Kathy Veltri
About Kathy Veltri
Kathy Veltri (age 63) is Chief Retail Officer of Arhaus (ARHS). She has served as CRO since 2021 and previously held the same role at Arhaus, LLC since March 2019, after leading retail operations as SVP from 2017; earlier roles include President of Thomasville (Furniture Brands) and EVP of Sales at Gardner White . Company performance during her recent tenure: FY2024 net revenue was $1,271.1M (down 1.3% YoY from $1,287.7M in 2023), with adjusted EBITDA of $133M (vs. $203M in 2023) and net income of $69M; the company’s cumulative TSR index in 2024 was 75.97 on a $100 initial value (2023: 92.58; 2022: 76.17) .
Past Roles
| Organization | Role | Years | Strategic Impact / Notes |
|---|---|---|---|
| Arhaus, Inc./Arhaus, LLC | Chief Retail Officer | 2021–present (CRO at LLC since Mar 2019) | Not disclosed in filings |
| Arhaus, LLC | SVP, Retail Operations | 2017–2019 | Not disclosed in filings |
| Gardner White | EVP of Sales | 2015–2016 | Not disclosed in filings |
| Thomasville (Furniture Brands) | President | 2013–2014 | Not disclosed in filings |
| Arhaus (prior tenure) | SVP, Retail Operations & Marketing | 2006–2013 | Not disclosed in filings |
External Roles
No external directorships or board roles disclosed for Ms. Veltri .
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 449,076 | 474,862 | 489,992 |
| Target Annual Bonus (% of Salary) | Not disclosed | Not disclosed | 50% |
| Actual AIP (Annual Bonus) ($) | 449,076 | 142,458 | 0 (EBITDA below threshold despite demand at target) |
| All Other Compensation ($) | 34,932 | 28,081 | 90,209 (incl. $12,458 car allowance; $13,800 401k match; $62,711 dividend equivalents credited) |
Notes:
- 2024 target bonus range: threshold 25% to max 200% of target; weighting used a performance matrix; no payout for 2024 AIP .
Performance Compensation
2024 Annual Incentive Plan (AIP)
| Metric | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| Adjusted EBITDA (before bonus) | Not disclosed | Not disclosed | Below threshold | 0% |
| Demand (operating metric of net orders net of cancels/returns) | Not disclosed | Achieved target | Achieved target | 0% (overall AIP zero due to EBITDA) |
AIP mechanics: 25% threshold and 200% maximum of target; 2024 result was zero payout .
2024 Long-Term Incentives (granted April 12, 2024)
| Award Type | Shares Granted | Grant-Date Fair Value ($) | Vesting / Performance | Metrics / Weighting |
|---|---|---|---|---|
| RSUs | 4,538 | 71,201 | 1/3 on each of 1st, 2nd, 3rd anniversaries (i.e., 4/12/2025, 4/12/2026, 4/12/2027) | Time-based |
| PSUs (Target) | 13,613 | 213,588 (at target; 0–200% payout) | Vests at end of 3-year period (1/1/2024–12/31/2026), settles after certification | 50% cumulative demand revenue; 50% cumulative adjusted EBITDA |
Outstanding prior-cycle awards and schedules:
- 2023 PSUs: 21,057 target shares unearned at 12/31/2024; cliff vest 12/31/2025 (0–200%); performance metrics same (demand/adj. EBITDA) .
- 2023 RSUs: 4,679 vesting 1/3 on 3/10/2024, 3/10/2025, 3/10/2026; 33,333 RSUs vesting 1/3 on 11/9/2024, 11/9/2025, 11/9/2026 .
- 2022 RSUs: 4,166 vesting 1/3 annually beginning 8/2/2023 .
PSU Settlement (2012-24 Cycle, granted 2022; vested based on 2022-2024 performance)
| Executive | PSU Target (#) | PSUs Vested (#) | Payout vs. Target |
|---|---|---|---|
| Kathy Veltri | 37,500 | 41,352 | 110.27% (demand 102.14% → 108.55% weighted; adj. EBITDA 103% → 111.98% weighted) |
2024 Equity Vesting Activity (Realized)
| Executive | Shares Acquired on Vesting (#) | Value Realized ($) |
|---|---|---|
| Kathy Veltri | 64,526 | 641,833 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 439,552 Class A shares; less than 1% of outstanding |
| Unvested Awards (as footnoted) | 264,376 unvested RSUs; 34,670 unvested PSUs (target) |
| Outstanding Unvested/Unearned (12/31/2024 detail) | RSUs: 4,166 (8/2/2022), 4,679 (3/10/2023), 33,333 (11/9/2023), 4,538 (4/12/2024); PSUs (target): 21,057 (3/10/2023), 13,613 (4/12/2024) |
| Dividend Equivalents | $62,711 credited in 2024 (from $0.50 special cash dividend), payable only if underlying awards vest |
| Pledging/Hedging | Prohibited for directors and officers under Insider Trading Policy |
| Ownership Guidelines | Not disclosed |
Implications for selling pressure: multiple RSU tranches vest in 2025–2027 (3/10/2025; 11/9/2025; 4/12/2025) and PSU payouts in 2025 and 2026 may create periodic liquidity events; hedging/pledging is prohibited .
Employment Terms
| Provision | Terms (CRO Agreement dated Mar 4, 2019) |
|---|---|
| Employment status | At-will |
| Severance (without Cause or with Good Reason) | Lump sum = 50% of greater of $340,000 or highest base salary; plus lump sum equal to 6 months COBRA, subject to release |
| Cause / Good Reason | Definitions mirror those in CMO/CFO agreements (cause for fraud/loyalty breach/willful non-performance; good reason for salary reduction, benefits diminution, material duty reduction, relocation) |
| Clawback | Dodd-Frank–compliant policy adopted Oct 3, 2023; 2023 Q3 restatement did not impact metrics—no recovery required |
Potential payments/value at 12/31/2024 (illustrative, uses $9.40/share and PSUs at target per proxy):
| Scenario | Salary ($) | COBRA ($) | RSUs ($) | PSUs ($) | Restricted Shares ($) | Total ($) |
|---|---|---|---|---|---|---|
| Termination without Cause / Good Reason | 246,376 | 4,708 | — | — | — | 251,084 |
| Death | — | — | 439,130 | 678,398 | — | 1,117,528 |
| Disability | — | — | 439,130 | 678,398 | — | 1,117,528 |
| Change-in-Control (CIC) | — | — | 439,130 | 678,398 | — | 1,117,528 (CIC acceleration per plan terms) |
Notes: RSUs accelerate on death/disability; PSUs under CIC vest at greater of target or performance, with double-trigger vesting if terminated without Cause within 60 days before or 24 months after a CIC .
Compensation Structure Analysis
- Mix shifts and at-risk pay: 2024 AIP paid 0% despite demand at target, showing formulaic downside; equity remains a substantial component via RSUs/PSUs ($284,789 grant-date value in 2024) .
- Performance metrics: AIP linked to annual Adjusted EBITDA and demand; PSUs tied to multi-year cumulative demand revenue and cumulative adjusted EBITDA (0–200% payout), driving longer-term alignment .
- Dividend equivalents: Special dividend crediting creates deferred value only upon vesting, maintaining alignment while signaling potential future taxable events on vest dates .
- Peer benchmarking and say-on-pay: Compensation Committee uses a retail peer set (e.g., RH, Williams-Sonoma, Floor & Decor, Tapestry); 2024 say-on-pay support was ~98%—limited external pressure to overhaul design .
Performance & Track Record (Company context during her leadership window)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Revenue ($M) | 1,228.9 | 1,287.7 | 1,271.1 |
| Adjusted EBITDA ($M) | 223 | 203 | 133 |
| Net Income ($M) | 137 | 125 | 69 |
| Cumulative TSR (Initial $100) | 76.17 | 92.58 | 75.97 |
Risk Indicators & Red Flags
- Restatements (Q3’23): Company restated certain 2023 interim statements and disclosed persistent material weaknesses; however, clawback review concluded no incentive recovery required; remediation is ongoing .
- Hedging/Pledging: Prohibited for officers/directors—reduces misalignment risk (no pledging overhang) .
- Related parties: Several founder-related leases and a founder relative employed; none specific to Veltri disclosed .
- Tax gross-ups/option repricing: Not disclosed.
Compensation Peer Group (2024)
Beyond, Inc.; Capri; Ethan Allen; Floor & Decor; Haverty; La-Z-Boy; Movado; Oxford; Purple Innovation; RH; Sleep Number; Tapestry; Tempur Sealy; The Aaron’s Company; The Lovesac Company; The RealReal; Vera Bradley; Williams-Sonoma .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay support: ~98% approval, indicating broad investor acceptance of the program design .
Investment Implications
- Alignment: High proportion of at-risk equity (multi-year PSUs with 0–200% range) and AIP tied to EBITDA/demand supports pay-for-performance; pledging/hedging prohibitions further align interests .
- Retention vs. supply overhang: Significant unvested RSUs/PSUs and scheduled 2025–2027 vesting dates promote retention but may create periodic selling pressure (notably around March, November, and April anniversaries) .
- Execution signal: 2024 AIP zero payout (despite demand at target) reflects discipline around profitability; 2022 PSU cycle paid at 110.27% indicating multi-year goal attainment on demand and EBITDA .
- Contract risk: Cash severance is modest (~0.5x salary plus 6 months COBRA), limiting single-trigger cash costs; equity acceleration follows plan-based rules (death/disability/CIC) with double-trigger elements around CIC for RSUs/PSUs .