Michelle Gass
LEVI STRAUSS &About Michelle Gass
Michelle Gass, 57, is President, CEO and Director of Levi Strauss & Co. (LEVI); she became CEO on January 29, 2024 and has served on the Board since 2023 . Under her leadership in 2024, LS&Co. delivered $6.4B net revenue (+3% YoY), materially improved gross and adjusted EBIT margins through a DTC-first pivot, and posted adjusted diluted EPS of $1.25; adjusted free cash flow was $671M and $289M was returned to shareholders . The Board reported strong say‑on‑pay support with over 99% approval at the 2024 meeting .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Levi Strauss & Co. | President | Jan 2023–Jan 2024 | Led omnichannel positioning ahead of CEO transition . |
| Kohl’s Corporation | CEO | May 2018–Dec 2022 | Drove omnichannel strategy and established long‑term Sephora partnership . |
| Kohl’s Corporation | Chief Merchandising and Customer Officer; Chief Customer Officer | Prior to CEO | Elevated national brand partnerships and customer strategy . |
| Starbucks Corporation | Various leadership roles incl. President EMEA; EVP Marketing & Category | ~16 years | Brand building, merchandising, global strategy; led Europe, Middle East & Africa . |
| Procter & Gamble | Product development and brand management | Early career | Consumer brand management foundation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| PepsiCo, Inc. | Director | Current | External public company board . |
| Kohl’s Corporation | Director | Prior | Prior public board service . |
| Levi Strauss Foundation | Director | Current | Independent non‑profit; LS&Co. donated $6.3M in FY24 . |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $1,304,808 | $1,475,000 base; salary paid $1,531,731 due to 53-week year . |
| Target Bonus (% of Salary) | — | 175% . |
| Actual Bonus Paid ($) | $1,502,046 | $3,045,875 . |
Multi‑Year Summary Compensation (CEO)
| Category ($) | FY 2023 | FY 2024 |
|---|---|---|
| Salary | 1,304,808 | 1,531,731 |
| Bonus | 8,100,000 (sign‑on) | — |
| Stock Awards (RSUs/PRSUs grant‑date FV) | 14,292,276 | 6,607,207 |
| Option/SAR Awards (grant‑date FV) | 9,987,500 | 2,099,996 |
| Non‑Equity Incentive (AIP) | 1,502,046 | 3,045,875 |
| All Other Compensation | 1,247,822 | 419,525 |
| Total | 36,434,452 | 13,704,334 |
Performance Compensation
Annual Incentive Program (AIP) – FY 2024
| Metric | Weight | Target | Actual/Payout |
|---|---|---|---|
| Adjusted EBIT | 50% | $640–$650M | Company performance produced a 124% financial payout factor (applied across metrics) . |
| Net Revenues | 35% | $6,282–$6,374M | 124% payout factor . |
| Cash Conversion Cycle | 15% | 113 days | 124% payout factor . |
| CEO Individual Performance | — | Qualitative objectives | 100% for FY24 (Board/CHCC assessed) . |
| CEO Actual Bonus ($) | — | — | $3,045,875 . |
Notes: AIP goals measured full‑year FY24; FX fixed to plan rates; payout approved after adjustments for non‑indicative items .
Long‑Term Incentives (LTI) – FY 2024 Design
| Instrument | Weight | Vesting | Performance |
|---|---|---|---|
| PRSUs | 50% | 3-year, cliff (vests Jan 29, 2027) | 85% relative TSR vs expanded retail/apparel peer set (interpolated payout 0–200%); 15% Average ROIC (0–200%) . |
| RSUs | 25% | 4-year ratable; 25% each on Jan 24, 2025; Jan 30, 2026; Jan 29, 2027; Jan 28, 2028 . | Time‑based retention . |
| SARs | 25% | Typical 4-year vest; 10-year term | Value only if share price exceeds grant price . |
| FY24 CEO Grants | — | — | PRSUs Target 263,819; RSUs 131,909; SARs 320,610 @ $16.58 . |
Equity Ownership & Alignment
Beneficial Ownership (as of Feb 1, 2025)
| Item | Amount | Notes |
|---|---|---|
| Class A Shares Beneficially Owned | 226,040 (<1%) | |
| SARs Exercisable within 60 days | 198,285 shares right‑to‑acquire | |
| Hedging/Pledging Policy | Prohibited (no hedging, no pledging, no margin accounts) | |
| Executive Ownership Guidelines | In place; all executives in compliance; must reach required levels within 5 years (eligible share definitions provided) . |
Outstanding Awards and Key Vesting Schedules (CEO)
| Instrument | Quantity | Strike/Terms | Vesting Schedule |
|---|---|---|---|
| SARs (2013 grant) | 648,000 ex.; 648,000 unex. | $15.52; expire 1/1/2033 | 50% vested 1/2/2024; remaining 25% annually over 2 years . |
| SARs (2023 grant) | 66,649 ex.; 199,947 unex. | $17.79; expire 1/26/2033 | 25% vested 1/26/2024; then annually x3 . |
| SARs (2024 grant) | 320,610 unex. | $16.58; expire 1/28/2034 | Vests 25% on 1/24/2025; then annually x3 . |
| RSUs (2024 grant) | 131,909 | — | 25% on 1/24/2025; 1/30/2026; 1/29/2027; 1/28/2028 . |
| PRSUs (2024 target) | 263,819 | — | Cliff vests 1/29/2027, subject to TSR/ROIC performance . |
Approximate In‑the‑Money (ITM) Value Snapshot (using $17.46 close on Nov 29, 2024)
| SAR Block | Exercisable | Strike | Market ($17.46) | Approx ITM ($) |
|---|---|---|---|---|
| 2013 SARs | 648,000 | $15.52 | $17.46 | ~$1.94 × 648,000 ≈ $1,257,120 |
| 2023 SARs | 66,649 | $17.79 | $17.46 | Out of the money (~$0.33) |
| 2024 SARs (unexercisable) | 320,610 | $16.58 | $17.46 | ~$0.88 × 320,610 ≈ $282,137 |
Note: ITM values are indicative and fluctuate with market price; SARs vest per schedules above .
Potential Near‑Term Selling Pressure Indicators
- Multiple RSU/SAR tranches vest annually in late January (2025–2028), and PRSUs cliff‑vest in January 2027, which can increase Form 4 activity in post‑vesting trading windows; all trades require pre‑clearance under Insider Trading Policy .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | Effective Dec 1, 2022; initial base $1,475,000; AIP target 175% . |
| Severance (no CIC) | If involuntary without Cause or Good Reason: 24 months base salary; up to 18 months COBRA/life insurance; pro rata bonus; continued vesting for awards granted ≥6/12 months prior (timing depends on grant date); extended post‑termination SAR exercise; accelerated vesting of sign‑on awards . |
| Change‑in‑Control (CIC) | If terminated within 18 months post‑CIC: lump sum 3× (base + target bonus); up to 18 months COBRA/life insurance; pro rata bonus; accelerated vesting of performance awards at target and sign‑on awards . |
| Illustrative Values (as of Dec 1, 2024) | Severance cash $5,995,875; CIC cash $15,214,625; equity vesting: $4,660,057 (severance), $13,542,972 (CIC, if not assumed); COBRA/life continuation ~$28,406 . |
| Clawback | NYSE‑compliant policy amended Oct 2023; mandatory recovery of erroneously awarded incentive comp for 3 prior fiscal years after required restatement (misconduct not required) . |
| Perquisites/Gross‑Ups | FY24 relocation assistance included tax gross‑ups; CEO perqs (allowance, executive physicals, etc.) detailed in All Other Compensation table . |
Board Governance and Service
- Board Service: Director since 2023; currently a Class III nominee up for election in 2025; not a member of any Board committee .
- Independence: The Board determined all directors are independent except Ms. Gass (CEO) .
- Dual‑Role Implications: LEVI separates Chair and CEO; the Chair is independent (Robert A. Eckert), which mitigates CEO/Chair concentration risk; committees are composed of independent directors and hold executive sessions .
- Attendance: The Board met six times in FY24; each director attended at least 75% of Board/committee meetings during their service period .
- Director Pay: Employee directors (including Ms. Gass) receive no additional Board compensation .
- Director Ownership Guidelines: Non‑employee directors must hold equity equal to five times annual retainer ($500,000) within five years; all current directors were in compliance as of Dec 1, 2024 .
Compensation Peer Group and Committee Practices
- Peer Group: Apparel/retail and consumer peers including NIKE, PVH, VF, Lululemon, Tapestry, Deckers, Under Armour, Ralph Lauren, Gap, Columbia, Abercrombie & Fitch, Burberry, Capri, Nordstrom, Mattel, Williams‑Sonoma, Clorox, Guess, Hanesbrands, Kontoor Brands, Foot Locker, Urban Outfitters, Victoria’s Secret, Carter’s (list used for benchmarking; expanded set used for TSR comparisons) .
- Targeting: Committee uses market data for context but does not target specific percentiles; maintains flexibility by role and circumstances .
- Independent Advisor: Semler Brossy advises Compensation and Human Capital Committee; no conflicts of interest; Committee reviews comp risk and human capital strategy annually .
- Say‑on‑Pay: Over 99% approval in 2024 indicates strong shareholder support .
Risk Indicators & Red Flags
- Tax Gross‑Ups: CEO relocation benefits included tax gross‑ups—shareholder‑unfriendly in some frameworks .
- CIC Economics: 3× salary+target bonus lump sum upon CIC termination (plus full acceleration)—material cost in change‑of‑control scenarios .
- Supply Overhang: Significant annual January vesting plus 2027 PRSU cliff could create periodic insider selling pressure; mitigated by pre‑clearance and no hedging/pledging .
- Pay Ratio: FY24 CEO pay ratio 831:1 (contextual ESG scrutiny risk) .
- Alignment Positives: 90%+ CEO pay “at risk” tied to revenues, earnings, TSR, and ROIC; robust clawback; prohibition on hedging/pledging; strong say‑on‑pay .
Equity Ownership & Alignment (Detail)
| Component | Units/Value | Notes |
|---|---|---|
| RSUs outstanding (selected) | 79,573 (2023); 131,909 (2024) | 2023/2024 grant schedules shown; market values at $17.46 disclosed in proxy . |
| PRSUs target outstanding | 180,367 (2023); 224,246 + 39,573 (2024 blocks) | 2024 PRSUs cliff vest in 2027; performance conditions per plan . |
| SARs outstanding (selected) | 648,000 ex.; 648,000 unex. @ $15.52; 66,649 ex.; 199,947 unex. @ $17.79; 320,610 unex. @ $16.58 | Vesting schedules per award footnotes . |
Employment Terms (Scenario Table for CEO as of Dec 1, 2024)
| Scenario | Cash Severance | Equity Treatment | Benefits |
|---|---|---|---|
| Voluntary/For Cause | — | — | — |
| Termination w/o Cause or Good Reason | $5,995,875 | Continued vesting of older time‑based awards; accelerated sign‑on | COBRA/life ~$28,406 |
| Death/Disability | — | Full vest of time‑based awards | — |
| CIC Termination | $15,214,625 | Full vest (performance at target), including sign‑on awards | COBRA/life ~$28,406 |
Investment Implications
- Pay‑for‑Performance Alignment: Heavy use of PRSUs (relative TSR/ROIC) with sizable AIP tied to Adjusted EBIT/Net Revenue/CCC supports value creation; strong 2024 execution with margin improvement and DTC gains under Gass .
- Retention and Continuity: Material unvested RSU/SAR tranches and PRSU cliff in 2027, combined with 24‑month severance and CIC protections, reduce near‑term retention risk but increase CIC transaction costs .
- Trading Signals: Watch January vesting windows and 2027 PRSU cliff for potential insider selling pressure; monitor Form 4s around earnings windows given pre‑clearance policy .
- Governance Quality: Separation of Chair/CEO and independent committees mitigate dual‑role concerns; say‑on‑pay strength lowers shareholder activism risk on compensation .
- Red Flags to Monitor: Any expansion of tax gross‑ups beyond relocation, any repricing or award modifications (currently prohibited), and changes to performance metrics or peer group that soften hurdles .