DEF 14A: Big Lots, Inc. Announces 2024 Annual Meeting of Shareholders and Executive Compensation Details

Big Lots, Inc. is set to hold its 2024 Annual Meeting of Shareholders virtually on May 29, 2024, and has released details regarding director nominations, executive compensation, and corporate governance practices.

Summary

• Big Lots, Inc. will hold its 2024 Annual Meeting of Shareholders virtually on May 29, 2024.
• Shareholders will vote on the election of nine directors, approve executive compensation on an advisory basis, and ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending February 1, 2025.
• The Board of Directors recommends voting for all director nominees, the approval of executive compensation, and the ratification of Deloitte & Touche LLP.
• The company's executive compensation program is designed to reward executives for achieving shortand long-term performance goals and creating long-term shareholder value.
• In fiscal year 2023, the Human Capital and Compensation Committee bifurcated the annual cash incentive award into a discretionary award and an objective corporate performance-based award.
• Long-term equity incentive awards included Performance Share Units (PSUs), Restricted Stock Units (RSUs), and Shareholder Value Creation Awards (SVCAs).
• Based on company performance, the first tranche of PSUs granted in fiscal year 2023 vested at 82% of the target performance level.
• The company's CEO pay ratio for fiscal year 2023 was 788 to 1, with the CEO's annual compensation at $7,755,707 and the median employee's compensation at $9,846.
• The company has adopted minimum share ownership requirements for all outside directors and Leadership Team members.
• The Board approved an Executive Officer Clawback Policy effective October 2, 2023, to comply with SEC and NYSE rules.
• The company's Corporate Governance Guidelines comply with applicable NYSE rules.
• The company has a Code of Business Conduct and Ethics, and a Code of Ethics for Financial Professionals.
• The company's senior executive severance agreements provide for certain cash payments and other benefits upon a change in control if the participant is terminated in connection with the change in control.

Sentiment

Score: 6

Explanation: The document is neutral in tone, providing factual information about the company's annual meeting, governance, and executive compensation. While it acknowledges challenges, it also expresses optimism for future progress.

Positives

• The company has a clawback policy in place, allowing for the recovery of erroneously awarded compensation.
• The company has minimum share ownership requirements for directors and executives, aligning their interests with shareholders.
• The company has an independent compensation consultant advising the Human Capital and Compensation Committee.
• The company has an independent Board Chair.
• The company has an anti-hedging and pledging policy in place.
• The company does not pay excise tax gross-ups under severance agreements in the event of a change in control.
• The company does not pay dividends on unearned performance awards.
• The company has double-trigger requirements for certain cash payments and other benefits upon a change in control.

Negatives

• The company experienced a net loss of $481.876 million in fiscal year 2023.
• The company's CEO pay ratio for fiscal year 2023 was 788 to 1, which may be viewed negatively by some stakeholders.
• The company did not achieve the Common Share closing price vesting thresholds applicable to the SVCAs granted in 2023.
• The company did not achieve the operating profit performance requirement applicable to the RSUs granted in 2022 and, as a result, none of the RSUs granted to the named executive officers in fiscal 2022 have vested.
• Based on the company's EPS and adjusted return on invested capital (ROIC) over the past three years, none of the PSUs granted in fiscal 2021 vested.

Risks

• The company faces risks related to the extremely challenging consumer and macroeconomic environment.
• The company faces risks related to information security and cybersecurity.
• The company faces risks related to environmental, social and governance (ESG) matters.
• The company faces risks related to the potential for accounting restatements due to material non-compliance with financial reporting requirements under U.S. securities laws.

Future Outlook

The company expects continued progress throughout fiscal 2024 and sees a path to positive comparable sales and a return to profitability despite the extremely challenging consumer and macroeconomic environment.

Industry Context

The document provides information relevant to shareholders and stakeholders regarding the company's governance, executive compensation, and financial performance within the retail industry.

Management Changes

Corporate Governance

Legal Proceedings

• A receivership proceeding was filed against Project Verte Inc. in August 2022 in the Delaware Court of Chancery.
• The receiver subsequently filed a bankruptcy proceeding under Chapter 7 of the U.S. Bankruptcy Code with respect to Project Verte Inc. in January 2023 in the U.S. Bankruptcy Court for the District of Delaware.

Stakeholder Impact

• Shareholders are provided with information to make informed decisions regarding director elections and executive compensation.
• Employees are impacted by the company's compensation policies and benefits programs.
• Customers are indirectly impacted by the company's overall performance and strategic direction.

Next Steps

• Shareholders are urged to vote online.
• Shareholders are able to attend, vote and submit questions by visiting www.virtualshareholdermeeting.com/BIG2024.

Key Dates

Keywords

Annual Meeting, Shareholders, Executive Compensation, Director Nominees, Proxy Statement, Corporate Governance, Deloitte & Touche LLP, PSUs, RSUs, SVCAs, Clawback Policy, Pay Ratio, Big Lots