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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☑
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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NU SKIN ENTERPRISES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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☑
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No fee required
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☐
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
NU SKIN ENTERPRISES, INC. |
1. |
To elect the nine directors named in the attached proxy statement;
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2. |
To hold an advisory vote to approve our executive compensation;
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3. |
To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2022; and
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4. |
To transact such other business as may properly come before the Annual Meeting.
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By Order of the Board of Directors,
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STEVEN J. LUND
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Chairman of the Board
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Provo, Utah
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April 12, 2022
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PROXY SUMMARY
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Date: |
June 2, 2022
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Time: | 11:00 a.m., Mountain Daylight Time |
Access:
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Due to continuing concerns with the COVID-19 pandemic, the Annual Meeting will be held virtually, with attendance via live audio webcast. You will not be able to attend the Annual Meeting in person.
Details for accessing the meeting are provided in this proxy statement.
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Record date:
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April 5, 2022
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Proposal
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Board
Recommendation
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More
Information
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1.
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Election of the nine directors named in this proxy statement
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For each director
nominee
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Page 3
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2.
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Approval of our executive compensation*
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For
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Page 49
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3.
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Ratification of the selection of PricewaterhouseCoopers LLP as
our independent registered public accounting firm for 2022*
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For
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Page 51
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Skills and Experience
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Other public company board/exec. experience
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Corporate finance/transactions
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International experience/global operations
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Government relations
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Regulatory
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Risk management
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Sales/marketing
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Online or digital marketing
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Strategic planning
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Current Nu Skin Committee Service
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Audit Committee
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Compensation and Human Capital Committee
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Nominating and Corp. Governance Committee
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Other Characteristics
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Independence
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Gender diversity
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Racial/ethnic diversity
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Age
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61
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67
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70
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68
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48
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64
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77
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42
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70
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Tenure (years)
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1
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25
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23
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26
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1
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14
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6
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7
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Average Tenure
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12 years
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Average Age
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63 | ||||
Independence
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Committee Independence
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Diversity | |||||
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Gender Diversity
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Racial/Ethnic Diversity
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1
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3
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8
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PROXY STATEMENT
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1. |
To elect the nine directors named in this proxy statement;
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2. |
To hold an advisory vote to approve our executive compensation;
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3. |
To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2022; and
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4. |
To transact such other business as may properly come before the Annual Meeting.
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Proposal 1. If an incumbent director does not receive the
required majority, the director shall resign pursuant to an irrevocable resignation that was required to be tendered prior to his or her nomination and effective upon (i) such person failing to receive the required majority vote and
(ii) the Board’s acceptance of such resignation. Within 90 days after the date of the certification of the election results, the Board will determine whether to accept or reject the resignation or whether other action should be taken,
and the Board will publicly disclose its decision.
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Proposals 2 and 3. Proposals 2 and 3 are stockholder advisory
votes and will not be binding on the Board of Directors.
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Emma S. Battle
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Director since 2021
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Compensation and Human Capital Committee
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Nominating and Corporate Governance Committee
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Emma S. Battle, 61, has served as the President and Chief Executive Officer of Market Vigor, LLC, a business services company focused on strategic consulting and digital and
online marketing, since she founded the company in 2003. From 2015 to 2017, Ms. Battle was Vice President of Client Success at Windsor Circle, an e-commerce marketing company. Previously, she served in executive and senior marketing and
sales roles at Three Ships Media, Red Hat, Art.com, 1 Sync and Sara Lee Branded Apparel (now known as Hanesbrands Inc.). Ms. Battle has served on the board of directors of Unifi, Inc., a global textile solutions provider listed on the
NYSE, since January 2021 and of Bassett Furniture Industries, Inc., a manufacturer and marketer of home furnishings listed on the Nasdaq Global Select Market, since October 2020. From 2019 to 2020, she was on the board of directors of
Primo Water Corporation, a provider of drinking water products that was listed on the Nasdaq Global Market until the company was acquired in 2020. Ms. Battle pursues continuing education through online classes and membership in
professional organizations like Brentwood Advisory Group, and supports and collaborates with current and aspiring board directors through UNC’s Director Diversity Initiative, Onboard NC, Santa Clara University’s Black Corporate Board
Readiness program and the Take Your Seat initiative. Ms. Battle also devotes time to charitable and civic causes; since 2017 she has served as the President and Chief Executive Officer of Higher Ed Works, a charitable organization that
supports public higher education in North Carolina, and she also serves on the boards of FPG Child Development Institute and Elon University’s School of Business. She received a B.A. degree from Duke University and a M.B.A. degree from
Harvard Business School.
Ms. Battle is a successful businessperson with an extensive background in digital and online marketing, marketing analytics, and business and marketing strategy, which is valuable
to the Board as we continue to build our digital business. She also brings to the Board her perspective from working with other large corporations and on other public company boards. In addition, Ms. Battle’s experience managing and
consulting with smaller, entrepreneurial businesses provides a valuable perspective in managing our business in a manner that is effective for our independent sales force. The Board also values Ms. Battle’s commitment to sustainability
and social responsibility, which are two areas of focus for our company and many stockholders.
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Daniel W. Campbell
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Director since 1997
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Lead Independent Director
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Audit Committee
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Compensation and Human Capital Committee
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Daniel W. Campbell, 67, has been a Managing General Partner of EsNet, Ltd., a privately held investment company, since 1994. He served on the Utah State Board of Regents for
Higher Education from 2010 to 2019, having served as its Vice Chair from 2012 to 2014 and as Chair from 2014 to 2018. From 1992 to 1994, Mr. Campbell was the Senior Vice President and Chief Financial Officer of WordPerfect Corporation, a
software company, and prior to that was a partner of Price Waterhouse LLP. He received a B.S. degree from Brigham Young University.
Mr. Campbell is a recognized business leader with expertise in the areas of finance, accounting, transactions, corporate governance and management. He has served on the boards of
several other private and public companies. In addition, through his experience as a partner of an international accounting firm, and later as Chief Financial Officer of a large technology company, Mr. Campbell has developed deep insight
into the management, operations, finances and governance of public companies.
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Andrew D. Lipman
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Director since 1999
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Audit Committee
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Nominating and Corporate Governance Committee
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Andrew D. Lipman, 70, is a partner and head of the Telecommunications, Media and Technology Group at Morgan, Lewis & Bockius LLP, an international law firm that he joined in
2014. He previously held similar positions with Bingham McCutchen LLP from 2006 to 2014 and Swidler Berlin LLP from 1988 to 2006. From 2000 to 2013, Mr. Lipman served as a member of the board of directors of The Management Network Group,
Inc., a telecommunications related consulting firm, and from 2005 to 2013, he served as a member of the board of directors of Sutron Corporation, a provider of hydrological and meteorological monitoring products. He received a B.A. degree
from the University of Rochester and a J.D. degree from Stanford Law School.
Mr. Lipman is a highly experienced senior lawyer and business advisor with over 40 years of experience dealing with international regulatory, technology and marketing issues in
multiple countries. In addition, he has extensive experience in corporate governance and related legal and transactional issues. Mr. Lipman has worked closely with dozens of public companies, including service on the boards of a variety
of companies in several industries. His experience also includes managing and implementing strategic initiatives and launching new products and markets globally in competitive industries.
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Steven J. Lund
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Director since 1996
(includes three-year
leave of absence)
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Executive Chairman of the Board
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Steven J. Lund, 68, has served as the Chairman of the Board since 2012. Mr. Lund previously served as Vice Chairman of the Board from 2006 to 2012. Mr. Lund served as President,
Chief Executive Officer and a director of our company from 1996, when our company went public, until 2003, when he took a three-year leave of absence. Mr. Lund was a founding stockholder of our company. Mr. Lund is a trustee of the Force
for Good Foundation, a charitable organization that our company established in 1996 to help encourage and drive the philanthropic efforts of our company, its employees, its sales force and its customers to enrich the lives of others. Mr.
Lund worked as an attorney in private practice prior to joining our company as Vice President and General Counsel. He received a B.A. degree from Brigham Young University and a J.D. degree from Brigham Young University’s J. Reuben Clark
Law School.
Mr. Lund brings to the Board over 35 years of company and industry knowledge and experience as a senior executive, including service as our General Counsel, Executive Vice
President, and President and Chief Executive Officer. He played an integral role in managing our growth from start-up through his term as President and Chief Executive Officer. Mr. Lund also served on the Executive Board of the United
States Direct Selling Association. A respected leader in his business, religious and civic communities, he currently serves as a general officer of The Church of Jesus Christ of Latter-day Saints and serves on this Church’s Board of
Education with oversight of its institutions of higher education, including Brigham Young University. He previously served on the Utah State Board of Regents for Higher Education and as Chairman of the Board of Trustees of Utah Valley
University.
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Ryan S. Napierski
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Director since 2021
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President and Chief Executive Officer
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Ryan S. Napierski, 48, has served as our company’s CEO since September 2021 and as President since 2017. Previously, he served as President of Global Sales and Operations from
2015 to 2017. Prior to serving in that position, he served as both President of our North Asia region since 2014 and President of Nu Skin Japan since 2010. Mr. Napierski has fulfilled multiple leadership positions for Nu Skin since
joining our company in 1995, including Vice President of Business Development for Nu Skin EMEA and General Manager of the United Kingdom. Mr. Napierski has a Bachelor’s degree in business, a Master’s degree in business administration from
Duke University and a Master’s degree in international business from Goethe Universitat in Germany.
Mr. Napierski brings to the Board a strong expertise in direct sales, including through digital and social media platforms. Having served as our CEO, President, President of
Global Sales and Operations, and in other management roles in our markets, Mr. Napierski also has a deep understanding of our business globally, including our sales force, products and product development, markets and compensation plans.
Mr. Napierski’s leadership has been integral to the success of several of our key initiatives in recent years. Mr. Napierski is also recognized as a leader in the direct selling industry and has served in a variety of industry trade
association leadership roles. For example, he is the immediate past Chairman of the U.S. Direct Selling Association and the current Chairman of the Advocacy Committee for the World Federation of Direct Selling Associations.
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Laura Nathanson
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Director since 2019
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Compensation and Human Capital Committee
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Nominating and Corporate Governance Committee (Chair)
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Laura Nathanson, 64, retired from The Walt Disney Company in 2019 after 21 years of service in sales and advertising positions. From 2017 to 2019, she served as Executive Vice
President of Revenue and Operations at Disney Advertising Sales, and from 2002 to 2017, she served as Executive Vice President of Sales and Marketing at ABC Family/Freeform. Prior to 2002, she served in various other sales and advertising
positions with ABC Network Sales, Fox Broadcasting and various media agencies. She received a B.A. degree from Wesleyan University.
Ms. Nathanson is an experienced leader who brings to the Board her expertise in sales and advertising, as well as a strong customer focus that is built on a 40-year career in
connecting with and communicating with customers. Business strategy is also one of Ms. Nathanson’s strengths; during her career, she has recognized and understood shifts in the business landscape, such as the rise of the millennial
demographic and the trend toward digital advertising, and has quickly adapted to these shifts, enabling her companies to capitalize on them at an early stage. She also has experience in streamlining business processes and in promoting
sales through digital and social media.
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Thomas R. Pisano
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Director since 2008
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Audit Committee
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Compensation and Human Capital Committee (Chair)
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Thomas R. Pisano, 77, served as Chief Executive Officer and a director of Overseas Military Sales Corp. (“OMSC”), a marketer of motor vehicles, from 2005 until his retirement in
2010. From 1998 to 2004, he served as the Chief Operating Officer and a director of OMSC. From 1995 to 1997, he served as Vice President and Head of the International Division for The Topps Company, Inc., a sports publications and
confectionery products company. Prior to that, he served in various positions, including Vice President of Global New Business Development, for Avon Products, Inc., a direct seller of personal care products, from 1969 to 1994. He received
a B.S. from the Georgia Institute of Technology and a M.B.A. from Dartmouth College.
Mr. Pisano is an experienced senior executive who is an expert in the direct selling, personal care, beauty products and other consumer goods industries. During his 25-year career
at Avon, he was responsible for global new business development, which included new geographic market openings and launching new product lines globally. He was also responsible for the operation of international businesses in Latin
America, Europe and Asia. During his international business career at Avon, Topps and OMSC, he traveled to and conducted business in approximately 50 countries.
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Zheqing (Simon) Shen
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Director since 2016
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Nominating and Corporate Governance Committee
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Zheqing (Simon) Shen, 42, is the founding member of ZQ Capital Limited, a boutique investment and advisory firm. Prior to founding ZQ Capital in 2015, Mr. Shen was managing
director and head of the China Financial Institutions Business at Barclays from 2011 to 2015. From 2004 to 2010, he worked with Goldman Sachs as an investment banker in its New York and Hong Kong offices. In addition to his service on our
Board, Mr. Shen has also served since 2016 on the board of directors and the Audit, Remuneration and Nomination Committees of KFM Kingdom Holdings Limited, a precision metals engineering and manufacturing company listed on the Hong Kong
Stock Exchange. Mr. Shen has a B.A. in mathematics and economics from Wesleyan University.
Mr. Shen brings to the Board valuable expertise in helping global companies realize their growth potential in Mainland China, which is one of our company’s key markets. He has
spent much of his career working in Asia capital markets, and he has a strong network in Mainland China and valuable local knowledge of Mainland China. His depth of experience with financial and investment matters is also valuable to the
Board.
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Edwina D. Woodbury
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Director since 2015
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Audit Committee (Chair)
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Nominating and Corporate Governance Committee
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Edwina D. Woodbury, 70, has been President and Chief Executive Officer of The Chapel Hill Press, Inc., a publishing services company, since 1999. Ms. Woodbury has over 20 years of
experience in the direct selling and personal care products industries, having served at Avon Products, Inc. as Chief Financial and Administrative Officer and in other finance and operations positions from 1977 to 1998. From 1998 to 2015,
Ms. Woodbury served as a member of the board of directors of RadioShack Corporation, a retail consumer electronics company. In addition, from 2005 to 2010, Ms. Woodbury served as a member of the board of directors of R.H. Donnelley
Corporation, a publishing and marketing company, and from 2000 to 2005, she served as a director of Click Commerce, Inc., a research solutions company. Ms. Woodbury also served on the board of directors of the nonprofit Medical Foundation
of North Carolina from 2009 to 2018. She received a B.S.B.A from the University of North Carolina.
Ms. Woodbury has extensive experience and understanding of our industry. While serving in various roles of increasing responsibility during her 21 years at Avon, she gained an
in-depth understanding of the financial and internal control-related issues associated with global companies in our industry. She also brings to the Board valuable perspective from her service on other public company boards. While serving
on the boards of Click Commerce, R.H. Donnelley and RadioShack, she (1) served on and chaired each board’s audit committee; (2) served on the compensation committee at R.H. Donnelley and chaired it at RadioShack; and (3) served on the
nominating and governance committee at Click Commerce and RadioShack.
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Separate Chairman of the Board and CEO. The positions of Chairman of the Board and CEO are filled by Mr. Lund and Mr.
Napierski, respectively.
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Lead Independent Director. Our independent directors have designated Mr. Campbell as Lead Independent Director.
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Limitation on Management Directors. All of our current directors are independent of the company and management except for Mr.
Lund, who is one of our company’s founders, and Mr. Napierski, our President and CEO.
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Meetings of Independent Directors. All independent directors meet regularly in executive session. Mr. Campbell, the Lead
Independent Director, chairs these sessions.
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Independent Committees. Only independent directors serve on our Audit, Compensation and Human Capital, and Nominating and
Corporate Governance Committees.
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Annual Board and Committee Performance Evaluations. The performance of the Board and each Board committee is evaluated at least
annually.
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Annual Election of Directors. All of our directors are elected annually; we do not have a staggered board.
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Majority Voting in Uncontested Director Elections and Resignation Policy. Our Bylaws provide that director nominees must be
elected by a majority of the votes cast in uncontested elections. For an incumbent director to be nominated for re-election, she or he must tender an irrevocable resignation that will be effective upon (i) the failure to receive the
required vote for director election at the next annual meeting at which the director faces re-election and (ii) Board acceptance of such resignation.
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Equity Retention Requirements. We have equity retention requirements that apply to our directors and executive officers,
designed to align directors’ and executive officers’ interests with those of stockholders. For a description of these requirements, see “Executive Compensation: Compensation Discussion and Analysis—Equity Retention Guidelines.”
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Hedging Policy. Our directors and employees, including officers, are prohibited from engaging in any hedging transactions with
respect to our securities, including through the use of short sales, put options and financial instruments such as prepaid variable forward contracts, equity swaps, collars and exchange funds. This prohibition applies regardless of
whether the director’s or employee’s securities were granted as compensation and regardless of whether the director or employee holds the securities directly or indirectly.
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Pledging Policy. Our directors and employees, including officers, are prohibited from pledging their
securities in our company.
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Emma S. Battle
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Daniel W. Campbell
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Andrew D. Lipman
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Laura Nathanson
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Thomas R. Pisano
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Zheqing (Simon) Shen
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Edwina D. Woodbury
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Audit Committee
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Nominating and Corporate
Governance Committee
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Compensation and Human
Capital Committee
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Major financial risk exposures
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− | Corporate governance risks | − | Compensation practices-related risks |
− | Operational risks related to information systems, information security and facilities | − | Operational risks not assigned to the Audit Committee | − | Human resources risks |
− | Public disclosure and investor related risks | − |
Reputational risks
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− | A force for good | − | Direct and decisive |
− | Accountable and empowered | − | Exceptional |
− | Bold innovators | − | Fast speed |
− | Customer obsessed | − | One global team |
1. |
Support the transformation of our business and culture to align with our business strategies and the Nu Skin Way;
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2. |
Leverage global diversity and build inclusion; and
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3. |
Simplify the employee experience through global alignment and optimization.
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Product
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Assess, score and improve the environmental impact score of all of our products by 2023
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− | Change all of our packaging to be recycled, recyclable, reusable, reduced or renewable by 2030 | ||
Planet
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Reduce waste at our facilities through programs that encourage reducing, reusing and recycling, as well as initiatives to reduce electricity usage
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People
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Invest at least 50% of our Force for Good Foundation’s giving in communities and people that are providing essential resources to our planet and its inhabitants
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Industry first launch of Eco-Pac, a renewable form of packaging that is constructed of a bioplastic derived from responsibly sourced sugarcane for our Epoch and Nu Colour BB+ lines.
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Became members of the Roundtable on Sustainable Palm Oil (RSPO) as part of our 2023 goal of achieving 100% RSPO mass balance palm oil.
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Won six sustainability-related awards and other recognitions in 2021 for efforts around sustainable packaging and innovation, waste reduction, and our proactive approach to environmental issues.
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Published a Nu Skin ingredient dictionary as part of our ingredient-transparency initiative to help consumers better navigate and feel greater confidence in their product purchases.
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Director
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Audit
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Compensation and
Human Capital
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Nominating and
Corporate Governance
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Emma S. Battle
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✔
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✔
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Daniel W. Campbell
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✔
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✔
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Andrew D. Lipman
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✔
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✔
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Laura Nathanson
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✔
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Chair
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Thomas R. Pisano
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✔
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Chair
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Zheqing (Simon) Shen
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✔
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Edwina Woodbury
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Chair
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✔
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2021 Meetings
|
10
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11
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8
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− |
Ms. Battle served on the Audit Committee and the Nominating and Corporate Governance Committee;
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Mr. Lipman served on the Compensation and Human Capital Committee, and he served as chair of the Nominating and Corporate Governance Committee; and
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Ms. Nathanson served on the Compensation and Human Capital Committee and was a member, but not the chair of, the Nominating and Corporate Governance Committee.
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Selecting our independent auditor;
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Overseeing the performance of our internal audit function and independent auditor;
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Reviewing the activities and the reports of our independent auditor;
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Approving in advance the audit and non-audit services provided by our independent auditor;
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Reviewing our quarterly and annual financial statements and our significant accounting policies, practices and procedures;
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Reviewing the adequacy of our internal controls and internal auditing methods and procedures;
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Overseeing our compliance with legal and regulatory requirements;
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Overseeing our risk assessment and risk management programs and plans related to our major financial risk exposures; operational risks related to information systems, information security and
facilities; and public disclosure and investor related risks; and
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Conferring with the chairs of the Nominating and Corporate Governance Committee and Compensation and Human Capital Committee regarding their respective oversight of our risk assessment and risk
management programs and our related guidelines and policies.
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Establishing and administering our executive compensation strategy, policies and practices;
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Reviewing and approving corporate goals and objectives relevant to the compensation to be paid to our CEO, Executive Chairman of the Board and other executive officers, evaluating the performance of
these individuals in light of those goals and objectives, and determining and approving the forms and levels of compensation based on this evaluation;
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Administering our equity incentive plans;
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Overseeing our risk assessment and risk management programs and plans related to our compensation practices and human resources;
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Overseeing the reporting of executive compensation information in accordance with applicable rules and regulations; and
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Overseeing our human capital management, including policies and strategies regarding recruiting, career development and progression, and diversity, equity and inclusion.
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Making recommendations to the Board of Directors about the size and membership criteria of the Board or any committee thereof;
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Identifying and recommending candidates for the Board and committee membership, including evaluating director nominations received from stockholders;
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Annually reviewing CEO succession planning as well as succession planning and management development for other executive officer positions;
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Leading the process of identifying and screening candidates for a new CEO when necessary, and evaluating the performance of the CEO and Executive Chairman;
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Making recommendations to the Board regarding changes in compensation of non-employee directors and overseeing the evaluation of the Board and management;
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Developing and recommending to the Board a set of corporate governance guidelines and reviewing such guidelines at least annually;
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Overseeing our risk assessment and risk management programs and plans related to our corporate governance risks, operational risks not assigned to the Audit Committee, and reputational risks; and
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Overseeing our plans and practices related to sustainability.
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A current or former officer or employee of our company;
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A participant during 2021 in a related-person transaction that is required to be disclosed; or
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An executive officer of another entity at which one of our executive officers served during 2021 on either the board of directors or the compensation committee, nor were any of our other directors an
executive officer of another entity at which one of our executive officers served on the compensation committee.
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Code of Conduct. Our code of conduct applies to all of our employees, officers and directors,
including our subsidiaries. Any amendments or waivers (including implicit waivers) regarding the Code of Conduct requiring disclosure under applicable SEC rules or NYSE listing standards will be disclosed in the “Corporate Governance”
section of our Investor Relations website at ir.nuskin.com.
|
− |
Corporate Governance Guidelines. Our corporate governance guidelines govern our company and our
Board of Directors on matters of corporate governance, including responsibilities, committees of the Board and their charters, director independence, director qualifications, director compensation and evaluations, director orientation
and education, director access to management, director access to outside financial, business and legal advisors and management development and succession planning.
|
Prior Program
Through 5/31/2021
|
Current Program
Effective 6/1/2021
|
|
Annual cash retainer
Board
Committee
|
$85,000
$10,000 per committee
|
Unchanged
|
Additional annual cash retainer for leadership:
Lead Independent Director
Audit Committee Chair
Other committee chairs
|
$20,000
$15,000
$10,000
|
$25,000
$20,000
$15,000
|
Meeting fees
|
None(1)
|
Unchanged
|
Annual equity award (restricted stock units)
|
$140,000 value
|
$150,000 value
|
(1) |
The Board can approve meeting fees for participation in a special committee or other extraordinary circumstances. During 2021, a special committee was in effect to evaluate strategic alternatives with
respect to our Grow Tech segment, which we determined during December 2021 to exit.
|
Name
|
Fees Earned or
Paid in Cash ($)
|
Stock
Awards
($)(1)
|
All Other
Compensation
($)(2)
|
Total ($)
|
Emma S. Battle
|
61,250
|
146,293
|
—
|
207,543
|
Daniel W. Campbell
|
148,917
|
146,293
|
—
|
295,210
|
Andrew D. Lipman
|
170,417
|
146,293
|
—
|
316,710
|
Laura Nathanson
|
136,500
|
146,293
|
—
|
282,793
|
Thomas R. Pisano
|
149,417
|
146,293
|
—
|
295,710
|
Zheqing (Simon) Shen
|
95,000
|
146,293
|
—
|
241,293
|
Edwina D. Woodbury
|
152,917
|
146,293
|
—
|
299,210
|
Steven J. Lund
|
—
|
—
|
827,033(3)
|
827,033
|
(1) |
On June 2, 2021, each of the directors listed above except for Mr. Lund, who is an employee, was granted 2,467 restricted stock units, which will vest on April 30, 2022. The amounts reported in this
column reflect the aggregate grant date fair value of the restricted stock units. For this purpose, the value of the restricted stock units is discounted to reflect that no dividends are paid prior to vesting.
|
Name
|
Stock Awards
|
Option Awards
|
Emma S. Battle
|
2,467
|
—
|
Daniel W. Campbell
|
2,467
|
10,000
|
Andrew D. Lipman
|
2,467
|
10,000
|
Laura Nathanson
|
2,467
|
—
|
Thomas R. Pisano
|
2,467
|
5,000
|
Zheqing (Simon) Shen
|
2,467
|
5,000
|
Edwina D. Woodbury
|
2,467
|
5,000
|
Steven J. Lund
|
—
|
—
|
(2) |
This column reports our incremental cost for providing perquisites and other personal benefits to those directors whose total was at least $10,000, as well as other forms of
compensation.
|
(3) |
Consists of Mr. Lund’s compensation as an employee of the company for 2021: $571,401 in salary; a cash incentive plan bonus of $225,378; and $30,254 in other compensation, including
$14,188 in premiums for life insurance, $11,600 in 401(k) contributions, company products, home security monitoring, a holiday gift and premiums for long-term disability insurance.
|
Ryan S. Napierski
|
President and Chief Executive Officer
|
Mark H. Lawrence
|
Executive Vice President and Chief Financial Officer
|
Connie Tang
|
Executive Vice President and Chief Global Growth and Customer Experience Officer
|
Joseph Y. Chang
|
Executive Vice President and Chief Scientific Officer
|
Chayce D. Clark
|
Executive Vice President and General Counsel
|
Ritch N. Wood
|
Former Chief Executive Officer
|
D. Matthew Dorny
|
Former Executive Vice President and General Counsel
|
Jeffrey C. Bettinger
|
Former Senior Vice President and Chief People and Places Officer
|
− |
Personalized beauty and wellness. EmpowerMe™ is our personalized beauty and wellness strategy to deliver smart and connected
IoT devices for better consumer results. With our leading beauty device systems brand, we plan to continue expanding our leadership position in beauty devices. Our EmpowerMe strategy includes leveraging the power of technologies like
artificial intelligence to gain better insights across our global customer base to provide personalized support that elevates their beauty and wellness experiences.
|
− |
Social commerce. We plan to continue to leverage our person-to-person marketing model as we supercharge it with the power,
scale and reach of social media to grow brand awareness and engagement through our authentic global affiliate channel. With the broader market adoption of influencer and affiliate marketing, Nu Skin has continued to combine the power of
word-of-mouth marketing with the scale and reach of social media through our own micro- and nano-influencers, who share our products with consumers seeking authentic product recommendations from people they trust. We plan to continue
enhancing our business model to enable greater flexibility and fulfillment for our brand affiliates around the world.
|
− |
Digital transformation. Investing in powerful technologies and capabilities will remain a key area of focus to help us
efficiently scale our business, including our integrated product and social commerce strategies. Our investments in manufacturing enabled us to have greater influence over our complete value chain, further strengthening our global
competitiveness. We have invested in new technologies, including Mavely, to help our affiliates to build their social businesses more effectively. We are also launching two new apps—Vera® and Stela—that support our EmpowerMe strategy.
Our Vera app will provide customers with greater insights into their personal beauty and wellness journey and will connect to our Bluetooth-enabled devices, while our Stela app will better enable our affiliates to connect with and
nurture their affiliate teams.
|
1. |
To successfully recruit, motivate and retain experienced and talented executives; and
|
2. |
To ensure pay for performance through incentives that
|
a.
|
Are tied to corporate and individual performance,
|
b.
|
Align the financial interests of our executives with those of our stockholders, and
|
c.
|
Are intended to drive superior stockholder value.
|
Cash Incentive Bonuses
19% of CEO 2021 Target Pay 23% of Other Continuing NEOs’ 2021
Target Pay
|
Long-Term Incentives
64% of CEO 2021 Target Pay
47% of Other Continuing NEOs’ 2021 Target Pay |
||
Annual Incentive
|
Time-Based Restricted
Stock Units (RSUs)
40% weighting
|
Performance-Based Stock
Options (PSOs)
60% weighting
|
|
Measures one-year financial
performance (2021)
|
Measures four-year
stock price performance
(2021-2024)
|
Measures one-year financial
performance over three years
(2021, 2022, 2023)
|
|
Metric: Adjusted
revenue
|
Metric: Adjusted
operating income
|
Metric: Stock price
|
Metric: Adjusted EPS
|
50% weighting
|
50% weighting
|
||
Incentivizes
business growth
|
Incentivizes
profitability and
control of
expenses
|
Aligns management with
stockholders’ interests Promotes multi-year
retention
|
Aligns management with
stockholders’ interests
Provides a balance to the top-
line and operating-income
metrics in the cash incentive
bonus program
|
Both metrics are calculated on a constant-currency basis from the prior-year period and are adjusted to eliminate extraneous items such as the impact of accounting changes, losses or gains on
settlements of litigation that began prior to 2021 and other unusual impacts at the Committee’s discretion.
|
Final value of award tied to stock price.
|
Adjusted EPS is calculated to eliminate extraneous items such as the impact of accounting changes, losses or gains on settlements of litigation that began prior to 2021 and other items that are
unusual, non-recurring or outside of management’s control.
|
Performance-Based Award
|
Percent of Target Earned
|
2021 Cash Incentive Bonus(1)
|
66%
|
2021 PSO Awards – Tranche 1 of 3 (measuring 2021 results)(2)
|
108%
|
2020 PSO Awards – Tranche 2 of 3 (measuring 2021 results)(2)
|
200%
|
2019 PSO Awards – Tranche 3 of 3 (measuring 2021 results)(2)
|
0%
|
|
(1) |
Contingent on 2021 adjusted revenue and adjusted operating income.
|
(2) |
Represents the tranches of the respective three-year awards that were contingent on 2021 adjusted EPS, as determined at the time of grant.
|
What We Do
|
What We Don’t Do
|
✔ Link pay outcomes directly to company and share price performance in support of a pay
for performance philosophy
✔ Utilize multiple, complementary incentive measures in the annual and long-term incentive
plans that align with key drivers of stockholder value creation
✔ Utilize double-trigger change in control benefits
✔ Employ a comprehensive clawback policy
✔ Require robust equity retention for directors and executives
✔ Assess compensation risk annually
✔ Engage an independent compensation consultant
|
No evergreen employment agreements
No hedging or pledging of Nu Skin shares
No excessive perquisites
No excise tax gross-ups for NEOs
No payment of current dividends on unvested equity
No repricing of stock options without stockholder approval
|
− |
Solicit our stockholders’ feedback and better understand their perspectives on executive compensation so that the Committee can take those philosophies into account as it evaluates possible program
changes;
|
− |
Answer any questions that stockholders may have with respect to our existing programs and practices or past decisions; and
|
− |
Establish a platform for ongoing dialogue with our stockholders.
|
− |
A mix of PRSUs and RSUs is better aligned with the incentive design of our peer companies; and
|
− |
Replacing PSOs with PRSUs creates more stability in the pay program, as resulting values are less impacted by volatile swings in the stock price.
|
− |
Mr. Napierski’s salary was increased to $950,000 (+6%), and he was awarded RSUs valued at $1.5 million and PRSUs valued at $2.25 million. These increases were intended to better position Mr. Napierski
against the competitive market data.
|
− |
Mr. Lawrence’s salary was increased to $595,000 (+3%), and he was awarded RSUs valued at $540,000 and PRSUs valued at $810,000.
|
− |
Ms. Tang’s salary was increased to $620,000 (+5%), and she was awarded RSUs valued at $434,000 and PRSUs valued at $651,000.
|
− |
Mr. Clark’s salary was increased to $450,000 (+13%), and he was awarded RSUs valued at $400,000 and PRSUs valued at $600,000
|
− |
Successfully recruit, motivate and retain experienced and talented executives;
|
− |
Provide competitive compensation arrangements that are tied to corporate and individual performance in the short- and long-term;
|
− |
Align the financial interests of our executives with those of our stockholders; and
|
− |
Drive superior stockholder value over the long-term.
|
Component of Compensation Program
|
Objective
|
Base Salary
(Fixed Pay) |
− Pay for role
− Aids in recruitment and retention
|
Cash Incentive Plan
(Short-Term Incentive) |
− Pay for performance
− Aligns with annual operating achievement
− Aids in recruitment and retention
|
Equity Incentive Plan
(Long-Term Incentive) |
− Pay for performance
− Aligns with stock price performance and multi-year operating achievement
− Aids in recruitment and retention
|
− |
Current market practices and salary levels;
|
− |
Each executive officer’s responsibilities, experience in their position and capabilities;
|
− |
Individual performance and company performance;
|
− |
The relative role and contribution of each NEO in the company;
|
− |
Competitive offers made to executive officers and the level of salary that may be required to recruit or retain executive officers; and
|
− |
The recommendations of the CEO.
|
Name
|
Salary as of
12/31/2020 ($) |
Adjusted Salary,
Q1 2021 ($) |
Salary as of
12/31/2021
($)
|
|||
Ryan S. Napierski
|
725,000
|
754,000
|
900,000
|
|||
Mark H. Lawrence
|
525,000
|
541,000
|
575,000
|
|||
Connie Tang
|
N/A
|
N/A
|
590,000
|
|||
Joseph Y. Chang
|
675,000
|
685,000
|
685,000
|
|||
Chayce D. Clark
|
N/A
|
N/A
|
400,000
|
|||
Ritch N. Wood
|
1,000,000
|
1,000,000
|
550,000
|
|||
D. Matthew Dorny
|
510,000
|
518,000
|
175,000
|
|||
Jeffrey C. Bettinger
|
N/A
|
345,000
|
N/A
|
Metric
|
Weighting
|
Purpose
|
How Calculated
|
Adjusted
revenue
|
50%
|
Incentivizes business growth
|
Both metrics are calculated on a constant-currency basis from the prior-year period and are adjusted to eliminate extraneous items such as the impact of accounting changes, losses or gains on
settlements of litigation that began prior to 2021 and other unusual impacts at the Committee’s discretion.
|
Adjusted
operating
income |
50%
|
Incentivizes profitability and
control of expenses
|
Named
Executive Officer
|
2021 Target Bonus % -
Beginning of Year
|
2021 Target Bonus % -
End of Year
|
||
Ryan S. Napierski
|
100%
|
110%
|
||
Mark H. Lawrence
|
75%
|
75%
|
||
Connie Tang
|
N/A
|
75%
|
||
Joseph Y. Chang
|
75%
|
75%
|
||
Chayce D. Clark
|
N/A
|
75%
|
||
Ritch N. Wood
|
110%
|
60%
|
||
D. Matthew Dorny
|
75%
|
75%
|
− |
If actual results for a particular incentive period equal:
|
o |
Goal performance levels – The bonus amount will be the participant’s target bonus amount for the incentive period.
|
o |
Minimum performance levels – The bonus amount will be 25% of the participant’s target bonus amount for the incentive period.
|
o |
Stretch performance levels – The bonus amount will be 200% of the participant’s target bonus amount for the incentive period.
|
− |
Payouts are interpolated linearly if actual results fall between the minimum and goal measurement points or between the goal and stretch measurement points.
|
− |
If the minimum adjusted operating income performance level is not met, no bonus is paid regardless of the adjusted revenue performance for that period.
|
− |
If the minimum adjusted operating income performance level is met but the minimum adjusted revenue performance level is not, 12.5% of the target bonus for the incentive period is earned.
|
(dollar amounts in thousands)
|
|||||||
Metric
|
2020
Result
|
2021 Targets
|
2021
Result
(1)
|
% of Goal
Level
Achieved
|
% of
Target
Bonus
Paid
(2)
|
||
Minimum
|
Goal
|
Stretch
|
|||||
Adjusted revenue
(50% weighting)
|
$2,581,934
|
$2,589,000
|
$2,736,000
|
$2,916,000
|
$2,629,622
|
96.1%
|
45.7%
|
Adjusted
operating income
(50% weighting)
|
$257,564
|
$241,000
|
$286,000
|
$325,000
|
$277,649
|
97.1%
|
86.1%
|
Aggregate payout percentage, reflecting the weightings noted above:
|
65.9%
|
(1) |
As compared to our 2021 reported revenue and operating income, our adjusted revenue and operating income reflect adjustments for (a) foreign-currency fluctuations and (b) in the case
of adjusted operating income, charges associated with winding down our Grow Tech segment in the fourth quarter of 2021.
|
(2) |
Calculated based on the linear interpolation of actual 2021 Results between the Minimum and Goal Targets (which correspond to the 25% and 100% payout levels, respectively):
|
− Practices of peer companies
− Degree of responsibility for overall corporate performance
− Overall compensation levels
− Changes in position and/or responsibilities
− Individual performance
− Company performance
− Total stockholder return
|
− Degree of performance risk in the equity
grant program
− Potential dilution of our overall equity grants
− Accumulated realized and unrealized value of past equity awards
− Associated expenses of equity awards
− The recommendations of the CEO
− Data and context provided by our compensation consultant
|
TARGET EQUITY AWARDS – FEBRUARY 2021
|
||||
Percentage Perf.-Based
|
||||
Named
Executive Officer |
Perf.-Based
Stock
Options
|
Time-
Based
RSUs
|
Number
of
Awards
|
Grant Date
Fair Value
|
Executive Officers at Time of Grant
|
||||
Ryan S. Napierski
|
60,791
|
13,235
|
82%
|
62%
|
Mark H. Lawrence
|
41,406
|
9,015
|
82%
|
62%
|
Joseph Y. Chang
|
30,113
|
6,557
|
82%
|
62%
|
D. Matthew Dorny
|
28,834
|
6,278
|
82%
|
62%
|
Other
|
||||
Chayce D. Clark
|
3,974
|
3,028
|
57%
|
32%
|
Jeffrey C. Bettinger
|
12,987
|
4,241
|
75%
|
52%
|
− |
Mr. Napierski received an award of 63,483 PSOs and 13,707 RSUs upon his promotion on September 1, 2021. This was a “top-up” award to his February 2022 award. The PSOs are divided into two equal
tranches and will vest based on our performance results in 2022 and 2023, respectively.
|
− |
Ms. Tang received an award of 18,396 RSUs upon her hire on April 21, 2021. As an onboarding award, this award was made entirely in RSUs to attract Ms. Tang into the organization, to stake her
ownership in our company, and because the annual PSO awards had already been granted.
|
− |
Mr. Clark received an award of 8,661 PSOs and 1,863 RSUs upon his promotion on August 1, 2021. This was a “top-up” award to his February 2022 award. The PSOs are divided into three equal tranches and
will vest based on our performance results in 2022, 2023 and 2024, respectively.
|
− |
Due to his pending retirement, which was known at the time of the February 2021 awards, Mr. Wood’s February 2021 award consisted of 23,910 RSUs, which had a value of approximately one-third of the
value of his typical award, reflecting his one remaining year of service to our company. These RSUs vested in full on February 15, 2022.
|
− |
A mix of PRSUs and RSUs is better aligned with the incentive design of our peer companies; and
|
− |
Replacing PSOs with PRSUs creates more stability in the pay program, as resulting values are less impacted by volatile swings in the stock price.
|
Minimum
Goal ($)
|
Target
Goal ($)
|
Maximum
Goal ($)
|
Actual ($)
|
% Vested
|
|
2019 Award
|
|||||
➢ 2018 Adjusted EPS: 3.61(1)
|
|||||
2019 Adjusted EPS Tranche
|
3.68
|
3.98
|
4.38
|
3.10(2)
|
—
|
2020 Adjusted EPS Tranche
|
3.98
|
4.20
|
4.62
|
3.63(2)
|
—
|
2021 Adjusted EPS Tranche
|
4.20
|
4.45
|
4.97
|
4.14(3)
|
—
|
2020 Award
|
|||||
➢ 2019 Adjusted EPS: 3.10(2)
|
|||||
2020 Adjusted EPS Tranche
|
2.00
|
2.50
|
3.60
|
3.63(2)
|
200%
|
2021 Adjusted EPS Tranche
|
2.10
|
2.62
|
3.78
|
4.14(3)
|
200%
|
2022 Adjusted EPS Tranche
|
2.21
|
2.75
|
3.97
|
TBD
|
TBD
|
2021 Award
|
|||||
➢ 2020 Adjusted EPS: 3.63(2)
|
|||||
2021 Adjusted EPS Tranche
|
3.46
|
4.10
|
4.58
|
4.14(3)
|
108%
|
2022 Adjusted EPS Tranche
|
3.72
|
4.43
|
4.95
|
TBD
|
TBD
|
2023 Adjusted EPS Tranche
|
4.01
|
4.78
|
5.34
|
TBD
|
TBD
|
(1) |
As compared to our 2018 reported EPS of $2.16, our adjusted EPS reflects adjustments totaling $1.45 from a charge associated with the conversion of our convertible notes in the first
quarter of 2018, adoption of the new revenue standard under U.S. GAAP, the impairment and restructuring charges incurred in the fourth quarter of 2018, and both a gain and a charge associated with the acquisitions in the first quarter
of 2018. These adjustments were permitted by the terms of the awards granted in 2018.
|
(2) |
No adjustments were made to our 2019 reported EPS of $3.10 or our 2020 reported EPS of $3.63.
|
(3) |
As compared to our 2021 reported EPS of $2.94, our adjusted EPS reflects an adjustment of $1.20 from charges associated with winding down our Grow Tech segment in the fourth quarter
of 2021. This adjustment was permitted by the terms of the awards granted in 2019–2021.
|
− |
Church & Dwight Co., Inc.
|
− |
Primerica, Inc.
|
− |
Edgewell Personal Care Company
|
− |
Revlon, Inc.
|
− |
The Hain Celestial Group, Inc.
|
− |
Sally Beauty Holdings, Inc.
|
− |
Helen of Troy Limited
|
− |
Sensient Technologies Corporation
|
− |
Herbalife Nutrition Ltd.
|
− |
Spectrum Brands Holdings, Inc.
|
− |
International Flavors & Fragrances Inc.
|
− |
Tupperware Brands Corporation
|
− |
Prestige Consumer Healthcare Inc.
|
− |
USANA Health Sciences, Inc.
|
− |
Our compensation programs are market driven and balance short-term incentives with significant long-term equity incentives. Performance-contingent equity awards provide additional long-term
incentives to our key employees and executive officers. In addition, our equity retention guidelines help to ensure that a portion of our executives’ equity incentives remains tied to our long-term performance.
|
− |
Our global cash incentive compensation is based on revenue and profitability, which are core measures of performance. In addition, substantially all of our revenue is received through cash or credit
card payments, as opposed to other credit arrangements, which minimizes risk associated with our revenue-based incentives. Additionally, the Board of Directors and management regularly review the business plans and strategic
initiatives, including related risks, proposed to achieve such performance metrics.
|
− |
A substantial portion of compensation is provided in the form of long-term equity incentives with multi-year vesting.
|
− |
We do not allow engagement in speculative trading or hedging. Our policies prohibit all of our directors and employees, including executive officers, from holding our stock in margin accounts and
from engaging in speculative transactions in our stock, including short sales, options or hedging transactions. Our directors and employees, including executive officers, also are prohibited from pledging their securities in our
company.
|
Position
|
Multiple of Base Salary
or Annual Retainer
|
CEO
|
6.0
|
Other Executive Officers
|
2.5
|
Non-Management Directors
|
5.0
|
|
COMPENSATION AND HUMAN CAPITAL COMMITTEE OF THE BOARD OF DIRECTORS
|
|
|
|
Thomas R. Pisano, Chairman
|
|
Daniel W. Campbell
|
|
Andrew D. Lipman*
|
|
Laura Nathanson |
|
* Mr. Lipman was a member of the Compensation and Human Capital Committee at the time this Committee reviewed, discussed and recommended the Compensation Discussion and Analysis.
|
Name and
Principal Position
|
Year
|
Salary
($)(1)
|
Bonus
($)(2)
|
Stock
Awards
($)(3)
|
Option
Awards
($)(3)
|
Non-Equity
Incentive Plan
Compensation
($)(4)
|
All Other
Compensation
($)(5)
|
Total ($)
|
Continuing NEOs
|
||||||||
Ryan S. Napierski
President and Chief
Executive Officer
|
2021
|
800,960
|
—
|
1,253,109
|
2,018,409
|
548,758
|
110,734
|
4,731,970
|
2020
|
720,861
|
3,350
|
710,899
|
909,002
|
1,164,350
|
104,163
|
3,612,626
|
|
2019
|
687,500
|
—
|
572,325
|
913,788
|
—
|
122,658
|
2,296,272
|
|
Mark H. Lawrence
EVP and Chief
Financial Officer
|
2021
|
551,741
|
—
|
405,495
|
659,598
|
273,006
|
93,829
|
1,983,669
|
2020
|
520,853
|
850
|
469,254
|
600,003
|
632,363
|
77,136
|
2,300,459
|
|
2019
|
491,667
|
—
|
1,992,713
|
542,844
|
—
|
98,170
|
3,125,393
|
|
Connie Tang
EVP and Chief
Global Growth &
Cust. Exp. Officer
|
2021
|
413,648
|
25
|
929,550
|
—
|
203,737
|
41,296
|
1,588,256
|
Joseph Y. Chang
EVP and Chief
Scientific Officer
|
2021
|
685,858
|
—
|
294,934
|
479,700
|
338,580
|
105,915
|
1,904,987
|
2020
|
672,526
|
850
|
333,160
|
426,004
|
813,038
|
102,386
|
2,347,964
|
|
2019
|
653,333
|
—
|
268,229
|
428,239
|
—
|
124,299
|
1,474,100
|
|
Chayce D. Clark
EVP and General
Counsel
|
2021
|
343,725
|
6,767
|
229,070
|
213,228
|
133,742
|
56,683
|
983,215
|
Departed NEOs
|
||||||||
Ritch N. Wood
Former Chief
Executive Officer |
2021
|
852,614
|
—
|
1,130,704
|
—
|
555,788
|
117,996
|
2,657,102
|
2020
|
1,000,038
|
850
|
1,642,334
|
2,100,006
|
1,766,600
|
126,730
|
6,636,559
|
|
2019
|
991,667
|
—
|
1,322,140
|
2,111,047
|
—
|
145,526
|
4,570,379
|
|
D. Matthew Dorny
Former EVP and
General Counsel
|
2021
|
374,403
|
—
|
282,384
|
459,326
|
256,036
|
57,122
|
1,429,270
|
2020
|
510,020
|
850
|
333,160
|
426,004
|
614,295
|
69,451
|
1,953,780
|
|
2019
|
504,167
|
—
|
268,229
|
428,239
|
—
|
77,063
|
1,277,698
|
|
Jeffrey C. Bettinger
Former SVP and
Chief People and
Places Officer
|
2021
|
280,412
|
—
|
190,760
|
206,883
|
71,160
|
372,727
|
1,121,942
|
(1) |
Messrs. Napierski, Lawrence, Clark, Dorny and, for 2021, Chang and Wood deferred a portion of their salaries under our nonqualified Deferred Compensation Plan, which is included in
the Nonqualified Deferred Compensation – 2021 table. Each of the NEOs also contributed a portion of their salary to our 401(k) retirement savings plan.
|
(2) |
The amounts reported in this column for 2021 consist of (i) in the case of Ms. Tang, a COVID-19 vaccine incentive payment offered to corporate employees; and (ii) in the case of Mr.
Clark, a holiday bonus given to all non-executive corporate employees, pro-rated to reflect the time during 2021 preceding his promotion to an executive officer position.
|
(3) |
The amounts reported in these columns reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718 and, for performance-based awards,
are based on the probable outcome of the performance conditions as of the grant date. The amounts do not represent amounts actually received by the NEOs. For this purpose, the estimate of forfeitures is disregarded, and the value of the
stock awards is discounted to reflect that no dividends are paid prior to vesting. For information on the valuation assumptions used in calculating these amounts, refer to Note 9 to our financial statements in the Form 10-K filed for
the fiscal year ended December 31, 2021.
|
(4) |
See “Executive Compensation: Compensation Discussion and Analysis—Cash Incentive Bonus” for information regarding the amounts reported in this column. Messrs. Napierski and Dorny, as
well as Mr. Chang (2021 only) and Mr. Lawrence (2020 only), deferred a portion of these bonuses under our nonqualified Deferred Compensation Plan, which deferrals are reflected in the Nonqualified Deferred Compensation – 2021 table.
|
(5) |
The following table describes the components of the All Other Compensation column for 2021 in the Summary Compensation Table.
|
Name
|
Company
Contributions to
Deferred
Compensation
Plan
($)
|
Company
Contributions to
401(k) Retirement
Savings Plan
($)
|
Perquisites and
Other Personal
Benefits
($)(a)
|
Other
($)(b)
|
Total
($)
|
Ryan S. Napierski
|
76,143
|
11,600
|
6,231
|
16,760
|
110,734
|
Mark H. Lawrence
|
54,044
|
11,600
|
25,072
|
3,114
|
93,829
|
Connie Tang
|
—
|
11,600
|
28,025
|
1,672
|
41,296
|
Joseph Y. Chang
|
67,236
|
11,600
|
12,395
|
14,684
|
105,915
|
Chayce D. Clark
|
34,260
|
11,600
|
8,913
|
1,911
|
56,683
|
Ritch N. Wood
|
84,149
|
11,600
|
16,904
|
5,344
|
117,996
|
D. Matthew Dorny
|
37,375
|
11,600
|
3,795
|
4,351
|
57,122
|
Jeffrey C. Bettinger
|
—
|
8,325
|
10,434
|
353,968
|
372,727
|
|
(a) |
This column reports our incremental cost for perquisites and personal benefits provided to the NEOs. In 2021, these included the personal use of company-provided properties; tickets
for sporting events; company products; tax-planning advice; and, for Ms. Tang, who lives in a different state from our corporate offices, airfare and other travel expenses associated with commuting to our corporate offices and an
apartment near our corporate offices.
|
(b) |
This column includes premiums for long-term disability insurance, tax gross-up payments to Messrs. Clark and Bettinger (with respect to Mr. Clark, they corresponded to perquisites
received before he was promoted to an executive officer position); a $345,000 severance payment to Mr. Bettinger; and premiums for term life insurance. The term life insurance coverage amounts as of December 31, 2021 were $1 million for
Messrs. Napierski, Lawrence, Chang, Wood and Ms. Tang; $800,000 for Mr. Clark; and $500,000 for Mr. Dorny. The amount paid for Mr. Chang’s term life insurance policy was $14,162. This column also includes $14,539 in tax payments
associated with Mr. Napierski’s income received as a result of his former expatriate assignment. These payments were pursuant to our expatriate tax equalization policy. For further discussion regarding tax payments, see “Executive
Compensation: Compensation Discussion and Analysis—Perquisites and Other Benefits.” Portions of Mr. Napierski’s tax payments were paid in Japanese yen. The amounts were converted to U.S. dollars using a weighted average exchange rate
for the month in which the payment was made. During 2021, these exchange rates ranged from 103.79 to 113.95 Japanese yen per U.S. dollar.
|
Estimated Possible Payouts
under non-Equity Incentive Plan
Awards
|
Estimated Future Payouts
under Equity Incentive Plan
Awards
|
||||||||||
Name
|
Grant Date
|
Date of
Compensation
and Human
Capital
Committee
Approval
|
Threshold
($)(1)
|
Target
($)(1)
|
Max
($)(1)
|
Threshold
(#)(2)
|
Target
(#)(2)
|
Max
(#)(2)
|
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)
|
Exercise
or Base
Price of
Option
Awards
($)(3)
|
Grant Date
Fair Value
of Stock
and
Option
Awards
($)(4)
|
Ryan S. Napierski
|
|||||||||||
2/15/2021
|
2/10/2021
|
15,198
|
60,791
|
121,582
|
48.81
|
968,401
|
|||||
2/15/2021
|
2/10/2021
|
13,235
|
595,310
|
||||||||
9/1/2021
|
8/3/2021
|
15,871
|
63,483
|
126,966
|
51.07
|
1,050,009
|
|||||
9/1/2021
|
8/3/2021
|
13,707
|
657,799
|
||||||||
N/A
|
104,083
|
832,667
|
1,665,333
|
||||||||
Mark H. Lawrence
|
|||||||||||
2/15/2021
|
2/10/2021
|
10,352
|
41,406
|
82,812
|
48.81
|
659,598
|
|||||
2/15/2021
|
2/10/2021
|
9,015
|
405,495
|
||||||||
N/A
|
51,781
|
414,250
|
828,500
|
||||||||
Connie Tang
|
|||||||||||
4/21/2021
|
4/2/2021
|
18,396
|
929,550
|
||||||||
N/A
|
38,643
|
309,144
|
618,288
|
||||||||
Joseph Y. Chang
|
|||||||||||
2/15/2021
|
2/10/2021
|
7,528
|
30,113
|
60,226
|
48.81
|
479,700
|
|||||
2/15/2021
|
2/10/2021
|
6,557
|
294,934
|
||||||||
N/A
|
64,219
|
513,750
|
1,027,500
|
||||||||
Chayce D. Clark
|
|||||||||||
2/15/2021
|
2/10/2021
|
994
|
3,974
|
7,948
|
48.81
|
63,306
|
|||||
2/15/2021
|
2/10/2021
|
3,028
|
136,199
|
||||||||
8/1/2021
|
6/23/2021
|
2,165
|
8,661
|
17,322
|
53.69
|
149,922
|
|||||
8/1/2021
|
6/23/2021
|
1,863
|
92,871
|
||||||||
N/A
|
24,422
|
195,373
|
390,747
|
||||||||
Ritch N. Wood
|
|||||||||||
2/15/2021
|
2/10/2021
|
23,910
|
1,130,704
|
||||||||
N/A
|
105,417
|
843,333
|
1,686,667
|
||||||||
D. Matthew Dorny
|
|||||||||||
2/15/2021
|
2/10/2021
|
7,209
|
28,834
|
57,668
|
48.81
|
459,326
|
|||||
2/15/2021
|
2/10/2021
|
6,278
|
282,384
|
||||||||
N/A
|
48,563
|
388,500
|
777,000
|
||||||||
Jeffrey C. Bettinger
|
|||||||||||
2/15/2021
|
2/10/2021
|
3,247
|
12,987
|
25,974
|
48.81
|
206,883
|
|||||
2/15/2021
|
2/10/2021
|
4,241
|
190,760
|
||||||||
N/A(5)
|
21,533
|
172,265
|
344,531
|
(1) |
The amounts reported in these columns reflect potential payouts under our 2021 cash incentive program if the respective levels of performance were achieved for the year. The
amounts reported in the Threshold column reflect the potential payout if any company performance metric was at the minimum level required to receive a bonus. The amounts reported in the Target and Max columns reflect the potential
payout if all company performance metrics were at goal and maximum performance levels, respectively. For information about the calculation of each NEO’s potential amounts, see “Executive Compensation: Compensation Discussion and
Analysis—Cash Incentive Bonus.”
|
(2) |
The awards reported in these columns are performance-based stock options granted under our Third Amended and Restated 2010 Omnibus Incentive Plan. The amounts reported in the
Threshold, Target and Max columns reflect the potential number of options that become eligible for vesting or exercisable if certain financial metrics are achieved at the minimum, goal and maximum levels, respectively.
|
(3) |
This column shows the exercise price for the stock option awards, which is the closing price of our stock on the grant date or, if the grant date was a weekend or holiday, the last
preceding date on which a closing price was reported.
|
(4) |
The amounts reported in this column reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718 and, for performance-based awards,
are based on the probable outcome of the performance conditions as of the grant date. For this purpose, the estimate of forfeitures is disregarded, and the value of the stock awards is discounted to reflect that no dividends are paid
prior to vesting. For information on the valuation assumptions used in calculating these amounts, refer to Note 9 to our financial statements in the Form 10-K filed for the fiscal year ended December 31, 2021.
|
(5) |
Represents the amount awarded to Mr. Bettinger based on employment for the full year. Mr. Bettinger resigned in October 2021.
|
− |
Time-based equity awards granted to Mr. Chang will fully vest upon certain terminations of employment within six months prior to and in connection with, or within two years following, a change in
control;
|
− |
Mr. Chang will be bound by certain covenants, including non-solicitation, non-competition and non-endorsement, that are in addition to, or supersede, previous key employee covenants;
|
− |
Mr. Chang will be entitled to certain termination payments, as described in “Executive Compensation Tables and Accompanying Narrative—Potential Payments Upon Termination or Change in Control”
below.
|
Option Awards
|
Stock Awards
|
|||||||
Name
and
Award
Type
(1)
|
Grant
Date
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned Options
(#)(2)(3)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(4)
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(5)
|
Ryan S. Napierski
|
||||||||
SO
|
12/18/2015
|
6,800
|
37.58
|
12/18/2022
|
||||
SO
|
12/18/2015
|
50,000
|
37.58
|
12/18/2022
|
||||
SO
|
3/2/2016
|
62,200
|
30.63
|
3/2/2023
|
||||
PSO
|
3/2/2016
|
12,513
|
30.63
|
3/2/2023
|
||||
PSO
|
3/4/2017
|
32,224
|
50.68
|
3/4/2024
|
||||
PSO
|
3/8/2018
|
18,919
|
71.99
|
3/8/2025
|
||||
RSU
|
3/8/2018
|
1,007
|
51,105
|
|||||
PSO
|
2/15/2019
|
7,701
|
63.09
|
2/15/2016
|
||||
RSU
|
2/15/2019
|
4,802
|
243,702
|
|||||
PSO
|
2/15/2020
|
70,540
|
141,102
|
30.45
|
2/15/2027
|
|||
RSU
|
6/3/2020
|
14,926
|
757,495
|
|||||
PSO
|
2/15/2021
|
121,582
|
48.81
|
2/15/2028
|
||||
RSU
|
2/15/2021
|
13,235
|
671,676
|
|||||
PSO
|
9/1/2021
|
31,742
|
51.07
|
9/1/2028
|
||||
RSU
|
9/1/2021
|
13,707
|
695,630
|
|||||
Mark H. Lawrence
|
||||||||
PSO
|
3/27/2017
|
14,422
|
54.23
|
3/27/2024
|
||||
PSO
|
3/8/2018
|
11,742
|
71.99
|
3/8/2025
|
||||
RSU
|
3/8/2018
|
625
|
31,719
|
|||||
PSO
|
2/15/2019
|
4,575
|
63.09
|
2/15/2026
|
||||
RSU
|
2/15/2019
|
2,853
|
144,790
|
|||||
RSU
|
2/15/2019
|
9,247
|
469,285
|
|||||
PSO
|
2/15/2020
|
46,562
|
93,136
|
30.45
|
2/15/2027
|
|||
RSU
|
6/3/2020
|
9,852
|
499,989
|
|||||
PSO
|
2/15/2021
|
82,812
|
48.81
|
2/15/2028
|
||||
RSU
|
2/15/2021
|
9,015
|
457,511
|
|||||
Connie Tang
|
||||||||
RSU
|
4/21/2021
|
18,396
|
933,597
|
|||||
Joseph Y. Chang
|
||||||||
SO
|
3/10/2015
|
6,800
|
54.97
|
3/10/2022
|
||||
SO
|
12/18/2015
|
6,800
|
37.58
|
12/18/2022
|
||||
SO
|
3/2/2016
|
74,600
|
30.63
|
3/2/2023
|
||||
PSO
|
3/2/2016
|
42,485
|
30.63
|
3/2/2023
|
||||
PSO
|
3/4/2017
|
18,562
|
50.68
|
3/4/2024
|
||||
PSO
|
3/8/2018
|
9,264
|
71.99
|
3/8/2025
|
||||
RSU
|
3/8/2018
|
493
|
25,020
|
|||||
PSO
|
2/15/2019
|
3,609
|
63.09
|
2/15/2026
|
||||
RSU
|
2/15/2019
|
2,250
|
114,188
|
|||||
PSO
|
2/15/2020
|
33,058
|
66,128
|
30.45
|
2/15/2027
|
|||
RSU
|
6/3/2020
|
6,995
|
354,996
|
|||||
PSO
|
2/15/2021
|
60,226
|
48.81
|
2/15/2028
|
||||
RSU
|
2/15/2021
|
6,557
|
332,768
|
Option Awards
|
Stock Awards
|
|||||||
Name
and
Award
Type
(1)
|
Grant
Date
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned Options
(#)(2)(3)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(4)
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(5)
|
Chayce D. Clark
|
||||||||
RSU
|
3/8/2018
|
364
|
18,473
|
|||||
PSO
|
2/15/2019
|
382
|
63.09
|
2/15/2026
|
||||
RSU
|
2/15/2019
|
832
|
42,224
|
|||||
PSO
|
2/15/2020
|
8,780
|
30.45
|
2/15/2027
|
||||
RSU
|
6/3/2020
|
3,250
|
164,938
|
|||||
RSU
|
6/5/2020
|
6,639
|
336,929
|
|||||
PSO
|
2/15/2021
|
7,948
|
48.81
|
2/15/2028
|
||||
RSU
|
2/15/2021
|
3,028
|
153,671
|
|||||
PSO
|
8/1/2021
|
17,322
|
53.69
|
8/1/2028
|
||||
RSU
|
8/1/2021
|
1,863
|
94,547
|
|||||
Ritch N. Wood
|
||||||||
SO
|
3/10/2015
|
6,800
|
54.97
|
3/10/2022
|
||||
SO
|
12/18/2015
|
6,800
|
37.58
|
12/18/2022
|
||||
SO
|
3/2/2016
|
136,600
|
30.63
|
3/2/2023
|
||||
PSO
|
3/2/2016
|
54,525
|
30.63
|
3/2/2023
|
||||
PSO
|
3/4/2017
|
58,306
|
50.68
|
3/4/2024
|
||||
PSO
|
3/8/2018
|
41,753
|
71.99
|
3/8/2025
|
||||
RSU
|
3/8/2018
|
2,222
|
112,767
|
|||||
PSO
|
2/15/2019
|
17,789
|
63.09
|
2/15/2026
|
||||
RSU
|
2/15/2019
|
11,095
|
563,071
|
|||||
PSO
|
2/15/2020
|
162,964
|
325,978
|
30.45
|
2/15/2027
|
|||
RSU
|
6/3/2020
|
34,483
|
1,750,012
|
|||||
RSU
|
2/15/2021
|
23,910
|
1,213,433
|
|||||
D. Matthew Dorny
|
||||||||
SO
|
3/10/2015
|
5,000
|
54.97
|
3/10/2022
|
||||
PSO
|
3/2/2016
|
18,835
|
30.63
|
3/2/2023
|
||||
PSO
|
3/4/2017
|
18,562
|
50.68
|
3/4/2024
|
||||
PSO
|
3/8/2018
|
9,264
|
71.99
|
3/8/2025
|
||||
RSU
|
3/8/2018
|
493
|
25,020
|
|||||
PSO
|
2/15/2019
|
3,609
|
63.09
|
2/15/2026
|
||||
RSU
|
2/15/2019
|
2,250
|
114,188
|
|||||
PSO
|
2/15/2020
|
66,128
|
30.45
|
2/15/2027
|
||||
RSU
|
6/3/2020
|
6,995
|
354,996
|
|||||
PSO
|
2/15/2021
|
57,668
|
48.81
|
2/15/2028
|
||||
RSU
|
2/15/2021
|
6,278
|
318,609
|
(1)
|
Award types are as follows:
|
(2) |
Performance-Based Stock Options vest in three equal tranches (or two tranches, in the case of the PSOs granted on 9/1/2021) based on the achievement of adjusted EPS
performance levels, measured in terms of diluted EPS excluding certain predetermined items. Vesting occurs on the later of one year following the grant date and the Committee’s approval of the calculation of adjusted EPS for the
respective tranche. Vesting of the target amount of PSOs is accelerated upon the participant’s termination (including constructive termination) in connection with a change in control. Any portions of the tranches that do not become
eligible for vesting will immediately terminate following the later of one year following the grant date and the Committee’s approval of the calculation of adjusted EPS for such tranche.
|
Grant Date
|
Vesting Schedule
|
2/15/2019
|
No portion of the first, second or third tranche vested based on adjusted EPS achieved in 2019, 2020 and 2021, and these tranches therefore terminated as of
February 15, 2020, February 10, 2021 and February 11, 2022, respectively.
|
2/15/2020
|
The first and second tranches vested in full based on adjusted EPS achieved in 2020 and 2021, respectively. The portion of the third tranche that vests will be
determined by adjusted EPS reaching pre-determined levels in 2022.
|
2/15/2021
8/1/2021
|
A portion of the first tranche vested (or will vest on 8/1/2022, in the case of the PSOs granted on 8/1/2021) based on adjusted EPS achieved in 2021. The
portions of the second and third tranches that vest will be determined by adjusted EPS reaching pre-determined levels in 2022 and 2023, respectively.
|
9/1/2021
|
The portions of the first and second tranches that vest will be determined by adjusted EPS reaching pre-determined levels in 2022 and 2023, respectively.
|
(3) |
In accordance with SEC rules, this column reports the potential number of options that become eligible for vesting or exercisable if performance is at the minimum level required
for any options to become eligible for vesting or exercisable, except that, based on 2021 results, the PSOs granted on 2/15/2020, 2/15/2021 and 8/1/2021 are reported at the maximum level.
|
(4) |
Time-Based Restricted Stock Units
|
Grant Date
|
Vesting Schedule
|
3/8/2018
|
Vested in four equal annual installments, the first of which vested on February 15, 2019.
|
2/15/2019
|
Vest in four equal annual installments, the first of which vested on February 15, 2020, except for Mr. Lawrence’s award of 9,247 RSUs,
which vested in three equal annual installments, the first of which vested on February 15, 2020.
|
6/3/2020
|
Vest in four equal annual installments, the first of which vested on February 15, 2021.
|
6/5/2020
|
Vest in four equal annual installments, the first of which vested on June 5, 2021.
|
2/15/2021
9/1/2021
|
Vest in four equal annual installments, the first of which vested on February 15, 2022, except for Mr. Wood’s award of RSUs, which vested
in full on February 15, 2022.
|
4/21/2021
|
Vest in four equal annual installments, the first of which will vest on April 21, 2022.
|
8/1/2021
|
Vest in four equal annual installments, the first of which will vest on August 1, 2022.
|
(5) |
The market value of the restricted stock units reported in this column is based on the closing market price of our stock on December 31, 2021, which was $50.75.
|
Option Awards
|
Stock Awards
|
|||
Name
|
Number of Shares
Acquired on
Exercise (#)
|
Value Realized on
Exercise ($)(1)
|
Number of Shares
Acquired on
Vesting (#)
|
Value Realized
on Vesting
($)(2)
|
Ryan S. Napierski
|
34,000
|
806,240
|
10,985
|
538,440
|
Mark H. Lawrence
|
—
|
—
|
16,633
|
817,699
|
Connie Tang
|
—
|
—
|
—
|
—
|
Joseph Y. Chang
|
16,000
|
268,480
|
5,076
|
248,738
|
Chayce D. Clark
|
4,388
|
140,245
|
4,274
|
235,546
|
Ritch N. Wood
|
6,800
|
68,204
|
25,565
|
1,253,309
|
D. Matthew Dorny
|
118,358
|
2,022,299
|
5,076
|
248,738
|
Jeffrey C. Bettinger
|
14,900
|
334,312
|
6,687
|
288,936
|
(1) |
Value realized on exercise of stock options is equal to the number of options exercised multiplied by the market value of our common stock at exercise less the exercise price, and
is calculated before payment of any applicable withholding taxes and broker commissions.
|
(2) |
Value realized on vesting of restricted stock units is equal to the number of restricted stock units vested multiplied by the market value of our common stock on the vesting date,
and is calculated before payment of any applicable withholding taxes and broker commissions.
|
Name of Fund
|
Rate of
Return
|
Name of Fund
|
Rate of
Return
|
American Century VP Inflation Protection - Class I Shares
|
6.61%
|
LVIP Delaware Bond - Standard Class
|
-1.80%
|
American Funds Global Growth - Class 2
|
16.42%
|
LVIP Delaware Value - Standard Class
|
22.42%
|
American Funds Global Small Capitalization - Class 2
|
6.74%
|
LVIP SSgA Mid-Cap Index - Standard Class
|
24.37%
|
American Funds IS Capital World Growth & Income - Class 2
|
14.78%
|
MFS VIT Utilities Series - Initial Class
|
14.09%
|
Delaware VIP Small Cap Value Series - Standard Class
|
34.42%
|
MFS VIT Value - Initial Class
|
25.45%
|
DWS VIT Small Cap Index VIP - Class A
|
14.50%
|
Nu Skin Enterprises Inc. Restricted Stock Units
|
-4.34%
|
Fidelity VIP Int’l Capital Appreciation - Service Class 2
|
12.11%
|
Putnam VT High Yield - Class IA
|
5.20%
|
Great-West Aggressive Profile - Investor Class
|
19.49%
|
Putnam VT International Value - Class IA
|
15.28%
|
Great-West Conservative Profile - Investor Class
|
6.35%
|
T. Rowe Price Blue Chip Growth
|
17.62%
|
Great-West Gov’t Money Market - Instl Shares
|
0.01%
|
Van Eck VIP Emerging Markets - Initial Class
|
-11.87%
|
Great-West Moderate Profile - Investor Class
|
11.98%
|
Vanguard VIF Equity Index
|
28.55%
|
Great-West Moderately Aggressive Profile - Investor Class
|
14.25%
|
Vanguard VIF Growth
|
17.86%
|
Great-West Moderately Conservative Profile - Investor Class
|
9.13%
|
Vanguard VIF Real Estate Index
|
40.21%
|
Great-West T. Rowe Price Mid Cap Growth - Investor Class
|
14.83%
|
Vanguard VIF Short-Term Investment-Grade
|
-0.45%
|
Janus Henderson VIT Mid Cap Value - Instl Shares
|
19.73%
|
Vanguard VIF Small Company Growth
|
14.22%
|
American Century VP Inflation Protection - Class I Shares
|
6.61%
|
LVIP Delaware Bond - Standard Class
|
-1.80%
|
Name
|
Executive
Contributions
in Last FY
($)(1)
|
Registrant
Contributions
in Last FY
($)(1)
|
Aggregate
Earnings
in Last FY
($)(1)
|
Aggregate
Withdrawals/
Distributions
|
Aggregate
Balance at
Last FYE
($)(1)
|
Ryan S. Napierski
|
94,148
|
76,143
|
764,166
|
—
|
6,546,465
|
Mark H. Lawrence
|
26,779
|
54,044
|
46,062
|
—
|
430,286
|
Connie Tang
|
—
|
—
|
—
|
—
|
—
|
Joseph Y. Chang
|
36,456
|
67,236
|
1,487,146
|
(158,464)
|
11,261,130
|
Chayce D. Clark
|
33,900
|
34,260
|
42,918
|
—
|
258,446
|
Ritch N. Wood
|
41,649
|
84,149
|
294,282
|
—
|
2,164,473
|
D. Matthew Dorny
|
209,268
|
37,375
|
196,915
|
—
|
3,063,348
|
Jeffrey C. Bettinger
|
15,719
|
—
|
10,805
|
—
|
93,487
|
(1) |
Executive and registrant contribution amounts are and have been reflected in the 2021 Summary Compensation Table and prior years’ summary compensation tables, as applicable.
Aggregate earnings are not reflected in the 2021 Summary Compensation Table and were not reflected in prior years’ summary compensation tables.
|
Name
|
Voluntary
Termination
($)
|
Involuntary
Termination
for Cause
($)
|
Involuntary
Termination
Not for Cause
($)
|
Termination
(Including
Constructive
Termination) in
Connection with
Change in Control ($)
|
Death ($)(1)
|
Disability ($)
|
Ryan S. Napierski
|
||||||
Severance(2)
|
675,000
|
—
|
1,898,758
|
4,014,091
|
548,758
|
773,758
|
Equity(3)
|
—
|
—
|
—
|
2,936,314
|
—
|
—
|
Deferred Compensation(4)
|
6,491,589
|
6,491,589
|
6,491,589
|
6,491,589
|
8,952,181
|
6,491,589
|
Health Benefits(5)
|
—
|
—
|
23,156
|
23,156
|
—
|
—
|
Total
|
7,166,589
|
6,491,589
|
8,413,503
|
13,465,151
|
9,500,939
|
7,265,347
|
Mark H. Lawrence
|
||||||
Severance(2)
|
431,250
|
—
|
991,756
|
1,756,881
|
273,006
|
416,756
|
Equity(3)
|
—
|
—
|
—
|
2,628,952
|
—
|
—
|
Deferred Compensation(4)
|
117,015
|
117,015
|
117,015
|
117,015
|
430,286
|
430,286
|
Health Benefits(5)
|
—
|
—
|
23,523
|
23,523
|
—
|
—
|
Total
|
548,265
|
117,015
|
1,132,294
|
4,526,371
|
703,292
|
847,042
|
Connie Tang
|
||||||
Severance(2)
|
442,500
|
—
|
866,420
|
1,477,636
|
128,920
|
276,420
|
Equity(3)
|
—
|
—
|
—
|
933,597
|
—
|
—
|
Deferred Compensation(4)
|
—
|
—
|
—
|
—
|
—
|
—
|
Health Benefits(5)
|
—
|
—
|
24,504
|
24,504
|
—
|
—
|
Total
|
442,500
|
—
|
890,924
|
2,435,737
|
128,920
|
276,420
|
Joseph Y. Chang
|
||||||
Severance(2)
|
1,376,250
|
—
|
2,057,330
|
2,999,205
|
338,580
|
509,830
|
Equity(3)
|
—
|
—
|
—
|
1,556,590
|
—
|
—
|
Deferred Compensation(4)
|
11,257,745
|
11,257,745
|
11,257,745
|
11,257,745
|
12,206,883
|
11,257,745
|
Health Benefits(5)
|
—
|
—
|
14,664
|
14,664
|
—
|
—
|
Total
|
12,633,995
|
11,257,745
|
13,329,738
|
15,828,203
|
12,545,463
|
11,767,575
|
Chayce D. Clark
|
||||||
Severance(2)
|
300,000
|
—
|
583,321
|
976,381
|
83,321
|
183,321
|
Equity(3)
|
—
|
—
|
—
|
907,609
|
—
|
—
|
Deferred Compensation(4)
|
117,498
|
117,498
|
117,498
|
117,498
|
258,446
|
258,446
|
Health Benefits(5)
|
—
|
—
|
23,308
|
23,308
|
—
|
—
|
Total
|
417,498
|
117,498
|
724,127
|
2,024,796
|
341,767
|
441,767
|
Ritch N. Wood
|
||||||
Severance(2)
|
—
|
—
|
—
|
—
|
—
|
—
|
Equity(3)
|
—
|
—
|
—
|
6,947,959
|
—
|
—
|
Deferred Compensation(4)
|
2,164,473
|
2,164,473
|
2,164,473
|
2,164,473
|
4,784,012
|
2,164,473
|
Health Benefits(5)
|
—
|
—
|
—
|
—
|
—
|
—
|
Total
|
2,164,473
|
2,164,473
|
2,164,473
|
9,112,433
|
4,784,012
|
2,164,473
|
D. Matthew Dorny
|
||||||
Severance(2)
|
—
|
—
|
—
|
—
|
—
|
—
|
Equity(3)
|
—
|
—
|
—
|
1,539,949
|
—
|
—
|
Deferred Compensation(4)
|
2,935,330
|
2,935,330
|
2,935,330
|
2,935,330
|
4,000,692
|
2,935,330
|
Health Benefits(5)
|
—
|
—
|
—
|
—
|
—
|
—
|
Total
|
2,935,330
|
2,935,330
|
2,935,330
|
4,475,279
|
4,000,692
|
2,935,330
|
(1) |
The amounts reported in this column do not include the proceeds payable on death from term life insurance policies for which we pay the premiums. The term life insurance coverage
amounts as of December 31, 2021 were $1 million for Messrs. Napierski, Lawrence, Chang, Wood and Ms. Tang; $800,000 for Mr. Clark; and $500,000 for Mr. Dorny.
|
(2) |
Our Executive Severance Policy applies to all of the Continuing NEOs. It does not apply to Messrs. Wood or Dorny because they stepped down from their executive officer positions
during 2021. This policy provides for the following termination payments in addition to salary and benefits earned prior to termination, provided that the NEO complies with certain non-competition and other obligations:
|
(a)
|
Voluntary termination:
|
(b)
|
Involuntary termination not for cause (including constructive termination):
|
(c)
|
Termination (including constructive termination) in connection with a change in control:
|
(d)
|
Termination upon death or disability:
|
(3) |
Our equity award agreements generally provide that unvested awards will terminate upon the termination of employment. However, vesting (of the target amount, in the case of
performance-based stock options) is accelerated upon the participant’s termination (including constructive termination) in connection with a change in control. Accordingly, the amounts in the equity category, in the case of
performance-based stock option awards, are based on the difference between the $50.75 closing price of our stock on December 31, 2021 and the exercise price of the applicable award, multiplied by the target number of unvested
options subject to the award. The amounts in the equity category in the case of time-based restricted stock units are based on the same closing price multiplied by the number of unvested restricted stock units subject to the
applicable award.
|
(4) |
The amounts reported for deferred compensation, other than for death and disability, reflect only the amounts deferred by the NEOs, the vested portion of amounts contributed by
us and earnings on such amounts. We may, at our discretion, accelerate vesting of the unvested amounts contributed by us in the event of a change in control. If we were to accelerate vesting, the total amounts of deferred
compensation payable to our NEOs would be as follows: Mr. Napierski – $6,491,589; Mr. Lawrence – $430,286; Ms. Tang – $0; Mr. Chang – $11,257,745; Mr. Clark – $258,446; Mr. Wood – $2,164,473; and Mr. Dorny – $2,935,330.
|
(5) |
Our Executive Severance Policy entitles the Continuing NEOs to a lump sum equal to twelve months of health care continuation coverage upon involuntary termination not for cause
(including constructive termination) and termination (including constructive termination) in connection with change in control. These payments are conditioned on the NEO’s compliance with certain non-competition and other
obligations.
|
Plan Category
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b)
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
Equity compensation plans approved by security holders
|
3,643,164(1)
|
$39.90(2)
|
3,643,164(3)
|
Equity compensation plans not approved by security holders
|
—
|
—
|
—
|
Total
|
3,643,164
|
$39.90
|
3,643,164
|
(1)
|
Consists of 2,758,297 options (538,250 time-based and 2,220,047 performance-based) and 884,867 restricted stock units (884,867 time-based and 0
performance-based). The performance-based awards are reported as the number of shares that become eligible for vesting or exercisable if performance is at the target level. The number of shares that are ultimately issued pursuant
to the performance-based awards could vary from the amounts reported based on the degree to which the performance goals are achieved.
|
(2)
|
Excludes the impact of time-based and performance-based restricted stock units, which are exercised for no consideration. The weighted average remaining
life of the options is 3.95 years.
|
(3)
|
Represents the number of shares available for future issuance under our Third Amended and Restated 2010 Omnibus Incentive Plan, under which we may grant
awards relating to shares of Class A Common Stock including options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other share-based awards and performance awards. Options and stock appreciation
rights are counted against the share reserve as one share for each option or stock appreciation right. Other awards are counted as 2.25 shares.
|
− |
Our program helps us to successfully recruit, motivate and retain experienced and talented executives.
|
− |
We implement a pay-for-performance philosophy through the use of incentives that:
|
a. |
Are tied to corporate and individual performance;
|
b. |
Align the financial interests of our executives with those of our stockholders; and
|
c. |
Are intended to drive superior stockholder value.
|
− |
2021 compensation was predominantly variable. Consistent with our commitment to pay for
performance, our CEO’s 2021 target compensation consisted of 83% variable compensation (cash incentive bonus and equity awards) and 17% fixed compensation (salary and all other compensation). Our other Continuing NEOs’ target
compensation was 70% variable and 30% fixed.
|
− |
2021 equity awards were predominantly performance-based. The annual equity awards that were
granted to our Continuing NEOs in 2021 also reflect our pay-for-performance philosophy. These equity awards were approximately 60% performance-based (based on grant date fair value). Going forward, the Committee generally plans to
continue using an equity mix of approximately 60% performance-based awards.
|
Fiscal 2021 ($)
|
Fiscal 2020 ($)
|
|||
Audit Fees(1)
|
3,468,200
|
3,070,000
|
||
Audit-Related Fees(2)
|
18,500
|
23,000
|
||
Tax Fees(3)
|
1,404,100
|
1,577,000
|
||
All Other Fees(4)
|
1,000
|
3,000
|
||
Total
|
4,891,800
|
4,673,000
|
(1) |
Audit Fees consist of fees billed or expected to be billed for the audit of annual financial statements, review of quarterly financial statements and services normally provided
in connection with statutory and regulatory filings or engagements.
|
(2) |
Audit-Related Fees for 2020 consist primarily of fees related to testing for acquisitions and the preparation of certain documents.
|
(3) |
Tax Fees for 2021 consist of approximately $1,009,700 in fees for tax compliance work and $394,400 in fees for tax planning work. Tax Fees for 2020 consist of approximately
$1,206,000 in fees for tax compliance work and $371,000 in fees for tax planning work.
|
(4) |
All Other Fees consist of access fees to accounting, financial and disclosure resources.
|
− |
The Audit Committee has reviewed and discussed the audited consolidated financial statements and accompanying management’s discussion and analysis of financial condition and results of
operations with our management and PwC. This discussion included PwC’s judgments about the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures
in the financial statements.
|
− |
The Audit Committee has discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the Securities and Exchange Commission.
|
− |
PwC also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee
concerning independence, and the Audit Committee has discussed with PwC the accounting firm’s independence. The Audit Committee also considered whether non-audit services provided by PwC during the last fiscal year were compatible
with maintaining the accounting firm’s independence.
|
− |
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our Annual Report on
Form 10‑K for the year ended December 31, 2021, for filing with the Securities and Exchange Commission.
|
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
|
|
Edwina D. Woodbury, Chair
|
|
Emma S. Battle*
|
|
Daniel W. Campbell
|
|
Thomas R. Pisano
|
|
* Ms. Battle was a member of the Audit Committee at the time this Committee reviewed, discussed and recommended the audited consolidated financial statements included in our Annual Report on Form
10-K for the year ended December 31, 2021.
|
− |
Eric Lund, the brother of Steve Lund, received approximately $149,000 in salary, bonuses, equity vestings and other compensation.
|
− |
Ryan Wood, the brother of Ritch Wood, received approximately $545,000 in salary, bonuses, equity vestings/exercises and other compensation, and he was granted 1,721 restricted stock
units and 2,259 performance-based stock options.
|
− |
Cade Napierski, the brother of Ryan Napierski, received approximately $620,000 in salary, bonuses, equity vestings, expatriate benefits and other compensation, and he was granted 1,316
restricted stock units and 1,727 performance-based stock options.
|
Directors, Named Executive Officers, 5% Stockholders
|
Number of
Shares(1)
|
Percent of
Class
|
Ryan S. Napierski
|
379,132
|
*
|
Joseph Y. Chang(2)
|
280,245
|
*
|
Steven J. Lund(3)
|
222,145
|
*
|
Mark H. Lawrence
|
162,142
|
*
|
Daniel W. Campbell(4)
|
108,289
|
*
|
Andrew D. Lipman(5)
|
82,214
|
*
|
Thomas R. Pisano(6)
|
58,435
|
*
|
Zheqing (Simon) Shen
|
19,454
|
*
|
Edwina D. Woodbury(7)
|
16,985
|
*
|
Laura Nathanson
|
8,957
|
*
|
Chayce D. Clark
|
7,577
|
*
|
Connie Tang
|
4,599
|
*
|
Emma S. Battle
|
2,467
|
*
|
All directors and executive officers as a group (14 persons)
|
1,418,408
|
2.8%
|
Ritch N. Wood(8)
|
574,666
|
1.1%
|
D. Matthew Dorny
|
77,317
|
*
|
Jeffrey C. Bettinger
|
—
|
*
|
State Street Corporation(9)
|
6,280,258
|
12.5%
|
The Vanguard Group(10)
|
6,018,628
|
12.0%
|
BlackRock Inc.(11)
|
5,760,841
|
11.5%
|
Wellington Management Group LLP(12)
|
4,162,517
|
8.3%
|
Renaissance Technologies LLC(13)
|
2,612,396
|
5.2%
|
* |
Less than 1%
|
(1) |
Includes shares that the above individuals have the right to acquire within 60 days as follows: Mr. Napierski – 320,619; Mr. Chang – 196,669; Mr. Lund – 0; Mr. Lawrence –
134,192; Mr. Campbell – 12,467; Mr. Lipman – 12,467; Mr. Pisano – 7,467; Mr. Shen – 7,467; Ms. Woodbury – 7,467; Ms. Nathanson – 2,467; Mr. Clark – 5,821; Ms. Tang – 4,599; Ms. Battle – 2,467; all directors and executive officers as
a group – 741,380; Mr. Wood – 554,756; and Mr. Dorny – 71,265.
|
(2) |
Includes 78,068 shares held in a trust for which Mr. Chang’s spouse serves as trustee and for which Mr. Chang and his spouse are beneficiaries.
|
(3) |
Includes 216,509 shares held by a family limited liability company for which Mr. and Mrs. Lund serve as co-managers and share voting and investment power. Also includes 5,636
shares held indirectly by Mr. and Mrs. Lund as co-trustees with respect to which they share voting and investment power.
|
(4) |
Includes 9,046 shares that Mr. Campbell jointly owns with his spouse; 76,766 shares held in a trust for which Mr. Campbell’s spouse serves as trustee and for which Mr. Campbell,
his spouse and descendants are beneficiaries; and 10,010 shares held by a family limited liability company owned and controlled by Mr. Campbell and his spouse.
|
(5) |
Includes 36,479 shares that Mr. Lipman jointly owns with his spouse and 15,400 shares that are held in a revocable trust for which Mr. Lipman and his spouse act as co-trustees
and share voting and investment power.
|
(6) |
Includes 50,968 shares that Mr. Pisano jointly owns with his spouse.
|
(7) |
In addition to the shares reported in the table above, Ms. Woodbury has elected to defer receipt of an additional 1,503 shares pursuant to the company’s Deferred Compensation
Plan.
|
(8) |
Includes 564 shares that Mr. Wood jointly owns with family members.
|
(9) |
Based on a Schedule 13G filed by State Street Corporation and a related entity with the SEC on February 10, 2022 and disclosing ownership information as of January 31, 2022.
According to the Schedule 13G, State Street Corporation has shared voting power for 6,167,332 shares and shared dispositive power for 6,280,258 shares, and SSGA Funds Management, Inc. has shared voting power for 4,278,802 shares and
shared dispositive power for 4,289,407 shares. These totals include shares beneficially owned by SSGA Funds Management, Inc.; State Street Global Advisors Limited; State Street Global Advisors, Australia, Limited; State Street
Global Advisors Asia Limited; State Street Global Advisors Europe Limited; and State Street Global Advisors Trust Company. The address of State Street Corporation and SSGA Funds Management, Inc. is State Street Financial Center, 1
Lincoln Street, Boston, MA 02111.
|
(10) |
Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 10, 2022 and disclosing ownership information as of December 31, 2021. According to the Schedule
13G/A, The Vanguard Group has shared voting power for 68,905 shares, sole dispositive power for 5,907,436 shares, and shared dispositive power for 111,192 shares. The address of The Vanguard Group is 100 Vanguard Blvd, Malvern, PA
19355.
|
(11) |
Based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 27, 2022 and disclosing ownership information as of December 31, 2021. According to the Schedule 13G/A,
BlackRock, Inc. has sole voting power for 5,462,104 shares and sole dispositive power for 5,760,841 shares. These totals include shares beneficially owned by BlackRock Life Limited; BlackRock Advisors, LLC; Aperio Group, LLC;
BlackRock (Netherlands) B.V.; BlackRock Fund Advisors; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock Financial Management, Inc.; BlackRock Japan Co., Ltd.;
BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock Investment Management (Australia) Limited; and BlackRock
Fund Managers Ltd. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
|
(12) |
Based on a Schedule 13G/A filed by Wellington Management Group LLP and related entities with the SEC on February 4, 2022 and disclosing ownership information as of December 31,
2021. According to the Schedule 13G/A , Wellington Management Group LLP and related entities beneficially own shares as follows:
|
Entity
|
Shared Voting
Power
|
Shared
Dispositive
Power
|
Aggregate
Amount
Beneficially
Owned
|
Wellington Management Group LLP
|
3,647,916
|
4,162,517
|
4,162,517
|
Wellington Group Holdings LLP
|
3,647,916
|
4,162,517
|
4,162,517
|
Wellington Investment Advisors Holdings LLP
|
3,647,916
|
4,162,517
|
4,162,517
|
Wellington Management Company LLP
|
3,618,765
|
4,038,411
|
4,038,411
|
(13) |
Based on a Schedule 13G/A filed by Renaissance Technologies LLC and a related entity with the SEC on February 11, 2022 and disclosing ownership information as of December 31,
2021. According to the Schedule 13G, both Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation, as the majority owner of Renaissance Technologies LLC, have sole voting power for 2,612,396 shares and sole
dispositive power for 2,612,396 shares. The address of both entities is 800 Third Avenue, New York, New York 10022.
|