Stephen Schlecht
DULUTH HOLDINGSAbout Stephen L. Schlecht
Founder and long-time director of Duluth Holdings Inc., age 77, currently serves as Chairman of the Board and Senior Advisor (since May 2021), and briefly served as Interim CEO from April 25–May 5, 2025 during a leadership transition . He has served on the Board since the Company’s founding in 1986, with prior roles including Executive Chairman (Feb 2015–May 2021), CEO (Aug 2019–May 2021), Chairman & CEO (Feb 2003–Feb 2015), and President (Feb 2003–Feb 2012) . Schlecht holds a B.S.B.A. and an M.B.A. from Northwestern University .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Duluth Holdings Inc. | Chairman of the Board; Senior Advisor | May 2021–present | Board leadership; member of Compensation and Nominating & Governance Committees |
| Duluth Holdings Inc. | Interim Chief Executive Officer | Apr 25–May 5, 2025 | Day-to-day leadership during CEO transition; no additional compensation |
| Duluth Holdings Inc. | Chief Executive Officer | Aug 2019–May 2021 | Oversaw strategic and operational leadership |
| Duluth Holdings Inc. | Executive Chairman | Feb 2015–May 2021 | Board leadership; strategy |
| Duluth Holdings Inc. | Chairman & CEO | Feb 2003–Feb 2015 | Led scaling of direct marketing and retail operations |
| Duluth Holdings Inc. | President | Feb 2003–Feb 2012 | Early operational leadership |
| GEMPLER’S, Inc. | Founder, President & CEO | 1986–Feb 2003 | Built and led direct marketing business |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| GEMPLER’S, Inc. | Founder, President & CEO | 1986–Feb 2003 | Led company prior to Duluth’s growth |
Board Governance
- Independence: Not independent (former CEO; current Senior Advisor; interim CEO in 2025) . Duluth is a NASDAQ “controlled company” because Schlecht controls a majority of voting power; thus it is exempt from certain independence requirements. Despite this, the Company maintains Compensation and Nominating & Governance Committees, but Schlecht serves on both committees .
- Committee memberships and chairs:
- Audit: Finch, Kennedy, Paschke, Riley; Chair and “financial expert” Susan J. Riley; 6 meetings in FY2024 .
- Compensation: Edwardson (Chair, retiring; Williams to become Chair), Robinson, S. Schlecht, Williams; 3 meetings in FY2024 .
- Nominating & Governance: Edwardson, Finch (Chair), Paschke, S. Schlecht, Williams; 4 meetings in FY2024 .
- Attendance: The Board held 5 meetings in FY2024; each incumbent director standing for election attended at least 75% of Board and committee meetings; all then-current directors attended the 2024 annual meeting .
- Say‑on‑pay signal: 93% approval at the 2024 annual meeting, indicating broad shareholder support for executive pay programs .
Fixed Compensation
| Component | Detail | Amount/Terms |
|---|---|---|
| Senior Advisor base compensation | Employment Agreement (2015), amended in 2021 and 2025; base salary with annual opportunity to increase; approximately $275,000 paid in FY2023 and FY2024 | ~$275,000 (FY2023 & FY2024) |
| Interim CEO compensation | No additional compensation while serving as Interim CEO (Apr 25–May 5, 2025) | $0 incremental |
| Equity eligibility | Not eligible for equity grants under the 2024 Equity Incentive Plan per his amended employment agreement | Not eligible |
| Role term | Employment ends on the date of the 2026 annual meeting unless ended earlier | Term to 2026 annual meeting |
Performance Compensation
| Plan/Metrics | FY2024 Structure | Outcome |
|---|---|---|
| Annual Incentive Plan (AIP) eligibility | Schlecht is eligible to participate “from time to time” in annual incentive bonus plans offered to senior executives . The AIP allows performance goals across metrics such as net income, revenue, EPS, ROE/ROA, cash flow, EBITDA, TSR, operating profit/margins, indebtedness, strategic objectives, customer satisfaction, productivity, innovation milestones, etc. | Eligibility noted; plan metrics defined |
| FY2024 metric design (Company) | CEO/CFO: 100% Adjusted EBITDA; CMO: Adjusted EBITDA (70%) + Net Sales (30%) | Thresholds not achieved; no annual incentive payouts to NEOs in FY2024 |
Note: No specific target bonus percentage or payout was disclosed for Schlecht in FY2024; only general eligibility was noted .
Other Directorships & Interlocks
| Company | Role | Interlocks/Notes |
|---|---|---|
| None disclosed | — | No other public company directorships disclosed in the proxy for Schlecht . |
Expertise & Qualifications
- Founder with over 53 years of direct marketing and retail experience; strategic vision and extensive leadership history at Duluth and GEMPLER’S .
- Education: B.S.B.A. and M.B.A., Northwestern University .
- Family relationship: Father of Richard W. Schlecht, SVP of Product Development & Sourcing .
Equity Ownership
| Holder | Class A Shares | Class A % | Class B Shares | Class B % | % Total Voting Power |
|---|---|---|---|---|---|
| Stephen L. Schlecht (personal) | 3,364,200 | 100.0% | 7,221,588 | 22.1% | 61.7% |
| S. & M. Schlecht Descendants Trust (co‑trustees other than S. Schlecht) | — | — | 8,694,295 | 26.6% | 13.1% |
- Voting Trust: Schlecht is sole trustee of the Duluth Holdings Inc. Voting Trust holding the Class A shares, with sole voting/dispositive power .
- Ownership guidelines: Chair must hold 3x cash base salary; Company reports all officers and directors are in compliance .
- Hedging/pledging: Prohibited for directors and employees under the insider trading policy .
Related‑Party Transactions (Conflict Exposure)
| Transaction | Counterparty | Key Terms | Remaining Payments (post FY2024) |
|---|---|---|---|
| Flagship store leases (100 & 102 W. Main St., Mt. Horeb, WI) | Schlecht Retail Ventures LLC (owned by Mr. & Mrs. S. Schlecht) | Current Flagship Lease: Feb 1, 2017–Jan 31, 2027; rent steps: $12,000/month (years 1–3), $12,600 (years 4–7), $13,104 (years 8–10) | $314,500 total; $157,250 <1yr; $157,250 1–2yrs |
| Photo studio lease (119 S. 2nd St., Mt. Horeb, WI) | Schlecht Retail Ventures LLC | Effective Apr 3, 2019; base $4,083/month with 2% annual increases; initial 5‑yr term from Jun 1, 2019; extended 5 years on Jun 1, 2024; one optional 5‑yr extension | $240,964 total; $50,313 <1yr; $112,954 1–2yrs; $77,697 3–5yrs |
| Senior Advisor employment | Duluth Holdings Inc. | Employment Agreement (Aug 5, 2015), amended May 27, 2021 and Feb 26, 2025; ~ $275,000 compensation in FY2023 & FY2024; eligible for bonus plans; term ends at 2026 annual meeting | — |
| Family employment | Richard W. Schlecht (son) | SVP Product Dev. & Sourcing; compensation $838,727 (FY2023), $502,458 (FY2024), ~$283,750 through filing in FY2025 | — |
Director Compensation (Policy Reference; Schlecht not a non‑employee director)
| Component | Amount |
|---|---|
| Annual cash retainer (non‑employee directors) | $50,000 |
| Committee membership retainers | Audit: $10,000; Compensation: $7,000; Nominating & Governance: $7,000 |
| Committee chair retainers | Audit Chair: $20,000; Compensation Chair: $15,000; Nominating & Governance Chair: $12,000 |
| Annual restricted stock grant (non‑employee directors) | $80,000 in Class B shares; vests after one year |
Schlecht is an employee (Senior Advisor/Chair) and therefore follows his employment agreement; he is not included in the non‑employee director compensation table .
Governance Assessment
- Board effectiveness and independence: The Company maintains a majority‑independent Board and independent committee membership; however, as a controlled company, Schlecht (not independent) sits on Compensation and Nominating & Governance Committees, which concentrates influence over pay and director nominations—an alignment and oversight risk .
- Attendance and engagement: Meets attendance expectations (≥75% of meetings for incumbents); full director attendance at the 2024 annual meeting—positive engagement signal .
- Pay‑for‑performance alignment: Schlecht’s fixed cash compensation as Senior Advisor (~$275k) is modest relative to his ownership; he is ineligible for new equity awards under the 2024 Plan, reducing dilution concerns, and received no extra pay for interim CEO duties—generally shareholder‑friendly . Company‑wide AIP metrics are financially oriented (Adjusted EBITDA/Net Sales), and no FY2024 bonuses were paid to NEOs due to underperformance—pay restraint signal .
- Ownership alignment: Extremely high skin‑in‑the‑game—100% of Class A (3,364,200 shares) and 7,221,588 Class B shares, yielding 61.7% voting power; complies with ownership guidelines; hedging/pledging prohibited .
- RED FLAGS:
- Controlled company status with Schlecht’s 61.7% voting power; concentrated control can reduce minority shareholder influence .
- Related‑party leases with Schlecht Retail Ventures LLC totaling $555,464 in future payments—requires continued Audit Committee oversight and strict recusals .
- Family employment (son as SVP) with substantial compensation—potential nepotism/related‑party optics .
- Non‑independent participation on Compensation and Nominating & Governance Committees—risk to objective pay and nomination processes .
- Age policy waiver to nominate at age 77—Board made an exception aligned with amended employment term; monitor succession planning robustness .
Overall signal: Strong ownership alignment and transparent related‑party disclosures, but governance risk centers on concentrated control, non‑independent committee participation, and family transactions—key watch items for investor confidence .