Albert Adams
About Albert Adams
Albert Adams (age 74) is Arhaus’ Independent Lead Director and Chair of the Compensation Committee. He has served on Arhaus, Inc.’s board since 2021, on Arhaus, LLC’s board since 2014, and on the predecessor’s board since 2001. A corporate and business transactions attorney, he joined Baker & Hostetler LLP in 1977, became partner in 1984, and served on its governing body from 1993–2014. He has served as a director of numerous private businesses and seven public companies, and as a trustee/board member of multiple community organizations .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Baker & Hostetler LLP | Partner; Member of firm governing body | Partner since 1984; Governing body 1993–2014; Joined firm 1977 | Business/corporate practice focused on structuring and financing transactions |
| Various private/public companies | Director | Not specified; “director of numerous private businesses and seven public companies” | Governance, capital markets, business combinations |
| Community orgs (e.g., American Red Cross – Cleveland Chapter; Greater Cleveland Roundtable; Western Reserve Historical Society; Karamu Playhouse) | Board member/trustee | Various | Civic leadership; stakeholder engagement |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Multiple public companies (not listed by name) | Director | Not specified | History of seven public company directorships; current public company roles not disclosed |
| Community organizations (see above) | Board member/trustee | Various | Philanthropic/community governance involvement |
Board Governance
- Structure and leadership: Combined CEO/Chairman (John Reed) with an Independent Lead Director (Albert Adams) .
- Independence: Board determined Adams qualifies as an “independent director” under Nasdaq rules .
- Committee assignments and chair roles:
- Compensation Committee Chair; members: Adams (Chair), Bill Beargie, Alexis DePree, John Roth; 7 meetings in 2024 .
- Not listed on Audit, Nominating & Corporate Governance, Real Estate, or Technology Committees .
- Attendance: Board held 8 meetings in 2024; each director attended more than 75% of aggregate Board and committee meetings; Adams therefore met attendance expectations .
- Lead Independent Director responsibilities reflected in additional retainer compensation (see Fixed Compensation) .
Fixed Compensation
Director cash retainers and fees (year-over-year comparison):
| Component | 2023 | 2024 |
|---|---|---|
| Base annual director retainer (cash) | $75,000 | $80,000 |
| Compensation Committee Chair fee (cash) | $15,000 | $15,000 |
| Independent Lead Director fee (cash) | $30,000 | $30,000 |
| Total cash fees (Adams) | $120,000 | $125,000 |
Performance Compensation
Annual director equity grants (RSUs), terms, and vesting:
| Metric | 2023 | 2024 |
|---|---|---|
| RSU grant date | May 18, 2023 | May 16, 2024 |
| Grant-date fair value | $110,004 | $110,014 |
| Valuation closing price | $7.55 | $16.42 |
| Vesting | Vests in full one year after grant (subject to continued service); accelerated vesting if service terminates for reasons other than removal under bylaws | Same structure; vests May 16, 2025 |
Director equity for non-employee directors is time-based RSUs; no performance-based PSUs or options are disclosed for directors .
Other Directorships & Interlocks
- Investor Rights Agreement history (terminated): Freeman Spogli Funds previously had nomination rights; now terminated; Roth remained on Board via Nominating & Corporate Governance Committee nomination .
- Compensation Committee interlocks: No members have been Company officers or employees, except Beargie (predecessor CFO 1987–1997) .
- Trust relationships: Adams is co-trustee (with Beargie) of the Reed 2013 Generation Skipping Trust and 2018 Reed Dynasty Trust, which collectively hold 42,037,341 Class B shares; both trustees disclaim pecuniary interest .
Expertise & Qualifications
- Legal and business expertise in transaction structuring and financing; extensive advisory experience for public and private companies; capital markets, business combinations, and corporate governance expertise cited as qualifications for Board service .
Equity Ownership
Beneficial ownership and alignment (as of March 17, 2025):
| Holder | Class A Shares | Class A % | Class B Shares | Class B % | Combined Voting Power |
|---|---|---|---|---|---|
| Albert Adams | 65,401 | <1% | 42,037,341 (as trustee; no pecuniary interest; disclaimed) | 29.89% | 45.47% |
| Unvested RSUs (director) | 6,700 (vest within 60 days; excludes Roth) | — | — | — | — |
- Hedging/pledging: Hedging and pledging of Company securities by directors are prohibited under Company policy .
- Insider trading compliance: Section 16(a) delinquent filings noted only for an officer (Venkat Nachiappan); no delinquencies disclosed for Adams .
Governance Assessment
- Strengths:
- Independent Lead Director with deep governance experience; Compensation Committee chaired by Adams meets regularly (7 meetings in 2024), indicating active oversight .
- Clear prohibitions on hedging/pledging; adoption of Dodd-Frank-compliant clawback policy; restatements analyzed with no impact on incentive metrics and no recoupment required .
- Very high say‑on‑pay support (98% in 2024), suggesting investor approval of compensation framework overseen by his committee .
- Potential concerns/RED FLAGS:
- Control dynamics: As co‑trustee of Class B Trusts holding 29.89% of Class B shares and 45.47% combined voting power, Adams’ fiduciary obligations to the trusts may create perceived conflicts, particularly given his Lead Independent Director and Compensation Committee Chair roles (though he disclaims pecuniary interest) .
- Related-party environment: Significant related-party leases with entities affiliated with the Founder and consulting fees paid to a director (Gary Lewis); while vetted under policy, these transactions raise governance sensitivity requiring robust independent oversight .
Compensation Committee Analysis
- Composition: Adams (Chair), Beargie, DePree, Roth; no current officers on committee; historical officer role limited to Beargie (predecessor CFO) .
- Independent advisor: Aon plc retained as independent compensation consultant to review practices and recommend compensation structures; no other relationships with the Company .
- Peer group usage: Retail-sector peer group referenced in 2024 CD&A for benchmarking; includes RH, Williams-Sonoma, Floor & Decor, Tapestry, Tempur Sealy, La‑Z‑Boy, etc. (full list in table), used to assess competitiveness; not strict benchmarking to a specific percentile .
- Program design and metrics: Executive AIP targets Adjusted EBITDA and demand; 2024 AIP paid 0% despite demand at target due to Adjusted EBITDA below threshold; LTIs split between RSUs and PSUs with 3‑year performance on cumulative demand revenue and adjusted EBITDA, 0–200% payout band .
Related-Party Transactions (Context for Committee Oversight)
| Transaction | Counterparty | Terms | 2024 Cash Flows |
|---|---|---|---|
| DC lease (Conover, NC) | Premier Conover, LLC (Founder indirectly 40%) | 12‑year term; monthly base rent $263,015 at 12/31/2024 | $3,872,446 |
| Warehouse lease (Walton Hills, OH) | Pagoda Partners, LLC (Founder indirectly 50%) | Extended to 2034; monthly rent $132,694 at 12/31/2024 | $1,647,213 |
| Outlet lease (Brooklyn, OH) | Brooklyn Arhaus (Founder 85%, Director Beargie 15%) | Monthly base rent $19,995 at 12/31/2024 | $271,606 |
| Real estate consulting | Gary Lewis (Director) | Agreement executed 11/29/2023; annual fees ≤$120,000; 2024 paid $36,000 | $36,000 |
| Related party compensation | Ryan Reed (Founder’s son) | SVP, Real Estate; 2024 base $390,000; total earned $1,101,151 | $1,101,151 |
Audit Committee reviews/approves related-party transactions per policy .
Fixed Compensation (Director-level Detail for Adams)
| Year | Fees Earned (Cash) | Equity (RSUs) Fair Value | Total |
|---|---|---|---|
| 2023 | $120,000 | $110,004 | $230,004 |
| 2024 | $125,000 | $110,014 | $235,014 |
Performance Compensation (Director Equity Mechanics)
| Element | Grant Date | Shares/Value | Vesting | Notes |
|---|---|---|---|---|
| RSUs | 5/18/2023 | $110,004 at $7.55 close | 1‑year cliff (vest 5/18/2024) | Accelerate on service termination (except removal under bylaws) |
| RSUs | 5/16/2024 | $110,014 at $16.42 close | 1‑year cliff (vest 5/16/2025) | Same acceleration terms |
Equity Ownership
| As of 3/17/2025 | Class A | Class B | Combined Voting Power |
|---|---|---|---|
| Albert Adams | 65,401 shares (<1%) | 42,037,341 shares (as trustee; 29.89%) | 45.47% |
| Unvested RSUs (director) | 6,700 | — | — |
Policy prohibitions on hedging/pledging for directors mitigate alignment risks .
Say‑on‑Pay & Shareholder Feedback (Context for Adams’ Committee)
| Year | Say-on-Pay Approval |
|---|---|
| 2024 | ~98% approval |
Governance Assessment
- Overall: Adams brings seasoned legal and governance expertise as Independent Lead Director and Compensation Committee Chair, with strong attendance and active committee engagement .
- Alignment: Time‑based RSU grants provide equity exposure; direct Class A holdings are modest, but trusteeship over large Class B holdings confers significant voting influence despite disclaimed pecuniary interest .
- Risks: The trusteeship and founder-related transactions require heightened independence and rigorous committee oversight; real estate consulting to another director underscores the need for robust related‑party controls managed by the Audit Committee .
No specific director stock ownership guidelines or compliance status for directors are disclosed in the proxies reviewed .