J.C. Watts, Jr.
DILLARD'SAbout J.C. Watts, Jr.
J.C. Watts, Jr., 67, is an independent director of Dillard’s, Inc., serving since August 2009 and previously from 2003–2008; he currently sits on the Audit Committee and is deemed “financially literate” under NYSE rules . He chairs J.C. Watts Companies and has a public policy background as a former U.S. Congressman (OK‑4, 1995–2003) and House Republican Conference Chair (1998), bringing regulatory and governmental expertise; he also chaired Black News Channel until 2022 and has served on U.S. delegations and non‑profits . The Board has determined he is independent under NYSE standards, with the company operating as a NYSE “controlled company” (reduced independence requirements) and no lead independent director (executive sessions are presided by a rotating independent director) .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| U.S. House of Representatives (OK‑4) | U.S. Congressman | 1995–2003 | Chair, House Republican Conference (1998); served on Armed Services, Transportation & Infrastructure, Banking; authored Homeland Security Select Committee legislation; led trade missions to Africa; co‑authored community renewal legislation |
| J.C. Watts Companies | Chairman | Past five years (ongoing) | Consulting/advocacy; regulatory and policy expertise relevant to DDS |
| Black News Channel | Chairman | Until 2022 | Media leadership; governance experience |
| Watts Equipment | Chairman | Not disclosed | Leadership/operations experience |
External Roles
| Company | Role | Status | Notes |
|---|---|---|---|
| Paycom Software, Inc. | Director | Current | Outside public board |
| CSX Corporation | Director | Prior | Outside public board |
| ITC Holdings Corp. | Director | Prior | Outside public board |
| Burlington Northern Santa Fe Corporation | Director | Prior | Outside public board |
| Clear Channel Communications, Inc. | Director | Prior | Outside public board |
| Terex Corporation | Director | Prior | Outside public board |
Board Governance
- Committee assignments: Audit Committee member (committee chaired by Reynie Rutledge; members: Rutledge, Watts, Nick White); Audit Committee held 10 meetings in fiscal 2024; all members independent for audit committee purposes and financially literate .
- Independence and controlled company: DDS qualifies as a “controlled company” under NYSE rules and can rely on exemptions from majority‑independent board/committees; Board determined Class A nominees (including Watts) are independent under company by‑laws and NYSE standards .
- Attendance and engagement: Board met 4 times in the last fiscal year; all directors attended at least 75% of Board and committee meetings; all directors except Warren Stephens attended the May 18, 2024 annual meeting, implying Watts attended .
- Leadership structure: CEO (William Dillard II) serves as Chairman; no lead independent director; non‑management directors select a presiding independent director for executive sessions .
Fixed Compensation
Director pay mix is cash retainer plus time‑based restricted stock under the 2005 Non‑Employee Director Restricted Stock Plan; chair retainers are additional for committee chairs.
| Component | FY 2023 (ended Feb 3, 2024) | FY 2024 (ended Feb 1, 2025) |
|---|---|---|
| Cash Fees ($) | $100,000 | $100,000 |
| Stock Awards ($) | $142,250 (grant date fair value; equal to average market price of 500 shares on grant date; vested as of FY end) | $173,400 (grant date fair value; equal to average market price of 400 shares on grant date; vested as of FY end) |
| Committee Chair Fees ($) | N/A (Audit Chair retainer $30,000 applies to chair; Watts not chair) | N/A (Audit/Comp Chair retainer $30,000 continues; Watts not chair) |
| Meeting Fees ($) | $0 | $0 |
Plan mechanics: Non‑employee directors receive restricted shares under the 2005 Plan; awards vary by year/participant; annual awards in 2023 totaled 4,500 shares across non‑employee directors; individual awards subject to Stock Award Agreement and minimum 6‑month restricted period; plan share cap 500,000 .
Performance Compensation
Directors do not have performance‑based pay (no non‑equity incentives, options, or PSUs; restricted stock is time‑based).
| Metric Type | FY 2023 | FY 2024 | Notes |
|---|---|---|---|
| Non‑Equity Incentive Plan ($) | $0 | $0 | No annual bonus for directors |
| Stock Options/PSUs | None | None | No option or performance share grants |
| Performance Metrics (TSR, EBITDA, Revenue) | Not used | Not used | Director equity is time‑based restricted stock under the 2005 Plan |
- Clawback: Company’s compensation recovery policy applies to current/former Section 16 executive officers (not directors), requiring recovery of erroneously awarded incentive compensation after restatements, irrespective of misconduct .
- Anti‑hedging: Directors and associates are prohibited from hedging company equity (e.g., swaps, collars, exchange funds) .
Other Directorships & Interlocks
| Relationship Type | Entity | Nature | Potential Conflict |
|---|---|---|---|
| Outside Public Board | Paycom Software, Inc. | Current directorship | None disclosed with DDS |
| Prior Public Boards | CSX, ITC Holdings, BNSF, Clear Channel, Terex | Former directorships | None disclosed with DDS |
- Related party transactions: The proxy lists multiple related‑party transactions (Stephens Insurance; The Connor Group; family members of Dillard executives), but none involve J.C. Watts, Jr. .
- Approval process: Related‑party transactions reviewed by disinterested directors under Board policy; no fixed standards disclosed .
Expertise & Qualifications
- Financial literacy (NYSE) and Audit Committee service provide oversight experience in financial reporting and controls .
- Public policy/regulatory expertise from Congressional tenure and committee work (Armed Services, Transportation & Infrastructure, Banking; Homeland Security Select Committee) and international delegation leadership .
- Governance and leadership experience through chair roles at J.C. Watts Companies, Watts Equipment, and Black News Channel .
Equity Ownership
| As of | Class A Shares Beneficially Owned | % of Class A | Pledged Shares |
|---|---|---|---|
| March 21, 2024 | 11,400 | * (<1%) | 1,000 |
| March 20, 2025 | 10,600 | * (<1%) | 500 |
- Outstanding shares: 11,710,808 Class A and 3,986,233 Class B at March 20, 2025 (ownership % shown in proxy tables; “*” denotes <1%) .
- Ownership guidelines: No director stock ownership guidelines disclosed in proxy; plan purpose is to encourage director ownership via restricted shares .
Governance Assessment
- Strengths: Independent director; Audit Committee member with NYSE “financially literate” designation; strong attendance (≥75% of Board/committee meetings) and annual meeting participation; anti‑hedging policy enhances alignment .
- Red flags: Shares pledged as loan collateral (1,000 in 2024; 500 in 2025), which can create forced‑sale risk and misalignment in stress scenarios; highlight for investor monitoring .
- Environment risks: Controlled company structure reduces required independence (no lead independent director; CEO as Chair), concentrating control and potentially weakening board counterbalance; continued reliance on time‑based equity for directors with no performance link .
- Conflicts: No related‑party transactions disclosed involving Watts; company discloses several transactions with other directors/entities and reviews them via disinterested directors .
- Compliance: No delinquent Section 16 filings reported for Watts; the company reported limited delinquencies for others in FY2024 .