UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.  )

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material under Rule 14a-12

BARNES & NOBLE EDUCATION, INC.

(Name of registrant as specified in its charter)

 

(Name of person(s) filing proxy statement, if other than the registrant)

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☐		Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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120 Mountain View Blvd.

Basking Ridge, New Jersey 07920

August 15, 2019

Dear Stockholder:

Barnes & Noble Education, Inc. (the “Company”) cordially invites you to attend the 2019 Annual Meeting of Stockholders (the “Annual Meeting”). The Annual Meeting will be held at 9:00 am, Eastern Time, on September 25, 2019 at the Embassy Suites by Hilton, 250 Connell Dr., Berkeley Heights, NJ 07922.

Information about the Annual Meeting and the various matters on which the stockholders will act is included in the Notice of Annual Meeting of Stockholders and the Proxy Statement. Also included are a proxy card and postage-paid return envelope. The Proxies are being solicited on behalf of the Board of Directors of the Company.

You are urged to read the Proxy Statement carefully and, whether or not you plan to attend the Annual Meeting, to promptly submit a proxy: (a) by telephone or the Internet following the instructions on the enclosed proxy card or (b) by signing, dating and returning the enclosed proxy card in the postage-paid return envelope provided.

The Board of Directors unanimously recommends that you vote (i) FOR the election of each of the Board of Directors’ nominees, (ii) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Proxy Statement, and (iii) FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accountants for the Company’s fiscal year ending May 2, 2020.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on September 25, 2019: The Proxy Statement and the Company’s 2019 Annual Report to Stockholders are available online at www.bned.com/investor.

Your vote is extremely important no matter how many shares you own. If you have any questions or require any assistance with voting your shares, please contact Barnes & Noble Education, Inc.’s proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Stockholders may call toll-free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

 

120 Mountain View Blvd.

Basking Ridge, New Jersey 07920

NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON SEPTEMBER 25, 2019

Barnes & Noble Education, Inc. (the “Company”) will hold its Annual Meeting of Stockholders (the “Annual Meeting”) at 9:00 am, Eastern Time, on September 25, 2019 at the Embassy Suites by Hilton, 250 Connell Dr., Berkeley Heights, NJ 07922 for the following purposes:

 

1.

To elect seven directors to serve until the 2020 annual meeting of stockholders and until their respective successors are duly elected and qualified;

 

2.

To vote on an advisory (non-binding) vote to approve executive compensation;

 

3.

To ratify the appointment of Ernst & Young LLP as the independent registered public accountants for the Company’s fiscal year ending May 2, 2020; and

 

4.

To transact such other business as may be properly brought before the Annual Meeting and any adjournment or postponement thereof.

Only holders of record of common stock of the Company as of the close of business on July 29, 2019 are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

The Board of Directors unanimously recommends that you vote (i) FOR the election of each of the Board of Directors’ nominees, (ii) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Proxy Statement, and (iii) FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accountants for the Company’s fiscal year ending May 2, 2020.

The Board of Directors urges you to read the Proxy Statement carefully and, whether or not you plan to attend the Annual Meeting, to promptly submit a proxy: (a) by telephone or the Internet following the instructions on the enclosed WHITE proxy card or (b) by signing, dating and returning the enclosed WHITE proxy card in the postage-paid return envelope provided.

 

TABLE OF CONTENTS

 

PROXY STATEMENT SUMMARY			1
INTRODUCTION			3
Stockholders Entitled to Vote			3
How to Vote			3
If You Are a Registered Holder of Common Stock			3
If You Hold Your Shares in “Street Name”			4
Questions on How to Vote			4
Quorum and Votes Required			4
Quorum			4
Votes Required and Treatment of Withheld Votes, Abstentions and Broker Non-Votes			4
Attendance at the Annual Meeting			4
How to Revoke Your Proxy			5
PROPOSAL ONE: ELECTION OF DIRECTORS			6
Introduction			6
Information Concerning the Directors and the Board of Directors’ Nominees			7
Nominees for Election as Director			7
CORPORATE GOVERNANCE			12
Meetings and Committees of the Board of Directors			12
Compensation Committee Interlocks and Insider Participation			14
Director Qualifications and Nominations			14
Minimum Qualifications			14
Nominating Process			15
Consideration of Stockholder-Nominated Directors			15
Certain Board of Directors’ Policies and Practices			16
Corporate Governance Guidelines and Code of Business Conduct and Ethics			16
Board of Directors Leadership Structure; Lead Independent Director			16
Risk Oversight			17
Communications Between Stockholders and the Board of Directors			17
Attendance at Annual Meetings			17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			18
Compensation Discussion and Analysis			20
Executive Summary			20
Compensation and Governance Highlights			20
Executive Leadership Transition			21
Recent Actions Taken by Compensation Committee			21
Highlights of Fiscal 2019 Company Performance			22
Pay and Performance Alignment in Fiscal 2019			22
Compensation Decisions for Fiscal 2020			23
Compensation Market References			23
Overview of Compensation Program Design			25
Elements of Pay			25
Base Salary			25
Performance-Based Annual Incentive Compensation			26
Long-Term Equity Incentives			28
Non-Plan Bonuses			30
Other Components of Compensation			30
Executive Incentive Compensation Clawback Policy			30
Prohibition on Hedging and Pledging Transactions			31
Executive Stock Ownership and Retention Guidelines			31
Compensation Policies and Practices as Related to Risk Management			31
Tax and Accounting Considerations			31

Roles of the Compensation Committee, Management, and our Compensation Consultant in Determining the Compensation of our Named Executive Officers			32
Roles of the Compensation Committee and Management			32
Role of the Compensation Consultant			32
Compensation Committee Report			33
Pay Ratio			33
EXECUTIVE COMPENSATION			34
Summary Compensation Table			34
All Other Compensation Table			35
2019 Grants of Plan-Based Awards Table			36
Narrative to the Summary Compensation Table and the Grants of Plan-Based Awards Table			36
Employment Arrangements with the Named Executive Officers			36
Employment Arrangements-General Provisions			37
Employment Arrangements-Severance and Change of Control Benefits			37
Employment Arrangements-Defined Terms			38
Severance Arrangement for Mr. Maloney			39
Outstanding Equity Awards at Fiscal Year End			40
Option Exercises and Stock Vested			41
Potential Payments Upon Termination or Change of Control			42
DIRECTOR COMPENSATION			43
Annual Retainer			43
Equity Compensation			43
Director Stock Ownership and Retention Guidelines			44
Director Compensation Table			44
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			45
Policy and Procedures Governing Related Person Transactions			45
Related Party Transactions			45
AUDIT RELATED MATTERS			46
Independent Registered Public Accountants			46
Audit Committee Report			46
PROPOSAL TWO: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION			47
PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS			48
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			49
OTHER MATTERS			50
Other Matters Brought Before the Annual Meeting			50
Proxy Solicitation			50
Financial and Other Information			50
Stockholder Proposals			50

PROXY STATEMENT SUMMARY

The following summary highlights information relating to the 2019 annual meeting of stockholders (the “Annual Meeting”) and executive compensation and corporate governance matters. Additional information is included in this Proxy Statement.

2019 Annual Meeting of Stockholders for Barnes & Noble Education, Inc.

 

General Information
Date and Time		September 25, 2019 at 9:00 am (Eastern Time)
Place		Embassy Suites by Hilton 250 Connell Dr. Berkeley Heights, NJ 07922
Record Date		July 29, 2019
Voting Matters and Recommendations
Voting Matter		Board of Directors Recommendations
Election of seven Directors		FOR ALL NOMINEES
Vote in an advisory non-binding capacity to approve executive compensation		FOR
Ratification of Ernst & Young LLP as the independent registered public accountants for the Company’s fiscal year ending May 2, 2020		FOR

The Board of Directors and management believe that good corporate governance promotes accountability to stockholders, enhances investor confidence in the Company and supports long-term value creation. The Company has implemented and fostered a culture of good corporate governance, which includes the following:

 

 

1

The Board of Directors and management seek to align the executive compensation program with the Company’s business strategy to attract, retain, and engage the talent we need to compete in our industry, and to align management with stockholders’ interests. The table below highlights key aspects of our executive compensation program.

 

 

2

BARNES & NOBLE EDUCATION, INC.

120 Mountain View Blvd.

Basking Ridge, New Jersey 07920

PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON SEPTEMBER 25, 2019

INTRODUCTION

This Proxy Statement and enclosed proxy card are being furnished commencing on or about August 15, 2019 in connection with the solicitation by the Board of Directors (the “Board of Directors”) of Barnes & Noble Education, Inc., a Delaware corporation (the “Company”), of proxies for use at its annual meeting of stockholders to be held on September 25, 2019 (the “Annual Meeting”), and any adjournment or postponement thereof for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.

The Board of Directors unanimously recommends that you vote (i) FOR the election of each of the Board of Directors’ nominees, (ii) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Proxy Statement, and (iii) FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accountants for the Company’s fiscal year ending May  2, 2020.

Stockholders Entitled to Vote

Only holders of record of the Company’s common stock, par value $0.01 per share (“Common Stock”), as of the close of business on July 29, 2019 are entitled to notice of and to vote at the Annual Meeting. As of the record date, 47,607,394 shares of Common Stock were outstanding. Each share of Common Stock entitles the record holder thereof to one vote on each matter brought before the Annual Meeting.

How to Vote

Your vote is very important to the Board of Directors no matter how many shares of our Common Stock you own. Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares as soon as possible.

If You Are a Registered Holder of Common Stock

If you are a registered holder of Common Stock, you may vote your shares either by voting by proxy in advance of the Annual Meeting or by voting in person at the Annual Meeting. By submitting a proxy, you are legally authorizing another person to vote your shares on your behalf. We urge you to use the enclosed proxy card to vote (i) FOR the election of each of the Board of Directors’ nominees, (ii) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Proxy Statement, and (iii) FOR the ratification of the appointment of Ernst & Young LLP as the independent registered public accountants for the Company’s fiscal year ending May 2, 2020. If you submit your executed proxy card or otherwise vote by telephone or by the Internet, your shares will be voted in accordance with your instructions; however, if you do not indicate how your shares are to be voted, then your shares will be voted in accordance with the Board of Directors’ recommendations set forth in this Proxy Statement. In addition, if any other matters are brought before the Annual Meeting (other than the proposals contained in this Proxy Statement), then the individuals listed on the proxy card will have the authority to vote your shares on those other matters in accordance with their discretion and judgment.

Whether or not you plan to attend the Annual Meeting, we urge you to promptly submit a proxy: (a) by telephone or the Internet following the instructions on the enclosed proxy card or (b) by signing, dating and returning the enclosed proxy card in the postage-paid return envelope provided. If you later decide to attend the Annual Meeting and vote in person, that vote will automatically revoke any previously submitted proxy.

 

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If You Hold Your Shares in “Street Name”

If you hold your shares in “street name”, i.e., through a bank, broker or other holder of record (a “custodian”), your custodian is the stockholder of record for purposes of voting and is required to vote your shares on your behalf in accordance with your instructions. If you do not give instructions to your custodian, your custodian will not be permitted to vote your shares with respect to “non-discretionary” items, which includes all matters on the agenda other than the ratification of the appointment of the independent registered public accountants. A “broker non-vote” occurs when a custodian does not vote on a particular proposal because it has not received voting instructions from the applicable beneficial owner and does not have discretionary voting power on the matter in question pursuant to New York Stock Exchange (“NYSE”) rules. Accordingly, we urge you to promptly give instructions to your custodian to vote FOR all items on the agenda by using the voting instruction card provided to you by your custodian. Please note that if you intend to vote your shares held in street name in person at the Annual Meeting, you must obtain a “legal proxy” from your custodian and provide it at the Annual Meeting.

Questions on How to Vote

If you have any questions or require any assistance with voting your shares, please contact the Company’s proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20^th Floor

New York, NY 10022

Stockholders may call toll-free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

Quorum and Votes Required

Quorum

The presence in person or by proxy at the Annual Meeting of the holders of shares of Common Stock of the Company having a majority of the voting power of the Common Stock entitled to vote at the Annual Meeting will constitute a quorum. Withheld votes, abstentions and any “broker non-votes” will be included in determining whether a quorum is present.

Votes Required and Treatment of Withheld Votes, Abstentions and Broker Non-Votes

Directors shall be elected by a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose and will have no effect on the election of nominees.

With respect to the proposal regarding approval, on an advisory basis, of compensation of the Company’s named executive officers, the Company will consider the affirmative vote of a majority of the votes cast on the proposal as approval of the compensation of the Company’s named executive officers (“NEOs”). Abstentions and broker non-votes will not be included in the votes cast on this proposal and will not have a positive or negative effect on the outcome of this proposal.

Approval of the proposal to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accountants requires the affirmative vote of a majority of the votes cast on the proposal. Abstentions will not be included in the votes cast and, as such, will have no effect on the outcome of this proposal.

Attendance at the Annual Meeting

Attendance at the Annual Meeting or any adjournment or postponement thereof will be limited to stockholders of the Company as of the close of business on the record date and guests of the Company. If you are

 

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a stockholder of record, your name will be verified against the list of stockholders of record prior to your admittance to the Annual Meeting or any adjournment or postponement thereof. Please be prepared to present photo identification for admission. If you hold your shares in street name, you will need to provide proof of beneficial ownership, such as a brokerage account statement, a copy of a voting instruction form provided by your custodian with respect to the Annual Meeting, or other similar evidence of ownership, as well as photo identification, in order to be admitted to the Annual Meeting. Please note that if you hold your shares in street name and intend to vote in person at the Annual Meeting, you must also provide a “legal proxy” obtained from your custodian.

How to Revoke Your Proxy

Your proxy is revocable. The procedure you must follow to revoke your proxy depends on how you hold your shares.

If you are a registered holder of Common Stock, you may revoke a previously submitted proxy by submitting another valid proxy (whether by telephone, the Internet or mail) or by providing a signed letter of revocation to the Corporate Secretary of the Company before the closing of the polls at the Annual Meeting. Only the latest-dated validly executed proxy will count. You also may revoke any previously submitted proxy and vote your shares in person at the Annual Meeting; however, simply attending the Annual Meeting without taking one of the above actions will not revoke your proxy.

If you hold shares in street name, in general, you may revoke a previously submitted voting instruction by submitting to your custodian another valid voting instruction (whether by telephone, the Internet or mail) or a signed letter of revocation. Please contact your custodian for detailed instructions on how to revoke your voting instruction and the applicable deadlines.

 

5

PROPOSAL ONE: ELECTION OF DIRECTORS

Introduction

Per the Company’s Amended and Restated Certificate of Incorporation, all seven of the current directors are standing for re-election, each to serve a one-year term. The Company strives to maintain a board with broad and diverse experience and judgment. The grid below summarizes the key qualifications, skills and attributes each of our directors possesses that were most relevant to the decision to nominate him or her to serve on the Board. The lack of a mark does not mean the director does not possess that qualification or skill; rather a mark indicates a specific area of focus or expertise on which the Board relies most heavily. Our director nominees exhibit high integrity, innovative thinking, a proven record of success, and knowledge of corporate governance. The director nominees bring a balance of important skills to our boardroom.

 

Skills and Attributes

Chiu

DeMatteo

Golden

Huseby

Ryan

Thornton

Wilson

Academia / Education

✓

✓

✓

✓

✓

✓

✓

Business Operations

✓

✓

✓

✓

✓

✓

✓

CEO and Executive

✓

✓

✓

✓

✓

✓

Commercial Business

✓

✓

✓

✓

✓

✓

Corporate Governance

✓

✓

✓

✓

✓

✓

✓

Customer Engagement / Marketing

✓

✓

✓

✓

✓

Data Analytics

✓

✓

Defense Industry or Military

✓

Digital / e-Commerce

✓

✓

✓

✓

✓

Financial / Investment

✓

✓

✓

✓

✓

✓

Government / Public Policy

✓

✓

International Business

✓

✓

✓

✓

✓

✓

Knowledge of Company Business

✓

✓

✓

✓

✓

✓

✓

Other Public Board

✓

✓

✓

✓

✓

✓

Other Relevant Industry

✓

✓

✓

✓

✓

✓

✓

Science, Technology, and Innovation

✓

✓

✓

✓

✓

✓

 

6

Information Concerning the Directors and the Board of Directors’ Nominees

Background information with respect to the Board of Directors’ nominees for election as directors appears below. See “Security Ownership of Certain Beneficial Owners and Management” for information regarding such persons’ holdings of equity securities of the Company.

 

Name		Age		Director Since		Position
Nominees for Election at the Annual Meeting
Emily C. Chiu*		36		2018		Director
Daniel A. DeMatteo*		71		2015		Director
David G. Golden*		61		2015		Director
Michael P. Huseby		64		2015		Chairman of the Board
John R. Ryan*		74		2015		Director
Jerry Sue Thornton*		72		2015		Director
David A. Wilson*		78		2015		Director

 

*	Independent for purposes of the NYSE listing standards.

Nominees for Election as Director

The following individuals are nominees for director at the Annual Meeting. The Board of Directors unanimously recommends a vote FOR each of the below nominees for director using the enclosed proxy card.

Emily C. Chiu was elected to the Board of Directors in June 2018. Ms. Chiu is a Strategic Development Principal at Square, Inc. (“Square”), where she oversees innovation for Square’s Cash App, an ecosystem of financial tools for individuals and sellers. Cash App is changing how people manage their money by providing easy ways to send, spend, and store funds. It has been the number one free finance app in the U.S. App Store for the past two years, and is consistently a top 20 free app, with mainstream adoption amongst tens of millions of engaged customers. Ms. Chiu is responsible for overseeing the vision, strategy, development, and commercialization of next-generation digital products and businesses to serve over 15 million monthly active users on the Cash App platform. Since she joined Square in July 2017, Ms. Chiu has also led Square’s corporate development strategy and acquisition and integration activities across Square’s SMB (Seller), direct-to-consumer (Cash App), and developer platform businesses. From July 2015 to July 2017, Ms. Chiu was a Partner and Head of Corporate Development at 500 Startups, LLC, a global startup accelerator and venture capital firm. In this role, Ms. Chiu led venture capital investments in the education technology space and founded 500 Startups’ M&A practice, advising entrepreneurs across a portfolio of over 2,000 startups in 60 countries. Prior to this, Ms. Chiu was a founding team member at UniversityNow, Inc., an education technology startup whose mission is to make higher education affordable and accessible through its digital learning platform and accredited universities that offer associate, bachelor’s, and master’s degree programs without student loan debt. From 2011 to 2015, Ms. Chiu served as Vice President of Operations and Strategic Development at UniversityNow, where she built the company’s operations from the ground up and led initiatives that scaled its platform to serve students worldwide, earning recognition from EDUCAUSE and The Bill & Melinda Gates Foundation as a “breakthrough model in college completion”. Previously, Ms. Chiu served as the Head of Operations at TEDx San Francisco, an affiliate of TED devoted to “ideas worth spreading”. Before this, Ms. Chiu was a private equity investor at GI Partners, a global investment firm with over $17 billion in capital under management across private equity and real estate strategies. Ms. Chiu started her career at Goldman Sachs & Co., where she worked on mergers and acquisitions and financing transactions across Goldman’s technology and healthcare investment banking groups. Since March 2016, Ms. Chiu has served on the Board of Governors of the Center for Creative Leadership, a provider of executive education focused on leadership development, and is a member of its Executive Committee. Ms. Chiu is a graduate of The Wharton School of Business and the College of Arts &

 

7

Sciences at the University of Pennsylvania, where she was a Wharton Research Scholar and member of The Huntsman Program in International Studies and Business.

Qualifications, Experience, Attributes and Skills. Ms. Chiu has more than 15 years of experience across the technology, education, and financial services industries. Ms. Chiu’s experience as a technology investment banker at Goldman Sachs included significant work with mergers, acquisitions, and financing transactions. Ms. Chiu’s subsequent experience as a private equity and venture capital investor involved principal investing and advisory roles that spanned company stages and strategies — from control-oriented investments to transform the business models of established companies to early-stage venture investments to scale innovative technology startups. As Head of Corporate Development at 500 Startups, Ms. Chiu advised startups across 60 countries on growth, fundraising, and exit strategies. As an operator in the EdTech space, Ms. Chiu built UniversityNow’s business from the ground up and was responsible for strategic initiatives that scaled its accredited online universities and digital learning platform to serve students worldwide. In her current role at Square, Ms. Chiu is responsible for innovation: conceptualizing, building, and scaling next-generation consumer products and digital businesses to serve tens of millions of customers. Prior to this, Ms. Chiu was responsible for leading mergers and acquisitions strategy, execution, and integration at Square, with a focus on driving technology and business transformation through inorganic strategies. Ms. Chiu brings to the Board of Directors relevant industry background, operating experience spanning organic and inorganic strategies, expertise in digital content and innovation, as well as an in-depth understanding of the impact of technology and digital transformation on business models.

Daniel A. DeMatteo was elected as a director in August 2015. Mr. DeMatteo has served as Gamestop Corp.’s Director and Executive Chairman since June 2010, and previously held other roles with Gamestop, including Chief Executive Officer from August 2008 to June 2010, Vice Chairman and Chief Operating Officer from March 2005 to August 2008, and President and Chief Operating Officer of Gamestop or its predecessor companies since November 1996. Mr. DeMatteo has served as an executive officer in the video game industry since 1988.

Qualifications, Experience, Attributes and Skills. Mr. DeMatteo brings to the Board of Directors over 25 years of experience as an executive officer, including 19 years of experience growing Gamestop and its predecessor companies into the world’s largest multichannel video game retailer. As one of the founders of Gamestop, Mr. DeMatteo has demonstrated a record of leadership, innovation and achievement. With his experience in the roles of Executive Chairman, Vice Chairman, Chief Executive Officer, President and Chief Operating Officer, Mr. DeMatteo provides the Board of Directors a unique and valuable perspective on corporate operations, strategy and business, including his perspective on the formula for success that has brought Gamestop to its current industry-leading position. The Board of Directors also benefits from Mr. DeMatteo’s entrepreneurial spirit and his extensive network of contacts and relationships within the retail industry.

David G. Golden was elected as a director in August 2015. Mr. Golden served as a director of Barnes & Noble, Inc. (“Barnes & Noble”) from October 2010 until the Company’s separation from Barnes & Noble in August 2015 (the “Spin Off”). Mr. Golden has been a Managing Partner at Revolution Ventures, an early-stage venture affiliate of Revolution LLC, since January 2013. From March 2006 until December 2011, Mr. Golden was a Partner, Executive Vice President and Strategic Advisor at Revolution LLC, a private investment company. Mr. Golden also served as Executive Chairman of Code Advisors, a private merchant bank focused on the intersections of technology and media from its founding in 2010 through 2012. Previously, Mr. Golden served in various senior positions over an 18-year period, including as Vice Chairman and Global Director of the Technology, Media and Telecom investment banking group, at JPMorgan Chase & Co. (“JPMorgan”), a financial services firm, and a predecessor company, Hambrecht & Quist, Inc. (“Hambrecht & Quist”). Prior to that, Mr. Golden worked as a corporate attorney at Davis Polk & Wardwell LLP. Mr. Golden has previously served as a member of the Board of Directors of Blackbaud, Inc. and Everyday Health, where he also served on their respective Audit Committees. Mr. Golden also is a member of the Advisory Board for Partners for Growth LLC, a venture lending firm, and he is a director of several private companies. He is a graduate of Harvard College and Harvard Law School, where he was an editor of The Harvard Law Review.

 

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Qualifications, Experience, Attributes and Skills. Mr. Golden has over 20 years of technology and finance experience as an investment banker specializing in the technology sector at JPMorgan, Hambrecht & Quist, and more recently as a managing partner and executive of Revolution Ventures and Executive Chairman of Code Advisors LLC. Mr. Golden’s technology experience also includes his service as a director and Advisory Board of Directors member of several technology companies including Blackbaud, Inc., a global provider of software services specifically designed for nonprofit organizations. Mr. Golden’s finance experience at Hambrecht & Quist and JPMorgan included significant work with mergers, capital markets and principal investing, and he has participated as lead merger advisor, equity underwriter or investor on over 150 transactions. Given this experience, Mr. Golden brings to the Board of Directors substantial knowledge of the technology sector and meaningful insight into the financial, strategic and capital-related issues technology companies face.

Michael P. Huseby serves as the Chairman of the Board of Directors and Chief Executive Officer. He was a member of the Board of Directors of Barnes & Noble from January 2014 and served as the Chief Executive Officer of Barnes & Noble until the complete legal and structural separation of the Company from Barnes & Noble on August 2, 2015. He was elected to the Board of Directors of the Company and was appointed Executive Chairman effective August 2, 2015. Effective on September 19, 2017, Mr. Huseby became Chief Executive Officer of the Company in addition to his role as Chairman of the Board of Directors. Previously, Mr. Huseby was appointed President of Barnes & Noble in July 2013, and Chief Financial Officer of Barnes & Noble in March 2012. From 2004 to 2011, Mr. Huseby served as Executive Vice President and Chief Financial Officer of Cablevision Systems Corporation, a leading telecommunications and media company, which was acquired by the Altice Group in June 2016. He served on the Cablevision Systems Corporation Board of Directors in 2000 and 2001. Prior to joining Cablevision, Mr. Huseby served as Executive Vice President and Chief Financial Officer of Charter Communications, Inc., a large cable operator in the United States. Mr. Huseby served on the Board of Directors of Charter Communications from May 2013 through May 2016. Mr. Huseby served as Executive Vice President, Finance and Administration, of AT&T Broadband, a leading provider of cable television services from 1999 to 2002, when it was sold to Comcast Corporation. In addition, Mr. Huseby spent over 20 years at Arthur Andersen, LLP and Andersen Worldwide, S.C., where he held the position of Global Equity Partner serving a myriad of clients, including a number of large publicly-traded companies. Mr. Huseby served on the Board of Directors of CommerceHub, Inc., a cloud based e-commerce fulfillment and marketing software platform company listed on Nasdaq, from July 2016 until May 2018 with his tenure ending upon the consummation of the sale of CommerceHub to financial sponsors. While on the Board of CommerceHub, Mr. Huseby served as chair of the Audit Committee and as a member of the Compensation Committee.

Qualifications, Experience, Attributes and Skills. Mr. Huseby has more than 30 years of financial and executive experience, having served as a senior executive at Barnes & Noble, Cablevision Systems Corporation and AT&T Broadband. Mr. Huseby’s experience also includes his service as a director and audit committee member of Charter Communications and CommerceHub, Inc., and as a member of Cablevision Systems Corporation’s Board of Directors. This experience allows Mr. Huseby to bring to the Board of Directors substantial knowledge and a wide range and depth of insights in technology, retail, financial, business and matters unique to publicly-traded companies.

John R. Ryan was elected to the Board of Directors in July 2015 and currently serves as the Lead Independent Director. Vice Admiral Ryan served as director of Barnes & Noble from July 2014 until the Spin-Off. Vice Admiral Ryan joined the Center for Creative Leadership’s Board of Directors of Governors in 2002 and has served as its President and Chief Executive Officer since 2007. From 2005 to 2007, he served as Chancellor of the State University of New York. Previously, Vice Admiral Ryan served as President of the State University of New York Maritime College from 2002 to 2005, Interim President of the State University of New York at Albany from 2004 to 2005 and Superintendent of the United States Naval Academy, Annapolis, Maryland from 1998 to 2002. Vice Admiral Ryan served in the United States Navy from 1967 until his retirement in 2002, including as Commander of the Fleet Air Mediterranean from 1995 to 1998, Commander of

 

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the Patrol Wings for the United States Pacific Fleet from 1993 to 1995 and Director of Logistics for the US Command from 1991 to 1993. Vice Admiral Ryan is also the lead director of CIT Group, Inc.

Qualifications, Experience, Attributes and Skills. Vice Admiral Ryan has a total of more than 35 years in military service, more than 10 years as a leader at major universities, and over a decade of executive and Board of Directors-level experience, including his service as lead director of CIT Group. Vice Admiral Ryan has substantial experience serving on public company Board of Directors undergoing multiple strategic transactions, such as separations, including serving as a director of Cablevision during its 2010 spinoff of Madison Square Garden, L.P., its 2011 spinoff of AMC Networks, Inc., and its 2013 sales of Clearview Cinemas and Optimum West to Bow Tie Cinemas and Charter Communications, respectively. Vice Admiral Ryan has also gained experience through the acquisition of Cablevision Systems Corporation by the Altice Group in June 2016, and was one of two independent directors on the Special Committee of the Board of Directors involved in the acquisition of MBS Textbook Exchange, LLC. This experience allows Vice Admiral Ryan to bring to the Board of Directors leadership and expertise in managing large complex organizations, and in particular the environment in which the Company operates.

Jerry Sue Thornton was elected as a director in August 2015. Dr. Thornton currently serves as Chief Executive Officer of Dream Catcher Educational Consulting, a consulting firm that provides coaching and professional development for newly selected college and university presidents. She previously served as President of Cuyahoga Community College from 1992 to 2013 (for which she is now President Emeritus). Prior to serving in that role, she was President of Lakewood College in Minnesota from 1985 to 1991. Dr. Thornton also serves as a director of Applied Industrial Technologies, Inc., Parkwood Corporation, a financial planning company headquartered in Cleveland, and JobsOhio, the economic development agency for the State of Ohio. She served as a director of American Greetings Corporation from 2000 until it became a private corporation in 2013, and also previously served on the board of American Greetings Corporation, American Family Insurance, FirstEnergy Corporation, National City Corporation, OfficeMax and RPM International Inc.

Qualifications, Experience, Attributes and Skills. Dr. Thornton has extensive executive leadership and management experience in higher education as well as public corporate Board of Directors experience. She served on the Board of Directors of National City Corporation (banking) and American Family Insurance, as well as other public companies where she served on numerous key Board of Directors committees. Dr. Thornton also served as one of two independent directors on the Special Committee of the Board of Directors involved in the acquisition of MBS Textbook Exchange, LLC. She is a recognized leader in the Northeast Ohio community and the State of Ohio. She has over 40 years of higher education work experience with 32 years in leadership positions. Dr. Thornton brings to the Board of Directors broad leadership and business skills, together with her extensive Board of Directors service for public companies and community organizations.

David A. Wilson was elected to the Board of Directors in July 2015. Dr. Wilson served as a director of Barnes & Noble from October 2010 until the Spin-Off. From 1995 to December 2013, Dr. Wilson served as President and Chief Executive Officer of the Graduate Management Admission Council, a not-for-profit education association dedicated to creating access to graduate management and professional education that provides the Graduate Management Admission Test (GMAT). In 1995, as CEO of the GMAT, Dr. Wilson took the paper and pencil test to a computer delivered test worldwide and was the first person to do so. From 2009 to 2010, Dr. Wilson was a director of Terra Industries Inc., a producer and marketer of nitrogen products, where he was a member of the audit committee. From 2002 to 2007, Dr. Wilson was a director of Laureate Education, Inc. (formerly Sylvan Learning Systems, Inc.), an operator of an international network of licensed campus-based and online universities and higher education institutions, where he was chairman of the audit committee beginning in 2003. From 1978 to 1994, Dr. Wilson was employed by Ernst & Young LLP (and its predecessor, Arthur Young & Company), serving as an Audit Principal through 1981, as an Audit Partner from 1981 to 1983 and thereafter in various capacities including Managing Partner, National Director of Professional Development, Chairman of Ernst & Young’s International Professional Development Committee and as a director of the Ernst & Young Foundation. From 1968 to 1978, Dr. Wilson served as a faculty member at Queen’s University

 

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(1968-1970), the University of Illinois at Urbana-Champaign (1970-1972), the University of Texas (1972-1978), where he was awarded tenure, and Harvard Business School (1976-1977). Dr. Wilson is also on the Board of Directors of CoreSite Realty Corporation, a publicly-traded real estate investment trust, and serves as lead director and as a member of the audit committee and the compensation committee. In November 2015, he was elected as Trustee of Johnson & Wales University, a not-for-profit institution, and serves as chair of its audit committee and as a member of its finance and budget committee. Dr. Wilson is a National Association of Corporate Directors (NACD) Governance Leadership Fellow (the highest award they give) and received the CERT Certificate in Cybersecurity Oversight awarded by the Software Engineering Institute of Carnegie Mellon University. He was also a 2015 honoree of the NACD Directorship 100 award in recognition of exemplary board leadership.

Qualifications, Experience, Attributes and Skills. Dr. Wilson has a total of more than 30 years of executive and Board of Directors-level experience, including serving on the Board of Directors of Terra Industries Inc. and Laureate Education, Inc. while those companies were involved in multiple strategic transactions, as well as serving as President and Chief Executive Officer of the Graduate Management Admission Council. Dr. Wilson also has more than 16 years of financial and accounting expertise, including as an Audit Partner at Ernst & Young LLP (and its predecessor, Arthur Young & Company). This experience allows Dr. Wilson to bring to the Board of Directors substantial financial and accounting knowledge and valuable insights.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE USING THE ENCLOSED PROXY CARD.

 

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CORPORATE GOVERNANCE

Meetings and Committees of the Board of Directors

The Board of Directors met ten (10) times during the Company’s fiscal year 2019, which ended April 27, 2019 (“Fiscal 2019”). All directors attended at least 75% of all meetings of the Board of Directors and committees of which he or she was a member.

Based on information supplied to it by the directors, the Board has affirmatively determined that each of Emily C. Chiu, Daniel A. DeMatteo, David G. Golden, John R. Ryan, Jerry Sue Thornton, and David A. Wilson is “independent” under the listing standards of the NYSE, and has made such determinations based on the fact that none of such persons have had, or currently have, any relationship with the Company or its affiliates or any executive officer of the Company or his or her affiliates, that would currently impair their independence, including, without limitation, any such commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship.

The Board has three standing committees: the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee.

Audit Committee. The responsibilities of the Audit Committee include, among other duties:

 

•

overseeing the quality and integrity of our financial statements, accounting practices and financial information we provide to the Securities and Exchange Commission (“SEC”) or the public;

 

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reviewing our annual and interim financial statements, the report of our independent registered public accounting firm on our annual financial statements, Management’s Report on Internal Control over Financial Reporting and the disclosures under Management’s Discussion and Analysis of Financial Condition and Results of Operations;

 

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selecting and appointing an independent registered public accounting firm;

 

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pre-approving all services to be provided to us by our independent registered public accounting firm;

 

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reviewing with our independent registered public accounting firm and our management the accounting firm’s significant findings and recommendations upon the completion of the annual financial audit and quarterly reviews;

 

•

reviewing and evaluating the qualification, performance, fees and independence of our registered public accounting firm;

 

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meeting with our independent registered public accounting firm and our management regarding our internal controls, critical accounting policies and practices, and other matters;

 

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discussing with our independent registered public accounting firm and our management earnings releases prior to their issuance;

 

•

overseeing our enterprise risk assessment and management;

 

•

overseeing our internal audit function;

 

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reviewing and approving related party transactions (see “Certain Relationships and Related Transactions” below); and

 

•

overseeing our compliance program, response to regulatory actions involving financial, accounting and internal control matters, internal controls and risk management policies.

The Board of Directors has adopted a written charter setting out the functions of the Audit Committee, a copy of which is available on the Company’s website at www.bned.com and is available in print to any stockholder who requests it in writing directed to the Company’s Corporate Secretary, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920.

 

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The members of the Audit Committee currently are Dr. David A. Wilson (Chair), Emily C. Chiu, Daniel A. DeMatteo and David G. Golden. In addition to meeting the independence standards of the NYSE listing standards, each member of the Audit Committee meets the independence standards established by the SEC for audit committee members and our Corporate Governance Guidelines. The Board of Directors has also determined that each of Dr. Wilson, Ms. Chiu, Mr. DeMatteo and Mr. Golden is financially literate for purposes of the NYSE listing standards and has the requisite attributes of an “audit committee financial expert” as defined by regulations promulgated by the SEC and that such attributes were acquired through relevant education and/or experience. The Audit Committee met seven (7) times during Fiscal 2019.

Compensation Committee. The responsibilities of the Compensation Committee include, among other duties:

 

•

setting and reviewing our general policy regarding executive compensation;

 

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determining the compensation of our Chief Executive Officer and other executive officers;

 

•

approving employment agreements for our Chief Executive Officer and other executive officers;

 

•

reviewing the benefits provided to our Chief Executive Officer and other executive officers;

 

•

overseeing our overall compensation structure, practices and benefit plans;

 

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administering our executive bonus and equity-based incentive plans; and

 

•

assessing the independence of compensation consultants, legal counsel and other advisors to the Compensation Committee and hiring, approving the fees and overseeing the work of, and terminating the services of such advisors.

The Board of Directors has adopted a written charter setting out the functions of the Compensation Committee, a copy of which is available on the Company’s website at www.bned.com and is available in print to any stockholder who requests it in writing directed to the Company’s Corporate Secretary, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920.

The members of the Compensation Committee currently are David G. Golden (Chair), Daniel A. DeMatteo, Vice Admiral John R. Ryan and Dr. Jerry Sue Thornton. All members of the Compensation Committee meet the independence standards of the NYSE listing standards and our Corporate Governance Guidelines and are “non-employee directors” within the meaning of Rule 16b-3 under the Securities Exchange Act. The Compensation Committee met five (5) times during Fiscal 2019. The Compensation Committee has engaged Mercer, an independent consulting firm, to provide information, analyses and advice regarding executive compensation and other matters. For further discussion of the nature and scope of the independent compensation consultant’s assignment, see the “Compensation Discussion and Analysis-Roles of the Compensation Committee, Management, and our Compensation Consultant in Determining the Compensation of our Named Executive Officers-Role of the Compensation Consultant” section of this Proxy Statement.

Corporate Governance and Nominating Committee. The responsibilities of the Corporate Governance and Nominating Committee include, among other duties:

 

•

overseeing our corporate governance practices;

 

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reviewing and recommending to our Board of Directors amendments to our committee charters and other corporate governance guidelines;

 

•

reviewing and making recommendations to our Board of Directors regarding the structure of our various Board of Directors committees;

 

•

identifying, reviewing and recommending to our Board of Directors individuals for election to the Board of Directors;

 

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•

adopting and reviewing policies regarding the consideration of Board of Directors candidates proposed by stockholders and other criteria for Board of Directors membership; and

 

•

overseeing our Board of Directors’ annual self-evaluation.

The Board of Directors has adopted a written charter setting out the functions of the Corporate Governance and Nominating Committee, a copy of which is available on the Company’s website at www.bned.com and is available in print to any stockholder who requests it in writing directed to the Company’s Corporate Secretary, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920.

The members of the Corporate Governance and Nominating Committee currently are Vice Admiral John R. Ryan (Chair), Emily C. Chiu, Dr. Jerry Sue Thornton and Dr. David A. Wilson.

The Corporate Governance and Nominating Committee consists entirely of independent directors, each of whom meet the independence requirements set forth in the listing standards of the NYSE and our Corporate Governance Guidelines. The Corporate Governance and Nominating Committee met four (4) times during Fiscal 2019.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee has ever been an employee of the Company, and none of them had a relationship requiring disclosure in this Proxy Statement under Item 404 of SEC Regulation S-K. None of the Company’s executive officers serve, or in Fiscal 2019 served, as a member of the Board of Directors or compensation committee of any entity that has one or more of its executive officers serving as a member of the Company’s Board of Directors or the Company’s Compensation Committee.

Director Qualifications and Nominations

Minimum Qualifications

The Company does not set specific criteria for directors except to the extent required to meet applicable legal, regulatory and stock exchange requirements, including, but not limited to, the independence requirements of the NYSE listing standards and the SEC, as applicable. Nominees for director will be selected on the basis of outstanding achievement in their personal careers, board experience, wisdom, integrity, ability to make independent and analytical inquiries, understanding of the business environment, and willingness to devote adequate time to Board of Directors duties. While the selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, the Corporate Governance and Nominating Committee believes that each director should have a basic understanding of (a) the principal operational and financial objectives and plans and strategies of the Company, (b) the results of operations and financial condition of the Company and of any significant subsidiaries or businesses, and (c) the relative standing of the Company and its businesses in relation to its competitors.

The Company does not have a specific policy regarding the diversity of the Board of Directors. Instead, the Corporate Governance and Nominating Committee considers the Board of Directors’ overall composition when considering director candidates, including whether the Board of Directors has an appropriate combination of professional experience, skills, knowledge and variety of viewpoints and backgrounds in light of the Company’s current and expected future needs. In addition, the Corporate Governance and Nominating Committee also believes that it is desirable for new candidates to contribute to a variety of viewpoints on the Board of Directors, which may be enhanced by a mix of different professional and personal backgrounds and experiences.

 

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Nominating Process

Although the process for identifying and evaluating candidates to fill vacancies and/or reduce or expand the Board of Directors will inevitably require a practical approach in light of the particular circumstances at such time, the Board of Directors has adopted the following process to guide the Corporate Governance and Nominating Committee in this respect. The Corporate Governance and Nominating Committee is willing to consider candidates submitted by a variety of sources (including incumbent directors, stockholders (as described below), Company management and independent third-party search firms) when reviewing candidates to fill vacancies and/or expand the Board of Directors. If a vacancy arises or the Board of Directors decides to expand its membership, the Corporate Governance and Nominating Committee may ask each director to submit a list of potential candidates for consideration. The Corporate Governance and Nominating Committee then evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he or she is potentially qualified to serve on the Board of Directors. At that time, the Corporate Governance and Nominating Committee also will consider potential nominees submitted by stockholders, if any, in accordance with the procedures described below, or by the Company’s management and, if the Corporate Governance and Nominating Committee deems it necessary, retain an independent third-party search firm to provide potential candidates. The Corporate Governance and Nominating Committee seeks to identify and recruit the best available candidates, and it intends to evaluate qualified stockholder nominees on the same basis as those submitted by Board of Directors members, Company management, independent third-party search firms or other sources.

After completing this process, the Corporate Governance and Nominating Committee will determine whether one or more candidates are sufficiently qualified to warrant further investigation. If the process yields one or more desirable candidate(s), the Corporate Governance and Nominating Committee will rank them by order of preference, depending on their respective qualifications and the Company’s needs. The Corporate Governance and Nominating Committee Chair will then contact the preferred candidate(s) to evaluate their potential interest and to set up interviews with the full Corporate Governance and Nominating Committee. All such interviews include only the candidate and one or more Corporate Governance and Nominating Committee members. Based upon interview results and appropriate background checks, the Corporate Governance and Nominating Committee then decides whether it will recommend the candidate’s nomination to the full Board of Directors.

When nominating a sitting director for re-election, the Corporate Governance and Nominating Committee will consider the director’s performance on the Board of Directors and its committees and the director’s qualifications in respect of the criteria referred to above.

Consideration of Stockholder-Nominated Directors

In accordance with its charter, the Corporate Governance and Nominating Committee will consider candidates for election to the Board of Directors at a stockholder meeting if submitted by an eligible stockholder in a timely manner. Any eligible stockholder wishing to submit a candidate for consideration for election at a stockholder meeting should send the following information to the Company’s Corporate Secretary, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920.

 

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Stockholder’s name, number of shares owned, length of period held, and proof of ownership;

 

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Name, age and address of candidate;

 

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A detailed resume describing, among other things, the candidate’s educational background, occupation, employment history for at least the previous five years, and material outside commitments (e.g., memberships on other Board of Directors and committees, charitable foundations, etc.);

 

•

A supporting statement which describes the candidate’s reasons for seeking election to the Board of Directors;

 

15

•

A description of any arrangements or understandings between the candidate and the Company and/or the stockholder; and

 

•

A signed statement from the candidate, confirming his/her willingness to serve on the Board of Directors.

Eligible stockholders who do not wish to follow the foregoing procedure but who wish instead to nominate directly one or more persons for election to the Board of Directors must comply with the procedures established by our bylaws. Our bylaws provide that in order to nominate a person for election as a director at next year’s annual meeting, a notice of an intention to nominate one or more directors containing certain information required by the bylaws must be delivered to the Corporate Secretary of the Company. To be timely, whether or not a stockholder wishes to have his or her nominees included in the Company’s proxy materials, the Corporate Secretary of the Company must receive nominations for election to the Board of Directors for its 2020 annual meeting of stockholders at Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920 no earlier than May 28, 2020 and no later than June 27, 2020. For more information on stockholder proposals, see “Stockholder Proposals” on page 50.

Additionally, the Corporate Governance and Nominating Committee will consider stockholder nominated candidates if a vacancy arises or if the Board of Directors decides to expand its membership, and at such other times as the Corporate Governance and Nominating Committee deems necessary or appropriate. In any such event, any stockholder wishing to submit a candidate for consideration should send the above-listed information to the Company’s Corporate Secretary, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920.

All seven of the director nominees identified in this Proxy Statement currently serve as directors of the Company and all have been recommended by our Corporate Governance and Nominating Committee to our Board of Directors for re-election. The Corporate Governance and Nominating Committee recommends candidates to the full Board of Directors after receiving input from all directors. The Corporate Governance and Nominating Committee members, other members of the Board of Directors and senior management discuss potential candidates during this search process.

Certain Board of Directors’ Policies and Practices

Corporate Governance Guidelines and Code of Business Conduct and Ethics

The Board of Directors has adopted Corporate Governance Guidelines applicable to the members of the Board of Directors. The Board of Directors has also adopted a Code of Business Conduct and Ethics applicable to the Company’s employees, directors, agents and representatives, including consultants. The Corporate Governance Guidelines and the Code of Business Conduct and Ethics are available on the Company’s website at www.bned.com. Copies of the Corporate Governance Guidelines and the Code of Business Conduct and Ethics are available in print to any stockholder who requests them in writing to the Company’s Corporate Secretary, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920.

Board of Directors Leadership Structure; Lead Independent Director

Mr. Huseby currently serves as the Chairman of the Board and Chief Executive Officer (“CEO”) of the Company. The roles of CEO and Chairman of the Board were combined following Mr. Huseby’s appointment to the position of CEO, effective September 19, 2017. The Company believes that a combined CEO and Chairman role is appropriate because it provides an efficient and effective leadership structure for the Company. It promotes alignment between the Board of Directors and management on the Company’s strategic objectives, facilitates effective presentation of information to enable the Board of Directors to fulfill its responsibilities, and allows for productive and effective Board of Directors’ meetings. The Board of Directors believes that the right Board of Directors leadership structure should, among other things, be determined by the needs and

 

16

circumstances of the Company and the then current membership of the Board of Directors, and that the Board of Directors should remain adaptable to shaping the leadership structure as those needs and circumstances change.

Vice Admiral John R. Ryan is currently the Lead Independent Director. The Lead Independent Director, among other things, (a) acts as a liaison between the independent directors and the Company’s management, (b) presides at the executive sessions of non-management and independent directors, and has the authority to call additional executive sessions as appropriate, (c) chairs Board of Directors meetings in the Chairman’s absence, (d) coordinates with the Chairman on agendas and schedules for Board of Directors meetings, and information sent to the Board of Directors, reviewing and approving these as appropriate, and (e) is available for consultation and communication with major stockholders as appropriate.

In accordance with the Corporate Governance Guidelines, non-management directors meet in executive sessions at every Board of Directors meeting. Independent directors also meet at least once a year in an executive session of only independent directors. Currently, all of the non-management directors are independent directors.

Risk Oversight

The Board of Directors’ primary function is one of oversight. In connection with its oversight function, the Board of Directors oversees the Company’s policies and procedures for managing risk. The Board of Directors administers its risk oversight function primarily through its Committees. Board of Directors Committees have assumed oversight of various risks that have been identified through the Company’s enterprise risk assessment. The Audit Committee reviews the Company’s risk assessment and risk management policies and the Audit Committee reports to the Board of Directors on the Company’s enterprise risk assessment. The Compensation Committee oversees compensation risk through its review of compensation practices and assessment of the potential impact of those practices on risk-taking.

Communications between Stockholders and the Board of Directors

Stockholders and other interested persons seeking to communicate with the Board of Directors should submit any communications in writing to the Company’s Corporate Secretary, Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920. Any such communication must state the number of shares beneficially owned by the stockholder making the communication. The Company’s Corporate Secretary will forward such communication to the full Board of Directors or to any individual director or directors (including the non-management directors as a group) to whom the communication is directed.

Attendance at Annual Meetings

All Board of Directors members are expected to attend in person the Company’s annual meetings of stockholders and be available to address questions or concerns raised by stockholders. All of the Board of Directors members then serving attended the 2018 Annual Meeting of Stockholders.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of shares of Common Stock, as of July 29, 2019, unless otherwise indicated, by each person known by the Company to own beneficially more than five percent of the Company’s outstanding Common Stock, by each director, by each executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group. Except as otherwise noted, to the Company’s knowledge, each person named in the table has sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by him, her or it.

 

Name of Beneficial Owner		Shares Beneficially Owned (1)				Percent of Class (1)
Five Percent Stockholders
BlackRock, Inc. (2)			5,514,533			11.58%
Leonard Riggio (3)			5,421,185			11.39%
Dimensional Fund Advisors LP (4)			3,857,526			8.10%
Daniel R. Tisch (5)			3,161,212			6.64%
Outerbridge Capital Management, LLC (6)			2,797,358			5.9%
Directors and Named Executive Officers (7)
Michael P. Huseby (8) (9)			581,376			*
Kanuj Malhotra (8) (9)			186,845			*
Barry Brover (8) (9)			183,795			*
Patrick Maloney (8) (9) (10)			157,765			*
David G. Golden			89,633			*
Thomas Donohue (8) (9)			85,043			*
Michael C. Miller (8) (9)			52,228			*
David A. Wilson (11)			36,053			*
John R. Ryan (11)			32,665			*
Daniel A. DeMatteo (11)			9,216			*
Jerry Sue Thornton (11)			9,216			*
Emily C. Chiu (12)			0			*
All directors and executive officers as a group (14 persons) (13)						3.12%

 

*	Less than 1%

(1)

Pursuant to SEC rules, shares of our Common Stock that an individual or group has a right to acquire within 60 days after July 29, 2019 pursuant to the vesting of restricted stock units are deemed to be beneficially owned by that individual or group and outstanding for the purpose of computing the percentage ownership of that individual or group, but are not deemed to be outstanding for computing the percentage ownership of any other person or group shown in the table. Footnote (9) sets forth the number of restricted stock units that are included as beneficially owned.

(2)	Based on the Schedule 13G/A filed on January 24, 2019 by BlackRock, Inc., BlackRock, Inc. has the sole power to vote 5,396,361 shares and sole power to direct the disposition of 5,514,533 shares. The address of such persons is listed as 55 East 52nd Street, New York, New York 10055.

(3)

Based on the Schedule 13D/A filed on May 17, 2019 by Mr. Riggio, Mr. Riggio’s holdings are comprised of (a) 2,399,781 shares held by Mr. Riggio, (b) 1,464,134 shares owned by LRBKS Holdings, Inc. (a Delaware corporation beneficially owned by Mr. Riggio and his wife), and (c) 1,557,270 shares owned by The Riggio Foundation, a charitable trust established by Mr. Riggio, with himself and his wife as trustees. The address of Mr. Riggio is in the care of Barnes & Noble, Inc., 122 Fifth Avenue, New York, New York 10011.

 

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(4)	Based on the Schedule 13G/A filed on February 8, 2019 by Dimensional Fund Advisors LP. The address of such persons is listed as Building One, 6300 Bee Cave Road, Austin, Texas 78746.

(5)

Based on the Schedule 13G/A filed on January 4, 2019 by Daniel R. Tisch, Daniel R. Tisch had sole voting power and sole investment power with respect to 3,161,212 shares of Common Stock of the Company, including 1,340,000 shares registered in the name of TowerView LLC, 460 Park Avenue, New York, New York 10022 and 1,170,000 shares registered in the name of DT Four Partners II, LLC, 655 Madison Avenue, 11th Floor, New York, New York 10065. TowerView LLC and DT Four Partners II, LLC are Delaware limited liability companies, the sole manager of which is Daniel R. Tisch.

(6)

Based on the Schedule 13G/A filed on July 26, 2019 by each of Outerbridge Capital Management, LLC, Outerbridge Master Fund LP, Outerbridge GP, LLC and Rory Wallace. These beneficial owners collectively share the power to vote or to direct the vote, and to dispose or to direct the disposition of, the shares. The address of Outerbridge Capital Management, LLC, Outerbridge GP, LLC and Rory Wallace is listed as 767 Third Avenue, 11th Floor, New York, New York 10017. The address of Outerbridge Master Fund LP, c/o Ogier Global (Cayman) Limited, is listed as 89 Nexus Way, Camana Bay, Grand Cayman KY1-9009, Cayman Islands.

(7)	The address of all of the officers and directors listed above are in the care of Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, New Jersey 07920.

(8)

Includes for each officer the following restricted stock units that will vest on or before September 27, 2019, but do not currently have voting rights: Mr. Huseby-51,281; Mr. Malhotra-26,923; Mr. Brover-23,077; Mr. Donohue-9,615; and Mr. Miller-19,231. Includes for each officer the following performance shares that have current voting rights, but are subject to a one-year holding period: Mr. Huseby-82,077; Mr. Malhotra-18,256; Mr. Brover-18,256; and Mr. Donohue-6,085. Does not include restricted stock units scheduled to vest after September 27, 2019.

(9)	Does not include the following performance share units which do not have current voting rights: Mr. Huseby-706,657; Mr. Malhotra-140,601; Mr. Brover-126,555; Mr. Donohue-79,365; and Mr. Miller-74,983.

(10)	Mr. Maloney’s shares beneficially owned is as of April 27, 2019, the effective date of Mr. Maloney’s resignation from the Company. Upon his resignation from the Company, 447,064 unvested restricted units, performance shares or performance units were forfeited.

(11)	Does not include 53,581 restricted stock units for which the director has elected to defer receipt and which do not have current voting rights.

(12)	Does not include 21,506 restricted stock units for which the director has elected to defer receipt and which do not have current voting rights.

(13)	Includes an aggregate of 21,506 shares of restricted stock held by a director; 439,411 restricted stock units that will vest on or before September 27, 2019 held by officers as a group; and 141,712 performance shares held by officers as a group.

 

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis summarizes the material elements of our compensation program for our named executive officers (“NEOs”). For Fiscal 2019, our NEOs were:

 

Named Executive Officer		Position
Michael P. Huseby		Chairman of the Board of Directors and Chief Executive Officer
Barry Brover (1)		Executive Vice President, Operations; Former Executive Vice President, Chief Financial Officer
Thomas Donohue (1)		Executive Vice President, Chief Financial Officer
Kanuj Malhotra		Executive Vice President, Corporate Development; President, Digital Student Solutions
Patrick Maloney (2)		Former Executive Vice President, Operations; President, Barnes & Noble College
Michael C. Miller		Executive Vice President, Corporate Strategy and General Counsel

 

(1)	Effective as of January 1, 2019.

(2)	Resigned effective as of April 27, 2019.

Executive Summary

Our executive compensation program is designed to align with our business strategy to attract, retain, and engage the talent we need to compete in our industry, and align management with stockholders’ interests. We believe our Compensation Committee has established a compensation program that reflects our businesses, compensation governance best practices and a “pay-for-performance” philosophy.

Compensation and Governance Highlights

What we do

 

Tie a majority of executive pay to performance-based cash and equity incentives

 

Align annual incentive payouts to clearly stated target performance levels

 

Vest equity awards over time to promote retention and require a one-year minimum vesting period for equity awards

 

Require one additional year of time-based vesting for performance shares earned following the achievement of performance measures

 

Accelerate equity only upon termination of employment following a change in control (double trigger)

 

Subject incentive compensation (including cash and equity) to a clawback policy

 

Require executive officers and directors to meet stock ownership targets and retention guidelines

 

Engage with stockholders regarding governance and/or executive compensation issues

 

Conduct an annual risk assessment of our executive compensation program

 

Conduct an annual say-on-pay vote

What we don’t do

 

Pay current dividends or dividend equivalents on unearned performance shares and unvested restricted stock units

 

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Permit option repricing without stockholder approval

 

Provide significant perquisites

 

Pay tax gross-ups to executives

 

Provide supplemental executive retirement benefits

 

Permit hedging or, without the approval of the Audit Committee, pledging by executive officers or directors

Executive Leadership Transition

On December 13, 2018, Mr. Patrick Maloney announced his plan to retire at the end of Fiscal Year 2019 and stepped down from the position of Executive Vice President, Operations of the Company, effective as of January 1, 2019.

On December 13, 2018, the Board appointed the Company’s Chief Financial Officer, Barry Brover, to the position of Executive Vice President, Operations of the Company, effective as of January 1, 2019. Also on December 13, 2018, the Board appointed the Company’s Senior Vice President, Treasurer and Investor Relations, Thomas Donohue, to the role of Executive Vice President, Chief Financial Officer of the Company, effective as of January 1, 2019.

Recent Actions Taken by Compensation Committee

The Compensation Committee continues to review and refine the Company’s executive compensation program to further align pay with Company performance and to ensure the integrity of the Company’s executive compensation program. The Compensation Committee considered the “say-on-pay” stockholder advisory vote held in September 2018 to be supportive of the Company’s pay practices. Approximately 97.3% of stockholder votes cast were in favor of the executive officer compensation as described in our 2018 proxy statement. Notwithstanding the stockholder support for the Company’s executive compensation practices in 2018, the Compensation Committee continued to respond to potential concerns of proxy advisory firms and certain questions raised by stockholders. A combination of management and directors engaged with stockholders holding more than 50% of the Company’s outstanding Common Stock and discussed, among other things, corporate governance and executive compensation.

 

Stockholders Were Concerned About		How We Addressed Their Concerns
No performance-based long-term vesting incentive awards		•  Grant a portion of long-term equity incentives in the form of time-based restricted stock units and performance shares units. •  FY 2020 are 50% RSUs / 50% PSUs for CEO and other NEOs. FY 2019 grants were 50% RSUs / 50% PSUs for CEO and 75% RSUs / 25% PSUs for other NEOs. •  FY 2020 grants have payout threshold of 85% of target.
No stock ownership guidelines for executive officers		•  Adopted stock ownership guidelines for executive officers (in addition to the existing guidelines for directors)
Clawback provisions only applied to equity awards		•  Adopted a compensation recoupment policy (“clawback policy”) that applies to all incentive compensation (cash and equity)
Discretionary bonus for Executive Chairman		•  Established performance-based annual incentive opportunity consistent with other executive officers
Discretionary bonuses for executive officers		•  No portion of the Annual Incentive Plan is discretionary

 

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Highlights of Fiscal 2019 Company Performance

The Company has faced transformational and challenging trends in the higher education market. Given this landscape, the following are Company financial and operational performance highlights for Fiscal 2019.

 

•

Consolidated sales of $2,034.6 million decreased 7.7%, compared to Fiscal 2018.

 

•

Consolidated GAAP net loss of $(24.4) million, compared to a net loss of $(252.6) million in Fiscal 2018. The Fiscal 2019 net loss includes a non-cash impairment loss of $(57.8) million and restructuring and other charges of $(7.2) million, compared to Fiscal 2018 net loss which included a non-cash impairment loss of $(313.1) million and restructuring and other charges of $(5.4) million.

 

•

Consolidated non-GAAP Adjusted EBITDA of $104.9 million, compared to $126.8 million in Fiscal 2018.

 

•

Consolidated non-GAAP Adjusted Earnings of $25.4 million, compared to $56.9 million in Fiscal 2018.

 

•

Made substantial investments in technology, content and human capital to facilitate continued transformation of all businesses to digital platforms and offerings.

 

•

Demonstrated ability to leverage expansive store footprint to drive subscriptions of bartleby®, the Company’s digital study offering, which gained more than 50,000 subscribers following its first major in-store sales push during Spring Rush.

 

•

Expanded catalogue of step-by-step textbook solutions available on bartleby to more than one million solutions. The Company continues to aggressively and strategically expand its catalogue.

 

•

In addition to growing the catalogue of step-by-step textbook solutions, enhanced bartleby offering by developing and implementing Q&A feature to better help students achieve success.

 

•

Demonstrated strong acceptance of BNC FirstDay™ inclusive access program, with revenue from BNC FirstDay increasing by 92% year over year.

 

•

Signed agreements with publishers including Oxford University Press, Wiley, Macmillan Learning, SAGE and Norton, to make the publishers’ digital content available through inclusive access programs offered on BNED campuses nationwide.

 

•

Ongoing integration of our Barnes & Noble College Booksellers, LLC (“BNC”) and MBS Textbook Exchange, LLC (“MBS”) operations, including a unified and expanded sales team to help drive new business growth with a dynamic, new go-to-market strategy.

 

•

Strengthened the value of BNED’s campus retail footprint with pilot testing of highly relevant and curated concept shops that drove improvements in sales trends and higher levels of customer engagement.

Pay and Performance Alignment in Fiscal 2019

Annual incentives for Fiscal 2019 were awarded based on Company EBITDA (earnings before interest, taxes, depreciation and amortization adjusted for certain items) performance relative to a pre-defined target level. As described below in more detail, our Fiscal 2019 Company EBITDA performance was 89.7% of target, which yielded a payout factor of 82% of the target award allocated to the Company goal. In determining individual NEO awards, the Compensation Committee also considered individual performance against individual performance goals.

Fiscal 2019 equity grants for the executive officers were delivered in a combination of performance shares, which accounted for 50% of the target award amount for Mr. Huseby and 25% of the target award amount for the other NEOs, and restricted stock units, which accounted for 50% of the target award for Mr. Huseby and

 

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75% of the target award amount for the other NEOs. The Compensation Committee believes the mix of awards provides a strong link between the Company’s financial performance and executive compensation, aligns executives with the Company’s stockholders and provides an important retention tool. The performance shares will vest if and only to the extent pre-established performance goals for the two-year period covering Fiscal years 2019 and 2020 are achieved and an additional one year of time-based vesting is met. The restricted stock units vest in equal one-third increments on the first, second and third anniversary of the grant date.

Compensation Decisions for Fiscal 2020

The Compensation Committee continues to believe it is in the Company’s best interest to manage the run-rate of equity awards granted in Fiscal 2020. Pursuant to Mr. Huseby’s employment agreement, Mr. Huseby’s annual equity award value is set at three times his salary. In order to align his equity award with the objective of managing the run-rate of equity awards, without inequitably reducing, or eliminating entirely, other management and employee awards, Mr. Huseby agreed to an award for Fiscal 2020 with a lower grant date value than that required by his employment agreement. In addition, the other NEOs also received Fiscal 2020 awards with lower grant date values than would have been awarded had the actual stock price on the day of grant been used in calculating such awards versus the higher twelve month trailing average stock price employed by the Compensation Committee. Calculating the number of shares to be awarded using the twelve month trailing average stock price rather than the grant date stock price resulted in approximately 1.2 million fewer shares being granted in the Fiscal 2020 award cycle. In keeping with a “pay-for-performance” philosophy, both the Compensation Committee and senior management believe that it is appropriate for the Board, management, and stockholders to be aligned and that given the transformational and challenging trends facing the Company and the higher education market, that management bear the negative impact of the volatile and lower stock price while continuing to maintain a significant portion of target compensation being delivered in the form of performance-based equity compensation, reflective of the opportunities that lie ahead for the Company. In addition, the Compensation Committee raised the threshold payout for annual incentive awards and long-term incentive awards from 75% to 85% and increased the performance-based portion of the long-term incentive awards from 25% to 50% of the aggregate awards.

Compensation Philosophy and Objectives

We are engaged in a very competitive and rapidly changing industry, and our success depends on our ability to attract, motivate and retain qualified executives. Accordingly, the Compensation Committee aims to create total compensation packages that are competitive with programs offered by other companies with which we compete for talent. At the same time, our Compensation Committee believes that a significant portion of the compensation paid to our executive officers should be tied to our performance, execution of our strategic plan and the value we create for stockholders.

The Compensation Committee’s objectives are to:

 

•

attract, retain, and motivate talented executives responsible for the success of our organization;

 

•

provide compensation to executives that is externally competitive, internally equitable, performance-based, and aligned with stockholder interests; and

 

•

ensure that total compensation levels are reflective of company and individual performance and provide executives with the opportunity to receive above-market total compensation for exceptional business performance.

Compensation Market References

In establishing compensation for Fiscal 2019, the Compensation Committee worked with Mercer, its compensation consultant, to develop a peer group for the Company and review executive compensation against

 

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that peer group. In support of its compensation philosophy, the Compensation Committee reviews the following: a) base salary; b) target short-term incentive; c) target total cash compensation; d) actual total cash compensation; e) long-term incentive; and f) target total direct compensation. Executives are matched to market positions based on titles, responsibilities and contributions to the Company. The Compensation Committee reviewed compensation among the peer group companies to determine the competitiveness of pay levels and pay mix for executives.

Although no other public companies are directly comparable to the Company and its businesses, the Compensation Committee considers the Company’s competitors for executive talent to be companies engaged in retail and education services. Our peer group, which is reviewed annually, includes companies that are similar in size to the Company based on revenues and market capitalization and also companies with overlapping business model characteristics (e.g., education / technology focus, combination of products and services, strong relationships with business partners, go-to-market strategy, and geographic footprint) as follows:

 

Adtalem Global Education Inc.		Houghton Mifflin Harcourt Company
American Eagle Outfitters, Inc.		John Wiley & Sons, Inc.
Barnes & Noble, Inc.		K12 Inc.
Bright Horizons Family Solutions Inc.		Lands’ End, Inc.
Chegg, Inc.		Meredith Corporation
GNC Holdings, Inc.		Scholastic Corporation
Graham Holdings Company		Urban Outfitters, Inc.
Grand Canyon Education, Inc.		Vitamin Shoppe, Inc.

The Committee reviews the peer group annually and will continue to consider the Company’s current size and strategic direction in its review.

 

		Total Revenue (Most Recent FY, $M)		Market Cap (as of 6/30/2019, $M)
Peer Group Median		$1,714		$2,372
BNED		$2,035		$160

However, peer group compensation is just one factor that is considered in determining compensation levels for our executive officers. We also consider: (a) the Company’s business performance; (b) each executive officer’s job responsibilities, experience and prior performance; (c) relative compensation among our executive officers; (d) industry-wide business conditions; and (e) the recommendations of our Chairman of the Board and Chief Executive Officer (in the case of Messrs. Brover, Donohue, Malhotra, Maloney, and Miller.)

 

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Overview of Compensation Program Design

Elements of Pay

Our compensation structure is primarily composed of base salary, performance-based annual incentive compensation and performance-based and time-vested long-term equity incentives. The mix of Fiscal 2019 target total direct compensation was as follows:

 

 

Note that Target Annual Incentive reflects Fiscal 2019 target opportunity and restricted stock units (“RSUs”) and performance shares (“PS”) reflect Fiscal 2019 target value on the respective grant date.

Base Salary

We pay our NEOs a base salary to provide them with a guaranteed minimum compensation level for their services. An NEO’s base salary is determined by evaluating the external competitive marketplace, internal equity and individual contributions. For Fiscal 2019, the Compensation Committee only increased the base salaries for Messrs. Brover, Donohue, and Miller upon their appointments as Executive Vice President, Operations of the Company, Executive Vice President, Chief Financial Officer of the Company, and Executive Vice President, Corporate Strategy of the Company, respectively.

 

Named Executive Officer		Base Salary in         Fiscal 2018					Base Salary in Fiscal 2019					Percentage Change
Michael P. Huseby			$	1,100,000				$	1,100,000					0	%
Barry Brover			$	535,000				$	610,000					14	%
Thomas Donohue			$	445,000				$	500,000					12.4	%
Kanuj Malhotra			$	523,400				$	523,400					0	%
Patrick Maloney			$	767,000				$	767,000					0	%
Michael C. Miller			$	475,000				$	500,000					5.3	%

 

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Performance-Based Annual Incentive Compensation

In Fiscal 2019, the Company structured the Annual Incentive Plan by first establishing a funding amount for the Annual Incentive Plan equal to 15% of Company EBITDA. Each of Messrs. Huseby, Brover, Donohue, Malhotra, Maloney and Miller were granted performance-based annual incentive compensation opportunities. The target award under the Annual Incentive Plan is expressed as a percentage of base salary as set forth in the table below. For Messrs. Huseby, Brover, Donohue, Maloney and Miller, the individual Annual Incentive Plan payouts were based 50% on Company performance as measured by Company EBITDA and 50% on individual performance goals. For Mr. Malhotra, the individual Annual Incentive Plan payout was based 40% on digital education EBITDA, 10% on Company EBITDA and 50% on individual performance goals. Individual performance goals are closely linked to the Company’s business and strategic objectives and reflect the executive’s scope of responsibility, as noted below. Participants had the opportunity to earn up to 150% of the Company EBITDA component and between 50% and 150% of the individual performance goal components established for each of them.

 

Named Executive Officer		Target as Percentage of Salary
Michael P. Huseby		150%
Barry Brover		75%/100% (1)
Thomas Donohue		40%/60% (1)
Kanuj Malhotra		100%
Patrick Maloney		125%
Michael C. Miller		60%

 

(1)	In connection with Mr. Brover’s and Mr. Donohue’s election to new positions, their respective targets were adjusted effective January 1, 2019, and payouts were made pro rata based on months served in each position.

Fiscal 2019 Performance Targets and Actual Results. The chart below shows the payout scale on which the Company EBITDA portion of the individual annual incentive target compensation was based.

 

Company EBITDA Performance Relative to Target		Payout Percentage (% of Target Payout)
Less than 75% of Target		0%
75% to less than 98%		50-100%*
98% to less than 102%		100%
102% to less than 115%		100-150%*
115% or more		150%

 

*	Payout percentage is interpolated for results within range.

The chart below shows the target and actual Company EBITDA results for Fiscal 2019 and actual results as a percentage of target results and target pay. Based on actual Company EBITDA, the NEOs earned a payout of 82% of the Company EBITDA component.

 

		Target ($) (in millions)		Actual ($) (in millions)		% Target Achieved		% Target Payout
Company EBITDA *		$118.1		$105.9		89.7%		82%

 

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*

Company EBITDA is used in our compensation programs and is presented in order to show the correlation between these financial measures and compensation to our NEOs. Both target Company EBITDA and actual Company EBITDA were determined by using Adjusted EBITDA, as calculated and reported in the Company’s SEC filings and disclosure and further adjusted to exclude certain adjustments related to the Digital Student Solutions (“DSS”) segment related to technology development costs and store incentives which were not originally in the budget. The Compensation Committee chose Company EBITDA as a performance measure because it is the measure management reviews internally to evaluate the Company’s performance and manage its operations. For a reconciliation of Adjusted EBITDA to net income and discussion of the Company’s use of Adjusted EBITDA, please refer to page 45 of the Company’s Annual Report on Form 10-K for the fiscal year ended April 27, 2019.

Fiscal 2019 Individual Performance Results and Incentive Payouts. Our Compensation Committee determined that our NEOs had achieved the individual performance goals discussed below. Individual performance goal components accounted for 50% of the aggregate target amount, and a payout between 96% and 100% was established for each individual performance component.

Mr. Huseby. Mr. Huseby’s individual performance goals were established to reflect his role as Chairman of the Board and Chief Executive Officer and included the execution of various operational priorities, strategic transactions, and stockholder outreach and the achievements of the management team. The Committee approved an individual payout of 100% of target.

Mr. Brover. The Compensation Committee established individual performance goals for Mr. Brover focused on identifying synergies and expense opportunities within BNC/MBS, raising additional capital/debt, enhancing monthly management reporting and financials for new segments, and supporting product development. The Committee approved an individual payout of 100% of target.

Mr. Donohue. Mr. Donohue’s individual performance goals were established based on achieving financing support, mergers and acquisitions support, investor outreach, and proxy outreach. The Committee approved an individual payout of 100% of target.

Mr. Maloney. Because of his retirement, Mr. Maloney was not paid under the Annual Incentive Plan. For information regarding payments made to Mr. Maloney in connection with his retirement see “Severance Arrangement for Mr. Maloney” on page 39.

Mr. Malhotra. Mr. Malhotra’s individual performance goals were established based on achieving a Company EBITDA target of $118.1 million, successfully launching the bartleby product to marketplace, and contributing to the Company’s acquisition strategy. The Committee approved an individual payout of 96% of target.

Mr. Miller. The Compensation Committee established individual performance goals for Mr. Miller focused on consolidating and reviewing strategic priorities, assisting with strategic initiatives, including transactions, and increasing operational efficiencies. The Committee approved an individual payout of 100% of target.

 

27

Fiscal 2019 Performance-Based Annual Incentive Compensation Payment Amounts. Set forth below is a table showing target, maximum and actual Fiscal 2019 performance-based annual incentive compensation for our NEOs.

 

Named Executive Officer		Company EBITDA/ Individual  Weighting		Target Annual   Incentive ($)				Maximum Annual Incentive ($)				Actual       Company       EBITDA Payout				Actual Individual  Performance Payout				Actual Total Payout				Total Payout as a % of Target
Michael P. Huseby		50% / 50%		$	1,650,000			$	2,475,000			$	676,500			$	825,000			$	1,501,500				91%
Barry Brover		50% / 50%		$	508,333	(2)		$	762,500			$	208,417			$	254,167			$	462,583				91%
Thomas Donohue		50% / 50%		$	233,333	(3)		$	350,000			$	95,667			$	116,667			$	212,333				91%
Kanuj Malhotra		50% / 50%		$	523,400			$	785,100			$	110,437			$	252,279			$	362,716				69(1)
Michael C. Miller		50% / 50%		$	300,000			$	450,000			$	123,000			$	150,000			$	273,000				91%

 

(1)	20% of Mr. Malhotra’s individual performance award was based on the DSS segment EBITDA, which was achieved at 68%; 15% of his award was based on DSS Revenue, which was achieved at 50%; and 15% of his award was based on LoudCloud/Courseware Revenue, which was achieved at 0%.

(2)	Target bonus reflects 8 months at 75% of base salary and 4 months at 100% of new salary.

(3)	Target bonus reflects 8 months at 40% of base salary and 4 months at 60% of new salary.

The performance-based annual incentive awards earned by our NEOs under the annual incentive plan for Fiscal 2019 are set forth in the “Summary Compensation Table” on page 34. The threshold, target and maximum incentive award opportunities for each of our NEOs for Fiscal 2019 are set forth in the “2019 Grants of Plan-Based Awards Table” on page 36.

Long-Term Equity Incentives

Long-term equity incentives are a critical component of the Company’s compensation program. They are designed to promote the Company’s long-term financial interests and growth, to attract, motivate, and retain key employees, and to align the interests of management with those of the Company’s stockholders. The Company grants long-term equity incentive awards under the Company’s Equity Incentive Plan (the “Equity Incentive Plan”), which is administered by the Compensation Committee. The Compensation Committee reviews, discusses and approves the types and number of awards made to senior management, including the NEOs, and approves the terms, conditions and limitations applicable to each award. The Committee delegates authority to the CEO, within pre-established limitations, to make awards to newly-hired employees or current employees who are not executive officers. Equity awards are generally granted in connection with the June Compensation Committee meeting.

In Fiscal 2019, the Compensation Committee established a target long-term incentive amount for each of the NEOs denominated in dollars. The Compensation Committee determined to make awards with a mix of performance shares, which accounted for 25% of the target award amount, and restricted stock units, which accounted for 75% of the target award amount, except that Mr. Huseby’s award was split equally between performance and restricted shares. For fiscal 2020, the mix of performance shares and restricted stock units is 50%/50% for all executive officers. The Compensation Committee believes that granting a portion of the award in the form of restricted stock units is desirable because such grants immediately align the interests of our executives with those of stockholders and provide a retention incentive. In order to manage the run-rate of equity awards, for both the fiscal 2019 and 2020, long-term incentive awards, the NEOs and other senior members of management agreed to accept fewer shares than otherwise would have been granted had the dollar value of the award divided by the market value of the shares of Common Stock on the respective grant date been used.

 

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Performance Shares. Performance share units are generally granted annually to each of the NEOs. Performance share units are earned and settled for shares of common stock if and only to the extent that certain pre-established performance goals are met for a two-year performance period. For the performance share units granted in Fiscal 2019, the metrics included Adjusted EBITDA and New Business. Actual results for the two-year period beginning on the first day of the fiscal year period and ending on the last day of the second fiscal year will be compared to the targeted goals to determine the number of performance share units that will be earned. The NEOs can earn up to 150% of the number of performance share units at target for performance that exceeds 115% of target. If a threshold level of performance, 75% of target (85% for Fiscal 2020 grants), is not met, all of the performance share units will be forfeited. Once performance share units are earned and held for an additional one year period, the units will be settled for shares of common stock.

Restricted Stock Units. Restricted stock units are Common Stock equivalents that are granted to a recipient and vest after a period of time has elapsed. The restricted share units granted to the NEOs vest in one third annual increments over the three years from the date of grant. These share units vest only if the executive is employed by the Company at the end of the vesting period or if his or her employment was terminated due to death, disability or a change in control during that period. The Compensation Committee believes the use of restricted stock units strengthens the retention aspects of the Company’s pay program, consistent with one of its key principles. The following grants were made for Fiscal 2019.

 

Named Executive Officer		Performance Shares at Target				Performance Shares at Maximum				Restricted Stock Units				Aggregate Award Target ($)
Michael P. Huseby			180,834				271,251				153,845			$	1,858,467
Barry Brover			27,124				40,686				69,232			$	536,310
Thomas Donohue			11,302				16,953				28,847				223,466
Kanuj Malhotra			31,646				47,469				80,769			$	625,693
Patrick Maloney			47,243				70,865				120,577			$	934,073
Michael C. Miller			22,603				33,905				57,694			$	446,927

In Fiscal 2019, the number of performance share units and restricted stock units granted were determined based on the award dollar value target divided by the stock price on the date of grant. Performance share units were awarded at the target level.

In June 2017, performance shares were granted for the two-year period covering Fiscal 2018 and Fiscal 2019. The chart below sets forth the performance targets and actual results for Fiscal 2018 and Fiscal 2019, in thousands, which resulted in 38.8% of the performance share target award being earned. These earned shares are subject to an additional one year vesting period.

(in thousands)

 

		Weighting				Threshold				Target				Max				Fiscal 2018 Actual				Fiscal 2019 Actual				Cumulative Results				Weighted Payout
Adjusted EBITDA (1)			75	%		$	212,000			$	248,000-$258,000			$	291,000			$	114,900			$	98,800			$	213,700				51.8	%
New Business (2)			25	%		$	151,000			$	17,0006-$184,000			$	207,000			$	66,100			$	53,300			$	119,400				0	%
TOTAL																															38.8	%

 

(1)	Adjusted EBITDA excludes Student Brands, MBS inventory adjustment.

(2)	New Business means the annual sales (based upon the first full fiscal year budget) associated with new stores opened during the fiscal year consistent with what is reported in the Company’s annual report.

 

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Non-Plan Bonuses

Mr. Miller was awarded a retention bonus in the amount of $200,000 in Fiscal 2019. If Mr. Miller is terminated by the Company for “cause” or by Mr. Miller other than for “good reason” (as such terms are defined in the letter agreement between the Company and Mr. Miller dated April 12, 2017), in either case prior to March 1, 2020, Mr. Miller will be required to repay an amount equal to the retention bonus less any amounts withheld by the Company for income and employment taxes.

Other Components of Compensation

401(k) Plan. Each of our NEOs is entitled to participate in our tax-qualified defined contribution 401(k) plan on the same basis as all other eligible employees. The 401(k) plan provides our employees, including our NEOs, with a way to accumulate tax-deferred savings for retirement. The Company matches the contributions of participants, subject to certain criteria. Under the terms of the 401(k) plan, as prescribed by the Code, the contribution of any participating employee is limited to the lesser of 75% of annual salary before taxes or a maximum dollar amount ($19,000 for 2019), subject to a $6,000 increase for participants who are age 50 or older. The amount of the Company’s matching contributions for each of our NEOs is set forth in footnotes to the “Summary Compensation Table” on page 34. We do not provide supplemental executive retirement benefits.

Limited Perquisites and Other Compensation. The Company’s NEOs are entitled to only the limited perquisites set forth in their employment agreements or letters and disclosed in the footnotes to the “Summary Compensation Table” on page 34.

Severance and Change of Control Payments and Benefits. The Company has an employment agreement with Mr. Huseby and each of Messrs. Brover, Donohue, Malhotra and Miller have employment letter agreements that contain severance and change in control benefits. The agreements provide for certain severance payments and benefits upon termination of employment by the Company without cause or by the NEO for good reason (including upon termination within two years following a change of control). The triggering events that would result in the severance payments and benefits and the amount of those payments and benefits are intended to provide our NEOs with financial protection upon loss of employment and to support our executive retention goals and enable our NEOs to focus on the interests of the Company in the event of a potential change of control. Equity awards are subject to a “double-trigger” and vesting will only be accelerated if there is a termination of employment without” cause” or for “good reason” following a change of control. The Company does not pay any tax gross-ups in connection with the severance payments. The Compensation Committee believes that the terms of the employment agreements, including triggering events and amounts payable, are competitive with severance protection being offered by other companies with whom we compete for highly qualified executives. The compensation that could be received by each of our NEOs upon termination or change of control is set forth in the “Potential Payments Upon Termination or Change of Control Table” on page 42. The material terms of these agreements are described in the “Narrative to the Summary Compensation Table” and the “Grants of Plan-Based Awards Table-Employment Arrangements with the Named Executive Officers.”

Governance Policies

Executive Incentive Compensation Clawback Policy

The Board of Directors has adopted the Executive Incentive Compensation Clawback Policy (the “Clawback Policy”). The Clawback Policy allows the Compensation Committee to take action to recover incentive compensation from certain key employees, including executive officers, in the event that the Company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements. The Clawback Policy only applies to incentive-based compensation paid in excess of what would have been paid or granted under the circumstances reflected by such restatement, and applies irrespective of the responsibility of the key employee for the accounting restatement. The Clawback Policy applies to all Section 16 officers and covers all incentive-based compensation (including cash and equity) paid or granted after adoption of the policy.

 

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Prohibition on Hedging and Pledging Transactions

The Company’s Insider Trading Policy prohibits directors and executive officers from hedging their ownership of Company stock, including selling Company stock short, buying or selling puts or calls or other derivative instruments related to Company stock. Directors and executive officers are also prohibited from pledging Company stock, purchasing Company stock on margin or incurring any indebtedness secured by a margin or similar account in which Company stock is held, without prior approval of the Audit Committee.

Executive Stock Ownership and Retention Guidelines

The Compensation Committee has adopted executive stock ownership targets (“Stock Ownership Targets”) based on a multiple of annual salary as follows: Chief Executive Officer-five times; all other NEOs-two times; and all other Section 16 officers-one time. Officers are required to retain 50% of net after-tax shares earned from equity grants until the Stock Ownership Target is met (“Retention Guidelines”). Only vested and fully-owned shares owned by an officer directly or indirectly through the 401(k) plan, immediate family members or trusts or similar arrangements count toward the Stock Ownership Targets. The Compensation Committee reviews progress toward the Stock Ownership Targets and compliance with the Retention Guidelines annually.

 

Named Executive Officer		Stock Ownership Targets as a Multiple of Salary					In Compliance with Retention Guidelines Yes/No
Michael P. Huseby		5 x					Yes
Barry Brover		2 x					Yes
Thomas Donohue		2 x					Yes
Kanuj Malhotra		2 x					Yes
Michael C. Miller		2 x					Yes

Compensation Policies and Practices as Related to Risk Management

With the assistance of its compensation consultant, the Compensation Committee conducted its risk assessment of the Company’s incentive compensation plans covering employees. The Compensation Committee evaluated the levels of risk-taking to determine whether they are appropriate in the context of the Company’s strategic objectives, the overall compensation arrangements, and the Company’s overall risk profile. The Compensation Committee concluded the Company has a balanced pay-for-performance executive compensation program that does not encourage excessive risk-taking and the Company does not maintain compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

Tax and Accounting Considerations

Section 162(m) of the Internal Revenue Code, as in effect prior to the adoption in December 2017 of The Tax Cuts and Jobs Act (the “TCJA”), includes a performance-based compensation exception to its limits on the deductibility of compensation in excess of $1 million earned by specified executive officers of publicly held companies. The TCJA eliminated the performance-based compensation exception, so that for Fiscal 2019 all compensation paid to specified executive officers in excess of $1 million will be nondeductible (except for any amounts that qualify as performance-based that have been grandfathered pursuant to the written binding contract transition rule under the TCJA).

 

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Roles of the Compensation Committee, Management, and our Compensation Consultant in Determining the Compensation of our Named Executive Officers

Roles of the Compensation Committee and Management

The Compensation Committee is responsible for establishing, implementing and overseeing our compensation program, and reviews and approves our compensation philosophy and objectives. The Compensation Committee also annually reviews and approves annual base salary levels, annual incentive opportunity levels, long-term incentive opportunity levels, employment and severance agreements and any special or supplemental benefits for each of the NEOs and any other executive officers, Section 16 officers and employees of the Company earning a base salary of $400,000 or more.

The compensation of our Chairman and Chief Executive Officer is determined by the Compensation Committee in executive session. The Chairman and Chief Executive Officer reviews the performance of each of our other executive officers and makes compensation recommendations to the Compensation Committee. The Compensation Committee considers all key elements of compensation separately and also reviews the full compensation package of each executive officer.

Role of the Compensation Consultant

The Compensation Committee has retained Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc., to assist with the committee’s responsibilities related to the Company’s executive compensation program and the director compensation program. Mercer’s engagement by the Compensation Committee includes reviewing and recommending the structure of our compensation program and advising on all significant aspects of executive compensation, including base salaries, annual incentives and long-term equity incentives for executives. At the request of the Compensation Committee, Mercer collects relevant market data to allow the Compensation Committee to compare components of our compensation program to those of our peers, provides information on executive compensation trends and implications and makes other recommendations to the Committee regarding our executive compensation program. Our management, Chief Executive Officer (on certain occasions), Senior Vice President, Human Resources, General Counsel and the chair of the Compensation Committee, meet with representatives of Mercer before Compensation Committee meetings.

In making its final decisions regarding the form and amount of compensation to be paid to the executives, the Compensation Committee considers the information gathered by and recommendations of Mercer. Mercer’s fees for executive and director compensation consulting to the Compensation Committee in Fiscal 2019 were approximately $365,641. MMC Securities LLC, a subsidiary of Marsh & McLennan Companies, Inc., provides advisory services to the Company’s Benefits Committee, which administers the Company’s 401(k) plan, and other human resource services for which the Company paid approximately $28,432. The Company also paid Marsh & McLennan Companies, Inc., the parent company of Mercer, for insurance brokerage services totaling approximately $600,913. The Compensation Committee has assessed the independence of Mercer taking into account the following factors identified by the SEC and NYSE as bearing upon independence: (i) Mercer’s provision of other services to the Company; (ii) the fees Mercer received for such services as a percentage of the revenues of Marsh & McLennan, Mercer’s parent; (iii) the policies and procedures of Mercer that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the Mercer consultants with a member of the Compensation Committee; (v) any of our stock owned by the Mercer consultants; and (vi) any business or personal relationship of the Mercer consultants or Mercer with any of our executive officers. The Compensation Committee concluded that no conflict of interest exists with respect to its engagement of Mercer.

 

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Compensation Committee Report

The Compensation Committee reviewed and discussed the foregoing Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee as of that date recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

 

Pay Ratio

The Company is required to provide the ratio of the annual total compensation of the Company’s CEO to the median annual total compensation of all employees under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The pay ratio information provided below is a reasonable estimate calculated in a manner consistent with Item 402(u) of SEC Regulation S-K.

For Fiscal 2019, the median annual total compensation of our employees, excluding our CEO, was $3,728 and the annual total compensation of our CEO was $4,496,072. Accordingly, the ratio of the CEO’s annual total compensation to the median annual compensation of all employees was 1,206:1.

The Company used the employee population of 10,422 on the final day of the payroll year, April 30, 2019. Temporary, seasonal, and part time employees make up 66% of the Company’s total population and on average work less than 15 hours per week. As permitted under SEC rules, we excluded employees in India as de minimis. We used cash compensation (base salary, overtime and cash bonuses paid during Fiscal 2019) to determine the median employee in our population.

When we include only our full time “permanent” staff as of April 30, 2019, our median employee’s annualized total compensation was $39,208 for Fiscal 2019. Under this calculation, the CEO pay ratio is 115:1. We believe this is a more representative indication of how our CEO pay compares to that of our workforce. (Note this population totals 3,577).

The SEC rules do not specify a single methodology for identifying the median employee or calculating the CEO pay ratio. Since other companies use different assumptions, adjustments, or estimates in their own calculation, disclosure and methodology is inconsistent across companies. Therefore, our CEO pay ratio is not comparable to another company’s CEO pay ratio. Our information and pay ratio calculation is a reasonable good faith estimate, based on our methodology and SEC rules as required for disclosure.

 

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EXECUTIVE COMPENSATION

Unless otherwise stated, the compensation tables included in this section reflect amounts paid or payable or awards granted to our NEOs by the Company under the Company’s compensation plans and programs during Fiscal 2017, Fiscal 2018 and Fiscal 2019.

Summary Compensation Table

 

Name and Principal Position		Fiscal   Year				Salary (1)				Bonus (2)				Stock Awards (3)				Non-Equity Incentive Plan Compensation (4)				All Other   Compensation             (5)				Total
Michael P. Huseby			2019			$	1,100,000			$	—			$	1,858,467			$	1,501,500			$	36,105			$	4,496,072
Chairman and Chief Executive Officer			2018			$	866,923			$	250,000			$	3,299,995			$	1,320,000			$	38,425			$	5,775,343
			2017			$	500,000			$	—			$	1,687,495			$	852,000			$	35,194			$	3,074,689
Barry Brover			2019			$	560,962			$	—			$	536,310			$	462,583			$	37,268			$	1,597,123
Executive Vice President, Operations; Former Chief Financial Officer			2018			$	535,000			$	—			$	749,996			$	314,982			$	38,370			$	1,638,348
			2017			$	530,385			$	439,998			$	562,498			$	289,903			$	41,752			$	1,864,536
Thomas Donohue			2019			$	462,462			$	—			$	223,466			$	212,333			$	13,050			$	911,311
Executive Vice President, Chief Financial Officer			2018			$	435,000			$	50,000			$	249,995			$	143,550			$	6,416			$	884,961
			2017			$	433,462			$	132,222			$	393,754			$	141,810			$	10,913			$	1,112,161
Kanuj Malhotra			2019			$	523,400			$	—			$	625,693			$	362,716			$	12,750			$	1,524,559
Executive Vice President, Corporate Development			2018			$	523,400			$	—			$	749,996			$	591,442			$	7,640			$	1,872,478
			2017			$	523,400			$	527,785			$	478,117			$	298,600			$	11,193			$	1,839,095
Patrick Maloney (6)			2019			$	767,000			$	657,448			$	934,073			$	—			$	1,876,765			$	4,235,286
Former Executive Vice President, Operations			2018			$	767,000			$	—			$	1,499,997			$	743,032			$	39,333			$	3,049,362
			2017			$	767,000			$	377,775			$	1,725,744			$	620,791			$	37,048			$	3,528,358
Michael C. Miller			2019			$	496,154			$	200,000			$	446,927			$	273,000			$	16,481			$	1,432,562
Executive Vice President, Corporate Strategy and General Counsel			2018			$	475,000			$	—			$	349,999			$	285,000			$	6,904			$	1,116,903
			2017			$	9,135			$	50,000			$	—			$	—			$	—			$	59,135

(1)	This column represents base salary earned during fiscal year 2019.

(2)

This column represents a retention bonus paid in Fiscal 2019 of $200,000 to Mr. Miller; management transition bonuses earned in Fiscal 2019 of $657,448 paid to Mr. Maloney and in Fiscal 2018 of $250,000 and $50,000 paid to Messrs. Huseby and Donohue, respectively; a signing bonus earned in Fiscal 2017 of $50,000 to Mr. Miller; discretionary bonuses earned in Fiscal 2017 of $100,000, $132,222 and $150,000, paid to Messrs. Brover, Donohue and Malhotra, respectively; and retention payments earned in Fiscal 2017 of $339,998, $377,785, and $377,775 paid to Messrs. Brover, Malhotra, and Maloney, respectively.

(3)

This column represents the aggregate grant date fair value of stock awards granted computed in accordance with Financial Accounting Standards Board of Directors (“FASB”) Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation (“ASC 718”). The stock awards value is determined to be the fair market value of the underlying Company shares on the grant date, which is determined based on the closing price of the Company’s Common Stock on the grant date. These amounts reflect an estimate of the

 

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grant date fair value and may not be equivalent to the actual value recognized by the NEO. The amounts reported in the Summary Compensation Table for the performance-based awards assume a future payout at the target level and may not represent the amounts that the NEOs will actually realize from the awards. Whether and to what extent an NEO realizes value with respect to these performance-based awards will depend on our actual performance and the NEO’s continued employment. If our performance results in a future payout at the maximum level (150% of target), the aggregate grant date fair value of the performance-based stock awards granted in 2019 would be as follows: Mr. Huseby-$1,500,018; Mr. Brover-$224,994; Mr. Donohue-$93,750; Mr. Malhotra-$262,504; Mr. Maloney-$391,881; and Mr. Miller-$187,492.

(4)	This column represents the dollar value of performance-based annual incentive compensation earned for fiscal year.

(5)	This column represents the value of all other compensation, as detailed in the table below.

(6)	Mr. Maloney resigned from his position of Executive Vice President, Operations of the Company, effective as of April 27, 2019.

All Other Compensation Table

 

Name		Fiscal Year				Long-Term Disability  Insurance(1)				Life and AD&D  Insurance(2)				Car  Allowance				401(k)  Company  Match				Cell Phone				Total Other  Income
Michael P. Huseby			2019			$	13,086			$	12,065			$	—			$	10,154			$	800			$	36,105
			2018			$	13,086			$	12,108			$	—			$	13,231			$	—			$	38,425
			2017			$	13,086			$	12,108			$	—			$	10,000			$	—			$	35,194
Barry Brover			2019			$	9,461			$	2,969			$	12,000			$	12,038			$	800			$	37,268
			2018			$	9,950			$	3,012			$	18,000			$	7,408			$	—			$	38,370
			2017			$	9,940			$	3,012			$	18,000			$	10,800			$	—			$	41,752
Thomas Donohue			2019			$	—			$	350			$	—			$	11,900			$	800			$	13,050
			2018			$	—			$	393			$	—			$	6,023			$	—			$	6,416
			2017			$	—			$	393			$	—			$	10,520			$	—			$	10,913
Kanuj Malhotra			2019			$	—			$	350			$	—			$	11,000			$	1,400			$	12,750
			2018			$	—			$	393			$	—			$	7,247			$	—			$	7,640
			2017			$	—			$	393			$	—			$	10,800			$	—			$	11,193
Patrick Maloney			2019			$	3,462			$	350			$	18,000			$	11,000			$	1,400			$	34,213	(3)
			2018			$	10,320			$	393			$	18,000			$	10,620			$	—			$	39,333
			2017			$	7,855			$	393			$	18,000			$	10,800			$	—			$	37,048
Michael C. Miller			2019			$	—			$	350			$	—			$	14,731			$	1,400			$	16,481
			2018			$	—			$	328			$	—			$	6,577			$	—			$	6,905
			2017			$	—			$	—			$	—			$	—			$	—			$	—

 

(1)	This represents the premiums paid by the Company for the long-term disability insurance.

(2)	This represents the premiums paid by the Company for life and accidental death and dismemberment insurance.

(3)

This total does not include severance payments made to Mr. Maloney, which totaled $1,842,552, and which is included in the “All Other Compensation” column of the Summary Compensation Table on page 34. For information regarding payments made to Mr. Maloney in connection with his retirement see “Severance Arrangement for Mr. Maloney” on page 39.

 

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