Business Context and Reporting Period
This Form 8-K is a current report filed by Brown Shoe Company, Inc. (d/b/a Caleres Inc.) on May 29, 2012. The filing primarily addresses the departure of the Chief Financial Officer, the appointment of a successor, and the results of the Annual Meeting of Shareholders held on May 22, 2012.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation arrangements and shareholder voting results.
Material Changes and Executive Compensation
Departure of Principal Officer
- Mark E. Hood, Senior Vice President and Chief Financial Officer, will step down on June 8, 2012, and terminate employment on June 30, 2012.
Appointment of Principal Officer
- Russell C. Hammer was appointed Senior Vice President and Chief Financial Officer, effective June 11, 2012.
- Base Salary: $475,000 annually.
- Annual Cash Incentive: Target of 70% of base salary ($332,500 guaranteed for fiscal 2012); range from 50% to 200% of target based on performance.
- Sign-on Bonus: $500,000, subject to clawback provisions if employment ends within two years.
- Equity Awards:
- 33,350 shares of restricted stock vesting after four years.
- 67,350 shares of restricted stock vesting over four years (16,837 shares annually for three years, remainder in year four).
- Target of 8,350 performance shares and $225,000 cash opportunity for the 2012-2014 long-term incentive plan.
- Severance:
- Without Cause (Pre-Change in Control): 200% of base salary plus prorated bonus, 18 months medical coverage, and accelerated vesting of two years of equity.
- Without Cause (Post-Change in Control): 300% of base salary plus prorated bonus, 36 months medical coverage, full equity vesting, and three years added to credited service under the Supplemental Executive Retirement Plan (SERP).
Shareholder Voting Results (May 22, 2012)
1. Election of Directors
Shareholders elected six directors. All nominees received significant support with "For" votes exceeding 31 million each.
| Director | For | Withheld | Broker Non-Votes |
|---|---|---|---|
| Mario L. Baeza | 31,633,105 | 1,484,428 | 5,091,196 |
| Mahendra R. Gupta | 31,673,444 | 1,444,089 | 5,091,196 |
| Carla Hendra | 31,679,917 | 1,437,616 | 5,091,196 |
| Michael F. Neidorff | 31,389,681 | 1,727,852 | 5,091,196 |
| Hal J. Upbin | 31,669,894 | 1,447,639 | 5,091,196 |
| Harold B. Wright | 31,623,830 | 1,493,703 | 5,091,196 |
2. Ratification of Auditors
Ernst & Young LLP was ratified with 37,369,465 votes For, 747,771 Against, and 91,493 Abstaining.
3. Advisory Resolution on Executive Compensation ("Say on Pay")
The resolution was approved with 30,513,410 votes For, 1,473,852 Against, and 1,130,271 Abstaining.
Outlook and Other Events
- The Board has scheduled the 2013 Annual Meeting of Shareholders for Thursday, May 30, 2013.
- Mr. Hammer's employment is subject to post-termination restrictions, including non-compete clauses within the footwear industry.
Key Facts for Investor Verification
- Verify the transition timeline for the CFO role between Mark E. Hood and Russell C. Hammer (June 8–11, 2012).
- Review the specific performance metrics tied to Mr. Hammer's long-term incentive plan (EPS and sales growth targets).
- Confirm the total potential cash and equity payout for Mr. Hammer under the "Change in Control" severance scenario.
- Monitor the company's financial performance to assess the likelihood of Mr. Hammer achieving his guaranteed and target bonus levels.