DEF 14A: Savers Value Village Announces 2024 Annual Meeting of Stockholders

Savers Value Village will hold its 2024 Annual Meeting of Stockholders virtually on June 5, 2024, to vote on director elections, auditor ratification, executive compensation, and the frequency of say-on-pay votes.

Summary

• Savers Value Village, Inc. will hold its 2024 Annual Meeting of Stockholders on June 5, 2024, at 9 A.M. Pacific Time in a virtual format.
• Stockholders of record as of April 8, 2024, are entitled to vote.
• The meeting will address the election of three Class I directors, ratification of KPMG LLP as the company's independent auditor, an advisory vote on executive compensation, and an advisory vote on the frequency of future executive compensation votes.
• The Board recommends voting for the election of the director nominees, for the ratification of KPMG, for the approval of executive compensation, and for holding say-on-pay votes every one year.
• The company emphasizes its commitment to strong corporate governance and sustainability practices.
• Executive compensation includes base salary, annual cash incentives, and long-term equity compensation, with a focus on aligning management interests with those of stockholders.
• In fiscal year 2023, the company processed 984 million pounds of secondhand goods and thrifters purchased 274 million items.
• Over the last five years, Savers Value Village has paid its non-profit partners more than $530 million for secondhand goods.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, with a positive outlook on the company's future and commitment to ESG principles. However, it also acknowledges potential risks and uncertainties.

Positives

• The company is committed to strong corporate governance practices.
• The company emphasizes sustainability and ESG principles in its business model.
• The company has a history of paying non-profit partners significant amounts for secondhand goods, totaling over $530 million in the last five years.
• The company has a high team member engagement score, considered best-in-class compared to other companies in the retail sector.
• The company filled 72% of open salaried management positions in the United States and Canada with internal promotions during fiscal year 2023.
• The company has implemented LED lighting retrofits for more than 90% of its U.S. and Canadian stores and warehouses.

Negatives

• BowFlex Inc., where Aina E. Konold serves as CFO, filed voluntary Chapter 11 bankruptcy petitions on March 4, 2024.

Risks

• The document contains forward-looking statements that are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict.
• Important factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, changes in consumer confidence and spending, and the company's ability to source and process a sufficient quantity of quality secondhand items at attractive prices.
• Risks associated with the company's status as a brick and mortar only retailer and its lack of operations in the growing online retail marketplace.
• The company's failure to open new profitable stores, or successfully enter new markets on a timely basis or at all.
• Risks associated with doing business with international manufacturers and suppliers including transportation and shipping challenges, regulatory risks in foreign jurisdictions and exchange rate risks.
• The loss of, or disruption or interruption in the operations of, its centralized distribution centers.
• Risks associated with litigation, the expense of defense, and the potential for adverse outcomes.
• The company's failure to properly hire and to retain key personnel and other qualified personnel.
• Risks associated with the timely and effective deployment, protection, and defense of computer networks and other electronic systems, including e-mail.
• Changes in government regulations, procedures and requirements.
• The company's ability to maintain an effective system of controls and produce timely and accurate financial statements or comply with applicable regulations.
• Risks associated with heightened geopolitical instability due to the conflicts in the Middle East and Eastern Europe.
• Outbreak of viruses or widespread illness, including the continued impact of COVID-19 and continuing or renewed regulatory responses thereto.

Future Outlook

Following completion of the IPO during fiscal year 2023, the company expects to continue to review and evaluate its compensation framework, which may result in future compensation programs that vary from historical practice.

Management Comments

• Aaron M. Rosen, Chairperson of the Board: 'Our Board is confident in the future success of Savers Value Village, which is underpinned by the Company's mission to champion reuse and inspire a future where secondhand is second nature.'

Industry Context

The company operates in the for-profit thrift industry, which is part of the broader retail sector. The company's business model is rooted in ESG principles, with a mission to positively impact its stakeholders: thrifters, NPPs and their donors, team members and stockholders. As a leader and pioneer of the for-profit thrift category, the company seeks to positively impact the environment by reducing waste and extending the life of reusable goods.

Comparison to Industry Standards

• The document references a peer group of publicly traded consumer-oriented companies used for executive compensation benchmarking, including Academy Sports & Outdoors, Inc., Boot Barn Holdings, Inc., Five Below, Inc., Floor & Decor Holdings, Inc., Grocery Outlet Holding Corp., Hibbett Inc., Leslies, Inc., Mister Car Wash, Inc., National Vision Holdings, Inc., Ollies Bargain Outlet Holdings, Inc., PriceSmart, Inc., Shake Shack Inc., Shoe Carnival, Inc., Sprouts Farmers Market, Inc., and Texas Roadhouse, Inc.
• The company's team member engagement is considered best-in-class, as measured by an external consultant, comparing the results to other companies in the retail sector.

Corporate Governance

Related Party Transactions

• In connection with the IPO, we entered into the Stockholders Agreement with the Ares Funds, pursuant to which the Ares Funds are entitled to designate individuals to be included in the slate of nominees for election to our Board.
• In connection with our IPO, we entered into a Registration Rights Agreement with the Ares Funds. Subject to certain conditions, the Registration Rights Agreement provides the Ares Funds with unlimited demand registrations and shelf registration rights, subject to certain conditions and exceptions.

Stakeholder Impact

• The company's business model is predicated on sourcing its supply from nonprofit organizations in the communities where it does business.
• The company is dedicated to providing a workplace environment where its diverse, purpose-driven workforce can flourish professionally and personally.
• The company encourages team member involvement to support local causes and its stores are empowered to support local relief efforts and community nonprofits.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting of Stockholders on June 5, 2024.
• The Board and Compensation Committee will consider the outcome of the advisory vote on executive compensation when determining future compensation arrangements for NEOs.
• The Committee expects to annually assess the composition of the peer group and may consider criteria beyond standard industry classifications in constructing and evaluating the peer group.

Key Dates

Keywords

annual meeting, stockholders, corporate governance, executive compensation, sustainability, directors, KPMG, ESG, thrift, secondhand goods