DEF: Fossil Group Outlines 2025 Annual Meeting Agenda

Fossil Group, Inc. announces its 2025 Annual Meeting of Stockholders to address director elections, executive compensation, and auditor ratification, alongside significant board and executive leadership changes.

Summary

• The 2025 Annual Meeting of Stockholders will be held virtually on Friday, December 19, 2025, at 9:00 A.M. CT.
• Stockholders of record as of October 23, 2025, are entitled to vote.
• Key proposals include the election of eight directors, an advisory vote on executive compensation, and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending January 3, 2026.
• Mark R. Belgya and Eugene I. Davis will not stand for re-election to the Board, reducing the Board size from ten to eight directors.
• The Strategic Planning and Finance Committee (SPC) will be dissolved effective December 1, 2025, following the completion of financing and restructuring activities.
• For fiscal year 2024, the company achieved net sales of $1.150 billion (50% of target), adjusted operating income (loss) of $(24) million (102% of target), and TAG Opex Run Rate Savings of $101 million (51.7% of target).
• The overall cash incentive plan payout for 2024 was 63.9% of target.
• The company reported a Net Income of $(106) million in 2024, following $(156.7) million in 2023 and $(43.5) million in 2022.
• None of the current non-employee directors or Named Executive Officers (excluding Mr. Fogliato) were in compliance with the company's stock ownership guidelines as of November 15, 2025.
• Significant executive leadership changes occurred, including the appointment of Franco Fogliato as CEO in September 2024, and new Chief Digital Information Officer, Chief Financial Officer, Chief Supply Chain Officer, and Chief Commercial Officer in 2025.

Sentiment

Score: 4

Explanation: While the completion of financing and restructuring activities and the appointment of a new management team are positive steps towards stabilization, the company continues to report significant net losses and underperformed on key sales and savings targets for executive compensation. Non-compliance with stock ownership guidelines by directors and NEOs is also a concern. The overall picture suggests ongoing challenges despite strategic efforts.

Positives

• The company has completed its financing and restructuring activities, leading to the dissolution of the Strategic Planning and Finance Committee, suggesting financial stabilization.
• Adjusted operating income (loss) of $(24) million for fiscal year 2024 exceeded the target of $(25) million, resulting in a 102% payout for this metric.
• The company achieved a 200% payout for the second tranche of the 2023 PSU grant and a 100% payout for the first tranche of the 2024 PSU grant based on adjusted operating margin performance.
• A refreshed management team has been appointed with new Chief Digital Information Officer, Chief Financial Officer, Chief Supply Chain Officer, and Chief Commercial Officer in 2025.
• Total fees paid to Deloitte & Touche LLP decreased from $3,583,000 in 2023 to $3,188,215 in 2024.
• The Board emphasizes diversity in skills, experiences, and backgrounds, and maintains strong corporate governance practices, including independent board committees and risk oversight.

Negatives

• Net sales of $1.150 billion for fiscal year 2024 were below the target of $1.2 billion, resulting in only a 50% payout for this metric.
• TAG Opex Run Rate Savings of $101 million for fiscal year 2024 were below the target of $125 million, resulting in a 51.7% payout for this metric.
• The overall cash incentive plan payout was 63.9% of target, indicating underperformance against combined goals.
• The company reported a Net Income of $(106) million in 2024, following $(156.7) million in 2023 and $(43.5) million in 2022, indicating continued significant losses.
• None of the current non-employee directors or Named Executive Officers (excluding Mr. Fogliato) were in compliance with the company's stock ownership guidelines as of November 15, 2025.
• There has been significant turnover in executive leadership, including the former CEO, Interim CEO, CHRO, and CCO.

Risks

• Risk of not achieving performance conditions for equity awards (PSUs), as evidenced by a 0% payout for the third tranche of the 2022 PSU grant for fiscal year 2024.
• Challenges associated with integrating a new executive leadership team and managing significant turnover.
• Potential for lack of alignment with shareholder interests due to non-compliance with stock ownership guidelines by directors and Named Executive Officers.
• Ongoing enterprise risks including financial, operational, security, cybersecurity, business continuity, legal, and regulatory risks, which are subject to Board and ERM Committee oversight.
• Risk of losing key talent if executive compensation is not competitive or if performance goals are perceived as unattainable, despite efforts to attract, motivate, and retain executives.

Future Outlook

The company is focused on its 'Transform and Group plan (TAG)' and has completed significant financing and restructuring activities, aiming for future improvements. The Board and Compensation and Talent Management Committee will consider stockholder feedback from the advisory vote on executive compensation for future decisions. The next Annual Meeting is anticipated in May 2026.

Management Comments

• We believe hosting our Annual Meeting virtually expands access and enables improved communication by allowing stockholders to participate from any location.
• Our success with a diverse workforce also informs our views about the value of a Board that has persons of diverse skills, experiences and backgrounds.

Industry Context

Fossil Group operates in the competitive global retail, apparel, footwear, and accessories industry. The company's recent financing and restructuring activities, coupled with significant executive turnover, suggest it has been navigating challenging market conditions. The appointment of new leadership with expertise in digital, supply chain, and commercial operations indicates a strategic focus on adapting to evolving consumer trends, omnichannel strategies, and operational efficiencies prevalent in the modern retail landscape.

Comparison to Industry Standards

• The company benchmarks executive compensation against a peer group of 13 companies in the retail and apparel sector, including Caleres, Inc., Chicos FAS, Inc., Express, Inc., Genesco, Inc., G-III Apparel Group, Ltd., Guess, Inc., Lands' End, Inc., Movado Group, Inc., Oxford Industries, Inc., Steven Madden, Ltd., The Children's Place, Inc., Wolverine World Wide, Inc., and Zumiez, Inc.
• The objective for NEO base compensation is set around the median for comparable positions within this industry peer group.
• Severance and change in control arrangements are aligned with market practices, and the company maintains a double-trigger equity acceleration upon a change in control, consistent with common governance standards.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders will have the opportunity to vote on key governance matters, including director elections and executive compensation, and are impacted by the company's ongoing financial performance and strategic changes.
• Employees are affected by the significant executive turnover and the company's 'Transform and Group plan (TAG)', which aims to reorganize and improve operations.
• Customers may experience changes in product offerings or service as the company implements its transformation strategy and new leadership focuses on digital and commercial initiatives.
• Creditors and suppliers may be impacted by the company's financial health, although the completion of financing and restructuring activities suggests improved stability.

Next Steps

• Stockholders are urged to vote on the election of directors, executive compensation, and auditor ratification at the Annual Meeting on December 19, 2025.
• The Board and Compensation and Talent Management Committee will consider the outcome of the advisory vote on executive compensation when making future decisions.
• The 2026 Annual Meeting of Stockholders is anticipated to be held in May 2026.
• Stockholder proposals for inclusion in the 2026 Annual Meeting proxy materials must be received by January 29, 2026.

Key Dates

Recommendation

The company is undergoing significant transformation with a new CEO and several key executive appointments, and has completed crucial financing and restructuring activities. This suggests a strategic effort to stabilize and improve the business. However, the continued net losses and underperformance against sales and savings targets in 2024 indicate that the turnaround is still in progress and faces challenges. The non-compliance with stock ownership guidelines by directors and NEOs is also a concern. A 'Hold' recommendation is appropriate as the company navigates this transition, with potential for future improvement but also ongoing risks. Investors should monitor the execution of the TAG plan and future financial results closely.

Keywords

Fossil Group, Proxy Statement, Annual Meeting, Corporate Governance, Executive Compensation, Director Election, Financial Performance, Retail, Fashion, Accessories, Shareholder Vote, Risk Management, Board of Directors, CEO, CFO, Supply Chain, Digital Transformation