Eric M. Specter
FIVE BELOWAbout Eric M. Specter
Eric M. Specter, 67, has served as Chief Administrative Officer at Five Below since July 2014, following senior roles at Ascena Retail Group and Charming Shoppes . Five Below’s executive compensation framework ties annual incentives to post-incentive adjusted operating income and net sales, and long-term incentives to three-year cumulative operating income and relative TSR against a retail peer set, aligning pay with growth and shareholder returns . In fiscal 2024, Five Below delivered net sales of $3,876.5 million versus a $4,084.2 million target, and post-incentive adjusted operating income of $325.8 million versus a $447.6 million target, resulting in no annual bonus payouts for NEOs and reinforcing pay-for-performance rigor; Specter received a retention bonus in lieu of an annual incentive . TSR outcomes for earlier PRSUs (granted in 2022) averaged 13.8% of target on the TSR component and 0% on the AOI component, with total earned at ~7% of target—further indicating tight alignment to results .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ascena Retail Group, Inc. | EVP & Chief Integration Officer | 2012–2014 | Led post-acquisition integration efforts following Ascena’s acquisition of Charming Shoppes . |
| Charming Shoppes, Inc. | EVP & Chief Financial Officer | 1997–2012 | CFO of specialty apparel retailer prior to acquisition by Ascena . |
| Five Below, Inc. | Chief Administrative Officer | 2014–Present | Senior operating executive overseeing administrative functions since July 2014 . |
External Roles
No public company board service or external roles disclosed for Specter in the proxy .
Fixed Compensation
Multi-year disclosed compensation (SEC Summary Compensation Table):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 586,700 | 613,289 | 648,269 |
| Bonus ($) | — | — | 300,000 (retention) |
| Stock Awards ($) | 885,665 | 1,049,008 | 2,093,208 |
| Non-Equity Incentive ($) | — | 342,900 | — (annual incentive forfeited) |
| All Other Compensation ($) | 27,062 | 13,288 | 12,075 |
| Total ($) | 1,499,427 | 2,018,485 | 3,053,552 |
Additional fixed items and targets:
- 2024 annual bonus target: 75% of base salary for Specter (participation forfeited due to special retention program) .
- 2024 base salary rate set at $650,000 (from $635,000 in 2023) .
Performance Compensation
Annual incentive design (fiscal 2024):
- Metrics and weights: 50% net sales; 50% post-incentive adjusted operating income .
- Actual 2024 performance: Net Sales $3,876.5 million (32% of target); post-incentive AOI $325.8 million (0% of target). NEO annual incentives were forfeited by participants receiving retention awards; therefore no annual incentive payout for Specter .
2024 long-term incentives (structure and metrics):
- Mix and vesting: Annual RSUs (time-based) and PRSUs (performance-based); RSUs vest 50% at year 2 and 25% at each of years 3 and 4; PRSUs vest based on three-year performance (cumulative AOI 50%, relative TSR 50%) and require continued service; retirement and death/disability acceleration terms apply as specified .
- 2025 program changes: Mix moves to 40% RSUs / 60% PRSUs; RSU vesting shifts to 1/3 annually over three years; TSR peer group expanded to ~80 retail peers for stronger statistical significance .
Grant detail (fiscal 2024 awards to Specter):
| Grant Type | Grant Date | Units (#) | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| Annual RSUs | 3/21/2024 | 1,272 | 224,877 | 50% yr 2; 25% yrs 3 & 4 |
| PRSUs – AOI | 3/21/2024 | 955 (target) | 330,906 | Earned 0–200% based on 3-yr AOI; service required |
| PRSUs – TSR | 3/21/2024 | 955 (target) | 337,492 | Earned 0–200% by relative TSR across 4 periods; service required |
| Retention RSUs | 8/1/2024 | 17,137 | 1,199,933 | 25% yr 1; 25% day 540; 50% yr 2 |
Prior award outcome snapshot (2012 PRSU cohort measured through FY2024):
- AOI component: $1,054 billion cumulative AOI vs $1,298 billion threshold → 0% earned .
- TSR components: earned at an average 13.8% of target across four TSR periods .
- Total 2022 PRSUs earned: ~7% of target .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 35,712 shares (less than 1% of 55,055,966 shares outstanding) . |
| Unvested RSUs at FY2024-end | 205 (2021 grant) $19,225; 689 (2022) $64,614; 1,121 (2023) $105,127; 1,272 (2024) $119,288; 17,137 (retention, 2024) $1,607,108 . |
| Open PRSUs (shown at 50% of target per proxy convention) | 840 TSR and 840 AOI from 2023; 955 TSR and 955 AOI from 2024 . |
| Stock ownership guidelines | Executive officers must hold shares equal to a multiple of base salary; Other Executive Officers: 2x; CFO/COO: 3x; CEO: 6x. Measurement annually; 50% net share retention until compliant; all covered executives compliant as of Jan 2, 2025 . |
| Hedging/derivatives and pledging | Prohibited under Insider Trading Policy; short sales, derivatives, hedging, pledging, and margin accounts are not permitted . |
| Clawback policy | Recovery of erroneously awarded incentive compensation for restatements, material metric inaccuracies, and specified misconduct; administered by Compensation Committee . |
| 2024 equity vested/exercises | 3,403 shares vested ($641,630 realized); 10,216 shares acquired on option exercise ($587,584 realized) . |
Employment Terms
| Provision | Specter Employment Agreement / Plan Terms |
|---|---|
| Severance eligibility | Specter not covered by Executive Severance Plan; has bespoke agreement terms . |
| Termination without cause or resignation for good reason | 12 months base salary continuation plus COBRA premium reimbursements up to 12 months . |
| Good reason (definition) | Material diminution in base or target bonus; material adverse change in title/authority/responsibilities; Company breach; relocation >50 miles . |
| Change-in-control equity treatment | For annual PRSUs: AOI vests at target for open periods; TSR vests at greater of target or period-to-date performance for open periods; completed periods vest based on actual results . |
| Death/disability equity treatment | RSUs fully vest; PRSUs vest at target for open periods and actual for completed periods . |
| Retirement feature (from 2024 awards) | Annual RSUs vest in full; PRSUs vest pro-rata at target for open periods or actual for completed periods; Specter meets age/service conditions for retirement eligibility . |
| Restrictions | Hedging/pledging prohibited; clawback applies; stock ownership and 50% net share retention until compliant . |
Performance Compensation (Detailed Table – 2024 Annual Plan)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout Outcome |
|---|---|---|---|---|---|---|
| Net Sales ($mm) | 50% | 3,864.7 | 4,084.2 | 4,210.6 | 3,876.5 | 32% of target; capped if AOI < threshold |
| Post-Incentive Adjusted Operating Income ($mm) | 50% | 380.0 | 447.6 | 481.4 | 325.8 | 0% of target |
| Specter payout | — | — | — | — | — | No annual bonus (forfeited for retention) |
Say-on-Pay & Peer Group
- Say-on-Pay: ~96% approval at June 2024 annual meeting, indicating strong shareholder support .
- Compensation peer group used in 2024 analyses includes Abercrombie & Fitch, Burlington Stores, Ulta, Lululemon, RH, Williams-Sonoma, etc.; peer group medians at last update: revenue ~$4.4B, market cap ~$8.4B .
Investment Implications
- Alignment: Specter’s pay is heavily equity-linked with stringent AOI and relative TSR hurdles; prior PRSU outcomes (2022 cohort at ~7% of target) show payout sensitivity to execution, reinforcing alignment .
- Retention risk: Specter’s 2024 retention RSUs and severance protections (12 months salary plus COBRA) reduce near-term departure risk; retirement eligibility could accelerate certain vesting, but hedging/pledging prohibitions and ownership guidelines mitigate misalignment .
- Insider selling pressure: 2024 option exercises and RSU vesting (10,216 exercised; 3,403 vested) indicate potential supply, though policy prohibits hedging/pledging and mandates net share retention until guideline compliance; Specter’s beneficial stake is 35,712 shares (<1%) .
- Change-of-control economics: Equity awards include single-trigger vesting at target or better for open periods, which can create value realization in an M&A scenario; cash severance is limited to 1x salary plus COBRA, with no excise tax gross-ups .