Form 4: Academy Sports & Outdoors CEO Awarded Restricted Stock Units

CEO Steven Paul Lawrence received grants of time-based and performance-based restricted stock units (RSUs) under the company's 2020 Omnibus Incentive Plan.

Summary

• On March 26, 2024, Academy Sports & Outdoors CEO Steven Paul Lawrence was granted 49,633 time-based restricted stock units (RSUs) and 49,633 performance-based restricted stock units (PRSUs).
• The time-based RSUs vest in three equal installments beginning on the first anniversary of the grant date.
• The PRSUs vest if certain pre-established performance metrics related to the company's adjusted pre-tax income and return on invested capital over a 3-year period (February 4, 2024 to January 30, 2027) are achieved and certified by the Issuer's compensation committee.
• The number of PRSUs that vest may vary from 0% to 200% of the number shown above, subject to the Reporting Person's continued service with the Issuer through each applicable vesting date.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating a positive alignment of interests between management and shareholders. The performance-based component adds a layer of incentive for achieving financial goals.

Positives

• The grant of RSUs and PRSUs aligns the CEO's interests with the company's performance and shareholder value.
• The performance-based vesting criteria incentivize the CEO to achieve specific financial goals related to adjusted pre-tax income and return on invested capital.

Risks

• The vesting of PRSUs is dependent on the company achieving certain financial performance metrics, which may not be met.
• The actual number of PRSUs that vest may vary from 0% to 200% of the number shown above, depending on the level of achievement of the performance metrics.
• The CEO's continued service is required for the vesting of both time-based and performance-based RSUs.

Future Outlook

The vesting of the performance-based RSUs is contingent upon the company's performance over the next three years, specifically related to adjusted pre-tax income and return on invested capital.

Industry Context

Granting stock-based compensation to executives is a common practice in the retail industry to align management's interests with those of shareholders and incentivize long-term value creation.

Comparison to Industry Standards

• Companies like Dick's Sporting Goods (DKS) and Walmart (WMT) also utilize stock-based compensation as part of their executive compensation packages.
• The specific metrics used for performance-based vesting, such as adjusted pre-tax income and return on invested capital, are common financial measures used to evaluate company performance in the retail sector.
• The vesting schedules and potential payout ranges (0% to 200%) are also within the typical range observed in similar companies.

Stakeholder Impact

• Shareholders: The stock grants align the CEO's interests with shareholder value creation.
• Employees: The performance metrics may indirectly impact employee performance and incentives.
• Management: The CEO is incentivized to achieve specific financial goals.

Key Dates