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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.  )
 
 
Filed by the Registrant ☒    Filed by a Party other than the Registrant ☐
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Pursuant to §240.14a–12
BURLINGTON STORES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
 
No fee required.
 
Fee paid previously with preliminary materials.
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.
 
 
 


Table of Contents

LOGO


Table of Contents

Preliminary Proxy Statement – Subject to Completion – Dated March 26, 2024

 

LOGO

Burlington Stores, Inc.

2006 Route 130 North

Burlington, New Jersey 08016

April [], 2024

 

LOGO

 

Dear Burlington Stockholder:

You are cordially invited to attend the 2024 Annual Meeting of Stockholders of Burlington Stores, Inc. at 8:00 a.m. Eastern Time on May 22, 2024. All holders of shares of our outstanding common stock as of the close of business on March 28, 2024 are entitled to vote at the meeting. This year, the annual meeting will again be held in a virtual-only format, allowing for enhanced accessibility for stockholders to attend the meeting from various locations. Details of the business to be conducted at the meeting are given in the Notice of 2024 Annual Meeting of Stockholders and the Proxy Statement, which are included on the following pages. Instructions for accessing the virtual meeting webcast online are also included in the Proxy Statement.

Your vote is important. Whether or not you plan to attend the annual meeting virtually, please vote as soon as possible. As an alternative to voting during the annual meeting, you may vote in advance via the internet, by telephone or, if you receive a paper proxy card in the mail, by mailing the completed proxy card. Voting by any of these methods will ensure you have a say on the important issues to be voted on at the annual meeting.

We appreciate your support of Burlington Stores, Inc.

Michael O’Sullivan

Chief Executive Officer


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BURLINGTON STORES, INC.

 

 

NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS

 

To Be Held On May 22, 2024

 

 

 Date:

 May 22, 2024

 

 Time:

 8:00 a.m. (Eastern Time)

 

 Location:

 Virtually online via live audio

 webcast at:

www.virtualshareholdermeeting.com/ BURL2024

 

 Record Date:

 March 28, 2024

 

    Items of Business 

 

    1.  

To elect the four directors nominated by Burlington Stores, Inc.’s Board of Directors and named in the accompanying Proxy Statement;

 

    2.  

To ratify the appointment of Deloitte & Touche LLP as Burlington Stores, Inc.’s independent registered certified public accounting firm for the fiscal year ending February 1, 2025;

 

    3.  

To obtain non-binding advisory approval of the compensation of Burlington Stores, Inc.’s named executive officers (“Say-on-Pay”);

 

    4.  

To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation providing for officer exculpation under Delaware law;

 

    5.  

To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to declassify the Board of Directors; and

 

    6.  

To consider any other business properly brought before the meeting and any adjournment or postponement of the meeting.

 

    The Board of Directors of Burlington Stores, Inc. unanimously recommends a vote FOR each director nominee named in Proposal 1 and FOR Proposals 2, 3, 4 and 5.

 

The text of the proposed amendments to the Company’s Amended and Restated Certificate of Incorporation is provided in Appendix B to the accompanying proxy statement, which is incorporated by reference.

Whether or not you plan to attend the annual meeting, please vote as soon as possible. As an alternative to voting during the annual meeting, you may vote in advance via the internet, by telephone or, if you receive a paper proxy card in the mail, by mailing a completed proxy card. For detailed information regarding voting instructions, please refer to the question entitled “How do I vote?” on page 8 of the Proxy Statement.

BY ORDER OF THE BOARD OF DIRECTORS

Karen Leu, Group Senior Vice President, General

Counsel and Corporate Secretary

Burlington, New Jersey

April [], 2024

 

 

Important notice regarding the availability of proxy materials for the

2024 Annual Meeting of Stockholders to be held on May 22, 2024:

This Notice of Annual Meeting, the accompanying Proxy Statement, and our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 are all available at www.proxyvote.com

YOUR VOTE IS IMPORTANT

PLEASE VOTE BY INTERNET OR TELEPHONE OR

SIGN, DATE, & RETURN YOUR PROXY CARD


Table of Contents
   

 

Table of Contents

 

SAFE HARBOR STATEMENT      1  
PROXY STATEMENT SUMMARY      2  
ABOUT THE ANNUAL MEETING      7  
LOGO PROPOSAL NO. 1—ELECTION OF DIRECTORS      12  

Overview of Our Board Structure

     12  

Nominees for Election at Annual Meeting

     13  

Recommendation of the Board of Directors

     14  

Directors Continuing in Office

     15  
INFORMATION ABOUT OUR EXECUTIVE OFFICERS      21  
CORPORATE GOVERNANCE      22  

Corporate Governance Guidelines

     22  

Majority Vote Standard for Election of Directors

     22  

Proxy Access

     23  

Board Leadership Structure

     23  

Board Oversight of Risk

     24  

Strategic Planning

     26  

Independent Directors

     26  

Meeting Attendance

     27  

Executive Sessions

     27  

Stockholder Engagement

     27  

Communications with the Board of Directors

     29  

Stock Ownership Guidelines

     29  

Director Orientation

     29  

Board and Committee Evaluations

     30  

Selecting Nominees to the Board of Directors

     30  

Board Service Policies

     31  

Board Refreshment

     32  

Code of Conduct and Code of Ethics

     32  

Culture and Corporate Social Responsibility

     33  
BOARD COMMITTEES      35  
DIRECTOR COMPENSATION      37  
LOGO PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM      39  

General

     39  

Principal Accountant Fees and Services

     40  

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

     40  

Recommendation of the Board of Directors and the Audit Committee

     40  
AUDIT COMMITTEE REPORT      41  
LOGO PROPOSAL NO. 3—ADVISORY VOTE ON EXECUTIVE COMPENSATION      42  

General

     42  

Recommendation of the Board of Directors

     42  
OWNERSHIP OF SECURITIES      43  

Securities Authorized for Issuance Under Equity Compensation Plans

     45  
EXECUTIVE COMPENSATION      46  

Compensation Discussion and Analysis

     46  

Report of the Compensation Committee

     63  

Compensation Committee Interlocks and Insider Participation

     63  

Compensation-Related Risk

     63  

Fiscal 2023 Summary Compensation Table

     65  

Fiscal 2023 Grants of Plan-Based Awards

     67  

Outstanding Equity Awards at Fiscal 2023 Year-End

     68  

Fiscal 2023 Option Exercises and Stock Vested

     70  

Pension Benefits

     71  

Nonqualified Deferred Compensation

     71  

Potential Payments Upon Termination or Change in Control

     71  

Pay Ratio

     75  

Pay Versus Performance

     76  
LOGO PROPOSAL NO. 4—APPROVAL OF AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION PROVIDING FOR OFFICER EXCULPATION UNDER DELAWARE LAW      79  

General

     79  

Proposed Charter Amendment

     79  

Recommendation of the Board of Directors

     80  
LOGO PROPOSAL NO. 5—APPROVAL OF AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS      81  

General

     81  

Proposed Charter Amendment

     81  

Recommendation of the Board of Directors

     82  
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS      83  
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2025 ANNUAL MEETING OF STOCKHOLDERS      84  
STOCKHOLDERS SHARING THE SAME ADDRESS      85  
FORM 10-K      86  
OTHER MATTERS      86  
APPENDIX A: Reconciliation of Non-GAAP Financial Measures      87  
APPENDIX B: Proposed Amendment and Restatement of the Company’s Certificate of Incorporation      88  
 

 

LOGOLOGO   Burlington Stores, Inc. 2024 Proxy Statement     |       i  


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Safe Harbor Statement

This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). All statements other than statements of historical fact included in this Proxy Statement, including those about our growth strategy, our diversity, equity and inclusion and corporate social responsibility initiatives, our plans or agreements that may require us to provide compensation to our executives upon the occurrence of future events, such as the achievement of Company objectives and the termination of an individual’s employment or a change in control of the Company, and those regarding expectations that certain performance goals and/or targets for management and/or the Company will be attained, are forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Our forward-looking statements are subject to risks and uncertainties. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual events or results to differ materially from those we expected, include: general economic conditions, such as inflation, and the domestic and international political situation and the related impact on consumer confidence and spending; competitive factors, including the scale and potential consolidation of some of our competitors, rise of e-commerce spending, pricing and promotional activities of major competitors, and an increase in competition within the markets in which we compete; seasonal fluctuations in our net sales, operating income and inventory levels; the reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located; our ability to identify changing consumer preferences and demand; our ability to meet our environmental, social or governance (“ESG”) goals or otherwise expectations of our stakeholders with respect to ESG matters; extreme and/or unseasonable weather conditions caused by climate change or otherwise adversely impacting demand; effects of public health crises, epidemics or pandemics; our ability to sustain our growth plans or successfully implement our long-range strategic plans; our ability to execute our opportunistic buying and inventory management process; our ability to optimize our existing stores or maintain favorable lease terms; the availability, selection and purchasing of attractive brand name merchandise on favorable terms; our ability to attract, train and retain quality employees and temporary personnel in sufficient numbers; labor costs and our ability to manage a large workforce; the solvency of parties with whom we do business and their willingness to perform their obligations to us; import risks, including tax and trade policies, tariffs and government regulations; disruption in our distribution network; our ability to protect our protect our information systems against service interruption, misappropriation of data, breaches of security, or other cyber-related attacks; risks related to the methods of payment we accept; the success of our advertising and marketing programs in generating sufficient levels of customer traffic and awareness; damage to our corporate reputation or brand; impact of potential loss of executives or other key personnel; our ability to comply with existing and changing laws, rules, regulations and local codes; lack of or insufficient insurance coverage; issues with merchandise safety and shrinkage; our ability to comply with increasingly rigorous privacy and data security regulations; impact of legal and regulatory proceedings relating to us; use of social media by us or by third parties our direction in violation of applicable laws and regulations; our ability to generate sufficient cash to fund our operations and service our debt obligations; our ability to comply with covenants in our debt agreements; the consequences of the possible conversion of our convertible notes; our reliance on dividends, distributions and other payments, advance and transfers of funds from our subsidiaries to meet our obligations; the volatility of our stock price; the impact of the anti-takeover provisions in our governing documents; impact of potential shareholder activism; and other risks discussed from time to time in our filings with the U.S. Securities and Exchange Commission (“SEC”), including those under the heading “Risk Factors” in Part I, Item IA of the Company’s Annual Report on 10-K for the year ended February 3, 2024.

Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law, even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this Proxy Statement might not occur. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements.

 

LOGOLOGO   Burlington Stores, Inc. 2024 Proxy Statement     |       1  


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Proxy Statement Summary

This summary highlights information about Burlington Stores, Inc. (referred to in this Proxy Statement as “we,” “us,” “our,” “Burlington” or the “Company”), our Board of Directors (the “Board” or the “Board of Directors”) and our upcoming 2024 Annual Meeting of Stockholders (the “Annual Meeting” or “2024 Annual Meeting”) contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and you should read the entire Proxy Statement carefully before voting.

This Proxy Statement includes several website addresses and references to additional materials found on those websites, including our Corporate Social Responsibility Report. These websites and materials are provided for convenience only and the content on the referenced websites is not incorporated by reference herein and does not constitute a part of the Proxy Statement or any of the Company’s other SEC filings.

Annual Meeting Information

 

 

 

   
 Date and Time:   

Wednesday, May 22, 2024
8:00 a.m. Eastern Time

 

 Location:   

Virtually online via live audio webcast

at: www.virtualshareholdermeeting.com/ BURL2024

 

 Record Date:   

March 28, 2024

 

Voting Matters and Board Recommendations

 

 

The Board of Directors recommends that you vote as follows on each proposal:

 

 Voting Matter   Board’s Recommendation   Page
Reference

Proposal 1:

   Election of Four Directors Nominated by the Board and Named in this Proxy Statement   FOR each director nominee   12

Proposal 2:

   Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Certified Public Accounting Firm for the Fiscal Year Ending February 1, 2025   FOR   39

Proposal 3:

   Non-Binding Advisory Approval of the Compensation of the Company’s Named Executive Officers (“Say-On-Pay”)   FOR   42

Proposal 4:

   Approval of Amendment to the Company’s Amended and Restated Certificate of Incorporation Providing for Officer Exculpation Under Delaware Law   FOR   79

Proposal 5:

   Approval of Amendment to the Company’s Amended and Restated Certificate of Incorporation to Declassify the Board of Directors   FOR   81

 

2   |   Burlington Stores, Inc. 2024 Proxy Statement   LOGOLOGO


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    PROXY STATEMENT SUMMARY

 

Company Overview

 

 

 

Headquartered in New Jersey, we are a nationally recognized off-price retailer with net sales of $9.7 billion for the fiscal year ended February 3, 2024 (“fiscal 2023”). We are a Fortune 500 company and our common stock is traded on the New York Stock Exchange under the ticker symbol “BURL.” We operated 1,007 stores as of the end of fiscal 2023 in 46 states, Washington D.C. and Puerto Rico, principally under the name Burlington Stores. Our stores offer an extensive selection of in-season, fashion-focused merchandise at up to 60% off other retailers’ prices, including women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. Under the oversight of our Board of Directors, we

continue to focus on a number of ongoing initiatives aimed at increasing our overall profitability, including:

 

  Driving Comparable Store Sales Growth

 

  Expanding and Enhancing Our Retail Store Base

 

  Enhancing Operating Margins

These strategies, which are more fully discussed in our Annual Report on Form 10-K for fiscal 2023 (the “fiscal 2023 10-K”), are designed to drive long-term value for our stockholders and maintain a sustainable competitive advantage.

 

 

Fiscal 2023 Performance

 

 

 

In fiscal 2023 we delivered strong financial results in a challenging environment. Below is a summary of our 53-week fiscal 2023 performance compared with our 52-week fiscal year ended January 28, 2023 (“fiscal 2022”):

 

  We generated total revenues of $9,727 million compared with $8,703 million in fiscal 2022

 

  Total sales increased 12%

 

  Net income increased 48%, or $110 million, to $340 million, or $5.23 per share vs. $3.49 per share in fiscal 2022, an increase of 50%

 

  In fiscal 2023 we acquired 64 Bed Bath & Beyond store leases, significantly strengthening our new store pipeline.

For purposes of comparison, for the 52 weeks ended January 27, 2024 compared with the 52 weeks ended January 28, 2023, and excluding approximately $18 million of expenses associated with the acquisition of the Bed Bath & Beyond store leases:

 

    Adjusted Net Income increased 44% to $405 million and Adjusted EPS was $6.24 vs. $4.26, an increase of 46%; and
    Adjusted EBIT increased 39%, or $166 million, to $596 million

 

  We opened 80 net new stores

In fiscal 2023 we also strengthened our balance sheet, enhanced our liquidity position, and returned significant excess cash to our stockholders. During the year, we used excess cash to pay down $110 million of our 2.25% Convertible Senior Notes due in 2025 and we returned $232 million to stockholders through common stock repurchases. We ended the fiscal year with $1.6 billion in liquidity, including $925 million in cash.

Information regarding how we calculate Adjusted Net Income (which is divided by our fully diluted weighted average shares outstanding for fiscal 2023 of 64,917 thousand and for fiscal 2022 of 65,901 thousand to arrive at Adjusted EPS) and Adjusted EBIT, and a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measure, is contained in Appendix A.

 

 

LOGOLOGO   Burlington Stores, Inc. 2024 Proxy Statement     |       3  


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PROXY STATEMENT SUMMARY    

 

Governance Highlights

 

 

Our Board believes that good corporate governance promotes the long-term interests of stockholders, enhances Board and management accountability and helps build public trust in the Company. The Corporate Governance section beginning on page 22 describes our corporate governance framework and commitment. Highlights of our corporate governance practices include:

 

    Independent Board Chair

 

    9 out of 10 directors are independent

 

    3 out of 10 directors (30%) are female

 

    3 out of 10 directors (30%) reflect ethnic/racial diversity

 

    At least 90% director and committee meeting attendance during fiscal 2023

 

    40% of our Board has a tenure of six years or less

 

    Majority voting standard and director resignation policy for directors in uncontested elections

 

    Majority of director compensation paid in stock

 

    Proxy access for director candidates nominated by eligible stockholders

 

    Annual Board, director and committee self-evaluations

 

    No unequal voting rights

 

    Robust CEO, executive and non-employee director stock ownership guidelines

 

    Corporate Governance Guidelines limit director membership on other public company boards

 

    Board oversight of environmental, social and governance (“ESG”) matters

 

    Robust stockholder engagement program, engaging with stockholders representing approximately 58% of our outstanding shares in conversations on governance, executive compensation, and ESG matters

 

    No stockholder rights plan or “poison pill”
 

 

Board of Directors

 

 

The following table provides summary information about our directors. Additional information about each director’s background and experience can be found beginning on page 13.

 

                     Committee
Memberships
 (1)
 Name   Primary or Former Occupation   Age   Director
Since
  Independent    AC    CC    NCGC

John J. Mahoney

 

Retired Vice Chairman, Staples, Inc.

Chairman of the Board

  72   2013     

 

  

 

  

 

Ted English

  Executive Chairman, Bob’s Discount Furniture   70   2016           

 

Michael Goodwin

  Former Senior Vice President, Chief Information Technology Officer, PetSmart, Inc.   63   2020        

 

  

 

Jordan Hitch

  Former Managing Director, Bain Capital   57   2006     

 

   C   

William P. McNamara

  Retired President, Macy’s Reinvent Strategies, Macy’s, Inc.   73   2014     

 

  

 

  

Michael O’Sullivan

 

Chief Executive Officer,

Burlington Stores, Inc.

  60   2019  

 

  

 

  

 

  

 

Jessica Rodriguez

  Former Chief Marketing Officer and President of Entertainment, Univision Communications Inc.   51   2018     

 

  

 

  

Laura J. Sen

  Former Non-Executive Chairman and Chief Executive Officer, BJ’s Wholesale Club, Inc.   67   2018        

 

  

 

Paul J. Sullivan

  Retired Partner, PricewaterhouseCoopers LLP   76   2012      C   

 

  

 

Mary Ann Tocio

  Retired President and Chief Operating Officer, Bright Horizons Family Solutions, Inc.   75   2015       

 

      C
  (1)

NCGC = Nominating and Corporate Governance Committee; CC = Compensation Committee; AC = Audit Committee; C= Chair

 

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    PROXY STATEMENT SUMMARY

 

Board Composition Highlights

The Board takes a thoughtful and deliberate approach to Board composition to ensure that our directors have the backgrounds, talents, skills, character, diversity, and expertise sufficient to provide sound and prudent guidance with respect to our operations and interests. Some of the key features of our Board composition are as follows:

 

 

LOGO

Corporate Social Responsibility

Our commitment to Corporate Social Responsibility (“CSR”) is reflected in our most recent annual CSR report, covering fiscal year 2022, which discusses our efforts, including focus areas covering ESG issues of greatest importance to our business and stakeholders. Our CSR efforts, which the Board oversees, are reflected across the following five pillars:

 

LOGO    LOGO    LOGO    LOGO    LOGO
Associates    Supply Chain    Communities    Governance and Ethics    Environment

Additional information about our CSR efforts can be found on page 34. We expect to publish our CSR report covering fiscal year 2023 in late Summer 2024.

 

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Executive Compensation Program Highlights

 

 

Our objective is to have an executive compensation program that will allow us to attract and retain executive officers of a caliber and level of experience necessary to effectively manage our business and to motivate those executive officers to drive stockholder value, consistent with our Core Values as described on page 33.

In fiscal 2023, approximately 90% of the target annual compensation for Mr. O’Sullivan, our Chief Executive Officer (the “CEO”), and approximately 81% of the average target annual compensation for our named executive officers (“NEOs”) other than Mr. O’Sullivan and Matt Pasch, who was promoted to the position of Executive Vice President and Chief Human Resources Officer mid-year, was “at-risk.”

Significant features of our executive compensation program include:

 

    Alignment of pay with Company financial performance

 

    Fifty percent of annual long-term incentive grants to NEOs is in the form of a performance stock unit (“PSU”) award

 

    Balance short-term and long-term incentives

 

    Annual stockholder Say-on-Pay votes

 

    Compensation Committee uses independent consultant

 

    Annual compensation risk assessment

 

    Independent Compensation Committee

 

    Robust CEO and executive stock ownership guidelines

 

    Limits on annual incentive award and PSU award payments

 

    Robust compensation recoupment (or “clawback”) policy

 

    Regular review of share utilization
×   No excise tax gross-ups  

 

×   No stock options granted below fair market value  

 

×   No option repricing without stockholder approval  

 

×   No hedging or pledging of Company stock by executive officers or directors  

 

×   No automatic “single-trigger” change in control vesting of equity awards  

 

×   No pension plans or supplemental executive retirement plans (SERPs)  

 

×   No guaranteed bonuses or salary increases  

 

×   No evergreen provision or reload options  

 

×   No liberal share recycling  
 

 

Please see the Compensation Discussion and Analysis beginning on page 46 for an overview of our executive compensation program together with a description of the material factors underlying the decisions that resulted in the fiscal 2023 compensation provided to the NEOs identified below.

 

 

 Named Executive Officers

 

    

Michael O’Sullivan

   Chief Executive Officer

Kristin Wolfe

   Executive Vice President and Chief Financial Officer

Jennifer Vecchio

   Group President and Chief Merchandising Officer

Travis Marquette

   President and Chief Operating Officer

Matthew Pasch

   Executive Vice President and Chief Human Resources Officer

Michael Allison

   Former Executive Vice President and Chief Administrative Officer

 

 

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2024 Proxy Statement

This Proxy Statement and the accompanying materials are being made available to stockholders of Burlington Stores, Inc. beginning on or about April [], 2024. In this Proxy Statement, you will find information on the matters to be presented at the Annual Meeting and information to assist you in voting your shares.

About the Annual Meeting

 

 

 

Who is soliciting my vote?

The Company is providing this Proxy Statement in connection with the solicitation by the Board of proxies to be voted at the Annual Meeting and at any reconvened or rescheduled meeting following any adjournment or postponement of the Annual Meeting.

What will I be voting on?

You will be voting on:

 

  Election of the four directors nominated by the Board and named in this Proxy Statement (Proposal 1);

 

  Ratification of the appointment of Deloitte & Touche LLP as our independent registered certified public accounting firm for the fiscal year ending February 1, 2025 (“fiscal 2024”) (Proposal 2);

 

  Non-binding advisory approval of the compensation of our NEOs (Say-On-Pay) (Proposal 3);

 

  Approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation providing for officer exculpation under Delaware law (Proposal 4);

 

  Approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to declassify the Board of Directors (Proposal 5); and

 

  Any other business that may properly come before the Annual Meeting and any adjournment or postponement of the Annual Meeting.

What are the Board of Directors voting recommendations?

The Board recommends that you vote:

 

  FOR each of the four directors nominated by the Board and named in this Proxy Statement (Proposal 1);

 

  FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered certified public accounting firm for fiscal 2024 (Proposal 2);

 

  FOR the non-binding advisory approval of the compensation of our NEOs (Proposal 3);
  FOR the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation providing for officer exculpation under Delaware law (Proposal 4); and

 

  FOR the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation to declassify the Board of Directors (Proposal 5).

Who is entitled to vote?

All stockholders who owned the Company’s common stock at the close of business on the record date, March 28, 2024, are entitled to attend and vote at the Annual Meeting, or at any adjournment or postponement of the Annual Meeting.

How many votes do I have?

You will have one vote on each matter for every share of the Company’s common stock you owned on the record date. There is no cumulative voting.

How many votes can be cast by all stockholders?

Each share of the Company’s common stock is entitled to one vote. On the record date, the Company had [] shares of common stock outstanding and entitled to vote.

How many shares must be present to hold the Annual Meeting?

A majority of the outstanding shares of the Company’s common stock must be present or represented by proxy at the Annual Meeting in order to have a quorum. If the persons present or represented by proxy at the Annual Meeting constitute the holders of less than a majority of the outstanding shares of common stock as of the record date, the Annual Meeting may be adjourned to a subsequent date for the purpose of obtaining a quorum.

 

 

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Shares are counted as present at the Annual Meeting if stockholders attend the meeting and vote virtually or if a proxy has been properly submitted by or on behalf of a stockholder. Abstentions and “broker non-votes” are counted for purposes of determining the presence of a quorum. A “broker non-vote” occurs when a bank, broker or other nominee (a “broker”) holding shares for a beneficial owner submits a proxy for the Annual Meeting without voting on a particular proposal because the broker has not received instructions from the beneficial owner and does not have discretionary voting power with respect to that proposal. A broker may exercise its discretionary voting power with respect to the ratification of the appointment of Deloitte & Touche LLP as our independent registered certified public accounting firm for fiscal 2024 (Proposal 2), but does not have discretion to vote with respect to the election of directors (Proposal 1), the non-binding advisory approval of the compensation of our NEOs (Proposal 3), the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation providing for officer exculpation under Delaware law (Proposal 4), or the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation to declassify the Board of Directors (Proposal 5).

How many votes are required to elect directors and approve the other proposals?

Our Amended and Restated Bylaws (the “Amended Bylaws”) require that, in an uncontested election of directors (Proposal 1), each director will be elected by a majority of the votes cast by the shares present virtually or represented by proxy at the Annual Meeting and entitled to vote in the election of such director such that the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee. Please see page 22 for a further description of our majority vote standard for the election of directors. Proposals 2 and 3 require the approval of the holders of a majority of votes present virtually or represented by proxy at the Annual Meeting and entitled to vote on the proposal. Proposal 4 requires the approval of the holders of the majority of outstanding shares entitled to vote on the proposal. Proposal 5 requires the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of all outstanding shares of capital stock of the Company entitled to vote generally in the election of directors. Abstentions have no effect on the determination of whether a director nominee has

received the requisite amount of votes cast (Proposal 1), but will have the same effect as a vote “against” Proposals 2, 3, 4 or 5. Broker non-votes have no effect on the determination of whether a director nominee is elected or whether Proposal 3 has received the requisite number of votes cast to pass, but will have the same effect as a vote “against” Proposals 4 or 5. There will not be any broker non-votes with respect to Proposal 2, because brokers will have discretionary voting authority on Proposal 2.

Why did I receive a one-page notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?

We take advantage of the SEC rules that allow issuers to furnish proxy materials to their stockholders on the internet. We believe these rules allow us to provide our stockholders with the information they need while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting. Consequently, most stockholders will not receive paper copies of our proxy materials. We will instead send these stockholders a Notice of Internet Availability of Proxy Materials, which indicates how our stockholders may: (i) access their proxy materials and vote their proxies over the internet or by telephone; or (ii) make a request to receive a printed set of proxy materials by mail.

How do I vote?

Registered Holders

If you are a “registered holder” (meaning your shares are registered in your name with our transfer agent, Equiniti Trust Company, LLC (“Equiniti ”)), then you may vote either during the Annual Meeting using the control number included on your Notice of Internet Availability of Proxy Materials or paper proxy card, or in advance of the Annual Meeting by proxy. If you decide to vote by proxy, you may vote via the internet, by telephone or by mail, and your shares will be voted at the Annual Meeting in the manner you direct. For those stockholders who receive a Notice of Internet Availability of Proxy Materials, the Notice provides information on how to access your online proxy card and vote via the internet or how to vote by telephone or receive a paper proxy card to vote by mail. Internet and telephone voting facilities for stockholders of record will close at 11:59 p.m. Eastern Time on May 21, 2024.

 

 

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In the event that you return a signed proxy card on which no directions are specified, your shares will be voted as the Board recommends.

Beneficial Holders

If, like most stockholders, you are a beneficial owner of shares held in “street name” (meaning a broker holds shares on your behalf), then you may vote during the Annual Meeting using the control number included on your Notice of Internet Availability of Proxy Materials or the instructions that accompanied your proxy materials.

Alternatively, you may provide instructions to the nominee that holds your shares to vote by completing, signing and returning the voting instruction card that the nominee provides to you, or by using the voting arrangements described on the voting instruction card, the Notice of Internet Availability of Proxy Materials or other materials that the nominee provides to you.

If you do not vote or provide voting instructions to your nominee, this results in a broker non-vote and the nominee will not vote your shares on the election of directors (Proposal 1), the non-binding advisory approval of the compensation of our NEOs (Proposal 3), the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation providing for officer exculpation under Delaware law (Proposal 4), or the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation to declassify the Board of Directors (Proposal 5), but your nominee may exercise its discretionary voting power with respect to the ratification of the appointment of Deloitte & Touche LLP as our independent registered certified public accounting firm for fiscal 2024 (Proposal 2) and register your shares as being present at the Annual Meeting for purposes of determining a quorum.

What does it mean if I receive more than one notice, proxy or voting instruction card?

It means that your shares may be registered differently or held in more than one account. Please provide voting instructions for all notices, proxy and voting instruction cards you receive. Certain brokers have procedures in place to discontinue duplicate mailings upon a stockholder’s request. You should contact your broker for more information.

Can I change my vote after I execute my proxy?

You may revoke or change a previously delivered proxy at any time before the Annual Meeting by delivering another proxy with a later date, by voting again via the internet or by telephone, or by delivering written notice of revocation of your proxy to our General Counsel and Corporate Secretary at our principal executive offices before the beginning of the Annual Meeting. You may also revoke your proxy by attending the Annual Meeting and voting virtually, although attendance at the Annual Meeting will not, by itself, revoke a valid proxy that was previously delivered. If you hold shares in “street name,” you must contact the nominee that holds the shares on your behalf to revoke any prior voting instructions. You also may revoke any prior voting instructions by voting virtually at the Annual Meeting using your control number as described above.

Will my vote be kept confidential?

Yes. The Company’s policy is that all proxy or voting instruction cards, ballots and vote tabulations which identify the vote of an individual stockholder are to be kept secret unless required by law. Your vote will be disclosed to Burlington or its agents only:

 

  to allow the independent election inspectors to certify the results of the vote;

 

  if there is a proxy contest involving us; or

 

  if you make a written comment on your proxy or voting instruction card.

How do I attend and ask questions at the Annual Meeting?

This year, the Annual Meeting will again be held in a virtual-only format. This meeting format provides for an opportunity for participation from any location that is safe and convenient to an attendee, and we are committed to ensuring that our attendees have substantially the same opportunities to participate in a virtual setting as they would at an in-person meeting.

If you are a registered holder, you can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/BURL2024 and entering the 16-digit control number previously

 

 

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provided to you in your proxy materials. If your shares are held in “street name,” your control number should be included with your voting instructions received from your broker or other nominee. Please follow the instructions on your Notice of Internet Availability, proxy card, voting instruction form or other applicable proxy notice that you received for accessing the virtual Annual Meeting. If your broker or other nominee has not provided you with your control number or if you have misplaced your control number, please contact them for instructions on how to attend the virtual Annual Meeting.

Stockholders who attend the virtual Annual Meeting by following the above instructions will have an opportunity to vote and to submit questions electronically in accordance with the rules of conduct for the meeting, which will be available for review during the meeting at www.virtualshareholdermeeting.com/BURL2024. Guests without a control number may access the virtual Annual Meeting by visiting the virtual meeting site provided above, but will not be able to vote or submit questions during the meeting.

We will answer questions during the meeting that comply with the rules of conduct as time permits. Responses to such questions that we do not have time to respond to during the Annual Meeting will be posted to our Investor Relations website following the Annual Meeting. If we receive substantially similar questions, we will group such questions together.

How can I request technical assistance during the Annual Meeting?

The meeting will begin promptly at 8:00 a.m. Eastern Time. You may access the meeting webcast 15 minutes prior to the start time, and we encourage you to allow ample time to log in and test your computer audio system. If you encounter any difficulty accessing the Annual Meeting, please call the Call Center Support number displayed on the login page for the Annual Meeting site.

Who pays for this proxy solicitation?

We will bear the entire cost of this solicitation of proxies, including the preparation, assembly, printing and mailing of the Notice of Internet Availability of Proxy Materials, this Proxy Statement, the proxy and any additional solicitation material that we may provide to stockholders. Copies of solicitation material will be

provided to brokerage firms, fiduciaries, custodians and other nominees holding shares in their names that are beneficially owned by others so that they may forward the solicitation material to such beneficial owners. We have hired Innisfree M&A Incorporated (“Innisfree”), a proxy solicitation firm, to assist in soliciting proxies for an estimated fee of $17,500 plus reimbursement of reasonable expenses. Further, the original solicitation of proxies by mail and through the internet may be supplemented by solicitation by mail, email, facsimile, personal interview or telephone and other means by our directors, officers and associates. No additional compensation will be paid to these individuals for any such services.

Who can I contact with questions?

If you have any questions or need assistance voting, please contact Innisfree. Stockholders may call 1-888-750-5834. Banks and brokers may call 1-212-750-5833.

Who are the proxyholders and how were they selected?

The proxyholders are Michael O’Sullivan, Kristin Wolfe and Karen Leu, each of whom was selected by our Board of Directors and is an officer of the Company. The proxyholders will vote all proxies, or record an abstention, in accordance with the directions on the proxy. If no direction is given, the shares will be voted as recommended by our Board of Directors.

Could other matters be decided at the Annual Meeting?

We do not know of any other matters that will be considered at the Annual Meeting. If any matter other than those described in this Proxy Statement arises at the Annual Meeting, the proxies will be voted at the discretion of the proxy holders.

Is a stockholder list available for examination?

For ten days prior to the Annual Meeting, a complete list of stockholders of record entitled to vote at the Annual Meeting will be available for examination by any stockholder for any purpose relevant to the Annual Meeting. Please contact our General Counsel and Corporate Secretary at 1-609-387-7800 x 53214 if you wish to examine the list prior to the Annual Meeting.

 

 

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Are there any stockholder proposals this year?

No stockholder proposals are included in this Proxy Statement, and we have not received notice of any stockholder proposals to be raised at the Annual Meeting.

Where and when will I be able to find the voting results?

You can find the official results of the voting at the Annual Meeting in our Current Report on Form 8-K that

we will file with the SEC within four business days after the Annual Meeting. If the official results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they become available.

 

 

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Proposal No. 1 — Election of Directors

Overview of Our Board Structure

 

 

The Board currently consists of ten members divided into three classes as nearly equal in size as is practicable (designated Class I, Class II and Class III), with one class being elected each year for a three-year term. Each director’s term continues until his or her successor shall have been duly elected and qualified, or until his or her earlier death, resignation, removal or retirement.

At the Annual Meeting, stockholders will consider the election of four directors for terms ending in 2027. The Board, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated Michael Goodwin, William McNamara, Michael O’Sullivan and Jessica Rodriguez, each a current Class II director, for election to the Board. In the event any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for a substitute nominee, if any, who may be designated by the Board to fill the vacancy. As of the date of this Proxy Statement, the Board is not aware that any nominee is unable or will decline to serve as a director.

In determining whether to nominate each of the current Class II directors for another term, the Board considered the factors discussed below under the caption entitled “Selecting Nominees to the Board of Directors,” and concluded that each of the nominees standing for election possesses unique experiences, qualifications, attributes and skills that will enable each of them to guide the Company in the best interests of its stockholders. There are no family relationships among directors and executive officers of the Company.

 

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    PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

Nominees for Election at Annual Meeting

 

 

The following sets forth the name, age and information regarding the business experience and qualifications of each of the Class II nominees whose terms are expiring at the Annual Meeting:

Class II Directors—Terms Expiring at the 2024 Annual Meeting

 

LOGO   

Michael Goodwin

 

Age: 63

 

Director since: 2020

 

Committee Membership:

  Audit

 

Skills and Experience: Broad-Based Business, Finance, Industry, Information Technology and Security, Leadership, Supply Chain

 

 

Key Qualifications:

 

Mr. Goodwin brings to the Board more than 30 years of information technology experience in the retail industry, including nearly two decades of C-Suite leadership. His wealth of expertise includes management of cybersecurity risks, fraud prevention, IT transformations, and development of strategic partnerships.

Career Highlights:

 

  Senior Vice President and Chief Information Technology Officer, PetSmart, Inc., a pet supply retailer, from 2014 to 2023

 

  Senior Vice President and Chief Information Officer of Technology and Business Enablement at Hallmark Cards, Inc. (“Hallmark”), a retailer of greeting cards and gifts, from 2006 until 2014

 

  Joined Hallmark as an information technology analyst in 1990 and held positions of increasing responsibility prior to becoming CIO

Other Public Company Boards:

 

  None

Other Biography Highlights:

 

  Prior to joining Hallmark, served as an officer in the United States Army

 

  NACD Directorship Certification
LOGO   

William P. McNamara

 

Age: 73

 

Director since: 2014

 

Committee Membership:

  Nominating and Corporate Governance

 

Skills and Experience: Broad-Based Business, Business Development/M&A, Industry, Leadership, Sales and Marketing, Supply Chain

 

 

Key Qualifications:

 

Mr. McNamara brings to the Board over 30 years of experience in retail chain management, equipping him with deep insights into consumer behavior, brand building and operational matters. His expertise encompasses merchandising, product development, retail store operations, distributions, and brand innovation.

Career Highlights:

 

  President of Macy’s Reinvent Strategies, a division of Macy’s, Inc., a department store retailer, from 2008 to 2009

 

  Chairman and Chief Executive Officer of the Midwest division of Macy’s, Inc. from 2005 to 2008

 

  Vice Chairman of May Department Stores Company, a department store retailer, from 2000 until its acquisition by Federated in 2005, responsible for all department store divisions

 

  President of The May Merchandising Company, a department store retailer, from 1998 to 2000, responsible for leading all brand merchandising and product development

 

  Began career at Filene’s, a division of May Department Stores, rising through the ranks of the merchandising organization

Other Public Company Boards:

 

  None
 

 

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS    

 

 

LOGO

  

Michael O’Sullivan

 

Age: 60

 

Director since: 2019

 

Committee Membership:

  None

 

Skills and Experience: Broad-Based Business, Finance, Industry, Information Technology and Security, Leadership, Public Company Board, Real Estate, Sales and Marketing, Supply Chain

 

 

Key Qualifications:

 

Mr. O’Sullivan’s day-to-day leadership and experience as our CEO gives him unique insights into our opportunities, challenges and operations. In addition to his experience as our CEO, he brings to the Board a wealth of knowledge and expertise from over 25 years of experience in the retail industry.

Career Highlights:

 

  Chief Executive Officer of Burlington Stores, Inc. since September 2019

 

  President and Chief Operating Officer of Ross Stores, Inc., an off-price retailer, from 2009 to 2019, and various roles at Ross Stores from 2003 to 2009

 

  Partner at Bain & Company, a global consulting firm, from 1991 to 2003, working with companies in the retail industry on business strategy and performance improvement

Other Public Company Boards:

 

  Ross Stores, Inc. from 2014 to 2019
LOGO   

Jessica Rodriguez

 

Age: 51

 

Director since: 2018

 

Committee Membership:

  Nominating and Corporate Governance

 

Skills and Experience: Broad-Based Business, Industry, Leadership, Public Company Board, Sales and Marketing

 

 

 

 

Key Qualifications:

 

Ms. Rodriguez brings to the Board extensive operational, marketing, and consumer engagement experience. Her long background in media and marketing provides deep insight into consumer behavior, brand development, and consumer social and digital engagement.

Career Highlights:

 

  Chief Marketing Officer and President of Entertainment of Univision Communications Inc., the leading media company serving Hispanic America, from 2018 until 2022, and Chief Brand Officer from 2021 until 2022

 

  President and Chief Operating Officer, Univision Networks, a division of Univision Communications Inc., from 2018 until 2022

 

  20-year tenure at Univision included roles of increasing responsibility, including as Executive Vice President of Programming Scheduling and Marketing, Senior Vice President of Univision Cable Networks and Station Manager & VP of Programming and Marketing at Univision Puerto Rico

Other Public Company Boards:

 

  Vera Bradley, Inc., a designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts, since January 2024
 

 

 

Recommendation of the Board of Directors

The Board of Directors unanimously recommends that the stockholders vote FOR the election of Michael Goodwin, William McNamara, Michael O’Sullivan and Jessica Rodriguez.

 

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    PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

Directors Continuing in Office

 

 

The following sets forth the name, age and information regarding the business experience and qualifications of each of the directors who will continue in office after the Annual Meeting:

Class I Directors—Terms Expiring at the 2026 Annual Meeting

 

LOGO   

Ted English

 

Age: 70

 

Director since: 2016

 

Committee Membership:

  Audit

  Compensation

 

Skills and Experience: Broad-Based Business, Business Development/M&A, Finance, Industry, Leadership, Public Company Board, Real Estate, Sales and Marketing, Supply Chain

 

 

Key Qualifications:

 

Mr. English brings to the Board more than 40 years of experience in the retail industry, including as chief executive of two leading off-price retail companies. His broad experience in large retail chain management encompasses marketing, finance and accounting, operational expertise, and supply chain management.

Career Highlights:

 

    Executive Chairman, Bob’s Discount Furniture, Inc., a premier discount home furnishings company, since March 2016

 

    Chief Executive Officer of Bob’s Discount Furniture from 2006 until March 2016

 

    President and Chief Executive Officer of TJX Companies, Inc., a leading off-price retailer of apparel and home fashions, from 2000 (and President from 1999) to 2005

 

    Chairman of The Marmaxx Group, a division of TJX, between 2000 and 2004, and held various other executive and merchandising positions with TJX from 1983 to 1999

Other Public Company Boards:

 

    None

Other Biography Highlights:

 

    Director of Bob’s Discount Furniture, Inc. since 2015

 

    Director of Rue Gilt Groupe (formerly Rue La La), an e-commerce destination connecting world-class brands with next generation shoppers, since 2013

 

    Member of the Board of Trustees of various funds within the multi-affiliate structure of Natixis Global Asset Management, a global asset management firm, since 2011

 

    Director of BJ’s Wholesale Club, Inc., membership-only warehouse chain, from 2006 to 2011
LOGO   

Jordan Hitch

 

Age: 57

 

Director since: 2006

 

Committee Membership:

  Compensation (Chair)

  Nominating and Corporate Governance

 

Skills and Experience: Broad-Based Business, Business Development/M&A, Finance, Industry, Public Company Board

 

 

 

Key Qualifications:

 

Mr. Hitch brings to the Board more than 25 years of experience investing in and serving as an adviser and board member for retail companies at multiple stages of growth. He also possesses valuable strategic and financial expertise, including significant experience with capital markets transactions.

Career Highlights:

 

    Active personal investor across a wide range of early-stage growth companies and renewable infrastructure projects

 

    Managing Director at Bain Capital, a private investment firm, until 2015, leaving the firm after 18 years, and Senior Advisor until 2017

Other Public Company Boards:

 

    Bright Horizons Family Solutions, Inc., an employer-sponsored childcare provider, since 2008

Other Biography Highlights:

 

    Member of the Board of Trustees of Lehigh University since 2014

 

    Current and former director of numerous private companies in the consumer and retail industries
 

 

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS    

 

LOGO   

Mary Ann Tocio

 

Age: 75

 

Director since: 2015

 

Committee Membership:

  Nominating and Corporate Governance (Chair)

  Compensation

 

Skills and Experience: Broad-Based Business, Business Development/M&A, Finance, Leadership, Public Company Board, Real Estate, Sales and Marketing

 

 

Key Qualifications:

 

Ms. Tocio brings to the Board more than 20 years of experience managing complex and growing organizations through acquisitions, global expansion, and business transformations. Her significant public company board service provides experience with corporate governance matters, risk management, and management oversight.

Career Highlights:

 

    President and Chief Operating Officer, Bright Horizons Family Solutions, Inc., an employer- sponsored childcare provider, from 2000 (and Chief Operating Officer from 1993) to 2015

 

    Prior to Bright Horizons, held several positions with Wellesley Medical Management, Inc. (Health Stop), including Senior Vice President of Operations

Other Public Company Boards:

 

    Bright Horizons Family Solutions, Inc., an employer-sponsored childcare provider, since 2001

 

    Director of 1Life Healthcare, Inc., a chain of primary healthcare clinics, from 2021 until its acquisition by Amazon.com, Inc. in 2023

 

    Director of Civitas Solutions, Inc. (The MENTOR Network), a provider of health and human services, from 2015 to 2019

 

    Mac-Gray Corporation, a provider of laundry facilities management services, from 2006 to 2013

Other Biography Highlights:

 

    Governing Trustee of the Dana Farber Cancer Institute since 2016
 

 

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    PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

Class III Directors—Terms Expiring at the 2025 Annual Meeting

 

LOGO   

John J. Mahoney

 

Chairman of the Board

 

Age: 72

 

Director since: 2013

 

Committee Membership:

  None

 

Skills and Experience: Broad-Based Business, Business Development/M&A, Finance, Industry, Information Technology and Security, Leadership, Public Company Board

 

 

Key Qualifications:

 

Mr. Mahoney brings to the Board over 30 years of financial expertise and over 25 years of retail industry experience, including as chief financial officer of a leading retailer. Serving as an accomplished director for a variety of consumer companies provides Mr. Mahoney with insight into the complex board oversight responsibilities for consumer businesses.

Career Highlights:

 

    Vice Chairman and Chief Financial Officer of Staples, Inc., a business and consumer goods retailer, from 2006 (and Chief Financial Officer from 1996) until 2012; also served as Executive Vice President, Chief Administrative Officer and Chief Financial Officer from 1997 to 2006

 

    Prior to joining Staples, served as a partner at Ernst & Young LLP, including service in the firm’s National Office Accounting and Auditing group

Other Public Company Boards:

 

    Bloomin’ Brands, Inc., a casual dining chain, since 2012

 

    Chico’s FAS, Inc., a fashion retailer, from 2007 through 2024

 

    The Michael’s Companies, Inc., an arts and crafts retail chain, from 2013 to 2021

 

    Zipcar, Inc., a leading car-sharing service, from 2010 to 2012

 

    Tweeter Home Entertainment Group, a national specialty consumer electronics retailer, from 2004 to 2007

 

    Advo, Inc., a leading direct mail marketing services company, from 2001 to its acquisition in 2007

Other Biography Highlights:

 

    Certified public accountant
LOGO   

Laura J. Sen

 

Age: 67

 

Director since: 2018

 

Committee Membership:

  Audit

 

Skills and Experience: Broad-Based Business, Finance, Industry, Information Technology and Security, Leadership, Public Company Board, Real Estate, Sales and Marketing, Supply Chain

 

 

 

Key Qualifications:

 

Ms. Sen brings to the Board over 25 years of retail management leadership, including critical roles growing BJ’s from an early-stage business to a Fortune 500 company. Her deep skillset encompasses operations, merchandising, logistics, and financial expertise. Ms. Sen’s director service in a variety of sectors equips her with an understanding of different businesses, challenges and strategies.

Career Highlights:

 

    Non-Executive Chairman of BJ’s Wholesale Club, Inc., a membership-only warehouse chain, from 2016 to 2018

 

    Chief Executive Officer of BJ’s from 2009 to 2016

 

    Chief Operating Officer of BJ’s from 2008 to 2009 and Executive Vice President of Merchandising and Logistics from 2007 to 2008 (and 1997 to 2003)

 

    Principal of Sen Retail Consulting, a consulting firm advising retail companies on merchandising and logistics, from 2003 to 2006

Other Public Company Boards:

 

    NCR Voyix Corporation, a software and services enterprise provider, since 2022

 

    EMC Corporation, a provider of enterprise storage systems, from 2015 to its acquisition in 2016

 

    rue21, inc., a specialty retailer, from 2012 to its acquisition in 2013

Other Biography Highlights:

 

    Director of BJ’s Wholesale Club, Inc. from 2009 to 2018

 

    Director of Massachusetts Mutual Life Insurance Company since 2012

 

    Director of Massachusetts Port Authority since 2017

 

    Director of Federal Reserve Bank of Boston from 2014 until 2016

 

    Director of Abington Savings Bank from 2001 until 2004
 

 

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS    

 

LOGO   

Paul J. Sullivan

 

Age: 76

 

Director since: 2012

 

Committee Membership:

  Audit (Chair)

 

Skills and Experience: Broad-Based Business, Business Development/M&A, Finance, Industry, Information Technology and Security, Leadership

 

 

Key Qualifications:

 

Mr. Sullivan brings to the Board over 35 years of financial expertise, including substantial experience in corporate finance and accounting and extensive experience providing audit and financial reporting services to numerous organizations.

Career Highlights:

 

    Partner, PricewaterhouseCoopers LLP from 1983 to 2009, including as a member of the Board of Partners, the Chair of the Finance Committee, and a member of the Management Evaluation and Compensation, Admissions and Strategy Committees

Other Public Company Boards:

 

    None

Other Biography Highlights:

 

    Certified public accountant
 

 

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    PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

Consideration of Skills and Experience

Below we identify and describe the key skills and experience that the Nominating and Corporate Governance Committee considers in concluding a director is qualified to serve on the Board. The Nominating and Corporate Governance Committee considers the skills and experience of directors and director nominees individually and in the broader context of the Board’s overall composition and the Company’s current and future needs. The experiences, qualifications, attributes and skills that the Board considered in the nomination of our directors are reflected in their individual biographies beginning on page 13 and the skills matrix below. The matrix is a summary; it does not include all the experiences and skills that each director offers, and if a particular experience or skill is not listed it should not suggest that it is not possessed by the director.

 

  Broad-Based Business Expertise: Such expertise provides a depth of experience from which to draw on in evaluating issues, deliberating, decision-making, and making business judgments.

 

  Business Development / Mergers and Acquisitions Experience: This experience is important because it helps in assessing potential growth opportunities.

 

  Finance Experience: An understanding of finance and related reporting processes is important for directors. We measure our operating and strategic performance by reference to financial goals, including for purposes of executive compensation. In addition, accurate financial reporting is critical to our success. Directors who are financially literate are better able to analyze our financial statements, capital structure and complex financial transactions, and ensure the effective oversight of our financial measures and internal control processes.

 

  Industry Experience: Industry experience gives directors a practical understanding of developing, implementing, and assessing our merchandising and customer engagement strategies.

 

  Information Technology and Security Experience: This experience is relevant given the importance of technology to the retail marketplace and the importance of protecting both our and our customers’ information.
  Leadership Experience: Directors with experience in significant senior leadership positions with large organizations over an extended period provide us with special insights. Strong leaders bring vision, strategic agility, diverse and global perspectives and broad business insight to the Company. These individuals demonstrate a practical understanding of how large organizations operate, including the importance of succession planning, talent management and how employee and executive compensation is set. They possess skills for managing change and growth and demonstrate a practical understanding of organizations, operations, processes, strategy, risk management and methods to drive growth.

 

  Public Company Board Experience: Directors who have experience on other public company boards develop an understanding of corporate governance trends affecting public companies and the extensive and complex oversight responsibilities associated with the role of a public company director. They also bring to the Company an understanding of different business processes, challenges and strategies.

 

  Real Estate Experience: Given our physical footprint, directors with real estate experience can provide insight on new opportunities and managing our existing locations.

 

  Sales and Marketing Experience: Directors with experience in dealing with consumers, particularly in the areas of marketing, marketing-related technology, advertising or otherwise selling products or services to consumers, provide us with valuable insights. They understand consumer needs and are experienced in identifying and developing marketing campaigns that might resonate with consumers, the use of technology and emerging and non-traditional marketing media, and identifying potential changes in consumer trends and buying habits.

 

  Supply Chain Experience: Directors with expertise in logistics and the management of relationships with suppliers provide important perspectives on achieving efficient operations and building partnerships to support growth.
 

 

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS    

 

 Director   Broad-
Based
Business
    Business
Development
/ M&A
    Finance     Industry     Information
Technology
and
Security
    Leadership     Public
Company
Board
    Real
Estate
    Sales and
Marketing
    Supply
Chain
 

Ted English

                                     

Michael Goodwin

                               

Jordan Hitch

                             

John Mahoney

                                 

William McNamara

                               

Michael O’Sullivan

                                     

Jessica Rodriguez

                             

Laura Sen

                                     

Paul Sullivan

                               

Mary Ann Tocio

                                                   

Collectively, the composition of our Board reflects a wide range of viewpoints, backgrounds and experience.

 

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Information About Our Executive Officers

Set forth below is the name, age and certain information regarding each of our executive officers other than Mr. O’Sullivan, whose biographical information is presented above.

 

 Jennifer Vecchio

 Group President and Chief Merchandising Officer

 

Ms. Vecchio, 58, has served as our Group President and Chief Merchandising Officer since July 2021. Prior to her promotion to this role, Ms. Vecchio served as our President and Chief Merchandising Officer from April 2019 through July 2021 and as our Chief Merchandising Officer/Principal from January 2017 through April 2019. From the commencement of her employment with us in May 2015 through January 2017, Ms. Vecchio served as our Executive Vice President and Chief Merchandising Officer. From January 2014 to May 2015, Ms. Vecchio provided consulting services to our merchandising organization. From 1997 to June 2011, Ms. Vecchio held various positions in the merchandising organization of Ross Stores, most recently serving as Executive Vice President of Merchandising—Mens/Kids from December 2009 through June 2011 and as Senior Vice President/GMM from February 2005 through December 2009 with various areas of responsibilities including Mens, Kids, Shoes, Lingerie and Hosiery. From 1988 through 1997, Ms. Vecchio held various positions in the merchandising organization of Macy’s.

 

 Travis Marquette

 President and Chief Operating Officer

 

Mr. Marquette, 52, has served as our President and Chief Operating Officer since October 2021. Before joining Burlington, Mr. Marquette served as the Executive Vice President and Chief Financial Officer of Ross Stores from March 2021 through his resignation in July 2021. Prior to that, he was Ross Stores’ Group Senior Vice President and Chief Financial Officer from 2019 to 2021, Group Senior Vice President and Deputy Chief Financial Officer from 2018 to 2019, and Senior Vice President, Finance from 2017 to 2018. He was also Senior Vice President, Store Operations from 2015 to 2017, Group Vice President, Store Operations from 2013 to 2015, and Vice President, Store Operations Finance from 2009 to 2013. Prior to joining Ross in 2008 as Director, Strategic Planning, Mr. Marquette held various consulting and management roles over a 12-year period with Bain & Company, Carter’s Inc., and PricewaterhouseCoopers.

 Kristin Wolfe

 Executive Vice President and Chief Financial Officer

 

Ms. Wolfe, 46, has served as our Executive Vice President and Chief Financial Officer since August 2022. Before joining Burlington, Ms. Wolfe served in a wide range of financial, strategic and operational roles at Ross Stores, Inc. Ms. Wolfe most recently served as Group Senior Vice President, Corporate Finance of Ross Stores, Inc. from 2021 through her resignation in May 2022. Between 2009 and 2021, Ms. Wolfe served in a number of other roles at Ross Stores, including Senior Vice President, Store Operations from 2018 to 2021, Group Vice President, Store Finance and Strategy from 2016 to 2018, Vice President, Store Finance and Strategy from 2014 to 2016, Senior Director, Corporate Strategy from 2012 to 2014 and Director, Store Operations Finance from 2009 to 2012. Prior to her career with Ross Stores, Ms. Wolfe held various roles over a 10-year period with Bain & Company.

 

 Matthew Pasch

 Executive Vice President and Chief Human Resources Officer

 

Mr. Pasch, 53, has served as our Executive Vice President and Chief Human Resources Officer since September 2023. Prior to his promotion to this role, he served as SVP of Human Resources from December 2021 through September 2023 and as SVP of Talent Acquisition, Benefits, Compensation, and HRIS from April 2019 through December 2021. From August 2013 through April 2019, Mr. Pasch served as Vice President of Talent Acquisition. He has also served as Director of Organizational Development and as Director of HR for Stores Support from the commencement of his employment with Burlington in April 2010 through February 2013. Prior to joining Burlington, Mr. Pasch held various roles in HR, Stores Support, and Supply Chain Operations over an eleven-year period with Finlay Fine Jewelry.

 

 

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Corporate Governance

The Board is committed to strong corporate governance because it promotes the long-term interests of stockholders, enhances Board and management accountability and helps build public trust in the Company. The Board has adopted policies and processes that foster effective Board oversight of critical matters such as strategy and risk management. The Board and its committees review our major governance documents, policies and processes regularly in the context of current corporate governance trends, regulatory changes and recognized best practices. Below is an overview of our corporate governance structure and processes, including key aspects of our Board operations.

Corporate Governance Guidelines

 

 

 

 

The Board has developed and adopted Corporate Governance Guidelines (the “Guidelines”) to assist the Board in the exercise of its responsibilities and to best serve the interests of the Company and its stockholders. The Guidelines cover matters including selection and composition of the Board; criteria for director independence; director compensation and performance evaluations; the operation, structure and meetings of the Board and the committees of the Board; and other matters relating to our corporate governance. The Guidelines also describe the Company’s stock ownership guidelines and

compensation recoupment (or “clawback”) policy, which is incremental to our policy (adopted by the Compensation Committee) complying with the requirements of Section 954 of the Dodd-Frank Act and the related rules and regulations promulgated by the SEC and the New York Stock Exchange (“NYSE”). The Guidelines are available in the Investor Relations section of our corporate website, which can be accessed at www.burlingtoninvestors.com, under “Governance—Governance Overview.” The information contained on our website does not constitute a part of this Proxy Statement.

 

 

Majority Vote Standard for Election of Directors

 

 

 

 

The Amended Bylaws require that, in an uncontested election, each director will be elected by a majority of the votes cast by the shares present virtually or represented by proxy at the Annual Meeting and entitled to vote in the election of such director, such that the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee. The Guidelines require that, following any election of directors other than a contested election of directors, any incumbent director who was a nominee and who did not receive a majority of the votes cast by the shares present virtually or represented by proxy at the meeting and entitled to vote on the election of directors must promptly tender his or her offer of resignation to the Board for consideration by the Board.

The Guidelines further provide that a recommendation on whether or not to accept such a resignation offer will then be made by the Nominating and Corporate Governance Committee or, if each member of the

Nominating and Corporate Governance Committee did not receive the required majority vote or the Nominating and Corporate Governance Committee is otherwise unable to act, a majority of the Board will appoint a special committee of independent directors for the purpose of making a recommendation to the Board (the committee with authority to act is referred to as “Nominating Committee”). If no independent directors received the required majority vote, the Guidelines require that the Board act on the resignation offers. Within 60 days following certification of the stockholder vote, the Nominating Committee will consider the resignation offer and recommend to the Board the action to be taken. Absent a compelling reason for the director to remain on the Board, as determined by the Board in its business judgment, the Board will accept the resignation offer. Any director who tenders his or her resignation will not participate in the Nominating Committee recommendation or Board action regarding whether to accept the resignation

 

 

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offer. The Board will determine whether to accept the resignation offer and publicly disclose the decision and the reasons for the decision, by a press release, a filing

with the SEC or other broadly disseminated means of communication, within 90 days following certification of the stockholder vote.

 

 

Proxy Access

 

 

 

Our Amended Bylaws permit a stockholder, or a group of up to 20 stockholders, owning at least 3% of our outstanding common stock continuously for at least three years, to nominate and include in our proxy materials for an annual meeting of stockholders director nominees constituting up to the greater of two

nominees or 20% of the number of directors in office. The stockholders’ proxy access rights are subject to the satisfaction of conditions and other requirements by the stockholders and the director nominees as specified in our Amended Bylaws.

 

 

Board Leadership Structure

 

 

 

John Mahoney has served as Chairman of the Board since February 2020 and as a member of the Board since December 2013. Under the Guidelines, a Chair of the Board shall be elected annually from among the directors by the Board, and the Board retains the right to exercise its discretion in combining or separating the offices of Board Chair and Chief Executive Officer. This determination is made depending on what is in the best interest of the Company in light of all circumstances. In the event that the Chair is not an independent director, the Guidelines provide that the Board will appoint an independent director to serve in a lead capacity (the “Lead Independent Director”), with clearly delineated duties set forth in the Guidelines. Mr. Mahoney served as the Lead Independent Director from March 2016 until his appointment as Chairman. As Mr. Mahoney is an independent director, the Board does not currently have a Lead Independent Director.

From his previous roles within senior management of Staples, Inc., as well as his former and current roles on public company boards that operate in a variety of industries and businesses, Mr. Mahoney brings to the Chairman role a career of leading large organizations. This expertise, combined with his extensive knowledge of Burlington and our strategic objectives and challenges, makes Mr. Mahoney well-positioned to continue in the Chairman role. Mr. Mahoney provides strong independent leadership to the Board, and the Board believes that having an independent Chair allows our Chief Executive Officer to focus on the operations of our business while the independent Chair focuses on leading the Board in its responsibilities.

Pursuant to our Amended Bylaws, the Board Chair will preside at all meetings of the Board at which he or she

is present and will have such powers and perform such duties as the Board of Directors may from time to time prescribe. Current additional responsibilities of the Chair include:

 

  Presiding over executive sessions of the independent directors;

 

  Presiding over the annual stockholders meeting;

 

  Having authority to call meetings of the Board and of the independent directors;

 

  Serving as a liaison and supplemental channel of communication between the CEO and the independent directors;

 

  Providing input on information sent to the Board;

 

  Approving agendas and schedules for meetings of the Board and coordinating with the committee chairs on the committee meeting agendas, including to assure sufficient time for discussion of agenda items and to determine the frequency and length of meetings;

 

  Setting the agenda for executive sessions of independent directors;

 

  Being available for consultation and direct communications with major stockholders;

 

  Leading the process for the annual review of CEO objectives and performance; and

 

  Leading the discussion of annual Board assessment results and communicating the results of individual director assessments.

The Board believes that its current leadership structure is appropriate and meets the Company’s current

 

 

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needs. The Board regularly assesses its leadership structure to determine the leadership structure that is the most appropriate for the Company at the time, including whether to combine the positions of Board Chair and Chief Executive Officer or keep them separate. In conducting such assessments, the Board may consider, among other things:

 

  The effectiveness of the policies, practices and management in place to help ensure strong, independent Board oversight;

 

  The Board’s performance and the effect a specific leadership structure could have on performance;

 

  The Board Chair’s performance in that role (separate and apart from his/her performance as CEO, if applicable);

 

  The views of our stockholders as expressed both during our stockholder engagement and through voting results at stockholder meetings;

 

  Applicable legislative and regulatory developments; and

 

  The practices at other similarly situated companies and trends in governance.
 

 

Board Oversight of Risk

 

 

 

The Board provides oversight of overall risks, with emphasis on strategic risks, which occurs as an integral and continuous part of the Board’s oversight of our business. For example, our principal strategic risks are reviewed as part of the Board’s regular discussion and consideration of our strategy, including the development and monitoring of specific initiatives and their overall alignment with our strategy. Similarly, the Board reviews the principal factors influencing our operating results, including the competitive environment, and discusses with our management the major events, activities and challenges affecting the Company.

While the Board is ultimately responsible for risk oversight, the Board has delegated to the Audit Committee the primary responsibility for oversight of our risk assessment and management process. The enterprise risk management process that we use to identify and manage key risks is designed so that management has processes in place to appropriately manage risk and considers a number of strategic, operational and macroeconomic and industry risks, including legal, regulatory and compliance risks, that could adversely impact the company or management’s achievement of business objectives.

Our internal audit department conducts an annual enterprise risk assessment to identify key risks across these categories, receiving feedback from members of senior management, the Board and Deloitte & Touche LLP, our independent registered certified public accounting firm, during the process. In conjunction with identifying enterprise risks, the internal audit department also undertakes an annual process to identify fraud risk. The Audit Committee reviews the results of these assessments and the related frameworks annually, and the Board and/or appropriate Board committees also discuss selected risks in more detail throughout the year. The head of the Company’s internal audit function regularly reports to the Audit Committee and, along with our Chief Financial Officer and representatives from Deloitte & Touche LLP, regularly meets in private sessions with the Audit Committee.

Our risk oversight process, including key risk focus areas for the Board and each of its committees, is summarized below. Additional detail regarding each committee’s oversight and responsibilities is included below under the caption entitled “Board Committees.”

 

 

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LOGO

Cybersecurity

Cybersecurity represents an important component of the Company’s overall cross-functional approach to risk management. Our cybersecurity practices are integrated into the Company’s enterprise risk management (“ERM”) approach, and cybersecurity risks are among the core enterprise risks identified for oversight by the Board through our annual ERM assessment. While the Board is ultimately responsible for risk oversight, the Audit Committee oversees the overall review of our policies and procedures with respect to risk assessment and risk management, and has oversight of information technology and security matters, which includes cybersecurity strategies and risks, as well as data privacy and data protection (“Information Security”). The Audit Committee oversees the management of risks from cybersecurity threats, including the policies, processes, and practices that the Company’s management implements to address risks from cybersecurity threats.

Cybersecurity oversight is more fully discussed in Item 1C (“Cybersecurity”) of our fiscal 2023 10-K.

 

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CORPORATE GOVERNANCE    

 

Environmental, Social and Governance

The Board provides oversight of the Company’s ESG matters. Because it encompasses such a broad area, ESG oversight is divided among several committees and the full Board.

 

 

The Audit Committee discusses risks related to ESG matters, as well as the steps management has taken to monitor and control such risks, and receives periodic reports from, and discusses related controls and procedures with, management regarding the Company’s ESG reporting and disclosures.

 

 

The Compensation Committee reviews the Company’s human capital management practices, including diversity, equity and inclusion programs.

 

 

The Nominating and Corporate Governance Committee reviews ESG trends, issues and concerns, including legislative and regulatory developments, that could significantly affect the public affairs of the Company and, in concert with the Board, reviews the Company’s strategies, practices and policies relating to, as well as engagement with stockholders and other stakeholders on, ESG matters.

See the section below entitled “Culture and Corporate Social Responsibility” for more information regarding our CSR efforts including focus areas covering ESG issues of greatest importance to our business and stakeholders.

Strategic Planning

 

 

 

Our Board has significant oversight of our corporate strategy and long-range operating plans. Acting as a full Board and through each independent Board committee, the Board is fully engaged in the Company’s strategic planning process. Setting the strategic course of the Company involves a high level of constructive engagement between management and the Board. Management develops and prioritizes strategic plans, which are then reviewed with the Board along with the Company’s challenges, industry dynamics and other factors.

Management provides the Board with updates throughout the year regarding the implementation and results of the Company’s strategic plans, as well as frequent updates regarding the Company’s financial performance. In addition, our CEO communicates regularly with the Board on important business opportunities and developments. As a result, the Board has substantial oversight of the development and implementation of the Company’s strategic plans, and the Board is able to effectively monitor the Company’s progress and provide meaningful feedback with respect to the strategic goals and objectives.

 

 

Independent Directors

 

 

 

Under the Guidelines, our Board will determine the independence of a director according to the definitions of “independent director” included in the pertinent listing standards of the NYSE and other relevant laws, rules and regulations. The Board evaluates any

relationships of each director and nominee, as well as any member of his or her immediate family, with the Company and makes an affirmative determination whether or not such director or nominee is independent.

 

 

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The Board has affirmatively determined that (i) each of our directors other than Mr. O’Sullivan, our CEO, is independent under the criteria established by the NYSE for director independence; (ii) Ms. Sen and Messrs. Sullivan, English and Goodwin meet the additional independence requirements of the NYSE

and the SEC applicable to Audit Committee members; and (iii) Ms. Tocio and Messrs. Hitch and English meet the additional independence requirements of the NYSE and the SEC applicable to Compensation Committee members.

 

 

LOGO

Meeting Attendance

 

 

 

During fiscal 2023, the Board held four meetings. Each director attended at least 90% of the meetings of the Board and of the committees of which such director was a member during this period.

We invite all incumbent directors, as well as all nominees for election as director, to attend the Annual Meeting, but we do not have a formal attendance requirement. All directors attended our 2023 Annual Meeting of Stockholders.

 

 

Executive Sessions

 

 

 

Our independent directors meet in separate executive sessions without management during regularly scheduled Board meetings to review matters concerning the relationship of the Board with

management and such other matters as deemed appropriate. The independent Chairman or the Lead Independent Director, as applicable, presides over executive sessions of the independent directors.

 

 

Stockholder Engagement

 

 

 

The Board values an open dialogue with stockholders and believes that it is important to foster long-term relationships and understand stockholder perspectives. We have a robust outreach program and routinely engage with stockholders to help the Board and management gain insights and feedback. During the course of these engagements, we seek input on a variety of corporate governance, executive compensation and ESG topics that may impact our business or reputation. These engagements include the participation of leaders from our investor relations,

legal and corporate social responsibility departments, as well as directors when requested and appropriate. Stockholder feedback is shared with our Board and its committees as appropriate.

 

This stockholder engagement program complements the ongoing dialogue throughout the year among stockholders and our Chief Executive Officer, Chief Financial Officer, and investor relations team on our long-term strategy, business results, operations and outlook.

 

 

 

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Our stockholder outreach efforts undertaken in connection with the 2024 Annual Meeting included engaging a number of our stockholders, collectively representing approximately 58% of our outstanding shares as of December 31, 2023. The stockholders to

which we reached out either arranged for individual discussions with us, informed us that a meeting was not necessary, or did not indicate that a meeting was necessary.

 

 

LOGO

 

Given the Board’s commitment to understanding the perspectives of our stockholders and to considering direct stockholder feedback, we believe that this process keeps our Board informed of stockholders’ priorities and allows the Board to address stockholder feedback effectively.

In recent years, we have taken a number of actions based on stockholder feedback to strengthen our corporate governance, executive compensation and ESG programs and related disclosure. For example, the Board adopted proxy access and implemented a majority voting standard in uncontested director elections; the Compensation Committee revised the design of our long-term incentive plan such that a significant portion of the awards made to our NEOs are now granted in the form of performance stock units with vesting based on pre-established goals linked to our performance; and we added a matrix to our Proxy Statement to describe each director’s skills. We also recently enhanced our chemical management program and set our first environmental targets for reducing Scope 1 and 2 greenhouse gas emissions, and we now publish our current EEO-1 report, which can be

accessed at www.burlingtoninvestors.com, under “Corporate Social Responsibility – Social.” The Compensation Committee also considered stockholder feedback when designing the structure of our 2024 PSU grants, as further discussed in the Compensation Discussion and Analysis below. These examples evidence our continued commitment to remain responsive on a variety of stockholder concerns.

Over the past year, we engaged extensively with our stockholders on governance matters, particularly regarding Board classification. Based on stockholder feedback from these discussions and an extensive review of prevailing corporate governance trends and market practices, our Board concluded that the declassification of the Board is in the best interests of the Company and our stockholders. Thus, we have included a proposal in this Proxy Statement to declassify the Board.

We encourage our stockholders to share feedback at any time, and the Board has established a process to facilitate stockholders’ communications with the Board as described below.

 

 

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Communications with the Board of Directors

 

 

 

Stockholders and other interested parties may communicate directly with the Board, the independent directors as a group or specified individual directors by writing to such individual or group care of our General Counsel and Corporate Secretary at the following address: Burlington Stores, Inc., 2006 Route 130 North, Burlington, New Jersey 08016. Our General Counsel and Corporate Secretary will forward all correspondence to the relevant group or individual.

In addition, the Audit Committee has adopted a policy to ensure that procedures are in place for the receipt,

retention and treatment of complaints or concerns regarding accounting, financial reporting, internal accounting controls or auditing matters of the Company, and complaints regarding these matters may be submitted to our Legal Department by email (BSIsubmissions@burlington.com) or by writing care of our General Counsel and Corporate Secretary at the address set forth in the immediately preceding paragraph. Complaints may also be submitted confidentially and anonymously by contacting our ethics and compliance hotline, which is maintained by an independent third-party service provider.

 

 

Stock Ownership Guidelines

 

 

 

We have a long-standing approach of compensating our executives, as well as our non-employee directors, in part with stock awards. We believe that retention of a meaningful amount of the Company’s stock encourages a long-term perspective and further aligns the interests of these individuals with those of our stockholders.

Accordingly, the Compensation Committee has adopted stock ownership guidelines providing that (i) the CEO should own shares of our common stock with a value equal to or exceeding six times his or her then-current base salary; (ii) the Company’s executive officers and the remaining members of the Company’s executive leadership team (excluding the CEO) should own shares of our common stock with a value equal to or exceeding three times his or her then-current base salary; and (iii) non-employee directors should own shares of our common stock with a value equal to or exceeding five times the annual base cash retainer paid to non-employee directors.

Stock ownership includes shares owned directly or held in trust by the individual and shares subject to unvested service-based restricted stock and restricted stock unit awards. Stock ownership under the guidelines does not include shares that an individual has the right to acquire through unvested performance-based restricted stock unit awards or shares subject to outstanding stock options (whether vested or unvested).

Until the required ownership level is reached, as determined by the Company, all individuals subject to the stock ownership guidelines will be required to retain 50% of the shares of common stock underlying each equity grant received from us after giving effect to any tax withholding obligations arising from the vesting or exercise of such grants.

As of the end of fiscal 2023, each continuing NEO and non-employee director owned shares in excess of the applicable guideline or was in compliance with the retention requirement described above.

 

 

Director Orientation

 

 

 

Director education about the Company and our industry is an ongoing process, which begins when a director joins the Board. Upon joining the Board, new directors are provided with an orientation about the Company, including our business, strategy and governance. During the orientation process, new directors have a series of meetings with executives responsible for each

of our business units to develop relationships and gain an understanding of the Company’s operations, strategies, challenges and opportunities. Based on input from our directors, we believe that the orientation process provides new directors with a strong foundation in our business and accelerates their ability to fully engage in Board deliberations.

 

 

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CORPORATE GOVERNANCE    

 

Board and Committee Evaluations

 

 

 

The Corporate Governance Guidelines provide that the Board and each of its committees should conduct an annual self-evaluation of its overall performance and effectiveness. Through this process, which is overseen by the Nominating and Corporate Governance

Committee, directors review the Board, its committees and individual (peer) directors, addressing areas where the Board feels it functions effectively, and importantly, areas where the Board believes it can improve.

 

 

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Selecting Nominees to the Board of Directors

 

 

 

Identification of Director Nominees

The Board is responsible for nominating candidates for election as directors by our stockholders and filling vacancies and new directorships on the Board, in each case based on the recommendation of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee identifies nominees by first considering the broader context of the Board’s overall composition and the Company’s current and future needs to establish which skills and experience are needed on the Board. Current members of the Board with skills and experience that are relevant for our business and who are willing to continue in service are considered for re-nomination, and the Board recognizes that incumbent directors should not expect to be renominated automatically or continually. The Nominating and Corporate Governance Committee will also periodically consider whether the Board should increase its size to add directors with relevant skills and experience or fresh perspectives that are needed on the Board. In the

event that the Board determines to nominate a new director, the Nominating and Corporate Governance Committee will then identify the desired skills and experience of a new nominee. The Nominating and Corporate Governance Committee may, in its discretion, also engage a consultant or search firm to assist in identifying qualified individuals.

As set forth in the Guidelines, it is the policy of our Board that directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of our stockholders. It is also the policy of the Board that the composition of the Board and its committees adheres to the standards of independence required by the NYSE and applicable law and reflect a range of talents, ages, skills, character, diversity (including gender and racial/ethnic diversity), and expertise sufficient to provide sound and prudent guidance with respect to the operations and interests of the Company.

 

 

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    CORPORATE GOVERNANCE

 

Director Candidates Recommended by Stockholders. The Nominating and Corporate Governance Committee will consider and evaluate persons recommended by stockholders in the same manner as it considers and evaluates other potential directors.

Proxy Access. Our Amended Bylaws enable eligible stockholders to have their own qualifying director nominee(s) included in the Company’s proxy materials, along with candidates nominated by our Board of Directors, as described in further detail above under the caption entitled “Proxy Access.”

Diversity and Board Tenure

The Board is committed to a diversified membership, in terms of both the individuals involved as well as their various experiences and areas of expertise. In connection with the selection of nominees for director, the Nominating and Corporate Governance Committee strives to identify and recruit high-caliber individuals whose diverse talents, perspectives, experiences and backgrounds (including any diverse qualities or attributes that are self-identified by the applicable candidate, such as gender, race and ethnicity) would preserve and enhance the inclusive environment in which the Board currently functions.

The Board also aims to maintain an appropriate balance of tenure across our directors. The charts below reflect the gender composition, diversity and Board tenure of our directors.

 

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Board Service Policies

 

 

 

Service on other boards

Our directors must be able to dedicate the time necessary for the diligent performance of their duties, including preparing for and attending Board and committee meetings. In this respect, the number of other public company boards our directors may join are generally limited to ensure that a director is not “over-boarded.” The Guidelines provide that directors who are executive officers should not serve on the board of more than one other public company (in addition to the Company), and no director should serve on more than three other boards of public companies in addition to our Board. In addition, no director may serve as a member of our Audit Committee if he or she serves on the audit committees of more than two other public companies unless the Board determines that such

simultaneous service would not impair the ability of such director to effectively serve on our Audit Committee.

Directors who change their present job responsibility

It is the sense of the Board that directors who retire or otherwise change from the principal occupation or background association they held when they were originally invited to join our Board should volunteer to resign from the Board. The Board does not believe that such directors should necessarily leave the Board. The Guidelines provide that there should, however, be an opportunity for the Nominating and Corporate Governance Committee to review with the Board the continued appropriateness of Board membership under the circumstances.

 

 

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CORPORATE GOVERNANCE    

 

Board Refreshment

 

 

 

The Board and the Nominating and Corporate Governance Committee frequently assess the composition of the Board and seek to strike a balance between the knowledge and understanding of our business that comes from longer-term service on the Board with the fresh ideas and perspective that can come from adding new members. The Board has determined that neither director term limits nor a mandatory retirement age is required to strike this balance.

While term limits or a mandatory retirement age could help ensure that there are new viewpoints available to the Board, they hold the disadvantage of losing the contribution of directors who over time have developed increasing insight into us and our operations, and therefore provide an increasing contribution to the Board as a whole. The Board believes it can continue to maintain a composition closely aligned with our business needs, including fresh perspectives, diverse viewpoints and relevant qualifications, through the

annual evaluation process and the process for nominating director candidates.

The Board recognizes that incumbent directors should not expect to be renominated automatically or continually. When considering nominations or new director appointments, the Nominating and Corporate Governance Committee and the Board consider the broader context of the Board’s overall composition and the Company’s current and future needs, and whether incumbent directors and any potential new directors possess skills and experience that are relevant to our business.

This process has yielded regular additions of accomplished directors with relevant skills. Recent additions to the Board include Michael Goodwin in December 2020, Michael O’Sullivan in September 2019, Jessica Rodriguez in October 2018 and Laura J. Sen in June 2018.

 

 

Code of Conduct and Code of Ethics

 

 

 

We have adopted a written code of conduct (the “Code of Conduct”) which applies to all of our directors, officers and other associates, including our principal executive officer, principal financial officer, principal accounting officer and controller. The Code of Conduct establishes policies and practices that address many issues, including the health, wellness and safety of our associates; unacceptable workplace conduct and harassment and discrimination; business ethics; product safety; and compliance with anti-bribery laws, among other things. As set forth in the Code of Conduct, we will not tolerate any retaliation against one of our associates who, in good faith, asks questions, makes reports of possible violations of the Code of Conduct, Company policies, applicable law, or assists in an investigation of suspected wrongdoing. To the greatest extent possible, all reports are responded to in a way that protects the privacy of everyone involved.

In addition to the Code of Conduct, we have also adopted a written Code of Ethics for the Chief Executive Officer and Senior Financial Officers (the “Code of

Ethics”). Copies of each code are available in the Investor Relations section of our corporate website, which can be accessed at www.burlingtoninvestors.com, under “Governance—Governance Overview.”

We will provide any person, without charge, upon request, a copy of our Code of Conduct or Code of Ethics. Such requests should be made in writing to the attention of our General Counsel and Corporate Secretary at the following address: Burlington Stores, Inc., 2006 Route 130 North, Burlington, New Jersey 08016. We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Conduct or the Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller by posting such information in the Investor Relations section of our corporate website, which can be accessed at www.burlingtoninvestors.com, under “Governance—Governance Overview.”

 

 

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    CORPORATE GOVERNANCE

 

Culture and Corporate Social Responsibility

 

 

 

Culture

At Burlington, we have a shared commitment to behaving and conducting our business ethically and with integrity. We live by our Core Values:

 

  Developing Trust and Respect among all members of the Burlington community. The way we do business is equally as important as the results we achieve. We have a shared commitment to conduct business ethically, and treat customers, business partners, and each other with trust and respect.

 

  Building Strong Teams and Partnerships through collaborative work. Through collaborative teamwork, we solve complex business challenges together.

 

  Driving Business Results by taking ownership and pride in Burlington, and getting things done well. We hold ourselves and each other accountable for our business success and have a shared sense of ownership to achieve our Company goals.

Adherence to our Core Values is part of the annual performance evaluation for all associates.

With our Core Values vital to our efforts, we strive to cultivate an environment where every associate feels valued, respected, and included. Associates are given an opportunity to share their perspectives by participating in our annual associate engagement survey. This is an important activity in our organization as it provides valuable feedback and helps us understand where we are succeeding and where we have opportunities to improve.

Our Board also, directly and through its committees, receives periodic updates on specific topics such as our diversity, equity and inclusion efforts and our strategies for attracting and retaining talent throughout the organization. In 2023, the full Board received a report on our diversity, equity and inclusion strategy and activities.

Each director also receives our annual Code of Conduct training, and from time to time the Board participates in store and distribution center tours and site visits to our buying offices to gain a real time view of our operations, product offerings, customer service and culture.

 

 

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CORPORATE GOVERNANCE    

 

Corporate Social Responsibility

Our commitment to CSR is reflected in our most recent annual CSR report, covering fiscal year 2022, which discusses our CSR efforts, including focus areas covering ESG issues of greatest importance to our business and stakeholders. Our CSR efforts, which the Board oversees, are reflected across the following five pillars:

 

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The theme of our most recent CSR report, Our Broader Value, highlights the value that our ever-evolving CSR program brings to our associates, customers, communities, and investors. We believe that CSR is fundamental across our organization—not only because it is the right thing to do and aligns with our values, but because it makes solid business sense. In a fast-moving retail sector, our approach seeks to address evolving CSR and ESG disclosure trends and deliver broader value to our associates, customers, and the communities where we live, work, and operate. In turn, we strive to mitigate risk to Burlington, attract diverse new talent, and realize efficiency savings that are fundamental to the off-price model. Consistent with prior years, we expect to publish our CSR report covering fiscal 2023 in late Summer 2024.

 

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Board Committees

We have three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. The Board is responsible for the appointment of committee members and committee chairs, taking into account the preferences of individual members and the recommendations of the Nominating and Corporate Governance Committee and of the Chairman. Pursuant to the Guidelines, the Board considers the rotation of committee membership and chairs at appropriate intervals, although the Board does not believe that rotation should be mandated as a policy.

Each standing committee has a written charter approved by the Board. A copy of each charter is available in the Investor Relations section of our corporate website, which can be accessed at www.burlingtoninvestors.com, under “Governance—Governance Overview.” The members of each standing committee, as of the date of this Proxy Statement, are identified in the following table:

 

 Director    Audit
Committee
   Compensation
Committee
   Nominating and
Corporate
Governance
Committee

Ted English

        

Michael Goodwin

        

Jordan Hitch

      Chair   

William P. McNamara

        

Jessica Rodriguez

        

Laura J. Sen

        

Paul J. Sullivan

   Chair      

Mary Ann Tocio

           Chair

 

 

Audit Committee

 

  

The purpose of the Audit Committee, as set forth in the Audit Committee charter, is primarily to assist the Board in fulfilling its oversight responsibility relating to:

 

  the integrity of the Company’s financial statements and its financial reporting process;

 

  the systems of internal accounting and financial controls;

 

  the performance of the Company’s internal audit function and independent auditor;

 

  the independent auditor’s qualifications and independence; and

 

  the Company’s compliance with legal and regulatory requirements.

 

As further described above, the Audit Committee also oversees the overall review of our policies and procedures with respect to risk assessment and risk management, and has oversight of our Information Security. The Audit Committee additionally provides oversight of the Company’s ethics and compliance program.

 

Each of Mr. Sullivan, Mr. English and Ms. Sen has been determined by our Board of Directors to be an “audit committee financial expert” within the meaning of Item 407 of Regulation S-K promulgated under the Exchange Act, and each member of the Audit Committee meets the requirements for financial literacy under applicable rules and regulations.

  

Number of meetings held in fiscal 2023:

8

 

Members:

Paul J. Sullivan (Chair)

Ted English

Michael Goodwin

Laura J. Sen

 

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BOARD COMMITTEES    

 

 

Compensation Committee

 

  

As set forth in its charter, the Compensation Committee’s primary purpose and responsibilities are to:

 

  review and approve corporate goals and objectives relevant to the CEO’s compensation, evaluate the CEO’s performance according to these goals and objectives and determine and approve the CEO’s compensation based on this evaluation;

 

  approve total compensation for executive vice presidents and officers above that level, including oversight of all related executive benefit plans;

 

  recommend to the Board for approval total compensation for the members of the Board;

 

  recommend to the Board for approval the Company’s incentive compensation plans and equity-based plans that are subject to Board approval;

 

  review and approve the creation or revision of any clawback policy for recoupment of compensation paid to executive officers; and

 

  produce a compensation committee report on executive compensation, as required by the SEC to be included in the Company’s annual proxy statement or Annual Report on Form 10-K filed with the SEC.

 

For additional description of the Compensation Committee’s processes and procedures for consideration and determination of executive officer compensation, see the section below entitled “Compensation Discussion and Analysis.”

  

Number of meetings held in fiscal
2023:

4

 

Members:

Jordan Hitch (Chair)

Ted English

Mary Ann Tocio

 

 

Nominating and Corporate Governance Committee

 

  

As set forth in its charter, the Nominating and Corporate Governance Committee’s primary purpose and responsibilities are to:

 

  develop and recommend qualification standards and other criteria for selecting new directors, identify individuals qualified to become Board members consistent with qualification standards and other criteria approved by the Board and recommend to the Board such individuals as nominees to the Board for its approval;

 

  oversee evaluations of the Board and the Board committees; and

 

  oversee matters of corporate governance.

  

Number of meetings held in fiscal
2023:

4

 

Members:

Mary Ann Tocio (Chair)

Jordan Hitch

William P. McNamara

Jessica Rodriguez

 

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Director Compensation

 

Compensation Philosophy

The Compensation Committee reviews director compensation at least annually and recommends any changes to the Board for approval. The Compensation Committee assesses director compensation to align with Board and committee requirements and for market competitiveness against the Company’s compensation peer group as described on page 53. In making these assessments, the Compensation Committee reviews analyses prepared by Meridian Compensation Partners LLC (“Meridian”), the Compensation Committee’s independent consultant.

Burlington’s philosophy on compensating its independent, non-management directors is to use a mix of cash and equity that will align the interests of our directors with the long-term interests of our stockholders and compensate our directors fairly and competitively for the obligations and responsibilities of serving on the Board. To implement this philosophy, we target a split between cash and equity, with total target compensation at or near the peer group median, utilizing the same peer group used to evaluate executive compensation decisions.

Directors who are Company associates do not receive directors’ fees or equity grants based on their Board service. Accordingly, Mr. O’Sullivan does not receive any additional compensation for his service on the Board. Compensation provided to Mr. O’Sullivan in his capacity as an executive officer is provided in the Fiscal 2023 Summary Compensation Table. Our independent, non-management directors receive compensation for their service as described below. All directors are entitled to receive reimbursement for out-of-pocket expenses incurred in connection with their service on the Board. No perquisites are provided to our independent, non-management directors.

Annual Cash Retainers

The cash retainer component of our director compensation program for fiscal 2023 consisted of the

following, which did not change as compared to the fiscal 2022 director compensation program:

 

 Regular Retainer      

Annual Base Retainer

  $ 90,000  
 Committee Retainers      

Chair of the Audit Committee

  $ 30,000  

Non-Chair Members of the Audit Committee

  $ 18,000  

Chair of the Compensation Committee

  $ 25,000  

Non-Chair Members of the Compensation

Committee

 

$

12,000

 

Chair of the Nominating and Corporate

Governance Committee

 

$

20,000

 

Non-Chair Members of Nominating and Corporate Governance Committee

  $ 10,000  
 Independent Chair of the Board      

Additional Retainer

  $ 200,000  

Cash retainers are payable in equal quarterly installments and pro-rated for partial quarters. Our directors do not receive any meeting fees.

Stock Awards

The Board believes that director stock ownership is a mark of strong corporate governance and provides greater alignment of interests between directors and stockholders. Accordingly, the compensation plan adopted by the Board for independent, non-management directors provides a majority of each such director’s annual compensation to be based on Burlington stock. For fiscal 2023, each independent, non-management director received a grant of restricted stock units (“RSUs”) with a market value at the time of grant of $165,000, made following the Company’s 2023 Annual Meeting of Stockholders. The market value for the fiscal 2023 RSU grants did not change as compared to the fiscal 2022 RSU grants to our independent, non-management directors.

 

 

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DIRECTOR COMPENSATION    

 

The fiscal 2023 RSUs are scheduled to vest on May 18, 2024, subject to the director’s continued service on the Board through such date.

If a director’s service on the Board terminates prior to the full vesting of an RSU award by reason of the director’s death or retirement, such director will become fully vested upon death or on a pro-rata basis as of the date of retirement. Vesting of RSUs does not accelerate by reason of a change in control; provided, however, that 100% of such RSUs will vest if the recipient ceases to serve as a director following such change in control and prior to the vesting date. Directors are not entitled to any privileges of ownership with respect to the shares subject to RSU awards (including, without limitation, voting rights or the right to receive dividends) unless and until, and only to the extent, such shares become vested.

The following chart illustrates the annual director compensation program, excluding committee and Board Chair fees:

 

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Fiscal 2023 Director Compensation

The table below summarizes the compensation paid to our independent, non-management directors for fiscal 2023.

 

Name

 

Fees

Earned
or Paid
in Cash
($)(1)

    Stock
Awards
($)(2)
  Option
Awards
($)
    Non-Equity
Incentive Plan
Compensation
($)
   

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings

($)

    All Other
Compensation
($)
   

Total 

($) 

Ted English

    120,000     164,879                           284,879 

Michael Goodwin

    108,000     164,879                           272,879 

Jordan Hitch

    125,000     164,879                           289,879 

John J. Mahoney

    290,000     164,879                           454,879 

William P. McNamara

    100,000     164,879                           264,879 

Jessica Rodriguez

    100,000     164,879                           264,879 

Laura J. Sen

    108,000     164,879                           272,879 

Paul J. Sullivan

    120,000     164,879                           284,879 

Mary Ann Tocio

    122,000     164,879                           286,879 

 

(1)

Represents each director’s annual fee as compensation for services as a director and each director’s annual fee as compensation for such director’s services as Board Chair or as a committee member or chair, as applicable.

 

(2)

Amounts shown represent the aggregate grant date fair value of the fiscal 2023 RSU awards. The amounts shown were calculated in accordance with FASB ASC Topic 718. On May 18, 2023, the first business day following our 2023 Annual Meeting of Stockholders, each non-management director was granted an award of 934 RSUs pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (the “2022 Incentive Plan”). The RSUs granted to each director have a grant date fair value of $176.53 per unit, such amount representing the closing price of our common stock on the grant date. As of February 3, 2024, each independent, non-management director had 934 unvested RSUs outstanding.

 

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Proposal No. 2 — Ratification of Independent Registered Certified Public Accounting Firm

General

 

 

 

As described in its charter, the Audit Committee is directly responsible for the appointment, retention and termination, evaluation, compensation, review and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, and each such registered public accounting firm must report directly to the Audit Committee.

As part of its auditor engagement process, the Audit Committee periodically considers whether to rotate its registered public accounting firm. Deloitte & Touche LLP (“Deloitte”) has been the independent registered certified accounting firm of the Company since 1983. For fiscal 2024, the Audit Committee has again selected Deloitte as the Company’s independent registered certified public accounting firm to audit our financial statements. Deloitte rotates its lead audit engagement partner every five years; the Audit Committee interviews proposed candidates and selects the lead audit engagement partner.

In engaging Deloitte for fiscal 2024, the Audit Committee conducted an evaluation and selection process that included consideration of the following:

 

  Deloitte’s performance during fiscal 2023 and in previous fiscal years, including the quality of Deloitte’s services, the sufficiency of Deloitte’s resources, Deloitte’s communications skills and Deloitte’s independence and objectivity;

 

  Management’s assessment of the services Deloitte provided in fiscal 2023;

 

  Deloitte’s tenure as the Company’s independent registered public accounting firm and its related depth of understanding the Company’s business, operations and systems, as well as accounting policies and practices;

 

  Deloitte’s approach and plan for the audit of our financial statements and the effectiveness of our internal control over financial reporting;
  Deloitte’s expertise and experience in the retail industry;

 

  The experience, professional qualifications and education of the Deloitte engagement team;

 

  A review of Deloitte’s independence program and the processes it uses to maintain independence;

 

  The scope of Deloitte’s internal quality control program and the results of its most recent quality control reviews, including reviews by the Public Company Accounting Oversight Board and Deloitte’s peers;

 

  A review of Deloitte’s recent legal or regulatory issues that may impact its ability to provide services to us;

 

  The appropriateness of Deloitte’s fees for its professional services; and

 

  The relative benefits, challenges, overall advisability and potential impact of selecting a different registered public accounting firm.

After thoroughly considering the criteria set forth above, the Audit Committee and the Board believe that the continued retention of Deloitte as the Company’s independent registered certified public accounting firm is in the best interests of the Company and its stockholders. Although not required, the Board believes that it is a sound corporate governance practice to seek stockholder ratification of Deloitte’s appointment. In the event the stockholders do not ratify the appointment, the Audit Committee will reconsider this appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered certified public accounting firm at any time during the year if the Audit Committee determines that such a change would be in our and our stockholders’ best interests.

Representatives of Deloitte are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. Those representatives will also be available to respond to appropriate questions.

 

 

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PROPOSAL NO. 2 — RATIFICATION OF INDEPENDENT

REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

   

 

Principal Accountant Fees and Services

 

 

The following table sets forth the aggregate fees for services rendered by Deloitte, our independent registered certified public accounting firm, during fiscal 2023 and fiscal 2022:

 

     2023      2022   

Audit Fees (1)

   $ 1,547,014      $ 1,432,363   

Audit-Related Fees (2)

          $ 25,150   

Tax Fees (3)

   $ 212,771      $ 40,321   

All Other Fees

            —   

Total

   $ 1,759,785      $ 1,497,834   

 

(1)

Audit Fees—represents fees associated with the audit of the Company’s Consolidated Financial Statements included in its Annual Report on Form 10-K and the review of the Company’s quarterly Condensed Consolidated Financial Statements included in its Quarterly Reports on Form 10-Q that are customary under the standards of the Public Company Accounting Oversight Board (United States), debt offerings and statutory audits.

 

(2)

Audit-Related Fees—represents fees for services that were provided by our independent registered certified public accounting firm in connection with the filing of our Registration Statement on Form S-8 in May 2022.

 

(3)

Tax Fees—represents fees incurred in connection with a strategic tax review, the filing of tax returns, and other tax consulting/advisory services.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

 

 

In accordance with its charter, the Audit Committee must pre-approve all audit and permissible non-audit services. The Audit Committee has pre-approved up to $100,000 in services provided by Deloitte for tax consulting services on an annual basis. Additionally, the Audit Committee has delegated authority to its Chair, Mr. Sullivan, to pre-approve Deloitte’s services without consultation with the full Audit Committee, provided Mr. Sullivan presents pre-approval decisions to the full Committee at its next scheduled meeting. The Audit Committee reviews on at least a quarterly basis the services provided to date by Deloitte and the fees incurred for those services. In its review of any non-audit service fees, the Audit Committee will consider, among other things, the possible effect of the performance of such services on the independence of Deloitte. All services provided by Deloitte during fiscal 2023 and fiscal 2022 were pre-approved by the Audit Committee or by Mr. Sullivan pursuant to the delegation described above.

 

Recommendation of the Board of Directors and the Audit Committee

The Board of Directors and the Audit Committee unanimously recommend that the stockholders vote FOR the ratification of the appointment of Deloitte to serve as our independent registered certified public accounting firm for the fiscal year ending February 1, 2025.

 

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Audit Committee Report

The Audit Committee has reviewed and discussed with Burlington’s management and Deloitte & Touche LLP (“Deloitte”) the audited Consolidated Financial Statements of Burlington contained in Burlington’s Annual Report on Form 10-K for the 2023 fiscal year. The Audit Committee has also discussed with Deloitte the matters required to be discussed pursuant to applicable requirements of the Public Company Accounting Oversight Board and the SEC.

The Audit Committee has received and reviewed the written disclosures and the letter from Deloitte required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communication with the Audit Committee concerning independence and has discussed with Deloitte its independence from Burlington.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited Consolidated Financial Statements be included in Burlington Stores, Inc.’s Annual Report on Form 10-K for fiscal 2023 for filing with the SEC.

Submitted by the Audit Committee

Paul J. Sullivan, Chair

Ted English

Michael Goodwin

Laura J. Sen

 

The preceding Audit Committee Report does not constitute soliciting material and shall not be deemed to be filed, incorporated by reference into or part of any filing made by us (including any future filings) under the Securities Act or the Exchange Act, notwithstanding any general statement contained in any such filing incorporating this report by reference, except to the extent we incorporate such report by specific reference.

 

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Proposal No. 3 — Advisory Vote on Executive Compensation

General

 

 

 

We are providing our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with Section 14A of the Exchange Act and the related rules of the SEC. This vote is commonly referred to as a “say-on-pay” vote.

Under the Exchange Act, stockholders must have the opportunity to cast an advisory vote on whether the “say-on-pay” vote should be held every year, every other year, or every three years (or to abstain). We last held an advisory vote at our 2020 Annual Meeting of Stockholders to determine the frequency of holding future say-on-pay votes. In accordance with the advisory vote of our stockholders at that meeting, the Board determined that we will hold a say-on-pay vote every year until the next required frequency vote is held at our 2026 Annual Meeting of Stockholders.

The Compensation Discussion and Analysis beginning on page 46 and the compensation tables and narrative discussion beginning on page 65 of this Proxy Statement describe our executive compensation program and the compensation of our NEOs for fiscal 2023. The Board is asking our stockholders to cast a non-binding, advisory vote indicating their approval of that compensation by voting FOR the following resolution:

RESOLVED, that the stockholders of Burlington Stores, Inc. APPROVE, on an advisory basis, the compensation paid to its named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.”

As described in detail in the Compensation Discussion and Analysis, our objective is to have a compensation program that will allow us to attract and retain executive officers of a caliber and level of experience necessary to effectively manage our business and to motivate those executive officers to drive stockholder value, consistent with our Core Values.

The Compensation Committee regularly reviews our executive compensation program to evaluate whether compensation is closely tied to aspects of our performance that our executive officers can impact and that are likely to have an impact on stockholder value. We believe that our performance demonstrates the effectiveness of our compensation program.

The vote on this say-on-pay proposal is advisory, which means that the vote will not be binding on us. Nevertheless, our Compensation Committee values the opinions expressed by our stockholders and will review and consider the results of the vote on this proposal in connection with its regular evaluations of our executive compensation program. As noted on page 51 in the Compensation Discussion and Analysis, the Compensation Committee considered our 2023 vote results, in which approximately 83% of votes cast were in favor of the compensation of the Company’s NEOs, and we engaged a number of our stockholders to seek feedback regarding our executive compensation and corporate governance programs.

The advisory vote serves as an additional tool to guide the Compensation Committee and the Board in designing an executive compensation program (i) to further align our executive officers’ interests with the interests of the Company and our stockholders, and (ii) that is consistent with our commitment to strong corporate governance.

 

 

Recommendation of the Board of Directors

The Board of Directors unanimously recommends that the stockholders vote FOR the advisory approval of the compensation of our named executive officers.

 

42   |   Burlington Stores, Inc. 2024 Proxy Statement   LOGOLOGO


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Ownership of Securities

The following table describes the beneficial ownership of the Company’s common stock as of March 19, 2024, unless otherwise noted, by each person known to us to beneficially own more than 5% of the Company’s common stock, each director, each continuing named executive officer in the “Summary Compensation Table” and all current directors and executive officers as a group. The beneficial ownership percentages reflected in the table below are based on 64,077,359 shares of our common stock outstanding as of March 19, 2024.

 

NAME OF BENEFICIAL OWNER(1)

     AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP
     PERCENT OF
COMMON STOCK
OUTSTANDING
       

Capital International Investors (2)

    

 

7,461,353

 

  

 

11.64%

 

 

BlackRock, Inc. (3)

    

 

6,446,634

 

  

 

10.06%

 

 

The Vanguard Group (4)

    

 

6,227,333

 

  

 

9.72%

 

 

T. Rowe Price Investment Management, Inc. (5)

    

 

5,097,891

 

  

 

7.96%

 

 

JPMorgan Chase & Co. (6)

    

 

4,286,128

 

  

 

6.69%

 

 

Michael O’Sullivan (7)

    

 

349,402

 

  

 

*  

 

 

Kristin Wolfe (8)

    

 

15,453

 

  

 

*  

 

 

Jennifer Vecchio (9)

    

 

97,973

 

  

 

*  

 

 

Travis Marquette (10)

    

 

52,985

 

  

 

*  

 

 

Matthew Pasch (11)

    

 

6,543

 

  

 

*  

 

 

Ted English (12)

    

 

7,505

 

  

 

*  

 

 

Michael Goodwin (12)

    

 

2,649

 

  

 

*  

 

 

Jordan Hitch (12)

    

 

9,943

 

  

 

*  

 

 

John J. Mahoney (12)

    

 

14,447

 

  

 

*  

 

 

William P. McNamara (13)

    

 

10,019

 

  

 

*  

 

 

Jessica Rodriguez (12)

    

 

4,624

 

  

 

*  

 

 

Laura J. Sen (12)

    

 

4,916

 

  

 

*  

 

 

Paul J. Sullivan (12)

    

 

8,188

 

  

 

*  

 

 

Mary Ann Tocio (12)

    

 

10,517

 

  

 

*  

 

 

Executive Officers and Directors as a Group (14 persons) (14)

    

 

595,164

 

  

 

*  

 

       

 

*

Less than 1%

 

(1)

A “beneficial owner” of a security is determined in accordance with Rule 13d-3 under the Exchange Act and generally means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares: voting power, which includes the power to vote, or to direct the voting of, such security; and/or investment power, which includes the power to dispose, or to direct the disposition, of such security. Unless otherwise indicated, each person named in the table above has sole voting and investment power, or shares voting and investment power with his or her spouse (as applicable), with respect to all shares of stock listed as owned by that person. Shares issuable upon the exercise of options exercisable on March 19, 2024 or within 60 days thereafter, as well as restricted stock unit awards scheduled to vest within 60 days of March 19, 2024, are considered outstanding and to be beneficially owned by the person holding such options or awards for the purpose of computing such person’s percentage beneficial ownership, but are not deemed outstanding for the purposes of computing the percentage of beneficial ownership of any other person.

 

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OWNERSHIP OF SECURITIES    

 

(2)

Based on information set forth in a Schedule 13G/A filed with the SEC on February 9, 2024 by Capital International Investors (“CII”) reporting that, as of December 29, 2023, CII has beneficial ownership as to, and sole power to dispose or direct the disposition of, all such shares of common stock, and has sole power to vote or direct the vote of 7,417,993 shares of common stock. The number of shares held by CII may have changed subsequent to December 29, 2023. The address of CII is 333 South Hope Street, 55th Fl, Los Angeles, California 90071.

 

(3)

Based on information set forth in a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on January 24, 2024, reporting beneficial ownership as of December 31, 2023. BlackRock is the parent of several subsidiaries that directly hold the shares listed in the table. Of the shares listed in the table, BlackRock has sole power to vote or direct the vote of 6,045,503 shares of common stock and sole power to dispose or direct the disposition of all 6,446,634 shares of common stock. The number of shares held by BlackRock may have changed subsequent to December 31, 2023. The address of BlackRock is 50 Hudson Yards, New York, NY 10001.

 

(4)

Based on information set forth in a Schedule 13G/A filed with the SEC on February 13, 2024 by The Vanguard Group (“TVG”) reporting that, as of December 29, 2023, TVG has beneficial ownership as to all such shares of common stock, shared power to vote or direct the vote of 49,194 shares of common stock, sole power to dispose or direct the disposition of 6,077,005 shares of common stock and shared power to dispose or direct the disposition of 150,328 shares of common stock. The number of shares held by TVG may have changed subsequent to December 29, 2023. The address of TVG is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.

 

(5)

Based on information set forth in a Schedule 13G/A filed with the SEC on February 14, 2024 by T. Rowe Price Investment Management, Inc. (“TRPIM”) reporting that, as of December 31, 2023, TRPIM has beneficial ownership as to, and sole power to dispose or direct the disposition of, all such shares of common stock, and has sole power to vote or direct the vote of 2,055,204 shares of common stock. The number of shares held by TRPIM may have changed subsequent to December 31, 2023. The address of TRPIM is 101 E. Pratt Street, Baltimore, Maryland 21201.

 

(6)

Based on information set forth in a Schedule 13G/A filed with the SEC on January 16, 2024 by JPMorgan Chase & Co. (“JPM”) reporting that, as of December 29, 2023, JPM has beneficial ownership as to all such shares of common stock, sole power to vote or direct the voting of 3,738,507 shares of common stock, shared power to vote or direct the vote of 55,443 shares of common stock, sole power to dispose or direct the disposition of 4,252,228 shares of common stock and shared power to dispose or direct the disposition of 32,798 shares of common stock. The number of shares held by JPM may have changed subsequent to December 29, 2023. The address of JPM is 383 Madison Avenue, New York, New York 10179.

 

(7)

Includes (i) 264,814 shares of common stock that can be acquired upon the exercise of options exercisable on March 19, 2024 or within 60 days thereafter; and (ii) 10,895 RSUs scheduled to vest within 60 days of March 19, 2024.

 

(8)

Includes (i) 12,012 shares of common stock that can be acquired upon the exercise of options exercisable on March 19, 2024 or within 60 days thereafter; and (ii) 628 RSUs scheduled to vest within 60 days of March 19, 2024.

 

(9)

Includes (i) 42,434 shares of common stock that can be acquired upon the exercise of options exercisable on March 19, 2024 or within 60 days thereafter; (ii) 5,216 RSUs scheduled to vest within 60 days of March 19, 2024; and (iii) 372 shares in the aggregate owned indirectly by Ms. Vecchio as custodian for two children under the Uniform Transfers to Minors Act.

 

(10)

Includes (i) 40,362 shares of common stock that can be acquired upon the exercise of options exercisable on March 19, 2024 or within 60 days thereafter; and (ii) 5,327 RSUs scheduled to vest within 60 days of March 19, 2024.

 

(11)

Includes (i) 2,780 shares of common stock that can be acquired upon the exercise of options exercisable on March 19, 2024 or within 60 days thereafter; and (ii) 715 RSUs scheduled to vest within 60 days of March 19, 2024.

 

(12)

Includes 934 shares of common stock underlying unvested restricted stock unit awards scheduled to vest within 60 days of March 19, 2024.

 

(13)

Includes (i) 8,154 shares of common stock held by a family trust of which Mr. McNamara is the trustee and he and members of his immediate family are the sole beneficiaries; and (ii) 934 shares of common stock underlying unvested restricted stock unit awards scheduled to vest within 60 days of March 19, 2024.

 

(14)

Includes our current directors (Mses. Rodriguez, Sen, and Tocio and Messrs. O’Sullivan, English, Goodwin, Hitch, Mahoney, McNamara and Sullivan) and our current executive officers (Mses. Vecchio and Wolfe and Messrs. O’Sullivan, Marquette and Pasch).

 

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    OWNERSHIP OF SECURITIES

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

 

The 2022 Incentive Plan was adopted by our stockholders on May 18, 2022. Securities have been issued under the 2006 Management Incentive Plan (the “2006 Incentive Plan”) (through the termination of such plan in April 2016), the 2013 Omnibus Incentive Plan (the “2013 Incentive Plan”) (through the adoption of the 2022 Incentive Plan) and the 2022 Incentive Plan. The following table presents aggregated information regarding each of the plans at February 3, 2024:

 

PLAN CATEGORY

   (A)
NUMBER OF SECURITIES
TO BE ISSUED UPON
EXERCISE OF
OUTSTANDING
OPTIONS, WARRANTS
AND RIGHTS
     (B)
WEIGHTED-AVERAGE
EXERCISE PRICE OF
OUTSTANDING OPTIONS,
WARRANTS AND
RIGHTS
     (C)
NUMBER OF SECURITIES
REMAINING AVAILABLE
FOR FUTURE ISSUANCE
UNDER EQUITY
COMPENSATION PLANS
(EXCLUDING
SECURITIES REFLECTED
IN COLUMN (A))
 

Equity Compensation Plans Approved by Security Holders

     2,154,127 (1)      $ 197.90 (2)        5,214,963 (3)  

Equity Compensation Plans Not Approved by Security Holders

     N/A        N/A        N/A  

Total

     2,154,127 (1)      $ 197.90 (2)        5,214,963 (3)  

 

(1)

Includes 1,356,258 options, 570,952 RSUs and 226,917 performance-based restricted stock units (“PSUs”) that were outstanding on February 3, 2024, based on target performance with respect to PSUs. Assuming maximum payout for PSU grants that have not completed the required performance period, the number of securities to be issued would increase by 226,917.

 

(2)

Only option awards were used in computing the weighted-average exercise price.

 

(3)

This amount represents shares of the Company’s common stock available for issuance under the 2022 Incentive Plan. Awards available for grant under the 2022 Incentive Plan include stock options, stock appreciation rights, restricted stock, RSUs, PSUs, performance awards, other stock-based awards, other cash-based awards, and any combination of the foregoing awards.

For additional information concerning our equity compensation plans, see Note 11 (entitled “Stock-Based Compensation”) to our Consolidated Financial Statements included in our fiscal 2023 10-K.

 

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Executive Compensation

Compensation Discussion and Analysis

 

 

 

Executive Summary

At Burlington, we live by our Core Values:

 

  Developing Trust and Respect among all members of the Burlington community.

 

  Building Strong Teams and Partnerships through collaborative work.

 

  Driving Business Results by taking ownership and pride in Burlington, and getting things done well.

By conducting our business in accordance with our Core Values, we strive to ensure that Burlington provides value for our stockholders and rewarding careers for our associates. We seek to attract and develop the most talented people in retail.

We believe that our executive compensation program reflects our Core Values and promotes the achievement of specific annual and long-term goals by

our executive management team, further aligning our executives’ interests with those of our stockholders.

This Compensation Discussion and Analysis provides an overview of our executive compensation program together with a description of the material factors underlying the decisions that resulted in the compensation provided to our principal executive officer, our principal financial officer, our three other most highly compensated executive officers serving as of fiscal 2023 year-end, and one former executive officer of the Company. These individuals are referred to collectively as our NEOs and the individuals who remain NEOs of the Company (i.e., Messrs. O’Sullivan, Marquette and Pasch and Mses. Wolfe and Vecchio) are referred to as our continuing NEOs.

The following table identifies our NEOs as well as the positions held by such individuals during fiscal 2023.

 

 

Named Executive Officers

    

Michael O’Sullivan

  

Chief Executive Officer

Kristin Wolfe

  

Executive Vice President and Chief Financial Officer

Jennifer Vecchio

  

Group President and Chief Merchandising Officer

Travis Marquette

  

President and Chief Operating Officer

Matthew Pasch(1)

  

Executive Vice President and Chief Human Resources Officer

Michael Allison(2)

  

Former Executive Vice President and Chief Administrative Officer

 

(1)

Mr. Pasch was promoted from Senior Vice President of Human Resources, Merchandising to Executive Vice President and Chief Human Resources Officer effective September 17, 2023.

(2)

Mr. Allison passed away on August 11, 2023.

 

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    EXECUTIVE COMPENSATION

 

Fiscal 2023 Performance

In fiscal 2023 we delivered strong financial results in a challenging environment. Below is a summary of our 53-week fiscal 2023 performance compared with our 52-week fiscal year ended January 28, 2023 (“fiscal 2022”):

 

 

We generated total revenues of $9,727 million compared with $8,703 million in fiscal 2022

 

 

Total sales increased 12%

 

 

Net income increased 48%, or $110 million, to $340 million, or $5.23 per share vs. $3.49 per share in fiscal 2022, an increase of 50%

 

 

In fiscal 2023 we acquired 64 Bed Bath & Beyond store leases, significantly strengthening our new store pipeline

For purposes of comparison, for the 52 weeks ended January 27, 2024 compared with the 52 weeks ended January 28, 2023, and excluding approximately $18 million of expenses associated with the acquisition of the Bed Bath & Beyond store leases:

 

   

Adjusted Net Income increased 44% to $405 million and Adjusted EPS was $6.24 vs. $4.26, an increase of 46%; and

 

   

Adjusted EBIT increased 39%, or $166 million, to $596 million

 

 

We opened 80 net new stores

In fiscal 2023 we also strengthened our balance sheet, enhanced our liquidity position, and returned significant excess cash to our stockholders. During the year, we used excess cash to pay down $110 million of our 2.25% Convertible Senior Notes due in 2025 and we returned $232 million to stockholders through common stock repurchases. We ended the fiscal year with $1.6 billion in liquidity, including $925 million in cash.

Information regarding how we calculate Adjusted Net Income (which is divided by our fully diluted weighted average shares outstanding for fiscal 2023 of 64,917 thousand and for fiscal 2022 of 65,901 thousand to arrive at Adjusted EPS) and Adjusted EBIT, and a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measure, is contained in Appendix A.

Compensation Philosophy and Guiding Principles

Our objective is to have a compensation program that will allow us to attract and retain executive officers of a caliber and level of experience necessary to effectively manage our business and to motivate those executive officers to drive stockholder value, consistent with our Core Values.

To achieve that objective, the Committee utilizes the following guiding principles:

 

 

Align compensation received to the financial outcomes of the business. A majority of NEO compensation should be at-risk and vary with the performance outcomes of stockholders.

 

 

Engage high-performing executive talent through compelling compensation opportunities. The value and structure of compensation provided should assist in the attraction and retention of key executive talent with high-performance generally targeted above market medians. Special non-annual incentives may be used strategically to motivate and retain key talent.

 

 

Foster growth and motivation through a simplified approach to compensation design. Complex compensation designs can lead to confusion and stifle motivation. Compensation arrangements should be simple and focus on broad performance factors.

 

 

Cultivate ownership of our vision and strategic direction through sound compensation policies and structure that reinforce desired behaviors. Policies and structure should support strong corporate governance and drive ownership culture among executives.

 

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EXECUTIVE COMPENSATION    

 

The Committee reviews our executive compensation program on an ongoing basis, including our compensation philosophy and guiding principles.

Fiscal 2023 Target Compensation Mix

A significant portion of the targeted annual compensation for our NEOs is performance-based and/or subject to forfeiture (“at-risk”). For fiscal 2023, target performance-based compensation was comprised of annual cash incentives, PSUs and stock options. The annual cash incentives and PSUs reward performance measured against pre-established performance objectives linked to the Company’s internal operating plan. The future realizable value of stock options is dependent on stock price appreciation following the grant date.

At-risk compensation was targeted to be delivered through the performance-based compensation discussed above and RSU awards. The Committee considers RSUs to be at-risk due to the vesting period and given that the realizable value of the awards is subject to our future stock price performance. The Committee promotes a pay-for-performance philosophy and alignment between the interests of our NEOs with those of our stockholders by linking pay to our operating and/or stock price performance.

The chart below illustrates Mr. O’Sullivan’s target annual compensation mix as of May 1, 2023, the date of the 2023 LTIP grant. As reflected in the chart, approximately 71.5% of total target annual compensation was performance-based and approximately 90% of the total target annual compensation for Mr. O’Sullivan was “at-risk.”

 

 

LOGO

 

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    EXECUTIVE COMPENSATION

 

The chart below illustrates the average fiscal 2023 target annual compensation mix as of May 1, 2023 for our NEOs other than Mr. O’Sullivan and Mr. Pasch, who was promoted to Executive Vice President in September 2023. As reflected in the chart, approximately 67% of the average total target annual compensation was performance-based and approximately 81% of the average total target annual compensation for our NEOs other than Mr. O’Sullivan and Mr. Pasch was “at-risk.”

 

 

LOGO

Fiscal 2023 Incentive Plan Performance

The following results under our performance-based incentive plans are described in more detail below:

 

Annual Incentive Plan

  Long-Term Incentive Plan (LTIP)

The Committee determined that Adjusted EBIT (as defined below) should be the sole performance metric for purposes of the fiscal 2023 Annual Incentive Plan.

 

Our performance during fiscal 2023 led to Adjusted EBIT of $596 million as compared with a target of $572-$633 million. Based on achieved performance, the Committee determined that each NEO earned 100% of their respective target annual incentive.

 

Fiscal 2023 represented the final year of the performance period for PSUs granted in fiscal 2021. The fiscal 2021 PSUs were earned based upon the cumulative Adjusted EBIT margin expansion and sales CAGR (each weighted 50%) achieved by the Company during the 2021, 2022 and 2023 fiscal years.

 

Over the three-year performance period, we achieved sales CAGR of 9.6% (compared with a target of 8%) and Adjusted EBIT margin expansion of -3.2% (compared with a target of 0.20%). As a result, NEOs earned 91% of their fiscal 2021 PSU awards, reflecting performance above the target level for the sales CAGR metric (182%) and below the threshold level for the Adjusted EBIT margin expansion metric (0%).

Fiscal 2024 Plan Enhancements

In February 2024, the Committee approved the design of the 2024 LTIP and Annual Incentive Plan. Performance for purposes of 2024 PSU awards will be measured based on Adjusted EPS growth over a cumulative three-year performance period (instead of averaging the three individual years). With respect to the Annual Incentive Plan, the Committee determined to revert to a fixed target (instead of a target range) with a 50% (instead of a 20%) threshold, and once again measure performance based on full-year Adjusted EBIT. These enhancements are described in more detail below.

 

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EXECUTIVE COMPENSATION    

 

Key Features of Our Executive Compensation Program

The Company’s executive compensation program includes key features that we believe further align the interests of our NEOs with those of our stockholders.

 

What We Do

Align Pay with Company Financial Performance

          The compensation program for our NEOs is designed to align pay with actual Company results, and the Committee regularly reviews such alignment. Annual incentive awards, as well as PSU awards (which accounted for 50% of the annual long-term incentive grants made to our NEOs in fiscal 2023), are based on the achievement of pre-established goals linked to our performance.

Balance Short-Term and Long-Term Incentives

          Our compensation program is designed to provide an appropriate balance of short-term and long-term incentives.

Say-on-Pay Frequency

          Our Board elected to have our executive compensation program considered by stockholders annually through our Say-on-Pay vote.

Independent Compensation Consultant

          The Committee directly engages an independent compensation consultant that does not provide services to management.

Annual Compensation Risk Assessment

          The Committee conducts a risk assessment of our compensation program on an annual basis. Based on that assessment, the Committee concluded that our compensation policies and practices do not encourage behaviors that could create material risk for the Company.

Robust Stock Ownership Guidelines

          We have stock ownership guidelines which provide that (i) our CEO should own shares of our common stock valued at a 6x multiple of annual base salary; and (ii) each continuing NEO (other than our CEO) should own shares of our common stock valued at a 3x multiple of annual base salary.

Award Limits

          Annual Incentive Plan payouts for our NEOs, as well as PSU awards made to our NEOs, are subject to maximum payout limits.

Compensation Recoupment Policy

          Our compensation recoupment policy provides that the Committee may require relinquishment of previously awarded equity-based compensation and/or repayment of previously paid incentive cash compensation in the event of a financial restatement or significant financial harm to the Company arising out of willful actions or gross negligence by any officer of the Company. In addition, the Committee has approved a clawback policy as required by Section 954 of the Dodd-Frank Act and the related rules and regulations promulgated by the SEC and NYSE.

Regularly Review Share Utilization

          Management and the Committee periodically evaluate overhang levels (dilutive impact of equity compensation on our stockholders) and annual run rates (the aggregate shares awarded as a percentage of total outstanding shares) to assess alignment with our compensation program and market practices.

 

What We Don’t Do

No Excise Tax Gross-Ups

     ×      In the event of a change in control, none of our NEOs are entitled to a tax gross-up of any excise taxes imposed.

No Discounted Stock Options

     ×      We do not set the exercise price of stock options at less than 100% of the fair market value of our common stock on the date of grant.

No Repricing Without Stockholder Approval

     ×      The 2022 Incentive Plan does not allow the repricing of any stock option or stock appreciation right without stockholder approval.

No Hedging or Pledging of Company Stock

     ×      Our directors and executive officers are prohibited from engaging in pledging or hedging activities involving Company securities.

No Automatic “Single-Trigger” Vesting

     ×      In the event of a change in control, our equity award grants contain a “double trigger” – meaning that both a change in control and qualifying termination of employment must occur for automatic vesting.

No Pension Plans or SERPs

     ×      We do not sponsor any qualified or non-qualified defined benefit plans or SERPs.

No Guaranteed Bonuses or Salary Increases

     ×      We do not guarantee salary increases or provide guaranteed bonuses to any of our executive officers other than to certain newly hired executive officers with respect to their first year of employment with us.

No Evergreen Provision or Reload Options

     ×      The 2022 Incentive Plan does not provide for automatic share additions during its term or provide for the ability to grant reload options.

No Liberal Share Recycling

     ×      Under the 2022 Incentive Plan, shares tendered to or withheld by the Company to satisfy tax withholding obligations or to pay an option exercise price are not available for future issuance or delivery.

 

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    EXECUTIVE COMPENSATION

 

2023 Stockholder Say-on-Pay Vote and Stockholder Outreach

Stockholders supported our 2023 Say-on-Pay vote, with approximately 83% of votes cast in favor. The Committee viewed the results of this vote as demonstrating solid stockholder support for our executive compensation program. Based on these results and the Committee’s ongoing review of our compensation practices, the Committee believes that our program has been effective in implementing our compensation philosophy and objectives.

Nevertheless, the Committee recognizes that pay practices continue to evolve, and the Committee intends to continue to refine our executive compensation program in its ongoing effort to design an executive compensation program that supports long-term stockholder value creation consistent with our compensation philosophy and guiding principles. We view a continuing, constructive dialogue with our stockholders as important to keeping us informed on stockholder views regarding a variety of matters, including executive compensation. Our approach to engagement is detailed in the section above entitled “Stockholder Engagement.”

Leadership Succession and Management Development

The Board and the Committee recognize that retention of highly-qualified leadership talent is critical to our continued strong performance and to successful succession planning. The Board is responsible for the succession planning of the CEO, and the CEO reviews succession planning and management development for executive vice presidents and officers above that level with the Committee.

As part of this process, succession candidates for senior leadership positions are considered, taking into account demonstrated performance, leadership qualities and potential to take on more complex responsibilities. The Board and the Committee consider

various succession-related factors, including: (i) the

potential retention risk regarding incumbent senior executives and the identified succession candidates; (ii) the competitive landscape for executive talent; (iii) the specific succession planning time horizon for each senior executive position; and (iv) the extent of disruption likely to be caused by unplanned attrition.

Process for Setting Executive Officer Compensation

Role of the Compensation Committee

The Committee is tasked with discharging our Board’s responsibilities related to oversight of the compensation of our NEOs, including the design and implementation of our executive compensation program, and designing our executive compensation program so that it is aligned with our corporate objectives. Each member of the Committee is independent under the listing standards of the NYSE.

The Committee makes decisions regarding salaries, annual incentive awards, long-term equity incentives and other compensation for our NEOs. The Committee is also responsible for reviewing and approving corporate goals and objectives relevant to the compensation of our NEOs. The Committee, in conjunction with the CEO’s evaluation of our other NEOs, evaluates the performance of such officers in light of those goals and objectives. The independent directors, in consultation with the Committee, evaluate the performance of our CEO. In determining the overall level of executive compensation and establishing the design and mix of its specific elements, the Committee considers various quantitative and qualitative factors, such as Company performance; individual executive performance and responsibilities; market data; competitiveness and peer practices; its experience with the existing compensation program; results of our advisory votes on executive compensation and other stockholder feedback; recruitment, retention and succession planning; contractual obligations; promotions; organizational changes; relocations; and transitional roles.

 

 

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EXECUTIVE COMPENSATION    

 

The Committee maintains an annual cycle of executive compensation actions and addresses special actions in connection with management changes, employment agreements and executive benefits, and other Committee charter responsibilities. The Committee generally reviews and approves elements of compensation for our NEOs based on the schedule below:

 

LOGO

 

Role of Independent Compensation Consultant

The Committee engages an independent compensation consultant to assist in its deliberations and decision-making regarding executive compensation. The Committee’s consultant provides current market research and analyses against which executive compensation programs and proposals can be evaluated, including a review of competitive market trends and design practices, a review of the Company’s peer group, and market benchmarking. The Committee has sole authority to retain and terminate its consultant and sole authority to approve the fees and other terms of the engagement of its consultant.

Meridian served as the Committee’s independent compensation consultant in fiscal 2023. Meridian reports directly to the Committee and, in addition to performing the services described above, assists the Committee on director compensation matters. Meridian

did not work for the Company’s management in any capacity in fiscal 2023. The Committee assessed the independence of Meridian pursuant to the listing standards of the NYSE and we believe that the work performed by Meridian did not raise any conflict of interest.

As part of the Committee’s responsibility to review the extent to which our compensation policies and practices may encourage associates to take risks that could have a material adverse effect on us, the Committee directed Meridian to complete a comprehensive review of our compensation policies and practices and reviewed it with the Committee. As described below under the caption entitled “Compensation-Related Risk”, upon receiving Meridian’s assessment, the Committee concluded that our compensation policies and practices do not encourage behaviors that could create material risk for the Company.

 

 

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Role of Peer Companies and Benchmarking

The Committee used the compensation peer group set forth below to evaluate fiscal 2023 compensation decisions:

 

   

  Abercrombie & Fitch Co.

 

  American Eagle Outfitters, Inc.

 

  Big Lots, Inc.

 

  Dick’s Sporting Goods, Inc.

 

  Dollar Tree, Inc.

 

  Five Below, Inc.

 

  Foot Locker, Inc.

 

  Kohl’s Corporation

  

  Macy’s, Inc.

 

  RH

 

  Ross Stores, Inc.

 

  The TJX Companies, Inc.

 

  Tractor Supply Company, Inc.

 

  ULTA Beauty, Inc.

 

  V.F. Corporation

 

  Williams-Sonoma, Inc.

 

The Committee reviews the companies included in the peer group on an annual basis and in so doing considers information provided by the Committee’s independent consultant and management. In August 2022, the Committee conducted its annual review of the peer group for fiscal 2023 compensation decisions. After consultation with Meridian, the Committee determined not to make any changes to the peer group as compared to 2022 based on criteria that included the following: annual revenues; company performance; industry/business; similar customer demographics and competition for talent.

The median trailing twelve-month revenue for the peer group as of January 28, 2023 was $10,953 million (versus $8,703 million for Burlington) and the median trailing 20-trading-day average market cap as of January 28, 2023 was $9,228 million (versus $14,294 million for Burlington). Peer revenues are generally within a range of 0.4x to 3.0x our revenues.

The Committee believes that an appropriate peer group is a key element of the Company’s compensation program in order to provide meaningful comparisons to market compensation levels. The Committee will consider comparative compensation data of the companies in our peer group, as well as quality retail-specific surveys, as a frame of reference in assessing the competitiveness of our executive compensation levels and opportunities, and in determining the individual components of compensation, compensation practices, and the relative proportions of each component of compensation.

The Committee will review market total compensation and target each executive’s annual compensation within a reasonable range of this market benchmark

based upon its assessment of a variety of factors, including those discussed under the caption above entitled “Role of the Compensation Committee.” Actual pay delivered will vary above or below this level based on Company performance.

While the Committee considers relevant market pay practices when setting executive compensation, it does not believe it is appropriate to establish compensation levels based only on such practices. The Committee believes that compensation decisions are complex and require a deliberate review of Company performance and peer compensation levels.

Role of Management

Our CEO makes compensation recommendations for executive officers other than himself. These recommendations are based on annual performance reviews completed by the CEO for each executive officer. The Committee considers these performance reviews and recommendations, among other factors, in establishing base salaries and making other compensation decisions for our NEOs. Our NEOs do not play a role in their own compensation determinations.

The Committee meets in executive session (without the presence of any management director) from time to time and invites executive officers to attend other portions of its meetings. In addition, members of our management team keep informed of developments in compensation and benefits matters and participate in the gathering and presentation of data related to these matters as requested by the Committee. Management periodically makes recommendations to the Committee regarding the design and implementation of our executive compensation program, although any adoption or implementation of such recommendations requires approval by the Committee.

 

 

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Internal Pay Relationships

Our compensation philosophy reflects the importance of offering a competitive target compensation package to our NEOs. The differences in pay between the NEOs relative to each other as well as the CEO are based on various factors, including market differences for the particular job, job responsibilities and scope, and adjustments for individual experience and performance, rather than a pre-determined ratio or multiple.

Elements of Our Executive Compensation and Benefits Programs

We provide annual compensation to our NEOs primarily through a combination of:

 

  Base salary;

 

  Annual cash incentives; and

 

  Long-term equity incentives.

We also provide our NEOs with retirement (401(k) Plan), health and welfare benefits, and limited perquisites.

The portion of annual executive compensation devoted to each of the elements of pay is driven by our principles and objectives as well as each NEO’s role and strategic value to the organization as further described in the table below. The Committee occasionally grants other types of awards in special circumstances to reward superior past performance or support recruitment, succession planning, and retention objectives.

 

 

Element of Pay

  

  Form

     Designed to Reward/Promote      Alignment with Objectives

Base Salary

  

  Cash

  

  Experience, knowledge in industry, duties, scope of responsibility and individual performance.

  

  Provides a minimum, fixed level of cash compensation to attract and retain talented executives who can continue to improve our overall performance.

Annual Cash

Incentives

  

  Cash

  

  Achievement of the Company’s annual strategic and financial goals; incent and reward financial and operating performance.

  

  Motivates executives to achieve specific performance goals and objectives.

Long-Term

Equity

Incentives

  

  PSUs

 

  Stock Options

 

  RSUs

  

  Achievement of efficient long-term growth and development.

 

  Value-creating actions deemed necessary to increase the market value of our stock.

 

  Executive retention, stock ownership and alignment of interests with stockholders.

  

  Aligns our executives’ interests with those of our stockholders to increase overall stockholder value.

 

  Represents potentially the largest pay component, which provides an opportunity for significant compensation following strong Company performance and share performance, helping us to attract and retain talented executives.

 

The Committee believes that we can meet the objectives of our executive compensation program by achieving a balance among these elements that is competitive with our industry peers and creates appropriate incentives for our NEOs. Actual annual compensation levels are a function of both corporate and individual performance as described under each compensation element below.

Base Salary

Our goal is to provide our NEOs with base salaries that are appropriate and commensurate with position, experience and performance. Base salaries are reviewed by the Committee annually and at the time of promotion or other change in responsibilities. Generally, in making base salary determinations, the Committee considers the following factors:

 

  individual performance;

 

  experience with us and industry knowledge;
 

 

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  duties and scope of responsibilities;

 

  competitive market compensation paid by other companies for similar positions; and

 

  annual performance reviews completed by the CEO with respect to the NEOs other than himself.
 

 

In addition, the Committee considers internal pay equity among our executives and, when reviewing the base salaries of our NEOs, their current aggregate compensation. The Committee reviewed the base salaries of each of the then-serving NEO’s following the end of fiscal 2022. Pursuant to its review, the Committee adjusted the base salaries of our then-serving NEOs as follows:

 

Named Executive Officer    Percentage
Base Salary
Adjustment
   Dollar
Base Salary
Adjustment
 

 Resulting Base 

Salary

Michael O’Sullivan

       3.00%        $ 42,000     $ 1,442,000

Kristin Wolfe(1)

       6.33%        $ 47,500     $ 797,500

Jennifer Vecchio

       3.00%        $ 32,681     $ 1,122,056

Travis Marquette

       3.00%        $ 27,540     $ 945,540

Michael Allison

       3.00%        $ 21,750     $ 746,750

 

(1)

In addition to a merit increase of $22,500, the Committee approved an incremental adjustment of $25,000 to Ms. Wolfe’s base salary in recognition of the value of her role to the Company and her important contributions to the Company’s ongoing performance, and to maintain competitive positioning relative to the market.

At the beginning of fiscal 2023, Mr. Pasch’s salary was $453,750, and was subsequently increased to $471,900 based on a merit increase in April 2023. Mr. Pasch’s base salary was further increased to $600,000 in connection with his promotion to Executive Vice President and Chief Human Resources Officer. In making this adjustment, the Committee reviewed comparable market data for his role as well as the compensation of his predecessor.

 

Annual Incentive Awards

2023 Annual Incentive Plan

Annual incentive awards are an important part of the overall compensation we pay our NEOs. Unlike base salary, which is fixed, annual incentive awards are paid only if specified performance levels are achieved. The Committee believes that annual incentive awards encourage our NEOs to focus on specific short-term business and financial goals, without sacrificing our long-term objectives.

 

The Committee recognizes the importance of achieving an appropriate balance between supporting the Company’s objective of rewarding executives for strong performance over the short-term and establishing realistic targets that continue to motivate and retain executives. As a result, our 2023 Annual Incentive Plan provides for measurable, rigorous performance goals that are designed to be achievable but challenge our executives to drive business results that produce stockholder value.

 

 

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2023 Annual Incentive Target

Under our 2023 Annual Incentive Plan, and consistent with practice in prior years, the Committee approves each NEO’s annual incentive target, which is expressed as a percentage of his or her base salary in effect at the end of the fiscal year. In setting or adjusting an NEO’s annual incentive target, the Committee considers the NEO’s individual performance, market data as well as internal pay practices. The table below shows each of our NEO’s 2023 annual incentive target expressed as a percentage of base salary and as a dollar amount. The fiscal 2023 annual incentive target percentages for Messrs. O’Sullivan, Marquette, and Allison and Mses. Vecchio and Wolfe were unchanged from fiscal 2022. The annual incentive target for Mr. Pasch was increased from 50% to 75% of base salary in connection with his promotion to Executive Vice President and Chief Human Resources Officer after considering market data, the compensation of his predecessor as well as the Company’s internal pay practices.

 

Named Executive Officer   

Annual Incentive

Target as % of
Base Salary

   Fiscal 2023
Base Salary Rate
  Target
Award

Michael O’Sullivan

       150%        $ 1,442,000     $ 2,163,000

Kristin Wolfe

       75%        $ 797,500     $ 598,125

Jennifer Vecchio

       130%        $ 1,122,056     $ 1,458,673

Travis Marquette

       100%        $ 945,540     $ 945,540

Matthew Pasch1

       75%        $ 600,000     $ 356,604

Michael Allison 2

       75%        $ 746,750     $ 560,063

 

1

Mr. Pasch’s target award is pro-rated based on the number of days in each role that he held during fiscal 2023.

 

2

The Committee approved a payment to Mr. Allison’s beneficiaries representing the cash bonus Mr. Allison would have been entitled to receive under the 2023 Annual Incentive Plan, based on actual Company performance and pro-rated for service through his death, payable at the same time and in the same manner bonuses were paid to other Executive Vice President level associates under the plan.

 

2023 Performance Measures, Goals, and Payout Scale

Consistent with the fiscal 2022 design, in February 2023, the Committee determined that Adjusted EBIT should be the sole performance metric for purposes of the 2023 Annual Incentive Plan. Adjusted EBIT is a core driver of our performance and success, as it measures profitability, reflects management efforts to manage expenses, and further aligns our NEOs’ interests with our stockholders’ interests.

In addition, the Committee determined that the Company’s actual Adjusted EBIT performance should be measured on a full-year basis, rather than separately measured for each half of the fiscal year (which had been the Company’s approach in fiscal 2022). The Committee also established a target Adjusted EBIT goal range of $572 – $633 million for the full fiscal year 2023. Although there was still economic uncertainty at the time the Committee established the fiscal year 2023 goals, because much of the volatility associated with the pandemic and its aftermath had subsided, the Committee elected to revert to its historical practice of determining payouts based on an annual performance period rather than two six-month

performance periods. The use of six-month performance periods under the Annual Incentive Plan was implemented to help manage the market volatility that occurred as a result of the pandemic. The Committee established a full year target with a range to balance the need to set clear goals for the year in advance while still providing flexibility given the uncertain economic environment at the time the goals were set. Based on the Company’s achieved performance against this goal, each NEO’s incentive award could range from 20% (at threshold performance) to no more than 200% (at maximum performance) of his or her annual incentive target award.

In establishing the Annual Incentive Plan targets, the Committee considers the financial plan approved by the Board, which is informed by our prior year results as well as our forecast, including our projections for new store openings. While the Committee believed the target range to be achievable with strong performance, the Committee designed the target range to be challenging to help drive business results that produce stockholder value.

 

 

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In February 2024, the Committee approved the 2024 Annual Incentive Plan. As the unprecedented volatility that we experienced during the pandemic and its aftermath has largely subsided, the Committee

determined to revert to a fixed target (instead of a target range) with a 50% (instead of a 20%) threshold, and once again measure performance based on full-year Adjusted EBIT.

 

 

The tables below show the threshold, target and maximum performance goals and the associated annual incentive payout percentage for fiscal 2023.

 

     Zero      Threshold
Performance
     At Target      Maximum   

Adjusted EBIT ($M)(1)

     < $396        $396        $572 - $633        $810  

Payout Percentage(2)

     0%          20%        100%           200%  

 

(1)

Adjusted EBIT is defined as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) loss on extinguishment of debt; (iv) income tax expense; (v) impairment charges; (vi) net favorable lease costs; (vii) costs related to debt amendments; (viii) amounts related to certain litigation matters; and (ix) other unusual or non-recurring expenses, losses, charges or gains. In order to ensure comparability between periods, the Committee determined that it was appropriate to assess performance under the 2023 Annual Incentive Plan using the 52-week period ending January 27, 2024 as opposed to the 53-week period (fiscal year) ending February 3, 2024.

 

(2)

Payouts for performance between these various performance achievement levels are calculated using straight line interpolation.

 

Awards made to NEOs under the fiscal 2023 Annual Incentive Plan are equal to the product of: (i) the Adjusted EBIT Payout Percentage; and (ii) the NEO’s target annual incentive award. Notwithstanding this formula, the Committee retains discretion to adjust payouts, including making no payout, based on

unanticipated positive or negative events or other factors deemed relevant by the Committee, as determined by the Committee in its sole and absolute discretion. In exercising its discretion to reduce the amount of an award, the Committee may take into account the NEO’s individual performance rating.

 

 

2023 Achieved Performance and Determination of Payout

Following the conclusion of fiscal 2023, the Committee assessed whether and to what extent the performance goal for the year was met. Our performance with respect to the performance goal was as follows:

 

Metric    Target    Actual   

Payout

Percentage

Adjusted EBIT ($M)

     $ 572 - $633      $ 596        100 %

 

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Further, each participating NEO received a performance rating of at least “Meets Expectations.” In making these determinations, the independent directors, in consultation with the Committee, reviewed Mr. O’Sullivan’s personal performance in fiscal 2023, and Mr. O’Sullivan reviewed and recommended to the

Committee the fiscal 2023 personal performance assessment with respect to the other participating NEOs.

Based on Company and individual performance, the Committee did not exercise discretion to reduce any award.

 

 

Accordingly, our NEOs earned the following awards under the Annual Incentive Plan for fiscal 2023, which were calculated in accordance with the formula set forth above:

 

Named Executive Officer    Award

Michael O’Sullivan

     $ 2,163,000

Kristin Wolfe

     $ 598,125

Jennifer Vecchio

     $ 1,458,673

Travis Marquette

     $ 945,540

Matthew Pasch(1)

     $ 356,604

Michael Allison(2)

     $ 294,372

 

(1)

In connection with his promotion to Executive Vice President and Chief Human Resources Officer in September of 2023, Mr. Pasch’s target opportunity was increased from 50% to 75%. Accordingly, Mr. Pasch’s target award was pro-rated based on the periods of fiscal 2023 during which he served in each role.

 

(2)

Mr. Allison’s 2023 Annual Incentive Plan award was pro-rated based on his employment during fiscal 2023 through his passing.

The range of potential payouts under the 2023 Annual Incentive Plan for each of our NEOs is presented below in the Fiscal 2023 Grants of Plan-Based Awards Table. The actual 2023 Annual Incentive Plan awards earned and payable to each NEO are also reported below in the Fiscal 2023 Summary Compensation Table.

 

Long-Term Incentives

The Committee believes that long-term incentives (“LTIPs”) are an important component of compensation that helps us to attract, retain and motivate our NEOs. These incentives also align the financial rewards paid to our NEOs with our long-term performance, thereby encouraging our NEOs to focus on long-term goals. The LTIP is designed to promote achievement of corporate goals, encourage the growth of stockholder value, enable participation in our long-term growth and profitability, and serve as an incentive for continued employment. In setting the value of equity incentive compensation for executives, the Committee’s determinations are informed by assessments conducted by Meridian, peer group market data and alignment with our compensation philosophy.

For fiscal 2023, the Committee approved each NEO’s LTIP target value and the allocation of the value across the three equity vehicles granted to the NEOs based on a variety of factors including but not limited to role,

contributions, market data, and recommendations from the CEO (for all NEOs except the CEO). The Committee increased Ms. Wolfe’s annual target LTIP value from $1,595,000 to $1,875,000 in February 2023 in recognition of the value of her role to the Company and her important contributions to the Company’s ongoing performance, and to maintain competitive positioning relative to the market. The Committee also approved a one-time increase to Ms. Vecchio’s LTIP target grant from $5,610,280 to $6,446,875 (for her fiscal 2023 LTIP grant only) in recognition of her important contributions to the Company’s ongoing performance and her ongoing role in leading our merchandising growth strategy. In connection with Mr. Pasch’s promotion to Executive Vice President and Chief Human Resources Officer in September 2023, the Committee increased the target value of his LTIP award from $401,115 to $750,000 and approved an additional award to Mr. Pasch in October 2023 in order to align the value of his fiscal 2023 equity grants with his updated target opportunity with the additional equity awards delivered in the same mix and with the same

 

 

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vesting terms as those approved for the then-serving NEOs in February 2023 and pro-rated based on his time served in his new role in fiscal 2023.

2023 LTIP Mix

The Committee routinely evaluates and considers the type of awards granted under our LTIP. Based on input and analysis from Meridian, the Committee determined that it was appropriate to deliver fiscal 2023 LTIP awards in the following mix, which is identical to the mix used for fiscal 2022 LTIP awards:

 

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PSUs. In February 2023, the Committee approved the grant of PSUs to each then-serving NEO. The grant of PSUs supports the Committee’s desire to create a strong and visible link between executive pay and Company performance and further align our executives’ interests with those of our stockholders.

Consistent with the design of the PSUs granted in fiscal 2022, the 2023 PSUs measure performance over a three-year period. The eligible vesting with respect to each fiscal year within the three-year period will be determined based on pre-established Adjusted EPS growth goals for such fiscal year, with the goals for each year in the three-year performance period established in fiscal 2023. The payout will be measured based on the Adjusted EPS growth of each individual year during the three-year performance period and then the payouts for each year will be averaged to determine the overall payout. Based on the Company’s achievement of the goals, the vesting of each NEO’s fiscal 2023 PSU award may range from 50% (at threshold performance) to no more than 200% (at maximum performance) of his or her target award.

Adjusted EPS growth measures the growth rate of our per share earnings over the performance period, and the Committee believes this metric is closely aligned with driving stockholder value and incentivizes sales growth, margin expansion and the efficient use of cash. The performance goals for 2023 PSU grants were designed to be challenging but achievable with the coordinated, cross-functional focus and effort of our executives.

In February 2024, the Committee approved the design of annual PSU grants to be made in 2024. As the unprecedented volatility that we experienced during the pandemic and its aftermath has largely subsided, the Committee, after taking into consideration stockholder feedback received in connection with our engagement program, determined to revert to a three-year cumulative measurement period for purposes of measuring PSU performance.

Stock Options. In February 2023, the Committee approved the grant of stock options to each then-serving NEO. The grant of stock options supports the Committee’s philosophy that stock price appreciation should be a significant determinant of the economic return received by our executives from equity compensation. Options have an exercise price per share equal to the fair market value of a share of stock on the grant date and vest in 25% increments over a four-year vesting period, subject to the NEO’s continued employment through the applicable vesting date. Accordingly, each NEO realizes value from stock options only to the extent our share price is greater than the option exercise price and the NEO is employed through the vesting period. In contrast, if our share price declines and remains below the exercise price of a stock option granted to a NEO, the NEO would realize no value with respect to such stock option.

RSUs. In February 2023, the Committee approved the grant of RSUs to each then-serving NEO. RSUs are subject to time-based vesting and provide a retention incentive for our NEOs and an incentive to increase stockholder value. RSUs vest in 25% increments over a four-year vesting period, subject to the NEO’s continued employment through the applicable vesting date.

 

 

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The table below shows the target LTIP values for fiscal 2023 and the type and number of LTIP awards for each NEO:

 

Named Executive Officer

   Target LTIP Value    PSUs (Target)    RSUs    Options

Michael O’Sullivan

     $ 10,221,632        27,384        13,692        36,831

Kristin Wolfe

     $ 1,875,366        5,024        2,512        6,758

Jennifer Vecchio

     $ 6,447,924        17,274        8,637        23,234

Travis Marquette

     $ 2,754,667        7,380        3,690        9,925

Matthew Pasch1

     $ 635,067        1,473        1,549        2,709

Michael Allison

     $ 1,087,759        2,914        1,457        3,920

 

1

In connection with Mr. Pasch’s promotion to Senior Vice President of Human Resources, Merchandising and his subsequent promotion to Executive Vice President and Chief Human Resources Officer, he received additional 2023 LTIP awards on February 1, 2023 and October 9, 2023, respectively, which awards were pro-rated to reflect his time served in such roles in fiscal 2023.

PSUs Granted in Fiscal 2021

Fiscal 2023 represented the final year of the performance period for the PSUs granted in fiscal 2021. In February 2024, the Committee reviewed our performance relative to the targets established for these PSU awards. The fiscal 2021 PSUs were earned based upon the cumulative Adjusted EBIT margin expansion and sales CAGR (each weighted 50%) achieved by the Company during the 2021, 2022 and 2023 fiscal years (using fiscal 2019 as the baseline) as follows:

 

Fiscal 2021 PSUs(1)

   Threshold    Target    Maximum 

Three-Year Adjusted EBIT Margin Expansion

       -0.20 %        0.20 %        0.60 % 

Three-Year Sales CAGR

       6 %        8 %        10 %

Percent of Target Payout(2)

       50 %        100 %        200 %

 

(1)

In order to ensure comparability between periods, fiscal 2023 performance was assessed using the 52-week period ending January 27, 2024 as opposed to the 53-week period (fiscal year) ending February 3, 2024.

 

(2)

The number of PSUs earned based on performance between these various performance achievement levels are calculated using straight line interpolation.

Over the performance period, the Company achieved Adjusted EBIT margin expansion of -3.2% and sales CAGR of 9.6%, as calculated pursuant to the terms of the awards. As a result, NEOs earned 91% of their fiscal 2021 awards, reflecting performance above the target level for the sales CAGR metric (182%) and below the threshold level for the Adjusted EBIT margin expansion metric (0%), as follows:

 

Named Executive Officer(1)

 

 Value at Date 

of Grant(2)

 

 Shares Granted 

at Target

 

 Shares Earned 

at End of
Performance

Period

Michael O’Sullivan

    $ 4,257,619       13,031       11,859

Jennifer Vecchio

    $ 2,520,402       7,941       7,227

Travis Marquette

    $ 773,222       2,789       2,538

Matthew Pasch

    $ 65,999       202       184

Michael Allison

    $ 418,541       1,281       1,076

 

(1)

Mr. Marquette’s grant reflects a pro-rated amount based on his start date with the Company. As Ms. Wolfe commenced employment with us in fiscal 2022, she did not receive a 2021 PSU award. In connection with his passing and in accordance with the terms of the award agreement, Mr. Allison’s 2021 PSU award vested on a pro-rated basis based on target performance.

 

(2)

Reflects the grant date fair value assuming the probable satisfaction of the performance conditions at the time of grant.

 

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Benefits and Perquisites

Our executive compensation program includes limited perquisites, which are subject to Committee review and approval, and broad-based benefits. The perquisites and benefits included in our executive compensation program represent a modest portion of each NEO’s total compensation. In addition, in connection with Mr. Allison’s passing, the Committee approved a one-time reimbursement of approximately $17,000 and a related tax reimbursement for funeral expenses and an amount equal to $15,000 to help defray the costs associated with continued COBRA coverage. The cost of these perquisites or other personal benefits is set forth below in the Fiscal 2023 Summary Compensation Table below under the column “All Other Compensation,” and additional detail is set forth in the footnotes following the Fiscal 2023 Summary Compensation Table.

We maintain broad-based benefits that are provided to all full-time associates, including medical, dental, vision, life and disability insurance. Certain of these benefits require associates to pay a portion of the premium. Except with respect to life insurance (our NEOs all receive such insurance in an amount equal to the lesser of three times their annual base salary or a pre-determined maximum) and financial planning services, these benefits are offered to our NEOs on the same basis as all other associates. We also offer a retirement savings plan in which eligible associates (including our NEOs) may participate. The savings plan includes a traditional 401(k) pre-tax savings option and a post-tax Roth 401(k) option. We provide a matching contribution of 100% on the first 3% of eligible compensation that is deferred and 50% on the next 2% of eligible compensation that is deferred, up to the Internal Revenue Code limit for each respective year in which the eligible associate participates in the plan.

The Committee believes that the limited perquisites and other benefits provided to our NEOs are reasonable and consistent with the perquisites that would be available to them at companies with whom we compete for experienced senior management.

Termination-Based Compensation

Severance arrangements applicable to each of our continuing NEOs other than Mr. Pasch are set forth in each of their respective employment agreements. Mr. Pasch’s severance benefits are governed by the Burlington Stores, Inc. Executive Severance Plan (the “Severance Plan”).

The Committee believes these arrangements play an important role in protecting our highly competitive business by restricting our executive officers from working for a competitor or soliciting our associates during the specified severance period. Additionally, each NEO’s equity grant agreements contain terms regarding vesting in connection with the termination of employment and change in control. The Committee believes that these termination and change in control terms provide our NEOs with an incentive to act in stockholders’ best interests during a potential change in control despite the risk of losing their jobs or a significant change in the nature of their benefits and responsibilities.

A detailed discussion of compensation payable upon termination or a change in control is provided below under the caption entitled “Potential Payments Upon Termination or Change in Control.”

Compensation Recoupment (“Clawback”) Policy

We strive to maintain a culture that emphasizes integrity and accountability and reinforces our pay-for-performance compensation philosophy. Accordingly, the Committee has adopted a compensation recoupment (or “clawback”) policy, included in our Corporate Governance Guidelines, providing that, in the event of a financial restatement or significant financial harm to the Company arising out of willful actions, including without limitation fraud or intentional misconduct, or gross negligence by any officer of the Company, the Committee shall have the discretion and authority to determine the appropriate action to take, which may include requiring relinquishment of previously awarded equity-based compensation and/or repayment of previously paid incentive cash compensation. Additionally, the Committee has adopted a clawback policy to comply with the requirements of Section 954 of the Dodd-Frank Act and the related rules and regulations promulgated by the SEC and NYSE. This policy provides for recovery of erroneously awarded incentive-based compensation (such as cash bonuses received under the Company’s Annual Incentive Plan and performance-based restricted stock units received under the Company’s 2022 Incentive Plan) received by current and former executive officers during the three years prior to an accounting restatement. The policy applies to incentive compensation received on or after October 2, 2023. It removes discretion from the Committee as to whether to recover compensation and

 

 

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requires recovery without regard to culpability. The full text of the policy is available as an exhibit to our Fiscal 2023 Form 10-K.

Stock Ownership Guidelines

As described above, the Committee has adopted stock ownership guidelines for our executives. These stock ownership guidelines provide that (i) the Chief Executive Officer should own shares of our common stock with a value equal to or exceeding six times his or her then-current base salary, and (ii) other continuing NEOs should own shares of our common stock with a value equal to or exceeding three times his or her then-current base salary. As of the end of fiscal 2023, each continuing NEO owned shares in excess of the applicable guideline or was in compliance with the retention requirement described above. Stock ownership includes shares owned directly or held in trust by the individual and shares subject to unvested service-based restricted stock and restricted stock unit awards. Stock ownership under the guidelines does not include shares that an individual has the right to acquire through unvested performance-based restricted stock unit awards or shares subject to outstanding stock options (whether vested or unvested).

Prohibition on Hedging and Pledging of Company Stock

The Board considers it inappropriate for our directors or any of our corporate personnel (including our executive officers) to enter into speculative transactions in Company securities. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including, but not limited to, through the use of financial instruments such as exchange funds, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments, or through the establishment of a short position in our securities. Such hedging and monetization transactions may permit persons to continue to own Company securities obtained through our benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, such persons may no longer have the same incentives as our other stockholders. Moreover, certain short-term or speculative transactions in our securities by directors and corporate personnel create the potential for heightened legal risk and/or the appearance of improper or inappropriate conduct involving our securities.

Under our hedging and pledging policy, our directors and all corporate personnel are prohibited from engaging in any hedging or monetization transactions with respect to our securities. Further, directors and corporate personnel may not engage in the following short-term or speculative transactions in our securities that could create heightened legal risk and/or the appearance of improper or inappropriate conduct by such persons:

 

  Short Sales. Short sales of our securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will decline in value and therefore have the potential to signal to the market that the seller lacks confidence in our prospects. In addition, short sales may reduce a seller’s incentive to seek to improve our performance. For these reasons, short sales of our securities by our directors and corporate personnel are prohibited under our policy.

 

  Publicly-Traded Options. Given the relatively short terms of publicly-traded options, transactions in options may cause focus on short-term performance at the expense of our long term objectives. Accordingly, our policy prohibits transactions in put options, call options or other derivative securities related to our securities, on an exchange or in any other organized market.

 

  Margin Accounts and Pledged Securities. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in our securities, directors and corporate personnel are prohibited from holding our securities in a margin account or otherwise pledging our securities as collateral for a loan.

Tax and Accounting Considerations

The Committee seeks to structure our compensation program in a manner that is consistent with our compensation philosophy and objectives. In the course of making decisions about executive compensation, the Committee takes into account tax and accounting considerations. For example, the Committee takes into

 

 

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account Section 409A of the Internal Revenue Code regarding non-qualified deferred compensation. The Committee also considers how various elements of compensation will affect our financial reporting. For example, the Committee considers the impact of FASB

ASC Topic 718—Stock Compensation, which requires us to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant date fair value of those awards.

 

 

Report of the Compensation Committee

 

 

 

We, the Compensation Committee of the Board of Directors of Burlington Stores, Inc., have reviewed and discussed the “Compensation Discussion and Analysis” set forth above with management and, based on such review and discussions, recommended to the Board of Directors that the “Compensation Discussion and Analysis” set forth above be included in this Proxy

Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

Compensation Committee of the Board of Directors:

Jordan Hitch, Chair

Ted English

Mary Ann Tocio

 

 

The preceding Compensation Committee Report does not constitute soliciting material and shall not be deemed to be filed, incorporated by reference into or part of any filing made by us (including any future filings) under the Securities Act or the Exchange Act, notwithstanding any general statement contained in any such filing incorporating this report by reference, except to the extent we incorporate such report by specific reference.

Compensation Committee Interlocks and Insider Participation

 

 

 

Ted English, Jordan Hitch and Mary Ann Tocio served on the Committee during fiscal 2023 and currently serve on the Committee. None of these individuals (i) have ever been an officer or an associate of ours, nor (ii) have any relationship that is required to be disclosed pursuant to the rules of the SEC. In addition,

none of our executive officers serve (or served at any time during fiscal 2023) as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or the Committee.

 

 

Compensation-Related Risk

 

 

 

In accordance with applicable disclosure requirements, to the extent that risks may arise from our compensation policies and practices that are reasonably likely to have a material adverse effect on us, we are required to discuss those policies and practices for compensating our associates as they relate to our risk management practices and the possibility of incentivizing risk-taking. The Committee considers risks associated with our compensation policies and practices and, as part of its consulting services for the Committee, Meridian evaluates the potential for unintended risk associated with the design of our compensation programs.

At the direction of the Committee, Meridian completed a comprehensive review of our compensation policies and practices to determine whether potential risk existed and whether there were design factors that mitigated potential risk areas. Upon receiving Meridian’s assessment, the Committee concluded that our compensation policies and practices do not encourage behaviors that could create material risk for the Company.

 

 

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A number of features in our compensation programs mitigate risk and protect against excessive risk-taking behavior and the potential for unintended consequences, including:

 

  Our compensation mix for participants in our LTIP and Annual Incentive Plans is designed to create a balance between short-term results and long-term sustainable performance. Throughout the organization, variable/fixed pay and short-term/long-term pay is carefully calibrated to create an appropriate pay mix and structure by level and, for senior executives, a large portion of pay is variable and oriented toward long-term performance.

 

  A portion of the 2023 LTIP awards made to senior vice presidents and officers above that level (including our NEOs) are in the form of PSUs based on pre-established goals linked to our performance over a three-year period. Accordingly, the performance period and vesting schedules for long-term incentives awards will thereafter overlap which we believe reduces the motivation to maximize performance in any one period.

 

  Our Annual Incentive Plan and PSUs include a maximum payout cap. In addition, the Committee has the authority to exercise discretion when determining payouts under our incentive programs. In fiscal 2022, the Committee exercised negative discretion to reduce the payout under the Annual Incentive Plan.

 

  Time-based equity awards granted to our associates generally do not vest fully for four years. We believe this longer vesting period discourages unnecessary or excessive risk-taking.

 

  Because executive incentive compensation has a large stock component, the value is best realized
   

through long-term appreciation of stockholder value, especially when coupled with our stock ownership guidelines for our executive officers and non-employee directors, which expose our executive officers and non-employee directors to the loss of the value of the retained equity.

 

  We maintain a compensation recoupment policy, which provides that the Committee may require relinquishment of previously awarded equity-based compensation and/or repayment of previously paid incentive cash compensation in the event of a financial restatement or significant financial harm to us arising out of willful actions or gross negligence by any officer. We also maintain a compensation recoupment policy (adopted by the Compensation Committee) to comply with the requirements of Section 954 of the Dodd-Frank Act and the related rules and regulations promulgated by the SEC and NYSE.

 

  The Committee has established a compensation peer group designed to provide meaningful comparisons to ‘market’ and align compensation programs with industry practice.

 

  We have a rigorous system of internal controls designed to prevent fraud, deterring individual associates from creating adverse material risk in pursuit of short- or long-term compensation. In addition, our directors and all corporate personnel are prohibited from engaging in any hedging or monetization transactions with respect to our securities.

 

  We have reasonable general severance arrangements.
 

 

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Fiscal 2023 Summary Compensation Table

 

 

The following table sets forth summary information concerning the compensation of our NEOs for fiscal 2023 and, to the extent required by applicable SEC disclosure rules, fiscal 2022 and fiscal 2021:

 

Name and Principal Position(1)

  Fiscal
Year
   

Salary

($)

    Bonus
($)
    Stock
Awards
($)(2)
    Option
Awards
($)(3)
    Non-Equity
Incentive Plan
Compensation
($)(4)
    All Other
Compensation
($)(5)
    Total
($)
 

Michael O’Sullivan,

    2023       1,459,231             7,665,192       2,556,440       2,163,000       15,120       13,858,983  

Chief Executive Officer

    2022       1,382,500             7,309,310       2,440,115       1,680,000       13,979       12,825,904  
    2021       1,310,769             6,386,592       2,128,375       4,005,000       36,699       13,867,435  

Kristin Wolfe,

    2023       800,962             1,406,293       469,073       598,125       15,120       3,289,573  

Executive Vice President and Chief Financial Officer

    2022       360,577       1,100,000       2,591,634       2,032,626       223,764       749       6,309,350  

Jennifer Vecchio,

    2023       1,135,464             4,835,252       1,612,672       1,458,673       15,120       9,057,181  

Group President and Chief
Merchandising Officer

    2022       1,078,774             3,937,671       1,314,551       1,132,950       13,979       7,477,925  
    2021       1,008,303             3,780,766       1,260,015       2,730,000       30,033       8,809,117  

Travis Marquette,

    2023       956,838             2,065,773       688,894       945,540       30,620       4,687,665  

President and Chief Operating Officer

    2022       913,154             2,025,143       676,032       734,400       1,100,003       5,448,732  
    2021       276,923       2,437,637       4,159,986       3,388,327       145,879       187,153       10,595,905  

Matthew Pasch,

    2023       525,707