Mike Dillard
DILLARD'SAbout Mike Dillard
Mike Dillard, age 73, is Executive Vice President of Dillard’s, Inc. and heads one of the largest merchandising portions of the business; he has been a member of the Board since 1976 and has spent his entire professional career at the company . His compensation is primarily tied to company profitability via the Senior Management Cash Bonus Plan, which pays from a pool driven by pre-tax income and change in pre-tax income, with his allocation set at 10% of the pool in recent years . The company does not use TSR as a performance measure in its executive compensation program, though the proxy includes pay-versus-performance illustrations benchmarking compensation actually paid against cumulative TSR and profit metrics . Say-on-pay support was high (approximately 98% approval in 2023; next vote in 2026), suggesting broad shareholder acceptance of the pay program design .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Dillard’s, Inc. | Various merchandising leadership roles culminating in Executive Vice President | Career-long (Board member since 1976) | Deep understanding of regional merchandising across geographies; leadership of a major merchandising division |
External Roles
| Organization | Role | Years | Strategic impact / notes |
|---|---|---|---|
| W.D. Company, Inc. | Officer and Director | Current (as of 2024–2025) | Along with William Dillard II and Alex Dillard, jointly controls voting/dispositive power over W.D. Company’s holdings, which include virtually all Class B shares; each owns a significant percentage of W.D. Company voting stock; they disclaim beneficial ownership of those DDS shares |
Fixed Compensation
- Base salary history
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 800,000 | 830,000 | 830,000 |
| YoY change | — | +3.8% | 0% |
- Cash bonus plan allocation and payout
| Item | FY 2023 | FY 2024 |
|---|---|---|
| Bonus pool formula | 1.5% of pre-tax income + 3.5% of increase in pre-tax income (if any) | 1.5% of pre-tax income + 3.5% of increase in pre-tax income (if any) |
| Company pre-tax income (reference) | $916,617,000 (FY23) | $729,701,000 (FY24) |
| Assigned percent of pool (Mike Dillard) | 10% | 10% |
| Actual cash bonus ($) | 1,374,800 | 1,094,600 |
- All other compensation (illustrative latest year detail)
| Component (FY 2024) | Amount ($) |
|---|---|
| Company contributions under Retirement Plan & Stock Purchase Plan | 104,985 |
| Personal use of company aircraft (incremental cost) | 6,517 |
| Insurance premiums paid by the company | 34,862 |
| Total “All Other Compensation” | 146,364 |
Notes: Company indicates no severance arrangements beyond pension plan and maintains tax deductibility considerations under Section 162(m) .
Performance Compensation
- Annual cash bonus design (pay-for-performance engine)
| Year | Metric | Weighting | Target | Actual Company Result Used | Payout to Mike Dillard ($) | Vesting |
|---|---|---|---|---|---|---|
| FY 2023 | Pre-tax income; change in pre-tax income determines pool; individual gets fixed % of pool | N/A | No individual target; max any one NEO is 1% of pre-tax income | Pre-tax income $916,617,000; pool = 1.5% of pre-tax (no increase YoY) | 1,374,800 | Paid after fiscal year |
| FY 2024 | Pre-tax income; change in pre-tax income determines pool; individual gets fixed % of pool | N/A | No individual target; max any one NEO is 1% of pre-tax income | Pre-tax income $729,701,000; pool = 1.5% of pre-tax (decline YoY) | 1,094,600 | Paid after fiscal year |
- Equity awards (Stock Bonus Plan; formulaic, immediate vesting)
| Grant (fiscal year) | Grant date | Plan mechanics | Shares granted (#) | Grant date fair value ($) | Vesting |
|---|---|---|---|---|---|
| FY 2023 awards | Not separately stated (grants during FY 2023 per table) | Annual stock award = 6% of cash compensation >$15k divided by FMV; formulaic | 391 | 153,013 | No vesting; treated as vested on grant |
| FY 2024 awards | Jan 31, 2025 | Same formula as above | 280 | 131,388 | No vesting; treated as vested on grant |
Notes: Company reported no stock options outstanding/unvested at FY2024 year-end and did not issue option awards; stock awards under the Stock Bonus Plan vest immediately .
Equity Ownership & Alignment
- Beneficial ownership (Class A)
| As of | Class A shares | % of Class A | Ownership detail |
|---|---|---|---|
| Mar 21, 2024 | 543,485 | 4.4% | 535,575 direct; 7,300 in trust with sole voting/dispositive power; 610 in trust over which his wife has sole voting power (shared voting deemed) |
| Mar 20, 2025 | 544,463 | 4.6% | 536,553 direct; 7,300 in trust with sole voting/dispositive power; 610 in trust over which his wife has sole voting power (shared voting deemed) |
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Capital structure/control context
- W.D. Company, Inc. owns 41,496 Class A and approximately 99.99% of Class B; Mike Dillard, Alex Dillard, and William Dillard II are officers/directors of W.D. Company and own 26.3%, 27.9%, and 27.4% of its voting stock, respectively; they act by majority over those shares and disclaim beneficial ownership of W.D. Company-held DDS shares .
- Anti-hedging policy prohibits hedging transactions by directors and associates; insider trading policy favors trading under pre-established 10b5-1 plans and prohibits trading while in possession of MNPI .
- No pledges disclosed for Mike Dillard; proxy footnote notes a pledge by another director (not Mike) .
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Outstanding equity status
- No outstanding stock options or unvested stock awards at February 1, 2025 for NEOs; Stock Bonus Plan awards vest immediately .
Observation: Immediate-vest stock awards are small versus his ownership (e.g., 280 shares in FY2024 vs 544,463 total Class A shares ≈ 0.05%), suggesting minimal incremental selling pressure from new grants .
Employment Terms
| Term | Details |
|---|---|
| Employment agreement | No individual severance/change-in-control agreements; company states no severance arrangements beyond Pension Plan features . |
| Annual bonus plan | Eligibility limited to CEO, President, EVPs, and SVPs; bonus pool = 1.5% of pre-tax income + 3.5% of the increase in pre-tax income; individual assignments by percent of pool (Mike Dillard: 10% in FY2023–2024) . |
| Equity plan | Stock Bonus Plan awards formulaically grant stock worth 6% of total cash compensation >$15k; grants vest immediately . |
| Pension plan (non-qualified) | Present value of accumulated benefit: $23,505,214 as of Feb 3, 2024; $24,566,734 as of Feb 1, 2025 . |
| Change-in-control (CIC) pension feature | Lump-sum payout within 60 days of CIC; estimated Mike Dillard payment: $30,998,124 (as of FY2023 end) and $30,839,334 (as of FY2024 end) . |
| Clawback policy | Compliant with Exchange Act Section 10D and NYSE rules; requires recovery of erroneously awarded incentive compensation (without regard to misconduct) for the three completed fiscal years prior to a restatement . |
| Non-compete / non-solicit | Not disclosed in proxy. |
| Perquisites | Enhanced health insurance; access to company aircraft for personal use (incremental cost basis reported) . |
| Nonqualified deferred comp treatment | Nonqualified deferred compensation earnings included in SCT; company states it does not pay above-market interest . |
Board Governance & Director Compensation
- Board service: Mike Dillard has served on the Board since 1976; he is an employee director (not independent) . The company combines the CEO and Chairman roles (William Dillard II) and does not have a Lead Independent Director; independent directors hold executive sessions with a presiding independent director .
- Committee roles: Audit Committee (independent directors only) and Compensation Committee (independent directors only); Executive Committee functions in lieu of a nominating committee and is composed of Alex Dillard and William Dillard II; Mike Dillard is not listed as a member of these committees .
- Compensation Committee composition changes: 2023–2024 membership included Connor (Chair), Freeman, White; 2024–2025 membership updated to Connor (Chair), Freeman, Hastings .
- Director pay (non-management): Annual cash retainer $100,000; 400 restricted shares (vesting six months post-issuance); committee chairs receive additional $30,000; employee directors (including Mike Dillard) are not separately compensated for board service .
Compensation Structure Analysis
- Mix and trend: Base salary held flat at $830,000 in FY2024 after a 3.8% raise in FY2023; variable cash decreased alongside lower pre-tax income (bonus from $1.37M to $1.09M); equity awards are small, formulaic, and immediately vested; no options granted .
- Pay-for-performance linkage: Cash bonus is mathematically tied to pre-tax income and (if positive) its increase; individual payout is a fixed percentage of the pool (10% for Mike), aligning payouts with profitability cycles rather than discretionary measures .
- Risk/leverage considerations: Absence of long-term performance-vesting equity (e.g., PSUs/TSR metrics) reduces long-dated retention and performance convexity versus peers; however, significant stock ownership and a sizable non-qualified pension create retention anchors .
- Governance signal: High say-on-pay approval (~98% in 2023); base salaries below median of peer group; L Brands removed from peer set in 2023; company uses independent compensation consultant input for market analysis .
Multi‑Year Compensation (Summary Compensation Table items)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | Nonqualified Deferred Comp Earnings ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | 800,000 | 373,406 | 1,738,100 | 7,225,208 | 347,849 | 10,484,563 |
| 2023 | 830,000 | 153,013 | 1,374,800 | 2,273,453 | 160,053 | 4,791,319 |
| 2024 | 830,000 | 131,388 | 1,094,600 | 1,061,520 | 146,364 | 3,263,872 |
Performance & Track Record
- Role execution: Leads one of the company’s largest merchandising portfolios, with long tenure and deep regional merchandising expertise across geographies .
- Company-level performance references in pay design: The compensation program links annual variable pay to company pre-tax income and its change; the proxy includes graphs relating compensation actually paid to non-CEO NEOs and CEO versus cumulative TSR, net income, and pre-tax income, but the company does not use TSR directly in pay decisions .
Say-On-Pay & Shareholder Feedback
- Say-on-pay approval: Approximately 98% approval at the 2023 Annual Meeting; next vote scheduled for 2026 following the triennial frequency vote outcome .
Compensation Peer Group
- Practices: Company reviews compensation levels versus a retail peer group and uses an independent consultant; base salaries are below peer median; not strictly benchmarking targets to percentiles .
- Composition change: L Brands was removed from the peer group due to its separation into two units (considered less relevant) .
Related Party Transactions and Interlocks
- Oversight: Related-party transactions are reviewed by disinterested directors under a board policy; standards are set case-by-case .
- Control structure: W.D. Company ownership and family roles create concentrated voting control via Class B stock; Mike Dillard is an officer/director of W.D. Company .
Equity Awards and Vesting Detail
| Fiscal year | Option Awards (exercised/shares) | Option Value ($) | Stock Awards (vested/shares) | Value Realized ($) | Vesting terms |
|---|---|---|---|---|---|
| 2023 | — | — | 391 | 153,013 | Immediate vesting on grant (Stock Bonus Plan) |
| 2024 | — | — | 280 | 131,388 | Immediate vesting on grant (Stock Bonus Plan) |
Employment Economics on Change-in-Control (Pension Plan)
| As of date | CIC Lump-Sum Estimate ($) |
|---|---|
| Feb 3, 2024 (FY2023 end) | 30,998,124 |
| Feb 1, 2025 (FY2024 end) | 30,839,334 |
Investment Implications
- Alignment and control: Very high insider alignment via material personal holdings and family control of Class B through W.D. Company, but this also concentrates governance power; the board combines CEO/Chair and has no Lead Independent Director, though independent director executive sessions occur .
- Pay design: Strong linkage to profitability through a formulaic cash bonus tied to pre-tax income, but limited use of long-term performance-vesting equity (no PSUs/TSR), which can reduce multi-year performance alignment relative to peers; equity grants are small and immediately sellable but are immaterial versus his ownership base .
- Retention risk: Despite immediate-vest equity, retention is supported by substantial accumulated pension value and long tenure; there are no individual severance protections beyond the pension plan’s CIC lump-sum feature .
- Monitoring signals: Track (i) changes to his bonus pool allocation, (ii) pension discount-rate sensitivity (affects reported deferred compensation and pension values), (iii) any Form 4 activity despite the anti-hedging policy, and (iv) governance developments around committee composition and any emergence of a Lead Independent Director .