Melinda Whittington
LA-Z-BOYAbout Melinda Whittington
Melinda D. Whittington (age 58) is Chair of the Board (since December 2024), President and CEO of La‑Z‑Boy (since April 2021), and a director since 2021, previously serving as LZB CFO (2018–April 2021). Prior roles include CFO of Allscripts Healthcare Solutions and senior finance leadership at Kraft Foods (now Kraft Heinz) and Procter & Gamble, with international assignments in Belgium and Costa Rica . FY2025 results: sales $2.1B, GAAP operating margin 6.4%, adjusted operating margin 7.6%, GAAP diluted EPS $2.35, adjusted EPS $2.92, and GAAP operating cash flow $187.3M . Pay-for-performance program delivered a 103% payout on the FY2025 annual bonus and 133% on the FY2023–2025 performance units, reflecting sales, operating cash flow, and relative TSR (rTSR) metrics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| La‑Z‑Boy | Senior Vice President & Chief Financial Officer | 2018–Apr 2021 | Drove financial leadership ahead of CEO transition; supported Century Vision strategy execution |
| Allscripts Healthcare Solutions | Chief Financial Officer | 2016–2017 | Led public company finance function in health IT |
| Kraft Foods Group (now The Kraft Heinz Company) | SVP, Corporate Controller & Chief Accounting Officer | Feb–Oct 2015 | Oversaw corporate accounting; prior progressive finance roles |
| Procter & Gamble | Finance roles (incl. expatriate assignments) | Various | Built global consumer products finance expertise (Belgium, Costa Rica postings) |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Best Buy Co., Inc. | Director (public company) | Since 2023 | Brings retail/omni-channel perspective |
| American Home Furnishings Alliance | Director | Ongoing | Industry leadership |
| American Home Furnishings Hall of Fame | Director | Ongoing | Industry leadership |
| Business Leaders for Michigan | Director | Ongoing | Regional business leadership |
| YMCA of Monroe, Michigan | Director | Ongoing | Community engagement |
| OSU Fisher College of Business | Dean’s Advisory Council Member | Ongoing | Academic advisory |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | $941,667 | $981,667 | $1,021,333 |
| Annual Bonus Payout ($) (MIP) | $1,356,876 | $1,083,606 | $1,261,915 |
| MIP Payout vs Target (%) | 131% | 92% | 103% |
| Long-Term Incentive Target (% of salary) | 360% (prior target; increased in FY2025) | 360% (implied prior target) | 380% |
Perquisites and other: financial planning reimbursement up to $6,000; executive physicals; identity theft monitoring; company aircraft personal-use incremental cost $127,179 in FY2025 (no tax gross-up on imputed income) .
Performance Compensation
| Component | Metric(s) | Weighting | Target | Actual (FY 2025) | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual MIP (cash) | Sales; Operating Margin | 50%; 50% | Sales $2,089M; Op Margin 8.1% | Sales $2,109M; Op Margin 7.6% (adjusted per plan) | 103% of target | Paid after FY end |
| Performance Units (FY2025–FY2027) | Sales Growth; Operating Cash Flow; rTSR vs S&P 600 Consumer Durables & Apparel | 25%; 25%; 50% | Pre-set annual targets; rTSR 50th percentile target | FY2025: Sales 114%; OCF 118% of target; rTSR in process | Interpolated 50–200% per metric | Cliff settle after 3 years; metric-by-metric vesting |
| Prior Performance Units (FY2023–FY2025) | Sales; Operating Cash Flow; rTSR (3-year) | As above | Pre-set | Sales/OCF varied; rTSR ~64th percentile | 133% overall | Settled after FY2025 |
Equity Awards Detail (FY 2025 grants)
| Award Type | Grant Date | Shares / Target (#) | Grant-Date Fair Value ($) | Key Terms |
|---|---|---|---|---|
| Performance-Based Units | 6/24/2024 | Target 49,413; Max 98,826 | $2,229,999 (probable); Max $4,459,998 | Earn 50–200% based on Sales/OCF annually and 3-year rTSR; settle in shares |
| RSUs | 6/24/2024 | 49,413 | $1,877,200 | Vest 25% annually over 4 years; dividends accrue and pay on vest |
Option grants: No new options in FY2025/FY2024; prior grant value $800,001 in FY2023 . Outstanding options include tranches at exercise prices $24.41–$37.93 with expirations 2028–2032; select 2023 options vest 50% on 6/28/2025 and 50% on 6/28/2026 .
Vesting calendar (selected):
- Earned but unvested PBUs: 23,070 (FY2024 grant) vest 4/25/2026; 9,549 (FY2025 grant) vest 4/24/2027 .
- Unvested RSUs: 49,413 (FY2025 grant) vest 6/24/2025, 6/24/2026, 6/24/2027, 6/24/2028 (25% each); earlier grants vest per schedules shown .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (6/27/2025) | 613,113 shares total = 145,537 shares owned directly/indirectly + rights to acquire 467,576 within 60 days; equals 1.5% of shares outstanding |
| Stock Ownership Guideline | CEO 5x salary; approximate share requirement 135,000 |
| Guideline Compliance | All NEOs were compliant or within 5-year transition as of 4/26/2025 |
| Hedging/Pledging | Prohibited for executives/directors; no shares pledged; anti-hedging policy in place |
| RSUs/Options Status | RSUs and PBUs count toward guidelines once earned; options do not count; unearned PBUs do not count |
Employment Terms
| Provision | CEO Terms |
|---|---|
| Employment Agreement | None; company does not provide employment agreements |
| Severance Plan (no CIC) | 24 months base salary + average of prior 3 annual bonuses (paid monthly); medical/dental during severance; requires release; non-compete and non-solicit during severance term |
| Change-in-Control (Double Trigger) | 3x base salary + 3x average of prior 3 bonuses; 3 years medical/dental; legal fee reimbursement; “best-net” approach (no excise tax gross-up) |
| Equity Treatment on CIC | PBUs convert to time-based at transaction; full acceleration if terminated without cause/for good reason within 2 years; options/RSUs accelerate for qualifying terminations post-CIC (grants ≥ FY2023) |
| Clawback | Recoupment of incentive comp upon restatement or misconduct causing material inaccuracy; PCRP adjustments for errors |
Estimated payments (as of 4/26/2025):
- CIC + qualifying termination: total incremental $18,723,853 (salary $3,084,000; bonus $3,866,082; options $762,155; RS/RSU $4,368,905; PBUs $6,580,641; benefits $62,070) .
- Severance plan (no CIC): $4,674,768 total, including severance payment $4,633,388 and benefits $41,380 .
Board Governance
- Dual role and independence: Chair and CEO combined in December 2024; Board appointed independent Lead Director (Michael T. Lawton) with robust charter and authorities; all committees are independent; Whittington is not independent and serves on no Board committees .
- Executive sessions: Independent directors hold regular executive sessions; Board met 5 times in FY2025; all directors had ≥75% attendance .
- Stock ownership guidelines (directors/Chair): 5x annual cash retainer; RSUs vest annually; director compensation is for non‑employee directors only (employee directors do not receive director pay) .
Director/Committee Roles (select)
| Role | Status |
|---|---|
| Board Chair | Melinda D. Whittington (since Dec 2024) |
| Lead Independent Director | Michael T. Lawton; serves on Audit and Compensation Committees |
| Committee Independence | All committees comprised of independent directors |
Compensation Structure Analysis
- Increased LTI emphasis: CEO LTI target raised from 360% to 380% of salary in FY2025 to align with market median; mix 50% RSUs / 50% PBUs; rTSR remains 50% of PBUs, reinforcing shareholder alignment .
- Options deemphasized: No CEO option grants in FY2024–FY2025; prior option awards remain outstanding .
- Strong pay-for-performance linkage: MIP based on sales and operating margin; PBUs on multi-year Sales/OCF/rTSR with rigorous targets and pre-set adjustments; average LTI payouts over 5 cycles ~97% of target, indicating balanced rigor .
- Perquisites: Aircraft personal use is a visible perk but no tax gross-up and limited hours; financial planning capped .
Say‑on‑Pay & Shareholder Feedback
- Support: 97% approval at the 2024 annual meeting; shareholder engagement involved top holders representing ~60% of shares in FY2025 with general support for performance-based structure .
Financial Performance Context
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenues ($) | $2,356,811,000 [GetFinancials]* | $2,349,433,000 [GetFinancials]* | $2,047,027,000 [GetFinancials]* | $2,109,206,999 [GetFinancials]* |
| EBITDA ($) | $246,221,000 [GetFinancials]* | $251,439,000 [GetFinancials]* | $203,524,000 [GetFinancials]* | $205,102,000 [GetFinancials]* |
| Net Income ($) | $150,017,000 [GetFinancials]* | $150,664,000 [GetFinancials]* | $122,626,000 [GetFinancials]* | $99,556,000 [GetFinancials]* |
Values retrieved from S&P Global.
Additional TSR context (value of initial $100 investment in LZB stock):
- FY2022: $128.27; FY2023: $143.95; FY2024: $169.85; FY2025: $203.90 (company selected peer group TSR $192.81 in FY2025) .
Risk Indicators & Red Flags
- Combined Chair/CEO: Potential governance concern; mitigated by strong Lead Independent Director role and independent committees .
- Perquisites: Private aircraft personal use ($127,179 incremental cost) merits monitoring; no gross-ups reduce shareholder-unfriendly optics .
- Change‑in‑control economics: 3x cash multiple and full equity acceleration upon qualifying termination post‑CIC are market‑standard but could create meaningful payouts in a sale scenario .
- Strong safeguards: No employment agreement; anti‑hedging/pledging; clawback policy; no option repricing; no excise tax gross‑ups .
Investment Implications
- Alignment: High at‑risk pay with substantial LTI tied to rTSR (50%) and hard financials (Sales/OCF) supports long‑term shareholder alignment; CEO’s beneficial stake (613k shares, ~1.5% of shares) and 5x salary ownership guideline indicate strong skin in the game .
- Watch near‑term selling pressure: Significant scheduled RSU and PBU vesting through FY2026–FY2028 could prompt 10b5‑1 sales for tax/portfolio reasons; monitor Form 4 activity around vest dates .
- Governance: Combined Chair/CEO warrants continued oversight of Lead Director effectiveness; current structure includes robust independent committee leadership and regular executive sessions .
- Pay outcomes vs performance: MIP/LTI payouts track operating results and TSR; FY2025 bonus just above target (103%) and prior-cycle PBU payout at 133% reflect execution against Century Vision despite industry headwinds .