Jay L. Schottenstein
AMERICAN EAGLE OUTFITTERSAbout Jay L. Schottenstein
Executive Chairman and Chief Executive Officer of American Eagle Outfitters, Inc. (AEO); age 70; director since March 1992; CEO since December 2015 (prior CEO 1992–2002; interim CEO 2014–2015); graduate of Indiana University . Fiscal 2024 performance under his leadership delivered record revenue of $5.3B (+1% YoY), operating income of $427M (adjusted operating income $445M, +19% YoY), and adjusted operating margin of 8.3% (+120bps) . Pay-versus-performance disclosures show cumulative TSR value of $125 on a $100 initial investment through FY2024 versus $153.5 for the peer group; key financials include FY2024 net income $329M and adjusted EBIT $452M .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Eagle Outfitters | Chairman of the Board | 1992–present | Guided AEO’s evolution from single-brand to multi-brand $5B+ global specialty retailer |
| American Eagle Outfitters | CEO | 1992–2002; 2015–present; Interim CEO 2014–2015 | Led merchandising, operations, real estate, brand building; delivered record revenue and margin expansion in FY2024 |
| Schottenstein Stores Corporation (SSC) | Executive Chairman & CEO; President | CEO/Chairman since 1992; President since 2001 | Oversees family-controlled retail holdings; long-standing leadership in retail operations |
| SSC | Vice Chairman | 1986–1992 | Senior leadership preceding Chairman role |
| AEO predecessors | Vice President & Director | Since 1980 | Early leadership tenure in AEO’s predecessor entities |
| Designer Brands Inc. (f/k/a DSW Inc.) | Executive Chairman; CEO | Executive Chairman since 2005; CEO 2005–2009 | Board leadership in branded footwear retail |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Designer Brands Inc. (NYSE: DBI) | Director; Executive Chairman | Since 2005 | Current public company directorship |
| Albertsons Companies Inc. (NYSE: ACI) | Director | 2006–2022 | Prior public company directorship |
| Multiple family entities (e.g., SEI, SSEI) | Officer/Director | Various | Related-party interests disclosed in ownership table |
Board Governance
- Combined Executive Chairman & CEO structure offset by robust Lead Independent Director role (Noel J. Spiegel) with defined duties: presiding over independent sessions, agenda input, schedule approval, liaison with management, availability to major shareholders .
- Board comprises seven directors; six are independent; all board committees (Audit, Compensation, Nominating) are fully independent; Schottenstein is not independent and serves on no committees .
- Board and committees held 40 meetings in FY2024 with 99% aggregate attendance; extensive director education and risk oversight (including AI and cybersecurity) .
- Governance protections include majority vote with resignation policy, stringent anti-hedging/anti-pledging, and stock ownership guidelines (CEO 6× base salary) .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $1,750,000 | $1,817,308 | $1,750,000 |
| Target Bonus (% of Base) | — | — | 175% |
| All Other Compensation ($) | $226,544 | $315,330 | $361,753 |
| Total Compensation ($) | $9,776,540 | $16,793,219 | $14,980,527 |
Notes:
- No FY2024 base salary increase; CEO’s stock ownership guideline set at 6× base; policy requires retention of 50% of after-tax shares until compliance (CEO in compliance as of record date) .
- FY2024 CEO pay ratio: 2,011:1 (CEO total $14,980,527; median employee $7,488) .
Performance Compensation
Annual Incentive Plan (AIP) – FY2024
| Element | Detail |
|---|---|
| Metric | EBIT (non-GAAP; excludes impairment/restructuring) |
| Weighting | 100% EBIT |
| Goal Structure | Threshold 25% payout; Target 100%; Stretch 200% |
| Target Bonus Opportunity | 175% of base salary |
| Actual Performance | EBIT $452M vs Target $445M |
| Payout | 110% of target; CEO paid $3,368,750 |
Long-Term Incentives (Annual Grants on April 4, 2024)
| Instrument | Grant Details | Vesting | FY2024 Grant Size/Terms |
|---|---|---|---|
| PSUs (50% of LTI at target) | RTSR vs peer group over 3 years; threshold 25th percentile (50% payout), target 50th (100%), stretch 75th+ (150%); negative absolute TSR caps at 100% | Cliff vest after 3 years if goals met | Target shares 163,850; grant-date fair value $4,750,012 |
| RSUs (20% of LTI) | Time-based RSUs with dividend equivalents paid only upon vesting | 3-year ratable (1/3 annually) | Shares 77,965; grant-date fair value $1,900,007 |
| Stock Options (30% of LTI) | Nonqualified options; compensation only if stock appreciates | 3-year ratable | Options 268,615; exercise price $24.37; grant-date fair value $2,850,005 |
Prior PSU Cycle (Granted FY2022; performance to FY2024)
| PSU Cycle | Performance Metric | Result | CEO Shares Earned |
|---|---|---|---|
| FY2022–FY2024 | RTSR vs S&P 1500 Specialty Retail Index | 42nd percentile; 85% of target earned | 179,836 (incl. accrued dividends) |
Equity Ownership & Alignment
| Ownership Metric (as of April 15, 2025) | Shares | Percent of Outstanding |
|---|---|---|
| Common Stock Beneficially Owned | 11,135,780 | — |
| Rights to Acquire Within 60 Days (options, deferred units) | 1,843,888 | — |
| Total Beneficial Ownership | 12,979,668 | 7.4% |
Breakdown and alignment:
- Includes shares held via SEI, Inc. (2,971,202) and Schottenstein SEI, LLC (2,611,235); plus trusts with shared voting/disposition power; excludes 3,835,371 shares held by family trusts beneficially owned by spouse .
- Stock ownership guidelines: CEO must hold 6× base salary; CEO in compliance; anti-hedging and anti-pledging policies apply to executives and directors .
Vested vs unvested and insider activity:
| Category | Amount |
|---|---|
| FY2024 Option Exercises (Shares; Value Realized) | 227,937; $2,198,452 |
| FY2024 Stock Vested (RSUs/PSUs; Shares; Value) | 170,166; $4,101,821 |
| Unvested RSUs (Jan 31, 2025; market value at $16.14) | 88,456; $1,427,686 |
| Unearned PSUs at Target (March 30, 2023 grant; market/payout value) | 296,376; $4,783,510 |
| Unearned PSUs at Target (April 4, 2024 grant; market/payout value) | 167,883; $2,709,626 |
Insider trading controls: Insider Trading Policy with blackout/compliance; “no hedging/no pledging” enforced .
Employment Terms
- No employment contract of defined length, no multi-year guarantees; compensation largely at-risk; clawback policy compliant with SEC/NYSE rules .
- Change-in-control (CIC): CEO has no CIC agreement; equity awards are generally double-trigger for executives; CEO’s potential treatment under plan shown below; no CIC tax gross-ups .
| CEO Termination Scenario (Assumed Feb 1, 2025) | Cash Bonus ($) | Option Vesting ($) | RSU Vesting ($) | PSU Vesting ($) | Total ($) |
|---|---|---|---|---|---|
| Death/Disability | $3,368,750 | $928,475 | $1,393,398 | $10,395,679 | $16,086,302 |
| Retirement | $— | $928,475 | $1,393,398 | $10,395,679 | $12,717,552 |
| CIC (Double-Trigger; equity under plan) | $— | $928,475 | $3,237,042 | $10,395,679 | $14,561,196 |
Non-compete: CEO has not entered into non-compete; other NEOs have 12–24 month non-compete and non-solicit provisions with base continuation if enforced .
Compensation Committee & Benchmarking
- Compensation Committee comprises independent directors; chaired by Cary D. McMillan; uses independent consultant FW Cook; no conflicts; program emphasizes at-risk pay, clawback, and stock ownership .
- Peer group for benchmarking updated for FY2025 to remove Express and add Columbia Sportswear (COLM) and VF Corporation (VFC), totaling 17 companies; FY2024 peer group listed in Pay-vs-Performance footnotes .
Related Party Transactions
- Leases with SG Island Plaza (affiliate): Aerie store rent/expenses ≈ $2.0M in FY2024; Las Vegas AE flagship rent guarantee paid $0.9M after surrender (through Sept 2027 term) .
- Leases with Schottenstein Realty LLC subsidiaries: Two lifestyle stores rent equal to 5% of gross sales plus expenses; ≈ $0.5M in FY2024; relocation lease paid ≈ $127,000 in FY2024 (expires May 2033) .
- In-store music services via Retail Entertainment Design, LLC (trusts where Schottenstein is trustee): payments ≈ $0.8M in FY2024; Audit Committee oversight .
Say‑on‑Pay & Shareholder Feedback
| Proposal Year | Say‑on‑Pay Support |
|---|---|
| FY2021 | 92% |
| FY2022 | 94% |
| FY2023 | 95% |
- FY2024 say‑on‑pay on agenda for June 25, 2025; extensive investor engagement (met with ~51% of top 100 holders representing ~53% of shares outstanding) .
Equity Ownership & Director Compensation (Board context)
- Director stock ownership guideline: 5× annual cash retainer ($325,000); all directors meet/exceed; no dividends on unearned/unvested awards .
- CEO does not receive additional compensation for director service .
Performance & Track Record Highlights
- FY2024 consolidated revenue $5.3B (+1%), Aerie $1.7B (+4%), American Eagle $3.4B (+1%); comparable sales +4% overall .
- Operating cash flow $477M; capital expenditures $223M; returned $287M (dividends $96M; buybacks $191M for 9.5M shares); Board authorized additional 50M shares and announced $200M ASR in March 2025 .
- AIP payout at 110% of target tied to EBIT outperformance; 2022 PSUs earned at 85% based on RTSR percentile rank .
Investment Implications
- Pay-for-performance alignment: 88% of CEO’s target compensation is variable; AIP tied 100% to EBIT; LTI balanced across PSUs/RSUs/options with clear RTSR goals; clawback in place—supportive of shareholder alignment .
- Insider selling pressure: FY2024 saw meaningful liquidity from option exercises ($2.2M) and stock vesting ($4.1M); short-term selling pressure could occur around scheduled vest/exercise windows, though policies prohibit hedging/pledging .
- Ownership alignment: CEO beneficially owns ~7.4% of shares—material “skin-in-the-game”; guideline compliance and no pledging reduce misalignment risk .
- Governance risk mitigants: Dual role (Executive Chairman & CEO) presents independence considerations offset by strong Lead Independent Director authority and fully independent committees; board held 40 meetings with 99% attendance .
- Related-party transactions: Lease and service arrangements with affiliates are modest in magnitude and overseen/approved by Audit Committee, but merit ongoing scrutiny for conflicts .
- Shareholder support: Sustained high say‑on‑pay approvals (92–95%) and active engagement suggest investor acceptance of compensation design; continued delivery on “Powering Profitable Growth” plan is key to sustaining support .