Form 4: Academy Sports & Outdoors EVP & CMO Matthew McCabe Receives Restricted Stock Units

Matthew McCabe, EVP & CMO of Academy Sports & Outdoors, was granted restricted stock units (RSUs) and performance-based restricted stock units (PRSUs) on March 26, 2024.

Summary

• Matthew M. McCabe, EVP & CMO of Academy Sports & Outdoors, Inc., received grants of restricted stock units (RSUs) and performance-based restricted stock units (PRSUs) on March 26, 2024.
• A total of 9,544 time-based RSUs were granted, vesting in three equal installments beginning on the first anniversary of the grant date.
• Additionally, 9,544 performance-based RSUs (PRSUs) were granted, vesting based on the achievement of pre-established performance metrics related to the company's adjusted pre-tax income and return on invested capital over a three-year period from February 4, 2024, to January 30, 2027.
• The vesting of PRSUs can vary from 0% to 200% of the number shown, depending on the performance metrics achieved and certification by the Issuer's compensation committee, subject to continued service with the Issuer through each applicable vesting date.
• Each restricted stock unit represents a contingent right to receive one share of Academy Sports & Outdoors common stock.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, aligning management incentives with company performance. The sentiment is neutral to slightly positive as it indicates confidence in the company's future prospects.

Positives

• The grant of RSUs and PRSUs aligns executive compensation with the company's performance and long-term success.
• The performance-based vesting criteria for the PRSUs incentivize management to improve adjusted pre-tax income and return on invested capital.

Risks

• The vesting of the PRSUs is contingent on achieving specific performance metrics, which may not be met.
• The actual number of PRSUs that vest could be significantly lower than the initial grant if performance targets are not achieved.
• The value of the RSUs and PRSUs is subject to the market price of Academy Sports & Outdoors common stock, which can fluctuate.

Future Outlook

The vesting of the PRSUs is dependent on the company's future financial performance over the next three years.

Industry Context

Granting stock-based compensation is a common practice in the retail industry to align executive interests with shareholder value and incentivize long-term growth.

Comparison to Industry Standards

• Many companies in the retail sector, such as Dick's Sporting Goods (DKS) and Walmart (WMT), utilize stock-based compensation plans for their executives.
• The specific metrics used for performance-based vesting, such as adjusted pre-tax income and return on invested capital, are common financial indicators used across the industry.
• The vesting schedules and potential payout ranges (0-200%) are also within the typical range observed in similar companies.

Stakeholder Impact

• Shareholders: Aligns executive compensation with company performance, potentially increasing shareholder value.
• Employees: May boost morale by demonstrating confidence in the company's future.
• Management: Incentivizes executives to achieve performance targets.

Next Steps

• The compensation committee will certify the achievement of performance metrics at the end of the three-year performance period.
• The RSUs will vest according to the specified schedule.
• McCabe will continue to provide service to the Issuer through each applicable vesting date.

Key Dates