SBH Sally Beauty Holdings Inc

TABLE OF CONTENTS 27 Directors’ Compensation and Benefits 28 Narrative Discussion of Director Compensation Table 29 Director Indemnification Agreements 29 No Material Proceedings 30 BENEFICIAL OWNERSHIP OF THE COMPANY’S STOCK 31 Securities Owned by Directors and Executive Officers 32 Persons Owning More than Five-percent 33 PROPOSAL 2 - ADVISORY VOTE ON EXECUTIVE COMPENSATION 34 EXECUTIVE OFFICERS 36 EXECUTIVE COMPENSATION 36 Compensation Discussion and Analysis 54 Compensation Committee Report 55 Compensation Tables 62 CEO PAY RATIO 63 PROPOSAL 3 - RATIFICATION OF SELECTION OF AUDITORS 64 Report of the Audit Committee 66 DEADLINES AND PROCEDURES FOR NOMINATIONS AND STOCKHOLDER PROPOSALS 67 QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING 70 OTHER MATTERS A-1 APPENDIX 1 NON-GAAP FINANCIAL NUMBERS RECONCILIATION www.sallybeautyholdings.com 3

2019 PROXY STATEMENT SUMMARY Proxies are being solicited by the Board of Directors of Sally Beauty Holdings, Inc. (NYSE: SBH) (“we,” “us,” or the “Corporation”) to be voted at our 2020 Annual Meeting. This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Annual Meeting of Stockholders Time and Date 9:00 a.m., January 30, 2020 Place Sally Beauty Headquarters, 3001 Colorado Boulevard, Denton, Texas 76210 Record Date December 2, 2019 Voting Stockholders as of the Record Date are entitled to notice of, and to vote at, the Annual Meeting. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. Entry If you decide to attend the meeting in person, upon your arrival you will need to register as a visitor with the security desk on the first floor of the Sally Beauty Headquarters and you must have an admission ticket or other proof of share ownership as of the Record Date along with a government-issued identification card in order to attend the meeting. On or about December 18, 2019, we will mail a Notice of Internet Availability of Proxy Materials to our stockholders of record as of the Record Date. The Notice contains instructions on how to access over the internet the Company’s Notice of Annual Meeting of Stockholders, Proxy Statement, form of proxy and Annual Report on Form 10-K for the fiscal year ended September 30, 2019 (FY19). Voting Matters Proposal Board Vote Recommendation Page Reference (for more detail) Proposal 1: Elect twelve directors FOR each Nominee 10 Proposal 2: Approve, on an advisory basis, compensation of our named executive officers FOR 33 Proposal 3: Ratify KPMG LLP as our independent registered public accounting firm for fiscal 2020 FOR 63 4 SALLYBEAUTY HOLDINGS, INC. 2019 Proxy Statement

2019 PROXY STATEMENT SUMMARY Director Nominees Twelve directors are standing for election at the 2020 Annual Meeting for one-year terms. The following table provides summary information about each of the director nominees as well as their committee memberships. The table also discloses the Board’s determination as to the independence of each nominee under the listing standards of the New York Stock Exchange (“NYSE”) and relevant rules of the Securities and Exchange Commission (“SEC”). Additional information about each nominee’s background and experience can be found beginning on page 10. To be elected, each nominee must receive more votes cast “for” such nominee’s election than votes cast “against” such nominee’s election. Name Age Director since Occupation Experience/ Qualification Independent AC CC EC MC NG/ CR Christian A. Brickman 55 September 2012 President & Chief Executive Officer, Sally Beauty Holdings, Inc. Management, International • Timothy R. Baer 59 Founder & Managing Partner, TRB Partners LLC; Former EVP, Chief Legal Officer and Corporate Secretary, Target Corporation Legal, Governance, Management ✓ Marshall E. Eisenberg 74 November 2006 Founding Partner, Neal Gerber & Eisenberg LLP Governance, Risk Management, Legal ✓ • • C Diana S. Ferguson 56 January 2019 Principal, Scarlett Investments LLC Management, Finance ✓ • Dorlisa K. Flur 54 Senior Advisor and Former Chief Strategy and Transformation Officer, Southeastern Grocers, Inc. Management, Mass Market Retail Transformation ✓ Linda Heasley 64 May 2017 Former Chief Executive Officer, J.Jill, Inc. Management, Retail ✓ • • • Robert R. McMaster 71 November 2006 Retired Executive and Independent Auditor Management, Finance, Audit ✓ C • John A. Miller 66 November 2006 President & Chief Executive Officer, North American Corporation Management, Finance ✓ • C P. Kelly Mooney 55 August 2018 Former Chief Experience Officer of IBM iX Management, Digital Marketing ✓ C • Susan R. Mulder 49 November 2014 Chief Executive Officer, Nic & Zoe Co. Management, Retail ✓ • • Denise Paulonis 47 May 2018 Executive Vice President and Chief Financial Officer, Michaels Companies Management, Finance ✓ • Edward W. Rabin 73 November 2006 Retired Executive Management ✓ C Committees: AC = Audit CC = Compensation EC = Executive MC = Marketing NG/CR = Nominating, Governance and Corporate Responsibility C = Chair of Committee If elected, the director nominees will serve until the 2021 annual meeting. The Board recommends a vote FOR each director nominee. www.sallybeautyholdings.com 5

2019 PROXY STATEMENT SUMMARY Board Nominees Snapshot Gender Diversity Board Independence 50% 6 of 12 Director Nominees are Women 92% 11 of 12 Director Nominees are Independent Age Mix SBH Board Tenure 2 5 2 3 40s 50s 60s 70s 58 years Median Age 6 2 4 0-4 yrs 5-10 yrs 11+ yrs 5.8 years Average Tenure 6 SALLYBEAUTY HOLDINGS, INC. 2019 Proxy Statement

2019 PROXY STATEMENT SUMMARY FY19 Performance SAME STORE SALES GROWTH 2.9% -0.7% -1.5% 0.3% FY16 FY17 FY18 FY19 DILUTED EARNINGS PER SHARE $1.56 $2.08 $1.50 $2.26 ADJUSTED OPERATING INCOME (1)(2) ($ in Millions) $515 $501 $468 $458 FY16 FY17 FY18 FY19 3-YEAR AVERAGE ROIC (2) 22.2% 21.3% 21.4% 21.5% FY16 FY17 FY18 FY19 FY14-16 FY15-17 FY16-18 FY17-19 (1) Please see Appendix 1 for a reconciliation of non-GAAP numbers. (2) Please see page 45 for Adjusted Operating Income definition and page 47 for 3-Year Average ROIC definition. Net Sales were $3.88 billion. Cash Flow from Operations of $320.4 million—used to fund investment in the business, reduce our debt levels by $185 million and fund the repurchase of $46.6 million of our shares. E-Commerce Sales Increased by 29.4% compared to the prior year. Gross Profit was $1.91 billion. www.sallybeautyholdings.com 7

2019 PROXY STATEMENT SUMMARY FY19 Strategic Objectives and Accomplishments Refocusing our efforts around our differentiated core of hair color and hair care Continued to build our innovation pipeline with new exciting brands. SBS: Added new brands such as vivid color lines (Good Dye Young and Arctic Fox). BSG: Added the prestigious color and care brand, Pravana, and Swedish vegan brand, Maria Nila. Launched Box Color across Sally Beauty network. Invested in marketing focused on building awareness and education of these brands. Improving retail fundamentals with targeted investments in people, processes, technology and our stores Launched new Sally Beauty Rewards Loyalty Program, with over 15.9 million active members at the end of FY19. Installed new state-of-the-art POS system in over 1,400 Sally Beauty and CosmoProf stores as of the end of FY19. Launched phase one of JDA, our new merchandising and supply chain platform. Optimized our supply chain footprint and transportation network to enhance speed and efficiency. Tested new store concepts for both Sally Beauty and BSG. Advancing our digital commerce capabilities Launched redesigned mobile-first Sally Beauty website. Launched new Sally Beauty app which allows consumers to access their Sally Beauty Rewards points and shop directly from the app. Enhanced CosmoProf app to remove friction from the buying experience for our pro customers. Continuing to drive costs out of the business and operate efficiently In FY19 we found efficiencies and savings in how we operate the business through negotiations with service providers, more streamlined operations and better sourcing. 8 SALLYBEAUTY HOLDINGS, INC. 2019 Proxy Statement

2019 PROXY STATEMENT SUMMARY FY19 Corporate Governance Highlights Board adopted a revised charter of newly-renamed “Nominating, Governance and Corporate Responsibility” (NGCR) Committee. NGCR Committee given authority to oversee corporate responsibility and ESG-related matters. Board initiated sustainability materiality assessment of the Company. Company’s ESG-related efforts are focused on three main areas where we can have a material, meaningful impact: 1) Energy / Environment—we made progress towards reducing our environmental impact by reducing energy usage and increasing energy efficiency. We initiated our SBH Going Green Program, which we hope will eliminate plastic bags in our North American stores, and reduce waste and increase recycling capabilities at our Sally Beauty Headquarters. 2) Product Development and Sourcing—we continue to make progress toward our long-term sustainability goals by using best practices in product development and sourcing. 3) Diversity and Inclusion – we continue efforts to show that diversity and inclusion are at the heart of our company: at the Board level, throughout our global workforce and in our shared commitment to serving a diverse customer base and their communities. FY19 Stockholder Outreach During FY19 we engaged with investors and sell-side analysts by hosting numerous meetings and investor calls, and attending equity conferences and non-deal roadshows. We believe that listening to investors is essential to good governance and to the long-term sustainability of our company. Our senior management is open and accessible. As such, we want to engage with and listen to our investors and sell-side analysts in order to have productive conversations in which we review our strategic objectives, operations and progress, and listen to their feedback. FY19 Executive Compensation Highlights Highlights of our Named Executive Officer compensation program, as described in the Compensation Discussion and Analysis section on page 40, include: Emphasis on performance-based compensation, with base salary being the only fixed component of direct compensation Annual long-term equity grants in the form of stock options, which provide value only to the extent our stock price increases after the date of grant Performance-based restricted stock units, which serve to reward long-term performance Time-based restricted stock units, which serve as a strong retention tool thereby aligning management with the long-term interests of our stockholders through the various equity grant vehicles Double-trigger severance benefits and no tax gross-ups Appropriate risk-management practices, including an annual review of our compensation-related risk profile, clawback and anti-hedging policies and stock ownership requirements www.sallybeautyholdings.com 9

PROPOSAL 1 - ELECTION OF DIRECTORS Our current Board of Directors consists of eleven individuals, ten of whom qualify as independent of us under the rules of the NYSE. The Board of Directors, acting pursuant to our By-laws, is proposing two new nominees (Timothy R. Baer & Dorlisa K. Flur), with David W. Gibbs not standing for re-election. Our Certificate of Incorporation and our By-Laws provide for the annual election of each of our directors for one-year terms. Following the recommendations of our Nominating, Governance and Corporate Responsibility Committee, our Board of Directors has nominated Mr. Brickman, Mr. Baer, Mr. Eisenberg, Ms. Ferguson, Ms. Flur, Ms. Heasley, Mr. McMaster, Mr. Miller, Ms. Mooney, Ms. Mulder, Ms. Paulonis and Mr. Rabin for election to our Board of Directors. Accordingly, this Proposal 1 seeks the election of these twelve individuals to be directors, each with a one-year term that will expire at the annual meeting of stockholders in 2021. Unless otherwise indicated, all proxies that authorize the proxy holders to vote for the election of directors will be voted “FOR” the election of the nominees listed below. If a nominee becomes unavailable for election as a result of unforeseen circumstances, it is the intention of the proxy holders to vote for the election of such substitute nominee, if any, as the Board of Directors may propose. As of the date of this Proxy Statement, each of the nominees has consented to serve and the Board is not aware of any circumstances that would cause a nominee to be unable to serve as a director. Except for Mr. Baer and Ms. Flur who are standing for election to our Board for the first time, each director nominee is a current director with a term expiring at this annual meeting. Each director nominee has furnished to us the following information with respect to their principal occupation or employment and principal directorships: Christian A. Brickman Director, President and Chief Executive Officer, age 55 Mr. Brickman has served on our Board of Directors since September 2012 and is the Corporation’s President and Chief Executive Officer, a role he has held since February 2015. Prior to being appointed to his current role, Mr. Brickman served as President and Chief Operating Officer of the Corporation from June 2014 to February 2015. Prior to joining the Corporation, Mr. Brickman served as President of Kimberly-Clark International from May 2012 to February 2014. We believe that Mr. Brickman’s executive and management experience, including his experience as President of two large international companies, well qualifies him to serve on our Board. 10 SALLYBEAUTY HOLDINGS, INC. 2019 Proxy Statement

PROPOSAL 1 - ELECTION OF DIRECTORS Timothy R. Baer Director Nominee, age 59 Mr. Baer founded and has been Managing Partner of TRB Partners LLC since 2017 and of TRB Law PPLC since 2019. In addition, Mr. Baer has served as Co-Chair of the PJT Camberview Advisory Council since 2017. From 2016 to 2017 Mr. Baer was Senior Advisor to Target Corporation and from 2004 to 2016 he was Target’s Executive Vice President, Chief Legal Officer and Corporate Secretary. Mr. Baer has previously served as a board member for Greater MSP and Greater Twin Cities United Way. We believe that Mr. Baer’s legal and management experience well qualifies him to serve on our Board. Marshall E. Eisenberg Director, age 74 Mr. Eisenberg has served on our Board of Directors since November 2006. Mr. Eisenberg is a founding partner of the Chicago law firm of Neal, Gerber & Eisenberg LLP and has been a member of the firm’s Executive Committee for the past 30 years. Mr. Eisenberg is a director of Jel-Sert Company and was formerly a director of Ygomi, Inc. and Engineered Controls International, Inc. We believe that Mr. Eisenberg’s extensive legal experience, including his extensive corporate governance experience, well qualifies him to serve on our Board. Diana S. Ferguson Director, age 56 Ms. Ferguson was elected to our Board of Directors in January 2019. She has served as a consultant to Cleveland Avenue, LLC, a venture capital investment firm, since September 2015, and in 2018 became its Chief Financial Officer. In addition, Ms. Ferguson has served as a principal of Scarlett Investments, LLC, a private investment firm, since 2013. She also served as Chief Financial Officer of the Chicago Board of Education from February 2010 to May 2011 and as Senior Vice President and Chief Financial Officer of The Folgers Coffee Company from April 2008 to November 2008 when Folgers was sold. Prior to joining Folgers, she was Executive Vice President and Chief Financial Officer of Merisant Worldwide, Inc. Ms. Ferguson also served as the Chief Financial Officer of Sara Lee Foodservice, a division of Sara Lee Corporation, and in a number of leadership positions at Sara Lee Corporation, including Senior Vice President of Strategy and Corporate Development, as well as Treasurer. We believe that Ms. Ferguson’s executive, management and finance experience well qualifies her to serve on our Board. www.sallybeautyholdings.com 11

PROPOSAL 1 - ELECTION OF DIRECTORS Dorlisa K. Flur Director Nominee, age 54 Ms. Flur has served as senior advisor to Southeastern Grocers, Inc. since August 2018 and was previously its Chief Strategy and Transformation Officer from August 2016 to July 2018. Prior to that Ms. Flur served as Executive Vice President, Omnichanel for Belk, Inc. from February 2013 to January 2016, where she integrated stores and eCommerce and also led supply chain. She was previously Vice Chair, Strategy and Chief Administrative Officer at Family Dollar Stores, Inc. where she held a series of top operational roles including real estate, marketing and merchandising as the company scaled from 5000 to 7500 stores. Ms. Flur is a former partner of McKinsey & Company, Inc. where she co-led its Charlotte, North Carolina office. She currently serves as a director of Hibbett Sports, Inc., where she is a member of its Audit Committee, and United States Cold Storage, a wholly-owned subsidiary of John Swire & Sons, Inc. We believe that Ms. Flur’s executive and management experience, including extensive work driving transformations within mass market retail, well qualifies her to serve on our Board. Linda Heasley Director, age 64 Ms. Heasley has served on our Board of Directors since May 2017 and was Chief Executive Officer of J.Jill, Inc. from April 2018 until December 2019. Before joining J.Jill, Inc., Ms. Heasley served as the Chief Executive Officer of The Honey Baked Ham Company, LLC from February 2017 to March 2018. Ms. Heasley served as the Chief Executive Officer and President of Lane Bryant, Inc. from February 2013 until February 2017 and as the Chairman, President and Chief Executive Officer. Prior to this, Ms. Heasley held senior leadership roles at CVS Health Corporation, Timberland LLC, Bath and Body Works and L Brands, Inc. She currently serves as a director at J.Jill, Inc. We believe that Ms. Heasley’s executive and management experience well qualifies her to serve on our Board. Robert R. McMaster Director, age 71 Mr. McMaster has served on our Board of Directors since November 2006 and as the Chairman of our Board since February 2016. Mr. McMaster served as our Lead Independent Director from November 2012 until he was named Chairman of the Board. Mr. McMaster has been a director of Carpenter Technology Corporation, a NYSE listed manufacturer and distributor of specialty metals, since 2007, where he currently serves as a member of its audit and strategy committees. Mr. McMaster is also chairman of the audit committee of The Columbus Foundation, a charitable trust and nonprofit corporation. Mr. McMaster previously served as a director of American Eagle Outfitters, Inc. and Dominion Homes, Inc., and as an executive officer of ASP Westward, LLC, ASP Westward, L.P., Westward Communications Holdings, LLC and Westward Communications, L.P. Mr. McMaster is a former partner of KPMG LLP and a former member of its management committee. He also served as the Senior Financial Advisor to the CEO of Worthington Industries, Inc. from October 2008 to May 2013. We believe that Mr. McMaster’s long and varied business career, including his extensive accounting experience, well qualifies him to serve on our Board. 12 SALLYBEAUTY HOLDINGS, INC. 2019 Proxy Statement

PROPOSAL 1 - ELECTION OF DIRECTORS John A. Miller Director, age 66 Mr. Miller has served on our Board of Directors since November 2006. Mr. Miller is the President and Chief Executive Officer of North American Corporation, a multi-divisional company specializing in industrial paper products, packaging, printing and other commercial consumables. Mr. Miller has served as the President of North American Corporation since 1987. Mr. Miller is also a director of Wirtz Corporation, where he is a member of its Audit and Compensation Committees and Breakthru Beverage, where he is a member of its Audit Committee. We believe that Mr. Miller’s long business career, including service as CEO of a large distribution company and his previous service on the board of our previous owner, well qualifies him to serve on our Board. P. Kelly Mooney Director, age 55 Ms. Mooney has served on our Board of Directors since August 2018. Ms. Mooney joined IBM iX in September 2017 and served as Chief Experience Officer until May 2018. Prior to this, Ms. Mooney held a variety of executive roles with Resource/Ammirati, a digital marketing firm, including Chief Executive Officer from January 2011 to September 2017, President from June 2001 to January 2011, and Chief Experience Officer and Director of Intelligence from March 1995 to May 2001. Ms. Mooney helped grow Resource/Ammirati to be one of the largest independent and largest female-owned digital consultancy agencies in the U.S. by attracting several Fortune 500 clients. During her tenure, she led the development and delivery of integrated marketing, digital experience, ecommerce, mobile and innovation consulting services and was also accountable for Human Resources, IT, Finance and Operations. In 2016, Resource/Ammirati was sold to IBM to become part of IBM iX, one of the world’s largest digital consultancy agencies. She currently serves as a director of J.Jill, Inc. We believe that Ms. Mooney’s executive, management and marketing experience well qualifies her to serve on our Board. Susan R. Mulder Director, age 49 Ms. Mulder has served on our Board of Directors since November 2014 and is the Chief Executive Officer of Nic & Zoe Co., a privately-held woman’s apparel company, a role she has held since April 2012. Under her leadership, the brand has grown its wholesale footprint and introduced an E-Commerce platform and NIC+ZOE branded retail locations. Ms. Mulder is also a director of Nic & Zoe Co. Prior to joining Nic & Zoe Co., Ms. Mulder was a Senior Partner with McKinsey & Company where she was a leader in the retail and consumer practice for over 10 years specializing in marketing and organization. Ms. Mulder is also a member of the Board of Overseers of Boston Children’s Hospital. We believe that Ms. Mulder’s executive and retail and consumer experience well qualifies her to serve on our Board. www.sallybeautyholdings.com 13

PROPOSAL 1 - ELECTION OF DIRECTORS Denise Paulonis Director, age 47 Ms. Paulonis has served on our Board of Directors since May 2018 and is the Executive Vice President and Chief Financial Officer of The Michaels Companies, a position she has held since August 2016. Ms. Paulonis joined Michaels in September 2014 and served as its Senior Vice President, Finance and Treasurer from November 2015 to August 2016 and as its Vice President, Corporate Finance, Investor Relations and Treasury from September 2014 to November 2015. Prior to joining Michaels, Ms. Paulonis held various senior level positions with PEPSICO from August 2009 to September 2014, including Vice President, Financial Planning and Analysis, Frito Lay from August 2013 to September 2014, Vice President, Finance and Strategy, PepsiCo U.S. Sales from January 2011 to July 2013, and Vice President, Global Corporate Strategy from August 2009 to December 2010. We believe that Ms. Paulonis’ executive, management and finance experience well qualifies her to serve on our Board. Edward W. Rabin Director, age 73 Mr. Rabin has served on our Board of Directors since November 2006. Mr. Rabin was President of Hyatt Hotels Corporation until his retirement in 2006, having served in various senior management roles since joining the Corporation in 1969. Mr. Rabin was a director of PrivateBancorp, Inc., a NASDAQ listed bank holding company, from December 2003 until the bank was acquired in June 2017. Mr. Rabin served as lead director of WMS Industries Inc., a formerly NYSE listed company in the gaming industry, from July 2008 until that company was sold in October 2013 and as a member of its audit and compensation committees from December 2005 to October 2013. He also served as a director of SMG Corporation from 1992 through June 2007. We believe that Mr. Rabin’s executive and management experience, including his experience as president of a large hotel company, well qualifies him to serve on our Board. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES LISTED ABOVE. 14 SALLYBEAUTY HOLDINGS, INC. 2019 Proxy Statement

Board Nominee Qualifications and Experience The following table summarizes the key knowledge, skills and experience that qualifies each nominee for our Board of Directors. CEO/Senior Executive Experience Experience as CEO, COO, CFO, President or senior executive of company or partnership, or significant subsidiary, operating division or business unit. Public Board Governance Experience as director on board of publicly-traded company. Independence Satisfy the NYSE’s independence requirements. Financial Expertise Possess the knowledge and experience to be qualified as an “audit committee financial expert.” International Operations Executive-level experience working in organization with global operations. Marketing; Merchandising; Sales Experience in a senior management position responsible for managing a marketing, merchandising and/or sales function. Retail Operations Experience in a senior management position responsible for managing retail operations. Diversity Add perspective through diversity in gender, ethnic background or race. Legal or Consulting Background Brickman ✓ ✓ ✓ ✓ ✓ ✓ Baer ✓ ✓ ✓ ✓ ✓ ✓ Eisenberg ✓ ✓ ✓ ✓ ✓ Ferguson ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Flur ✓ ✓ ✓ ✓ ✓ ✓ ✓ Heasley ✓ ✓ ✓ ✓ ✓ ✓ McMaster ✓ ✓ ✓ ✓ ✓ Miller ✓ ✓ ✓ ✓ Mooney ✓ ✓ ✓ ✓ ✓ ✓ ✓ Mulder ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Paulonis ✓ ✓ ✓ ✓ ✓ ✓ ✓ Rabin ✓ ✓ ✓ ✓ www.sallybeautyholdings.com 15

CORPORATE GOVERNANCE,

THE BOARD AND ITS COMMITTEES

Board Purpose and Structure

The Board oversees, counsels, and directs management in the long-term interests of the Corporation and our stockholders. The Board’s responsibilities include:

Corporate Governance Philosophy

We are committed to conducting our business in a way that reflects best practices and high standards of legal and ethical conduct. To that end, our Board of Directors has approved and oversees a comprehensive system of corporate governance policies and programs. These documents meet or exceed the requirements established by the NYSE listing standards and by the SEC and are reviewed periodically and updated as necessary under the guidance of our Nominating, Governance and Corporate Responsibility Committee to reflect changes in regulatory requirements and evolving oversight practices.

Because our Board is committed to corporate governance best practices, we are committed to integrating responsible sustainability and corporate responsibility initiatives into our operations and strategic business objectives.

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Board Diversity

We value boardroom diversity as integral to effective corporate governance. We believe that board diversity — gender, race, age, insight, background, personality, and professional experience — is a necessity that improves the quality of strategic decision-making and long-term vision, and represents the kind of company we aspire to be.

In the past four years the Board has made meaningful efforts to diversify board membership even further, increasing the percentage of women on our Board from 22 percent to 42 percent. This enhanced diversity has strengthened board-level expertise in critical areas such as: consumer goods and global retailing; corporate financial management; strategic planning and transaction execution; and integrated marketing, digital experience, e-commerce and mobile.

		Our Board’s leadership by example on diversity is being recognized. In May 2019 the National Association of Corporate Directors (NACD) named the Company’s Board as a nominee for a 2019 NACD NXT™ Recognition Award. These awards showcase breakthrough board practices that promote greater diversity and inclusion. And in November 2019 the Company became a two-time winner of a “Corporate Champions” award, bestowed by the Women’s Forum of New York, which promotes the advancement of women on corporate boards. In 2017, the Women’s Forum honored the company as a “40% Plus Corporate Champion” for “accelerating gender balance and driving meaningful and sustainable change.”   Under our Corporate Governance Guidelines, the Nominating, Governance and Corporate Responsibility Committee recommends to the Board criteria for selection of directors and reviews periodically with the Board the criteria adopted by the Board. Although the Guidelines do not contain a specific policy on diversity, the Board demonstrates — by its own diverse composition — its commitment to diversity and inclusion.

Our Board recognizes that they play a crucial role in setting the tone for the Company’s workplace culture. The Board has encouraged leaders to hire exceptional employees with the diversity that can anticipate the needs and concerns of our customers. By hiring people with diverse voices, listening to them, and responding accordingly, we believe that we are taking the necessary steps to maintain our long-term sustainability.

Corporate Responsibility and ESG — Environmental, Social, Governance

Our Board recognizes that environmental, social, governance and sustainability (“ESG”) issues are of increasing importance to our investors, as well as our customers, and are essential to our Company’s long-term performance and value creation. Our Board is committed to corporate governance best practices and, as such, is committed to integrating responsible ESG initiatives into our operations and strategic business objectives.   BOARD COMMITTEE OVERSIGHT:   As an indication of our Board’s ongoing commitment to ESG issues, in January 2019, the Board adopted a revised charter for the newly-renamed “Nominating, Governance and Corporate Responsibility Committee.” With the charter change, the Board delegated to the Committee authority to oversee the Company’s corporate responsibility and ESG-related matters. The revised charter is available at http://www.sallybeautyholdings.com/investor-relations/corporate-governance/governance-documents.

CORE ESG VALUES REFLECTED IN OUR CODE OF CONDUCT AND ETHICS:

Our Company’s core values regarding ESG and corporate responsibility are reflected in our Code of Business Conduct and Ethics (the “Code”), which is the standard of conduct that applies to all of our employees, officers and directors. The Code reflects the Board’s beliefs about how we should conduct ourselves individually and as a company, and includes the following core values relating to corporate responsibility and ESG matters: conducting our business as a good corporate citizen in compliance with all laws, rules and regulations applicable to us and the conduct of our business; conducting operations with regard to the welfare of our employees and for the protection of the environment and the general public; and providing equal opportunity to all employees and job applicants.

The Code is available on our website at http://investor.sallybeautyholdings.com and is available in print to any person, without charge, upon written request to our Vice President of Investor Relations. We intend to disclose on our website any substantive amendment to, or waiver from, a provision of the Code that applies to our principal executive officer, our principal financial officer, our principal accounting officer or persons performing similar functions. We have not incorporated by reference into this Proxy Statement the information included on or linked from our website, and you should not consider it to be part of this Proxy Statement.

STOCKHOLDER ENGAGEMENT:

Based on informal discussions with stockholders during the past year, the Board initiated a sustainability materiality assessment of the Company. As a result the Board determined that the Company’s ESG strategy should focus on areas where we can have a material, meaningful impact, which include Energy and Environment; Product Development and Sourcing; and Diversity and Inclusion.

Energy/Environment: We continue to make progress toward reducing our environmental impact by reducing energy usage and increasing energy efficiency. We have implemented a number of initiatives designed in part to reduce our impact on the environment.

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Product Development and Sourcing: We continue to make progress toward our long-term sustainability goals by using best practices in product development and sourcing. All finished formulas in our owned-brand products are cruelty-free, i.e., not tested on animals. Most (90%) of our owned-brand products are vegan and we aim to have at least 95% of our owned-brand products be vegan in fiscal year 2020. Our Company strives to avoid product formulations that contain parabens and phthalates.

Diversity and Inclusion: Diversity and Inclusion are at the heart of our Company — at the Board level, throughout our global workforce, and in our shared commitment to serving a diverse customer base and their communities.

At the Board Level: Our Board’s composition shows the Company’s commitment to diversity and inclusion. Board level diversity has enhanced our Company’s board-level expertise and broadened its viewpoint. Having diverse voices on our Board sets the tone to encourage leaders at all levels of the Company to listen to the concerns of our workforce and customers alike. By listening to these voices, and responding accordingly, we are continuously evolving as a socially responsible corporate citizen and are maintaining our long-term sustainability.

Our Board’s inclusive composition and practices are being noticed and championed by others, as noted on page 17.

In Our Workforce: Our Company is 92% Female and 48% racially/ethnically diverse. In 2019 Forbes named our Company one of America’s Best Employers for Diversity.

In Our Customer Base: Our customers span the entire continuum of gender and ethnic diversity. We sell products to treat and style every kind of hair; we deliver a tailored assortment of beauty products that serve the local communities where our 4,150 U.S. and Canadian stores are located. Serving the diverse demographics and needs of our customers drives a culture and workforce that embraces and reflects the communities we serve.

Director Independence

Our Board of Directors is currently comprised of ten non-management directors and Mr. Brickman, who is our President and Chief Executive Officer. Under the Corporate Governance Guidelines, our directors are deemed independent if the Board has made an affirmative determination that such director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us) and such director also satisfies the other independence requirements of the NYSE. Our Board of Directors has affirmatively determined that all of our current directors other than Mr. Brickman, and both new nominees for directors (Mr. Baer and Ms. Flur), satisfy the independence requirements of our Corporate Governance Guidelines, as well as the NYSE, relating to directors. As part of its annual evaluation of director independence, the Board examined (among other things) whether any transactions or relationships exist currently (or existed during the past three years), between each independent director and us, our subsidiaries, affiliates, or independent auditors and the nature of those relationships under the relevant NYSE and SEC standards. The Board also examined whether there are (or have been within the past year) any transactions or relationships between each independent director and members of the senior management of the Corporation or its affiliates.

All of our directors who serve as members of the Audit Committee, Compensation Committee and Nominating, Governance and Corporate Responsibility Committee are independent as required by the NYSE corporate governance rules. In addition, all of our Audit Committee members also satisfy the separate SEC independence requirements applicable to audit committee members and all of our Compensation Committee members satisfy the additional NYSE independence requirements applicable to compensation committee members.

Nomination of Directors

The Board of Directors is responsible for nominating directors for election by our stockholders and filling any vacancies on the Board of Directors that may occur. The Nominating, Governance and Corporate Responsibility Committee is responsible for identifying individuals it believes are qualified to become members of the Board of Directors. The Nominating, Governance and Corporate Responsibility Committee considers recommendations for director nominees from a wide variety of sources, including other members of the Board of Directors, management, stockholders and, if deemed appropriate, from professional search firms. The Nominating, Governance and Corporate Responsibility Committee will take into account the applicable requirements for directors under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the listing standards of the NYSE. In addition, the Nominating, Governance and Corporate Responsibility Committee will take into consideration such other factors and criteria as it deems appropriate in evaluating a candidate, including such candidate’s judgment, skill, integrity, and business and other experience and the perceived needs of the Board of Directors at that time. With regard to diversity, the Board of Directors and the Nominating, Governance and Corporate Responsibility Committee believe that sound governance of the Corporation requires a wide range of viewpoints. As a result, although the Board of Directors does not have a formal policy regarding board diversity, the Board of Directors and Nominating, Governance and Corporate Responsibility Committee believe that the Board of Directors should be comprised of a well-balanced group of individuals with diverse backgrounds, educations, experiences and skills that contribute to board diversity, and the Nominating, Governance and Corporate Responsibility Committee considers such factors when reviewing potential director nominees.

Stockholder Recommendations or Nominations for Director Candidates

Our Corporate Governance Guidelines provide that our Nominating, Governance and Corporate Responsibility Committee will accept for consideration submissions from stockholders of recommendations for the nomination of directors. Acceptance of a recommendation for consideration does not imply that the Nominating, Governance and Corporate Responsibility Committee will nominate the recommended candidate. Director nominations by a stockholder or group of stockholders for consideration by our stockholders at our annual meeting of stockholders, or at a special meeting of our stockholders that includes on its agenda the election of one or more directors, may only be made pursuant to Section 1.06 or Section 1.07, as applicable, of our By-Laws or as otherwise provided by law. Nominations pursuant to our By-Laws are made by delivering to our Corporate Secretary, within the time frame

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described in our By-Laws, all of the materials and information that our By-Laws require for director nominations by stockholders. All notices of intent to make a nomination for election as a director shall be accompanied by the written consent of each nominee to serve as a director.

Stockholders wishing to recommend or nominate a director must provide a written notice to our Corporate Secretary that includes, among other information required to be provided by our By-Laws, (a) the name, age, business address and residence address of the nominee(s), (b) the principal occupation or employment of the nominee(s), (c) such person’s written consent to serve as a director if elected, (d) the class or series and number of shares of Common Stock which are owned beneficially or of record by the nominee(s), (e) a description of all arrangements or understandings between the stockholder and the nominee(s) pursuant to which nominations are to be made by the stockholder, and (f) such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation or whether such nominee would be independent under applicable Securities and Exchange Commission rules and regulations and New York Stock Exchange rules and the Corporation’s publicly disclosed Corporate Governance Guidelines. No person shall be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in Section 1.06 or Section 1.07, as applicable, of our By-Laws; any nominee proposed by a stockholder not nominated in accordance with Section 1.06 or Section 1.07, as applicable, shall not be considered or acted upon for execution at such meeting. Stockholders’ notice for any proposals requested to be included in the Corporation’s Proxy Statement pursuant to Rule 14a-8 under the Exchange Act (including director nominations), must be made in accordance with that rule.

Director Qualifications

In order to be recommended by the Nominating, Governance and Corporate Responsibility Committee, our Corporate Governance Guidelines require that each candidate for director must, at a minimum, have integrity, be committed to act in the best interest of all of our stockholders, and be able and willing to devote the required amount of time to our affairs, including attendance at Board of Director meetings. In addition, the candidate cannot jeopardize the independence of a majority of the Board of Directors. The candidate should preferably also have the following qualifications: business experience, demonstrated leadership skills, experience on other corporate boards and skill sets that add to the value of our business.

Annual Election of Directors

In 2014, the Board of Directors began the process of declassifying the Board to provide for the annual election of all directors for one-year terms. Our stockholders approved the declassification of the Board at our 2014 annual meeting of stockholders. At the annual meeting each year, all directors of the Board will be elected for one-year terms.

At the 2020 annual meeting, our stockholders will elect twelve individuals to serve on our Board.

Mandatory Retirement Age of Directors

Pursuant to our Corporate Governance Guidelines, it is the policy of the Board that no non-management director should serve for more than 15 years in that capacity, although the Board may request that a director who would otherwise be due to retire continue his or her service if (a) the policy would result in multiple retirements in any 12-month period or (b) the Board deems such service to be in the best interest of our stockholders.

Directors Who Change Their Present Job Responsibilities

Pursuant to our Corporate Governance Guidelines, a director who experiences a significant change in job responsibilities or assignment will be required to submit a resignation to the Board. The remaining directors, upon the recommendation of the Nominating, Governance and Corporate Responsibility Committee, will then determine the appropriateness of continued Board membership.

Board Self Evaluations

The Nominating, Governance and Corporate Responsibility Committee oversees a self-evaluation of the Board each year to determine whether the Board is functioning effectively. In addition, each committee of the Board conducts a self-evaluation each year and reports its findings to the Board.

Board Meetings and Attendance

Pursuant to our Corporate Governance Guidelines, our directors are expected to:

In FY19, our Board of Directors met 7 times, our Audit Committee met 5 times, our Compensation Committee met 7 times, our Executive Committee met 6 times, our Marketing Committee met 4 times, and our Nominating, Governance and Corporate Responsibility Committee met 4 times. Our independent directors met in executive session 6 times. During FY19, each of our directors attended at least 75% percent of the total number of meetings of the Board (during his or her service on the Board) and each committee on which he or she served (during his or her service on such committee). In 2019, except for Ms. Mulder, all members of the Board who were up for election or re-election attended the Corporation’s annual meeting of stockholders.

Board Leadership Structure

In accordance with our By-Laws, the Board elects our Chief Executive Officer and our Chairman, and each of these positions may be held by the same person or may be held by two persons. Under our Corporate Governance Guidelines, the Board does not have a policy, one way or the other, on whether the role of the Chairman and Chief Executive Officer should be separate and, if it is to be separate, whether the Chairman should be selected from the non-management directors or be a management director. However, our Corporate Governance Guidelines require that, if the Chairman of the Board is not an independent director, the independent directors shall appoint from among themselves a Lead Independent Director. The Chairman of the Board is responsible for chairing Board meetings and meetings of stockholders, establishing the agendas for Board meetings along with the Lead Independent Director, if any, and providing information to the Board members in advance of meetings and between meetings. The Lead Independent Director, if any, is responsible for, among other things, coordinating the activities of the independent directors, coordinating with the Chairman to set the agenda for Board meetings, chairing executive sessions of the independent (and non-management) directors, reviewing and approving meeting schedules and information sent to the Board and liaising with the Chairman and the Chief Executive Officer and the other independent directors.

Mr. Brickman serves as our Chief Executive Officer and Mr. McMaster serves as our Chairman of the Board. Our Board has determined that this leadership structure is appropriate at this time. In particular, our Board believes that this structure streamlines decision making and enhances accountability. Furthermore, our Board believes that the presence of an independent Chairman of the Board and a majority of independent directors provides effective oversight of management.

Communications with the Board

Stockholders and other interested parties may contact any member (or all members) of our Board (including the non-management directors as a group, the Chairman of the Board, any Board committee or any chair of any such committee) by addressing written correspondence to the attention of our Corporate Secretary at 3001 Colorado Boulevard, Denton, Texas 76210. Our Corporate Secretary’s office will open all communications received for the

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sole purpose of determining whether the contents represent a message to our directors. Any contents that legitimately relate to our business and operations and that are not in the nature of advertising, promotions of a product or service, patently offensive material, charitable requests, repetitive materials, or designed to promote a political or similar agenda will be forwarded promptly to the addressee.

Board’s Role in the Risk Management Process

The Board’s role in the risk management process is to understand and oversee the Corporation’s strategic plans, the associated risks and the steps that senior management is taking to manage and mitigate those risks. To ensure proper oversight of the risk management process, the Audit Committee outlines our risk principles and management framework and sets high level strategy and risk tolerances. Our risk profile is managed by our Director of Internal Audit, reporting to the Chairman of the Audit Committee. The Director of Internal Audit meets at least quarterly in executive session with the Audit Committee, and conducts an annual Enterprise Risk Assessment for the Corporation. This assessment is then presented to the Audit Committee (for development of action items and responsible parties for oversight), the full Board (for information) and the Nominating, Governance and Corporate Responsibility Committee (to ensure appropriate Board oversight of the identified risks). This approach is designed to enable the Board and management to establish a mutual understanding of the Corporation’s risk management practices and capabilities, to review the Corporation’s risk exposure and to elevate certain key risks for discussion at the Board level. The Board also meets regularly in executive session without management to discuss a variety of topics, including risk management. Through this system of checks and balances, the Board is able to monitor our risk profile and risk management activities on an ongoing basis. Certain officers who report to the Chief Financial Officer also monitor various financial risks which add to the Corporation’s overall risk management strategy.

Committees of the Board of Directors

Pursuant to our By-Laws, our Board of Directors has established the following committees:

The function of each committee is described below. Each committee, pursuant to its charter adopted by the Board of Directors, consists of at least three members.

Executive Committee. The Executive Committee consists of Messrs. Miller (chair), Brickman, Eisenberg and McMaster. The purpose of the Executive Committee is to assist our Board of Directors with its responsibilities and, except as may be limited by law, our Certificate of Incorporation or our By-Laws, to exercise the powers and authority of our Board of Directors when it is not in session. The Executive Committee is governed by the Executive Committee charter. A copy of this charter is available on the corporate governance section of our website at http://investor.sallybeautyholdings.com and is available in print to any person, without charge, upon written request to our Vice President of Investor Relations.

Audit Committee. The Audit Committee currently consists of Mr. McMaster (chair), Mr. Eisenberg, Ms. Ferguson, Mr. Gibbs, Mr. Miller, and Ms. Paulonis. The Board has determined that each member of the Audit Committee is financially literate, that each member of the Audit Committee meets the independence requirements of the NYSE and Rule 10A-3 of the Exchange Act and that each of Mr. Eisenberg, Mr. Gibbs, Mr. McMaster, Mr. Miller, and Ms. Paulonis qualifies as an “audit committee financial expert” under SEC rules.

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities for:

The Audit Committee is governed by the Audit Committee charter. A copy of this charter is available on the corporate governance section of our website at http://investor.sallybeautyholdings.com and is available in print to any person, without charge, upon written request to our Vice President of Investor Relations.

Compensation Committee. The Compensation Committee consists of Mr. Rabin (chair), Ms. Heasley, and Ms. Mulder. The Board has determined that each such member meets the independence requirements of the NYSE, as well as the “Non-Employee Director” requirements under Rule 16b-3 of the Exchange Act and the “outside director” requirements under Section 162(m) of the Internal Revenue Code. The purpose of the Compensation Committee is to, among other things:

The Compensation Committee’s processes for fulfilling its responsibilities and duties with respect to executive compensation and the role of our executive officers and management in the compensation process are each described under “Compensation Discussion and Analysis — Compensation Decision-Making Process” of this Proxy Statement.

The Compensation Committee is governed by the Compensation Committee charter. A copy of this charter is available on the corporate governance section of our website at http://investor.sallybeautyholdings.com and is available in print to any person, without charge, upon written request to our Vice President of Investor Relations. Pursuant to its charter, the Compensation Committee may create one or more subcommittees and may delegate, in its discretion, all or a portion of its duties and responsibilities to such subcommittees.

Pursuant to its charter, the Compensation Committee may retain such compensation consultants, outside counsel and other advisors as it may deem appropriate in its sole discretion and it has the sole authority to approve related fees and other retention terms. As described in greater detail in “Compensation Discussion and Analysis — Compensation Decision-Making Process” of this Proxy Statement, the Compensation Committee engages an independent executive compensation consultant, Frederic W. Cook & Co., Inc., or FW Cook, to assist it in its review of our management compensation levels and programs to ensure that our executive compensation program is commensurate with those of public companies similar in size and scope to us. During its engagement, FW Cook has participated in meetings of the Compensation Committee and advised it with respect to compensation trends and practices, plan design and the reasonableness of individual awards. FW Cook has not performed any services for our management.

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Nominating, Governance and Corporate Responsibility Committee. The Nominating, Governance and Corporate Responsibility Committee consists of Mr. Eisenberg (chair), Ms. Heasley, Ms. Mooney and Ms. Mulder. The Board has determined that each such member meets the independence requirements of the NYSE. The purpose of the Nominating, Governance and Corporate Responsibility Committee is to, among other things:

The Nominating, Governance and Corporate Responsibility Committee is governed by the Nominating, Governance and Corporate Responsibility Committee charter, which was revised on January 31, 2019 to reflect the Committee’s additional oversight over the Corporation’s corporate responsibility and sustainability initiatives. The Committee periodically reviews the Company’s strategies, activities, policies and communications regarding sustainability and other environmental, social and governance-related matters and makes recommendations to the Board. A copy of this charter is available on the corporate governance section of our website at http://investor.sallybeautyholdings.com and is available in print to any person, without charge, upon written request to our Vice President of Investor Relations.

Marketing Committee. The Marketing Committee, which was established in 2019, consists of Ms. Mooney (chair) and Ms. Heasley. The purpose of the Marketing Committee is to advise the Board on marketing matters, including overall customer insight, marketing strategy and capability development, and the development and implementation of the Company’s marketing plan.

The Marketing Committee is governed by the Marketing Committee charter, which was adopted on April 24, 2019. A copy of this charter is available on the corporate governance section of our website at http://investor.sallybeautyholdings.com and is available in print to any person, without charge, upon written request to our Vice President of Investor Relations.

incentive to engage in business activities or other behavior that would impose unnecessary or excessive risk to the value of the Corporation or the investments of our stockholders. The Compensation Committee considered compensation programs that apply to employees at all levels. In addition, the Compensation Committee considered the presence of significant risk mitigation factors inherent in our compensation program, such as those described under “Compensation Discussion and Analysis — Management of Compensation-Related Risk.”

Based on the foregoing, the Compensation Committee concluded in its April 2019 meeting that the Corporation’s compensation plans, programs and policies do not create incentives that encourage employees to take risks that are reasonably likely to have a material adverse effect on the Corporation. We believe that our incentive compensation plans, policies and practices provide appropriate incentives for behaviors that are within the Corporation’s ability to effectively identify and manage significant risks, are compatible with effective internal controls and our risk management practices and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.

Related Party Transactions

Our Board of Directors recognizes that interested transactions with related parties present a heightened risk of conflicts of interest, or the perception thereof, and therefore it adopted a Statement of Policy with respect to Related Party Transactions. Under this policy, an “interested transaction”, is defined as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including the incurrence or issuance of any indebtedness or the guarantee of indebtedness) in which (1) the aggregate amount involved will or may be reasonably expected to exceed $20,000 in any calendar year, (2) the Corporation or any of its subsidiaries is a participant, and (3) any related party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than ten percent beneficial owner of another entity). Any charitable contribution, grant or endowment by the Corporation to a charitable organization, foundation or university at which a related party’s only relationship is as an employee, an officer or a director also constitutes an interested transaction. A “related party” is defined as any person who is or was (since the beginning of the last fiscal year for which the Corporation has filed an Annual Report on Form 10-K and proxy statement, even if such person does not presently serve in that role) (1) an officer (including at the Vice President level or above), director or nominee for election as a director of the Corporation or any of its subsidiaries, (2) a greater than five percent beneficial owner of any class of the Corporation’s Common Stock or other equity securities, or (3) an immediate family member of any of the foregoing individuals.

Subject to several exceptions (as described below), all interested transactions must be approved or ratified by the Audit Committee of the Board of Directors, taking into account, among other factors it deems appropriate, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances, as well as the extent of the related party’s interest in the transaction. An interested transaction may be approved or ratified if it is determined in good faith that, under all of the circumstances, the transaction is fair to the Corporation. The Audit Committee may impose such conditions as it deems appropriate on the Corporation or the related party in connection with the approval of the transaction.

No director participates in any discussion or approval of an interested transaction for which he or she is a related party, except to the extent the director provides material information concerning the transaction to the Audit Committee. If an interested transaction remains ongoing, the Audit Committee must review and assess, on at least an annual basis, ongoing relationships with the related party to ensure that the interested transaction remains appropriate. In addition, if an interested transaction involving a member of the Board may constitute an actual or potential director conflict of interest, the General Counsel shall notify the Chair of the Nominating, Governance and Corporate Responsibility Committee of such interested transaction.

Under the policy, the following categories of interested transactions have been deemed by the Audit Committee to be pre-approved, even if in excess of $20,000, unless otherwise specifically determined by the committee: (1) any employment by the Corporation of an officer of the Corporation or any of its subsidiaries if the related compensation is approved (or recommended to the Board of Directors for approval) by the Corporation’s Compensation Committee,

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(2) any compensation paid to a director if the compensation is consistent with the Corporation’s director compensation policies and is required to be reported in the Corporation’s proxy statement under Item 402, (3) any transaction with another company at which a related party’s only relationship is as an employee (other than an executive officer or director) or beneficial owner of less than ten percent of that company’s equity, if the aggregate amount involved does not exceed the greater of $120,000, or two percent of that company’s total annual revenues, and (4) any transaction where the related party’s interest arises solely from the ownership of the Corporation’s Common Stock and all holders of the Corporation’s Common Stock received the same benefit on a pro rata basis (e.g., dividends).

All interested transactions with related parties that are required to be disclosed under the SEC’s rules are disclosed in our Proxy Statement. A copy of our Statement of Policy with respect to Related Party Transactions is available on the corporate governance section of our website at http://investor.sallybeautyholdings.com and is available in print to any person, without charge, upon written request to our Vice President of Investor Relations.

Narrative Discussion of Director Compensation Table

The following is a narrative discussion of the material factors which we believe are necessary to understand the information disclosed in the Director Compensation Table. The Sally Beauty Holdings, Inc. Amended and Restated Independent Director Compensation Policy (the “Director Compensation Policy”) governs the compensation paid to our independent directors and it was last revised in October 2018 following FW Cook’s bi-annual review of our director compensation program. The new Director Compensation Policy became effective October 1, 2018.

Cash Compensation

In FY19, pursuant to the Director Compensation Policy, each of our independent directors received an annual cash retainer of $70,000, payable in advance in four quarterly installments. For in-person Board or committee meetings during FY19, each independent director in attendance received $2,000 per meeting. For telephonic Board or committee meetings for which minutes were kept, each independent director in attendance received $1,000 per meeting.

Additional annual cash retainers were paid to each independent director who served as the Chairman of the Board (Mr. McMaster) or chairperson of the Audit Committee (Mr. McMaster), Compensation Committee (Mr. Rabin), Marketing Committee (Ms. Mooney) or the Nominating, Governance and Corporate Responsibility Committee (Mr. Eisenberg). The following table sets forth the cash retainers for services rendered in FY19:

In November 2018 the Compensation Committee awarded Mr. McMaster an additional $100,000 Non-Executive cash retainer, and Mr. Eisenberg an additional cash payment of $32,000, each for his increased responsibilities to the Company during FY18. Both awards were paid out in FY19.

Equity-Based Compensation

Pursuant to our Director Compensation Policy, each independent director, with the exception of Mr. McMaster, was granted an annual equity-based retainer award with a value at the time of grant of $140,000. Mr. McMaster was granted an annual equity-based retainer award with a value at the time of grant of $190,000. For FY19, these awards were granted in accordance with the 2010 Omnibus Incentive Plan in the form of RSUs that vested on September 30, 2019, the last day of the fiscal year, subject to the director’s continued service on the Board on such date. On November 5, 2019, each independent director, with the exception of Mr. McMaster received an award of 8,408 RSUs. Mr. McMaster received an award of 11,411 RSUs. As provided in the Director Compensation Policy, each independent director may elect to defer delivery of the shares of Common Stock that would otherwise be due on the vesting date until a later date specified by the independent director. If an independent director does not make such election, he or she will receive shares of Common Stock in settlement of the RSU on the vesting date. Vesting accelerates on a pro-rata basis in the event of the director’s death or disability.

Stock Ownership and Retention Guidelines

Pursuant to our stock ownership guidelines, each independent director must own shares of Common Stock in an amount equal to five times the base annual cash retainer (excluding additional annual cash retainers for the Chairman of the Board and committee chairpersons, and all meeting fees). Independent directors are required to achieve the applicable level of ownership within five years of becoming subject to the requirements. Until such time as the required equity ownership is reached, the independent director must retain 100% of the shares of Common

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Stock received upon settlement of his or her RSUs. Shares underlying vested RSUs (including deferred shares) count towards the stock ownership total. Unexercised options (whether vested or unvested) and unvested RSUs do not count as stock owned under the guidelines. As of September 30, 2019, all of our independent directors, subject to the five-year grace period, were in compliance with our stock ownership and retention guidelines.

Travel Expense Reimbursement

Each of our independent directors is entitled to reimbursement for reasonable travel expenses properly incurred in connection with his or her functions and duties as a director. With respect to air travel, reimbursements are limited to the cost of first-class commercial airline tickets for the trip.

Director Indemnification Agreements

Our Board of Directors approved and authorized us to enter into an indemnification agreement with each member of the Board. The indemnification agreement is intended to provide directors with the maximum protection available under applicable law in connection with their services to us.

Each indemnification agreement provides, among other things, that subject to the procedures set forth therein, we will, to the fullest extent permitted by applicable law, indemnify an indemnitee if, by reason of such indemnitee’s corporate status as a director, such indemnitee incurs any losses, liabilities, judgments, fines, penalties or amounts paid in settlement in connection with any threatened, pending or completed proceeding, whether of a civil, criminal, administrative or investigative nature. In addition, each indemnification agreement provides for the advancement of expenses incurred by an indemnitee, subject to certain exceptions, in connection with any proceeding covered by the indemnification agreement. Each indemnification agreement also requires that we cover an indemnitee under liability insurance available to any of our directors, officers or employees. Our indemnification obligations under these agreements are primary for all claims against our directors.

No Material Proceedings

As of December 6, 2019 there are no material proceedings to which any of our directors, executive officers or affiliates, or any owner of record or beneficially of more than five percent of our Common Stock (or their associates) is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

BENEFICIAL OWNERSHIP OF COMPANY’S STOCK

The following tables set forth certain information regarding the beneficial ownership, as of November 15, 2019, of: (i) our Common Stock by each current director (including director nominees) or executive officer and of all the current directors (including director nominees) and executive officers as a group; and (ii) our Common Stock by each person believed by us (based upon their Schedule 13D or 13G filings with the SEC) to beneficially own more than 5% of the total number of outstanding shares. The number of shares beneficially owned by each person or group as of November 15, 2019, includes shares of Common Stock that such person or group had the right to acquire on or within 60 days after November 15, 2019, including upon the exercise of options. The total number of outstanding shares on which the percentages of share ownership in the tables are based is 116,326,372. All such information is estimated and subject to change. Each outstanding share of Common Stock entitles its holder to one vote on all matters submitted to a vote of our stockholders. Except as specified below, the business address of the persons listed is our headquarters, 3001 Colorado Boulevard, Denton, Texas 76210.

Ownership of our Common Stock is shown in terms of “beneficial ownership.” Amounts and percentages of Common Stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which he has a right to acquire beneficial ownership within 60 days. More than one person may be considered to beneficially own the same shares. In the table below, unless otherwise noted, a person has sole voting and dispositive power for those shares shown as beneficially owned by such person.

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