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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
ProxyStatementPursuanttoSection14(a)oftheSecuritiesExchangeActof1934(AmendmentNo. )
FiledbytheRegistrant☒FiledbyaPartyotherthantheRegistrant☐Checktheappropriatebox:
PreliminaryProxyStatementConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))DefinitiveProxyStatementDefinitiveAdditionalMaterialsSolicitingMaterialunder§240.14a-12
Dillard’s Inc.(NameofRegistrantasSpecifiedInItsCharter)
(NameofPerson(s)FilingProxyStatement,ifotherthantheRegistrant)
PaymentofFilingFee(Checktheappropriatebox):
Nofeerequired.
FeecomputedontablebelowperExchangeActRules14a-6(i)(1)and0-11.
Titleofeachclassofsecuritiestowhichtransactionapplies:
Aggregatenumberofsecuritiestowhichtransactionapplies:
PerunitpriceorotherunderlyingvalueoftransactioncomputedpursuanttoExchangeActRule0-11(setforththeamountonwhichthefilingfeeiscalculatedandstatehowitwasdetermined):
Proposedmaximumaggregatevalueoftransaction:
Totalfeepaid:
Feepaidpreviouslywithpreliminarymaterials.
CheckboxifanypartofthefeeisoffsetasprovidedbyExchangeActRule0-11(a)(2)andidentifythefilingforwhichtheoffsettingfeewaspaidpreviously.Identifythepreviousfilingbyregistrationstatementnumber,ortheFormorScheduleandthedateofitsfiling.
AmountPreviouslyPaid:
Form,ScheduleorRegistrationStatementNo.:
FilingParty:
DateFiled:
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NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS To Be Held on Saturday, May 16, 2020
The2020AnnualMeetingofStockholders(the“Annual Meeting”)ofDillard’s,Inc.(the“Company”)willbeheldattheCompany’sCorporateOffice,1600CantrellRoad,LittleRock,Arkansas72201,onSaturday,May16,2020,at9:00a.m.CDTforthefollowingpurposes:
ToelectasdirectorsthetwelvenomineesnamedintheattachedProxyStatement(fourofwhomaretobeelectedbyClassAstockholdersandeightofwhomaretobeelectedbyClassBstockholders).
ToratifytheappointmentofKPMGLLPastheCompany’sindependentregisteredpublicaccountingfirmforfiscal2020.
ToconductanadvisoryvoteonthecompensationoftheCompany’snamedexecutiveofficers.
Totransactsuchotherbusinessasmayproperlycomebeforethemeetingoranyadjournmentsorpostponementsthereof.
DetailsregardingthebusinesstobeconductedaremorefullydescribedintheaccompanyingProxyStatement.
OnlystockholdersofrecordatthecloseofbusinessonMarch19,2020willbeentitledtonoticeof,andtovoteat,themeetingoradjournmentsorpostponementsthereof.
Yourparticipationinthemeetingisearnestlysolicited.Evenifyouexpecttoattendthemeeting,weencourageyoutovoteinadvancebyproxy.ThegivingofaproxydoesnotaffectyourrighttorevokeitlaterorvoteyoursharesinpersonintheeventyoushouldattendtheAnnualMeeting.
ByOrderoftheBoardofDirectorsDEANL.WORLEYVice President, General Counsel, Corporate Secretary
LittleRock,ArkansasApril3,2020
Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Meeting of StockholdersTo Be Held on May 16, 2020. The accompanying Proxy Statement and the Company’s Annual Report on
Form 10-K are available at https://investor.dillards.com/financial-information/annual-report-and-proxy/default.aspx
DILLARD’S, INC. 1600 CANTRELL ROAD
LITTLE ROCK, ARKANSAS 72201 Telephone (501) 376-5200
PROXY STATEMENT
April 3, 2020
General
TheenclosedproxyissolicitedbyandonbehalfoftheBoardofDirectors(the“Board”)ofDillard’s,Inc.,aDelawarecorporation(the“Company”,“Dillard’s”,“we”,“us”or“our”),foruseatthe2020AnnualMeetingofStockholders(the“Annual Meeting”)tobeheldonSaturday,May16,2020,at9:00a.m.CDT,atourprincipalexecutiveoffices,1600CantrellRoad,LittleRock,Arkansas,72201,oratanyadjournmentsorpostponementsthereof.
Internet Availability of Proxy Materials
InaccordancewiththerulesoftheSecuritiesandExchangeCommission(the“SEC”),wemadeourproxystatementandformofproxyavailablebysendingaNoticeofInternetAvailabilityofProxyMaterialsonoraboutApril3,2020toourstockholdersofrecordasofthecloseofbusinessonMarch19,2020.WealsoprovidedaccesstoourproxymaterialsviatheInternetbeginningonthatdate.IfyoureceivedaNoticeofInternetAvailabilityofProxyMaterialsbymailanddidnotreceive,butwouldliketoreceive,aprintedcopyofourproxymaterials,youshouldfollowtheinstructionsforrequestingsuchmaterialsincludedinthisproxystatementorintheNoticeofInternetAvailabilityofProxyMaterials.
Proxy Voting
Themannerinwhichyoursharesmaybevoteddependsonhowyoursharesareheld.Ifyouownsharesofrecord,meaningthatyoursharesarerepresentedbycertificatesorbookentriesinyournamesothatyouappearasastockholderontherecordsofourstocktransferagent,youmayvotebyproxy,meaningyouauthorizeindividualsnamedontheproxycardtovoteyoursharesinaccordancewithyourinstructions.Youmayprovidethisauthorizationbyvotingviatheinternetatwww.proxyvote.com,bytelephonebycallingthetoll-freetelephonenumberprovidedinyourNoticeofInternetAvailabilityofProxyMaterialsor(ifyouhaverequestedpapercopiesofourproxymaterials)bymailbysimplysigning,datingandmailingaproxycard.Inthesecircumstances,ifyoudonotvotebyproxyorinpersonattheAnnualMeeting,yourshareswillnotbevoted.
Ifyouownyoursharesin“streetname,”thatis,throughabrokerageaccountorinanothernomineeform,youareabeneficialownerandnotastockholderofrecord,andthereforemustprovideinstructionstoyourbrokerornomineeastohowyoursharesheldbythemshouldbevoted.Yourabilitytovoteinperson,viatheinternet,bymailorbytelephonedependsonthevotingproceduresofyourbrokerornominee.Pleasefollowthedirectionsthatyourbrokerornomineeprovides.Inthesecircumstances,ifyoudonotprovidevotinginstructions,thebrokerornomineemayneverthelessvoteyoursharesonyourbehalfwithrespecttotheratificationoftheappointmentofKPMGLLP(“KPMG”)asourindependentauditorsforfiscal2020,butnotonanyothermattersbeingconsideredatthemeeting.
AllproxiesrelatedtosharesheldofrecordasofMarch19,2020,otherthanthoseheldthroughtheDillard’sStockFundportionoftheDillard’s,Inc.Investment&EmployeeStockOwnershipPlan(the“401(k) Plan”),mustbesubmittednolaterthan11:59p.m.EDTonMay15,2020,andnoproxyreceivedafterthatdateandtimewillbevotedattheAnnualMeeting.IfastockholderholdsCompanysharesthroughthe401(k)Plan,suchstockholderisentitledtoinstructNewportTrustCompany(“Newport”),Trusteeforthe401(k)Plan(“Trustee”),onhowtovotesuchshares,providedthathisorhervotinginstructionsare
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submittedinaccordancewiththeinstructionsontheproxycardandreceivedbyMay13,2020orsubmittedinaccordancewiththeinstructionsontheNoticeofInternetAvailabilityofProxyMaterialsandreceivedbynolaterthan11:59p.m.EDTonMay13,2020inordertoallowsufficienttimeforvoteswithinthe401(k)PlantobetabulatedbytheTrustee.Pursuanttothetermsofthe401(k)Plandocument,foranysharesheldthroughthe401(k)Planforwhichtimelyvotinginstructionsarenotreceivedfroma401(k)Planparticipantorifnochoiceisspecifiedonaparticularproposalinvotinginstructionsthataretimelysubmitted,suchshareswillbevotedinaccordancewiththerecommendationsoftheBoardofDirectorsasdescribedherein.
Revocation of Proxies
Anystockholderofrecordgivingaproxyhasthepowertorevokeitatanytimebeforeitisvoted,eitherbywrittenrevocationdeliveredtotheCorporateSecretaryoftheCompanyatourprincipalexecutiveoffices,byattendingtheAnnualMeetingandvotinginpersonorbysubmittingasubsequentproxybymail,overtheinternetorbytelephone.ToobtaindirectionstoattendtheAnnualMeetingandvoteinperson,pleasecall(501)376-5965.Proxiessolicitedhereinwillbevotedinaccordancewithanydirectionscontainedtherein,unlesstheproxyisreceivedinsuchformoratsuchtimeastorenderitineligibletovote,orunlessproperlyrevoked.Ifnochoiceisspecifiedbyastockholderinareturnedproxy,theshareswillbevotedinaccordancewiththerecommendationsoftheBoardasdescribedherein.IfmattersofbusinessotherthanthosedescribedinthisproxystatementproperlycomebeforetheAnnualMeeting,thepersonsnamedintheproxywillvoteinaccordancewiththeirbestjudgmentonsuchmatters.TheproxiessolicitedhereinshallnotconferanyauthoritytovoteatanymeetingofstockholdersotherthantheAnnualMeetingtobeheldonMay16,2020,oranyadjournmentsorpostponementsthereof.
Record Date; Outstanding Shares
ThestocktransferbooksoftheCompanywillnotbeclosed,butonlystockholdersofrecordatthecloseofbusinessonMarch19,2020(the“Record Date”),willbeentitledtonoticeof,andtovoteat,theAnnualMeetingoratanyadjournmentsorpostponementsthereof.Atthatdate,therewere19,187,626sharesoftheCompany’sClassACommonStockoutstanding(“Class A Common Stock”)and4,010,401sharesoftheCompany’sClassBCommonStockoutstanding(“Class B Common Stock”and,togetherwithClassACommonStock,“Common Stock”).
Quorum; Vote Required
Thepresence,inpersonorbyproxy,oftheholdersofamajorityofthesharesofCommonStockissuedandoutstandingasoftheRecordDateandentitledtovoteattheAnnualMeetingisrequiredtoestablishaquorumattheAnnualMeeting.
Ifaquorumisestablished,eachholderofClassACommonStockandeachholderofClassBCommonStockshallbeentitledtoonevoteonthematterspresentedatthemeetingforeachsharestandinginsuchholder’sname,exceptthattheholdersofClassACommonStockareempoweredasaclasstoelectone-thirdofthedirectorsservingontheCompany’sBoardofDirectorsandtheholdersofClassBCommonStockareempoweredasaclasstoelecttwo-thirdsofthedirectorsservingontheCompany’sBoardofDirectors.Stockholderswillnotbeallowedtovoteforagreaternumberofnomineesthanthosenamedinthisproxystatement.
Inordertobeelected,nomineesforDirectorofeachclassmustreceivetheaffirmativevoteofamajorityofthesharesofthatrespectiveclassoutstandingandeligibletovoteintheelection.CumulativevotingforDirectorsisnotpermitted.ThevoteoftheholdersofamajorityofthesharesofCommonStockpresentinpersonorrepresentedbyproxyandhavingvotingpowerisrequiredfortheratificationofKPMGastheCompany’sindependentregisteredpublicaccountingfirm(ProposalNo.2)andtoapprovethecompensationpaidtotheCompany’snamedexecutiveofficersinanadvisory,non-bindingvote(ProposalNo.3).
Abstentions and Broker Non-Votes
Abstentionswillbecountedforquorumpurposesbutwillhavetheeffectofavoteagainsteachnomineeintheelectionofdirectors(ProposalNo.1),andavoteagainsttheratificationofKPMG(ProposalNo.2)andtheadvisoryresolutiononexecutivecompensation(ProposalNo.3).
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Brokersholdingsharesforindividualstockholdersmustvoteaccordingtospecificinstructionstheyreceivefromeachsuchindividualstockholder.Ifspecificinstructionsarenotreceived,insomecases,brokersmayvotethesesharesintheirdiscretion.TheNewYorkStockExchange(the“NYSE”),however,precludesbrokersfromexercisingvotingdiscretiononcertainproposalsdesignatedunderNYSErulesasbeing“non-routine”withoutspecificinstructionsfromtheindividualstockholder.Thisresultsina“brokernon-vote”onsuchaproposal.ProposalNo.1(theelectionofdirectors)andProposalNo.3(advisoryresolutiononexecutivecompensation)areconsiderednon-routinemattersunderapplicableNYSErules.Assuch,abrokercannotvoteontheseproposalswithoutinstructionsfromtheindividualstockholder,and,therefore,anundeterminednumberofbrokernon-votesmayoccurwithrespecttotheseproposals.Sharesrepresentedbybrokernon-votesthatarepresentandentitledtovoteattheAnnualMeetingwillbecountedforpurposesofdeterminingaquorum.Brokernon-voteswillhavetheeffectofavoteagainstthenomineesinProposalNo.1(theelectionofdirectors)butwillhavenoimpactonProposalNo.3(advisoryresolutiononexecutivecompensation).ProposalNo.2(theratificationoftheappointmentofKPMG)isconsideredaroutinematterunderapplicableNYSElistingrules.Therefore,brokerswillbepermittedtovotethesharesofindividualstockholderswhodonotsubmitvotinginstructionsforthisproposal,andnobrokernon-voteswilloccurinconnectionwiththeratificationoftheappointmentofKPMG.
Costs of Solicitation
ThecostofsolicitingproxieswillbebornebytheCompany.TheCompanywillreimbursebrokers,custodians,nomineesandotherfiduciariesfortheirchargesandexpensesinforwardingproxymaterialstobeneficialownersofsharesoftheCompany’sCommonStock.Inadditiontosolicitationbymail,certainofficersandemployeesoftheCompanymaysolicitproxiesbytelephone,fax,e-mailorotherelectronicmeans,orinperson.Thesepersonswillreceivenocompensationotherthantheirregularsalaries.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
ThefollowingtablesetsforthcertaininformationregardingpersonsknowntotheCompany,otherthanmembersofmanagementwhoarepresentedintheseparatetablebelow,tobeneficiallyownmorethanfivepercentofaclassoftheCompany’soutstandingvotingsecuritiesasofthecloseofbusinessonMarch19,2020.Unlessotherwiseindicated,eachsuchpersonhassolevotingpowerandsoledispositivepoweroverthesharesindicatedbelow.
Name and Address of Beneficial OwnerTitle of
Class
Amount and Nature Of Beneficial
OwnershipPercent
Of Class NewportTrustCompany815ConnecticutAvenue,NW,Suite510Washington,DC20006
ClassA 7,175,639 37.4
SoutheasternAssetManagement,Inc.6410PoplarAve.,Suite900Memphis,TN38119
ClassA 2,038,397 10.6
DimensionalFundAdvisorsLP6300BeeCaveRoad,BuildingOneAustin,TX78746
ClassA 1,558,029 8.1
BlackRock,Inc.55East52 StreetNewYork,NY10055
ClassA 1,325,615 6.9
LSVAssetManagement155N.WackerDrive,Suite4600Chicago,IL60606
ClassA 1,167,653 6.1
ContrariusInvestmentManagementLimited2BondStreetSt.Helier,JerseyJE23NP,ChannelIslands
ClassA 1,157,947 6.0
W.D.Company,Inc. 1600CantrellRoadLittleRock,AR72201
ClassA 41,496 0.2
ClassB 3,985,776 99.4
AtMarch19,2020,therewereatotalof19,187,626sharesoftheCompany’sClassACommonStockand4,010,401sharesoftheCompany’sClassBCommonStockoutstanding.BasedoninformationcontainedinSchedule13G/AfiledFebruary11,2020withtheSecuritiesandExchangeCommission,NewportTrustCompanyisthebeneficialownerofthesesharesinitscapacityasTrusteeofthe401(k)Plan.NewportTrustCompanyhasnovotingpowerandonlyshareddispositivepowerovertheseshares.BasedoninformationcontainedinSchedule13GfiledjointlybySoutheasternAssetManagement,Inc.(“Southeastern”),LongleafPartnersSmall-CapFund(“Longleaf”)andO.MasonHawkins(“Mr.Hawkins”andtogetherwithSoutheasternandLongleaf,the“SoutheasternGroup”)onFebruary14,2020withtheSecuritiesandExchangeCommission.BasedsolelyontheSchedule13G,(a)Southeasternisaregisteredinvestmentadviser,andallofthesecuritiescoveredbytheSchedule13GareownedlegallybySoutheastern’sinvestmentadvisoryclientsandnoneareowneddirectlyorindirectlybySoutheasternand(b)Mr.HawkinsisChairmanoftheBoardofSoutheastern.TheSchedule13GfiledbytheSoutheasternGroupindicatesthat(a)Southeasternhasthesolevotingpowerovernoshares,sharedvotingpowerover2,020,214shares,novotingpowerover18,183shares,soledispositivepowerover18,183shares,andshareddispositivepowerover2,020,214sharesand(b)Longleafhassolevotingpowerovernoshares,sharedvotingpowerover2,020,214shares,soledispositivepowerover18,183shares,andshareddispositivepowerover2,020,214shares.BasedoninformationcontainedinSchedule13G/AfiledFebruary12,2020withtheSecuritiesandExchangeCommission,DimensionalFundAdvisorsLPhassolevotingpowerover1,541,580shares,soledispositivepowerover1,558,029sharesandnosharedvotingordispositivepowerwithrespecttoanyshares.
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BasedoninformationcontainedinSchedule13G/AfiledFebruary5,2020withtheSecuritiesandExchangeCommission,BlackRock,Inc.hassolevotingpowerover1,293,963shares,soledispositivepowerover1,325,615sharesandnosharedvotingordispositivepowerwithrespecttoanyshares.
BasedoninformationcontainedinSchedule13GfiledFebruary11,2020withtheSecuritiesandExchangeCommission,LSVAssetManagementhassolevotingpowerover698,088shares,soledispositivepowerover1,167,653sharesandnosharedvotingordispositivepowerwithrespecttoanyshares.
BasedoninformationcontainedinSchedule13GfiledjointlybyContrariusInvestmentManagementLimitedandContrariusInvestmentManagement(Bermuda)Limited(together,“Contrarius”)onFebruary6,2020withtheSecuritiesandExchangeCommission.Contrariushassharedvotinganddispositivepowerover1,157,947sharesandnosolevotingordispositivepowerwithrespecttoanyshares.
WilliamDillard,II,ChairmanandChiefExecutiveOfficeroftheCompany,AlexDillard,PresidentoftheCompany,andMikeDillard,ExecutiveVicePresidentoftheCompany,areofficersanddirectorsofW.D.Company,Inc.andown27.4%,27.9%and26.3%,respectively,oftheoutstandingvotingstockofW.D.Company,Inc.WilliamDillard,II,AlexDillardandMikeDillardactbymajoritywithrespecttovotinganddispositivepowerovertheseshares.
SECURITY OWNERSHIP OF MANAGEMENT
ThefollowingtablesetsforththenumberofsharesofClassACommonStockandClassBCommonStockoftheCompanybeneficiallyownedbyeachdirector,eachdirectornominee,eachofthenamedexecutiveofficersidentifiedunderthesectiontitled“ExecutiveCompensation”inthisproxystatementandthedirectorsandexecutiveofficersasagroup,asofMarch19,2020.
Class A Shares Class B Shares Name of Beneficial Owner Amount % of Class Amount % of Class RobertC.Connor 71,009 * — — AlexDillard 1,144,520 6.0 MikeDillard 631,440 3.3 WilliamDillard,II 1,083,490 5.6 JamesI.Freeman 147,364 * — — H.LeeHastings,III 14,312 * — — ChrisB.Johnson 14,428 * — — DrueMatheny 491,237 2.6 — — FrankR.Mori 24,272 * — — ReynieRutledge 15,600 * — — WarrenA.Stephens 148,838 * — — J.C.Watts,Jr. 12,000 * — — PhillipR.Watts 17,435 * — — NickWhite 54,302 * — — AllDirectors&ExecutiveOfficersasaGroup(atotalof25persons) 4,495,442 23.4
Denoteslessthan1%
Basedoninformationfurnishedbytherespectiveindividuals.
IncludesninesharesownedbyMr.Connor’swife.
AlexDillard’ssharesinclude(i)1,016,177sharesofClassACommonStockhelddirectlyand91,852sharesofClassACommonStockheldintrustsoverwhichAlexDillardhassolevotinganddispositive
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powerand(ii)36,491sharesheldbyAlexDillard’sspouseoverwhichAlexDillardmaybedeemedtosharevotinganddispositivepower.AlexDillard’saddressis1600CantrellRoad,LittleRock,Arkansas72201.MikeDillard’ssharesinclude(i)623,530sharesofClassACommonStockhelddirectlyand7,300sharesofClassACommonstockheldintrustoverwhichMikeDillardhassolevotinganddispositivepowerand(ii)610sharesofClassACommonStockheldintrustoverwhichhiswifehassolevotingpowerandoverwhichMikeDillardmaybedeemedtosharevotingpower.WilliamDillard,II’ssharesinclude1,076,190sharesofClassACommonStockhelddirectlyand7,300sharesofClassACommonStockheldintrustoverwhichWilliamDillard,IIhassolevotinganddispositivepower.WilliamDillard,II’saddressis1600CantrellRoad,LittleRock,Arkansas72201.Doesnotinclude41,496sharesofClassACommonStockand3,985,776sharesofClassBCommonStockownedbyW.D.Company,Inc.AlexDillard,MikeDillardandWilliamDillard,IIaredirectorsandofficersofW.D.Company,Inc.andown27.9%,26.3%and27.4%,respectively,oftheoutstandingvotingstockofsuchcompany.AlexDillard,MikeDillardandWilliamDillard,IIactbymajoritywithrespecttovotinganddispositivepowerovertheseshares.The41,496ClassAsharesrepresentapproximately0.2%oftheoutstandingClassASharesandthe3,985,776ClassBSharesrepresentapproximately99.4%oftheoutstandingClassBShares.AlexDillard,MikeDillardandWilliamDillard,IIdisclaimbeneficialownershipoverallsharesofClassACommonStockandClassBCommonStockheldbyW.D.Company,Inc.DrueMatheny’ssharesinclude(i)483,587sharesofClassACommonStockhelddirectlyand7,300sharesofClassACommonStockheldintrustoverwhichMrs.Mathenyhassolevotinganddispositivepowerand(ii)350sharesofClassACommonStockheldbyMrs.Matheny’sspouseoverwhichMrs.Mathenymaybedeemedtosharevotinganddispositivepower.Mrs.Mathenyowns7.3%oftheoutstandingvotingstockofW.D.Company,Inc.butdisclaimsbeneficialownershipoversharesheldbyW.D.Company,Inc.WarrenStephensbeneficiallyowns27,302sharesheldintrustandcontrols121,536sharesheldbyStephensInvestmentHoldingsLLC.Includes3,000sharesthatarepledgedassecurityforapersonalloan.
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PROPOSAL NO. 1. ELECTION OF DIRECTORS
ThenumberofdirectorsthatserveontheCompany’sBoardiscurrentlysetat12butmaybechangedfromtimetotimeinthemannerprovidedintheCompany’sby-laws.ClassAstockholdersareentitledtovotefortheelectionoffourDirectors,andClassBstockholdersareentitledtovotefortheelectionofeightDirectors.DirectorsaretobeelectedattheAnnualMeetingforatermofoneyearanduntiltheelectionandqualificationoftheirsuccessors.Onceelected,ourDirectorshavenoongoingstatusas“ClassA”or“ClassB”Directorsandhavethesamedutiesandresponsibilitiestoallstockholders.
TheBoardrecommendsthateachnomineeidentifiedbelowbeelectedattheAnnualMeeting.EachofthenomineesiscurrentlyservingasadirectoroftheCompanyandwaselectedatthe2019AnnualMeetingofStockholders.Setforthbelowaretheprincipaloccupationandpubliccompanydirectorshipseachnomineecurrentlyholdsorhasheldduringthelastfiveyears,aswellasotherbackgroundinformationaboutthenominees,includingadiscussionofthespecificexperience,qualifications,attributes,andskillsofeachnomineethatledtotheBoard’sconclusionthateachnomineeshouldserveasadirector.
Class A Nominees
Frank R. Mori,79,hasservedasaDirectoroftheCompanysince2008.Atalltimesduringthepastfiveyears,Mr.MorihasservedasCo-ChiefExecutiveOfficerandPresidentofTTMAssociatesInc.(formerlyTakihyo,LLC),aprivateinvestmentfirmheadquarteredinNewYorkCity.TTMAssociatesInc.isnotasubsidiaryorotheraffiliateoftheCompany.HepreviouslyservedasChiefExecutiveOfficerandDirectorofDonnaKaranInternational,Inc.andAnneKlein&Co.,Inc.HealsoservedontheBoardofDirectorsofTheStrideRiteCorporationuntil2007andBarington/HilcoAcquisitionCorp.until2018.Mr.MoriofferstheBoardthebroadknowledgeandperspectiveofafashionvendorcombinedwithoverseassourcingandmanufacturingexperience.Mr.MoricurrentlyservesontheBoard’sStockOptionandExecutiveCompensationCommittee(the“Compensation Committee”).
Reynie Rutledge,70,hasservedasaDirectoroftheCompanysince2013.Atalltimesduringthepastfiveyears,Mr.RutledgehasservedastheChairmanofFirstSecurityBancorp,afinancialservicesholdingcompanyheadquarteredinSearcy,Arkansas.Withover40yearsofexperienceinbanking,Mr.RutledgehasbeeninvolvedwithallaspectsoffinanceandmanagementwhileleadingFirstSecurityBancorptobecomethefifthlargestbankholdingcompanybasedinArkansas,withover$5.8billioninassetsand78locationsthroughoutthestate.FirstSecurityBancorpconsistsofFirstSecurityBank,FirstSecurityCrews&Associatesinvestmentbankingfirm,andFirstSecurityPublicFinance.FirstSecurityBancorpisnotasubsidiaryorotheraffiliateoftheCompany.Mr.RutledgeisagraduateoftheUniversityofArkansaswhereheearnedadegreeinindustrialengineeringandaMasterofBusinessAdministration.Mr.RutledgeisapastChairmanoftheArkansasBankersAssociationandtheBusinessAdvisoryBoardofHardingUniversity.Mr.RutledgeisalsoamemberoftheArkansasAcademyofIndustrialEngineering,amemberandpastChairmanoftheDean’sExecutiveAdvisoryBoardfortheSamM.WaltonCollegeofBusiness,amemberoftheCampaignArkansasExecutiveCommittee,apastChairmanoftheArkansasBusinessHallofFameSelectionCommittee,theUniversityofArkansas2000VolunteeroftheYear,anda2012recipientoftheUniversityofArkansasDistinguishedAlumniAwardandpastmemberoftheUniversityofArkansasBoardofTrustees.Mr.Rutledge’sextensivecareerincommercialbankingprovidesinsightsintothecreditmarketsfortheBoard.Mr.RutledgeservesasChairmanoftheAuditCommittee.
J.C. Watts, Jr.,62,hasservedasaDirectoroftheCompanysinceAugust2009andpreviouslyservedontheBoardfrom2003until2008,includingasamemberoftheAuditCommittee.HealsoservesontheBoardofDirectorsofPaycomSoftware,andhepreviouslyservedontheBoardsofDirectorsofCSXCorporation,ITCHoldingsCorp,BurlingtonNorthernSantaFeCorporation,ClearChannelCommunications,Inc.andTerexCorporation.Atalltimesduringthepastfiveyears,Mr.WattshasservedastheChairmanoftheJ.C.WattsCompanies,whichprovidesbothconsultingandadvocacyservices.TheJ.C.WattsCompaniesarenotsubsidiariesorotheraffiliatesoftheCompany.Mr.WattsservedintheU.S.CongressfromthefourthdistrictofOklahomafrom1995to2003.In1998,hewaselectedchairmanoftheRepublicanConferenceintheU.S.HouseofRepresentatives.HeservedforeightyearsontheHouseArmedServicesCommittee.HeauthoredlegislationtocreatetheHouseSelectCommitteeonHomelandSecurity,acommitteeonwhichhelaterserved.HealsoservedontheHouseTransportationandInfrastructureCommitteeaswellastheHouseBankingCommittee.HeledtwocongressionaltrademissionstoAfrica.
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Mr.Wattsco-authoredtheAmericanCommunityRenewalandNewMarketsActandauthoredtheCommunitySolutionsActof2001.HealsocraftedlegislationwithCongressmanJohnLewistoestablishtheSmithsonianNationalMuseumofAfricanAmericanHistoryandCulture.Hehasservedasananalystontelevisionnewsprogramsnationallyandinternationally.Mr.WattsledaU.S.delegationtoVienna,Austria,attherequestofPresidentGeorgeW.BushandSecretaryofStateColinPowell,totheOrganizationforSecurityandCooperationinEuropeConferenceonRacism,DiscriminationandXenophobiaandaccompaniedPresidentBushonhishistorictriptoAfrica.Heco-foundedtheCoalitionforAIDSReliefinAfricaandservedontheBoardofAfricare.HehasalsocreatedtheJ.C.andFrankieWattsFoundationtofocusonurbanrenewalandothercharitableinitiatives.HeistheChairmanofWattsEquipment,whichconsistsofJohnDeerestoresinTexas,andChairmanoftheBlackNewsChannel,whichisthefirsteverAfricanAmericannewschannel.Mr.WattsbringstotheBoardnotonlyanunderstandingandsensitivitytothepoliticalandculturalissueswhichtheCompanyregularlyfacesbutalsoawealthofknowledgeoftheregulatoryenvironmentwhichcontinuestochangeandaffecttheCompany’soperations.Mr.WattscurrentlyservesontheAuditCommittee.
Nick White,75,hasservedasaDirectoroftheCompanysince2008.Since2000,Mr.WhitehasservedasChiefExecutiveOfficerandPresidentofWhiteandAssociates,aninternationalretailsolutionsfirmofferingretailclientsconsultingservicesencompassingstrategy,partnerships,logisticsandconcepts.WhiteandAssociatesisnotasubsidiaryorotheraffiliateoftheCompany.FollowingatourinVietnamwiththeUnitedStatesMarineCorps,Mr.Whitebeganhisretailcareerin1968withSpartan-AtlanticDepartmentStoreswhilestillattendingcollege.In1973,hejoinedWal-MartStores,Inc.asanAssistantStoreManager.From1985to1990,hewasGeneralManagerofSam’sClubs,andin1990,hewasnamedanExecutiveVicePresidentofWal-MartStores,Inc.andGeneralManagerofitsSupercenterDivision,positionshehelduntilhisretirementin2000.WhileatWal-Mart,heservedonboththeExecutiveCommitteeandtheRealEstateCommittee.Mr.WhitehasmadesignificantcontributionstotheBoardasaresultofhisextensiveknowledgeofsourcing,logistics,storeoperationsandmerchandising.Mr.WhitecurrentlyservesontheCompensationCommittee.
Class B Nominees
Robert C. Connor,78,hasservedasaDirectoroftheCompanysince1987.Atalltimesduringthepastfiveyears,Mr.Connor’sprincipaloccupationisandhasbeenaprivateinvestorforhisownaccount.HebeganhisbankingcareerinDallas,TexasattheMercantileNationalBankandwaselectedVicePresidentoftheCitizensBankofJonesboro,Arkansasin1970.HewaselectedPresidentofTheUnionNationalBankofArkansasandTheUnionofArkansasCorporationin1976.HepreviouslyservedontheBoardofSageTelecominAllen,Texas.Mr.Connor’slongcareerofleadershipinthebankingindustrymakeshimparticularlywellsuitedtoserveontheCompensationCommitteeaswellastosharehisknowledgeandinsightsconcerningthecreditmarketswiththeBoard.Mr.ConnorcurrentlyservesasChairmanoftheCompensationCommittee.
Alex Dillard,70,isPresidentoftheCompany,hasbeenamemberoftheBoardsince1975andservesontheExecutiveCommitteeoftheBoardofDirectors(the“Executive Committee”).Thishasbeenhisprincipaloccupationforthelastfiveyears.Mr.DillardhasbeeninvolvedinvirtuallyeveryaspectofoperationsandmerchandisingfortheCompanyforover45yearsandpreviouslyservedasExecutiveVicePresidentoftheCompany.HehasservedasaboardmemberoftheUniversityofArkansasforMedicalSciencesFoundationFund,PhilanderSmithCollege,UnionBankandWorthenBankinLittleRock,ArkansasandFirstNationalBankofFt.Worth,Texas.Mr.Dillard’sunderstandingofboththemerchandisingandtheoperationalaspectsoftheretailbusinesshasenabledtheBoardtomoreeffectivelygainabroadoverviewoftheday-to-dayprocessesinvolvedintheoperationoftheCompany.
Mike Dillard,68,isanExecutiveVicePresidentoftheCompanyandcurrentlyheadsoneofthelargestmerchandisingportionsoftheCompany’sbusiness.Thishasbeenhisprincipaloccupationforthelastfiveyears.HehasbeenamemberoftheBoardsince1976.Mr.DillardhasplayedmanyrolesfortheCompany,devotinghisentireprofessionalcareertoDillard’s,Inc.HisunderstandingoftheuniqueregionalcharacteristicsofmerchandisinginthemanydifferentgeographicregionsofthecountryhasassistedtheBoardinitseffortstoguidethebusinesstomeettheneedsofitsvariedcustomerbase.
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William Dillard, II,75,istheChairmanoftheBoardandChiefExecutiveOfficeroftheCompany,hasbeenamemberoftheBoardsince1967andservesontheExecutiveCommittee.Thishasbeenhisprincipaloccupationforthelastfiveyears.Mr.DillardhasbeeninvolvedinalmosteveryaspectoftheCompany’soperations,workingpart-timewhileinschoolandfull-timeforover50years.HewasformerlyPresidentandChiefOperatingOfficeroftheCompany.Mr.DillardalsoservesontheBoardsofDirectorsofLiveRampHoldings,Inc.(formerlyAcxiomCorporation)andBarnes&Noble,Inc.ThroughhisnumerousyearsofservicetotheCompany,Mr.DillardpossessesanunmatchedknowledgeoftheCompany’soperationsandtheretailindustryasawhole.This,combinedwithhisserviceasamemberoftheboardsofdirectorsofotherpubliccompanies,allowshimtoprovideinvaluableinsighttotheBoard.Inaddition,hisexpertisewithrespecttorealestatemattersandstorelocationenableshimtoprovidetheBoardwithleadershipandinsightintothiscriticalaspectoftheCompany’sbusiness.
James I. Freeman,70,wasSeniorVicePresidentandChiefFinancialOfficeroftheCompanyuntilhisretirementeffectiveFebruary1,2015.Duringthepastfiveyears,hisprincipaloccupationisandhasbeenaprivateinvestorforhisownaccount.HehasbeenamemberoftheBoardsince1991.Mr.FreemanjoinedtheCompanyin1988.Heenteredtheaccountingprofessionin1972andpracticedasacertifiedpublicaccountant.HeformerlyservedasamemberoftheManagementCommitteeofBKD,LLP,oneofthelargestaccountingfirmsinthenation.HavingservedasChiefFinancialOfficeroftheCompany,Mr.FreemanhasextensiveexperienceoverseeingtheCompany’sfinancialreportingprocesses,internalaccountingandfinancialcontrols,andindependentauditorengagements.ThisuniqueexperienceprovidesMr.FreemantheabilitytoregularlyadvisetheBoardregardingcurrentandproposedaccountingissues,financialmattersandregulationsthataffecttheCompany’soperations.
H. Lee Hastings, III,65,hasservedasaDirectoroftheCompanysince2010.Atalltimesduringthepastfiveyears,Mr.HastingshasservedasPresidentandChiefOperatingOfficerofHastingsHoldings,Inc.,afamilyholdingcompanythatoperatesseveralsubsidiarieswhichareengagedinrealestate,beveragedistribution,import/exportandotherbusinesses.Forthepastfiveyears,Mr.HastingshasalsoservedasPresidentofArkansasBolt/ABCLogistics,asubsidiaryofHastingsHoldings,Inc.thatsellsandimports/exportsindustrialfastenersandstampingsthroughouttheworld.Since2001,Mr.Hastingshasalsobeenadirectorofanotherfamilyholdingcompany,StateHoldingCo.Inc.,whichownsandoperatesabankholdingcompany.NoneofthesecompaniesortheirsubsidiariesaresubsidiariesorotheraffiliatesoftheCompany.Mr.Hastingshasextensiveexperienceintheinternationalimport/exportmarketandcontributesvaluableadvicetotheBoardwithrespecttotheCompany’sinternationalsourcingefforts.Mr.HastingscurrentlyservesontheAuditCommittee.
Drue Matheny,73,hasbeenamemberoftheBoardsince1994.Forthepastfiveyears,herprincipaloccupationhasbeen,andcurrentlyis,anExecutiveVicePresidentoftheCompany.SheisbasedinFt.Worth,TexasanddirectsoneofthelargestmerchandisingportionsoftheCompany.SincejoiningtheCompanyin1968,Ms.MathenyhasoverseeneveryaspectoftheCompany’svariousmerchandisingfunctions.ShebringstotheBoardadeepunderstandingoftheexactingtastesandpreferencesoftheCompany’scustomers.
Warren A. Stephens,63,hasservedasaDirectoroftheCompanysince2002.Atalltimesduringthepastfiveyears,Mr.Stephens’principaloccupationhasbeenChairman,ChiefExecutiveOfficerandPresidentofStephensInc.HeisalsoCo-ChairmanofSFHoldingCorporation.StephensInc.andSFHoldingCorporationarenotsubsidiariesorotheraffiliatesoftheCompany.In1981,Mr.StephensjoinedStephensInc.In2006,Mr.Stephensacquired100%oftheoutstandingsharesofStephensInc.StephensInc.focusesoninvestmentbanking,wealthmanagement,capitalmanagement,privateequity,institutionalsalesandtrading,research,andinsurance.Mr.Stephens’knowledgeandunderstandingofsophisticatedfinancialmarketshavebeeninvaluabletotheBoardwhendealingwithawiderangeofissuesfrominvestmentdecisionstocreditandfinancematterstothestrategicpositioningoftheCompany.
Vote Required
AmajorityofthesharesoftherespectiveclassoftheCommonStockoutstandingandeligibletovoteintheelectionisrequiredtoelecteachDirectorforsuchclass.
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Recommendation of the Board
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THATSTOCKHOLDERS VOTE FOR EACH OF THE DIRECTOR NOMINEES NOMINATED BY THEBOARD. PROXIES SOLICITED BY THE BOARD WILL BE VOTED FOR EACH NOMINEE UNLESSSTOCKHOLDERS SPECIFY A CONTRARY VOTE.Managementdoesnotknowofanynomineewhowillbeunabletoserve,butshouldanynomineebeunableordeclinetoserve,thediscretionaryauthorityprovidedintheProxywillbeexercisedtovoteforasubstituteorsubstitutes.
Information Regarding the Board and Its Committees
Controlled Company.TheCompanyqualifiesasa“controlledcompany”undertheNYSElistingstandardsduetotheownershipbyW.D.Company,Inc.ofsharesofClassBCommonStockallowingittocastmorethan50%ofvoteseligibletobecastfortheelectionoftwo-thirdsoftheDirectorsoftheCompany.InaccordancewithaprovisioninNYSErulesforcontrolledcompanies,theCompanyisnotrequiredtocomplywithNYSElistingstandardsthatprovidefor(1)amajorityoftheBoardofDirectorsbeingcomposedofindependentdirectors,(2)anominating/corporategovernancecommitteecomposedsolelyofindependentdirectorsand(3)acompensationcommitteecomposedsolelyofindependentdirectors.Notwithstandingtheseexemptions,allthemembersoftheCompany’sCompensationCommitteeareindependentinaccordancewiththeNYSElistingstandards.Thismaychangeinthefuture,however,attheCompany’sdiscretion.
Director Independence.TheBoardhasdeterminedthatalloftheClassAnomineeslistedabovequalifyasindependentpersonsasdefinedintheCompany’sby-laws(discussedbelow).Inaddition,theBoardhasaffirmativelydeterminedthateachoftheClassAnominees,aswellasRobertC.Connor,JamesI.FreemanandH.LeeHastings,III,whoareClassBnominees,hasnodirectorindirectmaterialrelationshipwiththeCompanyandqualifiesasanindependentdirectorinaccordancewiththeNYSElistingstandards.
Family Relationships.WilliamDillard,II,DrueMatheny,AlexDillard,MikeDillardandDeniseMahaffy(aSeniorVicePresidentoftheCompany)aresiblings.WilliamDillard,III(aSeniorVicePresidentoftheCompany)isthesonofWilliamDillard,II.AlexandraLucieandAnnemarieJazic(eachaVicePresidentoftheCompany)aredaughtersofAlexDillard.
Director Nominations.AsprovidedintheCompany’sby-laws,theExecutiveCommitteeisresponsiblefornominatingindividualstostandforelectionateachannualmeetingofstockholders.StockholdersmayalsonominateadirectornomineepursuanttotheCompany’sby-laws.
TheCompany’sby-lawsprovidethatnomineestorepresentClassAstockholdersontheCompany’sBoardshallbeindependentpersonsonly.Forthesepurposes,theCompany’sby-lawsdefine“independent”asapersonwho:(1)hasnotbeenemployedbytheCompanyoranaffiliateinanyexecutivecapacitywithinthelastfiveyears;(2)wasnot,andisnot,amemberofacorporationorfirmthatisoneoftheCompany’spaidadvisorsorconsultants;(3)isnotemployedbyasignificantcustomer,supplierorproviderofprofessionalservices;(4)hasnopersonalservicescontractwiththeCompany;(5)isnotemployedbyafoundationoruniversitythatreceivessignificantgrantsorendowmentsfromtheCompany;(6)isnotarelativeofthemanagementoftheCompany;(7)isnotastockholderwhohassignedstockholderagreementslegallybindinghimorhertovotewithmanagement;and(8)isnottheChairmanofacompanyonwhichtheCompany’sChairmanorChiefExecutiveOfficerisalsoaboardmember.Theseindependencestandards,foundinourCorporateGovernanceGuidelines,areavailableontheinvestorrelationsportionoftheCompany’swebsiteatwww.dillards.com.
Innominatingaslateofdirectors,theobjectiveistoselectindividualswithskillsandexperiencethatcanbeofassistanceinoperatingtheCompany’sbusiness.Thefollowingcorecriteriaareconsideredinnominatingeachcandidate:
Integrity.Onlypersonswhohavedemonstratedintheirprofessionallivesthehighestethicalstandards,maturityandresponsibilitywillbeconsidered.
Experience.AdirectorshouldhavebusinessexperiencerelevanttotheCompany’sbusiness.
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Judgment and Knowledge.AdirectorshouldhavetheabilitytoassesstheCompany’sstrategy,businessplan,andkeyissuestoevaluatetheperformanceofmanagementandtoevaluatetheCompany’sfinancialandoperatingreportsandtoprovidemeaningfulanalysisoftheCompany’sfinancialposition.
Time and Commitment.BoardmembersmusthavesufficienttimeavailabletobecomeacquaintedwiththeCompany,toprepareforBoardandcommitteemeetingsandtoattendmeetings.
Candidateswhoindividuallypossessknowledge,experienceandskillsinatleastoneofthefollowingaresought:accountingandfinance,businessjudgment,management,crisisresponse,industryknowledgeorstrategyandvision.DiversityisanimportantconsiderationinBoardcompositionandisdiscussedasafactorinconnectionwitheachcandidate.TheExecutiveCommitteehasnotadoptedaformalpolicywithrespecttodiversity.Theimplementationofthisconsiderationoccurswhen,inadditiontothecorecriteriaidentifiedabove,theExecutiveCommitteeinformallydiscusseswhetherapotentialnomineemightalsobringtotheBoarddiverselifeexperiencesandperspectivesbutnosinglefactorcontrolsthedeterminationprocess.
InorderforaCompanystockholdertonominateanindividualforelectiontotheBoard,thestockholdermustprovidewrittennoticeofsuchnominationtotheCompany’sCorporateSecretary,andthenoticemustbereceivedbytheCompany’sCorporateSecretaryattheprincipalexecutiveofficesoftheCompanynomorethan90days,andnolessthan60days,beforetheannualmeeting;provided,however,thatintheeventthatlessthan70days’noticeorpriorpublicdisclosureofthedateofthemeetingisgivenormadetostockholders,suchnominationmustbereceivednolaterthanthecloseofbusinessonthe10 dayfollowingthedayonwhichsuchnoticeofthedateofthemeetingwasmailedorsuchpublicdisclosurewasmade.Thenoticemustsetforthastoeachpersonwhomthestockholderproposestonominateforelectionorre-electionasaDirector,(1)thename,age,businessaddressandresidenceaddressofsuchperson,(2)theprincipaloccupationoremploymentofsuchperson,(3)theclassandnumberofsharesoftheCompany’sCommonStockthatarebeneficiallyownedbysuchpersonand(4)anyotherinformationrelatingtosuchpersonthatisrequired,ineachcase,pursuanttoRegulation14AundertheSecuritiesExchangeActof1934,asamended(the“Exchange Act”)(includingwithoutlimitationsuchpersons’writtenconsenttobeingnamedintheproxystatementasanomineeandtoserveasadirectorifelected).Suchnoticemustalsosetforththenameandaddress,astheyappearontheCompany’sbooks,ofthestockholdergivingthenoticeandtheclassandnumberofsharesoftheCompany’sCommonStockthatarebeneficiallyownedbysuchstockholder.InorderforaCompanystockholdertorecommend(asopposedtonominate)adirectorcandidate,thestockholdermustprovidewrittennoticeofsuchrecommendationtotheCompany’sCorporateSecretaryattheprincipalexecutiveofficesoftheCompany.TheExecutiveCommitteewillconsiderdirectorcandidatesrecommendedbystockholdersandwillconsiderallcandidatesfordirectorinthesamemannerregardlessofthesourceoftherecommendation.
Director and Stockholder Meetings.TheBoardofDirectorsmetfourtimesduringtheCompany’slastfiscalyear.Duringthelastfiscalyear,alloftheindividualsservingasdirectorattendedatleast75%oftheaggregateof (1)thetotalnumberofmeetingsoftheBoardand(2)thetotalnumberofmeetingsheldbyallcommitteesoftheBoardonwhichtheyserved.TheCompanyencourageseachBoardmembertoattendtheCompany’sAnnualMeeting.AllindividualsservingasdirectoratthattimewereinattendanceattheCompany’sAnnualMeetingheldonMay18,2019exceptforonedirector.
Executive Sessions; Presiding Director.AsrequiredbytheNYSElistingstandards,ournon-managementdirectorsmeetonaregularlyscheduledbasisinexecutivesessionatwhichonlynon-managementdirectorsarepresent.Ournon-managementdirectorschooseapresidingindependentdirectorbymajorityvoteforeachsession.Thepresidingdirectorisresponsiblefor,amongotherthings,presidingattheexecutivesessionoftheindependentdirectorsforwhichheorsheischosentoserveandapprisingtheChairmanoftheissuesconsideredatsuchmeetings.Ourindependentdirectorsalsomeetatleastannually.
Communications with Directors.Securityholdersandotherinterestedpersonsmaycontactindividualdirectors,thepresidingmemberofthenon-managementdirectors,non-managementdirectorsasagrouportheBoardasawhole,atanytime.YourcommunicationshouldbesenttotheindividualDirector,the“Non-ManagementMembersoftheBoardofDirectors,”the“PresidingMemberofNon-ManagementDirectors”orthe“BoardofDirectors,”asapplicable,at1600CantrellRoad,LittleRock,Arkansas72201.Ingeneral,
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anycommunicationsdeliveredtotheprincipalexecutiveofficesforforwardingtotheBoardorspecifiedBoardmemberswillbeforwardedinaccordancewithitsinstructions.However,priortothecommunicationsbeingforwardedtotheBoardmember,theCorporateSecretaryreviewscommunicationsandreservestherightnottoforwardtoBoardmembersanyinappropriatematerials.
Corporate Governance Guidelines and Code of Conduct.TheBoardhasadoptedCorporateGovernanceGuidelinesandaCodeofConductthatappliestoallCompanyemployees,includingtheCompany’sexecutiveofficers,andthemembersoftheBoard.ThecurrentversionsofthesecorporategovernancedocumentsareavailablefreeofchargeontheinvestorrelationsportionoftheCompany’swebsiteatwww.dillards.com,andeachisavailableinprinttoanystockholderwhorequestscopiesbycontactingJulieJ.Guymon,DirectorofInvestorRelations,at1600CantrellRoad,LittleRock,Arkansas72201.TheCompanywillpromptlydisclosetoourstockholders,ifrequiredbyapplicablelaws,anyamendmentsto,orwaiversfrom,provisionsoftheCodeofConductthatapplytoourprincipalexecutiveofficer,principalfinancialofficers,principalaccountingofficerorcontroller,orpersonsperformingsimilarfunctions,bypostingsuchinformationonourwebsite(www.dillards.com)ratherthanbyfilingaForm8-K.
Anti-Hedging Policy.DirectorsandAssociates,andtheirdesignees,areprohibitedfrompurchasingfinancialinstruments(includingprepaidvariableforwardcontracts,equityswaps,collarsandexchangefunds),orotherwiseengageintransactions,thathedgeoroffset,oraredesignedtohedgeoroffset,anydecreaseinthemarketvalueoftheCompany’sequitysecurities(a)grantedtotheAssociateorDirectorbytheCompanyaspartofthecompensationoftheAssociateorDirectoror(b)held,directlyorindirectly,bytheDirectororAssociate.
Board Committees.TheBoardhasastandingAuditCommitteeandCompensationCommittee.TheAuditCommitteeandtheCompensationCommitteehaveeachadoptedawrittencharter,bothofwhichareavailableontheinvestorrelationsportionoftheCompany’swebsiteatwww.dillards.com.Inaddition,theBoardhasanExecutiveCommitteethatperformsvariousfunctions,includingthosesimilartoastandingnominatingcommittee.TheExecutiveCommitteemembersareAlexDillardandWilliamDillard,II.
TheAuditCommitteemembersareH.LeeHastings,III,ReynieRutledge,Chairman,andJ.C.Watts,Jr.TheBoardhasdeterminedthatReynieRutledgeisan“auditcommitteefinancialexpert”andthatMessrs.Hastings,RutledgeandWattsareindependentofmanagementinaccordancewiththerequirementsoftheNYSEandtheSECforpurposesofdeterminingauditcommitteeindependence.TheBoardhasalsodeterminedthateachofMessrs.Hastings,RutledgeandWattsis“financiallyliterate”withinthemeaningofthelistingstandardsoftheNYSE.TheAuditCommitteeheldtenmeetingsduringfiscal2019.
TheCompensationCommitteemembersareRobertC.Connor,Chairman,FrankR.MoriandNickWhite.AllmembersoftheCompensationCommitteeareindependentasdefinedbyNYSElistingstandards.InadditionallmembersoftheCompensationCommitteequalifyas“non-employeedirectors”forpurposesofRule16b-3undertheExchangeAct.TheCompensationCommitteeheldthreemeetingsduringfiscal2019.
Board’s Leadership Structure.PursuanttotheCompany’sby-laws,theprincipalexecutiveofficershallbetheChairmanoftheBoard.Accordingly,theBoardhaselectedWilliamDillard,II,theCompany’sCEO,toserveasitsChairman.TheBoardbelievesthatthisstructureisbestsuitedtotheinterestsoftheCompanyandthestockholdersatthistimebecauseitenablesMr.DillardtobepersonallyinvolvedineveryaspectofleadingtheCompany.TheBoardbelievesthatMr.DillardisuniquelyqualifiedtoserveasChairmanbecausehisextensiveexperiencewiththeCompany(over50yearsofservice)provideshimwiththelong-termperspectivethatbuildsstockholdervalueandalignswiththelong-terminterestsofthestockholders.Inthiscapacity,hesetstheBoardagenda,regularlycommunicateswiththeotherBoardmembersandchairsBoardmeetingsandtheAnnualMeeting.
AlexDillard,theCompany’sPresidentandafellowBoardmember,assistsWilliamDillard,IIintheday-to-daysupervisionoftheCompany’sbusiness,whichprovidesothermembersofthemanagementteamreadyaccessto,andthebenefitof,theircombineddeepunderstandingofthecyclesandchallengesoftheretailindustry.ThecloseworkingrelationshipbetweentheCEOandthePresidentalsogivestheBoardandtheCompany’sstockholdersaveteranleadershipteamthatcanaddressissuesquicklyandseamlessly.
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TheCompanyhasnoleadindependentDirector.However,thenon-managementdirectorsdesignateoneoftheindependentdirectorstopresideovertheirexecutivesessions.
Board’s Role in Risk Oversight.WhiletheCompany’smanagementhastheprimaryresponsibilityformanagingrisksfacingtheCompany,theBoardasawholeisactivelyinvolvedinandisresponsiblefortheoversightofriskmanagement,includingthoserisksassociatedwithcybersecurity.OurseniormanagementregularlyengagesinmanagementandoversightofourInformationSecurityprogramsandregularlyupdatesandengagesindiscussionswithourBoardoncybersecurityissues.TheBoard’sprimarygoalistoensurethattheriskmanagementprocessesdesignedandimplementedbytheCompany’smanagementareeffective.
TheAuditCommitteeisresponsibleforoversightofthequalityandintegrityoftheCompany’sfinancialstatementsandinternalcontrolsandcompliancewithlegalandregulatoryrequirementsandreviewstheannualriskassessmentreportpreparedbytheCompany’sinternalauditgroupwhichreportsdirectlytotheAuditCommittee.Basedontheannualriskassessment,theAuditCommitteeischargedwithstudyingorinvestigatinganymatterofinterestorconcernthatitdeemsappropriate.ItalsoreviewsreportsdescribinganyanonymouscallsmadetotheCompany’s“EthicsHotline,”togetherwithanyotherreportsofdisciplinaryorotheractiontakenwithrespecttomaterialbreachesoftheCompany’sCodeofConduct.Initsinvestigatorycapacity,theAuditCommitteehastheauthoritytoretainoutsidelegal,accountingorotheradvisors,includingtheauthoritytoapprovethefeespayabletosuchadvisorsandanyothertermsofretention.TheAuditCommitteeisalsogivenunrestrictedaccesstotheCompany’sinternalauditgroup,otherBoardmembers,executiveofficersandindependentaccountantstotheextentnecessarytocarryoutitsoversightresponsibilities.Whileactinginthiscapacity,theAuditCommitteehasthefullauthorityoftheBoard.
TheCompensationCommitteeisresponsibleforreviewinganyrisksarisingfromtheCompany’scompensationpolicies,particularlywithrespecttotheissueofencouraginginappropriaterisktakingbyexecutivemanagement.Inassessingcompensation-relatedrisks,theCompensationCommitteemayinvestigateanymatterrelatedthereto,isgivenfullaccesstoallbooks,records,facilitiesandpersonneloftheCompanyand,whenappropriate,mayhireoutsidelegal,accountingorotherexpertsoradvisorstoassisttheCompensationCommitteewithitswork.
TheBoard’sadministrationofitsriskoversightfunctionhasnotspecificallyaffectedtheBoard’sleadershipstructure.TheBoardbelievesthatitscurrentleadershipstructureisconduciveto,andappropriatefor,itsoversightofriskmanagement.
2019 Director Compensation
Duringfiscal2019,non-managementDirectorsreceivedanannualcashretainerof $100,000aswellas2,200restrictedsharesoftheCompany’sClassACommonStockvaluedat$126,412onthedateofgrant.Therestrictedsharesvestsixmonthsaftertheirissuance.ThechairmenoftheAuditCommitteeandCompensationCommitteealsoreceivedanadditionalannualcashretainerof $25,000.DirectorswhoarealsoemployeesoftheCompanyarenotseparatelycompensatedfortheirserviceontheBoard.
In2019,theCompensationCommitteeengagedKornFerryasitsindependentcompensationconsultant.KornFerryprovidedtheCommitteewithananalysisofdirectorcompensationattheCompany’speergroupcompaniesforuseindeterminingtheCompany’sdirectorcompensation.UponreviewandconsultationwithKornFerry,theCompensationCommitteedeterminednottomakeanychangestothedirectorcompensationprogram.
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(1)
ThefollowingtablesummarizesthecompensationpaidbytheCompanytonon-managementDirectorsforthefiscalyearendedFebruary1,2020:
Name
Fees Earned or
Paid in Cash ($)
Stock Awards
($)(1)
Option Awards
($)
Non-Equity Incentive
Plan Compensation
($)
Change in Pension Value
and Nonqualified
Deferred Compensation
Earnings ($)
All Other Compensation
($) Total ($) RobertC.Connor $125,000 $126,412 $ — $— $— $— $251,412 FrankR.Mori 100,000 126,412 — — — — 226,412 H.LeeHastings,III 100,000 126,412 — — — — 226,412 ReynieRutledge 125,000 126,412 — — — — 251,412 WarrenA.Stephens 100,000 126,412 — — — — 226,412 J.C.Watts,Jr. 100,000 126,412 — — — — 226,412 NickWhite 100,000 126,412 — — — — 226,412 JamesI.Freeman 100,000 126,412 — — — — 226,412
Theamountsinthe“StockAwards”columnrepresentthegrantdatefairvalueoftheannualstockawardmadeinfiscal2019,computedinaccordancewithFinancialAccountingStandardsBoardAccountingStandardsCodificationTopic718,Compensation — StockCompensation(“FASB ASC Topic 718”),andisequaltothesimpleaveragemarketpriceof2,200sharesonthedateofgrant.AllgrantsofrestrictedshareswerevestedasofFebruary1,2020.
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COMPENSATION DISCUSSION AND ANALYSIS
Introduction
ThisCompensationDiscussionandAnalysis(“CD&A”)providesinformationregardingthecompensationpaidtoourChiefExecutiveOfficer,Co-PrincipalFinancialOfficersandourthreemosthighlycompensatedotherexecutiveofficersinfiscal2019.Theseindividualsarereferredtoas“namedexecutiveofficers”or“NEOs.”Thissectionshouldbereadinconjunctionwiththedetailedtablesandnarrativedescriptionsunderthesectiontitled“ExecutiveCompensation”inthisproxystatement.
Executive Summary
Wearecommittedtoapay-for-performanceculture.ThecompensationprogramisreviewedannuallyinordertoassurethatitsobjectivesandcomponentsarealignedwiththeCompany’sgoalsandcultureandalsothattheprogramincentivizesshort-termandlong-termprofitablegrowth.
ThemaincomponentsofthecompensationstrategyinplaceforourNEOsduringfiscal2019included(1)abasesalary,whichisdeterminedatthediscretionoftheCompensationCommitteebasedonanumberoffactorsandwiththeassistanceofitsindependentcompensationconsultant,(2)anannualcashbonus,whichislimitedtoanamountcalculatedaccordingtotheformulaofthegoverningplanbasedonpre-taxnetincome,(3)anannualstockbonuscalculatedaccordingtotheformulaofthegoverningplanand(4)retirementbenefitspursuanttoapensionplan.Foramorecomprehensiveanalysisofeachoneofthesecompensationarrangements,pleaseseethediscussionthatfollows.
Atthe2017AnnualMeetingofStockholders,inourlaststockholderadvisoryvote,over97%ofthevotescastonexecutivecompensationwerevotedtoapprovethecompensationoftheCompany’snamedexecutiveofficers.Asaresult,theCompensationCommitteedeterminednottomakematerialchangestoourcompensationprogramsduringthefiscalyear.
Compensation Philosophy
Thecoreelementsofourcompensationphilosophyaretoaligneachexecutive’scompensationwiththeCompany’sshort-termandlong-termperformance,promoteapay-for-performancecultureandprovidecompensationandincentivesneededtoattract,retainandmotivatekeyexecutiveswhoarecrucialtotheCompany’slong-termsuccess.Weseektoimplementourphilosophybyfollowingthreekeyprinciples:
Providingcompensationopportunitiesthatareequivalenttothoseofferedbycomparablecompanies,therebyallowingtheCompanytocompeteforandretaintalentedexecutiveswhoarecriticaltoourlong-termsuccess;
MotivatingexecutiveofficersbyrewardingthemforattainmentofCompanyprofitabilityonanannualbasis;and
Aligningtheinterestsofourexecutiveswiththelong-terminterestsofourstockholdersbyawardingequity-basedcompensationandbyofferingparticipationinretirement,stockpurchaseandstockbonusplansthatencouragestockownershipbyourexecutives.
Furtherdetailsconcerninghowweimplementourphilosophy,andhowweapplytheaboveprinciplestoourcompensationprogram,areprovidedthroughoutthisCD&A.
Elements of Compensation
Ourcompensationprogramprimarilyconsistsofthefollowingelements:BaseSalary,AnnualCashPerformanceBonuses,Equity-BasedCompensationAwardsandPensionPlanBenefits.WechoosetopayeachseparateelementwiththeintentofrewardingperformancebelievedtobebeneficialtotheCompanyandaccomplishingspecificpurposes,asdescribedbelow.Withineachelementofcompensation(otherthanthosebasedonapre-establishedformula),theCompensationCommitteeconsidersappropriaterangesfortheamountawardedgiventhelevelofpositionandperformanceoftheindividualandtheCompanyfortheperiodunderconsideration.
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Base Salaryisdesignedto:
Rewardtheproficiencyofourexecutivesrelativetotheirskills,positionandcontributionstothesuccessoftheCompany;and
ProvidealevelofannualcashcompensationcompetitivewiththemarketplacethatrecognizescontributionstotheoverallsuccessoftheCompanyandprovidesthepotentialforannualincreasesreflectingthosecontributions.
Annual Cash Performance Bonusesaredesignedto:
MotivateexecutivestoassistintheattainmentofCompanyprofitabilityonanannualbasis;and
Fosterapay-for-performanceculturethatalignsouroverallcompensationprogramswithourbusinessstrategyandrewardsexecutivesfortheircontributionstowardourgoalofincreasingprofitability.
Equity-Based Compensation Awardsaredesignedto:
Linkcompensationawardstothecreationofstockholdervalue;and
Encourageourexecutivestoworktogetherintheinterestofstockholdersbyassociatingaportionofcompensationwiththelong-termvalueofourcommonstock.
Pension Plan Benefitsaredesignedto:
Providecompetitiveincentivestoourexecutiveofficerstofocusonthelong-termsuccessoftheCompany;and
ProvideasecureretirementafteralongandproductivecareerwiththeCompany.
TheCompensationCommitteebelievesthatthecombinationoftheseelementsprovidesanappropriatemixoffixedandvariablepaywhichbalancesshort-termoperationalperformancewithlong-termstockholdervalue.TheCommitteealsobelievesthatourcompensationprogramenablesustoreinforceourpay-for-performancephilosophyaswellasstrengthenourabilitytoattractandretainhighlyqualifiedexecutivesbyprovidingbenefitsequivalenttothoseofferedbyourleadingcompetitors.
Allocation of Total Direct Compensation
ThetablebelowillustratestheallocationoftotaldirectcompensationforeachNEOinfiscal2019.Basesalary,annualcashperformancebonuses,equity-basedcompensationawardsandothercompensation(consistingofperquisites,insurancepremiumsandretirementplancontributions)compriseeachNEO’stotaldirectcompensation.Totaldirectcompensationisdifferentfromthe“TotalCompensation”columnoftheSummaryCompensationTableappearingonpage25inthatitexcludeschangesinpensionvalue.WedisclosetheallocationoftotaldirectcompensationtoprovideinsightintotheCompensationCommittee’sdecision-makingprocesswhenestablishingNEOcompensation.TheCompensationCommitteedoesnotconsiderchangesinpensionvaluewhenestablishingNEOcompensationbecausepensionamountsareearnedeachyearbasedonapre-establishedformulasetforthintheCompany’spensionplanrelatingtocompensationpreviouslyreceivedbyanNEOandtheNEOdoesnotreceivetheamountuntilafterretirementfromtheCompany.Further,pensionvaluescanfluctuatewidelyyear-to-yearduetochangesindiscountrates,whichareoutsideoftheCompany’sandexecutive’scontrol.Assuch,theseamountsareexcludedfromthetablebelow.
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Asshowninthetablebelow,theCompensationCommitteedeterminedthataslightlyhigherportionoftotaldirectcompensationpaidtoMessrs.WilliamDillard,IIandAlexDillard,ourChiefExecutiveOfficerandPresident,respectively,shouldbeperformancebased,thanthatoftheotherNEOs,giventheirabilitytoaffectstockholdervaluerelativetotheotherNEOs.
Allocation of Total Direct Compensation
NEOBase
Salary
Annual Cash
Performance Bonuses
Equity-Based Compensation
AwardsOther
CompensationWilliamDillard,IIChiefExecutiveOfficer
55.5 30.2 6.1 8.2
AlexDillard,President
55.2 30.0 6.0 8.8
MikeDillard,ExecutiveVicePresident
64.2 21.9 5.8 8.1
DrueMatheny,ExecutiveVicePresident
65.5 22.4 5.9 6.2
ChrisB.Johnson,Senior Vice President and Co-Principal FinancialOfficer
73.5 10.7 5.3 10.5
PhillipR.Watts,Senior Vice President, Co-Principal Financial OfficerandPrincipalAccountingOfficer
75.0 10.9 5.4 8.7
How We Determine Compensation
Role of the Compensation Committee.TheCompensationCommitteehasresponsibilityforestablishing,implementingandmonitoringadherencetoourcompensationphilosophy.Incarryingoutthisfunction,thecommitteestrivestoensurethattotalcompensationpaidtonamedexecutiveofficersisfair,reasonableandcompetitive.
TheCompensationCommitteeregularlyreviewsandevaluatesourcompensationprogramtoensurethatit:
Promotesourabilitytoattractandretainqualifiedmanagementpersonnelbyprovidingcompensationthatiscompetitiverelativetothatpaidbyourcompetitors.Tothisend,theCompensationCommitteeregularlyreviewsandevaluatescompensationpackagesandamountspaidbyourprimarycompetitorsandotherfamily-foundedandfamily-managedcompanies.
Fostersapay-for-performancecultureprovidingexecutiveswiththeopportunitytoincreasetheirlevelofoverallcompensationbasedonthefinancialperformanceoftheCompany.Tothisend,theCompensationCommitteeregularlyreviewsandevaluatesindividualperformancetoensurethatournamedexecutiveofficersarerewardedfortheircontributionstoCompanygoalsandstockholdervalue.
Theseevaluations,alongwiththeindependentjudgmentexercisedbymembersoftheCompensationCommittee,guidestheCompensationCommittee’sdecisionsinstructuringcompensationelements,determiningcompensationamounts,allocatingbetweenlong-termandcurrentlypaidcompensationandallocatingbetweencashandnon-cashamounts.TheCompensationCommitteealsotakesintoaccounthowcompetitivepressuresandeconomicconditionsoverwhichournamedexecutiveofficersmayhavelittleornocontrolcanhaveanegativeimpactontheCompany’sfinancialperformance.
Role of Compensation Consultant in Compensation Decisions.Duringtheyear,inaccordancewiththeCompensationCommittee’sinstructions,KornFerry,theCompensationCommittee’sindependentconsultant,providedtheCompensationCommitteewithananalysisofNEOcompensationattheCompany’speergroupcompanies,aswellasinformationontrendsandbestpracticesinexecutivecompensation.Inaddition,
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KornFerryprovidedtheCompensationCommitteewithananalysisofdirectorcompensationattheCompany’speergroupcompanies.KornFerrydidnotperformanyotherservicesfortheCompanyoritsaffiliatesotherthantoprovideadviceandcounseltotheCompensationCommitteeonnamedexecutiveofficersanddirectorcompensationinaccordancewiththeCompensationCommittee’sinstructionsfromtimetotime.TheCompensationCommitteehasassessedtheindependenceofKornFerrypursuanttotheapplicablerulesanddeterminedthatitsengagementdoesnotraiseanyconflictofinterest.
Role of Named Executive Officers in Compensation Decisions.OurChiefExecutiveOfficer,PresidentandCo-PrincipalFinancialOfficereachprovideinputtotheCompensationCommitteeregardingCompanyandindividualperformance.However,theCompensationCommitteeexercisescompletediscretioninmakingallcompensationdecisionsregardingcashcompensation,equityawardsandotherbenefitsforallofournamedexecutiveofficers.
Role of Comparable Company Analysis in our Compensation Decisions.Inordertodevelopacompetitivecompensationpackageforournamedexecutiveofficers,theCompensationCommitteecomparesourcompensationpackagewiththoseofacomparisongroupofpubliccompanies.Thecomparisongroupincludesdepartmentstores,specialtystoresaswellascompaniesthatwerefamily-foundedandcontinuetobefamily-managed.Acompletelistingofthecompaniesinthecomparisongroupappearsbelow:
Abercrombie&FitchCo.Chico’sFAS,Inc.TheChildren’sPlaceRetailStores,Inc.J.C.PenneyCompany,Inc.Macy’s,Inc.
S&PGlobal,Inc.TailoredBrands,Inc.Nordstrom,Inc.ShoeCarnival,Inc.StarbucksCorporation
TheGap,Inc.TheTJXCompanies,Inc.Tiffany&Co.WilliamsSonoma,Inc.SteinMart,Inc.
Forfiscal2019,theCompensationCommitteedeterminedtoremoveTheBon-TonStores,Inc.fromthepeergroupfollowingthecompany’sbankruptcy.TheCompensationCommitteebelievescompaniesinthecomparisongrouparecomparabletotheCompanyinoperations,managementstyleandculture.However,thenumberofseniorexecutivesretainedbytheCompanyisgenerallylowerthanthenumberofseniorexecutivesatothercompaniesinthecomparisongroup,whichwebelieveplacesourexecutivemanagementcloserinthechainofcommandtoassociatesforwhomtheyareresponsible.Thebenefitofourstructureisthatweareabletoeffectivelymanageourassociateswithoutunnecessarylayersofintermediatemanagers.TheCompensationCommitteebelievesthisapproachincreasesthedemandsuponthenamedexecutiveofficers’timeandrequiresagreaterdepthofknowledgeofoperationsthanthatoftheirpeersinthecomparisongroup.Accordingly,theCompensationCommitteebelievesthatournamedexecutiveofficers’compensationshouldreflectthisincreasedresponsibility.
Whilewedonotspecificallybenchmarkourcompensationagainstcompaniesinthecomparisongroup,ourCompensationCommitteeannuallyperformsacompensationanalysisofthecompensationpaidbythesecompaniesandperiodicallysurveysthecompensationpracticesofthesecompaniestoassessourcompetitiveness.ThisinformationisusedaspartoftheCompensationCommittee’sconsiderationsinsettingcompensationforournamedexecutiveofficers,particularlyinrespectofchangesinbasesalaryeachyearasdiscussedbelow.Inreviewingthisdata,theCompensationCommitteeconsidersfactorssuchastherelativefinancialperformanceofsuchcompanies,aswellascertainotherfactorstheCommitteebelievesdifferentiateusfromthosecompanies — particularlyourhomogenous,unifiedbusinessplanofoperatingvirtuallyidenticaldepartmentstoresprimarilyinthesouthwest,southeast,andmidwestregionsoftheUnitedStates,whichwebelieveallowsformorestreamlined,cohesiveoperationsandourflattermanagementstructure.
Stockholder Advisory Vote.OurCompensationCommitteerecognizesthefundamentalinterestourstockholdershaveinthecompensationofourexecutiveofficers.Atthe2017AnnualMeetingofStockholders,over97%ofthesharespresentandentitledtovoteontheadvisoryresolutiononexecutivecompensationwerevotedtoapprovethecompensationoftheCompany’snamedexecutiveofficers.Basedupontheresultsofsuchadvisoryvoteandourreviewofourcompensationpoliciesanddecisions,webelievethatourexistingcompensationpoliciesanddecisionsareconsistentwithourcompensationphilosophyandobjectivesdiscussedaboveandadequatelyaligntheinterestsofournamedexecutiveofficerswiththeinterestsofourstockholders.Atthe2017AnnualMeetingofStockholders,ourstockholdersalsovoted,onanadvisorybasis,
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toholdanadvisoryvoteonthecompensationofournamedexecutiveofficerseverythreeyears.Inlightofsuchvote,onMay20,2017,theBoardofDirectorsoftheCompanydeterminedthattheCompanywouldincludetheadvisoryvoteonthecompensationofournamedexecutiveofficerseverythreeyearsuntilthenextrequiredfrequencyvote.Accordingly,thenextstockholderadvisoryvoteapprovingexecutivecompensationwilltakeplaceatthisyear’sAnnualMeeting(seeProposal3onpage32ofthisproxystatement),whilethenextadvisoryvoteonthefrequencyoftheadvisoryvoteapprovingourexecutivecompensationwilltakeplaceattheCompany’s2023AnnualMeetingofStockholders.
Specific Elements of Our Compensation Program
Base Salary
BasesalariesareprovidedtoournamedexecutiveofficersatlevelsestablishedbytheCompensationCommitteeonanannualbasis.BasesalariesaresetatthediscretionoftheCompensationCommitteeand,unliketheannualcashperformancebonusesandequity-basedcompensationawards,arenotspecificallyrelatedtoanyCompanyperformancecriteria.Eachyear,theCompensationCommitteereviewsacompetitivemarketanalysisofsalariespaidbycompaniesinthecomparisongrouptoensurethatbasesalariespaidtoournamedexecutiveofficersarecompetitive.Thecommitteealsoconsiders:
thenamedexecutiveofficer’saggregatecompensationandbenefits;
thenamedexecutiveofficer’slevelofresponsibilityandexperience;and
thenamedexecutiveofficer’ssuccessinachievingbusinessresults,promotingourcorevaluesanddemonstratingleadership,aswellasCompany-wideperformance.
TheCompensationCommitteeseteachnamedexecutiveofficer’sbasesalaryasfollows:
NEO Base SalaryFiscal 2019 Fiscal 2018 % Increase
WilliamDillard,II $1,070,000 $1,035,000 3.4 AlexDillard 1,070,000 1,035,000 3.4 MikeDillard 765,000 750,000 2.0 DrueMatheny 765,000 750,000 2.0 ChrisB.Johnson 550,000 525,000 4.8 PhillipR.Watts 550,000 525,000 4.8
TheCompensationCommitteeassignedhigherbasesalaryamountstoMessrs.WilliamDillard,IIandAlexDillardtoreflecttheirlevelofresponsibilityandexperience,theimportanceoftheirrespectivepositionswithintheCompanyandtheirabilitytoaffectstockholdervaluerelativetootherNEOs.However,thebasesalariesofWilliamDillard,IIandAlexDillardarebelowthemedianbasesalariesoftheexecutiveofficersforthecomparisongroupofretailerslistedabove.
Annual Cash Performance Bonuses
OurcompensationprogramincludesannualperformancebonusespayableunderourSeniorManagementCashBonusPlan(the“Cash Bonus Plan”).AnnualcashbonusesaredesignedtorewardexecutiveofficersbasedontheCompany’sperformanceandtheindividualexecutive’scontributiontothatperformance.UnderthetermsoftheCashBonusPlan,performancebonusesmaybepaidonlyiftheCompanyrealizespositivenetincomebeforefederalandstateincometaxesforthefiscalyear,whichwerefertoaspre-taxnetincome.TheCompensationCommitteebelievesthatpre-taxnetincomeisameaningfulmeasureoffinancialandoperationalperformanceandthatrequiringaparticularleveloffinancialandoperationalperformancebeforecashbonusesareearnedbyexecutiveofficersfurtherstheCompany’sgoaloflinkingpaytoperformance.Noindividual’sbonusundertheCashBonusPlancanexceed1%oftheCompany’spre-taxnetincome.
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UndertheCompany’sCashBonusPlan,personswhooccupythefollowingpositionsareeligibletoreceivebonuses:
ChiefExecutiveOfficer;
President;
ExecutiveVicePresidents;and
SeniorVicePresidents.
Fromthisgroupofpersons,theCompensationCommittee,initssolediscretion,designatesthoseindividualseligibletoreceiveaperformancebonusundertheCashBonusPlan.Inmakingitsdeterminations,theCompensationCommitteeconsidersrecommendationsofseniormanagementandthecontributionofeachexecutiveofficertotheCompany’sperformance.
WhentheCompensationCommitteedesignatestheindividualseligibletoparticipateintheCashBonusPlan,italsodesignatesthemaximumpercentageofthebonuspooleachindividualwillbeentitledtoreceive.TheCompensationCommitteeassignsapercentageofthebonuspooltoeachparticipant,takingintoconsiderationtheindividual’slevelofresponsibilityforbothoperatingresultsandmanagementoftheorganization.Theassignedpercentagecanvaryfromyeartoyear.Theyear-endamountofanindividual’sbonusismathematicallydeterminedbyapplyingthispercentagetothebonuspool.
BonusesarepaidundertheCashBonusPlanattheconclusionofthefiscalyearfromabonuspool,whichisequaltothesumof (x)1 ∕2%oftheCompany’spre-taxnetincomeforthefiscalyear,plus(y)3 ∕2%oftheincreaseinpre-taxnetincomeoverthepriorfiscalyear.Ourpre-taxnetincomewas$133,890,300infiscal2019and$207,993,000infiscal2018foradecreaseinpre-taxnetincomeof $74,102,700.Thisresultedinatotalavailablebonuspoolof $2,008,350forfiscal2019(1 ∕2%ofpre-taxnetincomeinfiscal2019).
Thefollowingtablesetsforthforeachnamedexecutiveofficersuchofficer’s:(1)assignedpercentallocationofthefiscal2019bonuspooland(2)actualbonustobepaidundertheCashBonusPlanforfiscal2019:
NEO
Assigned Percent Allocation of the Fiscal
2019 Bonus Pool
Cash Bonus to be Paid for Fiscal 2019 under
Cash Bonus Plan WilliamDillard,II 29 $ 582,400 AlexDillard 29 $ 582,400 MikeDillard 13 $ 261,100 DrueMatheny 13 $ 261,100 ChrisB.Johnson 4 $ 80,300 PhillipR.Watts 4 $ 80,300
TheCompensationCommitteeassignedhigherpercentageamountstoMessrs.WilliamDillard,IIandAlexDillardtoreflecttheirlevelofresponsibilityandabilitytoaffectstockholdervaluerelativetootherNEOs.Theremaining8%ofthebonuspoolnotshowninthetablewasallocatedtoothermembersofseniormanagement.
TheCompensationCommitteeretainsthediscretiontoreduceoreliminateanybonusesthatmightotherwisebedueunderthetermsoftheCashBonusPlan.Inmakingthisdetermination,theCompensationCommitteemayconsiderfactorswhicharemoreindividualizedtospecificcircumstancesthatwereunforeseenatthetimetheoriginalallocationsweremade.TheCompensationCommitteealsoreservestherighttoawardsmallerornobonusesinordertoconservecashforoperationsorforotherbusinessopportunitiesthatcouldeitherpreserveorenhancestockholdervalue.TheCompensationCommitteecannot,however,increasetheamountspayableundertheCashBonusPlan.TheCompensationCommitteemadenoadjustmentstothebonusestobepaidundertheCashBonusPlanforfiscal2019.
Equity-Based Compensation
Webelieveequityownershipisessentialinlinkinganexecutiveofficer’scompensationtotheperformanceofourCommonStockandtotalstockholderreturn.Wealsobelieveequityownershipisanimportanttool
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increatingincentiveforsustainedgrowth.Assuch,infiscal2019ournamedexecutiveofficersreceivedequity-basedcompensationthrougheachofthefollowingplans(eachofwhichisdiscussedbelow):theDillard’s,Inc.StockBonusPlan(the“Stock Bonus Plan”),aqualifieddefinedcontributionretirementplan(the“Retirement Plan”)andtheDillard’s,Inc.StockPurchasePlan(the“Stock Purchase Plan”).Equity-basedcompensationawardedundertheseplansisgenerallyestablishedbyapredeterminedformulasetforthineachplanthatistieddirectlytotheaggregateamountofcashcompensation(salaryandcashbonus)paidtoanindividual.
Stock Bonus Plan.TheformulaundertheStockBonusPlanprovidesforanannualstockawardequalto6%ofeachnamedexecutiveofficer’sannualtotalcashcompensationinexcessof $15,000(lessapplicablewithholding)dividedbythecurrentfairmarketvaluepershareonthedatethatthestockbonusisgranted.Thestockawardshavenovestingrequirements.TheCompensationCommitteehasthediscretiontoalterawardspayableundertheStockBonusPlanbutmadenoadjustmentstoawardsgrantedinfiscal2019.
Retirement Plan.TheRetirementPlanpermitsexecutivestomakeelectivecontributionstotheRetirementPlanofuptothelesserof $19,000($25,000iftheexecutiveisatleast50yearsold)or75%ofeligiblepay.Companymatchingcontributionsarecalculatedontheeligibleexecutive’sfirst6%ofelectivedeferralswiththefirst1%beingmatched100%andthenext5%beingmatched50%.AllcontributionsareusedtopurchaseClassACommonStockatmarketprices.
Stock Purchase Plan.TheStockPurchasePlanallowsexecutivestomakecontributionsonlytotheextenttheywerepreventedfromcontributingtotheRetirementPlanbecauseofnondiscriminationrulesanddollarlimitationsoftheInternalRevenueCode.Companymatchingcontributionsarecalculatedontheeligibleexecutive’sfirst5%ofelectivedeferralsandarematched100%.AllcontributionstotheStockPurchasePlanareusedtopurchaseClassACommonStockatmarketprices.
Pension Plan
Wemaintainanon-qualifieddefinedbenefitpensionplan(the“Pension Plan”)forournamedexecutiveofficers.ThePensionPlanprovidesanannualawardfollowingretirementbaseduponthelevelofeachofficer’ssalaryandcashbonusduringtheofficer’stenure,aswellasthetotalyearsofserviceprovidedtotheCompany.Specifically,theawardiscalculatedbymultiplyingeachofficer’syearsofserviceby1 ∕2%andmultiplyingtheresultbytheaverageofthehighestthreeyearsofeachofficer’s“pensionearnings”.PensionearningsaredefinedastotalsalarypluscashbonuspaidduringthefiscalyearminusthemaximumSocialSecuritywagebaseinthatyear.RetirementisconsideredNormalRetirementiftheindividualhasmettheservicerequirementsandhasreached65yearsofage.PersonsareeligibleforEarlyRetirementiftheindividualhasmettheservicerequirementsandhasreached55yearsofage.
ForpersonseligibleforEarlyRetirement,butnotyeteligibleforNormalRetirement,thereisa2 ∕2%reductionintheamountofannualpensionbenefitforeachyearorpartialyearbetweentheperson’s65 birthdayandtheperson’sattainedageonthedateofretirement.Duringfiscal2019,PhillipWattswastheonlyNEOthatmettherequirementsforEarlyRetirementandhadnotreachedtheageforNormalRetirementasdefinedbythePensionPlan.
ThePensionPlanprovidesthat,intheeventofachangeincontroloftheCompany(asdefinedinthePensionPlan),thepresentvalueoftheannualpensionbenefitdeterminedasofthedateofthechangeincontrolwillbepaidinalumpsumwithin60days.AllemployeeswithabenefitaccruedunderthePensionPlanuptothedateofthechangeincontrolareeligibleforalumpsumpaymentandnofurtherbenefitswouldbepaidfromthePensionPlan.TheCompanybelievesthisfeatureisimportantinrecruitingandretainingqualifiedexecutivemanagementpersonnelbecause:
Itprovidesforstableretirementplanning;
Itreducesflightriskgenerallyassociatedwiththeinherentuncertaintiessurroundingachangeincontrol(thatinsomecasesmightleadsomeofficerstoretireprematurelyorleavetheCompany);and
Itisconsistentwithprovisionscontainedinsimilarplansmaintainedbyothercompanies.
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Additionalinformationaboutsuchlumpsumpayments,includinghowthepresentvaluewouldbedeterminedandtheestimatedlumpsumpensionbenefitsthateachnamedexecutiveofficerwouldhavereceivedifachangeincontrolweretohaveoccurredonthelastbusinessdayoffiscal2019isprovidedbelowunder“PotentialPaymentsUponTerminationorChangeinControl.”
Other Benefits
Health Insurance.Weprovideanenhancedhealthinsuranceplantoournamedexecutiveofficers.Thisplanassistsournamedexecutiveofficersinmaintainingtheirphysicalwell-beingsothattheyareabletodevotetheirenergiestothemanagementoftheCompany.
Company Aircraft.OurnamedexecutiveofficersareallowedaccesstoCompany-ownedaircraftforpersonaluseaswellasbusinessflights.Thisbenefitincreasesthelevelofsafetyandsecurityforthenamedexecutiveofficersandallowsthemtomakebetteruseoftheirtimebybeingabletotravelmoreefficiently.TheCompanyreportsimputedincometoanexecutiveofficerforincometaxpurposesforthevalueofanypersonalusebasedupontheStandardIndustryFareLevel(SIFL)inaccordancewiththeInternalRevenueCodeandTreasuryRegulations.ForpurposesoftheSummaryCompensationTablebelow,theCompanyreportscompensationfortheNEOsbasedontheincrementalcostforflightsconstitutingpersonaluse.AsdisclosedintheSummaryCompensationTableinthisproxystatement,onlyMessrs.WilliamDillard,II,AlexDillardandMikeDillardhadpersonaluseofCompanyaircraftforfiscalyear2019.
Tax Deductibility of Executive Compensation
Section162(m)oftheInternalRevenueCodegenerallydisallowsanincometaxdeductiontopublicly-heldcorporationsforcompensationinexcessof $1,000,000paidforanyfiscalyeartothecorporation’schiefexecutiveofficer,toanyofitsotherthreemosthighlycompensatedexecutiveofficers,ortotheco-principalfinancialofficers.Forcompensationpaidpriorto2018andcertain“grandfathered”arrangementsinplacepriortoNovember2,2017,thestatuteexemptedqualifyingperformance-basedcompensationfromthe$1millionlimitationifspecifiedrequirementsaremet.However,theperformance-basedcompensationexemptionhasbeenrepealed,effectivefortaxableyearsbeginningafterDecember31,2017,suchthatfuturecompensationpaidtoournamedexecutiveofficers,includingtheco-principalfinancialofficers,inexcessof $1,000,000willnotbedeductibleunlessitqualifiesfortransitionreliefapplicabletocertainarrangementsinplaceasofNovember2,2017.TheCompensationCommitteehashistoricallystructuredexecutivecompensationinordertopreserveitsdeductibilityunderSection162(m)totheextentpractical.TheCompensationCommitteecontinuestoreservetheright,however,tograntorapprovecompensationorawardsthatmaynotbedeductiblewhenitbelievessuchcompensationorawardsareinthebestinterestsoftheCompanyanditsstockholdersorarenecessarytoassurecompetitivetotalcompensationforournamedexecutiveofficers.
Other Compensation Considerations
Severance and Change in Control Arrangements.Wehavenotenteredintoagreementsorarrangementstoprovideseveranceorchangeincontrolpaymentstoanyofourexecutives,otherthanwithrespecttothePensionPlanasdescribedabove.Ourpastpracticehasnotincludedthepaymentofseverancetoanyexecutives.
Compensation Recovery Policy.TheCompensationCommitteedoesnotpresentlyhaveaspecificpolicyseekingreimbursementofcompensationawardsbutwilladoptonewhentheNYSEadoptsrulesrequiringsuchapolicyasmandatedundertheDodd-FrankWallStreetReformandConsumerProtectionActof2010.Untilthen,theCommitteewillevaluateonacasebycasebasiswhethertoseekthereimbursementofcertaincompensationawardspaidtoanamedexecutiveofficerifsuchexecutiveengagesinmaterialmisconductthatcaused,orpartiallycaused,arestatementoffinancialresults.Ifitshouldeveroccur,whenmakingthisdetermination,theCompensationCommitteewilllikelyconsiderthetotalityofthecircumstancessurroundingthemisconduct,includingtheintentoftheofficerinengaginginthemisconductandtheexpensethattheCompanymightincurseekingreimbursementascomparedtotheamountofreimbursement,andwhethertherewereadditionalofficersinvolvedand,ifso,theroleplayedbytheindividualinthemisconduct.
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Compensation Policies and Practices and Risk Management.TheCompensationCommitteetakesriskintoconsiderationwhenreviewingandapprovingnamedexecutiveofficercompensationandbelievesthatthecompositionoftotalcompensationshouldnotencourageinappropriateorexcessiverisk-taking.TheCompanymonitorstheriskassociatedwithitscompensationprogramforallemployees,includingNEOs,thecomponentsofitscompensationprogramandindividualcompensationdecisions,onanongoingbasis.Thisongoingassessmentincludes(1)considerationoftheprimarydesignfeaturesoftheCompany’scompensationplansandtheprocesstodetermineincentivecompensationeligibilityandgrantawardsforemployeesand(2)analysisofhowthosefeaturescouldencourageormitigaterisk-taking.TheCompanybelievesthatitscompensationpoliciesandpracticesforallemployees,includingNEOs,donotcreaterisksthatarereasonablylikelytohaveamaterialadverseeffectontheCompany.
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COMPENSATION COMMITTEE REPORT
TheCompensationCommitteehasreviewedanddiscussedwithmanagementtheaboveCompensationDiscussionandAnalysis.Basedontheirreviewanddiscussions,theCompensationCommitteerecommendedtotheBoardofDirectorsthattheCompensationDiscussionandAnalysisbeincludedinthisproxystatementandintheCompany’sAnnualReportonForm10-KfortheyearendedFebruary1,2020.
TheCompensationCommitteeoftheBoardofDirectors
RobertC.Connor,ChairmanFrankR.MoriNickWhite
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EXECUTIVE COMPENSATION
Thefollowingtablesummarizesthecompensationearnedbyorpaidtoournamedexecutiveofficersduringfiscalyears2019,2018and2017.
Summary Compensation Table
Name and Principal Position YearSalary
($)Bonus
($)
Stock Awards
($)Option
Awards($)
Non-Equity Incentive Plan Compensation
($)
Change in Pension
Value and Nonqualified
Deferred Compensation Earnings($)
All Other Compensation
($)
Total Compensation
($) WilliamDillard,IIChiefExecutiveOfficer
2019 $1,070,000 $ — $117,346 $— $ 582,400 $ — $ 158,522 $ 1,928,268 2018 1,035,000 — 116,686 — 904,800 1,016,491 212,779 3,285,756 2017 1,000,000 — 126,366 — 928,800 2,537,233 196,106 4,788,505
AlexDillardPresident
2019
1,070,000
—
117,346
— 582,400
5,820,037
171,701
7,761,484
2018 1,035,000 — 116,686 — 904,800 224,742 226,613 2,507,841 2017 1,000,000 — 126,366 — 928,800 1,996,585 178,754 4,230,505
MikeDillardExecutiveVicePresident
2019
765,000
—
69,226
— 261,100
3,086,234
95,797
4,277,357
2018 750,000 — 68,980 — 405,500 16,885 83,089 1,324,454 2017 735,000 — 73,353 — 416,400 957,639 105,589 2,287,981
DrueMathenyExecutiveVicePresident
2019
765,000
—
69,226
— 261,100
2,866,608
72,199
4,034,133
2018 750,000 — 68,980 — 405,500 220,369 66,807 1,511,656 2017 735,000 — 73,353 — 416,400 1,242,668 78,633 2,546,054
ChrisB.JohnsonSeniorVicePresidentandCo-PrincipalFinancialOfficer
2019
550,000
—
39,415
— 80,300
503,142
78,515
1,251,372
2018 525,000 — 38,113 — 124,800 24,372 61,052 773,337 2017 500,000 — 38,376 — 128,100 220,156 82,744 969,376
PhillipR.WattsSeniorVicePresident,Co-PrincipalFinancialOfficerandPrincipalAccountingOfficer
2019
550,000
—
39,415
— 80,300
873,568
63,965
1,607,248
2018 525,000 — 38,113 — 124,800 45,713 52,582 786,208 2017 500,000 — 38,376 — 128,100 606,557 68,693 1,341,726
ReflectsstockawardsundertheCompany’sStockBonusPlan.TheamountreportedinthiscolumnforeachNEOreflectsthefairvalueonthedateofgrant,asdeterminedunderFASBASCTopic718.ThegrantdatefairvalueofthestockawardsiscalculatedbasedontheaveragepriceoftheCompany’sClassACommonStockontheNYSEonthedateofgrant.ReflectsamountsearnedbyNEOsundertheCompany’sCashBonusPlan.Theseamounts,ifany,representtheactuarialincreaseinthepresentvalueoftheNEO’sbenefitsundertheCompany’sPensionPlandeterminedusinginterestrateandmortalityrateassumptionsconsistentwiththoseusedintheCompany’sfinancialstatements.Interestrateassumptionchangeshaveasignificantimpactonthepensionvalueswithperiodsoflowerinterestrateshavingtheeffectofincreasingtheactuarialvaluesreportedandviceversa.Thepresentvalueofaccumulatedbenefitsforfiscal2019reflectsadiscountrateof2.8%andgenerationalmortalityratesunderthePri-2012tableusingscaleMP-2019comparedtothe4.0%discountrateandgenerationalmortalityratesundertheRP-2014tableusingscaleMP-2018applicableforfiscal2018.Thisdiscountratechangewastheresultofactuarialadjustmentsbasedonchangesincorporatebondrates.TheCompanydoesnotpay“abovemarket”interestonnon-qualifieddeferredcompensationtoemployees.
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Forfiscal2019,allothercompensationreflectsmatchingcontributionsundertheCompany’sRetirementPlanandStockPurchasePlan,theincrementalcosttotheCompanyforpersonaluseofCompanyaircraft,andpremiumspaidforhealthinsurance,eachasdetailedinthetablebelow:
All Other CompensationCompany Contributions
under Retirement Plan and Stock Purchase Plan
Airplane Use
Insurance Premiums Paid by the Company Total
WilliamDillard,II $ 94,358 $29,617 $ 34,547 $158,522 AlexDillard 94,358 42,796 34,547 171,701 MikeDillard 54,239 7,011 34,547 95,797 DrueMatheny 54,239 — 17,960 72,199 ChrisB.Johnson 28,746 — 49,769 78,515 PhillipR.Watts 29,418 — 34,547 63,965
Theamountsreportedinthiscolumnreflectcompensationforthenamedexecutiveofficersbasedontheaggregateincrementalcostforflightsconstitutingpersonaluse.SuchincrementalcostiscalculatedonthebasisoftheadditionalvariableoperatingcoststotheCompany,includingfuelcosts,mileage,trip-relatedmaintenanceandothermiscellaneousvariablecosts,resultingfromsuchpersonaluse.Fixedcosts,whichdonotchangebasedonusage,suchasaircraftpurchasecosts,pilotsalariesandthecostofmaintenancenotrelatedtospecifictrips,areexcludedfromthecalculationofincrementalcost.
2019 Grants of Plan-Based Awards
ThetablebelowsetsforththeawardsgrantedtotheNEOsduringfiscal2019pursuanttotheCashBonusPlanandtheStockBonusPlan:
All Other Stock
Awards
All Other Option Awards: Grant Date
Fair Value of Stock
and Option Awards
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Estimated Future Payouts Under Equity Incentive Plan Awards
Number of Shares of Stock or
Units
Number of Securities
Underlying Options
Exercise or Base Price of Options
Awards
Name Grant Date Threshold
($) Target
($) Maximum
($) Threshold
(#)Target
(#)Maximum
(#) (#) (#) ($/Sh) ($)
WilliamDillard,II January31,2020 1,836 $117,346 February26,2020 $582,400 $1,338,903
AlexDillard January31,2020 1,836 117,346 February26,2020 582,400 1,338,903
MikeDillard January31,2020 1,083 69,226 February26,2020 261,100 1,338,903
DrueMatheny January31,2020 1,083 69,226 February26,2020 261,100 1,338,903
ChrisB.Johnson January31,2020 617 39,415 February26,2020 80,300 1,338,903
PhillipR.Watts January31,2020 617 39,415 February26,2020 80,300 1,338,903
RepresentsawardsundertheCompany’sCashBonusPlan.Asdescribedin“CompensationDiscussionandAnalysis,”ExecutiveOfficersparticipatingintheCashBonusPlanreceiveapre-determinedshareofabonuspoolgeneratedbycertainCompany-basedperformancemetrics.TherearenothresholdortargetamountsundertheCashBonusPlan.Becausetheplandoesnotsetsuchamountsandbecause
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(a)
(1) (2)(3)(4)
(2)
(3)
(4)
(1)
futurepayoutsrelatingtoanNEO’spercentageshareofthebonuspoolarenotdeterminable,theamountsinthiscolumnrepresenttheactualpaymentstobemadetothenamedexecutiveofficersunderawardsgrantedforfiscal2019.RepresentsthemaximumthatanyindividualcanreceiveundertheCashBonusPlan,whichis1%oftheCompany’spre-taxnetincomeforfiscal2019.ReflectsamountsgrantedtotheNEOsinfiscal2019undertheCompany’sStockBonusPlan.FormoredetailedinformationontheStockBonusPlan,includingageneraldescriptionoftheprocedureandformulautilizedbytheCompanyindeterminingtheamountsgranted,seethediscussionintheEquity-BasedCompensationportionof “CompensationDiscussionandAnalysis.”Reflectsnumberofsharesofstockgrantedbeforewithholdingapplicablefederalandstateincometax.Thestockgrantawardsreflectedinthetablearenotsubjecttovesting.
Outstanding Equity Awards at 2019 Fiscal Year-End
TherewerenooutstandingstockoptionsorunvestedstockawardsheldbytheNEOsasofFebruary1,2020.
2019 Option Exercises and Stock Vested
Thetablebelowsetsforththenumberofsharesacquiredandthevaluerealizeduponexerciseofstockoptionsandvestingofstockawardsduringfiscal2019byeachoftheNEOs.
Option Awards Stock Awards
Name
Number of Shares Acquired on Exercise (#)
Value Realized on Exercise
($)
Number of Shares Acquired on Vesting (#)
Value Realized on Vesting ($)
WilliamDillard,II — — 1,836 $ 117,346 AlexDillard — — 1,836 117,346 MikeDillard — — 1,083 69,226 DrueMatheny — — 1,083 69,226 ChrisB.Johnson — — 617 39,415 PhillipR.Watts — — 617 39,415
ThenumberofsharesreflectedasunderlyingStockAwardsinthetablerepresentgrantsduringfiscal2019ofstockawardspursuanttotheCompany’sStockBonusPlan.Theseawardsarenotsubjecttovestingand,accordingly,aretreatedinthistableashaving“vested”upongrant.Theamountsreflectedas“ValueRealizedonVesting”representthemarketvalueofthesharesonthedateofgrantanddonotreflectthewithholdingofaportionofthesharestosatisfyincometaxpaymentrequirements.
2019 Pension Benefits
ThefollowingtabledisclosestheactuarialpresentvalueofaccumulatedpensionbenefitsandotherinformationasofFebruary1,2020fortheNEOsunderthePensionPlan.
Name Plan Name
Number of Years
Credited Service (#)
Present Value of Accumulated
Benefit($)
Payments During
Last Fiscal Year ($)
WilliamDillard,II PensionPlan 51 $ 21,987,567 $— AlexDillard PensionPlan 48 27,462,252 — MikeDillard PensionPlan 48 13,093,176 — DrueMatheny PensionPlan 51 18,028,930 — ChrisB.Johnson PensionPlan 13 1,279,941 — PhillipR.Watts PensionPlan 25 3,199,567 —
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(1)
(1)
(1)
ThecalculationofbenefitsunderthePensionPlanisdiscussedinthePensionPlanportionof“CompensationDiscussionandAnalysis.”ThemethodologyandmaterialassumptionsusedinquantifyingthepresentvalueoftheaccumulatedbenefitaredisclosedinNote8totheauditedfinancialstatementsfiledintheCompany’sAnnualReportonForm10-KforthefiscalyearendedFebruary1,2020.
Potential Payments Upon Termination or Change in Control
ThePensionPlanprovidesforalumpsumpaymenttoparticipantswithin60daysofachangeincontroloftheCompany.ForpurposesofthePensionPlan,a“changeincontrol”isdeemedtooccuruponthehappeningofanyofthefollowing:(1)anypersonorentityacquiresmorethan50%oftheCompany’sClassBCommonStockwhetherbydirectsale,merger,consolidation,shareexchangeorotherformofcorporatereorganization,(2)amajorityofthemembersoftheBoardofDirectorsisreplacedduringany12-monthperiodbyDirectorswhoseappointmentorelectionisnotendorsedbyamajorityofthemembersoftheBoardofDirectorsbeforethedateoftheappointmentorelectionor(3)anypersonorentityacquiresmorethan80%oftheCompany’sassets.However,itwillnotbea“changeincontrol”underthePensionPlaninanyoftheaboveinstancesiftheacquirerinsuchtransactioniseitheranentitycontrolledbytheCompanyorcontrolledbythedescendantsofWilliamDillard,IIoranyspouseofanysuchdescendants.
ForpersonsnotyeteligibleforNormalRetirement,thereisa2 ∕2%reductionintheamountofannualpensionbenefitforeachyearorpartialyearbetweentheperson’s65 birthdayandtheperson’sattainedageonthedateofthechangeincontrol.Thelumpsumpaymentisfurtherreducedifnecessarytopreventitfrombecominga“parachutepayment”underSection280GoftheInternalRevenueCode.
AllemployeeswithabenefitaccruedunderthePensionPlanuptothedateofthechangeincontrolareeligibleforalumpsumpayment,andnofurtherbenefitswouldbepaidfromthePensionPlanifthelumpsumpaymentsweretobemade.Thetablebelowdetailsthebenefitsthatwouldhavebeenpaid(withoutconsiderationofanyreductionthatmightberequiredtopreventa“parachutepayment”)tothenamedexecutiveofficers,assumingachangeincontroloccurredonFebruary1,2020,thelastbusinessdayoffiscal2019.Thelumpsumpaymentisequaltothepresentvalueoftheannualpensionbenefitdeterminedasofthedateofthechangeincontrol.Forpurposesofdeterminingthelumpsumpayment,presentvalueisdeterminedbyusingtheinterestratedeterminedunderSection417(e)oftheInternalRevenueCodeforthemonthofDecemberprecedingthecalendaryearinwhichthechangeincontroloccursandbyusingforpost-retirementmortalitythe1994GroupAnnuityReservingMortalityTableprojectedto2002basedonafixedblendof50%oftheuploadedmalemortalityratesand50%oftheuploadedfemalemortalityrates.
NEO
Pension Plan Lump Sum
Payment
WilliamDillard,II $35,968,839 AlexDillard 39,382,582 MikeDillard 21,480,309 DrueMatheny 18,780,783 ChrisB.Johnson 1,684,982 PhillipR.Watts 3,683,124
Wehavenotenteredintoagreementsorarrangementstoprovideseveranceorchangeincontrolpaymentstoanyofourexecutives,otherthanthePensionPlanbenefitsdescribedabove.
CEO Pay Ratio
UnderSection953(b)oftheDodd-FrankWallStreetReformandConsumerProtectionActandItem402(u)ofRegulationS-K,wearerequiredtoprovidethefollowingdisclosureregardingtheratiooftheannualtotalcompensationofourChiefExecutiveOfficertotheannualtotalcompensationofourmedianemployee(the“PayRatio”).
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1
th
ForpurposesofthePayRatiocalculation,weidentifiedourmedianemployeebystartingwithouremployeepopulationasofDecember31,2019,sortingthelistofallofouremployees(excludingourChiefExecutiveOfficer),whetheremployedonafull-timeorpart-timebasis,bytheirtaxablecompensationforfederalincometaxpurposesfromtheCompany’spayrollrecordsforthe12-monthperiodendedDecember31,2019andselectingtheemployeewiththemediantaxablecompensationamount.Aspartofthisprocess,theCompanyannualizedtaxablecompensationforanyfull-timeorpart-timeemployeesonthelistwhowasnotemployedforthefull12-monthperiodanddidnotincludethevalueofnon-taxableCompany-providedbenefitssuchasretirementplancontributionsandmedicalandlifeinsurancebenefits.
Theannualtotalcompensationforfiscal2019ofourChiefExecutiveOfficerwas$1,928,268,thetotalamountofhiscompensationpresentedintheSummaryCompensationTableonpage25.ThemedianDillard’semployeewascalculatedtobeafull-timestoreassociate,andthetotalfiscal2019compensationforthatmedianemployeewas$24,631.Accordingly,theratioofourCEO’sannualtotalcompensationtothemedianannualtotalcompensationofallotheremployeeswas78:1.WebelievethatthisinformationisareasonableestimatecalculatedinamannerconsistentwithItem402(u)ofRegulationS-K.DuetotheflexibilityaffordedbyItem402(u)incalculatingthePayRatio,however,ourratiomaynotbecomparabletoCEOpayratiospresentedbyothercompanies,includinginourownindustry.
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AUDIT COMMITTEE REPORT
TheAuditCommitteehasreviewedanddiscussedtheauditedconsolidatedfinancialstatementsoftheCompanyfortheyearendedFebruary1,2020withmanagementandKPMGLLP,theindependentregisteredpublicaccountingfirmfortheCompany.
ThediscussionswithKPMGLLPincludedthemattersrequiredtobediscussedbytheapplicablestandardsadoptedbythePublicCompanyAccountingOversightBoard.Also,KPMGLLPprovidedtotheAuditCommitteethewrittendisclosuresandtheletterrequiredbytheapplicablerequirementsofthePublicCompanyAccountingOversightBoardregardingtheindependentaccountant’scommunicationswiththeAuditCommitteeconcerningindependenceandtheAuditCommitteehasdiscussedwithKPMGLLPitsindependence.TheAuditCommitteealsoconsideredwhethertheprovisionofnon-auditservicesbyKPMGLLPwascompatiblewithmaintainingtheauditor’sindependenceandconcludedthatitwas.
Baseduponthereviewsanddiscussionsnotedabove,theAuditCommitteerecommendedtotheBoardofDirectorsthattheauditedconsolidatedfinancialstatementsoftheCompanybeincludedintheCompany’sAnnualReportonForm10-KfortheyearendedFebruary1,2020forfilingwiththeCommission.
AuditCommitteeoftheBoardofDirectors
ReynieRutledge,ChairmanH.LeeHastings,IIIJ.C.Watts,Jr.
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(1)
(2)
PROPOSAL NO. 2. RATIFICATION OF THE SELECTION OF THE COMPANY’S INDEPENDENTREGISTERED PUBLIC ACCOUNTANTS
TheBoardofDirectorsrecommendstothestockholdersthattheyratifytheselectionbytheAuditCommitteeofKPMGLLP(“KPMG”)astheCompany’sindependentregisteredpublicaccountantsforthefiscalyearendingJanuary30,2021.AlthoughratificationoftheAuditCommittee’sselectionofKPMGisnotrequiredunderourby-lawsorotherlegalrequirements,wearesubmittingtheappointmentofKPMGtothestockholdersasamatterofgoodcorporatepractice.
Intheeventthatthestockholdersfailtoratifytheappointment,theAuditCommitteewillconsidertheviewofthestockholdersindeterminingitsselectionoftheCompany’sindependentpublicaccountantsforthesubsequentfiscalyear.Eveniftheselectionisratified,theAuditCommittee,initsdiscretion,maydirecttheappointmentofanewindependentaccountingfirmatanytimeduringtheyeariftheAuditCommitteefeelsthatsuchachangewouldbeinthebestinterestsoftheCompanyanditsstockholders.
RepresentativesofKPMGareexpectedtobepresentattheAnnualMeeting,willhavetheopportunitytomakeastatementiftheydesiretodosoandareexpectedtobeavailabletorespondtoappropriatequestions.
Independent Accountant Fees
ThefollowingtablesummarizesthefeesbilledbyKPMGforfiscal2019andfiscal2018forauditandotherrelatedservices:
2019 2018 AuditFees $1,479,000 $1,451,000 Audit-RelatedFees — — TaxFees — — AllOtherFees — 3,560
$1,479,000 $1,454,560
Representsfeesforauditsoffinancialstatements,reviewsofquarterlyfinancialstatements,reviewsofregistrationstatementsandcertainperiodicreportsfiledwiththeSEC,andfinancialstatementsfiledwithcertainstatutoryandregulatoryfilings.Representsfeesforourlicenseofanaccountingresearchtool.
ThepolicyoftheAuditCommitteerequiresittopre-approveallauditandnon-auditservicestobeperformedbytheindependentregisteredpublicaccountingfirm.Duringfiscal2019,theAuditCommitteepre-approvedalloftheservicesdescribedaboveunderthecaptions“AuditFees,”“Audit-RelatedFees,”“TaxFees”and“AllOtherFees”inaccordancewiththispolicy.
Vote Required
ThevoteoftheholdersofamajorityofthesharesofCommonStockpresentinpersonorrepresentedbyproxyattheAnnualMeetingandhavingvotingpowerisrequiredtoratifytheappointmentofKPMGastheindependentregisteredpublicaccountingfirmforfiscal2020.
Recommendation of the Board
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTEFOR THE RATIFICATION OF KPMG AS THE COMPANY’S INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM FOR FISCAL 2020. PROXIES SOLICITED BY THE BOARD WILL BE VOTEDFOR THIS PROPOSAL UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.
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(1)
(2)
PROPOSAL 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION
In2011,theSECbegantorequirecompaniestoprovidestockholderstheopportunitytovote,onanon-binding,advisorybasis,onthecompensationofthecompanies’namedexecutiveofficersatleastonceeverythreeyears.Atthe2017annualmeetingofstockholders,ourstockholdersfollowedourBoard’srecommendationtoholdanadvisoryvoteonexecutivecompensationeverythreeyears,andourlaststockholderadvisoryvoteonexecutivecompensationwasheldin2017.Accordingly,asrequiredbySection14AoftheExchangeAct,weareaskingstockholdersatthisyear’sAnnualMeetingtovotetoapprovethecompensationofournamedexecutiveofficers,assuchcompensationisdisclosedinthisproxystatementpursuanttoItem402oftheSEC’sRegulationS-K,includingtheCompensationDiscussionandAnalysis,thecompensationtables,andothernarrativecompensationdisclosuresrequiredbyItem402andincludedherein.
Werequestthatstockholdersapprovethefollowingresolution:
RESOLVED,thatthecompensationpaidtotheCompany’snamedexecutiveofficers,asdisclosedintheCompany’s2020ProxyStatementpursuanttoItem402ofRegulationS-K,includingtheCompensationDiscussionandAnalysis,compensationtablesandnarrativediscussionisherebyAPPROVED.
TheBoardofDirectorsrecommendsavoteFORthisresolutionbecauseitbelievesthatthepoliciesandpracticesdescribedintheCompensationDiscussionandAnalysisareeffectiveinadheringtotheguidingprinciplesoftheDillard’sexecutivecompensationphilosophyandpracticeswhichcontinuetobe:competitiveness;payforperformance;accountabilityforshort-andlong-termperformance;andalignmenttostockholders’interests.Overarchingtheseprinciplesisadherencetoourcorevalues,whichemphasizethemannerinwhichourfinancialandstrategicobjectivesareachieved.Webelieveourcompensationprogramsarestronglyalignedwiththelong-terminterestsofourstockholders.
WeurgestockholderstoreadtheCompensationDiscussionandAnalysisbeginningonpage15ofthisproxystatement,aswellasthe2019SummaryCompensationtableandrelatedcompensationtablesandnarrative,appearingonpages25through28,whichprovidedetailedinformationontheCompany’scompensationpoliciesandpracticesandthecompensationofournamedexecutiveofficers.
Becausethevoteonthisproposalisadvisoryinnature,itwillnotaffectanycompensationalreadypaidorawardedtoanynamedexecutiveofficerandwillnotbebindingontheCompany,theBoardortheCompensationCommittee.TheBoardandCompensationCommittee,however,willreviewthevotingresultsandtakeintoaccounttheoutcomeindeterminingfutureannualcompensationforthenamedexecutiveofficers.
Vote Required
Adoptionoftheadvisory(non-binding)resolutionapprovingthecompensationoftheCompany’snamedexecutiveofficersasdisclosedhereinrequirestheaffirmativevoteofamajorityofthesharesofCommonStockpresentinpersonorrepresentedbyproxyandhavingvotingpower.Whilethisvoteisrequiredbylaw,asanadvisoryvote,itwillnotbebindingontheCompany,theCompensationCommitteeortheBoard,norwillitcreateorimplyanychangeinthefiduciarydutiesof,orimposeanyadditionalfiduciarydutyon,theCompany,theCompensationCommitteeortheBoard.However,theCompensationCommittee,whichisresponsiblefordesigningandadministeringtheCompany’sexecutivecompensationprogram,willconsidertheoutcomeofthevotewhenmakingfuturecompensationdecisionsfornamedexecutiveofficers.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVALOF EXECUTIVE COMPENSATION. PROXIES SOLICITED BY THE BOARD WILL BE VOTED FORTHIS PROPOSAL UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.
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1.
2.
3.
4.
5.
6.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Thefollowinglistisasummaryoftransactionsoccurringsincethebeginningoffiscal2019,orthatarecurrentlyproposed,(1)inwhichtheCompanywas,oristobe,aparticipant,(2)wheretheamountinvolvedexceeds$120,000,and(3)inwhichanyoftheCompany’sexecutiveofficers,directors,nominees,principalstockholdersandotherrelatedpersonsasdefinedinSECruleshad,orwillhave,adirectorindirectmaterialinterestorwhichtheCompanyhaschosentovoluntarilydisclose:
DeniseMahaffy,aSeniorVicePresidentoftheCompany,isasiblingofWilliamDillard,II,DrueMatheny,AlexDillardandMikeDillard.Duringfiscal2019,theCompanypaidDeniseMahaffytotalsalaryandbonusof $761,000.Duringfiscal2019,theCompanyalsomadecontributionsforthebenefitofDeniseMahaffyintheamountof $128,200pursuanttoitsbenefitplans.For2019,DeniseMahaffyhasbeenawardedabonusof $80,300undertheCashBonusPlantobepaidatafuturedate.
WilliamDillard,III,aSeniorVicePresidentoftheCompany,isthesonofWilliamDillard,II.Duringfiscal2019,theCompanypaidWilliamDillard,IIItotalsalaryandbonusof $759,000.Duringfiscal2019,theCompanyalsomadecontributionsforthebenefitofWilliamDillard,IIIintheamountof $127,900pursuanttoitsbenefitplans.For2019,WilliamDillard,IIIhasbeenawardedabonusof $80,300undertheCashBonusPlantobepaidatafuturedate.
AlexandraLucie,aVicePresidentoftheCompany,isthedaughterofAlexDillard.Duringfiscal2019,theCompanypaidAlexandraLucietotalsalaryandbonusof $383,000.Duringfiscal2019,theCompanyalsomadecontributionsforthebenefitofAlexandraLucieintheamountof$86,900pursuanttoitsbenefitplans.
AnnemarieJazic,aVicePresidentoftheCompany,isthedaughterofAlexDillard.Duringfiscal2019,theCompanypaidAnnemarieJazictotalsalaryandbonusof $381,000.Duringfiscal2019,theCompanyalsomadecontributionsforthebenefitofAnnemarieJazicintheamountof$86,300pursuanttoitsbenefitplans.
MichelleHobbs,aDirectorofExclusiveBrandShoesfortheCompany,isthedaughterofAlexDillard.Duringfiscal2019,theCompanypaidMichelleHobbstotalsalaryandbonusof $247,000.Duringfiscal2019,theCompanyalsomadecontributionsforthebenefitofMichelleHobbsintheamountof $23,300pursuanttoitsbenefitplans.
Duringfiscal2019,StephensInsurance,LLCreceivedcommissionsfromthirdpartiesofapproximately$1,746,000inconnectionwiththesaleofvoluntaryinsurancebenefitstoDillard’semployees.Itisestimatedthatapproximately$106,000ofthisamountrepresentscommissionsfrompremiumspaidbytheCompanyonbehalfofemployeeinsuranceprograms.StephensInsurance,LLCiswholly-owneddirectlybyWarrenA.Stephens.
AllrelatedpartytransactionsdescribedabovehavebeenreviewedandapprovedinaccordancewiththeCompany’spolicyasdescribedbelow.ItisthepolicyoftheBoard,whichhasbeenformallyadoptedinwritingasaBoardResolution:(1)torequirethatrelatedpersonsdisclosetotheBoardofDirectorsthematerialtermsofanypotentialrelatedpartytransaction,oranymaterialamendmentormodificationofsuchatransaction,thatmayrequiredisclosureintheproxystatementand(2)toprovidethattheBoardofDirectorsestablishineachindividualcaseagroupofdisinteresteddirectorswiththeresponsibilitytoreviewsuchpotentialtransaction,amendmentormodification,todeterminewhethersuchtransactionisfairtotheCompanyand,ifso,toapproveorratifythetransaction.Duetothemyriadofdifferentsituationswhichcouldpresentthemselvestothisgroupofdirectors,nospecificstandardsapplyduringreviewofarelatedpartytransaction.
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DELINQUENT SECTION 16(a) REPORTS
Section16(a)oftheExchangeActrequirestheCompany’sdirectors,executiveofficers,andpersonswhobeneficiallyownmorethan10%oftheCompany’sClassACommonStocktofilewiththeSECinitialreportsofbeneficialownershipandreportsofchangesinbeneficialownershipofClassACommonStock.
TotheCompany’sknowledge,basedsolelyonareviewofcopiesofreportsprovidedbyindividualssubjecttothereportingrequirementsofSection16(a)oftheExchangeActtotheCompanyandwrittenrepresentationsofsuchindividualsthatnootherreportswererequired,duringthefiscalyearendedFebruary1,2020,allSection16(a)filingrequirementsapplicabletoitsexecutiveofficers,directorsandgreaterthan10%beneficialownerswerecompliedwith.
OTHER MATTERS
ManagementoftheCompanyknowsofnoothermattersthatmaycomebeforetheAnnualMeeting.However,ifanymattersotherthanthosereferredtohereinshouldproperlycomebeforetheAnnualMeeting,itistheintentionoftheproxyholderstovotetheProxyinaccordancewiththeirjudgment.
STOCKHOLDER PROPOSALS FOR THE 2021 ANNUAL MEETING
TheCompany’s2021AnnualMeetingofStockholdersisscheduledtobeheldonSaturday,May15,2021.
IfastockholderintendstosubmitaproposaltobeincludedintheCompany’sproxystatementandformofproxyrelatingtotheCompany’s2021AnnualMeetingofStockholdersinaccordancewithSECRule14a-8,theproposalmustbereceivedbytheCompanyatitsprincipalexecutiveofficesnotlaterthanDecember4,2020.SuchproposalmustmeettherequirementssetforthintherulesandregulationsoftheSECinordertobeeligibleforinclusionintheproxystatementandrelatedformofproxyforthe2021AnnualMeetingofStockholders.
UndertheCompany’sby-laws,ifastockholderintendstosubmitaproposalatthe2021AnnualMeetingofStockholders,andsuchproposalisnotintendedtobeincludedintheCompany’sproxystatementandformofproxyrelatingtosuchmeetingpursuanttoSECRule14a-8,thestockholder’snoticeofsuchproposal(includingcertaininformationspecifiedintheby-laws)mustbedeliveredtotheCompany’sCorporateSecretaryattheprincipalexecutiveofficesoftheCompanynoearlierthanthecloseofbusinessonJanuary16,2021andnolaterthanthecloseofbusinessonFebruary15,2021.Ifastockholderfailstosubmittheproposalwithinsuchtimeperiod,theproposalwillbeuntimelyandwillnotbeconsideredatthe2021AnnualMeetingofStockholders.
UndertheCompany’sby-lawsandassumingthe2021AnnualMeetingofStockholdersisheldasscheduledonMay15,2021,ifastockholderintendstonominateanindividualforelectiontotheBoardatthe2021AnnualMeetingofStockholders,thestockholder’snoticeofsuchnominationmustbereceivedbytheCompany’sCorporateSecretaryattheprincipalexecutiveofficesoftheCompanynoearlierthanFebruary14,2021andnolaterthanMarch16,2021.
GENERAL
TheCompany’sannualreportforthefiscalyearendedFebruary1,2020isbeingdistributedormadeavailable,asthecasemaybe,withthisproxystatementbutisnottobeconsideredasaparthereof.Thesematerialsarealsoavailableathttps://investor.dillards.com/financial-information/annual-report-and-proxy/default.aspx.
TheCompanyhasadoptedaprocedureapprovedbytheSECcalled“householding.”Underthisprocedure,theCompanyisdeliveringasinglecopyoftheproxymaterialsortheNoticeofInternetAvailabilityofProxyMaterials,asapplicable,tomultiplestockholderswhosharethesameaddressunlesstheCompanyhasreceivedcontraryinstructionsfromoneormoreofthestockholders.Stockholderswhoparticipateinhouseholdingwillcontinuetoreceiveseparateproxycards.Uponwrittenororalrequest,the
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CompanywillpromptlydeliveraseparatecopyoftheproxymaterialstoanystockholderatasharedaddresstowhichtheCompanydeliveredasinglecopyofanyofthesedocuments.
IfyouarearegisteredholderofCommonStockandaresubjecttohouseholdingasdescribedaboveandwouldliketorevokeyourconsenttohouseholdingandinthefuturereceiveyourownsetofproxymaterialsorNoticeofInternetAvailabilityofProxyMaterials,youmaydosobycontactingBroadridgeHouseholdingDepartmentbymailat51MercedesWay,Edgewood,NY11717orbycalling1-866-540-7095.Alternatively,ifyouareeligibleforhouseholdingbutyouandotherstockholdersofrecordwithwhomyoushareanaddresscurrentlyreceivemultiplecopiesofthisNoticeofAnnualMeetingandProxyStatementandaccompanyingdocuments,pleasecontactBroadridgeasindicatedabove.
StockholderswhoownCommonStockinstreetnamethroughabrokerorothernomineeshouldcontacttheirbrokersornomineesiftheyhavequestions,orwisheithertogiveinstructionstohouseholdortorevoketheirdecisiontohousehold.
Thematerialinthisproxystatementunderthecaptions“CompensationCommitteeReport”and“AuditCommitteeReport”shallnotbedeemedsolicitingmaterial,shallnotbedeemedtobefiledandshallnotbedeemedtobeincorporatedbyanygeneralstatementofincorporationbyreferenceinanyfilingsmadeundertheSecuritiesActof1933ortheExchangeAct.
ACOPYOFTHECOMPANY’SANNUALREPORTONFORM10-K,INCLUDINGTHEFINANCIALSTATEMENTSANDSCHEDULESTHERETO,REQUIREDTOBEFILEDWITHTHESECURITIESANDEXCHANGECOMMISSION,MAYBEOBTAINEDWITHOUTCHARGEBYANYSTOCKHOLDERWHOSEPROXYISSOLICITED,UPONWRITTENREQUESTTO:
DILLARD’S, INC. 1600CantrellRoad
LittleRock,Arkansas72201Attention:PhillipR.Watts,SeniorVicePresident,
Co-PrincipalFinancialOfficerandPrincipalAccountingOfficer
ByOrderoftheBoardofDirectorsDEANL.WORLEYVice President, General Counsel,Corporate Secretary
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