James F. McCann

About James F. McCann

Founder of 1-800-FLOWERS.COM, Inc.; currently Executive Chairman (age 74). He served as CEO from inception until June 2016 and again from July 2023 to May 2025, and has been in the floral industry since 1976 building a retail flower chain prior to FLWS . As Executive Chairman, the Board cites his founder status and deep industry/strategic knowledge as rationale for continuing to combine chair and executive responsibilities; the company has no Lead Independent Director, raising typical independence concerns for dual roles . Recent performance context: Pay-versus-performance shows cumulative TSR from a $100 investment of $25 in FY2025 vs $48 in FY2024 (Company TSR series), Net Income (Loss) of $(199.993) million in FY2025, and Adjusted EBITDA of $29.166 million in FY2025 (down from $93.067 million FY2024) .

Past Roles

External Roles

Fixed Compensation

Notes:

• Executive Chairman marketing fee: $1,000,000 per year in recognition of ongoing brand promotion; paid quarterly since FY2024 .
• While serving as CEO in FY2024 and through May 2025, his annual bonus target under the Sharing Success Plan was 100% of salary; beginning FY2026, he is not eligible for the annual bonus and instead receives annual NQDC credits equal to base salary per his 2016 agreement .

Performance Compensation

Annual Cash Incentive (Sharing Success Program) – FY2025

• Thresholds: 90% of Plan EBITDA and 95% of Plan Revenue; actual results below thresholds; Company-wide FY2025 bonus multiple = 0% .

Long-Term Incentive Equity – Recent Grants and Earned Awards

• Additional performance-share context: In FY2025, 16.7% of performance-based shares were earned across applicable NEO awards; for McCann, 7,546 earned with 3-year cliff vesting .

Equity Ownership & Alignment

Beneficial Ownership and Control

• Anti-hedging/pledging: Company policy prohibits hedging and purchasing on margin or pledging of company stock by directors/officers .
• Executive stock ownership guidelines: 5× base salary for McCann and CEO; qualifying shares include RS/RSUs, vested/unvested options, and certain family/ trust holdings; attainment within later of 5 years from hire or 3 years after becoming subject to guidelines .
• Scale of ownership vs guideline: At June 27, 2025 price of $5.13 used in proxy tables, McCann’s 21.85 million total Class A-equivalent shares imply >$100 million in value, vastly exceeding a 5× $975,000 guideline ($4.875 million) based on that date’s price .

Outstanding Equity and Vesting Overhang (as of FY2025 year-end)

• Insider selling pressure: With stock at $5.13 on 6/27/2025, both major option strikes ($8.59, $10.13) are out-of-the-money, implying no near-term exercise-driven selling pressure; intrinsic value of options under CoC table shown as “–” for McCann .
• Option exercises: None reported by NEOs during FY2025 .

Deferred Compensation (alignment, liquidity, and tax)

• Historical arrangement: Prior to FY2024, his 2016 agreement provided annual NQDC credits equal to base salary in lieu of annual bonus; post-CEO tenure (beginning FY2026), these NQDC credits resume .

Employment Terms

• Employment agreement (10/4/2016): Executive Chairman with $975,000 base; historical LTI target 75% of salary; not eligible for annual bonus except during CEO service in FY2024–FY2025; reinstated NQDC credits equal to base salary beginning FY2026 .
• Marketing fee: $1,000,000 per annum for brand promotion through media; paid quarterly since FY2024 .
• Restrictive covenants: 2-year non-compete following voluntary resignation or termination for good cause; non-solicitation and confidentiality obligations .
• Severance: If terminated without Good Cause or resigns for Good Reason, severance equals $2,500,000 plus base salary for the balance of contract term, plus continued health and life insurance for the remaining term, and accrued amounts; as of June 29, 2025, remaining term estimated at five years .
• Change-in-control acceleration (2003 Plan): Unless otherwise provided, single-trigger: all outstanding awards become fully exercisable; restrictions lapse; performance conditions deemed achieved immediately prior to CoC .

Potential Payments (as of FY2025 year-end assumptions)

• Clawback: Policy in place to recoup excess incentive compensation upon accounting restatement under SEC Rule 10D-1/NASDAQ listing standards .
• Severance plan (broader execs): New Executive Severance Plan effective 10/17/2025 for Executive Leadership (not specific to McCann as he has his own agreement); provides one-year salary, pro-rata bonus (if applicable), healthcare continuation, and vesting accelerations for awards near vest timing in certain cases .

Board Governance

• Board/Committee roles: McCann serves as Executive Chairman; no committee memberships .
• Independence: All directors except James F. McCann and Christopher G. McCann are independent under NASDAQ rules; Audit Committee fully independent and includes a financial expert .
• Leadership structure: No Lead Independent Director; Board expressly supports combined executive chair role for McCann given founder/industry expertise .
• Attendance: Board held 5 meetings in FY2025; all incumbent directors attended at least 75% of Board and committee meetings; McCann attended last year’s annual meeting .
• Director pay: Employee directors (James F. McCann and Christopher G. McCann) received no director compensation; standard cash/equity retainers for non-employee directors disclosed .

Related Party Transactions and Interlocks

• Family employment: Son (James F. McCann III) employed as Director, Enterprise Strategy and Business Development (FY2025 comp $160,000); niece (Jenna Messer) employed as SVP, Direct Marketing (FY2025 comp $290,000 and 6,285 RS) — both unanimously approved by independent directors .
• Clarim Holdings sublease: Company subleases NYC office space to Clarim Holdings, LLC, where McCann owns a controlling interest; FY2025 rent/utilities received $371,194; new sublease from Sept 2025 at $144,000 per year plus certain expenses .
• McCann family control agreement: Extensive family trusts/partnerships and Stockholders’ Agreement centralize voting/disposition decisions via the McCann Family Committee; large Class B voting control (10 votes per share) intensifies governance considerations .

Compensation Structure Analysis (signals)

• Mix and risk: FY2024 introduced a large special option award (1,000,000 options at $10.13) upon resuming CEO, increasing at-risk pay tied to stock price; however, options are currently OTM at $5.13 (6/27/2025), reducing immediate realizable value and lowering near-term selling pressure .
• Annual bonus alignment: FY2025 payout at 0% reflects strict adherence to EBITDA/Revenue thresholds; implies negative short-term cash incentive despite Executive Chairman’s 100% target as CEO for part of year .
• Equity performance shares: FY2025 performance shares earned only 16.7%, signaling challenging performance vs plan but still providing some long-term equity exposure; earned shares for McCann cliff vest after three years .
• Clawback/anti-hedging: Presence of modern clawback; prohibition on hedging/pledging strengthens alignment and reduces risk of misaligned incentives .
• Governance trade-offs: No Lead Independent Director and concentrated family voting control increase independence risk and can affect responsiveness to shareholder feedback, though 2023 say-on-pay reportedly passed by an overwhelming majority .

Equity Ownership & Alignment Details (Vested vs Unvested; Options Value)

Employment Terms Summary (Key Economics)

Investment Implications

• Pay-for-performance: Zero FY2025 cash bonus and only 16.7% performance-share earn-out indicate compensation is sensitive to underperformance; this reduces near-term cash leakage but leaves meaningful equity overhang slated to vest into 2027–2031, contingent on continued service and conditions .
• Selling pressure: With options deeply OTM at $5.13 vs $8.59/$10.13 strikes, option exercise-driven supply is unlikely near-term; time-based RS vesting schedules (2025–2027) and a large 2031 cliff tranche create moderate, staggered supply potential; anti-hedging/pledging policy mitigates alignment risks .
• Control and governance risk: McCann’s 75% control of Class B and absence of a Lead Independent Director elevate independence concerns and entrenchment risk; however, broad director independence and committee structures remain in place .
• Severance/CoC economics: Single-trigger acceleration and significant severance ($7.5–$8.6 million modeled) could be a change-in-control deal constraint; yet, clarity of terms reduces uncertainty around transaction scenarios .
• Retention and continuity: Multi-year vesting schedules and substantial NQDC balance ($30.2 million) support retention; restrictive covenants (2-year non-compete) provide post-termination protection .
• Related party optics: Family employment and a Clarim sublease are disclosed and approved by independent directors, but remain governance watch items for investors focused on conflicts .

Net: Compensation design shows real downside when performance misses (0% bonus, low PSUs earned) while maintaining long-term equity and NQDC alignment. The largest overhangs are governance/control concentration and potential single-trigger acceleration in strategic alternatives; selling pressure from options appears limited at current prices, with staggered RS vesting the main supply vector .