SEC Form DEF 14A filed by Movado Group Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

SCHEDULE 14A INFORMATION

Check the appropriate box:

MOVADO GROUP, INC.

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

Notice of Annual Meeting of

Shareholders June 20, 2024

The 2024 Annual Meeting of Shareholders of Movado Group, Inc. will be held on Thursday, June 20, 2024, at 10:00 a.m., Eastern time. To allow all of our shareholders, regardless of their physical location, to participate more easily in the meeting, the annual meeting once again will be held entirely online. You will be able to attend and participate in the annual meeting online by visiting www.virtualshareholdermeeting.com/MOV2024, where you will be able to listen to the meeting live, submit questions, and vote. To be admitted to the virtual meeting, eligible persons must enter the 16-digit control number found on their proxy card, voting instruction form, or notice of internet availability of proxy materials. If your shares are held in “street name” through a broker, bank or other nominee, you may obtain your control number by contacting them. If you encounter any difficulty accessing the Annual Meeting or during the Annual Meeting, please call the technical support number posted on the Annual Meeting website. The technical support number will be available at least 15 minutes before the start of the meeting.

We encourage shareholders to visit the www.virtualshareholdermeeting.com/MOV2024 website for the most up-to-date information on the Annual Meeting, any procedures and limitations concerning attendance, and instructions on how to vote and ask questions during the Annual Meeting. Whether or not shareholders plan to attend the virtual-only Annual Meeting, we urge shareholders to vote and submit their proxies in advance of the meeting by one of the methods described in these proxy materials.

The 2024 Annual Meeting of Shareholders is being held for the following purposes:

Holders of the Company’s Common Stock and Class A Common Stock of record at the close of business on April 23, 2024, are entitled to notice of, and to vote at, the Annual Meeting of Shareholders or any postponements or adjournments thereof.

Again this year, we will furnish proxy materials to our shareholders via the Internet in order to expedite shareholders’ receipt of proxy materials while lowering the cost of delivery and reducing the environmental impact of our Annual Meeting.

Accordingly, we are mailing to our shareholders of record and beneficial owners a Notice of Internet Availability of Proxy Materials, which provides instructions on how to access the attached proxy statement and our annual report to shareholders for the fiscal year ended January 31, 2024, via the Internet and how to vote online. The Notice of Internet Availability of Proxy Materials also contains instructions on how to obtain the proxy materials in printed form.

By order of the Board of Directors

/s/ Mitchell C. Sussis

Secretary and General Counsel

Dated: May 9, 2024

 

Table of Contents

 

PROXY STATEMENT

Some Questions You May Have Regarding This Proxy Statement

What is the purpose of these materials?

The Board of Directors (the “Board of Directors”) of Movado Group, Inc. (the “Company”) is soliciting proxies for our 2024 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held on Thursday, June 22, 2024, at 10:00 a.m., Eastern time, in virtual format only at www.virtualshareholdermeeting.com/MOV2024. The information included in this proxy statement relates to the proposals to be voted on at the Annual Meeting, the voting process, the compensation of Directors and our most highly-paid executive officers, and other required information. Our annual report to shareholders for the fiscal year ended January 31, 2024, is available to review with this proxy statement. We are mailing a notice of the Annual Meeting (and, for those who request it, a paper copy of this proxy statement and the enclosed form of proxy) to our shareholders on or about May 9, 2024.

What proposals will be voted on at the Annual Meeting?

The three matters scheduled to be voted on at the Annual Meeting are:

In addition, such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof may be voted on.

Who can vote at the Annual Meeting?

Anyone owning shares of the Company’s Common Stock and/or its Class A Common Stock at the close of business on April 23, 2024, the record date for this year’s Annual Meeting, is entitled to attend and to vote on all items properly presented at the Annual Meeting.

Who is asking me for my vote?

The Company is soliciting your proxy on behalf of the Board of Directors and has retained Broadridge Investor Communications Solutions, Inc. (“Broadridge”), professional proxy solicitors, to assist with the solicitation. We will pay the entire cost of this proxy solicitation, including the cost of preparing and mailing the Notice of Internet Availability of Proxy Material and the Proxy Statement and Broadridge’s fee, which we expect to be less than $10,000.

What are my voting rights?

Each share of Common Stock is entitled to one vote and each share of Class A Common Stock is entitled to 10 votes on each matter properly presented at the Annual Meeting. At the close of business on April 23, 2024, the record date for determining the shareholders entitled to notice of, and to vote at, the Annual Meeting, there were 15,726,641 shares of Common Stock outstanding and 6,483,116 shares of Class A Common Stock outstanding. The Common Stock and the Class A Common Stock are hereinafter referred to together as the “Capital Stock.” A list of all shareholders as of the record date will be available during ordinary business hours at the Company’s principal place of business located at 650 From Road, Ste. 375, Paramus, NJ 07652-3556, from the Secretary of the Company, at least 10 days before the Annual Meeting and will also be available at the Annual Meeting.

How does the Board of Directors recommend that I vote?

The Board of Directors recommends that you vote:

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

In accordance with the rules of the Securities and Exchange Commission (the “SEC”), the Company is providing access to its proxy materials via the Internet. Accordingly, the Company is mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to shareholders of record and beneficial owners. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice or to request a printed set of the proxy materials. Instructions on how to access the proxy materials via the Internet or to request a printed set may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.

Where can I view the proxy materials on the Internet?

The Notice provides you with instructions on how to:

You can also view the proxy materials for the Annual Meeting online at www.movadogroup.com by clicking on Investors and then Annual Report & Proxy Materials.

How do I vote?

If you are a shareholder on the record date, you may vote in advance of the meeting by following the instructions for voting on the Notice. If you receive paper copies of these proxy materials, you can vote in advance of the meeting by completing, signing and dating your proxy card and returning it in the enclosed envelope. Alternatively, you may attend the Annual Meeting and vote your shares during the meeting by visiting www.virtualshareholdermeeting.com/MOV2024 and entering the 16-digit control number included in your Notice, voting instruction form, or proxy card. If you encounter any difficulty accessing the Annual Meeting or during the Annual Meeting, please call the technical support number posted on the Annual Meeting website. The technical support number will be available at least 15 minutes before the start of the meeting. If you vote in advance online, by phone or by mailing in a proxy card, you may still attend the Annual Meeting and vote during the meeting, but, in that case, only the votes you enter during the meeting will count.

Can I change my vote after I have delivered my proxy?

Yes. You may change your vote at any time before voting concludes at the Annual Meeting by:

What is a quorum?

For the purposes of the Annual Meeting, a “quorum” is a majority in voting power of the outstanding shares of Capital Stock owned by shareholders on the record date. There must be a quorum present in person or represented by proxy for the Annual Meeting to be held. Broker non-votes (as further described below) and abstentions will be counted as present for purposes of determining whether a quorum is present at the Annual Meeting.

What is broker “discretionary” voting?

Under the rules of the New York Stock Exchange (“NYSE”), brokers who have transmitted proxy materials to customers will have discretion to vote the shares of customers who fail to provide voting instructions on “routine matters,” but brokers may not vote such shares on “non-routine matters” without voting instructions. When a broker’s customer does not provide the broker with voting instructions on non-routine matters, the broker cannot vote on those matters and instead reports the number of such shares as broker “non-votes.” Broker non-votes are counted as present for the purpose of determining the presence of a quorum for the transaction of business, but they are not counted as shares voting. Broker non-votes can therefore have the effect of preventing approval of certain proposals where the number of affirmative votes, although a majority of the votes cast, does not constitute a majority of the voting power present. Non-routine matters include the election of directors and the approval, on an advisory basis, of the executive compensation of the Company’s named executive officers. Therefore, if you hold your shares in street name through a broker, you must cast your vote if you want it to count in respect of these non-routine matters. The ratification of the appointment of the Company’s independent registered public accounting firm is a routine matter, so brokers will have discretion to vote any uninstructed shares on that proposal (Proposal 2).

How are matters presented at the Annual Meeting approved?

Directors are elected by a plurality of the votes cast at the Annual Meeting. Approval of each of the proposals (i) to ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal 2025 and (ii) to approve, on an advisory basis, the compensation of the Company’s named executive officers requires the affirmative vote of the holders of a majority in voting power of the outstanding shares of Capital Stock present in person or represented by proxy and entitled to vote at the Annual Meeting.

With respect to the aforementioned proposals, abstentions will not be counted as votes cast in accordance with New York law. For this reason, abstentions and broker non-votes will have the effect of votes against (i) the proposal to ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal 2025 and (ii) the proposal to approve the compensation of the Company’s named executive officers. Abstentions and broker non-votes will have no effect on the election of directors.

May I vote confidentially?

Yes. Our policy is to keep your vote confidential, except as otherwise legally required, to allow for the tabulation and certification of votes and to facilitate proxy solicitation.

Who will count the votes?

A representative of Broadridge will count the votes and act as the inspector of election for the Annual Meeting.

What if additional matters are presented to the Annual Meeting?

We do not know of any business to be considered at the Annual Meeting other than the proposals described in this proxy statement. If any other business is presented at the Annual Meeting, your properly executed proxy gives authority to Mitchell C. Sussis, our General Counsel and Corporate Secretary, and to Sallie A. DeMarsilis, our Chief Operating Officer and Chief Financial Officer, to vote on such matters at his or her discretion.

Where can I find the voting results from the Annual Meeting?

We will announce preliminary voting results at the Annual Meeting and will publish final results in a Current Report on Form 8-K that we will file with the SEC within four business days after the date of the Annual Meeting.

How can I obtain information about the Company?

A copy of our fiscal 2024 Annual Report on Form 10-K is available on our website at www.movadogroup.com/investors/annual-report-and-proxy. Shareholders may also obtain a free copy by sending a request in writing to Mitchell C. Sussis, Corporate Secretary, at the Company’s address set forth in the Notice.

When are shareholder proposals due for consideration at next year’s annual meeting?

Under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for shareholder proposals to be considered for inclusion in the proxy statement for the 2025 Annual Meeting, they must be submitted in writing to our Corporate Secretary at Movado Group, Inc., 650 From Road, Ste. 375, Paramus, NJ 07652-3556, on or before January 9, 2025. In addition, our by-laws provide that, for directors to be nominated or other proposals to be properly presented at the 2025 Annual Meeting, an additional notice of any nomination or proposal must be received by us not less than 60 days nor more than 90 days before the Annual Meeting. If less than 70 days’ notice of our 2025 Annual Meeting is given, then to be timely, the notice by the shareholder must be received by us not later than the close of business on the tenth day following the day on which the first public announcement of the date of the 2025 Annual Meeting is made or the notice of the meeting is mailed, whichever occurs first. In addition to satisfying the deadlines in the advance notice provisions of our by-laws, shareholders who intend to solicit proxies in support of nominees submitted under these advance notice provisions must provide the notice required by Rule 14a-19 under the Exchange Act to the Company Secretary at the address noted above no later than April 21, 2025.

Security Ownership of Certain Beneficial Owners and Management

The following table shows the number of shares of the Company’s Class A Common Stock and Common Stock beneficially owned as of April 25, 2024 (except as otherwise noted in footnotes 2, 3, 4 and 5) by (i) each shareholder known by the Company to beneficially own more than 5% of the outstanding shares of either the Class A Common Stock or the Common Stock, (ii) each current director, (iii) each executive officer named in the Summary Compensation Table, and (iv) all current executive officers and directors as a group.

The address for Messrs. Bridgman, A. Grinberg, E. Grinberg, Howard, Isserman, Sadove, Soltani, and Sussis and for Mses. DeMarsilis, Kennedy, Kirschner and Peterson is c/o Movado Group, Inc., 650 From Road, Ste. 375, Paramus, New Jersey 07652-3556.

PROPOSAL 1 —

Election of Directors

Directors hold office until the next annual meeting of shareholders and until the election and qualification of their successors. Under the Company’s by-laws, the Board of Directors can change the number of directors comprising the entire Board of Directors so long as the number is not less than three. The Board of Directors currently consists of eight directors, including four Caucasian males, one Caucasian female, two Hispanic males and one Black female.

All of the nominees are members of the present Board of Directors. If any nominee for election to the Board of Directors should be unable to accept nomination or election as a director, which is not expected, your proxy may be voted for a substitute or substitutes designated by the Board of Directors or the number of directors constituting the Board of Directors may be reduced in accordance with the Company’s by-laws. Directors will be elected by the holders of a plurality of the voting power present in person or represented by proxy and entitled to vote. Abstentions will not be counted for purposes of the election of directors.

Except for Efraim Grinberg and Alex Grinberg, who are brothers, there are no family relationships between any of the Company’s directors. There are no arrangements between any director and any other person pursuant to which any of them was elected a director.

The Board of Directors and Corporate Governance

Board of Directors Leadership Structure

Mr. Efraim Grinberg, the Chief Executive Officer and a sitting member of the Board of Directors, is also Chair of the Board. In making the decision to combine the positions of the Chair and Chief Executive Officer in 2009, the Board of Directors took into consideration Mr. E. Grinberg’s almost 30 years of management, financial and administrative leadership at the Company and his extensive knowledge of, and experience with, other aspects of the Company’s business.

In order to follow strong governance practices, in 2011 the Board of Directors appointed Mr. Howard as the lead director to help coordinate the activities of the other independent directors and to perform such other duties and responsibilities as the Board of Directors may determine from time to time. Mr. Howard also chairs the Compensation and Human Capital Committee. The primary duties of the lead director include providing advice on agendas for, and the scheduling of, Board of Directors meetings, advising the Chair as to the quality, quantity and timeliness of the information submitted by the Company’s management to the Board of Directors, serving as the principal liaison for consultation and communication between the independent directors of the Board of Directors and the Chair, without inhibiting direct communication between the Chair and the other directors, and presiding at meetings of the Board of Directors in the absence of, or upon the request of, the Chair and presiding at all meetings of the independent directors.

The composition of the Board of Directors, the tenure of the directors with the Company, the overall experience of the directors and the experience that the directors have had with the Chair, the lead director and the executive management group permit and encourage each member to take an active role in all discussions, and each member actively participates in all substantive discussions. We believe that our current Board of Directors leadership structure is serving the Company well at this time.

Board of Directors Meetings and Committees

In fiscal 2024, the Board of Directors held eight meetings. All directors attended well in excess of 75% of the meetings of the Board of Directors and of the committees on which they served.

The Board of Directors has three committees:

The members of the committees and their chairs are appointed by the Board of Directors annually. Each committee is comprised entirely of independent directors in accordance with NYSE listing standards. Each committee operates under a written charter which is available at the Company’s website at www.movadogroup.com by clicking on “Investors”, “Corporate Governance,” and then the name of the respective committee. The current committee memberships are as follows:

Audit Committee

The Board of Directors has determined that each member of the Audit Committee is an “audit committee financial expert” as defined under the rules adopted by the SEC and, therefore, has accounting or related financial expertise in accordance with the NYSE listing standards. The Audit Committee held five meetings in fiscal 2024.

The principal functions of the Audit Committee are to (i) appoint, approve the compensation of, terminate and oversee the work of the Company’s independent auditors; (ii) approve in advance all audit and permissible non-audit services provided to the Company by independent auditors; (iii) review, in consultation with the Company’s independent auditors, management and the Company’s internal auditors, the Company’s financial reporting process, including its internal controls; (iv) review, with management and the Company’s independent auditors, the Company’s annual and quarterly financial statements before the same are publicly filed; and (v) report regularly to the Board of Directors with respect to any issues that arise concerning, among other things, the quality or integrity of the Company’s financial statements, the performance of the internal audit function, the Company’s compliance with legal requirements and the performance and independence of the Company’s independent auditors.

Compensation and Human Capital Committee

The Compensation and Human Capital Committee held five meetings in fiscal 2024. The principal functions of the Compensation and Human Capital Committee are to (i) review and approve corporate goals and objectives relevant to the Chief Executive Officer’s (“CEO’s”) compensation, evaluate the CEO’s performance in light of those goals and objectives and set the CEO’s compensation level based on that evaluation; (ii) review and approve compensation levels for non-CEO executive officers; (iii) review significant employee benefit programs; (iv) establish and administer executive compensation programs, including bonus plans, stock option and other equity-based programs, deferred compensation plans and any other cash or stock incentive programs; and (v) oversee and review the Company’s human capital management practices, including talent management, succession planning, diversity, equity and inclusion considerations, and pay equity practices.

For additional information concerning the operation of the Compensation and Human Capital Committee, including the role of outside compensation consultants and management in the process of determining the amount and form of executive compensation, see “Compensation Discussion and Analysis” below.

Compensation and Human Capital Committee Interlocks and Insider Participation

The Company’s Compensation and Human Capital Committee was at all times during fiscal year 2024 comprised entirely of independent directors who at no time were executive officers or employees of the Company. No executive officer of the Company has ever served as a member of the board of directors or compensation committee of any company whose executive officers include a member of the Board of Directors or the Compensation and Human Capital Committee.

Nominating, Governance and Corporate Responsibility Committee

The Nominating, Governance and Corporate Responsibility Committee held four meetings in fiscal 2024. The principal functions of the Nominating, Governance and Corporate Responsibility Committee are to (i) identify individuals qualified to become directors, consistent with criteria approved by the Board of Directors, and recommend director candidates to the Board of Directors; (ii) develop and recommend corporate governance principles to the Board of Directors; (iii) oversee the code of ethics for directors, officers and employees of the Company and assure that procedures are in place for disclosure of any waivers of that code for

directors or executive officers; (iv) facilitate an annual assessment of the performance of the Board of Directors and each of its committees; and (v) oversee the Company’s overall approach to corporate responsibility.

The Board of Directors and individual committee self-assessments typically occur each May or June. The annual Board of Directors self-assessment is organized by the Chair of the Nominating, Governance and Corporate Responsibility Committee who generally circulates a list of proposed key discussion topics as well as current and relevant governance issues in advance of the meeting to each member of the Board of Directors for review, consideration and input. Topics are centered on Board of Directors practices and performance and are intended to and do engender analysis and robust discussion. Management members of the Board of Directors attend and participate in the first part of the self-assessment meeting together with the non-employee directors, after which the non-employee directors meet alone. In addition, the Committee Chair conducts one-on-one meetings with each Board member to elicit feedback on the functioning of the Board. At the first regularly scheduled Board of Directors meeting following the self-assessment meetings, the Nominating, Governance and Corporate Responsibility Committee Chair reports to the full Board of Directors on the results of the Board of Directors self-assessment. Based on those results and any recommendations coming out of the self-assessment, the Board of Directors may implement changes, as appropriate, to its corporate governance guidelines or other processes.

Identifying and Evaluating Candidates for the Board of Directors

In considering possible candidates to serve on the Board of Directors, the Nominating, Governance and Corporate Responsibility Committee will take into account all appropriate qualifications, qualities and skills in the context of the current make-up of the Board of Directors and will consider the entirety of each candidate’s credentials. In addition, the Committee will evaluate each nominee according to the following criteria: personal character, accomplishments, integrity, and reputation in the business community; knowledge of the industry in which the Company does business; sound business judgment; leadership ability and capacity for strategic thinking; experience working constructively with others; sufficient time to devote to Board of Directors matters; diversity of viewpoints and backgrounds; and the absence of any conflict of interest that might interfere with performance as a director. While the Nominating, Governance and Corporate Responsibility Committee has no other policy with respect to the consideration of diversity in identifying nominees, it seeks directors who represent a diverse mix of backgrounds and experiences that will enhance the quality of the Board of Directors’ deliberations and decisions.

Shareholders may recommend director candidates for consideration by the Nominating, Governance and Corporate Responsibility Committee. To have a candidate considered by the Committee, a shareholder must submit the recommendation in writing and must include the following information:

Each such recommendation must be sent to the Secretary of the Company at Movado Group, Inc., 650 From Road, Ste. 375, Paramus, New Jersey 07652-3556 and must be received within the time indicated above under “When are shareholder proposals due for consideration at next year’s annual meeting?” The Nominating, Governance and Corporate Responsibility Committee will evaluate shareholder recommended director candidates in the same manner as it evaluates director candidates identified by other means.

Corporate Governance and Insider Trading Policies

The Company has adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including the Company’s Chief Executive Officer, Chief Financial Officer and principal accounting officer. The Code prohibits, among other things, trading in securities of the Company or other companies while aware of material non-public information about them, or communicating such information to third parties. Although the Company has not adopted any practices or policies specifically prohibiting transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s equity securities, Company policy prohibits short sales and trading in puts, calls and other derivatives of Company stock.

The Company’s Corporate Governance Guidelines and its Code of Business Conduct and Ethics are available on the Company’s website at www.movadogroup.com by clicking on “Investors” and then “Corporate Governance.” The Corporate Governance Guidelines and the Code of Business Conduct and Ethics are also available in print, without charge, upon the written request of any shareholder.

Director Independence

The listing standards of the NYSE require that a majority of the Board of Directors be independent. No director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The Board of Directors broadly considers all relevant facts and circumstances relative to independence and considers the issue not merely from the standpoint of the director, but also from the viewpoint of persons or organizations with which the director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships (among others). In accordance with the NYSE listing standards, the Board of Directors has adopted the following standards regarding director independence:

The Board of Directors has determined that all of the members of the Board of Directors, with the exception of Alex Grinberg and Efraim Grinberg, representing a majority of the entire Board of Directors, are independent under the NYSE listing standards and satisfy the Company’s standards set forth above.

In addition, in accordance with the NYSE listing standards, the Board of Directors has determined that the Compensation and Human Capital Committee and Nominating, Governance and Corporate Responsibility Committee are composed entirely of independent directors. The Board of Directors has also determined that each member of the Audit Committee is independent under the applicable rules of the SEC and under the NYSE listing standards.

Executive Sessions of Non-Management Directors

The non-management directors hold regular executive sessions without management at least once each quarter. The lead director is designated to chair these executive sessions under the Company’s Corporate Governance Guidelines.

Board of Directors Role in Risk Oversight

While management is responsible for managing the various risks that may arise in the course of the Company’s business, the Board of Directors has a role in the oversight of the risk management process. The Board of Directors and, as appropriate, its committees, regularly meet to receive and discuss operating and financial reports presented by the Chair of the Board of Directors and Chief Executive Officer, the Chief Operating and Chief Financial Officer, the General Counsel, the Chief Human Resources Officer, the Chief Technology Officer, the Vice President of Internal Audit and Business Controls and numerous other officers and employees of the Company as well as experts and other advisors. In addition, each year management presents a budget and business plan for the following fiscal year which is reviewed by and discussed with the Board of Directors. Management also regularly discusses with the Board of Directors strategic initiatives and the associated risks. The Board of Directors also reviews specific risk areas on a regular basis. These include insured risks, disaster recovery, management authority and internal controls, litigation risks, risks associated with the Company’s information systems and data privacy, foreign currency risks, risks associated with the Company’s customer mix, supply chain and credit risks, inventory risks and other operational and financial risks. In particular, at least once each quarter the Board or the Audit Committee receives and discusses a cyber-security risk presentation and a data privacy presentation. These presentations include an update on the Company’s ongoing initiatives to raise employee awareness of information security risks. The Audit Committee has particular oversight responsibility with respect to the preparation and audit of the Company’s financial statements and internal audit issues and is specifically charged in its charter to, and does, discuss with management and the independent auditor the Company’s policies with respect to risk assessment and risk management. The Audit Committee concerns itself most specifically with the integrity of the financial reporting process, but also with personnel, asset and information security risk. All committee meetings are open to the non-employee directors.

Compensation Risk Assessment

We reviewed our executive compensation plans and processes and believe that the performance goals and incentive plan structures established under the Company’s executive, annual and long-term incentive programs do not contribute to excessive risk taking by our senior executives or employees. The approved goals under our incentive programs are consistent with our financial operating plans and strategies, and these programs are discussed and reviewed by the Compensation and Human Capital Committee. The Company’s compensation systems are balanced, rewarding both short-term and long-term performance, and its performance goals are team oriented rather than individually focused, and include measurable factors and objective criteria. The Compensation and Human Capital Committee is actively engaged in setting compensation systems, monitoring those systems during the year and using discretion in making rewards, as necessary.

Clawback Policy

The Company maintains a “clawback” policy pursuant to which it is obligated to recoup any excess incentive compensation received by a current or former executive officer in the event that the Company restates its financial statements. The amount to be recouped would be the incentive compensation received by the executive officer during the three fiscal years immediately preceding the date on which the need for a restatement arises over the amount he or she would have received based on the restated results.

As a result of the procedures and practices described above, the Committee believes that the Company’s compensation policies and practices for its employees do not encourage risk taking that is reasonably likely to have a material adverse effect on the Company.

Environmental, Social and Governance Responsibility

Throughout its history, the Company’s environmental, social, and governance (“ESG”) activities have been grounded in its commitment to behave ethically, to manage responsibly, and to improve the quality of life of those within its influence. In fiscal year 2022, the Company adopted a Corporate Responsibility strategy and established ESG goals for its fiscal years 2023 through 2026. These ESG goals have been incorporated into the Company’s “Make Time” Corporate Responsibility strategic plan. The Nominating, Governance and Corporate Responsibility Committee provides strategic vision and oversight; an executive steering committee comprised of the Company’s Chief Executive Officer, Chief Operating and Chief Financial Officer, the Chief Human Resources Officer, and the General Counsel approves plan strategy; the Company’s Director of Corporate Responsibility leads overall plan development, management, tracking and reporting; and plan execution is spread among functional leaders and teams throughout the global enterprise.

The Company periodically issues Corporate Responsibility Reports, which include information about its corporate responsibility strategy, plan and goals, as well as information about the Company’s ESG efforts during the relevant reporting period. To read the Company’s most recent Corporate Responsibility Report, please visit www.movadogroup.com/corporate-responsibility. Such materials are not to be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act.

Communications with the Board of Directors

Shareholders and other interested parties desiring to communicate directly with the full Board of Directors, the Audit Committee, the non-employee directors as a group or with any individual director or directors may do so by sending such communication in writing addressed to the attention of the intended recipient(s), c/o Secretary and General Counsel, Movado Group, Inc., 650 From Road, Ste. 375, Paramus, NJ 07652-3556. Interested parties may communicate anonymously and/or confidentially if they desire. All communications received that relate to accounting, internal accounting controls or auditing matters will be referred to the Chair of the Audit Committee unless the communication is otherwise addressed. All other communications received will be forwarded to the appropriate director or directors.

Director Attendance at Annual Meeting

The Company encourages all of the directors to attend each annual meeting of shareholders. To the extent reasonably practicable, the Company regularly schedules a meeting of the Board of Directors on the same day as the annual meeting. All of the members of the Board of Directors attended the 2023 Annual Meeting of Shareholders.

Executive Officers

The names of the executive officers of the Company (and their respective ages as of the date of this proxy statement) are set forth below, together with the positions held by each during the past five years.

Executive Compensation

The following message from the Chair of the Compensation and Human Capital Committee highlights key aspects of our executive compensation program. A detailed discussion follows in the Compensation Discussion and Analysis (CD&A).

A Letter from the Chair of the Compensation and Human Capital Committee

Dear Fellow Shareholders,

The Compensation and Human Capital Committee (the “Committee”) is pleased to provide an overview of Movado Group’s executive compensation program for fiscal 2024.

It is the goal of the Committee to evaluate and assess that our compensation programs’ structure and metrics align with and reinforce the Company’s strategies and fairly and appropriately incent and reward our management for their performance against set objectives. The Committee will, from time to time, engage the services of third parties as well as discuss its activities and plans with shareholders.

Last year we again engaged directly with our shareholders to seek their input on our executive compensation programs and corporate governance matters. Those discussions were followed by a detailed review of our long-term incentive compensation program, our CEO compensation package, and our compensation program for non-employee directors. We engaged Meridian Compensation Partners, LLC (“Meridian”) to assist us, both in our review during fiscal 2024, and, more recently, to review and advise on changes to our fiscal 2025 programs. As a result of these activities, we made several modifications to the Company’s executive compensation programs which are described below.

Operational and Financial Performance for Fiscal 2024

The Company’s revenue and profit performance in fiscal 2024 reflected a challenging operating environment and did not meet expectations. Net sales decreased 10.5% to $672.6 million and adjusted operating income declined by almost 55%. The Company nevertheless managed to achieve strong operating cash flow of $76.8 million, up 41.3% from fiscal 2023. The Company also ended the year with a solid balance sheet, including $262.1 million in cash and no debt. The Company’s strong financial position will allow it to make important incremental investments in marketing and product innovation that should position the Company for long-term growth. During the year, the Board was pleased to return value to shareholders through a special dividend of $1.00 per share in April 2023 in addition to $1.40 per share in the form of four regular quarterly dividends of $0.35 each.

Linking Pay and Performance

It has been the Committee’s longstanding practice to include both short-term and long-term performance components in our incentive-based compensation program for senior executives. We continued this practice in fiscal 2024 (as well as in fiscal 2025) through:

Fiscal 2024 Annual Incentive Compensation Plan Payouts

The threshold level of performance under the fiscal 2024 AICP was adjusted operating income of $65 million. Since actual adjusted operating income performance fell $8.2 million short of the threshold level, the Committee determined that no payments would be made to any of the named executive officers under the fiscal 2024 AICP.

Fiscal 2024 Long-Term Incentive Plan Design

We held discussions with our largest shareholders in the spring of 2022 seeking their input on executive compensation matters. During these discussions, the shareholders expressed their preference for equity awards conditional on the achievement of multi-year financial and operating performance targets rather than stock options. In light of this input and as part of a general review of best practices in executive compensation, in September 2022 the Committee engaged Meridian to evaluate and make recommendations with respect to our long-term incentive compensation program, our CEO compensation package, and our compensation program for non-employee directors. Upon completion of Meridian’s review, the Committee held additional discussions with several of our largest institutional shareholders in March 2023, before finalizing our fiscal 2024 compensation programs. Taking into account Meridian’s advice and the feedback received from shareholders, the Committee revised the Company’s executive long-term incentive compensation program for fiscal 2024 to replace stock options with two tranches of PSUs. A description of the new PSUs is included in the table below. In addition, while keeping the CEO’s and most other NEOs’ salaries and target bonuses unchanged from fiscal 2023 levels, the Committee increased the CEO’s target equity grant value for fiscal 2024, with the majority of the increase coming in the form of the new PSUs.

Looking Ahead - Fiscal 2025 Incentive Plan Design Changes

Based on the Company’s performance in fiscal 2024 and its strategic priorities for fiscal 2025, the Committee made certain changes to the Company’s incentive compensation programs for fiscal 2025. In order to emphasize revenue growth, the Committee added revenue as a performance measure under the fiscal 2025 AICP and increased the percentage of the fiscal 2025 PSU payouts that will be based on net sales performance. In addition, recognizing the potential for greater performance volatility due to market conditions and the significant incremental marketing and product innovation investments being made in fiscal 2025, the Committee reduced the range of potential payouts under the fiscal 2025 PSUs and based the performance measurements on fiscal 2026 targets and results, while maintaining a three-year vesting period. The Committee also added to the fiscal 2025 AICP a component related to the achievement of several strategic initiatives that are closely aligned with the Company’s growth strategy. Maximum payouts under the fiscal 2025 AICP were also reduced.

The below table summarizes the evolution of the Company’s incentive plans since fiscal 2023.

The Committee believes that the changes to our compensation programs will increase the linkage of executive compensation to the Company’s long-term performance and value creation for our shareholders.

As always, we welcome your feedback on our compensation programs and disclosure.

Sincerely,

Alan H. Howard

Chair, Compensation and Human Capital Committee

Compensation Discussion and Analysis

Fiscal 2024 Highlights

This section summarizes the Company’s compensation philosophy and demonstrates how that philosophy impacted its executive compensation programs and decisions in fiscal 2024. This section also provides an overview of the Company’s operational and financial performance in fiscal 2024.

Compensation Philosophy

While the Company considers a number of factors in its compensation decisions, it is guided by the following core philosophies and principles:

The below checklist demonstrates the alignment of the Company’s practices with its pay philosophies.

Shareholder Engagement

The Compensation and Human Capital Committee (as used in this Compensation Discussion and Analysis, the “Committee”) actively solicits and considers feedback from shareholders regarding the Company’s executive compensation programs. In the spring of 2022 and in March 2023, we held discussions regarding corporate governance and compensation matters with several of our largest shareholders. During the discussions, the shareholders expressed a preference for long-term incentive programs with vesting conditions tied to financial performance over a multi-year period, although the shareholders were not prescriptive as to program structure.

Taking into account the feedback received from shareholders and the review conducted by Meridian, the Committee revised the Company’s long-term incentive executive compensation program for fiscal 2024 to replace stock options with performance-based restricted stock units. The Committee intends to continue this structure in future years. The Committee also increased the CEO’s target equity grant value for fiscal 2024, with the majority of the increase in the form of the new PSUs. Based on shareholder input, the Committee also capped payouts under the Company’s fiscal 2024 Annual Incentive Compensation Plan at 200%.

At the 2023 annual meeting, approximately 98% of the votes represented and 99% of the votes cast voted in favor of our shareholders’ advisory vote on executive compensation. In addition, more than 98% of the votes cast at our 2023 annual meeting expressed a preference for annual advisory votes on executive compensation. In accordance with the shareholders’ stated preference, the Board of Directors decided that such future advisory votes would be submitted to shareholders every year. Shareholders are invited to express their views to the Board of Directors regarding executive compensation generally as well as on other matters as described in this proxy statement under the heading “Communications with the Board of Directors.”

Compensation Mix

The Company’s pay mix for executives in fiscal 2024 reflected our compensation philosophy that a significant portion of executive pay should be at risk and that incentives should be appropriately balanced between short-term and long-term. The changes to the CEO’s target compensation for fiscal 2024 discussed above further increased the portion of the CEO’s pay that is based on current and future financial performance from 37.5% to 66%. The graph below illustrates the compensation mix for our CEO’s fiscal 2024 target pay package.

 

2024 Pay-for-Performance Alignment

The Company’s executive compensation programs are designed to incentivize performance that creates shareholder value. Our long-term incentives are comprised of equity-based awards that align our executives’ interests with those of shareholders during the three-year vesting period and beyond. At the same time, our annual incentive compensation plan is designed to reward performance that we believe will lead to sustainable, long-term profitable growth and enhance shareholder value.

Although the specific performance criteria under the AICP vary from year to year, adjusted operating income¹ has been the primary factor in the payout determination in recent years. The chart below illustrates the relationships among actual and targeted adjusted operating income and the CEO’s actual and target bonus over the last four fiscal years.²

 

Role of the Compensation and Human Capital Committee

The Compensation and Human Capital Committee is responsible for reviewing and approving annually corporate goals with respect to the compensation of the Company’s Chief Executive Officer (“CEO”), evaluating the performance of the CEO against those goals, and determining the CEO’s compensation based on that evaluation. In addition, the Committee also reviews and approves the structure and levels of compensation for the Company’s other executive officers; reviews and approves significant compensation programs generally, including performance goals under annual and long-term incentive plans; and reviews and administers the Company’s 1996 Stock Incentive Plan, as amended and restated (the “Stock Plan”). Throughout this proxy statement, the individuals who served as the Company’s CEO or Chief Financial Officer (“CFO”) during fiscal 2024, as well as the other individuals included in the SUMMARY COMPENSATION TABLE below, are referred to as the “named executive officers” or “NEOs.”

Compensation Objectives

The fundamental purpose served by every compensation recommendation made by the Company and approved by the Committee is to appropriately reward, motivate, retain and attract a group of highly qualified individuals who contribute to the Company’s continued success, with the ultimate objective of enhancing shareholder value. The three most significant elements of compensation used by the Company in developing specific compensation packages offered to its executives and management level employees generally are: (1) base salary, (2) annual incentive cash bonuses, and (3) long-term equity compensation. Of these, annual incentive cash bonuses and equity compensation vary with performance, are closely linked to the creation of long-term shareholder value and, as such, most closely align executives’ interests with those of the Company’s shareholders. The Company and the Committee believe that the most effective executive compensation programs are those designed to reward the achievement of specific strategic and financial goals set by the Company and those that are closely linked to the creation of long-term shareholder value; therefore, a significant portion of the total compensation that may be earned by the NEOs is determined by these performance-based elements.

Setting Executive Compensation

With the foregoing objectives in mind, the Company determines overall compensation levels for the executive officers based on particular facts and circumstances, including, for example, the experience level and performance of the individual executive, the scope of the executive’s role and market factors.

The Committee periodically consults with, or engages the services of, independent executive compensation and benefits firms to advise on the structure of the Company’s compensation programs and to assist it in assessing the competitiveness of the Company’s executive and non-employee director compensation levels. As described above under “Shareholder Engagement,” in September 2022 the Committee engaged Meridian with respect to the design of our long-term equity incentive compensation program for senior executives, the CEO’s compensation package for fiscal year 2024, and non-employee director compensation.

The Committee does not rely solely on available compensation data from any single group of companies because the Committee believes that the Company competes for top executive talent with many larger companies in addition to companies that may be considered to be the Company’s peers.

Consistent with the Company’s compensation philosophy, a significant percentage of total compensation, particularly in the case of the NEOs, is allocated to performance-based incentive compensation. The Committee reviews information made available to it periodically from outside compensation consultants and annually from the Company’s Chief Human Resources Officer to determine the appropriate level and mix of incentive compensation as among cash and non-cash or short-term and long-term incentive compensation. In setting the compensation for the CEO and the other NEOs for fiscal 2024, the Committee considered the financial performance of the Company in fiscal 2023, the Company’s projected financial performance in fiscal 2024, the Company’s historical base pay, bonus and equity grant data from previous years, and information relating to compensation survey data.

The Committee makes all compensation decisions affecting the compensation awarded to the CEO. With respect to the compensation of the other NEOs, the Committee considers the recommendations of the CEO and the Chief Human Resources Officer, including recommendations regarding salary adjustments and annual target award amounts. Subject to any applicable plan limitations, the Committee may modify any recommended adjustments or awards to executives. The Committee also reviews total compensation earned by and awarded to the NEOs for prior years.

Fiscal 2024 Executive Compensation Components

For the fiscal year ended January 31, 2024, the principal components of compensation for the named executive officers were:

Base Salary

The Company provides NEOs and other employees with base salary to compensate them for services rendered during the fiscal year. Base salaries for NEOs are determined by the Committee for each individual in light of the Committee’s assessment of the responsibilities relative to the position under consideration, as well as each individual’s background, training and experience, and by reference to the competitive marketplace for comparable talent. Increases in base salary levels, if warranted, are reviewed with reference to the individual’s performance, the performance of the Company as a whole and the prevailing rate of increase in base salary levels generally in the competitive marketplace with respect to similar executive positions. During its review of base salaries for executives, the Committee primarily considers:

For fiscal 2024, the salaries of the CEO ($1,250,000), Ms. DeMarsilis ($650,000) and Mr. Soltani ($600,000) remained unchanged from fiscal 2023. Mr. Sussis’ salary was increased from $420,000 to $450,000. Ms. Kennedy, who joined the Company in May 2023 to succeed former Senior Vice President of Human Resources Vivian D’Elia upon Ms. D’Elia’s retirement, earned an annual salary of $450,000 during fiscal 2024.

Performance-Based Annual Incentive Compensation – Structure

The Company’s annual performance-based incentive compensation program is governed by the Annual Incentive Compensation Plan, in which all bonus-eligible employees (including the NEOs) participate. This plan is designed to tie a significant portion of participants’ annual cash compensation to the Company’s annual financial performance.

For fiscal 2024, the Committee set the target annual incentive payments for the CEO at 150% of his base salary; for Ms. DeMarsilis at 75% of her base salary; for Mr. Soltani at 75% of his base salary; and for Mr. Sussis at 50% of his base salary. These percentages were unchanged from fiscal 2023, except that Mr. Sussis’ target was increased by 10% of base salary. Ms. Kennedy’s target AICP payment was set at 50% of base salary when she joined the Company in May 2023. The Committee determines the target bonus for each NEO by exercising its judgment of what an appropriate percentage is, informed by a consideration of such person’s total compensation compared to target bonus levels and total compensation payable to other executive officers in other positions within the Company and relative to similar executive positions in the competitive marketplace.

In determining the annual cash incentive to be paid to each NEO, the Committee assesses the extent of achievement of the financial performance target(s) and each NEO’s individual performance. In fiscal 2024, the Committee established adjusted operating income of $85 million as the target for 100% bonus pool funding for all bonus-eligible employees. The Committee also established threshold and maximum levels of adjusted operating income performance of $65 million and $105 million, respectively. Under the program, NEOs would be eligible for a bonus payout of between 50% and 100% of the target payout for adjusted operating income performance between the threshold and target levels, a bonus payout of between 100% and 150% for performance between the target and maximum levels, and a bonus payout of between 150% and 200% for performance in excess of the maximum level.

In addition to financial performance and the overall level of bonus pool funding, the Committee also considers individual performance in determining the amount of each NEO’s bonus payment under the Annual Incentive Compensation Plan. There is no specific relative weight given by the Committee to the financial performance of the Company as compared to the individual performance of any NEO. The Committee determines the amount of each NEO’s annual incentive payment regardless of the extent to which any of the performance criteria (individual or corporate) are met. However, the Committee does, in practice, take into account these criteria, including individual performance. In considering individual performance, the Committee is briefed by, and relies on a general summary assessment and recommendation provided by, the Company’s CEO and/or Chief Human Resources Officer relative to the performance of the NEOs (other than the CEO). That summary assessment and recommendation addresses the individual performance goals of the NEO as well as his or her overall performance. when it considers the individual performance of the CEO in determining the annual incentive payment to be made to him, the Committee considers the CEO’s individual performance goals, the performance of the business viewed holistically and the economic context relevant to the performance.

Performance-Based Annual Incentive Compensation – Fiscal 2024 Payouts

In determining the AICP payouts for fiscal 2024, the Committee started its analysis by reviewing adjusted operating income performance relative to the threshold, target and maximum performance levels established for the plan. Since actual fiscal year 2024 adjusted operating income performance fell $8.2 million short of the $65 million threshold level, the Committee determined that no payments would be made to any of the NEOs under the fiscal 2024 AICP, regardless of their individual performance and despite strong operating cash flow performance.

Equity Incentive Compensation

Stock ownership is a key element of the Company’s compensation program for the NEOs and senior management generally, as well as mid-level managers throughout the Company. Under the Stock Plan, the Committee may grant participants shares of the Company’s Common Stock, restricted stock, share units, stock options, stock appreciation rights, performance units and/or performance bonuses. In granting these awards, the Committee may establish any conditions or restrictions it deems appropriate.

All grants made by the Committee under the Stock Plan since its inception have been in the form of stock options, time-vesting restricted stock unit awards (pursuant to which unrestricted shares of Common Stock are issued to the grantee when the award

vests) or performance-based stock unit awards (under which vesting occurs only if one or more predetermined financial goals are achieved within the relevant performance period). The Committee believes that all of these equity awards align the interests of executives with the creation of long-term value for our shareholders and that each of these equity awards has particular attributes that align compensation outcomes with Company performance. The Committee views these equity awards as useful retention tools to the extent that vesting only occurs after a period of several years and are also an effective means of encouraging award recipients to focus on enhancing shareholder value over the long term by directly aligning the recipient’s financial interests with the interests of the Company’s shareholders. However, although the Stock Plan allows for the grant of so-called “reload options,” the Committee has not granted reload options since 2001 and does not intend to grant reload options in the future. The Committee typically makes annual grants under the Stock Plan effective shortly after the release of the Company’s fourth quarter and year-end earnings results.

For fiscal 2024, the Committee continued its practice of granting time-based restricted stock unit awards (“RSUs”) as part of the Company’s long-term incentive compensation program. However, after taking into account Meridian’s advice and feedback received from shareholders, the Committee revised the program for fiscal 2024 to replace the stock option component with two tranches of performance-based restricted stock units (“PSUs”). A description of the new PSUs is included above under “A Letter from the Chair of the Compensation and Human Capital Committee.” In addition, while keeping the CEO’s and most other NEOs’ salaries and target bonuses unchanged from fiscal 2023 levels, the Committee increased the CEO’s target equity grant value for fiscal 2024, with the majority of the increase coming in the form of the new PSUs. Both the RSUs and the PSUs cliff-vest three years from the grant date, with the actual number of shares earned under the PSUs being determined based on performance against established targets for net sales and net cash provided by operating activities over a three-year performance period. The CEO’s total equity grant was valued at approximately 287% of his target bonus, and each other NEO’s total equity grant was valued at 100% of his or her target bonus. Approximately 71% of the value of the CEO’s equity grant was made in the form of PSUs and approximately 29% was made in the form of RSUs. Approximately half the value of each other NEO’s equity grant was made in the form of PSUs and approximately half was made in the form of RSUs. In addition to her annual grant under the fiscal 2024 long-term incentive compensation program, Ms. Kennedy also received a sign-on grant of RSUs valued at $175,000, with such RSUs vesting ratably on each of the first three anniversaries of the grant date. All equity grants awarded to the NEOs during fiscal 2024 are reported below in the SUMMARY COMPENSATION TABLE FOR FISCAL 2024 and in the GRANTS OF PLAN-BASED AWARDS table.

Retirement and Other Post-Employment Benefits

401(k) Plan

All employees in the United States, including the NEOs, are eligible to participate in the Company’s Employee Savings and Investment Plan (“401(k) Plan”), a tax-qualified defined contribution retirement savings plan that includes a Company matching contribution feature.

Deferred Compensation Plan

The NEOs and certain other executives selected by the Committee are eligible to participate in the Company’s Amended and Restated Deferred Compensation Plan for Executives (“DCP”). The DCP is designed to offer retirement benefits to the NEOs, senior management and key employees, consistent with overall market practices, to attract and retain the talent needed in the Company. Under the DCP, participants may defer amounts from their base salary and cash bonus (if any) annually, and the Company will credit to the account of each participant a matching contribution in an amount equal to one hundred percent of the compensation deferral, up to a maximum match equal to either 10% (for “Group I” participants) or 5% (for “Group II” participants) of the participant’s base salary. During fiscal 2024, Messrs. E. Grinberg and Soltani and Ms. DeMarsilis were Group I participants and Mr. Sussis and Ms. Kennedy were Group II participants. Twenty percent of the Company’s matching contribution is in the form of rights to receive Common Stock. All matching contributions vest ratably in annual installments over five years.

The DCP also permits the Company to make discretionary contributions to any participant’s DCP account. Consistent with recent years (except for fiscal 2021, which was significantly impacted by the COVID-19 pandemic), the Committee exercised its discretion to supplement Mr. E. Grinberg’s matching contributions for fiscal 2024. Specifically, in March 2023, the Committee approved supplementary discretionary contributions such that the total Company contributions to the CEO’s DCP account amounted to $250,000 for fiscal 2024. Such supplemental contributions were made ratably over the balance of fiscal 2024. Eighty percent of such contributions were made in cash and the balance in rights to receive Common Stock, in each case vesting ratably in annual installments over five years.

Participants may direct the investment of amounts in their DCP accounts (other than rights to receive Common Stock) among third-party investment funds that are made available to them under the plan. Those funds largely track the funds offered under the 401(k) Plan. Further information regarding the participation by the NEOs in the DCP is discussed in further detail under the heading “NONQUALIFIED DEFERRED COMPENSATION” below.

Severance and Change of Control Agreements

The Company does not have severance agreements with any of the NEOs. See POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL, below, for a description of certain compensation plan benefits that apply in the event of a change in control of the Company or the death or disability of an NEO.

Perquisites and Other Personal Benefits

As part of providing a competitive executive compensation program, the Company provides to the CEO and the other NEOs certain perquisites, described below, that the Company and the Committee believe are reasonable and consistent with its overall compensation program. The Committee reviews annually the levels of perquisites provided to the NEOs.

The Company provides each of its NEOs with a taxable car allowance and, in the case of the CEO, automobile insurance reimbursement.

The Company pays the CFO a taxable housing allowance for the rental of an apartment located near the Company’s New Jersey headquarters.

The Company has purchased life insurance policies insuring the CEO and pays the premiums for that insurance. Under the Company’s arrangement with the CEO, the named insured is entitled to the cash surrender value in respect of these life insurance policies and the respective beneficiaries are entitled to the applicable death benefits without, in either event, reimbursement to the Company.

Attributed costs of the perquisites described above for the NEOs for fiscal 2024 are included in the “All Other Compensation” column of the SUMMARY COMPENSATION TABLE below.

Tax and Accounting Implications

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the annual amount of compensation that publicly held companies may deduct for federal income tax purposes for certain “covered employees,” including our NEOs. The Committee reviews compensation plans in light of applicable tax provisions, including Section 162(m), and may revise compensation plans from time to time. However, the Committee approves compensation that does not qualify for deductibility when deemed to be in the Company’s best interests.

Accounting for Stock-Based Compensation

The Company accounts for stock-based payments in accordance with the requirements of FASB ASC Topic 718. The Committee considers the expense implications of equity compensation awards in determining aggregate annual award levels.

Compensation and Human Capital Committee Report

The Compensation and Human Capital Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and the Company’s Annual Report on Form 10-K for the year ended January 31, 2024.

THE COMPENSATION AND HUMAN CAPITAL COMMITTEE

Alan H. Howard, Committee Chair, Lead Director

Ann Kirschner

Stephen Sadove

Summary Compensation Table For Fiscal 2024

The following Summary Compensation Table sets forth information about the compensation paid in respect of fiscal 2024 by the Company to the CEO, the CFO and the three most highly compensated executive officers of the Company other than the CEO and the CFO who were serving as executive officers at January 31, 2024. The foregoing individuals are referred to in this proxy statement as the “named executive officers.”

Grants of Plan-Based Awards in Fiscal 2024

Outstanding Equity Awards at Fiscal 2024 Year-End

Option Exercises and Stock Vested During Fiscal 2024

Nonqualified Deferred Compensation

Under the Company’s DCP, participants may defer amounts from their base salary and cash bonus, if any, annually and the Company will credit to the account of each participant a matching contribution in an amount equal to the deferral, up to a maximum match of either 10% or 5% of the participant’s base salary (depending on whether the participant is included in Group I or Group II, as defined in the DCP). During fiscal 2024, Messrs. E. Grinberg and Soltani and Ms. DeMarsilis were in Group I; and

Mr. Sussis and Ms. Kennedy were in Group II. Deferral elections must be made no later than December 31 of the year before the year in which the salary or bonus will be deferred. Twenty percent of the Company’s matching contribution is made in the form of rights to the Company’s Common Stock, representing the number of shares (including fractional shares) of Common Stock that the matching contribution could purchase based upon the New York Stock Exchange’s closing price of the stock on the date when the matching contribution is made. Matching contributions are made on the last business day of each calendar quarter. The Company also has the right to make discretionary contributions to any participant’s account in such amount and in such manner as it shall determine.

The following table shows the deferrals made by the NEOs and the contributions made by the Company under the DCP in fiscal 2024.

NONQUALIFIED DEFERRED COMPENSATION IN FISCAL 2024

A participant’s compensation deferrals and any earnings on those deferrals are immediately vested. Company matching contributions and any discretionary contributions vest at the rate of 20% per year so long as the participant remains employed by the Company. A participant who attains the age of 65 or whose employment terminates due to death or disability automatically vests in all amounts in such participant’s account. A participant may also vest in all amounts credited to his or her account upon their “separation from service” as defined under Code Section 409A and the Treasury Regulations promulgated thereunder after attaining the age of 55, provided the participant has been employed by the Company or one of the Company’s affiliates for at least 10 years and further subject to the approval of the Compensation and Human Capital Committee, including any limitations or conditions such committee may, in its discretion, impose which are not inconsistent with the terms of the DCP (including, without limitation, a covenant not to compete with the Company or any Company affiliate). A participant whose employment terminates for any other reason forfeits unvested amounts. If there is a “change in control” (as defined in the DCP) of the Company, all amounts attributable to matching contributions and discretionary Company contributions become fully vested on the date of such change in control.

Participants may direct the investment of amounts in their accounts (other than rights to receive Common Stock) among third-party investment funds that largely track the funds offered under the 401(k) Plan.

Participants in the DCP elect as part of their initial deferral election whether to receive distributions after termination of their employment in a lump sum or in 10 equal annual installments. Payments are made in Common Stock to the extent a participant’s vested account balance is denominated in Common Stock, except for any fractional shares which are paid in cash. All other payments are made in cash. Payments generally are made or begin only upon the expiration of six months following the participant’s separation of service from the Company except to the extent that the payments are payable during the short-term deferral period set forth in Treasury Regulation Section 1.409A-1(b)(4). In the event that an exception to the six-month delay provision applies, payments are made or begin within 90 days after a participant’s employment terminates.

Potential Payments on Termination or Change In Control

None of the NEOs have employment agreements or severance agreements. However, the DCP and awards granted under the Stock Plan prior to fiscal year 2024 provide for accelerated vesting of Company matching contributions and of equity compensation (stock options and stock awards), respectively, in the event of a change in control. Starting in fiscal 2024, awards granted under the Stock Plan provide for accelerated vesting in connection with a change in control only if the grantee’s employment is terminated without cause during the two years immediately following the change in control. The Stock Plan also provides for accelerated vesting of equity awards in the event of a participant’s death, disability or retirement.

Change in Control

In the event of a change in control of the Company, all unvested matching contributions under the DCP and all unvested equity awards granted prior to fiscal year 2024 then outstanding under the Stock Plan immediately vest. In addition, in the event a grantee’s employment is terminated without cause during the two years immediately following a change in control, all unvested equity awards granted in fiscal year 2024 or later and then outstanding under the Stock Plan immediately vest, with the Compensation and Human Capital Committee determining in its discretion the number of shares earned in respect of PSUs (but capped at the number of shares that would be earned at maximum performance).

Both the Stock Plan and the DCP have identical definitions for what is considered a “change in control,” including:

The following table shows the value of accelerated vesting of stock options and stock awards under the Stock Plan and of Company contributions under the DCP that would have been provided to the NEOs in the event that a change in control of the Company had occurred immediately after the close of business on January 31, 2024.

Death or Disability; Retirement

If any of the NEOs dies or becomes permanently disabled, their unvested Company contributions under the DCP and their unvested stock options and stock awards under the Stock Plan would immediately vest; provided that disability vesting under the Stock Plan only applies after ten years of service with the Company. Retirement triggers immediate vesting (i) under the Stock Plan if the retiring employee is at least age 65 and (ii) under both the Stock Plan and the DCP if the retiring employee is at least age 55 and has been employed continuously by the Company for at least 10 years and the Compensation and Human Capital Committee approves the immediate vesting. As part of its approval, the Committee may impose any conditions as it deems to be appropriate which are not inconsistent with the express terms of the subject plan, including covenants dealing with non-competition, non-disparagement, non-solicitation and confidentiality. The values of such early vesting under both plans as of January 31, 2024, are shown in the table above (or, in the case of Mr. Grinberg, in footnote 4 thereto); provided that, since Messrs. Soltani and Sussis and Ms. Kennedy have less than ten years of service and are under age 65, they would not qualify for disability vesting under the Stock Plan and would not qualify for retirement vesting under either the Stock Plan or the DCP. All employer contributions to the DCP become fully vested upon attainment of 65 years of age even if the participant remains in active status.

Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship of the annual total compensation of CEO Efraim Grinberg to that of our median employee.

To identify the median employee, we used the total calendar 2023 compensation as reflected in our tax records for all employees, excluding our CEO, who were employed by us on January 31, 2024. We included full-time, part-time, seasonal and temporary employees. We converted compensation paid in foreign currencies using the applicable prevailing exchange rate in effect on December 31, 2023. We annualized the compensation for employees who joined the Company after January 1, 2023.

After identifying the median employee, we calculated annual total compensation for the median employee using the same methodology we used for determining total compensation for our NEOs as shown in the Summary Compensation Table for Fiscal 2024 above. For fiscal 2024, the annual total compensation of Efraim Grinberg was $5,091,430 and the annual total compensation of our median employee was $35,865, resulting in a ratio of 142 to 1. Excluding United States-based part-time employees, the ratio would be 79 to 1.

The SEC rules for identifying the median employee and calculating the pay ratio permit companies to use various methodologies and assumptions, to apply certain exclusions and to make reasonable estimates that reflect their employee population and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio that we have reported.

 

 

Director Compensation

No employee of the Company receives any additional compensation for serving on the Board of Directors. The annual base compensation paid to the non-employee directors remained unchanged for fiscal 2024 and consisted of an $85,000 cash retainer and an equity component valued at approximately $125,000 in the form of a stock award, cliff-vesting in one year. In addition to the annual base compensation, the annual retainers paid to the committee chairs were as follows: Audit: $25,000 (increased from $17,500 in fiscal 2023); Compensation and Human Capital: $20,000 (increased from $12,500); and Nominating, Governance and Corporate Responsibility: $17,500 (increased from $12,500). The Board also initiated annual retainers for non-chair committee members in the amount of $7,500 for the Audit Committee and $5,000 for the other committees. The lead director received an annual cash retainer of $50,000 and an equity component valued at $25,000, which retainers remained unchanged from fiscal 2023. The cash compensation is paid quarterly and the equity grants are made annually after the reporting of financial results for the prior fiscal year. Each director was also granted an annual allowance for the purchase of Company watches up to an aggregate suggested retail value of $6,000.

Recognizing that ownership of the Company’s Common Stock more closely aligns non-employee director interests with the long-term interests of shareholders and is consistent with best governance practices, the Board of Directors maintains stock ownership guidelines for the non-employee directors to the effect that each non-employee director is expected to beneficially own shares of the Company’s Common Stock with a market value of at least $250,000.

The following table shows the cash amounts and the value of other compensation paid to each non-employee director in respect of fiscal 2024: