DEF: Winmark Corporation Announces Annual Meeting of Shareholders, Outlines Key Proposals

Winmark Corporation's proxy statement details proposals for the upcoming annual meeting, including director elections, executive compensation votes, and auditor ratification.

Summary

• Winmark Corporation will hold its Annual Meeting of Shareholders on April 23, 2025, in Minneapolis, Minnesota.
• Shareholders of record as of March 3, 2025, are eligible to vote.
• The meeting will address setting the number of directors at seven, electing seven directors, an advisory vote on executive compensation, an advisory vote on the frequency of executive compensation votes, and ratifying the appointment of Grant Thornton LLP as the independent auditor for the 2025 fiscal year.
• The Board of Directors recommends voting FOR all proposals and for holding advisory votes on executive compensation annually.
• The proxy statement and annual report are available online at www.winmarkcorporation.com.
• The company's executive compensation plan includes a base salary, a bonus opportunity capped at 100% of the base salary, and semi-annual stock option grants.
• In 2024, the Chair and Chief Executive Officer, Chief Financial Officer and Chief Operating Officer earned 69.6%, 65.5% and 68.7% of their annual bonus opportunity, respectively.
• The company's CEO pay ratio is 21.1 to 1.
• The annual cash retainer for nonemployee members of the Board of Directors will increase to $45,000 for 2025.

Sentiment

Score: 7

Explanation: The document is generally positive, outlining standard corporate governance procedures and highlighting shareholder engagement. The board recommends voting for all proposals, indicating confidence in the company's direction.

Positives

• The Board of Directors is recommending shareholders vote FOR all proposals.
• The company has a long-standing executive compensation plan designed to align management's interests with those of shareholders.
• The company has a history of shareholder engagement and responsiveness to feedback on executive compensation.
• The company's executive compensation plan includes a cap on the annual bonus opportunity, which is believed to reduce the incentive for excessive risk-taking.
• The company's NEOs have significant equity ownership in the company, which is believed to align their interests with those of shareholders.
• The company's CEO pay ratio is 21.1 to 1.

Negatives

• Shareholder engagement was lower in 2024 than in 2022 or 2023.
• The advisory vote to approve executive compensation is non-binding.

Risks

• The advisory vote on executive compensation is non-binding, so the Board is not required to take any action based on the outcome of the vote.
• The company's compensation policies, practices and programs work together to minimize exposure to excessive risk while appropriately pursuing strategies that emphasize maximizing shareholder value.

Future Outlook

The Board believes that submitting the advisory vote on executive compensation annually is appropriate for Winmark and its shareholders at this time.

Management Comments

• Your management team has significant ownership in Winmark not due to a requirement but by their individual choice.
• We believe that the design and execution of our executive compensation plan over the long term has greatly benefitted our shareholders.

Industry Context

The company benchmarks NEO compensation against a peer group of companies that includes consumer-oriented public companies in Minnesota, public resale companies, publicly held specialty retailers, and selected public company franchisors.

Comparison to Industry Standards

• The company's executive compensation plan is simpler than many public companies.
• The company does not utilize compensation consultants, which is different from many public companies.
• The company believes that the total compensation paid to our NEOs, in particular, our Chair and Chief Executive Officer, is below the median range of total compensation paid by other companies with which we compete for talent.

Related Party Transactions

• There were no reportable related party transactions in fiscal 2024.

Stakeholder Impact

• The proposals being voted on will impact shareholders, directors, and executive officers.
• The advisory vote on executive compensation will provide shareholders with an opportunity to express their views on the company's compensation practices.
• The election of directors will determine the composition of the Board of Directors, which is responsible for overseeing the company's management and strategy.

Next Steps

• Shareholders should review the proxy materials and vote on the proposals.
• The company will hold its Annual Meeting of Shareholders on April 23, 2025.
• The Board of Directors will consider the results of the advisory vote on executive compensation.

Key Dates