Andrew McLean
LANDS' ENDAbout Andrew McLean
Andrew J. McLean, 56, has served as Lands’ End’s Chief Executive Officer since January 28, 2023 and joined the Board as CEO‑Designate in November 2022. He holds a B.Eng. from the University of Manchester, an M.Eng. in Engineering Management from the University of Cambridge, and an MBA from Harvard Business School, with 20+ years of retail leadership across AEO, Urban Outfitters, Liz Claiborne, and Gap. In FY2024, Lands’ End reported Adjusted EBITDA of $93 million (+10% YoY) with gross margin up 550 bps to 47.9% and low single-digit GMV growth; the annual bonus plan paid at 70% of target while the FY2022–FY2024 PSUs paid 0% and expired unvested, signaling tighter performance alignment .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| American Eagle Outfitters | EVP, Chief Commercial Officer; EVP, International; President, International | 2016–2022 | Led global brand delivery and commercial execution across AE/Aerie, including international expansion and customer experience initiatives . |
| Urban Outfitters | COO; COO & Head of International | 2008–2016 | Drove operations and international growth for a multi-brand specialty retailer . |
| Liz Claiborne | Various, incl. President, Outlet Division | 2003–2008 | Outlet division leadership, portfolio/operations experience in apparel . |
| Gap, Inc. | Various roles | 2000–2003 | Merchandising/operations experience at a global specialty retailer . |
| A.T. Kearney | Strategy Consultant | Early career | Strategy, operating model and efficiency work foundational to later operating roles . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| University of Wisconsin School of Human Ecology | Supporter/Sponsor of projects in brand, marketing, product design and merchandising | Ongoing | Industry–academia collaboration elevating brand/marketing capabilities . |
Fixed Compensation
| Metric | FY2023 | FY2024 | FY2025 change |
|---|---|---|---|
| Base salary ($) | $1,050,000 | $1,050,000 | Increased to $1,100,000 effective Feb 1, 2025 |
| Target annual bonus (% of base) | 100% | 100% | Raised to 125% starting FY2025 |
| Target LTI | $2,520,000 | $2,520,000 | Raised to 275% of base (FY2025) |
Performance Compensation
Annual Incentive Plan (AIP) – FY2024 design and payout
| Metric | Threshold (50%) | Target (100%) | Maximum (200%) | Weight | Result | Payout |
|---|---|---|---|---|---|---|
| 2024 AIP EBITDA net of inventory charge ($mm) | $60 | $71 | $91 | 100% | Above threshold, below target | 70% of target |
| CEO target bonus ($) | — | $1,050,000 | — | — | — | $735,000 |
Key design notes:
- Single metric (AIP EBITDA net of inventory charge) with defined adjustment mechanics; linear interpolation between thresholds; focus on profitability and inventory efficiency .
Long‑Term Incentives – FY2024 grants
| Award type | Weight | Target shares | Grant date fair value ($) | Performance/vesting terms |
|---|---|---|---|---|
| Financial PSUs | 40% | 89,124 | $1,007,992 | 3‑yr performance (FY2024–FY2026): 50% net debt/Adj. EBITDA ratio; 50% average ROIC; 50%/100%/200% payout at threshold/target/max; vests post‑FY2026, service‑based . |
| Stock Price PSUs | 20% | 44,562 | $369,419 | Vests 33%–100% of target upon achieving specified 20‑day avg close any time through FY2026; target equals max; service‑based . |
| Time‑based RSUs | 40% | 89,124 | $1,007,992 | 25%/25%/50% on 1st/2nd/3rd anniversaries of 4/1/2024 (award date), service‑based . |
Prior cycle outcome:
- FY2022–FY2024 PSUs (75% EBITDA, 25% revenue) paid 0% based on cumulative results below threshold; awards expired unvested .
Summary Compensation (McLean)
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $258,462 | $1,070,192 | $1,050,000 |
| Bonus | $600,000 (sign‑on make‑whole) | — | — |
| Stock awards | $1,249,993 | $2,697,031 | $2,385,404 |
| Option awards | $1,249,995 | — | — |
| Non‑equity incentive (AIP) | — | $834,750 | $735,000 |
| All other comp | $20,081 | $26,687 | $11,562 |
| Total | $3,378,530 | $4,628,661 | $4,181,966 |
Equity Ownership & Alignment
Beneficial ownership and policy alignment
- Beneficial ownership: 162,567 shares; “<1%” of outstanding; includes 84,040 vested options and 22,281 RSUs vesting April 1, 2025 included under 60‑day rules .
- Anti‑hedging/anti‑pledging: Policy prohibits hedging and pledging, including margin accounts, collars and swaps .
- Ownership guidelines: CEO required to hold 4× base salary; until met, must retain 50% of net shares on vesting; unvested RSUs/options don’t count toward compliance .
Outstanding equity and near‑term vesting (as of Jan 31, 2025)
| Instrument | Status | Key terms/next vests |
|---|---|---|
| Stock options | 84,040 exercisable; 84,041 unexercisable at $10.81; exp. 11/1/2032 | Sign‑on options vest 25%/25%/50% on 1st/2nd/3rd anniversaries of 11/1/2022 . |
| Time‑based RSUs | Unvested tranches outstanding: 57,817; 110,655; 89,124 | Scheduled vests: 4/1/2025: 22,281; 6/14/2025: 36,885; 11/1/2025: 57,817 and 73,770; 4/1/2026: 22,281; 4/1/2027: 44,562 . |
| Financial PSUs | Unvested: 73,770 (2023–2025 at threshold), 44,562 (2024–2026 at threshold) | Payout 50%–200% of target based on net debt/Adj. EBITDA ratio and avg ROIC after FY2026; service required . |
| Stock Price PSUs | Unvested: 14,705 (threshold) | Vests 33%–100% of target on achieving 20‑day avg price hurdles through FY2026; service required . |
Insider activity indicators:
- Form 4 filings for McLean on 4/3/2024, 3/26/2025, and 11/4/2025 reflect award grants/vestings; review specifics for tax withholding/sales mix as available on the IR site and SEC EDGAR .
Employment Terms
- Core economics: Base salary minimum $1,050,000 (raised to $1,100,000 effective Feb 1, 2025); target bonus 100% (raised to 125% in FY2025); target LTI $2,520,000 (raised to 275% of base in FY2025) .
- Sign‑on awards: 115,633 RSUs and options for 168,081 shares @ $10.81 on 11/1/2022; vest 25%/25%/50% over three years; acceleration of next‑12‑months portion on termination without cause/for Good Reason; special death/disability treatment (50% RSUs; 100% options) .
- Severance (no gross‑ups): If terminated without cause/for Good Reason → 2× (base + avg bonus) over 24 months; 2.5× after a Change in Control (CIC) over 30 months; medical continuation; outplacement; potential pro‑rata bonus if termination occurs in last six months of fiscal year .
- CIC equity: Double‑trigger equity vesting at target if awards not assumed or if terminated without cause/for Good Reason within 18 months post‑CIC .
- Restrictive covenants: Non‑disclosure (2 yrs), non‑disparagement (2 yrs), non‑solicit (18 months), non‑compete (12 months; 24 months if CIC‑related, with voluntary opt‑out after 12 months by forfeiting remaining severance; pro‑rata reimbursement on inducement grant vesting) .
- Board provisions: Employment letter provides board appointment while CEO and nomination for reelection while serving as CEO; Good Reason also includes (if ESL owns >20%) ESL voting against McLean’s reelection to the Board while CEO .
Board Governance
- Service history: Director since November 2022; CEO since January 28, 2023; standing for reelection in 2025 with six other nominees .
- Leadership structure: Independent Chair (Josephine Linden); roles of Chair and CEO are separated .
- Independence/committees: McLean is management (non‑independent) and is not a member of the Audit, Compensation, or Nominating & Corporate Governance committees; all committee members are independent .
- Meeting cadence/attendance: Board met 7 times in FY2024; all directors attended >75% of meetings; independent directors meet in executive session at least twice a year .
Performance & Track Record
- FY2024 execution: GMV growth low single digits, gross margin +550 bps to 47.9%, Adjusted EBITDA $93 million (+10% YoY) amid focused promotions, brand building, and inventory efficiency .
- Incentive outcomes: AIP paid 70% of target; 2022–2024 PSUs paid 0% (below threshold), reinforcing pay‑for‑performance alignment .
Compensation Structure Analysis
- Mix and risk: ~77% of CEO target compensation “at‑risk” in FY2024; LTI 55% of CEO target with 60% of LTI in performance‑based awards (Financial PSUs + Stock Price PSUs) .
- Metric rigor: Annual plan solely on AIP EBITDA net of inventory charge; long‑term metrics emphasize deleveraging (net debt/EBITDA), capital efficiency (ROIC), and absolute stock performance—all drivers of equity value .
- Governance controls: Robust clawback compliant with listing rules (applies SVP+), anti‑pledging/hedging, stock ownership guidelines, capped incentives, and committee discretion mitigate risk .
Compensation Peer Group and Say‑on‑Pay
- Peer group design: Apparel/retail peers (e.g., AEO, URBN, Columbia) assessed with FW Cook; market medians used directionally rather than strict targets .
- Say‑on‑pay: ~99% approval at the 2024 annual meeting, indicating strong investor support for the program .
Related Party/Ownership Concentration
- ESL Investments beneficially owns ~55.5% of shares; Capital Research Global Investors ~6.8%; Thomas J. Tisch ~5.2% .
- No related‑party transactions disclosed regarding McLean; company policy subjects related parties to Audit Committee review .
Risk Indicators & Red Flags
- Positive: No excise tax gross‑ups; double‑trigger CIC vesting; anti‑pledging/hedging; rigorous long‑term metrics; 0% PSU payout for 2022–2024 cycle .
- Watch items: Ownership concentration (ESL >50%) shaping governance dynamics; sizable RSU/option vesting dates (e.g., April 1 and November 1) may coincide with 10b5‑1/blackout windows and tax‑withholding transactions that can create perceived supply .
Investment Implications
- Alignment improving: FY2024 AIP payout at 70% and a full 0% 2022–2024 PSU outcome show outcomes tracking performance; 2024 LTI metrics push deleveraging/ROIC and absolute price hurdles, aligning with equity value creation .
- Retention and stability: Competitive base, step‑ups in FY2025 bonus/LTI targets, and 2× (2.5× on CIC) severance terms reduce retention risk; strong governance controls (clawback, ownership guidelines, anti‑pledging) support discipline .
- Technical flows: Notable upcoming vesting tranches (e.g., April 1, June 14, November 1) could produce mechanical sell‑to‑cover/tax withhold transactions; monitor Form 4s and trading windows for near‑term supply signals .
- Governance: Separation of Chair/CEO and independent committees mitigate CEO/Director dual‑role concerns; however, ESL control remains a structural governance factor for minority shareholders .
