Harvey Kanter
About Harvey Kanter
Harvey S. Kanter, age 63, has served as President, Chief Executive Officer, and Director of Destination XL Group (DXLG) since April 1, 2019, after joining as Advisor to the Acting CEO in February 2019 . He brings 35+ years of retail leadership across e-commerce and omnichannel, including CEO roles at Blue Nile and Moosejaw and executive roles at Michaels Stores . Under DXLG’s disclosed “pay versus performance” framework, cumulative TSR measured from 2020 through 2024 improved from $72.07 to $245.05 per $100 initial value, while FY2024 results reflected sales of $467.0 million and Adjusted EBITDA of $19.9 million (with net income of $3.1 million), highlighting compression vs FY2023 ($521.8 million sales; Adjusted EBITDA $55.9 million) amid sector challenges .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Blue Nile, Inc. | President & CEO; Director; Chairman | CEO 2012–2017; Director 2012–2020; Chairman 2014–2020 | Led a leading online fine jewelry retailer; drove integrated-commerce expertise . |
| Moosejaw Mountaineering | CEO & President | 2009–2012 | Led multi-channel outdoor apparel/gear retailer . |
| Michaels Stores, Inc. | Various executive positions | 2003–2008 | Expanded merchandising/operations expertise in specialty retail . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Seattle University (Albers School) | Non-executive co-chair, Center for Leadership Formation | Feb 2021–Feb 2024 | Executive education/leadership formation . |
| Potbelly Corporation | Director; Compensation Committee member | Aug 2015–May 2019 | Public company board/comp oversight experience . |
Fixed Compensation
| Component | FY2024 Amount | Notes |
|---|---|---|
| Base Salary | $850,000 | Set in Amended Employment Agreement . |
| Auto Allowance | $10,000 | Annual . |
| Travel Allowance | $120,000 | $30,000 per quarter for travel to HQ . |
| 401(k) Company Match | $12,075 | Per plan QACA match . |
| Long-term Healthcare Premiums | $12,876 | Executive coverage . |
| Supplemental Disability Insurance | $5,009 | Executive coverage . |
| Director Fees | $0 | No director compensation for CEO-director . |
Performance Compensation
Annual Incentive Plan (AIP) – FY2024 Structure and Outcome (CEO)
| Metric | Weight | Target | Actual | Payout % | Notes |
|---|---|---|---|---|---|
| TIER I Corporate – Sales | 40% | $535.2m | $467.0m | 0.0% | Below threshold . |
| TIER I Corporate – Adjusted EBITDA | 40% | $39.0m | $19.9m | 0.0% | Below threshold . |
| TIER II – Comparable Sales (Quartile) | 40% | Top Quartile | 4th Quartile | 0.0% | Sector-relative tier . |
| TIER II – Adj. EBITDA Margin (Quartile) | 40% | Top Quartile | 2nd Quartile | 30.0% | Relative margin ranking . |
| Individual Goals | 20% | 20% at target | Varied | 20.0% | CEO goals evaluated by Comp Committee . |
| Resulting Cash Bonus | — | $850,000 (target) | — | 50% of target | $425,000 payout approved Apr 2025 . |
Key design features:
- CEO AIP target = 100% of earned salary; maximum 200% under TIER I; TIER II capped at 100% .
- TIER I driven by Sales and Adjusted EBITDA; TIER II compares Comparable Sales and Adjusted EBITDA Margin vs peer quartiles .
Long-Term Incentive Plans (LTIP)
| Cycle | Metric | Target/Scale | Actual | Award Form | Grant/vesting |
|---|---|---|---|---|---|
| 2022–2024 LTIP | 3-year relative TSR vs 2022 peer group | 100% at 2nd quartile; 150% at 1st; 0% at 4th | 2nd quartile | 50% cash; 50% RSUs | $361,250 cash + $361,250 RSUs to CEO on 4/1/2025; vesting through 8/31/2025 . |
| 2023–2025 LTIP | 3-year relative TSR vs 2023 peer group | Same scale | In progress | Time-based 50% RSUs/50% cash | Vest Apr 1 annually 2025–2027; perf earned vests by 8/31/2026 . |
| 2024–2026 LTIP | 3-year relative TSR vs 2024 peer group | Same scale | In progress | Time-based 50% RSUs/50% cash | Vest Apr 1 annually 2025–2028; perf earned vests by 8/31/2027 . |
| 2025–2027 LTIP | 3-year relative TSR vs 2025 peer group | Same scale | In progress | Time-based 50% RSUs/50% cash | Approved effective 4/1/2025 . |
Special PSUs (Retention/Performance Award):
- 573,000 PSUs granted 8/11/2023; vest in nine tranches upon 30-day VWAP price hurdles at $6.50, $6.75, $7.00, $7.25, $7.50, $7.75, $8.00, $8.25, $8.50; minimum one-year vesting; expire 8/11/2026 if unvested .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 1,397,279 shares; 2.6% of outstanding as of 6/13/2025 . |
| Options Exercisable (≤60 days) | 914,853 shares (multiple grants including 0.53–0.75 strikes; select 0.64 discretionary grant) . |
| Unvested RSUs | 35,981 (2022–2024), 61,717 (2023–2025), 101,760 (2024–2026); market values based on $2.72 close 2/1/2025: $97,868; $167,870; $276,787 . |
| Unvested PSUs | 573,000 (price-hurdle award); valuation example shown for disclosure purposes within filing . |
| 2024 Option/RSU Activity | No option exercises; 38,562 RSUs vested with $130,800 value realized . |
| Hedging/Pledging | Prohibited by Insider Trading Policy for directors, officers, employees . |
| Management Ownership Guidelines | None currently; director plan requires 60% of retainer in equity until ≥3x annual retainer held . |
Employment Terms
| Provision | CEO Terms |
|---|---|
| Effective Dates | Advisor from 2/19/2019; CEO & Director effective 4/1/2019 . |
| Current Agreement | Amended Employment Agreement extended initial term to 8/11/2026; auto-renews annually thereafter unless notice . |
| Fixed Pay | Base $850,000; $10,000 auto allowance; $30,000 quarterly travel allowance . |
| Incentives Eligibility | AIP target 100% of salary (max 200%); LTIP target bonus 170% of base salary; LTIP performance max 150% . |
| Severance (during Initial Term) | If Good Reason resignation or termination without Justifiable Cause: remaining base salary through Initial Term + AIP bonuses for remaining periods at target, paid over 24 months . |
| Severance (post-Initial Term 1-year periods) | Base salary + target AIP bonus, paid over 24 months . |
| Non-renewal by Company (post-Initial Term) | Three months base + 25% of target AIP bonus, paid over 24 months . |
| Change-in-Control (double trigger within 1 year) | Lump sum: 2x base salary + 2x target AIP bonus (within ~60 days) . |
| Structured Retirement | Eligible treatment under LTIP/AIP subject to succession criteria; deemed termination without Justifiable Cause for certain plan purposes . |
| Estimated Potential Payments (as of 2/1/2025) | Qualifying Termination: $5,472,961; Change-in-Control Termination: $6,252,128 (includes AIP, pro-rata LTIP, time-based awards valuation at $2.72/sh) . |
Board Governance
- Board service: Director since 2019; President & CEO; not independent .
- Chair/independence: Independent Non-Executive Chairman (Lionel Conacher) since 1/24/2019; Board holds semi-annual independent executive sessions .
- Committees: CEO serves on no Board committees; all committees are independent (Audit, Compensation, Nominating & Corporate Governance, Cybersecurity) .
- Attendance: Board met 12 times in FY2024; all directors ≥75% attendance; all attended 2024 Annual Meeting .
Director Compensation (for Kanter)
- None; CEO does not receive director fees. Director compensation schedule applies to non-employee directors only .
Compensation Peer Group and Consultants
- Consultants: Segal Group advised CEO comp and 2023 retention PSU; Korn Ferry advised peer group methodology and job leveling .
- Peer group evolution: FY2024 peers include specialty retail apparel names; Delta Apparel removed (bankruptcy); Allbirds added for FY2025 .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval | Frequency Vote |
|---|---|---|
| 2024 | 89.4% approval | — . |
| 2023 | 98.9% approval | 97.2% favored annual say-on-pay frequency . |
Risk Controls and Policies
- Clawbacks: SEC/Nasdaq-compliant Executive Clawback Policy for incentive compensation upon restatements; additional clawbacks in employment agreements/LTIPs for misconduct and post-termination discoveries .
- Hedging/Pledging: Prohibited for insiders .
- No tax gross-ups on severance; no option repricing; minimum vesting and double-trigger CIC embedded in plans .
Compensation Structure Analysis
- Cash vs Equity shift: 2024 realized/total comp decreased meaningfully vs 2023 amid AIP underperformance and LTIP cycles; total CEO comp $2.895m (2024) vs $5.959m (2023) reflecting lower performance-based payouts, with 2023 including $2.4m PSU grant fair value .
- Performance metrics tightened: AIP retained two-tier design (absolute plan targets and relative quartile ranks), capping TIER II, emphasizing sales and Adjusted EBITDA margin alignment .
- Equity orientation: Multi-year LTIPs wholly anchored to relative TSR; time-based RSU/cash blend provides retention balance; PSU price hurdles require sustained share price appreciation .
Vesting Schedules (selected equity)
- RSUs (2022–2024 LTIP): Remaining tranches vest 4/1/2025 and 4/1/2026 .
- RSUs (2023–2025 LTIP): Remaining tranches vest 4/1/2025, 4/1/2026, 4/1/2027 .
- RSUs (2024–2026 LTIP): Tranches vest 4/1 annually 2025–2028 .
- PSUs (Aug 2023): VWAP hurdles $6.50–$8.50; expire 8/11/2026 if unvested .
Insider Transactions & Selling Pressure Indicators
- FY2024: No option exercises; RSU vesting occurred; late Form 4 filings noted for April 10, 2024 (administrative RSU vest reporting) .
- Policy limitations: Hedging/pledging barred; grants generally on predetermined schedules post 10-K/earnings release; no opportunistic timing around MNPI per governance disclosures .
Performance & Track Record Highlights
- FY2024 operational discipline preserved profitability and positive FCF despite -10.6% comparable sales; Adjusted EBITDA $19.9m; cash/investments $48.4m; no debt; inventory down 6.8%; CFO metrics included FCF and capex mix (store development $13.7m of $27.7m) .
- Long-range plan development and CEO agreement extension to 2026 cited as strategic continuity steps .
Equity Option Detail (selected CEO awards)
| Grant Type | Shares | Strike | Expiration |
|---|---|---|---|
| Discretionary Options (2020) | 150,000 | $0.64 | 6/10/2030 . |
| LTIP 2020–2022 Options | 442,040 | $0.53 | 6/11/2030 . |
| LTIP 2021–2023 Options | 167,980 (incl. 83,990 unearned) | $0.69 | 3/8/2031 . |
| Discretionary Options (3/9/2021) | 70,843 | $0.75 | 3/9/2031 . |
Employment & Contracts (Key Legal Terms)
- Auto-renewal: One-year renewals post 8/11/2026 unless notice .
- Non-compete/solicit: Not explicitly disclosed for CEO agreement; NEO agreements include 1-year non-compete in big & tall apparel segment .
- Garden leave/consulting: Not disclosed.
- Change-of-control terms: Double-trigger required for CIC severance and vesting mechanics across plans .
Investment Implications
- Alignment: CEO’s incentive mix strongly performance-based (AIP tied to Sales/Adj. EBITDA; LTIPs tied solely to relative TSR). The 2023 PSU grant requires material share price thresholds up to $8.50, signaling equity-performance alignment and creating potential deferred supply if hurdles are met .
- Selling pressure: Limited recent insider selling evidenced by zero option exercises in FY2024; RSU vesting is scheduled and policy restricts hedging/pledging, reducing forced selling risks .
- Retention risk: Agreement runs through Aug 2026 with meaningful severance economics and structured retirement pathways; LTIP time-based RSU/cash tranches vest through 2028, supporting retention .
- Pay-for-performance: 2024 AIP paid at 50% of target amid underperformance on plan metrics but relative margin ranking secured partial payout; multi-year TSR remains the central LTIP metric, aligning with shareholder outcomes .
- Governance: Independent Chair and fully independent committees mitigate dual-role concerns (CEO + Director). Clawbacks and no-repricing/no-gross-up policies strengthen shareholder protections .