Reade Fahs
National Vision HoldingsAbout Reade Fahs
L. Reade Fahs, age 64, has served as CEO and a director since 2014 and will transition to Executive Chairman effective August 1, 2025, with President Alex Wilkes becoming CEO; D. Randolph Peeler will serve as Lead Independent Director, preserving independent board oversight . 2024 operational highlights under his leadership included eight consecutive quarters of positive adjusted comparable store sales and expansion of remote optometry to 730+ locations; net revenue grew 3.8% to $1,823.3 million while adjusted operating income from continuing operations increased 21.5% to $65.5 million, though GAAP net income was a loss of $(27.2) million . Pay-versus-performance shows 2024 cumulative TSR of $31.93 on a $100 base (vs peer $146.87), with “compensation actually paid” to the PEO negative due to equity fair value changes, signaling alignment with shareholder returns .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| National Vision, Inc. (NVI) | President & COO; later President & CEO | Joined 2002; CEO from 2003 pre-IPO | Brought optical/retail and human capital expertise; deep company operations knowledge |
| First Tuesday | Chief Executive Officer | 1999–2001 | Led professional networking forum for technology entrepreneurs |
| Vision Express U.K. | Managing Director | 1997–1999 | Senior leadership in leading optical retailer |
| LensCrafters | Various positions | 1986–1996 | Leadership experience at a leading eyewear retailer |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| VisionSpring | Chairman (2006–2024); Board Observer and Roving Ambassador (Feb 2024–present) | 2006–present | Social enterprise improving access to eyewear |
| Restoring Vision | Board (nonprofit) | Not disclosed | Nonprofit focused on global vision crisis |
| PetVet Care Centers (private) | Board | Not disclosed | Network of veterinary hospitals |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | $991,196 | $1,000,000 | $1,030,000 (3% increase effective July 2024) |
| All other compensation ($) | $32,100 | $38,531 | $38,806 |
| Director pay | Employee directors receive no separate director compensation | Employee directors receive no separate director compensation | Employee directors receive no separate director compensation |
Executive Chair Agreement (effective Aug 1, 2025): salary reduced to $700,000; 2026 target cash bonus $560,000; no annual cash incentive in 2027; 2026 RSU grant $2,000,000 vesting over three years; if terminated without cause/for good reason before end of initial term (through the 2027 annual meeting), severance equals remaining salary through term plus target bonus for year of termination (if any) and continued vesting of outstanding equity awards .
Performance Compensation
| Element | Design | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| 2024 STIP AOI ($mm) | Annual cash incentive; AOI metric | 100% AOI | $90.1 | $67.7 | 0% (below threshold) | Cash; none earned |
| 2024 PSUs | 3-year PSUs: AOI & ROIC | AOI 75%; ROIC 25% | Not disclosed (competitive sensitivity) | In-progress | 0–200% range | Earned over 2024–2026; average annual multipliers |
| 2024 RSUs | Time-based RSUs | N/A | N/A | N/A | N/A | Equal tranches over 3 years |
| 2022 PSUs | 3-year PSUs | AOI 75%; ROIC 25% | Threshold >0% | AOI 2022–2024 actuals $96.5/$77.0/$62.7; ROIC 15.6%/13.6%/12.5% | 0% vest (all forfeited) | N/A |
2025 compensation updates: annual cash incentive adds Adjusted Comparable Same Store Sales Growth as a second corporate metric; PSUs include a 25% relative TSR component, with 50% AOI growth and 25% ROIC; AOI-growth PSUs will not vest if AOI growth is negative over the 3-year period .
2024 equity grants (target values and quantities):
| Grant | Target value ($) | PSUs (#) | RSUs (#) |
|---|---|---|---|
| Fahs (Mar 1, 2024) | $4,000,000 | 84,962 | 84,962 |
Option/RSU vesting events realized in 2024:
| Type | Shares vested/exercised | Value realized ($) |
|---|---|---|
| RSUs/PSUs vested | 84,137 | $1,957,496 |
| Options exercised | — | — |
Equity Ownership & Alignment
| Ownership measure | Value |
|---|---|
| Shares beneficially owned | 1,181,513 |
| Ownership % of outstanding | 1.5% |
| CEO stock ownership guideline | 6x annual base salary; Fahs meets/exceeds |
| Hedging/pledging | Hedging prohibited; pledging discouraged and requires General Counsel approval; no individual pledging disclosed |
Outstanding equity awards at 12/28/2024:
| Instrument | Quantity | Key terms |
|---|---|---|
| Stock options | 54,114 (3/1/2019, $35.19), 41,089 (2/28/2020, $34.82), 29,685 (3/5/2021, $45.66) | 10-year expirations; exercise prices above 12/27/2024 close $10.57 |
| 2023 PSUs | 134,469 (target) | In-progress, included at target per SEC rules |
| 2023 RSUs | 89,646 (unvested at 12/28/2024) | One-third vested Mar 3, 2025; remaining scheduled Mar 3, 2026 |
| 2024 PSUs | 84,962 (target) | In-progress, included at target per SEC rules |
| 2024 RSUs | 84,962 (unvested at 12/28/2024) | One-third vested Mar 1, 2025; remaining halves vest Mar 3, 2025 and Mar 3, 2026 |
Near-term vesting schedule indicators (potential supply overhang):
- 2023 RSUs: one-third vested March 3, 2025; remaining vest March 3, 2026 .
- 2024 RSUs: one-third vested March 1, 2025; remaining half tranches on March 3, 2025 and March 3, 2026 .
- 2024–2026 PSUs: performance vest based on AOI growth and ROIC; TSR added in 2025 grants .
Employment Terms
| Provision | Key terms |
|---|---|
| Executive Severance Plan (qualifying termination without cause/for good reason) | Cash severance equals salary+target bonus times multiple (Fahs 2.0x); pro-rata bonus (actual); continued health benefits (24 months for Fahs); subject to release and covenants |
| Executive Severance Plan (double-trigger CIC within 2 years) | Cash severance multiple increases (Fahs 2.5x) paid lump sum; pro-rata bonus (target); extended health benefits (30 months for Fahs); outplacement up to $20,000 |
| Equity vesting on CIC/death/disability | PSUs convert to RSUs at greater of target or actual-to-date at CIC; full vest if not assumed or upon qualifying termination post-CIC; death/disability: PSUs vest at 100% target; RSUs vest upon qualifying termination post-CIC or death/disability; retirement confers pro-rata next tranche vesting on RSUs |
| Non-compete / non-solicit | Fahs subject to non-compete and non-solicit for 24 months post-termination; confidentiality and non-disparagement apply |
| Clawback policy | SEC/Nasdaq-compliant recovery of erroneously paid incentive comp upon restatement (3-year lookback); discretionary recovery for misconduct/reputational harm |
Illustrative severance economics (as of 12/28/2024):
| Scenario | Cash severance ($) | Health continuation ($) | PSU vest ($) | RSU vest ($) |
|---|---|---|---|---|
| Qualifying termination | 4,120,000 | 1,428 | — | 124,336 |
| Qualifying termination post-CIC | 5,170,000 | 1,786 | 2,770,207 | 1,995,880 |
| Death or disability | — | — | 2,770,207 | 1,995,880 |
| Retirement | — | — | — | 763,537 |
Board Governance
- Board service: Director since 2014; not independent due to executive role; becomes Executive Chairman Aug 1, 2025; Lead Independent Director role established to maintain independent oversight .
- Committee roles: All committee members are independent; Fahs is not listed on audit, compensation, or nominating committees .
- Attendance: Board held seven meetings in 2024; each director attended ≥90% of board and committee meetings; all directors attended the 2024 annual meeting .
- Independence and leadership structure: Independent Chair currently; post-transition, Executive Chairman and a Lead Independent Director will be in place, with regular executive sessions of independent directors .
Director compensation program (for non-employee directors; employee directors like Fahs receive none): annual cash retainer $80,000; annual equity RSUs $170,000; committee chair retainers $25,000 (Audit), $20,000 (Compensation), $15,000 (Nominating); Lead Independent Director stipend $30,000 starting Aug 1, 2025 .
Say-on-pay support: 89.26% approval in 2024; ongoing engagement with top institutional investors representing ~25% of shares following outreach to holders of ~80% .
Compensation Peer Group (benchmarking)
The committee reviewed and updated peer group; for 2024, added Embecta, Fossil, Tandem Diabetes Care, Warby Parker and removed Floor & Decor; in 2025, removed Cano and added RadNet . Peer group includes: Align Technology, Caleres, Columbia Sportswear, Dentsply Sirona, Embecta, Five Below, Fossil, ICU Medical, Acadia Healthcare, Merit Medical, Ollie’s Bargain Outlet, Oxford Industries, Surgery Partners, Cano Health (later removed), Tandem Diabetes Care, The Cooper Companies, Warby Parker, West Pharmaceutical .
Compensation Structure Analysis
| Year | Salary ($) | Stock awards ($) | Non-equity incentive ($) | Total ($) |
|---|---|---|---|---|
| 2022 | 991,196 | 3,250,006 | — | 4,273,302 |
| 2023 | 1,000,000 | 6,000,007 | 1,578,900 | 8,617,438 |
| 2024 | 1,013,846 | 4,000,011 | — | 5,052,663 |
- Mix shift: 2024 pay relied entirely on equity; STIP funded at 0% due to AOI miss, reinforcing pay-for-performance discipline .
- PSUs outcome discipline: 2022 PSUs vested at 0%, and 2024 “compensation actually paid” to PEO was negative due to equity fair value declines, consistent with stock underperformance vs peer TSR .
- Program enhancements for 2025 raise performance rigor via added relative TSR and second annual metric (Adjusted Comparable Same Store Sales Growth) .
Risk Indicators & Red Flags
- Hedging/pledging: Hedging prohibited; pledging discouraged and requires GC approval; no pledging disclosures for Fahs, reducing misalignment risk .
- Clawback: SEC/Nasdaq-compliant policy in place; discretionary recovery scope for misconduct/reputational harm .
- Options: All outstanding Fahs options have exercise prices far above the 12/27/2024 close ($10.57), creating no near-term in-the-money pressure .
- Talent transitions: CFO transition and CEO succession plan disclosed with orderly process and defined terms, mitigating execution risk .
- Related party transactions: None required to be reported since start of FY2024 .
Equity Ownership & Alignment Details
| Item | Detail |
|---|---|
| Ownership guideline compliance | Fahs meets/exceeds guideline (6x salary) |
| Beneficial ownership | 1,181,513 shares; 1.5% of class |
| Upcoming vest tranches | 2023 RSUs vest schedule through March 2026; 2024 RSUs vested March 1, 2025 and scheduled on March 3, 2025 and March 3, 2026 |
| PSU performance gates | AOI growth and ROIC; 2025 grants add 25% relative TSR; AOI-growth PSUs will not vest if AOI growth is negative over 3 years |
Employment & Contracts (Retention, Change-in-Control)
| Aspect | Terms |
|---|---|
| Executive Severance Plan multiples | Fahs: 2.0x salary+target bonus (qualifying termination); 2.5x if double-trigger CIC |
| Health continuation | 24 months (qualifying termination); 30 months (double-trigger CIC) |
| Equity treatment | CIC conversion/vesting rules; death/disability vesting; retirement RSU pro-rata next tranche |
| Non-compete duration | 24 months for Fahs post-termination |
| Executive Chair Agreement | Compensation schedule and severance/continued vesting protections through 2027 annual meeting |
Board Service History and Dual-Role Implications
- Service: Director since 2014; CEO through July 2025; Executive Chairman thereafter .
- Independence: Not independent due to executive status; all committees are fully independent, and executive sessions of independent directors occur regularly .
- Governance mitigants: Independent Chair currently; upon Fahs becoming Executive Chairman, a Lead Independent Director will be appointed; bylaws/guidelines emphasize annual director elections and majority voting .
- Meeting attendance and oversight: Seven board meetings in 2024; ≥90% attendance by all directors; formal oversight of strategy, risk, human capital, and sustainability documented in committee charters .
Say-on-Pay & Shareholder Feedback
| Item | Detail |
|---|---|
| 2024 Say-on-Pay approval | 89.26% votes in favor |
| Engagement | Outreach to holders representing ~80% of outstanding shares; engagements with holders of ~25% of shares on governance, compensation, sustainability |
Investment Implications
- Pay-for-performance alignment: Zero 2024 STIP payout and 0% vesting of 2022 PSUs demonstrate discipline; 2025 addition of relative TSR and a second annual metric increases performance sensitivity, supporting long-term alignment .
- Supply/demand signals: Defined RSU vesting dates in 2025–2026 create potential technical supply overhang; however, options are deeply out-of-the-money, reducing forced exercise/sell pressure .
- Retention and succession: Executive Chair Agreement provides structured transition and severance protections; strong governance mitigants (Lead Independent Director, independent committees) offset dual-role concerns as Executive Chairman .
- Ownership alignment: 1.5% beneficial ownership and compliance with stringent stock ownership guidelines, combined with hedging/pledging restrictions, indicate durable alignment with shareholders .
- Performance trajectory: 2024 AOI improvement (+21.5%) and revenue growth (+3.8%) amid discontinued operations, alongside negative TSR vs peers and GAAP losses, frame execution risk around transformation initiatives and the CEO handoff to Wilkes .