Jay Schottenstein
Designer BrandsAbout Jay Schottenstein
Executive Chairman of Designer Brands Inc. (DBI) since 2005; previously CEO (2005–2009). Age 70. Also Chairman & CEO of Schottenstein Stores Corporation (SSC) since 1992 and CEO of American Eagle Outfitters (AEO) since 2015 (Executive Chairman/Chairman and director of AEO since 1992). Deep retail leadership, real estate, and M&A experience; long-tenured insider with significant voting control at DBI via Class B shares. DBI’s FY2024 results: net sales down 2.1% to $3.0B and a net loss attributable to DBI of $10.5M (loss/diluted share $0.20). Say‑on‑pay support was ~95% at the 2024 annual meeting, and the company emphasized no FY2024 bonus/PSU payouts due to missed goals, reinforcing pay-for-performance design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Designer Brands Inc. | Executive Chairman | 2005–present | Board leadership, strategy oversight; separated CEO and Executive Chairman roles since 2009 . |
| Designer Brands Inc. | Chief Executive Officer | 2005–2009 | Led company operations during tenure as CEO . |
| Schottenstein Stores Corporation (SSC) | Chairman & CEO | 1992–present | Multi-decade operating and governance leadership across affiliated retail/real estate interests . |
| Retail Ventures, Inc. | Chairman/CEO/other executive roles | Since 1976 | Longstanding executive roles across Schottenstein family enterprises . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Eagle Outfitters (NYSE: AEO) | CEO; Executive Chairman/Chairman; Director | CEO since 2015; Exec Chair/Chairman & Director since 1992 | Public company CEO and long-tenured board leader . |
| Schottenstein Realty LLC | Chairman; Lead Manager | N/A | Real estate leadership roles . |
| Albertsons Companies, Inc. | Director | 2006–2022 | Former public company board service . |
Fixed Compensation
Multi-year summary compensation (NEO; dollars):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $989,231 | $1,019,231 | $1,000,000 |
| Non-Equity Incentive (ICP) | $949,662 | $0 | $0 |
| Stock Awards (grant-date fair value) | $2,499,975 | $3,000,028 | $2,666,668 |
| All Other Compensation | $207,822 | $269,736 | $273,514 |
| Total | $4,646,690 | $4,288,995 | $3,940,182 |
- FY2024 “All Other Compensation” primarily reflects security arrangements for the Executive Chairman ($273,124) plus life insurance premium ($390) .
- No base salary increases for NEOs in FY2024; Executive Chairman remained at $1,000,000 .
Performance Compensation
Annual Cash Incentive (FY2024)
| Executive | Metric | Threshold | Target | Max | Actual Payout |
|---|---|---|---|---|---|
| Jay L. Schottenstein (Executive Chairman) | Operating Profit (company-wide) | $375,000 | $1,500,000 | $3,000,000 | $0 (0% payout; AOP below threshold) |
- For FY2024, annual incentive was based on overall operating profit; company achieved $67.6M Adjusted Operating Income, below threshold, so no ICP payout for any NEO .
Long-Term Incentives (FY2024 awards)
Design changed to a 3-year performance period composed of three separate 1-year cycles; PBRSUs = 50% and time-based RSUs = 50% of LTI. First cycle (FY2024) did not meet threshold; one‑third of PBRSUs forfeited; earned shares (if any in cycles 2–3) vest at the 3rd anniversary .
| Grant Type | Approval/Grant Date | Threshold | Target | Max | Vesting |
|---|---|---|---|---|---|
| Performance-Based RSUs (Cycle 1 of 3) | 3/28/2024 | 30,497 | 60,994 | 91,492 | First cycle forfeited (below threshold); earned shares vest 3 years from grant . |
| Time-Based RSUs | 3/28/2024 | — | 182,983 units | — | Cliff vest 3 years from grant . |
Vesting schedule and near-term events (as of FY2024 year-end):
- PBRSUs vest: 80,935 on 3/24/2025; 125,754 on 3/28/2027 .
- TBRSUs vest: 98,579 on 3/24/2025; 185,134 on 3/23/2026; 188,630 on 3/28/2027 .
- Shares acquired on vesting (FY2024 TBRSUs): 168,507 ($1,890,649 value); shares withheld for taxes resulted in 114,019 shares delivered .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 14,839,451 Class A shares (incl. 7,720,154 Class B exchangeable 1:1); 30.7% of Class A; 99.8% of Class B; combined voting power 67.4% (as of 3/31/2025) . |
| Options (exercisable) | 95,690 @ $37.50 exp 3/24/2025; 63,105 @ $23.21 exp 12/15/2025; 106,340 @ $27.00 exp 3/22/2026; 179,970 @ $19.02 exp 3/21/2027; 349,415 exercisable within 60 days of 3/31/2025 . |
| Unvested RSUs (year-end) | 553,278 time-based RSUs ($2,782,988 at $5.03) and 125,754 unearned PBRSUs ($632,543) . |
| Anti-hedging/anti-pledging | Company prohibits pledging and hedging; legacy pledge exception noted for another director; no pledge disclosed for Jay . |
| Ownership guidelines | CEO guideline increased to 3x salary (March 2025); director guideline = 5x cash retainer. Employee directors do not receive director pay; CEO guideline disclosed, not a separate Executive Chairman guideline . |
Implications:
- Significant insider control (67% voting power) supports long-term strategic continuity but raises minority shareholder governance considerations .
- 2025–2027 vesting events and 2025–2027 option expirations are potential trading/flow catalysts .
Employment Terms
| Topic | Jay L. Schottenstein |
|---|---|
| Employment Agreement | None; unlike other NEOs, Executive Chairman does not have a standard severance agreement . |
| Clawbacks | Dodd-Frank recoupment policy (effective 12/1/2023) and separate LTI plan recoupment provision . |
| Change in Control Treatment | Since fiscal 2021, performance share grants use “double trigger” (CIC + qualifying termination) for acceleration . |
Potential termination and CIC economics (FY2024 assumptions):
| Scenario | Salary Continuation | Target Cash Incentive | Accelerated Equity | Total |
|---|---|---|---|---|
| Death/Disability | $38,462 | $1,500,000 | $3,415,531 | $4,953,993 |
| Involuntary Termination due to Change in Control | — | $1,500,000 | $3,415,531 | $4,915,531 |
Notes: Other NEOs (not Jay) have standard agreements with 12–18 months salary continuation, pro‑rata ICP, partial acceleration, and COBRA reimbursements; definitions of “cause”/“good reason” summarized in proxy .
Board Governance
- Role and independence: Executive Chairman since 2005; not independent. Board does not appoint a Lead Independent Director; independent directors hold regular executive sessions chaired on a rotating basis. CEO and Executive Chairman roles are separated (since 2009) .
- Board composition and committees: >2/3 of the Board independent; all committees fully independent (Audit, Human Capital & Compensation, Nominating & Corporate Governance, Technology). Jay is not listed as a committee member -.
- Attendance: Four Board meetings in FY2024; all but one director met ≥75% committee/board attendance; average attendance >95% .
Dual-role implications:
- Separation of CEO and Executive Chairman mitigates concentration of day-to-day power; however, the Executive Chairman is non-independent and is a controlling shareholder, warranting focus on committee independence, executive sessions, and related-party oversight .
Related Party Transactions (Governance Red Flags/Controls)
| Category | FY2024 Amount | Notes |
|---|---|---|
| Total with SSC & affiliates | ~$10.0M | Aggregate of leases, services, corporate services . |
| Leases/Subleases with SSC affiliates | ~$7.2M | 13 DSW stores + 2 facilities; some % rent 2–7%; terms expiring 2025–2035 . |
| Services (media, consulting, corporate) | ~$2.8M | Media services, consulting (T&T Associates), corporate services . |
Policy safeguards: Related-person transactions reviewed/approved under a formal policy and subject to Ohio law fairness/approval standards; Articles include corporate opportunity provisions acknowledging SSC overlap; Audit Committee oversight .
Compensation Committee Analysis
- Committee members (independent): Elaine J. Eisenman (Chair), Peter S. Cobb, Joanna T. Lau, Joanne Zaiac .
- Independent consultant: Korn Ferry; director pay program updated in 2024 (equity retainer to $165k) .
- No committee interlocks; executives do not serve on other companies’ comp committees .
- Program design: Heavy “at-risk” pay; clawbacks; anti-hedging/pledging; no option repricing; double-trigger CIC for PSUs; limited perquisites (security for Executive Chairman) .
Performance Compensation – Detailed Table (FY2024)
| Component | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual ICP | Operating Profit | 100% | $1,500,000 | Below threshold | $0 | N/A |
| PBRSU (Cycle 1 of 3) | Adjusted Operating Income | N/A | 60,994 sh. target | Below threshold | 0% (one‑third forfeited) | Earned shares (if any) vest 3 years from grant |
| TBRSU | Time-based | N/A | 182,983 sh. | N/A | N/A | Cliff vest at 3 years |
Equity Awards – Upcoming Vesting and Options (Potential Selling Pressure)
| Date | Instrument | Shares |
|---|---|---|
| 3/24/2025 | PBRSU vest | 80,935 |
| 3/24/2025 | TBRSU vest | 98,579 |
| 3/23/2026 | TBRSU vest | 185,134 |
| 3/28/2027 | PBRSU vest | 125,754 |
| 3/28/2027 | TBRSU vest | 188,630 |
| 3/24/2025 | Options exp. | 95,690 @ $37.50 |
| 12/15/2025 | Options exp. | 63,105 @ $23.21 |
| 3/22/2026 | Options exp. | 106,340 @ $27.00 |
| 3/21/2027 | Options exp. | 179,970 @ $19.02 |
Equity Ownership & Voting Control (Skin-in-the-Game)
| Holder | Class A | Class B | % A | % B | Combined Voting Power |
|---|---|---|---|---|---|
| Jay L. Schottenstein | 14,839,451 | 7,720,154 | 30.7% | 99.8% | 67.4% |
- Options exercisable within 60 days: 349,415 shares .
- Anti-pledging policy in place; no pledge disclosed for Jay (legacy pledge noted for another director) .
Director/Board Service Snapshot (Governance Quality)
| Attribute | Status |
|---|---|
| Board independence | ~73% independent; Jay not independent; his son Joseph also not independent . |
| Committee independence | 100% independent across Audit, HCCC, NCGC, Technology -. |
| Lead independent director | None; executive sessions held with rotating chair among independents . |
| Attendance | 4 board meetings; >95% average attendance; one director under 75% threshold; Jay’s attendance not singled out as deficient . |
Say‑on‑Pay & Shareholder Feedback
| Year | Result |
|---|---|
| 2024 SOP | ~95% approval on NEO compensation . |
Company emphasized “no short-term or long-term incentives” were paid for FY2024 due to missed goals .
Employment Terms (Severance/CIC) – Program Summary
- Jay has no employment agreement; other NEOs have standard agreements (12–18 months base, pro‑rata ICP, 12–18 months equity acceleration, COBRA) with defined “cause”/“good reason” and double-trigger CIC equity acceleration under LTI plan .
- Clawbacks: Dodd-Frank compliant policy and LTI plan recoupment .
Investment Implications
- Alignment: Extremely high insider alignment and control (67% voting power) reduce agency risk but elevate governance/related-party optics; independent committee structure and formal related‑party review mitigate some risk - .
- Pay-for-performance: No FY2024 ICP or PBRSU cycle-1 payouts, and forfeiture of one‑third of 2024 PBRSUs underscores rigor; base salary held flat; security perquisite is modest vs total pay .
- Trading/flow watchlist: 2025–2027 vesting cliffs and multiple option expirations may create episodic supply; however, concentrated control and anti-hedging/pledging policies temper forced-selling risk .
- Governance overhang: Ongoing SSC leases/services (total ~$10M in FY2024) and family ties require continued Audit Committee oversight; Articles’ corporate opportunity provisions acknowledge overlap with SSC -.
- Board structure: Separation of CEO/Executive Chairman with no Lead Independent Director; robust independent committees and executive sessions partially offset chair non-independence -.