Charles Knight
About Charles Knight
Charles D. Knight, 60, is Executive Vice President and Chief Financial Officer of The Cato Corporation, serving since January 17, 2022 . He previously held senior finance roles at The Vitamin Shoppe (Chief Accounting Officer 2018–2019; CFO 2019–2020) and spent 28 years at Toys “R” Us, including SVP, Corporate Controller (2010–2018) . During FY2024, Cato’s sales fell to $642.1 million (down 8.3% YoY) and the company reported a net loss of $18.1 million; total shareholder return (TSR) value for 2024 was 28.14 (on $100 initial investment), reflecting a challenging environment and negative earnings .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Cato Corporation | EVP & CFO | 2022–present | Not disclosed in filings |
| The Vitamin Shoppe | EVP & CFO; previously SVP & Chief Accounting Officer | 2019–2020; 2018–2019 | Not disclosed in filings |
| Toys “R” Us | Various roles incl. SVP, Corporate Controller | ~1990–2018; SVP Controller 2010–2018 | Not disclosed in filings |
External Roles
No external public-company directorships mentioned in Cato’s executive officer disclosure for Mr. Knight .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 400,000 | 437,500 | 487,500 |
| Actual Cash Bonus Paid ($) | — (threshold not met) | — (threshold not met) | — (threshold not met) |
| All Other Compensation ($) | 90,254 (includes dividends, ESOP/401k, imputed life) | 18,625 (restricted stock dividends) | 22,808 (restricted stock dividends) |
Performance Compensation
Annual Cash Incentive (Non-Equity)
| Element | Fiscal 2024 Plan Detail |
|---|---|
| Metric(s) | Consolidated pre-tax, pre-bonus income; plus individual performance |
| Payout Range (NEOs) | Max opportunity 60%–75% of base salary (capped) |
| Threshold (20% payout) | Positive net income including bonus |
| Target (20% of bonus potential) | $14.2 million pre-tax, pre-bonus income |
| Maximum (100% payout) | $24.6 million pre-tax, pre-bonus income |
| FY2024 Payout (Knight) | $0 (threshold not met) |
Long-Term Equity (Restricted Stock)
| Grant Date | Award Type | Shares Granted | Grant-Date Fair Value ($) | Vesting Schedule | Notes |
|---|---|---|---|---|---|
| May 1, 2024 | Time-vest RS (Class A) | 19,341 | 92,063 | 33% on 3rd anniversary (2027), 33% in 2028, 34% in 2029 | Five-year schedule; vesting starts year 3; subject to ownership guidelines |
| May 1, 2023 | Time-vest RS (Class A) | 17,751 | 147,333 | 33% in 2026, 33% in 2027, 34% in 2028 | Five-year schedule; vesting starts year 3; subject to ownership guidelines |
| Stock Options | Not granted (company has not granted options for several years) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Mar 24, 2025) | 52,532 Class A shares; <1% of class |
| Beneficial Ownership (Mar 25, 2024) | 33,084 Class A shares; <1% of class |
| Unvested Restricted Shares (FYE 2024) | 51,168 shares; market value $171,413 at $3.35 closing price (Jan 31, 2025) |
| Vested vs Unvested | No Knight vestings reported in 2024; all Knight awards unvested at FYE 2024 |
| Upcoming Vesting Cadence (Plan-wide guidance) | Expected vesting across awards: 21% (2025), 25% (2026), 26% (2027), 19% (2028), 9% (2029) |
| Ownership Guidelines | NEOs must hold stock equal to 300% of base salary; cannot sell vested stock unless in compliance; up to 45% of vested shares may be sold to cover taxes |
| Hedging/Pledging | Hedging and short-term speculative trades prohibited; no pledging disclosed for Knight in proxy ownership table |
Employment Terms
- No employment or change-in-control agreements for NEOs; no special severance multiples disclosed .
- Change-in-control: unvested restricted stock vests immediately upon a change in control (subject to exceptions for material affiliation with acquirer) . If a CIC occurred on Feb 1, 2025, Knight would have 51,168 shares vest, worth $171,413 at $3.35 .
- Clawback policy (effective Dec 1, 2023): mandatory recovery of erroneously awarded incentive compensation for three completed fiscal years preceding a required restatement (applies even absent misconduct), with limited exceptions .
- Deferred compensation plan available; Knight made no deferrals in 2024 .
Performance & Track Record
| Measure | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|
| TSR (Value of $100) | 108.40 | 69.39 | 51.47 | 28.14 |
| Net Income (Loss) ($k) | 36,844 | 29 | (23,941) | (18,057) |
| Pre-tax, Pre-bonus Income (Loss) ($k) | 80,312 | 3,251 | (12,351) | (16,113) |
| Sales/Revenue ($m) | — | — | 700.3 | 642.1 |
Additional operating context:
- Dividend suspended (Nov 2024) amid macro and trend pressures .
- FY2024 store base reduced to 1,117 (from 1,178); plan in 2025 to open up to 15 and close up to 50 underperforming stores as leases expire .
- FY2025 Q1 results: net income $3.3m; same-store sales flat; buyback of 294,036 shares in the quarter .
Compensation Structure Analysis
- Year-over-year cash vs equity mix: Knight’s 2024 compensation was primarily salary with no annual bonus; equity grants continued but were reduced in 2024 (50% of LTI target broadly; Knight grant fair value $92k vs $147k in 2023) reflecting losses and dilution considerations .
- Shift to RSUs over options persists (no options “for several years”), lowering risk vs options and emphasizing retention via time-based vesting with 3-year cliff .
- Pay-for-performance: Annual bonus tied to profitability did not pay out in 2022–2024; thresholds were not met, indicating alignment of cash incentives with results .
- Peer group benchmarking maintained, with 2025 updates (added Tilly’s, Zumiez; removed Chico’s FAS, Express) to reflect market changes .
Risk Indicators & Red Flags
- Dividend suspension signals capital preservation in the face of losses (potential investor caution) .
- Single-trigger acceleration on CIC for equity (standard in plan) could incentivize alignment in a sale, though no employment/CIC cash protections for NEOs are in place .
- Clawback policy implemented under SEC/NYSE rules, strengthening governance over incentive pay .
- No related-party transactions disclosed for FY2024 .
Compensation Peer Group (2025)
Boot Barn, The Buckle, The Children’s Place, Citi Trends, J.Jill, Shoe Carnival, Tilly’s, Zumiez .
Say-on-Pay & Shareholder Feedback
- Committee reviewed prior say‑on‑pay results; no changes implemented for FY2024 as a direct result; next say‑on‑pay vote planned for 2026 .
Expertise & Qualifications
- Deep retail finance experience across multiple specialty retailers; roles include CFO and corporate controller functions (Vitamin Shoppe, Toys “R” Us), and principal financial officer certifications at Cato .
Investment Implications
- Near-term insider selling pressure appears limited: Knight had no 2024 vestings; his 2023 and 2024 grants begin vesting in 2026 and 2027, respectively; ownership guidelines restrict selling of vested shares until a 300% of salary multiple is maintained (except sales up to 45% to cover taxes) .
- Cash incentives remain tightly linked to profitability, with zero payouts when losses occur, supporting pay-for-performance alignment; however, persistent losses and dividend suspension underscore execution risk in the turnaround .
- Equity is time-based (no performance shares), emphasizing retention; single-trigger equity acceleration on CIC may provide upside for management in strategic alternatives but does not include cash parachutes, limiting potential entrenchment costs .
- CFO tenure since 2022 through significant operational and financial headwinds (sales declines, store rationalization), with governance controls (clawback, hedging bans) in place; watch for vesting cliffs in 2026–2028 as potential windows for tax-driven selling and for profitability thresholds that could reactivate annual bonus payouts .