Table of Contents
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. )
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Preliminary Proxy Statement |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Under Rule
14a-12 |
Hanesbrands Inc.
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
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Table of Contents
Notice of the
2017 Annual Meeting of Stockholders and Proxy Statement |
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Table of Contents
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Message From Our Chairman and Our Chief
Executive Officer |
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Dear Fellow Stockholders:
In 2016, Hanesbrands again achieved record
growth in sales, operating profit and EPS. Our strong balance sheet and cash
flow continue to support our value-creating business model of innovation, supply
chain leverage and strategic acquisitions. Over the past three years, we have
generated $1.34 billion in operating cash flow, invested in our brands, made
numerous acquisitions and returned nearly $1.18 billion to our stockholders
through dividends and share repurchases, increasing stockholder value at a
compound annual growth rate of 9%. We remain in a strong position to create
further value for our stockholders in 2017 and beyond.
At Hanesbrands, we strive to work hard and
compete aggressively, but always do the right thing. We are protective of our
strong reputation for corporate citizenship and social responsibility, and proud
of our significant achievements in the areas of environmental stewardship,
workplace quality and community building around the world. We call our corporate
social responsibility program Hanes for
Good thats because adhering to responsible
and sustainable business practices is good for our company, good for our
employees, good for our communities and good for our stockholders. We invite you
to learn more about our Hanes for
Good corporate responsibility initiatives at
www.HanesforGood.com.
We also take pride in our commitment to
responsible corporate governance. Our Board is composed of a group of industry
leading experts with diverse ethnicities, genders, experiences and backgrounds
who work with management to drive long-term, sustainable performance and create
value for our stockholders. Our directors are fully engaged in the Companys
strategic planning process and provide independent guidance and oversight on the
economic, operational and legal risks that we face. To that end, the Boards
efforts have included overseeing the smooth transition in our senior leadership,
building upon our robust corporate governance policies and emphasizing a
pay-for-performance culture by linking a substantial percentage of our
executives compensation to our performance and stockholders value growth. We
continue to refine our corporate governance practices most recently by
permitting our stockholders to amend our bylaws by majority vote and by lowering
the percentage of outstanding shares required to call a stockholder-requested
special meeting.
Our 2017 Annual Meeting of Stockholders
will be held on Tuesday, April 25, 2017, at 2:15 p.m., at the Companys
headquarters, located at 1000 East Hanes Mill Road, Winston-Salem, NC 27105. This
proxy statement will serve as your guide to the business to be conducted at the
annual meeting. We invite you to attend, and ask you to please vote at your
earliest convenience whether or not you plan to attend. Your vote is
important.
We appreciate your confidence and
continued support of Hanesbrands.
Sincerely yours, |
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RICHARD A. NOLL |
GERALD W. EVANS, JR. |
Chairman of the Board of Directors |
Chief Executive
Officer |
Table of Contents
Proxy Summary
Item
1. |
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Election of
Directors
✓ The Board of Directors recommends a vote
FOR the ten directors nominated for election
>> See page 10 for
further information about our director
nominees |
Director Nominees
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Hanesbrands Committees |
Name |
Occupation |
Age |
Director since |
Independent |
Other current directorships |
A |
C |
G&N |
Gerald W. Evans,
Jr. |
Chief Executive Officer of Hanesbrands Inc. |
57 |
2016 |
NO |
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Bobby J. Griffin |
Former President, International Operations of Ryder System,
Inc. |
68 |
2006 |
YES |
●United Rentals, Inc.
●WESCO International, Inc.
●Atlas Air Worldwide Holdings, Inc. |
M |
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James C. Johnson |
Former General Counsel of Loop Capital Markets LLC |
64 |
2006 |
YES |
●Ameren Corporation
●Energizer Holdings, Inc.
●Edgewell Personal Care
Company |
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M |
C |
Jessica T. Mathews |
Distinguished Fellow, Carnegie Endowment for International
Peace |
70 |
2006 |
YES |
●SomaLogic, Inc. |
M |
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Franck J. Moison |
Vice Chairman of the Colgate-Palmolive Company |
63 |
2015 |
YES |
●United Parcel Service, Inc. |
M |
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Robert F. Moran |
Interim Chief Executive Officer of GNC Holdings, Inc. |
66 |
2013 |
YES |
●GNC Holdings, Inc. |
C |
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Ronald L. Nelson* |
Executive Chairman of Avis Budget Group, Inc. |
64 |
2008 |
YES |
●Avis Budget Group, Inc.
●Convergys Corporation
●Viacom Inc. |
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M |
M |
Richard A. Noll |
Chairman of the Board of Directors and former Chief Executive Officer of Hanesbrands Inc. |
59 |
2005 |
NO |
●The Fresh Market, Inc. |
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David V. Singer |
Former Chief Executive Officer of Snyders-Lance, Inc. |
61 |
2014 |
YES |
●Brunswick Corporation
●Flowers Foods, Inc.
●SPX FLOW, Inc. |
M |
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Ann E. Ziegler |
Senior Vice President and Chief Financial Officer of CDW
Corporation |
58 |
2008 |
YES |
●Groupon, Inc. |
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C** |
M |
A:
Audit |
*: Lead
Director |
C:
Compensation |
C: Chair |
G&N: Governance & Nominating |
M:
Member |
** |
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Andrew J. Schindler, the current
Chair of the Compensation Committee, has reached the mandatory retirement
age under our Corporate Governance Guidelines and will not stand for
re-election. Effective immediately following the Annual Meeting, Ms.
Ziegler will become the Chair of the Compensation
Committee. |
Table of Contents
Director Nominee
Skills and Qualifications
Chief Executive Officer Experience |
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Corporate Governance Experience |
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Corporate Management Experience |
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Financial Literacy |
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Industry Experience |
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International Business Experience |
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Chief Financial Officer Experience |
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Extensive Knowledge of the Company’s Business |
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Corporate Governance Highlights
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The majority of director nominees are independent (8 of 10) |
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Annual election of directors |
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Majority voting for directors |
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Strong Lead Director |
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Board oversight of risk management |
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Succession planning for CEO and key members of senior management |
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Annual, robust Board and committee self-evaluation process |
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Executive and director stock ownership guidelines |
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Mandatory one-year holding period of stock following vesting of equity awards |
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Hedging and pledging of company stock is prohibited |
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Bylaws may be amended by stockholders representing a majority of outstanding shares |
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Threshold for calling stockholder-requested special meeting reduced from 50% to 20% of outstanding shares |
Item 2. |
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To ratify the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting
firm
✓ The Board of Directors recommends a
vote FOR this item
We are asking you to ratify the
appointment of PricewaterhouseCoopers LLP (PwC) as our independent auditor for
our 2017 financial year.
>> See page 26 for further
information about our independent
auditors |
Table of Contents
Item 3. |
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To approve, on an advisory basis, executive
compensation as disclosed in the proxy statement for our 2017 Annual
Meeting
✓ The Board of Directors recommends a
vote FOR this item
Hanesbrands stockholders have the
opportunity to cast a non-binding, advisory say on pay vote on our named
executive officer compensation, as disclosed in this proxy statement. We
ask for your approval of the compensation of our named executive officers.
Before considering this proposal, please read our Compensation Discussion
and Analysis, which explains our executive compensation programs and the
Compensation Committees compensation decisions.
>> See page 31 for further
information about our executive compensation
program |
Item 4. |
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To recommend, on an advisory basis, the frequency of future advisory votes on executive compensation
✓The Board of Directors recommends a vote in favor of holding future stockholder advisory votes on the compensation of Hanesbrands named executive officers EVERY YEAR
As discussed in Item 3, Hanesbrands gives its stockholders the opportunity to cast a non-binding, advisory vote on the Company’s
executive compensation. Hanesbrands’ stockholders also have the opportunity to cast a non-binding, advisory vote on
whether the Company should hold future stockholder advisory votes on executive compensation every year, every two years or
every three years.
>> See page 30 for further information about the frequency of future executive compensation advisory votes |
Table of Contents
EXECUTIVE
COMPENSATION
Pay for
Performance
At Hanesbrands, we emphasize a
pay-for-performance culture, linking a substantial percentage of an
executives compensation to our performance and stockholders value growth.
Specifically:
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To motivate our executive officers and
align their interests with those of our stockholders, we provide annual
incentives designed to reward our executive officers for the attainment of
short-term goals and long-term incentives designed to reward them for increasing
stockholder value over time. |
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Performance-based and at-risk compensation
represents over 75% of our named executive officers total target direct
compensation. |
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In keeping with our pay for performance
philosophy, our executive officers must deliver results that exceed the target
level of performance in order to receive above median market compensation.
Performance below the target level of performance will result in below median
market compensation. |
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Our compensation program is designed to
reward exceptional and sustained performance. By combining a three-year vesting
period for equity awards with a mandatory one-year holding period following
vesting (and policies prohibiting hedging or pledging of such shares), a
substantial portion of the value of our executives compensation package is tied
to changes in our stock price, and therefore at-risk, for a significant period
of time. The Compensation Committee believes this design provides an effective
way to link executive compensation to long-term stockholder returns. |
2016 Results and
Highlights
We achieved the following financial and
strategic results in 2016:
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Net sales in 2016 were $6.0 billion,
compared with $5.7 billion in 2015, representing a 5.2%
increase. |
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On a GAAP basis, 2016 diluted
earnings per share from continuing operations (EPS) of $1.40 increased
32% over 2015 EPS of $1.06. When excluding pre-tax charges related to
acquisition, integration and other actions, 2016 diluted earnings per share
from continuing operations, excluding actions (EPS-XA)* of $1.85
increased 11.4% over 2015 EPS-XA of $1.66. |
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We generated $606 million in cash
flow from operations, representing a 167% increase from
2015. |
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We acquired Champion Europe S.p.A.
(Champion Europe), which combined with Champion brand rights previously
owned, unites the Champion brand globally and will
give us a powerful platform for growth on every
continent. |
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We also acquired Pacific Brands
Limited (Hanes Australasia), a leading underwear and intimate apparel
company in Australia with a portfolio of strong brands including
Bonds, Australias top brand of underwear, babywear and socks, and
Berlei, the countrys No. 1 sports bra brand and leading seller of
premium bras in department stores. We believe this acquisition will create
growth opportunities by adding to our portfolio of leading innerwear
brands supported by our global low-cost supply chain and manufacturing
network. |
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As part of our cash deployment
strategy, we paid four quarterly dividends of $0.11 per share and also
repurchased approximately 14.2 million shares of our
stock. |
* |
EPS-XA is a non-GAAP financial measure
which is used as a performance metric in our executive compensation programs.
EPS-XA is defined as EPS excluding actions and the tax effect on
actions. We have chosen to provide this non-GAAP financial measure to investors
to enable additional analyses of past, present and future operating performance
and as a supplemental means of evaluating company operations absent the effect
of acquisition-related expenses and other actions. For a reconciliation to GAAP
EPS, see Appendix A. |
Table of Contents
Elements of 2016 Compensation
Our named executive officers compensation for
2016 consisted principally of the following elements:
Base
Salary |
●Fixed compensation component
●Reflects the individual responsibilities,
performance and experience of each named executive officer |
●Provides a fixed base of cash compensation
for fulfillment of fundamental job responsibilities |
Annual
Incentive Plan (AIP) Awards |
●Performance-based cash
compensation
●Payout determined based on Company
performance against pre-established metrics |
●Motivates performance by linking
compensation to the achievement of key objectives that contribute to
accomplishing consistent and strategic annual results |
Long-Term Incentive Program (LTIP)
Awards |
●Performance-based and at-risk, time-vested
compensation
●Performance Share Awards (PSAs) (50% of
LTIP opportunity)
●Shares eligible for vesting three years
after grant date based on 2016 Company performance against pre-established
metrics
●Restricted Stock Unit Awards (RSUs) (50%
of LTIP opportunity)
●Ratable vesting over a three-year service
period
●Mandatory one-year holding period following
vesting for all LTIP awards |
●Encourages behavior that enhances the
long-term growth, profitability and financial success of the Company,
aligns executives interests with our stockholders and supports retention
objectives |
Executive Compensation
Mix
Our emphasis on
performance-based and at-risk pay is reflected in the following chart, which
illustrates the 2016 total target direct compensation mix for our former Chief
Executive Officer and our other named executive officers (NEOs).
2016 Total
Target Direct Compensation |
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Performance-Based and At-Risk |
Performance-Based and At-Risk |
Compensation: 89.3% |
Compensation: 76.0% |
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Table of Contents
2016 Performance
Criteria
The Compensation
Committee chose to use sales growth, EPS-XA growth, and cash flow from
operations as performance criteria for our named executive officers 2016
performance-based pay opportunities, as follows:
2016 Executive
Compensation
Summary of Compensation
The following table sets forth a summary of
compensation earned by or paid to our named executive officers for our 2016,
2015 and 2014 fiscal years.
Name and Principal
Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) |
Non-Equity Incentive
Plan Compensation ($) |
Change in Pension
Value and Nonqualified Deferred Compensation Earnings
($) |
All
Other Compensation ($) |
Total Compensation ($) |
Richard A.
Noll Executive Chairman and Former Chief
Executive Officer |
2016 |
$1,200,000 |
|
$2,500,008 |
$2,390,040 |
$42,488 |
$549,461 |
$6,681,997 |
2015 |
1,200,000 |
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8,200,017 |
2,160,000 |
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383,640 |
11,943,657 |
2014 |
1,200,000 |
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6,200,072 |
3,268,800 |
110,415 |
337,221 |
11,116,508 |
Gerald W. Evans,
Jr. Chief Executive Officer |
2016 |
912,500 |
|
6,543,769 |
1,394,190 |
132,718 |
206,366 |
9,189,543 |
2015 |
750,000 |
|
2,450,002 |
900,000 |
8,612 |
190,895 |
4,299,509 |
2014 |
750,000 |
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2,099,936 |
1,362,000 |
279,792 |
174,600 |
4,666,328 |
Richard D.
Moss Chief Financial Officer |
2016 |
575,000 |
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1,600,018 |
763,485 |
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323,735 |
3,262,238 |
2015 |
575,000 |
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1,450,008 |
690,000 |
|
157,830 |
2,872,838 |
2014 |
575,000 |
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1,250,098 |
1,044,200 |
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142,003 |
3,011,300 |
Joia M.
Johnson Chief Administrative Officer, General
Counsel and Corporate Secretary |
2016 |
515,000 |
|
1,082,012 |
581,245 |
|
278,966 |
2,457,223 |
2015 |
515,000 |
|
960,007 |
525,300 |
|
120,248 |
2,120,556 |
2014 |
515,000 |
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1,155,074 |
794,954 |
|
108,339 |
2,573,367 |
W. Howard
Upchurch Group President, Innerwear
Americas |
2016 |
525,000 |
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1,201,980 |
592,531 |
29,398 |
103,155 |
2,452,064 |
2015 |
525,000 |
|
924,972 |
535,500 |
|
111,184 |
2,096,656 |
2014 |
515,000 |
|
925,024 |
794,954 |
75,299 |
94,204 |
2,404,481 |
Michael E.
Faircloth President, Chief Global Supply Chain
and Information Technology Officer |
2016 |
510,000 |
|
1,105,012 |
507,884 |
13,083 |
85,673 |
2,221,651 |
>> Please see page 47 for
further explanation and detail
Table of Contents
Table of Contents
Notice of the 2017 Annual Meeting of
Stockholders
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WHEN: Tuesday, April 25, 2017 2:15 p.m.,
Eastern time |
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WHERE: Hanesbrands
Inc. 1000 East Hanes Mill Road Winston-Salem, NC 27105 |
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PURPOSE: |
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1. |
to elect ten directors to serve on the Hanesbrands Board of Directors until Hanesbrands next annual meeting of stockholders and until their successors are duly elected and qualify; |
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2. |
to vote on a proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our 2017 fiscal year; |
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to vote on a proposal to approve, on an advisory basis, executive compensation as disclosed in the proxy statement for our 2017 Annual Meeting; |
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to vote on a proposal to recommend, on an advisory basis, the frequency of future advisory votes regarding executive compensation; and |
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to transact such other business as may properly come before the meeting or any adjournment or postponement thereof. |
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RECORD
DATE: Stockholders of record at the close of business on February 14, 2017 are entitled to notice of, and to vote at, the Annual Meeting. |
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The Board of Directors is not aware of any matter that will be presented at the Annual Meeting that is not described above. If any other matter is properly presented at the Annual Meeting, the persons named as proxies on the proxy card will, in the absence of stockholder instructions to the contrary, vote the shares for which such persons have voting authority in accordance with their discretion on any such matter. |
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By Order of the Board of
Directors
JOIA M.
JOHNSON Chief Administrative Officer,
General Counsel and Corporate Secretary |
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March 13,
2017 Winston-Salem, North Carolina |
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HOW TO VOTE:
Whether or not you plan to attend the meeting, we urge you to authorize a proxy to vote your shares via the toll-free telephone number or over the Internet, as described in the enclosed materials. If you requested and received a copy of the proxy card by mail, you may sign, date and mail the proxy card in the envelope provided.
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BY
TELEPHONE In the U.S. or
Canada, you can authorize a proxy to vote your shares toll-free by calling 1-800-690-6903. |
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BY
INTERNET You can authorize a
proxy to vote your shares online at www.proxyvote.com. |
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BY
MAIL You can authorize a
proxy to vote by mail by marking, dating, and signing your proxy card or
voting instruction form and returning it in the postage-paid
envelope. |
ATTENDING THE
MEETING
An admission ticket (or other proof of stock ownership) and some form of government-issued photo identification (such as a valid drivers license or passport) will be required for admission to the Annual Meeting. Only stockholders who owned shares of Hanesbrands common stock as of the close of business on February 14, 2017 will be entitled to attend the Annual Meeting.
Important Notice regarding the availability of proxy materials for the Annual Meeting of Stockholders to be held on April 25, 2017.
The Annual Report and Proxy
Statement are available at www.proxyvote.com.
The Notice of Internet Availability of Proxy Materials, or this Notice of the 2017 Annual Meeting of Stockholders, this Proxy Statement and our 2016 annual report on Form 10-K are first being mailed to stockholders on or about March 13, 2017.
Table of Contents
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Corporate Governance at
Hanesbrands |
Proposal 1Election of
Directors
Our Board of Directors
currently has eleven members. In furtherance of our executive leadership
succession plan, Gerald W. Evans, Jr. was appointed to the Board effective as of
June 13, 2016. In addition, one of our current directors, Andrew J. Schindler,
has reached the mandatory retirement age under our Corporate Governance
Guidelines and will not stand for re-election. Effective immediately prior to
the Annual Meeting, the size of the Board will be reduced to ten
members.
Each of our directors is
elected to serve until the next annual meeting of stockholders and until his or
her successor is duly elected and qualified. If a nominee is unavailable for
election, proxy holders may vote for another nominee proposed by the Board or,
as an alternative, the Board may reduce the number of directors to be elected at
the Annual Meeting. Each nominee has agreed to serve on the Board if elected.
Following is information regarding each of the nominees for election,
which has been confirmed by the applicable nominee for inclusion in this proxy
statement.
In 2015, the Board adopted and
approved amendments to the Companys bylaws to implement a majority voting
standard in uncontested director elections. Consequently, each director nominee
will be elected by a majority of votes cast in uncontested director elections.
In contested elections, the plurality voting standard continues to apply. In
addition, pursuant to our Corporate Governance Guidelines, if in an uncontested
election for director a nominee for director does not receive the affirmative
vote of a majority of the total votes cast for and against such nominee, the
nominee will offer, following certification of the election results, to submit
his or her resignation to the Board for consideration.
The ten nominees for election
at the Annual Meeting possess experience and qualifications that our Governance
and Nominating Committee believes will allow them to make substantial
contributions to the Board. In selecting nominees to the Board, we seek to
ensure that our Board collectively has a balance of experience and expertise,
including chief executive officer experience, chief financial officer
experience, international expertise, deep experience in the consumer products
industry, corporate governance expertise and expertise in other functional areas
that are relevant to our business. For more information about the process by
which the Governance and Nominating Committee identifies candidates for election
to the Board, please see Process for Nominating Potential Director Candidates
on page 17. Following, please find a more detailed discussion of the business
experience of each of the nominees to the Board.
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Our Board
of Directors unanimously recommends a vote FOR election of these ten
nominees. |
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Table of Contents
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Corporate Governance at Hanesbrands |
Director Nominee
Skills and Qualifications
Table of Contents
Corporate Governance at Hanesbrands |
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Nominees
for Election as Directors for a One-Year Term Expiring in 2018
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Gerald W.
Evans, Jr. |
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Chief
Executive Officer of Hanesbrands Inc.
Age: 57 Director Since: 2016 Committee Membership: None |
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Mr. Evans has served as
our Chief Executive Officer since October 2016. From August 2013 to
October 2016, he served as Chief Operating Officer of the Company, and
from October 2011 until August 2013, he served as Co-Chief Operating
Officer of the Company. Prior to his appointment as Co-Chief Operating
Officer, Mr. Evans served as the Companys Co-Operating Officer, President
International, from November 2010 until October 2011. From February 2009
until November 2010, he was President of the Companys International
Business and Global Supply Chain. From February 2008 until February 2009,
he served as President of the Companys Global Supply Chain and Asia
Business Development. From September 2006 until February 2008, he served
as Executive Vice President, Chief Supply Chain Officer. From July 2005
until September 2006, Mr. Evans served as a Vice President of Sara Lee
Corporation, our former parent company, and as Chief Supply Chain Officer
of Sara Lee Branded Apparel. Mr. Evans served as President and Chief
Executive Officer of Sara Lee Sportswear and Underwear from March 2003
until June 2005 and as President and Chief Executive Officer of Sara Lee
Sportswear from March 1999 to February 2003. |
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Specific Experience and Qualifications: |
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Corporate Management Experience and
Financial Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
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Chief Executive Officer
Experience |
Has experience in, and
possesses an understanding of, business issues applicable to the success
of a large publicly-traded company |
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International Business
Experience |
Served in senior
leadership positions with companies engaged in international
business |
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Industry
Experience |
Served in senior
leadership positions with companies in the consumer products
industry |
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Extensive Knowledge of the Companys
Business |
Has extensive knowledge
of Hanesbrands business and the apparel industry |
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Bobby J.
Griffin |
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Former President, International Operations of Ryder System,
Inc.
Age: 68 Director Since: 2006 Committee Membership: Audit
Other Current Directorships:
●United Rentals, Inc.
●WESCO International, Inc.
●Atlas Air Worldwide Holdings,
Inc. Former
Directorships Within the Past Five Years:
●Horizon Lines, Inc. |
|
|
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|
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|
|
Mr. Griffin served as
President, International Operations of Ryder System, Inc., a global leader
in transportation and supply chain management solutions, from 2005 to
2007. Beginning in 1986, Mr. Griffin served in various other management
positions with Ryder System, Inc., including as Executive Vice President,
International Operations from 2003 to 2005 and Executive Vice President,
Global Supply Chain Operations from 2001 to 2003. |
|
|
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|
|
|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and
Financial Literacy |
Served in senior
leadership positions with a large organization and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
|
|
|
|
|
|
International Business
Experience |
Served in senior
leadership positions with a company engaged in international
business |
|
|
|
|
|
|
Practical
Expertise |
Gained substantial
experience in mergers and acquisitions, procurement and distribution,
strategic planning, and transportation and security through service in
senior leadership positions with a large international
company |
|
|
|
|
|
|
Corporate Governance
Experience |
Gained experience in
corporate governance through service as a director of other public
companies |
|
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|
|
|
Table of Contents
|
Corporate Governance at Hanesbrands |
|
James C.
Johnson |
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|
|
Former General Counsel of Loop Capital Markets
LLC
Age: 64 Director Since: 2006 Committee Membership: Compensation, Governance and
Nominating (Chair)
Other Current Directorships:
●Ameren Corporation
●Energizer Holdings, Inc.
●Edgewell Personal Care
Company |
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Mr. Johnson served as
General Counsel of Loop Capital Markets LLC, a provider of a broad range
of integrated capital solutions for corporate, governmental and
institutional entities, from 2010 until 2013. Mr. Johnson previously
served as Vice President and Assistant General Counsel of the Boeing
Commercial Airplanes division of The Boeing Company, one of the worlds
major aerospace firms, from 2007 until 2009. From 1998 until 2007, Mr.
Johnson served as Vice President, Corporate Secretary and Assistant
General Counsel of The Boeing Company. He currently serves as a trustee of
the University of Pennsylvania and a Member of the Board of Overseers of
the College of Arts and Sciences. |
|
|
|
|
|
|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions in a large organization and has experience with
corporate management issues; reporting to the General Counsel, had
responsibility for the staff and legal affairs for Boeing Commercial
Airplanes, a business with annual revenue in excess of $20
billion |
|
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|
Practical
Expertise |
Served as Vice
President, Corporate Secretary and Assistant General Counsel of The Boeing
Company, where he gained practical expertise in the area of corporate
governance and significant business and financial
issues |
|
|
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|
|
Corporate
Governance Experience |
Gained substantial
experience in the oversight and administration of governance policies and
programs through service as a director of other public companies, as well
as through his position as Corporate Secretary of The Boeing Company;
gained additional experience in executive compensation as a member of the
compensation committee and as the chair of the compensation committee for
two other public companies |
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Jessica T. Mathews |
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|
Distinguished Fellow, Carnegie Endowment for International
Peace
Age: 70 Director Since: 2006 Committee Membership: Audit
Other Current Directorships:
●SomaLogic, Inc. |
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|
Ms. Mathews has served
as a Distinguished Fellow at the Carnegie Endowment for International
Peace, a foreign policy think tank dedicated to advancing cooperation
between nations and promoting active international engagement by the
United States, since 2015. From 1997 to 2015, Ms. Mathews served as
President of the Carnegie Endowment for International Peace. She also
served as Deputy to the Undersecretary of State for Global Affairs in the
Department of State in 1993 and in other senior governmental and
non-governmental positions earlier in her career. Ms. Mathews was Director
of the Washington Office of the Council on Foreign Relations from 1994 to
1997. She serves as a trustee of Harvard University and several other
nonprofit organizations. |
|
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|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements; also serves on the Finance Committee
at Harvard University overseeing a $35 billion endowment and $4.5 billion
budget |
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|
Practical
Expertise |
Serves in a
policy-making role that is relevant to Hanesbrands international
activities; also has practical expertise in the areas of environmental
policy, labor and human rights advocacy and non-governmental organization
relationships |
|
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|
|
Corporate
Governance Experience |
Gained experience in
corporate governance through service as a director of a privately held
protein biomarker discovery and clinical diagnostics
company |
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|
Table of Contents
Corporate Governance at Hanesbrands |
|
|
Franck J. Moison |
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|
Vice
Chairman of the Colgate-Palmolive Company
Age: 63 Director Since: 2015 Committee Membership: Audit
Other Current Directorships:
●United Parcel Service,
Inc.
Former
Directorships Within the Past
Five Years:
●H.J. Heinz Company |
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Mr. Moison has served as
Vice Chairman of the Colgate-Palmolive Company, a leading consumer
products company, since 2016. He served as Chief Operating Officer of
Emerging Markets & Business Development for the Colgate-Palmolive
Company from 2010 to 2016. Beginning in 1978, Mr. Moison served in various
management positions with the Colgate-Palmolive Company, including as
President, Global Marketing, Supply Chain & R&D from 2007 to 2010,
and President, Western Europe, Central Europe and South Pacific from 2005
to 2007. He serves as a member of the board of directors of the French
American Chamber of Commerce, as Chairman of the International Advisory
Board of the EDHEC Business School (Paris, London, Singapore) and as a
member of the International Board of the McDonough School of Business at
Georgetown University. |
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|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
|
|
|
|
|
|
International Business
Experience |
Served in senior
leadership positions with companies engaged in international
business |
|
|
|
|
|
|
Industry
Experience |
Served in senior
leadership positions with companies in the consumer products
industry |
|
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|
|
Corporate Governance
Experience |
Gained experience in
corporate governance through service as a director of other public
companies |
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Robert F.
Moran |
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Interim Chief Executive Officer of GNC Holdings,
Inc.
Age: 66 Director Since: 2013 Committee Membership: Audit (Chair)
Other Current Directorships:
●GNC Holdings,
Inc. Former
Directorships Within the Past
Five Years:
●PetSmart, Inc.
●Collective Brands, Inc. |
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Mr. Moran has served as
Interim Chief Executive Officer of GNC Holdings, Inc., a leading global
specialty retailer of health and wellness products, since 2016. He served
as Chairman of the Board of PetSmart, Inc. (PetSmart), a leading
specialty provider of pet care products and services, from 2012 to 2013
and as Chief Executive Officer of PetSmart from 2009 to 2013. He joined
PetSmart as President of North American Stores in 1999, and in 2001 he was
appointed President and Chief Operating Officer. From 1998 to 1999, Mr.
Moran was President of Toys R Us (Canada) Ltd., a subsidiary of
specialty toy retailer Toys R Us, Inc. Prior to 1991 and from 1993 to
1998, for a total of 20 years, Mr. Moran was employed by retailer Sears,
Roebuck and Company in a variety of financial and merchandising positions,
including as President and Chief Executive Officer of Sears de Mexico. He
was also Chief Financial Officer and Executive Vice President of Galerias
Preciados of Madrid, Spain, a leading department store, from 1991 to 1993.
Mr. Moran also serves as a director of the USA Track and Field
Foundation. |
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|
|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
|
|
|
|
|
|
Chief Executive Officer
Experience |
Has experience in, and
possesses an understanding of, business issues applicable to the success
of a large publicly-traded company |
|
|
|
|
|
|
Chief Financial Officer
Experience |
Possesses financial
acumen and an understanding of financial matters and the preparation and
analysis of financial statements |
|
|
|
|
|
|
International Business
Experience |
Served in senior
leadership positions with companies engaged in international
business |
|
|
|
|
|
|
Industry
Experience |
Served in senior
leadership positions with companies in the consumer products
industry |
|
|
|
|
|
|
Corporate Governance
Experience |
Gained experience in
corporate governance through service as a director of other public
companies |
|
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|
Table of Contents
|
Corporate Governance at Hanesbrands |
|
Ronald L.
Nelson |
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Executive Chairman of Avis Budget Group,
Inc.
Age: 64 Director Since: 2008 Committee Membership: Compensation, Governance and Nominating
Lead Director
Other Current Directorships:
●Avis Budget Group, Inc.
●Convergys Corporation
●Viacom Inc. |
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Mr. Nelson has served as
Executive Chairman of Avis Budget Group, Inc. (Avis Budget Group), which
operates two major brands in the global vehicle rental industry through
Avis and Budget, since January 1, 2016. From 2006 to 2015, Mr. Nelson
served as Chairman and Chief Executive Officer of Avis Budget Group. Mr.
Nelson was a director of Cendant Corporation (the predecessor of Avis
Budget Group) from 2003 to 2006, Chief Financial Officer from 2003 until
2006 and President from 2004 to 2006. Mr. Nelson was also Chairman and Chief
Executive Officer of Cendant Corporations Vehicle Rental business from
January 2006 to August 2006. From 2005 to 2006, Mr. Nelson was interim
Chief Executive Officer of Cendant Corporations former Travel
Distribution Division. |
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|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
|
|
|
|
|
|
Chief Executive Officer
Experience |
Has experience in, and
possesses an understanding of, business issues applicable to the success
of a large publicly-traded company |
|
|
|
|
|
|
Chief Financial Officer
Experience |
Possesses financial
acumen and an understanding of financial matters and the preparation and
analysis of financial statements |
|
|
|
|
|
|
International Business
Experience |
Served in senior
leadership positions with companies engaged in international
business |
|
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|
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|
|
Industry
Experience |
Served in senior
leadership positions with companies in the consumer products
industry |
|
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|
|
|
|
Corporate Governance
Experience |
Gained experience in
corporate governance through service as a director of other public
companies |
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Richard A. Noll |
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Executive Chairman of Hanesbrands Inc.
Age: 59 Director Since: 2005 Committee Membership: None
Other Current Directorships:
●The Fresh Market, Inc. |
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Mr. Noll has served as
Chairman of the Board of Hanesbrands Inc. since 2009, Executive Chairman
since October 1, 2016, and Chief Executive Officer from 2006 to October 1,
2016. Previously in his career, Mr. Noll led the turnarounds of several
Sara Lee Corporation bakery and apparel businesses, consulted for
Strategic Planning Associates, and began his career as a systems
programmer. Mr. Noll is also a member of the Business
Roundtable. |
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|
|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
|
|
|
|
|
|
Chief Executive Officer
Experience |
Has experience in, and
possesses an understanding of, business issues applicable to the success
of a large publicly-traded company |
|
|
|
|
|
|
International Business
Experience |
Served in senior
leadership positions with companies engaged in international
business |
|
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|
|
Industry
Experience |
Served in senior
leadership positions with companies in the consumer products
industry |
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|
|
Extensive Knowledge of the Companys
Business |
Has extensive knowledge
of Hanesbrands business and the apparel industry |
|
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|
|
|
Corporate Governance
Experience |
Gained experience in
corporate governance through service as a director of another public
company |
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|
Table of Contents
Corporate Governance at Hanesbrands |
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|
David V. Singer |
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Former Chief Executive Officer of Snyders-Lance,
Inc.
Age: 61 Director Since: 2014 Committee Membership: Audit
Other Current Directorships:
●Brunswick Corporation
●Flowers Foods, Inc.
●SPX FLOW, Inc. Former Directorships Within the Past Five
Years:
●Synders-Lance, Inc. |
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From 2010 to 2013, Mr.
Singer served as Chief Executive Officer of Snyders-Lance, Inc., a
manufacturer and marketer of snack foods throughout the United States and
internationally. He also served as the President and Chief Executive
Officer of Lance, Inc. from 2005 until its merger with Snyders of
Hanover, Inc. in 2010. From 1987 to 2005, Mr. Singer served as Chief
Financial Officer of Coca-Cola Bottling Co. Consolidated, a beverage
manufacturer and distributor. Prior to 1987, Mr. Singer was Vice President
of Mellon Bank, N.A. |
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|
Specific Experience and Qualifications: |
|
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|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
|
|
|
|
|
|
Chief Executive Officer
Experience |
Has experience in, and
possesses an understanding of, business issues applicable to the success
of a large publicly-traded company |
|
|
|
|
|
|
Chief Financial Officer
Experience |
Possesses financial
acumen and an understanding of financial matters and the preparation and
analysis of financial statements |
|
|
|
|
|
|
International Business
Experience |
Served in senior
leadership positions with companies engaged in international
business |
|
|
|
|
|
|
Industry
Experience |
Served in senior
leadership positions with companies in the consumer products
industry |
|
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|
|
|
|
Corporate Governance
Experience |
Gained experience in
corporate governance through service as a director of other public
companies |
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|
Ann
E. Ziegler |
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|
Senior Vice President and Chief Financial Officer of CDW
Corporation
Age:
58 Director Since: 2008 Committee Membership: Compensation (Chair*), Governance and
Nominating
Other
Current Directorships:
●Groupon, Inc. |
|
|
* Andrew J. Schindler, the current Chair of
the Compensation Committee, has reached the mandatory retirement age under
our Corporate Governance Guidelines and will not stand for re-election.
Effective immediately following the Annual Meeting, Ms. Ziegler will
become the Chair of the Compensation Committee. |
|
|
Ms. Ziegler has served
as Senior Vice President and Chief Financial Officer and a member of the
executive committee of CDW Corporation, a leading provider of technology
solutions for business, government, healthcare and education, since 2008.
From 2005 until 2008, Ms. Ziegler served as Senior Vice President,
Administration and Chief Financial Officer of Sara Lee Food and Beverage,
a division of Sara Lee Corporation. From 2003 until 2005, she served as
Chief Financial Officer of Sara Lee Bakery Group. From 2000 until 2003,
she served as Senior Vice President, Corporate Development of Sara
Lee. |
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|
|
Specific Experience and Qualifications: |
|
|
|
|
|
|
Corporate Management Experience and Financial
Literacy |
Served in senior
leadership positions with large organizations and has experience with
corporate management issues, including preparing or overseeing the
preparation of financial statements |
|
|
|
|
|
|
Chief Financial Officer
Experience |
Possesses financial
acumen and an understanding of financial matters and the preparation and
analysis of financial statements |
|
|
|
|
|
|
Industry
Experience |
Served in senior
leadership positions with companies in the consumer products
industry |
|
|
|
|
|
|
Corporate Governance
Experience |
Gained experience in
corporate governance through service as a director of other public
companies |
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|
Table of Contents
|
Corporate Governance at Hanesbrands |
How We
Select our Directors
Process for Nominating
Potential Director Candidates
The
Governance and Nominating Committee is responsible for screening potential
director candidates and recommending qualified candidates to the full Board of
Directors for nomination. The Governance and Nominating Committee will consider
director candidates proposed by the Chief Executive Officer, by any director or
by any stockholder. From time to time, the Governance and Nominating Committee
also retains search firms to assist it in identifying and evaluating director
nominees. In evaluating potential director candidates, the Governance and
Nominating Committee seeks to present candidates to the Board of Directors who
have distinguished records of leadership and success in their arena of activity
and who will make substantial contributions to the Board of Directors. The
Governance and Nominating Committee considers the qualifications listed in our
Corporate Governance Guidelines, which include:
● |
personal and
professional ethics and integrity; |
● |
diversity among the
existing Board members, including racial and ethnic background and
gender; |
● |
specific business
experience and competence, including whether the candidate has experience
in, and possesses an understanding of, business issues applicable to the
success of a large publicly-traded company and whether the candidate has
served in policy-making roles in business, government, education or other
areas that are relevant to our global activities; |
● |
financial acumen,
including whether the candidate, through education or experience, has an
understanding of financial matters and the preparation and analysis of
financial statements; |
● |
the ability to represent
our stockholders as a whole; |
● |
professional and personal accomplishments, including
involvement in civic and charitable activities; |
● |
experience with
enterprise level risk management; |
● |
educational background;
and |
● |
whether the candidate
has expressed a willingness to devote sufficient time to carrying out his
or her duties and responsibilities effectively and is committed to service
on the Board of Directors. |
Although we do not have a
standalone policy regarding diversity in the nomination process, as noted above,
diversity is one of the criteria that our Corporate Governance Guidelines
require that our Governance and Nominating Committee consider in identifying and
evaluating director nominees. In applying this criteria, the Governance and
Nominating Committee and the Board consider diversity to also include
differences of viewpoint, professional experience, education, skill and other
individual qualities and attributes that contribute to an active, effective
Board. The Governance and Nominating Committee evaluates the effectiveness of
its activities under this policy through its annual review of Board composition,
which considers whether the current composition of the Board adequately reflects
the balance of qualifications discussed above, including diversity, prior to
recommending nominees for election. In this regard, the Board believes that its
efforts have been effective based on the current composition of the
Board.
Our Corporate Governance
Guidelines provide that no director may stand for re-election to the Board of
Directors after he or she has reached the age of 72. However, our Governance and
Nominating Committee has the authority to extend the retirement age of an
individual director for up to two periods of one year each.
Any recommendation submitted
by a stockholder to the Governance and Nominating Committee should include
information relating to each of the qualifications outlined above concerning the
potential candidate along with the other information required by our bylaws for
stockholder nominations. The Governance and Nominating Committee applies the
same standards in evaluating candidates submitted by stockholders as it does in
evaluating candidates submitted by other sources. Suggestions regarding
potential director candidates, together with the required information described
above, should be submitted in writing to Hanesbrands Inc., 1000 East Hanes Mill
Road, Winston-Salem, North Carolina 27105, Attention: Corporate Secretary.
Stockholders who want to directly nominate a director for consideration at next
years Annual Meeting should refer to the procedures described under
Stockholder Proposals and Director Nominations for Next Annual Meeting on page
63.
Director Independence
In order to assist our Board of Directors
in making the independence determinations required by New York Stock Exchange
(NYSE) listing standards, the Board of Directors has adopted categorical
standards of independence. These standards, which are contained in our Corporate
Governance Guidelines, are available on our corporate website,
www.Hanes.com/investors (in the Investors section). Nine of the eleven current
members of our Board of Directors, Mr. Griffin, Mr. Johnson, Ms. Mathews, Mr.
Moison, Mr. Moran, Mr. Nelson, Mr. Schindler, Mr. Singer and Ms. Ziegler, are
independent under NYSE listing standards and under our Corporate Governance
Guidelines. In determining director independence, the Board of Directors did not
discuss, and was not aware of, any related person transactions, relationships or
arrangements that existed with respect to any of these directors.
Table of
Contents
Corporate Governance at Hanesbrands |
|
Our Audit Committees charter
requires that all of the members of the Audit Committee be independent under
NYSE listing standards and the rules of the Securities Exchange Commission
(SEC). The Board has determined that each of the members of our Audit
Committee is an independent director under NYSE listing standards and meets the
standards of independence applicable to audit committee members under applicable
SEC rules.
Our Compensation Committees
charter requires that all of the members of the Compensation Committee be
independent under NYSE listing standards, including the enhanced independence
requirements applicable to Compensation Committee members, non-employee
directors within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the Exchange Act) and outside directors within the meaning
of Section 162(m) of the Internal Revenue Code and the regulations thereunder.
The Board has determined that each of the members of our Compensation Committee
is an independent director under NYSE listing standards, a non-employee director
within the meaning of Rule 16b-3 under the Exchange Act and an outside director
within the meaning of Section 162(m) of the Internal Revenue Code.
Our Governance and Nominating
Committees charter requires that all of the members of the Governance and
Nominating Committee be independent under NYSE listing standards. The Board has
determined that each of the members of our Governance and Nominating Committee
is an independent director under NYSE listing standards.
The Boards Role and
Responsibilities
Overview
The
Board of Directors is elected by our stockholders to oversee their interests in
the long-term health and the overall success of the Companys business. The
Board serves as the ultimate decision-making body of the Company, except for
those matters reserved to or shared with our stockholders. The Board oversees
the business of the Company, as conducted by the members of Hanesbrands senior
management. In carrying out its responsibilities, the Board reviews and assesses
Hanesbrands long-term strategy and its strategic, competitive and financial
performance.
In 2016, our Board of
Directors met seven times and also held regularly scheduled executive sessions
without management, presided over by our Lead Director. In addition, during 2016
our Audit Committee met five times, our Compensation Committee met six times and
our Governance and Nominating Committee met five times. Directors are expected
to make every effort to attend the Annual Meeting, all Board meetings and the
meetings of the Committees on which they serve. All of our directors at the time
of our 2016 Annual Meeting of Stockholders attended that Annual Meeting. In
2016, each director also attended over 75% of the meetings of the Board and the
Committees of which he or she was a member.
Risk
Oversight |
|
|
The Board as a whole is
ultimately responsible for the oversight of our risk management function.
The Board uses its committees to assist in its risk oversight function as
follows: |
|
|
|
The
Board has delegated primary
responsibility for the oversight of Hanesbrands risk management function
to the Audit Committee. |
|
|
|
The
Audit Committee discusses policies
with respect to risk assessment and risk management, including significant
financial risk exposures and the steps our management has taken to
monitor, control and report such exposures. Management of Hanesbrands
undertakes, and the Audit Committee reviews and discusses, an annual
assessment of Hanesbrands risks on an enterprise-wide
basis. |
|
The
Compensation Committee is
responsible for the oversight of risk associated with our compensation
practices and policies. |
|
The
Governance and Nominating Committee is responsible for the
oversight of Board processes and corporate governance related
risks. |
|
|
|
Our
Board of Directors maintains overall responsibility for oversight
regarding the work of its various committees by receiving regular reports
from the committee Chairs of the work performed by their respective
committees. In addition, discussions with the Board about the Companys
strategic plan, consolidated business results, capital structure,
acquisition-related activities and other business include consideration of
the risks associated with the particular item under
consideration. |
|
Table of
Contents
|
Corporate Governance at Hanesbrands |
Talent Management and
Succession Planning
On an
annual basis, our Board plans for succession to the position of Chief Executive
Officer, as well as to certain other senior management positions. To assist the
Board, our Chief Executive Officer annually provides the Board with an
assessment of executives holding those senior management positions and of their
potential to succeed him. Our Chief Executive Officer also provides the Board
with an assessment of persons considered potential successors to those senior
managers. The Board considers that information and their own impressions of
senior management performance in planning for succession in key
positions.
In June 2016, our Board
approved an executive leadership succession plan where Chairman and Chief
Executive Officer Richard A. Noll determined to step down as Chief Executive
Officer and narrow his role to that of the Companys Chairman, effective as of
October 1, 2016. As part of the Companys executive leadership succession plan,
the Board also elected Chief Operating Officer Gerald W. Evans, Jr. as the
Companys Chief Executive Officer, effective as of October 1, 2016, and as a
member of the Board of Directors, effective as of June 13, 2016. We believe that
this transition has been implemented seamlessly because of the Companys
successful talent development efforts over the last several years.
Communicating with our
Board of Directors
Any
stockholders or interested parties who wish to communicate directly with our
Board, with our non-management directors as a group or with our Lead Director,
may do so by writing to Hanesbrands Inc., 1000 East Hanes Mill Road,
Winston-Salem, North Carolina 27105, Attention: Corporate Secretary.
Stockholders and other interested parties also may communicate with members of
the Board by sending an e-mail to our Corporate Secretary at
corporate.secretary@hanes.com. To ensure proper handling, any mailing envelope
or e-mail containing the communication intended for the Board must contain a
clear notation indicating that the communication is a Stockholder/Board
Communication or an Interested Party/Board Communication.
The Governance and Nominating
Committee has approved a process for handling letters received by the Company
and addressed to the Board, the Lead Director or to independent members of the
Board. Under that process, our Corporate Secretary reviews all such
correspondence and regularly forwards to the Board copies of all correspondence
that, in her opinion, deals with the functions of the Board or its Committees or
that she otherwise determines requires their attention. Advertisements,
solicitations for business, requests for employment, requests for contributions,
matters that may be better addressed by management or other inappropriate
material will not be forwarded to our directors.
Board Structure and
Processes
Board Leadership
Structure
Our current Board
leadership structure consists of:
● |
Executive
Chairman of the Board: Richard A. Noll; |
● |
Chief Executive Officer: Gerald W. Evans, Jr.; |
● |
Lead Independent Director: Ronald L. Nelson; and |
● |
Fully independent Audit, Compensation and Governance and Nominating
Committees. |
Our Corporate Governance
Guidelines provide that the Governance and Nominating Committee will from time
to time consider whether the positions of Chairman of the Board and Chief
Executive Officer should be held by the same person or by different persons. As
part of our 2016 executive leadership changes, the Board split the roles of
Chief Executive Officer and Chairman when Mr. Noll stepped down from
the role of Chief Executive Officer in October
2016.
The Board believes that the
recent implementation of a carefully considered executive leadership succession
plan demonstrates that the Board takes seriously its responsibility to determine
who should serve as Chairman at any point in time in light of the
specific circumstances facing our Company. After careful
consideration, the Board determined that having Mr. Noll serve as Chairman is in
the best interest of the Company and its stockholders at this time. Mr. Noll,
who served as the Companys Chairman and Chief Executive Officer
until October 1, 2016, currently continues to serve as our Executive Chairman.
Mr. Nolls knowledge of our Companys operations and strategy provide a valuable
resource to both the Board and Mr. Evans, which has helped facilitate a
smooth
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Corporate Governance at Hanesbrands |
|
transition of the Chief Executive Officer role. Mr. Noll
also has significant knowledge of the people, information and resources
necessary to facilitate effective communication between management and the
Board, which contributes to an efficient and effective
Board. The Board will continue to from time to time evaluate whether separation
of the roles is in the best interest of our Company, based on the direction of
our Company and the constitution of the Board and management team from time to
time.
Mr. Nelson has served as our
Lead Director since 2015. The Lead Director and other independent directors
actively oversee Mr. Evans management of our operations and execution of
strategies set by the Board. They also take an active role in overseeing
Hanesbrands management and key issues related to strategy, risk, integrity,
compensation and governance. For example, only independent directors serve on
the Audit Committee, Compensation Committee and Governance and Nominating
Committee. Non-management and independent directors regularly hold executive
sessions outside the presence of our Chief Executive Officer and other
Hanesbrands employees. Finally, as detailed in the following summary, the Lead
Director has many important duties and responsibilities that enhance the
independent oversight of management.
The Lead Director chairs all
meetings of the non-management and independent directors in executive session
and also has other authority and responsibilities, including:
● |
presiding at all meetings of the Board of
Directors in the absence of, or upon the request of, the Chairman of the
Board; |
● |
advising the Chairman of the Board and/or
the Corporate Secretary regarding the agendas for meetings of the Board of
Directors; |
● |
calling meetings of the non-management
and/or independent directors, with appropriate notice; |
● |
advising the Governance and Nominating
Committee and the Chairman of the Board on the membership of the various
Board committees and the selection of committee chairs; |
● |
advising the Chairman of the Board on the
retention of advisors and consultants who report directly to the Board of
Directors; |
● |
advising the Chairman of the Board and Chief
Executive Officer, as appropriate, on issues discussed at executive
sessions of non-management and/or independent directors; |
● |
with the Chairman of the Compensation
Committee, reviewing with the Chief Executive Officer the non-management
directors annual evaluation of his performance; |
● |
serving as principal liaison between the
non-management and/or independent directors, as a group, and the Chairman
of the Board, as necessary; |
● |
serving as principal liaison between the
Board of Directors and Hanesbrands stockholders, as appropriate, after
consultation with the Chief Executive Officer; and |
● |
selecting an interim lead independent
director to preside over meetings at which he cannot be
present. |
We believe our Boards current
leadership structure is best suited to the needs of the Company at this
time.
Board and Committee
Evaluation Process
The
Board has established a robust self-evaluation process for the Board and its
committees. Our Corporate Governance Guidelines require the Board to annually
evaluate its own performance. In addition, the charters of each of the Audit
Committee, Compensation Committee and Governance and Nominating Committee
requires the committee to conduct an annual performance evaluation. The
Governance and Nominating Committee oversees the annual self-assessment process
on behalf of the Board and the implementation of the annual self-assessments by
the committees.
Each year, all Board members
and all members of the Audit, Compensation and Governance and Nominating
Committees complete a detailed confidential questionnaire. The questionnaire
provides for quantitative ratings in key areas and also seeks comments from the
directors. The Chair of the Governance and Nominating Committee reviews the
responses with the chairs of the Audit and Compensation Committees. The Chair of
the Governance and Nominating Committee also discusses the Board self-evaluation
with the full Board. Matters requiring follow-up are addressed by the Chair of
the Governance and Nominating Committee or the chairs of the Audit or
Compensation Committee, as appropriate.
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|
Corporate Governance at Hanesbrands |
Committees of the
Board of Directors
Our Board of Directors has
three standing committees: the Audit Committee, the Compensation Committee and
the Governance and Nominating Committee. The following is a list of current
committee memberships, which is accompanied by a description of each committee.
The directors who are nominated for election as directors at the Annual Meeting
will, if re-elected, retain the committee memberships described in the following
list immediately following the Annual Meeting, and the chairs of the Audit
Committee and the Governance and Nominating Committee will also remain the same.
Mr. Schindler has reached the mandatory retirement age under our Corporate
Governance Guidelines and will not stand for re-election. Effective immediately
following the Annual Meeting, Ms. Ziegler will become the Chair of the
Compensation Committee.
Committee
Membership |
|
|
|
|
|
Audit Committee |
|
Compensation Committee |
|
Governance
and Nominating Committee |
Bobby J.
Griffin |
|
James C. Johnson |
|
James C. Johnson * |
Jessica T.
Mathews |
|
Ronald L. Nelson |
|
Ronald L. Nelson |
Franck J.
Moison |
|
Andrew J. Schindler * |
|
Andrew J. Schindler |
Robert F. Moran * |
|
Ann E. Ziegler |
|
Ann E. Ziegler |
David V.
Singer |
|
|
|
|
AUDIT COMMITTEE |
|
|
|
|
|
Members: |
Mr. Moran,
Chair Mr. Griffin Ms. Mathews Mr. Moison Mr. Singer |
|
The Audit Committee is
responsible for assisting the Board of Directors in fulfilling its
oversight of:
●the integrity of our financial statements,
financial reporting process and systems of internal accounting and
financial controls;
●our compliance with legal and regulatory
requirements;
●the independent auditors qualifications and
independence; and
●the performance of our internal audit
function and independent auditor.
The Audit Committee is
also responsible for discussing policies with respect to risk assessment
and risk management, including significant financial risk exposures and
the steps our management has taken to monitor, control and report such
exposures. |
|
|
|
|
|
|
Under SEC rules and the Audit
Committees charter, the Audit Committee must prepare a report that is to be
included in our proxy statement relating to the annual meeting of stockholders
or annual report on Form 10-K. This report is provided under Audit Committee
Report on page 27. In addition, the Audit Committee must review and discuss our
annual audited financial statements and quarterly financial statements with
management and the independent auditor and recommend, based on its review, that
the Board of Directors include the annual financial statements in our annual
report on Form 10-K.
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Corporate Governance at Hanesbrands |
|
COMPENSATION COMMITTEE |
|
|
|
|
|
Members: |
Mr. Schindler,
Chair Mr. Johnson Mr. Nelson Ms. Ziegler |
|
The Compensation Committee is responsible for
assisting the Board of Directors in discharging its responsibilities
relating to the compensation of our executive officers and the Chief
Executive Officer performance evaluation process and for preparing a
report on executive compensation that is to be included in our proxy
statement relating to our annual meeting of stockholders. This report is
provided under Compensation Committee Report on page 34.
The Compensation Committee is also responsible
for:
●reviewing and approving the total
compensation philosophy covering our executive officers and other key
executives and periodically reviewing an analysis of the competitiveness
of our total compensation practices in relation to those of our peer
group;
●with respect to our executive officers other
than the Chief Executive Officer, reviewing and approving the base
salaries, salary ranges and the salary increase program pursuant to our
executive salary administration program, the applicable standards of
performance to be used in incentive compensation plans and the grant of
equity incentives;
●recommending changes in non-employee
director compensation to the Board of Directors;
●reviewing proposed stock incentive plans,
other long-term incentive plans, stock purchase plans and other similar
plans, and all proposed changes to such plans;
●reviewing the results of any stockholder
advisory votes regarding our executive compensation and recommending to
the Board how to respond to such votes; and
●recommending to the Board whether to have an
annual, biannual or triennial advisory stockholder vote regarding
executive compensation.
The Chief Executive Officers compensation is
approved by the independent members of the Board of Directors, upon the
Compensation Committees recommendation. |
|
|
|
|
|
|
Compensation Committee
Interlocks and Insider Participation. All members of the Compensation Committee during our 2016 fiscal year
were independent directors, and no member was an employee or former employee of
Hanesbrands. During our 2016 fiscal year, no member of the Compensation
Committee had a relationship that must be described under SEC rules relating to
disclosure of related party transactions and no interlocking relationship
existed between our Board of Directors or Compensation Committee and the board
of directors or compensation committee of any other company.
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|
Corporate Governance at Hanesbrands |
GOVERNANCE AND NOMINATING COMMITTEE |
|
|
|
|
|
Members: |
Mr. Johnson,
Chair Mr. Nelson Mr. Schindler Ms. Ziegler |
|
The Governance and
Nominating Committee is responsible for:
●identifying individuals qualified to serve
on the Board of Directors, consistent with criteria approved by the Board
of Directors;
●recommending that the Board of Directors
select a slate of director nominees for election by our stockholders at
our annual meeting of stockholders, in accordance with our charter and
bylaws and with Maryland law;
●recommending candidates to the Board of
Directors to fill vacancies on the Board or on any committee of the Board
in accordance with our charter and bylaws and with Maryland
law;
●evaluating and recommending to the Board of
Directors a set of corporate governance policies and guidelines to be
applicable to the Company;
●re-evaluating periodically such policies and
guidelines for the purpose of suggesting amendments to them as
appropriate; and
●overseeing annual Board and committee
self-evaluations in accordance with NYSE listing
standards. |
|
|
|
|
|
|
Director
Compensation
Annual
Compensation
We compensated
each non-employee director for service on our Board of Directors during 2016 as
follows:
● |
an annual cash retainer of $95,000, paid in
quarterly installments; |
● |
an additional annual cash retainer of $20,000
for the chair of the Audit Committee (Mr. Moran), $20,000 for the chair of
the Compensation Committee (Mr. Schindler) and $20,000 for the chair of
the Governance and Nominating Committee (Mr. Johnson); |
● |
an additional annual cash retainer of $5,000
for each member of the Audit Committee other than the chair (Mr. Griffin,
Ms. Mathews, Mr. Moison and Mr. Singer); |
● |
an additional annual cash retainer of $25,000
for the Lead Director (Mr. Nelson); |
● |
an annual grant of restricted stock units with
a grant date fair value of approximately $130,000 that vest on the
one-year anniversary of the grant date and are payable upon vesting in
shares of Hanesbrands common stock; and |
● |
reimbursement of customary expenses for
attending Board, committee and stockholder meetings. |
Directors who are also our
employees (Mr. Noll and Mr. Evans) receive no additional compensation for
serving as a director.
In December 2016, after
reviewing information about the compensation paid to non-employee directors at
our peer group companies (our peer group companies are discussed in How the
Compensation Committee uses Peer Groups on 36), the Compensation Committee
determined not to recommend any changes to our non-employee director
compensation for 2017. The annual grant of restricted stock units for 2017 was
made on December 13, 2016 and is reflected in the non-employee directors
compensation for 2016.
When recommending Mr. Nolls
compensation for service as Executive Chairman during 2017, the Compensation
Committee considered the compensation paid to executive chairman at other
similarly situated companies, as well as Mr. Nolls strong leadership and
accomplishments. Based on those factors, the Compensation Committee recommended,
and the Board approved, a base salary of $1,200,000 and an annual grant of
restricted stock units with a grant date fair value of approximately $2,500,000
that vest 33%, 33% and 34% on the first anniversary, second anniversary and
third anniversary, respectively, of the date of grant and are payable upon
vesting in shares of Hanesbrands common stock. Because Mr. Noll served as Chief
Executive Officer until September 30, 2016, he is one of our named executive
officers for 2016 and his 2016 compensation is reported in the Summary
Compensation Table on page 47.
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Corporate Governance at Hanesbrands |
|
The following table summarizes
the compensation paid to our non-employee directors during the fiscal year ended
December 31, 2016.
Director Compensation 2016
Name |
|
Fees
Earned or Paid in Cash ($) (1) |
|
Stock Awards ($) (2) (3)
(4) |
|
All
Other Compensation ($) |
|
Total ($) |
Ronald L.
Nelson |
|
$ 120,000 |
|
$ 129,996 |
|
|
|
$ 249,996 |
James C.
Johnson |
|
115,000 |
|
129,996 |
|
|
|
244,996 |
Robert F.
Moran |
|
115,000 |
|
129,996 |
|
|
|
244,996 |
Andrew J.
Schindler |
|
115,000 |
|
129,996 |
|
|
|
244,996 |
Bobby J. Griffin |
|
100,000 |
|
129,996 |
|
|
|
229,996 |
Jessica T.
Mathews |
|
100,000 |
|
129,996 |
|
|
|
229,996 |
Franck J.
Moison |
|
100,000 |
|
129,996 |
|
|
|
229,996 |
David V.
Singer |
|
100,000 |
|
129,996 |
|
|
|
229,996 |
Ann E.
Ziegler |
|
95,000 |
|
129,996 |
|
|
|
224,996 |
(1) |
|
Amounts
shown include deferrals to the Hanesbrands Inc. Non-Employee Director
Deferred Compensation Plan, or the Director Deferred Compensation
Plan. |
(2) |
|
The dollar
values shown reflect the aggregate grant date fair value of awards during
2016, computed in accordance with Topic 718 of the FASB Accounting
Standards Codification. The assumptions we used in valuing these awards
are described in Note 6, Stock-Based Compensation, to our consolidated
financial statements included in our annual report on Form 10-K for the
fiscal year ended December 31, 2016. |
(3) |
|
Amounts
shown represent the grant date fair value of the annual grant of
restricted stock units which was made on December 13, 2016 to each
non-employee director serving on that date in consideration of his or her
service on the Board of Directors in 2017. Equity awards are approved as a
dollar amount, which on the grant date is converted into a specific whole
number of restricted stock units. These restricted stock units vest on the
one-year anniversary of the grant date and are payable immediately upon
vesting in shares of our common stock on a one-for-one basis. The number
of restricted stock units held by each then-current non-employee director
as of December 31, 2016 was 5,652. |
(4) |
|
As of
December 31, 2016, Ms. Ziegler held stock options to purchase 22,572
shares of common stock. No other non-employee director holds stock
options. |
Director Deferred Compensation
Plan
Under the Hanesbrands Inc. Non-Employee Director Deferred Compensation
Plan (the Director Deferred Compensation Plan), a nonqualified, unfunded
deferred compensation plan, our non-employee directors may defer receipt of all
(but not less than all) of their cash retainers and/or awards of restricted
stock units. None of the investment options available in the Director Deferred
Compensation Plan provide for above-market or preferential earnings as defined
in applicable SEC rules. The amount payable to a participant will be payable
either on the distribution date elected by the participant or upon the
occurrence of certain events as provided under the Director Deferred
Compensation Plan.
Director Stock Ownership and Retention
Guidelines
We believe that all of our directors should have a significant ownership
position in Hanesbrands. To this end, our non-employee directors receive a
substantial portion of their compensation in the form of restricted stock units.
In addition, to promote equity ownership and further align the interests of
these directors with our stockholders, we have adopted stock ownership and
retention guidelines for our non-employee directors. A non-employee director may
not dispose of any shares of our common stock until such director holds shares
of common stock with a value equal to at least five times the current annual
equity retainer, and may then only dispose of shares in excess of those with
that value. In addition to vested shares directly held by a non-employee
director, shares held for such director in the Director Deferred Compensation
Plan (including hypothetical share equivalents held in that plan) will be
counted for purposes of determining whether the ownership requirements are met.
All of our directors are in compliance with these stock ownership and retention
guidelines.
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|
Corporate Governance at
Hanesbrands |
Other Governance
Information
Related
Person Transactions
Our
Board of Directors has adopted a written policy setting forth procedures to be
followed in connection with the review, approval or ratification of related
person transactions. For purposes of this policy, the phrase related person
transaction refers to any financial transaction, arrangement or relationship in
which Hanesbrands or any of its subsidiaries is a participant and in which any
director, nominee for director or executive officer, or any of their immediate
family members, has a direct or indirect material interest.
Each director, director
nominee and executive officer must promptly notify our Chief Executive Officer
and our Corporate Secretary in writing of any material interest that such person
or an immediate family member of such person had, has or will have in a related
person transaction. The Governance and Nominating Committee is responsible for
the review and approval or ratification of all related person transactions
involving a director, director nominee or executive officer. At the discretion
of the Governance and Nominating Committee, the consideration of a related
person transaction may be delegated to the full Board of Directors, another
standing committee or to an ad hoc committee of the Board of Directors comprised
of at least three members, none of whom has an interest in the
transaction.
The Governance and Nominating
Committee, or other governing body to which approval or ratification is
delegated, may approve or ratify a transaction if it determines, in its business
judgment, based on its review of the available information, that the transaction
is fair and reasonable to us and consistent with our best interests. Factors to
be taken into account in making a determination of fairness and reasonableness
may include:
● |
the business purpose of
the transaction; |
● |
whether the transaction
is entered into on an arms-length basis on terms fair to us; and
|
● |
whether such a
transaction would violate any provisions of our Global Code of
Conduct. |
If the Governance and
Nominating Committee decides not to approve or ratify a transaction, the
transaction may be referred to legal counsel for review and consultation
regarding possible further action, including, but not limited to, termination of
the transaction on a prospective basis, rescission of such transaction or
modification of the transaction in a manner that would permit it to be ratified
and approved by the Governance and Nominating Committee.
During 2016, there were no
related person transactions requiring reporting under SEC rules.
Code of Ethics
Our Global Code of Conduct, which serves as our
code of ethics, applies to all directors and officers and other employees of the
Company and its subsidiaries. Any waiver of applicable requirements in the
Global Code of Conduct that is granted to any of our directors, to our principal
executive officer, to any of our senior financial officers (including our
principal financial officer, principal accounting officer or controller) or to
any other person who is an executive officer of Hanesbrands requires the
approval of the Audit Committee. Any such waiver of or amendment to the Global
Code of Conduct will be disclosed on our corporate website, www.Hanes.com/investors (in the Investors section) or in a current
report on Form 8-K.
Corporate Governance
Documents
Copies of the written charters for the Audit Committee, Compensation
Committee and Governance and Nominating Committee, as well as our Corporate
Governance Guidelines, Global Code of Conduct and other corporate governance
information are available on our corporate website, www.Hanes.com/investors (in the Investors section).
Table of
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|
|
Proposal 2
|
Ratification of
Appointment of Independent Registered Public Accounting
Firm |
|
|
|
|
The Audit Committee is
directly responsible for the appointment (subject to ratification by the
Companys stockholders), retention, compensation, evaluation, oversight and
termination the Companys independent auditor. The Audit Committee has appointed
PricewaterhouseCoopers LLP (PricewaterhouseCoopers) as our independent
registered public accounting firm for our 2017 fiscal year. While not required
by law, the Board of Directors is asking our stockholders to ratify the
selection of PricewaterhouseCoopers as a matter of good corporate
practice.
If the appointment of
PricewaterhouseCoopers as our independent registered public accounting firm for
our 2017 fiscal year is not ratified by our stockholders, the adverse vote will
be considered a direction to the Audit Committee to consider another independent
registered public accounting firm for next year. However, because of the
difficulty in making any substitution of our independent registered public
accounting firm so long after the beginning of the current year, the appointment
for our 2017 fiscal year will stand, unless the Audit Committee finds other good
reason for making a change.
PricewaterhouseCoopers has
served as the Companys independent registered public accounting firm since July
1, 2006. In order to assure continuing auditor independence, the Audit Committee
periodically considers whether there should be a regular rotation of our
independent registered public accounting firm. In addition, in conjunction with
the mandated rotation of PricewaterhouseCoopers lead engagement partner, the
Audit Committee oversees and confirms the selection of PricewaterhouseCoopers
new lead engagement partner. The members of the Audit Committee and the Board
believe that the continued retention of PricewaterhouseCoopers as the Companys
independent registered public accounting firm is in the best interests of the
Company and its stockholders.
Representatives of
PricewaterhouseCoopers are expected to be present at the Annual Meeting, will
have an opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions. For additional information
regarding our relationship with PricewaterhouseCoopers, please refer to
Relationship with Independent Registered Public Accounting Firm on
page 28.
|
Our
Board of Directors unanimously recommends a vote FOR ratification of the
appointment of PricewaterhouseCoopers as our independent registered public
accounting firm for our 2017 fiscal year. |
Table of
Contents
Audit Committee
Report
Hanesbrands Audit Committee is composed solely of independent directors
meeting the requirements of applicable SEC and NYSE rules. Each of the members
of the Audit Committee is independent and financially literate as required under
applicable SEC rules and NYSE listing standards. In addition, the Board of
Directors has determined that Mr. Moran and Mr. Singer possess the experience
and qualifications required of an audit committee financial expert as defined
by the rules of the SEC. No member of the Audit Committee serves on the audit
committees of more than three public companies.
The key responsibilities of
the Audit Committee are set forth in its charter, a copy of which is available
on our corporate website, www.Hanes.com/investors (in the Investors section). The purpose of the Audit Committee is to
assist the Board of Directors in fulfilling its oversight of:
● |
the integrity of the
Companys financial statements, financial reporting process and systems of
internal accounting and financial controls; |
● |
the Companys compliance
with legal and regulatory requirements; |
● |
the independent
auditors qualifications and independence; and |
● |
the performance of the
Companys internal audit function and independent
auditor. |
Management is primarily
responsible for establishing and maintaining adequate internal financial
controls, for preparing the financial statements and for the public reporting
process. PricewaterhouseCoopers, the Audit Committee-appointed independent
registered public accounting firm for the fiscal year ended December 31, 2016,
is responsible for expressing an opinion on the conformity of Hanesbrands
audited financial statements with accounting principles generally accepted in
the United States of America. In addition, PricewaterhouseCoopers expresses its
opinion on the effectiveness of Hanesbrands internal control over financial
reporting.
In this context, the Audit
Committee:
● |
Reviewed and discussed
with management and PricewaterhouseCoopers the audited financial
statements for the fiscal year ended December 31, 2016 (the 2016
Financial Statements) and audit of internal control over financial
reporting; |
● |
Discussed with
PricewaterhouseCoopers the matters required to be discussed by the
Statement of Auditing Standards No. 61 (Communication with Audit
Committees), as amended by the AICPA professional standards, vol. 1 AU
section 380, as adopted by the Public Company Oversight Board in Rule
3200T, which include, among other items, matters related to the conduct of
the audit of the 2016 Financial Statements; and |
● |
Received the written
disclosures and the letter from PricewaterhouseCoopers required by
applicable requirements of the Public Company Accounting Oversight Board
regarding their communications with the Audit Committee concerning
independence and discussed with PricewaterhouseCoopers their independence
from Hanesbrands. |
Based on the foregoing review
and discussions, the Audit Committee recommended to the Board of Directors that
the 2016 Financial Statements as audited by PricewaterhouseCoopers be included
in Hanesbrands Annual Report on Form 10-K for the fiscal year ended December
31, 2016.
By the members of
the
Audit Committee,
consisting of:
Robert F. Moran, Chair |
Bobby J. Griffin |
Jessica T. Mathews |
Franck J. Moison |
David V. Singer |
Table of
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Relationship with
Independent Registered Public Accounting
Firm
The following table sets forth the fees billed to us by
PricewaterhouseCoopers for services in the fiscal years ended December 31, 2016
and January 2, 2016:
|
|
Fiscal Year Ended December 31,
2016 |
|
|
Fiscal Year Ended January 2,
2016 |
Audit fees |
|
$5,929,140 |
|
|
$4,709,940 |
Audit-related fees |
|
91,800 |
|
|
93,900 |
Tax fees |
|
704,095 |
|
|
447,555 |
All other fees |
|
|
|
|
10,780 |
Total fees |
|
$6,725,035 |
|
|
$5,262,175 |
In the above table, in
accordance with applicable SEC rules, Audit fees include fees billed for
professional services for the audit of our consolidated financial statements
included in our annual report on Form 10-K and review of our financial
statements included in our quarterly reports on Form 10-Q, fees billed for
services that are normally provided by the principal accountant in connection
with statutory and regulatory filings or engagements, fees related to services
rendered in connection with securities offerings and fees for the audit of our
internal control over financial reporting and consultations concerning financial
accounting and reporting standards.
Audit-related fees are fees
billed for assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported under the caption Audit fees. For the fiscal years ended December 31,
2016 and January 2, 2016, these fees primarily relate to attestation services
rendered in connection with regulatory filings in certain foreign jurisdictions
and various other services.
Tax fees for the fiscal
years ended December 31, 2016 and January 2, 2016 include consultation,
preparation and compliance services for domestic and certain foreign
jurisdictions and consulting related to research and development
credits.
All other fees for the
fiscal year ended January 2, 2016 include fees for a consulting project related
to our environmental sustainability program.
Our Audit Committee
pre-approves all services, including both audit and non-audit services, provided
by our independent registered public accounting firm. For audit services
(including statutory audit engagements as required under local country laws),
the independent registered public accounting firm provides the Audit Committee
with an engagement letter outlining the scope of the audit services proposed to
be performed during the year. The independent registered public accounting firm
also submits an audit services fee proposal, which is approved by the Audit
Committee before the audit commences. The Audit Committee may delegate the
authority to pre-approve audit and non-audit engagements and the related fees
and terms with the independent auditors to one or more designated members of the
Audit Committee, as long as any decision made pursuant to such delegation is
presented to the Audit Committee at its next regularly scheduled meeting. All
audit and permissible non-audit services provided by PricewaterhouseCoopers to
us during the fiscal years ended December 31, 2016 and January 2, 2016 were
pre-approved by the Audit Committee.
Table of
Contents
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Proposal 3
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Advisory Vote to
Approve Executive Compensation |
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Hanesbrands stockholders have
the opportunity to cast a non-binding, advisory say on pay vote on our named
executive officer compensation, as disclosed in this proxy statement.
At our 2016 Annual Meeting of
Stockholders, our stockholders overwhelmingly approved the compensation of
Hanesbrands named executive officers. Our Board of Directors, and the
Compensation Committee in particular, considered several factors in determining
that the fundamental characteristics of Hanesbrands executive compensation
program should continue this year, including the overwhelming support of our
stockholders, the executive compensation programs of our peer group companies,
our past operating performance and planned strategic initiatives.
We believe that our
executive compensation philosophy, practices and policies have three
essential characteristics. They are: |
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● |
focused on aligning senior management and
stockholder interests in a simple, quantifiable and unifying
manner; |
● |
necessary to attract, retain and motivate the
executive team to support the attainment of our business strategy and
operating imperatives; and |
● |
reasonable in comparison to our peer group
companies. |
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Stockholders are encouraged to review the Compensation Discussion
and Analysis section beginning on page 31 for more information on our
executive compensation program. |
This advisory vote is not
intended to address any specific element of compensation; rather, it relates to
the overall compensation of our named executive officers, as well as the
compensation philosophy, practices and policies described in this proxy
statement. We are asking stockholders to approve the following advisory
resolution:
RESOLVED, that the
stockholders approve the compensation of Hanesbrands named executive officers
as disclosed in the proxy statement for Hanesbrands 2017 Annual Meeting of
Stockholders, including the Compensation Discussion and Analysis and the
executive compensation tables and related footnotes and
narrative.
Because this vote is advisory,
it will not be binding on us or our Board of Directors, overrule any decision
made by the Board of Directors or create or imply any additional duty for the
Board. We recognize, nonetheless, that our stockholders have a fundamental
interest in Hanesbrands executive compensation practices. Thus, the
Compensation Committee may take into account the outcome of the vote when
considering future executive compensation
arrangements.
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Our Board of Directors
unanimously recommends a vote FOR
approval, on an advisory basis, of the compensation of Hanesbrands named
executive officers. |
Table of Contents
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Proposal 4
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Advisory Vote to
Recommend Frequency of Future Advisory Votes on Executive
Compensation |
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As discussed in Proposal 3 Advisory
Vote to Approve Executive Compensation, Hanesbrands stockholders have the
opportunity to cast a non-binding, advisory say on pay vote on our named
executive officer compensation, as disclosed in this annual proxy statement.
This year, we are also providing our stockholders with the opportunity to cast a
non-binding, advisory vote on the frequency of future say on pay
votes.
Based on the results of the prior
stockholder advisory vote on the frequency of say on pay votes, which was held
at the 2011 Annual Meeting of Stockholders, and based on the Board of Directors
recommendation, Hanesbrands has historically held such votes on an annual basis.
After careful consideration, our Board of
Directors has determined that an advisory vote on executive compensation that
occurs every year continues to be the most appropriate alternative for our
company at this time, and therefore our Board of Directors recommends that you
vote for an annual advisory vote on executive compensation. In formulating its
recommendation, our Board of Directors considered that an annual advisory vote
on executive compensation will provide the most clarity regarding the nature of
any concerns that our stockholders may have.
While the Board of Directors is in favor
of an annual stockholder advisory vote on executive compensation, you may choose
to vote in favor of any of three alternatives, i.e., every year, every two years, or
every three years (or you may abstain from voting on this matter). You are not
being asked to vote for or against the Boards recommendation of having an
annual stockholder advisory vote.
Because this vote is advisory, it will not
be binding on us or our Board of Directors, overrule any decision made by the
Board of Directors or create or imply any additional duty for the Board. We
recognize, nonetheless, that our stockholders have a fundamental interest in
Hanesbrands executive compensation practices. Thus, the Compensation Committee
may take into account the outcome of the vote when considering future
non-binding stockholder advisory votes regarding Hanesbrands executive
compensation.
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Our
Board of Directors unanimously recommends a vote for holding future
stockholder advisory votes on executive compensation EVERY
YEAR. |
Table of Contents
Compensation Discussion and
Analysis
Compensation Highlights
Pay for Performance
At Hanesbrands, we emphasize a pay-for-performance culture,
linking a substantial percentage of an executives compensation to our
performance and stockholders value growth. Specifically:
● |
To motivate our executive officers
and align their interests with those of our stockholders, we provide
annual incentives designed to reward our executive officers for the
attainment of short-term goals and long-term incentives designed to reward
them for increasing stockholder value over time. |
● |
Performance-based and at-risk
compensation represents over 75% of our named executive officers total
target direct compensation. |
● |
In keeping with our pay for
performance philosophy, our executive officers must deliver results that
exceed the target level of performance in order to receive above median
market compensation. Performance below the target level of performance
will result in below median market compensation. |
● |
Our compensation program is designed
to reward exceptional and sustained performance. By combining a three-year
vesting period for equity awards with a mandatory one-year holding period
following vesting (and policies prohibiting hedging or pledging of such
shares), a substantial portion of the value of our executives
compensation package is tied to changes in our stock price, and therefore
at-risk, for a significant period of time. The Compensation Committee
believes this design provides an effective way to link executive
compensation to long-term stockholder
returns. |
Elements of 2016
Compensation
Our named executive officers
compensation for 2016 consisted principally of the following
elements:
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Base Salary |
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●Fixed
compensation component
●Reflects
the individual responsibilities, performance and experience of each named
executive officer |
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●Provides a
fixed base of cash compensation for fulfillment of fundamental job
responsibilities |
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Annual Incentive Plan
(AIP) Awards |
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●Performance-based cash compensation
●Payout
determined based on Company performance against pre-established
metrics |
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●Motivates
performance by linking compensation to the achievement of key objectives
that contribute to accomplishing consistent and strategic annual
results |
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Long-Term Incentive Program (LTIP)
Awards |
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●Performance-based and at-risk, time-vested
compensation
●Performance Share Awards (PSAs) (50% of LTIP
opportunity)
●Shares eligible for vesting three years after grant date based on
2016 Company performance against pre-established
metrics
●Restricted Stock Unit Awards (RSUs) (50% of LTIP
opportunity)
●Ratable vesting over a three-year service
period
●Mandatory one-year holding period following vesting for all LTIP
awards |
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●Encourages
behavior that enhances the long-term growth, profitability and financial
success of the Company, aligns executives interests with our stockholders
and supports retention objectives |
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In addition, we provide health, welfare
and retirement plans that promote employee health and support employees in
attaining financial security. We also provide severance benefits under limited
circumstances. These severance benefits, which provide our named executive
officers with income protection in the event employment is terminated without
cause or following a change in control, support our executive retention goals
and encourage our named executive officers independence and objectivity in
considering potential change in control transactions. See Post-Employment
Compensation on page 42 for additional details.
Table of Contents
Compensation Discussion and Analysis |
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2016 Compensation Mix
The mix of compensation elements that we offer is intended to
further our goals of:
● |
achieving consistent and strategic
annual results and long-term business objectives; |
● |
using an appropriate mix of cash and
equity; |
● |
emphasizing a pay-for-performance
culture; |
● |
effectively managing the cost of
programs; and |
● |
providing a balanced total
compensation program to ensure senior management is not encouraged to take
unnecessary and excessive risks that may harm the
Company. |
Our emphasis on performance-based and
at-risk pay is reflected in the following chart, which illustrates the average
2016 total target direct compensation mix for our former Chief Executive Officer
and our other named executive officers (NEOs).
2016 Total Target
Direct Compensation |
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Performance-Based and
At-Risk Compensation: 89.3%
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Performance-Based and
At-Risk Compensation: 76.0%
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The percentage of our Chief Executive
Officers performance-based and at-risk compensation is the highest of our named
executive officers, reflecting the positions highest level of responsibility
and accountability for results. Performance-based and at-risk compensation
comprises over 75% of all of our named executive officers total target direct
compensation. Because the value of such compensation depends on Hanesbrands
achievement of key annual results and strategic long-term business objectives
and/or is tied to changes in our stock price, our named executive officers
actual compensation could be significantly lessor morethan the targeted
levels.
CEO
Potential Compensation Scenarios (Percentage of Total
Compensation) |
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Table of Contents
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Compensation Discussion and Analysis |
2016 Performance Criteria
The Compensation Committee chose to use sales growth, diluted
earnings per share from continuing operations, excluding actions (EPS-XA)
growth, and cash flow from operations as performance criteria for our named
executive officers 2016 performance-based pay opportunities, as
follows:
2016 Performance
Highlights
(Dollars in Thousands, except
EPS-XA)
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Fiscal Year Ended |
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December 31, 2016 |
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January 2, 2016 |
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% Change |
Sales |
$ 6,028,199 |
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$ 5,731,549 |
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5.2% |
EPS-XA * |
$ 1.85 |
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$ 1.66 |
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11.4% |
Cash flow from Operations |
$ 605,607 |
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$ 227,007 |
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167% |
* |
As in prior years and consistent with the
terms of our Omnibus Incentive Plan, in measuring the attainment of EPS-XA
growth for 2016, the Compensation Committee excluded the impact of charges for
acquisition, integration and other actions, and the cumulative effects of tax or
accounting charges, each as identified in our financial statements or other SEC
filings. EPS-XA is a non-GAAP financial measure which is used as a performance
measure in our executive compensation programs. EPS-XA is defined as diluted
earnings per share from continuing operations (EPS), excluding actions and the
tax effect on actions. On a GAAP basis, EPS was $1.40 in 2016 and $1.06 in 2015.
We have chosen to provide this non-GAAP financial measure to investors to enable
additional analyses of past, present and future performance and as a
supplemental means of evaluating company operations absent the effect of
acquisition-related expenses and other actions. For a reconciliation to GAAP
EPS, see Appendix A. |
We achieved the following financial and
strategic results in 2016:
● |
Net sales in 2016 were $6.0 billion,
compared with $5.7 billion in 2015, representing a 5.2%
increase. |
● |
On a GAAP basis, 2016 EPS of $1.40
increased 32% over 2015 EPS of $1.06. When excluding pre-tax charges
related to acquisition, integration and other actions, 2016 EPS-XA of $1.85
increased 11.4% over 2015 EPS-XA of $1.66. |
● |
We generated $606 million in cash
flow from operations, representing a 167% increase from
2015. |
● |
We acquired Champion Europe S.p.A.
(Champion Europe), which combined with Champion brand rights previously
owned, unites the Champion brand globally and will
give us a powerful platform for growth on every continent.
|
● |
We also acquired Pacific Brands
Limited (Hanes Australasia), a leading underwear and intimate apparel
company in Australia with a portfolio of strong brands including
Bonds, Australias top brand of underwear, babywear and socks, and
Berlei, the countrys No. 1 sports bra brand and leading seller of
premium bras in department stores. We believe this acquisition will create
growth opportunities by adding to our portfolio of leading innerwear
brands supported by our global low-cost supply chain and manufacturing
network. |
● |
As part of our cash deployment
strategy, we paid four quarterly dividends of $0.11 per share and also
repurchased approximately 14.2 million shares of our
stock. |
As a result of our 2016 performance, each
of our named executive officers earned, in the aggregate, 132.78% of the target
amounts for their performance-based pay opportunities.
Table of Contents
Compensation Discussion and Analysis |
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Best Practices in Executive
Compensation
Hanesbrands executive
compensation practices include a number of features we believe reflect
responsible compensation and governance practices and promote the interests of
stockholders.
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Our practices
include:
●Performance-based pay - Approximately half of our named
executive officers total target direct compensation is performance-based
and must be earned every year based on objective, challenging performance
criteria and metrics.
●Challenging performance metrics - The Compensation
Committee sets growth performance metrics that require consistent year
over year improvement in performance rather than performance based on
negotiated targets relative to the Companys annual operating plan or
public guidance.
●Significant vesting periods - Equity awards made to our
executive officers fully vest over a period of not less than three
years.
●Holding requirement - We require all Hanesbrands senior
executives, including our named executive officers, to retain 100% of the
net after-tax shares of Hanesbrands stock received through the exercise of
options or the vesting of restricted stock units or other equity awards
granted after December 1, 2010 for at least one year from the date of
exercise or vesting.
●Robust stock ownership guidelines - Our Chief Executive
Officers stock ownership guideline is six times his base salary, and the
ownership guideline for our other named executive officers is three times
his or her base salary. Until the guideline is met, an executive is
required to retain 50% of any shares received (on a net after-tax basis)
under our stock-based compensation plans.
●Clawback policy - We have adopted a clawback policy that
allows us to recover cash and equity-based incentive compensation in the
event we are required to prepare an accounting restatement due to material
noncompliance with any financial requirement under the securities
laws.
●Prohibition on hedging and pledging - Our insider
trading policy prohibits all of our directors, officers and employees from
pledging our securities or engaging in short sales or sales against the
box or trading in puts, calls, warrants or other derivative instruments
on our securities.
●Engagement of an independent compensation consultant -
Our Compensation Committee engages an independent compensation consultant,
who provides no other services to us, to advise on executive and
non-employee director compensation matters. The independent compensation
consultant reports to the Compensation Committee, who has the exclusive
authority to retain or terminate the consultant. |
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Our practices
exclude:
●Repricing or replacing of underwater stock options or
stock appreciation rights without stockholder approval
●Providing excessive perquisites to executives
●Employment agreements for our named executive officers
●Single trigger change in control severance payments
●Gross up payments to cover personal income taxes (other
than due on relocation reimbursements as provided under a broad-based
program) or excise taxes that pertain to executive or severance benefits
(other than pursuant to change in control agreements entered into prior to
December 1, 2010) |
Compensation Committee Report
The Compensation Committee reviews and
approves Company compensation programs on behalf of the Board. In fulfilling its
oversight responsibilities, the committee reviewed and discussed with management
the Compensation Discussion and Analysis included in this proxy statement. Based
on that review and discussion, the Compensation Committee recommended to the
Board that the Compensation Discussion and Analysis be included in this proxy
statement and Hanesbrands Annual Report on Form 10-K.
By the members of
the
Compensation Committee, consisting
of:
Andrew J. Schindler, Chair |
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James C.
Johnson |
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Ronald L.
Nelson |
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Ann E.
Ziegler |
Table of Contents
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Compensation Discussion and Analysis |
Overview
This compensation discussion and analysis
provides information about our compensation objectives and principles for our
named executive officers, who for our 2016 fiscal year were:
Richard A. Noll |
Executive Chairman and Chief Executive Officer prior to
October 1, 2016 |
Gerald W. Evans,
Jr. |
Chief Executive Officer
effective October 1, 2016 |
Richard D. Moss |
Chief Financial
Officer |
Joia M. Johnson |
Chief Administrative
Officer, General Counsel and Corporate Secretary |
W. Howard
Upchurch |
Group President, Innerwear
Americas |
Michael E.
Faircloth |
President, Chief Global
Supply Chain and Information Technology
Officer |
Our compensation discussion and analysis
also contains details about how and why significant compensation decisions were
made and places in context the information contained in the tables that follow
this discussion.
Listed below are several terms that we
frequently use in discussing our executive compensation program:
Frequently Used Terms |
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AIP |
Annual Incentive
Plan |
EPS-XA |
Diluted earnings per share
from continuing operations, excluding actions |
LTIP |
Long-Term Incentive
Program |
PSA |
Performance Share
Award |
RSU |
Restricted Stock
Unit |
SERP |
Supplemental Employee
Retirement Plan |
How We Make Executive Compensation
Decisions
The Compensation Committee, advised
by its independent compensation consultant, is responsible for overseeing and
approving the executive compensation program for the Companys executive
officers, including our named executive officers.
Frederic W. Cook & Co., or FW Cook,
serves as the Compensation Committees executive compensation consultant. FW
Cook reports directly to the Compensation Committee, and the committee has the
sole authority to terminate or replace FW Cook at any time. FW Cook assists in
the development of compensation programs for our executive officers and our
non-employee directors by providing information about compensation by our peer
group companies (which are described in How the Compensation Committee uses
Peer Groups on page 36), relevant market trend data, information on current issues
in the regulatory environment, recommendations for program design and best
practices and corporate governance guidance.
The Compensation Committee realizes that
it is essential to receive objective advice from its compensation advisors.
Prior to the retention of a compensation consultant or any other external
advisor, and from time to time as the Committee deems appropriate, the
Compensation Committee assesses the independence of the advisor from management,
taking into consideration all factors relevant to the advisors independence,
including the factors specified in NYSE listing standards. The Compensation
Committee has assessed the independence of FW Cook based on these criteria and
concluded that FW Cooks work for the committee does not raise any conflict of
interest.
At the direction of the Compensation
Committee, our management has worked with FW Cook to prepare information about
the compensation competitiveness of our executive officers. Our Chief Executive
Officer uses this information to make recommendations to the Compensation
Committee regarding compensation of these officers, other than himself, and FW
Cook provides guidance to the Compensation Committee about those
recommendations. FW Cook also makes independent recommendations to the
Compensation Committee regarding the compensation of our Chief Executive Officer
without the foreknowledge of management. The Compensation Committee uses this
information and considers these recommendations in making decisions about
executive compensation for all of our executive officers. All decisions
regarding compensation of executive officers (other than our Chief Executive
Officer) are made solely by the Compensation Committee. The Chief Executive
Officers compensation is approved by the independent members of the Board of
Directors, after reviewing the Compensation Committees
recommendation.
Table of Contents
Compensation Discussion and Analysis |
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The Compensation
Committee does not make regular annual adjustments in pay. Instead, the
Compensation Committee uses judgment when making compensation decisions
and reviews executive pay from a holistic perspective, including reference
to compensation peer group pay practices and norms, general industry pay
levels as gathered from publicly-available survey sources, individual
performance, experience, strategic importance of the position to
Hanesbrands and internal equity
considerations. |
In making compensation
decisions, the Compensation Committee:
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Determines the competitive market
for total target direct compensation for each named executive
officer |
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Evaluates the allocation among the
various elements of compensation, including base salary, AIP and LTIP
compensation |
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Determines the appropriate balance
of at-risk, time-based and performance-based equity compensation within
each named executive officers LTIP
opportunity |
How the Compensation
Committee uses Peer Groups
To
determine what constitutes a competitive compensation package, the
Compensation Committee generally considers total target direct compensation, as
well as the allocation among those elements of compensation, at our peer group
companies. Because of significant differences in the pay practices of our peer
group companies, the Compensation Committee does not view this market data as a
prescriptive determinant of individual compensation. Rather, it is used by the
Compensation Committee as a general guide in its decisions on the amount and mix
of total target direct compensation. Ultimately, named executive officer
compensation is based on the Compensation Committees judgment, taking into
account factors further described in this Compensation Discussion and Analysis
that are particular to Hanesbrands and our named executive officers, including,
most importantly, actual performance.
The Compensation Committee,
with assistance from FW Cook, establishes the Companys peer group that is used
for market comparison purposes.
We seek to identify peer group
companies:
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that have
comparable business models and strategy; |
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with whom we
compete for talent, capital and customers; and |
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that are of a
similar size and complexity. |
In selecting new peer companies and
evaluating the continued inclusion of current peers, the Compensation Committee
also considers companies:
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In apparel and/or other general
consumer product (non-durable goods) industries |
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With multiple distribution channels,
such as wholesale, retail and e-commerce |
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Of a similar revenue size, market
capitalization and margins |
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That consider us to be a peer for
compensation purposes plus the peer companies identified by our apparel
peer companies |
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Used by us for financial comparison
purposes |
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Used in the most recent
Institutional Shareholder Services (ISS) peer group for purposes of the
chief executive officer pay-for-performance
test |
Table of Contents
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Compensation Discussion and Analysis |
In light of these parameters,
the Compensation Committee determined to modify the peer group used for purposes
of determining 2015 compensation by replacing Quiksilver, Inc. with Coach Inc.
The Committee felt that Quicksilvers relatively small size in terms of revenue
and market capitalization no longer made it an appropriate peer and believed
that Coach provided better overall alignment with the Companys selection
criteria. The peer group used by the Compensation Committee for purposes of
determining 2016 compensation consisted of the following 17
companies:
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2016 Peer
Group |
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Apparel Companies |
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Consumer Products Companies |
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American Eagle Outfitters, Inc. |
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The Clorox
Company |
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Carters Inc. |
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Energizer Holdings,
Inc. |
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Coach Inc. |
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Fortune Brands Home
& Security, Inc. |
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Gildan Activewear, Inc. |
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Hasbro,
Inc. |
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Kate Spade & Co. |
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The Hershey
Company |
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L Brands, Inc. |
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Jarden
Corporation |
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PVH Corp. |
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Mattel,
Inc. |
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V.F. Corporation |
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Newell Rubbermaid
Inc. |
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Stanley Black &
Decker, Inc. |
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Elements of
2016 Executive Compensation
Total Target
Direct Compensation
The following
table shows base salary, AIP and LTIP compensation at the target level for each
of our named executive officers for 2017, 2016 and 2015 as approved by our
Compensation Committee. This table presents information that is supplemental to,
and should not be considered a substitute for, the information contained in the
Summary Compensation Table that appears under Summary Compensation Table on
page 47. This table is not required by SEC rules. However, we have chosen to
include it to help investors better understand the total target direct
compensation levels of our named executive officers for the two most recent
years reflected in our Summary Compensation Table and for the current year. No
information is provided for Mr. Faircloth for 2015 because he first became a
named executive officer in 2016.
In December 2015, using the
methodology discussed under How We Make Executive Compensation Decisions on
page 35, the Compensation Committee determined the total target direct compensation
levels of our named executive officers for 2016, as well as the relative mix of
base salary, AIP opportunity and LTIP opportunity for those executives.
When setting Mr. Nolls total
target direct compensation level for 2016, the Compensation Committee considered
the total compensation opportunity for chief executive officers at our peer
group companies, our sustained operating performance and returns to
stockholders, and Mr. Nolls strong leadership and accomplishments. Based on
those factors, our Compensation Committee recommended, and the Board approved,
an increase in Mr. Nolls total target direct compensation of approximately 22%,
maintaining his base salary and target AIP opportunity at $1,200,000 and
$1,800,000, respectively, while increasing his target LTIP opportunity from
$6,200,000 to $8,200,000.
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Change in CEO Total
Target Direct Compensation (in millions) |
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Table of Contents
Compensation Discussion and Analysis |
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Following a market review of
pay practices at our peer group companies and considering changes to the scope
of certain officers individual responsibilities, the Compensation Committee
also approved the following increases to the 2016 total target direct
compensation levels for our other named executive officers:
● |
Mr. Evans total target
direct compensation for 2016 was increased by approximately 15%. His base
salary was increased from $750,000 to $850,000, his target AIP opportunity
was increased from $750,000 to $850,000 and his target LTIP opportunity
was increased from $2,100,000 to $2,450,000. |
● |
Mr. Moss total target
direct compensation for 2016 was increased by approximately 8%. No changes
were made to his base salary or target AIP opportunity; however, his
target LTIP opportunity was increased from $1,250,000 to
$1,450,000. |
● |
Ms. Johnsons total
target direct compensation for 2016 was increased by approximately 3%. No
changes were made to her base salary or target AIP opportunity; however,
her LTIP opportunity was increased from $905,000 to
$960,000. |
No changes were made to Mr.
Upchurchs total target direct compensation for 2016.
In June 2016, in consideration
of Mr. Evans election as Chief Executive Officer, the Compensation Committee
determined to increase his annual base salary to $1.1 million, effective October
1, 2016. The Compensation Committee also increased Mr. Evans target AIP
opportunity to 150% of his annual base salary and increased his 2016 LTIP
opportunity on a pro-rated basis by granting him restricted stock units having
an aggregate value as of the grant date of $818,750, which will vest 33%, 33%
and 34%, respectively, on the first, second and third anniversaries of the grant
date.
Our Compensation Committee
typically approves, at its December meeting, LTIP awards that are intended to
serve as equity incentive compensation for the following fiscal year. On
December 13, 2016, the Compensation Committee approved the 2017 LTIP awards. The
PSAs and RSUs that comprise the 2017 LTIP awards were granted to the named
executive officers on such date. The table below includes the target value of
the 2017 LTIP awards in the row for fiscal year 2017, as this corresponds to the
analysis undertaken by the Compensation Committee in determining total target
direct compensation. Under SEC rules, however, we are required to include the
grant date fair value of equity awards in the fiscal year in which the award is
granted. Therefore, in the Summary Compensation Table on page 47, the grant date
fair value for the 2017 LTIP awards is included in the stock awards column for
fiscal year 2016.
For a discussion of 2017
compensation information reflected in the table below, see 2017 Compensation
Decisions on page 43.
|
|
|
|
Annual Compensation at
Target |
|
Long-Term Compensation at Target |
|
|
Name |
|
Year |
|
Base
Salary/% of Value of Total Target Direct Compensation |
|
Value
at Target of AIP Compensation/% of Value of Total Target
Direct Compensation |
|
Value
at Target of LTIP Compensation/% of Value of Total Target
Direct Compensation |
|
Value of Total Target
Direct Compensation |
Richard A. Noll |
|
2017 |
|
$ |
1,200,000 |
|
32.4 |
% |
|
$ |
|
|
|
% |
|
$ |
2,500,000 |
|
67.6 |
% |
|
$ |
3,700,000 |
|
|
2016 |
|
|
1,200,000 |
|
10.7 |
|
|
|
1,800,000 |
|
16.1 |
|
|
|
8,200,000 |
|
73.2 |
|
|
|
11,200,000 |
|
|
2015 |
|
|
1,200,000 |
|
13.0 |
|
|
|
1,800,000 |
|
19.6 |
|
|
|
6,200,000 |
|
67.4 |
|
|
|
9,200,000 |
Gerald W. Evans, Jr. |
|
2017 |
|
|
1,100,000 |
|
13.0 |
|
|
|
1,650,000 |
|
19.5 |
|
|
|
5,725,000 |
|
67.6 |
|
|
|
8,475,000 |
|
|
2016 |
|
|
850,000 |
|
20.5 |
|
|
|
850,000 |
|
20.5 |
|
|
|
2,450,000 |
|
59.0 |
|
|
|
4,150,500 |
|
|
2015 |
|
|
750,000 |
|
20.8 |
|
|
|
750,000 |
|
20.8 |
|
|
|
2,100,000 |
|
58.4 |
|
|
|
3,600,000 |
Richard D. Moss |
|
2017 |
|
|
625,000 |
|
21.9 |
|
|
|
625,000 |
|
21.9 |
|
|
|
1,600,000 |
|
56.1 |
|
|
|
2,850,000 |
|
|
2016 |
|
|
575,000 |
|
22.1 |
|
|
|
575,000 |
|
22.1 |
|
|
|
1,450,000 |
|
55.8 |
|
|
|
2,600,000 |
|
|
2015 |
|
|
575,000 |
|
24.0 |
|
|
|
575,000 |
|
24.0 |
|
|
|
1,250,000 |
|
52.0 |
|
|
|
2,400,000 |
Joia M. Johnson |
|
2017 |
|
|
550,000 |
|
26.2 |
|
|
|
467,500 |
|
22.3 |
|
|
|
1,082,000 |
|
51.5 |
|
|
|
2,099,500 |
|
|
2016 |
|
|
515,000 |
|
26.9 |
|
|
|
437,750 |
|
22.9 |
|
|
|
960,000 |
|
50.2 |
|
|
|
1,912,750 |
|
|
2015 |
|
|
515,000 |
|
27.7 |
|
|
|
437,750 |
|
23.6 |
|
|
|
905,000 |
|
48.7 |
|
|
|
1,857,750 |
Table of Contents
|
Compensation Discussion and Analysis |
|
|
|
|
Annual Compensation at Target |
|
|
Long-Term Compensation at Target |
|
|
|
Name |
|
Year |
|
Base Salary/% of Value of Total Target
Direct Compensation |
|
|
Value at Target of AIP Compensation/% of Value of
Total Target Direct Compensation |
|
|
Value at Target of LTIP Compensation/% of Value of
Total Target Direct Compensation |
|
|
Value of Total Target Direct Compensation |
W. Howard Upchurch |
|
2017 |
|
$ 570,000 |
|
25.9 |
% |
|
$ 427,500 |
|
19.4 |
% |
|
$ 1,202,000 |
|
54.6 |
% |
|
$ 2,199,500 |
|
|
2016 |
|
525,000 |
|
27.7 |
|
|
446,250 |
|
23.5 |
|
|
925,000 |
|
48.8 |
|
|
1,896,250 |
|
|
2015 |
|
525,000 |
|
27.7 |
|
|
446,250 |
|
23.5 |
|
|
925,000 |
|
48.8 |
|
|
1,896,250 |
Michael E. Faircloth |
|
2017 |
|
540,000 |
|
26.3 |
|
|
405,000 |
|
19.8 |
|
|
1,105,000 |
|
53.9 |
|
|
2,050,000 |
|
|
2016 |
|
510,000 |
|
28.5 |
|
|
382,500 |
|
21.4 |
|
|
895,000 |
|
50.1 |
|
|
1,787,500 |
Criteria and Metrics for our
Compensation Program
A significant
portion of the compensation that our named executive officers may earn is
subject to the achievement of Company-wide performance metrics. We believe that
the performance of our executive officers is best viewed through their
contributions to long-term stockholder value as reflected by achievement of
annual performance metrics that our Compensation Committee believes to be
drivers of our performance. We use quantifiable performance criteria that are
easily calculated and easily understood and that reinforce teamwork and internal
alignment.
For 2016, the elements of our
executive compensation program subject to the achievement of performance metrics
consisted of:
● |
the AIP;
and |
● |
the PSA portion of LTIP
compensation. |
|
Percentage Payout of
Target Incentive Compensation |
|
|
|
|
|
Executive officers can earn
incentive compensation equal to 10% of their targeted amount for performance at
the threshold level, 100% of their targeted amount for performance at the target
level and 200% of their targeted amount for performance at or above the maximum
level. No incentive compensation is payable if performance is below the
threshold level. Incentive compensation is payable on a straight line basis for
performance between the threshold level and the target level, as well as between
the target level and the maximum level.
In keeping
with our pay for performance philosophy, our executive officers must
deliver results that exceed the target level of performance in order to
receive above median market compensation. Performance below the target
level of performance will result in below median market
compensation. |
Table of Contents
Compensation Discussion and Analysis |
|
CEO Potential Compensation Scenarios (Comparison to Peer
Group) |
|
|
The amounts earned by our
named executive officers under the performance-based elements of our
compensation program are based solely on our performance against pre-established
criteria and metrics. The Compensation Committee selects criteria and metrics
that have generally remained constant from year to year and that it considers to
be key performance drivers that are most important to our stockholders,
supplementing those criteria and metrics from time to time as the Compensation
Committee deems necessary.
The
Compensation Committee sets growth performance metrics that require
consistent year over year improvement in performance rather than
performance based on negotiated targets relative to the Companys annual
operating plan or public guidance. The Committee believes that this
approach to establishing performance metrics has been a significant factor
in Hanesbrands success over the past decade. De-linking performance
metrics from public guidance reduces incentive-related risk by focusing
our executives on long-term value creation rather than on short-term
compensation maximization. |
The performance criteria and
metrics approved by the Compensation Committee for 2016 were as
follows:
2016
Performance Criteria and Metrics |
|
|
|
|
|
|
|
|
|
Criteria |
Weighting |
|
Threshold |
|
Target |
|
Maximum |
|
FY2016 Results |
Sales (growth compared to prior
year) |
20% |
|
0% |
|
3% |
|
6% |
|
5.2% |
EPS-XA* (growth compared to prior
year) |
40% |
|
0% |
|
8% |
|
16% |
|
11.4% |
Cash Flow from
Operations |
40% |
|
$400 million |
|
$600 million |
|
$800 million |
|
$606
million |
* |
|
As in prior years and
consistent with the terms of our Omnibus Incentive Plan, in measuring the
attainment of EPS-XA growth for 2016, the Compensation Committee excluded
the impact of charges for acquisition, integration and other actions, and
the cumulative effects of tax or accounting charges, each as identified in
our financial statements or other SEC filings. EPS-XA is a non-GAAP
financial measure which is used as a performance measure in our executive
compensation programs. EPX-XA is defined as EPS excluding actions and the
tax effect on actions. On a GAAP basis, EPS was $1.40 in 2016 and $1.06 in
2015. We have chosen to provide this non-GAAP financial measure to
investors to enable additional analyses of past, present and future
performance and as a supplemental means of evaluating company operations
absent the effect of acquisition-related expenses and other actions. For a
reconciliation to GAAP EPS, see Appendix
A. |
As a result of our 2016
performance, each of our named executive officers earned, in the aggregate,
132.78% of the target amounts for their performance-based pay
opportunities.
Base Salary
We pay base salary to attract talented executives
and to provide a fixed base of cash compensation for fulfillment of fundamental
job responsibilities. The base salaries for our named executive officers are
determined based on their experience and the scope of their responsibilities,
both on an individual basis and in relation to the experience and scope of
responsibilities of other executives. The Compensation Committee also considers
the practices of the companies in our peer group. These factors result in
different compensation levels among the named executive officers. Base salaries
are adjusted periodically (but generally not every year) as part of the
Compensation Committees annual review of total target direct compensation to
reflect individual responsibilities, performance and experience, as well as
market compensation levels.
Table of Contents
|
Compensation Discussion and Analysis |
Annual Incentive Plan
(AIP)
The AIP is designed to
motivate performance by linking a portion of our named executive officers
compensation to the achievement of key annual results.
As discussed in Criteria and
Metrics for our Compensation Program on page 39 the performance criteria for
the AIP for 2016 were sales growth, EPS-XA growth and cash flow from operations.
As a result of our 2016 performance, each of our named executive officers earned
AIP payments at 132.78% of their target amounts.
Long-Term Incentive Program
(LTIP)
The Compensation Committee
currently uses equity grants as the primary means of providing long-term
incentives to our named executive officers. These LTIP awards are designed to
encourage behaviors that drive the long-term growth, profitability and financial
success of the Company, align executives interests with our stockholders and
support retention objectives. As discussed in Criteria and Metrics for our
Compensation Program on page 39, the performance criteria for the PSAs included
in the LTIP awards for 2016 were sales growth, EPS-XA growth and cash flow from
operations.
For 2016, two types of LTIP
grants were awarded to our named executive officers:
● |
PSAs;
and |
● |
time-vested
RSUs. |
For 2016, 50% of the value of
the LTIP opportunity consisted of PSAs and 50% of the value consisted of RSUs.
The terms of these awards are described below:
* |
|
The actual value
realized by our named executive officers as result of their 2016 PSA and
RSU grants will depend on our stock price on the respective vesting date
of each award. |
Table of
Contents
Compensation Discussion and Analysis |
|
Our Compensation Committee
typically approves, at its December meeting, LTIP awards that are intended to
serve as equity incentive compensation for the following fiscal year. On
December 8, 2015, the Compensation Committee approved the 2016 LTIP awards, and
the PSAs and RSUs that comprise the 2016 LTIP awards were granted to the named
executive officers on such date. Pursuant to SEC rules we are required to
include the grant date fair value of equity awards in the fiscal year in which
the award is granted. Therefore, in the Summary Compensation Table on page 47,
the grant date fair value for the 2016 LTIP awards is included in the stock
awards column for fiscal year 2015.
Post-Employment Compensation
Our named executive officers are eligible to
receive post-employment compensation pursuant to the Hanesbrands Inc. Pension
Plan, or the Pension Plan, and our defined contribution retirement program,
which consists of the Hanesbrands Inc. Retirement Savings Plan (the 401(k)
Plan) and the Hanesbrands Inc. Supplemental Employee Retirement Plan, or the
SERP, and pursuant to Severance/Change in Control Agreements, or Severance
Agreements. Each of these arrangements is discussed below.
Pension
Plan
The Pension Plan is a
defined benefit pension plan under which benefits have been frozen since
December 31, 2005, intended to be qualified under Section 401(a) of the Internal
Revenue Code, that provides the benefits that had accrued for any of our
employees, including our named executive officers, as of December 31, 2005 under
a plan maintained by our former parent company prior to our becoming an
independent public company. Because the Pension Plan is frozen, no additional
employees became participants in the Pension Plan after December 31, 2005, and
existing participants in the Pension Plan do not accrue any additional benefits
after December 31, 2005.
Defined
Contribution Retirement Program
Our defined contribution retirement program consists of the 401(k) Plan
and the SERP.
Under the 401(k) Plan, our
named executive officers and generally all full-time domestic exempt and
non-exempt salaried employees may contribute a portion of their compensation to
the plan on a pre-tax basis and receive a matching employer contribution of up
to a possible maximum of 4% of their eligible compensation not in excess of
certain dollar limits mandated by the Internal Revenue Code. In addition, we may
make a discretionary employer contribution to exempt and non-exempt salaried
employees of up to an additional 4% of their eligible compensation.
The SERP is a nonqualified
supplemental retirement plan that provides two types of benefits:
● |
First, the Defined Contribution Component of
the SERP provides for employer matching and discretionary contributions to
employees whose compensation exceeds a threshold set by the Internal
Revenue Code. Although, as described above, the 401(k) Plan provides for
employer contributions to our named executive officers at the same
percentage of their eligible compensation as provided for all employees
who participate in the 401(k) Plan, compensation and benefit limitations
imposed on the 401(k) Plan by the Internal Revenue Code generally prevent
us from making the entire amount of the employer matching and
discretionary contributions contemplated by the 401(k) Plan with respect
to any employee whose compensation exceeds a threshold set by Internal
Revenue Code provisions, which threshold was $265,000 for 2016. The SERP
provides to those employees whose compensation exceeds this threshold,
including our named executive officers, benefits that would be earned
under the 401(k) Plan but for these limitations. |
● |
Second, the Defined Benefit Component of the
SERP provides benefits consisting of those supplemental retirement
benefits that had been accrued as of December 31, 2005 under a plan
maintained by our former parent company prior to our becoming an
independent public company. |
Severance
Agreements
We have entered
into Severance Agreements with all of our named executive officers. Severance
Agreements help us attract and retain key talent and also provide important
protections to us by discouraging our key executives from competing with us or
soliciting our customers or employees for a specified period of time following
termination. The Severance Agreements provide our named executive officers with
benefits upon the involuntary termination of their employment other than for
wrongful behavior or misconduct. The Severance Agreements also contain change in
control benefits for these officers to help keep them focused on their work
responsibilities during the uncertainty that accompanies a potential change in
control and provide benefits for a period of
Table of
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|
Compensation Discussion and Analysis |
time after a change in control
transaction. We believe the levels of benefits offered by the Severance
Agreements are appropriate and competitive. Compensation that could potentially
be paid to our named executive officers pursuant to the Severance Agreements is
described under Potential Payments upon Termination or Change in Control on
page 55. Each agreement continues in effect unless we give at least 18 months
prior written notice that the agreement will not be renewed. In addition, if a
change in control occurs during the term of the agreement, the agreement will
automatically continue for two years after the end of the month in which the
change in control occurs.
Benefit
Plans and Arrangements
Our
named executive officers are eligible to participate in certain of our other
employee benefits plans and arrangements. These consist of the Hanesbrands Inc.
Executive Deferred Compensation Plan (the Executive Deferred Compensation
Plan), the Hanesbrands Inc. Executive Life Insurance Plan (the Life Insurance
Plan), and the Hanesbrands Inc. Executive Disability Plan (the Disability
Plan). In general, these benefits are designed to provide a safety net of
protection against the financial catastrophes that can result from illness,
disability or death and to enable executives to save for future financial needs
in a tax efficient manner.
Under the Executive Deferred
Compensation Plan, a group of approximately 250 U.S.-based employees, generally
at the director level and above, including our named executive officers, may
defer receipt of cash and equity compensation. This benefit offers tax
advantages to eligible employees, permitting them to defer payment of their
compensation and defer taxation on that compensation until a future
date.
The Life Insurance Plan
provides life insurance benefits to a group of approximately 75 U.S.-based
employees, generally at the level of vice president or above, including our
named executive officers, who contribute materially to our continued growth,
development and future business success. The Life Insurance Plan, which includes
both a death benefit and a cash value, provides life insurance coverage during
active employment in an amount equal to three times annual base salary, and,
depending on the performance of investments in the plan, may offer continuing
coverage following retirement. The Life Insurance Plan also provides executives
with the opportunity to make voluntary, after-tax contributions that may be
allocated by the executive into a range of investment options.
The Disability Plan provides
long-term disability benefits for a group of approximately 75 U.S.-based
employees, generally at the level of vice president and above, including our
named executive officers. If an eligible employee becomes totally disabled, the
program will provide a monthly disability benefit equal to 1/12 of the sum of
(i) 75% of the employees annual base salary up to an amount not in excess of
$500,000 and (ii) 50% of the three-year average of the employees annual
short-term incentive payments up to an amount not in excess of $250,000. The
maximum monthly disability benefit is $41,667 and is reduced by any disability
benefits that an employee is entitled to receive under Social Security, workers
compensation, a state compulsory disability law or another plan of Hanesbrands
providing benefits for disability.
2017
Compensation Decisions
In
December 2016, using the methodology discussed under How We Make Executive
Compensation Decisions on page 35, the Compensation Committee determined the
total target direct compensation levels of our executive officers for 2017, as
well as the relative mix of base salary, AIP opportunity and LTIP opportunity
for those executives.
When setting Mr. Evans total
target direct compensation level for 2017, the Compensation Committee considered
the total compensation opportunity for chief executive officers at our peer
group companies, as well as the October 2016 increase to Mr. Evans total target
direct compensation as a result of his election as Chief Executive Officer.
Based on those factors, the Compensation Committee determined not to recommend
any changes to Mr. Evans total target direct compensation for 2017.
Following a market review of
pay practices at our peer group companies and considering changes to the scope
of certain officers individual responsibilities, the Compensation Committee
approved the following increases to the total target direct compensation levels
for our other named executive officers:
● |
Mr. Moss total target direct compensation for
2017 was increased by approximately 10%. His base salary and target AIP
opportunity were each increased from $575,000 to $625,000 and his target
LTIP opportunity was increased from $1,450,000 to
$1,600,000. |
Table of
Contents
Compensation Discussion and Analysis |
|
● |
Ms. Johnsons total target direct compensation
for 2017 was increased by approximately 10%. Her base salary was increased
from $515,000 to $550,000, her target AIP opportunity was increased from
$437,750 to $467,500 and her target LTIP opportunity was increased from
$960,000 to $1,082,000. |
● |
Mr. Upchurchs total target direct compensation
for 2017 was increased by approximately 16%. His base salary was increased
from $525,000 to $570,000, his target AIP opportunity was decreased from
$446,250 to $427,500 and his target LTIP opportunity was increased from
$925,000 to $1,202,000. |
● |
Mr. Faircloths total target direct
compensation for 2017 was increased by approximately 15%. His base salary
was increased from $510,000 to $540,000, his target AIP opportunity was
increased from $382,500 to $405,000 and his target LTIP opportunity was
increased from $895,000 to $1,105,000. |
With respect to the named
executive officers 2017 LTIP opportunity, the Compensation Committee again
determined that 50% of the LTIP opportunity will consist of PSAs and 50% of the
LTIP opportunity will consist of RSUs.
The Compensation Committee
determined to continue the overall structure of the AIP and LTIP for 2017. The
PSAs and RSUs for 2017 were granted on December 13, 2016. As a result, these
awards are reflected in the Grants of Plan-Based Awards table on page 49 and the
full grant date value of these awards is included for 2016 in the Summary
Compensation Table on page 47, even though the Compensation Committee views
these as the 2017 LTIP award.
The Compensation Committee
also approved performance criteria and metrics for 2017 that will be used to
determine the amounts earned by our named executive officers under their
performance-based pay opportunities. Our named executive officers can earn
performance-based compensation equal to 10% of their targeted amount for
performance at the threshold level, 100% of their targeted amount for
performance at the target level and 200% of their targeted amount for
performance at or above the maximum level. No performance-based compensation is
payable if performance is below the threshold level. Performance-based
compensation is payable on a straight-line basis for performance between the
threshold level and the target level, as well as between the target level and
the maximum level.
The Compensation Committee
again selected performance criteria and metrics that require consistent year
over year improvement in Company performance rather than performance based on
negotiated targets relative to the Companys annual operating plan or public
guidance. The performance criteria and metrics for 2017 are as
follows:
Criteria |
|
Weighting |
|
Threshold |
|
Target |
|
Maximum |
Sales (growth
compared to prior year) |
|
20% |
|
0% |
|
3% |
|
6% |
EPS-XA (growth
compared to prior year) |
|
40% |
|
0% |
|
8% |
|
16% |
Cash flow from
operations |
|
40% |
|
$400 million |
|
$600 million |
|
$800
million |
In determining to retain sales
growth and EPS-XA growth as performance metrics for our named executive officers
in 2017, the Compensation Committee determined that these measures remain
effective tools for aligning the performance of these officers with stockholder
value by incorporating aspects of growth, profitability and capital efficiency.
Like 2016, the Compensation Committee weighted EPS-XA more heavily than sales to
further align senior management and stockholder interests. The Compensation
Table of
Contents
|
Compensation Discussion and Analysis |
Committee determined to again
include cash flow from operations as a performance metric for 2017 because of
its ability to enhance stockholder value in numerous ways, including debt
reduction, dividends, stock repurchases and the ability to pursue strategic
acquisitions.
Additional
Information
Consideration of Prior Stockholder Advisory Vote on Executive
Compensation
At our 2016
Annual Meeting of Stockholders, our stockholders had the opportunity to cast an
advisory say on pay vote on our executive compensation. Our stockholders
overwhelmingly approved the compensation of our named executive officers as
disclosed in the proxy statement for that meeting. Our Board of Directors, and
the Compensation Committee in particular, considered this overwhelming support,
as well as the executive compensation programs of our peer group of companies,
our past operating performance and planned strategic initiatives, in making the
determination that the fundamental characteristics of our executive compensation
program should continue this year.
No Tax
Gross-Ups
We do not
increase payments to any executive officer to cover non business-related
personal income taxes, other than the personal income taxes due on relocation
reimbursements, which is provided under a broad-based program. Beginning
December 1, 2010, we eliminated excise tax gross-ups with respect to new or
amended severance or change-in-control agreements.
Clawbacks
and Recoupment
The
Compensation Committee has adopted a clawback policy in order to further align
the interests of employees with the interests of our stockholders and strengthen
the link between total compensation and the Companys performance. Under this
policy, in the event we are required to prepare an accounting restatement due to
material noncompliance with any financial reporting requirement under the
securities laws, we may, in the discretion of the Compensation Committee (as it
applies to current or former executive officers) or the Chief Executive Officer
(as it applies to any other employee) seek to recover, from any employee who
received cash-based or equity-based incentive compensation during the three-year
period preceding the date on which we are required to prepare an accounting
restatement, the amount by which such persons cash-based or equity-based
incentive compensation for the relevant period exceeded the lower payment that
would have been made based on the restated financial results.
Stock
Ownership and Retention Guidelines
We believe that our executives should have a significant ownership
position in Hanesbrands. To promote such equity ownership and further align the
economic interests of our executives with our stockholders, we have adopted
stock ownership guidelines for our key executives, including our named executive
officers.
Our Chief Executive Officer is
required to own Hanesbrands stock valued at six times his annual base salary;
all other named executive officers are required to own Hanesbrands stock valued
at three times his or her base salary. Until the requirements of the stock
ownership guidelines are met, an executive is required to retain 50% of any
shares received (on a net after-tax basis) under our stock-based compensation
plans. Our named executive officers and other key executives have a substantial
portion of their incentive compensation paid in the form of our common stock. In
addition to shares directly held by a key executive, shares held for such
executive in the 401(k) Plan, the Executive Deferred Compensation Plan and the
SERP, including hypothetical share equivalents held in the latter two plans, are
counted for purposes of determining whether the ownership requirements are met.
As of the date of this proxy statement, all of our named executive officers have
met the required ownership level.
The Compensation Committee has
also implemented a policy that requires all Hanesbrands employees, including our
named executive officers, to hold any net shares of Hanesbrands stock that they
receive through the exercise of stock options (in the case of options granted
after December 1, 2010) or the vesting or lapse of restrictions on restricted
stock units or other equity awards for at least one year from the date of
exercising, vesting or lapse, as applicable; provided, however, that this
requirement does not apply to any employee of the Company whose employment
terminates or who becomes totally disabled. For purposes of this policy, net
shares means the number of shares obtained by the executive less any shares
sold by the executive to cover the exercise price and brokerage costs of
exercising an option or withheld to cover applicable income tax and employment
tax withholding requirements.
Table of
Contents
Compensation Discussion and Analysis |
|
Prohibitions on Pledging, Hedging and Other Derivative
Transactions
Under our
insider trading policy, directors and executive officers, including our named
executive officers, are required to clear in advance all transactions in our
securities with Hanesbrands law department. Further, no director, executive
officer or other employee is permitted to (i) pledge or margin our securities as
collateral for a loan obligation, (ii) engage in short sales or sales against
the box or trade in puts, calls or other options on our securities or (iii)
purchase any financial instrument or contract that is designed to hedge or
offset any risk of decrease in the market value of our securities. These
provisions are part of our overall program to prevent any of our directors,
officers or employees from trading on material non-public
information.
Compensation Risk Assessment
The Compensation Committee, in consultation with
FW Cook, annually reviews our current compensation policies and practices and
believes that, in light of their overall structure, the risks arising from such
compensation policies and practices are not reasonably likely to have a material
adverse effect on us.
Some of the key factors
supporting the Compensation Committees conclusion include: (i) a reasonable
degree of balance with respect to the mix of cash and equity compensation and
short- and longer-term performance focus; (ii) the use of multiple performance
criteria in our AIP and LTIP awards; (iii) multiple year vesting for equity
awards; (iv) robust executive and non-employee director stock ownership
guidelines; (v) an insider trading policy that includes prohibitions on hedging
and pledging of our stock; (vi) holding period requirements on earned equity
awards; and (vii) an incentive compensation clawback policy.
Tax
Treatment of Certain Compensation
Section 162(m) of the Internal Revenue Code limits the tax deductibility
of certain compensation paid to our Chief Executive Officer and our three other
named executive officers, other than our Chief Financial Officer, with the
highest total compensation. This provision disallows the deductibility of
certain compensation in excess of $1 million per year unless it is considered
performance-based compensation under the Internal Revenue Code. We have adopted
policies and practices that are intended to take into account the maximum tax
deduction possible under Section 162(m) of the Internal Revenue Code for our AIP
payments and PSAs; however, there can be no guarantee that the IRS will agree on
the amount of those deductions. In addition, we may forgo any or all of the tax
deduction if we believe it to be in the best long-term interests of our
stockholders. Time-vested RSUs are not deemed performance-based, and therefore
are not tax deductible if the value at vesting, in combination with other
non-performance-based compensation such as salary, exceeds $1 million for an
executive officer.
In making decisions about
executive compensation, we also consider the impact of other regulatory
provisions, including the provisions of Section 409A regarding non-qualified
deferred compensation and the golden parachute provisions of Section 280G of
the Internal Revenue Code. For example, we have attempted to structure the
Severance Agreements so that they will not result in adverse tax consequences
under Section 409A.
In making decisions about
executive compensation, we also consider how various elements of compensation
will impact our financial results. In this regard, we consider the impact of
applicable stock compensation accounting rules, which determine how we recognize
the cost of employee services received in exchange for awards of equity
instruments.
Table of
Contents
|
Compensation Discussion and Analysis |
Executive
Compensation
Summary of
Compensation
The following
table sets forth a summary of compensation earned by or paid to our named
executive officers for our 2016, 2015 and 2014 fiscal years.
Summary Compensation
Table
Name and
Principal Position |
|
Year |
|
Salary ($) (1) |
|
Bonus ($) |
|
Stock Awards ($) (2) |
|
Non-Equity Incentive Plan Compensation ($) (1)
(3) |
|
Change
in Pension Value
and Nonqualified Deferred Compensation Earnings ($)
(4) |
|
All
Other Compensation ($) (5) |
|
Total Compensation ($) |
Richard A. Noll Chairman and Former Chief
Executive Officer |
|
2016 |
|
$ 1,200,000 |
|
|
|
$ 2,500,008 |
|
$ 2,390,040 |
|
$ 42,488 |
|
$ 549,461 |
|
$ 6,681,997 |
|
2015 |
|
1,200,000 |
|
|
|
8,200,017 |
|
2,160,000 |
|
|
|
383,640 |
|
11,943,657 |
|
2014 |
|
1,200,000 |
|
|
|
6,200,072 |
|
3,268,800 |
|
110,415 |
|
337,221 |
|
11,116,508 |
Gerald W. Evans, Jr. Chief Executive
Officer |
|
2016 |
|
912,500 |
|
|
|
6,543,769 |
|
1,394,190 |
|
132,718 |
|
206,366 |
|
9,189,543 |
|
2015 |
|
750,000 |
|
|
|
2,450,002 |
|
900,000 |
|
8,612 |
|
190,895 |
|
4,299,509 |
|
2014 |
|
750,000 |
|
|
|
2,099,936 |
|
1,362,000 |
|
279,792 |
|
174,600 |
|
4,666,328 |
Richard D. Moss Chief Financial
Officer |
|
2016 |
|
575,000 |
|
|
|
1,600,018 |
|
763,485 |
|
|
|
323,735 |
|
3,262,238 |
|
2015 |
|
575,000 |
|
|
|
1,450,008 |
|
690,000 |
|
|
|
157,830 |
|
2,872,838 |
|
2014 |
|
575,000 |
|
|
|
1,250,098 |
|
1,044,200 |
|
|
|
142,003 |
|
3,011,300 |
Joia M. Johnson Chief Administrative
Officer, General Counsel and Corporate
Secretary |
|
2016 |
|
515,000 |
|
|
|
1,082,012 |
|
581,245 |
|
|
|
278,966 |
|
2,457,223 |
|
2015 |
|
515,000 |
|
|
|
960,007 |
|
525,300 |
|
|
|
120,248 |
|
2,120,556 |
|
2014 |
|
515,000 |
|
|
|
1,155,074 |
|
794,954 |
|
|
|
108,339 |
|
2,573,367 |
W. Howard Upchurch Group President, Innerwear
Americas |
|
2016 |
|
525,000 |
|
|
|
1,201,980 |
|
592,531 |
|
29,398 |
|
103,155 |
|
2,452,064 |
|
2015 |
|
525,000 |
|
|
|
924,972 |
|
535,500 |
|
|
|
111,184 |
|
2,096,656 |
|
2014 |
|
515,000 |
|
|
|
925,024 |
|
794,954 |
|
75,299 |
|
94,204 |
|
2,404,481 |
Michael
E. Faircloth President, Chief Global Supply Chain
and Information Technology Officer |
|
2016 |
|
510,000 |
|
|
|
1,105,012 |
|
507,884 |
|
13,083 |
|
85,673 |
|
2,221,651 |
(1) |
|
The amounts shown
include deferrals to the 401(k) Plan and the Executive Deferred
Compensation Plan. |
Table of
Contents
Compensation Discussion and Analysis |
|
(2) |
|
The
amounts shown reflect the aggregate grant date fair value of awards during
the year shown, computed in accordance with Topic 718 of the FASB
Accounting Standards Codification. The assumptions we used in valuing
these awards are described in Note 6, Stock-Based Compensation, to our
consolidated financial statements included in our annual report on Form
10-K for the fiscal year ended December 31, 2016. These amounts do not
correspond to the actual value that may be recognized by the officer.
Additional information regarding outstanding awards, including exercise
prices and expiration dates, can be found in the Outstanding Equity
Awards table on page 50. The amounts shown under Stock Awards include:
(i) grants of restricted stock units (RSUs) and (ii) performance share
awards (PSAs), as shown below: |
|
|
|
Year |
|
Grant Date Fair Value of
PSAs |
|
Grant Date Fair Value of
RSUs |
|
Total Grant Date Fair Value
of Stock Awards |
Richard A.
Noll |
|
2016 |
|
$ |
|
$ 2,500,008 |
|
$ 2,500,008 |
|
|
2015 |
|
4,100,008 |
|
4,100,008 |
|
8,200,017 |
|
|
2014 |
|
3,100,036 |
|
3,100,036 |
|
6,200,072 |
Gerald W. Evans,
Jr. |
|
2016 |
|
2,862,511 |
|
3,681,258 |
|
6,543,769 |
|
|
2015 |
|
1,225,001 |
|
1,225,001 |
|
2,450,002 |
|
|
2014 |
|
1,049,968 |
|
1,049,968 |
|
2,099,936 |
Richard D.
Moss |
|
2016 |
|
800,009 |
|
800,009 |
|
1,600,018 |
|
|
2015 |
|
725,004 |
|
725,004 |
|
1,450,008 |
|
|
2014 |
|
625,049 |
|
625,049 |
|
1,250,098 |
Joia M.
Johnson |
|
2016 |
|
541,006 |
|
541,006 |
|
1,082,012 |
|
|
2015 |
|
480,004 |
|
480,004 |
|
960,007 |
|
|
2014 |
|
452,538 |
|
702,536 |
|
1,155,074 |
W. Howard
Upchurch |
|
2016 |
|
600,990 |
|
600,990 |
|
1,201,980 |
|
|
2015 |
|
462,486 |
|
462,486 |
|
924,972 |
|
|
2014 |
|
462,512 |
|
462,512 |
|
925,024 |
Michael E.
Faircloth |
|
2016 |
|
552,506 |
|
552,506 |
|
1,105,012 |
|
|
The
amounts shown above for PSAs represent the grant date value based on the
probable outcome of the performance conditions. The value of such awards
at the grant date assuming that the maximum level of performance
conditions was achieved was as follows: for Mr. Noll: $6,200,072 in 2014
and $8,200,017 in 2015; for Mr. Evans: $2,099,936 in 2014, $2,450,002 in
2015 and $5,725,022 in 2016; for Mr. Moss: $1,250,098 in 2014, $1,450,008
in 2015 and $1,600,018 in 2016; for Ms. Johnson: $905,077 in
2014, $960,007 in 2015 and $1,082,012 in 2016; for Mr. Upchurch: $925,024 in 2014,
$924,972 in 2015 and $1,201,980 in 2016; and for Mr. Faircloth:
$1,105,012 in 2016. |
(3) |
|
The amount
shown reflects the amount earned for such year under the AIP, which amount
was paid after the end of such year. |
(4) |
|
Neither
the Executive Deferred Compensation Plan nor the SERP provide for
above-market or preferential earnings as defined in applicable SEC
rules. Increases in pension values are determined for the periods
presented; because the defined benefit arrangements are frozen, the
amounts shown in this column represent solely the increase in the
actuarial value of pension benefits previously accrued as of December 31,
2005. |
(5) |
|
For the
fiscal year ended December 31, 2016, the amounts shown in the All Other
Compensation column include the following: (i) premiums for an insurance
policy on the life of each of the officers ($29,508 for Mr. Noll, $49,386
for Mr. Evans, $24,116 for Mr. Moss, $11,705 for
Ms. Johnson, $7,937 for Mr. Upchurch and $9,854 for Mr. Faircloth); (ii) premiums for long-term
disability insurance for each of the officers ($11,460 for Mr. Noll,
$8,714 for Mr. Evans, $5,491 for Mr. Moss, $4,918 for Ms. Johnson, $5,014 for Mr. Upchurch and $4,871 for Mr. Faircloth); (iii) our contributions
pursuant to the defined contribution retirement program, which consists of
the qualified 401(k) Plan ($21,200 for each of the officers) and the
nonqualified SERP ($291,952 for Mr. Noll, $135,780 for Mr. Evans, $94,168
for Mr. Moss, $72,810 for Ms. Johnson, $74,018 for Mr. Upchurch and
$54,619 for Mr. Faircloth); and (iv) advisory services with respect to outside board appointments ($195,251 for Mr. Noll, $184,251 for Mr. Moss and $173,251 for Ms. Johnson). |
|
|
As
discussed under Defined Contribution Retirement Program on page 42, we
may make an employer contribution to exempt and non-exempt salaried
employees, including our executive officers, of up to 4% of their eligible
compensation. Because this contribution is discretionary and may not be
made for any particular fiscal year, we have determined that it is most
appropriate to reflect the contribution in the Summary Compensation Table
in the year in which it is actually made. As a result, the amounts shown
in the All Other Compensation column for the fiscal year ended December
31, 2016 include the following discretionary contributions with respect to
the fiscal year ended January 2, 2016: $178,752 for Mr. Noll, $84,480 for
Mr. Evans, $64,768 for Mr. Moss, $52,398 for Ms.
Johnson, $52,798 for Mr. Upchurch, and $40,817 for Mr. Faircloth. |
Table of
Contents
|
Compensation Discussion and Analysis |
Grants of Plan-Based Awards
The following table sets forth a summary of grants
of plan-based awards to our named executive officers during our 2016 fiscal
year.
Grants of Plan-Based Awards in 2016
|
|
|
|
|
|
|
|
|
All
Other Stock Awards: Number of Shares of Stock or
Units (#) |
|
All
Other Option Awards: Number
of Securities Underlying Options (#) |
|
Exercise or
Base Price of Option Awards ($/Sh) |
|
Grant
Date Fair Value of Stock and Option Awards ($)
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards |
|
Estimated Future Payouts Under Equity Incentive Plan
Awards |
|
|
Name |
|
Grant Date |
|
|
|
Threshold ($) |
|
|
Target ($) |
|
|
Maximum ($) |
|
Threshold (#) |
|
Target (#) |
|
Maximum (#) |
|
Richard
A. |
|
1/26/2016 |
(2) |
|
$ |
180,000 |
|
$ |
1,800,000 |
|
$ |
3,600,000 |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
$ |
|
Noll |
|
12/13/2016 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,696 |
|
|
|
|
|
2,500,008 |
|
Gerald
W. |
|
1/26/2016 |
(2) |
|
|
105,000 |
|
|
1,050,000 |
|
|
2,100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evans,
Jr. |
|
6/10/2016 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,482 |
|
|
|
|
|
818,747 |
|
|
|
12/13/2016 |
(5) |
|
|
|
|
|
|
|
|
|
|
12,446 |
|
124,457 |
|
248,914 |
|
|
|
|
|
|
|
2,862,511 |
(6) |
|
|
12/13/2016 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
124,457 |
|
|
|
|
|
2,862,511 |
|
Richard
D. |
|
1/26/2016 |
(2) |
|
|
57,500 |
|
|
575,000 |
|
|
1,150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moss |
|
12/13/2016 |
(5) |
|
|
|
|
|
|
|
|
|
|
3,478 |
|
34,783 |
|
69,566 |
|
|
|
|
|
|
|
800,009 |
(6) |
|
|
12/13/2016 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,783 |
|
|
|
|
|
800,009 |
|
Joia
M. |
|
1/26/2016 |
(2) |
|
|
43,775 |
|
|
437,750 |
|
|
875,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Johnson |
|
12/13/2016 |
(5) |
|
|
|
|
|
|
|
|
|
|
2,352 |
|
23,522 |
|
47,044 |
|
|
|
|
|
|
|
541,006 |
(6) |
|
|
12/13/2016 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,522 |
|
|
|
|
|
541,006 |
|
W.
Howard |
|
1/26/2016 |
(2) |
|
|
44,625 |
|
|
446,250 |
|
|
892,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upchurch |
|
12/13/2016 |
(5) |
|
|
|
|
|
|
|
|
|
|
2,613 |
|
26,130 |
|
52,260 |
|
|
|
|
|
|
|
600,990 |
(6) |
|
|
12/13/2016 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,130 |
|
|
|
|
|
600,990 |
|
Michael
E. |
|
1/26/2016 |
(2) |
|
|
38,250 |
|
|
382,500 |
|
|
765,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Faircloth |
|
12/13/2016 |
(5) |
|
|
|
|
|
|
|
|
|
|
2,402 |
|
24,022 |
|
48,044 |
|
|
|
|
|
|
|
552,506 |
(6) |
|
|
12/13/2016 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,022 |
|
|
|
|
|
552,506 |
|
(1) |
|
The amounts shown in
the Grant Date Fair Value column reflect the aggregate grant date fair
value of the awards, computed in accordance with Topic 718 of the FASB
Accounting Standards Codification. |
(2) |
|
This award is the AIP
award for the 2016 fiscal year. See Annual Incentive Plan (AIP) on page
41 for a discussion of the amounts paid under the AIP for the 2016 fiscal
year. |
(3) |
|
This award
represents the portion of the LTIP award for 2017 that consists of
restricted stock units. The restricted stock units vest 33%, 33% and 34%
on the first anniversary, the second anniversary and the third
anniversary, respectively, of the date of grant. See Long-Term Incentive
Program (LTIP) on page 41 for a discussion of these
awards. |
(4) |
|
This award
represents an interim grant of restricted stock units in connection with
Mr. Evans election as Chief Executive Officer effective October 1, 2016.
The restricted stock units vest 33%, 33% and 34% on the first anniversary,
the second anniversary and the third anniversary, respectively, of the
date of grant. |
(5) |
|
This award is the
portion of the LTIP award for 2017 that consists of the PSA. This award
will vest on the third anniversary of the grant date, and the number of
shares of common stock that will vest will range from 0% to 200% of the
number of shares granted based on our achievement of pre-established
performance metrics for our 2017 fiscal year. Once vested, this award will
be paid in shares of our common stock distributed to participants
following the vesting date. See Long-Term Incentive Program (LTIP) on
page 41 for a discussion of these awards. |
(6) |
|
Represents the
grant date fair value of the portion of the LTIP award for 2017 that
consists of the PSA, assuming achievement at the target
level. |
|
Table of
Contents
Compensation Discussion and Analysis |
|
Outstanding Equity Awards
The following table sets forth certain information
with respect to outstanding equity awards at the end of our 2016 fiscal year for
each of our named executive officers.
Outstanding Equity
Awards at Fiscal 2016 Year-End
|
|
|
|
Option Awards |
|
Stock Awards |
Name |
|
|
|
Number
of Securities Underlying Unexercised Options
(#) Exercisable |
|
Number
of Securities Underlying Unexercised Options
(#) Unexercisable |
|
Option Exercise Price ($)
(1) |
|
Option Expiration Date |
|
Number of Shares or Units of
Stock That Have Not Vested (#) |
|
Market Value of Shares or Units of Stock That
Have Not Vested ($) (2) |
|
Equity Incentive Plan Awards: Number
of Unearned Shares, Units or Other Rights That Have
Not Vested (#) |
|
Equity Incentive Plan Awards: Market or Payout
Value of Unearned Shares, Units or Other Rights That Have
Not Vested ($) (2) |
Richard A.
Noll |
|
(3) |
|
|
|
|
|
$ |
|
|
|
108,696 |
|
$ 2,344,573 |
|
|
|
|
$ |
|
|
|
(4) |
|
|
|
|
|
|
|
|
|
175,896 |
|
3,794,077 |
|
|
|
|
|
|
|
|
(5) |
|
|
|
|
|
|
|
|
|
88,757 |
|
1,914,488 |
|
|
|
|
|
|
|
|
(6) |
|
|
|
|
|
|
|
|
|
135,768 |
|
2,928,516 |
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
|
|
|
38,468 |
|
829,755 |
|
|
|
|
|
|
|
|
(8) |
|
276,276 |
|
|
|
6.79 |
|
12/6/2020 |
|
|
|
|
|
|
|
|
|
|
Gerald W. Evans,
Jr. |
|
(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
124,457 |
(10) |
|
2,684,537 |
(11) |
|
|
(3) |
|
|
|
|
|
|
|
|
|
124,457 |
|
2,684,537 |
|
|
|
|
|
|
|
|
(12) |
|
|
|
|
|
|
|
|
|
30,482 |
|
657,497 |
|
|
|
|
|
|
|
|
(4) |
|
|
|
|
|
|
|
|
|
52,554 |
|
1,133,590 |
|
|
|
|
|
|
|
|
(5) |
|
|
|
|
|
|
|
|
|
26,519 |
|
572,015 |
|
|
|
|
|
|
|
|
(6) |
|
|
|
|
|
|
|
|
|
45,984 |
|
991,875 |
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
|
|
|
13,032 |
|
281,100 |
|
|
|
|
|
|
|
|
(8) |
|
78,800 |
|
|
|
6.79 |
|
12/6/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
(13) |
|
162,712 |
|
|
|
6.09 |
|
12/8/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
(14) |
|
436,364 |
|
|
|
3.57 |
|
12/9/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
(15) |
|
340,424 |
|
|
|
6.28 |
|
2/4/2018 |
|
|
|
|
|
|
|
|
|
|
Richard D.
Moss |
|
(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
34,783 |
(10) |
|
750,269 |
(11) |
|
|
(3) |
|
|
|
|
|
|
|
|
|
34,783 |
|
750,269 |
|
|
|
|
|
|
|
|
(4) |
|
|
|
|
|
|
|
|
|
31,104 |
|
670,913 |
|
|
|
|
|
|
|
|
(5) |
|
|
|
|
|
|
|
|
|
15,695 |
|
338,541 |
|
|
|
|
|
|
|
|
(6) |
|
|
|
|
|
|
|
|
|
27,374 |
|
590,457 |
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
|
|
|
7,764 |
|
167,469 |
|
|
|
|
|
|
Joia M.
Johnson |
|
(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
23,522 |
(10) |
|
507,370 |
(11) |
|
|
(3) |
|
|
|
|
|
|
|
|
|
23,522 |
|
507,370 |
|
|
|
|
|
|
|
|
(4) |
|
|
|
|
|
|
|
|
|
20,593 |
|
444,191 |
|
|
|
|
|
|
|
|
(5) |
|
|
|
|
|
|
|
|
|
10,392 |
|
224,155 |
|
|
|
|
|
|
|
|
(6) |
|
|
|
|
|
|
|
|
|
19,819 |
|
427,496 |
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
|
|
|
5,620 |
|
121,223 |
|
|
|
|
|
|
|
|
(16) |
|
|
|
|
|
|
|
|
|
9,124 |
|
196,805 |
|
|
|
|
|
|
Table of
Contents
|
Compensation Discussion and
Analysis |
|
|
|
|
Option Awards |
|
Stock Awards |
Name |
|
|
|
Number
of Securities Underlying Unexercised Options
(#) Exercisable |
|
Number
of Securities Underlying Unexercised Options
(#) Unexercisable |
|
Option Exercise Price ($)
(1) |
|
Option Expiration Date |
|
Number of Shares or Units of
Stock That Have Not Vested (#) |
|
Market Value of Shares or Units of Stock That
Have Not Vested ($) (2) |
|
Equity Incentive Plan Awards: Number
of Unearned Shares, Units or Other Rights That Have
Not Vested (#) |
|
Equity Incentive Plan Awards: Market or Payout
Value of Unearned Shares, Units or Other Rights That Have
Not Vested ($) (2) |
W.
Howard |
|
(9) |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
26,130 |
(10) |
|
$ 563,624 |
(11) |
Upchurch |
|
(3) |
|
|
|
|
|
|
|
|
|
26,130 |
|
563,624 |
|
|
|
|
|
|
|
|
(4) |
|
|
|
|
|
|
|
|
|
19,841 |
|
427,970 |
|
|
|
|
|
|
|
|
(5) |
|
|
|
|
|
|
|
|
|
10,012 |
|
215,959 |
|
|
|
|
|
|
|
|
(6) |
|
|
|
|
|
|
|
|
|
20,256 |
|
436,922 |
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
|
|
|
5,744 |
|
123,898 |
|
|
|
|
|
|
|
|
(8) |
|
36,036 |
|
|
|
6.79 |
|
12/6/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
(13) |
|
69,152 |
|
|
|
6.09 |
|
12/8/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
(14) |
|
105,456 |
|
|
|
3.57 |
|
12/9/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
(15) |
|
140,424 |
|
|
|
6.28 |
|
2/4/2018 |
|
|
|
|
|
|
|
|
|
|
Michael E.
Faircloth |
|
(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
24,022 |
(10) |
|
518,155 |
(11) |
|
|
(3) |
|
|
|
|
|
|
|
|
|
24,022 |
|
518,155 |
|
|
|
|
|
|
|
|
(4) |
|
|
|
|
|
|
|
|
|
19,199 |
|
414,122 |
|
|
|
|
|
|
|
|
(5) |
|
|
|
|
|
|
|
|
|
9,688 |
|
208,970 |
|
|
|
|
|
|
|
|
(6) |
|
|
|
|
|
|
|
|
|
15,326 |
|
330,582 |
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
|
|
|
4,348 |
|
93,786 |
|
|
|
|
|
|
|
|
(16) |
|
|
|
|
|
|
|
|
|
9,124 |
|
196,805 |
|
|
|
|
|
|
|
|
(8) |
|
6,132 |
|
|
|
6.79 |
|
12/6/2020 |
|
|
|
|
|
|
|
|
|
|
(1) |
|
The
exercise price of the stock options is 100% of the fair market value of
our common stock on the date of grant, as adjusted to reflect our
four-for-one stock split on March 3, 2015. |
(2) |
|
Calculated
by multiplying $21.57, the closing market price of our common stock on
December 30, 2016, by the number of restricted stock units or performance
shares which have not vested. |
(3) |
|
This award
was granted on December 13, 2016 and is the portion of the 2017 LTIP award
that consists of restricted stock units. The restricted stock units vest
33%, 33% and 34% on the first anniversary, the second anniversary and the
third anniversary, respectively, of the date of grant. |
(4) |
|
This award
was granted on December 8, 2015 and is the portion of the 2016 LTIP award
that consists of performance shares. This award will vest on the third
anniversary of the grant date. |
(5) |
|
This award
was granted on December 8, 2015 and is the portion of the 2016 LTIP award
that consists of restricted stock units. The restricted stock units vest
33%, 33% and 34% on the first anniversary, the second anniversary and the
third anniversary, respectively, of the date of grant. |
(6) |
|
This award
was granted on December 9, 2014 and is the portion of the 2015 LTIP award
that consists of performance shares. This award will vest on the third
anniversary of the grant date. |
(7) |
|
This award
was granted on December 9, 2014 and is the portion of the 2015 LTIP award
that consists of restricted stock units. The restricted stock units vest
33%, 33% and 34% on the first anniversary, the second anniversary and the
third anniversary, respectively, of the date of grant. |
(8) |
|
These
stock options were granted on December 6, 2010. The stock options vested
33%, 33% and 34% on the first anniversary, the second anniversary and the
third anniversary, respectively, of the date of grant and expire on the
tenth anniversary of the date of grant. |
(9) |
|
This award
was granted on December 13, 2016 and is the portion of the 2017 LTIP award
that consists of performance shares. This award will vest on the third
anniversary of the grant date, and the number of shares of common stock
that will vest will range from 0% to 200% of the number of units granted
based on the Companys achievement of certain performance targets for its
2017 fiscal year discussed on page 44. |
(10) |
|
Represents
the number of shares of our common stock that can be issued on the vesting
date, based on the Companys achievement of certain performance metrics
for its 2017 fiscal year discussed on page 44, assuming achievement of the
target level of performance. The ranges of shares that can be issued at
the vesting date, based on actual performance is from 0 shares to 248,914
shares for Mr. Evans, 69,566 shares for Mr. Moss, 47,044 shares for Ms. Johnson, 52,260 shares for Mr.
Upchurch and 48,044 shares for Mr.
Faircloth. |
|
Table of
Contents
Compensation Discussion and Analysis |
|
(11) |
|
Calculated
by multiplying $21.57, the closing market price of our common stock on
December 30, 2016, by the number of performance shares granted, assuming
achievement at the target level of performance. The market value of the
shares of our common stock that can be issued on the vesting date, based
on the Companys achievement of certain performance targets for its 2017
fiscal year discussed on page 44, ranges from $0 (if the minimum number of
shares, 0 shares, were to be received) to $5,725,022 for Mr. Evans,
$1,600,018 for Mr. Moss, $1,082,012 for Ms.
Johnson, $1,201,980 for Mr. Upchurch and $1,105,012 for Mr. Faircloth (if the maximum number of shares
were to be received). |
(12) |
|
This award
was granted on June 10, 2016. The restricted stock units vest 33%, 33% and
34% on the first anniversary, the second anniversary and the third
anniversary, respectively, of the date of grant. |
(13) |
|
These
stock options were granted on December 8, 2009. The stock options vested
33%, 33% and 34% on the first anniversary, the second anniversary and the
third anniversary, respectively, of the date of grant and expire on the
tenth anniversary of the date of grant. |
(14) |
|
These
stock options were granted on December 9, 2008. The stock options vested
33%, 33% and 34% on the first anniversary, the second anniversary and the
third anniversary, respectively, of the date of grant and expire on the
tenth anniversary of the date of grant. |
(15) |
|
These
stock options were granted on February 4, 2008. The stock options vested
33%, 33% and 34% on the first anniversary, the second anniversary and the
third anniversary, respectively, of the date of grant and expire on the
tenth anniversary of the date of grant. |
(16) |
|
This award
was granted on December 9, 2014. The restricted stock units vest on the
third anniversary of the date of grant. |
Option Exercises and Stock
Vested
The following
table sets forth certain information with respect to options exercised and stock
awards vested during our 2016 fiscal year with respect to the named executive
officers.
Option Exercises and Stock Vested in 2016
|
|
Option Awards |
|
Stock Awards |
Name |
|
Number of Shares Acquired
on Exercise (#) |
|
Value Realized Upon
Exercise ($) |
|
Number of Shares Acquired
on Vesting (#) |
|
Value Realized on
Vesting ($) |
Richard A.
Noll |
|
|
|
$ |
|
426,011 |
|
$ 9,755,215 |
(1) |
Gerald W.
Evans, Jr. |
|
|
|
|
|
157,013 |
|
3,618,747 |
|
Richard D.
Moss |
|
|
|
|
|
87,386 |
|
2,001,062 |
(2) |
Joia M.
Johnson |
|
45,464 |
|
941,332 |
|
65,449 |
|
1,498,731 |
|
W. Howard
Upchurch |
|
|
|
|
|
65,383 |
|
1,497,221 |
|
Michael E.
Faircloth |
|
|
|
|
|
52,887 |
|
1,211,065 |
(3) |
(1) |
|
Of the
shares of common stock reflected in the table for Mr. Noll, 135,451 shares
with an aggregate value received on vesting of $3,101,391 were deferred
into the HBI Stock Fund in the Executive Deferred Compensation Plan.
Balances in this account are settled on a share-for-share basis of our
common stock at the time specified by the executive at the time of the
deferral election, which in no case shall be prior to the January 1
following the first anniversary of the date the deferral election is
made. |
(2) |
|
Of the
shares of common stock reflected in the table for Mr. Moss, 11,376 shares
with an aggregate value received on vesting of $260,510 were deferred into
the HBI Stock Fund in the Executive Deferred Compensation Plan. Balances
in this account are settled on a share-for-share basis of our common
stock at the time specified by the executive at the time of the deferral
election, which in no case shall be prior to the January 1 following the
first anniversary of the date the deferral election is made. |
(3) |
|
Of the
shares of common stock reflected in the table for Mr. Faircloth, 6,924
shares with an aggregate value received on vesting of $158,560 were
deferred into the HBI Stock Fund in the Executive Deferred Compensation
Plan. Balances in this account are settled on a share-for-share basis of
our common stock at the time specified by the executive at the time of the
deferral election, which in no case shall be prior to the January 1
following the first anniversary of the date the deferral election is
made. |
|
Table of
Contents
|
Compensation Discussion and Analysis |
Pension Benefits
Certain of our executive officers participate in
the Pension Plan and the SERP. The Pension Plan is a frozen, defined benefit
pension plan, intended to be qualified under Section 401(a) of the Internal
Revenue Code, that provides the benefits that had accrued for our employees,
including certain of our named executive officers, as of December 31, 2005 under
a plan maintained by our former parent company prior to our becoming an
independent public company. A participants total benefit payable pursuant to
the Pension Plan consists of two parts: a pension benefit and a retirement
benefit. Different optional forms of payment are available for each benefit. The
Defined Benefit Component of the SERP is an unfunded deferred compensation plan
that, in part, will provide the nonqualified supplemental pension benefits that
had accrued for certain of our employees, including certain of our named
executive officers, under a plan maintained by our former parent
company.
Normal retirement age is age
65 for purposes of both the Pension Plan and the Defined Benefit Component of
the SERP. The normal form of benefits under the Pension Plan is a life annuity
for single participants and a qualified joint and survivor annuity for married
participants. The normal form of benefits under the SERP is a lump sum. Other
than Mr. Noll and Mr. Evans, none of our named executive officers is currently
eligible for early retirement under the Pension Plan or the SERP. With respect
to the Defined Benefit Component of the SERP and the pension benefit under the
Pension Plan, participants who have attained at least age 55 and completed at
least 10 years of service are eligible for unreduced benefits at age 62, or
benefits reduced by 5/12 of one percent thereof for each month by which the date
of commencement of such benefit precedes the first day of the month coincident
with or immediately following the day on which the participant attains age 62.
With respect to the retirement benefit under the Pension Plan, participants who
have attained at least age 55 and completed at least 10 years of service are
eligible for unreduced benefits at age 65, or benefits reduced by 6% per year
from age 65 and 4% per year from age 60. The only named executive officers to
have any portion of their Pension Plan benefit determined under the retirement
benefit are Mr. Evans and Mr. Upchurch.
At the end of 2008, we
provided all active participants in the SERP with an election to receive the
accrued Defined Benefit Component of their SERP
benefit in the form of a lump sum payment in 2009 or 2010. We offered this
election as part of the required changes mandated by Section 409A, and eligible
participants could make this election in addition to or instead of any election
with respect to the Defined Contribution Component of the SERP. The value of the
lump sum payment with respect to the Defined Benefit Component of the SERP was
calculated based on the participants age 65 SERP Defined Benefit Component
benefit and an interest rate of 5.25%. The lump sum amounts do not include the
value of any early retirement subsidies and accordingly may be significantly
less valuable than the amount the participant could have received if the
participant had been eligible for early retirement (at least age 55 with 10
years of service) when the participants employment with us terminates. Any SERP
participant who elected to receive this lump sum payment will not be entitled to
any additional payments with respect to the Defined Benefit Component of the
SERP. Mr. Noll and Mr. Upchurch elected to receive a lump sum payment in 2009;
none of the other executive officers elected to receive a lump sum payment from
the Defined Benefit Component of the SERP.
The following table sets forth
certain information with respect to the value of pension benefits accumulated by
our named executive officers at the end of 2016.
Pension Benefits 2016
Name |
Plan Name |
|
Number of Years Credited
Service (#) |
|
Present Value
of Accumulated Benefit ($) (1) |
|
Payments During Last Fiscal
Year ($) |
Richard A.
Noll |
Pension Plan |
|
13.75 |
|
$ 570,271 |
|
$ |
Gerald W. Evans,
Jr. |
Pension Plan |
|
22.50 |
|
588,875 |
|
|
|
SERP |
|
22.50 |
|
1,185,831 |
|
|
Richard D.
Moss (2) |
|
|
|
|
|
|
|
Joia M.
Johnson (2) |
|
|
|
|
|
|
|
W. Howard
Upchurch |
Pension Plan |
|
18.33 |
|
315,297 |
|
|
Michael E.
Faircloth |
Pension Plan |
|
8.58 |
|
136,863 |
|
|
(1) |
|
Present
values for the Pension Plan are computed as of December 31, 2016, using a
discount rate of 4.31% and healthy mortality table (the RP-2014 Employee
and Healthy Annuitant Table Projected Generationally with Scale MP-2016).
For the pension benefit, we assume 40% of males elect a single life
annuity and 60% select a 50% joint and survivor annuity, and that 65% of
females elect a single life annuity and 35% select a 50% joint and
survivor annuity. For the retirement benefit, we assume that 70% of males
elect a six-year certain only |
|
Table of Contents
Compensation Discussion and Analysis |
|
|
|
annuity, 12% select a
single life annuity and 18% select a 50% joint and survivor annuity, and
that 70% of females elect a six-year certain only annuity, 19.5% select a
single life annuity and 10.5% select a 50% joint and survivor annuity.
When calculating the six-year certain only annuity, a 2.9% interest rate
and the mortality prescribed under Revenue Ruling 2001-62 is assumed for
converting the single life annuity benefit to an actuarial equivalent
six-year certain only annuity. If a participant has both a pension benefit
and a retirement benefit, the payment form assumption is applied to each
benefit amount separately, in all cases assuming the participant commences
each portion of the benefit at the earliest unreduced age. Benefits under
the Defined Benefit Component of the SERP are payable as a lump sum, which
lump sum has been computed using the SERPs interest rate of 3.5% (120% of
the November 30-year Treasury rate for each year, rounded to the nearest
1/4%) and the mortality prescribed under Revenue Ruling 2001-62. Present
values as of December 31, 2016 of the SERP lump sum are determined using a
discount rate of 3.86%. For both the Pension Plan and the SERP, we also
used the following assumptions: (i) the portion of the benefit that is
payable as an unreduced benefit at age 62, the earliest unreduced
commencement age under the Pension Plan for the pension benefit and the
SERP, was valued at age 62 assuming the officer continues to work until
that age in order to become eligible for unreduced benefits, (ii) the
portion of the benefit that is payable as an unreduced benefit at age 65,
the earliest unreduced commencement age under the Pension Plan for the
retirement benefit, was valued at age 65 assuming the officer survives
until that age in order to become eligible to receive the retirement
benefit unreduced and (iii) the values of the benefits have been
discounted assuming the officer continues to live until the assumed
benefit commencement age (no mortality discount has been applied). All of
the foregoing assumptions, except for the assumption that the officer
lives and works until retirement, which we have used in light of SEC
rules, are the same as those we use for financial reporting purposes under
generally accepted accounting principles. |
(2) |
|
Mr. Moss and Ms. Johnson do not have any pension benefits
because they were not eligible to accrue benefits prior to December 31,
2005. |
Nonqualified Deferred
Compensation
Under the Executive Deferred
Compensation Plan, a group of approximately 250 employees, generally at the
director level and above, including our named executive officers, may defer
receipt of cash and equity compensation. The amount of compensation that may be
deferred is determined in accordance with the Executive Deferred Compensation
Plan based on elections by each participant. Amounts deferred under the
Executive Deferred Compensation Plan may, at the election of the executive, (i)
earn a fixed rate of interest, which was 2.17% for 2016; (ii) be deemed to be
invested in a stock equivalent account (the HBI Stock Fund) and earn a return
based on the total shareholder return of Hanesbrands stock; or (iii) be deemed
to be invested in one of a number of other investment funds designated by us
from time to time. The amount payable to participants will be payable either on
the withdrawal date elected by the participant or upon the occurrence of certain
events as provided under the Executive Deferred Compensation Plan. A participant
may designate one or more beneficiaries to receive any portion of the
obligations payable in the event of death; however, neither participants nor
their beneficiaries may transfer any right or interest in the Executive Deferred
Compensation Plan.
The following table sets forth
certain information with respect to contributions to and withdrawals from the
Executive Deferred Compensation Plan by our named executive officers during our
2016 fiscal year, and the aggregate balance at fiscal year-end.
Nonqualified Deferred Compensation
2016
Name |
|
Plan |
|
Executive Contributions in Last
FY ($) (1) |
|
Registrant Contributions in Last
FY ($) |
|
Aggregate Earnings in Last
FY ($) (2) |
|
|
Aggregate Withdrawals/ Distributions ($) |
|
Aggregate Balance at Last
FYE ($) |
Richard A. Noll |
|
Executive Deferred |
|
$ 3,101,391 |
|
$ |
|
$ (1,836,240 |
) |
|
$ 1,173,169 |
|
$ 15,062,505 |
|
|
Compensation
Plan |
|
|
|
|
|
|
|
|
|
|
|
Gerald W. Evans,
Jr. |
|
Executive Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
Plan |
|
|
|
|
|
|
|
|
|
|
|
Richard D. Moss |
|
Executive Deferred |
|
260,510 |
|
|
|
(920,262 |
) |
|
|
|
2,895,361 |
|
|
Compensation
Plan |
|
|
|
|
|
|
|
|
|
|
|
Joia M. Johnson |
|
Executive Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
Plan |
|
|
|
|
|
|
|
|
|
|
|
W. Howard
Upchurch |
|
Executive Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
Plan |
|
|
|
|
|
|
|
|
|
|
|
Michael E.
Faircloth |
|
Executive Deferred |
|
158,560 |
|
|
|
(110,560 |
) |
|
|
|
446,081 |
|
|
Compensation
Plan |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents shares of common stock that
vested during 2016 and were deferred into the HBI Stock Fund under the
plan. |
(2) |
|
No portion of these earnings were included
in the Summary Compensation Table because the Executive Deferred
Compensation Plan does not provide for above-market or preferential
earnings as defined in applicable SEC
rules. |
Table of Contents
|
Compensation Discussion and Analysis |
Potential Payments upon
Termination or Change in Control
The termination benefits
provided to our named executive officers, upon their voluntary termination of
employment, or termination due to death or total and permanent disability, do
not discriminate in scope, terms or operation in favor of these officers
compared to the benefits offered to all salaried employees. The following
describes the potential payments to these officers upon an involuntary severance
or a termination of employment in connection with a change in control. The
information presented in this section is computed assuming that the triggering
event took place on December 30, 2016, the last business day of our 2016 fiscal
year, and that the value of a share of our common stock is $21.57, the closing
price per share of our common stock on December 30, 2016.
Termination or Change-in-Control
Payments
|
|
|
|
Voluntary Termination |
|
Involuntary Termination |
|
|
|
|
Resignation (1) |
|
Retirement (1) |
|
For
Cause (1) |
|
Not
For Cause |
|
Change in Control |
Richard A.
Noll |
|
Severance |
|
$ |
|
$ |
|
$ |
|
$ 2,400,000 |
|
(2) |
|
$ 11,924,550 |
|
(3) |
|
|
LTIP |
|
|
|
|
|
|
|
|
|
|
|
11,811,408 |
|
(4) |
|
|
Benefits and
perquisites |
|
|
|
|
|
|
|
39,224 |
|
(5) |
|
614,493 |
|
(6) |
|
|
Tax
gross-up/reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
Total |
|
|
|
|
|
|
|
2,439,224 |
|
|
|
24,350,451 |
|
|
Gerald W. Evans,
Jr. |
|
Severance |
|
|
|
|
|
|
|
1,825,000 |
|
(2) |
|
6,290,156 |
|
(3) |
|
|
LTIP |
|
|
|
|
|
|
|
|
|
|
|
9,005,151 |
|
(4) |
|
|
Benefits and
perquisites |
|
|
|
|
|
|
|
60,493 |
|
(5) |
|
461,894 |
|
(6) |
|
|
Tax
gross-up/reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
Total |
|
|
|
|
|
|
|
1,885,493 |
|
|
|
15,757,202 |
|
|
Richard D.
Moss |
|
Severance |
|
|
|
|
|
|
|
958,333 |
|
(2) |
|
2,978,883 |
|
(3) |
|
|
LTIP |
|
|
|
|
|
|
|
|
|
|
|
3,267,920 |
|
(4) |
|
|
Benefits and
perquisites |
|
|
|
|
|
|
|
33,454 |
|
(5) |
|
215,979 |
|
(6) |
|
|
Tax
gross-up/reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
Total |
|
|
|
|
|
|
|
991,787 |
|
|
|
6,462,782 |
|
|
Joia M.
Johnson |
|
Severance |
|
|
|
|
|
|
|
772,500 |
|
(2) |
|
2,419,119 |
|
(3) |
|
|
LTIP |
|
|
|
|
|
|
|
|
|
|
|
2,428,609 |
|
(4) |
|
|
Benefits and
perquisites |
|
|
|
|
|
|
|
20,174 |
|
(5) |
|
137,510 |
|
(6) |
|
|
Tax
gross-up/reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
Total |
|
|
|
|
|
|
|
792,674 |
|
|
|
4,985,239 |
|
|
W. Howard
Upchurch |
|
Severance |
|
|
|
|
|
|
|
1,050,000 |
|
(2) |
|
2,349,394 |
|
(3) |
|
|
LTIP |
|
|
|
|
|
|
|
|
|
|
|
2,331,997 |
|
(4) |
|
|
Benefits and
perquisites |
|
|
|
|
|
|
|
16,143 |
|
(5) |
|
126,894 |
|
(6) |
|
|
Tax
gross-up/reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
Total |
|
|
|
|
|
|
|
1,066,143 |
|
|
|
4,808,285 |
|
|
Michael E.
Faircloth |
|
Severance |
|
|
|
|
|
|
|
1,020,000 |
|
(2) |
|
1,982,645 |
|
(3) |
|
|
LTIP |
|
|
|
|
|
|
|
|
|
|
|
2,280,575 |
|
(4) |
|
|
Benefits and
perquisites |
|
|
|
|
|
|
|
18,194 |
|
(5) |
|
153,902 |
|
(6) |
|
|
Tax
gross-up/reduction |
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
Total |
|
|
|
|
|
|
|
1,038,194 |
|
|
|
4,417,122 |
|
|
(1) |
|
A named executive
officer who is terminated by us for cause, or who voluntarily resigns
(other than at our request) or retires, will receive no severance
benefit. |
(2) |
|
If the employment of
a named executive officer is terminated by us for any reason other than
for cause, or if such an officer terminates his or her employment at our
request, we will pay that officer benefits for a period of 12 to 24 months
depending on his or her position and combined continuous length of service
with us and with our former parent company. The monthly severance benefit
that we would pay to each such officer is based on the officers base
salary (and, in limited cases, AIP amounts), divided by 12. To receive
these payments, the named executive officer must sign an agreement that
prohibits, among other things, the officer from working for our
competitors, soliciting business from our customers, attempting to hire
our employees and disclosing our confidential information. The named
executive officer also must agree to release any claims against us.
Payments terminate if the terminated named executive officer becomes
employed by one of our competitors. The terminated named executive officer
also would receive a pro-rated payment under any incentive plans
applicable to the fiscal year in which the termination occurs based on
actual full fiscal year performance. We have not estimated a value for
these incentive plan payments because the named executive officer would be
entitled to such payments if employed by us on the last day of our fiscal
year, regardless of whether termination
occurred. |
Table of Contents
Compensation Discussion and Analysis |
|
(3) |
|
Includes both involuntary Company-initiated
terminations of employment and terminations by the named executive officer
due to good reason as defined in the officers Severance Agreement. No
severance payments would be made upon a change in control if the named
executive officer continues to be employed by us. The named executive
officer receives a lump sum payment equal to two times (or three times in
the case of Mr. Noll and Mr. Evans) his or her cash compensation,
consisting of base salary, the greater of his or her current target or
average actual AIP amounts over the prior three years and the matching
contribution to the defined contribution plan in which the named executive
officer is participating (the amount of the contribution to the defined
contribution plan is reflected in Benefits and perquisites). To receive
these payments, the named executive officer must sign an agreement that
prohibits, among other things, the officer from working for our
competitors, soliciting business from our customers, attempting to hire
our employees and disclosing our confidential information. The named
executive officer also must agree to release any claims against us.
Payments terminate if the terminated named executive officer becomes
employed by one of our competitors. |
(4) |
|
Upon a change in control, as defined in the
Omnibus Incentive Plan, the treatment of outstanding awards upon the
occurrence of a change in control will be determined by the Compensation
Committee at the time such awards are granted and set forth in the
applicable award agreement. To date, all outstanding stock awards granted
under the Omnibus Incentive Plan, including those to our named executive
officers, fully vest upon a change in control regardless of whether a
termination of employment occurs. RSUs and PSAs are valued based upon the
number of unvested units multiplied by the closing price of our common
stock on December 30, 2016. |
(5) |
|
Reflects executive life insurance
continuation ($31,574 for Mr. Noll, $52,843 for Mr. Evans, $25,804 for Mr.
Moss, $12,524 for Ms. Johnson, $8,493 for Mr. Upchurch and $10,544 for Mr.
Faircloth) and outplacement services ($7,650 for each of the officers).
The terminated named executive officers eligibility to participate in our
medical and dental plans would continue for the same number of months for
which he or she is receiving severance payments. However, these continued
welfare benefits are available to all salaried employees and do not
discriminate in scope, terms or operation in favor of our named executive
officers compared to the involuntary termination benefits offered to all
salaried employees. The terminated named executive officers participation
in all other benefit plans would cease as of the date of termination of
employment. |
(6) |
|
Reflects health and welfare benefits
continuation ($203,643 for Mr. Noll, $236,744 for Mr. Evans, $107,129 for
Mr. Moss, $46,636 for Ms. Johnson, $34,404 for Mr. Upchurch and $76,249
for Mr. Faircloth) for three years, with respect to Mr. Noll and Mr. Evans, and two
years, with respect to Mr. Moss, Ms. Johnson, Mr. Upchurch and Mr.
Faircloth, scheduled company matching contributions to our defined
contribution plans calculated based on current base salary and target AIP
amounts ($403,200 for Mr. Noll, $217,500 for Mr. Evans, $101,200 for Mr.
Moss, $83,224 for Ms. Johnson, $84,840 for Mr. Upchurch and $70,003 for
Mr. Faircloth) and outplacement services ($7,650 for each of the named
executive officers). In computing the value of continued participation in
our medical, dental and executive insurance plans, we have assumed that
the current cost to us of providing these plans will increase annually at
a rate of 7%. |
(7) |
|
In the event that any payments made in
connection with a change in control would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code, we will make tax
equalization payments for Mr. Noll, Mr. Upchurch and Ms. Johnson with
respect to the officers compensation for all federal, state and local
income and excise taxes, and any penalties and interest, but only if the
total payments made in connection with a change in control exceed 330% of
such officers base amount (as determined under Section 280G(b) of the
Internal Revenue Code and which consists of the average total taxable
compensation we paid to the named executive officer for the five calendar
years ending prior to the change in control). Otherwise, the payments made
to such officer in connection with a change in control that are classified
as parachute payments will be reduced so that the value of the total
payments to such officer is one dollar ($1) less than the maximum amount
such officer may receive without becoming subject to the tax imposed by
Section 4999 of the Internal Revenue Code. Beginning in 2011, we
eliminated excise tax gross-ups with respect to new or amended severance
or change in control agreements, and as a result no such provision is
contained in the Severance Agreement for Mr. Evans, Mr. Moss or Mr.
Faircloth. |
Table of Contents
Ownership of our Stock
Share Ownership of Major
Stockholders, Management and Directors
The following table sets forth
information, as of February 14, 2017, regarding beneficial ownership by (i) each
person who is known by us to beneficially own more than 5% of our common stock,
(ii) each director, director nominee and named executive officer and (iii) all
of our directors, director nominees and executive officers as a group. The
address of each director and executive officer shown in the table below is c/o
Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North Carolina
27105.
On February 14, 2017 there
were 372,497,852 shares of our common stock outstanding.
|
|
Amount and Nature of Beneficial
Ownership |
|
Other (1) |
Name and Address of Beneficial
Owner |
|
Beneficial Ownership of Our
Common Stock (2) |
|
Percentage of Class |
|
Restricted Stock
Units |
|
Stock Equivalent Units in
SERP and Deferred Compensation Plans |
|
Total |
Vanguard Group, Inc. (3) |
|
34,803,514 |
|
9.3 |
% |
|
|
|
|
|
34,803,514 |
BlackRock, Inc. (4) |
|
22,007,336 |
|
5.9 |
|
|
|
|
|
|
22,007,336 |
Chieftain Capital Management, Inc.
(5) |
|
19,280,352 |
|
5.2 |
|
|
|
|
|
|
19,280,352 |
Gerald W. Evans, Jr. (6) |
|
1,673,011 |
|
* |
|
|
293,028 |
|
|
|
1,966,039 |
W. Howard Upchurch |
|
708,324 |
|
* |
|
|
81,983 |
|
|
|
790,307 |
Richard A. Noll |
|
638,826 |
|
* |
|
|
547,585 |
|
329,088 |
|
1,515,499 |
Joia M. Johnson (7) |
|
354,595 |
|
* |
|
|
89,070 |
|
|
|
443,665 |
Jessica T. Mathews (8) |
|
143,641 |
|
* |
|
|
5,652 |
|
31,736 |
|
181,019 |
Michael E. Faircloth |
|
141,216 |
|
* |
|
|
81,707 |
|
20,680 |
|
243,603 |
Richard D. Moss (6) |
|
122,302 |
|
* |
|
|
116,720 |
|
134,230 |
|
373,252 |
Ronald L. Nelson |
|
100,000 |
|
* |
|
|
5,652 |
|
131,383 |
|
237,035 |
Ann E. Ziegler (9) |
|
31,472 |
|
* |
|
|
5,652 |
|
87,547 |
|
124,671 |
James C. Johnson (10) |
|
24,913 |
|
* |
|
|
5,652 |
|
110,639 |
|
141,204 |
Andrew J. Schindler |
|
9,318 |
|
* |
|
|
5,652 |
|
144,530 |
|
159,500 |
Robert F. Moran |
|
9,060 |
|
* |
|
|
5,652 |
|
11,690 |
|
26,402 |
Franck J. Moison |
|
8,840 |
|
* |
|
|
5,652 |
|
|
|
14,492 |
David V. Singer |
|
7,100 |
|
* |
|
|
5,652 |
|
|
|
12,752 |
Bobby J. Griffin |
|
|
|
* |
|
|
5,652 |
|
220,143 |
|
225,795 |
All directors, director nominees and executive |
|
4,161,823 |
|
1.1 |
|
|
|
|
|
|
|
officers as a group (18 persons)
(6) (11) |
|
|
|
|
|
|
|
|
|
|
|
* |
|
Less than 1%. |
(1) |
|
While the amounts in the
Other column for restricted stock units and stock equivalent units in
our SERP and deferred compensation plans do not represent a right of the
holder to receive our common stock within 60 days, these amounts are being
disclosed because we believe they further our goal of aligning senior
management and stockholder interests. The value of the restricted stock
units fluctuates based on changes in Hanesbrands stock price. Similarly,
the value of stock equivalent units held in the SERP, the Executive
Deferred Compensation Plan and the Director Deferred Compensation Plan
fluctuates based on changes in Hanesbrands stock price. |
(2) |
|
Beneficial ownership is
determined under the rules and regulations of the SEC, which provide that
a person is deemed to beneficially own all shares of common stock that
such person has the right to acquire within 60 days. Although shares that
a person has the right to acquire within 60 days are counted for the
purposes of determining that individuals beneficial ownership, such
shares generally are not deemed to be outstanding for the purpose of
computing the beneficial ownership of any other person. Share numbers in
this column include shares of common stock subject to options exercisable
within 60 days of February 14, 2017 as follows: |
|
|
|
Name |
Number of
Options |
|
Gerald W. Evans, Jr. |
1,018,300 |
|
W. Howard Upchurch |
351,068 |
|
Richard A. Noll |
276,276 |
|
Ann E. Ziegler |
22,572 |
|
Michael E. Faircloth |
6,132 |
|
All directors, director nominees
and executive officers as a group (18 persons) |
1,674,348 |
Table of Contents
(3) |
|
Information in this
table and footnote regarding this beneficial owner is based on Amendment
No. 4 to Schedule 13G filed February 13, 2017 by The Vanguard Group, Inc.
(Vanguard) with the SEC. Vanguard may be deemed to beneficially own
34,803,514 shares of our common stock. Vanguards beneficial ownership
includes (i) 483,857 shares of our common stock beneficially owned through
Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard
and an investment manager of collective trust accounts and (ii) 277,168
shares of our common stock beneficially owned through Vanguard Investments
Australia, Ltd., a wholly-owned subsidiary of Vanguard and an investment
manager of Australian investment offerings. Vanguards address is 100
Vanguard Blvd., Malvern, Pennsylvania 19355. |
(4) |
|
Information in this
table and footnote regarding this beneficial owner is based on Amendment
No. 5 to Schedule 13G filed January 24, 2017 by BlackRock, Inc.
(BlackRock) with the SEC. BlackRock, in its capacity as a parent holding
company, may be deemed to beneficially own 22,007,336 shares of our common
stock which are held of record by certain of its subsidiaries. BlackRocks
address is 55 East 52nd Street, New York, New York 10022. |
(5) |
|
Information in this
table and footnote regarding this beneficial owner is based on Schedule
13G filed February 14, 2017 by Chieftain Capital Management, Inc.
(Chieftain) with the SEC. Chieftain may be deemed to beneficially own
19,280,352 shares of our common stock. Chieftains address is 510 Madison
Avenue, New York, New York 10022. |
(6) |
|
Includes ownership
through interests in the 401(k) Plan. |
(7) |
|
Includes 259,076
shares of common stock held by a trust. |
(8) |
|
Includes 4,192 shares
of common stock held by a trust and 15,800 shares of common stock held by
Ms. Mathews spouse. |
(9) |
|
Includes 7,600 shares
of common stock held by a trust. |
(10) |
|
Includes 24,913
shares of common stock held by a trust. |
(11) |
|
Includes Elizabeth L.
Burger, our Chief Human Resources Officer, John T. Marsh, our Group
President, Global Activewear, and M. Scott Lewis, our Chief Accounting
Officer. |
Section 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive
officers, certain of our other officers and persons who beneficially own more
than 10% of a registered class of our equity securities to file reports of
ownership and changes in ownership of these securities with the SEC. Directors,
officers and greater than 10% beneficial owners are required by applicable
regulations to furnish us with copies of all Section 16(a) forms they file. To
our knowledge, based solely on review of the copies of such reports furnished to
us and written representations that no other reports were required, during our
2016 fiscal year, all Section 16(a) filing requirements applicable to our
officers, directors and greater than 10% beneficial owners were
fulfilled.
Table of Contents
|
Questions and Answers About the Annual Meeting
and Voting |
Will I
receive a printed copy of this proxy statement?
You will not receive a printed copy of this proxy
statement or our annual report on Form 10-K in the mail unless you request a
printed copy. As permitted by the SEC, we are delivering our proxy statement and
annual report via the Internet. On March 13, 2017, we mailed to our stockholders
a notice of annual meeting and Internet availability of proxy materials
containing instructions on how to access our proxy statement and annual report
and authorize a proxy to vote their shares. If you wish to request a printed
copy of this proxy statement and our annual report, you should follow the
instructions included in the notice of annual meeting and Internet availability
of proxy materials. The notice of annual meeting and Internet availability of
proxy materials is not a proxy card or ballot.
Who is
entitled to vote at the Annual Meeting?
If you were a stockholder of Hanesbrands at the
close of business on February 14, 2017 (the Record Date), you are entitled to
notice of, and to vote at, the Annual Meeting. Each share of Hanesbrands common
stock outstanding at the close of business on the Record Date has one vote on
each matter that is properly submitted to a vote at the Annual Meeting,
including shares:
● |
held directly in your
name as the stockholder of record; or |
● |
held for you in an
account with a broker, bank or other
nominee. |
Shares held in an account with
a broker, bank or other nominee may include shares:
● |
represented by your
interest in the HBI Stock Fund in the 401(k) Plan; or |
● |
credited to your account
in the Hanesbrands Inc. Employee Stock Purchase Plan of
2006. |
On the Record Date, there were
372,497,852 shares of Hanesbrands common stock outstanding and entitled to vote
at the Annual Meeting. Common stock is the only outstanding class of voting
securities of Hanesbrands.
Who may
attend the Annual Meeting?
Only stockholders who owned
shares of Hanesbrands common stock as of the close of business on the Record
Date will be entitled to attend the Annual Meeting. An admission ticket (or
other proof of stock ownership) and some form of government-issued photo
identification (such as a valid drivers license or passport) will be required
for admission to the Annual Meeting.
● |
If your shares of
Hanesbrands common stock are registered in your name and you requested and
received your proxy materials by mail, an admission ticket is attached to
your proxy card. Your admission ticket will serve as verification of your
ownership. |
● |
If your shares of
Hanesbrands common stock are registered in your name and you received your
proxy materials electronically, your notice of annual meeting and Internet
availability of proxy materials will serve as your admission ticket and as
verification of your ownership. |
● |
If your shares of
Hanesbrands common stock are held in a bank or brokerage account or by
another nominee and you wish to attend the Annual Meeting and vote your
shares in person, contact your bank, broker or other nominee to obtain a
written legal proxy in order to vote your shares at the Annual Meeting. If
you do not obtain a legal proxy from your bank, broker or other nominee,
you will not be entitled to vote your shares of Hanesbrands common stock
in person at the Annual Meeting, but you may still attend the Annual
Meeting if you bring a recent bank or brokerage statement or similar
evidence of ownership showing that you owned the shares on the Record
Date. |
No cameras, recording devices
or large packages will be permitted in the meeting room. Bags will be subject to
a search.
Table of Contents
Questions and Answers About the Annual Meeting and
Voting |
|
How many shares of Hanesbrands
common stock must be present to hold the Annual Meeting?
The presence, in person or by
proxy, of stockholders entitled to cast a majority of all the votes entitled to
be cast at the Annual Meeting constitutes a quorum for the transaction of
business. Your shares of Hanesbrands common stock are counted as present at the
Annual Meeting if:
● |
you are present in
person at the Annual Meeting and your shares are registered in your name
or you have a proxy from your bank, broker or other nominee to vote your
shares; or |
● |
you have properly
executed and submitted a proxy card, or authorized a proxy over the
telephone or the Internet, prior to the Annual
Meeting. |
Abstentions and broker
non-votes are counted for purposes of determining whether a quorum is present at
the Annual Meeting.
If a quorum is not present
when the Annual Meeting is convened, the Annual Meeting may be adjourned by the
chairman of the meeting.
What are broker
non-votes?
If you have shares of
Hanesbrands common stock that are held by a broker, you may give the broker
voting instructions, and the broker must vote as you direct. If you do not give
the broker any instructions, the broker may vote at its discretion on all
routine matters (such as the ratification of our independent registered public
accounting firm). For non-routine matters (such as the election of directors,
the advisory vote regarding executive compensation and the advisory vote
regarding the frequency of future advisory votes regarding executive
compensation) however, the broker may not vote using its discretion. A brokers
failure to vote on a matter under these circumstances is referred to as a broker
non-vote.
How many votes are required to
approve each proposal?
● |
The election of
directors will be determined by a majority of the votes cast at the Annual
Meeting. Accordingly, each of the ten nominees for director will be
elected if he or she receives a majority of the votes cast in person or
represented by proxy, with respect to that director. A majority of the
votes cast means that the number of shares voted FOR a director must
exceed the number of shares voted AGAINST that director. Abstentions and
broker non-votes, if any, are not treated as votes cast, and therefore
will have no effect on the proposal to elect directors. Additionally,
pursuant to our Corporate Governance Guidelines, if in an uncontested
election for director a nominee for director does not receive the
affirmative vote of a majority of the total votes cast for and against
such nominee, the nominee will offer, following certification of the
election results, to submit his or her resignation to the Board for
consideration. Stockholders cannot cumulate votes in the election of
directors. |
● |
The ratification of the
appointment of PricewaterhouseCoopers as Hanesbrands independent
registered public accounting firm for our 2017 fiscal year requires the
votes cast in favor of the proposal to exceed the votes cast against the
proposal. Abstentions are not treated as votes cast, and therefore will
have no effect on the proposal. |
● |
The approval, on an
advisory basis, of the compensation of our named executive officers as
disclosed in this proxy statement requires the votes cast in favor of the
proposal to exceed the votes cast against the proposal. Abstentions and
broker non-votes are not treated as votes cast, and therefore will have no
effect on the proposal. |
● |
The recommendation, on
an advisory basis, of the frequency of future advisory votes regarding
executive compensation generally requires the favorable vote of a majority
of the votes cast by the holders of the shares of Hanesbrands common stock
voting in person or by proxy at the meeting. However, because the vote on
the frequency of future advisory votes on executive compensation is not
binding on the Board of Directors or the Company, if none of the frequency
options one year, two years or three years receives the required
majority vote, the option receiving the greatest number of votes will be
considered the frequency preferred by the stockholders. Abstentions and
broker non-votes are not treated as votes cast, and therefore will have no
effect on the proposal. |
How do I vote?
You may vote in person at the
Annual Meeting or you may authorize a proxy to vote on your behalf. There are
three ways to authorize a proxy:
Internet: By accessing the Internet at www.proxyvote.com and following the instructions on the proxy card
or in the notice of annual meeting and Internet availability of proxy
materials.
Table of Contents
|
Questions and Answers About the Annual Meeting and
Voting |
Telephone: By calling toll-free 1-800-690-6903 and following
the instructions on the proxy card or in the notice of annual meeting and
Internet availability of proxy materials.
Mail: If you requested and received your proxy
materials by mail, by signing, dating and mailing the enclosed proxy
card.
If you authorize a proxy to
vote your shares over the Internet or by telephone, you should not
return your proxy card. The notice of annual meeting and Internet availability
of proxy materials is not a proxy card or
ballot.
Each share of Hanesbrands
common stock represented by a proxy properly authorized over the Internet or by
telephone or by a properly completed written proxy will be voted at the Annual
Meeting in accordance with the stockholders instructions specified in the
proxy, unless such proxy has been revoked. If no instructions are specified,
such shares will be voted FOR the election of each
of the nominees for director, FOR ratification of the
appointment of PricewaterhouseCoopers as Hanesbrands independent registered
public accounting firm for our 2017 fiscal year, FOR
approval of executive compensation, for a vote on executive compensation
EVERY YEAR, and in the discretion of the proxy holder on any
other business that may properly come before the Annual Meeting.
If you participate in the
401(k) Plan and have contributions invested in the HBI Stock Fund in the 401(k)
Plan as of the close of business on the Record Date, you will receive a proxy
card (or a notice of annual meeting and Internet availability of proxy materials
containing instructions on how to authorize a proxy to vote your shares), which
will serve as voting instructions for the trustee of the 401(k) Plan. You must
return your proxy card to Broadridge Financial Solutions, Inc. (Broadridge) or
authorize a proxy to vote your shares over the Internet or by telephone on or
prior to April 20, 2017. If you have not authorized a proxy to vote your shares
over the Internet or by telephone or if your proxy card is not received by
Broadridge by that date, or if you sign and return your proxy card without
instructions marked in the boxes, the trustee of the 401(k) Plan will vote
shares attributable to your investment in the HBI Stock Fund in the 401(k) Plan
in the same proportion as other shares held in the HBI Stock Fund for which the
trustee received timely instructions. If no participants vote their shares, then
the trustee will not vote any of the shares in the 401(k) Plan.
How can I revoke a previously
submitted proxy?
You may revoke (cancel) a
proxy at any time before the Annual Meeting by (i) giving written notice of
revocation to the Corporate Secretary of Hanesbrands with a date later than the
date of the previously submitted proxy, (ii) properly authorizing a new proxy
with a later date by mail, Internet or telephone or (iii) attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting will not, by
itself, constitute revocation of a proxy. Any notice of revocation should be
sent to: Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North
Carolina 27105, Attention: Corporate Secretary.
What does it mean if I receive
more than one notice of annual meeting and Internet availability of proxy
materials?
If you receive more than one
notice of annual meeting and Internet availability of proxy materials, it means
your shares of Hanesbrands common stock are not all registered in the same way
(for example, some are registered in your name and others are registered jointly
with your spouse) or are in more than one account. In order to ensure that you
vote all of the shares that you are entitled to vote, you should authorize a
proxy to vote utilizing all proxy cards or Internet or telephone proxy
authorizations to which you are provided access.
How is the vote
tabulated?
Hanesbrands has a policy that
all proxies, ballots and votes tabulated at a meeting of stockholders are
confidential, and the votes will not be revealed to any Hanesbrands employee or
anyone else, other than to the non-employee tabulator of votes or an independent
election inspector, except (i) as necessary to meet applicable legal
requirements or (ii) in the event a proxy solicitation in opposition to the
election of the Board or in opposition to any other proposal to be voted on is
filed with the SEC. Broadridge will tabulate votes for the Annual Meeting and
will provide an independent election inspector for the Annual
Meeting.
IMPORTANT NOTICE REGARDING
THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO
BE HELD ON APRIL 25, 2017
The notice of annual meeting,
proxy statement and annual report on Form 10-K for the fiscal year ended
December 31, 2016 are available at: www.proxyvote.com.
Table of Contents
Other Information About
Hanesbrands
We will provide without
charge to each person solicited pursuant to this proxy statement, upon the
written request of any such person, a copy of our annual report on Form 10-K for
the fiscal year ended December 31, 2016, including the financial statements and
the financial statement schedules required to be filed with the SEC, or any
exhibit to that annual report on Form 10-K. Requests should be in writing and
directed to Hanesbrands Inc., 1000 East Hanes Mill Road, Winston-Salem, North
Carolina 27105, Attention: Corporate Secretary. By referring to our website, www.Hanes.com/investors, we do not incorporate our website or its
contents into this proxy statement.
Matters Raised at the Annual Meeting
not Included in this Proxy Statement
We do not know of any matters
to be acted upon at the Annual Meeting other than those discussed in this proxy
statement. If any other matter is properly presented at the Annual Meeting,
proxy holders will vote on the matter in their discretion.
Solicitation Costs
We will pay the cost of
soliciting proxies for the Annual Meeting, including the cost of mailing. The
solicitation is being made by mail and may also be made by telephone or in
person using the services of a number of regular employees of Hanesbrands at
nominal cost. We will reimburse banks, brokerage firms and other custodians,
nominees and fiduciaries for expenses incurred in sending proxy materials to
beneficial owners of shares of Hanesbrands common stock. We have engaged D.F.
King & Co., Inc. to solicit proxies and to assist with the distribution of
proxy materials for a fee of $8,000 plus reasonable out-of-pocket
expenses.
Householding
Stockholders residing in the
same household who hold their stock through a bank or broker may receive only
one notice of annual meeting and Internet availability of proxy materials (or
proxy statement, for those who receive a printed copy of the proxy statement) in
accordance with a notice sent earlier by their bank or broker. This practice of
sending only one copy of proxy materials is called householding, and saves us
money in printing and distribution costs. This practice will continue unless
instructions to the contrary are received by your bank or broker from one or
more of the stockholders within the household.
If you hold your shares in
street name and reside in a household that received only one copy of the proxy
materials, you can request to receive a separate copy in the future by following
the instructions sent by your bank or broker. If your household is receiving
multiple copies of the proxy materials, you may request that only a single set
of materials be sent by following the instructions sent by your bank or
broker.
Table of Contents
Stockholder Proposals and Director
Nominations for Next Annual Meeting
If you want to make a proposal
for consideration at next years annual meeting and have it included in our
proxy materials, Hanesbrands must receive your proposal no later than the 120th
day prior to the anniversary of the date of these proxy materials, November 13,
2017, and the proposal must comply with the rules of the SEC.
If you want to make a proposal
or nominate a director for consideration at next years annual meeting without
having the proposal included in our proxy materials, you must comply with the
then current advance notice provisions and other requirements set forth in our
bylaws, which are filed with the SEC. Under our current bylaws, a stockholder
may nominate a director or submit a proposal for consideration at an annual
meeting by giving adequate notice to our Corporate Secretary. To be adequate,
that notice must contain information specified in our bylaws and be received by
us not earlier than the 150th day nor later than 5:00 p.m., Eastern time, on the
120th day prior to the first anniversary of the date of the proxy statement for
the preceding years annual meeting. If, however, the date of the annual meeting
is advanced or delayed by more than 30 days from the first anniversary of the
date of the preceding years annual meeting, notice by the stockholder to be
timely must be so delivered not earlier than the 150th day prior to the date of
such annual meeting and not later than 5:00 p.m., Eastern time, on the later of
the 120th day prior to the date of such annual meeting or the tenth day
following the day on which public announcement of the date of such meeting is
first made. Therefore, Hanesbrands must receive your nomination or proposal on
or after October 14, 2017 and prior to 5:00 p.m., Eastern time, on November 13,
2017 unless the date of the annual meeting is advanced or delayed by more than
30 days from the anniversary date of the 2017 Annual Meeting.
If Hanesbrands does not
receive your proposal or nomination by the appropriate deadline, then it may not
be brought before the 2018 Annual Meeting of Stockholders even if it meets the
other proposal or nomination requirements. The fact that we may not insist upon
compliance with these requirements should not be construed as a waiver of our
right to do so at any time in the future.
You should address your
proposals or nominations to Hanesbrands Inc., 1000 East Hanes Mill Road,
Winston-Salem, North Carolina 27105, Attention: Corporate Secretary.
By Order of the Board of
Directors HANESBRANDS INC. |
|
Joia M. Johnson |
Chief Administrative Officer, General
Counsel and Corporate Secretary |
March 13, 2017
Table of Contents
HANESBRANDS
INC.
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP
Measures
(Amounts in thousands, except per-share
amounts)
(Unaudited)
|
|
Year Ended |
|
|
December 31, 2016 |
|
January 2, 2016 |
Gross profit, as reported under GAAP |
|
$ |
2,276,048 |
|
|
$ |
2,136,332 |
|
Acquisition, integration and other action related
charges |
|
|
39,379 |
|
|
|
62,859 |
|
Gross profit, as
adjusted |
|
$ |
2,315,427 |
|
|
$ |
2,199,191 |
|
As
a % of net sales |
|
|
38.4 |
% |
|
|
38.4 |
% |
|
Selling, general and administrative expenses, as reported
under GAAP |
|
$ |
1,500,399 |
|
|
$ |
1,541,214 |
|
Acquisition, integration and other action related
charges |
|
|
(99,140 |
) |
|
|
(203,201 |
) |
Selling, general
and administrative expenses, as adjusted |
|
$ |
1,401,259 |
|
|
$ |
1,338,013 |
|
As
a % of net sales |
|
|
23.2 |
% |
|
|
23.3 |
% |
|
Operating profit, as reported under GAAP |
|
$ |
775,649 |
|
|
$ |
595,118 |
|
Acquisition, integration and other action related charges
included in gross profit |
|
|
39,379 |
|
|
|
62,859 |
|
Acquisition, integration and other action related charges
included in SG&A |
|
|
99,140 |
|
|
|
203,201 |
|
Operating profit,
as adjusted |
|
$ |
914,168 |
|
|
$ |
861,178 |
|
As
a % of net sales |
|
|
15.2 |
% |
|
|
15.0 |
% |
|
Net income from continuing operations, as reported under
GAAP |
|
$ |
536,927 |
|
|
$ |
428,855 |
|
Acquisition, integration and other action related charges
included in gross profit |
|
|
39,379 |
|
|
|
62,859 |
|
Acquisition, integration and other action related charges
included in SG&A |
|
|
99,140 |
|
|
|
203,201 |
|
Debt refinance charges included in other
expenses |
|
|
47,291 |
|
|
|
|
|
Tax effect on actions |
|
|
(11,148 |
) |
|
|
(25,276 |
) |
Net income from continuing
operations, as adjusted |
|
$ |
711,589 |
|
|
$ |
669,639 |
|
|
Diluted earnings per share from continuing operations, as reported
under GAAP |
|
$ |
1.40 |
|
|
$ |
1.06 |
|
Acquisition, integration and other action related
charges |
|
|
0.45 |
|
|
|
0.60 |
|
Diluted earnings
per share from continuing operations, as adjusted |
|
$ |
1.85 |
|
|
$ |
1.66 |
|
Table of Contents
Table of Contents
1000 EAST HANES MILL ROAD
WINSTON-SALEM, NC 27105
AUTHORIZE YOUR PROXY BY INTERNET -
www.proxyvote.com
Use the Internet to
transmit your voting instructions and for electronic delivery of information up
until 11:59 p.m. Eastern time the day before the meeting date or any cut-off
date described in the proxy statement. Have your proxy card in hand when you
access the website and follow the instructions to obtain your records and to
create an electronic voting instruction form.
AUTHORIZE YOUR PROXY BY PHONE -
1-800-690-6903
Use any touch-tone
telephone to transmit your voting instructions up until 11:59 p.m. Eastern time
the day before the meeting date or any cut-off date described in the proxy
statement. Have your proxy card in hand when you call and then follow the
instructions.
AUTHORIZE YOUR PROXY BY
MAIL
Mark, sign and date your proxy card
and return it in the postage-paid envelope we have provided or return it to
Hanesbrands Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717.
ELECTRONIC DELIVERY OF
FUTURE STOCKHOLDER COMMUNICATIONS
If you would like to
reduce the costs incurred by Hanesbrands Inc. in mailing proxy materials, you
can consent to receiving all future meeting notices, proxy statements, proxy
cards and annual reports electronically via e-mail or the Internet. To sign up
for electronic delivery, please follow the instructions above to vote using the
Internet and, when prompted, indicate that you agree to receive or access proxy
materials electronically in future years.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
|
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|
|
E18033-P87295
|
|
KEEP THIS PORTION FOR YOUR RECORDS |
|
|
|
|
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
HANESBRANDS INC.
|
Vote on Directors |
|
The Board of Directors recommends that you vote FOR each of the following nominees: |
|
1. |
|
Election of Directors |
|
|
|
|
|
|
|
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Nominees: |
|
For |
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Against |
|
Abstain |
|
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1a. |
|
Gerald W. Evans, Jr.
|
|
☐ |
|
☐ |
|
☐ |
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1b. |
|
Bobby J. Griffin
|
|
☐ |
|
☐ |
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☐ |
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1c. |
|
James C. Johnson |
|
☐ |
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☐ |
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☐ |
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1d. |
|
Jessica T. Mathews |
|
☐ |
|
☐ |
|
☐ |
|
|
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1e. |
|
Franck J. Moison |
|
☐ |
|
☐ |
|
☐ |
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1f. |
|
Robert F. Moran |
|
☐ |
|
☐ |
|
☐ |
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1g. |
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Ronald L. Nelson |
|
☐ |
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☐ |
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☐ |
|
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1h. |
|
Richard A. Noll |
|
☐ |
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☐ |
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☐ |
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1i. |
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David V. Singer |
|
☐ |
|
☐ |
|
☐ |
|
|
|
1j. |
|
Ann E. Ziegler |
|
☐ |
|
☐ |
|
☐ |
|
For address changes and/or comments, please check this box and write them on the back where indicated. |
|
|
|
|
|
☐ |
|
Please indicate if you plan to attend this meeting. |
|
☐ |
|
☐ |
|
|
|
|
|
|
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|
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Yes |
|
No |
|
|
Vote on Proposals |
|
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|
|
|
|
The Board of Directors recommends that you vote FOR the following proposals: |
|
For |
|
Against |
|
Abstain |
2. |
|
To ratify the appointment of PricewaterhouseCoopers LLP as Hanesbrands' independent registered public accounting firm for Hanesbrands' 2017 fiscal year |
|
☐ |
|
☐ |
|
☐ |
3. |
|
To approve, on an advisory basis, executive compensation
as described in the proxy statement for the Annual
Meeting
|
|
☐ |
|
☐ |
|
☐ |
The Board of Directors recommends
that you vote for ONE year for the following: |
|
1 Year |
|
2
Years |
|
3
Years |
|
Abstain |
4. |
|
To recommend, on an advisory basis, the frequency of
future advisory votes regarding executive compensation |
|
☐ |
|
☐ |
|
☐ |
|
☐ |
|
Please sign exactly as name appears on the records of Hanesbrands Inc. and date. If the shares are held jointly, each holder should sign. When signing as an attorney, executor, administrator, trustee, guardian, officer of a corporation or other entity or in another representative capacity, please give the full title under signature(s).
|
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Signature [PLEASE SIGN WITHIN BOX] |
Date |
|
Signature (Joint Owners) |
Date |
|
Table of Contents
ADMISSION TICKET
(Not Transferable) |
|
2017 Annual Meeting of Stockholders
2:15 p.m., Eastern time, April 25, 2017
Hanesbrands Inc.
1000 E. Hanes Mill Rd.
Winston-Salem, NC 27105
Please present this admission ticket and some form of government-issued photo identification (such as a valid driver's license or passport) in order to gain admittance to the meeting. This ticket admits only the
stockholder listed on the reverse side and is not transferable. No cameras, recording devices or large packages will be permitted in the meeting room. Bags will be subject to a search.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Hanesbrands Inc. ("Hanesbrands") will be held on Tuesday, April 25, 2017
at 2:15 p.m., Eastern
time, at Hanesbrands Inc., 1000 E. Hanes Mill Road, Winston-Salem, North Carolina 27105. Stockholders of record at the close of business on February 14, 2017 are entitled to notice of and to vote at the meeting. Stockholders will (1) elect ten
directors, (2) consider and vote on a proposal to ratify the appointment of PricewaterhouseCoopers LLP as Hanesbrands' independent registered public accounting firm for its 2017 fiscal year, (3) consider and vote on a proposal to approve, on an
advisory basis, executive compensation as described in the proxy statement for the Annual Meeting, (4) consider and vote on a proposal to recommend, on an advisory basis, the frequency of future advisory votes regarding executive compensation, and
(5) transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The notice and proxy statement and annual report are available at www.proxyvote.com.
|
|
Δ DETACH PROXY CARD HERE Δ |
|
E18034-P87295 |
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING, APRIL 25, 2017
The undersigned holder of common stock of Hanesbrands Inc., a Maryland corporation ("Hanesbrands"), hereby appoints Richard A. Noll and Joia M. Johnson, or either of them, as proxies for the undersigned, with full
power of substitution in each of them, to attend the Annual Meeting of Stockholders of Hanesbrands Inc. to be held at Hanesbrands Inc., 1000 E. Hanes Mill Road, Winston-Salem, North Carolina 27105, on April 25, 2017, at 2:15 p.m., Eastern time, and
any postponement or adjournment thereof, to cast on behalf of the undersigned all votes that the undersigned is entitled to cast at such meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned
if personally present at the meeting. The undersigned hereby acknowledges receipt of the notice of the Annual Meeting of Stockholders and of the accompanying proxy statement, the terms of each of which are incorporated by reference, and revokes any
proxy heretofore given with respect to such meeting. The votes entitled to be cast by the undersigned will be cast as instructed. If this proxy is executed, but no instruction is given, the votes entitled to
be cast by the undersigned will be cast FOR each of the nominees for director, FOR proposal 2, FOR proposal 3 and for ONE year on proposal 4, all of which are set forth on the reverse side hereof. The votes entitled to be cast by the undersigned
will be cast in the discretion of the proxy holder on any other matter that may properly come before the meeting and any adjournment or postponement thereof. The Board of Directors recommends a vote FOR each nominee for director, FOR proposal 2, FOR
proposal 3 and for ONE year on proposal 4.
|
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|
Address
Changes/Comments: |
|
|
|
|
|
|
|
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|
(If you noted any Address Changes/Comments above, please
mark corresponding box on the reverse side.) |
|
This regulatory filing also includes additional resources:
hbi_courtesy-pdf.pdf
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