Clarence H. Smith
About Clarence H. Smith
Executive Chairman since January 2025; Chairman since 2012; management director since 1989; former CEO (2003–Dec 2024) and President (2003–2021). Age 74; over 48 years at Havertys, with prior external public board service at Oxford Industries (2003–2024) and civic affiliations (Metro Atlanta Chamber; Marist School) . The board separated Chair/CEO roles effective Jan 1, 2025, with a Lead Independent Director structure and independent committee chairs to balance governance . Recent performance context: FY2024 net sales $722.9M and EBITDA $41.7M vs FY2023 net sales $862.1M and EBITDA $85.8M; pre-tax income $26.2M and net income $19.96M in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Havertys | Executive Chairman | 2025–present | Board leadership, strategy oversight after CEO transition |
| Havertys | Chairman of the Board | 2012–2024 | Unified chair/CEO leadership; oversight during transformation to Havertys-branded specialty retail |
| Havertys | Chief Executive Officer | 2003–Dec 2024 | Navigated Great Recession and COVID; drove branding and operational model changes |
| Havertys | President | 2003–2021 | Senior operating leadership across merchandising, operations, marketing |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Oxford Industries, Inc. | Director | 2003–2024 | Apparel industry insights; public board governance experience |
| Metro Atlanta Chamber (Exec. Committee) | Member | n/a | Regional economic engagement |
| Marist School | Board of Trustees (emeritus) | n/a | Non-profit governance |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Annual Bonus Paid ($) | Notes |
|---|---|---|---|---|
| 2024 | 760,000 | 100% (MIP-I 80% pre-tax earnings, MIP-II 20% individual goals) | 266,669 (Corporate $114,669; Individual $152,000) | Variable payout driven by pre-tax earnings; MIP-I earned 18.9% of target; MIP-II 100% |
| 2023 | 760,000 | 100% (same construct) | 670,746 (Corporate $518,746; Individual $152,000) | MIP-I earned 85% of target; MIP-II 100% |
| 2025 (terms) | 600,000 | 75% | n/a | Executive Chairman role with reduced cash and LTI targets |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| MIP-I (Pre-Tax Earnings) | 80% of annual cash target | Quarterly and annual goals; Annual $40.0M for 2024 | FY2024 pre-tax $26.2M; quarterly achievement varied | 18.9% of MIP-I target (overall) | Cash, paid after year-end |
| MIP-II (Individual Goals) | 20% of annual cash target | Pre-set individual objectives | Achieved for NEOs | 100% of MIP-II target | Cash, paid after year-end |
| PRSU – EBITDA (2024 grant) | 80% of equity PRSU mix for CEO | Target EBITDA $54.9M (threshold $38.4M; max $68.6M) | EBITDA $41.7M | 52% of target shares earned | Cliff vest Feb 2027 |
| PRSU – Sales (2024 grant) | 20% of equity PRSU mix | Net sales target $847.3M (threshold $762.6M; max $932.0M) | Net sales $722.9M | 0% earned (forfeited) | n/a |
| RSU (time-based, 2024 grant) | Remainder of equity | n/a | n/a | n/a | Vest in 3 equal annual installments beginning May 2025 |
2024 Grant specifics (Smith): PRSU-EBITDA target 27,099 shares; PRSU-Sales target 6,775 shares; RSU 8,469 shares; grant-date fair value $1,470,572 . 2023 PRSUs earned 83.9% (EBITDA) and 44.5% (Sales); vesting Feb 2026 .
Equity Ownership & Alignment
- Total beneficial ownership: Common 129,219 shares; Class A 717,483 shares (57.6% of Class A outstanding), including partnership-related shared voting; certain family holdings disclaimed .
- Ownership guidelines: Executive Chairman must hold the lesser of 6.0x salary or 135,000 shares; all NEOs meet guidelines; counting unvested/earned RSUs net of tax withholding; guidelines reduce starting at age 60 .
- Hedging/pledging: Prohibited for directors and officers; no outstanding pledges or margin accounts; hedging/derivative transactions barred .
- Vested vs unvested: As of Dec 31, 2024, Smith had unvested RSUs and earned PRSUs across 2022–2024 grants; examples include 8,146 RSUs (1/25/24) and 14,091 earned PRSUs (2024 EBITDA) with market values at $22.26/share .
- Stock vested in 2024: 52,526 shares vested; net shares received 29,485 after tax withholding .
Insider transactions and vesting cadence
- Form 4 filings in 2025 include entries on Jan 24, May 8, and May 12, 2025, consistent with annual board grant timing and vesting cycles .
- Insider trading policy restricts trading windows and prohibits hedging/pledging; equity awards do not accrue dividends prior to vesting .
Employment Terms
- No employment agreement; change-in-control agreements auto-renew annually; double-trigger vesting applies under 2021 LTIP .
- CIC cash severance: 2x the higher of current or 3-year average base salary plus 2x the higher of current or 3-year average annual non-equity incentive, plus 24 months of benefit premiums; pro-rata final year bonus; stock accelerates per plan .
- Estimated payments (Dec 31, 2024 assumptions at $22.26/share): CIC severance $2,660,061; healthcare/other $49,431; long-term incentive value $1,902,384 (also death/disability); retirement plans frozen; retirement-eligibility allows continued vesting subject to covenants .
- Clawback policy: NYSE-compliant; recoupment for restatements and misconduct; no tax gross-ups on CIC .
- Deferred comp plans: Top Hat aggregate balance $508,057; Deferred Compensation balance $4,879,923 with 2024 executive contributions $154,000 and company contributions $32,572 .
- Pension/SERP: Present value $780,640; plan frozen; eligible for unreduced benefits at normal retirement age .
Board Governance
- Current role: Executive Chairman (non-independent); board has Lead Independent Director (G. Thomas Hough) and independent committee chairs .
- Committees: Executive Committee member; committees staffed by independent directors (Audit; Nominating, Compensation & Governance “NCG”) .
- Attendance: Board met 4 times in 2024; each director attended at least 83% of meetings; independent directors meet in executive session at each meeting .
- Independence: Seven independent directors; Mr. Smith is non-independent; family relation disclosed (first cousin of Rawson Haverty, Jr.) .
- Dual-role implications: Combined CEO/Chair through 2024; separation in 2025 improves oversight; Lead Director structure mitigates independence concerns .
Director Compensation
- As a management director in 2024, Smith did not receive board fees; non-employee director compensation for 2024 board year was cash $60,000 and equity retainer $95,000, with supplemental retainers for leadership and committee roles .
- Director stock ownership guidelines: 5x cash retainer; directors prohibited from selling until guideline reached .
Compensation Peer Group and Governance Practices
- Peer group used for 2024 and 2025 compensation benchmarking includes specialty retailers and furniture peers (e.g., La-Z-Boy, Ethan Allen, Arhaus, Lovesac, Oxford Industries); market positioning targets median for cash compensation .
- Say-on-pay support: ~99% approval in 2023 and ~98% support referenced in 2025 materials; annual advisory vote maintained .
- No repricing of underwater options; meaningful ownership requirements; risk-mitigating plan features .
Compensation Structure Analysis
- Cash vs equity mix: 2024 variable comp was ~75% of CEO targeted comp; long-term equity ~49% for CEO, with PRSUs dominating; reflects strong pay-for-performance linkage .
- Shift in 2025 terms: As Executive Chairman, Smith’s base and incentive targets reduced (base to $600k; STIP to 75%; LTI target $450k), aligning with a board-focused role and lower operating exposure .
- Performance targets tightened vs outcomes: 2024 sales PRSUs forfeited (below threshold), EBITDA PRSUs at 52% of target; annual cash incentive driven largely by individual goals amid lower earnings, limiting cash payouts .
- Clawback and double-trigger provisions reduce agency risk; no CIC tax gross-ups; hedging/pledging prohibitions reduce alignment risks .
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | 1,047,215,000* | 862,133,000* | 722,899,000* |
| EBITDA ($USD) | 134,853,000* | 85,883,000* | 41,468,000* |
| Net Income ($USD) | 89,358,000* | 56,319,000* | 19,956,000* |
Values retrieved from S&P Global.*
Additional context: 2023 net sales $862.1M and EBITDA up 79% vs 2019 reflect the operating model change; significant shareholder returns over 15 years compared to small-cap and home furnishings indices .
Vesting Schedules and Outstanding Awards (Smith)
| Grant/Type | Shares/Target | Earned % | Vesting Date | Notes |
|---|---|---|---|---|
| 1/25/2024 PRSU – EBITDA | 27,099 | 52% | Feb 28, 2027 | Adjusted EBITDA metric |
| 1/25/2024 PRSU – Sales | 6,775 | 0% | n/a | Net sales metric |
| 1/25/2024 RSU | 8,469 | n/a | 3 tranches from May 2025 | Time-based |
| 1/26/2023 PRSU – EBITDA | 25,677 | 83.9% | Feb 28, 2026 | |
| 1/26/2023 PRSU – Sales | 6,419 | 44.5% | Feb 28, 2026 | |
| 1/26/2023 RSU | 8,025 | n/a | 3 tranches from May 2024 | |
| 1/26/2022 PRSU – EBITDA | 25,592 | 104.3% | Feb 28, 2025 | |
| 1/26/2022 PRSU – Sales | 6,237 | 101.7% | Feb 28, 2025 |
Insider Selling Pressure
- 2023–2024 vesting produced taxable events; net shares received after tax withholding (29,485 in 2024; 34,474 in 2023) suggest non-open-market dispositions for withholding vs discretionary sales .
- Form 4 filings in 2025 (Jan 24, May 8, May 12) indicate periodic reportable transactions aligned with grant/vesting cycles; policy-based trading windows apply .
Related Party Transactions and Risk Indicators
- No related party transactions requiring disclosure in 2024; compensation committee interlocks absent .
- Dual-class structure anchored by founding families (Smith and Haverty) is disclosed and positioned as “patient capital”; governance mitigants include lead director and independent committees .
- No option repricing; no CIC tax gross-ups; hedging/pledging prohibited .
- Family relation disclosed (first cousin of Rawson Haverty Jr.) .
Say-on-Pay & Shareholder Feedback
- 2023 advisory vote ~99% approval; 2024/2025 references note strong support (~98%); annual say-on-pay maintained .
Compensation Committee Analysis
- NCG Committee (independent) oversees CEO evaluation, pay design, ESG oversight, and uses Meridian Compensation Partners as independent consultant; annual peer review; executive sessions at each meeting .
Investment Implications
- Alignment: High equity emphasis and strict clawbacks/ownership rules anchor alignment; prohibition of hedging/pledging and double-trigger CIC reduce agency risk .
- Near-term selling pressure: Award vestings and director grants create periodic Form 4 activity; vesting-related tax withholding rather than discretionary sales likely dominates reported dispositions .
- Governance quality: Separation of Chair/CEO (2025) with a strong Lead Independent Director and independent committees moderates prior CEO/Chair concentration risk, though dual-class and family ties persist .
- Pay-for-performance sensitivity: 2024 incentive outcomes were sharply reduced on lower earnings/sales (EBITDA PRSUs earned at 52%; sales forfeited; MIP-I at 18.9%), indicating plan discipline and lower risk of discretionary overpay in tougher cycles .
- Retention: Continued vesting upon retirement eligibility for certain awards and sizable ownership in Class A create strong retention and long-term orientation .
Supporting Financial Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | 1,047,215,000* | 862,133,000* | 722,899,000* |
| EBITDA ($USD) | 134,853,000* | 85,883,000* | 41,468,000* |
| Net Income ($USD) | 89,358,000* | 56,319,000* | 19,956,000* |
Values retrieved from S&P Global.*
Board Service Snapshot (Smith)
- Management director since 1989; Chairman 2012–2024; Executive Chairman since 2025; Executive Committee member; non-independent .
- Attendance: directors ≥83% in 2024; executive sessions every meeting; Lead Independent Director presides .
2025 Role & Pay Transition
- Effective Jan 1, 2025: Smith to Executive Chairman; base $600k; STIP target 75%; LTI target $450k; Burdette to CEO; increases reflect operating accountability shift .