Kenneth R. Bull
FIVE BELOWAbout Kenneth R. Bull
Kenneth R. Bull (age 62) is Five Below’s Chief Operating Officer (since March 2023), after serving as CFO/Treasurer (2012–July 2023) and interim President & CEO (July–December 2024). He joined Five Below in 2005 as SVP, Finance; prior roles include Finance Director & Treasurer at Urban Outfitters (1999–2003) and VP Finance & Controller at Eagle’s Eye (1991–1999) . In fiscal 2024, the annual bonus plan underperformed (Net Sales achieved 32% of target; post‑incentive adjusted operating income achieved 0%), resulting in no incentive payout for NEOs; instead, Mr. Bull received a special retention program (equity and cash) during the leadership transition . Long‑term performance outcomes have been mixed: 2022 PRSUs paid ~7% of target (AOI 0% earned; relative TSR 13.8% on average) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Five Below | Interim President & CEO | Jul–Dec 2024 | Led the company through CEO transition; remained COO |
| Five Below | Chief Operating Officer | Mar 2023–present | Oversees operations; previously CFO/Treasurer |
| Five Below | Chief Financial Officer & Treasurer | 2012–Jul 2023 | Led finance during significant growth phase |
| Five Below | SVP, Finance; Secretary | 2005–2012 | Senior finance leadership after joining company in 2005 |
| Urban Outfitters | Finance Director & Treasurer | 1999–2003 | Finance leadership at specialty retailer |
| Eagle’s Eye (Asian American Partners) | VP Finance & Controller | 1991–1999 | Finance/controller roles in apparel wholesale/retail |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary (actual, $) | 654,615 | 718,269 | 797,115 |
| Base Salary Rate changes | — | 675,000 → 750,000 (FY22→FY23) | 775,000 → 825,000 (Jul 2024 adj.) |
| Target Bonus (% of base) | — | — | 100% |
| Annual Incentive Payout ($) | — (no payout shown) | 540,000 | 0 (forfeited under special retention) |
| Retention Bonus ($) | — | — | 400,000 |
Performance Compensation
Annual Incentive Plan – Fiscal 2024
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout % |
|---|---|---|---|---|---|---|
| Net Sales ($mm) | 50% | 3,864.7 | 4,084.2 | 4,210.6 | 3,876.5 | 32% (16% weighted) |
| Post‑Incentive Adjusted Operating Income ($mm) | 50% | 380.0 | 447.6 | 481.4 | 325.8 | 0% (0% weighted) |
| Outcome | — | — | — | — | — | No annual incentive paid for NEOs in FY 2024 due to forfeiture under special retention program |
Long-Term Incentives – Design (granted March 21, 2024 unless noted)
- Annual LTI mix: 25% RSUs; 75% PRSUs; Bull’s stated FY2024 LTI grant value $2,500,000 .
- RSUs vest 50% at 2nd anniversary and 25% at each of 3rd/4th anniversaries; retirement acceleration applies to annual RSUs (details below) .
- PRSUs: 50% based on 3‑year cumulative adjusted operating income; 50% based on relative TSR versus a 19‑company/custom retail peer group; each pays 0–200% of target; four equal TSR measurement periods across FY2024–FY2026; retirement/change‑in‑control (CIC)/death & disability treatments specified below .
| LTI Component | Metric | Weight | Performance Scale | Vesting/Other terms |
|---|---|---|---|---|
| RSUs (annual) | Service | 25% | Time‑based | 50% at 2‑yr; 25% at 3‑yr; 25% at 4‑yr; retirement acceleration applies |
| PRSUs (annual – AOI) | 3‑yr cumulative adjusted operating income | 50% of PRSU | 50% (threshold), 100% (target), 200% (max) | Earned over FY2024–FY2026; CIC/death/disability/retirement provisions apply |
| PRSUs (annual – TSR) | Relative TSR vs peer group | 50% of PRSU | 25% at 30th pct, 100% at 50th pct, 200% at 80th pct | Four equal-weighted periods; CIC/death/disability/retirement provisions apply |
Special Retention and Performance Awards (July/August 2024)
- Special retention program (July 2024): RSUs with grant date value $1,600,000 (Bull) vest 25% on 1‑yr anniversary, 25% at day 540, 50% at 2‑yr; plus cash retention opportunity $400,000 for remaining through FY2024 year‑end .
- Special PRSUs (Aug 1, 2024): $1,000,000 target (shares based on grant‑date price), payout 0–200% on: (i) Q4 FY2024 comparable sales and (ii) 1H FY2025 comparable sales (50% each). Q4 FY2024 comp sales was −3.0%, earning 114% for the first half of the award; 1H FY2025 component remained open at FY2024‑year end .
| Special Award | Grant date | Target/Granted | Metric(s) | Status/Result |
|---|---|---|---|---|
| Retention RSUs | Aug 1, 2024 | 22,850 RSUs; $1,599,957 grant‑date fair value | Service vest: 25% at 1‑yr; 25% at day 540; 50% at 2‑yr | Unvested at FY2024‑year end |
| Special PRSUs | Aug 1, 2024 | 14,281 target PRSUs; max 28,562 | Q4 FY2024 and 1H FY2025 comparable sales (50/50) | Q4 FY2024 earned at 114% (8,161 units); 1H FY2025 pending at FY2024‑YE |
Prior Performance Cycle Outcome (2022 PRSUs – FY2022–FY2024)
| Component | Targets | Actual | Earned % of Target |
|---|---|---|---|
| AOI units (3‑yr cumulative AOI; $mm) | Threshold $1,298; Target $1,621; Max $1,943 | $1,054 (under threshold) | 0% |
| TSR units (four periods) | 25% @ 25th pct; 100% @ 55th pct; 200% @ 85th pct | Periods earned: 55%, 0%, 0%, 0% (avg 13.8%) | 13.8% (TSR portion); overall ~7% of target |
Equity Ownership & Alignment
Beneficial Ownership and Holdings
| Item | Detail |
|---|---|
| Beneficial ownership (Apr 15, 2025) | 73,711 shares; <1% outstanding (55,055,966 shares) |
| Unvested RSUs at FY2024‑YE | 308 (3/9/21); 861 (3/7/22); 3,112 (3/8/23); 3,535 (3/21/24); 22,850 (8/1/24 retention) |
| Unearned PRSUs at FY2024‑YE | 356 (earned TSR portion of 2022 PRSUs) ; 2,334 (2023 TSR portion, open) ; 2,334 (2023 AOI portion, open) ; 2,652 (2024 TSR portion, open) ; 2,652 (2024 AOI portion, open) ; 8,161 (special PRSUs earned for Q4 FY2024) |
| Option exercises/stock vested (FY2024) | 4,728 shares vested; $884,936 value realized (no options exercised) |
Note: Market values in tables are calculated at $93.78 close on Jan 31, 2025 within the proxy’s outstanding awards section .
Ownership Policies and Alignment
- Stock ownership guidelines: COO multiple = 3× base salary; hold 50% of net shares from option exercises/RSU settlements until in compliance; all covered executives were in compliance as of Jan 2, 2025 .
- Hedging/pledging: Prohibited; short sales and derivatives also prohibited; no margin accounts .
- Clawback: Dodd‑Frank compliant policy plus broader triggers (materially inaccurate metrics; willful misconduct; gross negligence causing material harm; fraud/misappropriation), covering cash and equity (lookback 3 years) .
- Deferred compensation: FY2024 deferrals $165,192; aggregate balance $618,888 .
- Section 16(a) note: One late Form 4 in FY2023 for Mr. Bull (gift of shares) due to administrative error; subsequently filed .
Vesting cadence and potential selling pressure
- Annual RSUs (2024 grant) vest 50% on Mar 21, 2026; 25% on Mar 21, 2027; 25% on Mar 21, 2028 .
- Retention RSUs (Aug 1, 2024) vest 25% on first anniversary, 25% on day 540, and 50% on second anniversary, creating concentrated settlement windows in FY2025–FY2026 .
- Special PRSUs: Q4 FY2024 component settled at 114% (certified March 2025); 1H FY2025 component remains pending within the performance window .
Employment Terms
| Scenario | Cash severance | COBRA | Equity treatment | Other |
|---|---|---|---|---|
| Termination without cause or resignation for good reason | 12 months base salary ($700,000 illustrative at FY2024 rates); paid half in installments and half lump sum (or lump sum for good reason) | Up to 12 months (e.g., $23,783) | As per plan terms (no automatic acceleration absent CIC/death/disability/retirement) | Subject to release; standard restrictive covenants (non‑compete/non‑solicit/confidentiality) |
| Change in control (no termination) | — | — | PRSUs vest at target (open periods) or actual (completed); TSR PRSUs vest at greater of target or period‑to‑date (open periods) or actual (completed); Mr. Bull illustrative value $3,338,568 | — |
| CIC + termination w/o cause or for good reason | 12 months base salary ($700,000) | Up to 12 months ($23,783) | As above ($3,338,568 illustrative) | No 280G excise tax gross‑ups |
| Death/Disability | — | — | RSUs (including retention) vest in full; PRSUs vest at target for open periods/actual for completed; illustrative equity value $6,214,425; plus $500,000 lump‑sum life insurance | |
| Retirement (eligibility met) | — | — | 2024 annual RSUs vest in full; pro‑rata portion of annual PRSUs vests at target (open periods)/actual (completed); Mr. Bull had satisfied retirement eligibility; illustrative value $362,178 |
Notes: Mr. Bull is eligible for severance under both his employment agreement and the Executive Severance Plan, generally receiving the greater amount; payouts are conditioned on a release of claims . CIC equity acceleration for performance awards applies even without termination as summarized above .
Compensation Structure Analysis
- Cash-to-equity mix and “at-risk” pay: Heavy equity weighting with majority performance‑based via PRSUs; 2024 design 25% RSU/75% PRSU; in 2025, mix adjusted to 40% RSU/60% PRSU and RSU vesting moved to 1/2/3‑year tranches to enhance retention .
- Metrics rigor and outcomes: FY2024 AIP targets were not met (Net Sales 32%, AOI 0%), supporting zero bonus payout; however, the board implemented a special retention program during CEO transition, substituting cash/RSU awards for AIP .
- Long-term alignment: 2022 PRSUs paid ~7% of target (AOI 0%; TSR 13.8%), indicating performance sensitivity and alignment to results .
- Governance safeguards: Robust clawback; prohibition on hedging/pledging; stock ownership guidelines (COO 3× base) and mandatory holding requirement; no 280G tax gross‑ups; Say‑on‑Pay support ~96% in 2024 .
Equity Ownership & Alignment (detail tables)
Grants of Plan-Based Awards – FY2024 (Mr. Bull)
| Grant | Shares/Units | Grant-date fair value ($) |
|---|---|---|
| Annual RSUs (3/21/2024) | 3,535 | 624,953 |
| Annual PRSUs – AOI (3/21/2024) | Target 5,303; Max 10,606 | 937,517 |
| Annual PRSUs – TSR (3/21/2024) | Target 5,303; Max 10,606 | 919,222 |
| Retention RSUs (8/1/2024) | 22,850 | 1,599,957 |
| Special PRSUs (8/1/2024) | Target 14,281; Max 28,562 | 999,956 |
Outstanding Equity – FY2024 Year-End (Feb 1, 2025)
| Award | Unvested/Unearned | Market value ($) at $93.78 |
|---|---|---|
| RSUs (3/9/2021) | 308 | 28,884 |
| RSUs (3/7/2022) | 861 | 80,745 |
| RSUs (3/8/2023) | 3,112 | 291,843 |
| RSUs (3/21/2024) | 3,535 | 331,512 |
| Retention RSUs (8/1/2024) | 22,850 | 2,142,873 |
| Earned TSR (2022 PRSUs) | 356 | 33,386 |
| 2023 PRSUs (TSR portion, open) | 2,334 | 218,883 |
| 2023 PRSUs (AOI portion, open) | 2,334 | 218,883 |
| 2024 PRSUs (TSR portion, open) | 2,652 | 248,705 |
| 2024 PRSUs (AOI portion, open) | 2,652 | 248,705 |
| Special PRSUs earned (Q4 FY2024) | 8,161 | 765,339 |
| Special PRSUs open (1H FY2025) | 14,281 at 200% shown | 1,339,272 |
Employment Terms (additional detail)
- Severance plan mechanics (Bull): 12 months base salary; COBRA up to 12 months; “cause/good reason” definitions per plan; payment timing differs (installments + lump‑sum for no‑cause; lump‑sum for good reason) .
- Equity on CIC: AOI PRSUs at target for open periods (actual for completed); TSR PRSUs at greater of target or period‑to‑date for open periods (actual for completed); change‑in‑control can trigger vesting without termination per the plan summary .
- Retirement eligibility (met by Bull): annual RSUs vest in full and PRSUs vest pro‑rata at target for open periods/actual for completed upon eligible retirement (retention RSUs and special PRSUs do not have retirement feature) .
Investment Implications
- Alignment: High leverage to equity with explicit 3‑year AOI/TSR PRSUs and robust ownership/holding/anti‑hedging policies; Say‑on‑Pay support of ~96% signals investor acceptance of pay design .
- Retention and timing risk: Bull is retirement‑eligible (acceleration features on annual RSUs/PRSU pro‑rata at retirement), and holds large retention RSUs with near‑term cliffs (1 year, day 540, 2 years) and special PRSUs tied to 1H FY2025 comps, creating identifiable settlement windows that may influence trading flows around vest dates .
- Performance sensitivity: Zero FY2024 AIP payout due to sub‑threshold AOI and below‑target sales, and 2022 PRSUs at ~7% of target, indicate realized pay can contract meaningfully when results lag (supporting pay‑for‑performance) .
- Transaction exposure: PRSUs feature CIC vesting even without termination (single‑trigger for performance awards), which can pull forward equity settlement in a deal scenario and affect dilution/supply dynamics .
Additional Governance/Context
- Peer group for compensation benchmarking (Meridian-supported): Abercrombie & Fitch; American Eagle Outfitters; Bath & Body Works; Burlington Stores; Columbia Sportswear; Crocs; Deckers Outdoor; Etsy; Floor & Décor; Lululemon Athletica; Ollie’s Bargain Outlet; RH; Ulta Beauty; Urban Outfitters; Williams‑Sonoma .
- Pay‑versus‑performance disclosure: Company reports “Compensation Actually Paid” for PEO positions; for “PEO2” (interim CEO period) in FY2024, CAP reconciled to $3,192,595 (methodology per SEC rules) .
Note: All figures reflect Five Below’s fiscal 2024 year ending Feb 1, 2025, unless otherwise indicated. Where the company used non‑GAAP metrics (e.g., post‑incentive adjusted operating income, comparable sales), reconciliations are referenced in the proxy’s Appendix A‑1 .