Meghan Frank

About Meghan Frank

Meghan Frank is Chief Financial Officer of lululemon athletica inc., serving as CFO since November 2020; she joined the company in 2016 as SVP, Financial Planning & Analysis, served as interim co-CFO from April 2020, and is age 48 with a B.A. from Colgate University . She leads finance, tax, treasury, investor relations, asset protection, facilities, planning & allocations, and strategy functions . Under the company’s incentive design, 2024 annual bonuses paid out at 80.9% of target on equally weighted operating income and net revenue metrics, and the 2022 PSU cycle (2022–2024) paid at 200% based on a 22.2% three-year operating income CAGR (from a $1,374.7M 2021 baseline to $2,505.7M in 2024) . Company performance context includes 2024 net income of $1,814.6M, operating income of $2,505.7M, and cumulative TSR values of $173.02 (FY2024), $199.69 (FY2023), and $129.85 (FY2022) on a $100 base, with over 93% Say‑on‑Pay approval at the 2024 meeting .

Past Roles

External Roles

Fixed Compensation

Summary Compensation (Total and Mix)

Notes: FY2025 design holds structure largely unchanged; Frank’s FY2025 annual equity target is $3.25M .

Performance Compensation

Annual Cash Incentive (FY2024)

2024 Grants of Plan‑Based Awards (Meghan Frank)

PSU Design and 2022 Cycle Outcome

• PSUs generally vest after a three‑year performance period with 0–200% payout; performance measured as operating income growth (CAGR) from a stated baseline .
• 2022 PSU cycle (2022–2024): baseline 2021 adjusted operating income $1,374.7M; 2024 operating income $2,505.7M; achieved 22.2% three‑year CAGR → 200% payout .

2024 Realized Equity Activity (Exercises/Vesting)

Equity Ownership & Alignment

Beneficial Ownership (as of April 1, 2025)

• Stock ownership guidelines: CEO 5x salary; other Section 16 executive officers (incl. CFO) 3x salary; executives must retain 75% of net shares from vesting/exercise until meeting thresholds; unvested RSUs/PSUs and options do not count .
• Hedging/pledging: Company prohibits hedging or pledging of company stock .
• Clawback: Cash and equity incentive plans include clawback provisions .

Outstanding Equity Awards at FY2024 Year-End (2/2/2025)

Notes: RSUs vest 33%/33%/34% over three years; PSUs vest based on three‑year performance; market values based on $414.20 closing price on 1/31/2025; PSUs shown at target .

Stock Options Outstanding (as of 2/2/2025)

Notes: Options vest 25% annually over four years; 7‑year term .

Employment Terms

• At‑will employment; no predefined involuntary termination severance plan; practice may include severance up to 18 months and certain benefits depending on circumstances .
• Change in control: No excise tax gross‑ups; equity awards include double‑trigger protections; if awards are not assumed/substituted, RSUs and 100% of target PSUs vest upon change in control; if assumed/substituted, 100% of RSUs and target PSUs vest upon qualified termination within two years post‑CIC .
• Potential payments (illustrative, assuming termination on 2/2/2025):
  • Involuntary termination without cause: Severance $1,031,250; accelerated equity intrinsic value $1,648,516; total $2,679,766 .
  • Change in control: Severance $1,031,250; accelerated equity intrinsic value $5,252,129; total $6,283,379 .
  • Death/Disability: Accelerated equity intrinsic values $5,252,129 (death) and $5,505,546 (disability) .

Compensation Structure Analysis

• Cash vs. equity mix shifting toward equity: stock and option grant date fair values increased from $1.50M in FY2022 to $3.00M in FY2024 (stock $2.10M; options $0.90M), while salary rose more modestly (to $814k paid) .
• Shift in annual incentive outcomes: FY2024 annual bonus paid at 80.9% vs. FY2023 payout higher at $1.33M; structure remains 50% operating income/50% net revenue with 0–200% payout range .
• Long‑term incentives emphasize performance: PSUs with three‑year operating income growth as the metric; 2022 cycle paid at 200% on 22.2% CAGR, reinforcing strong linkage to profit growth .
• Governance safeguards: Double‑trigger CIC equity, anti‑hedging/anti‑pledging policies, and clawbacks; no CIC tax gross‑ups .

Investment Implications

• Pay‑for‑performance alignment appears strong: annual bonus metrics tied to revenue and operating income (80.9% payout in 2024), and PSUs tied to multi‑year operating income growth that paid out at 200% for the 2022 cycle on a 22.2% CAGR to $2.51B OI, signaling high hurdle attainment .
• Selling pressure watch: 2025–2027 vesting cadence includes material RSU/PSU tranches (e.g., RSU 1,414 and PSU 3,536 from 3/25/2024; RSU 748 and PSU 2,793 from 3/30/2023; plus options vesting annually), which can drive routine liquidity events; Frank exercised 2,181 options in 2024 realizing $719k, and had multiple vesting events, though hedging/pledging is prohibited .
• Alignment and retention: Beneficial ownership of 25,462 shares (<1%) plus significant unvested equity and 3x salary ownership guideline for Section 16 officers supports alignment; no predefined severance plan but illustrative severance is modest (~$1.03M cash) with double‑trigger equity, balancing retention and shareholder protections .
• Governance support: Say‑on‑pay approval over 93% in 2024 suggests investor acceptance of the program; no option repricing, no single‑trigger CIC, and clawbacks reduce governance risk .

Overall, compensation is heavily at‑risk and performance‑linked (OI CAGR PSUs, 50/50 OI/Revenue bonus), while governance provisions (double‑trigger CIC, anti‑hedging/pledging, clawback) mitigate misalignment; upcoming vesting schedules are the primary source of routine insider supply to monitor around vest dates and 10b5‑1 activity disclosures .

Appendix: Company Performance Context (Pay vs. Performance)

All data cited from the 2025 DEF 14A proxy unless noted.