Heather Isely

About Heather Isely

Heather Isely is Executive Vice President, Corporate Secretary, and a Class III Director at Natural Grocers by Vitamin Cottage, Inc. (NGVC). She joined the company in 1989 and has served as EVP and Corporate Secretary and as a director since 1998; she is 59 years old . Company performance under current leadership shows net sales growth from $1,089.6M in FY2022 to $1,241.6M in FY2024 (+8.9% YoY in FY2024), net income rising from $21.4M to $33.9M, EBITDA increasing from $60.6M to $77.9M, and cumulative TSR moving from 98.68 to 303.80 over 2022–2024 . NGVC’s Pay vs Performance table reports CAP amounts and financial measures including TSR and Net Income; diluted EPS for FY2024 was $1.47 .

Company Performance (context)

Past Roles

External Roles

Fixed Compensation

Notes: “All Other Compensation” includes 401(k) match, Vitamin Bucks, company-paid insurance premiums, and work anniversary pay .

Performance Compensation

There is no long-term equity incentive program for NGVC NEOs (other than the former/new CFO cases noted below). Bonuses for Heather Isely were discretionary, based on contributions to strong financial/operating performance and leadership of HR and corporate functions (no formulaic plan disclosure) .

Total Compensation:

Key features:

• No RSUs/PSUs/options were granted to Heather in FY2024; NGVC states NEOs (other than CFO) already have substantial equity stakes and do not participate in equity incentive programs .
• Compensation committee did not use a FY2024 peer group; FW Cook advised on FY2023 with a 19-company peer set; the company intends to engage an independent consultant ahead of the next advisory vote (2027) .
• Stockholders approved FY2023 NEO compensation and adopted a triennial say-on-pay, next expected in 2027; given strong support, NGVC continued the compensation framework .

Equity Ownership & Alignment

Family/control context:

• Isely Family Group beneficially owns ~58.1% (13,324,155 shares) and controls director elections via a Stockholders Agreement; parties agree to vote consistent with recommendations of at least three of Kemper, Zephyr, Heather, and Elizabeth Isely; voting and sale limitations apply; the agreement expires when ≥50% of fully-diluted stock is owned by non-Isely group members .
• Registration rights allow two or more of Kemper/Zephyr/Heather/Elizabeth Isely to demand shelf or demand registrations and piggyback rights under specified conditions .

Board Governance

• Role: Class III Director (term expiring 2027); Executive Vice President and Corporate Secretary since 1998 .
• Committee Roles: Chair, Compensation Committee; members include Heather Isely (Chair), Kemper Isely, Sandra Buffa, and Edward Cerkovnik; 4 meetings in FY2024; one executive session .
• Audit Committee: Independent members are Buffa, Cerkovnik, and Rooney; Rooney is chair; 5 meetings and 4 executive sessions in FY2024 .
• Board Meetings: Board met 5 times; each director attended at least 75%; the Board held 4 executive sessions of non-management directors; all eight directors attended the 2024 annual meeting .
• Independence: Heather Isely is not independent (employee-director); NGVC is a “controlled company,” has elected exceptions: not a majority independent board, compensation committee includes non-independent directors, and no nominating committee (Board recommends candidates) .
• Board Leadership: Chairman is also Co-President (Kemper Isely); no Lead Independent Director; Rooney serves as presiding director at executive sessions of non-management directors .

Director compensation context (for independent directors only):

• Independent directors receive cash retainers and annual RSU grants; equity ownership guideline is 3x cash retainer within five years; Heather, as an employee-director, does not receive independent director compensation .

Employment Terms

• Employment Agreement: NGVC states it does not have employment agreements with NEOs (including Heather) .
• Severance/Change in Control: No cash severance or change-in-control cash arrangements for NEOs in FY2024; CFO transitions noted separately (former CFO RSU acceleration at retirement; new CFO RSUs vest upon change in control per Omnibus Plan definitions) .
• Clawback: Board adopted incentive compensation recoupment in line with Exchange Act Section 10D and NYSE listing standards .
• Benefits: NEOs participate in broad employee plans (401(k) with discretionary match, insurance, Vitamin Bucks, birthday pay); select perquisites may include spousal insurance and reimbursement of certain medical expenses .

Related Party Transactions (governance/compliance)

• Lease Payments: FY2024 payments to family-controlled entities—Land Trust Lease $0.3M, Chalet Leases $0.9M, FTVC Lease $0.1M; audit committee approved; company asserts terms reflect prevailing market rates .
• Stockholders Agreement and Registration Rights: Family control over elections and liquidity mechanics outlined above; audit committee reviews related party transactions per policy .
• Independent Director Related Party: Teakoe vendor relationship (Cerkovnik minority shareholder/director); ~$250,000 purchases in FY2024; approved by audit committee .

Risk Indicators & Red Flags (facts)

• Controlled company status; not majority independent board; compensation committee includes insiders; no nominating committee .
• Discretionary bonuses (no formulaic disclosure); no executive stock ownership guidelines for NEOs (company rationale: significant holdings) .
• Family leasing arrangements and voting control via Stockholders Agreement .
• Insider trading policy requires pre-clearance, imposes blackout periods, and pre-clearance for hedging; pledging is cautioned but not outright prohibited .

Compensation Committee Analysis

• Members and Backgrounds: Chaired by Heather Isely (EVP/Corporate Secretary); members include independent directors Buffa and Cerkovnik, and Kemper Isely; FW Cook engaged in 2023; no consultant engaged for FY2024 .
• Consultant Conflicts: Not disclosed; FW Cook served as independent consultant in 2023; none in 2024 .
• Process Notes: Co-Presidents provide pay recommendations; committee oversees Omnibus Plan and disclosure; intends to engage consultant ahead of next say-on-pay .

Say‑on‑Pay & Shareholder Feedback

• 2024 Annual Meeting: Stockholders approved, on an advisory basis, compensation paid to NEOs in FY2023; frequency set to every three years; next advisory vote expected 2027; company retained compensation approach given strong support .

Work History & Career Trajectory

• Time at NGVC: Joined in 1989; EVP & Corporate Secretary and director since 1998; broad internal operational and HR leadership roles including nutrition education leadership .

Director Service Summary

Equity Overhang / Trading Pressure Context

• No executive equity grants to Heather in FY2024; no options outstanding; none of her shares are pledged; Insider Trading Policy imposes blackout/pre-clearance, reducing opportunistic trading risk .
• Family registration rights enable potential secondary offerings under specified thresholds and intervals (possible liquidity events), but subject to agreement conditions; voting agreement centralizes director election control .

Investment Implications

• Alignment: Heather’s 4.6% personal stake and lack of executive equity grants reduce near-term insider selling pressure; no pledging and a formal clawback policy mitigate risk; however, absence of executive ownership guidelines and discretionary bonuses (without metric disclosure) limit pay-for-performance transparency .
• Governance Quality: Controlled company status, insider-led compensation committee, and no nominating committee elevate governance risk; board lacks a Lead Independent Director, though audit committee is fully independent and active .
• Retention/Change-of‑Control Economics: No employment or severance agreements for Heather; no cash change-of‑control protections; this lowers parachute risk for shareholders but may limit retention levers; CFO terms explicitly include change-of‑control vesting (not applicable to Heather) .
• Related Party Exposure: Family leases appear modest in scale and audit-committee approved, but continued family control (58%+) and registration rights imply persistent control premium/anti‑takeover dynamics and potential overhang in liquidity events .
• Performance Backdrop: Strong recent operating performance (8.9% sales growth, 46% net income growth, 28.6% EBITDA growth in FY2024) supports discretionary payouts; investors should monitor future disclosure on specific bonus metrics and any reintroduction of equity incentives .