DEF: Under Armour Details 2025 Annual Meeting Agenda, Executive Pay, and Strategic Shifts Amidst Challenging Retail Climate

Under Armour, Inc. has filed its definitive proxy statement for the 2025 Annual Meeting of Stockholders, outlining proposals for director elections, executive compensation approval, auditor ratification, and a stockholder climate proposal, while detailing executive pay and corporate governance.

Summary

• The 2025 Annual Meeting of Stockholders will be held on September 3, 2025, to elect eleven directors, approve executive compensation on an advisory basis, ratify PricewaterhouseCoopers LLP as the independent registered public accounting firm for fiscal year ending March 31, 2026, and vote on a stockholder proposal.
• The Board of Directors recommends voting FOR the election of the eleven director nominees, FOR the approval of executive compensation, FOR the ratification of PricewaterhouseCoopers LLP, and AGAINST the stockholder proposal.
• Only holders of Class A Common Stock and Class B Common Stock as of June 6, 2025, are entitled to vote.
• For fiscal year 2025, Adjusted Operating Income reached $212 million, exceeding the target of $190 million, while Currency Neutral Net Revenue was $5.19 billion, falling between the threshold ($5.025 billion) and target ($5.25 billion).
• Annual cash incentive awards for named executive officers (excluding the CEO) were approved at 115% of the target level of performance.
• Performance-based equity awards for fiscal year 2025 (excluding the CEO) were earned at 107% of the target amount.
• Kevin Plank returned as President and Chief Executive Officer on April 1, 2024, with his annual base salary increasing to $900,000 effective July 1, 2024, and his compensation heavily weighted towards performance-based restricted stock units tied to a $13.00 share-price hurdle.
• Mr. Plank received a cash bonus of $1,035,000 for fiscal year 2025, equivalent to 100% of his salary at the 115% funding level of the annual cash incentive plan.
• The company is reassessing its GHG emissions reduction strategy and goals, including 2030 targets and a 2050 net-zero commitment, and will not pursue Science Based Targets initiative (SBTi) re-validation or validation at this time.

Sentiment

Score: 6

Explanation: The company demonstrated strong performance in adjusted operating income and gross margin improvement, indicating effective cost management and a focus on profitability. However, revenue growth was modest, and the company acknowledges a challenging retail environment and global trade uncertainties. The decision to reassess and not re-validate GHG emissions targets could be viewed negatively by ESG-focused investors, contrasting with industry peers. Executive compensation is structured to align with performance, but past performance awards were forfeited, and the CEO's key performance award remains unvested. Overall, the document presents a mixed financial picture with strategic adaptations underway.

Positives

• Adjusted Operating Income for fiscal year 2025 was $212 million, exceeding the target level of $190 million.
• Gross margins improved by 180 basis points in fiscal year 2025, primarily driven by supply chain benefits and reduced direct-to-consumer discounting.
• The company achieved a 115% achievement against the target level of performance for the annual cash incentive plan.
• Performance-based equity awards for fiscal year 2025 were earned at 107% of the target amount.
• Stockholders overwhelmingly approved the executive compensation proposal at the 2024 Annual Meeting, with over 90% of votes cast in favor.
• The Board maintains a separate Chair and Chief Executive Officer structure, with an independent Chair, and has committed to this separation for a three-year period.
• The Board is majority independent, with eleven out of twelve directors (92%) being independent non-management directors.
• All Board committees are fully independent.
• The company's new global headquarters in Baltimore Peninsula is designed to qualify for LEED platinum certification, WELL Building Standard certification, and International Living Future Institute net-zero energy certification.
• The company successfully acquired UNLESS COLLECTIVE, INC., a regenerative fashion brand, in August 2024.

Negatives

• The company faced a challenging retail environment in fiscal year 2025, including lower demand in its wholesale channel, particularly in North America and Asia-Pacific regions.
• Proactive strategies were implemented to reduce discounting and promotional activity in the direct-to-consumer channel, particularly in e-commerce.
• Currency Neutral Net Revenue for fiscal year 2025 was $5.19 billion, achieving between the threshold and target levels, but not exceeding the target of $5.25 billion.
• The company reported a GAAP Operating Loss of $(185) million for fiscal year 2025.
• Performance-based awards granted in fiscal year 2023 were forfeited in full due to not meeting the threshold performance condition.
• Performance-based awards granted in fiscal year 2024 are not currently expected to vest and are anticipated to be forfeited in full.
• The CEO's fiscal year 2025 performance-based restricted stock unit award, tied to a $13.00 share-price hurdle, was not achieved during fiscal year 2025.
• Scope 3 emissions increased by 15% between 2020 and 2021, and comprise 98% of Under Armour's GHG footprint.
• The company announced it will not pursue SBTi re-validation or validation of its emissions goals or a net-zero emissions commitment at this time.
• Jim Dausch, former Chief Strategy and Consumer Experience Officer, forfeited all unvested equity awards upon his departure on August 30, 2024.

Risks

• Climate change may increase volatility in the supply chain and disrupt the production and distribution of products.
• Failure to adapt to climate change may adversely affect consumer demand.
• General uncertainty and volatility in the retail sector.
• Macroeconomic factors can lead to stock market volatility.
• Risks related to information technology use and protection, including cybersecurity and data privacy.
• Risks related to corporate governance policies, practices, and structure.
• Risks related to sustainability, including environmental and human rights issues and impacts.
• Financial risks related to capital structure and liquidity, hedging and foreign currency transactions, acquisitions and divestitures, and significant capital projects.
• Reputational risks if climate goals are not backed by credible plans.
• Uncertainty in the global trade environment due to recent changes in trade policy.

Future Outlook

The Human Capital and Compensation Committee has delayed approval of the financial targets for the fiscal year 2026 annual cash incentive award due to global trade environment uncertainty, expecting to consider these elements in the second quarter of fiscal year 2026. For fiscal year 2026, the company will grant only time-based restricted stock unit awards to executive officers (excluding the CEO) and a restricted cash award to the CFO, deviating from historical performance-based awards. The CEO will receive a performance-based award tied to a share-price hurdle and time-based stock options, and will participate in the fiscal year 2026 annual cash incentive plan with a target bonus of 230% of his salary. The company is also reassessing its GHG emissions reduction strategy and goals, including 2030 targets and a 2050 net-zero commitment, and will not pursue SBTi re-validation at this time, focusing instead on improving data collection and preparing for evolving climate-related disclosure regulations.

Management Comments

• "As our founder and majority stockholder, tying the majority of Mr. Planks compensation solely to achievement of a significant share price increase represents his commitment to and confidence in the performance and growth of our business and provides further alignment with stockholder interests."
• "Our game plan remains flexible."

Industry Context

Under Armour faced a challenging retail environment in fiscal year 2025, characterized by lower demand in its wholesale channel, particularly in North America and Asia-Pacific. The company also implemented proactive strategies to reduce discounting and promotional activity in its direct-to-consumer e-commerce business. The broader retail sector is experiencing general uncertainty and volatility, compounded by global trade environment uncertainties due to recent changes in trade policy. The footwear and apparel industry is a significant contributor to global greenhouse gas emissions, accounting for 4% to 8.6% of the world's total GHG footprint.

Comparison to Industry Standards

• **Executive Compensation Peer Group:** The Human Capital and Compensation Committee used a peer group including Capri Holdings Limited, Levi Strauss & Co., Skechers U.S.A., Inc., Carters, Inc., lululemon athletica inc., Tapestry, Inc., Columbia Sportswear Company, NIKE, Inc., Urban Outfitters, Inc., Deckers Outdoor Corporation, PVH Corp., V.F. Corporation, Hanesbrands Inc., and Ralph Lauren Corporation to assess the competitiveness of executive compensation. The committee determined the company's executive compensation was reasonable when compared to this peer group and industry data.
• **Climate Transition Plans:** Industry peers such as Nike, New Balance, Adidas, and Puma have published detailed climate transition plans disclosing how they will achieve their GHG emissions reduction goals. In contrast, Under Armour is reassessing its GHG emissions reduction strategy and goals and will not pursue SBTi re-validation or validation at this time, which may position it differently from these competitors in terms of climate transparency and commitment.
• **GHG Emissions:** Under Armour's Scope 3 emissions increased 15% between 2020 and 2021 and constitute 98% of its GHG footprint, highlighting a significant area for reduction efforts compared to the industry's overall impact.
• **Sustainability Initiatives:** The company's new global headquarters is designed for high sustainability certifications (LEED platinum, WELL Building Standard, net-zero energy), and it launched the Under Armour x UNLESS regenerative sportswear collection, demonstrating specific projects aimed at sustainability, though direct comparable projects from competitors are not detailed in the document.

Management Changes

Corporate Governance

Legal Proceedings

• The company entered into a settlement agreement on June 20, 2024, resolving a securities class action lawsuit.
• A non-monetary provision in the settlement agreement restricts the company's ability to grant time-based restricted stock or restricted stock units to its Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer for a three-year period.
• Certain directors and officers have been named as defendants in derivative actions brought against the company, with the company advancing legal expenses for Mr. Plank ($95,336) and Mr. Frisk ($5,352) in fiscal year 2025.

Related Party Transactions

• An operating lease agreement with a company owned by Mr. Plank for a jet aircraft resulted in total lease payments of approximately $1.7 million for fiscal year 2025, with a fixed monthly payment of $145,300. The agreement was amended in March 2023 to extend through June 2028, with the lease rate determined to be at fair market value based on a third-party appraisal.
• The company acquired UNLESS COLLECTIVE, INC., co-founded by Eric Liedtke (who became an executive officer upon acquisition), for a total consideration of $10.3 million. Mr. Liedtke received approximately $968,800 in merger consideration and was repaid $124,800 in outstanding promissory notes.
• A consulting arrangement was entered into with Katharina Liedtke-Liss, spouse of Eric Liedtke, for UNLESS product operations. She received $96,600 in fees during fiscal year 2025 and a restricted stock unit grant with a grant date fair value of $115,000.

Stakeholder Impact

• **Shareholders:** Directly impacted by proposals for director elections, executive compensation approval, auditor ratification, and a stockholder climate proposal. Executive compensation and equity awards are designed to align with shareholder interests, with the CEO's performance-based compensation tied to a share-price hurdle. The settlement of a securities class action lawsuit and ongoing derivative actions also directly affect shareholder interests.
• **Employees:** Executive compensation programs aim to attract and retain highly qualified executives. Broad-based benefit plans, including a 401(k) plan and Employee Stock Purchase Plan, are available to employees generally. The company's human capital management strategies and programs, including those related to engagement and culture, impact the broader employee base.
• **Customers/Consumers:** Strategic decisions to reduce discounting and promotional activity in the direct-to-consumer channel may affect pricing and product availability. Risks related to climate change could impact product availability and consumer demand. The launch of the Under Armour x UNLESS regenerative sportswear collection aims to appeal to environmentally conscious consumers.
• **Suppliers/Creditors:** The company's financial health and risk management practices, including those related to capital structure and liquidity, impact creditors. Supply chain volatility due to climate change poses a risk to suppliers.
• **Regulatory Authorities:** The company's compliance with SEC disclosure rules, NYSE listing standards, and the adoption of a Clawback Policy demonstrate adherence to regulatory requirements. The company is also preparing for evolving climate-related disclosure regulations in the United States and the European Union.

Next Steps

• Elect eleven directors at the Annual Meeting on September 3, 2025.
• Approve, on an advisory basis, executive compensation at the Annual Meeting.
• Ratify the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm for fiscal year ending March 31, 2026.
• Vote on a stockholder proposal at the Annual Meeting.
• Human Capital and Compensation Committee to consider fiscal year 2026 annual cash incentive award financial targets during the second quarter of fiscal year 2026.
• Company to continue improving GHG emissions data collection and analysis.
• Company to actively monitor, review, and prepare for evolving climate-related disclosure regulations.
• Company to comply with applicable disclosure requirements on timeframes set forth under laws and regulations.
• Company to refine GHG emissions reduction efforts.
• Stockholders to submit proposals for the 2026 Annual Meeting by February 27, 2026 (SEC Rule 14a-8).
• Stockholders to submit director nominations for the 2026 Annual Meeting between January 28, 2026, and February 27, 2026.

Key Dates

Recommendation

Keywords

Under Armour, SEC filing, DEF 14A, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Director Election, Auditor Ratification, Stockholder Proposal, Climate Change, ESG, Financial Performance, Adjusted Operating Income, Net Revenue, Restricted Stock Units, Performance Awards, Kevin Plank, PricewaterhouseCoopers, Supply Chain, Retail Industry, Apparel, Footwear