Sarah Tam
About Sarah Tam
Sarah Tam, age 51, is Chief Merchant Officer at Rent the Runway (RENT), a role she has held since August 2017 after serving as SVP of Merchandising & Planning from February 2015 to August 2017 . She spent 19 years at Saks Fifth Avenue, culminating as VP DMM leading Women’s Designer RTW, Bridal & Evening, and holds a B.S. in Business Administration and Management from Geneseo University . Her annual incentive structure is tied primarily to company-wide net revenue and free cash flow (70%), with the remainder to individual goals (30%), and she is eligible for a transaction bonus plan with allocations tied to free cash flow and deal completion . Her base salary is $500,000 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Rent the Runway | Chief Merchant Officer | Aug 2017–Present | Leads merchandising strategy across e-commerce and stores, overseeing designer categories and inventory planning . |
| Rent the Runway | SVP, Merchandising & Planning | Feb 2015–Aug 2017 | Built RTR’s buying and planning functions ahead of scale-up . |
| Saks Fifth Avenue | VP DMM, Women’s Designer RTW, Bridal & Evening | 19 years (ending 2015) | Led creation, execution, and merchandising strategy across Women’s European & American Designer business; leadership roles in Luxury Handbags, Women’s Designer Shoes, Men’s Sportswear . |
Fixed Compensation
| Item | FY2024 | Notes |
|---|---|---|
| Base Salary ($) | $500,000 | Ms. Tam’s FY2024 base salary; current base remains $500,000 . |
| All Other Compensation ($) | $14,806 | Includes $13,800 401(k) match, $600 LTD premiums, $405.77 team-building souvenirs . |
Performance Compensation
Annual Incentive (FY2024)
| Metric | Weighting | Target | Actual | Payout Detail | Notes |
|---|---|---|---|---|---|
| Company net revenue + free cash flow | 70% | 35% of base salary ($175,000) | Earned $79,439 (45% of target) | Discretionary top-up $30,625; total payout 62.8% of target | Compensation Committee exercised discretion to increase payout . |
| Individual goals | 30% | Included within target above | Included in actual above | Included in payout above | Goals determined by Compensation Committee . |
Retention Bonus (Service-based; paid in FY2024 for FY2023 program)
| Program | Amount Paid (FY2024) | Payment Schedule | Notes |
|---|---|---|---|
| 2023 Retention Bonus | $375,000 | Paid in three installments on Feb 1, 2024; Apr 15, 2024; Jul 15, 2024 | In lieu of FY2023 annual incentive bonus; service-based condition (no notice before each payment date) . |
Long-Term Equity (RSUs)
| Grant Date | Award Type | Shares Granted | Vesting Schedule | Key Dates |
|---|---|---|---|---|
| Mar 15, 2024 | RSU | 16,250 | 8 equal quarterly installments beginning Jun 15, 2024 (time-based) | First vest Jun 15, 2024 . |
| Jul 11, 2023 | RSU (Option Exchange 2.5-for-1) | 6,213 | 8 equal quarterly installments over 2 years beginning Nov 1, 2023 (time-based) | First vest Nov 1, 2023 . |
| Apr 13, 2023 | RSU | 1,250 | 8 equal quarterly installments on quarterly anniversary of Mar 15, 2023 (time-based) | Quarterly vest schedule tied to Mar 15 anniversary . |
| Notes | — | — | No option awards outstanding as of Jan 31, 2025 | Reverse Split 1-for-20 effective Apr 2, 2024; values reflect split . |
Transaction Bonus Plan (Adopted 2024)
| Component | Pool Size | Tam Allocation | Mechanics | Conditions |
|---|---|---|---|---|
| Base Transaction Bonus | $12,500,000 | 10.1% | Paid upon qualifying transaction (as defined) | Must be employed through Transaction Agreement Date; prorating exceptions apply to CEO only . |
| Free Cash Flow Bonus | 50% of LTM FCF up to $12,500,000 | 10.1% | Based on most recent 12 months FCF immediately before closing | Same employment condition as above . |
Equity Ownership & Alignment
| Ownership Item | As of | Amount |
|---|---|---|
| Beneficial Ownership (Class A) | May 13, 2025 | 21,037 shares (<1%) |
| Composition | May 13, 2025 | 19,006 direct shares + 2,031 RSUs vesting within 60 days |
| Outstanding Unvested RSUs | Jan 31, 2025 | 10,155 (3/15/2024 grant); 2,329 (7/11/2023 exchange); 1,250 (4/13/2023 grant) |
| Options | Jan 31, 2025 | None outstanding |
| Ownership Base | May 13, 2025 | 3,866,254 Class A shares outstanding (for % calc reference) |
Vesting cadence implies quarterly share deliveries from RSUs, which can create periodic supply overhang; next vest dates follow the schedules above .
Employment Terms
| Term | Detail |
|---|---|
| Offer Letter | January 12, 2015 offer letter for SVP, Head of Merchandising & Planning (“CMO Letter”); initial base salary $300,000, subsequently increased to $500,000; initial and future stock option grants at Board discretion . |
| At-Will Employment | Executive employment is at will and may be terminated at any time . |
| FY2024 Annual Bonus Eligibility | Target 35% of base salary; metrics as above . |
| Severance (No Change in Control) | If terminated without cause or resigns for good reason: 1.0x current base salary; prorated annual bonus based on actual company and individual goal achievement; up to 12 months COBRA . |
| Severance (Change in Control; double trigger) | If terminated without cause or resigns for good reason from 3 months before to 12 months after a change in control: lump sum 1.0x base salary; 1.0x greater of (a) bonus earned based on actual achievement or (b) target bonus; up to 12 months COBRA; accelerated vesting of time-based awards; performance awards per applicable agreement . |
| Compensation Recovery | Compensation Committee administers the company’s compensation recovery (clawback) policy . |
| Tax Gross-Ups | Company generally does not provide tax gross-ups to NEOs . |
Investment Implications
- Alignment: Time-based RSU vesting with quarterly cadence creates regular potential stock supply; Tam’s beneficial ownership is under 1% with a mix of direct shares and near-term vesting RSUs, indicating moderate equity alignment and periodic vest-driven liquidity needs .
- Incentive Levers: Annual bonus tied to net revenue and free cash flow plus a discretionary component (used in FY2024) introduces judgment in payouts; the unique Transaction Bonus Plan provides a material cash incentive for deal execution and sustained FCF, potentially influencing strategic actions and near-term FCF focus .
- Retention/Severance: Double-trigger change-in-control protection with full acceleration of time-based awards and 1x salary+bonus provides meaningful retention through a potential transaction, but also lowers departure friction post-deal; baseline severance is 1.0x salary (non-CIC) supporting retention without excessive guarantees .
- Options/Overhang: No options outstanding as of FY-end reduces risk of repricing controversies; RSU-heavy equity mix signals lower risk tolerance versus options and consistent quarterly dilution from vesting .