Jack Preston
RHAbout Jack Preston
Jack Preston, age 51, is RH’s Chief Financial Officer (CFO) since March 2019, leading strategic and financial planning, accounting, treasury, tax, internal audit, investor relations, and overseeing legal, compliance, and technology functions. He previously served as SVP Finance & Chief Strategy Officer (Aug 2014–Mar 2019) and SVP Finance & Strategy (Apr 2013–Aug 2014); prior to RH, he was a Director in Bank of America Merrill Lynch’s consumer/retail investment banking group for over 12 years. He holds a Bachelor of Commerce from the Sauder School of Business at the University of British Columbia . During his tenure, RH’s cumulative TSR from FY2020–FY2024 reached 100.77%, with $100 invested on Jan 31, 2020 valued at $200.77 by FY2024; FY2024 GAAP net revenues grew 5.0% to $3.181B, GAAP operating margin was 10.1%, adjusted operating margin 11.3%, and diluted EPS was $3.62 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| RH | Chief Financial Officer | Mar 2019–present | Central finance leadership; expanded scope to legal, compliance, IT |
| RH | SVP Finance & Chief Strategy Officer | Aug 2014–Mar 2019 | Corporate strategy, finance; supported operating platform redesign |
| RH | SVP Finance & Strategy | Apr 2013–Aug 2014 | Finance and strategy leadership during brand/platform expansion |
| Bank of America Merrill Lynch | Director, Consumer & Retail Investment Banking | 12+ years (dates not disclosed) | Led consumer/retail IB coverage; M&A and capital markets expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | No public company directorships or external roles disclosed |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $865,385 | $925,000 (committee-maintained level; FY2023 proxy salary table reflects 53-week year) | $925,000 |
| Non-Equity Incentive (LIP) Paid ($) | $432,692 | $0 | $0 |
| Option Awards (Grant-Date Fair Value, $) | — | $2,371,824 | $2,512,920 |
| Perquisites ($) | $37,000 (car allowance $12,000; concierge medical $25,000) | $39,500 (car allowance $12,000; concierge medical $27,500) | $39,500 (car allowance $12,000; concierge medical $27,500) |
Performance Compensation
| Element | Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|---|
| Annual Cash (LIP) – FY2024 | Adjusted Income | 100% company-level | Not disclosed | Company did not reach achievement level | 0% of eligible base salary | Paid annually; FY2024 payout set at 0% |
| Equity – FY2024 | Stock Options (15,000) @ $267.09 | N/A | N/A | Granted Apr 11, 2024 | $2,512,920 grant-date fair value | 7-year back-end vest: 10% yrs 1–3; 15% yrs 4–5; 20% yrs 6–7; 10-year expiry |
Multi-year LIP achievement history (company-wide):
| Year | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|---|---|
| Achievement Level | 170% | 175% | 200% | 200% | 100% | 0% | 0% |
FY2024 LIP parameters for Preston:
| Achievement Level | 20% | 100% | 200% |
|---|---|---|---|
| Bonus as % of Eligible Base | 10% | 50% | 100% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of May 16, 2025) | 69,287 shares; less than 1% of outstanding |
| Included in Beneficial Ownership | 66,500 shares issuable upon option exercise within 60 days |
| Stock Ownership Guidelines | Executives must own ≥2× base salary; compliance across all senior executives |
| Hedging/Pledging | Prohibited by Insider Trading Policy (short sales, hedging, pledging) |
| 10b5-1 Plans | Permitted with preclearance; Form 4 disclosure practice noted |
Outstanding options (as of Feb 1, 2025):
| Grant | Exercisable | Unexercisable | Exercise Price | Expiration | Vesting Schedule (summary) |
|---|---|---|---|---|---|
| Apr 2, 2019 | 42,000 | 28,000 | $101.25 | Apr 1, 2029 | 7-yr vest; 20% in yrs 6–7; fully vested by Apr 2, 2026 |
| Apr 29, 2020 | 4,500 | 5,500 | $154.82 | Apr 28, 2030 | 7-yr vest; 15% yr 5; 20% yrs 6–7; fully vested by Apr 29, 2027 |
| Jun 9, 2023 | 1,500 | 13,500 | $264.27 | Jun 8, 2033 | 7-yr vest; 10% yrs 2–3; 15% yrs 4–5; 20% yrs 6–7 |
| Apr 11, 2024 | — | 15,000 | $267.09 | Apr 10, 2034 | 7-yr vest; 10% yrs 1–3; 15% yrs 4–5; 20% yrs 6–7 |
Insider transactions and vesting cadence:
- FY2024 option exercises: 6,250 shares; value realized $1,966,875 .
- As of Jan 31, 2025, RH stock closed at $419.11; Preston’s outstanding grants (exercise prices $101.25, $154.82, $264.27, $267.09) were in-the-money at that date, implying potential future selling pressure around annual vest dates depending on liquidity needs and precleared plans .
Employment Terms
| Term | Details |
|---|---|
| CFO Role | Since March 2019 |
| Compensation Protection Agreement | Executed March 29, 2019 |
| Severance (No Cause/Good Reason) | 12 months base salary; prorated bonus at midpoint for year of termination (general terms); FY2024 table shows $0 bonus given 0% payout |
| COBRA | Company pays portion at active-employee rate for 12 months |
| Change-of-Control | No single-trigger benefits under company practices; specific CoC terms for Preston not separately disclosed |
| Non-Compete | During employment, may not work for/engage with competitors |
| Non-Solicit | 12 months post-employment (customers/suppliers) |
| Clawback | Policy adopted Oct 2, 2023 under Rule 10D-1; recovery of erroneously awarded incentive comp tied to financial reporting measures |
| Insider Trading Policy | Trading blackouts; preclearance for VPs+; anti-hedging/anti-pledging; 10b5-1 plans allowed with preclearance and Form 4 disclosure practice |
Compensation Structure Analysis
- Shift to options with long, back-end-loaded 7-year schedules strengthens retention and long-term alignment; Preston received 15,000 options in FY2024 and 20,000-equivalent schedules across earlier grants with significant vesting in years 4–7 .
- Annual cash incentive (LIP) strictly tied to Adjusted Income; FY2024 paid 0%—reinforces pay-for-performance discipline in a downcycle .
- No tax gross-ups and no single-trigger CoC benefits reflect investor-friendly practices; clawback instituted per SEC/NYSE rules .
Governance, Peer Benchmarking, and Say-on-Pay
- Compensation Committee: Leonard Schlesinger (Chair), Mark Demilio; independent consultant Mercer engaged since 2017 for market checks and plan design .
- Benchmarking approach: No formal peer benchmarking; market checks across tech, disruptive growth, retail/consumer; emphasis on Bay Area executive markets .
- Say-on-Pay: ~96% approval at the June 27, 2024 meeting; Board recommends “FOR” say-on-pay in 2025 .
Performance & Track Record
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| GAAP Net Revenues ($B) | 3.029 | 3.181 (+5.0% YoY) |
| GAAP Operating Margin (%) | 12.1 | 10.1 |
| Adjusted Operating Margin (%) | 13.0 | 11.3 |
| GAAP Net Income ($M) | 128 | 72 |
| Diluted EPS ($) | 5.91 | 3.62 |
| Free Cash Flow ($M) | (67) | (214) |
| Net Debt ($B) | — | 2.594 (ex. non-recourse real estate loans) |
Investment Implications
- Alignment: Preston’s compensation is heavily equity-based with long-dated, back-end-loaded options and strict bonus ties to company profitability; combined with ownership guidelines and anti-hedging/pledging policies, this indicates strong alignment with long-term shareholder value creation .
- Selling pressure/vesting: Multiple in-the-money option tranches and annual vesting from 2019/2020/2023/2024 grants could create periodic supply as tranches vest—monitor Form 4s and 10b5-1 plans around vest dates for signals .
- Retention risk: Severance is moderate (12 months salary) without equity acceleration; extended vesting schedules increase retention but also defer realizable value, balancing retention vs liquidity considerations .
- Pay-for-performance: Two consecutive years of 0% LIP payout (FY2023–FY2024) reflect discipline; equity incentives remain the primary upside lever tied to share price performance, making Preston’s realized comp sensitive to execution on growth/margin initiatives and macro housing cycle .