Timmi Zalatoris

About Timmi Zalatoris

Timmi Zalatoris is Chief Human Resources Officer (CHRO) at Sprouts Farmers Market (SFM), age 49, appointed in March 2023; she joined Sprouts in 2017 after senior HR roles at Payless ShoeSource and earlier HR leadership at Collective Brands, Ferrell Companies, and Ferrellgas. She holds a B.A. in Anthropology from the University of Houston . Company performance context during her CHRO tenure includes FY2024 net sales of $7.7B (+13% YoY), comparable store sales +7.6%, EBIT $504.5M, diluted EPS $3.75, and strong 4-year TSR (value of initial $100 investment = $658.64 by 2024), with executive incentives tied to Plan EBIT and comps .

Past Roles

External Roles

Fixed Compensation

• Individual CHRO base salary, target bonus %, and actual bonus paid are not separately disclosed as Timmi is not a named executive officer (NEO) in the proxy .
• Company policy: base salaries targeted near median of comparable roles; executive target total direct compensation (TDC) positioned around market median; benefits same as other salaried team members; limited perquisites (company-paid health and life insurance premiums for certain executives) .
• Stock ownership guidelines: “other executive officers” must maintain beneficial ownership equal to 1× current annual base salary within five years of appointment; counting outright shares, unvested RSUs, vested in-the-money options, and spouse/dependent holdings; excludes unvested PSAs and unvested options .

Performance Compensation

• Annual cash bonus plan design: metrics are Plan EBIT (75% weight) and comparable store sales (25% weight); threshold minimums (Plan EBIT 95% of target; comps 97.5%), maximums (Plan EBIT 115%; comps 105%); payouts interpolated; executives have Target Bonus expressed as % of salary; 2024 results yielded 291% of Target Bonus for NEOs; CHRO plan participation follows same design though individual payout is not disclosed .

• Long-term equity: annual grants in 2024 were 50% performance shares (3-year Plan EBIT target; earn 90–200% of target shares; cliff vest at year 3), 25% RSUs (1/3 per year over 3 years), and 25% stock options (1/3 per year over 3 years; 7-year term; strike at grant close) .
• Cycle outcome: 2022-granted performance shares ended with 148% payout based on FY2024 Plan EBIT .

Equity Ownership & Alignment

• Ownership guidelines for executives: CHRO category requires 1× salary ownership within five years of appointment; counts outright shares, unvested RSUs, vested in-the-money options; excludes unvested PSAs/options .
• Clawback policy: adopted Nov 2023 per Rule 10D-1 and Nasdaq; allows recovery of erroneously awarded incentive-based compensation upon accounting restatement regardless of misconduct .
• Hedging/pledging: insider trading policy prohibits hedging or pledging transactions by directors, officers, or team members without approval from the Chief Legal Officer .
• Beneficial ownership: Timmi is not individually listed in the beneficial ownership table; directors and NEOs are shown, with all directors and executive officers as a group holding 1,070,931 shares (1.1%) as of March 24, 2025; individual CHRO holdings not disclosed .

Employment Terms

• Executive Severance and Change-in-Control Plan (applies to executive officers designated by the compensation committee):
  • Involuntary termination not in connection with a change in control (after 12 months tenure): other executive officers receive 1 year of base salary continuation and 1 year COBRA premium reimbursement (or until COBRA ineligible); CEO terms differ (2 years) .
  • Change-in-control double trigger (termination by company without cause or by executive for good reason within 24 months of CIC): other executive officers receive 2 years of base salary and 2 years COBRA reimbursement, plus an amount equal to target bonus at time of termination; CEO terms differ (3 years base and target bonus multiple) .
  • Equity treatment: unvested awards vest upon CIC only if not assumed by acquiror or upon qualifying termination within 24 months; death/disability vesting: options/RSUs vest in full; performance shares vest pro-rata at target or actual as specified .
• Equity grant practices: grants generally approved at first compensation committee meeting of fiscal year; effective ~10 business days after approval; new/promoted employee grants at next regular committee meeting; standard vesting schedules as above; grants not timed around filing dates or MNPI .
• Non-compete/non-solicit/garden leave: not disclosed for CHRO in the proxy .
• Deferred compensation and pension: none offered; executives participate in 401(k) with 50% match on first 6% of eligible compensation .

Performance & Track Record

• HR outcomes under SFM’s talent engine in 2024: ~3,300 new jobs created; ~33,200 leadership training hours; average store pay rate $20.59/hour; 54% store manager positions filled internally .
• Strategic alignment: “Inspire and Engage Our Talent” is a formal focus pillar within SFM’s growth strategy, with board-level oversight of human capital initiatives through the talent and compensation committee .

Compensation Committee Analysis (Context)

• Program governance: pay-for-performance philosophy; executive incentives linked to Plan EBIT and comps; strong say‑on‑pay support (85% approval in 2024 for FY2023 compensation) .
• Peer group benchmarking: 12-company retail/consumer peer group used in 2024; updated for 2025 (removed Big Lots and Designer Brands; added Williams‑Sonoma, Texas Roadhouse, Bloomin’ Brands) .
• ESG integration: interest rate reductions on credit facility tied to ESG; board committees oversee HCM, ESG disclosures, risk, and cybersecurity; CHRO contributes to HCM oversight and execution .

Investment Implications

• Alignment: CHRO compensation is governed by the same performance-driven framework (Plan EBIT, comps, multi-year PSUs/RSUs/options), with a formal clawback and ownership guideline of 1× salary—supportive of shareholder alignment and discipline .
• Retention risk: Double-trigger CIC protection (2× base + 2 years COBRA + target bonus for other executives) and standard 3-year vesting schedules provide retention value; pro‑rata retirement vesting for 2025 awards further reduces attrition risk for experienced executives .
• Selling pressure/pledging: Hedging/pledging restricted without legal approval; individual CHRO Form 4 activity and pledged shares are not disclosed in the proxy—monitor filings for insider activity to assess near-term pressure .
• Execution signals: 2024 company performance and incentive outcomes (291% annual bonus payout; 148% PSU cycle payout) reflect strong operational delivery; HR metrics (jobs, training, internal promotions) support SFM’s growth throughput, a key lever under CHRO leadership .
• Governance backdrop: Robust say‑on‑pay support and active committee oversight mitigate pay inflation and governance risk; continued peer benchmarking and ESG-linked financing indicate disciplined capital and HCM management .

Note: Where CHRO-specific dollar amounts or share counts are not disclosed in the DEF 14A, this report references company policy-level terms applicable to executive officers and documented plan mechanics. All individual compensation figures and equity holdings cited in tables pertain to NEOs; Timmi Zalatoris is not a NEO in the 2025 proxy .