Katrina O’Connell
About Katrina O’Connell
Katrina O’Connell is Executive Vice President and Chief Financial Officer of Gap Inc., a position she has held since March 2020, following prior CFO roles at Old Navy and Banana Republic and multiple finance and operations roles across the company . In fiscal 2024 (year ended Feb 1, 2025), Gap Inc. delivered net sales of $15.1B vs. $14.9B in fiscal 2023, EBIT of $1.1B vs. $560M, and an annual TSR of approximately 25%, reflecting improved execution and cost discipline . In 2025 guidance, she framed operating margin at ~6.7%–7.0% including an estimated 100–110 bps net tariff headwind, with mitigation plans across sourcing, pricing and assortment to avoid further 2026 degradation .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Gap Inc. | EVP & Chief Financial Officer | Mar 2020–present | Leads finance and capital allocation; guided to FY2025 operating margin of ~6.7%–7.0% incl. 100–110 bps tariff headwind; pursuing ~$150M core cost savings and tariff mitigation (sourcing, pricing, assortment) . |
| Old Navy (Gap Inc.) | CFO & SVP, Strategy & Innovation | Jan 2017–Mar 2020 | Financial leadership and strategy/innovation for Old Navy . |
| Banana Republic (Gap Inc.) | CFO & SVP, Strategy | Mar 2015–Jan 2017 | Financial leadership and strategy for Banana Republic . |
| Gap Inc. | Various roles (Finance budgeting/forecasting across brands, Supply Chain, IT, Treasury, IR) | Prior years | Broad cross-functional finance and operations experience across the portfolio . |
External Roles
No public company directorships or external board roles disclosed for O’Connell in company filings .
Fixed Compensation
Multi-year summary (fiscal years ended):
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $866,538 | $914,615 | $900,000 |
| Stock Awards (Grant-date FASB ASC 718) | $2,521,291 | $3,314,782 | $4,281,618 |
| Option Awards | $638,980 | — | — |
| Non-Equity Incentive Plan Compensation (Annual Bonus) | — | $2,557,510 | $2,700,000 |
| All Other Compensation | $61,280 | $67,682 | $67,744 |
| Total Compensation | $4,088,089 | $6,854,589 | $7,949,362 |
Additional fixed parameters (FY2024):
- Target bonus: 150% of base salary .
- Base salary range during FY2024: O’Connell remained at $900,000 .
Performance Compensation
Annual bonus design (FY2024):
- Metrics and weights: 33.3% SG&A as % of net sales; 33.3% Gap Inc. EBIT; 33.3% individualized weighted brand average EBIT (for O’Connell: 50% Old Navy, 20% Athleta, 20% Gap brand, 10% Banana Republic) .
- Funding outcomes: SG&A metric 200%; Gap Inc. EBIT 200%; individualized EBIT 160% for O’Connell .
| Metric | Weight | Threshold | Target | Max | Actual | Payout/Funding |
|---|---|---|---|---|---|---|
| SG&A as % of Net Sales | 33.3% | >34.4% → 0% | 34.1% → 100% | ≤33.5% → 200% | 32.9% | 200% |
| Gap Inc. EBIT (vs FY2023 actual) | 33.3% | 101.4% | 119.3% | 137.2% | 183.2% | 200% |
| Individualized Weighted Brand Avg. EBIT | 33.3% | Brand-specific | Brand-specific | Brand-specific | Weighted result (Old Navy 140.4%; Gap 149.7%; Banana Republic 1452.6%; Athleta N/A) | 160% (for O’Connell) |
| Individual Performance Adjustment | — | — | — | — | Positive (CFO) | Final payout 200% of target |
Actual FY2024 bonus paid: $2,700,000 (200% of target) .
Long-term incentives (FY2024 grants):
- Mix: 60% PRSUs; 40% RSUs (by target grant value) for executives other than CEO .
- PRSUs: Earned on 3-year cumulative Gap Inc. EBIT (0–250% of target) with ±20% relative TSR modifier vs. S&P Retail Select Index (total 0–300%); beginning with 2024–2026 cycle, 100% of earned shares delivered upon performance certification (service through certification required) .
- RSUs: 2024 awards vest 25% annually over four years; beginning FY2025, annual RSUs vest ratably over three years .
| Equity Incentive (FY2024) | Terms | O’Connell Amount |
|---|---|---|
| PRSU 2024–2026 (target) | 3-yr cumulative EBIT; TSR ±20%; payout 0–300%; 100% delivered at certification (service condition) | 103,652 target shares; 310,956 max shares |
| PRSU 2024–2026 (accounting value) | Grant-date fair value; modification value from Oct 8, 2024 vesting change | $2,636,907 grant-date; $33,687 incremental |
| RSU 2024 grant | Time-based; 25%/yr over 4 years (shift to 3 yrs from FY2025) | 69,101 shares; $1,611,025 grant-date value |
Track record on PRSUs (prior cycle):
- FY2022–2024 PRSU cycle paid 0% for O’Connell due to below-threshold 3-year cumulative EBIT; TSR modifier would have been 120% but did not apply given 0% base achievement .
Equity Ownership & Alignment
Beneficial ownership (as of Mar 21, 2025 record date):
- Common stock directly held: 670 shares .
- Options exercisable and awards vesting within 60 days: 105,543 .
- Total beneficial ownership: 106,213 shares .
- % of shares outstanding: ~0.028% (106,213 / 376,603,723 shares outstanding at record date) .
Stock ownership policy and compliance:
- Executive Stock Ownership Policy (2024): CFO requirement = 3x salary; all covered Executives were in compliance as of the proxy filing date .
- Hedging and pledging: Prohibited for officers and directors; also cannot hold shares in margin accounts .
Outstanding equity awards (FY2024 year-end):
- Unvested RSUs (selected tranches shown below):
- 4,803 ($115,608)
- 24,072 ($579,413)
- 75,000 ($1,805,250)
- 53,571 ($1,289,454)
- 69,101 ($1,663,261)
- Unearned PRSUs (not yet vested):
- 450,000 (market value $10,831,500)
- 310,956 (market value $7,484,711)
- Stock options outstanding (O’Connell):
- Exercisable: 8,000 @ $41.27 exp. 3/16/2025; 15,000 @ $30.18 exp. 3/14/2026; 15,980 @ $30.18 exp. 3/14/2026; 18,000 @ $32.23 exp. 3/19/2028; 42,422 @ $32.25 exp. 3/15/2031
- Unexercisable: 14,141 @ $32.25 exp. 3/15/2031; 68,515 @ $13.93 exp. 3/14/2032
10b5-1 trading plans (potential future selling pressure):
- Adopted 9/3/2024: plan to sell up to 550,543 shares (incl. 221,216 option shares); terminates 9/3/2025 unless completed earlier .
- Adopted 6/12/2025: plan to sell up to 442,529 shares (incl. 139,801 option shares); terminates 6/12/2026 unless completed earlier .
Employment Terms
Severance (non‑change-in-control; illustrative amounts if terminated without cause on Feb 1, 2025):
- Salary continuation: $1,350,000 (18 months) .
- Bonus-related cash: $2,430,000 .
- Health benefits (COBRA reimbursement): $23,981 .
- Outplacement and financial counseling: $2,720 and $22,865, respectively .
- Stock award vesting acceleration (award agreements/plan terms): $4,019,594 .
- Total: $7,849,160 .
- Additional program features: prorated current-year bonus if worked ≥3 months; accelerated vesting of RSUs/PRSUs (PRSUs at target where performance not complete) per standard award/plan terms .
Change in control:
- No single-trigger cash CIC benefits; company policy avoids single-trigger arrangements .
- If awards are not assumed/substituted by acquiror, outstanding equity vests immediately prior to CIC (PRSUs at target); if assumed/substituted, awards continue per terms .
- Illustrative CIC value acceleration (if not assumed; as of Feb 1, 2025): Options $694,742; Stock awards $15,034,796; Total $15,729,538 for O’Connell .
Clawback, hedging, pledging:
- Executive Compensation Recoupment Policy updated Aug 2023 (NYSE-compliant), mandates recovery on restatements and permits recovery for non‑restatement miscalculations or misconduct/negligence causing material harm (Board discretion) .
- Hedging and pledging prohibited; preclearance and blackout rules apply to insiders .
Deferred compensation:
- 2024 nonqualified deferred compensation (DCP): executive contribution $1,158,004; company contribution $22,200; aggregate earnings $411,845; year-end balance $3,240,425 .
Compensation Structure Analysis
- Pay-for-performance design: 60% of LTI via PRSUs linked to 3-year EBIT with a relative TSR modifier; annual bonus based entirely on financials (SG&A %, Company EBIT, brand EBIT) with minimum performance threshold .
- Outcome rigor: FY2022–2024 PRSUs paid 0% (below-threshold EBIT), evidencing performance sensitivity; FY2024 annual bonus paid at 200% after strong EBIT and SG&A results and positive individual adjustment .
- Policy guardrails: No golden parachute tax gross-ups; no single-trigger CIC cash benefits; no option repricing; no SERP/pension; hedging/pledging prohibited; robust clawback .
- Ownership alignment: CFO guideline 3x salary; executives in compliance as of proxy date .
Peer group and governance signals:
- Compensation peer group includes AEO, LULU, TJX, DG, DLTR, ROST, VFC, WSM, etc. .
- Independent compensation consultant (FW Cook), with no conflicts; annual risk assessment found no material comp risk .
- Say-on-Pay approval ~97% at 2024 meeting, indicating strong shareholder support .
Investment Implications
- Incentive alignment and execution: Bonus design tightly links pay to efficiency (SG&A %) and profitability (EBIT), with 2024 payout at 200% reflecting strong execution; multi-year PRSU zero payout for 2022–2024 underscores true downside when multiyear EBIT underperforms .
- Retention and selling pressure: Significant unvested RSUs/PRSUs and compliance with 3x ownership support retention, but active 10b5‑1 plans to sell up to 550,543 shares (2024) and 442,529 shares (2025) suggest ongoing programmed selling that could create periodic supply into the market .
- Risk controls: No pledging/hedging, enhanced clawback, and no single-trigger CIC cash reduce governance risk; however, CIC equity could accelerate at target if unassumed ($15.7M at FY2024 year-end), representing potential event-driven dilution .
- Forward operating posture: CFO’s guidance and commentary point to disciplined cost control ($150M savings), tariff mitigation, and maintained FY2025 OM 6.7–7.0% including 100–110 bps tariff drag, signaling confidence in margin resilience despite external headwinds .