Ken Seipel
Citi TrendsAbout Ken Seipel
Kenneth D. “Ken” Seipel, age 64, is Chairman and Chief Executive Officer of Citi Trends (CTRN). He joined the board in 2019, became Interim CEO on June 2, 2024, permanent CEO on November 18, 2024, and Chairman on April 2, 2025 . Under his leadership, CTRN reported Q3 2024 comps of +5.7% and gross margin +160 bps YoY to 39.8% , and the company later guided to mid-to-high single digit Q1 2025 comps, citing improved traffic and basket size . CTRN’s pay-versus-performance disclosure shows TSR fluctuations over recent years and identifies Adjusted EBITDA ex. bonus and equity (B&E) as the primary performance measure for NEO pay in 2024 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| West Marine, Inc. | CEO; later Lead Independent Director | CEO 2019–2021; Lead Independent Director since Aug 2021 | Led turnaround to record profits and successful transaction; governance leadership post-CEO |
| Gabriel Brothers (Gabe’s) | Chief Executive Officer | 2013–2017 | Drove record profitability; private transaction at 3x investment value for PE owner |
| Wet Seal, Inc. | President & COO | 2011–2013 | Stabilized business, restored cash, optimized real estate and working capital |
| Pamida Discount Stores | President & Chief Merchandise/Marketing Officer; CRO/Interim CEO | 2009–2011 | Restructuring and turnaround; merger as growth strategy |
| Old Navy (Gap Inc.) | EVP Stores, Operations & Store Design | 2003–2008 | Scaled to ~$7B and >1,000 stores during brand growth phase |
| Target, Shopko, JCPenney | Merchandising/operations leadership roles | Earlier career | Multi-format retail operations and merchandising experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| West Marine, Inc. | Lead Independent Director | Since Aug 2021 | Former CEO (2019–2021) |
Fixed Compensation
| Component | 2024 Terms | Notes |
|---|---|---|
| Base salary | $725,000 | Set for Interim CEO (June 2, 2024) and continued as permanent CEO from Nov 18, 2024 |
| Starting bonus (one-time) | $70,000 | Paid upon Interim CEO appointment |
Performance Compensation
Annual Incentive (FY2024)
| Metric | Weight | Threshold/Target/Max | FY2024 Target | FY2024 Actual | Payout |
|---|---|---|---|---|---|
| Sales | 45% | 100%/—/125% of target | $775.0M | $753.1M | 0% (below threshold) |
| Adjusted EBITDA (ex. incentive) | 55% | 100%/—/200% of target | $19.4M | $(11.3)M | 0% (below threshold) |
Notes:
- CEO target annual bonus 66% of base salary (0–200% payout range). No FY2024 annual bonuses were earned by NEOs as both metrics were below thresholds .
Equity Awards (2024 grants to Seipel)
| Grant | Date | Amount/Condition | Vesting |
|---|---|---|---|
| Fully vested RS | 06/02/2024 | ~$400,000 fair value | Vested at grant (Interim CEO) |
| Monthly RS installments | 7/2, 8/2, 9/2, 10/2, 11/2/2024 (5 of 9 shown for FY) | $88,889 each (shares determined at 6/2 price) while serving as Interim CEO | Each installment vests 1/3 on 6/2/2025, 6/2/2026, 6/2/2027 if serving as CEO or Board member |
| Time-based RS | 11/18/2024 | 80,000 shares | Vests ratably over 3 years starting 11/18/2025 |
| Performance-based restricted shares | 11/18/2024 | ~321,502 shares at target; six stock-price hurdles (45-day average): $23.75 (29%), $28.50 (20%), $34.20 (16%), $41.04 (14%), $49.25 (11%), $59.10 (10%) | Earn-out over 3-year performance period; earned shares vest within a 4-year schedule (two-thirds at 3 years, one-third at 4 years per 11/19 8-K; proxy describes four-year vesting window) |
Additional context on company-wide LTIs in 2024:
- Other NEOs (not CEO) received time-based RS (3-year vest) and PSUs tied to cumulative Adjusted EBITDA ex. B&E for FY2024–FY2026: threshold below $79.1M (0%), target $98.8M (100%), max $118.6M (200%) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Stock ownership guidelines | CEO and directors: 3x base salary/cash retainer; others: 2x salary; 5 years to comply; 75% retention of shares from company grants until met |
| Anti-hedging/pledging | Directors and officers prohibited from short sales, hedging and pledging company securities |
| Unvested time-based RS at FY2024 YE | 80,000 (11/18/24 grant) plus five 3,639-share monthly tranches (July–Nov 2024) outstanding at 2/1/2025 |
| Unearned performance shares at FY2024 YE | 321,502 (price-hurdle award at target) |
| Shares vested in 2024 (value realized) | 20,431 shares; $491,744 value realized on vesting |
Implications for selling pressure:
- First sizable vest events begin 6/2/2025 (monthly RS installments) and 11/18/2025 (80k RS year-1 tranche). However, 75% post-vesting retention until guideline compliance and anti-pledging policy reduce near-term forced selling risk . The large performance-based award only earns with sustained stock price appreciation over 45 consecutive trading days per hurdle, strongly aligning with TSR before shares vest .
Employment Terms
| Term | Detail |
|---|---|
| Agreements | Employment, Non-Compete, Non-Solicit & Confidentiality; Severance Agreement |
| Non-compete | During employment and 1 year post-termination |
| Non-solicitation | Vendors: 18 months; Employees: during employment and 2 years post-termination |
| Severance (without cause or good reason) | 12 months base salary + 12 months COBRA (CEO has good reason protection even outside CoC) |
| Change-in-control equity acceleration | All time-based restricted stock vests upon CoC; performance awards vest based on plan provisions; See values below |
| Clawback policy | Adopted Dec 1, 2023; applies to current/former executive officers for 3 prior fiscal years upon material non-compliance restatement |
Potential Payments (as of 2/1/2025)
| Scenario | Cash Severance | COBRA | Accelerated Unvested Equity | Total |
|---|---|---|---|---|
| Termination without cause (no CoC) | $725,000 | $16,200 | — | $741,200 |
| Termination without cause or qualifying resignation in connection with CoC | $725,000 | $16,200 | $10,870,152 | $11,611,352 |
| Change in control (equity acceleration only) | — | — | $10,870,152 | $10,870,152 |
Board Governance (Dual Role and Committees)
- Roles: Combined Chairman and CEO since April 2, 2025, after previously separating roles; board appointed a Lead Independent Director (David Heath) to enhance independent oversight .
- Composition: Super-majority independent board; all Audit, Compensation, and Nominating & Corporate Governance committees composed entirely of independent directors .
- Committee memberships: Seipel serves on the Finance Committee; post-2025 meeting plan keeps him on Finance; Lead Independent Director presides in executive sessions and acts as primary liaison .
- Attendance: Each current director attended at least 80% of 2024 eligible meetings .
- Policy: Majority voting standard for uncontested elections; robust risk and cyber oversight via committees .
Director compensation note:
- Non-employee director fees and equity are standard, but the proxy excludes Seipel (as CEO) from the director compensation table; he does not receive separate director retainers while serving as CEO .
Compensation Structure Analysis
- Strong equity-at-risk for CEO: Large 2024 performance-based stock grant vests only upon sustained stock price hurdles, with no further equity during the 3-year performance period—tight TSR alignment .
- Cash vs equity mix: Elevated equity weight in 2024 given transition awards; annual bonus was zero due to below-threshold results—clear pay-for-performance linkage .
- Governance safeguards: No option repricing, no tax gross-ups, clawback policy in place; anti-hedging/pledging; minimum vesting standards under 2021 plan .
- Peer benchmarking: Compensation Committee used a peer group (Boot Barn, Hibbett, Buckle, Shoe Carnival, Cato, Tilly’s, DXL, Zumiez, Five Below) and Korn Ferry advice; target positioning considers role and performance, not fixed percentiles .
Performance & Track Record
Operational highlights under Seipel’s leadership
- Q3 2024: Sales $179.1M, comps +5.7%, GM 39.8% (+160 bps YoY); improved product and allocation methods drove traffic .
- Q1 2025 (intra-quarter update): Company expected mid-to-high single digit comp growth; momentum from Q4 performance, with traffic and basket improvements .
Company financial performance context (last 8 quarters)
| Metric | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|---|---|---|---|
| Revenue ($) | 179,520,000* | 215,179,000* | 186,289,000* | 176,552,000* | 179,066,000* | 211,172,000* | 201,728,000* | 190,750,000* |
| Net Income ($) | (3,863,000)* | 3,551,000* | (3,426,000)* | (18,413,000)* | (7,152,000)* | (14,179,000)* | 871,000* | 3,818,000* |
| EBITDA ($) | (1,076,000)* | 7,956,000* | (2,176,000)* | (18,851,000)* | (1,897,000)* | 10,194,000* | 4,923,000* | (2,632,000)* |
| EBITDA Margin (%) | (0.60%)* | 3.70%* | (1.17%)* | (10.68%)* | (1.06%)* | 4.83%* | 2.44%* | (1.38%)* |
| Gross Margin (%) | 38.20%* | 39.12%* | 38.67%* | 31.11%* | 39.78%* | 38.85%* | 39.56%* | 39.99%* |
Values retrieved from S&P Global.*
Say-on-Pay & Shareholder Feedback
- Say-on-pay approvals: ~97% (2024), 96% (2023), 98% (2022) of votes cast, indicating strong shareholder support .
- Stockholder engagement: Ongoing outreach on strategy, performance, governance, and compensation; majority voting; annual SOP and auditor ratification votes .
Compensation Peer Group (Benchmarking)
- Peer retailers used in 2024: Boot Barn, Hibbett, Buckle, Shoe Carnival, Cato, Tilly’s, Destination XL, Zumiez, Five Below; Korn Ferry advised and assessed independence .
Related-Party and Activism Context
- Amended and Restated Cooperation Agreement (Mar 25, 2025) with Fund 1 Investments: added two directors (Calvert, Edwards), appointed Seipel as Chairman and Heath as Lead Independent Director, standstill and voting commitments, board size capped at 8 post-2025 meeting .
- Prior (2024) cooperation agreement and reimbursement of $150,000 to Investor (Fund 1) disclosed; terminated Feb 2025 .
Risk Indicators & Red Flags
- Dual Chairman/CEO structure: increases concentration of power; mitigants include Lead Independent Director, independent committees, and regular executive sessions .
- Share pool increase: 500,000 additional shares requested for the 2021 Plan (approx. 6% of outstanding), with 3-year average burn rate ~4%—potential dilution; plan includes strong governance features (no repricing, minimum vesting, no single-trigger if assumed) .
- No pledging/hedging allowed; clawback policy in place; no tax gross-ups; no option repricing history—reduces governance risk .
Investment Implications
- Alignment: Seipel’s 2024 performance-based award requires sustained share price appreciation across six hurdles over 3 years and then time-vests—high TSR alignment with limited near-term grant overhang (no further equity during the performance period) .
- Selling pressure: Time-based vests begin 6/2/2025 and 11/18/2025, but 75% retention until ownership guideline compliance and anti-pledging reduce near-term selling risk; price-hurdle shares require multi-quarter performance before vesting .
- Pay-for-performance: Zero annual bonus in FY2024 despite transition underscores discipline; if revenue and EBITDA trajectory sustain (mid-to-high single-digit comps guide, GM nearing 40%), incentive realization could follow, but execution risk remains given recent losses and EBITDA volatility .
- Governance: Dual role adds oversight risk, partially mitigated by Lead Independent Director and committee independence; investors may monitor say-on-pay continuity, equity plan usage/dilution, and progress against financial targets .
Notes: All compensation, governance, and qualitative statements are sourced from CTRN’s 2025 DEF 14A and 8-Ks as cited. Financial table values marked with an asterisk are retrieved from S&P Global.
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