements from the Charter and to replace such requirements with a majority voting standard (the “Proposed Charter Amendment”).
| The Board unanimously recommends that you vote “FOR” the Proposed Charter Amendment.
|
Rationale for Eliminating the Supermajority Vote Requirements
The Proposed Charter Amendment is a result of the Board’s ongoing review of our corporate governance principles and our commitment to good governance practices as we continue the transition from a controlled company to an independent company. It is the Board’s view that, subject to any applicable laws, our shareholders should have the ability to make changes to our Charter and Bylaws and to remove directors from office with majority support.
In developing the Proposed Charter Amendment, the Board carefully considered the implications of amending our Charter to eliminate the supermajority voting requirements. The supermajority voting requirements are intended to protect against self-interested action by large shareholders by requiring broad shareholder support for certain types of governance changes. By eliminating the supermajority voting requirements, the Proposed Charter Amendment may make it easier for one or more shareholders to remove directors or effect other corporate governance changes in the future and may also make it more difficult for the Board to protect shareholders’ interests if presented with an acquisition proposal that the Board believes undervalues the Company. Nevertheless, the Board is of the belief that eliminating the supermajority voting requirements is consistent with generally held views of good corporate governance, as evidenced by the fact that many other public companies have transitioned away from supermajority voting provisions in the years after going public. On balance, and in contemplation of the considerations described above, the Board believes this action is in the best interest of our company and our shareholders.
Eliminate Provisions Requiring a Supermajority Vote to Amend our Charter and Bylaws
Our Charter currently provides that, in addition to any affirmative vote of the holders of any particular class or series of stock required by law or our Charter, the affirmative vote of the holders of at least two-thirds of the voting power of the then outstanding shares of stock entitled to vote thereon, voting together as a single class, is required to alter, amend or repeal certain provisions of our Charter, including provisions relating to: (i) the powers, election of, removal of and terms of directors, (ii) shareholder action, (iii) limitation of liability, (iv) exclusive forum, (v) conflicts of interest and (vi) amendment of our Charter and Bylaws.
If Proposal 4 is approved by shareholders, the voting standard for shareholder approval of any future amendments to our Charter, including the provisions described above, would be by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock entitled to vote thereon, voting together as a single class, which is the default voting standard under the DGCL. The Board will retain the right to amend, alter, change or repeal any provision of our Charter without seeking approval of our shareholders, except as required by the DGCL.
Currently, our shareholders may only alter, amend or repeal, in whole or in part, any provision of our Bylaws with the affirmative vote of at least two-thirds of the voting power of the outstanding shares of stock entitled to vote thereon, voting together as a single class.
If Proposal 4 is approved by shareholders, Article X, Section 2 of our Charter would be amended to replace the reference to “66-2/3%” with “a majority.” As a result, shareholders would be able to amend our Bylaws with the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock entitled to vote thereon, voting together as a single class. Unless otherwise required by law, the Board will also retain its right under our Charter to make, repeal, alter, amend and rescind, in whole or in part, our Bylaws by a majority vote of the directors then in office.
The Proposed Charter Amendment would also delete certain obsolete provisions in Article X relating to the equity ownership of our former sponsors.
Related Changes to our Bylaws
In connection with the Proposed Charter Amendment, the Board has approved a conforming amendment to our Bylaws. The amendment, which is contingent upon shareholder approval and implementation of Proposal 4, would amend Article X of our Bylaws to replace the provision requiring a supermajority vote in order to amend our Bylaws with a majority vote threshold. As permitted by the DGCL, our Bylaws will continue to allow the Board to make, repeal, alter, amend and rescind, in whole or in part, our Bylaws by a majority vote of the directors then in office, unless otherwise required by law.
Eliminate Provisions Requiring a Supermajority Vote to Remove Directors
The Charter also currently states that, subject to the rights of any holders of preferred stock to elect directors, from and after the date on which the Board ceases to be classified, which shall be after the 2022 Annual Meeting, any director may be removed from office, with cause by the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote at an election of directors or without cause by the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote on the election of such director.
Therefore, if Proposal 4 is approved, in addition to the amendments to our Charter and our Bylaws described above, shareholders would also be able to remove any director from office, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of our stock entitled to vote on the election of directors generally. This change aligns with the default voting standard under the DGCL. The Proposed Charter Amendment would also delete certain provisions relating to director removal rights when the Board is classified, as such provisions will become obsolete following the 2022 Annual Meeting.
Proposed Charter Amendment
The text of the Proposed Charter Amendment is attached as Annex A to this Proxy Statement and incorporated herein by reference.
As discussed, the Charter currently requires the approval of at least 66 2/3% of the voting power of the outstanding shares of our stock to approve Proposal 4. If Proposal 4 is approved by the requisite number of our shareholders, we will file a Certificate of Amendment to our Charter with the Secretary of State of the State of Delaware, which Certificate of Amendment will become effective at the time of filing. Additionally, the related conforming amendment to our Bylaws adopted by our Board will become effective upon such filing.
If Proposal 4 is not approved by the requisite vote, then a Certificate of Amendment to our Charter will not be filed with the Secretary of State of the State of Delaware, the related amendment to our Bylaws approved by the Board will not become effective and the supermajority voting requirements in both our Charter and Bylaws will remain in place.
Board Recommendation
The Board unanimously recommends that you vote “FOR” the Proposed Charter Amendment to eliminate the supermajority vote requirements in our Charter and Bylaws.
Beneficial Ownership
ownership
To our knowledge, except as otherwise indicated, each of the persons, groups of affiliated persons or entities listed in the tables below has sole voting and investment power with respect to the shares beneficially owned by him, her or such group or entity. For purposes of the tables below, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person is deemed to have “beneficial ownership” of any shares that such person has the right to acquire within 60 days after
MarchApril 1,
2022.2024. For purposes of computing the percentage of outstanding shares held by each person, group of affiliated persons or entities named below, any shares that such person, group of affiliated persons or entities has the right to acquire within 60 days after
MarchApril 1,
20222024 are deemed to be outstanding but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person, group of affiliated persons or entities. The percentage of shares beneficially owned is computed on the basis of
135,329,504133,233,789 shares of our common stock outstanding as of
MarchApril 1,
2022.2024.
Beneficial
Ownershipownership of
Directorsdirectors and
Executive Officersexecutive officers
The following beneficial ownership table sets forth, as of
MarchApril 1,
2022,2024, information regarding the beneficial ownership of the
Company’scompany’s common stock by (i) each of our current
Directorsdirectors and our NEOs for fiscal year
2021;2023; and (ii) all current
Directorsdirectors and executive officers as a group.
| Name of Beneficial Owner (1) | Shares Beneficially Owned | % of Shares Beneficially Owned |
| Chris Baldwin (2) | 653,043 | * |
| Bob Eddy (3) | 853,652 | * |
| Laura Felice (4) | 236,691 | * |
| Paul Cichocki (5) | 292,448 | * |
| Jeff Desroches (6) | 251,637 | * |
| Bill Werner (7) | 163,680 | * |
| Ken Parent (8) | 52,350 | * |
| Chris Peterson (9) | 15,458 | * |
| Rob Steele (10) | 29,159 | * |
| Michelle Gloeckler (11) | 11,271 | * |
| Tom Kingsbury (12) | 9,816 | * |
| Maile Naylor (13) | 11,271 | * |
| Judy Werthauser (14) | 16,745 | * |
| Darryl Brown (15) | 3,334 | * |
| All Directors and executive officers as a group (17 persons) (16) | 2,853,439 | 2.1% |
*Represents beneficial ownership of less than 1% of our outstanding common stock.
Name of beneficial owner(1) | | | Shares
beneficially owned | | | % of shares
beneficially owned |
Bob Eddy(2) | | | 1,114,906 | | | * |
Chris Baldwin(3) | | | 552,097 | | | * |
Jeff Desroches(4) | | | 242,707 | | | * |
Laura Felice(5) | | | 203,406 | | | * |
Paul Cichocki(6) | | | 195,514 | | | * |
Bill Werner(7) | | | 129,295 | | | * |
Rob Steele(8) | | | 34,132 | | | * |
Ken Parent(9) | | | 22,319 | | | * |
Chris Peterson(10) | | | 20.431 | | | * |
Michelle Gloeckler(11) | | | 16,244 | | | * |
Maile Naylor(12) | | | 16,244 | | | * |
Darryl Brown(13) | | | 8,307 | | | * |
Steve Ortega(14) | | | 2,414 | | | * |
Marie Robinson(15) | | | 2,414 | | | * |
All directors and executive officers as a group (17 persons)(16) | | | 2,649,734 | | | 2.0% |
*
| Represents beneficial ownership of less than 1% of our outstanding common stock. |
(1)
| Address for all persons listed is c/o BJ’s Wholesale Club, Inc., 25 Research350 Campus Drive, Westborough,Marlborough, Massachusetts 01581.01752. |
(2)
| Consists of (a) 263,5612,000 shares of common stock held by his minor children, (b) 244,468 shares of common stock, (c) 267,324 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (d) 601,114 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(3)
| Consists of (a) 170,880 shares of common stock, (b) 10,6792,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (c) 378,803 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(3)(4)
| Consists of (a) 2,000 shares of common stock held by his minor children, (b) 158,814 shares of common stock, (c) 91,724 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (d) 601,114 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(4) | Consists of (a) 72,56981,329 shares of common stock, (b) 19,321 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (c) 144,801 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(5) | Consists of (a) 79,228 shares of common stock, (b) 33,723 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (c) 179,497 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(6) | Consists of (a) 90,524 shares of common stock, (b) 19,80620,071 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (c) 141,307 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(7)(5)
| Consists of (a) 34,28262,374 shares of common stock, and (b) 23,73827,893 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (c) 105,660113,139 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(8)(6)
| Consists of (a) 14,143157,425 shares of common stock and (b) 3,203 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions and (c) 35,004 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(9) | Consists of (a) 12,255 shares of common stock and (b) 3,20338,089 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions). |
(10)(7)
| Consists of (a) 14,14322,314 shares of common stock, (b) 3,20318,842 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions), and (c) 88,139 of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
(8)
| Consists of (a) 19,905 shares of common stock, (b) 2,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (c) 11,813 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
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(9)
| Consists of (a) 8,06819,905 shares of common stock and (b) 3,2032,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions. |
(10)
| Consists of (a) 18,017 shares of common stock and (b) 2,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions). |
(12)(11)
| Consists of (a) 6,61313,830 shares of common stock and (b) 3,2032,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions). |
(13)(12)
| Consists of (a) 8,06813,830 shares of common stock and (b) 3,2032,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions). |
(14)(13)
| Consists of (a) 13,5425,893 shares of common stock and (b) 3,2032,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions). |
(15)(14)
| Consists of (a) 131 shares of common stock and (b) 3,2032,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions). |
(15)
| Consists of 2,414 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions). |
(16)
| Consists of (a) 913,851866,091 shares of common stock, (b) 289,256449,328 shares of unvested restricted stock (which may be forfeited based on satisfaction of the applicable vesting conditions) and (c) 1,650,3321,334,315 shares of common stock issuable upon the exercise of outstanding options that are currently exercisable. |
Beneficial
Ownershipownership of
More Thanmore than 5%
Shareholdersshareholders
Based on information available as of
MarchApril 1,
2022,2024, the following are the only beneficial owners of more than 5% of the
Company’scompany’s common stock:
| Name and Address of Beneficial Owner | Shares Beneficially Owned | % of Shares Beneficially Owned |
FMR LLC (1) 245 Summer Street Boston, Massachusetts 02110 | 18,012,735 | 13.25% |
BlackRock, Inc. (2) 55 East 52nd Street New York, New York 10055 | 15,634,593 | 10.80% |
The Vanguard Group (3) 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | 14,469,432 | 10.64% |
| Name and Address of Beneficial Owner | | | Shares
Beneficially Owned | | | % of Shares
Beneficially Owned |
BlackRock, Inc.(1)
50 Hudson Yards
New York, New York 10001 | | | 11,669,848 | | | 8.7% |
FMR LLC(2)
245 Summer Street
Boston, Massachusetts 02210 | | | 15,941,994 | | | 11.95% |
The Vanguard Group(3)
100 Vanguard Boulevard
Malvern, Pennsylvania 19355 | | | 13,352,578 | | | 10.01% |
(1)
| Based on a Schedule 13G/A filed with the SEC on January 25, 2024, BlackRock, Inc. has sole voting power over 11,274,738 shares of our common stock and sole dispositive power over 11,669,848 shares of our common stock. |
(2)
| Based on a Schedule 13G/A filed with the SEC on February 9, 2022,2024, FMR LLC has sole voting power over 1,792,34315,137,055 shares of our common stock and sole dispositive power over 18,012,73515,941,994 shares of our common stock. |
(2) | Based on a Schedule 13G/A filed with the SEC on January 27, 2022, BlackRock, Inc. has sole voting power over 15,303,475 shares of our common stock and sole dispositive power over 15,634,593 shares of our common stock. |
(3)
| Based on a Schedule 13G/A filed with the SEC on February 9, 2022,13, 2024, The Vanguard Group has shared voting power over 223,25149,059 shares of our common stock, sole dispositive power over 14,126,34713,161,346 shares of our common stock and shared dispositive power over 343,085191,232 shares of our common stock. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our common stock, to file reports of ownership and changes in ownership with the SEC. Such officers, directors and shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file with the SEC. To our knowledge, based on review of the copies of such reports and amendments to such reports furnished to us with respect to fiscal year 2021, and based on written representations by our current directors and executive officers, all required Section 16 reports under the Exchange Act for our directors, executive officers and beneficial owners of greater than 10% of our common stock were filed on a timely basis during fiscal year 2021 and fiscal year 2022 to date, with the following exceptions: (i) Lee Delaney had a Form 4 amendment filing on April 7, 2021 to correct the number of shares of restricted stock reported as acquired on April 1, 2021; and (ii) Monica Schwartz had a Form 4 amendment filing on August 25, 2021 to correct the number of shares withheld by the Company for payment of tax liability incident to the vesting of shares of restricted stock on August 3, 2021.
Certain
Relationshipsrelationships and
Related Person Transactionsrelated person transactions
Review and
Approvalapproval of
Related Person Transactionsrelated person transactions
The
Board of Directorsboard recognizes that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). The
Boardboard has adopted a written policy on transactions with related persons that is in conformity with the requirements for issuers having
publicly-heldpublicly held common stock listed on the NYSE. Our related person transaction policy requires that the
Audit Committeeaudit committee approve or ratify related person transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K (which are transactions in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any
"related person"“related person” as defined under Item 404(a) of Regulation S-K had or will have a direct or indirect material interest). It is our policy that
Directorsdirectors interested in a related person transaction will recuse themselves from any vote on a related person transaction in which they have an interest. Each of the transactions described below entered into following the adoption of our related person transaction policy was approved in accordance with such policy.
Certain Related Person Transactions
Mr. Kingsbury’s daughter was employed by the Company in a non-executive role during fiscal year 2021. She received compensation and was eligible to participate in benefit plans consistent with employees of the Company in comparable positions.
Indemnification Agreements
agreements
Our Bylawsbylaws provide that we indemnify our Directorsdirectors and officers to the fullest extent permitted by the Delaware General Corporation Law ("DGCL"(“DGCL”), subject to certain exceptions contained in our Bylaws.bylaws. In addition, our Chartercharter provides that our Directorsdirectors will not be liable for monetary damages for breach of fiduciary duty.
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We have entered into indemnification agreements with each of our executive officers and
Directors.directors. The indemnification agreements provide the indemnitees with contractual rights to indemnification, and expense advancement and reimbursement, to the fullest extent permitted under the DGCL, subject to certain exceptions contained in those agreements.
There is no pending litigation or proceeding naming any of our
Directorsdirectors or officers for which indemnification is being sought, and we are not aware of any pending litigation that may result in claims for indemnification by any
Directordirector or executive officer.
Shareholder Proposalsproposals and Director Nominationsdirector nominations
Shareholders who intend to have a proposal considered for inclusion in our proxy materials for presentation at the
20232025 Annual Meeting pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to our
Secretarysecretary at our offices at 350 Campus Drive, Marlborough, Massachusetts 01752, in writing not later than January
5, 2023.9, 2025.
Shareholders intending to present a proposal at the
20232025 Annual Meeting, but not to include the proposal in our Proxy Statement, or to nominate a person for election as a
Director,director, must comply with the requirements set forth in our
Bylaws.bylaws. Our
Bylawsbylaws require, among other things, that our
Secretarysecretary receive written notice from the shareholder of record at the time of giving notice of their intent to present such proposal or nomination not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the anniversary of the preceding year’s
Annual Meetingannual meeting of
Shareholders.shareholders. Therefore, we must receive notice of such a proposal or nomination for the
20232025 Annual Meeting no earlier than the close of business on February
16, 202320, 2025 and no later than the close of business on March
18, 2023.22, 2025. The notice must contain the information required by our
Bylaws.bylaws. In the event that the date of the
20232025 Annual Meeting is more than 30 days before or more than 60 days after June
16, 2023,20, 2025, then our
Secretarysecretary must receive such written notice not earlier than the close of business on the 120th day prior to the
20232025 Annual Meeting and not later than the close of business of the 90th day prior to the
20232025 Annual Meeting or, if later, the 10th day following the day on which public disclosure of the date of such meeting is first made by us. SEC rules permit management to vote proxies in its discretion in certain cases if the shareholder does not comply with this deadline and, in certain other cases notwithstanding the shareholder’s compliance with this deadline.
To comply with the universal proxy rules,
(once effective), shareholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April
17, 2023.21, 2025.
We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these or other applicable requirements.
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ABOUT THE ANNUAL MEETING
Why did I receive these proxy materials?
We are providing these proxy materials in connection with the solicitation by the Board of proxies to be voted at the Annual Meeting. We either (1) mailed you a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) notifying each shareholder entitled to vote at the Annual Meeting how to vote and how to electronically access a copy of this Proxy Statement and our Annual Report for the fiscal year ended February 3, 2024 (referred to as the “Proxy Materials”) or (2) if requested, mailed you a paper copy of the Proxy Materials. You received these Proxy Materials because you were a shareholder of record as of the close of business on April 29, 2024. If you have not received, but would like to receive, a paper copy of the Proxy Materials in paper format, you should follow the instructions for requesting such materials contained in the Notice of Internet Availability.
What does it mean if I receive more than one set of proxy materials?
It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each set of proxy materials, please submit your proxy by phone, via the Internet, or, if you received printed copies of the Proxy Materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope.
What is the date, time and location of the Annual Meeting?
The Annual Meeting will be held on Thursday, June 20, 2024 at 8:00 a.m., Eastern Time. The Company will be hosting the meeting live via the Internet. To attend the Annual Meeting via the Internet please visit www.virtualshareholdermeeting.com/BJ2024.
Shareholders who choose to attend the Annual Meeting will do so by accessing a live audio webcast of the Annual Meeting via the Internet at the link provided above. At this website, shareholders will be able to listen to the Annual Meeting live, submit questions and submit their vote while the Annual Meeting is being held. Please see “How Can I Attend and Vote at the Annual Meeting?” below for more information.
What is the purpose of the Annual Meeting?
The purpose of the Annual Meeting is to vote on the following items described in this Proxy Statement:
QUESTIONS AND ANSWERS
ABOUT THE ANNUAL MEETING
❖ |
Why did I receive these proxy materials? |
We are providing these proxy materials in connection with the solicitation by the Board of proxies to be voted at the Annual Meeting. We either (1) mailed you a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) notifying each shareholder entitled to vote at the Annual Meeting how to vote and how to electronically access a copy of this Proxy Statement and our Annual Report for the fiscal year ended January 29, 2022 (referred to as the “Proxy Materials”) or (2) if requested, mailed you a paper copy of the Proxy Materials. You received these Proxy Materials because you were a shareholder of record as of the close of business on April 25, 2022. If you have not received, but would like to receive, a paper copy of the Proxy Materials in paper format, you should follow the instructions for requesting such materials contained in the Notice of Internet Availability. |
|
What does it mean if I receive more than one set of proxy materials? |
It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each set of proxy materials, please submit your proxy by phone, via the Internet, or, if you received printed copies of the Proxy Materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope. |
|
What is the date, time and location of the Annual Meeting? |
The Annual Meeting will be held on Thursday, June 16, 2022 at 8:00 a.m., Eastern Time. The Company will be hosting the meeting live via the Internet. To attend the Annual Meeting via the Internet please visit www.virtualshareholdermeeting.com/BJ2022.
Shareholders who choose to attend the Annual Meeting will do so by accessing a live audio webcast of the Annual Meeting via the Internet at the link provided above. At this website, shareholders will be able to listen to the Annual Meeting live, submit questions and submit their vote while the Annual Meeting is being held. Please see "How Can I Attend and Vote at the Annual Meeting?" below for more information.
|
|
What is the purpose of the Annual Meeting? |
The purpose of the Annual Meeting is to vote on the following items described in this Proxy Statement: |
|
 No. 1: | | | Election of seven Directornine director nominees; |
❖ | | | Proposal No. 2: | | | Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers; and |
❖ | | | Proposal No. 3: | | | Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm; and |
Proposal No. 4: | Approval of an amendment to our Charter to eliminate supermajority vote requirements.firm for fiscal year 2024. |
49Are there any matters to be voted on at the Annual Meeting that are not included in this Proxy Statement?
Are there any matters to be voted on at the Annual Meeting that are not included in this proxy statement? |
| As of the date this Proxy Statement went to press, we did not know of any matters to be properly presented at the Annual Meeting other than those referred to in this Proxy Statement. If other matters are properly presented at the Annual Meeting or any continuation, postponement or adjournment thereof for consideration, and you are a shareholder of record and have submitted a proxy card, the persons named in your proxy card will have the discretion to vote on those matters for you. Who is entitled to attend and vote at the Annual Meeting? The board has set April 29, 2024 as the record date for the Annual Meeting. All persons who were registered holders of BJ’s Wholesale Club Holdings, Inc. common stock at the close of business on that date are shareholders of record for the purposes of the Annual Meeting and will be entitled to receive notice of, to attend and to vote at, the Annual Meeting TABLE OF CONTENTS or any continuation, postponement or adjournment thereof. At the close of business on the record date, there were 132,814,971 shares of our common stock issued and outstanding and entitled to vote. Each share of our common stock is entitled to one vote on any matter presented to shareholders at the Annual Meeting. Beneficial owners who, at the close of business on the record date, held their shares in an account with a broker, bank or other holder of record generally cannot vote their shares directly and instead must instruct the record holder how to vote their shares. See “How Do I Vote?—Beneficial Owners” below for more information. What are the deadlines to submit my vote? The deadlines to submit your votes for the Annual Meeting are set forth below. | | | | | | | | | | | | | | | | | | | | | Who is entitled to attend and vote at the Annual Meeting? | The Board has set April 25, 2022 as the record date for the Annual Meeting. All persons who were registered holders of BJ’s Wholesale Club Holdings, Inc. common stock at the close of business on that date are shareholders of record for the purposes of the Annual Meeting and will be entitled to receive notice of, to attend and to vote at, the Annual Meeting or any continuation, postponement or adjournment thereof. At the close of business on the Record Date, there were [_____] shares of our common stock issued and outstanding and entitled to vote. Each share of our common stock is entitled to one vote on any matter presented to shareholders at the Annual Meeting.
Beneficial owners who, at the close of business on the record date, held their shares in an account with a broker, bank or other holder of record generally cannot vote their shares directly and instead must instruct the record holder how to vote their shares. See “How Do I Vote?—Beneficial Owners” below for more information.
| | What are the deadlines to submit my vote? | The deadlines to submit your votes for the Annual Meeting are set forth below. |
Votes cast via the Internet must be received by 11:59 p.m. EDT on June 15, 202219, 2024.
|  | | | | | | | | Votes cast by scanning the QR Codecode must be received by 11:59 p.m. EDT on June 15, 2022.19, 2024.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Votes cast by phone must be received by 11:59 p.m. EDT on June 15, 2022.19, 2024.
|  | | | | | | | | Votes cast by mail must be received by 11:59 p.m. EDT on June 15, 2022.19, 2024. |  | | | | | | | | | | | | | | | | | | | | | | |
How do I vote?
Registered shareholders (that is, shareholders who hold shares in their own name) can vote in any of the following ways: | ❖ | How do I vote? | Registered shareholders (that is, shareholders who hold shares in their own name) can vote in any of the following ways: |
Via the internet: | | | Go to www.proxyvote.com to vote via the Internet using the 16-digit control number you were provided on your proxy card or Notice of Internet Availability. You will need to follow the instructions on the website. | ❖ | | | By QR code: | | | Scan the QR Codecode located on your proxy card or Notice of Internet Availability to access www.proxyvote.com and vote your shares online. Additional software may be required for scanning. | ❖
| | | By telephone: | | | Call 1 (800) 690-6903 from the United States. You will need to use the 16-digit control number you were provided on your proxy card or Notice of Internet Availability, and follow the instructions given by the voice prompts. |
❖ | | | By mail: | | | If you received a paper copy in the mail of the Proxy Materials and a proxy card, you may mark, sign, date and return your proxy card in the enclosed postage-paid envelope. You may also appoint a proxy to attend, speak and vote your shares at the Annual Meeting by submitting the proxy card and delivering such proxy to the Company’s General Counselcompany’s general counsel and Secretarysecretary at 25 Research350 Campus Drive, Westborough,Marlborough, Massachusetts 01581.01752. The proxy need not be a registered shareholder. Proxies must be received by the deadlines set forth below under “What Are the Deadlines to Submit My Vote?” | | | | | | | If you sign and return your proxy, but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Boardboard as described in this Proxy Statement. If any other matters are properly brought up at the Annual Meeting (other than the proposals contained in this Proxy Statement), then the named proxies will have the authority to vote your shares on those matters in |
TABLE OF CONTENTS | | | | | | accordance with their discretion and judgment. The Boardboard currently does not know of any matters to be raised at the Annual Meeting other than the proposals contained in this Proxy Statement. | | | | | | | If you vote via the Internet or by telephone, your electronic vote authorizes the named proxies in the same manner as if you signed, dated and returned a proxy card by mail. |
Beneficial owners that is, shareholders who shares are held in the name of a bank, broker or other holder of record (sometimes referred to as holding shares in “street name”), will receive voting instructions from the holder of record. You must follow the instructions of such broker, bank or other holder of record in order for your shares to be voted. Can I revoke my proxy or change my vote after I have voted? Yes. If you are a registered shareholder and previously voted by Internet, telephone, scanning a QR code or mail, you may revoke your proxy or change your vote by: Beneficial owners (that is, shareholders who shares are held in the name of a bank, broker or other holder of record (sometimes referred to as holding shares in “street name”), will receive voting instructions from the holder of record. You must follow the instructions of such broker, bank or other holder of record in order for your shares to be voted.▪ | | Can I revoke my proxy or change my vote after I have voted? | Yes. If you are a registered shareholder and previously voted by Internet, telephone, scanning a QR Code or mail, you may revoke your proxy or change your vote by: | ▪ voting online at the Annual Meeting; |
| ▪ | voting again by Internet, telephone or scanning the QR code as set forth above before the closing of those voting facilities at 11:59 pm EDT on June 15, 2022;19, 2024; |
| ▪ | mailing a proxy card that is properly signed and dated with a later date than your previous vote and that is received no later than 11:59 pm EDT on June 15, 2022;19, 2024; or |
| ▪ | sending a written notice of revocation to our General Counselgeneral counsel and Secretary,secretary, c/o BJ’s Wholesale Club Holdings, Inc., 25 Research350 Campus Drive, Marlborough, MA 01581,Massachusetts 01752, which must be received before the commencement of the Annual Meeting. | |
If you hold shares in street name, you may submit new voting instructions by contacting your broker, bank or other nominee. You may also change your vote or revoke your proxy at the Annual Meeting if you obtain a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the shares. |
|
Your most recent proxy card or telephone or Internet proxy is the one that is counted. Your attendance online (without further action) at the Annual Meeting by itself will not revoke your proxy unless you give written notice of revocation to the Company before your proxy is voted or you vote at the Annual Meeting. |
51
Your most recent proxy card or telephone or Internet proxy is the one that is counted. Your attendance online (without further action) at the Annual Meeting by itself will not revoke your proxy unless you give written notice of revocation to the company before your proxy is voted or you vote at the Annual Meeting.What if I do not specify how my shares are to be voted?
If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the board. The board’s recommendations are set forth below under “How Does the Board Recommend That I Vote?”, as well as with the description of each proposal in this Proxy Statement.
How can I attend and vote at the Annual Meeting?
To attend and participate in the Annual Meeting, shareholders may access the live audio webcast of the meeting in the following manner:
What if I do not specify how my shares are to be voted?❖ |
If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations are set forth below under “How Does the Board Recommend That I Vote?”, as well as with the description of each proposal in this Proxy Statement. |
|
How can I attend and vote at the Annual Meeting? |
To attend and participate in the Annual Meeting, shareholders may access the live audio webcast of the meeting in the following manner: |
Shareholders of record will need to log in at www.virtualshareholdermeeting.com/BJ2022 BJ2024 using their 16-digit control number provided in the Notice and Access Card and in the instructions that accompany the proxy materials. |
❖ | Beneficial owners of shares held in street name will need to follow the instructions provided by the broker, bank or other nominee that holds their shares. |
|
If you are unable to locate your control number, you will still be able to join the Annual Meeting as a guest by accessing www.virtualshareholdermeeting.com/BJ2022and following the guest login instructions; you will not, however, be able to vote or submit questions.
|
If you are unable to locate your control number, you will still be able to join the Annual Meeting as a guest by accessing www.virtualshareholdermeeting.com/BJ2024 and following the guest login instructions; you will not, however, be able to vote or submit questions.
Further instructions on how to attend, participate in and vote at the Annual Meeting, including how to demonstrate your ownership of our stock as of the record date, are available at www.virtualshareholdermeeting.com/BJ2024.
Further instructions on how to attend, participate in and vote at the Annual Meeting, including how to demonstrate your ownership of our stock as of the Record Date, are available at www.virtualshareholdermeeting.com/BJ2022. |
Access to the audio webcast of the Annual Meeting. The live audio webcast of the Annual Meeting will begin promptly at 8:00 a.m. Eastern Time. We encourage shareholders to login to this website and access the webcast before the Annual Meeting's start time. Online check-in will begin at 7:45 a.m., Eastern Time, and you should allow ample time for the check-in procedures. |
Submitting questions at the Annual Meeting. As part of the Annual Meeting, we will hold a live question and answer session, during which we intend to answer questions submitted during the Annual Meeting in accordance with the rules of conduct for the Annual Meeting that are pertinent to the Company and the meeting matters, as time permits. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once. The rules of conduct for the Annual Meeting will be available at www.virtualshareholdermeeting.com/BJ2022 during the Annual Meeting. Only shareholders who log in using their unique 16-digit control number, which appears on the Notice and Access Card and the instructions that accompany the proxy materials, will be able to submit questions at the Annual Meeting.
Availability of live webcast to team members and other constituents. The live audio webcast will be available not only to our shareholders, but also to our team members and other constituents. Such constituents will be able to attend the virtual Annual Meeting by accessing www.virtualshareholdermeeting.com/BJ2022 and following the guest login instructions; they will not, however, be able to vote or submit questions.
|
Webcast replay of the Annual Meeting. A webcast replay of the Annual Meeting will be available until the sooner of June 15, 2023 or the date of the next Annual Meeting of Shareholders to be held in 2023. |
Technical difficulties or trouble accessing the virtual meeting website. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting login page. |
|
How many shares must be present to hold the Annual Meeting? |
In order to establish a quorum at the Annual Meeting, the holders of a majority in voting power of the Company’s common stock issued and outstanding and entitled to vote, must be present by remote communication or represented by proxy. If you sign and return your paper proxy card or authorize a proxy to vote electronically or telephonically, your shares will be counted to determine whether we have a quorum even if you abstain, withhold or fail to vote as indicated in the proxy materials.53 |
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Access to the audio webcast of the Annual Meeting. The live audio webcast of the Annual Meeting will begin promptly at 8:00 a.m. Eastern Time. We encourage shareholders to login to this website and access the webcast before the Annual Meeting's start time. Online check-in will begin at 7:45 a.m., Eastern Time, and you should allow ample time for the check-in procedures.
Submitting questions at the Annual Meeting. As part of the Annual Meeting, we will hold a live question and answer session, during which we intend to answer questions submitted during the Annual Meeting in accordance with the rules of conduct for the Annual Meeting that are pertinent to the company and the meeting matters, as time permits. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once. The rules of conduct for the Annual Meeting will be available at www.virtualshareholdermeeting.com/BJ2024 during the Annual Meeting. Only shareholders who log in using their unique 16-digit control number, which appears on the Notice and Access Card and the instructions that accompany the proxy materials, will be able to submit questions at the Annual Meeting.
Availability of live webcast to team members and other constituents. The live audio webcast will be available not only to our shareholders, but also to our team members and other constituents. Such constituents will be able to attend the virtual Annual Meeting by accessing www.virtualshareholdermeeting.com/BJ2024 and following the guest login instructions; they will not, however, be able to vote or submit questions.
Webcast replay of the Annual Meeting. A webcast replay of the Annual Meeting will be available until the sooner of June 20, 2025 or the date of the next Annual Meeting of Shareholders to be held in 2025.
Technical difficulties or trouble accessing the virtual meeting website. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting login page.
How many shares must be present to hold the Annual Meeting?
In order to establish a quorum at the Annual Meeting, the holders of a majority in voting power of the company’s common stock issued and outstanding and entitled to vote, must be present by remote communication or represented by proxy. If you sign and return your paper proxy card or authorize a proxy to vote electronically or telephonically, your shares will be counted to determine whether we have a quorum even if you abstain, withhold or fail to vote as indicated in the proxy materials.
Broker non-votes will also be considered present for the purpose of determining whether there is a quorum for the Annual Meeting.
What if a quorum is not present at the Annual Meeting?
If a quorum is not present or represented at the scheduled time of the Annual Meeting, then either (i) the chairperson of the Annual Meeting or (ii) a majority in voting power of the shareholders entitled to vote at the Annual Meeting, present by remote communication or represented by proxy, may adjourn the Annual Meeting until a quorum is present or represented.
Broker non-votes will also be considered present for the purpose of determining whether there is a quorum for the Annual Meeting. |
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What if a quorum is not present at the Annual Meeting? |
If a quorum is not present or represented at the scheduled time of the Annual Meeting, then either (i) the chairperson of the Annual Meeting or (ii) a majority in voting power of the shareholders entitled to vote at the Annual Meeting, present by remote communication or represented by proxy, may adjourn the Annual Meeting until a quorum is present or represented. |
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How many votes are required to approve each proposal?54 |
TABLE OF CONTENTS
How many votes are required to approve each proposal?
The table below further summarizes the proposals that will be voted on, the vote required to approve each item and how votes are counted:
| Proposal | | | Votes Requiredrequired | | | Voting Optionsoptions | | | Impact of "Withhold"
“abstain”
non-votes | | | Broker Discretionary Voting Alloweddiscretionary voting allowed |
Election of Seven Director Nomineesnine director nominees
| | | The plurality of the votes cast. This means that the sevennine nominees receiving the highest number of affirmative "FOR"“FOR” votes will be elected as Directors.directors. | "
| | “FOR ALL EXCEPT"EXCEPT” | | | None(1) | | | No(3) |
Proposal No. 2:
Approval, on an Advisory (Non-Binding) Basis,advisory (non-binding) basis, of the Compensationcompensation of our Named Executive Officersnamed executive officers | | | The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions and broker non-votes) at the Annual Meeting by the holders entitled to vote thereon. | "FOR"
"AGAINST"
"ABSTAIN"
| | “FOR”
“AGAINST”
“ABSTAIN” | | | None(2) | | | No(3) |
Ratification of Appointmentappointment of Independent Registered Public Accounting Firmindependent registered public accounting firm
| | | The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions and broker non-votes) at the Annual Meeting by the holders entitled to vote thereon. | "FOR"
"AGAINST"
"ABSTAIN"
| | “FOR”
“AGAINST”
“ABSTAIN”
| | | None(2) | | | Yes(4) |
Proposal No. 4:
Approval of an Amendment to our Charter to Eliminate Supermajority Voting Requirements
| The affirmative vote of the holders of at least two-thirds of shares outstanding of stock entitled to vote thereon, voting together as a single class. | "FOR"
"AGAINST"
"ABSTAIN"
| Vote Against (5) | No (3) |
(1)
| Votes that are "withheld"“withheld” and broker non-votes will have the same effect as an abstention and will not count as a vote "FOR"“FOR” or "AGAINST"“AGAINST” a Director,director, because Directorsdirectors are elected by plurality voting. |
(2)
| A vote marked as an "Abstention"“Abstention” or a broker non-vote is not considered a vote cast and will, therefore, not affect the outcome of this proposal. |
(3)
| As this proposal is not considered a discretionary matter, brokers lack authority to exercise their discretion to vote uninstructed shares on this proposal. |
(4)
| As this proposal is considered a discretionary matter, brokers are permitted to exercise their discretion to vote uninstructed shares on this proposal. |
(5) | Abstentions and broker non-votes, if any, will have the effect of a vote "AGAINST" this proposal.55 |
TABLE OF CONTENTS
What is a “broker non-vote” and how does it affect voting?
A “broker non-vote” occurs when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a proposal because:
What is a "broker non-vote" and how does it affect voting?❖ |
A "broker non-vote" occurs when shares held by a broker in "street name" for a beneficial owner are not voted with respect to a proposal because:
the broker has not received voting instructions from the shareholder who beneficially owns the shares; and
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| ❖ | the broker lacks the authority to vote the shares at their discretion. |
Under current stock exchange interpretations that govern broker non-votes, each of Proposal 1 for the election of director nominees, Proposal 2 for approval, on an advisory (non-binding) basis and of the compensation of our named executive officers, is considered a non-discretionary matter, and a broker will lack the authority to vote uninstructed shares at their discretion on such proposal. Proposal 3 for ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2024, is considered a discretionary matter, and a broker will be permitted to exercise its discretion to vote uninstructed shares on the proposal.
How does the board recommend that I vote?
The board recommends that you vote:
Under current stock exchange interpretations that govern broker non-votes, each of Proposal No. 1 for the election of Director nominees, Proposal No. 2 for approval, on an advisory (non-binding) basis, of the compensation of our named executive officers and Proposal No. 4 for approval of an amendment to our Charter to eliminate the supermajority voting provisions relating to amendments to our Charter and Bylaws and to the removal of directors, is considered a non-discretionary matter, and a broker will lack the authority to vote uninstructed shares at their discretion on such proposal. Proposal No. 3 for ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2022, is considered a discretionary matter, and a broker will be permitted to exercise its discretion to vote uninstructed shares on the proposal.❖ |
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How does the board recommend that I vote? |
The Board recommends that you vote: |
FOR each of the nominee’s election to the Boardboard set forth in this Proxy Statement. |
❖ | FOR the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers. |
❖ | FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2022. |
FOR the approval of an amendment to our Charter to eliminate the supermajority voting provisions relating to amendments to our Charter and Bylaws and to the removal of directors. |
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Who will pay for the cost of this proxy solicitation? |
We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by Directors, officers or employees (for no additional compensation) in-person or by telephone, electronic transmission and facsimile transmission. Brokers, banks and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses. |
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Additional Information |
Availability of Materials |
Important notice regarding the availability of materials for the 2022 Annual Meeting of shareholders to be held on June 16, 2022: The Proxy Statement and Annual Report for the fiscal year ended January 29, 2021 are available free of charge at www.proxyvote.com.2024. |
Who will pay for the cost of this proxy solicitation?
54We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees (for no additional compensation) in-person or by telephone, electronic transmission and facsimile transmission. Brokers, banks and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses.
Availability of materials Important notice regarding the availability of materials for the 2024 Annual Meeting of shareholders to be held on Thursday, June 20, 2024: The Proxy Statement and Annual Report for the fiscal year ended February 3, 2024 are available free of charge at www.proxyvote.com.
Householding of shareholder documents
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more shareholders sharing the same address by delivering a single proxy statement or a single notice addressed to those shareholders. This process, which is commonly referred to as “householding,” provides cost savings for companies and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request prompt delivery of a copy of this Proxy Statement and the Annual Report by contacting the Broadridge Financial Solutions, Inc. at (866) 540-7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
Householding of Shareholder Documents |
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for Proxy Statements and notices with respect to two or more shareholders sharing the same address by delivering a single Proxy Statement or a single notice addressed to those shareholders. This process, which is commonly referred to as "householding," provides cost savings for companies and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single Proxy Statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Proxy Statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request prompt delivery of a copy of this Proxy Statement and the Annual Report by contacting the Broadridge Financial Solutions, Inc. at (866) 540-7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. |
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TABLE OF CONTENTS
ANNEX A
Proposed Charter Amendment
CERTIFICATETABLE OF AMENDMENT
OF
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BJ’S WHOLESALE CLUB HOLDINGS, INC.
(Pursuant to Section 242 of the General Corporation Law)
BJ’s Wholesale Club Holdings, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows:
FIRST: The Second Amended and Restated Certificate of Incorporation of the Corporation, as amended, is hereby further amended by deleting Section 3 of Article V in its entirety and inserting the following in lieu thereof:
Section 3. Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, any director may be removed from office, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation entitled to vote at an election of directors.
SECOND: The Second Amended and Restated Certificate of Incorporation of the Corporation, as amended, is hereby further amended by deleting Article X in its entirety and inserting the following in lieu thereof:
Section 1. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Second Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by this Second Amended and Restated Certificate of Incorporation and the DGCL, and all rights, preferences and privileges herein conferred upon stockholders, directors or any other persons herein are granted by and pursuant to this Second Amended and Restated Certificate of Incorporation in its current form or as hereafter amended are granted subject to the right reserved in this Article X. Notwithstanding the foregoing, any other provisions of this Second Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of stock required by law or by this Second Amended and Restated Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock entitled to vote thereon, voting together as a single class, at a duly constituted meeting of stockholders called expressly for such purpose, shall be required to alter, amend or repeal any provision of this Second Amended and Restated Certificate of Incorporation.
CONTENTS
Section 2. Except as otherwise provided by law, the Board is expressly authorized to make, repeal, alter, amend and rescind, in whole or in part, the Bylaws. Notwithstanding the foregoing, any other provisions of this Second Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of stock required by law or by this Second Amended and Restated Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock entitled to vote thereon, voting together as a single class, at a duly constituted meeting of stockholders called expressly for such purpose, shall be required in order for the stockholders of the Corporation to alter, amend or repeal, in whole or in part, any provision of the Bylaws or to adopt any provision inconsistent therewith.
Third: That the foregoing amendments to the Second Amended and Restated Certificate of Incorporation of the Corporation have been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
* * * *
0001531152 3 2023-01-29 2024-02-03
IN WITNESS WHEREOF, BJ’s Wholesale Club Holdings, Inc. has caused this Certificate of Amendment to be executed by its duly authorized officer on this ____ day of June, 2022.
| BJ’S WHOLESALE CLUB HOLDINGS, INC. |
| | |
| By: | |
| Name: | Graham N. Luce |
| Title: | SVP, Secretary |
