Linda Findley

About Linda Findley

Linda A. Findley (age 52) became President, CEO, and a director of Sleep Number on April 7, 2025; she was nominated at the 2025 annual meeting for a term expiring in 2028 and serves as a non‑independent director under an independent Chair governance model . She holds a Master’s in Journalism from UNC–Chapel Hill and a B.A. in Corporate Communications from Elon University, and previously led Blue Apron’s turnaround through its 2023 sale and accelerated growth and international expansion at Etsy as COO . 2024 company performance sets Linda’s baseline: net sales $1.7B (-11% y/y) and adjusted EBITDA $119.6M (-6% y/y), with 2025–2027 incentives tied to multi‑year Net Sales and Net Operating Profit (NOP) goals plus an rTSR modifier .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Inducement and Ongoing Equity

AIP metric design: historically Adjusted EBITDA with a Shared Strategic Objective modifier (payout range 25%–200% of target), but 2025 AIP metric specifics for the CEO were not detailed beyond target/threshold/max percentages in the offer letter .

Vesting Schedule (Inducement Grants)

Equity Ownership & Alignment

• Stock ownership guidelines: CEO must hold shares equal to 5x base salary within five years; executives must retain 50% of net shares until reaching guideline .
• Hedging/pledging: Prohibited for directors and executive officers (no hedging, short sales, or pledging) .
• Open‑market share purchase: After‑tax proceeds from the first sign‑on cash installment required to be used to buy SNBR stock, increasing alignment and near‑term insider buying .
• Beneficial ownership: As of the Feb 22, 2025 beneficial ownership table, Linda had not yet joined; her inducement equity sizes are disclosed above, but her reportable beneficial ownership as an officer/director will be updated via future filings .

Employment Terms

Board Governance

• Role and independence: Linda is CEO and a director (not Chair); the Board separated Chair/CEO with Phillip M. Eyler as independent Chair after the 2025 annual meeting, addressing dual‑role independence concerns; during combined roles the Board used a Lead Director, but that is no longer needed post‑separation .
• Committees: Board committees (Audit; Management Development & Compensation; Corporate Governance & Nominating; Capital Allocation & Value Enhancement) are composed of independent directors; the CEO does not serve on committees .
• Director compensation: Employee directors receive no additional director pay; non‑employee director program is separate .
• Governance refresh: Board declassification and elimination of supermajority requirements were proposed/advanced for 2025–2028, enhancing shareholder rights .

Compensation Structure Analysis

• Pay mix and risk: Heavy equity component with multi‑year PSUs tied to Net Sales/NOP and an rTSR modifier plus a price‑modified RSU promotes alignment; no stock options in 2024/2025 grants aligns with share conservation and reduces option‑driven risk .
• Guaranteed vs at‑risk: AIP and PSUs are performance‑based; inducement RSU with price multiplier introduces explicit market‑price accountability; annual LTI from 2026 maintains 50/50 PSUs/RSUs .
• Clawbacks and ownership: Nasdaq‑compliant clawback and strict anti‑hedging/pledging policies reduce misalignment risk; 5x salary ownership guideline with holding requirements further aligns incentives .
• Peer benchmarking and oversight: Target pay set around market median with FW Cook advising; peer group refreshed (e.g., removing Conn’s after bankruptcy; adding Haverty’s) .
• Shareholder feedback: Say‑on‑pay approval was 82.7% in 2024, modestly below 5‑year average, prompting design updates (e.g., 2025 PSU introduces rTSR modifier) .

Performance & Track Record

• Turnaround agenda: In early public communications as CEO, Linda framed SNBR as a turnaround focused on resetting cost structure, rebuilding marketing efficiency, and optimizing product/value/distribution while maintaining covenant compliance; $130M 2025 cost‑savings program targeted .
• 2024 baseline: Net sales $1.7B (-11%), adjusted EBITDA $119.6M (-6%), with ROIC context disclosed in PSU framework; 2022 PSUs paid 0% based on 2022–2024 results, underscoring performance rigor .
• Leadership moves: CFO transition to an interim CFO in July 2025 was stated as unrelated to financial reporting concerns, with explicit focus on debt structure and covenant compliance during turnaround .

Equity Ownership & Alignment (Additional Detail)

Employment Contracts, Severance & CIC Economics

Say‑on‑Pay & Shareholder Engagement

• Say‑on‑pay approval 2024: 82.7% vs 5‑year average 88.9%; 2025 program added rTSR modifier to PSUs to further align with shareholder outcomes .
• Engagement: Targeted outreach to investors representing ~56% of shares before 2025 AGM; governance changes (declassification; eliminating supermajorities) reflect investor feedback .

Investment Implications

• Alignment and retention: Large, multi‑year equity inducement with price‑based RSU multiplier, rTSR‑modified PSUs, 5x ownership guideline, and required open‑market stock purchase point to strong alignment; pro‑rata acceleration and robust severance/CIC terms lower retention risk during turnaround .
• Performance rigour: Historical PSU zero payout (2022 tranche) and new rTSR overlay suggest higher hurdle integrity; if turnaround lags, PSU value could be impaired—curbing windfalls .
• Supply/dilution watch: Three annual RSU tranches (including a price‑modified block) create predictable vesting windows that could introduce selling pressure; however, the mandated stock purchase in 2025 offsets near‑term supply and signals confidence .
• Governance mitigants: Separation of Chair/CEO, independent committees, declassification and supermajority eliminations improve board accountability and reduce dual‑role risk .
• Turnaround execution: Management commentary and cost actions highlight disciplined expense control and covenant focus; watch progress on marketing efficiency, product mix, and sequential topline stabilization as near‑term catalysts/risk checks .